STANDARD CHARTERED PLC

ank

for

the

econom

Here

good

Annual Report 20

Strategic

report

o we are an

d wh

at we do

ere we o

per

ate

Group Chairman

’

s statement

oup C

hief E

cuti

ve’s rev

iew

Market environment

sin

ess m

ode

r str

ate

Our Stands

Client segment

reviews

Regional reviews

oup C

hief Fi

nanc

al Of

ﬁce

r’s rev

iew

oup Ch

ief Ri

sk Of

ﬁce

r’s rev

iew

Stake

holders and

responsib

lites

ﬁnancal

informaton statement

Underlying v

ersus statutor

results

Alternati

e performance measures

Viablity statement

Directors’ report

141

Directors’ remuneration report

192

sk rev

iew and C

api

tal r

eview

294

Financal statements

Supplementar

informaton

Contents

Unl

s anot

her c

urr

enc

y is sp

eci

f

ed, t

he wor

‘

dol

lar

’ or sy

ol ‘$’ i

n thi

s doc

umen

t me

ans

US do

lla

r and t

he wor

d ‘cent

’ or s

ymb

ol ‘c’ m

ean

one-hundredth of

one US

dollar

All disclosures in the

Strategic report

, Directors’

por

t and t

he Ris

k rev

iew an

d Cap

ital r

evie

w are

unaudited unless otherwise stated.

Unl

s the co

nte

xt re

quir

es, w

ith

n thi

s doc

ume

nt,

‘Ch

ina’ r

efe

rs to t

he Pe

opl

e’s Repub

lic o

f Chin

a and,

for the

purposes of this

document only

, ex

cludes

ng Kong S

cial Ad

min

str

ati

ve Regi

on (Ho

Kong)

, Macau Special Adminstrative R

egio

(Ma

cau) and T

wan

. ‘Kor

ea’ or ‘

uth Ko

rea’

refers to the

Republic of K

orea.

Asia includes A

ustralia, Bangladesh, Brunei,

Cambodia, India, I

donesia,

Laos

Mala

ysia,

Myanmar,

pal, Phil

ppines, Singapo

re,

Sri Lanka,

Thailand and Vietnam; Africa and Middle East

ME) includes

Angola, Bahrain,

Bot

swana,

mero

, Côt

e d’I

voir

e, Egy

, The G

amb

ia,

Ghana, Iraq, Jor

dan, Keny

a, Lebanon, Mauritus,

Nigera, Oman, Pakistan, Qatar

, Saudi Arabia, Sierra

Leo

ne, S

out

h Af

rica

, T

zania

, the U

nite

d Ara

Emirates (UAE)

, Uganda

Zambia and Zimbabwe;

and E

urope and Americ

as (EA

) includes Ar

gentina,

Brazil, Colombi

Falk

land Islands, France, Germany

Ire

lan

d, Je

rse

, Po

land

, Swed

en, T

rkey, the U

K and

e US.

Withn

the tables in this

report

, bla

nk spaces

dcat

e tha

t the n

umb

er is n

ot dis

clo

sed

, das

hes

dcat

e tha

t the n

umb

er is ze

ro and n

m sta

nds

for not

meaningful. Standard

Chartered PL

is incorporate

d in

Engl

and and

Wales with

limted liablity,

and is headquart

ered in

Lon

don.

The Group

’s

head ofﬁce provides

guidance on

governance

and regulator

standards. Standard

Cha

ered P

. St

ock c

ode

s are: L

SE ST

.LN an

HKSE

02888

e a

re the ba

nk fo

r the ne

w ec

y –

of p

eople and ideas

, of te

chnology

and tr

ade

e hav

e buil

t a strong f

oundat

ion i

n the wo

d’

s most dyn

amic

mark

ets, ser

ving the peop

le and bus

inesses tha

t drive g

th. W

e are

at the fr

ontli

ne of today’

s bigges

t chal

lenges a

nd are t

aking a st

and

on k

ey i

ues su

ch as cli

mate c

hange

, econom

ic pa

c

pation a

obalis

ato

n. O

ur c

olla

borat

e appr

oach to in

nov

at

on and d

rive to

be div

erse and i

nclus

ve mea

ns we ca

n do more

, better a

nd faster

Our Pu

rpose is to d

rive c

ommer

ce a

nd pros

perit

y thr

ough our un

ique

div

ers

, and o

ur heri

tage an

d val

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xpressed i

n our bra

promise, Here for good.

@StanChar

linkedn.com/

company

stan

dard-chart

ered-bank

facebook.com/

standardchartered

About this

report

Sustainablit

y reporting

e adopt an

integrated approach to corporate

reporting, embedding non-ﬁ

nancal i

nfor

maton

throughout our

annual report. While

not complying

in f

ull, i

n pre

par

ing th

is re

por

t, we h

ave gi

ven

consideraton to

the princples of the

Glob

Reporting Initati

and the Sust

ainablity

Accounting Standa

oard.

Further detail

on these framework

alignment

will be available in our ESG

por

t, t

o be pu

blis

hed i

n Q1 202

2 at

sc.com/ESGreport

Alternative performance measure

The Group uses a

number of alternative

performance

measures in the

discus

son

of its performance. These

measures exclude

cer

tain

items which management

believes

are not representative of the

underly

ing

performance of

the business and

which distort

period-on-period comparison. They

ide

the

reader with ins

ght into how

anagement

mea

sures

the performance of

busines

For more

infor

mat

on please

vist

sc.com

Throughout this report, we use these icons to represent the different

stak

eholder groups for whom we create v

alue.

Clients

Regulators and

gov

ernm

ents

Inve

Suppliers

Societ

Employees

Stakeholders

Strategic report

Rea

d mor

e on

ge 21

and

age

s 52 to 59

Standard Chartered

– Annu

al Repo

rt 2021

Strategic

report

Conﬁdence

in our

pose

strat

egy

Despite external cha

llenges, we have continued to mak

e good

progress against the strategy we set out in F

ebr

uar

y 2

019

, and

are on track to del

er our objectves (

see p

ages 22 and 2

)

As highlg

hted in last year’

s repor

t, we refreshed our 201

9 strategy

into four strategi

c priorties and three enablers focused on our aim

to become a leader in global ﬁna

e. In li

ght of the pandemic,

we have r

eview

ed our strategy and are conﬁdent that i

t remains

as relev

ant as ever a

nd will enable us to real

ise our ambitons.

e measure our prog

ress against Group ke

y per

formance

ind

cators (KPIs

)

, a selection of which are belo

, as well as clien

KPIs, some of which can be found on pages 26 a

nd 27

. Our G

roup

KPIs include non

-ﬁ

nca

l m

easures re

ﬂecting our commi

ent

to sustainable soc

ial and economic dev

elopment across our

business, operations and communit

es. Our Sustainabli

Aspiratons, alig

d to the UN Sustaina

ble D

velopment

Goals (page 6

, provide tang

ible target

s to driv

e sustainable

business outcomes.

Urgent cl

imate change

, stark inequal

y and unfair aspects of

globalisat

on impact eve

yone and the planet. W

e are setting

long-

term ambitons to play our part in tackling these issues.

ogether with the people and businesses we ser

ve, we c

an be

central to the tra

nsiton to a fai

, sustainable future.

This is why w

e have committed to three Stands: A

ccelerating Z

ero,

Liftng Pa

tic

pation and Resetting Globalisat

on.

o learn more about our Stands, see pages 24 and 25.

Financal KPIs

Retur

n on tan

gible e

quit



.

300bps

Underlyin

g basis

.

390bps

Statutor

y basis

Com

mon Equ

ity T

ier 1 r

atio

.



28bps

ove our t

arge

t rang

e of 13–14%

otal shareholder return

(



.

)

Non-ﬁnancal

KPIs

Diversty and incluson:

wome

n in seni

or rol



.



3ppt

Sust

ainablity A

spiratons

met o

r on tr

ack





.

4.5ppt

Other ﬁnancal measures

Oper

ating income







Underlyin

g basis







Statutor

y basis

Proﬁt before tax







55%

Underlyin

g basis









108%

Statutor

y basis

Earnings

per share





cents

40.

1 cents

Underlyin

g basis

.



cents

cent

Statutor

y basis

Rec

onci

lat

ion

s fro

m und

erl

yin

g to st

atu

tor

y an

d deﬁn

tio

ns of a

lte

rna

tive p

for

manc

e mea

sur

es (APM

) ca

n be fo

und on p

age

s 80

–

For m

ore i

nfo

rma

ton o

n our c

ult

ure of i

ncl

uso

n see p

age 5

8, an

d for m

ore o

n our s

ust

aina

blit

y a

spir

ato

ns se

e pa

ge 61

Standard Chartered

– Annu

al Repo

rt 2021

Strategic report

oup at a g

lance

ho w

e are

nd wha

t w

e do

Our Purpose is to drive commerce and pr

osp

erity

through our unique div

s

. W

e ser

e t

wo client

segments in three regions, suppor

ted by n

ine

global functions.

ota

l operating income









Underlyi

ng basi







m

Statutor

y basis

Our c

lient segme

nts

Consumer

, Priv

ate

and Bus

iness Bankin

nsum

er, Priva

te and B

usin

nkin

g ser

s more t

han

9mil

lon in

dvi

dual

s and sm

all

sine

sse

s, wi

th a fo

cus on t

afﬂuent and emerging

ﬂuent

in ma

ny of th

e worl

d’s fas

test

growing cites.

Corporate,

Commercial and

Inst

ituton

al Banking

Corporate, Commercial

and

Institutonal Banking supports

clients with their transactio

banking

, ﬁnancal

arkets,

corpor

ate ﬁnance and

borrowi

ng needs acr

oss

49 mar

ket

s, pro

vidn

g sol

utio

to m

ore th

an 2

2,00

0 clie

s in

some of the

world

’

s fastest

growing

economies and

most active

trade corridor

Operating

income

$



m

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g basis

$



m

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y basis

Operating

income





m

Underlyin

g basis







Statutor

y basis

Global functions

Guidng and supporting our businesse

Human

Resources

ximse

s the valu

e of invest

ment

in people

through recruitme

nt,

development and

employee

engagement.

Legal

Enables

sustainab

le business

and

prot

ect

s the G

roup f

rom le

gal-

related risk.

echnology &

Innovation

Responsible for

roup

’

s systems

development and

chnology

infrastr

ucture.

Risk

Responsible for

overall second

line

of defence responsib

lites

related to risk

management, which inv

olves ov

sight

and challenge

of risk management

acti

ons of t

he ﬁrs

t line.

Operations

Responsible for

all client operations

and en

sure

s the ne

eds of o

ur clie

nts

are at t

he cent

re of ou

r opera

tiona

amewor

k. Th

e fun

ction’s strat

egy is

supported by consistent performance

metric

s, standards and practices that

are aligned to client out

comes.

Group Chief Financal Ofﬁcer

Comprises seven support functions:

nance,

reasur

Strategy

, Inv

estor

Relations, Corporate Dev

elopment

Suppl

y Chain Management and

Prop

ert

. T

he lea

der

s of the

nctio

ns rep

ort di

rectl

y to the

Group Chie

f F

inan

c

al Ofﬁcer.

Corporate Affairs, Brand

and Marketing

Manages the Group

’

s communicat

and engagement with stak

olders

in ord

er to pro

tect an

d promo

te the

Group

’s reputation, brand and ser

vices.

Group Inte

rnal A

udit

An independen

t function whose

pri

mar

y rol

e is to he

lp the Bo

ard and

xecut

ive Mana

geme

nt to prot

ect th

asse

ts, rep

utation and sustain

ablity of

the G

roup.

Conduct, Financal

Crime

and Compliance

Del

ivern

g the ri

ght out

comes f

or the

Ban

k, it

s clien

ts an

d commu

nites by

part

nering inter

nally and externall

to ac

hieve the hi

ghest s

tandar

ds in

conduct and

compliance in orde

r to

enable sust

ainable busines

s and ﬁght

ﬁnancal crime.

Our client

-fac

ing businesses are supporte

d b

y our global

functions, w

ch work together to ensure the Group

’

s opera

ions

run smoothl

y and c

onsistently

Centr

and other items

Oper

ating income

$

m

Underl

ying basis

$m

Statutor

y basis

Standard Chartered

– Annu

al Rep

ort 202

Strategic

report

alu

ed behav

iours

Our r

egions

ota

l operating income









Underlyi

ng basi







m

Statutor

y basis

Better together

Do the right thing

ever

•

Cont

inuously im

prov

and

inn

ovate

•

Sim

plf

•

Learn from

your s

uccesses

and failure

•

See m

ore in other

•

“How can I help

”

•

Build for t

he long term

•

Live with int

egrt

•

Think client

•

Be bra

e, b

e the change

Africa and

Middle Eas

Present in

25 m

arket

, of whi

e most s

izea

ble

by inc

ome ar

the United Arab

Emirates (U

)

Nig

era a

nd Kenya.

Asia

e a

re pre

sent i

21 m

arket

s acr

oss

Asia, includ

ng

some of the

world

’

fastes

growing

economies. Hong

Kong and Singapore

are the

highest

income contributors.

Europe an

e Americas

Centred in L

ondon

wit

h a grow

ing

presence acros

continent

al E

uro

pe,

and N

ew Y

k, wi

presence

in both

North America

and

several markets in

Lat

in Ame

rica

. A key

income generator

for t

he G

roup.

Operating

income









Underlyin

g basis







Statutor

y basis

Operating

income









Underlyin

g basis







Statutor

y basis

Operating

income









Underlyin

g basis









Statutor

y basis

Guidng and supporting our businesse

Our valued behaviours ensure that we do things differently in

order for us to succ

eed. Only then will we realise our potential

and truly be Here for good.

Central &

other items

Oper

ating income

(





)

Underl

ying basis

(



)

Statutor

y basis

Standard Chartered

– Annu

al Repo

rt 2021

Strategic report

oup at a g

lance

Our unique fo

otprint connects

emergin

g and

high-growth

market

with more est

blished economies,

all

owing us to channel ca

pital where

it’

s needed mos

These a

re the ma

ets we c

all hom

r o

ver 1

60 yea

s, we

’

ve u

sed the

powe

r of our

net

work to help people

and b

usi

nesses who tra

de, oper

ate or

est i

n these reg

ions. Our deep r

oot

in ou

r mark

s ena

ble us to ma

thi

ngs happe

n. W

e are sh

ing our

ban

k to driv

e thei

r succ

ess – and ours

– in th

e ne

w econom

y of the future

Wha

t set

s us a

part is our di

t

y –

of people, cultures

and net

works

e a

re pres

mar

and s

e c

ient

n a furth

er 

e have a long-standing and d

eep franchis

e across

some of the world’

s fastest

-gro

wing economies in

Asia w

ith the region g

enerating t

wo-thirds of our

income. The t

wo market

s contribu

tng the highest

income a

re Hong K

ong and S

ingapore

Australia

Bangladesh

Brunei

Cambodia

India

Indonesia

Laos

Malaysia

Myanmar

Nepal

Philppines

Singapore

Sri Lanka

Thailand

Vietnam

Mainland China

Hong Kong

Japan

Korea

Macau

aiwan

Case study

Asia

novat

ive

ESG ﬁnanc

ng

e ha

ve worked w

ith th

e Bari

ng Priva

Equit

y A

sia to cr

eate t

he regi

on’

s ﬁr

environment

al, social and governance

(ES

)-li

nked sub

scrip

ton fa

cilt

y with a

carbon-offs

mechanism, and gender

dive

s

y KP

Is.

Asia

page 28

oper

ate

Standard Chartered

– Annu

al Repo

rt 2021

Strategic

report

Case study

Eur

ope & A

mer

ica

Buil

dng

railway

s in

rkey

Case study

rica & M

idd

le Eas

row

ing

our

digtal

presence

e suppor

t clients in Europe and t

he Americas

through hu

bs in London and New Y

k and also

have a strong p

resence in several European and

Latin Amer

ican market

Argentina

Brazil

Colombia

Falkland Islands

France

Germany

Ireland

Jersey

Poland

Sweden

urkey

e have a deep-roo

ted herita

ge in Africa and t

Middle East and ha

e b

een present in t

he region for

160 years

. W

e are present in the large

st number of

sub-Saharan A

frican mar

kets of any inter

natonal

bank

ing group.

As par

t of an ongoing online bank

ing

pus

h, and in r

espo

nse to gr

owing

demand for innov

atve banking ser

vices,

cust

omer

s in Af

rica an

d the Mi

ddle

East op

ene

d almost 9

00,00

0 digtal

acco

unt

s in 2021.

e le

d on a majo

r green ﬁ

nancng d

eal

for a n

ew 200km h

igh-sp

eed rai

lway

line i

n T

key

, link

ng the cit

es of

Bandir

ma and Osmaneli in the Nor

th,

passing through Bursa and Y

enişeh

r

Angola

Bahrain

Botswana

Cameroon

Côte d’Ivoire

Egypt

The Gambia

Ghana

Iraq

Jordan

nya

Lebanon

Mauritus

Nigera

Oman

Pakistan

Qatar

Saudi Arabia

Sierra Leone

South Africa

anzania

UAE

Uganda

Zambia

Zimbabwe

Europe and the Americas

Afri

ca and t

he Midd

le East

page 30

page 29

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic report

Grou

Chairman’s

tatement

oup Cha

irman

’

statement

Dr José

Viñals

Group Chair

man

21 was anothe

r y

ar of extraordinar

y global tur

bulence,

wit

h recover

y f

rom COVID-

19 a m

ixed pict

ure acr

oss th

e globe

Many of o

ur coll

eagu

es were ad

vers

ely imp

acte

d in thei

per

son

al or wor

k lives

. Even now

, we cont

inue t

o see new

ID-

19 var

iant

s emer

ging and we h

ave had t

o adapt

to a constantl

y changing landscap

Thro

ugho

ut this p

eri

od, our c

ollea

gues ar

ound t

he worl

d –

led by o

ur Gro

up Chief E

xec

utive B

ill Winte

rs and t

Man

ageme

nt T

eam – have c

ontin

ued to f

ocus on p

rotec

ting

the i

ntere

sts o

f share

holde

, while e

nsur

ing th

e wellbei

of colleagues a

nd supporting our customers, clients and

communites. The sp

irt our colleagues have

through

out, despit

e the often dif

fcult circums

tances, has

en exempl

y and I am ext

reme

ly prou

d of how we ha

all com

e out of 2021

Our ﬁnanc

al performance is impr

vng

Later i

n this re

por

t, Bill a

nd And

y Halfo

rd, our G

roup Ch

ief

Financ

al Ofﬁc

, wi

ll set ou

t more d

etail on o

ur ﬁnan

cal

per

for

mance a

s we navi

gate

d the se

cond ye

ar of the

pan

demic

. Over

all, our r

esult

s show ev

iden

ce of res

ilence,

with per

formance improvng ag

ainst a diff

cult backdrop.

r under

lyin

g proﬁt b

efore t

ax at $3

9 billo

n, grew 61 per ce

on a con

stant c

urre

ncy b

asis

. This wa

s suppo

rte

d by low levels

of imp

arme

nt, a r

etur

n to pos

itve in

come mo

ment

um in the

cond hal

f of 2021 and cos

t contro

e ha

ve conti

nued t

o invest in th

e fut

ure of t

he Gro

up,

includng stepping

up our innovaton

and technolo

invest

ment

, and we now h

ave an excitn

g set of

transformative business development opportunites

and p

artn

ers

hips, m

any of whi

ch we showca

sed at o

invest

or event in O

ctobe

Resile

nce

ppo

ing

tainab

grow

Standard Chartered

– Ann

ual Rep

t 2021

Strategic

report

otal

areholder

turn (

Financal KPIs

Aim

Deliver sustainable i

mprovement

the G

roup’

s proﬁ

tablit

y as a p

ercen

tage

of the v

alue of shar

olders’ ta

ngible

Analysis

Und

erly

ing Ro

TE of 6.0 p

er cent

in 2021 was a 30

0bp

s improvem

ent on

3.0 pe

r cent in 2020.

The underl

ying proﬁt

attribu

table to ordinary

shareholders expressed as a percentage

of average

ordinar

y shareholder

s’

angible equity

Underlying return on

tan

gibl

e equi

ty (Ro

TE)

Aim

Deli

ver a pos

itve ret

urn o

shareholders’ inv

estment through share

price appre

ciaton and divdends pai

Analysis

r TSR in the f

ull ye

ar 20

was ne

gati

ve 2.0 per c

ent, co

mpar

wit

h nega

tive 3

4.6 p

er cent in 2020.

Combines simple share

price appreciaton with

vde

nds p

aid t

o show t

he to

tal r

etu

rn to t

shareholder and is

express

a percentage

total return to

shareholders

Aim

Maint

an a stro

ng capit

al bas

and C

ommo

n Equit

y T

er 1 (

T1) ra

tio.

Analysis

r CET

1 rati

o was

14.1 per cen

t, ab

ove our 13-

4 per cen

target range.

e comp

one

s of th

e Gro

up’

s c

apit

al are

summarised on page

288

Common Equity

Tie

r 1 rat

-2

bps

The G

roup i

s highl

y liqud an

d well capit

alsed w

ith a

Com

mon Equi

ty T

ier 1 (‘CE

1’) ra

tio of 14

1 pe

r cent

. The Bo

ard

has r

ecomm

ende

d a ﬁnal di

vden

d of 9 cent

s per s

hare, or

$27

7 millo

n, wit

h the f

ull year d

ivde

nd an inc

reas

e of one-

thir

d from 2020. W

e ha

ve also ann

ounce

d a shar

e buy-ba

pro

gramme a

nd will sh

ort

ly star

t pur

chasin

g and th

cancelling up to $750 millon of ordinar

y shar

es.

The B

oard i

s commit

ted to o

perat

ing wi

thn the 13 t

o 14 per

cent C

1 ratio r

ange an

d we are ver

y cle

ar tha

t capital n

nee

ded t

o fun

d growth w

ill be re

tur

ned to s

hareh

older

e ha

ve retu

rned $2

.6 bil

lon of capi

tal to sh

areho

lder

s over

the l

ast th

ree year

s thr

ough a mi

x of div

dend

s and shar

y-back

s. Thi

s inclu

ded p

ayin

g out th

e maxi

mum amo

unt

we were a

utho

rise

d to in 2020 when t

he emer

ging pa

ndemi

resulted in a

suspen

sion

of distrbutions.

e a

re deliverng again

st our st

rate

gic priorties

While the pandemi

c brought a

out c

onsiderable chal

lenges

and, a

s a resu

lt, th

e tur

narou

nd is tak

ing lo

nger th

iousl

y anti

cpate

d, it is cle

ar to us t

hat th

e refre

shed

str

ategi

c prior

ties we s

et out a

t the st

art of 2021 are r

ight

r ambito

n of deli

verng 1

0 per cen

t retu

rn on ta

ngible

equ

y remain

s as res

olut

e as ever and we a

re work

ing to

acce

lerat

e its a

chieveme

nt by 20

24. In Bill

’

s r

epor

t the

acti

ons we are t

arget

ing are o

utlin

ed, wh

ich incl

udes ac

tive

man

ageme

nt of th

e Grou

’

s ca

pital, w

ith a tar

get to re

tur

in exces

s of $5 bill

on in the n

ext thre

e year

s. Ou

r strat

egy

ings th

e dyn

amism o

f our mar

kets t

o life in ou

r busin

ess

r focus i

s now on execu

ting a

gainst t

he pr

iort

ies at pa

ce,

and we ar

e makin

g progr

ess on e

ach of t

hem.

Net

ork

and

Afﬂuent

businesses remain k

ey competitve

differentators, both strong generators of hig

h-quality and

higher

-ret

urning ‘capital-lite’

come streams

e are t

ransf

ormin

g our abi

lt

y to onbo

ard, se

ve and excee

the e

xpe

ctatio

ns of ou

Mas

s Reta

cust

omer

s, wh

ich will h

elp

to fe

ed our h

igher-margin Af

ﬂuen

t busin

ess

, as well a

s being

a signﬁc

ant sou

rce of inco

me.

Sustain

ablity

is a moral im

pera

tve and an o

ppor

tuni

ty.

Our Sus

tainable Finance capabilties are not only mak

ing a

difference where it matters the most, but also representing

a growi

ng sou

rce of inco

me.

e a

re acceler

ating ou

r pathway to net zero

e ha

ve long re

cogni

sed cli

mate ch

ange a

s one of th

gre

atest ch

allen

ges of o

ur time

, given it

s wid

espre

ad and

proven

impact on the physical

environment and human

hea

lth, a

s well as it

s pot

enti

al to hamp

er eco

nomic gr

owth

The complex

trade-off

s whic

h come with climate ac

tion

an ther

e are no sim

ple ans

wer

s. W

e ann

ounce

d our ne

zero r

oadmap in October

, following

extensive engagement

wit

h share

holde

, client

s and N

GOs

. The app

roach wa

revi

ewed and ap

proved by th

e Boar

d and incl

uded i

nterm

targ

s to redu

ce ﬁnanc

ed emis

son

s and mob

ilse $3

00 billo

in gre

en and tr

ansit

on ﬁnan

ce by 20

0. Our ap

proac

emp

hasis

es the n

eed f

or a just t

ransit

on to ne

t zero: the

imp

acts o

f clima

te chang

e are fel

t most s

everely in o

foo

tpr

int, an

d if we do no

t meet cl

imate o

bject

ves in a way

tha

t recog

nises t

he ne

ed for m

arket

s acros

s Asi

a, Af

rica

and t

he Middl

e East to grow a

nd pros

per, we will fail

6.0

2021

3.0

2020

.4%

2019

0)%

2021

(

2020

20.2

2019

4.1

2021

2020

13.8%

2019

Rec

onci

lat

ion

s fro

m und

erl

yin

g to st

atu

tor

y an

d deﬁn

tio

ns of a

lte

rna

tive p

for

manc

e mea

sur

es (APM

) ca

n be fo

und on p

age

s 80

-85

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

Grou

Chairman’s

tatement

e continue to enhance our go

ernance

and culture

Whil

e the Bo

ard ha

s been u

nable t

o meet in a n

umbe

r of

key marke

ts in p

ers

on this ye

, we h

ave sta

yed eng

aged

vir

tual

. Me

mber

s of th

e Board a

tten

ded a nu

mber of

sub

sidar

y b

oard and c

ommit

tee me

etin

gs and he

ld vir

tual

Board-w

kforce

engagem

ent

essions acr

ss our

gions

dur

ing th

e cour

se of th

e year. The Boa

rd hop

es to be ab

le to

once again

engage colleagues in person during 20

2 as

art

of it

s mar

ket vist

e re

centl

y annou

nced s

everal cha

nges to o

ur Bo

ard

Com

mitte

e comp

osito

n, det

ails of w

hich can b

e foun

d in

the D

irect

ors’ re

por

t on pag

es 90 to 19

ring t

he year, we refocu

sed ou

r Brand

, V

alues a

nd Con

duct

Com

mitte

e to Cul

ture an

d Sust

ainabli

ty. This Co

mmitt

ee,

chai

red by Jas

mine Wh

itbre

ad, ha

s been a

ctivel

y involve

d in

sup

port

ing th

e Boar

d and the b

usine

ss in re

latio

n to our n

zero ap

proach

. The B

oard was a

lso he

avil

y involved i

n the

key deci

sons ah

ead of e

ndor

sing t

he Gro

’s net zero wh

ite

paper

, published in October a

head of C

26.

e ar

e taking ambitou

s Stands

The G

roup h

as buil

t a uniqu

e foot

print i

n the wor

ld’s mos

namic m

arket

s, se

ving t

he peo

ple and b

usin

esse

s that ar

the e

ngine

s of the

ir growt

h. As t

he bank f

or the n

ew econ

omy

we will e

nsur

e we contin

ue to sh

ape our b

usin

ess to dr

ive th

eir

succ

ess – an

d our

s – for the f

ure.

e ha

ve a huge o

ppor

tuni

ty t

o build a b

ette

r fut

ure wi

th our

cust

omer

s and co

mmunit

es. We believe th

at we can f

ulﬁl

our P

urpo

se – to dr

ive comm

erce and p

rosp

erit

y th

rough o

uniq

ue diver

st

y – wit

hout p

eop

le bein

g left b

ehin

d, with

out

the pl

anet

being negativ

ely impac

ted, and

without crea

ting

divsions that di

mnish

ense of

communit

e’re takin

g a set of S

tand

s to help s

olve so

me of th

e world

’

mos

t crit

cal probl

ems – lif

tng e

conom

ic par

ticpa

tion,

helping eme

rging markets red

uce carbon emisson

s, and

supporting a fairer

odel for

globalisaton. As well

addressing

oci

etal challenges, w

e believ

e these long-term

ambi

tons w

ill stre

tch and m

otiva

te the G

roup t

o delive

our s

trate

gy fa

ster an

d bett

e’

ve rallied

gether for

our communites, reaching more

tha

n 300,00

0 young p

eopl

e throu

gh our Fut

urem

akers

programme to support education, employ

abilt

, a

ent

repre

neur

ship ac

ross o

ur mar

s dur

ing the ye

All t

hese a

chieveme

nts

, and mo

re, spe

ak to th

e hear

t and

met

tle of w

ho we are. T

hey are a te

stame

nt to our val

ued

beh

avio

urs o

f bein

g Bett

er T

ogeth

, e

ndea

vouri

ng to

Do th

e Right Th

ing, an

d putt

ing ou

r best f

oot for

rd to

Never S

ettl

e. Thes

e attr

ibut

es, al

ong wit

h the re

silen

and a

daptab

ilt

y of our co

lleag

ues

, are crit

cal for u

e must con

tinue to build

on our culture of e

xcel

lence,

whi

ch is clien

-centr

ic, di

vers

e and inc

lusve, t

o delive

r on

our aspiratons

to be trul

high-performing.

Our ou

tlook i

s bright des

pite an uncer

tain

vironm

ent

Whil

st unce

rtain

tes p

ersi

st in rel

ation t

o CO

VID

19 and t

geopolitcal la

scape,

we see plent

of oppor

tunites

that

are compelling

obal grow

th is ex

pect

ed to con

tinu

e in 20

2 alb

eit

som

ewhat s

lower af

ter th

e shar

p recover

y we s

aw in 2021.

ia, our l

arges

t regio

n, is po

ised t

o remain t

he fas

test

growi

ng area i

n the wor

ld.

e ex

pect p

olic

y suppo

rt to s

cale ba

ck, as a n

umbe

r of

cent

ral ban

ks tig

hten p

olic

y to coun

ter inﬂat

on lea

ding to

sng inte

rest ra

tes, an

d ﬁscal p

rogram

mes are e

ase

e continue

to see accelerated change acr

ss the

global

bus

ines

s ecos

yste

m, fro

m the digt

al spa

ce, to tra

de ﬂows an

sup

ply cha

in shif

, and th

ese are ju

st som

e of the r

easo

ns why

we are excit

ed at th

e prosp

ect

s of the G

rou

The B

oard w

ill cont

inue to over

e the ta

sk of st

rikn

g the ri

ght

bal

ance be

twe

en the o

ppor

tun

ites an

d risk

s tha

t we see. I am

conﬁd

ent th

at, wi

th the a

ction

s we have ou

tline

d to cont

inue

dri

vng an

d inde

ed accel

erati

ng our st

rate

gic pri

orti

es, we w

ill

cre

ate lon

g-term a

nd sust

ainabl

e value fo

r our st

akehold

ers

Dr Jo

sé Viñ

als

Group Ch

airman

17 Feb

ruar

y 202

Group Chairman

’

statement continued



ﬁn

cal

ice

alap

cus

tomer

e hav

e p

artnered with Indonesian

e-commerce g

iant Bukalapak to o

ffer digtal

ﬁnanc

al ser

vices to 17

1 mill

on micro and SME

partner

s, and more than 110 mi

llon ind

v

idual

users – many of whom don’

t have access to

banking ser

vices. The aim of the partner

shi

p is to

boost ﬁnanc

al incluson in Indonesi

a and f

urther

support the countr

’

s di

gtal economic gr

owth.

Rea

d mor

e onli

ne at

.sc

.com

/bukalapak

tng Pa

rticpat

Strategic

report

Standard Chartered

– Annu

al Repo

rt 2021

Strategic

report

Standard Chartered

– Annu

al Repo

rt 2021

Strategic report

oup Chi

ef E

xecut

ive’s review

Chief

ecuti

e’

Bac

k to g

wth an

impro

vng

return

r perf

orma

nce in th

e secon

d half of 2021

, and into t

his

year, gives us c

onﬁden

ce that we a

re on tra

ck to achi

eve

our s

trate

gic and ﬁn

ancal ob

ject

ves. W

e s

aw a ret

urn to

inco

me growt

h, whi

ch we beli

eve signal

s the st

art of a

sus

tainab

le recove

, and we ﬁns

hed th

e year wi

th goo

busine

ss momentu

m in

Financal Mar

ts, T

rade and W

ealth

Man

ageme

nt. G

ood c

ost dis

cpline all

owed us to g

enera

pos

itve in

come-t

o-cos

t jaws in t

he se

cond hal

f of the ye

Con

tinu

ed low level

s of cred

it impar

ment h

ave hel

ped us

incr

ease p

roﬁt by 6

1 per c

ent on a con

stan

t curre

ncy b

asis

to $

9 bill

on and de

liver a re

turn o

n tangib

le equ

y (Ro

)

of 6 pe

r cent

Con

ﬁdence i

n our overall a

sse

t qualit

y an

d earn

ings tr

aject

allow

s us to ret

urn s

ignﬁcant cap

ital to sh

areho

lder

s: we are

anno

uncin

g toda

y a $750 m

illon sh

are bu

y-back

, star

ting

immn

entl

, tog

ether w

ith a 12 ce

nts p

er shar

e full-ye

div

dend

, up a third o

n 20

20. W

e a

re also co

mmitt

ng to

deli

ver sub

stant

ial ret

urns t

o investor

s over th

e next few

year

s whil

e manag

ing our C

ommo

n Equit

y T

ier 1 (

T1) ra

tio

namical

ly wit

hn our 13 to 14 p

er cent r

ange.

e rem

ain liqu

d, well capi

talse

d and so

undly p

osit

oned f

the ye

ar ahe

ad.

Conﬁdence in our purpose and strategy

The p

laces S

tand

ard Char

tere

d call hom

e are the wo

rld

’

mos

t dyn

amic mar

kets

, set

ting th

e pace f

or glob

al growt

The people a

nd businesses we serve, co

nnect a

nd partner

wit

h are the e

ngine

s of the n

ew econ

omy of trad

e and

innova

ton, an

d centr

al to the t

ransi

ton to a fa

ir and

sustainable future. Our Purpose is

to drive c

ommerce

and pr

ospe

rit

y thr

ough ou

r uniqu

e diver

st

. Thi

s infu

ses

ever

thing we d

o, conne

cting o

ur stra

tegy w

ith op

por

tunit

es

to dr

ive growt

h and de

liver ou

r socie

tal ambi

tons

Bill Winter

oup Ch

ief E

xecu

tive

Standard Chartered

– Annu

al Rep

ort 202

Strategic

report



.

19%

Net

ork incom

.

Number of activ

e Afﬂuent Clients



.

millon

Cash in

vestment

o help us d

eliver o

ur Pur

pose, we h

ave deﬁn

ed thr

ee ‘S

tand

s’

are

as whe

re we have lo

ng-ter

m ambit

ons: Accel

erati

Zero, Liftng Particpati

on and R

setting Gl

obalisaton.

Repre

sent

ing som

e of the m

ain soc

ietal ch

alleng

es of ou

tim

e, thes

e are not s

epar

ate fro

m our st

rateg

, bu

t integ

ral to

deliverng a

nd accelerating it: stretchi

ng our think

g, ac

tion

and leadership.

e ha

ve manag

ed sei

smc cha

nges over t

he las

t two ye

ars

and these

external

challenges have

helped us understand

how we can a

cceler

ate our p

rogre

ss. O

ur str

ateg

y is as

rel

evant now as it wa

s pre-p

andem

ic:

•

The g

rowth o

f the Af

ﬂuent s

egme

nt in our m

arket

s has

cont

inue

d apace an

d remai

ns one o

f our gre

atest

opp

ort

unite

s. Sin

ce 2018, t

he num

ber of cl

ient

s has

incr

ease

d by aroun

d 400,0

00 and a

sset

s und

man

ageme

nt are up $52 b

illon. We see opp

ort

unite

to accelera

te this gr

owth through further dig

tisaton,

part

nerships and investme

•

The t

rade ﬂow

s acros

s our Ne

work re

main as v

ibrant

as ever an

d our un

ique phys

ical fo

otpr

int enab

les us t

ser

ve c

lient

s as th

ey contin

ue to tr

ade and e

xpand a

cros

bor

der

s. Net

wor

k inco

me has gr

own by aroun

d 6 per ce

annually since 2018

, ex

uding the impact of intere

rate headwin

•

The pandemi

c stress

-tested our Mass R

etail business and

we ha

ve fared we

ll. This s

egme

nt is bac

k on trac

k, an

d we

see opportunites to dev

elop it further with our range of

proven di

gtal cap

abiltie

s and grow

ing list o

f excitng

par

tne

rship

s. In 2021, o

ur Cre

dit Card

s and Per

sonal Lo

ans

business returne

d to

proﬁtablity with a strong improv

ement

in th

e cost

-to-in

come rat

•

Our Sust

ainablity ag

enda and thought and act

ion

lea

der

ship rem

ains a key pr

iort

y as t

he wor

ld cont

inues

to face signﬁcant environmental and clima

te challenges.

e se

e this a

s both a

n imper

atve and a

n oppor

tun

e are d

eter

mined t

o deli

ver on our p

lans – to r

each

net ze

ro in our op

erat

ions by 2025 an

d in our ﬁna

nced

emi

sson

s by 2

050. Th

is year we an

noun

ced inte

rm targ

to re

duce ﬁn

anced e

misso

ns by 2030 in th

e most car

bon-

inte

nsve s

ector

s. T

o provi

de tran

spare

ncy a

nd supp

ort

coll

ective lea

rning, we

published

a detailed

white pape

out

linng o

ur meth

odo

logy an

d appro

ach. W

e a

re also

focuse

d on accelerating growth in Sus

tainable Finance ,

wit

h plans t

o mobil

se $30

0 billon i

n green a

nd tran

siton

ﬁnance by 20

0 and we

are st

rengthening ou

r sustainablit

capa

biltie

s in our Co

nsum

, Pr

ivate an

d Busi

ness B

ankin

(

CPBB

) bus

iness

The l

ong-te

rm fu

ndam

ental

s of the m

arket

s in whic

h we

operate hav

e not changed. These

markets, notably China

and

oth

er mar

kets in A

sia, w

ill dri

ve fu

ture gl

obal ec

onomi

c growth

over th

e coming d

ecade

s. W

e ar

e conﬁden

t we have th

e righ

str

ateg

y to capt

ure the o

ppor

tun

ites th

at will ar

ise f

rom th

ose

tre

nds, a

nd we can se

e evide

nce tha

t it is wor

king.

akin

g action t

o simplf

, focus an

d accelera

our pa

th to 10 pe

r cent Ro

Whe

n we prese

nted t

he Gro

’s refre

shed s

trate

gy to t

mar

ket in Febr

uar

y 2019

, we se

t out ou

r plan to d

eliver 1

0 per

cent Ro

TE by 2021. In t

he year t

hat foll

owed we grew in

come

and Ro

TE. B

ut CO

D-

19 tr

igge

red an e

conomi

c downt

urn

and rela

reduction in i

nterest rates, ine

vtably squeezing

our margins and re

ducing income and retur

ns sharpl

Again

st this b

ackdrop, we h

ave not a

chieved t

he retu

rns we

ek for inves

tors

. With t

his in min

d, we have co

nduct

ed a

comp

rehen

sive rev

iew of ou

r busin

ess m

odel an

d strat

egy

The

re are many ar

eas wh

ere we ha

ve made g

ood pr

ogres

in re

cent year

s des

pite th

e pand

emic, i

ncludn

g retu

rnin

CPBB to p

roﬁtab

lit

y in China an

d Korea, al

most tr

eblin

g the

cumulative operating

proﬁt from our four la

rge optimsation

mar

kets an

d rele

asing a

round $

15 billon o

f RW

A t

hroug

exit

, includ

ng the s

ale of ou

r Permat

a jont ven

ture. B

ut we

conc

lude

d that we m

ust make ch

anges t

o accele

rate ou

r path

to 10 p

er cent Ro

TE by 202

. W

e will a

cceler

ate our e

xecuti

and ar

e imple

mentn

g plans t

o simplf

y our b

usine

ss and

sha

rpen o

ur focu

s on whe

re we are mo

st dif

feren

tate

By 2024 we are targe

ting:

•

About a 160-basis point impro

vement in Corporate,

Com

mercia

l and Ins

titu

tonal B

ankin

g (

CCIB) income re

tur

on risk

-w

eighted assets (R

) throug

h optim

sation and

mix c

hange

s, ena

bled by a $2

2 billo

n redu

ction in RW

fro

m exit

s and ef

ﬁcenci

es comb

inng to ho

ld CCIB RW

at 31 D

ecemb

er 2021 levels

•

A cost

-t

o-incom

e ratio in C

PBB aroun

d 60 per c

ent, d

own

fro

m 7

6 per ce

nt in 2021, ach

ieved by growi

ng inco

and exe

cutin

g a $500 mi

llon bus

ines

s expe

nse re

ducti

programme

•

A $3

00 millo

n investme

nt into o

ur China-r

elate

d busi

ness

to capture the

opp

ortunity from China’

s continued opening

and d

oublin

g its p

roﬁt cont

ribu

ton. O

ur po

siton

ing in

Chin

a has never b

een b

ette

r and the o

ppor

tuni

tes fo

r us

nev

er more

attractive

•

$1.

3 bi

llon of gro

ss cost e

fﬁcen

cies to h

elp of

fse

t inﬂato

create room for continued i

nvestment a

maintan positv

jaw

s of 2 per ce

nt per ye

ar on aver

age, excl

uding in

teres

rate rises

•

Acti

ve manag

ement o

f the G

roup

’s capita

l posit

on wit

h a

cumu

lati

ve capital r

etur

n in exces

s of $5 billo

n equa

ting to

a ﬁft

h of our c

urren

t market c

apitals

atio

n and mor

e than

dou

ble th

e amoun

t of the p

reviou

s thre

e year

Standard Chartered

– Annu

al Repo

rt 2021

Strategic report

oup Chi

ef E

xecut

ive’s review

As we

ll as th

ese ﬁve me

asur

es, we h

ave an overarc

hing

obje

ctve to i

mprove ret

urn

s in market

s and b

usin

ess lin

whi

ch are not m

eet

ing our ﬁn

ancal ob

ject

ves and to co

ntinu

to sim

plf

y th

e manag

ement o

f the G

roup. W

e r

eview th

ese

questions regularly and will

take actions as

appropriate.

For exam

ple, we re

centl

y annou

nced t

he merg

er of th

echno

logy a

nd Ope

ratio

ns fu

nctio

ns into o

ne glob

organisat

on, si

mplf

ying the

str

ucture

and drivng synergi

Our ac

tions ar

e designe

d to amplif

y th

e posit

v

impac

t of the imp

ng out

look

The macro-economic environment

remains important to the

deli

ver

y of ou

r ﬁnanca

l ambito

ns. By t

he end o

f 20

1 fallin

rate

s over the l

ast t

wo year

s have dr

iven a gr

eater t

han

$2 billo

n redu

ction in n

et inte

rest in

come wh

ich we have

en work

ing har

d to repl

ace. With t

he inte

rest

-rat

e cycle

show

ing sig

ns of tu

rning

, and gi

ven our po

sitve g

eari

ng to

US-dollar ra

tes, we should reco

ver this lost

income.

e ha

ve said th

at we exp

ect th

e Grou

’

s m

etabo

lic rate o

inco

me growt

h to be 5

7 per ce

nt. T

his reﬂe

cts o

ur stro

and im

provng m

arket p

osito

ning and a

verage G

DP grow

acro

ss our f

oot

print w

here A

sia is ex

pect

ed to ou

tpa

ce growth

in th

e rest of t

he worl

d by aroun

d 2 per cen

t over the ne

three

years.

The s

pecif

c a

sset a

nd revenu

e pool

s that we a

re targe

ting

wit

h our st

rateg

y are als

o growin

g. By 2025, A

sia Af

ﬂuen

set

s and th

e Asia

, Afr

ica and Mi

ddle East M

ass Ret

ail

revenu

e poo

l are exp

ecte

d to grow annu

ally by 9 pe

r cent

and 7 p

er cent

, resp

ecti

vely

, co

mpar

ed to 6 pe

r cent and

5 per c

ent, r

espe

ctive

, for t

he res

t of the wo

rld.

In add

iton to o

ur met

aboli

c incom

e growth r

ate, we exp

ect

tha

t inter

est rate r

ise

s could a

dd abou

t a fur

the

r 3 per cen

dri

vng a

verage in

come grow

th rat

es of 8-10 per cen

t to 202

accelerating

the achiev

ement of our returns aspiratons.

The i

mproveme

nts i

n exter

nal con

diton

s, however, are not

guarante

ed and substantial un

certaintes pe

rsist

, in

articular

reg

arding g

eopo

litcal t

ensio

ns and t

he evolut

ion of in

ﬂaton

and in

teres

t rates

. As su

ch, we are f

ull

y commit

ted to

tak

ing th

e opera

tiona

l action

s out

lined ab

ove to und

erpin

attainment of

double-digt

TE.

Conﬁdent in the future

e are co

nﬁdent we c

an deli

ver our st

rateg

, bui

ldng on t

signﬁc

ant prog

ress we h

ave mad

e over the p

ast sever

al year

and t

he mom

entum w

e have com

ing into 202

Whil

st unce

rtain

y per

sist

s in rel

ation t

o CO

VID

, we also s

signﬁ

cant opport

unites

ergi

•

Government and Central Bank

polices are

in transiton,

cre

ating vo

latilt

y th

at can be

neﬁt our c

apital-li

Financal Markets and W

alth Management b

usinesse

•

Accel

erate

d trade ﬂ

ows and su

pply ch

ain shif

ts a

cros

our f

ootp

rint m

arket

s are incr

easn

g the de

mand fo

rade solutions

•

Sus

tainab

lit

y is cri

tcal and an i

ncrea

sng pr

iort

y fo

r both

clie

nts an

d govern

ment

s – and we ar

e uniqu

ely po

siton

to support them

•

r client

s are ac

celera

ting th

eir pivo

t to digta

l with

increasng w

ill

ngnes

s and desire for digtal-ﬁrst banking

•

China is

eni

ng up at

an accelerating pace,

suppor

ting

the o

ppor

tun

ites fo

r which we h

ave pos

itone

d for th

past decade

•

xpe

cted in

teres

t rate ri

ses co

uld add s

ignﬁcant f

ther

ups

ide to ou

r incom

e growth r

ate

Out

look

The G

roup r

emain

s in great s

hape an

d in an envi

able po

siton

e ex

it the se

cond ye

ar of the p

ande

mic roo

ted in ma

rket

wit

h stron

g growt

h prosp

ect

s. W

e ha

ve the r

ight st

rateg

bus

ines

s mode

l and ambi

ton to de

liver o

n this po

tent

ial. W

have s

hown a re

silent ﬁn

ancal p

erfo

rman

ce in 2021 and ha

set o

ut cle

ar actio

ns to ac

hieve a Ro

E of 10 pe

r cent by 202

Finall

, I woul

d like to highlg

ht the re

markab

le ef

fort

s of ou

82,00

0 colle

ague

s again t

his year. Their c

ommit

ment an

enduran

ce in

allenging circumstance

s has delivered a

seamless ser

vice to our

customer

s a

communites that

we se

ve.

Bill W

inter

Gro

up Chie

f Exe

cutive

17 Feb

ruar

y 202

Group Chief Executiv

e’

review c

ntinued

Standard Chartered

–

nual Re

por

t 2021

Strategic

report

Management T

eam

Bill

Winter

Gro

up Chie

f Exe

cutive

And

Halfo

Group Chief

Financal Ofﬁcer

Sim

Coop

CEO

, Cor

porate,

Commercial &

Instit

utonal Bankin

and Eur

ope & Am

erica

lai

Dixon

Group Head,

Corporate Affairs

Brand and Mar

ting

Davi

Group General Counsel

Dr Michael Gorriz

Group Chief

Information Ofﬁcer

Judy

Hsu

CEO, Con

sumer, Privat

and Busine

ss Banking

njamn

O, A

anuj

apil

ashram

Group Head,

Human R

esources

10.

Sun

usha

CEO, Afr

ica &

Middle E

ast

11.

Roel

uwh

off

Chief Digtal,

chnology &

Inn

ovatio

n Ofﬁc

12.

race

McDermott

CBE

Group Head, Conduct,

Financal Crime and

Complian

13.

Mark

mith

Gro

up Chie

f Risk Of

ﬁcer

14.

David

Whi

teng

Group Chief

Operati

ng Ofﬁcer

15.

Aliso

cFad

yen

Group Head,

Intern

al A

dit

16.

Mar

uen**

CEO

, Hong K

ong

and Cl

uster C

for Hong K

ong,

aiwan and M

acau

Alison represents Group

Int

nal Au

dit as a

n invt

ee at

Management

eam meetings

y is no

t a per

dischargng manager

ial

responsiblites

under the UK

Market Abuse

Regulation

15.

10.

11.

13.

16.

14.

12.

Standard Chartered

– Annu

al Repo

rt 2021

Strategic report

Market environment

Mark

vironment

Macroeconomic factors

affec

ting the g

lobal la

ndsca

Global macro tr

ends

•

Glob

al GD

P recov

ered s

har

ply in 202

1, like

by 5.

8 per c

ent

, foll

owing t

he 3.

