Connecting the world’s
most dynamic markets
Annual Report 2024
Connecting the world’s most dynamic markets
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 strategy combines different
iated cross-border capab
il
it
ies and leading
wealth management expertise. Our purpose is to drive commerce and
prosperity through our unique divers
ity.
This is underpinned by our brand promise, here for good.
Strategic report
Financ
ial KPIs
1
Return on tangible equity (RoTE)
11.7
%
160bps
Underlying basis
9.7
%
130bps
Reported basis
Common Equity Tier 1 ratio (CET1)
14.2
%
19bps
Above our 13-14% target range
Total shareholder return
47.5
%
2023: 9.4%
Non-financial KPIs
2
Divers
ity and
inclus
ion: women
in senior roles
4
33.1
%
0.6ppt
Mobil
is
ing sustainable finance
$121bn
$34bn
Employee net promoter score (eNPS)
20.44
5.42 points
Other financial measures
1, 3
Operating income
$19,696
m
14%
Underlying basis
$19,543
m
10%
Reported basis
Profit before tax
$6,811
m
21%
Underlying basis
$6,014
m
19%
Reported basis
Earnings per share
168.1
cents
39.2
cents
Underlying basis
141.3
cents
32.7
cents
Reported basis
Tangible net asset value
per ordinary share
1,541
cents
148 cents
1
Reconcil
iat
ions from underlying to reported and defin
it
ions of alternative performance measures can be found on pages 54 to 56.
2
For more informat
ion on our culture of
inclus
ion see page 40, and for more on our Susta
inab
il
ity Aspirat
ions see page 64.
3
Year-on-year growth on Operating income and Profit before tax is on constant currency basis.
4
Senior leadership is defined as Managing Directors and Band 4 roles (includ
ing the Group Management Team).
01
Standard Chartered
– Annual Report 2024
Strategic report
In this report
Unless another currency is specif
ied, the word ‘dollar’ or symbol
‘$’ in this document means US dollar and the word ‘cent’ or
symbol ‘c’ means one-hundredth of one US dollar. Disclosures
in the Strategic report, Financ
ial rev
iew, Sustainab
il
ity
review, Directors’ report, Risk review and Capital review and
Supplementary informat
ion are unaud
ited unless otherwise
stated. Unless context requires with
in the document, ‘Ch
ina’
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, China,
Hong Kong, Japan, Korea, Macau and Taiwan; Africa includes
Botswana, Côte d’Ivoire, Egypt, Ghana, Kenya, Maurit
ius, N
iger
ia,
South Africa, Tanzania, Uganda and Zambia. The Middle East
includes Bahrain, Iraq, Oman, Pakistan, Qatar and Saudi Arabia
and the UAE. Europe includes Belgium, Falkland Islands, France,
Germany, Jersey, Luxembourg, Poland, Sweden, Türkiye and the
UK. The Americas includes Argentina, Brazil, Colombia and the
US. 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 PLC
is incorporated in England and Wales
ited l
iab
il
ity, and
is headquartered in London. The Group’s head office provides
guidance on governance and regulatory standards. Standard
Chartered PLC Stock codes are: LSE STAN.LN and HKSE 02888.
Sustainab
il
ity and ESG reporting
The Group includes Environmental, Social and Governance
(ESG) and sustainab
il
ity informat
ion
in this Annual Report,
provid
ing
investors and stakeholders with an understanding
of the impl
icat
ions of relevant sustainab
il
ity-related risks
and opportunit
ies and progress aga
inst our object
ives.
We have observed our obligat
ions under: (
i) sections
414CA and 414CB of the UK Companies Act 2006; (i
i)
the UK’s Financ
ial Conduct Author
ity’s List
ing Rules
in
respect of climate-related disclosures; and (i
i
i) the ESG
Reporting Guide contained in Appendix C2 to the Rules
Governing the List
ing of Secur
it
ies on the Stock Exchange
of Hong Kong Lim
ited. We have made d
isclosures
consistent with the Task Force on Climate-Related
Financ
ial D
isclosures (TCFD) recommendations and
recommended disclosures throughout this Annual Report.
In preparing this report we have given considerat
ion to
(but do not align in full with) the guidance provided by the
International Sustainab
il
ity Standards Board (ISSB) Standards
finalised
in 2023: IFRS S1 and IFRS S2, noting that IFRS S2,
although largely based on TCFD, requires a more granular
level of disclosure. IFRS S1 and S2 are voluntary standards and
compliance is not yet required in the Group’s list
ing locat
ions.
Addit
ionally, we publ
ish an ESG reporting index against
the voluntary Global Reporting Init
iat
ive (GRI) Universal
Standards and select GRI Topic Standards, and the World
Economic Forum Stakeholder Capital
ism Metr
ics framework.
The Group’s sustainab
il
ity-related
disclosures can be accessed via
sc.com/sustainab
il
ityl
ibrary
Alternative performance measures
The Group uses a number of alternative performance
measures in the discuss
ion of
its performance. These
measures exclude certain items which management believes
are not representative of the underlying performance
of the business and which distort period-on-period
comparison. They provide the reader with ins
ight
into how
management measures the performance of the business.
For more informat
ion on
Standard Chartered please vis
it
sc.com
All informat
ion presented
in the Group Chairman’s
statement, and Group CEO and CFO reviews are on an
underlying basis unless otherwise stated. A reconcil
iat
ion
from underlying to reported and defin
it
ions of alternative
performance measures can be found on pages 54 to 56.
About this report
Strategic report
02
Who we are and what we do
04
Where we operate
06
Group Chairman’s statement
08
Group Chief Executive’s review
12
Key performance ind
icators
14
Market environment
18
Our strategy
19
Business model
21
Client segment reviews
24
Group Chief Financ
ial
Officer’s review
27
Group Chief Risk Officer’s review
35
Stakeholders
42
Sustainab
il
ity overview
45
Viab
il
ity statement
Financ
ial rev
iew
48
Financ
ial summary
54
Underlying versus reported results
reconcil
iat
ions
56
Alternative performance measures
Sustainab
il
ity review
58
Sustainab
il
ity review
69
Sustainable finance
74
Climate
90
Nature
91
Social impact
93
Managing Environmental and Social Risk
98
Sustainab
il
ity governance
Directors’ report
104
Group Chairman’s governance overview
105 Board of Directors
110
Management Team
113
Corporate governance
143
Directors’ remuneration report
174
Addit
ional remunerat
ion disclosures
182
Other statutory and regulatory
disclosures
192
Statement of directors’ responsib
il
it
ies
Risk review and Capital review
196
Enterprise Risk Management Framework
201 Princ
ipal r
isks
207 Risk profile
256 Climate Risk
270 Capital review
Financ
ial statements
276
Independent Auditor’s report
287 Financ
ial statements
294
Notes to the financial statements
Supplementary informat
ion
382 Supplementary financial
informat
ion
388
Supplementary people informat
ion
393 Supplementary sustainab
il
ity informat
ion
396 Shareholder informat
ion
399 Glossary
58
Stakeholders
35
08
Sustainab
il
ity review
Our strategy
18
Client segment
reviews
21
Group Chief
Executive’s review
02
Standard Chartered
– Annual Report 2024
Strategic report
segments, with support from
Who we are and what we do
Our client-facing businesses are supported by our global functions, which work together to ensure
the Group’s operations run smoothly.
$7,816m
Underlying basis
$7,839m
Reported basis
$11,818m
Underlying basis
$11,863m
Reported basis
$183m
Underlying basis
$183m
Reported basis
$(121)m
Underlying basis
$(342)m
Reported basis
Our client segments
Global functions
Strategy & 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 function plays a crit
ical role
in how we develop, execute
and communicate our strategy and build and deploy our skills and resources to transform the
Bank and achieve sustainable growth.
Group Internal Audit
An independent function with the primary role of supporting the Board and Management
Team, and protecting the assets, reputation and sustainab
il
ity of the Group.
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.
Compliance, Financ
ial
Crime & Conduct Risk
(CFCR)
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.
Total operating income
$19,696m
Underlying basis
$19,543m
Reported basis
1.
3.
2.
Operating income
Client segment
Group Chief
Financ
ial Office (GCFO)
Partners with the business and collaborates with other functions to execute on the
Group strategy. GCFO comprises four areas: Finance, Treasury, Investor Relations and
Corporate Development.
Who we are and what we do
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.
1. Corporate & Investment
Banking (CIB)
Supports large corporations, development
organisat
ions, governments, banks and
investors in accessing cross-border trade
and investment opportunit
2. Wealth & Retail
Banking (WRB)
Serves the local and internat
ional bank
ing
needs of clients across the wealth continuum
from Personal to Prior
ity and Pr
ivate Banking,
as well as small and medium enterprises.
3. Ventures
Promotes a culture of innovat
ion across
the Group, invest
ing
in disrupt
ive financial
technology and creating alternative
financial serv
ice business models, as well as
growing our dig
4. Central & Other Items
03
Standard Chartered
– Annual Report 2024
Strategic report
Valued behaviours
We set long-term ambit
ions to address some of the
most pressing societal challenges of our time.
Climate change, deepening inequal
ity and the
inequ
it
ies of globalisat
ion
remain as urgent today as ever before.
Accelerating
Zero
Lift
ing
Partic
ipat
ion
Resetting
Globalisat
ion
Our culture
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 – to drive commerce and prosperity through our
unique divers
ity. We del
iver innovat
ive solut
ions that create
long-term value for our clients and the communit
ies w
ith
in
which 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 drive business growth.
We are guided by our valued behaviours, our Stands and
our brand promise, here for good.
Our valued behaviours are key to deliver
ing on our strategy.
As the guid
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,
allowing us to take opportunit
ies to go above and beyond for our cl
ients.
Do the right thing
Doing the right thing means acting
in the best interests of our clients,
colleagues and stakeholders.
Never settle
We’re ambit
ious
in our constant
pursuit of excellence and market-
leading innovat
ion.
Better together
We build relationsh
ips w
ith our
clients and each other so we can
share our unique capabil
it
ies.
Read more on our Stands
sc.com/who-we-are
Our Stands
04
Standard Chartered
– Annual Report 2024
Strategic report
Where we operate
We operate in the world’s most dynamic markets, which set the pace
for global growth and prosperity.
Americas
• Argentina
• Brazil
• Colombia
• US
Europe
• Belgium
• Falkland Islands
• France
• Germany
• Jersey
• Luxembourg
• Poland
• Sweden
• Türkiye
• UK
Middle East
• Bahrain
• Iraq
• Oman
• Pakistan
• Qatar
• Saudi Arabia
• UAE
Africa
• Botswana
• Côte d’Ivoire
• Egypt
• Ghana
• Kenya
• Maurit
ius
• Niger
ia
• South Africa
• Tanzania
• Uganda
• Zambia
Asia
• Australia
• Bangladesh
• Brunei
• Cambodia
• Hong Kong
• India
• Indonesia
• Japan
• Korea
• Laos
• Macau
• China
• Malaysia
• Myanmar
• Nepal
• Phil
ipp
ines
• Singapore
• Sri Lanka
• Taiwan
• Thailand
• Vietnam
Where we operate
Our locations
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 to 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 set us apart.
Markets across the world
53
05
Standard Chartered
– Annual Report 2024
Strategic report
Together,
we run further
Our marathon series covered new ground in 2024.
We launched the 10th race in our global marathon
portfolio, the Standard Chartered Hanoi
Marathon Heritage Race, which commemorates
our 120-year presence in Vietnam.
At a special edit
ion race
in Hong Kong, we gave
runners a once-in-a-lifet
ime opportun
ity to race
on the runway at Hong Kong International Airport.
Across the year, more than 244,000 partic
ipants
took part in our marathons and races from
Shanghai to Nairob
i.
Our global marathon series demonstrates our
presence, network and experience in the world’s
most dynamic markets.
Read more at
sc.com/marathons
06
Standard Chartered
– Annual Report 2024
Strategic report
Group Chairman’s statement
Group Chairman’s statement
Throughout 2024, we made demonstrable progress in
deliver
ing on our strategy, as ev
idenced by our financ
ial
performance for the full year. Our high-growth markets, where
we have prior
it
ised investment, continue to deliver strongly and
provide the basis for us to pursue our role as a super connector
across the established and emerging global corridors of trade,
investment and wealth.
This performance was achieved in a year when the geopolit
ical
environment saw the transit
ion and transfer of power as
roughly half the world’s population partic
ipated
in the global
election ‘super cycle’, with approximately two bill
ion el
ig
ible
voters in over 70 national elections. Despite many changes,
and in some cases disrupt
ion, our strategy endures. Th
is has
been driven by our own internal disc
ipl
ine as well as our tireless
execution in deliver
ing outstand
ing service to our clients. The
leadership of our Group Chief Executive, Bill Winters, and his
Management Team continues to insp
ire confidence and focus
across the organisat
ion. The
ir expertise and dedicat
ion rema
in
essential to our success, and my deepest thanks go to each of
them and their teams.
The refinement of our strategy announced with our Q3 2024
results brings together two complementary strengths of our
business, which are well posit
ioned as dr
ivers of future growth:
the pursuit of
cross-border
opportunit
ies through our corporate
and investment banking capabil
ity and network; and an
unrelenting focus on the fast-growing
affluent
segment of
clients through our leading wealth management offering.
In sharpening our focus, it has likew
ise been necessary to
make changes to our business model, includ
ing the dec
is
ion
to reshape our mass retail business to focus on developing our
pipel
ine of future affluent and
internat
ional bank
ing clients,
and optim
ise our resource allocat
ion by exit
ing some markets.
While such changes are diff
icult, part
icularly where our
presence has been longstanding, we must consider where
we can have the greatest impact and where our capabil
it
ies
can be delivered both effic
iently and effect
ively in service
of future growth, value creation and the evolving needs of
our clients.
Performance with purpose
In my statement last year, I highl
ighted that our growth must
be achieved in a strong, safe and sustainable manner, while
mainta
in
ing both cost and capital disc
ipl
ine. I am delighted
to say that 2024 saw us mainta
in th
is level of rigour in our
approach. This led to an improvement in our return on tangible
equity reaching 11.7 per cent, which sets a notable milestone
for us ahead of our 2026 target of approaching 13 per cent.
When combined with income growth of 14 per cent on a
constant currency basis it becomes clear that our underlying
business is connected to meaningful opportunit
ies across
our markets.
The strength of our performance in 2024 has also been
observed in our share price over the period, which not only
reflects the progress we are making, but the renewed
confidence and understanding of our business in the eyes
of our investors and external stakeholders. The Board and
Group Management Team are pleased to see such results flow
through and remain committed to build
ing on th
is further.
This year, we are pleased to be able to provide an increased
full-year div
idend of 37 cents per share (a 37 per cent
increase)
and are announcing a further share buyback of $1.5 bill
ion,
in addit
ion to the $2.5 b
ill
ion already announced over the
course of the year. Overall, this amounts to a total of $4.9 bill
ion
announced since full-year 2023 results.
Across both Corporate & Investment Banking (CIB) and our
Wealth & Retail Banking (WRB) businesses, we are focused
on driv
ing
income growth in high-returning areas. In CIB, our
commitment to deepening our relationsh
ip w
ith financ
ial
inst
itut
ions and leveraging our unique network in support of
our corporate client base was underpinned by strong growth
in both our Global Markets and Global Banking business.
While in WRB, our decis
ion to make a $1.5 b
ill
ion
investment
commitment in service of the affluent client segment underlines
our role as a Bank that offers services throughout the full wealth
continuum. We are targeting $200 bill
ion
in net new money
and double-dig
it CAGR
in Wealth Solutions income over the
next five years, a business which saw a record performance in
2024, up 29 per cent at constant currency when compared with
2023, with double-dig
it growth
in both Investment Products
and Bancassurance.
Beyond financial performance, our purpose and brand prom
ise,
here for good, remain crit
ically
important in defin
ing who we
are as a business. They aid us in determin
ing our amb
it
ion and
help guide our decis
ion mak
ing. As a Group, we continue to
play our part in helping to address some of the most pressing
“The strength of our
performance reflects not
only the progress we are
making but stronger external
confidence and understanding
of our business”
Dr José Viñals
Group Chairman
07
Standard Chartered
– Annual Report 2024
Strategic report
societal changes through our Stands: Accelerating Zero, Lift
ing
Partic
ipat
ion and Resetting Globalisat
ion.
In this report we outline further progress against our net zero
roadmap as we disclose the inter
im targets and sc
ience-based
methodologies for our financed emiss
ions
in all 12 of the
high-emitt
ing sectors as defined by the Net-Zero Bank
ing
Alliance. The addit
ion of a target for the Agr
iculture sector
fulfils our commitment to target setting in support of our clients
as they navigate the transit
ion of the real-world economy. As a
reminder, 2025 is also the year in which we aim to be net zero in
our Scope 1 and 2 emiss
ions, an
important milestone in our own
net zero journey as a Group.
This year we also published the Group’s inaugural Transit
ion
Plan which outlines our approach to deliver this change and
achieve net zero by 2050, demonstrating to clients, suppliers,
customers and other key stakeholders that the bank has a
clear plan to deliver on the commitments we have made.
Our sustainable and transit
ion finance capab
il
it
ies are a
sign
ificant part of our commerc
ial offering and demonstrate
the value of our deep expertise in this space as a trusted,
expert adviser. The growth of this business and the broadening
divers
ity of our product offer
ing give us a leading advisory
capabil
ity that
is in high demand in our markets, as they look
to deliver progress against their own adaptation, transit
ion,
and sustainab
il
ity ambit
ions.
Confident and accountable
As a Board, our role is to ensure the highest standards in
corporate governance and to take a long-term view on how
we can responsibly achieve success for the Group, through
both our oversight and constructive partnership with the Group
Management Team.
As I reach the end of my nine-year term and prepare to step
down from the Board after this year’s Annual General Meeting
(AGM), I am especially proud that my successor comes from our
exist
ing non-execut
ives. I have every confidence that Maria
Ramos will build on the constructive partnership we have built
with the Group Management Team and in her abil
ity to lead
the Group in its next phase of growth. Under her stewardship,
I believe that the Group will continue to seek out opportunity,
leverage the talent of our people, remain client-centric and
resil
ient, and ensure we can successfully nav
igate the
challenges that may lie ahead.
In reflecting on my time with the Group, I look back to my
orig
inal pr
ior
it
ies when jo
in
ing. These were to deliver long-term
value by helping the Bank achieve its potential, safeguard and
strengthen its resil
ience; and to leave
in place an enhanced
model of governance. By these measures, I am proud of what
we have achieved, and grateful for the contribut
ion of the
many colleagues and partners over the years who were integral
in helping us to, collectively, make credible progress.
While such work is never complete in any organisat
ion, our
financial performance h
ighl
ights the value of our franch
ise.
And as we look to the future, we must set a renewed level of
ambit
ion. Our ab
il
ity to adapt and evolve
in a fast-changing
external and competit
ive env
ironment will be the measure of
our long-term success.
I would like to acknowledge the contribut
ion of my fellow Board
members during my tenure, and thank those who retired from
the Board. Since our last AGM, David Conner stepped down in
December 2024 after nine years. During his tenure we greatly
benefited from his ins
ights and expert
ise gained over many
years of working across some of our key markets. He has
likew
ise played a key role as a member of the Board and our
committees and led the Board Risk Committee with dist
inct
ion.
Importantly, we also welcomed new members to the Board.
This includes Diane Jurgens, who was announced last year,
and subsequently joined the Board
in March 2024, as well as
Lincoln Leong, who jo
ined the Board
in November 2024.
Each of our Board members brings valuable personal
perspectives and the weight of their experience in terms
of expertise in markets and industr
ies. The mult
i-faceted
divers
ity of our Board rema
ins crit
ically
important, and while
all appointments are based on merit, they must also be
representative of the diverse clients we serve and markets
in which we operate.
From possib
il
it
ies to prosper
ity
The early months of 2025 have already proven that, alongside
growth, success and opportunity, there is always risk.
Circumstances can and will change and what we consider to
be norms cannot always be taken for granted. As a Group, it is
incumbent on us to aid our clients through such circumstances,
to help them navigate the possib
il
it
ies that prov
ide a pathway
to growth and prosperity.
The world is in a period of transit
ion, from a western-led and
progressively more integrated global economy to an era
of ‘multi-alignment’ where major players may act more
independently and assertively. The long-running trends of
environmental, technological and demographic change are
being brought into sharper relief by these tensions. This is
re-shaping the way markets interact – and, in turn, the where,
how and who of globalisat
ion.
In 2024, we saw profound changes across geopolit
ics,
technology, and the need for a better and more sustainable
model of growth. The full scale of the AI opportunity started
to dawn on businesses and governments alike, with greater
appreciat
ion for how
incremental investments can drive
near-term growth and impact. In the context of ongoing
climate negotiat
ions, the planet exceeded the 1.5C warm
ing
threshold for the first time, bring
ing us close to a long-term
trend that may be irrevers
ible.
Our role is to help our clients, communit
ies and stakeholders
navigate transit
ion w
ith confidence, underpinned by the belief
that change is most powerful and inclus
ive when
it is delivered
in partnership. Although we expect global growth to slow
slightly in 2025, on the back of strong activ
ity
in Asia, Gulf
Cooperation Council markets and the US, there is persistent
uncertainty in the outlook, in large part because of the
geopolit
ical context.
This uncertainty will create new risks, but also new
opportunit
ies
in fast-growing trade corridors, sustainable
development, and cross-border wealth. This context isn’t new:
in recent years, trade routes have been rewired, with many
of our markets acting as a channel between east and west.
There are opportunit
ies for our bus
iness, anchored in our
footprint markets. And also for the world at large, as we have
seen concerted efforts to improve supply chain resil
ience,
includ
ing reduc
ing carbon footprints.
At the same time, we must guard against unnecessary frict
ion
that raises costs for all involved. We should all remember that,
over the last half a century, trade has been a key driver in
powering global economic growth, improv
ing l
iv
ing standards
and reducing household consumption costs. And open trade
and investment will be crucial if we are to leverage the full
benefits of the global technology transformation, and to
continue to invest in addressing climate change – includ
ing
in the resil
ience of markets most exposed to
its impacts.
I remain optim
ist
ic that, working together, businesses and
governments around the world can power world trade and
the next wave of global growth. In that, our role as a super
connector is crit
ical
in realis
ing our value as a Group that
operates in service of our clients and other stakeholders.
Dr José Viñals
Group Chairman
21 February 2025
08
Standard Chartered
– Annual Report 2024
Strategic report
Group Chief Executive’s review
Group Chief Executive’s review
Our team has worked hard to make our bank focused, strong
and profitable. We made good progress over the past several
years and 2024 marked further improvement. We have more
that we can do and remain focused on further strengthening
our business and growing our returns.
We are a global bank connecting corporate, 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. This dist
inct
ive proposit
ion puts us
in good stead
to help our clients navigate the dynamic condit
ions we saw
throughout the year.
As a result, we performed strongly in 2024, deliver
ing on our
target to continue to increase our return on tangible equity
(RoTE), posting 11.7 per cent for 2024, up 160 basis points on
2023, and we remain on-track to achieve our 2026 target of
approaching 13 per cent.
Income of $19.7 bill
ion was up 14 per cent on a constant
currency basis, supported by an encouraging performance
across our big engines of non-net interest income, includ
ing
a record performance in Wealth Solutions, with income up
29 per cent, and double-dig
it growth
in Global Markets and
Global Banking.
Good cost disc
ipl
ine has enabled us to generate posit
ive
income-to-cost jaws, even with continued underlying
investments. Credit impa
irment rose 5 per cent year-on-year,
mainly from higher charges in Wealth & Retail Banking (WRB),
while Corporate & Investment Banking (CIB) benefitted from
recoveries. The broader portfolios have proved resil
ient, and
we remain vig
ilant
in the face of a volatile global environment.
All this has helped to increase underlying profit before tax by
21 per cent year-on-year to $6.8 bill
ion.
Our strategy of combin
ing d
ifferent
iated cross-border
capabil
it
ies for corporate and inst
itut
ional clients with leading
wealth management expertise for affluent clients is working.
In CIB, we have increased cross-border (network) income by
11 per cent compound annual growth rate (CAGR) since 2019,
and it is now 61 per cent of total CIB income. We also recently
announced a long-term strategic partnership with Apollo to
support and accelerate financing for
infrastructure, clean
transit
ion and renewable energy globally. In WRB, we cont
inue
to build on our strengths in affluent, with $44 bill
ion of net new
money in 2024, up 61 per cent on prior year. This is equivalent
to a strong 16 per cent growth of affluent assets under
management coming from net new money. Also, earlier in
2024 we set-up our first global variable capital company in
Singapore, through which we offer hard-to-access custom-
created investment strategies exclusively to our clients, and
have subsequently launched two such sub-funds.
We remain highly liqu
id, w
ith a diverse and stable deposit base,
and a liqu
id
ity coverage ratio of 138 per cent. We are well
capital
ised, finish
ing the year with a Common Equity Tier 1
(CET1) ratio of 14.2 per cent, above our target range, allowing
us to increase our full-year ordinary div
idend by 37 per cent
to 37 cents per share. With the proposed final div
idend and
the $1.5 bill
ion share buyback announced today, our total
shareholder returns announced since the full-year 2023
results is $4.9 bill
ion, well on our way to the at least $8 b
ill
ion
three-year cumulative target.
As we look to the year ahead, I would like to offer my thanks
to our much valued and long-standing colleague, José Viñals,
who will step down as our Group Chairman later this year.
José has been a great partner to me and the members of
our Board. During his tenure he has been a tireless advocate
and champion of our business. Under his dil
igent stewardsh
ip
as Chairman, he has helped steer the Group and made a
meaningful contribut
ion to the strong pos
it
ion we hold today.
By embodying our brand promise, here for good, he has also
played crit
ical roles
in contribut
ing to the development of the
internat
ional finance sector and
in mobil
is
ing sustainable
finance in service of our markets.
In wish
ing José a fond farewell, I would also l
ike to extend a
warm welcome to Maria Ramos who will succeed José as the
Group Chair, subject to regulatory approval. Maria first jo
ined
“Executing a clear
strategy, deliver
ing
improv
ing returns and
increas
ing shareholder
distr
ibut
ions”
Bill Winters
Group Chief Executive
09
Standard Chartered
– Annual Report 2024
Strategic report
our Board as an Independent Non-Executive Director in
January 2021, and she was appointed Chair of the Board Risk
Committee and Senior Independent Director in 2022. Maria
is a seasoned leader and former banker, with a wealth of
experience from leadership posit
ions w
ith
in the pr
ivate
and public sectors. She also has extensive internat
ional
non-executive and Chair experience as well as a deep
understanding of operating across emerging and
developing markets.
Taking action to concentrate resources on areas
of greatest strength
Our strategy is designed to deliver our purpose, to drive
commerce and prosperity through our unique divers
ity. Th
is is
underpinned by our brand promise, here for good. In our Q3’24
results, we set out a series of further actions to double down
on our strategy of combin
ing d
ifferent
iated cross-border
capabil
it
ies for corporate and inst
itut
ional clients with leading
wealth management expertise for affluent clients. We will
concentrate capital and investment in our areas of greatest
different
iat
ion and competit
ive strength, further s
impl
ify
ing
our business and helping us to generate higher quality growth,
deliver sustainably higher returns and improve our RoTE over
the medium term.
We have set ourselves ambit
ious goals that al
ign to deliver
ing
this strategy and we also upgraded our 2026 RoTE target from
12 per cent to approaching 13 per cent. These goals, outlined
below, supersede the commitments we previously announced
with our 2023 results in February last year.
•
In our CIB business, we will continue to sharpen our focus
on serving the cross-border needs of our larger global
corporate and financial
inst
itut
ion clients. We are
optim
is
ing resource allocation by reducing the number of
clients whose needs do not play directly to our strengths.
•
As a result of these actions, we are targeting to increase
income from financ
ial
inst
itut
ion clients to around
60 per cent of CIB over the medium-term (51 per cent
in 2024), and to increase the percentage of cross-border
(network) income to around 70 per cent (61 per cent
in 2024).
•
In our WRB business,
we are solid
ify
ing our posit
ion as a
leading wealth manager in Asia, Africa and the Middle East
with a different
iated, fast-grow
ing and high-returning
internat
ional affluent franch
ise. This will be enabled by
invest
ing $1.5 b
ill
ion over five years
in our wealth and dig
ital
platforms, client centres, people and brand and marketing,
to accelerate income growth and returns. This investment
will be funded by reshaping our mass retail business to focus
on developing a strong pipel
ine of future affluent and
internat
ional cl
ients.
•
We are confident that our increased investment and
greater concentration will help us to outperform the market
in terms of asset gathering and income growth over the
medium term, and we are therefore targeting $200 bill
ion of
net new money from 2025 to 2029, a double-dig
it CAGR
in
Wealth Solutions income from 2024 to 2029, and for affluent
income share of WRB income to reach 75 per cent by 2029,
from 68 per cent in 2024.
•
In Ventures, SC Ventures will continue to promote a culture
of innovat
ion across the Group,
invest
ing
in disrupt
ive
financial technology and creat
ing alternative financ
ial
services and business models. As our portfolio matures,
we expect to generate gains on sales or mergers of our
ventures and will increas
ingly obta
in third party funding
for expansion of ventures, demonstrating the economic
value we are creating. And we expect our two dig
ital banks,
Mox and Trust, to be profitable in 2026.
Strong progress in our leading sustainab
il
ity
business
Our leading sustainab
il
ity capabil
it
ies are an integral part of
our client offering across all our business segments, and the
Group as a whole. We have had another year of strong growth
in Sustainable Finance income, which is up 36 per cent year-on-
year in 2024, to $982 mill
ion, and
is very close to our 2025 target
of over $1 bill
ion. We have mob
il
ised $121 b
ill
ion of Susta
inable
Finance since the beginn
ing of 2021, mak
ing good progress as
we advance towards our $300 bill
ion target by 2030.
Looking forward, in CIB we will continue to scale Sustainable
Finance and support our clients’ transit
ion journeys across
our markets. In WRB, we will integrate sustainable investments
into our Wealth Solutions proposit
ions and leverage bank-
wide sustainab
il
ity capabil
it
ies as a key different
iator to our
affluent clients.
Turning to our net zero roadmap, in 2024 we continued to
deliver against our net zero commitments, completing the
baseline and target setting for our 12 highest emitt
ing sectors.
But we also recognise that achiev
ing our net zero by 2050
target requires active collaboration and engagement with
our clients to support and accelerate their transit
ion and
I am therefore pleased to share that we have published our
inaugural Transit
ion Plan alongs
ide this Annual Report.
This year, we also demonstrated our commitment to protecting
and restoring nature by becoming an early adopter of the
Taskforce on Nature-related Financ
ial D
isclosures. Build
ing on
our ambit
ion to sh
ift financ
ial flows towards nature-pos
it
ive
outcomes, we also partnered with the Government of The
Bahamas, The Nature Conservancy, the Inter-American
Development Bank, and other financial partners to launch an
innovat
ive debt convers
ion, expected to generate $124 mill
ion
for marine conservation.
Improving operational leverage through the
Fit for Growth programme
In February last year, we launched our bank-wide, three-year,
Fit for Growth programme, which is focused on taking actions
to transform the way we operate, addressing structural
ineff
ic
ienc
ies and complex
ity to simpl
ify, standard
ise and
dig
it
ise key elements of our business, setting the stage for
accelerated growth.
This programme is targeting to deliver around $1.5 bill
ion of
expense savings over three years, and we expect to incur a
sim
ilar amount
in terms of the cost to achieve these sustainable
organisat
ional and financial benefits, creat
ing lasting capacity
to reinvest in our growth.
Since its launch we have progressed the programme at pace,
having mobil
ised over 200 projects dur
ing 2024, with in
it
iat
ives
that focus on sustainable structural improvements. We expect
the majority of the $1.5 b
ill
ion of sav
ings to ramp up from 2025,
with a tail of effic
iency effects cont
inu
ing after 2026, albe
it
several projects executed in 2024 have achieved the equivalent
of around $0.2 bill
ion of annual
ised savings. We expect to incur
around 60 per cent of the $1.5 bill
ion cost-to-ach
ieve by the
end of 2025. We remain committed to deliver
ing pos
it
ive jaws
each year on an underlying basis, and for costs to be below
$12.3 bill
ion
in 2026.
Deliver
ing substant
ial shareholder distr
ibut
ions
Our equity generation and disc
ipl
ine on risk-weighted assets
this year have created capacity for us to continue to deliver
substantial shareholder distr
ibut
ions, and in our Q3’24 results
we substantially increased our shareholder distr
ibut
ion target
from at least $5 bill
ion to at least $8 b
ill
ion from 2024 to 2026.
10
Standard Chartered
– Annual Report 2024
Strategic report
Group Chief Executive’s review
We remain committed to sharing our success with our
shareholders and will continue to actively manage our
capital posit
ion w
ith this object
ive
in mind. We are therefore
announcing today a further share buyback programme of
$1.5 bill
ion, to commence
imm
inently. Th
is new share buyback,
and a proposed final div
idend of $679 m
ill
ion, br
ings our total
shareholder returns announced since the full-year 2023 results
to $4.9 bill
ion, well on our way to our
improved target of at least
$8 bill
ion.
Optim
ist
ic outlook for the markets in our
footprint
Looking forward, we expect the global growth rate to be
broadly flat in 2025, moderating down slightly to 3.1 per cent
from 3.2 per cent in 2024, but then accelerating in 2026 to
3.3 per cent. Support from looser financial cond
it
ions and
expansionary fiscal policy may be partly offset by protection
ist
trade polic
ies and
interest rates that remain high.
Growth in our footprint markets across Asia, Africa and the
Middle East, is set to outpace global growth, with Asia
expanding by 4.8 per cent in 2025, Africa growing by
4.3 per cent and the Middle East (includ
ing Pak
istan) by
3.6 per cent. We expect growth in the Associat
ion of Southeast
Asian Nations (ASEAN) and India to remain healthy, despite
the moderating outlook for key western trade partners, and
we are uniquely posit
ioned to take advantage of th
is with
our unparalleled presence in all 10 ASEAN markets, as well as
being one of the largest internat
ional banks
in South Asia.
Our clients find immense value in partnering with us to solve
complicated problems for them in the markets we call home.
While we are anchored in Asia, Africa and the Middle East, our
footprint is global and our deep knowledge of, and expertise in,
doing business across our network is hard to replicate.
This is our time
We are a unique organisat
ion – a d
iverse, global business
with unparalleled cross-border reach and capabil
it
ies. As the
world gets more complicated, we become more crit
ical to our
clients because we, like no other, understand how to navigate
those complexit
ies.
We have delivered a strong financ
ial performance
in 2024
demonstrating the value of our franchise and the strength
of our strategy.
Looking forward, we are targeting a RoTE approaching
13 per cent in 2026, and for it to progress thereafter. We aim
to deliver this through strong income growth, improv
ing
operational leverage aided by our Fit for Growth programme
and mainta
in
ing our responsible approach to risk and capital.
Our recent success has made us ambit
ious and confident
for more. My Management Team and I remain focused on
deliver
ing on our targets, se
iz
ing the structural underly
ing
growth opportunit
ies we have, transform
ing how we work,
deliver
ing better exper
iences for clients and colleagues, and
creating exceptional long-term value for our shareholders.
Finally, I would like to acknowledge the remarkable efforts of
our colleagues again this year. Their impress
ive ded
icat
ion to
our clients and the communit
ies that we serve help to man
ifest
our brand promise of here for good.
Bill Winters
Group Chief Executive
21 February 2025
11
Standard Chartered
– Annual Report 2024
Strategic report
Bill Winters, CBE
Group Chief Executive
Diego De Giorg
i
Group Chief Financ
ial Officer
Alvaro Garrido
Interim Group Chief Information Officer
Roberto Hoornweg
Co-Head, Corporate & Investment Banking
Benjamin Hung
President, International
Judy Hsu
CEO, Wealth & Retail Banking
Mary Huen
CEO, Hong Kong and Greater China
& North Asia
Tanuj Kapilashram
i
Chief Strategy & Talent Officer
Sunil Kaushal
Global Co-Head, Corporate &
Investment Banking
Alex Manson
CEO, SC Ventures
Sadia Ricke
Group Chief Risk Officer
Darrell Ryman
Interim Group Chief Operating Officer
Read more on the management team on
pages 110 to 112
.
Management Team
12
Standard Chartered
– Annual Report 2024
Strategic report
Key performance ind
icators
Key performance ind
icators
We measure our progress against Group key performance ind
icators
(KPIs), as detailed below, as well as client KPIs, which can be found
on pages 21 to 23. Our Group KPIs include non-financ
ial measures
reflecting our commitment to build an engaged, diverse and inclus
ive
culture and support social and environmental outcomes.
Aim
Mainta
in a strong cap
ital base and Common Equity
Tier 1 (CET1) ratio.
Progress in 2024
The Group remains well capital
ised
and highly liqu
id w
ith a CET1 ratio of 14.2 per cent above
our target range, enabling the Board to announce a
37 per cent increase in the full-year div
idend and a
$1.5 bill
ion share buyback programme to start
imm
inently.
The components of the Group’s capital are summarised
in the Capital review on
pages 270 to 274
.
47.5%
47.5
%
2024
2023
9.4
%
2022
41.4
%
2021
(2.0)
%
2020
(34.6)
%
14.2
%
2024
2023
14.1
%
2022
14.0
%
2021
14.1
%
2020
14.4
%
Common Equity
Tier 1 ratio (CET1)
1
%
+19bps
Aim
Deliver sustainable improvement in the Group’s
profitabil
ity as a percentage of the value of shareholders’
tangible equity.
Progress in 2024
Our strategy to drive improved levels of
return on tangible equity (RoTE) is working. RoTE for the
year of 11.7 per cent is 160 basis points higher year-on-year.
1
The underlying profit attributable to ordinary shareholders expressed as
a percentage of average ordinary shareholders’ tangible equity.
2
2021 and 2022 have been restated to reflect market and business exits
announced in Q1 2023.
11.7
%
2024
2023
10.1
%
2022
2
7.7
%
2021
2
6.5
%
2020
3.0
%
Underlying return on
tangible equity (RoTE)¹
%
+160bps
Alignment to
remuneration
Alignment to
remuneration
Aim
Deliver a posit
ive return on shareholders’
investment
through share price appreciat
ion and d
iv
idends pa
id.
Progress in 2024
Our total shareholder return for the full
year was 47.5%.
3
Combines simple share price appreciat
ion w
ith div
idends pa
id to show
the total return to the shareholder and is expressed as a percentage total
return to shareholders.
Total shareholder return (TSR)
3
%
Alignment to
remuneration
Financ
ial KPIs
13
Standard Chartered
– Annual Report 2024
Strategic report
Alignment to remuneration
Reward for all Group employees, includ
ing execut
ive
directors, continues to be aligned to the Group’s strategic
prior
it
ies, through our annual and long-term incent
ive
scorecards. Our approach to remuneration is consistent
for all employees and is designed to create alignment with
our Fair Pay Charter, which applies globally. However, our
pay structures may vary according to location (to comply
with local requirements). Variable remuneration falls into
two categories: annual incent
ive and a long-term
incent
ive
plan (LTIP) which are aligned to the KPIs ind
icated.
Annual incent
ive
is
based on measurable
performance criter
ia l
inked to the Group’s strategy
and assessed over a period of one year.
LTIP
awards are granted to senior executives who have
the abil
ity to
influence the long-term performance
of the Group. Awards are performance dependent
based on measurable, long-term criter
ia.
Read more in our Directors’ remuneration report
on
pages 143 to 174
.
Aim
Increase representation
4
of women in senior
leadership roles
5
globally to 35 per cent by the end of 2025.
Progress in 2024
In 2024, the proportion of senior
leadership roles occupied by women has increased to
33.1 per cent. This is up by 0.6 percentage points from
December 2023 (32.5 per cent) and up 7.8 percentage
points since December 2016 (25.3 per cent).
4
Subject to local legal requirements
5
Senior leadership is defined as Managing Director and Band 4 roles
(includ
ing the Group Management Team).
Aim
Cumulative progress towards our commitment to
mobil
ise $300 b
ill
ion between 2021 and 2030.
Progress in 2024
We made strong progress against this
target during the year.
Read more on
pages 69 to 73
6
We define mobil
isat
ion of sustainable finance as any investment or
financial serv
ice provided to clients that supports: (i) the preservation
and/or improvement of biod
ivers
ity, nature or the environment; (i
i)
the long-term avoidance/decrease of GHG emiss
ions,
includ
ing the
alignment of a client’s business and operations with a 1.5 degree
Celsius trajectory (known as transit
ion finance); (
i
i
i) a social purpose;
or (iv) incent
iv
is
ing our cl
ients to meet their own sustainab
il
ity
objectives (known as susta
inab
il
ity-linked finance). It is a measure
of total capital mobil
ised and cons
iders the total value of the
committed facil
it
ies provided.
7
Figures reflect cumulative sustainable finance mobil
ised s
ince January
2021 up to September of each year.
Divers
ity and
inclus
ion:
women in senior roles
4
%
Mobil
isat
ion of sustainable finance
6,7
+0.6
ppt
+$34
bn
33.1
%
2024
2023
32.5
%
2022
32.1
%
2021
30.7
%
2020
29.5
%
20.44
2024
2023
25.86
2022
17.55
2021
12.94
2020
17.51
$
121
bn
2024
2023
$
87
bn
2022
$
57
bn
2021
The Group announced this target in Q4 2021.
Aim
Improve the overall employee experience across
the Group by creating a better work environment for
our colleagues that should translate into an improved
client experience.
Progress in 2024
While the eNPS score dropped by
5.42 points to 20.44 from 25.86 in 2023 (which was our
highest ever score), it continues to be stronger than
previous years.
8
eNPS ranges from -100 to +100 and is based on a single question
which measures whether colleagues would recommend working for
the Bank. It is calculated by deducting the percentage of detractors
from the percentage of promoters.
Employee net promoter score
(eNPS)
8
-5.42
points
Alignment to
remuneration
Alignment to
remuneration
Alignment to
remuneration
Non-financial KPIs
14
Standard Chartered
– Annual Report 2024
Strategic report
Market environment
Market environment
Trends
in 2024
•
Global GDP growth held at 3.2 per cent 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 per cent 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 per
cent from 8.2 per cent in 2023.
•
Sub-Saharan Africa likely saw growth of 3.4 per cent
in 2024, an improvement from 3.1 per cent in 2023,
supported by easing global financ
ial cond
it
ions, the
region’s continued recovery from COVID-19 cris
is and
country-specif
ic factors.
•
Among the majors, the US economy remained resil
ient,
with growth improv
ing to 2.7 per cent from 2.5 per cent
in 2023, led by personal consumption, despite recent
signs of softening in the labour market. Growth
also recovered in the UK to 0.9 per cent in 2024 as
inflat
ion fell and demand 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 weak investment. In most majors, labour markets
remained strong, but there are signs of softening.
•
Major central banks like the Federal Reserve and
European Central Bank 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 per cent from
3.2 per cent in 2024. Support from looser financ
ial
condit
ions and expans
ionary fiscal policy may be
partly offset by protection
ist trade pol
ic
ies and
still-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
risk 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 Gulf
Cooperation Council (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 other trading
partners. Tariff wars are likely to result in further trade
divers
ion and a reor
ientat
ion of supply cha
ins.
•
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 emerging market issuers
to borrow in internat
ional cap
ital markets, and could
sign
ificantly reduce portfol
io flows to emerging
markets. In addit
ion, emerg
ing market central banks
may be constrained from cutting rates meaningfully.
•
On the geopolit
ical front, markets w
ill be eager to see
if President Trump is able to end the war in Ukraine and
whether the cautious hope which has emerged on the
Middle East’s front outlook proves sustainable.
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
protection
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 product
iv
ity growth, prov
ing
an antidote to economic scarring concerns. With
in
emerging markets, countries in Asia are best placed to
take advantage of dig
ital
isat
ion,
includ
ing generat
ive
artif
ic
ial intell
igence (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
environment through the impact 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 deficit 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 partners m
ight act as drags on
consumer and investor confidence, slowing growth.
•
Global trade has remained resil
ient
in the face of ris
ing
protection
ism over the past decade. However, an
escalation in 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.
Global macro trends: Macroeconomic factors affecting the global landscape
15
Standard Chartered
– Annual Report 2024
Strategic report
•
The US economy is likely to stay on a healthy footing, with layoffs remain
ing low and
consumer and business sentiment staying strong. Tighter financ
ial cond
it
ions towards end-
2024 could bring some growth softness in H1 2025 before returning to trend in H2 2025.
•
Slowing growth and a 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 challenging the fiscal outlook.
•
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 towards 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.
•
While The People’s Bank of China 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 per cent 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.
•
Growth in South Korea is likely to slow in 2025, reflecting ris
ing uncerta
inty on external
demand due to likely protection
ist pol
ic
ies under Trump 2.0. Th
is may weigh heavily on
firms’ investment incent
ives, part
icularly in export-driven industr
ies.
•
India’s growth has likely moderated to 6.2 per cent in 2024 and 6.5 per cent in 2025 from
8.2 per cent 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 INR
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,
albeit 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 foreign direct investment flows as investors seek to divers
ify the
ir operational
capacity and tap new markets.
•
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 think 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.
Regional outlook
Americas
2025
2024
China
2025
2024
Hong Kong
2025
2024
Korea
Greater China
and North Asia
Actual and projected
growth by market
ASEAN and
South Asia
2025
2024
India
2025
2024
Indonesia
2025
2024
Singapore
Actual and projected
growth by market
4.5%
5.0%
6.5%
6.2%
2.2%
2.5%
5.0%
5.0%
1.6%
2.0%
2.5%
3.8%
Actual and projected
growth by market
US
2025
2024
1.8%
2.7%
16
Standard Chartered
– Annual Report 2024
Strategic report
Strategic report
Market environment
•
While escalating global trade tensions and higher US Treasury yields are downside risks to
Sub-Saharan Africa, 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 cap
ital in ensuring that
growth-boosting structural reforms yield meaningful div
idends. South Afr
ica may adopt
a formal rule to lim
it
its fiscal defic
it and reassure on debt levels
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
higher inflat
ion. 2025 should br
ing greater FX and price stabil
ity, as well as offshore
investor
interest in Niger
ia’s local-currency debt market. However, N
iger
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.
Zambia 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 internat
ional
financial
inst
itut
ions 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.
•
The Euro area economy is likely to struggle in the face of structural headwinds – includ
ing
poor competit
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 countries 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.
Europe
2025
2024
•
Despite some pressure on the energy sector, we expect the 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 Middle East and
North Africa (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.
Middle East
Africa
Regional outlook
2025
2024
Euro area
Actual and projected
growth by market
Niger
ia
2025
2024
Actual and projected
growth by market
UK
Actual and projected
growth by market
UAE
2025
2024
3.8%
3.5%
5.0%
4.0%
1.0%
0.9%
0.8%
0.7%
2025
2024
South Africa
2025
2024
Kenya
2.0%
1.1%
4.7%
4.5%
17
Standard Chartered
– Annual Report 2024
Strategic report
Highl
ight
ing the
impact of extreme
weather and
climate change
The Standard Chartered Weather Photographer of the Year
competit
ion h
ighl
ights capt
ivat
ing weather and cl
imate
images by amateur and professional photographers.
In 2024, our Malaysian colleague Nur Syaireen Natasya Bint
i
Azaharin came first in the smartphone category, with her
image ‘Volcanoes’.
The other winners were:
•
Main prize: Wang Xin, from China; ‘Sprites Dancing
in the Dark Night’
•
Youth prize: Angelina Widmann, from Austria; ‘Rain Aria’
•
Public vote and Climate Award: Gerson Turelly from
Brazil; ‘Rowing’.
Organised by the UK’s Royal Meteorological Society, the
competit
ion helps to ra
ise awareness about the impact
of extreme weather and the changing climate across
our markets.
Read more at
sc.com/scwpy
Image credit: ‘Volcanoes’ by Nur Syaireen Natasya Bint
i Azahar
in
Strategy
Strategic report
Our strategy
18
Standard Chartered
– Annual Report 2024
Our strategy 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.
Cross-border
Affluent
Invest $1.5 bill
ion over five years
in our wealth and
dig
ital platforms, cl
ient centres, people, 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 bank
ing clients
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
Optim
ise resource allocat
ion by reducing the
number of clients whose needs do not play
directly to our strengths
Continue to sharpen our focus on serving
the cross-border needs of our larger global
corporate and financial
inst
itut
ion clients
Concentrate our efforts on enhancing our
cross-border product and advisory suite to
meet our clients’ complex needs
Cross-border
income:
~70% of CIB
in medium term
Income from financial
inst
itut
ion clients:
~60% of CIB
in medium term
Affluent
income:
~75% of WRB
by 2029
Wealth Solutions
income:
Double-dig
it CAGR
from 2024 to 2029
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
Affluent
…with leading wealth
management expertise
Cross-border
Combin
ing d
ifferent
iated
cross-border capabil
it
ies...
Sustainab
il
ity
Integrate sustainable investments into our
Wealth Solutions proposit
ions and leverage
bank-wide sustainab
il
ity capabil
it
ies as a key
different
iator to our affluent cl
ients
Continue to scale sustainable finance and
support to our clients’ transit
ion journeys across
our markets
Our business model reflects our strategy of combin
ing d
ifferent
iated
cross-border capabil
it
ies with leading wealth management expertise.
Our business model
19
Standard Chartered
– Annual Report 2024
Our leading Sustainab
il
ity business is an integral part of our client
offering across all our business segments, and the Group as a whole.
Read more on
page 57
Responsible
business practices
Bespoke sustainable
finance solutions
Innovation in service
of our markets
We strive to be a responsible business by operational
is
ing our net zero
targets, managing environmental and social risks, and acting transparently.
We offer sustainable finance solutions designed to help our clients address
environmental and social challenges and achieve sustainable growth.
We advocate in service of our markets to unlock the areas where capital is
not flowing at scale or not at all and to help drive economic inclus
ion.
Global Markets &
Global Banking
• Macro, Credit &
Commodit
ies Trad
ing
• Lending & Financ
ial
Solutions
• Capital Markets &
Advisory
Transaction Services
• Payments and
Liqu
id
ity
• Trade & Working
Capital
• Securit
ies &
Prime Services
Wealth Solutions
• Investments
• Bancassurance
• Wealth advice
• Portfolio management
Retail Products
• Deposits
• Mortgages
• Credit cards
• Personal loans
Our key products and services
Corporate &
Investment Banking
(CIB)
Supports large corporations,
development organisat
ions,
governments, banks and investors
in accessing cross-border trade
and investment opportunit
ies.
Read more on
page 21
Wealth &
Retail Banking
(WRB)
Serves the local and internat
ional
banking needs of clients across the
wealth continuum from Personal to
Prior
ity and Pr
ivate Banking, as well
as small and medium enterprises.
Read more on
page 22
Ventures
Promotes a culture of innovat
ion
across the Group, invest
ing
in
disrupt
ive financial technology and
creating alternative financ
ial serv
ice
business models, as well as growing
our dig
ital banks – Mox and Trust.
Our business segments
Strategic report
Read more on
page 23
20
Standard Chartered
– Annual Report 2024
Strategic report
Business model
Clients
We deliver banking solutions for
our clients across our network both
dig
itally and
in person. We help
ind
iv
iduals grow and protect their
wealth while connecting corporates
and financial
inst
itut
ions to
opportunit
ies across our network.
Regulators and
governments
We play our part in supporting
the effective function
ing of the
financial system and the broader
economy by proactively 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.
Employees
We believe that employee
experience drives client experience.
We want all our people to pursue
their ambit
ions, del
iver with purpose
and have a rewarding career
enabled by great people leaders.
Suppliers
We partner with diverse suppliers,
locally and globally, to provide
efficient and susta
inable goods
and services for our business.
Investors
We aim to deliver robust returns
and long-term sustainable value
for our investors.
Our resources provide the strong foundation that helps us deliver
our strategy
We create long-term value for a broad range of stakeholders
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.
Financ
ial strength
With our solid balance sheet and prudent financ
ial
management, we are a strong and trusted partner
for our clients.
Human capital
Divers
ity d
ifferent
iates us;
it is in our purpose
statement. Deliver
ing our strategy rests on how
we continue to invest in our people, the employee
experience and culture.
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.
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 borders.
Technology
Our foundations in technology and data act as key
enablers in provid
ing world class cl
ient services.
21
Standard Chartered
– Annual Report 2024
Strategic report
Client segment reviews
Segment overview
Corporate & Investment Banking (CIB) supports local and large
corporations, governments, banks and investors with their transaction
services, banking, and financ
ial market needs. We prov
ide
different
iated cross-border capab
il
it
ies to over 17,000 clients in some
of the world’s fastest-growing economies and most active trade
corridors. Our clients operate or invest in 47 markets across the globe.
Our strong and deep local presence enables us to co-create bespoke
financing 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. CIB 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 fund
ing for financ
ial offer
ings that
have a posit
ive
impact on our communit
ies and env
ironment.
Strategic prior
it
ies
•
Deliver sustainable growth for clients by leveraging our network
to facil
itate trade, cap
ital and investment flows across our
footprint markets.
•
Generate high-quality returns by improv
ing
income mix, growing
capital-lite income and driv
ing balance sheet veloc
ity, while
mainta
in
ing disc
ipl
ined risk management.
•
Be a dig
ital-first and data-dr
iven bank that delivers enhanced
client experiences.
•
Accelerate our sustainable finance offering to our clients through
product innovat
ion and enabl
ing transit
ion to a low-carbon future.
Progress
•
Our underlying income performance was driven by our divers
ified
product suite, expanded client solutions and optim
ised resource
allocation by focusing on clients whose cross-border needs played
directly to our strengths. Our cross-border income contributed to
61 per cent of total CIB income with growth across strategic corridors.
•
Resil
ient balance sheet qual
ity with investment-grade net loans
and advances to customers represented 66 per cent of total
corporate net loans and advances to customers (2023: 65 per cent).
•
We increased the share of income from our financ
ial
inst
itut
ion
clients as a percentage of total CIB income, from 49 per cent in 2023
to 51 per cent in 2024.
•
Active management of pass-through rates helped us to mainta
in
a balance between pric
ing and depos
it attrit
ion.
•
Client Dig
ital Transact
ion Init
iat
ion stood at 68.3 per cent (2023:
64.5 per cent) largely in Cash, Trade and FX. Client experience
remained at the centre of our dig
ital transformat
ion, with our
Customer Satisfact
ion Score at 72 per cent (2023: 61 per cent).
•
We are well on our way towards deliver
ing our target of $1 b
ill
ion
income from our Sustainable Finance franchise by 2025, and have
mobil
ised $121 b
ill
ion aga
inst our $300 bill
ion comm
itment in
sustainable financ
ing by 2030.
Performance highl
ights
•
Underlying profit before tax of $5,581 mill
ion
increased by 4 per cent
at constant currency (ccy) driven by higher income, partially offset
by higher operating expenses and other impa
irment charge.
•
Underlying operating income of $11,818 mill
ion
increased by
6 per cent at ccy primar
ily dr
iven by strong performance in Global
Markets and Global Banking. Global Markets grew by 15 per cent,
supported by double-dig
it growth
in both flow and episod
ic
income. Global Banking also saw a 15 per cent increase due to
higher loan orig
inat
ion volumes from strong pipel
ine execut
ion,
coupled with improved Capital Markets activ
it
ies. Transaction
Services remained flat, as 12 per cent increase in Securit
ies & Pr
ime
Services income, driven by higher fees and deposit balances were
offset by lower margins in Payments and Liqu
id
ity, and Trade &
Working Capital products.
•
Underlying operating expenses were up by 9 per cent at ccy largely
due to investments and higher performance-related pay, partly
offset by disc
ipl
ined hir
ing and control over d
iscret
ionary spend
ing.
•
Credit impa
irment was a net release of $106 m
ill
ion, benefitting
from client recoveries, partly offset by a $58 mill
ion overlay for
clients who have exposure to Hong Kong’s commercial real estate
sector. Other impa
irment charge pr
imar
ily related to the wr
ite-off
of software assets.
•
Risk-weighted assets of $157 bill
ion were up $15 b
ill
ion ma
inly driven
by asset growth and higher market RWA.
Corporate & Investment Banking
Network income as % of total CIB income
Contribut
ions of F
inanc
ial Inst
itut
ions segment as %
of total CIB income
Aim:
Drive growth in high-returning Financ
ial Inst
itut
ions segment
Analysis:
Share of Financ
ial Inst
itut
ions
income improved to 51 per cent in 2024
as we applied continued focus to this segment to drive income and returns
61
%
2024
2023
2022
61
%
54
%
51
%
2024
2023
2022
49
%
47
%
Risk-weighted
assets (RWA)
$157
bn
$15bn
Profit before
taxation
$5,581
m
4%
underlying basis
$5,378
m
6% reported basis
Return on tangible
equity (RoTE)
19.0
%
50bps underlying basis
18.4
%
227bps reported basis
Aim:
Drive cross-border income by focusing on strategic corridors with
growth potential
Analysis:
Share of network income improved from 54 per cent in 2022 to
61 per cent in 2023 and 2024 as we focus on serving the cross-border needs
of our large global corporate and financial
inst
itut
ion clients
22
Standard Chartered
– Annual Report 2024
Strategic report
Client segment reviews
Segment overview
Wealth & Retail Banking (WRB) serves more than 13 mill
ion
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, financing, 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.
WRB is closely integrated with the Group’s other client segments; for
example, we offer employee banking services to CIB clients, and we
also provide a source of high-quality liqu
id
ity for the Group.
Strategic prior
it
ies
•
Solid
ify our pos
it
ion as a lead
ing internat
ional wealth manager
and capture Global Chinese and Global Indian opportunit
ies, by
leveraging our client continuum, global network and expertise in
wealth solutions.
•
Accelerate our investment in affluent frontline teams, wealth and
dig
ital platforms, and cl
ient centres, as well as brand and marketing,
to drive income growth and higher returns.
•
Deliver different
iated and adv
isory-led wealth proposit
ions w
ith
dig
ital-first and personal
ised experiences, leveraging an open
architecture platform.
•
Enable access to sustainable investments by integrat
ing ESG
into our
Wealth Solutions proposit
ions.
•
Reshape our mass retail business to focus on build
ing a strong
pipel
ine of future affluent and
internat
ional bank
ing clients.
•
Improve client experience and effic
iency v
ia continuous innovat
ion,
dig
it
isat
ion, data analyt
ics and process simpl
ification.
Progress
•
Strong momentum in client growth with the addit
ion of 265,000
new-to-bank affluent clients, and Net New Money
1
across Prior
ity
Banking and Private Bank reached $43.6 bill
ion, up by 61 per cent
year-on-year.
•
Strengthened cross-border and cross-segment collaboration
across our global network to deliver robust growth in internat
ional
clients (up 18 per cent year-on-year), resulting in 325,000 new
internat
ional cl
ients and a sign
ificant contr
ibut
ion to Assets
Under Management.
•
Continued to launch different
iated wealth solut
ions such as our
exclusive Signature Select and Signature CIO funds.
•
Dig
it
ised and enhanced wealth client journeys with new self-service
capabil
it
ies, streamlined processes, and more comprehensive
portfolio advisory capabil
it
ies for both clients and frontline teams.
•
Developed our relationsh
ip teams to be better wealth adv
isers,
with about 1,100 frontline relationsh
ip managers, team leaders
and special
ists tra
ined in the Standard Chartered-INSEAD Wealth
Academy programmes since launch.
•
Up-tiered 295,000 ind
iv
idual clients through our wealth continuum
across and with
in personal and affluent segments, by ta
ilor
ing
proposit
ions and serv
ice models to the needs of our clients.
•
Recognised for excellence in private banking, dig
ital wealth and
other capabil
it
ies, with over 30 industry awards received in 2024.
Performance highl
ights
•
Underlying profit before tax of $2,463 mill
ion decreased by 1 per cent
at constant currency (ccy) primar
ily dr
iven by increased operating
expenses, higher credit and other impa
irment charge part
ially offset
by higher income.
•
Underlying operating income of $7,816 mill
ion was up 11 per cent at
ccy, driven primar
ily by Wealth Solut
ions, up 29 per cent. This growth
was broad-based across markets and products, driven by continued
momentum in Affluent new-to-bank onboarding and net new money.
CCPL & Other Unsecured Lending income increased by 3 per cent
supported by higher volumes from Partnership-led growth. Deposits
income rose by 4 per cent driven by higher deposit volumes. Mortgage
& Other Secured Lending income was up by 3 per cent benefitt
ing
from higher upfront fees due to new sales momentum in Korea and
Hong Kong, along with improv
ing marg
ins due to lower HIBOR.
•
Underlying operating expenses increased by 9 per cent in ccy, primar
ily
driven by inflat
ion and
investment in business growth in
it
iat
ives
includ
ing the strateg
ic hir
ing of Affluent relat
ionsh
ip managers.
•
Credit impa
irment charge
increased $290 mill
ion to $644 m
ill
ion
mainly from the higher interest rate environment impact
ing
repayments on credit cards and personal loans, the growth and
maturity of the dig
ital partnersh
ip portfolios in China and Indonesia
as well as $21 mill
ion overlay relat
ing to Korea eCommerce platforms.
Other impa
irment charge pr
imar
ily related to the wr
ite-off of
software assets.
Wealth & Retail Banking
Affluent Net New Money (NNM)¹
International affluent clients in wealth hubs
1
Net New Money is shown at YTD constant currency FX rates
Aim:
Achieve NNM
1
from new and exist
ing affluent cl
ients, via innovat
ion,
and advisory-led and dig
ital-first Wealth propos
it
ions
Analysis:
Affluent NNM increased by 61 per cent year-on-year in 2024,
supported by strong new-to-bank client acquis
it
ion momentum, cross-
border referrals and dig
ital-dr
iven client engagement
Aim:
To solid
ify our pos
it
ion as a lead
ing internat
ional wealth manager by
leveraging our client continuum, global network and expertise in wealth
solutions
Analysis:
International affluent clients increased 18 per cent year-on-year
in 2024, deliver
ing ~50 per cent of the three-year growth target set
in 2023
$
43.6
bn
2024
2023
2022
$
27.1
bn
$
19.1
bn
325
k
2024
2023
2022
274
k
202
k
Risk-weighted
assets (RWA)
$50.5
bn
$1bn
Profit before
taxation
$2,463
m
1%
underlying basis
$2,193
m
10% reported basis
Return on tangible
equity (RoTE)
24.4
%
90bps
underlying basis
21.7
%
301bps
reported basis
23
Standard Chartered
– Annual Report 2024
Strategic report
Segment overview
Formed in 2022, the Ventures client segment is a consolidat
ion
of SC Ventures and its related entit
ies as well as the Group’s two
majority-owned d
ig
ital banks Mox
in Hong Kong and Trust
in Singapore.
•
SC Ventures is the platform and catalyst for the Group to promote
innovat
ion,
invest in disrupt
ive financial technology and explore
alternative business models. It represents a diverse portfolio of
almost 30 ventures and more than 30 investments.
•
Mox, a cloud-native, mobile only dig
ital bank, was launched
in
Hong Kong as a joint venture w
ith HKT, PCCW and Trip.com in
September 2020.
•
Trust Bank 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 wide range of innovat
ive products and serv
ices.
Strategic prior
it
ies
•
SC Ventures’ focus is on build
ing and scal
ing new business models –
across the three themes of Dig
ital Bank
ing & Lifestyle, Trade &
Supply Chains and Dig
ital Assets, enabled by art
if
ic
ial intell
igence,
Web3/Blockchain, ESG and Quantum. We do this by connecting
ecosystems, partners and clients to create value and new sources of
revenues, provid
ing opt
ional
ity for the Bank. We advance our fintech
agenda by ident
ify
ing, partnering and making minor
ity
investments
in companies that provide technology capabil
it
ies, which can be
integrated into the Bank and Ventures. Our focus is on innovat
ive,
fast growing, technology-focused companies that can accelerate
transformation in the financ
ial serv
ices sector.
•
Mox aims to become the leading dig
ital bank globally. Its v
is
ion
is
to set the global benchmark for dig
ital bank
ing, focusing on cards,
dig
ital lend
ing, deposits and wealth management. Mox plans to
enhance its offering with insurance services and a broader range
of dig
ital financial solut
ions to cater to customer needs in a
competit
ive market.
•
Trust Bank aims to establish itself as one of the main retail banks in
Singapore, creating new standards of customer experience. Key
near-term prior
it
ies are to continue to deepen engagement with
exist
ing customers and to launch a wealth management propos
it
ion.
Progress
•
In 2024, SC Ventures mainta
ined pos
it
ive momentum, further
enhancing its business performance. It launched four new ventures,
raised funds amid a challenging environment, and expanded its
geographical reach. As a result, the SC Ventures customer base
grew by 13 per cent year-on-year to reach 660,000. SC Ventures’
presence in the Middle East expanded its network of partners
and stakeholders in the region, while our Singapore-based dig
ital
infrastructure platform, Olea Global, secured a $100 mill
ion
warehouse financing fac
il
ity from HSBC and Manul
ife.
SC Ventures’ portfolio of compliant and bank-grade platforms
continues to prove our commitment to build
ing
infrastructure that
will enable inst
itut
ional adoption of dig
ital assets. In 2024, Zod
ia
Custody’s client base sign
ificantly expanded, and the d
ig
ital asset
custodian is now backed by four major financ
ial
inst
itut
ions:
Standard Chartered, Northern Trust, SBI Holdings, and NAB. Libeara
is powering the SGD Delta Fund (managed by Fundbridge Capital),
which received Moody’s first ever rating of a tokenised bond.
•
In 2024, Mox had around 650,000 customers, penetrating over
10 per cent of Hong Kong’s total bankable population. Mox
continued to achieve strong performance, supported by an engaged
customer base with an average 3.1x products and average log in of
15 times per active customer every month. Mox delivered 15 per cent
year-on-year growth in revenue and 57 per cent year-on-year growth
in deposits. Mox Card is a runaway success, with more than 100
mill
ion transact
ions to date. In 2024, Mox was the first dig
ital bank
in Hong Kong to offer Asia Miles as part of its customer value
proposit
ion and has d
istr
ibuted a total of 500 m
ill
ion As
ia Miles to
date. By the first half of 2024, Mox’s market share had reached 27 per
cent (was ranked #1) and 26 per cent (was ranked #2) in lending and
deposits respectively, among all Hong Kong dig
ital banks.
Mox was recognised for its excellence by various global named
agencies, such as the Best Dig
ital Bank
in Hong Kong by The Asian
Banker, Best Dig
ital Bank for CX
in Hong Kong and in Asia Pacif
ic
by The Dig
ital Banker D
ig
ital CX Awards, V
irtual Bank of the
Year – Hong Kong by Asian Banking & Finance. Besides, Mox has
established a strong connection with Hong Kong customers since
its launch – the bank’s app is currently the highest-rated dig
ital
banking app in Hong Kong, achiev
ing a score of 4.8 out of 5
in
the Apple App Store
•
Trust Bank continued its rapid growth during 2024, with customer
numbers reaching 974,000, equivalent to an 18 per cent share of
the adult population in Singapore. Customer referrals remain the
main source of this growth, keeping customer acquis
it
ion costs low.
Alongside this customer growth, Trust Bank sign
ificantly expanded
its customer proposit
ion dur
ing the year, launching several innovat
ive
products includ
ing spl
it purchase and balance transfer loans, a
cashback credit card and a proposit
ion for mass affluent customers
called Trust+. Customer engagement levels remain high with credit
card customers making an average of 21 transactions each month.
The resulting financ
ial progress has been strong, w
ith deposit
balances doubling to $2.8 bill
ion and customer lend
ing balances
increas
ing 149 per cent to $0.6 b
ill
ion. 2024 revenue
increased
160 per cent compared with 2023 while costs rose only 5 per cent.
Loan impa
irments rema
ined well controlled.
During the year, Trust Bank received extensive industry awards
and recognit
ion,
includ
ing the best d
ig
ital bank
in Singapore by
The Asian Banker and was named the best mobile banking app
globally by The Dig
ital Banker. It rema
ins a top-rated bank in
Singapore on the Apple App Store. Build
ing on the success of Trust+,
Trust Bank is build
ing
its first investment solutions product called
TrustInvest, which it plans to launch in the first quarter of 2025.
Performance highl
ights
•
Underlying loss before tax decreased by $18 mill
ion to $390 m
ill
ion
reflecting the Group’s continued commitment to invest
ing
in
transformational dig
ital
in
it
iat
ives. Income rose by 16 per cent at
ccy to $183 mill
ion, dr
iven primar
ily by a 60 per cent growth
in the
Dig
ital Banks. Th
is growth was fuelled by strong growth in customer
numbers and volumes in both dig
ital banks – Mox and Trust.
•
Operating expenses increased by 8 per cent due to continued
investment in new and exist
ing ventures.
•
Credit impa
irment decreased from $85 m
ill
ion to $74 m
ill
ion,
mainly due to delinquency rates improv
ing
in Mox.
•
Risk-weighted assets of $2.4 bill
ion have
increased $0.5 bill
ion ma
inly
due to continued investment in new and exist
ing ventures and
minor
ity
interests.
Ventures
Customers
Loss before taxation
$390
m
4%
underlying basis
External funds raised
$60
m
7%
Risk-weighted assets
(RWA)
$2.4
bn
$0.5bn
Customers
2.3
m
0.5m
2.3
m
2024
2023
2022
1.8
m
1.3
m
24
Standard Chartered
– Annual Report 2024
Strategic report
Group Chief Financ
ial Officer’s rev
iew
Summary of financial performance
All commentary that follows is on an underlying basis and
comparisons are made to the equivalent period in 2023 on
a constant currency basis, unless otherwise stated.
The Group delivered a strong performance in 2024,
recording a return on tangible equity (RoTE) of 11.7 per cent,
up 160 basis points year-on-year. A record performance in
Wealth Solutions, and strong double-dig
it growth
in Global
Markets and Global Banking, drove operating income
growth of 14 per cent to $19.7 bill
ion. Operat
ing income was
up 12 per cent excluding two notable items relating to gains
on revaluation of FX posit
ions
in Egypt and hyperinflat
ionary
accounting adjustments in Ghana, as well as adjust
ing for
the reclassif
icat
ion of deposit insurance to expenses (the
reclassif
icat
ion). Operating expenses grew 7 per cent or
6 per cent excluding the reclassif
icat
ion, resulting in posit
ive
income-to-cost jaws of 6 per cent excluding both notables
and the reclassif
icat
ion. The credit impa
irment charge of
$557 mill
ion was equ
ivalent to an annualised loan-loss rate
of 19 basis points while the other impa
irment charge of
$588 mill
ion mostly related to the wr
ite-off of software
assets with no impact on capital ratios. This resulted in an
underlying profit before tax of $6.8 bill
ion, up 21 per cent.
The Group remains well capital
ised and h
ighly liqu
id w
ith
a strong and diverse deposit base. The liqu
id
ity coverage
ratio of 138 per cent reflects disc
ipl
ined asset and liab
il
ity
management. The Common Equity Tier 1 (CET1) ratio of
14.2 per cent is above the Group’s target range of 13 per cent
to 14 per cent, enabling the Board to announce a $1.5 bill
ion
share buyback programme to commence imm
inently.
•
Operating income
of $19.7 bill
ion
increased by 14 per cent
or 12 per cent excluding the benefit of two notable items
and the reclassif
icat
ion. The double-dig
it growth was dr
iven
by record performance in Wealth Solutions and strong
double-dig
it growth
in Global Markets and Global Banking.
•
Net interest income (NII)
increased 10 per cent, benefitt
ing
from the roll-off of short-term hedges of $455 mill
ion, and
improved asset mix from a reduction in treasury assets to
fund the trading book. This was partly offset by lower
average interest earning asset volumes and the impact
of elevated pass-through rates on deposit margins.
Excluding the reclassif
icat
ion, NII was up 8 per cent.
•
Non NII
increased 20 per cent. This was driven by a record
performance in Wealth Solutions with broad-based growth
across products, strong performance in Global Markets
with double-dig
it growth
in both flow and episod
ic
income
and strong performance in Global Banking from higher
orig
inat
ion volumes. Excluding two notable items of
$295 mill
ion, non NII
increased 16 per cent.
•
Operating expenses
excluding the UK bank levy increased
7 per cent, or 6 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,
includ
ing strateg
ic hir
ing of Relat
ionsh
ip Managers
in
Wealth & Retail Banking (WRB) and coverage bankers in
Corporate & Investment Banking (CIB), partly offset by
efficiency saves. The Group generated 7 per cent pos
it
ive
income-to-cost jaws and the cost-to-income ratio improved
by 4 percentage points to 59 per cent.
•
Credit impa
irment
of $557 mill
ion
in 2024 was up
5 per cent year-on-year. WRB impa
irment of $644 m
ill
ion
was up $290 mill
ion, ma
inly from the higher interest rate
environment impact
ing repayments on cred
it cards and
personal loans, and the growth and maturation of the
dig
ital partnersh
ip portfolios in China and Indonesia.
This was partly offset by a $106 mill
ion net recovery
in CIB.
•
Other impa
irment
of $588 mill
ion of wh
ich $561 mill
ion
relates to write-off of software assets, with no impact on
capital ratios.
Group Chief Financ
ial Officer’s rev
iew
“Strong growth
leveraging our
unique footprint”
Diego De Giorg
i
Group Chief Financ
ial Officer
25
Standard Chartered
– Annual Report 2024
Strategic report
•
Profit from associates and jo
int ventures
was down
47 per cent to $50 mill
ion ma
inly reflecting lower profits
at China Bohai Bank.
•
Restructuring, other items and Debit Valuation
Adjustment (DVA)
totalled $797 mill
ion. Restructur
ing of
$441 mill
ion reflects the
impact of actions to transform
the organisat
ion to structurally
improve productiv
ity, of
which $156 mill
ion relates to the F
it for Growth programme,
partly offset by gains on the remain
ing Pr
inc
ipal F
inance
portfolio. Other items of $332 mill
ion
includes losses
related to the sale of Zimbabwe of $172 mill
ion, Angola of
$26 mill
ion and S
ierra Leone of $19 mill
ion all pr
imar
ily from
the recycling of FX translation losses from reserves into the
income statement, with no impact on tangible equity or
capital. There was also a $100 mill
ion charge booked for
partic
ipat
ion in a compensation scheme recommended
by the Korean Financ
ial Superv
isory Service. Movements
in the DVA were a negative $24 mill
ion.
•
Taxation
was $1,972 mill
ion on a reported bas
is, with an
underlying effective tax rate of 30.6 per cent up from
29.1 per cent in the prior year reflecting deferred tax not
recognised for UK losses, US tax adjustments, lower
tax-exempt income and a change in the geographic
mix of profits.
•
Underlying RoTE
increased by 160 basis points to
11.7 per cent mainly reflecting an increase in profits.
•
Underlying basic earnings per share (EPS)
increased
39.2 cents or 30 per cent to 168.1 cents and reported EPS
increased 32.7 cents or 30 per cent to 141.3 cents.
• A final
ordinary div
idend
per share of 28 cents has been
proposed taking the full-year div
idend to 37 cents per share,
a 37 per cent increase year-on-year. The Group completed
a $1 bill
ion share buyback programme dur
ing the first half
of the year and the $1.5 bill
ion share buyback programme
announced on 30 July 2024 was completed on 30 January
2025. The increased div
idend, along w
ith a new share
buyback programme of $1.5 bill
ion to be commenced
imm
inently, takes the total shareholder d
istr
ibut
ions
announced since the full year 2023 results to $4.9 bill
ion.
Guidance
The 2025 and 2026 guidance is as follows:
•
Income:
– Operating income to increase 5-7 per cent CAGR in
2023-2026 at constant currency (ccy) excluding the
reclassif
icat
ion, currently tracking towards the upper
end of the range
– 2025 growth expected to be below the 5-7 per cent range
at ccy excluding notable items
•
Expenses:
– Operating expenses to be below $12.3 bill
ion
in 2026
at ccy, now includ
ing the UK bank levy and the ongo
ing
impact of the reclassif
icat
ion; there has been no change
to the 2026 guidance on a like-for-like basis
– Expense saves of around $1.5 bill
ion and cost to
achieve of no more than $1.5 bill
ion from the F
it for
Growth programme
– Posit
ive
income-to-cost jaws in each year at ccy,
excluding notable items
•
Assets and RWA:
– Low single-dig
it percentage growth
in underlying loans
and advances to customers and RWA
– Basel 3.1 day-1 impact expected to be close to neutral
•
Continue to expect the loan loss rate to normalise towards
the histor
ical through-the-cycle 30 to 35 bas
is points range.
•
Capital:
– Continue to operate dynamically with
in the full
13-14 per cent CET1 ratio target range
– Plan to return at least $8 bill
ion to shareholders
cumulative 2024 to 2026
– Continue to increase full-year div
idend per share
over time
•
RoTE approaching 13 per cent in 2026 and to progress
thereafter.
Diego De Giorg
i
Group Chief Financ
ial Officer
21 February 2025
26
Standard Chartered
– Annual Report 2024
Strategic report
Group Chief Financ
ial Officer’s rev
iew
Summary of financial performance
2024
$mill
ion
2023
$mill
ion
Change
%
Constant
currency
change¹
%
Underlying net interest income
10,446
9,557
9
10
Underlying non NII
9,250
7,821
18
20
Underlying operating income
19,696
17,378
13
14
Other operating expenses
(11,700)
(11,025)
(6)
(7)
UK bank levy
(90)
(111)
19
19
Underlying operating expenses
(11,790)
(11,136)
(6)
(7)
Underlying operating profit before impa
irment and taxat
ion
7,906
6,242
27
28
Credit impa
irment
(557)
(528)
(5)
(5)
Other impa
irment
(588)
(130)
nm
nm
Profit from associates and jo
int ventures
50
94
(47)
(47)
Underlying profit before taxation
6,811
5,678
20
21
Restructuring⁴
(441)
(14)
nm
nm
Goodwill and Other impa
irment⁵
–
(850)
100
100
DVA
(24)
17
nm
nm
Other items³
(332)
262
nm
nm
Reported profit before taxation
6,014
5,093
18
19
Taxation
(1,972)
(1,631)
(21)
(24)
Profit for the year
4,042
3,462
17
17
Net interest margin (%)
2
1.94
1.67
27
Underlying return on tangible equity (%)
2
11.7
10.1
160
Underlying earnings per share (cents)
168.1
128.9
30
1
Comparisons presented on the basis of the current period’s transactional currency rate, ensuring like-for-like currency rates between the two periods
2
Change is the basis points (bps) difference between the two periods rather than the percentage change
3
Other items 2024 includes $100 mill
ion charge relat
ing to Korea equity linked securit
ies (ELS) portfol
io, $172 mill
ion pr
imar
ily relat
ing to recycling of FX translation
losses from reserves into P&L on the sale of Zimbabwe, $26 mill
ion loss on sale of Angola, $19 m
ill
ion loss on S
ierra Leone Partial exit and $15 mill
ion loss on the
Aviat
ion bus
iness disposal
4
Restructuring 2024 includes $156 mill
ion of F
it For Growth costs that are primar
ily severance costs, costs of staff work
ing on FFG in
it
iat
ives and legal and
professional fees
5
Goodwill and other impa
irment
include $850 mill
ion
impa
irment charge relat
ing to the Group’s investment in its associate China Bohai Bank (Bohai)
Reported financial performance summary
2024
$mill
ion
2023
$mill
ion
Change
%
Constant
currency
change
6
%
Net interest income
6,366
7,769
(18)
(17)
Non NII
13,177
10,250
29
30
Reported operating income
19,543
18,019
8
10
Reported operating expenses
(12,502)
(11,551)
(8)
(9)
Reported operating profit before impa
irment and taxat
ion
7,041
6,468
9
10
Credit impa
irment
(547)
(508)
(8)
(7)
Goodwill and Other impa
irment
(588)
(1,008)
42
42
Profit from associates and jo
int ventures
108
141
(23)
(24)
Reported profit before taxation
6,014
5,093
18
19
Taxation
(1,972)
(1,631)
(21)
(24)
Profit for the year
4,042
3,462
17
17
Reported return on tangible equity (%)
7
9.7
8.4
130
Reported earnings per share (cents)
141.3
108.6
30
6
Comparisons presented on the basis of the current period’s transactional currency rate, ensuring like-for-like currency rates between the two periods
7
Change is the basis points (bps) difference between the two periods rather than the percentage change
27
Standard Chartered
– Annual Report 2024
Strategic report
The Group’s strong performance in 2024 is underpinned by our
commitment to effective risk management amid complex
geopolit
ical and macroeconom
ic challenges across many of
our markets. The first half of the year saw sustained inflat
ion
levels, high interest rates and uncertaint
ies around the pace
of rate cuts, abated by the Fed’s gradual rate reductions in the
second half of 2024, with many central banks following suit.
Polit
ical developments rema
ined a key focus, with many
national elections taking place globally and civ
il unrest
in
several key markets requir
ing close mon
itor
ing. We proact
ively
considered the potential downside impact in our credit
impa
irment outlook. In the M
iddle East, heightened tensions
and the risk of a broader regional conflict prompted us to
strengthen cris
is management measures and assess sp
illover
risks. The Group continues to have lim
ited d
irect exposure to
Ukraine and to the countries in the Middle East which are
currently most impacted by conflicts. In China, the improv
ing
outlook in 2025 following rounds of government stimulus
measures in 2024 has helped stabil
ise Ch
ina’s real estate
sector. Nonetheless, we remain watchful of China’s policy
response to boost trade and domestic consumption, as
well as the persistent challenges in the property sector in
terms of asset devaluation and destocking process by the
major developers.
We remained vig
ilant
in managing persistent and evolving
geopolit
ical and macroeconom
ic risks while keeping our focus
to the Group’s strategy. This included monitor
ing volat
il
ity
in
commodity markets and assessing both direct and second
order impacts across our segments and vulnerable sectors.
Further details on the Topical and Emerging Risks which we
are monitor
ing are deta
iled on page 29.
Corporate & Investment Banking (CIB)
Our CIB credit portfolio remained resil
ient w
ith overall
good asset quality as evidenced by our largely investment
grade corporate portfolio (31 December 2024: 74 per cent,
31 December 2023: 73 per cent). In considerat
ion of the
macroeconomic challenges, portfolio and thematic reviews
were conducted throughout 2024. These included: (i) stresses
on extreme movements in commodity prices; (i
i) a global
commercial real estate (CRE) stress test, includ
ing a rev
iew of
ind
irect exposures where the Group may be exposed to; and
(i
i
i) thematic reviews of select geographies/portfolios. Our
proactive risk management helped us to ident
ify vulnerable
industry sectors and clients which could potentially come
under stress. The outcomes from these reviews include closer
monitor
ing of
impacted industr
ies and cl
ients, placement of
accounts on Early Alert, credit grade adjustment or taking
proactive lim
it or exposure reduct
ion actions, as appropriate.
Wealth & Retail Banking (WRB)
The WRB credit portfolio continued to demonstrate resil
ience
amid the economic uncertaint
ies and geopol
it
ical challenges
in 2024. Slowing economic growth in China and other
challenges persisted in our larger markets (Hong Kong, Korea
and Singapore), as prolonged higher interest rates mainta
ined
pressure on our retail customers’ debt servic
ing capac
ity
and translated into higher delinquenc
ies and
impa
irments.
Across our consumer credit portfolios, we monitored customer
affordabil
ity, proact
ively adjusted our orig
inat
ion criter
ia and
refined our portfolio management and collections strategies.
The WRB strategy was refreshed to pivot our product
offerings across our markets to focus on affluent segments.
While credit impa
irment
increased in 2024, we expect
improvement in credit performance in 2025 as the impact
of credit actions taken and pivot to affluent segments
material
ise across the portfol
ios. We will continue to monitor
changes in the macroeconomic environment, includ
ing
disrupt
ions caused by
increas
ing market and rates volat
il
ity,
regional conflicts and ris
ing geopol
it
ical and trade tens
ions,
through scenario analyses and portfolio reviews.
Treasury Risk
Our liqu
id
ity and capital risks are managed to ensure a strong
and resil
ient balance sheet that supports susta
inable growth.
Funding markets and liqu
id
ity condit
ions have generally been
stable in 2024 compared to 2023. We continue to have a clear
focus on Treasury risks includ
ing cap
ital, liqu
id
ity and Interest
Group Chief Risk Officer’s review
“Managing our risks and
focusing on business
resil
ience and strategy,
amidst persistent and
evolving macroeconomic
and geopolit
ical r
isks.”
Sadia Ricke
Group Chief Risk Officer
28
Standard Chartered
– Annual Report 2024
Strategic report
Group Chief Risk Officer’s review
Rate Risk in the Banking Book and enhance the Treasury Risk
framework as required. We mainta
ined a res
il
ient l
iqu
id
ity
posit
ion across the Group and major legal ent
it
ies throughout
2024 with Group liqu
id
ity coverage ratio (LCR) at 138 per cent
(31 December 2023: 145.4 per cent), a surplus to both Risk
Appetite and regulatory requirements. Common Equity
Tier 1 (CET1) ratio was 14.2 per cent as of December 2024
(31 December 2023: 14.1 per cent) while Leverage ratio was
4.8 per cent (31 December 2023: 4.7 per cent).
Further details on Risk Management for our Princ
ipal R
isk Types
in
page 196
Further details on Managing Climate Risk can be found in
page 256
An update on our risk management approach
Our Enterprise Risk Management Framework (ERMF) sets
out the princ
iples and m
in
imum requ
irements for risk
management and governance across the Group. The ERMF
is complemented by frameworks, polic
ies and standards
which are mainly aligned to the Princ
ipal R
isk Types (PRTs)
and is embedded across the Group, includ
ing
its branches
and subsid
iar
ies
1
.
The ERMF 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).
1
The Group’s ERMF and System of Internal Control applies only to wholly
controlled subsid
iar
ies of the Group, and not to Associates, Joint Ventures or
Structured Entit
ies of the Group.
Princ
ipal R
isk Types and Risk Appetite
PRTs are those risks that are inherent in our strategy and business model and have been formally defined in the Group’s ERMF.
These risks are managed through dist
inct R
isk Type Frameworks which are approved by the GCRO.
The table below details the Group’s current PRTs and their corresponding RA statements.
Princ
ipal R
isk Type
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,
geographies, 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
activ
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.
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
banking 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 risks).
The Group aims to control operational and
technology risks to ensure that operational losses
(financial or reputat
ional), includ
ing any related to the
conduct of business matters, do not cause material
damage to the Group’s franchise.
Information and
Cyber Security (ICS)
Risk
Risk to the Group’s assets, operations, and
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
material harm, business disrupt
ion, financial loss
or reputational damage – recognis
ing that wh
ile
inc
idents are unwanted, they cannot be ent
irely
avoided.
Financ
ial Cr
ime Risk
2
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 while 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
ile 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 env
ironmental and
social harm.
Model Risk
Potential loss that may occur because of decis
ions
or the risk of misest
imat
ion that could be princ
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;
while accepting some model uncertainty.
2
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 196 to 206
.
29
Standard Chartered
– Annual Report 2024
Strategic report
As part of our ongoing risk ident
ification process, we have
updated the Group’s TERs from those disclosed in the 2024
Half-Year Report. These remain relevant with nuances in their
evolution noted where pertinent. Below is a summary of the
TERs, and the actions we are taking to mit
igate them based
on our current knowledge and assumptions. This reflects the
latest internal assessment by senior management.
The TER list is not exhaustive and there may be addit
ional
risks which could have an adverse effect on the Group.
There are some horizon risks that, although not highly likely at
present, could become threats in the future and thus we are
monitor
ing them. These
include future pandemics and the
world’s preparedness for them, and potential cross-border
conflicts. Our mit
igat
ion approach for these risks may not
elim
inate them but demonstrates the Group’s awareness and
attempt to reduce or manage their impact. As certain risks
develop and material
ise over t
ime, we will take appropriate
steps to mit
igate them based on the
ir material
ity to the Group.
Macroeconomic and geopolit
ical cons
iderat
ions
There is a complex interconnectedness between risks due to
the direct influence of geopolit
ics on macroeconom
ics, as well
as the global or concentrated nature of key supply chains for
energy, food, semi-conductors and crit
ical m
inerals.
The Group is exposed to these risks directly through
investments, infrastructure and employees, and also
ind
irectly through
its clients. While the primary impact
is financ
ial, there may be other ram
if
icat
ions such as
reputational, compliance or operational considerat
ions.
Expanding array of global tensions and transit
ion of the
internat
ional order
The internat
ional order
is undergoing a transit
ion, w
ith a
shift towards a multi-aligned global system resulting in more
transactional and less predictable interact
ions between
global powers. This can give rise to new and more fluid
polit
ical and econom
ic alliances, accelerated by the
increas
ing number of confl
icts, specif
ically those
in Ukraine
and the Middle East.
While the Group has lim
ited d
irect exposure to the countries
which are currently involved in conflicts, it may be impacted
by second order effects on its clients and markets such as
agricultural commodit
ies, o
il and gas. The threat of escalation
to the wider Middle East region remains present, despite a
Gaza ceasefire agreement being reached in January 2025,
and could affect markets in the Group’s footprint. Regional
volatil
ity has
increased following the collapse of the Assad
regime in Syria.
The posit
ion
ing of ‘middle powers’ is complex and evolving,
and there is a rise in ‘min
i-lateral’ group
ings of countries that
are ideolog
ically or geograph
ically aligned. The negotiat
ing
power of exporters of key resources has grown and can shape
global markets.
Expanding power blocs such as BRICS may coalesce and
become more effective at exercis
ing the
ir increased collective
influence, such as establish
ing parallel financial
infrastructures
(payment system, development bank, credit rating agency) to
support their trade. Other coalit
ions between more act
ively
anti-Western regimes such as Russia, North Korea, Syria and
Iran could prove more volatile in their attempts to shift the axis
of power.
The 2024 global election cycle culminated with the US
elections in November. Donald Trump’s victory signals
forthcoming changes to relationsh
ips w
ith tradit
ional all
ies
such as Europe, given the focus on NATO spending and trade
surpluses. Tariffs may also be implemented in response to
non-economic issues such as imm
igrat
ion.
There have also been notable shifts in government
composit
ion
in France, UK, South Africa, Bangladesh and
Sri Lanka, as well as polit
ical cr
ises in Canada, South Korea
and Germany. Amid changes in governments, there is a
growing worldwide trend for short-term populist measures
that are outweigh
ing longer-term pol
it
ical necess
it
ies, such
as addressing climate change or demographic transit
ions.
Relations between the West, led by the US and the EU, and
China are in a state of flux. Tariffs, embargos, sanctions,
and restrict
ions on technology exports and
investments
are expected to increase in pursuit of both economic and
security goals.
The malic
ious use of AI enabled d
is
informat
ion could continue
to cause disrupt
ion and underm
ine trust in the polit
ical
process. This, combined with already fractured societ
ies
and persistent inequal
ity, may lead to he
ightened societal
tensions. Terrorism and cyber warfare are also ongoing
threats, with unpredictab
il
ity exacerbated by the wider range
of ideolog
ies at play. Cyber attacks can d
isrupt infrastructure
and inst
itut
ions in rival countries.
A more complex and less integrated global polit
ical and
economic landscape could challenge cross-border business
models but also provide new business opportunit
ies.
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.
Topical and Emerging Risks (TERs)
Topical Risks refer to themes that may have emerged but are still evolving
rapidly and unpredictably. Emerging Risks refer to unpredictable and
uncontrollable outcomes from certain events which may have the potential
to adversely impact our business.
30
Standard Chartered
– Annual Report 2024
Strategic report
Group Chief Risk Officer’s review
Despite this, markets have remained surpris
ingly res
il
ient
to adverse geopolit
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 sanctions 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 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
accessing hard currency liqu
id
ity more challenging.
Some countries also face a heightened risk of fail
ing to
manage societal 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,
with much financ
ing done on a b
ilateral basis outside of the
Paris Club. While the Global Sovereign Debt Roundtable has
made some progress on coordinat
ing approaches between
the Paris Club and other lenders, their interests do not always
match. This can lead to delays in negotiat
ions on debt
resolutions for developing nations.
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 cont
inued vulnerabil
ity of global supply l
ines.
There is growing polit
ical awareness around the need for key
component and resource security at national level. Countries
are enacting rules to ‘de-risk’ by reducing reliance on rivals or
concentrated suppliers (for example, semi-conductors) and
look to either re-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
equipment, 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. Act
ions 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
clients 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 credit insurance.
•
We conduct portfolio reviews as well as macroeconomic,
thematic and event-driven stress tests at Group, country
and business level, with regular reviews of vulnerable
sectors, and undertake mit
igat
ing actions.
31
Standard Chartered
– Annual Report 2024
Strategic report
•
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
severit
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
developing markets, where we have a large footprint.
Alongside climate, other environmental risks pose incremental
challenges to food, health systems and energy security; for
example, 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.
How these risks are mit
igated
•
Climate Risk considerat
ions are embedded across all
relevant Princ
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
sensit
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 risks 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 campaigns.
•
Detailed portfolio reviews and stress tests are conducted
to test resil
ience to cl
imate-related physical and transit
ion
risks and enhance modelling capabil
it
ies to understand the
financial 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
tradit
ional lenders as well as publ
ic markets. There are also
‘dig
ital enterpr
ise’ business models, which integrate financ
ial
services 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 number of
challenges. There has been a large increase of AI use in
frauds and scams, and there are potential societal and
economic impacts of the technology being used to replace
jobs across most sectors. However, with AI tools and models
being embedded into everyday life it is likely to become
a foundational technology. Leveraging the benefits of
augmented AI while managing these risks will be a core
part of the Group’s business model.
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
risks 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.
32
Standard Chartered
– Annual Report 2024
Strategic report
Group Chief Risk Officer’s review
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.
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
quality 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 generative 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
regulations, with differ
ing pace and scale of regulatory
adoption, conflict
ing rules, extraterr
itor
ial and local
isat
ion
requirements around data, staff, capital and revenues.
Data sovereignty and ESG regulation are prime examples
of jurisd
ict
ional r
isk.
This makes it challenging for multinat
ional groups to manage
cross-border activ
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 sustainable 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.
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
proportion 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, while polit
ical stances reduce
the abil
ity to fill sk
ills 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’.
33
Standard Chartered
– Annual Report 2024
Strategic report
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
societal 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 with the highest potential.
•
We emphasise frequent two-way feedback through
performance and development conversations to embed
a culture of continuous learning and development.
•
Our culture and EVP work is addressing the emerging
expectations of our diverse talent base, particularly around
being purpose-led.
•
We provide support and resources to all colleagues to help
balance productiv
ity, collaborat
ion and wellbeing, with
more than 60 per cent of our workforce having signed up
to work flexibly.
Sadia Ricke
Group Chief Risk Officer
21 February 2025
We’re build
ing
next-gen
entrepreneurial
skills
In August, we held our first Young Entrepreneurs
Programme (YEP) in Singapore for the children of
high-net-worth Prior
ity Pr
ivate clients.
The programme was curated in partnership with
SC Ventures, our innovat
ion, fintech
investment and
ventures arm, and INSEAD, the world’s leading business
school and our Wealth Academy partner.
The four-day workshop involved 53 partic
ipants of
13 national
it
ies jo
in
ing from eight of our top markets in
Asia and beyond. The programme focused on build
ing
early entrepreneurial skills, embedding a human-centred
design in translating client ins
ights
into venture ideas,
developing a business model and pitch
ing.
The YEP is a part of Global Experiences, an inv
itat
ion-only
programme for Prior
ity Pr
ivate clients, offering access to
unique events and bespoke activ
it
ies.
Read more at
sc.com/yep
34
Standard Chartered
– Annual Report 2024
Strategic report
35
Standard Chartered
– Annual Report 2024
Strategic report
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 35 to 41
•
How we engage employees and respond to their interests.
See pages 38 to 41
•
How we respond to stakeholder interests through
sustainable and responsible business. See pages 35 to 41
•
How the Board engages directly with shareholders and
other stakeholders. See pages 103 to 192
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 constructive relationsh
ips w
ith a wide range of
stakeholders includ
ing cl
ients, regulators and governments,
investors, suppliers, society and employees.
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 Board’s Culture and Sustainab
il
ity Committee
which oversees the Group’s approach to its main relationsh
ips
with stakeholders.
We communicate progress regularly with external
stakeholders through channels such as
sc.com
, established
social media platforms and this report. Further informat
ion
on how we engage with our stakeholders, and the in
it
iat
ives
that we are members of, can be found at
sc.com/
sustainab
il
itystakeholders
Stakeholders
Clients
As a global bank operating
in 53 markets, stakeholder
engagement is crucial in
ensuring we understand local,
regional and global perspectives
and trends which inform how
we do business.
Our stakeholders
Clients
Regulators and governments
Investors
Suppliers
Society
Employees
How we create value
We want to deliver easy, everyday banking solutions to our
clients in an innovat
ive yet s
imple 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 alongside 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.
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 SME 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 employees across our
branches and contact centres to ident
ify and support
vulnerable clients. We have also implemented an
educational train
ing programme for cl
ients who need
guidance in navigat
ing onl
ine and mobile channels.
36
Standard Chartered
– Annual Report 2024
Strategic report
Stakeholders
Throughout 2024, we mainta
ined our sharp focus on
improv
ing
the client 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 a
im to reach
net zero in our financed emiss
ions by 2050, our trans
it
ion
finance team has been working closely with our clients in
hard-to-abate sectors on their own transit
ions. Th
is is in
addit
ion to our comm
itment to mobil
ise $300 b
ill
ion of
sustainable finance between 2021 and 2030.
Across the Bank, we have processes and controls aimed 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 & Retail Banking
In 2024, we continued to expand our suite of solutions to help
clients grow, protect and pass on 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
global experiences, wealth planning, family advisory and
trust services.
In addit
ion, we have evolved our managed
investments
business to focus on helping clients build foundational and
opportunist
ic portfol
ios. To support this, we offer innovat
ive
solutions, includ
ing our S
ignature CIO Funds, a series of
foundational portfolios built on our CIO ins
ights, ava
ilable in
12 markets and contribut
ing $2.1 b
ill
ion dollars
in Wealth AUM.
We also launched our first Young Entrepreneur Programme.
The inaugural programme was curated in collaboration
with INSEAD and SC Ventures – our innovat
ion, fintech
investment and ventures arm – and focused on supporting
high-net-worth clients’ next generation with business and
entrepreneurial skills. It garnered posit
ive feedback from the
53 young partic
ipants who joined from e
ight markets across
our network.
Corporate & 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,
financing 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 new corridors of globalisat
ion.
We continue to connect capital flows to, through and from
Africa, the Middle East and Asia and play a leading role in
promoting sustainable finance.
In 2024, in Africa, for example, we were involved in EUR533
mill
ion of financing, backed by the Afr
ican Development Bank,
for the government of Côte d’Ivoire and EUR1.29 bill
ion of
financing for the Angolan M
in
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 as sustainable finance, Islamic banking and RMB
internat
ional
isat
ion, all of wh
ich 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
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 policymakers
at the global, regional and national level as well as trade
associat
ions to share
ins
ights and support the development
of best practices 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 and
resil
ience, and cl
imate risk.
•
Technologies and dig
ital assets,
includ
ing for example
stablecoin and crypto assets, dig
ital asset custody, data
sovereignty or the use of artif
ic
ial intell
igence (AI) and
internat
ional trade and d
ig
ital trade such as d
ig
ital
tokenisable trade assets.
Their interests
•
Strong capital base and liqu
id
ity posit
ion appropr
iate to
a global systemically important bank
•
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
Clients
continued
37
Standard Chartered
– Annual Report 2024
Strategic report
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
financial frameworks.
Through our 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.
The Group delivered a strong set of results in 2024. Our focus
is on build
ing on our double-d
ig
it return on tang
ible equity
(RoTE) and accelerating to deliver sustainably higher returns
over the next three years. We are now targeting a RoTE
approaching 13 per cent in 2026. We aim to achieve this
through income growth, expense disc
ipl
ine, ongoing
transformation and active capital management as outlined
in our 2024–2046 financ
ial framework, launched at the start
of 2024.
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 direct engagement via our Investor Relations team, we
communicate through quarterly, 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. We also hosted an Affluent Investor sem
inar
in December and a deep dive for Chinese investors in
September.
Key investor feedback, recommendations and requests are
considered by the Board, whose members keep abreast of
current topics of interest. Standard Chartered PLC’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 Board questions. The AGM is our princ
ipal
engagement event with our retail investors. Further details of
our 2024 AGM are on page 185.
Sim
ilarly, the Group Cha
irman, alongside some members of
the 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
We continue 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
sustainably higher returns.
Their interests
•
Safe, strong and sustainable financ
ial performance
•
Facil
itat
ion of sustainable finance to contribute to the
United Nations Sustainable Development Goals
•
Progress on ESG matters, includ
ing advanc
ing our net
zero agenda
Suppliers
Supporting a sustainable supply chain
We 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. For
further details on our net zero and supply chain emiss
ions
programmes vis
it page 76.
Supporting a diverse and inclus
ive supply cha
in
We are committed to build
ing mutually beneficial
relationsh
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. Further details on the princ
iples of Suppl
ier
Divers
ity and Inclus
ion can be found in our Supplier Divers
ity
and Inclusion Standard at:
sc.com/supplier-standard
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 diverse 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
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 supplier divers
ity programme and suppl
ier
awards events vis
it
sc.com/supplier-divers
ity
Their interests
•
Open, transparent and consistent tendering process
•
Accurate and on-time payments
•
Will
ingness to adopt suppl
ier-driven innovat
ion
•
Obtain guidance on implementat
ion of
sustainab
il
ity matters
Investors
Investors
continued
38
Standard Chartered
– Annual Report 2024
Strategic report
Stakeholders
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 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 target of enabl
ing and supporting
140,000 decent jobs between 2024 and 2030.
To deepen our understanding of the impacts of our
programmes, we 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 sponsorships. 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
plugging 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
partnerships 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.
Our colleagues
We encourage colleagues to give back to their communit
ies
using their three days paid volunteering leave. To enable a
volunteering culture, we gathered feedback and ins
ights from
our employee volunteering (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’ skill 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. In 2024, 53 per cent of colleagues volunteered
includ
ing contr
ibut
ing 114,276 hours to sk
ills-based
volunteering.
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 productiv
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 developing 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 here for good. We proactively assess and manage
people-related risks, such as capacity, capabil
ity and culture,
as part of our Group Risk Management Framework. Our
people strategy, approved by the 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 brand promise and purpose of driv
ing
commerce and prosperity through our unique divers
ity
into
our colleagues’ day-to-day experience is crit
ical to us
remain
ing an employer of cho
ice across our footprint. The
research we have on our employee value proposit
ion (EVP)
tells us that our exist
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 posit
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’ expectations 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, or
return to work after parental leave. In addit
ion to leverag
ing
inputs from these surveys, the Board and Group Management
Team also engage with and listen to the views of colleagues
through interact
ive sess
ions. More informat
ion on the Board’s
engagement with the workforce can be found on page 121 in
the Directors’ report.
In 2024, our annual My Voice survey was conducted in May
and June. Eighty-seven per cent of our employees (68,590)
and 36 per cent of elig
ible agency workers (778) part
ic
ipated.
Key measures of satisfact
ion have stayed h
igh; however,
some have seen a decline year-on-year as the impact of our
transformation continues to be felt. Overall, the experience of
working for the Bank remains a posit
ive one. E
ighty-three per
cent of employees say that the Group meets or exceeds their
expectations, 96 per cent feel committed to doing what is
required to help the Group succeed, and 88 per cent feel
proud about working for the Group.
Society
39
Standard Chartered
– Annual Report 2024
Strategic report
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 phys
ical 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
Early in 2024, we launched Appreciate, our new dig
ital
platform to empower colleagues to give in-the-moment
peer-to-peer recognit
ion. Democrat
is
ing how colleagues
celebrate each other’s achievements is reinforc
ing the
importance of two-way feedback as well as recognis
ing
the behaviours that drive high performance. Hyper-
personalis
ing how our people feel apprec
iated in a way
that is most meaningful, to them is also a powerful driver
of employee experience. Across the year, the platform
was used by over 76 per cent of colleagues to share nearly
700,000 recognit
ions w
ith each other.
Build
ing leadersh
ip capabil
it
ies
Exceptional performance requires exceptional leadership,
and we believe that our people leaders are crit
ical to
unlocking 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 leadership
agreement sets out clear expectations from our leaders to
aspire, insp
ire and execute. It also forms the foundat
ion 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, lead
ing for
transformation, and leading through ambigu
ity. Wh
ile more
than 4,200 leaders learned 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. Nearly 28,000 employees have
now experienced the leadership health journey of regular
micro-learning activ
it
ies (since launch in 2021), over 700 have
built skills through our ‘virtual escape room’ game for aspir
ing
leaders, and over 5,500 have partic
ipated
in experient
ial
bootcamps on creating an environment of psychological
safety and innovat
ion.
In 2024, 97 per cent of our people leaders received 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. Leaders
are also provided 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 conversations, and highl
ight
ing the value we
place on leadership.
Read our Leadership Agreement at
sc.com/leadershipagreement
We also continue to be recognised as an employer of
choice and details of our accolades can be found at
sc.com/employer-awards
.
All of 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 clients.
Driv
ing a culture of susta
inable high performance
As the Group transforms to achieve our strategic ambit
ions,
we continue 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,
constructive feedback among 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 a culture
of high performance, have continued to strengthen each
year. In 2024, 64 per cent of colleagues received feedback in
the system (versus 60 per cent in 2023, 59 per cent in 2022
and 39 per cent in 2021 when our refreshed approach was
first launched).
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 focusing 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
progressive 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 (to date, nearly 600 colleagues have been
trained). In 2024, levels of consistent and frequent work-
related stress continued to decrease and colleagues felt more
comfortable sharing concerns about stress with their people
leader. Over three-quarters of our people said they felt able
to choose a reasonable balance between their work and
personal life, and 80 per cent felt they could adjust work
to accommodate personal needs. 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 wellbe
ing
champions, and embedding wellbeing skills (such as resil
ience
and adaptabil
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 experience of our workforce. Over 76 per cent of
employees in 42 of our markets are now on agreed flexible
working arrangements, with the major
ity hav
ing signed
up to work from the office for two to three days per week.
Our model purposefully balances client needs and business
prior
it
ies with ind
iv
idual choice, allowing us to be inclus
ive of
the diverse 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.
Employees
continued
40
Standard Chartered
– Annual Report 2024
Strategic report
Stakeholders
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
skills are deployed to areas of opportunity across the 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 system
ic future-focused skills that are antic
ipated to
be needed to keep pace with the changes happening in the
sector (such as in sustainab
il
ity, innovat
ion, data, d
ig
ital and
leadership) 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. For example, w
ith our increas
ing
focus on enhancing our Affluent client proposit
ion
in Wealth
& Retail Banking, we are invest
ing
in deliver
ing upsk
ill
ing,
reskill
ing and redeployment journeys for colleagues to enable
them to access opportunit
ies as the bus
iness segment grows.
In Corporate & Investment Banking, 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 workforce transformation is closely linked to our business
growth and transformation.
Learning in classrooms is combined with learning through our
online learning platform. Over 71,000 colleagues actively used
the platform in 2024 and over 31,000 colleagues have used
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 practise skills on the job, can
connect with mentors and 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. Over 43,000 employees
are engaging with the Talent Marketplace, with over 2,800
projects being assigned (since launch in 2020). Deploying their
skills at speed across our network has resulted in unlocking
over $9.5 mill
ion
in terms of 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 ded
icated careers hub, careers toolkits, and
conversation guides.
We are invest
ing
in developing a workforce that is both
knowledgeable about and confident in working with
Artif
ic
ial Intelligence (AI). Our AI Learning Hub
democratises AI awareness and knowledge build
ing by
provid
ing access to all colleagues to
immers
ive learn
ing
opportunit
ies,
interact
ive s
imulat
ions and pract
ical
case studies, as well as to a range of AI thought leaders,
experts and enthusiasts. Further, colleagues can now use
GenAI-based assist
ive wr
it
ing tools to upl
ift the quality
of feedback being shared with team members as well
as peers, includ
ing mak
ing the feedback more impactful
and actionable. They can also use GenAI to improve
quality and focus when writ
ing the
ir performance and
development goals.
Creating an inclus
ive workplace
Our inclus
ive culture and comm
itment to divers
ity and
inclus
ion (D&I) are a v
ital part of our employee value
proposit
ion and what enables us to dr
ive business success.
Through our multiple employee listen
ing surveys, and
supplemented by qualitat
ive feedback, we a
im to better
understand the lived experiences of our colleagues, and
then act to make targeted, meaningful changes to further
drive inclus
ion and enhance exper
ience. Our levels of
inclus
ion rema
in high and is reflected in the 82.1 per cent
of colleagues who shared posit
ive sent
iments in the 2024
annual My Voice survey.
We continue to invest in efforts towards increas
ing
awareness around divers
ity and
inclus
ion pr
inc
iples,
unconscious 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 which had been completed
by more than 33,500 colleagues by the end of 2024, as well
as the ‘Respect at Work’ e-learning programme that helps
colleagues understand what constitutes harassment, bullying,
discr
im
inat
ion and v
ict
im
isat
ion and cont
inues is mandatory
for all new joiners.
We are committed to abid
ing by the laws
in all jur
isd
ict
ions
in
which we operate, includ
ing ant
i-discr
im
inat
ion laws. We are
focused on further strengthening our inclus
ive culture, where
all our people feel that their ident
ity
is understood and
recognised for its uniqueness and anyone with the capabil
ity
to excel can do so. Employees are provided, 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
representative 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 42 per cent of
the Board, 14 of our CEOs are women, and representation of
women in senior leadership roles increased to 33.1 per cent
by 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 by end of
2025. As of 2024, 33 per cent of our Board ident
ifies as be
ing
from an ethnic minor
ity background, above our asp
irat
ion of
Employees
continued
1
Subject to local legal requirements
41
Standard Chartered
– Annual Report 2024
Strategic report
30 per cent. Further, 21.1 per cent of our Group Management
Team and their direct reports ident
ify as Black, As
ian or ethnic
minor
ity. In the US, Black/Afr
ican American representation in
senior leadership is 3.6 per cent and Hispan
ic/Lat
in in senior
leadership is 10.9 per cent. In the UK, Black representation in
senior leadership is 2.5 per cent and ethnic minor
ity
in senior
leadership is 28.4 per cent. We are currently ahead of our 2025
target in the UK of 20 per cent ethnic minor
ity representat
ion
in senior leadership, and we aim to mainta
in th
is level through
to 2027. We continue to develop strategic partnerships and
experiment with programmes to widen our talent pools such
as by provid
ing tools and strateg
ies in career workshops to
retain, engage and develop all talent, by improv
ing career
mobil
ity support
includ
ing through ‘buddy’ ass
istance, and
by rolling out sponsorship programmes.
Leadership commitment remains crit
ical to our approach on
D&I. Our Global D&I Council is chaired by our CEO, Wealth &
Retail Banking and comprises enterprise-wide leaders
representing various business, functions and geographies
from across the Group. The Council is responsible for our
overall D&I strategy, direct
ion sett
ing, and overseeing
the implementat
ion of susta
inable and measurable
improvements. It is focused on developing a diverse talent
pipel
ine to
improve leadership representation, build
ing
sponsorship 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 and 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 and gender and ethnic
ity pay gap analys
is in our
Divers
ity, Equ
ity & Inclusion Impact Report 2024 at
sc.com/fairpayreport
.
Employees
continued
Women representation
Women
42
%
(2023: 38%)
Women
34.1
%
(2023: 36.1%)
Women
45.0
%
(2023: 44.8%)
Women
33.1
%
(2023: 32.5%)
Board
Management Team and their direct reports
All employees
Senior leadership
2023
2024
2023
2024
2023
2024
2023
2024
Women
5
Men
7
Women
42
Men
81
Women
36,553
Men
43,665
Women
1,453
Men
2,915
Undisclosed
927
Undisclosed
17
42
Standard Chartered
– Annual Report 2024
Strategic report
Sustainab
il
ity overview
Non-financial and susta
inab
il
ity informat
ion statement
We have included with
in th
is Annual Report non-financ
ial susta
inab
il
ity-related informat
ion wh
ich we believe is material based
on the interests of our key stakeholders as described on pages 35-41 and the results of our material
ity assessment (page 60).
This table sets out where shareholders and other stakeholders can find informat
ion about key non-financial matters
in this
report, in compliance with the non-financ
ial report
ing requirements contained in sections 414CA and 414CB of the Companies
Act 2006. Further disclosures are available via
sc.com/sustainab
il
ityl
ibrary
.
Climate-related informat
ion requ
ired under sections 414CA and 414CB of the Companies Act 2006 is integrated throughout this
Annual Report. Please refer to the Taskforce on Climate-related Financ
ial D
isclosures (TCFD) index below.
Reporting requirement
Where to find more informat
ion
in this report about our polic
ies
and impact includ
ing r
isks, due dil
igence processes and outcomes
Page
Descript
ion of bus
iness model
Who we are and what we do
02-03
Our strategy
18
Our business model
19-20
Princ
ipal r
isks and uncertaint
ies
Risk review and capital review
193-274
Environmental matters
Our operations
77
Our suppliers
78
Our clients
78-98
Employees
Employees
38-41
Employee polic
ies and engagement
188-189
Health, safety and wellbeing
189-190
Human rights
Suppliers
94
Respecting human rights
94
Social matters
Commercial activ
it
ies
91
Philanthrop
ic act
iv
it
ies
91-92
Anti-corruption
and anti-bribery
Code of conduct and ethics
95
Fight
ing financial cr
ime
96
Polit
ical donat
ions
190
Non-financial KPIs
Supplementary people informat
ion
388-392
Supplementary sustainab
il
ity informat
ion
393-395
See the Sustainab
il
ity Review section from
pages 58 to 102
for further informat
ion and deta
ils
Sustainab
il
ity overview
43
Standard Chartered
– Annual Report 2024
Strategic report
Taskforce on Climate-related Financ
ial D
isclosures (TCFD) reporting index
Section
TCFD recommendation
Page
Governance
a)
The Board’s oversight of climate-related risks and opportunit
ies
The processes and frequency by which the Board and/or Board committees are informed
about climate-related issues
98-99
How the Board and/or Board committees considers climate-related issues when review
ing
and guid
ing strategy, major plans of act
ion, risk management polic
ies, annual budgets, and
business plans
98-99
How the Board monitors and oversees progress against goals and targets for addressing
climate-related issues
98-99
b)
Management’s role in assessing and managing climate-related risks and opportunit
ies
Assigned climate-related responsib
il
it
ies to management-level pos
it
ions and/or comm
ittees
98-101
A descript
ion of the assoc
iated organisat
ional structure
98
The processes by which management is informed about climate-related issues
100
How management (through specif
ic pos
it
ions and/or management comm
ittees) monitors
climate-related issues
100
Strategy
a)
Climate-related risks and opportunit
ies the Group has
ident
ified over the short,
medium and long term
Our short, medium and long-term time horizons that we assess climate-related risks and
opportunit
ies over
89
A descript
ion of the spec
if
ic cl
imate-related issues potentially aris
ing
in each time horizon,
and a descript
ion of the processes used to determ
ine which risks and opportunit
ies could
have a material financ
ial
impact
256-269
•
We disclose the ident
ified r
isks and opportunit
ies for our segments across pages
258-268
•
We disclose the ident
ified r
isks and opportunit
ies for our own operat
ions across pages
264-265
Our climate-related risks and opportunit
ies by geography
•
We disclose our Wealth & Retail Banking physical risk exposure across our top 10 markets
on pages
258-259
•
We disclose our Wealth & Retail Banking transit
ion r
isk ratings in relation to our mortgage
portfolio on pages
259-260
•
We disclosure our gross physical and transit
ion r
isk exposure per region on pages
264
•
We disclose our sign
ificant concentrat
ions of credit exposure to carbon-related assets.
Refer to our financed emiss
ions report
ing for the Group’s exposure in relation to our
12 highest emitt
ing sectors on pages
80-88
b)
Impact of climate-related risks and opportunit
ies on the Group’s bus
inesses, strategy
and financial plann
ing
Impact of climate-related risks and opportunit
ies on:
•
Business, strategy and financ
ial plann
ing in products and services
•
Supply chain and value chain
•
Adaptation and mit
igat
ion activ
it
ies
• Operations
69-73
78
256-265
77, 264-265
How climate-related issues serve as an input to the Group’s financ
ial plann
ing process,
the time period(s) used, and how these risks and opportunit
ies are pr
ior
it
ised
265-269
Impact of climate-related issues on our financ
ial performance
265-269
c)
Resil
ience of the Group’s strategy, tak
ing into considerat
ion d
ifferent climate-related
scenarios includ
ing a two degrees Cels
ius or lower scenario
Resil
ience of our strateg
ies to climate-related risks and opportunit
ies, tak
ing into
considerat
ion a trans
it
ion to a low-carbon economy cons
istent with a two degree or lower
scenario. We also disclose:
•
Where we believe our strategies may be affected by climate-related risks and
opportunit
ies
•
How our strategies might change to address such potential risks and opportunit
ies
•
The potential impact of climate-related issues on financ
ial performance
•
The climate-related scenarios and associated time horizon(s) considered
For informat
ion regard
ing the scenarios that we have used, the behaviour of ident
ified
risks and opportunit
ies per segment and
in our operations across each scenario, and our
assessment of our resil
ience to these r
isks, please refer to the ‘Assessing the resil
ience of
our strategy using scenario analysis’ section.
265-269
44
Standard Chartered
– Annual Report 2024
Strategic report
Sustainab
il
ity overview
Section
TCFD recommendation
Page
Risk
Management
a)
Our processes for ident
ify
ing and assessing climate-related risks
Our risk management processes for ident
ify
ing and assessing climate-related risks
•
We describe how we ident
ify and assess cl
imate-related risks by segment and in our
operations with
in the ‘Manag
ing climate risk’ section as well as how we determine the size
and scope of these risks and how they are prior
it
ised.
256-265
Exist
ing and emerg
ing regulatory requirements related to climate change that we consider
256
Our processes for assessing the potential size and scope of ident
ified cl
imate-related risks
256-265
b)
Our processes for managing climate-related risks
Our processes for managing climate-related risks, includ
ing how we make dec
is
ions to
mit
igate, transfer, accept, or control those r
isks
•
We describe how we ident
ify and assess cl
imate-related risks by segment and in our
operations with
in the ‘Manag
ing climate risk’ section, as well as how we determine the size
and scope of these risks and how they are prior
it
ised.
256-265
Our processes for prior
it
is
ing cl
imate-related risks, includ
ing how mater
ial
ity determ
inat
ions
are made with
in the Group
256-265
c)
How the Group’s processes for ident
ify
ing, assessing and managing climate-related risks
are integrated into the Group’s overall risk management
•
While Climate Risk will remain as a cause in the Group’s Risk Taxonomy and manifest
through our businesses and operations, we have formally incorporated Climate Risk into
the ESG Risk Type Framework (RTF).
206
Metrics and
Targets
a)
The metrics used by the Group to assess climate-related risks and opportunit
ies
in line with
our strategy and risk management processes
Our key metrics used to measure and manage climate-related risks and opportunit
ies
•
Refer to ‘Sustainab
il
ity Aspirat
ions: our long-term goals’ for our key opportun
ity metrics
•
Refer to Streamlined Energy and Carbon Reporting with
in the D
irectors’ report for our
Scope 1 and Scope 2 emiss
ions metr
ics, and to ‘Our emiss
ions sources’ for our Scope 3
emiss
ions
•
Refer to ‘Our operations’ for other key metrics ident
ified
in relation to our operations
•
Refer to ‘Managing climate risk’ section for metrics used to assess physical and transit
ional
risk exposure in relation to our Wealth & Retail Banking and Corporate & Investment
Banking segments
64
183-184
258-264
How we incorporate related performance metrics into our remuneration polic
ies
Refer to our ‘Incentive structure’ section and our ‘Directors’ remuneration report’
102, 150, 157, 161
b)
Scope 1, Scope 2, and Scope 3 greenhouse gas (GHG) emiss
ions, and the related r
isks
Refer to ‘Our emiss
ions sources’, ‘Our Operat
ions’ and ‘Our suppliers’ sections for our Scope 1, 2
and 3 emiss
ions relat
ing to our own operations and supply chain
76-78
Refer to ‘Our clients’ section for our Scope 3 financed and facil
itated em
iss
ions
78-79
c)
The targets used by the Group to manage climate-related risks and opportunit
ies and our
performance against targets
•
Refer to our ‘Sustainab
il
ity Aspirat
ions: our long-term goals’ for descr
ipt
ions of our long-
term targets and ‘Sustainab
il
ity Strategic Pillars: our short-term targets and immed
iate
prior
it
ies’ for descript
ions of our
inter
im targets
•
We have also outlined other climate-related targets in relation to ‘Our operations’
•
We describe the methodologies we have used to calculate our targets in relation to
emiss
ions w
ith
in our ‘Cl
imate’ section
64-65
77
74-76
45
Standard Chartered
– Annual Report 2024
Strategic report
The directors are to also disclose the period of time for which
they have made the assessment and the reason they consider
that period to be appropriate.
In consider
ing the v
iab
il
ity of the Group, the directors have
assessed the key factors includ
ing, but not l
im
ited to;
inflat
ionary
pressures, spikes in oil prices, disrupt
ion to global supply
chains, depreciat
ion
in emerging market currencies, market
volatil
ity, econom
ic recession, and geopolit
ical events l
ikely to
affect the Group’s business model and strategic plan, future
performance, capital adequacy, solvency and liqu
id
ity taking
into account the emerging risks as well as the princ
ipal r
isks.
The viab
il
ity assessment has been made over a period of
three years, which the directors consider appropriate as it is
with
in both the Group’s strateg
ic planning horizon and, the
basis upon which its regulatory capital stress tests are
undertaken and is representative of the continuous level of
regulatory change affecting the financ
ial serv
ices industry.
The directors will continue to monitor and consider the
appropriateness of this period.
The directors have reviewed the corporate plan, the output of
the Group’s formalised process of budgeting and strategic
planning. The 2025 Corporate Plan is set against a backdrop
of sign
ificant geopol
it
ical and macroeconom
ic challenges, in
particular an uncertain interest rate trajectory. The Corporate
Plan is evaluated and approved each year by the Board with
confirmation from the Group Ch
ief Risk Officer that the Plan
is aligned with the Enterprise Risk Management Framework
and with
in Group R
isk Appetite Statement and considers the
Group’s future projections of profitabil
ity, cash flows, capital
requirements and resources, liqu
id
ity ratios and other key
financial and regulatory rat
ios over the period. The Corporate
Plan details the Group’s key performance measures, of
forecast profit, CET 1 capital ratio forecast, return on tangible
equity forecasts, cost to income ratio forecasts and cash
investment project
ions. The Board has rev
iewed the ongoing
performance management process of the Group by comparing
the reported results to the budgets and corporate plan.
The Group performs enterprise-wide stress tests using a range
of bespoke hypothetical scenarios that explore the resil
ience
of the Group to shocks to its balance sheet and business
model. To assess the Group’s balance sheet vulnerabil
it
ies and
capital and liqu
id
ity adequacy, severe but plausible macro-
financial scenar
ios explore shocks that trigger one or more of:
•
Global slowdowns includ
ing recess
ions in China, Asian and
Western economies that can be acute or more protracted,
resulting in severe declines in property prices.
•
Sharp falls in world trade volumes and disrupt
ion to global
supply chains, includ
ing the severe worsen
ing of trade
tensions and rise of protection
ism.
•
Inflationary pressures in the global economy includ
ing
volatil
ity
in commodity prices.
•
Sign
ificant r
ises in interest rates and depreciat
ion
in
emerging market currencies, resulting in heightened
sovereign risk.
•
Financ
ial market volat
il
ity,
includ
ing s
ign
ificant moves
in
asset prices driven by a combinat
ion of macroeconom
ic
and geopolit
ical events.
This year, the primary focus has been on:
•
The effect of increased global trade tensions leading
to severe economic downturns across Asia and other
regions, coupled with interest rate reductions and lower
commodity prices.
•
The effect of high interest rates and persistent inflat
ion,
includ
ing sp
ikes in the oil price, combined with severe
market volatil
ity and severe econom
ic downturns in China
and other economies.
•
The impact of intens
ify
ing geopolit
ical tens
ions on
economic and financ
ial act
iv
ity
in our footprint
markets includ
ing an assessment of both financial
and operational risks.
•
Testing liqu
id
ity resil
ience through mult
iple severe scenarios
sim
ilar to S
il
icon Valley Bank or Cred
it Suisse and fully
integrat
ing them
in the liqu
id
ity risk framework.
In 2024, the Group undertook a number of Climate Risk stress
tests, includ
ing those mandated by the Hong Kong Monetary
Authority (HKMA) and internal management scenario
analysis. We are also partic
ipat
ing in the Monetary Authority
of Singapore’s (MAS), Bank Negara Malaysia’s (BNM) and
Otoritas Jasa Keuangan’s (OJK) climate stress tests. Results are
expected to be submitted in 2025. For the internal management
scenario analysis, we assessed the resil
ience of 94 per cent of
Corporate & Investment Banking (CIB) Exposure at Default
and expanded our coverage to stress Wealth & Retail Banking
(WRB) portfolios as well, across three external scenarios
based on Version 3 of the Network for Greening the Financ
ial
System (NGFS) and three internal management scenarios.
The three internal scenarios refer to one bespoke base case
and a physical and a transit
ion ta
il risk scenario.
The loan impa
irment (LI)
intens
ity wh
ich measures the level
of gross expected credit losses against the exposure at
default enables us to assess the relative size of our exposure
subject to potential losses from climate risks. LI intens
ity
is
not currently material. Overall, we believe that the level of
potential credit losses can be mit
igated by cont
inu
ing to take
necessary actions, which the Group is already doing across
sectors, engaging with our clients on this topic and supporting
them in enhancing their climate transit
ion plans.
We examined exposure concentration in key markets subject
to the extreme risk of floods and storms to assess the acute
physical risk, and sea level rise to assess the chronic physical
risk. Stranded assets analysis was conducted for resident
ial
mortgages to ident
ify propert
ies that are expected to
become uninhab
itable and/or unusable due to
increased
frequency and intens
ity of phys
ical risk events from acute
and chronic risks. In 2024, Climate Risk was also considered as
part of our formal annual corporate strategy and financial
planning process.
Under this range of scenarios, the results of these stress tests
demonstrate that the Group has sufficient cap
ital and
liqu
id
ity to continue as a going concern and meet regulatory
min
imum cap
ital and liqu
id
ity requirements.
Viab
il
ity statement
The directors are required to issue a viab
il
ity statement regarding the Group, explain
ing the
ir
assessment of the prospects of the Group over an appropriate period of time and state whether
they have reasonable expectation that the Group will be able to continue in operation and meet
its liab
il
it
ies as they fall due.
46
Standard Chartered
– Annual Report 2024
Strategic report
Viab
il
ity statement
To evaluate the vulnerabil
it
ies inherent in the Group’s business
model, we examine extreme scenarios that could potentially
result in the firm reaching the point of non-viab
il
ity. The
probabil
ity of such events occurr
ing is considered to be low.
During the year, we analysed the escalation of geopolit
ical
tensions resulting in widespread sanctions and the bifurcat
ion
of financial systems between Eastern and Western ent
it
ies,
along with its impl
icat
ions to our operational model. The
ins
ights der
ived from these assessments can provide valuable
guidance for strategy formulation, risk management,
operational resil
ience, as well as cap
ital and liqu
id
ity planning.
The directors further considered the Group’s Internal Liqu
id
ity
Adequacy Assessment Process, which considers the Group’s
liqu
id
ity posit
ion,
its framework and whether suffic
ient
liqu
id
ity resources are being mainta
ined to meet l
iab
il
it
ies as
they fall due. Funding and liqu
id
ity was considered in the
context of the risk appetite metrics, includ
ing the ADR and
LCR ratios.
The Board Risk Committee (BRC) exercises oversight on
behalf of the Board of the key risks of the Group and reviews
the Group’s Risk Appetite Statement and Enterprise Risk
Management Framework, includ
ing rev
iew
ing the
appropriateness and effectiveness of the Group’s risk
management systems, key controls and consider
ing the
impl
icat
ions of material regulatory change proposals, and
review
ing reports on pr
inc
ipal r
isks, includ
ing Cl
imate Risk,
to the Group’s business.
The BRC receives regular reports on the Group’s key risks,
as well as updates on the macroeconomic environment,
geopolit
ical and sovere
ign risks, market developments,
and relevant regulatory updates.
In 2024, the BRC received regular reports on the impacts
from global conflicts and discussed potential impact to the
Group. The Committee discussed a wide range of potential
policy changes and their impl
icat
ions for the Group, includ
ing
impacts on our clients, markets, colleagues and regulators.
The Committee also reviewed and discussed reports
on the risk environment, includ
ing the progress of key
transformational change management and technology
simpl
ification programmes, scrut
in
is
ing the overall risk
assessments, resources, capabil
it
ies and delivery against
milestones. For our recovery and resolution planning, the
Committee continued to oversee how the Group tested and
improved its resolution capabil
it
ies in line with the Bank
of England’s Resolvabil
ity Assessment Framework and
conducted subsid
iary board s
imulat
ion exerc
ises for some of
our markets. The Committee had deep dive reviews of our
WRB and CIB portfolios with particular focus on areas such as
change management, unsecured dig
ital lend
ing partnerships
and private equity financ
ing act
iv
it
ies. Financ
ial Cr
ime and
Information and Cyber Security risks in the context of these
businesses and markets were focused on to fully understand
how these risks are being managed and mit
igated.
Based on the informat
ion rece
ived, the directors considered
the princ
ipal uncerta
int
ies as well as the pr
inc
ipal r
isks in their
assessment of the Group’ viab
il
ity, how these impact the risk
profile, performance and viab
il
ity of the Group and any
specif
ic m
it
igat
ing or remedial actions necessary.
For further details of informat
ion relevant to the d
irectors,
assessment can be found in the following sections of the
annual report and accounts:
•
The Group’s business model (pages 19 to 20) and strategy
(page 18)
•
The Group’s current posit
ion and prospects
includ
ing factors
likely to affect future results and development, together
with a descript
ion of financial and fund
ing posit
ions are
described in the client segment reviews (pages 21 to 23)
•
An update on the key risk themes of the Group is discussed
in the Group Chief Risk Officer’s review, found in the:
– Strategic report (pages 27 to 33)
– The BRC section of the Directors’ report (pages 129 to 133)
– The Group’s Topical and Emerging Risks, sets out the key
external factors that could impact the Group in the
coming year (pages 29 to 33)
– The Group’s Enterprise Risk Management Framework
details how the Group ident
ifies, manages and governs
risk (pages 196 to 200)
– The Group’s Risk profile provides an analysis of our risk
exposures across all major risk types (page 207 to 269)
– The capital posit
ion of the Group, regulatory
development and the approach to management and
allocation of capital are set out in the Capital review
(pages 270 to 274).
Having considered all the factors outlined above, the directors
confirm that they have a reasonable expectation that the
Group will be able to continue in operation and meet its
liab
il
it
ies as they fall due over the per
iod of the assessment
up to 21 February 2028.
Our Strategic report from pages 1 to 46 has been
reviewed and approved by the Board.
Bill Winters
Group Chief Executive
21 February 2025
Champion
ing
Tomorrow’s
Banking
This year more than 50 delegates represented
the Bank at Sibos, SWIFT’s annual payments
conference and exhib
it
ion. Held in Beijing, our
programme was built around our ongoing theme
of Tomorrow’s Banking, with Group Chief Executive,
Bill Winters, opening the conference.
At the event, we agreed an MOU to facil
itate
cross-border trade in dig
ital currenc
ies with the
Bank of Communicat
ions, spoke on trend
ing topics
includ
ing the future of global trade, enhanc
ing
cross-border payments and AI’s role in fight
ing
financial cr
ime, and launched EmpowHer, a new
in
it
iat
ive w
ith senior female leaders in the industry.
Learn more
sc.com/sibos
47
Standard Chartered
– Annual Report 2024
Financ
ial rev
iew
48
Financ
ial summary
54
Underlying versus reported results reconcil
iat
ions
56
Alternative performance measures
Financ
ial rev
iew
48
Standard Chartered
– Annual Report 2024
Financ
ial rev
iew
Statement of results
2024
$mill
ion
2023
$mill
ion
Change¹
%
Underlying performance
Operating income
19,696
17,378
13
Operating expenses
(11,790)
(11,136)
(6)
Credit impa
irment
(557)
(528)
(5)
Other impa
irment
(588)
(130)
nm
Profit from associates and jo
int ventures
50
94
(47)
Profit before taxation
6,811
5,678
20
Profit attributable to ordinary shareholders²
4,276
3,581
19
Return on ordinary shareholders’ tangible equity (%)
11.7
10.1
160bps
Cost-to-income ratio (excluding bank levy) (%)
59.4
63.4
404bps
Reported performance
Operating income
19,543
18,019
8
Operating expenses
(12,502)
(11,551)
(8)
Credit impa
irment
(547)
(508)
(8)
Goodwill & other impa
irment
(588)
(1,008)
42
Profit from associates and jo
int ventures
108
141
(23)
Profit before taxation
6,014
5,093
18
Taxation
(1,972)
(1,631)
(21)
Profit for the period
4,042
3,462
17
Profit attributable to parent company shareholders
4,050
3,469
17
Profit attributable to ordinary shareholders
2
3,593
3,017
19
Return on ordinary shareholders’ tangible equity (%)
9.7
8.4
130bps
Cost-to-income ratio (%)
64.0
64.1
13bps
Net interest margin (%) (adjusted)
1.94
1.67
27bps
Balance sheet and capital
Total assets
849,688
822,844
3
Total equity
51,284
50,353
2
Average tangible equity attributable to ordinary shareholders
2
36,876
36,098
2
Loans and advances to customers
281,032
286,975
(2)
Customer accounts
464,489
469,418
(1)
Risk-weighted assets
247,065
244,151
1
Total capital
53,091
51,741
3
Total capital ratio (%)
21.5
21.2
30bps
Common Equity Tier 1
35,190
34,314
3
Common Equity Tier 1 ratio (%)
14.2
14.1
19bps
Advances-to-deposits ratio (%)³
53.3
53.3
nm
Liqu
id
ity coverage ratio (%)
138
145
(670)bps
UK leverage ratio (%)
4.8
4.7
10bps
Cents
Cents
Change¹
Information per ordinary share
Earnings per share – underlying
4
168.1
128.9
39.2
– reported
4
141.3
108.6
32.7
Net asset value per share
5
1,781
1,629
152
Tangible net asset value per share
5
1,541
1,393
148
Number of ordinary shares at period end (mill
ions)
2,408
2,637
(9)
1
Variance is better/(worse) other than assets, liab
il
it
ies and r
isk-weighted assets. Change is percentage points difference between two points rather than
percentage change for total capital ratio (%), common equity tier 1 ratio (%), net interest margin (%), advances-to-deposits ratio (%), liqu
id
ity coverage ratio (%),
UK leverage ratio (%). Change is cents difference between two points rather than percentage change for earnings per share, net asset value per share and
tangible net asset value per share
2
Profit attributable to ordinary shareholders is after the deduction of div
idends payable to the holders of non-cumulat
ive redeemable preference shares and
Addit
ional T
ier 1 securit
ies class
if
ied as equ
ity
3
When calculating this ratio, total loans and advances to customers excludes reverse repurchase agreements and other sim
ilar secured lend
ing, excludes
approved balances held with central banks, confirmed as repayable at the point of stress and includes loans and advances to customers held at fair value
through profit and loss. Total customer accounts include customer accounts held at fair value through profit or loss
4
Represents the underlying or reported earnings div
ided by the bas
ic weighted average number of shares
5
Calculated on period end net asset value, tangible net asset value and number of shares
Financ
ial summary
49
Standard Chartered
– Annual Report 2024
Financ
ial rev
iew
Operating income by product
2024
$mill
ion
2023
$mill
ion
Change
%
Constant
currency
change¹
%
Transaction Services
6,484
6,518
(1)
–
Payments and Liqu
id
ity
4,605
4,645
(1)
(1)
Securit
ies & Pr
ime Services
611
550
11
12
Trade & Working Capital
1,268
1,323
(4)
(2)
Global Banking
1,935
1,705
13
15
Lending & Financ
ial Solut
ions
1,677
1,500
12
13
Capital Markets & Advisory
258
205
26
27
Global Markets
3,450
3,049
13
15
Macro Trading
2,852
2,620
9
10
Credit Trading
644
451
43
47
Valuation & Other Adj
(46)
(22)
(109)
(130)
Wealth Solutions
2,490
1,944
28
29
Investment Products
1,827
1,357
35
36
Bancassurance
663
587
13
14
CCPL & Other Unsecured Lending
1,201
1,161
3
5
Deposits
3,746
3,570
5
5
Mortgages & Other Secured Lending
395
400
(1)
3
Treasury
(23)
(902)
97
97
Other
18
(67)
127
142
Total underlying operating income
19,696
17,378
13
14
1
Comparisons presented on the basis of the current period’s transactional currency rate, ensuring like-for-like currency rates between the two periods
The operating income by product commentary that follows
is on an underlying basis and comparisons are made to the
equivalent period in 2023 on a constant currency basis, unless
otherwise stated.
Transaction Services
income was broadly flat. Securit
ies &
Prime Services income was up 12 per cent primar
ily due to
higher custody, funds and prime brokerage fees. Trade &
Working Capital decreased by 2 per cent and Payments
and Liqu
id
ity decreased by 1 per cent mainly attributed
to margin compression, albeit passthrough rates were
actively managed.
Global Banking
income increased 15 per cent as Lending &
Financ
ial Solut
ions grew 13 per cent from strong pipel
ine
execution which led to higher orig
inat
ion volumes. Capital
Market & Advisory income was up 27 per cent driven mostly
by higher bond issuances.
Global Markets
income increased 15 per cent with double-
dig
it growth
in both flow and episod
ic
income. Flow income
grew 12 per cent mostly from increased income from Financ
ial
Institut
ions cl
ients and increased FX volumes, and episod
ic
income grew 18 per cent from higher FX and Rates income.
Wealth Solutions
income was up 29 per cent, driven by a
36 per cent increase in Investment Products income, with
broad based growth across markets and products. This was
driven by continued momentum in affluent new-to-bank
onboarding, with 265,000 clients onboarded in 2024, and
$44 bill
ion of net new money, up 61 per cent year-on-year
driven by strong internat
ional flows.
CCPL & Other Unsecured Lending
income was up 5 per cent
with volume and margin growth in both Personal Loans and
Credit Cards.
Deposits
income increased 5 per cent mainly from growth in
WRB CASA and Time Deposit volumes.
Mortgages & Other Secured Lending
income was up
3 per cent from higher margins as the cost of funding reduced,
particularly with lower HIBOR rates, albeit partly offset by
lower mortgage volumes.
Treasury
loss decreased by $879 mill
ion largely dr
iven
by benefits from the roll-off of the short-term hedge of
$455 mill
ion, $156 m
ill
ion translat
ion gains on the revaluation
of FX posit
ions
in Egypt, and repric
ing of treasury assets.
Other
income of $18 mill
ion
includes $139 mill
ion related to
hyperinflat
ionary account
ing adjustments in Ghana partly
offset by higher funding costs of non-financ
ial assets.
Profit before tax by client segment
2024
$mill
ion
2023
$mill
ion
Change
%
Constant
currency
change¹
%
Corporate & Investment Banking
5,581
5,436
3
4
Wealth & Retail Banking
2,463
2,487
(1)
(1)
Ventures
(390)
(408)
4
4
Central & other items
(843)
(1,837)
54
54
Underlying profit before taxation
6,811
5,678
20
21
1
Comparisons presented on the basis of the current period’s transactional currency rate, ensuring like-for-like currency rates between the two periods
50
Standard Chartered
– Annual Report 2024
Financ
ial rev
iew
The client segment and geographic region commentary that
follows is on an underlying basis and comparisons are made
to the equivalent period in 2023 on a constant currency basis,
unless otherwise stated.
Corporate & Investment Banking (CIB)
profit before
taxation increased 4 per cent. Income grew 6 per cent with
strong performance in Global Markets with double-dig
it
growth in both flow and episod
ic
income and strong
performance in Global Banking from higher orig
inat
ion
volumes. Expenses were 9 per cent higher, mainly from
investments, performance-related pay increases and inflat
ion,
while credit impa
irment was a net release of $106 m
ill
ion.
Other impa
irment of $310 m
ill
ion pr
imar
ily related to the
write-off of software assets.
Wealth & Retail Banking (WRB)
profit before taxation was
down 1 per cent. Income grew by 11 per cent, driven by a record
performance in Wealth Solutions with broad-based growth
across products and markets as well as a 14 per cent growth
in Bancassurance income. Expenses increased 9 per cent,
mainly from increased investment spend and inflat
ion.
Credit impa
irment charge of $644 m
ill
ion was up $290 m
ill
ion,
mainly from the higher interest rate environment impact
ing
repayments on credit cards and personal loans, and the
growth and maturation of the dig
ital partnersh
ip portfolios
in China and Indonesia. Other impa
irment charge pr
imar
ily
related to the write-off of software assets.
Ventures
loss before tax decreased $18 mill
ion to $390 m
ill
ion,
with income up 16 per cent to $183 mill
ion, dr
iven by a
60 per cent increase in income from the two dig
ital banks
to $142 mill
ion. Expenses grew by 8 per cent, reflect
ing the
Group’s continued investment in transformational dig
ital
in
it
iat
ives, wh
ile the $74 mill
ion
impa
irment charge was down
$11 mill
ion year-on-year as del
inquency rates have improved
in Mox.
Central & other items (C&O)
recorded a loss before tax of
$843 mill
ion wh
ich was 54 per cent lower than the prior year.
Treasury losses of $24 mill
ion decreased by $908 m
ill
ion,
largely driven by benefits from the roll-off of the short-term
hedge and repric
ing of assets, and $156 m
ill
ion translat
ion
gains on the revaluation of FX posit
ions
in Egypt. Other
products loss of $97 mill
ion decreased by $73 m
ill
ion mostly
driven by a $139 mill
ion ga
in relating to a hyperinflat
ionary
accounting adjustment in Ghana. Expenses, which include
UK bank levy, central corporate costs and recharges,
decreased by $115 mill
ion wh
ile there was a credit
impa
irment release of $55 m
ill
ion mostly from sovere
ign-
related portfolio movements.
Adjusted net interest income and margin
2024
$mill
ion
2023
$mill
ion
Change¹
%
Adjusted net interest income
2
10,462
9,547
10
Average interest-earning assets
539,338
572,520
(6)
Average interest-bearing liab
il
it
ies
539,787
540,350
–
Gross yield (%)
3
5.17
4.76
41
Rate paid (%)
3
3.22
3.27
(5)
Net yield (%)
3
1.95
1.49
46
Net interest margin (%)
3,4
1.94
1.67
27
1
Variance is better/(worse) other than assets and liab
il
it
ies wh
ich is increase/(decrease)
2
Adjusted net interest income is reported net interest income less funding costs for the trading book, cash collateral and prime services
3
Change is the basis points (bps) difference between the two periods rather than the percentage change
4 Adjusted net interest income div
ided by average
interest-earning assets, annualised
Adjusted net interest income increased 10 per cent driven
by an increase in the net interest margin, which averaged
194 basis points in the year, a 27 basis points year-on-year
uplift, benefitt
ing from the roll-off of the short-term hedges
as well as improved asset mix from a reduction in treasury
assets to fund the trading book. This was partly offset by
lower average interest earning asset volumes, reflecting the
reduction in Treasury assets, and the impact of elevated
pass-through rates on deposit pric
ing w
ith
in CIB.
•
Average interest-earning assets were down by $33 bill
ion
primar
ily due to a reduct
ion in Treasury assets following on
from an increase in demand for funding of trading book
assets, the impact of FX translation and a decrease in
underlying average loans and advances to customers
driven by a decline in mortgages. Gross yields increased
41 basis points compared with the prior year due to the
impact of higher average interest rates and an improved
balance sheet mix
•
Average interest-bearing liab
il
it
ies were broadly stable
year-on-year as growth in WRB customer accounts was
offset by the impact of FX translation and managed
outflow of more expensive CIB and Treasury balances.
The rate paid on liab
il
it
ies decreased 5 bas
is points in spite
of higher average interest rates and elevated passthrough
rates on CIB deposits reflecting the impacts of the increased
trading book funding cost adjustment, deposit insurance
reclassif
icat
ion and roll-off of the loss-making short-term
hedges as well as improved mix with strong growth in
WRB deposits
51
Standard Chartered
– Annual Report 2024
Financ
ial rev
iew
Credit risk summary
Income Statement (Underlying view)
2024
$mill
ion
2023
$mill
ion
Change
1
%
Total credit impa
irment charge/(release)
2
557
528
5
Of which stage 1 and 2
2
371
138
169
Of which stage 3
2
186
390
(52)
1
Variance is increase/(decrease) comparing current reporting period to prior reporting period
2
Refer to Credit Impairment charge table in Risk review section (page 226) for reconcil
iat
ion from underlying to reported credit impa
irment
Balance sheet
2024
$mill
ion
2023
$mill
ion
Change
1
%
Gross loans and advances to customers
2
285,936
292,145
(2)
Of which stage 1
269,102
273,692
(2)
Of which stage 2
10,631
11,225
(5)
Of which stage 3
6,203
7,228
(14)
Expected credit loss provis
ions
(4,904)
(5,170)
(5)
Of which stage 1
(483)
(430)
12
Of which stage 2
(473)
(420)
13
Of which stage 3
(3,948)
(4,320)
(9)
Net loans and advances to customers
281,032
286,975
(2)
Of which stage 1
268,619
273,262
(2)
Of which stage 2
10,158
10,805
(6)
Of which stage 3
2,255
2,908
(22)
Cover ratio of stage 3 before/after collateral (%)
3
64/78
60/76
4/2
Credit grade 12 accounts ($mill
ion)
969
2,155
(55)
Early alerts ($mill
ion)
5,559
5,512
1
Investment grade corporate exposures (%)
3
74
73
1
Aggregate top 20 corporate exposures as a percentage of Tier 1 capital
3,4
61
62
(1)
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 $9,660 mill
ion at 31 December 2024 and $13,996 m
ill
ion at
31 December 2023
3
Change is the percentage points difference between the two points rather than the percentage change
4 Excludes repurchase and reverse repurchase agreements
Asset quality remained resil
ient
in 2024, with an improvement
in a number of underlying credit metrics. The Group
continues to be vig
ilant
in managing persistent and evolving
geopolit
ical and macroeconom
ic risks, which have led to
id
iosyncrat
ic stress in a select number of geographies and
industry sectors.
Credit impa
irment charge of $557 m
ill
ion charge was up
5 per cent year-on-year, representing a loan loss rate of
19 basis points. WRB charges of $644 mill
ion were up
$290 mill
ion ma
inly from the higher interest rate environment
impact
ing repayments on cred
it cards and personal loans,
and the growth and maturation of the dig
ital partnersh
ip
portfolios in China and Indonesia. The $74 mill
ion charge
in
Ventures was down $11 mill
ion year-on-year, as del
inquency
rates have improved in Mox. There was net recovery in CIB
of $106 mill
ion, benefitting from releases and repayments.
The Group retains a China commercial real estate (CRE)
management overlay of $70 mill
ion and a $58 m
ill
ion overlay
for clients who have exposure to the Hong Kong CRE sector.
Gross stage 3 loans and advances to customers of $6.2 bill
ion
were 14 per cent lower year-on-year as repayments, client
upgrades and write-offs more than offset new inflows.
Credit-impa
ired loans represented 2.2 per cent of gross loans
and advances, down from 2.5 per cent in the prior year.
The stage 3 cover ratio before collateral of 64 per cent
increased by 4 percentage points, while the cover ratio post
collateral at 78 per cent increased 2 percentage points, both
due to a reduction in gross stage 3 balances.
Credit grade 12 balances decreased by $1.2 bill
ion to $1.0 b
ill
ion
primar
ily from the reversal of an ex
ist
ing $1 b
ill
ion sovere
ign
related exposure from reverse repurchase agreements to
investment securit
ies. Early alert accounts of $5.6 b
ill
ion
remained broadly stable year-on-year.
The proportion of investment grade corporate exposures of
74 per cent was broadly stable year-on-year.
52
Standard Chartered
– Annual Report 2024
Financ
ial rev
iew
Restructuring, goodwill impa
irment and other
items
2024
2023
Restructuring³
$mill
ion
Goodwill
and other
impa
irment
$mill
ion
DVA
$mill
ion
Net loss on
businesses
disposed
off/held
for sale¹
$mill
ion
Other
items²
$mill
ion
Restructuring
$mill
ion
Goodwill
and other
impa
irment⁴
$mill
ion
DVA
$mill
ion
Net gain
on
businesses
disposed
off/ held
for sale
$mill
ion
Other
items
$mill
ion
Operating income
103
–
(24)
(232)
–
362
–
17
262
–
Operating expenses
(612)
–
–
–
(100)
(415)
–
–
–
–
Credit impa
irment
10
–
–
–
–
20
–
–
–
–
Other impa
irment
–
–
–
–
–
(28)
(850)
–
–
–
Profit from associates
and joint ventures
58
–
–
–
–
47
–
–
–
–
Profit/(loss) before
taxation
(441)
–
(24)
(232)
(100)
(14)
(850)
17
262
–
1
Net loss on businesses disposed off/ held for sale 2024 includes $172 mill
ion pr
imar
ily relat
ing to recycling of FX translation losses from reserves into P&L on the sale
of Zimbabwe, $26 mill
ion loss on sale of Angola, $19 m
ill
ion loss on S
ierra Leone Partial exit and $15 mill
ion loss on the Av
iat
ion bus
iness disposal
2
Other items 2024 include $100 mill
ion charge relat
ing to Korea equity linked securit
ies (ELS) portfol
io
3
Restructuring operating expenses 2024 includes $156m of Fit For Growth (FFG) costs that are primar
ily severance costs, costs of staff work
ing on FFG in
it
iat
ives and
legal and professional fees
4
Goodwill and other impa
irment
include $850 mill
ion
impa
irment charge relat
ing to the Group’s investment in its associate China Bohai Bank (Bohai)
The Group’s statutory performance is adjusted for profits or
losses of a capital nature, amounts consequent to investment
transactions driven by strategic intent, other infrequent and/
or exceptional transactions that are sign
ificant or mater
ial in
the context of the Group’s normal business earnings for the
period and items which management and investors would
ordinar
ily
ident
ify separately when assess
ing underlying
performance period-by-period.
Restructuring charges of $441 mill
ion, reflect the
impact of
actions to transform the organisat
ion to
improve productiv
ity,
primar
ily add
it
ional redundancy charges, s
impl
ify
ing
technology platforms and optim
is
ing the Group’s office space
and property footprint, of which $156 mill
ion relates to the
Fit for Growth programme. This was partly offset by profits
on the remain
ing Pr
inc
ipal F
inance portfolio.
Net loss on businesses disposed of/held for sale of $232 mill
ion
includes losses related to the sale of Zimbabwe of $172 mill
ion,
Angola of $26 mill
ion and S
ierra Leone of $19 mill
ion, all
primar
ily from the recycl
ing of FX translation losses from
reserves into the income statement, with no impact on
tangible equity or capital, and $15 mill
ion loss on the sale of
the Aviat
ion bus
iness.
Other items of $100 mill
ion relate to a charge booked for
partic
ipat
ion in a compensation scheme recommended by
the Korean Financ
ial Superv
isory Service.
Movements in the Debit Valuation Adjustment (DVA) were a
negative $24 mill
ion dr
iven by the tighten
ing of the Group’s
asset swap spreads.
Balance sheet and liqu
id
ity
2024
$mill
ion
2023
$mill
ion
Increase/
(decrease)
$mill
ion
Increase/
(decrease)
%
Assets
Loans and advances to banks
43,593
44,977
(1,384)
(3)
Loans and advances to customers
281,032
286,975
(5,943)
(2)
Other assets
525,063
490,892
34,171
7
Total assets
849,688
822,844
26,844
3
Liab
il
it
ies
Deposits by banks
25,400
28,030
(2,630)
(9)
Customer accounts
464,489
469,418
(4,929)
(1)
Other liab
il
it
ies
308,515
275,043
33,472
12
Total liab
il
it
ies
798,404
772,491
25,913
3
Equity
51,284
50,353
931
2
Total equity and liab
il
it
ies
849,688
822,844
26,844
3
Advances-to-deposits ratio (%)
1
53.3
53.3
Liqu
id
ity coverage ratio (%)
138
145
1
Variance is increase/(decrease) comparing current reporting period to prior reporting periods
2
The Group excludes $19,187 mill
ion held w
ith central banks (31 December 2023: $20,710 mill
ion) that has been confirmed as repayable at the po
int of stress.
Advances exclude repurchase agreement and other sim
ilar secured lend
ing of $9,660 mill
ion (31 December 2023: $13,996 m
ill
ion) and
include loans and advances
to customers held at fair value through profit or loss of $7,084 mill
ion (31 December 2023: $7,212 m
ill
ion). Depos
its include customer accounts held at fair value
through profit or loss of $21,772 mill
ion (31 December 2023: $17,248 m
ill
ion)
53
Standard Chartered
– Annual Report 2024
Financ
ial rev
iew
The Group’s balance sheet remains strong, liqu
id and well
divers
ified:
•
Loans and advances (L&A) to customers decreased
2 per cent, or $6 bill
ion, to $281 b
ill
ion as at 31 December
2024. This was driven by a $9 bill
ion decrease from Treasury
and securit
ies-based lend
ing and a $8 bill
ion decrease
from currency translation. Excluding these items L&A was
up a net $12 bill
ion on an underly
ing basis, mainly from the
execution of pipel
ine deals
in Global Banking, partly offset
by a decline in mortgages
•
Customer accounts decreased 1 per cent, or $5 bill
ion, to
$464 bill
ion. Exclud
ing the $9 bill
ion
impact of currency
translation, customer accounts grew 1 per cent. This was
primar
ily dr
iven by an increase of $16 bill
ion
in WRB Time
Deposits and $7 bill
ion
in WRB CASA partly offset by a
$5 bill
ion decrease
in Transaction Services from CASA
outflows and a $12 bill
ion decrease
in Corporate Term
Deposits from treasury management activ
it
ies
•
Other assets increased 7 per cent, or $34 bill
ion, from
31 December 2023 with a $31 bill
ion
increase in derivat
ive
balances and $30 bill
ion
increase in financ
ial assets held
at fair value through profit or loss, primar
ily
in reverse
repurchase agreements and debt securit
ies and other
elig
ible b
ills. This was partly offset by a decrease in cash
and balances at central banks of $6 bill
ion, a $17 b
ill
ion
reduction in investment securit
ies and $4 b
ill
ion reduct
ion
in other financ
ial assets held at amort
ised cost
•
Other liab
il
it
ies
increased 12 per cent, or $33 bill
ion, from
31 December 2023 with a $26 bill
ion
increase in derivat
ive
balances and a $5 bill
ion
increase in other financ
ial l
iab
il
it
ies
held at amortised cost
The advances-to-deposits ratio was flat year-on-year at
53.3 per cent. The point-in-time LCR of 138 per cent decreased
7 percentage points year-on-year and 5 percentage points
quarter-on-quarter due to ongoing treasury liab
il
ity
optim
isat
ion, LCR normalisat
ion from surplus levels and
some seasonal CASA outflows. It remains well above the
min
imum regulatory requ
irement of 100 per cent.
Risk-weighted assets
2024
$mill
ion
2023
$mill
ion
Change
1
$mill
ion
Change
1
%
By risk type
Credit risk
189,303
191,423
(2,120)
(1)
Operational risk
29,479
27,861
1,618
6
Market risk
28,283
24,867
3,416
14
Total RWAs
247,065
244,151
2,914
1
1
Variance is increase/(decrease) comparing current reporting period to prior reporting periods
Total risk-weighted assets (RWA) of $247.1 bill
ion
increased
$2.9 bill
ion or 1 per cent
in comparison to 31 December 2023:
•
Credit risk RWA decreased by $2.1 bill
ion to $189.3 b
ill
ion.
This was mainly driven by decreases of $3.2 bill
ion reflect
ing
improved asset quality, $2.6 bill
ion from opt
im
isat
ion actions
and $4.9 bill
ion from fore
ign currency translation, partly offset
by a $5.0 bill
ion
increase from changes in asset growth and
mix, and $3.1 bill
ion
increase from derivat
ives
•
Operational Risk RWA increased by $1.6 bill
ion to $29.5 b
ill
ion
mainly due to a marginal increase in average income as
measured over a rolling three-year time horizon for certain
products
•
Market risk RWA increased by $3.4 bill
ion to $28.3 b
ill
ion
as RWA were deployed to help clients capture market
opportunit
ies
Capital base and ratios
2024
$mill
ion
2023
$mill
ion
Change
1
$mill
ion
Change
1
%
CET1 capital
35,190
34,314
876
3
Addit
ional T
ier 1 capital (AT1)
6,482
5,492
990
18
Tier 1 capital
41,672
39,806
1,866
5
Tier 2 capital
11,419
11,935
(516)
(4)
Total capital
53,091
51,741
1,350
3
CET1 capital ratio (%)
2
14.2
14.1
19bps
Total capital ratio (%)
2
21.5
21.2
30bps
Leverage ratio (%)
2
4.8
4.7
10bps
1
Variance is increase/(decrease) comparing current reporting period to prior reporting periods
2
Change is percentage points difference between two points rather than percentage change
The Group’s CET1 ratio of 14.2 per cent was 19 basis points
higher year-on-year and is 3.8 percentage points above the
Group’s latest regulatory min
imum of 10.5 per cent. Underly
ing
profit accretion enabled funding of shareholder distr
ibut
ions.
There was 167 basis points of CET1 accretion from underlying
profits, and a further 61 basis points uplift primar
ily from fa
ir
value gains on other comprehensive income, FX , software
intang
ibles and regulatory cap
ital adjustments. This was
partly offset by 50 basis points from an increase in RWAs.
The Group completed a $1 bill
ion share buyback programme
on 25 June 2024, and as of 31 December 2024 the $1.5 bill
ion
share buyback programme announced on 30 July 2024 was
nearly complete, having spent $1,354 mill
ion purchas
ing
126.3 mill
ion ord
inary shares. Even though the share buyback
completed on 30 January 2025, the entire $1.5 bill
ion
is
deducted from CET1 in the reporting period. The 2024 share
buybacks reduced the CET1 ratio by 102 basis points.
The Board has recommended a final div
idend of 28 cents
per share or $679 mill
ion result
ing in a total 2024 ordinary
div
idend of 37 cents a share or $909 m
ill
ion. Th
is, combined
with the payments due to AT1 and preference shareholders
cost approximately 57 basis points.
The Board has announced a share buyback for up to a
maximum considerat
ion of $1.5 b
ill
ion to further reduce
the number of ordinary shares in issue by cancelling the
repurchased shares. The terms of the buyback will be
published, and the programme will start shortly and is
expected to reduce the Group’s CET1 ratio in the first quarter
of 2025 by 61 basis points.
The Group’s UK leverage ratio of 4.8 per cent remains
sign
ificantly above
its min
imum requ
irement of 3.7 per cent.
54
Standard Chartered
– Annual Report 2024
Underlying versus reported results
Financ
ial rev
iew
Operating income by client segment
Reconcil
iat
ion of underlying versus reported operating income by client segment set out in Note 2, Segmental informat
ion,
on page 299.
Net interest income and non NII
2024
2023
Underlying
$mill
ion
Restructuring
$mill
ion
Adjustment
for Trading
book funding
cost and
Others
$mill
ion
Reported
$mill
ion
Underlying
$mill
ion
Restructuring
$mill
ion
Adjustment
for Trading
book funding
cost and
Others
$mill
ion
Reported
$mill
ion
Net interest income
10,446
16
(4,096)
6,366
9,557
(10)
(1,778)
7,769
Non NII
9,250
(169)
4,096
13,177
7,821
651
1,778
10,250
Total income
19,696
(153)
–
19,543
17,378
641
–
18,019
Profit before taxation (PBT)
Reconcil
iat
ion of underlying versus reported Profit/(loss) before taxation is set out in Note 2, Segmental informat
ion, on
page 298.
Profit before taxation (PBT) by client segment
Reconcil
iat
ion of underlying versus reported Profit/(loss) before taxation by client segment is set out in Note 2, Segmental
informat
ion, on page 299.
Return on tangible equity (RoTE)
2024
$mill
ion
2023
$mill
ion
Average parent company shareholders’ equity
44,478
43,549
Less: Preference share premium
(1,494)
(1,494)
Less: Average intang
ible assets
(6,108)
(5,957)
Average ordinary shareholders’ tangible equity
36,876
36,098
Profit for the period attributable to equity holders
4,042
3,462
Non-controlling interests
8
7
Div
idend payable on preference shares and AT1 class
if
ied as equ
ity
(457)
(452)
Profit for the period attributable to ordinary shareholders
3,593
3,017
Items normalised:
Restructuring
441
14
Goodwill & other impa
irment
1
–
850
Net losses/(gains) on sale of businesses
232
(262)
Ventures FVOCI unrealised gains net of tax
39
69
DVA
24
(17)
Other items
2
100
–
Tax on normalised items
(114)
(21)
Underlying profit for the period attributable to ordinary shareholders
4,315
3,650
Underlying return on tangible equity (%)
11.7
10.1
Reported return on tangible equity (%)
9.7
8.4
1
Goodwill and other impa
irment
include $850 mill
ion
impa
irment charge relat
ing to the Group’s investment in its associate China Bohai Bank (Bohai)
2
Other items 2024 include $100 mill
ion charge relat
ing to Korea equity linked securit
ies (ELS) portfol
io
Underlying versus reported
results reconcil
iat
ions
Reconcil
iat
ions between underlying and reported results are set out in the tables below:
55
Standard Chartered
– Annual Report 2024
Financ
ial rev
iew
2024
2023
Corporate &
Investment
Banking
%
Wealth &
Retail
Banking
%
Ventures
%
Central &
other
items
%
Total
%
Corporate &
Investment
Banking
%
Wealth &
Retail
Banking
%
Ventures
%
Central &
other
items
%
Total
%
Underlying RoTE
19.0
24.4
nm
(20.9)
11.7
19.5
25.3
nm
(27.0)
10.1
Restructuring
Of which: Income
0.3
0.3
–
0.2
0.3
1.4
0.6
–
0.3
1.0
Of which: Expenses
(1.0)
(2.5)
nm
(2.1)
(1.7)
(1.3)
(1.4)
nm
(0.6)
(1.1)
Of which: Credit
impa
irment
–
–
–
–
–
0.1
–
–
0.1
0.1
Of which: Other
impa
irment
–
–
–
(0.1)
–
(0.1)
–
–
(0.2)
(0.1)
Of which: Profit from
associates and
joint ventures
–
–
–
0.8
0.2
–
–
–
0.6
0.1
Net gain/(loss) on
businesses disposed/
held for sale
–
–
–
(3.3)
(0.6)
1.3
–
–
–
0.7
Goodwill and other
impa
irment¹
–
–
–
–
–
–
–
–
(11.1)
(2.3)
Ventures FVOCI unrealised
gains/(losses) net of taxes
–
–
nm
–
(0.1)
–
–
nm
–
(0.2)
DVA
(0.1)
–
–
–
(0.1)
0.1
–
nm
–
–
Other items
–
(1.3)
–
–
(0.3)
–
–
nm
–
–
Tax on normalised items
0.2
0.8
nm
(0.1)
0.3
(0.4)
0.2
nm
1.1
0.1
Reported RoTE
18.4
21.7
nm
(25.5)
9.7
20.6
24.7
nm
(36.8)
8.4
1
Goodwill and other impa
irment
include $850 mill
ion
impa
irment charge relat
ing to the Group’s investment in its associate China Bohai Bank (Bohai)
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
22
314,092
(0.01)
42
320,649
(0.01)
Stage 2
(368)
10,176
3.62
(262)
11,674
2.24
Stage 3
(244)
2,550
9.57
(386)
3,117
12.38
Total exposure
(590)
326,818
0.18
(606)
335,440
0.18
Earnings per ordinary share (EPS)
2024
Underlying
$mill
ion
Restructuring
$mill
ion
Other items
2
$mill
ion
Net gain
on sale of
businesses
$mill
ion
Goodwill &
other
impa
irment¹
$mill
ion
DVA
$mill
ion
Tax on
normalised
items
$mill
ion
Reported
$mill
ion
Profit/(loss) for the year attributable to
ordinary shareholders
4,276
(441)
(100)
(232)
–
(24)
114
3,593
Basic – Weighted average number of
shares (mill
ions)
2,543
2,543
Basic earnings per ordinary share (cents)
168.1
141.3
2023
Profit/(loss) for the year attributable to
ordinary shareholders
3,581
(14)
–
262
(850)
17
21
3,017
Basic – Weighted average number of
shares (mill
ions)
2,778
2,778
Basic earnings per ordinary share (cents)
128.9
108.6
1
Goodwill and other impa
irment
include $850 mill
ion
impa
irment charge relat
ing to the Group’s investment in its associate China Bohai Bank (Bohai)
2
Other items 2024 include $100 mill
ion charge relat
ing to Korea equity linked securit
ies (ELS) portfol
io
56
Standard Chartered
– Annual Report 2024
Alternative performance measures
Financ
ial rev
iew
An alternative performance measure is a financ
ial measure
of histor
ical or future financial performance, financial pos
it
ion,
or cash flows, other than a financial measure defined or
specif
ied
in the applicable financ
ial report
ing framework.
The following are key alternative performance measures
used by the Group to assess financial performance and
financial pos
it
ion.
Advances-to-deposits/customer advances-to-deposits
(ADR) ratio:
The ratio of total loans and advances to
customers relative to total customer accounts, excluding
approved balances held with central banks, confirmed as
repayable at the point of stress. A low advances-to-deposits
ratio demonstrates that customer accounts exceed customer
loans resulting from emphasis placed on generating a high
level of stable funding from customers.
Average interest earning balance:
Daily average of the
interest earning assets and interest bearing liab
il
it
ies balances
excluding the daily average cash collateral balances in other
assets and other liab
il
it
ies that are related to the Global
Markets trading book.
Constant currency basis:
A performance measure on a
constant currency basis is presented such that comparative
periods are adjusted for the current year’s functional currency
rate. The following balances are presented on a constant
currency basis when described as such: 1. Operating income,
2. Operating expenses, 3. Profit before tax and 4. RWAs or
risk-weighted assets.
Cost-to-income ratio (CIR):
The proportion of total operating
expenses to total operating income.
Cover ratio:
The ratio of impa
irment prov
is
ions for each stage
to the gross loan exposure for each stage.
Cover ratio after collateral/cover ratio includ
ing collateral:
The ratio of impa
irment prov
is
ions for stage 3 loans and
realisable value of collateral held against these non-
performing loan exposures to the gross loan exposure of
stage 3 loans.
Gross yield:
Reported interest income div
ided by average
interest earning assets.
Income return on risk weighted assets (IRoRWA):
Annualised
Income excluding Debit Valuation Adjustment as a
percentage of Average RWA.
Jaws:
The difference between the rates of change in revenue
and operating expenses. Posit
ive jaws occurs when the
percentage change in revenue is higher than, or less negative
than, the corresponding rate for operating expenses.
Loan loss rate:
Credit Impairment Profit & Loss on Loans &
Advances to Banks & Customers over Gross Average Loans and
Advances to Banks and Customers excluding FVTPL loans.
Net charge-off ratio:
The ratio of net credit impa
irment
charge or release to average outstanding net loans and
advances.
Net tangible asset value per share:
Ratio of net tangible
assets (total tangible assets less total liab
il
it
ies) to the
number of ordinary shares outstanding at the end of a
reporting period.
Net yield:
Gross yield on average assets less rate paid on
average liab
il
it
ies.
NIM or Net Interest Margin:
Reported net interest income
adjusted for trading book funding cost, cash collateral and
prime services on interest earning assets, div
ided by average
interest-earning assets excluding financ
ial assets measured
at fair value through profit or loss.
Non NII:
Reported non NII is a sum of net fees and commiss
ion,
net trading income and other operating income
Rate paid:
Reported interest expense adjusted for interest
expense incurred on amortised cost liab
il
it
ies used to fund
financial
instruments held at fair value through profit or loss,
div
ided by average
interest bearing liab
il
it
ies
RoE or Return on Equity:
The ratio of the current year’s profit
available for distr
ibut
ion to ordinary shareholders plus fair
value movements through other comprehensive income
relating to the Ventures segment to the weighted average
ordinary shareholders’ equity for the reporting period.
RoTE or Return on Ordinary Shareholders’ Tangible Equity:
The ratio of the current year’s profit available for distr
ibut
ion
to ordinary shareholders to the average tangible equity, being
ordinary shareholders’ equity less the average intang
ible
assets for the reporting period. Where a target RoTE is stated,
this is based on profit and equity expectations for future periods.
TSR or Total Shareholder Return:
The total return of the
Group’s equity (share price growth and div
idends) to
investors.
Underlying net interest income:
Reported net interest income
normalised to an underlying basis adjusted for trading book
funding cost, cash collateral and prime services.
Underlying/normalised:
A performance measure is described
as underlying/normalised if the statutory result has been
adjusted for restructuring and other items representing profits
or losses of a capital nature; DVA; amounts consequent to
investment transactions driven by strategic intent, excluding
amounts consequent to Ventures transactions, as these are
considered part of the Group’s ordinary course of business;
and other infrequent and/or exceptional transactions that
are sign
ificant or mater
ial in the context of the Group’s
normal business earnings for the period, and items which
management and investors would ordinar
ily
ident
ify
separately when assessing performance period-by-period.
Restructuring includes impacts to profit or loss from businesses
that have been disclosed as no longer part of the Group’s
ongoing business, redundancy costs, costs of closure or
relocation of business locations, impa
irments of assets and
other costs which are not related to the Group’s ongoing
business. Restructuring in this context is not the same as a
restructuring provis
ion as defined
in IAS 37.
A reconcil
iat
ion between underlying/normalised and
statutory performance is contained in Note 2 to the financ
ial
statements. The following balances and measures are
presented on an underlying basis when described as such:
1. Operating income, 2. Operating expenses, 3. Profit before
tax and 4. Earnings per share (basic and diluted) 5. CIR 6. Jaws
and 7. RoTE.
Underlying non NII:
Reported non NII normalised to an
underlying basis adjusted for trading book funding cost and
financial guarantee Fees on
interest earning assets. In prior
periods Underlying Non NII was described as underlying
other income.
Underlying RoTE:
The ratio of the current year’s underlying
profit attributable to ordinary shareholders plus fair value
on OCI equity movement relating to Ventures segment
to the weighted average tangible equity, being ordinary
shareholders’ equity less the intang
ible assets for the
reporting period.
Alternative performance measures
Backing innovat
ive
carbon capture and
storage technology
We supported the UK’s East Coast Cluster, a UK
Government-backed in
it
iat
ive to promote
industr
ial
decarbonisat
ion and carbon capture and storage.
The project aims to capture up to 2 mill
ion tonnes
of CO
2
annually while provid
ing up to 742 megawatts
of dispatchable, low-carbon energy to the grid.
By helping to finance this project, we’re helping to
facil
itate the decarbon
isat
ion of hard-to-abate em
itters
in the region, in support of the UK’s net zero ambit
ions.
Learn more
sc.com/ecc
57
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Sustainab
il
ity Review
63
Our approach to sustainab
il
ity
69
Sustainable finance
74
Climate
90
Nature
91
Social impact
93
Managing Environmental and Social Risk
95
Integrity, conduct and ethics
98
Sustainab
il
ity governance
58
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Sustainab
il
ity review
The Sustainab
il
ity review provides informat
ion on the Group’s approach to susta
inab
il
ity, related
governance structures, how we manage environmental, social, and climate risk, and mobil
ise
sustainable finance to help clients transit
ion and support susta
inable, inclus
ive growth
in our markets.
Sustainab
il
ity review
58
Standard Chartered
– Annual Report 2024
Sustainab
il
ity is an area of strategic focus for Standard
Chartered which we aim to integrate across our business.
As a result, sustainab
il
ity informat
ion can be found
throughout this Annual Report and across the suite of
sustainab
il
ity-related reports on our website as set out
on this page.
This Sustainab
il
ity review is designed to address the topics
that could have a material (posit
ive or negat
ive) impact
on society, nature or the climate, and that are not addressed
elsewhere in the Annual Report. We describe how we have
determined these topics under the
Material
ity
heading on
page 60.
Content map of Annual Report sustainab
il
ity-related disclosures
Page
Strategic report
Who we are and what we do
02-03
Stakeholders
35-41
Non-financial and susta
inab
il
ity informat
ion statement
42
Taskforce on Climate-related Financ
ial D
isclosures (TCFD) reporting index
43-44
Sustainab
il
ity review
Chief Sustainab
il
ity Officer’s review
62
Our approach to sustainab
il
ity
63-68
Sustainable finance
69-73
Climate
74-89
Nature
90
Social impact
91-92
Environmental and Social Risk management
93-94
Integrity, conduct and ethics
95-97
Sustainab
il
ity-related governance
98-102
Directors’ report
Corporate governance
113-142
Board engagement with our stakeholders
121-122
Board Culture and Sustainab
il
ity Committee
134-136
Sustainab
il
ity in remuneration
150-153
Employee polic
ies and engagement
188-189
Health, safety and wellbeing
189-190
ESG disclosures
183
Streamlined Energy and Carbon Reporting (SECR) disclosure
183-184
Risk review and Capital review
Climate Risk
256-269
Supplementary informat
ion
Supplementary people informat
ion
388-392
Supplementary sustainab
il
ity informat
ion
393-395
59
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Our suite of sustainab
il
ity-related reports and disclosures
Report or disclosure
Descript
ion
Assurance and verif
icat
ion
reports
Independent assurance and verif
icat
ion reports by Ernst & Young LLP (EY), Global Documentation Ltd
and EcoAct over certain data points with
in th
is Annual Report as detailed on page 61
Code of Conduct and Ethics
Primary tool through which we communicate our conduct expectations. It is designed to guide
colleagues through how to live our valued behaviours on a day-to-day basis, whatever their business,
function, region, or role.
Country-by-Country
Disclosure
Provides tax informat
ion
in accordance with the Capital Requirements (Country-by-Country-Reporting)
Regulations 2013.
Divers
ity, Equal
ity and
Inclusion Impact Report
Includes gender and ethnic
ity pay gap assessment and the act
ions we have taken to support a culture
of inclus
ion.
Equator Princ
iples report
ing
As a member since 2003, we report on how we apply the princ
iples to ensure that the projects we
finance and advise on are developed in a manner that is socially responsible and reflect sound
environmental management practices.
Environmental and Social
Risk Management
Framework
Provides an overview of our approach to ident
ify
ing, assessing, and managing the environmental and
social risks associated with our client relationsh
ips.
ESG data pack
Supplementary Environmental, Social and Governance (ESG) and sustainab
il
ity data is provided in a
spreadsheet format.
ESG Reporting Index
Alignment table referencing our disclosures using voluntary sustainab
il
ity reporting frameworks:
Sustainab
il
ity Accounting Standards Board Standards, Global Reporting Init
iat
ive Standards and World
Economic Forum (WEF) Stakeholder Capital
ism Metr
ics.
Futuremakers Impact Report
Provides progress and outcomes about Futuremakers, our global youth economic empowerment
in
it
iat
ive, tackl
ing inequal
ity and promot
ing greater economic inclus
ion.
Modern Slavery Statement
Sets out the steps we have taken to assess and manage the risk of modern slavery and human
trafficking
in our operations and supply chain.
Net zero methodological
white paper – The journey
continues
Describes our approach to net zero, laying out the methodologies we have used to calculate our
financed and facil
itated em
iss
ions, and sett
ing our inter
im 2030 targets at sector level.
Net Zero Transit
ion Plan
Sets out how we aim to deliver on our commitments to reach net zero emiss
ions
in our financed
emiss
ions by 2050, and
in our Scope 1 and Scope 2 emiss
ions by 2025.
Polic
ies
We publish our main sustainab
il
ity-related polic
ies,
includ
ing on: ant
i-money laundering; anti-bribery
and corruption; dig
ital assets approach; d
ivers
ity and
inclus
ion; health, safety and secur
ity; privacy;
public policy engagement; and Speaking Up.
Posit
ion Statements and
Prohib
ited Act
iv
it
ies
We use our cross-sector and sector-specif
ic Pos
it
ion Statements and Proh
ib
ited Act
iv
it
ies list to assess
whether to provide financ
ial serv
ices to clients.
PRB reporting and self-
assessment
Our disclosures on actions undertaken related to the six princ
iples as defined by the Un
ited Nations
Princ
iples for Respons
ible Banking (PRB).
Supplier Charter
Sets out princ
iples for the behav
ioural standard that we expect from our suppliers, and those with
in a
supplier’s sphere of influence that assist them in performing their obligat
ions to us.
Sustainable Finance Impact
Report
We present the impact of our sustainable finance assets on a portfolio basis.
Sustainable Finance
Frameworks
Our Green and Sustainable Product Framework (GSPF) and Sustainab
il
ity Bond Framework (SBF) outline
our definit
ion of green and sustainable finance. Our Transit
ion F
inance Framework (TFF) sets out the
activ
it
ies and entit
ies that we cons
ider elig
ible for trans
it
ion finance.
To access the Group’s suite of sustainab
il
ity-related reports and disclosures vis
it
sc.com/sustainab
il
ityl
ibrary
Our approach to sustainab
il
ity reporting
The Group includes ESG and sustainab
il
ity informat
ion
in this
Annual Report, provid
ing
investors and stakeholders with an
understanding of the impl
icat
ions of relevant sustainab
il
ity-
related risks and opportunit
ies, and progress aga
inst our
objectives. We have cons
idered our ESG reporting obligat
ions
under the Hong Kong and FCA UK List
ing Rules, please refer
to our Directors’ report on page 103 for further informat
ion. For
our TCFD content table please refer to pages 43-44.
We have used the GRI Standards to guide our disclosures
and have published an ESG Reporting Index with reference
to disclosures captured in the GRI Universal and select Topic
Standards. We have also considered relevant metrics from
sector-specif
ic SASB Standards and WEF Stakeholder
Capital
ism Metr
ics.
Our approach to sustainab
il
ity reporting will continue to
evolve subject to regulatory and voluntary standards across
our list
ing locat
ions and footprint markets. Our disclosures are
guided by internat
ional standards, frameworks and pr
inc
iples
to the extent relevant to our business. We are actively
preparing for future reporting obligat
ions across the var
ious
jurisd
ict
ions
in which we operate, includ
ing report
ing under
the International Sustainab
il
ity Standards Board (ISSB)’s IFRS
S1 General Requirements of Sustainab
il
ity-related Financ
ial
Information (IFRS S1) and IFRS S2 Climate-related Disclosures
(IFRS S2) and the EU Corporate Sustainab
il
ity Reporting
Direct
ive (CSRD).
See our ESG Reporting Index at
sc.com/sustainab
il
ityl
ibrary
60
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Material
ity
In preparing these disclosures, we have followed the
material
ity assessment process outl
ined in GRI 3: Material
Topics 2021, which provides step-by-step guidance for
organisat
ions on how to determ
ine material topics.
Material topics are topics that represent an organisat
ion’s
most sign
ificant
impacts on the economy, environment
and people, includ
ing
impacts on their human rights –
both posit
ive and negat
ive.
In doing so, we have taken steps to understand the Group’s
context, ident
ify actual and potent
ial impacts, assess the
sign
ificance of the
impacts and prior
it
ise the most sign
ificant
impacts for reporting. We have done this by engaging with
relevant internal and external stakeholders and by validat
ing
the material topics with experts across the Chief Sustainab
il
ity
Office. Our material topics are set out in the table below.
Topics
Descript
ion
Learn more
Sustainable finance
How we ident
ify opportun
it
ies for dr
iv
ing pos
it
ive
environmental and social impact by helping
our clients address environmental and social
challenges, transit
ion towards low carbon
economies and achieve sustainable growth.
Sustainable finance
Pages 69-73
Climate
The posit
ive and negat
ive impacts of our financ
ing
activ
it
ies, direct operations and supply chain on the
climate. This includes our emiss
ions, phys
ical and
transit
ion cl
imate risk management, and progress
against our net zero roadmap.
Climate
Pages 74-89
Nature
The posit
ive and negat
ive nature-related impacts
of our financing act
iv
it
ies, direct operations, and
supply chain. This includes our approach and
progress against our nature-related ambit
ions.
Nature
Page 90
Human capital management
The practices used for recruit
ing, develop
ing and
optim
is
ing employee output and relationsh
ips,
across the value chain. This includes human rights
and modern slavery, health and safety (includ
ing
physical and mental wellbeing) and divers
ity, equ
ity
and inclus
ion.
Stakeholders
Pages 38-41
Supplementary people
informat
ion
Pages 388-392
Society and community relations
The posit
ive and negat
ive impacts of our financ
ing
activ
it
ies on the societ
ies and commun
it
ies
around us. This includes financ
ial
inclus
ion, job
creation, vulnerable customer protection, and
charitable giv
ing.
Social impact
Pages 91-92
Data security and privacy
The protection practices over client and personal
informat
ion held by the Group.
Risk review and Capital review
Page 204
Corporate governance
Governance structures and internal control
processes by which the Group is directed.
Includes risk management, business conduct,
anti-bribery and corruption, anti-money laundering,
and whistleblower protection.
Managing environmental
and social risk
Pages 93-94
Integrity, conduct and ethics
Pages 95-97
Sustainab
il
ity-related
governance
Pages 98-102
To learn more about our material
ity process and how we engage w
ith stakeholders vis
it
sc.com/sustainab
il
itystakeholders
61
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Reporting period
The reporting period for the major
ity of our operat
ional
environmental performance ind
icators,
includ
ing greenhouse
gas (GHG) emiss
ions, waste generat
ion and water
consumption is from 1 October 2023 to 30 September 2024.
This allows suffic
ient t
ime for independent third-party
assurance to be completed and for obtain
ing external th
ird
party data where needed prior to the publicat
ion of the
Group’s Annual Report.
This only differs for the following Scope 3 emiss
ions where a
period of 1 January to 31 December with a one to two-year lag
is used: Category 1: Purchased Goods (other); Category 2:
Capital goods; Category 4: Upstream transportation and
distr
ibut
ion; Category 6: Business travel (miscellaneous other
than air travel) and Category 15: Investments. Emiss
ions data
for these categories is disclosed on a one to two-year lag
with emiss
ions reported
in 2024 based on the availab
il
ity of
third-party data and client data.
This year, the reporting period for Category 6: Business
travel (air travel) has been adjusted from a 1 October 2023
to 30 September 2024 period, to a 1 January 2023 to
31 December 2023 period, to align these emiss
ions w
ith
those in Category 6: Business travel (miscellaneous other
than air travel).
With the exception of sustainable finance income, sustainable
finance metrics are reported at 30 September 2024, allowing
sufficient t
ime to complete reporting. Sustainable finance
income is reported for the full financ
ial per
iod from 1 January
2024 to 31 December 2024.
The reporting period for all other sustainab
il
ity informat
ion
in
this Annual Report is from 1 January 2024 to 31 December 2024
to align with the calendar year used in financ
ial report
ing.
Independent Lim
ited Assurance
Ernst & Young LLP (EY) was appointed to provide
independent lim
ited assurance over certa
in data points
with
in th
is Annual Report, ind
icated w
ith a caret symbol (^)
in this report. The assurance engagement was planned and
performed in accordance with the International Standard on
Assurance Engagements (UK) 3000 (July 2020), Assurance
Engagements Other Than Audits or Reviews of Histor
ical
Financ
ial Informat
ion (ISAE (UK) 3000 (July 2020)). This
independent assurance report is separate from EY’s audit
report on the financial statements and
is available at
sc.com/sustainab
il
ityl
ibrary
. This report includes further
detail on the scope, respective responsib
il
it
ies, work
performed, lim
itat
ions and conclusions.
We obtained independent lim
ited assurance on the Group’s
Scope 1 and 2 GHG emiss
ions and Scope 3 data centres GHG
emiss
ions by Global Documentat
ion Ltd. We also obtained
independent verif
icat
ion of the Group’s Scope 3 emiss
ions
associated with business travel (air travel) from EcoAct.
These verif
icat
ions were conducted in accordance with
the ISO 14064-3 Greenhouse gases standard and are also
available at
sc.com/sustainab
il
ityl
ibrary
.
For further details on assurance obtained on comparative
prior year data, please refer to the prior year annual report.
Read more about the princ
iples and methodology for measur
ing our
environment data at
sc.com/environmentcriter
ia
For further informat
ion on our em
iss
ions calculat
ion methodology,
please refer to the Group’s ‘Net zero methodological white paper –
The journey continues’ via
sc.com/sustainab
il
ityl
ibrary
Discla
imer
We report on ESG matters throughout this Annual
Report, in particular in the following sections:
(i)
Strategic report on
pages 35 to 44
;
(i
i)
Directors’ report on
pages 183 to 184
;
(i
i
i)
Sustainab
il
ity review on
pages 57 to 102
;
(iv)
Risk review and Capital review on
pages 256 to 269
; and
(v)
Supplementary sustainab
il
ity informat
ion on
pages 393
to 395
.
In this ‘Sustainab
il
ity review’ chapter, we set out our approach
and progress relating to sustainab
il
ity and its content is
subject to the statements included in (i) the ‘Forward-looking
statements’ section; and (i
i) the ‘Bas
is of preparation and
caution regarding data lim
itat
ions’ section provided under
‘Important notices’ on
pages 397-398
.
Addit
ional
informat
ion can be accessed through our su
ite
of supporting sustainab
il
ity reports and disclosures via our
website
www.sc.com/sustainab
il
ityl
ibrary
62
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
The opportunity to finance the transit
ion to a low carbon
economy is more compelling and crucial than ever. The
commercial case continues to grow, with the green economy
deliver
ing total returns of 198 per cent over the past 10 years
1
.
The scope for further sustainable finance growth is sign
ificant
as new technologies come online and as renewable capacity
growth continues to outpace that of fossil fuels
2
.
At the same time, the urgency of the transit
ion rema
ins
stark and this year we breached the 1.5°C threshold for the
first time, making 2024 the warmest year on record. The
disproport
ionate
impact of climate change on those least
equipped to respond, notably across our markets in Asia,
Africa and the Middle East, underscores the importance of
our ongoing commitment to capital mobil
isat
ion at scale to
deliver the sustainable outcomes we need to see, alongside
inclus
ive growth.
The Chief Sustainab
il
ity Officer (CSO) organisat
ion was
established in 2022 to build on the Group’s long-standing
sustainab
il
ity agenda. Since its creation, we have made
substantial progress on our Sustainab
il
ity Strategic Pillars,
which represent our near-term strategic focus. This includes
the work we do to scale sustainable finance, to embed
sustainab
il
ity across the organisat
ion, del
iver against our net
zero roadmap, and leverage our thematic Innovation Hubs.
Our sustainable finance income growth speaks to this
progress, with $982 mill
ion of susta
inable finance income
generated this year, meaning that we are on track to deliver
against our target of at least $1 bill
ion
in annual sustainable
finance income by 2025. As we scale, we continue to divers
ify
our sustainable finance revenue mix by increas
ing the
penetration of our core sustainable finance products across
markets and expanding our product offering suite. Alongside
this, we have now mobil
ised $121 b
ill
ion
in sustainable finance
for our clients from January 2021, against our commitment to
mobil
ise $300 b
ill
ion
in sustainable finance by 2030.
Internally, we continue to embed sustainab
il
ity across our
organisat
ion by upsk
ill
ing and empower
ing colleagues with
user-friendly tools, train
ing and streaml
ined processes,
all aimed at facil
itat
ing the adoption of sustainab
il
ity
opportunit
ies and manag
ing sustainab
il
ity risks throughout
the Group. While externally, our Innovation Hubs across
Adaptation Finance, Blended Finance Programmes,
Carbon Markets and Nature Finance, continue to pioneer
novel, high-vis
ib
il
ity transact
ions, invest
ing and support
ing
landmark projects that offer sign
ificant potent
ial for scale.
This year we continued to deliver against our Net Zero
Roadmap, completing our final baseline and target setting
for the 12 highest-emitt
ing sectors. But we also recogn
ise
that achiev
ing our net zero by 2050 target requ
ires active
collaboration and engagement with our clients to support
and accelerate their transit
ion, and have therefore publ
ished
our inaugural Transit
ion Plan alongs
ide this Annual Report.
This year we also sought to further expand our understanding
of our own nature-related risks and opportunit
ies, becom
ing
an early adopter of the Taskforce on Nature-related Financ
ial
Disclosures (TNFD). Build
ing on our amb
it
ion to sh
ift financ
ial
flows towards nature-posit
ive outcomes, Standard Chartered
also partnered with The Government of The Bahamas, The
Nature Conservancy, the Inter-American Development Bank
(IDB), and other financial partners to launch an
innovat
ive
debt conversion, expected to generate $124 mill
ion for
marine conservation.
Looking ahead to 2025, we will no doubt face challenges as
the sustainab
il
ity landscape develops and as we further
operational
ise our amb
it
ions. However, we’re steadfast
in
our focus to deliver on our commitments, and our CSO team
will continue to serve as a centre of excellence to support the
Group in deliver
ing on our Susta
inab
il
ity agenda, helping our
clients to transit
ion, and support
ing sustainable, inclus
ive
growth in our markets.
The progress detailed in this report reflects not just our
achievements to date, but our determinat
ion to help dr
ive
posit
ive change
in the years ahead.
Chief Sustainab
il
ity Officer’s review
1
‘Investing in the green economy 2024’, London Stock Exchange Group
2
‘World Energy Investment 2024’, International Energy Agency
“Accelerating
posit
ive change
in
the years ahead”
Marisa Drew
Chief Sustainab
il
ity Officer
63
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Our approach to sustainab
il
ity
Sustainab
il
ity is a strategic focus area for us, as we strive to promote inclus
ive growth
and prosperity across the markets where we operate.
Our approach to sustainab
il
ity supports the Group’s
strategy, which 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.
Our approach is articulated through our long-term
sustainab
il
ity goals – our Sustainab
il
ity Aspirat
ions – and
our short-term sustainab
il
ity targets – our 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 Group
scorecard and 2024–26 Long-Term Incentive Plan (LTIP) with
performance measures that align with our Sustainab
il
ity
Aspirat
ions and Susta
inab
il
ity Strategic Pillars.
This section sets out progress against our Sustainab
il
ity
Aspirat
ions and Susta
inab
il
ity Strategic Pillars before we dive
deeper into the material topics set out on page 60, includ
ing
sustainable finance, climate, nature and social impact.
2024 highl
ights
$121bn
Cumulative mobil
isat
ion of
sustainable finance from January
2021 to September 2024 against
our commitment to mobil
ise
$300 bill
ion by 2030
$982m
^
Income generated from sustainable
finance in 2024 against our target
of at least $1 bill
ion annual
income
by 2025
Net Zero
Interim targets set against our
12 highest-emitt
ing sectors
in line
with Net Zero Banking Alliance
(NZBA) guidance
Became early adopters of the
Taskforce on Nature-related
Financ
ial D
isclosures (TNFD)
Set an absolute facil
itated em
iss
ions
target for oil and gas, which currently
makes up the majority of em
iss
ions
with
in our fac
il
itat
ion portfolio
Published our first
Transit
ion Plan
Values noted with a caret symbol (^) are subject to independent lim
ited assurance by EY. Net zero progress has also been assured.
This can be found on pages 74-89. The assurance report is available at
sc.com/sustainab
il
ityl
ibrary
64
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– Annual Report 2024
Sustainab
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ity review
Sustainab
il
ity Aspirat
ions:
our long-term goals
1
We define mobil
isat
ion of sustainable finance as any investment or financ
ial serv
ice provided to clients that supports: (i) the preservation and/or improvement
of biod
ivers
ity, nature or the environment; (i
i) the long-term avo
idance/decrease of GHG emiss
ions,
includ
ing the al
ignment of a client’s business and operations
with a 1.5°C trajectory (known as transit
ion finance); (
i
i
i) a social purpose; or (iv) incent
iv
is
ing our cl
ients to meet their own sustainab
il
ity object
ives (known as
sustainab
il
ity-linked finance). It is a measure of total capital mobil
ised and cons
iders the total value being committed facil
it
ies provided
2
A full list of our memberships can be found at
sc.com/sustainab
il
itystakeholders
3
Decent jobs/employment: comprises formal employment and self-employment. ‘Decent’ aligns with the International Labour Organizat
ion (ILO) definit
ion, but in
recognit
ion of the challenges
in many markets to satisfy every criter
ia for ‘decent’, our Futuremakers
in
it
iat
ive counts those part
ic
ipants who have met m
in
imum
wage plus at least two addit
ional ILO cr
iter
ia. The data
includes 7,425 young female partic
ipants
in sustained decent employment, where partic
ipants rema
in in
decent employment six months post intervent
ion, and 13,250 d
irect jobs enabled to support microbus
inesses. Th
is comprises paid employment opportunit
ies
(direct employees, active associates, contractors, support/gig workers, and the entrepreneurs themselves) directly created by the supported microbus
inesses.
These may be part-time or full-time, with each job accounted for as a single unit. This KPI is based on actual data collated from project alumni over the seven year
period, estimates based on empir
ical research, and ex-post project evaluat
ions
For detailed progress against all our Aspirat
ion targets see
pages 393-395
Our Sustainab
il
ity Aspirat
ions are consol
idated into four overarching long-term goals, each
supported by key performance ind
icators (KPIs). Together, these reflect our comm
itment to fostering
sustainable social and economic development in our markets.
Progress to date
Sustainab
il
ity Aspirat
ion
Aspirat
ion 1:
Mobil
ise
$300 bill
ion
of sustainable
finance
1
We believe sustainable finance is essential in addressing the sign
ificant
social and environmental challenges faced by our markets. It has the
potential to support the needs of businesses, people and communit
ies, by
enabling the transit
ion to low-carbon technolog
ies, accelerating financ
ial
inclus
ion, and promot
ing sustainable, inclus
ive econom
ic growth.
Our sustainable finance product suite includes bonds, loans, advisory and
trade finance, and is underpinned by our sustainable finance frameworks,
which outline how we apply the ‘green’, ‘social’, ‘sustainable’ or ‘transit
ion’
labels across products and transactions.
$121bn
cumulative mobil
isat
ion
of sustainable finance
from January 2021 to
September 2024 against
our commitment to
mobil
ise $300 b
ill
ion
by 2030
Published our
inaugural
Transit
ion Plan
detail
ing our approach
aim
ing to ach
ieve net zero
by 2050
Aspirat
ion 2:
Operational
ise
our inter
im 2030
financed emiss
ions
targets to meet
our 2050 net zero
ambit
ion
We aim to reach net zero in our financed emiss
ions by 2050. The Group has
set and disclosed financed emiss
ions reduct
ion targets for 2030 across our
12 highest-emitt
ing sectors,
includ
ing a fac
il
itated em
iss
ions target for o
il
and gas, which currently makes up the major
ity of em
iss
ions w
ith
in our
facil
itat
ion portfolio.
We also believe that while target-setting is crucial, we need a clear plan to
transit
ion our bus
iness. This can be found in our 2025 Transit
ion Plan, wh
ich
outlines a comprehensive framework on how we intend to transit
ion our
business and operations, and collaborate with our clients with the aim to
deliver on our inter
im 2030 targets and ult
imate 2050 net zero ambit
ion. We
recognise the challenges posed by a material portion of our markets that have
yet to commit to net zero by 2050, but we remain focused on driv
ing progress.