3 p

er cent

contraction i

n 202

•

Asia w

as the b

est p

erf

orm

ing re

gion

, reco

rdin

grow

th of 7

.2 p

er cen

t, dr

ive

n by posi

tve gr

owth

in Ch

ina of 8

1 p

er cen

•

Amon

g the m

ajor

s, t

he US re

cord

ed gro

wth o

7 per ce

nt hel

ped by s

ignﬁc

ant ﬁs

cal st

imul

us.

e UK rec

orde

d the s

tron

ges

t growt

h (likel

cent)

, following a

near

10 per cent

contraction i

n 202

•

The eu

ro are

a econ

omy gre

w by 5.2 p

er ce

in 2021 f

ollow

ing a 6

.4 per c

ent co

ntra

ctio

n in

2020; eco

nomi

c acti

vt

y wa

s cons

train

ed in Q1

as COVID

19 ca

ses we

re ele

vated

, but i

mprove

int

o Q2 and Q3 as t

he vacci

ne rol

l-ou

t picke

d up

ment

um, a

llowi

ng res

tri

cton

s to be e

ase

•

Polic

yma

kers co

ntin

ued t

o prov

ide si

gnﬁcan

emergency support

, but

is

ng inﬂaton

across

the world as

a result of supply

chain disruptons

and energy shortages has

prompted some

central bank

s to

begin tighte

nng

olicy and

others to accelerate

their timetables

Legacy of CO

VID-

•

Better

vaccine

access has helped dev

elope

mar

ket

s reco

ver fas

ter t

han em

ergi

ng mar

ket

As t

he pa

ce of vac

cina

ton

s impro

ves in

emerging mar

ts, allowing greate

resumpt

ion

of e

cono

mic ac

tiv

ty, grow

th in em

ergi

mar

ket

s will i

mprove ov

er the m

edi

um ter

•

Inﬂat

ion con

cer

ns are l

ikely t

o fade o

ver the

dium t

erm a

s ener

gy pr

ices l

ikely m

ode

rate

and s

uppl

y cha

in bot

tle

neck

s are r

eso

lved

Thi

s is like

ly to m

ean mo

re lim

ted ce

ntra

l bank

tig

hten

ng th

an mar

ket

s are cu

rren

tly p

ricn

g in

•

cal po

licy m

ight t

urn f

rom a t

ailw

nd to a

adw

ind fo

r growt

h. Hi

gh pub

lic de

bt and

gove

rnm

ent de

ﬁcts a

lso m

ean t

hat mo

eco

nom

ies ar

e look

ing t

o tigh

ten ﬁs

cal po

lic

over t

he me

dium t

erm f

ollow

ing th

e sign

ﬁcant

stimulus that ac

companied CO

VID-

•

D-

9 has br

ough

t a rene

wed fo

cus on

supply chain

concentration risks. Companies

are li

kely to

continue to accelera

te the

shortening and si

mplfying of supply chains

•

As c

omp

ani

es aim

to reduce concentration

sks

, the

y may di

ver

sf

y pro

duc

tion a

way

from China,

world

’

s mega-trader

Howe

ver

, g

lob

al res

earc

h sur

veys o

f ﬁrm

s in

e Gre

ater B

ay ar

ea ind

cate t

hat Ch

ina

remains a preferred destinaton

for most,

fol

lowed by A

ocia

ton o

f Sou

the

ast A

sian

Nations (ASEAN) economies

Broader global trends

•

The wor

ld ec

onomy c

oul

d see a p

erm

anen

los

s of e

cono

mic ou

tpu

t or ‘scar

rin

g’ due to

e rece

ssi

on tha

t foll

owed t

he pan

demi

Thi

s woul

d make it h

arde

r for em

ergi

mar

ket

s to cat

ch up w

ith deve

lop

ed ma

rket

•

D-

9 has ac

cele

rate

d the p

ace of

digtalisaton of econom

ies. Higher capex

and m

oves to

wards d

igtal

isat

on co

uld b

oost

pro

duct

iv

ty g

rowt

h, prov

ing a

n anti

dote t

economic scar

ring concerns

. Withn

merging

mar

ket

s, co

untr

ies i

n Asi

a are be

st pla

ced t

take

antage of digtal

at

•

ong-term growth in

the developed world

constrained b

y ageing populations and hi

leve

ls of de

, exacer

bat

ed by th

e pol

icy

response to C

OVID-

•

elatively younger populations, as

well as

the

ado

pti

on of di

gtal t

echn

olo

, w

ill all

emerging mar

ts to become increa

sngly

impor

tant to global growth

•

Risng

nationalsm

, anti-globalisaton and

pro

tec

tion

sm are a t

hre

at to lo

ng-te

growth prospe

cts in emerging market

•

Glob

al grow

th is e

xpe

cte

d to mod

erat

e to

4.4p

er cen

t in 2022

•

Asia will remain the fastest

-growing re

gion in

e worl

d and wi

ll con

tinu

e to dri

ve glo

bal

grow

th, e

xpa

ndin

g by 5.7 p

er cen

•

Amon

g the m

ajor

s, t

he eu

ro are

a is exp

ect

ed to

cord a la

rger b

oun

ce (

4.0 p

er cen

) t

han th

US (3

.4 per c

ent) but l

arge

ly as t

here w

ill st

ill be

are cap

acit

y to u

nwin

•

The COVID-19 out

bre

ak is like

ly to r

emain a

dra

g on grow

th in r

egio

ns wh

ere vac

cinat

on

rat

es are l

ow but s

hou

ld be

come a s

econ

dar

risk for most

developed markets

•

Polic

y supp

t will b

e scal

ed ba

ck as mo

central bank

s shift towards tightenng policy

to co

unt

er inﬂa

ton

, and ﬁs

cal pro

gram

mes

are e

ase

d as gove

rnm

ent

s shif

t th

eir fo

cus

towa

rds re

tur

ning p

ubli

c ﬁnan

ces to a

sustainabl

e footing

•

Ther

e are seve

ral dow

nsi

de ri

sks t

o this o

utl

ook

includng

urther delays to

the roll-out

VID

19 vaccines in

merging markets

longer

-than-expected supply chai

n disruptons,

higher in

ﬂaton becoming embedded in

useh

old

s’ and ﬁr

ms’ ex

pec

tati

ons

, or a

opo

litca

l event r

isk re

sul

ting i

n anot

her

commodit

y price spike

rends in 

1

Outlook

for 



dium-

and long-term vie

Standard Chartered

– An

nual Re

por

t 2021

Strategic

report

Actu

al and p

roje

cte

d growt

h by market

in 2021 a

nd 202

202

India

Singapore

Indonesia

2021

e our re

gio

nal pe

rfo

rma

nce on

page 28

Regional ou

tlook

China’

s econ

omy staged a V

-shaped recover

y fro

m C

OVID-

19 due to relativel

y effecti

ve virus contro

and polic

y suppor

Actu

al and p

roje

cte

d growt

h by market

in 2021 a

nd 202

202

China

orea

Hong K

ong

2021

.3%

.1%

8.0

.1%

3.6

•

China’s GD

P grew by 8

1 p

er cen

t in 2021, b

ene

ﬁtng f

rom s

tron

ext

ern

al dem

and an

d a low ba

se. W

e f

ore

cast 202

2 grow

th at

3 pe

r cent c

lose

r to th

e lower b

oun

d of it

s est

imat

ed po

tent

ial

grow

th ra

nge of 5

–

6 per c

ent

. W

e se

e ups

ide ri

sk fr

om an e

asin

of auto c

hip shortages and

downside risk from prolonged w

usin

g dema

nd ami

d exp

ecta

tion

s of a pr

ice co

rre

ctio

•

ile inno

vaton, decarbonisaton and

common prosperit

rank high

on China’

s long-term agenda, the go

vernment has

t growt

h stab

ils

atio

n as th

e top pr

ior

t

y in 2022

. W

e ex

pec

cro po

lice

s to be e

ase

d, esp

ecia

lly in H

1, and t

he pa

ce and

intensty of regulatory tightenng to

ﬁnetune

to bolster

domestic demand

•

e exp

ect H

ong Kon

g’

s e

cono

my to grow by 2

.3 p

er ce

nt in 202

sup

por

ted b

y glob

al (

and e

spe

ciall

y Chin

) tra

de as p

ost

VID

normalisaton broadens, while

domestic consumption looks to

face further headwinds given

lingerng loca

l CO

VID disruptons.

e e

xpe

ct Sou

th Kore

a’s econ

omy to gr

ow 2.9 per cen

t in 2022

supported by economic

reopening and external trade

•

e exp

ect A

AN as a re

gion t

o pla

y catc

h up in te

rms o

eco

nom

ic grow

th re

cover

y ver

s develo

d marke

ts (D

) in

202

2. Econ

omic g

rowt

h shou

ld imp

rove as r

estr

ict

ons ar

e eas

and a

s high

er vacc

inat

on rat

es lim

t the s

everi

ty o

f any new

ckdown

s. Th

e rec

over

y ma

y howeve

r be bum

, es

pec

iall

y in

eco

nom

ies wh

ere cu

rre

nt vacc

inat

on rat

es are s

till b

elow h

erd

immunty levels, for

example, Indonesia

and the Phil

ppines

•

e exp

ect in

ﬂato

n in AS

EAN t

o rem

ain man

age

able f

or mo

regional economies

although upside risk comes

rom

prolonge

sup

ply-

side d

isr

upt

ons an

d as dem

and r

ecover

s in t

he reg

ion

roug

h 2022. T

his s

houl

d allow m

one

tar

y po

lic

y to rem

ain

accommodative in

H1 20

•

India i

s likel

y to clo

ck t

wo suc

cess

ive ye

ars o

f high-s

ingl

e-di

gt

grow

th bu

oyed by f

avou

rable b

ase e

ect

s and re

cover

ing

eco

nom

ic act

ivt

y. W

e exp

ect F

3 GD

P at 8 per c

ent as m

ore

contact

intensve sectors rev

ert to normalised ac

tivt

ith

increased vacc

inaton c

overage, continued

ﬁscal policy support

and b

ett

er re

al wage

s. Inﬂ

atio

n has b

een p

sist

entl

y high

sin

ce lat

e 2019 and b

ett

er re

cover

y is l

ikely t

o pus

h poli

cy ra

normali

saton in 2

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic report

Market environment

Market en

vironment

continued

Afric

a and the Midd

le East

rope and the A

mericas

Regional outlook continued

•

e exp

ect t

he con

tinu

ato

n of a mo

dest e

cono

mic re

cover

in th

e sub

-Saha

ran Af

ric

a (

SA) regi

on, w

ith o

ur cover

age

eco

nom

ies gro

wing a

t an ave

rage o

f 3.1 per ce

nt in 202

om c.

8 per c

ent in 2021

•

Alth

ough t

he pa

ce of vac

cine a

dmin

stra

tion h

as be

en sl

ower in

SSA c

omp

ared w

ith el

sew

here

, econ

omic r

eop

enin

g in tra

ding

part

ners, risng glob

al demand, and higher commodit

y prices

ve help

ed to p

rovi

de ﬁrm

er un

derp

innn

gs to S

SA grow

th.

e d

o not ex

pec

t signﬁ

cant n

ew cont

ainm

ent me

asu

res in

202

2, wit

h ear

lier l

ockdo

wns an

d cur

fews h

avi

ng an in

crea

sngl

ss seve

re imp

act on t

he ec

onomy

•

Desp

ite ri

sng in

ﬂato

n owin

g to hig

her fo

od an

d fu

el pri

ces

we ex

pect m

one

tar

y p

olic

y in th

e regi

on to re

main l

arge

accommodative,

with modest normalisaton

asures

most mark

ets

•

Give

n that t

he COVID-

sho

ck lef

t mos

t SSA e

cono

mies w

ith

elevated public debt ratios, ﬁscal policy consolidaton will

rem

ain a key am

bito

n, as S

SA eco

nom

ies at

temp

t to sa

fegu

ard

mar

ket ac

cess

. In th

e case o

f East A

ican ec

onom

ies

, ado

ptio

of In

ter

nati

onal M

one

tar

y Fun

d (IMF

) pro

gram

mes i

s mean

to s

end a si

gnal o

n the in

tent t

o pur

sue ﬁ

scal co

nso

lida

ton i

ord

er to st

abil

se de

bt rat

ios

. Refor

m in mar

ket

s like Gh

ana

and N

iger

a, w

ith hig

h debt s

ce-t

o-reve

nue ra

tios

, wil

l be

closely followed

•

The Mi

ddle Ea

st reg

ion is l

ikely t

o be on a di

verg

ent re

cover

th, w

ith oi

l-exp

ting co

unt

rie

s bou

ncing b

ack f

aste

r ver

sus

oil i

mpor

tn

g coun

tri

es, w

hich r

emain c

ons

train

ed by hi

gh level

of de

. The p

ace of va

ccina

ton ro

ll-o

ut prove

d mor

e rapi

amo

ng oil e

xpo

rte

, wit

h coun

trie

s like th

e U

AE le

adin

g the

cha

rge. T

he str

ong o

utlo

ok fo

r hydroc

arbo

n pri

ces an

d expe

cte

relaxation

of targets for

OPEC

memb

ers are

set to underpin

e regi

on’s liqud

y pros

pec

ts in 202

2. I

mprove

men

ts in o

exp

ter

s’ ﬁsca

l and cu

rre

nt acco

unt b

alan

ces wi

ll boo

st th

gion’s res

ve po

sito

n, le

adin

g to lowe

r fu

ndin

g nee

ds and

pre

ser

ing US d

olla

r curr

enc

y peg

•

Grow

th in Eur

ope an

d the A

mer

icas i

s likel

y to slow i

n 2022 a

tput g

aps s

hrin

k and po

lic

y sup

por

t is gra

dual

ly ea

sed b

ack

•

D-

9 will st

ill pr

ese

nt ris

ks in e

arl

y 2022 g

iven t

he thr

eat of

new va

rian

, and a

s boo

ster va

ccin

e prog

ramm

es wil

l take

tim

e to f

ully r

oll ou

t, b

ut sup

ply ch

ain di

sru

pto

ns (

ong wi

hig

her en

erg

y cost

s and p

ote

ntia

l shor

tag

es in Eur

ope

) w

ill b

e majo

r hea

dwin

d to gro

wth

•

e exp

ect in

ﬂato

nar

y pr

ess

ures t

o rem

ain hig

h at lea

roug

h H1 2022

, but di

snﬂa

tion s

hou

ld kic

k in he

adin

g into H2

•

A fur

the

r esca

lati

on in te

nsi

ons be

ween Ru

ssi

a and Uk

rain

and t

he po

ten

tial in

tro

duct

on of s

anct

ions c

ould h

ave a

negative impact

on European economies

and banks

•

The Fe

d is likel

y to be

gin hi

kng r

ates by Q

1 2022

, and rai

se rat

ur tim

es in 202

- ta

kin

g the Fe

d Fund

s rate h

ighe

r by 100 b

ps.

e Europ

ean C

entr

al Ban

k (ECB) is likel

y to be

gin rat

e hikes i

H2-

2022

. Bot

h the F

ed and EC

B are in t

he pro

ces

s of tap

eri

their

asset purch

ase prog

rammes

•

The tr

ade env

iron

men

t is likel

y to con

tin

ue imp

rovng

, but t

her

are r

isk

s to th

e EU–

UK tr

ade ag

ree

ment a

mid a br

oade

r ris

e in

politcal tensions

•

In Latin A

mer

ica, we e

xpe

ct grow

th to m

ode

rate i

n 2022 as

domestic demand normalises, while

expor

ts are

expe

cted

remain strong amid high commodit

y prices and improved

supply-side constraints

A gradual recover

y in sub-Saharan Af

rica was

recorde

d in 2

021

Growt

h in E

uro

pe and the Amer

icas strength

ened

in 20

21 a

s vacci

naton programm

es rolled out

Actu

al and p

roje

cte

d growt

h by market

in 2021 a

nd 202

Actu

al and p

roje

cte

d growt

h by market

in 2021 a

nd 202

202

Nigera

2021

202

2021

.1%

3.0

5.0%

3.4

5.7%

e our re

gio

nal pe

rfo

rma

nce on

age 29

e our re

gio

nal pe

rfo

rma

nce on

page 30

ect

acces

elations

p

manager

o give our S

ingapore-based afﬂuent cli

ents

the ser

vice they wa

, when they need it, we

launched the My RM app. The a

pp allo

ws clients

to interac

t with their relationsh

p manager

s via

text messages or audio cal

, as wel

l as aut

horis

vestment transactions. The tool is one par

t of

a wider upscali

ng of o

ur Afﬂuent business in

Singapore, where there a

re plans to double the

current number of relationsh

p managers

Rea

d more o

nlin

e at

sc.com/

yrm

Standard Chartered

– Annu

al Rep

ort 202

Strategic

report

Standard Chartered

– Annu

al Repo

rt 2021

Strategic report

Business model

Business

model

Our business

Corpor

ate

Commercial

and

Ins

titu

tonal

Bankin

e sup

port companies across the world,

from small and medium

-sized enterprises

to large corporates and i

st

tions, both

digtally an

d in per

son.

Cons

umer

, P

ate and

Busi

nes

s Ba

nkin

)

e sup

port small businesses and indviduals,

from Mass Retail cl

ients to afﬂuent and

high

-net

-w

ort

h ind

viduals

, both dig

tally

and in person.

e help

internatonal companies

connect across our global net

work

and help ind

viduals and loca

bus

iness

es grow t

heir wealt

Starting Q1 20

2, we wil

l be disclos

ng SC V

entures and related entites as a separate cl

ient segment

Income

•

Net interest income

•

Fee in

come

•

rading income

Pro

ﬁt

•

Income gained

from

prov

idng our p

rodu

cts

and ser

vices min

expenses and imparments

Return on tang

ible equity

•

Proﬁt ge

nerat

ed rel

ative to

tangible eq

uity invested

How

we generate return

e earn net inter

st on the mar

gin for loans and deposi

t product

s, fees

on the provis

on of adv

isor

y and other ser

vices, and trading i

e from

provid

ng risk management in ﬁnanc

al markets.

Our pr

oduct

s and ser

vice

Financal Markets

•

Proje

ct and

transpor

tation

ﬁnance

•

Debt capital

market

s and

leveraged

ﬁnance

•

Macro, commodites

and credit tradin

•

nanc

ng and

secur

ites ser

vices

•

Sales and

structuring

ransaction Bankin

•

Cash management

•

rade ﬁnance

•

ork

ing capital

ealth Management

•

Inv

stments

•

Insurance

•

ealth ad

vice

•

Por

tfo

lio

management

Retail

Products

•

Deposit

•

Mortgages

•

Credit cards

•

Person

al loans

Standard Chartered

– Annu

al Rep

ort 202

Strategic

report

How we are s

hapi

ng our f

utu

e are continuously

looki

ng for w

ays to

impro

ve our b

usiness

model to

acc

elerate

returns

In Jan

uar

y 2021, we f

urt

her st

reaml

ined

our CCI

B segm

ent, i

ntegr

atng ou

Corp

orate Finance and Financal

Markets businesses. The

integraton

will c

reate a s

implﬁed o

rign

ation an

distrbu

tion engine driv

ng balance sheet

velocity and an impro

ved client offering.

In add

iton

, we remain f

ocuse

d on

pro

ducti

vt

. In 2021, we h

ave

dig

talised businesses, drivng p

rocess

improv

ents through automation

and si

mplﬁcat

on, opt

imse

d targe

operating models, reduced propert

spa

ce and ch

anged t

he way we wo

rk,

to achiev

e productivt

y improv

ement

and co

st red

uction

. W

e cont

inue t

seek fur

ther opportunites to generate

pro

ducti

vt

y save

s to rema

in comp

etit

against pe

ers.

ing for

rd, we aim to d

eliver a

Return on T

angible E

quit

y (R

TE) of

arou

nd 10 pe

r cent by 2024, by focus

ing

on dr

ivng i

mproved re

tur

ns in CCIB

transfo

rming proﬁtablit

y in CPBB,

seizng opp

ortunites in China

, improvng

efﬁcency throu

creating operatio

nal

leverage

and deliverng sustai

able

shareholder distrbutions.

e are co

mmitt

ng res

ource

s to grow

our f

ranch

ise in th

e large a

nd high-

retur

ns markets

, and sustainng and

acce

lerat

ing pro

gress i

n the fo

optimsat

ion markets anno

unced in

Febr

uar

y 2019 (I

ndia, Kore

a, U

Ind

onesi

)

. W

e h

ave als

o stepp

ed up o

revi

ews of ea

ch of our c

lient s

egmen

mar

kets

, and pro

duct

s and s

vice

Distnct propositon

Our understanding of our mark

and our extensive

inter

natonal

net

wor

k allow us t

o off

er a

tailored propositon to

our clients,

combinng global exp

ertise and

local knowledge.

Sustainable a

responsible business

e are co

mmitt

ed to su

stain

able

social and economic

development

across our business, operations

and commun

ites.

Client focus

r client

s are ou

r busi

ness

e build

long-term relationsh

ps

through

usted

advice, expertise

and best

-in-class capabiltie

What makes u

s differen

Our Purpose is to drive commerce and pr

osp

erity t

ough our

unique div

sty – this is underpinned by our brand prom

ise,

Here for good. Our Stands - aimed at tackling the world’

biggest issues - Ac

celerating Zer

o, Liftng P

articpation and

Resetting Globalisat

on (

see pages 24–

25 for more

)

, challenge

us to use our unique positon to hel

obust risk

management

e are h

ere for t

he lon

g term

Effective risk management

allow

s us to grow a su

stain

able

business.

Standa

Charter

– A

nnu

al Rep

ort 202

Strategic report

Business model

The sour

ces of value we rely on

e a

im to use our resources in a sustainable w

to achie

ve the goals of our strategy

How w

e ar

e enhanci

ng our res

ources

•

than 18,000 colleagues have

completed learning

cou

es in 2021 t

o build t

he f

utu

re sk

ills t

hat we ne

ed –

includng analy

tics, data, digtal, cy

ber securit

y and

sustainabl

e ﬁ

nance.

•

e con

tinu

e to cre

ate a wo

rk env

iron

ment t

hat

suppor

ts resilence, innovaton and incluson, with

ongoing focu

s on

ental, physical, social and ﬁnancal

well

bein

g. Th

is inc

lude

s roll

ing ou

t hybr

id wor

kin

g acro

our mark

•

e con

tinu

e to inves

t in tra

nsfo

rmi

ng our c

ore bu

sin

ess

into a

ading

digtal-ﬁ

st a

data-driven platform,

positoning us to

deliver superior client experiences,

acc

ess n

ew high-

grow

th se

gmen

, grow wal

let w

ith

exi

stn

g clie

nts a

nd cre

ate n

ew bus

ines

s mod

opportunites.

•

Our ne

work r

emai

ns one o

f our key co

mpe

tit

advantages and

we continue to

leverage our network to

drive growth in T

rade corridor

s and F

ancal

arkets

solutions for our

client

•

e con

tinu

e to sup

por

t sma

ll and m

ediu

m busi

nes

ses

(SME

), provi

dng th

em wi

th muc

h-ne

ede

d fun

ding t

restart and

grow thei

r businesses

amid the reopeni

ng of

eco

nom

ies

. Over

all, we gr

ante

d over $

3 billo

n in new

ans to S

MEs i

n 2021.

•

e inc

reas

ed ou

r foc

us on SM

Es pa

rti

cpat

ing in t

New Eco

nomy, in par

tic

ular t

hos

e that a

re par

t of

e-commerce ecosystems.

•

Stro

nger c

apita

l and a mu

ch mo

re res

ilen

t bala

nce

eet w

ith gro

wth in h

igh-q

uali

ty d

epo

sit

•

CET

1 rat

io at 14.1 pe

r cent

, abov

e the G

roup t

arge

t rang

of 13

–

4 per ce

CET

1 capital

Fina

ncal stren

gth

With $

828 billon i

n asse

ts on o

bal

ance she

, we are a stro

ng,

truste

artner for our cl

ient

$

•

value engineer

ng excel

lence.

ver

10,000 eng

ineers

globally are creatin

g a

est

-in-class and scalable

technology stack, to support quic

k turnaround of

ide

into ser

vice.

•

e are a

ccele

rati

ng ou

r move to cl

oud

, migra

tng key

app

licat

ons

, e.g. o

ur cor

e bank

ing s

yst

em and n

digtal vent

ures.

•

adopt next

-generation technologies

to better ser

r cust

omer

s, i

mprove e

fﬁce

ncie

s and de

live

r new

business opportunites.

Consumer

client

satisfacton metric



.



Strong brand

e are a leading inter

natonal

ban

king gro

up wit

h more t

han

160 ye

ars of h

istor

y. In many of ou

mar

kets we ar

e a hous

ehol

d name.

Busines

s model

continued

echnology

e poss

ess leading te

chnological

capabilties to enabl

e best

in-

class

customer experience, operations

and risk management.

Internati

onal net

ork

e have a

n unparalleled

internatona

l net

work, con

necting

companies

, insttutio

ns and

ind

vidu

als to, an

d in, som

e of the

wor

ld’s fast

est

-grow

ing and m

ost

dynamic region

Hum

an capital

Diverst

y d

ferentates us. Deliverng

our P

urpo

se and S

tands r

est

s on

how we con

tinu

e to invest in o

people, the employee

experience

we f

urth

er enha

nce and t

he cult

ure

we strengthen.

Loca

l expertise

e ha

ve a deep k

nowle

dge of o

market

s and an understan

ding

of th

e drive

rs of t

he real e

cono

feri

ng us ins

ght

s that he

lp our

clients achieve their ambitons.

•

In 2021 we be

came a d

igtal

-ﬁrst b

rand

, reﬂe

ctin

g the

innov

aton drivng

our business forward. Our

refreshed

identty is modern and ag

ile, demonstrating our

com

mitm

ent t

o stay

ing r

elevan

t to ou

r clien

ts’ e

volv

ing

needs.

•

e hav

e bee

n succe

ssf

ul in l

evera

ging o

ur bra

nd and

ins

ght

s to su

ppo

rt bu

sine

ss gr

owth

. The G

rou

suc

ces

sfu

lly im

prove

d its r

epu

tati

on in 2021

, excee

ding

e avera

ge sc

ore fo

r the b

anki

ng se

ctor, and ra

nkin

top t

hre

e in the m

ajo

rt

y of ou

r key mar

ket

s over 2021.

xclu

des CC

IB, p

riva

te ba

nk an

d busi

nes

s ban

kin

g clie

Standard Chartered

– Annu

al Repo

rt 2021

Strategic

report

on stakeholder

engagement on

pages

–59

The value we create

e a

im to create long-term v

alue for a broad range of s

tak

eholder

s in a sustai

nable way

Clien

e want t

o delive

r eas

, ever

yda

y banki

ng sol

ution

s to our

clie

nts w

ith a gre

at digta

l client ex

per

ience. We enable

ind

vidu

als to grow an

d prote

ct the

ir wealt

h; we help

bus

ines

ses tr

ade, tr

ansact

, invest an

d expa

nd. W

e al

so help a

vari

y of ﬁnan

cal inst

tuti

ons, i

nclud

ng bank

s, p

ublic s

ector

and d

evelopm

ent org

anisat

ons

, with t

heir ba

nking n

eed

Suppliers

e en

gage di

vers

e suppl

iers

, loca

lly and gl

oball

, to

provide efﬁc

ent and sustainable goods and ser

vices

for o

ur bus

iness

axes pa

id in 2021

.



2020: $97

Regulators and gov

nments

e engage with

public authorites to

pla

our part in

supporting the e

ffective function

ng of

the ﬁnanca

stem an

d the bro

ader e

conomy.

Employ

e be

lieve grea

t employe

e expe

rien

ce drive

s great c

lient

exp

erie

nce. W

e want a

ll our pe

ople t

o pur

sue th

eir ambit

ons

deli

ver wit

h purp

ose an

d have a rewa

rding car

eer ena

bled by

great people leaders.

ota

l spen

t in 2021

.



2020: $3

Activ

e suppliers

2020:

900

indvidual clients

ota

l CCIB a

nd bu

sine

banking clie

nts

.



2020: 9











2020: 25

5,00

Senior appointments

which are internal



2020: 62%

Employ

ees committed

to o

ur suc

ces



2020: 97%

Divdends declared in 2

021





2020: $28

Inv

e aim t

o delive

r robus

t retu

rns an

d long-t

erm

sustainable v

alue for our in

vestor

ciet

e st

rive to o

perat

e as a sus

tainab

le and re

spon

sible

comp

any

, wor

king w

ith loc

al part

ner

s to prom

ote

social and economic

development.

Community inv

estm

ent



.

2020: $95

Standard Chartered

– Ann

ual Rep

ort 202

Strategic report

Strategy

rategic p

riorties

Wholesale Net

ork bus

Throu

gh our uniqu

e net

work

, we faciltate

investment

, trade a

nd capital ﬂows

, providng

a star

ting poin

t in achievng our S

tand of Reset

ting

Glo

balisato

n. W

e have also st

arted o

n our jour

ney

towards our S

tand of Accelera

ting Zero, by focusing

on Sust

ainable Finance.

e ar

e one of the leading

internatonal Wholesale

bank

s in our eme

rging market

s foot

print thro

ugh:

•

ing leading positons in high-retur

ning, high-growth sector

•

Deliv

erng a

ark

-leading dig

platform by continu

ng to

invest in core

digtal capabilties

•

Drivng capital-lite product

s while buildng a Sustainable Finance

franchis

e and

expandin

our orignatio

n and

strbution

ecosy

stem e.g.,

ccelerating our Financal Markets growth

•

Speeding up growth in large market

while expandin

g in

grow

ing m

arket

s an

d corr

ido

rs e.g

., intr

a-Asia a

nd East–

West

Ove

r the pa

st year, we have con

ducte

d a bot

tom-up

revi

ew of our st

rate

. Wh

ile the

re are are

as we

ide

ntﬁed th

at we will p

arti

cular

ly foc

us on in th

ture

, such as f

aster t

ackl

ing of low-re

tur

ning

-weigh

ted a

sset

s (RW

) in C

orp

orate, C

omme

rcial

and In

stit

uton

al Bank

ing (

CCIB)

, f

ther si

mplf

the wa

y we ope

rate, an

d being eve

n more ag

gres

sive

in transfor

ming our busine

ss processe

s and

gen

eratin

g addit

onal s

avin

gs, we st

ill bel

ieve our

str

ateg

y is the r

ight on

e. W

e have m

ade go

pro

gress i

n the year, and are o

n track t

o delive

our objectves.

ing for

rd, we rem

ain commi

tted t

o achieve ou

ambi

tons by 2025:

•

o be the n

umbe

r one Who

lesa

le digtal

banking platform

•

o be amon

g the to

p thre

e Afﬂu

ent bra

nds

•

o double our Mass presence

•

o becom

e a marke

t lead

er in Sus

tainabl

e wi

ll contin

ue to in

creas

e focu

s on:

•

Four s

trate

gic pr

iort

ies: Who

lesal

e Net

wor

business, Afﬂuent cl

ient business, Mass R

etail

busine

ss, and Sustain

ablity

•

Thr

ee crit

cal enab

ler

s: Peopl

e and Cult

ure, Ne

s of W

king

, and Inn

ovation

e are a

nchor

ing ou

r strat

egic pr

iort

ies and

enab

ler

s in our t

hree St

ands: Acce

lerat

ing Zero,

Liftn

g P

ticpation and Resettin

g Globalisat

on.

Thro

ugho

ut this s

ecti

on, we wi

ll highlgh

t the lin

age

bet

en our s

trate

gic pri

orti

es and ou

r Stan

ds.

Mor

e detai

ls on our S

tand

s can be fo

und on p

ages 24

and

25.

o becom

leader

glo

ﬁn

anc

Our strategy

CCIB network income

Percentage of

trans

actions digtally

intiated

.

2020: $

4.4b



2020: 41%

Afﬂuent client busines

e off

er out

standing per

sonalis

ed advice

and exceptio

nal exper

iences fo

r our Private,

Prior

ty an

d Premium Bank

ing client

s to help t

hem

grow and pros

per inter

natonall

y and at home.

Providng acces

s to sustai

nable investmen

ts is

a key differe

ntator

, su

pport

ing our St

and of

Acceler

ating Zer

As a l

eading inte

rnaton

al wealth mana

ger in Asia

acros

s the Af

ﬂuent cont

inuum wit

h $250 billon A

we a

re:

•

Unloc

kin

g the val

ue of t

he Af

ﬂuen

t clie

nt con

tinu

um acr

oss A

sia

rica a

nd th

e Midd

le East

, wit

h suit

abl

e clien

t prop

osi

ton

cover

age models and advisor

y ca

abi

lties

•

Maxi

msin

g the r

each o

f our d

iver

se ne

ork t

hrou

internatonal banking, complemented by

a strong focus on

developing

Hong Kong a

nd Singapore

as key i

nternatonal

wealth centres

•

Cont

inun

g to grow o

ur wea

lth b

usin

ess

, whic

h saw d

oub

le digt

set gr

owth o

ver the l

ast t

hree y

ear

s, wi

th pro

pos

iton

anc

hore

d in inve

stme

nt th

ough

t lea

der

ship, an o

pen

architectu

re approach, pers

onalised advice at scale and an

integrate

d dig

tal-hybrid exper

ience

Afﬂuent client

income

Afﬂuent active

client

.

2020: $3



.

2020: 2.0

Standard Cha

tered

– Annu

al Repo

rt 2021

Strategic

report

rategic p

riorties

Critcal enablers

Inno

vation

e ha

ve a thre

e-pron

ged inn

ovaton

appr

oach to t

ransf

orm t

he Bank

, to ac

hieve

our g

oal of 50 p

er cent i

ncome f

rom new b

usine

sse

•

ransform our core

digtisaton

•

Leverag

e par

tne

rsh

ips to d

rive s

cale an

d exte

nd re

ach

•

Build n

ew bus

ine

ss mo

del

s to cre

ate val

e w

ill al

so est

abli

sh SC V

ntu

res an

d rela

ted e

ntit

es as a

para

te clie

nt se

gmen

t in 2022

, to f

urt

her d

rive i

nnovat

on

differe

ntation and disrupt

grow

People and Culture

e are co

ntinu

ng to invest i

n our pe

ople t

buil

d fut

ure-r

eady s

kills

, provi

de the

m a

differentated experience and strengthen our

culture of i

nnovaton and

incluson. This includes:

•

pand

ing hyb

rid wo

rki

ng acr

oss o

ur fo

otpr

int

, wit

73 p

er cen

t of col

leag

ues a

cros

s 28 mar

ket

s alre

ady o

hyb

rid wo

rki

ng arr

ange

men

ts in 202

•

Embedding our refres

hed approach to perfor

mance, reward

and r

eco

gnit

on tha

t put

s gre

ater f

ocu

s on out

per

for

man

through collab

oration and innovaton

•

ncreasing re-skill

ng and upskill

opp

ortunites

towards

utur

e role

s tha

t are ali

gned w

ith t

he bu

sine

ss st

rate

gy an

indviduals’ aspiratons

•

Focusing on wellbeing to enhance indvidual resilence,

productivty and

performance

New W

ays of W

orki

e continue to

be client

-centr

ic, impro

ve our

operat

ing rhythm in organisaton

al agilty and

emp

ower our p

eopl

e to cont

inuou

sly im

prove the

way we wor

k. We are work

ing on id

entf

ing way

to tr

ack der

ived val

ue and en

hance o

ur spe

ed of

dec

ison-ma

king an

d delive

, as a key sou

rce of

competitve adv

antage.

omen in

senior roles

Consumer

client

satisfacton metric

Culture of incluson score

verage time

taken

from appro

val to

technology go-live

Percentage of

venue

from

new busi

nesses



.





2020: 81

.67%

.



2020: 12

.0 week

~

2020: N.

stainablit

In Sust

ainablit

, we continue t

o focus on su

stainable

and trans

iton ﬁnance, supp

orting ou

r Stand of

Accelerat

ing Zero. W

e provide acces

s to ﬁnance,

net

work

s and trainn

g to young pe

ople, supp

ortin

g our

Stand o

f Liftng Par

ticpation o

f communite

s across

our ne

twor

k. W

e sup

port co

mpanies in imp

rovng

environme

ntal, social and govern

ance standards

in line wit

h our Stan

d of Resettin

g Global

isaton.

Our g

oal is to be

come the wor

ld’s most sust

ainable

and res

ponsibl

e bank and th

e leading pr

ivate

sector ca

talyser of ﬁ

nance for the UN Sus

tainable

Developm

ent Go

als (

) where it m

atter

s most –

in As

ia, Afr

ica and the Mid

dle East. W

e are:

•

veraging climate risk management

supp

ort clients in

managing climat

risk and identf

ying tran

siton opportu

nites,

e.g., mobilse green and transiton ﬁnance

•

Inte

grat

ing Su

sta

inabl

e Finan

ce as a co

re com

pone

nt of o

customer value prop

ositon and deliverng Sustainabl

e F

inan

solutions

•

Continu

ng to pr

ote

conomic

incluson and to

tackle

ine

qua

lt

y in our f

oot

pri

nt thr

ough Fu

tur

emake

rs by

Standard Char

tered

•

arget

ing n

et zero c

arbo

n emi

sso

ns fr

om our o

per

atio

ns by 2025

and f

rom o

ur ﬁna

ncng by 20

Red

uct

ion in ca

rbon

footprint from

evi

s yea

Sustain

ablity Aspirat

ons

achiev

ed or on track





.

2020: 78

.4%



2020: 37%



.



2020: 29



.



2020: 29

Mass

etail business

e help ou

r client

s prosper an

d deliver

yday

anki

ng solutions by in

tegrat

our se

vices into t

heir digtal lives

New di

gtal solutions, stra

tegic partnerships and

advanced an

alytic

s are instr

umental to ou

r busines

enablin

g us to signﬁcantly in

crease o

ur reach and

relevance to s

ve client

s in a meaningf

ul way

supp

orting o

ur Stand o

f Liftng Par

ticpation

. W

e are

•

ansf

orm

ing to a d

igta

l-ﬁrs

t mod

el and b

uild

ng ena

bler

s to b

the part

ner of choice to leading global and regional companie

•

Enhancing our value propositon and deepen

ing our capabilties

acr

oss d

igtal s

ale

s and ma

rket

ing as we

ll as da

ta an

d anal

ytic

•

Grow

ing th

e shar

e of ou

r Mas

s Retail c

lien

t inco

me fr

om new

innov

atve business

odels

ss ma

rket act

ive clie

Percentage of digtal sales

for R

etail Products

.



2020: 7

.6m



2020: 69%

xclu

des CC

IB, p

riva

te ba

nk an

d busi

nes

s ban

kin

g clie

come f

rom d

igt

al int

iat

ves

, inn

ovat

on an

d tran

sfo

rma

tio

n of th

e core

e maj

ort

y of w

hic

h will c

ome f

rom n

ew and u

pgr

ade

d pla

tfo

rms a

partnerships

supplem

ented selectively

by new business v

ent

ures

’

helping

emerging m

arkets

in our

footpri

nt reduce c

arbon emiss

ons as fast

as possib

le, without s

lowing d

evel

opment,

puttin

g the world on a su

staina

ble path to

net z

ero b

y 2

050. W

e sta

nd for a r

apid, j

ust

tra

nsit

on to net z

ero wher

e it mat

ters most.

Our plan to achieve net z

ero target

s has

three a

ims: red

uce emiss

ons, c

atalyse

ﬁnanc

partnerships, and acc

elerate

new solutions.

ccelerating

Zer

•

The wo

rld ne

eds t

o reach

net ze

ro by 2050 or fa

a climate catastrophe

with inc

reasng ex

treme

weat

her event

s and

climate-indu

ced migraton

•

e ha

ve a uniqu

e role to

pla

y in facilt

ating a j

ust

tran

sito

n to net zero

car

bon wh

ere it ma

tter

mos

t: acro

ss A

sia, Af

rica

and t

he Middl

e East

•

e aim t

o redu

ce the

emisso

ns associat

ed with

our ﬁna

ncng activti

es to

net ze

ro by 2050, with 2030

inte

rm targ

s in our mo

carbon-in

tensve sectors.

e aim t

o redu

ce absol

ute

ﬁnanced th

ermal coal-

minn

g emis

sons by 85 p

cent by 2030, in a

ddito

n to

a proh

ibtion o

n ﬁnancn

new or expanding

coal-ﬁr

ed power p

lant

and reve

nue-b

ased c

arbo

inte

nst

y (

e page 4

6 for

deﬁnt

ion

) of 6

3 per ce

for p

ower

, 3

3 per cen

respect

ively

for steel

and

minng (

cluding th

ermal

coal m

inng) and 3

0 per

cent f

or oil and g

•

e aim to catalyse ﬁnance

and part

nerships to scal

impact

, capital and

climate solution

s to

here

they a

re nee

ded mo

st,

incl

udng a pl

an to mob

ilse

00 billo

n in green a

transito

n ﬁ

nance bet

ween

21 and 2

030

•

e aim t

o accele

rate new

solutions to support a just

tran

sito

n in our ma

rket

includ

ng a new ded

icated

ransiton A

ccelerat

ion

eam to su

ppor

t clien

ts in

high-emittng

sectors

, a

launch sustainable

produ

cts

•

e aim t

o reach n

et zero

carbon emissons from our

own op

erat

ions by 2025

Stand up

to c

limate

change

Our

Sta

The se

vere impacts of climate change,

stark inequalty and unfair aspect

s of

globalisaton impact e

veryone. W

e are

taking a stand, sett

ing long-term ambitons

for our role on these is

sues where they

matter mo

st. This wo

rks in unison with

our strat

egy

, stre

tching our thinkng, our

action and our leadership to accelerate

our gro

•

e have deﬁned thre

e Stands – which is o

ur name

for long-ter

m ambitons on societal ch

allenges

•

These are n

ot separate f

rom our strateg

They are integral to d

eliverng and accelerating

our strat

egy

, becaus

e they will stretch our t

hinkng,

our action and our leadership

•

e will use our uniqu

e abil

ies to connect the

capital

, people and ideas needed to address

the sign

ﬁcan

t socio-ec

onomic c

hallenges

and

oppor

tunites of ou

r time

•

Each of these St

ands impact

s how we engage

with ou

r clients and deﬁne t

he fut

ure of our

soci

etes

•

e have alread

y made signﬁcant progres

s and

we will be set

ting long-term go

als as we deliver

near

-te

rm change

•

This is not p

hilanthropy; we will drive scalable,

sustain

able commercial growt

h and transfor

our f

ranchise. Y

ou will s

ee us increasngly a

ctive

in these a

reas

Left

José Viñals

Group Chair

man

Right

Bill Winter

Group Chief

Executive

re inf

orm

ato

n see

e 31

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

Our Stands

’

s our goal to su

pport 500

,000 com

panies

to imp

ve wor

king

and environme

ntal

standa

rds and giv

e ever

one

the cha

nce

to particpate in the world economy

so grow

th be

comes fair

er and m

ore

bala

nced. W

e stand fo

r a new model of

globalisat

based on transparenc

incluson

and dialo

gue.

Glob

alisaton has lift

millo

ns out o

f povert

y, but

too ma

ny people

have been

lef

t behi

nd, and d

ivsi

on and

ine

qualt

y ha

ve grown, a

long

with n

egativ

e impacts on

our planet.

e be

lieve in th

e pote

ntial

of globalisat

on to enable

eco

nomic gr

owth an

increase

rticpa

tion i

n the

wor

ld econ

omy – but in it

cur

rent fo

rm, it m

ust be

reimagned to ensure that

it be

st ser

s all peo

ple,

every

where.

e ad

vocate a n

, mo

inclusve

del

globalisaton

ased on

transp

arency and fairn

ess,

build

ng trust

and pr

omoting

the e

xchange o

f views a

inn

ovaton t

o sol

ve the

world’s

toughest problems.

As a l

eadin

g trade b

ank

we can con

nect t

he capit

al,

expertise

and ideas

needed

to dr

ive new st

andard

s and

create innovatve solutions

for more equitable

and

sustainab

le growth.

Specif

cally

, we aim to:

•

Increase transp

arency

across supply chai

ns to

enable consumer choice

and drive

responsible trade

•

ing enh

anced l

evels of

secur

ity

, tracking and

conﬁdence to ﬁnan

cal

acti

vt

•

Provid

e acces

s to the b

est

and m

ost in

novat

sol

utio

ns to pr

ivate an

public sector

•

Make

global trade more

equitable b

y impro

vng

acce

ss to ﬁn

ance for

smaller suppliers that often

lack adequate ﬁna

ncng

esetting

lob

alis

aton

e’

e determined t

o imp

rov

e the live

s of

1 bill

on p

eople and their communit

unleashing the ﬁ

nancal potenti

al of women

and sm

l businesses i

n our co

re mark

•

Inequ

ality

, alon

g with gaps

in economic

incluson

our key ma

rket

s, me

ans

that many

young people,

wome

n and sma

busine

sses str

uggle to gain

access to

the ﬁnanca

stem to s

ave for t

heir

ture

s and grow t

heir

bus

ines

ses

. W

e want to

democratise

wealth

manage

ment and make

it easily acc

ssible

the mass seg

ment at

a low cos

•

Through

partnerships

and t

echno

logy, we can

exp

and th

e reach an

scale of ﬁnancal ser

vice

– drivng acce

ssible

bankin

g at

scale and

connecting clients to

opportunites that promote

access to ﬁnance an

economic inclus

devel

oping n

ew digtal

business models, we’

re able

to grow o

ur bus

ines

s while

unleashing opportunit

y for

mill

more people

Lif

tng

ticpa

tion

Stand up fo

equ

al ac

ces

ﬁnancal

suppor

for women

and sma

businesses

e sta

nd for a

new model of

glob

alisato

based on

ansp

aren

incl

uson

and

dialog

re inf

orm

ato

n see

age 9

re inf

orm

ato

n see

e 49

Standard Chartered

– Annu

al Repo

rt 2021

Strategic

report

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic report

Client

segment revie

Segm

ent ov

view

Cor

porate, Comme

rcial and Institutonal B

anking

suppor

ts clien

ts with t

heir transactio

n banking,

ﬁnancal market

s, cor

porate ﬁnance an

d borrowing

need

s across 49 markets

. W

e pro

ide solutio

ns to

more than 2

2,00

0 clients in s

ome of the world

’

fastest

-growing economies and most ac

trade corridors

Our clients include governments, banks

, in

vestors

, and

and l

arge cor

porat

ions o

perat

ing or inve

stng ma

inly in A

sia,

rica an

d the Mid

dle East

. Our s

trong a

nd dee

p local

presence e

nables us to hel

p co-create bespok

e ﬁnanc

solutions and connect

our clients multilaterally to i

nvestors,

sup

plier

s, bu

yer

s and sell

ers

, enab

ling th

em to move cap

ital,

man

age ri

sk and inves

t to crea

te wealt

h. Ou

r client

s repr

esen

a larg

e and imp

ort

ant par

t of the e

conom

ies we se

ve.

Cor

por

ate, Co

mmerci

al and Ins

titu

tonal B

anki

ng is at th

hea

rt of t

he Gro

’

s s

hare

d Purp

ose to dr

ive com

merce an

pros

per

y throu

gh our un

ique di

verst

e are co

mmitt

ed to su

stain

able ﬁna

nce, del

ivern

g on our

ambi

ton to in

creas

e supp

ort an

d fun

ding fo

r ﬁnancal

pro

duct

s and se

vices t

hat ha

ve a posi

tve imp

act on ou

communites and

the environment a

nd support sustainable

eco

nomic gr

owth

Str

ategic priortie

•

Deli

ver sus

tain

able g

rowt

h for cl

ient

s by leve

ragi

ng our n

wor

to fa

cilt

ate tr

ade, c

apita

l and inve

stm

ent ﬂow

s acro

ss ou

footprint markets

•

Generate high-qualit

y return

s b

y improvng f

unding qualit

y and

income mix

, gro

ing capital-lite

income and drivn

balance shee

velocit

y while maintaning discplined risk mana

gement

•

Be the leading digtal banking platfor

m, providng integrated

luti

ons t

o cate

r to our c

lien

ts’ n

eed

s and en

hanc

e clien

exper

ience, and partner

ing with third parties to expand capab

il

ties

and a

cces

s new cl

ient

•

cce

lerate our sustainable ﬁnance of

fering to our client

hrough

pro

duct i

nnova

ton an

d enab

ling t

ran

sito

n to a low-

carb

on f

utu

Prog

ress

•

Our un

der

lyi

ng inc

ome dr

iven by d

iver

sﬁed p

rod

uct su

ite

and e

xpa

nded c

lien

t solu

tio

ns de

spit

e the lo

w inte

rest r

ate

environment. Our network income currently contributes to

4 per ce

nt of to

tal CCI

B inco

•

Improv

d balance sheet qualit

y with investment

-grade net

exp

osu

res re

pres

ent

ing 6

4 per c

ent of t

otal c

orp

orat

e net

exp

osu

res (2020: 51 p

er cen

) a

nd high

-qua

lit

y op

erat

ing ac

coun

bal

ance

s stab

le at 6

3 per ce

nt of T

nsa

ctio

n Bank

ing an

cur

ites S

ces cu

stom

er ba

lanc

es (2020: 6

4 per ce

nt)

•

Migra

ted mo

re th

an 65,0

00 cl

ient e

ntit

es to o

ur S2B

NextG

platform a

nd increased S

2B cash

payment transa

ction

volumes

by 17 pe

r cent

•

e are o

ne-t

hird of t

he wa

y toward

s devel

opin

g our $

1 billo

income sustain

able ﬁnance franchise

Performance highlghts

•

Under

ing pr

oﬁt be

fore t

ax of $

3,124 millo

n up 57 p

er cent

imar

ly dr

iven by c

redi

t impa

rme

nt rel

eas

es, p

art

iall

y of

fse

by lowe

r inco

me and h

ighe

r exp

ense

•

Under

ing op

erat

ing in

com

e of $8

,407 mil

lon dow

n 1 per c

ent

mai

nly d

ue to low

er Cas

h Man

agem

ent in

com

e impa

cted by a l

int

eres

t rate e

nviro

nme

nt and l

ower Ma

cro T

rad

ing in

come o

n the

ck of lowe

r mar

ket vol

atilt

y a

nd tig

hter s

prea

, par

tiall

y of

by st

rong p

erf

orm

ance in C

redi

t Mar

ket and T

•

Goo

d bala

nce sh

eet m

ome

ntum w

ith t

otal a

sse

ts u

p 5 per ce

nt,

of w

hich lo

ans a

nd adv

ance

s were up 1

1 per ce

•

Under

ing Ro

TE in

crea

sed f

rom 5

9 p

er cen

t to 9

.6 p

er cen

Corpor

ate,

omm

cial

and

ituto

nal

Ban

kin

KPI

Proﬁt before

taxation









57%

underlying basis

Risk

-w

eighted assets (





$2bn





m

70%

statutor

y basis

.



10bps

statutor

y basis

Retur

n on tan

gible e

quit

(

)

.



370

underlying basis

Proportion of

low

-ret

urning

client RW

.8%

Capital-lite

inc

ome a

s a

are of t

otal i

ncom

42% sha

re of tot

al incom

educe perennial sub-optimal

d brin

g dow

n the p

rop

ort

ion

of l

ow-re

tur

ning c

lie

nt RW

Analysis:

Our perennial

sub-optimal

A h

as re

duce

d 49

.6 p

er ce

year

-on-year

. The proportion

low-returning client R

A decreas

om 19

5 pe

r cen

t in 2020 to 17

8 per

cen

t in Nov 202

1, dr

ive

n by RW

optimsation efforts undertaken.

Not me

ani

ngf

ul du

e to se

gme

integraton

Resha

pe th

e inc

ome mi

x towa

rds

capital-lite income.

Analysis:

Share of capital-lite

come

cre

ase

d slig

htl

y to 42 pe

r cen

t in

2021 d

ue to t

he low i

nte

rest r

ate

environment, mitgated b

y strong

growth in liablites.

econcilations

rom

underl

ying

to statutor

y and

deﬁntions of

APMs can be

und

on pages 80–85

Per

enni

al su

b-op

tim

al cli

ent

s are c

lie

nts w

ho ha

ve re

tur

ned b

elo

w 3 per ce

nt RoRWA for t

he pa

st th

ree ye

ars

pita

l-li

te inc

ome r

efer

s to p

rod

uct

s wit

h low RW

A c

ons

ump

tion o

r of a no

n-f

und

ed na

tur

e. Thi

s mai

nly in

clu

des C

ash M

ana

gem

ent an

d FX pr

odu

ior p

eri

ods K

PIs ha

ve be

en re

stat

ed f

ollow

ing a r

eor

gani

sat

on o

f cer

tain c

lien

ts a

cros

s cli

ent s

egm

ent

Our next

-generation T

saction

Banking digtal

platfor

2021

2020

2019

2021

2020

2019

42%

45%

50%

w dig



l porta

launch w

ith Demica

In Oc

tober

, we pa

rtnered with

ﬁntech spec

ialst

mica to t

ran

sfor

m acce

ss to t

he Ba

’s supp

lier

ﬁnance programmes, al

lowing easier enrolment for

ousa

nds o

f supp

lier

s thr

ough a

n onli

ne po

rtal

. The

rta

l help

s supp

lier

s enr

ol in su

pply c

hain ﬁ

nance

pro

gram

mes by u

sing a d

igtal f

ron

-en

d whil

prov

idn

g our te

am th

e abilt

y t

o reac

h out t

o a larg

sup

plie

r bas

e. Thi

s is th

e ﬁrst p

has

e of a st

rate

gic

part

nership bet

ween Standard Char

tered and Demica

and w

e are lo

okin

g for n

ew ways t

o use t

echn

olo

gy to

transform our w

orking capital

solut

ions.

Standard Chartered

– An

nual Re

por

t 2021

Strategic

report

Segm

ent ov

view

Cons

umer

, Private and Bu

siness Bank

ing ser

ves

more than 9

millon

indviduals and

small businesses,

with a fo

cus on the afﬂue

nt and emerging afﬂu

ent

in many of the world

’

s fast

est

-growing cites

. W

provide digtal bankin

g ser

vices wit

h a human

touch to o

ur clients

, with ser

ices spanning acros

deposit

s, p

ayment

s, ﬁnancng prod

ucts and W

ealth

Managem

ent. Private B

anking of

fers a f

ull range of

investment, cre

dit and wealth planning pro

ducts to

grow

, and protect

, the wealth of high-net

-w

rth

indvidual

s. W

e also suppor

t our client

s with their

business banking

eds.

e are c

losel

y inte

grate

d with t

he Gro

’s other cl

ient

segment

for example, w

e of

fer emplo

yee banking ser

vices

to Corporate, Commercial and I

nstitutonal Banking clients,

and C

onsu

mer

, Pr

ivate a

nd Bus

ines

s Bank

ing als

o provide

a sou

rce of hig

h-quali

y liqudit

y fo

r the G

roup.

Incr

easin

g levels o

f wealth a

cros

s Asia

, Afr

ica and th

e Middl

East su

ppor

t our o

ppor

tunit

y t

o grow the b

usine

ss sus

tainab

e aim t

o uplif

t clien

t exper

ienc

e, improvn

g prod

uctiv

t

y by

drivn

g dig

alisaton and cost

-efﬁcencies

, and simplf

ying

processes.

Str

ategic priortie

•

eading internato

nal Afﬂuent

franchise known

for outstanding

per

sonalised wealth adv

ice and ex

cep

tional client experien

acr

oss o

ur top 1

0 mar

ket

•

single wealth c

ontinuum platform with

distnctive segment v

alue

propositons to

xim

se client

relationshps

•

roﬁtable Person

al Banking franchise enab

led by

artner

ships,

data and digtal infrastr

ucture

•

Dig

tal-led, personalised and contextual client

engagem

ent

augmented by

amless

omnichannel e

xperience

•

New way

s of wor

kin

g as sta

ndar

d appr

oach

, for fa

ste

, b

ett

more agile

execution

•

Strategic

and transformative in

vestment decis

ons deliver

syne

rgies and consistent client exper

ience, aligned across market

Prog

ress

•

aunched W

ealth Management Connect to

capture northbound

and s

out

hbo

und t

rans

acti

ons fo

r Gre

ate

r Bay A

rea inve

sto

•

Intro

duct

ion o

f the S

tand

ard Ch

arte

red-

INSE

AD Wealt

h Acade

which aims

to upskill the knowledge of

all relationshp

anagers

and wealth specialst

•

Incre

ase i

n digt

al sale

s, up o

ver 12 pe

r cent d

rive

n by invest

men

ior

tise

d to gr

ow digt

al sal

es in Per

son

•

sonal

‘scale through automation

’ transformation accelerated b

acquirng custom

ers from part

nerships

, engaging and cross-selling

digta

lly

, and servicng them

through low

-cost c

hannels

•

Launc

h of new p

art

ner

ship

s wit

h Home C

redi

t in Viet

nam an

edivo i

n Indo

nes

ia. Ou

r Atom

e par

tne

rsh

ip went l

ive in In

don

esia

and w

ill go l

ive acr

oss o

ur fo

otpr

int i

n 2022

Performance highlghts

•

Under

ing pr

oﬁt be

fore t

ax of $1

,071 mil

lon wa

s up 51 per c

ent

iven by hi

gher i

ncom

e and lo

wer cre

dit im

par

ment

•

pen

ses wer

e up 3 pe

r cent (

p 2 per c

ent co

nsta

nt cur

ren

) o

well-

manage

and broadly ﬂat c

onstant currency ex

cluding our

investments in v

enture

•

Under

ing op

erat

ing in

com

e of $5,

733 m

illo

n was up 1 p

er cen

(ﬂat co

nsta

nt cur

ren

). As

ia was u

p 1 per ce

nt and A

ica an

d the

Mid

dle Eas

t was up 2p

er cen

•

Strong

income momentum growth from

ortgages up

cent

and c

redi

t card

s and pe

onal l

oans u

p 5 per c

ent wi

th imp

roved

margins and balance she

et growth and 12

er cent gro

wth in

alth M

ana

geme

nt. T

hes

e were o

set by D

epo

sit ma

rgin

compression, impacted by

a lower interest

rate environment

•

Under

ing Ro

TE in

crea

sed f

rom 6

9 p

er cen

t to 10.