Launched the
Guide for
Adaptation and
Resil
ience F
inance
in partnership with KPMG
and the United Nations
Office for Disaster Risk
Reduction (UNDRR)
Aspirat
ion 3:
Enhance and deepen
the sustainab
il
ity
ecosystem
We continue to util
ise our exper
ience and network to actively contribute to
key global partnerships and in
it
iat
ives that del
iver different
iated
impact
and help to mature and advance the sustainab
il
ity ecosystem. For example,
we continue to mainta
in gu
id
ing roles
in the Glasgow Financ
ial All
iance
for Net Zero (GFANZ), the UN Global Alliance of Investors for Sustainable
Development (GISD), and the Integrity Council for the Voluntary Carbon
Market (ICVCM), among others.²
Through innovat
ive frameworks and
impactful in
it
iat
ives, we have act
ively
sought to support global efforts to advance and unlock capital flows towards
crit
ical areas such as adaptat
ion and resil
ience, nature, carbon solut
ions and
sustainable finance.
20,675
decent jobs enabled and
supported in 2024
3
Aspirat
ion 4:
Drive social impact
with our clients and
communit
ies
We seek to accelerate the mobil
isat
ion of both private and philanthrop
ic
capital to address crit
ical soc
ial challenges in our footprint markets.
By leveraging our financ
ial expert
ise, product innovat
ion, and strateg
ic
partnerships, we deliver solutions that meet immed
iate needs wh
ile
empowering communit
ies for susta
inable growth.
Through Futuremakers, we establish strategic collaborations with clients,
NGOs and communit
ies to mob
il
ise soc
ial capital, create an inclus
ive
ecosystem to drive inclus
ive econom
ies and increase equitable prosperity.
For more informat
ion, see pages 91-92.
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– Annual Report 2024
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ity review
Sustainab
il
ity Strategic Pillars: our short-
term targets and immed
iate pr
ior
it
ies
Our four Sustainab
il
ity Strategic Pillars represent our near-term strategic focus designed to drive
momentum and accelerate progress towards our longer-term Sustainab
il
ity Aspirat
ions.
Progress to date
Sustainab
il
ity Pillar
Pillar 1:
Scale sustainable
finance income
1
Growth and innovat
ion
in our sustainable finance franchise is crit
ical to the
delivery of the Group’s Net Zero Roadmap and to support our clients on their
own transit
ion journeys. Our susta
inable finance teams develop customised
solutions that speak to clients’ needs and ambit
ions.
The Group’s sustainable finance product suite is set out with
in our GSPF, as
described on page 73. Our sustainable finance income target is a CIB target,
based on income generated from transactions util
is
ing sustainable finance
products for our clients and income generated from clients whose activ
it
ies
align with those in our Sustainable Finance Frameworks.
$982m^
sustainable finance
income generated in 2024
against our target of at
least $1 bill
ion annual
income by 2025
2
3,825
clients evaluated through
Climate Risk Assessments,
and 1,449 client
Environmental and
Social Risk Assessment
reviews completed
Pillar 2:
Further embed
sustainab
il
ity across
the organisat
ion
The CSO organisat
ion a
ims to act as a catalyst for change and a centre of
excellence. We foster collaboration internally to embed sustainab
il
ity across
our business operations and functions. We collaborate externally with clients
and other stakeholders who are aligned with our miss
ion to dr
ive change.
We aim to create a self-reinforc
ing cycle, wh
ich is built on established
processes, clear frameworks, engagement with our clients and collaboration
across risk and business teams. Our aim is to work with our clients to support
their transit
ion and decarbon
isat
ion journeys and where cl
ients evidence
transit
ion, help to accelerate progress.
12 out of 12
of the NZBA high-emitt
ing
sectors covered by 2030
science-based financed
emiss
ions targets
Pillar 3:
Deliver on the
annual milestones
set forth in our net
zero roadmap
We aim to reach net zero in our financed emiss
ions by 2050 and
in our own
operations by 2025.
We focus on three areas to reduce emiss
ions: our operat
ions, our supply
chain and financed emiss
ions assoc
iated with our clients. The major
ity of our
GHG emiss
ions are l
inked to our lending activ
it
ies. As such, we prior
it
ised our
measurement and decarbonisat
ion efforts
in the highest-emitt
ing and most
carbon-intens
ive sectors of our portfol
io.
We have now completed our financed emiss
ions target-sett
ing for our
12 highest-emitt
ing sectors. We have further set a fac
il
itated em
iss
ions
baseline and target for the oil and gas sector which currently makes up
the majority of em
iss
ions w
ith
in our fac
il
itat
ion portfolio.
Four
transactions executed
in 2024 aligned to the
Group’s sustainab
il
ity
themed Innovation Hubs
Pillar 4:
Leverage our
Innovation Hubs
Our four thematic Innovation Hubs – Adaptation Finance, Blended Finance
Programmes, Carbon Markets and Nature Finance – focus on emerging
sustainab
il
ity themes that are nascent but ripe for scale. The Hubs drive
innovat
ion
in the market across sustainab
il
ity.
In 2024, we executed on four transactions aligned to the themes of the Hubs.
Through our Nature Finance Hub, we executed a debt-for-nature swap
mandate for The Bahamas, with savings earmarked for conservation.
Our Carbon Hub launched a commercial banking facil
ity to support
forward carbon purchases for Brit
ish A
irways.
1
Values noted with a caret symbol (^) are subject to independent lim
ited assurance by EY. The report
is available at
sc.com/sustainab
il
ityl
ibrary.
2
Refers to our goal to reach $1 bill
ion
in Sustainable finance income by the end of 2025
66
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– Annual Report 2024
Sustainab
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ity review
Innovation Hubs
Announced in 2023, our four thematic Innovation Hubs – Adaptation Finance
1
, Blended Finance
Programmes
2
, 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.
Context
Across our markets, there is an urgent need to unlock and scale
public and private climate adaptation finance to build shared
societal resil
ience. Th
is means embedding adaptation and
resil
ience
into financ
ial dec
is
ion-mak
ing to manage risks and
ident
ify new opportun
it
ies, wh
ich is crit
ical g
iven that every $1
spent on adaptation this decade could generate up to $12 of
economic benefit
3
.
Adaptation represents both a risk and an opportunity for the
Group, its clients and communit
ies. We are work
ing to ident
ify
and scale the adaptation finance opportunity across our business
and to support the development of adaptation finance across the
wider market.
Progress
In 2024, Standard Chartered, KPMG and the UNDRR – with
contribut
ions from more than 30 add
it
ional organ
isat
ions –
developed and published the Guide for Adaptation and Resil
ience
Finance (The Guide). The Guide now supports the market in
ident
ify
ing adaptation opportunit
ies, by sett
ing out elig
ible
financeable activ
it
ies and guidance on what constitutes
adaptation and resil
ience
investment, alongside a practical
roadmap for financing and
investment opportunit
ies.
We also completed the Group’s first adaptation finance
transaction – an adaptation letter of credit with a parametric
insurance provider, which provided financ
ial protect
ion for
businesses in the renewable energy sector against extreme
weather such as changes in river levels and wind levels.
Standard Chartered is also co-chair of the UK Climate Financ
ial
Risk Forum Adaptation working group. Through this forum and
others, the Group will continue to engage the financ
ial ecosystem
to seek opportunit
ies for adaptat
ion and resil
ience
in Asia, Africa
and the Middle East.
Standard Chartered is ranked 1st in Climate X’s ranking of the
world’s top 50 banks for climate adaptation
4
.
For more on Adaptation Finance see our
•
Adaptation Economy Report via
sc.com/en/campaigns/adaptation-economy/
•
Guide for Adaptation and Resil
ience F
inance via
sc.com/en/adaptation-resil
ience-finance-gu
ide/
•
Read our research on the Adaptation Economy here:
sc.com/en/campaigns/adaption-economy/
1. Adaptation Finance
About the Innovation Hubs
Blended Finance
Programmes
Adaptation
Finance
Nature Finance
Carbon Markets
Innovation
Hubs
Our Innovation Hub model
1
Adaptation and resil
ience finance: Adaptat
ion and resil
ience finance
is considered to be any financ
ial serv
ice which is provided to an entity to enable adaptation
and enhance resil
ience to cl
imate and non-climate-related natural hazards with
in that ent
ity’s assets, operations, customers, supply chain, or the communit
ies
in
which they operate.
2
Blended Finance is the use of catalytic public (and/or philanthrop
ic) cap
ital to increase private sector investment that supports the SDGs
3
Read our research on the Adaptation Economy here:
sc.com/en/campaigns/adaption-economy/
4
Based on 17 ind
icators as descr
ibed Climate X’s 2024 white paper ‘Top 50 Banks in the World Tackling Adaptation’
Each Hub is transversal, run by senior leaders in the CSO organisat
ion, and a
ims to ident
ify opportun
it
ies for future returns
outside of our core range of tradit
ional products and serv
ices. By being deliberate in demonstrating leadership to advance
the ecosystem in these emerging thematic areas, the Group expects to be well-posit
ioned to take advantage of the
sign
ificant and d
ifferent
iated revenue potent
ial that will result from maturation of these themes in the future.
67
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Context
As we move closer to crit
ical 2030 cl
imate and sustainab
il
ity
targets, the need for blended finance to fill financing gaps
becomes even more pressing. However, blended finance deals
largely continue to be ‘bespoke’ to each situat
ion, wh
ich lim
its
their scalabil
ity.
Standard Chartered is already recognised by Convergence (the
global network for blended finance) as among the most active
commercial banks in the blended finance space, and we are well
posit
ioned to play a leadersh
ip role in this area given our footprint
across Asia, Africa and the Middle East.
We are working to address the issue of scalabil
ity by
ident
ify
ing,
creating and implement
ing blended finance through a more
programmatic approach: working through partnerships with
Development Finance Institut
ions (DFIs) and Mult
ilateral
Development Banks (MDBs) as well as with
in country platforms.
We describe this approach more fully in our article ‘Country
Platforms: A programmatic approach to blended finance
’1
.
Progress
The Group has sought to establish both partnerships and
platforms throughout the year. We continue our partic
ipat
ion,
as a signatory, in the Just Energy Transit
ion Partnersh
ips (JETPs)
in Indonesia and Vietnam, working with our clients to translate
polit
ical
investment plans into project financ
ing.
In addit
ion, at COP29 th
is year, the Kingdom of Lesotho
announced its intent
ion to appo
int Standard Chartered and
Standard Bank South Africa as jo
int financial adv
isers, during the
launch of the His Majesty King Letsie III Just Energy Transit
ion Fund
(HMKLIII JET Fund). The HMKLIII JET Fund aims to build a new era
of energy independence and export in Lesotho: fulfill
ing Lesotho’s
domestic demand through build
ing both local supply and
surplus generation for export to neighbour
ing Southern Afr
ica.
The HMKLIII JET Fund seeks to bring private investment to
Lesotho through the country platform approach.
Standard Chartered is also a founding partic
ipant
in the
Bangladesh Climate and Development Platform, a country
platform to leverage adaptation and mit
igat
ion investments.
The country platform concept was first advanced by the World
Bank in 2017, moving beyond just single projects, and is designed
to foster collaboration among development partners based on
a shared vis
ion.
We also contributed to a number of global in
it
iat
ives (e.g. w
ith
in
GFANZ and WEF) to help drive thought leadership around
blended finance.
2. Blended Finance Programmes
Context
Effective carbon markets are crit
ical to global efforts to m
it
igate
climate change and to finance sustainable development.
This was stressed by the UN Intergovernmental Panel on Climate
Change in its April 2022 report on mit
igat
ing climate change,
which noted that “the deployment of carbon diox
ide markets to
counterbalance hard-to-abate residual emiss
ions
is unavoidable
if net zero emiss
ions are to be ach
ieved”.
Carbon markets put a price on carbon emiss
ions, can be
complementary to credible net zero transit
ion plans, and help to
channel climate finance where it’s needed, most crit
ically across
our markets. A high-integr
ity carbon market, comb
ined with
corporate commitments to cut emiss
ions and h
igh standards of
reporting can accelerate the global progress towards net zero
by 2050, while supporting sustainable development globally.
The Group has been a firm advocate of carbon market
standardisat
ion and has been at the forefront of several
in
it
iat
ives
that are working to ensure that high-integr
ity, scalable carbon
markets develop. We offer trading, advisory, financ
ing and r
isk
management services to our clients around the world and
continue to develop our suite of banking solutions as carbon
markets grow and mature.
Progress
In 2024, we bolstered our support of carbon market development
to provide innovat
ive carbon financing solut
ions. Standard
Chartered partnered with Brit
ish A
irways, CFC Insurance, Cur8,
Will
is Towers Watson, and UNDO to p
ilot an innovat
ive bank
loan against a carbon removal credits offtake contract. The
transaction featured a purpose-built carbon insurance policy,
allowing for the upfront monetisat
ion of an ex
ist
ing long-term
carbon offtake agreement.
We have been working on broadening our financ
ing capab
il
it
ies
to be able to apply sim
ilar solut
ions to other carbon project types
and to support addit
ional sources of debt such as outcome bonds
and securit
isat
ion of carbon portfolios.
We continue to support the ICVCM review process for both carbon
standards and methodologies and, in the past year, have been
involved in some of the largest carbon market transactions,
includ
ing act
ing as a supplier for the Regional Voluntary Carbon
Market Company and Climate Impact X’s respective carbon
credit auctions.
3. Carbon Markets
1
Available at
sc.com/deliver
ing-blended-finance
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Debt conversion for nature for The Bahamas
Standard Chartered acted as the sole lender in this
transaction, underwrit
ing a new $300 m
ill
ion loan. The loan
was backed by guarantees from IDB, Builders Vis
ion (an
impact platform founded by Lukas Walton) and AXA XL
(a special
ist
insurer). The Nature Conservancy was
responsible for mobil
is
ing the guarantee package for the
transaction and will also provide long-term conservation
support to The Bahamas Government.
Through the new loan, The Bahamas bought back
$300 mill
ion of
its external commercial debt, generating
$124 mill
ion
in savings which will be dedicated to marine
conservation in The Bahamas. The debt savings will
support The Bahamas to effectively manage its unique
system of almost 6.8 mill
ion hectares of Mar
ine
Protected Areas (MPAs), complete a national Mangrove
Management Plan and develop and implement a Marine
Spatial Plan aimed at addressing increased demands for
the use of The Bahamas’ ocean through a transparent,
partic
ipatory, and sc
ience-based process.
The Bahamas debt conversion project thus not only helps
to free up fiscal space by reducing debt service payments,
but also helps to support sovereign sustainable
development prior
it
ies – conserving and managing marine
areas to provide the crit
ical hab
itats for diverse species,
protect coasts from storms and sustain local livel
ihoods.
The project is also one of many firsts:
•
Our first debt conversion for nature.
•
First time a family office has provided a meaningful
component of the credit enhancement package, with
Builders Vis
ion prov
id
ing a $70 m
ill
ion co-guarantee.
•
First time a private insurer has provided credit insurance
alongside a Multilateral Development Bank in support
of a sustainable issuance for nature and climate, with
AXA XL provid
ing $30 m
ill
ion
in credit insurance.
•
First time that climate-smart MPA commitments –
which include considerat
ions for manag
ing potential
climate change impacts – are explic
itly
included in
conservation outcomes to support climate mit
igat
ion
and adaptation goals.
More informat
ion about the debt convers
ion for nature
for the Bahamas is available at
sc.com/en/campaigns/
bahamas-debt-for-nature
Context
It is estimated that over half of global GDP is moderately or highly
dependent upon nature. The 2019 Global Assessment Report from
the Intergovernmental Science-Policy Platform on Biod
ivers
ity and
Ecosystem Services highl
ighted how b
iod
ivers
ity loss undermines
livel
ihoods, food secur
ity, economies and health, while also
threatening the resil
ience of our planet to cl
imate change.
Despite its importance, nature is rapidly declin
ing. An est
imated
25 per cent of plants and animals are threatened with extinct
ion,
amid a 47 per cent decline in natural ecosystem extent and
condit
ion relat
ive to earliest estimated states.
1
Protecting nature
is essential to lim
it
ing anthropogenic global warming and
mit
igat
ing its impacts so that the planet can sustain all livel
ihoods
and support inclus
ive susta
inable economic development.
Having applied internat
ional env
ironmental and social standards
in our financ
ing for more than 20 years, our presence
in markets
with some of the richest, remain
ing b
iod
ivers
ity in the world
posit
ions us to engage w
ith a range of key stakeholders.
We are guided by our commercial ambit
ion to
increas
ingly sh
ift
financial flows towards nature-pos
it
ive outcomes by al
ign
ing
and contribut
ing to the targets of the Global B
iod
ivers
ity
Framework (GBF).
Progress
Standard Chartered has partnered with The Government of
The Bahamas, The Nature Conservancy, IDB, and other financial
partners to launch an innovat
ive debt convers
ion for nature
and climate, which aims to help the country improve ocean
conservation and management.
We have also expanded the Group’s GSPF in 2024 to include
addit
ional nature-related act
iv
it
ies informed by the GBF. Namely,
under the GSPF ‘Sustainable management of liv
ing and natural
resources’ category, we have expanded the criter
ia to
include a
multitude of activ
it
ies that contribute to ecosystem and nature
conservation, includ
ing but not l
im
ited to:
investment in restoration
of degraded areas; in-situ conservation activ
it
ies around
sustainable tourism areas, and investment in activ
it
ies that
mit
igate the
impact of invas
ive al
ien species. With
in the ‘Pollut
ion
prevention and control’ GSPF category, we have also recognised
activ
it
ies that contribute to soil remediat
ion, and waste prevent
ion
or reduction. Through our nature risk working group we are
advancing our nature risk analysis by leveraging our climate risk
data capabil
it
ies to support more in-depth analysis of potential
material sectors and sites, and assess our financ
ial exposure to
direct and ind
irect pressures and dependenc
ies on nature.
To amplify Standard Chartered’s thought leadership in the nature
sphere, we co-authored the Group’s latest sustainab
il
ity research
‘Towards a sustainable ocean: where there’s a will, there’s a wave’
2
published in November 2024, highl
ight
ing opportunit
ies for
financing the nature-pos
it
ive trans
it
ion of the blue economy.
For more on progress made towards nature see
page 90
4. Nature Finance
1
IPBES (2019) Global Assessment Report on Biod
ivers
ity and Ecosystem Services
2
Read our blue economy research paper ‘Towards a sustainable ocean: where there’s a will, there’s a wave’ at
sc.com/blue-economy
69
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Sustainable finance
Sustainable finance, includ
ing trans
it
ion finance,
is a crucial part of our sustainab
il
ity strategy
and is therefore reflected in both our long-term Sustainab
il
ity Aspirat
ions and short-term
Sustainab
il
ity Strategic Pillars.
Sustainable finance mobil
ised
1
Product
Oct 2023 – Sep 2024¹¹
$m
Jan 2021 – Sep 2023
$m
Cumulative progress
Jan 2021 – Sep 2024
$m
Use of proceeds
2,3
7,510
18,989
26,499
Sustainab
il
ity-linked loans (SLLs)
3,4
9,529
28,638
38,167
Transit
ion finance
3,5
1,023
762
1,785
SME lending
3,6
1,342
2,853
4,195
Microf
inance
3,6
752
1,940
2,692
Green mortgages
3,7
245
4,822
5,067
Mergers and acquis
it
ions (M&A)/Advisory
8
2,926
5,786
8,712
Green and social bonds facil
itated
9
10,220
23,423
33,643
Total sustainable finance mobil
ised
10
33,547^
87,213
120,760
Of the above
Corporate &Investment Banking (CIB)
31,960
79,539
111,499
Wealth & Retail Banking (WRB)
1,587
7,674
9,261
Total sustainable finance mobil
ised
10
33,547^
87,213
120,760
Our broad sustainable finance product suite, which includes
bonds, loans, advisory and trade finance, is underpinned by
our sustainable finance frameworks (described on page 73)
that outline how we apply the ‘green’, ‘social’, ‘sustainable’ or
‘transit
ion’ labels across products and transact
ions. We also
work with retail and wealth clients to mobil
ise d
iverse sources
of capital in support of social and environmental outcomes.
Our aspirat
ion
is to mobil
ise $300 b
ill
ion
of sustainable finance.
We have mobil
ised $121 b
ill
ion of susta
inable finance
from January 2021 through to September 2024 against
our commitment to mobil
ise $300 b
ill
ion by 2030.
1
We define mobil
isat
ion of sustainable finance as any investment or financ
ial serv
ice provided to clients that supports: (i) the preservation and/or improvement of
biod
ivers
ity, nature or the environment; (i
i) the long-term avo
idance/decrease of GHG emiss
ions,
includ
ing the al
ignment of a client’s business and operations
with a 1.5°C trajectory (known as transit
ion finance); (
i
i
i) a social purpose; or (iv) incent
iv
is
ing our cl
ients to meet their own sustainab
il
ity object
ives (known as
sustainab
il
ity-linked finance). It is a measure of total capital mobil
ised and cons
iders the total value being committed facil
it
ies provided
2
Mobil
isat
ion amounts include transactions with restricted use of the financ
ing proceeds that al
ign to our GSPF. Use of proceeds lending transactions are measured
as the loan commitment/underwritten amount provided to the counterparty. Use of proceeds transactions to the value of $538 mill
ion have been reclass
if
ied as
SLLs in the 2023 year due to transaction tagging refinement
3
Lending transactions are measured as the loan commitment/underwritten amount provided to the counterparty
4
SLLs refer to any type of loan instrument for which the economic characterist
ics can vary depend
ing on whether the counterparty achieves ambit
ious, mater
ial
and quantif
iable predeterm
ined sustainab
il
ity performance targets (SPTs). The use of proceeds in relation to an SLL is not a determinant in its categorisat
ion and,
in most instances, SLLs will be used for general corporate purposes. SLLs are not issued in line with the Group’s GSPF but are subject to other internal guidance
documentation, based on the Sustainab
il
ity Linked Loan Princ
iples
5
Transit
ion finance
includes any financ
ial serv
ice provided to clients to support them to align their business and/or operations with a 1.5°C trajectory issued in line
with our TFF, this is measured on a committed facil
ity prov
ided basis
6
SME and Microf
inance lend
ing is the provis
ion of finance to developed but not h
igh-income countries as per the United Nations World Economic Situat
ion and
Prospects (UN WESP) report. The inclus
ion of SME lend
ing is linked to the ‘Access to Finance’ sub-theme with
in the Group’s GSPF
incorporating employment
generation, and programmes designed to prevent and/or alleviate unemployment, includ
ing through the potent
ial effect of small and medium enterprise (SME)
financing and m
icrof
inance. SME mob
il
isat
ion is the lending facil
it
ies provided to small companies and renewed when the facil
it
ies renew. Microf
inance
mobil
isat
ion is measured as the cash disbursed
7
Green Mortgages are loans issued by our Wealth & Retail Banking business (WRB) where the underlying property meets a specif
ic energy rat
ing. Mobil
isat
ion is
measured as the cash disbursed to lenders. Value mobil
ised
in 2021 includes mortgages orig
inated before 2021 but
ident
ified as Green
in 2021
8
M&A/Advisory represents where the Group is the financ
ial adv
isor to a transaction which has been tagged as sustainable in line with the Group’s GSPF or TFF.
The amount attributed to M&A/Advisory mobil
isat
ion is proportional and represents the total deal size div
ided by the number of financial adv
isers on the deal
9
Capital market bonds are measured by the proportional bookrunner share of facil
itated act
iv
it
ies as determined by third-party league table rankings based on
the level of services provided
10 Values noted with a caret symbol (^) are subject to independent lim
ited assurance by EY. The report
is available at
sc.com/sustainab
il
ityl
ibrary
11
Some transactions included in 2024 reporting related to deals that were signed during prior years but which only received approval for sustainable finance tagging
during 2024
70
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Scaling sustainable finance income
Our sustainable finance franchise supports clients on their
transit
ion and broader susta
inab
il
ity journeys by developing
customised solutions that speak to their needs and ambit
ions.
The franchise generated over $982 mill
ion between January
and December 2024 putting us with
in reach of our target of
at least $1 bill
ion annual
income by 2025. This represents over
8.3 per cent of our total Corporate & Investment Banking
income in 2024, a year-on-year growth rate of 36 per cent.
As a UK-headquartered internat
ional bank we work to deploy
capital across our global markets. As can be seen on the
following pages and in our 2024 Sustainable Finance Impact
Report, we have raised $7.9 bill
ion of susta
inable liab
il
it
ies
across our markets, while 78 per cent of our $23.3 bill
ion
sustainable finance asset base is located in Asia, Africa and
the Middle East.
In 2024, we continued to develop our sustainable finance
product suite, with over 40 product variants as set out in
our GSPF. Co-developed with Morningstar Sustainalyt
ics, a
globally recognised provider of ESG research, ratings and
data, our framework is reviewed annually to reflect changes
in market trends and industry standards.
Our pureplay clients are also key to achiev
ing our susta
inable
finance goals. These are companies whose activ
it
ies align
with those in our GSPF or in our TFF. Their sign
ificance l
ies in
their abil
ity to del
iver credible and robust impact, driven by
the inherent green and socially sustainable nature of their
business models and operations, or their crit
ical role
in
supporting and/or enabling the transit
ion.
Our sustainable finance income
1
includes client income
generated from our sustainable finance product suite net
of funding costs, as well as from clients recognised as green,
social, sustainable or transit
ion pureplays.
Read more in our Sustainable Finance Impact Report at
sc.com/sfimpactreport
Sustainable finance income
2
Product
2024
3
$m
2023
$m
YOY
%
Transaction services
319
202
58
Payments & Liqu
id
ity
187
103
82
Securit
ies & Pr
ime Services
4
–
400
Trade & Working Capital
128
99
29
Banking
552
427
29
Lending and financ
ing solut
ions
507
386
31
Capital market and advisory
45
41
10
Markets
111
91
22
Macro Trading
101
76
33
Credit Trading
10
15
(33)
Total sustainable finance income by product
982^
720
36
Our target to generate
at least $1 bill
ion annual
sustainable finance
income by 2025
We generated $982 mill
ion^ of susta
inable
finance income in 2024, putting us with
in reach
of our target.
1
For derivat
ive transact
ions included with
in our susta
inable finance income, these reflect the client income related to transactions, which includes margins charged
in excess of hedging costs
2
Values noted with a caret symbol (^) are subject to independent lim
ited assurance by EY. The report
is available at
sc.com/sustainab
il
ityl
ibrary
3
Product allocations have changed to align to the new business structure with
in CIB
71
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Sustainable finance assets and sustainab
il
ity-linked assets
Our sustainable finance assets reflect the assets on our balance sheet generated as a result of this green, social and sustainable
financing act
iv
ity, and
it is against these assets that we raise sustainable liab
il
it
ies. Trans
it
ion assets are not
included with
in th
is
asset base.
The Group’s sustainable finance asset base increased by 32 per cent to $23.3 bill
ion between October 2023 and September
2024. The majority of our susta
inable finance asset base ($17.4 bill
ion of the $23.3 b
ill
ion)
is made up of financ
ing to green
projects such as renewable energy projects, green real estate and funding for the development of electric rail projects.
Our social finance assets make up $5.5 bill
ion of the total susta
inable finance asset pool and encompass categories such as
healthcare, education and access to finance in developing markets. The remain
ing assets ($0.4 b
ill
ion of the $23.3 b
ill
ion)
span across both green and social categories, includ
ing renewable energy, susta
inable water and wastewater management,
access to essential services and food security.
Green finance assets
1,2
Theme
Sept 2024
$m
Sept 2023
$m
SDGs
Clean transportation
1,929
901
Electric vehicles (EVs)
710
197
EV battery manufacturers
622
372
Manufacturing of special
ised component parts of EVs
147
112
Rail
450
220
Climate change adaptation
3
4
Energy efficiency
141
482
LED light
ing
92
7
Modernisat
ion of broadband network
46
475
Smart meters
3
–
Eco-efficient products
37
–
Green build
ings
8,816
8,742
Green build
ings
5,554
5,066
Mortgage portfolio Hong Kong
3,225
3,657
Mortgage portfolio Singapore
16
–
Mortgage portfolio Taiwan
20
19
Mortgage portfolio Vietnam
1
–
Pollution prevention and control
157
14
Portfolio of green projects
436
351
Multiple
Renewable energy
5,498
3,100
Transmiss
ion l
ines
174
102
Hybrid wind and solar
528
38
Hydropower
24
32
Manufacture of components for renewable energy technology
954
457
Solar
1,618
940
Waste to energy
239
166
Wind
1,534
1,178
Energy storage
130
68
Green hydrogen
19
9
Mixed renewables
278
110
Sustainable management of liv
ing and natural resources
249
–
Sustainable water and wastewater management
127
–
Total green assets
17,393
13,594
Portfolio of green and social projects³
392
473
Multiple
1
Amounts included in the table are as of September 2024 and September 2023 and are aligned to the Group’s Sustainable Finance Impact Report available at
sc.com/sfimpactreport
. September 2024 and September 2023 figures have been prepared on the same basis as the Impact Report
2
Values noted with a caret symbol (^) are subject to independent lim
ited assurance by EY. The report
is available at
sc.com/sustainab
il
ityl
ibrary
3
The underlying assets could potentially span across various categories, includ
ing renewable energy, susta
inable water and wastewater management, access to
essential services and food security. These assets, while included in the overall totals, remain unident
ified
in terms of specif
ic green and soc
ial classif
icat
ion until
allocation reports are received
72
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Social finance assets
1,2
Sept 2024
$m
Sept 2023
$m
SDGs
Access to water
121
72
Access to essential services
338
145
Education infrastructure – univers
it
ies
6
6
Healthcare infrastructure – hospitals
230
131
Provis
ion of support
ing healthcare-related products and services
95
8
Education loans
7
-
Road infrastructure
120
46
Access to finance
4,050
3,062
SME lending
3,467
2,506
Microf
inance
583
555
Affordable basic infrastructure
879
198
Sewage treatment
–
1
Telecommunicat
ions/Internet connect
iv
ity
879
197
Food security
14
22
Portfolio of social projects
25
–
Total social assets
5,547
3,545
Total green and social finance assets
23,332^
17,612
Sustainab
il
ity-linked assets¹
Sept 2024
$m
Sept 2023
$m
Total sustainab
il
ity-linked loans
6,619
4,805
Total sustainab
il
ity-linked assets
6,619
4,805
Total green and social finance and sustainab
il
ity-linked assets
1,3
Sept 2024
$m
Sept 2023
$m
Corporate & Investment Banking
24,098
17,103
Wealth & Retail Banking
5,853
5,314
Sustainable liab
il
it
ies
1,2
Theme
Sept 2024
$m
Sept 2023
$m
Total bond issuances
2,126
2,353
of which sustainable structured notes
950
795
of which green structured notes
60
–
Total sustainable term deposits
3,325
4,554
Total sustainable term accounts
1,214
1,027
Total sustainable retail current and savings accounts and deposits
1,196
513
Total sustainable liab
il
it
ies
7,861^
8,447
1
Amounts included in the table are as of September 2024 and September 2023 and are aligned to the Group’s Sustainable Finance Impact Report available at
sc.com/sfimpactreport
. September 2024 and September 2023 figures have been prepared on the same basis as the Impact Report
2
Values noted with a caret symbol (^) are subject to independent lim
ited assurance by EY. The report
is available at
sc.com/sustainab
il
ityl
ibrary
3
The underlying assets could potentially span across various categories, includ
ing renewable energy, susta
inable water and wastewater management, access to
essential services and food security. These assets, while included in the overall totals, remain unident
ified
in terms of specif
ic green and soc
ial classif
icat
ion until
allocation reports are received
See
sc.com/sfimpactreport
for more highl
ights on our Susta
inable Finance assets in 2024, includ
ing asset locat
ions
Wealth & Retail Banking sustainable invest
ing
The Group had $1.3 bill
ion susta
inable invest
ing (SI) assets under management (AUM) at 31 December 2024 (a 30 per cent
increase from $1.0 bill
ion at 31 December 2023).
Following a review of our methodology, we have refined our defin
it
ion of SI AUM this year to only include products that the
Group actively advises on. This includes funds and structure products, and excludes bonds and equit
ies.
For further informat
ion on our Susta
inable Investments universe, refer to
sc.com/sustainable-invest
ing
73
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Governance over sustainable finance products and frameworks
The Group has Product Programme Guidance documents in place, which underpin each Sustainable Finance product that we
offer, signed off by a delegate of the Sustainable Finance Governance Committee (SFGC) following approval of the product
construct by the SFGC.
The SFGC is our forum for review
ing Susta
inable Finance products and frameworks, and derives its authority from the Group
Responsib
il
ity and Reputational Risk Committee (GRRRC). The GRRRC is the ultimate approval body for all of our Sustainable
Finance Frameworks. Its membership is drawn from the CSO organisat
ion, Legal, Compl
iance, and ESG and Reputational Risk.
The SFGC is our foremost committee for managing greenwashing risk in sustainable finance product design and labelling.
For more, vis
it
sc.com/sustainab
il
ityl
ibrary
For more informat
ion on our Green and Susta
inable Product Framework please vis
it
sc.com/gspf
For more informat
ion on our Susta
inab
il
ity Bond Framework please vis
it
sc.com/sustainab
il
ity-bond-framework
For more informat
ion on our Trans
it
ion F
inance Framework please vis
it
sc.com/transit
ion-finance-framework
Green and
Sustainable Product
Framework
Our GSPF governs the activ
it
ies
that we as an organisat
ion class
ify
as ‘green’, ‘social’ and ‘sustainable’.
It sets out our approach to
mit
igat
ing greenwashing risk
across our product suite and
defines the themes and activ
it
ies
that we consider elig
ible for green,
social and sustainable financ
ing.
The Framework is informed by
internat
ional market gu
idel
ines
and standards on green and
sustainable finance, includ
ing
among others, the Climate Bonds
Standard, EU Taxonomy for
sustainable activ
it
ies and the
Green Loan Princ
iples. Co-
developed with Morningstar
Sustainalyt
ics, our Framework
is
reviewed annually with the aim to
ensure it remains in line with the
latest industry standards.
Sustainab
il
ity
Bond Framework
Our SBF provides the basis for
the issuance of green, social and
sustainab
il
ity bonds and notes,
drawing on the activ
it
ies that
we view as ‘green’, ‘social’ and
‘sustainable’.
It governs our sustainable debt
products issued by the Group,
provid
ing transparency and
guidance on the use of proceeds,
process for project evaluation
and selection, management
of proceeds and reporting,
as aligned with the ICMA
Sustainab
il
ity Bond Princ
iples.
It has received a Second Party
Opin
ion from Morn
ingstar
Sustainalyt
ics, wh
ich confirms
our Framework is credible,
impactful and aligns with
industry guidel
ines.
Transit
ion
Finance Framework
Our TFF sets out the assets and
activ
it
ies that qualify under a
‘transit
ion’ label.
We have outlined our approach to
defining and govern
ing transit
ion
finance in our TFF. This framework
is informed by the 2023
International Energy Agency (IEA)
Net Zero Emiss
ions (NZE) 2050
scenario and is reviewed annually
for alignment with the latest
available science and industry
standards. This year we published
the third iterat
ion of the TFF.
Our Sustainable Finance Frameworks
INTERNAL
Green and Sustainable
Product Framework 2024
Version 6.0
INTERNAL
Sustainability
Bond Framework
December 2024
1
Standard Chartered
Transit
ion F
inance Framework
2024
74
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Our global footprint informs our unique understanding of the
complexity associated with reaching our targets across our
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 financial
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.
Published this year, the Group’s inaugural Transit
ion Plan
outlines our approach to deliver this change and aim to
achieve net zero by 2050, demonstrating to clients, suppliers,
customers, and other key stakeholders that we have a
clear plan to deliver on the commitments we have made.
The Transit
ion Plan consol
idates and expands upon the
disclosures provided in this Annual Report, the Net Zero
Roadmap and Net Zero Methodological White Paper.
The Transit
ion Plan has been developed cons
ider
ing
guidel
ines prov
ided by the Transit
ion Plan Taskforce and
GFANZ frameworks.
The Group also made progress on our target-setting coverage
for financed emiss
ions, sett
ing a baseline and target on our
agriculture portfolio. Reporting also resumed for our aviat
ion
business sector following the sale of the Group’s global aircraft
finance leasing business and major
ity of lend
ing portfolio in
2023. As a result, the Group has now formally completed
target-setting for our twelve highest-emitt
ing sectors.
In 2023, the Partnership for Carbon Accounting Financ
ials
(PCAF) released its facil
itated em
iss
ions methodology.
1
Following this, we continued to work on target-setting for
the capital market issuances on which we assist our clients.
The Group has also now set a facil
itated em
iss
ions target for
the oil and gas sector which currently makes up the major
ity
of emiss
ions w
ith
in our fac
il
itat
ion portfolio. Facil
itated
emiss
ions refers to the em
iss
ions charge the Group
incurs for
provid
ing the serv
ice of facil
itat
ing the issuance of a debt
capital markets bond for an oil and gas client. This charge is
incurred regardless of whether the Group holds any portion
of the bond or not.
For informat
ion about our approach to cl
imate governance,
refer to
pages 98-102
Download our Transit
ion Plan and ‘Net Zero Methodolog
ical White
Paper – The journey continues’ from
sc.com/sustainab
il
ityl
ibrary
Climate
We aim to reach net zero in our financed emiss
ions by 2050 and
in our Scope 1 and Scope 2
emiss
ions by 2025. Our net zero roadmap sets out the key steps we need to take to ach
ieve
this goal, and thus far we have made good progress achiev
ing the goals we set for 2024.
The Transit
ion Plan sets out:
•
Our current practices: The evolving business practices
that underpin our commitment to net zero.
•
Control environment: The governance framework and
descript
ion of controls over our net zero calculat
ions,
target management, client engagement, and
decis
ion-mak
ing processes, designed to mainta
in
oversight, accountabil
ity, and al
ignment with the
Group’s net zero objectives.
•
Embedding net zero: The measures and in
it
iat
ives
undertaken to integrate net zero considerat
ions
into the client lifecycle. How we are systematically
integrat
ing and operat
ional
is
ing sustainab
il
ity into
client engagement strategies, with the aim to drive
measurable outcomes.
1
‘The Global GHG Accounting & Reporting Standard (Part B): Facil
itated Em
iss
ions’, Partnersh
ip for Carbon Accounting Financ
ials, December 2023
75
Standard Chartered
– Annual Report 2024
Our net zero roadmap
We aim to reach net zero emiss
ions
in our financed emiss
ions by 2050 and
in our Scope 1
and Scope 2 emiss
ions by 2025.
To help us remain on track, we have set short- and medium-term object
ives and quant
if
iable targets
to manage and report on our progress on an annual basis. We have now set inter
im 2030 targets for all the
highest-emitt
ing sectors
in the Group’s portfolio.
2021
Launched our roadmap to net zero by 2050, includ
ing
inter
im targets and a support
ing methodology
Announced plans to mobil
ise $300 b
ill
ion
in sustainable
finance by 2030
Published our inaugural TFF
205
0
Aim to become net zero in our financed emiss
ions
2022
•
Developed financed emiss
ions basel
ines and 2030
targets for the aviat
ion, sh
ipp
ing and automot
ive
manufacturers sectors
• Joined PCAF
2024
•
Measured and disclosed an agriculture baseline
and target, the final high emitt
ing sector
recommended by the NZBA
•
Resumed aviat
ion sector report
ing following the sale
of the Group’s aircraft leasing business and a
sign
ificant port
ion of the lending portfolio
•
Set a baseline and target for our facil
itated em
iss
ions
portfolio focusing on the oil and gas sector which
currently makes up the majority of em
iss
ions w
ith
in
our facil
itat
ion portfolio
•
Issued the Group’s first Transit
ion Plan set out w
ith
reference to the Transit
ion Plan Taskforce and GFANZ
guidance
•
•
•
2025
•
Aim to be net zero in our Scope 1 and 2 emiss
ions
•
Set a methane reduction target
2023
Announced our enhanced oil and gas absolute
financed emiss
ions target
Updated our power and steel sector baselines and
targets moving from a revenue-based intens
ity metr
ic to
a production-based intens
ity metr
ic
Developed financed emiss
ions basel
ines and set inter
im
2030 targets for four addit
ional sectors: cement,
alumin
ium, res
ident
ial mortgages and commerc
ial real
estate, bring
ing the total number of sc
ience-based
targets set for high-emitt
ing sectors to 11
Financed emiss
ions basel
ines and sectoral progress
against targets, where ind
icated, assured for the first
time by Ernst & Young
Calculated the Group’s facil
itated em
iss
ions from debt
capital markets following the final PCAF guidance
(published in December 2023) under both the 33 per
cent and 100 per cent weight
ing factors
Published the Group’s updated Net Zero Methodological
White Paper – The journey continues
2032
•
Targeted end date for legacy direct thermal
coal min
ing financing globally
in line with our
Posit
ion Statements
203
0
We will have substantially reduced our
exposure to the thermal coal min
ing sector
in
line with our Posit
ion Statements
Aim to meet the Group’s financed and
facil
itated em
iss
ions
inter
im targets set for
high-emitt
ing sectors
•
•
•
•
•
•
•
•
Sustainab
il
ity review
76
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Our emiss
ion sources
We aim to reach net zero emiss
ions
in our financed emiss
ions by 2050 and
in our Scope 1 and Scope 2 emiss
ions by 2025.
We focus on three areas to reduce emiss
ions:
Topics
Size of emiss
ions (%)
Emiss
ions sources
Learn more
Our
operations
0.1
Scope 1 and Scope 2:
Emiss
ions from the combust
ion of fuels in owned or controlled
sources e.g. boilers, generators and vehicles, refrigerat
ion and a
ir
condit
ion
ing equipment and the purchase of electric
ity
Page 77
Our supply
chain
1.5
Scope 3 Categories 1-14
:
Emiss
ions from our upstream and downstream supply and value
chain
Page 78
Our clients
98.4
Scope 3 Category 15:
Emiss
ions from transact
ing with our clients
Page 78
The following tables summarise our most recent performance:
Scope 1 and 2 emiss
ions
2024
(tCO
2
e)
2023
(tCO
2
e)
2022
(tCO
2
e)
Scope 1 emiss
ions
1, 3
7,696
8,488
2,071
Scope 2 emiss
ions
2, 3
17,272
26,246
47,363
Total Scope 1 and 2 emiss
ions
24,968
34,734
49,434
Scope 3 supply chain emiss
ions⁴:
2024
(tCO
2
e)
2023
(tCO
2
e)
2022
(tCO
2
e)
Category 1: Purchased goods and services (other)
5
345,193
346,819
380,732
Category 1: Purchased goods and services (data centres)
3
4,186
4,431
7,060
Category 2: Capital goods
43,716
42,707
34,496
Category 4: Upstream transportation and distr
ibut
ion
27,268
24,125
20,300
Category 5: Waste generated in operations
379
520
747
Category 6: Business travel (air travel)
6
53,326
48,046
39,107
Category 6: Business travel (miscellaneous other than air travel)
16,420
8,918
2,654
Category 7: Employee commuting
7
81,065
71,228
61,917
Category 13: Downstream leased assets (real estate)
7,119
7,898
8,594
Total Scope 3 supply chain emiss
ions
578,672
554,692
555,607
Scope 3 Category 15: Investments
8
2024
(tCO
2
e)
2023
(tCO
2
e)
2022
(tCO
2
e)
Financed emiss
ions⁹
36,410,000
42,330,000
49,872,000
Facil
itated em
iss
ions
1,761,000
3,007,000
4,025,000
Total Scope 3 Category 15 emiss
ions⁹
38,171,000
45,337,000
53,897,000
Agriculture sector Scope 3 emiss
ions¹⁰
10,300,000
–
–
1
As we aim to improve our emiss
ions measurement and report
ing year-on-year, we have included leased vehicle fleet emiss
ions
in our Scope 1 data in 2024
(1,340 tCO
2
e) and fugit
ive em
iss
ions s
ince 2023 (3,877 tCO
2
e in 2024 and 5,266 tCO
2
e in 2023). 2022 data was not available for fugit
ive em
iss
ions
2
Scope 2 ind
irect em
iss
ions have been calculated us
ing the market-based approach as set out in the GHG protocol
3
Our Scope 1 and 2 emiss
ions and Scope 3 Category 1: Purchased goods and serv
ices (data centres) emiss
ions calculat
ions for the most recent reporting year were
independently assured by Global Documentation Ltd. The assurance scope in 2024 now includes the leased vehicle fleet and fugit
ive em
iss
ions
4
Scope 3 Category 3, Category 8, Category 9, Category 10, Category 11, Category 12 and Category 14 are not relevant for the Group due to the nature of our business,
products and services and operations. GHG emiss
ions assoc
iated with these categories are not deemed as relevant and/or material
5
We have restated our Scope 3 Category 1: Purchased goods and services emiss
ions data for the 2023 report
ing year from 286,304 tCO
2
e to 346,819 tCO
2
e due to one
of our largest suppliers (by spend) restating their publicly reported emiss
ions. The suppl
ier restatement is a result of improved data accuracy with
in
its calculations.
As underlying data evolves, we will refine our methodology to improve accuracy and align to evolving industry standards, for example data centre emiss
ions
categorisat
ion and appropr
iate emiss
ions allocat
ion
6
Page 61 of this report sets out the different reporting periods for the data in this table. This year, the reporting period for Category 6: Business travel (air travel) has
been adjusted from a 1 October 2023 to 30 September 2024 period to a 1 January 2023 to 31 December 2023 period, to align these emiss
ions w
ith those in Category
6: Business travel (miscellaneous other than air travel). While a change in reporting period does not require a restatement of prior reporting periods under the
GHG Protocol – Corporate Value Chain (Scope 3) Accounting and Reporting Standard, we have opted to restate 2023 from 60,279 tCO
2
e to 48,046 tCO
2
e to allow
a comparable period. We plan to complete a review of our air travel methodology in 2025
7
Category 7: Employee commuting includes both emiss
ions from commut
ing (67,035 tCO
2
e) and emiss
ions assoc
iated with home office working (14,030 tCO
2
e)
8
Category 15: Investments includes financed and facil
itated em
iss
ions and are measured on a one to two-year lag based on the ava
ilab
il
ity of third-party and client
data. Total Category 15 financed emiss
ions have been updated for fac
il
itated em
iss
ions for the o
il and gas sector which were reported separately for the first time
during 2024. Facil
itated em
iss
ions are calculated on a three year roll
ing average. Mortgage absolute financed emiss
ions were restated from 0.04 MtCO
2
e to
0.4 MtCO
2
e following a decimal place error in reporting in 2022 and 2023. Category 15 emiss
ions are rounded to the nearest 1,000 MtCO
2
e. Facil
itated em
iss
ions
values are calculated on a three-year rolling average
9
Excluding agriculture sector Scope 3 emiss
ions
10 During the year, the Group completed a sector-specif
ic basel
ine and target for the agriculture sector, the last high emitt
ing sector as defined by the NZBA
guidance. The baseline emiss
ions were calculated for the 2023 report
ing year using the Implied Temperature Rise (ITR) method, and a 2030 inter
im target has
been set against the 2023 baseline. The ITR method has been applied, which allows us to capture Scope 3, due to the complexit
ies of the value cha
in of the sector,
availab
il
ity of data and the nature of operation of our clients in the sector value chain. The decis
ion to
include Scope 3 emiss
ions of the Group’s agr
iculture clients
was tacit as this has the most real-world impact, by allowing the Group to engage with its clients to decarbonise their operations and supply chains. On an
absolute emiss
ion bas
is the agriculture portfolio has 1.2 MtCO
2
e in its Scope 1 and 2 emiss
ions and a further 10.3 MtCO
2
e in its Scope 3 emiss
ions, g
iv
ing the sector
11.5 MtCO
2
e in total (see Agriculture in ‘Detailed progress against our sectoral financed emiss
ion targets’) . In pr
ior years, the Scope 1 and 2 emiss
ions of the Group’s
agriculture clients were included with
in the Category 15 absolute financed em
iss
ions,
in the “Others” category. Agriculture Scope 3 emiss
ions were not
included in
prior year numbers because the sector deep dive had not occurred and scope 3 is generally not calculated for the agriculture sector. As such, the Scope 3 emiss
ions
of 10.3 MtCO
2
e are not included in the Total Scope 3 Category 15 emiss
ions above as th
is would not be comparable to prior years
77
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
This section covers our Scope 1 and Scope 2
emiss
ions as defined on page 76
Our approach to managing our environmental footprint
The Group defines and aims to achieve net zero in line with
ISO IWA 42 as a condit
ion
in which human-caused residual
GHG emiss
ions are balanced by human-led removals over a
specif
ied per
iod and with
in spec
if
ied boundar
ies whereby
residual emiss
ions are those GHG em
iss
ions that rema
in after
taking all possible actions to implement emiss
ions reduct
ions.
Our approach is to prior
it
ise the direct reduction of Scope 1
and 2 emiss
ions by:
1.
Using effic
iency measures across our property portfol
io to
actively reduce our energy consumption
2.
Purchasing renewable energy, either through on-site
installat
ions or power purchase agreements
3.
Purchasing energy attribut
ion cert
if
icates/renewable
energy certif
icates – where poss
ible in the same regions
where energy is consumed. This is reinforced by our
commitment to purchasing 100 per cent renewable
electric
ity by 2025 when we joined RE100¹
in 2022.
We counterbalance any residual Scope 1 and 2 emiss
ions by
purchasing and retir
ing carbon cred
its as described in the
offsets section below.
Progress in 2024
We reduced our Scope 1 and 2 emiss
ions by 28 per cent to
24,968 tCO
2
e during 2024.
Scope 1
This year, we were able to expand the Scope 1 emiss
ions
that we capture to include emiss
ions from our veh
icle fleet.
Our fuel emiss
ions are mostly due to the use of back-up d
iesel
generators, which are operated when regular power supplies
from the grid are disrupted – which happens frequently in
some markets (for example, Niger
ia and Pak
istan). We are
using biod
iesel and b
iofuels in markets when they become
available (for example, Hong Kong, Singapore and India).
Scope 2
We reduced our Scope 2 emiss
ions by 34 per cent
in 2024.
This is partially due to our measured real estate decreasing
by 3.4 per cent during this time, as we continually right-size
and adjust our portfolio size to suit our operation.
We have also actively sought to increase the proportion of
our electric
ity usage that comes from a renewable source to
77 per cent this year. This can take the form of power purchase
agreements, clean energy contracts, on-site solar installat
ions
or renewable energy certif
icates.
We continue to work towards purchasing renewable energy
in every country possible and are striv
ing to meet our target
of 100 per cent by 2025. However, due to market constraints
and lack of renewable energy options in some markets with
in
Africa and the Middle East (for example, Bahrain, Botswana,
Ghana, Iraq and Tanzania), we may not be able to meet our
RE100
1
aspirat
ion
in 2025. We also have some countries where
we purchase renewables through ‘cross-border’ grid feeds,
which is recognised for our net zero target, but not recognised
by RE100.
Despite this, we remain committed to the in
it
iat
ive, however,
acknowledging that market constraints may lim
it our ab
il
ity
to achieve these goals in the short/mid-term, financ
ial or other
constraints may reasonably prevent the Group from taking all
available steps to meet the target.
Offsets
We have purchased and retired carbon credits to mit
igate
our residual operational Scope 1 and 2 emiss
ions for 2024 and
Scope 3 emiss
ions assoc
iated with air travel and outsourced
on-premise data centres. Our carbon credit portfolio includes
a range of decarbonisat
ion act
iv
it
ies that result in both
removal and reduction of atmospheric methane and carbon
diox
ide, w
ith the major
ity be
ing for carbon diox
ide removal.
The projects we sourced were selected based on criter
ia such
as integr
ity, prox
im
ity to our operat
ions, and co-benefits.
For 2024, the relevant projects were issued by Verra, Gold
Standard and Puro Earth.
Waste
We aim to achieve 90 per cent avoidance of landfill by 2030.
In 2024, we reduced our overall waste generated by
18 per cent and achieved 61 per cent avoidance of landfill
(up from 52 per cent in 2023). Our sites in India, Kenya and
Poland achieved TRUE Zero Waste programme platinum
rating. We are single-use plastics free in 324 locations
currently. We have also engaged with an NGO to upcycle
hard-to recycle items and are min
im
is
ing electron
ic waste
by prolonging the lifespan of our technology assets through
partnerships with third parties.
Water
We retained a water effic
iency metr
ic of 0.53 kilol
itres per
square metre in 2024 despite a 39 per cent increase in the
proportion of our employees returning to the office. While
water availab
il
ity is a growing challenge in many of our
markets, we did not face any issues sourcing potable water
in 2024. We continue to seek to take a responsible approach
to managing water use across the Group.
For detailed environmental performance data see our ESG data
pack at
sc.com/esg-data-pack
Read the princ
iples and methodology for measur
ing our environment
data at
sc.com/environmentcriter
ia
Read the independent assurance statement related to Scope 1 and 2
GHG emiss
ions at
sc.com/environmentalassurance
Our operations
1
RE100 is a global corporate renewable energy in
it
iat
ive br
ing
ing together bus
inesses that are committed to purchasing 100 per cent renewable electric
ity
78
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
This section covers our Scope 3 Category
1–14 emiss
ions.
Our approach to managing impacts in our upstream
value chain
The Supply Chain Management team provides procurement
services internally to drive commercial value generation and
manage sustainab
il
ity and supply chain risks. Proactive
supplier engagement and data quality remain a key focus
of our supply chain sustainab
il
ity strategy as we continue to
engage constructively with suppliers to increase transparency
and accountabil
ity around cl
imate impact, and to promote
emiss
ions reduct
ions.
Supplier Charter and engagement
Through our Supplier Charter, we set out the princ
iples that
Standard Chartered expects from its suppliers, and those
with
in the suppl
iers’ sphere of influence that assist them in
performing their obligat
ions for us. These pr
inc
iples have been
drawn from the internat
ional organ
isat
ions and convent
ions
of which we are members or signator
ies.
We engage our largest suppliers to better understand where
they stand on climate impact matters. Through supplier
questionna
ires and d
irect engagement, we request our larger
suppliers (by spend) to share their emiss
ions
informat
ion
and/or to set reduction targets in line with our internal
reduction goals. We aim to direct at least 50 per cent of our
total spend
1
to suppliers who have set science-based emiss
ion
reduction targets.
We look for opportunit
ies for
innovat
ion and collaborat
ion
with our suppliers on shared sustainab
il
ity goals. For example,
in 2024 we partnered with one of our global technology
suppliers to reduce the GHG emiss
ions from across our supply
chain by creating a standard package for each monitor we
purchase while excluding monitor stands. This approach
enabled us to reduce the emiss
ions of sh
ipp
ing unnecessary
monitor stands, cabling and plastic packaging.
Supply chain emiss
ions
Over time, the accuracy and coverage of suppliers’ emiss
ions
calculations have been improv
ing. Desp
ite this, lim
itat
ions to
the availab
il
ity of this data remain. Therefore, we continue to
use a hybrid methodology for emiss
ions calculat
ions which
combines emiss
ions data collected from vendors (when
available) with supplier spend and sector average emiss
ions
data for those who are unable to report. In 2024, we engaged
with our suppliers to collect supplier specif
ic data to
improve
the quality of our reporting. This resulted in an increase
from approximately 24 to 32 per cent of supplier-specif
ic
data collected, either via questionna
ires or CDP responses.
Consequently, we have restated Scope 3 Category 1
Purchased goods and services emiss
ions data for the
2023 reporting year (based on 2022 data).
In collaboration with DHL, one of our largest logist
ics suppl
iers,
we coinvested in sustainable aviat
ion fuel to reduce em
iss
ions
related to the shipment of our parcels. We mainta
in travel
demand measures and continue to offset air travel emiss
ions
as described on page 77. As data accuracy increases, we
will be better able to understand and act upon the key
contributors to our impact and determine further
opportunit
ies for reduct
ions.
Lim
itat
ions
Supply chain emiss
ions calculat
ions are evolving and remain
heavily dependent on supplier-provided informat
ion. As part
of our continuous improvement process, we will continue
to work with our suppliers on data quality and our own
internal stakeholders to continually improve and enhance
our Scope 3 emiss
ions report
ing accuracy. This includes the
accuracy of ind
iv
idual supplier category mapping to the
appropriate emiss
ions calculat
ion factor. As underlying data
evolves, we will refine our methodology to improve accuracy
and align to evolving industry standards; for example,
data centre emiss
ions categor
isat
ion and appropr
iate
emiss
ions allocat
ion.
Our Supplier Charter can be viewed at
sc.com/suppliercharter
For further informat
ion on how we engage w
ith suppliers see
page 37
and for supplier spend data see our ESG data pack at
sc.com/esg-data-pack
1
Spend includes Scope 3 Category 1: Purchased goods and services and
capital goods suppliers excluding non-addressable spend. Addressable
spend is defined as external costs incurred by Standard Chartered in the
normal course of business where Supply Chain Management has influence
over where the spend is placed. It excludes costs such as government and
brokerage fees, rates and taxes and employee expenses. It also excludes any
Category 1 co-location data centres which are calculated on energy use and
reported separately under Scope 3
Our suppliers
This section covers our Scope 3 Category 15
emiss
ions (financed and fac
il
itated em
iss
ions).
The majority of our GHG em
iss
ions are l
inked to our lending
activ
it
ies, known as financed emiss
ions. We have pr
ior
it
ised
our efforts in the highest-emitt
ing sectors of our portfol
io, and
where working with our clients can have the greatest impact.
Our carbon accounting is calculated and reported in line with
the GHG Protocol and PCAF Standards.
The Group has now set a target for its agriculture portfolio.
With the addit
ion of th
is sector, the Group has now set and
disclosed science-based inter
im 2030 financed em
iss
ions
targets for our 12 highest-emitt
ing sectors. We are work
ing
across our businesses and functions and, alongside our clients,
aim to deliver these targets, notwithstand
ing the challenges
presented by a material portion of our markets not having a
commitment to achieve net zero by 2050.
For further informat
ion, please refer to the Group’s ‘Net Zero
Methodological White Paper – The journey continues’ via
sc.com/sustainab
il
ityl
ibrary
Our clients
79
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
First included in analysis
2021
2022
2023
2024
Thermal
coal min
ing
Agriculture
Commercial real
estate
Resident
ial
mortgages
Alumin
ium
Cement
Steel
Oil and gas
Power
Automotive
manufacturers
Shipp
ing
Aviat
ion
Setting science-based targets
This year, the Group has set a baseline and target for
agriculture. With the addit
ion of th
is sector, the Group
has now set and disclosed science-based inter
im 2030
financed emiss
ions targets for our 12 h
ighest-emitt
ing sectors.
In addit
ion to sett
ing our final financed emiss
ions sector
target, a facil
itated em
iss
ions target was set dur
ing the year
for oil and gas, which currently makes up the major
ity of
emiss
ions w
ith
in our fac
il
itat
ion portfolio.
The Group has also resumed reporting on the aviat
ion
sector following the sale of the Group’s aircraft leasing
business and a sign
ificant port
ion of the lending business
associated with this.
The Group’s targets have been informed by pre-eminent,
scient
ific forward-look
ing scenario providers. This includes
the IEA for energy sectors, the Miss
ion Poss
ible Partnership
(MPP) for metals and aviat
ion, the Internat
ional Marit
ime
Organizat
ion (IMO) for sh
ipp
ing and Carbon R
isk Real Estate
Monitor (CRREM) for the resident
ial real estate sector.
During 2024, the Group engaged our external assurance
provider to perform an ISRS 4400 (Revised) ‘Agreed upon
Procedure’ review to confirm whether our targets for thermal
coal, steel, oil and gas, power, automotive manufacturers,
shipp
ing, cement, alum
in
ium, and commerc
ial real estate
meet the long-term temperature goal of the Paris Agreement,
and are mathematically accurate in reference to the third-
party science-based scenarios.
Due to our footprint – with many emerging markets and
developing countries reliant on carbon-intens
ive
industr
ies –
our financed emiss
ions may
increase before they decrease.
However, our aim is to remain Paris aligned for our inter
im
targets and aligned to a science-based 1.5°C scient
ific
pathway by 2050.
Given our science-based approach, we will strive to update
our targets both as the scient
ific commun
ity updates its
reference scenarios and as data availab
il
ity improves.
The Agreed-Upon Procedures Report on our Intermediate Financed
Emiss
ions Targets can be accessed v
ia
sc.com/sustainab
il
ityl
ibrary
2030 financed
emiss
ions targets
2030 financed emiss
ions targets
80
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Detailed progress against our sectoral financed emiss
ions targets
2023
2
2022
2
Baseline
year
Sector
2023
Exposure in
scope ($bn)
Interim
2030 target
1
Absolute
emiss
ions
3
(MtCO
2
e)
Physical
intens
ity
Absolute
emiss
ions
3
(MtCO
2
e)
Physical
intens
ity
% change
cumulative
to baseline
Year
target set
Agriculture
4
7.8
2.2-2.4°C (11-19%)
11.5
2.72^ °C
na
4
na
4
2023
na
4
2024
Alumin
ium
0.1
6.1 t CO
2
e/tonne
alumin
ium (–)
0.1
3.28^ tCO
2
e/
tonne
alumin
ium
0.3
4.59
tCO
2
e/tonne
alumin
ium
2021
-42
2023
Automotive
manufacturers
3.2
66–100 gCO
2
/Vkm
(44 – 63%)
3.1
157^
gCO
2
/Vkm
2.8
165
gCO
2
/Vkm
2021
-12
2022
Aviat
ion
5
1.3
773 gCO
2
e/RTK
8
(33%)
1.2
782^ gCO
2
e/
RTK
na
5
na
5
2021
-32
2024
Cement
0.6
0.52 tCO
2
/tonne
cement (22%)
2.1
0.62^ tCO
2
/
tonne cement
3.5
0.66
tCO
2
/tonne
cement
2021
-8
2023
Commercial
real estate
5.0
19–39 kgCO
2
e/sq.m
(47 –74%)
0.1
58^ kgCO
2
e/
Sq.m
0.1
62
kgCO
2
e/sq.m
2021
-21
2023
Oil and gas
6.4
9.3 MtCO
2
e
(29%)
9.4^
na
9
10.3
na
9
2020
-28
2023
Power
5.2
0.17–0.28 tCO
2
/
MWh (46 –67%)
4.8
0.43^
tCO
2
/MWh
5.9
0.47
tCO
2
/MWh
2021
-17
2023
Shipp
ing
6
4.6
0% delta
0% delta
2.9
+3.2%^ delta
+8.2%^ delta
2.8
+11.8% delta
+16% delta
2021
-4
2022
Steel
0.5
1.4–1.6 tCO
2
/tonne
steel (22 –32%)
1.3
1.87^ tCO
2
/
tonne steel
2.0
1.97
tCO
2
/tonne
steel
2021
-9
2023
Thermal
coal min
ing
0.03
0.5 MtCO
2
e
(85%)
1.2^
na
9
1.6
na
9
2020
-64
2021
Others
7
45.4
na
10
8.5
na
10
12.6
na
10
na
10
na
10
na
10
CIB
WRB
2023
2
2022
2
Baseline
year
Sector
2023
Exposure in
scope ($bn)
Interim
2030 target
1
Absolute
emiss
ions
3
(MtCO
2
e)
Physical
intens
ity
Absolute
emiss
ions
3
(MtCO
2
e)
Physical
intens
ity
% change
cumulative
to baseline
Year
target set
Resident
ial
mortgages
11
68.4
29–32 kgCO
2
e/sq.m
(15 –23%)
0.41
36.04^
kgCO
2
e/sq.m
0.43
37.7
kgCO
2
e/sq.m
2021
-4
2023
1
An Agreed Upon Procedure review was performed by EY over the Group’s
net zero targets except for aviat
ion, agr
iculture and resident
ial mortgages.
Procedures included confirm
ing a net zero target had been set, that the
scenarios used to set net zero targets are from credibleth
ird-party sources
as recommended by the NZBA and the selected scenarios align to the
quantitat
ive temperature goal of art
icle 2(1)a of the Paris Agreement
2
Due to third-party data sets that feed into our emiss
ions calculat
ions, the
Group’s reported financed emiss
ions figures have a one to two-year lag
depending on when third-party data providers release their data refresh
3
Emiss
ions are calculated
in CO
2
except where other GHGs are material which
are noted as CO
2
e (this includes agriculture, alumin
ium, av
iat
ion, commerc
ial
real estate, oil and gas, shipp
ing, thermal coal m
in
ing and res
ident
ial mortgages)
4
During the year a sector-specif
ic deep d
ive was performed on the agriculture
sector, the last highest-emitt
ing sector as defined by the NZBA. The basel
ine
emiss
ions have been measured and a target set for the 2023 year of report
ing
5
Aviat
ion em
iss
ions report
ing was resumed in 2024 following the sale of the
Group’s aircraft leasing business and a sign
ificant port
ion of the lending
business associated with this, during 2023. No 2022 emiss
ions value has been
measured this year.
6
During the year the Poseidon Princ
iples were updated to only requ
ire reporting
against the ‘min
imum’ and ‘str
iv
ing’ scenar
ios. Reporting against the old IMO
exist
ing strategy has been d
iscont
inued. Progress
is reported on the revised
min
imum strategy cons
istent with prior year
7
Others includes miscellaneous non-high-emitt
ing sectors not
included in a
sector deep dive
8
RTK (revenue tonne-kilometre) is a measure of annual passenger and cargo
aircraft traffic representing the metric tonne of revenue load carried one kilometre
9
Value is not required as the Group has set an absolute emiss
ions target and
therefore the production intens
ity of the portfol
io has not been measured
10 Value is not required as the Group has not set a target for the ‘others’ sector
11 The Group has set its resident
ial mortgage target range at the most amb
it
ious
end of the public commitments made by governments and power companies
in the countries where we operate, and has been benchmarked to the CRREM
scient
ific pathway. Pr
ior year absolute emiss
ions have been restated from 0.04
to 0.4 MtCO
2
e following a decimal place error in reporting in 2022 and 2023.
Reporting for resident
ial mortgages
includes Hong Kong, Singapore, Taiwan
and South Korea. These markets make up the majority of the em
iss
ions
in our
resident
ial mortgages portfol
io
Values noted with a caret symbol (^) are subject to independent lim
ited
assurance by EY. The report is available at
sc.com/sustainab
il
ityl
ibrary
For further informat
ion, please refer to our ‘Net Zero Methodolog
ical
White Paper – The journey continues’ publicat
ion v
ia
sc.com/sustainab
il
ityl
ibrary
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– Annual Report 2024
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il
ity review
Our approach to measuring financed emiss
ions
Sector
Emiss
ions
approach
Scenario
Value chain
Scope of
emiss
ions
2023
PCAF
score
2022
PCAF
score
In scope
exposure
coverage
1
Agriculture
Implied
temperature
rise (ITR)
IPCC
(1.5C
–
2C)
Full value chain
(pre-farm and post-farm)
1, 2
2.7
2
na
82%
3
4.7
3
na
Alumin
ium
Production
intens
ity
MPP STS
Alumin
ium producers
1, 2
1.2
2.4
100%
Automotive
manufacturers
Physical
intens
ity
IEA APS and NZE
Automotive manufacturers
1, 2
2.3
2
2.2
2
100%
3
5.0
3
5.0
3
Aviat
ion
Physical
intens
ity
MPP Prudent
Aircraft operators
1
2.0
2
na
100%
3
2.0
3
na
Cement
Production
intens
ity
IEA NZE
Clinker and
cement manufacturing
1, 2
2.3
2.3
100%
Commercial
real estate
Physical
intens
ity
IEA APS and NZE
Real estate leasing
1, 2
4.0
4.0
100%
Oil and gas
Absolute
emiss
ions
IEA NZE
Upstream, midstream and
downstream
1, 2
3.2
2
3.2
2
98%
3
3.2
3
3.2
3
Power
Production
intens
ity
IEA APS and NZE
Electric
ity generat
ion
1, 2
3.4
3.3
100%
Shipp
ing
Physical
intens
ity
IMO rev. min. IMO
striv
ing
Shipp
ing lessors and
companies
1, 3
1.0
1.0
99%
Steel
Production
intens
ity
MPP TM
Steel producers
1, 2
3.3
3.8
100%
Thermal coal
min
ing
Absolute
emiss
ions
IEA NZE
Thermal coal
1, 2
3.9
2
3.7
2
100%
3
3.0
3
3.0
3
Others
Absolute
emiss
ions
IEA NZE
Other sectors
1, 2
3.1
3.3
86%
Resident
ial
mortgages
Physical
intens
ity
CRREM
Resident
ial households
1, 2
4.4
4.4
100%
Sector emiss
ions for mater
ial Scope 3 high-emitt
ing sectors
2023 (MtCO
2
e)
2022 (MtCO
2
e)
2021 (MtCO
2
e)
Sector
Scope 1, 2
Scope 3
Scope 1, 2
Scope 3
Scope 1, 2
Scope 3
Agriculture
1.2
10.3
na
na
na
na
Automotive manufacturers
0.1
3.0
0.1
2.7
0.1
3.2
Oil and gas
1.5
7.9
1.7
8.6
1.3
8.9
Thermal coal min
ing
0.1
1.1
0.1
1.5
0.1
2.2
1
In scope exposure falls below 100 per cent in instances where client data is not available, and the carbon calculation cannot be run
2
PCAF score for Scope 1 and 2 emiss
ions
3
PCAF score for Scope 3 emiss
ions
For further informat
ion, please refer to our ‘Net Zero Methodolog
ical White Paper – The journey continues’ publicat
ion v
ia
sc.com/sustainab
il
ityl
ibrary
CIB
WRB
82
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– Annual Report 2024
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il
ity review
Agriculture
Alumin
ium
Balance
in scope
Interim target
Performance
versus baseline
$7.8bn
2.2 -2.4°C
newly set
Sector background
The agriculture sector accounts for 20 per cent of global
anthropogenic
1
emiss
ions per the World Bus
iness Council for
Sustainable Development (WBCSD) with an extensive value
chain from fertil
iser to reta
il stores.
Emiss
ions ar
ise from inputs such as fertil
iser, crops and l
ivestock
(includ
ing methane from rum
inant portfolios), and from the
distr
ibut
ion and processing of farm products.
Approach to achiev
ing net zero targets
•
Tracking our clients who do not have commitments, engaging
and actively working with those clients to advise on getting
their journey started and targets set
•
Encouraging our clients to use renewable energy and improve
energy efficiency
•
Improving traceabil
ity and labell
ing for sustainable products
•
Reduce food loss in processing, especially in developing
economies
Baseline target and portfolio progress 2023 to 2030
2.0°C scope 1,2 and 3 scenario
1.5°C scope 1,2 and 3 scenario
Baseline
2.72
2.4°C
2.2°C
2023
3.00
2.50
2.00
1.50
Implied Temperature Rise (ITR) score*
24
25
26
27
28
29
2030
-11% to -19%
Progress in the year
An agriculture sector baseline and target was measured and
reported for the first time during 2024.
A temperature alignment target has been set reflecting the
complexity of the agriculture value chain, as well as the divers
ity
of the Group’s clients in that value chain that include activ
it
ies
from fertil
iser, through farm
ing, up to and includ
ing food
processors, wholesalers and traders (noting that the Group
does not have a ruminants book of any material
ity).
A range target was set for the sector using a well below 2°C and
1.5°C pathway which include Scope 1, 2 and Scope 3 emiss
ions to
ensure the most impact.
This places an emphasis on the larger corporates with
in the
value chain to drive change, which includes engagement with
their suppliers to decarbonise their Scope 3 emiss
ions, hence
where the Group believes the greatest impact can be achieved.
Balance
in scope
Interim target
Performance
versus baseline
$0.1bn
6.1 tCO
2
e/tonne
alumin
ium
-42%
Sector background
The production of alumin
ium
is emiss
ions
intens
ive and
is
responsible for 1 per cent of energy-related emiss
ions per IEA
WEO, 2024
2
.
The alumin
ium sector rel
ies heavily on electric
ity from the local
grid. Over 60 per cent of the sector’s emiss
ions are attr
ibutable
to the electric
ity consumed dur
ing smelting for the electrolytic
reduction process.
Approach to achiev
ing net zero targets
•
Promoting electric
ity decarbon
isat
ion and engag
ing clients
to uptake renewable energy power purchase agreements
•
Reducing direct emiss
ions through electr
if
icat
ion, fuel
switch
ing and use of carbon capture, ut
il
isat
ion and storage
(CCUS)
•
Incentiv
is
ing recycling and resource effic
iency wh
ich has a
sign
ificantly lower product
ion intens
ity
Baseline target and portfolio progress 2021 to 2030
Portfolio progress
MPP STS
Baseline
5.62
3.28
4.59
6.1
2021
9
8
7
6
5
4
3
2
1
0
Emiss
ion
intens
ity
(tCO
2
e / Tonne Alumin
ium)
22
23
24
25
26
27
28
29
2030
Progress in the year
The production intens
ity for the alum
in
ium portfol
io has declined
from 4.59 tCO
2
e/tonne alumin
ium to 3.28 tCO
2
e/tonne
alumin
ium, a decrease of 29 per cent year-on-year.
This was driven by increased lending issued to alumin
ium
producers who util
ise a h
igh percentage of scrap with
in the
ir
production process moving the overall intens
ity of the portfol
io
down, given the lower intens
ity of these cl
ients.
Scrap results in avoided electric
ity use from the electrolys
is phase
of production with emiss
ions only produced from the collect
ion,
transport and smelting of recycled alumin
ium.
The Group remained well below our 2030 target because of
balances of recycled alumin
ium cl
ients, which we aim to expand
in the future. We are further working with our primary alumin
ium
producers on their options for procurement of clean energy.
1
Anthropogenic emiss
ions are em
iss
ions caused by human act
iv
it
ies and
include energy-related emiss
ions from the burn
ing of fossil fuels, emiss
ions
from agriculture and land use change and emiss
ions from waste
2
Sector emiss
ions contr
ibut
ion as per the IEA’s WEO released
in 2024
On track
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– Annual Report 2024
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Automotive
Aviat
ion
Balance
in scope
Interim target
Performance
versus baseline
$3.2bn
66 – 100 gCO
2
/Vkm
-12%
Sector background
The automotive sector is a key sector for internat
ional supply
chains and the economy, with tailp
ipe em
iss
ions be
ing the
primary source of carbon emiss
ions from the sector.
Annually, the exhaust emiss
ions from passenger veh
icles
account for 8 per cent of global energy-related emiss
ions
per IEA WEO, 2024.
Approach to achiev
ing net zero targets
•
Encouraging fuel-switch and improv
ing fuel-efficiency as a
first step
•
Maxim
is
ing the electrif
icat
ion production of vehicles
•
Encouraging recycling and the circular economy in the
manufacturing process
Baseline target and portfolio progress 2021 to 2030
178
165
157
100
66
2021
255
240
225
210
195
180
165
150
15
30
45
60
75
90
105
120
135
Emiss
ion
intens
ity
(gCO
2
/ vkm)
23
24
22
25
26
27
28
29
2030
Portfolio progress
IEA APS
IEA NZE
Baseline
-44% to -63%
Progress in the year
The automotive manufacturers portfolio intens
ity, wh
ich is
based upon the CO
2
of tailp
ipe em
iss
ions per d
istance travelled,
has decreased 5 per cent year-on-year from 165 gCO
2
/Vkm to
157 gCO
2
/Vkm.
This is driven by ongoing financ
ing prov
ided to manufacturers
who are solely making EVs, especially in China, and the financ
ing
of manufacturers who are changing their production mix away
from internal combustion engines towards hybrid engines
and EVs.
The Group is actively monitor
ing and steer
ing the portfolio
towards those automotive manufacturers that have a higher
proportion of EVs in their overall vehicle production mix.
Balance
in scope
Interim target
Performance
versus baseline
$1.3bn
773 gCO
2
e/RTK
-32%
Sector background
The aviat
ion sector accounts for 2 per cent of global energy-
related emiss
ions per IEA WEO, 2024.
The majority of em
iss
ions ar
ise from the burning of aviat
ion fuels.
Approach to achiev
ing net zero targets
•
Encouraging our clients to scale up the production and use
of sustainable aviat
ion fuels to reduce em
iss
ions
•
Encourage the transit
ion of the global fleet to the most
fuel-efficient (new technology) a
ircraft
Baseline target and portfolio progress 2021 to 2030
1,152
782
773
2021
1,500
1,300
1,100
500
700
900
Physical intens
ity
(gCO
2
e/RTK)
23
24
22
25
26
27
28
29
2030
Portfolio progress
MPP Prudent
Baseline
-33%
Progress in the year
Aviat
ion sector em
iss
ions were reported for the first t
ime in 2021.
Following this, the Group’s aircraft operating leasing business
and a select portfolio of the lending business was sold during
2023. Due to this structural change in the Group’s portfolio
emiss
ions profile, report
ing of the aviat
ion sector was paused
await
ing final sale.
During 2024, reporting has been resumed. The target for the
sector has been updated, in line with the industry’s Pegasus
Guidel
ines launched
in 2023 and based on the revised MPP
Prudent scenario. Since the 2021 baseline, the emiss
ions
intens
ity
of the Group has decreased 32 per cent from 1,152 tCO
2
e/RTK
to 782 tCO
2
e/RTK primar
ily as a result of the a
ircraft portfolio
sales which removed older less-effic
ient a
ircraft from the
Group’s portfolio.
The Group’s emiss
ions
intens
ity
is on track to be in line with the
MPP Prudent scenario by 2030 given the major
ity of the portfol
io
funding new technology aircraft with improved fuel effic
iency
when compared with the current global market fleet.
On track
84
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Cement
Commercial real estate
Balance
in scope
Interim target
Performance
versus baseline
$0.6bn
0.52 tCO
2
/tonne
cement
-8%
Sector background
The cement sector contributes approximately 6 per cent towards
global energy-related emiss
ions per IEA WEO, 2024.
The primary source of the emiss
ions occurs dur
ing the
production process where a chemical reaction takes place
between limestone and heat.
Approach to achiev
ing net zero targets
•
Improving energy effic
iency of plants
•
Encourage clients to use alternative fuels such as waste and
biomass in the production process
•
Use of clinker substitutes
•
Financ
ing of electr
ic kiln technologies
Baseline target and portfolio progress 2021 to 2030
Portfolio progress
IEA NZE
Baseline
0.67
0.62
0.66
0.52
2021
0.75
0.70
0.65
0.60
0.55
0.50
0.45
0.40
0.35
0.30
Emiss
ion
intens
ity
(tCO
2
/ Tonne Cementit
ious product)
22
23
24
25
26
27
28
29
2030
-22%
Progress in the year
The cement portfolio intens
ity has dropped from 0.66 tCO
2
/
tonnes cement to 0.62 tCO
2
/tonnes cement, a decrease of
6 per cent year-on-year.
This is driven by increased lending to clients, with lower production
intens
it
ies seen from our clients as they improve on their energy
efficiency of the
ir plants in order to meet their targets.
In addit
ion to th
is, the Group has also increased our exposure
to lower-intens
ity cl
ients, which has resulted in the portfolio
average emiss
ions reduc
ing as well.
Balance
in scope
Interim target
Performance
versus baseline
$5.0bn
19 –39 kgCO
2
e/sq.m
-21%
Sector background
The commercial real estate sector contributed 2 per cent
towards global energy- related emiss
ions per IEA WEO, 2024.
Emiss
ions pr
imar
ily ar
ise from the operation of the build
ing and
to a lesser extent embodied emiss
ions related to
its construction.
Approach to achiev
ing net zero targets
•
The decarbonisat
ion of the power gr
ids which supply the
commercial build
ings financed.
•
Encourage fuel switch from fossil fuels to heat pumps
or direct electric
ity
•
Lending to retrofitt
ing ex
ist
ing bu
ild
ing stock to
improve
operational effic
iency by
install
ing better
insulat
ion, low-
energy appliances, effic
ient cool
ing and on-site battery and
thermal storage
•
Power purchase agreement of renewable electric
ity from
the local grid
Baseline target and portfolio progress 2021 to 2030
73
62
58
39
19
2021
80
75
70
65
60
55
50
45
0
5
10
15
20
25
30
35
40
Emiss
ion
intens
ity
(kgCO
2
e/sq.m floor area)
23
24
22
25
26
27
28
29
2030
Portfolio progress
IEA NZE
IEA APS
Baseline
-47% to -74%
Progress in the year
The commercial real estate portfolio intens
ity has decreased
6 per cent from 62 kgCO
2
e/sq.m to 58 kgCO
2
e/sq.m year-on-year.
The reduction is predominantly driven by decreases in the electric
ity
grid intens
it
ies in the markets where funded properties are located.
This follows our belief that energy decarbonisat
ion, wh
ich we are
actively persuing through our power target, has posit
ive
downstream impacts on other sectors.
In addit
ion to th
is, there has been some change in the location mix
of our portfolio as a whole, with an increase in exposure to build
ings
located in European countries which have lower-intens
ity electr
ic
ity
grids, and a relative decrease in exposure to higher-intens
ity
locations in ASEAN markets.
We continue to work with our clients to finance new and energy
efficient bu
ild
ings, but also w
ith power companies in their energy
supply decarbonisat
ion, wh
ich in turn benefits the commercial real
estate portfolio intens
ity.
On track
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Oil and gas
Power
Balance
in scope
Interim target
Performance
versus baseline
$6.4bn
9.3 MtCO
2
e
-28%
Sector background
The oil and gas sector’s production emiss
ions (
i.e., operations)
account for approximately 15 per cent (IEA Emiss
ions from O
il
and Gas Operations in Net Zero Transit
ions
1
) of global energy-
related emiss
ions, respect
ively.
Approach to achiev
ing net zero targets
•
Reducing Scope 1 and 2 production-based emiss
ions through
improvements in operational effic
iency, reduc
ing methane
leakages, venting and flaring
•
Encouraging investment in CCUS
•
Encourage and funding our clients’ evolution to greater gas
business, includ
ing l
iqu
id natural gas (LNG) term
inals and
renewables portfolios to supplement their exist
ing o
il business.
Baseline target and portfolio progress 2020 to 2030
Portfolio progress
IEA NZE
Baseline
10.3
9.4
10.2
9.3
2020
16
14
12
10
8
6
4
2
0
Absolute financed emiss
ions
(MtCO
2
e)
21
22
23
24
25
26
27
28
29
2030
13.1
-29%
Progress in the year
The oil and gas portfolio emiss
ions have decreased 9 per cent
year-on-year from 10.3 MtCO
2
e to 9.4 MtCO
2
e. The portfolio
exposure also decreased by 9 per cent from the prior year, driv
ing
down absolute emiss
ions
in the sector.
This has also been driven by a decrease in short-term trade
funding and greater lending to lower carbon intens
ive cl
ients
and technologies such as standalone LNG facil
it
ies.
We are encouraged to see improved methane abatement
practices from our clients, continued investment in renewable
portfolios and carbon capture technologies being brought
forward for funding which we are increas
ingly prov
id
ing.
Balance
in scope
Interim target
Performance
versus baseline
$5.2bn
0.17 – 0.28 tCO
2
/MWh
-17%
Sector background
The electric
ity and heat sector contr
ibuted 40 per cent towards
global GHG emiss
ions per IEA WEO, 2024. It
is projected that
global electric
ity demand w
ill continue to rise especially in
emerging markets and developing economies.
Approach to achiev
ing net zero targets
•
Mobil
is
ing lending towards renewable energy and other low
carbon power plant projects
•
Encouraging our clients to invest in renewable energy sources
to divers
ify the
ir generation mix
•
Partic
ipat
ing in JETPs to encourage our clients to decarbonise
their power supplies
•
Funding coal phase out in line with the IEA NZE pathway
Baseline target and portfolio progress 2021 to 2030
0.52
0.47
0.43
0.28
0.17
2021
0.55
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.05
0.10
0.15
Emiss
ion
intens
ity
(tonnes of CO
2
by megawatt hour)
23
24
22
25
26
27
28
29
2030
Portfolio progress
IEA APS
IEA NZE
Baseline
-46% to -67%
Progress in the year
The power portfolio intens
ity
is down 9 per cent year-on-year
from 0.47 tCO
2
/MWh to 0.43 tCO
2
/MWh with an increase in
exposure of 6 per cent.
Sign
ificant movements
in portfolio intens
ity
included:
•
Decreases in thermal coal power generation in the book due
to reducing exposures to coal power generation sources as
balances mature in line with contractual maturit
ies and as
mandated by our Posit
ion Statements on thermal coal
•
Increased lending to renewables projects and lower intens
ity
gas projects which continue to make up a greater proportion
of the financed power portfolio
•
Increases in lending to counterparties that had higher
percentages of nuclear and renewable generation
There is further a strong pipel
ine of lower-
intens
ity gas, power
plants and renewables projects due to start operations in the
future that are currently being funded.
1
Oil and gas sector operational emiss
ions contr
ibut
ion to global energy-
related emiss
ion per the IEA’s ‘Em
iss
ions from o
il and gas operations in
Net Zero Transit
ions’ publ
icat
ion released
in 2023
On track
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Shipp
ing
Steel
Balance
in scope
Interim target
Performance
versus baseline
$4.6bn
0% delta
-4%
Sector background
Shipp
ing
is key to facil
itat
ing global trade. The sector contributes
2 per cent of global energy-related emiss
ions per IEA WEO, 2024.
The sectoral emiss
ions predom
inantly arise from the combustion
of fuel in ships’ engines.
Approach to achiev
ing net zero targets
•
Engaging clients to invest in low carbon alternative fuels
and carbon capture technology to eventually achieve net
zero emiss
ions
•
Financ
ing new and more fuel-efficient sh
ips
•
Provid
ing trans
it
ion finance for dual fuel sh
ips
•
Holding clients accountable for effic
ient em
iss
ion pract
ices
such as sail
ing at eco speed
Baseline target and portfolio progress 2021 to 2030
+7.3%
+11.8%
+3.2%
2021
1
0.8
0.6
0.4
0.2
0.0
Relative emiss
ions
intens
ity
(gCO
2
e/dead weight tonne per nautical mile)
23
24
22
25
26
27
28
29
2030
Portfolio progress
IMO Revised Min
imum
IMO Striv
ing
Baseline
Progress in the year
During the year the alignment delta for the shipp
ing sector
improved sign
ificantly from 11.8 per cent to 3.2 per cent aga
inst
the revised min
imum scenar
io bring
ing the Group closer to
its
0 per cent alignment delta target by 2030.
Improvements in our alignment delta were posit
ively
impacted
by the introduct
ion of the CII regulat
ion during 2023. CII is an
operational effic
iency measure wh
ich requires ships to report their
carbon efficiency w
ith an associated rating of A to E. Vessels
require a rating of C- or better to avoid potential dis
incent
ives.
Decarbonisat
ion
is the next frontier for pric
ing
in shipp
ing
finance. Margins are no longer driven by risk versus reward, but
also by balancing climate alignment of both the company and
the asset into the equation.
The Group continues to finance both dual fuel and newer ships
that are more energy efficient, w
ith a focus on our clients setting
credible transit
ion plans w
ith ambit
ious targets.
Looking ahead, we are keen to observe the impact of the EU
Emiss
ions Trad
ing System (ETS) coming into effect in 2024,
especially for our clients who actively engage in European trade
and see how a carbon tax mechanism translates into next year’s
Poseidon reporting.
Balance
in scope
Interim target
Performance
versus baseline
$0.5bn
1.4–1.6 tCO
2
/tonne steel
-9%
Sector background
Steel is a crit
ical mater
ial. It is essential to the function
ing of the
global economy, from the production of the world’s vehicles and
household appliances to build
ings and
infrastructure. As such, the
steel sector is the largest source of industr
ial em
iss
ions and accounts
for roughly 7 per cent of global emiss
ions per IEA WEO, 2024.
Approach to achiev
ing net zero targets
•
Increasing client renewable electric
ity usage for electr
ic arc
furnace production
•
Increased scrap steel uptake through trade finance or use
of proceeds finance
•
Increased scrap collection and processing in local economies
•
Increased operational effic
ienc
ies to exist
ing Blast Furnaces
and Basic Oxygen Furnaces (BF-BOF)
Baseline target and portfolio progress 2021 to 2030
2.06
1.97
1.87
1.6
1.4
2021
2.15
2.05
2.10
2.00
1.95
1.90
1.85
1.80
1.75
1.30
1.35
1.40
1.45
1.50
1.55
1.60
1.65
1.70
Emiss
ion
intens
ity
(tCO
2
/ tonne crude steel)
23
24
22
25
26
27
28
29
2030
Portfolio progress
MPP TM regional
MPP TM
Baseline
-22% to -32%
Progress in the year
The steel sector emiss
ion
intens
it
ies for the Group’s portfolio
have reduced by 5 per cent year-on-year from 1.97 tCO
2
/tonnes
steel to 1.87 tCO
2
/tonnes steel. This was driven by increas
ing
lending to clients util
is
ing scrap steel, as opposed to those
util
is
ing iron ore in blast furnaces.
We further noted and are actively pursuing funding an
increased uptake of scrap steel use from some of our primary
steel producers, which will reduce their production intens
it
ies.
This is due to more steel output produced using electric
ity
rather than the burning of coal and gas to steel from iron ore.
The Group has also collected better informat
ion for the portfol
io
with fewer proxy-based emiss
ions reported result
ing in a better
portfolio intens
ity.
On track
87
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– Annual Report 2024
Sustainab
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ity review
Thermal Coal Min
ing
Resident
ial Mortgages
Balance
in scope
Interim target
Performance
versus baseline
$0.03bn
0.5 MtCO
2
e
-64%
Sector background
The burning of coal is one of the most sign
ificant dr
iv
ing factors
in climate change. To reflect this, the Group has a thermal coal
Posit
ion Statement proh
ib
it
ing the provis
ion of financial serv
ices
to certain clients dependent on thermal coal.
Emiss
ions ar
ise as Scope 1 and 2 emiss
ions for coal producers
(from energy used in the min
ing process) as well as Scope 3
emiss
ions from end-of-use products, be
ing the burning of coal
in upstream processes.
Approach to achiev
ing net zero targets
•
Rundown of thermal coal exposures in line with contractual
commitments
•
Offboarding of clients in line with the Group’s thermal coal
Posit
ion Statement
•
Partic
ipat
ing in our JETPs to encourage our clients to
decarbonise their power supplies
Baseline target and portfolio progress 2020 to 2030
3.3
1.6
2.3
1.2
0.5
2020
3.5
2.5
3.0
2.0
1.5
0.5
1.0
0
Absolute financed emiss
ions
(MtCO
2
e)
23
24
21
22
25
26
27
28
29
2030
Portfolio progress
IEA NZE
Baseline
-85%
Progress in the year
Thermal coal absolute emiss
ions have decreased by 25 per cent
from 1.6 MtCO
2
e to 1.2 MtCO
2
e.
This was due to the portfolio continu
ing to be pa
id down in line
with maturit
ies, w
ith no new loans issued during the period due
to the Group’s Thermal Coal Posit
ion Statement, wh
ich does not
allow lending to counterparties that are 80 per cent thermal coal
revenue reliant.
Please see the Group’s Posit
ion Statements for further deta
ils
at
sc.com/posit
ionstatements
Balance
in scope
Interim target
Performance
versus baseline
$68.4bn
29-32 kgCO
2
e/sq.m
-4%
Sector background
Resident
ial hous
ing contributed 5 per cent towards global
emiss
ions per IEA WEO, 2024. The res
ident
ial hous
ing sector
emiss
ions are pr
imar
ily from two sources: the operat
ion of the
build
ing and embod
ied emiss
ions (wh
ich are emiss
ions related
to its construction).
Approach to achiev
ing net zero targets
•
Increase lending to clients to improve energy effic
iency
through retrofitting and
improvement of insulat
ion,
ventilat
ion, and energy management
•
Collecting specif
ic un
it or build
ing em
iss
ions data w
ith
in the
portfolio, which reduces the need to use proxy data and
increases emiss
ion accuracy
•
Engaging with clients to decarbonise their electric
ity supply;
for instance, through the direct purchase of green electric
ity
or green certif
icates
Baseline target and portfolio progress 2021 to 2030
37.6
37.7
36.04
32
29
2021
40
35
30
25
20
15
10
5
0
Emiss
ion
intens
ity
(kgCO
2
e/sq.m floor area)
23
24
22
25
26
27
28
29
2030
CRREM
Baseline
2030 target (lower bound)
2030 target (upper bound)
-15%
23%
Progress in the year
During the year, the Group measured its 2023 progress of GHG
emiss
ions from the four ma
in resident
ial mortgage portfol
ios,
namely Hong Kong, South Korea, Singapore and Taiwan,
accounting for approximately 88 per cent of the Group’s
exposure. A physical intens
ity of kgCO
2
e/sq.m is the metric used
to measure the portfolio’s progress. While we have set a single
Group-level target, the very nature of the resident
ial real estate
market means all decarbonisat
ion act
ions will take place at
the local level. Achiev
ing our target
is dependent on actions
by local governments and power companies decarbonis
ing
power generation. The target range has been set at the
more ambit
ious end of the publ
ic commitments made by
governments and power companies in the countries where the
Group operates. These targets have been benchmarked to
, and currently sit above, the global CRREM pathway to 2030.
The portfolio intens
ity has decreased 4 per cent as we start
to see the emiss
ion
intens
ity of power gr
ids in these regions
beginn
ing to decrease
in line with our expectations.
On track
88
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– Annual Report 2024
Sustainab
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ity review
Facil
itated em
iss
ions
Sector
1
Interim
2030 target
Weight
ing
2023
MtCO
2
e
2022
MtCO
2
e
Baseline
MtCO
2
e
Baseline
year
Target set
year
% change cumulative
to baseline
Oil and gas
2.94 MtCO
2
e
(26.9%)
100% weight
ing
factor
2
1.76^
3.01
4.02^
2021
2024
-56%
33% weight
ing
factor
2
0.58
0.99
1.33
Values noted with a caret symbol (^) are subject to independent lim
ited assurance by EY. The report
is available at
sc.com/sustainab
il
ityl
ibrary
Sector
Emiss
ion approach
Scenario
Value chain
Scope of emiss
ions
2023 PCAF score
2022 PCAF score
In scope exposure
coverage
Oil and gas
Absolute
emiss
ions
IEA NZE
Upstream, midstream
and downstream
1, 2
2.9
3
2.6
3
92%
3
3.0
4
3.0
4
Oil and gas
Value facil
itated
5
Interim target
$0.77bn
2.94 MtCO
2
e
Progress in the year
During the year, a baseline and target were measured for the
oil and gas sector. A reduction target of 26.9 per cent from a
2021 baseline was set based on the IEA NZE scenario in line with
financed emiss
ions.
Emiss
ions assoc
iated with facil
itat
ion trended down between
2021 to 2023 as bond underwrit
ing volumes were low due to
COVID and higher corresponding interest rates.
Baseline target and portfolio progress 2021 to 2030
Portfolio progress
IEA NZE
Baseline
4.02
1.76
3.01
2.94
2021
6
4
2
0
Absolute facil
itated em
iss
ions
(MtCO
2
e)
22
23
24
25
26
27
28
29
2030
-27%
1
The metric and target are based on the rolling 3 year average due to the cyclical nature of bond underwrit
ing
in the market
2
Emiss
ions have been d
isclosed on a 100 per cent and 33 per cent weight
ing
3
PCAF score for Scope 1 and 2 emiss
ions
4
PCAF score for Scope 3 emiss
ions
5
Value facil
itated
is equal to the Group’s share of the Bond notional per the league table where we act as a bookrunner on the deal. Facil
itated value shown for the
2023 financial year
89
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Climate risk
An environmental (such as climate), social or governance
event, or change in condit
ion,
if it occurs, could result in actual
or potential financ
ial loss or non-financial detr
iments to the
Group. As such, Climate Risk is ident
ified as a mater
ial risk for
the Group, which is integrated across relevant Princ
ipal R
isk
Types (PRTs) and is managed via the Environmental, Social,
Governance and Reputational (ESGR) Risk policy framework.
The Group is exposed to Climate Risk through our clients, own
operations, vendors, and from the industr
ies and markets
in
which we operate in.
We manage Climate Risk according to the characterist
ics of
the impacted PRTs. Risk Framework Owners for the impacted
PRTs are responsible for embedding Climate Risk requirements
with
in the
ir respective risk types.
Our Climate Risk Appetite Statement is approved annually
by the Board and supported by Board Risk Appetite metrics
(BRAMs) and Management Team Lim
its (MTL) across
impacted risk types.
In 2024, we have continued to embed Climate Risk into
exist
ing r
isk management frameworks and processes. We
have also published our Transit
ion Plan, wh
ich articulates how
we plan to manage Climate Risk by aim
ing to del
iver on our
commitments to reach net zero emiss
ions
in our financed
emiss
ions by 2050, and
in our Scope 1 and 2 emiss
ions by 2025.
Short-term
0– 2 years
•
Our short-term time horizon aligns with our aim:
–
To be net zero in our Scope 1 and 2 emiss
ions by 2025
–
To scale annual sustainable finance income to at least $1 bill
ion by 2025
•
In line with the Group’s operational net zero target, we set year-on-year
improvement targets for our footprint markets. Climate Risk is considered as
part of our formal annual corporate strategy and financial plann
ing
process.
Medium-term
2 – 5 years
•
Our medium-term time horizon aligns with our inter
im 2030 targets set for
our 12 highest-emitt
ing sectors and our comm
itment to mobil
ise $300 b
ill
ion
of sustainable finance by 2030.
•
Our strategic and financ
ial plann
ing constitutes action plans that intend to
enable us to align to our net zero targets. We also use scenario analysis to
consider how risks and opportunit
ies may evolve under d
ifferent situat
ions
in the medium-term.
Long-term
5+ years
•
Our long-term time horizon aligns with our aspirat
ion to ach
ieve net zero in
our financed emiss
ions by 2050.
•
For climate scenario analysis, we run 30-year scenarios for both physical risk
and transit
ion r
isk, with some elements of our physical risk scenario analysis
extending to 2100.
•
Transit
ion r
isk as our clients move to lower emitt
ing revenues by v
irtue of
legislat
ion
is considered with reference to client transit
ion pathways and
manifests over a longer term than the maturity of the loan book up to 2050.
We consider physical and transit
ional cl
imate-related risk impacts in relation to our Wealth & Retail Banking and Corporate &
Investment Banking client segments, as well as in our own operations. Please refer to page 21 for further informat
ion relat
ing to
our client segment risks, and page 264 for risks ident
ified
in our own operations.
For further informat
ion on how we deal w
ith Climate Risk, please refer to the Risk review on
pages 256 to 269
For our approach to managing Climate Risk through transit
ion plann
ing, refer to our Transit
ion Plan at
sc.com/transit
ion-plan
For our TCFD disclosures, refer to the TCFD reporting index with
in the Strateg
ic report on
pages 43 to 44
Time horizons used to assess the likel
ihood and
impact of climate-related risks and opportunit
ies
The time horizons that we use to ident
ify, assess and manage our
ident
ified cl
imate-related risks and opportunit
ies are
as follows:
90
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Nature
Mobil
is
ing finance
for nature-posit
ive
outcomes
•
Closed the Group’s first debt conversion for nature project with The Government of The Bahamas,
unlocking $124 mill
ion
in savings for marine conservation. The savings will support The Bahamas in
effectively managing its extensive network of marine protected areas (MPAs), complete a national
Mangrove Management Plan, and develop and implement a Marine Spatial Plan. We were the sole
arranger, underwriter and liab
il
ity manager.
•
Expanded the Group’s 2024 GSPF to include addit
ional nature-related act
iv
it
ies informed by the GBF.
•
Published our latest sustainab
il
ity research, ‘Towards a sustainable ocean: where there’s a will, there’s a
wave’, highl
ight
ing opportunit
ies for financing the nature-pos
it
ive trans
it
ion of the blue economy.
•
Refer to the work done by our Nature Finance Innovation Hub on page 68 for more informat
ion.
Understanding
the material
ity
of nature loss
on the Group’s
activ
it
ies
•
Established a Nature Risk working group, compris
ing of cross-funct
ional teams, to advance our Nature
Risk analysis, leveraging our climate risk data to support more in-depth analysis of potentially material
sectors and assess our financed assets exposure to nature impacts and dependencies.
•
Undergoing assessment of the material
ity of our own operat
ions’ impacts and dependencies on nature.
•
Exploring ways to min
im
ise the environmental impact of our operations by reducing energy, GHG
emiss
ions, water usage and non-hazardous waste generated
in our operations (refer to page 77
for details).
•
Set out the expectations of our suppliers to reduce waste from their operations, through our Supplier
Charter includ
ing manag
ing environmental concerns in their own supply chains, and protecting the
environment and conserving natural resources, in compliance with all applicable environmental laws
and regulations.
•
Conducted an internal research project to better understand the Group’s potential exposure to the
proceeds of illegal deforestation and how the risk of illegal deforestation may manifest in our clients’
supply chains.
Supporting
collective action
to address
nature loss and
ecosystem decline
•
Engaged with market in
it
iat
ives and financial regulators to advance the nature finance ecosystem.
This includes our memberships in the UN Environment Programme Finance Init
iat
ive and Princ
iples for
Responsible Banking, Singapore Sustainable Finance Associat
ion Natural Cap
ital and Biod
ivers
ity
Workstream, African Natural Capital Alliance, Green Finance Institute’s TNFD UK Consultation Group,
WEF Biod
ivers
ity Credit Init
iat
ive, and the Global Islamic Finance Program.
•
Specif
ic focus on advanc
ing the sustainable blue economy through continued engagement with the
Ocean Risk and Resil
ience Act
ion Alliance, the UN Global Compact Ocean Investment Protocol Steering
Committee and the WWF Seafood Finance Working Group.
•
Contributed to nature finance related white papers from World Economic Forum
1
, Climate Financ
ial R
isk
Forum
2
, Cambridge Institute for Sustainab
il
ity Leadership
3
, and the Institute of International Finance
4
.
Build
ing
internal
capacity
•
Provided nature-related train
ing to the Culture and Susta
inab
il
ity Board Committee as well as to internal
functions, i.e. Climate Risk Analysts, Environmental and Social Risk Management (ESRM), ESGR and WRB.
•
Expanded exist
ing Nature R
isk capabil
ity, w
ith the hire of a Nature Risk Lead to further embed nature into
our risk polic
ies, procedures, frameworks, and d
isclosures (refer to page 68 for details); and to inform client
nature-posit
ive trans
it
ion opportun
it
ies.
1
‘Nature Finance and Biod
ivers
ity Credits: A Private Sector Roadmap to Finance and Act on Nature’, World Economic Forum, October 2024
2
‘Nature-related risk: Handbook for financ
ial
inst
itut
ions’, Climate Financ
ial R
isk Forum, October 2024
3
‘Scaling Finance for Nature: Barrier Breakdown’, Cambridge Institute for Sustainab
il
ity Leadership, October 2024
4
‘Responding to Nature-related Risks and Opportunit
ies’, Inst
itute of International Finance
In 2024, we published our inaugural Nature Posit
ion Statement
outlin
ing our approach to nature across our bus
iness, our
clients, operations and supply chains. We seek to contribute
to the 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
disclosures in alignment with TNFD recommendations from
2026 onwards (target 15); and (3) shift
ing financial flows
toward nature- posit
ive outcomes and contr
ibut
ing to
mobil
is
ing funding for nature and delivery of the GBF
(target 19). We are members of a wide range of industry
platforms working to increase industry awareness of the
relevance of nature considerat
ions to financial dec
is
ion-
making.
Our progress on nature
The in
it
iat
ives below represent the key h
ighl
ights of the
work undertaken in 2024 in relation to nature.
It is estimated that over half of global GDP is directly dependent upon nature. Despite this, nature
is rapidly declin
ing. At Standard Chartered, we acknowledge that protect
ing nature is essential to
lim
it
ing global warming and mit
igat
ing the effects of climate change, so that the planet can sustain
livel
ihoods as well as support
inclus
ive susta
inable economic development.
For a full list of our memberships and engagements vis
it
sc.com/sustainab
il
itystakeholders
Our Supplier Charter can be viewed at
sc.com/suppliercharter
Our Posit
ion Statements are ava
ilable at
sc.com/posit
ionstatements
Read our blue economy research paper at
sc.com/blue-economy
More informat
ion about the debt convers
ion for nature for the Bahamas is available at
sc.com/en/campaigns/bahamas-debt-for-nature
91
Standard Chartered
– Annual Report 2024
Sustainab
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ity review
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 soc
ially 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
essential services, and inclus
ive growth.
•
Through our philanthrop
ic commun
ity engagement:
we work to empower disadvantaged young people by
provid
ing them w
ith skills and networks and connecting
them with employment and commercial opportunit
ies.
The combinat
ion of these efforts underscores our hol
ist
ic
approach to creating long-term value for our clients,
colleagues and communit
ies. By
integrat
ing both commerc
ial
and philanthrop
ic asp
irat
ions to support our susta
inab
il
ity
work and our Stands, we aim to accelerate our progress and
amplify posit
ive soc
ial impact such as women’s empowerment
and financial
inclus
ion.
Our commercial activ
it
ies: investment in
social finance
We seek to partner with our clients and communit
ies to
mobil
ise soc
ial capital. Last year, we deepened our focus on
mobil
is
ing social finance by appoint
ing the Group’s first Head
of Social Sustainab
il
ity.
Empowering women-owned businesses
Women are key drivers of economic and social progress,
yet they continue to face sign
ificant challenges that often
lim
it the
ir full partic
ipat
ion in the global economy. These
challenges include systemic barriers such as unequal access to
education, lim
ited access to finance and financial resources,
and entrenched discr
im
inatory social norms.
As part of our business, we provide women and women-
owned businesses with the financ
ing they need. A cornerstone
of our commitment is our SC Women’s International Network
(SC WIN) banking proposit
ion, a un
ique offering designed
exclusively for women-owned businesses, that offers tailored
financial solut
ions, expert advisory services, and access to a
global network of like-minded business leaders. Since its first
launch in 2022, SC WIN has expanded its reach and is now live
in seven markets, namely India, Kenya, Malaysia, Singapore,
Hong Kong, Vietnam and Pakistan. SC Win has extended
more than $300 mill
ion of financing to women-owned
businesses since its first launch in November 2022.
To further our support, we launched a partnership with
We Connect International, an organisat
ion focused on
helping women-run companies to get into global supply
chains. Despite corporate commitments, less than 1 per cent
of all global procurement goes to women-owned companies,
and this number hasn’t changed in decades
1
. Through our
partnership, we aim to support women-owned companies
with the access to finance that they need to compete for large
global contracts. By bring
ing together our global trade bank
with our SC WIN offerings, we aim to support women-owned
business with both the short-term working capital solutions
and the long-term financing opt
ions that they need.
This year, we became the first global bank to sign the WE
Finance Code under the Women Entrepreneur Finance
Init
iat
ive across all of our banking centres. As signator
ies, we
aim to sex-disaggregate our own lending, and intend to work
throughout the ecosystem to share knowledge with our peers.
Supporting micro lending
We recognise the pivotal role of microlend
ing
in fostering
economic inclus
ion and susta
inable development.
Microlend
ing plays a v
ital role across our footprint in
supporting underserved communit
ies and creat
ing
opportunit
ies for growth. S
ince 2006, we have financed
microf
inance partners
in India, Bangladesh, Phil
ipp
ines, Nepal,
Pakistan, Kenya, Uganda, Tanzania and Niger
ia. In 2024, we
supported more than $725 mill
ion lend
ing to microf
inance
inst
itut
ions, enabling over 1.2 mill
ion borrowers to access loans.
These loans support a wide range of needs, from build
ing
small businesses to covering education costs or managing
unexpected emergencies.
Our philanthrop
ic act
iv
it
ies: investment
in community impact
Our philanthrop
ic approach a
ims to help bridge the often-
sign
ificant gap that prevents young people from access
ing
commercial products and services. Through community
partnerships, client partnerships and employee volunteering,
we aim to contribute towards more inclus
ive econom
ies and
increased equitable prosperity. Central to this effort is our
global youth economic empowerment in
it
iat
ive, Futuremakers
by Standard Chartered, which aims to help disadvantaged
young people, especially young women, access economic
opportunit
ies through employab
il
ity and entrepreneursh
ip
support. From 2019 to 2024, through Futuremakers, we
supported more than 53,000 young people to access decent
jobs and enabled more than 35,000 jobs through supported
microbus
inesses.
We continue to deepen and scale our impact, working with
leading NGO partners to deliver longer-term programmes.
Between 2024 and 2030, we aim to provide $120 mill
ion
in
Futuremakers with the intent to enable and support 140,000
decent jobs
2
, includ
ing 70,000 jobs accessed by young female
partic
ipants
3
and 70,000 jobs created through supported
microbus
inesses
4
.
1
‘Procurement’s strategic value: Why gender-responsive procurement makes business sense.’ UN Women, 2022
2
Decent jobs/employment comprises formal employment and self-employment. ‘Decent’ aligns with the ILO defin
it
ion, but in recognit
ion of the challenges
in many
markets to satisfy every criter
ia for ‘decent’, our Futuremakers
in
it
iat
ive counts those part
ic
ipants who have met m
in
imum wage plus at least two add
it
ional
ILO criter
ia
3
Young female partic
ipants rema
in in decent employment six months post intervent
ion
4
Direct jobs comprise paid employment opportunit
ies (d
irect employees, active associates, contractors, support/gig workers, and the entrepreneurs themselves)
directly created by the supported microbus
inesses. These may be part-t
ime or full-time, with each job accounted for as a single unit. This KPI will be based on
actual data collated from project alumni over the seven year period, robust estimates based on empir
ical research, and ex-post project evaluat
ions.
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ity review
In 2024, we have enabled and supported 20,675 decent jobs
1
and contributed $18.4 mill
ion to Futuremakers,
includ
ing
donations from the Group and fundrais
ing of $2.2 m
ill
ion
from our employees and partners.
Creating an inclus
ive ecosystem for decent work
Almost 60 per cent of young people not in employment,
education or train
ing (NEET) are
in the Group’s markets,
with young women twice as likely as young men to be NEET
2
.
Our Futuremakers employabil
ity programmes pr
ior
it
ise these
disadvantaged groups, especially women and people with
disab
il
it
ies, support
ing them to gain the skills and networks
to access decent jobs.
This year, with the Standard Chartered Foundation, we have
launched three-year employabil
ity programmes w
ith strategic
NGO partners, includ
ing the launch of the sports-based Goal
Accelerator programme in five markets – Malaysia, Maurit
ius,
Pakistan, Sri Lanka and the UK, in partnership with Women
Win. The programme aims to empower over 1,700 young
women with the life-skills, confidence and leadership
capabil
it
ies to enable them to access employment, generate
a decent income and become economically resil
ient.
To improve employabil
ity for people w
ith disab
il
it
ies v
ia
Futuremakers, we established a disab
il
ity inclus
ion roadmap
with Sightsavers, one of our strategic NGO partners, to test
innovat
ive models
in Ghana, Kenya, Pakistan, Tanzania,
Uganda, and Zambia. This in
it
ial roadmap will provide
ins
ights to gu
ide us in facil
itat
ing disab
il
ity inclus
ion
in all
our programmes.
Through these and other investments, in 2024, over 24,000
partic
ipants (58 per cent women and 9 per cent people w
ith
disab
il
it
ies) have establ
ished an employment plan, a key early
milestone in their employabil
ity journey.
In some of our markets, we support community healthcare,
climate, education and agricultural livel
ihood projects.
In 2024, for example, we supported eye health, WASHE
(water, sanitat
ion and hyg
iene education), education and
youth employabil
ity projects
in India, includ
ing the open
ing
of the fourth academy to promote primary eye care and
train women to become optometrists.
Unlocking the potential of microbus
inesses
Research by the International Finance Corporation
suggests that there is a $173 bill
ion financing gap for female
microbus
inesses
in lower and middle-income countries
3
.
Our Futuremakers entrepreneurship programmes support
young entrepreneurs, mainly women, to achieve business
growth, build green and social microbus
inesses, and create
much needed jobs in their communit
ies.
Through the Futuremakers Women in Tech accelerator, we
enabled female microentrepreneurs in Africa, the Middle East
and the US to acquire the skills, resources, and networks they
need to start and grow their businesses. We have committed
$600,000 as part of a catalytic financ
ing fund to support
eight high-potential tech-enabled businesses run by our
Women in Tech alumni.
In 2024, with the Standard Chartered Foundation, we have
launched three-year entrepreneurship programmes with
our strategic NGO partners and supported more than
14,000 microbus
inesses to establ
ish a business growth plan,
a key milestone in their entrepreneurship journey.
Measuring broader societal impact
To better understand the broader impact of our Futuremakers
investments, we have developed a refreshed approach to
impact measurement that builds on the direct outcomes of
our programmes to quantify the broader contribut
ion to
society. Using the model, and applying the results achieved
in 2024, we found that more than 110,000 lives are estimated
to have been impacted by Futuremakers. We antic
ipate
that the ins
ights from th
is analysis should enable us to
optim
ise how we allocate Futuremakers resources to enhance
impact potential, as well as extend our learnings to our peers
and partners.
Promoting skills-based volunteering
We have also sought to scale the impact of volunteering by
strengthening skills-based volunteering. In 2024, 53 per cent
of colleagues volunteered to support various philanthrop
ic
causes and 114,276 hours were contributed to skills-based
volunteering which ranged from provis
ion of financial
education to local schools to coaching and mentoring
Futuremakers partic
ipants. In 2025, we a
im to further embed
skills-based volunteering opportunit
ies
into Futuremakers,
leveraging our colleagues’ unique skill sets to further deepen
our community impact.
Charitable giv
ing
2024
$mill
ion
2023
$ mill
ion
2022
$mill
ion
Cash contribut
ions
47.9
31.2
23.7
Employee time
(non-cash item)
25.7
28.7
17.5
Gifts in-kind (non-cash item)
4
0.5
0.4
0.3
Management costs
5.2
5.4
5.0
Total (direct contribut
ions
by Group)
79.3
65.7
46.5
Leverage
5
2.7
2.9
4.8
Total (includ
ing leverage)
82.0
68.6
51.3
Percentage of prior year
operating profit (PYOP)
1.6
1.6
1.5
1
The data includes 7,425 young female partic
ipants
in decent employment, where partic
ipants rema
in in decent employment six months post intervent
ion,
and 13,250 direct jobs enabled by supported microbus
inesses
2
‘Global Employment Trends for Youth 2022: Investing in transforming futures for your people.’ Geneva: ILO, 2022
3
‘MSME Finance Gap Report’, International Finance Corporation, 2017
4
Gifts in-kind: In-kind contribut
ions of products, property or serv
ices valued at the cost to the Group
5
Leverage: fundrais
ing from employees and partners benefitting the commun
ity
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Sustainab
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Our cross-sector Environmental and Social Risk Management
(ESRM) Framework helps us apply internat
ional standards
and best practices across all our markets. In the frontline,
our ESRM team with
in the CSO organ
isat
ion oversees the
management of environmental and social risks associated
with our client relationsh
ips.
For further informat
ion please refer to our ESRM Framework
at
sc.com/esriskframework
Our approach is embedded into our credit approval process
and supports us to work with our stakeholders to ident
ify,
manage, mit
igate and mon
itor the potential impacts that
stem from our financing dec
is
ions.
Our Posit
ion Statements, approved by the GRRRC, outl
ine the
cross-sector and sector-specif
ic cr
iter
ia we apply to assess
whether to provide financ
ial serv
ices to our clients.
We use these statements – which draw on International
Finance Corporation Performance Standards, the Equator
Princ
iples and global best pract
ice – to assess environmental
and social risk related to our financ
ing.
We reviewed 1,449 clients and 747 transactions that presented
potential for elevated environmental and social risk in 2024.
If we find a material environmental and social issue, we take
steps to proactively engage the client to mit
igate
ident
ified
risks and impacts, and support and guide our clients to
improve their environmental and social performance
over time.
However, for clients who do not meet our Posit
ion Statement
criter
ia, we may look to w
ithdraw financ
ial serv
ices and exit
the relationsh
ip
if we cannot work with them to align over an
agreed time frame.
In 2024, we completed the review and update of our Human
Rights Posit
ion Statement.
During the year, we evolved our approach to Nature Risk
assessment. This included a loan book analysis to ident
ify
nature-related impacts and dependencies at sector, country
and financial serv
ices levels. The Group’s cross-sector Nature
Posit
ion Statement prov
ides a consolidated view of our
approach to managing Nature Risk across our business,
operations and supply chain. Further informat
ion can be
found on page 90 of this report
Read more about our Posit
ion Statements
at
sc.com/posit
ionstatements
Our list of Prohib
ited Act
iv
it
ies can be found
at
sc.com/prohib
itedact
iv
it
ies
Our reporting against the Equator Princ
iples can be found
at
sc.com/equatorprinc
iples
and in our ESG data pack at
sc.com/esg-data-pack
Managing Environmental
and Social Risk
Posit
ion Statements
Cross-sector Posit
ion Statements
Prohib
ited Act
iv
it
ies
Sector-specif
ic Pos
it
ion Statements
Climate Change
Agribus
iness
Infrastructure
and Transport
Human Rights
Chemicals and
Manufacturing
Power Generation
Nature
Extractive Industries
Thermal Coal
We seek to proactively manage environmental and social risks and impacts aris
ing from
the Group’s client relationsh
ips and transact
ions.
Posit
ion Statements
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– Annual Report 2024
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Respecting human rights
We are committed to respecting human rights across our
business. We recognise that the global nature of our
business may expose us to the risk of modern slavery and
human trafficking
in our operations, supply chain and client
relationsh
ips and we are comm
itted to managing and
mit
igat
ing these risks. Our Modern Slavery Statement details
our approach and actions to manage modern slavery risks
across our value chain.
Read our Modern Slavery Statement at
sc.com/modernslavery
Our Posit
ion Statement on Human R
ights is a key part of our
ESRM framework and was developed following engagement
with a range of internal and external stakeholders, includ
ing
expert practit
ioners and c
iv
il soc
iety organisat
ions. L
ike our
cross-sector Posit
ion Statements, the Human R
ights Posit
ion
Statement applies to our clients, suppliers and employees
and is regularly reviewed to ensure it addresses emerging
risks and issues.
Due dil
igence
is a central part of our approach in assessing
and managing risks associated with the provis
ion of financial
services to our clients. We approach this due dil
igence
in
accordance with our ESRM and Financ
ial Cr
ime Compliance
(FCC) frameworks.
Read more about our ESRM Framework and Posit
ion Statements at
sc.com/posit
ionstatements
We
will not enter into relationsh
ips w
ith suppliers involved in
human trafficking, modern slavery or forced labour. Suppl
iers
that are ident
ified as present
ing higher risks of modern slavery
are subject to due dil
igence. Our Suppl
ier Charter sets out
the princ
iples for the behav
ioural standard that Standard
Chartered expects from its suppliers, and those with
in a
supplier’s sphere of influence that assist them in performing
their obligat
ions to us.
Read our Supplier Charter at
sc.com/suppliercharter
Our Fair Pay Charter sets out the princ
iples by wh
ich we seek
to deliver fair and competit
ive remunerat
ion to all employees.
We use these princ
iples to gu
ide reward and performance
decis
ion-mak
ing globally, includ
ing how we set, structure and
deliver remuneration.
Further informat
ion on our al
ignment to the Fair Pay Charter
can be found on
page 144
of this Annual Report and in our
2024 Divers
ity, Equal
ity and Inclusion Report available at
sc.com/divers
ityfa
irpayreport
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Sustainab
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Integrity, conduct and ethics
Managing Conduct Risk is crit
ical to del
iver
ing pos
it
ive
outcomes for our clients, markets and stakeholders and
fundamental to achiev
ing our brand prom
ise, here for good.
Conduct Risk may arise anywhere in the Group at any time.
The Group therefore expects all employees to be responsible
for managing Conduct Risk given it is a transversal risk, which
means it impacts every aspect of the Group’s operations.
Our Group Conduct Risk Management Standard sets
min
imum standards for the management of Conduct R
isk
across our operations.
The Group employs a risk-based, three lines of defence
approach to Conduct Risk Management, where oversight,
governance and controls are proportionate to our assessment
of the risk. We set target conduct outcomes that the Group
aspires to deliver for clients, external stakeholders, employees,
and the environment.
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.
Speaking Up
Our Speaking Up Programme provides a safe, independent
and confidential way to report wh
istleblow
ing concerns.
It is aimed at helping to build and mainta
in a strong eth
ical
culture, with integr
ity, trust, and transparency.
The early disclosure of concerns reduces the risk of financ
ial
and reputational loss caused by misconduct. We encourage
colleagues, contractors, clients, suppliers and members of the
public to raise concerns through the Speaking Up channels.
These channels enable whistleblow
ing concerns to be ra
ised
in various ways, such as via email, a web portal, a telephone
hotline (where available), or by speaking to someone in their
line management, who may or may not be their usual People
Leader (available for employees only). When a concern is
raised, our Shared Investigat
ive Serv
ices team will determine
whether the matter is a Speaking Up disclosure or if it is an
out-of-scope disclosure.
Throughout 2024, we hosted a series of awareness campaigns
to ensure that we continue to create an environment where
everyone feels secure and empowered to speak up. The
Global Conduct Week was held from 24 to 28 June, themed
‘A Code to live by’, to celebrate good conduct, reinforce our
valued behaviours and promote the importance of ethics,
trust and integr
ity. All
interact
ive panels were a
imed to
encourage colleagues to think about how their decis
ions and
ind
iv
idual actions on a daily basis can aggregate to a much
wider impact on outcomes for our clients, customers and
other stakeholders.
We marked the World Whistleblowers Day as part of the
Conduct Week, where a panel discuss
ion was held w
ith the
Group Independent Non-Executive Director and Whistleblow
ing
Champion. Colleagues were reminded about the Speaking Up
channels and the key pillars of our Speaking Up Programme,
namely: anonymity, confident
ial
ity and no vict
im
isat
ion.
The Speaking Up Programme continues to be util
ised
across all countries, businesses and functions, and our
2024 My Voice survey found that there continued to be a
high degree of confidence in the Programme. 87 per cent
of employees felt comfortable rais
ing concerns through
the Speaking Up channels (88 per cent in 2023). Each
year, the Board reviews a Speaking Up report, which
provides an overview of the effectiveness of the Group
Speaking Up Programme. For the period July 2023 to June
2024 there was a 1 per cent increase in disclosures volume
compared to the prior 12 months. There was a 1 per cent
decrease in the proportion of employees who opted to
remain anonymous when reporting disclosures.
87
%
of employees in our My Voice survey felt comfortable rais
ing
concerns through Speaking Up channels
Vis
it our Speak
ing Up programme’s website
sc.com/speakingup
Code of Conduct and Ethics
The Code of Conduct and Ethics (the Code) remains the
primary tool through which we communicate our conduct
expectations. It is aligned with our Stands, strengthening the
link between ethics, culture, conduct and the Group’s strategy.
The Code is intended to be more than a guidance document:
rather, it is a code to live by, designed to guide colleagues
through how to live our valued behaviours on a day-to-day
basis, whatever their business, function, region or role. To
guide us in liv
ing conduct of the h
ighest standards, the Code
was shaped around 10 conduct outcomes we all strive to
deliver, and connects these to our culture, behaviour, and
ethics. The revamped Code e-learning was launched in April
2024. In June 2024, we celebrated Global Conduct Week.
The event was about celebrating good conduct and seeing
our Code in action.
Download our Code of Conduct and Ethics at
sc.com/codeofconductandethics
and vis
it
sc.com/speakingup
to find more about how our Speaking Up programme works
To reinforce our shared commitment to the highest
possible standards of conduct, each year we ask our
colleagues to reconsider what the Code means to them
through a refresher e-learning, and to reaffirm their
commitment. In 2024, 99.9 per cent of our colleagues
completed the mandatory train
ing and affirmation
(99.8 per cent in 2023).
Colleagues who are overdue without a valid reason
are subject to a 25 per cent reduction in their annual
variable compensation for the year they failed to attest.
99.9
%
of employees affirmed recommitment to our Code annually
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Fight
ing financial cr
ime
Access to the financial system helps transform l
ives around
the world, helping to reduce poverty and spur economic
development. But the financial system
is also used by those
involved in some of today’s most damaging crimes – from
human trafficking to terror
ism, corruption, and the drug trade.
Our ambit
ion
is to help tackle these crimes by making the
financial system a host
ile environment for crim
inals and
terrorists. We have no appetite for breaches in laws and
regulations related to financ
ial cr
ime.
Our Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR)
team sets our Financ
ial Cr
ime Risk management framework.
We seek to protect our clients and communit
ies aga
inst
money laundering (AML), terrorist financ
ing, sanct
ions, fraud,
and other risks, by applying core controls such as client
due-dil
igence, screen
ing and monitor
ing, and strengthen
ing
our people’s understanding as to how to ident
ify, manage and
mit
igate such r
isks. In addit
ion, ant
i-bribery, and corruption
(ABC) controls aim to prevent colleagues, or third parties
working on our behalf, from engaging in bribery or corruption.
Our miss
ion doesn’t stop at our door. We’re team
ing up with
banks, governments, and regulators around the world to raise
the bar across the industry. Throughout 2024, we actively
partic
ipated
in industry groups, includ
ing the Wolfsberg
Group of global banks, Madison Group and UK Finance.
We also launched a number of financial cr
ime transformation
in
it
iat
ives focused on technology and process capab
il
ity.
The ident
ification and analys
is of crim
inal networks ut
il
is
ing
various money laundering typologies; for example, money
mules and shell companies, continues to be a focus, with
the proactive use of data to support early detection
and prevention.
Our public–private partnerships are aimed at producing new
ins
ights about var
ious crim
inal typolog
ies and advances in
how we collectively combat financ
ial cr
ime in an increas
ing
number of jurisd
ict
ions,
includ
ing S
ingapore, Hong Kong,
South Africa, India, the UK, USA and UAE.
Sanctions on Russia remain a sign
ificant area of focus. In 2024,
the attention has been on multilateral and multiagency
measures to prevent evasion or circumvent
ion of sanct
ions
and export controls on Russia.
For those in high-risk roles and functions, we delivered
addit
ional tra
in
ing across all financial cr
ime areas, includ
ing
in-depth awareness on Russia sanctions, ABC train
ing for
targeted roles, train
ing on tax evas
ion risks, trade AML,
financial cr
ime risks in fintech and dig
ital assets, and money
laundering risks concerned with money mules and shell
companies. We also delivered a new targeted train
ing
module covering ESG and ABC risk, ‘Managing Proliferat
ion
Financ
ing R
isk and Country AML Handbook’. In addit
ion,
masterclasses and forums were held to deepen understanding.
This was further supported by our Group-wide financ
ial cr
ime
awareness campaign, ‘The Whole Story’, which aimed to
raise employee awareness of the real-life impact of financ
ial
crime. The theme for 2024 was ‘Staying one step ahead in
the fight against financ
ial cr
ime’. It emphasised the need to
continuously reinv
igorate and recharge the fight aga
inst
financial cr
ime through staying abreast of new technologies,
and build
ing partnersh
ips with government bodies, regulators,
and our peers to strengthen our collective defences.
In 2024, no legal cases concluded in which allegations
of corruption had been made against the Group or
its employees.
We have invested sign
ificantly to ensure our employees
are properly equipped to combat financ
ial cr
ime.
In 2024, 99.8 per cent of colleagues and governance
body members completed financial cr
ime mandatory
e-learnings which cover topics such as ABC, AML
includ
ing terror
ist financ
ing, sanct
ions, tax evasion and
fraud topics (Asia: 99.8 per cent, AME: 99.9 per cent,
EA: 99.9 per cent, governance body members: 100 per
cent). This compares with 99.9 per cent in 2023.
99.8
%
of colleagues and governance members completed financial
crime mandatory e-learnings
1
.
1
Governance body members represent Bill Winters and Diego De
Giorg
i. Colleagues represent permanent employees of the Group as
well as fixed-term workers employed by the Group for a fixed period.
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Responsible lending and fair treatment of retail
customers in our Wealth & Retail Banking
(WRB) segment
The Board of Directors provides oversight of the Group’s
treatment of WRB retail customers through its reporting and
committee structures. The relevant governance forum or Risk
Committee is required to challenge the business for any new
or material product proposals prior to the commencement
of the product approval process, and there are period
ic
governance forums to monitor customer complaints and
collections effectiveness.
Escalations may be taken to the WRB Risk Committee chaired
by the WRB Chief Risk Officer or the Group Risk Committee
chaired by the Group Chief Risk Officer, and ultimately to the
Group’s Board and Board Risk Committee.
Complaints management
Formal avenues are established for WRB customers to lodge
complaints. A complaints-handling process has been put in
place to enable the proper receipt, acknowledgement and
independent and effective handling of complaints, which are
to be resolved and notif
ied to customers w
ith
in a reasonable
turnaround time without compromis
ing the qual
ity of the review.
Global key complaints ins
ights, trends and root causes are
provided to the WRB Risk Committee. Examples of key metrics
that are used to track and manage complaints across WRB
markets include: total number of complaints received in the
period split by type and root cause, includ
ing sub-categor
ies
such as potentially inappropr
iate sales, proven m
is-selling or
fraud, and percentage of complaints resolved with
in the pre-
determined turnaround time.
Collections
Second line of defense oversight and governance of WRB
retail collections are performed by the WRB Risk function,
with regular reviews of performance metrics and complaints-
handling data. Across the Group, while the approach may
vary across markets in line with local regulations, programmes
to assist retail banking borrowers in financ
ial d
istress are
handled by the Collections teams.
The Group’s credit polic
ies outl
ine the expectations on the
Group’s Collections teams, which include the following:
•
Provid
ing a fa
ir and reasonable treatment regarding any
allowed concession or waiver
•
Align
ing call
ing and vis
itat
ion hours to local regulations
and practices
•
Having all customer interact
ions w
ith the Collections teams,
complaints and feedback monitored and regularly reviewed
•
Offering temporary or permanent modif
icat
ions to loan
terms when required
All Collections employees responsible for dealing with
customers in financ
ial d
istress are required to be trained
prior to commencement of collection activ
it
ies, and in
particular, are required to understand the Group’s Code of
Conduct and Ethics. Exist
ing employees also undergo regular
train
ing
in dealing with customers who are undergoing
financial hardsh
ip, and communicat
ions gu
idance is regularly
updated to reflect common circumstances encountered in
our markets. Where external collections agencies are util
ised,
these agencies undergo assessment and due dil
igence
in
accordance with Group sourcing standards and their staff
must undertake the same train
ing as the Group’s
internal
Collections teams.
Loan modif
icat
ions
Loan modif
icat
ion options that may be offered to our
customers in accordance with local regulations and the
Group’s internal credit polic
ies, wh
ich take into account the
most recently available informat
ion on the customer’s
income,
expenditures and circumstances. Collections staff managing
these arrangements are trained to discuss options thoroughly
with customers in order that any restructured payments, if
agreed, are affordable.
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Board oversight of sustainab
il
ity and climate-
related risks and opportunit
ies
The Board is responsible for the long-term success of the Group
and its strategy. Embedding sustainab
il
ity across our business is
a key strategic prior
ity for the Group, and ult
imate responsib
il
ity
for this sits with the Board. Oversight is exercised through the
appointment of supporting committees which consider
sustainab
il
ity- and climate-related risks and opportunit
ies
when review
ing and gu
id
ing strateg
ic decis
ions. Through these
sub-committees the Board has oversight of the progress
against the Group’s external commitments, Sustainab
il
ity
Aspirat
ions and del
ivery against key sustainab
il
ity prior
it
ies
includ
ing susta
inable finance, Posit
ion Statements, human
rights and community engagement Throughout 2024, Board
activ
it
ies have included review
ing and gu
id
ing strateg
ic
decis
ions on our approach to reach net zero financed em
iss
ions
by 2050. Since 2019, the Board has approved a Climate Risk
Appetite Statement annually to reflect our aim to measure
and manage the financial and non-financial r
isks aris
ing from
climate change and to reduce emiss
ions related to the Group’s
own activ
it
ies, includ
ing those assoc
iated with provid
ing
financial serv
ices to clients, in line with the Paris Agreement.
Further, to reflect the combined Climate Risk and Reputational
and Sustainab
il
ity Risk, a combined Risk Appetite Statement
will be in effect for a comprehensive coverage in 2025.
Management-level governance
Supporting the Board in its strategic decis
ions
is the Group
Management Team (GMT) and its supporting committees.
Each member of the GMT is responsible for strategically
driv
ing susta
inab
il
ity considerat
ions w
ith
in the
ir geography,
business segment or function in line with our net zero
roadmap. The GMT committees hold the ultimate decis
ion-
making authority over all material sustainab
il
ity in
it
iat
ives
and can direct actions as necessary for areas of improvement
to ensure their effective implementat
ion. Th
is includes
ensuring the effective management of Climate Risk and the
net zero roadmap in support of the Group’s strategy, as well
as overseeing Risk Appetite metrics.
The responsib
il
ity for the Group’s risk management approach
and overall second line of defence for Climate Risk sits with
the GCRO as the appropriate Senior Management Function
under the Senior Managers Regime. The GCRO is supported
by the Global Head, Enterprise Risk Management, who has
day-to-day oversight responsib
il
ity for Climate Risk.
The structure of the Group’s Board and Management Team can be
found on
pages 105 to 112
Supporting governance
The oversight and management of sustainab
il
ity- and
climate-related risks and opportunit
ies are an
integral part
of our business management, involv
ing several execut
ive
committees. These committees operate under their terms
of reference, delineat
ing respons
ib
il
it
ies, dec
is
ion-mak
ing
process, authority and the escalation route for any material
issues. Addit
ionally, a number of teams across our bus
iness,
risk and functional areas are either dedicated to, or spend
a proportion of their time, working on sustainab
il
ity- and
climate-related activ
it
ies. We are also expanding governance
and risk management at the regional, country and segment
levels to better ident
ify and manage cl
imate-related risks
and opportunit
ies.
Sustainab
il
ity governance
Management-level governance
Board oversight of sustainab
il
ity- and climate-related risks and opportunit
ies
Standard Chartered PLC Board
Board Risk Committee (BRC)
Audit Committee (AC)
Culture and Sustainab
il
ity
Committee (CSC)
Group Management Team
Group Risk Committee
(GRC)
Group Responsib
il
ity and
Reputational Risk Committee (GRRRC)
Sustainab
il
ity Executive Committee
(Sustainab
il
ity ExCo)
Supporting governance
Executive committees
Climate Risk Management
Committee (CRMC)
Sustainable Finance Governance
Committee (SFGC)
Sustainab
il
ity Operating Steering
Committee (SOSC)
Sustainab
il
ity-related risks, opportunit
ies and organ
isat
ional
impl
icat
ions are overseen
by the Group’s Board, Management Team and supporting sub-committees.
Structural overview of Standard Chartered PLC’s sustainab
il
ity- and climate-related governance
99
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Governance committees and steering groups
Several committees and steering groups support the Group’s Board and Management Team on the management
and monitor
ing of susta
inab
il
ity and climate-related risks and opportunit
ies, and assoc
iated impacts on our business
and for our key stakeholders.
Governance body
Chair
Agenda frequency
and inputs
Roles and responsib
il
it
ies
Topics covered in 2024
Standard
Chartered PLC
Board
Group
Chairman
Annual Strategy
Review 2024
Annual
Sustainab
il
ity
Strategy Update
Climate Risk
updates delivered
through the Group
CRO report
•
Oversight of the Group’s
sustainab
il
ity strategy, with input
from the Culture and Sustainab
il
ity
Committee
•
Considered the core role of sustainab
il
ity
as part of the annual strategy discuss
ion
as it is more deeply embedded across
the business
•
Approved Climate Risk Appetite
Statement and Board-level Risk
Appetite metrics
•
Endorsed the 2025 sustainab
il
ity
prior
it
ies
•
Received an update on the Group’s
sustainab
il
ity strategy, includ
ing progress
against the four sustainab
il
ity strategic
pillars, the Group’s scorecard metrics and
public sustainab
il
ity commitments
•
Approved the 2023 Modern Slavery
Statement, detail
ing the steps taken to
manage the risk of modern slavery in the
business and its supply chain
•
Received updates on ESG Risk through
the Group CRO reports
Board Risk
Committee
(BRC)
Independent
Non-
Executive
Director
Climate Risk
updates are
provided to BRC
in Group CRO
reports six times a
year. Addit
ionally,
one standalone
update on ESGR
Risk provided in
December 2024.
•
Provide oversight of the Group’s
key risks on behalf of the Board
and is the primary risk committee
at Board level that oversees
Climate Risk
•
Consider the Group’s Risk Appetite
and make recommendations to
the Board on the Climate Risk
Appetite Statement
•
Assess risk types (includ
ing
Climate Risk) and the effectiveness
of risk management frameworks
and polic
ies
•
Provide oversight and challenge
the design and execution of
climate-related Group-wide
enterprise stress tests mandated
by a regulator
•
Reviewed, discussed and challenged:
(i) a combined update on the Group’s
progress on embedding ESGR risks
(includ
ing cl
imate and greenwashing
related risks) with
in our cl
ient businesses
and own operations;
(i
i)
integrat
ion of ESGR R
isk into
corporate planning and business
strategy;
(i
i
i) development of the Group’s internal
modelling and stress testing capabil
it
ies;
and
(iv) key focus areas for 2025.
•
Reviewed Climate Risk Information
Report quarterly
•
Monitored adherence to RA metrics
Audit Committee
(AC)
Independent
Non-
Executive
Director
Updated annually
in Q4 and more
frequently if
any material
disclosures are
made outside
of the Group’s
Annual Report
•
Responsible for oversight of the
Group’s financial and non-financial
reporting, internal controls, audit
and whistleblow
ing systems
and controls
•
Reviewed changes to the climate and
greenhouse gas emiss
ions-related
quantitat
ive d
isclosures to be reported in
this Annual Report, and the key controls
around those quantitat
ive d
isclosures
Culture and
Sustainab
il
ity
Committee
(CSC)
Independent
Non-
Executive
Director
Four times in 2024
•
Review the Group’s overall
Sustainab
il
ity Strategy
•
Review progress against the
Group’s external commitments,
Sustainab
il
ity Aspirat
ions and
delivery against key sustainab
il
ity
prior
it
ies
•
Monitor the implementat
ion and
delivery of the Group’s public
commitment to net zero emiss
ions
by 2050
•
Monitor emerging sustainab
il
ity
issues that require Board-level
oversight and/or external
stakeholder engagement
•
Monitor progress against the ESG
Ratings Strategy Roadmap
•
Review sustainab
il
ity measures
included in the Group annual
and/or long-term incent
ive plan
(LTIP) scorecards
•
Reviewed and discussed the Group’s
Sustainab
il
ity Strategy
•
Reviewed progress on the Group’s net
zero roadmap
•
Discussed and endorsed the approach
to baseline and target the agriculture
sector
•
Received nature-related train
ing
•
Reviewed and endorsed the Group’s
Transit
ion Plan
•
Discussed and endorsed the oil and gas
facil
itated em
iss
ions target
•
Considered a progress update on the
Group’s Sustainab
il
ity Aspirat
ions and
endorsed four new KPIs
•
Reviewed, challenged and endorsed the
proposed changes to the Human Rights
Posit
ion Statement (HRPS)
•
Monitored the Group’s performance on
the prior
it
ised external ratings agencies
100
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Governance body
Chair
Agenda frequency
and inputs
Roles and responsib
il
it
ies
Topics covered in 2024
Group Risk
Committee
(GRC)
Group Chief
Risk Officer
(GCRO)
1
Climate Risk
updates were
provided to GRC in
Group CRO report
11 times during
2024. Addit
ionally,
three ad hoc
meetings
•
Oversee the effective
implementat
ion of the Enterpr
ise
Risk Management Framework
(“ERMF”) for the Group, includ
ing
the delegation of any part of its
authorit
ies to appropr
iate
ind
iv
iduals or properly constituted
committees below the GRC
•
Review Risk Appetite (RA) for all
Princ
ipal R
isk Types (PRT) includ
ing
Climate Risk across the Group, to
ensure that this is with
in the
approved Board RA and
Management Team (MT) lim
its
•
Received updates on RA, portfolio risks,
recent NGO activ
ity and regulatory
updates via Group CRO Report
•
Received an update on Reputational
and Sustainab
il
ity Risk material
ity
assessment, Environmental and Social
Risk Assessments and ESGR Risk by PRT
as part of the Group Risk Information
Report
•
Received an update on RA MT Lim
it
and Board RA metrics and monitored
adherence to these
Group
Responsib
il
ity
and
Reputational
Risk Committee
(GRRRC)
GCRO¹
Fourteen times in
2024
•
Oversee and approve Posit
ion
Statements includ
ing sector-
specif
ic and cross-sector
statements includ
ing Cl
imate Risk
•
Oversee reputational and
sustainab
il
ity-related RA metrics
•
Provide vis
ib
il
ity of potent
ially very
high or high ESGR matter
escalations to the Board Risk
Committee as relevant
•
Make decis
ions on cl
ients and
transactions which are assessed
as High or Very-High based on
the Group’s Reputational Risk
Material
ity Assessment Matr
ix
Reviewed and approved:
•
Exposure to clients that do not comply
with enhanced environmental and
social criter
ia
•
Transactions where Posit
ion Statement
criter
ia are not fully met
•
Transactions with high or very high
Reputational Risk with climate change
factors and decis
ions on whether to
decline transactions or not
•
The process for net zero portfolio steering
and governance, includ
ing:
(i) evaluating clients’ transit
ion plans;
(i
i) refreshed financed em
iss
ions data for
clients in sectors where the Group has set
net zero targets; and
(i
i
i) ongoing approach to net zero
portfolio management.
•
Updates for cross-sector and sector-
specif
ic Pos
it
ion Statements
Sustainab
il
ity
Executive
Committee
(Sustainab
il
ity
ExCo)
Chief
Sustainab
il
ity
Officer (CSO)
Five times in 2024
•
Hold ultimate decis
ion-mak
ing
authority over all material
sustainab
il
ity in
it
iat
ives as
delegated by the Group
Management Team
•
Direct actions as necessary for
areas of improvement to ensure
the effective implementat
ion of
sustainab
il
ity in
it
iat
ives
•
Review find
ings and escalat
ions
from delegated committees
(includ
ing but not l
im
ited to the
Sustainab
il
ity Operating Steering
Committee)
•
Oversee the net zero programme
Reviewed and approved:
•
New net zero sector target for agriculture
and facil
itated em
iss
ions target for the
most material sector, oil and gas
•
Announcement of a forward methane
commitment
•
Approval of the Group’s Sustainab
il
ity
Aspirat
ions
•
Group’s Transit
ion Plan
•
Group’s prior
it
ised ESG ratings
Discussed:
•
The Group’s NGO engagements
•
Early coal decommiss
ion
ing approach
•
Lift
ing Part
ic
ipat
ion LTIP metrics
1
Following Tracey McDermott’s retirement as Group Head, Conduct, Financ
ial Cr
ime and Compliance at the end of 2024, Group Chief Risk Officer, Sadia Ricke,
assumed overall Group Management Team oversight for the CFCR function in January 2025, and succeeded Tracey McDermott as Chair of the GRRRC.
See page 112 for more detail on the Management Team
101
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Governance body
Chair
Agenda frequency
and inputs
Roles and responsib
il
it
ies
Topics covered in 2024
Climate Risk
Management
Committee
(CRMC)
Global Head,
Enterprise Risk
Management
Seven times in 2024
•
Oversee the effective
implementat
ion of the Group’s
Climate Risk workplan, includ
ing
relevant regulatory requirements.
•
Provide challenge and recommend
Climate Risk-related Enterprise
Stress Test results
•
Review, challenge and provide
feedback on external disclosures
such as Climate Risk-related
financial d
isclosures, includ
ing
those set out by the TCFD
•
Monitor and challenge the Climate
Risk and net zero profile of the
Group with
in R
isk Appetite
•
Approval of methodology
changes to the net zero baselin
ing
and associated targets for
exist
ing sectors
•
Review and approval of any new
net zero sector target
Drove delivery of:
• Climate-related Group-wide
stress testing and management
scenario analysis
•
Progress associated with
integrat
ing Cl
imate Risk across
all impacted risk types
•
Climate Risk-related external
disclosures, includ
ing those
discussed in this report
•
Regulatory feedback and
supervis
ion
• Climate-related management
informat
ion and R
isk Appetite
metrics
•
Approach to deliver
ing tra
in
ing
and upskill
ing staff on Cl
imate Risk
across the Group
•
Oversight on the development,
ownership, as well as the results
of Climate Risk models in scope
•
Oversight of progress towards
2030 targets for automotive
manufacturing, steel and
agriculture sectors
Sustainable
Finance
Governance
Committee
(SFGC)
Head, Global
Sustainab
il
ity
Engagement
and Disclosures
At least six times
a year
•
Provide leadership, governance
and oversight in deliver
ing the
Group’s sustainable finance
offerings
•
Review and endorse sustainable
finance products
•
Guide the Group in ident
ify
ing
opportunit
ies
in sustainable finance
and managing the greenwashing
risks relating to sustainable finance
Reviewed and approved:
•
Sustainable finance products
includ
ing susta
inable cash products,
sustainable trade finance products
and sustainable finance wealth and
retail products
•
Green and sustainable finance
transactions includ
ing transact
ions
with climate-related key
performance ind
icators
•
The Group’s GSPF, encompassing a
range of climate finance activ
it
ies
•
The Group’s TFF outlin
ing our
approach to defining trans
it
ion
activ
it
ies
•
The Group’s approach to pureplay
clients which align to the Group’s
GSPF and TFF
Sustainab
il
ity
Operating
Steering
Committee
(SOSC)
Head Strategic
Init
iat
ives,
Sustainable
Finance
Monthly (min
imum
eight per year)
•
Central forum where all strategic
prior
it
ies related to sustainab
il
ity
are consolidated, prior
it
ised and
agreed upon
•
Oversee and monitor milestones
and deliverables of sustainab
il
ity
in
it
iat
ives
•
Ensure sustainab
il
ity investment
budget is centrally prior
it
ised
and allocated to business’ and
functions’ quarterly performance
reviews
•
Be a forum for escalation and
decis
ion-mak
ing
•
Enforced accountabil
ity and
fostered collaboration across the
Group to operational
ise the Group’s
net zero plan requirements and the
broader sustainab
il
ity agenda
•
Advanced the pan-bank data and
dig
ital strategy and capab
il
it
ies to
embed sustainab
il
ity into the client
and deal lifecycle
•
Provided updates on advancement
with
in the Group’s Innovat
ion Hubs
Vis
it our Comm
ittees website to view the terms of reference for our five
board committees
sc.com/committees
102
Standard Chartered
– Annual Report 2024
Sustainab
il
ity review
Incentive structure
Variable remuneration is based on measurable performance
criter
ia l
inked to the Group’s strategy, includ
ing our
sustainab
il
ity-related goals and targets, which is overseen by
the Culture and Sustainab
il
ity and Remuneration Committees.
Annual incent
ive
The Group scorecard, which contains financ
ial and strateg
ic
measures, is a key input in determin
ing the Group’s var
iable
remuneration pool. Sustainab
il
ity-related measures were
included in the 2024 Group scorecard and continue to be
included in the 2025 Group scorecard related to:
Sustainab
il
ity-related measures continue to be included in the
2025 Group scorecard related to:
•
Growing sustainable finance income in our Corporate &
Investment Banking network and social lending in
Wealth & Retail Banking.
•
Net zero decarbonisat
ion: reduc
ing our financed
emiss
ions for key sectors
in line with our risk appetite.
•
Reducing Scope 1 and 2 emiss
ions
in line with our
operational net zero by 2025 target.
Long-term incent
ive plan (LTIP)
LTIP awards are granted to members of the Group
Management Team and may also be granted to other
employees in the Group. Sustainab
il
ity measures continue to
be included in the 2025–27 LTIP, streamlined to focus on our
net zero pathway as follows:
Sustainab
il
ity continues to be included in the 2025–27 LTIP
streamlined to focus on our net zero pathway as follows:
•
Accelerating zero: progress towards our 2030 sustainable
finance mobil
isat
ion target in each of the three
performance years.
•
Net zero decarbonisat
ion: reduc
ing our financed
emiss
ions for key sectors be
ing assessed on annual
year-on-year emiss
ion reduct
ions.
Further details can be found in the Directors’ remuneration report
on
pages 143-181
Key ind
iv
iduals or teams with climate-related object
ives wh
ich impact variable remuneration
In addit
ion to the Group scorecard and LTIP performance measures, ded
icated climate and sustainab
il
ity-related object
ives
apply across functional and regional scorecards includ
ing the R
isk function, and ind
iv
idual object
ives add a further l
ink between
sustainab
il
ity outcomes and reward.
Indiv
idual or team
Objectives/performance l
inkage
Group
Management
Team (MT)
Members of the Group MT are elig
ible for an annual
incent
ive based on the outcome of our Group scorecard and
an LTIP award which both include sustainab
il
ity-related measures. Further details can be found on pages 143 to
181 of this Annual Report.
Group Chief Risk
Officer (CRO)
The GCRO is responsible for the overall second line of defence for Climate Risk as the appropriate Senior
Management Function under the Senior Managers Regime. The GCRO is supported by the Global Head,
Enterprise Risk Management, who has day-to-day oversight responsib
il
ity for Climate Risk.
Chief
Sustainab
il
ity
Officer (CSO)
The CSO is responsible for setting and driv
ing the Group’s susta
inab
il
ity strategy, includ
ing del
iver
ing on the
Group’s public sustainab
il
ity commitments. The CSO organisat
ion houses the Group’s susta
inab
il
ity strategy,
net zero delivery, strategic in
it
iat
ives, Innovat
ion Hubs and environmental and social risk management (ESRM)
teams. Performance measures for the CSO include progress against the delivery of the Group’s net zero roadmap
and sustainable finance targets.
Global Head of
Supply Chain
Management
The Global Head of Supply Chain Management is responsible for ensuring and overseeing the delivery of supply
chain emiss
ions reduct
ions and climate-related object
ives and plans
in partnership with contract owners across
the Group. This includes baselin
ing our supply cha
in emiss
ions related to products and serv
ices, supply chain
emiss
ions d
isclosures, and the implementat
ion of plans to reduce supply cha
in-related emiss
ions and manag
ing
climate risks in partnership with our suppliers.
Global Head of
Corporate Real
Estate Services
(CRES)
The Global Head of CRES is responsible for deliver
ing on our a
im to reach net zero emiss
ions
in our Scope 1 and
Scope 2 emiss
ions by 2025.
All employees
Selected sustainab
il
ity-related targets are incorporated into our annual Group scorecard which determines
annual incent
ives for the majority of our employees.
Encouraging
girls to Play On
We teamed up with Liverpool Football Club coaches
in 2024 to deliver our bespoke ‘Play On: Train the
Trainer’ curriculum to local coaches in South Africa
and Kenya, with more than 6,300 girls estimated to
have taken part.
It’s part of our joint five-year
in
it
iat
ive w
ith LFC to
keep girls in sport because of the life skills it teaches.
LFC Women’s players also featured in a series of
social videos highl
ight
ing the importance of mentors
in encouraging girls to play sport, helping girls to
believe in themselves and thrive both on and off
the field.
Read more at
sc.com/playon
Directors’ Report
104 Group Chairman’s governance overview
105 Board of Directors
110
Management Team
113
Corporate governance
143 Directors’ remuneration report
174 Addit
ional remunerat
ion disclosures
182 Other disclosures
192
Statement of Directors’ responsib
il
it
ies
103
Standard Chartered
– Annual Report 2024
Directors’ report
104
Standard Chartered
– Annual Report 2024
Directors’ report
Group Chairman’s governance overview
Group Chairman’s governance overview
Before I began to write what is my final corporate governance report
to you as Chairman, I took some time to look back across my reports
and reflect on our journey.
In 2016, my first report set out a few aims for my stewardship of the
Group. Some of these related to its governance and included my
commitment to make the Group more resil
ient to external shocks,
to ensure excellent governance and the highest ethical standards.
Governance is about doing the right things, at the right times and
being vig
ilant. Many of my subsequent reports referred to nav
igat
ing
the geopolit
ical env
ironment, tackling financ
ial cr
ime and managing
increas
ing cyber threats. Wh
ile those categories might have
remained the same, the underlying threats continue to evolve rapidly.
We monitored them closely, inv
it
ing internal and external experts to
discuss their opin
ions and pred
ict
ions w
ith the Board at specially
arranged sessions throughout my tenure. The speakers included
some of the world’s most eminent economists, central bankers,
regulators, polit
ic
ians, business leaders and technology experts.
The Management Team are inv
ited to many of these events and
the outcomes helped improve the resil
ience of the Group and shape
our strategy.
In 2018, the dynamism of geopolit
ics was such that the Group
established an International Advisory Council (IAC) made of experts
drawn from a number of disc
ipl
ines from around the World. The IAC
meets regularly to share their views on world developments and their
potential impacts on the Group. It is currently chaired by Robert
Zoellick, the former President of the World Bank and remains as
important to our strategic think
ing today as
it was at its incept
ion.
Early in my tenure, sustainab
il
ity featured regularly on Board agendas.
In 2018, the Group committed to cease new funding for coal fired
power stations. By 2021, the rapidly increas
ing focus on susta
inab
il
ity,
and climate in particular, saw the establishment of a Board
committee which included sustainab
il
ity as a key part of its remit.
This year, I was very proud that the Group announced that it had
completed its final posit
ion statement on the 12 h
ighest carbon
emitt
ing sectors. In prepar
ing these statements, we have made some
diff
icult cho
ices to promote a just transit
ion for all our commun
it
ies.
You can read more about this in the Culture and Sustainab
il
ity
Committee report on pages 134 to 136.
Occasionally, I am asked how a Board of 12 or so people are able to
oversee an organisat
ion as complex, dynam
ic and with the
geographic spread of Standard Chartered. Of course, we cannot
expect our Board to have expertise in every market or issue faced by
the Group but nevertheless recognise our duty to provide oversight
of the whole business and constructive challenge to Management.
Where we have needed an addit
ional spec
if
ic area of expert
ise for
a sustained period, we have appointed Board advisers. Paul Khoo,
a former head of Interpol, advised the Board for many years on the
Group’s approach to financial cr
ime. Sir Iain Lobban, a former head
of GCHQ, has advised the Board on the Management’s strategy for
dealing with cyber security threats for a number of years and
continues to do so. On other occasions, directors attend technical
train
ing sess
ions and meetings are arranged with ind
iv
idual
directors to take them through areas and issues they may not
have encountered before.
Now turning to this year, the Board vis
ited Shangha
i, Mumbai and
Nairob
i to get a better understand
ing on the ground of the sign
ificant
potential in these dynamic markets. In addit
ion, many d
irectors made
ind
iv
idual trips to vis
it the bus
iness in a number of other markets.
Each vis
it presented opportun
it
ies for d
irectors to engage with our
colleagues, clients, suppliers, regulators and other stakeholders.
We enjoyed every moment and are grateful for the warmth of the
receptions we received and time of everyone we met.
The Board has focused heavily on the preparation of a new
Remuneration Policy, which will be put to shareholders at the
AGM. We have engaged extensively with our investors and other
stakeholders and I am very grateful for their time and advice.
You will be able to read much more about this in our Directors'
remuneration report on page 143 to 173..
I was very sorry to say goodbye to David Conner, who retired from
the Board after completing his nine-year term in December 2024.
David is the last of the non-executives who were in place when
I arrived, and I want to thank him for his many sign
ificant contr
ibut
ions
during our shared journey. We welcomed Lincoln Leong to the Board
in November 2024 and I am pleased to report that he is settling in well
and already proving a valuable addit
ion.
We completed our board and committee reviews, which recognised a
number of achievements and areas for improvement. You can read
more about these and a range of other topics in the rest of this report.
You have an exceptional Board who work exceptionally hard for you.
The Board has made an exceptional choice in choosing Maria as
my successor and I have every confidence that it will flourish under
her leadership.
I am proud of what we have achieved over the past nine years and
thank you for your consistent support during my tenure. I look forward
to the Board helping the Group to continue to deliver long-term value
to shareholders and other stakeholders.
Dr José Viñals
Group Chairman
21 February 2025
“Governance is about
doing the right things,
at the right times,
and being vig
ilant.”
105
Standard Chartered
– Annual Report 2024
Directors’ report
Board of Directors
Audit Committee
Board Risk Committee
Culture and Sustainab
il
ity Committee
Governance and Nominat
ion Comm
ittee
Remuneration Committee
Denotes Committee Chair
A
Ri
S
N
R
Committee key
Dr José Viñals (70)
Group Chairman
Appointed
October 2016 and Group
Chairman in December 2016. José was
appointed to the Court of Standard
Chartered Bank in April 2019.
National
ity:
Spanish
Based in the UK
Skills and experience
José has substantial
experience in the internat
ional regulatory
arena and an exceptional understanding
of the economic, financ
ial and pol
it
ical
dynamics of our markets and of global trade.
Career
Until 2016, José was the Financ
ial
Counsellor and the Director of the Monetary
and Capital Markets Department at the
International Monetary Fund (IMF). He was
the IMF’s chief spokesperson on financ
ial
matters, includ
ing global financial stab
il
ity.
During his tenure, José was a member of
the Plenary and Steering Committee of the
Financ
ial Stab
il
ity Board. Pr
ior to the IMF,
José began his career as an economist and
as a member of the faculty at Stanford
Univers
ity, before go
ing to the Central
Bank of Spain, where he was the Deputy
Governor. He is a past President of the
International Monetary Conference. José
has held many other board and advisory
posit
ions,
includ
ing cha
ir of Spain’s Deposit
Guarantee Fund, chair of the International
Relations Committee at the European
Central Bank, member of the Economic
and Financ
ial Comm
ittee of the European
Union, and chair of the Working Group
on Institut
ional Investors at the Bank for
International Settlements.
External appointments
José is Co-Chair
of the United Nations’ Alliance of Global
Investors for Sustainable Development.
He is a board member of the Institute
of International Finance and a member
of the board of directors of the Bretton
Woods Committee. He is also a member
of the Leadership Council of TheCityUK,
a member of the Business Advisory Group
to the Director General of the World
Trade Organizat
ion, a member of the
World Economic Forum’s Community of
Chairpersons and a board member of the
Social Progress Imperative.
Committees
N
Bill Winters (63)
Group Chief Executive
Appointed
June 2015. Bill was also
appointed to the Court of Standard
Chartered Bank in June 2015.
National
ity:
US/Brit
ish
Based in the UK
Skills and experience
Bill is a career banker
with sign
ificant frontl
ine global banking
experience and a proven track record of
leadership and financ
ial success.
Career
Bill began his career with JP
Morgan, where he went on to become
one of its top five executives and later Co-
Chief Executive Officer at the investment
bank from 2004 until 2009. Bill was inv
ited
to be a committee member of the UK
Independent Commiss
ion on Bank
ing to
recommend ways to improve competit
ion
and financial stab
il
ity
in banking.
Subsequently, he served as an adviser
to the UK Parliamentary Commiss
ion on
Banking Standards and was asked by the
Court of the Bank of England to complete
an independent review of the Bank of
England’s liqu
id
ity operations. In 2011, Bill
founded Renshaw Bay, an alternative
asset management firm, where he was
Chairman and CEO. He stepped down on
appointment to the Standard Chartered
PLC Board. Bill was previously a non-
executive director of Pension Insurance
Corporation plc and RIT Capital Partners
plc. He received a CBE in 2013.
External appointments
Bill is an
independent non-executive director of
Novartis International AG, an Advisory
Group Member of the Integrity Council
for Voluntary Carbon Markets and a
Board Advisor to the International
Rescue Committee.
Diego De Giorg
i (54)
Group Chief Financ
ial Officer
Appointed
January 2024. Diego was also
appointed to the Court of Standard
Chartered Bank in January 2024.
National
ity:
Italian
Based in the UK
Skills and experience
Diego has more than
three decades of experience in the global
financial serv
ices sector, working with
clients across the UK, Europe, the US, Asia,
the Middle East and Africa.
Career
Diego spent 18 years at Goldman
Sachs, with leadership roles in the Equity
Capital Markets Group and the Financ
ial
Institut
ions Group before becom
ing the
Chief Operating Officer for the Global
Investment Banking div
is
ion. Following this,
he moved to Bank of America Merrill Lynch,
where he spent six years, ris
ing to Head
of Global Investment Banking. He served
as a non-executive director at UniCred
it
and a member of their Compensation
Committee in 2020 and 2021. From 2021,
Diego was the Co-Chief Executive of
Pegasus Europe, Europe’s largest-ever
special purpose acquis
it
ion company,
which was focused on the financ
ial
services sector and was listed on
Euronext Amsterdam.
External appointments
Diego sits on
the Board of the MIB Trieste School of
Management.
106
Standard Chartered
– Annual Report 2024
Directors’ report
Board of Directors
Maria Ramos (65)
Senior Independent Director
Appointed
January 2021. Maria was
also appointed to the Court of Standard
Chartered Bank in January 2021. She
was appointed as Senior Independent
Director in September 2022.
National
ity:
South African
Based in
South Africa
Skills and experience
Maria has extensive
CEO, banking, commercial, financ
ial,
policy and internat
ional exper
ience. As
announced on 4 February 2025, Maria will
be appointed as Group Chair, subject to
regulatory approval, following the AGM
on 8 May 2025.
Career
Maria served as Chief Executive
Officer of ABSA Group Lim
ited (prev
iously
Barclays Africa Group), a divers
ified
financial serv
ices group serving 12 African
markets, from 2009 to 2019. Before
join
ing ABSA, Maria was the Group Chief
Executive of Transnet Ltd, the state-owned
freight transport and logist
ics serv
ice
provider, for five years. Maria served for
seven years as Director General of South
Africa’s National Treasury (formerly the
Department of Finance). Maria has served
on a number of internat
ional boards,
includ
ing Sanlam Ltd, Remgro Ltd, and
SABMiller plc, and more recently was Chair
of AngloGold Ashanti PLC until 2024 and a
non-executive director of the Saudi Brit
ish
Bank and Public Investment Corporation
Lim
ited unt
il December 2020.
External appointments
Maria is a
non-executive director of Compagnie
Financ
ière R
ichemont SA from which
she will retire after 13 years on 31 March
2025. She is also a member of the
Group of Thirty, sits on the International
Advisory Board of the Blavatnik School of
Government at Oxford Univers
ity and on
the Wits Foundation Board of Governors.
As announced on 4 February 2025, Maria
will be appointed as Group Chair of
Standard Chartered PLC following the
2025 AGM on 8 May 2025.
Committees
Ri
A
R
N
Shir
ish Apte (72)
Independent Non-Executive Director
Appointed
May 2022. Shir
ish was
appointed to the Court of Standard
Chartered Bank in January 2023.
National
ity:
Brit
ish
Based in
Singapore
Skills and experience
Shir
ish has extens
ive
corporate, investment banking, risk
management, commercial and retail
banking experience. He has a deep
understanding of financ
ial serv
ices, notably
across the Asia Pacif
ic, M
iddle East, Africa,
and Central and Eastern European regions.
Career
Shir
ish spent over 30 years w
ith
Cit
igroup, where he focused on corporate
and investment banking, and managed
commercial and retail banking businesses
at country and regional level. He has strong
risk experience and was a Senior Credit
Officer and a Senior Securit
ies Officer at
Cit
igroup. Sh
ir
ish was Co-CEO for C
it
i’s
Europe, Middle East and Africa business
from 2008 to 2009, and Regional CEO Asia
Pacif
ic from 2009 to 2011. He was Cha
irman
of Asia Pacif
ic Bank
ing from 2012 until his
retirement in 2014. He was on the Executive
and Operating Committees of Cit
igroup
from 2008 to 2014. From June 2014 until
October 2022, he was an independent non-
executive director at the Commonwealth
Bank of Australia.
External appointments
Shir
ish
is an
independent non-executive director at
Singapore Life Pte Ltd and Hillhouse
Investments and an independent non-
executive director of Keppel Corporation
Lim
ited, where he
is a member of its Audit
and Board Risk Committees.
Committees
R
A
Ri
N
Phil Rivett (69)
Independent Non-Executive Director
Appointed
May 2020. Phil was also
appointed to the Court of Standard
Chartered Bank in May 2020.
National
ity:
Brit
ish
Based in the UK
Skills and experience
Phil has sign
ificant
professional accountancy and audit
experience, specif
ically focused
in the
financial serv
ices sector.
Career
Phil jo
ined Pr
icewaterhouseCoopers
(PwC) in 1976, becoming a Partner in 1986.
He spent more than 30 years at PwC and
was lead relationsh
ip Partner for several
FTSE 100 companies, includ
ing several
internat
ional banks and financial serv
ices
inst
itut
ions. He also has substantial
internat
ional exper
ience, having worked
with banks across the Middle East and Asia,
in particular China. He became Leader of
PwC’s Financ
ial Serv
ices Assurance practice
in 2007 and was appointed Chairman of its
Global Financ
ial Serv
ices Group in 2011.
Phil has sat on a number of global financ
ial
services industry groups, producing
guidel
ines for best pract
ice in governance,
financial report
ing and risk management.
External appointments
Phil is an
independent non-executive director
and Chair of the Audit Committee at
Nationw
ide Bu
ild
ing Soc
iety.
Committees
A
Ri
N
107
Standard Chartered
– Annual Report 2024
Directors’ report
Dr Linda Yueh, CBE (53)
Independent Non-Executive Director
Appointed
January 2023. Linda was also
appointed to the Court of Standard
Chartered Bank in January 2023.
National
ity:
US/Brit
ish
Based in the UK
Skills and experience
Linda is a renowned
economist and financ
ial broadcaster w
ith a
diverse range of skills and experience across
financial serv
ices, technology, not-for-profit
and business-to-business service sectors.
Career
Linda has held various academic
and advisory roles after starting her career
as a corporate lawyer. Linda was Economics
Editor at Bloomberg News from 2010 to
2012 and Chief Business Correspondent for
the BBC between 2013 and 2015. She was
a Vis
it
ing Professor at LSE IDEAS at the
London School of Economics and Polit
ical
Science from 2019 to 2022 and served on the
Independent Review Panel on Ring-Fencing
and Proprietary Trading for HM Treasury.
Linda held non-executive directorsh
ips
with Scottish Mortgage Investment Trust
Plc, London & Partners Ltd and JPMorgan
Asia Growth & Income Plc. She was Senior
Independent Director of Fidel
ity Ch
ina
Special Situat
ions Plc. L
inda was awarded
a CBE for Services to Economics in the
New Year Honours List of 2023. Linda was
a Trustee of the Coutts Foundation and
Adviser to the UK Board of Trade.
External appointments
Linda is a Fellow
at St Edmund Hall, Oxford Univers
ity,
and Adjunct Professor of Economics
at London Business School. She is an
independent non-executive director of
Rentokil Init
ial Plc and Segro Plc, Cha
ir of
the Baill
ie G
ifford The Schiehall
ion Fund
Ltd, an investment company listed on the
Special
ist Fund Segment of the London
Stock Exchange Main Market, Chair of the
Royal Commonwealth Society, Trustee of the
Fidel
ity UK and Internat
ional Foundations,
and an Associate Fellow at Chatham House.
Linda is a Member of the UK Soft Power
Council, co-chaired by the UK Foreign and
Culture Secretaries.
Committees
S
R
N
Jackie Hunt (56)
Independent Non-Executive Director
Appointed
October 2022. Jackie was also
appointed to the Court of Standard
Chartered Bank in October 2022.
National
ity:
Brit
ish
Based in the UK
Skills and experience
Jackie is a chartered
accountant and has spent most of her
career with
in financial serv
ices. She brings
sign
ificant UK and
internat
ional financial
services experience, includ
ing asset
management, insurance, regulatory and
accounting knowledge.
Career
Jackie has held several senior
management posit
ions at compan
ies
includ
ing Av
iva, Hibern
ian Group, Norw
ich
Union Insurance, PwC and RSA Insurance.
From 2016 until 2021, she was a member of
the Allianz SE management board. Jackie
was an executive director of Prudential
plc and CEO of Prudential UK, Europe
and Africa. She was Group Chief Financ
ial
Officer of Standard Life plc from 2010 to
2013, where she helped transform the life
insurer into a diverse savings, pensions and
asset management business. Jackie was
previously the Senior Independent Director
of National Express Group PLC, a non-
executive director of TheCityUK and the
Deputy Chair of the FCA Practit
ioner Panel.
She was also an independent non-executive
director of Man Group PLC, Rothesay Life
PLC and OneWeb Holdings Lim
ited.
External appointments
Jackie is an
independent non-executive director of
Will
is Towers Watson plc.
Committees
A
Ri
R
Robin Lawther, CBE (63)
Independent Non-Executive Director
Appointed
July 2022.
National
ity:
US/Brit
ish
Based in the UK
Skills and experience
Robin brings extensive
internat
ional bank
ing experience in
global markets and financial
inst
itut
ions.
In addit
ion to a broad understand
ing of
commercial banking, she has special
ist
knowledge in investment banking, mergers
and acquis
it
ions, and capital rais
ing.
Career
Robin spent over 25 years at JP
Morgan Chase in several senior executive
posit
ions. She has valuable execut
ive
and non-executive experience across
global markets and has considerable
understanding of regulatory and
governance issues. From 2019 to 2021, she
served as a non-executive director on the
board of M&G plc. In January 2014, Robin
joined Shareholder Execut
ive, which later
became UK Government Investments
(UKGI), as a non-executive board member
until completing her term in May 2022. She
received a CBE for services to finance and
divers
ity
in the Queen’s Birthday Honours
2020. From 2014 to 2023, she served as an
independent non-executive director of
Nordea Bank Abp.
External appointments
Robin is an
independent board member of Ashurst LLP
and a member of the global advisory board
at Aon PLC.
Committees
Ri
S
R
108
Standard Chartered
– Annual Report 2024
Directors’ report
Board of Directors
Diane Jurgens (62)
Independent Non-Executive Director
Appointed
Diane was appointed as an
independent non-executive director of
Standard Chartered PLC in March 2024.
Diane was also appointed to the Court of
Standard Chartered Bank in March 2024.
National
ity:
US
Based in the
US
Lincoln Leong (64)
Independent Non-Executive Director
Appointed
: November 2024. Lincoln was
also appointed to the Court of Standard
Chartered Bank in November 2024.
National
ity:
Canadian/Chinese (HK)
Based in
Hong Kong
Skills and experience
Diane has sign
ificant
expertise in driv
ing technology, product
development and innovat
ion to transform
business operations across the mass media
and entertainment, min
ing, automot
ive and
aerospace sectors.
Career
From 2020 to 2023, Diane was
Executive Vice President and Chief
Information Officer at The Walt Disney
Company, where she oversaw Disney’s
global enterprise technology organisat
ion.
Between 2015 and 2020, Diane was Chief
Technology Officer of the multinat
ional
min
ing and metals company BHP, where,
largely based in Singapore, she was
responsible for leading capital program
delivery, technology operations, cyber
security, data privacy, and research and
development. Between 2012 and 2015, Diane
was President and Managing Director of
an American and Chinese jo
int venture,
Shanghai Onstar Telematics, and was
based in Shanghai. Prior to that, Diane
held numerous senior executive posit
ions
at General Motors includ
ing several
global roles across many of the Group’s
key markets.
External appointments
Diane is a Dean’s
Advisory Board Member on the Univers
ity
of Washington College of Engineer
ing and
a non-executive director of the World 50
Group.
Committees
S
Ri
Skills and experience
Lincoln is a
Chartered Accountant with experience
in general management, investment
management and investment banking,
includ
ing a wealth of execut
ive and
non-executive board experience across
a range of industr
ies and markets,
particularly in the Hong Kong market.
Career
Lincoln spent over 15 years at MTR
Corporation Lim
ited
in a range of executive
roles, becoming its Chief Executive Officer
from 2015 to 2019. Prior to this he held a
number of senior roles with
in pr
ivate equity
and investment banking includ
ing as a
partner at Capital Z Asia Lim
ited, Sen
ior
Vice President of Investment Banking at
Lehman Brothers Asia Ltd and Director of,
followed by Head of Corporate Finance at
Schroders Asia Ltd. Lincoln started his career
as an accountant at PriceWaterhouse
(now PricewaterhouseCoopers) in London
and subsequently joined Pr
iceWaterhouse
in Vancouver. He was previously a non-
executive director of Jardine Strategic
Holdings Lim
ited and Mandar
in Oriental
International Lim
ited, and an
independent
non-executive director of Link Asset
Management Lim
ited (manager of
the listed Link Real Estate Investment
Trust) and SUNeVis
ion Hold
ings Ltd.
External appointments
Lincoln is an
independent non-executive director of
Standard Chartered Bank (Hong Kong)
Lim
ited. He
is also a non-executive director
of the Hong Kong listed company China
Resources Land Lim
ited, a non-execut
ive
director of Hongkong Land Holdings
Lim
ited and holds a number of roles on
the boards of not-for-profit companies
includ
ing The Commun
ity Chest of Hong
Kong, Hong Kong Management Associat
ion
and Hong Kong Housing Society.
Committees
A
David Tang (70)
Independent Non-Executive Director
Appointed
June 2019.
National
ity:
US
Based in China
Skills and experience
David has a deep
understanding and experience of emerging
technologies in the context of some of our
key markets, most notably Mainland China.
Career
David has more than 30 years of
internat
ional and Ch
inese operational
experience in the technology and venture
capital industr
ies, cover
ing venture
investments, sales, marketing, business
development, research and development
and manufacturing. From 1989 to 2004,
David held a number of senior posit
ions
in Apple, Dig
ital Equ
ipment Corp and
3Com based in China and across the Asia
Pacif
ic reg
ion. From 2004 to 2010, David
held various posit
ions
in Nokia, includ
ing
Corporate Vice President, Chairman of
Nokia Telecommunicat
ions Ltd and V
ice
Chairman of Nokia (China) Investment Co.
Ltd. He went on to become Corporate Senior
Vice President and Regional President of
Advanced Micro Devices (AMD), Greater
China, before jo
in
ing NGP Capital (Nokia
Growth Partners) in Beijing as Managing
Director and Partner in 2013, a posit
ion he
held until June 2021. David was a non-
executive director of Kingsoft Corporation,
a leading Chinese software and internet
services company listed on the Hong Kong
Stock Exchange.
External appointments
David jo
ined
Kaiyun Energy (previously Kaiyun Motors)
in June 2021 as Chief Value Officer. David is
also a non-executive director of JOYY Inc.,
the Chinese live-streaming social media
platform listed on the Nasdaq Stock Market.
He is also an adviser to NGP Capital.
Committees
R
S
109
Standard Chartered
– Annual Report 2024
Directors’ report
As announced on 21 December 2023, Andy Halford stepped down from the Board on 2 January 2024. As announced on 16 February 2024,
Gay Huey Evans stepped down from the Board with effect from 29 February 2024 and Carlson Tong stepped down on 9 May 2024.
As announced on 11 December 2024, David Conner stepped down from the Board with effect from 30 December 2024.
With the exception of the Governance and Nominat
ion Comm
ittee (where the Group Chairman is its Chair), all of the Board committees are
composed of independent non-executive directors (INEDs). The roles of the Group Chairman and Group Chief Executive are dist
inct from one
another and are clearly defined in detailed role descript
ions wh
ich can be viewed at
sc.com/roledescript
ions
Adrian de Souza (54)
Group Company Secretary
Appointed
Adrian was appointed Group
Company Secretary in May 2022.
National
ity:
Brit
ish
Based in the UK
Skills and experience
Adrian has extensive
experience as Company Secretary and
General Counsel to FTSE 100 and FTSE 250
companies.
Career
Adrian qualif
ied as a lawyer
in
1997. Prior to jo
in
ing Standard Chartered,
he was General Counsel for Vivo Energy
PLC, a FTSE 250 pan-African fuel retailer,
where he was responsible for the Company
Secretarial, Governance, Ethics, Compliance
and Forensic Investigat
ions funct
ions, and
was a member of the group’s Executive
Committee. After working in private practice
at internat
ional law firms Hogan Lovells
and Clifford Chance, Adrian served as
General Counsel and Company Secretary
at IQSA Group (a Goldman Sachs private
equity business), Company Secretary at
Barclays Bank UK PLC, General Counsel
and Company Secretary of the FTSE 100
company, Land Securit
ies Group PLC, where
he was a member of the Group’s Executive
Committee, and Head of Legal at SABMiller
PLC, Europe.
110
Standard Chartered
– Annual Report 2024
Directors’ report
Management Team
Bill Winters (63)
Group Chief Executive
Alvaro Garrido (55)
Interim Group Chief
Information Officer
National
ity:
Spanish
Based in
Singapore
Roberto Hoornweg (56)
Global Co-Head, Corporate &
Investment Banking
National
ity:
Italian/Dutch
Based in
UAE
Judy Hsu (61)
CEO, Wealth & Retail Banking
National
ity:
Canadian
Based in
Hong Kong
Alvaro was appointed as inter
im Group
Chief Information Officer on 5 September
2024, having jo
ined the Group
in May 2022.
Prior to jo
in
ing Standard Chartered, he
served as Group Chief Security Officer and
Group Chief Information Security Officer at
Banco Bilbao Vizcaya Argentaria in Spain,
and previously held senior roles across Asia,
Europe, the Middle East and the Americas
includ
ing at Nordea, where he served as
the Group CIO; Brit
ish Amer
ican Tobacco as
Global Head of Technology Services; Roche
Pharmaceuticals as Head of IT Engineer
ing;
and Sun Microsystems.
External appointments
None
Roberto was appointed Global Co-Head,
Corporate & Investment Banking in April
2024. He also has responsib
il
ity for our
Europe, Americas, Middle East and Africa
markets. Prior to his current role, he was
Global Head of Financ
ial Markets from
January 2017. Before join
ing Standard
Chartered, he was a partner at Brevan
Howard leading the Liqu
id Portfol
io
Strategies funds business. Previously, he
spent three years at UBS Investment Bank
in London leading the global Securit
ies
Distr
ibut
ion business and then co-heading
the global Fixed Income, Currencies and
Commodit
ies d
iv
is
ion. Roberto spent 17 years
at Morgan Stanley where he held various
senior roles in fixed income derivat
ives, led
the global Emerging Markets Fixed Income &
FX business, and was latterly Head of Global
Interest Rates, Credit and Currencies.
External appointments
None
Judy was appointed CEO, Wealth and
Retail Banking (WRB) in January 2021
and in November 2024 she also took on
responsib
il
ity for Greater China and North
Asia markets. She has been a member
of the Group Management Team since
2018 and is also the Chairperson of Trust
Bank Singapore Lim
ited. Pr
ior to her most
recent appointment, Judy was Regional
CEO, ASEAN & South Asia, a posit
ion she
held from June 2018. Judy was the country
CEO for Standard Chartered Singapore
from 2015 to 2018. She joined Standard
Chartered in December 2009 as the Global
Head of Wealth Management and led the
strategic advancement of the Bank’s wealth
management business. Prior to this, Judy
spent 18 years at Cit
ibank, where she held
various leadership roles in its Consumer
Banking business in Asia.
External appointments
Judy is a non-
executive and independent director of
CapitaLand Lim
ited.
Management Team
Diego De Giorg
i (54)
Group Chief Financ
ial Officer
111
Standard Chartered
– Annual Report 2024
Directors’ report
Mary Huen (57)
CEO, Hong Kong and
Greater China & North Asia
National
ity:
Chinese
Based in Hong Kong
Benjamin Hung (60)
President, International
National
ity:
Canadian
Based in Hong Kong
Tanuj Kapilashram
i (47)
Chief Strategy & Talent Officer
National
ity:
Brit
ish
Based in the UK
Mary was appointed Chief Executive Officer
(CEO) for Hong Kong and Greater China
& North Asia in August 2024. She is an
executive director of Standard Chartered
Bank (Hong Kong) Lim
ited (SCBHK) and
chairs the Board of Standard Chartered
Bank (Taiwan) Lim
ited. She has over 30 years
of experience in business management and
banking services. Mary was the Regional
Head of Retail Banking, Greater China &
North Asia, before being appointed CEO
for Hong Kong in March 2017, and took on
an expanded role as Cluster CEO for Hong
Kong, Taiwan and Macau in January 2021.
External appointments
Mary is the
Chairperson of the Hong Kong Associat
ion
of Banks, Vice President of the Council of
the Hong Kong Institute of Bankers, and a
Council Member of the Hong Kong Treasury
Markets Associat
ion. She
is also a member
of the Hong Kong Monetary Authority’s
Banking Advisory Committee, the Hong
Kong Monetary Authority’s Currency
Board Sub-Committee of its Exchange
Fund Advisory Committee, and the Hong
Kong Academy of Finance. Mary serves
the broader Hong Kong community as a
representative of Hong Kong, China to the
Asia-Pacif
ic Econom
ic Cooperation Business
Advisory Council, a Council Member of the
Hong Kong Management Associat
ion, a
Council Member of the Hong Kong Trade
Development Council and member of its Belt
and Road & Greater Bay Area Committee,
the Aviat
ion Development and Three-
runway System Advisory Committee, and
the Human Resources Planning Commiss
ion.
Mary also holds Board posit
ions
in the Hong
Kong Hospital Authority and the Hong Kong
Tourism Board.
Ben was appointed Standard Chartered’s
President, International in April 2024. He
sits on the Board of SCBHK and is the
Chairperson of both Standard Chartered
Bank (China) Lim
ited and Standard
Chartered Bank (Singapore) Lim
ited. Ben
joined Standard Chartered
in 1992 and
has held a number of senior management
posit
ions spann
ing corporate, commercial
and retail banking. Prior to his current
role, he was CEO, Asia, overseeing the
Bank’s presence in 21 Asian markets. He
was previously Regional CEO for Greater
China & North Asia and CEO for the Bank’s
Retail Banking and Wealth Management
businesses globally.
External appointments
Ben is Chairman
of the Board of Directors of the Hong
Kong Financ
ial Serv
ices Development
Council. He is a member of the Hong Kong
Chief Executive’s Council of Advisers, the
Exchange Fund Advisory Committee and
the General Committee of the Hong Kong
General Chamber of Commerce, and a
Board member of the West Kowloon
Cultural Distr
ict Author
ity Board. He is the
Co-Chair of B20’s Trade and Investment
Taskforce. He also serves as an economic
adviser at the International Consultative
Conference on the Future Economic
Development of Guangdong Province,
Mainland China.
Tanuj was appointed Chief Strategy & Talent
Officer in April 2024, and heads Corporate
Strategy, Group-wide Transformation
and Corporate Functions (HR, Brand &
Marketing, Corporate Affairs, Supply Chain
Management and Corporate Real Estate
& Services). Before taking on this role, Tanuj
was the Group Head, Human Resources
since 2019, and jo
ined the Bank as Group
Head, Talent, Learning & Culture in 2017.
Tanuj has over two decades of experience in
the global financial serv
ices sector, and prior
to Standard Chartered, she built her career
at HSBC in a range of country, regional
and global leadership roles across multiple
markets, includ
ing Hong Kong, S
ingapore,
Dubai, India, and London.
External appointments
Tanuj is a
Non-Executive Director of the Board
for Sainsbury’s PLC and is a member of
their Nominat
ion and Remunerat
ion
Committees. She is also an Associate
Non-Executive Director of the Board of NHS
England, advis
ing the NHS on
its workforce
transformation agenda. In addit
ion, Tanuj
is a member of the Asia House Board of
Trustees (an independent think tank driv
ing
engagement between Asia, the Middle East
and Europe) and is on the Board of Vault22
(an integrated dig
ital wealth, health and
lifestyle solutions start-up).
112
Standard Chartered
– Annual Report 2024
Directors’ report
Management Team
Alex Manson (55)
CEO, SC Ventures
National
ity:
French
Based in Singapore
Sadia Ricke (54)
Group Chief Risk Officer, Director
of Standard Chartered Bank
National
ity:
French
Based in the UK
Darrell Ryman (56)
Interim Group Chief Operating Officer
National
ity:
Australian
Based in Hong
Kong
Alex is the CEO of SC Ventures, which he set
up in 2018. He jo
ined Standard Chartered
in 2012 in
it
ially as Group Head, Wholesale
Banking Geographies, and later served as
Global Head, Transaction Banking. Alex
set up SC Ventures as a unit of Standard
Chartered to promote innovat
ion,
invest
in disrupt
ive technology and bu
ild new
ventures to explore alternative business
models in the financ
ial sector. Th
is resulted
in 35+ new ventures, and 20 minor
ity
investments in technology partners, across
the three themes of Dig
ital Bank
ing &
Lifestyle, Trade & Supply Chains and Dig
ital
Assets, enabled by artif
ic
ial intell
igence (AI),
Web3/Blockchain, ESG and Quantum. He
has also created an ecosystem of partners
and investors, and laid the foundation for a
culture of innovat
ion v
ia intrapreneursh
ip.
Prior to Standard Chartered, Alex was at
Deutsche Bank for 12 years, where he held
roles includ
ing Global Head of Lend
ing
and Corporate Banking Coverage and
prior to that Head Global Banking (IBD)
Coverage APAC.
He started his banking career at Credit
Suisse, where he held roles in the
Securit
izat
ion Group, and prior to that
Derivat
ives & Structured Products.
External appointments
Alex serves
on several boards for our ventures and
portfolio companies.
Sadia jo
ined the Bank
in February 2023.
She is Group Chief Risk Officer (GCRO),
and a Director of the Court of Standard
Chartered Bank. In addit
ion,
in January 2025
she assumed overall Group Management
Team oversight for the Compliance,
Financ
ial Cr
ime & Conduct Risk (CFCR) and
Legal and Corporate Secretariat global
functions, in addit
ion to manag
ing risk
across all Princ
ipal R
isk Types. Sadia jo
ined
the Bank from Société Générale, where she
started in 1994 in the Financ
ial Inst
itut
ions
Credit department. Sadia gained more than
13 years of structured finance experience in
the Natural Resources and Energy Finance
div
is
ion, where she was Co-Deputy Head,
a posit
ion she held unt
il 2010 before
becoming Head of Credit Risk for SG CIB in
Paris. In 2014 Sadia relocated to Hong Kong
to take on the role of Head of Global Finance
for Asia Pacif
ic. She was appo
inted Group
Country Head and Head of Coverage
and Investment Banking for the UK in 2017.
Sadia became Deputy Chief Risk Officer in
2019 and then GCRO in 2021.
External appointments
Sadia is Chair of
the International Financ
ial R
isk Institute
Foundation.
Darrell was appointed as inter
im Group
Chief Operating Officer on 5 September
2024. Darrell joined the Group
in March 2023
as Chief Technology Officer for Asia and was
subsequently appointed as Global Head
of Global Business Services and Central
Operations in April 2024. Prior to jo
in
ing
the Group, Darrell held CIO roles at AXA
covering the UK, Ireland, Hong Kong, Macau
and the Greater Bay Area and served on
the Board of AXA Technology Services, and
held business, technology and Board roles
at Avanade in Mainland China, Hong Kong,
Australia and Japan.
External appointments
Darrell is a director
of Hong Kong Interbank Clearing Lim
ited.
Sunil Kaushal (59)
Global Co-Head, Corporate &
Investment Banking
National
ity:
Singaporean
Based in
Singapore
Sunil was appointed Global Co-Head,
Corporate & Investment Banking in April
2024. In addit
ion, he has respons
ib
il
ity for
our ASEAN and South Asia markets. Sunil
has over 37 years of banking experience
in diverse markets. Prior to his current
appointment, he held the role of Regional
CEO Africa and Middle East (AME) at the
Bank from October 2015. Sunil has been with
Standard Chartered for over 27 years and
has held senior roles across the Bank. Before
join
ing Standard Chartered in 1998, Sunil
held various banking posit
ions at a number
of leading internat
ional financial
inst
itut
ions.
External appointments
Sunil is the
Chairman of Furaha Finserve Uganda
Lim
ited, an SC Ventures company.
113
Standard Chartered
– Annual Report 2024
Terms of Reference for the Board and each committee are in place to provide clarity over where responsib
il
ity for decis
ion-mak
ing lies. These are reviewed
annually against industry best practice, corporate governance provis
ions and gu
idance, and relevant regulatory rules. Our Terms of Reference are available
on our website at
sc.com/ourpeople
The biograph
ies of each d
irector are set out on
pages 105 to 109
.
The roles of the Group Chairman and Group Chief Executive are dist
inct from one another and
are clearly defined in detailed role descript
ions wh
ich can be viewed at
sc.com/roledescript
ions
Corporate Governance Compliance Statement
The directors are pleased to confirm that the Company continued to comply with the UK Corporate Governance Code 2018 (UK Code) and the
Hong Kong Corporate Governance Code contained in Appendix C1 of the Hong Kong List
ing Rules (HK Code) for the whole of the year under
review. In this report, which constitutes our corporate governance report, we share ins
ights
into how governance operates with
in the Group and
how we have applied the princ
iples set out
in the UK Code and HK Code. Copies of the UK Code and the HK Code can be found at frc.org.uk and
hkex.com.hk respectively.
The Group confirms that it has adopted a code of conduct regarding directors’ securit
ies transact
ions by directors on terms no less exacting than
required by Appendix C3 of the Hong Kong List
ing Rules. Hav
ing made specif
ic enqu
ires of all directors, the Group confirms that all directors have
complied with the required standards of the adopted code of conduct.
Corporate governance
Standard
Chartered PLC
The Board
The Board is responsible for the governance, strategic direct
ion and performance of the Group and the
delivery of sustainable value with
in a framework of prudent and effect
ive controls to which the Group’s culture is
aligned. The Board is responsible for the Group’s engagement with key stakeholders and for consider
ing the
ir views
and interests during Board discuss
ions and dec
is
ion-mak
ing. It is responsible for overseeing the Group’s conduct
and affairs and for promoting its long-term sustainable success. Under its Terms of Reference, the Board has
direct responsib
il
ity for certain matters, includ
ing approval of the Group’s long-term objectives, purpose, valued
behaviours, culture and commercial strategy. In other areas, it delegates responsib
il
it
ies to
its committees in
order to ensure effective independent oversight and scrutiny of those matters and receives reports from them
at Board meetings.
Key governance roles
Board Chairman
Our Group Chairman, José Viñals, is responsible for leading the Board, ensuring its effectiveness
and, together with the Group Chief Executive, developing and embedding the Group’s culture. The Chairman
promotes high standards of integr
ity and governance across the Group and ensures effect
ive communicat
ion
and understanding between the Board, management, shareholders and other stakeholders.
Senior Independent Director
Our Senior Independent Director, Maria Ramos, provides a sounding board for
the Group Chairman. Her role includes serving as an intermed
iary for the other d
irectors where necessary and
undertaking the performance evaluation of the Chairman. Maria is available to shareholders if they have concerns
that the Chairman, Chief Executive or other executive directors are not able to resolve or for which the normal
channels would be inappropr
iate. She can be contacted v
ia the Group Company Secretary at 1 Basinghall Avenue,
London EC2V 5DD.
Audit Committee
The Audit Committee is responsible for oversight and review of matters relating to financ
ial
reporting, the Group’s internal controls, includ
ing
internal financ
ial controls, and the work
undertaken by the Compliance, Financ
ial Cr
ime & Conduct Risk function, Group Internal Audit
(GIA) and the Group’s Statutory Auditor, Ernst & Young LLP (EY).
Read more
on
page 123
Board Risk
Committee
The Board Risk Committee is responsible for oversight and review of the Group’s Risk Appetite
Statement, the appropriateness and effectiveness of the Group’s risk management systems and
the princ
ipal r
isks, includ
ing Cl
imate Risk, to the Group’s business. Furthermore, it considers the
impl
icat
ions of material regulatory change proposals and due dil
igence on mater
ial acquis
it
ions
and disposals.
Read more
on
page 129
Culture and
Sustainab
il
ity
Committee
The Culture and Sustainab
il
ity Committee (CSC) is responsible for oversight and review of the
Group’s culture and sustainab
il
ity prior
it
ies.
Read more
on
page 134
Governance and
Nominat
ion
Committee
The Governance and Nominat
ion Comm
ittee is responsible for oversight and review of Board
and executive succession, overall Board effectiveness and corporate governance issues across
the Group.
Read more
on
page 137
Remuneration
Committee
The Remuneration Committee is responsible for oversight and review of remuneration, share
plans and other incent
ives.
Read more
on
page 143
With the exception of the Governance and Nominat
ion Comm
ittee (where the Group Chairman is its Chair), all of the Board
committees are composed of independent non-executive directors (INEDs).
Group Chief
Executive
The Board delegates authority for the operational management of the Group’s business to the
Group Chief Executive for further delegation by him in respect of matters that are necessary for
the effective day-to-day running and management of the business. The Board holds the Group
Chief Executive accountable in discharg
ing h
is delegated responsib
il
it
ies.
Management
Team
The Management Team comprises the Group Chief Executive and the Group Chief Financ
ial
Officer, client segment CEOs and our global function heads. It has responsib
il
ity for the day-to-
day management of the Group and for executing its strategy.
Read more
on
page 110
Directors’ report
114
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Board activ
it
ies during 2024
January
February
London
March
April
Shanghai
May
London
June
Mumbai
July
London
August
September
London
October
November
Nairob
i
December
Key:
Informal session
Scheduled meeting
AGM
Attendance at Board meetings in 2024
Our Board meetings
The Board is committed to mainta
in
ing a comprehensive
schedule of meetings and a forward agenda to ensure its
time is used most effectively and effic
iently. The Group
Chairman holds INED-only meetings ahead of each scheduled
Board meeting, which provides the opportunity for discuss
ion
on key agenda items and other matters without the executive
directors and management present.
Sir Iain Lobban, as independent adviser to the Board and its
committees on cyber security and cyber threat management,
attended relevant items at Board and Committee meetings
to provide an independent and current view on the Group’s
progress in this area.
Our stakeholders
Relationsh
ips w
ith our key stakeholders were considered
extensively during Board and Committee meetings and
in decis
ion-mak
ing, and in the ind
iv
idual and collective
engagements that took place throughout the year.
See Stakeholder engagement on
page 121
and
Section s172 statement on
page 35
.
Stakeholders
Clients
Employees
Regulators and governments
Investors
Suppliers
Society
Attendance
AGM
Scheduled
José Viñals (Group Chairman)
Y
8/8
Bill Winters (Group Chief Executive)
Y
8/8
Diego De Giorg
i (Group Ch
ief Financ
ial Officer)
Y
8/8
David Conner
Y
8/8
Gay Huey Evans, CBE
Y
1/1
Phil Rivett
Y
8/8
David Tang
Y
8/8
Shir
ish Apte
Y
8/8
Robin Lawther, CBE
Y
8/8
Jackie Hunt
Y
8/8
Linda Yueh, CBE
Y
8/8
Carlson Tong
Y
3/3
Diane Jurgens
Y
7/7
Lincoln Leong
n/a
2/2
INEDs who stepped down in 2024
Gay Huey Evans (29 Feb)
Carlson Tong (9 May)
David Conner (30 December)
INEDs who joined
in 2024
Diane Jurgens (1 March)
Lincoln Leong (2 November)
115
Standard Chartered
– Annual Report 2024
Directors’ report
Board discuss
ion and act
iv
it
ies in 2024
•
Reviewed the Group’s strategy over two days
at a Board and senior management offsite
meeting, discuss
ing progress aga
inst the
strategic prior
it
ies, the pivot to focus on
cross-border and Affluent banking, and
execution challenges. The Board concluded
that management is executing the strategy
well and that it remains appropriate
•
Reviewed and approved the 2025–2029
Corporate Plan as a basis for preparation of
the 2025 budget, receiv
ing a report from the
GCRO on the alignment of the plan to the
Group's Enterprise Risk Management
Framework (ERMF), and the Group Risk
Appetite Statement
•
Reviewed and scrutin
ised the strateg
ic and
operational performance of the business
across client segments, product groups and
regions, which included details of their
prior
it
ies, progress, opportunit
ies and
response to current events
•
This included deep dives into the
following areas:
– Affluent and Private Banking
– Innovation and SC Ventures
– Use of AI
– Blue Sky session
–
China, India and Africa and the Kenya business.
•
Received and discussed regular corporate
development updates.
•
Reviewed and discussed the Group’s
sustainab
il
ity strategy.
•
Reviewed and discussed the progress and
evolution of the Group’s Technology &
Operations strategy.
•
Reviewed and discussed the Global Business
Services strategy.
•
Approved exploring the potential sale of
a small number of businesses to boost
investment in the Group’s Affluent franchise
(Wealth & Retail Banking (WRB) businesses
in Botswana, Uganda and Zambia).
Strategy
Board matters
The Board approved a decis
ion to explore opt
ions to divest three African 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 Board
considered 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 Board will scrutin
ise the w
ider
stakeholder impacts carefully.
Spotlight:
Decis
ion to explore
exit of three WRB
businesses in Africa
Stakeholders:
The Board offered its support for the decis
ion to accelerate our strateg
ic focus on offering
cross-border corporate and investment banking capabil
it
ies and wealth management for
affluent clients. In Corporate & Institut
ional Bank
ing (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 Board 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.
Spotlight:
Strategic focus
Stakeholders:
•
Received and discussed brief
ings from
management on informat
ion and cyber-
security (ICS) matters, and noted the
successful delivery of the ICS strategic plan,
transit
ion
ing ICS Risk to a steady state.
•
Reviewed work on projects to replace and
upgrade data centres in Asia.
•
Received and discussed China data
sovereignty risks .
•
Reviewed and discussed risk reports from
the GCRO.
•
Reviewed the find
ings from the Bank of
England’s (BoE) second resolvabil
ity
assessment.
•
Engaged with the Prudential Regulation
Authority (PRA) on the find
ings of
its 2024
Period
ic Summary Meet
ing Letter.
•
Assessed progress in continu
ing to strengthen
the Group’s risk culture.
•
Approved the Group's Risk Appetite for 2025
which included a considerat
ion of pr
inc
ipal
risks.
•
Approved the Group’s insurance coverage for
2024/2025
•
Approved material changes to the ERMF.
Risk
management
116
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Board discuss
ion and act
iv
it
ies in 2024
continued
During 2024, the Board approved two div
idend payments, and announced buybacks
of ordinary shares totalling $2.5 bill
ion. The Board noted the
importance of approving
distr
ibut
ions and other capital management activ
it
ies with
in an appropr
iately prudent
framework. Assurance was also sought from management regarding the protection of the
Group’s capital posit
ion and
its abil
ity to execute planned
investment activ
it
ies for future
growth. With the successful completion of our 2024 buybacks, in addit
ion to total d
iv
idends
for 2024 of 37 cents per ordinary share and a new $1.5 bill
ion buyback announced today, we
are well on our way to our $8 bill
ion three-year cumulat
ive shareholder distr
ibut
ions target.
Spotlight:
Share buyback
•
Monitored the Group’s financ
ial performance.
•
Approved the 2023 full-year and 2024
half-year results.
•
Monitored and assessed the strength of
the Group’s capital and liqu
id
ity posit
ions.
•
Provided oversight and monitored
implementat
ion of the F
it for Growth (FFG)
programme.
•
Considered the Group’s approach to capital
management and returns and approved
the 2023 final div
idend, 2024
inter
im d
iv
idend,
and two share buyback programmes.
•
Received half-yearly updates on, and
discussed, the Group’s major investment
programmes in 2024.
•
Reviewed changes to the Group’s segment
and country financial report
ing.
•
Received half-yearly updates on, and
discussed, investor relations matters.
•
Reviewed the 2024 Group and Management
Team Scorecard.
Stakeholders
Financ
ials and
performance
•
Approved the Group’s UK and Australia
Modern Slavery Statements.
•
Discussed progress made against the Group’s
people strategy.
•
Considered the work completed to deliver on
the Group’s culture aspirat
ion and rece
ived
ins
ights on the Group’s culture from the global
employee engagement survey, My Voice.
•
Received updates on the progression and
evolution of the Management Team’s and
senior management’s succession plans
following a number of recent appointments.
•
Reviewed the Board Divers
ity Pol
icy and
concluded that no changes were required.
•
Reviewed an annual report update on the
operation and effectiveness of the Group’s
Speaking Up programme for 2023-2024.
People, culture
and values
•
Discussed the macroeconomic and geo-
polit
ical headw
inds and tailw
inds
in the
global economy, includ
ing an assessment of
the impact on the key drivers of the Group’s
financial performance.
•
Received internal and external brief
ings and
input across a range of subjects, includ
ing:
–
Global context and the role of the global bank
–
The power and impact of technology
in banking
– Global geopolit
ical outlook
–
The Middle East and the impact of the
Israel-Gaza-Hezbollah conflict
– Regulatory developments and updates.
•
Monitored developments and trends in
corporate governance and the impact of
changes to the UK and Hong Kong List
ing
Rules in order to ensure the Company’s
governance structures remain compliant.
•
Received reports at each scheduled meeting
from the Board committee chairs on key areas
of focus for the committees and quarterly
updates from SCBHK and its Audit and Board
Risk committees.
•
Undertook train
ing on d
irectors’ duties and
the governance landscape.
•
Approved the appointment of two new
independent non-executive directors, Diane
Jurgens and Lincoln Leong, to the Board, as
well as changes to the membership of the
Board’s committees.
•
Discussed and reviewed the independence,
performance and annual re-election of the
non-executive directors.
•
Approved the re-appointment of the
independent adviser to the Board on cyber
security and cyber threats.
•
Authorised potential conflicts of interest
relating to directors’ external appointments.
•
Discussed the observations and themes
aris
ing from the 2024
internally facil
itated
Board and committees’ effectiveness review
ahead of approving the 2025 Action Plan.
•
Reviewed and, where appropriate, approved
updates to the Terms of Reference for each
Board committee ensuring that they reflected
best practice and relevant rules.
•
Further developed meaningful linkages
between the Board and its subsid
iar
ies
at chair, board and committee level
(see page 122).
External
environment
Governance
117
Standard Chartered
– Annual Report 2024
Directors’ report
Director induct
ion
Upon join
ing the Board, our directors undertake a
comprehensive tailored induct
ion programme.
Diane Jurgens
Diane Jurgens was appointed as an INED and member of the
CSC on 1 March 2024. She undertook a formal induct
ion plan
consist
ing of a comb
inat
ion of meet
ings with exist
ing Board
members, business and function heads and external counsel,
receiv
ing ta
ilored train
ing sess
ions on our businesses and
topics includ
ing D
irectors’ Duties, Governance Requirements,
Strategy, Risk, Finance and Banking, and a deep dive into
topics relevant to her membership of the CSC. Diane received
train
ing on the obl
igat
ions appl
icable to directors of Hong
Kong-listed companies on 14 February 2024 as required by
Rule 3.09D of the Hong Kong List
ing Rules, and has confirmed
that she understands those obligat
ions. D
iane jo
ined the
Board Risk Committee later in the year and is undertaking an
induct
ion programme for that. She also v
is
ited some key
markets on the overseas Board trips to Shanghai and Beijing
in April, to Mumbai in June and to Nairob
i
in November, as
well as undertaking a trip to Sil
icon Valley w
ith the Group’s
Management Team and a vis
it to S
ingapore where she met
with senior management. Diane also attended a financ
ial
services conference in New York, where she met members
of our US senior management team.
Lincoln Leong
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 Board members,
business and function heads and external counsel, receiv
ing
tailored train
ing sess
ions on our businesses and topics includ
ing
Directors’ Duties, Governance Requirements, Strategy, Risk,
Finance and Cyber/artif
ic
ial intell
igence and a deep d
ive into
topics relevant to his membership of the Audit Committee.
Lincoln received train
ing on the obl
igat
ions appl
icable to
directors of Hong Kong-listed companies on 2 October 2024
as required by Rule 3.09D of the Hong Kong List
ing Rules,
and has confirmed that he understands those obligat
ions.
The Governance and Nominat
ion Comm
ittee reviews the
induct
ion programme of all new INEDs. The Comm
ittee is
satisf
ied that all new INEDs have made excellent progress
with 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 Board remains
highly effective. The table below gives further examples of
directors’ train
ing
in 2024.
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
Audit and
Corporate
Governance
(ACG)
Social
isat
ion
Recovery and
Resolvabil
ity
Board
simulat
ion
exercise
Blue Sky
Session
Model Risk
Management
Directors’
duties and
regulatory
updates
José Viñals
Bill Winters
Diego De Giorg
i
1
Shir
ish Apte
David Conner²
Jackie Hunt
Diane Jurgens
3
n/a
Robin Lawther
Maria Ramos
Phil Rivett
Carlson Tong
4
n/a
n/a
n/a
n/a
David Tang
Linda Yueh
Lincoln Leong
5
n/a
n/a
n/a
n/a
n/a
n/a
1
Diego de Giorg
i joined the Board on 3 January 2024
2
David Conner stepped down from the Board on 30 December 2024
3
Diane Jurgens jo
ined the Board on 1 March 2024
4
Carlson Tong stepped down from the Board on 9 May 2024
5
Lincoln Leong jo
ined the Board on 2 November 2024
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
Board train
ing and development
118
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
In 2024, Board members received brief
ings from and
engaged with, diplomats, polit
ical adv
isers and polit
ic
ians,
eminent economists, central bankers and former leaders of
internat
ional organ
isat
ions on top
ics 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.
Committee train
ing
Members of the Board committees also received train
ing
relevant to their respective committees. In 2024, the Board Risk
Committee received train
ing on top
ics includ
ing the Internal
Capital Adequacy Assessment Process (ICAAP) and the
Internal Liqu
id
ity Adequacy Assessment Process (ILAAP), and
Traded Risk. The Audit Committee received train
ing on the
proposed approach to material controls under the UK Code
and a deep dive into sanctions. The CSC received train
ing on
nature and biod
ivers
ity.
Indiv
idual performance
The Group Chairman led the performance review of
ind
iv
idual director performance for 2024. These one-to-one
sessions considered:
•
their performance against core competencies, includ
ing
their challenge and conduct in meetings and the Board’s
expectation of directors
•
their time commitment to the Group, includ
ing (where
relevant) the potential impact of any outside interests
•
their ongoing development and train
ing needs
•
the Board’s composit
ion and refreshment
•
their level of engagement across the Group.
These performance reviews are used as the basis for
recommending the re-election of directors by shareholders
at the AGM and to assist the Group Chairman with his own
assessment of the Board’s effectiveness. In addit
ion, the
Group Chairman has responsib
il
ity for assessing annually the
fitness and propriety of the Company’s INEDs and the Group
Chief Executive Officer under the UK Senior Managers and
Certif
icat
ion Regime. These assessments were carried out in
respect of each INED and the Group Chief Executive and no
issues in relation to fitness and propriety were ident
ified. The
Group Chief Executive carried out a sim
ilar assessment for the
Group Chief Financ
ial Officer, also w
ith no issues ident
ified.
Group Chairman’s performance
Maria Ramos, as Senior Independent Director, reviewed José
Viñals’ performance as Group Chairman, meeting with each
director separately to take their feedback. Consolidated
feedback was shared with him.
Time commitment
Our INEDs commit suffic
ient t
ime in discharg
ing the
ir
responsib
il
it
ies as d
irectors of Standard Chartered. In general,
we estimate that each INED spent well in excess of their
expected time commitments on Board-related duties.
Access to independent advice
All of the directors have access to the advice of the Group
Company Secretary, who provides support to the Board and
is responsible for advis
ing the Board on governance matters.
Directors also have access to independent professional
advice at the Group’s expense where they judge it necessary
to discharge their responsib
il
it
ies as d
irectors.
119
Standard Chartered
– Annual Report 2024
Directors’ report
Board effectiveness
1.
The review took the form of an in-depth conversation
between the Group Company Secretary and each
of the Board members. The discuss
ions explored
some of the themes from the previous year’s review
as well as probing the Board’s and committees’
performance through the year and how it could be
further enhanced.
4.
Key findings and recommendat
ions
were presented to the Board and an
Action Plan for 2025 was approved.
Details of key observations and the
Action Plan are set out below.
5.
Observations on committee effectiveness
were shared with the relevant committee chairs
and action plans for 2025 agreed. Details of
key observations and committee action plans
are set out in each committee report.
2.
Results were compiled
into a detailed report.
3.
This report was shared
with the Group Chairman
and the Governance
and Nominat
ion
Committee.
2024 Internal Board performance review process
Progress against the 2024 Action Plan
The 2024 Action Plan set out a number of actions to be
achieved following the internally facil
itated Board evaluat
ion
conducted in 2023. The 2024 Action Plan was regularly
reviewed during the year and good progress had been
made against many of the actions as evidenced by this
year’s internally facil
itated Board effect
iveness review.
Key observations from the 2024 internal
effectiveness review
•
The Board was very satisf
ied w
ith its performance in a
challenging year, during which it monitored potential
geopolit
ical sh
ifts.
It also oversaw the induct
ion of a
number of new directors and the selection of a new Chair
in addit
ion to
its princ
iple role of oversee
ing the business.
•
Directors felt the Board remained effective in setting and
progressing its prior
it
ies, with the focus on the princ
iple
drivers of the share price having a posit
ive effect.
•
There was an improved focus on strategy in Board agendas.
Papers had improved in terms of their focus and length,
though there was still further to go.
•
Stakeholder engagement continued to be effective.
Directors had many opportunit
ies to meet w
ith clients,
employees, shareholders, other investors and regulators,
much of which was focussed around market vis
its to Ch
ina,
India and Kenya. However directors felt that the Board
could have more opportunit
ies to meet cl
ients and would
like to see more agenda time devoted to customers and
competitor analysis.
•
Directors had the right mix of talent and functioned well
together, with the Chairman continu
ing to be h
ighly
regarded and effective.
•
The Board had received ins
ights from external and
internal
speakers on a range of business, geopolit
ical, econom
ic,
technology and sustainab
il
ity topics.
2025 Action Plan
•
Continue to improve the focus of agendas towards strategic
items, while ensuring oversight of the control environment
remains robust and continues to meet evolving challenges.
•
Continue to improve the focus of Board papers to clearly
set out key issues and include relevant assumptions
for challenge.
•
Reduce duplicat
ion between the Board and Comm
ittees,
while ensuring the Board remains abreast of key issues
with
ing the rem
it of the Committees.
•
Increase the time devoted at meetings to customers,
competitor analysis and oversight of the Group’s
transformation plans.
120
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Director independence
The Governance and Nominat
ion Comm
ittee reviews the
independence of each of the non-executive directors, taking
into account any circumstances likely to impa
ir, or wh
ich could
impa
ir, the
ir independence. Recommendations are then made
to the Board for further considerat
ion. In determ
in
ing the
independence of a non-executive director, the Board considers
each ind
iv
idual against, but not lim
ited to, the cr
iter
ia set out
in the UK Code and the Hong Kong List
ing Rules. The Board
considers all of the non-executive directors to be independent
of Standard Chartered, and has concluded that there are no
relationsh
ips or c
ircumstances likely to impa
ir any
ind
iv
idual
non-executive director’s judgement.
External directorsh
ips and other bus
iness
interests
Board members hold external directorsh
ips and other
outside business interests, details of which are set out in their
biograph
ies on pages 105 to 109. We recogn
ise the sign
ificant
benefits that broader boardroom and other commercial,
advisory and charitable activ
ity prov
ides.
However, we closely monitor the nature and quantity of
external directorsh
ips our d
irectors hold, in order to satisfy
ourselves that any addit
ional appo
intments will not adversely
impact their time commitment to their role at Standard
Chartered, and to ensure that all of our Board members
remain compliant with the PRA directorsh
ip requ
irements,
as well as shareholder guidance on ‘overboarding’.
Our established internal processes ensure that directors
do not undertake any new external appointments without
first receiv
ing formal approval of the Board. The Board
has delegated authority to make such approvals to the Group
Chairman, with the exception of his own appointments.
Potential conflicts of interest are considered before any
approval is given and, if any are ident
ified, appropr
iate
undertakings are sought and safeguards put in place.
Before committ
ing to an add
it
ional appo
intment, directors
confirm the existence of any potential or actual conflicts that
the role will not breach their lim
it as set out by the PRA, and
provide the necessary assurance that the appointment will
not adversely impact their abil
ity to cont
inue to fulfil their role
as a director of the Company. All directors continue to hold no
more than four non-executive directorsh
ips (or one execut
ive
directorsh
ip alongs
ide two non-executive directorsh
ips)
permitted under the General Organisat
ional Requ
irements
Part of the PRA Rulebook.
121
Standard Chartered
– Annual Report 2024
Directors’ report
Board engagement with our stakeholders
Considerat
ion of our stakeholders’ v
iews is important not
only to Board decis
ion-mak
ing,
but also to the Board’s
considerat
ion of our purpose, values and strategy. Dur
ing
the year, directors engaged collectively and ind
iv
idually
with stakeholders. Informal and formal meetings with
stakeholders across our markets help to provide INEDs
with a comprehensive understanding of their views and
the impact of the Group’s activ
it
ies.
Clients and suppliers
Mainta
in
ing productive and sustainable relationsh
ips w
ith
our clients is a key prior
ity. Throughout 2024, d
irectors travelled
with
in our footpr
int for meetings with clients in order to
understand their developing needs. This year the Board vis
ited
e-commerce, technology and AI clients in Beijing and fintech
clients and suppliers in Shanghai, and held events for clients in
Mumbai, Shanghai and Nairob
i.
Employees
The Board places great importance on workforce engagement
at all levels as a way of ensuring that the voice of colleagues
is heard and reflected in decis
ion-mak
ing. It mainta
ins a
two-way dialogue through market-led engagements that
enable the Board to listen to and better understand the lived
experience of our colleagues across a range of markets, which
is important to the Board in overseeing, supporting and, where
necessary, challenging management in implement
ing
its
people strategy.
The Board continues to adopt an alternative workforce
engagement method as set out in the UK Code. Our enhanced
model, which saw its first full year of operation in 2024, is
designed to improve how Board members gather and share
feedback obtained from colleagues who come from a cross
section of the business, and use that to provide addit
ional
assurance for informat
ion rece
ived from employee surveys
and other employee feedback tools. In 2024, the Board
formally met colleagues in various markets, includ
ing Shangha
i,
Mumbai and Nairob
i,
in specially arranged sessions.
Employees
continued
Ahead of these, directors were briefed on the ind
iv
idual
market, includ
ing local trends prov
ided by the annual
employee engagement survey (My Voice) and other relevant
data points offered by local and regional management teams.
Feedback from these sessions was subsequently shared
with the CSC and other stakeholders, where appropriate.
Through these sessions directors were able to appreciate the
challenges, successes, concerns and opportunit
ies shared by
colleagues in each of the markets.
In addit
ion to th
is enhanced model, the Group has a
comprehensive employee listen
ing programme, through wh
ich
the Board has an opportunity to understand diverse employee
perspectives. These tools include the annual employee
engagement survey, a continuous listen
ing programme,
lifecycle surveys and diagnost
ic research on spec
if
ic areas of
focus, such as flexible working and performance management.
Details on all of our employee engagement can be found on
page 188
.
The Board is also informed about the operation and themes of
issues raised under the Group’s Whistleblow
ing programme.
For more details on Speaking Up, please refer to
page 95
.
Regulators and governments
The Board, either collectively or ind
iv
idually, engaged with
relevant policy-makers and regulators in several jur
isd
ict
ions
across our global footprint, includ
ing for example: the UK, EU,
China, Singapore and India. Topics of discuss
ion
included
changes in the regulatory landscape for financ
ial serv
ices,
developments in new regulation in such areas as dig
ital assets
and sustainable finance, and the issue of fragmenting rule sets
across the global context.
Investors
During the year, we mainta
ined a comprehens
ive programme
of engagement, includ
ing w
ith investor advisory bodies and
credit rating agencies, and provided updates on progress
made to transform our business to deliver improved returns.
The Group Chairman and other Board directors had direct
contact with investors and advisory voting bodies during the
year, and received regular updates from the Investor Relations
and Group Secretariat teams, includ
ing reports on market
developments. The Group Chairman, leads engagement
with shareholders and hosted the 2024 AGM alongside fellow
Board members, in addit
ion to a large number of b
ilateral
meetings with investors.
122
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Investors
continued
In November 2024 the Group Chairman hosted a Stewardship
Event alongside the chairs of all the Board committees. The
Group Chairman provided an update regarding the Group’s
strategy, includ
ing w
ith respect to sustainab
il
ity, and the
Board committee chairs provided updates on the work of
their committees during the year. This was followed by a
presentation on Cybersecurity at Standard Chartered and
a Q&A session.
Bill Winters and Diego De Giorg
i were the pr
imary spokespeople
for the Group in 2024 and engaged extensively with exist
ing
and potential investors during ind
iv
idual or group meetings
and conferences. Judy Hsu, CEO, WRB, Standard Chartered
PLC, hosted a virtual Affluent investor seminar, provid
ing an
overview of the Affluent business as well as ins
ights on the
strategy and proposit
ions to grow the bus
iness further.
The Chair of the Remuneration Committee led an investor
consultation on proposals for the new Remuneration Policy
being put to shareholders at the coming AGM. More details
on this are included with
in the Remunerat
ion Report.
The AGM, held this year on 10 May 2024, is the Board’s key
opportunity for engagement with retail shareholders, enabling
discuss
ion of the Group’s recent performance and strateg
ic
prior
it
ies. Questions received from shareholders covered a
diverse range of topics, includ
ing the Group’s strategy, cl
ient
transit
ion plans, b
iod
ivers
ity, the China market and sustainable
finance. All Board-proposed resolutions were passed. We
remain very grateful for the support of our shareholders.
Society
The Board places great importance in understanding, and
consider
ing the needs of, the commun
it
ies and env
ironment
in which we do business. Directors took the opportunity
during a Board trip to Beijing to partic
ipate
in a youth career
mentoring workshop with univers
ity students. In Shangha
i,
Board members met entrepreneurs who were beneficiar
ies
of our community projects: Social Enterprise Support Project
and Women in Entrepreneurship, the Bank’s signature
Futuremakers programmes in China. In Mumbai, directors
vis
ited a Standard Chartered Futuremakers-supported tra
in
ing
facil
ity for persons w
ith disab
il
it
ies, wh
ich provides train
ing
in
core employabil
ity sk
ills such as dig
ital l
iteracy, dig
ital problem
solving, soft skills and career readiness, and engaged with the
students of the programmes. In Nairob
i we held a 'mentor’s
den' for Futuremakers partic
ipants and the
ir alumni with
members of the Board and the Group Management Team.
Our subsid
iar
ies
In 2024, the Group Chairman and INEDs engaged with the
Group’s subsid
iar
ies through a number of forums.
The Group Chairman attended a meeting of the Hong Kong
board. He also attended the annual Audit, Board Risk and
Remuneration Committee chairs’ calls with subsid
iar
ies,
and engaged actively with subsid
iary cha
irs and INEDs on
market vis
its.
On an annual basis, the Chairs of the SCBHK and Standard
Chartered Bank (Singapore) Lim
ited (SCBSL) Aud
it Committees
observe SC PLC/SC Bank Audit Committee meetings, and the
Chair of the Audit Committee attends SCBHK and SCBSL Audit
Committee meetings and provides an overview of SC PLC/
SC Bank Audit Committee key areas of focus. In March (after
the announcement of full-year results), the Audit Committee
Chair hosts an annual global call with subsid
iary Aud
it
Committee members, where attendees listen to the prior
it
ies
of the SC PLC/SC Bank Audit Committees and are encouraged
to ask questions. As part of the annual performance and
effectiveness review of EY, subsid
iary Aud
it Committee Chairs
are inv
ited to comment on the effect
iveness of our Statutory
Auditor via a structured questionna
ire. Dur
ing overseas
Board vis
its, the Aud
it Committee Chair and other members
meet with local Audit Committee Chairs, Heads of GIA and
EY Partners.
The Board Risk Committee Chair hosts an annual
videoconference with chairs of the subsid
iary board r
isk
committees. This year, items discussed during the call included:
prior
it
ies and focus for the Board Risk Committee during 2024,
the external environment and the GRCO’s prior
it
ies. The risk
committee chairs of SCBHK and SCBSL jo
ined one Group Board
Risk Committee meeting and the Board Risk Committee Chair
attended one SCBHK Risk Committee meeting.
The Remuneration Committee Chair held a videoconference
attended by the subsid
iary remunerat
ion committee chairs
and the chairs of subsid
iary boards that have remunerat
ion
responsib
il
it
ies. The call was also attended by the Group
Chairman, other members of the Group Remuneration
Committee and executives from Human Resources, and
Reward and the Corporate Secretariat. The call fostered
knowledge sharing and best practice between the Group
Remuneration Committee and the subsid
iary remunerat
ion
committees and raised awareness of the prior
it
ies felt by the
wider workforce in our markets. Topics that were discussed
included: changes to the discret
ionary
incent
ive approach
for 2024; key messages; salary considerat
ions; the removal of
the 2:1 bonus cap; the 2025 Directors’ Remuneration Policy;
and the Bank’s employee recognit
ion platform, Apprec
iate.
Further detail on how the Group engaged with stakeholders more
generally can be found on
page 35 to 41
.
123
Standard Chartered
– Annual Report 2024
Directors’ report
Audit Committee
I am pleased to present the report of the Audit Committee for
2024 and share with you the highl
ights of our work:
•
Monitor
ing the Group’s ongo
ing implementat
ion of UK
ACG reforms, includ
ing the work underway on process and
controls mapping, testing and quality assurance, train
ing,
tooling and business readiness.
•
Applying scrutiny and challenge of credit impa
irments, key
accounting issues, sign
ificant account
ing estimates and
judgements made by management to ensure that they
are appropriate and clearly communicated in the Group’s
public disclosures. Cognisant of the challenging external
environment, we placed particular focus on the Group's
investment in China Bohai Bank (Bohai), and the Group’s
exposures to commercial real estate (CRE) in Mainland
China, Hong Kong and more broadly. The Committee
reviewed carrying values of loans and advances to
commercial and consumer/retail customers and the
related overlays. Focus was placed on the Group’s use of
alternative performance measures (APMs), which the
Committee reviewed and challenged. We reviewed and
discussed management's review of capital
ised software
intang
ibles,
includ
ing test
ing performed and planned
process improvements.
•
Paying close attention to Data Risk management,
overseeing the work underway to manage risk buy-down
and drive end-to-end alignment across our businesses
and functions.
•
In conjunction w
ith the Board and Board Risk Committee,
Financ
ial Cr
ime Risk remained a key prior
ity w
ith increased
Money Laundering Reporting Officer reporting throughout
the year. Deeper discuss
ions were held
into topical matters
covering the Group’s approach to managing sanctions-
related risks; and how to manage Financ
ial Cr
ime
Compliance (FCC) in an evolving risk landscape. All Board
members were inv
ited to join these d
iscuss
ions.
•
Remain
ing focused on the Group’s approach to manag
ing
Conduct Risk, to ensure that this continues to embed in our
businesses and functions, in an evolving risk landscape.
•
Review
ing the annual Board report on Consumer Duty,
consider
ing the benefits of the UK rules and how the good
practices can be leveraged in our markets for the benefit
of our customers.
Phil Rivett
Chair of the Audit Committee
Committee composit
ion and attendance
Phil Rivett
Shir
ish Apte
David Conner
1
Jackie Hunt
Lincoln Leong
2
Maria Ramos
3
Carlson Tong
4
1
/
1
1
/
1
1
/
1
1
/
1
n/a
0
/
1
1
/
1
Ad hoc
8/8
8/8
8/8
8/8
1/1
8/8
4/4
1
David Conner stepped down from the Committee on 30 December 2024
2
Lincoln Leong jo
ined the Comm
ittee on 2 November 2024
3
Maria Ramos did not attend one ad hoc meeting due to a prior business
commitment, however she received the papers and provided feedback
4
Carlson Tong stepped down from the Committee on 9 May 2024
As part of, and in addit
ion to most scheduled Comm
ittee
meetings, the Committee held private members-only meetings.
The Committee also met with the Group’s Statutory Auditor,
EY, and the Group Head, Internal Audit, without management
being present.
The Committee members have detailed and relevant experience
and bring an independent mindset to their role.
Addit
ional attendees
The Group Chairman; Group Chief Executive; Group Chief Financ
ial
Officer; GCRO; Group Head, Internal Audit; Group Head, Conduct,
Financ
ial Cr
ime & Compliance (CFCC); Group Head, Central
Finance; representatives from Group Finance; Group Statutory
Auditor; and the Group Company Secretary also attended
Committee meetings.
Purpose and responsib
il
it
ies
The Committee is responsible for oversight and advice to the
Board on matters relating to financ
ial, non-financial and
narrative reporting. Its role is to review, on behalf of the Board,
the Group’s internal controls, includ
ing
internal financ
ial controls.
The Committee exercises oversight of the work undertaken by
the internal CFCR (previously CFCC) and GIA functions and EY.
The Committee Chair reports to the Board on the Committee’s
key areas of focus following each meeting.
The Board is satisf
ied that Ph
il Rivett has recent and relevant
financial exper
ience. Phil is a chartered accountant with more
than 40 years’ experience of professional accountancy and audit
focused on banks and insurance companies. He led the audits
of a number of leading banks during his career as senior audit
partner of PricewaterhouseCoopers. He is also chair of the audit
committee for Nationw
ide Bu
ild
ing Soc
iety.
The Committee has written Terms of Reference that
can be viewed at
sc.com/termsofreference
“In addit
ion to the
items you would expect the
Committee to have reviewed, we have focused on
the implementat
ion of the UK Aud
it and Corporate
Governance reforms; and the impact of an ever
changing and challenging external environment on our
investments and key controls, processes and procedures.”
124
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Activ
it
ies during the year
Financ
ial report
ing
•
Satisf
ied
itself that the Group’s accounting polic
ies and pract
ices are appropriate.
•
Reviewed the clarity and completeness of the disclosures made with
in the publ
ished financ
ial
statements, and considered, satisf
ied
itself and recommended to the Board that the processes
and procedures in place ensure that the Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the informat
ion necessary for shareholders to assess the Group’s
posit
ion and performance, bus
iness model and strategy, and the business risks it faces.
•
Monitored the integr
ity of the Group’s publ
ished financ
ial statements, such as half-year and
quarterly reports, and formal announcements relating to the Group’s financ
ial performance,
review
ing the s
ign
ificant financial judgements, est
imates and accounting issues.
•
Considered the forthcoming UK ACG reforms and discussed how the Group will implement the
new proposals. In particular, the Committee probed the alignment between the scope of
management's proposals and that of the external financial aud
it; the management of third-party
controls; assurance that may be required; and the importance of thorough documentation.
•
Sign
ificant account
ing judgements considered during 2024 are shown below.
•
The Committee can confirm that the key judgements and sign
ificant
issues reported are consistent
with the disclosures of key estimat
ion uncerta
int
ies and cr
it
ical judgements, as set out
in Note 1
starting on page 295.
Key area
Action taken
Impairment of loans
and advances
•
Reviewed and challenged, on a quarterly basis, reports detail
ing the compos
it
ion and cred
it
quality of the loan book, concentrations of risk and provis
ion
ing levels, and the key judgements
made in applying the Group Impairment Provis
ion
ing Policy.
•
Assessed the expected credit loss (ECL) model output, reviewed, considered and challenged
judgmental post model adjustments and management overlays in both the wholesale and retail
portfolios on a quarterly basis that were required to estimate ECL.
•
Reviewed and discussed updates highl
ight
ing expected losses in the Mainland China and Hong
Kong CRE sector and sovereign downgrades. In respect of high-risk credit grade exposures,
received brief
ings on bus
iness plans, includ
ing remed
ial actions and management assessment
of the recoveries and collateral available.
Carrying value of
investments in associates
and subsid
iary
undertakings
•
Reviewed and discussed management’s value in use assessment on the Group’s investment in its
associate Bohai, as well as the associate accounting analysis, and management’s impa
irment
assessment of investments in subsid
iary undertak
ings.
Valuation of financ
ial
instruments held at
fair value
•
Received reports and updates at each reporting period detail
ing the key processes undertaken to
produce and validate valuations of financ
ial
instruments, includ
ing any changes
in methodology
from prior years and sign
ificant valuat
ion judgements.
•
Received regular updates on the level of unsold posit
ions
in the syndicat
ion’s portfol
io and the
valuation of these posit
ions and plans for sell down.
•
Reviewed credit valuation adjustments, debit valuation adjustments, funding valuation
adjustments and own credit adjustments, and considered the explanation and rationale for
any sign
ificant movements.
Other areas of focus
Goodwill impa
irment
•
Reviewed the carrying value of goodwill by review
ing management’s annual assessment of
goodwill impa
irment, cover
ing key assumptions (includ
ing forecast d
iscount rate and sign
ificant
changes from the previous year), headroom availab
il
ity and sensit
iv
it
ies to poss
ible changes in key
assumptions and related disclosures.
Capital
isat
ion of
software intang
ibles
•
Received and discussed updates on management’s review of capital
ised software
intang
ibles.
•
Received results of management's testing and coverage.
•
Reviewed management’s assessment of impa
irment and planned
improvements to processes to
capture evidence supporting capital
isat
ion and related controls.
Disposals of businesses in
the Africa and Middle
East (AME) region
•
Reviewed and challenged the accounting treatment and impact of the disposals of the businesses
in the AME region.
Restructuring costs
•
Reviewed and considered, on a quarterly basis, income statement charges and credits classif
ied
as restructuring.
Taxation
•
Considered a paper setting out the key drivers and volatil
ity of the Group’s underly
ing effective tax
rate (ETR) and the Group’s key tax risks and judgements. The Committee considered the elements
that impact the Group’s tax rate and efforts to manage the Group’s ETR.
•
Approved the updated UK Tax Strategy for the year ending 31 December 2024.
•
Approved country-by-country reporting for the year ended 31 December 2023.
Provis
ions for legal and
regulatory matters
•
Received and discussed updates on major disputes and sign
ificant regulatory government
invest
igat
ions facing the Group.
•
Reviewed management’s judgements on the level of provis
ions and the adequacy of d
isclosure.
125
Standard Chartered
– Annual Report 2024
Directors’ report
Other areas of focus
Other accounting
estimates and
judgements
•
Received and considered management updates contain
ing other s
ign
ificant account
ing
judgements (includ
ing w
ith regard to Korea Equity Linked Securit
ies, hyper
inflat
ion and other
sign
ificant fore
ign exchange revaluations).
Going concern
assessment and
viab
il
ity statement
•
Reviewed management’s process, assessment and conclusions with respect to the Group’s going
concern assessment and viab
il
ity statement, includ
ing forward-look
ing Corporate Plan cash
flows, results of various stress tests that explore the resil
ience of the Group to shocks to
its balance
sheet and business model, princ
ipal and emerg
ing risks, liqu
id
ity and capital posit
ions, and
key assumptions.
•
Ensured that the going concern assessment and viab
il
ity statement are consistent with the
Group’s Strategic report and other risk disclosures.
Further details can be found on
pages 45 and 297
Fair, balanced and
understandable
•
Considered, satisf
ied
itself and recommended to the Board that the processes and procedures in
place ensure that the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the informat
ion necessary for shareholders to assess the Group’s pos
it
ion and
performance, business model and strategy, and the business risks it faces.
Examples of deeper
discuss
ions
into
specif
ic top
ics
•
UK ACG reforms implementat
ion:
Considered the impact of legislat
ive and regulatory
developments and impl
icat
ions for the Group. The Committee discussed the benefits for the
Group more broadly on work underway to strengthen processes, controls and assurance. Regular
reports were received from management through Committee meetings and informal interact
ive
sessions focused on internal controls over financ
ial report
ing and wider reporting (includ
ing
key informat
ion
in the Annual Report) and the Group’s defin
it
ion of material controls, which
continues to be worked through. These interact
ive sess
ions were opened up to all Board members.
ACG reporting to the Committee and informal sessions will continue to be a key focus in 2025 ,
includ
ing address
ing the aspects of disclosures, ongoing process and declarations and ensuring
all internal frameworks and processes are in place for the 1 January 2026 legislat
ive go-l
ive date.
EY also reported to the Committee on their observations in relation to the programme, in the
context of their external audit.
•
EY special
ist partner top
ical overviews:
Received a presentation from EY special
ist partners on
the assurance work performed by EY on sustainab
il
ity reporting and how the Group is posit
ioned
in relation to peers. Further presentations were provided on ACG market perspective and ways
to innovate audit work, includ
ing current and future tools that are and could be deployed.
•
Strategic Regulatory Reporting Programme:
Confirmed support for the establishment of a
dedicated Strategic Regulatory Reporting Programme to improve and strengthen all aspects
of regulatory reports, with regular progress updates provided to the Committee.
•
Aspire programme:
Discussed an update on the Group’s Aspire programme (a programme
launched to deliver a modern technology system and data landscape for financ
ial management
and reporting) to ensure that the expected deliverables remain on track, and how this interl
inks
with ACG and FFG programmes.
•
Internal financial controls:
Received and discussed a paper setting out the approach taken to
safeguard the production of the Group’s financ
ial books and records.
•
APMs:
Reviewed and discussed two papers on the Group’s princ
iples
in defin
ing and use of APMs.
The treatment of costs from FFG proposals on APMs were also considered.
•
New financial report
ing and planning:
Reviewed and supported the changes to the basis of
segment/country/cluster reporting for internal and external purposes.
•
Finance resourcing:
Reviewed and discussed a paper provid
ing assurance that the Account
ing,
Financ
ial and Regulatory Report
ing function is adequately and appropriately resourced, in light of
continued implementat
ion of add
it
ional controls under ACG reforms, FFG and the deployment of
the Aspire programme.
•
Data Risk management:
Received and discussed papers outlin
ing the progress be
ing made to
manage and reduce Data Risk exposure, cognisant of the pervasive nature of data quality and
rapidly evolving regulatory landscape. Towards the end of the year, a detailed discuss
ion was held
on the Group’s refreshed Data Strategy, covering all dimens
ions of Data R
isk, and the status of the
forward-looking delivery roadmap. This will continue to be an area of focus for 2025 and beyond.
•
FCA UK Consumer Duty:
Reviewed the annual Board report on Consumer Duty and discussed the
benefits experienced as a result of UK Consumer Duty requirements; whether these benefits and
good practices can be leveraged in our markets; and the importance of reaching out to clients to
check that products remain the right ones during their lifecycle.
126
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Other areas of focus
Group Statutory Auditor,
EY
•
Reviewed and discussed the risks ident
ified by EY’s aud
it planning, as well as EY’s planned audit
strategy in response to those risks. Phil Rivett attended EY’s audit planning meeting for the Group.
•
Satisf
ied
itself that EY has allocated suffic
ient and su
itably experienced resources to address
these risks and reviewed the find
ings from the aud
it work undertaken.
•
Sought and received assurance that no undue pressure has been asserted on the level of audit
fees, to ensure that audit work can be conducted effectively and independently.
•
Conducted an annual review of the performance, effectiveness and independence of EY.
Input was received from Committee members, chairs of subsid
iary aud
it committees, the Group
Management Team, cluster/country chief financ
ial officers, members of the Group F
inance
Leadership Team and GIA senior leadership. The results of these inputs were discussed by
the Committee. Overall, it was concluded that EY is considered to be effective, object
ive and
independent in its role as the Group’s Statutory Auditor. The Committee recommended to the
Board that the re-appointment of EY as the Group’s Statutory Auditor for a further year be
recommended to shareholders at the 2025 AGM.
•
EY provided effective challenge to management’s assumptions as set out in their report on
pages 276 to 286 and demonstrated professional sceptic
ism
in their audit results reports and
inter
im rev
iew reports to the Committee and through discuss
ions at Comm
ittee meetings.
•
Received and discussed a paper setting out EY’s control themes and observations from the
31 December 2023 year-end audit, as well as an update on these matters later in the year.
•
Received EY's private Written Auditor Reporting to the PRA for the year ended 31 December 2023
and reviewed and discussed EY’s approach to Written Auditor Reporting for the year ended
31 December 2024. Updates from management were also provided.
•
Received reports from EY and management regarding EY’s FCA Client Assets audit of Standard
Chartered Bank.
The Committee met privately with EY at the end of certain Committee meetings, without
management being present. Phil Rivett met regularly with the EY partners leading the Group’s audit
during the course of the year.
The Company complies with the Statutory Audit Services for Large Companies Market Investigat
ion
(Mandatory Use of Competit
ive Tender Process and Aud
it Committee Responsib
il
it
ies) Order 2014.
As a UK public interest entity, the Group is required to tender the audit every 10 years and rotate the
auditor every 20 years. As the Committee remains satisf
ied w
ith EY’s performance, the Group has no
current intent
ion of tender
ing for an alternative external auditor to commence before the end of the
current required 10-year period. Any tender would be in respect of 2030 onwards, and would likely
occur in 2027, in order to allow suffic
ient t
ime to plan for a transit
ion.
At the conclusion of the 2024 audit, EY will have been the Group’s Statutory Auditor for five years.
The lead engagement partner up to 2024 was David Canning-Jones, who has a background of
audit
ing banks and understands the markets
in which the Group operates. Following completion
of the audit for the year ending 31 December 2024, Micha Missak
ian, an EY sen
ior audit partner
who is also experienced in audit
ing global bank
ing inst
itut
ions, will assume the role of the lead
audit engagement partner. A thorough shadowing process has taken place between the two
lead partners.
The Company’s last audit tender was in 2017, following which EY was appointed as the Group’s
Statutory Auditor for the financ
ial year ended 31 December 2020. EY was re-appo
inted as the
Group’s Statutory Auditor for the financ
ial year ended 31 December 2024 at the 2024 AGM.
Non-audit services
•
The Group spent $13 mill
ion on non-aud
it services provided by EY (includ
ing aud
it-related
assurance services such as quarterly and half-year reviews and regulatory reporting). Details
of fees for audit and non-audit services can be found in note 38 to the financ
ial statements.
Further details of the Group's approach to non-audit services can be found on pages 190 and 191.
Audit Committee
Min
imum Standard
•
Considered the Audit Committees and External Audit Min
imum Standard publ
ished by the
Financ
ial Report
ing Council in May 2023 and is satisf
ied that the Comm
ittee met the relevant
requirements. Investors were given the opportunity to discuss the scope of the external audit with
the Audit Committee Chair at the Group Chairman’s Stewardship Event in November 2024.
Internal controls
•
Discussed reports from GIA that provide GIA’s view on the system of internal controls across all
risk types, business and country functions, includ
ing summary h
ighl
ights of the most s
ign
ificant
matters ident
ified by GIA and areas of themat
ic interest that have arisen as part of the audits
and warrant the Committee’s attention. On a period
ic bas
is, GIA reports on any overdue
remediat
ion of findings. The Board R
isk Committee and the CSC discussed separate reports
from the Group Head, Internal Audit on GIA’s appraisal of controls across key risks, subject to
each committee’s oversight.
Further details on internal controls can be found on
pages 187 to 188
127
Standard Chartered
– Annual Report 2024
Directors’ report
Other areas of focus
Group Internal Audit
(GIA)
GIA’s primary role is to help the Board and senior management protect the assets, reputation and
sustainab
il
ity of the Group through independent, risk-based, timely and object
ive assurance, adv
ice,
ins
ight and fores
ight. Given this role, Phil Rivett held regular monthly meetings with the Group Head,
Internal Audit and met regularly with members of his senior management team to ensure that
he had vis
ib
il
ity of the
ir work and key emerging issues. The Group Head, Internal Audit also met
privately with the Committee.
The Committee:
•
Assessed the role and effectiveness of the GIA function and reviewed and monitored GIA’s
progress against the 2024 Audit Plan; and the review and monitor
ing of aud
it themes, trends
and sign
ificant
issues. Sign
ificant changes to the Aud
it Plan were also discussed and approved
by the Committee.
•
Reviewed and approved GIA’s 2025 Audit Plan, resourcing and budget, and was satisf
ied that
these were appropriate.
•
Reviewed and approved the refreshed GIA Charter.
•
Received and discussed reports from the Global Head, Audit Quality Assurance on the Quality
Assurance function’s view of the quality of GIA’s audit work, includ
ing trends observed and notable
outcomes and opin
ions.
•
Scrutin
ised any long-overdue
issues raised by GIA and requested management develop risk
reduction plans for items with long closure periods to be monitored by GIA.
•
Reviewed GIA’s functional strategy, includ
ing GIA’s m
iss
ion, v
is
ion and pr
ior
it
ies. The Committee is
satisf
ied w
ith the independence and object
iv
ity of the GIA function.
•
In early 2024, the Committee commiss
ioned Delo
itte to perform an independent External Quality
Assurance review of GIA, as required every five years. The Committee was pleased to note the
report’s conclusions that GIA generally conformed with industry standards and requirements
in key markets and is an independent and effective function. This view is supported by GIA’s
self-assessment, internal quality assurance results and posit
ive feedback from regulators
in
2024. Improvement actions ident
ified from
internal and external reviews are in progress and are
regularly reported to the Committee.
•
The Committee also conducted a performance assessment of GIA for 2024. The Committee was
satisf
ied w
ith GIA's performance against its object
ives agreed w
ith Phil Rivett at the beginn
ing
of this year, and with GIA’s posit
ion and value
in the organisat
ion and
its impact, effectiveness
and efficiency.
CFCR (with effect from
1 January 2025 – formerly
CFCC)
In 2024, the Committee was updated on and discussed:
•
regulators’ supervisory focus areas, regulatory updates and forward-looking themes
•
the status of the Group’s core college regulatory relationsh
ips and enforcement matters
•
topical compliance risks and issues
•
reports from the Group Money Laundering Reporting Officer on the operation and effectiveness
of the Group’s systems and controls for combating money laundering in accordance with
regulatory requirements
•
Group in
it
iat
ives to upl
ift the management of Conduct Risk includ
ing the enhanced Code of
Conduct and Ethics
•
the Conduct Risk Management Standard
•
the function’s operating model.
The Committee also held two deep dive discuss
ions
into topical financ
ial conduct r
isk (FCR) matters:
•
The first deep dive discuss
ion covered the Group’s sanct
ions programme, the types of risks to
which the Group is exposed through our various products, businesses, and clients and our
approach to risk management, the effectiveness of our controls, the Group’s perspective and
assessment of emerging risks and the evolving nature of sanctions.
•
The second, facil
itated by an external speaker from K2 Integr
ity, focused on how to manage FCC
in an evolving risk landscape, the types of FCC risks confronting the Group, lessons learned from
recent applicable case studies, FCC cultural and programmatic risks, and FCC regulatory and
geopolit
ical r
isks. K2 Integrity provided a report setting out reflections and recommendations,
which the Committee will continue to discuss in 2025, alongside Group Money Laundering
Reporting Officer reports.
Both discuss
ions were opened up to all Board members and
informed our think
ing and
understanding of these important topics.
Phil Rivett met regularly throughout the year with the former Group Head, CFCC ,and the current
Group Head, CFCR.
Speaking Up
The Committee reviewed and discussed an annual report on the operation and effectiveness
of Speaking Up, the Group’s confident
ial wh
istleblow
ing programme. The report prov
ided the
Committee with assurance of the Group’s ongoing compliance with the PRA and the FCA’s
Whistleblow
ing Rules. Once rev
iewed and discussed by the Committee, this report was submitted
to the Board.
In 2024, the Committee Chair received updates on Speaking Up outside of formal Committee
meetings, and regularly met with senior management from our Conduct and Compliance teams.
128
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Other areas of focus
Interaction with
regulators
•
Phil Rivett attended a trilateral meeting with EY and the PRA and also met with the PRA in his
capacity as Audit Committee Chair.
Linkages with subsid
iary
audit committees
•
In 2024, Phil Rivett attended an audit committee meeting of each of SCBHK and SCBSL. The audit
committee chairs of SCBHK and SCBSL attended one Standard Chartered PLC Audit Committee
meeting. This practice will continue in 2025 to reinforce these important linkages.
•
Phil Rivett hosted an annual videoconference with the chairs of subsid
iary aud
it committees and
INEDs in March 2024.
Please refer to
page 122
on linkages between the Committee and chairs of subsid
iary aud
it committees.
Committee effectiveness in 2024
The 2024 Board and Committees’ effectiveness review was conducted internally, facil
itated by the Group Company Secretary,
and in accordance with the UK Code.
Progress against last year's Action Plan
The Action Plan set out a number of actions aris
ing from the
internally facil
itated effect
iveness review conducted in 2023.
The 2024 Action Plan was regularly reviewed during the year and good progress has been made against the actions.
Key observations from the 2024 internal effectiveness review
The composit
ion of the Comm
ittee and its
areas of focus during the year have been stable
in 2024, allowing the review to focus more
on the dynamics of the Committee includ
ing
interact
ions w
ith advisors and management.
Feedback on the Committee’s function
ing and
effectiveness was posit
ive and spec
if
ically
highl
ighted the follow
ing:
•
The Committee’s composit
ion and dynam
ics
were rated highly, with the Committee
benefitting from the members’ w
ide range
of skills and experience, and the Chair’s
collegiate working style. This will need to be
reviewed in 2025, following the retirement of
two Committee members in 2024.
•
Contribut
ions from management, GIA
and EY were rated highly, with Committee
members prais
ing all for the
ir availab
il
ity and
will
ingness to d
iscuss topics; give brief
ings
outside of meetings; and for their strong,
pro-active engagement with the Committee.
•
Good progress was made on the key topics
of Data Risk management and ACG reforms
and will continue to be key areas of focus for
the Committee in 2025.
2025 Action Plan
The 2025 Action Plan for the Committee
reflects suggestions from the review and
continues to build on the solid progress
made last year:
•
Continue to monitor the performance
of EY, includ
ing the trans
it
ion to the new
lead partner.
•
Work closely with the Board Risk Committee
to monitor progress with the implementat
ion
of the ACG reforms.
•
In conjunction w
ith the Governance and
Nominat
ion Comm
ittee, consider the
composit
ion of the Comm
ittee to ensure it
mainta
ins the requ
ired skills.
129
Standard Chartered
– Annual Report 2024
Directors’ report
Board Risk Committee
I am pleased to present the report of the Board Risk Committee
for 2024 and share with you the highl
ights of our work:
•
Remain
ing abreast of the
impacts of geopolit
ical and
sovereign risks, together with those aris
ing from the elect
ion
super-cycle on our business.
•
Continu
ing to embed robust governance and best pract
ice
for ICS Risk across our footprint, cognisant of the rapidly
evolving risk landscape.
•
Overseeing operational and technology risks, includ
ing our
substantial technology simpl
ification programmes.
•
Paying close attention to transformational change
management programmes with strategic importance for
the Group and organisat
ional change more broadly.
•
Regularly monitor
ing financial r
isk concentrations and
review
ing stress test
ing to ensure we understand and
mit
igate any vulnerab
il
it
ies in our portfolio.
•
Testing and improv
ing our recovery and resolut
ion capabil
it
ies.
•
Monitor
ing the key r
isks and opportunit
ies ar
is
ing from our
FFG objectives to ensure the cont
inued efficacy of our risk
and control environment.
•
In conjunction w
ith the Board and Audit Committee,
continu
ing to mon
itor Financ
ial Cr
ime Risk, which is
becoming more prevalent and needs careful protection
against for the Group, our clients and stakeholders
more broadly.
Maria Ramos
Chair
Board Risk Committee
Committee Composit
ion and Attendance
Maria Ramos
Shir
ish Apte
David Conner¹
Gay Huey Evans, CBE²
Robin Lawther, CBE
Phil Rivett
David Tang³
Carlson Tong⁴
3/3
3/3
3/3
n/a
3/3
3/3
3/3
1/1
Ad hoc
6/6
6/6
6/6
1/1
6/6
6/6
6/6
2/3
1
David Conner stepped down from the Committee on 30 December 2024.
2
Gay Huey Evans stepped down from the Committee on 29 February 2024.
3
David Tang stepped down from the Committee on 1 January 2025.
4
Carlson Tong stepped down from the Committee on 9 May 2024.
Carlson did
not attend one meeting due to a prior business commitment.
Note: Jackie Hunt and Diane Jurgens jo
ined the Comm
ittee on
1 January 2025.
As part of, and in addit
ion to scheduled Comm
ittee meetings,
the Committee held private members-only meetings.
The Committee’s membership comprises INEDs who have a deep
and broad experience of banking and the risk factors affecting the
Group, includ
ing geopol
it
ical, econom
ic, IT, Financ
ial Cr
ime and
general business risks.
Addit
ional attendees
The Group Chairman; Group Chief Executive; Group Chief Financ
ial
Officer; GCRO; Group Head of Enterprise Risk Management;
Group Treasurer; Group Head, Conduct, Financ
ial Cr
ime &
Compliance; Group Head, Internal Audit; the Group’s Statutory
Auditor and the Group Company Secretary also attended
Committee meetings. Sir Iain Lobban, our cyber adviser to the
Board, regularly attended discuss
ions on ICS R
isk and technology-
related matters. EY attended most Committee meetings in 2024.
Purpose and responsib
il
it
ies
The Committee is responsible for exercis
ing overs
ight, on behalf
of the Board, of the key risks of the Group. It reviews the Group’s
Risk Appetite Statement and ERMF and makes recommendations
to the Board. The Committee Chair reports to the Board on the
Committee’s key areas of focus following each meeting.
The Committee has written Terms of Reference that
can be viewed at
sc.com/termsofreference
“We have been cognisant of geopolit
ical and other changes
that might occur across the world and have the potential to
impact every corner of our business. The Committee has
worked closely with management to monitor and mit
igate
exist
ing and emerg
ing risks; and to take advantage of the
new opportunit
ies that have ar
isen to better serve our clients
and communit
ies.”
130
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Activ
it
ies during the year
Key matters
Geopolit
ical and
sovereign risks
•
Received regular reports on the potential impl
icat
ions for the Group from global conflicts,
and any potential impacts to the Group from the decoupling of China and the US. Ensured
the Committee remains well informed of, and forward-looking to, the evolving geopolit
ical
risk environment.
•
The 2024 election super-cycle led to a number of discuss
ions, whereby we cons
idered a wide
range of potential policy changes and their impl
icat
ions for the Group, includ
ing
impacts for
our clients, markets, colleagues and regulators, which present both risks and opportunit
ies.
Operational, Technology
and Cyber Risk
•
Reviewed and discussed reports on the risk environment, includ
ing the progress of key
transformational change management and technology simpl
ification programmes,
scrutin
is
ing the overall risk assessments, resources, capabil
it
ies and delivery against milestones.
•
Discussed reports on data centre resil
ience and updates on the Group’s cloud strategy, w
ith
input and representation from the three lines of defence.
•
Reviewed and discussed the replacement of our core banking applicat
ions and data centres.
•
Monitored progress made on the ICS Strategic Plan, includ
ing regular rev
iew of ICS Risk
Appetite and risks that could impact delivery of the strategic plan.
•
Monitored the overall ICS Risk Profile, includ
ing rev
iew of the Chief Information Security Officer
Control Indicators report, as well as any areas of concern highl
ighted.
•
Received regular external perspective from Sir Iain Lobban, our cyber adviser to the Board,
along with representation from the three lines of defence.
•
Conducted deep dive sessions into Third Party Security Risk Management and Insider Risk.
•
Paid particular attention to systems, people, governance and embedding best practice across
our footprint, to ensure that resources are maxim
ised, fac
il
itat
ing a culture of continuous
discovery and development.
Recovery and
resolution planning
•
Continued to oversee how the Group tested and improved its resolution capabil
it
ies in line with
the Bank of England’s (BoE) Resolvabil
ity Assessment Framework. Th
is year, we conducted a
number of subsid
iary board s
imulat
ion exerc
ises for our Korea, Singapore and China boards;
and tested our recovery and resolution planning capabil
it
ies in the UK.
•
Continued to oversee work to improve the Group’s wind-down capabil
it
ies, includ
ing
its
operational execution, and work to comply with the PRA’s Trading activ
ity w
ind down
requirements.
•
Reviewed and discussed the Group’s Resolvabil
ity Publ
ic Disclosure and regulatory feedback
from the BoE and PRA.
Other areas of focus
Risk Appetite
•
Reviewed, challenged and approved at half year changes to the Group’s Risk Appetite and
Board metrics.
•
Reviewed, challenged and recommended to the Board changes to the Group’s Risk Appetite
Board metrics.
•
Challenged whether the Risk Appetite appropriately sets boundaries for each Princ
ipal R
isk
Type (PRT).
•
Reviewed and discussed the Risk Appetite affordabil
ity assessment aga
inst a range of stress
scenarios, concluding that the proposed Risk Appetite remains affordable.
•
Monitored actual exposures throughout the year relative to Risk Appetite lim
its us
ing Board
Risk Information reports.
Further details of the Group’s Risk Appetite are set out on
page 28
Enterprise Risk
Management
Framework (ERMF)
•
Reviewed proposed material changes to the ERMF, following the 2024 annual review, and
recommended these changes to the Board for approval.
•
Assessed the approach and key outcomes of the 2024 annual effectiveness review of the
ERMF. Affirmation was rece
ived from the GCRO that the Group’s risk management and
internal control framework is materially effective, and ident
ified areas for
improvement
were highl
ighted for management and the Comm
ittee's attention.
•
Received reports on the Group’s PRTs at all scheduled meetings and also conducted deeper
discuss
ions on top
ics outlined on page 28.
Further details of the
ERMF
are set out on
pages 196 to 200
and further details on
PRTs
, includ
ing the definit
ions
of each, are set out on
page 28
131
Standard Chartered
– Annual Report 2024
Directors’ report
Other areas of focus
Model Risk
•
Discussed the extension of the exist
ing Model R
isk Management (MRM) framework and
annual controls attestation, as part of requirements set by PRA relating to MRM for banks
(SS1/23).
•
Received updates on the Group Model Risk profile, Risk Appetite and the progress of Model
Risk strategic in
it
iat
ives, and d
iscussed material risks.
•
Received train
ing on Model R
isk, which was opened up to all Board members.
Treasury Risk
•
Received reports from the Group Treasurer at each scheduled meeting covering: market
condit
ions and developments; fund
ing, liqu
id
ity and interest rate risks, balance sheet
movements and forecast, capital and leverage, includ
ing the est
imated impact of Basel 3.1,
recovery and resolution planning includ
ing the Group’s Resolvab
il
ity Assessment, and
applicable regulatory updates.
•
Considered and discussed the Group’s capital and liqu
id
ity posit
ion, along w
ith the evolving
regulatory environment, in the context of regulatory submiss
ions.
•
Reviewed, discussed and challenged papers on Interest Rate Risk in the banking book, the
Treasury Hold to Collect securit
ies portfol
io, the Group’s ICAAP and the Group’s ILAAP.
Stress testing
•
Provided oversight, challenge and, where required, approval for:
–
the Group's ICAAP submiss
ion,
includ
ing scenar
ios analysis, stress test outcomes and reverse
stress test results
–
the Group's ILAAP submiss
ion,
includ
ing the scenar
io analysis and stress test results
– the updated Group Recovery Plan, includ
ing stress tests results.
•
Reviewed, discussed and challenged the outcomes and key find
ings of stress tests, part
icularly
management’s assumptions and the quality of informat
ion prov
ided, to monitor resil
ience.
For further detail on the Committee’s work on stress testing see
pages 197 to 198
The Committee’s work on Resolvabil
ity
is set out on
page 203
Credit Risk
•
Received and discussed updates on Credit Risk, with China-related impa
irments be
ing a key
area of focus, cognisant of the work of the Audit Committee. These discuss
ions were further
enhanced through deep dives into various countries, sovereigns, industr
ies and bus
iness/
client segments.
Traded Risk
•
Received and discussed reports on developments and changes in the risk profile of Treasury
and Financ
ial Markets and res
il
ience of the F
inanc
ial Markets bus
iness.
•
Discussed a report on the CIB Fair Value portfolio, which included an update on the strategy
and risk infrastructure for financ
ial
inst
itut
ion clients.
•
Received train
ing on Traded R
isk, which was opened up to all Board members.
Regulatory
•
Received regular updates from the three lines of defence, which provided the Committee with
oversight of the Group’s progress on the following areas:
– Recovery and Resolution Planning
– Resolvabil
ity Assessment
– Trading Activ
ity W
ind-Down
–
Operational Resil
ience,
includ
ing approval of the Operat
ional Resil
ience Group Self-Assessment
submitted to the UK regulators; and material changes to the Group’s Important Business Services
and Impact Tolerance Statements
–
BCBS 239 Self-Assessment and Roadmap, and the status of the Group’s compliance with
BCBS 239.
•
Discussed key communicat
ions rece
ived from the PRA and FCA
•
Discussed the coverage of 2024 regulatory prior
it
ies and the Group’s approach to mainta
in
ing
ongoing engagement and interact
ion w
ith regulators.
Internal controls for
key risks
•
Discussed reports from the Group Head, Internal Audit which provided summaries of GIA’s
appraisal of controls across key risks, subject to the Committee’s oversight, together with
the key risk issues ident
ified by GIA’s work and management act
ions put in place to address
the findings.
•
Reviewed the annual Risk and Control Self-Assessment, noting the embedded process
and
forward focus of sustainab
il
ity. Areas of elevated residual risk were discussed in the context
of the overall risk profile.
Further details on internal controls are set out on
pages 187 to 188
132
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Other areas of focus
Remuneration as a risk
management tool
•
Considered advice provided by the GCRO to the Remuneration Committee concerning the risk
factors to be taken into account by the Remuneration Committee in determin
ing the outturns
for incent
ives for the Group Ch
ief Executive and other colleagues. Such advice assists the
Remuneration Committee in its assessment as to whether the Group’s remuneration policy,
practices and procedures are consistent with and promote sound and effective risk management,
and do not encourage risk-taking that exceeds the level of tolerated risk of the Group.
Further details concerning the Group’s approach to using remuneration as a risk management tool is set out in
the
Directors’ remuneration report
on
pages 143 to 174
Examples of deeper
discuss
ions
into
specif
ic top
ics
•
CIB and WRB Risk reviews:
Received and discussed papers covering the WRB and CIB
portfolios and, in particular, areas of focus such as change management, unsecured dig
ital
lending partnerships and Private Equity financ
ing act
iv
it
ies. Financ
ial Cr
ime and ICS risks in the
context of these businesses and markets were focused on to fully understand how these risks,
which are becoming more prevalent and sophist
icated, are be
ing managed and mit
igated.
•
Credit and Portfolio Management (CPM):
Considered the review of the CPM mandate,
assets and liab
il
it
ies opt
im
isat
ion.
•
Embedding Change Management Lessons Learned across the CIB Change Portfolio:
Discussed the programme of continuous improvement being undertaken and leveraging
lessons learned from change in
it
iat
ives.
•
Third Party Risk:
Reviewed deeper analysis on third party arrangements, key milestones and
overall risk assessment.
•
Environment, Social, Governance and Reputational (ESGR) Risk:
Discussed a paper setting
out the Group’s approach to managing ESGR Risk, includ
ing key areas of focus.
•
Safety and Security Risk:
Received and discussed an update on safety and security issues
over the past 12 months.
•
Credit Risk review:
Discussed reports includ
ing progress made and key themes and
ins
ights
from the 2024 reviews, and the review plan for 2025.
•
SC Ventures Risk and Governance:
Received an update on the risk posture, governance
structures and control environment of the SC Ventures business unit.
•
Dig
ital Assets R
isk:
Received an update on the key risks associated with the Group’s current
and planned dig
ital assets act
iv
it
ies.
Interaction with
regulators
•
Maria Ramos attended meetings with the PRA in 2024.
Linkages with subsid
iary
risk committees
•
In 2024, Maria Ramos attended a risk committee meeting of SCBHK. The risk committee chairs
of SCBHK and SCBSL attended one Board Risk Committee meeting. This practice will continue
in 2025 to reinforce these important linkages.
•
Maria Ramos hosted an annual videoconference with the chairs of subsid
iary board r
isk
committees and INEDs in July 2024.
Please refer to
page 122
on linkages between the Committee and chairs of subsid
iary board r
isk committees
133
Standard Chartered
– Annual Report 2024
Directors’ report
Committee effectiveness in 2024
The 2024 Board and Committees’ effectiveness review was
conducted internally, facil
itated by the Group Company
Secretary, and in accordance with the UK Code.
Progress against last year's Action Plan
The Action Plan set out a number of actions aris
ing from the
internally facil
itated effect
iveness review conducted in 2023.
The 2024 Action Plan was regularly reviewed during the year
and good progress has been made against the actions.
Key observations from the 2024 internal effectiveness review
This year’s review came in an exceptionally
busy year for the Committee, which considered
a number of wide-ranging risks.
The Chair
was commended for her stewardship of the
Committee, working closely with management
to select appropriate topics for discuss
ion.
The feedback on the Committee’s function
ing
highl
ighted the follow
ing:
•
There has been a sign
ificant
improvement in
the quality of papers, which has facil
itated
much better discuss
ions
in meetings. The
length and timely circulat
ion of papers w
ill
remain a focus.
•
The GCRO and the Risk Function were highly
rated, with good engagement and an
open relationsh
ip w
ith the Chair and other
Committee members.
•
The Committee’s oversight of the risks facing
the business was highly rated and both
the Committee and management were
viewed to be good at horizon scanning for
emerging risks.
2025 Action Plan
The 2025 Action Plan for the Committee reflects
suggestions from the review and continues to
build on the platform from last year:
•
Consider increas
ing the meet
ing time for
the Committee, and refocus agendas away
from risks which are now in appetite to
emerging ones.
•
Continue to monitor the length, focus and
timel
iness of papers, part
icularly focusing
on executive summaries and consistently
setting out the interconnect
iv
ity of risks,
where relevant.
•
Continue to review and min
im
ise the
duplicat
ion of top
ics being reviewed from
multiple perspectives by Board Committees
and the Board.
•
Schedule train
ing on ICS, FCR, MRM, the
Board Risk Appetite on Data Risk, Climate
and Treasury matters.
Risk informat
ion prov
ided to the Committee
The Committee is authorised to seek any informat
ion that
will allow the Committee to fulfil its governance mandate
relating to risks to which the Group is exposed, and alert senior
management when risk reports do not meet its requirements.
The Committee receives regular reports on risk management
and tracks a wide range of risk metrics through a Board Risk
Information report. This report provides an overview of the
Group’s risk profile against the Group’s Risk Appetite Statement.
The GCRO’s report covers the macroeconomic environment,
geopolit
ical outlook, mater
ial events and disclosures, and
ongoing risks. Coverage of PRTs and regulatory matters are
also included in this report.
Interaction with management
Senior management has attended Committee meetings for
deeper discuss
ion of agenda
items. The Committee Chair also
meets ind
iv
idually with senior leaders of the Risk function.
Interaction with the Group Chief Risk Officer
The Committee Chair meets regularly with the GCRO and
senior leaders in the Risk function. Senior managers are held
accountable for risk issues and report to the Committee, where
matters are reported by the GCRO.
Committee links with other Board committees
The Committee interacts closely with other Board Committees
where the remit of these other Committees clearly covers
risk-related matters. For example, the Audit Committee reviews
the Group’s internal financ
ial controls and has overs
ight of
regulatory compliance and Data Risk. The Remuneration
Committee receives advice from the Committee regarding risk
and control matters to be taken into account for remuneration
decis
ions. The CSC has overs
ight of culture and sustainab
il
ity-
related matters. The interact
ion ass
ists the Committee in
ensuring that it is well informed on discuss
ions held, and the
close collaboration of the Committee Chairs helps to ensure
that there are no gaps and any potential for unnecessary
duplicat
ion
is avoided.
Resources
The Committee has sought and received assurance that
the Risk function is adequately resourced to perform its
remit effectively.
Disclosures
The Committee has reviewed the risk disclosures in the Annual
Report and the Half-Year Report and has also reviewed the
disclosures regarding the work of the Committee.
134
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Culture and Sustainab
il
ity Committee
I am pleased to present the report of the Culture and
Sustainab
il
ity Committee for 2024 and share with you the
highl
ights of our work:
•
Oversaw good progress against the Group’s net zero
roadmap. The Committee endorsed the baseline and target
for the agriculture sector which has been published in the
Sustainab
il
ity Review on page 82. This completes the Group’s
target setting of the 12 highest carbon-emitt
ing sectors.
Agriculture is a notoriously diff
icult sector
in which to set a
target and we are conscious of the dichotomy between
driv
ing goals towards net zero wh
ile also ensuring our
communit
ies benefit from a just trans
it
ion. In the context of
agriculture, we aim to strike a balance between reducing
carbon emiss
ions wh
ile also protecting food security and
the liv
ing standards of farmers.
•
Reviewed the proposal for a refreshed Culture Dashboard
which will be operational
ised
in 2025, taking into account
the Committee’s feedback. The purpose of the dashboard is
to provide a comprehensive overview of cultural change by
reporting on several key metrics that allow us to monitor the
progress of our culture journey and aid local decis
ion-mak
ing
to drive further progress.
•
Received a train
ing sess
ion on Nature, an important area of
focus for the Committee. I’m delighted to see the progress
we are making in this area, particularly through our early
adoption of the Taskforce on Nature-related Financ
ial
Disclosures, which reflects our commitment to advancing
our work with Nature.
I am extremely proud of the awards that the CSO Organisat
ion
have been awarded this year, includ
ing Susta
inab
il
ity Team
of the Year from the Airl
ines Econom
ics Sustainab
il
ity Awards
for our contribut
ion to the Pegasus Pr
inc
iples for the Av
iat
ion
sector and a series of 30+ awards from The Asset Triple A
Sustainable Finance Awards.
Dr Linda Yueh
Chair
Culture and Sustainab
il
ity Committee
Committee composit
ion and attendance
Dr Linda Yueh CBE (Chair)
Jackie Hunt
1
Diane Jurgens
2
Robin Lawther CBE
David Tang
4/4
3/3
3/3
4/4
4/4
1
Jackie Hunt stepped down from the Committee on 8 December 2024
2
Diane Jurgens jo
ined the Comm
ittee on 1 March 2024
Addit
ional attendees
The Group Chairman; Group Chief Executive; Chief Strategy and
Talent Officer; Chief Sustainab
il
ity Officer and Group Company
Secretary also attended Committee meetings in 2024.
Purpose and responsib
il
it
ies
The Committee is responsible for overseeing the Group’s culture
and sustainab
il
ity prior
it
ies. The Committee Chair reports to the
Board on the Committee’s key areas of focus following each
meeting.
The Committee has written Terms of Reference that
can be viewed at
sc.com/termsofreference
“The Committee has been busy overseeing the Group’s
net zero journey against an ever-changing external
environment, review
ing progress aga
inst the Group’s
Stands and monitor
ing the Group’s culture asp
irat
ion.”
135
Standard Chartered
– Annual Report 2024
Directors’ report
Activ
it
ies during the year
Key matters
Sustainab
il
ity and ESG
•
Oversaw progress on the Group’s net zero roadmap, includ
ing the comm
itment for our Scope 1 and
2 emiss
ions to be net zero by 2025, and progress towards meet
ing the Group’s financed emiss
ions
inter
im targets for h
igh-emitt
ing sectors by 2030.
•
Reviewed and discussed the Group’s Sustainab
il
ity Strategy and recommended the 2025
sustainab
il
ity strategic prior
it
ies to the Board.
•
Reviewed and endorsed the Group’s Transit
ion Plan, challeng
ing the CSO Organisat
ion to deta
il
how they have translated our net zero commitments into an actionable plan and satisf
ied
itself
that there is suffic
ient resource across the Group to
implement the commitments being made.
•
Discussed and endorsed the approach to baseline and target the agriculture sector on Implied
Temperature Rating, which had been chosen as it considered the social element of ESG by avoid
ing
carbon targets on specif
ic crops and smaller farms, wh
ich could endanger food security.
•
Discussed and endorsed the oil and gas facil
itated em
iss
ions target.
•
Considered a progress update on the Group’s Sustainab
il
ity Aspirat
ions and endorsed four new key
performance ind
icators (KPIs) follow
ing the achievement of six KPIs in 2024.
•
Reviewed, challenged and endorsed the proposed changes to the Human Rights Posit
ion
Statement, expressing concern for the increas
ing
issues faced globally in tackling infr
ingements
of human rights.
•
Monitored the Group’s performance against assessments produced by our prior
it
ised external
ratings agencies.
•
Received train
ing on Nature, wh
ich was opened up to all Board members.
Our Stands (Accelerating
Zero, Lift
ing Part
ic
ipat
ion
and Resetting
Globalisat
ion)
•
Reviewed and discussed the year-end assessment on the achievement of the Stands, and endorsed
the proposed sustainab
il
ity and Stands measures for inclus
ion
in the Group’s remuneration, ahead
of approval by the Remuneration Committee.
•
Discussed the Lift
ing Part
ic
ipat
ion Stand, which had been refocused to reflect the reviews of
operations in markets with
in the WRB bus
iness. On the community impact component of this
Stand, the Committee discussed Futuremakers and how to maxim
ise the
impact of the programme.
•
Discussed the complexit
ies of sett
ing metrics for the Resetting Globalisat
ion Stand and offered
suggestions which were considered by management. The updates were subsequently endorsed by
the Committee.
•
Continued to monitor the Accelerating Zero Stand through the work outlined in the Sustainab
il
ity
section above.
Culture, Divers
ity and
Inclusion (D&I) and Board
workforce engagement
•
Received an update on the ongoing work to deliver on the Group’s culture aspirat
ion of a ‘One
Bank culture of ambit
ion, act
ion and accountabil
ity that puts our cl
ients at the heart of all we do’.
Our valued behaviours continue to be the practical way we will manifest our aspirat
ional culture.
The Committee commended the work ongoing to strive for further build
ing leadersh
ip capabil
ity
and encouraged the team to accelerate the leadership train
ing programme.
•
Discussed and gave guidance on the Culture Dashboard, which had been reviewed to ensure that
it met the needs of the Group’s culture agenda and will be relaunched in 2025.
•
Monitored progress against the divers
ity and
inclus
ion strategy dur
ing a period of organisat
ional
change and discussed the high-impact actions to achieve targeted outcomes. These include:
developing a diverse talent pipel
ine to
improve leadership representation, sponsorship skills
build
ing for our leaders to foster pos
it
ive career progress
ion and refreshing the Employee Resource
Group approach to enhance colleague experience.
•
Received a report from GIA on its activ
it
ies and opin
ions w
ith respect to culture and sustainab
il
ity,
and commended GIA for introduc
ing cultural trends
into audits as it represents an innovat
ive
method of assessing the Group’s culture.
•
Received the annual employee engagement survey (My Voice) and probed the results to
understand what was driv
ing the scores and challenged the team on areas for
improvement.
•
Received an update on the Board Workforce Engagement programme, which included the key
themes from the three formal events which took place in China, India and Kenya as part of the
market vis
its, and a summary of reflect
ions from directors and the colleagues who partic
ipated.
136
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Committee effectiveness in 2024
The 2024 Board and Committees’ effectiveness review was conducted internally, facil
itated by the Group Company Secretary,
and in accordance with the UK Code.
Progress against last year's Action Plan
The Action Plan set out a number of actions aris
ing from the
internally facil
itated effect
iveness review conducted in 2023.
The 2024 Action Plan was regularly reviewed during the year and good progress has been made against the actions.
Key observations from the 2024 internal effectiveness review
This was a year of change for the Committee,
as it transit
ioned
its focus towards driv
ing
the Group’s sustainab
il
ity ambit
ions.
The feedback on the Committee’s function
ing
and effectiveness highl
ighted the follow
ing:
•
Good progress was being made on the
reposit
ion
ing of the Committee and
improvements had been made in the
fluency of meetings.
•
Contribut
ions from the Susta
inab
il
ity team
were rated highly, with good progress made
across the Group’s net zero ambit
ions.
•
The quality of papers had improved during
the course of the year and were now rated
to be of a good standard, but would benefit
from being more concise.
2025 Action Plan
The 2025 Action Plan for the Committee reflects
suggestions from the review and continues to
build on the solid progress made last year:
•
The Committee will continue to refine
its object
ives
in order to complete its
reposit
ion
ing during 2025.
•
Continue to focus on ensuring papers are
concise, focus on key points and that the
level of detail in presentations is calibrated.
137
Standard Chartered
– Annual Report 2024
Directors’ report
Governance and Nominat
ion Comm
ittee
I am pleased to present the report of the Governance and
Nominat
ion Comm
ittee for 2024 and share with you the
highl
ights of our work:
•
Overseeing comprehensive search processes that led to
the appointments of Diane Jurgens and Lincoln Leong to
our Board.
•
Meeting our Board gender and ethnic
ity d
ivers
ity targets.
•
Continu
ing to focus on our sk
ills matrix in our succession
planning, ensuring our Board and Management Team
mainta
ins
its rich divers
ity of sk
ills, experience and
backgrounds.
•
Undertaking a detailed review of governance across our
subsid
iar
ies, following structural changes in the Group
aimed at moving the focus of management towards
business sectors and away from the regional clusters.
Dr José Viñals
Chair
Governance and Nominat
ion Comm
ittee
Committee composit
ion and attendance
José Viñals (chair)
Shir
ish Apte
Linda Yueh
Maria Ramos
Phil Rivett
4/4
4/4
4/4
4/4
4/4
The Group Chief Executive, Chief Strategy and Talent Officer and
Group Company Secretary also attended Committee meetings
in 2024.
Purpose and responsib
il
it
ies
The Committee has responsib
il
ity for advis
ing the Board and
committees on their composit
ion, appo
intments and succession.
The Committee also monitors and advises on the impact of
changes to corporate governance affecting the whole Group.
The Committee Chair reports to the Board on the Committee’s
key areas of focus following each meeting.
The Committee has written Terms of Reference that
can be viewed at
sc.com/termsofreference
“In another busy year for the Committee, we have
scoured the market to secure the best non-executive
talent to help your Board meet the business and
governance challenges the Group will face in a
constantly changing world.”
138
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
We are pleased to report that as at 31 December 2024 our Board met the divers
ity targets set out
in UK List
ing Rules. Board
divers
ity data
is collected by way of self-ident
ification. D
irectors and members of the Management Team were presented
with the prescribed disclosure categories and asked to respond based on their self-ident
ification.
Board composit
ion as at 31 December 2024
Experience
Experience
International
experience
Representation
from our markets
INED tenure
(includ
ing Cha
ir)
0-1 year
1-3 years
3-6 years
6-9 years
Board gender divers
ity
Female
5
Male
7
42
%
(2023:38%)
Number of senior of posit
ions
(CEO, CFO, SID and Chair)
Female
1
Male
3
25
%
(2023: 25%)
Board ethnic divers
ity
White
8
Ethnic minor
ity
background
4
Number of
Board members
Percentage of
the Board
(%)
Number of
senior posit
ions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management
*
Percentage
of executive
management
*
(%)
Men
7
58
3
7
54
Women
5
42
1
6
46
Number of
Board members
Percentage of
the Board
(%)
Number of
senior posit
ions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management
*
Percentage of
executive
management
*
(%)
White Brit
ish or other Wh
ite
(includ
ing m
inor
ity-Wh
ite groups)
8
67
4
5
38
Mixed/multiple ethnic groups
0
0
0
0
0
Asian/ Asian Brit
ish
4
33
0
6
46
Black/African/Caribbean/Black Brit
ish
0
0
0
1
8
Other ethnic group
0
0
0
0
0
Not specif
ied/prefer not to say
0
0
0
1
8
* Includes our Management Team as at 31 December 2024, plus the Group Company Secretary, but excludes inter
im members.
Information is as at 31 December 2024.
Gender and ethnic divers
ity
33
%
(2023: 31%)
100
%
83
%
20%
40%
30%
10%
139
Standard Chartered
– Annual Report 2024
Directors’ report
Activ
it
ies during the year
Key matters
Board and senior talent
succession planning
•
Considered a range of potential future INED candidates, in order to mainta
in the necessary range
of skills, experience, knowledge and perspectives on the Board, taking into account the length of
tenure of the INEDs, and the importance of regularly refreshing the Board membership. Russell
Reynolds¹ were engaged throughout the year to assist with the search.
•
In view of the departure of Carlson Tong, engaged Russell Reynolds to perform a search of
candidates with experience and connections in the Hong Kong market culminat
ing
in the
appointment of Lincoln Leong as an INED.
•
Discussed management’s executive talent approach and approved the Group Management Team
and Group Chief Executive Officer succession plans for the Group.
1
Russell Reynolds also provides senior resourcing to the Group. The Company is not aware of any ongoing business relationsh
ip between Russell Reynolds and the
Company’s directors
Other areas of focus
Succession planning
•
Reviewed succession plans for the committee chair roles and ident
ified appropr
iate ind
iv
iduals with
the necessary skills and attributes to provide emergency cover as required.
Board and Committees
effectiveness review
•
Oversaw the Board and committees’ effectiveness review (see page 119), and monitored
progress against the 2024 Action Plan, which addressed the key observations from the 2023
effectiveness review.
•
Discussed observations and recommendations aris
ing from th
is review and recommended to the
Board the 2025 Action Plan.
Independent cyber
security adviser
•
Recommended the extension of Sir Iain Lobban’s appointment as the independent cyber security
adviser to the Board and concluded that his advice remained invaluable, with his role expanding to
encompass advice on our exploitat
ion of data from 2025.
External interests and
directors’ independence
•
Conducted a review of the directors’ exist
ing and prev
iously authorised potential and actual
situat
ional confl
icts of interest and concluded that there were no circumstances which would
necessitate any of these authorisat
ions be
ing revoked or amended.
•
Noted directors’ other directorsh
ips and bus
iness interests taken on during the year in the context of
time commitment, over-boarding and the regulatory and shareholder lim
its on d
irectorsh
ips as well
as other regulatory requirements in this area.
•
Reviewed the independence of each of the non-executive directors, taking into account any
circumstances with a reasonable prospect of impa
ir
ing their independence, and found that each
of the INEDs continued to be independent.
Subsid
iary governance
•
Received updates from the Group Heads of CIB and WRB, and from the Group’s International
President, who have management responsib
il
ity for the Group’s subsid
iar
ies, on the Group’s
approach to subsid
iary governance. Th
is included a look at our compliance with exist
ing corporate
governance rules across the Group and horizon scanning for changes across our markets.
Terms of Reference
•
Conducted a review of the Committee's Terms of Reference, taking into account applicable rules
and best practice in the UK and Hong Kong. Minor amendments were made, princ
ipally to al
ign
with the 2024 UK Corporate Governance Code.
Committee composit
ion
•
Reviewed our skills matrix and made changes to committee composit
ion.
Succession planning and Board appointments
The Committee considers the likely technical skills required for the Board in the context of the development and execution of
the Group’s strategy. This drives the Committee’s succession planning approach. The Committee also keeps under review the
Group’s succession plans in relation to executive directors and senior management, whereby internal successors are assessed
and developed alongside ident
ify
ing external candidates where required. The directors have power under the Company’s
articles of associat
ion to appo
int new directors. Newly appointed directors retire at the AGM following appointment and
are elig
ible for elect
ion. As required by the UK Code, all directors are subject to annual re-election by shareholders subject to
continued satisfactory performance based upon their annual assessment. Non-executive directors are appointed for an in
it
ial
period of one year and subject to (re)election by shareholders at AGMs, in line with the UK Code.
140
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Implementation of our Board Divers
ity Pol
icy
The Committee conducted its annual review of our Board Divers
ity Pol
icy (the Policy) in 2024. No changes were made to the
Policy. Although the Policy does not contain specif
icat
ions or targets for committee membership, the Policy provides for a
diverse Board with a wide range of skills and perspectives which its members bring to our Board committees.
Progress against Board Divers
ity Pol
icy object
ives
We set out below our progress against our Board Divers
ity Pol
icy as at 31 December 2024. Information on the Group’s wider
divers
ity and
inclus
ion strategy,
includ
ing gender balance across the Group and targets for ethn
ic representation, can be found
on pages 40 to 41. A copy of the full Board Divers
ity Pol
icy can be viewed at sc.com/boarddivers
itypol
icy and further details on
the Group’s approach to divers
ity and
inclus
ion can be v
iewed at sc.com/divers
ity-and-
inclus
ion.
Increasing the representation of women on the Board with an
aim to have a min
imum of 40 per cent female representat
ion
Following changes during the year, female representation
on the board increased to 42 per cent at year end.
Adopting an ethnic
ity asp
irat
ion of a m
in
imum of 30 per cent
from an ethnic minor
ity background
Representation from ethnic minor
ity backgrounds has
increased to 33 per cent at the end of 2024.
Ensuring that our Board reflects the diverse markets in which
we operate
The Board has members either based in or who are
nationals of many of the regions in which we operate,
includ
ing the UK, EU, North Amer
ica, Asia and Africa.
Many of the INEDs have addit
ional exper
ience of having
worked and lived in many of the Group’s other markets.
We continue to prior
it
ise board representation from our
key markets.
Ensuring that the Board is comprised of a good balance
of skills, experience, knowledge, perspective and
varied backgrounds
The Committee has continued to focus on ensuring that
the Board has the right combinat
ion of exper
ience, skills
and attributes required both immed
iately and
in the
medium to longer term. The appointment of Diane Jurgens
brings experience in using technology to transform
business in some of our key markets, and Lincoln Leong
brings deep experience of the Hong Kong market.
Ensuring that we consider the Group’s aspirat
ions
in
relation to disab
il
ity, sexual orientat
ion, gender
ident
ity
and gender expression
We remain committed to all aspects of divers
ity
in our
succession process.
Only engaging search firms who are signed up to the
Voluntary Code of Conduct for Executive Search Firms
In 2024 we worked with Russell Reynolds, who has signed
up to the Voluntary Code and is committed to supporting
our ambit
ions to ensure d
ivers
ity on our Board.
Reporting annually on the divers
ity of the execut
ive
pipel
ine as well as the d
ivers
ity of the Board,
includ
ing
progress being made on reaching the Board’s gender
and ethnic
ity asp
irat
ions
We continue to improve our reporting of Board and senior
talent succession planning as well as reporting on the
importance of a diverse Board.
141
Standard Chartered
– Annual Report 2024
Directors’ report
Committee effectiveness in 2024
The 2024 Board and Committees’ effectiveness review was conducted internally, facil
itated by the Group Company Secretary,
and in accordance with the UK Code.
Progress against last year's Action Plan
The Action Plan set out a number of actions aris
ing from the
internally facil
itated effect
iveness review conducted in 2023.
The 2024 Action Plan was regularly reviewed during the year and good progress has been made against the actions.
Key observations from the 2024 internal effectiveness review
Feedback on the Committee’s function
ing and
effectiveness was posit
ive and spec
if
ically
highl
ighted the follow
ing:
•
The Committee had a good focus on
divers
ity. The Board had met
its aspirat
ion for
gender and ethnic divers
ity but would need
to work hard to mainta
in the
improvement.
•
The Committee had devoted a sign
ificant
amount of time to Board succession
planning, with considerable success in
terms of the calibre of candidates and
appointees it was able to attract.
•
In a year with a number of corporate
governance rule changes proposed and
introduced by regulators in relation to the
Group’s list
ings
in London and Hong Kong,
the Committee was pleased with its
oversight and plans for implementat
ion of
the changes, with responsib
il
it
ies shared
with the Board and other Committees.
2025 Action Plan
The 2025 Action Plan for the Committee
reflects suggestions from the review and
continues to build on the progress made
last year:
•
Increase the focus of the Committee and
the Board on succession plans for the
Management Team with particular
emphasis on increas
ing the number of
internal candidates who are ident
ified
and prepared for posit
ions.
•
Conduct a detailed review of the Board’s
skills matrix to reflect changes in the geo-
polit
ical and bus
iness environment across
our footprint and review Board composit
ion
in that light.
•
Review and consider succession planning for
other boards around the group.
142
Standard Chartered
– Annual Report 2024
Directors’ report
Corporate governance
Appoint
ing a new Group Cha
ir of Standard Chartered PLC
With José Viñals’ nine-year term as Group Chairman due to expire in October 2025, the Board
commenced a global search for his successor in late 2023, which led to the appointment of
Maria Ramos as Group Chair Designate to succeed José.
*
Spencer Stuart is a signatory of the Voluntary Code of Conduct for Executive Search Firms. They also provide leadership advisory
and senior executive search and assessment services to the HR function with
in the Standard Chartered Group.
Early stages of the process
•
Members of the Board were inv
ited to express an
interest in putting themselves forward for the role, with Maria
accepting that inv
itat
ion
•
Maria would typically have led the search in her capacity as the Company’s Senior Independent Director, however,
given her interest in the role a Selection Panel was constituted to lead the process instead. The Selection Panel
was comprised of non-executive directors and was chaired by Phil Rivett, a member of the Governance and
Nominat
ion Comm
ittee
•
A draft role specif
icat
ion was agreed by the Selection Panel
•
Several leading internat
ional search firms were
inv
ited to p
itch for the mandate, following which Spencer Stuart*
was appointed to support the process
•
The Selection Panel, with input from the Executive Directors, agreed the final role specif
icat
ion. They were careful
to ensure this supported the Group’s strategic prior
it
ies and included the skills, experience and knowledge as well
as the personal attributes required for the role.
Announcement
Progress against the outstanding approvals were suffic
iently advanced for the Board to be sufficiently confident
to announce her condit
ional appo
intment on 4 February 2025.
Final Stages
•
The feedback was then documented and discussed at a meeting of the Selection Panel and Executive Directors.
A recommendation was then made to the Board
•
The Board, excluding Maria, then met and discussed Maria’s candidacy which was unanimously endorsed, subject
to a number of regulatory and other external approvals. Their decis
ion was based on the
ir experience of working
with her, Spencer Stuart’s report and the interv
iews w
ith her which demonstrated:
–
a deep knowledge and understanding of the Group and the banking industry, as a former bank chief executive
–
considerable internat
ional non-execut
ive and Chair experience as well as a firm understanding of the key
governance issues
–
integr
ity, profess
ional reputation, competency, breadth of knowledge and qualif
icat
ion to take on the role
–
strong commercial, governmental, financ
ial and pol
icy experience
–
broad internat
ional exper
ience, strong internat
ional network and exper
ience of operating across
emerging markets.
Long-list
•
A diverse global list of candidates was presented by Spencer Stuart and was discussed extensively. Spencer Stuart
was then asked to gather addit
ional
informat
ion on some of the cand
idates to ensure suitab
il
ity
•
A refined shortlist of potential external candidates was then agreed by the Selection Panel, and they were
approached by Spencer Stuart.
Short-list
•
The shortlisted candidates met with Spencer Stuart and Phil Rivett in
it
ially, to explain to them more about the
role, our expectations and to gauge their appetite and suitab
il
ity
•
Members of the Selection Panel, together with the Executive Directors then interv
iewed the rema
in
ing cand
idates
and measured them against the agreed role specif
icat
ion
•
Spencer Stuart produced reports on each of the final candidates, contain
ing deta
iled assessments and
referencing.
Maria
Ramos
Throughout the selection process, as highl
ighted above,
Maria demonstrated her extensive experience as a
leader in both the public and private sector and as a
banker. She has strong internat
ional exposure, and
a particularly good understanding of emerging and
developing markets. An economist by train
ing, Mar
ia
played a pivotal role in South Africa’s post-apartheid
economic and public finance reform as Director-General
of the National Treasury from 1995-2003. She was
appointed Chief Executive of Transnet Ltd, the state-
owned freight transport and logist
ics serv
ice provider
in 2004-2009 during which time Transnet underwent a
sign
ificant financial, cultural and operat
ional turnaround.
Maria went on to serve as Group CEO of Absa for ten
years from 2009-2019, where she navigated the global
financial cr
is
is, expanded Absa
into a pan-African
financial serv
ices provider with a footprint across
12 African markets and managed its transit
ion follow
ing
Barclays’ divestment of its controlling stake. Maria
retired from her executive career in 2019 and has gone
on to serve as an independent non-executive director
of several boards, includ
ing
internat
ionally l
isted
companies, and advisory groups (more details on those
roles can be found on page 106). Most recently, Maria
served as Chair of AngloGold Ashanti Lim
ited (2020-
2024), a leading global min
ing company, where she
provided strategic leadership and oversight of a major
and complex corporate restructuring of the company.
143
Standard Chartered
– Annual Report 2024
Directors’ report
Key sections
Page 150
Remuneration at a glance
Page 152
Remuneration alignment
Page 154
Committee at a glance
Page 156
Directors’ remuneration in 2024
Page 164
Directors’ remuneration policy
Page 170
2025 policy implementat
ion for d
irectors
Page 174
Addit
ional remunerat
ion disclosures
I am pleased to present the directors’ remuneration report
for the year ended 31 December 2024. This report provides
an overview of the Remuneration Committee’s work and
decis
ion–mak
ing in determin
ing the remunerat
ion for
executive directors and the wider workforce. The current
directors’ remuneration policy operated throughout 2024 as
intended, incent
iv
is
ing performance l
inked to the Group’s
strategy and align
ing w
ith shareholder interests.
The report also sets out details of the new directors’
remuneration policy for the period 2025-2027, which will
be put to a shareholder vote at the AGM in May 2025.
The decis
ions taken by the Comm
ittee were based on
careful considerat
ion of a broad range of factors
includ
ing
performance across the Group, the economic environment in
our markets, and the need for fair and appropriate reward for
our workforce.
Directors’ remuneration report
Profit before tax
$6,811
m
21% (underlying basis)
Return on tangible equity
11.7%
160bps (underlying basis)
Total shareholder return
47.5%
2023: 9.4%
Common Equity Tier 1 ratio
14.2%
19bps
Financ
ial KPIs
RoTE performance
0%
2%
4%
6%
8%
10%
12%
2024
2023
2022
2021
2020
The Group has built upon the sign
ificant progress made
over the past two years to deliver very strong performance
in 2024, includ
ing a s
ign
ificant (160bps) year–on–year
increase in return on tangible equity (RoTE) to 11.7 per cent
(on an underlying basis). Underlying profit before tax
is up 21 per cent at constant currency (ccy) on last year.
These posit
ive results reflect strong execut
ion of our
strategy, combin
ing d
ifferent
iated cross–border
capabil
it
ies with leading wealth management expertise,
and a focus on sustainab
il
ity across our businesses.
Group scorecard
50%
30%
50%
33%
Financ
ials
Non-financials
No Committee discret
ion was used to amend the formula
ic
scorecard outcome.
63%
Group scorecard outcome
The Group scorecard, was 63 per cent. Of this, 30 per cent
(out of a possible 50 per cent) related to financ
ial
performance includ
ing: underly
ing income up 13 per cent
year-on-year; exceeding our sustainable finance revenue
and sales targets; the increase in RoTE; and achievement
of our costs targets. The remain
ing 33 per cent (out of
a possible 50 per cent) related to the achievement of
non-financial goals,
includ
ing strong cl
ient satisfact
ion
performance and delivery against sustainab
il
ity and
productiv
ity targets.
See
pages 157 and 158
for more informat
ion
Our performance in 2024
“Rebalancing director
remuneration to strengthen the
alignment between pay and
performance, and to incent
iv
ise
outperformance”
144
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Group-wide remuneration
2024 discret
ionary annual
incent
ives
In determin
ing an appropr
iate incent
ive pool, the Comm
ittee
considers the Group scorecard outcome alongside
addit
ional factors, such as the external env
ironment, market
competit
iveness and overall affordab
il
ity. The Comm
ittee
also considers risk, control and conduct matters, includ
ing
ongoing invest
igat
ions and matters raised by regulators.
Following its review of these factors, the Committee set
an annual incent
ive pool of $1,690 m
ill
ion, an
increase of
7 per cent on 2023.
Discret
ionary
incent
ive pool
Incentive pool
($m)
% change
(reported)
% change
(same store basis)
1,690
7
9
Group-wide in
it
iat
ives
Our Fair Pay Charter continues to guide the design and
delivery of reward. In 2024, we saw the benefits of
in
it
iat
ives launched
in line with the Charter, with more
than 2,000 parents using our refreshed global parental
leave policy, the expansion of our menopause support,
an enhanced global Employee Assistance Programme
and the introduct
ion of local benefits such as emergency
care and neurodivers
ity support.
We have further embedded continuous feedback,
coaching and open two-way performance feedback
and increased ind
iv
idual performance different
iat
ion in
variable pay outcomes.
During 2024, we also introduced Appreciate, our global
recognit
ion platform through wh
ich colleagues can
celebrate one another’s achievements and recognise
their efforts to live our valued behaviours by awarding
points, which are redeemable against gifts. Around
700,000 recognit
ions have been made s
ince launch.
Our 2024 Divers
ity, Equal
ity and Inclusion Impact Report
gives further detail on our Fair Pay Charter and also
includes our divers
ity pay gap d
isclosures and analysis,
with detail on the actions we are taking to increase
gender and ethnic
ity representat
ion across the Group.
Our Divers
ity, Equal
ity and Inclusion Impact Report can be found
here:
sc.com/fairpayreport
2025 salaries
The average global salary increase for 2025 is 2.5 per cent.
As in previous years, increases will be princ
ipally focused
towards junior employees and areas of strateg
ic importance.
For those ind
iv
iduals receiv
ing an
increase, the average is circa
7 per cent with higher than average increases in South Asia
and Africa reflecting ongoing cost–of–liv
ing challenges.
Executive director remuneration in 2024
Annual incent
ives for execut
ive directors
Annual incent
ives for B
ill and Diego are based predominantly
on the Group scorecard with an addit
ional element for
personal performance.
The Committee approved the following annual incent
ive
outcomes for 2024, taking account of ind
iv
idual performance
assessments, for Bill and Diego. The Committee is satisf
ied
that these are appropriate given the very strong Group
performance in 2024 and the sign
ificant personal
contribut
ions from B
ill and Diego.
2024 annual
incent
ive (£)
% of maximum
Year-on-year
change (%)
Bill Winters
1,461,874
66
0
Diego De Giorg
i
958,320
66
–
See
pages 157 to 160
for further details
2022
–
24 LTIP awards
The 2022–24 LTIP awards are due to start vesting in March
2025 with a projected performance outcome of 88 per cent,
based on RoTE of 11.7 per cent, relative total shareholder
return (TSR) ranking above upper quartile, and above target
performance against sustainab
il
ity and other strategic
measures. As usual, the final relative TSR outcome will be
assessed three years from the date of award, in March 2025.
The values delivered by this projected outcome are based on
the three-month average share price to 31 December 2024
and are included in the single total figure of remuneration for
Bill. Diego did not partic
ipate
in this award.
Award share
price (£)
Valuation share
price (£)
2022
-
24 LTIP
projected
outcome (£)
Bill Winters
4.876
9.197
6,125,761
The Committee reviewed the assessments that resulted in
the outcome for 2024, and are satisf
ied that
it reflects the
posit
ive performance over the three year per
iod. In addit
ion,
the Committee considered the grant price against that of the
previous year’s award, and against the average share price in
the period leading up to the grant date. The price difference
was not sign
ificant and, therefore, the Comm
ittee concluded
there was no windfall gain.
See
pages 161 and 162
for further details
•
Group performance has been very strong across both financial and non-financial metr
ics and the Committee has taken
decis
ions on remunerat
ion that reflect this performance and the delivery against our targets.
•
Discret
ionary
incent
ives are $1,690 m
ill
ion for 2024, up 7 per cent on 2023, reflect
ing Group performance and affordabil
ity,
with average global salary increases of 2.5 per cent for 2025.
•
Annual incent
ives for execut
ive directors, Bill Winters, Group Chief Executive (CEO) and Diego De Giorg
i, Group Ch
ief
Financ
ial Officer (GCFO), assessed at 66% of the max
imum, are £1,461,874 and £958,320 respectively.
•
Projected performance outcome of 88 per cent for the 2022-24 long-term incent
ive plan (LTIP) awards.
•
The 2024 single total figure of remuneration is £10,655,707 for the CEO and £2,769,259 for the GCFO.
•
Reward for all Group employees, includ
ing the execut
ive directors, continues to be aligned to the Group’s strategic
prior
it
ies, through the annual and long-term incent
ive scorecards.
Summary of 2024 remuneration decis
ions
145
Standard Chartered
– Annual Report 2024
Directors’ report
Single total figure of remuneration for 2024
The 2024 annual incent
ive and projected 2022-24 LTIP
performance outcome results in a 2024 single figure for Bill
of £10,655,707 and for Diego of £2,769,259. For Bill, the 2024
single figure represents a year-on-year increase of 46 per cent.
Fixed pay for Bill was unchanged from 2023 and the annual
incent
ive of £1,461,874 was flat on 2023. The
increase in
the single figure was driven princ
ipally by the 2022-24
LTIP outcome, reflecting the Group’s consistent, strong
performance over the last three years and the sign
ificant
increase in our share price over recent months.
See
page 156
for further details
Bill’s 2022-24 LTIP award will vest, pro rata, over the next
five yeas, with a further one-year retention period following
each vest, further reinforc
ing al
ignment of remuneration
outcomes with shareholder interests and the Group’s
long-term performance.
2024 single total figure of remuneration
(£000)
10,656
2,769
7,309
6,408
2024
Bill Winters
2023
2022
0
2,000
4,000
6,000
8,000
12,000
10,000
0
2,000
4,000
6,000
8,000
12,000
10,000
2024
Diego De Giorg
i
Salary, pension, benefits
Annual incent
ive
LTIP
The Committee is seeking shareholder approval for a new
three-year directors’ remuneration policy. Our policy over
the past decade has had to comply with the regulatory
variable pay cap for banks that was introduced by the
European Union and retained in UK legislat
ion post Brex
it.
The variable pay cap, which was in place from 2014 to 2023,
lim
ited var
iable remuneration to 200 per cent of fixed pay
for employees – includ
ing execut
ive directors – ident
ified as
material risk takers.
The Committee welcomes the removal of the variable pay
cap, which had the unintended consequence of increas
ing
fixed pay and reducing performance-linked variable pay.
The removal of the cap gives us the opportunity to develop
a new approach for executive directors, and the applicable
wider workforce, with a greater proportion of total
remuneration awarded in performance-based incent
ives
that aligns with shareholder interests, and are competit
ive
with polic
ies of our global bank
ing peer group.
In arriv
ing at our proposed d
irectors’ remuneration policy,
we consulted with approximately 60 per cent of our share
register, proxy advisers such as Institut
ional Shareholder
Services, The Investment Associat
ion and Glass Lew
is,
and with other important stakeholders, includ
ing the PRA
and FCA.
We began our consultation earlier than usual in 2024 to
give us the opportunity to test our in
it
ial think
ing w
ith
key shareholders and the proxy advisers and have held
40 separate consultation meetings since then. We received
valuable input includ
ing support for the pr
inc
iple of
rebalancing total remuneration towards performance-linked
variable remuneration, and a preference for scorecards that
are simple, transparent and weighted towards financ
ial
metrics. This feedback helped to shape the proposed policy,
which we reviewed again with key shareholders and proxy
advisers in late 2024 and early 2025.
In addit
ion, our shareholders and the proxy adv
isers
emphasised the importance of explain
ing our th
ink
ing
behind the decis
ions we have made, and we have
endeavoured to do that as clearly as possible in this report.
•
The new policy represents the most sign
ificant change for many years and, as such, we engaged extens
ively and
transparently with our major shareholders throughout the review. Their feedback and support has been crucial in
inform
ing our new pol
icy.
•
The removal of the regulatory cap on variable pay for banks gives us the opportunity to rebalance total remuneration
from fixed pay towards performance–linked variable remuneration, incent
iv
is
ing outperformance and re
inforc
ing the
alignment between executive director reward and shareholder experience.
•
Executive director salaries are being sign
ificantly reduced, by 40 per cent for the CEO and 33 per cent for the GCFO.
•
The maximum total remuneration opportunity, if 100 per cent performance outcome is achieved for both the annual
incent
ive and LTIP,
is £13.1 mill
ion for the CEO and £7.7 m
ill
ion for the GCFO.
•
A larger proportion of total remuneration (circa 85 per cent at the maximum) is delivered in performance-linked
incent
ives, w
ith a greater weight
ing to the share pr
ice-linked LTIP.
•
Annual incent
ive and LTIP performance scorecards have been s
impl
ified w
ith increased emphasis on financ
ial measures.
•
Shareholding requirements will be increased to 500 per cent of salary for the CEO and 400 per cent of salary for
the GCFO.
2025 Directors’ remuneration policy
146
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Reducing fixed pay sign
ificantly and
increas
ing
performance-linked variable pay opportunity
In review
ing our approach for rebalanc
ing total remuneration,
and setting an appropriate new maximum opportunity, we
considered what Bill’s maximum pay opportunity would be
if we removed the share element of his salary (which was
introduced as a response to the cap) and replaced it with
variable pay. We did this calculation in the same way as we
converted variable pay to fixed pay when the cap was
introduced in 2014.
2014 context
In 2014, to comply with the cap while also recognis
ing
the guaranteed nature of fixed pay versus performance
linked and ‘at risk’ variable remuneration, we reduced the
variable pay opportunity for executives by £3 for every £1
increase in fixed pay.
For Bill, removing the share element of his current fixed pay
and applying the same swap ratio for variable to fixed pay
would result in a total remuneration at maximum opportunity
of GBP11.1 mill
ion.
In addit
ion, the Comm
ittee carefully considered the evolution
of executive directors’ pay opportunity since the introduct
ion
of the cap in 2014. Over the 10-year period since Bill’s
appointment in 2015, his total fixed pay and, therefore, his
maximum and target (50 per cent performance outcome)
total remuneration opportunit
ies have
increased by less than
0.5 per cent. This has resulted in:
•
An erosion in the competit
iveness of CEO remunerat
ion
versus companies which were not subject to the cap.
The average increase in maximum earning opportunity
for FTSE 100 CEOs over the past 10 years is in the region
of 20 per cent, and at target opportunity the average
increase is above 30 per cent.
•
Increased internal pay compression, where the pay of
senior employees below executive level, for whom we have
had more flexib
il
ity to increase fixed pay and, therefore,
maximum opportunity, is reaching levels sim
ilar to or above
the pay of the executive directors.
To address these issues, the Committee is proposing a
maximum opportunity of GBP13.1 mill
ion for B
ill and
GBP7.7 mill
ion for D
iego, with the incent
ive element
increased
to provide an appropriate mix between fixed (13 per cent for
Bill and 16 per cent for Diego at maximum opportunity) and
performance-linked, variable remuneration (87 per cent for
Bill and 84 per cent for Diego).
The maximum opportunit
ies for B
ill and Diego will only
be realised if performance outcomes of 100 per cent are
achieved for both the annual incent
ive and LTIP scorecards.
The Committee has consistently set stretching targets, and
has been very dil
igent
in assessing performance as evidenced
by histor
ical scorecard outcomes. Equally, we have set
stretching targets in the 2025 scorecards includ
ing sett
ing the
level for the maximum RoTE outcome in the LTIP scorecard
at 14.5 per cent. On this basis, we believe that the policy will
incent
iv
ise the delivery of sign
ificant returns for shareholders,
and reward our executive directors appropriately if this is
achieved, thereby link
ing
incent
ive remunerat
ion with
improved shareholder outcomes. See pages 171 (annual
incent
ive) and 172 (LTIP) for full scorecard deta
ils.
Addit
ionally, the var
iable remuneration is weighted towards
long-term incent
ives wh
ich are awarded in shares, start
vesting after a three-year performance period, and remain
subject to malus and clawback in line with remuneration
regulations, currently up to ten years from the grant date.
2
4
6
8
10
12
14
New
policy
Current
policy
New
policy
Current
policy
CEO
GCFO
33%
27%
40%
£8.3m
56%
31%
13%
40%
27%
33%
£5.4m
53%
31%
16%
£7.7m
Current and new directors’ maximum remuneration
opportunity, showing reduced fixed pay and increased
incent
ive opportun
ity
(£m)
Max annual incent
ive
Fixed pay
Max LTIP
£13.1m
Peer group benchmarking
As part of the policy review, the Committee also considered
the total remuneration proposed against a peer group of
global and regional banks and the FTSE 30.
The peer banks selected are from the UK, Asia, Europe and
the USA with business activ
it
ies and a geographical footprint
sim
ilar to Standard Chartered, and w
ith whom we may
compete for executive talent. The peer group was established
by scoring candidate peers against four criter
ia: geography,
business, market cap and headcount.
The group includes two US banks – JPMorgan Chase and
Cit
i – wh
ich we believe is appropriate based on our criter
ia.
In particular, the US is a sign
ificant locat
ion for the recruitment
of senior executives. Both of our current executive directors
have worked at US banks earlier in their careers and we
have recruited several US non-executive directors. However,
recognis
ing the debate regard
ing the different
ial
in US versus
UK pay levels, for these banks we used a direct report of the
Group CEO for the remuneration benchmark, in recognit
ion
that this would be a more appropriate match in terms of
potential recruitment.
While there is no perfect peer across the criter
ia tested,
the robust scoring methodology that we applied gives us
confidence that we have selected an appropriate group of
peers. The banks included in our remuneration peer group
are detailed below:
Remuneration peer group
• Barclays
•
Cit
i (Head of
Markets)
• DBS
• Deutsche Bank
• HSBC
• JPMorgan Chase
(Co-CEO
Commercial and
Investment Bank)
• Lloyds Banking
Group
• OCBC
• Société Générale
• UBS
• United Overseas
Bank
147
Standard Chartered
– Annual Report 2024
Directors’ report
For Bill and Diego, current and new maximum remuneration opportunit
ies aga
inst our peer group are shown below:
Executive director maximum opportunity – current policy
Executive director maximum opportunity – new policy
Bottom quartile
2nd quartile
3rd quartile
Top quartile
CEO
GCFO
£7.3m
£6.1m
£8.3m
£5.4m
£13.1m
£7.7m
£10.0m
£8.1m
£13.4m
£11.4m
Peer group data is based on 2023 outcomes and availab
il
ity of data
For Bill, total remuneration opportunity under the new policy
is posit
ioned towards the upper quart
ile of our remuneration
peer group for target and maximum performance outcomes
(based on currently available compensation informat
ion
for our peers) and posit
ioned towards the upper quart
ile
against FTSE 30 companies. For Diego, total remuneration
under the new policy is posit
ioned around the med
ian of our
remuneration peer group and around the upper quartile
against FTSE 30 companies.
The Committee recognises that, while the proposed
maximum opportunit
ies for execut
ive directors are with
in the
peer group range, the proposal for Bill is in the top half of the
range. We believe that this is appropriate for the Bank at this
time to incent
iv
ise the delivery of sustainably higher returns
and, supported by the stretching performance targets we
have set, deliver appropriate and competit
ive performance–
linked reward.
Simpl
ify
ing our scorecards and focusing on financ
ial
measures
We appreciate that the sign
ificantly h
igher variable incent
ive
opportunity for executive directors needs to be accompanied
by an increased focus on financ
ial performance measures –
ensuring a strong link between executive director pay and
shareholder returns. We have also taken note of shareholder
feedback for making scorecard metrics simple, transparent
and measurable. To that end, financial metr
ics now constitute
60 per cent of the annual scorecard metrics (versus 50 per
cent previously), and 80 per cent of the LTIP scorecard (versus
60 per cent previously). The LTIP scorecard metrics comprise
40 per cent each for RoTE and relative TSR, and 20 per cent for
sustainab
il
ity measures.
Flexib
il
ity to disapply time proration on vesting LTIP awards
The Committee recognises that the standard practice in the
UK is to prorate in-flight LTIP awards for time served during
the performance period when an executive director retires.
However, the Committee has decided to retain the provis
ion
that allows it to consider the disappl
icat
ion of time proration
for in-flight LTIP awards, only for Bill, on his retirement. The
Committee believes it is appropriate to retain this flexib
il
ity
for Bill as, during his tenure as CEO, he has overseen a very
substantial transformation of the Bank. This major overhaul
has created the environment for the Bank, and its
shareholders, to benefit from current and future strategies.
We acknowledge the feedback received from our
shareholders and the proxy advisers that the use of this
flexib
il
ity is not standard practice. The Committee’s default
posit
ion
is that LTIP pro-ration for time served will apply
unless there is strong evidence of tangible and sustained
improvement in the performance of Standard Chartered prior
to Bill’s retirement. In addit
ion:
•
Bill will need to be designated as an ‘Elig
ible Leaver’ under
our share plan rules, which includes requirements such as
not taking on another executive role for a competitor, for
the provis
ion to be cons
idered.
•
Any LTIP awards that are retained on retirement will
continue to be deferred in accordance with applicable
deferral rules and will remain subject to malus and
clawback provis
ions.
A majority of our shareholders, w
ith whom we discussed this
provis
ion, were comfortable that the Comm
ittee retain this
flexib
il
ity for Bill in the context of the sign
ificant transformat
ion
he has overseen, and ind
icated that they would judge the
decis
ion of the Comm
ittee if the provis
ion was used. Should
the Committee decide to use this discret
ion, the c
ircumstances
and deliberat
ions around
its decis
ion w
ill be fully disclosed in
the applicable directors’ remuneration report.
Increased shareholding requirements
The shareholding requirements in place for executive directors
are based on a percentage of salary and, therefore, with the
reduction in salaries these requirements need to be revised.
Consider
ing our other proposals, and reflect
ing the increase in
variable pay opportunity, we are proposing new shareholding
requirements of 500 per cent of the new salary for Bill and
400 per cent of the new salary for Diego. This represents an
increase in GBP terms of 19 per cent for Bill and 33 per cent for
Diego and posit
ions the requ
irements at the upper quartile of
the FTSE 30.
PRA and FCA consultation on remuneration regulations
The Committee notes the current consultation on certain
aspects of the remuneration regulations, includ
ing reduc
ing
the length of deferral and the removal of post-vest retention
periods currently applicable to share awards along with
reintroduc
ing the opt
ion to pay div
idend equ
ivalents on
deferred share awards.
We have designed the policy to be flexible enough to respond
to any changes without sign
ificant restructur
ing.
148
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Executive directors’ remuneration in 2025
Subject to the approval of the new directors’ remuneration policy, the table below summaries how the policy will be
implemented in 2025. Full details of the new policy are set out on pages 164 to 169.
Fixed remuneration
Bill
Diego
Salary
£1,500,000
£1,100,000
Benefits
A range of core benefits, aligned with UK workforce
Pension
10% of salary
£150,000
£110,000
Variable remuneration
Increased annual incent
ive
opportunity based on
a simpl
ified scorecard
Maximum:
270%
of salary
220%
of salary
Financ
ial measures – 60%
Strategic measures – 30%
Personal performance – 10%
Increased long-term incent
ive
opportunity based on
a simpl
ified scorecard
Maximum:
490%
of salary
370%
of salary
Financ
ial measures: Return on tang
ible equity 40%;
Relative total shareholder return 40%
Non-financial measures: Susta
inab
il
ity 20%
The outcomes of both the annual and long-term incent
ive plans are
subject to a risk and control modif
ier
Increased shareholder requirements
500%
of salary
400%
of salary
New directors’ remuneration policy – implementat
ion
in 2025
2025 salaries
Subject to approval of the directors’ remuneration policy in
May 2025, salaries will be reduced by 40 per cent for Bill and
by 33 per cent for Diego, effective from 1 April 2025.
2025–27 LTIP awards to be granted in May 2025
The Committee will grant 2025-27 LTIP awards to the
executive directors following the AGM on 8 May 2025.
Subject to the approval of the new directors’ remuneration
policy, and consider
ing the very strong 2024 Group
performance, the Committee has approved LTIP awards
for the period of 2025-27 as follows:
2025–27 LTIP
award (£)
% of salary
Bill Winters
7,350,000
490%
Diego De Giorg
i
4,070,000
370%
The LTIP awards are dependent on our simpl
ified and
re-focused performance measures and targets by the end
of a three-year performance period.
To reflect the increased long-term remuneration opportunity,
the RoTE performance range has been increased, and for
these awards will be 11.5 per cent for a threshold outcome up
to 14.5 per cent for a maximum outcome. TSR will continue to
have a performance range of threshold for relative median
ranking up to a maximum outcome for upper quartile ranking.
The sustainab
il
ity targets are focused on our net zero
pathway and are quantitat
ive
in nature. The outcome of
the awards is also subject to a risk and control modif
ier to
be assessed based on input from the Group Board Risk
Committee to ensure the performance has been delivered
with appropriate risk and control management.
See
pages 172 and 173
for further details
149
Standard Chartered
– Annual Report 2024
Directors’ report
How to use this report
With
in the d
irectors’ remuneration report we have
used colour coding to denote different elements
of remuneration, as follows:
Salary, pension, benefits
(fixed remuneration)
Annual incent
ive
LTIP
We have also used the following icons for ease of navigat
ion through th
is section and to show alignment between
remuneration and the strategic object
ives of the Group.
People and culture
Ways of Working
Innovation
Resetting Globalisat
ion
Risk management
Employees
Lift
ing Part
ic
ipat
ion
Investors
Clients
Sustainab
il
ity
Accelerating Zero
In conclusion, the Committee believes that the 2024 outcomes
are appropriate in the context of the very strong performance
delivered in 2024. The proposed directors’ remuneration policy,
which will apply from 2025, subject to shareholder approval,
delivers on the crit
ical need to have a reward pol
icy in place
which enables the Board to attract, retain and motivate our
executive directors. We ask that our shareholders support the
policy on the basis that it:
•
Gives a sign
ificantly h
igher weight
ing to performance-
linked variable pay which will incent
iv
ise and appropriately
reward outperformance at this important growth phase for
the Bank.
•
Reinforces the alignment of executive director reward
and shareholder experience with a greater proportion of
pay that is directly linked to Group performance and the
share price, and outcomes based on scorecards that are
focused on financial return measures and l
inked to our
strategic aims.
•
Provides a competit
ive max
imum opportunity, that is with
in
the market range, and better aligned with remuneration
structures in markets where we compete for talent,
enhancing our abil
ity to attract and reta
in executives.
•
Mit
igates
internal pay compression pressure.
In the rest of this report, we present the disclosures required
by regulations, as well as addit
ional
informat
ion to expla
in
how remuneration for our executives aligns with our strategy,
shareholder interests and wider workforce pay. In making
remuneration decis
ions for 2024 and beyond, we have
also been mindful of the experience of our wider
stakeholder group.
I would like to thank my fellow Committee members for
the work they have put into the Committee in 2024 and
our shareholders for the valuable ins
ights that they
provided during a very productive round of engagement
in recent months.
Shir
ish Apte
Chair of the Remuneration Committee
(All disclosures in the directors’ remuneration report are unaudited unless
otherwise stated. Disclosures marked as audited should be considered audited
in the context of the financ
ial statements as a whole.)
Directors’ report
Directors’ remuneration report
150
Standard Chartered
– Annual Report 2023
How does executive director remuneration link to Group strategy?
As measured by
2024 Annual
incent
ive
2022-24
LTIP
Financ
ial KPIs
Further details can be found
on
pages 157 and 161
• Income
Financ
ial
results
• Costs
•
Return on tangible equity
•
Common Equity Tier 1 ratio
•
Relative total shareholder return
Strategic prior
it
ies
Further details can be found
on
page 18
• Network business
Achievement
against
objectives
•
Affluent client business
• Dig
ital Ventures
•
Mass Retail business
• Sustainab
il
ity
Crit
ical enablers
Further details can be found
on
page 20
•
People and culture
•
Ways of working
• Innovation
How do executive directors’ remuneration outcomes compare with the maximum opportunity?
Bill Winters
Diego De Giorg
i
1,452
2,215
Actual
Max
Actual
Max
2024 annual incent
ive (£000)
2022-24 LTIP projected outcome (£000)
1
958
1,462
Bill Winters
6,961
Actual
Max
920
6,126
1
The values of the projected outcome and maximum opportunity are calculated using a three-month average share price to 31 December 2024.
Remuneration at a glance
How did we determine executive director variable remuneration outcomes in 2024?
2024 annual incent
ive
Financ
ials
30%
Clients
12%
8%
Sustainab
il
ity
4%
Productiv
ity
and
transformation
7%
People
Risk and
control
Personal
performance
0%
8%
9%
50%
4%
8%
4%
12%
10%
2022-24 LTIP
RoTE with
CET1 underpin
30%
30%
Relative TSR
Sustainab
il
ity
Strategic
14%
15%
14%
25%
30%
30%
Following the detailed performance assessment of measures and proof points, the Committee considered the performance
outcomes of both scorecards to be appropriate and consistent with Group performance.
88%
2022–24 LTIP projected outcome
66%
2024 annual incent
ive outcome
151
Standard Chartered
– Annual Report 2023
How we paid our executive directors in 2024 (single total figure of remuneration)
£000
LTIP
Annual incent
ive
Variable
remuneration
Salary, pension,
benefits
Fixed
remuneration
How the CEO’s remuneration is delivered over time
1
Awarded for 2024
£000
Delivery method
Structure and tim
ing of payment
Salary
£2,517
CEO: 50% cash
Cash
CEO: 50% shares
Shares
Released in equal amounts between
2025 and 2029
Pension
£252
100% cash
Cash
Annual
incent
ive
2
£1,462
50% cash
Cash
50% shares
Shares
LTIP
2,3
£7,350
100% shares
Forward looking
performance
measured over
2025 to 2027
Shares
Delivered in equal amounts between
2028 and 2032 (subject to 12-month
retention post vest)
2024
2025
2026
2027
2028
2029
2030
2031
2032
1
The diagram shows how Bill’s remuneration is released over time, with the final component of pay granted in 2024 being released in 2032. Diego’s pay awarded
for 2024 will release over the same period.
2
Variable remuneration, includ
ing annual
incent
ive and LTIP,
is subject to clawback for up to 10 years from grant.
3
To be awarded in considerat
ion of Group performance
in 2024, under the new directors’ remuneration policy, subject to approval at the AGM in May 2025.
Alignment of executive remuneration with shareholder experience
As shown in the illustrat
ion above, a s
ign
ificant proport
ion of executive director remuneration is delivered in shares, creating
a strong alignment of interests between executive directors and shareholders.
Under the new directors’ remuneration policy, the rebalance towards performance-linked, variable remuneration will further
increase the proportion of remuneration that is delivered in shares to, at maximum performance, around 70 per cent of total
remuneration for both executive directors.
Executive directors will be required to mainta
in s
ign
ificant personal share hold
ings of 500 per cent of salary for the CEO
and 400 per cent of salary for the GCFO.
Appropriateness of executive directors’ remuneration
We mainta
in a cons
istent remuneration approach for all employees, in line with our Fair Pay Charter. Remuneration for
executive directors is reviewed annually against internal and external measures to ensure appropriate levels, aligned with
the approach for other employees. During 2024, as part of the development of the directors’ remuneration policy, fixed
and variable remuneration were reviewed against a peer group of internat
ional banks to ensure the new pol
icy would be
appropriately competit
ive. See pages 146 and 147 for full deta
ils of the benchmarking process.
Directors’ report
2024
2023
Bill Winters
3,035
3,068
1,462
6,126
10,656
7,309
2,769
2,812
1,462
2024
Diego De Giorg
i
1,811
958
920
2,135
152
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Remuneration alignment
Alignment with...
Our culture
Our performance and
reward framework supports
us in embedding a high–
performance culture and
aligns with our princ
iple that
colleagues should share in
the success of the Group.
• Remuneration decis
ions are
guided by our Fair Pay Charter.
See our
2024 Divers
ity, Equal
ity and
Inclusion Impact Report
for further
details on our Fair Pay Charter here:
sc.com/fairpayreport
•
The wider workforce and our
executive directors partic
ipate
in continuous performance
management and feedback
to ensure that performance
is discussed and assessed
throughout the year.
• Employee performance is
assessed based on what is
achieved and how it is achieved in
line with our valued behaviours.
Our remuneration structure and
polic
ies ensure that behav
iours
consistent with these values
are appropriately recognised
and rewarded.
•
Our LTIP is subject to an
assessment to ensure appropriate
levels of conduct have been
demonstrated to meet our
conduct gateway requirement.
Our strategy
Remuneration decis
ions made
across the Group, includ
ing
for our executive directors,
align with our strategic
prior
it
ies and our Stands,
includ
ing our comm
itment
to sustainable social and
economic development.
•
Performance measures in our Group
and LTIP scorecards are designed to
drive achievement of the financ
ial
and strategic goals that will deliver
long-term sustainable value for
our stakeholders.
•
Sustainab
il
ity is a key considerat
ion
for setting and measuring financ
ial
and strategic targets.
•
If scorecard outcomes are not
consistent with progress against
our strategic commitments, the
Committee has the discret
ion to
make adjustments.
See
page 150
for further details on
how our incent
ive plans are al
igned
to our strategy
Our approach
to risk and control
The determinat
ion of our
remuneration policy and
outcomes align with the
Group’s risk and control
framework.
•
The Group has a robust formal
process for review
ing r
isk and
control matters and reflecting these
in remuneration outcomes at both
an ind
iv
idual and collective level.
•
The most sign
ificant r
isk and control
matters are escalated for oversight
by the Remuneration Committee
and, at year-end, these are
reviewed to determine any
impact to Group incent
ives.
• Long-term sustainable
performance is supported through
the abil
ity to make adjustments
to variable remuneration for risk,
control and conduct behaviours,
the deferral of variable
remuneration, and the abil
ity
to apply malus and clawback
where appropriate.
•
Incentives for employees engaged
in Audit, Risk and Compliance
functions are set independently
of the businesses they oversee.
See
page 180
for further details
Performance aligned remuneration
The balance between fixed and variable remuneration is geared to provide a greater proportion of fixed remuneration for more
junior employees to g
ive more financ
ial secur
ity. In comparison, for more senior employees, includ
ing the execut
ive directors,
the variable remuneration opportunity is larger, reflecting their abil
ity to
influence the Group’s performance.
Salary
Annual incent
ive
LTIP
Senior management
(incl executive directors)
31%
58%
79%
88%
90%
10%
12%
21%
42%
41%
28%
Senior professional
Intermediate professional
Junior professional
Admin/Support
153
Standard Chartered
– Annual Report 2024
•
Remuneration outcomes reflect key financ
ial and non-
financial performance del
ivered in the year. Sixty per cent of
the 2025 executive director annual incent
ive scorecard and
80 per cent of the 2025
–
27 LTIP award will be based on
financial performance.
•
Variable remuneration awards are based on stretching
targets which are subject to robust assessment,
as evidenced by histor
ical outcomes.
•
A sign
ificant port
ion of executive
remuneration is paid in shares, and
shareholding requirements apply.
• Post-employment shareholding
requirements further reinforce
the importance of sustainable
long-term performance.
•
The Committee Chair
regularly engages with
shareholders on
remuneration matters.
•
The same remuneration princ
iples apply to
executives and employees, includ
ing cons
istent
benefit and pension provis
ion by locat
ion.
See
pages 164 and 169
for further details
•
Incentives for executive directors are based on a
set of measures that strongly align with
those used to determine discret
ionary
incent
ives across the Group.
•
Measures to improve the overall
employee experience across
the Group by creating a better
work environment for our
employees are included in the
Group scorecard.
•
The Committee Chair
regularly meets with our
lead regulators to discuss
our remuneration approach
and outcomes.
•
Remuneration outcomes take
into account risk, control and
conduct considerat
ions.
•
Pay structures are aligned to
relevant best practice, includ
ing
the applicat
ion of deferrals and
malus/clawback.
•
Remuneration outcomes reflect performance delivered includ
ing cl
ient-related
performance objectives (e.g.,
improved client satisfact
ion).
• Sustainab
il
ity measures
used with
in the Group
scorecard and LTIP are
aligned to our Sustainab
il
ity
Aspirat
ions, reflect
ing our
commitment to sustainable social
and economic development.
•
The Committee tracks gender
and ethnic
ity pay gaps, and
actively monitors the actions
being taken to close them.
Clients
Employees
Society and
sustainab
il
ity
Investors
Executive
director
remuneration
Regulators and
governments
How is our executive director remuneration aligned to stakeholder experience?
How does our directors’ remuneration policy address other key features set out in the UK Corporate
Governance Code?
Proportional
ity
•
In line with our commitment to pay for performance,
a sign
ificant proport
ion of executive director pay is
delivered through incent
ives based on performance
metrics aligned with our strategy. Our new directors’
remuneration policy further enhances this with an
increased proportion of performance-linked variable pay.
•
The Committee sets robust and stretching targets to
ensure there is a clear link between Group performance
and executive director awards.
•
Executive directors’ interests are further aligned with
shareholders’ long-term interests through the deferred
release of annual incent
ives and LTIP awards.
•
Malus and clawback provis
ions apply for up to 10 years
from grant, in alignment with remuneration regulations
for senior management. No malus or clawback provis
ions
were used during 2024.
•
Shareholding requirements are in place for executive
directors, requir
ing them to bu
ild and mainta
in a
sign
ificant sharehold
ing in Company shares while in
employment and for a period of two years from stepping
down as a director. Bill currently exceeds his respective
shareholding requirements and Diego is continu
ing to
build up his requirement.
Predictab
il
ity
•
The range of possible rewards to ind
iv
idual executive
directors is set out in the scenario charts on page 170,
where we also demonstrate the impact of a 50 per cent
share price appreciat
ion over the three-year performance
period of the LTIP.
•
In addit
ion to max
imum award levels specif
ied
in our
current and new remuneration polic
ies, the value of
incent
ive awards w
ill vary depending on achievement
against specif
ied performance targets and the share
price at the time of delivery for the sign
ificant part of
reward which is delivered in shares.
Simpl
ic
ity and clarity
•
Simpl
ic
ity is a key driver for the structure of our executive
pay, subject to adherence to regulatory requirements
aris
ing from operat
ing as a UK–regulated bank.
•
Our remuneration structure comprises straightforward
and well-understood components. The purpose,
structure, alignment with strategy and consistency
with arrangements for the wider workforce are clearly
set out in the remuneration policy.
See
pages 164 and 169
for further details
•
We set and report our performance-related measures,
targets and outcomes in a clear and balanced way.
Directors’ report
154
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Committee at a glance
Committee
focus during 2024
The Committee Chair continues to engage with shareholders
to seek views and feedback on key decis
ions the Comm
ittee
takes each year. In 2024, shareholders were consulted extensively
on the development of the new directors’ remuneration policy
scheduled to be put to shareholders for approval at the 2025 AGM.
Read more on
pages 145 to 147
What are the main responsib
il
it
ies
of the Committee?
The Committee is responsible for setting the princ
iples,
parameters and governance framework for the Group’s
remuneration policy and overseeing its implementat
ion.
This includes:
•
Determin
ing the framework and pol
ic
ies for the
remuneration of the Group Chairman, the executive
directors and other senior management consider
ing
our Fair Pay Charter, wider workforce remuneration
and alignment with culture and conduct.
•
Overseeing the alignment of reward, culture, the
strategic prior
it
ies and our Stands.
•
Approving the Group discret
ionary remunerat
ion pool,
taking into account all aspects of performance.
•
Overseeing the Fair Pay Charter.
The Committee has written Terms of Reference that
can be viewed at
sc.com/termsofreference
How did the Committee spend their
time during their 2024 meetings?
Senior management remuneration
Executive remuneration, policy and
shareholder engagement
Group-wide reward, the Fair Pay
Charter and pay divers
ity
Business performance and
risk assessment review
Regulatory and governance
Shir
ish
Apte
(Chair)
4/4
4/4
David
Conner
1
4/4
Robin
Lawther,
CBE
4/4
Maria
Ramos
4/4
Linda
Yueh, CBE
Who else attended Committee meetings in 2024?
The Group Chairman; Group Chief Executive; Group Chief
Financ
ial Officer; GCRO; Ch
ief Strategy & Talent Officer;
Global Head, Performance, Reward and Benefits; Group
Head, Conduct, Financ
ial Cr
ime and Compliance; Group
Company Secretary; Chair of the Audit Committee; Group
Head, Internal Audit.
See
pages 106 to 108
for biograph
ical deta
ils of the Committee
members
The Committee held one addit
ional ad-hoc meet
ing in 2024,
attended by four out of the five members. Linda Yueh did
not attend this meeting due to a prior business commitment.
However, she received the papers and provided feedback.
10%
20%
20%
10%
40%
Committee composit
ion
1
David Conner stepped down from the Committee on 30 December 2024.
155
Standard Chartered
– Annual Report 2024
Directors’ report
Action plan
The 2024 action plan set out a number of actions aris
ing
from the internally facil
itated effect
iveness review
conducted in 2023. The action plan was regularly reviewed
during the year and good progress has been made against
the actions, with all of them being completed.
The 2025 action plan for the Committee reflects
suggestions from the 2024 review and continues to
build on the solid progress made last year:
•
Continue to focus on pay for performance across the
Group. If approved by shareholders.
•
Ensure the new Policy continues to align with the
Group’s strategy.
•
Consider better leveraging the Investor Relations Team
to solic
it more shareholder v
iews.
•
Improve the oversight of remuneration communicat
ions
to ensure more consistent messages.
What advice does the Committee receive?
PwC was re-appointed as the Committee’s remuneration
adviser in 2021. The Committee conducts a detailed review of
potential advisers every three or four years.
PwC is a signatory to the voluntary remuneration consulting
Code of Conduct. It provides other services to the Group
includ
ing assurance, adv
isory, consultancy and tax advice.
The Committee is satisf
ied the adv
ice received was object
ive
and independent and that no potential or actual conflict
arose. The total fees paid to PwC (partly a fixed fee and
partly on a time and materials basis) was GBP142,410, which
includes advice to the Committee relating to executive
directors’ remuneration and regulatory matters.
The GCFO and Group Chief Risk Officer regularly update the
Committee on finance and risk matters and the Committee
also receives input from the Board Risk Committee, Culture
and Sustainab
il
ity Committee, and Chair of the Board Audit
Committee on relevant matters.
The Committee manages conflicts of interest when receiv
ing
views from senior ind
iv
iduals on remuneration proposals and
no ind
iv
idual is involved in decid
ing the
ir own pay.
How effective was the Committee in 2024?
The 2024 Board and Committee’s effectiveness review was
conducted internally, facil
itated by the Group Company
Secretary, and in accordance with the UK Code.
In a year dominated by the Committee’s review of the new
directors’ remuneration policy and consultation with investors
and shareholder bodies, the feedback on the Committee’s
function
ing and effect
iveness was posit
ive and spec
if
ically
highl
ighted the follow
ing:
•
The Committee’s oversight of the policy was highly
rated, and the Chair was commended for leading an
extensive consultation.
•
Meetings are well run, and presenters convey detailed
informat
ion conc
isely.
•
Papers are of high quality and contribut
ions from the Group
Reward Team were highly rated.
87%
of colleagues responded to the Group’s
engagement survey, My Voice, which
seeks to understand colleague
sentiment in respect of performance
management, the process of giv
ing
and receiv
ing feedback and reward.
The Committee recognises the importance of seeking feedback from colleagues
on remuneration matters to inform decis
ion-mak
ing. The Culture and Sustainab
il
ity
Committee (CSC) is responsible for the Group’s workforce engagement programme
and provides colleague feedback to the Remuneration Committee to inform
remuneration decis
ion-mak
ing. The Committee is also provided with the views
of employees through updates from the annual My Voice and Performance &
Reward surveys.
The Board engages with and listens to the views of employees. In 2024, the Board
met with colleagues in various markets in specially arranged sessions where
directors were able to appreciate the challenges, successes, concerns and
opportunit
ies shared by colleagues
in each of the markets.
See our Culture and Sustainab
il
ity Committee report on
pages 134 to 136
and our Stakeholder
section on
pages 38 to 41
for further informat
ion on our workforce engagement framework
For
Against
Withheld
Advisory vote on the 2023 remuneration report
at 2024 AGM
1
484,724,890
95.3%
23,766,538
4.7%
1,611,326
Bind
ing vote to approve the 2022 d
irectors’ remuneration policy
at 2022 AGM
404,531,068
68.8%
183,344,607
31.2%
24,340,637
1
If withheld votes are considered as part of the overall voting outcome distr
ibut
ion, 95.02 per cent of votes would have been ‘For’ the resolution.
How did our shareholders vote?
How does the Committee understand the views of our workforce?
156
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
This section, which is subject to an advisory vote at the 2025 AGM, outlines the 2024 executive director remuneration delivered
under the 2022 shareholder-approved remuneration policy and the 2024 fees for the Group Chairman and INEDs.
Our current directors’ remuneration policy is set out in full on pages 159 to 164 of the 2021 Annual Report and on our website at
sc.com
The following table sets out the 2024 single total figure of remuneration for the CEO and GCFO showing a year-on-year
increase of 46 per cent for the CEO, reflecting the Group’s consistent, strong performance over the last three years and the
sign
ificant
increase in our share price over recent months.
Directors’ remuneration in 2024 (audited)
Single total figure of
remuneration
£000
Bill Winters
Diego De Giorg
i
1
Andy Halford
2
£000
2024
2023
2024
2023
2024
2023
Salary
2,517
2,496
1,641
–
9
1,596
Pension
252
251
109
–
0.9
160
Benefits
299
288
61
–
0.5
110
Total fixed remuneration
3,068
3,035
1,811
–
10
1,866
Annual incent
ive award
1,462
1,462
958
–
–
920
LTIP outcome
Value based on performance
3,248
2,104
–
–
–
1,345
Value based on share
price growth
2,878
708
–
–
–
453
Total variable remuneration
7,588
4,274
958
–
–
2,718
Single total figure of remuneration
10,656
7,309
2,769
–
10
4,584
1
Diego was appointed to the Board and as GCFO on 3 January 2024. The remuneration shown for 2024 is in respect of his services as GCFO during the year
2
Andy Halford stepped down from the Board on 2 January 2024. The remuneration shown for 2024 is in respect of his services as GCFO during the year
Notes to the single total figure of remuneration table
Benefits
•
Bill receives a contribut
ion towards h
is annual tax preparation due to the complexity of his tax affairs, partly
due to Group business travel requirements.
•
Bill has the use of a car and driver. This is a role-based provis
ion g
iven the executive role and the associated
security and privacy requirements.
•
2024 figures above relate to the 2023/24 UK tax year and the 2023 figures relate to the 2022/23 UK tax year.
Annual incent
ive
award
•
Received in respect of 2024 and 2023.
Outcome of
LTIP award
•
For 2024, projected outcome values of the 2022-24 LTIP awards vesting, awarded in 2022.
•
For 2023, the final outcomes of the 2021-23 LTIP awards were lower than the projected values disclosed in last
year’s report and have been restated. At that time, the projected performance outcome was 66 per cent.
When the relative TSR performance was assessed in March 2024, the actual outcome was 57 per cent with a
share price of £6.551, resulting in a lower outcome.
Andy Halford
Andy Halford stepped down from the Board on 2 January 2024, after which he continued as a Senior Adviser, working on
strategic projects for the Group, until retir
ing on 31 August 2024. Dur
ing this time, Andy continued to receive his salary and
benefits until his retirement. As an elig
ible leaver, Andy reta
ined his exist
ing LTIP awards wh
ich are subject to the achievement
of performance measures and which have been prorated up to the date of his retirement on 31 August 2024. Based on the
projected outcome of 88 per cent, 378,400 shares are expected to vest in March 2025. The estimated value of this outcome
is £3,479,956 based on the three-month average share price to 31 December 2024 of £9.197.
Payments to former directors
There were no payments or pension contribut
ions made to, or
in respect of, past directors in the year in excess of the min
imum
threshold of £50,000, set for this purpose.
Variable
remuneration
Fixed
remuneration
2024
2023
3,035
3,068
1,462
6,126
10,656
7,309
2,812
1,462
2024
2023
1,866
10
3,480
6,126
4,584
1,798
920
2,769
2024
1,811
958
20
35
£000
157
Standard Chartered
– Annual Report 2024
Directors’ report
Annual incent
ive awards for execut
ive directors are based on the assessment of the Group scorecard and personal
performance, in line with the current remuneration policy. For Bill and Diego, the Committee considered the Group scorecard
outcome, ind
iv
idual performance, and risk, control, and conduct-related matters and determined that the scorecard outcome
appropriately reflects performance in 2024. The Committee also determined that both directors exhib
ited appropr
iate levels
of conduct and met the gateway requirement to be elig
ible for an
incent
ive.
The annual incent
ive outcomes for B
ill and Diego are summarised below:
Executive director scorecard outcomes
Measure
Weight
ing
Bill Winters
outcome
Diego De Giorg
i
outcome
Financ
ial
50%
30%
30%
Strategic
40%
27%
27%
Personal performance
10%
9%
9%
Total
100%
66%
66%
Maximum annual incent
ive opportun
ity (£000)
2,215
1,452
Annual incent
ive outcome (£000)
1,462
958
Assessment of the 2024 scorecard – financial measures
Measure
Weight
ing
Threshold
(0%)
Maximum
(100%)
Achievement
Outcome
Income
1
($)
9%
18.3bn
19.9bn
19.7bn
8%
CIB Sustainable Finance Income
2
($)
3%
864m
936m
1.0bn
3%
Costs ($)
8%
12.1bn
11.2bn
11.7bn
4%
RoTE
3
with a CET1
4
underpin of the higher of
13% or the min
imum regulatory requ
irement
30%
10.1%
12.4%
11.7%
CET1 of 14.2%
15%
1
The Group’s reported performance is adjusted for profits or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent,
other infrequent and/or exceptional transactions that are sign
ificant or mater
ial in the context of the Group’s normal business earnings for the period and items
which management and investors would ordinar
ily
ident
ify separately when assess
ing underlying performance period by period.
2
CCIB name changed to CIB in 2024
3
Underlying RoTE represents the ratio of the current year’s underlying profit attributable to ordinary shareholders plus fair value on other comprehensive income
equity movement relating to Ventures segment to the weighted average tangible equity, being ordinary shareholders’ equity less the intang
ible assets for the
reporting period. Underlying RoTE normally excludes material regulatory fines and certain other adjustments but, for remuneration purposes, this would be
subject to review by the Committee
4
The CET1 underpin was set at the higher of 13 per cent or the min
imum regulatory level as at 31 December 2024. In add
it
ion, the Comm
ittee has the discret
ion
to take into account at the end of the performance period any changes in regulatory capital and risk-weighted asset requirements that might have been
announced and implemented after the start of the performance period
Assessment of the 2024 scorecard – strategic measures
Clients (Network, Affluent, Mass)
Target
Assessment
•
Improve client satisfact
ion and cl
ient
experience ratings
•
Deliver cross border income growth in CIB
•
Deliver network growth in qualif
ied cl
ients across
Affluent activ
ity
•
Mass market retail growth through new-to-bank
personal customers
•
Grow value of Ventures
•
Client satisfact
ion rat
ings were exceptional, with strong
WRB Net Promoter and CIB Client Engagement results.
•
Increased CIB cross border income to $7.3 bill
ion (versus
$6.9 bill
ion
in 2023).
•
Affluent income growth outperformed ($293 mill
ion versus
$213 mill
ion
in 2023) driven by a focus on our International
Clients strategy.
•
Mass market retail growth from over 1.8 mill
ion
new
Partnership active clients and new affluent sign-ups.
•
Ventures value grew, driven by Mox and Trust new
customers and Ventures inst
itut
ional clients.
Weight
ing – 12%
Outcome – 9%
Sustainab
il
ity
Target
Assessment
•
Meeting key milestones through build
ing
infrastructure relating to client, transaction and
central data for deliver
ing on our net zero amb
it
ion.
•
Reducing our financed emiss
ions for key sectors
in
line with our risk appetite and based on inter
im
2030 sectoral targets.
•
Reducing Scope 1 and 2 emiss
ions
in line with our
operational net zero target by 2025.
•
Achieved all milestones set for 2024.
•
Total financed emiss
ions are track
ing well below our risk
appetite across all key sectors (Oil & Gas, Power, Automobile
Manufactures, and Steel).
•
Reduction in Scope 1 and 2 emiss
ions are track
ing to exceed
targets with the completion of major key projects reducing
carbon emiss
ions globally.
Weight
ing – 4%
Outcome – 4%
Annual incent
ive awards for the execut
ive directors
158
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Productiv
ity and transformat
ion
Target
Assessment
•
Grow proportion of dig
itally
in
it
iated transactions
and dig
ital sales adopt
ion.
•
Transformational Change: percentage of
transformation change programmes on track.
•
Productiv
ity: Increase Operat
ing Profit less Credit
Impairment per FTE.
•
Increased CIB dig
ital volumes from Mob
ile and Trade,
improved client satisfact
ion score on Stra
ight2Bank and
higher WRB mobile adoption.
•
Exceeded transformational change target with over 81%
of programmes on track (versus target of 70%).
•
Operating Profit less Credit Impairment per FTE increased,
mainly driven by higher underlying Profit Before Tax.
Weight
ing – 8%
Outcome – 6%
People and culture
Target
Assessment
•
Improve employee engagement as evidenced in
our annual My Voice survey.
•
Improve senior female representation to support
reaching 35% by 2025.
•
Improve our ‘culture of inclus
ion’ score (
internal
index).
•
There was no improvement on the employee engagement
and ‘culture of inclus
ion’ scores
in the 2024 My Voice survey.
This was against a benchmark of all-time high scores
achieved in 2023. Employee experience continues to be
posit
ive, w
ith most scores remain
ing h
igher than 2022 levels.
•
Senior female representation is above threshold but below
target for 2024.
Weight
ing – 4%
Outcome – targets not achieved
Risk and controls
Target
Assessment
•
Non-financial r
isk reduction.
•
Self-ident
ification of aud
it issues.
•
There was a strong outcome for non-financial r
isk reduction,
achiev
ing 124% of target
in 2024.
•
Targets set for self-ident
ification of aud
it issues were
not met.
Weight
ing – 12%
Outcome – 8%
Assessment of the 2024 scorecard – personal performance
The Committee considers areas of responsib
il
ity together with progress against key object
ives for the year and personal
contribut
ion to the Group scorecard outcome. Th
is element focuses on measures that reflect real personal impact, such as
transformation of processes and improv
ing the culture w
ith
in the Bank. Key ach
ievements against Bill’s and Diego’s personal
objectives are summar
ised in the tables on the next pages.
Bill Winters
2024 has been another very strong year for Bill during which his drive, strategic vis
ion and relentless execut
ion led the Group
to achieve the strongest set of results we have published in recent years. Bill mainta
ined an
intense focus on delivery against
a strategy that has been further sharpened with the implementat
ion of our F
it for Growth in
it
iat
ive and organ
isat
ional
design changes to drive transformation. He has promoted the interests of the Bank through extensive internal and external
engagement, devoting sign
ificant t
ime to key stakeholders includ
ing cl
ients, investors, regulators and colleagues. Our posit
ive
financial and strateg
ic results are increas
ingly be
ing recognised in our share price, reflecting the markets’ appreciat
ion of the
foundations laid over his tenure and the greatly improved outlook for the Group. This trend is reinforced by our achievement
of 11.7 per cent RoTE for 2024, the highest since Bill’s appointment in 2015. These results are a testament to Bill’s strong and
effective leadership.
159
Standard Chartered
– Annual Report 2024
Directors’ report
Financ
ial performance and r
isk and controls
• Further
progress
towards an
efficient and
more profitable
Bank while
mainta
in
ing
focus on risk
and control.
•
Bill implemented sign
ificant pos
it
ive transformat
ion through the elim
inat
ion of regional
structures and streamlin
ing management layers, reduc
ing frict
ion and allow
ing us to
operate more efficiently.
•
The transformation agenda continues to progress under Bill’s leadership, with a strong focus
on communicat
ing the
importance of, and the benefits from, the transformation.
– In our annual My Voice all-employee survey, nearly 90% of colleagues felt we were
adapting our ways of working to deliver the strategy.
– 85% of colleagues ind
icated they are clear on the des
ired outcomes and benefits of our
Fit for Growth programme.
– We have ident
ified and are fund
ing over 140 in
it
iat
ives for s
impl
ify
ing, standardis
ing
and dig
it
is
ing operat
ions, with the aim of generating more than $1.5 bill
ion of
sustainable saves.
•
Bill has overseen sign
ificant enhancements to the Group’s Technology & Operat
ions control
framework to ensure the security of our dig
ital portfol
io, and ensured momentum was
mainta
ined follow
ing the departure of the Group Chief Technology, Operations and
Transformation Officer during the year.
•
Bill continues to personally champion the sustainab
il
ity agenda both for the Bank and the
industry more widely, and the Bank has continued to be recognised as an industry leader.
– Bill is a member of the GFANZ Princ
ipals Group, a found
ing member of the World Bank
Private Sector Investment Lab, and sits on the Dist
ingu
ished Advisory Group of the
Integrity Council for Voluntary Carbon Markets and the board of Climate Impact X (CIX).
The Bank contributed to the UK Transit
ion F
inance Market Review.
– We achieved first place in Climate X’s assessment of the world’s largest commercial banks
climate adaptation maturity.
Innovation
• Further
promote our
culture of
innovat
ion
and maxim
ise
synergies
between the
main bank
and our
SC Ventures.
•
Bill has continued to champion and role-model an innovat
ion m
indset across the Group,
includ
ing targeted tra
in
ing for the Management Team. Over 330
ideas from 14 Innovation
Challenges were launched in 2024, and over 300 employees have been upskilled in
innovat
ion techn
iques.
•
Bill is a leading advocate for our Ventures business, which complements the services offered
by the tradit
ional bank by address
ing the dig
ital bank
ing and lifestyle needs of retail clients,
with a portfolio of fast growing banks (Mox, Trust), banking-as-a-service (Audax), dig
ital
retail onboarding (Appro), and financ
ial plann
ing and wealth management (Vault22).
Good progress also made in partnership with CIB, in build
ing
inst
itut
ional grade dig
ital
assets with capabil
it
ies from issuance to settlement products, and in developing dist
inct
business models to support trade and supply chains (e.g., Olea).
•
We have seen increas
ing cl
ient demand and validat
ion for these solut
ions and are receiv
ing
industry recognit
ion.
– Trust, founded in 2022, is the fourth largest retail bank in Singapore by customer size,
Appro won the grand prize at the Fintech World Cup during Dubai FinTech Summit
and Audax was named amongst the 20 Hottest Startups of 2024 by Singapore
Business Review.
•
In 2024, Bill added the CEO of SC Ventures to the Management Team to reinforce the strong
connections between our businesses, functions and ventures.
People and culture
• Continue to
build a high
performance
environment
and embed
the culture of
excellence.
•
Bill has led the Group through major senior management transit
ions
in 2024, includ
ing the
successful onboarding of Diego De Giorg
i as GCFO, and Roberto Hoornweg and Sun
il
Kaushal as co-heads of CIB.
•
Bill also oversaw the departure of Management Team members and expanded the
responsib
il
it
ies of others,
increas
ing res
il
ience, and creat
ing opportunit
ies for growth and
a stronger pipel
ine for success
ion.
•
There has been continued focus on build
ing and embedd
ing a culture of excellence across
the Group with an emphasise on high-performance, feedback, recognit
ion and a focus on
clear different
iat
ion in pay outcomes to reflect performance.
•
Bill has inst
illed a h
igh level of energy and posit
iv
ity into the organisat
ion wh
ich can be
challenging in a year of substantial change. He encouraged colleagues to align their focus
to the delivery of the clear strategic prior
it
ies we have set.
– In our annual My Voice survey, nearly 90% of colleagues ind
icated that they understand
the Bank’s strategy and believe it will enable us to be more competit
ive.
Weight
ing – 10%
Outcome – 9%
160
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Diego has demonstrated strong leadership in his first year as Group CFO, bring
ing energy, a fresh perspect
ive and a desire
for change and improvement for the Bank and his own function. Diego has quickly built his influence with
in the Group and
has developed strong relationsh
ips w
ith external stakeholders, includ
ing
investors. He has helped shape the focus for the
Management Team in 2024 with a convinc
ing narrat
ive, supported by rigorous analysis.
Financ
ial
Goal
Assessment
• Financ
ial
performance:
contribute to
the delivery of
Group financial
performance and
operating leverage.
• Finance function
performance: partner
with and support
business in the
execution of the
Group’s strategy.
•
Diego has played a pivotal role in driv
ing strateg
ic in
it
iat
ives
in CIB and WRB,
leveraging his operational experience, with a focus on deliver
ing susta
inably
higher returns.
•
Our equity story has been simpl
ified, w
ith a clear narrative on our different
iated
capabil
it
ies, and Diego has forged strong links with our investors, and increas
ingly
the media, to communicate this story.
•
He has ensured the Group mainta
ined a strong cost d
isc
ipl
ine and delivered posit
ive
jaws for the year.
•
Diego has played a key role in driv
ing closer collaborat
ion between the finance
function and the business on balance sheet optim
isat
ion and RWA effic
iency, result
ing
in further increased capital velocity, benefitt
ing both our RoTE and our ab
il
ity to return
capital to our shareholders.
•
He has been pivotal in driv
ing t
imely and high quality management informat
ion
to support execution of our strategy and allocation of resources to the most RoTE
accretive opportunit
ies.
Productiv
ity and transformat
ion
• Transformation
and simpl
ification:
lead implementat
ion
of strategic change
in
it
iat
ives across
the Group.
•
Diego has played a key role in starting up the Fit for Growth programme, and
mobil
is
ing Group-wide efforts to simpl
ify, standard
ise and dig
it
ise key elements of the
Bank. He has driven the execution of a set of in
it
iat
ives
ident
ified to del
iver effic
iency
saves, with the finance function playing a key role in tracking and monitor
ing progress.
•
Diego has ensured the finance function plays a pivotal role in provid
ing healthy
challenge and steering of our investment spend.
Risk and controls
• Process and controls:
continue to progress
on major multi-year
programs and
address regulatory
requirements.
•
Diego has focused intensely on simpl
ify
ing processes with
in the finance funct
ion,
enhancing the end-to-end governance model and data quality to ensure our risk and
control environment is managed effectively.
•
Diego has implemented several new in
it
iat
ives, such as balance sheet opt
im
isat
ion
and targeted business reviews.
•
He has mainta
ined open and transparent relat
ionsh
ips w
ith regulators and kept them
abreast of our progress on short- and medium-term regulatory prior
it
ies.
Weight
ing – 10%
Outcome – 9%
Diego De Giorg
i
161
Standard Chartered
– Annual Report 2024
Directors’ report
The LTIP values included in the single total figure of remuneration for 2024 are based on the awards that will be subject to
final performance testing in March 2025. These awards were granted in 2022 with a face value of 120 per cent of fixed pay,
to incent
iv
ise the achievement of the Group’s prior
it
ies over the three-year period 2022 to 2024. The awards are share-based
and are subject to the performance targets set out below which were set when the awards were granted and have not been
adjusted since.
A conduct gateway requirement must be met before any awards vest. The Committee concluded that Bill exhib
ited
appropriate conduct during the performance period and, therefore, the conduct gateway was met. Diego did not partic
ipate
in this award.
RoTE performance of 11.7 per cent was achieved, resulting in a 30 per cent outcome and relative TSR is projected to be ranked
above upper quartile resulting in a projected outcome of 30 per cent. The Committee considered performance against the
sustainab
il
ity and strategic proof points set out in the table below and determined that an outcome of 28 per cent was
appropriate. Based on these assessments, the total projected performance outcome is 88 per cent. The final relative TSR
performance will be assessed in March 2025 and any change to the overall outcome will be reported in the 2025 directors’
remuneration report.
The awards will vest pro rata over 2025 to 2029 and the shares will be subject to a 12-month retention period post-vesting.
Malus and clawback provis
ions apply.
2022-24 LTIP projected outcome for Bill Winters
Award share price (£)
Projected outcome
Valuation share price (£)
2022-24 LTIP projected
outcome (£000)
Bill Winters
4.876
88%
9.197
6,126
See
page 156
for the value attributable to share price growth in the single total figure of remuneration
Projected performance outcome
Measure
Weight
ing
Min
imum
performance
(25% outcome)
Maximum
performance
(100% outcome)
Assessment of
achievement
Outcome
status
Projected
outcome
RoTE
1
in 2024 plus CET1
2
underpin of the higher
of 13% or the min
imum
regulatory requirement
30%
7%
11%
RoTE 11.7% and
CET1 14.2%
Confirmed
30%
Relative TSR
performance against
peer group
30%
Median
Upper quartile
Currently estimated
above upper quartile
Projected
30%
Sustainab
il
ity
15%
Targets set for sustainab
il
ity
measures linked to the
business strategy
Above target
performance
achieved
Confirmed
14%
Other strategic
measures
25%
Targets set for strategic measures
linked to the business strategy
Above target
performance
achieved
Confirmed
14%
Total 2022-24 LTIP awards projected outcomes
88%
1
Underlying RoTE represents the ratio of the current year’s underlying profit attributable to ordinary shareholders plus fair value on other comprehensive income
equity movement relating to Ventures segment to the weighted average tangible equity, being ordinary shareholders’ equity less the intang
ible assets for the
reporting period. Underlying RoTE normally excludes material regulatory fines and certain other adjustments but, for remuneration purposes, this would be
subject to review by the Committee
2
The CET1 underpin was set at the higher of 13 per cent or the min
imum regulatory level at 31 December 2024. In add
it
ion, the Comm
ittee has the discret
ion to take
into account at the end of the performance period any changes in regulatory capital and risk-weighted asset requirements that might have been announced and
implemented after the start of the performance period
3
Final TSR performance will be assessed three years from the date of award, in March 2025
Assessment of non-financial measures
Sustainab
il
ity
Proof point
Assessment
•
Implement roadmap to achieve aim of net zero
by 2050
•
Partial vesting on the basis that 2022 targets were not
fully achieved. Commitments were fully achieved in 2023
and 2024.
•
Progress towards target of $300 bill
ion
in green and
transit
ion finance between 2021 and 2030 al
igned
with our Green and Sustainable Product Framework
and Transit
ion F
inance Framework
•
We have exceeded our target of mobil
is
ing $30 bill
ion
per year over the period and are on track to meet the 2030
commitment of $300 bill
ion.
•
Progress on goal for clients in carbon-intens
ive
industr
ies to have a strategy to trans
it
ion the
ir
business in line with the Paris Agreement
•
Financed emiss
ions cont
inue to decrease from baseline
and remain under risk appetite lim
its w
ith
in four of the
most carbon intens
ive sectors: O
il & Gas; Power; Steel; Auto.
LTIP awards
162
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Responsible company
Proof point
Assessment
•
Lift partic
ipat
ion of small businesses
through increas
ing access to
financial serv
ices
•
We have made progress against our goals to lift the partic
ipat
ion of
female entrepreneurs and SMEs, and to support companies to improve
working and environmental standards.
•
However, we have not achieved the targets orig
inally set
in 2022 and,
as such, have not allocated any vesting for these measures.
•
Support companies to improve
working and environmental standards
Clients (Network, Affluent, Mass and Ventures)
Proof point
Assessment
•
Improve client satisfact
ion rat
ing
evidenced in surveys and internal
benchmarks
•
Strong performance across all three years based on strengthening of
CIB engagement and experience scores and WRB net promoter score.
•
Deliver growth in affluent wealth client
activ
ity and
increase the number of
active personal clients
•
Partial outcome based on strong performance in Affluent Network growth
for 2024 and 2023, following weaker performance in 2022, which was
adversely impacted by COVID lockdowns, the Russia-Ukraine war and
aggressive FED rate hikes.
•
Deliver network income growth in
Corporate, Commercial & Institut
ional
Banking (now CIB)
•
Strong cross border income performance across all three years driven by
higher underlying growth.
•
Grow value of Dig
ital Ventures
•
Partial outcome based on exceeding targets in 2024 and 2023, driven by
Mox and Trust new to bank customers, and SCV Institut
ional Cl
ients growth
(2024 only), following weaker performance in 2022, which was adversely
impacted by market volatil
ity and delays to ventures launches.
Enablers (Innovation, new ways of working and people)
Proof point
Assessment
•
Increase senior female representation
to 34 per cent
•
Female representation was 33.1% in 2024, 32.5% in 2023, and 32.1% in 2022,
versus a starting point of 30.7% at the end of 2021.
•
However, we only achieved our annual target in 2022 resulting in
partial vesting.
•
Improve employee engagement
•
Employee net promoter score targets exceeded in all three years. The final
target of 17.4 for 2024 was exceeded two years early, in 2022, and remained
above target throughout the period, reaching a high of 25.6 in 2023.
•
Increase our culture of inclus
ion
score (internal index)
•
The My Voice 2024 inclus
ion score was 82.1% versus a target of 84.6%
•
While the posit
ion has
improved from the 2021 baseline of 80.1%, we did
not achieve our annual targets and we have not allocated any vesting for
the measure.
•
Improve employee perception
of innovat
ion
•
The My Voice score for this measure was 73% for 2024, which has been
broadly flat since 2022.
•
However, this is below the baseline of 76% in 2021 and we did not achieve
our annual targets. As such, we have not allocated any vesting for
the measure.
Responsib
il
ity and controls
Proof point
Assessment
•
Improve effectiveness of risk and
control governance
•
We achieved or exceeded our non-financ
ial r
isk reduction targets in 2023
and 2024, but only partially achieved targets in 2022.
•
Partial vesting given Audit self-ident
ified
issues are below the target
threshold in 2024.
•
Successfully deliver milestones with
in
the informat
ion and cyber secur
ity risk
management plan
•
We have continued to reduce our Cyber Risk profile over the period,
includ
ing the del
ivery of the Information and Cyber Security strategic plan,
with all object
ives ach
ieved.
Windfall gains
When making LTIP awards the Committee reviews the proposed
size of the award and considers the change in share price in the
period leading up to the award compared with the share price
when awards were made in the previous year. A sign
ificant fall
in share price will increase the overall number of shares being
awarded, and the Committee considers this, being mindful of
the potential for a ‘windfall gain’. For awards made in 2022 the
Committee reviewed the change in share price compared with
the previous year and, being comfortable that the change was
neglig
ible, at (0.5) per cent, determ
ined not to adjust the size of
the awards.
The Committee further reviews any increase in share price at the
end of the performance period, when awards are due to begin
vesting, and considers if any adjustment should be made where
an increase in share price is not reflective of a corresponding
improvement in underlying financ
ial performance. To date no
adjustments have been made.
163
Standard Chartered
– Annual Report 2024
Directors’ report
Service contracts for executive directors
Copies of the executive directors’ service contracts are available for inspect
ion at the Group’s reg
istered office. These contracts
have rolling 12-month and 6-month notice periods for Bill and Diego respectively and the dates of the executive directors’
current service contracts are shown below. Bill’s contract was updated effective 1 January 2020 to reflect the changes made
following the implementat
ion of the 2019 remunerat
ion policy and the change to pension contribut
ions.
Executive directors are permitted to hold non-executive directorsh
ip pos
it
ions
in other organisat
ions. Where such appo
intments
are agreed with the Board, the executive directors may retain any fees payable for their services. Bill served as a non-executive
director for Novartis International AG and received fees for the period covered by this report as set out below.
Date of Standard Chartered
employment contract
Details of any non-executive
directorsh
ip
Fees retained for any non-executive
directorsh
ip (local currency)
Bill Winters
1 January 2020
Novartis International AG
CHF360,000
Diego De Giorg
i
1 September 2023
–
–
Single figure of remuneration for the Chairman and INEDs (audited)
The Chairman and INEDs were paid in monthly instalments during the year. The INEDs are required to hold shares with a
nominal value of $1,000. The table below shows the fees and benefits received by the Chairman and INEDs in 2024 and
2023. The INEDs’ 2024 benefit figures are in respect of the 2023/24 tax year and the 2023 benefit figures are in respect of the
2022/23 tax year to provide consistency with the reporting of sim
ilar benefits
in previous years and with those received by
executive directors.
Fees £000
Benefits £000
1
Total £000
Shares
beneficially
held as at
31 December
2
2024
2023
2024
2023
2024
2023
2024
Group Chairman
José Viñals
1,293
1,293
57
69
1,350
1,362
45,000
Current INEDs
Shir
ish Apte
292
287
1
0
293
287
2,000
David Conner
3
254
250
1
1
255
251
10,000
Gay Huey Evans, CBE
4
26
150
0
0
26
150
2,615
Jackie Hunt
188
185
0
3
188
188
2,000
Diane Jurgens
5
125
–
0
–
125
–
8,888
Robin Lawther, CBE
230
225
0
0
230
225
2,000
Maria Ramos
337
332
1
0
338
332
2,000
Phil Rivett
252
247
0
0
252
247
2,128
David Tang
190
185
1
1
191
186
2,000
Carlson Tong
6
70
190
0
0
70
190
2,000
Linda Yueh, CBE
242
219
10
0
252
219
2,000
Lincoln Leong
7
43
–
0
–
43
–
13,369
1
The costs of benefits (and any associated tax costs) are paid by the Group
2
The beneficial
interests of Chairman and INEDs, and connected persons in the shares of the Company are set out above. These directors do not have any
non-beneficial
interests in the Company’s shares. None of these directors used shares as collateral for any loans. No director had either: (i) an interest in the
Company’s preference shares or loan stocks of any subsid
iary or assoc
iated undertaking of the Group; or (i
i) any corporate
interests in the Company’s ordinary
shares. All figures are as of 31 December 2024 or on the retirement of a director unless otherwise stated
3
David Conner’s fee includes his role on the Combined US Operations Risk Committee. David stepped down from the Board on 30 December 2024
4
Gay Huey Evans stepped down from the Board on 29 February 2024 and we are no longer tracking her shareholding. Her reported fee for 2024 of £26,000 is in
respect of the period of 1 January 2024 to 29 February 2024
5
Diane Jurgens was appointed to the Board on 1 March 2024 and Lincoln Leong was appointed to the Board on 2 November 2024
6
Carlson Tong stepped down from the Board on 9 May 2024 and we are no longer tracking his shareholding. His reported fee for 2024 of £70,000 is in respect of the
period of 1 January 2024 to 9 May 2024
7
Lincoln Leong’s fee includes his role as an independent non-executive director of Standard Chartered Bank (Hong Kong) Lim
ited
INEDs’ letters of appointment
The INEDs have letters of appointment, which are available for inspect
ion at the Group’s reg
istered office. INEDs are appointed
for a period of one year, unless terminated by either party with three months’ notice.
Details of the INEDs’ appointments are set out on
pages 106 to 108
164
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Directors’ remuneration policy
This section sets out our new directors’ remuneration policy in full, which will be put forward to shareholders for a bind
ing vote at
the 2025 AGM. If approved, the policy will apply from 8 May 2025. The current policy was approved at the AGM held on 4 May
2022 and has applied from that date.
See
pages 165 to 169
for the full policy that shareholders will be asked to approve.
Summary of proposed executive directors’ remuneration policy
Fixed remuneration
Current policy
Proposed changes in policy and why
Salary
Delivered part in cash paid monthly, and part in
shares with 20 per cent released annually over the
following five years.
What:
Salaries will be sign
ificantly reduced and pa
id
monthly in cash.
Why:
Remuneration is being rebalanced from
fixed pay towards performance
–
linked variable
remuneration to incent
iv
ise the delivery of sustainable
higher returns, and enhance the alignment of
executive pay with shareholder experience.
Pension
For directors who jo
ined before 4 May 2022, an annual
pension allowance or contribut
ion of 10 per cent of
salary is payable.
For directors who jo
ined after 4 May 2022, 10 per cent
of the cash element of salary only will be payable.
No change
Why:
Pension will be calculated as 10 per cent of cash
salary. The removal of salary shares, will automatically
result in a reduction in the pension allowance for the
Group CEO.
Benefits
A range of benefits are provided which support
directors to carry out their duties effectively.
No change
Why:
Core benefits continue to be aligned with the
wider workforce.
Variable remuneration
Current policy
Proposed changes in policy and why
Annual incent
ive
Maximum opportunity of 88 per cent of salary,
awarded in 50 per cent cash and 50 per cent shares
subject to holding requirements.
Awards are determined by the Committee, based on
the assessment of the annual incent
ive scorecard,
which contains at least 50 per cent weight
ing
in
financial measures, and add
it
ional strateg
ic and
personal performance measures.
What:
The maximum annual incent
ive opportun
ity
will be 270 per cent of salary for the CEO and 220 per
cent for the GCFO. The weight
ing of financial
measures in the annual scorecard will be increased to
at least 60 per cent.
Why:
Reflects the rebalancing of remuneration
towards performance-linked, variable pay. Changes
to the scorecard reflect shareholder feedback.
LTIP
Maximum opportunity of 132 per cent of salary, with
awards granted annually and subject to performance
measured over three years.
Phased vesting over three to seven years and subject
to a one year retention after each vest.
Awards are determined by the Committee, based
on the assessment of a scorecard, which contains
at least 50 per cent weight
ing
in financ
ial measures,
and addit
ional strateg
ic measures.
What:
The maximum LTIP award opportunity will be
490 per cent of salary for the CEO and 370 per cent for
the GCFO. The LTIP scorecard will contain financ
ial
measures of at least an 80 per cent weight
ing,
with the remainder being based on sustainab
il
ity
measures.
Why:
Reflects the rebalancing of remuneration
towards performance-linked, variable pay. Changes
to the scorecard reflect shareholder feedback.
Other remuneration
Current policy
Proposed changes in policy and why
Shareholding
requirements
Executive directors are required to hold a specif
ied
level of shares expressed as a percentage of salary.
During the current policy the requirements have been
250 per cent of salary for the CEO and 200 per cent of
salary for the GCFO. The requirement remains in place
for two years following cessation of employment.
What:
The shareholding requirement will increase to
500 per cent of salary for the CEO and 400 per cent
of salary for the GCFO. The post-employment
requirement will commence when an executive
director steps down from the Board, and not when
their employment ceases, if later.
Why:
The new shareholding requirement will exceed
the maximum LTIP opportunity as a multiply of salary,
further align
ing
interests of executive directors
with shareholders. It is appropriate for the post-
employment requirement to apply in the context
of services as an executive director.
165
Standard Chartered
– Annual Report 2024
Directors’ report
Other remuneration
Current policy
Proposed changes in policy and why
Leaver provis
ions
In-flight LTIP awards are prorated for time served
during the performance period when an executive
director retires. However, the Committee has the
flexib
il
ity to disapply the proration of LTIP awards
on retirement.
A set of min
imum cr
iter
ia must be met before the
Committee can consider the use of flexib
il
ity.
What:
Prorating in-flight LTIP awards for time served
remains the default approach. However, the option
to disapply proration will be retained only to be
considered on the retirement of Bill Winters from the
role of CEO, after consider
ing the c
ircumstances
at that time, includ
ing Group and
ind
iv
idual
performance, and any other relevant informat
ion.
The min
imum cr
iter
ia have been removed.
Why:
The Committee consider it appropriate to
retain this flexib
il
ity for Bill, after the very substantial
transformation of the Bank that he has overseen
during his tenure as CEO and the ongoing impact
that Bill’s achievements will have on the Bank.
The min
imum el
ig
ib
il
ity cr
iter
ia have been removed
to reflect feedback from some shareholders that
they believed the disappl
icat
ion of proration would
automatically apply if these were met.
Proposed executive directors’ remuneration full policy
The proposed executive directors’ remuneration policy, to be effective from the date of the Group’s AGM on 8 May 2025, for up
to three years, is set out below. During the policy term, the Committee may make minor changes to align with regulatory, legal
or tax changes, if necessary, without seeking shareholder approval.
The remuneration of the Group Chairman, executive directors, senior management and all colleagues was considered in the
development of the new policy. Alignment with the wider workforce and with Group-wide remuneration arrangements was
crit
ical to the approach taken
in the development of the new policy, which is designed to reflect the Group’s purpose as well as
following the princ
iples of our Fa
ir Pay Charter. During the review and development of the new policy, no ind
iv
idual partic
ipated
in decis
ions that would
impact the determinat
ion of the
ir own remuneration.
Fixed remuneration
Salary
Purpose and link
to strategy
•
To attract, retain, and develop high-calibre executive directors required to deliver the Group’s strategic
prior
it
ies.
•
Reflects the ind
iv
iduals’ role, skills and experience, following the Group-wide princ
iples wh
ich apply to
all employees.
Operation
•
Delivered in cash, paid monthly.
•
Reviewed annually in line with the wider workforce with any changes applying from April.
Maximum potential
•
Increases may be made at the Committee’s discret
ion to take account of c
ircumstances such as: Increase
in scope or responsib
il
ity; ind
iv
idual’s development in role; salary increases across the Group; alignment to
market-competit
ive levels.
Pension
Purpose and link
to strategy
•
Forms part of a competit
ive remunerat
ion package and supports executive directors’ long-term
retirement savings.
Operation
•
Paid as a cash allowance and/or contribut
ion to a defined contr
ibut
ion scheme.
•
Pension contribut
ions may also be made
in lieu of any waived salary or the cash amount of any annual
incent
ive.
Maximum potential
•
10 per cent of salary.
Benefits
Purpose and link
to strategy
•
A local market-competit
ive package to support execut
ives carrying out their duties effectively.
Operation
•
Benefits may include a cash benefits allowance, car and driver (or other car-related service), private
medical insurance, long-term disab
il
ity cover, life insurance, financ
ial adv
ice and tax preparation and tax
return assistance.
•
Addit
ional benefits may also be prov
ided where an executive director is relocated or spends a substantial
portion of their time in more than one jur
isd
ict
ion for bus
iness purposes, includ
ing but not l
im
ited to,
relocation, shipp
ing and storage, hous
ing allowance, education fees and tax and social security costs.
•
Other benefits may be offered if considered appropriate and reasonable by the Committee.
•
Executive directors are reimbursed for expenses, such as travel and subsistence, and any associated tax
incurred in the performance of their duties.
•
Directors may be accompanied by their spouse or partner to meetings/events. In exceptional circumstances,
the costs (and any associated tax) will be met by the Group.
Maximum potential
•
Set at a level the Committee considers appropriate based on factors includ
ing the market and
ind
iv
idual
circumstances.
166
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Variable remuneration
Annual incent
ive
Purpose and link
to strategy
•
Incentiv
ise performance l
inked to the Group’s strategy and aligned to shareholder interests.
Operation
•
Determined based on Group and ind
iv
idual performance over the preceding financ
ial year.
•
Delivered as a combinat
ion of cash and shares subject to hold
ing requirements.
•
The Committee may make amendments to accommodate future changes to remuneration regulations
relating to deferrals and post-vest retention periods.
Maximum potential
•
The annual incent
ive max
imum that can be awarded is 270 per cent of salary for the CEO and
220 per cent of salary for the GCFO and can be any amount from zero to the maximum.
Performance
measures
•
Determined by the Committee based on an assessment of an annual scorecard contain
ing financial,
strategic and personal performance measures. Financ
ial measures w
ill comprise at least 60 per cent of
the annual scorecard.
•
The targets, together with an assessment of performance against those targets, will be disclosed
retrospectively.
•
The Committee will review the scorecard annually and may vary the measures, weight
ings and targets
each year.
•
Discret
ion may be exerc
ised by the Committee to ensure that the outcome is a fair and accurate reflection
of business and ind
iv
idual performance (but it will not exceed the maximum opportunity).
•
The overall annual incent
ive outcome w
ill be subject to a risk and control modif
ier, assessed over the year.
Long-term incent
ive plan (LTIP)
Purpose and link
to strategy
•
Incentiv
ise performance l
inked to the Group’s strategy and aligned to shareholder interests.
Operation
•
Granted annually with performance of the Group and of the ind
iv
idual considered in determin
ing the
award level.
•
Performance assessed over a forward-looking period of at least three years.
•
Delivered in shares which are subject to deferral and holding periods.
•
The Committee may make changes to accommodate future changes to remuneration regulations
relating to deferrals and post-vest retention periods.
•
The number of shares awarded in respect of LTIP awards may take into account the current regulatory
prohib
it
ion on div
idend equ
ivalents (calculated by reference to market consensus div
idend y
ield) such that
the overall value of the award is mainta
ined.
Maximum potential
•
The LTIP maximum that can be awarded is 490 per cent of salary for the CEO and 370 per cent of salary
for the GCFO and can be any amount from zero to the maximum.
Performance
measures
•
May be a mix of financ
ial measures and other long-term strateg
ic measures.
•
Financ
ial measures w
ill comprise at least 80 per cent of the performance measures. Weight
ings and
targets will be set in advance of each grant by the Committee and disclosed prospectively. Performance
against those measures will be disclosed retrospectively.
•
For financial measures, the performance outcome w
ill be assessed on a slid
ing-scale bas
is between
threshold and maximum with no more than a 25 per cent outcome at threshold performance.
•
The overall outcome will be subject to a risk and control modif
ier, assessed over the performance per
iod.
Annual incent
ive and LTIP operat
ion
•
Annual incent
ive awards w
ill be made in cash and shares. LTIP awards will be granted as condit
ional share awards.
•
Deferral and vesting of awards are structured so that they comply with prevail
ing remunerat
ion regulations.
•
The Committee can, in specif
ied c
ircumstances, apply malus or clawback to all or part of annual incent
ive and/or any
LTIP awards. See page 180 for more details.
•
On the occurrence of corporate events and other reorganisat
ion events, the Comm
ittee may apply discret
ion to adjust
the vesting and/or the number of shares underlying an award.
167
Standard Chartered
– Annual Report 2024
Directors’ report
Shareholding requirements
Purpose and link
to strategy
•
To align executive director and shareholder interests.
Operation
•
Executive directors are expected to build and mainta
in a sharehold
ing, with
in five years from the date of
their appointment (or, from the date of any changes to the terms of the shareholding requirement, if later),
with a value equivalent to:
–
CEO: 500 per cent of salary
–
GCFO: 400 per cent of salary
•
Shares that count towards the requirement are benefic
ially owned shares, vested share awards subject
to a retention period and unvested share awards for which performance condit
ions have been sat
isf
ied
(on a net-of-tax basis).
•
Executive directors will have a reasonable time period to build up to this requirement again if it is not met
because of a sign
ificant share pr
ice depreciat
ion.
•
If the requirement is not achieved with
in the spec
if
ied t
ime frame, the Committee will determine
appropriate actions based on the circumstances that resulted in the requirement not being met.
Sharesave
Purpose and link
to strategy
•
Provides an opportunity for all employees to invest voluntarily in the Group.
Operation
•
An all-employee plan where partic
ipants (
includ
ing execut
ive directors) are able to open a savings contract
to fund the exercise of an option over shares.
•
Savings per month of between £5 and £500.
•
The option price is set at a discount of up to 20 per cent of the share price at the date of inv
itat
ion, or such
other discount as may be determined by the Committee.
Legacy arrangements
Purpose and link
to strategy
•
Honour exist
ing comm
itments.
Operation
•
Any previous commitments or arrangements entered into with current or former executive directors will be
honoured, includ
ing remunerat
ion arrangements entered into under the previously approved directors’
remuneration policy.
External roles
Purpose and link
to strategy
•
To encourage self-development and allow for the introduct
ion of external
ins
ight and pract
ice.
Operation
•
Executive directors may accept appointments in other organisat
ions subject to relevant Board approval.
Executive directors are generally lim
ited to one non-execut
ive directorsh
ip
in another listed company. Fees
may be retained by the executive director.
Executive directors’ policy on recruitment
The Committee’s approach to recruitment is to attract diverse experience and expertise by paying competit
ive remunerat
ion
that reflects our internat
ional nature and enables us to attract and reta
in key talent from a global marketplace. The policy is
summarised below.
Fixed remuneration
Operation
Salary
In line with policy
Pension
In line with policy
Benefits
In line with policy
Variable remuneration
Operation
Annual incent
ive
In line with policy
LTIP
In line with policy
Shareholding
requirements
In line with policy
Buy-out awards
•
The Committee may consider buying out forfeited remuneration or opportunit
ies, and/or compensat
ing for
losses incurred as a result of jo
in
ing the Group, subject to proof of forfeiture or loss.
•
Any award will be structured with
in the requ
irements of the applicable remuneration regulations and will
be no more generous overall than the remuneration forfeited in terms of the existence of performance
measures, value, tim
ing and form of del
ivery.
•
The value of buy-out awards is not included with
in the max
imum variable remuneration level where it
relates to forfeited remuneration from a previous role or employer.
Legacy matters
•
Where a senior executive is promoted to the Board, their exist
ing contractual comm
itments agreed prior
to their appointment may still be honoured in accordance with the terms of the relevant commitment,
includ
ing vest
ing of any pre-exist
ing deferred or long-term
incent
ive awards.
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Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Executive directors’ policy on contracts and loss of office
Element
Operation
Notice period
•
Maximum of 12 months’ notice from the company and the executive director.
Payments in lieu
of notice
•
May be paid in lieu of notice if not required to remain in employment for the whole notice period.
Garden leave
•
May be required to work and/or serve a period of garden leave during the notice period.
Compensation for
loss of office in
service contracts
•
Dependent on an ind
iv
idual’s contract but in any event no more than 12 months’ salary, pension and
benefits.
•
Payable quarterly and subject to mit
igat
ion if the executive director seeks alternative employment.
•
Not in addit
ion to any payment
in lieu of notice or if the ind
iv
idual remains in employment for the whole
notice period.
•
In the event of a settlement agreement, the Committee may make payments it considers reasonable in
settlement of potential legal claims, includ
ing potent
ial entitlement to compensation in respect of statutory
rights under employment protection legislat
ion.
•
The Committee may also include in such payments, reasonable reimbursement of professional fees, such as
legal fees and tax advice (and any associated tax), in connection with such arrangements. Career transit
ion
support may also be provided.
Treatment of variable remuneration on terminat
ion
Operation
•
Elig
ible leaver status w
ill generally be given in cases such as death, disab
il
ity, retirement, and redundancy.
Discret
ion
is applied as to awarding elig
ible leaver status
in cases of mutual separation.
•
Elig
ible leavers (as determ
ined by the Committee) may be elig
ible for var
iable remuneration although there
is no automatic entitlement.
•
The Committee has discret
ion to reduce the ent
itlement of an elig
ible leaver
in line with performance,
contribut
ion and the c
ircumstances of the terminat
ion.
•
On a change of control, the amount is pro-rated for the period of service during the year. The Committee
may alter the performance period, measures, and targets to ensure the performance measures remain
relevant but challenging. The Committee has the discret
ion under the relevant plan rules to determ
ine how
elig
ible leaver status should be appl
ied on terminat
ion.
•
For elig
ible leavers, deferred awards not subject to long-term performance measures vest
in full over the
orig
inal t
imescale and remain subject to the Group’s clawback arrangements. The Committee has
discret
ion to reduce the level of vest
ing.
•
Awards subject to long-term performance measures will vest, subject to those measures, on a pro rata basis
(reflecting the proportion of the relevant financ
ial performance per
iod that the executive director has been
employed) and remain subject to the Group’s clawback arrangements.
•
The Committee has the flexib
il
ity to disapply proration for time served on the vesting of LTIP awards on the
retirement of Bill Winters from the role of Group CEO, after consider
ing the c
ircumstances at that time
includ
ing: the performance of the Group; B
ill’s personal performance; and any other relevant informat
ion.
–
If the flexib
il
ity is used, the Committee would provide a clear and full disclosure at the time and no LTIP
award would be granted in the final year of employment.
–
There would be no addit
ional payments
in lieu of notice.
–
If Bill takes up a new role as an executive at a competitor, all unvested awards will lapse. Vesting may be
subject to non-solic
it and non-compete requ
irements.
•
Awards lapse for executive directors not designated elig
ible leavers.
•
On a change of control, the Committee may allow awards to continue or roll-over in agreement with the
acquirer, taking into account the circumstances, and may alter the performance period, measures and
targets to ensure the performance measures remain relevant.
Post-employment shareholding requirement
Purpose and link
to strategy
•
To align executive directors’ interests with the Group’s long-term strategy and the interests of shareholders
following employment.
Operation
•
On stepping down as an executive director, ind
iv
iduals will be required to mainta
in the sharehold
ing
requirement for two years (or, if lower, the actual shareholding on departure).
•
After the executive director has stepped down, the shareholding requirement will be mainta
ined through
self-certif
icat
ion, to the extent it is not met via shares held with
in the Group’s employee share plan and
nominee accounts.
169
Standard Chartered
– Annual Report 2024
Directors’ report
Notes to the remuneration policy for executive directors
Committee’s judgement and discret
ion
The Committee has certain operational discret
ion that
it may exercise when consider
ing execut
ive directors’ remuneration,
includ
ing but not l
im
ited to:
•
Determin
ing whether a leaver
is an elig
ible leaver under the Group’s share plans and treatment of remunerat
ion
arrangements.
•
Amending LTIP performance measures following a corporate event to ensure a fair and consistent assessment
of performance.
•
Decid
ing whether to apply malus or clawback to an award.
Abil
ity for the Comm
ittee to amend the policy for emerging and future regulatory requirements
The Committee retains the discret
ion to make reasonable and proport
ionate changes to the policy if they consider this
appropriate to respond to changing legal or regulatory requirements or guidel
ines. Th
is includes the abil
ity to make
admin
istrat
ive changes to benefit the operation of the policy and/or to implement such changes ahead of any formal
effective date, ensuring timely compliance.
Where proposed changes are considered by the Committee to be material, the Group will engage with its major
shareholders and any changes would be formally incorporated into the policy when it is next put to shareholders
for approval.
Chair and independent non-executive directors’ remuneration policy
Fees
Purpose and link
to strategy
•
Attract a Chair and INEDs who, together with the Board as a whole, have a broad range of skills and
experience to determine Group strategy and oversee its implementat
ion.
Operation
•
The INEDs are paid fees to chair or be a member of Board committees and for the Deputy Chair and Senior
Independent Director roles.
•
Fees are set at a level which reflect the duties, time commitment and contribut
ion expected from the Cha
ir
and INEDs, and are appropriately posit
ioned aga
inst those in banks and other companies of a sim
ilar scale
and complexity.
•
Fees are paid in cash or shares. Post-tax fees may be used to acquire shares.
•
The Chair and INED fees are reviewed period
ically. The Board sets INED fees and the Comm
ittee sets the
Chair’s fees. The Chair and INEDs recuse themselves from any discuss
ion on the
ir fees.
•
INEDs may also receive fees as directors of subsid
iar
ies of Standard Chartered PLC, to the extent permitted
by regulation.
•
Overall aggregate base fees paid to the Chair and all INEDs will remain with
in the l
im
it stated
in the Articles
of Associat
ion (currently £2 m
ill
ion per annum).
•
There are no recovery provis
ions or performance measures.
Benefits
Purpose and link
to strategy
•
Appropriate benefits package to support the Chair and INEDs to carry out their duties effectively.
Operation
•
The Chair is provided with benefits associated with the role, includ
ing a car and dr
iver and private medical
insurance, permanent health insurance and life insurance. Any tax costs associated with these benefits are
paid by the Group. Any future Chair based outside of the UK may receive assistance with their relocation
consistent with the support offered to ind
iv
iduals under the Group’s internat
ional mob
il
ity pol
ic
ies.
•
The Chair and INEDs are reimbursed for expenses, such as travel and subsistence (and includ
ing any
associated tax), incurred in the performance of their duties, and may receive tax preparation and tax
return assistance.
•
In exceptional circumstances the Chair and INEDs may be accompanied by their spouse or partner to
meetings or events. The costs (and any associated tax) are paid by the Group.
Approach on recruitment, service contracts and loss of office for Chair or INEDs
Service contracts and policy on payment for loss of office for the Chair and INEDs
Fees and benefits
•
In line with the Chair and INED remuneration policy
Service contracts
and loss of office
•
The Chair is provided a notice period of up to 12 months and is entitled to a payment in lieu of notice in
respect of any unexpired part of the notice period at the point of terminat
ion.
•
INEDs are appointed for a period of one year unless terminated earlier by either party with three months’
written notice. No entitlement to the payment of fees or provis
ion of benefits cont
inues beyond terminat
ion
of the appointment and INEDs are not entitled to any payments for loss of office (other than entitlements
under contract law, such as a payment in lieu of notice if notice is not served).
170
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Remuneration for the executive directors in 2025 will be in line with our new directors’ remuneration policy, subject to
shareholder approval at the May 2025 AGM. Key elements include salary, pension, benefits, an annual incent
ive and an
LTIP award.
See
pages 164 to 169
for full details
The Committee considered the executive directors’ salaries as part of the overall review of the directors’ remuneration policy.
As explained on pages 145 to 147, total remuneration is being rebalanced from fixed pay towards performance-linked variable
pay, and as such, salaries are being reduced by 40 per cent for Bill and by 33 per cent for Diego with effect from 1 April 2025
(subject to approval of the directors’ remuneration policy in May 2025).
£000
Bill Winters
Diego De Giorg
i
2025
2024
% change
2025
2024
% change
Salary
1,500
2,517
(40%)
1,100
1,650
(33%)
of which cash
1,500
1,258
19%
1,100
1,100
-
of which shares
-
1,259
(100%)
-
550
(100%)
Pension
150
252
(40%)
110
110
-
Total fixed pay
1,650
2,769
(40%)
1,210
1,760
(31%)
Illustration of applicat
ion of 2025 remunerat
ion policy
The charts below illustrate potential directors’ remuneration outcomes based on our new policy. These illustrate four
performance scenarios and the percentages in each bar show the remuneration provided by each pay element. 2024 single
figures of remuneration for Bill and Diego and the 2023 single figure for Bill are also shown.
Executive director remuneration
(£000)
Bill Winters
2,000
0
4,000
6,000
8,000
10,000
16,000
14,000
12,000
20,000
18,000
Fixed remuneration
Annual incent
ive
LTIP
Min
imum
1,949
100%
On-target
7,649
25%
27%
48%
Maximum
13,349
15%
30%
55%
17,024
11%
24%
65%
2023 single figure
2024 single figure
2024 single figure
7,309
42%
20%
38%
10,656
29%
14%
57%
Maximum + 50%
share price increase
Diego De Giorg
i
Min
imum
1,271
100%
On-target
4,516
28%
27%
45%
Maximum
7,761
16%
31%
53%
9,796
2,769
13%
65%
35%
25%
62%
Maximum + 50%
share price increase
£000
Salary
Benefits
Pension
Total
Fixed remuneration
Consists of salary and pension (as at 1 April 2025)
and benefits (received in 2024)
Bill Winters
1,500
299
150
1,949
Diego De Giorg
i
1,100
61
110
1,271
Min
imum
Bill Winters
Diego De Giorg
i
Target
% outcome
Maximum
% outcome
% of salary
Target
% of salary
Max
% of salary
Target
% of salary
Max
Annual incent
ive
No annual incent
ive
is awarded
50%
100%
135%
270%
110%
220%
LTIP award
No LTIP award vests
50%
100%
245%
490%
185%
370%
2025 policy implementat
ion for d
irectors
171
Standard Chartered
– Annual Report 2024
Directors’ report
2025 annual incent
ive scorecard
Our annual incent
ive scorecard reflects our strateg
ic prior
it
ies. Targets are set annually by the Committee based on the Group’s
annual financial plans and strateg
ic prior
it
ies. Targets and performance achieved will be disclosed retrospectively in the 2025
Annual Report due to commercial sensit
iv
ity.
Financ
ial measures make up 60 per cent of the scorecard. The Comm
ittee assesses strategic and personal measures using
a quantitat
ive and qual
itat
ive framework. The overall outcome w
ill be subject to a risk and control modif
ier, assessed over
the year.
2025 scorecard – financial measures
Measure
Weight
ing
Target
Income
1
20%
Targets to be disclosed retrospectively
Costs
20%
RoTE
2
with a CET1
3
underpin of the higher of 13% or the
min
imum regulatory requ
irement
20%
1
The Group’s reported performance is adjusted for profits or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent,
other infrequent and/or exceptional transactions that are sign
ificant or mater
ial in the context of the Group’s normal business earnings for the period and items
which management and investors would ordinar
ily
ident
ify separately when assess
ing underlying performance period by period
2
Underlying RoTE represents the ratio of the current year’s underlying profit attributable to ordinary shareholders plus fair value on other comprehensive income
equity movement relating to Ventures segment to the weighted average tangible equity, being ordinary shareholders’ equity less the intang
ible assets for the
reporting period. Underlying RoTE normally excludes material regulatory fines and certain other adjustments but, for remuneration purposes, this would be
subject to review by the Committee
3
The CET1 underpin will be set at the higher of 13 per cent or the min
imum regulatory level as at 31 December 2025. In add
it
ion, the Comm
ittee has the discret
ion
to take into account at the end of the performance period any changes in regulatory capital and risk-weighted asset requirements that might have been
announced and implemented after the start of the performance period
2025 scorecard – strategic measures
Clients (Network, Affluent)
Target
•
Deliver cross-border income growth in CIB
•
Grow Net New Money from new and exist
ing Affluent cl
ients
Weight
ing – 10%
Sustainab
il
ity
Target
•
Grow sustainable finance revenue
•
Reduce emiss
ions from our own operat
ions (scope 1 and 2 emiss
ions) to net zero by the end
of 2025
Weight
ing – 10%
Productiv
ity and transformat
ion
Target
•
Execute on our most crit
ical transformat
ion programmes
•
Execute on our Fit For Growth object
ives to s
imply, standardise, and dig
it
ise the Bank
Weight
ing – 5%
People and culture
Target
•
Delivery of our commitment to have 35 per cent females in senior leadership posit
ions, at a
global level, by 2025
1
•
Improve our ‘culture of inclus
ion’ score (
internal index)
Weight
ing – 5%
1
Subject to local legal requirements
2025 scorecard – personal performance measures
Bill – performance goals
Target
•
Support and ensure a smooth transit
ion of the Group Cha
ir, and continue to develop the senior
internal succession pool.
•
Lead and support delivery of the strategy through relentless execution under a strong risk and
controls framework, to produce higher and sustained profitable growth.
•
Continue to advance internal transformation, ensuring the Bank progresses and delivers key
change management in
it
iat
ives,
includ
ing F
it for Growth.
•
Promote and develop an innovat
ion culture throughout the Bank,
includ
ing
in products and
services, increas
ing connect
iv
ity between Ventures and the rest of the Bank.
•
Continue to develop and embed an ambit
ious, h
igh performance culture, while retain
ing the
best of the Bank’s tradit
ional culture.
Weight
ing – 10%
172
Standard Chartered
– Annual Report 2024
Directors’ report
Directors’ remuneration report
Diego – performance goals
Target
•
Strategic focus:
Deliver our sharpened focus on cross-border corporate and investment
banking business and on wealth management for Affluent customers
•
Business performance:
Support business pursuit of sustainably higher returns and foster a high
performance culture
•
Transformation and simpl
ification:
Execute the Group transformation agenda while
mainta
in
ing necessary cost disc
ipl
ine
•
Process and controls:
Lead implementat
ion of F
inance and Group-wide in
it
iat
ives a
imed at
business needs and regulatory requirements
Weight
ing – 10%
LTIP awards for the executive directors to be granted in 2025
Award as % of salary
Award value on grant (£)
Award value on vesting (£)
Bill Winters
490%
7,350,000
To be determined based on the level of performance
achieved at the end of the three-year period against
the performance measures and the future share price.
Diego De Giorg
i
370%
4,070,000
The RoTE target range for the awards is increased to 11.5 to 14.5 per cent, versus 10 to 13 per cent for the 2024-26 awards,
reflecting the progress in RoTE achieved in 2024 and our 2026 target of approaching 13 per cent. The overall outcome will be
subject to a risk and control modif
ier, assessed over the performance per
iod.