2 per c

ent

Con

sumer

, Priv

ate

and

ine

ankin

KPI

Proﬁt before

taxation









51%

underlying basis

Risk

-w

eighted assets (

b

$2bn

$m

29%

statutor

y basis

.



160bps

statutor

y basis

Retur

n on tan

gible e

quit

(

)



.



330bps

underlying basis

Afﬂuent assets

under management

Digtal adoption

63% of cli

ent

Align t

he G

rou

’s ser

ice t

o how

clients want

to interact

and increase

ﬁce

ncy by r

edu

cin

g the a

mou

nt of

manual process

ing.

Analysis:

Online applicatons have

continued to

grow with the

proportion

of Retail Banking clients that are

dig

tal

-act

ive u

p fro

m 60 pe

r cent i

2020 to 6

3 per c

ent at t

he en

d of 2021

Afﬂuent

sets under

management –

grow a

nd deepen

client relationshps,

improve

investment

pene

tration

and attract

new c

lie

nts

Analysis:

Assets under management

and at $

250 b

illo

n in 2021

, deli

ver

ng

gro

wth o

f 6 per c

ent

2021

2020

2019

63%

61%

2021

2020

2019

11%

artne

ring with

edi

on digt

loa

e p

art

nere

d wit

h Indo

nes

ian cre

dit p

latf

orm K

redi

to of

r digt

al cash l

oan

s and ‘

buy n

, pa

y late

r’ t

aid ﬁnancal incluson. The loans

, which are available

for M

s Retail

, do no

t nee

d to be ve

rif

ed f

ace-

to-f

ace

and m

ake us

e of Kre

divo’s AI-

dri

ven cre

dit s

cori

ng. Th

partnership faciltates

access to credit a

nd supports

e growt

h of e-

comm

erce a

s well as o

fﬂi

ne ret

aile

Rec

onci

lat

ion

s fro

m und

erl

yin

g to st

atu

tor

y an

d deﬁn

tio

ns of A

PMs ca

n be

found on

pages 80–85

Standard Chartered

– Ann

ual Rep

t 2021

Strategic report

Regional reviews

Region ov

view

The A

sia region has a lon

g-standing and deep

franchis

e across the m

arkets and som

e of the world

’

fastest

-growi

ng economies. The region

generates

over two-third

s of the Grou

’s income from it

extensi

e n

work of 21 market

s. Of th

ese, Hong

Kong and Singapore cont

ributed t

he highest income,

under

pinned by a diversﬁed franchi

se and deeply

rooted presenc

The r

egion i

s highl

y interco

nnec

ted, w

ith Chin

a’

s e

conomy at

s core. O

ur glob

al foot

prin

t and str

ong re

gional p

resen

ce,

distnctive pr

opositon and continued in

vestment positon

us st

rongl

y to capt

ure opp

ort

unite

s as they a

rise f

rom th

continung

eni

up of China’

s economy

The r

egion i

s bene

ﬁtng fr

om risn

g trad

e ﬂows, i

ncludn

acti

vt

y gen

erate

d from t

he Be

lt and Road i

ntiat

ve, conti

nued

str

ong invest

ment

, and a r

isng mid

dle cla

ss whi

ch is dri

vng

con

sumpt

ion grow

th and im

provng di

gtal con

necti

vt

Str

ategic priortie

•

Leverag

e our n

work s

tren

gth t

o ser

ve t

he inb

oun

d and ou

tbo

und

cro

ss-bo

rde

r trad

e and inve

stm

ent ne

eds o

f our c

lient

s, p

art

icu

larl

across high

-growth corridors e.

g. China–ASEAN

•

Capture

oppor

tunites

is

ng from China’

s opening, includ

ng the

eat

er Ba

y Area (GBA), R

enm

inb, B

elt an

d Road i

ntia

tve, o

nsh

ore

capital market

s and

ainland wealth

•

Stre

ngth

en ou

r marke

t pos

iton i

n Hon

g Kong and S

inga

por

and resha

our Korea,

India and

Indonesia franchises

impr

ove retu

rns

•

urbocharge our

ﬂuent

and W

ealth Manage

ent

businesses

through differentated propositons and

ser

vice

•

Continue to invest in

echnology,

digtal capabilties and

part

nerships to enhance client exp

erience and build

scale efﬁcently

•

Support client

s in

their sustainab

le ﬁnance and transiton needs

Prog

ress

•

China business has grown signﬁcantly

, almost dou

bling underlyin

operatin

g proﬁt, driven by W

ealth Managemen

t, Financal

Mar

ket

s, T

de and u

nse

cure

d pro

duct

s. T

he inc

ome we h

ave

oked f

rom cl

ient

s ba

sed i

n China h

as gro

wn 9 per c

ent an

China remai

roup

’

s largest network income

orignator

•

Hong Kon

g and Si

ngap

ore, t

he hi

ghes

t inco

me con

trib

uto

rs in o

gion

, have d

elive

red s

tron

g und

erl

ying i

ncom

e grow

th dri

ven by

ealth Man

agement, mainl

y from Afﬂuent client

s and F

inan

cal

Mar

ket

s, p

artl

y of

et by con

tinu

ed ma

rgin co

mpre

ssi

on. O

ur dig

tal

age

nda

s have p

rogr

ess

ed; and o

ur vi

rtu

al ba

nk Mox cu

rren

tly h

a 25 p

er cen

t mar

ket sha

re of de

pos

its a

mong v

tual b

ank

s in

Hong K

ong. Singapore is currently e

ploring

a digtal bank

venture,

whi

ch wil

l allow u

s to exp

and o

ur rea

ch and t

ouc

hpoi

nts i

n the

cou

ntr

y. W

e ha

ve succ

ess

ful

ly cre

ate

d an ASE

AN h

ub in Si

ngap

ore,

consolid

atng our subsidaries in Malaysia, Th

ailand and Vietnam

•

e con

tinu

e to inves

t in th

e GBA

. W

e ar

e amon

g the ﬁr

st b

atch o

banks to launch

Wealth

Management Connect, we successfully

com

plet

ed ou

r GBA C

entr

e to be

tter s

upp

ort CC

IB and CP

BB clie

and we are progressing with our sust

ainable ﬁnance platform buil

•

rea an

d Indi

a have d

eli

vered s

tro

ng grow

th in un

der

lyi

ng pro

ﬁt

fore t

ax of 12 p

er cen

t and 5

3 per ce

nt, d

rive

n by pro

gres

s in CPBB

and c

onti

nue

d focu

s on bra

nch op

tim

sati

on and p

rod

ucti

vt

Performance highlghts

•

Under

ing pr

oﬁt be

fore t

ax of $

3,116 mill

on was u

p 11 per c

ent

mai

nly d

ue to low

er cre

dit imp

arm

ent c

harge

s, p

art

ially o

t by

hig

her ex

pen

ses a

s we cont

inue t

o inves

t in our s

trat

egic i

ntia

tve

•

Under

ing op

erat

ing in

com

e of $10,

8 mill

on was u

p 1 per ce

(

dow

n 1 per c

ent co

nsta

nt cur

ren

). St

rong Fi

nanc

al Mar

ket

Lending, Mor

tgages and W

ealth Mana

gement growth, part

et by lowe

r tra

ding in

come f

rom l

ower ma

rket vo

lati

lt

•

Loans a

nd adv

ance

s to cus

tome

rs we

re up 11 p

er cen

t mainl

y fro

strong gro

th i

n Mortgage

and Corporate Lending. Customer

acc

ount

s wer

e up 6 pe

r cent

, wit

h stro

ng grow

th in r

etai

l curr

ent

and saving

s accounts and T

ransaction Bank

ing cash balances

•

WA decre

ase

d by $4 b

illo

n from c

ont

inue

d focu

s on RW

opt

ims

atio

n and p

art

ly fr

om a mo

del ch

ange b

ene

ﬁt in Kore

sia

Proﬁt before tax

ation







11%

underlying basis

Risk

-w

eighted assets (

$

bn

$4bn

$



m

statutor

y basis

eaki

ng boundaries

with the Ba

ring Asia

e Equit

und

In 2021

, we wor

ked wit

h the B

ari

ng As

ia Pri

vate Eq

uit

Fun

d to cre

ate th

e reg

ion’s ﬁrs

t ESG

-lin

ked sub

scr

ipt

facilty with a

carbon-of

fset mechanism, w

th up

.2 bi

llon

. Unde

r the t

erm

s, any inve

stm

ent

s mad

st mee

t ESG

-lin

ked cr

iter

a; if th

e crit

er

a are no

t, th

e clie

nt wil

l purc

hase c

arb

on of

s. Th

e deal i

als

o the ﬁ

rst o

f its k

ind t

o incl

ude ge

nde

r diver

st

y KPI

as p

art o

f its i

nvestm

ent c

rite

ra.

Loa

ns and a

dvance

s to cu

sto

mer

Asia

72% of G

rou

Inc

ome s

plit by key market

Hong K

ong

33%

Kor

11%

Singapore

15%

Others

Standard Chartered

– Annu

al Rep

ort 202

Strategic

report

Region ov

view

e have a deep-roo

ted herita

ge in Africa & Middl

East and are present in 2

5 markets

, of which the UAE,

Nigera, Pakist

an, K

enya and Ghan

a are the largest

by income. W

e are present in the l

argest number of

sub-Saharan A

frican mar

kets of any inter

natonal

bank

ing group.

A rich history

, deep client rela

tionshps and

a unique footprint

in th

e regio

n, as well a

s acros

s cent

res in A

sia, Europ

e and th

Ame

rica

s, enab

le us to s

eamle

ssl

y supp

ort ou

r client

s. A

ica &

Middle E

ast is an important element

of global trade

and

invest

ment co

rrid

ors

, incl

udng th

ose on Ch

ina’s Belt an

d Road

inti

atve, an

d we are well pl

aced to f

acilta

te the

se ﬂows

Positve

macro-trends (

oil, commodity and U

AE propert

prices

)

are drivng ma

et opportunites, but c

hallenges and

unce

rtai

ntes ex

ist in t

he near t

erm

. W

e’

re c

onﬁdent t

hat th

opportunites in the regi

on will s

upport long-term sustaina

ble

grow

th for th

e Gro

up. W

e cont

inue to i

nvest sel

ecti

vely and

dri

ve efﬁcencies

Str

ategic priortie

•

rovide best

in-class structuring a

nd ﬁnancng

solutions and d

rive

creation through client intiatves

•

nvest

to accelerate growth in

dif

ferentated

inter

natonal

net

work

and Afﬂuent

client businesses

•

vest in market

-leadin

digtisaton intiatves in CPBB to

pro

tec

t and grow m

arke

t shar

e in core m

arke

, cont

inue w

ith

our transformation agenda

to recalibrate our

etwork and

streamlin

e structures

•

Be an in

dust

y lea

der in t

he tra

nsit

on to n

et zer

o acros

s th

e regi

Prog

ress

•

e hav

e stre

ngth

ene

d our f

oot

prin

t wit

h a new bra

nch in S

aud

Arabia in 2

021

•

Our

role leading severa

l marquee transactions across the

region

reﬂ

ect

s our s

tron

g clie

nt fra

nchi

se. W

e con

tinu

e to be t

he ma

rket

leader in bond

suance

and Islamic Sukuk a

nd achie

ved our

highest

-ever debt

capital mark

notional volumes

•

Our Pro

ject a

nd E

xpo

rt Fina

nce te

am clo

sed m

ore t

han $2 bi

llon in

sustainable

ﬁnance deals

in the region,

which includes

one of the

lar

gest w

aste t

o ene

rgy pr

ojec

ts gl

obal

ly and o

ne of t

he lar

gest

sin

gle-

site s

olar p

roje

s in the wo

rld

•

Our di

gtal t

rans

for

mati

on int

iat

ves in A

fri

ca are b

ear

ing fr

uit

98 pe

r cent o

f clie

nt acq

uist

ions a

nd 80 p

er cen

t ser

icng i

s done

dig

tall

. Di

gtal b

ank cu

stom

er dep

osi

ts gr

ew 43 pe

r cent t

$189 millon, and through cross-sellin

g they

are increasngly tak

ing

up o

ther w

ealt

h, ins

uran

ce and l

endi

ng pro

duct

. A majo

r mile

ston

was a

chieve

d wit

h the ﬁr

st ph

ase o

f the d

igta

l bank l

aunc

hed i

Pak

ista

n in Dec

embe

r 2021

•

Strong Financal

Market

s and

ealth Man

agement moment

um;

Fina

ncal M

arket

s in

come wa

s up 9 pe

r cent a

nd was at t

hig

hest l

evel in ﬁ

ve year

s; and Wealt

h Man

agem

ent in

come

grew 2

3 pe

r cent a

nd was a

t the hi

ghes

t level s

ince 201

•

Cont

inun

g cost d

iscp

line h

as all

owed inve

stm

ent

s to con

tinu

roug

h the c

ycle. T

he nu

mber o

f bran

ches d

ecr

eas

ed by

20 pe

r cent an

d hea

dcou

nt was 1

2 per ce

nt lowe

Performance highlghts

•

Under

ing pr

oﬁt be

fore t

ax of $

856 m

illon w

as the h

ighe

st sin

2015 a

nd was dr

ive

n by redu

ced c

redi

t impa

rme

nt, h

ighe

r incom

and low

er expens

•

Signﬁc

ant tu

rna

roun

d in UAE wit

h a retu

rn to p

roﬁta

blit

y in 202

•

Under

ing op

erat

ing in

com

e of $2,4

6 mill

on was u

p 3 per ce

(

up 5 p

er cen

t cons

tant c

urr

enc

) ma

inly d

ue to gr

owth i

n Financ

al

Mar

ket

s and Wealt

h Mana

geme

. Incom

e was up 7 p

er ce

(

up 9 p

er cen

t cons

tant c

urr

enc

) in Af

ca, wh

ile it wa

s ﬂat ac

ross

Mid

dle Eas

t, N

ort

h Afr

ica an

d Pakis

tan

•

Loans a

nd adv

ance

s to cus

tome

rs we

re dow

n 6 per ce

nt and

customer accounts were up

8 per cent

Africa and the

ddl

e Ea

Proﬁt before tax

ation

$



underlying basis

Risk

-w

eighted assets (



$2bn

831m

$906m

statutor

y basis

igtal

ban

king

gro

acros

s Africa

d the Mi

ddl

e East

r digt

al ban

king i

ntia

tve

s in Af

rica co

nti

nued t

grow i

n 2021 as we ga

ine

d 860,0

00 cus

tom

ers

, alm

ost

doubling our

existng base ac

ros

continent

dig

tal ba

nk cus

tome

r dep

osit

s gre

w 43 per c

ent to

89 mill

on and we l

aun

ched d

igta

l bank

ing in

Pak

ista

n – brin

gng t

he num

ber o

f mar

kets w

her

we of

fer o

ur se

vice

s to 10.

Loa

ns and a

dvance

s to cu

sto

mer

rica & Mi

ddle East

7% of G

rou

Inc

ome s

plit by key market

Ken

10%

Pakistan

10%

UAE

Others

58%

Standard Chartered

– Annu

al Repo

rt 2021

Strategic report

Regional reviews

Loa

ns and a

dvance

s to cu

sto

mer

Europ

e & Amer

icas

21% of G

rou

Inc

ome s

plit by key market

Others

Region ov

view

The G

roup suppor

ts client

s in Europe & Amer

icas

through hu

bs in London, Frankfur

t and New Y

k as

well as a presen

ce in sev

eral o

ther market

s in E

rope

and Latin Amer

ica. Our exper

tise in A

sia, Afr

ica and

the Middle East allows us to o

ffer our clie

nts in the

region uniqu

e net

work and product cap

abil

t

ies.

The r

egion g

enera

tes sig

nﬁcant inco

me for t

he Gro

’s

Corporate, Commercial & Institutonal Banking business.

Clien

ts b

ased i

n Europe & A

meri

cas make up ar

ound o

ne-thi

of th

e Grou

’

s CCI

B incom

e, with t

hree

-quar

ter

s of clie

inco

me boo

ked els

ewher

e in the ne

work ge

nerat

ing above

average returns.

In add

iton to b

eing a key or

ignat

ion cent

re for CCI

B, the

region offers local, on-

he-ground

exp

ertise and

solutions to

help i

nter

naton

ally min

ded cl

ient

s grow acro

ss Europ

e &

Ame

rica

s. The r

egion i

s home t

o the G

roup

’s two b

igges

ymen

t clear

ing cen

tres an

d the lar

gest t

rading ﬂ

oor wit

mor

e than 8

0 per cen

t of the re

gion’s income o

rign

ating

from Financal Market

s and T

rans

action Banking pro

ducts

r Privat

e Bank

ing bus

ines

s focus

es on se

ving cl

ient

s with

link

s to ou

r foot

print m

arket

Str

ategic priortie

•

Leverag

e our n

work c

apab

ilti

es to co

nnec

t new an

d exis

tng

rpo

rate a

nd Finan

cal In

sti

tut

ons cl

ient

s in t

he west t

o the

fastest

-gr

owing and h

ighest

potential economies

across

our footprint

•

Grow th

e bus

ines

s we cap

tur

e from i

nbo

und tr

ade ﬂo

ws fr

om our

footprint markets

•

Incre

ase t

he cap

ital b

ase o

f our Fran

urt h

ub to co

ntin

ue gro

wing

business with our continental E

uropean clients

•

ther

develop

our sustainable ﬁnance

product offering and risk

managem

ent capabilties

•

Enhance capital efﬁcency

, maint

an

rong risk oversight and

urt

her im

prove th

e qua

lit

y of ou

r fu

ndin

g bas

•

pand a

sse

ts u

nder m

ana

geme

nt in Pr

ivat

e Bank

ing an

d cont

inu

to streng

then the

ranc

hise

Prog

ress

•

Stro

ng grow

th of 7 p

er cen

t in glo

bal cr

oss-b

orde

r bus

ines

s wit

Euro

pe an

d the Am

eri

cas CCI

B clie

nts

•

gnﬁ

cantly expanded our domestic Cash Management

fering

to facil

tate growth opportunites acr

our global

footprint

•

SCB AG enti

ty f

ull

y ope

rati

onal a

s our co

nti

nent

al Euro

pe hub

wit

h the c

apit

al bas

e dou

ble

d in 2021, p

rovid

ng ﬁna

ncal s

olut

ion

for t

he EU2

7 mar

ket and w

ith st

ron

g incom

e grow

th fr

om bo

rpo

rate a

nd Finan

cal In

sti

tut

ons cl

ient

s in Eur

ope

•

Sign

ﬁcant growt

in income from sustain

able ﬁnance products

and expansion

of our susta

inable product

fering

•

Sign

ﬁcant incre

ase in high-qualit

liablites diversf

ying the regi

on’

fun

ding base

Performance highlghts

•

Under

ing pr

oﬁt be

fore t

ax of $

4 mil

lon im

prove

d 6

7 p

er cen

iven by hi

gher i

ncom

e and lo

wer imp

arm

ent

•

Under

ing op

erat

ing in

com

e of $2,0

03 millo

n was up 4 p

er ce

lar

gel

y due to g

rowt

h in T

rade a

nd Len

ding w

ith a re

sile

perfo

rmance in Financal

arkets. T

reasur

y Market

s income was

lowe

r due to s

ignﬁc

ant re

alis

ato

n gain

s in the p

rio

r year. Cas

Management income decreased due to

lower interest margins

alb

eit la

rgel

y mit

gate

d by sign

ﬁcant g

rowt

h in volu

mes

•

pen

ses in

crea

sed by 7 p

er ce

nt larg

ely d

ue to t

he nor

mal

isat

on

of performance-related pay

, increased investment a

chnology

exp

ens

e, and U

S doll

ar dep

reci

ato

•

Loans a

nd adv

ance

s to cus

tome

rs gr

ew 13 per c

ent an

d cust

ome

acc

ount

s gre

w 21 per c

ent

ope and the

Americas

Proﬁt before tax

ation





m

underlying basis

Risk

-w

eighted assets (

$bn

$5bn

$m

69%

statutor

y basis

elpi

g build

gh-s

peed rai

lway

key

In De

cem

ber 2021

, we led o

n a land

mar

k €1.

24 bill

green ﬁnanc

ng package to

develop a ne

w high-speed

rai

lway li

ne in T

key

. T

he 200

km-lo

ng rai

lway t

rack

wil

l link t

he cit

es of B

andır

ma an

d Osma

neli i

n the

rthwe

st of t

he cou

ntr

y, pas

sing t

hrou

gh Bu

rsa a

enişeh

r. This

trans

action,

ndertaken

for the Minstr

of T

asu

y and Fin

ance in T

rkey

, i

s the ﬁr

st o

f its k

ind

for the client.

45%

Setti

our

l fo

r 2

In October

, w

e announced plans to reach net

zer

o carbon emissons from the activties w

ﬁnance b

y 2050

. O

ur plans inc

lude interm

targets for our most carbon-i

ntensve sectors

mobil

sing $300 bill

on in green and transiton

ﬁnanc

ng, and enabling a just transi

ton through

the deployment of a T

ransiton Ac

celeration

eam. The team will launch susta

inable products

and help our cli

ent

s reach their net z

ero target

e a

im to be net zero from our own operations

202

Rea

d mor

e onli

ne at

www

c.c

tze

ccelerating

Standard Chartered

– Annu

al Rep

ort 202

Strategic

report

Standa

Charter

– A

nnu

al Rep

ort 202

Strategic report

roup Ch

ief Finan

cal Of

ﬁcer

’

s r

eview

Chi

Finan

cal

Ofﬁ

’

s re

Andy Halford

Group Chief Financal Ofﬁcer

Summar

y of ﬁnancal p

erformance

The G

roup d

eliver

ed a res

ilent pe

rfor

manc

e in 20

1, ret

urni

to to

p-line gr

owth in t

he seco

nd half o

f the yea

. In con

diton

that rema

ined cha

llenging

the Group deliver

strong

und

erly

ing pro

ﬁt growt

h of 6

1 p

er cent o

n a const

ant cur

renc

sis, an

d 300 b

asis p

oint

s incre

ase to r

etur

n on tan

gible

equ

y (Ro

) to 6 pe

r cent, b

eneﬁt

ng fro

m signﬁcan

tly lowe

cre

dit impa

rmen

t. Inco

me was br

oadl

y ﬂat to 2020 and was

down 1 p

er cent o

n a const

ant cur

renc

y bas

is, reﬂ

ectin

g the

$0.7 bil

lon inco

me lost in 2021 d

ue to th

e low inte

rest rat

envir

onmen

t. Af

ter d

eclinn

g 6 per cen

t in the ﬁr

st half o

f the

year o

n a const

ant cur

renc

y basi

s excludi

ng the im

pact of t

deb

it valuat

ion adju

stme

nt (D

, t

he Gro

up deli

vered 4 p

cent i

ncome gr

owth in t

he sec

ond half. The G

roup grew l

oans

and a

dvance

s to custo

mer

s by 6 per cen

t and del

ivered a

reco

rd level of a

sse

ts un

der man

agem

ent wit

hn W

eal

Management. E

xpenses were up 3

er c

ent on a constant

cur

renc

y basi

s as per

for

mance

-relat

ed pa

y norm

alise

d afte

an abn

orma

lly low 2020 and as t

he Gro

up cont

inues t

increas

e in

ves

tment in strategic intiat

ves. Credit imparment

red

uced by $2 bi

llon reﬂe

cting t

he non-r

epeat o

f prio

r year

sta

ge 3 charg

es and an i

mprovn

g econo

mic bac

kdrop as

mar

kets b

egan an u

neven re

cover

y fro

m the ef

fect

s of

ID-

. Th

e Grou

p remai

ns well cap

italse

d and hig

hly

liqu

d with a C

ommon Eq

uit

y T

er 1 (

T1) rat

io of 14.1 per ce

nt,

whi

ch trans

late

s to a pro fo

rma 13.

5% as at 1 J

anuar

y 202

incorporating upcoming

regulator

y changes, enabl

ing the

ard to ann

ounce a f

ther $

750 millo

n share b

uy-ba

programme to start imm

nentl

All co

mment

y tha

t follows i

s on an und

erl

ying b

asis an

comp

aris

ons ar

e made to t

he equ

ivalen

t peri

od in 2020 on

a reported currency basis, unless other

wise stated.

•

Operating income

was bro

adly ﬂa

t and was dow

1 per c

ent on a con

stan

t curre

ncy b

asis

•

t inte

res

t inco

decreased

1 per c

ent with i

ncreased

volu

mes mo

re than o

set by an 8 p

er cent or 1

0 basi

s point

red

uctio

n in net int

eres

t margin

. The de

cline in t

he net

inte

rest m

argin was a

s a resul

t of the low i

ntere

st rate

envir

onmen

t and is e

quivale

nt to $0.7 b

illon of lo

st incom

Net i

ntere

st incom

e inclu

ded a p

ositve $

171 mil

lon IFRS9

interest income catc

h-up adjustment in

resp

ect

of interest

ear

ned o

n histor

cally i

mpare

d ass

ets

, incre

asng t

he net

interest margin

by 3 basis points

•

her in

com

was ﬂat

, with a re

cord p

erfo

rman

ce in

lth Man

ageme

nt and st

rong f

ee growt

h in T

ransa

ction

Bankin

g offs

et by

r trading income in Financal Markets

and lowe

r reali

saton g

ains in T

rea

sur

•

erat

ing exp

ens

exclu

ding th

e UK bank l

y incre

ase

5 per c

ent but we

re ﬂat on a co

nstan

t curr

ency b

asis a

fte

adjustng for

the normalisaton of performance-related pay

in spi

te of a high

er inﬂat

on enviro

nmen

t. E

xpe

nses we

hel

d ﬂat as th

e Gro

up fun

ded co

ntinu

ed invest

ment in

transfo

rmational digtal capabiltie

s through cost efﬁcenc

acti

ons

. The cos

to-inco

me ratio o

n a cons

tant cur

renc

sis (

excludi

ng the U

K bank lev

y a

nd D

A) incre

ase

2 basi

s point

s to 70 per ce

nt, h

owever in the s

econd

half o

f the year t

he Gr

oup del

ivere

d 260 bas

is poin

ts of

pos

itve op

erati

ng levera

ge. The U

K bank lev

y d

ecre

ased by

31 millon t

o $100 m

illon reﬂe

cting a c

hange i

n the ba

sis

of cal

culat

ion as it is n

ow only c

harge

able on t

he Gro

’s UK

balance she

“

A resilent F

Y’21

perfor

mance

ret

urning

to to

p line grow

th in

2H’21, a

n incr

eased div

dend

and a b

uy-

back

”

Standard Chartered

– An

nual Re

por

t 2021

Strategic

report

•

Credit imparme

was $263 millo

n, a red

uctio

n of

$2 billo

n. Cor

pora

te, Com

mercia

l & Insti

tuto

nal Ban

king

imp

armen

ts d

ecline

d by $1.

6 billon as i

t recor

ded a ne

rel

ease o

f $4

4 millo

n. Con

sume

, Pri

vate & Bu

sines

Ban

king im

parm

ent

s were $285 mi

llon, pr

imar

ly sta

ge 3

imp

armen

, down $

456 mill

on. Ce

ntral & o

ther

imp

armen

ts to

talle

d $22 m

illon, b

roadl

y ﬂat in th

e year

otal cre

dit imp

arme

nt of $263 mi

llon rep

resen

ts a

loa

n-loss r

ate of 7 ba

sis po

int

s, a year-on-year re

duct

ion

of 59 ba

sis poi

nts in o

ur cost o

f risk

•

her im

par

men

was $355 m

illon, an i

ncrea

se of

$370 millon

. This in

clude

s a $30

0 millon im

parm

ent cha

rge

rel

ating t

o the Gr

oup

’s investm

ent in it

s ass

ociat

e China

Boh

ai Bank (B

ohai) follow

ing th

e annou

ncem

ent of it

s mos

recent results. The remainng other impa

ment primarly

relates to aircraf

•

Proﬁ

t from a

ocia

tes an

d jon

t v

ntu

res

increased

7 per c

ent to $17

6 m

illon. I

n 20

20, th

e Grou

p could o

nly

reco

gnis

e its s

hare of t

he proﬁt

s of Bo

hai for t

en mon

ths

due t

o the ti

mng of it

s intia

l publi

c off

ering i

n July 2020,

ter whi

ch the G

roup

’s share o

f Boha

i redu

ced to

16.

26 per c

ent fro

m 19

99 p

er cent

•

Charges relating

restructuring, goodwil

l imparment

and o

the

r item

red

uced by $

6 millon t

o $549 millo

wit

h $125 m

illon high

er rest

ruc

turi

ng cost

s mor

e than of

set

by a non-r

epea

t of $4

89 millo

n good

will im

parm

ent

pri

marl

y relat

ing to In

dia and UAE boo

ked in 2020

•

ation

was $1,03

4 millon o

n a stat

utor

y b

asis

axation o

n unde

rly

ing proﬁt

s was at a

n eff

ecti

ve rate of

28.

8 per ce

nt, a de

crea

se of 8.9 per cen

t compa

red to 2020.

Thi

s reﬂect

s a favo

urabl

e chang

e in the ge

ograp

hic mix

of pro

ﬁts

, the im

pact of a l

ower UK ban

k lev

y whic

h is

non-deductible and

higher proﬁts dilutng

the impact of

non-deductible costs. T

axation on statutory proﬁts was at

an ef

fect

ive rate o

f 30.

9 pe

r cent

, an incre

ase of 1

9 pe

r cent

on th

e unde

rly

ing rate d

ue to re

stru

ctur

ing cos

ts in

curre

d in

low ta

x jurs

dicton

•

Ret

urn on t

angi

ble eq

uit

incre

ased 3

00 ba

sis po

int

s to

6.0 pe

r cent du

e to the in

crea

se in proﬁ

•

Underlyi

ng basi

rnin

gs per s

har

e (EPS)

more than

dou

bled t

o 7

6.2 c

ent

s and sta

tuto

y EPS of 61.

3 cent

incr

ease

d by 50.

9 cen

•

A ﬁnal

dinary divdend

per s

hare of 9 ce

nts h

as be

prop

ose

d along w

ith a sh

are bu

y-back pro

gramm

e of

$75

0 millon w

hich wil

l start i

mmnen

tly

Summar

y of ﬁnancal p

erformance

2021

$millon

2020

$millo

Change

Constant

currency

change

Net inter

est inc

ome

807

6,882

(1)

(2)

Other income

,906

–

Underlying operating income

14,713

–

(1)

Other operating expenses

0,2

75)

(

)

(5)

(

UK b

ank lev

(

(33

Underlying operating e

xpen

ses

375)

,14

(

(1)

Underlying operating proﬁt

bef

ore

imparment and

ion

4,338

(6)

(5)

Credit imparm

ent

63)

(

94)

Other imparment

(355)

nm³

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

164

Underlying proﬁt

bef

ore

taxation

896

508

Restructuring

(507

)

82)

(

32)

Goodwill i

mparment

–

)

100

Other items

)

(

(75)

Statutor

y proﬁt

efore tax

ation

347

1,6

108

119

(

62)

(

20)

(

19)

Pro

ﬁt for t

he yea

2,3

751

nm³

Net i

nter

est mar

gin (%)

1.21

(

Und

erl

ying r

etur

n on tan

gibl

e equit

y (%)

6.0

300

Und

erl

ying e

arni

ngs pe

r shar

e (

cent

)

111

mpa

ris

ons p

res

ente

d on t

he ba

sis o

f the cu

rre

nt pe

rio

d’s tr

ans

act

iona

l cur

ren

cy ra

te, en

sur

ing l

ike-f

or-like cu

rre

y rate

s bet

en th

e t

wo per

iod

Cha

nge i

s the b

asi

s poi

s (bps) dif

fer

ence b

wee

n the t

wo p

eri

ods r

ath

er th

an th

e per

cent

age c

hang

Not meaningfu

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

roup Ch

ief Finan

cal Of

ﬁcer

’

s r

eview

Stat

utor

y ﬁnancal perform

ance summar

2021

$millon

2020

$millo

Change

Constant

currency

change

Net inter

est inc

ome

798

6,852

(1)

(

Other income

–

Statutor

y operating income

14,75

–

(1)

Statutor

y o

perating e

penses

(10,

924

)

(

(5)

(

Statutor

y operating proﬁt

efore i

mparment and tax

ation

3,777

(

12)

Credit imparm

ent

(2,325

)

Goodwill &

Other impa

rment

(372)

(587

)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

196

151

Statutor

y proﬁt

efore tax

ation

347

1,6

108

119

(

62)

(

20)

(

19)

Pro

ﬁt for t

he yea

2,3

751

nm³

Sta

tut

y ret

urn o

n tangi

ble eq

uit

y (%)

4.8

390

Sta

tut

y ear

ning

s per sh

are (

cen

)

0.4

nm³

mpa

ris

ons p

res

ente

d on t

he ba

sis o

f the cu

rre

nt pe

rio

d’s tr

ans

act

iona

l cur

ren

cy ra

te, en

sur

ing l

ike-f

or-like cu

rre

y rate

s bet

en th

e t

wo per

iod

Cha

nge i

s the b

asi

s poi

s (bps) dif

fer

ence b

wee

n the t

wo p

eri

ods r

ath

er th

an th

e per

cent

age c

hang

Not meaningfu

Operating income by product

2021

$millon

2020

(Rest

ated)²

$millo

Change

Constant

currency

change

ransaction Bankin

,59

2,838

(9)

rade

153

Cash Management

439

1,84

(

Financal Markets

4,9

–

(1)

Macro T

rading

216

532

(

13)

Credit Market

823

1,6

Credit T

rading

437

404

Fina

ncng Solutions &

suanc

1,386

1,217

Structured Fi

nance

480

Fina

ncng & Securit

es Ser

vices

387

364

Lend

ing & Por

tfol

io Man

agem

ent

1,0

884

ealth Mana

gement

2,225

Retail Products

3,358

3,56

)

(7)

Cre

dit Car

ds & Per

sona

l Loans & o

ther u

nse

cure

d lend

ing

1,2

,211

Deposits

860

457

)

Mortgage & Auto

1,0

750

Other R

etail P

roducts

190

reasury

698

Other

(89)

)

(

ota

l underlying operating i

ncome

14,713

–

(1)

omp

ari

son

s pre

sen

ted o

n the b

asi

s of th

e cur

ren

t per

iod

’s tran

sac

tio

nal cu

rre

y rate

, ens

uri

ng like

-for-li

ke cur

renc

y ra

tes b

wee

n the t

wo p

eri

ods

llow

ing a r

eor

gani

sat

on of c

ert

ain cl

ien

, the

re ha

s bee

n a rec

las

sif

ca

tion o

f bal

anc

es acr

oss p

rod

uct

Standard Chartered

–

nual Re

por

t 2021

Strategic

report

Foll

owing an o

rganis

atona

l restr

uct

ure th

at came int

o eff

ect

on 1 Jan

uar

y 2021, t

he Gro

’s F

nancal M

arket

s busi

ness h

been e

xpanded and

reorganised

, with

the Group

integ

rat

the m

ajor

ty o

f its C

orp

orate Fin

ance bu

sines

s with

n F

inan

cal

Mar

kets

. The re

mainng e

leme

nts o

f the G

roup

’s Cor

porat

Financ

e busin

ess – pr

imar

ly M&

A Advi

sor

y – ha

ve bee

transferred into Lending

& Portfolio Management.

ransaction Bankin

income wa

s down 9 pe

r cent

. T

increas

ed 16 per cent reﬂecting high single

-digt gro

th in

tra

de volum

es fro

m a signﬁcan

t rebo

und in glo

bal tra

de as

economies reco

ver from C

OVI

D-

ash Ma

nagement

declined 22 per cent with the low

interest rate environment

leading to margin compression despite repr

ic

g i

ntiatves.

Thi

s was par

tly of

set by dou

ble-

digt grow

th in volum

and fees.

Financal Markets

come was ﬂa

t, or d

own 2 per ce

exclu

ding th

e impact o

f a IFRS9 inc

ome adj

ustm

ent, w

ith

strong pe

rforman

ces in Credit Markets and St

ructure

Finance off

setting a dou

ble-digt decline in Macro T

rading

inco

me whic

h was imp

acted by a n

on-repe

at of 2020’s

exceptional mar

t v

latilty.

edit Markets incom

e grew

12 pe

r cent

, or 7 per ce

nt excludi

ng the im

pact o

f a $9

4 mill

IFRS

9 income ad

justment, with

increased cli

ent demand

growi

ng bot

h orign

atio

n and dist

rbu

tion vol

umes

. Str

uctu

red

Financ

e was up 25 p

er cent b

eneﬁt

ng fro

m incre

ased l

easi

inco

me due t

o new deal

s and pro

ﬁts f

rom th

e sale of ai

rcraf

Financn

g & Secu

rite

s Ser

ices in

come was u

p 6 per cen

t with

increas

ed Securit

y Ser

ices income part

ly off

set by margin

compression and low

er demand for corporate term deposit

Lending and

Portfolio Management

inco

me was up 14 p

cent

, or 8 pe

r cent excl

uding t

he impa

ct of a $55 mill

on IFRS9

income adjustment, with double-dig

t increase in balanc

on a con

stant c

urre

ncy b

asis an

d improve

d margin

s in

Corporate Lending.

ealth Management

income g

rew 12 per ce

nt to a re

cord

$2.

2 billon r

eﬂecti

ng sust

aine

d growth in c

lient n

umber

s and

dou

ble-

digt growt

h in ass

s under m

anag

ement

. The

re was

a par

ticu

larl

y stron

g sales p

erfo

rman

ce in Fund

s, St

ruct

ured

Notes and

ealth Lendi

ng. Bancassura

nce income w

as up

9 per cent.

Ret

ail Pro

duct

inc

ome de

clined 6 p

er cent o

r 7 per ce

nt on a

constant currency basis. Deposit

s income decli

ned 4

1 per cent

as margin c

mpression from the lo

w interest rate environment

mor

e than of

set inc

reas

ed volum

es and im

proved b

alance

she

et mix

. Str

ong volu

me growt

h and imp

roved marg

ins le

d to

Mor

tga

ges & Auto i

ncome in

crea

sng 38 p

er cent an

d Oth

Retail Pr

oduct

s inc

ome grow

ing 28 per c

ent. C

redit C

ards &

Per

sonal Lo

ans inc

ome was up 5 p

er cent a

s bala

nces grew

on th

e back o

f a recover

y in t

rans

action vo

lume

rea

sur

y in

come

increas

ed 10

per cent with hig

her interest

inco

me par

tly o

set by a $2

24 millon re

ducti

on in real

isato

gain

s given m

ovement

s in yi

eld cur

Proﬁt bef

ore tax by client se

gment and ge

ographic r

egion

2021

$millon

2020

(Rest

ated)²

$millo

Change

Constant

currency

change

rpor

ate, C

omme

rcial & In

stit

uto

nal Ba

nkin

,12

nsum

er Pri

vate & Bu

sine

ss Ba

nkin

1,07

710

ntral & o

ther i

tems (segm

ent)

(299)

(

96)

(

53)

(

Underlying proﬁt

bef

ore

taxation

896

508

Asia

,11

2,814

rica & M

iddle Ea

856

nm³

Euro

pe & Ame

rica

644

386

ntral & o

ther i

tems (regio

)

(720)

(

)

(2)

Underlying proﬁt

bef

ore

taxation

896

508

mpa

ris

ons p

res

ente

d on t

he ba

sis o

f the cu

rre

nt pe

rio

d’s tr

ans

act

iona

l cur

ren

cy ra

te, en

sur

ing l

ike-f

or-like cu

rre

y rate

s bet

en th

e t

wo per

iod

Fol

lowi

ng a re

org

anis

at

on of ce

rta

in cli

ent

s, t

her

e has b

een a r

ecl

ass

cat

ion o

f bal

ance

s acro

ss c

lien

t seg

men

Not meaningfu

Standard Chartered

– Ann

ual Rep

t 2021

Strategic report

roup Ch

ief Finan

cal Of

ﬁcer

’

s r

eview

Foll

owing an o

rganis

atona

l restr

uct

ure th

at came int

o eff

ect

on 1 Jan

uar

y 2021, t

he new st

ruct

ure re

sult

s in the cr

eati

of t

wo new cl

ient se

gment

s: Co

rpo

rate, Co

mmerc

ial &

Instit

utonal Bankin

g, ser

ving larger comp

anies and

ins

ttut

ions

, and Co

nsum

, Pr

ivate & B

usine

ss Ban

king

, ser

indvidu

al and business ban

king clients

. F

m a

regional

per

spe

ctive

, Grea

ter Chin

a & Nor

th Asi

a and AS

EAN & S

out

ia have b

een com

bined t

o form a s

ingle A

sia re

gion.

Corporate, Commercial & I

nstitut

onal

anking

(CCIB

)

proﬁt

incr

ease

d 57 pe

r cent

, with a $1

.6 bill

on favou

rable m

ovement

fro

m impar

ment r

elea

ses in 2021. I

ncome f

ell 1 per c

ent whi

exp

ense

s incre

ase

d 5 per cen

Con

sum

, Pri

vate & Bu

sin

ess B

ankin

g (

PBB)

proﬁt

incr

ease

d by half

, w

ith in

come grow

ing 1 pe

r cent and

imp

armen

ts re

ducin

g by $456 m

illon. T

his was p

artl

et by a 3 per ce

nt incre

ase in ex

pen

ses.

Cen

al & oth

er ite

ms (seg

ment)

losses increased

appr

oximat

ely hal

f to $299 m

illon wit

h a 21 pe

r cent

red

uctio

n in expe

nses m

ore th

an off

t by the $3

00 millo

imp

armen

t of the G

roup’

s invest

ment in B

ohai.

proﬁt

s incre

ased 11 p

er cent w

ith a $1

1 bi

llon red

uctio

n in

imp

armen

t par

tly of

et by a $410 mill

on neg

ative move

ment

in ot

her imp

arme

nt inclu

dng th

e impar

ment of t

he Gr

oup

’s

investment in Bohai.

Afr

ica & Mid

dle Ea

proﬁt

s inc

reas

ed fro

m $13 millo

n to

56 millo

n prim

arly du

e to a $6

88 mil

lon red

uctio

n in

imp

armen

t. In

come was u

p 3 per cen

t and 5 per c

ent on a

con

stant cu

rren

cy ba

sis wh

ile exp

ense

s decre

ase

d 4 per cen

Europe & Ameri

cas

proﬁt wa

s up 6

7 per c

ent, b

eneﬁt

ng fro

imp

armen

t rele

ases an

d 4 per ce

nt incom

e growt

h part

offset by in

creased e

xpenses.

Cen

al & oth

er ite

ms (reg

ion)

recor

ded a lo

ss of $7

20 millon

wit

h incom

e down $281 mi

llon due t

o lower ret

urn

s paid to

reas

y on th

e equit

y pr

ovide

d to the re

gion

s in a lower

inte

rest ra

te enviro

nmen

t broadl

y of

fse

t by a $231 mi

llon

red

uctio

n in the UK b

ank lev

y an

d lower ot

her imp

arme

nt.

djusted net i

nterest inco

me and

margin

2021

$millon

2020

$millo

Change

Adjusted

net interest inc

ome

796

(

verage interest

-e

arni

ng assets

559

,408

370

rage interest

-bearin

g liablites

478

oss y

ield (%)

1.83

(51)

Rate p

aid (%)

)

Net y

ield (%)

.16

1.22

(6)

Net i

nter

est mar

gin (%)

3,4

1.21

(

Vari

ance i

s bet

ter/

(wor

) o

the

r than a

s and li

abli

te

s whic

h is in

cre

ase/(

dec

rea

)

just

ed ne

t int

ere

st inc

ome i

s stat

y net i

nte

rest i

nco

me le

ss f

undi

ng co

sts f

or th

e tra

din

g boo

k and ﬁn

anc

al gu

aran

tee f

ees o

n inte

res

-e

arn

ing a

sse

ang

e is th

e bas

is po

int

s (bp

) di

ffe

ren

ce be

een t

he t

wo pe

rio

ds rat

her t

han t

he pe

rce

ntag

e cha

nge

Adjus

ted n

et in

tere

st in

com

e div

ded by a

ver

age in

ter

est-ear

nin

g ass

s, an

nual

ise

Adjus

ted ne

t inter

est inco

me was dow

n 2 per ce

nt drive

n by

an 8 pe

r cent de

cline in n

et inte

rest ma

rgin whi

ch fell 10 b

asis

poi

nts ye

-on

-y

ear, reﬂect

ing th

e contin

ued low i

ntere

st rate

envir

onmen

t follow

ing th

e cut in po

licy ra

tes wh

ich occu

rred

in ear

ly 2020. Excl

uding t

he $17

1 millon b

eneﬁt f

rom IFRS9

inco

me adju

stme

nts b

ooked in t

he se

cond an

d third qu

arte

the n

et inte

rest m

argin in 2021 wou

ld have a

verage

d 118 ba

sis

poi

nts

. In the f

ourt

h quar

ter, the net i

ntere

st margi

n averag

119 ba

sis po

ints

, an incr

ease o

f 3 basi

s poin

ts in t

he quar

ter

exclu

ding th

e impact o

f the IFR

S9 incom

e adjus

tment b

ooked

in th

e third qu

arte

. Th

is reﬂec

ts th

e impa

ct of inte

rest rat

rise

s in

certain mar

kets and additonal int

erest income from

str

uct

ural he

dging a

ctivt

ies wi

thn T

reasu

y Mar

verage interest

-earning assets increased 6 per cent driven

by an incr

ease i

n loan

s and advan

ces to cu

stom

ers an

d higher

invest

ment s

ecur

ites ba

lance

s. Gro

ss yi

elds de

cline

d 51 basi

poi

nts co

mpare

d to th

e averag

e in 20

20 pred

omina

ntly

reﬂe

cting t

he imp

act of con

tinue

d compr

essi

on of key inte

rest

rate

s. E

xcludi

ng the im

pact of t

he IFRS9 i

ncome a

djust

ment

gros

s yiel

ds dec

lined 5

4 ba

sis poi

nts

verage interest

-bear

ing liablites increase

d 8 per cent driven

by growt

h in cust

omer ac

count

s. T

he rate p

aid on lia

blites

decreased

by 4

5 basis poi

year

-on-

year

reﬂecting

interest

rate m

ovement

. This was p

artl

y of

fse

t by a shift o

f custo

mer

acco

unt

s from h

igher-payin

g time d

epos

its to l

ower

-rat

cur

rent an

d savi

ngs acco

unt

Standard Chartered

– Annu

al Rep

ort 202

Strategic

report

Cre

dit risk sum

mar

Income statement

2021

$millon

2020

$millo

Change

otal credit imparment

263

Of w

hich st

age 1 an

d 2

827

Of w

hich st

age 3

185

(87

)

Vari

ance i

s inc

rea

se/

(decr

eas

) co

mpa

rin

g cur

rent r

epo

ing pe

rio

d to pr

ior r

epo

ing pe

rio

Balance sheet

2021

$millon

2020

$millo

Change

s loan

s and a

dvance

s to cu

sto

mer

304,122

288

,312

Of w

hich st

age 1

256,43

Of w

hich st

age 2

(

26)

Of w

hich st

age 3

8,0

Expected credi

t loss

provisons

(

Of w

hich st

age 1

(

(11)

Of w

hich st

age 2

(

38)

(

29)

Of w

hich st

age 3

)

(

)

Net loans

and adv

ances to customers

298,468

281,6

Of w

hich st

age 1

278,7

Of w

hich st

age 2

,32

(

Of w

hich st

age 3

3,4

873

Cove

r ratio o

f stag

e 3 befo

re/

afte

r colla

teral (%)

58 / 75

58 / 7

0 / (1)

Cre

dit gra

de 12 acco

unt

s ($millo

)

1,730

(

Earl

y aler

ts ($m

illon

)

5,53

10,

692

)

Inves

tmen

t grade c

orp

orate e

xpos

ures (%)

Vari

ance i

s inc

rea

se/

(decr

eas

) co

mpa

rin

g cur

rent r

epo

ing pe

rio

d to pr

ior r

epo

ing pe

rio

clu

des r

ever

se re

purc

has

e agr

eem

ent

s and o

the

r sim

lar s

ecur

ed le

ndi

ng he

ld at am

ort

ed cos

t of $7

331 m

ill

on at 31 D

ece

mbe

r 2021 an

d $2,919 m

illo

n at 31

December 20

ang

e is th

e per

cent

age p

oin

ts di

eren

ce be

een t

he t

wo po

int

s rat

her t

han t

he pe

rcen

tag

e chan

The soli

d risk

-management

foundations that

the Group has

buil

t over time h

as allowe

d the G

roup to f

ocus on e

mergin

str

ongly f

rom th

e CO

D-

19 pan

demic

, des

pite th

e uneven

recove

y acros

s som

e market

s and in

dust

res

. In spite o

f the

chal

lengin

g condit

ons th

at rem

ain, th

e Grou

p has se

impr

ovement in a n

umbe

r of cred

it metr

ics w

ith th

e stock o

high-r

isk as

set

s red

ucing over 6 co

nse

cuti

ve quart

ers a

nd a

$2 billo

n redu

ction in cr

edit im

parm

ent year-on-year. The

Group is well

positoned to support our clients as economies

recove

r but con

tinue

s to rem

ain vigl

ant to th

e contin

ued

imp

act of COVID-

19 an

d to sec

tors s

uch as Ch

ina comm

ercial

real estate that are under part

icular id

os

yncratic pressures

Cre

dit impar

ment t

otall

ed $263 mi

llon, a re

duct

ion of

$2 billo

n, repr

esent

ing a lo

an los

s rate of 7 b

asis p

oint

dem

onst

ratin

g the res

ilence o

f the overa

ll por

tfoli

Sta

ge 1 and 2 im

parm

ent char

ge of $78 mill

on is a

dec

reas

e of $7

49 millon

, reﬂect

ing an imp

rovemen

t in the

macroeconomic va

iables

incorporated into expected credit

loss mo

dels, additon

al collateral and guarantee

s received

on a se

lect nu

mber o

f client

s and a

n improvem

ent in

underlying probabilty of default

metrics. The management

overl

ay rel

ating t

o stage 1 a

nd 2 ass

s total

s $323 m

illon

as at 31 D

ecem

ber 2021 com

pared t

o $35

3 millon as a

31 De

cembe

r 20

20. Ther

e was a $12

5 millon re

ducti

on in the

ID-

19 e

lemen

t of the over

lay, partl

y of

fse

t by a $95 millon

overl

ay bo

oked in th

e four

th qua

rter in r

elat

ion to th

e China

comm

ercial r

eal est

ate se

ctor.

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

roup Ch

ief Finan

cal Of

ﬁcer

’

s r

eview

Sta

ge 3 imp

armen

t of $18

5 millon pr

imar

ly rela

tes to

char

ge-of

s withn CPB

B with n

et rele

ase

s withn CCI

The

re was a $32 mi

llon char

ge rela

ting to t

he catc

h-up

of int

erest e

arn

ed on his

torca

lly imp

ared as

set

s and a

$15 m

illon inc

reas

e in the ma

nagem

ent over

lay of s

tage 3

set

s in CPBB, w

hich now t

otals $2

1 millon

Gro

ss st

age 3 loa

ns and ad

vances t

o custo

mer

s of $8

1 bill

were 12

cent low

er,

imarly due

to repa

yments, client

upg

rades a

nd wri

te-of

s more t

han of

fse

ttin

g new inﬂow

Credit

impared loans represented 2.7 per cent of g

ross loans

and a

dvance

s, a dec

reas

e of 53 ba

sis po

int

The s

tage 3 cove

r ratio of 5

8 per ce

nt was st

able, an

d the

cover rat

io pos

t collat

eral at 75 p

er cent d

ecre

ase

d by 1

per

centa

ge poin

t. Thi

s reﬂect

s new in

ﬂows int

o stage 3

whe

re the G

roup i

s conﬁde

nt that we h

ave a low pro

babilt

of a sig

nﬁcant los

s as it b

eneﬁt

s fro

m guaran

tees a

insurance w

hich are not included as tangib

le collateral.

Cre

dit grade 1

2 balan

ces have d

ecre

ased by 20 p

er cent

wit

h client u

pgrad

es, d

owngra

des int

o stage 3 a

nd re-

ymen

ts pa

rtl

y off

set by a s

overeign ra

ting

s downgr

ade

and n

ew inﬂows

Earl

y Aler

t accou

nts o

f $5.

5 billon ha

ve near

ly hal

ved,

reﬂecting the

net impact of

regularis

at

of accounts back

into non-

high-risk categories, net impact

of downgrades into

cre

dit grade 1

2 and exp

osure r

educ

tions

. In the f

our

th quar

ter,

Earl

y Aler

t accou

nts d

ecre

ased by $

9 bil

lon reﬂe

cting

impr

oved ope

rating p

erf

orma

nce in the Avia

ton se

ctor.

Earl

y Aler

t accou

nts ar

e now bro

adly in li

ne with t

he level t

hey

were at b

efor

e CO

VID

. The G

roup i

s contin

ung to mo

nitor

s expo

sures i

n the Aviat

on, Me

tals & Min

ng and Oil & G

sectors particularly carefully

, given the

unu

sual

stres

ses

caus

ed by th

e effe

cts o

f CO

D-

, as wel

l as it

s expo

sure to

Com

mercia

l Real Es

tate, w

hich, w

ith net l

oans a

nd advan

ces

to cus

tome

rs of $

.8 billon i

s just 7 p

er cent of t

he Gr

oup

’s

tot

al net lo

ans and a

dvance

s to cust

omer

s. T

he ris

es in

comm

odit

y pr

ices ha

ve eas

ed cre

dit pres

sure f

or cert

ain

sectors.