Peer group for the relative TSR measure in the 2025-27 LTIP
The peer group of companies selected for the relative TSR performance calculation are those with generally comparable
business activ
it
ies, size or geographic spread to Standard Chartered or with which we compete for investor funds and
talent. The peer group has been streamlined to reflect companies who we may compete with for investment, and now
consists of 13 peers. Banco Santander, Bank of America, Bank of East Asia, KB Financ
ial and Soc
iété Générale are no longer
considered to be comparable peers as they have sign
ificantly d
ifferent purpose, strategies and performance profiles.
China Merchants Bank has been added to the peer group.
Relative TSR will be assessed over a calendar three-year period, changed from the current approach of three years from
grant (typically in March). This will simpl
ify the performance outcome process, w
ith all performance measures being
assessed over the same time period.
TSR is measured in GBP for each company and the data will be averaged over a three-month period at the start and end
of the three-year measurement period which starts from the 1 January of the year of grant. The averaging period is being
changed from one month to reduce the impact of share price volatil
ity.
Barclays
Deutsche Bank
Oversea Chinese Banking Corporation
BNP Paribas
HSBC
Standard Bank
Cit
i
ICICI
UBS
China Merchants Bank
JPMorgan Chase
United Overseas Bank
DBS Group
Financ
ial measures for 2025-27 LTIP awards
Measure
Weight
ing
Min
imum
performance (25%)
Between min
imum
and maximum performance
Maximum performance
(100%)
RoTE
1
in 2027 with a
CET1
2
of the higher of
13% or the min
imum
Regulatory
requirement
40%
11.5%
Straight-line assessment
between min
imum and
maximum
14.5%
Relative TSR
performance against
peer group
40%
Median
Straight-line assessment
between peer companies
posit
ioned
immed
iately
above and below the Group
Upper quartile
1
Underlying RoTE represents the ratio of the current year’s underlying profit attributable to ordinary shareholders plus fair value on other comprehensive income
equity movement relating to Ventures segment to the weighted average tangible equity, being ordinary shareholders’ equity less the intang
ible assets for the
reporting period. Underlying RoTE normally excludes material regulatory fines and certain other adjustments but, for remuneration purposes, this would be
subject to review by the Committee
2
The CET1 underpin will be set at the higher of 13 per cent or the min
imum regulatory level as of 31 December 2027. In add
it
ion, the Comm
ittee has the discret
ion
to take into account at the end of the performance period any changes in regulatory capital and risk-weighted asset requirements that might have been
announced and implemented after the start of the performance period, for example in relation to Basel IV
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Standard Chartered
– Annual Report 2024
Directors’ report
Non-financial measures for 2025-27 LTIP awards
Sustainab
il
ity
•
Progress towards our $300 bill
ion susta
inable finance mobil
isat
ion target.
•
Net zero sector decarbonisat
ion:
–
Monitor
ing of 12 net zero h
igh carbon sectors, being assessed on annual year-on-year reductions. See pages 78 to 88
for further details.
–
Outcome based on the number of sectors reducing emiss
ions
intens
ity.
Weight
ing – 20%
INED fees
The Board regularly reviews the fee levels, consider
ing market data and the dut
ies, time commitment and contribut
ion
expected for the PLC Board and, where appropriate, subsid
iary boards. Cons
ider
ing the
increas
ing demands made of our
INEDs, the Board determined an increase in INED basic fees of £3,000 to £118,000 to be appropriate. The revised fees are
effective from 1 January 2025.
The Chairman and the INEDs are elig
ible for benefits
in line with the directors’ remuneration policy. Neither the Chairman or
INEDs receive any performance-related remuneration.
Our Chair and independent non-executive directors’ remuneration policy is on
page 169
of this report and on our website at
sc.com
Role
Annual fee
Group Chairman
1
£1,293,000
Senior Independent Director
£45,000
Independent Non-Executive Director
£118,000
Committee
Member fee
Chair fee
Audit, Board Risk, Remuneration
£40,000
£80,000
Culture and Sustainab
il
ity
£35,000
£70,000
Governance and Nominat
ion
£17,000
Nil
1
The Group Chairman receives a stand-alone fee which is inclus
ive of all serv
ices (includ
ing Board and Comm
ittee responsib
il
it
ies). The Group does not currently
util
ise the role of Deputy Cha
irman and does not plan to do so
174
Standard Chartered
– Annual Report 2024
Directors’ report
Addit
ional remunerat
ion disclosures
Addit
ional remunerat
ion disclosures
The following disclosures provide further informat
ion and context on execut
ive director and wider workforce remuneration as
required by the UK directors’ remuneration report regulations and the Stock Exchange of Hong Kong.
The relationsh
ip between the remunerat
ion of the Group CEO and all UK employees
Ratio of the total remuneration of the CEO to that of the UK lower quartile, median and upper quartile employees
Year
Method
CEO
UK employee – £000
Pay ratio
£000
P25
P50
P75
P25
P50
P75
2024
A
10,656
113
164
247
94:1
65:1
43:1
2023
A
7,309
110
162
247
66:1
45:1
30:1
2022
A
6,408
95
145
228
67:1
44:1
28:1
2021
A
4,740
92
139
215
52:1
34:1
22:1
2020
A
3,926
84
128
199
46:1
31:1
20:1
2019
A
5,360
83
128
212
65:1
42:1
25:1
2018
A
6,287
78
124
208
80:1
51:1
30:1
2017
A
4,683
76
121
203
61:1
39:1
23:1
The ratio will depend materially on yearly LTIP outcomes for the CEO, and accordingly may fluctuate. The Committee also
discloses ratios using salary and salary plus annual incent
ive, as most UK employees do not typ
ically receive LTIP awards.
Addit
ional rat
ios of pay based on salary and salary plus annual incent
ive
Salary
CEO
UK employee – £000
Pay ratio
£000
P25
P50
P75
P25
P50
P75
2024
2,517
85
116
156
30:1
22:1
16:1
2023
2,496
78
103
149
32:1
24:1
17:1
2022
2,418
72
87
138
34:1
28:1
18:1
2021
2,370
68
100
136
35:1
24:1
17:1
2020
2,370
63
93
116
38:1
25:1
20:1
2019
2,353
65
90
128
36:1
26:1
18:1
2018
2,300
59
86
142
39:1
27:1
16:1
2017
2,300
55
81
124
42:1
28:1
19:1
Salary plus annual incent
ive
CEO
UK employee – £000
Pay ratio
£000
P25
P50
P75
P25
P50
P75
2024
3,979
98
141
217
41:1
28:1
18:1
2023
3,958
96
138
220
41:1
29:1
18:1
2022
3,917
84
123
202
47:1
32:1
19:1
2021
3,559
79
122
186
45:1
29:1
19:1
2020
2,756
74
104
175
37:1
26:1
16:1
2019
3,604
73
109
187
49:1
33:1
19:1
2018
3,691
72
105
183
52:1
35:1
20:1
2017
3,978
69
103
182
58:1
39:1
22:1
The 2024 total remuneration ratios have increased compared with previous years, driven princ
ipally by the 2022-24 LTIP
projected outcome for the CEO, reflecting the Group’s consistent, strong performance over the last three years and the
sign
ificant
increase in our share price over recent months.
CEO pay ratio methodology
•
Pay ratios are calculated using Option A methodology, aligned with investor guidance.
•
Employee pay data is based on FTE UK employees as of 31 December for the relevant year, excluding leavers, jo
iners,
and transfers in/out of the UK during the year to ensure a like-for-like comparison. Total remuneration is calculated in line
with the single figure methodology and insured benefits data is based on notional premiums. No other adjustments or
assumptions have been made.
•
CEO pay is the single figure of remuneration for 2024 and is restated for 2023 to reflect the final 2021-23 LTIP
performance outcome assessed in March 2024. The 2024 ratio will be restated in the 2025 report to reflect the final
2022-24 LTIP performance outcome for elig
ible employees and the CEO.
•
The Committee considered the data for the three ind
iv
iduals ident
ified at the quart
iles for 2024 and believes it fairly
reflects UK employee pay. They were full-time employees and received remuneration in line with policy, without
exceptional pay.
•
Our LTIP links remuneration to the achievement of long-term strategy and reinforces alignment with shareholder
interests. Partic
ipat
ion is typically senior employees who directly influence the award’s performance targets.
The ident
ified quart
ile employees are not LTIP partic
ipants.
175
Standard Chartered
– Annual Report 2024
Directors’ report
Group performance versus the CEO’s remuneration
The graph below shows the Group’s TSR performance on a cumulative basis over the past 10 years alongside that of the
FTSE 100 and peer banks. The graph also shows CEO remuneration based on the single figure over the 10 years ended
31 December 2024 for comparison. The FTSE 100 provides a broad comparison group against which shareholders may
measure their relative returns.
0
2
4
6
8
10
12
Jan 25
Jan 24
Jan 23
Jan 22
Jan 21
Jan 20
Jan 19
Jan 18
Jan 17
Jan 16
Jan 16
0
50
100
150
200
250
Value of £100 invested on 31 December 2013
CEO total remuneration (£ mill
ion)
CEO single figure of remuneration (Peter Sands)
CEO single figure of remuneration (Bill Winters)
Standard Chartered
FTSE
100
Comparator median
The table below shows the single figure of total remuneration for the CEO since 2015 and the variable remuneration delivered
as a percentage of maximum opportunity.
Salary
PS
BW
BW
BW
BW
BW
BW
BW
BW
BW
BW
2015
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Single figure of total remuneration £000
1,290
8,399
3,392
4,683
6,287
5,360
3,926
4,740
6,408
7,309
10,656
Annual incent
ive as percentage
of maximum opportunity
0%
0%
45%
76%
63%
55%
18.5%
57%
70%
66%
66%
Vesting of LTIP awards as a percentage of
maximum
1
0%
–
–
–
27%
38%
26%
23%
37%
66%
88%
1
The 2024 projected LTIP outcome of 88 per cent is subject to change until the final assessment of TSR performance in March 2025.
•
Bill’s single figure of total remuneration in 2015 includes his buyout award of £6.5 mill
ion to compensate for the forfe
iture of
share interests on jo
in
ing from his previous employment
•
The 2023 single figure for Bill has been restated based on the actual performance outcome and share price when the 2021-23
LTIP awards started vesting in March 2024.
Annual percentage change in remuneration of directors and UK employees
To comply with the Shareholder Rights Direct
ive, we prov
ide a comparison of the changes in remuneration of PLC Board
directors against average full-time equivalent UK employee remuneration (using UK employees as of 31 December for the
relevant year, excluding in-year jo
iners and
internat
ional transfers). UK employee remunerat
ion is calculated on a mean
basis for consistency year-on-year. INEDs receive lim
ited taxable benefits and small value changes may lead to year-on-
year fluctuations.
Salary % change
Taxable benefits % change
Annual incent
ive % change
2024
2023
2022
2021
2020
2024
2023
2022
2021
2020
2024
2023
2022
2021
2020
CEO
Bill Winters
0.8
3.2
2.0
0.0
0.7
3.9
(3.0)
79.8
(26.5)
(2.9)
0.0
(2.5)
26.1
208.1
(69.2)
GCFO
Diego De Giorg
i
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Andy Halford
(former GCF0)
–
3.2
2.0
0.7
3.7
–
(17.0)
23.9
(5.6)
30.2
–
(2.6)
24.3
208.9
(68.2)
Workforce average
FTE UK employee
2.9
10.4
3.3
3.1
3.8
(1.2)
2.2
(7.0)
(2.0)
2.9
11.5
0.8
14.3
38.2
(22.1)
Group Chairman
José Viñals
0.0
3.4
0.0
0.0
0.0
(17.5)
53.2
170.2
(61.5)
(11.7)
Shir
ish Apte
1.7
–
–
–
–
–
–
–
–
–
David Conner
1
1.6
7.5
(8.8)
(6.7)
(0.6)
0.0
0.0
0.0
5.9
(57.5)
Gay Huey Evans
1
–
(3.2) (22.5)
0.0
0.0
–
(100.0) 100.0 (100.0) 233.9
Jackie Hunt
1.5
–
–
–
–
–
–
–
–
–
Diane Jurgens
1
–
–
–
–
–
–
–
–
–
–
Robin Lawther
2.2
–
–
–
–
–
–
–
–
–
Lincoln Leong
1
–
–
–
–
–
–
–
–
–
–
Maria Ramos
3
1.5
38.8
25.9
–
–
100.0
0.0
0.0
–
–
Phil Rivett
2.0
5.7
3.9
–
–
0.0
0.0
0.0
–
–
David Tang
2.7
8.8
0.0
18.3
–
55.3
0.0
0.0
(82.3)
–
Carlson Tong
1
–
4.1
(11.0)
0.0
–
–
0.0
0.0 (100.0)
–
Linda Yueh
10.4
–
–
–
–
–
–
–
–
–
1
In 2024, Gay Huey Evans, Carlson Tong and David Conner stepped down from the Board on 29 February, 9 May and 30 December respectively. Diane Jurgens and
Lincoln Leong were appointed to the Board on 1 March and 2 November 2024 respectively.
See
pages 156 and 163
for the CEO, GCFO, Group Chairman and INEDs data the changes relates to
Not applicable as
these ind
iv
iduals are
not elig
ible for
annual incent
ive
awards.
176
Standard Chartered
– Annual Report 2024
Directors’ report
Addit
ional remunerat
ion disclosures
Scheme interests awarded, exercised and lapsed during the year
Employees, includ
ing execut
ive directors, are not permitted to engage in any personal investment strategies with regards to
their Company shares, includ
ing hedg
ing against the share price of Company shares. The main features of the outstanding
shares and awards are summarised below:
Award
1,2
Performance measures
Performance outcome (100%)
Accrues notional
div
idends?
1
Delivery
2017–19 LTIP
33% RoE
3
33% TSR
33% Strategic
Yes
•
Tranche 1: 50%
•
Tranches 2-5: 12.5%
2018–20 LTIP
Yes
•
5 equal tranches
2019–21 LTIP
33% RoTE
33% TSR
33% Strategic
No
•
5 equal tranches
2020–22 LTIP
No
•
5 equal tranches
2021–23 LTIP
30% RoTE
30% TSR
15% Sustainab
il
ity
25% Strategic
No
•
5 equal tranches
2022–24 LTIP
4
No
•
5 equal tranches
2023–25 LTIP
To be assessed at the end of 2025
No
•
5 equal tranches
2024–26 LTIP
30% RoTE
30% TSR
25% Sustainab
il
ity
15% Strategic
To be assessed at the end of 2026
No
•
5 equal tranches
1.
Awards are delivered in five equal tranches.
2.
2017 – 19 LTIP award may receive div
idend equ
ivalent shares based on div
idends declared between grant and vest. From 1 January 2017 remunerat
ion regulations
for European banks prohib
ited the award of d
iv
idend equ
ivalent shares. Therefore, the number of shares awarded in respect of the LTIP awards granted after
this date took into account the lack of div
idend equ
ivalents (calculated by reference to market consensus div
idend y
ield) such that the overall value of the award
was mainta
ined.
3. Return on equity.
4.
The performance outcome for the 2022-24 LTIP is a projected outcome. The final relative TSR outcome will be assessed in March 2025.
Scheme interests awarded during 2024
Awards were granted to Bill and Diego under the 2024 – 26 LTIP on 12 March 2024. Performance measures apply to 2024 – 26
LTIP awards.
Type of interest
awarded
Basis on which
award is made
Number of
shares
1
Award face
value (£)
2
Award outcome achievable
for min
imum performance
Performance
period end
3
Bill Winters
LTIP – condit
ional
rights
% of salary
616,378
4,068,095
25%
12 March 2027
Diego De Giorg
i
LTIP – condit
ional
rights
% of salary
404,062
2,666,809
25%
12 March 2027
1.
The number of shares awarded in respect of the LTIP took account of the lack of div
idend equ
ivalents (calculated by reference to market consensus div
idend
yield) such that the overall market value of the award is mainta
ined.
2.
The award face value is calculated by multiply
ing the number of shares awarded by the share award pr
ice of £6.60.
3.
Details of the LTIP performance measures can be found on page 179.
38%
26%
23%
37%
57%
88%
177
Standard Chartered
– Annual Report 2024
Directors’ report
Change in interests during the period 1 January to 31 December 2024 (audited)
Bill Winters
1
Date of grant
Share award
price (£)
As at
1 January
Awarded
Div
idends
awarded
2
Vested
3,4,
Lapsed
As at
31 December
Performance
period end
Vesting date
2017 – 19 LTIP
13 Mar 2017
7.450
45,049
–
6,127
51,176
–
–
13 Mar 2020
13 Mar 2024
2018 – 20 LTIP
9 Mar 2018
7.782
28,178
–
–
28,178
–
–
9 Mar 2021
9 Mar 2024
28,179
–
–
–
–
28,179
9 Mar 2025
2019 – 21 LTIP
11 Mar 2019
6.105
30,604
–
–
30,604
–
–
11 Mar 2022
11 Mar 2024
30,604
–
–
–
–
30,604
11 Mar 2025
30,605
–
–
–
–
30,605
11 Mar 2026
2020 – 22 LTIP
9 Mar 2020
5.196
59,282
–
–
59,282
–
–
9 Mar 2023
9 Mar 2024
59,282
–
–
–
–
59,282
9 Mar 2025
59,282
–
–
–
–
59,282
9 Mar 2026
59,282
–
–
–
–
59,282
9 Mar 2027
2021 – 23 LTIP
15 Mar 2021
4.901
150,621
–
–
85,853
64,768
–
15 Mar 2024
15 Mar 2024
150,621
–
–
–
64,768
85,853
15 Mar 2025
150,621
–
–
–
64,768
85,853
15 Mar 2026
150,621
–
–
–
64,768
85,853
15 Mar 2027
150,621
–
–
–
64,768
85,853
15 Mar 2028
2022 – 24 LTIP
14 Mar 2022
4.876
151,386
–
–
–
–
151,386
14 Mar 2025
14 Mar 2025
151,386
–
–
–
–
151,386
14 Mar 2026
151,386
–
–
–
–
151,386
14 Mar 2027
151,386
–
–
–
–
151,386
14 Mar 2028
151,388
–
–
–
–
151,388
14 Mar 2029
2023 – 25 LTIP
13 Mar 2023
7.398
101,209
–
–
–
–
101,209
13 Mar 2026
13 Mar 2026
101,209
–
–
–
–
101,209
13 Mar 2027
101,209
–
–
–
–
101,209
13 Mar 2028
101,209
–
–
–
–
101,209
13 Mar 2029
101,209
–
–
–
–
101,209
13 Mar 2030
2024 – 26 LTIP
12 Mar 2024
6.600
–
123,275
–
–
–
123,275
12 Mar 2027
12 Mar 2027
–
123,275
–
–
–
123,275
12 Mar 2028
–
123,275
–
–
–
123,275
12 Mar 2029
–
123,275
–
–
–
123,275
12 Mar 2030
–
123,278
–
–
–
123,278
12 Mar 2031
Diego De Giorg
i
1
Date of grant
Share award
price (£)
As at
1 January
Awarded
Div
idends
awarded
2
Vested
3,4
Lapsed
As at
31 December
Performance
period end
Vesting date
2024 – 26 LTIP
12 Mar 2024
6.600
–
80,812
–
–
–
80,812
12 Mar 2027
12 Mar 2027
–
80,812
–
–
–
80,812
12 Mar 2028
–
80,812
–
–
–
80,812
12 Mar 2029
–
80,812
–
–
–
80,812
12 Mar 2030
–
80,814
–
–
–
80,814
12 Mar 2031
1
The unvested LTIP awards held by Bill and Diego are condit
ional r
ights. They do not have to pay for these awards. Shares are delivered on vesting or as soon as
practicable thereafter.
2
Div
idend equ
ivalent shares may be awarded on vesting for awards granted prior to 1 January 2018. On 31 March 2020, Standard Chartered announced that in
response to the request from the PRA and as a consequence of the unprecedented challenges facing the world due to the COVID-19 pandemic, the Board had
decided to withdraw the recommendation to pay a final div
idend for 2019. D
iv
idend equ
ivalent shares allocated to the 2017 – 19 awards vesting in 2024 did not
include any shares relating to the cancelled div
idend.
3
Shares (before tax) were delivered to Bill from the vesting element of LTIP awards. The closing share price on the day before the shares were delivered were
as follows:
•
13 March 2024: Shares in respect of the 2017 – 19 LTIP. Previous day closing share price: £6.698
•
11 March 2024: Shares in respect of the 2018 – 20 LTIP, 2019-21 LTIP and 2020-22 LTIP. Previous day closing share price: £6.558
•
19 March 2024: Shares in respect of the 2021 – 23 LTIP. Previous day closing share price: £6.502.
4
The weighted average closing price for Bill’s awards exercised during the period was £6.567.
As at 31 December 2024, none of the directors had registered an interest or short posit
ion
in the shares, underlying shares or
debentures of the Company or any of its associated corporations that was required to be recorded pursuant to Section 352 of
the Hong Kong Securit
ies and Futures Ord
inance, or as otherwise notif
ied to the Company and the Hong Kong Stock Exchange
pursuant to the Model Code for Securit
ies Transact
ions by Directors of Listed Issuers.
See
page 359
for details of share plan dilut
ion l
im
its
178
Standard Chartered
– Annual Report 2024
Directors’ report
Addit
ional remunerat
ion disclosures
Executive directors’ shareholdings and share interests includ
ing share awards (aud
ited)
Shares that count towards the executive director shareholding requirements are benefic
ially owned shares,
includ
ing shares
subject to a retention period, and unvested share awards for which performance condit
ions have been sat
isf
ied (on a net of
tax basis). As of 31 December 2024, Bill sign
ificantly exceeded h
is shareholding requirement and Diego is continu
ing to bu
ild
up his requirement.
Andy Halford sign
ificantly exceeded h
is shareholding requirement when he retired from the Company on 31 August 2024. He is
subject to a two year post-employment shareholding requirement of 200 per cent of his salary. His shareholding requirement
will be monitored through self-certif
icat
ion, to the extent it is not met via shares held with
in the Group’s employee share plans
and nominee accounts.
Shares purchased voluntarily from his own funds are equivalent to 122 per cent of salary for Bill. No shares were purchased
voluntarily in 2024. The following chart and table summarise the executive directors’ shareholdings and share interests.
Shares held beneficially
Bill Winters
Diego De Giorg
i
0%
400%
800%
1,200%
1,400%
Unvested share awards not subject to
performance measures (net of tax)
Shareholding requirement
200%
600%
1,000%
1148%
127%
43%
Shares held
beneficially
1,2,3
Unvested
share awards
not subject to
performance
measures
(net of tax)
4
Total shares
counting
towards
shareholding
requirement
Shareholding
requirement
Salary
Value of shares
counting towards
shareholding
requirement as a
percentage of
salary
Unvested share
awards subject to
performance
measures
(before tax)
Bill Winters
2,922,955
323,640
3,246,595
250% salary
£2,517,000
1,275%
1,879,355
Diego De Giorg
i
71,011
-
71,011
200% salary
£1,650,000
43%
404,062
Post-employment
shareholding
requirement
Relevant salary
Andy Halford
6
764,715
232,172
996,887
200% salary
£1,609,000
612%
807,363
1
All figures are as of 31 December 2024 unless stated otherwise. The closing share price on 31 December 2024 was £9.886. No director had either: (i) an interest in
Standard Chartered PLC’s preference shares or loan stocks of any subsid
iary or assoc
iated undertaking of the Group; or (i
i) any corporate
interested in Standard
Chartered PLC’s ordinary shares.
2
The beneficial
interests of directors and connected persons in the ordinary shares of the Company are set out above. The executive directors do not have any
non-beneficial
interest in the Company’s shares. Neither of the executive directors used ordinary shares as collateral for any loans.
3
The salary and shares held beneficially
include shares awarded to deliver the executive directors’ salary shares.
4
In March 2024, the final assessment of the 2021-23 LTIP award resulted in a 57 per cent outcome due to achievement against RoTE and strategic measures.
This award is no longer subject to performance measures and is included here. The remain
ing 43 per cent of the award lapsed.
5
As Bill, Andy and Diego are UK taxpayers, it is assumed that no income tax or National insurance contribut
ions w
ill apply to Sharesave (as Sharesave is a UK
tax qualif
ied share plan) and 47 per cent tax w
ill apply to other unvested share awards based on current rates (marginal combined PAYE rate of income tax at
45 per cent and employee National Insurance contribut
ions at 2 per cent).
6
Under the current directors’ remuneration policy, Andy Halford is required to mainta
in h
is 200 per cent of salary shareholding requirement for two years following
his cessation of employment.
179
Standard Chartered
– Annual Report 2024
Directors’ report
Histor
ical LTIP awards
The current projected outcome for in-flight LTIP awards from the 2023 and 2024 performance years based on current
performance as at 31 December 2024 is set out in the tables below.
Current posit
ion on the 2023 – 25 LTIP award: projected part
ial performance outcome
Measure
Weight
ing
Min
imum (25%)
Maximum (100%)
2023 – 25 LTIP assessment as of
31 December 2024
RoTE
1
in 2025 with a CET1
2
underpin
of the higher of 13% or the
min
imum regulatory requ
irement
30%
10%
12.5%
RoTE between threshold
and maximum: ind
icat
ive
partial outcome
Relative TSR performance
against peer group
30%
Median
Upper quartile
TSR posit
ioned below the
median: ind
icat
ive zero outcome
Sustainab
il
ity
15%
Targets set for sustainab
il
ity
measures linked to the
business strategy
Performance tracking above
target: ind
icat
ive partial
outcome
Other strategic measures
25%
Targets set for strategic
measures linked to the
business strategy
Performance tracking above
target: ind
icat
ive partial
outcome
1
Underlying RoTE represents the ratio of the current year’s underlying operating profit attributable to ordinary shareholders to the weighted average ordinary
shareholders’ equity less the average goodwill and intang
ibles for the report
ing period. Underlying RoTE normally excludes regulatory fines and certain other
adjustments but, for remuneration purposes, such adjustments are subject to review by the Committee.
2
The CET1 underpin will be set at the higher of 13 per cent or the min
imum regulatory level as at 31 December 2025. In add
it
ion, the Comm
ittee has the discret
ion
to take into account at the end of the performance period any changes in regulatory capital and risk-weighted asset requirements that might have been
announced and implemented after the start of the performance period.
Current posit
ion on the 2024 – 26 LTIP award: projected part
ial performance outcome
Measure
Weight
ing
Min
imum (25%)
Maximum (100%)
2024 – 26 LTIP assessment as of
31 December 2024
RoTE
1
in 2026 with a CET1
2
underpin
of the higher of 13% or the
min
imum regulatory requ
irement
30%
10%
13%
RoTE above maximum:
ind
icat
ive full outcome
Relative TSR performance
against peer group
30%
Median
Upper quartile
TSR posit
ioned above upper
quartile: ind
icat
ive full outcome
Sustainab
il
ity
25%
Targets set for sustainab
il
ity
measures linked to the
business strategy
Performance tracking on target:
ind
icat
ive partial outcome
Other strategic measures
15%
Targets set for strategic
measures linked to the
business strategy
Performance tracking on target:
ind
icat
ive partial outcome
1
Underlying RoTE represents the ratio of the current year’s underlying operating profit attributable to ordinary shareholders to the weighted average ordinary
shareholders’ equity less the average goodwill and intang
ibles for the report
ing period. Underlying RoTE normally excludes regulatory fines and certain other
adjustments but, for remuneration purposes, such adjustments are subject to review by the Committee.
2
The CET1 underpin will be set at the higher of 13 per cent or the min
imum regulatory level as of 31 December 2026. In add
it
ion, the Comm
ittee has the discret
ion
to take into account at the end of the performance period any changes in regulatory capital and risk-weighted asset requirements that might have been
announced and implemented after the start of the performance period, for example in relation to Basel IV.
The Committee assesses the outcome value of LTIP awards on vesting and has the flexib
il
ity to adjust if the formulaic outcome
is not considered to be an appropriate reflection of the performance achieved and to avoid windfall gains.
180
Standard Chartered
– Annual Report 2024
Directors’ report
Addit
ional remunerat
ion disclosures
Allocation of the Group’s earnings between stakeholders
When consider
ing Group var
iable remuneration, the Committee takes account of shareholders’ concerns about relative
expenditure on pay and determines the allocation of earnings to expenditure on remuneration carefully and has approached
this allocation in a disc
ipl
ined way. The amount of corporate tax, includ
ing the bank levy,
is included in the chart because it is a
sign
ificant payment and
illustrates the Group’s contribut
ion through the tax system.
Staff costs
2024
$mill
ion
2023
0%
10%
20%
30%
40%
50%
60%
70%
100%
Corporate taxation includ
ing levy
Paid to shareholders in div
idends and buybacks
80%
90%
8,510
2,062
3,280
8,256
1,742
2,568
Approach to risk adjustment
Risk adjustment
What and how?
When?
Collective
adjustments
•
At a collective level, the Group annual scorecard
and LTIP performance criter
ia
include risk and
control measures.
•
In addit
ion, the Comm
ittee carries out a detailed
review of all risk, control and conduct matters
includ
ing ongo
ing invest
igat
ions and any matters
raised by regulators, and may use its discret
ion
to adjust remuneration to reflect matters not
adequately captured by the scorecards.
•
Material restatement of the Group’s financ
ials.
•
Sign
ificant fa
ilure in risk management.
•
Discovery of endemic problems in financ
ial
reporting.
•
Financ
ial losses, due to a mater
ial breach of
regulatory guidel
ines.
•
The exercise of regulatory or government action
to recapital
ise the Group follow
ing material
financial losses.
Indiv
idual
adjustments
•
Indiv
idual r
isk adjustments to variable
remuneration are considered based on the
material
ity of the
issue.
•
At an ind
iv
idual level, risk adjustments can be
applied through the reduction or forfeiture of the
value of current year variable remuneration or
the applicat
ion of malus or clawback to unpa
id
or paid variable remuneration as appropriate,
at the Committee’s discret
ion.
•
Deemed to have: (i) caused in full or in part a
material loss for the Group as a result of reckless,
negligent or wilful actions, or (i
i) exh
ib
ited
inappropr
iate behav
iours, or (i
i
i) applied a lack
of appropriate supervis
ion and due d
il
igence.
•
The ind
iv
idual failed to meet appropriate
standards of fitness and propriety.
Our Pillar 3 remuneration disclosures can be viewed in our 2023 Pillar 3 Report at
sc.com
Remuneration of the five-highest paid ind
iv
iduals and the remuneration of senior management
In line with the requirements of The Stock Exchange of Hong Kong Lim
ited, the follow
ing table sets out, on an aggregate
basis, the annual remuneration of: (i) the five highest-paid employees; and (i
i) sen
ior management for the year ended
31 December 2024.
Components of remuneration
Five highest paid
1
$000
Senior management
2
$000
Salary, cash allowances and benefits in kind
15,630
35,053
Pension contribut
ions
630
1,396
Variable remuneration awards paid or receivable
39,115
60,720
Payments made on appointment
–
99
Remuneration for loss of office (contractual or other)
–
2,982
Other
–
–
Total
55,375
100,250
Total HKD equivalent
432,256
782,551
1
The five highest paid ind
iv
iduals include Bill Winters.
2
Senior management comprises the executive directors and the members of the Group Management Team at any point during 2024.
181
Standard Chartered
– Annual Report 2024
Directors’ report
Share award movements for the five highest-paid ind
iv
iduals for the year to 31 December 2024
1
LTIP
2
Deferred shares
2
Sharesave
Weighted
average
Sharesave
exercise price
(£)
Outstanding at 1 January 2024
2,923,473
2,617,126
2,126
4.23
Granted
3,4,5
1,130,565
962,399
1,536
–
Lapsed
(409,611)
–
–
–
Vested/Exercised
(300,014)
(716,613)
–
–
Outstanding at 31 December 2024
3,344,413
2,862,912
3,662
5.01
Exercisable as at 31 December 2024
–
–
–
–
Range of exercise prices (£)
–
–
–
4.23 – 6.10
1
The five highest paid ind
iv
iduals include Bill Winters.
2
Granted under the 2021 Plan and 2011 Plan. Employees do not contribute to the cost of these awards.
3
1,129,021 (LTIP) granted on 12 March 2024, 1,544 (LTIP) granted as a notional div
idend on 1 March 2024. 961,552 (Deferred shares) granted on 11 March 2024,
624 (Deferred shares) granted as a notional div
idend on 1 March 2024, 223 (Deferred shares) granted as a not
ional div
idend on 8 August 2024. 1,536 (Sharesave)
granted on 23 September 2024.
4
Deferred shares were granted at a share price of £6.558; LTIP shares were granted at a share price of £6.600, the closing price on the last trading day preceding
the grant date. The vesting period for these awards ranges from 1 to 7 years.
5
For Sharesave granted in 2024 the exercise price is £6.10 per share, a 20% discount on the closing share price on 16 August 2024 of £7.624. The average of the
closing prices over the five days prior to the inv
itat
ion date of 19 August 2024 was £7.421.
See
page 177
for details of awards and options for Bill Winters
See
page 360
for a view of share awards and options for all employees
See
page 356
for details on the accounting standard adopted for share awards is IFRS2
The table below shows the emoluments of: (i) the five highest-paid employees; and (i
i) sen
ior management for the year ended
31 December 2024.
Remuneration band
HKD
Remuneration band
USD equivalent
Number of employees
Five highest
paid
Senior
management
1
9,500,001 – 10,000,000
1,217,013 – 1,281,066
–
1
22,000,001 – 22,500,000
2,818,345 – 2,882,398
–
2
25,500,001 – 26,000,000
3,266,718 – 3,330,771
–
2
27,000,001 – 27,500,000
3,458,878 – 3,522,931
–
1
28,000,001 – 28,500,000
3,586,985 – 3,651,038
–
1
33,500,001 – 34,000,000
4,291,571 –4,355,624
–
1
37,000,001 – 37,500,000
4,739,944 – 4,803,997
–
1
40,000,001 – 40,500,000
5,124,264 – 5,188,317
–
1
42,500,001 – 43,000,000
5,444,530 – 5,508,583
–
1
43,000,001 – 43,500,000
5,508,584 – 5,572,636
–
1
54,500,001 – 55,000,000
6,981,809 –7,045,862
–
1
62,000,001 – 62,500,000
7,942,608 – 8,006,662
1
1
63,000,001 – 63,500,000
8,070,715 – 8,134,768
1
–
68,000,001 – 68,500,000
8,711,248 – 8,775,301
1
1
118,500,001 – 119,000,000
15,180,630 – 15,244,684
1
1
119,500,001 – 120,000,000
15,308,737 – 15,372,790
1
1
Total
5
17
1
Senior management comprises the executive directors and the members of the Group Management Team at any point during 2024.
Shir
ish Apte
Chair of the Remuneration Committee
21 February 2025
182
Standard Chartered
– Annual Report 2024
Directors’ report
Other disclosures
Other statutory and regulatory disclosures
This section sets out addit
ional
informat
ion requ
ired to be included in the Directors’ report. Where set out elsewhere in the
report, the informat
ion
in the tables below is incorporated by reference. The Group operates in the UK and overseas through
a number of subsid
iar
ies, branches and offices. Information about the princ
ipal act
iv
it
ies of the Group is set out in the
Strategic report.
Disclosures required pursuant to Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008
Engagement with customers, suppliers and others
See pages 35 to 38 of the Strategic report
Engagement with employees
See pages 38 to 41 of the Strategic report in addit
ion to page 188 of th
is
Directors’ report
Post balance sheet events
See Note 37 to the Financ
ial statements
Directors’ interests
See page 163 of the Directors’ remuneration report. As at 14 February 2024,
there had been no changes to those interests in relation to directors remain
ing
in office at that date
Future developments in the Group’s business
See the Strategic report
Debt and Equity capital
Notes 22 and 28 to the Financ
ial statements
in addit
ion to pages 184 to 185 of
this Directors’ report
Loan capital
Notes 22 and 27 to the Financ
ial statements
Share buyback
Note 28 to the Financ
ial statements
in addit
ion to page 185 of th
is Directors’
report
Financ
ial
instruments
See Risk review and Capital review on pages 193 and 270
The Group’s 2024 financial statements have been prepared
in accordance with the princ
iples of the UK F
inance Disclosure Code
for Financ
ial Report
ing Disclosure.
Disclosures required under UK List
ing Rule 6.6.1
UKLR 6.6.1 (11-12) (Waiver of div
idends)
See Note 28 to the Financ
ial Statements
UKLR 6.6.1 (1) (2) (3-10) (13)
N/A
Applicat
ion of the pr
inc
iples of the UK Corporate Governance Code
Board leadership and company purpose
Section
Page
A – Promoting long-term sustainable success and value
Strategic report
2 - 46
Board of Director
105 - 109
B – Purpose, value, strategy and alignment with culture
Who we are and what we do
2 - 3
Our strategy
18
Integrity, conduct and ethics
95 - 97
Group Code of Conduct
190
C – Performance measures, controls and risk management
Key performance ind
icators
12 - 13
Enterprise Risk Management Framework
196 - 200
D – Shareholder and other stakeholder engagement
Section 172 statement
35 - 41
E – Workforce polic
ies and pract
ices
Employment engagement and Employee polic
ies
188
Div
is
ion of Responsib
il
it
ies
F – Chair role and responsib
il
it
ies
Our corporate governance
113
G – Board roles and responsib
il
it
ies
Our corporate governance
113
H – Non-executive directors’ role and capacity
Our corporate governance
113
Board activ
it
ies and attendance
114
External appointments and independence
120
I – Board effectiveness and effic
iency
Director train
ing and development
117 - 118
Board effectiveness
119 - 120
Composit
ion, success
ion and evaluation
J – Board appointments and succession plans
Governance and Nominat
ion Comm
ittee report
137
K – Board skills, experience, knowledge and tenure
Board of Directors
105 - 109
L – Board evaluation of composit
ion, d
ivers
ity and effect
iveness
Board effectiveness
119 - 120
Indiv
idual performance
118
183
Standard Chartered
– Annual Report 2024
Directors’ report
Applicat
ion of the pr
inc
iples of the UK Corporate Governance Code
continued
Section
Page
Audit, risk and internal control
M – Independence and effectiveness of internal and external
audit functions, integr
ity of financial and narrat
ive statements
Audit Committee report
123 - 128
Non-audit services
190 - 191
N – Fair, balanced and understandable assessment of the
Company’s posit
ion and prospects
Audit Committee report
123 - 128
Fair, Balanced and Understandable
125
O – Risk management and internal controls
Risk review
194 - 269
Remuneration
P – Remuneration polic
ies and pract
ices
Remuneration Committee report
143 - 174
Q – Procedure for developing remuneration policy
Remuneration Committee Terms of Reference
R – Independent judgement and discret
ion when author
is
ing
remuneration outcomes
Remuneration Committee Terms of Reference
ESG Disclosures
Hong Kong List
ing Rules
Appendix C2
We comply with the requirements of the ESG Reporting Guide contained in Appendix C2 to
The Rules Governing the List
ing of Secur
it
ies on the Stock Exchange of Hong Kong L
im
ited.
With respect to the KPIs noted in Part C: ‘Comply or explain’ provis
ions, the Group does not
report on KPI A1.3 and KPI A1.6 related to the production and handling of hazardous waste; KPI
A2.5 related to packaging materials used for fin
ished products; KPI B6.1 total products recalled
due to safety and health reasons; and KPI B6.4 product recall procedures. As an office-based
financial serv
ices provider these issues were not deemed material. For further informat
ion
related to Aspect B4 Labour Standards and B5 Supply Chain Management, please also refer
to the Group’s annual Modern Slavery Statement.
Task Force on Climate-related
Financ
ial D
isclosures (TCFD)
In line with our ‘comply or explain’ obligat
ion under the UK’s FCA’s L
ist
ing Rule 6.6.6R (8), we can
confirm that we have made disclosures consistent with the TCFD recommendations as per
Section C – Guidance for All Sectors and Section D – Supplemental Guidance for the Financ
ial
Sector: Banks of the 2021 TCFD Implementing Guidance in this Annual Report. Please refer to
our TCFD reporting index on pages 43 to 44.
Aspect B4 Labour Standards and B5
Supply Chain Management
Refer also to the Group’s annual Modern Slavery Statement (see below).
Non-financial and susta
inab
il
ity
informat
ion statement
See page 42 of the Strategic report.
Modern slavery
The Group publishes a Modern Slavery Statement under the UK Modern Slavery Act 2015 and
the Australian Modern Slavery Act 2018 for the financ
ial year end
ing 31 December 2024.
See more via
sc.com/modernslavery
Sustainable finance taxonomies
Standard Chartered continues to assess the applicab
il
ity
of sustainable finance taxonomies across the Group’s
footprint. Reporting has commenced in several markets
in accordance with local sustainable finance taxonomy
regulatory requirements.
The Group will continue to consider applicable taxonomy
alignment in our business decis
ions,
includ
ing at a cl
ient
and transaction level, as well as more broadly at a sector
strategy level. Given our footprint across Europe and the UK,
Asia, Africa and the Middle East, we need to continually
assess taxonomy alignment requirements based on
informat
ion ava
ilable from clients and through our due
dil
igence processes.
Streamlined energy and carbon reporting
Environmental impact of our operations
We aim to min
im
ise the environmental impact of our
operations as part of our commitment to be a responsible
company. We report on the actions we take to reduce energy
and water usage and non-hazardous waste generated in our
operations in the Sustainab
il
ity review on page 77 and in the
ESG Data Pack at
sc.com/sustainab
il
ityl
ibrary
.
Our reporting methodology is based on ‘The Greenhouse
Gas (GHG) Protocol – A Corporate Accounting and Reporting
Standard (Revised Edit
ion)’. We have adopted the operat
ional
control approach to define our reporting boundary for GHG
Scope 1 and 2 emiss
ions. For Scope 3 financed and fac
il
itated
emiss
ions, boundar
ies are noted for each high-emitt
ing sector
in the ‘Our approach to measuring financed emiss
ions’ table
in the Sustainab
il
ity review on page 81.
Information on the princ
iples and methodolog
ies used to calculate
the GHG emiss
ions of the Group can be found
in our Environmental
Reporting Criter
ia document at
sc.com/environmentcriter
ia
184
Standard Chartered
– Annual Report 2024
Directors’ report
Other disclosures
Reporting period, boundary and scope
We report on sustainab
il
ity and environmental, social and
governance (ESG) matters throughout this Annual Report,
in particular in the following sections: (i) Strategic report,
Sustainab
il
ity overview on pages 42 to 44; (i
i) Susta
inab
il
ity
review on pages 58 to 94; (i
i
i) Risk review on pages 194 to 269;
and (iv) in the Supplementary sustainab
il
ity informat
ion
section on pages 393 to 395.
The reporting period for Scope 1 and Scope 2 emiss
ions and
energy consumption is from 1 October 2023 to 30 September
2024. This allows suffic
ient t
ime for independent third-party
assurance to be completed prior to the publicat
ion of the
Group’s Annual Report. Accordingly, the operating income
used in the GHG emiss
ions and energy consumpt
ion data
table below for associated environmental intens
ity metr
ics
corresponds to the same time period, rather than the
calendar year used in financ
ial report
ing. The reporting
periods for other sustainab
il
ity informat
ion
in this Annual
Report may differ and are set out on page 61.
As we aim to improve our emiss
ions measurement and
reporting year-on-year, we have included leased vehicle fleet
emiss
ions
in our Scope 1 figures in 2024. Apart from that, there
was no sign
ificant change
in the boundary and scope of our
Scope 1 and Scope 2 emiss
ions reported
in this Annual Report
from that of Standard Chartered PLC Annual Report 2023,
published on 23 February 2024.
Assurance
Our Scope 1 and 2 emiss
ions are assured (l
im
ited level) by an
independent company, Global Documentation, against the
requirements of ISO 14064.
GHG emiss
ions and energy consumpt
ion data
The Group has disclosed Scope 1 and Scope 2 GHG emiss
ions and energy consumpt
ion data as required by the Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
Units
2024
2023
2022
Reporting coverage of data
Annual operating income from 1 October to 30 September
$ mill
ion
19,110
17,414
15,863
Net internal area of occupied property
m
2
850,817
880,515
946,234
GHG emiss
ions
Scope 1 & 2:
Scope 1 emiss
ions ¹
tCO
2
e
7,696
8,488
2,071
Scope 2 emiss
ions (locat
ion-based)²
tCO
2
e
82,837
85,741
89,410
Scope 2 emiss
ions (market-based)
3
tCO
2
e
17,272
26,246
47,363
Scope 1 & 2 emiss
ions (market-based)
3
tCO
2
e
24,968
34,734
49,434
Scope 1 & 2 emiss
ions (UK and offshore area only)
tCO
2
e
–
248
–
GHG emiss
ions – Intens
ity:
Total Scope 1 &2 emiss
ions (market-based)
intens
ity
tCO
2
e/$ mill
ion
1
2
3
Environmental resource effic
iency
Energy
Indirect non-renewable energy consumption
GWh
125
142
142
Indirect renewable energy consumption
GWh
14
16
24
Direct non-renewable energy consumption
GWh
12
13
10
Direct renewable energy consumption
GWh
2
2
1
Energy consumption
GWh
154
173
177
Energy consumption (UK and offshore area only)
GWh
7
6
6
1
As we aim to improve our emiss
ions measurement and report
ing year-on-year, we have included leased vehicle fleet emiss
ions
in our Scope 1 figures in 2024
(1,340 tCO
2
e) and fugit
ive em
iss
ions s
ince 2023. (3,877 tCO
2
e in 2024 and 5,266 tCO
2
e in 2023). 2022 data was not available for fugit
ive em
iss
ions
2
Location-based emiss
ions have been restated for pr
ior comparative periods. Emiss
ions erroneously
included renewable energy certif
icates and power purchase
agreements. Other Scope 2 reductions outside clean power are attributed to footprint reduction and effic
iency ga
ins
3
Market-based emiss
ions have decreased from 2022 to 2023 due to footpr
int reduction, effic
iency ga
ins and the purchase of addit
ional energy attr
ibut
ion
certif
icates by the Group
Further detail on our environment performance and the independent assurance report can be found in our ESG data pack at
sc.com/sustainab
il
ityl
ibrary
;
associated assumptions and methodologies in our reporting criter
ia document at
sc.com/environmentcriter
ia
Share capital, constitut
ion and shareholder r
ights
Share capital in issue
The issued ordinary share capital of the Company was
reduced by a total of 239,528,930 over the course of 2024
This was due to the cancellation of ordinary shares as part of
the Company’s two share buyback programmes. No ordinary
shares were issued during the year. The Company has one
class of ordinary shares, which carries no rights to fixed
income. On a show of hands, each member present has
the right to one vote at our general meetings. On a poll,
each member is entitled to one vote for every share held.
The issued nominal value of the ordinary shares represents
83.2 per cent of the total issued nominal value of all share
capital.
The remain
ing 16.8 per cent compr
ises preference shares,
which have preferential rights to income and capital but
which, in general, do not confer a right to attend and vote at
our general meetings.
There are no specif
ic restr
ict
ions on the s
ize of a holding nor
on the transfer of shares, which are both governed by the
Articles of Associat
ion and preva
il
ing leg
islat
ion. There are
no specif
ic restr
ict
ions on vot
ing rights and the directors
are not aware of any agreements between holders of the
Company’s shares that may result in restrict
ions on the
transfer of securit
ies or on vot
ing rights. No person has any
special rights of control over the Company’s share capital
and all issued shares are fully paid.
185
Standard Chartered
– Annual Report 2024
Directors’ report
Buyback
At the AGM held on 10 May 2024, our shareholders renewed
the Company’s authority to make market purchases of up
to 261,582,895 ordinary shares, equivalent to approximately
10 per cent of issued ordinary shares as at 26 March 2024,
and up to all of the issued preference share capital.
The authority to make market purchases up to 10 per cent
of issued ordinary share capital (and, prior to the 2024 AGM,
a sim
ilar author
ity granted in the previous year at the 2023
AGM) was used during the year through two buyback
programmes announced in February and in July 2024.
These were util
ised as part of the Group’s approach to
div
idend growth and cap
ital returns. The first share buyback
programme commenced on 27 February 2024 and ended
on 25 June 2024. The second share buyback programme
commenced on 1 August 2024 and ended on 30 January 2025.
A total of 250,829,058 ordinary shares with a nominal value of
$0.50 each were re-purchased under the two programmes for
an approximate aggregate considerat
ion pa
id of $2.5 bill
ion.
A monthly breakdown of the shares purchased during the
period includ
ing the lowest and h
ighest price paid per share
is set out in Note 28 to the financ
ial statements. All ord
inary
shares which were bought back were cancelled.
Articles of Associat
ion
The Articles of Associat
ion may be amended by spec
ial
resolution of the shareholders.
Directors’ powers
Subject to company law, the Articles of Associat
ion and
the authority granted to directors in general meeting, the
directors may exercise all the powers of the Company and
may delegate authorit
ies to comm
ittees.
The Company is granted authority to issue shares by the
shareholders at its AGM. The size of the authorit
ies granted
depends on the purposes for which shares are to be issued
and is with
in appl
icable legal and regulatory requirements.
Shareholder rights
Under the Companies Act 2006, shareholders holding
5 per cent or more of the paid-up share capital of the
Company carrying the right of voting at general meetings
of the Company are able to require the directors to hold
a general meeting. Where such a request has been duly
lodged with the Company, the directors are obliged to call a
general meeting with
in 21 days of becom
ing subject to the
request and must set a date for the meeting not more than
28 days from the date of the issue of the notice convening
the meeting.
Under the Companies Act 2006, shareholders holding
5 per cent or more of the total voting rights at an AGM of the
Company, or 100 shareholders entitled to vote at the AGM
with an average of at least £100 paid-up share capital per
shareholder, are entitled to require the Company to circulate a
resolution intended to be moved at the Company’s next AGM.
Such a request must be made not later than six weeks before
the AGM to which the request relates or, if later, the time
notice is given of the AGM.
Sufficiency of publ
ic float
As at the date of this report, the Company has mainta
ined
the prescribed public float under the rules governing the
list
ing of secur
it
ies on The Stock Exchange of Hong Kong
Lim
ited (the Hong Kong L
ist
ing Rules), based on the
informat
ion publ
icly available to the Company and with
in
the knowledge of the directors.
Debenture issues and equity-linked agreements
During the financ
ial year ended 31 December 2024, other
than as disclosed in the Annual Report and Notes 22, 27
and 28 to the financial statements, the Company made no
issuance of debentures (includ
ing debenture stock, bonds
and any other debt securit
ies). Deta
ils of the equity-linked
agreements the Group entered into can be found in Note 28
to the financial statements.
Electronic communicat
ions
Our shareholders are encouraged to receive our corporate
documents electronically. The annual and inter
im financial
statements, Notice of AGM and any div
idend c
irculars are
all available electronically. If you do not already receive your
corporate documents electronically and would like to do so
in future, please contact our registrars at the address on
page 396. Shareholders are also able to submit proxy votes
or voting instruct
ions onl
ine by vis
it
ing our registrar’s website
at
www.investorcentre.co.uk/eproxy
.
Annual General Meeting
Our 2025 AGM will be held at 11:00am (UK time) (6:00pm
Hong Kong time) on 8 May 2025. Further details regarding
the format, location and business to be transacted will be
disclosed with
in the 2025 Not
ice of AGM. Our 2024 AGM
was held on 10 May 2024 at 11:00am (UK time) (6:00pm
Hong Kong time). Special business at the meeting included
the approval of the power to allot ECAT1 Securit
ies for cash
without certain formalit
ies, and an amendment to our
articles to simpl
ify the votes of ord
inary shareholders so
that each ordinary share confers one vote (previously
ordinary shareholders were entitled to one vote for every
four shares held).
Div
idends
2024: paid inter
im d
iv
idend of 9.00 cents per ord
inary share
(2023: paid inter
im d
iv
idend of 6.00 cents per ord
inary share)
2024: proposed final div
idend of 28 cents per ord
inary share
(2023: paid final div
idend of 21.00 cents per ord
inary share)
2024: total div
idend of 37 cents per ord
inary share
(2023: total div
idend, 27 cents per ord
inary share)
Directors’ independence, interests and conflicts
The Company has received from each of the INEDs an annual
confirmation of
independence pursuant to Rule 3.13 of the
Hong Kong List
ing Rules and st
ill considers all of the non-
executive directors to be independent.
Details of the directors’ benefic
ial and non-beneficial
interests
in the ordinary shares of the Company as at 31 December
2024 are shown in the directors’ remuneration report on
page 163. As at 14 February, the latest practicable date before
publicat
ion of th
is Annual Report, there had been no changes
to those interests in relation to directors remain
ing
in office at
that date.
186
Standard Chartered
– Annual Report 2024
Directors’ report
Other disclosures
At no time during the year did any director hold a material
interest in any contracts of sign
ificance (as defined
in the
Hong Kong List
ing Rules) w
ith the Company or any of its
subsid
iary undertak
ings. In accordance with the Companies
Act 2006, we have established a process requir
ing d
irectors
to disclose proposed outside business interests before any
are entered into. This enables prior assessment of any conflict
or potential conflict of interest and any impact on time
commitment. On behalf of the Board, the Governance and
Nominat
ion Comm
ittee reviews potential and exist
ing
conflicts of interest annually to consider if they continue to be
conflicts of interest, and also to revis
it the terms upon wh
ich
they were authorised. The Board is satisf
ied that our processes
in this respect continue to operate effectively.
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 section 234 of the Companies Act 2006 were accordingly
in force during the course of the financ
ial year ended
31 December 2024 and remain in force at the date of this
report. Qualify
ing pens
ion scheme indemn
ity prov
is
ions
(as defined by section 235 of the Companies Act 2006)
were in force during the course of the financ
ial year ended
31 December 2024 for the benefit of the UK’s pension fund
corporate trustee (Standard Chartered Trustees (UK) Lim
ited),
and remain in force at the date of this report.
Sign
ificant and related/connected party
contracts and arrangements
The Company is not party to any sign
ificant agreements that
would take effect, alter or terminate following a change of
control of the Company. The Company does not have
agreements with any director or employee that would provide
compensation for loss of office or employment resulting from
a takeover, except that provis
ions of the Company’s share
schemes and plans may cause awards granted to employees
under such schemes and plans to vest on a takeover, subject
to any regulatory or tax considerat
ions that may prevent th
is.
Details of transactions with directors and officers and other
related parties (with
in the mean
ing of IAS 24) are set out in
Note 36 to the financial statements.
Transactions with Temasek
By virtue of its shareholding of over 10 per cent in the
Company, Temasek and its associates are connected persons
of the Company for the purpose of the Rules Governing the
List
ing of Secur
it
ies on The Stock Exchange of Hong Kong
Lim
ited (HKEx) (the HK L
ist
ing Rules).
The HK List
ing Rules are
intended to ensure that there is no
favourable treatment to Temasek or its associates to the
detriment of other shareholders in the Company. Unless
transactions between the Group and Temasek or its
associates are specif
ically exempt under the HK L
ist
ing
Rules or are subject to a specif
ic wa
iver, they may require a
combinat
ion of announcements, report
ing and independent
shareholders’ approval.
On 19 November 2024, the HKEx extended a waiver (the
Waiver) it previously granted to the Company for the revenue
banking transactions with Temasek which do not fall under
the passive investor exemption (the Passive Investor
Exemption) under Rules 14A.99 and 14A.100 of the HK List
ing
Rules. Under the Waiver, the HKEx agreed to waive the
announcement requirement, the requirements to enter into
written agreements and to set annual caps, and the annual
report disclosure (includ
ing annual rev
iew) requirements
under Chapter 14A of the HK List
ing Rules for the three-year
period ending 31 December 2027 on the condit
ions that:
a) The Company will disclose details of the Waiver (includ
ing
nature of the revenue banking transactions with Temasek
and reasons for the Waiver) in subsequent annual reports;
and
b) The Company will continue to monitor the revenue banking
transactions with Temasek during the three years ending
31 December 2027 to ensure that the 5 per cent threshold
for the revenue ratio will not be exceeded.
The main reasons for seeking the Waiver were:
•
The nature and terms of revenue banking transactions
may vary and evolve over time and the transactions may
be subject to the change in financ
ial and cap
ital markets
outlook. As a result of that, having fixed-term written
agreements would not be suitable to accommodate the
various banking needs of the Company’s customers
(includ
ing Temasek).
•
It would be impract
icable to est
imate and determine an
annual cap on the revenue banking transactions with
Temasek as the volume and aggregate value of each
transaction are uncertain and unknown to the Company
as a banking group due to multiple factors includ
ing
market-driven factors.
•
The revenues generated from revenue banking transactions
were ins
ign
if
icant. W
ithout a waiver from the HKEx or an
applicable exemption, these transactions would be subject
to various percentage ratio tests which cater for different
types of connected transactions and as such may produce
anomalous results.
For the year ended 31 December 2024, the Group provided
Temasek with money market revenue transactions that were
revenue transactions in nature.
As a result of the Passive Investor Exemption and the Waiver,
the vast majority of the Company’s transact
ions with Temasek
and its associates fall outside of the connected transactions
regime. However, non-revenue transactions with Temasek or
any of its associates continue to be subject to monitor
ing for
connected transaction issues.
The Company confirms that:
•
the revenue banking transactions entered into with
Temasek and its associates in 2024 were below the
5 per cent threshold for the revenue ratio test under the
HK List
ing Rules, and
•
it will continue to monitor revenue banking transactions
with Temasek during the three years ending 31 December
2027 to ensure that the 5 per cent threshold for the revenue
ratio will not be exceeded.
The Company therefore satisf
ied the cond
it
ions of the Wa
iver.
187
Standard Chartered
– Annual Report 2024
Directors’ report
Major shareholders
As at 31 December 2024, Temasek Holdings (Private) Lim
ited
(Temasek) is the only shareholder that has an interest of
more than 10 per cent in the Company’s issued ordinary
share capital carrying a right to vote at any general meeting.
Information provided to the Company pursuant to the
FCA’s Disclosure Guidance and Transparency Rules (DTRs) is
published on a Regulatory Information Service and on the
Company’s website. As at 14 February, the latest practicable
date before publicat
ion of th
is Annual Report, the Company
has been notif
ied of the follow
ing informat
ion,
in accordance
with DTR 5, from holders of notif
iable
interests in the
Company’s issued share capital. The informat
ion prov
ided
in the table below was correct at the date of notif
icat
ion;
however, the date received may not have been with
in 2024.
It should be noted that these holdings are likely to have
changed since the Company was notif
ied. However,
notif
icat
ion of any change is not required until the next
notif
iable threshold
is crossed.
Notif
iable
interests
Interest in ordinary shares
(based on voting rights disclosed)
Percentage of
capital disclosed
Nature of holding as per disclosure
Temasek Holdings (Private) Lim
ited
447,461,831
17.00
Indirect
BlackRock Inc.
183,640,172
5.55
Indirect (5.01%)
Securit
ies Lend
ing (0.39%)
Contracts for Difference (0.14%)
Risk management and internal controls
1
Risk management
The Board is responsible for mainta
in
ing and review
ing the
effectiveness of the risk management system. An ongoing
process for ident
ify
ing, evaluating and managing the
sign
ificant r
isks that we face is in place. The Board is satisf
ied
that this process constitutes a robust assessment of all the
princ
ipal r
isks, topical and emerging risks and integrated risks
facing the Group, includ
ing those that would threaten
its
business model, future performance, solvency or liqu
id
ity.
Key areas of risk on financ
ial
instruments for the directors
included the impa
irment of loans and advances and
valuation of financ
ial
instruments held at fair value. This risk
assessment and management is explained further in the
Audit Committee Key areas and Action taken on page 124.
The Risk review and Capital review on pages 194 and 269
sets out the princ
ipal r
isks, topical and emerging risks,
our approach to risk management, includ
ing our r
isk
management princ
iples, an overv
iew of our ERMF and
the risk management and governance practices for each
princ
ipal r
isk type. The Board-approved Risk Appetite
Statement can be found on pages 28 and 198.
In accordance with Article 435(1)(e) of the Disclosure (CRR)
Part of the PRA Rulebook, the Board Risk Committee, on
behalf of the Board, has considered the adequacy of the risk
management arrangements of the Group and has sought
and received assurance that the risk management systems
in place are adequate with regard to the Group’s profile
and strategy.
Internal controls
The Board is responsible for mainta
in
ing and review
ing the
effectiveness of the internal control system. Its effectiveness
is reviewed regularly by the Board, its committees, the
Management Team and GIA.
For the year ended 31 December 2024, the Board Risk
Committee has reviewed the effectiveness of the Group’s
system of internal control and discussed a report on the 2024
annual risk and control self-assessment. GIA represents the
third line of defence and provides independent assurance
of the effectiveness of management’s control of business
activ
it
ies (the first line) and of the control processes
mainta
ined by the R
isk Framework Owners and Policy Owners
(the second line). The audit programme includes obtain
ing
an understanding of the processes and systems under audit
review, evaluating the design of controls, and testing the
operating effectiveness and outcomes of key controls.
The work of GIA is focused on the areas of greatest risk as
determined by a risk-based assessment methodology.
The Board considers the internal control systems of the
Company to be effective and adequate.
GIA reports regularly to the Audit Committee, the Group
Chairman and the Group Chief Executive; and the Group
Head, Internal Audit reports directly to the Chair of the Audit
Committee and admin
istrat
ively to the Group Chief Executive.
The findings of all adverse aud
its are reported to the Audit
Committee, the Group Chairman and the Group Chief
Executive where immed
iate correct
ive action is required.
The Board Risk Committee is responsible for exercis
ing
oversight, on behalf of the Board, of the key risks of the Group.
It reviews the Group’s Risk Appetite Statement and EMRF and
makes recommendations to the Board. The Audit Committee
is responsible for oversight and advice to the Board on
matters relating to financ
ial, non-financial and narrat
ive
reporting. The Committee’s role is to review, on behalf of
the Board, the Group’s internal controls includ
ing
internal
financial controls. The Aud
it Committee receives and
discusses a paper on the internal controls for financ
ial books
and records.
The risk management approach starting on page 196
describes the Group’s risk management oversight
committee structure.
Our business is conducted with
in a developed control
framework, underpinned by polic
ies and standards. These
are designed to ensure the ident
ification and management
of risk, includ
ing Cred
it Risk, Traded Risk, Treasury Risk,
Operational and Technology Risk, ICS Risk, Compliance Risk,
Financ
ial Cr
ime Risk, ESG and reputational risk, as well as
Model Risk. This framework incorporates the Group’s internal
controls on financial report
ing. The Board has established
a management structure that clearly defines roles,
responsib
il
it
ies and report
ing lines.
Delegated authorit
ies are documented and commun
icated.
Executive risk committees regularly review the Group’s risk
profile. The performance of the Group’s businesses is reported
regularly to senior management and the Board. Performance
trends and forecasts, as well as actual performance against
budgets and prior periods, are monitored closely. Group
financial
informat
ion
is prepared on the basis set out in
Note 1 to the financial statements w
ith
in the Statement of
compliance and financ
ial report
ing is subject to the Group’s
control framework for reconcil
iat
ion processes.
1
The Group’s Risk Management Framework and System of Internal Control applies only to wholly controlled subsid
iar
ies of the Group, and not to Associates, Joint
Ventures or Structured Entit
ies of the Group
188
Standard Chartered
– Annual Report 2024
Directors’ report
Other disclosures
Operational procedures and controls have been established
to facil
itate complete, accurate and t
imely processing of
transactions and the safeguarding of assets. These controls
include appropriate segregation of duties, the regular
reconcil
iat
ion of accounts and the valuation of assets and
posit
ions. In respect of handl
ing ins
ide
informat
ion, we have
applied controls to help ensure only those explic
itly requ
ired
receive ins
ide
informat
ion as well as controls regard
ing the
onward dissem
inat
ion of ins
ide
informat
ion. Controls are also
in place to approve and review dealings in the Company’s
shares. Such systems and controls are designed to manage
rather than elim
inate the r
isk of failure to achieve business
objectives and can only prov
ide reasonable and not absolute
assurance against material misstatement or loss.
Safeguarding intellectual property rights
The Group has processes in place to manage the Group’s
trade mark rights and it respects third-party intellectual
property rights.
Employee 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 the Group’s 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
communicat
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 senior leaders and people leaders with specif
ic calls and
communicat
ions packs to help them prov
ide context and
guidance to their team members to better understand their
role in executing and deliver
ing the Group’s 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 this. The Group’s senior leadership also regularly
shares global, business, function, and market updates on
performance, strategy, structural changes, HR programmes,
community involvement and other campaigns. The Board
also engages with and listens to the views of the workforce
through several sources, includ
ing through
interact
ive
engagement sessions. More informat
ion can be found
on page 121 in the Directors’ report.
Employees past, present and future can follow our progress
through the Group’s LinkedIn network and Facebook page,
as well as other social network channels includ
ing Instagram
and X, which collectively have nearly 2.9 mill
ion followers.
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
their effectiveness.
Employment polic
ies
We work hard to ensure our employees’ wellbeing so that
they can thrive at work and in their personal lives. Our 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
30 days’ leave (through annual leave and public holidays),
and new parents are provided a min
imum of 20 calendar
weeks’ fully paid 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
Organizat
ion’s (ILO) m
in
imum standards.
We seek to mainta
in a mean
ingful relationsh
ip based
on mutual trust and respect with 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, 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). 13 per cent of employees,
across 20 markets, have collective representation through
unions or employee representative bodies. 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 with through our 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, working 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 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 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.
189
Standard Chartered
– Annual Report 2024
Directors’ report
There is a dist
inct 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 Group.
The Group is 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
Princ
iples, wh
ich underpin our Group Disc
ipl
inary Standard.
Dism
issals due to m
isconduct issues and/or performance
(where required by law to follow a disc
ipl
inary process) are
governed by the Group Disc
ipl
inary Standard. Where local
law or regulation requires a different process with regards to
dism
issals and other d
isc
ipl
inary outcomes, we have clearly
documented country variances in place.
Our 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 partic
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.
This helps to support productive working condit
ions,
decreased staff attrit
ion, pos
it
ive employee morale and
engagement, mainta
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,
expression 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,
succession 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 promotion decis
ions are based on the sk
ills,
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
applicat
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 possible and support their career development and
continued employment.
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. The Group
complies with both external regulatory requirements and
internal policy and standards for HSW in all markets. It is
Group 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 twice a year 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 Execut
ive (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 for sub-contractors, v
is
itors
and clients.
In 2024, we saw a reduction in serious work injuries with nil
work-related fatalit
ies nor
ill health to report. Major in
juries
(per the UK HSE definit
ion) decreased from 21 in 2023 to 14
in 2024, with fractures the most common type of major in
jury
(57 per cent). Overall, there was an increase of 6 per cent in
reported injuries in 2024. ‘Slips/trips/falls’ and ‘transport/
commuting’ accidents remain the most common causes
of injury. Our injury rates remain aligned to, or better than
industry benchmarks. Hazards and near miss-reports
decreased 1 per cent between 2023 and 2024.
HSW performance and risks are reported annually to the
Group Risk Committee and Board Risk Committee. We use an
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 Group HSW 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 with guidel
ines for select
ing, onboarding, and
managing contractors, and continuous monitor
ing and
evaluation 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 such as preventing burnout and
supporting resil
ience. We also relaunched the Safety and
Security Learning Pathway in the Bank’s learning platform,
remind
ing how each employee can help ma
inta
in a safe
working 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 Group’s employees.
More details on how we support our colleagues’ wellbeing are on
pages 39 and 188
of this report.
190
Standard Chartered
– Annual Report 2024
Directors’ report
Other disclosures
Psychosocial risk is an area that an increas
ing number of
H&S regulators are legislat
ing on. Psychosoc
ial risks are those
that cause physical or psychological harm, aris
ing from the
design 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 H&S 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
and certif
icat
ion recognises the Group’s commitment to
creating people-first workplaces that promote health,
wellbeing, and equity, and is a sign
ificant m
ilestone in our
broader strategy towards enhancing social sustainab
il
ity.
Group Code of Conduct
The Board has adopted a Group Code of Conduct and
Ethics (the Code) relating to the lawful and ethical conduct
of business and this is supported by the Group’s valued
behaviours. This has been communicated to all directors
and employees, all of whom are expected to observe high
standards of integr
ity and fa
ir dealing in relation to customers,
employees and regulators in the communit
ies
in which the
Group operates. Directors and employees are asked to
recommit to the Code annually, and 99.9 per cent have
completed the 2024 recommitment. All Board members
have recommitted to the Code.
Customers and products
Our five largest customers together accounted for 1.9 per cent
of our total operating income in the year ended 31 December
2024.
We aim to design and offer products based on client needs to
ensure fair client treatment and to support fair outcomes for
clients. The Group has in place a risk framework, compris
ing
polic
ies, standards and controls to support these objectives
in
alignment with our Conduct Risk Management Approach.
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
client industr
ies, to promptly resolve Cl
ient complaints and
understand and respond to client issues. For more informat
ion
on our approach to product design, product pric
ing, treat
ing
customers fairly and protecting clients, and incent
iv
is
ing our
frontline employees, see pages 35 to 36.
In 2024, the total number of client complaints in CIB was 1,585.
In WRB, we received in total 201,901 client complaints (an
average of 1.78 per 1,000 active clients per month).
Suppliers and our supply chain
In 2024, $4.7 bill
ion was spent w
ith 10,918 suppliers. Of this,
72.3 per cent of the total spend was in the Asia region, with
20.6 per cent in Europe and the Americas, and 7.1 per cent in
Africa and the Middle East. Furthermore, 80 per cent of total
spend in 2024 was with 389 suppliers. In 2024, our five largest
suppliers together accounted for 14.47 per cent of total
spend, with the largest ten amounting to 22.64 per cent
of total spend.
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 Group engages w
ith suppliers
on environmental and social matters, please see our Supplier
Charter and Supplier Divers
ity and Inclus
ion Standard.
Our Supplier Charter and Supplier Divers
ity and Inclus
ion standard can
be viewed at
sc.com/suppliercharter
and
sc.com/supplierd
ivers
ity
Details of how we create value for our suppliers and other
stakeholder groups can be found on
page 37
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, and
(i
i
i) fund polit
ical causes. In al
ignment to this, no polit
ical
donations were made in the year ended 31 December 2024.
Research and development
During the year, the Group invested $2.13 bill
ion (2023:
$2.01 bill
ion)
in research and development, of which $1.18
(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.
Responsible AI
The Group has been actively embracing AI and dig
ital
innovat
ion to stay compet
it
ive
in the Banking, Financ
ial
Services and Insurance sector for a number of years. The
approved AI use cases in the Bank are deployed in various
domains such as customer engagement, operational
efficiency, r
isk management, customer onboarding, employee
engagement, management reporting and talent acquis
it
ion.
Our Responsible AI governance has been established for a
number of years and is led by a dedicated team with
in the
Chief Data Office, who have been effectively managing the
centralised governance of all AI use cases. Our approach
aligns with leading industry standards, specif
ically the MAS
FEAT and HKMA BDAI guidel
ines, wh
ich are benchmarks in
the Banking regulator space. This alignment not only ensures
our adherence to high ethical and regulatory guidel
ines
but also posit
ions us well for future
industry developments.
Our Audit Committee receives twice-yearly reports on Data
Risk, which includes Responsible AI.
Auditor independence
Non-audit services
The Group’s Non-Audit Services Policy (the Policy) is based on
an overrid
ing pr
inc
iple that, to avo
id any actual or perceived
conflicts of interest, the Group’s auditors should only be used
when there is evidence that there is no alternative in terms
of quality and when there is no conflict with their duties as
auditor. Each request for EY to provide non-audit services will
be assessed on its own merits. However, the following types of
non-audit services are likely to be permiss
ible under the Pol
icy:
•
reviews of inter
im financial
informat
ion and ver
if
icat
ion of
inter
im profits – the Group would also extend th
is to work on
investor circulars in most foreseeable circumstances
•
extended audit or assurance work on financ
ial
informat
ion
and/or financial or operat
ional controls, where this work is
closely linked to the audit engagement
•
agreed-upon procedures on materials with
in or referenced
in the Annual Report of the Group or an entity with
in the
Group, and
•
internal control review services.
191
Standard Chartered
– Annual Report 2024
Directors’ report
The following are strictly prohib
ited under the Pol
icy:
•
bookkeeping, informat
ion technology and
internal
audit services
•
corporate finance services, valuation services or lit
igat
ion
support
•
tax or regulatory structuring proposals
•
services where fees are paid on a contingent basis
(in whole or in part), and
•
consulting services that actively assist in running the
business in place of management as opposed to provid
ing
or validat
ing
informat
ion, wh
ich management then util
ises
in the operation of the business.
To ensure that the Group will comply with a cap that lim
its
fees on non-audit services provided by EY to under 70 per cent
of the average Group audit fee from the previous three
consecutive financ
ial years (wh
ich applies from EY’s fourth
year of being the Group’s external auditor), the Policy requires
that annual non-audit service fees are lower than 70 per cent
of the average annual Group audit fee for the last three years.
The caps exclude audit related non-audit services and
services carried out pursuant to law or regulation. For 2024,
the 70 per cent fee cap ratio was 23 per cent. Details relating
to EY’s remuneration as the Group Statutory Auditor and the
types of non-audit services provided by EY are given in Note
38 to the financial statements.
Information given to the auditor
Each director believes that there is no relevant informat
ion of
which our Group Statutory Auditor is unaware. Each has taken
all steps necessary as a director to be aware of any relevant
audit informat
ion and to establ
ish that the Group Statutory
Auditor is made aware of any pertinent informat
ion. EY w
ill be
in attendance at the 2025 AGM. A resolution to re-appoint EY
as auditor was passed at the Company’s 2024 AGM. EY is a
Public Interest Entity Auditor recognised in accordance with
the Hong Kong Financ
ial Report
ing Council Ordinance.
By order of the Board
Adrian de Souza
Group Company Secretary
21 February 2025
Standard Chartered PLC
Registered No. 966425
192
Standard Chartered
– Annual Report 2024
Directors’ report
Statement of directors’ responsib
il
it
ies
Statement of directors’ responsib
il
it
ies
The directors are responsible for preparing the Annual
Report and the Group and Company financial statements
in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and
Company financial statements for each financial year.
Under that law:
•
the Group financial statements have been prepared
in
accordance with UK-adopted International Accounting
Standards and International Financ
ial Report
ing Standards
as adopted by the European Union
•
the Company financial statements have been properly
prepared in accordance with UK-adopted International
Accounting Standards as applied in accordance with
section 408 of the Companies Act 2006, and
•
the financial statements have been prepared
in accordance
with the requirements of the Companies Act 2006.
Under company law the directors must not approve the
financial statements unless they are 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 financ
ial
statements, the directors are required to:
•
select suitable accounting polic
ies and then apply them
consistently
•
make judgements and estimates that are reasonable,
relevant and reliable
•
state whether they have been prepared in accordance
with UK-adopted International Accounting Standards and
International Financ
ial Report
ing Standards as adopted by
the European Union
•
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 with 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 material 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, a Directors’
Report, a Directors’ Remuneration Report and a Corporate
Governance Statement that comply with that law and
those regulations.
The directors are responsible for the maintenance and
integr
ity of the corporate and financial
informat
ion
included
on the Company’s website. Legislat
ion
in the UK governing
the preparation and dissem
inat
ion of financ
ial statements
differs from legislat
ion
in other jur
isd
ict
ions.
Responsib
il
ity statement of the directors in
respect of the annual financial report
We confirm that to the best of our knowledge:
•
The financial statements, prepared
in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liab
il
it
ies, financial pos
it
ion and profit or
loss of the Company and the undertakings 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 undertak
ings included
in the consolidat
ion taken as a whole, together w
ith a
descript
ion of the emerg
ing risks and uncertaint
ies that
they face.
We consider the Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable and provides the
informat
ion necessary for shareholders to assess the Group’s
posit
ion and performance, bus
iness model and strategy.
By order of the Board.
Diego De Giorg
i
Group Chief Financ
ial Officer
21 February 2025
Focusing on the
cross-border needs
of affluent clients
As a leading wealth manager across Asia, Africa
and the Middle East, we connect affluent clients
to cross-border opportunit
ies
in the world’s most
dynamic markets.
We’re focused on serving the needs of
internat
ionally mob
ile, affluent Chinese and
Indian clients, leveraging our wealth hubs in Hong
Kong, Singapore, UAE and Jersey, supported by
our team of multil
ingual relat
ionsh
ip managers
and special
ists, who adv
ise on cross-border
wealth solutions to meet their internat
ional
banking needs.
In October, we refreshed our affluent
internat
ional bank
ing proposit
ion for Global
Indian clients and opened new internat
ional
centres in Mumbai and Chennai.
Learn more
sc.com/global-ind
ian
Risk review and
Capital review
194 Risk Index
196
Enterprise Risk Management Framework
201 Princ
ipal r
isks
207 Risk profile
232 Capital review
193
Standard Chartered
— Annual Report 2024
Risk review and Capital review
194
Standard Chartered
– Annual Report 2024
Risk review
Index
Annual | ||
Report and | ||
Risk Index | Accounts | |
Risk management | Enterprise Risk Management Framework | 196 |
approach | Princ ipal r isks | 201 |
Risk profile | Credit Risk | 207 |
Basis of preparation | 207 | |
Credit Risk overview | 207 | |
Impairment model | 207 | |
Staging of financ ial instruments | 207 | |
IFRS 9 ECL princ iples and approaches | 207 | |
Summary of Credit Risk performance | 207 | |
Maximum exposure to Credit Risk | 209 | |
Analysis of financ ial instruments by stage | 210 | |
Credit quality analysis | 212 | |
• Credit quality by client segment | 212 | |
• Credit quality by key geography | 217 | |
Movement in gross exposures and credit impa irment for loans and advances, debt secur it ies, | ||
undrawn commitments and financ ial guarantees | 219 | |
Analysis of stage 2 balances | 225 | |
Credit impa irment charge | 226 | |
Problem credit management and provis ion ing | 226 | |
• Forborne and other modif ied loans by cl ient segment | 226 | |
• Forborne and other modif ied loans by key geography | 226 | |
Credit Risk mit igat ion | 227 | |
• Collateral | 227 | |
• Collateral held on loans and advances | 227 | |
• Collateral – Corporate and Investment Banking | 227 | |
• Collateral – Wealth and Retail Banking | 228 | |
• Mortgage loan-to-value ratios by geography | 228 | |
• Collateral and other credit enhancements possessed or called upon | 229 | |
• Other Credit Risk mit igat ion | 229 | |
Other portfolio analysis | 229 | |
• Maturity analysis of loans and advances by client segment | 229 | |
• Credit quality by industry | 230 | |
• Industry and Retail Products analysis of loans and advances by key geography | 231 | |
• High carbon sectors | 232 | |
• Commercial real estate | 234 | |
• Debt securit ies and other el ig ible b ills | 235 | |
IFRS 9 ECL methodology | 236 | |
Traded Risk | 247 | |
Market Risk movements | 247 | |
Counterparty Credit Risk | 249 | |
Derivat ive financial instruments Credit Risk mit igat ion | 249 | |
Liqu id ity and Funding Risk | 250 | |
Liqu id ity and Funding Risk metrics | 250 | |
Liqu id ity analysis of the Group’s balance sheet | 252 | |
Interest Rate Risk in the Banking Book | 254 | |
Operational and Technology Risk | 255 | |
Operational and Technology Risk profile | 255 | |
Other princ ipal r isks | 255 | |
Climate Risk | 256 | |
Managing the financ ial and non-financial r isks from climate change | 257 | |
Assessing the resil ience of our strategy us ing scenario analysis | 265 |
Standard Chartered
– Annual Report 2024
195
Risk review and Capital review
Annual | ||
Report and | ||
Risk Index | Accounts | |
Capital | Capital summary | 270 |
• Capital ratio | 270 | |
• Capital base | 271 | |
Movement in total capital | 272 | |
Risk-weighted asset | 272 | |
Leverage ratio | 274 |
The following parts of the Risk review and Capital review form part of these financ
ial statements and are aud
ited by the
external auditors:
a) Risk review:
Disclosures marked as ‘audited’ from the start of Credit risk section (page 207) to the end of other princ
ipal r
isks
in the same section (page 255); and
b) Capital review:
Tables marked as ‘audited’ from the start of ‘Capital base’ to the end of ‘Movement in total capital’, excluding
‘Total risk-weighted assets’ (pages 271 and 272).
Risk review
Risk management approach
196
Standard Chartered
— Annual Report 2024
Enterprise Risk Management Framework
Risk management is at the heart of banking, it is what we do. Managing risk effectively is how
we drive commerce and prosperity for our clients and our 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 financial 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 Enterprise Risk Management Framework (ERMF)
enables the Group to manage enterprise-wide risks, with the
objective of max
im
is
ing risk-adjusted returns while remain
ing
with
in our R
isk Appetite (RA). The ERMF is complemented by
frameworks, polic
ies and standards wh
ich are mainly aligned
to the Princ
ipal R
isk Types (PRTs), and is embedded across the
Group, includ
ing
its branches and subsid
iar
ies.
1
It is reviewed
and approved by the Board 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 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
.
The risks we face constantly evolve, and we must always
look for ways to manage them as effectively as possible.
While unfavourable outcomes will occur from time to time,
a healthy risk culture means that we react quickly and
transparently. We can then take the opportunity to learn from
our experience and improve our framework and processes.
Strategic risk management
The Group’s approach to strategic risk management includes
the following:
•
Risk 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
Senior Managers Regime
2
Roles and responsib
il
it
ies under the ERMF are al
igned to
the objectives of the Sen
ior Managers Regime. The Group
Chief Risk Officer (GCRO) is responsible for the overall
development and maintenance of the Group’s ERMF 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 Board
•
mainta
in
ing the ERMF, 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 Group’s standards and RA
•
overseeing and challenging the management of PRTs under
the ERMF
•
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 sustainable ERMF that places regulatory and compliance
standards, together with culture of appropriate conduct, at
the forefront of the Group’s agenda.
Our Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR)
function,
3
works alongside the Risk function with
in the ERMF
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.
1
The Group’s ERMF and system of internal control applies only to wholly controlled subsid
iar
ies of the Group, and not to associates, jo
int ventures or structured
entit
ies of the Group.
2
Senior managers refer to ind
iv
iduals designated as senior management functions under the FCA and PRA Senior Managers Regime.
3
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).
Standard Chartered
— Annual Report 2024
197
Risk review and Capital review
•
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 ERMF.
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 hol
ist
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
actions 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 Top
ical and Emerging
Risks (TERs) to which the Group is or might be exposed to.
Multiple ident
ification and assessment techn
iques 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 Group Risk Committee (GRC) 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 Board.
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 sustainably while
managing our risks, giv
ing confidence to our stakeholders.
The Group RA is supplemented by risk control tools such as
granular level lim
its, pol
ic
ies, and standards to ma
inta
in the
Group’s risk profile with
in approved RA.
The Board 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.
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 198 for the set of RA Statements.
Stress testing
The objective of stress test
ing is to support the 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
•
has set RA metrics at appropriate levels.
Enterprise stress tests incorporate capital and liqu
id
ity
adequacy stress tests, includ
ing recovery and resolut
ion,
as well as reverse stress tests.
Stress tests are performed at the Group, country, business,
and portfolio level under a wide range of risks and at varying
degrees of severity. Unless specif
ically set by the regulator,
scenario design is a bespoke process that aims to explore risks
that can adversely impact the Group.
The Board delegates approval of the Bank of England (BoE)
stress test submiss
ions to the Board R
isk Committee (BRC),
which reviews the recommendations from the GRC. Based on
the stress test results, the Group Chief Financ
ial Officer (GCFO)
and GCRO can recommend strategic actions to the Board 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
risks 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.
198
Standard Chartered
— Annual Report 2024
Risk review
Risk management approach
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 Group has also undertaken a number of Climate Risk stress tests, both those mandated by regulators as well as
management scenarios.
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 ERMF.
These risks are managed through dist
inct RTFs wh
ich are approved by the GCRO.
The PRTs and associated RA Statements are reviewed annually. The table below shows the Group’s current PRTs, their defin
it
ion
and RA Statement.
Princ ipal R isk Types | Definit ion | Risk Appetite Statement |
Credit Risk | Potential for loss due to failure of a counterparty to | The Group manages its credit exposures following |
meet its agreed obligat ions to pay the Group. | the princ iple of d ivers ification across products, | |
geographies, client segments and industry sectors. | ||
Traded Risk | Potential for loss resulting from activ it ies undertaken | The Group should control its financ ial markets |
by the Group in financ ial markets. | activ 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 | The Group should mainta in sufficient cap ital, liqu id ity |
to support our operations, the risk of reductions in | and funding to support its operations, and an interest | |
earnings or value from movements in interest rates | rate profile ensuring that the reductions in earnings | |
impact ing bank ing book items and the potential for | or value from movements in interest rates impact ing | |
losses from a shortfall in the Group’s pension plans. | banking 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 failed | The Group aims to control operational and |
Technology Risk | internal processes, technology events, human error, | technology risks to ensure that operational losses |
or from the impact of external events (includ ing | (financial or reputat ional), includ ing any related to the | |
legal risks). | conduct of business matters, do not cause material | |
damage to the Group’s franchise. | ||
Information and Cyber | Risk to the Group’s assets, operations, and | The Group aims to mit igate and control ICS r isks |
Security (ICS) Risk | ind iv iduals due to the potential for unauthorised | to ensure that inc idents do not cause the Bank |
access, use, disclosure, disrupt ion, mod if icat ion, | material harm, business disrupt ion, financial loss | |
or destruction of informat ion assets and/or | or reputational damage – recognis ing that wh ile | |
informat ion systems. | inc idents are unwanted, they cannot be ent irely | |
avoided. | ||
Financ ial Cr ime Risk 4 | Potential for legal or regulatory penalties, material | The Group has no appetite for breaches of laws and |
financial loss or reputat ional damage resulting | regulations related to Financ ial Cr ime, recognis ing | |
from the failure to comply with applicable laws | that while inc idents are unwanted, they cannot be | |
and regulations relating to internat ional sanct ions, | entirely avoided. | |
anti-money laundering and anti-bribery and | ||
corruption, and fraud. | ||
Compliance Risk | Potential for penalties or loss to the Group or for | The Group has no appetite for breaches of laws and |
an adverse impact to our clients, stakeholders | regulations related to regulatory non-compliance; | |
or to the integr ity of the markets we operate in | recognis ing that wh ile inc idents are unwanted, they | |
through a failure on our part to comply with laws, | cannot be entirely avoided. | |
or regulations. | ||
Environmental, Social | Potential or actual adverse impact on the | The Group aims to measure and manage financ ial |
and Governance | environment and/or society, the Group’s financ ial | and non-financial r isks aris ing from cl imate change, |
and Reputational | performance, operations, or the Group’s name, | reduce emiss ions in line with our net zero strategy |
(ESGR) Risk | brand or standing, aris ing from env ironmental, | and protect the Group from material reputational |
social or governance factors, or as a result of the | damage by upholding responsible conduct and | |
Group’s actual or perceived actions or inact ions. | striv ing to do no s ign 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 misest imat ion that could be princ ipally | impl icat ions aris ing from m isuse of models or errors | |
based on the output of models, due to errors in | in the development or implementat ion of models; | |
the development, implementat ion, or use of | while accepting some model uncertainty. | |
such models. |
4
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.
Standard Chartered
— Annual Report 2024
199
Risk review and Capital review
ERMF effectiveness reviews
The GCRO is responsible for annually affirm
ing the
effectiveness of the ERMF to the BRC via an effectiveness
review. This review is based on the princ
iple of ev
idence-
based self-assessments for all the RTFs and relevant polic
ies.
A top-down review and challenge of the results is conducted
by the GCRO with all RFOs and an opin
ion on the
internal
control environment is provided by Internal Audit.
The ERMF effectiveness review measures year-on-year
progress. The key outcomes of the 2024 review are:
•
Continued focus on embedding the ERMF across the
organisat
ion.
•
Financ
ial r
isks continue to be effectively managed, and the
Group is making good progress in embedding non-financ
ial
risk management.
•
Self-assessments performed in branches and banking
subsid
iar
ies reflect the embeddedness of the ERMF.
Country and cluster risk committees continue to play an
active role in overseeing and managing risks across our
footprint markets.
Ongoing effectiveness reviews allow for a structured
approach to 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 r
isks with
in
its businesses, functions and across
our footprint. As the regulatory environment continuously
changes, the Group constantly monitors regulatory
developments and take proactive actions for compliance.
Executive and Board risk oversight
Overview
The corporate governance and committee structure helps
the Group to conduct our business. The Board has ultimate
responsib
il
ity for risk management and approves the ERMF
based on the recommendation of the BRC, which also
recommends the Group RA Statement for all PRTs and other
risks. In addit
ion to the BRC and Aud
it Committee, the Culture
and Sustainab
il
ity Committee oversees the Group’s culture
and key sustainab
il
ity prior
it
ies.
See
page 113
for the Board and committee governance structure.
Group Risk Committee
The GRC, which derives its authority from the GCRO, is responsible for ensuring the effective management of risk throughout
the Group in support of the Group’s strategy. The GCRO chairs the GRC, whose members are drawn from the Group
Management Team. The GRC oversees the effective implementat
ion of the ERMF for the Group,
includ
ing the delegat
ion
of any part of its authorit
ies to appropr
iate ind
iv
iduals or sub-committees.
Group Risk Committee | ||
sub-committees | Chair | Roles and responsib il it ies |
Group Non-Financ ial R isk | Global Head, Operational, | Governs the in-scope non-financ ial r isks throughout the Group in support |
Committee (GNFRC) | Technology and Cyber Risk | of the ERMF and the Group’s strategy. |
Group Financ ial Cr ime Risk | Group Head, CFCR | Ensures that the Financ ial Cr ime Risk profile (excluding Fraud Risk and |
Committee (GFCRC) | Secondary Reputational Risk aris ing from F inanc ial Cr ime Risk) is | |
managed with in RA and pol ic ies. | ||
Group Responsib il ity and | GCRO | Ensures the effective management of Reputational and Sustainab il ity |
Reputational Risk Committee | Risk across the Group. This includes provid ing overs ight of matters aris ing | |
(GRRRC) | from clients, products, transactions and strategic coverage-related | |
decis ions and matters escalated by the respect ive RFOs. | ||
International Financ ial | Co-chaired by the Global | Ensures the effective management of expected credit loss (ECL) |
Reporting Standards (IFRS) 9 | Head Enterprise Risk | computations, as well as stage allocation of financ ial assets for quarterly |
Impairment Committee (IIC) | Management (ERM) and | financial report ing. |
Group Head, Central Finance | ||
Model Risk Committee | Global Head, ERM | To support the Group strategy by ensuring the effective measurement |
(MRC) | and management of Model Risk in line with internal polic ies and | |
model RA. | ||
Investment Committee | Global Head of Stressed | Ensures the optim ised w ind-down of the Group’s non-core direct |
Assets Risk | investment activ it ies in equit ies, quas i-equit ies (exclud ing mezzanine), | |
funds and other alternative investments (excluding debt/debt-like | ||
instruments). | ||
SC Ventures (SCV) Risk | CRO, SCV who receives | Oversees the effective management of risk throughout SCV and the |
Committee | authority directly from the | portfolio of controlled entit ies operat ing under SCV. |
GCRO | ||
Climate Risk Management | Global Head, ERM | Oversees the effective implementat ion of the Group’s Cl imate Risk |
Committee (CRMC) | workplan, includ ing relevant regulatory requ irements. This includes | |
embedding Climate Risk and net zero oversight across Group businesses, | ||
as part of the Group’s commitment to manage Climate Risk related | ||
financial and non-financial r isks. | ||
Regulatory Interpretation | Co-chaired by the Global | Provides oversight of material regulatory interpretat ions for the Cap ital |
Committee (RIC) | Head ERM and Group Head, | Requirements Regulation (as amended by UK legislat ion), the Prudent ial |
Central Finance | Regulatory Authority (PRA) rulebook and other relevant regulations | |
impact ing Group regulatory cap ital calculations and reporting. The | ||
areas and risk types in scope are credit risk, traded risk, operational risk, | ||
large exposures, leverage ratio and securit isat ion. |
Risk review
Risk management approach
200
Standard Chartered
– Annual Report 2024
Group Risk Committee | |||
sub-committees | Chair | Roles and responsib il it ies | |
Dig ital Assets R isk | CRO, SC Ventures & Global | Oversees effective risk management of the Dig ital Assets (DA) R isk | |
Committee (DRC) | Head, Dig ital Asset R isk | profile of the Group. This includes provid ing overs ight and subject matter | |
expertise of DA Risk matters across the PRTs. | |||
Corporate & Investment | Co-Heads CRO CIB and CRO, | Ensures the effective management of financ ial r isk throughout CIB in | |
Banking Financ ial R isk | ASEAN & South Asia | support of the Group’s strategy. | |
Committee (CIBFRC) | |||
Wealth & Retail Banking | Chief Risk Officer, WRB & | Ensures the effective management of risk throughout WRB in support | |
Risk Committee (WRBRC) | GCNA | of the Group’s strategy. | |
HK & GCNA Risk Committee | CRO, Hong Kong & GCNA | These committees ensure the effective management of risk in the | |
(HK&GCNA RC) | clusters in support of the Group’s strategy. | ||
SG & ASEAN Risk Committee | CRO, Singapore & ASEAN | ||
(SG&ASEAN RC) | |||
Standard Chartered Bank | CRO, India & South Asia | ||
(SCB) India Country Risk | |||
Committee (CRC & CNFRC) | |||
UK & Europe Risk Committee | CRO & Chief Credit Officer, | ||
(UK & ERC) | Europe | ||
Americas Risk Committee | CRO, Americas | ||
(ARC) | |||
Middle East and Pakistan | CRO & Regional CCO AME | ||
Risk Committee (MEPRC) | |||
Africa Risk Committee | CRO & Regional CCO AME |
Group Asset and Liab
il
ity Committee
The Group Asset and Liab
il
ity Committee (GALCO) is chaired
by the GCFO. Its members are drawn princ
ipally from the
Management Team. GALCO is responsible for determin
ing
the Group’s balance sheet strategy and ensuring that, in
executing the Group’s strategy, the Group operates with
in
RA and regulatory 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. It also monitors the structural impact
of decis
ions around susta
inable finance, net zero and climate
risk. GALCO is also responsible for ensuring that internal and
external recovery planning requirements are met.
Standard Chartered
– Annual Report 2024
201
Risk review and Capital review
Princ
ipal r
isks
We manage and control our PRTs through
dist
inct RTFs, pol
ic
ies and RA.
See
page 198
for the Group’s current PRT definit
ions and
Risk Appetite Statements.
Changes impact
ing PRTs
in 2024
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
Segment-specif
ic pol
ic
ies are
in place for Corporate &
Investment Banking (CIB) and Wealth & Retail Banking
(WRB) which set the princ
iples that must be followed for the
end-to-end credit process covering in
it
iat
ion, assessment,
documentation, approval, monitor
ing and governance.
The Group also sets out standards for the elig
ib
il
ity,
enforceabil
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. The Group
also seeks 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.
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
their 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. Credit-impa
ired accounts are managed by the
Group’s special
ist recovery un
it, Stressed Asset Group (SAG),
which is independent of the Client Coverage/Relationsh
ip
Managers. The Stressed Asset Risk (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,
this industry portfolio review incorporates industry outlook,
key elements of the business strategy, RA, credit profile and
emerging and horizon risks. A summary of these industry
portfolio reviews is also shared with the CIB Financ
ial R
isk
Committee.
For WRB, exposures and collateral monitor
ing are performed
at the counterparty and/or portfolio 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 function performs assessments of the Credit Risk profiles
at various portfolio levels. They focus on selected countries
and segments through deep dives, comparative analysis,
and review and challenge of the basis of credit approvals.
The review aims to ensure that the evolving Credit Risk profiles
of CIB and WRB are well managed with
in RA and pol
ic
ies.
Results of the reviews are reported to the GRC and BRC.
Credit rating and measurement
All credit proposals are subject to a robust credit risk
assessment. It includes a comprehensive evaluation of the
client’s credit quality, includ
ing w
ill
ingness, ab
il
ity, and
capacity to repay. The primary lending considerat
ion for
counterparties is based on their credit quality and operating
cash flows, 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
deteriorat
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.
Risk review
Risk management approach
202
Standard Chartered
– Annual Report 2024
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
behavioural credit scores that are calibrated to generate a
probabil
ity of default. The R
isk Decis
ion Framework uses a
credit rating system to define the portfolio/new booking
segmentation, shape and decis
ion cr
iter
ia for the unsecured
consumer business segment.
Advanced Internal Ratings-Based (AIRB) models cover the
majority of our exposures and are used
in assessing risks at a
customer and portfolio level, setting strategy, and optim
is
ing
our risk-return decis
ions. The 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
GRC and BRC.
Credit impa
irment
For CIB, in line with the regulatory guidel
ines, Stage 3 expected
credit loss (ECL) is considered when an obligor is more than
90 days past due on any amount payable to the Group, or
the obligor has symptoms of 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
objective ev
idence of impa
irment, such as bankruptcy, debt
restructuring, fraud, or death, with unlikely continuat
ion of
contractual payments. Financ
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 princ
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 which there may not be a readily accessible
market. The total amount of the Group’s impa
irment
provis
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
pages 236 to 246
.
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 the Underwrit
ing Comm
ittee 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 risk 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 risk 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 major
ity 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
histor
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
(pages 247 to 249)
.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
203
Counterparty Credit Risk measurement
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
estimate 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, which is predominantly used, and an add-on based
PFE methodology.
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
Mit
igat
ion
The Group develops polic
ies to address mater
ial Treasury
Risks and aims to mainta
in
its risk profile with
in RA. In order
to do this, metrics are set against Capital Risk, Liqu
id
ity and
Funding Risk and IRRBB. Where appropriate, RA metrics are
cascaded down to clusters and countries in the form of lim
its
and management action triggers.
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 Board annually. The plan
ensures that adequate levels of capital, includ
ing loss-
absorbing 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 Group’s
capital plan.
RA metrics includ
ing cap
ital, leverage, min
imum requ
irement
for own funds and elig
ible l
iab
il
ity (MREL) and double
leverage are assessed with
in the Corporate Plan to ensure
that the strategy can be achieved with
in r
isk tolerances.
Structural Foreign Exchange (FX) Risk
The Group’s structural FX posit
ion results from the Group’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 Group’s translation reserves with a direct
impact on the Group’s Common Equity Tier 1 ratio.
The Group contracts hedges to manage its structural FX
posit
ion
in accordance with the RA, and as a result the
Group has taken net investment hedges to partially cover
its exposure to certain non-US dollar currencies to mit
igate
the FX impact of such posit
ions on
its capital ratios.
Our structural foreign exchange exposures can be found
on
page 249
.
Liqu
id
ity and Funding Risk
At Group, cluster and country level we implement various
business-as-usual and stress risk 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.
The risk management approach and RA are assessed
annually through the Internal Liqu
id
ity Adequacy Assessment
Process. A funding plan is also developed for effic
ient l
iqu
id
ity
projections to ensure that the Group
is adequately funded
in the required currencies, to meet its obligat
ions and cl
ient
funding needs. The funding plan is part of the overall
Corporate Plan process align
ing to the cap
ital requirements.
Further detail on Liqu
id
ity and Funding Risk can be found
on
pages 250 to 253
.
Interest Rate Risk in the Banking Book
This risk arises from differences in the repric
ing profile,
interest
rate basis, and optional
ity of bank
ing 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.
The Group monitors IRRBB against the RA.
Further detail on IRRBB can be found on
page 254
.
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.
The Pension Risk is monitored against the RA and reported
to the GRC. The RA metric is calculated as the total capital
requirement (includ
ing both P
illar 1 and Pillar 2A capital) in
respect of Pension Risk, expressed as a number of basis points
of RWA.
Recovery and resolution planning
In line with PRA requirements, the Group mainta
ins a Recovery
Plan, which is a live document to be used by management in
the event of stress in order to restore the Group to a stable
and sustainable posit
ion. The 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. A Recovery Plan is also mainta
ined w
ith
in each major
entity, and all Recovery Plans are subject to period
ic fire-
drill testing.
As the UK resolution authority, the BoE set a single point of
entry bail-in at the ultimate holding company level (Standard
Chartered PLC) as the preferred resolution strategy for the
Group. In support of this strategy, the Group has a set of
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
ongoing basis.
Following the BoE’s first resolvabil
ity assessment and publ
ic
disclosure for major UK firms in 2022, the Group submitted its
Resolvabil
ity Self-Assessment Report to the BoE and PRA, and
subsequently published its resolvabil
ity publ
ic disclosure in
August 2024 as part of the second Resolvabil
ity Assessment
Framework cycle.
Risk review
Risk management approach
204
Standard Chartered
– Annual Report 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 relevant country Asset and Liab
il
ity Committee.
The reports contain key informat
ion on balance sheet trends,
exposures against 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 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
Risk Taxonomy).
The RCSA is used to determine the design and operating
effectiveness of each process, and requires:
•
the recording of end-to-end processes which deliver our
key client journey and business outcomes
•
the 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 efficiently 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
services 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 monitored to determine the Group’s exposure to
residual risk.
The residual risk assessments and reporting of events form
the Group’s Operational and Technology Risk profile.
The completeness of the Operational and Technology Risk
profile ensures appropriate 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 BRC is informed on adherence to Operational and
Technology RA through metrics reported for selected risks.
These metrics are monitored, and escalation thresholds are
devised based on the material
ity and s
ign
ificance of the
risk. These Operational and Technology RA metrics are
consolidated on a regular basis and reported at the relevant
Group committees, provid
ing sen
ior management with the
relevant informat
ion to
inform their risk decis
ions.
Information and Cyber
Security (ICS) 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
National 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 ERMF.
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
required 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 monitor 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
potential ‘in flight’ risks. The Group also tracks remediat
ion of
security matters ident
ified by external rev
iews, such as the
BoE CBEST Threat Intelligence-Led Assessment and the
Hong Kong Monetary Authority’s (HKMA) Intelligence-led
Cyber Attack Simulat
ion Test
ing (iCAST).
The CISO and OTCR functions monitor the ICS Risk profile and
ensure that breaches of RA are escalated to the appropriate
governance committee or authority levels for remediat
ion
and tracking.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
205
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 Author
ity (FCA) controlled function
and senior management function in accordance with
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
financial cr
ime laws and regulations, and the mit
igat
ion
of Financ
ial Cr
ime Risk. In this, the requirements of the
Operational and Technology RTF are followed to ensure
a consistent approach to the management of processes
and controls.
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
Operational and Technology RTF. The Group has a monitor
ing
and reporting process in place for Financ
ial Cr
ime Risk, which
includes escalation and reporting to the CFCR and relevant
risk committees.
While not a formal governance committee, the CFCR
Oversight Group provides oversight of CFCR risks includ
ing
the effective implementat
ion of the F
inanc
ial Cr
ime RTF.
It also provides oversight, challenge and direct
ion to CFCR
policy 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 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.
Further details on how we manage financ
ial cr
ime can be
found on
page 96
.
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
categories: those issued by financ
ial serv
ice regulatory
authorit
ies and those
issued by non-financ
ial serv
ice
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 val
idat
ion as well as overs
ight and
challenge of first line of defence processes and controls.
Mit
igat
ion
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 Operational and Technology RTF are
followed to ensure a consistent approach to the management
of processes and controls.
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 Operational and Technology RTF. Compliance Risk
reporting includes escalation and reporting to the CFCR and
relevant risk committees.
While not a formal governance committee, the CFCR
Oversight Group provides oversight of CFCR, risks includ
ing
the effective implementat
ion of the 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
services regulators impact
ing non-financial r
isks.
Risk review
Risk management approach
206
Standard Chartered
– Annual Report 2024
Environmental, Social
and Governance and
Reputational (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 reputational 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 transact
ions, 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 l
ines 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 onboarding,
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
Princ
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 GRC and BRC.
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
required, model risk mit
igants.
Model deficienc
ies ident
ified through the development or
validat
ion process, or model performance
issues ident
ified
through ongoing monitor
ing, are m
it
igated through
respective 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 wh
ich 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.
Management adjustments are used to address issues by
applying management decis
ions w
ithout adjust
ing a d
irect
modelling component.
As with all PRTs, operational controls are used to govern all
Model Risk-related processes, with regular risk assessments
performed to assess appropriateness and effectiveness of
those controls, in line with the Operational and Technology
RTF, with 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 sim
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 compliance, 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 BRC, GRC and 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
their 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 discuss
ion at the Model R
isk
governance committees on a regular basis.
Risk profile
Credit Risk (audited)
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
location from which a client relationsh
ip
is managed, which
may differ from where it is financ
ially booked and may be
shared between businesses 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 16 Reverse repurchase and repurchase agreements
includ
ing other s
im
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 contractual obligat
ions to pay the
Group. Credit exposures arise from both the banking and
trading books.
Impairment model
IFRS 9 mandates 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 financ
ial guarantees.
Staging of financ
ial
instruments
Financ
ial
instruments that are not already credit-impa
ired
are orig
inated
into stage 1 and a 12-month ECL 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 ECL
provis
ion
is recognised 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 (SICR) 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 SICR | • Non-performing |
IFRS 9 ECL princ
iples and approaches
The main methodology princ
iples and approach adopted by the Group are set out
in the following table.
Title | Supplementary Information | Page |
Approach for determin ing ECL | • IFRS 9 ECL methodology | 236 |
• Applicat ion of l ifet ime ECL | 236 | |
Key assumptions and judgements in determin ing ECL | • Incorporation of forward-looking informat ion | 238 |
• Forecast of key macroeconomic variables underlying the | 238 | |
| ECL calculation and the impact of non-linear ity | ||
• Impact of multiple economic scenarios | 241 | |
• Judgemental adjustments and management overlays | 241 | |
• Sensit iv ity of ECL calculation to macroeconomic variables | 242 | |
Sign ificant increase in Credit risk (SICR) | • Quantitat ive and qual itat ive cr iter ia | 244 |
Assessment of credit-impa ired financial assets | • Wealth and Retail Banking (WRB) clients | 245 |
• Corporate and Investment Banking (CIB) and Private | 245 | |
| Banking clients | ||
• Write-offs | 245 | |
Transfers between stages | • Movement in gross exposures and credit impa irment | 219 |
Modif ied financial assets | • Forborne and other modif ied loans | 226 |
Governance of PMAs and applicat ion of expert cred it | • IFRS 9 Impairment Committee | 246 |
judgement in respect of ECL |
Summary of Credit Risk performance
Maximum exposure
The Group’s on-balance sheet maximum exposure to Credit
Risk increased by $25 bill
ion to $823 b
ill
ion (31 December 2023:
$798 bill
ion). Cash and balances at Central banks decreased
by $6.5 bill
ion to $63 b
ill
ion (31 December 2023: $70 b
ill
ion) due
to reduced placements. Loans to banks held at amortised
cost decreased by $1.4 bill
ion to $44 b
ill
ion (31 December 2023:
$45 bill
ion). Fa
ir value through profit and loss increased by
$27.8 bill
ion to $172 b
ill
ion (31 December 2023: $144 b
ill
ion),
largely due to increases in debt securit
ies and reverse repos,
but this was partially offset by a $16.7 bill
ion reduct
ion in
debt securit
ies not held at fa
ir value through profit and loss.
Loans and advances to customers decreased by $5.9 bill
ion to
$281 bill
ion (31 December 2023: $287 b
ill
ion), due to a reduct
ion
in mortgages in Korea, Singapore and Hong Kong, given
continued headwinds, includ
ing fore
ign currency movements.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
207
Risk review
Risk profile
208
Standard Chartered
– Annual Report 2024
Loans and advances to customers in the CIB segment
increased by $7.6 bill
ion, ma
inly due to the execution of
pipel
ine deals
in Global Banking, but this was offset by a
$7.4 bill
ion decrease
in Central and other items. Derivat
ive
financial
instruments increased by $31 bill
ion to $81 b
ill
ion
(31 December 2023: $50 bill
ion). Off-balance sheet
instruments
increased by $16 bill
ion to $273 b
ill
ion (31 December 2023:
$257 bill
ion), due to an
increase in financ
ial guarantees and
other equivalents, which was driven by new business.
Further details can be found in the ‘Maximum exposure to Credit Risk’
section on
page 209
; ‘Credit quality by client segment’ section on
page 212
.
Loans and advances
94 per cent (31 December 2023: 94 per cent) of the Group’s
gross loans and advances to customers remain in stage 1 at
$269 bill
ion (31 December 2023: $274 b
ill
ion), reflect
ing our
continued focus on high-quality orig
inat
ion. For WRB, stage 1
balances decreased by $6.5 bill
ion to $117 b
ill
ion (31 December
2023: $123 bill
ion), of wh
ich $5.9 bill
ion was ma
inly due to a
reduction in the mortgage portfolios in Korea, Singapore and
Hong Kong, mainly driven by slower booking momentum and
higher attrit
ion as a result of
intense interest rate competit
ion.
For CIB, stage 1 balances increased by $8 bill
ion to $129 b
ill
ion
(31 December 2023: $121 bill
ion) ma
inly driven by the Energy,
Financ
ing, Insurance and Transport sectors. For Central and
other items, stage 1 balances decreased by 6.3 bill
ion to
$22 bill
ion (31 December 2023: $28 b
ill
ion) due to a reduct
ion
in exposures to the Government sector, across a number of
our markets.
Stage 2 loans and advances to customers decreased by
$0.6 bill
ion to $11 b
ill
ion (31 December 2023: $11 b
ill
ion). For
WRB, stage 2 balances decreased by $0.4 bill
ion to $1.9 b
ill
ion
(31 December 2023: $2.3 bill
ion), due to decrease
in the
mortgage portfolio. For Central and other items, higher risk
exposures decreased by $0.9 bill
ion to $0.1 b
ill
ion (31 December
2023: $1 bill
ion), was due to the matur
ity of short-term loan
exposures that were replaced with debt securit
ies
in Pakistan.
Stage 3 loans and advances decreased by $1 bill
ion to
$6.2 bill
ion (31 December 2023: $7.2 b
ill
ion) due to debt sales,
repayments, write-offs and upgrades to Stage 2 loans in CIB.
WRB stage 3 balances remained broadly stable at $1.6 bill
ion
(31 December 2023: $1.5 bill
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 bill
ion).
Further details can be found in the ‘Analysis of financ
ial
instruments by
stage’ section on
page 210
; ‘Credit quality by client segment’ section
on
page 212
; ‘Credit quality by industry’ section on
page 230
.
Analysis of Stage 2
The key SICR driver which caused exposures to be classif
ied
as stage 2 remains an increase in probabil
ity of default (PD).
The proportion of CIB exposures in stage 2 decreased due to
a reduction in clients placed on non-purely precautionary
early alert that have not breached PD thresholds. In WRB, the
exposures in stage 2 loans with more than 30 days past due
remained stable at $0.3 bill
ion (31 December 2023: $0.3 b
ill
ion).
In Central and other items, the $0.5 bill
ion decrease
in CG12
balances to $1.5 bill
ion (31 December 2023: $2 b
ill
ion) was
due to the maturity of short-term loan exposures that were
replaced with debt securit
ies
in Pakistan. ‘Others’ category
includes exposures where orig
inat
ion data is incomplete and
the exposures are allocated into stage 2.
Further details can be found in the ‘Credit quality by client segment’
section in
page
212
; ‘Analysis of stage 2 balances’ section on
page 225.
Credit impa
irment charges
The Group’s ongoing credit impa
irment was a net charge of
$547 mill
ion (31 December 2023: $508 m
ill
ion).
WRB contributed a net charge of $644 mill
ion (31 December
2023: $354 mill
ion), dr
iven by a higher interest rate
environment impact
ing repayments on cred
it cards and
personal loans and to a few non-repeating ECL releases
recorded in 2023. The increase in impa
irments was also due
to the maturity and portfolio growth of dig
ital partnersh
ips
in China and Indonesia, as well as a $21 mill
ion overlay
aris
ing from the settlement fa
ilure of two e-commerce
platforms in Korea.
CIB contributed a net release of $106 mill
ion (31 December
2023: $123 mill
ion charge) due to a number of stage 3 releases
and repayments.
Further details can be found in the ‘Financ
ial rev
iew‘ section on
page 51
;
‘Credit impa
irment charge’ sect
ion on
page 226
.
Commercial Real Estate (CRE)
The Group provides loans to CRE counterparties of which
$8.8 bill
ion
is to counterparties in the CIB segment where the
source of repayment is substantially derived from rental or
sale of real estate and is secured by real estate collateral.
The remain
ing CRE loans compr
ise working capital loans to
real estate corporates, loans with non-property collateral,
unsecured loans and loans to real estate entit
ies of d
ivers
ified
conglomerates. The average LTV ratio of the performing book
CRE portfolio has increased to 54 per cent (31 December 2023:
52 per cent). The proportion of loans with an LTV greater than
80 per cent has increased to 4 per cent (31 December 2023:
3 per cent).
China CRE
Total exposure to China CRE decreased by $0.6 bill
ion to
$2 bill
ion (31 December 2023: $2.6 b
ill
ion) ma
inly from exposure
reductions. The proportion of credit impa
ired exposures
increased to 70 per cent (31 December 2023: 58 per cent)
due to repayments with
in the non-cred
it impa
ired portfol
io.
The overall provis
ion coverage
increased to 87 per cent
(31 December 2023: 72 per cent), reflecting increased provis
ion
charges during the year. The proportion of the loan book
rated as Higher Risk increased to 3 per cent (31 December
2023: 0.3 per cent) primar
ily due to downgrades dur
ing
the year.
The Group continues to hold a judgemental management
overlay, which decreased by $71 mill
ion to $70 m
ill
ion
(31 December 2023: $141 mill
ion), reflect
ing repayments
and util
isat
ions during the year.
The Group is further ind
irectly exposed to Ch
ina CRE through
its associate investment in China Bohai Bank.
Further details can be found in the ‘China commercial real estate’ section
on
page 234
; ‘Judgemental adjustments’ section on
page 241
.
High carbon sectors
With the Group’s expansion in the asset-backed lending
business, the total on-and-off balance sheet exposure for
the Aviat
ion sector
increased to $2.6 bill
ion (31 December
2023: $1.9 bill
ion), wh
ile the Shipp
ing sector decreased to
$4.6 bill
ion (31 December 2023: $5 b
ill
ion). The Group’s pos
it
ion
statements mandates that for newer vessels and aircraft,
only carbon efficient ones can be financed.
While exposures to the Oil and Gas sector increased to
$21 bill
ion (31 December 2023: $20 b
ill
ion) due to
increased
funding towards more emiss
ions-efficient counterpart
ies,
exposures to the Power sector increased to $11 bill
ion
(31 December 2023: $9 bill
ion) due to
increased lending to
renewables and efficient gas generat
ion counterparties.
Further details on net zero targets and progress in managing transit
ion
risk of the high carbon sectors can be found in the ‘Sustainab
il
ity review’
section on
page 57
; ‘High carbon sectors’ section on
page 232
.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
209
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 financ
ial
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 on
page 207
.
| 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 | 63,447 | – | – | 63,447 | 69,905 | – | – | 69,905 |
Loans and advances to banks 1 | 43,593 | 2,946 | 40,647 | 44,977 | 1,738 | 43,239 | ||
of which – reverse repurchase | ||||||||
agreements and other sim ilar | ||||||||
secured lending 7 | 2,946 | 2,946 | – | – | 1,738 | 1,738 | – | – |
Loans and advances to customers 1 | 281,032 | 119,047 | – | 161,985 | 286,975 | 118,492 | 168,483 | |
of which – reverse repurchase | ||||||||
agreements and other sim ilar | ||||||||
secured lending⁷ | 9,660 | 9,660 | – | – | 13,996 | 13,996 | – | – |
Investment securit ies – Debt secur it ies | ||||||||
and other elig ible b ills 2 | 143,562 | 143,562 | 160,263 | – | – | 160,263 | ||
Fair value through profit or loss 3, 7 | 172,031 | 86,195 | – | 85,836 | 144,276 | 81,847 | – | 62,429 |
Loans and advances to banks | 2,213 | – | – | 2,213 | 2,265 | – | – | 2,265 |
Loans and advances to customers | 7,084 | – | – | 7,084 | 7,212 | – | – | 7,212 |
Reverse repurchase agreements and | ||||||||
other sim ilar lend ing 7 | 86,195 | 86,195 | – | – | 81,847 | 81,847 | – | – |
Investment securit ies – Debt secur it ies | ||||||||
and other elig ible b ills 2 | 76,539 | – | – | 76,539 | 52,952 | – | – | 52,952 |
Derivat ive financial instruments 4, 7 | 81,472 | 15,005 | 60,280 | 6,187 | 50,434 | 8,440 | 39,293 | 2,701 |
Accrued income | 2,776 | – | – | 2,776 | 2,673 | – | – | 2,673 |
Assets held for sale 9 | 889 | – | – | 889 | 701 | – | – | 701 |
Other assets 5 | 34,585 | – | – | 34,585 | 38,140 | – | – | 38,140 |
Total balance sheet | 823,387 | 223,193 | 60,280 | 539,914 | 798,344 | 210,517 | 39,293 | 548,534 |
Off-balance sheet 6 | ||||||||
Undrawn Commitments | 182,529 | 2,489 | – | 180,040 | 182,390 | 2,940 | – | 179,450 |
Financ ial Guarantees and | ||||||||
other equivalents | 90,632 | 1,807 | – | 88,825 | 74,414 | 2,590 | – | 71,824 |
Total off-balance sheet | 273,161 | 4,296 | – | 268,865 | 256,804 | 5,530 | – | 251,274 |
Total | 1,096,548 | 227,489 | 60,280 | 808,779 | 1,055,148 | 216,047 | 39,293 | 799,808 |
1
Amounts are net of ECL provis
ions. An analys
is of credit quality is set out in the credit quality analysis section (page 212). Further details of collateral held by
client segment and stage are set out in the collateral analysis section (page 227). The Group also has credit mit
igat
ion through Credit Linked Notes as set out
on page 229
2
Excludes equity and other investments of $994 mill
ion (31 December 2023: $992 m
ill
ion). Further deta
ils are set out in Note 13 financ
ial
instruments
3
Excludes equity and other investments of $5,486 mill
ion (31 December 2023: $2,940 m
ill
ion). Further deta
ils are set out in Note 13 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 Hong Kong certif
icates of
indebtedness, cash collateral, and acceptances, in addit
ion to unsettled trades and other financial assets
6
Excludes ECL provis
ions of $255 m
ill
ion (31 December 2023: $227 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
9
The amount is after ECL. provis
ions. Further deta
ils are set out in Note 21 Assets held for sale and associated liab
il
it
ies
Risk review
Risk profile
210
Standard Chartered
– Annual Report 2024
Analysis of financ
ial
instruments by stage (audited)
The table below presents the gross and credit impa
irment balances by stage for the Group’s amort
ised cost and FVOCI
financial
instruments as at 31 December 2024.
Further details can be found in the ‘Summary of Credit Risk performance’ section on
page 207
.
2024 | |||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | ||||||||||||
Total | Total | Total | Total | ||||||||||||
credit | Net | credit | Net | credit | Net | credit | Net | ||||||||
Gross | impa ir- | carrying | Gross | impa ir- | carrying | Gross | impa ir- | carrying | Gross | impa ir- | carrying | ||||
balance 1 | ment | value | balance 1 | ment | value | balance 1 | ment | value | balance 1 | ment | 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 | 62,597 | – | 62,597 | 432 | (4) | 428 | 426 | (4) | 422 | 63,455 | (8) | 63,447 | |||
Loans and | |||||||||||||||
advances | |||||||||||||||
to banks | |||||||||||||||
(amortised cost) | 43,208 | (10) | 43,198 | 318 | (1) | 317 | 83 | (5) | 78 | 43,609 | (16) | 43,593 | |||
Loans and | |||||||||||||||
advances to | |||||||||||||||
customers | |||||||||||||||
(amortised cost) | 269,102 | (483) 268,619 | 10,631 | (473) | 10,158 | 6,203 | (3,948) | 2,255 | 285,936 | (4,904) 281,032 | |||||
Debt securit ies | |||||||||||||||
and other | |||||||||||||||
elig ible b ills 5 | 141,862 | (23) | 1,614 | (4) | 103 | (2) | 143,579 | (29) | |||||||
Amortised cost | 54,637 | (15) | 54,622 | 475 | (2) | 473 | 42 | – | 42 | 55,154 | (17) | 55,137 | |||
FVOCI 2 | 87,225 | (8) | 1,139 | (2) | 61 | (2) | 88,425 | (12) | – | ||||||
Accrued income | |||||||||||||||
(amortised cost) 4 | 2,776 | 2,776 | – | – | 2,776 | – | 2,776 | ||||||||
Assets held | |||||||||||||||
for sale 4 | 840 | (7) | 833 | 38 | – | 38 | 58 | (45) | 13 | 936 | (52) | 884 | |||
Other assets | 34,585 | – | 34,585 | – | – | – | 3 | (3) | – | 34,588 | (3) | 34,585 | |||
Undrawn | |||||||||||||||
commitments 3 | 178,516 | (50) | 4,006 | (52) | 7 | (1) | 182,529 | (103) | |||||||
Financ ial | |||||||||||||||
guarantees, | |||||||||||||||
trade credits | |||||||||||||||
and irrevocable | |||||||||||||||
letter of credits 3 | 87,991 | (16) | 2,038 | (7) | 603 | (129) | 90,632 | (152) | |||||||
Total | 821,477 | (589) | 19,077 | (541) | 7,486 | (4,137) | 848,040 | (5,267) | |||||||
1
Gross carrying amount for off-balance sheet refers to notional values
2
These instruments are held at fair value on the balance sheet. The ECL 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 (31 December 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 (31 December 2023:
$14 mill
ion)
Risk review and Capital review
Standard Chartered
– Annual Report 2024
211
2023 | ||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Total | Total | Total | Total | |||||||||
credit | Net | credit | Net | credit | Net | credit | Net | |||||
Gross | impa ir- | carrying | Gross | impa ir- | carrying | Gross | impa ir- | carrying | Gross | impa ir- | carrying | |
balance 1 | ment | value | balance 1 | ment | value | balance 1 | ment | value | balance 1 | ment | 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 | 69,313 | – | 69,313 | 207 | (7) | 200 | 404 | (12) | 392 | 69,924 | (19) | 69,905 |
Loans and | ||||||||||||
advances | ||||||||||||
to banks | ||||||||||||
(amortised cost) | 44,384 | (8) | 44,376 | 540 | (10) | 530 | 77 | (6) | 71 | 45,001 | (24) | 44,977 |
Loans and | ||||||||||||
advances to | ||||||||||||
customers | ||||||||||||
(amortised cost) | 273,692 | (430) 273,262 | 11,225 | (420) | 10,805 | 7,228 | (4,320) | 2,908 | 292,145 | (5,170) 286,975 | ||
Debt securit ies | ||||||||||||
and other | ||||||||||||
ible b elig ills 5 | 158,314 | (26) | 1,860 | (34) | 164 | (61) | 160,338 | (121) | ||||
Amortised cost | 56,787 | (16) | 56,771 | 103 | (2) | 101 | 120 | (57) | 63 | 57,010 | (75) | 56,935 |
FVOCI 2 | 101,527 | (10) | 1,757 | (32) | 44 | (4) | 103,328 | (46) | ||||
Accrued income | ||||||||||||
(amortised cost) 4 | 2,673 | 2,673 | – | – | 2,673 | – | 2,673 | |||||
Assets held | ||||||||||||
for sale 4 | 661 | (33) | 628 | 76 | (4) | 72 | 1 | – | 1 | 738 | (37) | 701 |
Other assets | 38,139 | – | 38,139 | – | – | – | 4 | (3) | 1 | 38,143 | (3) | 38,140 |
Undrawn | ||||||||||||
commitments 3 | 176,654 | (52) | 5,733 | (39) | 3 | – | 182,390 | (91) | ||||
Financ ial | ||||||||||||
guarantees, | ||||||||||||
trade credits | ||||||||||||
and irrevocable | ||||||||||||
letter of credits 3 | 70,832 | (10) | 2,910 | (14) | 672 | (112) | 74,414 | (136) | ||||
Total | 834,662 | (559) | 22,551 | (528) | 8,553 | (4,514) | 865,766 | (5,601) | ||||
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 w
ith impa
irment of $14 m
ill
ion
Risk review
Risk profile
212
Standard Chartered
– Annual Report 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 r
isk.
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. Consumer and Business Banking portfolios are analysed by days past due and Private Banking
by the type of collateral held.
Mapping of credit quality
The Group uses the following internal risk mapping to determine the credit quality for loans.
Corporate & Investment Banking | Private Banking 1 | Wealth & Retail Banking 4 | |||
Credit quality | Internal grade | S&P external ratings | Regulatory | Internal grade | |
descript ion | mapping | equivalent | PD range (%) | Internal ratings | mapping |
Strong | 1A to 5B | AAA/AA+ to | 0 to 0.425 | Class I and Class IV | Current loans (no past |
BBB-/BB+ 2 | 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+ to C | 15.751 to 99.999 | Stressed Assets Group | Past due loans |
(SAG) Managed | 30 days and over till | ||||
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, ECL provis
ions and expected cred
it loss
coverage by business segment and stage. ECL coverage represents the ECL reported for each segment and stage as a
proportion of the gross loan balance for each segment and stage.
Further details can be found in the ‘Summary of Credit Risk performance’ section on
page 207
.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
213
Loans and advances by client segment (audited)
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 | 43,208 | 128,746 | 117,015 | 1,383 | 21,958 | 269,102 | 178,516 | 87,991 |
– Strong | 31,239 | 90,725 | 111,706 | 1,367 | 21,540 | 225,338 | 162,574 | 56,070 |
– Satisfactory | 11,969 | 38,021 | 5,309 | 16 | 418 | 43,764 | 15,942 | 31,921 |
Stage 2 | 318 | 8,643 | 1,905 | 48 | 35 | 10,631 | 4,006 | 2,038 |
– Strong | 8 | 1,229 | 1,413 | 31 | – | 2,673 | 994 | 471 |
– Satisfactory | 125 | 6,665 | 155 | 6 | – | 6,826 | 2,862 | 1,403 |
– Higher risk | 185 | 749 | 337 | 11 | 35 | 1,132 | 150 | 164 |
Of which (stage 2): | ||||||||
– Less than 30 days past due | – | 55 | 155 | 6 | – | 216 | – | – |
– More than 30 days past due | 2 | 7 | 337 | 11 | – | 355 | – | – |
Stage 3, credit-impa ired | ||||||||
financial assets | 83 | 4,476 | 1,617 | 12 | 98 | 6,203 | 7 | 603 |
Gross balance¹ | 43,609 | 141,865 | 120,537 | 1,443 | 22,091 | 285,936 | 182,529 | 90,632 |
Stage 1 | (10) | (80) | (383) | (20) | – | (483) | (50) | (16) |
– Strong | (7) | (28) | (325) | (18) | – | (371) | (33) | (7) |
– Satisfactory | (3) | (52) | (58) | (2) | – | (112) | (17) | (9) |
Stage 2 | (1) | (303) | (147) | (23) | – | (473) | (52) | (7) |
– Strong | – | (41) | (70) | (14) | – | (125) | (10) | – |
– Satisfactory | (1) | (218) | (32) | (3) | – | (253) | (32) | (4) |
– Higher risk | – | (44) | (45) | (6) | – | (95) | (10) | (3) |
Of which (stage 2): | ||||||||
– Less than 30 days past due | – | (1) | (32) | (3) | – | (36) | – | – |
– More than 30 days past due | – | – | (45) | (6) | – | (51) | – | – |
Stage 3, credit-impa ired | ||||||||
financial assets | (5) | (3,178) | (759) | (11) | – | (3,948) | (1) | (129) |
Total credit impa irment | (16) | (3,561) | (1,289) | (54) | – | (4,904) | (103) | (152) |
Net carrying value | 43,593 | 138,304 | 119,248 | 1,389 | 22,091 | 281,032 | ||
Stage 1 | 0.0% | 0.1% | 0.3% | 1.4% | 0.0% | 0.2% | 0.0% | 0.0% |
– Strong | 0.0% | 0.0% | 0.3% | 1.3% | 0.0% | 0.2% | 0.0% | 0.0% |
– Satisfactory | 0.0% | 0.1% | 1.1% | 12.5% | 0.0% | 0.3% | 0.1% | 0.0% |
Stage 2 | 0.3% | 3.6% | 7.7% | 47.9% | 0.0% | 4.4% | 1.3% | 0.3% |
– Strong | 0.0% | 3.3% | 5.0% | 45.2% | 0.0% | 4.7% | 1.0% | 0.0% |
– Satisfactory | 0.8% | 3.3% | 20.6% | 50.0% | 0.0% | 3.7% | 1.1% | 0.3% |
– Higher risk | 0.0% | 5.9% | 13.4% | 54.5% | 0.0% | 8.4% | 6.7% | 1.8% |
Of which (stage 2): | ||||||||
– Less than 30 days past due | 0.0% | 1.8% | 20.6% | 50.0% | 0.0% | 16.7% | 0.0% | 0.0% |
– More than 30 days past due | 0.0% | 0.0% | 13.4% | 54.5% | 0.0% | 14.4% | 0.0% | 0.0% |
Stage 3, credit-impa ired | ||||||||
financial assets (S3) | 6.0% | 71.0% | 46.9% | 91.7% | 0.0% | 63.6% | 14.3% | 21.4% |
– Stage 3 Collateral | 1 | 297 | 584 | – | – | 881 | – | 46 |
– Stage 3 Cover ratio | ||||||||
(after collateral) | 7.2% | 77.6% | 83.1% | 91.7% | 0.0% | 77.8% | 14.3% | 29.0% |
Cover ratio | 0.0% | 2.5% | 1.1% | 3.7% | 0.0% | 1.7% | 0.1% | 0.2% |
Fair value through profit or loss | ||||||||
Performing | 36,967 | 58,506 | 6 | – | – | 58,512 | – | – |
– Strong | 30,799 | 38,084 | 3 | – | – | 38,087 | – | – |
– Satisfactory | 6,158 | 20,314 | 3 | – | – | 20,317 | – | – |
– Higher risk | 10 | 108 | – | – | – | 108 | – | – |
Defaulted (CG13-14) | – | 13 | – | – | – | 13 | – | – |
Gross balance (FVTPL) 2 | 36,967 | 58,519 | 6 | – | – | 58,525 | – | – |
Net carrying value (incl FVTPL) | 80,560 | 196,823 | 119,254 | 1,389 | 22,091 | 339,557 | – | – |
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $9,660 mill
ion under Customers and of $2,946 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 $51,441 mill
ion under Customers and of $34,754 m
ill
ion under
Banks, held at fair value through profit or loss
Risk review
Risk profile
214
Standard Chartered
– Annual Report 2024
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 | 44,384 | 120,886 | 123,486 | 1,015 | 28,305 | 273,692 | 176,654 | 70,832 |
– Strong | 35,284 | 84,248 | 118,193 | 1,000 | 27,967 | 231,408 | 162,643 | 47,885 |
– Satisfactory | 9,100 | 36,638 | 5,293 | 15 | 338 | 42,284 | 14,011 | 22,947 |
Stage 2 | 540 | 7,902 | 2,304 | 54 | 965 | 11,225 | 5,733 | 2,910 |
– Strong | 55 | 1,145 | 1,761 | 34 | – | 2,940 | 1,090 | 830 |
– Satisfactory | 212 | 5,840 | 206 | 7 | – | 6,053 | 4,169 | 1,823 |
– Higher risk | 273 | 917 | 337 | 13 | 965 | 2,232 | 474 | 257 |
Of which (stage 2): | ||||||||
– Less than 30 days past due | – | 78 | 206 | 7 | – | 291 | – | – |
– More than 30 days past due | – | 10 | 337 | 13 | – | 360 | – | – |
Stage 3, credit-impa ired | ||||||||
financial assets | 77 | 5,508 | 1,484 | 12 | 224 | 7,228 | 3 | 672 |
Gross balance¹ | 45,001 | 134,296 | 127,274 | 1,081 | 29,494 | 292,145 | 182,390 | 74,414 |
Stage 1 | (8) | (101) | (314) | (15) | – | (430) | (52) | (10) |
– Strong | (3) | (34) | (234) | (14) | – | (282) | (31) | (2) |
– Satisfactory | (5) | (67) | (80) | (1) | – | (148) | (21) | (8) |
Stage 2 | (10) | (257) | (141) | (21) | (1) | (420) | (39) | (14) |
– Strong | (1) | (18) | (65) | (14) | – | (97) | (5) | – |
– Satisfactory | (2) | (179) | (22) | (3) | – | (204) | (23) | (7) |
– Higher risk | (7) | (60) | (54) | (4) | (1) | (119) | (11) | (7) |
Of which (stage 2): | ||||||||
– Less than 30 days past due | – | (2) | (22) | (3) | – | (27) | – | – |
– More than 30 days past due | – | (1) | (54) | (4) | – | (59) | – | – |
Stage 3, credit-impa ired | ||||||||
financial assets | (6) | (3,533) | (760) | (12) | (15) | (4,320) | – | (112) |
Total credit impa irment | (24) | (3,891) | (1,215) | (48) | (16) | (5,170) | (91) | (136) |
Net carrying value | 44,977 | 130,405 | 126,059 | 1,033 | 29,478 | 286,975 | – | – |
Stage 1 | 0.0% | 0.1% | 0.3% | 1.5% | 0.0% | 0.2% | 0.0% | 0.0% |
– Strong | 0.0% | 0.0% | 0.2% | 1.4% | 0.0% | 0.1% | 0.0% | 0.0% |
– Satisfactory | 0.1% | 0.2% | 1.5% | 6.7% | 0.0% | 0.4% | 0.1% | 0.0% |
Stage 2 | 1.9% | 3.3% | 6.1% | 38.9% | 0.1% | 3.7% | 0.7% | 0.5% |
– Strong | 1.8% | 1.6% | 3.7% | 41.2% | 0.0% | 3.3% | 0.5% | 0.0% |
– Satisfactory | 0.9% | 3.1% | 10.7% | 42.9% | 0.0% | 3.4% | 0.6% | 0.4% |
– Higher risk | 2.6% | 6.5% | 16.0% | 30.8% | 0.1% | 5.3% | 2.3% | 2.7% |
Of which (stage 2): | ||||||||
– Less than 30 days past due | 0.0% | 2.6% | 10.7% | 42.9% | 0.0% | 9.3% | 0.0% | 0.0% |
– More than 30 days past due | 0.0% | 10.0% | 16.0% | 30.8% | 0.0% | 16.4% | 0.0% | 0.0% |
Stage 3, credit-impa ired | ||||||||
financial assets (S3) | 7.8% | 64.1% | 51.2% | 100.0% | 6.7% | 59.8% | 0.0% | 16.7% |
– Stage 3 Collateral | 2 | 621 | 554 | – | – | 1,175 | – | 34 |
– Stage 3 Cover ratio | ||||||||
(after collateral) | 10.4% | 75.4% | 88.5% | 100.0% | 6.7% | 76.0% | 0.0% | 21.7% |
Cover ratio | 0.1% | 2.9% | 1.0% | 4.4% | 0.1% | 1.8% | 0.0% | 0.2% |
Fair value through profit or loss | ||||||||
Performing | 32,813 | 58,465 | 13 | – | – | 58,478 | – | – |
– Strong | 28,402 | 38,014 | 13 | – | – | 38,027 | – | – |
– Satisfactory | 4,411 | 20,388 | – | – | – | 20,388 | – | – |
– Higher risk | – | 63 | – | – | – | 63 | – | – |
Defaulted (CG13-14) | – | 33 | – | – | – | 33 | – | – |
Gross balance (FVTPL) 2 | 32,813 | 58,498 | 13 | – | – | 58,511 | – | – |
Net carrying value (incl FVTPL) | 77,790 | 188,903 | 126,072 | 1,033 | 29,478 | 345,486 | – | – |
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $13,996 mill
ion under Customers and of $1,738 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 $51,299 mill
ion under Customers and of $30,548 m
ill
ion under
Banks, held at fair value through profit or loss
Risk review and Capital review
Standard Chartered
– Annual Report 2024
215
Loans and advances by client segment credit quality analysis
2024 | ||||||||||
Corporate & Investment Banking and Central & other items | ||||||||||
Gross | Credit impa irment | |||||||||
Regulatory 1 year | S&P external ratings | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
Credit grade | PD range (%) | equivalent | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Strong | 112,265 | 1,229 | – | 113,494 | (28) | (41) | – | (69) | ||
1A-2B | 0 – 0.045 | A+ and above | 32,160 | 31 | – | 32,191 | (2) | – | – | (2) |
3A-4A | 0.046 – 0.110 | A/A– to BBB+/BBB | 40,712 | 524 | – | 41,236 | (8) | (33) | – | (41) |
4B-5B | 0.111 – 0.425 | BBB to BBB-/BB+ | 39,393 | 674 | – | 40,067 | (18) | (8) | – | (26) |
Satisfactory | 38,439 | 6,665 | – | 45,104 | (52) | (218) | – | (270) | ||
6A-7B | 0.426 – 1.350 | BB+/BB to BB- | 24,928 | 2,677 | – | 27,605 | (21) | (24) | – | (45) |
8A-9B | 1.351 – 4.000 | BB-/B+ to B | 9,514 | 2,618 | – | 12,132 | (20) | (169) | – | (189) |
10A-11C | 4.001 – 15.75 | B/B– to B-/CCC+ | 3,997 | 1,370 | – | 5,367 | (11) | (25) | – | (36) |
Higher risk | – | 784 | – | 784 | – | (44) | – | (44) | ||
12 | 15.751 – 99.999 | CCC/C | – | 784 | – | 784 | – | (44) | – | (44) |
Credit- | ||||||||||
impa ired | – | – | 4,574 | 4,574 | – | – | (3,178) | (3,178) | ||
13-14 | 100 | Defaulted | – | – | 4,574 | 4,574 | – | – | (3,178) | (3,178) |
Total | 150,704 | 8,678 | 4,574 | 163,956 | (80) | (303) | (3,178) | (3,561) | ||
2023 | ||||||||||
Strong | 112,215 | 1,145 | – | 113,360 | (34) | (18) | – | (52) | ||
1A-2B | 0 – 0.045 | A+ and above | 37,936 | 81 | – | 38,017 | – | – | – | – |
3A-4A | 0.046 – 0.110 | A/A– to BBB+/BBB | 32,004 | 558 | – | 32,562 | (3) | – | – | (3) |
4B-5B | 0.111 – 0.425 | BBB to BBB-/BB+ | 42,275 | 506 | – | 42,781 | (31) | (18) | – | (49) |
Satisfactory | 36,976 | 5,840 | – | 42,816 | (67) | (179) | – | (246) | ||
6A-7B | 0.426 – 1.350 | BB+/BB to BB- | 24,598 | 1,873 | – | 26,471 | (38) | (77) | – | (115) |
8A-9B | 1.351 – 4.000 | BB-/B+ to B | 8,232 | 2,273 | – | 10,505 | (13) | (90) | – | (103) |
10A-11C | 4.001 – 15.75 | B/B– to B-/CCC+ | 4,146 | 1,694 | – | 5,840 | (16) | (12) | – | (28) |
Higher risk | – | 1,882 | – | 1,882 | – | (61) | – | (61) | ||
12 | 15.751 – 99.999 | CCC/C | – | 1,882 | – | 1,882 | – | (61) | – | (61) |
Credit- | ||||||||||
impa ired | – | – | 5,732 | 5,732 | – | – | (3,548) | (3,548) | ||
13-14 | 100 | Defaulted | – | – | 5,732 | 5,732 | – | – | (3,548) | (3,548) |
Total | 149,191 | 8,867 | 5,732 | 163,790 | (101) | (258) | (3,548) | (3,907) | ||
Risk review
Risk profile
216
Standard Chartered
– Annual Report 2024
Undrawn commitment and financ
ial guarantees – by cl
ient segment credit quality
2024 | ||||||||||
Corporate & Investment Banking and Central & other items | ||||||||||
Notional | Credit impa irment | |||||||||
Regulatory 1 year | S&P external ratings | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
Credit grade | PD range (%) | equivalent | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Strong | 140,733 | 1,265 | – | 141,998 | (22) | (6) | – | (29) | ||
1A-2B | 0 – 0.045 | A+ and above | 29,623 | 280 | – | 29,903 | (1) | – | – | (1) |
3A-4A | 0.046 – 0.110 | A/A– to BBB+/BBB | 53,568 | 492 | – | 54,060 | (4) | – | – | (4) |
4B-5B | 0.111 – 0.425 | BBB to BBB-/BB+ | 57,542 | 493 | – | 58,035 | (17) | (6) | – | (23) |
Satisfactory | 46,394 | 4,200 | – | 50,594 | (23) | (33) | – | (56) | ||
6A-7B | 0.426 – 1.350 | BB+/BB to BB- | 2,544 | 1,065 | – | 3,609 | (4) | (6) | – | (10) |
8A-9B | 1.351 – 4.000 | BB-/B+ to B | 30,438 | 1,162 | – | 31,600 | (11) | (16) | – | (27) |
10A-11C | 4.001 – 15.75 | B/B– to B-/CCC+ | 13,412 | 1,973 | – | 15,385 | (8) | (11) | – | (19) |
Higher risk | – | 286 | – | 286 | – | (11) | – | (11) | ||
12 | 15.751 – 99.999 | CCC+/C | – | 286 | – | 286 | – | (11) | – | (11) |
Credit- | ||||||||||
impa ired | – | – | 593 | 593 | – | – | (129) | (129) | ||
13-14 | 100 | Defaulted | – | – | 593 | 593 | – | – | (129) | (129) |
Total | 187,127 | 5,751 | 593 | 193,471 | (45) | (50) | (129) | (224) | ||
2023 | ||||||||||
Strong | 129,331 | 1,649 | – | 130,980 | (19) | (3) | – | (22) | ||
1A-2B | 0 – 0.045 | A+ and above | 27,882 | 179 | – | 28,061 | (1) | – | – | (1) |
3A-4A | 0.046 – 0.110 | A/A– to BBB+/BBB | 52,061 | 557 | – | 52,618 | (3) | (1) | – | (4) |
4B-5B | 0.111 – 0.425 | BBB to BBB-/BB+ | 49,388 | 913 | – | 50,301 | (15) | (2) | – | (17) |
Satisfactory | 35,405 | 5,921 | – | 41,326 | (23) | (28) | – | (51) | ||
6A-7B | 0.426 – 1.350 | BB+/BB to BB- | 2,581 | 1,065 | – | 3,646 | (2) | (6) | – | (8) |
8A-9B | 1.351 – 4.000 | BB-/B+ to B | 25,089 | 3,028 | – | 28,117 | (14) | (9) | – | (23) |
10A-11C | 4.001 – 15.75 | B/B– to B-/CCC+ | 7,735 | 1,828 | – | 9,563 | (7) | (13) | – | (20) |
Higher risk | – | 697 | – | 697 | – | (15) | – | (15) | ||
12 | 15.751 – 99.999 | CCC+/C | – | 697 | – | 697 | – | (15) | – | (15) |
Credit- | ||||||||||
impa ired | – | – | 663 | 663 | – | – | (112) | (112) | ||
13-14 | 100 | Defaulted | – | – | 663 | 663 | – | – | (112) | (112) |
Total | 164,736 | 8,267 | 663 | 173,666 | (42) | (46) | (112) | (200) | ||
Risk review and Capital review
Standard Chartered
– Annual Report 2024
217
Loans and advances by client segment credit quality analysis by key geography
Corporate & Investment Banking and Central & other items | |||||||||||||||||||
2024 | |||||||||||||||||||
Gross | Credit Impairment | ||||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | ||||||||||||||
Satis- | Satis- | Higher | Satis- | Satis- | Higher | Total | |||||||||||||
Strong | factory | Total | Strong | factory | Risk | Total | Defaulted | Total | Strong | factory | Total | Strong | factory | Risk | Total | Defaulted | Total | Coverage | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | % | |
Hong Kong | 32,552 | 12,079 | 44,631 | 230 | 1,539 | 64 | 1,833 | 1,272 | 1,272 | (8) | (8) | (16) | (33) | (107) | (9) | (149) | (1,157) | (1,157) | (2.8)% |
Corporate Lending | 14,429 | 6,180 | 20,609 | 225 | 1,329 | 64 | 1,618 | 1,260 | 1,260 | (5) | (4) | (9) | (33) | (102) | (9) | (144) | (1,157) | (1,157) | (5.6)% |
Non Corporate | |||||||||||||||||||
Lending 1 | 4,567 | 2,730 | 7,297 | 4 | 206 | – | 210 | 12 | 12 | (1) | (3) | (4) | – | (5) | – | (5) | – | – | (0.1)% |
Banks | 13,556 | 3,169 | 16,725 | 1 | 4 | – | 5 | – | – | (2) | (1) | (3) | – | – | – | – | – | – | (0.0)% |
Singapore | 31,129 | 7,769 | 38,898 | 500 | 955 | 35 | 1,490 | 407 | 407 | – | (8) | (8) | (4) | (14) | – | (18) | (196) | (196) | (0.5)% |
Corporate Lending | 7,333 | 4,003 | 11,336 | 469 | 594 | 35 | 1,098 | 335 | 335 | – | (6) | (6) | (4) | (14) | – | (18) | (195) | (195) | (1.7)% |
Non Corporate | |||||||||||||||||||
Lending 1 | 19,348 | 567 | 19,915 | 29 | 358 | – | 387 | – | – | – | (1) | (1) | – | – | – | – | – | – | (0.0)% |
Banks | 4,448 | 3,199 | 7,647 | 2 | 3 | – | 5 | 72 | 72 | – | (1) | (1) | – | – | – | – | (1) | (1) | (0.0)% |
UK | 11,029 | 3,939 | 14,968 | 48 | 479 | 3 | 530 | 316 | 316 | (10) | (4) | (14) | – | (27) | (6) | (33) | (258) | (258) | (1.9)% |
Corporate Lending | 325 | 871 | 1,196 | 47 | 479 | 1 | 527 | 258 | 258 | (9) | (3) | (12) | – | (27) | (6) | (33) | (237) | (237) (14.2)% | |
Non Corporate | |||||||||||||||||||
Lending 1 | 8,690 | 982 | 9,672 | 1 | – | – | 1 | 57 | 57 | (1) | (1) | (2) | – | – | – | – | (21) | (21) | (0.2)% |
Banks | 2,014 | 2,086 | 4,100 | – | – | 2 | 2 | 1 | 1 | – | – | – | – | – | – | – | – | – | (0.0)% |
US | 16,244 | 4,456 | 20,700 | 92 | 433 | 33 | 558 | 31 | 31 | (4) | (1) | (5) | (1) | (1) | – | (2) | (3) | (3) | (0.0)% |
Corporate Lending | 5,426 | 2,761 | 8,187 | 77 | 322 | – | 399 | 28 | 28 | (3) | (1) | (4) | (1) | (1) | – | (2) | – | – | (0.1)% |
Non Corporate | |||||||||||||||||||
Lending 1 | 9,688 | 123 | 9,811 | 15 | 79 | – | 94 | 3 | 3 | (1) | – | (1) | – | – | – | – | (3) | (3) | (0.0)% |
Banks | 1,130 | 1,572 | 2,702 | – | 32 | 33 | 65 | – | – | – | – | – | – | – | – | – | – | – | (0.0)% |
China | 10,380 | 2,794 | 13,174 | 49 | 133 | 14 | 196 | 171 | 171 | (3) | (1) | (4) | – | – | – | – | (86) | (86) | (0.7)% |
Corporate Lending | 4,933 | 2,193 | 7,126 | 49 | 133 | 14 | 196 | 168 | 168 | (1) | (1) | (2) | – | – | – | – | (83) | (83) | (1.1)% |
Non Corporate | |||||||||||||||||||
Lending 1 | 3,241 | 363 | 3,604 | – | – | – | – | – | – | (1) | – | (1) | – | – | – | – | – | – | (0.0)% |
Banks | 2,206 | 238 | 2,444 | – | – | – | – | 3 | 3 | (1) | – | (1) | – | – | – | – | (3) | (3) | (0.2)% |
Others | 42,171 | 19,370 | 61,541 | 318 | 3,251 | 819 | 4,389 | 2,460 | 2,460 | (10) | (33) | (43) | (3) | (70) | (29) | (102) | (1,483) (1,483) | (2.4)% | |
Corporate Lending | 24,835 | 14,075 | 38,910 | 291 | 2,048 | 516 | 2,855 | 2,221 | 2,221 | (6) | (26) | (32) | (3) | (38) | (28) | (69) | (1,333) | (1,333) | (3.3)% |
Non Corporate | |||||||||||||||||||
Lending 1 | 9,451 | 3,590 | 13,041 | 22 | 1,117 | 153 | 1,292 | 232 | 232 | – | (6) | (6) | – | (31) | (1) | (32) | (149) | (149) | (1.3)% |
Banks | 7,885 | 1,705 | 9,590 | 5 | 86 | 150 | 241 | 7 | 7 | (4) | (1) | (5) | – | (1) | – | (1) | (1) | (1) | (0.1)% |
Total | 143,505 | 50,407 | 193,912 | 1,237 | 6,790 | 968 | 8,996 | 4,657 | 4,657 | (35) | (55) | (90) | (41) | (219) | (44) | (304) | (3,183) | (3,183) | (1.7)% |
Corporate & Investment Banking and Central & other items 2 | |||||||||||||||||||
2023 | |||||||||||||||||||
Gross | Credit Impairment | ||||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | ||||||||||||||
Satis- | Satis- | Higher | Satis- | Satis- | Higher | Total | |||||||||||||
Strong | factory | Total | Strong | factory | Risk | Total | Defaulted | Total | Strong | factory | Total | Strong | factory | Risk | Total | Defaulted | Total | Coverage | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | % | |
Hong Kong | 36,776 | 10,151 | 46,927 | 167 | 937 | 30 | 1,134 | 1,284 | 1,284 | (7) | (23) | (30) | (4) | (118) | (3) | (125) | (1,025) | (1,025) | (2.4)% |
Corporate Lending | 14,401 | 6,289 | 20,690 | 165 | 855 | 30 | 1,050 | 1,219 | 1,219 | (5) | (20) | (25) | (3) | (118) | (3) | (124) | (1,024) | (1,024) | (5.1)% |
Non Corporate | |||||||||||||||||||
Lending 1 | 6,323 | 2,458 | 8,781 | 1 | 81 | – | 82 | 65 | 65 | (1) | (2) | (3) | – | – | – | – | (1) | (1) | (0.0)% |
Banks | 16,052 | 1,404 | 17,456 | 1 | 1 | – | 2 | – | – | (1) | (1) | (2) | (1) | – | – | (1) | – | – | (0.0)% |
Singapore | 34,526 | 6,046 | 40,572 | 361 | 509 | 36 | 906 | 285 | 285 | (4) | (4) | (8) | (11) | (14) | (4) | (29) | (75) | (75) | (0.3)% |
Corporate Lending | 5,766 | 2,334 | 8,100 | 304 | 504 | 36 | 844 | 221 | 221 | (4) | (3) | (7) | (11) | (13) | (4) | (28) | (74) | (74) | (1.2)% |
Non Corporate | |||||||||||||||||||
Lending 1 | 23,033 | 510 | 23,543 | 57 | 2 | – | 59 | – | – | – | (1) | (1) | – | – | – | – | – | – | (0.0)% |
Banks | 5,727 | 3,202 | 8,929 | – | 3 | – | 3 | 64 | 64 | – | – | – | – | (1) | – | (1) | (1) | (1) | (0.0)% |
UK | 8,364 | 4,171 | 12,535 | 56 | 785 | 83 | 924 | 257 | 257 | (5) | (5) | (10) | – | (14) | (7) | (21) | (209) | (209) | (1.7)% |
Corporate Lending | 5,407 | 1,559 | 6,966 | 52 | 539 | 71 | 662 | 250 | 250 | (4) | (5) | (9) | – | (13) | (7) | (20) | (202) | (202) | (2.9)% |
Non Corporate | |||||||||||||||||||
Lending 1 | 558 | 1,244 | 1,802 | – | 160 | – | 160 | 3 | 3 | (1) | – | (1) | – | (1) | – | (1) | (3) | (3) | (0.3)% |
Banks | 2,399 | 1,368 | 3,767 | 4 | 86 | 12 | 102 | 4 | 4 | – | – | – | – | – | – | – | (4) | (4) | (0.1)% |
US | 14,550 | 4,742 | 19,292 | 219 | 176 | 19 | 414 | 5 | 5 | (2) | (2) | (4) | – | – | – | – | (5) | (5) | (0.0)% |
Corporate Lending | 7,487 | 2,765 | 10,252 | 146 | 130 | – | 276 | 1 | 1 | (1) | (2) | (3) | – | – | – | – | (1) | (1) | (0.0)% |
Non Corporate | |||||||||||||||||||
Lending 1 | 6,181 | 425 | 6,606 | 25 | 4 | – | 29 | 4 | 4 | (1) | – | (1) | – | – | – | – | (4) | (4) | (0.1)% |
Banks | 882 | 1,552 | 2,434 | 48 | 42 | 19 | 109 | – | – | – | – | – | – | – | – | – | – | – | (0.0)% |
China | 9,737 | 2,733 | 12,470 | 31 | 298 | 8 | 337 | 262 | 262 | (3) | (4) | (7) | – | – | – | – | (125) | (125) | (1.0)% |
Corporate Lending | 4,723 | 2,179 | 6,902 | 31 | 297 | 8 | 336 | 259 | 259 | (2) | (1) | (3) | – | – | – | – | (125) | (125) | (1.7)% |
Non Corporate | |||||||||||||||||||
Lending 1 | 3,254 | 318 | 3,572 | – | – | – | – | – | – | (1) | – | (1) | – | – | – | – | – | – | (0.0)% |
Banks | 1,760 | 236 | 1,996 | – | 1 | – | 1 | 3 | 3 | – | (3) | (3) | – | – | – | – | – | – | (0.2)% |
Others | 43,547 | 18,233 | 61,780 | 366 | 3,347 | 1,979 | 5,692 | 3,716 | 3,716 | (16) | (34) | (50) | (4) | (35) | (54) | (93) | (2,115) | (2,115) | (3.2)% |
Corporate Lending | 16,189 | 15,034 | 31,223 | 345 | 2,322 | 678 | 3,345 | 3,335 | 3,335 | (8) | (27) | (35) | (3) | (28) | (46) | (77) | (2,012) | (2,012) | (5.6)% |
Non Corporate | |||||||||||||||||||
Lending 1 | 18,894 | 1,861 | 20,755 | 19 | 946 | 1,059 | 2,024 | 375 | 375 | (6) | (6) | (12) | (1) | (6) | (1) | (8) | (102) | (102) | (0.5)% |
Banks | 8,464 | 1,338 | 9,802 | 2 | 79 | 242 | 323 | 6 | 6 | (2) | (1) | (3) | – | (1) | (7) | (8) | (1) | (1) | (0.1)% |
Total | 147,500 | 46,076 | 193,576 | 1,200 | 6,052 | 2,155 | 9,407 | 5,809 | 5,809 | (37) | (72) | (109) | (19) | (181) | (68) | (268) | (3,554) | (3,554) | (1.9)% |
1
Include financing,
insurance and non-banking corporations and governments
2
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
Risk review
Risk profile
218
Standard Chartered
– Annual Report 2024
| Wealth & Retail Banking and Ventures | |||||||||||||||||||
2024 | |||||||||||||||||||
Gross | Credit Impairment | ||||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | ||||||||||||||
Satis- | Satis- | Higher | Satis- | Satis- | Higher | Total | |||||||||||||
Strong | factory | Total | Strong | factory | Risk | Total | Impaired | Total | Strong | factory | Total | Strong | factory | Risk | Total | Impaired | Total | Coverage | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | % | |
Hong Kong | 41,906 | 320 | 42,226 | 288 | 47 | 40 | 375 | 228 | 228 | (59) | (14) | (73) | (33) | (20) | (4) | (57) | (69) | (69) | (0.5)% |
Mortgages | 31,080 | 265 | 31,345 | 55 | 14 | 24 | 93 | 75 | 75 | – | – | – | – | – | – | – | (7) | (7) | (0.0)% |
Credit cards | 4,210 | 19 | 4,229 | 93 | 30 | 1 | 124 | 14 | 14 | (36) | (11) | (47) | (27) | (19) | (1) | (47) | (14) | (14) | (2.5)% |
Others | 6,616 | 36 | 6,652 | 140 | 3 | 15 | 158 | 139 | 139 | (23) | (3) | (26) | (6) | (1) | (3) | (10) | (48) | (48) | (1.2)% |
Singapore | 26,755 | 52 | 26,807 | 441 | 39 | 34 | 514 | 312 | 312 | (29) | (26) | (55) | (6) | (6) | (6) | (18) | (265) | (265) | (1.2)% |
Mortgages | 13,531 | 12 | 13,543 | 160 | 32 | 15 | 207 | 9 | 9 | – | – | – | – | – | – | – | (4) | (4) | (0.0)% |
Credit cards | 2,248 | 25 | 2,273 | 14 | 5 | 16 | 35 | 16 | 16 | (9) | (26) | (35) | (5) | (5) | (4) | (14) | (19) | (19) | (2.9)% |
Others | 10,976 | 15 | 10,991 | 267 | 2 | 3 | 272 | 287 | 287 | (20) | – | (20) | (1) | (1) | (2) | (4) | (242) | (242) | (2.3)% |
Korea | 18,062 | 220 | 18,282 | 378 | 9 | 22 | 409 | 112 | 112 | (22) | (1) | (23) | (28) | (4) | (1) | (33) | (33) | (33) | (0.5)% |
Mortgages | 13,198 | 171 | 13,369 | 250 | 8 | 17 | 275 | 62 | 62 | – | – | – | – | – | – | – | (2) | (2) | (0.0)% |
Credit cards | 36 | 1 | 37 | 1 | – | – | 1 | – | – | (1) | – | (1) | – | – | – | – | – | – | (2.6)% |
Others | 4,828 | 48 | 4,876 | 127 | 1 | 5 | 133 | 50 | 50 | (21) | (1) | (22) | (28) | (4) | (1) | (33) | (31) | (31) | (1.7)% |
Rest of World | 26,085 | 4,998 | 31,083 | 338 | 76 | 241 | 655 | 977 | 977 | (239) | (13) | (252) | (39) | (5) | (18) | (62) | (403) | (403) | (2.2)% |
Mortgages | 15,079 | 2,007 | 17,086 | 136 | 43 | 141 | 320 | 459 | 459 | (4) | (2) | (6) | – | – | (1) | (1) | (124) | (124) | (0.7)% |
Credit cards | 1,148 | 351 | 1,499 | 29 | 12 | 19 | 60 | 40 | 40 | (33) | (1) | (34) | (21) | – | (1) | (22) | (27) | (27) | (5.2)% |
Others | 9,858 | 2,640 | 12,498 | 173 | 21 | 81 | 275 | 478 | 478 | (202) | (10) | (212) | (18) | (5) | (16) | (39) | (252) | (252) | (3.8)% |
Total | 112,808 | 5,590 | 118,398 | 1,445 | 171 | 337 | 1,953 | 1,629 | 1,629 | (349) | (54) | (403) | (106) | (35) | (29) | (170) | (770) | (770) | (1.1)% |
| Wealth & Retail Banking and Ventures 1 | |||||||||||||||||||
2023 | |||||||||||||||||||
Gross | Credit Impairment | ||||||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Stage 1 | Stage 2 | Stage 3 | ||||||||||||||
Satis- | Satis- | Higher | Satis- | Satis- | Higher | Total | |||||||||||||
Strong | factory | Total | Strong | factory | Risk | Total | Impaired | Total | Strong | factory | Total | Strong | factory | Risk | Total | Impaired | Total | Coverage | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | % | |
Hong Kong | 42,930 | 242 | 43,172 | 514 | 74 | 51 | 639 | 174 | 174 | (24) | (34) | (58) | (28) | (13) | (12) | (53) | (49) | (49) | (0.4)% |
Mortgages | 32,376 | 152 | 32,528 | 282 | 53 | 13 | 348 | 63 | 63 | – | – | – | (1) | – | – | (1) | (1) | (1) | (0.0)% |
Credit cards | 4,045 | 44 | 4,089 | 80 | 17 | 24 | 121 | 18 | 18 | (9) | (33) | (42) | (19) | (12) | (8) | (39) | (18) | (18) | (2.3)% |
Others | 6,509 | 46 | 6,555 | 152 | 4 | 14 | 170 | 93 | 93 | (15) | (1) | (16) | (8) | (1) | (4) | (13) | (30) | (30) | (0.9)% |
Singapore | 26,644 | 68 | 26,712 | 379 | 41 | 34 | 454 | 282 | 282 | (15) | (18) | (33) | (2) | (5) | (4) | (11) | (247) | (247) | (1.1)% |
Mortgages | 14,993 | 16 | 15,009 | 230 | 34 | 11 | 275 | 13 | 13 | – | – | – | – | – | – | – | (4) | (4) | (0.0)% |
Credit cards | 1,916 | 25 | 1,941 | 11 | 5 | 16 | 32 | 10 | 10 | (7) | (17) | (24) | – | (5) | (3) | (8) | (16) | (16) | (2.4)% |
Others | 9,735 | 27 | 9,762 | 138 | 2 | 7 | 147 | 259 | 259 | (8) | (1) | (9) | (2) | – | (1) | (3) | (227) | (227) | (2.4)% |
Korea | 22,966 | 211 | 23,177 | 462 | 20 | 9 | 491 | 93 | 93 | (40) | – | (40) | (18) | – | – | (18) | (19) | (19) | (0.3)% |
Mortgages | 16,535 | 164 | 16,699 | 364 | 18 | 8 | 390 | 69 | 69 | – | – | – | – | – | – | – | – | – | (0.0)% |
Credit cards | 113 | 2 | 115 | 3 | – | – | 3 | – | – | (4) | – | (4) | – | – | – | – | – | – | (3.4)% |
Others | 6,318 | 45 | 6,363 | 95 | 2 | 1 | 98 | 24 | 24 | (36) | – | (36) | (18) | – | – | (18) | (19) | (19) | (1.1)% |
Rest of World | 26,653 | 4,787 | 31,440 | 440 | 79 | 256 | 775 | 947 | 947 | (169) | (29) | (198) | (31) | (7) | (42) | (80) | (457) | (457) | (2.2)% |
Mortgages | 14,678 | 2,297 | 16,975 | 156 | 48 | 134 | 338 | 375 | 375 | (5) | (2) | (7) | (2) | – | (1) | (3) | (118) | (118) | (0.7)% |
Credit cards | 1,419 | 68 | 1,487 | 73 | 1 | 15 | 89 | 40 | 40 | (26) | (9) | (35) | (7) | – | (10) | (17) | (16) | (16) | (4.2)% |
Others | 10,556 | 2,422 | 12,978 | 211 | 29 | 107 | 347 | 532 | 532 | (138) | (18) | (156) | (22) | (7) | (31) | (60) | (323) | (323) | (3.9)% |
Total | 119,193 | 5,308 | 124,501 | 1,795 | 213 | 350 | 2,358 | 1,496 | 1,496 | (248) | (81) | (329) | (79) | (25) | (58) | (162) | (772) | (772) | (1.0)% |
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
reported balances.
Undrawn commitment and financ
ial guarantees – by cl
ient segment credit quality
| Wealth & Retail Banking and Ventures | ||||||||
2024 | ||||||||
Notional | ECL | |||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Strong | 70,595 | 100 | – | 70,695 | (15) | (3) | – | (18) |
Satisfactory | 850 | 11 | – | 861 | (5) | (1) | – | (6) |
Higher risk | – | 21 | – | 21 | – | (3) | – | (3) |
Impaired | – | – | 8 | 8 | – | – | – | – |
Total | 71,445 | 132 | 8 | 71,585 | (20) | (7) | – | (27) |
2023 | ||||||||
Notional | ECL | |||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Strong | 73,819 | 160 | – | 73,980 | (15) | (3) | – | (18) |
Satisfactory | 889 | 18 | – | 907 | (5) | (1) | – | (6) |
Higher risk | – | 33 | – | 33 | – | (3) | – | (3) |
Impaired | – | – | 3 | 3 | – | – | – | – |
Total | 74,708 | 211 | 3 | 74,922 | (20) | (7) | – | (27) |
Risk review and Capital review
Standard Chartered
– Annual Report 2024
219
Movement in gross exposures and credit impa
irment for
loans and advances, debt securit
ies, undrawn comm
itments
and financial 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,
financial guarantees and debt secur
it
ies class
if
ied at
amortised cost and FVOCI. The tables are presented for the
Group and separately for CIB and WRB (which also includes a
separate presentation for secured and unsecured exposures).
Methodology
The movement lines 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
ECL, 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 ECL charges. Repayments of
non-amortis
ing loans (pr
imar
ily w
ith
in CIB) w
ill have low
amounts of ECL provis
ions attr
ibuted to them, due to the
release of provis
ions over the term to matur
ity. 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 CG 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 probabil
ity of default (PD), loss g
iven default
(LGD) and exposure at default (EAD) of assets during the
year, which includes the impact of releasing provis
ions over
the term to maturity. It also includes the effect of changes
in forecasts of macroeconomic variables during the year.
In stage 3, this line represents addit
ional spec
if
ic prov
is
ions
recognised 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 incorporate changes to
model approaches and methodologies, are not reported as
a separate line item as these have an impact over a number
of lines and stages.
Movements during the year
Stage 1 gross exposures decreased by $3.2 bill
ion to $721 b
ill
ion
(31 December 2023: $724 bill
ion). CIB exposure
increased by
$30 bill
ion to $367 b
ill
ion (31 December 2023: $337 b
ill
ion),
due to an increase in exposures in financ
ial guarantees
in
the Energy, Financ
ing, Insurance and Transport sectors.
WRB decreased by $11.4 bill
ion to $180 b
ill
ion (31 December
2023: $191 bill
ion), largely dr
iven by fewer mortgages in Korea,
Singapore and Hong Kong, as well as off-balance sheet
commitments. Debt securit
ies decreased by $16.5 b
ill
ion,
largely in the Central and other items segment which had
also seen a $6.3 bill
ion reduct
ion in loan balances.
Total stage 1 provis
ions
increased by $56 mill
ion to $582 m
ill
ion
(31 December 2023: $526 mill
ion). CIB prov
is
ions decreased
by $18 mill
ion to $133 m
ill
ion (31 December 2023: $151 m
ill
ion),
due to a release in the China CRE overlay which was driven
by repayments and portfolio movements. This was partly
offset by new overlays of $27 mill
ion, pr
imar
ily
in Bangladesh.
WRB provis
ions
increased by $67 mill
ion to $392 m
ill
ion
(31 December 2023: $325 mill
ion), due to del
inquenc
ies
in
the personal loans and unsecured lending portfolio.
Stage 2 gross exposures decreased by $4 bill
ion to $19 b
ill
ion
(31 December 2023: $22 bill
ion), pr
imar
ily dr
iven by a net
reduction in CIB exposures from off-balance sheet
instruments. WRB exposures decreased by $0.4 bill
ion to
$2 bill
ion (31 December 2023: $2.5 b
ill
ion), ma
inly due to the
mortgage portfolio.
Stage 2 provis
ions
increased by $20 mill
ion to $537 m
ill
ion
(31 December 2023: $517 mill
ion). CIB prov
is
ions
increased by
$44 mill
ion to $362 m
ill
ion (31 December 2023: $318 m
ill
ion),
due to $76 mill
ion new overlays, largely
in Hong Kong, and
portfolio movements. This was offset by China CRE overlay
releases, which were driven by repayments. WRB provis
ions
increased by $11 mill
ion to $151 m
ill
ion (31 December 2023:
$140 mill
ion) ma
inly driven by the overlay in Korea due
to the settlement failure of two e-commerce platforms.
Debt securit
ies pr
imar
ily held
in the Central and other items
segment decreased by $31 mill
ion, due to sovere
ign upgrades.
The impact of model and methodology updates in 2024
reduced modelled provis
ions by $15 m
ill
ion across stages 1, 2
and 3 in WRB.
Stage 3 gross exposures for CIB decreased by $1.1 bill
ion to
$5.2 bill
ion (31 December 2023: $6.3 b
ill
ion) due to repayments
and write-offs. CIB provis
ions decreased by $0.3 b
ill
ion to
$3.3 bill
ion (31 December 2023: $3.7 b
ill
ion), due to releases
from repayments and write-offs. WRB stage 3 loans
remained broadly stable at $1.6 bill
ion (31 December 2023:
$1.5 bill
ion) and prov
is
ions also rema
ined stable at $0.8 bill
ion
(31 December 2023: $0.8 bill
ion). The amount of stage 3
exposures written off during the year that remain subject
to enforcement activ
ity
is $1.2 bill
ion (31 December 2023:
$1 bill
ion).
Risk review
Risk profile
220
Standard Chartered
– Annual Report 2024
All segments (audited)
Stage 1 | Stage 2 | Stage 3⁵ | Total | |||||||||
Total | Total | Total | Total | |||||||||
credit | credit | credit | credit | |||||||||
Gross | impa ir- | Gross | impa ir- | Gross | impa ir- | Gross | impa ir- | |||||
Amortised cost | balance 3 | ment | Net | balance 3 | ment | Net | balance 3 | ment | Net | balance 3 | ment | Net |
and 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 | 720,112 | (645) | 719,467 | 27,479 | (618) | 26,861 | 8,841 | (4,724) | 4,117 | 756,432 | (5,987) | 750,445 |
Transfers to stage 1 | 19,594 | (661) | 18,933 | (19,583) | 661 | (18,922) | (11) | – | (11) | – | – | – |
Transfers to stage 2 | (42,628) | 174 | (42,454) | 42,793 | (182) | 42,611 | (165) | 8 | (157) | – | – | – |
Transfers to stage 3 | (96) | 6 | (90) | (2,329) | 326 | (2,003) | 2,425 | (332) | 2,093 | – | – | – |
Net change in | ||||||||||||
exposures | 23,717 | (185) | 23,532 | (22,727) | 22 | (22,705) | (1,708) | 624 | (1,084) | (718) | 461 | (257) |
Net remeasurement | ||||||||||||
from stage changes | – | 52 | 52 | – | (199) | (199) | – | (163) | (163) | – | (310) | (310) |
Changes in risk | ||||||||||||
parameters | – | 202 | 202 | – | (32) | (32) | – | (1,100) | (1,100) | – | (930) | (930) |
Write-offs | – | – | – | – | – | – | (1,027) | 1,027 | – | (1,027) | 1,027 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | (83) | 83 | – | (83) | 83 | – |
Discount unwind | – | – | – | – | – | – | – | 180 | 180 | – | 180 | 180 |
Exchange translation | ||||||||||||
differences and | ||||||||||||
other movements¹ | 3,177 | 531 | 3,708 | (3,365) | (495) | (3,860) | (128) | (102) | (230) | (316) | (66) | (382) |
As at 31 December | ||||||||||||
2023² | 723,876 | (526) 723,350 | 22,268 | (517) | 21,751 | 8,144 | (4,499) | 3,645 | 754,288 | (5,542) 748,746 | ||
Income statement | ||||||||||||
ECL (charge)/release | 69 | (209) | (639) | (779) | ||||||||
Recoveries of | ||||||||||||
amounts previously | ||||||||||||
written off | – | – | 271 | 271 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release | 69 | (209) | (368) | (508) | ||||||||
As at 1 January 2024 | 723,876 | (526) 723,350 | 22,268 | (517) | 21,751 | 8,144 | (4,499) | 3,645 | 754,288 | (5,542) 748,746 | ||
Transfers to stage 1 | 16,433 | (543) | 15,890 | (16,423) | 543 | (15,880) | (10) | – | (10) | – | – | – |
Transfers to stage 2 | (33,301) | 128 | (33,173) | 33,770 | (153) | 33,617 | (469) | 25 | (444) | – | – | – |
Transfers to stage 3 | (1,631) | 63 | (1,568) | (146) | 168 | 22 | 1,777 | (231) | 1,546 | – | – | – |
Net change in | ||||||||||||
exposures | 29,928 | (173) | 29,755 | (18,435) | 80 | (18,355) | (1,383) | 622 | (761) | 10,110 | 529 | 10,639 |
Net remeasurement | ||||||||||||
from stage changes | – | 61 | 61 | – | (185) | (185) | – | (203) | (203) | – | (327) | (327) |
Changes in risk | ||||||||||||
parameters | – | 84 | 84 | – | (242) | (242) | – | (873) | (873) | – | (1,031) | (1,031) |
Derecognised | – | – | – | – | – | – | – | – | – | – | – | – |
Write-offs | – | – | – | – | – | – | (1,260) | 1,260 | – | (1,260) | 1,260 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | 53 | (53) | – | 53 | (53) | – |
Discount unwind | – | – | – | – | – | – | – | 135 | 135 | – | 135 | 135 |
Exchange translation | ||||||||||||
differences and | ||||||||||||
other movements¹ | (14,626) | 324 | (14,302) | (2,427) | (231) | (2,658) | 147 | (268) | (121) | (16,906) | (175) | (17,081) |
As at 31 December | ||||||||||||
2024² | 720,679 | (582)720,097 | 18,607 | (537) | 18,070 | 6,999 | (4,085) | 2,914 | 746,285 | (5,204) 741,081 | ||
Income statement | ||||||||||||
ECL (charge)/release⁶ | (28) | (347) | (454) | (829) | ||||||||
Recoveries of | ||||||||||||
amounts previously | ||||||||||||
written off | – | – | 279 | 279 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release 4 | (28) | (347) | (175) | (550) | ||||||||
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 balances of $101,755 mill
ion (31 December 2023:
$111,478 mill
ion) and Total cred
it impa
irment of $63 m
ill
ion (31 December 2023: $59 m
ill
ion)
3
The gross balance includes the notional amount of off balance sheet instruments
4 Reported basis
5
Stage 3 gross includes $59 mill
ion (31 December 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 (31 December 2023:
$14 mill
ion)
6
Does not include release relating to Other assets of $3 mill
ion (31 December 2023: N
il)
Risk review and Capital review
Standard Chartered
– Annual Report 2024
221
Corporate & Investment Banking (audited)
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Total | Total | Total | Total | |||||||||
credit | credit | credit | credit | |||||||||
Gross | impa ir- | Gross | impa ir- | Gross | impa ir- | Gross | impa ir- | |||||
Amortised cost | balance 1 | ment | Net | balance 1 | ment | Net | balance 1 | ment | Net | balance 1 | ment | Net |
and 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 | 315,437 | (194) | 315,243 | 20,148 | (411) | 19,737 | 6,994 | (3,822) | 3,172 | 342,579 | (4,427) | 338,152 |
Transfers to stage 1 | 14,948 | (347) | 14,601 | (14,948) | 347 | (14,601) | – | – | – | – | – | – |
Transfers to stage 2 | (34,133) | 80 | (34,053) | 34,175 | (88) | 34,087 | (42) | 8 | (34) | – | – | – |
Transfers to stage 3 | (17) | – | (17) | (1,270) | 141 | (1,129) | 1,287 | (141) | 1,146 | – | – | – |
Net change in | ||||||||||||
exposures | 41,314 | (73) | 41,241 | (20,084) | 89 | (19,995) | (1,335) | 623 | (712) | 19,895 | 639 | 20,534 |
Net remeasurement | ||||||||||||
from stage changes | – | 15 | 15 | – | (45) | (45) | – | (82) | (82) | – | (112) | (112) |
Changes in risk | ||||||||||||
parameters | – | 60 | 60 | – | (68) | (68) | – | (668) | (668) | – | (676) | (676) |
Write-offs | – | – | – | – | – | – | (340) | 340 | – | (340) | 340 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | (120) | 120 | – | (120) | 120 | – |
Discount unwind | – | – | – | – | – | – | – | 155 | 155 | – | 155 | 155 |
Exchange translation | ||||||||||||
differences and | ||||||||||||
other movements | (360) | 308 | (52) | (1,148) | (283) | (1,431) | (188) | (184) | (372) | (1,696) | (159) | (1,855) |
As at 31 December | ||||||||||||
2023 | 337,189 | (151) 337,038 | 16,873 | (318) | 16,555 | 6,256 | (3,651) | 2,605 | 360,318 | (4,120) | 356,198 | |
Income statement | ||||||||||||
ECL (charge)/release | 2 | (24) | (127) | (149) | ||||||||
Recoveries of | ||||||||||||
amounts previously | ||||||||||||
written off | – | – | 31 | 31 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release | 2 | (24) | (96) | (118) | ||||||||
As at 1 January 2024 | 337,189 | (151) 337,038 | 16,873 | (318) | 16,555 | 6,256 | (3,651) | 2,605 | 360,318 | (4,120) 356,198 | ||
Transfers to stage 1 | 10,390 | (245) | 10,145 | (10,390) | 245 | (10,145) | – | – | – | – | – | – |
Transfers to stage 2 | (25,698) | 47 | (25,651) | 25,810 | (58) | 25,752 | (112) | 11 | (101) | – | – | – |
Transfers to stage 3 | (186) | (4) | (190) | (186) | 22 | (164) | 372 | (18) | 354 | – | – | – |
Net change in | ||||||||||||
exposures | 50,866 | (50) | 50,816 | (16,508) | 88 | (16,420) | (1,063) | 607 | (456) | 33,295 | 645 | 33,940 |
Net remeasurement | ||||||||||||
from stage changes | – | 16 | 16 | (4) | (36) | (40) | – | (100) | (100) | (4) | (120) | (124) |
Changes in risk | ||||||||||||
parameters | – | 29 | 29 | – | (129) | (129) | – | (336) | (336) | – | (436) | (436) |
Derecognised | – | – | – | – | – | – | – | – | – | – | – | – |
Write-offs | – | – | – | – | – | – | (321) | 321 | – | (321) | 321 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | 25 | (25) | – | 25 | (25) | – |
Discount unwind | – | – | – | – | – | – | – | 104 | 104 | – | 104 | 104 |
Exchange translation | ||||||||||||
differences and | ||||||||||||
other movements | (5,455) | 225 | (5,230) | (726) | (176) | (902) | 13 | (225) | (212) | (6,168) | (176) | (6,344) |
As at 31 December | ||||||||||||
2024 | 367,106 | (133) 366,973 | 14,869 | (362) | 14,507 | 5,170 | (3,312) | 1,858 | 387,145 | (3,807) 383,338 | ||
Income statement | ||||||||||||
ECL (charge)/release | (5) | (77) | 171 | 89 | ||||||||
Recoveries of | ||||||||||||
amounts previously | ||||||||||||
written off | – | – | 26 | 26 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release | (5) | (77) | 197 | 115 | ||||||||
1
The gross balance includes the notional amount of off balance sheet instruments
Risk review
Risk profile
222
Standard Chartered
– Annual Report 2024
Wealth & Retail Banking (audited)
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Total | Total | Total | Total | |||||||||
credit | credit | credit | credit | |||||||||
Gross | impa ir- | Gross | impa ir- | Gross | impa ir- | Gross | impa ir- | |||||
Amortised cost | balance 1 | ment | Net | balance 1 | ment | Net | balance 1 | ment | Net | balance 1 | ment | Net |
and 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 | 193,239 | (413) | 192,826 | 1,821 | (118) | 1,703 | 1,454 | (776) | 678 | 196,514 | (1,307) 195,207 | |
Transfers to stage 1 | 4,265 | (246) | 4,019 | (4,254) | 246 | (4,008) | (11) | – | (11) | – | – | – |
Transfers to stage 2 | (7,544) | 73 | (7,471) | 7,667 | (73) | 7,594 | (123) | – | (123) | – | – | – |
Transfers to stage 3 | (64) | 1 | (63) | (1,049) | 187 | (862) | 1,113 | (188) | 925 | – | – | – |
Net change in | ||||||||||||
exposures | 1,965 | (78) | 1,887 | (1,713) | 14 | (1,699) | (395) | – | (395) | (143) | (64) | (207) |
Net remeasurement | ||||||||||||
from stage changes | – | 31 | 31 | – | (137) | (137) | – | (38) | (38) | – | (144) | (144) |
Changes in risk | ||||||||||||
parameters | – | 110 | 110 | – | (69) | (69) | – | (426) | (426) | – | (385) | (385) |
Write-offs | – | – | – | – | – | – | (649) | 649 | – | (649) | 649 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | 37 | (37) | – | 37 | (37) | – |
Discount unwind | – | – | – | – | – | – | – | 24 | 24 | – | 24 | 24 |
Exchange translation | ||||||||||||
differences and other | ||||||||||||
movements | (862) | 197 | (665) | – | (190) | (190) | 59 | 33 | 92 | (803) | 40 | (763) |
As at 31 December | ||||||||||||
2023 | 190,999 | (325) | 190,674 | 2,472 | (140) | 2,332 | 1,485 | (759) | 726 | 194,956 | (1,224) | 193,732 |
Income statement | ||||||||||||
ECL (charge)/release | 63 | (192) | (464) | (593) | ||||||||
Recoveries of | ||||||||||||
amounts previously | ||||||||||||
written off | – | – | 239 | 239 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release | 63 | (192) | (225) | (354) | ||||||||
As at 1 January 2024 | 190,999 | (325) 190,674 | 2,472 | (140) | 2,332 | 1,485 | (759) | 726 | 194,956 | (1,224) 193,732 | ||
Transfers to stage 1 | 5,126 | (288) | 4,838 | (5,116) | 288 | (4,828) | (10) | – | (10) | – | – | – |
Transfers to stage 2 | (7,393) | 80 | (7,313) | 7,525 | (80) | 7,445 | (132) | – | (132) | – | – | – |
Transfers to stage 3 | (98) | 1 | (97) | (1,254) | 211 | (1,043) | 1,352 | (212) | 1,140 | – | – | – |
Net change in | ||||||||||||
exposures | (3,926) | (89) | (4,015) | (1,505) | 21 | (1,484) | (431) | – | (431) | (5,862) | (68) | (5,930) |
Net remeasurement | ||||||||||||
from stage changes | – | 29 | 29 | – | (144) | (144) | – | (44) | (44) | – | (159) | (159) |
Changes in risk | ||||||||||||
parameters | – | 19 | 19 | – | (152) | (152) | – | (537) | (537) | – | (670) | (670) |
Write-offs | – | – | – | – | – | – | (808) | 808 | – | (808) | 808 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | 28 | (28) | – | 28 | (28) | – |
Discount unwind | – | – | – | – | – | – | – | 30 | 30 | – | 30 | 30 |
Exchange translation | ||||||||||||
differences and | ||||||||||||
other movements | (5,128) | 181 | (4,947) | (92) | (155) | (247) | 139 | (16) | 123 | (5,081) | 10 | (5,071) |
As at 31 December | ||||||||||||
2024 | 179,580 | (392) | 179,188 | 2,030 | (151) | 1,879 | 1,623 | (758) | 865 | 183,233 | (1,301) | 181,932 |
Income statement | ||||||||||||
ECL (charge)/release | (41) | (275) | (581) | (897) | ||||||||
Recoveries of | ||||||||||||
amounts previously | ||||||||||||
written off | – | – | 253 | 253 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release | (41) | (275) | (328) | (644) | ||||||||
1
The gross balance includes the notional amount of off-balance sheet instruments
Risk review and Capital review
Standard Chartered
– Annual Report 2024
223
Wealth & Retail Banking – Secured (audited)
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Total | Total | Total | Total | |||||||||
credit | credit | credit | credit | |||||||||
Gross | impa ir- | Gross | impa ir- | Gross | impa ir- | Gross | impa ir- | |||||
Amortised cost | balance 1 | ment | Net | balance 1 | ment | Net | balance 1 | ment | Net | balance 1 | ment | Net |
and 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 | 135,362 | (60) 135,302 | 1,413 | (17) | 1,396 | 1,028 | (552) | 476 | 137,803 | (629) | 137,174 | |
Transfers to stage 1 | 3,311 | (20) | 3,291 | (3,302) | 20 | (3,282) | (9) | – | (9) | – | – | – |
Transfers to stage 2 | (5,340) | 11 | (5,329) | 5,436 | (9) | 5,427 | (96) | (2) | (98) | – | – | – |
Transfers to stage 3 | (28) | 1 | (27) | (463) | 1 | (462) | 491 | (2) | 489 | – | – | – |
Net change in | ||||||||||||
exposures | (3,138) | (16) | (3,154) | (1,250) | 3 | (1,247) | (216) | – | (216) | (4,604) | (13) | (4,617) |
Net remeasurement | ||||||||||||
from stage changes | – | 4 | 4 | – | (16) | (16) | – | (3) | (3) | – | (15) | (15) |
Changes in risk | ||||||||||||
parameters | – | 22 | 22 | – | 24 | 24 | – | (110) | (110) | – | (64) | (64) |
Write-offs | – | – | – | – | – | – | (109) | 109 | – | (109) | 109 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | (3) | 3 | – | (3) | 3 | – |
Discount unwind | – | – | – | – | – | – | – | 12 | 12 | – | 12 | 12 |
Exchange translation | ||||||||||||
differences and | ||||||||||||
other movements | (369) | 25 | (344) | (7) | (22) | (29) | (24) | 20 | (4) | (400) | 23 | (377) |
As at 31 December | ||||||||||||
2023 | 129,798 | (33) | 129,765 | 1,827 | (16) | 1,811 | 1,062 | (525) | 537 | 132,687 | (574) | 132,113 |
Income statement | ||||||||||||
ECL (charge)/release | 10 | 11 | (113) | (92) | ||||||||
Recoveries of | ||||||||||||
amounts previously | ||||||||||||
written off | – | – | 68 | 68 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release | 10 | 11 | (45) | (24) | ||||||||
As at 1 January 2024 | 129,798 | (33) 129,765 | 1,827 | (16) | 1,811 | 1,062 | (525) | 537 | 132,687 | (574) | 132,113 | |
Transfers to stage 1 | 3,839 | (23) | 3,816 | (3,836) | 23 | (3,813) | (3) | – | (3) | – | – | – |
Transfers to stage 2 | (4,952) | 13 | (4,939) | 5,054 | (13) | 5,041 | (102) | – | (102) | – | – | – |
Transfers to stage 3 | (43) | – | (43) | (566) | 19 | (547) | 609 | (19) | 590 | – | – | – |
Net change in | ||||||||||||
exposures | 2,570 | (11) | 2,559 | (917) | 8 | (909) | (268) | – | (268) | 1,385 | (3) | 1,382 |
Net remeasurement | ||||||||||||
from stage changes | – | 6 | 6 | – | (15) | (15) | – | (7) | (7) | – | (16) | (16) |
Changes in risk | ||||||||||||
parameters | – | (6) | (6) | – | (6) | (6) | – | (129) | (129) | – | (141) | (141) |
Write-offs | – | – | – | – | – | – | (114) | 114 | – | (114) | 114 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | 53 | (53) | – | 53 | (53) | – |
Discount unwind | – | – | – | – | – | – | – | 16 | 16 | – | 16 | 16 |
Exchange translation | ||||||||||||
differences and | ||||||||||||
other movements | (4,496) | 6 | (4,490) | (57) | (31) | (88) | (33) | 47 | 14 | (4,586) | 22 | (4,564) |
As at 31 December | ||||||||||||
2024 | 126,716 | (48) 126,668 | 1,505 | (31) | 1,474 | 1,204 | (556) | 648 | 129,425 | (635) 128,790 | ||
Income statement | ||||||||||||
ECL (charge)/release | (11) | (13) | (136) | (160) | ||||||||
Recoveries of | ||||||||||||
amounts previously | ||||||||||||
written off | – | – | 80 | 80 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release | (11) | (13) | (56) | (80) | ||||||||
1
The gross balance includes the notional amount of off balance sheet instruments
Risk review
Risk profile
224
Standard Chartered
– Annual Report 2024
Wealth & Retail Banking – Unsecured (audited)
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Total | Total | Total | Total | |||||||||
credit | credit | credit | credit | |||||||||
Retail Banking | Gross | impa ir- | Gross | impa ir- | Gross | impa ir- | Gross | impa ir- | ||||
Amortised cost | balance 1 | ment | Net | balance 1 | ment | Net | balance 1 | ment | Net | balance 1 | ment | Net |
and 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 | 57,877 | (353) | 57,524 | 408 | (101) | 307 | 426 | (224) | 202 | 58,711 | (678) | 58,033 |
Transfers to stage 1 | 954 | (226) | 728 | (952) | 226 | (726) | (2) | – | (2) | – | – | – |
Transfers to stage 2 | (2,204) | 62 | (2,142) | 2,231 | (64) | 2,167 | (27) | 2 | (25) | – | – | – |
Transfers to stage 3 | (36) | – | (36) | (586) | 186 | (400) | 622 | (186) | 436 | – | – | – |
Net change in | ||||||||||||
exposures | 5,103 | (62) | 5,041 | (463) | 11 | (452) | (179) | – | (179) | 4,461 | (51) | 4,410 |
Net remeasurement | ||||||||||||
from stage changes | – | 27 | 27 | – | (121) | (121) | – | (35) | (35) | – | (129) | (129) |
Changes in risk | ||||||||||||
parameters | – | 88 | 88 | – | (93) | (93) | – | (316) | (316) | – | (321) | (321) |
Write-offs | – | – | – | – | – | – | (540) | 540 | – | (540) | 540 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | 40 | (40) | – | 40 | (40) | – |
Discount unwind | – | – | – | – | – | – | – | 12 | 12 | – | 12 | 12 |
Exchange | ||||||||||||
translation | ||||||||||||
differences and | ||||||||||||
other movements | (493) | 172 | (321) | 7 | (168) | (161) | 83 | 13 | 96 | (403) | 17 | (386) |
As at 31 December | ||||||||||||
2023 | 61,201 | (292) | 60,909 | 645 | (124) | 521 | 423 | (234) | 189 | 62,269 | (650) | 61,619 |
Income statement | ||||||||||||
ECL (charge)/release | 53 | (203) | (351) | (501) | ||||||||
Recoveries of | ||||||||||||
amounts previously | ||||||||||||
written off | – | – | 171 | 171 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release | 53 | (203) | (180) | (330) | ||||||||
As at 1 January | ||||||||||||
2024 | 61,201 | (292) | 60,909 | 645 | (124) | 521 | 423 | (234) | 189 | 62,269 | (650) | 61,619 |
Transfers to stage 1 | 1,287 | (265) | 1,022 | (1,280) | 265 | (1,015) | (7) | – | (7) | – | – | – |
Transfers to stage 2 | (2,441) | 67 | (2,374) | 2,471 | (67) | 2,404 | (30) | – | (30) | – | – | – |
Transfers to stage 3 | (55) | 1 | (54) | (688) | 192 | (496) | 743 | (193) | 550 | – | – | – |
Net change in | ||||||||||||
exposures | (6,496) | (78) | (6,574) | (588) | 13 | (575) | (163) | – | (163) | (7,247) | (65) | (7,312) |
Net remeasurement | ||||||||||||
from stage changes | – | 23 | 23 | – | (129) | (129) | – | (37) | (37) | – | (143) | (143) |
Changes in risk | ||||||||||||
parameters | – | 25 | 25 | – | (146) | (146) | – | (408) | (408) | – | (529) | (529) |
Write-offs | – | – | – | – | – | – | (694) | 694 | – | (694) | 694 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | (25) | 25 | – | (25) | 25 | – |
Discount unwind | – | – | – | – | – | – | – | 14 | 14 | – | 14 | 14 |
Exchange | ||||||||||||
translation | ||||||||||||
differences and | ||||||||||||
other movements | (632) | 175 | (457) | (35) | (124) | (159) | 172 | (63) | 109 | (495) | (12) | (507) |
As at 31 December | ||||||||||||
2024 | 52,864 | (344) | 52,520 | 525 | (120) | 405 | 419 | (202) | 217 | 53,808 | (666) | 53,142 |
Income statement | ||||||||||||
ECL (charge)/release | (30) | (262) | (445) | (737) | ||||||||
Recoveries of | ||||||||||||
amounts previously | ||||||||||||
written off | – | – | 172 | 172 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release | (30) | (262) | (273) | (565) |
1
The gross balance includes the notional amount of off balance sheet instruments
Risk review and Capital review
Standard Chartered
– Annual Report 2024
225
Analysis of stage 2 balances
The table below analyses total stage 2 gross on-and off-balance sheet exposures and associated expected credit provis
ions
by the key SICR driver that caused the exposures to be classif
ied as stage 2 as at 31 December 2024 and 31 December 2023 for
each segment.
Where multiple drivers apply, the exposure is allocated based on the table order. For example, a loan may have breached
the PD thresholds and could also be on non-purely precautionary early alert; in this instance, the exposure is reported under
‘Increase in PD’.
Further details can be found in the ‘Summary of Credit Risk performance’ section on
page 207
.
2024 | |||||||||||||||
| Corporate & | Wealth & | ||||||||||||||
| Investment Banking | Retail Banking | Ventures | Central & other items 1 | Total | |||||||||||
Gross | ECL | Coverage | Gross | ECL | Coverage | Gross | ECL | Coverage | Gross | ECL | Coverage | Gross | ECL | Coverage | |
$mill ion | $mill ion | % | $mill ion | $mill ion | % | $mill ion | $mill ion | % | $mill ion | $mill ion | % | $mill ion | $mill ion | % | |
Increase in PD | 8,465 | 112 | 1.3% | 1,366 | 104 | 7.6% | 48 | 20 | 31.3% | 154 | – | 0.0% | 10,033 | 236 | 2.4% |
Non-purely | |||||||||||||||
precautionary early alert | 3,473 | 44 | 1.3% | 30 | – | 0.0% | – | – | 0.0% | – | – | 0.0% | 3,503 | 44 | 1.3% |
Higher risk (CG12) | 686 | 24 | 3.5% | 18 | – | 0.0% | – | – | 0.0% | 1,488 | 1 | 0.4% | 2,192 | 25 | 1.1% |
Top up/Sell down | |||||||||||||||
(Private Banking) | – | – | 0.0% | 254 | 1 | 0.4% | – | – | 0.0% | – | – | 0.0% | 254 | 1 | 0.4% |
Others | 2,245 | 25 | 1.1% | 150 | 5 | 3.3% | – | – | 0.0% | 482 | – | 0.0% | 2,877 | 30 | 1.0% |
30 days past due | – | – | 0.0% | 212 | 19 | 9.0% | 6 | 4 | 66.7% | – | – | 0.0% | 218 | 23 | 10.6% |
Management overlay | – | 157 | 0.0% | – | 22 | 0.0% | – | 3 | 0.0% | – | – | 0.0% | – | 182 | 0.0% |
Total stage 2 | 14,869 | 362 | 2.4% | 2,030 | 151 | 7.4% | 54 | 27 | 40.7% | 2,124 | 1 | 0.3% | 19,077 | 541 | 2.8% |
| 2023 | |||||||||||||||
Increase in PD | 8,262 | 75 | 0.9% | 1,962 | 109 | 5.6% | 96 | 23 | 24.0% | 599 | 13 | 2.2% | 10,919 | 220 | 2.0% |
Non-purely | |||||||||||||||
precautionary early alert | 5,136 | 26 | 0.5% | 37 | – | 0.0% | – | – | 0.0% | – | – | 0.0% | 5,173 | 26 | 0.5% |
Higher risk (CG12) | 1,008 | 56 | 5.6% | 26 | 1 | 3.8% | – | – | 0.0% | 2,020 | 17 | 0.8% | 3,054 | 74 | 2.4% |
Top up/Sell down | |||||||||||||||
(Private Banking) | – | – | 0.0% | 148 | 2 | 1.4% | – | – | 0.0% | – | – | 0.0% | 148 | 2 | 1.7% |
Others | 2,467 | 37 | 1.5% | 151 | 16 | 10.6% | – | – | 0.0% | 489 | – | 0.0% | 3,107 | 53 | 1.7% |
30 days past due | – | – | 0.0% | 148 | 12 | 8.1% | 2 | – | 0.0% | – | – | 0.0% | 150 | 12 | 7.7% |
Management overlay | – | 124 | 0.0% | – | – | 0.0% | – | – | 0.0% | – | 17 | 0.0% | – | 141 | 0.0% |
Total stage 2 | 16,873 | 318 | 1.9% | 2,472 | 140 | 5.7% | 98 | 23 | 23.5% | 3,108 | 47 | 1.5% | 22,551 | 528 | 2.3% |
1
Includes Gross and ECL for Cash and balances at central banks and Assets held for sale
Risk review
Risk profile
226
Standard Chartered
– Annual Report 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 on
page 207
.
| 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 | 81 | (187) | (106) | 11 | 112 | 123 |
Wealth & Retail Banking | 317 | 327 | 644 | 129 | 225 | 354 |
Ventures | 10 | 64 | 74 | 42 | 43 | 85 |
Central & other items | (37) | (18) | (55) | (44) | 10 | (34) |
Credit impa irment charge/(release) | 371 | 186 | 557 | 138 | 390 | 528 |
Restructuring business portfolio | ||||||
Others | 1 | (11) | (10) | 1 | (21) | (20) |
Credit impa irment charge/(release) | 1 | (11) | (10) | 1 | (21) | (20) |
Total credit impa irment | ||||||
charge/(release) | 372 | 175 | 547 | 139 | 369 | 508 |
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 $221 mill
ion to $784 m
ill
ion (31 December 2023: $1 b
ill
ion), ma
inly due to repayments in CIB
non-performing forborne loans. Net non-performing forborne loans decreased by $235 mill
ion to $732 m
ill
ion (31 December
2023: $967 mill
ion), wh
ich was partly offset by a $17 mill
ion
increase in CIB performing forborne loans.
2024 | 2023 | |||||
Corporate & | Corporate & | |||||
Investment | Wealth & | Investment | Wealth & | |||
Banking | Retail Banking | Total | Banking | Retail Banking | Total | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Gross stage 1 and 2 forborne loans | 17 | 36 | 53 | – | 40 | 40 |
Modif icat ion of terms and condit ions 1 | 17 | 36 | 53 | – | 40 | 40 |
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 | 35 | 52 | – | 38 | 38 |
Collateral | – | 27 | 27 | – | 31 | 31 |
Gross stage 3 forborne loans | 2,065 | 258 | 2,323 | 2,340 | 274 | 2,614 |
Modif icat ion of terms and condit ions 1 | 1,824 | 258 | 2,082 | 2,113 | 274 | 2,387 |
Refinancing 2 | 241 | – | 241 | 227 | – | 227 |
Impairment provis ions | (1,481) | (110) | (1,591) | (1,529) | (118) | (1,647) |
Modif icat ion of terms and condit ions 1 | (1,242) | (110) | (1,352) | (1,337) | (118) | (1,454) |
Refinancing 2 | (239) | – | (239) | (192) | – | (192) |
Net stage 3 forborne loans | 584 | 148 | 732 | 811 | 156 | 967 |
Collateral | 172 | 55 | 227 | 341 | 49 | 390 |
Net carrying value of forborne loans | 601 | 183 | 784 | 811 | 194 | 1,005 |
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 borrower in credit stress, such that they are refinanced and can pay other debt contracts that they were unable to honour
Forborne and other modif
ied loans by key geography
Net forborne loans decreased by $221 mill
ion to $784 m
ill
ion (31 December 2023: $1 b
ill
ion), ma
inly due to non-performing
forborne loans.
| 2024 | 2023 3 | |||||||||||||||
Hong | Singa- | Hong | Singa- | |||||||||||||
Kong | Korea | China | pore | UK | US | Other | Total | Kong | Korea | China | pore | UK | US | Other | Total | |
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 | $mill ion | $mill ion | $mill ion | $mill ion |
Performing | ||||||||||||||||
forborne loans | 2 | 8 | – | 3 | – | – | 39 | 52 | – | 6 | – | 3 | – | – | 29 | 38 |
Stage 3 | ||||||||||||||||
forborne loans | 118 | 18 | 77 | 25 | 78 | 1 | 415 | 732 | 104 | 22 | 114 | 37 | 46 | 1 | 643 | 967 |
Net forborne loans | 120 | 26 | 77 | 28 | 78 | 1 | 454 | 784 | 104 | 28 | 114 | 40 | 46 | 1 | 672 | 1,005 |
3
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
reported balances)
Risk review and Capital review
Standard Chartered
– Annual Report 2024
227
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 ECL. The value of collateral reflects management’s best estimate and is backtested against our prior experience.
Collateral held on loans and advances
The table below details collateral held against exposures, separately disclos
ing stage 2 and stage 3 exposure and
corresponding collateral.
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 | 181,897 | 8,657 | 1,376 | 36,750 | 3,052 | 298 | 145,147 | 5,605 | 1,078 |
Wealth & Retail Banking | 119,248 | 1,758 | 858 | 85,163 | 891 | 584 | 34,085 | 867 | 274 |
Ventures | 1,389 | 25 | 1 | – | – | – | 1,389 | 25 | 1 |
Central & other items | 22,091 | 35 | 98 | 80 | 35 | – | 22,011 | – | 98 |
Total | 324,625 | 10,475 | 2,333 | 121,993 | 3,978 | 882 | 202,632 | 6,497 | 1,451 |
| 2023 | |||||||||
Corporate & | |||||||||
Investment Banking 1 | 175,382 | 8,175 | 2,046 | 36,458 | 2,972 | 623 | 138,924 | 5,203 | 1,423 |
Wealth & Retail Banking | 126,059 | 2,163 | 724 | 86,827 | 1,136 | 554 | 39,232 | 1,027 | 170 |
Ventures | 1,033 | 33 | – | – | – | – | 1,033 | 33 | – |
Central & other items | 29,478 | 964 | 209 | 2,475 | 964 | – | 27,003 | – | 209 |
Total | 331,952 | 11,335 | 2,979 | 125,760 | 5,072 | 1,177 | 206,192 | 6,263 | 1,802 |
1
Includes loans and advances to banks
2
Adjusted for over-collateralisat
ion based on the drawn and undrawn components of exposures
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.
Collateral taken for longer-term and sub-investment grade corporate loans increased to 49 per cent (31 December 2023:
41 per cent).
The unadjusted market value of collateral across all asset types, in respect of CIB, without adjust
ing for over collateral
isat
ion,
increased to $383 bill
ion (31 December 2023: $290 b
ill
ion) predom
inantly due to an increase in reverse repos.
88 per cent (31 December 2023: 83 per cent) of tangible collateral excluding reverse repurchase agreements and financ
ial
guarantees held comprises physical assets with the remainder held in cash. Overall collateral remained broadly stable at
$37 bill
ion (31 December 2023: $36 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 loss given default and other credit-related factors. Collateral is also held against off-balance sheet exposures, includ
ing
undrawn commitments and trade-related instruments.
Risk review
Risk profile
228
Standard Chartered
– Annual Report 2024
Corporate & Investment Banking
2024 | 2023 | |
Amortised cost | $mill ion | $mill ion |
Maximum exposure | 181,897 | 175,382 |
Property | 8,504 | 9,339 |
Plant, machinery and other stock | 935 | 933 |
Cash | 1,973 | 2,985 |
Reverse repos | 12,568 | 13,826 |
AA- to AA+ | 938 | 1,036 |
A- to A+ | 8,324 | 10,606 |
BBB- to BBB+ | 1,437 | 855 |
Lower than BBB- | 95 | 169 |
Unrated | 1,774 | 1,160 |
Financ ial guarantees and insurance | 7,075 | 5,057 |
Commodit ies | 33 | 5 |
Ships and aircraft | 5,662 | 4,313 |
Total value of collateral 1 | 36,750 | 36,458 |
Net exposure | 145,147 | 138,924 |
1
Adjusted for over-collateralisat
ion based on the drawn and undrawn components of exposures
Collateral – Wealth & Retail Banking (audited)
In WRB, fully secured products remain stable at 85 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 | |||||
secured¹ | secured¹ | Unsecured | Total2 | secured¹ | secured¹ | Unsecured | Total² | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Maximum exposure | 101,264 | 536 | 17,448 | 119,248 | 106,914 | 505 | 18,640 | 126,059 |
Loans to ind iv iduals | ||||||||
Mortgages | 76,696 | – | – | 76,696 | 82,943 | – | – | 82,943 |
CCPL | 463 | – | 16,343 | 16,806 | 375 | – | 17,395 | 17,770 |
Auto | 160 | – | – | 160 | 312 | – | – | 312 |
Secured wealth products | 21,928 | – | – | 21,928 | 20,303 | – | – | 20,303 |
Other | 2,017 | 536 | 1,105 | 3,658 | 2,981 | 505 | 1,245 | 4,731 |
Total collateral 2 | 85,163 | 86,827 | ||||||
Net exposure 3 | 34,085 | 39,232 | ||||||
Percentage of total loans | 85% | 0% | 15% | 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 secure
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
Mortgage loan-to-value ratios by geography (audited)
Loan-to-value (LTV) ratios measure the ratio of the current mortgage outstanding to the current fair value of the properties on
which they are secured.
For the majority of mortgage loans, the value of property held as secur
ity sign
ificantly exceeds the pr
inc
ipal outstand
ing of the
loan. The average LTV of the overall mortgage portfolio increased to 48.9 per cent (31 December 2023: 47.1 per cent) driven by
a decrease in property prices and regulatory relaxations in a few key markets, includ
ing Hong Kong and Korea. Hong Kong,
which represents 34.3 per cent of WRB mortgage portfolio, has an average LTV of 58.6 per cent (31 December 2023: 55.7 per
cent). The increase in Hong Kong resident
ial mortgage LTV was due to a decrease
in property prices. However, 29 per cent of
the Hong Kong mortgage exposure is backed by credit insurance and, specif
ically, 95 per cent of mortgage exposure w
ith LTV
greater than 80 per cent is backed by credit insurance.
Our other key markets continued to have low portfolio average LTVs (Korea and Singapore at 42.1 per cent and 42.5 per cent
respectively). Korea average LTV increased by 1.7 per cent ( 31 December 2023: 40.4 per cent) was mainly due to government
relaxations whereby highly regulated areas have eased up to accommodate customers with higher LTV.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
229
An analysis of LTV ratios by geography for the mortgage portfolio is presented in the table below.
| 2024 | 2023 1 | |||||||||
Hong | Hong | |||||||||
Kong | Singapore | Korea | Other | Total | Kong | Singapore | Korea | Other | Total | |
% | % | % | % | % | % | % | % | % | % | |
Amortised cost | Gross | Gross | Gross | Gross | Gross | Gross | Gross | Gross | Gross | Gross |
Less than 50 per cent | 40.9 | 52.7 | 64.1 | 50.2 | 51.3 | 44.9 | 50.9 | 69.5 | 51.0 | 54.9 |
50 per cent to 59 per cent | 17.6 | 21.8 | 13.2 | 15.4 | 16.5 | 19.5 | 24.7 | 11.0 | 16.7 | 17.1 |
60 per cent to 69 per cent | 12.7 | 15.6 | 13.5 | 17.0 | 14.3 | 9.7 | 15.2 | 9.7 | 16.3 | 11.9 |
70 per cent to 79 per cent | 5.5 | 9.6 | 8.3 | 12.7 | 8.5 | 4.3 | 8.7 | 8.9 | 11.6 | 7.9 |
80 per cent to 89 per cent | 5.1 | 0.1 | 0.8 | 4.1 | 2.9 | 7.3 | 0.5 | 0.6 | 3.6 | 3.3 |
90 per cent to 99 per cent | 8.2 | 0.0 | 0.1 | 0.5 | 3.0 | 7.4 | – | 0.1 | 0.4 | 2.5 |
100 per cent and greater | 10.1 | 0.1 | 0.1 | 0.2 | 3.5 | 7.0 | – | 0.1 | 0.4 | 2.4 |
Average portfolio loan-to-value | 58.6 | 42.5 | 42.1 | 48.0 | 48.9 | 55.7 | 43.4 | 40.4 | 47.8 | 47.1 |
Loans to ind iv iduals – | ||||||||||
mortgages ($mill ion) | 31,506 | 13,756 | 13,703 | 17,731 | 76,696 | 32,935 | 15,292 | 17,157 | 17,559 | 82,943 |
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and 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 is $23.7 mill
ion
(31 December 2023: $16.5 mill
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 (audited)
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 $3.5 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 Risk and Foreign
Exchange Rate Risk on these assets.
Credit linked notes
The Group has issued credit linked notes for portfolio management purposes, referencing loan assets with a notional value of
$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 of $2.0 bill
ion (31 December 2023: $2.1 b
ill
ion) are recogn
ised 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 impa
irment
in the income
statement.
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 transact
ions.
These are also set out under the ‘Derivat
ive financial
instruments Credit Risk mit
igat
ion’ section (page 249).
Off-balance sheet exposures
For certain types of exposures, such as letters of credit and guarantees, the Group obtains collateral such as cash depending
on internal Credit Risk assessments, as well as in the case of letters of credit holding legal title to the underlying assets should
a default take place.
Other portfolio analysis
This section provides maturity analysis by credit quality by industry and industry and retail products analysis by key geography.
Maturity analysis of loans and advances by client segment
Loans and advances to the CIB segment remain predominantly short-term, with $91 bill
ion (31 December 2023: $91 b
ill
ion)
maturing in less than one year. 91 per cent (31 December 2023: 98 per cent) of loans to banks mature in less than one year,
as net exposures decreased to $44 bill
ion (31 December 2023: $45 b
ill
ion). Shorter matur
it
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 short-term book of one year or less, is stable at 27 per cent (31 December 2023: 26 per cent). The WRB long-term book
of over five years also remained stable at 62 per cent (31 December 2023: 63 per cent).
Risk review
Risk profile
230
Standard Chartered
– Annual Report 2024
| 2024 | 2023 | |||||||
One year | One to | Over | One year | One to | Over | |||
or less | five years | five years | Total | or less | five years | five years | Total | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Corporate & Investment Banking | 91,065 | 33,130 | 17,670 | 141,865 | 90,728 | 30,746 | 12,822 | 134,296 |
Wealth & Retail Banking | 32,252 | 13,194 | 75,091 | 120,537 | 33,397 | 13,711 | 80,166 | 127,274 |
Ventures | 1,001 | 442 | – | 1,443 | 747 | 334 | – | 1,081 |
Central & other items | 22,085 | 2 | 4 | 22,091 | 29,448 | 43 | 3 | 29,494 |
Gross loans and advances to customers | 146,403 | 46,768 | 92,765 | 285,936 | 154,320 | 44,834 | 92,991 | 292,145 |
Impairment provis ions | (4,369) | (409) | (126) | (4,904) | (4,872) | (185) | (113) | (5,170) |
Net loans and advances to customers | 142,034 | 46,359 | 92,639 | 281,032 | 149,448 | 44,649 | 92,878 | 286,975 |
Net loans and advances to banks | 39,591 | 3,699 | 303 | 43,593 | 43,955 | 1,021 | 1 | 44,977 |
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.
Further details can be found in the ‘Summary of Credit Risk performance’ section on
page 207
.
| 2024 | ||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Total | Total | Total | Total | |||||||||
credit | Net | credit | Net | credit | Net | credit | Net | |||||
Gross | impa ir- | carrying | Gross | impa ir- | carrying | Gross | impa ir- | carrying | Gross | impa ir- | carrying | |
balance | ment | amount | balance | ment | amount | balance | ment | amount | balance | ment | 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 | 12,147 | (9) | 12,138 | 468 | (57) | 411 | 870 | (559) | 311 | 13,485 | (625) | 12,860 |
Manufacturing | 19,942 | (12) | 19,930 | 840 | (16) | 824 | 418 | (305) | 113 | 21,200 | (333) | 20,867 |
Financ ing, | ||||||||||||
insurance and | ||||||||||||
non-banking | 34,452 | (16) | 34,436 | 1,238 | (6) | 1,232 | 154 | (142) | 12 | 35,844 | (164) | 35,680 |
Transport, telecom | ||||||||||||
and util it ies | 16,099 | (11) | 16,088 | 2,309 | (32) | 2,277 | 330 | (85) | 245 | 18,738 | (128) | 18,610 |
Food and | ||||||||||||
household | ||||||||||||
products | 8,425 | (8) | 8,417 | 267 | (8) | 259 | 251 | (198) | 53 | 8,943 | (214) | 8,729 |
Commercial | ||||||||||||
real estate | 12,135 | (10) | 12,125 | 1,714 | (126) | 1,588 | 1,485 | (1,265) | 220 | 15,334 | (1,401) | 13,933 |
Min ing and | ||||||||||||
quarrying | 5,542 | (3) | 5,539 | 287 | (12) | 275 | 124 | (57) | 67 | 5,953 | (72) | 5,881 |
Consumer | ||||||||||||
durables | 5,988 | (6) | 5,982 | 218 | (26) | 192 | 292 | (259) | 33 | 6,498 | (291) | 6,207 |
Construction | 1,925 | (2) | 1,923 | 528 | (5) | 523 | 171 | (160) | 11 | 2,624 | (167) | 2,457 |
Trading | ||||||||||||
companies & | ||||||||||||
distr ibutors | 589 | – | 589 | 24 | (1) | 23 | 88 | (48) | 40 | 701 | (49) | 652 |
Government | 28,870 | – | 28,870 | 441 | (12) | 429 | 205 | (18) | 187 | 29,516 | (30) | 29,486 |
Other | 4,590 | (3) | 4,587 | 344 | (2) | 342 | 186 | (82) | 104 | 5,120 | (87) | 5,033 |
Total | 150,704 | (80) 150,624 | 8,678 | (303) | 8,375 | 4,574 | (3,178) | 1,396 | 163,956 | (3,561) 160,395 | ||
Retail Products: | ||||||||||||
Mortgage | 75,340 | (8) | 75,332 | 896 | (2) | 894 | 606 | (136) | 470 | 76,842 | (146) | 76,696 |
Credit Cards | 8,037 | (121) | 7,916 | 222 | (80) | 142 | 71 | (60) | 11 | 8,330 | (261) | 8,069 |
Personal Loan | ||||||||||||
and other | ||||||||||||
unsecured lending | 10,021 | (228) | 9,793 | 238 | (53) | 185 | 279 | (131) | 148 | 10,538 | (412) | 10,126 |
Auto | 159 | – | 159 | 1 | – | 1 | – | – | – | 160 | – | 160 |
Secured wealth | ||||||||||||
products | 21,404 | (37) | 21,367 | 402 | (6) | 396 | 518 | (353) | 165 | 22,324 | (396) | 21,928 |
Other | 3,437 | (9) | 3,428 | 194 | (29) | 165 | 155 | (90) | 65 | 3,786 | (128) | 3,658 |
Total | 118,398 | (403) | 117,995 | 1,953 | (170) | 1,783 | 1,629 | (770) | 859 | 121,980 | (1,343) 120,637 | |
Net carrying value | ||||||||||||
(customers)¹ | 269,102 | (483) 268,619 | 10,631 | (473) | 10,158 | 6,203 | (3,948) | 2,255 | 285,936 | (4,904) 281,032 | ||
Net carrying | ||||||||||||
value (Banks) 1 | 43,208 | (10) | 43,198 | 318 | (1) | 317 | 83 | (5) | 78 | 43,609 | (16) | 43,593 |
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $9,660 mill
ion for customers and $2,946 m
ill
ion for Banks.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
231
| 2023 | ||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Total | Total | Total | Total | |||||||||
credit | Net | credit | Net | credit | Net | credit | Net | |||||
Gross | impa ir- | carrying | Gross | impa ir- | carrying | Gross | impa ir- | carrying | Gross | impa ir- | carrying | |
balance | ment | amount | balance | ment | amount | balance | ment | amount | balance | ment | 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 | 9,397 | (8) | 9,389 | 672 | (22) | 650 | 949 | (535) | 414 | 11,018 | (565) | 10,453 |
Manufacturing | 21,239 | (8) | 21,231 | 708 | (16) | 692 | 656 | (436) | 220 | 22,603 | (460) | 22,143 |
Financ ing, | ||||||||||||
insurance and | ||||||||||||
non-banking | 31,633 | (13) | 31,620 | 571 | (1) | 570 | 80 | (77) | 3 | 32,284 | (91) | 32,193 |
Transport, | ||||||||||||
telecom and | ||||||||||||
util it ies | 14,710 | (8) | 14,702 | 1,722 | (36) | 1,686 | 481 | (178) | 303 | 16,913 | (222) | 16,691 |
Food and | ||||||||||||
household | ||||||||||||
products | 7,668 | (15) | 7,653 | 323 | (7) | 316 | 355 | (262) | 93 | 8,346 | (284) | 8,062 |
Commercial | ||||||||||||
real estate | 12,261 | (30) | 12,231 | 1,848 | (129) | 1,719 | 1,712 | (1,191) | 521 | 15,821 | (1,350) | 14,471 |
Min ing and | ||||||||||||
quarrying | 5,995 | (4) | 5,991 | 220 | (10) | 210 | 151 | (84) | 67 | 6,366 | (98) | 6,268 |
Consumer | ||||||||||||
durables | 5,815 | (3) | 5,812 | 300 | (21) | 279 | 329 | (298) | 31 | 6,444 | (322) | 6,122 |
Construction | 2,230 | (2) | 2,228 | 502 | (8) | 494 | 358 | (326) | 32 | 3,090 | (336) | 2,754 |
Trading | ||||||||||||
companies & | ||||||||||||
distr ibutors | 581 | – | 581 | 57 | – | 57 | 107 | (58) | 49 | 745 | (58) | 687 |
Government | 33,400 | (6) | 33,394 | 1,783 | (5) | 1,778 | 367 | (33) | 334 | 35,550 | (44) | 35,506 |
Other | 4,262 | (4) | 4,258 | 161 | (3) | 158 | 187 | (70) | 117 | 4,610 | (77) | 4,533 |
Total | 149,191 | (101) 149,090 | 8,867 | (258) | 8,609 | 5,732 | (3,548) | 2,184 | 163,790 | (3,907) | 159,883 | |
Retail Products: | ||||||||||||
Mortgage | 81,210 | (8) | 81,202 | 1,350 | (5) | 1,345 | 519 | (123) | 396 | 83,079 | (136) | 82,943 |
Credit Cards | 7,633 | (104) | 7,529 | 244 | (65) | 179 | 69 | (50) | 19 | 7,946 | (219) | 7,727 |
Personal Loan | ||||||||||||
and other | ||||||||||||
unsecured lending | 10,867 | (188) | 10,679 | 324 | (77) | 247 | 315 | (165) | 150 | 11,506 | (430) | 11,076 |
Auto | 310 | – | 310 | 1 | – | 1 | 1 | – | 1 | 312 | – | 312 |
Secured wealth | ||||||||||||
products | 19,923 | (22) | 19,901 | 278 | (10) | 268 | 474 | (340) | 134 | 20,675 | (372) | 20,303 |
Other | 4,558 | (7) | 4,551 | 161 | (5) | 156 | 118 | (94) | 24 | 4,837 | (106) | 4,731 |
Total | 124,501 | (329) | 124,172 | 2,358 | (162) | 2,196 | 1,496 | (772) | 724 | 128,355 | (1,263) | 127,092 |
Net carrying value | ||||||||||||
(customers)¹ | 273,692 | (430) 273,262 | 11,225 | (420) | 10,805 | 7,228 | (4,320) | 2,908 | 292,145 | (5,170) 286,975 | ||
Net carrying | ||||||||||||
value (Banks) 1 | 44,384 | (8) | 44,376 | 540 | (10) | 530 | 77 | (6) | 71 | 45,001 | (24) | 44,977 |
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $13,996 mill
ion for customers and $1,738 m
ill
ion for Banks.
Industry and Retail Products analysis of loans and advances by key geography
This section provides an analysis of the Group’s amortised cost loan portfolio, net of provis
ions, by
industry and geography.
The Manufacturing sector group is spread across a diverse range of industr
ies,
includ
ing automob
iles and components, capital
goods, pharmaceuticals, biotech and life sciences, technology hardware and equipment, chemicals, paper products and
packaging, with lending spread over 3,251 clients.
Risk review
Risk profile
232
Standard Chartered
– Annual Report 2024
Corporate & Investment Banking
| 2024 | 2023 1 | |||||||||||||
Hong | Singa- | Hong | Singa- | |||||||||||
Kong | China | pore | UK | US | Other | Total | Kong | China | pore | UK | US | Other | Total | |
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 | $mill ion | $mill ion |
Industry: | ||||||||||||||
Energy | 2,200 | 59 | 1,552 | 1,744 | 1,750 | 5,551 | 12,856 | 3,118 | 42 | 1,162 | 1,341 | 3,638 | 1,130 | 10,431 |
Manufacturing | 4,077 | 4,200 | 1,463 | 389 | 2,307 | 8,431 | 20,867 | 3,570 | 4,309 | 1,666 | 694 | 2,921 | 8,982 | 22,142 |
Financ ing, insurance | ||||||||||||||
and non-banking | 3,674 | 3,486 | 1,893 | 4,005 | 9,900 12,696 | 35,654 | 3,700 | 3,570 | 1,708 | 1,724 | 6,627 | 14,864 | 32,193 | |
Transport, telecom | ||||||||||||||
and util it ies | 5,131 | 662 | 3,106 | 1,084 | 936 | 7,685 | 18,604 | 4,634 | 429 | 2,499 | 1,030 | 630 | 7,470 | 16,692 |
Food and household | ||||||||||||||
products | 1,038 | 428 | 1,414 | 962 | 685 | 4,202 | 8,729 | 541 | 519 | 911 | 816 | 664 | 4,611 | 8,062 |
Commercial | ||||||||||||||
Real estate | 4,512 | 334 | 1,404 | 1,039 | 1,650 | 4,994 | 13,933 | 3,895 | 588 | 1,125 | 1,436 | 1,236 | 6,192 | 14,472 |
Min ing and Quarry ing | 608 | 606 | 847 | 1,426 | 224 | 2,170 | 5,881 | 1,028 | 735 | 427 | 1,729 | 279 | 2,071 | 6,269 |
Consumer durables | 2,780 | 293 | 466 | 84 | 537 | 2,046 | 6,206 | 3,030 | 244 | 180 | 177 | 483 | 2,008 | 6,122 |
Construction | 318 | 156 | 372 | 96 | 247 | 1,268 | 2,457 | 176 | 163 | 319 | 137 | 389 | 1,569 | 2,753 |
Trading Companies & | ||||||||||||||
Distr ibutors | 95 | 103 | 106 | 31 | 40 | 277 | 652 | 119 | 75 | 121 | 31 | 20 | 321 | 687 |
Government | 2,576 | 117 | 219 | 169 | 4 | 4,352 | 7,437 | 1,445 | 1 | 547 | 236 | 6 | 3,814 | 6,049 |
Other | 1,419 | 563 | 786 | 377 | 233 | 1,650 | 5,028 | 1,676 | 265 | 646 | 257 | 264 | 1,425 | 4,533 |
Net Loans and | ||||||||||||||
advances to | ||||||||||||||
Customers | 28,428 | 11,007 | 13,628 | 11,406 | 18,513 55,322 138,304 | 26,932 | 10,940 | 11,311 | 9,608 | 17,157 54,457 130,405 | ||||
Net Loans and | ||||||||||||||
advances to Banks | 16,727 | 2,443 | 7,721 | 4,103 | 2,766 | 9,833 | 43,593 | 17,457 | 1,996 | 8,994 | 3,868 | 2,544 | 10,119 | 44,978 |
Wealth & Retail Banking
| 2024 | 2023 1 | |||||||||
Hong | Hong | |||||||||
Kong | Korea | Singapore | Other | Total | Kong | Korea | Singapore | Other | Total | |
Amortised Cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Retail Products: | ||||||||||
Mortgages | 31,506 | 13,703 | 13,756 | 17,731 | 76,696 | 32,935 | 17,157 | 15,292 | 17,559 | 82,943 |
Credit Cards | 3,447 | 38 | 1,679 | 1,517 | 6,681 | 3,325 | 114 | 1,705 | 1,549 | 6,693 |
Personal Loans and other | ||||||||||
unsecured lending | 1,057 | 2,796 | 301 | 5,972 | 10,126 | 950 | 3,230 | 220 | 6,676 | 11,076 |
Auto | – | – | 122 | 38 | 160 | – | – | 240 | 72 | 312 |
Secured wealth products | 5,229 | 24 | 10,793 | 5,882 | 21,928 | 5,164 | 33 | 9,388 | 5,718 | 20,303 |
Other Retail | 579 | 2,153 | 72 | 853 | 3,657 | 644 | 3,149 | 82 | 856 | 4,731 |
Net Loans and advances | ||||||||||
to Customers | 41,818 | 18,714 | 26,723 | 31,993 | 119,248 | 43,018 | 23,683 | 26,927 | 32,430 | 126,058 |
1
Amounts have been re-presented from a regional basis (Asia, Africa and Middle East, and Europe and Americas) to key geographies covering the major
ity of the
reported balances.
High carbon sectors
Sectors are ident
ified and grouped as per the Internat
ional Standard Industrial Classif
icat
ion (ISIC) system and exposure
numbers have been updated to include all in-scope ISIC codes used for target setting among the high carbon sectors.
The maximum exposures shown in the table include loans and advances to customers at amortised cost, Fair Value through
profit or loss, and committed facil
it
ies available as per IFRS 9 – Financ
ial Instruments
in $mill
ion.
Further details can be found in the ‘Summary of Credit Risk performance’ section on
page 207
.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
233
Maximum exposure
2024 | |||||||
Maximum | |||||||
on Balance | |||||||
Sheet | Net On | Undrawn | Financ ial | Net Off | Total On & | ||
Exposure | Balance | Commitments | Guarantees | Balance | Off Balance | ||
(net of credit | Sheet | (net of credit | (net of credit | Sheet | Sheet Net | ||
impa irment) | Collateral | Exposure | impa irment) | impa irment) | Exposure | Exposure | |
Amortised Cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Industry: | |||||||
Automotive manufacturers | 3,881 | 69 | 3,812 | 3,331 | 605 | 3,936 | 7,748 |
Aviat ion | 1,829 | 960 | 869 | 842 | 928 | 1,770 | 2,639 |
Steel | 1,526 | 316 | 1,210 | 816 | 325 | 1,141 | 2,351 |
Coal Min ing | 25 | – | 25 | – | – | – | 25 |
Alumin ium | 1,341 | 32 | 1,309 | 354 | 53 | 407 | 1,716 |
Cement | 709 | 55 | 654 | 637 | 267 | 904 | 1,558 |
Shipp ing | 7,038 | 5,037 | 2,001 | 2,176 | 397 | 2,573 | 4,574 |
Commercial Real Estate | 7,635 | 3,400 | 4,235 | 2,758 | 684 | 3,442 | 7,677 |
Oil & Gas | 7,421 | 988 | 6,433 | 7,928 | 7,079 | 15,007 | 21,440 |
Power | 6,341 | 1,500 | 4,841 | 4,538 | 1,124 | 5,662 | 10,503 |
Total¹ | 37,746 | 12,357 | 25,389 | 23,380 | 11,462 | 34,842 | 60,231 |
Total Corporate & Investment Banking2 | 196,823 | 32,152 | 164,671 | 118,106 | 81,132 | 199,238 | 363,909 |
Total Group³ | 420,117 | 121,993 | 298,124 | 193,115 | 90,602 | 283,717 | 581,841 |
2023 | |||||||
Industry: | |||||||
Automotive manufacturers | 3,564 | 65 | 3,499 | 3,791 | 538 | 4,329 | 7,828 |
Aviat ion | 1,330 | 974 | 356 | 944 | 615 | 1,559 | 1,915 |
Steel | 1,596 | 193 | 1,403 | 601 | 358 | 959 | 2,362 |
Coal Min ing | 29 | 9 | 20 | 51 | 99 | 150 | 170 |
Alumin ium | 526 | 9 | 517 | 338 | 188 | 526 | 1,043 |
Cement | 671 | 47 | 624 | 769 | 259 | 1,028 | 1,652 |
Shipp ing | 5,964 | 3,557 | 2,407 | 2,261 | 291 | 2,552 | 4,959 |
Commercial Real Estate | 7,498 | 3,383 | 4,115 | 1,587 | 112 | 1,699 | 5,814 |
Oil & Gas | 6,278 | 894 | 5,384 | 7,845 | 6,944 | 14,789 | 20,173 |
Power | 5,411 | 1,231 | 4,180 | 3,982 | 732 | 4,714 | 8,894 |
Total 1 | 32,867 | 10,362 | 22,505 | 22,169 | 10,136 | 32,305 | 54,810 |
Total Corporate & Investment Banking2 | 188,903 | 32,744 | 156,159 | 104,437 | 63,183 | 167,620 | 323,779 |
Total Group³ | 423,276 | 125,760 | 297,516 | 182,299 | 74,278 | 256,577 | 554,093 |
1
Maximum on balance sheet exposure includes FVTPL amount of High Carbon sector is $749 mill
ion (31 December 2023: $125 m
ill
ion)
2
Includes on balance sheet FVTPL amount of $58,519 mill
ion (31 December 2023: $58,498 m
ill
ion) for Corporate & Investment Bank
ing loans to customers
3
Total Group includes net loans and advances to banks and net loans and advances to customers held at amortised cost of $43,593 mill
ion (31 December 2023:
$44,977 mill
ion) and $281,032 m
ill
ion (31 December 2023: $286,975 m
ill
ion) respect
ively and loans to banks and loans and advances to customers held at FVTPL
of $36,967 mill
ion (31 December 2023: $32,813 m
ill
ion) and $58, 525
mill
ion (31 December 2023: $58,511 m
ill
ion) respect
ively. Refer to credit quality table
Maturity and ECL for high-carbon sectors
2024 | 2023 | ||||||||||
Loans and | Maturity Buckets 1 | Loans and | Maturity Buckets 1 | ||||||||
advances | advances | ||||||||||
(Drawn | Less than | More than | More than | Expected | (Drawn | Less than | More than | More than | Expected | ||
funding) | 1 year | 1 to 5 years | 5 years | Credit Loss | funding) | 1 year | 1 to 5 years | 5 years | Credit Loss | ||
Sector | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Automotive Manufacturers | 3,883 | 3,458 | 369 | 56 | 2 | 3,566 | 3,106 | 460 | – | 2 | |
Aviat ion | 1,833 | 231 | 404 | 1,198 | 4 | 1,339 | 149 | 145 | 1,045 | 9 | |
Cement | 724 | 356 | 368 | – | 15 | 719 | 512 | 189 | 18 | 48 | |
Coal Min ing | 38 | 25 | 13 | – | 13 | 42 | 9 | 33 | – | 13 | |
Steel | 1,598 | 941 | 133 | 524 | 72 | 1,649 | 1,258 | 185 | 206 | 53 | |
Alumin ium | 1,352 | 1,089 | 177 | 86 | 11 | 537 | 442 | 63 | 32 | 11 | |
Oil & Gas | 7,580 | 2,601 | 2,407 | 2,572 | 159 | 6,444 | 2,980 | 1,576 | 1,888 | 166 | |
Power | 6,401 | 1,700 | 1,404 | 3,297 | 60 | 5,516 | 1,933 | 1,533 | 2,050 | 105 | |
Shipp ing | 7,053 | 1,035 | 2,450 | 3,568 | 15 | 5,971 | 1,051 | 2,568 | 2,352 | 7 | |
Commercial Real Estate | 7,773 | 3,880 | 3,680 | 213 | 138 | 7,664 | 3,722 | 3,935 | 7 | 166 | |
Total balance 1 | 38,235 | 15,316 | 11,405 | 11,514 | 489 | 33,447 | 15,162 | 10,687 | 7,598 | 580 | |
1
Gross of credit impa
irment
Risk review
Risk profile
234
Standard Chartered
– Annual Report 2024
Sectors of interest
Commercial Real Estate
| 2024 | |||||||
Maximum on | |||||||
Balance Sheet | Undrawn | Financ ial | |||||
Exposure (net | Net On | Commitments | Guarantees | Net Off | Total On & Off | ||
of credit | Balance Sheet | (net of credit | (net of credit | Balance Sheet | Balance Sheet | ||
impa irment) 1 | Collateral | Exposure | impa irment) | impa irment) | Exposure | Net Exposure | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Commercial Real Estate | 14,037 | 5,947 | 8,090 | 4,932 | 670 | 5,602 | 13,692 |
| 2023 | |||||||
Commercial Real Estate | 14,533 | 6,363 | 8,170 | 4,658 | 311 | 4,969 | 13,139 |
1
Includes net loans and advances of $13,933 mill
ion (31 December 2023: $14,471 m
ill
ion) as deta
iled in the table below
Analysis of credit quality of loans and advances of Commercial Real Estate
2024 | 2023 | |
Gross | Gross | |
Amortised costs | $mill ion | $mill ion |
Strong | 7,222 | 7,326 |
Satisfactory | 6,515 | 6,751 |
Higher risk | 112 | 32 |
Credit impa ired (stage 3) | 1,485 | 1,712 |
Total Gross Balance | 15,334 | 15,821 |
Strong | (83) | (20) |
Satisfactory | (44) | (139) |
Higher risk | (9) | – |
Credit impa ired (stage 3) | (1,265) | (1,191) |
Total Credit Impairment | (1,401) | (1,350) |
Total Net of Credit Impairment | 13,933 | 14,471 |
Strong | 1.1% | 0.3% |
Satisfactory | 0.7% | 2.1% |
Higher risk | 8.0% | 0.0% |
Credit impa ired (stage 3) | 85.1% | 69.6% |
Cover Ratio | 9.1% | 8.5% |
An analysis of the net CRE loans and advances by key geography, is set out on page 232.
China commercial real estate
The table below represents the on and off-balance sheet items that are exposed to China CRE by credit quality.
Further details can be found in the ‘Summary of Credit Risk performance’ section on
page 207
.
| 2024 | 2023 | |||||||
Rest of | Rest of | |||||||
China | Hong Kong | Group 1 | Total | China | Hong Kong | Group 1 | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Loans to customers | 324 | 1,598 | – | 1,922 | 584 | 1,821 | 39 | 2,444 |
Off balance sheet | 1 | 40 | – | 41 | 42 | 82 | – | 124 |
Total as at 31 December | 325 | 1,638 | – | 1,963 | 626 | 1,903 | 39 | 2,568 |
Loans to customers – By Credit quality | ||||||||
Gross | ||||||||
Strong | – | 12 | – | 12 | 33 | – | – | 33 |
Satisfactory | 172 | 338 | – | 510 | 339 | 619 | 39 | 997 |
Higher risk | 12 | 42 | – | 54 | 8 | – | – | 8 |
Credit impa ired (stage 3) | 140 | 1,206 | – | 1,346 | 204 | 1,202 | – | 1,406 |
Total as at 31 December | 324 | 1,598 | – | 1,922 | 584 | 1,821 | 39 | 2,444 |
Loans to customers – ECL | ||||||||
Strong | – | – | – | – | – | – | – | – |
Satisfactory | (2) | (73) | – | (75) | (3) | (134) | (12) | (149) |
Higher risk | – | (1) | – | (1) | – | – | – | – |
Credit impa ired (stage 3) | (63) | (1,111) | – | (1,174) | (70) | (941) | – | (1,011) |
Total as at 31 December | (65) | (1,185) | – | (1,250) | (73) | (1,075) | (12) | (1,160) |
1
Rest of Group mainly includes Singapore
Risk review and Capital review
Standard Chartered
– Annual Report 2024
235
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 credit quality descript
ions
in the table below align to those used for CIB and Central and other items, as described on
page 212. Debt securit
ies held that have a short-term external rat
ing are reported against the long-term rating of the issuer.
For securit
ies that are unrated, the Group appl
ies an internal credit rating, as described under the ‘Credit rating and
measurement’ section on page 201.
Total gross debt securit
ies and other el
ig
ible b
ills decreased by $16.8 bill
ion to $144 b
ill
ion (31 December 2023: $160 b
ill
ion) due
to maturity of exposures, primar
ily
in stage 1.
Stage 1 gross balance decreased by $16.5 bill
ion to $142 b
ill
ion (31 December 2023: $158 b
ill
ion), ma
inly due to the maturity of
exposures in Hong Kong.
Stage 2 gross balance decreased by $0.2 bill
ion to $1.6 b
ill
ion (31 December 2023: $1.9 b
ill
ion).
Stage 3 gross balance was broadly stable at $0.1 bill
ion (31 December 2023: $0.2 b
ill
ion).
| 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 | 141,862 | (23) | 141,839 | 158,314 | (26) | 158,288 |
– Strong | 138,353 | (19) | 138,334 | 155,568 | (23) | 155,545 |
– Satisfactory | 3,509 | (4) | 3,505 | 2,746 | (3) | 2,743 |
Stage 2 | 1,614 | (4) | 1,610 | 1,860 | (34) | 1,826 |
– Strong | 562 | – | 562 | 917 | (3) | 914 |
– Satisfactory | 31 | – | 31 | 50 | (1) | 49 |
– High Risk | 1,021 | (4) | 1,017 | 893 | (30) | 863 |
Stage 3 | 103 | (2) | 101 | 164 | (61) | 103 |
Gross balance¹ | 143,579 | (29) | 143,550 | 160,338 | (121) | 160,217 |
1
Stage 3 gross includes $59 mill
ion (31 December 2023: $80 m
ill
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 instruments are not presented net of ECL on the balance sheet. While the presentation is on a net basis for the table, the total net on-balance sheet
amount is $143,562 mill
ion (31 December 2023: $160,263 m
ill
ion). Refer to the Analys
is of financ
ial
instrument by stage table
Risk review
Risk profile
236
Standard Chartered
– Annual Report 2024
IFRS 9 ECL methodology (audited)
Approach for determin
ing ECL
Credit loss terminology
Component | Definit ion |
Probabil ity of default (PD) | The probabil ity that a counterparty w ill default, over the next 12 months from the reporting |
date (stage 1) or 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 statist ical models, cal ibrated using histor ical data and | |
adjusted to incorporate forward-looking economic assumptions. | |
Loss given default (LGD) | The loss that is expected to arise on default, incorporating the impact of forward-looking |
economic assumptions where relevant, which represents the difference between the | |
contractual cashflows due and those that the bank expects to receive. The Group estimates | |
LGD based on the history of recovery rates and considers the recovery of any collateral that is | |
integral to the financ ial asset, tak ing into account forward-looking economic assumptions | |
where relevant. | |
Exposure at default (EAD) | The expected balance sheet exposure at the time of default, taking into account expected |
changes over the lifet ime of the exposure. Th is incorporates the impact of drawdowns of | |
facil it ies with lim its, repayments of pr inc ipal and interest, and amortisat ion. |
To determine the ECL, these components are multipl
ied
together: PD for the reference period (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 ECL models have been developed for the CIB businesses
on a global basis, in line with their respective portfolios.
However, for some of the key countries, country-specif
ic
models have also been developed.
The calibrat
ion of forward-look
ing informat
ion
is assessed
at a country or region level to take into account local
macroeconomic condit
ions.
Retail ECL models are country and product specif
ic, g
iven the
local nature of the WRB 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 del
inquency 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.
•
While the loss rate approaches do not incorporate
forward looking informat
ion, to the extent that there are
sign
ificant changes
in the macroeconomic forecasts an
assessment will be 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 differences between model predict
ions and
actual outcomes against approved thresholds.
•
Annual independent validat
ion
is performed by Group
Model Validat
ion (GMV); Depth of GMV’s val
idat
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 ECL
ECL is estimated based on the period over which the Group
is exposed to Credit Risk. For the major
ity of exposures th
is
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 was
re-estimated from 24 months to 36 months. The impact of this
change was not material.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
237
Composit
ion of cred
it impa
irment prov
is
ions (aud
ited)
The table below summarises the key components of the Group’s credit impa
irment prov
is
ion balances at 31 December 2024 and
31 December 2023.
| 2024 | 2023 | |||||||||
Corporate & | Wealth & | Corporate & | Wealth & | |||||||
Investment | Retail | Central & | Investment | Retail | Central & | |||||
Banking | Banking | Ventures | other items | Total | Banking | Banking | Ventures | other items | Total | |
$mill ion | $mill ion | $mill ion | $mill ion 4 | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion 4 | $mill ion | |
Modelled ECL | ||||||||||
provis ions | ||||||||||
(base forecast) | 337 | 613 | 61 | 37 | 1,048 | 372 | 553 | 48 | 98 | 1,071 |
Impact of multiple | ||||||||||
economic scenarios 1 | 24 | 19 | – | – | 43 | 20 | 18 | – | 6 | 44 |
Modelled ECL | ||||||||||
provis ions before | ||||||||||
management | ||||||||||
judgements | 361 | 632 | 61 | 37 | 1,091 | 392 | 571 | 48 | 104 | 1,115 |
Includes: Model | ||||||||||
performance post | ||||||||||
model adjustments | – | 14 | – | – | 14 | (3) | (28) | – | – | (31) |
Judgemental post | ||||||||||
model adjustments 2 | – | (23) | – | – | (23) | – | 2 | – | – | 2 |
Management | ||||||||||
overlays 3 | ||||||||||
– China commercial | ||||||||||
real estate | 70 | – | – | – | 70 | 141 | – | – | – | 141 |
– Other | 109 | 27 | 7 | – | 143 | – | 5 | – | 17 | 22 |
Total modelled | ||||||||||
provis ions | 540 | 636 | 68 | 37 | 1,281 | 533 | 578 | 48 | 121 | 1,280 |
Of which: | ||||||||||
Stage 1 | 133 | 392 | 30 | 34 | 589 | 151 | 325 | 15 | 68 | 559 |
Stage 2 | 362 | 151 | 27 | 1 | 541 | 318 | 140 | 21 | 49 | 528 |
Stage 3 | 45 | 93 | 11 | 2 | 151 | 64 | 113 | 12 | 4 | 193 |
Stage 3 non-modelled | ||||||||||
provis ions | 3,267 | 665 | – | 54 | 3,986 | 3,587 | 646 | – | 88 | 4,321 |
Total credit | ||||||||||
impa irment prov is ions | 3,807 | 1,301 | 68 | 91 | 5,267 | 4,120 | 1,224 | 48 | 209 | 5,601 |
1
Includes upwards judgemental post-model adjustment of $28 mill
ion (31 December 2023: n
il)
2
Excludes $28 mill
ion upwards judgemental post-model adjustment wh
ich is included in ‘Impact of multiple economic scenarios’
3
$32 mill
ion (31 December 2023: $22 m
ill
ion)
is in stage 1, $181 mill
ion (31 December 2023: $141 m
ill
ion)
in stage 2 and $nil mill
ion (31 December 2023: n
il) in stage 3
4
Includes ECL on cash and balances at central banks, accrued income, assets held for sale and other assets
Model performance post model adjustments (PMAs)
As part of model monitor
ing and
independent validat
ion processes, where a model’s performance breaches the approved
monitor
ing thresholds or val
idat
ion standards, an assessment
is performed to determine whether a model performance PMA
is required to temporarily remediate the model issue. The process for the determinat
ion of PMAs
is set out in the ‘Governance
of PMAs and applicat
ion of expert cred
it judgement in respect of ECL’ section on page 246.
As at 31 December 2024, model performance PMAs have been applied for five models out of the total of 110 models.
In aggregate, these PMAs increase the Group’s impa
irment prov
is
ions by $14 m
ill
ion (1 per cent of modelled prov
is
ions)
compared with a $31 mill
ion decrease at 31 December 2023. The reduct
ion was primar
ily due to the
implementat
ion of
new models, thereby removing the need for PMAs on the old models.
In addit
ion to these model performance PMAs, separate judgemental post model and management adjustments have also
been applied as set out on page 241.
2024 | 2023 | |
$mill ion | $mill ion | |
Model performance PMAs | ||
Corporate & Investment Banking | – | (3) |
Wealth & Retail Banking | 14 | (28) |
Total model performance PMAs | 14 | (31) |
Risk review
Risk profile
238
Standard Chartered
– Annual Report 2024
Key assumptions and judgements in determin
ing ECL
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
provis
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 credit losses likely to occur in the near future.
To capture the effect of changes to the economic
environment, the PDs and LGDs used to calculate ECL
incorporate forward-looking 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 econom
ic variables and asset prices. The research
team takes consensus views into considerat
ion, and sen
ior
management review project
ions for some core country
variables 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 projections are updated on a quarterly bas
is.
Forecast of key macroeconomic variables underlying the ECL
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
condit
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 down. 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, tens
ions remain elevated over the
conflict in Ukraine and the situat
ion
in the Middle-East.
While the quarterly Base Forecasts 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 negat
ive
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 prov
is
ions that does
not appropriately capture the range of potential outcomes.
To address the inherent uncertainty in economic forecast,
and the property of skewness (or non-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 while
consider
ing the degree of h
istor
ical uncerta
inty (or volatil
ity)
observed from Q1 1990 to Q3 2023 around economic
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 GDP graphs below illustrate the shape of the Base
Forecast for key footprint markets in relation to prior periods’
actuals. The long-term growth rates are based on the pace
of economic expansion expected for 2030. The tables below
provide a summary of the Group’s Base Forecast for these
markets. The peak/trough amounts show the highest and
lowest points with
in the Base Forecast.
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
electric
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. Sim
ilarly, the uncerta
in
external environment and likely trade protection
ist measures
will lim
it the ups
ide to growth for both South Korea and Hong
Kong which are expected to grow by 2.0 per cent and 2.9 per
cent respectively in 2025.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
239
China GDP
YoY%
Hong Kong GDP
YoY%
Korea GDP
YoY%
20
10
8
Actual
Forecast
Actual
Forecast
Actual
Forecast
8
7
16
6
6
5
4
12
4
2
3
8
Long-term growth
0
2
-2
Long-term growth
4
1
Long-term growth
-4
0
0
-6
-1
-8
-2
-4
-10
-3
-8
-12
-4
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Singapore GDP
YoY%
India GDP
YoY%
20
30
Actual
Actual
Forecast
Forecast
15
20
10
10
5
Long-term growth
0
Long-term growth
0
-10
-5
-20
-10
-15
-30
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
| 2024 year-end forecasts | ||||||||
| China | Hong Kong | |||||||
3-month | 3-month | |||||||
GDP growth | Unemployment | interest rates | House prices 5 | GDP growth | Unemployment | interest rates | House prices | |
(YoY%) | % | % | (YoY %) | (YoY %) | % | % | (YoY %) | |
Base forecast 1 | ||||||||
2024 | 4.8 | 3.6 | 2.0 | (3.7) | 2.6 | 3.0 | 4.4 | (11.1) |
2025 | 4.5 | 3.5 | 1.7 | (5.3) | 2.9 | 3.1 | 2.5 | 1.8 |
2026 | 4.3 | 3.3 | 1.6 | (3.2) | 2.5 | 3.2 | 2.2 | 6.5 |
2027 | 4.1 | 3.2 | 1.6 | (0.9) | 2.1 | 3.2 | 2.4 | 4.8 |
2028 | 3.9 | 3.2 | 1.8 | 0.9 | 1.9 | 3.2 | 2.4 | 3.4 |
5-year average 2 | 4.1 | 3.3 | 1.7 | (1.3) | 2.2 | 3.1 | 2.4 | 3.8 |
Quarterly peak | 5.3 | 3.5 | 1.9 | 2.3 | 3.5 | 3.2 | 2.9 | 6.8 |
Quarterly trough | 3.2 | 3.1 | 1.6 | (5.6) | 1.5 | 3.0 | 2.1 | (2.6) |
Monte Carlo | ||||||||
Low 3 | (1.0) | 2.8 | 0.6 | (10.1) | (1.8) | 1.8 | 0.3 | (13.1) |
High 4 | 9.3 | 3.7 | 3.0 | 7.8 | 5.8 | 5.1 | 5.3 | 22.2 |
| 2024 year-end forecasts | ||||||||
| Singapore | Korea | |||||||
3-month | 3-month | |||||||
GDP growth | Unemployment 6 | interest rates | House prices | GDP growth | Unemployment | interest rates | House prices | |
(YoY%) | % | % | (YoY%) | (YoY%) | % | % | (YoY %) | |
Base forecast 1 | ||||||||
2024 | 3.5 | 2.9 | 3.6 | 4.3 | 2.5 | 2.8 | 3.6 | (0.4) |
2025 | 2.4 | 2.7 | 1.9 | 0.4 | 2.0 | 2.8 | 3.0 | 4.3 |
2026 | 2.1 | 2.7 | 1.9 | 2.2 | 2.2 | 2.8 | 2.9 | 3.4 |
2027 | 2.2 | 2.7 | 2.0 | 3.0 | 2.1 | 2.8 | 2.9 | 2.4 |
2028 | 2.4 | 2.7 | 2.0 | 3.1 | 1.9 | 2.8 | 2.9 | 2.1 |
5-year average 2 | 2.3 | 2.7 | 2.0 | 2.4 | 2.0 | 2.8 | 2.9 | 2.8 |
Quarterly peak | 3.4 | 2.8 | 2.4 | 3.2 | 2.2 | 2.9 | 3.2 | 4.8 |
Quarterly trough | 0.6 | 2.7 | 1.6 | (0.4) | 1.5 | 2.8 | 2.9 | 1.9 |
Monte Carlo | ||||||||
Low 3 | (2.7) | 2.0 | 0.3 | (10.5) | (1.3) | 2.2 | 0.8 | (4.3) |
High 4 | 7.0 | 3.6 | 3.9 | 17.5 | 5.2 | 3.5 | 5.7 | 9.8 |
240
Standard Chartered
– Annual Report 2024
Risk review
Risk profile
2024 year-end forecasts | |||||
India | |||||
3-month | |||||
GDP growth | Unemployment 7 | interest rates | House prices | Brent Crude | |
(YoY%) | % | % | (YoY%) | $ pb | |
Base forecast 1 | |||||
2024 | 6.9 | NA | 6.4 | 6.3 | 78.3 |
2025 | 6.5 | NA | 6.1 | 6.5 | 77.1 |
2026 | 6.5 | NA | 6.0 | 6.4 | 76.4 |
2027 | 6.6 | NA | 6.0 | 6.4 | 77.3 |
2028 | 6.6 | NA | 6.0 | 6.3 | 75.3 |
5-year average 2 | 6.6 | NA | 6.0 | 6.4 | 76.2 |
Quarterly peak | 7.1 | NA | 6.2 | 7.3 | 77.8 |
Quarterly trough | 5.9 | NA | 6.0 | 6.0 | 74.8 |
Monte Carlo | |||||
Low 3 | 3.2 | NA | 1.9 | (0.1) | 44.5 |
High 4 | 10.0 | NA | 10.3 | 12.6 | 107.8 |
2023 year-end forecasts | ||||||||
China | Hong Kong | |||||||
3-month | 3-month | |||||||
GDP growth | Unemployment | interest rates | House prices 5 | GDP growth | Unemployment | interest rates | House prices | |
(YoY%) | % | % | (YoY%) | (YoY%) | % | % | (YoY%) | |
5-year average 2 | 4.3 | 4.0 | 2.1 | 4.6 | 2.5 | 3.4 | 3.4 | 2.8 |
Quarterly peak | 5.7 | 4.1 | 2.5 | 7.2 | 3.8 | 3.4 | 5.0 | 4.6 |
Quarterly trough | 3.8 | 3.8 | 1.7 | 1.5 | 1.5 | 3.4 | 2.3 | (1.1) |
Monte Carlo | ||||||||
Low 3 | 0.6 | 3.3 | 0.8 | (1.5) | (3.8) | 1.4 | 0.3 | (19.3) |
High 4 | 7.7 | 4.4 | 3.8 | 12.0 | 8.2 | 6.4 | 8.3 | 25.5 |
2023 year-end forecasts | ||||||||
Singapore | Korea | |||||||
3-month | 3-month | |||||||
GDP growth | Unemployment 6 | interest rates | House prices | GDP growth | Unemployment | interest rates | House prices | |
(YoY%) | % | % | (YoY%) | (YoY%) | % | % | (YoY%) | |
5-year average 2 | 2.9 | 2.8 | 2.9 | 2.2 | 2.3 | 3.1 | 3.1 | 3.3 |
Quarterly peak | 3.8 | 2.9 | 4.1 | 3.9 | 2.6 | 3.5 | 3.7 | 5.3 |
Quarterly trough | 1.9 | 2.8 | 2.3 | (0.7) | 2.0 | 3.0 | 3.1 | (0.3) |
Monte Carlo | ||||||||
Low 3 | (2.4) | 1.7 | 0.6 | (16.2) | (2.3) | 1.4 | 0.7 | (6.1) |
High 4 | 8.5 | 3.8 | 5.9 | 19.2 | 7.0 | 5.8 | 6.3 | 12.5 |
2023 year-end forecasts | |||||
India | |||||
3-month | |||||
GDP growth | Unemployment | interest rates | House prices | Brent crude | |
(YoY%) | % | % | (YoY%) | $ pb | |
5-year average 2 | 6.2 | NA | 6.2 | 6.1 | 88.2 |
Quarterly peak | 9.1 | NA | 6.3 | 6.5 | 93.8 |
Quarterly trough | 4.4 | NA | 5.8 | 4.7 | 82.8 |
Monte Carlo | |||||
Low 3 | 2.1 | NA | 2.7 | (0.5) | 46.0 |
High 4 | 10.5 | NA | 9.9 | 13.8 | 137.8 |
1
Data presented are those used in the calculation of ECL and presented as average growth for the year. These may differ slightly to forecasts presented elsewhere
in the Annual Report as they are final
ised before the per
iod end
2
5 year averages covering 20 quarters from Q1 2025 to Q4 2029 for the 2024 annual report. They cover Q1 2024 to Q4 2028 for the numbers reported for the 2023
annual report
3
Represents the 10th percentile in the range of economic scenarios used to determine non-linear
ity
4
Represents the 90th percentile in the range of economic scenarios used to determine non-linear
ity
5
A judgemental management adjustment is held in respect of the China commercial real estate sector, as discussed on page 241
6
Singapore unemployment rate covers the resident unemployment rate, which refers to cit
izens and permanent res
idents
7
India unemployment is not available due to insuff
ic
ient data
Risk review and Capital review
Standard Chartered
– Annual Report 2024
241
Impact of multiple economic scenarios
The final probabil
ity we
ighted ECL reported by the Group is a simple average of the ECL for each of the 50 scenarios simulated
using a Monte Carlo model. The Monte Carlo approach has the advantage that it generates many alternative scenarios that
cover our global footprint. The range of scenarios is restricted through the use of ceil
ings and floors appl
ied to the underlying
macroeconomic variables. The current set of ceil
ings and floors generated a relat
ively narrow range of forecasts at 31
December 2024 and will be redeveloped in the first quarter of 2025.
Prior to this, a $28 mill
ion non-l
inear
ity PMA has been appl
ied, $13 mill
ion for CIB and $15 m
ill
ion for WRB. 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 Tens
ions’ scenarios which
are presented on page 243 and comparing this to the unweighted Base Forecast ECL. The non-linear
ity PMA represents the
difference 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 total amount of non-linear
ity
includ
ing the PMA
is $43 mill
ion (31 December 2023: $44 m
ill
ion). The CIB portfol
io accounted
for $24 mill
ion (31 December 2023: $20 m
ill
ion) of the calculated non-l
inear
ity, w
ith the remain
ing $19 m
ill
ion (31 December 2023:
$18 mill
ion) attr
ibutable to WRB portfolios.
The impact of multiple economic scenarios on total modelled ECL is set out in the table below, together with the management
overlay and other judgemental adjustments.
Management | ||||
overlays | ||||
Multiple | and other | |||
economic | judgemental | Total | ||
Base forecast | scenarios 1 | adjustments | modelled ECL 2 | |
$mill ion | $mill ion | $mill ion | $mill ion | |
Total modelled expected credit loss at 31 December 2024 | 1,048 | 43 | 190 | 1,281 |
Total modelled expected credit loss at 31 December 2023 | 1,071 | 44 | 165 | 1,280 |
1
Includes an upwards judgemental PMA of $28 mill
ion (31 December 2023: n
il)
2
Total modelled ECL comprises stage 1 and stage 2 balances of $1,130 mill
ion (31 December 2023: $1,105 m
ill
ion) and $151 m
ill
ion (31 December 2023: $193 m
ill
ion) of
modelled ECL on stage 3 loans
The average ECL under multiple scenarios is 4 per cent (31 December 2023: 4 per cent) higher than the ECL calculated using
only the most likely scenario (the Base Forecast). Portfolios that are more sensit
ive to non-l
inear
ity
include those with greater
leverage and/or a longer tenor, such as Project and Shipp
ing F
inance portfolios. Other portfolios display min
imal non-l
inear
ity
owing to lim
ited respons
iveness to macroeconomic impacts for structural reasons, such as sign
ificant collateral
isat
ion as w
ith
the WRB mortgage portfolios.
Judgemental adjustments
As at 31 December 2024, the Group held judgemental adjustments for ECL as set out in the table below. All of the judgemental
adjustments have been determined after taking account of the model performance PMAs reported on page 237. They are
reassessed quarterly and are reviewed and approved by the IFRS 9 Impairment Committee (IIC) and will be released when no
longer relevant.
Corporate & | Wealth & Retail Banking | |||||||
Investment | Credit | Central & | ||||||
Banking | Mortgages | Cards | Other | Total | Ventures | other | Total | |
31 December 2024 | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Judgemental post model adjustments | 13 | – | 9 | (17) | (8) | – | – | 5 |
Judgemental management overlays: | ||||||||
– China CRE | 70 | – | – | – | – | – | – | 70 |
– Other | 109 | – | 5 | 22 | 27 | 7 | – | 143 |
Total judgemental adjustments | 192 | – | 14 | 5 | 19 | 7 | – | 218 |
Judgemental adjustments by stage: | ||||||||
Stage 1 | 27 | – | 10 | (11) | (1) | 4 | - | 30 |
Stage 2 | 165 | – | 5 | 25 | 30 | 3 | – | 198 |
Stage 3 | – | – | (1) | (9) | (10) | – | – | (10) |
31 December 2023 | ||||||||
Judgemental post model adjustments | – | – | 1 | 1 | 2 | – | – | 2 |
Judgemental management overlays: | ||||||||
– China CRE | 141 | – | – | – | – | – | – | 141 |
– Other | – | 1 | 2 | 2 | 5 | – | 17 | 22 |
Total judgemental adjustments | 141 | 1 | 3 | 3 | 7 | – | 17 | 165 |
Judgemental adjustments by stage: | ||||||||
Stage 1 | 17 | 1 | 3 | 6 | 10 | – | – | 27 |
Stage 2 | 124 | – | – | (3) | (3) | – | 17 | 138 |
Stage 3 | – | – | – | – | – | – | – | – |
Risk review
Risk profile
242
Standard Chartered
– Annual Report 2024
Judgemental PMAs
As at 31 December 2024, judgemental PMAs to increase ECL
by a net $5 mill
ion (31 December 2023: $2 m
ill
ion
increase)
have been applied. $28 mill
ion (31 December 2023: n
il) of
the increase in ECL related to multiple economic scenarios,
$13 mill
ion
in CIB and $15 mill
ion
in WRB (see ‘Impact of
multiple economic scenarios’ section). This was partly offset
by a reduction of ECL of $23 mill
ion for certa
in WRB models,
primar
ily to adjust for temporary factors
impact
ing modelled
outputs. These will be released when these factors normalise.
Judgemental management overlays
China CRE
The real estate market in China has been in a downturn since
late 2021, as evidenced by continued decline in sales, and
investments in the sector. Liqu
id
ity issues experienced by
Chinese property developers continued into 2023, with more
developers defaulting on their obligat
ions both offshore and
onshore. During 2023, authorit
ies on the ma
inland introduced
a slew of polic
ies to help rev
ive the sector and restore buying
sentiments. Relaxed monetary policy and fiscal stimulus
packages continued in 2024, which had assisted in arresting
the drop in new home sales and stabil
is
ing new home sales in
late 2024 to an extent in some cit
ies, but home pr
ices remain
muted overall. Continued policy relaxations, includ
ing those
related to house purchase restrict
ions, complet
ion support for
elig
ible projects from onshore financial
inst
itut
ions, relaxation
in mortgage rates, and further support for affordable housing,
are key for reversing the continued decline in sales and
investments and ensuring continued stabil
isat
ion in 2025.
The Group’s loans and advances to China CRE clients was
$1.9 bill
ion at 31 December 2024 (31 December 2023: $2.4
bill
ion). He
ightened risk management continues to be carried
out, with a focus on managing upcoming maturit
ies through
refinancing and/or repayment. No new financing transact
ions
were entered into, and total repayments amounted to around
$500 mill
ion dur
ing 2024. Clients with exposure maturing
with
in the next 12 months have been placed on purely
precautionary or non-purely precautionary early alert, where
appropriate, for closer monitor
ing. G
iven the evolving nature
of the risks in the China CRE sector, a management overlay of
$70 mill
ion (31 December 2023: $141 m
ill
ion) has been taken by
estimat
ing the
impact of further deteriorat
ion to exposures
in
this sector. The decrease from 31 December 2023 was primar
ily
driven by repayments and util
isat
ion due to movement to
stage 3.
Other
In CIB, addit
ional overlays of $109 m
ill
ion (31 December 2023:
nil) have been taken, $58 mill
ion of wh
ich is in Hong Kong,
with the remainder relating to Bangladesh and an immater
ial
amount for climate risks. The overlay in Hong Kong reflects
subdued economic activ
ity and
increas
ing commerc
ial
property vacancy rates, which contributes to an uncertain
outlook that are not yet fully reflected in the credit grades
and modelled ECL. The risk of further impa
irment rema
ins as
a result of subdued economic activ
ity
in the property sector
and the related liqu
id
ity constraints faced by counterparties
as a result. The overlay in Bangladesh reflects the polit
ical
situat
ion that has contr
ibuted to an increas
ing level of
uncertainty in the macroeconomic outlook. The overlays for
Hong Kong and Bangladesh have been determined by
estimat
ing the
impact of a deteriorat
ion to certa
in exposures
in these countries.
In WRB, overlays of $27 mill
ion
includes $21 mill
ion
in Korea
to cover the risks relating to the failure of two e-commerce
payment platforms in 2024, increased bankruptcy trends
in certain markets and an immater
ial adjustment for
climate risks.
Further details on the adjustment for Climate Risk are set out
in Note 1 of the ‘Notes to the financ
ial statements’ sect
ion.
Overlays held at 31 December 2023 of $5 mill
ion
in WRB to
capture macroeconomic environment challenges caused by
sovereign defaults or heightened sovereign risk, and $17 mill
ion
applied in Central and other items due to a temporary market
dislocat
ion
in the Africa and Middle East region which were
fully released during 2024.
Stage 3 assets
Credit-impa
ired assets managed by Stressed Asset Group
(SAG) incorporate forward-looking economic assumptions
in respect of the recovery outcomes ident
ified and are
assigned ind
iv
idual probabil
ity we
ight
ings per IFRS 9.
These assumptions are not based on a Monte Carlo
simulat
ion but are
informed by the Base Forecast.
Sensit
iv
ity of ECL 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 the overall ECL. These encompassed
single variable and multi-variable exercises, using simple up/
down variat
ion and extracts from actual calculat
ion data,
as well as bespoke scenario design 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 believes 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 Tens
ions’ scenario is
characterised by an escalating trade war between the US
and China and other economies. The ‘Higher for Longer
Commodit
ies and Rates’ scenar
io explores the impact from
stick
ier than expected
inflat
ion due to pers
istent shipp
ing
disrupt
ions and r
ise in energy prices amid fears of an
escalation of the Middle East conflict.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
243
Global Trade and | Higher for longer: | |||||
Baseline | Geopolit ical Tens ions | 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) |
Hong Kong GDP | 2.2 | 3.5/1.5 | (1.0) | 1.6/(8.0) | 1.4 | 2.2/(0.1) |
Hong Kong unemployment | 3.1 | 3.2/3.0 | 6.2 | 7.2/3.7 | 4.7 | 6.3/3.2 |
Hong Kong property prices | 3.8 | 6.8/(2.6) | (0.1) | 30.9/(34.8) | 2.8 | 8.9/(3.5) |
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 |
Period covered from Q1 2025 to Q4 2029
Base (GDP, YoY%) | Global Trade and Geopolit ical Tens ions | Difference from Base | |||||||||||||
2025 | 2026 | 2027 | 2028 | 2029 | 2025 | 2026 | 2027 | 2028 | 2029 | 2025 | 2026 | 2027 | 2028 | 2029 | |
China | 4.5 | 4.3 | 4.1 | 3.9 | 3.8 | 2.1 | (2.0) | (1.0) | 1.4 | 3.5 | (2.4) | (6.3) | (5.1) | (2.6) | (0.3) |
Hong Kong | 2.9 | 2.5 | 2.1 | 1.9 | 1.6 | (6.3) | (1.4) | 0.1 | 0.9 | 1.4 | (9.1) | (3.9) | (2.0) | (1.0) | (0.2) |
US | 1.4 | 2.2 | 2.4 | 2.1 | 2.0 | (0.9) | (2.2) | 0.8 | 1.8 | 2.2 | (2.3) | (4.4) | (1.6) | (0.3) | 0.1 |
Singapore | 2.4 | 2.1 | 2.2 | 2.4 | 2.5 | (2.9) | (3.5) | 1.0 | 2.8 | 2.6 | (5.3) | (5.6) | (1.2) | 0.4 | 0.1 |
India | 6.8 | 6.3 | 6.7 | 6.5 | 6.5 | 4.6 | 1.8 | 5.3 | 5.8 | 6.1 | (2.2) | (4.4) | (1.4) | (0.8) | (0.4) |
Each year is from Q1 to Q4. For example 2025 is from Q1 2025 to Q4 2025.
Base (GDP, YoY%) | Higher for longer: Commodit ies and Rates | Difference from Base | |||||||||||||
2025 | 2026 | 2027 | 2028 | 2029 | 2025 | 2026 | 2027 | 2028 | 2029 | 2025 | 2026 | 2027 | 2028 | 2029 | |
China | 4.5 | 4.3 | 4.1 | 3.9 | 3.8 | 2.5 | 3.3 | 4.1 | 3.9 | 3.8 | (2.0) | (1.0) | 0.0 | 0.0 | (0.0) |
Hong Kong | 2.9 | 2.5 | 2.1 | 1.9 | 1.6 | 0.3 | 1.1 | 2.1 | 1.9 | 1.6 | (2.6) | (1.4) | (0.0) | (0.0) | 0.0 |
US | 1.4 | 2.2 | 2.4 | 2.1 | 2.0 | (1.4) | 0.5 | 2.4 | 2.1 | 2.0 | (2.8) | (1.7) | (0.0) | 0.0 | 0.0 |
Singapore | 2.4 | 2.1 | 2.2 | 2.4 | 2.5 | (0.2) | 0.9 | 2.2 | 2.4 | 2.5 | (2.6) | (1.2) | (0.0) | (0.0) | 0.0 |
India | 6.8 | 6.3 | 6.7 | 6.5 | 6.5 | 4.9 | 5.8 | 6.7 | 6.5 | 6.5 | (1.9) | (0.5) | (0.0) | 0.0 | 0.0 |
Each year is from Q1 to Q4. For example 2025 is from Q1 2025 to Q4 2025
The total modelled stage 1 and 2 ECL provis
ions (
includ
ing
both on and off-balance sheet instruments) would be
approximately $84 mill
ion h
igher under the ‘Higher for Longer
Commodit
ies and Rates’ scenar
io, and $258 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). Stage 2 exposures as a proportion of stage 1 and 2
exposures would increase from 2.7 per cent in the base case
to 2.8 per cent and 3.5 per cent respectively under the ‘Higher
for Longer Commodit
ies and Rates’, and ‘Global Trade and
Geopolit
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 ECL in
CIB came from the main corporate CRE and Project Finance
portfolios. For the main corporate portfolios, ECL would
increase by $18 mill
ion and $47 m
ill
ion for ‘H
igher for Longer
Commodit
ies and Rates’, and ‘Global Trade and Geopol
it
ical
Tensions’ scenarios respectively and the proportion of stage 2
exposures would increase from 4.1 per cent in the base case to
4.3 per cent and 6.1 per cent respectively.
For the WRB portfolios, most of the increase in ECL came from
the unsecured retail portfolios, particularly Korea Personal
Loans and the credit card portfolios in Hong Kong and
Singapore, although Private Banking was also impacted in
the ‘Global Trade and Geopolit
ical Tens
ions’ scenario. Under
the ‘Higher for Longer Commodit
ies and Rates’, and ‘Global
Trade and Geopolit
ical Tens
ions’ scenarios, Credit card ECL
would increase by $18 mill
ion and $32 m
ill
ion respect
ively,
largely in the Singapore and Hong Kong portfolios and the
proportion of stage 2 credit card exposures would increase
from 1.8 per cent in the base case to 2.3 per cent and
2.9 per cent for each scenario respectively, with the Singapore
portfolio most impacted. Mortgages ECL would increase by
$2 mill
ion and $19 m
ill
ion for each scenar
io respectively,
with portfolios in Korea impacted in the ‘Higher for Longer
Commodit
ies and Rates’ scenar
io, and Malaysia in the ‘Global
Trade and Geopolit
ical Tens
ions’ scenario, and the proportion
of stage 2 mortgages would increase from 1.0 per cent in the
base case to 1.4 per cent and 1.3 per cent respectively.
There was no material change in modelled stage 3 provis
ions
as these primar
ily relate to unsecured WRB 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.
Risk review
Risk profile
244
Standard Chartered
– Annual Report 2024
Higher for | |||||
Longer | Global Trade | ||||
Gross as | ECL as | Commodit ies | and Geopolit ical | ||
reported 1 | reported 2 | ECL Base case | and Rates | Tensions | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Stage 1 modelled | |||||
Corporate & Investment Banking | 367,106 | 106 | 95 | 113 | 125 |
Wealth & Retail Banking | 179,580 | 397 | 387 | 406 | 428 |
Ventures | 1,391 | 27 | 27 | 27 | 27 |
Central & Other items | 172,602 | 22 | 22 | 23 | 25 |
Total stage 1 excluding management judgements | 720,679 | 552 | 531 | 569 | 605 |
Stage 2 modelled | |||||
Corporate & Investment Banking | 14,869 | 198 | 185 | 206 | 315 |
Wealth & Retail Banking | 2,030 | 116 | 107 | 132 | 161 |
Ventures | 48 | 24 | 24 | 24 | 24 |
Central & Other items | 1,660 | 1 | 1 | 1 | 1 |
Total stage 2 excluding management judgements | 18,607 | 339 | 317 | 363 | 501 |
Total Stage 1 & 2 modelled | |||||
Corporate & Investment Banking | 381,975 | 304 | 280 | 319 | 440 |
Wealth & Retail Banking | 181,610 | 513 | 494 | 538 | 589 |
Ventures | 1,439 | 51 | 51 | 51 | 51 |
Central & Other items | 174,262 | 23 | 23 | 24 | 26 |
Total excluding management judgements | 739,286 | 891 | 848 | 932 | 1,106 |
Stage 3 exposures excluding other assets | 6,999 | 4,095 | |||
Other financial assets 3 | 101,755 | 63 | |||
ECL from management judgements | 218 | ||||
Total financial assets reported at 31 December 2024 | 848,040 | 5,267 |
1
Gross balances includes both on- and off- balance sheet instruments; allocation between stage 1 and 2 will differ by scenario
2
Includes ECL for both on- and off-balance sheet instruments
3
Includes cash and balances at central banks, Accrued income, Other financ
ial assets; and Assets held for sale
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 residual term of the exposure.
The absolute measure of increase in credit risk is used to
capture instances where the IFRS 9 PDs on exposures are
relatively low at 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
orig
inated before 1 January 2018, the bank
is util
is
ing the
low Credit Risk simpl
ified approach, where debt secur
it
ies
with 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 WRB (excluding Private Banking) clients, portfolio specif
ic
quantitat
ive thresholds are appl
ied to Credit Card portfolios in
Hong Kong, Singapore, Malaysia and UAE and Personal Loan
portfolios in Taiwan (with a revis
ion to the thresholds appl
ied
in 2024). During 2024 portfolio specif
ic quant
itat
ive thresholds
are also now being applied to Hong Kong Personal Loans and
Business Clients Mortgage portfolio in India. The impact of
the threshold changes in 2024 was not material. For Credit
Card portfolios, 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 with
in a range of customer
util
isat
ion lim
it. For Personal Loans portfol
ios, the thresholds
include relative and absolute increases in IFRS 9 PD cut-offs for
those exposures that are over six months old in the portfolio,
have certain months left in the loan tenor and have certain
behaviour scores. For Business Clients Mortgage, the threshold
includes relative and absolute increases in IFRS 9 PD cut-offs
for those exposures that were in high arrear grade bucket at
least once in the last 12 months.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
245
The range of thresholds applied are:
Relative IFRS 9 | Absolute IFRS 9 | Customer | Average | ||
PD increase | PD increase | util isat ion | Remain ing tenor | IFRS 9 PD | |
Portfolio | (%) | (%) | (%) | (months) | (lifet ime) |
Credit cards – Current | 50–150% | 3.4% – 9.3% | 15% – 90% | – | 4.51% – 11.6% |
Credit cards – 1-29 days past due | 100% – 210% | 3.5% – 6.1% | 25% – 67% | – | 1.5% – 18.5% |
Personal loans – Current | 100% – 250% | 1.0% | – | >60 | – |
Personal loan – 1-29 days past due | 200% – 300% | 1.5% | – | >12 | – |
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 appl
ied 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 l
ifet
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 (lending against divers
ified
liqu
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 tr
igger. 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.
Qualitat
ive cr
iter
ia
Qualitat
ive factors that
ind
icate that there has been a
sign
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 mon
itor
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 likel
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 operat
ing 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 30 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 days past
due (DPD) on contractual payments of princ
ipal and/or
interest that have not been captured by the criter
ia above are
considered 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 ECL
provis
ions are the value of gross charge-off and recover
ies.
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
provis
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
special
ist recovery un
it, Stressed Asset Group (SAG), which is
independent of the Client Coverage/Relationsh
ip Managers.
Where a portion 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 SAG 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 considered. In any decis
ion relat
ing to the
rais
ing of prov
is
ions, the Group attempts to balance
economic 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 recovering a portion of an exposure against which an
impa
irment prov
is
ion has been ra
ised, that amount will
be written off.
Risk review
Risk profile
246
Standard Chartered
– Annual Report 2024
Governance of PMAs and applicat
ion of expert cred
it
judgement in respect of ECL
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 ECL are rev
iewed and
approved by the Group Credit Model Assessment Committee
(CMAC) or Delegate Model Approver (DMA), which is
appointed by the Model Risk Committee. CMAC has the
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
validated by GMV, a function which is independent of
the business and the model developers. GMV’s analysis
comprises review of model documentation, model design
and methodology, data validat
ion, rev
iew of the model
development and calibrat
ion process, out-of-sample
performance testing, and assessment of compliance
review against IFRS 9 rules and internal standards.
Model performance PMAs
The process of PMA 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 mon
itor
ing
thresholds or validat
ion standards. The level of PMAs and
remediat
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
(SPPI) tests
•
reviews and approves ECL 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 ECL for fair
value through other comprehensive income (FVOCI) 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
ECL calculations
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 ECL
provis
ions and any judgemental management overlays
that may be necessary.
The IIC is supported by an Expert Panel which also reviews
and challenges the base case projections and 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 review and Capital review
Standard Chartered
– Annual Report 2024
247
Traded Risk
Market Risk (audited)
Market Risk is the potential for fair value loss due to adverse
moves in financ
ial 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
which 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 202).
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 movements (audited)
Value at Risk (VaR) allows the Group to manage Market Risk
across the trading book and most of the fair valued non-
trading books.
The average level of total trading and non-trading VaR
in 2024 was $41.8 mill
ion, 22 per cent lower than 2023
($53.3 mill
ion). The year end level of total trad
ing and non-
trading VaR in 2024 was $43.3 mill
ion, 3 per cent lower than
2023 ($44.5 mill
ion), due to a reduct
ion in market volatil
ity.
For the trading book, the average level of VaR in 2024 was
$21.1 mill
ion, 2 per cent lower than
in 2023 ($21.5 mill
ion).
Trading activ
it
ies have remained relatively unchanged,
and client driven.
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 | 32.8 | 43.9 | 18.6 | 38.8 | 39.5 | 54.1 | 23.2 | 30.5 |
Credit Spread Risk | 20.4 | 31.3 | 12.8 | 16.6 | 33.8 | 48.0 | 25.0 | 31.7 |
Foreign Exchange Risk | 9.2 | 15.0 | 5.0 | 7.4 | 7.0 | 12.2 | 4.2 | 7.4 |
Commodity Risk | 5.3 | 10.0 | 2.9 | 4.6 | 5.8 | 9.7 | 3.7 | 4.3 |
Equity Risk | 0.4 | 0.9 | – | – | 0.1 | 0.4 | – | – |
Divers ification effect 3 | (26.3) | NA | NA | (24.1) | (32.9) | NA | NA | (29.4) |
Total | 41.8 | 53.1 | 29.4 | 43.3 | 53.3 | 65.5 | 44.2 | 44.5 |
| 2024 | 2023 | |||||||
Average | High | Low | Year end | Average | High | Low | Year end | |
Trading¹ | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Interest Rate Risk | 12.7 | 22.0 | 7.0 | 12.0 | 13.1 | 20.4 | 7.7 | 11.6 |
Credit Spread Risk | 6.6 | 9.6 | 4.8 | 5.4 | 9.4 | 12.4 | 7.4 | 9.4 |
Foreign Exchange Risk | 9.2 | 15.0 | 5.0 | 7.4 | 7.0 | 12.2 | 4.2 | 7.4 |
Commodity Risk | 4.8 | 10.0 | 2.4 | 4.3 | 5.8 | 9.7 | 3.7 | 4.4 |
Equity Risk | – | – | – | – | – | – | – | – |
Divers ification effect 3 | (12.2) | NA | NA | (8.3) | (13.8) | NA | NA | (11.5) |
Total | 21.1 | 33.1 | 13.0 | 20.8 | 21.5 | 30.6 | 14.7 | 21.3 |
| 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 | 28.0 | 35.5 | 17.4 | 32.5 | 34.2 | 43.6 | 19.7 | 23.9 |
Credit Spread Risk | 17.2 | 24.8 | 10.0 | 15.7 | 28.3 | 40.1 | 21.5 | 24.4 |
Foreign Exchange Risk | – | – | – | – | – | – | – | – |
Commodity Risk | 1.3 | 1.8 | 0.6 | 0.8 | 0.1 | 0.5 | 0.3 | 0.5 |
Equity Risk | 0.4 | 0.9 | – | – | 0.1 | 0.4 | – | – |
Divers ification effect 3 | (12.7) | NA | NA | (10.2) | (18.7) | NA | NA | (13.2) |
Total | 34.2 | 44.3 | 28.6 | 38.8 | 44.0 | 53.4 | 32.0 | 35.6 |
Risk review
Risk profile
248
Standard Chartered
– Annual Report 2024
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 | 41.8 | 53.1 | 29.4 | 43.3 | 53.3 | 65.5 | 44.2 | 44.5 |
Trading 1 | ||||||||
Macro Trading 4 | 17.0 | 29.9 | 10.0 | 17.1 | 13.8 | 20.2 | 9.2 | 15.4 |
Global Credit | 6.8 | 11.1 | 4.3 | 5.8 | 12.8 | 18.2 | 8.5 | 10.1 |
XVA | 3.3 | 4.4 | 2.4 | 2.4 | 4.8 | 7.0 | 3.4 | 4.5 |
Divers ification effect 3 | (6.0) | NA | NA | (4.5) | (9.9) | NA | NA | (8.7) |
Total | 21.1 | 33.1 | 13.0 | 20.8 | 21.5 | 30.6 | 14.7 | 21.3 |
Non-trading 2 | ||||||||
Treasury | 32.9 | 40.8 | 26.9 | 38.6 | 43.4 | 50.2 | 31.1 | 34.9 |
Global Credit | 5.0 | 13.4 | 2.4 | 8.8 | 3.9 | 13.6 | 2.0 | 4.0 |
Listed Private Equity | 0.4 | 0.9 | – | – | 0.1 | 0.4 | – | – |
Divers ification effect 3 | (4.1) | NA | NA | (8.6) | (3.4) | NA | NA | (3.3) |
Total | 34.2 | 43.3 | 28.6 | 38.8 | 44.0 | 53.4 | 32.0 | 35.6 |
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 perm
itted 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
Risks not in VaR
In 2024, the main market risks not reflected in VaR were:
•
basis risks for which the histor
ical market pr
ice data is lim
ited and
is therefore proxied, giv
ing r
ise to potential proxy basis risk
that is not captured in VaR
•
potential depeg risk from currencies currently pegged or managed, where the histor
ical one-year VaR observat
ion period
may not reflect the possib
il
ity of a change in the currency regime or a sudden depegging
•
potential understatement of VaR when abrupt increases in market volatil
ity are not adequately captured by the VaR model.
Addit
ional cap
ital is set aside to cover such ‘risks not in VaR’.
Backtesting
In 2024, there were no regulatory backtesting negative exceptions at Group level (in 2023 there were five).
An enhancement to the VaR model will be implemented from January 2025 to increase the model’s responsiveness to abrupt
upturns in market volatil
ity.
The graph below illustrates the performance of the VaR model used in capital calculations. It compares the 99 percentile profit
and loss confidence level given by the VaR model with the hypothetical profit and loss of each day given the actual market
movement ignor
ing any
intra-day trading activ
ity.
-60
-40
-20
0
20
40
60
80
2024 Backtesting chart
Internal model approach regulatory trading book at Group level
Hypothetical profit and loss (P&L) versus VaR (99 per cent, one day)
Hypothetical P&L
Posit
ive VaR at 99%
Negative VaR at 99%
Negative exceptions
Jan 2024
Feb 2024
Mar 2024
Apr 2024
May 2024
Jun 2024
Jul 2024
Aug 2024
Sep 2024
Oct 2024
Nov 2024
Dec 2024
Posit
ive except
ions
Trading loss days
2024 | 2023 | |
Number of loss days reported for Markets trading book total product income 1 | 12 | 16 |
1
Includes credit valuation adjustment (CVA) and funding valuation adjustment (FVA), and excludes Treasury business (non-trading), period
ic valuat
ion changes
for Capital Markets, expected loss provis
ions, overn
ight indexed swap (OIS) discount
ing and account
ing adjustments such as debit valuation adjustments
Risk review and Capital review
Standard Chartered
– Annual Report 2024
249
Average daily income earned from Market Risk-related activ
it
ies¹ (audited)
Trading: The average level of total trading daily income in 2024 was $13.3 mill
ion, 10.8 per cent h
igher than 2023 ($12 mill
ion).
The increase is largely attributable higher client demand for derivat
ive products across Greater Ch
ina and North Asia coupled
with larger holdings of government and corporate bonds in antic
ipat
ion of increased demand by clients.
Non-trading: The average level of total non-trading daily income in 2024 was $2.7 mill
ion, attr
ibutable to translation gains on
the revaluation of FX posit
ions
in Egypt, and FX revaluation gains across currencies in the Markets Credit Trading business.
2024 | 2023 | |
Trading | $mill ion | $mill ion |
Interest Rate Risk | 5.2 | 4.5 |
Credit Spread Risk | 1.7 | 1.2 |
Foreign Exchange Risk | 5.6 | 5.5 |
Commodity Risk | 0.8 | 0.8 |
Equity Risk | – | – |
Total | 13.3 | 12.0 |
Non-trading | $mill ion | $mill ion |
Interest Rate Risk | 0.6 | (0.1) |
Credit Spread Risk | 2.1 | (0.7) |
Equity Risk | – | 0.1 |
Total | 2.7 | (0.7) |
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 while 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 | |
Hong Kong dollar | 4,232 | 4,662 |
Renminb i | 3,593 | 3,523 |
Indian rupee | 3,480 | 3,309 |
Singapore dollar | 3,306 | 2,415 |
Malaysian ringg it | 1,539 | 1,540 |
Korean won | 1,363 | 2,114 |
Bangladeshi taka | 1,113 | 1,007 |
Euro | 1,112 | 1,125 |
Taiwanese dollar | 1,087 | 1,222 |
UAE dirham | 807 | 709 |
Thai baht | 763 | 782 |
Pakistan i rupee | 392 | 306 |
Indonesian rupiah | 230 | 293 |
Other | 3,407 | 3,206 |
26,424 | 26,213 |
As at 31 December 2024, the Group had taken net investment hedges using derivat
ive financial
instruments to partly cover
its exposure to the Hong Kong dollar of $5,359 mill
ion (31 December 2023: $5,603 m
ill
ion), Korean won of $3,048 m
ill
ion
(31 December 2023: $2,884 mill
ion), Ind
ian rupee of $1,784 mill
ion (31 December 2023: $1,809 m
ill
ion), Renm
inb
i of $1,640 m
ill
ion
(31 December 2023: $1,516 mill
ion), UAE d
irham of $1,470 mill
ion (31 December 2023: $1,470 m
ill
ion), Ta
iwanese dollar of
$1,092 mill
ion (31 December 2023: $1,025 m
ill
ion), S
ingapore dollar of $0 mill
ion (2023: $1,047 m
ill
ion) and South Afr
ican rand
of $0 mill
ion (31 December 2023:$64 m
ill
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 $262 mill
ion (31 December 2023: $260 m
ill
ion). Changes
in
the valuation of these posit
ions are taken to reserves. For analys
is of the Group’s capital posit
ion and requ
irements, refer to the
‘Capital review’ section (page 270).
Counterparty Credit Risk
Counterparty Credit Risk is the potential for loss in the event of the default of a derivat
ive counterparty, after tak
ing into
account the value of elig
ible collaterals and r
isk mit
igat
ion techniques. The Group’s counterparty credit exposures are included
in the Credit Risk section.
Derivat
ive financial
instruments Credit Risk mit
igat
ion
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.
In addit
ion, the Group enters
into credit support annexes (CSAs) with counterparties where collateral is deemed a necessary
or desirable mit
igant to the exposure. Cash collateral
includes collateral called under a variat
ion marg
in process from
counterparties if total uncollateralised mark-to-market exposure exceeds the threshold and min
imum transfer amount
specif
ied
in the CSA. With certain counterparties, the CSA is reciprocal and requires us to post collateral if the overall mark-to-
market values of posit
ions are
in the counterparty’s favour and exceed an agreed threshold.
Risk review
Risk profile
250
Standard Chartered
– Annual Report 2024
Liqu
id
ity and Funding Risk
Liqu
id
ity and Funding Risk is the risk that the Group may not
have sufficient stable or d
iverse sources of funding to meet its
obligat
ions as they fall due.
The Group’s Liqu
id
ity and Funding Risk framework requires
each country to ensure that it operates with
in predefined
liqu
id
ity lim
its and rema
ins in compliance with Group
liqu
id
ity polic
ies and pract
ices, as well as local regulatory
requirements.
The Group achieves this through a combinat
ion of sett
ing
Risk Appetite and associated lim
its, pol
icy formation, risk
measurement and monitor
ing, prudent
ial and internal stress
testing, governance and review.
Throughout 2024, the Group retained a robust liqu
id
ity
posit
ion across key metr
ics. The Group continues to focus
on improv
ing the qual
ity and divers
ification of
its funding
mix and remains committed to supporting its clients.
Primary sources of funding (audited)
The Group’s funding strategy is largely driven by its policy to
mainta
in adequate l
iqu
id
ity at all times, in all geographic
locations and for all currencies. This is done to ensure the
Group can meet all of its obligat
ions as they fall due.
The Group’s funding profile is therefore well divers
ified
across different sources, maturit
ies and currenc
ies.
The Group‘s assets are funded predominantly by customer
deposits, supplemented with wholesale funding, which is
divers
ified by type and matur
ity.
The Group mainta
ins access to wholesale fund
ing markets
in all major financ
ial centres
in which it operates. This seeks
to ensure that the Group has market intell
igence, ma
inta
ins
stable funding lines and can obtain optimal pric
ing when
performing cashflow management activ
it
ies.
In 2024, the Group issued approximately $9.1 bill
ion worth of
securit
ies from
its holding company, Standard Chartered PLC
(2023 $8.1 bill
ion of sen
ior debt securit
ies). The
issuances
included $1.6 bill
ion of Add
it
ional T
ier 1 securit
ies and
$7.5 bill
ion of sen
ior debt securit
ies across mult
iple currencies.
Over this same period, there were Addit
ional T
ier 1 calls of
$0.6 bill
ion, T
ier 2 redemptions (calls & maturit
ies) of around
$1.6 bill
ion and sen
ior calls of $6.3 bill
ion. In the next 12 months,
approximately $7.8 bill
ion of the Group’s Add
it
ional T
ier 1,
senior and subordinated debt securit
ies are e
ither falling
due for repayment contractually or callable by the Group.
Group’s composit
ion of l
iab
il
it
ies and equ
ity
31 December 2024
4.2
9.7
9.2
Derivat
ive financial
instruments
Deposits by banks
Debt securit
ies
in issue
Customer accounts
Other liab
il
it
ies
Equity
Subordinated liab
il
it
ies
and other borrowed funds
61.6
8.1
1.2
6.0
100%
Liqu
id
ity and Funding Risk metrics
The Group continually monitors key liqu
id
ity metrics, both on
a country basis and consolidated across the Group.
The following liqu
id
ity and funding Board Risk Appetite
metrics define the maximum amount and type of risk that the
Group is will
ing to assume
in pursuit of its strategy: liqu
id
ity
coverage ratio (LCR), liqu
id
ity stress survival horizons, recovery
capacity and net stable funding ratio (NSFR). In addit
ion to
the Board Risk Appetite, there are further lim
its that apply at
Group and country level such as external wholesale borrowing
(WBE) and cross currency lim
its.
Liqu
id
ity coverage ratio (LCR)
The LCR is a regulatory requirement set to ensure the Group
has sufficient unencumbered h
igh-quality liqu
id assets
to meet its liqu
id
ity needs in a 30-calendar-day liqu
id
ity
stress scenario.
The Group monitors and reports its liqu
id
ity posit
ions under
the Liqu
id
ity Coverage Ratio per PRA rulebook and has
mainta
ined
its LCR above the prudential requirement.
The Group mainta
ined robust l
iqu
id
ity ratios throughout 2024.
At the reporting date, the Group LCR was 138 per cent
(31 December 2023: 145 per cent), with a surplus to both
Board-approved Risk Appetite and regulatory requirements.
Adequate liqu
id
ity was held across our footprint to meet all
local prudential LCR requirements where applicable.
The Liqu
id
ity buffer reported is after deductions made to
reflect the impact of lim
itat
ions in the transferabil
ity of ent
ity
liqu
id
ity around the Group. This resulted in an adjustment of
$35 bill
ion to LCR HQLA as at 31 December 2024.
2024 | 2023 | |
$mill ion | $mill ion | |
Liqu id ity buffer | 170,306 | 185,643 |
Total net cash outflows | 123,226 | 128,111 |
Liqu id ity coverage ratio | 138% | 145% |
Risk review and Capital review
Standard Chartered
– Annual Report 2024
251
Stressed coverage
The Group intends to mainta
in a prudent and susta
inable
funding and liqu
id
ity posit
ion,
in all countries and currencies,
such that it can withstand a severe but plausible liqu
id
ity
stress.
Our approach to managing liqu
id
ity and funding is reflected
in the Board-level Risk Appetite Statement which includes
the following:
“The Group should have sufficient stable and d
iverse sources
of funding to meet its contractual and contingent obligat
ions
as they fall due.”
The Group’s internal liqu
id
ity adequacy assessment process
(‘ILAAP’) stress testing framework covers the following
stress scenarios:
•
Standard Chartered-specif
ic – Captures the l
iqu
id
ity
impact from an id
iosyncrat
ic event affecting Standard
Chartered only with the rest of the market assumed to be
operating normally.
•
Market wide – Captures the liqu
id
ity impact from a
market-wide cris
is affect
ing all partic
ipants
in a country,
region or globally.
•
Combined – Assumes both Standard Chartered-specif
ic
and Market-wide events affect the Group simultaneously
and hence is the most severe scenario.
All scenarios include, but are not lim
ited to, modelled outflows
for retail and wholesale funding, off-balance sheet funding
risk, cross-currency funding risk, intraday risk, franchise risk
and risks associated with a deteriorat
ion of a firm’s cred
it
rating. Concentration risk approach captures single name
and industry concentration.
ILAAP stress testing results show that, as at 31 December 2024,
Group and all countries were able to survive for a period of
time with posit
ive surpluses as defined under each scenar
io.
The results take into account currency convertib
il
ity and
portabil
ity constra
ints while calculating the liqu
id
ity surplus
at Group level.
Standard Chartered Bank’s credit ratings as at 31 December
2024 were A+ with stable outlook (Fitch), A+ with stable
outlook (S&P) and A1 with posit
ive outlook (Moody’s). As of
31 December 2024, the estimated contractual outflow of a
three-notch long-term ratings downgrade is $1.0 bill
ion.
External wholesale borrowing
A risk trigger is set to prevent excessive reliance on wholesale
borrowing. With
in the definit
ion of wholesale borrowing,
triggers are applied to all branches and operating subsid
iar
ies
in the Group.
Advances-to-deposits ratio
This is defined as the ratio of total loans and advances to
customers relative to total customer deposits. An advances-
to-deposits ratio below 100 per cent demonstrates that
customer deposits exceed customer loans as a result of the
emphasis placed on generating a high level of funding from
customers.
The Group’s advances-to-deposits ratio has remained stable
in 2024 at 53.3 per cent. Deposits from customers as at
31 December 2024 are $486,261 mill
ion (31 December 2023:
$486,666 mill
ion).
2024 | 2023 | |
$mill ion | $mill ion | |
Total loans and advances to customers 1,2 | 259,269 | 259,481 |
Total customer accounts 3 | 486,261 | 486,666 |
Advances-to-deposits ratio | 53.3% | 53.3% |
1
Excludes reverse repurchase agreement and other sim
ilar secured lend
ing of $9,660 mill
ion and
includes loans and advances to customers held at fair value
through profit and loss of $7,084 mill
ion
2
Loans and advances to customers for the purpose of the advances-to-deposits ratio excludes $19,187 mill
ion of approved balances held w
ith central banks,
confirmed as repayable at the point of stress (31 December 2023: $20,710 mill
ion)
3
Includes customer accounts held at fair value through profit or loss of $21,772 mill
ion (31 December 2023: $17,248 m
ill
ion)
Net stable funding ratio (NSFR)
The NSFR is a PRA regulatory requirement that stipulates
inst
itut
ions to mainta
in a stable fund
ing profile in relation to
an assumed duration of their assets and off-balance sheet
activ
it
ies over a one-year horizon. It is the ratio between the
amount of available stable funding (ASF) and the amount
of required stable funding (RSF). ASF factors are applied to
balance sheet liab
il
it
ies and cap
ital, based on their perceived
stabil
ity and the amount of stable fund
ing they provide.
Likew
ise, RSF factors are appl
ied to assets and off-balance
sheet exposures according to the amount of stable funding
they require. The regulatory requirements for NSFR are to
mainta
in a rat
io of at least 100 per cent. The average ratio
for the past four quarters is 135 per cent.
Liqu
id
ity pool
The liqu
id
ity value of the Group’s LCR elig
ible l
iqu
id
ity pool at the reporting date was $170 bill
ion. The figures
in the table below
account for haircuts, currency convertib
il
ity and portabil
ity constra
ints per PRA rules for transfer restrict
ions (amount
ing to
$35 bill
ion as at 31 December 2024), and therefore are not d
irectly comparable with the consolidated balance sheet. A liqu
id
ity
pool is held to offset stress outflows as defined in the LCR per PRA rulebook.
2024 | 2023 | |
$mill ion | $mill ion | |
Level 1 securit ies | ||
Cash and balances at central banks | 76,094 | 81,675 |
Central banks, governments /public sector entit ies | 74,182 | 71,768 |
Multilateral development banks and internat ional organ isat ions | 14,386 | 16,917 |
Other | 343 | 1,291 |
Total Level 1 securit ies | 165,005 | 171,651 |
Level 2 A securit ies | 4,367 | 13,268 |
Level 2 B securit ies | 934 | 724 |
Total LCR elig ible assets | 170,306 | 185,643 |
Risk review
Risk profile
252
Standard Chartered
– Annual Report 2024
Liqu
id
ity analysis of the Group’s balance sheet (audited)
Contractual maturity of assets and liab
il
it
ies
The following table presents assets and liab
il
it
ies by matur
ity groupings based on the remain
ing per
iod to the contractual
maturity date as at the balance sheet date on a discounted basis. Contractual maturit
ies do not necessar
ily reflect actual
repayments or cashflows.
With
in the tables below, cash and balances w
ith central banks, interbank placements and investment securit
ies that are
fair valued through other comprehensive income are used by the Group princ
ipally for l
iqu
id
ity management purposes.
As at the reporting date, assets remain predominantly short-dated, with 59 per cent maturing in less than one year.
2024 | |||||||||
Between | Between | Between | Between | Between | Between | More than | |||
one month | three | six months | nine months | one year | two years | five years | |||
One month | and three | months and | and nine | and one | and two | and five | and | ||
or less | months | six months | months | year | years | years | undated | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Assets | |||||||||
Cash and balances at | |||||||||
central banks | 55,646 | – | – | – | – | – | – | 7,801 | 63,447 |
Derivat ive financial | |||||||||
instruments | 22,939 | 15,556 | 12,217 | 7,265 | 4,328 | 7,067 | 7,448 | 4,652 | 81,472 |
Loans and advances | |||||||||
to banks 1,2 | 22,381 | 21,722 | 10,588 | 6,771 | 4,986 | 8,407 | 3,715 | 1,990 | 80,560 |
Loans and advances | |||||||||
to customers 1,2 | 65,688 | 58,765 | 25,739 | 15,479 | 16,192 | 31,240 | 31,766 | 94,688 | 339,557 |
Investment securit ies 1 | 13,016 | 25,886 | 21,546 | 14,789 | 14,688 | 32,815 | 41,423 | 62,418 | 226,581 |
Other assets 1 | 12,601 | 32,130 | 1,333 | 381 | 931 | 71 | 64 | 10,560 | 58,071 |
Total assets | 192,271 | 154,059 | 71,423 | 44,685 | 41,125 | 79,600 | 84,416 | 182,109 | 849,688 |
Liab il it ies | |||||||||
Deposits by banks 1,3 | 24,293 | 2,345 | 1,621 | 848 | 571 | 4,342 | 1,939 | 3 | 35,962 |
Customer accounts 1,4 | 379,926 | 37,502 | 25,863 | 10,152 | 10,123 | 9,695 | 47,367 | 2,635 | 523,263 |
Derivat ive financial | |||||||||
instruments | 21,680 | 17,115 | 11,773 | 7,018 | 4,353 | 6,660 | 8,144 | 5,321 | 82,064 |
Senior debt 5 | 609 | 1,755 | 4,074 | 2,132 | 932 | 7,926 | 18,784 | 17,886 | 54,098 |
Other debt securit ies in issue 1 | 2,734 | 2,663 | 6,550 | 4,535 | 5,015 | 851 | 1,206 | 688 | 24,242 |
Other liab il it ies | 12,173 | 43,574 | 3,020 | 1,441 | 155 | 4,494 | 682 | 2,854 | 68,393 |
Subordinated liab il it ies and | |||||||||
other borrowed funds | – | 64 | 23 | 180 | 13 | 359 | 1,978 | 7,765 | 10,382 |
Total liab il it ies | 441,415 | 105,018 | 52,924 | 26,306 | 21,162 | 34,327 | 80,100 | 37,152 | 798,404 |
Net liqu id ity gap | (249,144) | 49,041 | 18,499 | 18,379 | 19,963 | 45,273 | 4,316 | 144,957 | 51,284 |
2023 | |||||||||
Assets | |||||||||
Cash and balances at | |||||||||
central banks | 63,752 | – | – | – | – | – | – | 6,153 | 69,905 |
Derivat ive financial | |||||||||
instruments | 12,269 | 10,632 | 6,910 | 3,611 | 2,921 | 4,650 | 6,038 | 3,403 | 50,434 |
Loans and advances | |||||||||
to banks 1,2 | 28,814 | 23,384 | 10,086 | 4,929 | 5,504 | 1,583 | 2,392 | 1,098 | 77,790 |
Loans and advances | |||||||||
to customers 1,2 | 86,695 | 55,009 | 25,492 | 15,392 | 14,537 | 25,987 | 26,545 | 95,829 | 345,486 |
Investment securit ies 1 | 12,187 | 28,999 | 17,131 | 18,993 | 20,590 | 24,244 | 44,835 | 50,168 | 217,147 |
Other assets 1 | 17,611 | 31,729 | 1,286 | 409 | 587 | 67 | 93 | 10,300 | 62,082 |
Total assets | 221,328 | 149,753 | 60,905 | 43,334 | 44,139 | 56,531 | 79,903 | 166,951 | 822,844 |
Liab il it ies | |||||||||
Deposits by banks 1,3 | 26,745 | 1,909 | 1,398 | 503 | 778 | 1,326 | 2,848 | 2 | 35,509 |
Customer accounts 1,4 | 384,444 | 47,723 | 28,288 | 13,647 | 11,806 | 7,787 | 38,578 | 2,349 | 534,622 |
Derivat ive financial | |||||||||
instruments | 13,111 | 12,472 | 6,655 | 4,001 | 3,433 | 5,142 | 6,932 | 4,315 | 56,061 |
Senior debt 5 | 130 | 1,111 | 1,537 | 1,389 | 624 | 11,507 | 20,127 | 14,443 | 50,868 |
Other debt securit ies in issue 1 | 3,123 | 5,822 | 6,109 | 3,235 | 3,037 | 492 | 482 | 195 | 22,495 |
Other liab il it ies | 14,929 | 26,447 | 1,695 | 544 | 883 | 1,830 | 1,809 | 12,763 | 60,900 |
Subordinated liab il it ies and | |||||||||
other borrowed funds | 980 | 68 | 19 | 172 | 453 | 312 | 1,936 | 8,096 | 12,036 |
Total liab il it ies | 443,462 | 95,552 | 45,701 | 23,491 | 21,014 | 28,396 | 72,712 | 42,163 | 772,491 |
Net liqu id ity gap | (222,134) | 54,201 | 15,204 | 19,843 | 23,125 | 28,135 | 7,191 | 124,788 | 50,353 |
1
Loans and advances, investment securit
ies, depos
its by banks, customer accounts and debt securit
ies
in issue include financ
ial
instruments held at fair value
through profit or loss, see Note 13 Financ
ial
instruments
2
Loans and advances include reverse repurchase agreements and other sim
ilar secured lend
ing of $98.8 bill
ion (31 December 2023: $97.6 b
ill
ion)
3
Deposits by banks include repurchase agreements and other sim
ilar secured borrow
ing of $8.7 bill
ion (31 December 2023: $5.6 b
ill
ion)
4
Customer accounts include repurchase agreements and other sim
ilar secured borrow
ing of $37.0 bill
ion (31 December 2023: $48.0 b
ill
ion)
5
Senior debt maturity profiles are based upon contractual maturity, which may be later than call options over the debt held by the Group
Risk review and Capital review
Standard Chartered
– Annual Report 2024
253
Behavioural maturity of financ
ial assets and l
iab
il
it
ies
The cashflows presented in the previous section reflect the
cashflows that will be contractually payable over the residual
maturity of the instruments. However, contractual maturit
ies
do not necessarily reflect the tim
ing of actual repayments or
cashflow. In practice, certain assets and liab
il
it
ies behave
differently from their contractual terms, especially for short-
term customer accounts, credit card balances and overdrafts,
which extend to a longer period than their contractual
maturity. On the other hand, mortgage balances tend to
have a shorter repayment period than their contractual
maturity date. Expected customer behaviour is assessed
and managed on a country basis using qualitat
ive and
quantitat
ive techn
iques, includ
ing analys
is of observed
customer behaviour over time.
Maturity of financ
ial l
iab
il
it
ies on an und
iscounted basis
(audited)
The following table analyses the contractual cashflows
payable for the Group’s financial l
iab
il
it
ies by rema
in
ing
contractual maturit
ies on an und
iscounted basis. The financ
ial
liab
il
ity balances in the table below will not agree with the
balances reported in the consolidated balance sheet as
the table incorporates all contractual cashflows, on an
undiscounted basis, relating to both princ
ipal and
interest
payments. Derivat
ives not treated as hedg
ing derivat
ives
are included in the ‘On demand’ time bucket and not by
contractual maturity.
With
in the ‘More than five years and undated’ matur
ity band
are undated financial l
iab
il
it
ies, the majority of wh
ich relate
to subordinated debt, on which interest payments are not
included as this informat
ion would not be mean
ingful, given
the instruments are undated. Interest payments on these
instruments are included with
in the relevant matur
it
ies up to
five years.
| 2024 | |||||||||
Between | Between | Between | Between | Between | More than | ||||
one month | three | Between six | nine months | one year | two years | five years | |||
One month | and three | months and | months and | and one | and two | and five | and | ||
or less | months | six months | nine months | year | years | years | undated | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Deposits by banks | 24,303 | 2,360 | 1,660 | 862 | 589 | 4,347 | 1,939 | 4 | 36,064 |
Customer accounts | 380,377 | 37,790 | 26,277 | 10,384 | 10,438 | 9,937 | 47,642 | 3,396 | 526,241 |
Derivat ive financial | |||||||||
instruments¹ | 80,055 | 13 | 12 | 10 | 3 | 216 | 592 | 1,163 | 82,064 |
Debt securit ies in issue | 3,622 | 4,551 | 11,007 | 7,056 | 6,319 | 10,261 | 23,184 | 21,337 | 87,337 |
Subordinated liab il it ies and | |||||||||
other borrowed funds | 19 | 134 | 46 | 206 | 14 | 392 | 2,345 | 13,800 | 16,956 |
Other liab il it ies | 10,421 | 44,933 | 2,894 | 1,408 | 152 | 4,433 | 682 | 4,802 | 69,725 |
Total liab il it ies | 498,797 | 89,781 | 41,896 | 19,926 | 17,515 | 29,586 | 76,384 | 44,502 | 818,387 |
| 2023 | |||||||||
Deposits by banks | 26,759 | 1,921 | 1,417 | 513 | 790 | 1,328 | 2,848 | 4 | 35,580 |
Customer accounts | 385,361 | 48,140 | 28,763 | 14,049 | 12,190 | 8,118 | 39,000 | 3,036 | 538,657 |
Derivat ive financial | |||||||||
instruments¹ | 53,054 | 517 | 46 | 44 | 103 | 202 | 887 | 1,208 | 56,061 |
Debt securit ies in issue | 3,507 | 6,995 | 8,015 | 5,070 | 4,002 | 13,663 | 23,413 | 16,396 | 81,061 |
Subordinated liab il it ies and | |||||||||
other borrowed funds | 1,043 | 134 | 46 | 208 | 570 | 395 | 2,389 | 14,367 | 19,152 |
Other liab il it ies | 12,200 | 26,291 | 1,560 | 515 | 884 | 1,832 | 1,810 | 11,513 | 56,605 |
Total liab il it ies | 481,924 | 83,998 | 39,847 | 20,399 | 18,539 | 25,538 | 70,347 | 46,524 | 787,116 |
1
Derivat
ives are on a d
iscounted basis
Risk review
Risk profile
254
Standard Chartered
– Annual Report 2024
Interest Rate Risk in the Banking Book
The following table provides the estimated impact to a
hypothetical base case project
ion of the Group’s earn
ings
under the following scenarios:
•
A 50 basis point parallel interest rate shock (up and down)
to the current market-impl
ied path of rates, across all
yield curves
•
A 100 basis point parallel interest rate shock (up and down)
to the current market-impl
ied path of rates, across all
yield curves
These interest rate shock scenarios assume all other economic
variables remain constant. The sensit
iv
it
ies shown represent
the estimated change to a hypothetical base case projected
net interest income (NII), plus the change in interest rate
impl
ied
income and expense from FX swaps used to manage
banking book currency posit
ions, under the d
ifferent interest
rate shock scenarios.
The base case projected NII is based on the current market-
impl
ied path of rates and forward rate expectat
ions. The NII
sensit
iv
it
ies below stress th
is base case by a further 50 or
100bps. Actual observed interest rate changes will likely
differ from market expectation. Accordingly, the shocked NII
sensit
iv
ity does not represent a forecast of the Group’s net
interest income.
The interest rate sensit
iv
it
ies are
ind
icat
ive stress tests and
based on simpl
ified scenar
ios, estimat
ing the aggregate
impact of an unantic
ipated,
instantaneous parallel shock
across all yield curves over a one-year horizon, includ
ing the
time taken to implement changes to pric
ing before becom
ing
effective. The assessment assumes that the size and mix of
the balance sheet remain constant and that there are no
specif
ic management act
ions in response to the change in
rates. No assumptions are made in relation to the impact on
credit spreads in a changing rate environment.
Sign
ificant modell
ing and behavioural assumptions are made
regarding scenario simpl
ification, market compet
it
ion,
pass-through rates, asset and liab
il
ity re-pric
ing tenors, and
price flooring. In particular, the assumption that interest rates
of all currencies and maturit
ies sh
ift by the same amount
concurrently, and that no actions are taken to mit
igate the
impacts aris
ing from th
is are considered unlikely. Reported
sensit
iv
it
ies w
ill vary over time due to a number of factors
includ
ing changes
in balance sheet composit
ion, market
condit
ions, customer behav
iour and risk management
strategy. Therefore, while the NII sensit
iv
it
ies are a relevant
measure of the Group’s interest rate exposure, they should
not be considered an income or profit forecast.
2024 | |||||||||
Estimated one-year impact | Other | ||||||||
| to earnings from a parallel | currency | ||||||||
shift in yield curves at the | USD bloc | HKD bloc | SGD bloc | KRW bloc | CNY bloc | INR bloc | EUR bloc | bloc¹ | Total |
beginn ing of the per iod of: | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
+ 50 basis points | 20 | 30 | 10 | 20 | 20 | 30 | 10 | 70 | 210 |
- 50 basis points | (40) | (30) | (20) | (20) | (30) | (30) | (20) | (80) | (270) |
+ 100 basis points | 30 | 60 | 20 | 30 | 30 | 40 | 30 | 150 | 390 |
- 100 basis points | (90) | (50) | (40) | (50) | (50) | (40) | (40) | (190) | (550) |
| 2023 | |||||||||
Estimated one-year impact | |||||||||
| to earnings from a parallel | Other | ||||||||
shift in yield curves at the | USD bloc | HKD bloc | SGD bloc | KRW bloc | CNY bloc | INR bloc | EUR bloc | currency | Total |
beginn ing of the per iod of: | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | bloc¹ | $mill ion |
+ 50 basis points | 90 | 10 | 50 | 10 | 30 | 20 | 30 | 110 | 350 |
- 50 basis points | (150) | (30) | (50) | (20) | (40) | (30) | (30) | (120) | (470) |
+ 100 basis points | 180 | 10 | 100 | 20 | 60 | 40 | 50 | 230 | 690 |
- 100 basis points | (280) | (40) | (100) | (40) | (80) | (60) | (60) | (230) | (890) |
1
The largest exposures with
in the Other currency bloc are GBP,JPY, MYR, TWD
As at 31 December 2024, the Group estimates the one-year
impact of an instantaneous, parallel increase across all
yield curves of 50 basis points to increase projected NII by
$210 mill
ion. The equ
ivalent impact from a parallel decrease
of 50 basis points would result in a reduction in projected NII
of $270 mill
ion. The Group est
imates the one-year impact of
an instantaneous, parallel increase across all yield curves of
100 basis points to increase projected NII by $390 mill
ion.
The equivalent impact from a parallel decrease of
100 basis points would result in a reduction in projected
NII of $550 mill
ion.
The benefit from ris
ing
interest rates is primar
ily from
reinvest
ing at h
igher yields and from assets re-pric
ing faster
and to a greater extent than deposits. NII sensit
iv
ity in falling
rate scenarios has decreased versus 31 December 2023, due to
an increase in programmatic hedging as well as actions taken
in discret
ionary portfol
ios to increase asset duration.
Over the course of 2024 the notional of interest rate swaps
and HTC-accounted bond portfolios used to reduce NII
sensit
iv
ity through the cycle increased from $47 bill
ion to
$64 bill
ion. As at December 2024, the portfol
ios had a
weighted average maturity of 3.0 years, which reflects the
behavioural
ised l
ives of the rate-insens
it
ive deposit and
equity balances that they hedge, and a yield of 3.5 per cent.
Risk review and Capital review
Standard Chartered
– Annual Report 2024
255
Operational and Technology Risk
Operational and Technology Risk profile
The implementat
ion of standard
ised non-financ
ial r
isk,
control and causal taxonomies is enabling improved risk
aggregation and reporting, and has provided opportunit
ies
for simpl
ify
ing the process for risk ident
ification and
assessment in the Group.
Operational and Technology Risk is elevated in areas such
as Change Mismanagement Risk and Third-Party Risk
Management, which are subject to ongoing control
enhancement programmes. Other key areas of focus are
Systems Health/Technology risk, Operational Resil
ience
and Regulatory Compliance. To address these areas, the
Group has focused on improv
ing the susta
inable operating
environment and has in
it
iated several programmes to
enhance the control environment. The Group continues to
monitor and manage Operational and Technology risks
associated with the external environment such as geopolit
ical
factors, the increas
ing r
isk of cyber-attacks and inappropr
iate
use of Artif
ic
ial Intelligence. This enables the Group to keep
pace with the new business developments, while ensuring
that its risk and control frameworks evolve accordingly.
The Group continues to strengthen its risk management
to understand the full spectrum of risks in the operating
environment, enhance its defences and improve resil
ience.
Operational and Technology risk events and losses
Operational losses are one ind
icator of the effect
iveness and
robustness of our non-financial r
isk and control environment.
The Group’s profile of operational loss events in 2024 and
2023 is summarised in the table below, which shows the
distr
ibut
ion of gross operational losses by Basel business
line. There has been a sharp increase in Corporate Items
in 2024 due to a single large event pertain
ing to F
inance
Accounting Adjustment.
% Loss | ||
Distr ibut ion of Operational losses by Basel business line | 2024 | 2023¹ |
Agency Services | 0.0% | 3.9% |
Asset Management | 0.0% | 0.2% |
Commercial Banking | 1.4% | 8.0% |
Corporate Finance | 0.1% | 7.2% |
Corporate Items | 72.5% | 34.3% |
Payment and Settlements | 7.6% | 16.6% |
Retail Banking | 17.0% | 21.3% |
Retail Brokerage | 0.0% | 0.0% |
Trading and Sales | 1.4% | 8.6% |
1
Losses in 2023 have been restated to include incremental events recognised in 2024
The Group’s profile of operational loss events in 2024 and 2023 is also summarised by Basel event type in the table below.
It shows the distr
ibut
ion of gross operational losses by Basel event type.
% Loss | ||
Distr ibut ion of Operational losses by Basel event type | 2024 | 2023¹ |
Business disrupt ion and system fa ilures | 1.8% | 4.7% |
Clients products and business practices | 14.1% | 2.9% |
Damage to physical assets | 0.0% | 0.0% |
Employment practices and workplace safety | 0.1% | 0.6% |
Execution delivery and process management | 81.5% | 77.3% |
External fraud | 2.4% | 14.4% |
Internal fraud | 0.1% | 0.2% |
1
Losses in 2023 have been restated to include incremental events recognised in 2024
Other princ
ipal r
isks
The losses aris
ing from operat
ional failures for other princ
ipal and
integrated risks are reported as operational losses.
Operational losses do not include operational risk-related credit impa
256
Standard Chartered
– Annual Report 2024
Risk review
Risk profile
Discla
imer
For the avoidance of doubt, this Climate Risk section is subject to the statements included in (i) the ‘Forward- Looking Statements’
section; and (i
i) the ‘Bas
is of Preparation and Caution Regarding Data Lim
itat
ions’ section provided under ‘Important Notices’ at
page 397.
Managing Climate Risk
Environmental, Social and Governance and Reputational
(ESGR) Risk is defined as the risk of potential or actual adverse
impact on the environment and/or society, or to the Group’s
financial performance, operat
ions or 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.
ESGR Risk continues to be an area of growing importance,
driv
ing a need for strateg
ic transformation across business
activ
it
ies and risk management.
An environmental (such as climate), social or governance
event, or change in condit
ion,
if it occurs, could result in actual
or potential financ
ial loss or non-financial detr
iments to the
Group. As such, Climate Risk is ident
ified as a mater
ial risk
for the Group, which is integrated across relevant Princ
ipal
Risk Types (PRTs) and is managed via the ESGR Risk Type
Framework. The Group is exposed to climate risk through
our clients, own operations, vendors, suppliers and from the
industr
ies and markets we operate
in.
Climate Risk Taxonomy
Climate Risk
The potential for financ
ial loss and non-financial detr
iments aris
ing from cl
imate change and
society’s response to it.
Physical Risk
Risks aris
ing from
increas
ing sever
ity and frequency of climate and weather-related events,
which can damage property and other infrastructure, disrupt supply chains, and impact food
production. Addit
ionally, they may lead to decl
in
ing assets valuat
ions and challenges with
insurance claims, resulting in greater financ
ial losses. Ind
irect effects on the macroeconomic
environment, such as lower output and productiv
ity, may exacerbate these d
irect impacts.
Acute
Specif
ic event-dr
iven weather events, includ
ing
increased severity of extreme weather
events, such as cyclones, hurricanes, floods, or wildf
ires.
Chronic
Longer-term shifts in climate patterns, such as changing precip
itat
ion patterns, sea-level rise,
and longer-term drought.
Transit
ion R
isk
Risk aris
ing from the adjustment towards a carbon-neutral economy, wh
ich will require
sign
ificant structural changes to the economy. These changes w
ill prompt a reassessment
of a wide range of asset values, a change in energy prices, and a fall in income and
creditworth
iness of some borrowers. In turn, th
is leads to credit losses for lenders and
market losses for investors.
The Board committees consider climate-related risks and
opportunit
ies when rev
iew
ing and gu
id
ing strateg
ic decis
ions.
Board-level oversight is exercised through the Board Risk
Committee (BRC), and regular climate risk updates are
provided to the Board and BRC. At an executive level, the
Group Risk Committee has appointed the Climate Risk
Management Committee (CRMC), consist
ing of sen
ior
representatives from business, risk, and other functions such
as Internal Audit, which oversees Climate Risk includ
ing the
implementat
ion of Cl
imate Risk workplan and progress made
by the Group in meeting regulatory requirements.
Key financial regulators across our footpr
int have proposed or
set supervisory expectations on climate and environmental
risk management. Those expectations are broadly aligned
with the Basel Committee princ
iples for the management of
climate-related financ
ial r
isks, but local implementat
ions vary.
We actively engage with industry bodies and regulators to
seek consistency in policy making across our markets. Climate
Risk-related regulatory developments and obligat
ions set
by both financial and non-financial serv
ice regulators
are tracked at Group and country level, with roles and
responsib
il
it
ies set out
in the Group’s ESGR Risk Policy.
Key regulatory trends we observe include:
•
Disclosures:
Elevated volume of proposals, updates or new
climate and sustainab
il
ity-related disclosure requirements
across the markets in which we operate. This is partially
driven by the adoption and implementat
ion of Internat
ional
Sustainab
il
ity Standards Board and European Sustainab
il
ity
Reporting Standards.
•
Risk management:
Regulators continued to drive the
integrat
ion of Cl
imate Risk into day-to-day business/
operations for regulated financ
ial
inst
itut
ions, moving
their focus towards stress testing and scenario analysis.
Regulators have also started to look at the transit
ion
planning process in some markets.
•
Taxonomies and product-related standards:
Financ
ial
regulators and leading industry bodies continued to
report, consult, and set rules and guidel
ines around
sustainable finance product frameworks and reporting.
The key concern remains ensuring market integr
ity and
greenwashing prevention.
For more informat
ion on the Group’s governance approach for
climate-related risks and opportunit
ies, see
pages 98 to 102
.
Climate Risk Appetite metrics
Our Climate Risk Appetite Statement is approved annually
by the Board and supported by Board RA metrics and
Management Team Lim
its (MTLs) across
impacted risk types.
The Board RA metrics are approved by the Board and the
MTLs by the Group Risk Committee annually and any
breaches of either are reported to the Board Risk Committee
and Group Risk Committee.
Climate Risk
257
Standard Chartered
– Annual Report 2024
Risk review and Capital review
Group Climate Risk Appetite Statement
“The Group aims to measure and manage financ
ial and
non-financial r
isks aris
ing from cl
imate change, and
reduce the emiss
ions related to our own act
iv
it
ies and
those related to the financing of cl
ients in alignment with
the Paris Agreement.”
We have cross-cutting Board RA metrics and MTLs across
WRB Risk, CIB Risk, Traded Risk, Country Risk and an
enterprise-wide metric focusing on the divergence of key
sectors (Power, Oil and Gas, Automotive Manufacturing, Steel,
Alumin
ium and Cement) from the Group’s net zero pathway.
As part of our annual Risk Appetite review, we continue to
focus on evaluating current metrics, tighten
ing l
im
its where
necessary and expanding coverage for enhanced risk
ident
ification and management. A rev
ised Risk Appetite
statement will be in effect from 2025, combin
ing Cl
imate
Risk and Reputational and Sustainab
il
ity Risk for a more
comprehensive coverage.
Key Risk Appetite metrics are cascaded to all relevant
markets, supported by management informat
ion. The country
Climate Risk profile is also reviewed at country-level risk
committees for all subsid
iar
ies.
Processes for ident
ify
ing and assessing Climate Risks
Climate Risk is becoming increas
ingly cr
it
ical as cl
imate-
related events continue to unfold globally, accompanied by
ris
ing regulatory expectat
ions. In response, we have entered
into strategic partnerships to develop or gain access to
various toolkits to quantitat
ively measure cl
imate-related
physical and transit
ion r
isks. For example, the Climate X
Spectra platform delivers location-specif
ic r
isk ratings,
damages and revenue losses for extreme weather events
linked to climate change, covering private and listed
corporates as well as real estate. The hazard library
includes 12 hazard types (e.g. flooding, wildf
ires, and
tropical cyclones) for time horizons until 2100 under the four
Representative Concentration Pathway (RCP) and four
Shared Socioeconom
ic Pathways (SSPs) scenar
ios. Focus
for 2025 and beyond will include improv
ing the financial
quantif
icat
ion aspects leveraging Climate X data, which
will enable enhanced loss estimat
ion from phys
ical risk
hazard events. We have worked with our vendors to develop
our internal transit
ion r
isk models. This will be extended to
addit
ional sectors and phys
ical risk assessment in 2025 to
further reduce our reliance on third-party models.
Internal train
ing programmes to better
ident
ify and
mit
igate r
isk
In order to effectively embed climate risks across the Group,
we have rolled out a comprehensive eight-module role-
specif
ic Cl
imate Risk and net zero credit certif
icat
ion. This
includes a core module covering climate change science,
transit
ion scenar
ios, Climate Risk Assessments (CRAs) and net
zero targets and alignment calculations, and a sector-specif
ic
train
ing, focus
ing on Oil and Gas, Power, Steel, Alumin
ium,
Shipp
ing and Automob
ile clients. This augments our exist
ing
foundational sustainab
il
ity train
ing wh
ich covers climate
risk at a basic level. We recognise that various countries
have been stepping up their regulatory requirements and
monitor
ing
in relation to climate risk. In response to this
trend, we continue to provide our senior risk officers in
country with dedicated train
ing and work
ing group updates.
Period
ic tra
in
ing sess
ions on Climate Risk integrat
ion cont
inue
to be provided to the first and second line of defence to
further strengthen the understanding of Climate Risk and its
applicat
ion w
ith
in the Group.
Lim
itat
ions with exist
ing tools and data
We recognise that assessing climate risk has its lim
itat
ions
as quantify
ing approaches are st
ill evolving:
•
Data availab
il
ity and client coverage continue to pose
challenges, especially in emerging markets. With the lim
ited
coverage of granular client-level informat
ion at both Group
and entity level, there is reliance on use of proxies e.g. sector
and regional averages, sovereign heatmaps, and credit
grade projections and movements.
•
Further, most tools and modelling approaches present a
gross risk profile that often overlooks exist
ing adaptat
ion
measures, as well as government polic
ies to protect
and build for changing climate. Assumptions in climate
modelling also continue to rely on nascent methodologies
which do not factor non-linear shifts and complex feedback
loops or the social dimens
ion of cl
imate change.
•
Over time, sovereigns and policymakers are expected to
drive market trends, such as investment in adaptation
plans, technological advancements, innovat
ive r
isk transfer
and mit
igat
ion approaches to combat the potential
impacts of climate change.
Notwithstand
ing the above, we have observed an
improvement in data coverage since the creation of our
Climate Analyst team in the first line of defence and
development of internal climate risk models. Addit
ionally, we
have created a centralised data store to enable the Group
to capture all sustainab
il
ity-related data for our clients.
This includes monitor
ing of the data qual
ity, in order to
reduce the usage of proxies over time. We intend to refine
our evaluations and methodologies progressively as the
availab
il
ity and quality of data improves.
The data we have captured through various sources has
helped us develop our client-level CRAs for exist
ing and new
clients, improve our internal climate modelling capabil
it
ies
and strengthen the risk measurement and monitor
ing of
our portfolios. Notwithstand
ing the l
im
itat
ions noted above,
we can conclude that the results presented below across
the various PRTs provide strategic direct
ion
in relation to the
risks measured.
Looking ahead
We expect a continu
ing trend of change
in the coming years,
includ
ing: (
i) a greater focus on our Physical Risk measurement
capabil
it
ies across data, CRAs, scenario analysis, reporting
and model development; (i
i) streaml
in
ing cl
ient-level
assessments across financial and non-financial ESGR R
isk (i
i
i)
integrat
ing cl
ient transit
ion plans
in CRAs, scenario analysis
and models; (iv) upskill
ing employees to enhance portfol
io
management and oversight on clients exposed to ESGR Risk
or divergent from our net zero targets; (v) operational
is
ing
support for countries with local ESGR-related regulations,
stress testing requirements and disclosures; and (vi) further
embedding greenwashing risk.
Managing the financ
ial and non-financial r
isks
from climate change
We manage Climate Risk according to the characterist
ics of
the impacted PRTs.
Risk Framework Owners for the impacted PRTs are responsible
for embedding Climate Risk requirements with
in the
ir
respective risk types. In 2024, we have continued to embed
Climate Risk into exist
ing r
isk management frameworks and
processes. The Climate Risk ident
ification and assessments
across the PRTs span across short, medium, and long-term
horizons to enable right level of monitor
ing and to
inform the
decis
ion-mak
ing process.
See
page 89
for more informat
ion on the definit
ions for short,
medium and long-term horizons.
258
Standard Chartered
– Annual Report 2024
Risk review
Risk profile
Credit Risk
We have developed a Climate Risk management framework, which outlines the approach for a baseline level of effective
risk mit
igat
ion.
Wealth & Retail Banking (WRB) Credit Risk
In 2024, we progressed further in our journey to embed Climate Risk into our monitor
ing and r
isk management across
products and segments in the WRB portfolio. In terms of risk assessment coverage, as of September 2024, we have
assessed Physical Risk for 77 per cent and Transit
ion R
isk for 52 per cent of the overall WRB portfolio.
CCPL
Private
Banking
SME
Banking
Consumer
Mortgage
Overall
WRB
78%
22%
76%
47%
1%
23%
24%
53%
99%
77%
Physical Risk measurement and monitor
ing
in WRB
(as of September 2024)
Physical Risk assessed
Physical Risk not assessed
CCPL
Private
Banking
SME
Banking
Consumer
Mortgage
Overall
WRB
100%
67%
77%
44%
48%
33%
23%
56%
52%
Transit
ion R
isk measurement and monitor
ing
in WRB
(as of September 2024)
Transit
ion R
isk assessed
Transit
ion R
isk not assessed
Outstanding Exposures Assessed
of which
Overall
WRB
Consumer
Mortgage
SME
Banking
Private
Banking
CCPL
Physical Risk
96.7
75.7
5.1
3.2
12.7
Transit
ion R
isk
65.6
42.8
2.3
4.3
16.2
1. Physical Risk management approach for WRB
Risk ident
ification and assessment
Secured portfolios (backed by resident
ial, commerc
ial or
industr
ial property)
For our portfolios secured against property collateral,
assessments are based on the underlying resident
ial,
commercial, or industr
ial property. We cont
inue to leverage
Munich Re’s Risk Suite (Natural Hazards Edit
ion) to measure
acute and chronic Physical Risk impact
ing each asset based
on their geolocation.
Unsecured portfolios
For our unsecured portfolio, such as credit cards and personal
loans, we assess Physical Risk that may have the potential
to drive higher credit losses through second-order impacts
that affect our customers’ abil
ity to repay, employ
ing proxies
aligned to credit portfolio risk profiles. In 2024, we enhanced
the proxy methodology, using a sign
ificantly larger and more
representative sample that provided greater stabil
ity and
accuracy in the resultant risk profiles.
Risk monitor
ing and report
ing
We assess the exposure concentrations subjected to high risk
across acute and chronic hazards quarterly and reported
these at-risk management committees at Group, region, and
country, with a focus on flood risk and ris
ing sea levels, due to
the inherent risk profiles of our operating markets. Throughout
2024, physical risk levels across most products and markets
have remained largely stable, apart from slight variat
ions
in
exposure subjected to high flood risk due to Munich Re’s storm
surge model update, which led to more granular and accurate
risk assessments.
Risk management
Physical risk in the resident
ial mortgage portfol
io is primar
ily
mit
igated under the ex
ist
ing cred
it underwrit
ing process
through the setting of prudent loan-to-value lim
its, wh
ich is
supported by a robust and independent property valuation
process, as well as the requirement of insurance for the life
of the loan. To mit
igate the res
idual risk, which may begin
to material
ise for our res
ident
ial mortgages w
ith sustained
exposure to heightened Physical Risk, some markets
have started establish
ing zon
ing polic
ies that
involve
the ident
ification of h
igh Physical Risk zones and the
implementat
ion of d
ifferent
iated underwr
it
ing pol
icy
criter
ia target
ing new mortgages orig
inat
ing from these
higher-risk regions.
259
Standard Chartered
– Annual Report 2024
Risk review and Capital review
Assessment of acute and chronic Physical Risk for top 10 markets’ exposures backed by property collateral, ind
icat
ing
exposure concentration subjected to high gross risk (as of September 2024)
Proportion of book
Global
Korea
Hong Kong
Taiwan
23%
38%
7%
Q3-23
Q3-24
Trend
Q3-23
Q3-24
Trend
Q3-23
Q3-24
Trend
Q3-23
Q3-24
Trend
Flood Risk
13.1%
12.9%
10.6%
10.8%
16.2%
16.3%
11.3%
11.3%
Sea-level rise
(Year 2100, RCP 8.5)
2.3%
2.3%
0.6%
0.6%
3.6%
3.6%
0.0%
0.0%
Proportion of book
India
Singapore
Malaysia
UAE
5%
18%
4%
1%
Q3-23
Q3-24
Trend
Q3-23
Q3-24
Trend
Q3-23
Q3-24
Trend
Q3-23
Q3-24
Trend
Flood Risk
18.2%
17.0%
4.6%
4.4%
5.1%
5.2%
6.6%
5.5%
Sea-level rise
(Year 2100, RCP 8.5)
1.0%
0.9%
0.1%
0.1%
0.2%
0.3%
36.2%
36.0%
Proportion of book
Jersey
Vietnam
China
2%
1%
2%
Q3-23
Q3-24
Trend
Q3-23
Q3-24
Trend
Q3-23
Q3-24
Trend
Flood Risk
21.9%
19.4%
53.3%
51.1%
50.2%
47.8%
Sea-level rise
(Year 2100, RCP 8.5)
0.0%
0.0%
–
1.2%
1.5%
8.3%
8.6%
Note: Movements are called out for markets showing a change of more than 5 per cent year-on-year change in exposure concentration subjected to high
Physical Risk. The Q3 2023 exposure concentrations have been rebased using the updated Munich Re Risk Suite following the storm surge model update.
2. Transit
ion R
isk management approach for WRB
Unlike the UK and Europe, our key resident
ial mortgage markets
in Asia, Africa and the Middle East continue to have no
regulatory policy requirements around min
imum bu
ild
ing energy-efficiency standards or government-mandated energy-
efficiency rat
ing schemes such as energy performance certif
icates (EPC). As such, we cont
inue to leverage alternate
approaches to gain an early understanding of the proportion of our key mortgage portfolios that may be potentially affected
by transit
ion r
isk, through quantify
ing the robustness of our cl
ients’ income to sustain potential increases in energy spend.
In 2024, we refreshed the transit
ion r
isk assessment of our key mortgage portfolios based on year-end 2023 data, enabling us
to do a year-on-year comparison against year-end 2022 results. Based on the analysis in the past two years, we see no material
movements and continue to observe low transit
ion r
isk levels across our key resident
ial mortgage markets. In the future, once
addit
ional data becomes ava
ilable, we aim to account for valuation-related risks of property collateral due to transit
ion r
isk,
which we believe is the most sign
ificant trans
it
ion r
isk driver for resident
ial mortgages.
Transit
ion R
isk ratings using Group mortgage baselin
ing approach by exposure concentrat
ion (as of December 2023) –
Singapore, Hong Kong, Taiwan
Very high
High
Medium
Low
Very Low
5%
1%
1%1%
91%
Singapore
$9.4bn
8%
1%
90%
Hong Kong
$28.8bn
19%
9%
6%
12%
53
%
Taiwan
$4.1bn
For the Jersey resident
ial mortgage portfol
io, which is largely made up of buy-to-let properties located in the UK, we used
EPC data to assess the energy-efficiency d
istr
ibut
ion, with results ind
icat
ing that circa 80 per cent of the portfolio with available
EPC ratings is rated C or better.
260
Standard Chartered
– Annual Report 2024
Risk review
Risk profile
2. Transit
ion R
isk management approach for WRB
continued
Transit
ion R
isk ratings for resident
ial mortgages
in Jersey using EPC ratings by exposure
concentration (as of August 2024)
EPC ratings for resident
ial mortgages
in Jersey, by count
(as of August 2024)
15
%
15%
6%
0.3%
64%
Jersey
$0.3bn
A
B
C
D
E
E
D
C
B
A
E
D
C
B
A
E
D
C
B
A
Prior to 2000
2000 - 2021
2022 onwards
4%
0%
2%
8%
0%
1%
9%
0%
9%
3%
3%
60%
0%
0%
0%
We continue to explore ways to enhance our assessment approaches across both secured and unsecured WRB portfolios
through improved methodologies and data. This will enable us to better assess the susceptib
il
ity to and readiness of our clients
in managing climate-driven risks, while also enabling us to ident
ify opportun
it
ies to ass
ist them in their transit
ion towards a
low-carbon economy.
Our key focus for 2025 includes expanding the scope of our exist
ing cred
it orig
inat
ion process to cover climate-related
considerat
ions to small and med
ium business clients. This will enable us to better understand the physical and transit
ion r
isks
faced by our clients, as well as their readiness in adapting to these increas
ingly consequent
ial risks.
Corporate & Investment Banking (CIB) Credit Risk
1.
2.
3.
4.
5.
• Control Sample Testing
• Independent assurance
• Data gathering
• Client outreach
• Scenario analysis
Climate Risk Assessment (BRAG)
• Credit underwrit
ing pr
inc
iples
• Risk Appetite (% Black or Red)
• High Climate Risk clients monitor
ing
5. Controls and assurance
1. Identify risks and
mit
igat
ion plans
2. Analysing the risks
4. Portfolio management
and monitor
ing
3. Evaluating the risk
Mit
igat
ing
factors
Time impact
horizon
Green
Amber
Red
Black
Business Credit Applicat
ion (BCA)
• Review and approval
• BCA analysis
• Risk triggers
• Financ
ial
impacts
• Warning signals
This section covers details of how we assess climate risk for our corporate clients, includ
ing
ins
ights ga
ined from our
client-level assessments and progress made to further strengthen our framework for climate and credit related portfolio
and risk management. The figure below outlines our process in assessing climate risk.
261
Standard Chartered
– Annual Report 2024
Risk review and Capital review
Data sources
and disclosures
Reporting
• Sources of data
• Level of
disclosures,
Carbon
Disclosures
Project rating
Gross
Physical Risk
Exposure to acute
and chronic events
• Asset locations
exposed to physical
risk events (floods,
storms, droughts etc)
• Model output to
assess current and
future risk to client’s
operating locations
Physical Risk
adaptation
Mit
igat
ions to acute
and chronic events
• Assessment of client’s
adaptation plans
• Insurance coverage
to protect against
physical risk
Gross Transit
ion
Risk
Relative emiss
ions
for sector and region
• Reliance on fossil
fuel/carbon products,
net zero trajectory
alignment
• Policy, environmental
impact due to
sovereign
decarbonisat
ion
policy in sector
• Potential financ
ial
impact from various
climate scenarios
Credib
il
ity of
Transit
ion Plans
(CTPs)
Decarbonisat
ion
plan, governance and
emiss
ion targets
• Assess client’s plans
and its credib
il
ity
to transit
ion
its
business and
supply chain
backed by robust
governance
mechanisms
• Emiss
ions report
ing
targets and plan to
achieve them
• Capex in
low-carbon
technologies,
internal carbon
pric
ing scenar
ios
Our client-level Climate Risk Questionna
ire (CRQ) helps assess the potent
ial financ
ial r
isks from climate change using
quantitat
ive and qual
itat
ive
informat
ion. The assessment presents a consol
idated view across five pillars of how exposed
and ready for transit
ion or adaptat
ion our clients may be. Out of the five pillars, the first one relates to ident
ify
ing relevant
data sources and disclosures and is the only section that is not scored.
1. Identify risks and mit
igat
ion plans
The CRQ helps us to form a view of the overall Climate Risk profile of our clients and supports the underlying themes that feed
into our broader scenario analysis and corporate planning exercises. Following enhancement in 2023, the CRQ was used to
assess our portfolio in 2024. In late 2024, we launched the fourth version of the CRA, which introduced net zero alignment
metrics to inform Transit
ion R
isks and the outputs from internal models. A key focus for 2025 and beyond is to improve the
financial quant
if
icat
ion of Physical Risk in the CRA, leveraging Climate X data, which will enable enhanced loss estimat
ion
from physical risk hazard events. We have also started to grade Physical Risk for property and shipp
ing backed collaterals.
Coverage of our analysis
As of September 2024, we completed CRAs for 4,065 clients, representing circa 71 per cent of our corporate client lim
its.
The levels and consistency in the availab
il
ity of climate informat
ion from publ
ic disclosures has increased in the last three
years, however, this is still a developing aspect in some of our footprint markets where the transit
ion journey
is in its nascent
stages. The difference between our own ambit
ions and the nat
ionally disclosed contribut
ions
in some of our markets has
further highl
ighted the
importance of engaging with our clients on this topic, so we are able to assess clients across our
markets appropriately.
See
pages 74 to 89
for more informat
ion on our net zero asp
irat
ion.
How different markets in our footprint compare
Clients are assessed across the four pillars relating to gross physical and transit
ion r
isk, as well as their respective mit
igat
ion
levels, i.e. physical risk adaptation and credib
il
ity of transit
ion plan, each of wh
ich are scored between 0 and 100 per cent,
with a higher score ind
icat
ing a better result (e.g. lower risk or higher mit
igat
ion levels). The average of these scores across all
assessed clients is shown below by market.
Client-level Climate Risk Assessment scores by markets
2024 YTD Assessment
Number of clients
Gross Physical
score
Physical Risk
adaptation
Gross Transit
ion
Risk
Credib
il
ity of
Transit
ion Plan
Asia – Greater China & North Asia
1,714
65%
33%
51%
52%
Asia – ASEAN & South Asia
939
56%
28%
49%
46%
Africa & Middle East
343
65%
14%
51%
30%
Europe & Americas
1,069
69%
51%
52%
73%
Total
4,065
64%
35%
51%
54%
262
Standard Chartered
– Annual Report 2024
Risk review
Risk profile
•
Transit
ion R
isk scores remained fairly stable and improved across regions.
–
We continue to see better Credib
il
ity of Transit
ion and Phys
ical Risk adaptation scores for corporates domic
iled
in Europe
and Americas, where disclosure levels are highest, 2050 net zero plans have been committed to, and the plans to effectively
manage Climate Risk are being put in place.
–
There has been a slight slowdown in the pace of transit
ion plann
ing at corporate level given the focus on energy security
amidst increased geopolit
ical pressures. However, the long-term trend of gradual
increase in quantif
iable cl
imate change
commitments, driven by increas
ing CTPs numbers across markets,
is intact.
•
Physical Risk adaptation continues to be area of concern for major
ity of our markets, w
ith the lowest absolute scores in Africa
and the Middle East followed by Asia.
•
Asia dominates our total volume of clients, with a 65 per cent share of the global client base assessed (2023: 65 per cent;
2022: 62 per cent).
Clients are deemed to have very
high exposure to Transit
ion R
isk with
little or no mit
igat
ion plans
Clients are deemed to have very high
exposure to Transit
ion R
isk but with
acceptable or good mit
igat
ion plans
Clients are deemed to have high
exposure to Transit
ion R
isk but with
acceptable or good mit
igat
ion plans.
Green
Clients are deemed to have low
or lim
ited exposure to Trans
it
ion R
isk
Black
Red
Amber
2. Analysing the Climate Risk BRAG ratings
Each client is assigned a colour-coded Climate Risk rating
(Black “B”, Red “R”, Amber “A”, Green “G” BRAG) based on the
gross transit
ion r
isk and transit
ion r
isk mit
igat
ion. Owing to
Physical Risk data being less robust, we have focused only on
Transit
ion R
isk drivers to compute the Climate Risk grading.
However, as highl
ighted
in the section above, we have seen
a steady improvement in the coverage of Physical Risk data
in the last few years. We are in the process of incorporating
a methodology to include both physical and transit
ion r
isk
drivers to assess the climate risk faced by a client.
There are currently four types of BRAG ratings assigned
to clients.
The chart below shows a distr
ibut
ion of Green, Amber, Red,
Black rated clients across our markets split by the outstanding
exposure as of September 2024. Black-rated clients currently
account for less than one per cent of our assessed exposure.
ASEAN and
South Asia
2
Asia – GCNA
1
Africa &
Middle East
Europe &
Americas
1
GCNA countries include China, Hong Kong, Japan, Republic of Korea
and Taiwan
2
ASEAN and South Asia countries include Australia, Bangladesh, Indonesia,
India, Sri Lanka, Marshall Islands, Macau, Malaysia, Nepal, Phil
ipp
ines,
Singapore, Thailand and Vietnam
21%
1%
78%
18%
4%
78%
21%
4%
75%
27%
6%
68%
Portfolio Distr
ibut
ion across key markets
Green
Amber
Red
Black
3. Evaluating the risk (linkage to credit process)
Once a Climate Risk grading is assigned to a client, the
impacts from climate-related risks are integrated into the
exist
ing cred
it approval process qualitat
ively and/or
quantitat
ively through
inclus
ion w
ith
in the bus
iness risk
analysis and financ
ial modell
ing. If the risks are deemed
material and not adequately represented via the exist
ing
credit rating of the client, subject
ive warn
ing signals may
be added to influence the credit rating. Addit
ionally, r
isk
triggers are added to monitor risks that are not adequately
mit
igated and to seek add
it
ional
informat
ion from the cl
ient
where applicable.
4. Portfolio management and monitor
ing
A. Orig
inat
ion stage
We have embedded qualitat
ive and quant
itat
ive cl
imate
considerat
ions
into the Group’s credit underwrit
ing pr
inc
iples
for Oil and Gas, Metals and Min
ing, Sh
ipp
ing, Commerc
ial
Real Estate (CRE) and Project Finance portfolios. This includes
introduc
ing portfol
io-level caps for Black and Red rated clients
and lower preference for emiss
ion-
intens
ive transact
ions.
The underlying princ
iples vary depend
ing on the sector and
are intended to help steer the portfolio in the desired direct
ion
over the medium term, and also consider the Group’s 2030
financed emiss
ion targets.
B. Exposure monitor
ing and R
isk Appetite thresholds
Concentration of Black and Red Climate Risk rated clients
remain with
in proposed R
isk Appetite thresholds across our
portfolio as of September 2024. Our Green-rated clients are
concentrated in more developed markets and this reflects
the higher level of Climate Risk disclosures and governance
established by companies in these markets. Asia has the
highest proportion of exposure, which is rated Red. Amongst
the key markets, Bangladesh, Nepal, Vietnam and Indonesia
drive this higher risk concentration due to a combinat
ion of
clients that have fewer disclosures and high Transit
ion R
isk,
particularly fossil fuel heavy industr
ies, and some
impos
it
ion
of carbon taxes and polic
ies to trans
it
ion the broader nat
ion.
This, combined with weaker transit
ion plans, leads corporates
in these markets to be rated as higher Climate Risks.
C. Credit mit
igat
ion – collateral
We have expanded coverage of Climate Risk and Credit Risk
considerat
ions to assess corporate cl
ients’ collateral, given
they serve as key risk mit
igants, espec
ially in default events.
In 2024, an internal methodology was established to ident
ify,
assess and incorporate appropriate climate-related risks in
property and shipp
ing collateral of corporate cl
ients that were
assessed as part of the client-level CRA.
263
Standard Chartered
– Annual Report 2024
Risk review and Capital review
D. High risk client monitor
ing
A key strategic focus area going forward is to fully embed
Climate Risk and net zero targets into business and credit
decis
ions. To enable th
is, the Net Zero Climate Risk Working
Forum (Forum) meets quarterly to discuss account plans for
high Climate Risk and net zero divergent clients. Five meetings
have been held so far since Q4 2023. The Forum has reviewed
Client Groups for Climate Risk and net zero commitment
related risks across Power Generation, Oil and Gas, Steel,
Cement, Alumin
ium, CRE and Commod
ity Trading sectors.
The focus of these meetings is to:
•
increase engagement with the selected clients to gain a
deeper understanding of their transit
ion comm
itments and
the strategies they have in place to achieve them
•
drive stronger credit related decis
ions on exposures
primar
ily
in high transit
ion r
isk sectors (exposure
management, credit rating impact)
•
ident
ify opportun
it
ies to support cl
ients in their
decarbonisat
ion journey through adv
isory and/or
financing serv
ices
•
request further informat
ion from cl
ients on Physical Risk
adaptation measures employed where Physical Risk is
deemed to be high
•
decide on relationsh
ip strateg
ies where appropriate.
E. Credib
il
ity of Transit
ion Plans (CTPs)
We aim to actively manage our exposure by working closely
with our exist
ing cl
ients to develop credible transit
ion plans
that are consistent with our net zero commitments. We also
look for opportunit
ies to support lower em
iss
ions-
intens
ive
clients. We leverage the data captured in the CRQ and assign
a credib
il
ity rating to the clients’ transit
ion plan based on
an in-house scoring methodology that draws on the UK
Transit
ion Plann
ing Taskforce and Glasgow Financ
ial All
iance
for Net Zero guidance.
The current methodology will be period
ically rev
iewed as the
level of client-level climate-related disclosure steps up across
our footprint to ensure it remains fit for purpose and in line
with industry best practices, stakeholder expectations and
regulatory requirements. The CTP has been embedded into
the Version 3 CRQ that was implemented in early 2024.
5. Controls and assurance
Independent control checks by the first line of defence
and assurance reviews by the second line of defence on
integrat
ing Cl
imate Risk with
in the cred
it process are carried
out quarterly to improve the quality and effectiveness of
assessing Climate Risk. The results of the assurance testing
and steps to address gaps are period
ically shared w
ith
impacted stakeholders and as part of governance updates
to risk committees.
Environmental, Social and Governance and
Reputational (ESGR) Risk
We perform addit
ional cl
ient-level due dil
igence for (
i)
corporate clients covered by the Group’s net zero targets for
high-carbon sectors (Oil and Gas, Power, Steel, Alumin
ium,
Cement, Automobiles, Shipp
ing, Av
iat
ion, CRE and
Agriculture); (i
i) cl
ients with a coal nexus
1
; and (i
i
i) those that
have been assessed at a client-level as high Climate Risk.
The assessment focuses on three pillars covering both client
and transaction-level aspects:
2
As defined by the Group’s Posit
ion Statement to only prov
ide and phase out
exist
ing financial serv
ices to clients who by 2030, are less than 5 per cent
dependent on thermal coal (based on percentage revenue). Addit
ionally, any
client that uses thermal coal for captive purposes to support the
manufacturing process in industr
ies such as Alum
in
ium, Cement and Steel
where there is no economically viable alternative.
Client Level
Transaction Level
Temperature Alignment
Temperature Alignment
and Comparison to
client peers
Credib
il
ity of Transit
ion Plan
Readiness and Robustness
of transit
ion strategy from
client risk assesments
Net Zero Emiss
ions Impact
Influence on Net Zero alignment from both
internal and regional context
1
As defined by the Group’s Posit
ion Statement to only prov
ide and phase out
exist
ing financial serv
ices to clients who by 2030, are less than 5 per cent
dependent on thermal coal (based on percentage revenue). Addit
ionally,
any client that uses thermal coal for captive purposes to support the
manufacturing process in industr
ies such as Alum
in
ium, Cement and Steel
where there is no economically viable alternative.
The above-mentioned due dil
igence supplements our ex
ist
ing
Environmental and Social (E&S) risk management processes
as well as our oversight against our Posit
ion Statements and
Prohib
ited Act
iv
it
ies list. Reviews are conducted at a client-
level to ident
ify root causes, where spec
if
ic cr
iter
ia
in Posit
ion
Statements are not fully met or there are ind
iv
idual clients
that do not comply with the enhanced E&S criter
ia, and
propose mit
igat
ion plans. Such reviews may involve client
engagement and seek commitment from clients to take
corrective actions. In case of non-compliance with the
above-mentioned criter
ia, such cl
ients are escalated to the
Group Responsib
il
ity and Reputational Risk Committee,
where transactions and clients can be rejected.
The Group has commenced an exercise to consolidate
Reputational, E&S and CRAs into a single ESGR Risk
assessment, which we aim to roll out in phases over 2025. This
assessment will bring together multiple sustainab
il
ity-related
risk themes and improve interl
inkages between r
isk types, as
well as integrate a client’s degree of alignment against the
Group’s net zero commitments into the outcome. As a result,
client reviews of ESGR-related risks will be undertaken to
produce a more cohesive client sustainab
il
ity assessment.
The Group has governance frameworks and standards
for Sustainable Finance (SF) attributes which set out the
requirements and responsib
il
it
ies for manag
ing greenwashing
risks through the ongoing monitor
ing of susta
inable finance
products, transactions, and clients throughout their lifecycle,
from labelling to disclosures. The Green and Sustainable
Product Framework, Sustainab
il
ity Bond Framework and
Transit
ion F
inance Framework outline how we apply the
‘green’, ‘sustainable’ or ‘transit
ion’ labels across products
and transactions. In addit
ion, the E&S R
isk Management
Framework sets out a series of Posit
ion Statements, wh
ich
serve as our E&S guardrails when assessing in-scope SF
transactions and pureplay clients.
264
Standard Chartered
– Annual Report 2024
Risk review
Risk profile
All SF products are approved by the Sustainable Finance
Governance Committee prior to roll out. All SF-labelled
transactions are approved by SF-empowered approvers
or the Transit
ion F
inance Labelling Sub-Committee on a
transaction-by-transaction basis. An assessment toolkit has
been developed to standardise the Group’s assessment of SF
attributes for SF transactions. The Group has built a dig
it
ised
solution to enable approved SF condit
ions to be mon
itored
and tracked in a timely manner. To prevent overconcentration
of SF liab
il
ity products, daily monitor
ing through an
automated dashboard has also been established. We have
enhanced these standards and controls to incorporate
requirements from emerging regulatory obligat
ions, such
as the Financ
ial Conduct Author
ity’s (FCA) anti-greenwashing
rule, and to address the market integr
ity and greenwash
ing
concerns from regulators around the sustainab
il
ity-linked
loan market.
The Group has developed internal guidel
ines for manag
ing
the potential risk of greenwashing in our marketing and
advertis
ing,
includ
ing requ
irements for the review and
approval of sustainab
il
ity-related marketing campaigns
and communicat
ions. These requ
irements have been set
out in the governance standards for segment campaigns,
corporate communicat
ions, and brand management.
Country Risk
The Group uses a set of Physical and Transit
ion R
isk rankings to ident
ify the markets most vulnerable and least ready to adapt
and mit
igate cl
imate-related Physical and Transit
ion R
isks.
Based on the aggregated Physical and Transit
ion R
isk scores, sovereigns are split into decile-based buckets ranging from
1 (low risk) to 10 (high risk). These rankings are used as qualitat
ive and quant
itat
ive
inputs to our internal Country Risk
management process spanning annual sovereign credit grades and lim
its rev
iews, inputs to climate-related scenario
analysis, and Risk Appetite.
GCR exposure distr
ibut
ion across the Physical Risk categories (as at 30 September 2024)
Bucket
1 (Best)
2
3
4
5
6
7
8
9
10 (Worst)
Exposures %
11.06%
28.81%
18.25%
5.36%
17.67%
8.69%
1.80%
6.73%
0.67%
0.96%
GCR exposure distr
ibut
ion across the Transit
ion R
isk categories (as at 30 September 2024)
Bucket
1 (Best)
2
3
4
5
6
7
8
9
10 (Worst)
Exposures %
3.19%
14.66%
11.21%
35.43%
18.05%
4.81%
3.93%
7.72%
0.86%
0.14%
Insights
•
For both Physical and Transit
ion R
isk, our exposure to
high-risk countries (buckets 9 and 10) remains well below
Risk Appetite thresholds.
•
The rankings are largely driven by the level of financ
ial
risk countries are exposed to and their abil
ity to absorb
these losses. As such, the rankings are largely dependent
on countries’ development stage, economy-wide
divers
ification,
in-country inequal
it
ies and gross exposure
to Transit
ion and Phys
ical Risk shocks.
•
Addit
ionally, we keep close track of Trans
it
ion R
isk events,
such as the establishment of the EU’s and UK’s Carbon
Border Adjustment Mechanism (CBAM) and its potential
impact on our key portfolios. Other markets with carbon
pric
ing mechan
isms (such as Singapore, South Korea,
South Africa,) are also being monitored as part of Country
Risk annual reviews. From a Physical Risk standpoint, the
Group continues to monitor extreme weather events in
key footprint markets as part of our annual Country
Risk reviews.
Lim
itat
ions
•
The computation inputs are based on latest available data
which may be dated. Proxies have been used where data
for the sovereign is not available.
•
The ranking uses equally spaced decile scores and provides
the results in an ordinal manner. While the simpl
ic
ity helps
in adoption and provides the relative posit
ion of the
sovereigns, other systems may provide more informat
ion.
Operational, Technology and Cyber Risk
Climate Risk primar
ily man
ifests as an operational, technology
and cyber risk when Physical Risk disrupts our properties, data
centres and vendor arrangements.
We assess the physical risk vulnerabil
it
ies of our exist
ing s
ites
on a regular basis and for new sites during the onboarding
process. Going forward, we will be ranking sites that are most
susceptible to physical risks to make these sites more resil
ient
by exploring infrastructure improvements, where possible.
Furthermore, we have enhanced our systems to gather
relevant data of our key vendors’ delivery locations to assess
the Physical Risk to their facil
it
ies to ensure business continu
ity.
We have also evaluated the Transit
ion R
isk to achieve net zero
in our own operations. The Group relies mainly on Renewable
Energy Certif
icates (RECs) to abate
its Scope 2 emiss
ions,
given our footprint in less regulated markets where access to
renewable energy is often lim
ited or would requ
ire sign
ificant
capital investments. Long-term contracts, such as Purchase
Power Agreements, which have more price stabil
ity
compared to RECs, are being explored, with continued focus
on retrofitting propert
ies for improv
ing energy efficiency
where possible.
In terms of non-financial ESGR r
isk management, on-site
audits are undertaken for certain vendors assessed to pose
high modern slavery risk and adverse media screening
enhancements were implemented to cover key phrases
and to include modern slavery and human rights.
Assessment of gross Physical Risk at our own operating locations (as of September 2024)
Physical Risk event
Time horizon
Scenario
Asia –
GCNA
Asia –
ASEAN &
South Asia
AME
E&A
Global
Flood (Acute)
2024
N/A
16%
16%
6%
6%
13%
Wildf
ire (Acute)
0%
0%
0%
0%
0%
Storm (Acute)
26%
8%
0%
6%
14%
Sea-level rise (Chronic)
2100
RCP 8.5
1%
1%
5%
0%
2%
Heat Stress (Chronic)
2050
RCP 8.5
0%
56%
37%
0%
26%
Number of operating locations
390
293
217
31
931
265
Standard Chartered
– Annual Report 2024
Risk review and Capital review
Insights
•
From an acute risk perspective, 13 per cent of the Group’s
locations globally are subjected to extreme flood risk,
14 per cent with extreme storm risk and none at extreme risk
from wildf
ire. G
iven our footprint, a higher proportion of the
Group’s locations in GCNA (16 per cent for flood; 26 per cent
for storm) and ASEAN and South Asia (16 per cent for flood;
8 per cent for storm) are subjected to extreme acute risks
and 6 per cent of locations in Europe and Americas, are
subjected to flood risks.
•
In the locations where weather events such as storms
or cyclones are frequent, the build
ings are bu
ilt in
considerat
ion of these r
isks to local build
ing standards.
•
From a chronic risk perspective, under RCP 8.5, our exposure
to heat stress is at 26 per cent (37 per cent for AME;
56 per cent for ASEAN and South Asia). Exposure to
sea-level rise remains below 5 per cent.
•
A broad range of mit
igat
ion options are considered, such
as property insurance and operating a divers
ified locat
ion
strategy to reduce concentration risk.
Traded Risk
We manage the Climate Risk of Traded Risk exposures
through the stress-testing framework. Climate risks are
incorporated in the scenarios monitored against the Traded
Risk stress Risk Appetite, covering all fair value exposures in
the trading and banking books.
Climate-related stress scenarios are designed to include
transit
ion r
isk effects from climate change polic
ies and
shocks to markets due to supply and demand disrupt
ion from
physical climate events. Three scenarios are currently in place:
two physical and one transit
ional. The assumpt
ions and
results are subject to internal governance. In 2024, a new
transit
ion scenar
io, where the US unexpectedly partic
ipates
in the CBAM, was approved and will replace the current
transit
ion scenar
io in 2025. The introduct
ion of th
is scenario
will enable us to have a single transit
ion scenar
io applied
across the Group. We continue to address gaps related to
market risk factors and shorter-term shocks.
Our Climate Risk management for Traded Risk exposures is
evolving and we are working closely with industry bodies and
academics to better assess and monitor climate-related risks
and opportunit
ies.
Treasury Risk
From a capital perspective, climate risk considerat
ions have
been part of our ICAAP submiss
ions s
ince 2019. Our approach
for assessing climate risk impact on capital adequacy has
improved from qualitat
ive judgements to quant
itat
ive
simulat
ions across a range of scenar
ios with the availab
il
ity
of tools and greater understanding of our portfolio.
We consider climate risk in our ICAAP across Credit Risk,
Operational, Technology and Cyber Risk and Traded Risk.
As understanding of climate risk management and potential
forward-looking scenarios develop, our approach and
assessment will continue to evolve.
From a liqu
id
ity risk perspective, we expanded coverage of
the top corporate client liqu
id
ity portfolio and continue to
monitor for Climate Risk-related vulnerabil
it
ies and readiness,
leveraging the client outreach and data-gathering exercise
undertaken on the asset side. The most recent exposure
concentration in the Red Climate Risk rating is broadly
comparable with what we see for our top corporate client
exposures on the asset side. Liqu
id
ity providers graded Red
Climate Risk rating are from Transportation and Storage
sectors. The results of the analysis have been considered as
part of our Internal Liqu
id
ity Adequacy Assessment Process.
Model Risk
Since 2022 we have been build
ing our
internal Climate
Risk modelling capabil
it
ies to assess impacts from Climate
Risk, through collaboration with various external vendors.
The development of internal Climate Risk models has
reduced our reliance on external vendor models, and we will
continue to enhance our internal capabil
it
ies by extending
model coverage (e.g. to develop models to cover more
portfolios, or to develop more granular sector-specif
ic models)
and incorporating model enhancements recommended by
internal and external stakeholders. All the models developed
are independently validated by the second line of defence
and approved by the Credit Model Assessment Committee.
The models were used to estimate climate impact on
Expected Credit Loss (ECL) for IFRS 9 and stress testing
usages. In 2024 we developed two more sector-specif
ic
transit
ion r
isk probabil
ity of default (PD) models for
Automotive and Shipp
ing. We also enhanced the corporate
transit
ion r
isk PD models to include improved granularity for
the Oil and Gas model which better captures sector-specif
ic
risk drivers, changing from a constant to a dynamic interest
expense projection and
includ
ing more accurate cap
ital
expenditure calculations. The sovereign climate PD model
has also been enhanced by adding material sovereigns,
Hong Kong and Singapore, in model calibrat
ion.
Key prior
it
ies for 2025 include expanding model coverage to
capture Physical Risk in PD (for corporates) and loss given
default (for corporates and retail mortgages) and Transit
ion
Risk for special
ised lend
ing scorecards (Project finance and
Shipp
ing finance).
Apart from models that are used to estimate ECL, we have
developed temperature alignment models that are forward-
looking and assess impl
ied temperature r
ise scores for
corporate counterparties. The output from temperature
alignment models supports internal climate risk management
processes with
in the Group.
Assessing the resil
ience of our strategy us
ing
scenario analysis
To assess climate-related risks and opportunit
ies
in the short,
medium and long-term we use scenario analysis to consider
how risks and opportunit
ies may evolve under d
ifferent
situat
ions. We have cont
inued to further strengthen our
scenario analysis capabil
it
ies by moving towards internal
models and developing our infrastructure and capabil
it
ies to
incorporate Climate Risk into data, modelling, and analysis.
We have partic
ipated
in several regulatory climate stress tests
in 2024, includ
ing the Hong Kong Monetary Author
ity (HKMA)
climate stress test which was based on three long-tenor and
one short-tenor scenarios. We are also partic
ipat
ing in the
Monetary Authority of Singapore’s (MAS), Bank Negara
Malaysia’s (BNM) and Otoritas Jasa Keuangan’s (OJK)
climate stress tests. Results are expected to be submitted
in 2025.
266
Standard Chartered
– Annual Report 2024
Risk review
Risk profile
Scenarios used by the Group
The table below summarises the climate risk scenarios used internally by the Group across risk types for scenario analysis,
and Group ICAAP assessments.
Risk types
Scenario family
Number of
scenarios
Risk measure/usecCase
Refer
page no
Credit Risk – CIB
Network for Greening the Financ
ial
System Version 3 (NFGS v3)
Bespoke Tail and Base
6
Stressed ECL
267
Credit Risk – WRB
NGFS v3
Bespoke Tail and Base
6
Stressed ECL, Stranded Assets
estimate
268
Operational, Technology and
Cyber Risk
Intergovernmental Panel on Climate
Change’s (IPCC)
RCP scenarios
2
Physical Risk concentration for
sea-level rise risk
264
Traded Risk
Bespoke (two Physical scenarios and
one Transit
ion scenar
io)
3
Stressed Loss
265
Transit
ion (T) and Phys
ical (P) Risk scenarios
We adapted the following scenarios for our CIB and WRB businesses:
Scenario family
Scenario name
Key features
NGFS Phase 3
Net Zero 2050 (T)
Global warming lim
ited to 1.5°C through str
ingent climate polic
ies and
innovat
ion
Global net zero CO
2
emiss
ions around 2050
Delayed Transit
ion (T)
Strong polic
ies w
ill be needed to lim
it warm
ing to below 2°C
Annual emiss
ions do not decrease unt
il 2030
Current Polic
ies (P+T)
No addit
ional pol
ic
ies beyond those currently
implemented, along with slow
technology change
Global temperature rises over 3°C by 2100
Bespoke
In-house Base Case (P+T)
Credib
il
ity assessment of countries’ current sector targets in the short to medium-term
(2030) and a durabil
ity assessment of reduct
ion commitments in the long-term (2050)
Delayed transit
ion to a low-carbon economy and a lack of early cl
imate action resulting
in a 2.5°C temperature rise by 2100
Green Trade War Tail (T)
Impact to global trade due to introduct
ion of the CBAM lead
ing to trade war escalation
Explores risks which are not addressed by the NGFS scenarios and may emerge over a
short to medium-term horizon
Migrat
ion Ta
il (P)
Increasing severe acute weather events globally impact global food prices and drive
migrat
ion and d
isplacement
IPCC (2050, 2100)
RCP 2.6 (P)
RCP 4.5 (P)
RCP 8.5 (P)
Pathways of greenhouse gas emiss
ions and atmospher
ic concentrations, air pollutant
emiss
ions and land use to project the
ir consequences for the climate system
Current and projected hazard scores across a range of hazards such as tropical
cyclones, river flood, sea-level rise, heat stress, precip
itat
ion stress, wildf
ire, and drought
stress from Munich Re model are used
The scenarios used for CIB clients are characterised by
different levels of transit
ion and phys
ical risk, driven by
various features in each scenario.
Carbon price:
increase in carbon price puts addit
ional cost
pressure on clients, squeezes the profit margin, and thus helps
to determine level of potential credit losses.
Oil price:
increase (or lack thereof) in oil price impacts on
clients’ revenues and profitab
il
ity, and thus helps to determine
level of potential credit losses.
Features of the NGFS and Bespoke scenarios used in a Group scenario analysis
Key Variables
Year
NGFS v3
Bespoke scenarios
Net Zero
2050
Delayed
Transit
ion
Current
Polic
ies
Migrat
ion
Tail Physical
Risk
Green Trade
War Tail
Transit
ion
Risk
Temperature rise
2050
1.4°C
1.6°C
3°C+
NA
NA
Carbon price
2030
124
6
6
61
66
($2015/tCO
2
)
2050
487
416
7
70
90
Oil price
2030
84
94
94
51
50
(US$2015/boe)
2050
107
118
125
41
41
Gas price change
(vs 2020, %)
2030
56%
43%
43%
15%
15%
2050
52%
54%
80%
-14%
-14%
Power demand change
(vs 2020, %)
2030
27%
35%
35%
20%
20%
2050
120%
129%
106%
75%
75%
GDP
baseline change (vs 2020, %)
2030
34%
36%
36%
-4%
-5%
2050
111%
110%
118%
-2%
-5%
267
Standard Chartered
– Annual Report 2024
Risk review and Capital review
Scenario analysis results for CIB
We assessed the impact of climate-related risks on our
corporate, sovereign, and financ
ial
inst
itut
ion clients covering
94 per cent of CIB exposures. This assessment, across the
NGFS and Bespoke scenarios, for these clients is primar
ily
reflective of the gross transit
ion r
isks, and lim
ited
impact from
physical risks. While client-level transit
ion plans were not
factored into the modelling, they were referenced to draw
addit
ional
ins
ights for pr
ior
ity sectors.
We used the first-generation internally developed transit
ion
risk models for NGFS scenarios in 2024, which was the first step
in our journey to transit
ion from our rel
iance on vendor models
to in-house capabil
it
ies.
The cumulative Loan Impairment (LI) Intensity measures the
level of incremental ECL against the exposure at default
(EAD). This metric enables us to assess the relative size of
our exposure subject to potential losses from climate risks.
As the graph below illustrates, cumulative LI intens
it
ies do
not go beyond three per cent during the forecast horizon for
the climate scenarios considered in our scenario analysis.
We expect the LI intens
ity to r
ise the most in the Green Trade
War scenario (Bespoke Tail Transit
ion R
isk) and the Migrat
ion
Tail scenario (Bespoke Tail Physical Risk), followed by the
Delayed Transit
ion and Net Zero 2050 scenar
ios, primar
ily
driven by corporates.
The Green Trade War Tail Transit
ion R
isk scenario shows the
highest LI intens
ity, reflect
ing the potential risks to the global
economy and subsequent increase in credit losses that
may manifest due to the climate subsidy competit
ion and
introduct
ion of CBAM. The h
igh LI intens
ity
in the Migrat
ion
Tail Physical Risk scenario is due to typhoons in the east Asian
economic hubs along with floods in India and Pakistan
leading to mass migrat
ion and drop
in world GDP. The high
LI intens
ity
in the Delayed Transit
ion scenar
io depicts that
delayed transit
ion w
ill be disrupt
ive due to a lower level of
innovat
ion that l
im
its the ab
il
ity to decarbon
ise effectively,
and ris
ing carbon pr
ices that squeeze profit margins. The high
LI intens
ity
in the Net Zero 2050 scenario is reflective of the
high transit
ion r
isks noted by higher carbon prices, coupled
with the need for greater investment to move to a low-carbon
economy. Relatively lower LI intens
ity observed
in the NGFS
Current Polic
ies scenar
io reflects the nascent modelling
capabil
it
ies on assessing the physical risk impact to client
asset locations and second-order impacts, such as that on
the supply chain.
Overall, we believe that the level of potential credit losses can
be mit
igated by cont
inu
ing to take act
ions, which the Group is
already doing across sectors as part of its net zero roadmap,
engaging with our clients on this topic and supporting clients
on their transit
ion journey.
See
page 74
for more informat
ion on the
Group’s transit
ion plan
2050
2045
2040
2035
2030
2025
2023
Loan Impairment Intensity for the Corporate Portfolio
0%
1.5%
1.0%
0.5%
2.0%
2.5%
2.7%
to
0.7%
3.0%
Current polic
ies
SCB in-house
Delayed transit
ion
Tail Physical
Net Zero 2050
Tail Transit
ion
Loan Impairment (LI) Intensity is calculated as gross expected credit losses (ECL) over exposure at default (EAD)
For corporate clients, we focused on the sectors in the table below that have been ident
ified as more vulnerable to potent
ial
climate impacts. As of December 2023, these sectors represented circa 48 per cent of our corporate portfolio.
Under the NGFS scenarios assessed, sectors such as Oil and Gas, Util
it
ies, and Automobiles and Components are most
impacted, primar
ily due to the r
ise in carbon prices in the scenarios and to some extent by the consequent macroeconomic
changes. For the internal scenarios, GDP crashes and second-order risks impact corporate clients across Oil and Gas,
Util
it
ies, Transportation and Construction sectors. The change in LI intens
it
ies compared with previous disclosures is due to a
combinat
ion of factors
includ
ing adopt
ion of in-house models for NGFS scenarios and changes in portfolio mix, amongst others.
268
Standard Chartered
– Annual Report 2024
Risk review
Risk profile
Loan Impairment intens
it
ies for key corporate sectors for the NGFS and Bespoke scenarios
Long Term – 2050
EAD Y0
(%)
NGFS v3
Net Zero 2050
NGFS v3
Delayed
Transit
ion
NGFS v3
Current
polic
ies
Bespoke
Baseline
Bespoke Tail
Transit
ion R
isk
Bespoke Tail
Physical Risk
Automobiles & Components
3%
Medium
Medium
Medium
Low
Medium
Medium
Build
ing Products, Construct
ion &
Engineer
ing
5%
Medium
Medium
Low
Medium
Medium
Medium
Consumer Durables & Apparel
5%
Low
Low
Low
Low
Medium
Medium
CRE
9%
Medium
Medium
Low
Low
Medium
Medium
Metals & Min
ing
4%
Low
Low
Low
Low
Low
Low
Oil & Gas
8%
High
High
Medium
Medium
High
Medium
Telecommunicat
ion Serv
ices
1%
Low
Low
Low
Low
Medium
Low
Transportation & Storage
8%
Low
Low
Low
Medium
High
Medium
Util
it
ies
4%
High
High
High
Medium
Medium
Medium
Total portfolio
100%
Medium
Medium
Low
Low
Medium
Medium
Exposure at Default (EAD) data is as of December 2023
The results are used to assess the impact of climate change
on our portfolio and provide management informat
ion to
monitor stressed LI over the next five-year horizon under
plausible and extreme climate scenarios. The results also
form part of our CRAs. While further enhancements to our
modelling and risk assessment capabil
it
ies are ongoing, the
results of scenario analysis have provided further validat
ion
to the actions the Group is taking in terms of our net zero
ambit
ions and strategy. Add
it
ionally,
it aligns with our
management in
it
iat
ives a
imed at improv
ing the data qual
ity
and build
ing
in-house modelling expertise. The results have
been subject to internal governance, includ
ing rev
iew and
challenge by an expert panel and discuss
ion at the CRMC
and BRC.
Scenario analysis results for WRB
WRB scenario analysis capabil
it
ies in 2024 considered the
changes in portfolio mix, use of NGFS scenarios, Bespoke
Base Case and short to medium-term tail risk scenarios and
incorporating a more analytical and data-driven approach
to management adjustments.
The impact of climate risk is captured through
macroeconomic variables that are influenced under a
range of climate condit
ions and by
incorporating the
following addit
ional cons
iderat
ions:
•
For our key resident
ial mortgage markets, we reassess
property valuations under different climate scenarios
using the forward-looking risk ind
ices from Mun
ich Re.
These revaluations are then used to inform haircuts on
the property prices and arrive at climate-adjusted ECL.
•
The impact of elevated energy bills was taken into
considerat
ion for the cred
it card portfolio to address
the transit
ion r
isks for key markets.
•
Stranded assets analysis was conducted for resident
ial
mortgages to account for the extreme physical risks under
the NGFS Current Polic
ies and M
igrat
ion Ta
il Physical Risk
scenarios. We define stranded assets as properties that are
expected to become uninhab
itable and/or unusable due
to increased frequency and intens
ity of phys
ical risk events
from acute and chronic risks. These stranded assets are
expected to see a complete erosion to the value of the
property. Insurance benefits were not considered beyond
2030 to build a conservative estimate, given the potential
issues around affordabil
ity and ava
ilab
il
ity of insurance for
such stranded assets in the longer term.
The following chart illustrates the stranded asset losses for
2050 across key resident
ial mortgage markets under the RCP
8.5 scenario based on Munich Re’s Risk Suite (Natural Hazards
Edit
ion). We exam
ined exposure concentration in key markets
subject to the extreme risk of floods and storms to assess the
acute physical risk, and sea-level rise to assess the chronic
physical risk. This analysis also considered addit
ional deta
ils,
such as age and type of the property and in-built flood
defence mechanism for the acute risk and distance to coast
for the chronic risk, subject to data availab
il
ity.
Markets such as Korea, India, Malaysia, China, and
Bangladesh exhib
it a h
igher level of potential losses as more
properties in these markets will be exposed to flood and
storm risks by the year 2050. While properties in UAE
exhib
it a h
igher level of sea-level rise risk by the year 2050.
It is important to note that while the management
adjustments related to stranded assets and higher energy
bills are data-driven, they also involve an element of
judgement, and represent gross physical risk measures as
they do not consider the level of adaptation measures
enforced by government polic
ies. We w
ill continue to refine
the approach to ensure its effectiveness. These results have
been subject to internal governance, includ
ing rev
iew and
challenge by an expert panel and discuss
ion at the CRMC
and BRC, and are shared with the first line of defence and
the second line of defence for portfolio monitor
ing and to
guide risk management strategies.
Our peak LI intens
it
ies for 2050 across the range of climate
scenarios, after incorporating stranded asset overlay, do
not exceed 3.1 per cent relative to the counterfactual base
scenario without climate impacts. Insurance polic
ies currently
mandated in the key markets such as Hong Kong, China
and UAE cover the damages that may be caused by flood
and storm in the short to medium-term. In Korea, where the
homeowners’ insurance coverage does not fully mit
igate
residual physical risks, we have established zoning polic
ies
to ringfence against properties subject to high physical risk.
These measures will help to ensure that the Group remains
resil
ient to the adverse cl
imate condit
ions. We also cont
inue
to actively manage the mortgage portfolio to mit
igate
physical risks build-up.
269
Standard Chartered
– Annual Report 2024
Risk review and Capital review
The size of the bubble is ind
icat
ive of the gross stranded asset losses assessed for all
of the resident
ial mortgage book
Expected losses due to stranded assets for retail mortgages
by 2050 (December 2023 snapshot)
High risk
Medium risk
Low risk
High risk
Low risk
Medium risk
Chronic Risk (Sea Level Rise)
Acute Risk (Flood and Storm)
Hong
Kong
Korea
China
India
UAE
Taiwan
Singapore
Malaysia
Bangladesh
Recent events in countries like Bangladesh, China, and the
UAE have highl
ighted the
increas
ing frequency,
intens
ity,
and unexpected nature of natural disasters. In Bangladesh,
heavy monsoon rains have led to sign
ificant flood
ing,
displac
ing thousands of people, and caus
ing extensive
damage to infrastructure and agriculture. Sim
ilarly,
in China,
floods from heavy rainfall began in Guangdong Province
and spread northward, rais
ing water levels
in the Yangtze
River and the Pearl River Delta, and resulted in sign
ificant
flood damage and economic loss. While the UAE is
typically known for its arid climate, recent storms have
brought unexpected rainfall, leading to localised flooding
and disrupt
ion. These events serve as a rem
inder of the
vulnerabil
it
ies due to climate change.
Despite recent challenges, the Group has exhib
ited
sign
ificant res
il
ience, attr
ibutable to its robust balance
sheet and risk management practices.
Lim
itat
ions and next steps
Reliance on nascent methodologies, dependencies on
first-generation models and data lim
itat
ions are some
challenges that underpin the scenario analysis. Many of
these lim
itat
ions are shared across the industry. Given the
complexit
ies of cl
imate modelling, it should also be noted
that the results do not include the real-world aspects, such as
the non-linear shifts and complex feedback loops. As more
solution providers become available and banks start to
use them extensively to build internal understanding and
capabil
it
ies, the transparency and sophist
icat
ion of modelling
methodologies and assumptions will increase.
Nonetheless, the current results provide a strategic direct
ion
of the sense of portfolio concentrations subject to potential
climate losses. These results are used to inform portfolio
oversight and opportunity ident
ification w
ith clients on
their transit
ion and adaptat
ion pathways.
Addit
ionally, cons
iderable developments have been made in
build
ing capab
il
ity from a people, process, and technology
perspective to support stress tests and scenario analysis at
both Group and country level. As we look ahead, integrat
ing
internal climate risk models with
in the Group’s
infrastructure
will be a key prior
ity for the upcom
ing years. The development
of a management actions playbook to incorporate the
elements of climate risk is under way.
Qualitat
ive rev
iew of climate risks and
opportunit
ies
in annual business strategy
and financial plann
ing
In 2024, Climate Risk was considered as part of our formal
annual corporate strategy and financial plann
ing process.
We use both qualitat
ive and quant
itat
ive aspects focus
ing
on revenue reliance from clients in high-emitt
ing sectors
and/or locations most exposed to physical risk, consider
ing
the adequacy of mit
igat
ion plans. The results are then
independently reviewed by regional and client-segment
Chief Risk Officers and the ESGR Risk team. The Board
considers the impact of climate risk as part of their approval
of the corporate plan. The 2025 corporate plan includes an
increase in LI due to the impact from Climate Risk. A revenue
at risk sensit
iv
ity analysis to the corporate plan was performed
over the five-year period assuming lim
ited trans
it
ion,
i.e., no
client transit
ion plans and no cl
ient engagement. This was
considered as a potential downside risk to the corporate plan
only, given the prudent scenario.
In most cases, the Physical and Transit
ion r
isks ident
ified were
assessed to be well controlled in the short to medium-term.
We are inst
itut
ing controls around both new and exist
ing
clients with the aim to align those client carbon emiss
ion
intens
it
ies and ambit
ions to be commensurate w
ith the
Group’s portfolios, or there are plans in place to work with the
client on their transit
ion journey. Th
is alignment, done at a
portfolio level, and done through balancing exist
ing bus
iness
with sustainable and transit
ion finance products to cl
ients
in high-emitt
ing sectors to help decarbon
ise their business
models. Further our growth ambit
ion
includes sectors with
lower carbon intens
ity or em
iss
ions such as clean and
transit
ion technology. Our Susta
inable and Transit
ion
Finance product suite and our dedicated Sustainable
Finance, Transit
ion Accelerat
ion and ESG advisory teams
aim to mit
igate trans
it
ion r
isks in the short to medium-term,
strengthening our resil
ience towards a 2°C or lower trans
it
ion
scenario. However, longer-term transit
ion r
isks were
highl
ighted, part
icularly for Africa and the Middle East region,
given its dependency on fossil fuels; and longer-term physical
risks were deemed to be most relevant for the Asia region.
The Capital review provides an analysis of the Group’s capital and leverage posit
ion,
and requirements.
Capital summary
The Group’s capital, leverage and min
imum requ
irements for own funds and elig
ible l
iab
il
it
ies (MREL) pos
it
ion
is managed
with
in the Board-approved r
isk appetite. The Group is well capital
ised w
ith low leverage and high levels of loss-absorbing
capacity.
2024 | 2023 | |
CET1 capital | 14.2% | 14.1% |
Tier 1 capital | 16.9% | 16.3% |
Total capital | 21.5% | 21.2% |
Leverage ratio | 4.8% | 4.7% |
MREL ratio | 34.2% | 33.3% |
Risk-weighted assets (RWA) $mill ion | 247,065 | 244,151 |
The Group‘s capital, leverage and MREL posit
ions were all
above current requirements and Board-approved risk
appetite. For further detail see the Capital section in the
Standard Chartered PLC Pillar 3 Disclosures for FY 2024.
The Group’s CET1 capital increased 19 basis points to
14.2 per cent of RWA since FY2023. Profits, movements in
FVOCI, FX translation reserves and decrease in regulatory
deductions were partly offset by RWA growth and
distr
ibut
ions (includ
ing ord
inary share buybacks of
$2.5 bill
ion dur
ing the year).
The PRA updated the Group’s Pillar 2A requirement during
Q4 2024. As at 31 December 2024 the Group’s Pillar 2A was
3.7 per cent of RWA, of which at least 2.1 per cent must be
held in CET1 capital. The Group’s min
imum CET1 cap
ital
requirement was 10.5 per cent at 31 December 2024.
The Group CET1 capital ratio at 31 December 2024 reflects
the share buybacks of $2.5 bill
ion announced dur
ing the year.
The CET1 capital ratio also includes an accrual for the FY 2024
div
idend. The Board has recommended a final d
iv
idend for
FY 2024 of $679 mill
ion or 28 cents per share result
ing in a full
year 2024 div
idend of 37 cents per share, a 37 per cent
increase on the 2023 div
idend. In add
it
ion, the Board has
announced a further share buyback of $1.5 bill
ion, the
impact
of this will reduce the Group’s CET1 capital by around 61 basis
points in the first quarter of 2025.
The Group expects to manage CET1 capital dynamically
with
in our 13-14 per cent target range,
in support of our aim
of deliver
ing future susta
inable shareholder distr
ibut
ions.
The Group’s MREL leverage requirement as at 31 December
2024 was 27.6 per cent of RWA. This is composed of a
min
imum requ
irement of 23.7 per cent of RWA and the Group’s
combined buffer (compris
ing the cap
ital conservation buffer,
the G-SII buffer and the countercyclical buffer). The Group’s
MREL ratio was 34.2 per cent of RWA and 9.7 per cent of
leverage exposure at 31 December 2024.
During 2024, the Group successfully raised $9.1 bill
ion of MREL
elig
ible secur
it
ies from
its holding company, Standard
Chartered PLC. Issuance include $1.6 bill
ion of Add
it
ional T
ier 1
and $7.5 bill
ion of callable sen
ior debt.
The Group raised an addit
ional $1.0 b
ill
ion of Add
it
ional T
ier 1
and $2.5 bill
ion
in senior securit
ies post the balance sheet
date, i.e. not included in the FY 2024 MREL posit
ion.
The Group is a G-SII, with a 1.0 per cent G-SII CET1 capital
buffer. The Standard Chartered PLC G-SII disclosure is
published at: sc.com/en/investors/financ
ial-results.
270
Standard Chartered
– Annual Report 2024
Capital review
Risk review and Capital review
Standard Chartered
– Annual Report 2024
271
Capital base
1
(audited)
2024 | 2023 | |
$mill ion | $mill ion | |
CET1 capital instruments and reserves | ||
Capital instruments and the related share premium accounts | 5,201 | 5,321 |
Of which: share premium accounts | 3,989 | 3,989 |
Retained earnings | 24,950 | 24,930 |
Accumulated other comprehensive income (and other reserves) | 8,724 | 9,171 |
Non-controlling interests (amount allowed in consolidated CET1) | 235 | 217 |
Independently audited year-end profits | 4,072 | 3,542 |
Foreseeable div idends | (923) | (768) |
CET1 capital before regulatory adjustments | 42,259 | 42,413 |
CET1 regulatory adjustments | ||
Addit ional value adjustments (prudent ial valuation adjustments) | (624) | (730) |
Intangible assets (net of related tax liab il ity) | (5,696) | (6,128) |
Deferred tax assets that rely on future profitabil ity (excludes those aris ing from temporary d ifferences) | (31) | (41) |
Fair value reserves related to net losses on cash flow hedges | (4) | (91) |
Deduction of amounts resulting from the calculation of excess expected loss | (702) | (754) |
Net gains on liab il it ies at fa ir value resulting from changes in own credit risk | 278 | (100) |
Defined-benefit pension fund assets | (149) | (95) |
Fair value gains aris ing from the inst itut ion’s own credit risk related to derivat ive l iab il it ies | (97) | (116) |
Exposure amounts which could qualify for risk weight ing of 1250% | (44) | (44) |
Total regulatory adjustments to CET1 | (7,069) | (8,099) |
CET1 capital | 35,190 | 34,314 |
Addit ional T ier 1 capital (AT1) instruments | 6,502 | 5,512 |
AT1 regulatory adjustments | (20) | (20) |
Tier 1 capital | 41,672 | 39,806 |
Tier 2 capital instruments | 11,449 | 11,965 |
Tier 2 regulatory adjustments | (30) | (30) |
Tier 2 capital | 11,419 | 11,935 |
Total capital | 53,091 | 51,741 |
Total risk-weighted assets (unaudited) | 247,065 | 244,151 |
1
Capital base is prepared on the regulatory scope of consolidat
ion
272
Standard Chartered
– Annual Report 2024
Capital review
Movement in total capital (audited)
2024 | 2023 | |
$mill ion | $mill ion | |
CET1 at 1 January | 34,314 | 34,157 |
Ordinary shares issued in the period and share premium | – | – |
Share buyback | (2,500) | (2,000) |
Profit for the period | 4,072 | 3,542 |
Foreseeable div idends deducted from CET1 | (923) | (768) |
Difference between div idends pa id and foreseeable div idends | (469) | (372) |
Movement in goodwill and other intang ible assets | 432 | (326) |
Foreign currency translation differences | (525) | (477) |
Non-controlling interests | 18 | 28 |
Movement in elig ible other comprehens ive income | 636 | 464 |
Deferred tax assets that rely on future profitabil ity | 10 | 35 |
Decrease/(increase) in excess expected loss | 52 | (70) |
Addit ional value adjustments (prudent ial valuation adjustment) | 106 | 124 |
IFRS 9 transit ional impact on regulatory reserves includ ing day one | 2 | (106) |
Exposure amounts which could qualify for risk weight ing | – | 59 |
Fair value gains aris ing from the inst itut ion’s own Credit Risk related to derivat ive l iab il it ies | 19 | (26) |
Others | (54) | 50 |
CET1 at 31 December | 35,190 | 34,314 |
AT1 at 1 January | 5,492 | 6,484 |
Net issuances (redemptions) | 1,015 | (1,000) |
Foreign currency translation difference and others | (25) | 8 |
AT1 at 31 December | 6,482 | 5,492 |
Tier 2 capital at 1 January | 11,935 | 12,510 |
Regulatory amortisat ion | 1,189 | 1,416 |
Net issuances (redemptions) | (1,517) | (2,160) |
Foreign currency translation difference | (191) | 146 |
Tier 2 inel ig ible minor ity interest | (3) | 19 |
Others | 6 | 4 |
Tier 2 capital at 31 December | 11,419 | 11,935 |
Total capital at 31 December | 53,091 | 51,741 |
The main movements in capital in the period were:
•
CET1 capital increased by $0.9 bill
ion as reta
ined profits of $4.1 bill
ion, movement
in FVOCI of $0.6 bill
ion and a reduct
ion in
regulatory deductions and other movements of $0.6 bill
ion were partly offset by share buybacks of $2.5 b
ill
ion, d
istr
ibut
ions
paid and foreseeable of $1.4 bill
ion, fore
ign currency translation impact of $0.5 bill
ion.
•
AT1 capital increased by $1.0 bill
ion follow
ing the issuance of $1.0 bill
ion of 7.88 per cent secur
it
ies and $0.6 b
ill
ion of
5.30 per cent securit
ies partly offset by the redempt
ion of $0.6 bill
ion of 5.38 per cent secur
it
ies.
•
Tier 2 capital decreased by $0.5 bill
ion due to the redempt
ion of $1.6 bill
ion of T
ier 2 during the year partly offset by the
reversal of regulatory amortisat
ion and fore
ign currency translation impact.
Risk-weighted assets by business
| 2024 | ||||
Credit risk | Operational risk | Market risk | Total risk | |
$mill ion | $mill ion | $mill ion | $mill ion | |
Corporate & Investment Banking | 112,100 | 19,987 | 24,781 | 156,868 |
Wealth & Retail Banking | 41,002 | 9,523 | – | 50,525 |
Ventures | 2,243 | 142 | 21 | 2,406 |
Central & Other items | 33,958 | (173) | 3,481 | 37,266 |
Total risk-weighted assets | 189,303 | 29,479 | 28,283 | 247,065 |
| 2023 | ||||
Corporate & Investment Banking | 102,675 | 18,083 | 21,221 | 141,979 |
Wealth & Retail Banking | 42,559 | 8,783 | – | 51,342 |
Ventures | 1,885 | 35 | 3 | 1,923 |
Central & Other items | 44,304 | 960 | 3,643 | 48,907 |
Total risk-weighted assets | 191,423 | 27,861 | 24,867 | 244,151 |
Movement in risk-weighted assets
Risk review and Capital review
Standard Chartered
– Annual Report 2024
273
Credit risk | ||||||||
Corporate & | Wealth & | |||||||
Investment | Retail | Central & | Operational | |||||
Banking | Banking | Ventures | Other items | Total | risk | Market risk | Total risk | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
At 1 January 2023 | 110,103 | 42,091 | 1,350 | 43,311 | 196,855 | 27,177 | 20,679 | 244,711 |
Assets growth & mix | (4,424) | 728 | 535 | 1,183 | (1,978) | – | – | (1,978) |
Asset quality | (391) | 390 | – | 2,684 | 2,683 | – | – | 2,683 |
Risk-weighted assets effic ienc ies | – | – | – | (688) | (688) | – | – | (688) |
Model Updates | (597) | (151) | – | (151) | (899) | – | 500 | (399) |
Methodology and policy changes | – | (196) | – | – | (196) | – | (800) | (996) |
Acquis it ions and disposals | (1,630) | – | – | – | (1,630) | – | – | (1,630) |
Foreign currency translation | (386) | (303) | – | (2,035) | (2,724) | – | – | (2,724) |
Other, Including non-credit | ||||||||
risk movements | – | – | – | – | – | 684 | 4,488 | 5,172 |
At 31 December 2023 | 102,675 | 42,559 | 1,885 | 44,304 | 191,423 | 27,861 | 24,867 | 244,151 |
Assets growth & mix | 11,412 | 341 | 358 | (5,803) | 6,308 | – | – | 6,308 |
Asset quality | (1,349) | 112 | – | (1,935) | (3,172) | – | – | (3,172) |
Risk-weighted assets effic ienc ies | – | – | – | – | – | – | – | – |
Model Updates | 1,620 | (1) | – | – | 1,619 | – | (400) | 1,219 |
Methodology and policy changes | 38 | 39 | – | – | 77 | – | (1,300) | (1,223) |
Acquis it ions and disposals | – | – | – | – | – | – | – | – |
Foreign currency translation | (2,296) | (1,207) | – | (1,374) | (4,877) | – | – | (4,877) |
Other, Including non-credit | ||||||||
risk movements | – | (841) | – | (1,234) | (2,075) | 1,618 | 5,116 | 4,659 |
At 31 December 2024 | 112,100 | 41,002 | 2,243 | 33,958 | 189,303 | 29,479 | 28,283 | 247,065 |
Movements in risk-weighted assets
RWA increased by $2.9 bill
ion, or 1.2 per cent from 31 December
2023 to $247.1 bill
ion. Th
is was mainly due to decrease in
Credit Risk RWA of $2.1 bill
ion, an
increase in Market Risk RWA
of $3.4 bill
ion and Operat
ional Risk RWA of $1.6 bill
ion.