The proportion of in

vestment grade corporate e

posures has

incr

ease

d by 7 perce

ntag

e point

s to 69 pe

r cent

Rest

ructu

ring, goodw

ill imparmen

t and othe

r items

2021

2020

Restructuring

$millon

Goodwill

imparment

$millon

Other items

$millon

Restructuring

$millo

Goodwill

imparment

$millo

Other items

$millo

Operat

ing income

(32)

–

Operating expenses

)

–

(

52)

–

Credit imparm

ent

–

(31)

–

Other imparment

(17

)

–

13)

)

–

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

–

Loss before taxation

(507

)

–

)

(

82)

)

(

The G

roup’

s sta

tuto

y per

form

ance is ad

juste

d for pro

ﬁts o

los

ses of a c

apital n

ature

, amoun

ts co

nseq

uent to i

nvestme

transactions driven by

rategic

intent

, other infrequent and

or excep

tion

al trans

actio

ns th

at are signﬁc

ant or mat

eria

l in

the c

ontext o

f the G

roup

’s nor

mal bus

ines

s earn

ings fo

r the

per

iod an

d item

s which m

anage

ment an

d investor

s woul

ordinarly identfy separately when asse

ssing underlying

per

for

mance p

erio

d-by peri

od. A re

concila

tion of

restructuring and

other items ex

cluded from underlying

res

ult

s is set ou

t on pag

es 80 to 8

Restr

uct

urin

g charge

s of $507 millon f

or 2021 reﬂe

cts t

impact of

actions to tra

nsform the organisaton

to improve

productivt

imarly

redun

dancy related

charges, the

maj

ort

y of wh

ich, in

cludng a

n earl

y retir

ement p

rogram

in Korea

, were bo

oked in 4

Q’21.

her ite

ms incl

ude a $62 mil

lon ﬁnanc

al pena

y paid

to th

e PRA an

d a $20 millon fa

-value g

ain rela

ting to a

SC V

entures in

vestment

Standard Chartered

– Annu

al Rep

ort 202

Strategic

report

Balanc

e sheet an

d liqudit

2021

$millon

2020

$millo

Increase

(Decrease

)

$millo

Increase

(Decrease

)

Asset

Loan

s and ad

vance

s to ban

44,

383

44,34

–

Loan

s and ad

vance

s to cust

ome

298,468

281,6

Other assets

,967

63,0

otal

ssets

Liablites

Dep

osit

s by ba

nks

0,041

30,

(

(1)

Customer accounts

,339

5,231

Othe

r liablites

70,

268,7

1,84

otal liablites

5,1

36,86

Equity

50,

729

otal equity and liablites

Adv

ances-to

-deposits ratio (%

)

.1%

Liqudity cov

erag

atio (%

)

43%

Vari

ance i

s inc

rea

se/

(decr

eas

) co

mpa

rin

g cur

rent r

epo

ing pe

rio

d to pr

ior r

epo

ing pe

rio

e Gr

oup n

ow excl

ude

s $15,16

8 mil

lon h

eld w

ith ce

ntr

al ba

nks (

31.12.

20: $1

296 mil

lon) tha

t has b

een c

onﬁr

med a

s rep

ayab

le at t

he po

int o

f str

ess

The G

roup’

s bal

ance sh

eet rem

ains st

rong

, liqud an

well diver

sﬁed.

•

Loan

s and adva

nces to cu

stom

ers in

crea

sed 6 pe

r cent

sinc

e 31 Dece

mber 2020 to $298 bi

llon dri

ven main

ly by

grow

th in Financ

al Market

s, M

ort

gage

s and Cor

pora

Lendi

ng. V

olu

mes de

cline

d $4 bi

llon in 4Q

’21 wit

h a

$9 billo

n redu

ction in T

rea

sur

y Ma

rket

s balan

ces mor

tha

n off

set

ting u

nder

lyin

g growth in C

orp

orate Le

nding

and Financal Markets

. Excluding th

e reduction in T

reasur

Market

s, loans and advance

s to customers grew an

underlying 2 per cent in 4Q’21

•

Cus

tomer a

ccoun

ts of $

475 billon in

crea

sed 8 p

er cent

sinc

e 31 Dece

mber 2020 wit

h an incre

ase in o

perat

ing

account balan

ces withn Cash Manag

ement and in Retail

cur

rent an

d savi

ng accou

nts p

art

ly of

et by a redu

ction in

Retail t

ime de

posit

s. V

lume

s incre

ased $2

1 billon in 4

Q’21

primar

ly from growth in operat

ing account balances and

corporate term deposit

•

her as

set

s incre

ase

d 5 per cen

t since 31 D

ecemb

er 2020

whil

e othe

r liablit

es were 1 p

er cent hi

gher. The grow

th in

other assets was

driven b

y increased re

verse repurchase

agre

emen

t volume

s and an in

creas

e in investm

ent

curit

es hel

d withn T

rea

sur

y Ma

rket

s. Th

e growth in o

ther

liablites reﬂect

s increased rep

urchase agree

ments and

sued d

ebt se

curit

es of

fse

t by redu

ced der

ivat

ve balan

ces

The a

dvance

s-to-de

posi

ts rat

io dec

reas

ed to 59

1 p

er cent

fro

m 6

1 p

er cent at 3

1 Decem

ber 2020 reﬂect

ing th

e stron

growth in custom

er accounts

. The point

-in-

ime liqudit

coverag

e ratio h

as rem

ained s

table a

t 143 per ce

nt and

remains wel

l above the mi

nmum regulator

y requirement

of 10

0 per ce

nt.

Risk

-weighted asse

2021

$millon

2020

$millo

Change

$millo

Change

By ri

sk t

Credit risk

20,4

53)

–

Operation

risk

26,800

316

Market risk

24,529

593

,93

271,2

268

,83

399

Vari

ance i

s inc

rea

se/

(decr

eas

) co

mpa

rin

g cur

rent r

epo

ing pe

rio

d to pr

ior r

epo

ing pe

rio

otal ri

-wei

ghted a

sse

ts (RW

) i

ncrea

sed 1 p

er cent or

$2.4 b

illon sin

ce 31 Dece

mber 2020 to $27

2 billon

•

Cre

dit ris

k R

A d

ecrea

sed $0.9 billon to $2

.6 billon

, with

an inc

reas

e of $10.

2 billon f

rom un

derl

ying a

sset g

rowth

mor

e than of

set by the a

ggre

gate of $

4.4 bi

llon fro

favourable FX mo

vement

s, $3.7 bil

lon impact from model

enh

ancem

ent

s, $2.

2 billon f

rom th

e par

tial unwi

nd of

neg

ative c

redit mi

graton a

nd $1.1 billon i

mpact f

rom ot

her

A efﬁcen

cy ac

tions

•

Mar

ket ris

k R

A in

crea

sed by $2.9 billon to $24.

5 billon

pri

marl

y due to t

he impa

ct of upd

ated PR

A gui

dance w

ith

.7 billon S

uctur

al FX ri

sk now tre

ate

d as Pillar 1 m

arket

sk RW

, pa

rtl

y off

set by t

he ben

eﬁt of con

solid

atng

mar

ket ris

k R

A fo

llowin

g the re

ceipt of a Pr

ude

ntial

Regulatory Authorit

y (P

) permisson to consolidate

mar

ket ris

k R

A fo

r SCB Mal

aysia B

erh

ad, SCB T

hai PCL

and SC

B (Vie

tnam

) Lt

•

eratio

nal ri

sk RW

A increa

sed by $0.

3 billo

n mainl

y due to

an inc

reas

e in avera

ge incom

e as me

asure

d over a rollin

thr

ee-year t

ime hor

izon, w

ith hig

her 2020 incom

e repla

cing

lower 2017 in

come

Standard

Chartered

– Ann

ual Rep

t 2021

Strategic report

roup Ch

ief Finan

cal Of

ﬁcer

’

s r

eview

Capital b

ase and r

atios

2021

$millon

2020

$millo

Change

$millo

Change

CET

1 capital

38,362

)

(1)

Addit

onal T

r 1 capit

al (A

791

612

,17

ier 1 cap

ital

45,

153

44,3

ier 2 cap

ital

,49

12,65

(

(1)

otal capital

596

T1 c

apit

al rat

io en

d poin

t (%

)

4.1

14.4

)

otal capital ratio transit

onal (%

)

21.

21.2

UK le

verage ratio (%

)

(0.

)

Vari

ance i

s inc

rea

se/

(decr

eas

) co

mpa

rin

g cur

rent r

epo

ing pe

rio

d to pr

ior r

epo

ing pe

rio

Change is

ercentage

point

s d

ifference between t

point

rather than percentage

change

The G

roup’

s CE

T1 ra

tio of 14

1 pe

r cent de

crea

sed 28 ba

sis

poi

nts b

ut rema

ins 4 pe

rcenta

ge poin

ts ab

ove the G

roup

’s

cur

rent re

gulat

y minm

um of 10.1 per cent

. On a pr

o form

sis, af

ter t

he ces

satio

n of sof

ware reli

ef and ot

her

regulator

y changes

and adjustment

detailed below

the C

1 ratio a

s at 1 Janu

y 2022 is 13

.5 p

er cent

The C

1 ratio o

f 14.1 per cent d

eclin

ed in th

e peri

od as

appr

oximat

ely 90 b

asis p

oint

s of proﬁt a

ccret

ion was mo

tha

n off

set by di

strb

utio

ns, RW

A growt

h, movem

ent

s in

res

ves and a

n incre

ase in re

gulat

y ded

uctio

ns. A

n incre

ase

in un

derl

ying RW

, excludi

ng the im

pact of F

X, r

educe

d the

T1 ra

tio by appr

oximate

ly 40 b

asis p

oint

s. Th

is incl

uded a

20 bas

is poin

ts im

pact f

rom high

er mar

et RW

A follow

ing a

clarif

cation of the regulator

y treatment of Str

uctural Foreign

Exchange risk.

Ord

inar

y sha

rehol

der dis

trbu

tion

s redu

ced th

e CET

1 rati

o by

appr

oximat

ely 30 b

asis p

oint

s. Th

ese dis

trb

ution

s inclu

ded

ordi

nar

y sha

re buy-b

acks o

f $0.5 bi

llon comp

lete

d in the

per

iod w

hich red

uced t

he shar

e count by ap

proxim

ately

5 per ce

nt dur

ing 2021 and a to

tal 2021 ordi

nar

y div

dend

of 12 ce

nts a s

hare or $

0 mi

llon. Th

e tota

l 20

1 divd

end

comp

rise

d the in

term di

vde

nd of 3 cen

ts pe

r share a

nd the

ard reco

mmen

ded ﬁnal d

ivde

nd of 9 cen

ts p

er shar

Payments due to A

1 and

preference shareholders reduced

the C

1 ratio by a

pproxim

atel

y 20 basis p

oint

s. Th

e net

fect of o

ther m

ovement

s in th

e per

iod re

duced t

he CE

rat

io by approxi

matel

y 30 ba

sis poi

nts a

s highe

r regul

ator

deductions, advers

movements in other comprehensive

inco

me and re

ser

ves o

set th

e redu

ction in RW

A fr

currenc

y translation effect

The

re are th

ree po

licy ch

ange

s expe

cted to i

mpact t

calcu

latio

n of CE

T1 an

or RW

As i

n 20

. F

rst

, th

e PRA

has c

onﬁrm

ed tha

t sof

twar

e relief w

ill be excl

uded f

rom

T1 f

rom 1 Jan

uar

y 2022 w

hich wil

l reduc

e CET

1 by 32 basi

points. Secondly

, the recent industr

y wide

regulator

y changes

to ali

gn IRB mod

el per

for

mance (the IRB mo

del re

pair

pro

gram

) wi

ll add app

roximat

ely $

4.7 bi

llon of ad

diton

A from 1 J

anuar

y 202

2. Finall

, the i

ntrod

ucton o

standardised rules for c

unterpart

credit risk on

der

iva

tves

and o

ther in

str

ument

s (SA

CCR

) w

ill add ap

proxim

ately

.6 billon o

f addit

onal RW

. The com

binato

n of the I

del rep

air prog

ram and SA-CCR are e

xpe

cted to r

educe

the C

1 ratio by a

pproxim

atel

y 31 basi

s point

s f

rom

1 Janu

y 2022

The B

oard h

as aut

hori

sed a sh

are bu

y-back w

ith a max

imum

con

sidera

ton of $

750 millo

n to star

t immne

ntly t

o fur

the

reduce th

e number of ordinar

y shares in is

sue by

can

celling

the r

epurc

hase

d share

s. Th

e share b

uy-bac

k is expe

cted t

red

uce th

e CET

1 rati

o by approxim

atel

y 30bp

The G

roup’

s UK leve

rage rat

io of 4.9 per cen

t, red

uced by

appr

oximat

ely 30 b

asis p

oint

s due to a

n incre

ase in on-

balance she

et exposure

s but remains signﬁcantly above

its minmum requirement of

.7 per

cent.

Out

look

e ha

ve had a so

lid star

t to 2022 a

nd we exp

ect inco

togrow in t

he 5-7 per cent r

ange wi

th mid-s

ingle dig

t asse

grow

th and an in

crea

sng likelho

od of s

ome sup

por

t from

interest rates, whic

h should help

supp

ort marg

ins part

icula

in th

e later p

art of t

he year.

xpe

nses ar

e expe

cted t

o grow $0.4 billon i

nclud

ng the

imp

act of inﬂa

ton to $

10.7 billo

n, exclud

ing the i

mpact o

currency movements.

Whilst we remain viglant to th

e c

ontinu

ed uncertaint

y in

the e

xtern

al enviro

nmen

t, ou

r loan po

rtf

olios ar

e in good

sha

pe and, b

arr

ing majo

r nega

tive even

, we would ex

pect

imp

armen

ts t

o slowl

y increa

se fr

om the exce

ption

ally low

level

s in 20

. Our me

dium-t

erm cos

t of ris

k is now exp

ecte

to no

rmali

se bet

en 30-35 b

asis p

oint

s, sl

ightl

y lower tha

our p

revio

us medi

um-ter

m guida

nce of 35

-40 b

asis p

oint

Alt

hough r

egul

ator

y ch

anges w

ill lea

d to an inc

reas

e in R

at th

e star

t of the ye

ar we ful

ly inte

nd to op

erate d

ynam

ically

wit

hn the 13

14 per ce

nt CE

T1 ran

ge.

Look

ing beyo

nd 2022

, the act

ions we ar

e under

tak

ing and

likel

y traje

ctor

y of in

teres

t rates p

s us on th

e path t

o delive

a 10 p

er cent re

turn o

n tangi

ble eq

uit

y by 20

24. Wi

th the

tail

wnd of a r

isng in

teres

t rate ou

tloo

k, we b

elieve we can

deli

ver 8 to 10 p

er cent i

ncome gr

owth p

er annum b

ween

2022 an

d 20

24, w

ith 5

7 per ce

nt from u

nder

lyin

g busi

ness

grow

th and a f

urt

her 3 pe

r cent f

rom ris

ng inte

rest rat

es.

e are e

mbar

king o

n a $1.

3 billon g

ross st

ctural ex

pen

red

uctio

n progra

mme, f

unde

d by $0.5 bil

lon of res

tru

ctur

ing

char

ges, w

hich wi

ll fre

e up investm

ent cap

acit

y and all

ow us

to de

liver 2 pe

r cent po

sitve i

ncome

-to-co

st jaw

s on avera

per a

nnum be

fore t

he ben

eﬁt of ri

sng inte

rest rat

es.

The a

ction

s we are tak

ing on RW

A opt

imsat

ion me

ans we

exp

ect RW

As to gr

ow at a low sing

le-di

gt perce

ntage.

e ha

ve reite

rated o

ur inte

nt to op

erate w

ithn ou

r 13-

14%

T1 ta

rget ran

ge and aim t

o deli

ver in exces

s of $5 billo

of sh

areho

lder re

turn

s over the n

ext thr

ee year

And

y Half

ord

Group Chie

f F

inan

c

al Ofﬁcer

17 Feb

ruar

y 202

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic

report

oup Chi

ef Risk

Ofﬁ

’

s re

Mark Smith

oup Ch

ief Ri

sk Of

ﬁcer

2021 was a cha

llengi

ng year on t

he mac

roeco

nomic f

ront

dri

ven by the o

ngoin

g pande

mic. T

he CO

ID-

19 re

cover

y has

cont

inue

d to be un

even, wit

h unba

lance

d vaccine ro

ll-out

bet

en develo

ped m

arket

s and em

erging m

arket

s, an

sing of re

str

icton

s in some m

arket

s even as ot

her lo

catio

and sectors continued to

lag. The potential impact from ne

variant

s has also contrib

uted to fur

ther uncer

taint

. Multiple

ctor

s of the gl

obal e

conomy ha

ve bee

n impac

ted by th

pan

demic

, and liq

udit

y pres

sure

s in the co

mmerci

al real

est

ate se

ctor in Chi

na have ar

ise

n durin

g the yea

, alt

hough

the l

ong-te

rm imp

act rema

ins to b

e seen

. A rapid re

cover

y in

dem

and foll

owing t

he eas

ing of re

stri

ctons a

nd exis

tng

supply chain

disruptons has in turn c

ont

ributed to

elevated

inﬂat

on level

s, wit

h many mar

kets s

eeing a s

ignﬁcant r

ise in

prices. The accumulation

of worldwide debt could also

pose

furt

her

risks to the economic en

vironment

The G

roup h

as buil

t a stron

g foun

datio

n with s

olid ri

fun

damentals

, and we

are fo

cussed on eme

rging strongly

fro

m the p

andem

ic. W

e co

ntinu

e to scan t

he hor

izon for

emerging r

isks and collabor

ate with internal and exte

rnal

par

tne

rs to pr

oacti

vely mi

tgate r

isk

s as th

ey are iden

tﬁed.

Asse

uali

y has

improv

d, with

improv

ents in a

number of

met

ric

s inclu

dng a signﬁca

nt year

on-year re

ducti

on in cre

dit

imp

armen

ts a

cross al

l stage

s and an in

creas

e in perc

entag

of inves

tment g

rade cor

por

ate exp

osure

s (2021: 69 per cen

2020: 6

2 p

er cent)

, t

houg

h we remain wa

tchf

ul in th

e face of

ongoing uncertaint

. W

continue to demonstrate resilence

as ev

idence

d by stro

ng capit

al and liqu

dit

y met

rics

. As a

result o

f the c

hanges in

internal and

external

era

ting

envir

onmen

t due to t

he pan

demic

, non-ﬁnan

cal ris

ks are

suc

h as Fraud, I

nform

atio

n and C

ber S

ecur

, Pri

vacy

, a

Con

duct re

main he

ighten

ed. W

e co

ntinu

e to enh

ance ou

operational

resilence

and defences aga

inst these risks,

esp

eciall

y as we ada

pt to mor

e agile wa

ys of wor

king

. W

are al

so work

ing to e

nsure a s

ucces

sfu

l trans

iton f

rom th

Inte

rban

k Off

ered Rat

e (IBOR) to alter

nati

ve ris

-fr

ee rate

Digtalisaton

and technolo

gic

al development remain k

items on the Group

’

s agenda. W

continue to ensure that our

cont

rol fr

amewor

ks an

d Risk App

etit

e evolve acc

ordingl

y to

keep p

ace wit

h new bus

ines

s develop

ment

s and a

sset c

lass

es.

Earli

er in the ye

, we de

ﬁned th

ree St

ands to u

se our u

nique

abilt

y to wo

rk acr

oss bo

unda

ries an

d conne

ct capita

l, peo

ple,

ide

as and b

est pra

ctices t

o help ad

dres

s some key so

cio-

economic challe

nges of our time

. Accelerating Z

ero is one of

the S

tand

s, and o

ur aim is to r

educ

e the emi

sson

s ass

ociate

wit

h our ﬁna

ncng act

ivti

es to ne

t zero by 2050, whic

incl

udes in

term 2030 t

arget

s for t

he mos

t carb

on-inten

sve

ctor

s. W

e are s

uppo

rtin

g our clie

nts i

n the tr

ansit

on to a

low-c

arbon economy

by de

veloping transiton

ramew

ork

and sustainab

le ﬁnancng solution

s. W

e have integrated

Environment

al, Social and Governance r

isk management int

our Rep

utat

ional Ri

sk T

ype Fram

ework

. Sust

ainabli

ty i

s a core

par

t of our s

trate

gy and o

ur ambi

ton to b

ecome t

he wor

ld’s

most sust

ainable and respon

sible bank.

o suppo

rt Lif

tng Par

ticp

ation

, we are help

ing our c

lient

s by

buildng par

tnership

s to expand their acces

s to ﬁ

nancal

ser

ices

. For the

se new b

usine

ss inti

atves

, we have d

evelope

new risk management

and risk asses

sment a

pproaches

across our Princ

pal Risk T

ypes to address these unique risks.

e f

urt

her sup

por

t our clie

nts by p

romot

ing ﬁna

ncal

wellbeing throu

gh ﬁnancal education and per

sonalise

ser

ices

, inclu

dng digt

ised s

olut

ions fo

r lendi

ng and we

alth

man

ageme

nt. W

e are al

so focu

sed on d

riv

ng cust

omer

awarenes

s of environmental sustain

ablity concer

ns through

gre

en prod

uct

s. As p

art of o

ur aim to Res

et Gl

obali

saton

, we

“

Stayin

g vig

lant i

n the

face of an uneven gl

eco

nomi

c reco

y”

Standard Chartered

– An

nual Re

por

t 2021

Strategic report

roup Ch

ief Ris

k Ofﬁc

er’s revi

welcome d

igtal

-as

set

-related opportunites and have

enh

anced o

ur Digt

al Ass

et Ris

k Manag

ement A

ppro

ach and

Polic

y to en

sure th

at digtal a

sse

t activ

ties a

cros

s the Gr

oup

are ap

propr

iatel

y mana

ged, an

d withn o

ur Risk A

ppet

ite.

about the consideratons

taken into

account for

our

thwa

y to ne

t zero on

e 66

. Fu

rth

er de

tail

s on ou

r over

all

app

roa

ch to n

et zer

o can be f

oun

d at

An upda

te on our ke

y risk prio

rties

2021 pres

ente

d a challe

nging r

isk lan

dscap

e, however we

faced this from a

n intrnsically strong posit

ur risk

man

ageme

nt appro

ach is a

t the he

art of o

ur bus

ines

s and is

core t

o us achiev

ng sus

tainab

le grow

th and pe

rfor

manc

e ha

ve made p

rogre

ss on th

e key prior

ties s

et out a

t half

year

, these

ng:

Strengthening the Group

’s

risk culture and

conduct:

rem

ain commi

tted t

o promo

ting a h

ealthy r

isk cul

ture an

drivng the

highest standar

ds in conduct. Both

isk

culture

and conduct

are integral components of our E

nter

prise Risk

Man

ageme

nt Framewor

k (ERMF

)

. O

ur ERMF s

ets o

ut the

guidng

inc

ples for our colleagues, enabli

ng us to

have

inte

grate

d and ho

listc r

isk conve

rsat

ions a

cross t

he Gr

oup

and t

he thre

e lines o

f defe

nce. It un

derp

ins an ent

erpr

ise

level ab

ilt

y to iden

tf

y and a

sses

s, op

enly d

iscus

s, an

d take

prompt action

to address existng and

emerging risks.

Sen

ior man

agem

ent acro

ss th

e Grou

p promo

te a hea

lthy

sk cult

ure by rewardi

ng ris

-ba

sed th

inkng (inclu

dng in

remuneration

decisons

)

, cha

llenging the sta

quo, and

creating a transparent and

afe

environment for employees

to communic

ate risk concerns.

e st

rive to u

phol

d the high

est st

andard

s of cond

uct thr

ough

delivery of conduct outcomes, acknowledging that

while

incd

ent

s cannot b

e enti

rely a

voided

, the G

roup ha

s no

appetite for wil

ful or negligent misconduc

. More

broadly

we are co

ntinun

g to focu

s on str

ength

ening ﬁr

-line

Conduct Risk o

ership

, includng helping

to draw

enhanced Conduct Risk ins

ghts through the development

of be

tter co

nduct a

naly

tics a

s par

t of the n

ew Cond

uct Risk

management approach.

As p

art of t

he Gr

oup

’s Future o

f W

ork N

ow intiat

ve, movi

to lar

ge-sc

ale work

ing f

rom hom

e arran

geme

nts h

as be

for

malis

ed and ro

lled o

ut to th

e major

t

y of the G

roup

’s

mar

kets

. Risk

s aris

ng fro

m the new wo

rkin

g mode

l have b

een

assess

ed, with c

ontrols strengthened where appropriate.

e rem

ain vig

lant to t

he nee

d to incr

ease s

taff a

warene

of f

raud an

d cyb

er sec

urit

y r

isks

, alon

gside o

ther t

arget

mitgating actions to

improve ov

sight a

internal controls.

Enhancing inform

aton and cyber securit

(ICS) capabilties:

The G

roup r

emain

s focus

ed on p

ursu

ing a cult

ure of c

res

ilence a

s we progre

ss wi

th more a

gile way

s of work

ing.

e are focuse

d on maintaning client ser

vices and prot

ecting

our m

ost cr

itcal as

set

s, re

mainn

g viglan

t to evolv

ing c

yber

thr

eat

s. Ou

r cyb

er se

curit

y f

ramewor

k has b

een f

urt

her

enhanced to underpin

our management and mitgation

S Risk an

d suppo

rt of o

ur busi

ness

es and f

unct

ions in t

heir

adoption of k

ey controls. W

e plan

to fur

ther enhance

our key

S risk m

etr

ics to su

ppor

t stra

tegic ove

rsig

ht and de

cison-

mak

ing. St

reng

thenin

g our over

sight o

f third-p

art

y IC

S Risk

als

o remain

s an area o

f focus

, cons

ider

ng exter

nal th

reat

and t

he cont

inued p

revalen

ce of thir

d-part

y I

CS incd

ent

e are e

nsur

ing we devel

op our in

tern

al tale

nt poo

l and

rec

ruit ex

tern

al talen

t wher

e requi

red to su

ppor

t the

critcal capabilties

Embedding

Climate Risk

management:

e have con

tinu

to embed Clim

ate Risk managemen

t, startin

g with, among

others, understanding the

impact of ph

ysical and

transiton

risk

s on

our credit portf

olio a

nd climate-related reputat

ional

sks fo

r client

s in hig

h trans

iton se

ctor

s. In 202

2, we wi

exte

nd this t

o cover oth

er releva

nt Princp

al Risk T

es.

Climate scenar

io analysis acros

s our markets

, includng the

Ban

k of Engl

and’s 2021 Bienn

al E

xplor

ator

y S

cenar

io, have

helped improv

e our understanding in ident

ying ke

y por

tfolios

lnerab

le to Clim

ate Ris

k. W

e re

ache

d out to a

round 2

,000

of ou

r client

s glo

bally, to unde

rsta

nd the

ir trans

iton an

physica

l risk proﬁles, adaptation plans, mit

gation measures

and approach to dis

closure, enhancing th

e granularit

y of

data avai

lable for risk

identﬁcaton

and deepening cl

ient

engagement. Climate Risk assessment

s are

now considered

as p

art of Rep

utat

ional an

d Sust

ainablit

y t

ransa

ction r

eviews

for im

pact

ed clien

ts in h

igh-car

bon se

ctor

s, an

d a ﬁrst p

hase

of integrat

on into credit decis

oning for

the transaction

revi

ew proce

ss is un

der way f

or our C

orpo

rate, C

omme

rcial

and In

stit

uton

al Bank

ing bu

sines

s. A

s our exp

eri

ence of

quantif

ng Climate Risk grows, we are moving from

measurement to management, while working closely with

exte

rnal p

artn

ers

, indu

str

y an

d academ

ia to move fo

ward

on climate

isk together

. As part of our

ongoing partner

ship

wit

h Imper

ial Co

llege Lo

ndon

, we supp

orte

d new clim

ate

res

earch o

n the po

tent

ial for na

ture

-base

d solu

tion

s (

action

to pro

tect

, rest

ore and e

nhanc

e ecos

ystem

) to tack

le th

inte

rlnkag

es bet

en agri

cultu

re, land-

use and c

limate

chan

ge. Ou

r 20

1 T

sk Force o

n Climat

e-rela

ted Finan

cal

Disclosures R

eport provides further details on the

roup

’

progres

s in managing climate risk

s and oppor

tunites,

incl

udng t

he Gro

’

s n

et zero ta

rget by 2050.

re de

tail

s can b

e foun

d at

sc.com/

sust

ainablity

and

.co

m/tc

Managing our en

vironmental, social and go

vernance

(ESG)

ris

The Gr

oup rem

ains co

mmitt

ed to be

ing the wo

rld

’

s m

ost

sus

tainab

le and re

spon

sible b

ank

. At the sta

rt of th

e year we

exp

ande

d the Repu

tatio

nal Pri

ncpal Ri

sk T

ype by add

ing

Sus

tainab

lit

y and pro

pose

d new Ris

k Appe

tite me

tric

coveri

ng envir

onmen

tal and s

ocial (E&S) r

isk

s as well as

ens

urin

g no Mod

ern Sl

aver

y r

isks i

n our sup

ply ch

ain.

e con

tinue t

o invest in inf

ras

tru

cture an

d tech

nolo

gy to

keep pace

with the emerging ESG regulator

y obl

igatons

acro

ss our m

arket

s. W

e h

ave devel

oped a

n inter

nal

Envir

onmen

tal and S

ocial Ri

sk Cat

alogu

e that w

ill be pil

oted

to ensure that risk ident

ﬁcaton, asses

sment a

nd enhanced

due d

ilgence

, are und

erpin

ned by a st

andard c

lass

if

cation

stem

. Using th

e Cata

logu

e, an intia

l heatm

ap of E&S r

isks

has b

een deve

lope

d for ou

r client

s and s

upplie

rs on a

industr

ortfolio le

vel through a top-do

wn risk asses

sment

appr

oach

. The as

ses

sment i

s used t

o ident

f

y key areas o

pri

ort

y for E&

S risk

s whe

re safe

guard

s could b

e fu

rth

str

ength

ened

. From 2022 onwar

ds, we pl

an to inco

rpo

rate

the ﬁ

ndngs o

f this r

isk as

ses

sment in o

ur reg

ular rev

iew of ou

positon statements and supply chain onboarding

to ensure

tha

t our bu

sines

ses an

d suppl

y chain

s conti

nue to su

ppor

t our

sustainablit

y ambiton.

Managing Financ

al

rime Risk:

External developments

continue to

create new

isks and c

ont

rol

challenges,

part

icularly with re

spect to rapidly changing ge

opolitcal

event

s. T

here is a h

eighte

ned leve

l of Fraud Ri

sk in the

envir

onmen

t due to n

ew meth

ods

, schem

es and t

echno

logy,

and we co

ntinu

e to incr

ease o

ur invest

ment in f

raud

preven

tion an

d dete

ction ca

pabilt

ies to pr

otect t

he Gro

Standard

Chartered

– Ann

ual Rep

t 2021

Strategic

report

and our client

s. Our Financal Crime Com

pliance team

cont

inue

s to ident

f

y and pr

event fra

ud and m

oney

launde

ring using next

-generat

ion sur

veillance and ﬁnancal

crime monitorng

infrastructure and machine learning.

e are f

ocuse

d on str

engt

hening o

ur thr

ee line

s of defe

nce

by transitoning cer

tain responsiblite

s for ﬁnancal crime

sur

vei

llance f

rom th

e seco

nd line to t

he ﬁr

st line w

hile

rein

forcng t

he over

sight an

d monito

rng ro

le of th

second lin

The G

roup c

ontin

ues to p

artn

er to le

ad the ﬁgh

t again

ﬁnancal crime thro

ugh informaton shar

ing about thre

ats to

prot

ect cli

ent

s and the w

ider ﬁn

ancal s

ystem

. W

e cont

inue an

active industry engagement to address new

regulator

y and

statutor

inti

atves, focusing

on enhancing

the effectiveness

of ﬁnancal crime complian

ce and contributng us

eful

informaton to law enforcement. W

e hav

e made continued

progress in resolving long-standing

enforcement actions and

rel

ated re

media

ton, an

d conti

nue to wo

rk to st

rengt

hen

compliance and improve custom

er experience in area

s of

greater implementaton chal

enge such

as records

management and tra

nsaction monitorng.

More informaton a

bout the Group

’s

commitment to ﬁghtng

ﬁna

nca

l cri

me can b

e fou

nd at

.com

/ﬁghtngﬁnancalcrime

Inn

tion – R

isk an

d CFCC in

fra

str

uct

ure:

e continue to

foc

us on simp

lf

yin

g our app

roach t

o enabl

e more ef

fec

tive

ﬁrst

-li

ne risk management, suppor

ted with

martBot

-en

abled

self

-ser

vice

platfor

ms. Flexible

rategi

c risk reporting with

centralis

ed data and advanced analy

tical capabilties

enabled a timely a

nd an ag

ile response to the

challenges

of CO

VID-

. Continued integraton of

our risk aggregation

pla

tfor

m with f

ront of

ﬁce dat

a provid

es nea

r real-ti

bespoke exposure a

nalysis for ﬁ

nancal

isks, decisoni

and

rep

ort

ing, an

d our str

ess t

estin

g scena

rios h

ave bee

exp

ande

d to incl

ude th

e impact o

f the pa

ndemi

c and Clim

ate

Risks. W

e are implementng a

n Enterprise GRC (

Governance,

Risk and

Compliance

) platform to integrate data

and

proces

ses across Op

erational Risk

, polices and standards

compliance and as

surance activti

es, and have made

signﬁc

ant prog

ress in t

he year. W

e have c

lear pr

iort

ies to

buil

d a more di

gtal and d

ata-dr

iven con

trol f

unct

ion wit

scalable self

-ser

vice solutions and partnerships with our

internal innov

aton centre,

SC V

entures. Hubs continue to be

uti

lsed fo

r centr

alise

d spec

ialst kn

owle

dge and d

eliver

y o

data visualsation,

rep

orting, change

anagement, model

development, v

alidaton and go

vernance, with automation

of supporting processes to reduce

erational

risk

Embedding

Model Risk

management:

Model Risk

man

ageme

nt has s

een a no

table s

tep for

rd in 2021.

e enh

ance

d our ri

sk mana

geme

nt fram

ework e

arlie

r in

the ye

ar to st

rengt

hen mo

del is

sue man

agem

ent and

governance f

ramework for artif

cial intellgence and machin

learning. The Group Model In

ventor

y has undergone

many

enh

ancem

ent

s throu

gh the ye

ar to be an in

dust

y-level mod

inv

entor

y tool, enabling i

creased co

verage of informat

with a hig

her lev

el of accuracy

. Regulatory model deliver

has b

een a key fo

cus are

a relat

ed to new Eur

opea

n Banki

Auth

orit

y st

andar

ds and th

e cess

ation o

f IBOR

. W

e are al

pro

gress

ing well o

n rolling o

ut the M

ode

l Risk T

ype Fram

ework

acro

ss our c

ount

ries

, inclu

dng tra

inng, ext

ensi

on of ri

sk t

ype

framework, inv

entor

y identﬁc

aton and generation of

isk

info

rmat

on rep

ort

s. Th

is will co

ntinu

e to be an ar

ea of fo

cus

to en

sure we ef

fec

tivel

y embe

d awaren

ess o

f Mode

l Risk

man

ageme

nt at a ﬁrm

-wide leve

Our ri

sk proﬁle an

d performa

nce in 2021

Despite the

challenges of

the ongoing pandemic,

our solid

foundation has helped us

to deliver a good performance

wit

h a resile

nt ris

k proﬁle an

d improve

d asse

t quali

ty. 20

demonstrates our commitment to strong and

sust

aina

ble

grow

th, wi

th cont

inued i

mproveme

nts a

cros

s several m

etri

reﬂecting our

robust risk management during the pandemic.

e rem

ain vig

lant to t

he cont

inued i

mpact o

f CO

VID

19 and

an un

even recover

y a

cross m

arket

s and in

dust

res

In 2021, we h

ave see

n a 4

9 per c

ent dec

reas

e in ear

ly aler

exp

osure (

1: $5.

5 billon

, 20

20: $1

0.7 billon)

, ma

inly du

to re

ducti

ons in co

unter

par

y expos

ure and c

lient

s bein

remo

ved from

early alert. Wh

ile early a

lert

have decr

eased

comp

ared w

ith De

cembe

r 20

20, the G

roup re

mains v

iglant i

view o

f per

sist

ent chal

lengin

g condit

ons in s

ome mar

ket

and s

ector

s. Cr

edit G

rade 12 b

alance

s decre

ase

d to $1.

7 billon

(2020: $2.2 b

illon

) ma

inly du

e to repa

yme

nts a

nd outﬂ

ows to

non-p

erf

ormin

g loan

s, tha

t were par

tly o

set by sove

reign

rating downgrades.

The percentage of

investment

-g

rade corporate exposure

als

o incre

ased t

o 69 per cen

t compar

ed wit

h 6

2 per c

ent a

year a

go, reﬂe

cting an in

crea

se in rep

urcha

se agre

emen

balances an

d high-qualit

y orignations

The t

otal cr

edit imp

arme

nt charg

e signﬁcan

tly re

duce

d to

$0.

3 billon (2020: $2.

3 billo

)

, w

ith de

crea

ses se

en acro

all st

ages

. Stag

e 3 impar

ment ch

arge was $

185 mil

lon

(2020: $1.

5 billon

), majo

rt

y of wh

ich was f

rom Cor

pora

te,

Com

mercia

l and Ins

titu

tonal B

ankin

g. Sta

ge 1 and 2

imp

armen

t charg

e decre

ase

d by $7

9 m

illon to $

8 millo

over half o

f which i

s due to r

educt

ion in St

age 2 exp

osur

fro

m lower level

s of ear

ly ale

s, new g

uarant

ees and

impr

ovement in p

robab

ilt

y of defa

ult

, with t

he rema

inder d

to impro

vng macroeconomic forecasts and reduction i

VID-

19 management ov

lays.

Ove

rall sta

ge 3 gros

s loan

s and ad

vances to c

ustom

ers

dec

reas

ed fro

m $9

.2 billo

n to $8

1 bil

lon, wh

ile sta

ge 3

prov

isons we

re lower by $0.7 b

illon at $

4.7 bi

llon (2020:

$5.

3 bill

)

. The s

tage 3 cove

r ratio (

exclu

ding col

later

al)

in th

e total cu

stom

er loan b

ook wa

s stabl

e at 58 pe

r cent

(2020: 58 per c

ent

Average G

roup V

ue at Risk (

aR) in 20

21 was 4

4 p

er cent

lower at $

54.

8 millon (2020: $97

6 millon

), dri

ven by the

extr

eme mar

ket movem

ent

s from 2020 dropp

ing ou

t of the

one

-year V

aR tim

e hor

izon. Howeve

, vola

tilt

y star

ted t

incr

ease i

n the se

cond ha

lf of 2021 dri

ven by the im

pact of n

VID variants

. There were

hree regulator

y V

aR backtesting

neg

ative e

xceptio

ns in 2021.

The r

esult

s of t

he Bank o

f Englan

d’s annual s

olven

cy st

ress

tes

t exercise i

n 20

1 shows t

hat th

e Grou

p is resi

lent und

the B

ank of En

gland s

cenar

io. W

e ha

ve a diver

se and li

qud

balance sheet and

the

results demonstrate our continued

capit

al stre

ngth an

d resile

nce to st

ress

, supp

ort

ed by a

foc

us on sus

tainab

le ret

urns a

nd acti

ons to im

prove our

por

tfolio qualit

e hav

e re-assessed the methodology

for calcul

ating

the G

roup l

iqudit

y cover

age rat

io (L

CR) in 2021, to b

ette

reﬂe

ct the p

orta

bilt

y of liqu

dit

y acros

s the gr

oup wh

ile

still consider

ng currenc

y c

onvertiblity and regulator

int

ra-Gr

oup limt

s. T

he Gro

up L

R remain

ed stab

le at

143 p

er cent (2020: 143 pe

r cent)

r Comm

on Equit

y T

ier 1 (

T1) ra

tio is 14

1 pe

r cent

0: 14.4

per cent

Further details, i

ncludng expla

nation

of pro f

orm

a change

s as at 1 Jan

uar

y 2022

, can be f

ound in

the C

apita

l Review se

ction on Pa

ge 288

tail

s of th

e Gro

up’

s r

isk p

for

manc

e are s

et ou

t in the R

isk

dat

e (pag

es 196 t

o 198) and Ri

sk pr

oﬁle (

pag

es 19

9 to 25

Standard

Chartered

– Ann

ual Rep

t 2021

Strategic report

roup Ch

ief Ris

k Ofﬁc

er’s revi

An update on our risk management approach

r Enter

pris

e Risk Ma

nagem

ent Frame

work (ERMF

) out

lines h

ow we mana

ge ris

k acros

s the G

roup, as we

ll as at bra

nch and

subsidary level

. It gi

ves us the s

tru

cture t

o mana

ge exis

tng ri

sks e

ffe

ctivel

y in line w

ith ou

r Risk App

etit

e, as well a

s allowin

g for

hol

istc r

isk ide

ntﬁcato

n. As p

art of t

he ann

ual revi

ew of the ERM

, we have rep

osito

ned o

ur Cros

s-Cut

ting Ris

ks to I

ntegr

ated

Risk T

es (IRT

)

, w

hich are de

ﬁned as “r

isks t

hat are s

ignﬁcant in n

atur

e and mat

erial

se prim

arly t

hrou

gh the re

levant Pri

ncpal

Risk T

es”

. Th

e ERMF set

s out t

he rol

es and re

spon

siblit

es and mi

nmum gover

nance r

equir

ement

s for t

he man

agem

ent of

IRT

s. Addit

onall

, the C

apital a

nd Liqu

dit

y Princp

al Risk T

e has be

en ren

amed t

o T

asur

y R

isk and t

he scop

e of th

e risk t

has b

een ex

pand

ed to cover In

teres

t Rate Risk i

n the Ba

nking B

ook (IRR

ven thei

r integ

rated n

atur

e, Digtal A

et and Th

ird-Part

y Ri

sks

, have b

een new

ly iden

tﬁed as I

s in t

he ERMF

, in ad

diton t

Climate Risk

incpal

and I

ntegrated Ris

k T

ypes

Prin

cpal ri

sks ar

e risk

s inhe

rent in o

ur stra

tegy a

nd bus

ines

s mode

l. Thes

e are for

mall

y deﬁne

d in our ERMF w

hich prov

ides

a str

uct

ure for m

onito

rng and c

ontro

lling th

ese r

isks t

hrou

gh the B

oard-ap

proved Ris

k Appe

tite. We will not co

mprom

ise

adh

erence t

o our Ris

k Appe

tite in o

rder to p

urs

ue revenu

e growth o

r highe

r retur

. The tab

le bel

ow provid

es an over

of th

e Grou

’

s p

rincp

al and int

egrat

ed ri

sks an

d how the

se are ma

nage

d. In addi

ton to pr

incpa

l risk

s, t

he Gro

up has d

eﬁned

a Risk A

ppet

ite St

ateme

nt for Cli

mate Ri

sk and wi

ll give con

sider

aton to s

tanda

lone Ris

k Appe

tite S

tatem

ent

s for ad

diton

inte

grate

d ris

ks in 202

Fur

the

r det

ail

s can be f

oun

d on

ges 2

58 t

o 279

of o

ur 2021 A

nnu

al Rep

ort

Prin

cpal

Risk T

ypes

How

hese

are managed

Credit R

isk

The G

rou

p mana

ges it

s cre

dit exp

osu

res fol

lowin

g the pr

incp

le of di

versﬁ

caton a

cros

s prod

uct

ograp

hies

, clien

t segm

ent

s and in

dust

y sect

ors

raded

Risk

The G

rou

p shou

ld cont

rol it

s tra

ding p

ort

folio a

nd act

ivt

ies to en

sure t

hat T

rad

ed Ris

k los

ses (ﬁnan

cal or

rep

utat

iona

l) do not c

ause m

ater

ial dam

age t

o the G

roup

’s fr

anchi

reasury Risk

The Group should mainta

n a strong

capital posit

on, includng

the maintenance

of management

buf

fers

suf

ﬁcen

t to supp

t its s

trate

gic aim

s and h

old an ad

equ

ate bu

ffe

r of high-

quali

y liqud a

sse

ts to s

ext

reme b

ut pla

usibl

e liqu

dit

y stre

ss sc

enar

ios fo

r at lea

st 60 da

ys wit

hou

t reco

urs

e to extr

aord

inar

y ce

ntral

bank support

Operational and

echnology Risk

The G

rou

p aims t

o contr

ol Op

erati

onal an

d T

echno

log

y Risk

s to en

sure t

hat op

erat

ional l

oss

es (ﬁnanca

l or

reputational

)

, includng

any related

to conduct of

business matters, do not cau

se material

damage to the

Group

’

s f

ranchise

Information and Cyber

Security R

isk

The G

rou

p seek

s to mi

nmis

e ICS Ri

sk fr

om thr

eat

s to the G

rou

’

s mo

st crit

cal inf

orm

aton a

sse

ts an

stem

s, an

d has a low a

ppet

ite fo

r mate

rial in

cden

ts af

fec

ting t

hese o

r the w

ider o

perat

ion

s and

reputation

of the Group

Compliance Risk

The Group has no

appetite for breaches in

laws and regulations related

to regulator

y non-compl

iance;

rec

ogni

sng th

at whil

st incd

ent

s are unwa

nted

, they ca

nnot b

e enti

rely a

voide

Financal Crime Risk

The G

rou

p has no a

ppet

ite fo

r brea

ches i

n laws a

nd reg

ulat

ions r

elat

ed to ﬁn

ancal cr

ime, r

ecog

nisng t

hat

whi

le incd

ent

s are unwan

ted

, they can

not b

e entir

ely a

voide

Model R

The G

rou

p has no a

ppet

ite fo

r mate

rial a

dver

se imp

lcati

ons ar

isng f

rom m

isus

e of mod

els or e

rro

rs in th

development

or implementaton of

models

, wh

ile acc

epting model unce

rtaint

Reputational and

Sustain

ablity Risk

The G

rou

p aims t

o prote

ct the f

ran

chise f

rom m

ater

ial dam

age to i

ts re

put

ation by e

nsur

ing t

hat any

bus

ines

s acti

vt

y is s

atis

facto

rly a

sse

d and ma

nage

d by the ap

propr

iat

e level of m

anag

emen

t and

gove

rnance o

versight. This includ

es a potenti

al failure to

uphold responsible bus

iness conduc

t or lapses in

our c

ommit

men

t to do no s

ignﬁcan

t enviro

nmen

tal and s

ocial h

arm

Integrated

Risk T

ypes

How

hese

are managed

Climate

Risk

e Grou

p aims t

o meas

ure an

d mana

ge ﬁnan

cal and n

on-ﬁnan

cal ri

sks f

rom cl

imat

e chang

e, and re

duce

emi

sson

s rela

ted t

o our own a

ctiv

tie

s and th

ose re

late

d to the ﬁ

nancn

g of clie

nts

, in ali

gnmen

t with t

Paris Agreement

Dig

tal A

et Ris

Thi

s IRT is cur

rent

ly sup

por

ted by Ri

sk App

etit

e metr

ics e

mbe

dded w

ithn r

elevan

t Princp

al Ris

k T

ypes

Thi

rd-

Part

y Risk

Thi

s IRT is cur

rent

ly sup

por

ted by Ri

sk App

eti

te met

ric

s embe

dde

d with

n relevan

t Prin

cpal Ris

k T

ypes

e Gro

’s Risk M

ana

gem

ent Fr

amewo

rk an

d Syst

em of In

ter

nal C

ont

rol a

ppli

es on

ly to w

hol

ly con

tro

lle

d sub

sida

rie

s of th

e Gro

up, an

d not t

o As

soc

iate

int V

tur

es or St

ctu

red E

ntit

es o

f the G

rou

Standard Chartered

– An

nual Re

por

t 2021

Strategic

report

Emerging

risks

Eme

rging r

isks r

efer to u

npre

dictabl

e and unc

ontro

llable eve

nts w

ith th

e pote

ntial t

o mater

ially i

mpact o

ur bus

ines

s. As p

art of

our co

ntinu

ous r

isk ide

ntﬁcato

n proce

ss, we h

ave up

dated t

he Gr

oup

’s emergi

ng ris

ks f

rom tho

se disc

lose

d in the 2020 Annu

Repo

rt and 2021 Ha

lf Y

ar Repo

rt. A d

etail

ed expl

anati

on of th

e chang

es to ou

r emergi

ng ris

ks com

pare

d with 2020 can be

found on page 2

The t

able b

elow sum

mari

ses our c

urre

nt list of e

mergin

g ris

ks, o

utlin

ng the r

isk tr

end chan

ges sin

ce the e

nd of 2020, the rea

sons

for any ch

ange

s and the m

itgat

ing act

ions we ar

e takin

g base

d on our c

urre

nt know

ledg

e and as

sumpt

ions

. This re

ﬂect

s the

lat

est int

ernal a

sse

ssme

nt as ide

ntﬁed by s

enior ma

nage

ment

. The lis

t is not ex

haus

tive an

d there m

ay be a

ddito

nal ris

whi

ch could h

ave an ad

vers

e eff

ect on th

e Grou

p. Our mi

tgat

ion appr

oach fo

r thes

e risk

s ma

y not elim

nate th

em but s

hows

the G

roup’

s att

empt t

o reduc

e or mana

ge the r

isk

. As cer

tain r

isk

s develop a

nd mate

rials

e over time

, manag

emen

t will take

appr

opri

ate ste

ps to mit

gate th

e risk b

ase

d on it

s impac

t on the G

roup.

Emerging

risks

Risk trend

since 2020

Key ris

k tr

end d

river

How t

hes

e are m

gat

Expandin

arr

ay of

global tensions

Rela

tion

s bet

wee

n China a

nd the

st rema

in fra

gile an

d tens

ions a

increasng

regarding R

ussia’s

presence

on th

e Ukra

inan b

order. The

re has

also

been increa

sng

fricton

bet

wee

his

torc a

llies o

n issu

es su

ch as th

withdra

wal

rom Afghanistan and

AUKUS, a

s well as pr

ote

ction

st po

lices

in th

e wake of COVID-

Global supply chain d

isr

upton c

uld

tip t

he bal

ance o

f power tow

ards

pro

duce

rs an

d pote

ntial

ly le

ad to an

inc

reas

ed fo

cus on lo

cal se

curi

y over

global col

laboration.

•

arp sl

owdown

s in the US

, Chin

a, and m

ore bro

adl

wor

ld tra

de and gl

obal g

rowth a

re a fea

ture o

f Grou

stress scenarios.

These stress tests provide

bil

t

y to

key

ulnera

bilties

hat

managem

ent

can implement

timely inter

ventons

•

taile

d por

tfo

lio revi

ews are co

ndu

cted on a

n ongo

ing

sis, m

ost re

cent

ly re

gardin

g incr

easn

g tens

ions a

roun

Ukr

aine, a

nd acti

on is ta

ken whe

re nec

essa

•

e Grou

p is clo

sely m

onit

orn

g the Chi

na-G7 r

elati

onsh

p

and a

sse

ssin

g the im

pact o

n our bu

sine

ss wi

th tea

ms in

e ﬁrst a

nd sec

ond lin

e of def

ence

•

e Grou

p rema

ins vi

glant in m

onit

orn

g geop

olit

cal

rel

atio

nshp

s. Inc

reas

ed sc

rut

iny is app

lied w

hen

onb

oard

ing cli

ent

s in sen

sitve i

ndus

tre

s and in en

sur

ing

compliance

with sanctions requirements

Energy security

Increas

ed industral demand and an

accelerated transit

on to cleaner

ene

rgy so

urce

s have p

ut a str

ain on

supply li

nes

This has

increased

ten

sion

s bet

en nat

ions a

s power

shif

s toward

s ener

gy exp

ort

ers

, and

energy se

curit

decrea

ses across

developed

markets and emer

ging

mar

ket

s alike. A lac

k of invest

men

t by

oil p

rodu

cers a

s we tran

sito

n coul

als

o lead t

o an incr

eas

e in oil pr

ices i

the short term.

•

As p

art o

f our st

res

s test

s, a

n oil sho

ck sce

nari

o was

developed

•

Sove

reign ra

ting

s, ou

tlo

oks an

d coun

y ri

sk limt

s are

regularly monitored with

per

iod

c updates to senior

stakeholders

•

e Grou

p is imp

leme

ntng a Cl

imat

e Risk wor

k plan a

aim

s to emb

ed Clim

ate Ri

sks a

cros

s all rel

evant Pri

ncpal

Risks in

2022. This incl

udes scenario

analysis and s

tress

testing ca

ilt

to understand ﬁnanc

al risks and

oppor

tunites from climate change

Crystallisat

on

inﬂaton fears

Interest

rates hav

e already increased

or ar

e likely t

o rise i

n severa

l count

rie

as ce

ntral b

ank

s resp

ond t

inﬂatonar

y pressure.

iver

s of pr

ice inc

reas

es inc

lude

recent shortages

of materials and

labour

, and lo

ng-term

oneta

sti

mulu

s, and t

here i

s growi

acceptanc

e that

inﬂatonary shock

wil

l last l

onge

r than in

tiall

y expe

cte

Never

eles

s ther

e is sti

ll a lack o

f ﬁrm

consensus

withn

the industry on some

key inﬂa

ton qu

esti

ons

, as well a

s othe

potential sc

enarios such

as slow

eco

nomi

c growt

h and ri

sng pr

ices

leading to

stagﬂation.

•

As p

art o

f our st

res

s test

s, a s

evere st

res

s in the gl

obal

eco

nomy as

soc

iate

d with a s

harp s

lowdow

n was

assessed

•

th Gro

up-w

ide man

agem

ent an

d T

raded R

isk

sce

nari

os are b

eing deve

lop

ed to exam

ine th

e impa

of a ra

pid bui

ld-up in i

nﬂato

nar

y pre

ssu

res aro

und

e world

•

Sove

reign ra

ting

s, ou

tlo

oks an

d coun

y ri

sk limt

are regularly mon

itored with period

c updates to

senior stak

eho

lders

Standa

Charter

– A

nnu

al Rep

ort 202

Strategic report

roup Ch

ief Ris

k Ofﬁc

er’s revi

Emerging

risks

Risk trend

since 2020

Key ris

k tr

end d

river

How t

hes

e are m

gat

Adapting to

endemic

COVID

9 and a

-shaped reco

very

Although c

ountries with

higher

vacci

nato

n rate

s are mov

ing towar

acce

ptin

g CO

D-

19 a

s ende

mic, t

thr

eat of n

ew vari

ant

s and inc

reas

restrictons remains.

t diff

eren

ces in th

e pace a

nd sca

of va

ccine

roll-outs and ﬁna

ncal

res

ourc

es have w

iden

ed th

e recove

gap an

d thre

ate

n a K

-sh

aped g

loba

rec

over

, w

here co

untr

ies o

r sect

ors

rec

over at a dif

fer

ent rat

e depe

ndin

on th

eir abi

lt

y to adap

t to a po

VID world.

There are deeper s

tructural impacts

on tradit

onal economic systems,

includng sh

ts in labour

demographic

•

As p

art o

f our st

res

s test

s, a s

evere st

res

s in the gl

obal

eco

nomy as

soc

iate

d with a s

harp s

low-dow

n was

assessed

•

nsit

ve sec

tor

s (

e.g. av

iato

n and ho

spita

lt

) are

reg

ular

ly rev

iewed an

d exp

osur

es to th

ese se

ctor

s are

act

ivel

y manag

ed as p

art o

f Credi

t Risk rev

iews

•

xpo

sure

s that c

ould re

sult i

n mate

rial cr

edit im

par

ment

cha

rges an

d ris

k weight

ed as

set inﬂ

aton u

nder s

tres

tes

ts ar

e regu

larl

y revi

ewed an

d acti

vely ma

nage

•

e Grou

’s prior

t

y rema

ins th

e heal

th and s

afet

y of

our c

lient

s and e

mploye

es and c

onti

nuat

on of no

rmal

erati

ons by leve

ragin

g our ro

bust B

usin

ess C

onti

nut

Plan

s whic

h enabl

e the m

ajor

t

y of our co

llea

gues t

o work

remotely where possible

Supply chain

dislocatons

A com

binat

on of su

pply a

nd dem

and

factors, some transitory and some

mor

e str

uctu

ral, ha

ve led t

o glob

supply chain d

isr

uptons, especially as

som

e mar

kets h

ave sta

rte

d to eme

rge

om the p

ande

mic.

The

re ma

y also b

e a fun

dame

ntal s

hift

in su

pply c

hains o

f the f

utu

re, wi

increased con

tingency costs and

tent

ial shif

s to move pr

oduc

tion

closer to consumers.

•

xpo

sure

s that m

ay res

ult in m

ater

ial cre

dit imp

arm

ent

and i

ncre

ased r

isk-weight

ed as

set

s are cl

osel

y mon

itore

and activ

ely managed

•

ctor

s whi

ch exhib

t high su

pply c

hain pr

ess

ure and

lnera

bilt

y are r

egul

arly r

eviewe

d and ex

posu

res to

ese se

ctor

s are ac

tivel

y man

aged a

s par

t of cre

dit

sk revi

ews

•

e a

ctive

ly uti

lse Cre

dit Ris

k mitg

atio

n tech

niqu

includ

ng credit insura

nce and col

lateral

Emerging

Markets

Sov

ereign

risk

COVID-

19 h

as cau

sed li

qudit

y a

potential solv

enc

issues for so

me of

e world

’s poor

est cou

ntr

ies

, with

seve

ral neg

ati

ve soverei

gn rati

actions observed.

ghtenng of

ﬁnanc

al conditons

in dev

eloped markets may lead to

local curre

ncy depreciat

ons against

e US doll

, p

ushin

g up deb

reser

vic

ng costs.

•

xpo

sure

s that m

ay res

ult in m

ater

ial cre

dit imp

arm

ent

and i

ncre

ased r

isk-weight

ed as

set

s are cl

osel

y mon

itore

and activ

ely managed

•

e co

nduc

t stre

ss tes

ts an

d por

tfo

lio rev

iews at a

oup, cou

ntr

, and b

usin

ess le

vel to as

ses

s the im

pact

of ext

rem

e but pl

ausib

le event

s an

d mana

ge the

por

tfolio accordingly

•

e a

ctive

ly uti

lse Cre

dit Ris

k mitg

atio

n tech

niqu

includ

ng credit insura

nce and col

lateral

•

e a

ctive

ly tra

ck the p

art

icpat

ion of o

ur foo

tpr

int

cou

ntri

es in G20’s Com

mon Fram

ework Ag

reem

ent an

Debt Ser

vice Suspension I

nitative

for Debt T

reatment

and the

socia

ted exposure

Expandin

stakeholder

expectations for

environmental,

cial

and corporate

gov

ernance

The

re are r

isk

s if the G

rou

p is unab

to adapt

to new regulation quic

as we

ll as me

etin

g publ

icly st

ate

sustainab

lity goals a

nd helpi

client

s transiton.

Environmental target

s are being

inco

rpo

rate

d into m

any coun

trie

s’

domestic polic

es and corporations’

business models,

with increased

pressu

re to

et ambitous sustainablit

als. T

his inc

lude

s an incr

eas

e in

disclosure requirement

The

re is f

ragme

ntat

ion in t

he pac

and scale

of adoption around the

world, which

adds complexity in

managing

a global business.

The

re is a r

isk th

at foc

us on

envi

ronm

ental g

oals ove

r soci

al and

gover

nan

ce conce

rns

, as wel

l as

fragmentation in

taxonomies,

y lead t

o unint

ende

consequences.

•

e re

main co

mmit

ted to b

eing a r

espo

nsib

le ban

minmis

ng our environmental i

mpact and embedding

our va

lues through our

strengthened Posit

on Statements

for s

ensi

tve se

ctor

s and a l

ist of pr

ohibt

ed act

ivt

ies th

the Group wil

l not ﬁnance

•

e Grou

p is pro

acti

vely p

arti

cpat

ing in in

dust

int

iatve

s and f

ramewo

rk deve

lopm

ent on b

oth cli

mate

and b

iodve

rsi

ty, to hel

p infor

m our in

ter

nal ef

for

and capabilties. Increa

sed scrutiny is applied to

envi

ronm

ental a

nd soc

ial sta

ndard

s in prov

idng

ser

ices t

o clien

•

taile

d por

tfo

lio revi

ews are co

ndu

cted on a

n ongo

ing

sis and a

ctio

n is taken w

here n

eces

sar

•

Stress tests are

conducted t

o test

resil

ence to clima

te-

rel

ated r

isk

s in lin

e with l

ocal re

gula

tor

y re

quire

ment

•

e Grou

p has re

lea

sed ne

t zero ta

rget

s and s

pecif

c

emisson reducti

on targets for

carbon-sensitve

sector

The G

rou

’

s TCFD Repor

t inc

lude

s more d

etail

s on clim

ate

sk and n

et zero

•

r Gre

en and S

ustai

nabl

e Produ

ct Framewo

devel

ope

d with t

he sup

por

t of Su

stain

alyt

cs

, has b

een

inf

orme

d by indu

str

y an

d sup

vis

y pr

incpl

es and

sta

ndard

s such a

s the G

ree

n Bond Pr

incp

les an

d EU

onomy for

sustainable activti

•

e h

ave deﬁn

ed th

ree St

ands t

o use ou

r uniq

ue abilt

to wor

k acro

ss bo

unda

rie

s and con

nect ca

pital

, peop

le,

ide

as and b

est p

racti

ces to he

lp add

ress s

ome key

socioeconom

c chal

lenges and enable

a just transit

on

•

e ar

e develo

ping an a

ppro

ach to f

urt

her in

tegr

ate

G ris

k manag

emen

t acro

ss th

e ERMF

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic

report

Emerging

risks

Risk trend

since 2020

Key ris

k tr

end d

river

How t

hes

e are m

gat

Social unrest

COVID-

19 h

as re

stri

cted t

he abil

to demonstrate i

n some markets,

although

the prolonged

nature of

e pand

emic an

d impo

sed vac

cine

and l

ockdow

n mand

ates h

ave le

d to

tensions i

n some countries.

Ine

qual

y has in

crea

sed a

s a resul

t of

e pand

emic

, which m

ay gi

ve rise t

societal

disturbances. Other

causes

suc

h as clim

ate an

d socia

l just

ce also

rem

ain a fo

cus.

•

e Grou

p is com

mitte

d to ma

nagin

g huma

n righ

imp

act

s thro

ugh ou

r socia

l safe

guar

ds in ou

r Posito

Statements

•

e Human R

ight

s W

kin

g Grou

p has d

evelop

ed an

app

roach t

o moni

tor, repor

t and e

scala

te hum

an rig

hts

issues to our

Management T

eam for considera

ton with

our Group

’

s stra

•

e continue to

supp

ort our

erations

and communit

o are gre

atly i

mpact

ed by COVID-

19 th

rough va

riou

aid programmes and ﬁnancng

•

e co

nduc

t por

tfol

io revie

ws at a G

roup, co

untr

y, and

bus

ines

s level t

o ass

ess t

he imp

act of ext

rem

e but

plausible geopolit

cal events

Data and digtal

Regulatory requirements and client

expectation

relating to data

management, data protection,

data

sover

eignt

y an

d pri

vacy a

re incr

easn

includ

ng the ethical

use of data and

tif

cial in

tellg

ence. T

he Gr

oup, as

well a

s the in

dust

, con

tinu

es to fa

cha

lleng

es to kee

p pace w

ith th

volume of

data-related regulatory

change.

Rapi

d adoption a

increased

sophistc

ation of

new technologies

y expo

se th

e Grou

p to new

technology-

related risks, includ

ng

heightened cyber securit

y risks.

Dat

a is be

comin

g more c

oncen

trat

in th

e hand

s of gover

nme

nts a

nd big

ivate co

mpan

ies. T

here a

re als

rel

ative

ly few p

rovid

ers o

f new

technologies s

uch as

cloud computing

ser

vices

•

e a

ctive

ly mon

itor, both i

n hous

e and t

hroug

h exter

nal

counsel, regulatory developments in

relation to data

management, includng

records management, data

pro

tect

ion and p

riva

, dat

a sovere

ignt

y and a

rtif

ci

intellgen

•

e Grou

p has f

urt

her e

mbed

ded t

he exi

stng r

isk

control frame

work for

data management risks, which

s stren

gthe

ned a

nd str

eamli

ned r

isk over

sigh

•

e h

ave est

ablis

hed a d

edica

ted Da

ta and Pr

ivac

erat

ions t

eam and m

obil

sed a G

roupw

ide

transformation

programme t

o buil

d data

management

cap

abilti

es and e

xper

tis

e acro

ss th

e Grou

p to ens

ure

compliance

with data management regulations

New

business

structures, channels

and competit

on

The

re are si

gnﬁcan

t shif

ts in c

ustom

valu

e prop

osit

ons

. Fintec

hs are

deliverng

digtal-only ban

king

fer

ings w

ith a grow

ing us

age o

mac

hine le

arn

ing to pr

ovide h

ighly

per

sonalised se

ices.

In additon, digtal asset

s are gainng

adoption and

linked business models

are i

ncreasng

in prominence

. These

present material opportunites as w

ell

as r

isk

Fail

ure to a

dapt an

d harn

ess n

technologies a

nd new business models

would place

banks at a competitv

disadvantage.

The

re is an in

crea

sng us

age o

par

tne

rsh

ips and a

llian

ces by ban

ks to

respond to disrupton

and changes in

the industry

. Howev

, this

exposes

ban

ks to t

hird-p

art

y ri

sks

•

e m

onito

r emer

ging tr

ends

, opp

ort

unit

es and r

isk

devel

opme

s in tech

nolo

gy th

at ma

y have im

plcat

ions

for t

he ban

king s

ecto

•

e ar

e enhan

cing ca

pabil

ties t

o ensu

re our s

yste

ms are

res

ilent

, we rem

ain rel

evant an

d can capi

talse q

uick

ly on

technology trends

•

Enh

ance

d digtal c

apabi

lties h

ave be

en rol

led ou

t in

nsum

, Pr

ivat

e and Bu

sine

ss Ban

king

, par

ticu

larl

around onbo

arding, sales, and marketing

•

e h

ave devel

ope

d and imp

leme

nted a r

isk

management appr

oach to add

ress the specifc risks

ari

sng f

rom dig

tal as

set ac

tiv

ties

, as well a

s inte

rnal

guidance

on how

to leverage

existng risk management

pra

ctice

s for new a

ctiv

tie

s and na

scent r

isk

•

rate

gic par

tne

rsh

ips and a

llianc

es are b

eing se

t up

wit

h ﬁnte

chs to b

ett

er comp

ete in t

he mar

ket

s in whic

we op

erate

•

Third-

Part

y Ris

k management

polices, procedures

and

gover

nan

ce are be

ing rev

iewed to e

nsu

re ade

quat

covera

ge acr

oss all G

rou

p acti

vtie

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic report

roup Ch

ief Ris

k Ofﬁc

er’s revi

Emerging

risks

Risk trend

since 2020

Key ris

k tr

end d

river

How t

hes

e are m

gat

ale

nt poo

ls of

the future

COVID-

19 a

ccele

rate

d the m

ove

towar

ds rem

ote wor

kin

g for

emp

loyees

. Howeve

r this h

as rais

concerns around

fective

mitgation

and management

of Operational,

Inf

orma

tion a

nd C

ber S

ecur

Compliance,

and Conduct Risks.

The extend

ed nature

of the C

OVI

pan

demi

c is cont

inun

g to res

tric

emp

loyees

’ abilt

y to o

perat

e in the

preferred hybrid

working location

for

mat (b

ween h

ome an

d ofﬁc

)

causing

otentia

l risks to wellbei

ng,

se of co

llabo

ratio

n and le

arni

from others.

A sho

rta

ge of key sk

ills is d

riv

ng a

war fo

r tale

nt whic

h, com

bined w

ith

cross-

border mobil

ty restrictons and

gover

nme

nt prot

ecti

onst p

olice

s, w

ill

especially in

tensfy competiton for

local talent

•

e assess and manage

ople-

related risks, for ex

ample,

organisaton,

capabilty

, conduct and

culture, as part

of ou

r Gro

up ris

k mana

geme

nt fr

amewor

k and ou

Peop

le Str

ategy

•

e Grou

p unde

rto

ok a Fut

ure of W

k chang

e ris

asses

sment which considered Operatio

nal, Compliance,

Dat

a Priva

cy an

d C

ber S

ecur

y Risk

s in ad

diton t

wellbeing, c

ulture and leadership

•

e Grou

p has ro

lled o

ut hybr

id-wor

kin

g opti

ons in

28mar

ket

s and over 7

3 per ce

nt of em

ployee

s in the

loc

atio

ns are no

w on ﬂexi-wo

rki

ng arr

angem

ent

•

llbein

g is one o

f the key pi

llar

s of the G

rou

’

s d

iver

st

and i

nclus

on str

ateg

y and we h

ave emb

edd

ed mul

tipl

tools and

resources to support c

olleague wellbei

ng.

These include

toolkit

for managers and empl

oyees,

conﬁ

dent

al Empl

oyee As

sis

tance Pr

ogram

, an onl

ine

programme to

supp

ort ph

ysical wellbeing, inc

reased

tra

inng fo

r Ment

al Hea

lth Fir

st Aid

ers

, an on-t

he-g

mob

ile app a

nd pro

acti

ve train

ng in res

ilen

•

e h

ave emb

arked o

n a mult

i-year jo

urney f

ocus

ed on

ups

killn

g and re

-ski

llng ou

r work

force by b

uildn

g a

culture o

f conti

nuous learning

and lever

aging technology

to en

able e

mploye

es to bu

ild f

utur

e read

y skil

ls thr

ough

content

and cr

-f

unc

iona

l experiences

Ris

k hei

ght

ene

d in 2021

Ris

k red

uce

d in 2021

Risk remained

consistent with 20

20 levels

e ris

k tre

nd ref

s to th

e overa

ll ri

sk sco

re tr

end

, whi

ch is a co

mbin

at

on of p

oten

tia

l imp

act

, likel

hoo

d and v

elo

cit

y of ch

ang

A K-sha

ped g

lob

al rec

over

y o

ccur

s wh

ere co

unt

rie

s or se

cto

rs re

cove

r at dif

fer

ent r

ates f

oll

owin

g a rec

ess

ion

Summar

e rem

ain f

ully com

mitte

d to rob

ust ri

sk mana

geme

nt, em

bracin

g innovat

on whil

e ensur

ing th

at we achieve t

he rig

ht ris

out

comes w

hen ad

opti

ng new te

chnol

ogies a

nd digtal c

apabilt

ies. T

he CO

VID

19 pand

emic do

minat

ed the e

cono

mic clima

thr

ougho

ut 2021 and re

cover

y rem

ains un

even. Co

ntinu

ed focu

s on enh

ancing r

isk ma

nagem

ent cap

abiltie

s and lever

aging o

tec

hnolo

gy wi

ll help th

e Grou

p to eme

rge str

onger f

rom th

e pand

emic

, as a more s

ustai

nable, i

nnovatve

, resile

nt and clie

centred bank.

Mark Smith

Gro

up Chie

f Risk Of

ﬁcer

17 Feb

ruar

y 202

Suppor

ainab

ade

In March 2

021, we launched the Sustai

nable

rade F

inance Proposit

on – an intiatv

e to help

companies i

mplement sustainable practic

and dev

elop more resilen

t supply chains.

The propositon, whic

h is aimed at cli

ent

s in

Asia, Afr

a and the Middle East, Europe and

the Americas, will support the ﬁnancng of

sustainable goods, assist sustainable suppl

ier

and help ca

bon-

intensve indus

tres transiton.

These products will support global supply

chain ac

ivties – esti

ated at $1

9 t

ril

lon by

the W

orld T

rade Orga

niza

ton – to become

more sustainabl

Rea

d mor

e onli

ne at

.sc.com/

sustainab

letrade

eset

ting G

lobalisaton

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic

report

Standard Chartered

–

nual Re

por

t 2021

Strategic report

Stakehold

ers and responsi

blites

Det

ailed i

nfor

maton a

bout h

ow the Bo

ard eng

ages di

rectl

wit

h stakeho

lder

s and sh

areho

lder

s can be f

ound in t

Director’

s report on pages 110 to 1

12.

Examples of a selection

of the Board’s princ

pal decisons are

included

throughout this

section.

Thi

s secti

on also f

orm

s our key non-ﬁn

ancal dis

clos

ures in

rel

ation t

o secti

ons 414C

A and 4

4CB of t

he Com

panie

s Act

2006. Our non-ﬁ

anc

al informaton statement can be found

at th

e end of t

his sec

tion on p

age 78.

Stak

eholder

s and

iblites

As an in

ternat

onal ba

nk wo

rking i

markets

, stak

eho

lder engagement

is crucial in ensu

ring we understand

loc

al, reg

iona

l and g

lobal pe

spec

tives

and t

ren

ds which i

nform ho

w we

dobusiness.

Thi

s secti

on for

ms our

ect

ion 172

isclo

sure, de

scri

bng how

the d

irecto

rs co

nside

red th

e matte

rs se

t out in s

ectio

n 172(1)(

)

to (f

) of the C

omp

anies Act 200

6. It al

so for

ms the d

irecto

rs’

sta

temen

t requi

red un

der se

ction 414CZ

A of t

he Act.

e the fo

llowing p

ages f

or:

•

how we

engag

eholder

s to understand their interests

e page

s 51 to 55

•

how we en

gage em

ployee

s and res

pond t

o their in

teres

e page

s 55 to 59

•

how we re

spon

d to stakeh

olde

r intere

sts t

hrou

sustainab

le and responsibl

e business

e page

s 6

1 to 7

Our stakeholders

Client

Regulators

d gove

rnm

Inve

Supplie

Socie

Employ

se st

udy

ping H

on’

business

At th

e star

t of th

e CO

VID

19 p

ande

mic, H

aron o

wne

an informal busin

ess in Lira City

, Ugand

specialsing

in se

edl

ings f

or sal

e. It su

ppor

d his fa

mily a

nd a sma

workforce of

workers

COVID-19 stal

led H

aron’s dre

am to ex

pand h

is bu

sine

and ke

ep his w

orker

s. W

ith su

ppo

rt fr

om Fut

urem

aker

Har

on is ge

tti

ng ba

ck on tr

ack

. He acq

uire

d new bu

sine

ills

, net

wor

ked w

ith fe

llow en

trep

ren

eur

s and t

urn

ed his

business around.

Production quan

tity and qualit

y are steadily improvng.

Har

on’s gree

nhou

se (

e third l

arge

st in Li

) pr

odu

ced

,000 s

eed

ling

s a mont

h comp

are

d with 20,0

00 eve

x mont

hs be

fore COVID

19 w

hen h

e had no g

ree

nhou

se.

Usi

ng his n

ew ski

lls

, Haro

n also m

ento

red 1

00 you

ent

rep

rene

urs a

nd is n

ow loo

king a

t a regi

onal e

xpan

sio

Strategic

report

Standard Chartered

– Annu

al Rep

ort 202

Engagi

stak

eholder

Listen

g and r

spondi

g to sta

keholder

priorties and conc

ns are crit

cal to achie



ourPurpose and deliverng on our br

and

promise, Here for good. W

e stri

e to maintan

open and constructive relationsh

ps with a

widerange of stak

eholders includng regulators,

lawmakers, clients, investors, civl society and

communit

y gro

ups.

In 2

021, our engagement took man

y forms, includng

one-to-one

ses

sions

using online

channels and c

alls, virtual

roundtables,

written responses a

nd targeted surveys.

Thesec

onversations, and

the issues that

underpin them,

helpi

nfor

m our bu

sines

s strat

egy an

d enabl

e us to op

erate

asa re

spon

sible an

d sust

ainabl

e busin

ess

Stakeholder

feedback is communic

ate

internally to seni

man

ageme

nt thro

ugh th

e relevant f

oru

ms and gove

rning

comm

itte

es such a

s the Su

stain

ablit

y For

um, an

d to the

Board

’

s Cult

ure and Sustainablit

y Committe

e (

CSC) which

over

sees t

he Gro

’s approa

ch to it

s main re

latio

nshps

withstak

olders.

e communic

ate progress regularly to external

stake

holde

rsth

rough c

hanne

ls such a

s sc.co

m and thi

repor

t.More detaile

d informaton on mate

rial sustainablit

topics can

be found in

our sustainable

and responsible

bus

ines

s sect

ion on pa

ges 61-

In CPBB

, we take ser

ious

ly our r

espo

nsibli

ty t

o supp

ort ou

more vulnerable cl

ients. A global framew

ork is in

place to

help ensure the

fair treatment of vulnerable customers in

product dev

elopment and throughout the whole customer

jou

rney

. T

rain

ng is prov

ided to f

ront

line st

aff ac

ross o

bran

ch, con

tact cen

tre and d

igtal ch

annel

s to iden

tf

y and

appr

opri

ately h

andle v

ulne

rable cl

ient

s, and we h

ave als

impleme

nted an education

al trainng programme for thos

client

s who require ass

istance in navigat

ng online and

mobilec

annels.

In ord

er to act in t

he be

st inter

est

s of our c

lient

s, we us

e our

clie

nt insgh

, along

side o

ur robu

st poli

ces, pr

oced

ures an

the G

roup’

s Ris

k Appe

tite, to d

esign a

nd of

fer pro

duct

s and

ser

vices which meet client need

s, regulator

y requirement

and G

roup p

erfo

rman

ce targe

ts w

hile con

trib

utng to a

sustainable and resil

ent environment.

For e

xam

ple, thr

ough understanding the

challenges some

ofour client

s face in balancing their ﬁnancal manag

ement

nee

ds wi

th thei

r growing c

ommit

ment

s to su

staina

blit

, in

2021 we laun

ched a m

arket

-ﬁr

st sust

ainabl

e trad

e ﬁnance

propositon to

suppor

t sustai

able

supply chains for our

clie

nts

. W

e als

o launc

hed ou

r Sust

ainabl

e Account in t

UKan

d U

, a new sol

utio

n that en

ables c

orpo

rate cli

ent

tocon

tribute to sustainable

development, while mainta

ning

dail

y acces

s to the

ir cash

All new pr

oducts are subject to a

comprehen

sive

approvals

process to

test design effective

nes

and robus

tness of the

implementaton process. For in

vestment product

s sold

indviduals, this includes

isk

scores which

aid our assessment

of client suitablit

For in

dvid

ual clie

nts

, we cons

ider ea

ch clien

t’s ﬁnan

cal nee

and per

sonal circumstan

ces to assist us in off

ering suitable

product recommendations.

e ach

ieve this u

sing a glo

bally c

onsis

tent m

etho

dolo

that tak

into consideraton loca

l regulator

requirements

to rev

iew prod

uct ri

sks a

gainst t

he clie

’

s r

isk app

etite

consider

ng ﬁnancal objectves, ﬁnancal abilt

, and

owled

ge. Clien

ts are a

lso prov

ided w

ith cle

ar and si

mple

doc

ument

ation t

hat ou

tline

s key produ

ct feat

ures an

d risk

pri

or to execu

ting a t

ransa

ction

Fee

s and char

ges are di

sclo

sed to cl

ient

s in line w

ith

regulator

y requirements and

industr

y best pr

actice, a

where availa

ble, benchmark

ed against com

petitors.

ForPer

son

al and Bu

sines

s Bank

ing pro

duct

s, a

ccurat

inte

restra

tes cha

rged, f

ees an

d othe

r charge

s as bille

tocli

ent

s are moni

tore

d and as

sess

ed loc

ally

, w

ith glo

bal

over

sight

. T

igge

rs fo

r outli

er pric

es are deﬁ

ned and s

ubjec

toann

ual rev

iew

. Apr

oces

s is in pla

ce to revie

w compla

int

pri

or to ame

ndmen

ts t

o annual i

ntere

st, fe

es and c

harges

How w

e c

reate value

e want t

o delive

r eas

, ever

yda

y banki

ng sol

ution

s to our

clie

nts in a s

imple a

nd cost

-e

ffe

ctive wa

, and wi

th a grea

cust

omer ex

per

ience. We enable i

ndvi

duals t

o grow and

prot

ect th

eir wealt

h; we help bu

sines

ses t

rade, t

ransa

ct,

investan

d expa

nd; and we als

o help a var

iet

y of ﬁna

ncal

insttutions, includng

anks, public sector

and development

org

anisat

ons

, with t

heir ba

nking n

eed

w w

e ser

e and engage

Clien

ts ar

e at the h

eart o

f ever

yth

ing we do. In 2021

, we used

regular surveys, experience forums and dig

tal channels to

cont

inue to s

tren

gthen o

ur abilt

y to u

nder

stan

d and me

clie

nt nee

ds as th

ey emerg

In CCIB

, we stren

gthe

ned ou

r annual f

eedb

ack pro

cess by

capt

urin

g how clien

ts f

eel ab

out wh

at we off

er the

m (

such a

advice, ser

vice,

digtal channels

) and ensuring our relationsh

man

ager

s can the

n enga

ge with t

heir cl

ient

s to addr

ess t

heir

fee

dbac

k. W

e al

so lau

nched a ‘

oice o

f Client

’ e-

lear

ning

module to train

our colleagues to obtain a

leverage client

insghts and respond with enhanced, inno

vatve propositons.

Client

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

Stakehold

ers and responsi

blites

Thro

ugho

ut 2021, we als

o maint

aned o

ur shar

p focu

s on

improvng

client experience across the Bank. W

e opened

our ﬁr

st Pr

iort

y Pri

vate Ce

ntre in H

ong Kong a

s part o

f our

ong

oing ef

for

ts t

o bett

er ser

ice clie

nts

. Prior

t

y Privat

e off

ers

a ded

icate

d ser

ce mode

l, supp

ort

ed by a highl

y expe

rien

ced

tea

m of bank

ing an

d ﬁnancal ex

per

, toge

ther w

ith be

spoke

lifesty

ivleges.

In CCIB

, we focus

ed on de

liver

ng a cons

isten

t globa

experience for larger clients across our proprietary platform

includ

ng more than 300

digtal a

nd data in

tiatves across

47market

Dep

loying o

ur agil

e worki

ng pract

ices ha

ve enab

led us t

increase our speed of decis

on-making and cha

deliver

tome

et clie

nt nee

ds fas

ter

. We accele

rated t

he lau

nch of ou

strategic par

tnership with Atome Financal,

hich operates

Asia’

s largest buy-no

w-pay-

later platform, supporting our

ambi

ton to ex

pand o

ur reac

h and scal

e withn t

he ma

mar

ket segm

ent vi

a a digtal-ﬁr

st appr

oach

, under

pinn

bydigta

l acquis

tion an

d new par

tner

ship m

odel

Reﬁnng o

ur proc

esse

s also en

able

d us to elim

nate 262 millo

hou

rs of c

lient wait

ng tim

e annual

, and o

ur ef

fort

s were

recognised wit

h a

Digtal T

ransformation and Operat

ional

xcellen

ce A

ward an

d inclu

son as a ﬁna

lst in t

wo fu

rth

extern

al awards.

Whe

re conce

rns ar

e found

, we have pr

oces

ses and

guid

elnesi

n place, s

pecif

c to e

ach of o

ur clien

t busin

ess

es,

toun

der

stand an

d resp

ond to cl

ient is

sues a

nd prom

ptly

resolve complai

In 2022

, we will co

ntinu

e to str

ength

en our di

gtal

transfo

rmation and innovaton capabilties

Thei

r interests

•

Differentated product and ser

vice offering

•

Digtally ena

bled and positve e

xperience

•

Sustain

able ﬁnance

Managin

g frontline employees and

the

irincent

e ha

ve an inst

tuti

onal app

roach t

o trainn

g our sa

les

teams who are requi

to complete mandator

y trai

nng

and appropriate regulat

ory licensng requireme

nts

bef

ore th

ey commen

ce sell

ing pro

duct

s. In CCIB

, this

also includes a

ppropriate certifcations in Cash, T

rade,

Secur

ites Ser

vices

, F

ancal Markets, I

slamic Banking

product

s and Sustainab

le F

inan

ce.

e hav

e embedded

a balanc

ed sco

recard a

pproach

for all frontline

employees a

nd frontline management

employees which

incentvis

es performance and

beh

avio

urs a

ligne

d to bot

h our ﬁnan

cal and n

on-

ﬁnancal prior

ties. This ensur

es a balanced perf

ormance

sess

ment o

f ourpe

ople an

d drive

s appro

priat

e client

engagement behaviour

s. Internal awards

also provide

recogniton

for exemplar

dem

onstration

of our valued

beh

avio

urs a

nd goin

g above and b

eyond to m

eet and

excee

d the ex

pect

ation

s of our cl

ient

ohelp en

sure th

e rigo

ur of ou

r sales p

roces

s and ou

people’

s engagement skills, we period

cally requi

employees to

complete refre

sher tra

inng a

cer

tif

cati

on, and i

n our CPBB s

egme

nt we also

supplement this with mystery shopping programmes

and cl

ient call b

ack

How w

e c

reate value

e engage with

public authorites to

pla

our part in

supporting the e

ffective function

ng of

the ﬁnanca

l system

and the broader

economy

w w

e ser

e and engage

e actively

gage

ith

governments, regulators and

pol

icy

maker

s at a globa

l, regi

onal and n

atio

nal level to s

hare

ins

ghts a

nd supp

ort t

he develo

pmen

t of bes

t practi

ce and

adoption of consistent

approaches across our markets.

In 2

021, we engaged with

regulators, government ofﬁc

als and

trade associatons on

a broad range of topics

hat

include

recover

y from CO

VID

, int

ernatonal trad

e, sustainable

ﬁnan

ce, data

, cyb

er se

curit

, d

igtal ad

optio

n,and in

novaton

e als

o enga

ged wi

th of

ﬁcals on th

e ﬁnanca

l ser

ces

regulator

y en

vironment

, i

n part

ular on prudential,

ﬁnancal

mar

kets

, cond

uct and ﬁn

ancal cr

ime fr

amewor

ks.

In support of this, w

e have a Group Public

and Regulator

Affairs team responsible for engagement as

well as

identf

yin

g and analysing relevant polices

, legislaton and

reg

ulati

on. Th

is work i

s overse

en by sever

al govern

ance

forums withn the Bank, includ

ng the R

egulator

Developments Asse

ssments Forum and the Sustainable

Financ

e Regulator

y P

olic

y F

um, which

comprise senior

exec

utives r

epresenting

business and control

uncti

ons to

ensure alignment between advocacy and business strategies.

Regulators and go

vernments

Client

ont

inued

Engaging stak

eholder

continu

e als

o cont

inuou

sly as

ses

s our pro

duct p

ortf

olio fo

r new

sksto e

nsur

e they rem

ain appr

opria

te for cl

ient ne

eds an

aligned

to emerging r

gula

tion. These q

uantitatv

e and

qualitatve

sessments enable a complete

view of whether

to con

tinue

, grow or ret

ire pro

duct

Strategic

report

Standard Chartered

–

nual Re

por

t 2021

e me

et all rel

evant tran

spar

enc

y requi

remen

ts an

d engag

through ongoing d

ialogue with regulators and gove

rnments

submittng responses to

formal consultations and

part

icpating in industr

y work

ing groups.

e are

committed to c

ompl

ying with

gislat

on, rules and

other regulator

y requi

rements applicable to

our business

and o

perat

ions in t

he jur

sdict

ons wi

thn whic

h we opera

te.

This ensures the Group

meet

s obligat

ons and s

upport

the r

esilen

ce and ef

fec

tive f

uncti

onng of t

he bro

ader

ﬁnanc

al system

and economy

In 2

2, w

e expect to engage on regulation

and legislaton

socia

ted wit

h the co

ntinu

ed rec

over

y from COVID-19

intern

atonal trade, sustain

able ﬁnance and climate action

digtal innovaton, data, pri

vacy

, artif

cial intellgence and

cyber securi

For more

details on our engagement

with regulators and gov

ernment

s, as

well as our i

ndu

stry and membership

associatons

please see

sc.com

/pol

itcalengagement

Thei

r interests

•

Str

ong capi

tal bas

e and liq

udit

y pos

iton

•

Robust

standards for

conduct and ﬁ

nancal c

rime

•

Hea

lthy econ

omie

s and comp

etit

ve marke

•

Positve

sustainable development

•

Digtal innovaton in ﬁnancal ser

vices

Regulators and go

vernments

continued

Princpal B

oard deci

son – divde

nds and bu

backs

ring 2021, t

he Bo

ard deci

ded to ap

prove the p

aym

ent

of a ﬁna

l divd

end for t

he year e

nded 31 D

ecem

ber 2020

of $0.09 p

er ordin

y shar

e and reco

mmen

ce the sh

are

y-back pr

ogramm

e, whic

h had be

en susp

ende

d in

Marc

h 20

20 in r

espo

nse to a r

eque

st fro

m the PR

A and as

a consequence of the

unprecedente

challenges facing

the wo

rld du

e to the COVID-19 pande

mic at th

e time.

As p

art of i

ts de

cison-m

akin

g proce

ss, t

he Boa

rd took

account of

drails i

mplemente

d b

y the regulator

regarding capital dis

trbution and no

ted the impor

tance of

approving distrbutions with

n an appr

priately prudent

amewor

k. Th

e impact o

f diff

erent m

etho

ds of re

turn

ing

capit

al to invest

ors wa

s a key consid

erato

n for th

e Board

and it r

ecogn

ised t

hat a bal

ance be

ween di

vden

res

umpti

on and re

comme

ncing a b

uy-bac

k progra

mme

provided go

od ﬂexiblit

y and sustainable retu

rns.

The Board continued

its careful consideraton

stakeholder interests during 20

21, by appro

ing a

n interm

div

dend o

f $0.0

3 per o

rdinar

y s

hare an

d a fur

ther s

hare

y-back pr

ogramm

e up to a ma

ximu

m consid

erato

n of

$250 m

illon, r

einfor

cng the s

ignﬁcance o

f balan

cing a

caut

ious a

pproa

ch to capit

al mana

geme

nt in light o

f the

continued impact

of the pandemic against returns to

our shareholders.

How w

e c

reate value

e aim t

o delive

r robus

t retu

rns an

d long-t

erm sus

taina

ble

value for

our investors.

w w

e ser

e and engage

e rel

y on capi

tal fro

m debt an

d equit

y inve

stor

s to execu

our b

usine

ss mo

del. Wh

ethe

r they ha

ve shor

- or long-

term

inv

stment horizons, we

provide our inv

estors with informaton

abo

ut all as

pect

s of pro

gres

s again

st our st

rate

gic and

ﬁnancal framewor

ks.

r foot

print a

nd inten

t to be

come th

e world

’

s mos

sustainable and

respon

sible

bank provide our in

vestors with

exp

osure t

o oppo

rtu

nites i

n emergi

ng mar

kets

. W

e beli

eve

tha

t our int

egrat

ed appr

oach to E

SG is

sues

, as well a

s a

strong risk and

compliance

culture, is a k

ey differentator

e de

livere

d a resile

nt ﬁnanc

al per

form

ance in 2021,

rea

fﬁrm

ed our b

usine

ss st

rateg

y and ha

ve now set o

ut cle

actions to ac

celerate the del

y of our ambit

on of double-

digt

retur

n on

tangible equit

Regular a

nd transparent engagement with our in

vestors,

and t

he wide

r market

, hel

ps us und

ers

tand inves

tor

s’ need

and tailor

our public informaton acc

ordingly

. In additon

direct engagement

rom

our In

vestor R

elations team, we

comm

unicat

e thro

ugh quar

ter

, ha

lf and f

ull-year re

sult

conferences, roadshows, in

vestor days and media

rele

ases.

There was c

ontinued adoption of virtual mediums during the

year d

ue to th

e pande

mic, al

beit we ho

sted t

he Innovat

ion

and D

igtis

aton event i

n a hybri

d form

at in our o

fﬁce in

Basinghall A

venue, L

ondon in October 2

021.

Inv

estor feedback

, recommendations

and request

s ar

considered by the

Board, whose members keep abreast

of cur

rent t

opics o

f inter

est

. Stand

ard Char

tere

d PL

’

Ann

ual Ge

neral M

eeti

ng (A

GM) i

n May 2021 was o

pen to

shareholders through electronic

attendance, where they w

ere

able t

o view a li

ve vide

o feed o

f the me

etin

g, sub

mit votin

ins

tru

ctons a

nd ask dir

ect que

stio

ns to th

e Board

. Simlar

the G

roup C

hairm

an, alo

ngsid

e cert

ain oth

er mem

ber

s of the

ard, hos

ted a v

irtu

al stewar

dship even

t for ins

ttut

ional

invest

ors in N

ovember w

hich pr

ovided a p

latf

orm fo

shareholders to receive

an update on, and ask questions

y issues.

Inve

Standard Chartered

– Annu

al Repo

rt 2021

Strategic report

Stakehold

ers and responsi

blites

How w

e c

reate value

e en

gage di

vers

e suppl

iers

, bot

h locall

y and glo

bally, to

provide efﬁc

ent and sustainable goods and ser

vices for

our business.

w w

e ser

e and engage

e follow

a comprehensive and transparent vendor

selection

pro

cess

, guide

d by our Su

pplier C

hart

, w

hich set

s ou

t our

exp

ectat

ions i

n relat

ion to et

hics

, human r

ight

s, di

vers

ty a

incluson (

D&I)

, and environmental performance. Our suppliers

mus

t recom

mit to th

e char

ter annu

ally

, a

nd per

form

ance

monitorng is

uil

t into our contracts, procurement prac

tices

and standard

In 2

021, we made ta

ngible progress aga

inst our supply

chain sustainablit

y agend

a and began to integrate

envir

onmen

tal and s

ocial r

isk

s into ou

r Third-Par

y Risk

management framework.

In pu

rsui

t of our am

biton t

o be net zer

o in our op

erati

ons

by 2025, we of

set emi

sson

s from o

ur bus

ines

s ﬂight

s, and i

2021 we develo

ped a m

etho

dolo

gy to es

timat

e our Sco

pe 3

emissons from suppli

ers. Using this, we

engaged our 2

highest

-emitt

ng vendors – who together represent three-

qua

rter

s of ou

r estim

ated 2020 emi

sson

s – to review t

heir

environmental goals a

emissons disclosure practices

a pat

hway for t

ransp

arent f

utu

re supp

ly chai

n emis

sons

measurement

e also began to embed emissons

-related

clauses into relev

ant supplier contracts, such as printng

ser

vices, to reduce

consumption and

mitgate

residual emissons.

r Stand

s have se

ved to f

urt

her emb

ed ou

r suppl

ier D&I

appr

oach

. Sevent

y pe

r cent of o

ur mar

kets now h

ave sup

plier

D&I obj

ectve

s to take act

ion, an

d accele

rate pr

ogres

s and

imp

act, an

d supp

lier dive

rst

y tar

get

s have b

een deﬁn

in key glob

al proc

ureme

nt cate

gori

es. Mo

re than 1

emp

loyees ha

ve bee

n traine

d inter

nall

y to buil

d capabil

to deliver

our supplier D&I

aims. In addi

ton, we

established

part

nerships w

ith multiple local and glob

al non-governmental

organisatons (

NGO

) to identf

and onboard more

sus

tainab

le and di

vers

e-own

ed vend

ors ac

ross al

l our

mar

kets

. Our e

ffor

ts w

ere reward

ed wit

h inter

nal and

exte

rnal re

cogni

ton, in

cludn

g the Su

pplie

r Diver

st

Progr

amme of t

he Y

ear in th

e Europe

an Dive

rst

y Awards

ring 2021, we a

lso pa

rtne

red wi

th severa

l suppli

ers t

provide add

itonal beneﬁts to our organisat

on and clients.

For exam

ple, we pa

rtne

red wi

th Doco

nomy

, an i

nnovatve

ﬁnte

ch supp

lier, to pilot a f

acilt

y in Paki

stan wh

ich help

ind

vidu

al client

s tra

ck, m

easu

re and ma

nage th

eir imp

act

on both carbon emiss

ons and freshw

ater consumption.

The tool pro

vides enriched customer da

ta and automatica

lly

calcu

lates t

he CO

footprint based

on the purchases

they

have ma

de, as ident

ﬁ

ed throug

h their cred

it transactions.

With f

ther gl

obal re

leas

e plann

ed for 202

2, th

e Stan

dard

Chartered–Doconomy collaboration

potential to

allow mi

llons of c

onsum

ers ove

r time to l

earn h

ow their

consumption behaviours impact the cli

mate.

In 2022

, supp

ly chai

n susta

inablit

y w

ill cont

inue to b

e a

pri

mar

y fo

cus as we ro

ll out int

iatve

s to addre

ss and c

ontro

cial ris

k, an

d fur

ther r

educe c

arbo

n emis

sons w

ithn our

own op

erat

ions an

d suppl

y chain

r Sup

plie

r Cha

rte

r can be v

iewe

d at

sc.com/

suppliercharter

Rea

d mor

e abo

ut ou

r supp

lie

r dive

rs

ty s

tan

dard:

sc.com/

supplierdversity

Thei

r interests

•

Sustain

ablity and diver

sty

•

Open, transparent and consistent tendering process

•

Will

ngness to adopt

supplier

-driven innova

tons

•

Accura

te and on-t

ime pa

yme

nts

Suppliers

Engaging stak

eholder

continu

e con

tinue t

o resp

ond to gr

owing int

eres

t from m

ainst

ream

invest

ors o

n ESG ma

tter

s incl

udng th

e UN’s SDG

s, sus

tainab

ﬁnan

ce, hum

an right

s and c

oal, and we r

an a dedi

cated

eng

agem

ent pro

gramme o

n our ne

t zero road

map. W

e als

work with sus

tainablit

y analysts and p

articpate in

sustainablit

y indces that be

nchmark our per

formance,

includng the CDP Clim

ate Change sur

vey and W

orkforce

Disclosu

re Initative.

In 2022

, we will co

ntinu

e to eng

age wit

h investo

rs on pr

ogres

agai

nst ou

r strat

egic pr

iort

ies and t

he ﬁnan

cal fram

ework

we ha

ve announ

ced as we p

rogre

ssive

ly adva

nce to ou

return

s target.

Thei

r interests

•

Safe, stron

g and sustainable ﬁnancal per

formance

•

Facilt

ation o

f sust

ainabl

e ﬁnance t

o meet t

he UN SD

•

Progr

ess on E

SG ma

tter

s, in

cludng a

dvanci

ng the n

zero

agenda

Inve

continued

Strategic

report

Standard Chartered

– Annu

al Rep

ort 202

How w

e c

reate value

e st

rive to o

perat

e as a sus

tainab

le and re

spon

sible

comp

any

, wor

king w

ith loc

al part

ner

s to prom

ote s

ocial

and economic dev

elopment

w w

e ser

e and engage

e en

gage w

ith a wid

e range o

f civl so

ciet

y and

inte

rnat

onal an

d local N

GOs

, from t

hose f

ocuse

d on

envir

onmen

tal and p

ublic p

olic

y issu

es to pa

rtne

rs de

liver

ng

our co

mmuni

y progra

mmes

. T

o s

hape ou

r strat

egy

, we aim

for constructiv

e dialogue that

helps ensure w

e understand

alte

rnat

ive per

spe

ctive

s and th

at our app

roach t

o doing

business is

under

stood. Th

is includes w

orking with NGOs

that

appr

oach us a

bout a s

pecif

c cl

ient

, trans

actio

n or poli

In 2021, cl

imate ch

ange, o

ur net zer

o roadm

ap, human r

ight

and bi

odver

sit

y con

tinue

d to und

erpin m

any of our

conver

sat

ions

. W

e also r

an a pilot s

vey on sus

tainab

lit

whi

ch targe

ted se

lecte

d supp

lier

s, thi

nk tank

s and NG

Os,

andin

tend t

o condu

ct a broad

er sur

vey d

uring 202

In addit

we continued to engage NGOs, charites

and

other organisatons

to promote youth economic i

clus

on

through Futu

remakers by Standard Char

tered, our global

inti

atve to t

ackle i

nequ

alt

y by promo

ting gr

eater e

cono

mic

incl

uson in o

ur mar

kets

e ho

sted a s

econd e

dito

n of the Fut

urem

akers Fo

rum

ingng Fut

urem

akers p

arti

cpant

s tog

ether w

ith mo

tha

n1,00

0 busin

ess le

ader

s, p

olic

y expe

s and clie

nts f

rom

63m

arket

s to buil

d par

tner

ships a

nd crea

te econ

omic

opportunites focused on y

oung people.

As t

he glob

al pan

demic e

scalat

ed acro

ss ou

r market

s in

2021, we con

tinu

ed to del

iver COVID-

19 e

conom

ic recover

proj

ect

s to supp

ort yo

ung pe

ople. In 2021

, our glo

bal int

iatve

Futuremak

ers by Standa

rd Chartered reached

304,

369 y

oung

people with livel

hoo

and learning opportunites.

Thei

r interests

•

Positve

cia

l and economic contributon

•

VID-

19 longer

-term economic recov

y support

•

Climate change an

d en

ironmental iss

ues

Society

Emplo

2021 Sustainablit

Aspirat

ons:

Employ

ees

People



Status

ogress

Embed an integrat

ed health and

wellbeing

strateg

to support buildng

and r

e-sk

illn

g a fu

ture

-rea

, d

iver

workforce

Jan 2020 –

c 2021

Laun

ched G

lob

al ‘B

uildn

g Resile

nce’ le

arni

ng pro

gramm

e in Febr

uar

y 2021

Drove p

art

icpat

ion in

, and awa

rene

ss of,the Unm

ind pl

atfor

m. C

ontin

ued

roll

-out o

f the be

neﬁt t

ransf

orm

atio

n progr

amme. La

unch

ed wellb

eing

exp

eri

ment

s in Aug

ust 2021.

Asp

irat

on ha

s be

en ext

end

ed to D

ece

mbe

r 2022 t

o alig

n wit

h the 3

-year we

llb

eing

str

ate

gy (2020–202

Support all emplo

yees to dev

elop a

rso

nali

sed g

rowt

h plan t

o reﬂe

ct the

future skills needed to respond

to the

cha

ngin

g and di

gtis

ed na

ture o

fwor

Jan 2020 –

c 2021

e en

ded t

he year a

t 63% com

plet

ion rat

e agai

nst a ta

rget of 8

Howeve

, ev

idenc

e shows t

hat t

he aver

age ho

urs i

nveste

d by empl

oyees

in pe

rso

nal deve

lopm

ent in

crea

sed by 20%

. Thi

s demo

nstr

ates t

hat th

arnin

g habit i

s cont

inung t

o grow de

spite t

he pla

tea

u in Grow

th Plan

completion ra

tes.

Increase gender representation:

35%wo

men in s

enio

r role

pt 2016 –

c 202

Prop

ort

ion of wo

men in s

enio

r lead

ers

hip rol

es has i

ncre

ase

d to 30.7

Thi

s is an inc

reas

e fro

m 25% in 2016

Inc

reas

e our ‘C

ultu

re of Inc

lusi

on’ scor

to 8

5% with an i

nter

m targ

et:

– De

cemb

er 2021: 80%

Jan 2020 –

c 20

e ac

hieved 8

0.65% in 2021 co

nsis

tent w

ith ou

r inte

rm tar

get and a

re on

tra

ck for o

ur overal

l 20

24 ta

rget

ncl

ude

d in th

e year

Achieved

Not achiev

Ongoing aspiraton

n tra

t on tr

ack

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

Stakehold

ers and responsi

blites

How w

e c

reate value

e re

cognis

e that o

ur work

force i

s a signﬁcan

t sourc

e of

value

that drives our

per

formanc

e and productiv

and that

the d

iver

st

y of our p

eopl

e, cultu

res and n

work

s set

s us

apar

t. T

o le

ad the wa

y in addre

ssin

g the evol

ving n

eeds o

f our

clie

nts an

d the ad

vances i

n techn

olog

, we are deve

lopin

g a

wor

kforc

e that is f

ure-re

ady an

d are co-cr

eatin

g with o

emp

loyees acu

lture t

hat is in

clus

ve and innovat

ve.

w w

e ser

e and engage

By engaging emplo

yees and fostering a positve experience

for t

hem, we ca

n bett

er ser

ve o

ur clien

ts an

d delive

r on our

Pur

pose a

nd Stan

ds. A

n inclu

sve cult

ure ena

bles us t

o unlo

innov

aton, make better decis

ons

deliver our

usiness

str

ateg

, live ou

r valued b

eha

viour

s and e

mbod

y our br

and

promise:

Here for good. W

e proactively

assess and manage

people-related risks, for example

, organisaton, capabi

lt

y and

culture, as

part of our Group risk management

rame

work

rPeople S

trate

, w

hich was ap

proved by th

e Boar

d in

Jul

y 2019

, conti

nues to s

tay re

levant and f

ure-fo

cuse

wit

h the on

going p

ande

mic hav

ing acc

elerat

ed many of

the f

ure ofwor

k tren

ds whi

ch infor

med o

ur appro

ach.

Thei

r interests

In 2018

, we cond

ucted r

esea

rch to und

ers

tand ou

r Employe

alue Pr

opos

iton (E

) – the va

lue tha

t employe

es, o

pot

enti

al employe

es, f

eel th

ey gain fr

om bein

g part o

f our

org

anisat

on. O

ur empl

oyees tol

d us they wa

nt to: have

inte

restn

g and imp

actf

ul job

s; innovat

e withn a u

nique s

et of

mar

kets an

d clien

ts; cul

tivat

e a brand t

hat sus

tainab

ly dri

ves

commerce and offers enrichng ca

reers and development;

and b

e supp

orte

d by great p

eopl

e lead

ers

. They wan

t thes

ele

ment

s to be an

chor

ed in comp

etit

ve rewards a

nd a

pos

itve wor

–

life ba

lance. T

he EV

P is a key input t

o our Peo

ple

Str

ateg

y which s

uppo

s the de

liver

y of o

ur bus

ines

s strat

egy

Listen

ng to em

plo

yees

Frequent feedback from employ

ee sur

veys helps

us identf

and cl

ose gap

s bet

wee

n colle

ague

s’ expe

ctatio

ns and t

heir

exp

erie

nce. In ad

diton to o

ur annu

al sur

vey

, i

n 20

1 we have

started deploying c

ontinuous listen

echanisms

hat

capt

ure coll

eagu

e sent

iment m

ore fr

eque

ntly, such as a

continuous listenng survey and surveys at moments-that

mat

ter su

ch as at onb

oardi

ng and at ex

it.

Thi

s year our a

nnual M

y V

oice sur

vey wa

s condu

cted in J

une

and J

uly

. 9

2 per cen

t of our em

ployees (

,798) took p

art

whi

ch is high

er than l

ast year. A fur

the

r 65 per ce

nt of eligb

age

ncy wo

rkers (

2,5

68) also p

art

icpate

Our ke

y measures of employee

atisfact

on ind

cate that

we ha

ve contin

ued to im

prove as a pl

ace to wor

k over the

duration of del



ng on our

People Strategy

. While

key

measures of emplo

yee satisfact

on fell in 2

021, includng

the

employee engagement i

dex

and the employee net promoter

sco

re (NPS) (

whi

ch mea

sures h

ow likely em

ployee

s are to

recommend working for

), o

verall emplo

yee satisfacton

rem

ained o

n par wit

h or high

er than i

t was in 2019

. Empl

oyee

engagement had sign

ﬁcantly improved in

202

0 as people

had r

allied t

o addres

s the c

hallen

ges cre

ated by t

pan

demic

, but th

e prolo

nged n

atur

e of the cr

iss h

as see

many of t

hese p

osit

ve emot

ions b

alance o

ut aga

in.

e rem

ain enc

ourag

ed tha

t 9

6 per c

ent of em

ployees f

eel

comm

itte

d to doin

g what i

s requir

ed to he

lp the B

ank

succ

eed, 89 p

er cent f

eel pr

oud ab

out wor

king fo

r the B

ank

and 8

3 per cen

t say t

hat the B

ank me

s or exceed

s thei

exp

ectat

ions

. E

xtern

ally

, o

ur Gl

assd

oor rat

ing (

out o

f ﬁve

)

has c

ontin

ued to in

crea

se fro

m 3.7 in 2019 t

o 3.