Corporate & Investment Banking
Credit Risk RWA increased by $9.4 bill
ion, or 9.2 per cent from
31 December 2023 to $112.1 bill
ion ma
inly due to:
•
$11.4 bill
ion
increase from changes in asset growth & mix,
of which:
– $9.0 bill
ion
increase from asset growth
– $3.1 bill
ion
increase from derivat
ives
– $0.8 bill
ion decrease from opt
im
isat
ion actions
•
$1.6 bill
ion
increase from industry-wide regulatory changes
to align IRB model performance from adjustment to
commercial real estate counterparties
•
$2.3 bill
ion decrease from fore
ign currency translation
•
$1.3 bill
ion decrease ma
inly due to an improvement in asset
quality reflecting client upgrades
Wealth & Retail Banking
Credit Risk RWA decreased by $1.6 bill
ion, or 3.7 per cent from
31 December 2023 to $41.0 bill
ion ma
inly due to:
•
$1.2 bill
ion decrease from fore
ign currency translation
•
$0.8 bill
ion decrease from reclass
if
icat
ion of credit cards
in Asia
•
$0.3 bill
ion
increase from changes in asset growth & mix
•
$0.1 bill
ion
increase mainly due to deteriorat
ion
in asset
quality mainly in Asia
Ventures
Ventures is comprised of Mox Bank Lim
ited, Trust Bank
and SC Ventures. Credit Risk RWA increased by $0.4 bill
ion,
or 19 per cent from 31 December 2023 to $2.2 bill
ion from
asset balance growth, mainly from SC Ventures.
Central & Other items
Central & Other items RWA mainly relate to the Treasury
Market’s liqu
id
ity portfolio, equity investments and current &
deferred tax assets.
Credit Risk RWA decreased by $10.3 bill
ion, or 23.4 per cent
from 31 December 2023 to $34.0 bill
ion ma
inly due to:
•
$5.8 bill
ion decrease from changes
in asset growth & mix
primar
ily from opt
im
isat
ion activ
it
ies
•
$1.9 bill
ion decrease due to
improvement in asset quality
mainly from sovereign upgrades in Asia and Africa
•
$1.4 bill
ion decrease from fore
ign currency translation
•
$1.2 bill
ion decrease due to report
ing enhancements
Market Risk
Total Market Risk RWA increased by $3.4 bill
ion, or
13.7 per cent from 31 December 2023 to $28.3 bill
ion
primar
ily dr
iven by:
•
$1.7 bill
ion
increase in Standardised Approach (SA) Specif
ic
Interest Rate Risk RWA mainly due to increases in the
Trading Book government bond portfolio
•
$2.7 bill
ion
increase in Internal Models Approach (IMA)
RWA from increases in VaR and Stressed VaR RWA due
mainly to increased interest rate exposures, offset by a
reduction of addons for Risks not in VaR
•
$1.3 bill
ion
in the first quarter decrease due to a reduction
in the IMA RWA multipl
ier result
ing from fewer back-
testing exceptions
Operational Risk
•
Operational Risk RWA increased by $1.6 bill
ion, or
5.8 per cent from 31 December 2023 to $29.5 bill
ion, ma
inly
due to a marginal increase in average income as measured
over a rolling three-year time horizon for certain products.
274
Standard Chartered
– Annual Report 2024
Capital review
Leverage ratio
The Group’s leverage ratio, which excludes qualify
ing cla
ims on central banks, was 4.8 per cent at FY2024, which was above the
current min
imum requ
irement of 3.7 per cent. The leverage ratio was 10 basis points higher than FY2023. Leverage exposure
increased by $21.2 bill
ion from decrease
in claims on central banks of $15.5 bill
ion, an
increase in Derivat
ives of $15.9 b
ill
ion,
securit
ies financing transact
ions of $1.2 bill
ion, decrease
in asset amounts deducted in determin
ing T
ier 1 capital (Leverage)
of $0.6 bill
ion, partly offset by decrease
in Off-balance sheet items of $5.0 bill
ion, Other Assets of $4.7 b
ill
ion, and secur
it
ies
financing transact
ion add-on of $2.4 bill
ion. T
ier 1 capital increased by $1.9 bill
ion as CET1 cap
ital increased by $0.9 bill
ion
and AT1 capital increased by $1.0 bill
ion follow
ing the issuance of $1.6 bill
ion partly offset by the redempt
ion of $0.6 bill
ion
AT1 securit
ies.
Leverage ratio
31.12.24 | 31.12.23 | |
$mill ion | $mill ion | |
Tier 1 capital (end point) | 41,672 | 39,806 |
Derivat ive financial instruments | 81,472 | 50,434 |
Derivat ive cash collateral | 11,046 | 10,337 |
Securit ies financing transact ions (SFTs) | 98,801 | 97,581 |
Loans and advances and other assets | 658,369 | 664,492 |
Total on-balance sheet assets | 849,688 | 822,844 |
Regulatory consolidat ion adjustments 1 | (76,197) | (92,709) |
Derivat ives adjustments | ||
Derivat ives nett ing | (63,934) | (39,031) |
Adjustments to cash collateral | (10,169) | (9,833) |
Net written credit protection | 2,075 | 1,359 |
Potential future exposure on derivat ives | 51,323 | 42,184 |
Total derivat ives adjustments | (20,705) | (5,321) |
Counterparty risk leverage exposure measure for SFTs | 4,198 | 6,639 |
Off-balance sheet items | 118,607 | 123,572 |
Regulatory deductions from Tier 1 capital | (7,247) | (7,883) |
Total exposure measure excluding claims on central banks | 868,344 | 847,142 |
Leverage ratio excluding claims on central banks (%) | 4.8% | 4.7% |
Average leverage exposure measure excluding claims on central banks | 894,296 | 853,968 |
Average leverage ratio excluding claims on central banks (%) | 4.7% | 4.6% |
Countercyclical leverage ratio buffer | 0.1% | 0.1% |
G-SII addit ional leverage rat io buffer | 0.4% | 0.4% |
1
Includes adjustment for qualify
ing central bank cla
275
Standard Chartered
– Annual Report 2024
Financ
ial statements
276 Independent Auditor’s report
287 Consolidated income statement
288 Consolidated statement of comprehensive income
289 Consolidated balance sheet
290 Consolidated statement of changes in equity
291 Cash flow statement
292 Company balance sheet
293 Company statement of changes in equity
294 Notes to the financial statements
Financ
ial statements
Serving
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ies
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iduals and their famil
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ith
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In October, we held our inaugural Global Family
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276
Standard Chartered
– Annual Report 2024
Financ
ial statements
Independent auditor’s report
Opin
ion
In our opin
ion:
•
Standard Chartered plc’s group financial statements and
parent company financial statements (the “financial
statements”) give a true and fair view of the state of
the group’s and of the parent company’s affairs as at
31 December 2024 and of the group’s profit for the year
then ended;
•
the group financial statements have been properly
prepared in accordance with UK-adopted International
Accounting Standards (UK IAS) and International Financ
ial
Reporting Standards (IFRS) as adopted by the European
Union (EU IFRS);
•
the parent company financial statements have been
properly prepared in accordance with UK IAS as applied in
accordance with section 408 of the Companies Act 2006;
and
•
the financial statements have been prepared
in accordance
with the requirements of the Companies Act 2006.
We have audited the financ
ial statements of Standard
Chartered plc (the ‘Company’ or the ‘Parent Company’) and
its subsid
iar
ies, interests in associates, and jo
intly controlled
entit
ies (together w
ith the Company—the ‘Group’) for the year
ended 31 December 2024 which comprise:
Group
Company
Consolidated income
statement for the year ended
31 December 2024;
Balance sheet as at 31 December
2024;
Consolidated statement of
comprehensive income for the
year then ended;
Cash flow statement for the year
then ended;
Consolidated balance sheet
as at 31 December 2024;
Statement of changes in equity
for the year then ended; and
Consolidated statement of
changes in equity for the year
then ended;
Related notes 1 to 40 to the
financial statements,
includ
ing:
material accounting policy
informat
ion.
Consolidated cash flow
statement for the year then
ended;
Related notes 1 to 40 to the
financial statements,
includ
ing:
material accounting policy
informat
ion;
Information marked as
‘audited’ with
in the D
irectors’
remuneration report from
page 143 to page 173; and
Risk Review and Capital Review
disclosures marked as ‘audited’
from page 193 to page 274.
The financial report
ing framework that has been applied in
their preparation is applicable law and UK IAS and EU IFRS;
and as regards the Parent Company financial statements,
UK IAS as applied in accordance with section 408 of the
Companies Act 2006.
Basis for opin
ion
We conducted our audit in accordance with International
Standards on Audit
ing (UK) (ISAs (UK)) and appl
icable law.
Our responsib
il
it
ies under those standards are further
described in the Auditor’s responsib
il
it
ies for the aud
it of
the financial statements sect
ion of our report. We believe
that the audit evidence we have obtained is suffic
ient and
appropriate to provide a basis for our opin
ion.
Independence
We are independent of the Group and the Company in
accordance with the ethical requirements that are relevant
to our audit of the financ
ial statements
in the UK, includ
ing
the FRC’s Ethical Standard as applied to listed public interest
entit
ies, and we have fulfilled our other eth
ical responsib
il
it
ies
in accordance with these requirements.
The non-audit services prohib
ited by the FRC’s Eth
ical
Standard were not provided to the Group or the Company
and we remain independent of the Group and the Company
in conducting the audit.
Conclusions relating to going concern
In audit
ing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting in
the preparation of the financ
ial statements
is appropriate.
Our evaluation of the directors’ assessment of the Group and
the Parent Company’s abil
ity to cont
inue to adopt the going
concern basis of accounting included:
•
performing a risk assessment to ident
ify factors that could
impact the going concern basis of accounting, includ
ing
considerat
ion of pr
inc
ipal and emerg
ing risks;
•
assessing management’s going concern assessment,
includ
ing the Group’s forecast cap
ital, liqu
id
ity and
leverage ratios over the period of twelve months from
21 February 2025, to evaluate the headroom against
min
imum regulatory requ
irements and the risk appetite
set by the directors;
•
engaging EY valuation and economic special
ists to assess
and challenge the reasonableness of assumptions used to
develop the forecasts in the Corporate Plan (5-year forward
looking plan of the business) and evaluating the accuracy of
histor
ical forecast
ing;
•
assessing the Group’s funding plan and repayment plan for
funding instruments maturing over the period of twelve
months from 21 February 2025;
•
understanding and evaluating credit rating agency ratings;
•
engaging EY prudential regulatory special
ists to assess
the results of management’s stress testing, includ
ing
considerat
ion of pr
inc
ipal and emerg
ing risks, on funding,
liqu
id
ity, and regulatory capital;
•
review
ing correspondence w
ith prudential regulators and
authorit
ies for matters that may
impact the going concern
assessment; and
•
evaluating the going concern disclosure included in note 1 to
the financial statements to assess that the d
isclosure was
appropriate and in conformity with the reporting standards.
Independent Auditor’s Report
to the members of Standard Chartered PLC
Financ
ial statements
Standard Chartered
– Annual Report 2024
277
Based on the work we have performed, we have not ident
ified
any material uncertaint
ies relat
ing to events or condit
ions
that, ind
iv
idually or collectively, may cast sign
ificant doubt
on the Group and the Parent Company’s abil
ity to cont
inue
as a going concern for a period of twelve months from
21 February 2025.
In relation to the Group and the Parent Company’s reporting
on how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw attention to in
relation to the directors’ statement in the financ
ial statements
about whether the directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsib
il
it
ies and the respons
ib
il
it
ies of the d
irectors
with respect to going concern are described in the relevant
sections of this report. However, because not all future
events or condit
ions can be pred
icted, this statement is
not a guarantee as to the Group’s abil
ity to cont
inue as a
going concern.
Overview of our audit approach
Audit scope | • | We performed an audit of the complete financ ial |
informat ion of 10 components in 8 countries | ||
and audit procedures on specif ic balances for | ||
a further 8 components in 7 countries. | ||
• | We performed central procedures for certain | |
audit areas and balances as outlined in Tailor ing | ||
the scope section of our report. | ||
Key audit | • Credit impa irment | |
matters | • | Basis of accounting and impa irment assessment |
of China Bohai Bank (interest in associate) | ||
• | Impairment of investments in subsid iary | |
undertakings | ||
• | Valuation of financ ial instruments held at fair | |
value with higher risk characterist ics. | ||
Material ity | • | Overall group material ity of $340m wh ich |
represents 5% of adjusted profit before tax. |
An overview of the scope of the parent company
and group audits
Tailor
ing the scope
In the current year our audit scoping has been updated to
reflect the new requirements of ISA (UK) 600 (Revised).
We have followed a risk-based approach when developing
our audit approach to obtain suffic
ient appropr
iate audit
evidence on which to base our audit opin
ion. We performed
risk assessment procedures, with input from our component
auditors, to ident
ify and assess r
isks of material misstatement
of the Group financial statements and
ident
ified s
ign
ificant
accounts and disclosures. When ident
ify
ing components at
which audit work needed to be performed to respond to
the ident
ified r
isks of material misstatement of the Group
financial statements, we cons
idered our understanding of the
Group and its business environment, the applicable financ
ial
framework, the Group’s system of internal control at the entity
level, the existence of centralised processes, IT applicat
ion
environment, and any relevant internal audit results.
We took a centralised approach to audit
ing certa
in processes
and controls, as well as the substantive testing of specif
ic
balances. This included audit work over the Group’s Global
Business Services shared services centre (SSC), Corporate
and Investment Banking (CIB) SSC, Credit Impairment SSC
and Technology.
We determined that centralised audit procedures can be
performed across certain components for the key audit
matters outlined later in this report, and for other audit areas,
includ
ing: Revenue recogn
it
ion; Management overr
ide of
controls; Technology costs; Impairment of goodwill; Going
concern and long-term viab
il
ity; Hedge accounting; Climate
risk; Share based payments; Taxation; Legal and regulatory
matters; Centralised reconcil
iat
ions; Onerous contracts,
includ
ing
impa
irment of leased propert
ies; IT matters; and
certain restructuring and transformation programmes.
In addit
ion to the above areas, for selected components
in Germany, Japan, South Africa, Iraq and Singapore, the
primary audit engagement team (the ‘Primary Audit Team’)
performed certain procedures centrally over the cash
balances as at 31 December 2024. These components
are separate to those described below.
We ident
ified 18 components
in 14 countries as ind
iv
idually
relevant to the Group due a sign
ificant r
isk or an area of higher
assessed risk of material misstatement of the group financ
ial
statements being associated with the components, or due to
financial s
ize of the component relative to the group.
For those ind
iv
idually relevant components, we ident
ified
the sign
ificant accounts where aud
it work needed to be
performed at these components by applying professional
judgement, having considered the group sign
ificant
accounts on which centralised procedures are performed,
the reasons for ident
ify
ing the financ
ial report
ing component
as an ind
iv
idually relevant component and the size of the
component’s account balance relative to the group sign
ificant
financial statement account balance.
We then considered whether the remain
ing group s
ign
ificant
account balances that are not subject to audit procedures, in
aggregate, could give rise to a risk of material misstatement
of the group financial statements.
Having ident
ified the components for wh
ich work will
be performed, we determined the scope to assign to
each component.
Of the 18 components selected, we designed and performed
audit procedures on the entire financ
ial
informat
ion of
10 components (“full scope components”). For 5 components,
we designed and performed audit procedures on specif
ic
sign
ificant financial statement account balances or
disclosures of the financ
ial
informat
ion of the component
(“specif
ic scope components”). For the rema
in
ing 3
components, we performed specif
ied aud
it procedures to
obtain evidence for one or more relevant assertions.
Group`s Absolute PBT | Group Total Assets | Group`s Absolute Operating Income | ||||
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
Full Scope | 64% | 62% | 87% | 87% | 72% | 72% |
Specif ic Scope | 10% | 15% | 5% | 7% | 9% | 14% |
Specif ied Procedures | 2% | 1% | 0.30% | 0.10% | 2% | 1% |
Total | 76% | 78% | 92% | 94% | 83% | 87% |
Of the remain
ing components that together represent
24 per cent of the Group’s absolute PBT, none are ind
iv
idually
greater than 1.9 per cent. For certain of these components,
we performed other procedures at the Group level which
included: performing analytical reviews at the Group financ
ial
statement level, evaluating entity level controls, performing
audit procedures on the centralised shared service centres,
testing of consolidat
ion journals and
intercompany
elim
inat
ions, inqu
ir
ing with certain overseas EY teams on the
outcome of prior year local statutory audits (where audited
by EY) to ident
ify any potent
ial risks of material misstatement
to the Group financial statements. We also had regard
for the extent of centralised procedures in respect of key
audit matters.
278
Standard Chartered
– Annual Report 2024
Financ
ial statements
Independent auditor’s report
Involvement with component teams
In establish
ing our overall approach to the Group aud
it, we
determined the type of work that needed to be undertaken
at each of the components by us, as the Primary Audit Team
or by component auditors from other firms operating under
our instruct
ion. All of the d
irect components of the Group (full,
specif
ic or spec
if
ied procedures) were aud
ited by EY global
network firms. There was one non-EY component team
audit
ing a s
ingle component in a single location, which was
instructed by a direct component of the Group.
Audit procedures were performed on 3 full scope components
(includ
ing the aud
it of the Company) directly by the Primary
Audit Team (EY London) in the United Kingdom. Where
components were audited by the Primary Audit Team, this
was under the direct
ion and superv
is
ion of the Sen
ior
Statutory Auditor. For the remain
ing 15 components, where
the work was performed by component auditors, we
determined the appropriate level of involvement to enable
us to determine that suffic
ient aud
it evidence had been
obtained as a basis for our opin
ion on the Group as a whole.
In addit
ion to the above, the Pr
imary Audit Team also
performed full-scope audit procedures on components
related to the Group consolidat
ion process.
In addit
ion, the Group has central
ised processes and controls
over key areas in its shared service centres. Members of the
Primary Audit Team undertook direct oversight, review and
coordinat
ion of our shared serv
ice centre audits. The Primary
Audit Team continued to follow a programme of planned
vis
its to component teams and shared serv
ice centres.
During the current year’s audit cycle, vis
its were undertaken
by the Primary Audit Team to the component teams in the
following locations:
• Hong Kong
•
India (includ
ing the shared serv
ices centre)
• Mainland China
•
Malaysia (includ
ing the shared serv
ices centre)
• Pakistan
• Republic of Korea
•
Singapore (includ
ing the shared serv
ices centre)
• United Arab Emirates
•
United States of America
These vis
its
involved discuss
ing the aud
it approach with the
component team and any issues aris
ing from the
ir work,
meeting with local management, attending planning and
closing meetings, and review
ing relevant aud
it working
papers on risk areas. In addit
ion to the s
ite vis
its, the Pr
imary
Audit Team interacted regularly with the component and SSC
audit teams where appropriate during various stages of the
audit, reviewed relevant working papers and deliverables to
the Primary Audit Team, and were responsible for the scope
and direct
ion of the aud
it process.
The Primary Audit Team also undertook video conference
meetings with component and SSC audit teams and
management. These virtual meetings involved discuss
ing
the audit approach and any issues aris
ing from the
ir work,
as well as performing remote reviews of key audit workpapers.
This, together with the procedures performed at Group level,
gave us appropriate evidence for our opin
ion on the Group
and Company financial statements.
Climate change
Stakeholders are increas
ingly
interested in how climate
change will impact the economy, includ
ing the bank
ing sector,
and further how this may consequently impact the valuation
of assets and liab
il
it
ies held on bank balance sheets. The
Group manages climate risk according to the characterist
ics
of the impacted risk types and is embedding climate-risk
considerat
ions
into relevant frameworks, includ
ing pr
inc
ipal
risk type frameworks, and processes. The assessment of
that risk by the Group is explained on pages 256 to 257 in the
‘Risk Review and Capital Review’ section, and on pages 57
to 102 in the ‘Sustainab
il
ity review’ section of the Annual
Report, where management has also explained their
climate commitments.
All of these disclosures form part of the ‘Other informat
ion’,
rather than the audited financ
ial statements. Our procedures
on these unaudited disclosures therefore consisted solely of
consider
ing whether they are mater
ially incons
istent w
ith the
financial statements or our knowledge obta
ined in the course
of the audit or otherwise appear to be materially misstated,
in line with our responsib
il
it
ies on ‘Other
informat
ion’.
In planning and performing our audit we assessed the
potential impacts of climate change on the Group’s
business and any consequential material impact on its
financial statements.
The Group has explained in the ‘Sustainab
il
ity review’ section
of the Annual Report how they have reflected the impact of
climate change in their financ
ial statements,
includ
ing how
this aligns with their commitment to the aspirat
ions of the
Paris Agreement to achieve net zero emiss
ions by 2050.
Sign
ificant judgements and est
imates relating to climate
change are included in the section ‘Climate change impact
on the Group’s balance sheet’ of note 1 to the financial
statements. As stated in these disclosures, the Group
has considered climate change to be an area which can
impact accounting estimates and judgements through
the uncertainty of future events and the impact of that
uncertainty on the Group’s assets and liab
il
it
ies.
Our audit effort in consider
ing the
impact of climate change
on the financial statements was focused on evaluat
ing
whether management’s assessment of the impact of climate
risk has been appropriately reflected in the valuation of
assets and liab
il
it
ies, where mater
ial and where it can be
reliably measured, following the currently effective
requirements of UK IAS and EU IFRS. This was in the context
of the Group’s process being lim
ited, g
iven that this is a highly
evolving area, as a result of lim
itat
ions in the data available
and the nascent modelling capabil
it
ies, and as the Group
considers how it further embeds its climate ambit
ions
into
the planning process.
As part of this evaluation, we performed our own risk
assessment, supported by our climate change special
ists,
to determine the risks of material misstatement in the
financial statements from cl
imate change which needed
to be considered in our audit.
We also challenged the Directors’ considerat
ions of cl
imate
change risks in their assessment of going concern and
viab
il
ity, and the associated disclosures. Where considerat
ions
of climate change were relevant to our assessment of going
concern, these are described above.
Based on our work, we have considered the impact of climate
change on the financial statements to
impact certain key
audit matters. Details of our procedures and find
ings are
included in our explanation of key audit matters below.
279
Standard Chartered
– Annual Report 2024
Financ
ial statements
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most sign
ificance
in our audit of the financ
ial
statements of the current period and include the most sign
ificant assessed r
isks of material misstatement (whether or not due
to fraud) that we ident
ified. These matters
included those which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and direct
ing the efforts of the engagement team. These matters were addressed
in the
context of our audit of the financ
ial statements as a whole, and
in our opin
ion thereon, and we do not prov
ide a separate
opin
ion on these matters.
Risk
Our response to the risk
Credit Impairment
Refer to the Audit Committee Report (page 124); Note 8 of
the financial statements; and relevant cred
it risk disclosures
(includ
ing pages 207 to 246)
At 31 December 2024, the Group reported total credit
impa
irment balance sheet prov
is
ion of $5,267 m
ill
ion (2023:
$5,601 mill
ion).
Management’s judgements and estimates are highly subject
ive
as a result of the sign
ificant uncerta
inty associated with the
estimat
ion of expected future cred
it losses. Assumptions
with increased complexity in respect of the tim
ing and
measurement of expected credit losses (ECL) include:
•
Staging
– the determinat
ion of what const
itutes sign
ificant
increase in credit risk and consequent timely allocation of
qualify
ing assets to the appropr
iate stage in accordance
with IFRS 9;
•
Model output and adjustments
– Accounting interpretat
ions,
modelling assumptions and data used to develop, monitor
and run the models that calculate the ECL, includ
ing the
appropriateness, completeness and valuation of post-model
adjustments applied to model output to address ident
ified
model deficienc
ies or risks not fully captured by the models;
•
Economic scenarios
– Sign
ificant judgements
involved in the
determinat
ion of the appropr
iateness of economic variables,
the future forecasting of these variables and the parameters
used in both the base case forecast and the Monte Carlo
Simulat
ion. The assessment of non-l
inear
ity produced by the
Monte Carlo simulat
ion, the benchmark
ing of the output to
backstop discrete scenarios and the evaluation of the need
for any Post Model adjustments;
•
Management overlays
– Appropriateness, completeness
and valuation of risk event overlays to capture risks not
ident
ified by the cred
it impa
irment models,
includ
ing the
considerat
ion of the r
isk of management override; and
•
Indiv
idually assessed ECL allowances
– Measurement of
ind
iv
idual provis
ions
includ
ing the assessment of probab
il
ity
weighted recovery scenarios, exit strategies, collateral
valuations, expected future cashflows and the tim
ing of
these cashflows.
In 2024, the most material factors impact
ing the ECL were
in
relation to the Commercial Real Estate portfolio in Mainland
China and Hong Kong, geopolit
ical uncerta
inty and the
continu
ing
impact of higher interest rates and inflat
ion.
In addit
ion, we have cons
idered the impact of climate on
the impa
irment prov
is
ions.
Overall, in line with the prior year the level of judgement and
estimat
ion rema
ins elevated as a result of the factors above
and consequently the risk of a material misstatement to the
ECL remained consistent with that of the prior year.
We evaluated the design of controls relevant to the Group’s systems
and processes over material ECL balances, involv
ing EY spec
ial
ists
to assist us in performing our procedures where relevant. Based on
our evaluation we selected the controls upon which we intended to
rely and tested those for operating effectiveness.
We performed an overall stand-back assessment of the ECL
allowance in total and by stage to determine if the ECL was
reasonable. We considered the overall credit quality of the Group’s
portfolios, risk profile, the impact of sovereign risk, challenges facing
the Commercial Real Estate sector in Mainland China and Hong
Kong and the impact of higher interest rates for longer in certain
markets. We performed peer benchmarking to the extent that this
was considered relevant and invest
igated and sought explanat
ions
for any areas ident
ified as be
ing outliers. Our assessment also
included the evaluation of the macroeconomic environment by
consider
ing trends
in the economies and countries to which the
Group is exposed.
Staging
– We evaluated the criter
ia used to determ
ine sign
ificant
increase in credit risk includ
ing quant
itat
ive backstops w
ith
the resultant allocation of financ
ial assets to stage 1, 2 or 3
in
accordance with IFRS 9. We reperformed the staging distr
ibut
ion
for a sample of financial assets and assessed the reasonableness
of staging downgrades applied by management. We assessed
the appropriateness of changes to the staging criter
ia.
To test the completeness of the ident
ification of s
ign
ificant
increase
in credit risk, we challenged the credit risk ratings (includ
ing
appropriate operation of quantitat
ive backstops) for a sample
of performing accounts and other accounts exhib
it
ing risk
characterist
ics such as financial d
iff
iculty, deferment of payment,
late payment and heightened risk accounts appearing on
the watchlist.
Modelled output and adjustments
– With the support of our EY
credit risk modelling special
ists, we performed a r
isk assessment on
models involved in the ECL calculation using EY independently
determined quantitat
ive and qual
itat
ive cr
iter
ia and used th
is risk
rating as a basis to select a sample of models to test. Based on this
risk assessment, we evaluated a sample of ECL models by assessing
the reasonableness of underpinn
ing assumpt
ions, inputs and
formulae used. This included a combinat
ion of assess
ing the
appropriateness of model design, model implementat
ion and
validat
ion, sens
it
iv
ity testing and recalculating the Probabil
ity of
Default, Loss Given Default and Exposure at Default parameters.
Together with our modelling special
ists, we also assessed mater
ial
post-model adjustments that were applied as a response to risks
not fully captured by the models or for known model deficienc
ies.
This included the completeness and appropriateness of these
adjustments.
We did not rely on controls over model monitor
ing and therefore
adopted a substantive approach compris
ing reperformance of
model monitor
ing procedures for models class
if
ied as s
ign
ificant or
higher risk in accordance with our EY independent risk assessment.
In response to the Bank’s model simpl
ification program that resulted
in a number of low risk or immater
ial models mov
ing to a loss rate
approach, we challenged whether there was a need for an overlay
as result of the models no longer includ
ing a forward look
ing
element as required by IFRS 9.
To evaluate data quality, we performed sample testing over the
completeness and accuracy of key data elements assessed to be
material to the modelled ECL output, back to source evidence.
Financ
ial statements
Independent auditor’s report
280
Standard Chartered
– Annual Report 2024
Risk
Our response to the risk
Credit Impairment
continued
Economic scenarios
– In collaboration with our economists, we
challenged the completeness and appropriateness of the
macroeconomic variables used as inputs to the ECL models.
Addit
ionally, we
involved our economic special
ists to ass
ist us in
evaluating the reasonableness of the base forecast for a sample
of macroeconomic variables most relevant for the Group’s ECL
calculation. Procedures performed included benchmarking the
forecast for a sample of macroeconomic variables to peers,
histor
ical data and a var
iety of global external sources. We assessed
the output for a sample of economic variables across different
markets from the Monte Carlo simulat
ion for reasonableness. We
reviewed and challenged the appropriateness of the underlying
coding, assumptions, and output of the Monte Carlo simulat
ion.
We assessed the reasonableness of the non-linear
ity
impact on ECL
allowances. We engaged our economists, to assess and challenge
the Group’s choice of discrete scenarios to benchmark the output
from the Monte Carlo model and determine the sensit
iv
ity analysis
as set out on pages 242 and 243 in the annual report. This challenge
included the choice of narrative scenarios and the weights applied
to each scenario. We also performed a stand-back assessment
by benchmarking the uplift and overall ECL charge and provis
ion
coverage to peers.
Management overlays
– We challenged the completeness and
appropriateness of overlays used for risks not captured by the
models. We focussed our challenge on Commercial Real Estate in
Mainland China and Hong Kong, the increas
ing levels of uncerta
inty
in the outlook for Bangladesh given the polit
ical s
ituat
ion and the
introduct
ion of a new overlay relat
ing to Bank’s exposure to clients
trading on two failed e-commerce platforms in South Korea. Our
procedures included assessing the need for management overlays,
evaluating the assumptions and judgments used to determine
the overlays taking current market condit
ions
into account, and
computing independent ranges where appropriate.
In addit
ion, w
ith the support from our climate risk modelling
special
ists we evaluated the
in
it
ial ECL produced by management’s
models and assessed the appropriateness of the adjustments to the
model output to determine the overall climate overlay.
Indiv
idually assessed ECL allowances
– We selected a sample of
ind
iv
idually assessed provis
ions to recalculate. Our recalculat
ion
procedures included challenging management’s forward looking
economic assumptions of the recovery outcomes ident
ified,
cashflow profiles and tim
ings and the
ind
iv
idual probabil
ity
weight
ings used for each scenar
io.
We also engaged our valuation special
ists to test the value of the
collateral used in management’s calculations on a sample basis.
Key observations communicated to the Audit Committee
We communicated that we are satisf
ied the Bank’s ECL prov
is
ions were reasonably est
imated and materially in compliance with
IFRS 9. We highl
ighted the follow
ing matters to the Audit Committee that contributed to our overall conclusion:
•
Our evaluation of the appropriateness of the sign
ificant
increase in credit risk triggers, and the results of our staging reperformance.
•
For ind
iv
idually assessed ECL allowances, the overall reasonableness of the provis
ions,
includ
ing assumpt
ions applied, with a focus
on exposures on Commercial Real Estate in Mainland China and Hong Kong.
•
Our assessment of the appropriateness of post model adjustments and overlays, includ
ing overlays relat
ing to Commercial Real
Estate in Mainland China and Hong Kong, and non-linear
ity.
•
Our assessment of the appropriateness of the Group’s models to generate the ECL and staging outcomes includ
ing the
appropriateness and valid
ity of the data used
in the models and to generate the staging and consequent ECL.
•
Our assessment of the appropriateness of the Group’s climate models to compute the impact of climate related risks on the
portfolio, noting the judgmental nature of the output and that these first generation models are expected to evolve sign
ificantly
over time.
We also highl
ighted to the Comm
ittee that there remains increased uncertainty and volatil
ity
in determin
ing expected cred
it losses
due to the elevated risks in the macroeconomic and geopolit
ical landscape.
How we scoped our audit to respond to the risk and involvement with component teams
For the purposes of determin
ing the scope of work to be conducted centrally and by component teams, we cons
idered the following:
•
The Bank’s material IFRS 9 systems and processes, includ
ing modelled ECL, and where those systems and process were located
•
The Groups gross exposure and ECL by jurisd
ict
ion
•
The Bank’s and EY’s independent sovereign risk assessment
•
Jurisd
ict
ion of orig
in for
ind
iv
idual stage 3 exposures
Based on this assessment, we determined that credit related procedures were required to be performed centrally and by 9 full scope,
5 specif
ic scope and 2 spec
if
ied scope locat
ions.
The Group audit team`s involvement with the component teams and procedures performed are detailed in the “Involvement with
component teams” section of our report.
Financ
ial statements
Standard Chartered
– Annual Report 2024
281
Risk
Our response to the risk
Basis of accounting and impa
irment
assessment of China Bohai Bank (Interest
in Associate)
Refer to the Audit Committee Report (page 124); Accounting
polic
ies (page 361); and Note 32 of the financial statements
•
Interest in Associate – China Bohai Bank $738 mill
ion (2023:
$700 mill
ion).
•
Other impa
irment – Ch
ina Bohai Bank – NIL (2023:
$850 mill
ion).
•
Cumulative impa
irment: $1,459 m
ill
ion (2023: $1,459 m
ill
ion).
At 31 December 2024, the Group’s share of China Bohai Bank’s
market capital
isat
ion was $400m lower than the carrying value
of $738m.
We focused on judgements and estimates, includ
ing the
appropriateness of the equity accounting treatment under
IAS 28 and the assessment of whether the investment
was impa
ired.
Basis of accounting
The Group holds a 16.26 per cent stake in China Bohai Bank and
equity accounts for the investment as an associate, on the
grounds that the Group is able to exercise sign
ificant
influence
over China Bohai Bank.
IAS 28 states that if the entity holds, directly or ind
irectly, less
than 20 per cent of the voting power of the investee, it is
presumed that the entity does not have sign
ificant
influence,
unless such influence can be clearly demonstrated.
There is a risk that the equity accounting treatment may not
be appropriate, if the Group cannot demonstrate that it exerts
sign
ificant
influence over China Bohai Bank.
The risk in respect of sign
ificant
influence has not changed
compared to the prior year.
Impairment testing
At 31 December 2024, China Bohai Bank’s market capital
isat
ion
was sign
ificantly lower than the carry
ing value of the
investment. In addit
ion, the financial performance of Ch
ina
Bohai Bank deteriorated during 2024 and China Bohai Bank
did not pay a div
idend for a second year.
These matters are ind
icators of
impa
irment.
Impairment of the investment in China Bohai Bank is
determined by comparing the carrying value to the higher of
value in use (VIU) and fair value less costs to sell. The VIU is
modelled by reference to future cashflow forecasts (forecast
profit, includ
ing a ha
ircut for regulatory capital), exit multiples,
discount rate and macroeconomic assumptions such as
forward market interest rate curves. The assumptions
underpinn
ing management’s assessment of the VIU are
subject to estimat
ion uncerta
inty and consequently, there is a
risk that if the judgements and assumptions are inappropr
iate,
the investment in China Bohai Bank may be misstated.
We obtained an understanding of management’s process and
evaluated the design of controls. Our audit strategy was fully
substantive.
Basis of accounting
We evaluated the evidence that the Group presented to
demonstrate that it exercises sign
ificant
influence over China
Bohai Bank, through Board representation, membership of
Board Committees and sharing of technical advice.
We observed certain meetings alongside Group management and
China Bohai Bank management to ident
ify facts and c
ircumstances
impact
ing the assessment of s
ign
ificant
influence exercised by
the Group.
Impairment testing
We assessed the appropriateness of the Group’s VIU methodology
for compliance with the accounting standards. We tested the
mathematical accuracy of the VIU model and engaged our
valuation and modelling special
ists to support the aud
it team in
calculating an independent range for the VIU.
We performed audit procedures to assess the reasonableness of
the Group’s forecast of the future cashflows relating to Bohai, and
other key assumptions with regard to the relevance and reliab
il
ity
of data inputs.
We performed a stand-back assessment to determine whether
the carrying value of the Group’s investment in China Bohai Bank
was reasonable. We considered the macroeconomic environment
in China, ratings agency reports and public disclosures by Bohai.
We benchmarked the forecasts to reputable broker reports
published for comparable companies.
We assessed the appropriateness of disclosures in the annual
report in relation to China Bohai Bank, includ
ing the
impact of
reasonably possible changes in key assumptions on the carrying
value of the investment.
Key observations communicated to the Audit Committee
On the basis of the evidence, we concluded that the Group continues to mainta
in s
ign
ificant
influence over China Bohai Bank as at
31 December 2024.We highl
ighted our assessment of the
impa
irment methodology,
its consistency year-on-year and our view on
sign
ificant assumpt
ions to the VIU.
We concluded that the Interest in Associate – China Bohai Bank balance and the associated financ
ial statement d
isclosures were not
materially misstated as at 31 December 2024.
How we scoped our audit to respond to the risk and involvement with component teams
We performed centralised audit procedures over the risk, with the support of the EY Hong Kong and non-EY Component team in
performing certain procedures to address the risk.
The Group audit team`s involvement with the component teams and procedures performed are detailed in the Involvement with
component audit teams’ section of our report.
282
Standard Chartered
– Annual Report 2024
Financ
ial statements
Independent auditor’s report
Risk
Our response to the risk
Impairment assessment of investments in
subsid
iary undertak
ings
Impairment of investments in subsid
iary undertak
ings:
Accounting polic
ies (page 361); and Note 32 of the financial
statements. Refer to the Audit Committee Report (page 124).
In the Parent Company financial statements as at 31 December
2024, the investment in subsid
iary undertak
ings balance was
$61,593 mill
ion (2023: $60,791 m
ill
ion).
On an annual basis, management is required to perform an
impa
irment assessment for
ind
icators of
impa
irment
in respect
of investments in subsid
iary undertak
ings. Where ind
icators of
impa
irment are
ident
ified, the recoverable amount of the
investment should be estimated.
The Group ident
ified
ind
icators of
impa
irment of
investments
in subsid
iary undertak
ings, includ
ing macroeconom
ic and
geopolit
ical factors wh
ich have an impact on the financ
ial
posit
ion and performance of the subs
id
iar
ies.
In assessing for ind
icators of
impa
irment, among other
procedures, management compares the Net Asset Value
(‘NAV’) of the subsid
iary to the carry
ing value of each direct
subsid
iary of the Parent Company. Where the net assets do
not support the carrying value, the recoverable amount is
estimated by determin
ing the h
igher of VIU or fair value less
cost to sell.
Where the recoverable amount is based on the VIU, this is
modelled by reference to future cashflow forecasts (profit
forecast includ
ing a regulatory cap
ital haircut adjustment),
discount rates and macroeconomic assumptions such as
long-term growth rates.
There is a risk that if the judgements and assumptions
underpinn
ing the
impa
irment assessments are
inappropr
iate,
then the investments in subsid
iar
ies balances may be
misstated.
The level of risk remains consistent with the prior year.
We obtained an understanding of management’s process and
evaluated the design of controls. Our audit strategy was
fully substantive.
We assessed the appropriateness of the Group’s methodology for
testing the impa
irment of
investments in subsid
iary undertak
ings
for compliance with accounting standards.
We agreed the NAV of the subsid
iar
ies to their carrying value to
confirm impa
irment or reversal of
impa
irment recogn
ised in the
Parent`s Company financial results.
We agreed the inputs in the VIU model to their source and tested
the mathematical accuracy of the VIU model. We engaged EY
special
ists to support the aud
it team in assessing reasonableness of
the regulatory haircut adjustment to future profitab
il
ity forecasts
and calculating an independent range for assumptions underlying
the VIU calculations, such as the discount rate and long-term
growth rate.
We also reconciled the future profitab
il
ity forecasts of each
subsid
iary to the Group’s approved Corporate Plan (‘the Plan’).
We engaged our special
ist team to determ
ine the reasonableness
of the forward macroeconomic inputs used in the Plan.
We assessed the appropriateness of disclosures for impa
irment of
investments in subsid
iary undertak
ings in accordance with IAS 36.
Key observations communicated to the Audit Committee
Investments in subsid
iary undertak
ings balance reported in the Parent Company financ
ial statements and the assoc
iated disclosures,
are not materially misstated as at 31 December 2024.
How we scoped our audit to respond to the risk and involvement with component teams
All audit work performed to address this risk was materially undertaken centrally by the Group audit team.
283
Standard Chartered
– Annual Report 2024
Financ
ial statements
Risk
Our response to the risk
Valuation of financ
ial
instruments held at fair
value with higher risk characterist
ics
Refer to the Audit Committee Report (page 124); Accounting
polic
ies (page 295); and Note 13 of the financial statements.
At 31 December 2024, the Group reported financial assets
measured at fair value of $348,408 mill
ion (2023: $301,976
mill
ion), and financial l
iab
il
it
ies at fa
ir value of $167,526 mill
ion
(2023: $139,157 mill
ion), of wh
ich financ
ial assets of $8,053 m
ill
ion
(2023: $6,714 mill
ion) and financial l
iab
il
it
ies of $4,937 m
ill
ion
(2023: $2,960 mill
ion) are class
if
ied as Level 3
in the fair value
hierarchy.
The fair value of financ
ial
instruments with higher risk
characterist
ics
involves the use of management judgement in
the selection of valuation models and techniques, pric
ing
inputs
and assumptions and fair value adjustments.
A higher level of estimat
ion uncerta
inty is involved for financ
ial
instruments valued using complex models; pric
ing
inputs that
have lim
ited observab
il
ity; and fa
ir value adjustments, includ
ing
Credit Valuation Adjustments for ill
iqu
id counterparties.
We considered the following portfolios presented a higher level
of estimat
ion uncerta
inty:
•
Derivat
ives: Level 3 and certa
in Level 2 derivat
ives (
includ
ing
those embedded with
in customer accounts, debt secur
it
ies
in issue, and deposits by banks) whose valuation involves the
use of complex models; and
•
Other Level 3 financial
instruments: equity shares, loans and
advances to customers, reverse repurchase agreements and
other sim
ilar secured lend
ing, and debt securit
ies and other
elig
ible b
ills with unobservable pric
ing
inputs.
The level of risk remains consistent with the prior year.
We evaluated the design and operating effectiveness of controls
relating to the valuation of financ
ial
instruments, includ
ing
Independent Price Verif
icat
ion (IPV), model validat
ion, fa
ir value
adjustments, and sign
ificant deal rev
iew.
Among other procedures, we engaged our valuation special
ists
to assist the audit team in performing the following testing on a
risk-assessed sample basis:
•
Test valuations dependent on complex models by independently
revaluing Level 3 and certain Level 2 derivat
ive financial
instruments (includ
ing those embedded w
ith
in customer
accounts, debt securit
ies
in issue, and deposits by banks) to assess
the appropriateness of models and the adequacy of assumptions
and inputs used by the Group;
•
Test valuations of other Level 3 financ
ial
instruments with higher
estimat
ion uncerta
inty, such as equity shares, loans and advances
to customers, reverse repurchase agreements and other sim
ilar
secured lending, and debt securit
ies and other el
ig
ible b
ills.
Where appropriate, we compared management’s valuation to
our own independently developed range;
•
Assessed the appropriateness of pric
ing
inputs as part of the
IPV process; and
•
Compared the methodology used for fair value adjustments to
current market practice. We revalued a sample of valuation
adjustments, compared market inputs to third party data, and
challenged the basis for determin
ing
ill
iqu
id credit spreads.
Where differences between our independent valuation and
management’s valuation were outside our thresholds, we
performed addit
ional test
ing to assess the impact on the valuation
of financial
instruments.
Throughout our audit procedures we considered the continu
ing
uncertainty aris
ing from the current macroeconom
ic environment.
In addit
ion, we assessed whether there were any
ind
icators of
aggregate bias in financ
ial
instrument marking and methodology
assumptions.
Key observations communicated to the Audit Committee
We concluded that assumptions used by management to estimate the fair value of financ
ial
instruments with higher risk
characterist
ics, and the recogn
it
ion of related
income, were reasonable. We highl
ighted the follow
ing matters to the
Audit Committee:
•
We did not ident
ify mater
ial differences aris
ing from our
independent testing of valuations dependent on complex models;
•
The fair values of other Level 3 financ
ial
instruments, valued using pric
ing
inputs with lim
ited observab
il
ity, were not mater
ially
misstated as at 31 December 2024, based on our independent calculations; and
•
Valuation adjustments, includ
ing Cred
it Valuation Adjustments for ill
iqu
id counterparties, were appropriate, based on our analysis
of market data and benchmarking of pric
ing
informat
ion.
How we scoped our audit to respond to the risk and involvement with component teams
We performed centralised audit procedures over this risk. These procedures were performed by the Primary Team and CIB SSC,
covering 99.1 per cent of the risk amount.
In the prior year, our auditor’s report included key audit matters in relation to priv
ileged access management and the valuat
ion
of goodwill. In the current year, following the implementat
ion of management’s remed
iat
ion programme, the r
isk relating to
priv
ileged access, has reduced below the threshold for be
ing a key audit matter. Also, due to a reduction of the risk of material
impa
irment of goodw
ill, we no longer consider it a key audit matter.
284
Standard Chartered
– Annual Report 2024
Financ
ial statements
Independent auditor’s report
Our applicat
ion of mater
ial
ity
We apply the concept of material
ity
in planning and
performing the audit, in evaluating the effect of ident
ified
misstatements on the audit and in forming our audit opin
ion.
Material
ity
The magnitude of an omiss
ion or m
isstatement that,
ind
iv
idually or in the aggregate, could reasonably be
expected to influence the economic decis
ions of the users of
the financial statements. Mater
ial
ity prov
ides a basis for
determin
ing the nature and extent of our aud
it procedures.
We determined material
ity for the Group to be $340 m
ill
ion
(2023: $274 mill
ion), wh
ich is 5 per cent (2023: 5 per cent) of
adjusted profit before tax. This reflects statutory profit before
tax adjusted for certain non-recurring items. We believe
that adjusted profit before tax provides us with the most
appropriate and relevant measure for the users of the
financial statements, g
iven the Group is profit-making, it is
consistent with the wider industry, and it is the standard for
listed and regulated entit
ies. Th
is increase from prior year
is driven by an increase in our material
ity bas
is of adjusted
profit before tax and is reflected in all material
ity thresholds
discussed below.
We determined material
ity for the Parent Company to be
$306 mill
ion (2023: $247 m
ill
ion), wh
ich represents 90 per cent
of Group material
ity (2023: 90 per cent) and equates to
0.6 per cent (2023: 0.5 per cent) of the equity of the Parent
company. We believe that equity provides us with the most
appropriate measure for the users of the Parent Company’s
financial statements, g
iven that the Parent Company is
primar
ily a hold
ing company.
Material
ity
Adjustments
Starting
basis
•
Reported profit before tax – $6,014m
• Non-recurring items: $793m
•
Adjusted profit before tax – $6,807m
•
Material
ity of $340m (5% of
adjusted profit before tax)
During the course of our audit, we reassessed in
it
ial
material
ity. Th
is assessment resulted in a higher final
material
ity calculated based on the actual financial
performance of the Group for the year.
Performance material
ity
The applicat
ion of mater
ial
ity at the
ind
iv
idual account
or balance level. It is set at an amount to reduce to an
appropriately low level the probabil
ity that the aggregate
of uncorrected and undetected misstatements exceeds
material
ity.
On the basis of our risk assessments, together with our
assessment of the Group’s overall control environment, our
judgement was that performance material
ity was 50 per cent
(2023: 50 per cent) of our planning material
ity, namely $170m
(2023: $137m). We have set performance material
ity at th
is
percentage due to a variety of risk factors, such as the
expectation of misstatements, internal control environment
considerat
ions, and other factors such as the global
complexity of the Group.
Audit work was undertaken at component locations for the
purpose of responding to the assessed risks of material
misstatement of the group financ
ial statements. The
performance material
ity set for each component
is based
on the relative scale and risk of the component to the Group
as a whole and our assessment of the risk of misstatement
at that component. In the current year, the range of
performance material
ity allocated to components was
$16m to $46m (2023: $11.4m to $26.2m).
Reporting threshold
An amount below which ident
ified m
isstatements are
considered as being clearly triv
ial.
We agreed with the Audit Committee that we would report
to them all uncorrected audit differences in excess of $17m
(2023: $14m), which is set at 5 per cent of planning material
ity,
as well as differences below that threshold that, in our view,
warranted reporting on qualitat
ive grounds.
We evaluate any uncorrected misstatements against both
the quantitat
ive measures of mater
ial
ity d
iscussed above and
in light of other relevant qualitat
ive cons
iderat
ions
in forming
our opin
ion.
Other informat
ion
The other informat
ion compr
ises the informat
ion
included
in the Annual Report set out on pages 1 to 406, includ
ing
the Strategic report (pages 1 to 46), the Financ
ial Rev
iew
(pages 47 to 56), the Sustainab
il
ity Review (pages 57 to 102),
the Directors’ report (pages 103 to 191), the Statement of
directors’ responsib
il
it
ies (page 192) and the
informat
ion
not marked as ‘audited’ in the Risk review and Capital
review section (pages 193 to 274), and the Supplementary
informat
ion (pages 381 to 406), other than the financial
statements and our auditor’s report thereon. The directors
are responsible for the other informat
ion conta
ined with
in
the annual report.
Our opin
ion on the financial statements does not cover
the other informat
ion and, except to the extent otherw
ise
explic
itly stated
in this report, we do not express any form
of assurance conclusion thereon.
Our responsib
il
ity is to read the other informat
ion and,
in
doing so, consider whether the other informat
ion
is materially
incons
istent w
ith the financ
ial statements or our knowledge
obtained in the course of the audit, or otherwise appears
to be materially misstated. If we ident
ify such mater
ial
incons
istenc
ies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financ
ial statements themselves. If, based
on the work we have performed, we conclude that there is a
material misstatement of the other informat
ion, we are
required to report that fact.
We have nothing to report in this regard.
285
Standard Chartered
– Annual Report 2024
Financ
ial statements
Opin
ions on other matters prescr
ibed by the
Companies Act 2006
In our opin
ion, the part of the d
irectors’ remuneration report to
be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opin
ion, based on the work undertaken
in the course of
the audit:
•
the informat
ion g
iven in the strategic report and the
directors’ report for the financ
ial year for wh
ich the financ
ial
statements are prepared is consistent with the financ
ial
statements; and
•
the strategic report and the directors’ report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by
exception
In the light of the knowledge and understanding of the Group
and the Parent Company and its environment obtained in
the course of the audit, we have not ident
ified mater
ial
misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters
in relation to which the Companies Act 2006 requires us to
report to you if, in our opin
ion:
•
adequate accounting records have not been kept by the
Parent Company, or returns adequate for our audit have not
been received from branches not vis
ited by us; or
•
the Parent Company financial statements and the part of
the Directors’ Remuneration Report to be audited are not
in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specif
ied by
law are not made; or
•
we have not received all the informat
ion and explanat
ions
we require for our audit.
Corporate Governance Statement
We have reviewed the directors’ statement in relation to
going concern, longer-term viab
il
ity and that part of the
Corporate Governance Statement relating to the group
and company’s compliance with the provis
ions of the UK
Corporate Governance Code specif
ied for our rev
iew by the
UK List
ing Rules.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent
with the financ
ial statements or our knowledge obta
ined
during the audit:
•
Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any
material uncertaint
ies
ident
ified set out on page 297;
•
Directors’ explanation as to its assessment of the
Company’s prospects, the period this assessment covers
and why the period is appropriate set out on pages 45 to 46;
•
Director’s statement on whether it has a reasonable
expectation that the Group will be able to continue in
operation and meets its liab
il
it
ies set out on page 46;
•
Directors’ statement on fair, balanced and understandable
set out on page 192;
•
Board’s confirmation that
it has carried out a robust
assessment of the emerging and princ
ipal r
isks set out on
page 187;
•
The section of the annual report that describes the review
of effectiveness of risk management and internal control
systems set out on pages 187 to 188; and
•
The section describ
ing the work of the aud
it committee set
out on pages 123 to 128.
Responsib
il
it
ies of d
irectors
As explained more fully in the directors’ responsib
il
it
ies
statement set out on page 192, the directors are responsible
for the preparation of the financ
ial statements and for be
ing
satisf
ied that they g
ive a true and fair view, and for such
internal control as the directors determine is necessary to
enable the preparation of financ
ial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financ
ial statements, the d
irectors are
responsible for assessing the Group and Parent Company’s
abil
ity to cont
inue as a going concern, disclos
ing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either
intend to liqu
idate the Group or the Parent Company or to
cease operations, or have no realist
ic alternat
ive but to do so.
Auditor’s responsib
il
it
ies for the aud
it of the
financial statements
Our objectives are to obta
in reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opin
ion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and
are considered material if, ind
iv
idually or in the aggregate,
they could reasonably be expected to influence the
economic decis
ions of users taken on the bas
is of these
financial statements.
Explanation as to what extent the audit was considered
capable of detecting irregular
it
ies, includ
ing fraud
Irregularit
ies,
includ
ing fraud, are
instances of non-compliance
with laws and regulations. We design procedures in line with
our responsib
il
it
ies, outl
ined above, to detect irregular
it
ies,
includ
ing fraud. The r
isk of not detecting a material
misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intent
ional
misrepresentat
ions, or through collus
ion. The extent to
which our procedures are capable of detecting irregular
it
ies,
includ
ing fraud
is detailed below.
However, the primary responsib
il
ity for the prevention and
detection of fraud rests with both those charged with
governance of the entity and management.
•
We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Group and
determined that the most sign
ificant are those that
relate to the reporting framework (UK-adopted IAS and
EU IFRS, the Companies Act 2006 and the UK Corporate
Governance Code, the Financ
ial Conduct Author
ity (FCA)
List
ing Rules, the Ma
in Board List
ing Rules of the Hong Kong
Stock Exchange), regulations and supervisory requirements
of the Prudential Regulation Authority (PRA), FRC, FCA and
other overseas regulatory requirements, includ
ing but not
lim
ited to regulat
ions in its major markets such as Mainland
China, Hong Kong, India, Republic of Korea, Singapore, the
United Arab Emirates, the United States of America, and
the relevant tax compliance regulations in the jur
isd
ict
ions
in which the Group operates. In addit
ion, we concluded that
there are certain sign
ificant laws and regulat
ions that may
have an effect on the determinat
ion of the amounts and
disclosures in the financ
ial statements and those laws and
regulations relating to regulatory capital and liqu
id
ity,
conduct, financial cr
ime includ
ing ant
i-money laundering,
sanctions and market abuse, recognis
ing the financial and
regulated nature of the Group’s activ
it
ies.
286
Standard Chartered
– Annual Report 2024
Financ
ial statements
Independent auditor’s report
•
We understood how the Group is complying with those
frameworks by performing a combinat
ion of
inqu
ir
ies of
senior management and those charged with governance
as required by audit
ing standards, rev
iew of board
and certain committee meeting minutes, gain
ing an
understanding of the Group’s approach to governance,
inspect
ion of regulatory correspondence
in the year and
engaging with internal and external legal counsel. We also
engaged EY financial cr
ime and forensics special
ists to
perform procedures on areas relating to anti-money
laundering, whistleblow
ing, and sanct
ions compliance.
Through these procedures, we became aware of actual
or suspected non-compliance. The ident
ified actual or
suspected non-compliance was not suffic
iently s
ign
ificant
to our audit that would have resulted in it being ident
ified
as a key audit matter.
•
We assessed the susceptib
il
ity of the Group’s financ
ial
statements to material misstatement, includ
ing how fraud
might occur by consider
ing the controls that the Group
has established to address risks ident
ified by the ent
ity,
or that otherwise seek to prevent, deter or detect fraud.
Our procedures to address the risks ident
ified also
included
incorporation of unpredictab
il
ity into the nature, tim
ing
and/or extent of our testing, challenging assumptions
and judgements made by management in their sign
ificant
accounting estimates and journal entry testing.
•
Based on this understanding, we designed our audit
procedures to ident
ify non-compl
iance with such laws and
regulations. Our procedures involved inqu
ir
ies of the Group’s
internal and external legal counsel, money laundering
reporting officer, internal audit, certain senior management
executives, and focused testing on a sample basis, includ
ing
journal entry testing. We also performed inspect
ion of key
correspondence from the relevant regulatory authorit
ies as
well as review of board and committee minutes.
•
For instances of actual or suspected non-compliance with
laws and regulations, which have a material impact on
the financial statements, these were commun
icated by
management to the Group audit engagement team and
component teams (where applicable) who performed audit
procedures such as inqu
ir
ies with management, sending
confirmations to external legal counsel, substant
ive testing
and meeting with regulators. Where appropriate, we
involved special
ists from our firm to support the aud
it team.
•
The Group is authorised to provide banking, insurance,
mortgages and home finance, consumer credit, pensions,
investments and other activ
it
ies. The Group operates in the
banking industry which is a highly regulated environment.
As such, the Senior Statutory Auditor considered the
experience and expertise of the Group audit engagement
team, the component teams and the shared service centre
teams to ensure that the team had the appropriate
competence and capabil
it
ies, which included the use of
special
ists where appropr
iate.
A further descript
ion of our respons
ib
il
it
ies for the aud
it
of the financial statements
is located on the Financ
ial
Reporting Council’s website at https://www.frc.org.uk/
auditorsrespons
ib
il
it
ies. This descript
ion forms part of
our auditor’s report.
Other matters we are required to address
•
Following the recommendation from the audit committee,
we were re-appointed by the Company on 10 May 2024
to audit the financ
ial statements for the year end
ing
31 December 2024 and subsequent financial per
iods.
•
The period of total uninterrupted engagement includ
ing
previous renewals and reappointments is five years,
covering the years ending 31 December 2020 to
31 December 2024.
•
The audit opin
ion
is consistent with the addit
ional report
to the audit committee.
Use of our report
This report is made solely to the company’s members, as
a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the company’s members those matters
we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsib
il
ity to anyone other than the
Company and the Company’s members as a body, for our
audit work, for this report, or for the opin
ions we have formed.
David Canning-Jones (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
21 February 2025
287
Standard Chartered
– Annual Report 2024
Financ
ial statements
Notes
2024
$mill
ion
2023
$mill
ion
Interest income
Interest expense
(21,496 )
(19,458 )
Net interest income
3
Fees and commiss
ion
income
Fees and commiss
ion expense
(889 )
(815 )
Net fee and commiss
ion
income
4
Net trading income
5
Other operating income
6
(172 )
Operating income
Staff costs
(8,510 )
(8,256 )
Premises costs
(401 )
(422 )
General admin
istrat
ive expenses
(2,465 )
(1,802 )
Depreciat
ion and amort
isat
ion
(1,126 )
(1,071 )
Operating expenses
7
(12,502 )
(11,551 )
Operating profit before impa
irment losses and taxat
ion
Credit impa
irment
8
(547 )
(508 )
Goodwill, property, plant and equipment and other impa
irment
9
(588 )
(1,008 )
Profit from associates and jo
int ventures
32
Profit before taxation
Taxation
10
(1,972 )
(1,631 )
Profit for the year
Profit attributable to:
Non-controlling interests
29
(8 )
(7 )
Parent company shareholders
Profit for the year
cents
cents
Earnings per share:
Basic earnings per ordinary share
12
Diluted earnings per ordinary share
12
The notes on pages 295 to 380 form an integral part of these financ
ial statements.
Consolidated income statement
For the year ended 31 December 2024
288
Standard Chartered
– Annual Report 2024
Financ
ial statements
Financ
ial statements
Notes
2024
$mill
ion
2023
$mill
ion
Profit for the year
Other comprehensive income
Items that will not be reclassif
ied to
income statement:
(181 )
Own credit (losses)/gains on financ
ial l
iab
il
it
ies des
ignated at fair value through
profit or loss
(426 )
Equity instruments at fair value through other comprehensive income
Actuarial gains/(losses) on retirement benefit obligat
ions
30
(47 )
Revaluation Surplus
Taxation relating to components of other comprehensive income/(loss)
10
(107 )
Items that may be reclassif
ied subsequently to
income statement:
(389 )
Exchange differences on translation of foreign operations:
Net losses taken to equity
(1,423 )
(734 )
Net gains on net investment hedges
14
Share of other comprehensive income/(loss) from associates and jo
int ventures
32
(7 )
Debt instruments at fair value through other comprehensive income
Net valuation gains taken to equity
Reclassif
ied to
income statement
6
Net impact of expected credit losses
(35 )
(48 )
Cash flow hedges:
Net movements in cash flow hedge reserve
14
(101 )
Taxation relating to components of other comprehensive income
10
(37 )
(129 )
Other comprehensive (loss)/income for the year, net of taxation
(570 )
Total comprehensive income for the year
Total comprehensive income attributable to:
Non-controlling interests
29
(22 )
(38 )
Parent company shareholders
Total comprehensive income for the year
Consolidated statement of
comprehensive income
For the year ended 31 December 2024
289
Standard Chartered
– Annual Report 2024
Financ
ial statements
Notes
2024
$mill
ion
2023
$mill
ion
Assets
Cash and balances at central banks
13,35
Financ
ial assets held at fa
ir value through profit or loss
13
Derivat
ive financial
instruments
13,14
Loans and advances to banks
13,15
Loans and advances to customers
13,15
Investment securit
ies
13
Other assets
20
Current tax assets
10
Prepayments and accrued income
Interests in associates and jo
int ventures
32
Goodwill and intang
ible assets
17
Property, plant and equipment
18
Deferred tax assets
10
Retirement benefit schemes in surplus
30
Assets classif
ied as held for sale
21
Total assets
Liab
il
it
ies
Deposits by banks
13
Customer accounts
13
Repurchase agreements and other sim
ilar secured borrow
ing
13,16
Financ
ial l
iab
il
it
ies held at fa
ir value through profit or loss
13
Derivat
ive financial
instruments
13,14
Debt securit
ies
in issue
13,22
Other liab
il
it
ies
23
Current tax liab
il
it
ies
10
Accruals and deferred income
Subordinated liab
il
it
ies and other borrowed funds
13,27
Deferred tax liab
il
it
ies
10
Provis
ions for l
iab
il
it
ies and charges
24
Retirement benefit schemes in defic
it
30
Liab
il
it
ies
included in disposal groups held for sale
21
Total liab
il
it
ies
Equity
Share capital and share premium account
28
Other reserves
Retained earnings
Total parent company shareholders’ equity
Other equity instruments
28
Total equity excluding non-controlling interests
Non-controlling interests
29
Total equity
Total equity and liab
il
it
ies
The notes on pages 295 to 380 form an integral part of these financ
ial statements.
irectors and authorised for issue on 21 February 2025 and signed
on its behalf by:
José Viñals
Bill Winters
Diego De Giorg
i
Group Chairman
Group Chief Executive
Group Chief Financ
Consolidated balance sheet
As at 31 December 2024
290
Standard Chartered
– Annual Report 2024
Financ
ial statements
Financ
ial statements
Consolidated statement of changes in equity
For the year ended 31 December 2024
Ordinary
share
capital
and share
premium
account
$mill
ion
Preference
share
capital
and share
premium
account
$mill
ion
Capital
and
merger
reserves
1
$mill
ion
Own
credit
adjust-
ment
reserve
$mill
ion
Fair
value
through
other
compre-
hensive
income
reserve
– debt
$mill
ion
Fair
value
through
other
compre-
hensive
income
reserve
– equity
$mill
ion
Cash-
flow
hedge
reserve
$mill
ion
Trans-
lation
reserve
$mill
ion
Retained
earnings
$mill
ion
Parent
company
share-
holders’
equity
$mill
ion
Other
equity
instru-
ments
$mill
ion
Non-
controlling
interests
$mill
ion
Total
$mill
ion
As at 01 January 2023
(63 )
(1,116 )
(564 ) (7,636 )
Profit for the year
(7 )
Other comprehensive income/(loss)
12
(489 )
(47 )
2
(31 )
Distr
ibut
ions
(26 )
(26 )
Redemption of other equity instruments
(1,000 )
(1,000 )
Treasury shares net movement
(189 )
(189 )
(189 )
Share option expense, net of taxation
Div
idends on ord
inary shares
(568 )
(568 )
(568 )
Div
idends on preference shares and
AT1 securit
ies
(452 )
(452 )
(452 )
Share buyback
3,4
(115 )
(2,000 )
(2,000 )
(2,000 )
Other movements
5
5
6
As at 31 December 2023
(690 )
(8,113 ) 28,459
Profit for the year
(8 )
Other comprehensive (loss)/income
12
(377 )
(26 )
10
(87 )
(735 )
2,11
(556 )
(14 )
(570 )
Distr
ibut
ions
(43 )
(43 )
Other equity instruments issued,
net of expenses
13
Redemption of other equity instruments
(553 )
14
(553 )
Treasury shares net movement
(168 )
(168 )
(168 )
Share option expense, net of taxation
Div
idends on ord
inary shares
(780 )
(780 )
(780 )
Div
idends on preference shares and
AT1 securit
ies
(457 )
(457 )
(457 )
Share buyback
8,9
(120 )
(2,500 ) (2,500 )
(2,500 )
Other movements
(1 )
5
(131 )
7
(25 )
14
6
As at 31 December 2024
(278 )
(241 )
(8,638 ) 28,969
1
Includes capital reserve of $5 mill
ion, cap
ital redemption reserve of $457 mill
ion and merger reserve of $17,111 m
ill
ion
2
Includes actuarial gain, net of taxation on Group defined benefit schemes
3
On 16 February 2023, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases
was $58 mill
ion, and the total cons
iderat
ion pa
id was $1,000 mill
ion and the buyback completed on 29 September 2023. The total number of shares purchased
was 116,710,492 , representing 4.03 per cent of the ordinary shares in issue as at the commencement of the buyback. The nominal value of the shares was
transferred from the share capital to the capital redemption reserve account
4
On 28 July 2023, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases was
$57 mill
ion, and the total cons
iderat
ion pa
id was $1,000 mill
ion and the buyback completed on 6 November 2023. The total number of shares purchased was
from the share capital to the capital redemption reserve account
5
Movement related to Translation adjustment and AT1 Securit
ies charges (2023). December 2024 movement
includes realisat
ion of translat
ion adjustment loss
from sale of SCB Zimbabwe Lim
ited ($190 m
ill
ion), SCB Angola S.A. ($31 m
ill
ion), SCB S
ierra Leone Lim
ited ($25 m
ill
ion) transferred to other operat
ing income
6
Movements primar
ily from non-controll
ing interest pertain
ing to Mox Bank L
im
ited ($48 m
ill
ion), Trust Bank S
ingapore Lim
ited ($34 m
ill
ion) and Zod
ia Custody
Lim
ited ($28 m
ill
ion)
in 2023. Movements in 2024 are primar
ily from non-controll
ing interest pertain
ing to Mox Bank L
im
ited ($14 m
ill
ion) and Trust Bank S
ingapore
Lim
ited ($55 m
ill
ion) offset by SCB Angola S.A. ($6 m
ill
ion)
7
Mainly includes movements related to Ghana hyperinflat
ion
8
On 23 February 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases
was $57 mill
ion, the total cons
iderat
ion pa
id was $1,000 mill
ion and the buyback completed on 25 June 2024. The total number of shares purchased was
ing of the programme. The nom
inal value of the shares was transferred from
the share capital to the capital redemption reserve account.
9
On 30 July 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases was
$63 mill
ion, as at December 2024 the buyback
is ongoing, with the total number of shares purchased of 126,262,414 representing 4.95 per cent of the ordinary
shares in issue at the beginn
ing of the programme, the total cons
iderat
ion was $1,355 m
ill
ion, and a further $145 m
ill
ion relat
ing to irrevocable obligat
ion to
buyback shares under the buyback programme has been recognised. The nominal value of the shares was transferred from the share capital to the capital
redemption reserve account.
10 Includes $174 mill
ion ga
in on sale of equity investment transferred to retained earnings partly offset by $76 mill
ion reversal of deferred tax l
iab
il
ity and $72 mill
ion
mark-to-market gain on equity instrument
11
Includes $174 mill
ion ga
in on sale of equity investment in other comprehensive income reserve transferred to retained earnings partly offset by $13 mill
ion cap
ital
gain tax
12 All the amounts are net of tax
13 Includes $993 mill
ion and $575 m
ill
ion (SGD 750 m
ill
ion) fixed rate resett
ing perpetual subordinated contingent convertible AT1 securit
ies
issued by Standard
Chartered PLC
14 Relates to redemption of AT1 securit
ies of SGD 750 m
ill
ion ($553 m
ill
ion) and real
ised translation loss ($25 mill
ion) reported
in other movements
Note 28 includes a descript
ion of each reserve.
The notes on pages 295 to 380 form an integral part of these financ
ial statements.
291
Standard Chartered
– Annual Report 2024
Financ
ial statements
Notes
Group
Company
2024
$mill
ion
2023
$mill
ion
2024
$mill
ion
2023
$mill
ion
Cash flows from operating activ
it
ies:
Profit before taxation
3,424
4,269
Adjustments for non-cash items and other adjustments
included with
in
income statement
34
(1,670)
(2,847)
Change in operating assets
34
(66,431 )
(14,458 )
682
(3,819)
Change in operating liab
il
it
ies
34
(864)
3,239
Contribut
ions to defined benefit schemes
30
(68 )
(81 )
–
–
UK and overseas taxes paid
10
(2,045 )
(1,367 )
–
–
Net cash (used in)/from operating activ
it
ies
(20,489 )
(5,562 )
1,572
842
Cash flows from invest
ing act
iv
it
ies:
Internally generated capital
ised software
17
(953 )
(1,124 )
–
–
Disposal of Internally generated Capital
ised Software
17
–
–
Purchase of property, plant and equipment
18
(456 )
(159 )
–
–
Disposal of property, plant and equipment
18
–
–
Disposal of held for sale property, plant and equipment
21
–
–
Acquis
it
ion of investment associates, and jo
int ventures
32
(12 )
(47 )
–
–
Div
idends rece
ived from subsid
iar
ies, associates and
joint ventures
32,34
4,101
4,738
Disposal of investment in subsid
iar
ies, associates, and
joint ventures
1
–
–
Purchase of investment securit
ies
(217,448 )
(229,302 )
(1,287)
(423)
Disposal and maturity of investment securit
ies
1,273
2,000
Net cash from invest
ing act
iv
it
ies
4,087
6,315
Cash flows from financing act
iv
it
ies:
Exercise of share options
33
26
Purchase of own shares
(201 )
(215 )
(201)
(215)
Cancellation of shares includ
ing share buyback
(2,500 )
(2,000 )
(2,500)
(2,000)
Premises and equipment lease liab
il
ity princ
ipal payment
(205 )
(234 )
–
–
Issue of Addit
ional T
ier 1 Capital net of expenses
28
1,568
–
Redemption of Tier 1 Capital
28
(553 )
(1,000 )
(553)
(1,000)
Gross proceeds from issue of subordinated liab
il
it
ies
34
–
–
Interest paid on subordinated liab
il
it
ies
34
(519 )
(563 )
(505)
(545)
Repayment of subordinated liab
il
it
ies
34
(1,517 )
(2,160 )
(1,517)
(2,160)
Proceeds from issue of senior debts
34
3,887
5,105
Repayment of senior debts
34
(11,185 )
(6,471 )
(2,619)
(2,037)
Interest paid on senior debts
34
(1,366 )
(1,145 )
(708)
(434)
Net cash inflow from Non-controlling interest
29
–
–
Distr
ibut
ions and div
idends pa
id to non-controlling interests,
preference shareholders and AT1 securit
ies
(500 )
(478 )
(457)
(452)
Div
idends pa
id to ordinary shareholders
(780 )
(568 )
(780)
(568)
Net cash (used in)/from financ
ing act
iv
it
ies
(6,626 )
(4,352)
(4,280)
Net (decrease)/increase in cash and cash equivalents
(15,662 )
1,307
2,877
Cash and cash equivalents at beginn
ing of the year
10,294
7,417
Effect of exchange rate movements on cash and
cash equivalents
(2,045 )
(796 )
–
–
Cash and cash equivalents at end of the year
35
11,601
10,294
1
2024 balance includes disposal of SCB Zimbabwe Lim
ited ($24 m
ill
ion), SCB Angola S.A. ($10 m
ill
ion), SCB S
ierra Leone Lim
ited ($17 m
ill
ion), Shoal l
im
ited
($17 mill
ion) and Autumn l
ife Pte. Ltd ($6 mill
ion). 2023 balance
includes disposal of aviat
ion finance leas
ing business ($3,570 mill
ion), sale of Metaco SA
($14 mill
ion), Cardspal Pte. Ltd. ($12 m
ill
ion) and Kozag
i ($7 mill
ion).
Interest received was $28,224 mill
ion (31 December 2023: $27,136 m
ill
ion),
interest paid was $21,776 mill
ion (31 December 2023:
$18,379 mill
ion).
Cash flow statement
For the year ended 31 December 2024
292
Standard Chartered
– Annual Report 2024
Financ
ial statements
Financ
ial statements
Company balance sheet
For the year ended 31 December 2024
Notes
2024
$mill
ion
2023
$mill
ion
Non-current assets
Investments in subsid
iary undertak
ings
32
61,593
60,791
Current assets
Derivat
ive financial
instruments
39
112
80
Financ
ial assets held at fa
ir value through profit or loss
39
19,049
19,425
Investment securit
ies
39
5,808
6,944
Amounts owed by subsid
iary undertak
ings
39
11,601
10,294
Total current assets
36,570
36,743
Current liab
il
it
ies
Derivat
ive financial
instruments
39
1,065
1,104
Amounts owed to subsid
iary undertak
ings
39
35
-
Financ
ial l
iab
il
it
ies held at fa
ir value through profit or loss
39
16,852
16,704
Other creditors
959
650
Total current liab
il
it
ies
18,911
18,458
Net current assets
17,659
18,285
Total assets less current liab
il
it
ies
79,252
79,076
Non-current liab
il
it
ies
Debt securit
ies
in issue
39
18,167
17,142
Subordinated liab
il
it
ies and other borrowed funds
39
7,661
9,248
Total non-current liab
il
it
ies
25,828
26,390
Total assets less liab
il
it
ies
53,424
52,686
Equity
Share capital and share premium account
28
6,695
6,815
Other reserves
17,538
17,409
Retained earnings
22,691
22,952
Total shareholders’ equity
46,924
47,176
Other equity instruments
28
6,500
5,510
Total equity
53,424
52,686
The Company has taken advantage of the exemption in section 408 of the Companies Act 2006 not to present its ind
iv
idual
statement of comprehensive income and related notes that form a part of these financ
ial statements. The Company profit for
the period after tax is $3,408 mill
ion (31 December 2023: $4,205 m
ill
ion).
The notes on pages 295 to 380 form an integral part of these financ
ial statements.
These financial statements were approved by the Board of d
irectors and authorised for issue on 21 February 2025 and signed
on its behalf by:
José Viñals
Bill Winters
Diego De Giorg
i
Group Chairman
Group Chief Executive
Group Chief Financ
ial Officer
293
Standard Chartered
– Annual Report 2024
Financ
ial statements
Share
capital and
share
premium
account
$mill
ion
Capital
and merger
reserve
1
$mill
ion
Own credit
adjustment
reserve
$mill
ion
Cash flow
hedge
reserve
$mill
ion
Retained
earnings
$mill
ion
Other equity
instruments
$mill
ion
Total
$mill
ion
As at 1 January 2023
6,930
17,338
(19)
(48)
21,791
6,502
52,494
Profit for the year
2
–
–
–
–
4,205
–
4,205
Other comprehensive income
8
–
–
11
12
–
–
23
Treasury shares net movement
–
–
–
–
(189)
–
(189)
Share option expenses
–
–
–
–
170
–
170
Div
idends on ord
inary shares
–
–
–
–
(568)
–
(568)
Div
idends on preference share and AT1 secur
it
ies
–
–
–
–
(452)
–
(452)
Redemption of other equity instruments
–
–
–
–
–
(1,000)
(1,000)
Share buyback
3,4
(115)
115
–
–
(2,000)
–
(2,000)
Other Movements
5
–
–
–
–
(5)
8
3
As at 31 December 2023
6,815
17,453
(8)
(36)
22,952
5,510
52,686
Profit for the year
2
–
–
–
–
3,408
–
3,408
Other comprehensive (loss)/income
8
–
–
(11)
20
–
–
9
Other equity instruments issued, net of expenses
–
–
–
–
–
1,568
1,568
Treasury shares net movement
–
–
–
–
(168)
–
(168)
Share option expenses
–
–
–
–
250
–
250
Div
idends on ord
inary shares
–
–
–
–
(780)
–
(780)
Div
idends on preference share and AT1 secur
it
ies
–
–
–
–
(457)
–
(457)
Redemption of other equity instruments
–
–
–
–
–
(553)
(553)
Share buyback
6,7
(120)
120
–
–
(2,500)
–
(2,500)
Other Movements
5
–
–
–
–
(14)
(25)
(39)
As at 31 December 2024
6,695
17,573
(19)
(16)
22,691
6,500
53,424
1
Includes capital reserve of $5 mill
ion, cap
ital redemption reserve of $457 mill
ion and merger reserve of $17,111 m
ill
ion
2
Includes div
idend rece
ived of $2,395 mill
ion (2023: $2,789 m
ill
ion) from Standard Chartered Hold
ing Lim
ited
3
On 16 February 2023, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases
was $58 mill
ion, and the total cons
iderat
ion pa
id was $1,000 mill
ion and the buyback completed on 29 September 2023. The total number of shares purchased
was 116,710,492, representing 4.03 per cent of the ordinary shares in issue as at the commencement of the buyback. The nominal value of the shares was
transferred from the share capital to the capital redemption reserve account
4
On 28 July 2023, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases was
$57 mill
ion, and the total cons
iderat
ion pa
id was $1,000 mill
ion and the buyback completed on 6 November 2023. The total number of shares purchased was
112,982,802, representing 3.90 per cent of the ordinary shares in issue as at the commencement of the buyback. The nominal value of the shares was transferred
from the share capital to the capital redemption reserve account
5
Movement mainly related to Translation adjustment and AT1 Securit
ies charges
6
On 23 February 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases
was $57 mill
ion, the total cons
iderat
ion pa
id was $1,000 mill
ion, and the buyback completed on 25 June 2024. The total number of shares purchased was
113,266,516, representing 4.25 per cent of the ordinary shares in issue at the beginn
ing of the programme. The nom
inal value of the shares was transferred from
the share capital to the capital redemption reserve account
7
On 30 July 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases was
$63 mill
ion, as at December 2024 the buyback
is ongoing, with the total number of shares purchased of 126,262,414 representing 4.95 per cent of the ordinary
shares in issue at the beginn
ing of the programme, the total cons
iderat
ion was $1,355 m
ill
ion, and a further $145 m
ill
ion relat
ing to irrevocable obligat
ion to
buy back shares under the buyback programme has been recognised. The nominal value of the shares was transferred from the share capital to the capital
redemption reserve account
8
All the amounts are net of tax
Note 28 includes a descript
ion of each reserve.
The notes on pages 295 to 380 form an integral part of these financ
ial statements.
Company statement of changes in equity
For the year ended 31 December 2024
294
Standard Chartered
– Annual Report 2024
Financ
ial statements
Notes to the financial statements
Contents – Notes to the financial statements
Section
Note
Page
Basis of preparation
1
Accounting polic
ies
295
Performance/return
2
Segmental informat
ion
298
3
Net interest income
300
4
Net fees and commiss
ion
301
5
Net trading income
302
6
Other operating income
303
7
Operating expenses
303
8
Credit impa
irment
304
9
Goodwill, property, plant and equipment and other impa
irment
308
10
Taxation
308
11
Div
idends
311
12
Earnings per ordinary share
312
Assets and liab
il
it
ies held at fa
ir value
13
Financ
ial
instruments
313
14
Derivat
ive financial
instruments
331
Financ
ial
instruments held at amortised cost
15
Loans and advances to banks and customers
337
16
Reverse repurchase and repurchase agreements includ
ing other
sim
ilar lend
ing and borrowing
337
Other assets and investments
17
Goodwill and intang
ible assets
339
18
Property, plant and equipment
341
19
Leased assets
343
20
Other assets
343
21
Assets held for sale and associated liab
il
it
ies
344
Funding, accruals, provis
ions, cont
ingent
liab
il
it
ies and legal proceed
ings
22
Debt securit
ies
in issue
345
23
Other liab
il
it
ies
345
24
Provis
ions for l
iab
il
it
ies and charges
346
25
Contingent liab
il
it
ies and comm
itments
346
26
Legal and regulatory matters
347
Capital instruments, equity and reserves
27
Subordinated liab
il
it
ies and other borrowed funds
348
28
Share capital, other equity instruments and reserves
348
29
Non-controlling interests
352
Employee benefits
30
Retirement benefit obligat
ions
352
31
Share-based payments
356
Scope of consolidat
ion
32
Investments in subsid
iary undertak
ings, jo
int ventures and assoc
iates
361
33
Structured entit
ies
366
Cash flow statement
34
Cash flow statement
367
35
Cash and cash equivalents
368
Other disclosure matters
36
Related party transactions
369
37
Post balance sheet events
370
38
Auditor’s remuneration
370
39
Standard Chartered PLC (Company)
371
40
Related undertakings of the Group
374
Notes to the financial statements
Standard Chartered
– Annual Report 2024
295
Financ
ial statements
ies
The Group financial statements consol
idate Standard
Chartered PLC (the Company) and its subsid
iar
ies (together
referred to as the Group) and equity account the Group’s
interests in associates and jo
intly controlled ent
it
ies.
The parent company financial statements present
informat
ion about the Company as a separate ent
ity.
The Group financial statements have been prepared
in
accordance with UK-adopted internat
ional account
ing
standards and International Financ
ial Report
ing Standards
(IFRS) (Accounting Standards) as adopted by the European
Union (EU IFRS). The Company financ
ial statements
have been prepared in accordance with UK-adopted
internat
ional account
ing standards as applied in
conformity with section 408 of the Companies Act 2006.
The financial statements have been prepared
in
accordance with the requirements of the Companies
Act 2006.
There are no sign
ificant d
ifferences between UK-adopted
internat
ional account
ing standards and EU IFRS.
The following parts of the Risk review and Capital review
form part of these financial statements:
a) Risk review: Disclosures marked as ‘audited’ from the
start of the Credit Risk section (page 207) to the end of
Other princ
ipal r
isks in the same section (page 255).
b) Capital review: Tables marked as ‘audited’ from the start
of ‘CRD Capital base’ to the end of ‘Movement in total
capital’, excluding ‘Total risk-weighted assets’ (pages 271
The consolidated and Company financ
ial statements have
been prepared on a going concern basis and under the
histor
ical cost convent
ion, as modif
ied by the revaluat
ion
of cash-settled share-based payments, fair value through
other comprehensive income, and financ
ial assets and
liab
il
it
ies (
includ
ing der
ivat
ives) at fa
ir value through profit
or loss.
The consolidated financ
ial statements are presented
in
United States dollars ($), being the presentation currency
of the Group and functional currency of the Company, and
all values are rounded to the nearest mill
ion dollars, except
when otherwise ind
ificant and other account
ing estimates and
judgement
In determin
ing the carry
ing amounts of certain assets and
liab
il
it
ies, the Group makes assumpt
ions of the effects of
uncertain future events on those assets and liab
il
it
ies
at the balance sheet date. The Group’s estimates and
assumptions are based on histor
ical exper
ience and
expectation of future events and are reviewed period
ically.
Further informat
ion about key assumpt
ions concerning
the future, and other key sources of estimat
ion uncerta
inty
and judgement, are set out in the relevant disclosure notes
for the areas set out under the relevant headings below:
Sign
ificant account
ing estimates and crit
ical judgements
•
Expected credit loss calculations (Note 8)
•
Financ
ial
instruments measured at fair value (Note 13)
•
Investments in subsid
iary undertak
ings, jo
int ventures
and associates – China Bohai associate accounting and
impa
irment analys
is (Note 32)
Sign
ificant account
ing estimates and judgements
represent those items which have a sign
ificant r
isk of
causing a material adjustment to the carrying amounts
of assets and liab
il
it
ies w
ith
in the next year. S
ign
ificant
accounting estimates and judgements are:
Other areas of accounting estimate and judgement
Other areas of accounting estimate and judgement do not
meet the definit
ion under IAS 1 of sign
ificant account
ing
estimates or crit
ical account
ing judgements, but the
recognit
ion of certa
in material assets and liab
il
it
ies are
based on assumptions and/or are subject to long-term
uncertaint
ies. The other areas of account
ing estimate and
judgement are:
• Taxation (Note 10)
•
Goodwill and intang
ible assets - Goodw
ill impa
irment
and Capital
isat
ion of internally generated software
intang
ibles (Note 9 and Note 17)
•
Provis
ions for l
iab
il
it
ies and charges – Other prov
is
ions
(Note 24)
•
Legal and regulatory matters (Note 26)
•
Retirement benefit obligat
ions (Note 30)
•
Share-based payments (Note 31)
Climate change impact on the Group’s balance sheet
Climate, and the impact of climate on the Group’s
balance sheet is considered as an area which can
impact accounting estimates and judgments through
the uncertainty of future events and the impact of
that uncertainty on the Group’s assets and liab
il
it
ies.
However, the Group has concluded that Climate Change
does not have a financially mater
ial impact at this time.
The Group has assessed the impact of climate risk on the
financial report. Th
is is set out with
in the Susta
inab
il
ity
Overview and Sustainab
il
ity Review chapter which
incorporate the Group’s Climate-related Financ
ial
Disclosures which align with the recommendations from
the Task Force for Climate related Financ
ial D
isclosures
(TCFD). Further risk disclosure has been provided in the
Princ
ipal R
isks and Uncertaint
ies sect
ion of the Annual
Report where the Group has described how it manages
climate risk, which is integrated across relevant Princ
ipal
Risk Types (PRTs) and is managed via the ESGR Risk
Type framework.
The areas of impact where judgements and the use of
estimates have been applied were credit risk and the
impact on lending portfolios; ESG features with
in
issued
loans and bonds; physical risk on our mortgage lending
portfolio; and the corporate plan, in respect of which
forward looking cash flows impact the recoverabil
ity of
certain assets, includ
ing of goodw
ill, deferred tax assets
and investments in subsid
iary undertak
ings.
1. Accounting polic
ies
continued
Financ
ial statements
Notes to the financial statements
296
Standard Chartered
– Annual Report 2024
Transit
ion r
isk, as our clients move to lower carbon emitt
ing
revenues, (either by virtue of legislat
ion or chang
ing end
customer preference) is considered with reference to client
transit
ion pathways and man
ifests over a longer term than
the maturity of the loan book (up to 2050). The setting of
net zero targets, which as of this annual report covers our
12 highest emitt
ing sectors, manages trans
it
ion r
isk.
Net zero targets enable the portfolio managers to work
with our clients on their transit
ion and deploy cap
ital to
those clients which are engaged and have adequate
transit
ion pathways. All of these act
ions manage the
Group’s transit
ion r
isk and engage clients before transit
ion
risk manifests itself into credit losses. We have also
evaluated transit
ion r
isk to achieve net zero in our
own operations.
While physical risk is included with
in the majority of our
mortgage lending decis
ions, we have appl
ied scenario
analysis against the pathways of different temperature
outcomes to examine exposure concentration risk in key
markets subject to the extreme risk of floods and storms to
assess the acute physical risk, and sea level rise to assess
the chronic physical risk. Stranded assets analysis was
conducted for resident
ial mortgages to
ident
ify propert
ies
that are expected to become uninhab
itable and/or
unusable due to increased frequency and intens
ity of
physical risk events from acute and chronic risks. We assess
the physical risk vulnerabil
it
ies of our exist
ing s
ites on a
regular basis and for new sites during the onboarding
process. Addit
ionally, we assess the
impact of climate risk
on the classif
icat
ion of financ
ial
instruments under IFRS 9,
when Environmental, Social or Governance (ESG) triggers
may affect the cash flows received by the Group under the
contractual terms of the instrument.
The ESGR Risk team has performed a quantitat
ive
assessment of the impact of climate risk on the IFRS 9
ECL provis
ion. Th
is assessment has been performed across
both the CIB and WRB portfolios. The Climate risk impact
assessment on IFRS 9 business as usual ECL has been
conducted based on newly developed and enhanced
internal climate risk models for corporates across six
prior
ity sectors (O
il and Gas, Power, Steel, Min
ing, Sh
ipp
ing,
and Automotive), one Generic model for the remain
ing
corporate sectors and Sovereigns, while the top-down
approach developed in 2022 was used for the remain
ing
portfolios. The impact assessment, which primar
ily focused
on transit
ion r
isk, resulted in only a marginal ECL increase
across CIB and WRB, which has been recorded as a
management overlay for the 2024 year end.
The Group’s corporate plan has a 5 year outlook and
considers the highest emitt
ing sectors the Group finances.
The majority of the Group sector targets are product
ion/
physical intens
it
ies which allow continued levels of
lending as long as the products the client produce have
a decreasing carbon cost. For Coal Min
ing and O
il and Gas,
these sectors have absolute targets which represent a
decreasing carbon budget. Coal Min
ing
is an immater
ial
book, while for Oil and Gas lending is being actively
monitored towards lower carbon counterparties and
technologies. The corporate plan is shorter term than many
of the climate scenario outlooks but seeks to capture the
nearer term performance as required by recoverabil
ity
models. The Group has for the third time in the 2025
corporate plan included antic
ipated cred
it impa
irment
charges, now across seven sectors (Oil and Gas, Metals
and Min
ing, Power, and Transport, along w
ith Cement,
Automobile, and Commercial Real Estate which have been
newly added this year). This addit
ion of cred
it impa
irment
has not in itself, materially impacted the recoverabil
ity of
assets supported by discounted cash flow models (such as
Value in Use) which util
ise the Corporate plan.
The Group has progressively strengthened its scenario
analysis capabil
it
ies with the modelling of Climate Risk
impact over a 30-year period across multiple dimens
ions
includ
ing scenar
io data and pathways across CIB and WRB
portfolios. While we have taken the first step in our journey
to transit
ion from our rel
iance on vendor models to in-house
capabil
it
ies, challenges underpin the scenario analysis,
such as reliance on nascent methodologies, dependencies
on first generation models and data lim
itat
ions.
Notwithstand
ing these challenges, our work to date,
using certain assumptions and proxies, ind
icates that our
business is resil
ient to all Network of Central Banks and
Supervisors for Greening the Financ
ial System (NGFS) and
bespoke scenarios that were explored.
The Group, although acknowledging the lim
itat
ions of
current data available, increas
ing soph
ist
icat
ion of models
evolving and nascent nature of climate impacts on internal
and client assets, considers Climate Risk to have lim
ited
quantitat
ive
impact in the immed
iate term and as a
longer-term risk is expected to be addressed through its
business strategy and financ
ial plann
ing as the Group
As required by the Hong Kong List
ing Rules, an
explanation of the differences in accounting practices
between UK-adopted IFRS and Hong Kong Financ
ial
Reporting Standards is required to be disclosed. There
would be no sign
ificant d
ifferences had these accounts
been prepared in accordance with Hong Kong Financ
ial
Reporting Standards.
Standard Chartered PLC has fully complied with the
new treasury share regime introduced under the revised
Hong Kong List
ing Rules from 11 June 2024 onwards and
1. Accounting polic
ies
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
297
There were no new accounting standards or interpretat
ions
that had a material effect on the Group’s Financ
ial
Statements in 2024.
IAS 21 Amendment – Lack of Exchangeabil
ity
In August 2023, the IASB issued amendments to IAS 21 The
Effects of Changes in Foreign Exchange Rates to specify how
an entity should assess whether a currency is exchangeable
and how it should determine a spot exchange rate when
exchangeabil
ity
is lacking. The amendments also require
disclosure of informat
ion that enables users to understand
the impact of a currency not being exchangeable. The
amendments will be effective for annual reporting periods
beginn
ing on or after 1 January 2025. The amendment
is
not expected to have a material impact on the Group’s
financial statements.
IFRS 18 Presentation and Disclosure in Financ
ial Statements
The new standard IFRS 18 was issued in April 2024 and is
effective for annual reporting periods beginn
ing on or
after January 1, 2027 but earlier applicat
ion
is permitted.
This new standard replaces IAS 1 Presentation of Financ
ial
Statements and amends IAS 7 Statement of Cash Flows.
IFRS 18 introduces three defined categories for income and
expenses—operating, invest
ing and financing—to
improve
the structure of the income statement, and requires all
companies to provide new defined subtotals, includ
ing
operating profit. IFRS 18 will require disclosure of
explanations of company-specif
ic measures that are related
to the income statement, referred to as management-
defined performance measures. IFRS 18 sets out enhanced
guidance on how to organise informat
ion and whether to
provide it in the primary financ
ial statements or
in the notes.
The Group will apply IFRS 18 for annual reporting periods
beginn
ing on January 1, 2027 and
is currently not expected
to have a material impact on the Group’s financ
ial
statements other than a change in the presentation of
the primary statements.
IFRS 9 Financ
ial Instruments and IFRS 7 F
inanc
ial
Instruments: Disclosures Amendments
In May 2024, the IASB issued Amendments to the
Classif
icat
ion and Measurement of Financ
ial Instruments
which amended requirements related to settling financ
ial
liab
il
it
ies us
ing an electronic payment system and assessing
contractual cash flow characterist
ics of financial assets,
includ
ing those w
ith environmental, social and governance
(ESG)-linked features. The IASB also amended disclosure
requirements relating to investments in equity instruments
designated at fair value through other comprehensive
income and added disclosure requirements for financ
ial
instruments with contingent features that do not relate
directly to basic lending risks and costs. The amendments
will be effective for annual reporting periods beginn
ing on or
after 1 January 2026. The amendments are not expected to
have a material impact on the Group’s financ
These financial statements were approved by the Board
of directors on 21 February 2025. The directors have made
an assessment of the Group’s abil
ity to cont
inue as a
going concern. This assessment has been made having
considered the current macroeconomic and geopolit
ical
headwinds, includ
ing:
•
Review of the Group Strategy and Corporate Plan,
includ
ing the annual budget
•
An assessment of the actual performance to date,
loan book quality, credit impa
irment, legal and
regulatory matters, compliance matters, recent
regulatory developments
•
Considerat
ion of stress test
ing performed, includ
ing the
Group Recovery Plan (RP) which include the applicat
ion
of stressed scenarios. Under the tests and through the
range of scenarios, the results of these exercises and the
RP demonstrate that the Group has sufficient cap
ital
and liqu
id
ity to continue as a going concern and meet
min
imum regulatory cap
ital and liqu
id
ity requirements
•
Analysis of the capital posit
ion of the Group,
includ
ing
the capital and leverage ratios, and ICAAP which
summarises the Group’s capital and risk assessment
processes, assesses its capital requirements and the
adequacy of resources to meet them
•
Analysis of the funding and liqu
id
ity posit
ion of the Group,
includ
ing the Internal L
iqu
id
ity Adequacy Assessment
Process (ILAAP), which considers the Group’s liqu
id
ity
posit
ion,
its framework and whether suffic
ient l
iqu
id
ity
resources are being mainta
ined to meet l
iab
il
it
ies as they
fall due, was also reviewed. Further, funding and liqu
id
ity
was considered in the context of the risk appetite metrics,
includ
ing the LCR rat
io
•
The level of debt in issue, includ
ing redempt
ions and
issuances during the year, debt falling due for repayment
in the next 12 months and further planned debt issuances,
includ
ing the appet
ite in the market for the Group’s debt
•
The Group’s portfolio of debt securit
ies held at
amortised cost
•
A detailed review of all princ
ipal r
isks as well as topical
and emerging risks
Based on the analysis performed, the directors confirm
they are satisf
ied that the Group has adequate resources
to continue in business for a period of at least 12 months
from 21 February 2025.
For this reason, the Group continues to adopt the
going concern basis of accounting for preparing the
Financ
ial statements
Notes to the financial statements
298
Standard Chartered
– Annual Report 2024
ion
Basis of preparation
The analysis reflects how the client segments and geographic regions are managed internally. This is described as the
Management View (on an underlying basis) and 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. In certain
instances this approach is not appropriate and a Financ
ial V
iew is disclosed, that is, the location in which the transaction or
balance was booked. Typically, the Financ
ial V
iew is used in areas such as the Market and Liqu
id
ity Risk reviews where actual
booking location is more important for an assessment. Segmental informat
ion
is therefore on a Management View unless
otherwise stated.
Client segments
The Group’s segmental reporting is in accordance with IFRS 8 Operating Segments and is reported consistently with the internal
performance framework and as presented to the Group’s Management Team.
Restructuring items excluded from underlying results
The Group’s reported IFRS performance is adjusted for certain items to arrive at alternative performance measures. These items
include profits or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent, other
infrequent and/or exceptional transactions that are sign
ificant or mater
ial in the context of the Group’s normal business
earnings for the period and items which management and investors would ordinar
ily
ident
ify separately when assess
ing
consistent performance period by period. The alternative performance measures are not with
in the scope of IFRS and not
a substitute for IFRS measures. These adjustments are set out below.
Restructuring loss of $441 mill
ion pr
imar
ily relate to the ex
its in AME, Aviat
ion finance bus
iness and reflect the impact of actions
to transform the organisat
ion to
improve productiv
ity, pr
imar
ily add
it
ional redundancy charges, s
impl
ify
ing technology
platforms and optim
is
ing the Group’s office space and property footprint, Fit For Growth costs that are primar
ily severance
costs, costs of staff working on FFG in
it
iat
ives and legal and profess
ional fees. The Group is also reclassify
ing the movements
in the Debit Valuation Adjustment (DVA) into restructuring and other items.
Reconcil
iat
ions between underlying and reported results are set out in the tables below:
| 2024 | |||||||
Net (loss)/ | |||||||
Gain on | |||||||
businesses | |||||||
disposed of/ | Goodwill | ||||||
Underlying | Restructuring³ | held for sale 1 | impa irment ⁴ | Other items 2 | DVA | Reported | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Operating income | 19,696 | 103 | (232) | – | – | (24) | 19,543 |
Operating expenses | (11,790) | (612) | – | – | (100) | – | (12,502) |
Operating profit/(loss) before | |||||||
impa irment losses and taxat ion | 7,906 | (509) | (232) | – | (100) | (24) | 7,041 |
Credit impa irment | (557) | 10 | – | – | – | – | (547) |
Other impa irment | (588) | – | – | – | – | – | (588) |
Profit from associates and jo int ventures | 50 | 58 | – | – | – | – | 108 |
Profit/(loss) before taxation | 6,811 | (441) | (232) | – | (100) | (24) | 6,014 |
2023 | |||||||
Operating income | 17,378 | 362 | 262 | – | – | 17 | 18,019 |
Operating expenses | (11,136) | (415) | – | – | – | – | (11,551) |
Operating profit/(loss) before | |||||||
impa irment losses and taxat ion | 6,242 | (53) | 262 | – | – | 17 | 6,468 |
Credit impa irment | (528) | 20 | – | – | – | – | (508) |
Other impa irment | (130) | (28) | – | (850) | – | – | (1,008) |
Profit from associates and jo int ventures | 94 | 47 | – | – | – | – | 141 |
Profit/(loss) before taxation | 5,678 | (14) | 262 | (850) | – | 17 | 5,093 |
1
Net loss on businesses disposed of/ held for sale 2024 includes $172 mill
ion pr
imar
ily relat
ing to recycling of FX translation losses from reserves into P&L on the sale
of Zimbabwe, $26 mill
ion loss on sale of Angola, $19 m
ill
ion loss on S
ierra Leone Partial exit and $15 mill
ion loss on the Av
iat
ion bus
iness disposal
2
Other items 2024 include $100 mill
ion charge relat
ing to Korea equity linked securit
ies (ELS) portfol
io
3
Restructuring Operating expenses 2024 includes $156m of Fit For Growth costs that are primar
ily severance costs, costs of staff work
ing on FFG in
it
iat
ives and legal
and professional fees
4
Goodwill and other impa
irment
include $850 mill
ion
impa
irment charge relat
ing to the Group’s investment in its associate China Bohai Bank (Bohai)
2. Segmental informat
ion
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
299
Underlying performance by client segment
2024 | 2023 | |||||||||
Corporate & | Wealth & | Central & | Corporate & | Wealth & | Central & | |||||
Investment | Retail | other | Investment | Retail | other | |||||
Banking | Banking | Ventures | items | Total | Banking | Banking | Ventures | items | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Operating income | 11,818 | 7,816 | 183 | (121) | 19,696 | 11,218 | 7,106 | 156 | (1,102) | 17,378 |
External | 10,363 | 3,328 | 184 | 5,821 | 19,696 | 8,543 | 3,902 | 157 | 4,776 | 17,378 |
Inter-segment | 1,455 | 4,488 | (1) | (5,942) | – | 2,675 | 3,204 | (1) | (5,878) | – |
Operating expenses | (6,033) | (4,589) | (464) | (704) | (11,790) | (5,627) | (4,261) | (429) | (819) | (11,136) |
Operating profit/(loss) before | ||||||||||
irment losses and taxat impa ion | 5,785 | 3,227 | (281) | (825) | 7,906 | 5,591 | 2,845 | (273) | (1,921) | 6,242 |
Credit impa irment | 106 | (644) | (74) | 55 | (557) | (123) | (354) | (85) | 34 | (528) |
Other impa irment | (310) | (120) | (18) | (140) | (588) | (32) | (4) | (26) | (68) | (130) |
Profit from associates and | ||||||||||
joint ventures | – | – | (17) | 67 | 50 | – | – | (24) | 118 | 94 |
Underlying profit/(loss) | ||||||||||
before taxation | 5,581 | 2,463 | (390) | (843) | 6,811 | 5,436 | 2,487 | (408) | (1,837) | 5,678 |
Restructuring | (179) | (170) | (3) | (89) | (441) | 32 | (60) | (4) | 18 | (14) |
Goodwill and other impa irment⁴ | – | – | – | – | – | – | – | – | (850) | (850) |
DVA | (24) | – | – | – | (24) | 17 | – | – | – | 17 |
Other items³ | – | (100) | – | (232) | (332) | 262 | – | – | – | 262 |
Reported profit/(loss) | ||||||||||
before taxation | 5,378 | 2,193 | (393) | (1,164) | 6,014 | 5,747 | 2,427 | (412) | (2,669) | 5,093 |
Total assets | 485,662 | 122,404 | 6,399 | 235,223 | 849,688 | 403,058 | 128,768 | 4,009 | 287,009 | 822,844 |
Of which: loans and | ||||||||||
advances to customers | 197,608 | 119,242 | 1,388 | 21,319 | 339,557 | 189,395 | 126,117 | 1,035 | 28,939 | 345,486 |
loans and advances | ||||||||||
to customers | 139,089 | 119,236 | 1,388 | 21,319 | 281,032 | 130,897 | 126,104 | 1,035 | 28,939 | 286,975 |
loans held at fair value | ||||||||||
through profit or loss | ||||||||||
(FVTPL) 1 | 58,519 | 6 | – | – | 58,525 | 58,498 | 13 | – | – | 58,511 |
Total liab il it ies | 476,502 | 220,501 | 5,277 | 96,124 798,404 | 464,968 | 200,263 | 3,096 | 104,164 | 772,491 | |
Of which: customer accounts 2 | 297,005 | 216,476 | 5,028 | 4,754 | 523,263 | 328,211 | 195,678 | 2,825 | 7,908 | 534,622 |
1
Loans held at FVTPL includes $51,441 mill
ion (2023: $51,299 m
ill
ion) of reverse repurchase agreements
2
Customer accounts includes $21,772 mill
ion (2023: $17,248 m
ill
ion) of FVTPL and $37,002 m
ill
ion (2023: $47,956 m
ill
ion) of repurchase agreements
3
Other items 2024 includes $100 mill
ion charge relat
ing to Korea equity linked securit
ies (ELS) portfol
io, $172 mill
ion pr
imar
ily relat
ing to recycling of FX translation
losses from reserves into P&L on the sale of Zimbabwe, $26 mill
ion loss on sale of Angola, $19 m
ill
ion loss on S
ierra Leone Partial exit and $15 mill
ion loss on the
Aviat
ion bus
iness disposal
4
Goodwill and other impa
irment
include $850 mill
ion
impa
irment charge relat
ing to the Group’s investment in its associate China Bohai Bank (Bohai)
Operating income by client segment
2024 | 2023 | |||||||||
Corporate & | Wealth & | Central & | Corporate & | Wealth & | Central & | |||||
Investment | Retail | other | Investment | Retail | other | |||||
Banking | Banking | Ventures | items | Total | Banking | Banking | Ventures | items | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Underlying versus reported: | ||||||||||
Underlying operating income | 11,818 | 7,816 | 183 | (121) | 19,696 | 11,218 | 7,106 | 156 | (1,102) | 17,378 |
Restructuring | 69 | 23 | – | 11 | 103 | 291 | 45 | – | 26 | 362 |
DVA | (24) | – | – | – | (24) | 17 | – | – | – | 17 |
Other items 1 | – | – | – | (232) | (232) | 262 | – | – | – | 262 |
Reported operating income | 11,863 | 7,839 | 183 | (342) | 19,543 | 11,788 | 7,151 | 156 | (1,076) | 18,019 |
Addit ional segmental income: | ||||||||||
Net interest income | 2,090 | 5,175 | 100 | (999) | 6,366 | 4,541 | 4,970 | 81 | (1,823) | 7,769 |
Net fees and commiss ion | ||||||||||
income | 1,938 | 1,855 | 52 | (111) | 3,734 | 1,753 | 1,538 | 43 | (82) | 3,252 |
Net trading and other income | 7,835 | 809 | 31 | 768 | 9,443 | 5,494 | 643 | 32 | 829 | 6,998 |
Reported operating income | 11,863 | 7,839 | 183 | (342) | 19,543 | 11,788 | 7,151 | 156 | (1,076) | 18,019 |
1
Other items 2024 includes $172 mill
ion pr
imar
ily relat
ing to recycling of FX translation losses from reserves into P&L on the sale of Zimbabwe, $26 mill
ion loss on sale
of Angola, $19 mill
ion loss on S
ierra Leone Partial exit and $15 mill
ion loss on the Av
iat
ion bus
iness disposal
2. Segmental informat
ion
continued
Financ
ial statements
Notes to the financial statements
300
Standard Chartered
– Annual Report 2024
Addit
ional segmental
informat
ion (reported)
| 2024 | |||||||||||
Hong | |||||||||||
Kong | Korea | China | Taiwan | Singapore | India | UAE | UK | US | Other | Group | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Net interest income | 790 | 723 | 410 | 177 | 462 | 646 | 369 | (1,002) | 540 | 3,251 | 6,366 |
Net fees and | |||||||||||
commiss ion income | 726 | 185 | 181 | 212 | 716 | 236 | 99 | 112 | 480 | 787 | 3,734 |
Net trading and | |||||||||||
other income | 3,281 | 177 | 736 | 188 | 1,395 | 441 | 369 | 1,168 | 268 | 1,420 | 9,443 |
Operating income | 4,797 | 1,085 | 1,327 | 577 | 2,573 | 1,323 | 837 | 278 | 1,288 | 5,458 | 19,543 |
| 2023 | |||||||||||
Net interest income | 1,946 | 684 | 520 | 154 | 937 | 654 | 390 | (930) | 170 | 3,244 | 7,769 |
Net fees and | |||||||||||
commiss ion income | 615 | 171 | 149 | 182 | 576 | 221 | 81 | 18 | 441 | 798 | 3,252 |
Net trading and | |||||||||||
other income | 2,052 | 216 | 487 | 214 | 929 | 330 | 330 | 1,277 | 263 | 900 | 6,998 |
Operating income | 4,613 | 1,071 | 1,156 | 550 | 2,442 | 1,205 | 801 | 365 | 874 | 4,942 | 18,019 |
Interest income for financ
ial assets held at e
ither fair value through other comprehensive income or amortised cost,
and interest expense on all financ
ial l
iab
il
it
ies held at amort
ised cost is recognised in profit or loss using the effective
interest method.
The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected
life of the financ
ial
instrument or, when appropriate, a shorter period, to the net carrying amount of the financ
ial
asset or financial l
iab
il
ity. When calculating the effective interest rate, the Group estimates cash flows consider
ing all
contractual terms of the financial
instrument (for example prepayment options) but does not consider future credit losses.
The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective
interest rate, transaction costs and all other premiums or discounts. For floating-rate financ
ial
instruments, period
ic
re-estimat
ion of cash flows that reflect the movements
in the market rates of interest alters the effective interest rate.
Where the estimates of cash flows have been revised, the carrying amount of the financ
ial asset or l
iab
il
ity is adjusted to
reflect the actual and revised cash flows, discounted at the instruments orig
inal effect
ive interest rate. The adjustment is
recognised as interest income or expense in the period in which the revis
ion
is made as long as the change in estimates is
not due to credit issues.
Interest income for financ
ial assets that are e
ither held at fair value through other comprehensive income or amortised
cost that have become credit-impa
ired subsequent to
in
it
ial recognit
ion (stage 3) and have had amounts wr
itten off,
is recognised using the credit adjusted effective interest rate. This rate is calculated in the same manner as the effective
interest rate except that expected credit losses are included in the expected cash flows. Interest income is therefore
recognised on the amortised cost of the financ
ial asset
includ
ing expected cred
it losses. Should the credit risk on a
stage 3 financial asset
improve such that the financ
ial asset
is no longer considered credit-impa
ired,
interest income
recognit
ion reverts to a computat
ion based on the rehabil
itated gross carry
ing value of the financ
2024 | 2023 | |
$mill ion | $mill ion | |
Balances at central banks | 2,520 | 2,833 |
Loans and advances to banks | 2,368 | 2,095 |
Loans and advances to customers | 16,179 | 15,518 |
Debt securit ies | 5,165 | 5,005 |
Other elig ible b ills | 1,495 | 1,596 |
Accrued on impa ired assets (d iscount unwind) | 135 | 180 |
Interest income | 27,862 | 27,227 |
Of which: financ ial instruments held at fair value through other comprehensive income | 3,773 | 3,445 |
Deposits by banks | 806 | 796 |
Customer accounts 1 | 16,276 | 14,292 |
Debt securit ies in issue | 3,610 | 3,367 |
Subordinated liab il it ies and other borrowed funds | 744 | 951 |
Interest expense on IFRS 16 lease liab il it ies | 60 | 52 |
Interest expense | 21,496 | 19,458 |
Net interest income | 6,366 | 7,769 |
1
Deposit insurance premiums of $147 mill
ion have been reclass
if
ied from customer accounts related
interest expense to general operating expenses in 2024.
The prior year has not been reclassif
ied as
Financ
ial statements
Standard Chartered
– Annual Report 2024
301
ion
The Group can act as trustee or in other Fiduc
iary capac
it
ies that result
in the holding or placing of assets on behalf of
ind
iv
iduals, trusts, retirement benefit plans and other inst
itut
ions. The assets and income aris
ing thereon are excluded from
these financial statements, as they are not assets and
The Group applies the following practical expedients:
•
informat
ion on amounts of transact
ion price allocated to unsatisf
ied (or part
ially unsatisf
ied) performance obl
igat
ions at
the end of the reporting period is not disclosed as almost all fee-earning contracts have an expected duration of less than
one year
•
promised considerat
ion
is not adjusted for the effects of a sign
ificant financing component as the per
iod between the Group
provid
ing a serv
ice and the customer paying for it is expected to be less than one year
•
incremental costs of obtain
ing a fee-earn
ing contract are recognised upfront in ‘Fees and commiss
ion expense’ rather than
amortised, if the expected term of the contract is less than one year
The determinat
ion of the serv
ices performed for the customer, the transaction price, and when the services are completed
depends on the nature of the product with the customer. The main considerat
ions on
income recognit
ion by product are
as follows:
Transaction Banking
The Group recognises fee income associated with transactional trade and cash management at the point in time the service
is provided. The Group recognises income associated with trade contingent risk exposures (such as letters of credit and
guarantees) over the period in which the service is provided.
Payment of fees is usually received at the same time the service is provided. In some cases, letters of credit and guarantees
issued by the Group have annual upfront premiums, which are amortised on a straight-line basis to fee income over the year.
Global Markets
The Group recognises fee income at the point in time the service is provided. Fee income is recognised for a sign
ificant non-
lending service when the transaction has been completed and the terms of the contract with the customer entitle the Group to
the fee. This includes fees such as structuring and advisory fees. Fees are usually received shortly after the service is provided.
Syndicat
ion fees are recogn
ised when the syndicat
ion
is complete defined as achiev
ing the final approved hold pos
it
ion.
Fees are generally received before completion of the syndicat
ion, or w
ith
in 12 months of the transact
ion date.
Securit
ies serv
ices include custody services, fund accounting and admin
istrat
ion, and broker clearing. Fees are recognised over
the period the custody or fund management services are provided, or as and when broker services are requested.
Wealth Management
Upfront considerat
ion on bancassurance agreements
is amortised straight-line over the contractual term. Commiss
ions for
bancassurance activ
it
ies are recorded as they are earned through sales of third-party insurance products to customers.
These commiss
ions are rece
ived with
in a short t
ime frame of the commiss
ion be
ing earned. Target-linked fees are accrued
based on percentage of the target achieved, provided it is assessed as highly probable that the target will be met.
Cash payment is received at a contractually specif
ied date after ach
ievement of a target has been confirmed.
Upfront and trail
ing comm
iss
ions for managed
investment placements are recorded as they are confirmed. Income from
these activ
it
ies is relatively even throughout the period, and cash is usually received with
in a short t
ime frame after the
commiss
ion
is earned.
Retail Products
The Group recognises most income at the point in time the Group is entitled to the fee, since most services are provided at the
time of the customer’s request.
In most of our retail markets there are circumstances under which fees are waived, income recognit
ion
is adjusted to reflect
customer’s intent to pay the annual fee. The Group defers the fair value of reward points on its credit card reward programmes,
and recognises income and costs associated with fulfill
ing the reward at the t
ime of redemption.
2024 | 2023 | |
$mill ion | $mill ion | |
Fees and commiss ions income | 4,623 | 4,067 |
Of which: | ||
Financ ial instruments that are not fair valued through profit or loss | 1,436 | 1,374 |
Trust and other fiduciary act iv it ies | 632 | 508 |
Fees and commiss ions expense | (889) | (815) |
Of which: | ||
Financ ial instruments that are not fair valued through profit or loss | (245) | (169) |
Trust and other fiduciary act iv it ies | (50) | (52) |
Net fees and commiss ion | 3,734 | 3,252 |
4. Net fees and commiss
ion
continued
Financ
ial statements
Notes to the financial statements
302
Standard Chartered
– Annual Report 2024
| 2024 | 2023 | |||||||||
Corporate & | Wealth & | Central & | Corporate & | Wealth & | Central & | |||||
Investment | Retail | other | Investment | Retail | other | |||||
Banking | Banking | Ventures | items | Total | Banking | Banking | Ventures | items | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Transaction Services | 1,456 | 26 | – | – | 1,482 | 1,415 | 25 | – | – | 1,440 |
Payments and Liqu id ity | 634 | – | – | – | 634 | 567 | – | – | – | 567 |
Securit ies Serv ices | 254 | – | – | – | 254 | 271 | – | – | – | 271 |
Trade & Working Capital | 568 | 26 | – | – | 594 | 577 | 25 | – | – | 602 |
Global Banking | 937 | – | – | – | 937 | 694 | – | – | – | 694 |
Lending & Financ ial Solut ions | 633 | – | – | – | 633 | 499 | – | – | – | 499 |
Capital Market & Advisory | 304 | – | – | – | 304 | 195 | – | – | – | 195 |
Global Markets | 36 | – | – | – | 36 | 55 | – | – | – | 55 |
Macro Trading | (3) | – | – | – | (3) | (20) | – | – | – | (20) |
Credit Trading | 40 | – | – | – | 40 | 69 | – | – | – | 69 |
Valuation & Other Adj | (1) | – | – | – | (1) | 6 | – | – | – | 6 |
Wealth solutions | – | 1,598 | 2 | – | 1,600 | – | 1,225 | – | – | 1,225 |
Investment Products | – | 929 | 2 | – | 931 | – | 633 | – | – | 633 |
Bancassurance | – | 669 | – | – | 669 | – | 592 | – | – | 592 |
CCPL & Other Unsecured | ||||||||||
Lending | – | 321 | 42 | – | 363 | – | 372 | 32 | – | 404 |
Deposits | – | 143 | 2 | – | 145 | – | 163 | – | – | 163 |
Mortgages & Other Secured | ||||||||||
Lending | – | 79 | – | – | 79 | – | 70 | – | – | 70 |
Treasury | – | – | – | (22) | (22) | – | – | – | (15) | (15) |
Other Products | – | 1 | 32 | (30) | 3 | – | 2 | 35 | (6) | 31 |
Fees and commiss ion income | 2,429 | 2,168 | 78 | (52) | 4,623 | 2,164 | 1,857 | 67 | (21) | 4,067 |
Fees and commiss ion expense | (491) | (313) | (26) | (59) | (889) | (411) | (319) | (24) | (61) | (815) |
Net fees and commiss ion | 1,938 | 1,855 | 52 | (111) | 3,734 | 1,753 | 1,538 | 43 | (82) | 3,252 |
Upfront bancassurance considerat
ion amounts are amort
ised on a straight-line basis over the contractual period to which the
considerat
ion relates. Deferred
income on the balance sheet in respect of these activ
it
ies is $419 mill
ion (31 December 2023:
$474 mill
ion). Follow
ing renegotiat
ion of the contract
in 2023, the life of the contract was extended for a further 3 years and
the income will be earned evenly till June 2032. For the twelve months ended 31 December 2024, $56 mill
ion of fee
income was
released from deferred income (31 December 2023: $75 mill
Gains and losses aris
ing from changes
in the fair value of financ
ial
instruments held at fair value through profit or loss are
recorded in net trading income in the period in which they arise. This includes contractual interest receivable or payable.
When the in
it
ial fair value of a financ
ial
instrument held at fair value through profit or loss relies on unobservable inputs,
the difference between the in
it
ial valuation and the transaction price is amortised to net trading income as the inputs
become observable or over the life of the instrument, whichever is shorter. Any unamortised ‘day one’ gain is released to
net trading income if the transaction is terminated.
Income is recognised from the sale and purchase of trading posit
ions, marg
ins on market making and customer business
2024 | 2023 | |
$mill ion | $mill ion | |
Net trading income | 9,615 | 6,292 |
Sign ificant items with in net trad ing income include: | ||
Gains on instruments held for trading 1 | 7,418 | 4,625 |
Gains on financ ial assets mandator ily at fair value through profit or loss | 5,392 | 4,270 |
Gains on financ ial assets des ignated at fair value through profit or loss | 8 | 10 |
Losses on financial l iab il it ies des ignated at fair value through profit or loss | (3,252) | (2,649) |
1
Includes $583 mill
ion ga
in (31 December 2023: $299 mill
ion loss) from the translat
ion of foreign currency monetary assets and liab
il
it
ies, out of wh
ich $157 mill
ion
Financ
ial statements
Standard Chartered
– Annual Report 2024
303
2024 | 2023 | |
$mill ion | $mill ion | |
Other operating income includes: | ||
Rental income from operating lease assets | 40 | 375 |
Net loss on disposal of fair value through other comprehensive income debt instruments | (237) | (115) |
Net loss on amortized cost financ ial assets | (27) | (94) |
Net (loss)/gain on sale of businesses¹ | (210) | 351 |
Div idend income | 5 | 15 |
Other² | 257 | 174 |
Other operating income | (172) | 706 |
1
2024 includes loss on disposal of Africa subsid
iar
ies $217 mill
ion (SCB Z
imbabwe Lim
ited: $172 m
ill
ion, SCB Angola S.A.: $26 m
ill
ion and SCB S
ierra Leone Lim
ited:
$19 mill
ion) of wh
ich $246 mill
ion relates to real
izat
ion of translat
ion adjustment loss, partly offset by gain of $17 mill
ion from d
isposal of Venture entit
ies (Shoal
lim
ited and Autumn l
ife Pte. Ltd), Total cash considerat
ion rece
ived was $74 mill
ion (SCB Z
imbabwe Lim
ited: $24 m
ill
ion, SCB Angola S.A.: $10 m
ill
ion, SCB S
ierra
Leone Lim
ited: $17 m
ill
ion, Shoal L
im
ited: $17 m
ill
ion and Autumn l
ife Pte. Ltd: $6 mill
ion). 2023
includes $309 mill
ion ga
in from the sale of the aviat
ion finance
leasing business, $18 mill
ion from sale of assoc
iate (Metaco SA), $16 mill
ion ga
in from sale of subsid
iary ($9 m
ill
ion from Cardspal and $7 m
ill
ion from Kozag
i)
and $8 mill
ion ga
in from the sale of Jordan one of Africa subsid
iary
2
2024 includes IAS 29 adjustment Ghana hyperinflat
ionary
impact ($139 mill
ion), Research and development expend
iture credit ($32 mill
ion), Rebates/
incent
ives
received from VISA card ($25 mill
ion), Ga
in on disposal of property plant and equipment ($23 mill
ion), Mark-to-market ga
ins from deferred compensation income
($17 mill
ion), and
immater
ial balances across other geograph
ies. 2023 mainly includes $59 mill
ion tax cred
it against Research & Development Expenditure,
$38 mill
ion ga
in on disposal of premises, $21 mill
ion
income from VISA sponsorship in Hong Kong, $10 mill
ion from ga
in on lease modif
icat
ion in Hong Kong and
$16 mill
ion
2024 | 2023 | |
$mill ion | $mill ion | |
Staff costs: | ||
Wages and salaries | 6,567 | 6,459 |
Social security costs | 246 | 233 |
Other pension costs (Note 30) | 451 | 431 |
Share-based payment costs (Note 31) | 334 | 226 |
Other staff costs | 912 | 907 |
8,510 | 8,256 | |
Premises and equipment expenses: | 401 | 422 |
General admin istrat ive expenses: | ||
UK bank levy | 90 | 111 |
Other general admin istrat ive expenses | 2,375 | 1,691 |
2,465 | 1,802 | |
Depreciat ion and amort isat ion: | ||
Property, plant and equipment: | ||
Premises | 299 | 315 |
Equipment | 128 | 103 |
Operating lease assets | – | 27 |
427 | 445 | |
Intangibles: | ||
Software | 695 | 625 |
Acquired on business combinat ions | 4 | 1 |
1,126 | 1,071 | |
Total operating expenses | 12,502 | 11,551 |
Other staff costs include redundancy expenses of $186 mill
ion (31 December 2023: $106 m
ill
ion). Further costs
in this category
include train
ing, travel costs and other staff-related costs.
Details of directors’ pay, benefits, pensions and benefits and interests in shares are disclosed in the Directors’ remuneration
report (page 143).
Transactions with directors, officers and other related parties are disclosed in Note 36.
Operating expenses include research expenditures of $1,187 mill
ion (31 December 2023: $996 m
ill
ion), wh
ich was recognized as
an expense in the year
The UK bank levy is applied to chargeable equity and liab
il
it
ies on the balance sheet of UK operat
ions. Key exclusions from
chargeable equity and liab
il
it
ies
include Tier 1 capital, insured or guaranteed retail deposits, repos secured on certain
sovereign debt and liab
il
it
ies subject to nett
ing. The rates are 0.10 per cent for short-term liab
il
it
ies and0.05 per cent for
long-term liab
il
it
Financ
ial statements
Notes to the financial statements
304
Standard Chartered
– Annual Report 2024
irment
Sign
ificant account
ing estimates and judgements
The Group’s expected credit loss (ECL) calculations are outputs of complex models with a number of underlying
assumptions. The sign
ificant judgements
in determin
ing expected cred
it loss include:
•
The Group’s criter
ia for assess
ing if there has been a sign
ificant
increase in credit risk;
•
Development of expected credit loss models, includ
ing the cho
ice of inputs relating to macroeconomic variables;
•
Determin
ing est
imates of forward looking macroeconomic forecasts;
•
Evaluation of management overlays and post-model adjustments;
•
Determinat
ion of probab
il
ity we
ight
ings for Stage 3
ind
iv
idually assessed provis
ions
The calculation of credit impa
irment prov
is
ions also
involves expert credit judgement to be applied by the credit risk
management team based upon counterparty informat
ion they rece
ive from various sources includ
ing relat
ionsh
ip
managers and on external market informat
ion. Deta
ils on the approach for determin
ing expected cred
it loss can be found
in the credit risk section, under IFRS 9 Methodology (page 236).
Estimates of forecasts of key macroeconomic variables underlying the expected credit loss calculation can be found with
in
the Risk review, Key assumptions and judgements in determin
ing expected cred
it loss (page 238).
Expected credit losses
An ECL represents the present value of expected cash shortfalls over the residual term of a financ
ial asset, undrawn
commitment or financ
ial guarantee.
A cash shortfall is the difference between the cash flows that are due in accordance with the contractual terms of the
instrument and the cash flows that the Group expects to receive over the contractual life of the instrument.
Measurement
ECL are computed as unbiased, probabil
ity-we
ighted amounts which are determined by evaluating a range of reasonably
possible outcomes, the time value of money, and consider
ing all reasonable and supportable
informat
ion
includ
ing that
which is forward-looking.
For material portfolios, the estimate of expected cash shortfalls is determined by multiply
ing the probab
il
ity of default (PD)
with the loss given default (LGD) with the expected exposure at the time of default (EAD). There may be multiple default
events over the lifet
ime of an
instrument. Further details on the components of PD, LGD and EAD are disclosed in the Credit
risk section. For less material Retail Banking loan portfolios, the Group has adopted less sophist
icated approaches based
on histor
ical roll rates or loss rates.
Forward-looking economic assumptions are incorporated into the PD, LGD and EAD where relevant and where they
influence credit risk, such as GDP growth rates, interest rates, house price ind
ices and commod
ity prices among others.
These assumptions are incorporated using the Group’s most likely forecast for a range of macroeconomic assumptions.
These forecasts are determined using all reasonable and supportable informat
ion, wh
ich includes both internally
developed forecasts and those available externally, and are consistent with those used for budgeting, forecasting and
capital planning.
To account for the potential non-linear
ity
in credit losses, multiple forward-looking scenarios are incorporated into the
range of reasonably possible outcomes for all material portfolios. For example, where there is a greater risk of downside
credit losses than upside gains, multiple forward-looking economic scenarios are incorporated into the range of
reasonably possible outcomes, both in respect of determin
ing the PD (and where relevant, the LGD and EAD) and
in
determin
ing the overall ECL amounts. These scenar
ios are determined using a Monte Carlo approach centred around
the Group’s most likely forecast of macroeconomic assumptions.
The period over which cash shortfalls are determined is generally lim
ited to the max
imum contractual period for which
the Group is exposed to credit risk. However, for certain revolving credit facil
it
ies, which include credit cards or overdrafts,
the Group’s exposure to credit risk is not lim
ited to the contractual per
iod. For these instruments, the Group estimates
an appropriate life based on the period that the Group is exposed to credit risk, which includes the effect of credit risk
management actions such as the withdrawal of undrawn facil
it
ies.
For credit-impa
ired financial
instruments, the estimate of cash shortfalls may require the use of expert credit judgement.
8. Credit impa
irment
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
305
The estimate of expected cash shortfalls on a collateralised financ
ial
instrument reflects the amount and tim
ing of cash
flows that are expected from foreclosure on the collateral less the costs of obtain
ing and sell
ing the collateral, regardless
of whether foreclosure is deemed probable.
Cash flows from unfunded credit enhancements held are included with
in the measurement of expected cred
it losses if
they are part of, or integral to, the contractual terms of the instrument (this includes financ
ial guarantees, unfunded r
isk
partic
ipat
ions and other non-derivat
ive cred
it insurance). Although non-integral credit enhancements do not impact the
measurement of expected credit losses, a reimbursement asset is recognised to the extent of the ECL recorded.
Cash shortfalls are discounted using the effective interest rate (or credit-adjusted effective interest rate for purchased or
orig
inated cred
it-impa
ired
instruments (POCI)) on the financ
ial
instrument as calculated at in
it
ial recognit
ion or
if the
instrument has a variable interest rate, the current effective interest rate determined under the contract.
Instruments | Location of expected credit loss provis ions |
Financ ial assets held at amort ised cost | Loss provis ions: netted aga inst gross carrying value 1 |
Financ ial assets held FVOCI – Debt instruments | Other comprehensive income (FVOCI expected credit loss reserve) 2 |
Loan commitments | Provis ions for l iab il it ies and charges 3 |
Financ ial guarantees | Provis ions for l iab il it ies and charges 3 |
1
Purchased or orig
inated cred
it-impa
ired assets do not attract an expected cred
it loss provis
ion on
in
it
ial recognit
ion. An expected cred
it loss provis
ion w
ill
be recognised only if there is an increase in expected credit losses from that considered at in
it
ial recognit
ion
2
Debt and treasury securit
ies class
if
ied as fa
ir value through other comprehensive income (FVOCI) are held at fair value on the face of the balance sheet.
The expected credit loss attributed to these instruments is held as a separate reserve with
in other comprehens
ive income (OCI) and is recycled to the profit
and loss account along with any fair value measurement gains or losses held with
in FVOCI when the appl
icable instruments are derecognised
3
Expected credit loss on loan commitments and financ
ial guarantees
is recognised as a liab
il
ity provis
ion. Where a financial
instrument includes both a loan
(i.e. financ
ial asset component) and an undrawn comm
itment (i.e. loan commitment component), and it is not possible to separately ident
ify the expected
credit loss on these components, expected credit loss amounts on the loan commitment are recognised together with expected credit loss amounts on
the financial asset. To the extent the comb
ined expected credit loss exceeds the gross carrying amount of the financ
ial asset, the expected cred
it loss is
recognised as a liab
il
ity provis
ion
Recognit
ion
12 months expected credit losses (stage 1)
Expected credit losses are recognised at the time of in
it
ial recognit
ion of a financial
instrument and represent the
lifet
ime cash shortfalls ar
is
ing from poss
ible default events up to 12 months into the future from the balance sheet date.
Expected credit losses continue to be determined on this basis until there is either a sign
ificant
increase in the credit risk of
an instrument or the instrument becomes credit-impa
ired. If an
instrument is no longer considered to exhib
it a s
ign
ificant
increase in credit risk, expected credit losses will revert to being determined on a 12-month basis.
Sign
ificant
increase in credit risk (Stage 2)
Sign
ificant
increase in credit risk is assessed by comparing the risk of default of an exposure at the reporting date to the risk
of default at orig
inat
ion (after taking into account the passage of time). Sign
ificant does not mean stat
ist
ically s
ign
ificant
nor is it assessed in the context of changes in expected credit loss. Whether a change in the risk of default is sign
ificant or
not is assessed using a number of quantitat
ive and qual
itat
ive factors, the we
ight of which depends on the type of product
and counterparty. Financ
ial assets that are 30 or more days past due and not cred
it-impa
ired w
ill always be considered to
have experienced a sign
ificant
increase in credit risk. For less material portfolios where a loss rate or roll rate approach is
applied to compute expected credit loss, sign
ificant
increase in credit risk is primar
ily based on 30 days past due.
Quantitat
ive factors
include an assessment of whether there has been sign
ificant
increase in the forward-looking
probabil
ity of default (PD) s
ince orig
inat
ion. A forward-looking PD is one that is adjusted for future economic condit
ions
to the extent these are correlated to changes in credit risk. We compare the residual lifet
ime PD at the balance sheet
date to the residual lifet
ime PD that was expected at the t
ime of orig
inat
ion for the same point in the term structure
and determine whether both the absolute and relative change between the two exceeds predetermined thresholds.
To the extent that the differences between the measures of default outlined exceed the defined thresholds, the instrument
is considered to have experienced a sign
ificant
increase in credit risk (see page 244 to 245).
Qualitat
ive factors assessed
include those linked to current credit risk management processes, such as lending placed on
non-purely precautionary early alert (and subject to closer monitor
ing).
A non-purely precautionary early alert account is one which exhib
its r
isk or potential weaknesses of a material nature
requir
ing closer mon
itor
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 operat
ing results, liqu
id
ity strain and overdue balances among other factors.
8. Credit impa
irment
continued
Financ
ial statements
Notes to the financial statements
306
Standard Chartered
– Annual Report 2024
Credit-impa
ired (or defaulted) exposures (Stage 3)
Financ
ial assets that are cred
it-impa
ired (or
in default) represent those that are at least 90 days past due in respect of
princ
ipal and/or
interest. Financ
ial assets are also cons
idered to be credit-impa
ired where the obl
igors are unlikely to pay
on the occurrence of one or more observable events that have a detrimental impact on the estimated future cash flows
of the financial asset. It may not be poss
ible to ident
ify a s
ingle discrete event but instead the combined effect of several
events may cause financial assets to become cred
it-impa
ired.
•
Evidence that a financ
ial asset
is credit-impa
ired
includes observable data about the following events:
•
Sign
ificant financial d
iff
iculty of the
issuer or borrower;
•
Breach of contract such as default or a past due event;
•
For economic or contractual reasons relating to the borrower’s financ
ial d
iff
iculty, the lenders of the borrower have
granted the borrower concession/s that lenders would not otherwise consider. This would include forbearance actions
(page 226);
•
Pending or actual bankruptcy or other financ
ial reorgan
isat
ion to avo
id or delay discharge of the borrower’s
obligat
ion/s;
•
The disappearance of an active market for the applicable financ
ial asset due to financial d
iff
icult
ies of the borrower;
•
Purchase or orig
inat
ion of a financ
ial asset at a deep d
iscount that reflects incurred credit losses
Lending commitments to a credit-impa
ired obl
igor that have not yet been drawn down are included to the extent that the
commitment cannot be withdrawn. Loss provis
ions aga
inst credit-impa
ired financial assets are determ
ined based on an
assessment of the present value of expected cash shortfalls (discounted at the instrument’s orig
inal effect
ive interest rate)
under a range of scenarios, includ
ing the real
isat
ion of any collateral held where appropr
iate. The Group’s defin
it
ion of
default is aligned with the regulatory defin
it
ion of default as set out in the UK’s onshored capital requirements regulations
(Art 178).
Expert credit judgement
For Corporate & Investment Banking and Private Banking, borrowers are graded by credit risk management on a credit
grading (CG) scale from CG1 to CG14. Once a borrower starts to exhib
it cred
it deteriorat
ion,
it will move along the credit
grading scale in the performing book and when it is classif
ied as CG12 (wh
ich is a qualitat
ive tr
igger for sign
ificant
increase
in credit risk (see page 245)the credit assessment and oversight of the loan will normally be performed by Stressed Assets
Risk (SAR).
Borrowers graded CG12 exhib
it well-defined weaknesses
in areas such as management and/or performance but there is
no current expectation of a loss of princ
ipal or
interest in the likely scenario. Where the impa
irment assessment
ind
icates
that there will be a loss of princ
ipal on a loan
in the likely scenario, the borrower is graded a CG14 while borrowers of other
credit-impa
ired loans are graded CG13. Instruments graded CG13 or CG14 are regarded as stage 3.
For ind
iv
idually sign
ificant financial assets w
ith
in stage 3, SAR w
ill consider all judgements that have an impact on the
expected future cash flows of the asset. These include: the business prospects, industry and geopolit
ical cl
imate of
the customer, quality of realisable value of collateral, the Group’s legal posit
ion relat
ive to other claimants and any
renegotiat
ion/forbearance/mod
if
icat
ion options. The future cash flow calculation involves sign
ificant judgements
and estimates. As new informat
ion becomes ava
ilable and further negotiat
ions/ forbearance measures are taken the
estimates of the future cash flows will be revised, and will have an impact on the future cash flow analysis.
For financial assets wh
ich are not ind
iv
idually sign
ificant, such as the Reta
il Banking portfolio or small business loans, which
comprise a large number of homogenous loans that share sim
ilar character
ist
ics, stat
ist
ical est
imates and techniques are
used, as well as credit scoring analysis.
Consumer and Business Banking clients are considered credit-impa
ired where they are more 90 days past due, or
if the
borrower files for bankruptcy or other forbearance programme, the borrower is deceased or the business is closed in
the case of a small business, or if the borrower surrenders the collateral, or there is an ident
ified fraud on the account.
Addit
ionally,
if the account is unsecured and the borrower has other credit accounts with the Group that are considered
credit-impa
ired, the account may be also be cred
it-impa
ired.
Techniques used to compute impa
irment amounts use models wh
ich analyse histor
ical repayment and default rates over
a time horizon. Where various models are used, judgement is required to analyse the available informat
ion prov
ided and
select the appropriate model or combinat
ion of models to use.
Expert credit judgement is also applied to determine whether any post-model adjustments are required for credit risk
elements which are not captured by the models.
Modif
ied financial
instruments
Where the orig
inal contractual terms of a financial asset have been mod
if
ied for cred
it reasons and the instrument has
not been derecognised (an instrument is derecognised when a modif
icat
ion results in a change in cash flows that the
Group would consider substantial), the resulting modif
icat
ion loss is recognised with
in cred
it impa
irment
in the income
statement with a corresponding decrease in the gross carrying value of the asset. If the modif
icat
ion involved a concession
that the bank would not otherwise consider, the instrument is considered to be credit-impa
ired and
is considered forborne.
Expected credit loss for modif
ied financial assets that have not been derecogn
ised and are not considered to be
credit-impa
ired w
ill be recognised on a 12-month basis, or a lifet
ime bas
is, if there is a sign
ificant
increase in credit risk.
These assets are assessed (by comparison to the orig
inat
ion date) to determine whether there has been a sign
ificant
increase in credit risk subsequent to the modif
icat
ion. Although loans may be modif
ied for non-cred
it reasons, a sign
ificant
increase in credit risk may occur. In addit
ion to the recogn
it
ion of mod
if
icat
ion gains and losses, the revised carrying value
of modif
ied financial assets w
ill impact the calculation of expected credit losses, with any increase or decrease in expected
credit loss recognised with
in
impa
irment.
8. Credit impa
irment
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
307
Forborne loans
Forborne loans are those loans that have been modif
ied
in response to a customer’s financ
ial d
iff
icult
ies. Forbearance
strategies assist clients who are temporarily in financ
ial d
istress and are unable to meet their orig
inal contractual
repayment terms. Forbearance can be in
it
iated by the client, the Group or a third-party includ
ing government sponsored
programmes or a conglomerate of credit inst
itut
ions. Forbearance may include debt restructuring such as new repayment
schedules, payment deferrals, tenor extensions, interest only payments, lower interest rates, forgiveness of princ
ipal,
interest or fees, or relaxation of loan covenants.
Forborne loans that have been modif
ied (and not derecogn
ised) on terms that are not consistent with those readily
available in the market and/or where we have granted a concession compared to the orig
inal terms of the loans are
considered credit-impa
ired
if there is a detrimental impact on cash flows. The modif
icat
ion loss (see Classif
icat
ion and
measurement – Modif
icat
ions) is recognised in the profit or loss with
in cred
it impa
irment and the gross carry
ing value of
the loan reduced by the same amount. The modif
ied loan
is disclosed as ‘Loans subject to forbearance – credit-impa
ired’.
Loans that have been subject to a forbearance modif
icat
ion, but which are not considered credit-impa
ired (not class
if
ied
as CG13 or CG14), are disclosed as ‘Forborne – not credit-impa
ired’. Th
is may include amendments to covenants with
in the
contractual terms.
Write-offs of credit-impa
ired
instruments and reversal of impa
irment
To the extent a financial debt
instrument is considered irrecoverable, the applicable portion of the gross carrying value is
written off against the related loan provis
ion. Such loans are wr
itten off after all the necessary procedures have been
completed, it is decided that there is no realist
ic probab
il
ity of recovery and the amount of the loss has been determ
ined.
Subsequent recoveries of amounts previously written off decrease the amount of the provis
ion for cred
it impa
irment
in the
income statement.
Loss provis
ions on purchased or or
ig
inated cred
it-impa
ired
instruments (POCI)
The Group measures expected credit loss on a lifet
ime bas
is for POCI instruments throughout the life of the instrument.
However, expected credit loss is not recognised in a separate loss provis
ion on
in
it
ial recognit
ion for POCI
instruments as
the lifet
ime expected cred
it loss is inherent with
in the gross carry
ing amount of the instruments. The Group recognises
the change in lifet
ime expected cred
it losses aris
ing subsequent to
in
it
ial recognit
ion
in the income statement and the
cumulative change as a loss provis
ion. Where l
ifet
ime expected cred
it losses on POCI instruments are less than those at
in
it
ial recognit
ion, then the favourable d
ifferences are recognised as impa
irment ga
ins in the income statement (and as
impa
irment loss where the expected cred
it losses are greater).
Improvement in credit risk/curing
For financial assets that are cred
it-impa
ired (stage 3), a transfer to stage 2 or stage 1
is only permitted where the
instrument is no longer considered to be credit-impa
ired. An
instrument will no longer be considered credit-impa
ired
when there is no shortfall of cash flows compared to the orig
inal contractual terms.
For financial assets w
ith
in stage 2, these can only be transferred to stage 1 when they are no longer cons
idered to have
experienced a sign
ificant
increase in credit risk.
Where sign
ificant
increase in credit risk was determined using quantitat
ive measures, the
instruments will automatically
transfer back to stage 1 when the orig
inal PD based transfer cr
iter
ia are no longer met. Where
instruments were
transferred to stage 2 due to an assessment of qualitat
ive factors, the
issues that led to the reclassif
icat
ion must be
cured before the instruments can be reclassif
ied to stage 1. Th
is includes instances where management actions led to
instruments being classif
ied as stage 2, requ
ir
ing that act
ion to be resolved before loans are reclassif
ied to stage 1.
A forborne loan can only be removed from being disclosed as forborne if the loan is performing (stage 1 or 2) and a further
two-year probation period is met.
In order for a forborne loan to become performing, the following criter
ia have to be sat
isf
ied:
•
At least a year has passed with no default based upon the forborne contract terms
•
The customer is likely to repay its obligat
ions
in full without realis
ing secur
ity
•
The customer has no accumulated impa
irment aga
inst amount outstanding (except for ECL)
Subsequent to the criter
ia above, a further two-year probat
ion period has to be fulfilled, whereby regular payments are
2024 | 2023 | |
$mill ion | $mill ion | |
Net credit impa irment on loans and advances to banks and customers | 590 | 606 |
Net credit impa irment on debt secur it ies 1 | (58) | (50) |
Net credit impa irment relat ing to financ ial guarantees and loan comm itments | 18 | (48) |
Net credit impa irment relat ing to other financ ial assets | (3) | – |
Credit impa irment 1 | 547 | 508 |
1
Includes impa
irment release of $14 m
ill
ion (2023: $1 m
ill
ion charge) on or
ig
inated cred
it-impa
ired debt secur
it
Financ
ial statements
Notes to the financial statements
308
Standard Chartered
– Annual Report 2024
irment
2024 | 2023 | |
$mill ion | $mill ion | |
Impairment of property, plant and equipment (Note 18) | 11 | 12 |
Impairment of other intang ible assets (Note 17) | 561 | 112 |
Other | 16 | 884¹ |
Goodwill, fixed assets and other impa irment | 588 | 1,008 |
1
Includes $850 mill
ion
impa
irment charge relat
ing to the Group’s investment in its associate China Bohai Bank (Bohai), reflecting Bohai’s lower reported net profit
in 2023, as well as banking industry challenges and property market uncertaint
ies
in China, that may impact Bohai’s future profitab
il
Income tax payable on profits is based on the applicable tax law in each jur
isd
ict
ion and
is recognised as an expense in
the period in which profits arise.
Deferred tax is provided on temporary differences aris
ing between the tax bases of assets and l
iab
il
it
ies and the
ir carrying
amounts in the consolidated financ
ial statements. Deferred tax
is determined using tax rates (and laws) that have been
enacted or substantively enacted as at the balance sheet date, and that are expected to apply when the related deferred
tax asset is realised or the deferred income tax liab
il
ity is settled.
Deferred tax assets are recognised where it is probable that future taxable profit will be available against which the
temporary differences can be util
ised. Where perm
itted, deferred tax assets and liab
il
it
ies are offset on an ent
ity basis
and not by component of deferred taxation.
Current and deferred tax relating to items which are charged or credited directly to equity, is credited or charged directly
to equity and is subsequently recognised in the income statement together with the current or deferred gain or loss.
Other accounting estimates and judgements
•
Determin
ing the Group’s tax charge for the year
involves estimat
ion and judgement, wh
ich includes an interpretat
ion of
local tax laws and an assessment of whether the tax authorit
ies w
ill accept the posit
ion taken. These judgements take
account of external advice where appropriate, and the Group’s view on settling with the relevant tax authorit
ies
•
The Group provides for current tax liab
il
it
ies at the best est
imate of the amount that is expected to be paid to the tax
authorit
ies where an outflow
is probable. In making its estimates the Group assumes that the tax authorit
ies w
ill
examine all the amounts reported to them and have full knowledge of all relevant informat
ion
•
The recoverabil
ity of the Group’s deferred tax assets
is based on management’s judgement of the availab
il
ity of future
taxable profits against which the deferred tax assets will be util
ised. In prepar
ing management forecasts the effect of
applicable laws and regulations relevant to the util
isat
The following table provides analysis of taxation charge in the year:
2024 | 2023 | |
$mill ion | $mill ion | |
The charge for taxation based upon the profit for the year comprises: | ||
Current tax: | ||
United Kingdom corporation tax at 25 per cent (2023: 23.5 per cent): | ||
Current tax charge on income for the year | 16 | (48) |
Adjustments in respect of prior years (includ ing double tax rel ief) | 1 | 14 |
Foreign tax: | ||
Current tax charge on income for the year | 1,752 | 1,695 |
Adjustments in respect of prior years | (8) | (11) |
1,761 | 1,650 | |
Deferred tax: | ||
Orig inat ion/reversal of temporary differences | 198 | (22) |
Adjustments in respect of prior years | 13 | 3 |
211 | (19) | |
Tax on profits on ordinary activ it ies | 1,972 | 1,631 |
Effective tax rate | 32.8% | 32.0% |
The tax charge for the year of $1,972 mill
ion (31 December 2023: $1,631 m
ill
ion) on a profit before tax of $6,014 m
ill
ion
(31 December 2023: $5,093 mill
ion) reflects the
impact of tax losses for which no deferred tax assets are recognised, non-
creditable withhold
ing taxes and other taxes and non-deduct
ible expenses. These are partly offset by countries with tax
rates lower than the UK, the most sign
ificant of wh
ich are Hong Kong and Singapore, and tax exempt income.
Foreign tax includes current tax of $272 mill
ion (31 December 2023: $201 m
ill
ion) on the profits assessable
in Hong Kong.
Deferred tax includes orig
inat
ion or reversal of temporary differences of $8 mill
ion (31 December 2023: $n
il mill
ion) prov
ided
at a rate of 16.5 per cent (31 December 2023: 16.5 per cent) on the profits assessable in Hong Kong.
10. Taxation
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
309
The Group falls with
in the P
illar Two global min
imum tax rules wh
ich apply in the UK from 1 January 2024. The IAS 12 exception
to recognise and disclose informat
ion about deferred tax assets and l
iab
il
it
ies related to P
illar Two income taxes has been
applied. The current tax charge for the period ended 31 December 2024 includes $17m in respect of Pillar Two income taxes
(31 December 2023: N/A).
Tax rate: The tax charge for the year is higher than the charge at the rate of corporation tax in the UK, 25 per cent. The
differences are explained below:
2024 | 2023 | |||
$mill ion | % | $mill ion | % | |
Profit on ordinary activ it ies before tax | 6,014 | 5,093 | ||
Tax at 25 per cent (2023: 23.5 per cent) | 1,504 | 25.0 | 1,197 | 23.5 |
Lower tax rates on overseas earnings | (425) | (7.1) | (330) | (6.5) |
Higher tax rates on overseas earnings | 269 | 4.5 | 306 | 6.0 |
Tax at domestic rates applicable where profits earned | 1,348 | 22.4 | 1,173 | 23.0 |
Non-creditable withhold ing taxes and other taxes | 260 | 4.3 | 85 | 1.7 |
Tax exempt income | (133) | (2.2) | (131) | (2.6) |
Share of associates and jo int ventures | (6) | (0.1) | (14) | (0.3) |
Non-deductible expenses | 243 | 4.0 | 219 | 4.3 |
Bank levy | 23 | 0.4 | 26 | 0.5 |
Non-taxable losses on investments 1 | 35 | 0.6 | 64 | 1.3 |
Payments on financial instruments in reserves | (72) | (1.2) | (68) | (1.3) |
Deferred tax not recognised | 298 | 5.0 | 278 | 5.4 |
Deferred tax rate changes | (3) | – | (1) | – |
Adjustments to tax charge in respect of prior years | 6 | 0.1 | 6 | 0.1 |
Other items | (27) | (0.5) | (6) | (0.1) |
Tax on profit on ordinary activ it ies | 1,972 | 32.8 | 1,631 | 32.0 |
1
2024 Includes tax impact of $55m (2023:$nil) relating to loss on sale of subsid
iar
ies in Africa and $nil relating to China Bohai impa
irment (2023:$140m).
Factors affecting the tax charge in future years: the Group’s tax charge, and effective tax rate in future years could be affected
by several factors includ
ing acqu
is
it
ions, disposals and restructuring of our businesses, the mix of profits across jur
isd
ict
ions w
ith
different statutory tax rates, changes in tax legislat
ion and tax rates and resolut
ion of uncertain tax posit
ions.
The evaluation of uncertain tax posit
ions
involves an interpretat
ion of local tax laws wh
ich could be subject to challenge by a
tax authority, and an assessment of whether the tax authorit
ies w
ill accept the posit
ion taken. The Group does not currently
consider that assumptions or judgements made in assessing tax liab
il
it
ies have a s
ign
ificant r
isk of resulting in a material
adjustment with
in the next financial year.
2024 | 2023 | |||||
Tax recognised in other | Current tax | Deferred tax | Total | Current tax | Deferred tax | Total |
comprehensive income | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Items that will not be reclassif ied to | ||||||
income statement | (16) | 113 | 97 | – | (107) | (107) |
Own credit adjustment | 1 | 49 | 50 | – | (49) | (49) |
Equity instruments at fair value through | ||||||
other comprehensive income | (17) | 76 | 59 | – | (69) | (69) |
Retirement benefit obligat ions | – | (12) | (12) | – | 11 | 11 |
Items that may be reclassed | ||||||
subsequently to income statement | (7) | (30) | (37) | – | (129) | (129) |
Debt instruments at fair value through | ||||||
other comprehensive income | (7) | (44) | (51) | – | (17) | (17) |
Cash flow hedges | – | 14 | 14 | – | (112) | (112) |
Total tax credit/(charge) recognised | ||||||
in equity | (23) | 83 | 60 | – | (236) | (236) |
Current tax:
The following are the movements in current tax during the year:
2024 | 2023 | |
Current tax comprises: | $mill ion | $mill ion |
Current tax assets | 484 | 503 |
Current tax liab il it ies | (811) | (583) |
Net current tax opening balance | (327) | (80) |
Movements in income statement | (1,761) | (1,650) |
Movements in other comprehensive income | (23) | – |
Taxes paid | 2,045 | 1,367 |
Other movements | 3 | 36 |
Net current tax balance as at 31 December | (63) | (327) |
Current tax assets | 663 | 484 |
Current tax liab il it ies | (726) | (811) |
Total | (63) | (327) |
10. Taxation
continued
Financ
ial statements
Notes to the financial statements
310
Standard Chartered
– Annual Report 2024
The following are the major deferred tax liab
il
it
ies and assets recogn
ised by the Group and movements thereon
during the year:
Exchange | |||||
At 1 January | & other | (Charge)/credit | (Charge)/credit | At 31 December | |
2024 | adjustments | to profit | to equity | 2024 | |
Deferred tax comprises: | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Accelerated tax depreciat ion | (424) | 7 | 40 | (3) | (380) |
Impairment provis ions on loans and advances | 286 | (2) | (94) | – | 190 |
Tax losses carried forward | 97 | (24) | 1 | – | 74 |
Equity Instruments at Fair value through other | |||||
comprehensive income | (144) | 6 | – | 76 | (62) |
Debt Instruments at Fair value through other | |||||
comprehensive income | 27 | 3 | (16) | (44) | (30) |
Cash flow hedges | (25) | 2 | – | 14 | (9) |
Own credit adjustment | (71) | 26 | – | 49 | 4 |
Retirement benefit obligat ions | 4 | (5) | 6 | (12) | (7) |
Share-based payments | 43 | (1) | 12 | – | 54 |
Other temporary differences | 139 | (1) | (160) | 35 | 13 |
Net deferred tax assets | (68) | 11 | (211) | 115 | (153) |
Exchange | |||||
& other | (Charge)/credit | (Charge)/credit | At 31 December | ||
At 1 January 2023 | adjustments | to profit | to equity | 2023 | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Deferred tax comprises: | |||||
Accelerated tax depreciat ion | (589) | 236 | (71) | – | (424) |
Impairment provis ions on loans and advances | 334 | (20) | (28) | – | 286 |
Tax losses carried forward | 212 | (106) | (9) | – | 97 |
Equity Instruments at Fair value through other | |||||
comprehensive income | (74) | (1) | – | (69) | (144) |
Debt Instruments at Fair value through other | |||||
comprehensive income | 61 | (14) | (3) | (17) | 27 |
Cash flow hedges | 89 | (2) | – | (112) | (25) |
Own credit adjustment | 5 | (27) | – | (49) | (71) |
Retirement benefit obligat ions | 2 | 2 | (11) | 11 | 4 |
Share-based payments | 36 | – | 7 | – | 43 |
Other temporary differences | (11) | 16 | 134 | – | 139 |
Net deferred tax assets | 65 | 84 | 19 | (236) | (68) |
Deferred tax comprises assets and liab
il
it
ies as follows:
| 2024 | 2023 | |||||
Total | Asset | Liab il ity | Total | Asset | Liab il ity | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Deferred tax comprises: | ||||||
Accelerated tax depreciat ion | (380) | 19 | (399) | (424) | 3 | (427) |
Impairment provis ions on loans and | ||||||
advances | 190 | 139 | 51 | 286 | 282 | 4 |
Tax losses carried forward | 74 | 51 | 23 | 97 | 49 | 48 |
Equity Instruments at Fair value through | ||||||
other comprehensive income | (62) | (12) | (50) | (144) | (1) | (143) |
Debt Instruments at Fair value through | ||||||
other comprehensive income | (30) | (14) | (16) | 27 | 29 | (2) |
Cash flow hedges | (9) | – | (9) | (25) | 12 | (37) |
Own credit adjustment | 4 | 4 | – | (71) | (1) | (70) |
Retirement benefit obligat ions | (7) | 16 | (23) | 4 | 13 | (9) |
Share-based payments | 54 | 12 | 42 | 43 | 9 | 34 |
Other temporary differences | 13 | 199 | (186) | 139 | 307 | (168) |
(153) | 414 | (567) | (68) | 702 | (770) | |
The recoverabil
ity of the Group’s deferred tax assets
is based on management’s judgement of the availab
il
ity of future taxable
profits against which the deferred tax assets will be util
ised. The Group’s total deferred tax assets
include $74 mill
ion relat
ing
to tax losses carried forward, of which $23 mill
ion ar
ises in legal entit
ies w
ith offsetting deferred tax liab
il
it
ies. The rema
in
ing
deferred tax assets on losses of $51 mill
ion are forecast to be recovered before exp
iry and with
in five years.
10. Taxation
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
311
Unrecognised deferred tax
Net | Gross | Net | Gross | |
2024 | 2024 | 2023 | 2023 | |
$mill ion | $mill ion | $mill ion | $mill ion | |
No account has been taken of the following potential deferred tax | ||||
assets/(liab il it ies): | ||||
Withhold ing tax on unrem itted earnings from overseas subsid iar ies | ||||
and associates | (611) | (6,827) | (653) | (7,685) |
Tax losses | 2,494 | 10,414 | 2,242 | 9,326 |
Held over gains on incorporation of overseas branches | (360) | (1,366) | (366) | (1,389) |
Other temporary differences | 356 | 1,363 | 397 | 1,516 |
idends
idend declarat
ion which includes the rate of recovery in the Group’s
financial performance, the macroeconom
ic environment, and opportunit
ies to further
invest in our business and grow profitably
in our markets.
Div
idends on equ
ity instruments are recognized as a liab
il
ity once they have been declared and no longer at the discret
ion of
the directors, and in certain situat
Ordinary equity shares
2024 | 2023 | |||
Cents per share | $mill ion | Cents per share | $mill ion | |
2023/2022 final div idend declared and pa id during the year | 21 | 551 | 14 | 401 |
2024/2023 inter im d iv idend declared and pa id during the year | 9 | 229 | 6 | 167 |
Div
idends on ord
inary equity shares are recorded in the period in which they are declared and, in respect of the final div
idend,
have been approved by the shareholders. Accordingly, the final ordinary equity share div
idends set out above relate to the
respective prior years.
2024 recommended final ordinary equity share div
idend
The 2024 final ordinary equity share div
idend recommended by the Board
is 28 cents per share. The financ
ial statements
for the year ended 31 December 2024 do not reflect this div
idend as th
is will be accounted for in shareholders’ equity as an
appropriat
ion of reta
ined profits in the year ending 31 December 2025.
The div
idend w
ill be paid in either pounds sterling, Hong Kong dollars or US dollars on 19 May 2025 to shareholders on the
UK and HK register of members at the close of business in the UK on 28 March 2025.
Preference shares and Addit
ional T
ier 1 securit
ies
Div
idends on these preference shares and secur
it
ies class
if
ied as equ
ity are recorded in the period in which they are declared.
2024 | 2023 | |
$mill ion | $mill ion | |
Non-cumulative redeemable preference shares: | ||
7.014 per cent preference shares of $5 each | 53 | 53 |
Floating rate preference shares of $5 each¹ | 54 | 50 |
107 | 103 | |
Addit ional T ier 1 securit ies: fixed rate resett ing perpetual subordinated contingent convertible securit ies | 350 | 349 |
457 | 452 |
1
Floating rate is based on Secured Overnight Financ
ing Rate (SOFR), average rate pa
Financ
ial statements
Notes to the financial statements
312
Standard Chartered
– Annual Report 2024
The Group also measures earnings per share on an underlying basis. This differs from earnings defined in IAS 33 Earnings
per share. Underlying earnings is profit/(loss) attributable to ordinary shareholders adjusted for profits or losses of a
capital nature; amounts consequent to investment transactions driven by strategic intent; and other infrequent and/or
exceptional transactions that are sign
ificant or mater
The table below provides the basis of underlying earnings.
2024 | 2023 | |
$mill ion | $mill ion | |
Profit for the period attributable to equity holders | 4,042 | 3,462 |
Non-controlling interest | 8 | 7 |
idend payable on preference shares and AT1 class Div if ied as equ ity | (457) | (452) |
Profit for the period attributable to ordinary shareholders | 3,593 | 3,017 |
Items normalised¹: | ||
Restructuring | 441 | 14 |
Goodwill & other impa irment | – | 850 |
Net loss/(gain) on sale of businesses | 232 | (262) |
DVA | 24 | (17) |
Other items | 100 | – |
Tax on normalised items | (114) | (21) |
Underlying profit attributable to ordinary shareholders | 4,276 | 3,581 |
Basic – weighted average number of shares (mill ions) | 2,543 | 2,778 |
Diluted – weighted average number of shares (mill ions) | 2,610 | 2,841 |
Basic earnings per ordinary share (cents) | 141.3 | 108.6 |
Diluted earnings per ordinary share (cents) | 137.7 | 106.2 |
Underlying basic earnings per ordinary share (cents) | 168.1 | 128.9 |
Underlying diluted earnings per ordinary share (cents) | 163.8 | 126.0 |
1
Refer note 2 segmental informat
ion (page 298) for normal
ised items
The calculation of basic earnings per share is based on the profit attributable to equity holders of the parent and the basic
weighted average number of shares excluding treasury shares held in employees benefit trust. When calculating the diluted
earnings per share, the weighted average number of shares in issue is adjusted for the effects of all expected dilut
ive potent
ial
ordinary shares held in respect of SC PLC totalling 59 mill
ion (2023: 56 m
ill
ion). The total number of share opt
ions outstanding,
under schemes considered to be potentially dilut
ive, was 7 m
ill
ion (2023: 7 m
ill
ion). These opt
ions have strike prices ranging from
$3.93 to $7.64.
Of the total number of employee share options and share awards at 31 December 2024 there were nil share options and share
awards which were anti-dilut
ive.
The 235 mill
ion decrease (2023: 188 m
ill
ion decrease)
in the basic weighted average number of shares is primar
ily due to the
Financ
ial statements
Standard Chartered
– Annual Report 2024
313
ial
instruments
icat
ion and measurement
Financ
ial assets held at amort
ised cost and fair value through other comprehensive income
Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash flows that are
solely payments of princ
ipal and
interest (SPPI) characterist
ics.
In assessing whether the contractual cash flows have SPPI characterist
ics, the Group cons
iders the contractual terms
of the instrument. This includes assessing whether the financ
ial asset conta
ins a contractual term that could change
the tim
ing or amount of contractual cash flows such that
it would not meet this condit
ion. In mak
ing the assessment,
the Group considers:
•
Contingent events that would change the amount and tim
ing of cash flows
• Leverage features
•
Prepayment and extension terms
•
Terms that lim
it the Group’s cla
im to cash flows from specif
ied assets (e.g. non-recourse asset arrangements)
•
Features that modify considerat
ion of the t
ime value of money – e.g. period
ical reset of
interest rates
Whether financial assets are held at amort
ised cost or at FVOCI depends on the object
ives of the bus
iness models under
which the assets are held. A business model refers to how the Group manages financ
ial assets to generate cash flows.
The Group makes an assessment of the objective of a bus
iness model in which an asset is held at the ind
iv
idual product
business line, and where applicable with
in bus
iness lines depending on the way the business is managed and informat
ion
is provided to management. Factors considered include:
•
How the performance of the product business line is evaluated and reported to the Group’s management
•
How managers of the business model are compensated, includ
ing whether management
is compensated based on
the fair value of assets or the contractual cash flows collected
•
The risks that affect the performance of the business model and how those risks are managed
•
The frequency, volume and tim
ing of sales
in prior periods, the reasons for such sales and expectations about future
sales activ
ity
The Group’s business model assessment is as follows:
Business model | Business object ive | Characterist ics | Businesses | Products |
Hold to | Intent is to orig inate | • Provid ing financing and | • Global Banking | • Loans and advances |
collect | financial assets and | orig inat ing assets to earn interest | • Transaction Banking | • Debt securit ies |
hold them to maturity, | income as primary income stream | • Retail Lending | ||
collecting the | • Performing credit risk | • Treasury Markets | ||
contractual cash flows | management activ it ies | (Loans and | ||
over the term of the | • Costs include funding costs, | Borrowings) | ||
instrument | transaction costs and | |||
impa irment losses | ||||
Hold to | Business object ive met | • Portfolios held for liqu id ity needs; | • Treasury Markets | • Debt securit ies |
collect | through both hold to | or where a certain interest yield | ||
and sell | collect and by selling | profile is mainta ined; or that are | ||
financial assets | normally rebalanced to achieve | |||
matching of duration of assets | ||||
and liab il it ies | ||||
• Income streams come from | ||||
interest income, fair value | ||||
changes, and impa irment losses | ||||
Fair value | All other business | • Assets held for trading | • Treasury Markets | • Derivat ives |
through | objectives, includ ing | • Assets that are orig inated, | • All other business lines | • Equity shares |
profit or loss | trading and managing | purchased, and sold for profit | • Trading portfolios | |
financial assets on | taking or underwrit ing act iv ity | • Reverse repos | ||
a fair value basis | • Performance of the portfolio is | • Bond and Loan | ||
evaluated on a fair value basis | Syndicat ion | |||
• Income streams are from fair value | ||||
changes or trading gains or losses |
13. Financ
ial
instruments
continued
Financ
ial statements
Notes to the financial statements
314
Standard Chartered
– Annual Report 2024
Financ
ial assets wh
ich have SPPI characterist
ics and that are held w
ith
in a bus
iness model whose object
ive
is to hold
financial assets to collect contractual cashflows (hold to collect) are recorded at amort
ised cost. Conversely, financ
ial
assets which have SPPI characterist
ics but are held w
ith
in a bus
iness model whose object
ive
is achieved by both collecting
contractual cashflows and selling financ
ial assets (Hold to collect and sell) are class
if
ied as held at FVOCI. Both hold to
collect and hold to collect and sell business models involve holding financ
ial assets to collect the contractual cashflows.
However, the business models are dist
inct by reference to the frequency and s
ign
ificance that asset sales play
in meeting
the objective under wh
ich a particular group of financ
ial assets
is managed. Hold to collect business models are
characterised by asset sales that are inc
idental to meet
ing the object
ives under wh
ich a group of assets is managed.
Sales of assets under a hold to collect business model can be made to manage increases in the credit risk of financ
ial
assets but sales for other reasons should be infrequent or ins
ign
if
icant. Cashflows from the sale of financial assets under a
hold to collect and sell business model by contrast are integral to achiev
ing the objectives under wh
ich a particular group
of financial assets are managed. Th
is may be the case where frequent sales of financ
ial assets are requ
ired to manage the
Group’s daily liqu
id
ity requirements or to meet regulatory requirements to demonstrate liqu
id
ity of financ
ial
instruments.
Sales of assets under hold to collect and sell business models are therefore both more frequent and more sign
ificant
in
value than those under the hold to collect model.
Equity instruments designated as held at FVOCI
Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated
at in
it
ial recognit
ion as held at FVOCI on an
instrument-by-instrument basis. Div
idends rece
ived are recognised in profit
or loss. Gains and losses aris
ing from changes
in the fair value of these instruments, includ
ing fore
ign exchange gains
and losses, are recognised directly in equity and are never reclassif
ied to profit or loss even on derecogn
it
ion.
Mandatorily classif
ied at fa
ir value through profit or loss
Financ
ial assets and l
iab
il
it
ies wh
ich are mandatorily held at fair value through profit or loss are split between two
subcategories as follows:
Trading, includ
ing:
•
Financ
ial assets and l
iab
il
it
ies held for trad
ing, which are those acquired princ
ipally for the purpose of sell
ing in the
short-term
• Derivat
ives
Non-trading mandatorily at fair value through profit or loss, includ
ing:
•
Instruments in a business which has a fair value business model (see the Group’s business model assessment) which are
not trading or derivat
ives
•
Hybrid financ
ial assets that conta
in one or more embedded derivat
ives
•
Financ
ial assets that would otherw
ise be measured at amortised cost or FVOCI but which do not have SPPI
characterist
ics
•
Equity instruments that have not been designated as held at FVOCI
•
Financ
ial l
iab
il
it
ies that const
itute contingent considerat
ion
in a business combinat
ion
Designated at fair value through profit or loss
Financ
ial assets and l
iab
il
it
ies may be des
ignated at fair value through profit or loss when the designat
ion el
im
inates or
sign
ificantly reduces a measurement or recogn
it
ion
incons
istency that would otherw
ise arise from measuring assets or
liab
il
it
ies on a d
ifferent basis (‘accounting mismatch’).
Financ
ial l
iab
il
it
ies may also be des
ignated at fair value through profit or loss where they are managed on a fair value
basis or have an embedded derivat
ive where the Group
is not able to separately value, and thus bifurcate, the embedded
derivat
ive component.
Financ
ial l
iab
il
it
ies held at amort
ised cost
Financ
ial l
iab
il
it
ies that are not financial guarantees or loan comm
itments and that are not classif
ied as financial l
iab
il
it
ies
held at fair value through profit or loss are classif
ied as financial l
iab
il
it
ies held at amort
ised cost.
Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are
redeemable on a specif
ic date or at the opt
ion of the shareholder are classif
ied as financial l
iab
il
it
ies and are presented
in other borrowed funds. The div
idends on these preference shares are recogn
ised in the income statement as interest
expense on an amortised cost basis using the effective interest method.
13. Financ
ial
instruments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
315
Financ
ial guarantee contracts and loan comm
itments
The Group issues financ
ial guarantee contracts and loan comm
itments in return for fees. Financ
ial guarantee contracts
and any loan commitments issued at below-market interest rates are in
it
ially recognised at their fair value as a financ
ial
liab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative amount of income recognised in
accordance with the princ
iples of IFRS 15 Revenue from Contracts w
ith Customers and their expected credit loss provis
ion.
Loan commitments may be designated at fair value through profit or loss where that is the business model under which
such contracts are held.
Fair value of financ
ial assets and l
iab
il
it
ies
The fair value of financ
ial
instruments is generally measured on the basis of the ind
iv
idual financ
ial
instrument. However,
when a group of financial assets and financial l
iab
il
it
ies
is managed on the basis of its net exposure to either market risk or
credit risk, the fair value of the group of financ
ial
instruments is measured on a net basis.
The fair values of quoted financ
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded
as active if transactions for the asset or liab
il
ity take place with suffic
ient frequency and volume to prov
ide pric
ing
informat
ion on an ongo
ing basis. If the market for a financ
ial
instrument, and for unlisted securit
ies,
is not active, the
Group establishes fair value by using valuation techniques.
Init
ial recogn
it
ion
Regular way purchases and sales of financial assets held at fa
ir value through profit or loss, and held at fair value through
other comprehensive income are in
it
ially recognised on the trade date (the date on which the Group commits to purchase
or sell the asset). Loans and advances and other financial assets held at amort
ised cost are recognised on the settlement
date (the date on which cash is advanced to the borrowers).
All financial
instruments are in
it
ially recognised at fair value, which is normally the transaction price, plus directly
attributable transaction costs for financ
ial assets and l
iab
il
it
ies wh
ich are not subsequently measured at fair value
through profit or loss.
In certain circumstances, the in
it
ial fair value may be based on a valuation technique which may lead to the recognit
ion of
profits or losses at the time of in
it
ial recognit
ion. However, these profits or losses can only be recogn
ised when the valuation
technique used is based solely on observable market data. In those cases where the in
it
ially recognised fair value is based
on a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation
model is not recognised immed
iately
in the income statement, it will be recognised in profit or loss following the passage
of time, or as the inputs become observable, or the transaction matures or is terminated.
Subsequent measurement
Financ
ial assets and financial l
iab
il
it
ies held at amort
ised cost
Financ
ial assets and financial l
iab
il
it
ies held at amort
ised cost are subsequently carried at amortised cost using the
effective interest method (see ‘Interest income and expense’). Foreign exchange gains and losses are recognised in the
income statement.
Where a financial
instrument carried at amortised cost is the hedged item in a qualify
ing fa
ir value hedge relationsh
ip,
its carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.
Financ
ial assets held at FVOCI
Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris
ing from
changes in fair value recognised in other comprehensive income and accumulated in a separate component of equity.
Foreign exchange gains and losses on the amortised cost are recognised in income. Changes in expected credit losses are
recognised in the profit or loss and are accumulated in equity. On derecognit
ion, the cumulat
ive fair value gains or losses,
net of the cumulative expected credit loss reserve, are transferred to the profit or loss.
Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris
ing
from changes in fair value (includ
ing any related fore
ign exchange gains or losses) recognised in other comprehensive
income and accumulated in a separate component of equity. On derecognit
ion, the cumulat
ive reserve is transferred to
retained earnings and is not recycled to profit or loss.
Financ
ial assets and l
iab
il
it
ies held at fa
ir value through profit or loss
Gains and losses aris
ing from changes
in fair value, includ
ing contractual
interest income or expense, recorded in the net
trading income line in the profit or loss.
13. Financ
ial
instruments
continued
Financ
ial statements
Notes to the financial statements
316
Standard Chartered
– Annual Report 2024
ion of financial
instruments
Financ
ial assets wh
ich are subject to commercial refinanc
ing where the loan
is priced to the market with no payment
related concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the
Group’s rights to the cash flows under the orig
inal contract have exp
ired, the old loan is derecognised and the new loan is
recognised at fair value. For all other modif
icat
ions for example forborne loans or restructuring, whether or not a change
in the cash flows is ‘substantially different’ is judgemental and will be considered on a case-by-case basis, taking into
account all the relevant facts and circumstances.
On derecognit
ion of a financial asset, the d
ifference between the carrying amount of the asset (or the carrying amount
allocated to the portion of the asset derecognised) and the sum of the considerat
ion rece
ived (includ
ing any new
asset obtained less any new liab
il
ity assumed) and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in profit or loss except for equity instruments elected FVOCI (see above) and
cumulative fair value adjustments attributable to the credit risk of a liab
il
ity, that are held in other comprehensive income.
Financ
ial l
iab
il
it
ies are derecogn
ised when they are extingu
ished. A financial l
iab
il
ity is extingu
ished when the obl
igat
ion
is discharged, cancelled or expires and this is evaluated both qualitat
ively and quant
itat
ively. However, where a financial
liab
il
ity has been modif
ied,
it is derecognised if the difference between the modif
ied cash flows and the or
ig
inal cash flows
is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat
ive assessment to determ
ine whether
the terms of the two instruments are substantially different.
If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab
il
ity and
the considerat
ion pa
id is included in ‘Other income’ except for the cumulative fair value adjustments attributable to the
credit risk of a liab
il
Modif
ied financial
instruments
Financ
ial assets and financial l
iab
il
it
ies whose or
ig
inal contractual terms have been mod
if
ied,
includ
ing those loans subject
to forbearance strategies, are considered to be modif
ied
instruments. Modif
icat
ions may include changes to the tenor,
cash flows and or interest rates among other factors.
Where derecognit
ion of financial assets
is appropriate (see Derecognit
ion), the newly recogn
ised residual loans are
assessed to determine whether the assets should be classif
ied as purchased or or
ig
inated cred
it-impa
ired assets (POCI).
Where derecognit
ion
is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the
present value of the renegotiated or modif
ied contractual cash flows d
iscounted at the orig
inal effect
ive interest rate
(or credit adjusted effective interest rate for POCI financ
ial assets). The d
ifference between the recalculated values and
the pre-modif
ied gross carry
ing values of the instruments are recorded as a modif
icat
ion gain or loss in the profit or loss.
Gains and losses aris
ing from mod
if
icat
ions for credit reasons are recorded as part of ‘Credit Impairment’ (see Credit
Impairment policy). Modif
icat
ion gains and losses aris
ing from non-cred
it reasons are recognised either as part of ‘Credit
Impairment’ or with
in
income depending on whether there has been a change in the credit risk on the financ
ial asset
subsequent to the modif
icat
ion. Modif
icat
ion gains and losses aris
ing on financial l
iab
il
it
ies are recogn
ised with
in
income.
The movements in the applicable expected credit loss loan posit
ions are d
13. Financ
ial
instruments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
317
The Group’s classif
icat
ion of its financ
ial assets and l
iab
il
it
ies
is summarised in the following tables.
| Assets at fair value | |||||||||
Non-trading | |||||||||
mandatorily | Designated | Fair value | Total | Assets | |||||
Derivat ives | at fair value | at fair value | through other | financial | held at | ||||
held for | through | through | comprehensive | assets at | amortised | ||||
Trading | hedging | profit or loss | profit or loss | income | fair value | cost | Total | ||
Assets | Notes | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Cash and balances at central banks¹ | – | – | – | – | – | – | 63,447 | 63,447 | |
Financ ial assets held at fa ir value | |||||||||
through profit or loss | |||||||||
Loans and advances to banks 2 | 2,213 | – | – | – | – | 2,213 | – | 2,213 | |
Loans and advances to customers 2 | 6,912 | – | 172 | – | – | 7,084 | – | 7,084 | |
Reverse repurchase agreements | |||||||||
and other sim ilar secured lend ing | 16 | 336 | – | 85,859 | – | – | 86,195 | – | 86,195 |
Debt securit ies, alternat ive tier one | |||||||||
and other elig ible b ills | 76,329 | – | 140 | 70 | – | 76,539 | – | 76,539 | |
Equity shares | 5,285 | – | 201 | – | – | 5,486 | – | 5,486 | |
Other assets | – | – | – | – | – | – | – | – | |
91,075 | – | 86,372 | 70 | – | 177,517 | – | 177,517 | ||
Derivat ive financial instruments | 14 | 78,906 | 2,566 | – | – | – | 81,472 | – | 81,472 |
Loans and advances to banks 2,3 | 15 | – | – | – | – | – | – | 43,593 | 43,593 |
of which – reverse repurchase | |||||||||
agreements and other sim ilar | |||||||||
secured lending | 16 | – | – | – | – | – | – | 2,946 | 2,946 |
Loans and advances to customers 2 | 15 | – | – | – | – | – | – | 281,032 | 281,032 |
of which – reverse repurchase | |||||||||
agreements and other sim ilar | |||||||||
secured lending | 16 | – | – | – | – | – | – | 9,660 | 9,660 |
Investment securit ies | |||||||||
Debt securit ies, alternat ive tier one | |||||||||
and other elig ible b ills | – | – | – | – | 88,425 | 88,425 | 55,137 | 143,562 | |
Equity shares | – | – | – | – | 994 | 994 | – | 994 | |
– | – | – | – | 89,419 | 89,419 | 55,137 | 144,556 | ||
Other assets | 20 | – | – | 34,585 | 34,585 | ||||
Assets held for sale | 21 | – | – | – | 5 | – | 5 | 884 | 889 |
Total at 31 December 2024 | 169,981 | 2,566 | 86,372 | 75 | 89,419 | 348,413 | 478,678 | 827,091 | |
Cash and balances at central banks¹ | – | 69,905 | 69,905 | ||||||
Financ ial assets held at fa ir value | |||||||||
through profit or loss | |||||||||
Loans and advances to banks 2 | 2,265 | – | – | – | – | 2,265 | – | 2,265 | |
Loans and advances to customers 2 | 6,930 | – | 282 | – | – | 7,212 | – | 7,212 | |
Reverse repurchase agreements | |||||||||
and other sim ilar secured lend ing | 16 | 9,997 | – | 71,850 | – | – | 81,847 | – | 81,847 |
Debt securit ies, alternat ive tier one | |||||||||
and other elig ible b ills | 52,776 | – | 98 | 78 | – | 52,952 | – | 52,952 | |
Equity shares | 2,721 | – | 219 | – | – | 2,940 | – | 2,940 | |
Other assets | – | – | 6 | – | – | 6 | – | 6 | |
74,689 | – | 72,455 | 78 | – | 147,222 | – | 147,222 | ||
Derivat ive financial instruments | 14 | 48,333 | 2,101 | – | – | – | 50,434 | – | 50,434 |
Loans and advances to banks 2,3 | 15 | – | – | – | – | – | – | 44,977 | 44,977 |
of which – reverse repurchase | |||||||||
agreements and other sim ilar | |||||||||
secured lending | 16 | – | – | – | – | – | – | 1,738 | 1,738 |
Loans and advances to customers 2 | 15 | – | – | – | – | – | – | 286,975 | 286,975 |
of which – reverse repurchase | |||||||||
agreements and other sim ilar | |||||||||
secured lending | – | – | – | – | – | – | 13,996 | 13,996 | |
Investment securit ies | |||||||||
Debt securit ies, alternat ive tier one | |||||||||
and other elig ible b ills | – | – | – | – | 103,328 | 103,328 | 56,935 | 160,263 | |
Equity shares | – | – | – | – | 992 | 992 | – | 992 | |
– | – | – | – | 104,320 | 104,320 | 56,935 | 161,255 | ||
Other assets | 20 | – | – | 38,140 | 38,140 | ||||
Assets held for sale | 21 | – | – | – | – | – | – | 701 | 701 |
Total at 31 December 2023 | 123,022 | 2,101 | 72,455 | 78 | 104,320 | 301,976 | 497,633 | 799,609 | |
1
Comprises cash held at central banks in restricted accounts of $ 7,799 mill
ion (2023: $ 6,153 m
ill
ion), or on demand, or placements wh
ich are contractually due to
mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers
2
Further analysed in Risk review and Capital review (pages 193 to 274)
3
Loans and advances to banks include amounts due on demand from banks other than central banks
13. Financ
ial
instruments continued
Financ
ial statements
Notes to the financial statements
318
Standard Chartered
– Annual Report 2024
Liab il it ies at fa ir value | |||||||
Designated | Total | ||||||
Derivat ives | at fair value | financial | |||||
held for | through | liab il it ies at | Amortised | ||||
Trading | hedging | profit or loss | fair value | cost | Total | ||
Liab il it ies | Notes | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Financ ial l iab il it ies held at fa ir value through profit | |||||||
or loss | |||||||
Deposits by banks | – | – | 1,893 | 1,893 | – | 1,893 | |
Customer accounts | – | – | 21,772 | 21,772 | – | 21,772 | |
Repurchase agreements and other sim ilar | |||||||
secured borrowing | 16 | 925 | – | 32,614 | 33,539 | – | 33,539 |
Debt securit ies in issue | 22 | 1 | – | 13,730 | 13,731 | – | 13,731 |
Short posit ions | 14,527 | – | – | 14,527 | – | 14,527 | |
Other liab il it ies | – | – | – | – | – | – | |
15,453 | – | 70,009 | 85,462 | – | 85,462 | ||
Derivat ive financial instruments | 14 | 80,037 | 2,027 | – | 82,064 | – | 82,064 |
Deposits by banks | – | – | – | – | 25,400 | 25,400 | |
Customer accounts | – | – | – | – | 464,489 | 464,489 | |
Repurchase agreements and other sim ilar | |||||||
secured borrowing | 16 | – | – | – | – | 12,132 | 12,132 |
Debt securit ies in issue | 22 | – | – | – | – | 64,609 | 64,609 |
Other liab il it ies | 23 | – | – | – | – | 44,047 | 44,047 |
Subordinated liab il it ies and other borrowed funds | 27 | – | – | – | – | 10,382 | 10,382 |
Liab il it ies included in disposal groups held for sale | 21 | – | – | – | – | 360 | 360 |
Total at 31 December 2024 | 95,490 | 2,027 | 70,009 | 167,526 | 621,419 | 788,945 | |
Financ ial l iab il it ies held at fa ir value through profit | |||||||
or loss | |||||||
Deposits by banks | – | – | 1,894 | 1,894 | – | 1,894 | |
Customer accounts | 39 | – | 17,209 | 17,248 | – | 17,248 | |
Repurchase agreements and other sim ilar | |||||||
secured borrowing | 16 | 1,660 | – | 39,623 | 41,283 | – | 41,283 |
Debt securit ies in issue | 22 | – | – | 10,817 | 10,817 | – | 10,817 |
Short posit ions | 11,846 | – | – | 11,846 | – | 11,846 | |
Other liab il it ies | – | – | 8 | 8 | – | 8 | |
13,545 | – | 69,551 | 83,096 | – | 83,096 | ||
Derivat ive financial instruments | 14 | 52,747 | 3,314 | – | 56,061 | – | 56,061 |
Deposits by banks | – | – | – | – | 28,030 | 28,030 | |
Customer accounts | – | – | – | – | 469,418 | 469,418 | |
Repurchase agreements and other sim ilar | |||||||
secured borrowing | 16 | – | – | – | – | 12,258 | 12,258 |
Debt securit ies in issue | 22 | – | – | – | – | 62,546 | 62,546 |
Other liab il it ies | 23 | – | – | – | – | 38,663 | 38,663 |
Subordinated liab il it ies and other borrowed funds | 27 | – | – | – | – | 12,036 | 12,036 |
Liab il it ies included in disposal groups held for sale | 21 | – | – | – | – | 726 | 726 |
Total at 31 December 2023 | 66,292 | 3,314 | 69,551 | 139,157 | 623,677 | 762,834 | |
Offsetting of financ
ial
instruments
Financ
ial assets and l
iab
il
it
ies are offset and the net amount reported
in the balance sheet when there is a legally enforceable
right to offset the recognised amounts and there is an intent
ion to settle on a net bas
is, or to realise the asset and settle the
liab
il
ity simultaneously.
In practice, for credit mit
igat
ion, the Group is able to offset assets and liab
il
it
ies wh
ich do not meet the IAS 32 netting criter
ia set
out below. Such arrangements include master netting arrangements for derivat
ives and global master repurchase agreements
for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a
particular counterparty can be offset but only in the event of default or other predetermined events.
In addit
ion, the Group also rece
ives and pledges readily realisable collateral for derivat
ive transact
ions to cover net exposure
in the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains
(legally purchases) respectively, highly liqu
id assets wh
ich can be sold in the event of a default.
13. Financ
ial
instruments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
319
The following tables set out the impact of netting on the balance sheet. This comprises derivat
ive transact
ions settled through
an enforceable netting agreement where we have the intent and abil
ity to settle net and wh
ich are offset on the balance sheet.
Net amounts | Related amount not offset | |||||
Gross amounts | of financial | in the balance sheet | ||||
of recognised | Impact of | instruments | ||||
financial | offset in the | presented in the | Financ ial | Financ ial | ||
instruments | balance sheet | balance sheet | instruments | collateral | Net amount | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
At 31 December 2024 | ||||||
Derivat ive financial instruments | 97,902 | (16,430) | 81,472 | (60,280) | (15,005) | 6,187 |
Reverse repurchase agreements and | ||||||
other sim ilar secured lend ing | 137,115 | (38,314) | 98,801 | – | (98,801) | – |
Total Assets | 235,017 | (54,744) | 180,273 | (60,280) | (113,806) | 6,187 |
Derivat ive financial instruments | 98,494 | (16,430) | 82,064 | (60,280) | (11,046) | 10,738 |
Repurchase agreements and other | ||||||
sim ilar secured borrow ing | 83,985 | (38,314) | 45,671 | – | (45,671) | – |
Total Liab il it ies | 182,479 | (54,744) | 127,735 | (60,280) | (56,717) | 10,738 |
At 31 December 2023 | ||||||
Derivat ive financial instruments | 99,929 | (49,495) | 50,434 | (39,293) | (8,440) | 2,701 |
Reverse repurchase agreements and | ||||||
other sim ilar secured lend ing | 109,413 | (11,832) | 97,581 | – | (97,581) | – |
Total Assets | 209,342 | (61,327) | 148,015 | (39,293) | (106,021) | 2,701 |
Derivat ive financial instruments | 105,556 | (49,495) | 56,061 | (39,293) | (10,337) | 6,431 |
Repurchase agreements and other | ||||||
sim ilar secured borrow ing | 65,373 | (11,832) | 53,541 | – | (53,541) | – |
Total Liab il it ies | 170,929 | (61,327) | 109,602 | (39,293) | (63,878) | 6,431 |
Related amounts not offset in the balance sheet comprises:
•
Financ
ial
instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises
master netting arrangements held against derivat
ive financial
instruments and excludes the effect of over-collateralisat
ion
•
Financ
ial
instruments where a legal opin
ion ev
idenc
ing enforceab
il
ity of the r
ight of offset may not have been sought, or may
have been unable to obtain such opin
ion
•
Financ
ial collateral compr
ises cash collateral pledged and received for derivat
ive financial
instruments and collateral bought
and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat
ion
Financ
ial l
iab
il
it
ies des
ignated at fair value through profit or loss
2024 | 2023 | |
$mill ion | $mill ion | |
Carrying Balance aggregate fair value | 70,009 | 69,551 |
Amount Contractually obliged to repay at maturity | 70,166 | 71,240 |
Difference between aggregate fair value and contractually obliged to repay at maturity | (157) | (1,689) |
Cumulative change in Fair Value accredited to Credit Risk Difference | (276) | 156 |
The net fair value loss on financ
ial l
iab
il
it
ies des
ignated at fair value through profit or loss was $3,252 mill
ion for the year
(31 December 2023: net loss of $2,649 mill
ion).
Further details of the Group’s own credit adjustment (OCA) valuation technique is described later in this Note.
Valuation of financ
ial
instruments
The Valuation Methodology function is responsible for independent price verif
icat
ion, oversight of fair value and appropriate
value adjustments and escalation of valuation issues. Independent price verif
icat
ion is the process of determin
ing that the
valuations incorporated into the financ
ial statements are val
idated independent of the business area responsible for the
product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the financ
ial
instruments
are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the financ
ial
statements. The market data used for price verif
icat
ion (PV) may include data sourced from recent trade data involv
ing
external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric
ing prov
iders. The Valuation
Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value
processes which are formally documented on a semi-annual basis detail
ing the su
itab
il
ity of the market data used for price
testing. Price verif
icat
ion uses independently sourced data that is deemed most representative of the market the instruments
trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab
il
ity, availab
il
ity of
multiple data sources and methodology employed by the pric
ing prov
ider are taken into considerat
ion.
The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist
ing of representat
ives from Group
Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the
independent valuations of the inventory. For Princ
ipal F
inance, the Investment Committee meeting is held on a quarterly basis
to review investments and valuations.
13. Financ
ial
instruments
continued
Financ
ial statements
Notes to the financial statements
320
Standard Chartered
– Annual Report 2024
ificant account
ing estimates and judgements
The Group evaluates the sign
ificance of financial
instruments and material accuracy of the valuations incorporated in the
financial statements as they
involve a high degree of judgement and estimat
ion uncerta
inty in determin
ing the carry
ing
values of financial assets and l
iab
il
it
ies at the balance sheet date.
•
Fair value of financ
ial
instruments is determined using valuation techniques and estimates (see below) which, to the
extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the
observabil
ity of s
ign
ificant valuat
ion inputs can materially affect the fair values of financ
ial
instruments
•
When establish
ing the ex
it price of a financ
ial
instrument using a valuation technique, the Group estimates valuation
adjustments in determin
ing the fa
ir value (page 320)
•
In determin
ing the valuat
ion of financ
ial
instruments, the Group makes judgements on the amounts reserved to cater
for model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign
ificant valuat
ion judgements in
respect of Level 3 instruments (page 325)
•
Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued
based on models that use a sign
ificant degree of non-market-based unobservable
Valuation techniques
Refer to the fair value hierarchy explanation – Level 1, 2 and 3 (page 322)
•
Financ
ial
instruments held at fair value
–
Debt securit
ies – asset-backed secur
it
ies:
Asset-backed securit
ies are valued based on external pr
ices obtained from
consensus pric
ing prov
iders, broker quotes, recent trades, arrangers’ quotes, etc. Where an observable price is available
for a given security, it is classif
ied as Level 2. In
instances where third-party prices are not available or reliable, the security
is classif
ied as Level 3. The fa
ir value of Level 3 securit
ies
is estimated using market standard cash flow models with input
parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable
securit
ies w
ith sim
ilar v
intage, collateral type, and credit ratings.
–
Debt securit
ies
in issue:
These debt securit
ies relate to structured notes
issued by the Group. Where independent market
data is available through pric
ing vendors and broker sources these pos
it
ions are class
if
ied as Level 2. Where such l
iqu
id
external prices are not available, valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond
spreads and credit spreads, and are classif
ied as Level 3. These
input parameters are determined with reference to the
same issuer (if available) or proxies from comparable issuers or assets.
–
Derivat
ives:
Derivat
ive products are class
if
ied as Level 2
if the valuation of the product is based upon input parameters
which are observable from independent and reliable market data sources. Derivat
ive products are class
if
ied as Level 3
if there are sign
ificant valuat
ion input parameters which are unobservable in the market, such as products where the
performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options
based on the performance of two or more underlying ind
ices and
interest rate products with quanto payouts. In most cases
these unobservable correlation parameters cannot be impl
ied from the market, and methods such as h
istor
ical analys
is
and comparison with histor
ical levels or other benchmark data must be employed.
–
Equity shares – unlisted equity investments:
The majority of unl
isted equity investments are valued based on market
multiples, includ
ing Pr
ice to Book (P/B), Price-to-Earnings (P/E) or enterprise value to earnings before income tax,
depreciat
ion and amort
isat
ion (EV/EBITDA) rat
ios of comparable listed companies. The primary inputs for the valuation
of these investments are the actual financ
ials or forecasted earn
ings of the investee companies and market multiples
obtained from the comparable listed companies. To ensure comparabil
ity between these unquoted
investments and the
comparable listed companies, appropriate adjustments are also applied (for example, liqu
id
ity and size) in the valuation.
In circumstances where an investment does not have direct comparables or where the multiples for the comparable
companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted
cash flow model or net asset value (“NAV”) or option pric
ing model), wh
ich use predominantly unobservable inputs or
Level 3 inputs, may be applied. Even though market multiples for the comparable listed companies can be sourced from
third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments
(excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classif
ied as
Level 3 on the basis that the valuation methods involve judgements ranging from determin
ing comparable compan
ies
to discount rates where the discounted cash flow method is applied.
–
Loans and advances:
These primar
ily
include loans in the FM Bond and Loan Syndicat
ion bus
iness which were not fully
syndicated as of the balance sheet date and other financ
ing transact
ions with
in F
inanc
ial Markets, and loans and
advances includ
ing reverse repurchase agreements that do not have SPPI cashflows or are managed on a fa
ir value basis.
Where available, loan valuation is based on observable clean sales transactions prices or market observable spreads. If
observable credit spreads are not available, proxy spreads based on comparables with sim
ilar cred
it grade, sector and
region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available,
these loans are classif
ied as Level 2. Where there are no recent transact
ions or comparables, these loans are classif
ied as
Level 3.
–
Other debt securit
ies:
These debt securit
ies
include convertible bonds, corporate bonds, credit and structured notes.
Where quoted prices are available through pric
ing vendors, brokers or observable trad
ing activ
it
ies from liqu
id markets,
these are classif
ied as Level 2 and valued us
ing such quotes. Where there are sign
ificant valuat
ion inputs which are
unobservable in the market, due to ill
iqu
id trading or the complexity of the product, these are classif
ied as Level 3.
The valuations of these debt securit
ies are
impl
ied us
ing input parameters such as bond spreads and credit spreads.