9 in 2021

, and

78 per ce

nt would r

ecomm

end wor

king a

t the Ba

nk to fr

iend

r revampe

d Glob

al Care

s websit

e has ha

d over 4 millon

unique views.

Invest

ment

s in pe

ople le

ader c

apabilt

y an

d the wa

y in which

our people leaders have responded to the

andemic

has also

tran

slat

ed into a 2 p

oint in

creas

e in our m

anage

r NPS sco

in th

e 20

1 My V

oice s

vey

, sus

tainng a t

rend o

f ongoi

improv

ement

. Build

ng leadership capabil

y continues to be

important as the demands on

our people leader

increase.

Emplo

continued

Engaging stak

eholder

continu

oup KPI

Employ

ee engagement

ployee ne

t prom

ote

r scor

e (

eNP

PS me

asur

es th

e num

ber o

f pro

mot

ers (who

wou

ld re

com

men

d the G

rou

p as a gre

at pl

ace

to

work) compared

ith

detractors on a scale

from

0 to +100. T

his i

s reﬂe

cte

d in th

e perc

ent

age

change cal

culation.

Aim:

ncr

eas

e eng

age

ment a

cro

ss th

e Gro

up by

cre

ati

ng a be

tte

r wor

kin

g envi

ronm

ent f

or ou

ploye

es th

at sh

oul

d tran

sla

te in

to an im

prove

client experience.

Analysis:

While o

ur eN

PS ha

s dec

rea

sed s

ince 2

020,

it st

s high

er th

an in 201

, and h

as si

gnﬁc

ant

crea

d sinc

e 2016 (2

4 in 2016) wh

en we st

art

our culture

transform

ation.

2021

2020

2019

.94

11.

Strategic

report

Standard Chartered

– Annu

al Rep

ort 202

sed on t

he pos

itve le

sson

s lear

nt fro

m the p

andem

arou

nd pro

ducti

vt

y and em

ployee ex

peri

ence, a

s well as

list

enng to o

ur emp

loyees’ pr

efere

nces on ﬂe

xiblit

, i

n 20

weha

ve implem

ente

d a hybri

d worki

ng mod

el, com

binng

vir

tual a

nd ofﬁ

ce-bas

ed wor

king w

ith gre

ater ﬂex

iblit

y in

wor

king p

atter

ns and l

ocati

ons. T

he mo

del is li

ve in 28 of our

mar

kets w

ith 73 p

er cent o

f employe

es in th

ese mar

kets o

agre

ed ﬂex

i-workin

g arran

geme

nts

. This i

s a signﬁcan

t step

toward

s bein

g more in

clusve o

f the di

vers

e need

s of our

wor

kforc

e and supp

ort

ing th

eir wellb

eing by con

sciou

sly

balancing indv

idual choice and ﬂexiblit

y with busin

ess and

clie

nt nee

ds. Wh

ile we cont

inue t

o roll out t

he mo

del in ot

her

mar

kets

, enfo

rced abs

ence f

rom of

ﬁces du

ring t

he pand

emic

has a

lso high

lghte

d the be

neﬁt of f

ace-to

-face int

eract

and we co

ntinu

e to value o

ur physi

cal work

spa

ces as hu

bs of

teamwork

, collaboration and le

arning. T

oolkit

s and guidance

have been pro

ided

to colleagues a

nd leaders to help

nav

igat

e hybri

d ways of wo

rkin

g, esp

eciall

y at key mome

nts

suc

h as onbo

ardin

g new tea

m membe

, retu

rning f

rom

par

ental le

ave and d

urin

g perf

orm

ance conver

sat

ions

, as

wella

s to help re

crea

te ‘water co

oler

’ mom

ent

s in hybr

work environments.

As e

mployee

s oper

ated in a var

iet

y of t

hese hyb

rid wor

kin

for

mat

s thro

ugh 2021 – eith

er as pa

rt of ou

r ﬂexi-wor

king

pro

gramme

s or due t

o ongoi

ng pand

emic re

stri

ctons –

suppor

ting their wellbeing

, health, safe

ty and resilen

cont

inue

d to be a key pr

iort

. In s

ome ma

rket

s that we

acut

ely im

pacte

d by the p

andemi

c duri

ng 2021, suc

h as India

the Ph

ilppine

s, Sr

i Lanka, Nig

era and Z

imbabwe, we p

rovide

addito

nal ﬁ

nanc

al assistanc

e to employ

ees, includng

access

to in

creas

ed cre

dit facilt

ies an

d extend

ed me

dical covera

ge,

in so

me case

s also fo

r exten

ded fam

iles

. T

ams par

tne

red

across our mark

s to orga

nise emergenc

edica

l suppor

for co

llea

gues an

d their ex

tend

ed famil

es, an

d at locat

ions

where permissble, in partnership with government in

tiatves

we orga

nised camps to

accelerate vacc

inaton.

Fur

ther, with ou

r aim to prov

ide emp

loyees t

he ski

lls, to

ols an

motivaton to

manage their wellbeing

proactively and to deal

wit

h challe

nges e

ffe

ctivel

, we cont

inue t

o drive a

warene

of ou

r wellbe

ing res

ources t

hat are a

vailabl

e to all glo

bally.

These include

a mental health

app, a

physical

wellbeing

online platform, an

aded employ

ee assistance

programme, wellbe

ing toolkit

s, learnin

g programmes on

men

tal he

alth and r

esilen

ce as well a

s an expa

nded n

work

of tr

ained M

ental H

ealth Fir

st Ai

ders

. In par

allel, we ar

eking t

o mitga

te the ca

uses o

f work-relate

d stre

ss and

encourage a f

ocus on supportive behaviours withn e

xistng

processes and

all decis

on-making. These

resources and

acti

ons are h

avin

g a posi

tve imp

act, w

ith fewe

r employe

rep

ort

ing fre

quen

t stre

ss in th

e annual M

y V

oice su

vey and

4 per ce

nt of emp

loyees s

ayin

g that th

ey are willn

g to sha

the

ir conce

rns ab

out st

ress w

ith th

eir pe

ople le

ader.

In addit

on to leveragi

ng input

s from

employ

ee sur

theB

oard al

so eng

ages w

ith and li

sten

s to the v

iews of

colleagues through virtual, interactve

gagement sessions.

Mor

e infor

mato

n can be fo

und on p

ages 113

114 in the

Directors’ R

ort.

Rea

d mor

e abo

ut ou

r appr

oac

h to hyb

rid w

ork

ing at

sc.com/h

ybridworkng

Dev

oping skills o

f futur

e stra

tegic value

The wo

rld of wo

rk con

tinue

s to chan

ge rapidl

. Ou

r employe

nee

d a combi

naton o

f human a

nd tec

hnical sk

ills to s

uccee

bot

h tod

ay and in t

he fu

ture. We’

re bui

ldng a cul

ture o

cont

inuo

us lear

ning

, empowe

ring em

ployees t

o grow

, f

ollow

the

ir aspir

aton

s and emb

race th

e skill

s need

ed for t

he fu

ture.

Sinc

e 20

20, th

e avera

ge hour

s invest

ed by empl

oyees in

per

son

al develo

pment h

as incr

eas

ed by 20 per cen

t to

7 hour

s in 2021. O

ver 7

4,00

0 colle

ague

s acti

vely use

d our

online learning

platform diSCov

er,

which we launched in

2020

, and w

hich is now a

cces

sible v

ia a mobil

e app as we

ll.

Alm

ost 30,00

0 colle

ague

s used o

ne or mo

re of our Fu

ture

Skills A

cademies whic

h include

the Data & Ana

lytics,

Digtal, C

ber

, Client Advi

sor

, Sustainable Finance and

Leadership Ac

ademy

e ha

ve focus

ed over 2021 on d

esignn

g and dep

loying

targete

d upskillng and re-skillng pilot progr

ammes directed

toward

s crit

cal ‘f

utu

re’ role

s wher

e our str

ategi

c work

force

planning

analysis has pred

icted the increas

ng need

for talent,

includng

uni

sal bank

, data translator

, cloud securit

engi

neer an

d cy

ber se

curit

y an

alys

t.Thi

s appro

ach has u

nite

our recruitment

alent

anagement a

nd learning effort

s to

target, upskill and

deploy employ

ees into new

roles.

Emplo

continued

akin

g care of our le

aders

hip healt

Thro

ugh an ex

per

iment l

aunch

ed in 2021, we ha

sup

port

ed over 4,

600 e

mployee

s in ﬂexin

g their

leadership muscles, by pro

vidng them with regular

simp

le and pr

actica

l ‘

isson

s’ on the

mes ce

ntred a

round

enabling pe

rformance, em

powering peopl

e, drivng vison

and continu

ng self

-growth. The 60-day leadership

tre

atme

nt jour

ney is dr

ivn

g a habit of m

icro-le

arnin

g and

dem

ocrat

isng le

ader

ship a

s a capabi

lty f

or ever

yone

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

Stakehold

ers and responsi

blites

Creating a cultur

e of

inclu

son and

innov

on

e be

lieve tha

t inclu

son is how we w

ill enab

le our di

vers

tale

nt to tr

uly d

eliver i

mpact

. As t

he pand

emic ext

ende

d into

2021, th

e nee

d to lea

d inclus

vely in a hy

brid wo

rkin

g set

-up

continued to be

a k

ey expectation

of our people leader

With t

he foc

us on bui

ldng a cul

ture of i

nclus

on, over 21

,000

colleagues had undertak

en the ‘When we’

re all i

cluded’

lea

rning p

rogram

me by the e

nd of 2021, ce

ntre

d on incre

asng

awareness

around diversty and i

ncluson princ

ples, tackling

sues su

ch as un

consci

ous bia

s and mic

ro beha

viou

rs as

well a

s empha

sisng t

he imp

orta

nce of cre

atin

g an inclu

sve

environment. As we listened to

emp

yee feedback and

res

pond

ed to th

e need t

o bet

ter devel

op psych

olog

ical saf

we also

rele

ased an

inclusve language gui

de and c

ont

inue

revi

ew busin

ess t

erms t

o be mor

e inclu

sve movin

g for

ward

. In

our a

nnual M

y V

oice sur

vey, 80.65 pe

r cent of em

ployees

reported positve sentiments around our c

ulture of incluson.

Read our

inclusve language

guide at

sc.com

/inclusvelanguageguide

r commit

ment to d

iver

st

y and incl

uson (D&I) i

s now

sup

port

ed by mor

e than 6

0employe

e resou

rce grou

ps (ERGs

)

acro

ss our m

arket

s tha

thelp prov

ide le

arnin

g, devel

opmen

and n

work

ing opp

ort

unite

s. Th

e ERGs alig

n to our fo

cus

are

as of gen

der

, eth

nict

y and na

tiona

lt

, gene

ratio

ns, s

exual

orient

aton, disablit

y andwellbeing.

r gende

r diver

st

y conti

nues t

o grow with m

ore wom

leaders moving up to

more senior r

les. By

the number

wome

n curre

ntly r

epres

ent 31 pe

r cent of t

he Bo

ard, 14 of o

mar

kets h

ave wome

n CEOs, an

d repre

sent

ation o

f women in

sen

ior lea

der

ship rol

es incr

ease

d to 30.7 p

er cent at t

he end

of 2021. We are commi

tted t

o contin

uous i

mproveme

nt in

thi

s area an

d aspire t

o 35 per ce

nt repr

esent

atio

n of women

at th

e senio

r level by 2025. T

his aspi

raton i

s fur

the

r suppo

rte

by prog

ramme

s such as o

ur IG

NITE Co

aching p

rogram

me,

whi

ch develop

s our ex

istng f

emale t

alent i

n prepa

ration f

future roles.

e rem

ain foc

used o

n buildn

g a work

force t

hat is tr

uly

representative of our cli

ent base and footprint, with 16.4 per

cent o

f our G

lobal M

anage

ment T

eam an

d thei

r direct re

por

ide

ntf

yin

g as Bla

ck, A

sian or m

inor

ty e

thnic

. In the U

K, B

lack

repr

esen

tatio

n in senio

r lead

ers

hip is 2.4 p

er cen

t and Bla

ck,

ian and mi

nort

y et

hnic in s

enior le

ader

ship i

s 15.

2 per cen

Inth

e US, Bl

ack/

rican A

meric

an repre

sent

ation in s

enior

lea

der

ship is 2

.7 per c

ent and Hi

spanc/Lat

inx in s

enior

lea

der

ship is 9

.7 p

er cent

. W

e ha

ve develop

ed str

ategi

par

tne

rship

s in the US a

nd exte

nded o

ur Futu

remaker

s RISE

pro

gramme t

o incre

ase th

e diver

st

y of our t

alent p

ipeln

es.

As we wo

rk toward

s achiev

ng our 2025 U

K and US et

hnict

senior leadership aspirat

hic

h were

deﬁned last year

, we

cont

inue fo

cus on n

urt

uring l

ocal tal

ent in ma

rket

s acros

s Asi

rica an

d the Mid

dle East t

o ensur

e we reﬂect t

he dive

rst

of ou

r globa

l client

s. In 2021

, we provid

ed emp

loyees

, wher

legally permissble, the

abilt

to self

-identfy ethnicty data

thr

ough ou

r online s

yst

ems and s

tart

ed edu

catin

g on the

value a

nd pur

pose o

f colle

cting t

his info

rmat

on. W

e e

xpec

increase

d particpation and self

-declaration of ethnict

y to

allow u

s addito

nal ins

ght

s towards b

uildng an eve

n more

representative workforce.

e re

cognis

e six key

D&I dat

es acro

ss th

e year and u

the

se as fo

cal poi

nts t

o facilta

te ope

n dialog

ue on in

cluson

intern

ally and externally

. Through the

se global campaigns we

have engaged and strength

ened relationshps with client

and ex

ternal stakehold

ers, collectiv

ely rais

ng awareness,

prom

otin

g best p

ractic

es and com

mittn

g to take pra

ctical

ste

ps to ad

vance th

e D&I agen

da in the c

ommun

r progre

ss con

tinue

s to be re

cogni

sed ext

ernal

ly – we are

the ﬁ

rst ﬁn

ancal se

vices o

rgani

saton t

o achieve th

e seco

high

est level o

f EDGE S

trate

gy Ce

rtif

cat

ion in M

alays

ia and

i Lanka; we’

ve ra

nked as a Di

verst

y Le

ader fo

r the se

cond

con

secut

ive year i

n the Finan

cal T

mes rep

ort o

n Diver

st

y and

Incl

usion i

n Europe; ran

ked for th

e ﬁrst t

ime wi

thn the T

op 1

organisatons R

eﬁntiv (

formerl

Thomson Reuters

) Div

erst

and In

clusi

on Inde

x; ranke

d as one of t

he W

’

s Be

Empl

oyers in Fo

rbe

s for th

e ﬁrst t

ime; and al

so reco

gnise

d at

the Eu

rope

an Diver

st

y Awards for o

ur Sup

plier Di

vers

Progr

amme. In a

ddito

n to the G

roup b

eing re

cogni

sed, si

x of

our colleagues feature on

the HERoes W

omen R

ole Models

Lis

t, thr

ee on th

e Empowe

r Ethnic M

inort

y Rol

e Mode

ls Lis

and t

wo on t

he OUT

anding LGBT

+ Role Mo

dels Li

As t

he Ban

k contin

ues to t

ransf

orm to a

chieve our s

trate

gic

ambi

tons

, we are ref

resh

ing the wa

y we mana

ge and

reco

gnis

e perf

orma

nce. Mov

ing for

war

d, we aim to b

uild

an even st

ronge

r cultu

re of high p

erf

orma

nce by focu

sing

on con

tinuo

us fe

edba

ck, co

aching

, and op

en t

wo-way

performance and dev

elopment conversations. W

e will

place

greater emphasis on recognis

ng outp

erformance driven b

collaboration a

nd innovaton,

encourage more ﬂexibl

and aspiraton dur

ing goal-sett

ing, and remove indvidual

per

for

mance ra

ting

s. Dur

ing 2021, we p

ilote

d aspe

cts o

f this

refreshed approach with a

sele

ﬁr

adopt

opulation

employees, and wil

l be further embedding the approach

across the organisat

on in

2022.

International Day

Against Homophobia,

ransphobia and Biphoba,

Inter

national

of Persons with

isab

lites, International Men’

s Day,

Internat

ional

en’s Day, and Wor

ld Da

y for C

ult

ural D

iver

st

y fo

r Dia

log

ue and D

evel

opm

ent

, W

rld M

ent

al He

alth D

ay.

Emplo

continued

Engaging stak

eholder

continu

Crea

ting an internal ‘

gig’ economy

Our vir

tual talent mar

tplace uses ar

tifcial intellgen

(AI) to mat

ch the sk

ills

, exper

ienc

es and as

pirato

ns of

emp

loyees ac

ross 50 m

arket

s to sh

ort

-ter

m proje

cts a

mentoring opportunites, enabling their

upsk

lng and

res

killng t

owards be

comin

g fut

ure-re

ady. The pla

tfor

als

o allows us t

o rapidl

y deploy t

alent t

o areas w

here it i

mos

t nee

ded to de

liver b

usine

ss pr

iorti

es, un

lock

ing

pro

ducti

vt

y wort

h over $1.

3 mil

lon so far. By the e

nd of

2021, mo

re than 1

0,000 em

ployees h

ad acce

sse

d over

0 cross-f

unct

ional e

xper

ience

s via th

e platf

orm

, and

intiated

over

0 mentoring

relationshps.

Strategic

report

Standard Chartered

– Ann

ual Rep

t 2021

Gen

der pay gap an

d equal pay

e con

tinue t

o analy

se our g

ende

r pay ga

p for the U

Hon

gK

ong

, Singa

pore, UAE and U

S. The g

ende

r pay gap

comp

ares t

he avera

ge pa

y of men an

d women w

ithou

acco

untin

g for so

me of th

e ke

y fact

ors w

hich inﬂu

ence p

incl

udng dif

fer

ent rol

es, sk

ills

, senio

rt

y and mar

ket pa

y rates

Com

pare

d with la

st year, our me

an hour

ly pa

y gaps h

ave

rem

ained ﬂ

at or red

uced ac

ross t

he UK

, Sing

apore an

d US.

r mean b

onus p

ay gaps h

ave incr

ease

d sligh

tly excep

t for

in Sin

gapor

e. Our ge

nder p

ay gap

s are caus

ed by the

re bein

fewer wo

men in se

nior ro

les and in b

usin

ess are

as wh

ere

mar

ket rate

s of pay ar

e the hig

hest

. W

e und

ers

tand it w

ill

take ti

me to se

e the leve

l of chang

e nee

ded to s

ignﬁcant

red

uce our g

ende

r pay ga

ps and we re

main com

mitte

d to

our intiatv

es to suppor

ender d

iverst

Whe

n the pa

y of men a

nd women a

t the sa

me level an

d in

the s

ame bu

sines

s area ar

e compa

red, o

ur gend

er pay g

aps

remain signﬁcantly smalle

. The remainng gaps exis

t due

to dif

fere

nces in t

he mar

ket pay l

evel for dif

fer

ent t

ype

s of

rol

es at the s

ame level a

nd in the s

ame bu

sines

s area

s, and

dif

feren

ces in th

e relat

ive po

sitoni

ng of th

e pay of e

ach rol

hol

der aro

und th

e market b

enchm

ark

Equal p

ay is a m

ore det

ailed m

easu

re of pa

y equa

lit

y and is

a key commi

tment i

n our Fair Pa

y Char

ter

. We analys

e equ

y durin

g our ann

ual pe

rfor

mance a

nd pay r

eview pro

cess

to en

sure e

qual pa

y for eq

ual wor

e ha

ve been r

epor

ting o

ur gen

der pa

y gaps fo

r several

year

s and su

ppor

t intia

tves th

at will e

nable a t

rul

y diver

workforce. W

e responded to the UK Government c

sultation

on et

hnict

y pa

y gap rep

ort

ing and ar

e consi

dern

g pote

ntial

ways to d

raw from avai

lable data to inform our

incluson

strategy

. Obtainng sign

ﬁcant enough disclosure of ethnic

t

dat

a remain

s a chall

enge an

d we are tak

ing ste

ps to

encourage disclosure

, where possible, so

we can dev

elop

our approach

Rea

d mor

e abo

ut th

is in ou

r gen

der p

ay ga

p rep

ort a

sc.com/

genderpay

gap

Emplo

continued

Female representation

Fema

(2020: 31%)

Board

Fema

(2020: 29

5%)

Senior leadership

(Managing direct

ors and band 4

)

Fema

45.

(2020: 45.

All emplo

yees

Fema

28.4

(2020: 31

.8%)

Management T

and t

hei

r dire

ct re

port

Femal



Male



Femal

,

9

Male



,

Femal

Male

Undisclosed

Femal

Male

,04

Undisclosed

631

202

1 Gen

der p

ay ga

Hong K

ong

Singapore

an hou

rly p

ay gap

27%

33%

31%

Mean

bonus

pay gap

52%

42%

58%

tne

onom

cut

carbon

’v

e p

artnered with Doconom

, a Sw

eden-

based impact tech compan

, to pilot a tool

that helps our clien

ts m

anage thei

r ever

yday

climate i

mpact. Our clients in Pakistan ca

n now

calcul

ate the carbon emissons of an

y goods

and ser

vices purchased on their credi

t cards

and track their c

arb

on footprint using our

online b

anking s

vice.

Rea

d mor

e onli

ne at

.sc

.com

doconomy

Strategic report

Stakehold

ers and responsi

blites

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic

report

Standard Chartered

– An

nual Re

por

t 2021

ainab

and

resp

onsi

ble bu

Our core markets represent unique c

hallenges

and opportunites, with rapid urbanisat

heightened vulnerabi

lt

y from climate c

nge,

and sign

ﬁcant soci

al and economic disrupton

brought b

y t

he C

VID-

19 pandemic. Y

et these

regions only receiv

e a fraction of the capi

tal ﬂo

they need for sustainable ec

onomic growth.

At Sta

ndard Chartered, w

e have the ﬁ

nancal e

ertise,

governance f

rameworks

, technolog

y and geographical

reach to unlock ca

pital for sustainable development, where

it matte

s mos

e ha

ve set ou

rse

lves th

e viso

n to beco

me the wo

rld

’

s m

ost

sustainable and

respon

sible

bank

, c

ommitted to sustaina

ble

cial and e

conomi

c develop

ment t

hrough o

business,

oper

ations and communi

tes.

Business

Communites

Operations

In pu

rsui

t of this

, and in ali

gnmen

t with st

akehol

der pr

iort

ies,

in 2021 we for

mall

y elevate

d susta

inablit

y t

o be a pilla

r of

ours

trate

e ha

ve set lo

ng-ter

m ambito

ns for o

ur role i

n tack

ling the

sever

e impact

s of cl

imate ch

ange, s

tark in

equa

lt

y and

unf

airasp

ect

s of glob

alisat

on tha

t impac

t ever

yone an

d the

plan

et. S

ee pa

ges 24-

5 for mo

re deta

il on how we are t

aking

a stand.

This enhanced focus ensures sustainab

lit

y is embedded

acro

ss our b

usin

ess an

d integ

rated in

to the G

roup’

s dec

ison-

mak

ing, w

ith rob

ust gover

nance p

rovide

d by the B

oard,

Management T

eam and multiple supporting sub-com

mittees.

The f

ollowi

ng pag

es set o

ut our ap

proac

h and pro

gress

toward

s our mo

st mate

rial s

ustain

able an

d respo

nsib

business topics. Further informaton

on our approach to

clim

ate chan

ge can al

so be re

ad in our TCFD rep

ort a

m/tc

In 2022

, we also i

ntend t

o provid

e addit

onal E

SG-re

late

info

rmat

on via o

ur ES

G repor

t. T

his will i

nclud

e alignm

ent

ind

ex table

s for dis

closu

res rel

evant to th

e GRI, S

ASB and

orld Economi

c Forum frameworks

and will

e av

ailable

sc.com

/ESGreport

in Q1 2022

page

s 51 to 5

rea

how engagement with

stakeholders informs our

approach to

stainable

and responsible

usiness

For more informaton on our sustainablit

y governance

pages

277

com/t

page

s 455 a

nd 4

r a fu

ll lis

t of ou

2022 Sustainablit

y Aspiratons

For more

informaton on our

Responsible

Business Standa

rds and P

olices

see

sc.com/

standard

sandpolices

Our Su

stainablit

y Aspirato

r approa

ch is und

erpi

nned by ou

r suite o

f Sust

ainabli

pirato

ns tha

t set ou

t how we aim to p

romot

e socia

l and

economic dev

elopment

, a

deliver sustainable outcomes

inth

e areas i

n which we ca

n make the m

ost mat

erial

cont

ribu

ton to t

he deli

ver

y of th

e UN SDG

e rev

iew and re

fres

h our Su

staina

blit

y Asp

irato

ns annu

ally

to en

sure th

ey reﬂec

t our sta

keholde

rs’ pr

iort

ies an

d evolvin

str

ateg

. For examp

le, in 2021, we co

mmitt

ed to con

sult w

ith

sha

rehol

der

s, invest

ors

, client

s and c

ivl so

ciet

y to deve

lop a

deﬁntion,

met

hodology

, targets and timel

ne to devel

op our

approach to me

asuring

, managing and reducing emi

ssons

socia

ted wit

h our ﬁn

ancng of c

lient

s to sup

por

t our

obje

ctve to a

chieve ne

t zero by 2050.

e me

asur

e progre

ss aga

inst th

e targe

ts s

et out in o

Sustain

ablity As

piratons and incorp

orate selecte

Aspiratons into

Group Scorecard to

dri

e widespread

awar

enes

s and sup

port d

elive

At the e

nd of 2021, 82

9 per c

ent of ou

r Aspi

raton

s are on tr

ack

or ac

hieved. T

his is an in

creas

e fro

m 7

.4 per c

ent in 2020;

however, CO

VID

19 cont

inue

d to impa

ct the d

eliver

y o

f several

Aspiratons. Further detail

on each Aspiraton can

be found

bet

en pag

es 55 and 7

. W

e r

emain f

ocuse

d on scal

ing up

deli

ver

y in su

bseq

uent yea

rs to a

chieve our t

arget

o ensure stakeholder conﬁdence

in our approach, we

havec

onduc

ted a limt

ed-sco

pe as

suran

ce exercis

e over

performance data related to

selected Aspiratons, see

sc.com/

spiratonsas

surance

. Theﬁn

dngs of t

his exerci

will c

ontr

ibute t

owards ou

r conti

nued wo

rk to st

rengt

hen

how we tr

ack and re

por

t progr

ess on o

ur As

pirato

ns,

incl

udng a

s part o

f our com

mitme

nt to th

e UN Princp

les

for R

esponsible Banking.

oup KPI

Sustain

ablity

Deliverng Sustainablit

y Aspiratons %

+ 4.5 ppt Su

stainablit

y Aspiratons

achi

eved or on t

rack

2021

2020

2019

78.

3.1

Eac

h aspiraton contai

one or more

performance measures. The KP

I is the proportion

of al

l mea

sur

es th

at ha

ve be

en ach

ieve

d or are

on t

rack t

o be de

live

red a

t the e

nd of t

reporting

period.

Standard Chartered

– Annu

al Repo

rt 202

Strategic report

Stakehold

ers and responsi

blites

Sus

tainable an

d resp

onsib

le busin

ess

contin

ued

Do mor

e good – prom

oting s

ustaina

ble ﬁnance

Client

Inve

Socie

r main imp

act on th

e enviro

nment a

nd soci

y is thro

ugh

the business a

ctivties

we ﬁnance

. Through our

core bus

iness,

we promote sust

ainable ﬁnance in our market

s, expanding

renew

ables, and

ﬁnancng

and inv

estng in susta

inable

inf

rast

ruct

ure wh

ere it is n

eede

d most

e want t

o make the wo

rld a be

tter, clean

er and s

afer pl

ace

and mi

nmise t

he neg

ative im

pact o

f our ﬁnan

cng, b

alance

by our m

isson o

f enabl

ing a just t

rans

iton. I

n othe

r words

do mo

re goo

d and les

s har

Pillar 1: Bus

iness

2021 Sustainablit

Aspirat

ons: Busines

Infrastr

ucture



Status

Progre

Fac

iltat

e proj

ect ﬁn

ancn

g ser

ices fo

r $4

0 bill

on of

infrastruct

ure

project

s that

promot

sust

ainable

development

at alig

n to our ve

rif

e

d Gre

en and S

ust

aina

ble Pro

duct

Fra

mewo

Jan 2020

–

c 20

Facil

tated $9

billon,

bringng

the total

fac

iltat

ed sin

ce Janu

y 2020 to $12 bil

lon.

Climate cha

nge

Fac

iltat

e $35 b

illon w

ort

h of pro

ject ﬁn

ancn

g ser

ices

, M&

advisor

, debt structuring, transaction

banking and le

nding

vice

s for re

newab

le ene

rgy t

hat al

ign to o

ur ver

if

ed Gr

een

and Sustainabl

e P

duct F

ramework

Jan 2020

–

c 202

Facil

tated $22 bill

on, bringng

total

fac

iltat

ed sin

ce Janu

y 2020 to $4

0.4

bill

on. W

e h

ave th

eref

ore ach

ieved th

pirat

on ahe

ad of t

he end 202

3 targ

et.

ly prov

ide ﬁn

anca

l ser

ices t

o clien

ts w

ho are:

•

by 20

, are le

ss th

an 80% d

epe

nden

t on th

erm

al coal

(ba

sed o

n % EBIT

A a

t grou

p level)

•

by 20

5, ar

e les

s than 6

0% de

pend

ent o

n ther

mal co

(ba

sed o

n % EBIT

A a

t grou

p level)

•

by 20

, a

re les

s tha

n 40% d

epen

dent o

n the

rma

l coal

(ba

sed o

n % EBIT

A a

t grou

p level)

•

by 2030, are le

ss th

an 5% dep

end

ent on t

her

mal co

(ba

sed o

n % EBIT

A a

t grou

p level)

Jan 2020

–

Jan 203

In 2020, we cea

sed ne

w busin

ess w

ith

fou

r clien

ts an

d have n

ow exit

ed th

ese

relationsh

ps subject to

any outstanding

con

tract

ual ar

rang

emen

. In light o

f the

rec

ent st

rengt

heni

ng of ou

r coal p

olic

we are n

ow on tra

ck to tr

ansit

on or ex

it all

clie

s at an ent

y level t

hat are g

reate

an 80% de

pend

ent on t

her

mal coa

subject

to any outstanding

contractual

arrangem

ents.

*In 2021

, we chan

ged f

rom EBI

A t

reven

ue ba

sis. S

ee pa

ge 455.

Commit to measuring, manag

ing and

duci

ng emissons

soci

ate

d with o

ur ﬁn

ancng o

f clie

s to sup

por

t our

obj

ect

ve to ac

hieve ne

t zero by 205

0. W

e wi

ll devel

op an

con

sult w

ith s

hare

hold

s, inve

stor

s, c

lient

s an

d civ

l soci

on a de

ﬁnti

on, m

etho

dol

ogy, targ

s and ti

meln

Jan 2020

–

c 2021

In Oc

tobe

r 20

, we anno

unce

d ambit

ous

new t

arget

s to re

ach n

et zero car

bon

emi

sson

s fro

m our ﬁn

anced a

ctiv

t

y by

2050

. W

e have

urther inco

rporated these

new t

arget

s int

o our 202

2 Asp

irato

ns.

e page 45

Entrepreneur

Prov

ide $1

5 bill

on of ﬁn

ancng t

o sma

ll bus

ines

s clie

(Busines

s Banking)

Jan 2020

–

c 20

Provi

ded $2

96 bill

on, br

ingn

g the

tot

al prov

ided s

ince Ja

nuar

y 2020 to

$5.

6 bi

llon.

Prov

ide $

3 billo

n of ﬁna

ncng t

o micro

nanc

e inst

tut

ion

Jan 2020

–

c 20

Provi

ded $

.5 m

illon

, brin

gng th

tot

al faci

ltiat

ed sin

ce Janu

y 2020 to

$1.13 billon

ncl

ude

d in th

e year

Achieved

Not achiev

Ongoing aspiraton

n tra

t on tr

ack

Strategic

report

Standard Chartered

– A

nnu

al Rep

ort 202

2021 Sustainablit

Aspirat

ons: Busines

ontinued

Retail Banking



Status

Progre

Lau

nch a su

ite of ﬁ

ve core s

usta

inab

lit

focuse

d R

ail Banking product

s in

elected

mar

ket

s acro

ss ou

rfoo

tpr

int

n 2021

–

c 202

Fiv

e products were suc

cessf

ully

launched during 20

21, achiev

thi

s Asp

irato

n a year ah

ead of s

che

dule. T

hese w

ere:

) Sustainable T

erm Deposits in

Singapore,

Indonesia and T

aiwan,

and s

usta

inabl

e Curr

ent Acco

unt Sa

vin

gs Accou

s in Hong Kon

i) Carb

on-ne

utr

al cards i

n Singa

pore

, Bang

lade

sh, Ma

lays

ia and

Hong K

ong

ii) Gr

een ho

me loa

ns in Ho

ng Kong

, Singa

pore an

d T

aiwan

) G

ree

n hom

e renovat

ion ﬁn

ancng – e

xtend

ed pre

fere

ntial

icng to h

elp cli

ent

s acqui

re sol

ar ener

gy and wa

ter tr

eatm

ent

uipme

nt in Kenya

) E

SG unit t

sts a

vailab

le in 16 ma

rket

Commerce

Bank 10,

00 of

our clients’ internatonal

and domestic networks of suppliers and

yer

s thro

ugh b

anki

ng thee

cos

yst

programme

Jan 2020

–

c 20

Enro

lled 3

,473 sup

plier

s and b

uyer

s, b

ring

ng the t

otal e

nroll

sin

ce Jan 2020 to 7

,153

Digtal

Roll o

ut dig

tal-o

nly b

ank

s in a tot

al of

12 m

arke

Jan 2020

–

c 2021

e h

ave lau

nche

d digta

l-onl

y bank

s in 10 m

arket

s sin

ce Janu

2020. Furt

her la

unche

s in Bah

rain an

d the Uni

ted A

rab Emir

ates

ve been d

ela

yed and ar

e exp

ecte

d to lau

nch in 202

uble t

he nu

mber o

f clie

nts w

e bank i

rica a

nd th

e Midd

le East t

o 3.

2 millo

7–

c 2021

At th

e end of 2021 we h

ad a tot

al of 2,

66,0

00 di

gtal cli

ent

s in

e AME reg

ion. COVID

19 ha

s impa

cted o

ur abilt

y to o

nbo

ard

new cl

ient

s dur

ing p

erio

ds of lo

ckdown

. W

e wi

ll cont

inue to

enhance our capabilties throu

gh 2

Impact ﬁnance

Develop

a tailored Impact P

roﬁle for all

Pri

vate B

ank cl

ient

s prov

idn

g a fram

ewor

that enabl

es them

tounderstand thei

pass

ions and harness capital market

solutions to support the

SDGs

Jan 2020

–

c 20

The g

oal of t

he Imp

act Pro

ﬁle too

l was to in

clud

e ESG e

leme

as a p

art of u

nder

sta

nding a c

lient

’s ﬁnan

cal proﬁ

le and to

ena

ble conve

rsa

tion

s wit

h clien

ts ba

sed o

n pref

eren

ces. A

s par

of ou

r Octo

ber 2021 n

et zero ap

proa

ch, we pl

an to int

egrat

e ESG

consideratons

in our wealth

anagement

adv

isory which are

inco

rpo

rate

d into o

ur upd

ated 202

2 As

pirat

ons an

d will r

eplac

thi

s Asp

irato

n (

e page 455

)

riple the value of sustainable investng

Asset

s Under

Management

n 2021

–

c 20

Our Sustaina

ble In

vesting Assets Under Management

UM) has

grow

n by 2.79 t

imes

. For 202

2, we wi

ll repl

ace thi

s Asp

irato

n with

a mor

e ambit

ous S

ustai

nabl

e Investi

ng AUM Asp

irato

n (

ge 456

) a

s par

t of our n

et zero A

spir

aton

s whic

h will ex

pand

pro

duct

s covere

d to in

clude e

xchang

e trad

ed f

unds (E

TFs

nds

, equit

es

, str

uctu

red pro

duct

s am

ong ot

her

s. Th

is is mo

hol

istc t

han th

e curr

ent A

spira

ton cove

ring o

nly mu

tual f

ds.

Roll o

ut ES

G scor

es fo

r singl

e hol

ding

investment

s and funds where applicable

ESG scores are available f

rom third-part

data providers

n 2021

–

c 2021

Sus

tain

alyt

cs E

SG ris

k rati

ngs ava

ilabl

e on equ

y der

ivat

ves and

ﬁxed i

ncom

e trad

e note

s since Au

gust 2021 f

or bo

th Pri

vate Ba

and Consumer (

ﬂuent

)

is sta

rt da

te ha

s be

en res

tat

ed to r

eﬂec

t the p

eri

od ove

r whi

ch ba

seli

ne da

ta ha

s bee

n gat

her

is ha

s bee

n amen

d fro

m ‘

erc

enta

ge’ a

s prev

iou

sly d

isc

los

ed, t

o ‘valu

e’

ncl

ude

d in th

e year

Achieved

Not achiev

Ongoing aspiraton

n tra

t on tr

ack

Pillar 1: Bus

iness

continued

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic report

Stakehold

ers and responsi

blites

Sus

tainable an

d resp

onsib

le busin

ess

contin

ued

e cre

ate and o

ffe

r sust

ainabl

e ﬁnance p

roduc

ts th

support sustainable de

velopment. In 2

021, we

laun

ched 1

3 new

sustainab

le ﬁnance product

s, includng sustain

able current

and s

avin

gs acco

unt

s for bo

th our CCIB c

lient

s and re

tail

cust

omer

s, an

d green m

ort

gage

s in some o

f our key mar

kets

Singapore

, Hong K

ong and

Thailand.

r Gree

n and Sus

taina

ble Prod

uct Framewo

rk guid

es our

lab

elling o

f susta

inable a

sse

ts in

tern

ally

. T

he Framewor

k was

devel

oped

, and is rev

iewed ann

ually, in collab

orati

on with t

lea

ding prov

ider o

f ESG an

d corp

orate g

overnan

ce rese

arch,

Sustain

alytcs

In 2021, t

his revi

ew led to t

he Framewor

k bein

g upda

ted to

include addit

onal green buildngs

cer

tifcations as w

ell as

tigh

tenng e

ligbilt

y cr

iter

a wher

e market ex

pect

ation

ve evolve

Alo

ngsid

e our ne

t zero appr

oach in O

ctobe

r 20

1, we

als

o launc

hed ou

r new T

ransit

on Financ

e Framewor

Thi

s outli

nes th

e activ

ties t

hat we con

sider e

ligble f

labelling as

‘transiton’

and is intended to support our

clie

nts in t

heir jo

urney t

o a lower

carb

on fu

ture.

ogether

, these F

rameworks deﬁ

ne the activti

es that count

toward

s our tar

get to m

obilse $

300 b

illon in gre

en and

tran

sito

n ﬁnance by 2030, th

e key driver o

f our abi

lty t

et our ne

t zero targ

Bet

ween

July 20

20 and Ju

ne 2021,

our Sustainable

Finance

set ba

se incr

ease

d by 138 pe

r cent year-on-year t

.2 bi

llon. Th

is incre

ase wa

s drive

n by organic g

rowth

coupled with the ident

ﬁcaton of

existng exposures that

had n

ot prev

iousl

y bee

n tagge

d as gre

en or su

staina

ble.

With m

ore th

an 84 p

er cent o

f thes

e asse

ts lo

cate

d in Asi

rica an

d the Mid

dle East

, our d

edicat

ed Sus

tainab

Financ

e team is f

ocus

ed on acc

elerat

ing th

e deploy

ment o

sus

tainab

le ﬁnan

ce to the m

arket

s whe

re it mat

ters t

he mo

st.

r secon

d Sust

ainabl

e Finance Im

pact Rep

ort fo

und th

at our

gre

en lend

ing avoid

ed 1.4 m

illon to

nnes of CO

emissons from

Jul

y 20

20 to Jun

e 2021, a 26

4 per cen

t incre

ase in CO

avoi

ded

year-on-year, and equi

valent t

o more t

han 3 millo

n econo

class aeroplane seats from London

to Singapore. Our green

asset

s i

n Organisaton for E

conomic Cooperation and

Development Dev

elopment A

ssistance Committee (

OECD-

C) le

ast deve

lope

d, lower

- a

nd lower-middle in

come

mar

kets h

ave achi

eved signﬁca

ntly m

ore imp

act in ter

ms of

emi

sson

s avoide

d per do

llar invest

ed th

an our gre

set ba

se in th

e rest of t

he worl

d. Thi

s reinfo

rces th

e ﬁndngs

of ou

r Oppo

rtu

nit

2030 Repor

t and em

phasi

ses th

e nee

d to

keep ﬁn

ance ﬂow

ing to th

e market

s in ou

r foot

prin

t where i

mat

ter

s most an

d can have t

he gre

atest im

pact

e als

o made p

rogre

ss toward

s our A

spirat

ons fo

r small

bus

ines

s lendi

ng (

15 billo

n, Janu

y 202

0 t

o Dece

mber 2024

)

and mi

crof

nan

ce (

3 billon

, Janua

y 20

20 t

o Decem

ber

)

, enabling more th

an 885,000 microf

nance loan

and pr

ovidng n

earl

y 20,

0 loan

s to small a

nd med

ium

ent

erpr

ises

, of

ten the p

owerh

ouse

s of the e

conomy in m

any

of ou

r market

In 2020, we announ

ced th

at we woul

d commit $

1 billon

ofno

-for

-pro

ﬁt ﬁnancn

g for com

panies t

hat prov

ide go

ods

and s

vice

s to help i

n the ﬁght a

gains

t CO

VID

. By the

endo

f 20

1, we had a

pproved $9

30 millon o

f this

, and

disp

sed $782 millo

n. Thi

s has he

lped b

usine

sse

s acros

s our

markets manufacture and

distrbute emergency ventilators,

face m

ask

s, pro

tect

ive equ

ipment a

nd sani

tser

s, an

gover

nment

s to ﬁn

ance th

e purch

ase of World He

alth

Organis

aton approved C

OVID-

19 vaccines.

In 2022

, we exp

ect grow

th of ou

r Susta

inable Fin

ance as

set

se to con

tinue a

t pace, b

oth as t

he mar

ket develop

s and

als

o as we fu

rth

er expa

nd and em

bed o

ur sust

ainabl

e ﬁnance

pro

duct of

fer

ing wit

h our cli

ent

e wi

ll contin

ue to grow o

ur sust

ainab

le ﬁnanc

e propo

siton

and increas

e lending into areas aligne

d with the SDGs

Read our Sustainable Finance Impact

Rep

ort

sc.com

/SFimpactreport

Read our Sustainable Finance Frameworks:

sc.com/

sustainab

lefnanceframework

Read our

Oppor

tunity

2030 R

epor

sc.com/

opportunity2030

See our 2021 Sustainablity Aspirat

ons

ge 62

Do les

s harm – mana

ging environmen

tal

andsoc

ial risk

e have a

comprehen

sive

approach to managing

envir

onmen

tal and s

ocial (E&S) r

isk

. W

e work w

ith

clients, regulators and peers across the ﬁnance sector

cont

inuo

usly im

prove E&S stan

dards a

nd mitg

ate th

imp

act tha

t may st

em fro

m our ﬁnan

cng dec

isons

e ha

ve a suite o

f detail

ed po

licy f

ramewo

rks a

nd Posito

Sta

temen

, approve

d by the Gr

oup Resp

onsi

blit

y and

Reput

atio

nal Risk C

ommit

tee (

RRRC), which dr

aw on

global best

practice,

includng the

International F

inance

Corporation (IFC)

Performance Standards and the

Equator

Prin

cples (EP)

, to ou

tline t

he cros

s-sect

or stan

dards we

expect of ourselves and

our clients. Sector

-specif

c

guidance

is al

so provi

ded for c

lient

s ope

ratin

g in sect

ors w

ith high

environmental or

ocial

impact potential, and our prohib

acti

vti

es list s

ets o

ut the a

ctiv

ties we do n

ot ﬁnan

ce. W

e will

not p

rovide ﬁn

ancal s

vice

s to clien

ts w

ho bre

ach, or s

how

insuff

cient pr

gress in

alignng with, our P

ositon Statements.

In 2021, we u

pdate

d our Pos

iton St

atem

ent

s covering a

sensitve sectors. W

e introduced enhanced requirements

whi

ch will be

come e

ffe

ctive f

rom 2022

, with t

he excep

tion

of additona

l restrictons placed on thermal c

oal-

dependent clients, which were effective immedately

Pillar 1: Bus

iness

continued

Strategic

report

Standard Chartered

– Annu

al Rep

ort 202

Pillar 1: Bus

iness

continued

e ide

ntf

y an

d asse

ss E&S r

isks r

elate

d to our CC

IB client

and em

bed o

ur E&S ris

k fram

ework dir

ectl

y into ou

r credit

approv

al process

. Where

req

uired,

we proactively engage

wit

h client

s to mi

tgat

e identﬁe

d ris

ks and i

mpact

s and

sup

port t

hem to i

mprove the

ir E&S per

form

ance over t

ime.

All relationsh

p manager

and credit ofﬁcers are pro

vided

wit

h acces

s to det

ailed o

nline re

sourc

es and E&S g

uideln

es,

and o

ffer

ed trai

nng in as

ses

sing E&S r

isk aga

inst ou

r crite

ra.

ring 2021 we prov

ided t

rainng t

o 1,

280 coll

eagu

es.

r approa

ch rema

ins to wor

k with c

lient

s to imp

rove

their E

&S performance

with specifc timebound

action

plan

s. Wh

ere clie

nts a

re unabl

e or unwil

lng to me

et our

requirement

s, we will ultimately exit those relations

h

subject to

contractual obligatons. During 20

21, we

revi

ewed 786 cli

ent

s and 547 tra

nsact

ions t

hat pre

sente

potential specif

c

isks against our P

ositon Statement

ring 2021, we c

ontin

ued to h

old th

e posit

on of Cha

ir of the

EP As

soci

aton

, and mem

ber of t

he Boa

rd of Gover

nor

s of th

Roundtable

on Sustainable

Palm Oil. I

n additon, we adopted

the Poseidon

Princples.

In 2022

, we will p

rior

tise o

ur appro

ach to bi

odver

sit

, an

update our En

vironmental and Social R

isk Management

Framewo

rk in sup

por

t of our am

biton t

o becom

e the wor

’

mos

t susta

inabl

e and resp

ons

ible ban

k. W

e w

ill als

o fur

ther

exp

and ou

r capacit

y t

o condu

ct E&S due dil

gence o

n client

by levera

ging ou

r Glob

al Bus

ines

s Ser

ce centr

e in W

saw.

abo

our Positon Statements

sc.com/

positonstatements

Rea

d mor

e abo

ut ou

r proh

ibt

ed ac

tiv

tie

at

sc.com/

prohibte

dactivties

about our reporting against

eEqua

tor Pr

inc

ple

s at

.co

equatorprincples

Responding

to climate change

e be

lieve tha

t climat

e chang

e is one of t

he gre

atest

chal

lenge

s facing t

he wor

ld tod

ay and t

hat it

s impa

ct will hit

hard

est in th

e commu

nites a

nd mar

kets w

here we op

erate

nam

ely A

sia, th

e Middle Ea

st and Af

rica

r climat

e strat

egy is s

tru

cture

d aroun

d thre

e pillar

accelerat

ing sustainable ﬁnance; reducin

g our direct and

ﬁnan

ced emi

sson

s; and man

aging t

he ﬁnan

cal ris

k from

clim

ate chan

ge. The

se fo

cus area

s reﬂec

t the way

s in which

we cont

ribu

te, and a

re expo

sed to, t

he ri

sks ar

isng f

rom

climate chang

Accelerating sust

ainable ﬁnance

The n

eed f

or a just t

ransit

on to an in

clus

ve, net zero e

conomy

ings wi

th it a hug

e oppo

rtu

nit

y for inn

ovaton an

d growth

for o

ur clien

ts an

d our Ba

nk. W

e a

re uniqu

ely pl

aced to h

elp

bydire

ctng capi

tal to ma

rket

s that h

ave bot

h the gre

ates

opportunit

y to adopt

low-carbon technology

, and some of

the toughest

transiton-

ﬁnancng

and climate c

hallenges.

Ass

et out o

n page 6

4, we p

lan to mo

bilse $

300 bil

lon

align

ed to ou

r Gre

en and Su

stain

able Pro

duct Framewo

and T

ransiton Finance F

ramework

Red

ucin

g our dir

ect a

nd ﬁna

nced e

mis

son

Sinc

e 2018, we h

ave bee

n work

ing on ali

gnng the e

miss

ons

fro

m bot

h our own o

perat

ions an

d our ﬁna

ncng act

ivti

toth

e Paris Agre

emen

t goal o

f below t

wo de

grees o

f glob

warm

ing. D

uring 2021

, we anno

unced o

ur plan t

o reach n

zero in o

urﬁnancn

g by 2050, wit

h ambito

us inte

rm targ

ets t

sub

stant

ially re

duce o

ur ﬁnanc

ed carb

on emi

sson

s by 20

o achieve th

is, we ha

ve set ou

t our ro

admap t

o reduc

ﬁnanced emis

sons, ﬁnance tran

siton projects and acce

lerate

new so

luti

ons. Re

ad mor

e about o

ur appr

oach to n

et zero at

.com/

netze

ro.



Ove

r 7

0 p

er cent o

f our Su

staina

ble

Finance asset

s are located in

emerging and

developing economies.

avoided from operat

ional assets



.

m tonnes

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

Stakehold

ers and responsi

blites

Sus

tainable an

d resp

onsib

le busin

ess

contin

ued

Pillar 1: Bus

iness

continued

e aim to reduce abso

lute ﬁnanced ther

mal coal minng

emi

sson

s by 85 per ce

nt by 2030, in addit

on to th

e exist

ng

proh

ibtion o

n ﬁnancn

g new or ex

pandin

g coal-ﬁre

power p

lant

s. W

e ar

e also re

ducin

g emis

sons in

tenst

in ot

her high-

carb

on sect

ors

, set

ting in

term t

arget

s for

power (

-6

3perce

nt emis

sons in

tenst

), ste

el and mi

nng

(

-3

3percen

t emiss

ons int

enst

y re

spect

ivel

)

, an

d oil and

gas(

-30perce

nt emis

sons i

nten

st

)

e con

tinue t

o innovat

e and str

ive to ac

celera

te new

sol

utio

ns to clim

ate cha

nge, su

ch as lau

nchin

g and growi

sustainable products; reporting on wealth management

emi

sson

s; and dep

loying a n

ew T

ansit

on Accele

ration T

to prov

ide ou

r client

s in car

bon-int

ens

ve secto

rs wi

th dee

exp

ert

ise on h

ow to accel

erate t

heir low-c

arbo

n trans

iton

and t

ools t

o meas

ure the

ir progr

ess

e are a

lso com

mitte

d to red

ucing t

he emis

sons we p

rodu

ce,

and in 2021 we b

rough

t for

ward ou

r targe

t to achieve n

et zero

in ou

r opera

tions f

rom 2030 to 202

With appro

imately 1

00 suppliers, we understand that

the

re can be s

ignﬁcant car

bon e

misso

ns as

socia

ted wi

th the

procurement of goods and serv

ices

and a potential physical

imp

act on ou

r suppl

y chain t

hat ma

y impact o

ur abilt

y to

ser

ve o

ur clien

. In 2021, we devel

oped a m

eth

odolo

gy to

asure o

ur supp

lier Sc

ope 3 emi

sson

s and us

ed this t

engage our top-emitt

ng suppliers to understand their

climate-rel

ated actions

, goals and overall alignment with

our sustainab

lit

y agenda.

As a r

esult

, sust

ainabl

y facto

rs ha

ve been e

mbed

ded in

our S

pend C

ateg

y Plan

s, incl

udng t

argeti

ng spe

cif

c area

to dr

ive emis

son re

duct

ions

. W

e also b

egan t

o embe

emissons-

related clauses into relev

ant supplier contracts to

reduce our consumption

and mitgate remainder

emis

s

Managing the

ﬁnancal risk f

rom climate

change

Managing t

he ﬁnancal risks fro

m climate change remains

a key prio

rt

y for t

he orga

nisat

on. Th

rough

out 2021, we

continued to embed cl

imate risk management into our E

RMF

und

ers

tandin

g the imp

act of phy

sical an

d trans

iton ri

sks o

our credit portf

olio a

nd climate related reputatio

nal risks for

clie

nts in h

igh tran

siton s

ecto

In 2022

, we will ex

tend t

his to cover o

ther re

levant Pri

ncpal

Risk T

ypes. Climat

e scenario analysi

s across our market

incl

udng t

he Bank o

f Englan

d’s 20

1 Bienn

al E

xplor

ator

Scenar

io, have helped improve our under

standing in

identf

ying

y portfolios vulnerable to

climate risk.

In par

tne

rshi

p with p

eer

s, ind

ustr

y a

nd acad

emia, we ar

transitoning from measurement to management of

climate

risk. Through ongoing partnership with Imperial College

London, w

e supported the publicat

on of a

ew climate

research

hich revea

led th

e pote

ntial fo

r natu

re-ba

sed

solutions to tackle the i

nterlnk

ages bet

ween agriculture,

land-use and climat

e change.

Princpal B

oard deci

son – our p

athw

ay t

o net zero

As p

art of t

he con

sider

aton pro

cess f

or appr

oving th

e net

zero p

athway

, t

he Bo

ard had to e

nsur

e it was comf

ort

able

with the

methodology

, the potentia

l outcome of

applying

the m

etho

dolo

gy and t

he sub

stance o

f the p

athway

all se

t withn t

he cont

ext of an ag

reed an

d robu

st ris

man

ageme

nt fra

mework

. T

o achieve th

is, th

e Boar

par

ticp

ated in s

everal dis

cusso

ns dur

ing th

e year and

prov

ided valu

able in

put acr

oss a nu

mber o

f areas

, taki

into acc

ount the impact

on the Group

’s

stakeholders.

amples of such consideratons wer

•

the r

isk th

at som

e client

s ma

y consi

der th

e Grou

’

appr

oach to

o aggre

ssi

ve, or conver

sel

y that it d

oes no

go far enough,

considerng in particular the c

lenge

of th

e Grou

’

s f

ootp

rint in e

mergin

g market

s and

devel

oping co

untr

ies and r

ecogn

isng th

e diff

erng

pat

hways to n

et zero in dif

fer

ent mar

kets an

d the

nee

d to sup

por

t and faci

ltate a ju

st tran

siton

•

the i

mpact o

f the pa

thway on o

ngoin

g discus

son

s with

civ

l socie

ty g

roups

, such a

s NGO

•

likely

stakeholder reaction i

clud

ng governments

regulators, communites and

clients as well

as investors

and N

GOs to t

he met

hodo

logy

•

whe

n to anno

unce t

he pat

hway and how t

his woul

impact cer

tain stakeholder

•

the s

ignﬁcant l

evel of eng

agem

ent the G

roup h

undertaken with

some stake

holders, includng in

vestors

and N

GOs

, while fo

rmu

latin

g the ne

t zero pat

hway

•

the importance of pr

ovidng

oppor

tunity for feedback

fro

m thos

e stakeh

older

s not a

lread

y consu

lted o

nce the

pat

hway was pu

blish

•

the c

onten

t of the co

mmuni

caton

s mater

ial to b

published to ensure effective

readabil

y for

stakeholders

•

ture r

epor

ting o

f progr

ess ag

ainst t

he pat

hway to

the mark

•

the potential opportunites of T

ransiton Finance

offering

for clients

•

the i

mpor

tance o

f supp

orti

ng the t

ransi

ton for m

any

clients towards lo

wer

-emittng technologies to support

a just transiton

•

the i

ntend

ed pla

n to put t

he pat

hway to an ad

viso

vote a

t Standard Cha

tered

’

s 2

022 Annual

enera

eting (AGM) in rec

ognito

n of how imp

ort

ant thi

s is

to our shareholders and

ther s

takeholders

Stakeholder considerat

ons were tak

en into account in

ard’s overs

ight of t

he net zero p

athway a

mong m

any

oth

er fact

ors

. As a re

sult

, the B

oard, co

gnisa

nt of the

met

hodo

logic

al appro

ach and in

teres

t in the p

athway

by shareholders and other stak

eholder

s, approv

ed the

recommended pathway

and communicatons plan.

Strategic

report

Standard Chartered

– An

nual Re

por

t 2021

Summary of

Standa

rd Char

tered

’

s T

CFD resp

onse

Sta

ndard Ch

arte

red pu

blicly c

ommit

ted to t

reco

mmen

datio

ns of th

e Financal S

tabilt

y B

oard

’

s T

ask

Force on Climate-relat

ed Financal

Disclo

sures (TCFD

)

recommendations in 2

017 and has subsequently released

annual TCFD

eport

s since 2018.

Our comprehensive T

CFD

disclosure is

published in a

stan

dalon

e repo

rt whi

ch provi

des info

rmat

on in a re

adily

identﬁable

and accessible format for all interested

stake

holde

. This can b

e acces

sed at

om/t

. The table

bel

ow set

s out t

he 11 T

FD recom

mend

ed disc

losur

es and

sum

maris

es th

e progre

ss we ha

ve made in 2021

. Throu

con

siste

ncy w

ith th

e T

CFD r

ecomm

endat

ions

, we have

achi

eved comp

liance w

ith th

e listn

g rule

Gov

rnance

Board

ersight

of c

lima

risks and

opportunites

Current status

•

In 2021, we h

eld Bo

ard-l

evel an

d Mana

gem

ent T

m train

ng on o

app

roac

h to ne

t zero an

d Boar

d-leve

l train

ng, d

eliv

ered by I

mpe

rial C

olle

Lon

don, o

n clim

ate sc

enar

ios t

o supp

t the Bo

ard w

ith th

eir re

view an

challenge of

climate related regulatory stress testing.

•

The Bo

ard rev

iewe

d and ap

prove

d our ap

proa

ch to re

achi

ng ne

t zero

car

bon e

mis

sons f

rom o

ur ﬁna

ncng by 20

50 and a

sso

ciat

ed in

ter

m targ

ets

•

The Bo

ard re

cei

ved re

gula

r Clima

te Ris

k upd

ates v

ia th

e Boa

rd Risk

mmit

tee (B

RC) and r

epor

s fro

m the G

roup C

hief Ri

sk Of

ﬁcer.

•

irst

-generation Climate

Risk reporting and

Management Level

Risk

peti

te me

tri

cs wer

e shar

ed wit

h the B

RC and ap

prove

d by the G

rou

Ris

k Com

mitt

ee wh

ich ha

s over

sight o

f Clim

ate Ri

sk.

Future prior

ties

•

e aim

enhance Climate Risk trainng

to o

ur sub

sida

y boa

rds, b

uild

ng on in

tial

trainng delivered in 202

•

Result

s of m

anag

eme

nt str

ess t

est

s wil

l be

rev

iewed a

nd cha

llen

ged by t

he BRC an

wil

l stre

ngt

hen th

e Boa

rd’s over

sig

ht of th

impact from C

limate Risk on our

busines

ﬁnancal perfor

mance and operations

and stre

ngthen busi

ness strategy

and

ﬁnancal planning.

Management

’

role in

assessing and

managing

climate

risks and

opportunites

Current status

•

The Gr

oup Ch

ief Ri

sk Of

ﬁcer (CRO

) ha

s Sen

ior Ma

nage

men

t Respo

nsi

blit

for C

lima

te Ris

k and is s

upp

ort

ed by th

e Glo

bal He

ad, E

nter

pri

se Ris

Man

age

ment w

ho ha

s day-t

o-d

ay over

sig

ht, a

nd has a

ppo

inte

d the

Clim

ate R

isk Ma

nage

men

t Foru

m tha

t over

see

s the de

live

y of the G

rou

’s

commitment to

manage climate related ﬁ

anc

al and non-

ﬁnancal risks.

•

In 2021, we e

stab

lish

ed a rob

ust g

overn

ance s

tru

ctu

re to su

ppo

rt ou

r net zer

app

roac

h thro

ugh t

he Net Ze

ro St

eer

ing G

roup c

haire

d by the G

rou

p Hea

Condu

ct, Financal

ime & Compliance.

•

e aim

strengt

hen business segm

ent, countr

, and region

Clim

ate Risk

gove

rnan

ce and c

onti

nue t

o keep th

e Man

agem

ent T

m upd

ated t

hro

ugh

e Gro

up CRO re

por

ts an

d Man

agem

ent In

for

mat

ion rep

t to th

e GRC

Future prior

ties

•

e wil

l cont

inue t

o exerci

se app

ropr

iat

oversight and

governance of our a

pproach

to n

et zero a

t Boar

d and Ma

nag

emen

eam

level.

•

aim to strengthen business segment,

market, and regio

nal Climate Risk

gove

rnan

ce and c

onti

nue t

o keep th

Management T

eam

dated through

e Gro

up CRO re

por

ts an

d Man

agem

ent

Inf

orm

atio

n rep

ort t

o the G

RC.

Strategy

Climate-

risks and

opportunites

identﬁed o

ver

the short,

medium and

lon

g te

Current status

•

e hav

e ass

ess

ed th

e impa

ct of cl

imat

e ris

k to the b

ank

ing b

ook un

der

ree tr

ansi

ton s

cena

rios o

ver a 30

-year ti

me ho

rizo

n, whi

ch has e

nab

led

us t

o iden

tf

y cli

mate r

isk

s, s

trat

egie

s to mit

gat

e ris

k as well a

s clim

ate

opportunites.

•

In 2021, we id

ent

ﬁed cli

mate

-rel

ate

d oppo

unit

es lin

ked to th

e Ban

’

s ne

zero i

n ﬁnan

ced em

iss

ons ap

pro

ach inc

lud

ng aimn

g to:

–

obilse $300 billon in green and transiton ﬁnance

–

edu

ce abs

olut

e ﬁnan

ced t

her

mal co

al minn

g emi

sso

ns by 85%

–

edu

ce emi

sso

ns int

ens

ty i

n othe

r high c

arb

on sec

tor

s wit

h the in

ter

m

2030 ta

rget

s in

clud

ng powe

r (

-63% e

mis

son

s inte

nst

), st

eel an

d minn

(

- 33% em

iss

ons in

ten

st

y res

pect

ivel

), and oi

l and ga

s (

-30% emi

sso

intensty

•

e use q

uant

ita

tve an

d bot

tom up t

ool

s and me

tho

dol

ogie

s to as

ses

tra

nsit

on an

d physi

cal cli

mate r

isk a

nd we app

ly th

ese t

o our cl

ient

rtf

olio

s, an

d our ow

n oper

atio

ns.

Future prior

ties

•

l continue

to develop and

enhance our Climate Risk

opportu

nity

identﬁcat

on, interplay and modelling

capabilties to strengt

hen climate risk

quantifcation. This includes

consistenc

and w

her

e pos

sibl

e, uni

form

t

y of tim

horizons.

•

e aim to d

isc

lose a

nnua

lly th

e pro

gres

we are m

aki

ng aga

inst o

ur $3

00 bil

lon

and o

the

r net ze

ro targ

s and bu

ild ou

r clien

t capa

bilt

y to a

chieve o

ur ne

zero through:

–

our newly developed T

ransiton

Acceleration T

eam

–

repor

ting

mortgage emissons with

a vi

ew to se

ttin

g targ

s by 2023

–

ubling our sustainable investng

asset

s under

managem

ent

–

unching and growing sustainable

product

s includng Universal Climate

Finance Loans, green mor

tgages and

sustainabl

e in

vestn

offe

rings while

integratng ESG consideratons in our

wealth management

adv

isory activties.

me of t

he da

ta, m

etr

ics a

nd me

tho

dol

ogie

s use

d in re

lat

ion t

o the G

rou

’s TCFD re

por

t whi

ch is su

mma

riz

ed in th

is se

cti

on is s

ubje

ct to l

imta

tio

ns. T

he re

ade

oul

d tre

at th

e info

rma

ton p

rov

ided

, and c

oncl

usi

ons a

nd as

sum

pti

ons dr

awn f

m the u

nder

ing d

ata w

ith ca

uti

on. T

he lim

tat

ion

s to th

e dat

a, me

tri

cs an

tho

dol

ogie

s as we

ll as t

he ba

sis o

n whic

h the G

rou

’s TCFD re

por

t was m

ade a

re se

t out in t

por

tan

t Not

ice – B

is of Pr

epa

rat

ion a

nd Ca

uti

Regardi

ng Data

Limtations

section of the Group

’

s TCF

D report available a

t sc.com

/tcfd.

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

Stakehold

ers and responsi

blites

Sus

tainable an

d resp

onsib

le busin

ess

contin

ued

Summary of

Standa

rd Char

tered

’

s T

CFD resp

onse

continued

Strategy

Impact o

climate

risks and

opportunites

on business,

strategy

and planning

Current status

•

Sustainab

lit

y has

een e

levat

ed to b

ecom

e a pill

ar of th

e Gro

’s str

ate

•

e con

tinu

e to res

tri

ct ﬁnan

cng of t

her

mal co

al min

ng an

d redu

emissons intensty in other carbon i

ntensve sectors. Where clients do

t show a su

fﬁc

ent leve

l of com

mit

ment t

o the t

rans

iton

, we res

e righ

t to cea

se pr

ovidn

g the

m wit

h our se

vice

•

In 2021, we e

ngag

ed wi

th app

roxim

ate

ly 2,0

00 of o

ur cli

ent

s, to h

elp

understand their exposure to

climate risk and

identfy climate opportunites.

•

o m

ake our b

usi

nes

s mod

el mor

e resi

lent t

o Clim

ate Ri

sk we are al

rea

ducin

g app

etit

e for s

elec

ted hi

gh-ca

rbo

n sec

tor

s such a

s coal

, in sup

por

of o

ur pla

n to rea

ch net z

ero in ou

r ﬁnan

cng by 205

0, whil

st ba

lanci

transiton risk

and opportunit

y with a

mbitous i

nterm targets to

substantially

duce o

ur ﬁna

nced c

arb

on emi

sso

ns int

ens

ty by 203

Future prior

ties

•

e will dev

lop Climate Risk

management scenarios, which will

urther

inf

orm u

s of th

e pote

nti

al imp

act fr

Climate Risk on our busines

s, ﬁnancal

perfo

rmance and operation

s and

strengthen business strategy and

ﬁnancal planning.

Climate-

scenario

analysis

Current status

•

Our cl

imat

e-rel

ate

d scen

ario a

nal

ysis

, bas

ed on t

hos

e fro

m the N

work o

ntra

l Bank

s and S

upe

vis

ors f

or Gr

eeni

ng th

e Finan

cal Syst

em (NG

FS),

includes orderly

, disorderly and

hot

-house world scenarios.

Future prior

ties

•

ill

develop management scenarios

that will strengthen c

sideratons

Clim

ate R

isk in in

to th

e Gro

’s cor

pora

pla

n and ne

t zero s

trat

egy.

Risk management

Identif

yng

and assessing

climate

risks

Current status

•

e ide

ntf

y p

hysica

l and tr

ansi

ton r

isk a

s par

t of cli

ent

, por

tfo

lio and o

propert

y assessments and consider:

–

Phy

sica

l ris

k: cur

ren

t day an

d lon

ger te

rm ti

me ho

rizo

ns for a

cute w

eath

even

ts (stor

m, ﬂo

od, w

ildf

re, e

art

hqu

akes

) a

nd chro

nic se

a leve

l ris

–

ansi

ton r

isk

: ﬁnan

cal imp

act at a c

lien

t level u

nder a r

ange o

f NGF

based scenarios.

–

emperature alignment: provides

a temperature score to indc

ate client

and p

tfol

io level g

lob

al warm

ing p

oten

tial u

p to 2030.

•

Climate Risk is recognised in our central Enterpr

ise Risk Managemen

Fram

ework (

ERMF

) as an in

tegr

ate

d ris

k ty

pe an

d is man

age

d in-lin

e wit

e Prin

cpal Ri

sk T

e (PRT) i

mpac

ted e.g

. Cre

dit, M

arke

t, Op

era

tion

al.

•

Clima

te Ris

k is as

ses

sed a

s par

t of reg

ula

tor

y st

res

s test

ing t

hrou

gh th

ann

ual In

ter

nal Ca

pita

l Adequ

y As

ses

smen

t Proce

ss (I

AP), the 2021

Bank of England Climate Biennal E

xplorator

y Scenar

io (

CBES),

ocal

countr

regulator

y stress

sts.

•

In 2021 clie

nt en

gage

ment h

as im

proved t

he cove

rage o

f data t

hat i

nfor

e clima

te cli

ent le

vel ri

sk as

ses

smen

ts b

eing i

nteg

rate

d into t

he cr

edit

under

writng process.

Future prior

ties

•

rther embed

ding of Climate Risk

management across PR

s, consideraton

of r

isk mi

tga

tion ove

r tim

e as

metho

dologies mature and exp

anding

cover

age a

cros

s prod

uct

s and m

arket

Managing

climate

risks

Current status

•

Clima

te Ris

k is man

age

d in acco

rdan

ce wit

h the Pr

inc

pal Ri

sk T

ype (

PRT)

roug

h whic

h it mani

fest

. Depe

ndin

g on th

e PRT fram

ewor

k, it i

s appl

ied

at a cl

ient

, loc

atio

n or po

rtf

olio l

evel as p

art o

f tran

sact

ion

al, po

rtf

olio o

operational lev

el analysis for priortised

areas.

•

Ther

e is a Ris

k Appe

tit

e (RA) St

atem

ent t

hat is a

ccom

pani

ed by R

A met

ric

at are b

ase

d on po

tent

ial lo

sse

s und

er dif

fere

nt cli

mate s

cen

ario

s and

ese R

A met

ric

s are r

epor

d to the G

Future prior

ties

•

isk Appetite thresholds

become effective

in 202

Integrating

into the

organisat

on’

erall risk

management

Current status

•

Clima

te Ris

k is int

egra

ted in

to and m

ana

ged as p

art o

f exi

stn

g PRT

–

Cre

dit Risk: Climate Risk (physical and transiton

) ass

essment

s are

eing

inc

orp

orat

ed int

o the c

redi

t unde

wri

tng p

roce

ss fo

r CCIB cli

ent

s. Fo

r our

CPBB sector

, ph

ysical risk considerat

ons inform cr

edit portfolio quarterly

rev

iews f

or over 90

% of th

e reta

il mor

tga

ge po

rtf

olio.

–

per

atio

nal an

d T

echn

olo

gy Ris

k: all n

ew pro

per

y site

s are as

ses

d for

physical risk vulnerabilties.

–

aded R

isk

: a physi

cal ri

sk-base

d sce

nar

io is in

clud

ed as p

art o

f the T

ded

Ris

k stre

ss te

sti

ng fr

amewo

rk.

–

oun

y Ris

k: th

e set

ting o

f Cou

ntr

y Ri

sk lim

ts in

clu

de Clim

ate Ri

sk as a

factor and

regional Countr

y Risk

reviews for sov

ereign credit g

rades continue

to include

Climate Risk considerat

ons

–

Repu

tational and Sustainablit

y Risk: for priort

ised high-carbon client

s and

transactions a C

limate Risk ov

lay

assessment is applied (

in addi

ton to

Environmental and So

cial Risk

Managem

ent and restrictve polices

–

ompliance: a process has been establi

shed for tracking various Climat

Risk

-related regulations.

–

eas

y Ris

k: Cli

mate R

isk wa

s cons

ider

ed as p

art o

f the 2020 and

2021

Future prior

ties

•

Continue

to embed Climate Risk

consideratons withn PRT

cludng

exp

and

ing CCIB c

overa

ge.

Strategic

report

Standard Chartered

– Ann

ual Rep

t 2021

Summary of

Standa

rd Char

tered

’

s T

CFD resp

onse

continued

Metrics and

argets

Metrics used

assess and manage

climate-relate

d risk

and opportunites

in li

ne wit

strategy and

risk

management

processes

Current status

•

Early s

tage r

isk m

ana

geme

nt met

ric

s are u

sed f

or qua

ntif

ng

tra

nsit

on an

d physi

cal ri

sk at a cl

ient a

nd por

olio le

vel, an

d for

r own op

erat

ions

. Th

ese ar

e use

d for dif

rent p

roce

sse

s such

as regulatory stress testing, monitorng cl

imate risk as

par

of Risk

peti

te rep

ting

, and t

o infor

m th

e ass

ess

ment

s be

ing in

tegr

ated

int

o exis

tng t

rans

act

iona

l risk p

roce

es and c

lient r

evie

ws. S

ome

tric

s we us

e incl

ude:

–

ﬁ

nanc

al imp

act of va

riou

s tra

nsit

on sce

nar

ios up t

o 2050,

expressed as weig

hted average

probabilty of default

–

out

standing e

posure

of retail

mor

tgage

portfolios to current

and for

ward looking physical risk events (ﬂooding, stor

m, wildfre,

future sea level

ise

)

–

erce

nta

ge of ou

r own of

ﬁces

, bra

nche

s and da

ta cen

tre

s in

catio

ns at e

xtre

me gro

ss phys

ical r

isk eve

–

ountr

y-Climate Risk index ranking count

ries by

physical and

transiton risk.

•

In 2021, we ex

pan

ded o

ur dis

clos

ure

s to inc

lude:

–

the ﬁnancal i

act

on exposure to high

-carbon sectors loans

and advances.

Future prior

ties

•

Cont

inue t

o reﬁn

e and en

hanc

e covera

and applicaton of Climate Risk relate

metrics as

our tools and

methodologies

mat

ure

, with a g

reat

er fo

cus on

developing intern

al climate modelling

capabilties and asse

ssing the implcations

of an i

nter

nal ca

rbo

n pri

ce whe

re po

ssib

le.

Disclose Sco

pe 1,

ope 2 an

d, if

appropriate, Scope

3 greenhouse gas

iss

on

s and t

risks

Current status

•

Our 2021

, our S

cope 1 e

mis

son

s were 2

902 t

onne

s carb

on diox

de

equivalent (

tCO

), a red

ucti

on of 27 p

er ce

nt fro

m 2020, and Sc

ope 2

emi

sso

ns wer

e 82,76

1 t

e, a re

duct

ion o

f 27 pe

r cent f

rom 2020.

•

In 2021, ou

r Sco

pe 3 air t

rave

l emis

son

s were 3

,65

4 tCO

e, a re

duct

ion

of 89 p

er cen

t fro

m 2020.

•

In 2021, we b

ase

line

d and es

tima

ted o

ur 2020 Sco

pe 3 su

pply c

hain

emi

sso

ns (

ndo

), usi

ng sp

end da

ta. A

s a res

ult of t

his exe

rcise w

est

ima

te the

se em

iss

ons a

s 365,911 t

•

e me

asur

ed th

e abso

lut

e ﬁnanc

ed em

iss

ons b

asel

ine of o

cor

por

ate le

ndin

g por

tfo

lio as o

f 2020-year e

nd, f

ocus

ing on

.8 bil

lon of a

sse

ts (

qua

ting t

o a covera

ge of 7

7 pe

r cent o

r in-sc

ope as

ts of $

3 bil

lon, e

qua

l to 45.

2 mill

on met

ric (M

)

. There is currently

insuf

fcient avai

lable data to accur

atel

reﬂ

ect th

e ﬁnan

ced em

iss

ons o

f the re

main

ng 2

3 per ce

nt of ou

in-s

cop

e ass

s. A lin

ear ex

trap

olat

ion wo

uld t

rans

late t

o an overa

seli

ne of up t

o appr

oxim

atel

y 59Mt CO

•

In 2021, we o

set o

ur Sco

pe 1-3 (ﬂigh

ts an

d dat

a cent

res

) t

hrou

gh high

alit

y and v

erif

ab

le car

bon c

redi

ts a

t a cost o

f $7

65/

onn

Future prior

ties

•

e wil

l cont

inue t

o exte

nd our S

cop

e 3

ﬁnanced emissons measurement

capabilties

argeting additonal secto

and incorpo

rating additonal ﬁnancal

pro

duct

s as m

eth

odo

logi

es all

. Fo

202

2, a sp

ecif

c pr

ior

t

y will b

e bas

elin

ng

the emissons from our

residental

mortgage lending.

get

s us

ed by th

organisat

on

manage climate

risks and

opportunites and

performance

against targ

ets

Current status

•

e hav

e cont

inue

d to evol

ve and c

halle

nge o

ur exi

stn

g Sust

aina

blit

pira

ton

s incl

udng s

ett

ing in

ter

m and lo

ng-te

rm ta

rget

s to r

each

t zero in o

ur ope

rati

ons by 202

5 and ne

t zero in o

ur ﬁna

nced

emissons b

y 2

050.

•

In 2021, we f

acilt

ate

d $9

.6 bil

lon to

wards s

usta

inab

le inf

ras

tru

ctu

and $

22 bi

llon t

owards r

enewa

ble en

erg

y ser

ices

•

In 2021, me

tri

cs an

d targ

s develo

ped a

nd dis

clo

sed in

clu

de:

–

lan to m

obil

se $3

00 bi

llon al

igne

d to ou

r Gre

en and S

ust

ainab

Product Framework and T

ransiton Finance F

ram

ework

–

eas

uri

ng, m

anagi

ng and r

edu

cing e

miss

ons a

sso

ciat

ed wi

r ﬁnanc

ng of cl

ient

s to s

uppo

rt ou

r obje

ct

ve to ach

ieve ne

t zero

by 205

Future prior

ties

•

e wil

l annu

ally di

scl

ose ag

ains

t our 20

net z

ero in ﬁna

ncng

targets

•

e wil

l cont

inue t

o dri

ve cons

iste

of u

se of ta

rget

s acr

oss t

he Gr

oup’

functions and build

our knowledge of

the interrelation between targets.

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic report

Stakehold

ers and responsi

blites

Sus

tainable an

d resp

onsib

le busin

ess

contin

ued

Client

Regulators

d gove

rnm

Supplie

Socie

e st

rive to b

e a resp

onsib

le bus

ines

s, dra

wing on o

ur Pur

pose

, brand p

romis

e, valued b

eha

viour

s and C

ode of C

ondu

ct to hel

us ﬁgh

t ﬁnancal c

rime, m

inmise o

ur imp

act and em

bed ou

r values a

cros

s our bu

sines

2021 Sustainablit

Aspirat

ons:

Operations

Environment



Status

Progres

Red

uce ann

ual gr

een

hous

e gas (GHG) em

iss

ons (Sco

1 and 2) to n

et zero by 203

0 wit

h an int

erm t

arge

c 2021: 10

6,00

0 tCO

c 2025: 60,0

00 t

Jan 2019–

c 2030*

Sur

pas

d inter

m targ

ets

, ach

ievng 8

5,6

62 tonn

es CO

uivale

nt (

) ba

sed on c

onti

nued e

fﬁce

ncy wo

across the

estate, plus an

accelerated rene

wable energy

programme.

*In 2021

, we brou

ght fo

ward our a

mbit

on targ

et to ac

hieve

net ze

ro GH

G emis

sons i

n our op

erat

ions t

o Dece

mber 202

e page 45

urce al

l ener

gy f

rom ren

ewabl

e sou

rces

an 2020–

c 2030*

Renewa

ble en

ergy wa

s up 89

% in 2021, rep

rese

ntin

g 15% of

tot

al ene

rgy co

nsum

ed (28

.2 of 1

83 GWh

) g

lobal

, an i

ncre

ase

om 7% (14

9 GWh

) i

n 20

20.

*In 2021

, we brou

ght fo

ward our t

arge

t to achi

eve net zer

emissons and ensure

we only consume renew

able energy

acr

oss ou

r por

tfo

lio to 2025

. See p

age 455.

Joi

n the Cl

imat

e Gro

up ‘RE

0’

n 2021

–

c 2021

e en

gage

d wit

h RE10

0 dur

ing th

e year as t

hey deve

lope

cri

ter

a for ﬁna

ncal in

stt

utio

ns se

ekin

g to bec

ome RE

100

mem

ber

s. Fo

llowin

g ﬁnals

atio

n of th

ose cr

iter

a, we jon

RE1

00 as a s

tanda

rd mem

ber wh

ich was f

orm

alise

d in

Januar

y 20

Achi

eve and m

aint

an ﬂigh

t emis

son

s 28% lowe

r than

r 2019 ba

selin

e of 94,00

0 ton

nes

n 2021

–

c 202

Flig

ht emi

sson

s red

uced 96% from 20

19’s ba

selin

e, far

excee

ding t

he tar

get

. This r

educt

ion wa

s prim

arl

y drive

n by

e CO

D-

19 p

andem

ic red

ucing a

ll tra

vel.

Red

uce was

te pe

r coll

eagu

e to 40

kg per ye

Jan 2020

–

c 202

otal wa

ste pr

oduc

ed in 2021 was 4

3kg per c

olle

ague

com

pare

d with 6

5kg per co

llea

gue in 2020. Redu

ctio

n was

largely due

to more people

working from home in l

ight of

COVID-

19 p

ande

mic

. W

e als

o redu

ced th

e numb

er of o

printers, disposable cutler

, containers and

tensils

as well

as introduc

ng on-site

food composting.

Rec

ycle 9

0% of was

Jan 2020

–

c 202

32% of wa

ste was r

ycled d

urin

g the ye

, up f

rom 2

in 2020.

Develop

a methodolog

to measure Scope 3 emissons

from our supply

chain

n 2021

–

c 2021

Met

hod

olog

y to me

asur

e Scop

e 3 emis

son

s from o

ur sup

ply

cha

in was deve

lope

d and ap

proved by t

he Sus

tain

ablit

For

um in Ju

ne 2021. T

al sup

ply ch

ain emi

sson

s fro

m our

vend

ors w

as est

imat

ed to be 3

65,911 to

nnes i

n 20

20. 2021

ﬁgu

res are i

n progr

ess an

d will b

e repo

rte

d in 2022

Off

set a

ll residual emissons

from our operations

(Scope

1 and 2

, Sco

pe 3 ﬂig

hts

, was

te and d

ata ce

ntre

)

n 2021

–

c 2021

e h

ave achi

eved ou

r 20

1 carb

on of

et As

pirat

on to of

set

all re

sidu

al emis

son

s thro

ugh th

e follow

ing pr

ovide

rs: Fir

Clim

ate, Ci

X and Rab

obank

. T

otal vo

lume o

f emis

son

s off

was 13

6,00

0 tonn

es at an a

verag

e pric

e of $7

.65

/tonn

Pillar 2: Ope

ration

ncl

ude

d in th

e year

Achieved

Not achiev

Ongoing aspiraton

n tra

t on tr

ack

Strategic

report

Standard Chartered

– Annu

al Repo

rt 2021

Conduct



Status

Progres

Lea

rn fr

om ri

sks i

dent

ﬁed th

rou

gh conc

ern

s rais

ed vi

r Spe

akin

g Up pro

gramm

e and co

ndu

ct pla

ns and

blis

h an annu

al Thr

eat

s and T

hem

es Rep

ort

Ongoing

Thr

eat

s and T

heme

s repo

rt was i

ssu

ed in Ap

ril 2021.

Develop

enhanced internal

polices a

nd guidelnes

on privacy

, data ethics

and algorithmc fairness,

ande

mbe

d a new gove

rna

nce f

ramew

ork fo

r all

data-related

isks

Jan 2020

–

c 2021

The three

existng

Data Management Standa

rds co

vering

dat

a quali

, rec

ords m

anage

ment

, and p

riva

cy wer

refreshed to ensure better ali

gnment and

consistency

The Re

spo

nsibl

e Art

cial In

telli

gence (R

AI) g

uidel

nes wer

grade

d into a f

orma

l Gro

up RA

I Stan

dard un

der t

oup

’s ERMF in J

uly 2021

. The R

AI St

andar

d was f

urt

her

date

d duri

ng the ye

ar and a n

ew Sover

eignt

y St

anda

was dr

aft

ed. G

uidel

nes to a

ccomp

any the D

ata Q

ualit

Sta

ndar

d were enh

ance

d and pu

blish

ed in N

ovembe

r 20

A Gr

oup-w

ide ri

sk con

trol an

d self-ass

ess

ment e

xercise w

con

clud

ed in 2021 cover

ing r

isk

s in dat

a quali

ty, recor

man

agem

ent an

d pri

vacy.

Financal crime comp

liance

ackle

ﬁnancal

crimes by contributng

to developing

olog

ies an

d red ﬂa

gs fo

r ﬁnan

cal ﬂow

s, tr

ainng

frontline staff to identfy potential suspicous

transact

ions, and particpat

ing in public

-pr

ivate

part

nerships to share intellgence and goo

d practices

Ongoing

e activ

contribute to build

ng industr

capacit

includng

via hosting

a t

wo-day

vir

tual

rica

Anti-Money

Laundering

Symp

osiu

m and prov

idng in

put to f

ores

y cr

imes an

d wild

lfe

tra

de wor

k by the Uni

ted N

ation

s and Fin

ancal Act

ion T

ask

Forc

e over the c

our

se of 2021

. Supp

ort

ing th

is, we co

ntin

to tr

ain our s

taf

f acro

ss the B

ank on ﬁ

nanca

l crim

e risk

inc

ludn

g via man

dato

y trai

nng del

ivere

d to all st

aff.

Deliver at

least 50 correspondent banking acade

mies

n 2021

–

c 202

The c

halle

ngin

g CO

D-

19 l

ands

cape ha

s mad

e deli

ver

y of

correspondent banking ac

ademies ver

diff

c

ult

Both internal

strategic

priorties, and

external clien

t education

request

eds ar

e shif

tng. We will th

eref

ore ret

ire th

is As

pirat

on and

ref

ocus o

ur att

enti

on to a mo

re robu

st f

utur

e stra

tegy w

hich

wil

l exten

d the re

ach of t

he aca

demy con

str

uct to a b

road

set o

f ﬁnan

cal ins

ttut

ion cl

ient

s, an

d exten

d the t

opic

beyond

rame

work histor

cally offered b

y the academies.

Pillar 2: Ope

ration

conti

nued

ncl

ude

d in th

e year

Achieved

Not achiev

Ongoing aspiraton

n tra

t on tr

ack

Drivng g

ood condu

ct and et

hics

od con

duct is cr

itcal t

o deli

verng p

osit

ve outco

mes for o

clients, markets and stakeholders.

r Grou

p Code o

f Cond

uct (

e Cod

) remain

s the pr

imar

too

l thro

ugh whic

h we set ou

r condu

ct expe

ctat

ions

. The

de supp

ort

s all ou

r polic

es, se

ttin

g out minm

um stan

dards

and re

inforcn

g our valu

ed and e

xpec

ted be

havi

our

s. It al

outlines a decis

on-making framework to

help colleagues

make

od decis

ons

o reinfor

ce our shar

ed commitment to

the h

ighes

t poss

ible st

andard

s of con

duct

, each ye

ar we ask

our co

llea

gues to r

econ

sider w

hat th

e Code m

eans t

o them

thr

ough a re

fres

her e-le

arnin

g, and r

ecomm

it to it

. In 20

21,

.6 per cent

of our colleagues completed this.

In 2021, C

ondu

ct Risk be

came an in

tegra

l compo

nent of t

ERMF

, en

surin

g it is con

sider

ed wit

hn each Pr

incpa

l Risk T

ype.

A new ma

nagem

ent app

roach u

sing ta

rgete

d metr

ics

analytics and data to

enhance our Conduct Risk i

dentﬁcaton

and mi

tgat

ion will b

e rolle

d out in p

hase

s acros

s 20

In October 2

021 we

dated our

erationa

l risk

man

ageme

nt sys

tem, i

ntrod

ucng a new ﬁe

ld to ta

g each

sue log

ged w

ith the m

ost app

ropr

iate con

duct ou

tcom

Thi

s has en

abled t

he dat

a to be inc

lude

d as a bas

eline

cond

uct me

tric in t

he Gro

up Co

nduct D

ashb

oard to f

aciltat

data and

insght a

nalysis. The

Group Conduct

Dashbo

coll

ates a di

vers

e arra

y of data t

o prese

nt a vis

ual sum

mar

of potential Conduct

Risks.

The a

bilt

y to rais

e conce

rns is e

sse

ntial to u

phol

ding th

Gro

’s Here fo

r good b

rand and va

lued b

ehav

iour

Earl

y discl

osure o

f concer

ns re

duces t

he ri

sk of ﬁnan

cal

and reputational l

oss caused by

misconduct

e encourage

colleagues, contractors, suppliers and members of the

public to r

aise concerns to our Speaking Up whistleblo

wng

programme which offers secure, independent and

conﬁd

ental c

hanne

ls to rep

ort k

nown or s

uspe

cted

misconduct without fear

of retaliat

on. Examples of

whistleblowng c

oncern

s i

nclude breaches of regulator

req

uirem

ent

s, bre

aches o

f Gro

up poli

cy and/

or st

andard

or be

hav

iour th

at has a

dver

se ef

fect

s on coll

eagu

es or on

the G

roup’

s rep

utat

ion. O

ur 2021 My V

oice s

vey showe

87 per

cent of colleagues felt

conﬁdent

to raise concerns

wit

hout f

ear of re

pris

al.

Standa

rd Chartered

– Annu

al Rep

ort 202

Strategic report

Stakehold

ers and responsi

blites

Sus

tainable an

d resp

onsib

le busin

ess

contin

ued

In 2021, we s

aw the vo

lume of c

oncer

ns fall by 4 p

er cent

dri

ven in par

t by the ch

ange in wo

rkin

g arran

geme

nts d

urin

the COVID-19 pande

mic. D

urin

g the year, we clos

ed 285

Spe

akin

g Up case

s. Of t

he top t

hree su

bstan

tiate

d them

clo

sed in 2021, 1

7 relate

d to sex

ual hara

ssm

ent, 1

2 to

info

rmat

on and c

ybe

r secu

rit

y bre

aches a

nd 12 rela

ted to

failure to

ensure occupational health and sa

fet

. T

ogether

these account for appro

ximatel

34 per cent of substantiated

cas

es. In co

mpar

ison w

ith prev

ious ye

ars we s

aw fewer

instances of c

oncern

related to theft of in

formaton, personal

account deali

and close personal relationshps.

For t

he subs

tanti

ated inves

tgat

ions

, a range o

f corre

ctive

actions were recommended includ

ng process impro

vement

targete

d coaching, trainng, and dis

c

linar

y sanctions

ranging fro

m v

rbal warnings to disms

sals.

In 2021, we u

nited o

ur Con

duct and S

peak

ing Up t

eams t

for

m a new Co

nduct & Et

hics (

&E) t

eam. T

his enab

les us t

levera

ge sy

nergie

s and app

ly incr

ease

d focu

s on the

preventi

on of misconduc

t alongside our

dete

ction

capabilties.

In 2022

, we will co

ntinu

e to enh

ance our c

onduc

t police

s and

stan

dards s

o that t

hey rem

ain curr

ent

, clear an

d eff

ecti

ve.

e wi

ll also ro

ll out C&

E enga

gemen

t intiat

ves to un

ite

coll

eagu

es and lif

t par

ticpa

tion ac

ross t

he Gro

up ens

urin

a Gro

up-wi

de focu

s on liv

ng the G

roup C

ode of C

ondu

ct.

Furthermore, we wi

ll continue

to develop our

roup Conduct

Das

hboa

rd to der

ive de

eper co

nduct in

sght

s tha

t will en

able

us to dr

ive act

ion and r

emedi

aton in a m

ore tar

gete

d manne

acro

ss th

e Cond

uct Progr

amme.

eakin

g Up ca

ses

otal raised

In s

cope

Closed

Substantiated

Unsubstantiated

202

,15

256

119

166

2020

,20

273

115

135

2019

179

189

e dat

a in the

se re

por

tin

g per

ds ha

s bee

n upd

ate

d as at 3

1 Dece

mbe

r 2021

al co

ncer

ns ra

ise

d wit

hn th

e rep

ting y

ear

A con

cer

n und

er th

e FCA w

his

tle

blow

ng r

ule

s tha

t is rai

d wit

hn th

e rep

ort

ing ye

ar an

d cons

ide

red w

ith

n the s

cop

e of th

e Spe

aki

ng Up pr

ogr

amme

is rep

res

ent

s all c

ase

s clo

sed w

ith

n the r

epo

rti

ng yea

. Th

is inc

lud

es ca

ses t

hat we

re rai

sed i

n the r

epo

rti

ng ye

ar and i

n prev

iou

s year

ose

d and w

ith su

fﬁc

ent ev

ide

nce s

upp

ort

ing t

he or

ign

al all

ega

tio

Cas

e num

ber

s re

por

ted i

n pri

or yea

rs di

er fr

om th

ose r

epo

rte

d in th

is pe

rio

d due t

o clos

ed ca

ses b

ein

g eit

her r

ecla

ed, b

ase

d on n

ew inf

orm

ato

n, or u

pda

ted

for adminstrative reasons

Dow

nlo

ad ou

r Gro

up Co

de of C

ond

uct a

sc.com/

deofconduct

and vi

st

sc.com/

speakingup

to ﬁnd m

ore ab

t how ou

r Spe

aki

ng Up p

rogr

amm

e work

Fightng ﬁn

ancal crime

Our ambiton

is to tackle some of today’

s most damaging

cri

mes by mak

ing th

e ﬁnancal s

yst

em a host

ile envi

ronmen

for cr

imnal

s and ter

ror

ist

Our Con

duct, Financal Crime & Complian

ce (

CFC

C) te

set

s ou

r ﬁnancal c

rime r

isk man

agem

ent fr

amewor

k. W

safeguard against

money laundering (

AML

), terrorist

ﬁnanc

ng, sanc

tions, fraud and other

isks, applying

core

cont

rols s

uch as cli

ent due

-dilge

nce, scr

eenin

g and

monitorng. In

additon, anti-

ibery and corruption (AB

cont

rols ai

m to prevent c

ollea

gues

, or thir

d part

ies wor

king

on ou

r behal

, fro

m enga

ging in br

iber

ring 2021, 41 pro

cess

es (

repr

esen

ting 7

3 pe

r cent of o

ide

ntﬁed pr

oces

s univer

se wi

thn the O

pera

tiona

l Risk &

chnology F

ramework) w

ere identﬁed as susceptible to

iber

y an

d corr

upti

on-rela

ted r

isk. A

ll proc

esse

s are tra

cked

through enh

anced repor

ting and ﬁrst

- and second-line

governance

for

ums to

mitgate this risk. The Group Risk

ses

smen

t found n

o proce

sse

s or coun

trie

s to be op

erati

at a high r

esidu

al ris

k level; however, 14 count

ries we

identﬁed as

aving a h

igh inherent

risk.

No public legal

cases involvng

allegations of corruption were

bro

ught ag

ainst t

he Gro

up or it

s empl

oyees dur

ing th

e year.

Inte

rnall

, our S

hare

d Investig

atve Se

vice

s (

S) team

cond

ucte

d 6

2 i

nvestga

tions c

lass

ed as ha

ving a

n ABC

nexu

s, wh

ich resu

lted in 1

0 discp

linar

y ca

ses.

A par

ticu

lar focu

s of our ﬁn

ancal cr

ime inves

tgato

y team

s is

the u

se of da

ta anal

ytic

s to ide

ntf

y th

ose clie

s and cas

whi

ch gene

rate th

e great

est ﬁnan

cal crim

e ris

k. In 2021, we

incr

ease

d coor

dinatn

g and str

eamlin

ng the wo

rk car

ried o

by these

indvidual teams. Th

is has strengthened the

second

line o

f defen

ce in sup

port o

f colle

ague

s in busi

ness li

nes and

coun

y te

ams acro

ss th

e Bank

o mitgate the risk of

ﬁnancal crime, particularly laundering

the p

roce

eds of co

rru

ptio

n, in the l

ead-u

p to, dur

ing and af

ter

major polit

cal elections in certain fo

otprint mar

ts, th

Group conducts enhanced monitorng

designed to identf

and inves

tgat

e trans

actio

ns of po

tent

ial conc

ern. I

n 20

enhanced monitorng

was conducted during major elections

hel

d in Ugand

a, Zambia a

nd The G

ambia

. CFCC also

inv

estgated risk

s to

the Group arisng from a number

prominent

ﬁnancal

crime stories in

the press, conducting

invest

gatio

ns prom

pted by eve

nts s

uch as th

e FinCEN Files

and Pan

dora Pape

rs le

aks

, amon

g othe

rs.

Pillar 2: Ope

ration

conti

nued

Strategic

report

Standard Chartered

– Annu

al Rep

ort 202

Pillar 2: Ope

ration

conti

nued

In 2021, CF

CC addres

sed n

ew and eme

rging s

anctio

ns rel

ated

to deve

lopme

nts i

n both B

elar

us and A

fghani

stan

. CFCC also

incorporated numerous addit

onal sanctioned parties under

existng sanctions programmes i

nto our control processes.

The Group continues to

develop its Sanctions Compliance

Progr

amme w

ith the a

im of ens

urin

g that th

e progr

amme is

sustainable and

able to adapt to

the ev

lving sanc

ions

risks

tha

t the G

roup fa

ces.

With

n our CPBB s

egme

nt, we are c

ontin

uous

ly investn

in pro

duct s

ystem

s upgr

ades to e

nhanc

e our cap

abiltie

wit

h resp

ect to f

raud de

tect

ion, an

d embe

d prevent

ative

cont

rols a

cross n

ew prod

uct sale

s and clie

nt tran

sact

ions

e frequently inform and alert clients about potential fraud

thr

eat

s and ha

ve robus

t contro

ls and p

roces

ses in p

lace to

help clients ident

y false actors and alert us

sho

uld

they

encounter an

y phishng or

fraudulent transaction attempts.

e have in

vested signﬁc

antl

y to

ensu

employees

are pr

oper

ly equ

ippe

d to comb

at ﬁnanc

al crim

e. In 20

21,

6 per cen

t of colle

ague

s compl

eted ﬁn

ancal cr

ime

e-le

arnin

gs whi

ch cover ABC

, AML

, sanc

tions a

nd fra

ud topi

and t

his was su

ppor

ted by a G

roup-w

ide com

munica

ton

camp

aign, ‘

The w

hole s

tor

’

, which ex

tende

d our a

warenes

rais

ng activties.

ABC-related inte

rnal in

vestgat

ions

otal raised

In s

cope

Closed

Substantiated

Unsubstantiated

202

2020

2019

e dat

a in the

se re

por

tin

g per

ds ha

s bee

n upd

ate

d as at 3

1 Dece

mbe

r 2021

al co

ncer

ns ra

ise

d wit

hn th

e rep

ting y

ear cl

sif

ed a

s hav

ing a

n ABC n

exus

clud

es co

ncer

ns r

aise

d wit

hn t

he rep

tin

g year an

d con

sid

ere

d wit

hn th

e scop

e of G

rou

p Inves

tig

ato

n Sta

ndar

is rep

res

ent

s all c

ase

s clo

sed w

ith

n the r

epo

rti

ng yea

. Th

is inc

lud

es ca

ses t

hat we

re rai

sed i

n the r

epo

rti

ng ye

ar and i

n prev

iou

s year

Clos

ed an

d wit

h suf

ﬁcen

t evi

denc

e sup

por

tin

g the o

rig

nal a

lleg

ati

on(s

)

For those in

high-risk roles and

unctions, addit

onal targeted

ABC t

rainng

, mast

erclas

ses an

d for

ums wer

e held to d

eepe

under

standing. W

e also sh

ared our Supplier Char

ter

, which

set

s ou

t our exp

ecta

tions a

nd minmu

m stand

ards re

late

d to

ABC

, wit

h more t

han 12,10

0 suppli

ers an

d third p

arti

es acro

55 m

arke

In add

iton to i

nter

nal trai

nng, we are t

akin

g our con

trib

uton

beyon

d our bu

sines

s and pa

rtn

ering w

ith gover

nme

nts

reg

ulato

rs an

d othe

r global b

ank

s to buil

d a frame

work to

enab

le coo

perat

ion and t

wo-wa

y commu

nicato

n on ﬁnan

cal

crime.

These ‘

public

–pr

ate partnerships’ incl

ude in

tiatves

with the International Center for Missng &

xploited Children

whi

ch focus

es on t

he use of c

ypto

ass

ets i

n the tr

ade of chi

exp

loitat

on and ab

use ma

teri

al; the Nat

ional Cybe

r Foren

sics

and T

rainng Alliance which assist

s law enforceme

nt in

identf

ying

sign

ﬁcant organised groups

engage

d i

n business

ema

il compro

mise s

cheme

s; and US Cu

stom

s and Bor

der

Prot

ectio

n which fo

cuse

s on econ

omic s

ecur

, trad

e secu

rit

forc

ed lab

our and o

ther r

isk are

as, s

uch as T

rade B

ase

Money L

aundering. These partnerships a

re producing

mater

ial new insghts about vario

us crimnal t

ypologie

s and

adva

nces in h

ow we collec

tivel

y comba

t ﬁnancal c

rime in a

increasng number

of jursdictons, includng

Singapore, South

rica, t

he UK an

d the US

Thro

ugho

ut 2021, we als

o enga

ged wi

th pe

ers in co

ntri

butn

to th

e ongo

ing dialo

gue to a

dvance e

ffe

ctive

ness in

combating

ﬁnanca

l crime throug

h our activ

e particpatio

n in

sever

al of the l

eadin

g indus

y grou

ps, in

cludn

g W

olf

sber

Mad

ison G

roup an

d UK Financ

e. W

e also p

art

icpate

d in

dis

cusso

ns and fo

rum

s with m

any exter

nal th

ought l

eade

includng

he W

ld E

conomic Forum’

s Partnering A

gainst

rru

ptio

n Init

ati

ve (P

In 2022

, we will co

ntinu

e to adap

t our con

trol

s to emer

ging

thr

eat

s by ensur

ing we ha

ve highl

y train

ed and ex

per

ience

emp

loyees wor

king w

ith new t

echn

ologi

es to det

ect any

abu

se of th

e ﬁnancal s

yste

m. W

e w

ill also co

ntinu

e to par

tner

wit

h, and e

ducat

e, pee

r bank

s and clie

nts i

n the de

tecti

and co

ntrol o

f ﬁnanca

l crime r

isk

For m

ore v

ist

c.com

/ﬁghtngﬁnancalcrime

Respec

ting human right

e are co

mmitt

ed to re

spe

cting hu

man ri

ghts a

nd use

pro

cess

, govern

ance and d

ue dilge

nce to a

void inf

rnge

ment

and co

mplict

y in t

he inf

rnge

ment

s of ot

her

s, whe

ther i

n our

rol

e as an emp

loyer

, as a p

rocur

er of go

ods and s

vic

es, or a

a prov

ider of ﬁn

ancal se

vice

e re

cognis

e that o

ur foo

tpri

nt and su

pply ch

ain give us t

opp

ort

unit

y to rai

se awar

enes

s of hum

an right

s and m

oder

sla

ver

y in a wid

e range o

f market

s and i

ndust

res

r Positon S

tate

ment on H

uman Ri

ghts o

utlin

es our

approach,

reﬂecting frame

works includ

ng the Internationa

Bill o

f Human R

ight

s, th

e UN Gui

dng Prin

cples an

d the UK

dern S

laver

y Act

. This i

s embe

dded a

cros

s a range of

inte

rnal p

olice

s and ris

k mana

gemen

t fram

ework

s, inc

ludng

our Group Code of Conduct

and Supplier

Chart

Our Modern Slaver

y Statement, approved b

y the Board,

det

ails th

e actio

ns we are ta

king to t

ackl

e mode

rn sla

ver

and h

uman tr

afﬁck

ng in our b

usine

ss and o

perat

ions

In 2021, we co

mmis

sone

d an exter

nal con

sulta

ncy to

revi

ew our hum

an rig

hts p

ractice

s and, fo

llowin

g their

recommendation, we

dated our

E&S risk assessment

pro

cess

. W

e now re

quire ad

diton

al due dil

gence ch

eck

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

Stakehold

ers and responsi

blites

Sus

tainable an

d resp

onsib

le busin

ess

contin

ued

for those clients identﬁed as

aving a hei

ghtened modern

slaver

y risk. A human

right

s special

st consultancy database

was es

tabli

shed t

o assi

st in cond

uctin

g this du

e dilgen

ce and

to support clients to implement

corrective action plans when

human rights allegations are

ﬂagged. W

e also produced

guid

ance fo

r client

s to su

ppor

t the deve

lopm

ent of th

eir own

human righ

ts polices and proce

dures.

With

n our sup

ply cha

in, we prov

ided t

rainng an

d inter

nal

communicat

ons to raise

arenes

of modern slavery

across all

suppl

chain categor

y managers and c

ont

rac

owne

. Mode

rn sla

ver

y ris

k is now hig

hlghte

d at the

vendor onboardi

stage for all hig

h-risk ca

egories, and

Procu

reme

nt Cate

gor

y Pla

ns have b

een en

hance

d for all

supplier ca

tegories found to have

heightened risk

, i

clud

ng

ofﬁce ser

vices

and supplies, propert

, human resourc

bankin

g operations ser

ices, marketing and ad

vertisng

ser

ices

, tech

nolo

gy hard

ware, and t

eleco

ms and n

work

in specifc identﬁed countries. For those suppliers determined

by our in

tern

al mod

ern sl

aver

y ri

sk revi

ew to requ

ire addi

tonal

due d

ilgence a

s a condi

ton to co

ntinu

e with t

he supp

lier

engagement, on-site audi

ts may also be conducted.

o promo

te hum

an right

s in ou

r work

force, we u

pdate

our H

uman Ri

ghts Po

siton S

tatem

ent to in

corp

orate n

amewor

ks and p

ractic

es rela

ting to t

he hum

an righ

ts of

our e

mployee

s. W

e al

so upd

ated o

ur Supp

lier Cha

rter t

encourage our suppl

ier

s to

promote fair pay practices

withn

the

ir work

force, i

ncludn

g the deve

lopme

nt of th

eir own

understanding o

f liv

ng wage

Read our

dern Slavery Statement at

sc.com/

modernslavery

Read our

Hum

Right

Positon Statement

sc.com/

positonstatements

Managing our en

vironmental foot

e are c

mmitted to

improvng

environmental

perf

ormance and redu

cing the direct environmental imp

act

of ou

r branch

es and o

fﬁces

. T

o d

o this

, we mea

sure an

man

age ene

rgy and wa

ter ef

ﬁcenc

, and o

ur GHG e

miss

ons

clo

sely

, veri

yng ou

r per

form

ance th

rough t

hird-par

assu

rance.

e als

o mea

sure th

e amou

nt of non-h

azardo

us wast

e our

branches

and ofﬁces genera

te and recycle.

e do not

pro

duce or h

andle, a

nd ther

efore d

o not rep

ort i

nfor

maton

on, m

ater

ial qua

ntite

s of hazar

dous wa

ste.