These input parameters are determined with reference to the same issuer (if available) or proxied from comparable
issuers or assets
13. Financ
ial
instruments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
321
•
Financ
ial
instruments held at amortised cost
The following sets out the Group’s basis for establish
ing fa
ir values of amortised cost financ
ial
instruments and their
classif
icat
ion between Levels 1, 2 and 3. As certain categories of financ
ial
instruments are not actively traded, there is a
sign
ificant level of management judgement
involved in calculating the fair values:
–
Cash and balances at central banks:
The fair value of cash and balances at central banks is their carrying amounts
–
Debt securit
ies
in issue, subordinated liab
il
it
ies and other borrowed funds:
The aggregate fair values are calculated
based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash flow
model is used based on a current market related yield curve appropriate for the remain
ing term to matur
ity
–
Deposits and borrowings:
The estimated fair value of deposits with no stated maturity is the amount repayable on
demand. The estimated fair value of fixed interest-bearing deposits and other borrowings without quoted market prices
is based on discounted cash flows using the prevail
ing market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing
maturity
–
Investment securit
ies:
For investment securit
ies that do not have d
irectly observable market values, the Group util
ises a
number of valuation techniques to determine fair value. Where available, securit
ies are valued us
ing input proxies from
the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies
from a different underlying (for example, a sim
ilar bond but us
ing spreads for a particular sector and rating). Certain
instruments cannot be proxies as set out above, and in such cases the posit
ions are valued us
ing non-market observable
inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securit
ies. The
fair value for such instruments is usually proxies from internal assessments of the underlying cash flows
–
Loans and advances to banks and customers:
For loans and advances to banks, the fair value of floating rate placements
and overnight deposits is their carrying amounts. The estimated fair value of fixed interest-bearing deposits is based on
discounted cash flows using the prevail
ing money market rates for debts w
ith a sim
ilar Cred
it Risk and remain
ing matur
ity.
The Group’s loans and advances to customers’ portfolio is well divers
ified by geography and
industry. Approximately a
quarter of the portfolio re-prices with
in one month, and approx
imately half re-prices with
in 12 months. Loans and advances
are presented net of provis
ions for
impa
irment. The fa
ir value of loans and advances to customers with a residual maturity
of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a
residual maturity of more than one year represents the discounted amount of future cash flows expected to be received,
includ
ing assumpt
ions relating to prepayment rates and Credit Risk. Expected cash flows are discounted at current market
rates to determine fair value. The Group has a wide range of ind
iv
idual instruments with
in
its loans and advances portfolio
and as a result provid
ing quant
if
icat
ion of the key assumptions used to value such instruments is impract
ical
–
Other assets:
Other assets comprise primar
ily of cash collateral and trades pend
ing settlement. The carrying amount of
these financial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are either short-term in
nature or re-price to current market rates frequently
Fair value adjustments
When establish
ing the ex
it price of a financ
ial
instrument using a valuation technique, the Group considers adjustments to
the modelled price which market partic
ipants would make when pr
ic
ing that
instrument. The main valuation adjustments
(described further below) in determin
ing fa
ir value for financ
ial assets and financial l
iab
il
it
ies are as follows:
Movement | Movement | |||||
01.01.24 | during the year | 31.12.24 | 01.01.23 | during the year | 31.12.23 | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Bid-offer valuation adjustment | 115 | 2 | 117 | 118 | (3) | 115 |
Credit valuation adjustment | 119 | 15 | 134 | 171 | (52) | 119 |
Debit valuation adjustment | (129) | 24 | (105) | (112) | (17) | (129) |
Model valuation adjustment | 4 | 1 | 5 | 3 | 1 | 4 |
Funding valuation adjustment | 33 | 8 | 41 | 46 | (13) | 33 |
Other fair value adjustments | 25 | 1 | 26 | 23 | 2 | 25 |
Total | 167 | 51 | 218 | 249 | (82) | 167 |
Income deferrals | ||||||
Day 1 and other deferrals | 109 | 29 | 138 | 186 | (77) | 109 |
Total | 109 | 29 | 138 | 186 | (77) | 109 |
Note: Bracket represents an asset and credit to the income statement
•
Bid-offer valuation adjustment:
Generally, market parameters are marked on a mid-market basis in the revaluation systems,
and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis
ing the bus
iness’ posit
ions through
dealing away in the market, thereby bring
ing long pos
it
ions to b
id and short posit
ions to offer. The methodology to calculate
the bid-offer adjustment for a derivat
ive portfol
io involves netting between long and short posit
ions and the group
ing of risk
by strike and tenor based on the hedging strategy where long posit
ions are marked to b
id and short posit
ions marked to offer
in the systems.
13. Financ
ial
instruments
continued
Financ
ial statements
Notes to the financial statements
322
Standard Chartered
– Annual Report 2024
•
Credit valuation adjustment (CVA):
The Group accounts for CVA against the fair value of derivat
ive products. CVA
is an
adjustment to the fair value of the transactions to reflect the possib
il
ity that our counterparties may default and we may
not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market
partic
ipant would
include when deriv
ing a purchase pr
ice to acquire our exposures. CVA is calculated for each subsid
iary, and
with
in each ent
ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.
The Group calculates the CVA by using estimates of future posit
ive exposure, market-
impl
ied probab
il
ity of default (PD) and
recovery rates. Where market-impl
ied data
is not readily available, we use market-based proxies to estimate the PD. Wrong-
way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty,
and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures
the uncertaint
ies assoc
iated with wrong-way risk in the Group’s Prudential Valuation Adjustments framework.
•
Debit valuation adjustment (DVA):
The Group calculates DVA adjustments on its derivat
ive l
iab
il
it
ies to reflect changes
in
its own credit standing. The Group’s DVA adjustments will increase if its credit standing worsens and conversely, decrease
if its credit standing improves. For derivat
ive l
iab
il
it
ies, a DVA adjustment
is determined by applying the Group’s probabil
ity
of default to the Group’s negative expected exposure against the counterparty. The Group’s probabil
ity of default and loss
expected in the event of default is derived based on bond and CDS spreads associated with the Group’s issuances and
market standard recovery levels. The expected exposure is modelled based on the simulat
ion of the underly
ing risk factors
over the expected life of the deal. This simulat
ion methodology
incorporates the collateral posted by the Group and the
effects of master netting agreements.
•
Model valuation adjustment:
Valuation models may have pric
ing deficienc
ies or lim
itat
ions that require a valuation
adjustment. These pric
ing deficienc
ies or lim
itat
ions arise due to the choice, implementat
ion and cal
ibrat
ion of the pr
ic
ing
model.
•
Funding valuation adjustment (FVA):
The Group makes FVA adjustments against derivat
ive products,
includ
ing embedded
derivat
ives. FVA reflects an est
imate of the adjustment to its fair value that a market partic
ipant would make to
incorporate
funding costs or benefits that could arise in relation to the exposure. FVA is calculated by determin
ing the net expected
exposure at a counterparty level and then applying a funding rate to those exposures that reflect the market cost of funding.
The FVA for uncollateralised (includ
ing part
ially collateralised) derivat
ives
incorporates the estimated present value of the
market funding cost or benefit associated with funding these transactions.
•
Other fair value adjustments:
The Group calculates the fair value on the interest rate callable products by calibrat
ing to a set
of market prices with differ
ing matur
ity, expiry and strike of the trades.
•
Day one and other deferrals:
In certain circumstances the in
it
ial fair value is based on a valuation technique which differs
to the transaction price at the time of in
it
ial recognit
ion. However, these ga
ins can only be recognised when the valuation
technique used is based primar
ily on observable market data. In those cases where the
in
it
ially recognised fair value is
based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction
price and the valuation model is not recognised immed
iately
in the income statement. The difference is amortised to the
income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar
ily
represent adjustments taken to reflect the specif
ic terms and cond
it
ions of certa
in derivat
ive contracts wh
ich affect the
terminat
ion value at the measurement date.
In addit
ion, the Group calculates own cred
it adjustment (OCA) on its issued debt designated at fair value, includ
ing structured
notes, in order to reflect changes in its own credit standing. Issued debt is discounted util
is
ing the spread at which sim
ilar
instruments would be issued or bought back at the measurement date as this reflects the value from the perspective of a
market partic
ipant who holds the
ident
ical
item as an asset. OCA measures the difference between the fair value of issued
debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads
from incept
ion date to the measurement date. Under IFRS 9 the change
in the OCA component is reported under other
comprehensive income. The Group’s OCA reserve will increase if its credit standing worsens in comparison to the incept
ion
of the trade and, conversely, decrease if its credit standing improves. The Group’s OCA reserve will reverse over time as its
liab
il
it
ies mature.
Fair value hierarchy – financ
ial
instruments held at fair value
The fair values of quoted financ
ial assets and l
iab
il
it
ies
in active markets are based on current prices. A market is regarded as
active if transactions for the asset or liab
il
ity take place with suffic
ient frequency and volume to prov
ide pric
ing
informat
ion on
an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets
for ident
ical
instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor
liqu
id
ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable
inputs, but in some cases use unobservable inputs.. Valuation techniques used include discounted cash flow analysis and pric
ing
models and, where appropriate, comparison with instruments that have characterist
ics s
im
ilar to those of the
instruments held
by the Group.
Assets and liab
il
it
ies carr
ied at fair value or for which fair values are disclosed have been classif
ied
into three levels according to
the observabil
ity of the s
ign
ificant
inputs used to determine the fair values. Changes in the observabil
ity of s
ign
ificant valuat
ion
inputs during the reporting period may result in a transfer of assets and liab
il
it
ies w
ith
in the fa
ir value hierarchy. The Group
recognises transfers between levels of the fair value hierarchy when there is a sign
ificant change
in either its princ
ipal market
or the level of observabil
ity of the
inputs to the valuation techniques as at the end of the reporting period.
•
Level 1:
Fair value measurements are those derived from unadjusted quoted prices in active markets for ident
ical assets
or liab
il
it
ies.
•
Level 2:
Fair value measurements are those with quoted prices for sim
ilar
instruments in active markets or quoted prices for
ident
ical or s
im
ilar
instruments in inact
ive markets and financial
instruments valued using models where all sign
ificant
inputs
are observable.
•
Level 3:
Fair value measurements are those where inputs which could have a sign
ificant effect on the
instrument’s valuation
are not based on observable market data.
13. Financ
ial
instruments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
323
The following tables show the classif
icat
ion of financ
ial
instruments held at fair value into the valuation hierarchy:
| 2024 | 2023 | |||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |
Assets | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Financ ial instruments held at fair value | ||||||||
through profit or loss | ||||||||
Loans and advances to banks | – | 2,213 | – | 2,213 | – | 2,265 | – | 2,265 |
Loans and advances to customers | – | 5,147 | 1,937 | 7,084 | – | 5,252 | 1,960 | 7,212 |
Reverse repurchase agreements and | ||||||||
other sim ilar secured lend ing | 19 | 82,937 | 3,239 | 86,195 | – | 79,484 | 2,363 | 81,847 |
Debt securit ies and other el ig ible b ills | 32,331 | 42,615 | 1,593 | 76,539 | 27,055 | 24,635 | 1,262 | 52,952 |
Of which: | ||||||||
Issued by Central banks & | ||||||||
Governments | 30,278 | 13,355 | 9 | 43,642 | 23,465 | 6,557 | – | 30,022 |
Issued by corporates other than | ||||||||
financial inst itut ions 1 | 7 | 4,860 | 399 | 5,266 | 4 | 4,062 | 346 | 4,412 |
Issued by financial inst itut ions 1 | 2,046 | 24,400 | 1,185 | 27,631 | 3,586 | 14,016 | 916 | 18,518 |
Equity shares | 5,287 | 8 | 191 | 5,486 | 2,386 | 370 | 184 | 2,940 |
Derivat ive financial instruments | 386 | 80,958 | 128 | 81,472 | 954 | 49,400 | 80 | 50,434 |
Of which: | ||||||||
Foreign exchange | 140 | 72,870 | 37 | 73,047 | 129 | 42,414 | 25 | 42,568 |
Interest rate | 27 | 6,296 | 80 | 6,403 | 37 | 6,293 | 6 | 6,336 |
Credit | – | 388 | 9 | 397 | – | 438 | 47 | 485 |
Equity and stock index options | – | 349 | 2 | 351 | – | 73 | 2 | 75 |
Commodity | 219 | 1,055 | – | 1,274 | 788 | 182 | – | 970 |
Investment securit ies | ||||||||
Debt securit ies and other el ig ible b ills | 50,249 | 38,176 | – | 88,425 | 55,060 | 48,196 | 72 | 103,328 |
Of which: | ||||||||
Issued by Central banks & | ||||||||
Governments | 41,395 | 16,916 | – | 58,311 | 47,225 | 18,983 | 51 | 66,259 |
Issued by corporates other than | ||||||||
financial inst itut ions 1 | – | 490 | – | 490 | 820 | 3,236 | – | 4,056 |
Issued by financial inst itut ions 1 | 8,854 | 20,770 | – | 29,624 | 7,015 | 25,977 | 21 | 33,013 |
Equity shares | 27 | 2 | 965 | 994 | 199 | 6 | 787 | 992 |
Other Assets | – | – | – | – | – | – | 6 | 6 |
Total assets at 31 December 2 | 88,299 | 252,056 | 8,053 | 348,408 | 85,654 | 209,608 | 6,714 | 301,976 |
Liab il it ies | ||||||||
Financ ial instruments held at fair value | ||||||||
through profit or loss | ||||||||
Deposits by banks | – | 1,522 | 371 | 1,893 | – | 1,560 | 334 | 1,894 |
Customer accounts | – | 19,058 | 2,714 | 21,772 | – | 15,970 | 1,278 | 17,248 |
Repurchase agreements and other | ||||||||
sim ilar secured borrow ing | – | 33,539 | – | 33,539 | – | 41,283 | – | 41,283 |
Debt securit ies in issue | – | 12,317 | 1,414 | 13,731 | – | 9,776 | 1,041 | 10,817 |
Short posit ions | 8,789 | 5,558 | 180 | 14,527 | 7,152 | 4,591 | 103 | 11,846 |
Derivat ive financial instruments | 419 | 81,387 | 258 | 82,064 | 749 | 55,116 | 196 | 56,061 |
Of which: | ||||||||
Foreign exchange | 183 | 69,684 | 8 | 69,875 | 122 | 45,314 | 10 | 45,446 |
Interest rate | 14 | 8,586 | 23 | 8,623 | 46 | 8,262 | 5 | 8,313 |
Credit | – | 2,131 | 189 | 2,320 | – | 945 | 162 | 1,107 |
Equity and stock index options | – | 157 | 37 | 194 | – | 147 | 19 | 166 |
Commodity | 222 | 829 | 1 | 1,052 | 581 | 448 | – | 1,029 |
Other Liab il it ies | – | – | – | – | – | – | 8 | 8 |
Total liab il it ies at 31 December | 9,208 | 153,381 | 4,937 | 167,526 | 7,901 | 128,296 | 2,960 | 139,157 |
1
Includes covered bonds of $3,727 mill
ion (2023: $7,509 m
ill
ion), secur
it
ies
issued by Multilateral Development Banks/International Organisat
ions of $10,679 m
ill
ion
(2023: $24,192 mill
ion), and State-owned agenc
ies and development banks of $16,759 mill
ion(2023: $7,564 m
ill
ion)
2
The table above does not include held for sale assets of $5 mill
ion (2023: $n
il) .These are reported in Note 21 together with their fair value hierarchy
The fair value of financ
ial assets and financial l
iab
il
it
ies class
if
ied as Level 2
in the fair value hierarchy that are subject to
complex modelling techniques is $739 mill
ion (2023: $940 m
ill
ion) and $320 m
ill
ion (2023: $288 m
ill
ion) respect
ively.
There were no sign
ificant changes to valuat
ion or levelling approaches in 2024.
There were no sign
ificant transfers of financial assets and l
iab
il
it
ies measured at fa
ir value between Level 1 and Level 2 during
the year.
13. Financ
ial
instruments
continued
Financ
ial statements
Notes to the financial statements
324
Standard Chartered
– Annual Report 2024
Fair value hierarchy – financ
ial
instruments measured at amortised cost
The following table shows the carrying amounts and incorporates the Group’s estimate of fair values of those financ
ial assets
and liab
il
it
ies not presented on the Group’s balance sheet at fa
ir value. These fair values may be different from the actual
amount that will be received or paid on the settlement or maturity of the financ
ial
instrument. For certain instruments, the fair
value may be determined using assumptions for which no observable prices are available.
| 2024 | 2023 | |||||||||
Carrying | Fair value | Carrying | Fair value | |||||||
value | Level 1 | Level 2 | Level 3 | Total | value | Level 1 | Level 2 | Level 3 | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Assets | ||||||||||
Cash and balances at | ||||||||||
central banks¹ | 63,447 | – | 63,447 | – | 63,447 | 69,905 | – | 69,905 | – | 69,905 |
Loans and advances to banks | 43,593 | – | 43,430 | 165 | 43,595 | 44,977 | – | 44,921 | – | 44,921 |
of which – reverse repurchase | ||||||||||
agreements and other sim ilar | ||||||||||
secured lending | 2,946 | – | 2,948 | – | 2,948 | 1,738 | – | 1,738 | – | 1,738 |
Loans and advances | ||||||||||
to customers | 281,032 | – | 40,582 | 238,986 | 279,568 | 286,975 | – | 53,472 | 226,211 | 279,683 |
of which – reverse repurchase | ||||||||||
agreements and other sim ilar | ||||||||||
secured lending | 9,660 | – | 9,618 | 42 | 9,660 | 13,996 | – | 13,827 | 169 | 13,996 |
Investment securit ies² | 55,137 | – | 53,050 | 24 | 53,074 | 56,935 | – | 54,419 | 33 | 54,452 |
Other assets¹ | 34,585 | – | 34,585 | – | 34,585 | 38,140 | – | 38,140 | – | 38,140 |
Assets held for sale | 884 | 58 | 353 | 473 | 884 | 701 | 101 | 541 | 59 | 701 |
Total assets at 31 December | 478,678 | 58 | 235,447 | 239,648 | 475,153 | 497,633 | 101 | 261,398 | 226,303 | 487,802 |
Liab il it ies | ||||||||||
Deposits by banks | 25,400 | – | 25,238 | – | 25,238 | 28,030 | – | 28,086 | – | 28,086 |
Customer accounts | 464,489 | – | 461,549 | – | 461,549 | 469,418 | – | 460,224 | – | 460,224 |
Repurchase agreements and | ||||||||||
other sim ilar secured | ||||||||||
borrowing | 12,132 | – | 12,133 | – | 12,133 | 12,258 | – | 12,258 | – | 12,258 |
Debt securit ies in issue | 64,609 | 32,209 | 32,181 | – | 64,390 | 62,546 | 31,255 | 30,859 | – | 62,114 |
Subordinated liab il it ies and | ||||||||||
other borrowed funds | 10,382 | 9,599 | 429 | – | 10,028 | 12,036 | 11,119 | 336 | – | 11,455 |
Other liab il it ies¹ | 44,047 | – | 44,047 | – | 44,047 | 38,663 | – | 38,663 | – | 38,663 |
Liab il it ies held for sale | 360 | 89 | 271 | – | 360 | 726 | 54 | 672 | – | 726 |
Total liab il it ies at 31 December | 621,419 | 41,897 | 575,848 | – | 617,745 | 623,677 | 42,428 | 571,098 | – | 613,526 |
1
The carrying amount of these financ
ial
instruments is considered to be a reasonable approximat
ion of fa
ir value as they are short-term in nature or reprice to
current market rates frequently
2
Includes Government bonds and Treasury bills of $23,150 mill
ion at 31 December 2024 (31 December 2023: $19,422 m
ill
ion)
Loans and advances to customers by client segment
1
| 2024 | 2023 | |||||||||||
Carrying value | Fair value | Carrying value | Fair value | |||||||||
Stage 1 | Stage 1 | Stage 1 | Stage 1 | |||||||||
and | and | and | and | |||||||||
Stage 3 | stage 2 | Total | Stage 3 | stage 2 | Total | Stage 3 | stage 2 | Total | Stage 3 | stage 2 | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Corporate & | ||||||||||||
Investment | ||||||||||||
Banking | 1,298 | 137,006 138,304 | 1,174 | 137,234 138,408 | 1,975 | 128,430 | 130,405 | 1,910 | 125,841 | 127,751 | ||
Wealth & | ||||||||||||
Retail Banking | 858 | 118,390 | 119,248 | 858 | 116,823 | 117,681 | 724 | 125,335 | 126,059 | 721 | 120,701 | 121,422 |
Ventures | 1 | 1,388 | 1,389 | – | 1,388 | 1,388 | – | 1,033 | 1,033 | – | 1,032 | 1,032 |
Central & | ||||||||||||
other items | 98 | 21,993 | 22,091 | 98 | 21,993 | 22,091 | 209 | 29,269 | 29,478 | 209 | 29,269 | 29,478 |
At 31 December | 2,255 278,777 | 281,032 | 2,130 | 277,438 | 279,568 | 2,908 | 284,067 | 286,975 | 2,840 | 276,843 | 279,683 | |
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing: carrying value $9,660 mill
ion and fa
ir value $9,660 mill
ion
(31 December 2023: $13,996 mill
ion and $13,996 m
ill
ion respect
ively)
13. Financ
ial
instruments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
325
Fair value of financ
ial
instruments
Level 3 Summary and sign
ificant unobservable
inputs
The following table presents the Group’s primary Level 3 financ
ial
instruments which are held at fair value. The table also
presents the valuation techniques used to measure the fair value of those financ
ial
instruments, the sign
ificant unobservable
inputs, the range of values for those inputs and the weighted average of those inputs:
Value as at | ||||||
31 December 2024 | ||||||
Assets | Liab il it ies | Princ ipal valuat ion | Sign ificant | Weighted | ||
Instrument | $mill ion | $mill ion | technique | unobservable inputs | Range 1 | average 2 |
Loans and advances | 1,937 | – | Discounted cash flows | Price/yield | 1.0% – 100% | 20.8% |
to customers | Recovery rate | 93.2% – 95.6% | 95.1% | |||
Reverse repurchase agreements | 3,239 | – | Discounted cash flows | Repo curve | 2.0% – 7.6% | 6.2% |
and other sim ilar secured lend ing | Price/yield | 2.3% – 10.5% | 6.4% | |||
Debt securit ies, alternat ive tier | 1,584 | – | Discounted cash flows | Price/yield | 0.7% – 15.3% | 6.9% |
one and other elig ible secur it ies | Recovery rate | 0.01% – 16.3% | 9.2% | |||
Government bonds and | 9 | – | Discounted cash flows | Price/yield | 23.5% – 23.5% | 23.5% |
treasury bills | ||||||
Equity shares (includes private | 1,156 | – | Comparable | EV/EBITDA multiples | 5.3x – 18.1x | 14.8x |
equity investments) | pric ing/y ield | EV/Revenue multiples | 8.5x – 12.9x | 9.0x | ||
P/E multiples | 17.9x – 48.3x | 46.9x | ||||
P/B multiples | 0.3x – 3.2x | 1.3x | ||||
P/S multiples | 0.2x – 1.3x | 0.2x | ||||
Liqu id ity discount | 10.0% – 30.0% | 16.8% | ||||
Discounted cash flows | Discount rates | 8.3% – 20.4% | 10.1% | |||
Option pric ing model | Equity value based on | 5.7x – 23.6x | 16.2x | |||
EV/Revenue multiples | ||||||
Equity value based on | 10.1x – 10.1x | 10.1x | ||||
EV/EBITDA multiples | ||||||
Equity value based on | 30.2% – 50.0% | 30.5% | ||||
volatil ity | ||||||
Derivat ive financial instruments | ||||||
of which: | ||||||
Foreign exchange | 37 | 8 | Option pric ing model | Foreign exchange | 10.2% – 46.2% | 42.0% |
option impl ied volat il ity | ||||||
Interest rate curves | 3.5% – 9.0% | 4.2% | ||||
Foreign exchange | (0.03)% – 34.3% | 6.1% | ||||
curves | ||||||
Commodity | – | 1 | Discounted cash flows | Commodity prices | $383.0 – $391.0 | $387.0 |
CM-CM correlation | 73.7% – 97.9% | 86.0% | ||||
Interest rate | 80 | 23 | Discounted cash flows | Interest rate curves | 3.5% – 43.9% | 5.1% |
Option pric ing model | Bond option impl ied | 2.3% – 4.7% | 3.5% | |||
volatil ity | ||||||
Credit | 9 | 189 | Discounted cash flows | Credit spreads | 0.1% – 1.9% | 0.9% |
Price/yield | 4.8% – 6.6% | 5.5% | ||||
Equity and stock index | 2 | 37 | Internal pric ing model | Equity-Equity correlation | 44.9% – 100% | 80.0% |
Equity-FX correlation | (36.4)% – 48.9% | 5.0% | ||||
Deposits by banks | – | 371 | Discounted cash flows | Credit spreads | 0.2% – 3.5% | 1.5% |
Customer accounts | – | 2,714 | Internal pric ing model | Equity-Equity correlation | 44.9% – 100% | 80.0% |
Equity-FX correlation | (36.4)% – 48.9% | 5.0% | ||||
Discounted cash flows | Interest rate curves | 1.4% – 4.4% | 4.0% | |||
Price/yield | 0.7% – 13.0% | 8.5% | ||||
Debt securit ies in issue | – | 1,414 | Discounted cash flows | Credit spreads | 0.05% – 2.0% | 0.8% |
Price/yield | 6.2% – 14.8% | 12.7% | ||||
Interest rate curves | 3.5% – 4.4% | 4.1% | ||||
Internal pric ing model | Equity-Equity correlation | 44.9% – 100% | 80.0% | |||
Equity-FX correlation | (36.4)% – 48.9% | 5.0% | ||||
Option pric ing model | Bond option impl ied | 4.0% – 15% | 12.5% | |||
volatil ity | ||||||
Short posit ions | – | 180 | Discounted cash flows | Price/yield | 5.9% – 12.7% | 6.3% |
Total | 8,053 | 4,937 | ||||
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group’s Level 3 financ
ial
instruments as at
31 December 2024. The ranges of values used are reflective of the underlying characterist
ics of these Level 3 financial
instruments based on the market
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group’s Level 3
financial
instruments
2
Weighted average for non-derivat
ive financial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
ind
icator
13. Financ
ial
instruments
continued
Financ
ial statements
Notes to the financial statements
326
Standard Chartered
– Annual Report 2024
Value as at | ||||||
31 December 2023 | ||||||
Assets | Liab il it ies | Princ ipal valuat ion | Sign ificant | Weighted | ||
Instrument | $mill ion | $mill ion | technique | unobservable inputs | Range 1 | average 2 |
Loans and advances | 1,960 | – | Discounted cash flows | Price/yield | 1.7% – 100% | 12.0% |
to customers | Credit spreads | 0.1% – 1.0% | 0.6% | |||
Reverse repurchase | 2,363 | – | Discounted cash flows | Repo curve | 5.1% – 7.6% | 6.3% |
agreements and other | Price/yield | (2.7)%- 10.3% | 6.0% | |||
sim ilar secured lend ing | ||||||
Debt securit ies, alternat ive | 1,283 | – | Discounted cash flows | Price/yield | (14.0)% – 25.8% | 10.1% |
tier one and other elig ible | Recovery rates | 0.1% – 1.0% | 0.2% | |||
securit ies | Internal pric ing model | Equity-Equity correlation | 44.1%-100% | 80.7% | ||
Equity-FX correlation | (35.9)%-45.5% | 14.2% | ||||
Government bonds and | 51 | – | Discounted cash flows | Price/yield | 17.7% – 21.8% | 20.6% |
treasury bills | ||||||
Equity shares (includes private | 971 | – | Comparable pric ing/y ield EV/EBITDA multiples | 13.8x – 15.6x | 14.9x | |
equity investments) | EV/Revenue multiples | 9.3x – 30.9x | 15.8x | |||
P/E multiples | 10.6x – 51.8x | 45.7x | ||||
P/B multiples | 0.3x – 2.7x | 1.6x | ||||
P/S multiples | 0.2x – 1.6x | 0.3x | ||||
Liqu id ity discount | 7.5% – 20.0% | 15.1% | ||||
Discounted cash flows | Discount rates | 9.2% – 35.6% | 17.0% | |||
Option pric ing model | Equity value based on | 8.4x – 42.5x | 27.5x | |||
EV/Revenue multiples | ||||||
Equity value based on | 3.1x – 3.1x | 3.1x | ||||
EV/EBITDA multiples | ||||||
Equity value based on | 21.0% – 65.0% | 30.1% | ||||
volatil ity | ||||||
Other Assets | 6 | – | NAV | N/A | N/A | N/A |
Derivat ive financial | ||||||
instruments of which: | ||||||
Foreign exchange | 25 | 10 | Option pric ing model | Foreign exchange | 0.5% – 51% | 31.8% |
option impl ied volat il ity | ||||||
Discounted cash flows | Interest rate curves | 3.6% – 5.8% | 3.8% | |||
Foreign exchange | 0.6% – 64.2% | 12.8% | ||||
curves | ||||||
Interest rate | 6 | 5 | Discounted cash flows | Interest rate curves | 3.6% – 8.6% | 5.0% |
Credit | 47 | 162 | Discounted cash flows | Credit spreads | 1.0% – 1.0% | 1.0% |
Price/yield | 1.7% – 16.3% | 8.6% | ||||
Equity and stock index | 2 | 19 | Internal pric ing model | Equity-Equity correlation | 44.1% – 100% | 80.7% |
– | – | Equity-FX correlation | (35.9)% – 45.5% | 14.2% | ||
Deposits by banks | – | 334 | Discounted cash flows | Credit spreads | 0.1% – 3.4% | 1.9% |
Customer accounts | – | 1,278 | Discounted cash flows | Credit spreads | 1.0% – 2.0% | 1.2% |
Interest rate curves | 2.9% – 8.6% | 6.1% | ||||
Price/yield | 4.8% – 15.2% | 9.9% | ||||
Internal pric ing model | Equity-Equity correlation | 44.1% – 100% | 80.7% | |||
Equity-FX correlation | (35.9)% – 45.5% | 14.2% | ||||
Debt securit ies in issue | – | 1,041 | Discounted cash flows | Credit spreads | 0.3% – 1.6% | 1.1% |
Price/yield | 6.6% – 20.9% | 17.9% | ||||
Interest rate curves | 2.9% – 5.3% | 4.4% | ||||
Internal pric ing model | Equity-Equity correlation | 44.1% – 100% | 80.7% | |||
Equity-FX correlation | (35.9)% – 45.5% | 14.2% | ||||
Bond option impl ied | 2.9% – 5.3% | 4.4% | ||||
volatil ity | ||||||
Short posit ion | – | 103 | Discounted cash flows | Price/yield | 7.1% – 7.1% | 7.1% |
Other Liab il it ies | – | 8 | Comparable pric ing/y ield EV/EBITDA multiples | 5.8x – 11.2x | 8.5x | |
Total | 6,714 | 2,960 | ||||
1
The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group’s Level 3 financ
ial
instruments as at
31 December 2023. The ranges of values used are reflective of the underlying characterist
ics of these Level 3 financial
instruments based on the market
condit
ions at the balance sheet date. However, these ranges of values may not represent the uncerta
inty in fair value measurements of the Group’s Level 3
financial
instruments
2
Weighted average for non-derivat
ive financial
instruments has been calculated by weight
ing
inputs by the relative fair value. Weighted average for derivat
ives
has been provided by weight
ing
inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful
ind
icator
13. Financ
ial
instruments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
327
The following section describes the sign
ificant unobservable
inputs ident
ified
in the valuation technique table:
•
Comparable price/yield
is a valuation methodology in which the price of a comparable instrument is used to estimate the
fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash flows
in a discounted cash flow model. Valuation using comparable instruments can be done by calculating an impl
ied y
ield (or
spread over a liqu
id benchmark) from the pr
ice of a comparable instrument, then adjust
ing that y
ield (or spread) to derive
a value for the instrument. The adjustment should account for relevant differences in the financ
ial
instruments such as
maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument
and the instrument being valued in order to establish the value of the instrument (for example, deriv
ing a fa
ir value for a
junior unsecured bond from the pr
ice of a senior secured bond). An increase in price, in isolat
ion, would result
in a favourable
movement in the fair value of the asset. An increase in yield, in isolat
ion, would result
in an unfavourable movement in the
fair value of the asset
•
Correlation
is the measure of how movement in one variable influences the movement in another variable. An equity
correlation is the correlation between two equity instruments, an interest rate correlation refers to the correlation between
two swap rates, while commodity correlation is correlation between two commodity underlying prices
•
Commodity price
curves is the term structure for forward rates over a specif
ied per
iod
•
Credit spread
represents the addit
ional y
ield that a market partic
ipant would demand for tak
ing exposure to the Credit Risk
of an instrument
•
Discount rate
refers to the rate of return used to convert expected cash flows into present value
•
Equity-FX correlation
is the correlation between equity instrument and foreign exchange instrument
•
EV/EBITDA multiple
is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat
ion and Amort
isat
ion
(EBITDA). EV is the aggregate market capital
isat
ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA
multiple will result in a favourable movement in the fair value of the unlisted firm
•
EV/Revenue multiple
is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a
favourable movement in the fair value of the unlisted firm
•
Foreign exchange curves
is the term structure for forward rates and swap rates between currency pairs over a
specif
ied per
iod
•
Net asset value (NAV)
is the value of an entity’s assets after deducting any liab
il
it
ies
•
Interest rate curves
is the term structure of interest rates and measures of future interest rates at a particular point in time
•
Liqu
id
ity discounts in the valuation of unlisted investments
are primar
ily appl
ied to the valuation of unlisted firms’
investments to reflect the fact that these stocks are not actively traded. An increase in liqu
id
ity discount will result in an
unfavourable movement in the fair value of the unlisted firm
•
Price-Earnings (P/E) multiple
is the ratio of the market value of the equity to the net income after tax. An increase in P/E
multiple will result in a favourable movement in the fair value of the unlisted firm
•
Price-Book (P/B) multiple
is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will
result in a favourable movement in the fair value of the unlisted firm
•
Price-Sales (P/S) multiple
is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a
favourable movement in the fair value of the unlisted firm
•
Recovery rates
is the expectation of the rate of return resulting from the liqu
idat
ion of a particular loan. As the probabil
ity
of default increases for a given instrument, the valuation of that instrument will increas
ingly reflect
its expected recovery
level assuming default. An increase in the recovery rate, in isolat
ion, would result
in a favourable movement in the fair value
of the loan
•
Repo curve
is the term structure of repo rates on repos and reverse repos at a particular point in time
•
Volatil
ity
represents an estimate of how much a particular instrument, parameter or index will change in value over time.
Generally, the higher the volatil
ity, the more expens
ive the option will be
Financ
ial statements
Notes to the financial statements
328
Standard Chartered
– Annual Report 2024
13. Financ
ial
instruments
continued
Level 3 movement tables – financial assets
The table below analyses movements in Level 3 financ
ial assets carr
ied at fair value.
Assets
Held at fair value through profit or loss | Investment securit ies | |||||||||
Reverse | ||||||||||
repurchase | Debt | Debt | ||||||||
agreements | securit ies, | securit ies, | ||||||||
and other | alternative | alternative | ||||||||
Loans and | Loans and | sim ilar | tier one | Derivat ive | tier one | |||||
advances | advances to | secured | and other | Equity | Other | financial | and other | Equity | ||
to banks | customers | lending | elig ible b ills | shares | Assets | instruments | elig ible b ills | shares | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
At 01 January 2024 | – | 1,960 | 2,363 | 1,262 | 184 | 6 | 80 | 72 | 787 | 6,714 |
Total (losses)/gains | ||||||||||
recognised in | ||||||||||
income statement | (1) | 8 | 73 | (114) | (15) | – | (57) | – | – | (106) |
Net trading income | (1) | 8 | 73 | (56) | (15) | – | (57) | – | – | (48) |
Other operating | ||||||||||
income | – | – | – | (58) | – | – | – | – | – | (58) |
Total (losses)/gains | ||||||||||
recognised in other | ||||||||||
comprehensive | ||||||||||
income (OCI) | – | – | – | – | – | – | – | (11) | 50 | 39 |
Fair value through | ||||||||||
OCI reserve | – | – | – | – | – | – | – | – | 74 | 74 |
Exchange difference | – | – | – | – | – | – | – | (11) | (24) | (35) |
Purchases | – | 1,853 | 6,161 | 1,337 | 24 | – | 227 | – | 145 | 9,747 |
Sales | – | (2,062) | (4,716) | (907) | (2) | – | (160) | – | (19) | (7,866) |
Settlements | (7) | (42) | (782) | – | – | – | – | – | – | (831) |
Transfers out 1 | (13) | (263) | – | (1) | – | (6) | (1) | (61) | (2) | (347) |
Transfers in 2 | 21 | 483 | 140 | 16 | – | – | 39 | – | 4 | 703 |
At 31 December 2024 | – | 1,937 | 3,239 | 1,593 | 191 | – | 128 | – | 965 | 8,053 |
Recognised in the | ||||||||||
income statement 3 | – | 7 | 1 | 7 | (13) | – | (9) | – | – | (7) |
At 01 January 2023 | 21 | 1,805 | 1,998 | 1,153 | 182 | 7 | 44 | – | 655 | 5,865 |
Total (losses)/gains | ||||||||||
recognised in | ||||||||||
income statement | – | (35) | (107) | (292) | 4 | (1) | 12 | – | – | (419) |
Net trading income | – | (35) | (107) | (304) | 5 | – | 12 | – | – | (429) |
Other operating | ||||||||||
income | – | – | – | 12 | (1) | (1) | – | – | – | 10 |
Total (losses)/gains | ||||||||||
recognised in other | ||||||||||
comprehensive | ||||||||||
income (OCI) | – | – | – | – | – | – | – | (1) | 101 | 100 |
Fair value through | ||||||||||
OCI reserve | – | – | – | – | – | – | – | – | 108 | 108 |
Exchange difference | – | – | – | – | – | – | – | (1) | (7) | (8) |
Purchases | 22 | 1,784 | 5,902 | 1,082 | 8 | – | 189 | 21 | 61 | 9,069 |
Sales | (22) | (1,133) | (3,942) | (518) | (10) | – | (115) | (23) | (5) | (5,768) |
Settlements | – | (442) | (1,488) | (305) | – | – | (25) | – | – | (2,260) |
Transfers out 1 | (21) | (225) | – | (6) | – | – | (27) | (16) | (32) | (327) |
Transfers in 2 | – | 206 | – | 148 | – | – | 2 | 91 | 7 | 454 |
At 31 December 2023 | – | 1,960 | 2,363 | 1,262 | 184 | 6 | 80 | 72 | 787 | 6,714 |
Recognised in the | ||||||||||
income statement 3 | – | (3) | 3 | (1) | 4 | – | (12) | – | – | (9) |
1
Transfers out includes loans and advances, debt securit
ies, alternat
ive tier one and other elig
ible b
ills, equity shares, other assets and derivat
ive financial
instruments where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2
2
Transfers in primar
ily relate to loans and advances, repurchase agreements, debt secur
it
ies, alternat
ive tier one and other elig
ible b
ills, equity shares and
derivat
ive financial
instruments where the valuation parameters become unobservable during the year
3
Represents Total unrealised (losses)/gains recognised in the income statement, with
in net trad
ing income, relating to change in fair value of assets
13. Financ
ial
instruments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
329
Level 3 movement tables – financial l
iab
il
it
ies
Debt | Derivat ive | ||||||
Deposits | Customer | securit ies | financial | Short | Other | ||
by banks | accounts | in issue | instruments | posit ions | liab il it ies | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
At 01 January 2024 | 334 | 1,278 | 1,041 | 196 | 103 | 8 | 2,960 |
Total losses/(gains) recognised in income statement | |||||||
– net trading income | 49 | (27) | 48 | (6) | 3 | (8) | 59 |
Issues | 388 | 3,068 | 4,244 | 507 | 177 | – | 8,384 |
Settlements | (400) | (1,627) | (2,795) | (438) | (103) | – | (5,363) |
Transfers out 1 | – | (26) | (1,194) | (7) | – | – | (1,227) |
Transfers in 2 | – | 48 | 70 | 6 | – | – | 124 |
At 31 December 2024 | 371 | 2,714 | 1,414 | 258 | 180 | – | 4,937 |
Recognised in the income statement 3 | 29 | 5 | 2 | (13) | – | – | 23 |
At 01 January 2023 | 288 | 972 | 451 | 121 | 40 | 6 | 1,878 |
Total losses/(gains) recognised in income statement | |||||||
– net trading income | 7 | (6) | 39 | (52) | 3 | 3 | (6) |
Issues | 628 | 1,789 | 1,489 | 447 | 100 | – | 4,453 |
Settlements | (585) | (1,491) | (1,218) | (312) | (40) | – | (3,646) |
Transfers out 1 | (4) | (9) | (85) | (11) | – | (1) | (110) |
Transfers in 2 | – | 23 | 365 | 3 | – | – | 391 |
At 31 December 2023 | 334 | 1,278 | 1,041 | 196 | 103 | 8 | 2,960 |
Recognised in the income statement 3 | – | (21) | 6 | (47) | – | – | (62) |
1
Transfers out during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive financial
instruments where the valuation parameters
became observable during the year and were transferred to Level 2 financ
ial l
iab
il
it
ies
2
Transfers in during the year primar
ily relate to customer accounts, debt secur
it
ies
in issue and derivat
ive financial
instruments where the valuation parameters
become unobservable during the year
3
Represents Total unrealised losses/(gains) recognised in the income statement, with
in net trad
ing income, relating to change in fair value of liab
il
it
ies
13. Financ
ial
instruments
continued
Financ
ial statements
Notes to the financial statements
330
Standard Chartered
– Annual Report 2024
Sensit
iv
it
ies
in respect of the fair values of Level 3 assets and liab
il
it
ies
Sensit
iv
ity analysis is performed on products with sign
ificant unobservable
inputs. The Group applies a 10 per cent increase
or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations.
The percentage shift is determined by statist
ical analys
is performed on a set of reference prices based on the composit
ion
of the Group’s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the
levels of the unobservable parameters. The Level 3 sensit
iv
ity analysis assumes a one-way market move and does not consider
offsets for hedges.
Held at fair value through profit or loss | Fair value through other comprehensive income | |||||
Favourable | Unfavourable | Favourable | Unfavourable | |||
Net exposure | changes | changes | Net exposure | changes | changes | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Financ ial instruments held at fair value | ||||||
Loans and advances | 1,937 | 1,985 | 1,862 | – | – | – |
Reverse Repurchase agreements and | ||||||
other sim ilar secured lend ing | 3,239 | 3,339 | 3,138 | – | – | – |
Debt securit ies, alternat ive tier one and | ||||||
other elig ible b ills | 1,593 | 1,643 | 1,542 | – | – | – |
Equity shares | 191 | 210 | 172 | 965 | 1,032 | 888 |
Other Assets | – | – | – | – | – | – |
Derivat ive financial instruments | (130) | (115) | (147) | – | – | – |
Customers accounts | (2,714) | (2,540) | (2,883) | – | – | – |
Deposits by banks | (371) | (371) | (371) | – | – | – |
Short posit ions | (180) | (178) | (182) | – | – | – |
Debt securit ies in issue | (1,414) | (1,352) | (1,476) | – | – | – |
Other Liab il it ies | – | – | – | – | – | – |
At 31 December 2024 | 2,151 | 2,621 | 1,655 | 965 | 1,032 | 888 |
Financ ial instruments held at fair value | ||||||
Loans and advances | 1,960 | 1,985 | 1,918 | – | – | – |
Reverse Repurchase agreements and | ||||||
other sim ilar secured lend ing | 2,363 | 2,390 | 2,336 | – | – | – |
Debt securit ies, alternat ive tier one and | ||||||
other elig ible b ills | 1,262 | 1,309 | 1,193 | 72 | 78 | 66 |
Equity shares | 184 | 202 | 166 | 787 | 866 | 708 |
Other Assets | 6 | 7 | 5 | – | – | – |
Derivat ive financial instruments | (116) | (75) | (157) | – | – | – |
Customers accounts | (1,278) | (1,191) | (1,365) | – | – | – |
Deposits by banks | (334) | (334) | (334) | – | – | – |
Short posit ions | (103) | (101) | (105) | – | – | – |
Debt securit ies in issue | (1,041) | (966) | (1,115) | – | – | – |
Other Liab il it ies | (8) | (7) | (9) | – | – | – |
At 31 December 2023 | 2,895 | 3,219 | 2,533 | 859 | 944 | 774 |
The reasonably possible alternatives could have increased or decreased the fair values of financ
ial
instruments held at
fair value through profit or loss and those classif
ied as fa
ir value through other comprehensive income by the amounts
disclosed below.
| Fair value changes | ||||
Possible increase | Possible decrease | |||
2024 | 2023 | 2024 | 2023 | |
Financ ial instruments | $mill ion | $mill ion | $mill ion | $mill ion |
Held at fair value through profit or loss | 470 | 324 | (496) | (362) |
Fair value through other comprehensive income | 67 | 85 | (77) | (85) |
Financ
ial statements
Standard Chartered
– Annual Report 2024
331
ive financial
instruments
Fair values may be obtained from quoted market prices in active markets, recent market transactions, and valuation
techniques, includ
ing d
iscounted cash flow models and option pric
ing models, as appropr
iate. Where the in
it
ially
recognised fair value of a derivat
ive contract
is based on a valuation model that uses inputs which are not observable
in the market, it follows the same in
it
ial recognit
ion account
ing policy as for other financ
ial assets and l
iab
il
it
ies.
All derivat
ives are carr
ied as assets when fair value is posit
ive and as l
iab
il
it
ies when fa
ir value is negative.
Hedge accounting
Under certain condit
ions, the Group may des
ignate a recognised asset or liab
il
ity, a firm commitment, highly probable
forecast transaction or net investment of a foreign operation into a formal hedge accounting relationsh
ip w
ith a derivat
ive
that has been entered to manage interest rate and/or foreign exchange risks present in the hedged item. The Group, as a
policy choice to continue to apply hedge accounting in accordance with IAS 39. The Group applied IBOR reform Phase 2
reliefs in respect of hedging relationsh
ips d
irectly affected by IBOR reform.
There are three categories of hedge relationsh
ips:
•
Fair value hedge: to manage the fair value of interest rate and/or foreign currency risks of recognised assets or liab
il
it
ies
or firm commitments
•
Cash flow hedge: to manage interest rate or foreign exchange risk of highly probable future cash flows attributable to
a recognised asset or liab
il
ity, or a forecasted transaction
•
Net investment hedge: to manage the structural foreign exchange risk of an investment in a foreign operation
The Group assesses, both at hedge incept
ion and on a quarterly bas
is, whether the derivat
ives des
ignated in hedge
relationsh
ips are h
ighly effective in offsetting changes in fair values or cash flows of hedged items. Hedges are considered
to be highly effective if all the following criter
ia are met:
•
At incept
ion of the hedge and throughout
its life, the hedge is prospectively expected to be highly effective in achiev
ing
offsetting changes in fair value or cash flows attributable to the hedged risk
•
Prospective and retrospective effectiveness of the hedge should be with
in a range of 80–125%. Th
is is tested using
regression analysis
•
This is tested using regression analysis where the slope of the regression line must be between -0.80 and -1.25 and
the data pairs between the hedged item and the hedging instrument are regressed to a 95% confidence interval.
The regression co-effic
ient (R squared), wh
ich measures the correlation between the variables in the regression, is at
least 80%
In the case of the hedge of a forecast transaction, the transaction must have a high probabil
ity of occurr
ing and must
present an exposure to variat
ions
in cash flows that are expected to affect reported profit or loss.
Fair value hedge
Changes in the fair value of derivat
ives that are des
ignated and qualify as fair value hedging instruments are recorded in
net trading income, together with any changes in the fair value of the hedged asset or liab
il
ity that are attributable to the
hedged risk. If the hedge no longer meets the criter
ia for hedge account
ing, the adjustment to the carrying amount of a
hedged item for which the effective interest method is used is amortised to the income statement over the remain
ing
term to maturity of the hedged item. If the hedged item is sold or repaid, the unamortised fair value adjustment is
recognised immed
iately
in the income statement. For financ
ial assets class
if
ied as fa
ir value through other comprehensive
income, the hedge accounting adjustment attributable to the hedged risk is included in net trading income to match the
hedging derivat
ive.
Cash flow hedge
The effective portion of changes in the fair value of derivat
ives that are des
ignated and qualify as cash flow hedging
instruments are in
it
ially recognised in other comprehensive income, accumulating in the cash flow hedge reserve with
in
equity. These amounts are subsequently recycled to the income statement in the periods when the hedged item affects
profit or loss. Both the derivat
ive fa
ir value movement and any recycled amount are recorded in the ‘Cashflow hedges’ line
item in other comprehensive income.
The Group assesses hedge effectiveness using the hypothetical derivat
ive method, wh
ich creates a derivat
ive
instrument
to serve as a proxy for the hedged transaction. The terms of the hypothetical derivat
ive match the cr
it
ical terms of the
hedged item and it has a fair value of zero at incept
ion. The hypothet
ical derivat
ive and the actual der
ivat
ive are
regressed to establish the statist
ical s
ign
ificance of the hedge relat
ionsh
ip. Any
ineffect
ive port
ion of the gain or loss
on the hedging instrument is recognised in the net trading income immed
iately.
If a cash flow hedge is discont
inued, the amount accumulated
in the cash flow hedge reserve is released to the income
statement as and when the hedged item affects the income statement.
Should the Group consider the hedged future cash flows are no longer expected to occur due to reasons, the cumulative
gain or loss will be immed
iately reclass
if
ied to profit or loss.
Net investment hedge
Hedges of net investments are accounted for in a sim
ilar manner to cash flow hedges, w
ith gains and losses aris
ing on the
effective portion of the hedges recorded in the line ‘Exchange differences on translation of foreign operations’ in other
comprehensive income, accumulating in the translation reserve with
in equ
ity. These amounts remain in equity until the
net investment is disposed of. The ineffect
ive port
ion of the hedges is recognised in the net trading income immed
14. Derivat
ive financial
instruments
continued
Financ
ial statements
Notes to the financial statements
332
Standard Chartered
– Annual Report 2024
The tables below analyse the notional princ
ipal amounts and the pos
it
ive and negat
ive fair values of derivat
ive financial
instruments. Notional princ
ipal amounts are the amounts of pr
inc
ipal underly
ing the contract at the reporting date.
| 2024 | 2023 | |||||
Notional | Notional | |||||
princ ipal | princ ipal | |||||
amounts | Assets | Liab il it ies | amounts | Assets | Liab il it ies | |
Derivat ives | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Foreign exchange derivat ive contracts: | ||||||
Forward foreign exchange contracts | 4,923,991 | 54,913 | 51,128 | 3,628,067 | 30,897 | 32,601 |
Currency swaps and options | 1,377,308 | 18,104 | 18,720 | 1,145,702 | 11,671 | 12,845 |
6,301,299 | 73,017 | 69,848 | 4,773,769 | 42,568 | 45,446 | |
Interest rate derivat ive contracts: | ||||||
Swaps | 6,267,261 | 20,600 | 22,282 | 4,841,616 | 53,735 | 55,241 |
Forward rate agreements and options | 294,705 | 2,233 | 2,771 | 313,253 | 2,057 | 2,520 |
6,561,966 | 22,833 | 25,053 | 5,154,869 | 55,792 | 57,761 | |
Exchange traded futures and options | 383,528 | 30 | 27 | 325,051 | 39 | 47 |
Credit derivat ive contracts | 227,675 | 397 | 2,320 | 281,130 | 485 | 1,107 |
Equity and stock index options | 10,678 | 351 | 194 | 8,671 | 75 | 166 |
Commodity derivat ive contracts | 142,393 | 1,274 | 1,052 | 117,436 | 970 | 1,029 |
Gross total derivat ives | 13,627,539 | 97,902 | 98,494 | 10,660,926 | 99,929 | 105,556 |
Offset 1 | – | (16,430) | (16,430) | – | (49,495) | (49,495) |
Total derivat ives | 13,627,539 | 81,472 | 82,064 | 10,660,926 | 50,434 | 56,061 |
1
In 2024, the Group migrated contracts from Collateralized to Market (CTM) to Settled to Market (STM) for house cleared contracts with London Clearing House
The Group lim
its exposure to cred
it losses in the event of default by entering into master netting agreements with certain
market counterparties. As required by IAS 32, exposures are only presented net in these accounts where they are subject to
legal right of offset and intended to be settled net in the ordinary course of business.
The Group applies balance sheet offsetting only in the instance where we are able to demonstrate legal enforceabil
ity of the
right to offset (e.g. via legal opin
ion) and the ab
il
ity and
intent
ion to settle on a net bas
is (e.g. via operational practice).
The Group may enter into economic hedges that do not qualify for IAS 39 hedge accounting treatment, includ
ing der
ivat
ive
such as interest rate swaps, interest rate futures and cross currency swaps to manage interest rate and currency risks of the
Group. These derivat
ives are measured at fa
ir value, with fair value changes recognised in net trading income: refer to Market
Risk (page 247).
Derivat
ives held for hedg
ing
The Group enters into derivat
ive contracts for the purpose of hedg
ing interest rate, currency and structural foreign exchange
risks inherent in assets, liab
il
it
ies and forecast transact
ions. The table below summarises the notional princ
ipal amounts and
carrying values of derivat
ives des
ignated in hedge accounting relationsh
ips at the report
ing date.
Included in the table above are derivat
ives held for hedg
ing purposes as follows:
| 2024 | 2023 | |||||
Notional | Notional | |||||
princ ipal | princ ipal | |||||
amounts | Assets | Liab il it ies | amounts | Assets | Liab il it ies | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Derivat ives des ignated as | ||||||
fair value hedges: | ||||||
Interest rate swaps | 63,840 | 763 | 1,679 | 69,347 | 1,264 | 2,397 |
Currency swaps | 1,035 | – | 56 | 115 | 10 | 6 |
64,875 | 763 | 1,735 | 69,462 | 1,274 | 2,403 | |
Derivat ives des ignated as | ||||||
cash flow hedges: | ||||||
Interest rate swaps | 49,309 | 165 | 282 | 41,834 | 184 | 537 |
Forward foreign exchange contracts | 9,193 | 609 | 1 | 12,071 | 420 | 183 |
Currency swaps | 14,305 | 729 | 2 | 14,321 | 191 | 150 |
72,807 | 1,503 | 285 | 68,226 | 795 | 870 | |
Derivat ives des ignated as net | ||||||
investment hedges: | ||||||
Forward foreign exchange contracts | 14,137 | 300 | 7 | 15,436 | 32 | 41 |
Total derivat ives held for hedg ing | 151,819 | 2,566 | 2,027 | 153,124 | 2,101 | 3,314 |
14. Derivat
ive financial
instruments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
333
Fair value hedges
The Group issues various long-term fixed-rate debt issuances that are measured at amortised cost, includ
ing some
denominated in foreign currency, such as unsecured senior and subordinated debt (see Notes 22 and 27). The Group also holds
various fixed rate debt securit
ies such as government and corporate bonds,
includ
ing some denom
inated in foreign currency
(see Note 13). These assets and liab
il
it
ies held are exposed to changes
in fair value due to movements in market interest and
foreign currency rates.
The Group uses interest rate swaps to exchange fixed rates for floating rates on funding to match floating rates received on
assets, or exchange fixed rates on assets to match floating rates paid on funding. The Group further uses cross- currency swaps
to match the currency of the issued debt or held asset with that of the entity’s functional currency.
Hedge ineffect
iveness from fa
ir value hedges is driven by cross-currency basis risk and interest cashflows mismatch between
the hedging instruments and underlying hedged items. The amortisat
ion of fa
ir value hedge adjustments for hedged items no
longer designated is recognised in net interest income.
At 31 December 2024 the Group held the following interest rate and cross currency swaps as hedging instruments in fair value
hedges of interest and currency risk.
iveness
Change in fair | ||||||||
value used to | Ineffectiveness | |||||||
Carrying Amount | calculate hedge | recognised in | ||||||
Notional | Asset | Liab il ity | ineffect iveness 2 | profit or loss | ||||
Interest rate 1 | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |||
Interest rate swaps – debt securit ies/subord inated | ||||||||
notes issued | 46,832 | 283 | 1,643 | 46 | 2 | |||
Interest rate swaps – loans and advances to customers | 1,334 | 10 | 12 | (5) | – | |||
Interest rate swaps – debt securit ies and other | ||||||||
elig ible b ills | 15,674 | 470 | 24 | 142 | 2 | |||
Interest and currency risk 1 | ||||||||
Cross currency swaps – debt securit ies/subord inated | ||||||||
notes issued | 1,035 | – | 56 | (52) | (1) | |||
Cross currency swaps – debt securit ies and other | ||||||||
elig ible b ills | – | – | – | (10) | – | |||
Total at 31 December 2024 | 64,875 | 763 | 1,735 | 121 | 3 | |||
Interest rate swaps – debt securit ies/subord inated | ||||||||
notes issued | 45,455 | 381 | 2,267 | 271 | (4) | |||
Interest rate swaps – loans and advances to customers | 1,203 | 26 | 1 | (20) | – | |||
Interest rate swaps – debt securit ies and other | ||||||||
elig ible b ills | 22,689 | 857 | 129 | (459) | (17) | |||
Interest and currency risk 1 | ||||||||
Cross currency swaps – debt securit ies/subord inated | ||||||||
notes issued | 70 | – | 6 | (2) | – | |||
Cross currency swaps – debt securit ies and other | ||||||||
elig ible b ills | 45 | 10 | – | 11 | – | |||
Total at 31 December 2023 | 69,462 | 1,274 | 2,403 | (199) | (21) | |||
1
Interest rate swaps are designated in hedges of the fair value of interest rate risk attributable to the hedged item. Cross currency swaps are used to hedge both
interest rate and currency risks. All the hedging instruments are derivat
ives, w
ith changes in fair value includ
ing hedge
ineffect
iveness recorded w
ith
in net
trading income
2
This represents a (loss)/gains change in fair value used for calculating hedge ineffect
14. Derivat
ive financial
instruments
continued
Financ
ial statements
Notes to the financial statements
334
Standard Chartered
– Annual Report 2024
Cumulative | ||||||
balance of | ||||||
fair value | ||||||
Change in the | adjustments | |||||
Accumulated amount of fair value | value used for | from | ||||
hedge adjustments included in the | calculating | de-designated | ||||
Carrying Amount | carrying amount | hedge | hedge | |||
Asset | Liab il ity | Asset | Liab il ity | ineffect iveness 1 | relationsh ips 2 | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Debt securit ies/subord inated | ||||||
notes issued | – | 49,616 | – | 1,485 | 7 | 178 |
Debt securit ies and other el ig ible b ills | 15,183 | – | (353) | – | (130) | 235 |
Loans and advances to customers | 1,330 | – | (4) | – | 5 | 4 |
Total at 31 December 2024 | 16,513 | 49,616 | (357) | 1,485 | (118) | 417 |
Debt securit ies/subord inated | ||||||
notes issued | – | 46,156 | – | 1,761 | (273) | 360 |
Debt securit ies and other el ig ible b ills | 21,473 | – | (553) | – | 431 | 744 |
Loans and advances to customers | 1,183 | – | (20) | – | 20 | 13 |
Total at 31 December 2023 | 22,656 | 46,156 | (573) | 1,761 | 178 | 1,117 |
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
2
Income statement impact of fair value hedges
2024 | 2023 | |
$mill ion | $mill ion | |
Change in fair value of hedging instruments | 121 | (199) |
Change in fair value of hedged risks attributable to hedged items | (118) | 178 |
Net ineffect iveness ga in/(loss) to net trading income | 3 | (21) |
Amortisat ion ga in to net interest income | 153 | 232 |
Cash flow hedges
The Group has exposure to market movements in future interest cash flows on portfolios of customer accounts, debt securit
ies
and loans and advances to customers. The amounts and tim
ing of future cash flows, represent
ing both princ
ipal and
interest
flows, are projected on the basis of contractual terms and other relevant factors, includ
ing est
imates of prepayments and
defaults.
The hedging strategy of the Group involves using interest rate swaps to manage the variab
il
ity in future cash flows on assets
and liab
il
it
ies that have float
ing rates of interest by exchanging the floating rates for fixed rates. It also uses foreign exchange
contracts and currency swaps to manage the variab
il
ity in future exchange rates on its assets and liab
il
it
ies and costs
in foreign
currencies. This is done on both a micro basis whereby a single interest rate or cross-currency swap is designated in a separate
relationsh
ip w
ith a single hedged item (such as a floating-rate loan to a customer), and on a portfolio basis whereby each
hedging instrument is designated against a group of hedged items that share the same risk (such as a group of customer
accounts). Hedge ineffect
iveness for cash flow hedges
is mainly driven by payment frequency mismatch between the hedging
instrument and the underlying hedged item.
The hedged risk is determined as the variab
il
ity of future cash flows aris
ing from changes
in the designated benchmark interest
and/or foreign exchange rates.
Hedging instruments and ineffect
iveness
Change in fair | Ineffectiveness | Amount | |||||
value used to | (loss)/gain | reclassif ied | |||||
calculate | Gain | recognised in | from | ||||
Carrying Amount | hedge | recognised | net trading | reserves to | |||
Notional | Asset | Liab il ity | ineffect iveness 1 | in OCI | income | income | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Interest rate risk | |||||||
Interest rate swaps | 49,309 | 165 | 282 | (131) | (125) | (6) | – |
Currency risk | |||||||
Forward foreign exchange contract | 9,193 | 609 | 1 | 45 | 45 | – | – |
Cross currency swaps | 14,305 | 729 | 2 | 650 | 648 | 2 | – |
Total as at 31 December 2024 | 72,807 | 1,503 | 285 | 564 | 568 | (4) | – |
Interest rate risk | |||||||
Interest rate swaps | 41,834 | 184 | 537 | 612 | 609 | 3 | – |
Currency risk | |||||||
Forward foreign exchange contract | 12,071 | 420 | 183 | 104 | 103 | 1 | – |
Cross currency swaps | 14,321 | 191 | 150 | 185 | 183 | 2 | – |
Total as at 31 December 2023 | 68,226 | 795 | 870 | 901 | 895 | 6 | – |
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
14. Derivat
ive financial
instruments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
335
Hedged items in cash flow hedges
| 2024 | 2023 | |||||
Cumulative | Cumulative | |||||
balance in the | balance in the | |||||
Change in fair | cash flow hedge | Change in fair | cash flow hedge | |||
value used for | reserve from | value used for | reserve from | |||
calculating | de-designated | calculating | de-designated | |||
hedge | Cash flow | hedge | hedge | Cash flow | hedge | |
ineffect iveness 1 | hedge reserve | relationsh ips | ineffect iveness 1 | hedge reserve | relationsh ips | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Customer accounts | (199) | (38) | 104 | (421) | (114) | 136 |
Debt securit ies and other el ig ible b ills | (354) | (10) | (5) | (98) | (22) | (15) |
Loans and advances to customers | 124 | (27) | (7) | (312) | 134 | – |
Intragroup lending currency hedge | (55) | (2) | – | (64) | – | – |
Intragroup borrowing currency hedge | (84) | 4 | – | – | – | – |
Total at 31 December | (568) | (73) | 92 | (895) | (2) | 121 |
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
Impact of cash flow hedges on profit and loss and other comprehensive income
2024 | 2023 | |
$mill ion | $mill ion | |
Cash flow hedge reserve balance as at 1 January | 91 | (564) |
Gains recognised in other comprehensive income on effective portion of changes in fair value of | ||
hedging instruments | 568 | 895 |
Gains reclassif ied to income statement when hedged item affected net profit | (669) | (128) |
Taxation charge relating to cash flow hedges | 14 | (112) |
Cash flow hedge reserve balance as at 31 December | 4 | 91 |
Net investment hedges
Foreign currency exposures arise from investments in subsid
iar
ies that have a different functional currency from that of the
presentation currency of the Group. This risk arises from the fluctuation in spot exchange rates between the functional currency
of the subsid
iar
ies and the Group’s presentation currency, which causes the value of the investment to vary.
The Group’s policy is to hedge these exposures only when not doing so would be expected to have a sign
ificant
impact on the
regulatory ratios of the Group and its banking subsid
iar
ies. The Group uses foreign exchange forwards to manage the effect of
exchange rates on its net investments in foreign subsid
iar
ies.
Hedging instruments and ineffect
iveness
Changes in | |||||||
Change in fair | the value of | Amount | |||||
value used to | the hedging | reclassif ied | |||||
calculate | instrument | Ineffectiveness | from | ||||
| Carrying amount | hedge | recognised | recognised in | reserves to | |||
Notional | Asset | Liab il ity | ineffect iveness 2 | in OCI | profit or loss | income | |
Derivat ive forward currency contracts 1 | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
As at 31 December 2024 | 14,137 | 300 | 7 | 678 | 678 | – | – |
As at 31 December 2023 | 15,436 | 32 | 41 | 215 | 215 | – | – |
1
These derivat
ive forward currency contracts have a matur
ity of less than one year. The hedges are rolled on a period
ic bas
is
2
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
Hedged items in net investment hedges
| 2024 | 2023 | |||||
Balances | Balances | |||||
remain ing in the | remain ing in the | |||||
translation | translation | |||||
reserve from | reserve from | |||||
Change in the | hedging | Change in the | hedging | |||
value used for | relationsh ips for | value used for | relationsh ips for | |||
calculating | which hedge | calculating | which hedge | |||
hedge | Translation | accounting is no | hedge | Translation | accounting is no | |
ineffect iveness 1 | reserve² | longer applied | ineffect iveness 1 | reserve² | longer applied | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Net investments | (678) | 293 | – | (215) | (9) | – |
1
This represents a gain/(loss) change in fair value used for calculating hedge ineffect
iveness
2
This represents the mark-to-market includ
ing accrued
interest on live hedges at 31 December
Impact of net investment hedges on other comprehensive income
2024 | 2023 | |
$mill ion | $mill ion | |
Gains recognised in other comprehensive income | 678 | 215 |
14. Derivat
ive financial
instruments
continued
Financ
ial statements
Notes to the financial statements
336
Standard Chartered
– Annual Report 2024
Maturity of hedging instruments
| 2024 | 2023 | ||||||||
More than | More than | ||||||||
one month | one month | ||||||||
and less | and less | ||||||||
Less than | than | One to | More than | Less than | than | One to | More than | ||
Fair value hedges | one month | one year | five years | five years | one month | one year | five years | five years | |
Interest rate swap | |||||||||
Notional | $mill ion | 2,763 | 11,260 | 32,030 | 17,787 | 3,242 | 9,789 | 41,545 | 14,771 |
Cross currency swap | |||||||||
Notional | $mill ion | – | – | 1,035 | – | – | 115 | – | – |
Average fixed interest | EUR | – | – | 2.40 | – | – | – | – | – |
rate (to USD) (%) | GBP | – | – | – | – | – | 1.33 | – | – |
CNH | – | – | – | – | – | 3.17 | – | – | |
Average exchange rate | EUR/USD | – | – | 0.91 | – | – | – | – | – |
GBP/USD | – | – | – | – | – | 0.66 | – | – | |
CNH/USD | – | – | – | – | – | 6.37 | – | – | |
Cash flow hedges | |||||||||
Interest rate swap | |||||||||
Notional | $mill ion | 2,428 | 15,589 | 25,943 | 5,349 | 2,129 | 27,634 | 11,664 | 407 |
Average fixed | |||||||||
interest rate (%) | USD | 5.09 | 4.62 | 4.05 | 3.74 | 5.10 | 3.45 | 4.70 | 3.16 |
Cross currency swap | |||||||||
Notional | $mill ion | 880 | 12,232 | 1,193 | – | 166 | 10,794 | 3,361 | – |
Average fixed | HKD | – | 4.07 | 0.21 | – | – | 4.97 | 0.21 | – |
interest rate (%) | KRO | – | 2.85 | – | – | 1.96 | 3.58 | 0.62 | – |
USD | – | 5.64 | – | – | |||||
TWD | (3.68) | 0.77 | 0.81 | – | |||||
JPY/HKD | – | (0.05) | – | – | – | – | – | – | |
TWO | 0.53 | 1.04 | – | – | – | – | – | – | |
CNO | 2.45 | 1.54 | – | – | – | – | – | – | |
JPY | 0.01 | 0.08 | – | – | – | (0.07) | (0.05) | – | |
Average exchange rate | HKD/USD | – | 7.78 | 7.85 | – | – | 7.83 | 7.85 | – |
KRO/USD | – | 1,386.94 | 1,300.90 | – | 1,192.20 | 1,321 | 1,285 | – | |
USD/HKD | – | 0.13 | – | – | |||||
TWD/USD | 30.63 | 31.53 | 32.22 | – | |||||
TWO/USD | 31.83 | 32.22 | – | – | – | – | – | – | |
CNO/USD | 7.18 | 7.20 | – | – | – | – | – | – | |
JPY/HKD | – | 18.12 | – | – | – | 17.86 | 18.09 | – | |
Forward foreign | |||||||||
exchange contracts | |||||||||
Notional | $mill ion | 2,044 | 7,149 | – | – | 2,194 | 9,877 | – | – |
Average exchange rate | BRL/USD | – | 6.54 | – | – | – | 5.17 | – | – |
TWD/HKD | – | – | – | – | – | 3.81 | – | – | |
JPY/USD | 147.38 | 145.65 | – | – | 130.49 | 136 | – | – | |
Net investment hedges | |||||||||
Foreign exchange | |||||||||
derivat ives | |||||||||
Notional | $mill ion | 14,137 | – | – | – | 15,436 | – | – | – |
Average exchange rate | CNY/USD | 7.13 | – | – | – | 7.12 | – | – | – |
KRW/USD | 1,364.97 | – | – | – | 1,283 | – | – | – | |
AED/USD | – | – | – | – | 3.67 | – | – | – | |
HKD/USD | 7.77 | – | – | – | 7.80 | – | – | – | |
INR/USD | 84.07 | – | – | – | – | – | – | – | |
Financ
ial statements
Standard Chartered
– Annual Report 2024
337
Refer to Note 13 Financ
ial
2024 | 2023 | |
$mill ion | $mill ion | |
Loans and advances to banks | 43,609 | 45,001 |
Expected credit loss | (16) | (24) |
43,593 | 44,977 | |
Loans and advances to customers | 285,936 | 292,145 |
Expected credit loss | (4,904) | (5,170) |
281,032 | 286,975 | |
Total loans and advances to banks and customers 1 | 324,625 | 331,952 |
1
Includes $2.5 bill
ion (31 December 2023: $3.6 b
ill
ion) of assets pledged as collateral. For more
informat
ion, please refer to page 127 of P
illar 3 disclosures
The Group has outstanding resident
ial mortgage loans to Korea res
idents of $13.7 bill
ion (2023: $17.2 b
ill
ion) and Hong Kong
residents of $31.1 bill
ion (2023: $32.7 b
ill
ion).
Analysis of loans and advances to customers by key geographies and client segment together with their related impa
irment
provis
ions are set out w
ith
in the R
ing other s
im
ilar lend
ing and borrowing
The Group purchases securit
ies (a reverse repurchase agreement – ‘reverse repo’) typ
ically with financ
ial
inst
itut
ions
subject to a commitment to resell or return the securit
ies at a predeterm
ined price. These securit
ies are not
included in the
balance sheet as the Group does not acquire the risks and rewards of ownership, however they are recorded off-balance
sheet as collateral received. Considerat
ion pa
id (or cash collateral provided) is accounted for as a loan asset at amortised
cost unless it is managed on a fair value basis or designated at fair value through profit or loss. In major
ity of cases through
the contractual terms of a reverse repo arrangement, the Group as the transferee of the security collateral has the right to
sell or repledge the asset concerned.
The Group also sells securit
ies (a repurchase agreement – ‘repo’) subject to a comm
itment to repurchase or redeem the
securit
ies at a predeterm
ined price. The securit
ies are reta
ined on the balance sheet as the Group retains substantially all
the risks and rewards of ownership and these securit
ies are d
isclosed as pledged collateral. Considerat
ion rece
ived (or cash
collateral received) is accounted for as a financ
ial l
iab
il
ity at amortised cost unless it is either mandatorily classif
ied as fa
ir
value through profit or loss or irrevocably designated at fair value through profit or loss at in
it
ial recognit
ion.
Repo and reverse repo transactions typically entitle the Group and its counterparties to have recourse to assets sim
ilar to
those provided as collateral in the event of a default. Securit
ies sold subject to repos, e
ither by way of a Global Master
Repurchase Agreement (GMRA), or through a securit
ies sale and Total Return Swap (TRS) cont
inue to be recognised on
the balance sheet as the Group retains substantially the associated risks and rewards of the securit
ies (the TRS
is not
recognised). Assets sold under repurchase agreements are considered encumbered as the Group cannot pledge these
Reverse repurchase agreements and other sim
ilar secured lend
ing
2024 | 2023 | |
$mill ion | $mill ion | |
Banks | 37,700 | 32,286 |
Customers | 61,101 | 65,295 |
98,801 | 97,581 | |
Of which: | ||
Fair value through profit or loss | 86,195 | 81,847 |
Banks | 34,754 | 30,548 |
Customers | 51,441 | 51,299 |
Held at amortised cost | 12,606 | 15,734 |
Banks | 2,946 | 1,738 |
Customers | 9,660 | 13,996 |
16. Reverse repurchase and repurchase agreements includ
ing other s
im
ilar lend
ing and borrowing
continued
338
Standard Chartered
– Annual Report 2024
Financ
ial statements
Notes to the financial statements
Under reverse repurchase and securit
ies borrow
ing arrangements, the Group obtains securit
ies under usual and customary
terms which permit it to repledge or resell the securit
ies to others. Amounts on such terms are:
2024 | 2023 | |
$mill ion | $mill ion | |
Securit ies and collateral rece ived (at fair value) | 103,007 | 101,935 |
Securit ies and collateral wh ich can be repledged or sold (at fair value) | 102,741 | 101,845 |
Amounts repledged/transferred to others for financing act iv it ies, to satisfy liab il it ies under sale and | ||
repurchase agreements (at fair value) | 27,708 | 34,154 |
Repurchase agreements and other sim
ilar secured borrow
ing
2024 | 2023 | |
$mill ion | $mill ion | |
Banks | 8,669 | 5,585 |
Customers | 37,002 | 47,956 |
45,671 | 53,541 | |
Of which: | ||
Fair value through profit or loss | 33,539 | 41,283 |
Banks | 7,759 | 4,658 |
Customers | 25,780 | 36,625 |
Held at amortised cost | 12,132 | 12,258 |
Banks | 910 | 927 |
Customers | 11,222 | 11,331 |
The tables below set out the financial assets prov
ided as collateral for repurchase and other secured borrowing transactions:
Fair value | |||||
Fair value | through other | ||||
through profit | comprehensive | Off-balance | |||
or loss | income | Amortised cost | sheet | Total | |
Collateral pledged against repurchase agreements | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
On-balance sheet | |||||
Debt securit ies and other el ig ible b ills | 4,698 | 6,366 | 7,592 | – | 18,656 |
Off-balance sheet | |||||
Repledged collateral received | – | – | – | 27,708 | 27,708 |
At 31 December 2024 | 4,698 | 6,366 | 7,592 | 27,708 | 46,364 |
On-balance sheet | |||||
Debt securit ies and other el ig ible b ills | 4,993 | 8,157 | 10,181 | – | 23,331 |
Off-balance sheet | |||||
Repledged collateral received | – | – | – | 34,154 | 34,154 |
At 31 December 2023 | 4,993 | 8,157 | 10,181 | 34,154 | 57,485 |
Financ
ial statements
Standard Chartered
– Annual Report 2024
339
ible assets
Goodwill
Goodwill on acquis
it
ions of subsid
iar
ies is included in intang
ible assets. Goodw
ill on acquis
it
ions of associates is included
in Investments in associates and jo
int ventures. Goodw
ill included in intang
ible assets
is assessed at each balance sheet
date for impa
irment and carr
ied at cost less any accumulated impa
irment losses. Ga
ins and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold. Detailed calculations are performed based on
forecasting expected cash flows of the relevant cash generating units (CGUs) and discount
ing these at an appropr
iate
discount rate, the determinat
ion of wh
ich requires the exercise of judgement. Goodwill is allocated to CGUs for the
purpose of impa
irment test
ing. CGUs represent the lowest level with
in the Group wh
ich generate separate cash inflows
and at which the goodwill is monitored for internal management purposes. These are equal to or smaller than the Group’s
reportable segments (as set out in Note 2) as the Group views its reportable segments on a global basis. The major CGUs
to which goodwill has been allocated are set out in the CGU table (page 340).
Other accounting estimates and judgements
The carrying amount of goodwill is based on the applicat
ion of judgements
includ
ing the bas
is of goodwill impa
irment
calculation assumptions. Judgement is also applied in determinat
ion of CGUs.
Estimates include forecasts used for determin
ing cash flows for CGUs, the appropr
iate long-term growth rates to use
and discount rates which factor in country risk-free rates and applicable risk premiums. The Group undertakes an annual
assessment to evaluate whether the carrying value of goodwill is impa
ired. The est
imat
ion of future cash flows and the
level to which they are discounted is inherently uncertain and requires sign
ificant judgement and
is subject to potential
change over time.
Acquired intang
ibles
At the date of acquis
it
ion of a subsid
iary or assoc
iate, intang
ible assets wh
ich are deemed separable and that arise from
contractual or other legal rights are capital
ised and
included with
in the net
ident
ifiable assets acqu
ired. These intang
ible
assets are in
it
ially measured at fair value, which reflects market expectations of the probabil
ity that the future econom
ic
benefits embodied in the asset will flow to the entity and are amortised on the basis of their expected useful lives (4 to
16 years). At each balance sheet date, these assets are assessed for ind
icators of
impa
irment. In the event that an asset’s
carrying amount is determined to be greater than its recoverable amount, the asset is written down immed
iately to the
recoverable amount.
Computer software
Acquired computer software licences are capital
ised on the bas
is of the costs incurred to acquire and bring to use the
specif
ic software.
Internally generated software represents substantially all of the total software capital
ised. D
irect costs of the development
of separately ident
ifiable
internally generated software are capital
ised where
it is probable that future economic
benefits attributable to the software will flow from its use. These costs include staff remuneration costs such as salaries,
statutory payments and share-based payments, materials, service providers and contractors provided their time is directly
attributable to the software build. Costs incurred in the ongoing maintenance of software are expensed immed
iately
when incurred. Internally generated software is amortised over each asset’s useful life to a maximum of 10-years.
On an annual basis software assets’ residual values and useful lives are reviewed, includ
ing assess
ing for ind
icators of
impa
irment. Ind
icators of impa
irment
include loss of business relevance, obsolescence, exit of the business to which the
software relates, technological changes, change in use of the asset, reduction in useful life, plans to reduce usage or scope.
For capital
ised software that
is internally generated, judgement is required to determine which costs relate to research
(expensed) and which costs relate to development (capital
ised). Further judgement
is required to determine the technical
feasib
il
ity of completing the software such that it will be available for use. Estimates are used to determine how the
software will generate probable future economic benefits: these estimates include cost savings, income increases, balance
sheet improvements, improved functional
ity or
improved asset safeguarding.
Software as a Service (SaaS) and sim
ilar cloud serv
ice models is a contractual arrangement that conveys the right to
receive access to the supplier’s software applicat
ion over the contract term. As such, the Group does not have control
and as a result recognises an operating expense for these costs over the contract term. Certain costs, includ
ing
customisat
ion costs related to
implementat
ion of the SaaS may meet the definit
ion of an intang
ible asset
in their own
right if it is separately ident
ifiable and control
is established. These costs are capital
ised
if it is expected to provide the
Group with future economic benefits flowing from the underlying resource and the Group can restrict others from
17. Goodwill and intang
ible assets
continued
Financ
ial statements
Notes to the financial statements
340
Standard Chartered
– Annual Report 2024
2024 | 2023 | |||||||||
Acquired | Computer | Acquired | Computer | |||||||
Goodwill | intang ibles | software | Total | Goodwill | intang ibles | software | Total | |||
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |||
Cost | ||||||||||
At 1 January | 2,429 | 278 | 6,168 | 8,875 | 2,471 | 295 | 5,178 | 7,944 | ||
Exchange translation differences | (42) | (18) | (109) | (169) | (24) | (12) | 21 | (15) | ||
Addit ions | – | 1 | 952 | 953 | – | – | 1,124 | 1,124 | ||
Disposals | – | – | (5) | (5) | – | – | – | – | ||
Impairment | – | – | (663)¹ | (663) | – | – | (151)² | (151) | ||
Amounts written off | – | (9) | (42) | (51) | (18) | (5) | (4) | (27) | ||
At 31 December | 2,387 | 252 | 6,301 | 8,940 | 2,429 | 278 | 6,168 | 8,875 | ||
Provis ion for amort isat ion | ||||||||||
At 1 January | – | 265 | 2,396 | 2,661 | – | 276 | 1,799 | 2,075 | ||
Exchange translation differences | – | (20) | (48) | (68) | – | (12) | 11 | (1) | ||
Amortisat ion | – | 4 | 695 | 699 | – | 1 | 625 | 626 | ||
Impairment charge | – | – | (102)¹ | (102) | – | – | (39)² | (39) | ||
Amounts written off | – | – | (41) | (41) | – | – | – | – | ||
At 31 December | – | 249 | 2,900 | 3,149 | – | 265 | 2,396 | 2,661 | ||
Net book value | 2,387 | 3 | 3,401 | 5,791 | 2,429 | 13 | 3,772 | 6,214 | ||
1
During 2024, the Group performed a review of its computer software intang
ibles wh
ich were capital
ised as at 31 December 2023, and
impa
ired $483 m
ill
ion of
the 2024 net book value due to lim
itat
ions in the available evidence to support the continued capital
isat
ion of the assets. The Group has made improvements in
its processes and controls to capture the required evidence going forward. The Group has also performed its annual review of computer software intang
ibles to
determine instances when the Group is no longer using certain applicat
ions
in its ongoing business and impa
ired $78 m
ill
ion. A total of $561 m
ill
ion
is recorded
with
in
impa
irment to reflect the above
2
Computer software impa
irment
includes $82.8 mill
ion charge relat
ing to write off on SaaS (Software as a Service) applicat
ions cap
ital
ised
in previous years
At 31 December 2024, accumulated goodwill impa
irment losses
incurred from 1 January 2005 amounted to $3,331 mill
ion
(31 December 2023: $3,331 mill
ion), of wh
ich $nil was recognised in 2024 (31 December 2023: $nil).
Outcome of impa
irment assessment
ired. For the purposes of
impa
irment
testing, goodwill is allocated at the date of acquis
it
ion to a CGU. Goodwill is considered to be impa
ired
if the carrying amount
of the relevant CGU exceeds its recoverable amount. Indicators of impa
irment
include changes in the economic performance
and outlook of the region includ
ing geopol
it
ical changes, changes
in market value of regional investments, large credit defaults
and strategic decis
ions to ex
it certain regions. The recoverable amounts for all the CGUs were measured based on value in use
(VIU). The calculation of VIU for each CGU is calculated using five-year cashflow project
ions and an est
imated terminal value
based on a perpetuity value after year five. The cashflow project
ions are based on forecasts approved by management up
to 2029. The perpetuity terminal value amount is calculated using year five cashflows using long-term GDP growth rates.
All cashflows are discounted using discount rates which reflect market rates appropriate to the CGU.
The cash flows used as an input to the VIU calculations used in determin
ing whether goodw
ill allocated to CGUs should be
impa
ired were amended dur
ing 2024 to reflect changes to the basis on which business performance is monitored. There has
been no impact from the change estimated in the current period. It is impract
icable for the Group to est
imate the amount of
the effect of this change in future periods.
The goodwill allocated to each CGU and key assumptions used in determin
ing the recoverable amounts are set out below and
are solely estimates for the purposes of assessing impa
irment of acqu
ired goodwill.
2024 | 2023 | |||||
Long-term | Long-term | |||||
Pre Tax | forecast GDP | Pre Tax | forecast GDP | |||
Goodwill | Discount rates | growth rates | Goodwill | Discount rates | growth rates | |
Cash generating unit | $mill ion | per cent | per cent | $mill ion | per cent | per cent |
Country CGUs | ||||||
Asia | 1,014 | 1,036 | ||||
Hong Kong | 359 | 13.0 | 1.1 | 357 | 12.9 | 1.6 |
Taiwan | 316 | 12.2 | 1.5 | 333 | 12.4 | 1.5 |
Singapore | 339 | 13.0 | 2.3 | 346 | 13.9 | 2.1 |
Africa & Middle East | 81 | 80 | ||||
Pakistan | 32 | 35.9 | 3.3 | 31 | 35.5 | 3.2 |
Bahrain | 49 | 12.4 | 0.8 | 49 | 12.4 | 0.5 |
Global CGUs | 1,292 | 1,313 | ||||
Wealth Management | 83 | 15.0 | 1.8 | 83 | 15.3 | 1.9 |
Corporate & Investment Banking | 1,209 | 15.5 | 2.3 | 1,230 | 15.7 | 2.3 |
2,387 | 2,429 |
In the current year, there are no CGUs for which any ind
iv
idual movement on key estimates (cashflow, discount rate and GDP
growth) would cause an impa
17. Goodwill and intang
ible assets
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
341
Acquired intang
ibles
These primar
ily compr
ise those items recognised as part of the acquis
it
ions of Union Bank (now amalgamated into Standard
Chartered Bank (Pakistan) Lim
ited), Hs
inchu (now amalgamated into Standard Chartered Bank (Taiwan) Lim
ited), Amer
ican
Express Bank and ABSA’s custody business in Africa.
The acquired intang
ibles are amort
ised over periods from four years to a maximum of 16 years. The constituents are as follows:
2024 | 2023 | |
$mill ion | $mill ion | |
Acquired intang ibles compr ise: | ||
Brand names | 1 | – |
Customer relationsh ips | – | 1 |
Licenses | 2 | 12 |
Net book value | 3 | 13 |
All property, plant and equipment is stated at cost less accumulated depreciat
ion and
impa
irment losses.
Land and build
ings compr
ise mainly branches and offices. Freehold land is not depreciated although it is subject to
impa
irment test
ing.
Depreciat
ion on other assets
is calculated using the straight-line method to allocate their cost to their residual values over
their estimated useful lives, as follows:
• Owned premises | • | up to 50 years |
• Leasehold premises | • | up to 50 years |
• Leasehold improvements | • | Shorter of remain ing lease term and 10 years |
• Equipment and motor vehicles | • | three to 15 years |
Where the Group is a lessee of a right-of-use asset, the leased assets are capital
ised and
included in Property, plant and
equipment with a corresponding liab
il
ity to the lessor recognised in other liab
il
it
ies. The account
ing policy for lease assets
Financ
ial statements
Notes to the financial statements
18. Property, plant and equipment
continued
342
Standard Chartered
– Annual Report 2024
Leased | Leased | |||||
Operating | premises | equipment | ||||
Premises | Equipment | lease assets | assets | assets | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Cost or valuation | ||||||
At 1 January 2024 | 1,741 | 810 | – | 1,864 | 18 | 4,433 |
Exchange translation differences | (41) | (31) | – | (38) | (4) | (114) |
Addit ions | 112 1 | 194 1 | – | 213 | 150 1 | 669 |
Disposals and fully depreciated assets | ||||||
written off | (61) 2 | (37) 2 | – | (13) | (1) | (112) |
Other movements | (25) | – | – | – | – | (25) |
As at 31 December 2024 | 1,726 | 936 | – | 2,026 | 163 | 4,851 |
Depreciat ion | ||||||
Accumulated at 1 January | 692 | 535 | – | 914 | 18 | 2,159 |
Exchange translation differences | (28) | (15) | – | (40) | (14) | (97) |
Charge for the year | 79 | 92 | – | 220 | 36 | 427 |
Impairment charge | 2 | – | – | 9 | – | 11 |
Attributable to assets sold, transferred | ||||||
or written off | (29) 2 | (37) 2 | – | (7) | (1) | (74) |
Accumulated at 31 December 2024 | 716 | 575 | – | 1,096 | 39 | 2,426 |
Net book amount at 31 December 2024 | 1,010 | 361 | – | 930 | 124 | 2,425 |
Cost or valuation | ||||||
At 1 January 2023 | 1,773 | 840 | 4,420 | 1,652 | 29 | 8,714 |
Exchange translation differences | (27) | (22) | – | (5) | (3) | (57) |
Addit ions | 45 1 | 114 1 | – | 286 | 1 | 446 |
Disposals and fully depreciated assets | ||||||
written off | (68) 2 | (122) 2 | (4,420) 3 | (69) | (9) | (4,688) |
Transfers to assets held for sale | 18 | – | – | – | – | 18 |
As at 31 December 2023 | 1,741 | 810 | – | 1,864 | 18 | 4,433 |
Depreciat ion | ||||||
Accumulated at 1 January 2023 | 678 | 575 | 1,185 | 730 | 24 | 3,192 |
Exchange translation differences | (21) | (17) | 1 | (25) | (1) | (63) |
Charge for the year | 77 | 99 | 27 | 238 | 4 | 445 |
Impairment charge | 3 | – | – | 9 | – | 12 |
Attributable to assets sold, transferred | ||||||
or written off | (47) 2 | (122) 2 | (1,213) 3 | (38) | (9) | (1,429) |
Transfers to assets held for sale | 2 | – | – | – | – | 2 |
Accumulated at 31 December 2023 | 692 | 535 | – | 914 | 18 | 2,159 |
Net book amount at 31 December 2023 | 1,049 | 275 | – | 950 | – | 2,274 |
1
Refer to the cash flow statement under cash flows from invest
ing act
iv
it
ies section for the purchase of property, plant and equipment during the year of
$456 mill
ion (2023: $159 m
ill
ion)
2
Disposals for property, plant and equipment during the year of $56mill
ion (2023: $53 m
ill
ion)
in the cash flow statement would include the gains and losses
Incurred as part of other operating income (Note 6) on disposal of assets during the year and the net book value disposed
3
Includes disposal of assets from aviat
ion finance leas
Financ
ial statements
Standard Chartered
– Annual Report 2024
343
Where the Group is a lessee and the lease is deemed in scope of IFRS 16, it recognises a liab
il
ity equal to the present value
of lease payments over the lease term, discounted using the incremental borrowing rate applicable in the economic
environment of the lease. The liab
il
ity is recognised in ‘Other liab
il
it
ies’. A correspond
ing right-of-use asset equal to the
liab
il
ity, adjusted for any lease payments made at or before the commencement date, is recognised in ‘Property, plant and
equipment’. The lease term includes any extension options contained in the contract that the Group is reasonably certain it
will exercise.
The Group subsequently depreciates the right-of-use asset using the straight-line method over the lease term and
measures the lease liab
il
ity using the effective interest method. Depreciat
ion on the asset
is recognised in ‘Depreciat
ion
and amortisat
ion’, and
interest on the lease liab
il
ity is recognised in ‘Interest expense’.
If a leased premise, or a physically dist
inct port
ion of a premise such as an ind
iv
idual floor, is deemed by management
to be surplus to the Group’s needs and action has been taken to abandon the space before the lease expires, this is
considered an ind
icator of
impa
irment. An
impa
irment loss
is recognised if the right-of-use asset, or portion thereof, has a
carrying value in excess of its value-in-use when taking into account factors such as the abil
ity and l
ikel
ihood of obta
in
ing
a subtenant.
The key judgement in determin
ing lease balances
is the determinat
ion of the lease term,
in particular whether the Group
is reasonably certain that it will exercise extension options present in lease contracts. On in
it
ial recognit
ion, the Group
considers a range of characterist
ics such as prem
ises function, regional trends and the term remain
ing on the lease to
determine whether it is reasonably certain that a contractual right to extend a lease will be exercised. When there are
changes to assumptions the lease balances are remeasured.
The estimates involved are the determinat
ion of
incremental borrowing rates in the respective economic environments.
The Group uses third-party broker quotes to estimate its USD cost of senior unsecured borrowing, then uses cross currency
swap pric
ing
informat
ion to determ
ine the equivalent cost of borrowing in other currencies. If it is not possible to estimate
The Group primar
ily enters lease contracts that grant
it the right to use premises such as office build
ings and reta
il branches.
Exist
ing lease l
iab
il
it
ies may change
in future periods due to changes in assumptions or decis
ions to exerc
ise lease renewal or
terminat
ion opt
ions, changes in payments due to renegotiat
ions of market rental rates as perm
itted by those contracts and
changes to payments due to rent being contractually linked to an inflat
ion
index. In general the re-measurement of a lease
liab
il
ity under these circumstances leads to an equal change to the right-of-use asset balance, with no immed
iate effect on the
income statement.
The total cash outflow during the year for premises and equipment leases was $265 mill
ion (2023: $283 m
ill
ion).
The right-of-use asset balances and depreciat
ion charges are d
isclosed in Note 18. The lease liab
il
ity balances are disclosed in
Note 23 and the interest expense on lease liab
il
it
ies
is disclosed in Note 3.
Maturity analysis
The maturity profile for lease liab
il
it
ies assoc
iated with leased premises and equipment assets is as follows:
| 2024 | 2023 | |||||||||
Between | Between | Between | Between | |||||||
one year | two years | one year | two years | |||||||
One year | and two | and five | More than | One year | and two | and five | More than | |||
or less | years | years | five years | Total | or less | years | years | five years | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Other liab il it ies – lease l iab il it ies | 279 | 223 | 443 | 414 | 1,359 | 248 | 203 | 373 | 410 | 1,234 |
2024 | 2023 | |
Other assets include: | $mill ion | $mill ion |
Financ ial assets held at amort ized cost (Note 13): | ||
Hong Kong SAR Government certif icates of indebtedness (Note 23)¹ | 6,369 | 6,568 |
Cash collateral 3 | 11,046 | 10,337 |
Acceptances and endorsements | 5,476 | 5,326 |
Unsettled trades and other financial assets | 11,694 | 15,909 |
34,585 | 38,140 | |
Non-financial assets: | ||
Commodit ies and em iss ions cert if icates² | 8,358 | 8,889 |
Other assets | 525 | 565 |
43,468 | 47,594 |
1
The Hong Kong SAR Government certif
icates of
indebtedness are subordinated to the claims of other parties in respect of bank notes issued
2
Physically held commodit
ies and em
iss
ion cert
if
icates are
inventory that is carried at fair value less costs to sell, $5.6 bill
ion (31 December 2023: $5.1 b
ill
ion) are
classif
ied as Level 1 and $2.7 b
ill
ion are class
if
ied as Level 2 (31 December 2023: $3.7 b
ill
ion). For commod
it
ies, the fa
ir value is derived from observable spot or
short-term futures prices from relevant exchanges
3
Cash collateral are margins placed to collateralize net derivat
ive mark-to-market (MTM) pos
it
Financ
ial statements
Notes to the financial statements
344
Standard Chartered
– Annual Report 2024
il
it
ies
Upon reclassif
icat
ion property, plant and equipment are measured at the lower of their carrying amount and fair
value less costs to sell. Financ
ial
instruments continue to be measured per the accounting polic
ies
in Note 13
Financ
ial
The assets below have been presented as held for sale following the approval of Group management and the transactions are
expected to complete in 2025.
Assets held for sale
The financial assets reported below are class
if
ied under Level 1 $58 m
ill
ion (31 December 2023: $101 m
ill
ion), Level 2 $353 m
ill
ion
(31 December 2023: $541 mill
ion) and Level 3 $473 m
ill
ion (31 December 2023: $59 m
ill
ion).
2024 | 2023 | |
$mill ion | $mill ion | |
Financ ial assets held at fa ir value through profit or loss | 5 | – |
Loans and advances to banks | 5 | – |
Financ ial assets held at amort ised cost | 884 | 701 |
Cash and balances at central banks | 109 | 246 |
Loans and advances to banks | 18 | 24 |
Loans and advances to customers | 656² | 251 |
Debt securit ies held at amort ised cost | 101 | 180 |
Property, plant and equipment | 15 | 59 |
Vessels 1 | – | 43 |
Others | 15 | 16 |
Others | 28 | 49 |
932 | 809 |
1
Considerat
ion on d
isposal of Property, plant and equipment classif
ied under assets held for sale dur
ing 31 December 2024 was $53 mill
ion (31 December 2023:
$149 mill
ion)
2
Includes $414 mill
ion unsecured personal loan bus
iness from SC Bank India which was disposed on 23 January 2025 (refer note 37 – Post balance sheet events)
Liab
il
it
ies held for sale
The financial l
iab
il
it
ies reported below are class
if
ied under Level 1 $89 m
ill
ion (2023: $54 m
ill
ion) and Level 2 $271 m
ill
ion
(2023: $672 mill
ion).
2024 | 2023 | |
$mill ion | $mill ion | |
Financ ial l iab il it ies held at amort ised cost | 360 | 726 |
Deposits by banks | – | 3 |
Customer accounts | 360 | 723 |
Other liab il it ies | 16 | 51 |
Provis ions for l iab il it ies and charges | 5 | 10 |
381 | 787 |
Financ
ial statements
Standard Chartered
– Annual Report 2024
345
22. Debt securit
ies
in issue
Refer to Note 13 Financ
ial
| 2024 | 2023 | |||||
Certif icates | Certif icates | |||||
of deposit of | Other debt | of deposit of | Other debt | |||
$100,000 | securit ies | $100,000 | securit ies | |||
or more | in issue | Total | or more | in issue | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Debt securit ies in issue | 18,113 | 46,496 | 64,609 | 15,533 | 47,013 | 62,546 |
Debt securit ies in issue included with in: | ||||||
Financ ial l iab il it ies held at fa ir value | ||||||
through profit or loss (Note 13) | – | 13,731 | 13,731 | – | 10,817 | 10,817 |
Total debt securit ies in issue | 18,113 | 60,227 | 78,340 | 15,533 | 57,830 | 73,363 |
In 2024, the Company issued a total of $7.4 bill
ion sen
ior notes for general business purposes of the Group as shown below:
Securit ies | $mill ion |
$1,500 mill ion fixed-rate sen ior notes due 2035 (callable 2034) | 1,500 |
SGD 335 mill ion fixed-rate sen ior notes due 2030 (callable 2029) | 246 |
EUR1,000 mill ion fixed-rate sen ior notes due 2032 (callable 2031) | 1,035 |
HKD 1,100 mill ion fixed-rate sen ior notes due 2027 (callable 2026) | 142 |
$500 mill ion float ing-rate senior notes due 2028 (callable 2027) | 500 |
$1,000 mill ion fixed-rate sen ior notes due 2028 (callable 2027) | 1,000 |
$1,500 mill ion fixed-rate sen ior notes due 2035 (callable 2034) | 1,500 |
$1,500 mill ion fixed-rate sen ior notes due 2030 (callable 2029) | 1,500 |
Total Senior Notes issued | 7,423 |
In 2023, the Company issued a total of $8.1 bill
ion sen
ior notes for general business purposes of the Group as shown below:
Securit ies | $mill ion |
$1,000 mill ion fixed rate sen ior notes due 2027 (callable 2026) | 1,000 |
EUR 1,000 mill ion fixed rate sen ior notes due 2031 (callable 2030) | 1,105 |
HKD 784 mill ion fixed rate sen ior notes due 2026 (callable 2025) | 100 |
$1,000 mill ion fixed rate sen ior notes due 2034 (callable 2033) | 1,000 |
$1,000 mill ion fixed rate sen ior notes due 2027 (callable 2026) | 1,000 |
$500 mill ion float ing rate senior notes due 2027 (callable 2026) | 500 |
$400 mill ion float ing rate senior notes due 2028 (callable 2027) | 400 |
$1,500 mill ion fixed rate sen ior notes due 2029 (callable 2028) | 1,500 |
$750 mill ion fixed rate sen ior notes due 2030 (callable 2029) | 750 |
$750 mill ion fixed rate sen ior notes due 2028 (callable 2027) | 750 |
Total Senior Notes issued | 8,105 |
il
it
ies
Refer to Note 13 Financ
ial
instruments for the relevant accounting policy for financ
ial l
iab
il
it
ies, Note 19 Leased assets for
the accounting policy for leases, and Note 31 Share-based payments for the accounting policy for cash-settled share-
2024 | 2023 | |
$mill ion | $mill ion | |
Financ ial l iab il it ies held at amort ised cost (Note 13) | ||
Notes in circulat ion 1 | 6,369 | 6,568 |
Acceptances and endorsements | 5,476 | 5,386 |
Cash collateral 2 | 15,005 | 8,440 |
Property leases | 1,041 | 1,054 |
Equipment leases | 115 | 4 |
Unsettled trades and other financial l iab il it ies | 16,041 | 17,211 |
44,047 | 38,663 | |
Non-financial l iab il it ies | ||
Cash-settled share-based payments | 131 | 102 |
Other liab il it ies | 503 | 456 |
44,681 | 39,221 |
1
Hong Kong currency notes in circulat
ion of $6,369 m
ill
ion (31 December 2023: $6,568 m
ill
ion) that are secured by the Government of Hong Kong SAR cert
if
icates of
indebtedness of the same amount included in other assets (Note 20)
2
Cash collateral are margins received against collateralize net derivat
ive mark-to-market (MTM) pos
it
Financ
ial statements
Notes to the financial statements
346
Standard Chartered
– Annual Report 2024
ions for l
iab
il
it
ies and charges
The recognit
ion and measurement of prov
is
ions for l
iab
il
it
ies and charges requ
ires sign
ificant judgement and the use of
estimates about uncertain future condit
ions or events.
Estimates include the best estimate of the probabil
ity of outflow of econom
ic resources, cost of settling a provis
ion and
tim
ing of settlement. Judgements are requ
ired for inherently uncertain areas such as legal decis
ions (
includ
ing external
2024 | 2023 | |||||
Provis ion | Provis ion | |||||
for credit | Other | for credit | Other | |||
commitments 1 | provis ions 2 | Total | commitments 1 | provis ions 2 | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
At 1 January | 227 | 72 | 299 | 280 | 103 | 383 |
Exchange translation differences | 10 | (5) | 5 | (5) | 4 | (1) |
Charge/(release) against profit⁴ | 18 | 136 | 154 | (48) | 42 | (6) |
Provis ions ut il ised⁴ | – | (121) | (121) | – | (71) | (71) |
Other movements 3 | – | 12 | 12 | – | (6) | (6) |
At 31 December | 255 | 94 | 349 | 227 | 72 | 299 |
1
Expected credit loss for credit commitment comprises those undrawn contractually committed facil
it
ies where there is doubt as to the borrowers’ abil
ity to meet
their repayment obligat
ions
2
Other provis
ions cons
ist mainly of provis
ions for legal cla
ims and regulatory and enforcement invest
igat
ions and proceedings
3
Includes the provis
ions transferred to held for sale
4
$136 mill
ion (charge) and $121 m
ill
ion (prov
is
ion ut
il
ised)
includes provis
ion for Korea equ
ity linked securit
ies (ELS) portfol
il
it
ies and comm
itments
Financ
ial guarantee contracts and loan comm
itments
Financ
ial guarantee contracts and any loan comm
itments issued at below-market interest rates are in
it
ially recognised
at their fair value as a financ
ial l
iab
il
ity, and subsequently measured at the higher of the in
it
ial value less the cumulative
amount of income recognised and their expected credit loss provis
ion. Loan comm
itments may be designated at fair value
through profit or loss where that is the business model under which such contracts are held. Notional values of financ
ial
guarantee contracts and loan commitments are disclosed in the table below.
Financ
ial guarantees, trade cred
its and irrevocable letters of credit are the notional values of contracts issued by the
Group’s Transaction Banking business for which an obligat
ion to make a payment has not ar
isen at the reporting date.
Transaction Banking will issue contracts to clients and counterparties of clients, whereby in the event the holder of the
contract is not paid, the Group will reimburse the holder of the contract for the actual financ
ial loss suffered. These
contracts have various legal forms such as letters of credit, guarantee contracts and performance bonds. The contracts
are issued to facil
itate trade through export and
import business, provide guarantees to financ
ial
inst
itut
ions where the
Group has a local presence, as well as guaranteeing project financ
ing
involv
ing large construct
ion projects undertaken by
sovereigns and corporates. The contracts may contain performance clauses which require the counterparty performing
services or provid
ing goods to meet certa
in condit
ions before a r
ight to payment is achieved, however the Group does not
guarantee this performance. The Group will only guarantee the credit of the counterparty paying for the services or goods.
Commitments are where the Group has confirmed its intent
ion to prov
ide funds to a customer or on behalf of a customer
under prespecif
ied terms and cond
it
ions
in the form of loans, overdrafts, future guarantees whether cancellable or not
and the Group has not made payments at the balance sheet date; those instruments are included in these financ
ial
statements as commitments. Commitments and contingent liab
il
it
ies are generally cons
idered on demand as the Group
may have to honour them, or the client may draw down at any time.
Capital commitments are contractual commitments the Group has entered into to purchase non-financ
The table below shows the contract or underlying princ
ipal amounts of unmatured off-balance sheet transact
ions at the
balance sheet date. The contract or underlying princ
ipal amounts
ind
icate the volume of bus
iness outstanding and do not
represent amounts at risk.
2024 | 2023 | |
$mill ion | $mill ion | |
Financ ial guarantees and other cont ingent liab il it ies | ||
Financ ial guarantees, trade cred its and irrevocable letters of credit | 90,632 | 74,414 |
90,632 | 74,414 | |
Commitments | ||
Undrawn formal standby facil it ies, credit lines and other commitments to lend | ||
One year and over | 76,915 | 78,356 |
Less than one year | 29,249 | 33,092 |
Uncondit ionally cancellable | 76,365 | 70,942 |
182,529 | 182,390 | |
Capital Commitments | ||
Contracted capital expenditure approved by the directors but not provided for in these accounts | 123 | 217 |
25. Contingent liab
il
it
ies and comm
itments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
347
As set out in Note 26, the Group has contingent liab
il
it
ies
in respect of certain legal and regulatory matters for which it is not
practicable to estimate the financ
ial
Where appropriate, the Group recognises a provis
ion for l
iab
il
it
ies when
it is probable that an outflow of economic
resources embodying economic benefits will be required, and for which a reliable estimate can be made of the obligat
ion.
The uncertaint
ies
inherent in legal and regulatory matters affect the amount and tim
ing of any potent
ial outflows with
respect to which provis
ions have been establ
ished. These uncertaint
ies also mean that
it is not possible to give an
aggregate estimate of contingent liab
il
it
ies ar
is
The Group receives legal claims against it in a number of jur
isd
ict
ions and
is subject to regulatory and enforcement
invest
igat
ions and proceedings from time to time. Apart from the matters described below, the Group currently considers none
of the ongoing claims, invest
igat
ions or proceedings to be ind
iv
idually material. However, in light of the uncertaint
ies
involved
in such matters there can be no assurance that the outcome of a particular matter or matters currently not considered to be
material may not ultimately be material to the Group’s results in a particular reporting period depending on, among other
things, the amount of the loss resulting from the matter(s) and the results otherwise reported for such period.
Since 2014, the Group has been named as a defendant in a series of lawsuits that have been filed in the United States Distr
ict
Courts for the Southern and Eastern Distr
icts of New York aga
inst a number of banks on behalf of plaint
iffs who are, or are
relatives of, vict
ims of attacks
in Iraq, Afghanistan and Israel. The plaint
iffs
in each of these lawsuits have alleged that the
defendant banks aided and abetted the unlawful conduct of parties with connections to terrorist organisat
ions
in breach of
the United States Anti-Terrorism Act. None of these lawsuits specify the amount of damages claimed. The Group continues to
defend these lawsuits.
In January 2020, a shareholder derivat
ive compla
int was filed by the City of Philadelph
ia
in New York State Court against
45 current and former directors and senior officers of the Group. It is alleged that the ind
iv
iduals breached their duties to the
Group and caused a waste of corporate assets by permitt
ing the conduct that gave r
ise to the costs and losses to the Group
related to legacy conduct and control issues. In February 2022, the New York State Court ruled in favour of Standard Chartered
PLC’s motion to dism
iss the compla
int. The plaint
iffs are pursu
ing an appeal against the February 2022 ruling. A hearing date
for the plaint
iffs’ appeal
is awaited.
Since October 2020, four lawsuits have been filed in the English High Court against Standard Chartered PLC on behalf of more
than 200 shareholders in relation to alleged untrue and/or mislead
ing statements and/or om
iss
ions
in informat
ion publ
ished by
Standard Chartered PLC in its rights issue prospectuses of 2008, 2010 and 2015 and/or public statements regarding the Group’s
histor
ic sanct
ions, money laundering and financ
ial cr
ime compliance issues. These lawsuits have been brought under sections
90 and 90A of the Financ
ial Serv
ices and Markets Act 2000. The trial of these lawsuits is due to start in late 2026. The claimants
have alleged that their losses are in the region of £1.56 bill
ion (exclud
ing any pre-judgment interest that may be awarded).
In addit
ion to hav
ing denied any and all liab
il
ity, Standard Chartered PLC will contest claimants’ alleged losses.
Bernard Madoff’s 2008 confession to running a Ponzi scheme through Bernard L. Madoff Investment Securit
ies LLC (BMIS) gave
rise to a number of lawsuits against the Group. BMIS and the Fairf
ield funds (wh
ich invested in BMIS) are in bankruptcy and
liqu
idat
ion, respectively. Between 2010 and 2012, five lawsuits were brought against the Group by the BMIS bankruptcy trustee
and the Fairf
ield funds’ l
iqu
idators,
in each case seeking to recover funds paid to the Group’s clients pursuant to redemption
requests made prior to BMIS’ bankruptcy fil
ing. The total amount sought
in these cases exceeds $300 mill
ion, exclud
ing any
pre-judgment interest that may be awarded. Three of the four lawsuits commenced by the Fairf
ield funds’ l
iqu
idators have
been dism
issed and the appeals of those d
ism
issals by the funds’ l
iqu
idators are ongo
ing. The fourth lawsuit has been dism
issed
and is not the subject of any further appeal. The Group continues to defend the lawsuit brought by the BMIS bankruptcy trustee.
A number of Korean banks, includ
ing Standard Chartered Bank Korea, sold equ
ity linked securit
ies (ELS) to customers, the
redemption values of which are determined by the performance of various stock ind
ices. From January 2021 to May 2023
Standard Chartered Bank Korea sold relevant ELS to its customers with a notional value of approximately $900 mill
ion. Due to
the performance of the Hang Seng China Enterprise Index, several thousand Standard Chartered Bank Korea customers have
redeemed their ELS at a loss. Standard Chartered Bank Korea has offered compensation to impacted customers. Standard
Chartered Bank Korea may also receive a regulatory penalty. A $100 mill
ion prov
is
ion had been recogn
ised as at Q1 2024 with
respect to antic
ipated losses, $24 m
ill
ion of wh
ich remains recorded on the Group’s balance sheet as at 31 December 2024.
With the exception of the Korea ELS matter described above, the Group has concluded that the threshold for recording
provis
ions pursuant to IAS 37 Prov
is
ions, Cont
ingent Liab
il
it
ies and Cont
ingent Assets is not met with respect to the above
matters; however, the outcomes of these matters are inherently uncertain and diff
icult to pred
Financ
ial statements
Notes to the financial statements
348
Standard Chartered
– Annual Report 2024
il
it
ies and other borrowed funds
2024 | 2023 | |
$mill ion | $mill ion | |
Subordinated loan capital – issued by subsid iary undertak ings | ||
$700 mill ion 8.0 per cent subord inated notes due 2031 1 | 326 | 342 |
NPR2.4 bill ion fixed sub debt rate 10.3 per cent 2 | 18 | 18 |
344 | 360 | |
Subordinated loan capital – issued by the Company 3 | ||
£900 mill ion 5.125 per cent subord inated notes due 2034 | 601 | 644 |
$2 bill ion 5.7 per cent subord inated notes due 2044 | 2,179 | 2,197 |
$1 bill ion 5.2 per cent subord inated notes due 2024 | – | 1,001 |
$750 mill ion 5.3 per cent subord inated notes due 2043 | 691 | 697 |
€500 mill ion 3.125 per cent subord inated notes due 2024 | – | 536 |
$1.25 bill ion 4.3 per cent subord inated notes due 2027 | 1,174 | 1,154 |
$1 bill ion 3.516 per cent fixed rate reset subord inated notes due 2030 (callable 2025) | 996 | 964 |
$500 mill ion 4.866 per cent fixed rate reset subord inated notes due 2033 (callable 2028) | 478 | 481 |
£96.035 mill ion 7.375 per cent Non-Cum Pref Shares (reclassed as Debt) – Other borrow | ings 121 | 122 |
£99.250 mill ion 8.25 per cent Non-Cum Pref Shares (reclassed as Debt) – Other borrow | ings 124 | 126 |
$750 mill ion 3.603 per cent fixed rate reset subord inated notes due 2033 (callable 2032) | 634 | 648 |
€ 1 bill ion 2.5 per cent fixed rate reset subord inated notes due 2030 (callable 2025) | 1,015 | 1,044 |
$1.25 bill ion 3.265 per cent fixed rate reset subord inated notes due 2036 (callable 2030) | 1,032 | 1,040 |
€1 bill ion 1.200 per cent fixed rate reset subord inated notes due 2031 (callable 2026) | 993 | 1,022 |
10,038 | 11,676 | |
Total for Group | 10,382 | 12,036 |
1
Issued by Standard Chartered Bank
2
Issued by Standard Chartered Bank Nepal Lim
ited. NPR refers to Nepalese Rupee
3
In the balance sheet of the Company the amount recognised is $10,338 mill
ion (2023: $11,945 m
ill
ion), w
ith the difference on account of hedge accounting achieved
on a Group basis
2024 | 2023 | |||||||||
USD | EUR | GBP | NPR | Total | USD | EUR | GBP | NPR | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Fixed rate subordinated debt | 7,510 | 2,008 | 846 | 18 | 10,382 | 8,524 | 2,602 | 892 | 18 | 12,036 |
Total | 7,510 | 2,008 | 846 | 18 | 10,382 | 8,524 | 2,602 | 892 | 18 | 12,036 |
Redemptions and repurchases during the year.
Standard Chartered PLC exercised its right to redeem $1 bill
ion 5.2 per cent subord
inated notes 2024 and €500 mill
ion
3.125 per cent subordinated notes 2024
Issuance during the year
Securit
ies wh
ich carry a discret
ionary coupon and have no fixed matur
ity or redemption date are classif
ied as other equ
ity
instruments. Interest payments on these securit
ies are recogn
ised, net of tax, as distr
ibut
ions from equity in the period in
which they are paid.
Where the Company or other members of the consolidated Group purchase the Company’s equity share capital, the
considerat
ion pa
id is deducted from the total shareholders’ equity of the Group and/or of the Company as treasury shares
until they are cancelled. Where such shares are subsequently sold or reissued, any considerat
ion rece
ived is included in
Total share | ||||||
Number of | Ordinary | Ordinary | Preference | capital and | Other equity | |
ordinary shares | share capital 1 | Share premium | Share premium 2 | share premium | instruments | |
mill ions | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
At 1 January 2023 | 2,895 | 1,447 | 3,989 | 1,494 | 6,930 | 6,504 |
Cancellation of shares includ ing | ||||||
share buyback | (230) | (115) | – | – | (115) | – |
Addit ional T ier 1 Redemption | – | – | – | – | – | (992) |
At 31 December 2023 | 2,665 | 1,332 | 3,989 | 1,494 | 6,815 | 5,512 |
Cancellation of shares includ ing | ||||||
share buyback | (240) | (120) | – | – | (120) | – |
Addit ional T ier 1 equity issuance | – | – | – | – | – | 1,568 |
Addit ional T ier 1 Redemption | – | – | – | – | – | (553) |
Other movements 3 | – | – | – | – | – | (25) |
At 31 December 2024 | 2,425 | 1,212 | 3,989 | 1,494 | 6,695 | 6,502 |
1
Issued and fully paid ordinary shares of 50 cents each
2
Includes preference share capital of $75,000
3
Relates to realised translation loss on redemption of AT1 securit
ies of SGD 750 m
ill
ion
28. Share capital, other equity instruments and reserves
continued
Standard Chartered
– Annual Report 2024
349
Financ
ial statements
Share buyback
On 23 February 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each.
Nominal value of share purchases was $57 mill
ion, the total cons
iderat
ion pa
id was $1,000 mill
ion, and the buyback completed
on 25 June 2024. The total number of shares purchased was 113,266,516, representing 4.25 per cent of the ordinary shares in issue
at the beginn
ing of the programme. The nom
inal value of the shares was transferred from the share capital to the capital
redemption reserve account. The shares were purchased by Standard Chartered PLC on various exchanges not includ
ing the
Hong Kong Stock Exchange, by private arrangement.
On 30 July 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. As at
FY 2024 the buyback is ongoing, with the total number of shares purchased of 126,262,414 representing 4.95 per cent of the
ordinary shares in issue at the beginn
ing of the programme, the total cons
iderat
ion was $1,355 m
ill
ion and a further $145 m
ill
ion
relating to irrevocable obligat
ion to buy back shares under the buyback programme has been recogn
ised. The nominal value of
the shares was transferred from the share capital to the capital redemption reserve account.
The shares were purchased by Standard Chartered PLC on various exchanges not includ
ing the Hong Kong Stock Exchange.
Average | ||||||
Highest | Lowest | price paid | Aggregate | Aggregate | ||
Number of | price Paid | price paid | per share | price paid | price paid | |
ordinary shares | £ | £ | £ | £ | $ | |
February 2024 | 6,418,285 | 6.6920 | 6.3700 | 6.5039 | 41,743,905 | 52,831,654 |
March 2024 | 45,113,015 | 7.0000 | 6.4400 | 6.6765 | 301,197,187 | 383,771,653 |
April 2024 | 24,716,649 | 7.1300 | 6.3800 | 6.7727 | 167,398,467 | 209,475,694 |
May 2024 | 19,525,751 | 7.9540 | 6.9080 | 7.6883 | 150,119,738 | 189,885,098 |
June 2024 | 17,492,816 | 7.8840 | 7.1220 | 7.3676 | 128,879,487 | 164,035,854 |
August 2024 | 27,834,474 | 7.8340 | 6.6740 | 7.3594 | 204,843,866 | 264,717,166 |
September 2024 | 33,245,826 | 8.1120 | 7.4260 | 7.7103 | 256,333,914 | 338,823,108 |
October 2024 | 34,497,109 | 9.1700 | 7.6880 | 8.3791 | 289,055,494 | 377,008,057 |
November 2024 | 20,250,801 | 9.8600 | 9.0240 | 9.4021 | 190,399,354 | 243,785,545 |
December 2024 | 10,434,204 | 10.0950 | 9.6380 | 9.8709 | 102,994,626 | 130,375,125 |
Ordinary share capital
In accordance with the Companies Act 2006 the Company does not have authorised share capital. The nominal value of each
ordinary share is 50 cents.
During the period nil shares were issued under employee share plans.
Preference share capital
At 31 December 2024, the Company has 15,000 $5 non-cumulative redeemable preference shares in issue, with a premium of
$99,995 making a paid up amount per preference share of $100,000. The preference shares are redeemable at the option of the
Company and are classif
ied
in equity.
The available profits of the Company are distr
ibuted to the holders of the
issued preference shares in prior
ity to payments
made to holders of the ordinary shares and in prior
ity to, or par
i passu with, any payments to the holders of any other class of
shares in issue. On a wind
ing up, the assets of the Company are appl
ied to the holders of the preference shares in prior
ity to
any payment to the ordinary shareholders and in prior
ity to, or par
i passu with, the holders of any other shares in issue, for an
amount equal to any div
idends payable (on approval of the Board) and the nom
inal value of the shares together with any
premium as determined by the Board. The redeemable preference shares are redeemable at the paid up amount (which
includes premium) at the option of the Company in accordance with the terms of the shares. The holders of the preference
shares are not entitled to attend or vote at any general meeting except where any relevant div
idend due
is not paid in full or
where a resolution is proposed varying the rights of the preference shares
Other equity instruments
The table provides details of outstanding Fixed Rate Resetting Perpetual Subordinated Contingent Convertible AT1 securit
ies
issued by Standard Chartered PLC. All issuances are made for general business purposes and to increase the regulatory capital
base of the Group.
Conversion | ||||||
Proceeds net of | Interest | price per | ||||
Issuance date | Nominal value | issue costs | rate 1 | Coupon payment dates each year 2 | First reset dates 3 | ordinary share⁵ |
26 Jun 2020 | $1,000 mill ion | $992 mill ion | 6% | 26 January, 26 July | 26 January 2026 | $5.331 |
14 January 2021 | $1,250 mill ion | $1,239 mill ion | 4.75% | 14 January, 14 July | 14 July 2031 | $6.353 |
19 August 2021 | $1,500 mill ion | $1,489 mill ion | 4.30% | 19 February, 19 August | 19 August 2028 | $6.382 |
15 August 2022 | $1,250 mill ion | $1,239 mill ion | 7.75% | 15 February, 15 August | 15 February 2028 | $7.333 |
08 March 2024 | $1,000 mill ion | $993 mill ion | 7.875% | 8 March, 8 September | 8 September 2030 | $8.216 |
19 Sep 2024 | SGD750 mill ion | $575 mill ion | 5.300% | 19 March, 19 September | 19 March 2030 | SGD12.929 |
Total⁴ | $6,527 mill ion |
1
Interest rates for the period from (and includ
ing) the
issue date to (but excluding) the first reset date
2
Interest payable semi-annually in arrears
3
Securit
ies are resettable each date fall
ing five years, or an integral multiple of five years, after the first reset date
4
Excludes realised translation loss ($25 mill
ion) on redempt
ion of AT1 securit
ies of SGD 750 m
ill
ion
5
Conversion price set at the time of pric
ing w
ith reference to closing share price and any applicable discount
Financ
ial statements
Notes to the financial statements
28. Share capital, other equity instruments and reserves
continued
350
Standard Chartered
– Annual Report 2024
Standard Chartered PLC redeemed SGD 750 mill
ion F
ixed Rate Resetting Perpetual Contingent Convertible Securit
ies on
its first
optional redemption date of 3 October 2024 for $578 mill
ion (real
ised translation loss of $25 mill
ion).
The AT1 issuances above are primar
ily purchased by
inst
itut
ional investors.
The princ
ipal terms of the AT1 secur
it
ies are descr
ibed below:
•
The securit
ies are perpetual and redeemable, at the opt
ion of Standard Chartered PLC in whole but not in part, on the first
interest reset date and each date falling five years after the first reset date.
•
The securit
ies are also redeemable for certa
in regulatory or tax reasons on any date at 100 per cent of their princ
ipal amount
together with any accrued but unpaid interest up to (but excluding) the date fixed for redemption. Any redemption is subject
to Standard Chartered PLC giv
ing not
ice to the relevant regulator and the regulator granting permiss
ion to redeem.
•
Interest payments on these securit
ies w
ill be accounted for as a div
idend.
•
Interest on the securit
ies
is due and payable only at the sole and absolute discret
ion of Standard Chartered PLC, subject to
certain addit
ional restr
ict
ions set out
in the terms and condit
ions. Accord
ingly, Standard Chartered PLC may at any time elect
to cancel any interest payment (or part thereof) which would otherwise be payable on any interest payment date.
•
The securit
ies convert
into ordinary shares of Standard Chartered PLC, at a pre-determined price detailed in the table above,
should the fully loaded Common Equity Tier 1 ratio of the Group fall below 7.0 per cent. Approximately 970 mill
ion ord
inary
shares would be required to satisfy the conversion of all the securit
ies ment
ioned above.
The securit
ies rank beh
ind the claims against Standard Chartered PLC of (a) unsubordinated creditors, (b) which are expressed
to be subordinated to the claims of unsubordinated creditors of Standard Chartered PLC but not further or otherwise; or (c)
which are, or are expressed to be, jun
ior to the cla
ims of other creditors of Standard Chartered PLC, whether subordinated or
unsubordinated, other than claims which rank, or are expressed to rank, pari passu with, or jun
ior to, the cla
ims of holders of the
AT1 securit
ies
in a wind
ing–up occurr
ing prior to the conversion trigger.
Reserves
The constituents of the reserves are summarised as follows:
•
The capital reserve represents the exchange difference on redenominat
ion of share cap
ital and share premium from sterling
to US dollars in 2001. The capital redemption reserve represents the nominal value of preference shares redeemed
•
The amounts in the “Capital and Merger Reserve” represents the premium aris
ing on shares
issued using a cash box financ
ing
structure, which required the Company to create a merger reserve under section 612 of the Companies Act 2006. Shares were
issued using this structure in 2005 and 2006 to assist in the funding of Korea ($1.9 bill
ion) and Ta
iwan ($1.2 bill
ion) acqu
is
it
ions,
in 2008, 2010 and 2015 for the shares issued by way of a rights issue, primar
ily for cap
ital maintenance requirements and for
the shares issued in 2009 by way of an accelerated book build, the proceeds of which were used in the ordinary course of
business of the Group. The funding raised by the 2008, 2010 and 2015 rights issues and 2009 share issue was fully retained
with
in the Company. Of the 2015 fund
ing, $1.5 bill
ion was used to subscr
ibe to addit
ional equ
ity in Standard Chartered Bank,
a wholly owned subsid
iary of the Company. Apart from the Korea, Ta
iwan and Standard Chartered Bank funding, the merger
reserve is considered realised and distr
ibutable.
•
Own credit adjustment reserve represents the cumulative gains and losses on financ
ial l
iab
il
it
ies des
ignated at fair value
through profit or loss relating to own credit. Gains and losses on financ
ial l
iab
il
it
ies des
ignated at fair value through
profit or loss relating to own credit in the year have been taken through other comprehensive income into this reserve.
On derecognit
ion of appl
icable instruments the balance of any OCA will not be recycled to the income statement, but will
be transferred with
in equ
ity to retained earnings
•
Fair value through other comprehensive income (FVOCI) debt reserve represents the unrealised fair value gains and losses in
respect of financial assets class
if
ied as FVOCI, net of expected cred
it losses and taxation. Gains and losses are deferred in this
reserve and are reclassif
ied to the
income statement when the underlying asset is sold, matures or becomes impa
ired.
•
FVOCI equity reserve represents unrealised fair value gains and losses in respect of financ
ial assets class
if
ied as FVOCI, net of
taxation. Gains and losses are recorded in this reserve and never recycled to the income statement
•
Cash flow hedge reserve represents the effective portion of the gains and losses on derivat
ives that meet the cr
iter
ia for
these types of hedges. Gains and losses are deferred in this reserve and are reclassif
ied to the
income statement when the
underlying hedged item affects profit and loss or when a forecast transaction is no longer expected to occur
•
Translation reserve represents the cumulative foreign exchange gains and losses on translation of the net investment of the
Group in foreign operations. Since 1 January 2004, gains and losses are deferred to this reserve and are reclassif
ied to the
income statement when the underlying foreign operation is disposed. Gains and losses aris
ing from der
ivat
ives used as
hedges of net investments are netted against the foreign exchange gains and losses on translation of the net investment
of the foreign operations
•
Retained earnings represents profits and other comprehensive income earned by the Group and Company in the current
and prior periods, together with the after tax increase relating to equity-settled share options, less div
idend d
istr
ibut
ions,
own shares held (treasury shares) and share buybacks
A substantial part of the Group’s reserves is held in overseas subsid
iary undertak
ings and branches, princ
ipally to support local
operations or to comply with local regulations. The maintenance of local regulatory capital ratios could potentially restrict
the amount of reserves which can be remitted. In addit
ion,
if these overseas reserves were to be remitted, further unprovided
taxation liab
il
it
ies m
ight arise.
As at 31 December 2024, the distr
ibutable reserves of Standard Chartered PLC (the Company) were $14.1 b
ill
ion (31 December
2023: $14.7 bill
ion). D
istr
ibutable reserves of SC PLC were $14.1 b
ill
ion, wh
ich is calculated from the Merger reserve and Retained
earnings with considerat
ion for restr
icted items in line with sections 830 and 831 of the Companies Act 2006.
28. Share capital, other equity instruments and reserves
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
351
The 2004 Employee Benefit Trust (2004 Trust) is used in conjunct
ion w
ith the Group’s employee share schemes and other
employee share-based payments (such as upfront shares and salary shares). Computershare Trustees (Jersey) Lim
ited
is the
trustee of the 2004 Trust. Group companies fund the 2004 Trust from time to time to enable the trustees to acquire shares in
Standard Chartered PLC to satisfy these arrangements.
Details of the shares purchased and held by the 2004 Trust are set out below.
2004 Trust | ||
2024 | 2023 | |
Shares purchased during the period | 19,604,557 | 29,069,539 |
Market price of shares purchased ($mill ion) | 223 | 237 |
Shares held at the end of the period | 17,589,987 | 28,095,542 |
Maximum number of shares held during the period | 28,085,688 | 28,893,930 |
Except as disclosed, neither the Company nor any of its subsid
iar
ies has bought, sold or redeemed any securit
ies of the
Company listed on The Stock Exchange of Hong Kong Lim
ited, on another exchange, by pr
ivate arrangement, or by way
Div
idend wa
ivers
The trustees of the 2004 Trust, which holds ordinary shares in Standard Chartered PLC in connection with the operation of its
employee share plans, waive any div
idend on the balance of ord
inary shares that have not been allocated to employees,
except for 0.01p per share.
Changes in share capital and other equity instruments of Standard Chartered PLC subsid
iar
ies
The table below details the transactions in equity instruments (includ
ing convert
ible and hybrid instruments) of the Group’s
subsid
iar
ies, includ
ing
issuances, conversions, redemptions, purchase or cancellation. This is required under the Hong Kong
List
ing requ
irements, appendix D2 paragraph 10.
Descript ion of | Issued/(redeemed) | Issued/(redeemed) | |
Name | Shares | Shares | capital |
Standard Chartered Bank Niger ia L im ited | NGN1.00 Ordinary | 8,581,235,698 | NGN11,081,235,698 |
Furaha Finserve Uganda Lim ited | USD1.00 Ordinary | 199,500 | USD199,500 |
SCV Research and Development Pvt. Ltd. | INR10.00 Ordinary | 10,000 | INR100,000 |
Furaha Holding Ltd | USD1.00 Ordinary | 6,500,000 | USD6,500,000 |
Qatalyst Pte. Ltd. | USD1.00 Ordinary | 1,099,999 | USD1,099,999 |
Standard Chartered I H Lim ited | USD1.00 Ordinary | 52,086,333 | USD 52,086,333 |
Standard Chartered Strategic Investments Lim ited | USD1.00 Ordinary | 16,086,333 | USD 16,086,333 |
Standard Chartered Capital Lim ited | INR10.00 Equity | 32,269,750 | INR322,697,500 |
SC Ventures Holdings Lim ited | USD1.00 Ordinary | 59,386,000 | USD 59,386,000 |
Standard Chartered Holdings Lim ited | USD2.00 Ordinary | 25,043,166 | USD 50,086,332 |
Standard Chartered Luxembourg S.A. | EUR1.00 Ordinary | 125,000 | EUR125,000 |
Mox Bank Lim ited | HKD Ordinary | 54,740,000 | HKD547,400,000 |
Standard Chartered Research and Technology India Private Lim ited | INR10 Equity Class – A | 10,821,311 | INR108,213,110 |
myZoi Financ ial Inclus ion Technologies LLC | AED1.00 Ordinary | 25,000,000 | AED25,000,000 |
Zodia Holdings Lim ited | USD1.00 A Ordinary | 18,000,000 | USD18,000,000 |
Audax Financ ial Technology Pte. Ltd | USD Ordinary-A | 8,500,000 | USD8,500,000 |
Trust Bank Singapore Lim ited | SGD Ordinary | 185,000,000 | SGD185,000,000 |
Zodia Markets Holdings Lim ited | USD1.00 Ordinary | 5,580 | USD 5,580 |
Letsbloom Pte. Ltd. | USD Ordinary-A | 9,406,219 | USD9,406,219 |
Zodia Custody (Ireland) Lim ited | USD1.00 Ordinary | 1,000,000 | USD1,000,000 |
SCV Research and Development Pte. Ltd. | USD Ordinary-A' | 11,440,850 | USD11,440,850 |
SCV Master Holding Company Pte. Ltd. | USD Ordinary | 63,299,999 | USD63,299,999 |
Financ ial Inclus ion Technologies Ltd | USD Ordinary-A | 6,700,000 | USD6,700,000 |
Appro Onboarding Solutions FZ-LLC | AED1,000 Ordinary | 21,670 | AED21,670,000 |
Solv-India Pte. Ltd. | USD Ordinary | 38,963,752 | USD38,963,752 |
Solvezy Technology Kenya Lim ited | KES1,000.00 Ordinary | 196,448 | KES196,448,000 |
Tawi Fresh Kenya Lim ited | KES1,000.00 Ordinary | 454,890 | KES454,890,000 |
Libeara Pte. Ltd. | USD Ordinary | 10,258,400 | USD10,258,400 |
CashEnable Pte. Ltd. | USD Ordinary-A | 9,300,000 | USD9,300,000 |
Solvezy Technology Ghana Ltd | GHS Ordinary | 18,000,441 | GHS18,000,441 |
Libeara (Singapore) Pte. Ltd. | USD Ordinary | 10,258,400 | USD10,258,400 |
Standard Chartered Securit ies (Afr ica) Holdings Lim ited | USD1.00 Ordinary | (8,002,228) | USD(8,002,228) |
Banco Standard Chartered en Liqu idac ion | USD75.133 Ordinary | (133,930) | USD(10,062,563) |
Please see Note 22 Debt securit
ies
in issue for issuances and redemptions of senior notes.
Please see Note 27 Subordinated liab
il
it
ies and other borrowed funds for
issuance and redemptions of subordinated liab
il
it
ies
and AT1 securit
ies.
Please see Note 40 Related undertakings of the Group for subsid
iar
ies liqu
idated, d
Financ
ial statements
Notes to the financial statements
352
Standard Chartered
– Annual Report 2024
2024 | 2023 | |
$mill ion | $mill ion | |
As at 1 January | 396 | 350 |
Comprehensive income for the year | (22) | (38) |
Income in equity attributable to non-controlling interests | (14) | (31) |
Other profits attributable to non-controlling interests | (8) | (7) |
Distr ibut ions | (43) | (26) |
Other increases 1 | 63 | 110 |
As at 31 December | 394 | 396 |
1
Movements in 2024 are primar
ily from non-controll
ing interests pertain
ing to Trust Bank S
ingapore Lim
ited ($55 m
ill
ion) and Mox Bank L
im
ited ($14 m
ill
ion) partly
offset by disposal of SCB Angola S.A. ($6 mill
ion). Cash rece
ived from addit
ional
investment was $55 mill
ion (2023: $116 m
ill
ion). Movements
in 2023 primar
ily from
non-controlling interest pertain
ing to Mox Bank L
im
ited ($48 m
ill
ion), Trust Bank S
ingapore Lim
ited ($34 m
ill
ion) and Zod
ia Custody Lim
ited ($28 m
ill
ions
The Group operates pension and other post-retirement benefit plans around the world, which can be categorised into
defined contribut
ion
plans and
defined benefit
plans.
• For
defined contribut
ion
plans, the Group pays contribut
ions to publ
icly or privately admin
istered pens
ion plans on
a statutory or contractual basis, and such amounts are charged to operating expenses. The Group has no further
payment obligat
ions once the contr
ibut
ions have been pa
id.
• For
defined benefit
plans, which promise levels of payments where the future cost is not known with certainty;
– the accounting obligat
ion
is calculated annually by independent actuaries using the projected unit method.
–
Actuarial gains and losses that arise are recognised in shareholders’ equity and presented in the statement of other
comprehensive income in the period they arise.
–
The Group determines the net interest expense on the net defined benefit liab
il
ity for the year by applying the
discount rate used to measure the defined benefit obligat
ion at the beg
inn
ing of the annual per
iod to the net
defined benefit liab
il
ity, taking into account any changes in the net defined benefit liab
il
ity during the year as a
result of contribut
ions and benefit payments. Net
interest expense, the cost of the accrual of new benefits, benefit
enhancements (or reductions) and admin
istrat
ion expenses met directly from plan assets are recognized in the
income statement in the period in which they were incurred.
Other accounting estimates and judgements
There are many factors that affect the measurement of the retirement benefit obligat
ions. Th
is measurement requires
the use of estimates, such as discount rates, inflat
ion, pens
ion increases, salary increases, and life expectancies which are
inherently uncertain. The table below summarises how these assumptions are set:
Assumption | Detail |
Discount rate | Determined by reference to market yields at the end of the reporting period on high-quality |
corporate bonds (or, in countries where there is no deep market in such bonds, government bonds) | |
of a currency and term consistent with the currency and term of the post-employment benefit | |
obligat ions. Th is is the approach adopted across all our geographies. | |
Inflation | Where there are inflat ion-l inked bonds available (e.g. United Kingdom and the eurozone), the |
Group derives inflat ion based on the market on those bonds, w ith the market yield adjusted in | |
respect of the United Kingdom to take account of the fact that liab il it ies are l inked to Consumer | |
Price Index inflat ion, whereas the reference bonds are l inked to Retail Price Index inflat ion. Where | |
no inflat ion-l inked bonds exist, we determine inflat ion assumpt ions based on a combinat ion of | |
long-term forecasts and short-term inflat ion data. | |
Salary growth | Salary growth assumptions reflect the Group’s long-term expectations, taking into account future |
business plans and macroeconomic data (primar ily expected future long-term inflat ion). | |
Demographic assumptions | Demographic assumptions, includ ing mortal ity and turnover rates, are typically set based on |
the assumptions used in the most recent actuarial funding valuation, and will generally use | |
industry standard tables, adjusted where appropriate to reflect recent histor ic exper ience and/or | |
future expectations. |
The sensit
iv
ity of the liab
il
it
ies to changes
Net Retirement benefit obligat
ion and charge compr
ise:
Net Obligat ion | Charge 1,2 | |||
2024 | 2023 | 2024 | 2023 | |
$mill ion | $mill ion | $mill ion | $mill ion | |
Defined benefit plans | 101 | 166 | 62 | 66 |
Defined contribut ion plans 1 | 14 | 17 | 389 | 365 |
Total 2 | 115 | 183 | 451 | 431 |
1
The Group during the year util
ised aga
inst defined contribut
ion payments, $5m forfe
ited pension contribut
ions
in respect of employees who left before their
interests vested fully. The residual balance of forfeited contribut
ions
is $17m
2
Refer note 7: “Operating expenses”
30. Retirement benefit obligat
ions
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
353
The Group operates over 60 defined benefit plans across its geographies, many of which are closed to new entrants who now
join defined contr
ibut
ion arrangements. The a
im of all these plans is, as part of the Group’s commitment to financ
ial wellbe
ing
for employees, to give employees the opportunity to save appropriately for retirement in a way that is consistent with local
regulations, taxation requirements and market condit
ions. The defined benefit plans expose the Group to currency r
isk, interest
rate risk, investment risk and actuarial risks such as longevity risk.
The material holdings of government and corporate bonds shown partially hedge movements in the liab
il
it
ies result
ing from
interest rate and inflat
ion changes. Sett
ing aside movements from other drivers such as currency fluctuation, the increases in
discount rates in most geographies over 2024 have led to lower liab
il
it
ies. These have been partly offset by decreases
in the
value of bonds held, however growth assets such as equit
ies and property performed well over 2024, lead
ing to a fall in the
pension defic
it reported. These movements are shown as actuar
ial gains and losses in the tables below. Contribut
ions
into a
number of plans in excess of the amounts required to fund benefits accruing have also helped to reduce the net defic
it over
the year.
The disclosures required under IAS 19 have been calculated by independent qualif
ied actuar
ies based on the most recent full
actuarial valuations updated, where necessary, to 31 December 2024.
UK Fund
The Standard Chartered Pension Fund (the ‘UK Fund’) is the Group’s largest pension plan, representing 46 per cent (31
December 2023: 53 per cent) of total pension liab
il
it
ies. The UK Fund
is set up under a trust that is legally separate from the Bank
(its formal sponsor) and, as required by UK legislat
ion, at least one th
ird of the trustee directors are nominated by members; the
remainder are appointed by the Bank. The trustee directors have a fiduc
iary duty to members and are respons
ible for governing
the UK Fund in accordance with its Trust Deed and Rules.
The UK Fund was closed to new entrants from 1 July 1998 and closed to the accrual of new benefits from 1 April 2018: all UK
employees are now offered membership of a defined contribut
ion plan.
The financial pos
it
ion of the UK Fund
is regularly assessed by an independent qualif
ied actuary. The fund
ing valuation as at
31 December 2023 was completed in December 2024 by the Scheme Actuary, T Kripps of Will
is Towers Watson, us
ing
assumptions different from those used for IAS19, and agreed with the UK Fund trustee. It showed that the UK Fund was 96%
funded at that date, revealing a past service defic
it of $48 m
ill
ion (£38 m
ill
ion).
To repair the defic
it, three annual cash payments each of $13 m
ill
ion (£10 m
ill
ion) were agreed, w
ith the first of these paid in
December 2024, and two further instalments to be paid in December 2025 and December 2026. However, the agreement
allowed that the payments due in 2025 and 2026 may be varied depending on the funding posit
ion at the preced
ing 30 June
provided that total payments over the three year recovery plan period do not exceed $38 mill
ion (£30 m
ill
ion). As part of the
2023 valuation agreement, it was agreed that gilts with a nominal value of $200 mill
ion (£160 m
ill
ion) would rema
in in escrow
to provide addit
ional secur
ity the Trustee.
The Group has not recognised any addit
ional l
iab
il
ity under IFRIC 14, as the Bank has control of any pension surplus under the
Trust Deed and Rules.
Overseas plans
The princ
ipal overseas defined benefit arrangements operated by the Group are
in Hong Kong, India, Jersey, Korea, Taiwan,
United Arab Emirates (UAE) and the United States of America (US). Plans in Hong Kong, India, Korea, Taiwan and UAE remain
open for accrual of future benefits.
Key assumptions
The princ
ipal financial assumpt
ions used at 31 December 2024 were:
| 2024 | 2023 | |||||
UK Funded | Overseas Plans 1 | Unfunded Plans 2 | UK Funded | Overseas Plans 1 | Unfunded Plans 2 | |
% | % | % | % | % | % | |
Discount rate | 5.5 | 1.6 – 6.9 | 2.5 – 6.9 | 4.6 | 1.2–4.9 | 3.1–7.4 |
Price inflat ion | 2.5 | 2.0 – 5.0 | 2.0 – 5.0 | 2.5 | 2.0–2.9 | 2.0–5.0 |
Salary increases | n/a | 3.5 – 8.5 | 4.0 – 8.5 | n/a | 3.5–4.5 | 4.0–8.5 |
Pension increases | 2.3 | 2.9 | 0.0 – 2.3 | 2.3 | 2.9 | 0.0–2.3 |
Post-retirement medical rate | n/a | 8% in 2024 | 8% in 2023 | |||
reducing | reducing | |||||
by 0.5% | by 0.5% | |||||
per annum to | per annum to | |||||
5% in 2030 | 5% in 2029 | |||||
1
The range of assumptions shown is for the funded defined benefit overseas plans in Hong Kong, India, Jersey, Korea, Taiwan, and the US. These comprise around
85 per cent of the total liab
il
it
ies of overseas funded plans
2
The range of assumptions shown is for the main unfunded defined benefit plans in India, Korea, Thailand, UAE, UK and the US. They comprise over 90 per cent of
the total liab
il
it
ies of unfunded plans
The princ
ipal non-financial assumpt
ions are those made for UK life expectancy. The UK mortality tables are S4PMA for males
and S4PFA for females, projected by year of birth with the CMI 2023 improvement model with a 1.25 Per cent annual trend and
in
it
ial addit
ion parameter of 0.25 Per cent. Scal
ing factors of 81 Per cent for male pensioners, 93 Per cent for female pensioners,
81 Per cent for male dependants and 81 Per cent for female dependants have been applied.
30. Retirement benefit obligat
ions
continued
Financ
ial statements
Notes to the financial statements
354
Standard Chartered
– Annual Report 2024
The resulting assumptions for life expectancy for the UK Fund are that a male member currently aged 60 will live for 28 years
(2023: 27 years) and a female member for 29 years (2023: 30 years) and a male member currently aged 40 will live for 29 years
(2023: 29 years) and a female member for 31 years (2023: 32 years) after their 60th birthdays.
Both financial and non-financial assumpt
ions can be expected to change in the future, which would affect the value placed
on the liab
il
it
ies. For example, changes at the report
ing date to one of the relevant actuarial assumptions, holding other
assumptions constant, would have affected the defined benefit obligat
ion by the amounts shown below:
•
If the discount rate increased by 25 basis points the liab
il
ity would reduce by approximately $25 mill
ion for the UK Fund
(2023: $35 mill
ion) and $20 m
ill
ion for the other plans (2023: $20 m
ill
ion)
•
If the rate of inflat
ion
increased by 25 basis points the liab
il
ity, allowing for the consequent impact on pension and salary
increases, would increase by approximately $15 mill
ion for the UK Fund (2023: $20 m
ill
ion) and $15 m
ill
ion for the other plans
(2023: $15 mill
ion)
•
If the rate of salary growth relative to inflat
ion
increased by 25 basis points the liab
il
ity would increase by nil for the UK Fund
(2023: nil) and approximately $10 mill
ion for the other plans (2023: $10 m
ill
ion)
•
If longevity expectations increased by one year the liab
il
ity would increase by approximately $35 mill
ion for the UK Fund
(2023: $35 mill
ion) and $10 m
ill
ion for the other plans (2023: $10 m
ill
ion)
Although this analysis does not take account of the full distr
ibut
ion of cash flows expected, it does provide an approximat
ion
of the sensit
iv
ity to the main assumptions. While changes in other assumptions would also have an impact, the effect would
not be as sign
ificant.
Profile of plan obligat
ions
Funded plans | Unfunded | ||
UK Fund | Overseas | plans | |
Duration of the defined benefit obligat ion ( in years) | 10 | 8 | 8 |
Duration of the defined benefit obligat ion – 2023 | 11 | 8 | 8 |
Benefits expected to be paid from plans | |||
Benefits expected to be paid during 2025 | 83 | 76 | 20 |
Benefits expected to be paid during 2026 | 85 | 115 | 17 |
Benefits expected to be paid during 2027 | 88 | 97 | 17 |
Benefits expected to be paid during 2028 | 90 | 104 | 17 |
Benefits expected to be paid during 2029 | 92 | 113 | 16 |
Benefits expected to be paid during 2030 to 2034 | 495 | 526 | 82 |
Fund values:
| 2024 | 2023 | |||||||||||
| UK Fund | Overseas plans | UK Fund | Overseas plans | |||||||||
Quoted | Unquoted | Total | Quoted | Unquoted | Total | Quoted | Unquoted | Total | Quoted | Unquoted | Total | |
assets | assets | assets | assets | assets | assets | assets | assets | assets | assets | assets | assets | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
At 31 December | ||||||||||||
2024 | ||||||||||||
Equit ies | 2 | - | 2 | 132 | - | 132 | 2 | – | 2 | 160 | – | 160 |
Government | ||||||||||||
bonds | 342 | - | 342 | 269 | - | 269 | 443 | – | 443 | 173 | – | 173 |
Corporate bonds | 357 | 126 | 483 | 291 | - | 291 | 360 | 113 | 473 | 179 | – | 179 |
Hedge funds | - | 5 | 5 | - | - | - | – | 9 | 9 | – | – | – |
Infrastructure | - | 170 | 170 | - | - | - | – | 166 | 166 | – | – | – |
Property | - | 81 | 81 | - | 15 | 15 | – | 84 | 84 | – | – | – |
Derivat ives | 22 | (1) | 21 | - | - | - | 2 | 5 | 7 | – | – | – |
Cash and | ||||||||||||
equivalents | 35 | - | 35 | 60 | 153² | 213 | 66 | – | 66 | 37 | 166 | 203 |
Others | 7 | 2 | 9 | - | 156 | 156 | 7 | 2 | 9 | – | 145 | 145 |
Total fair value | ||||||||||||
of assets 1 | 765 | 383 | 1,148 | 752 | 324 | 1,076 | 880 | 379 | 1,259 | 549 | 311 | 860 |
1
Self-investment is monitored closely and is less than $1 mill
ion of Standard Chartered equ
it
ies and bonds for 2024 (31 December 2023: <$1 m
ill
ion). Self-
investment
is only allowed where it is not practical to exclude it – for example through investment in index-tracking funds where the Group is a constituent of the relevant
index
2
Cash and equivalents includes the value of insurance contracts held in Korea which invest only in short term money market instruments
30. Retirement benefit obligat
ions
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
355
| At 31 December 2024 | At 31 December 2023 | |||||
Funded plans | Unfunded | Funded plans | Unfunded | |||
UK Fund | Overseas Plans | Plans | UK Fund | Overseas Plans | Plans | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Total fair value of assets | 1,148 | 1,076 | N/A | 1,259 | 860 | N/A |
Present value of liab il it ies | (1,070) | (1,075) | (180) | (1,219) | (877) | (189) |
Net pension plan asset/(obligat ion) | 78 | 1 | (180) | 40 | (17) | (189) |
Of which: Total pension assets in | ||||||
respect of plans in surplus | 78 | 73 | – | 40 | 54 | – |
Of which: Total pension obligat ions in | ||||||
respect of plans in defic it | – | (72) | (180) | – | (71) | (189) |
The pension cost for defined benefit plans was:
| 2024 | 2023 | |||||||
Funded plans | Funded plans | |||||||
Overseas | Unfunded | Overseas | Unfunded | |||||
UK Fund | plans | plans | Total | UK Fund | plans | plans | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Current service cost 1 | – | 44 | 8 | 52 | – | 39 | 11 | 50 |
Past service cost and curtailments 2 | – | 2 | (1) | 1 | 8 | – | 1 | 9 |
Settlement cost 3 | – | 3 | – | 3 | – | 2 | – | 2 |
Interest income on pension plan assets | (56) | (41) | – | (97) | (57) | (43) | – | (100) |
Interest on pension plan liab il it ies | 54 | 41 | 8 | 103 | 56 | 41 | 8 | 105 |
Total charge to profit before deduction | ||||||||
of tax | (2) | 49 | 15 | 62 | 7 | 39 | 20 | 66 |
Losses/(gains) on plan assets 4 | 78 | (32) | – | 46 | (18) | (52) | (70) | |
Losses/(gains) on liab il it ies | (103) | 6 | (1) | (98) | 30 | 79 | 8 | 117 |
Total losses/(gains) recognised directly | ||||||||
in statement of comprehensive income | ||||||||
before tax | (25) | (26) | (1) | (52) | 12 | 27 | 8 | 47 |
Deferred taxation | 5 | 7 | – | 12 | (1) | (10) | – | (11) |
Total losses/(gains) after tax | (20) | (19) | (1) | (40) | 11 | 17 | 8 | 36 |
1
Includes admin
istrat
ive expenses paid out of plan assets of $1 mill
ion (2023:$1 m
ill
ion ) and actuar
ial losses of $1 mill
ion (2023: $2 m
ill
ion) that are
immed
iately
recognised through P&L in line with the requirements of IAS 19
2
Relates to plan amendments in India
3
Terminat
ion benefits pa
id from the pension plan in Indonesia
4
The actual return on the UK Fund assets was a loss of $22 mill
ion (2023: $75 m
ill
ion ga
in) and on overseas plan assets was a gain of $73 mill
ion (2023: $95 m
ill
ion
gain)
Movement in the defic
it dur
ing the year comprise:
| 2024 | 2023 | |||||||
Funded plans | Funded plans | |||||||
Overseas | Unfunded | Overseas | Unfunded | |||||
UK Fund | plans | plans | Total | UK Fund | plans | plans | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Surplus/(Deficit) | 40 | (17) | (189) | (166) | 48 | 1 | (177) | (128) |
Contribut ions | 13 | 39 | 16 | 68 | 8 | 59 | 14 | 81 |
Current service cost 1 | – | (44) | (8) | (52) | – | (39) | (11) | (50) |
Past service cost and curtailments | – | (2) | 1 | (1) | (8) | – | (1) | (9) |
Settlement costs and transfers impact | – | (3) | – | (3) | – | (2) | – | (2) |
Net interest on the net defined benefit | ||||||||
asset/liab il ity | 2 | – | (8) | (6) | 1 | 2 | (8) | (5) |
Actuarial (losses)/gains | 25 | 26 | 1 | 52 | (12) | (27) | (8) | (47) |
Asset held for Sale | – | – | – | – | – | (7) | 6 | (1) |
Other Movement 2 | – | (1) | – | (1) | – | – | – | – |
Exchange rate adjustment | (2) | 3 | 7 | 8 | 3 | (4) | (4) | (5) |
Surplus/(Deficit) | 78 | 1 | (180) | (101) | 40 | (17) | (189) | (166) |
1
Includes admin
istrat
ive expenses paid out of plan assets of $1 mill
ion (31 December 2023: $1 m
ill
ion)
2
This relates to the Standard Chartered India Provident Fund, which has previously been treated as a defined contribut
ion plan. However, w
ith effect from
November 2024, a min
imum rate of return
is applicable to the plan, and so going forward it will be treated as a defined benefit plan as required by IAS 19. For 2023
this included the impact of plans in Cameroon, Cote D’Ivoire, Jordan and Zimbabwe being excluded from the closing balances and classif
ied separately under
Assets held for Sale
30. Retirement benefit obligat
ions
continued
Financ
ial statements
Notes to the financial statements
356
Standard Chartered
– Annual Report 2024
The Group’s expected contribut
ion to
its defined benefit pension plans in 2025 is $ 68 mill
ion.
2024 | 2023 | |||||
Assets | Obligat ions | Total | Assets | Obligat ions | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
At 1 January 2024 | 2,119 | (2,285) | (166) | 2,004 | (2,132) | (128) |
Contribut ions 1 | 69 | (1) | 68 | 82 | (1) | 81 |
Current service cost 2 | – | (52) | (52) | – | (50) | (50) |
Past service cost and curtailments | – | (1) | (1) | – | (9) | (9) |
Settlement costs 3 | – | (3) | (3) | – | (2) | (2) |
Interest cost on pension plan liab il it ies | – | (103) | (103) | – | (105) | (105) |
Interest income on pension plan assets | 97 | – | 97 | 100 | – | 100 |
Benefits paid out 2 | (169) | 169 | – | (161) | 161 | – |
Actuarial gains/(losses) 4 | (46) | 98 | 52 | 70 | (117) | (47) |
Asset held for Sale | – | – | – | (7) | 6 | (1) |
Other Movement 5 | 212 | (213) | (1) | – | – | – |
Exchange rate adjustment | (58) | 66 | 8 | 31 | (36) | (5) |
At 31 December 2024 | 2,224 | (2,325) | (101) | 2,119 | (2,285) | (166) |
1
Includes employee contribut
ions of $1 m
ill
ion (31 December 2023: $1 m
ill
ion)
2
Includes admin
istrat
ive expenses paid out of plan assets of $1 mill
ion (31 December 2023: $1 m
ill
ion)
3
Impact of settlements relates terminat
ion benefits pa
id out in Indonesia
4
Actuarial gain on obligat
ion compr
ises of $127 mill
ion ga
in (31 December 2023: $50 mill
ion loss) from financial assumpt
ion changes, $1 mill
ion ga
in (31 December
2023: $1 mill
ion loss) from demograph
ic assumption changes and $30 mill
ion loss (31 December 2023: $66 m
ill
ion loss) from exper
ience
5
These are assets and liab
il
it
ies of the Standard Chartered Ind
ia Provident Fund, which has previously been treated as a defined contribut
ion plan. However, w
ith
effect from November 2024, a min
imum rate of return
is applicable to the plan, and so going forward it will be treated as a defined benefit plan as required by
The Group operates equity-settled and cash-settled share-based compensation plans. The fair value of the employee
services (measured by the fair value of the awards granted) received in exchange for the grant of the shares and awards is
recognised as an expense. For deferred share awards granted as part of an annual performance award, the expense is
recognised over the period from the start of the performance period to the vesting date. For example, the expense for
three-year awards granted in 2024 in respect of 2023 performance, which vest in 2025-2027, is recognised as an expense
over the period from 1 January 2023 to the vesting dates in 2025-2027. For all other awards, the expense is recognised over
the period from the date of grant to the vesting date.
For equity-settled awards, the total amount to be expensed over the vesting period is determined by reference to the fair
value of the shares and awards at the date of grant, which excludes the impact of any non-market vesting condit
ions
(for example, profitabil
ity and growth targets). The fair value of equity instruments granted is based on market prices,
if available, at the date of grant. In the absence of market prices, the fair value of the instruments is estimated using an
appropriate valuation technique, such as a binom
ial opt
ion pric
ing model. Non-market vest
ing condit
ions are
included
in assumptions for the number of shares and awards that are expected to vest.
At each balance sheet date, the Group revises its estimates of the number of shares and awards that are expected to
vest. It recognises the impact of the revis
ion of or
ig
inal est
imates, if any, in the income statement and a corresponding
adjustment to equity over the remain
ing vest
ing period. Forfeitures prior to vesting attributable to factors other than the
failure to satisfy service condit
ions and non-market vest
ing condit
ions are treated as a cancellat
ion and the remain
ing
unamortised charge is debited to the income statement at the time of cancellation. The proceeds received net of any
directly attributable transaction costs are credited to share capital (nominal value) and share premium when awards in
the form of options are exercised.
Cash-settled awards are revalued at each balance sheet date and a liab
il
ity recognised on the balance sheet for all
unpaid amounts, with any changes in fair value charged or credited to staff costs in the income statement until the awards
are exercised. Where forfeitures occur prior to vesting that are attributable to factors other than a failure to satisfy service
condit
ions or market-based performance cond
it
ions, the cumulat
ive charge incurred up to the date of forfeiture is credited
to the income statement.
Other accounting estimates and judgements
Share-based payments involve judgement and estimat
ion uncerta
inty exists when determin
ing the expenses and carry
ing
values of share awards at the balance sheet date.
•
LTIP awards are determined using an estimat
ion of the probab
il
ity of meet
ing certain metrics over a three-year
performance period using the Monte Carlo simulat
ion model.
•
Deferred shares are determined using an estimat
ion of expected d
iv
idends.
•
Sharesave Plan valuations are determined using a binom
ial opt
ion-pric
31. Share-based payments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
357
The Group operates a number of share-based arrangements for its executive directors and employees. Details of the share-
based payment charge are set out below.
| 2024¹ | 2023¹ | |||||
Cash | Equity | Total | Cash | Equity | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Deferred share awards | 31 | 160 | 191 | 34 | 103 | 137 |
Other share awards | 34 | 109 | 143 | 19 | 70 | 89 |
Total share-based payments 2 | 65 | 269 | 334 | 53 | 173 | 226 |
1
No forfeiture assumed
2
The total share-based payments charge during the year includes costs relating to Business ventures. Business ventures are established as separate legal entit
ies
with their own employee share ownership plans (ESOP) to attract and incent
iv
ise talent. ESOPs have been set up with share-based payment charges recorded in
2024 with $2 mill
ion (2023: $14 m
ill
ion)
in cash settled and $14 mill
ion (2023: $3 m
ill
ion) equ
ity settled deferred awards spread across 19 entit
ies
Discret
ionary share plans
The 2021 Standard Chartered Share Plan (the ‘2021 Plan’) was approved by shareholders in May 2021 and is the Group’s main
share plan, replacing the 2011 Standard Chartered Share Plan (the ‘2011 Plan’) for new awards from June 2021. It is used to
deliver various types of share awards to employees and former employees of the Group, includ
ing d
irectors and former
executive directors:
Award type | Descript ion and performance measures | Valuation |
Long-Term Incentive | The vesting of awards granted in 2024, 2023 and | The fair value of the relative TSR component is |
Plan (LTIP) awards | 2022 are subject to the following performance | calculated using the probabil ity of meet ing the |
measures: | measures over a three-year performance period, | |
• relative total shareholder return (TSR); | using a Monte Carlo simulat ion model. | |
• return on tangible equity (RoTE) (with a | The value of the remain ing components is based on | |
Common Equity Tier 1 (CET1) underpin); and | the expected performance against the RoTE and | |
• strategic measures (includ ing targets set for | strategic measures in the scorecard and the resulting | |
sustainab il ity linked to business strategy) | estimated number of shares expected to vest at each | |
Each measure is assessed independently over a | reporting date. These combined values are used to | |
three-year period. LTIP awards have an ind iv idual | determine the accounting charge. | |
conduct gateway requirement that results in the | No div idend equ ivalents accrue for the LTIP awards | |
award lapsing if not met. | made in 2024, 2023 or 2022 and the fair value takes | |
this into account, calculated by reference to market | ||
consensus div idend y ield. | ||
Deferred shares | Used to deliver: | The fair value for deferred shares, which are granted |
• the deferred portion of year-end variable | to employees who are not categorised as material risk | |
remuneration, in line with both market practice | takers, is based on 100 per cent of the face value of | |
and regulatory requirements. These awards vest | the shares at the date of grant as the share price will | |
in instalments on anniversar ies of the award date | reflect expectations of all future div idends. | |
specif ied at the t ime of grant. This enables the | For awards granted to material risk takers in 2024, | |
Group to meet regulatory requirements relating to | the fair value of awards takes into account the lack | |
deferral levels, and is in line with market practice. | of div idend equ ivalents, calculated by reference to | |
• replacement buy-out awards to new joiners who | market consensus div idend y ield. | |
forfeit awards on leaving their previous employers. | ||
These vest in the quarter most closely following | ||
the date when the award would have vested at | ||
the previous employer. This enables the Group | ||
to meet regulatory requirements relating to | ||
buy-outs, and is in line with market practice. | ||
Deferred share awards are not subject to any | ||
performance measures. |
The remain
ing l
ife of the 2021 Standard Chartered Share Plan during which new awards can be made is seven years.
LTIP awards
2024 | 2023 | |
Grant date | 12–March | 13–March |
Share price at grant date (£) | 6.60 | 7.40 |
Vesting period (years) | 3–7 | 3–7 |
Expected div ided y ield (%) | 4.2 | 3.1 |
Fair value (RoTE) (£) | 1.55, 1.61, 1.68 | 1.91, 1.85 |
Fair value (TSR) (£) | 0.95, 1.01, 1.06 | 1.08, 1.04 |
Fair value (Strategic) (£) | 2.06, 2.15, 2.24 | 2.54, 2.46 |
31. Share-based payments
continued
Financ
ial statements
Notes to the financial statements
358
Standard Chartered
– Annual Report 2024
Deferred shares – year-end
2024 | ||||
Grant date | 17 June | 11 March | ||
Share price at grant date (£) | 7.24 | 6.56 | ||
Expected | Expected | |||
div idend y ield | Fair value | div idend y ield | Fair value | |
Vesting period (years) | (%) | (£) | (%) | (£) |
1-3 years | N/A | 9.17 | 4.2, 4.2 | 7.65, 8.30 |
1-5 years | 3.8, 3.8, 3.8 | 8.05, 8.20, | 4.2, 4.2, NA | 7.19, 7.49, 8.30 |
3-7 years | 8.35 | 4.2, 4.2 | 6.49, 6.76 | |
2023 | ||||||
Grant date | 18 September | 19 June | 13 March | |||
Share price at grant date (£) | 7.43 | 6.75 | 7.40 | |||
Expected | Expected | Expected | ||||
div idend | div idend | div idend | ||||
yield | Fair value | yield | Fair value | yield | Fair value | |
Vesting period (years) | (%) | (£) | (%) | (£) | (%) | (£) |
1-3 years | N/A | 7.43 | 3.3 | 6.75 | 3.1 | 7.4 |
1-5 years | 3.0 | 6.51 | 3.3, 3.3 | 6.23, 5.83 | 3.1, 3.1 | 6.85, 6.65 |
3-7 years | – | – | – | – | 3.1, 3.1, | 6.65, 6.75, |
3.1, 3.1 | 6.35, 6.16 | |||||
Deferred shares – buy-outs
| 2024 | ||||||||
Grant date | 18-Nov | 23-Sep | 17-Jun | 11-Mar | ||||
Share price at grant date (£) | 9.43 | 7.59 | 7.24 | 6.56 | ||||
Expected | Expected | Expected | Expected | |||||
div idend | div idend | div idend | div idend | |||||
yield | Fair value | yield | Fair value | yield | Fair value | yield | Fair value | |
Vesting period (years) | (%) | (£) | (%) | (£) | (%) | (£) | (%) | (£) |
3 months | 4.2 | 9.59 | 3.8 | 9.07 | 4.2 | 8.22 | ||
4 months | 4.2 | 11.83 | ||||||
6 months | 4.2 | 9.49 | 3.8 | 8.99 | 4.2 | 8.14 | ||
7 months | 4.2 | 11.69 | ||||||
9 months | 4.2 | 9.4 | 3.8 | 8.90 | 4.2 | 8.06 | ||
10 months | ||||||||
1 year | 4.2 | 11.22, 11.36 | 4.2 | 9.02, 9.11, | 3.8 | 8.58, 8.66, | 4.2 | 7.73, 7.81, |
9.21, 9.30 | 8.74 | 7.89, 7.97 | ||||||
2 years | 4.2 | 10.77, | 4.2 | 8.65, 8.74, | 3.8 | 8.26, 8.34 | 4.2 | 7.42, 7.50, |
10.90 | 8.83, 8.93 | 7.57, 7.65 | ||||||
3 years | 4.2 | 10.46 | 4.2 | 8.39 | 4.2 | 7.20, 7.34 | ||
4 years | 4.2 | 10.04 | 4.2 | 7.05 | ||||
5 years | ||||||||
| 2023 | ||||||||
Grant date | 20-Nov | 18-Sep | 19-Jun | 13-Mar | ||||
Share price at grant date (£) | 6.60 | 7.43 | 6.75 | 7.40 | ||||
Expected | Expected | Expected | Expected | |||||
div idend | div idend | div idend | div idend | |||||
yield | Fair value | yield | Fair value | yield | Fair value | yield | Fair value | |
Vesting period (years) | (%) | (£) | (%) | (£) | (%) | (£) | (%) | (£) |
3 months | 3.0 | 7.38 | 3.3 | 6.7 | 3.1 | 7.34 | ||
4 months | 3.0 | 6.54 | ||||||
6 months | 3.0 | 7.32 | 3.3 | 6.64 | ||||
7 months | 3.0 | 6.49 | ||||||
9 months | 3.0 | 7.27 | 3.3 | 6.48, 6.59 | ||||
10 months | 3.0 | 6.44 | ||||||
1 year | 3.0 | 6.25, 6.30, | 3.0 | 7.06, 7.11, | 3.3 | 6.18, 6.38, | 3.1 | 7.12, 7.18 |
6.35, 6.39 | 7.16, 7.22 | 6.43, 6.54 | ||||||
2 years | 3.0 | 6.12, 6.16, | 3.0 | 6.85, 6.9, | 3.3 | 5.98, 6.18, | 3.1 | 6.91, 6.96 |
6.21 | 6.95, 7.01 | 6.33 | ||||||
3 years | 3.0 | 5.94, 5.98, | 3.0 | 6.65, 6.7, | 3.3 | 5.79, 5.98, | 3.1 | 6.70, 6.75 |
6.03 | 6.8 | 6.13 | ||||||
4 years | 3.0 | 5.76 | 3.1 | 6.50, 6.55 | ||||
5 years | 3.1 | 6.35 | ||||||
31. Share-based payments
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
359
All Employee Sharesave Plans
Under the 2023 Sharesave Plan, employees may open a savings contract and save up to £500 (increased from £250 since 2024)
per month over three years to purchase ordinary shares in the Company at a discount of up to 20 per cent (the ‘option exercise
price’). The discount applies to higher of: the 5-day average share price prior to the inv
itat
ion or the closing share price on the
last trading day prior to the inv
itat
ion. At the end of the savings contract they have a period of six months to exercise the option.
There are no performance measures attached to Sharesave options, and no exercise price is payable to receive an option.
In some countries in which the Group operates, it is not possible to operate equity-settled Sharesave, typically due to securit
ies
law and regulatory restrict
ions. In these countr
ies, where possible, the Group offers an equivalent cash-based alternative to
its employees.
The remain
ing l
ife of the 2023 Sharesave Plan during which new awards can be made is nine years.
Valuation – Sharesave:
Options under the Sharesave plans are valued using a binom
ial opt
ion-pric
ing model. The same fa
ir value is applied to all
employees includ
ing execut
ive directors. The fair value per option granted and the assumptions used in the calculation are
as follows:
All Employee Sharesave Plan (Sharesave)
2024 | 2023 | |
Grant date | 23 September | 18 September |
Share price at grant date (£) | 7.59 | 7.35 |
Exercise price (£) | 6.10 | 5.88 |
Vesting period (years) | 3 | 3 |
Expected volatil ity (%) | 32.9 | 36.7 |
Expected option life (years) | 3.5 | 3.5 |
Risk-free rate (%) | 3.88 | 4.48 |
Expected div idend y ield (%) | 4.2 | 3.0 |
Fair value (£) | 2.73 | 3.05 |
The expected volatil
ity
is based on histor
ical volat
il
ity over the last three years, or the three years pr
ior to grant. The expected
life is the average expected period to exercise. The risk-free rate of return is the yield on zero-coupon UK Government bonds
of a term consistent with the assumed option life. The expected div
idend y
ield is calculated by reference to market consensus
div
idend y
ield.
Lim
its
An award shall not be granted under the 2021 Plan in any calendar year if, at the time of its proposed grant, it would cause the
number of Standard Chartered PLC ordinary shares allocated in the period of 10 calendar years, ending with that calendar year,
under the 2021 Plan and under any other discret
ionary share plan operated by Standard Chartered PLC to exceed 5 per cent of
the ordinary share capital of Standard Chartered PLC in issue at that time.
An award shall not be granted under the 2021 Plan or 2023 Sharesave Plan in any calendar year if, at the time of its proposed
grant, it would cause the number of Standard Chartered PLC ordinary shares allocated in the period of 10 calendar years ending
with that calendar year, under the 2021 Plan or 2023 Sharesave Plan and under any other employee share plan operated by
Standard Chartered PLC to exceed 10 per cent of the ordinary share capital of Standard Chartered PLC in issue at that time.
An award shall not be granted under the 2021 Plan or 2023 Sharesave Plan in any calendar year if, at the time of its proposed
grant, it would cause the number of Standard Chartered PLC ordinary shares which may be issued or transferred pursuant to
awards then outstanding under the 2021 Plan or 2023 Sharesave Plan as relevant to exceed such number as represents 10 per
cent of the ordinary share capital of Standard Chartered PLC in issue at that time.
The number of Standard Chartered PLC ordinary shares which may be issued pursuant to awards granted to an ind
iv
idual
under the 2021 or 2023 Plan in any 12-month period must not exceed 1 per cent of the ordinary share capital of Standard
Chartered PLC in issue at that time.
As at 1 January 2024 and 31 December 2024, the shareholder dilut
ion under our d
iscret
ionary and Sharesave plans adopted by
Standard Chartered PLC and its subsid
iar
ies represented 4.5 per cent and 4.9 per cent of the issued ordinary share capital of
Standard Chartered PLC respectively. Accordingly, the number of Standard Chartered PLC shares available to be granted under
all discret
ionary and Sharesave plans at the beg
inn
ing and the end of the year ended 31 December 2024 were 147,876,885 and
123,504,051 respectively.
The maximum number of Standard Chartered PLC shares that may be issued in respect of share options and awards granted
under the discret
ionary and Sharesave plans dur
ing the year ended 31 December 2024 div
ided by the we
ighted average
number of Standard Chartered PLC shares in issue for the year ended 31 December 2024 is 1.5 per cent.
Standard Chartered PLC has been granted a waiver from strict compliance with Rules 17.03A, 17.03B(1), 17.03E and 17.03(18) of the
Rules Governing the List
ing of Secur
it
ies on the Stock Exchange of Hong Kong. Deta
ils are set out in the market announcement
made on 30 March 2023. In relation to the waiver of strict compliance with Note 1 to 17.03(18), in 2024 no changes to the plan
rules have been proposed that fall with
in scope of d
isclosure requirements under the terms of the waiver.
31. Share-based payments
continued
Financ
ial statements
Notes to the financial statements
360
Standard Chartered
– Annual Report 2024
Reconcil
iat
ion of share award movements for the year to 31 December 2024
Weighted | ||||
average | ||||
Sharesave | ||||
Discret ionary 1 | exercise price | |||
LTIP | Deferred shares | Sharesave 4,5 | (£) | |
Outstanding at 1 January 2024 | 10,947,382 | 47,068,204 | 16,902,217 | 4.49 |
Granted 2,3 | 2,320,695 | 25,712,216 | 9,707,454 | – |
Lapsed 6 | (2,703,518) | (1,431,969) | (1,289,780) | 4.88 |
Vested/Exercised | (923,866) | (19,654,725) | (4,754,780) | 3.42 |
Outstanding at 31 December 2024 | 9,640,693 | 51,693,726 | 20,565,111 | 5.48 |
Total number of securit ies ava ilable for issue under the plan | 9,640,693 | 51,693,726 | 20,565,111 | 5.48 |
Percentage of the issued shares this represents as at 31 December 2024 | 0.40 | 2.13 | 0.85 | |
Exercisable as at 31 December 2024 | – | 250,094 | 1,121,867 | 3.78 |
Range of exercise prices (£) 3 | – | – | 3.67 – 6.10 | |
Intrins ic value of vested but not exerc ised options ($ mill ion) | – | 3.10 | 8.57 | |
Weighted average contractual remain ing l ife (years) | 7.32 | 8.22 | 2.58 | |
Weighted average share price for awards exercised during the period (£) | 6.60 | 6.68 | 8.20 | |
1
Granted under the 2021 Plan and 2011 Plan. Employees do not contribute to the cost of these awards
2
2,315,422 (LTIP) granted on 12 March 2024; 5,059 (LTIP) granted as a notional div
idend on 1 March 2024; 214 (LTIP) granted as a not
ional div
idend on 8 August 2024.
24,381,791 (Deferred shares) granted on 11 March 2024; 229,896 (Deferred shares) granted as a notional div
idend on 1 March 2024; 463,694 (Deferred shares)
granted on 17 June 2024; 86,702 (Deferred shares) granted as a notional div
idend on 8 August 2024; 287,533 (Deferred shares) granted on 23 September 2024;
262,600 (Deferred shares) granted on 18 November 2024. 9,707,454 (Sharesave) granted on 23 September 2024
3
No discret
ionary awards (LTIP or deferred/buy-out awards) have been granted
in the form of options since June 2015. For histor
ic awards granted as opt
ions and
exercised in the period to 31 December 2024, the exercise price of deferred/ buy-out shares options was nil
4
For Sharesave granted in 2024 the exercise price is £6.10 per share, a 20% discount from the closing share price on 16 August 2024 (£7.624). The average of the
closing prices over the five days to the inv
itat
ion date of 19 August 2024 was £7.421
5
All Sharesave awards are in the form of options. The exercise price of Sharesave options is £ 6.10 for options granted in 2024 £ 5.88 for options granted in 2023,
£4.23 for options granted in 2022, £3.67 for options granted in 2021 and £3.14 for options granted in 2020
6
No options or share awards were cancelled in the period
Reconcil
iat
ion of share award movements for the year to 31 December 2023
Weighted | ||||
average | ||||
Sharesave | ||||
Discret ionary 1 | exercise price | |||
LTIP | Deferred shares | Sharesave | (£) | |
Outstanding at 1 January 2023 | 11,339,951 | 46,449,040 | 17,109,519 | 3.81 |
Granted 2,3 | 2,142,057 | 21,668,459 | 5,668,325 | – |
Lapsed | (1,911,931) | (1,231,514) | (1,407,502) | 4.14 |
Exercised | (622,695) | (19,817,781) | (4,468,125) | 3.75 |
Outstanding at 31 December 2023 | 10,947,382 | 47,068,204 | 16,902,217 | 4.49 |
Total number of securit ies ava ilable for issue under the plan | 10,947,382 | 47,068,204 | 16,902,217 | |
Percentage of the issued shares this represents as at 31 December 2023 | 0.41 | 1.76 | 0.63 | 4.49 |
Exercisable as at 31 December 2023 | – | 685,077 | 2,482,392 | 3.16 |
Range of exercise prices (£) 3 | – | – | 3.14 – 5.88 | |
Intrins ic value of vested but not exerc ised options ($ mill ion) | – | 5.81 | 11.08 | |
Weighted average contractual remain ing l ife (years) | 7.59 | 8.11 | 2.30 | |
Weighted average share price for awards exercised during the period (£) | 6.94 | 7.04 | 6.65 | |
1
Granted under the 2021 Plan and 2011 Plan. Employees do not contribute to the cost of these awards
2
2,134,238 (LTIP) granted on 13 March 2023, 6,501 (LTIP) granted as a notional div
idend on 1 March 2023, 1318 (LTIP) granted as a not
ional div
idend on 1 September
2023, 20,828,385 (Deferred shares) granted on 13 March 2023, 121,314 (Deferred shares) granted as a notional div
idend on 1 March 2023, 338,583 (Deferred shares)
granted on 19 June 2023, 235,186 (Deferred shares) granted on 18 September 2023, 52,082 (Deferred shares) granted as a notional div
idend on 1 September 2023,
92,909 (Deferred shares) granted on 20 November 2023; 5,668,325 (Sharesave) granted on 18 September 2023 under the 2023 Sharesave Plan
3
For Sharesave granted in 2023 the exercise price is £5.88 per share, a 20% discount from the average of the closing prices over the five days to the inv
itat
ion date
of 21 August 2023. The closing share price on 18 August 2013 was £7.214
See pages 211 and 212 of the Standard Chartered PLC Annual Report 2023 for informat
ion spec
if
ic to D
Financ
ial statements
Standard Chartered
– Annual Report 2024
361
iary undertak
ings, jo
int ventures and assoc
iates
Associates and jo
int arrangements
The Group did not have any contractual interest in jo
int operat
ions.
Investments in associates and jo
int ventures are accounted for by the equ
ity method of accounting and are in
it
ially
recognised at cost. The Group’s investment in associates and jo
int ventures
includes goodwill ident
ified on acqu
is
it
ion
(net of any accumulated impa
irment loss).
The Group’s share of its associates’ and jo
int ventures’ post-acqu
is
it
ion profits or losses is recognised in the income
statement, and its share of post-acquis
it
ion movements in other comprehensive income is recognised in reserves. The
cumulative post-acquis
it
ion movements are adjusted against the carrying amount of the investment. When the Group’s
share of losses in an associate or a jo
int venture equals or exceeds
its interest in the associate, includ
ing any other
unsecured receivables, the Group does not recognise further losses, unless it has incurred obligat
ions or made payments
on behalf of the associate or jo
int venture.
Unrealised gains and losses on transactions between the Group and its associates and jo
int ventures are el
im
inated to the
extent of the Group’s interest in the associates and jo
int ventures. At each balance sheet date, the Group assesses whether
there is any object
ive ev
idence of impa
irment
in the investment in associates and jo
int ventures. Such ev
idence includes a
sign
ificant or prolonged decl
ine in the fair value of the Group’s investment in an associate or jo
int venture below
its cost,
among other factors.
Sign
ificant account
ing estimates and judgements
The Group applies judgement in determin
ing
if it has control, jo
int control or s
ign
ificant
influence over subsid
iar
ies,
joint ventures and assoc
iates respectively. These judgements are based upon ident
ify
ing the relevant activ
it
ies of
counterparties, being those activ
it
ies that sign
ificantly affect the ent
it
ies returns, and further mak
ing a decis
ion of
if the
Group has control over those entit
ies, joint control, or has s
ign
ificant
influence (being the power to partic
ipate
in the
financial and operat
ing policy decis
ions but not control them).
These judgements are at times determined by equity holdings, and the voting rights associated with those holdings.
However, further considerat
ions
includ
ing but not l
im
ited to board seats, adv
isory committee members and special
ist
knowledge of some decis
ion-makers are also taken
into account. Further judgement is required when determin
ing
if the
Group has de-facto control over an entity even though it may hold less than 50% of the voting shares of that entity.
Judgement is required to determine the relative size of the Group’s shareholding when compared to the size and dispers
ion
of other shareholders.
Impairment testing of investments in associates and jo
int ventures, and on a Company level
investments in subsid
iar
ies is
performed if there is a possible ind
icator of
impa
irment. Judgement
is used to determine if there is object
ive ev
idence of
impa
irment. Objective ev
idence may be observable data such as losses incurred on the investment when applying the
equity method, the granting of concessions as a result of financ
ial d
iff
iculty, or breaches of contracts/regulatory fines of
the associate or jo
int venture. Further judgement
is required when consider
ing broader
ind
icators of
impa
irment such as
losses of active markets or ratings downgrades across key markets in which the associate or jo
int venture operate
in.
Impairment testing is based on estimates includ
ing forecast
ing the expected cash flows from the investments, growth
rates, terminal values and the discount rate used in calculation of the present values of those cash flows. The estimat
ion
of future cash flows and the level to which they are discounted is inherently uncertain and requires sign
ificant judgement.
ions
The acquis
it
ion method of accounting is used to account for the acquis
it
ion of subsid
iar
ies by the Group.
In the Company’s financial statements,
investment in subsid
iar
ies, associates and jo
int ventures are held at cost
less impa
irment and d
iv
idends from pre-acqu
is
it
ion profits received prior to 1 January 2009, if any. Inter-company
transactions, balances and unrealised gains and losses on transactions between Group companies are elim
inated
2024 | 2023 | |
Investments in subsid iary undertak ings | $mill ion | $mill ion |
As at 1 January | 60,791 | 60,975 |
Addit ions 1 | 1,631 | 1,566 |
Disposal 2 | (803) | (1,750) |
Other Movements 3 | (26) | – |
As at 31 December | 61,593 | 60,791 |
1
Includes internal Addit
ional T
ier 1 Issuances of $980 mill
ion by Standard Chartered Bank, $600 m
ill
ion by Standard Chartered Bank (Hong Kong) L
im
ited
(31 December 2023: Includes internal Addit
ional T
ier 1 Issuances of $992 mill
ion by Standard Chartered Bank, $575 m
ill
ion add
it
ional
investment in Standard
Chartered Holdings Lim
ited)
2
Includes redemption of Preference share capital of $553 mill
ion by Standard Chartered Bank S
ingapore Lim
ited and add
it
ional T
ier 1 capital of $250 mill
ion by
Standard Chartered Bank (Hong Kong) Lim
ited (31 December 2023: Add
it
ional T
ier1 capital of $1,000 mill
ion by Standard Chartered Bank)
3
Relates to realised translation gain ($26 mill
ion) on redempt
ion of AT1 securit
ies of SGD 750 m
ill
ion ($553 m
ill
ion)
32. Investments in subsid
iary undertak
ings, jo
int ventures and assoc
iates
continued
362
Standard Chartered
– Annual Report 2024
Financ
ial statements
Notes to the financial statements
At 31 December 2024, the princ
ipal subs
id
iary undertak
ings, all ind
irectly held except for Standard Chartered Bank (Hong Kong)
Lim
ited, and pr
inc
ipally engaged
in the business of banking and provis
ion of other financial serv
ices, were as follows:
Group interest | |||
in ordinary | |||
share capital | Total Issued share capital | ||
Princ ipal subs id iary¹ | Main areas of operation | % | (mill ions) |
Standard Chartered Bank | Refer footnote³ | 100 | US$ 20,597⁴ |
Standard Chartered Bank (Hong Kong) Lim ited | Hong Kong | 100 | Refer footnote⁵ |
Standard Chartered Bank (Singapore) Lim ited | Singapore | 100 | Refer footnote⁶ |
Standard Chartered Bank Korea Lim ited | Korea | 100 | KRW 1,313,043 |
Standard Chartered Bank (China) Lim ited² | China | 100 | CNY 10,727 |
Standard Chartered Bank (Taiwan) Lim ited | Taiwan | 100 | TWD 29,106 |
Standard Chartered Bank AG | Germany | 100 | EUR 180 |
Standard Chartered Bank Malaysia Berhad | Malaysia | 100 | RM 880⁷ |
Standard Chartered Bank (Thai) Public Company Lim ited | Thailand | 99.87 | THB 14,837 |
Standard Chartered Bank (Pakistan) Lim ited | Pakistan | 98.99 | PKR 38,716 |
Standard Chartered Bank Botswana Lim ited | Botswana | 75.83 | BWP 298 |
Standard Chartered Bank Kenya Lim ited | Kenya | 74.32 | KES 2,169⁸ |
Mox Bank Lim ited | Hong Kong | 71.58 | HKD 5,279 |
Standard Chartered Bank Nepal Lim ited | Nepal | 70.21 | NPR 9,429 |
Standard Chartered Bank Ghana PLC | Ghana | 69.42 | GHS 409⁹ |
1
Unless other wise stated the share capital comprises of ordinary or common shares refer to note 40 for proportion of shares held and for country of incorporation
2
Registered as a Lim
ited company under the Law of Ch
ina
3
Includes United Kingdom, Middle East, South Asia, Asia Pacif
ic, Amer
icas and, through Group companies, Africa
4
US$1.00 Ordinary 20,596,529,642; US$0.01 Non-Cumulative Irredeemable Preference 24,000 and US$5.00 Non-Cumulative Redeemable Preference 37500
5
HKD Ordinary-A 12,502,836,515; HKD Ordinary-B -78,000,000; US$ Ordinary-C 2,698,156,122 and US$ Ordinary-D 3,010,485,610
6
SGD Ordinary-A 1,653,000,000; SGD Non-cumulative Class D Tier-1 Preference 400,000,000; US$ Ordinary-A 3,383,000,000; US$ Non-cumulative Class B Tier-1
Preference 500,000,000; US$ Ordinary-B 733,000,000 and US$ Ordinary-C 333,000,000
7
RM Ordinary 499,999,988 and RM Irredeemable Convertible Preference 380,190,000
8
KES5.00 Ordinary 1,889,252,945 and KES5.00 Preference 280,000,000
9
GHS Ordinary 400,000,000 and GHS0.52 Non-cumulative Irredeemable Preference Shares 9,092,858
A complete list of subsid
iary undertak
ing is included in Note 40.
The Group does not have any material non-controlling interest except as listed above, which contribute $36 mill
ion (31
December 2023: $35 mill
ion) of the (loss)/Profit attr
ibutable to non-controlling interest and $292 mill
ion (31 December 2023:
$290 mill
ion) of the equ
ity attributable to non-controlling interests
During 2024 the Group disposed of its investments in subsid
iar
ies and the gain/loss on disposal was SCB Zimbabwe Lim
ited
& Africa Enterprise Network Trust (loss:$172 mill
ion
includ
ing translat
ion adjustment loss: $190 mill
ion), SCB Angola S.A.
(loss: $26 mill
ion
includ
ing translat
ion adjustment loss:$31 mill
ion), SCB S
ierra Leone Lim
ited (loss: $19 m
ill
ion
includ
ing translat
ion
adjustment loss:$25 mill
ion), Shoal L
im
ited (ga
in:$14 mill
ion) and Autumn l
ife Pte. Ltd. (gain:$3 mill
ion).
While the Group’s subsid
iar
ies are subject to local statutory capital and liqu
id
ity requirements in relation to foreign exchange
remittance, these restrict
ions ar
ise in the normal course of business and do not sign
ificantly restr
ict the Group’s abil
ity to access
or use assets and settle liab
il
it
ies of the Group.
The Group does not have sign
ificant restr
ict
ions on
its abil
ity to access or use
its assets and settle its liab
il
it
ies other than those
resulting from the regulatory framework with
in wh
ich the banking subsid
iar
ies operate. These frameworks require banking
operations to keep certain levels of regulatory capital, liqu
id assets, exposure l
im
its and comply w
ith other required ratios.
These restrict
ions are summar
ised below:
Regulatory and liqu
id
ity requirements
The Group’s subsid
iar
ies are required to mainta
in m
in
imum cap
ital, leverage ratios, liqu
id
ity and exposure ratios which therefore
restrict the abil
ity of these subs
id
iar
ies to distr
ibute cash or other assets to the parent company.
The subsid
iar
ies are also required to mainta
in balances w
ith central banks and other regulatory authorit
ies
in the countries in
which they operate. At 31 December 2024, the total cash and balances with central banks was $63 bill
ion (31 December 2023:
$70 bill
ion) of wh
ich $8 bill
ion (31 December 2023: $6 b
ill
ion)
is restricted.
Statutory requirements
The Group’s subsid
iar
ies are subject to statutory requirements not to make distr
ibut
ions of capital and unrealised profits to the
parent company, generally to mainta
in solvency. These requ
irements restrict the abil
ity of subs
id
iar
ies to remit div
idends to the
Group. Certain subsid
iar
ies are also subject to local exchange control regulations which provide for restrict
ions on export
ing
capital from the country other than through normal div
idends.
32. Investments in subsid
iary undertak
ings, jo
int ventures and assoc
iates
continued
Standard Chartered
– Annual Report 2024
Financ
ial statements
363
Contractual requirements
The encumbered assets in the balance sheet of the Group’s subsid
iar
ies are not available for transfer around the Group.
Share of profit from investment in associates and jo
int ventures compr
ises:
2024 | 2023 | |
$mill ion | $mill ion | |
Loss from Investment in Joint Ventures | (10) | (13) |
Profit from Investment in Associates | 118 | 154 |
Total | 108 | 141 |
2024 | 2023 | |
Interests in associates and jo int ventures | $mill ion | $mill ion |
As at 1 January | 966 | 1,631 |
Exchange translation difference | (40) | 16 |
Addit ions 1 | 22 | 64 |
Share of profits | 108 | 141 |
Div idend rece ived 2 | (36) | (11) |
Impairment | – | (872) |
Share of FVOCI and Other reserves | 9 | (7) |
Other movements 3 | (9) | 4 |
As at 31 December | 1,020 | 966 |
1
Includes non-cash considerat
ion of $6.4 m
ill
ion (d
isposal of Autumn Life) from Vault 22 Solutions Holdings Ltd and $3.6 mill
ion (convert
ible notes) from Verif
ied
Impacts Holdings Pte Ltd
2
Includes $30 mill
ion cap
ital distr
ibut
ion from Ascenta IV
3
Includes Investment in Seychelles International Mercantile Banking Corporation Lim
ited class
if
ieds as held for sale
A complete list of the Group’s interest in associates is included in Note 40. The Group’s princ
ipal assoc
iates are:
Group interest | |||
in ordinary | |||
Nature of | Main areas | share capital | |
Associate | activ it ies | of operation | % |
China Bohai Bank | Banking | China | 16.26 |
CurrencyFair Lim ited Exchange Ireland | Banking | Ireland | 43.42 |
The Group’s ownership percentage in China Bohai Bank is 16.26%.
Although the Group’s investment in China Bohai Bank is less than 20 per cent, it is an associate because of the sign
ificant
influence the Group can exercise over its management and financ
ial and operat
ing polic
ies. Th
is influence is exercised through
Board representation and the provis
ion of techn
ical expertise to Bohai. The Group applies the equity method of accounting for
investments in associates.
If the Group did not have sign
ificant
influence over Bohai, the investment would be measured at fair value rather than the
current carrying value, which is based on the applicat
ion of the equ
ity method as described in the accounting policy note.
Bohai publishes their results after the Group. As it is impract
icable for Boha
i to prepare financ
ial statements sooner, the Group
recognises its share of Bohai’s earnings on a three-month lag basis. Therefore, the Group recognised its share of Bohai’s profits
and movements in other comprehensive income for the 12 months ended 30 September 2024 in the Group’s consolidated
statement of income and consolidated statement of comprehensive income for the year ended 31 December 2024, also
consider
ing any known changes or events
in the subsequent period from 1 October 2024 to 31 December 2024 that would
have materially affected Bohai’s results.
32. Investments in subsid
iary undertak
ings, jo
int ventures and assoc
iates
continued
364
Standard Chartered
– Annual Report 2024
Financ
ial statements
Notes to the financial statements
Impairment testing
On 31 December 2024, the listed equity value of Bohai is below the carrying amount of the Group‘s investment in associate.
The Group assessed the carrying value of its investment in Bohai for impa
irment and concluded that no
impa
irment was
required for the period ended 31 December 2024 ($850 mill
ion for the year ended 31 December 2023; $1,459 m
ill
ion of
accumulated impa
irment as at 31 December 2024) . The carry
ing value of the Group’s investment in Bohai of $738 mill
ion
(2023: $700 mill
ion) represents the h
igher of the value in use and fair value less costs of disposal. The financ
ial forecasts used
in the recoverable amount, a value in use (VIU) calculation, reflects Group management’s best estimate of Bohai’s future
earnings, in line with current economic condit
ions and latest Boha
i’s reported results.
31.12.24 | 31.12.23 | |
Bohai | $mill ion | $mill ion |
VIU | 738 | 700 |
Carrying amount 1 | 738 | 700 |
Market capital isat ion 2 | 338 | 418 |
1
The Group’s 16.26% share in the net assets less other equity instruments which the Group does not hold
2
Number of shares held by the Group multipl
ied by the quoted share pr
ice at period end
Basis of recoverable amount
The impa
irment test was performed by compar
ing the recoverable amount of Bohai, determined as the higher of VIU and fair
value less costs to dispose, with its carrying amount.
The VIU is calculated using a div
idend d
iscount model (DDM), which estimates the distr
ibutable future cashflows to the equ
ity
holders, after adjusting for regulatory cap
ital requirements, for a 5-year period, after which a terminal value (TV) is calculated
based on the Price to Earnings (P/E) exit multiple. The key assumptions in the VIU are as follows:
•
Short to medium term project
ions are based on Group management’s best est
imates of future profits available to ordinary
shareholders and have been determined with reference to the latest published financ
ial results, the h
istor
ical performance of
Bohai and forward looking macro-economic variables for Mainland China.
•
The projections use ava
ilable informat
ion and
include normalised performance over the forecast period, inclus
ive of: (
i)
balance sheet growth assumptions based on the short to medium term GDP growth rates for Mainland China; (i
i) Net Interest
Income (NII) projecting
interest income (primar
ily the 1-year Loan Pr
ime Rate, 1-year LPR, as basis) and interest expenses
(Shanghai Interbank Offered Rate, 3m SHIBOR, as basis) which reference to forecast third party market interest rates plus/
minus a observed histor
ical spread to the benchmark rate; (
i
i
i) Non-interest income estimated according to the latest
available performance of Bohai, with considerat
ion of the contr
ibut
ion of the const
ituent parts of the non-interest income; (iv)
ECL assumptions using Bohai’s histor
ical reported ECL, based on the proport
ion of ECL from loans and advances to customers
and financial
investments measured at amortised cost and FVOCI; and (v) Statutory tax rate of 25% was applied to the
taxable profit of Bohai, after considerat
ion of taxable and non-taxable elements, cons
istent with histor
ical reported results;
•
The distr
ibutable reserves under the DDM are calculated as the d
ifference between the capital resources and the capital
requirements in each of the forecast periods. The calculation assumes a target CET 1 capital ratio and risk weighted asset
(RWA) growth consistent with total assets.
•
The discount rate applied to these cash flows was estimated with reference to a capital asset pric
ing model (CAPM), wh
ich
includes a long-term risk-free rate, beta, and company risk premium assumptions for Bohai; and
•
A long-term average P/E multiple of comparable companies is used to derive a TV after the 5-year forecast period.
The VIU model was refined during 2024 to include more granular forecasting assumptions for each period. While it is
impract
icable for the Group to est
imate the impact on future periods, the key changes to the 2024 model are summarised
as follows:
•
Separately forecast interest income and interest expenses, by applying an estimated yield and cost to forecasted interest-
earning assets and interest-bearing liab
il
it
ies of each forecast per
iod. In the previous model, net interest income was
estimated by applying a net interest margin (NIM) percentage to the interest earning assets of each period.
•
Non-interest income was calculated by applying the histor
ical average return on the respect
ive components of the non-
interest income, grown at the relevant GDP rate for Mainland China, over the forecasted period. In the previous model, the
non-interest income was projected based on the latest actual results reported by Bohai and grown according to long-term
GDP rate
•
A statutory tax rate of 25% was applied to the taxable profit of Bohai, after considerat
ion of taxable and non-taxable
elements, consistent with the 5yr-average of histor
ical reported results. In prev
ious model, the calculation of the tax expenses
was based on the reported effective tax rate as per published financ
ial statements of Boha
i; and
•
A P/E multiple was used to calculate the TV. The Gordon Growth model was used in the previous period. The Group will
continue to evaluate the TV under both methods.
32. Investments in subsid
iary undertak
ings, jo
int ventures and assoc
iates
continued
Standard Chartered
– Annual Report 2024
Financ
ial statements
365
The key assumptions used for the VIU calculation:
31.12.24 | 31.12.23 | |
Post-tax discount rate 1 | 10.5% | 11.0% |
Total balance-sheet (and risk weighted assets) growth rate | 3.77% – 4.52% | 4.00% |
P/E multiple used to calculate TV² | 5.6x | N/A |
Interest income 3 | 3.00%–3.56% | N/A |
Interest expense 3 | 1.77%–2.01% | N/A |
Net fee income growth rate | 3.77%–4.52% | 4.00% |
Expected credit losses as a percentage of customer loans 4 | 0.84%–1.36% | 0.80%–1.24% |
Expected credit losses as a percentage of financ ial investments measured at amortised cost | ||
and FVOCI 4 | 0.48%–1.26% | 0.35%–0.67% |
Tax expense 5 | 5.4% – 14.1% | 12.0% – 16.0% |
Capital maintenance ratio | 8.00% | 8.00% |
1
Pre-tax Discount rate of 15.31% was used in 2024 (2023: 13.68%). The difference in pre-tax discount rates relates to changes in effective tax rate
2
P/E multiple approach was introduced in 2024, therefore comparative not applicable to previous period
3
1yr LPR and 3m SHIBOR rate forecasts were sourced from an external third-party provider, and with a spread derived from long term histor
ical averages, are used
to produce the interest income and interest expense forecasts. These assumptions were introduced in 2024 and are therefore not applicable to previous period.
For 31 December 2023, NIM range of 1.21%-1.48% was used in the model
4
The low end of the range is based on histor
ical loss rates, and the h
igh end of the range includes adjustments for incremental judgemental management overlays
5
The tax rates disclosed are the impl
ied effect
ive tax rates (%) over the 5-yr forecast period. The 31 December 2024 tax expense forecasts, calculated from the
taxable profit, considered the 5-year histor
ical average of non-taxable
income (16.09%) and non-deductible expenses (12.53%). A statutory tax rate of 25% was
applied to the taxable profit of Bohai, after considerat
ion of taxable and non-taxable elements. In per
iods when losses are forecast, the effective tax rate applied
was 0%. For the 31 December 2023 VIU, the calculation of the tax expenses was based on the reported effective tax rate. The 5-year histor
ical average effect
ive
tax rate (2019 to 2023) of Bohai is 11.5%, with the 5-year low being 1.6% (2023) and the 5-year high being 17.3% (2019)
The table below discloses sensit
iv
it
ies to the key assumpt
ions of Bohai, according to management’s judgement of reasonably
possible changes. Changes were applied to every cash flow year on an ind
iv
idual basis. The percentage change to the
assumptions reflects the level at which management assess the reasonableness of the assumptions used and their impact
on the Value in Use.
Key assumption | Key assumption | ||
increase | decrease | ||
Increase/ | Increase/ | ||
(decrease) | (decrease) | ||
in VIU | in VIU | ||
Sensit iv it ies | basis points | $ mill ion | $ mill ion |
Discount Rate | 100 | (31) | 33 |
Total balance sheet (and risk weighted asset) growth rate | 100 | (26) | 24 |
P/E multiple used to calculate TV | 1.0x | 120 | (120) |
Net interest income – Scenario 1¹ | 10 | (15) | 15 |
Net interest income – Scenario 2² | Various² | 360 | (230) |
Net fee income | 100 | 43 | (42) |
Expected credit losses as a percentage of customer loans | 10 | (147) | 145 |
Expected credit losses as a percentage of financ ial investments measured at amortised | |||
cost and FVOCI | 10 | (78) | 77 |
Tax expense 3 | 300 | 23 | (23) |
Capital maintenance ratio | 50 | (142) | 142 |
1
In September 2024, the People’s Bank of China announced a stimulus package aimed at guid
ing the loan pr
ime rate and deposit rates downward in tandem,
ensuring the stabil
ity of commerc
ial banks’ net interest margins. This scenario assumes that 1yr LPR and 3m SHIBOR increase or decrease by the same amount,
to demonstrate the impact on the VIU of a sim
ilar scenar
io
2
An alternative scenario is that Bohai’s asset yield and liab
il
ity cost move in the same direct
ion, albe
it by different amounts, through the five year forecast period
includ
ing the term
inal value. The key assumption increase sensit
iv
ity assumes that asset yields increase by 25 basis points and liab
il
ity costs increase by 10 basis
points in each period. The key assumption decrease sensit
iv
ity assumes that asset yields decrease by 25 basis points and liab
il
ity costs decrease by 15 basis points
in each period
3
Changes in tax expense applied only to both average percentages of non-taxable income (16.09%) and non-deductible expenses (12.53%). Refer to footnote 5
of the key assumptions table for more details
The following table sets out the summarised financ
ial statements of Ch
ina Bohai Bank prior to the Group’s share of the
associate’s profit being applied:
30.09.24 | 30.09.23 | |
$mill ion | $mill ion | |
Total assets | 244,510 | 246,212 |
Total liab il it ies | 229,259 | 230,101 |
Operating income 1 | 3,583 | 3,640 |
Net profit 2 | 681 | 811 |
Other comprehensive income 1 | 69 | (38) |
1
This represents twelve months of earnings (1 October to 30 September)
2
Bohai only publishes its effective tax rate on a semi-annual basis. The effective tax rate of Bohai for the period that ended 30 June 2024 was 10.1% (1.6%,
Financ
ial statements
Notes to the financial statements
366
Standard Chartered
– Annual Report 2024
ies
Structured entit
ies are consol
idated when the substance of the relationsh
ip between the Group and the structured ent
ity
ind
icates the Group has power over the contractual relevant act
iv
it
ies of the structured entity, is exposed to variable
returns, and can use that power to affect the variable return exposure.
In determin
ing whether to consol
idate a structured entity to which assets have been transferred, the Group takes into
account its abil
ity to d
irect the relevant activ
it
ies of the structured entity. These relevant activ
it
ies are generally evidenced
through a unilateral right to liqu
idate the structured ent
ity, investment in a substantial proportion of the securit
ies
issued
by the structured entity or where the Group holds specif
ic subord
inate securit
ies that embody certa
in controlling rights.
The Group may further consider relevant activ
it
ies embedded with
in contractual arrangements such as call opt
ions which
give the practical abil
ity to d
irect the entity, special relationsh
ips between the structured ent
ity and investors, and if a
single investor has a large exposure to variable returns of the structured entity.
Judgement is required in determin
ing control over structured ent
it
ies. The purpose and des
ign of the entity is considered,
along with a determinat
ion of what the relevant act
iv
it
ies are of the entity and who directs these. Further judgements are
made around which investor is exposed to and absorbs the variable returns of the structured entity. The Group will have to
weigh up all of these facts to consider whether the Group, or another involved party is acting as a princ
ipal
in its own right
or as an agent on behalf of others. Judgement is further required in the ongoing assessment of control over structured
entit
ies, spec
if
ically
if market condit
ions have an effect on the var
Interests in consolidated structured entit
ies:
A structured entity is consolidated into the Group’s financ
ial statements where
the Group controls the structured entity, as per the determinat
ion
in the accounting policy above.
The following table presents the Group’s interests in consolidated structured entit
ies.
31.12.24 | 31.12.23 | |
$mill ion | $mill ion | |
Shipp ing lease | 14 | 52 |
Princ ipal and other structured finance | 474 | 353 |
Total | 488 | 405 |
Interests in unconsolidated structured entit
ies:
Unconsolidated structured entit
ies are all structured ent
it
ies that are not
controlled by the Group. The Group enters into transactions with unconsolidated structured entit
ies
in the normal course of
business to facil
itate customer transact
ions and for specif
ic
investment opportunit
ies. An
interest in a structured entity is
contractual or non-contractual involvement which creates variab
il
ity of the returns of the Group aris
ing from the performance
of the structured entity.
The table below presents the carrying amount of the assets recognised in the financ
ial statements relat
ing to variable interests
held in unconsolidated structured entit
ies, the max
imum exposure to loss relating to those interests and the total assets of the
structured entit
ies. Max
imum exposure to loss is primar
ily l
im
ited to the carry
ing amount of the Group’s on-balance sheet
exposure to the structured entity. For derivat
ives, the max
imum exposure to loss represents the on-balance sheet valuation
and not the notional amount. For commitments and guarantees, the maximum exposure to loss is the notional amount of
potential future losses.
| 2024 | 2023 | |||||||||||
Asset- | Princ ipal | Asset- | Princ ipal | |||||||||
backed | Structured | Finance | Other | backed | Structured | Finance | Other | |||||
securit ies | Lending | Finance | funds | activ it ies | Total | securit ies | Lending | finance | funds | activ it ies | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Group’s interest – | ||||||||||||
assets | ||||||||||||
Financ ial assets | ||||||||||||
held at fair value | ||||||||||||
through profit | ||||||||||||
or loss | 1,222 | 255 | 178 | 124 | – | 1,779 | 954 | 269 | 143 | 137 | – | 1,503 |
Loans and | ||||||||||||
advances/ | ||||||||||||
Investment securit ies | ||||||||||||
at amortised cost | 16,305 | 16,735 | 12,656 | – | 97 | 45,793 | 17,795 | 15,105 | 13,353 | – | 190 | 46,443 |
Investment | ||||||||||||
securit ies (fa ir value | ||||||||||||
through other | ||||||||||||
comprehensive | ||||||||||||
income) | 2,371 | – | – | – | – | 2,371 | 2,443 | – | – | – | – | 2,443 |
Other assets | – | – | 1 | – | – | 1 | – | – | 34 | – | – | 34 |
Total assets | 19,898 | 16,990 | 12,835 | 124 | 97 | 49,944 | 21,192 | 15,374 | 13,530 | 137 | 190 | 50,423 |
Off-balance sheet | – | 11,075 | 6,901 | 63 | 73 | 18,112 | – | 8,869 | 6,691 | – | 20 | 15,580 |
Group’s maximum | ||||||||||||
exposure to loss | 19,898 | 28,065 | 19,736 | 187 | 170 | 68,056 | 21,192 | 24,243 | 20,221 | 137 | 210 | 66,003 |
Total assets of | ||||||||||||
structured entit ies | 129,864 | 17,579 | 14,758 | 226 | – | 162,427 | 191,627 | 15,374 | 31,806 | 250 | 1,688 240,745 | |
33. Structured entit
ies
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
367
The main types of activ
it
ies for which the Group util
ises unconsol
idated structured entit
ies cover synthet
ic credit default swaps
for managed investment funds (includ
ing spec
ial
ised Pr
inc
ipal F
inance funds), portfolio management purposes, structured
finance and asset-backed securit
ies. These are deta
iled as follows:
•
Asset-backed securit
ies (ABS):
The Group also has investments in asset-backed securit
ies
issued by third-party sponsored
and managed structured entit
ies. For the purpose of market mak
ing and at the discret
ion of ABS trad
ing desk, the Group
may hold an immater
ial amount of debt secur
it
ies from structured ent
it
ies or
ig
inated by cred
it portfolio management.
This is disclosed in the ABS column above.
•
Portfolio management (Group sponsored entit
ies):
For the purposes of portfolio management, the Group purchased credit
protection via synthetic credit default swaps from note-issu
ing structured ent
it
ies. Th
is credit protection creates credit risk
which the structured entity and subsequently the end investor absorbs. The referenced assets remain on the Group’s balance
sheet as they are not assigned to these structured entit
ies. The Group cont
inues to own or hold all of the risks and returns
relating to these assets. The credit protection obtained from the regulatory-compliant securit
isat
ion only serves to protect
the Group against losses upon the occurrence of elig
ible cred
it events and the underlying assets are not derecognised
from the Group’s balance sheet. The Group does not hold any equity interests in the structured entit
ies, but may hold an
ins
ign
if
icant amount of the
issued notes for market making purposes. This is disclosed in the ABS section above. The proceeds
of the notes’ issuance are typically held as cash collateral in the issuer’s account operated by a trustee or invested in AAA-
rated government-backed securit
ies to collateral
ise the structured entit
ies swap obl
igat
ions to the Group, and to repay the
princ
ipal to
investors at maturity. The structured entit
ies re
imburse the Group on actual losses incurred, through the use of the
cash collateral or realisat
ion of the collateral secur
ity. Correspondingly, the structured entit
ies wr
ite down the notes issued by
an equal amount of the losses incurred, in reverse order of senior
ity. All fund
ing is committed for the life of these vehicles and
the Group has no ind
irect exposure
in respect of the vehicles’ liqu
id
ity posit
ion. The Group has reputat
ional risk in respect of
certain portfolio management vehicles and investment funds either because the Group is the arranger and lead manager or
because the structured entit
ies have Standard Chartered brand
ing.
•
Structured finance:
Structured finance comprises interests in transactions that the Group or, more usually, a customer has
structured, using one or more structured entit
ies, wh
ich provide benefic
ial arrangements for customers. The Group’s exposure
primar
ily represents the prov
is
ion of fund
ing to these structures as a financ
ial
intermed
iary, for wh
ich it receives a lender’s
return. The transactions largely relate to real estate financ
ing and the prov
is
ion of a
ircraft leasing and ship finance.
•
Princ
ipal F
inance Fund:
The Group’s exposure to Princ
ipal F
inance Funds represents committed or invested capital in
unleveraged investment funds, primar
ily
invest
ing
in pan-Asian infrastructure, real estate and private equity.
•
Other activ
it
ies:
Other activ
it
ies include structured entit
ies created to support marg
in financ
ing transact
ions, the refinanc
ing
of exist
ing cred
it and debt facil
it
ies, as well as setting up of bankruptcy remote structured entit
ies.
In the above table, the Group determined the total assets of the structured entit
ies us
ing following bases:
•
Asset Backed Securit
ies, Pr
inc
ipal F
inance, and other activ
it
ies are based on the published total assets of the structured
entit
ies
•
Lending and Structured Finance are estimated based on the Group’s loan values to the structured entit
Adjustment for non-cash items and other adjustments included with
in
income statement
Group | Company | |||
2024 | 2023 | 2024 | 2023 | |
$mill ion | $mill ion | $mill ion | $mill ion | |
Amortisat ion of d iscounts and premiums of investment securit ies | (815) | (704) | – | – |
Interest expense on subordinated liab il it ies | 744 | 951 | 578 | 632 |
Interest expense on senior debt securit ies in issue | 2,584 | 2,068 | 1,855 | 1,434 |
Other non-cash items | (122) | (227) | (12) | 8 |
Net loss/(gain) on sale of businesses | 210¹ | (351) | – | – |
Pension costs for defined benefit schemes | 62 | 61 | – | – |
Share-based payment costs | 334 | 219 | – | – |
Impairment losses on loans and advances and other credit risk provis ions | 547 | 508 | – | – |
Div idend income from subsid iar ies | – | – | (4,101) | (4,738) |
Other impa irment | 588 | 1,008 | – | – |
Gain on disposal of property, plant and equipment | (23) | (31) | – | – |
Loss on disposal of FVOCI and AMCST financ ial assets | 264 | 209 | – | – |
Depreciat ion and amort isat ion | 1,126 | 1,071 | – | – |
Fair value changes taken to income statement | (2,140) | (1,666) | 9 | (202) |
Foreign Currency revaluation | (583) | 299 | 1 | 19 |
Profit from associates and jo int ventures | (108) | (141) | – | – |
Total | 2,668 | 3,274 | (1,670) | (2,847) |
1
Refer note 6 (page 303)
Financ
ial statements
Notes to the financial statements
34. Cash flow statement
continued
368
Standard Chartered
– Annual Report 2024
Change in operating assets
2024 | 2023 | 2024 | 2023 | |
$mill ion | $mill ion | $mill ion | $mill ion | |
(Increase)/decrease in derivat ive financial instruments | (31,939) | 13,061 | (32) | (19) |
(Increase)/decrease in debt securit ies, treasury b ills and equity shares | ||||
held at fair value through profit or loss | (25,823) | (29,477) | 376 | (4,068) |
Increase in loans and advances to banks and customers | (13,776) | (787) | – | – |
Net (increase)/decrease in prepayments and accrued income | (224) | 82 | – | – |
Net decrease in other assets | 5,331 | 2,663 | 338 | 268 |
Total | (66,431) | (14,458) | 682 | (3,819) |
Change in operating liab
il
it
ies
2024 | 2023 | 2024 | 2023 | |
$mill ion | $mill ion | $mill ion | $mill ion | |
Increase/(Decrease) in derivat ive financial instruments | 26,951 | (13,629) | (39) | (239) |
Net increase in deposits from banks, customer accounts, debt securit ies | ||||
in issue, Hong Kong notes in circulat ion and short pos it ions | 7,253 | 17,877 | 613 | 4,479 |
Increase in accruals and deferred income | 79 | 1,106 | 101 | 153 |
Net increase/(decrease) in other liab il it ies | 5,090 | (3,377) | (1,574) | (1,154) |
Increase in amount due to parents/subsid iar ies/other related parties | – | – | 35 | – |
Total | 39,373 | 1,977 | (864) | 3,239 |
Disclosures
Group | Company | |||
2024 | 2023 | 2024 | 2023 | |
$mill ion | $mill ion | $mill ion | $mill ion | |
Subordinated debt (includ ing accrued interest): | ||||
Opening balance | 12,216 | 13,928 | 12,123 | 13,895 |
Proceeds from the issue | – | 18 | – | – |
Interest paid | (519) | (563) | (505) | (545) |
Repayment | (1,517) | (2,160) | (1,517) | (2,160) |
Foreign exchange movements | (191) | 146 | (190) | 146 |
Fair value changes from hedge accounting | 48 | 311 | 97 | 271 |
Accrued interest and Others | 499 | 536 | 483 | 516 |
Closing balance | 10,536 | 12,216 | 10,491 | 12,123 |
Senior debt (includ ing accrued interest): | ||||
Opening balance | 41,350 | 32,288 | 17,518 | 14,080 |
Proceeds from the issue | 11,044 | 15,261 | 3,887 | 5,105 |
Interest paid | (1,366) | (1,145) | (708) | (434) |
Repayment | (11,185) | (6,471) | (2,619) | (2,037) |
Foreign exchange movements | (454) | (21) | (248) | (2) |
Fair value changes from hedge accounting | 42 | 119 | 6 | 188 |
Accrued interest and Others | 1,145 | 1,319 | 824 | 618 |
Closing balance | 40,576 | 41,350 | 18,660 | 17,518 |
Cash and cash equivalents includes:
•
Cash on hand and balances at central banks’ that are on demand or placements which are contractually due to mature
overnight only, except for restricted balances; and
•
Other balances listed in the table below, when they have less than three months’ maturity from the date of acquis
it
ion,
are not subject to contractual restrict
ions, are subject to
ins
ign
if
icant changes
in value, are highly liqu
id and are held for
the purpose of meeting short-term cash commitments. This includes products such as treasury bills and other elig
ible
bills, short-term government securit
ies, loans and advances to banks (
includ
ing reverse repos), and loans and advances
to customers (only non demand or non overnight placements at central banks), which are held for appropriate business
35. Cash and cash equivalents
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
369
Group | Company | |||
2024 | 2023 | 2024 | 2023 | |
$mill ion | $mill ion | $mill ion | $mill ion | |
Cash and balances at central banks | 63,447 | 69,905 | – | – |
Less: restricted balances | (7,799) | (6,153) | – | – |
Treasury bills and other elig ible b ills | 5,472 | 5,931 | – | – |
Loans and advances to banks | 9,654 | 11,879 | – | – |
Loans and advances to Customers | 18,120 | 25,829 | – | – |
Investments | 1,034 | 244 | – | – |
Amounts owed by and due to subsid iary undertak ings | – | – | 11,601 | 10,294 |
Total | 89,928 | 107,635 | 11,601 | 10,294 |
Directors and officers
Details of directors’ remuneration and interests in shares are disclosed in the Directors’ remuneration report.
IAS 24 Related party disclosures requires the following addit
ional
informat
ion for key management compensat
ion. Key
management comprises non-executive directors, executive directors of Standard Chartered PLC, the Court directors of
Standard Chartered Bank and the persons discharg
ing manager
ial responsib
il
it
ies (PDMR) of Standard Chartered PLC.
2024 | 2023 | |
$mill ion | $mill ion | |
Salaries, allowances and benefits in kind | 41 | 42 |
Share-based payments | 38 | 26 |
Bonuses paid or receivable | 7 | 5 |
Terminat ion benefits | 2 | – |
Total | 88 | 73 |
Transactions with directors and others
As at 31 December 2024, the total amounts to be disclosed under the Companies Act 2006 (the Act) and the List
ing Rules of the
Hong Kong Stock Exchange Lim
ited (Hong Kong L
ist
ing Rules) about loans to d
irectors were as follows:
2024 | 2023 | |||
Number | $mill ion | Number | $mill ion | |
Directors 1 | 3 | – | 4 | – |
1
Outstanding loan balances were below $50,000
The loan transactions provided to the directors of Standard Chartered PLC were a connected transaction under Chapter 14A of
the Hong Kong List
ing Rules. It was fully exempt as financial ass
istance under Rule 14A.87(1), as it was provided in our ordinary
and usual course of business and on normal commercial terms.
As at 31 December 2024, Standard Chartered Bank had in place a charge over $68 mill
ion (31 December 2023: $68 m
ill
ion) of
cash assets in favour of the independent trustee of its employer financed retirement benefit scheme.
Other than as disclosed in the Annual Report and Accounts, there were no other transactions, arrangements or agreements
outstanding for any director, connected person or officer of the Company which have to be disclosed under the Act, the rules
of the UK List
ing Author
ity or the Hong Kong List
ing Rules.
Details of non-revenue transactions with Temasek Holdings (Private) Lim
ited are set out below.
Company
The Company has received $1,838 mill
ion (31 December 2023: $1,469 m
ill
ion) of net
interest income from its subsid
iar
ies.
The Company issues debt externally and lends proceeds to Group companies.
The Company has an agreement with Standard Chartered Bank that in the event of Standard Chartered Bank defaulting on
its debt coupon interest payments, where the terms of such debt requires it, the Company shall issue shares as settlement for
non-payment of the coupon interest.
| 2024 | 2023 | |||||
Standard | Standard | |||||
Chartered Bank | Chartered Bank | |||||
Standard | (Hong Kong) | Standard | (Hong Kong) | |||
Chartered Bank | Lim ited | Others 1 | Chartered Bank | Lim ited | Others 1 | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Assets | ||||||
Due from subsid iar ies | 11,318 | 135 | 147 | 10,208 | 60 | 25 |
Derivat ive financial instruments | 98 | – | – | 62 | 12 | – |
Debt securit ies | 18,124 | 5,512 | 1,221 | 20,524 | 4,775 | 1,070 |
Total assets | 29,540 | 5,647 | 1,368 | 30,794 | 4,847 | 1,095 |
Liab il it ies | ||||||
Derivat ive financial instruments | 1,042 | 23 | – | 1,104 | – | – |
Total liab il it ies | 1,042 | 23 | – | 1,104 | – | – |
1
Others include Standard Chartered Bank (Singapore) Lim
ited, Standard Chartered Hold
ings Lim
ited and Standard Chartered I H L
im
ited
370
Standard Chartered
– Annual Report 2024
Financ
ial statements
Notes to the financial statements
36. Related party transactions
continued
Associate and jo
int ventures
The following transactions with related parties are on an arm’s length basis:
2024 | 2023 | |
$mill ion | $mill ion | |
Assets | ||
Financ ial Assets held at FVTPL | – | 14 |
Derivat ive assets | 5 | 12 |
Total assets | 5 | 26 |
Liab il it ies | ||
Deposits | 209 | 959 |
Derivat ive l iab il it ies | 4 | – |
Other Liab il it ies | – | 2 |
Total liab il it ies | 213 | 961 |
Loan commitments and other guarantees¹ | 14 | 113 |
1
The maximum loan commitments and other guarantees during the period were $14 mill
ion (31 December 2023:$113 m
ill
On 16 January 2025 Standard Chartered PLC issued AT1 of $1.0 bill
ion and on 21 January 2025 Standard Chartered PLC
issued
$1.0 bill
ion 6.228 per cent F
ixed Rate Reset Notes due 2036, $1.0 bill
ion 5.545 per cent F
ixed Rate Reset Notes due 2029 and
$0.5 bill
ion Float
ing Rate Notes due 2029. Standard Chartered PLC redeemed $2.0 bill
ion sen
ior debt on 30 January 2025 and
redeemed $1.0 bill
ion subord
inated debt on 12 February 2025.
On 23 January 2025, the Indian branch of Standard Charted Bank sold its Unsecured Personal Loan business to Kotak Mahindra
Bank Lim
ited for a purchase cons
iderat
ion of INR32 b
ill
ion ($375 m
ill
ion) aga
inst a book value of $389 mill
ion on that date, g
iv
ing
rise to a loss on disposal of $14 mill
ion.
A share buyback for up to a maximum considerat
ion of $1.5 b
ill
ion has been declared by the d
irectors after 31 December 2024.
This will reduce the number of ordinary shares in issue by cancelling the repurchased shares.
A final div
idend for 2024 of 28 cents per ord
Auditor’s remuneration is included with
in other general adm
in
istrat
ion expenses. The amounts paid by the Group to their
princ
ipal aud
itor, Ernst & Young LLP and its associates (together Ernst & Young LLP), are set out below. All services are approved
by the Group Audit Committee and are subject to controls to ensure the external auditor’s independence is unaffected by the
provis
ion of other serv
ices.
2024 | 2023 | |
$mill ion | $mill ion | |
Audit fees for the Group statutory audit | 31.3 | 27.8 |
Of which fees for the audit of Standard Chartered Bank Group | 23.2 | 20.6 |
Fees payable to EY for other services provided to the SC PLC Group: | ||
Audit of Standard Chartered PLC subsid iar ies | 13.5 | 13.4 |
Total audit fees | 44.8 | 41.2 |
Audit-related assurance services | 6.6 | 6.0 |
Other assurance services | 5.4 | 7.0 |
Other non-audit services | 0.4 | 0.8 |
Transaction related services | 0.6 | 0.3 |
Total non-audit fees | 13.0 | 14.1 |
Total fees payable | 57.8 | 55.3 |
The following is a descript
ion of the type of serv
ices included with
in the categor
ies listed above:
•
Audit fees for the Group statutory audit are in respect of fees payable to Ernst & Young LLP for the statutory audit of the
consolidated financ
ial statements of the Group and the separate financial statements of Standard Chartered PLC
•
Audit-related fees consist of fees such as those for services required by law or regulation to be provided by the auditor, reviews
of inter
im financial
informat
ion, report
ing on regulatory returns, reporting to a regulator on client assets and extended work
performed over financial
informat
ion and controls author
ised by those charged with governance
•
Other assurance services include agreed-upon-procedures in relation to statutory and regulatory fil
ings
•
Transaction related services are fees payable to Ernst & Young LLP for issu
ing comfort letters
Expenses incurred in respect of their role as auditor, were reimbursed to EY LLP $1 mill
ion (2023: $0.9 m
ill
Financ
ial statements
Standard Chartered
– Annual Report 2024
371
Classif
icat
ion and measurement of financ
ial
instruments
| 2024 | 2023 | |||||||
Non-trading | Non-trading | |||||||
mandatorily | mandatorily | |||||||
Derivat ives | at fair value | Derivat ives | at fair value | |||||
held for | Amortised | through | held for | Amortised | through | |||
hedging | cost | profit or loss | Total | hedging | cost | profit or loss | Total | |
Financ ial assets | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Derivat ives | 112 | – | – | 112 | 80 | – | – | 80 |
Investment securit ies | – | 5,808 | 19,049 1 | 24,857 | – | 6,944 | 19,425 1 | 26,369 |
Amounts owed by subsid iary | ||||||||
undertakings | – | 11,601 | – | 11,601 | – | 10,294 | – | 10,294 |
Total | 112 | 17,409 | 19,049 | 36,570 | 80 | 17,238 | 19,425 | 36,743 |
1
Standard Chartered Bank, Standard Chartered Bank (Hong Kong) Lim
ited, Standard Chartered Bank (Ch
ina) Lim
ited and Standard Chartered Bank (S
ingapore)
Lim
ited
issued Loss Absorbing Capacity (LAC) elig
ible debt secur
it
ies
Instruments classif
ied as amort
ised cost, which include investment securit
ies and amounts owed by subs
id
iary undertak
ings, are
recorded in stage 1 for the recognit
ion of expected cred
it losses.
Derivat
ives held for hedg
ing are held at fair value and are classif
ied as Level 2 and Level 3 wh
ile the counterparty is Standard
Chartered Bank and external counterparties.
Debt securit
ies compr
ise securit
ies held at amort
ised cost issued by Standard Chartered Bank and SC Ventures Holdings Lim
ited
and have a fair value equal to carrying value of $5,808 mill
ion (31 December 2023: $6,944 m
ill
ion).
In 2024 and 2023, amounts owed by subsid
iary undertak
ings have a fair value equal to carrying value.
| 2024 | 2023 | |||||||
Designated | Designated | |||||||
Derivat ives | at fair value | Derivat ives | at fair value | |||||
held for | Amortised | through | held for | Amortised | through | |||
hedging | cost | profit or loss | Total | hedging | cost | profit or loss | Total | |
Financ ial l iab il it ies | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Derivat ives | 1,065 | – | – | 1,065 | 1,104 | – | – | 1,104 |
Debt securit ies in issue | – | 18,167 | 14,175 | 32,342 | – | 17,142 | 14,007 | 31,149 |
Subordinated liab il it ies and other | ||||||||
borrowed funds | – | 7,661 | 2,677 | 10,338 | – | 9,248 | 2,697 | 11,945 |
Amounts owed to subsid iary | ||||||||
undertakings | – | 35 | – | 35 | – | – | – | – |
Total | 1,065 | 25,863 | 16,852 | 43,780 | 1,104 | 26,390 | 16,704 | 44,198 |
Derivat
ives held for hedg
ing are held at fair value and are classif
ied as Level 2 wh
ile the counterparty is Standard Chartered
Bank and Standard Chartered Bank (Hong Kong) Lim
ited.
The fair value of debt securit
ies
in issue held at amortised cost is $18,313 mill
ion (2023: $17,195 m
ill
ion).
The fair value of subordinated liab
il
it
ies and other borrowed funds held at amort
ised cost is $7,336 mill
ion (2023: $8,717 m
ill
ion).
Derivat
ive financial
instruments
| 2024 | 2023 | |||||
Notional | Notional | |||||
princ ipal | princ ipal | |||||
amounts | Assets | Liab il it ies | amounts | Assets | Liab il it ies | |
Derivat ives | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Foreign exchange derivat ive contracts: | ||||||
Forward foreign exchange | 9,077 | 46 | 30 | 8,968 | 32 | – |
Currency swaps | 545 | 20 | – | 563 | – | 35 |
Interest rate derivat ive contracts: | ||||||
Swaps | 14,863 | 32 | 1,035 | 14,819 | 43 | 1,069 |
Forward rate agreements and options | – | – | – | – | – | – |
Credit derivat ive contracts | 4,030 | 14 | – | 4,030 | 5 | – |
Total | 28,515 | 112 | 1,065 | 28,380 | 80 | 1,104 |
39. Standard Chartered PLC (Company)
continued
372
Standard Chartered
– Annual Report 2024
Financ
ial statements
Notes to the financial statements
Credit risk
2024 | 2023 | |
$mill ion | $mill ion | |
Derivat ive financial instruments | 112 | 80 |
Debt securit ies | 24,857 | 26,369 |
Amounts owed by subsid iary undertak ings | 11,601 | 10,294 |
Total | 36,570 | 36,743 |
In 2024 and 2023, amounts owed by subsid
iary undertak
ings were neither past due nor impa
ired; the Company had no
ind
iv
idually impa
ired loans.
In 2024 and 2023, the Company had no impa
ired debt secur
it
ies. The debt secur
it
ies held by the Company are
issued by
Standard Chartered Bank, Standard Chartered Bank (Hong Kong) Lim
ited, Standard Chartered Bank (Ch
ina) Lim
ited and
Standard Chartered Bank (Singapore) Lim
ited, subs
id
iary undertak
ings with credit ratings of A+.
There is no material expected credit loss on these instruments as they are Stage 1 assets, and of a high quality.
Liqu
id
ity risk
The following table analyses the residual contractual maturity of the assets and liab
il
it
ies of the Company on a d
iscounted
basis:
2024 | |||||||||
Between | Between | Between | Between | Between | Between | More than | |||
one month | three | six months | nine months | one year | two years | five years | |||
One month | and three | months and | and nine | and one | and two | and five | and | ||
or less | months | six months | months | year | years | years | undated | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Assets | |||||||||
Derivat ive financial | |||||||||
instruments | 45 | 23 | – | 20 | – | 24 | – | – | 112 |
Investment securit ies | – | – | – | – | – | 1,725 | 7,205 | 15,927 | 24,857 |
Amount owed by subsid iary | |||||||||
undertakings | 1,763 | 1,536 | 1,931 | 110 | 53 | 2,355 | 2,695 | 1,158 | 11,601 |
Investments in subsid iary | |||||||||
undertakings | – | – | – | – | – | – | – | 61,593 | 61,593 |
Other assets | – | – | – | – | – | – | – | – | – |
Total assets | 1,808 | 1,559 | 1,931 | 130 | 53 | 4,104 | 9,900 | 78,678 | 98,163 |
Liab il it ies | |||||||||
Derivat ive financial | |||||||||
instruments | 30 | – | 22 | – | – | 53 | 147 | 813 | 1,065 |
Senior debt | – | – | 992 | – | – | 4,979 | 12,887 | 13,484 | 32,342 |
Amount owed to subsid iary | |||||||||
undertakings | 35 | – | – | – | – | – | – | – | 35 |
Other liab il it ies | 304 | 512 | 126 | 14 | 3 | – | – | – | 959 |
Subordinated liab il it ies and | |||||||||
other borrowed funds | 2 | 46 | 14 | 187 | – | 376 | 1,995 | 7,718 | 10,338 |
Total liab il it ies | 371 | 558 | 1,154 | 201 | 3 | 5,408 | 15,029 | 22,015 | 44,739 |
Net liqu id ity gap | 1,437 | 1,001 | 777 | (71) | 50 | (1,304) | (5,129) | 56,663 | 53,424 |
39. Standard Chartered PLC (Company)
continued
Standard Chartered
– Annual Report 2024
Financ
ial statements
373
| 2023 | |||||||||
Between | Between | Between | Between | Between | Between | More than | |||
one month | three | six months | nine months | one year | two years | five years | |||
One month | and three | months and | and nine | and one | and two | and five | and | ||
or less | months | six months | months | year | years | years | undated | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Assets | |||||||||
Derivat ive financial | |||||||||
instruments | 32 | – | – | – | – | 10 | 27 | 11 | 80 |
Investment securit ies | – | – | – | – | – | 3,853 | 5,581 | 16,935 | 26,369 |
Amount owed by subsid iary | |||||||||
undertakings | 1,598 | 504 | 1,530 | 12 | 1,073 | 1,082 | 3,254 | 1,241 | 10,294 |
Investments in subsid iary | |||||||||
undertakings | – | – | – | – | – | – | – | 60,791 | 60,791 |
Other assets | – | – | – | – | – | – | – | – | – |
Total assets | 1,630 | 504 | 1,530 | 12 | 1,073 | 4,945 | 8,862 | 78,978 | 97,534 |
Liab il it ies | |||||||||
Derivat ive financial | |||||||||
instruments | 11 | 26 | 17 | – | – | 93 | 171 | 786 | 1,104 |
Senior debt | – | – | – | – | – | 7,242 | 14,020 | 9,887 | 31,149 |
Amount owed to subsid iary | |||||||||
undertakings | – | – | – | – | – | – | – | – | – |
Other liab il it ies | 278 | 202 | 135 | 30 | 5 | – | – | – | 650 |
Subordinated liab il it ies and | |||||||||
other borrowed funds | 996 | 51 | 8 | 172 | 440 | 330 | 1,952 | 7,996 | 11,945 |
Total liab il it ies | 1,285 | 279 | 160 | 202 | 445 | 7,665 | 16,143 | 18,669 | 44,848 |
Net liqu id ity gap | 345 | 225 | 1,370 | (190) | 628 | (2,720) | (7,281) | 60,309 | 52,686 |
Financ
ial l
iab
il
it
ies on an und
iscounted basis
| 2024 | |||||||||
Between | Between | Between | Between | Between | Between | More than | |||
one month | three | six months | nine months | one year | two years | five years | |||
One month | and three | months and | and nine | and one | and two | and five | and | ||
or less | months | six months | months | year | years | years | undated | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Derivat ive financial | |||||||||
instruments | 30 | – | 22 | – | – | 53 | 147 | 813 | 1,065 |
Debt securit ies in issue | 276 | 151 | 1,355 | 368 | 308 | 6,333 | 15,780 | 15,635 | 40,206 |
Subordinated liab il it ies | |||||||||
and other borrowed funds | 33 | 134 | 34 | 206 | – | 407 | 2,261 | 13,473 | 16,548 |
Other liab il it ies | – | 959 | – | – | – | – | – | – | 959 |
Total liab il it ies | 339 | 1,244 | 1,411 | 574 | 308 | 6,793 | 18,188 | 29,921 | 58,778 |
2023 | |||||||||
Derivat ive financial | |||||||||
instruments | 11 | 26 | 17 | – | – | 93 | 171 | 786 | 1,104 |
Debt securit ies in issue | 247 | 57 | 328 | 398 | 278 | 8,490 | 16,396 | 11,279 | 37,473 |
Subordinated liab il it ies and | |||||||||
other borrowed funds | 1,059 | 134 | 34 | 208 | 556 | 410 | 2,304 | 13,968 | 18,673 |
Other liab il it ies | 5 | 91 | – | – | – | – | – | – | 96 |
Total liab il it ies | 1,322 | 308 | 379 | 606 | 834 | 8,993 | 18,871 | 26,033 | 57,346 |
Financ
ial statements
Notes to the financial statements
374
Standard Chartered
– Annual Report 2024
As at 31 December 2024, the Group’s interests in related
undertakings are disclosed below. Unless otherwise stated,
the share capital disclosed comprises ordinary or common
shares which are held by subsid
iar
ies of the Group. Standard
Chartered Bank (Hong Kong) Lim
ited, Standard Chartered
Funding (Jersey) Lim
ited, Stanchart Nom
inees Lim
ited,
Standard Chartered Holdings Lim
ited and Standard
Chartered Nominees Lim
ited are d
irectly held subsid
iar
ies,
all other related undertakings are held ind
irectly. Unless
otherwise stated, the princ
ipal country of operat
ion of each
subsid
iary
is the same as its country of incorporation Note 32
details undertakings that have a sign
ificant contr
ibut
ion to
the Group’s net profit or net assets.
Subsid
iary Undertak
ings
Proportion of | ||
shares held | ||
Name | (%) | Footnotes |
FinVentures UK Lim ited v | 100 | 1 , 163, 166 |
SC (Secretaries) Lim ited x | 100 | 1 |
SC Transport Leasing 1 LTD vi | 100 | 1, 163, 166 |
SC Transport Leasing 2 Lim ited vi | 100 | 1, 163, 166 |
SC Ventures G.P. Lim ited v | 100 | 1 |
SC Ventures Innovation Investment L.P. v | 100 Y | 1 |
SCMB Overseas Lim ited v | 100 | 1, 163, 166 |
Standard Chartered Africa Lim ited v | 100 | 1, 163, 166 |
Standard Chartered Bank i | 100; 100 Q,T | 1 |
Standard Chartered Foundation x | 100 AE | 1 , 158 |
Standard Chartered Health Trustee (UK) | ||
Lim ited x | 100 | 1 |
Standard Chartered I H Lim ited v | 100 | 1, 163, 166 |
Standard Chartered Leasing (UK) | ||
Lim ited vi | 100 | 1, 163, 166 |
Standard Chartered Nominees (Private | ||
Clients UK) Lim ited i | 100 | 1 |
Standard Chartered Securit ies (Afr ica) | ||
Holdings Lim ited v | 100 | 1, 163, 166 |
Standard Chartered Strategic Investments | ||
Lim ited v | 100 | 1, 163, 166 |
Standard Chartered Trustees (UK) | ||
Lim ited x | 100 | 1 |
SC Ventures Holdings Lim ited v | 100; 100 M | 1 |
The SC Transport Leasing Partnership 1 vi | 100 Y | 1, 163, 166 |
The SC Transport Leasing Partnership 2 vi | 100 Y | 1, 163, 166 |
The SC Transport Leasing Partnership 3 vi | 100 Y | 1, 163, 166 |
The SC Transport Leasing Partnership 4 vi | 100 Y | 1, 163, 166 |
Zodia Markets (UK) Lim ited i | 100 | 1 |
Zodia Markets Holdings Lim ited v | 83.96 | 1 |
Bricks (C&K) LP x | 100 Y | 2 , 158 |
Bricks (C) LP x | 100 Y | 2 , 158 |
Bricks (T) LP x | 100 Y | 2 , 158 |
Corrasi Covered Bonds LLP x | 75 AA | 3 |
Zodia Custody Lim ited iv | 95.1; 15.132 K | 107 |
Zodia Holdings Lim ited v | 100 A | 107 |
Assembly Payments UK Ltd iv | 100 | 4 , 158 |
CurrencyFair (UK) Lim ited i | 100 | 4 , 158 |
Zai Technologies Lim ited iv | 100 | 4 , 158 |
Standard Chartered Grindlays Pty Lim ited v | 100 | 5 |
Assembly Payments Australia Pty Ltd iv | 100 | 131 , 158 |
Zai Australia Pty Ltd iv | 100 | 131 |
CurrencyFair Australia Pty Ltd iv | 100 | 6 , 158 |
Standard Chartered Bank Insurance | ||
Agency (Proprietary) Lim ited i | 100 | 7 |
Standard Chartered Investment Services | ||
(Proprietary) Lim ited i | 100 | 7 |
Standard Chartered Bank Botswana | ||
Lim ited i | 75.827 | 7 |
Proportion of | ||
shares held | ||
Name | (%) | Footnotes |
Standard Chartered Botswana Nominees | ||
(Proprietary) Lim ited i | 100 | 7 |
Standard Chartered Botswana Education | ||
Trust x | 100 AB | 7 |
Standard Chartered Representação e | ||
Partic ipações Ltd ai | 100 | 8 |
Standard Chartered Securit ies (B) Sdn Bhd i | 100 | 108 |
Standard Chartered Bank Cameroon S.A. i | 100 | 9 |
CurrencyFair (Canada) Ltd iv | 100 | 10 , 158 |
SCB Investment Holding Company | ||
Lim ited v | 99.999 A | 114 |
Standard Chartered Global Business | ||
Services Co., Ltd vi i i | 100 | 12 , 160 |
Standard Chartered Global Business | ||
Services (Guangzhou) Co., Ltd. vi i i | 100 | 121 , 160 |
Guangzhou CurrencyFair Information | ||
Technology Lim ited iv | 100 | 13,166 |
Standard Chartered Bank Cote d’Ivoire SA i | 100 | 14 |
Standard Chartered Bank Gambia | ||
Lim ited i | 74.852 | 15 |
Standard Chartered Bank AG i | 100 | 16 |
Solvezy Technology Ghana Ltd iv | 100 | 17 |
Standard Chartered Bank Ghana PLC i | 69.416; | |
87.043 T | 18 | |
Standard Chartered Ghana Nominees | ||
Lim ited i | 100 | 18 |
Standard Chartered Wealth | ||
Management Lim ited Company i | 100 | 19 |
Standard Chartered PF Real Estate (Hong | ||
Kong) Lim ited v | 100 | 81 |
Standard Chartered Private Equity | ||
Lim ited v | 100 | 20 |
Standard Chartered Asia Lim ited v | 100; 100 AD | 20 |
Assembly Payments HK Lim ited iv | 100 | 21 , 158 |
CurrencyFair Asia Lim ited iv | 100 | 91 , 158 |
Zodia Custody (Hong Kong) Lim ited iv | 100 | 132 |
Assembly Payments India Private Lim ited iv | 100 | 92 |
Standard Chartered Global Business | ||
Services Private Lim ited ix | 100 | 22 |
Standard Chartered Finance Private | ||
Lim ited ix | 98.675 | 23 |
St Helen’s Nominees India Private Lim ited i | 100 | 24 |
Standard Chartered Private Equity | ||
Advisory (India) Private Lim ited ix | 100 | 24 |
Standard Chartered Research and | ||
Technology India Private Lim ited iv | 100 A,R | 136 |
Standard Chartered Capital Lim ited i | 100 | 153 |
Standard Chartered Securit ies (Ind ia) | ||
Lim ited i | 100 | 93 |
Standard Chartered (India) Modeling and | ||
Analytics Centre Private Lim ited ix | 100 | 26 |
SCV Research and Development Pvt. Ltd. iv | 100 | 117 |
PT Labamu Sejahtera Indonesia iv | 100 | 27 |
CurrencyFair (Canada) Lim ited iv | 100 | 28 |
CurrencyFair Lim ited iv | 27.951; 100 A | 28 , 158, 165 |
CurrencyFair Nominees Lim ited iv | 100 | 28 , 158 |
Zodia Markets (Ireland) Lim ited i | 100 | 133 |
Zodia Custody (Ireland) Lim ited iv | 100 | 134 |
Standard Chartered Assurance Lim ited i | 100; 100 M | 29 |
Standard Chartered Isle of Man Lim ited i | 100 | 29 |
Standard Chartered Securit ies (Japan) | ||
Lim ited i | 100 | 30 |
SCB Nominees (CI) Lim ited i | 100 | 31 |
Solvezy Technology Kenya Lim ited iv | 100 | 32 |
Standard Chartered Bancassurance | ||
Intermediary Lim ited i | 100 | 32 |
40. Related undertakings of the Group
continued
Subsid
iary Undertak
ings
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
375
Proportion of | ||
shares held | ||
Name | (%) | Footnotes |
Standard Chartered Investment Services | ||
Lim ited v | 100 | 32 |
Standard Chartered Bank Kenya Lim ited i | 74.318; 100 J | 32 |
Standard Chartered Securit ies (Kenya) | ||
Lim ited i | 100 | 32 |
Standard Chartered Financ ial Serv ices | ||
Lim ited i | 100 | 32 |
Standard Chartered Kenya Nominees | ||
Lim ited i | 100 | 32 |
Tawi Fresh Kenya Lim ited iv | 100 | 32 |
Standard Chartered Metropolitan | ||
Holdings SAL v | 99.9 A | 33 |
Cartaban (Malaya) Nominees Sdn | ||
Berhad i | 100 | 34 |
Cartaban Nominees (Asing) Sdn Bhd i | 100 | 34 |
Cartaban Nominees (Tempatan) Sdn Bhd i | 100 | 34 |
Golden Maestro Sdn Bhd v | 100 | 34 |
Price Solutions Sdn Bhd i | 100 | 34 |
SCBMB Trustee Berhad x | 100 | 34 |
Standard Chartered Bank Malaysia | ||
Berhad i | 100; 100 S | 34 |
Standard Chartered Saadiq Berhad i | 100 | 34 |
Resolution Alliance Sdn Bhd v | 91 | 35 |
Standard Chartered Global Business | ||
Services Sdn Bhd ix | 100 | 115 |
Assembly Payments Malaysia Sdn. Bhd. iv | 100 | 37 , 158 |
Standard Chartered Bank (Maurit ius) | ||
Lim ited i | 100 | 38 |
Standard Chartered Private Equity | ||
(Maurit ius) L im ited i | 100 | 113 |
Standard Chartered Private Equity | ||
(Maurit ius) II L im ited i | 100 | 113 |
Standard Chartered Private Equity | ||
(Maurit ius) lll L im ited i | 100 | 113 |
Subcontinental Equit ies L im ited v | 100 | 39 |
Actis Treit Holdings (Maurit ius) L im ited v | 62.001 A ; | |
62.001 B | 149 , 158 | |
Standard Chartered Bank Nepal Lim ited i | 70.21 | 40 |
Standard Chartered Holdings (Africa) B.V. v | 100 | 1 , 161 |
Standard Chartered Holdings (Asia | ||
Pacif ic) B.V. v | 100 | 1 , 161 |
Standard Chartered Holdings | ||
(International) B.V. v | 100 | 1 , 161 |
Standard Chartered MB Holdings B.V. v | 100 | 1 , 161 |
PromisePay Lim ited iv | 100 | 41 , 158 |
Standard Chartered Bank Niger ia L im ited i | 100; 100 N,T | 42 |
Standard Chartered Capital & Advisory | ||
Niger ia L im ited i | 100 | 42 |
Standard Chartered Nominees (Niger ia) | ||
Lim ited i | 100 | 42 |
Standard Chartered Bank (Pakistan) | ||
Lim ited i | 98.986 | 43 |
Standard Chartered Group Services, | ||
Manila Incorporated ix | 100 | 44 |
Standard Chartered Global Business | ||
Services spółka z ograniczoną | ||
odpowiedz ialnośc ią ix | 100 | 45 |
Standard Chartered Capital (Saudi | ||
Arabia) i | 100 | 116 |
Actis Treit Holdings No.1 (Singapore) | ||
Private Lim ited v | 100 | 156 |
Actis Treit Holdings No.2 (Singapore) | ||
Private Lim ited v | 100 | 156 |
Proportion of | ||
shares held | ||
Name | (%) | Footnotes |
Standard Chartered Private Equity | ||
(Singapore) Pte. Ltd v | 100 | 46 |
Standard Chartered Real Estate | ||
Investment Holdings (Singapore) Private | ||
Lim ited v | 100 | 46 |
Raffles Nominees (Pte.) Lim ited i | 100 | 47 |
SCTS Capital Pte. Ltd i | 100 | 48 |
SCTS Management Pte. Ltd. i | 100 | 48 |
Standard Chartered Bank (Singapore) | 100 A, B, C, U, V, | |
Lim ited i | W | 48 |
Standard Chartered Trust (Singapore) | ||
Lim ited x | 100 | 48 |
Standard Chartered Holdings (Singapore) | ||
Private Lim ited v | 100 | 48 |
Standard Chartered Nominees | ||
(Singapore) Pte Ltd i | 100 | 48 |
Audax Financ ial Technology Pte. Ltd iv | 100 A | 90 |
CashEnable Pte. Ltd. iv | 100 A | 90 |
Letsbloom Pte. Ltd. iv | 100 A | 90 |
Libeara (Singapore) Pte. Ltd. iv | 100 | 90 |
Libeara Pte. Ltd. v | 100 | 90 |
SCV Research and Development Pte. Ltd. iv | 100 A | 90 |
Zodia Custody (Singapore) Pte. Ltd. iv | 100 | 46 |
Pegasus Dealmaking Pte. Ltd. iv | 100 | 46 |
Power2SME Pte. Ltd. v | 90.6 | 90 |
SCV Master Holding Company Pte. Ltd. v | 100 | 46 |
Solv-India Pte. Ltd. v | 100 | 90 |
Trust Bank Singapore Lim ited i | 60 | 49 , 158 130 |
CurrencyFair (Singapore) Pte.Ltd iv | 100 | |
Assembly Payments SGP Pte. Ltd. iv | 100 | 50 , 158 |
Assembly Payments Pte. Ltd. iv | 100; 100 J | 50 , 158 |
Standard Chartered Nominees South | ||
Africa Proprietary Lim ited (RF) i | 100 | 52 |
Promisepay (PTY) Ltd iv | 100 | 137 , 158 |
Standard Chartered Bank Tanzania | ||
Lim ited i | 100; 100 J | 53 |
Standard Chartered Tanzania Nominees | ||
Lim ited i | 100 | 53 |
Standard Chartered Bank (Thai) Public | ||
Company Lim ited i | 99.871 | 54 |
Standard Chartered Yatir im Bankas i Turk | ||
Anonim Sirket i | 100 | 55 |
Standard Chartered Bank Uganda | ||
Lim ited i | 100 | 56 |
Furaha Finserve Uganda Lim ited i | 100 | 57 |
Appro Onboarding Solutions FZ-LLC iv | 100 | 58 |
Financ ial Inclus ion Technologies Ltd v | 100 A | 94 |
Furaha Holding Ltd v | 100; 100 B | 59 |
myZoi Financ ial Inclus ion Technologies | ||
LLC iv | 100 | 61 |
Standard Chartered Bank International | ||
(Americas) Lim ited i | 100 | 111 |
Standard Chartered Holdings Inc. v | 100 | 62 |
Standard Chartered Securit ies (North | ||
America) LLC i | 100 AA | 62 |
CurrencyFair (USA) Inciv | 100 AC | 64 , 158 |
Standard Chartered Trade Services | ||
Corporation i | 100 | 89 |
Standard Chartered Bank (Vietnam) | ||
Lim ited i | 100 X | 65 |
Sky Harmony Holdings Lim ited v | 100 | 118 |
Standard Chartered Bank Zambia Plc i | 90 | 119 |
Standard Chartered Zambia Securit ies | ||
Services Nominees Lim ited i | 100 | 138 |
Stanchart Nominees Lim ited i | 100 | 1 , 164 |
40. Related undertakings of the Group
continued
Subsid
iary Undertak
ings
continued
Financ
ial statements
Notes to the financial statements
376
Standard Chartered
– Annual Report 2024
Proportion of | ||
shares held | ||
Name | (%) | Footnotes |
Standard Chartered Holdings Lim ited v | 100 | 1 , 163, 164, 166 |
Standard Chartered NEA Lim ited v | 100 | 1 , 163, 166 |
Standard Chartered Nominees Lim ited i | 100 | 1 , 164 |
Standard Chartered (Guangzhou) | ||
Business Management Co., Ltd. i i | 100 | 120, 166 |
Standard Chartered Bank (China) Lim ited i | 100 | 75 , 160, 166 |
Standard Chartered Securit ies (Ch ina) | ||
Lim ited i | 100 | 76, 166 |
Horsford Nominees Lim ited i | 100 | 77 |
Marina Acacia Shipp ing L im ited vi | 100 | 78 |
Marina Amethyst Shipp ing L im ited vi | 100 | 78 |
Marina Angelite Shipp ing L im ited vi | 100 | 78 |
Marina Beryl Shipp ing L im ited vi | 100 | 78 |
Marina Emerald Shipp ing L im ited vi | 100 | 78 |
Marina Flax Shipp ing L im ited vi | 100 | 78 |
Marina Gloxin ia Sh ipp ing L im ited vi | 100 | 78 |
Marina Hazel Shipp ing L im ited vi | 100 | 78 |
Marina Ilex Shipp ing L im ited vi | 100 | 78 |
Marina Iridot Shipp ing L im ited vi | 100 | 78 |
Marina Mimosa Shipp ing L im ited vi | 100 | 78 |
Marina Moonstone Shipp ing L im ited vi | 100 | 78 |
Marina Peridot Shipp ing L im ited vi | 100 | 78 |
Marina Sapphire Shipp ing L im ited vi | 100 | 78 |
Marina Tourmaline Shipp ing L im ited vi | 100 | 78 |
Standard Chartered Securit ies (Hong | ||
Kong) Lim ited i | 100 | 78 |
Marina Leasing Lim ited vi | 100 | 78 |
Standard Chartered Leasing Group | ||
Lim ited v | 100 | 78 |
Standard Chartered Trade Support (HK) | ||
Lim ited i | 100 | 78 |
Mox Bank Lim ited i | 71.579 | 79 |
Standard Chartered Bank (Hong Kong) | ||
Lim ited i | 100 A,B,C,D | 80 |
Standard Chartered Trust (Hong Kong) | ||
Lim ited i | 100 | 82 |
Standard Chartered Trustee (Hong Kong) | ||
Lim ited x | 100 | 82 |
Standard Chartered Funding (Jersey) | ||
Lim ited v | 100 | 83 |
Standard Chartered Bank Korea Lim ited i | 100 | 84 |
Standard Chartered Securit ies Korea Co., | ||
Ltd i | 100 | 85 |
Marina Morganite Shipp ing L im ited vi | 100 | 125 , 162 |
Marina Moss Shipp ing L im ited vi | 100 | 125 , 162 |
Marina Tanzanite Shipp ing L im ited vi | 100 | 125 , 162 |
Marina Angelica Shipp ing L im ited vi | 100 | 86 , 162 |
Marina Aventurine Shipp ing L im ited vi | 100 | 86 , 162 |
Marina Citr ine Sh ipp ing L im ited vi | 100 | 86 , 162 |
Marina Dahlia Shipp ing L im ited vi | 100 | 86 , 162 |
Marina Dittany Shipp ing L im ited vi | 100 | 86 , 162 |
Marina Lilac Shipp ing L im ited vi | 100 | 86 , 162 |
Marina Lolite Shipp ing L im ited vi | 100 | 86 , 162 |
Marina Obsid ian Sh ipp ing L im ited vi | 100 | 86 , 162 |
Marina Quartz Shipp ing L im ited vi | 100 | 86 , 162 |
Marina Remora Shipp ing L im ited vi | 100 | 86 , 162 |
Marina Turquoise Shipp ing L im ited vi | 100 | 86 , 162 |
Marina Zircon Shipp ing L im ited vi | 100 | 86 , 162 |
Price Solution Pakistan (Private) Lim ited i | 100 | 87 |
Marina Partawati Shipp ing Pte. Ltd. vi | 100 | 152 |
Proportion of | ||
shares held | ||
Name | (%) | Footnotes |
Standard Chartered Bank (Taiwan) | ||
Lim ited i | 100 | 88 |
CMB Nominees (RF) Proprietary Lim ited x | 100 | 52 |
Letsbloom India Private Lim ited iv | 100 | 97 |
PointSource Technologies Pte. Ltd. x | 100 | 90 |
Qatalyst Pte. Ltd. iv | 72.727 | 90 |
SC Ventures Management Consulting | ||
(Shenzhen) Lim ited x | 100 | 74, 154, 166 |
Solv Vietnam Company Lim ited iv | 100 X | 98 |
Standard Chartered Funds VCC x | 100 | 48 |
TASConnect (Hong Kong) Private Lim ited iv | 100 | 99 |
TASConnect (Malaysia) Sdn. Bhd. iv | 100 | 36 |
TASConnect (Shanghai) Financ ial | ||
Technology Pte. Ltd iv | 100 | 151 |
NewCo Holding EUR 19 S.A. x | 100 | 128 |
Zodia Custody Australia Pty. Ltd. iv | 100 | 126 |
Zodia Markets (AME) Lim ited iv | 100 | 127 |
Zodia Markets (Jersey) Lim ited iv | 100 | 129 |
Standard Chartered Luxembourg S.A. i | 100 | 106 |
Solv Holding Ltd v | 100 | 155 |
Joint ventures | ||
Proportion of | ||
shares held | ||
Name | (%) | Footnotes |
Olea Global Pte. Ltd. iv | 47; 100 J | 46 |
Global Dig ital Asset Hold ings Lim ited v | 100 | 60 |
Associates | ||
Proportion of | ||
shares held | ||
Name | (%) | Footnotes |
Clifford Capital Holdings Pte. Ltd. v | 9.9 | 109 |
Verif ied Impact Exchange Hold ings Pte. Ltd i | 13.421 | 110 |
Seychelles International Mercantile Banking | ||
Corporation Lim ited. i | 22 | 66 |
SWIAT GmbH iv | 30 | 67 |
SBI Zodia Custody Co. Ltd iv | 100 | 68 |
Partior Holdings Pte. Ltd. i | 25; 25 H ; | |
11.111 I | 69 | |
China Bohai Bank Co., Ltd. i | 16.263 | 95, 166 |
Vault22 Solutions Holdings Ltd iv | 100 E | 135 |
Sign
ificant
investment holdings and other related
undertakings
Proportion of | ||
shares held | ||
Name | (%) | Footnotes |
Corrasi Covered Bonds (LM) Lim ited i | 20 | 3 |
ATSC Cayman Holdco Lim ited v | 5.272 A ; | |
100 B | 140 | |
Actis Temple Stay Holdings (HK) Lim ited v | 39.689 A ; | |
39.689 B | 141 | |
Mikado Realtors Private Lim ited x | 26 | 142 |
Industrial Minerals and Chemical Co. Pvt. | ||
Ltd x | 26 | 157 |
Ascenta III v | 31 G | 70 |
SCIAIGF Liqu idat ing Trust v | 43.96 AB | 112 |
Paxata, Inc. i i i | 40.74 O ; | |
8.908 P | 64 |
40. Related undertakings of the Group
continued
Subsid
iary/Assoc
iate Undertakings – In liqu
idat
ion
Financ
ial statements
Standard Chartered
– Annual Report 2024
377
Proportion of | ||
shares held | ||
Name | (%) | Footnotes |
Standard Chartered Masterbrand Licens ing | ||
Lim ited x | 100 | 122 |
Standard Chartered Leasing (UK) 3 | ||
Lim ited vi | 100 | 122 |
Birdsong Lim ited x | 100 | 71 |
Nominees One Lim ited x | 100 | 71 |
Nominees Two Lim ited x | 100 | 71 |
Songbird Lim ited x | 100 | 71 |
Standard Chartered Secretaries (Guernsey) | ||
Lim ited x | 100 | 71 |
Standard Chartered Trust (Guernsey) | ||
Lim ited x | 100 | 71 |
Standard Chartered Financ ial Serv ices | ||
(Luxembourg) S.A. x | 100 | 72 |
Standard Chartered IL&FS Management | ||
(Singapore) Pte. Lim ited x | 50 | 51 |
Banco Standard Chartered en Liqu idac ion x | 100 | 123 |
Standard Chartered Uruguay | ||
Representacion S.A. x | 100 | 73 |
Marina Opah Shipp ing Pte. Ltd. vi | 100 | 152 |
Marina Cobia Shipp ing Pte. Ltd vi | 100 | 152 |
Marina Aquata Shipp ing Pte. Ltd. vi | 100 | 152 |
Marina Aruana Shipp ing Pte. Ltd. vi | 100 | 152 |
Fintech for International development Ltd x | 58.901 A | 96 |
Ascenta IV x | 39.1 Z | 70 |
Cerulean Investments LP x | 100 Y | 11 |
Subsid
iary/Assoc
iate undertakings and Sign
ificant
investment holdings – Liqu
idated/d
issolved/sold
Proportion of | ||
shares held | ||
Name | (%) | Footnotes |
Assembly Payments, Inc i | 100 | 143 |
Assembly Escrow Inc i | 100 | 144 , 158 |
Shoal Lim ited iv | 100 | 1 |
Standard Chartered Bank Zimbabwe | ||
Lim ited i | 100 | 145 |
Africa Enterprise Network Trust x | 100 AB | 145 , 159 |
Standard Chartered Nominees Zimbabwe | ||
(Private) Lim ited x | 100 | 145 |
Standard Chartered Trading (Shanghai) | ||
Lim ited x | 100 | 148 , 160 |
Standard Chartered Bank Angola S.A. i | 60 | 146 |
Standard Chartered Bank Sierra Leone | ||
Lim ited i | 80.656 | 147 |
Marina Fatmarin i Sh ipp ing Pte. Ltd. vi | 100 | 152 |
Marina Frabandari Shipp ing Pte. Ltd. vi | 100 | 152 |
Marina Gerbera Shipp ing Pte. Ltd. vi | 100 | 152 |
The BW Leasing Partnership 1 LP vi | 100 Y | 107 |
The BW Leasing Partnership 2 LP vi | 100 Y | 107 |
The BW Leasing Partnership 3 LP vi | 100 Y | 107 |
The BW Leasing Partnership 4 LP vi | 100 Y | 107 |
The BW Leasing Partnership 5 LP vi | 100 Y | 107 |
Standard Chartered Overseas Investment, | ||
Inc. v | 100 | 63 |
Actis Rivendell Holdings (HK) Lim ited v | 39.671 A,B | 141 |
Autumn Life Pte. Ltd. iv | 100 A | 46 |
Footnotes
Registered address
Address in country of incorporation
1 | 1 Basinghall Avenue, London, EC2V 5DD, United Kingdom |
2 | 2 More London Rivers ide, London, SE1 2JT, Un ited Kingdom |
3 | 1 Bartholomew Lane, London, EC2N 2AX, United Kingdom |
4 | 1 Poultry, London, EC2R 8EJ, United Kingdom |
5 | Level 5, 345 George St, Sydney NSW 2000, Australia |
6 | Milsons Landing, Level 5, 6A Glen Street, Milsons Point NSW |
2061, Australia | |
7 | 5th Floor Standard House Bldg, The Mall, Queens Road, PO |
Box 496, Gaborone, Botswana | |
8 | Avenida Brigade iro Far ia Lima, no 3.477, 6º andar, conjunto |
62 – Torre Norte, Condomin io Pat io Victor Malzoni, CEP | |
04538-133, Sao Paulo, Brazil | |
9 | 1155, Boulevard de la Liberté, Douala, B.P. 1784, Cameroon |
10 | 66 Wellington Street, West, Suite 4100, Toronto Domin ion |
Centre, Toronto ON M5K 1B7, Canada | |
11 | Maples Corporate Services Lim ited, PO Box 309, Ugland |
House, Grand Cayman, KY1-1104 , Cayman Islands | |
12 | No. 35, Xinhuanbe i Road, TEDA, T ianjin, 300457, China |
13 | Room 2619, No 9, Linhe West Road, Tianhe Distr ict, |
Guangzhou, China | |
14 | 23 Boulevard de la République, Abidjan 17, 17 B.P. 1141, Cote |
d’Ivoire | |
15 | 8 Ecowas Avenue, Banjul, Gambia |
16 | Taunusanlage 16, 60325, Frankfurt am Main, Germany |
17 | Standard Chartered Bank Build ing, 87 Independance |
Avenue, Ridge, ACCRA, Greater ACCRA, GA-016-4621, | |
Ghana | |
18 | Standard Chartered Bank Build ing, No. 87, Independence |
Avenue, P.O. Box 768, Accra, Ghana | |
19 | 87, Independence Avenue, Post Office Box 678, Accra, |
Ghana | |
20 | 13/F Standard Chartered Bank Build ing, 4-4A Des Voeux |
Road Central, Hong Kong | |
21 | 31/F, Tower 2 Times Square, 1 Matheson St, Causeway Bay, |
Hong Kong | |
22 | 1st Floor, Europe Build ing, No.1, Haddows Road, |
Nungambakkam, Chennai, 600 006, India | |
23 | 90 M.G.Road, II Floor, Fort, Mumbai, Maharashtra, 400001, |
India | |
24 | Ground Floor, Crescenzo Build ing, G Block, C 38/39 , Bandra |
Kurla Complex, Bandra (East) , Mumbai , Maharashtra , | |
400051, India | |
25 | Crescenzo, 6th Floor, Plot No 38-39 G Block , Bandra Kurla |
Complex, Bandra East , Mumbai , Maharashtra , 400051, | |
India | |
26 | Vaishnav i Seren ity, First Floor, No. 112, Koramangala |
Industrial Area, 5th Block, Koramangala, Bangalore, | |
Karnataka, 560095, India | |
27 | The Icon Business Park Blok P Nomor 03, RT 03/RW |
09Sampora, Kec, Cisauk, Kabupaten Tangerang, Banten, | |
15345, Indonesia | |
28 | 91 Pembroke Road, Dublin 4, Ballsbridge, Dublin, DO4 EC42, |
Ireland | |
29 | 1st Floor, Goldie House, 1-4 Goldie Terrace, Upper Church |
Street, Douglas, IM1 1EB, Isle of Man | |
30 | 21/F, Sanno Park Tower, 2-11-1 Nagatacho, Chiyoda-ku, |
Tokyo, 100-6155, Japan | |
31 | 15 Castle Street, St Helier, JE4 8PT, Jersey |
32 | Standard Chartered@Chiromo, 48 Westlands Road, |
P. O. Box 30003 – 00100, Nairob i , Kenya | |
33 | Atrium Build ing, Maarad Street, 3rd Floor, P.O. Box 11-4081 |
Raid El Solh, Beirut Central Distr ict, Lebanon | |
34 | Level 25, Equatorial Plaza, Jalan Sultan Ismail, 50250 Kuala |
Lumpur, Malaysia | |
35 | Suite 18-1, Level 18, Vertical Corporate Tower B, Avenue 10, |
The Vertical, Bangsar South City , No. 8, Jalan Kerinch i , | |
59200 Kuala Lumpur, Wilayah Persekutuan, Malaysia |
40. Related undertakings of the Group
Footnotes
continued
Financ
ial statements
Notes to the financial statements
continued
Address in country of incorporation | |
36 | 12th Floor, Menara Symphony , No. 5, Jalan Prof. Khoo Kay |
Kim, Seksyen 13, 46200 Petaling Jaya , Selangor, Malaysia | |
37 | Level 13, Menara 1 Sentrum 201, Jalan Tun Sambanthan, |
Brickf ields, 50470 Kuala Lumpur, Malays ia | |
38 | 6th Floor, Standard Chartered Tower , 19, Bank Street, |
Cybercity, Ebene, 72201, Maurit ius | |
39 | Mondial Management Services Ltd, Unit 2L, 2nd Floor |
Standard Chartered Tower, 19 Cybercity, Ebene, Maurit ius | |
40 | Madan Bhandari Marg. Ward No.31, Kathmandu |
Metropolitan City, Kathmandu Distr ict, Bagmat i Province, | |
Kathmandu, 44600, Nepal | |
41 | PromisePay, 4 All good Place, Rototuna North, Hamilton, |
3210, New Zealand | |
42 | 142, Ahmadu Bello Way, Victor ia Island, Lagos, 101241, |
Niger ia | |
43 | P.O. Box No. 5556, I.I. Chundrigar Road , Karachi , 74000, |
Pakistan | |
44 | 8th Floor, Makati Sky Plaza Build ing 6788, Ayala Avenue San |
Lorenzo, City of Makati, Fourth Distr ict, Nat ional Capi, 1223, | |
Phil ipp ines | |
45 | Rondo Ignacego Daszyńskiego 2B, 00-843, Warsaw, Poland |
46 | 9 Raffles Place, #26-01 Republic Plaza, 048619, Singapore |
47 | 7 Changi Business Park Crescent, #03-00 Standard |
Chartered @ Changi, 486028, Singapore | |
48 | 8 Marina Boulevard, #27-01 Marina Bay Financ ial Centre |
Tower 1, 018981, Singapore | |
49 | 1 Robinson Road, #17-00, AIA Tower, 048542, Singapore |
50 | 38 Beach Road, #29-11 South Beach Tower, 189767, |
Singapore | |
51 | Abogado Pte Ltd, No. 8 Marina Boulevard, #05-02 MBFC |
Tower 1, 018981, Singapore | |
52 | 2nd Floor, 115 West Street, Sandton, Johannesburg, 2196, |
South Africa | |
53 | 1 Floor, International House, Shaaban Robert Street/Garden |
Avenue, PO Box 9011, Dar Es Salaam, Tanzania, United | |
Republic of | |
54 | No. 140, 11th, 12th and 14th Floor, Wireless Road, Lumpin i, |
Patumwan, Bangkok, 10330, Thailand | |
55 | Buyukdere Cad. Yapi Kredi Plaza C Blok, Kat 15, Levent, |
Istanbul, 34330, Turkey | |
56 | Standard Chartered Bank Bldg, 5 Speke Road, PO Box 7111, |
Kampala, Uganda | |
57 | 14 Mackinnon Road, Nakasero, Kampala, 141769, Uganda |
58 | EX-26, Ground Floor, Bldg 16-Co Work, Dubai Internet City, |
Dubai, United Arab Emirates | |
59 | Unit GV-00-10-07-OF-02, Level 7, Gate Village Build ing 10, |
Dubai International Financ ial Centre, Duba i, United Arab | |
Emirates | |
60 | 7th Floor, Build ing One, Gate Prec inct, DIFC, PO Box 999, |
Dubai, United Arab Emirates | |
61 | Part of Level 15, Standard Chartered Bank Build ing, Plot 8, |
Burj Downtown, Dubai, United Arab Emirates | |
62 | Corporation Trust Center, 1209 Orange Street, Wilm ington |
DE 19801, United States | |
63 | 50 Fremont Street, San Francisco CA 94105, United States |
64 | 251 Little Falls Drive, Wilm ington DE 19808, Un ited States |
65 | Level 3, #CP1.L01 and #CP2.L01, Capital Place, 29 Lieu Gia i |
Street, Ngoc Khanh Ward, Ba Dinh Distr ict, Ha No i, 10000, | |
Vietnam | |
66 | Victor ia House, State House Avenue, V ictor ia, MAHE, |
Seychelles | |
67 | Gervinusstrasse 17, 60322, Frankfurt am Main, Hesse, |
Germany | |
68 | Izumi Garden Tower 19F, 1-6-1 Roppongi, Minato-ku, Tokyo, |
Japan |
378
Standard Chartered
– Annual Report 2024
Address in country of incorporation | |
69 | 60B, Orchard Road, #06-18, Tower 2, The Atrium @ Orchard, |
238891, Singapore | |
70 | 17F, 47, Jong-ro, Jongno-gu, (17F, 100, Gongpyeong-dong, |
Jongno-gu), Seoul, Korea, Republic of | |
71 | Bucktrout House, Glategny Esplanade, St Peter Port, GY1 |
3HQ, Guernsey | |
72 | 30 Rue Schrobilgen, 2526, Luxembourg |
73 | Luis Alberto de Herrera 1248, Torre II, Piso 11, Esc. 1111, |
Uruguay | |
74 | 8A, Hony Tower, 1st Financ ial Street, Nanshan D istr ict, |
Shenzen, China | |
75 | Standard Chartered Tower, 201 Century Avenue, Pudong, |
Shanghai, 200120, China | |
76 | 1201 1-2, 15-16, 12/F, Unit No.1, Build ing No.1, No. 1 |
Dongsanhuan Zhong Road, Chaoyang Distr ict, Be ijing, | |
China | |
77 | 18/F., Standard Chartered Tower, 388 Kwun Tong Road, |
Kwun Tong, Kowloon, Hong Kong | |
78 | 15/F., Two International Finance Centre, No. 8 Finance |
Street, Central, Hong Kong | |
79 | 39/F., Oxford House, Taikoo Place, 979 King’s Road, Quarry |
Bay, Hong Kong | |
80 | 32/F., 4-4A Des Voeux Road, Central , Hong Kong |
81 | 14th Floor, One Taikoo Place, 979 King’s Road, Quarry Bay, |
Hong Kong | |
82 | 14/F, Standard Chartered Bank Build ing, 4-4A Des Voeux |
Road , Central, Hong Kong | |
83 | IFC 5, St Helier, JE1 1ST, Jersey |
84 | 47, Jong-ro, Jongno-gu, Seoul, 110-702, Korea, Republic of |
85 | 2F, 47, Jong-ro, Jongno-gu, Seoul, Korea, Republic of |
86 | Trust Company Complex, Ajeltake Road, Ajeltake Island, |
Majuro, MH96960, Marshall Islands | |
87 | 3rd Floor Main SCB Build ing, I.I Chundr igar Road, Karachi, |
Sindh, 74000, Pakistan | |
88 | 1F, No.177 & 3F-6F, 17F-19F, No.179, Liaon ing Street, |
Zhongshan Dist., Taipe i, 104, Ta iwan | |
89 | C/O Corporation Service Company, 251 Little Falls Drive, |
Wilm ington DE 19808, Un ited States | |
90 | 16 Raffles Quay, #16-02, Hong Leong Build ing, S ingapore, |
048581, Singapore | |
91 | Suite 12100, 12/F., YF Life Tower, 33 Lockhart Road, Wan |
Chai, Hong Kong | |
92 | 1st Floor, UB Plaza, No. 1 & 2, Vittal Mallya Road, Bengalur, |
India | |
93 | 2nd Floor, 23-25 M.G. Road, Fort, Mumbai 400 001, India |
94 | 16th Floor, WeWork Hub 71, Al Khatem Tower, ADGM |
Square, Al Maryah Island, Abu Dhabi, United Arab Emirates | |
95 | 218 Haihe East Road, Hedong Distr ict, T ianjin, 300012, China |
96 | Parker Andrews Ltd, 5th Floor. The Union Build ing, 51-59 |
Rose Lane, Norwich, NR1 1BY | |
97 | Unit 1 – 127A, WeWork Futura, Magarpatta Road, Kirtane |
Baug, Hadpsar I.E., Pune – 411013, Maharashtra, India | |
98 | L17-11, Floor 17, Vincom Center, 72 Le Thanh Ton, Ben Nghe |
Ward, Distr ict 1, Ho Ch i Minh City, Vietnam | |
99 | 30th floor, One Taikoo Place, 979 King’s Road, Hong Kong, |
Hong Kong | |
100 | Ground Floor, Two Dockland Central, Guild Street, North |
Dock, Dublin, D01 K2C5, Ireland | |
101 | 2701, 27th Floor, Central Plaza, 18 Harbour Road, Wanchai, |
Hong Kong | |
102 | 12E, rue Guillaume Kroll, L-1882 Helios, Luxembourg |
103 | 1 Raffles Place, #36-01, One Raffles Place, 048616, Singapore |
104 | Duo, Level 6, 280 Bishopsgate, London, EC2M 4RB, United |
Kingdom | |
105 | 138 Arab Street , 199826, Singapore |
106 | 53 Boulevard Royal, Grand Duchy of Luxembourg, 2449, |
Luxembourg | |
107 | 5th Floor, Holland House, 1-4 Bury Street, London, EC3A |
5AW, United Kingdom |
40. Related undertakings of the Group
continued
Footnotes
continued
Financ
ial statements
Standard Chartered
– Annual Report 2024
379
Address in country of incorporation | |
108 | G01-02, Wisma Haj i Mohd Taha Bu ild ing, , Jalan Gadong, |
BE4119, Brunei Darussalam | |
109 | 1 Raffles Quay , #23-01 , One Raffles Quay, 048583 , |
Singapore | |
110 | 10 Marina Boulevard #08-08, Marina Bay Financ ial Centre, |
018983, Singapore | |
111 | 1095 Avenue of Americas, New York City NY 10036, United |
States | |
112 | 3 Jalan Pisang, c/o Watiga Trust Ltd, 199070, Singapore |
113 | c/o Ocorian Corporate Services (Maurit ius) Ltd, 6th Floor, |
Tower A,1, Exchange Square, Wall Street, Ebene, Maurit ius | |
– 72201, Maurit ius | |
114 | c/o Maples Finance Lim ited, PO Box 1093 GT, Queensgate |
House, Georgetown, Grand Cayman, Cayman Islands | |
115 | Level 1, Wisma Standard Chartered, Jalan Teknologi 8, , |
Taman Teknologi Malaysia, Bukit Jalil, , 57000 Kuala | |
Lumpur, Wilayah Persekutuan, Malaysia | |
116 | Al Faisal iah Office Tower Floor No 7 (T07D) , K ing Fahad |
Highway, Olaya Distr ict, P.O box 295522 , R iyadh, 11351 , | |
Saudi Arabia | |
117 | B001, Metrotech Forest View, Sy No 67/5 BSK, 6th Stage, |
Thalaghattapura Bengaluru , Karnataka, India, 560062 | |
118 | The Company’s Registered Office, Vistra Corporate Services |
Centre, Wickhams Cay II, Road Town, Tortola, VG1110, Virg in | |
Islands, Brit ish | |
119 | Standard Chartered House, Stand No. 4642, Corner of |
Mwaimwene Road and Addis Ababa Drive, Lusaka, Lusaka, | |
10101, Zambia | |
120 | Units 1101B (Office use only), No. 235 Tianhebe i Rd., T ianhe |
Distr ict, Guangzhou C ity, Guangdong Province, China | |
121 | Unit 802B, 803, 1001A,1002B,1003-1005,1101-1105, 201- |
1205,1302C,1303, No. 235 Tianhe North Road, Tianhe Distr ict, | |
Guangzhou City, Guangdong Province, China | |
122 | C/O Teneo Financ ial Adv isory Lim ited, The Colmore |
Build ing, 20 Colmore C ircus, Queensway, Birm ingham, B4 | |
6AT, United Kingdom | |
123 | Jiron Huascar 2055, Jesus Maria, Lima, 15072, Peru |
124 | 77 Robinson Road, #13-00, Robinson 77, 068896, Singapore |
125 | TMF Trust Labuan Lim ited, Brumby Centre, Lot 42, Jalan |
Muhibbah, 87000 Labuan F.T., Malaysia | |
126 | c/o King & Wood Mallesons, Level 61, Governor Phill ip Tower, |
1 Farrer Place, Sydney NSW 2000, Australia | |
127 | 2402C, 24th Floor, Tamouh Tower, Tamouh, Abu Dhabi, Al |
Reem Island, United Arab Emirates | |
128 | 8-10 Avenue de la Gare, 1610, Luxembourg |
129 | No 1 Grenville Street, St Helier, JE2 4UF, Jersey |
130 | 77 Robinson Road, #25-00 Robinson 77, 068896, Singapore |
131 | Level 22, 120 Spencer Street, Melbourne VIC 3000 VIC 3000, |
Australia | |
132 | 5/F, Manulife Place, 348 Kwun Tong Road, Kowloon, Hong |
Kong | |
133 | 32 Molesworth Street, Dublin 2, D02Y512, Ireland |
134 | 27 Fitzw ill iam Street, Dublin, D02 TP23, Ireland |
135 | Dubai International Financ ial Centre, Level 14 , The Gate , |
PO Box 74777, Dubai, United Arab Emirates | |
136 | No. 2734, Sector-I, HSR Layout, HSR Layout, Bangalore , |
Bangalore South, Karnataka, 560102, India | |
137 | 1st Floor Build ing 33, Waterford Office Park, Waterford |
Drive, Fourways, Gauteng, 2191, South Africa | |
138 | Stand No. 4642 , Corner of Mwaimwena Road and Addis |
Ababa Drive, Lusaka, 10101, Zambia | |
139 | 3 Jalan Pisang, c/o Watiga Trust Ltd, 199070, Singapore |
140 | Intertrust Corporate Services (Cayman) Lim ited, 190 Elg in |
Avenue,George Town, Grand Cayman , KY1-9005, Cayman | |
Islands | |
141 | Unit 605-07, 6/F Wing OnCentre, 111 Connaught Road, |
Central,Sheung Wan, Hong Kong |
Address in country of incorporation | |
142 | 1221 A, Devika Tower, 12th Floor, 6 Nehru Place, New Delhi |
110019 | |
143 | 555 Washington Av, St Louis, MO, United States of America, |
63101 | |
144 | 25 Taylor St, San Francisco CA 94102-3916, United States |
145 | Africa Unity Square Build ing, 68 Nelson Mandela Avenue, |
Harare, Zimbabwe | |
146 | Edifíc io K ilamba, 8º Andar Avenida 4 de Fevereiro, Marginal, |
Luanda, Angola | |
147 | 9 & 11, Lightfoot Boston Street, Freetown, Sierra Leone |
148 | No. 188 Yeshen Rd, 11F, A-1161 RM,Pudong New Distr ict, |
Shanghai, 31, 201308, China | |
149 | IQEQ Corporate Services (Maurit ius) Ltd, 33, Ed ith Cavell |
Street, Port Louis, 11324, Maurit ius | |
150 | 9 Raffles Place, #27-00 Republic Plaza, 048619, Singapore |
151 | Level C, No. 888 2nd Huanhu West Road, Nanhui New |
Town, Pudong New Area, Shanghai | |
152 | 8 Marina Boulevard, Level 26, Marina Bay Financ ial Centre, |
Tower 1, 018981, Singapore | |
153 | 12th Floor, Parinee Crescenzo Build ing, Plot C-38 & 39, G |
Block Bandra (E) Opp. MCA Ground, Mumbai, 400051, India | |
154 | Unit 8C-17B, Xinl ikang Bu ild ing, 3044 X ingha i Blvd, Nanshan |
Distr ict, Shenzhen, Ch ina | |
155 | Dedicated desk # 14-123-039, 15th Floor, Al Khatem Tower, |
ADGM Square, Abu Dhabi, United Arab Emirates | |
156 | 6 Battery Road #13-01, 049909, Singapore |
157 | 4thFloor, 274, Chital ia House, Dr. Cawasji Hormusji Road, |
Dhobi Talao, Mumbai City, Maharashtra, India 400 002, | |
Mumbai, 400 002, India |
Other notes | |
158 | The Group has determined that these undertakings are |
excluded from being consolidated into the Groups | |
accounts, and do not meet the definit ion of a Subsid iary | |
under IFRS. See note 32 for the consolidat ion pol icy and | |
disclosure of the undertaking. | |
159 | No share capital by virtue of being a trust |
160 | Lim ited l iab il ity company |
161 | The Group has determined the prin icpal place of operat ion |
to be United Kingdom | |
162 | The Group has determined the prin icpal place of operat ion |
to be Hong Kong | |
163 | Company is exempt from the requirement of an audit of its |
ind iv idual accounts by virtue of Section 479A of the | |
Companies Act 2006. Company names and associated | |
numbers of the qualify ing subs id iar ies taking an audit | |
exemption for the year ended 31 December 2024 are: | |
Finventures UK Lim ited 04275894, Standard Chartered I H | |
Lim ited 08414408, Standard Chartered Strateg ic | |
Investments Lim ited 01388304, Standard Chartered | |
Holdings Lim ited 02426156, Standard Chartered NEA | |
Lim ited 05345091, SCMB Overseas L im ited 01764223, | |
Standard Chartered Africa Lim ited 00002877, Standard | |
Chartered Securit ies (Afr ica) Holdings Lim ited 05843604, | |
Standard Chartered Leasing (UK) Lim ited 05513184, SC | |
Transport Leasing 2 Lim ited 06787090 and SC Transport | |
Leasing 1 LTD 06787116, The SC Transport Leasing | |
Partnership 1 LP13441, The SC Transport Leasing Partnership | |
2 LP13440, The SC Transport Leasing Partnership 3 LP13442, | |
The SC Transport Leasing Partnership 4 LP13443. In line with | |
section 479C of the Companies Act 2006, the Parent | |
undertaking (Standard Chartered PLC Company) | |
guarantees all outstanding liab il it ies to wh ich the | |
subsid iary company is subject at the end of the financ ial | |
year includ ing external l iab il it ies of F inventures UK Lim ited | |
($2.3mill ion), Standard Chartered NEA L im ited ($15.6m ill ion) | |
and SCMB Overseas Lim ited ($5.9m ill ion) | |
164 | Directly held related undertaking |
165 | Group’s ultimate ownership for CurrencyFair entit ies is |
43.422% | |
166 | Registered as a Lim ited company under the Law of |
China |
40. Related undertakings of the Group
continued
Financ
ial statements
Notes to the financial statements
380
Standard Chartered
– Annual Report 2024
Descript ion of shares | |
A | Class A Ordinary shares |
B | Class B Ordinary shares |
C | Class C Ordinary shares |
D | Class D Ordinary shares |
E | Class A2 shares |
F | Class B Shares |
G | Class B Equity interest |
H | Series A Preferred |
I | Series B Preferred |
J | Preference shares |
K | Series A preference shares |
L | Series B preference shares |
M | Redeemable preference shares |
N | Series B Redeemable preference shares |
O | Series C2 preference shares |
P | Series C3 preference shares |
Q | Redeemable non-cumulative preference shares |
R | Compulsory convertible cumulative preference shares |
S | Irredeemable convertible preference shares |
T | Irredeemable non-cumulative preference shares |
U | Class B Non-cumulative preference shares |
V | Class C Non-cumulative preference shares |
W | Class D Non-cumulative preference shares |
X | Charter capital |
Y | Lim ited Partnersh ip |
Z | Partnership Interest |
AA | Membership interest |
AB | Trust |
AC | Uncertif icated |
AD | Deferred shares |
AE | Guarantee |
Business activ ity | ||
i | Banking & Financ ial Serv ices | |
i i | Commercial real estate | |
i i i | Data Analytics | |
iv | Dig ital Venture | |
v | Investment holding company | |
vi | Leasing and Finance | |
vi i | To manage intellectual property for Group | |
vi i i | Research & development | |
ix | Support Services | |
x | Others | |
Save for those disclosed in this Annual Report, there were no
other sign
ificant
investments held, nor were there material
acquis
it
ions or disposals of subsid
iar
ies during the year under
review. Apart from those disclosed in this Annual Report, there
were no material investments or addit
ions of cap
ital assets
381
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
382 Supplementary financial
informat
ion
388 Supplementary people informat
ion
393 Supplementary sustainab
il
ity informat
ion
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ital
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ing
clients confidence
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Supplementary informat
ion
382
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Supplementary financial
informat
ion
Five-year summary
1
2024
$mill
ion
2023
$mill
ion
2022
$mill
ion
2021
$mill
ion
2020
$mill
ion
Operating profit before impa
irment losses and taxat
ion
7,041
6,468
5,405
3,777
4,374
Impairment losses on loans and advances and other
credit risk provis
ions
(547)
(508)
(836)
(254)
(2,325)
Other impa
irment³
(588)
(1,008)
(425)
(372)
(98)
Profit before taxation
6,014
5,093
4,286
3,347
1,613
Profit attributable to shareholders
4,050
3,469
2,948
2,315
724
Loans and advances to banks
1
43,593
44,977
39,519
44,383
44,347
Loans and advances to customers
1
281,032
286,975
310,647
298,468
281,699
Total assets
849,688
822,844
819,922
827,818
789,050
Deposits by banks
1
25,400
28,030
28,789
30,041
30,255
Customer accounts
1
464,489
469,418
461,677
474,570
439,339
Shareholders’ equity
44,388
44,445
43,162
46,011
45,886
Total capital resources
2
61,666
62,389
63,731
69,282
67,383
Information per ordinary share
Basic earnings per share
141.3c
108.6c
85.9c
61.3c
10.4c
Underlying earnings per share
3
168.1c
128.9c
97.9c
85.8c
36.1c
Div
idends per share
4
37.0c
27.0c
18.0c
12.0c
–
Net asset value per share
1,781.3c
1,629.0c
1,453.3c
1,456.4c
1,409.3c
Net tangible asset value per share
1,541.1c
1,393.0c
1,249.0c
1,277.0c
1,249.0c
Return on assets
5
0.5%
0.4%
0.4%
0.3%
0.1%
Ratios
Reported return on ordinary shareholders’ equity
8.4%
7.2%
6.0%
4.2%
0.8%
Reported return on ordinary shareholders’
tangible equity
9.7%
8.4%
6.8%
4.8%
0.9%
Underlying return on ordinary shareholders’ equity
10.0%
8.7%
6.9%
5.9%
2.6%
Underlying return on ordinary shareholders’
tangible equity
11.7%
10.1%
7.7%
6.8%
3.0%
Reported cost to income ratio (excluding UK Bank Levy)
63.5%
63.5%
66.3%
73.6%
68.1%
Reported cost to income ratio (includ
ing UK Bank Levy)
64.0%
64.1%
66.9%
74.3%
70.4%
Underlying cost to income ratio (excluding UK Bank levy)
59.4%
63.4%
65.5%
69.8%
66.4%
Underlying cost to income ratio (includ
ing UK Bank levy)
59.9%
64.1%
66.2%
70.5%
68.7%
Capital ratios:
CET 1
6
14.2%
14.1%
14.0%
14.1%
14.4%
Total capital
6
21.5%
21.2%
21.7%
21.3%
21.2%
1
Excludes amounts held at fair value through profit or loss
2
Shareholders’ funds, non-controlling interests and subordinated loan capital
3
Other impa
irment
include nil (2023: $850 mill
ion)
impa
irment charge relat
ing to the Group’s investment in its associate China Bohai Bank (Bohai)
4 Div
idend pa
id during the year per share
5
Represents profit attributable to shareholders div
ided by the total assets of the Group
6 Unaudited
Supplementary financial
informat
ion
383
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Analysis of underlying performance by key market
The following tables provide informat
ion for key markets
in which the Group operates. The numbers are prepared on a
management view. Refer to Note 2 for details.
2024
Hong
Kong
$mill
ion
Korea
$mill
ion
China
$mill
ion
Taiwan
$mill
ion
Singapore
$mill
ion
India
$mill
ion
UAE
$mill
ion
UK
$mill
ion
US
$mill
ion
Other
$mill
ion
Group
$mill
ion
Operating income
4,764
1,095
1,321
577
2,573
1,328
836
305
1,289
5,608
19,696
Operating expenses
(2,076)
(788)
(903)
(345)
(1,293)
(914)
(439)
(1,000)
(698)
(3,334)
(11,790)
Operating profit/(loss)
before impa
irment
losses and taxation
2,688
307
418
232
1,280
414
397
(695)
591
2,274
7,906
Credit impa
irment
(266)
(54)
(152)
(38)
(72)
(34)
26
11
(1)
23
(557)
Other impa
irment
(114)
(1)
(28)
(11)
(73)
(72)
(28)
(23)
(26)
(212)
(588)
Profit from associates
and joint ventures
–
–
67
–
–
–
–
(7)
–
(10)
50
Underlying profit/
(loss) before taxation
2,308
252
305
183
1,135
308
395
(714)
564
2,075
6,811
Total assets employed
204,042
47,865
42,811
22,091
110,524
35,655
28,327
170,713
72,205
115,455
849,688
Of which: loans
and advances
to customers
1
87,891
26,749
15,812
11,860
61,168
13,503
8,207
35,283
29,148
49,936
339,557
Total liab
il
it
ies
employed
194,658
39,463
33,367
18,863
116,660
27,666
17,759
127,802
57,138
165,028
798,404
Of which: customer
accounts
1
161,961
28,703
27,853
17,252
89,269
18,601
13,845
83,036
23,579
59,164
523,263
2023
Operating income
4,167
1,074
1,158
558
2,455
1,206
794
102
870
4,994
17,378
Operating expenses
(1,927)
(731)
(894)
(331)
(1,214)
(865)
(392)
(870)
(634)
(3,278)
(11,136)
Operating profit/(loss)
before impa
irment
losses and taxation
2,240
343
264
227
1,241
341
402
(768)
236
1,716
6,242
Credit impa
irment
(372)
(48)
(113)
(42)
(48)
(31)
24
14
12
76
(528)
Other impa
irment
(17)
1
(5)
(5)
(14)
(11)
(5)
(15)
(5)
(54)
(130)
Profit from associates
and joint ventures
–
–
114
–
–
–
–
–
–
(20)
94
Underlying profit/
(loss) before taxation
1,851
296
260
180
1,179
299
421
(769)
243
1,718
5,678
Total assets employed
190,484
56,638
41,508
21,638
102,724
33,781
20,376
149,982
88,113
117,600
822,844
Of which: loans
and advances
to customers
1
87,590
33,443
15,882
11,634
62,030
13,832
8,495
31,067
27,434
54,079
345,486
Total liab
il
it
ies
employed
183,112
46,666
38,252
20,365
109,825
26,532
17,214
92,168
72,583
165,774
772,491
Of which: customer
accounts
1
155,446
37,032
31,211
18,621
86,282
18,709
13,924
72,610
40,846
59,941
534,622
1
Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
384
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Supplementary financial
informat
ion
Analysis of operating income by product and segment
The following tables provide a breakdown of the Group’s underlying operating income by product and client segment.
2024
2023
Corporate &
Investment
Banking
$mill
ion
Wealth &
Retail
Banking
$mill
ion
Ventures
$mill
ion
Central &
other
items
$mill
ion
Total
$mill
ion
Corporate &
Investment
Banking
$mill
ion
Wealth &
Retail
Banking
$mill
ion
Ventures
$mill
ion
Central &
other
items
$mill
ion
Total
$mill
ion
Transaction Services
6,434
50
–
–
6,484
6,470
48
–
–
6,518
Payments and Liqu
id
ity
4,605
–
–
–
4,605
4,645
–
–
–
4,645
Securit
ies & Pr
ime Services
611
–
–
–
611
550
–
–
–
550
Trade & Working Capital
1,218
50
–
–
1,268
1,275
48
–
–
1,323
Global Banking
1,935
–
–
–
1,935
1,705
–
–
–
1,705
Lending & Financ
ial Solut
ions
1,677
–
–
–
1,677
1,500
–
–
–
1,500
Capital Market & Advisory
258
–
–
–
258
205
–
–
–
205
Global Markets
3,450
–
–
–
3,450
3,049
–
–
–
3,049
Macro Trading
2,852
–
–
–
2,852
2,620
–
–
–
2,620
Credit Trading
644
–
–
–
644
451
–
–
–
451
Valuation & Other Adj
(46)
–
–
–
(46)
(22)
–
–
–
(22)
Wealth Solutions
1
2,488
1
–
2,490
–
1,944
–
–
1,944
Investment Products
1
1,825
1
–
1,827
–
1,357
–
–
1,357
Bancassurance
–
663
–
–
663
–
587
–
–
587
CCPL & Other Unsecured
Lending
–
1,081
120
–
1,201
–
1,068
93
–
1,161
Deposits
1
3,774
(29)
–
3,746
1
3,621
(52)
–
3,570
Mortgages & Other
Secured Lending
–
395
–
–
395
–
400
–
–
400
Treasury
–
–
1
(24)
(23)
–
–
30
(932)
(902)
Other
(3)
28
90
(97)
18
(7)
25
85
(170)
(67)
Total underlying operating
income
11,818
7,816
183
(121)
19,696
11,218
7,106
156
(1,102)
17,378
Insured and uninsured deposits
SCB operates and provides services to customers across many countries and insured deposit is determined on the basis of lim
its
enacted with
in local regulat
ions.
2024
2023
Insured deposits
Uninsured deposits
Total
$mill
ion
Insured deposits
Uninsured deposits
Total
$mill
ion
Bank
deposits
$mill
ion
Customer
accounts
$mill
ion
Bank
deposits
$mill
ion
Customer
accounts
$mill
ion
Bank
deposits
$mill
ion
Customer
accounts
$mill
ion
Bank
deposits
$mill
ion
Customer
accounts
$mill
ion
Current accounts
8
15,596
19,844
152,101
187,549
9
15,767
20,969
150,559
187,304
Savings deposits
–
31,977
–
86,579
118,556
–
27,376
–
91,425
118,801
Time deposits
–
28,417
6,717
170,752
205,886
1
23,517
8,295
176,977
208,790
Other deposits
–
104
9,393
37,737
47,234
–
93
6,236
48,907
55,236
Total
8
76,094
35,954
447,169
559,225
10
66,753
35,500
467,868
570,131
UK and non-UK deposits
The following table summarises the split of Bank and Customer deposits into UK and Non-UK deposits for respective account
lines based on the domic
ile or res
idence of the clients.
2024
2023
UK deposits
Non-UK deposits
Total
$mill
ion
UK deposits
Non-UK deposits
Total
$mill
ion
Bank
deposits
$mill
ion
Customer
accounts
$mill
ion
Bank
deposits
$mill
ion
Customer
accounts
$mill
ion
Bank
deposits
$mill
ion
Customer
accounts
$mill
ion
Bank
deposits
$mill
ion
Customer
accounts
$mill
ion
Current accounts
544
7,734
19,308
159,963
187,549
925
7,062
20,053
159,264
187,304
Savings deposits
–
145
–
118,411
118,556
–
330
–
118,471
118,801
Time deposits
315
7,731
6,402
191,438
205,886
310
5,412
7,986
195,082
208,790
Other deposits
2,342
12,744
7,051
25,097
47,234
1,683
16,514
4,553
32,486
55,236
Total
3,201
28,354
32,761
494,909
559,225
2,918
29,318
32,592
505,303
570,131
385
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Contractual maturity of Loans, Investment securit
ies and Depos
its
2024
Loans and
advances to
banks
$mill
ion
Loans and
advances to
customers
$mill
ion
Investment
securit
ies
– Treasury
and other
elig
ible B
ills
$mill
ion
Investment
securit
ies
– Debt
securit
ies
$mill
ion
Investment
securit
ies
– Equity
shares
$mill
ion
Bank
deposits
$mill
ion
Customer
accounts
$mill
ion
One year or less
66,448
181,863
41,966
47,959
–
29,678
463,566
Between one and five years
12,122
63,006
41
74,197
–
6,281
57,062
Between five and ten years
1,680
21,139
–
23,319
–
3
849
Between ten years and fifteen years
71
13,236
–
5,876
–
–
1,217
More than fifteen years and undated
239
60,313
–
26,743
6,480
–
569
80,560
339,557
42,007
178,094
6,480
35,962
523,263
Amortised cost and FVOCI exposures
43,593
281,032
Of which: Fixed interest rate exposures
35,383
153,575
Of which: Floating interest rate exposures
8,210
127,457
2023
One year or less
72,717
197,125
38,877
59,023
–
31,333
485,908
Between one and five years
3,975
52,532
4
69,075
–
4,174
46,365
Between five and ten years
837
19,184
1
18,804
–
2
567
Between ten years and fifteen years
35
14,084
–
9,276
–
–
1,341
More than fifteen years and undated
226
62,561
–
18,155
3,932
–
441
77,790
345,486
38,882
174,333
3,932
35,509
534,622
Amortised cost and FVOCI exposures
44,977
286,975
Of which: Fixed interest rate exposures
38,505
168,697
Of which: Floating interest rate exposures
6,472
118,278
Maturity and yield of Debt securit
ies, alternat
ive tier one and other elig
ible b
ills held at amortised cost
One year or less
Between one and
five years
Between five and
ten years
More than ten years
Total
$mill
ion
Yield %
$mill
ion
Yield %
$mill
ion
Yield %
$mill
ion
Yield %
$mill
ion
Yield %
Central and other
government agencies
– US
1,864
1.53
9,607
1.98
5,187
1.88
4,353
2.76
21,011
2.08
– UK
192
1.70
684
2.07
44
0.88
–
–
920
1.93
– Other
3,081
3.20
11,454
3.39
2,932
3.93
25
7.55
17,492
3.46
Other debt securit
ies
1,687
6.21
2,676
6.30
4,620
4.86
6,731
5.41
15,714
5.49
As at 31 December 2024
6,824
3.45
24,421
3.12
12,783
3.42
11,109
4.38
55,137
3.48
One year or less
Between one and
five years
Between five and
ten years
More than ten years
Total
$mill
ion
Yield %
$mill
ion
Yield %
$mill
ion
Yield %
$mill
ion
Yield %
$mill
ion
Yield %
Central and other
government agencies
– US
1,861
1.39
9,171
1.61
5,799
1.67
4,524
3.89
21,355
2.09
– UK
39
2.75
85
1.06
101
0.67
–
–
225
1.18
– Other
5,045
2.72
9,560
2.80
2,289
3.12
81
4.74
16,975
2.84
Other debt securit
ies
2,487
6.45
2,658
5.37
2,262
5.44
10,973
5.13
18,380
5.38
As at 31 December 2023
9,432
3.44
21,474
2.61
10,451
2.79
15,578
4.77
56,935
3.37
The maturity distr
ibut
ions are presented in the above table on the basis of contractual maturity dates. The weighted average
yield for each range of maturit
ies
is calculated by div
id
ing the annualised interest income for the year by the book amount of
debt securit
ies at that date.
386
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Supplementary financial
informat
ion
Average balance sheets and yields and volume and price variances
Average balance sheets and yields
The following tables set out the average balances and yields for the Group’s assets and liab
il
it
ies for the per
iods ended
31 December 2024 and 31 December 2023 under the revised defin
it
ion of net interest margin. For the purpose of these tables,
average balances have been determined on the basis of daily balances, except for certain categories, for which balances
have been determined less frequently. The Group does not believe that the informat
ion presented
in these tables would be
sign
ificantly d
ifferent had such balances been determined on a daily basis.
Average assets
2024
Average
non-interest
earning
balance
$mill
ion
Average
interest
earning
balance
$mill
ion
Interest
income
$mill
ion
Gross yield
interest
earning
balance
%
Gross yield
total
balance
%
Cash and balances at central banks
9,815
57,294
2,520
4.40
3.76
Gross loans and advances to banks
43,184
44,394
2,368
5.33
2.70
Gross loans and advances to customers
57,614
286,588
16,314
5.69
4.74
Impairment provis
ions aga
inst loans and advances to
banks and customers
–
(5,463)
–
–
–
Investment securit
ies – Treasury and Other El
ig
ible B
ills
16,101
26,594
1,495
5.62
3.50
Investment securit
ies – Debt Secur
it
ies
58,362
129,931
5,165
3.98
2.74
Investment securit
ies – Equ
ity Shares
5,278
–
–
–
–
Property, plant and equipment and intang
ible assets
6,299
–
–
–
–
Prepayments, accrued income and other assets
123,832
–
–
–
–
Investment associates and jo
int ventures
1,105
–
–
–
–
Total average assets
321,590
539,338
27,862
5.17
3.24
Average assets
2023
Average
non-interest
earning
balance
$mill
ion
Average
interest
earning
balance
$mill
ion
Interest
income
$mill
ion
Gross yield
interest
earning
balance
%
Gross yield
total
balance
%
Cash and balances at central banks
10,466
67,634
2,833
4.19
3.63
Gross loans and advances to banks
34,743
44,161
2,095
4.74
2.66
Gross loans and advances to customers
55,235
301,570
15,698
5.20
4.40
Impairment provis
ions aga
inst loans and advances to
banks and customers
–
(5,894)
–
–
–
Investment securit
ies – Treasury and Other El
ig
ible B
ills
7,955
32,026
1,596
4.98
3.99
Investment securit
ies – Debt Secur
it
ies
29,912
133,023
5,005
3.76
3.07
Investment securit
ies – Equ
ity Shares
3,190
–
–
–
–
Property, plant and equipment and intang
ible assets
8,861
–
–
–
–
Prepayments, accrued income and other assets
126,539
–
–
–
–
Investment associates and jo
int ventures
1,628
–
–
–
–
Total average assets
278,529
572,520
27,227
4.76
3.20
Average liab
il
it
ies
2024
Average
non-interest
bearing
balance
$mill
ion
Average
interest
bearing
balance
$mill
ion
Interest
expense
$mill
ion
Rate paid
interest
bearing
balance
%
Rate paid
total
balance
%
Deposits by banks
16,834
21,686
806
3.72
2.09
Customer accounts:
Current accounts
41,870
127,624
5,134
4.02
3.03
Savings deposits
–
114,641
2,292
2.00
2.00
Time deposits
20,937
187,694
8,340
4.44
4.00
Other deposits
34,954
10,291
510
4.96
1.13
Debt securit
ies
in issue
11,958
65,521
3,610
5.51
4.66
Accruals, deferred income and other liab
il
it
ies
143,771
1,024
60
5.86
0.04
Subordinated liab
il
it
ies and other borrowed funds
–
11,306
744
6.58
6.58
Non-controlling interests
395
–
–
–
–
Shareholders’ funds
50,425
–
–
–
–
321,144
539,787
21,496
3.98
2.50
Adjustment for trading book funding cost and others
(4,096)
Total average liab
il
it
ies and shareholders’ funds
321,144
539,787
17,400
3.22
2.02
387
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Average liab
il
it
ies
2023
Average
non-interest
bearing
balance
$mill
ion
Average
interest
bearing
balance
$mill
ion
Interest
expense
$mill
ion
Rate paid
interest
bearing
balance
%
Rate paid
total
balance
%
Deposits by banks
14,238
24,066
796
3.31
2.08
Customer accounts:
Current accounts
41,911
132,537
3,619
2.73
2.07
Savings deposits
–
112,046
1,981
1.77
1.77
Time deposits
15,345
186,287
8,204
4.40
4.07
Other deposits
44,211
6,527
488
7.48
0.96
Debt securit
ies
in issue
12,259
65,579
3,367
5.13
4.33
Accruals, deferred income and other liab
il
it
ies
132,442
1,009
52
5.15
0.04
Subordinated liab
il
it
ies and other borrowed funds
–
12,299
951
7.73
7.73
Non-controlling interests
373
–
–
–
–
Shareholders’ funds
49,920
–
–
–
–
310,699
540,350
19,458
3.60
2.29
Adjustment for trading book funding cost and others
(1,778)
Total average liab
il
it
ies and shareholders’ funds
310,699
540,350
17,680
3.27
2.08
Net interest margin
2024
$mill
ion
2023
$mill
ion
Interest income (reported)
27,862
27,227
Average interest earning assets
539,338
572,520
Gross yield (%)
5.17
4.76
Interest expense (reported)
21,496
19,458
Adjustment for trading book funding cost and others
(4,096)
(1,778)
Interest expense adjusted for trading book funding cost and others
17,400
17,680
Average interest-bearing liab
il
it
ies
539,787
540,350
Rate paid (%)
3.22
3.27
Net yield (%)
1.95
1.49
Net interest income adjusted for trading book funding cost and others
10,462
9,547
Net interest margin (%)
1.94
1.67
Volume and price variances
The following table analyses the estimated change in the Group’s net interest income attributable to changes in the average
volume of interest-earning assets and interest-bearing liab
il
it
ies, and changes
in their respective interest rates for the years
presented. Volume and rate variances have been determined based on movements in average balances and average
exchange rates over the year and changes in interest rates on average interest-earning assets and average interest-
bearing liab
il
it
ies.
2024 versus 2023
2023 versus 2022
(Decrease)/increase in interest
due to:
Net increase/
(decrease) in
interest
$mill
ion
(Decrease)/increase in interest
due to:
Net increase/
(decrease) in
interest
$mill
ion
Volume
$mill
ion
Rate
$mill
ion
Volume
$mill
ion
Rate
$mill
ion
Interest earning assets
Cash and unrestricted balances at
central banks
(455)
142
(313)
550
1,518
2,068
Loans and advances to banks
12
261
273
57
1,185
1,242
Loans and advances to customers
(845)
1,463
618
(284)
5,814
5,530
Investment securit
ies
(362)
420
58
(74)
3,209
3,135
Total interest earning assets
(1,650)
2,286
636
249
11,726
11,975
Interest bearing liab
il
it
ies
Subordinated liab
il
it
ies and other
borrowed funds
(65)
(144)
(209)
(208)
589
381
Deposits by banks
(88)
100
12
(105)
468
363
Customer accounts:
Current accounts and
savings deposits
(69)
1,343
1,274
(458)
3,769
3,311
Time and other deposits
242
483
725
1,601
3,945
5,546
Debt securit
ies
in issue
(3)
239
236
258
1,940
2,198
Total interest bearing liab
il
it
ies
17
2,021
2,038
1,088
10,711
11,799
388
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Supplementary people informat
ion
Supplementary people informat
ion
Global
1
2024
2023
2022
% change
Full-time equivalent (FTE)
81,097
84,958
83,195
(4.5)
Headcount (year end)
81,145
85,007
83,266
(4.5)
Employed workers (permanent)
80,459
84,073
82,319
(4.3)
of which are women
36,217
37,598
37,259
(3.7)
Fixed-term workers (temporary)
686
934
947
(26.6)
of which are women
336
453
429
(25.8)
Non-employed workers (NEW)
13,667
12,537
13,962
9.0
Non-outsourced NEW
2
5,149
4,925
5,873
4.5
Outsourced NEW
3
8,518
7,612
8,089
11.9
Headcount (12-month average)
83,292
85,353
82,987
(2.4)
Men
FTE
43,653
45,993
44,709
(5.1)
Headcount
43,665
46,004
44,734
(5.1)
Full-time
43,615
45,975
44,683
(5.1)
Part-time
50
29
51
72.4
Women
FTE
36,518
38,014
37,642
(3.9)
Headcount
36,553
38,051
37,688
(3.9)
Full-time
36,410
37,926
37,551
(4.0)
Part-time
143
125
137
14.4
Undisclosed
4
FTE
926
950
844
(2.6)
Headcount
927
952
844
(2.6)
Full-time
921
944
843
(2.4)
Part-time
6
8
1
(25.0)
National
it
ies
133
129
131
3.1
Posit
ion type
2024
2023
2022
% change
Management Team
14
13
13
7.7
of which are women
6
7
6
(14.3)
of which are women (%)
42.9
53.8
46.2
(20.4)
Management Team and their direct reports
5
123
133
131
(7.5)
of which are women
42
48
43
(12.5)
of which are women (%)
34.1
36.1
32.8
(5.4)
Senior leadership
6
4,385
4,541
4,422
(3.4)
of which are women
1,453
1,474
1,420
(1.4)
of which are women (%)
33.1
32.5
32.1
2.1
Rest of employees
76,760
80,466
78,844
(4.6)
of which are women
35,100
36,577
36,268
(4.0)
of which are women (%)
45.7
45.5
46.0
0.6
of which have supervisory responsib
il
it
ies
9,912
11,009
11,067
(10.0)
of which are women
3,593
3,905
3,995
(8.0)
of which are women (%)
36.2
35.5
36.1
2.2
Business FTE
29,544
29,909
30,589
(1.2)
Business headcount
29,563
29,929
30,619
(1.2)
of which are women
15,331
15,335
15,794
(0.0)
Support services FTE
51,554
55,049
52,607
(6.3)
Support services headcount
51,582
55,078
52,647
(6.3)
of which are women
21,222
22,716
21,894
(6.6)
389
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Region
7
2024
2023
2022
% change
Asia FTE
67,911
71,097
69,329
(4.5)
Asia headcount
67,936
71,123
69,364
(4.5)
Asia women headcount
31,264
32,452
32,033
(3.7)
Asia employed workers headcount
67,452
70,394
68,585
(4.2)
Asia fixed-term workers headcount
484
729
779
(33.6)
Asia full-time headcount
67,819
71,051
69,257
(4.5)
Asia part-time headcount
117
72
107
62.5
Africa FTE
3,984
4,452
4,777
(10.5)
Africa headcount
3,985
4,453
4,777
(10.5)
Africa women headcount
2,085
2,333
2,497
(10.6)
Africa employed workers headcount
3,904
4,366
4,729
(10.6)
Africa fixed-term workers headcount
81
87
48
(6.9)
Africa full-time headcount
3,981
4,452
4,775
(10.6)
Africa part-time headcount
4
1
2
300.0
Middle East FTE
4,035
4,123
4,128
(2.1)
Middle East headcount
4,036
4,124
4,144
(2.1)
Middle East women headcount
1,430
1,433
1,421
(0.2)
Middle East employed workers headcount
3,978
4,066
4,084
(2.2)
Middle East fixed-term workers headcount
58
58
60
–
Middle East full-time headcount
4,036
4,122
4,142
(2.1)
Middle East part-time headcount
–
2
2
(100.0)
Americas FTE
1,077
1,154
1,090
(6.7)
Americas headcount
1,077
1,154
1,091
(6.7)
Americas women headcount
473
511
488
(7.4)
Americas employed workers headcount
1,077
1,154
1,091
(6.7)
Americas fixed-term workers headcount
–
–
–
–
Americas full-time headcount
1,076
1,153
1,088
(6.7)
Americas part-time headcount
1
1
3
–
Europe FTE
4,090
4,132
3,871
(1.0)
Europe headcount
4,111
4,153
3,890
(1.0)
Europe women headcount
1,301
1,322
1,249
(1.6)
Europe employed workers headcount
4,048
4,093
3,830
(1.1)
Europe fixed-term workers headcount
63
60
60
5.0
Europe full-time headcount
4,034
4,067
3,815
(0.8)
Europe part-time headcount
77
86
75
(10.5)
Age
2024
2023
2022
% change
< 30 years FTE
10,968
13,168
13,826
(16.7)
< 30 years headcount
10,973
13,176
13,836
(16.7)
< 30 years women headcount
5,775
6,848
7,397
(15.7)
30–50 years FTE
62,663
63,309
61,651
(1.0)
30–50 years headcount
62,689
63,334
61,691
(1.0)
30–50 years women headcount
27,433
27,432
26,870
0.0
> 50 years FTE
7,467
8,480
7,718
(11.9)
> 50 years headcount
7,483
8,497
7,739
(11.9)
> 50 years women headcount
3,345
3,771
3,421
(11.3)
390
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Supplementary people informat
ion
Talent management
8
2024
2023
2022
% change
Global voluntary turnover – FTE
7,491
8,200
12,645
(8.7)
Global turnover – FTE
10,505
9,712
14,388
8.2
Global voluntary turnover rate (%)
9.1
9.7
15.5
(6.7)
Global turnover rate (%)
12.7
11.5
17.6
10.5
Men turnover FTE
5,854
5,214
8,021
12.3
Men (%)
13.1
11.4
18.2
14.7
Women turnover FTE
4,546
4,394
6,230
3.5
Women (%)
12.3
11.6
16.8
6.0
Women as a % of global turnover FTE
43.3
45.2
43.3
(4.3)
Asia turnover FTE
8,780
8,293
12,501
5.9
Asia (%)
12.7
11.8
18.4
8.0
Africa turnover FTE
609
387
523
57.4
Africa (%)
14.7
8.6
10.8
71.5
Middle East turnover FTE
460
475
523
(3.1)
Middle East (%)
11.4
11.4
12.7
0.3
Americas turnover FTE
171
120
188
42.9
Americas (%)
15.1
10.5
17.8
44.1
Europe turnover FTE
485
438
653
10.7
Europe (%)
11.9
11.0
17.7
8.4
< 30 years turnover FTE
2,302
2,593
4,137
(11.2)
< 30 years (%)
19.6
19.2
30.5
2.3
30–50 years turnover FTE
7,067
6,242
9,303
13.2
30–50 years (%)
11.4
9.9
15.2
14.2
> 50 years turnover FTE
1,137
878
947
29.5
> 50 years (%)
13.3
11.0
13.1
21.3
Average tenure (years) – Men
7.8
7.3
7.1
6.8
Average tenure (years) – Women
8.4
7.9
7.6
6.3
Global new hires – FTE
9
7,176
12,145
17,432
(40.9)
Global new hire rate (%)
8.6
14.2
21.0
(39.5)
Men new hire FTE
3,777
6,875
9,683
(45.1)
Men (%)
8.4
14.9
21.7
(43.7)
Women new hire FTE
3,314
5,044
7,384
(34.3)
Women (%)
8.9
13.2
19.6
(32.5)
Women as a % of global new hires FTE
46.2
41.5
42.4
11.2
Asia new hire FTE
6,077
10,653
15,441
(43.0)
Asia (%)
8.7
14.9
22.4
(41.7)
Africa new hire FTE
202
236
463
(14.4)
Africa (%)
4.8
5.2
9.3
(7.0)
Middle East new hire FTE
381
379
471
0.5
Middle East (%)
9.3
9.0
11.3
4.3
Americas new hire FTE
77
156
180
(50.6)
Americas (%)
6.8
13.7
17.0
(50.2)
Europe new hire FTE
439
721
876
(39.0)
Europe (%)
10.7
17.8
23.3
(40.2)
< 30 years new hire FTE
3,109
4,963
7,673
(37.4)
< 30 years (%)
25.8
35.5
54.7
(27.3)
30–50 years new hire FTE
3,856
6,841
9,357
(43.6)
30–50 years (%)
6.2
10.8
15.2
(43.0)
> 50 years new hire FTE
211
341
401
(38.1)
> 50 years (%)
2.4
4.2
5.4
(41.9)
Roles filled internally (%)
9
45.7
32.3
37.3
41.6
of which filled by women (%)
40.7
41.6
41.0
(2.3)
Absenteeism rate
10
(%)
1.3
1.3
1.4
(1.5)
Employee job satisfact
ion (%)
81.0
83.0
80.0
(2.4)
391
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Learning
11
2024
2023
2022
% change
Employees receiv
ing tra
in
ing (%)
99.1
99.5
99.5
(0.4)
Employees receiv
ing tra
in
ing for personal development (%)
92.7
96.2
91.6
(3.7)
Women (%)
92.5
95.8
90.0
(3.4)
Senior leadership (%)
6
88.8
93.4
94.9
(4.9)
Average number of train
ing hours per employee
34.8
38.0
36.9
(8.5)
Women
33.8
37.0
35.4
(8.7)
Men
35.5
38.8
38.1
(8.4)
Employed workers
34.9
38.1
37.1
(8.4)
Fixed-term workers
25.0
33.3
21.9
(24.9)
Average cost of train
ing per employee ($)
12
702
730
743
(3.8)
Divers
ity
2024
2023
2022
% change
% of women who remained employed 12 months after their return from
parental leave
79.5
75.2
72.4
5.7
% of employees who remained employed by the company 12 months
after their return from parental leave
82.1
79.1
72.6
3.7
% of Information Technology (IT) and/or Engineer
ing roles filled by
women
13
24.4
24.2
24.0
0.7
% of senior leadership and managerial roles filled by women
6,14
35.3
34.6
35.0
1.9
% of middle management roles filled by women
14
36.2
35.5
36.1
2.0
% of non-managerial posit
ions filled by women
14
47.2
47.0
47.6
0.3
% of women total promotions
47.6
46.0
46.1
3.5
Executive and non-executive directors
15
Men
7
8
8
(12.5)
Women
5
5
6
–
% of men
58.3
61.5
57.1
(5.2)
% of women
41.7
38.5
42.9
8.3
White Brit
ish or other Wh
ite (includ
ing m
inor
ity-Wh
ite groups)
8
9
11
(11.1)
Asian/Asian Brit
ish
4
4
3
–
Black/African/Caribbean/Black Brit
ish
–
–
–
–
Mixed/multiple ethnic groups
–
–
–
–
Other ethnic group
–
–
–
–
White Brit
ish or other Wh
ite (includ
ing m
inor
ity-Wh
ite groups) (%)
66.7
69.2
78.6
(3.7)
Asian/Asian Brit
ish (%)
33.3
30.8
21.4
8.3
Black/African/Caribbean/Black Brit
ish (%)
0.0
0.0
0.0
–
Mixed/multiple ethnic groups (%)
0.0
0.0
0.0
–
Other ethnic group (%)
0.0
0.0
0.0
–
Number of senior posit
ions (CEO, CFO, SID and Cha
ir)
16
Men
3
3
3
–
Women
1
1
1
–
White Brit
ish or other Wh
ite (includ
ing m
inor
ity-Wh
ite groups)
4
4
4
–
Asian/Asian Brit
ish
–
–
–
–
Black/African/Caribbean/Black Brit
ish
–
–
–
–
Mixed/multiple ethnic groups
–
–
–
–
Other ethnic group
–
–
–
–
% of Board members who have a cultural background different from the
location of the corporate headquarters
17
91.7
84.6
71.4
8.3
Executive management
18
15
14
14
7.1
Men
9
7
8
28.6
Women
6
7
6
(14.3)
% of men
60.0
50.0
57.1
20.0
% of women
40.0
50.0
42.9
(20.0)
White Brit
ish or other Wh
ite (includ
ing m
inor
ity-Wh
ite groups)
6
5
6
20.0
Asian/Asian Brit
ish
6
6
6
–
Black/African/Caribbean/Black Brit
ish
1
1
1
–
392
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Supplementary people informat
ion
Divers
ity
2024
2023
2022
% change
Mixed/multiple ethnic groups
–
–
–
–
Not specif
ied/prefer not to say
1
2
1
(50.0)
Other ethnic group
1
–
–
–
White Brit
ish or other Wh
ite (includ
ing m
inor
ity-Wh
ite groups) (%)
40.0
35.7
42.9
12.0
Asian/Asian Brit
ish (%)
40.0
42.9
42.9
(6.7)
Black/African/Caribbean/Black Brit
ish (%)
6.7
7.1
7.1
(6.7)
Mixed/multiple ethnic groups (%)
0.0
0.0
0.0
–
Not specif
ied/prefer not to say (%)
6.7
14.3
7.1
(53.3)
Other ethnic group (%)
6.7
–
–
–
UK senior leadership
6, 19
(% declared)
UK Black ethnic
ity
2.5
2.5
2.5
0.4
UK ethnic minor
ity
28.4
27.8
26.4
2.1
US senior leadership
6, 19
(% declared)
US Black ethnic
ity
3.6
4.0
4.7
(10.2)
US Hispan
ic or Lat
inx ethnic
ity
10.9
10.1
9.9
7.7
Work-related Health & Safety
2024
2023
2022
change
Fatalit
ies
20
0
3
1
(100.0)
Fatalit
ies (rate per m
ill
ion hours worked)
20
0
0.030
0.010
(100.0)
Major in
juries
20,21,22,23
14
21
20
(33.3)
Major in
juries (rate per mill
ion hours worked)
20,24
0.08
0.11
0.11
(27.3)
Recordable work-related injuries
20,25
122
115
83
6.1
Recordable work-related injuries (rate per mill
ion hours worked)
20,24
0.68
0.59
0.44
15.3
Work-related ill-health (fatalit
ies)
–
–
–
–
Lost Time Injur
ies (rate per m
ill
ion hours worked)
24
0.13
Not reported
Not reported
–
1
Excludes 868 employees (headcount) from Dig
ital Ventures ent
it
ies (Appro, Audax, Cashenable, Furaha, Labamu, Letsbloom, L
ibeara, MyZoi, Solv Ghana, Solv
India, Solv Kenya, Solv Malaysia, TASConnect, Zodia Custody, Zodia Markets). Excludes 409 Person of Interest (headcount) following a recategorisat
ion of worker
types from 2022, i.e. independent non-executive directors, advisors, external auditors and regulators. Includes employees operating in discont
inued/restructured
businesses. Percentage change refers to the percentage change from 2023 to 2024. All figures above are presented to 1 decimal place and the corresponding
percentage changes are derived from actual data without rounding to 1 decimal place to remain as accurate as possible.
2
Non-outsourced NEWs are resources engaged on a time and materials basis where task selection and supervis
ion
is the responsib
il
ity of the Bank, such as
agency workers.
3
Outsourced NEWs are arrangements with a third party vendor where the delivery is based on a specif
ic serv
ice or outcome at an agreed price, irrespect
ive of the
number of resources required to perform the service. These resources are not considered as the Group’s headcount.
4
The disclosure of gender informat
ion
is not mandatory in some markets.
5
Management Team (MT) and colleagues who report to them, excluding admin
istrat
ive or executive support roles (personal assistant, business planning
managers).
6
Senior leadership is defined as Managing Directors and Bands 4 (includ
ing Management Team).
7
Region metrics are now aligned with the geographical regions and all prior periods data has been aligned with these geographical regions.
8
Turnover metrics are based on permanent employed workers only. New hire metrics are based on external new hires. Turnover and new hire metrics are based on
average 12-month FTE. These metrics are not shown for the undisclosed gender population due to a small population size. Overall turnover rate in 2024 is in an
upward trend, however the voluntary turnover has declined in 2024 compared with 2023.As voluntry turnover declined, the need for hir
ing reduced accord
ingly
compared with 2023, resulting in fewer new hires.
9
In 2024, the bank launched intervent
ions to dr
ive more headcount and vacancy disc
ipl
ine and increase our focus on an internal first hir
ing strategy, where
possible. The success of these intervent
ions saw a strong uptake
in redeploying the banks internal talent resulting in an 13 percentage point increase compared
to the prior year.
10
Represents health and disab
il
ity related absence. Excludes Korea.
11
Learning metrics exclude non-employed workers (NEWs). Train
ing for personal development
is defined as all train
ing exclud
ing mandatory or role specif
ic
train
ing. Average tra
in
ing hours (
includ
ing mandatory tra
in
ing) has been updated to
include self-declared external train
ing hours and pr
ior periods have been
restated for comparison. The strength of our learning agenda is reflected with 99.1% of our employees receiv
ing tra
in
ing
in 2024. Across the year, we have
consolidated learning programmes to more effectively and effic
iently del
iver skills and knowledge-build
ing to colleagues. We have further balanced learn
ing
campaigns with the ongoing changes in our operating models and transformation agenda. These actions have resulted in a reduction of the number of overall
train
ing hours per employee; and wh
ile the % of employees receiv
ing tra
in
ing for personal development also decl
ined from 2023, it continued to stay above
2022 trends.
12
Average cost of train
ing per employee
includes cost of learning management system.
13
Represents the % of Information Technology (IT) and/or Engineer
ing roles filled by women. IT and/or eng
ineer
ing roles
is defined as employees who work in the
IT job function, includ
ing Eng
ineer
ing roles (exclud
ing Innovation, Transformation & Ventures) and/or certain job famil
ies
in the Data and Analytics job function.
14
Represents the percentage of women that are in the respective population groups. For the purpose of this metric, managerial/middle management roles are
considered as roles which have people leader responsib
il
it
ies exclud
ing senior leadership. Non-managerial roles do not have people leader responsib
il
it
ies.
15
Executive and non-executive directors refer to the UK PLC Board. Data has been collected by way of the directors’ annual self-declarations.
16
For the purpose of this metric, senior posit
ions
in the Board include the Group Chairman, Group Chief Executive, Group Chief Financ
ial Officer and Sen
ior
Independent Director.
17
Percentage of Board Members whose cultural background is different from the location of the corporate headquarters (UK).
18
For the purpose of this metric, executive management refers to Management team plus Group Company Secretary as defined by UK List
ing Rules. Other Ethn
ic
Group : “All other ethnic groups excluding White, Asian, Black and Mixed”
19
Ethnic
ity % has been der
ived based on colleagues who have declared their ethnic
ity aga
inst the overall UK/US population respectively (includ
ing colleagues
who have not made a declaration).
20 2023 figures have been updated with 5 addit
ional
injuries and 1 contractor related fatality recorded in 2024 but occurred in 2023.
21
Per UK Health and Safety Executive defin
it
ion.
22 The most common type of major in
jury is fractures (57%).
23 2024 includes three contractor/vis
itors; 2023
includes 5 contractor/vis
itors; 2022
includes 1 contractor/vis
itor.
24 2024 hours worked 179,485,255; 2023 hours worked 192,870,120; 2022 hours worked 188,758,285.
25 2024 includes 20 contractor/vis
itors; 2023
includes 31 contractor/vis
itors; 2022
includes 18 contractors/vis
itor.
393
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Pillar
Key performance ind
icators
Period
Status
2024 progress update
Sustainable
Finance
Mobil
ise $300 b
ill
ion
in sustainable
finance¹
2021–
2030
Mobil
ised $121 b
ill
ion between January 2021 and
September 2024. Strong progress was made in 2024.
We antic
ipate that mob
il
isat
ion of sustainable finance
will not be linear and will likely increase over time as
the market matures and we help our clients transit
ion.
We remain on track for our overall target in 2030.
Pillar
Key performance ind
icators
Period
Status
2024 progress update
Operations
Net zero in our operations
(Scope 1 and 2 GHG emiss
ions)
2019–
2025
We reduced our Scope 1 and 2 emiss
ions by 28% dur
ing
2024 to 24,968 tCO
2
e. Our real estate (net internal area
2
)
decreased by 3.4% during that time.
The Group purchased and retired carbon credits for
our residual operational Scope 1 and 2 emiss
ions.
We remain on track for our overall 2025 target.
Increase renewable energy sourcing
to 100% by 2025 (RE100 compliant)
2022–
2025
77% of our electric
ity came from renewable sources across
our portfolio after matching consumption with renewable
energy certif
icates (RECs).
We continue to work towards purchasing renewable
energy in every country possible and are striv
ing to meet
our 100% RE100 target by 2025. However, due to market
constraints and lack of renewable energy options in some
markets with
in Afr
ica and the Middle East (for example,
Bahrain, Botswana, Ghana, Iraq and Tanzania), we may
not be able to meet our RE100 aspirat
ion. Desp
ite this,
we remain committed to the in
it
iat
ive, however,
acknowledging that market constraints may lim
it our
abil
ity to ach
ieve these goals in the short/mid-term,
financial or other constra
ints may reasonably prevent the
Group from taking all available steps to meet the target.
Divert 90% of waste from landfill
by 2030
2020–
2030
In 2024, we reduced our overall waste generated by 18%
and achieved 61% avoidance of landfill (up from 52%
in 2023).
Suppliers
Direct at least 50% of our total spend
3
with suppliers who have set science-
based emiss
ions reduct
ion targets
2023–
2027
New KPI added on supplier net zero engagement targets
to enable the Group to support vendors’ development
of sustainab
il
ity goals and allow the Group to be more
transparent on emiss
ions.
Financed
Emiss
ions
Achieve 2030 inter
im financed
emiss
ions reduct
ion in our highest
emitt
ing sectors
4
•
-29% in oil and gas (absolute) from
a 2020 baseline
•
-46–67% in power (production
intens
ity) from a 2021 basel
ine
•
-22–32% in steel (production intens
ity)
from a 2021 baseline
•
-85% emiss
ions reduct
ion in
thermal coal min
ing (absolute)
from a 2020 baseline
•
Mainta
in a 1.5°C compl
iant
production–intens
ity
in aluminum
from a 2021 baseline
•
Reduce our alignment delta in
shipp
ing to 0% from a 2021 basel
ine
•
-44–63% in automotive
manufacturers (physical intens
ity)
from a 2021 baseline
•
-22% in cement (production intens
ity)
from a 2021 baseline
2020/
2021–
2030
Progress on our net zero sector targets remains on
track with reductions in emiss
ions seen
in all sectors
year–on–year.
Reporting against our aviat
ion sector target was resumed
during the year following the sale of the aircraft leasing
business and the major
ity of the lend
ing portfolio during
the prior period.
For further details on our progress towards our inter
im net
zero targets please refer to page 80.
1. Mobil
ise susta
inable finance
2. Operational
ise
inter
im 2030 financed em
iss
ions targets to meet our 2050 net zero amb
it
ion
Supplementary sustainab
il
ity informat
ion
Sustainab
il
ity aspirat
ions
394
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Supplementary sustainab
il
ity informat
ion
Pillar
Key performance ind
icators
Period
Status
2024 progress update
•
-47–74% in commercial real estate
(production intens
ity) from a
2021 baseline
•
33% reduction in aviat
ion sector
physical intens
ity from a 2021 basel
ine
•
-15-23% in resident
ial mortgages
(production intens
ity) from a
2021 baseline
Set and disclose 2030 financed
emiss
ions targets for h
igh-emitt
ing
and carbon-intens
ive sectors
in line
with Net-Zero Banking Alliance
(NZBA) guidel
ines:
•
2024: Develop 2030 target for
agriculture to be communicated
in our 2024 Annual Report
2021–
2024
Targets have been set for agriculture, please refer to
page 80 for more informat
ion.
Facil
itated
Emiss
ions
Achieve 2030 inter
im fac
il
itated
emiss
ions reduct
ion in our highest
emitt
ing sector:
•
-27% in oil and gas (absolute) from
a 2021 baseline
2021–
2030
As part of our net zero roadmap and as announced at
our 2024 AGM, the Group has committed to set a
facil
itated em
iss
ions target. We have fulfilled th
is
commitment via setting a standalone absolute emiss
ion
facil
itated target for o
il and gas, which currently makes up
the majority of em
iss
ions w
ith
in our fac
il
itat
ion portfolio.
Please refer to page 88 for more informat
ion.
1
We define mobil
isat
ion of sustainable finance as any investment or financ
ial serv
ice provided to clients that supports: (i) the preservation and/or improvement of
biod
ivers
ity, nature or the environment; (i
i) the long-term avo
idance/decrease of GHG emiss
ions,
includ
ing the al
ignment of a client’s business and operations
with a 1.5°C trajectory (known as transit
ion finance); (
i
i
i) a social purpose; or (iv) incent
iv
ises our clients to meet their own sustainab
il
ity object
ives (known as
sustainab
il
ity-linked finance). It is a measure of total capital mobil
ised and cons
iders the total value being committed facil
it
ies provided.
2
The definit
ion used for measuring real estate is the net internal area (NIA) of our premises. Because the Group’s portfolio is constantly changing, divest
ing and
invest
ing accord
ing to business needs, NIA often varies between the start and end of an environmental year. Therefore, the NIA of a site is calculated by taking
the monthly average area (in square metres) over the entire environmental year. It does not consider the area that falls under ATM, bin collection points, cash
vault, warehouse, closed branch space and vacant space. NIA excludes common areas, such as build
ing corr
idors, common toilets, lift lobbies, lift shafts, lift motor
rooms, fire escape staircase, common rises, plant rooms, cleaner’s room, common pantries, telecommunicat
ions equ
ipment rooms and fuel stores.
3
Spend includes Scope 3, Category 1: Purchased Goods and Services and Capital Goods suppliers excluding non-addressable spend. Addressable spend is defined
as external costs incurred by Standard Chartered in the normal course of business where Supply Chain Management has influence over where the spend is
placed. It excludes costs such as government and brokerage fees, rates and taxes and employee expenses. It also excludes any Category 1 co-location data
centres which are calculated on energy use and reported separately under Scope 3.
4
Refer to the Group’s ‘Net Zero Methodological White Paper – The journey continues’ via
sc.com/sustainab
il
ityl
ibrary
and our Posit
ion Statements ava
ilable at
sc.com/posit
ionstatements
3. Enhance and deepen leadership with
in the susta
inab
il
ity ecosystem
Pillar
Key performance ind
icators
Period
Status
2024 progress update
Market
Integrity,
Trust,
Conduct and
Compliance
Partnering to lead the fight against
financial cr
imes:
•
Partic
ipat
ing in public–private
partnerships to contribute to
understanding most recent
developments, share intell
igence
and good practices
•
Contribute to developing typologies
and red flags for financial flows
Ongoing
Throughout 2024 the Group’s commitment to leading the
fight against financ
ial cr
ime was fostered through strong
industry and regulatory collaboration.
The Group continued posit
ive engagement w
ith
internat
ional and reg
ional standard-setters, such as
the Financ
ial Act
ion Task Force and Wolfsberg Group.
Across our geographic footprint we work in partnership
with regulators and industry associat
ions to
inform
and reform financial cr
ime legislat
ion and regulat
ion.
The Group promotes effective financ
ial cr
ime compliance
and risk ident
ification through part
ic
ipat
ion at financ
ial
crime conferences as speakers, panelists and subject
matter experts. Public–private partnerships to tackle
financial cr
ime remain a key focus of the Group, with
ongoing partic
ipat
ion to evolve exist
ing partnersh
ips
and provide support to countries and bodies seeking to
establish new informat
ion-shar
ing arrangements.
Develop and deliver a targeted
outreach programme, includ
ing through
key internat
ional platforms, a
imed at
safely and transparently reducing
barriers to capital mobil
isat
ion for
sustainable development
2022–
2024
The Group continued to proactively engage in policy
discuss
ions v
ia a number of major internat
ional and
regional platforms and conferences. Through these
activ
it
ies, the Group sought to promote robust policy
and regulatory frameworks to ensure the credib
il
ity
and integr
ity of susta
inable finance (includ
ing trans
it
ion
finance), and to support private capital mobil
isat
ion for
sustainable development.
Execution of at least 12 transactions by
2027 which are aligned with Standard
Chartered’s sustainab
il
ity themed
Innovation Hubs
2025–
2027
With the establishment of the Innovation Hubs, the KPI
was introduced to drive deal incubat
ion and ensure
impactful transactions that advance the sustainab
il
ity
ecosystem in our markets. Please refer to pages 66-68
for more informat
ion on the Innovat
ion Hubs.
2. Operational
ise
inter
im 2030 financed em
iss
ions targets to meet our 2050 net zero amb
it
ion
395
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Pillar
Key performance ind
icators
Period
Status
2024 progress update
People
We aspire to have 35 per cent
representation
5
of women at a global
senior level
6
by end of 2025
2016–
2025
Women leadership representation at the end of 2024 was
33.1%. We remain on track for our overall target in 2025.
Increase our Culture of Inclusion score
to 84.5%
7
2020–
2024
Our Inclusion Index score remains high with a score of
82.1% in 2024.
Though colleague sentiment dropped marginally in the
2024 annual My Voice survey (from 83.2% in 2023), the
experience of working at the bank remains a broadly
posit
ive one. More colleagues feel they can exerc
ise their
judgement when making decis
ions. Most feel treated w
ith
respect, combined with the abil
ity to choose a reasonable
balance between personal and work life and having
access to tools to execute their job. While the Group
missed its aspirat
ional 2024 Inclus
ion Index target of
84.5%, there has been a +5.14ppt overall increase in the
Inclusion Index since 2018.
Grow our employee My Voice score to
the question “The way we operate
day-to-day is aligned with our
sustainab
il
ity strategy” from 2021
baseline of 84% to 88%
2022–
2024
The 2024 My Voice data confirms the 2024 target of 88%
was not met. There was a 3ppt drop from 86% in 2023 to
83% in 2024.
Despite the My Voice sentiment causing us to miss our
target, the successes we have achieved in meeting all
of our ambit
ious external susta
inab
il
ity commitments to
date serve as proof points that we are executing on our
sustainab
il
ity strategy.
Communit
ies
Invest 0.75% of prior-year operating
profit (PYOP) in our communit
ies
Ongoing
Achieved 1.6% PYOP, refer to page 92 for addit
ional
details.
Enable and support a total of 140,000
decent jobs
8
through the following
breakdown:
•
70,000 jobs accessed by young
female partic
ipants employment
9
by 2030
•
70,000 direct jobs
10
enabled by
supported microbus
inesses by 2030
2024–
2030
New KPI added to reflect the new community impact
strategy and replace the communit
ies KPIs that were
achieved in 2023.
5
Subject to local legal requirements
6
Senior level refers to roles that are at least at the level of Executive Director (Band 4) and Managing Directors (Band 3) as of 31 December of each reporting year.
7
The ‘Culture of Inclusion’ score is based on several questions in the My Voice employee engagement survey that relate to different concepts of inclus
ion,
includ
ing
being respected and valued for contribut
ions, be
ing heard and involved in decis
ions, career development and opportun
it
ies, and work l
ife balance.
8
Decent jobs/employment: comprise formal employment and self-employment. ‘Decent’ aligns with the International Labour Organizat
ion (ILO) definit
ion, but in
recognit
ion of the challenges
in many markets to satisfy every criter
ia for ‘decent’, our Futuremakers
in
it
iat
ive counts those part
ic
ipants who have met m
in
imum
wage plus at least two addit
ional ILO cr
iter
ia.
9
Young female partic
ipants rema
in in decent employment six months post intervent
ion.
10 Direct jobs comprise of paid employment opportunit
ies (d
irect employees, active associates, contractors, support/gig workers, and the entrepreneurs themselves)
directly created by the supported microbus
inesses. These may be part-t
ime or full-time, with each job accounted for as a single unit. This KPI is based on actual
data collated from project alumni over the seven year period, estimates based on empir
ical research, and ex-post project evaluat
ions.
Concluded in the year
Ongoing aspirat
ions
Achieved
Not achieved
On track
Not on track
4. Drive social impact with our clients and communit
ies
396
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Shareholder informat
ion
Shareholder informat
ion
Div
idend and Interest Payment Dates
Ordinary Shares
Final Div
idend
Results and div
idend announced
21 February 2025
Ex-div
idend date
27 (UK) 26 (HK) March 2025
Record date for div
idend
28 March 2025
Last date to amend currency election instruct
ions for cash d
iv
idend*
24 April 2025
Div
idend payment date
19 May 2025
*
In either United States dollars, sterling or Hong Kong dollars
Preference Shares
1st half yearly div
idend
2nd half yearly div
idend
7
3
∕
8
per cent non-cumulative irredeemable preference shares of £1
1 April 2025
1 October 2025
8
1
∕
4
per cent non-cumulative irredeemable preference shares of £1 each
1 April 2025
1 October 2025
6.409 per cent non-cumulative redeemable preference shares of $5 each
30 January and 30 April 2025
30 July and 30 October 2025
7.014 per cent non-cumulative redeemable preference shares of $5 each
30 January 2025
30 July 2025
Annual General Meeting
The Annual General Meeting (AGM) will be held on Thursday,
8 May 2025 at 11.00am UK time (6.00pm Hong Kong time).
Further details regarding the format, location and business to
be transacted at the meeting will be disclosed with
in the 2025
Notice of AGM.
Details of voting at the Company’s AGM and of proxy votes cast can
be found on the Company’s website at
sc.com/agm
Interim results
The inter
im results w
ill be announced to the London Stock
Exchange and the Stock Exchange of Hong Kong Lim
ited
and put on the Company’s website.
Country-by-Country Reporting
In accordance with the requirements of the Capital
Requirements (Country-by-Country Reporting) Regulations
2013, the Group will publish addit
ional country-by-country
informat
ion
in respect of the year ended 31 December 2024,
on or before 31 December 2025. We have also published our
UK Tax Strategy.
This informat
ion w
ill be available on the Group’s website at
sc.com
Pillar 3 Reporting
In accordance with the Pillar 3 disclosure requirements, the
Group will publish the Pillar 3 Disclosures in respect of the year
ended 31 December 2024, on or before 21 February 2025.
This informat
ion w
ill be available on the Group’s website at
sc.com
ShareCare
ShareCare is available to shareholders on the Company’s UK
register who have a UK address and bank account. It allows
you to hold your Standard Chartered PLC shares in a nominee
account. Your shares will be held in electronic form so you will
no longer have to worry about keeping your share certif
icates
safe. If you join ShareCare, you w
ill still be inv
ited to attend
the Company’s AGM and you will receive any div
idend at
the same time as everyone else. ShareCare is free to jo
in and
there are no annual fees to pay.
If you would like to receive more informat
ion, please v
is
it
sc.com/sharecare
or contact the shareholder helpline on
0370 702 0138
Donating shares to ShareGift
Shareholders who have a small number of shares often find
it uneconomical to sell them. An alternative is to consider
donating them to the charity ShareGift (registered charity
1052686), which collects donations of unwanted shares until
there are enough to sell and uses the proceeds to support UK
charit
ies. There
is no impl
icat
ion for capital gains tax (no gain
or loss) when you donate shares to charity and UK taxpayers
may be able to claim income tax relief on the value of
their donation.
Further informat
ion can be obta
ined from the Company’s registrars
or from ShareGift on
020 7930 3737
or from
sharegift.org
Bankers’ Automated Clearing System (BACS)
Div
idends can be pa
id straight into your bank or build
ing
society account.
Please register online at
investorcentre.co.uk
or contact our
registrar for a div
idend mandate form
Registrars and shareholder enquir
ies
If you have any enquir
ies relat
ing to your shareholding and
you hold your shares on the UK register, please contact our
registrar at investorcentre.co.uk/contactus. Alternatively,
please contact Computershare Investor Services PLC, The
Pavil
ions, Br
idgwater Road, Bristol, BS99 6ZZ or call the
shareholder helpline number on 0370 702 0138. If you hold
your shares on the Hong Kong branch register and you have
enquir
ies, please contact Computershare Hong Kong Investor
Services Lim
ited, 17M Floor, Hopewell Centre, 183 Queen’s
Road East, Wan Chai, Hong Kong.
You can check your shareholding at
computershare.com/hk/investors
Substantial shareholders
The Company and its shareholders have been granted partial
exemption from the disclosure requirements under Part XV of
the Securit
ies and Futures Ord
inance (SFO). As a result of this
exemption, shareholders, directors and chief executives, no
longer have an obligat
ion under Part XV of the SFO (other
than Div
is
ions 5, 11 and 12 thereof) to notify the Company
of substantial shareholding interests, and the Company is
no longer required to mainta
in a reg
ister of interests of
substantial shareholders under section 336 of the SFO, nor
a register of directors’ and chief executives’ interests under
section 352 of the SFO. The Company is, however, required
to file with The Stock Exchange of Hong Kong Lim
ited any
disclosure of interests made in the UK.
397
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Taxation
No tax is currently withheld from payments of div
idends by
Standard Chartered PLC. Shareholders and prospective
purchasers should consult an appropriate independent
professional adviser regarding the tax consequences of an
investment in shares in light of their particular circumstances,
includ
ing the effect of any nat
ional, state or local laws.
Chinese translation
If you would like a Chinese language version of the 2024
Annual Report, please contact Computershare Hong Kong
Investor Services Lim
ited, 17M Floor, Hopewell Centre, 183
Queen’s Road East, Wan Chai, Hong Kong.
二〇二四年年報之中文譯本可向香港中央證券登記有限公司索取,
地址：香港灣仔皇后大道東183號合和中心17M樓。
Shareholders on the Hong Kong branch register who have
asked to receive corporate communicat
ions
in either
Chinese or English can change this election by contacting
Computershare. If there is a dispute between any translation
and the English version of this Annual Report, the English text
shall prevail.
Electronic communicat
ions
If you hold your shares on the UK register and in future you
would like to receive the Annual Report electronically rather
than by post, please register online at: investorcentre.co.uk.
Click on ‘register now’ and follow the instruct
ions. You w
ill need
to have your Shareholder or ShareCare reference number to
hand. You can find this on your share certif
icate or ShareCare
statement. Once you have registered and confirmed your
email communicat
ion preference, you w
ill receive future
notif
icat
ions via email enabling you to submit your proxy vote
online. In addit
ion, as a member of Investor Centre, you w
ill be
able to manage your shareholding online and change your
bank mandate or address informat
ion.
Important notices
Forward-looking statements
The informat
ion
included in this document may contain
‘forward-looking statements’ based upon current
expectations or beliefs as well as statements formulated
with assumptions about future events. Forward-looking
statements include, without lim
itat
ion, project
ions, est
imates,
commitments, plans, approaches, ambit
ions and targets
(includ
ing, w
ithout lim
itat
ion, ESG commitments, ambit
ions
and targets). Forward-looking statements often use words
such as ‘may’, ‘could’, ‘will’, ‘expect’, ‘intend’, ‘estimate’,
‘antic
ipate’, ‘bel
ieve’, ‘plan’, ‘seek’, ‘aim’, ‘continue’ or other
words of sim
ilar mean
ing to any of the foregoing. Forward-
looking statements may also (or addit
ionally) be
ident
ified
by the fact that they do not relate only to histor
ical or
current facts.
By their very nature, forward-looking statements are subject
to known and unknown risks and uncertaint
ies and other
factors that could cause actual results, and the Group’s plans
and objectives, to d
iffer materially from those expressed or
impl
ied
in the forward-looking statements. Readers should
not place reliance on, and are cautioned about relying on,
any forward-looking statements.
There are several factors which could cause the Group’s actual
results and its plans and object
ives to d
iffer materially from
those expressed or impl
ied
in forward-looking statements.
The factors include (but are not lim
ited to): changes
in global,
polit
ical, econom
ic, business, competit
ive and market forces or
condit
ions, or
in future exchange and interest rates; changes
in environmental, geopolit
ical, soc
ial or physical risks; legal,
regulatory and policy developments, includ
ing regulatory
measures addressing climate change and broader
sustainab
il
ity-related issues; the development of standards
and interpretat
ions,
includ
ing evolv
ing requirements and
practices in ESG reporting; the abil
ity of the Group, together
with governments and other stakeholders to measure,
manage, and mit
igate the
impacts of climate change and
broader sustainab
il
ity-related issues effectively; risks aris
ing
out of health crises and pandemics; risks of cyber-attacks,
data, informat
ion or secur
ity breaches or technology failures
involv
ing the Group; changes
in tax rates or policy; future
business combinat
ions or d
ispos
it
ions; and other factors
specif
ic to the Group,
includ
ing those
ident
ified
in this Annual
Report and financial statements of the Group. To the extent
that any forward-looking statements contained in this
document are based on past or current trends and/or
activ
it
ies of the Group, they should not be taken as a
representation that such trends or activ
it
ies will continue
in the future.
No statement in this document is intended to be, nor should
be interpreted as, a profit forecast or to imply that the
earnings of the Group for the current year or future years
will necessarily match or exceed the histor
ical or publ
ished
earnings of the Group. Each forward-looking statement
speaks only as of the date that it is made. Except as required
by any applicable laws or regulations, the Group expressly
discla
ims any obl
igat
ion to rev
ise or update any forward-
looking statement contained with
in th
is document, regardless
of whether those statements are affected as a result of new
informat
ion, future events or otherw
ise.
Please refer to this Annual Report and the financ
ial
statements of the Group for a discuss
ion of certa
in of the
risks and factors that could adversely impact the Group’s
actual results, and cause its plans and object
ives, to
differ materially from those expressed or impl
ied
in any
forward looking statements.
Non-IFRS performance measures and
alternative performance measures
The Group financial statements have been prepared
in
accordance with UK-adopted internat
ional account
ing
standards and International Financ
ial Report
ing Standards
(IFRS) as adopted by the European Union. Standard
Chartered PLC’s financial statements have been prepared
in accordance with UK-adopted internat
ional account
ing
standards (IAS) as applied in conformity with section 408
of the Companies Act 2006. This document may contain
financial measures and rat
ios not specif
ically defined under
IFRS or IAS and/or alternative performance measures as
defined in the European Securit
ies and Market Author
ity
guidel
ines. Such measures may exclude certa
in items
which management believes are not representative of the
underlying performance of the business and which distort
period-on-period comparison. These measures are not a
substitute for IAS or IFRS measures and are based on a
number of assumptions that are subject to uncertaint
ies
and change. Please refer to this Annual Report and the
financial statements of the Group for further
informat
ion,
includ
ing reconc
il
iat
ions between the underlying and
reported measures.
398
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Shareholder informat
ion
Financ
ial
instruments
Nothing in this document shall constitute, in any jur
isd
ict
ion,
an offer or solic
itat
ion to sell or purchase any securit
ies or
other financial
instruments, nor shall it constitute a
recommendation or advice in respect of any securit
ies or
other financial
instruments or any other matter.
Basis of Preparation and Caution Regarding
Data Lim
itat
ions
This section is specif
ically relevant to, amongst others,
the sustainab
il
ity and climate models, calculations and
disclosures throughout this report. The informat
ion conta
ined
in this document has been prepared on the following basis:
i.
disclosures in the Strategic report, Financ
ial rev
iew,
Sustainab
il
ity review, Directors’ report, Risk review and
Capital review and Supplementary informat
ion are
unaudited unless otherwise stated;
i
i.
all informat
ion, pos
it
ions and statements set out
in this
document are subject to change without notice;
i
i
i.
the informat
ion
included in this document does not
constitute any investment, accounting, legal, regulatory
or tax advice or an inv
itat
ion or recommendation to enter
into any transaction;
iv.
the informat
ion
included in this document may have been
repaired using models, methodologies and data which are
subject to certain lim
itat
ions. These lim
itat
ions include: the
lim
ited ava
ilab
il
ity of reliable data, data gaps, and the
nascent nature of the methodologies and technologies
underpinn
ing th
is data; the lim
ited standard
isat
ion of
data (given, amongst other things, lim
ited
internat
ional
coordinat
ion on data and methodology standards);
and future uncertainty (due, amongst other things,
to changing project
ions relat
ing to technological
development and global and regional laws, regulations
and polic
ies, and the current
inab
il
ity to make use of
strong histor
ical data);
v.
models, external data and methodologies used in
informat
ion
included in this document are or could be
subject to adjustment which is beyond our control;
vi. any opin
ions and est
imates should be regarded as
ind
icat
ive, prelim
inary and for
illustrat
ive purposes only.
Expected and actual outcomes may differ from those set
out in this document (as explained in the “Forward-looking
statements” section above);
vi
i. some of the related
informat
ion appear
ing in this
document may have been obtained from public and other
sources and, while the Group believes such informat
ion
to be reliable, it has not been independently verif
ied by
the Group and no representation or warranty is made
by the Group as to its quality, completeness, accuracy,
fitness for a particular purpose or noninfr
ingement of
such informat
ion;
vi
i
i. for the purposes of the informat
ion
included in this
document, a number of key judgements and assumptions
have been made. It is possible that the assumptions
drawn, and the judgement exercised may subsequently
turn out to be inaccurate. The judgements and data
presented in this document are not a substitute for
judgements and analysis made independently by
the reader;
ix. any opin
ions or v
iews of third parties expressed in this
document are those of the third parties ident
ified, and not
of the Group, its affil
iates, d
irectors, officers, employees or
agents. By incorporating or referring to opin
ions and v
iews
of third parties, the Group is not, in any way, endorsing or
supporting such opin
ions or v
iews;
x.
while the Group bears primary responsib
il
ity for the
informat
ion
included in this document, it does not accept
responsib
il
ity for the external input provided by any third
parties for the purposes of developing the informat
ion
included in this document;
xi. the data contained in this document reflects available
informat
ion and est
imates at the relevant time;
xi
i. where the Group has used any methodology or tools
developed by a third party, the applicat
ion of the
methodology or tools (or consequences of its applicat
ion)
shall not be interpreted as conflict
ing w
ith any legal or
contractual obligat
ions and such legal or contractual
obligat
ions shall take precedence over the appl
icat
ion
of the methodology or tools;
xi
i
i. where the Group has used any underlying data provided
or sourced by a third party, the use of the data shall not
be interpreted as conflict
ing w
ith any legal or contractual
obligat
ions and such legal or contractual obl
igat
ions shall
take precedence over the use of the data;
xiv. this Important Notice is not lim
ited
in applicab
il
ity to
those sections of the document where lim
itat
ions to data,
metrics and methodologies are ident
ified and where th
is
Important Notice is referenced. This Important Notice
applies to the whole document;
xv. further development of reporting, standards or other
princ
iples could
impact the informat
ion
included in this
document or any metrics, data and targets included in
this document (it being noted that ESG reporting and
standards are subject to rapid change and development);
and
xvi. while all reasonable care has been taken in preparing the
informat
ion
included in this document, neither the Group
nor any of its affil
iates, d
irectors, officers, employees or
agents make any representation or warranty as to its
quality, accuracy or completeness, and they accept
no responsib
il
ity or liab
il
ity for the contents of this
informat
ion,
includ
ing any errors of fact, om
iss
ion or
opin
ion expressed. You are adv
ised to exercise your
own independent judgement (with the advice of your
professional advisers as necessary) with respect to the
risks and consequences of any matter contained in
this document.
The Group, its affil
iates, d
irectors, officers, employees or
agents expressly discla
im any l
iab
il
ity and responsib
il
ity
for any decis
ions or act
ions which you may take and for any
damage or losses you may suffer from your use of or reliance
on the informat
ion conta
ined in this document.
Copyright in all materials, text, articles and informat
ion
contained in this document (other than third party materials,
text, articles and informat
ion)
is the property of, and may only
be reproduced with permiss
ion of an author
ised signatory of,
the Group.
Copyright in materials, text, articles and informat
ion created
by third parties and the rights under copyright of such parties
are hereby acknowledged. Copyright in all other materials not
belonging to third parties and copyright in these materials as
a compilat
ion vests and shall rema
in at all times copyright of
the Group and should not be reproduced or used except for
business purposes on behalf of the Group or save with the
express prior written consent of an authorised signatory of
the Group.
All rights reserved.
399
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Glossary
AT1 or Addit
ional T
ier 1 capital
Addit
ional T
ier 1 capital consists of
instruments other than Common
Equity Tier 1 that meet the Capital
Requirements Regulation (as it forms
part of UK domestic law) criter
ia for
inclus
ion
in Tier 1 capital.
Addit
ional value adjustment
See Prudent valuation adjustment.
Advanced Internal Rating
Based (AIRB) approach
The AIRB approach under the Basel
framework is used to calculate credit
risk capital based on the Group’s own
estimates of prudential parameters.
Alternative performance
measures
A financial measure of h
istor
ical or
future financial performance, financial
posit
ion, or cash flows, other than a
financial measure defined or spec
if
ied
in the applicable financ
ial report
ing
framework.
ASEAN
Associat
ion of South East As
ian
Nations (ASEAN) which includes the
Group’s operations in Brunei, Indonesia,
Malaysia, Phil
ipp
ines, Singapore,
Thailand and Vietnam.
AUM or Assets under
management
Total market value of assets such as
deposits, securit
ies and funds held by
the Group on behalf of the clients.
Basel II
The capital adequacy framework issued
by the Basel Committee on Banking
Supervis
ion (BCBS)
in June 2006 in the
form of the International Convergence
of Capital Measurement and Capital
Standards.
Basel III
The global regulatory standards on
bank capital adequacy and liqu
id
ity,
orig
inally
issued in December 2010 and
updated in June 2011. In December 2017,
the BCBS published a document setting
out the finalisat
ion of the Basel III
framework. The latest requirements
issued in December 2017 have been
implemented from 2022.
BCBS or Basel Committee on
Banking Supervis
ion
A forum on banking supervisory matters
which develops global supervisory
standards for the banking industry. Its
members are officials from 45 central
banks or prudential supervisors from
27 countries and territor
ies.
Basic earnings per share (EPS)
Represents earnings div
ided by the
basic weighted average number
of shares.
Basis point (bps)
One hundredth of a per cent (0.01
per cent); 100 basis points is 1 per cent.
CRD or Capital Requirements
Direct
ive
A capital adequacy legislat
ive package
adopted by the PRA. CRD comprises the
Capital Requirements Direct
ive and the
UK onshored Capital Requirements
Regulation (CRR). The package
implements the Basel III framework
together with transit
ional arrangements
for some of its requirements. CRD IV
came into force on 1 January 2014. The
EU CRR II and CRD V amending the
exist
ing package came
into force in
June 2019 with most changes starting
to apply from 28 June 2021. Only those
parts of the EU CRR II that applied on or
before 31 December 2020, when the UK
was a member of the EU, have been
implemented. The PRA recently final
ised
the UK’s version of the CRR II for
implementat
ion on 1 January 2022.
Capital-lite income
Income derived from products with low
RWA consumption or products which
are non-funding in nature.
Capital resources
Sum of Tier 1 and Tier 2 capital after
regulatory adjustments.
CGU or Cash-generating unit
The smallest ident
ifiable group of assets
that generates cash inflows that are
largely independent of the cash inflows
from other assets or groups of assets.
Cash shortfall
The difference between the cash flows
that are due in accordance with the
contractual terms of the instrument and
the cash flows that the Group expects
to receive over the contractual life of
the instrument.
Clawback
An amount an ind
iv
idual is required
to pay back to the Group, which has
to be returned to the Group under
certain circumstances.
Commercial real estate
Includes office build
ings,
industr
ial
property, medical centres, hotels, malls,
retail stores, shopping centres, farm
land, multi-family housing build
ings,
warehouses, garages, and industr
ial
properties. Commercial real estate
loans are those backed by a package
of commercial real estate assets.
CET1 or Common Equity Tier 1
capital
Common Equity Tier 1 capital consists
of the common shares issued by the
Group and related share premium,
retained earnings, accumulated other
comprehensive income and other
disclosed reserves, elig
ible non-
controlling interests and regulatory
adjustments required in the calculation
of Common Equity Tier 1.
CET1 ratio
A measure of the Group’s CET1 capital
as a percentage of risk-weighted assets.
Contractual maturity
Contractual maturity refers to the final
payment date of a loan or other
financial
instrument, at which point all
the remain
ing outstand
ing princ
ipal
and interest is due to be paid.
Countercyclical capital buffer
The countercyclical capital buffer
(CCyB) is part of a set of
macroprudential instruments, designed
to help counter procyclical
ity
in the
financial system. CCyB as defined
in
the Basel III standard provides for an
addit
ional cap
ital requirement of up to
2.5 per cent of risk-weighted assets in a
given jur
isd
ict
ion. The Bank of England’s
Financ
ial Pol
icy Committee has the
power to set the CCyB rate for the
United Kingdom. Each bank must
calculate its ‘inst
itut
ion-specif
ic’ CCyB
rate, defined as the weighted average
of the CCyB rates in effect across the
jurisd
ict
ions
in which it has credit
exposures. The inst
itut
ion-specif
ic CCyB
rate is then applied to a bank’s total
risk-weighted assets.
400
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Glossary
Counterparty credit risk
The risk that a counterparty defaults
before satisfy
ing
its obligat
ions under
a derivat
ive, a secur
it
ies financing
transaction (SFT) or a sim
ilar contract.
CCF or Credit conversion factor
An estimate of the amount the Group
expects a customer to have drawn
further on a facil
ity l
im
it at the po
int
of default. This is either prescribed by
CRR or modelled by the bank.
CDS or Credit default swaps
A credit derivat
ive
is an arrangement
whereby the credit risk of an asset (the
reference asset) is transferred from the
buyer to the seller of protection. A credit
default swap is a contract where the
protection seller receives premium or
interest-related payments in return for
contracting to make payments to the
protection buyer upon a defined credit
event. Credit events normally include
bankruptcy, payment default on
a reference asset or assets, or
downgrades by a rating agency.
Climate Risk Assessment (CRA)
The CRA is an internal assessment
conducted on in-scope corporate clients
to ident
ify cl
imate risks, across Physical
and Transit
ion r
isks, that may lead to
addit
ional cred
it risks for the Group.
The assessment is conducted across
four sections, using Group’s in house
methodology as well as client public
disclosures. The CRA produces a BRAG
score ind
icat
ing the level of climate
risk of an entity and is supported by
long-form analysis of the drivers of
this score.
Credit inst
itut
ions
An inst
itut
ion whose business is to
receive deposits or other repayable
funds from the public and to grant
credits for its own account.
Credit risk mit
igat
ion
Credit risk mit
igat
ion is a process to
mit
igate potent
ial credit losses from any
given account, customer or portfolio by
using a range of tools such as collateral,
netting agreements, credit insurance,
credit derivat
ives and guarantees.
Credible Transit
ion Plan (CTP)
A credible climate transit
ion plan
is a
time-bound, action plan that clearly
outlines how a company will invest in
or pivot exist
ing assets, operat
ions,
and entire business model towards a
trajectory that aligns with the most
ambit
ious cl
imate science.
CVA or Credit valuation
adjustments
An adjustment to the fair value of
derivat
ive contracts that reflects the
possib
il
ity that the counterparty may
default such that the Group would
not receive the full market value of
the contracts.
Customer accounts
Money deposited by all ind
iv
iduals
and companies which are not credit
inst
itut
ions includ
ing secur
it
ies sold
under repurchase agreement (see repo/
reverse repo). Such funds are recorded
as liab
il
it
ies
in the Group’s balance sheet
under customer accounts.
Days past due
One or more days that interest and/or
princ
ipal payments are overdue based
on the contractual terms.
DVA or Debit valuation
adjustment
An adjustment to the fair value of
derivat
ive contracts that reflects the
possib
il
ity that the Group may default
and not pay the full market value of
contracts.
Debt securit
ies
Debt securit
ies are assets on the Group’s
balance sheet and represent certif
icates
of indebtedness of credit inst
itut
ions,
public bodies or other undertakings
excluding those issued by central banks.
Debt securit
ies
in issue
Debt securit
ies
in issue are transferable
certif
icates of
indebtedness of the
Group to the bearer of the certif
icate.
These are liab
il
it
ies of the Group and
include certif
icates of depos
its.
Deferred tax asset
Income taxes recoverable in future
periods in respect of deductible
temporary differences between the
accounting and tax base of an asset or
liab
il
ity that will result in tax deductible
amounts in future periods, the carry-
forward of tax losses or the carry-
forward of unused tax credits.
Deferred tax liab
il
ity
Income taxes payable in future periods
in respect of taxable temporary
differences between the accounting
and tax base of an asset or liab
il
ity
that will result in taxable amounts in
future periods.
Default
Financ
ial assets
in default represent
those that are at least 90 days past
due in respect of princ
ipal or
interest
and/or where the assets are otherwise
considered to be unlikely to pay,
includ
ing those that are cred
it-impa
ired.
Defined benefit obligat
ion
The present value of expected future
payments required to settle the
obligat
ions of a defined benefit scheme
resulting from employee service.
Defined benefit scheme
Pension or other post-retirement
benefit scheme other than a defined
contribut
ion scheme.
Defined contribut
ion scheme
A pension or other post-retirement
benefit scheme where the employer’s
obligat
ion
is lim
ited to
its contribut
ions
to the fund.
Delinquency
A debt or other financial obl
igat
ion
is considered to be in a state of
delinquency when payments are
overdue. Loans and advances are
considered to be delinquent when
consecutive payments are missed.
Also known as arrears.
Deposits by banks
Deposits by banks comprise amounts
owed to other domestic or foreign credit
inst
itut
ions by the Group includ
ing
securit
ies sold under repo.
Diluted earnings per share (EPS)
Represents earnings div
ided by the
weighted average number of shares
that would have been outstanding
assuming the conversion of all dilut
ive
potential ordinary shares.
Div
idend per share
Represents the entitlement of each
shareholder in the share of the profits
of the Company. Calculated in the
lowest unit of currency in which the
shares are quoted.
Early alert, purely and non-
purely precautionary
A borrower’s account which exhib
its r
isks
or potential weaknesses of a material
nature requir
ing closer mon
itor
ing,
supervis
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 likel
ihood
of being downgraded to credit grade 12
or worse. When an account is on early
alert, it is classif
ied as e
ither purely
precautionary or non-purely
precautionary. A purely precautionary
account is one that exhib
its early alert
characterist
ics, but these do not present
any imm
inent cred
it concern. If the
symptoms present an imm
inent cred
it
concern, an account will be considered
for classif
icat
ion as non-purely
precautionary.
401
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Effective tax rate
The tax on profit/ (losses) on ordinary
activ
it
ies as a percentage of profit/
(loss) on ordinary activ
it
ies before
taxation.
Encumbered assets
On-balance sheet assets pledged or
used as collateral in respect of certain
of the Group’s liab
il
it
ies.
EU or European Union
The European Union (EU) is a polit
ical
and economic union of 27 member
states that are located primar
ily
in Europe.
Eurozone
Represents the 19 EU countries that
have adopted the euro as their
common currency.
ECL or Expected credit loss
Represents the present value of
expected cash shortfalls over the
residual term of a financ
ial asset,
undrawn commitment or financ
ial
guarantee. This comprises ECL
generated by the models, management
judgements and ind
iv
idually assessed
credit impa
irment prov
is
ions.
Expected loss
The Group measure of antic
ipated
loss for exposures captured under an
internal ratings-based credit risk
approach for capital adequacy
calculations. It is measured as the
Group-modelled view of antic
ipated
loss based on probabil
ity of default, loss
given default and exposure at default,
with a one-year time horizon.
Exposures
Credit exposures represent the amount
lent to a customer, together with any
undrawn commitments.
EAD or Exposure at default
The estimat
ion of the extent to wh
ich
the Group may be exposed to a
customer or counterparty in the event of,
and at the time of, that counterparty’s
default. At default, the customer may
not have drawn the loan fully or may
already have repaid some of the
princ
ipal, so that exposure
is typically
less than the approved loan lim
it.
ECAI or External Credit
Assessment Institut
ion
External credit ratings are used to assign
risk-weights under the standardised
approach for sovereigns, corporates
and inst
itut
ions. The external ratings
are from credit rating agencies that are
registered or certif
ied
in accordance
with the credit rating agencies
regulation or from a central bank
issu
ing cred
it ratings which is exempt
from the applicat
ion of th
is regulation.
ESG
Environmental, Social and Governance.
FCA or Financ
ial Conduct
Authority
The Financ
ial Conduct Author
ity
regulates the conduct of financial firms
and, for certain firms, prudential
standards in the UK. It has a strategic
objective to ensure that the relevant
markets function well.
Facil
itated Em
iss
ions
Facil
itated em
iss
ions refer to the
greenhouse gas emiss
ions that result
from the facil
itat
ion of financ
ial
transactions by financ
ial
inst
itut
ions.
Financed Emiss
ions
Financed emiss
ions are the em
iss
ions
attributed to a financ
ial
inst
itut
ion when
financing a cl
ient.
Forborne – not impa
ired loans
Loans where the contractual terms
have been modif
ied due to financial
diff
icult
ies of the borrower, but the
loan is not considered to be impa
ired.
See ‘Forbearance’.
Forbearance
Forbearance takes place when a
concession is made to the contractual
terms of a loan in response to an
obligor’s financ
ial d
iff
icult
ies. The Group
classif
ies such mod
if
ied loans as e
ither
‘Forborne – not impa
ired loans’ or ‘Loans
subject to forbearance – impa
ired’.
Once a loan is categorised as either of
these, it will remain in one of these two
categories until the loan matures or
satisf
ies the ‘cur
ing’ condit
ions descr
ibed
in Note 8 to the financ
ial statements.
Forborne – not impa
ired loans
Loans where the contractual terms
have been modif
ied due to financial
diff
icult
ies of the borrower, but the
loan is not considered to be impa
ired.
See ‘Forbearance’.
Funded/unfunded exposures
Exposures where the notional amount
of the transaction is funded or
unfunded. Represents exposures where
a commitment to provide future funding
is made but funds have been released/
not released.
FVA or Funding valuation
adjustments
FVA reflects an adjustment to fair value
in respect of derivat
ive contracts that
reflects the funding costs that the
market partic
ipant would
incorporate
when determin
ing an ex
it price.
G-SIBs or Global Systemically
Important Banks
Global banking financ
ial
inst
itut
ions
whose size, complexity and systemic
interconnectedness mean that their
distress or failure would cause sign
ificant
disrupt
ion to the w
ider financ
ial system
and economic activ
ity. The l
ist of
G-SIBs is assessed under a framework
established by the FSB and the BCBS.
In the UK, the G-SIB framework is
implemented via the CRD and G-SIBs
are referred to as Global Systemically
Important Institut
ions (G-SIIs).
G-SIB buffer
A CET1 capital buffer which results from
designat
ion as a G-SIB. The G-SIB buffer
is between 1 per cent and 3.5 per cent,
depending on the allocation to one
of five buckets based on the annual
scoring. In the UK, the G-SIB buffer is
implemented via the CRD as Global
Systemically Important Institut
ions
(G-SII) buffer requirement.
Green and Sustainable
Product Framework
Sets out underlying elig
ible qual
ify
ing
themes and activ
it
ies that may be
considered ESG .This has been
developed with the support of
external experts, has been informed
by industry and supervisory princ
iples
and standards such as the Green
Bond Princ
iples and EU Taxonomy
for sustainable activ
it
ies.
Hong Kong regional hub
Standard Chartered Bank (Hong Kong)
Lim
ited and
its subsid
iar
ies includ
ing
the primary operating entit
ies
in China,
Korea and Taiwan. Standard Chartered
PLC is the ultimate parent company
of Standard Chartered Bank (Hong
Kong) Lim
ited.
Interest rate risk
The risk of an adverse impact on the
Group’s income statement due to
changes in interest rates.
IRB or internal ratings-based
approach
Risk-weight
ing methodology
in
accordance with the Basel Capital
Accord where capital requirements
are based on a firm’s own estimates
of prudential parameters.
Internal model approach
The approach used to calculate market
risk capital and RWA with an internal
market risk model approved by the PRA
under the terms of CRD/CRR.
Supplementary informat
ion
Glossary
402
Standard Chartered
– Annual Report 2024
IAS or International
Accounting Standard
A standard that forms part of the
International Financ
ial Report
ing
Standards framework.
IASB or International
Accounting Standards Board
An independent standard-setting body
responsible for the development and
publicat
ion of IFRS, and approv
ing
interpretat
ions of IFRS standards
that are recommended by the IFRS
Interpretations Committee (IFRIC).
IFRS or International Financ
ial
Reporting Standards
A set of internat
ional account
ing
standards developed and issued by the
International Accounting Standards
Board, consist
ing of pr
inc
iples-based
guidance contained with
in IFRSs and
IASs. All companies that have issued
publicly traded securit
ies
in the EU are
required to prepare annual and inter
im
reports under IFRS and IAS standards
that have been endorsed by the EU.
IFRIC
The IFRS Interpretations Committee
supports the IASB in provid
ing
authoritat
ive gu
idance on the
accounting treatment of issues not
specif
ically dealt w
ith by exist
ing IFRSs
and IASs.
Investment grade
A debt security, treasury bill or sim
ilar
instrument with a credit rating
measured by external agencies of
AAA to BBB.
Leverage ratio
A ratio introduced under CRD IV
that compares Tier 1 capital to total
exposures, includ
ing certa
in exposures
held off-balance sheet as adjusted by
stipulated credit conversion factors.
Intended to be a simple, non-risk-based
backstop measure.
Liqu
idat
ion portfolio
A portfolio of assets which is beyond our
current risk appetite metrics and is held
for liqu
idat
ion.
LCR or Liqu
id
ity coverage ratio
The ratio of the stock of high-quality
liqu
id assets to expected net cash
outflows over the following 30 days.
High-quality liqu
id assets should be
unencumbered, liqu
id
in markets during
a time of stress and, ideally, be central
bank elig
ible.
Loan exposure
Loans and advances to customers
reported on the balance sheet held
at amortised cost or FVOCI, non-
cancellable credit commitments and
cancellable credit commitments for
credit cards and overdraft facil
it
ies
Loans and advances to
customers
This represents lending made under
bilateral agreements with customers
entered into in the normal course of
business and is based on the legal form
of the instrument.
Loans and advances to banks
Amounts loaned to credit inst
itut
ions
includ
ing secur
it
ies bought under
Reverse repo.
LTV or loan-to-value ratio
A calculation which expresses the
amount of a first mortgage lien as a
percentage of the total appraised
value of real property. The loan-to-
value ratio is used in determin
ing the
appropriate level of risk for the loan
and therefore the correct price of the
loan to the borrower.
Loans past due
Loans on which payments have been
due for up to a maximum of 90 days
includ
ing those on wh
ich partial
payments are being made.
Loans subject to forbearance –
impa
ired
Loans where the terms have been
renegotiated on terms not consistent
with current market levels due to
financial d
iff
icult
ies of the borrower.
Loans in this category are necessarily
impa
ired. See ‘Forbearance’.
Loss rate
Uses an adjusted gross charge-off rate,
developed using monthly write-off and
recoveries over the preceding 12 months
and total outstanding balances.
LGD or Loss given default
The percentage of an exposure that a
lender expects to lose in the event of
obligor default.
Low returning clients
See ‘Perennial sub-optimal clients’.
Malus
An arrangement that permits the
Group to prevent vesting of all or part
of the amount of an unvested variable
remuneration award, due to a specif
ic
crystallised risk, behaviour, conduct or
adverse performance outcome.
Master netting agreement
An agreement between two
counterparties that have multiple
derivat
ive contracts w
ith each other
that provides for the net settlement of
all contracts through a single payment,
in a single currency, in the event of
default on, or terminat
ion of, any
one contract.
Mezzanine capital
Financ
ing that comb
ines debt and
equity characterist
ics. For example,
a loan that also confers some profit
partic
ipat
ion to the lender.
MREL or min
imum requ
irement
for own funds and elig
ible
liab
il
it
ies
A requirement under the Bank Recovery
and Resolution Direct
ive for EU
resolution authorit
ies to set a m
in
imum
requirement for own funds and elig
ible
liab
il
it
ies for banks,
implement
ing the
FSB’s Total Loss Absorbing Capacity
(TLAC) standard. MREL is intended to
ensure that there is suffic
ient equ
ity and
specif
ic types of l
iab
il
it
ies to fac
il
itate an
orderly resolution that min
im
ises any
impact on financ
ial stab
il
ity and ensures
the continu
ity of cr
it
ical funct
ions and
avoids exposing taxpayers to loss.
Net asset value (NAV) per share
Ratio of net assets (total assets less total
liab
il
it
ies) to the number of ord
inary
shares outstanding at the end of a
reporting period.
Net exposure
The aggregate of loans and advances
to customers/loans and advances to
banks after impa
irment prov
is
ions,
restricted balances with central banks,
derivat
ives (net of master nett
ing
agreements), investment debt and
equity securit
ies, and letters of cred
it
and guarantees.
Net-zero roadmap
Net-zero refers to a condit
ion
in which
human-caused residual greenhouse
gas emiss
ions (GHG) are balanced by
human-led removals over a specif
ied
period and with
in spec
if
ied boundar
ies.
Our Net-zero Roadmap refers to the
short and medium-term object
ives and
quantif
iable targets the Group has set
to achieve net zero carbon emiss
ions
in our operations by 2025 and in our
financed emiss
ions by 2050.
NII or Net interest income
The difference between interest
received on assets and interest paid
on liab
il
it
ies.
403
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
NSFR or Net stable funding ratio
The ratio of available stable funding to
required stable funding over a one-year
time horizon, assuming a stressed
scenario. It is a longer-term liqu
id
ity
measure designed to restrain the
amount of wholesale borrowing and
encourage stable funding over a
one-year time horizon.
NPLs or non-performing loans
An NPL is any loan that is more than
90 days past due or is otherwise
ind
iv
idually impa
ired. Th
is excludes
Retail loans renegotiated at or after
90 days past due, but on which there
has been no default in interest or
princ
ipal payments for more than
180 days since renegotiat
ion, and
against which no loss of princ
ipal
is expected.
Non-linear
ity
Non-linear
ity of expected cred
it loss
occurs when the average of expected
credit loss for a portfolio is higher than
the base case (median) due to the fact
that bad economic environment could
have a larger impact on ECL calculation
than good economic environment.
Normalised items
See ‘Underlying/Normalised’ on
page 56.
Operating expenses
Staff and premises costs, general and
admin
istrat
ive expenses, depreciat
ion
and amortisat
ion. Underly
ing operating
expenses exclude expenses as
described in ‘Underlying earnings’.
A reconcil
iat
ion between underlying
and statutory earnings is contained in
Note 2 to the financial statements.
Operating income or operating
profit
Net interest, net fee and net trading
income, as well as other operating
income. Underlying operating income
represents the income line items
above, on an underlying basis.
See ‘Underlying earnings’.
OTC or Over-the-counter
derivat
ives
A bilateral transaction (e.g. derivat
ives)
that is not exchange traded and that is
valued using valuation models.
OCA or Own credit adjustment
An adjustment to the Group’s issued
debt designated at fair value through
profit or loss that reflects the possib
il
ity
that the Group may default and not pay
the full market value of the contracts.
Perennial sub-optimal clients
Clients that have returned below 3%
return on risk-weighted assets for the
last three years.
Physical risks
The risk of increased extreme weather
events includ
ing flood, drought and
sea level rise.
Pillar 1
The first pillar of the three pillars of the
Basel framework which provides the
approach to calculation of the min
imum
capital requirements for credit, market
and operational risk. Min
imum cap
ital
requirements are 8 per cent of the
Group’s risk-weighted assets.
Pillar 2
The second pillar of the three pillars of
the Basel framework which requires
banks to undertake a comprehensive
assessment of their risks and to
determine the appropriate amounts of
capital to be held against these risks
where other suitable mit
igants are
not available.
Pillar 3
The third pillar of the three pillars of
the Basel framework which aims to
provide a consistent and comprehensive
disclosure framework that enhances
comparabil
ity between banks and
further promotes improvements in
risk practices.
Prior
ity Bank
ing
Prior
ity Bank
ing customers are
ind
iv
iduals who have met certain
criter
ia for depos
its, AUM, mortgage
loans or monthly payroll. Criter
ia var
ies
by country.
Private equity investments
Equity securit
ies
in operating companies
generally not quoted on a public
exchange. Investment in private equity
often involves the investment of capital
in private companies. Capital for private
equity investment is raised by retail or
inst
itut
ional investors and used to fund
investment strategies such as leveraged
buyouts, venture capital, growth capital,
distressed investments and mezzanine
capital.
PD or Probabil
ity of default
PD is an internal estimate for each
borrower grade of the likel
ihood that an
obligor will default on an obligat
ion over
a given time horizon.
Probabil
ity we
ighted
Obtained by consider
ing the values the
metric can assume, weighted by the
probabil
ity of each value occurr
ing.
Profit/(loss) attributable to
ordinary shareholders
Profit (loss) for the year after non-
controlling interests and div
idends
declared in respect of preference shares
classif
ied as equ
ity.
PVA or Prudent valuation
adjustment
An adjustment to CET1 capital to reflect
the difference between fair value and
prudent value posit
ions, where the
applicat
ion of prudence results
in a
lower absolute carrying value than
recognised in the financ
ial statements.
PRA or Prudential Regulation
Authority
The Prudential Regulation Authority is
the statutory body responsible for the
prudential supervis
ion of banks, bu
ild
ing
societ
ies, cred
it unions, insurers and a
small number of sign
ificant
investment
firms in the UK. The PRA is a part of the
Bank of England.
Revenue-based carbon intens
ity
A measurement of the quantity of
greenhouse gases emitted by our
clients per USD of their revenue.
Regulatory consolidat
ion
The regulatory consolidat
ion of
Standard Chartered PLC differs from
the statutory consolidat
ion
in that it
includes Ascenta IV, Global Dig
ital Asset
Holdings Lim
ited, Olea Global group,
Partior Holdings Pte. Ltd., SBI Zodia
Custody Co. Ltd, Seychelles International
Mercantile Banking Corporation
Lim
ited., Vault22 Solut
ions Holdings Ltd,
and all of the legal entit
ies
in the
Currency Fair group on a proportionate
consolidat
ion bas
is. These entit
ies are
considered associates for statutory
accounting purposes.
The regulatory consolidat
ion further
excludes the following entit
ies, wh
ich
are consolidated for statutory
accounting purposes; Audax Financ
ial
Technology Pte. Ltd, Furaha Finserve
Uganda Lim
ited, Letsbloom Ind
ia
Private Lim
ited, Letsbloom Pte. Ltd.,
Pegasus Dealmaking Pte. Ltd.,
PointSource Technologies Pte. Ltd.,
PT Labamu Sejahtera Indonesia,
Qatalyst Pte. Ltd., SCV Research and
Development Pte. Ltd., SCV Research
and Development Pvt. Ltd., Solv
Vietnam Company Lim
ited, Solvezy
Technology Ghana Ltd, Solvezy
Technology Kenya Lim
ited, Standard
Chartered Assurance Lim
ited, Standard
Chartered Bancassurance Intermediary
Lim
ited, Standard Chartered Bank
Insurance Agency (Proprietary) Lim
ited,
Standard Chartered Botswana
Education Trust, Standard Chartered
Isle of Man Lim
ited, TASConnect (Hong
Kong) Private Lim
ited, TASConnect
(Malaysia) Sdn. Bhd., TASConnect
(Shanghai) Financ
ial Technology Pte.
Ltd and Tawi Fresh Kenya Lim
ited
404
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Glossary
Repo/reverse repo
A repurchase agreement or repo is a
short-term funding agreement, which
allows a borrower to sell a financial
asset, such as asset-backed securit
ies or
government bonds as collateral for
cash. As part of the agreement the
borrower agrees to repurchase the
security at some later date, usually less
than 30 days, repaying the proceeds of
the loan. For the party on the other end
of the transaction (buying the security
and agreeing to sell in the future), it is
a reverse repurchase agreement or
reverse repo.
Resident
ial mortgage
A loan to purchase a resident
ial
property which is then used as collateral
to guarantee repayment of the loan.
The borrower gives the lender a lien
against the property, and the lender can
foreclose on the property if the borrower
does not repay the loan per the agreed
terms. Also known as a home loan.
RoRWA or Return on risk-
weighted assets
Profit before tax for year as a
percentage of RWA. Profit may
be statutory or underlying and is
specif
ied where used. See ‘RWA’ and
‘Underlying earnings’.
RWA or Risk-weighted assets
A measure of a bank’s assets adjusted
for their associated risks, expressed as
a percentage of an exposure value
in accordance with the applicable
standardised or IRB approach
provis
ions.
Risks-not-in-VaR (RNIV)
A framework for ident
ify
ing and
quantify
ing marg
inal types of market
risk that are not captured in the Value
at Risk (VaR) measure for any reason,
such as being a far-tail risk or the
necessary histor
ical market data not
being available.
Roll rate
Uses a matrix that gives average loan
migrat
ion rate from del
inquency 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.
Scope 1 emiss
ions
Direct GHG emiss
ions that occur from
sources owned or controlled by the
Group – i.e., emiss
ions from combust
ion
in owned or controlled boilers, furnaces,
vehicles, as well as fugit
ive em
iss
ions
from pressure contain
ing equ
ipment at
Group locations.
Scope 2 emiss
ions
Indirect GHG emiss
ions from the
generation of purchased or acquired
electric
ity, steam, heat
ing, or cooling
consumed by the Group.
Scope 3 emiss
ions
All ind
irect GHG em
iss
ions (not
included
in Scope 2) that occur in the value chain
of the Group, aris
ing from sources not
controlled by the Group. This comprises
of both upstream and downstream
value chain emiss
ions and
includes
absolute financed emiss
ions.
Secured (fully and partially)
A secured loan is a loan in which the
borrower pledges an asset as collateral
for a loan which, in the event that the
borrower defaults, the Group is able to
take possession of. All secured loans are
considered 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.
Securit
isat
ion
Securit
isat
ion is a process by which
credit exposures are aggregated
into a pool, which is used to back
new securit
ies. Under trad
it
ional
securit
isat
ion transactions, assets are
sold to a structured entity which then
issues new securit
ies to
investors at
different levels of senior
ity (cred
it
tranching). This allows the credit quality
of the assets to be separated from the
credit rating of the orig
inat
ing inst
itut
ion
and transfers risk to external investors
in a way that meets their risk appetite.
Under synthetic securit
isat
ion
transactions, the transfer of risk is
achieved by the use of credit derivat
ives
or guarantees, and the exposures being
securit
ised rema
in exposures of the
orig
inat
ing inst
itut
ion.
Senior debt
Debt that takes prior
ity over other
unsecured or otherwise more ‘jun
ior’
debt owed by the issuer. Senior debt has
greater senior
ity
in the issuer’s capital
structure than subordinated debt. In the
event the issuer goes bankrupt, senior
debt theoretically must be repaid before
other creditors receive any payment.
SICR or Sign
ificant
increase in
credit risk
Assessed by comparing the risk of
default of an exposure at the reporting
date to the risk of default at orig
inat
ion
(after consider
ing the passage of t
ime.
Solo
The solo regulatory group as defined in
the Prudential Regulation Authority
waiver letter dated 16 September 2024
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
Lim
ited, and Corras
i Covered Bonds LLP.
Sovereign exposures
Exposures to central governments and
central government departments,
central banks and entit
ies owned or
guaranteed by the aforementioned.
Sovereign exposures, as defined by the
European Banking Authority, include
only exposures to central governments.
Stage 1
Assets have not experienced a
sign
ificant
increase in credit risk since
orig
inat
ion and impa
irment recogn
ised
on the basis of 12 months expected
credit losses.
Stage 2
Assets have experienced a sign
ificant
increase in credit risk since orig
inat
ion
and impa
irment
is recognised on the
basis of lifet
ime expected cred
it losses.
Stage 3
Assets that are in default and
considered credit-impa
ired (non-
performing loans).
Standardised approach
In relation to credit risk, a method
for calculating credit risk capital
requirements using External Credit
Assessment Institut
ions (ECAI) rat
ings
and supervisory risk weights. In relation
to operational risk, a method of
calculating the operational capital
requirement by the applicat
ion of a
supervisory defined percentage charge
to the gross income of eight specif
ied
business lines.
Structured note
An investment tool which pays a
return linked to the value or level of a
specif
ied asset or
index and sometimes
offers capital protection if the value
declines. Structured notes can be
linked to equit
ies,
interest rates, funds,
commodit
ies and fore
ign currency.
Subordinated liab
il
it
ies
Liab
il
it
ies wh
ich, in the event of
insolvency or liqu
idat
ion of the issuer,
are subordinated to the claims of
depositors and other creditors of
the issuer.
405
Standard Chartered
– Annual Report 2024
Supplementary informat
ion
Sustainab
il
ity Aspirat
ions
Our Sustainab
il
ity Aspirat
ions are
consolidated into four overarching
long-term goals, each supported by key
performance ind
icators that we use to
measure our progress and outcomes
in areas in which we can make a
contribut
ion to the del
ivery of the UN
Sustainable Development Goals (SDGs).
Sustainable Finance assets
Assets from clients whose business
activ
it
ies are aligned with the
Sustainab
il
ity Bond Framework, those
generated from transactions for which
the use of proceeds will be util
ised
towards elig
ible themes and act
iv
it
ies
set out with
in the Susta
inab
il
ity Bond
Framework, or assets generated
through our own lending activ
it
ies to
small and medium sized enterprises
(SMEs) in elig
ible markets or through
our green mortgage offerings as per
the criter
ia set out
in the Sustainab
il
ity
Bond Framework.
Sustainable Finance income
Income generated from Sustainable
Finance products and clients as listed
in the Green and Sustainable Product
Framework. Addit
ional products may
be approved throughout the year
by the Sustainable Finance
Governance Committee.
Sustainab
il
ity Linked Loan
Any type of loan instrument for which
the economic characterist
ics can
vary depending on whether the
counterparty achieves ambit
ious,
material and quantif
iable
predetermined sustainab
il
ity
performance targets (SPTs).
Tier 1 capital
The sum of Common Equity Tier 1 capital
and Addit
ional T
ier 1 capital.
Tier 1 capital ratio
Tier 1 capital as a percentage of
risk-weighted assets.
Tier 2 capital
Tier 2 capital comprises qualify
ing
subordinated liab
il
it
ies and related
share premium accounts.
TLAC or Total loss
absorbing capacity
An internat
ional standard for TLAC
issued by the FSB, which requires G-SIBs
to have sufficient loss-absorb
ing and
recapital
isat
ion capacity available in
resolution, to min
im
ise impacts on
financial stab
il
ity, ma
inta
in the
continu
ity of cr
it
ical funct
ions and
avoid exposing public funds to loss.
Transit
ion r
isks
The risk of financ
ial
impact due to
changes in market dynamics or sectoral
economics due to governments’
response to climate change, as well
as competitors and advancements
in technology.
UK bank levy
A levy that applies to certain UK banks
and the UK operations of foreign banks.
The levy is payable each year based
on a percentage of the chargeable
equit
ies and l
iab
il
it
ies on the Group’s
UK tax resident entit
ies’ balance sheets.
Key exclusions from chargeable equit
ies
and liab
il
it
ies
include Tier 1 capital,
insured or guaranteed retail deposits,
repos secured on certain sovereign debt
and liab
il
it
ies subject to nett
ing.
Unbiased
Not overly optim
ist
ic or pessim
ist
ic,
represents informat
ion that
is not
slanted, weighted, emphasised,
de-emphasised or otherwise
manipulated to increase the probabil
ity
that the financial
informat
ion w
ill be
received favourably or unfavourably
by users.
Unlikely to pay
Indicat
ions of unl
ikel
iness to pay shall
include placing the credit obligat
ion on
non-accrued status; the recognit
ion of a
specif
ic cred
it adjustment resulting from
a sign
ificant perce
ived decline in credit
quality subsequent to the Group taking
on the exposure; selling the credit
obligat
ion at a mater
ial credit-related
economic loss; the Group consenting to
a distressed restructuring of the credit
obligat
ion where th
is is likely to result
in a dim
in
ished financ
ial obl
igat
ion
caused by the material forgiveness, or
postponement, of princ
ipal,
interest
or, where relevant fees; filing for the
obligor’s bankruptcy or a sim
ilar order
in
respect of an obligor’s credit obligat
ion
to the Group; the obligor has sought or
has been placed in bankruptcy or sim
ilar
protection where this would avoid or
delay repayment of a credit obligat
ion
to the Group.
VaR or Value at Risk
A quantitat
ive measure of market r
isk
estimat
ing the potent
ial loss that will
not be exceeded in a set time period
at a set statist
ical confidence level.
ViU or Value-in-Use
The present value of the future
expected cash flows expected to
be derived from an asset or CGU.
Write-downs
After an advance has been ident
ified
as impa
ired and
is subject to an
impa
irment prov
is
ion, the stage may be
reached whereby it is concluded that
there is no realist
ic prospect of further
recovery. Write-downs will occur when,
and to the extent that, the whole or part
of a debt is considered irrecoverable.
XVA
The term used to incorporate credit,
debit and funding valuation
adjustments to the fair value of
derivat
ive financial
instruments.
See ‘CVA’, ‘DVA’ and ‘FVA’.
406
Standard Chartered
– Annual Report 2024
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licensed to its operating entit
ies.
Registered Office: 1 Basinghall Avenue, London
EC2V 5DD. Telephone +44 (0) 20 7885 8888.
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ipal place of bus
iness in Hong Kong: 32nd Floor,
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