Pillar 2: Ope

ration

conti

nued

Annual energy use of our property

(

2021 Act

ual

2020 T

arget

200

185

494



Since 2008

se st

udy

WELL

alth

afe

Our engagement with

colleagues highl

ghted a level

uncert

ainty and apprehe

nsion regarding retur

ning to the

ofﬁce due to

the ongoing pandemic.

o rea

ssu

re ou

r colle

agu

es, c

lien

ts an

d the b

road

com

muni

ty t

hat o

ur of

ﬁces an

d bran

che

s are he

althy

and safe, we have achieved WELL

ealth-Safet

y R

ing

certifcation for our top

45 build

ngs based on headcount,

whi

ch ho

use ove

r 65,00

0 coll

eag

ues (

70 per ce

nt of

our Group

)

The WELL Health-Safet

y Rating is an e

idence-base

externall

y v

rifed cer

tifcati

on which focuses on

operational

polices, mainte

nance p

rotocols, sta

keholder

engagement and e

mergency plans to add

res

a post

VID

19 environment. WELL Health-Safet

y certif

cation

is is

sue

d by the I

nter

nat

ion

al WELL B

uild

ng Ins

tit

ute

(IWBI).

Strategic

report

Standard Chartered

– Annu

al Rep

ort 202

Pillar 2: Ope

ration

conti

nued

e ha

ve meas

ured an

d redu

ced ou

r GHG em

isso

ns sinc

2008

. Our S

cope 1 a

nd 2 emis

son re

ducti

on targe

t has b

een

valida

ted by th

e Scien

ce Bas

ed T

arget

s inti

atve (SBT

i) as

bei

ng in line w

ith a well-b

elow t

wo deg

rees C

elsiu

s scen

ario.

Thro

ugh ou

r Sust

ainablit

y A

spira

tons

, we have s

et more

ambi

tous t

arget

s to ach

ieve net zero e

miss

ons and e

nsure

we onl

y consu

me ren

ewable en

ergy ac

ross o

ur por

tfol

io by

2025. In p

art

ner

ship wit

h our lo

ng-ter

m strat

egic re

al esta

sup

plier

s such a

s CBRE and J

LL, we are c

ontin

ually rev

iewng

our d

irect f

uels

, on-si

te renewa

ble ene

rgy so

urces an

con

stant

ly improv

ng our f

aciltie

s to del

iver the e

fﬁcen

impr

ovement

s ne

eded a

cross o

ur prop

ert

ies to m

eet th

ese

challenging t

argets

In 2021, en

ergy a

nd emis

sons r

educt

ions in

tiat

ves inclu

ded

cle

an power p

urcha

se agre

ement

s, wa

ter re

cyclin

g, sol

roo

fto

ps and on-

site was

te comp

ostin

g. T

ogeth

er wit

h a

5 per c

ent red

uctio

n in our re

al esta

te por

tfo

lio, the

se dire

inti

atves r

educe

d our CO

emi

sson

s by 27 per ce

nt, an

our e

nerg

y consu

mptio

n by 15 per ce

nt year

on-year to

183 GWh. Specifcally

, inv

estm

ent i

n energy-efﬁcent products

acco

unte

d for 11 GWh of t

his red

uctio

n, resu

lting i

n a lower

car

bon and m

ore ef

ﬁcent po

rtf

olio.

ater availablit

y remains a growing challen

ge in man

y of

ourm

arket

s. Al

thou

gh we did no

t face any is

sues s

ourcin

pot

able wat

er in 2021, we co

ntinu

e to take a sus

tainab

andre

spon

sible a

pproa

ch to man

aging wat

er acro

ss th

Gro

up and h

ave improve

d mea

surem

ent of th

e por

tfoli

o by

10p

er cent

e are co

mmitt

ed to re

ducin

g waste in a

ll its f

orms a

nd sinc

2019

, have b

een co

mmitt

ed to re

ducing wa

ste to 4

0 kilo

grams

per e

mployee p

er year, and rec

yclin

g 90 per ce

nt of our wa

ste

by 2025. Each ye

, we pr

event mor

e than 1 mi

llon disp

osab

cups g

oing to l

andﬁll an

d are prou

d to ha

ve now cert

ed 103

prop

ert

ies as ‘sin

gle-u

se-pl

astic f

ree’

. N

on-rec

yclabl

e waste i

sen

t for ene

rgy ge

nerat

ion or com

post t

o limt our i

mpact o

landﬁll

ere

ossible.

ring 202

2, we wil

l intiat

e a new T

rue Zero Waste

certif

cation pro

gramme in our Changi Busine

ss Park campus,

Sing

apor

e. T

ue Zero W

ste cer

tif

es 9

0 per cen

t of waste

dive

rted f

rom la

ndﬁll or in

cnerat

ion and w

ill req

uire a

signﬁ

cant step up in w

ste management a

voi

dance.

Thi

s will be in a

ddito

n to cer

tif

yn

g more si

ngle-u

se-pl

asti

ee buil

dngs an

d reduc

ing pap

er cons

umpt

ion glob

ally

r repor

ting c

rite

ra set o

ut the p

rincp

les and m

etho

dolo

for m

easu

ring o

ur emis

sons; a

nd our S

cope 1 an

d 2 emis

sons

as wel

l as water an

d waste d

ata, ar

e indep

enden

tly a

ssure

by Global Documentation.

Read the

princples and methodology for

measur

ing

our

environment data

sc.com/

vironmentcritera

Read the

indep

endent

environment assurance

sc.com/

vironm

entalassurance

Our Su

stainablit

y Network

o fur

ther e

mbed o

ur sus

tainab

lit

y ambit

ons, i

n 20

1 we

cre

ated a co

lleag

ue Gl

obal Su

stain

ablit

y Net

wor

k to sh

are

ins

ghts a

nd bes

t practi

ces abo

ut clim

ate is

sues w

ithn our

mar

kets

. Now wit

h over 1,

200 mem

ber

s globa

lly

, me

mber

are invt

ed to re

gula

r virt

ual tow

nhall even

ts to l

earn a

bout

climate, sust

ainablity and th

e wider ESG agend

r 20

1 Glob

al Lear

ning W

ek also c

hampio

ned

sustainablit

. Thro

ugh 12 live

ustainablit

y ev

nts acros

s four

days, we engaged more

than 7

,000 c

olleagues in sessions

rang

ing fro

m our su

stain

able ﬁnan

ce prop

osit

ons to o

ur net

zero ap

proach

, the s

cience b

ehind c

limate c

hange t

o our

approach to

carb

fsetting. Colleagues who particpated

in over fo

ur hou

rs of le

arni

ng were gi

ven the op

por

tunit

y t

comp

lete a s

hort a

sse

ssme

nt to att

ain a cer

tif

cati

on linked

dire

ctly t

o their in

dvid

ual pe

rfor

mance r

eview. More th

0

colleagues completed this course and c

ertif

ca

ion.

In 2022

, we inte

nd to con

tinue t

o grow our S

ustain

ablit

Net

work and introd

uce a global sustainablit

y learnin

pro

gramme o

n the B

ank

’s diSCover pl

atfo

rm. In a

dditon

we will b

uild on a p

ilot car

ried o

ut dur

ing 2021, an

d roll ou

t a

global dig

tal solution to enable

colleagues to ana

yse a

red

uce th

eir carb

on foo

tpri

nt bot

h at home a

nd at wor

se st

udy

Sierr

a Leone solar

Va

rray

rin

g 2021, ou

r Sier

ra Leo

ne Pro

per

ty t

eam i

nsta

lled m

ore

an 300 s

ola

r phot

ovolt

aic (PV

) pan

els on t

he ro

of of

our headquarters buildng

in Freetown. The

installaton

is t

he lar

gest o

f its k

ind i

n the co

unt

, and c

urr

entl

pro

duc

es mor

e dire

ct powe

r than t

he bu

ildn

g cons

ume

xces

s power i

s exp

ort

ed to t

he loc

al gri

d, con

tri

butn

g to

decarbonisaton of

cit

y’

s power supply

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic report

Stakehold

ers and responsi

blites

Sus

tainable an

d resp

onsib

le busin

ess

contin

ued

Regulators

d gove

rnm

Socie

e aim to create more in

clusve economies by

sharing our

skills a

nd expertise and dev

eloping

communit

y programm

es that transfo

rm lives.

Pillar 3: Commun

ites

2021 Sustainablit

Aspirat

ons: Communites

Community engagement



Status

Progre

Inves

t 0.75% of pr

ior ye

ar ope

ratin

g proﬁt (PYOP) in

our communites

Ongoing

In 2021, $

9 m

illon co

mmun

y expe

ndit

ure, w

hich

rep

rese

nts 3

% of PY

Rais

e $75 mil

lon for Fu

tur

emaker

s by Sta

ndard

Chartered

Jan 20

19 –

c 202

In 2021, $

14 mill

on was con

tri

bute

d thro

ugh

fundraisng

and donations b

y the Group,

taking the

tot

al fro

m 2019 to 2021 to $

64 m

illon

Educ

ation: Re

ach 1 mil

lon gir

ls and yo

ung wom

through G

oal

Jan 20

06 –

c 202

In 2021, 8

,014 gir

ls par

ticp

ated i

n Goa

l. This b

rin

e total r

each f

rom 20

06 to 2021 to 7

35,452 g

irls an

youn

g wome

Emp

loyabilt

: Reach 10

0,000 yo

ung p

eopl

Jan 20

19 –

c 202

In 2021, 6

4 youn

g peop

le par

ticp

ate

d in

emp

loyabilt

y p

rogra

mmes

. This b

rin

gs the t

otal t

03 yo

ung pe

opl

e reach

ed f

rom 2019 to 2021

Entrepreneurship: R

each 50,000 y

ung

people

Jan 20

19 –

c 202

In 2021, 4

808 yo

ung p

eopl

e par

ticp

ated i

entrepreneurship programmes. This brings the

otal

to 62,496 you

ng pe

ople r

each

ed fr

om 2019 to 2021

*In 2021

, this A

spir

aton h

as be

en ame

nded t

o reﬂe

num

ber of yo

ung p

eopl

e reac

hed in

ste

ad of you

ople, m

icro an

d small b

usin

ess

es. T

his is co

nsis

tent

wit

h the m

etho

dolo

gy us

ed in 2019 a

nd 2020.

Inc

reas

e par

ticp

ation f

or emp

loyee vol

unte

eri

to55%

Jan 2020 –

c 202

In 2021, 2

5% of em

ployee

s volun

teer

ed. Th

e pace o

del

iver

ng emp

loyee vol

unte

erin

g cont

inue

s to be

imp

acte

d by CO

D-

19 r

estr

icto

ns.

e continue

to suppor

our communit

es through

Futuremaker

s by

tandard Charte

red, our global intiatve to

tackle youth economic

incluson and enable

the next

gen

erati

on to lea

rn, e

arn and g

row

. In 2021, we c

ontr

ibute

$14 mi

llon to Fut

urem

akers

, inclu

dng don

ation

s from t

Gro

up and f

undr

aisng o

f $1.4 mil

lon fro

m our emp

loyees

and part

ners.

Despite t

he challenging global environm

ent, blendin

face-to-face

interacton with di

gtal delivery method

enab

led Fut

urem

akers pr

ogramm

es to re

ach mo

re than

304

69 young p

eopl

e in 2021. From 2019–2

1, Futu

remaker

has r

each

ed a tot

al of 671,07

0 yo

ung pe

ople a

cross 41 mar

kets

and ra

ised $

64 m

illon.

Goal, our Futuremakers girls’

emp

ment progra

tackle negative gender a

nd social norms, implemented

face-to-face

ses

sions where

ossible

and combined

hese

with a digtal curr

iculum delivered thro

ugh phone mess

aging,

radi

o or onlin

e. In 2021, G

oal rea

ched 89

,014 g

irls an

d young

wome

n. W

e als

o supp

ort

ed the FR

EE (Financal Res

ilence an

Econo

mic Emp

owerme

) Fun

d, led by o

ur Go

al par

tner

en Win, t

o fur

ther l

ong-te

rm invest

ment in t

he econ

omic

emp

owerme

nt of ad

olesc

ent gir

ls and you

ng wome

n who

have

been heavily i

mpacted b

y CO

VID-

Thro

ugh ad

diton

al fun

ding all

ocate

d in 202

0 t

o supp

ort

ID-

19 e

conom

ic recover

y, this yea

r we signﬁcant

scal

ed-up o

ur livelh

ood pr

ogramm

es. O

ur Futu

remaker

emp

loyabilt

y ski

lls pro

gramme, r

each

ed mor

e than 6

500

young people and

entrepreneur

ship

acti

vti

es reached more

tha

n 46

,80

0 young p

eopl

e in 20

ncl

ude

d in th

e year

Achieved

Not achiev

Ongoing aspiraton

n tra

t on tr

ack

Strategic

report

Standard

Charter

– A

nnu

al Rep

ort 202

Pillar 3: Commun

ites

continued

In nin

e market

s, t

he Sta

ndard Ch

arte

red W

en in T

ech

incubators suppor

ted female-led

entrepreneurial teams with

busine

ss managemen

t trainng, mentorin

g and seed fun

ding.

In 2021, we d

elivere

d the s

econd e

diton o

f our v

irtu

Futuremak

ers Forum to create partnerships and opportunites

for young

eople.

Forum engaged more than

1,000

par

ticp

ants f

rom 6

3 market

s inc

ludng b

usine

ss le

ader

s and

pol

icy ex

per

. It resu

lted in a co

llect

ive 1,

800 h

our

s of skill

s and

owled

ge-sh

aring o

n the f

utu

re of work

. Th

e event was an

opp

ort

unit

y for u

s to see

k out be

st prac

tice to su

ppor

t the

livel

ods of

young people and identfy business leader

who a

re commi

tted t

o ensu

ring t

hat the n

ext gen

erati

on is

prep

ared f

or succe

ss. A s

ummar

y o

f lear

ning f

rom th

e Foru

is availa

ble at

sc.com/

FuturemakersForum202

Despite CO

VID-

19 r

strict

s l

imting face-to-

face

volunteering, 25 per cent of emplo

yees volunteered,

cont

ribu

tng mo

re than 3

1,60

0 volun

teer

ing da

ys wit

many c

ont

ributng through

new opportunites for

virt

ual volunteer

ing.

ring 202

2, we wil

l contin

ue to de

liver and e

xpan

Futuremaker

s programmes

, realign our Communit

pirato

ns to reﬂ

ect th

e growth o

f Future

maker

s, lau

nch new

partner

ships

to increase employee

volunteering, release a

Futu

remaker

s imp

act rep

ort an

d host t

he third Fu

ture

makers

Forum, focused on entrepreneurs and liftng particpation.

Rea

d mor

e abo

ut Fut

ure

make

rs by S

tand

ard Ch

tere

sc.com/F

uturem

ers

A full break

down of our

21 fundraisng

and donations will

published

in o

ur ES

G rep

ort

, in Q1 202

2. S

sc.com/ESGreport.

Case study: F

turemak

ers

sha’

stor

wenty-y

ear-old

Aisha lives in

angladesh.

family

rug

gled t

o make en

ds me

, and he

r fath

’

s s

ole in

come w

t enou

gh to p

ay for h

er ed

ucat

ion b

eyond s

econ

dar

y s

choo

Thanks to

Futuremak

ers by Standa

rd Chartered, Aisha

was

abl

e to at

tend a f

ull

y fu

nde

d tech

nical a

nd voc

atio

nal sk

ills

tra

inng p

rogr

amme w

ith a l

ocal s

choo

l. Af

ter c

ompl

etin

g a

-m

onth t

echn

ical co

se, an

d with t

he su

ppo

rt of t

he sch

ool

’s

Decent Employment and

Entrepreneur

ship

Development

am, Ai

sha s

ecur

ed a jo

b as an as

sis

tant t

echn

ican at a

engineerng

ﬁrm.

Thi

s trai

nng en

abl

ed Ais

ha to s

uppo

rt h

er fami

ly af

ter h

fat

her

’s job los

s due t

o COVID-

. T

, Ai

sha dr

eams o

becoming an entrepreneur a

nd running her o

lectronics

op, whi

ch will i

n tur

n supp

t more g

irl

s like her.

r comm

unit

y expe

ndit

ure202

Cash con

ibut

ons

.70

Employe

e time (non-ca

sh ite

)

.41

Gif

ts in k

ind (

on-ca

sh ite

)

Management costs

Levera

Gifts in kind

comprises all non-monetary donations

Leve

rag

e data r

ela

tes t

o the p

roce

s fro

m staf

f an

d oth

er fu

ndr

aisn

g act

iv



.

Standard

Charter

– A

nnu

al Rep

ort 202

Strategic report

Stakehold

ers and responsi

blites

n-ﬁnan

cal

info

aton

ate

men

Thi

s table s

ets o

ut wh

ere shar

ehold

ers a

nd stakeh

olde

rs can ﬁn

d infor

mato

n about key n

on-ﬁnanca

l matt

ers in t

his rep

ort

in com

plianc

e with th

e non-ﬁna

ncal rep

ort

ing req

uirem

ent

s contai

ned in s

ectio

ns 4

4CA a

nd 4

14 C

B of the C

ompa

nies Act

2006. Further disclosur

are available on

c.co

and in our 2021 E

SG Repo

rt whi

ch will b

e publi

shed a

sc.com

esgreport

Q1 2

022

Reporting requirement

ere t

o rea

d mor

e in th

is r

epo

rt abo

ut o

ur pol

ic

es an

d imp

act (

inc

lud

ng ri

licy e

mbe

ddi

ng, d

ue di

lg

enc

e and o

utc

ome

)

Page

Environmental

matters

Risk r

eview and C

apit

al revi

•

oup Chi

ef Risk O

fﬁce

r’s revi

Sustainab

le and resp

onsible

business

•

Sustainable

ﬁnance

•

Man

agin

g enviro

nmen

tal and s

ocia

l risk

•

Responding

to climate

change

•

Sum

mar

y of T

sk Force o

n Clima

te-re

late

d Financ

al Disc

losu

•

Managin

g our en

vironme

ntal footprin

Directors’ report

•

Environmenta

l impact of our

erations

188

Supplementar

ustainablity informaton

•

Environment per

formance data*

451

oyee

Engaging stak

eholders

•

Emp

loyee

•

nder p

ay ga

p and eq

ual pa

Sustainab

le and resp

onsible

business

•

Drivng good co

nduct a

nd ethics

Directors’ report

•

Emp

loyee po

lice

s and eng

agem

ent

185

•

Health and Safe

186

Supplementar

eople

informat

on

446

Human Rights

Engaging stak

eholders

•

Suppliers

Sustainab

le and resp

onsible

business

•

Respecting human

ights

Social matters

Engaging stak

eholders

•

Soci

ety

Sustainab

le and resp

onsible

business

•

Communites

Anti-corruption and bribery

oup Ch

ief Ri

sk Of

ﬁcer

’s review

Sustainab

le and resp

onsible

business

•

Drivng good co

nduct a

nd ethics

•

Fightng ﬁnancal crime

Director

’

s report

•

Politcal donation

181

Descripton of business model

Business model

Non-ﬁnancal

KPIs

oyee

•

Employ

engagement (

eNPS)

•

Gender diverst

in senior roles

•

Female representation

•

rainn

g on ﬁna

ncal cr

ime

•

Recommitment

to the Code of Conduct

Society

•

stain

ablit

y A

spira

tons a

chieve

d or on tr

ack

•

Ene

rgy

, w

ater, waste a

nd emi

sson

•

Communit

y expen

diture

•

Reach of communit

y programmes

Princpal risks and uncertaint

es

Ris

k review an

d cap

ital r

eview

* Vis

t

sc.com/

vironmentcritera

for o

ur car

bon e

mis

son

s cr

iter

a an

sc.com

environmentalassur

ance

for Global Documentation’s

ssurance

atement

of our

ope 1 an

d 2 emi

ss

ons

, and wa

ste a

nd wat

er da

ta.

Hea

th,

lth

lif

ank

lin

empleton

entur

e a

re working with Frankli

n T

empleton, one of

the world’

s largest independent asset managers

to create A

utumn – a dig

tal app to help users

achie

ve their ﬁnanc

al and pers

onal goa

ls.

Autumn, which is i

bated and backed b

SCV

entures, helps customers plan and manage

their ﬁnanc

al and ph

ysical w

ellbeing with tools,

products, and ser

s acr

s al

l asp

ects of their

wealth

, health

and lifest

le.

Rea

d mor

e onli

ne at

.sc

.com

autumn

Standard Chartered

– Ann

ual Rep

ort 202

Strategic

report

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

Underlying versus

statutor

results

Recon

cilati

ons be

twe

en und

erl

ying an

d statu

tor

y re

sult

s are se

t out in th

e table

s below

Oper

ating in

come by client segm

ent

2021

Corporate,

Commercial &

Institu

tonal

Banking

$millon

Consumer

Pri

vate &

Business

Banking

$millon

Central &

other items

(segment

)

$millon

Underlying operating income

8,407

5,733

573

14,713

Restructuring

–

)

(

32)

Other items

–

Statutor

y operating income

8,416

5,733

552

2020 (Rest

ate

Corporate,

Commercial &

Institutonal

Banking

$millo

Consumer

ivat

e &

Business

Banking

$millo

Central &

other items

(

segment)

$millo

otal

$millo

Underlying operating income

,485

,69

589

Restructuring

–

(

13)

Other items

–

(

Statutor

y operating income

,52

5,69

538

14,7

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng; Pr

ivat

e Ban

kin

g and Ret

ail B

ank

ing t

o Con

sum

er, Priv

ate & Bu

sin

ess B

ank

ing

. Fur

the

, c

ert

ain cl

ient

s ha

ve be

mov

ed be

een t

he t

wo new c

lien

t seg

men

. Pri

or pe

rio

d has b

een r

est

ate

Oper

ating in

come by region

2021

Asia

$millon

Africa &

Middle East

$millon

Europe &

Americas

$millon

Central &

other items

$millon

Underlying operating income

10,

2,446

,00

(

14,713

Restructuring

(

(35)

(32)

Other items

–

Statutor

y operating income

0,478

449

1,9

(

199)

,70

2020 (Rest

ate

Asia

$millo

ric

a &

Middle E

ast

$millo

Europe &

Americas

$millo

Central &

other items

$millo

otal

$millo

Underlying operating income

10,

2,36

Restructuring

(2)

–

Other items

)

–

(

Statutor

y operating income

417

14,

754

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Gre

ate

r Chin

a & Nor

th A

sia an

d ASE

AN & S

out

h As

ia to A

sia

. Prio

period h

as been

restated

Underlying v

s statutor

y r

esult

conci

la

tion

Standard Chartered

– Annu

al Rep

ort 202

Strategic

report

Proﬁt before tax

ion

(PBT)

2021

Underlying

$millon

Regulatory

Fine

$millon

Restructuring

$millon

t gai

n on

businesses

disposed

held for sale

$millon

Goodwill

imparment

$millon

Statutory

$millon

Operat

ing income

14,713

–

(32)

–

701

Operating expenses

375)

(62

)

–

(10,

924

)

Operating proﬁt/

(loss

) before

imparment

losses and taxati

4,338

)

19)

–

3,777

Credit imparm

ent

63)

–

(

Other imparment

55)

–

(17)

–

(372)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

–

196

Proﬁt/

(loss)

befor

ation

896

)

(507

)

–

2020

Underly

ing

$millo

Regulatory

Fin

$millo

Restructuring

$millo

t los

s on

businesses

disposed/

held for

ale

$millo

Goodwill

imparment

$millo

Statutor

$millo

Operat

ing income

–

(

–

14,75

Operating expenses

(

,14

–

(

Operating proﬁt/

(loss

) before

imparment

losses and taxati

623

25)

(

–

Credit imparm

ent

(

94)

–

(

31)

–

(2,325)

Other imparment

–

(

–

)

87)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

164

–

151

Proﬁt/

(loss)

befor

ation

508

82)

(

)

1,6

Proﬁt bef

ore taxation (PBT) by client se

gment

2021

Corporate,

Commercial &

Institu

tonal

Banking

$millon

Consumer

Pri

vate &

Business

Banking

$millon

Central &

other items

(segment

)

$millon

Operating income

8,407

5,73

573

14,713

xternal

373

388

14,713

Inter

-s

egment

455

360

15)

–

Operating expenses

(5,278

)

(720)

375)

Operating proﬁt/

(loss

) before imparment

los

ses and

taxation

,12

356

)

338

Credit imparm

ent

(285)

63)

Other imparment

)

–

(

355)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

–

Underlying proﬁt

(loss)

before taxation

,12

1,07

(299)

896

Restructuring

(114

)

(23

58)

(507

)

Goodwill i

mparment

–

Other items

–

(42

)

Statutor

y proﬁt

(loss)

befor

ation

3,0

836

(49

)

Sta

ndard Chartered

– Annu

al Rep

ort 202

Strategic report

Underlying versus

statutor

results

Proﬁt bef

ore taxation (PBT) by client se

gment

continued

2020 (Rest

ate

d)¹

Corporate,

Commercial &

Institutonal

Banking

$millo

Consumer

ivat

e &

Business

Banking

$millo

Central &

other items

(

segment)

$millo

otal

$millo

Operating income

8,4

5,69

xternal

304

795

1,666

Inter

-s

egment

181

,07

)

–

Operating expenses

(

5,003)

)

(90

,14

Operating proﬁt/

(loss

) before imparment

los

ses and

taxation

482

(320

)

623

Credit imparm

ent

,529)

(

)

(

Other imparment

(

16)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

–

164

Underlying proﬁt

(loss)

before taxation

710

(

,508

Restructuring

21)

)

82)

Goodwill i

mparment

–

)

Other items

–

(

Statutor

y proﬁt

(loss)

befor

ation

1,773

1,6

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng; Pr

ivat

e Ban

kin

g and Ret

ail B

ank

ing t

o Con

sum

er, Priv

ate & Bu

sin

ess B

ank

ing

. Fur

the

, c

ert

ain cl

ient

s ha

ve be

mov

ed be

een t

he t

wo new c

lien

t seg

men

. Pri

or pe

rio

d has b

een r

est

ate

Proﬁt bef

ore taxation (PBT) by regio

2021

Asia

$millon

Africa &

Middle East

$millon

Europe &

Americas

$millon

Central &

other items

$millon

Operating income

10,

2,446

,00

(

14,713

Operating expenses

)

(

,62

(1,4

85)

94)

375)

Operating proﬁt/

(loss

) before imparment

los

ses

andt

axat

ion

,67

518

(67

)

338

Credit imparm

ent

(7)

63)

Other imparment

00)

(

18)

(

(355)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

175

–

176

Underlying proﬁt

(loss)

before taxation

,11

856

(720)

,896

Restructuring

(

(25)

(127)

07)

Goodwill i

mparment

–

Other items

–

)

Statutor

y proﬁt

(loss)

befor

ation

830

831

575

(889)

2020 (Rest

ate

Asia

$millo

ric

a &

Middle E

ast

$millo

Europe &

Americas

$millo

Central &

other items

$millo

otal

$millo

Operating income

10,

382

364

Operating expenses

)

(1,683

)

(

19)

(

42)

Operating proﬁt/

(loss

) before imparment

los

ses

andt

axat

ion

,025

681

539

)

,62

Credit imparm

ent

(1,

484

)

(

161

)

(

Other imparment

110

(

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

163

–

Underlying proﬁt

(loss)

before taxation

2,814

386

(

705

)

,508

Restructuring

(

)

(115

)

(

82)

Goodwill i

mparment

–

)

Other items

)

–

(

Statutor

y proﬁt

(loss)

befor

ation

637

(1,

290

)

1,6

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Gre

ate

r Chin

a & Nor

th A

sia an

d ASE

AN & S

out

h As

ia to A

sia

. Prio

period h

as been

restated

Standard Chartered

– An

nual Re

por

t 2021

Strategic

report

Return o

n tangible e

quity (Ro

TE)

2021

$millon

2020

$millo

verage parent compan

y Shareholder

s’

Equit

46,3

45,0

Less Preferenc

e share pr

emium

(

94)

(

Les

s A

rage in

tang

ble as

set

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(

5,0

)

verage Ordinar

y Shareholders

’ T

angible Equit

590

Pro

ﬁt/

(lo

ss) for th

e per

iod at

tri

but

able t

o equ

ity h

olde

2,3

751

Non-control

ling interests

(27

)

vden

d paya

ble on pr

efer

ence sh

ares a

nd A

T1 cl

assi

f

ed as e

quit

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)

Pro

ﬁt/

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ss) for th

e per

iod at

tri

but

able t

o ord

inar

y sh

are

hold

ers

1,9

329

Items nor

malised:

Regulatory Fine

(

Restructuring

507

382

Goodwill I

mpairment

–

489

Net (g

ains

)

losses on sa

le of

Businesses

ax on n

orma

lise

d item

(87

)

Underlying proﬁt

for the period attributable to ordinary shareholders

2,36

,14

Underlying Return on T

angible Equity

6.0

3.0

atu

tor

y Ret

urn o

n T

angib

le Eq

uit

Year

ly ave

rag

e is com

put

ed a

s an ave

rage o

f the f

our p

rec

edin

g qua

rte

y aver

age

2021

Corporate,

Commercial&

Institu

tonal

Banking

Consumer

Pri

vate &

Business

Banking

Central &

other Items

(Segment)

Underlying Ro

10.

0.5

)

Regulatory Fine

–

(0.

Restructuring

Of w

hich: In

come

–

(

.1)

Of whi

ch: Expenses

.6)

(

3.0)

(

Of w

hich: Cre

dit imp

arm

ent

–

Of w

hich: Ot

her im

parm

ent

0.1

–

(

–

Of w

hich: Proﬁ

t from a

sso

ciate

s and jo

nt vent

ures

–

Net g

ains o

n sale o

f Busi

ness

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0.1

Goodwill i

mparment

–

ax on n

orma

lise

d item

–

0.1

Statutor

y R

(

13.

4.8

2020 (Rest

ate

Corporate,

Commercial &

Institutonal

Banking

Consumer

ivat

e &

Business

Banking

Central &

other Items

(Segment

)

otal

Underlying Ro

(

Regulatory Fine

–

Restructuring

Of w

hich: In

come

–

)

0.1

Of whi

ch: Expenses

)

(

)

Of w

hich: Cre

dit imp

arm

ent

–

)

Of w

hich: Ot

her im

parm

ent

–

)

Of w

hich: Proﬁ

t from a

sso

ciate

s and jo

nt vent

ures

–

Net losses on

sale of Businesses

–

)

Goodwill i

mparment

–

(

)

ax on n

orma

lise

d item

0.1

Statutor

y R

5.2

6.3

(

)

0.9

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng; Pr

ivat

e Ban

kin

g and Ret

ail B

ank

ing t

o Con

sum

er, Priv

ate & Bu

sin

ess B

ank

ing

. Fur

the

, c

ert

ain cl

ient

s ha

ve be

mov

ed be

een t

he t

wo new c

lien

t seg

men

. Pri

or pe

rio

d has b

een r

est

ate

Standard Chartered

– Ann

ual Re

por

t 2021

Strategic report

Underlying versus

statutor

results

Earnings per o

rdinar

y share (EPS)

2021

Underlying

$ millon

Regulatory

Fine

$ millon

Restructuring

$ millon

Proﬁt from

jont v

enture

$ millon

Gains

arisng

repurchase of

senior and

subordinated

liablites

$ millon

Net gain

on sale

businesses

$ millon

Goodwill

imparment

$ millon

normalised

items

$ millon

Statutory

$ millon

Proﬁt f

or the ye

attrib

utable to ordinar

shareholders

2,36

(62

)

(507

)

–

sic – W

ghte

d avera

number of shares

(

millons

)

,10

sic ea

rning

s per o

rdina

share (

cent

)

2020

Underly

ing

$ mil

lon

Regulatory

Fin

$ mil

lon

Restructuring

$ mil

lon

Proﬁt from

jont v

entu

$ mil

lon

Gains

arisng on

repurchase

senior and

subordinat

liablites

$ mil

lon

Net loss

on sale

businesses

$ mil

lon

Goodwill

imparment

$ mil

lon

normalis

items

$ mil

lon

Statutor

$ mil

lon

Proﬁt f

or the ye

attrib

utable to ordinar

shareholders

,141

82)

–

(

)

329

sic – W

ghte

d avera

number of shares

(

millons

)

,16

sic ea

rning

s per o

rdina

share (

cent

)

0.4

Standard Chartered

– An

nual Re

por

t 2021

Strategic

report

An alt

erna

tive pe

rfor

manc

e meas

ure is a ﬁn

ancal me

asure o

f histo

rcal or f

ure ﬁnan

cal per

form

ance, ﬁn

ancal po

sito

n, or

cash ﬂ

ows, o

ther t

han a ﬁnan

cal mea

sure de

ﬁned or s

pecif

e

d in the ap

plicabl

e ﬁnanca

l repor

ting f

ramewo

. The fol

lowing

are key alt

ernat

ive pe

rfor

mance m

easu

res us

ed by the G

roup t

o asse

ss ﬁna

ncal per

for

mance an

d ﬁnanca

l posit

on.

Measure

Deﬁntion

Constant currency basis (

CCY

)

A p

erfo

rman

ce me

asur

e on a cons

tant cu

rre

ncy b

asis i

s pres

ente

d such t

hat co

mpara

tive

riod

s are ad

juste

d for t

he cur

rent ye

ar’s fu

nctio

nal cu

rren

cy ra

te. The f

ollow

ing ba

lance

are p

rese

nted o

n a cons

tant cu

rren

cy b

asis w

hen de

scri

bed a

s such:

•

Opera

ting income

•

Operating expenses

•

Proﬁt b

efor

e tax

•

As or R

isk-weight

ed as

set

Underlying/Normalised

A p

erf

orm

ance me

asu

re is de

scri

bed a

s unde

rly

ing/

orm

alise

d if th

e stat

utor

y r

esult h

as be

adjusted for

restructuring and other i

tems representing pro

ﬁt

or losses of

a capital

nature;

amo

unt

s cons

equ

ent to inve

stm

ent tra

nsac

tion

s dri

ven by stra

tegi

c inten

t; an

d othe

r infr

eque

and/

or exc

epti

onal tr

ansa

ctio

ns tha

t are sig

nﬁcant or m

ater

ial in t

he con

text of t

he Gr

oup

’s

nor

mal b

usin

ess e

arnin

gs for t

he pe

riod

, and it

ems wh

ich man

agem

ent an

d investo

rs wo

uld

ord

inarl

y iden

tf

y se

parat

ely w

hen as

ses

sing p

erf

orm

ance p

erio

d-by-per

iod. A r

econ

cilat

ion

bet

een underlying/

normalised

and statutor

y performanc

e is c

ontained in Note

2 to the

ﬁnanc

al statements. The follo

wing balances a

nd measures

are pr

esented on a

n underlying

sis wh

en des

crib

ed as s

uch:

•

Opera

ting income

•

Operating expense

•

Proﬁt b

efor

e tax

•

Earn

ings p

er sha

re (ba

sic and d

ilute

•

Cost

-to-

income ratio

•

Jaws

•

TE or Ret

urn on t

angib

le eq

uit

Adv

ances-to

-deposits/

stomer

advances-to-deposit

s (

ADR) ratio

The r

atio o

f tota

l loan

s and ad

vances t

o cust

omer

s rel

ative t

o tota

l custo

mer ac

coun

exclu

ding ap

proved b

alan

ces he

ld wit

h centr

al ban

ks, c

onﬁrm

ed as r

epa

yable at t

he po

int

of st

res

s. A low ad

vance

s-to-d

epo

sit

s ratio d

emon

stra

tes th

at cus

tome

r accou

nts e

xceed

cus

tome

r loan

s resu

lting f

rom e

mpha

sis pl

aced o

n gene

ratin

g a high leve

l of sta

ble f

undin

from customers.

Cost-to-income ratio

The proportion of

total operating

expen

ses

to total operating inc

ome.

Cov

er ratio

The r

atio o

f impar

men

t provi

sons f

or eac

h stag

e to the g

ross l

oan ex

posu

re for e

ach st

age.

Cov

er ratio after collateral

cov

er ratio includng collateral

The r

atio o

f impar

men

t provi

sons f

or sta

ge 3 loa

ns and r

ealis

able val

ue of co

llate

ral he

aga

inst t

hese n

on-pe

rfo

rmin

g loan ex

pos

ures t

o the gro

ss lo

an exp

osur

e of sta

ge 3 loan

s yield

Statutor

interest income

divded by av

erage interest ea

rning assets.

Jaws

he dif

fere

nce be

ween th

e rate

s of chan

ge in reve

nue an

d oper

atin

g expe

nses

. Posit

ve jaw

occ

urs w

hen th

e perc

enta

ge chan

ge in reve

nue is h

igher t

han, o

r les

s nega

tive t

han, t

corresponding

rate for operating

expenses.

Loa

n los

s rat

otal c

redit i

mpar

ment f

or loa

ns and a

dvanc

es to cus

tome

rs over a

vera

ge loan

s and ad

vance

to customers.

t tang

ible a

et valu

e per s

hare

Rati

o of net t

angib

le as

set

s (

tal tan

gibl

e ass

ets l

ess t

otal li

ablit

) to th

e numb

er of o

rdinar

shares outstanding

at the end o

f a r

orting

eriod.

Net yie

oss y

ield le

ss ra

te paid

M or Net i

nte

res

t mar

gin

et int

erest i

ncom

e adjus

ted fo

r inte

rest ex

pen

se inc

urre

d on amo

rti

sed co

st liab

lite

s used

to fund the F

inancal

Markets business, divded b

y average i

nterest

-earning assets ex

cluding

ﬁnan

cal as

set

s me

asur

ed at fai

r value t

hrou

gh proﬁt o

r loss

AR per F

TE or R

isk ad

jus

ted

rev

enue per full-time equiva

lent

Ris

k adjus

ted re

venue (R

AR) is deﬁn

ed as u

nder

lyi

ng ope

ratin

g inco

me les

s und

erly

ing

imp

arme

nt over th

e pas

t 12 mon

ths

. RAR i

s then d

ivd

ed by th

e 12 mont

h rolli

ng aver

age

ull-tim

e equ

ivalen

t (FT

E) to d

eter

mine R

AR p

er F

TE.

Rate paid

Sta

tut

y inte

rest e

xpen

se ad

juste

d for in

tere

st exp

ens

e incur

red o

n amor

tise

d cost l

iablit

es

use

d to f

und ﬁn

ancal in

str

ume

nts h

eld at f

air valu

e thro

ugh pro

ﬁt or los

s, di

vde

d by avera

interest b

earing liablites.

RoE or R

etu

rn on eq

uit

The r

atio o

f the cu

rren

t year

’

s p

roﬁt avai

lable f

or dis

trb

utio

n to ordi

nar

y sh

areho

lder

s to th

average ordi

nar

y shar

eholders’ equit

for the reporting period.

TE or Re

tur

n on ord

inar

sharehold

ers’ tangible equit

The r

atio o

f the cu

rren

t year

’

s p

roﬁt avai

lable f

or dis

trb

utio

n to ordi

nar

y sh

areho

lder

s to th

ave

rage ta

ngibl

e equi

, bei

ng ordi

nar

y sh

areho

lder

s’ eq

uit

y les

s the a

verag

e good

will a

int

angbl

e ass

s for th

e repo

rtin

g per

iod. W

here a t

arge

t Ro

TE i

s stat

ed, t

his is b

ase

d on proﬁt

and e

quit

y ex

pect

atio

ns for f

ure pe

rio

ds.

TSR or T

otal shareholder return

e tot

al retu

rn of t

he Gr

oup

’s equ

y (

sha

re pri

ce growt

h and di

vde

nds

) to i

nvesto

rs.

Alternativ

e p

erformance me

asure

Standard Chartered

– Annu

al Rep

ort 202

Strategic report

Viablit

y stat

ement

The d

irecto

rs are r

equir

ed to is

sue a vi

ablit

y sta

temen

reg

arding t

he Gro

up, expl

ainng th

eir as

ses

sment o

f the

pros

pect

s of t

he Gro

up over an app

ropri

ate pe

riod o

f time

and state

whether they hav

e reasonable expectation

that

the G

roup w

ill be ab

le to con

tinue i

n opera

tion an

d meet i

liabl

ites as t

hey fall d

ue.

The d

irecto

rs are t

o also di

sclo

se the p

erio

d of tim

e for whi

they

have ma

de the

sessment

and the reason

they consid

tha

t peri

od to be a

pprop

riate.

In con

sider

ng th

e viablit

y o

f the G

roup, th

e direct

ors

have a

sse

d the key fact

ors

, incl

udng th

e curre

nt and

ant

icpate

d impa

ct of CO

D-

19 likel

y to af

fect t

he Gro

’

bus

ines

s mode

l and str

ategi

c plan, f

ure per

for

mance,

capital adequ

acy

, sol

vency and liqudit

y taking into account

the e

mergin

g ris

ks as we

ll as the p

rincp

al ris

ks.

The v

iablit

y a

sses

smen

t has be

en mad

e over a per

iod of

thr

ee year

s, wh

ich the d

irecto

rs con

side

r approp

riat

e as it

is wi

thn bo

th the G

roup

’s stra

tegic p

lannin

g hori

zon and,

the b

asis u

pon wh

ich it

s regu

lator

y c

apital s

tres

s test

s are

und

erta

ken and is re

prese

ntat

ive of th

e contin

uous l

evel of

regulatory change affecting

the ﬁnanca

l serv

es industr

The directors will

continue to monitor and

consider the

appropriateness of this period.

The d

irecto

rs ha

ve reviewe

d the co

rpor

ate pla

n, the o

utpu

of th

e Grou

’

s f

orma

lised p

roces

s of bu

dgeti

ng and st

rate

gic

plan

ning. Fo

r the 202

2 Corp

orat

e Plan, th

e for

ward-l

ooki

cash ﬂ

ows and b

alance

s conti

nue to in

clude t

he lon

ger

-t

erm

impac

t of C

VID-

, speci

fcally

with regar

ds to expec

ted

cre

dit los

s. The C

orp

orate Pl

an fu

rthe

r inclu

des th

ant

icpate

d impa

ct of glob

al inte

rest rat

es on reven

ues

The c

orpo

rate pl

an is evalua

ted an

d approved e

ach year by

the B

oard w

ith conﬁ

rmat

on fro

m the Gr

oup Chie

f Risk O

fﬁcer

tha

t the Plan i

s aligne

d with t

he Ente

rpr

ise Ris

k Mana

gemen

Framewo

rk and G

roup Ri

sk App

etite S

tate

ment an

d consid

ers

the G

roup’

s f

utur

e projec

tons of p

roﬁtabl

, cash ﬂ

ows,

capital requirement

s and

resources

, l

iqudit

ratios and other

key ﬁnanc

al and reg

ulato

y ratio

s over the p

erio

d. The

corporate plan detai

ls the Group

’s

key performance measures,

of fo

recas

t proﬁt

, CET 1 ca

pital ra

tio for

ecast

, ret

urn on

tan

gible e

quit

y fore

cast

s, co

st to inc

ome rat

io fore

cast

s and

cash i

nvestme

nt proje

cton

s. The B

oard h

as revie

wed the

ongoing performance management process of the Group

by comp

arin

g the sta

tuto

y resu

lts t

o the bu

dget

s and

corporate plan.

The Group perform

enterprise-wide stress test

s using

rang

e of bes

poke hyp

othe

tical sc

enari

os tha

t explo

re the

res

ilence o

f the Gr

oup to sh

ock

s to it

s balan

ce she

et and

business model.

o asse

ss th

e Grou

’

s b

alance s

heet v

ulne

rabilti

es and cap

ital

and liqu

dity adequac

vere but

plausible macro-ﬁnanc

al

scenarios explore shocks that trigger

one or more of:

•

obal sl

owdowns i

ncludn

g rece

ssion

s in Chin

a, Asi

an and

tern e

conom

ies th

at can be ac

ute or m

ore prot

racte

•

Sharp falls i

n world trade

volumes and disrupton to

global

sup

ply cha

ins, in

cludn

g the seve

re wor

senin

g of trad

tensions and rise of

prote

ction

sm.

•

Material and persistent declines in commodity prices

•

Financ

al market vo

latilt

, incl

udng a sh

arp fal

l in ass

pri

ces dri

ven by a drop in r

isk ap

petit

e amon

gst ﬁnan

cal

market par

ticpants

Thi

s year

, t

he pri

mar

y foc

us has co

ntinu

ed to b

e on macr

ﬁnan

cal stre

ss rel

ated t

o the COVID-

19 p

andem

ic. Sc

enari

anal

ysis h

as exp

lored t

he imp

act of new v

iru

s variant

s th

lea

d to fu

rth

er rest

rict

ons and t

ighte

r ﬁnancng c

ondit

ons

across the

Group

’

s footprint mark

s, pa

tic

ularly countries

wit

h lower rat

es of vaccin

aton

The G

roup f

ther p

erfo

rme

d the 2021 Clim

ate Bie

nnal

ploratory Scenario to explore k

ey risks from climate c

hange,

bei

ng tran

siton r

isk of t

he eco

nomy movi

ng away f

rom

car

bon and t

he physi

cal ris

ks of hi

gher glo

bal te

mpera

tures

For t

he Gro

up this Fo

cus

sed on cr

edit r

isk in th

e loan

s and

adva

nces po

rtf

olio to co

rpor

ate and in

stt

ution

al clien

ts as

well a

s per

sonal c

ustom

ers over a t

hirt

y ye

ar time h

orizo

Und

er this ra

nge of s

cenar

ios, t

he res

ults o

f thes

e stre

ss tes

dem

onst

rate th

at the G

roup h

as suf

ﬁcent cap

ital and

liqudi

y to continue as

a going concern and

meet regulator

minmum capital and liqudit

y requiremen

ts.

o assess the Group

’

s busi

ness model vulnerab

il

ties, extreme

and u

nlikely s

cenar

ios are ex

plore

d that

, by des

ign, res

ult in

the G

roup’

s bu

sines

s mode

l no lon

ger bei

ng viab

le the

sce

nario

s have in

clude

d for th

e Grou

p extrem

e geo

polit

cal

ten

sion

s disr

uptng c

apital ﬂow

s with

n the Gr

oup

’s foot

and c

ybe

r secu

rit

y att

acks

. Insi

ght

s from t

hese r

everse s

tres

tes

ts can i

nfor

m strat

egy

, r

isk ma

nagem

ent and c

apital an

liqudit

y planning.

The d

irecto

rs f

urt

her con

sider

ed the G

roup’

s Int

ernal L

iqudit

Adeq

uac

y Ass

ess

ment Pro

cess (IL

AP)

, w

hich co

nside

rs th

Gro

’s liqudit

y p

osito

n, it

s fram

ework an

d whet

her suf

ﬁcent

liqudit

y resources are bein

g maintaned to meet liablites as

they f

all due. Fu

nding an

d liqudit

y wa

s consi

dered i

n the

cont

ext of th

e risk a

ppet

ite met

ric

s, incl

udng t

he ADR an

CR ratios

Fur

the

r inf

orm

ato

n on st

res

s tes

tin

g is pro

vid

ed in t

Risk management

approach

sec

tio

n (pag

es 26

0 and 261).

Viablit

ate

men

Standard Chartered

– Annu

al Rep

ort 202

Strategic

report

The B

oard Ri

sk Com

mitte

e (“BRC

”) exerci

ses over

sight o

beh

alf of th

e Boar

d of the key ri

sks o

f the G

roup and m

akes

reco

mmen

datio

ns to th

e Boar

d on the G

roup

’s Risk A

ppet

ite

Statement. These risks i

nclude, amongst others;

credit, traded,

treasur

, operat

ional and technology

, reputat

ional and

sustainablit

, complian

ce, informaton and c

yber secur

ity

ﬁnan

cal crim

e and mo

del ri

sks

. The BRC f

ther exe

rcises

over

sight over t

he inte

grate

d risk

s of cli

mate, di

gtal as

set

and t

hird par

y which c

ut acros

s all pr

incpal r

isk

The B

RC recei

ves reg

ular re

port

s th

at infor

m it of th

e Gro

’

y risk

s, as w

ell as updates

on the macroeconomic

environment, geo-politcal

utlook, market dev

elopment

and regulatory updates on releva

nt matters. In 20

21, the

BRC ha

d deep

er disc

usso

n on: Blue S

ky T

hinkn

g/ Hori

zon

Scan

ning, t

he Chin

ese ba

nking s

ecto

r and the G

roup’

s ri

management

approach,

Hong Kong

pera

tional Sta

bilty

Issues, Korea Deep Div

e includng the Mortgage P

tfolio,

CCIB Ris

k Deep D

ive, CPBB R

isk Review, CPBB Fraud Ri

sk De

Dive

, Intere

st Rate Ris

k Deep D

ive, Op

erati

onal Resi

lence,

App

roach t

o Cr

ypt

o Ass

ets M

anag

ement

, Thir

d Part

y Risk

Man

ageme

nt wit

h a focus o

n ICS Ri

sks

, Mana

geme

nt, C

ontro

and G

overn

ance of SC PLC, Re

solvab

ilt

, CBE

S Stre

ss T

est

IBO

R T

nsito

n, Saf

y and Se

curi

ty R

isk, UAE Ris

k Review

and a S

tru

ctural F

oreign E

xchan

ge Risk D

eep Di

ve.

sed on t

he info

rmat

on rece

ived, t

he dire

ctor

s’ consi

dered

the p

rincp

al unce

rtain

tes as we

ll as th

e princp

al ris

ks in

the

ir ass

essm

ent of t

he Gro

’ via

blit

, how t

hese im

pact

the r

isk pr

oﬁle, pe

rfor

mance a

nd viab

lit

y of the G

roup a

any specif

c mitgating or remedial act

ions necess

For further details of in

formaton relev

ant to the direc

tors,

sess

ment ca

n be fou

nd in the f

ollowin

g sect

ions o

f the

annu

al repo

rt and a

ccoun

ts:

•

The G

roup’

s Bu

sines

s mode

l (pag

es 18 to 2

1) and Stra

teg

(pa

ges 2

2 and 2

)

•

The Group

’

s current positon a

prosp

ects includ

ng factors

lik

ely to affect future results and dev

elopment

, together

wit

h a desc

ripto

n of ﬁnan

cal and f

undin

g posi

tons ar

des

crib

ed in th

e client s

egme

nt review

s and re

gional

revi

ews (pag

es 26 to 30)

•

An up

date o

n the key ris

k them

es of th

e Grou

p is disc

usse

in th

e Grou

p Chief Ri

sk Ofﬁc

er’s review, foun

d in the

Str

ategi

c Repor

t (page

s 32 to 40

)

•

The B

RC sect

ion of th

e Direc

tor

’

s rep

ort (p

ages 1

23 to 12

)

•

The G

roup’

s Eme

rging Ri

sks

, set

s out t

he key exter

nal

fact

ors t

hat cou

ld impa

ct the G

roup in t

he comi

ng year

(pa

ges 280 t

o 287).

•

The Group

’

s Enterprise Risk Management F

ramework

det

ails how t

he Gro

up iden

tﬁes, m

anag

es and gover

ns ri

(pa

ges 259 to 26

)

•

The Group

’

s Risk proﬁle

provides an analysis

of our risk

exp

osure

s acros

s all maj

or ris

k ty

pes (p

age 26

4 to 287

)

•

The capital

positon of the Group,

regulator

y development

and t

he appro

ach to m

anage

ment an

d alloca

tion of

capit

al are se

t out in th

e Capit

al review (

page

s 288 to 29

)

ving co

nside

red all t

he facto

rs ou

tline

d above, th

e direc

tors

conﬁr

m that t

hey ha

ve a reaso

nabl

e expe

ctatio

n that t

Gro

up will b

e able t

o contin

ue in op

eratio

n and me

et it

liabl

ites as t

hey fall d

ue over the p

eri

od of th

e asse

ssm

ent up

to 31 D

ecemb

er 202

r Str

ate

gic re

port f

rom pa

ges 1 t

o 87 has b

een

reviewed a

nd app

roved by the B

oar

Bill W

inter

Gro

up Chie

f Exe

cutive

17 Feb

ruar

y 202

Suppor

our

colleagu

through

the

menop

ause

e partnered with the F

inanc

al Ser

vices Skills Commisson

in the UK to understand how the menopause impacts

women in the ﬁ

nanc

al ser

vices industr

y and how e

mployers

can pro

vide better suppor

t. More than 100 organisatons

particpated in the UK researc

h project whi

ch revealed that

a lack of dia

logue and support for menopausal employ

negatively impacts the female leadership pipelne

. In response,

we launched a menopause guide for our emplo

yees as well as

dedicated resourc

es through our mental health ap

p, onl

ine

learning platform and emplo

yee assistance provider

Rea

d mor

e onli

ne at

sc.com

/menopause

Standard Chartered

– A

nnu

al Rep

ort 202

Director

s’ repor

roup Chairman’

s govern

ance ov

iew

Board of Direc

tors

Management T

Corporate governance

Dire

ctors’ remuneration repor

181

Other disclosures

191

atem

ent of dir

ector

s’ res

pons

iblite

Directors’ report

Standard Chartered

– Annu

al Rep

ort 202

Standard Chartered

– Ann

ual Re

por

t 2021

Directors’ report

Gro

up Cha

irma

n’

s gove

rnan

ce over

oup Cha

irman

’

ove

“

The Boar

d remai

ned resol

ute on

del

iver

ng our st

tegic ob

ject

ves

through a cul

ture that promotes

transparency

, good conduct

and

tru

”

Dr José

Viñals

Group Chair

man

unda

tion f

or exp

one

ntia

l grow

th and t

o dri

vng p

osit

ve ch

ange i

some of the

world

’

s fastest

-growing

economies. New business models

cre

ate s

hare

hold

er valu

e and pr

ovid

e a bes

-in-cl

ass e

xpe

rien

ce for

r clien

. Alo

ngsi

de thi

s, t

he Bo

ard con

tinu

ed to r

eview, cha

llen

and a

dvi

se ma

nage

men

t on the G

rou

’s tech

nol

ogy an

d inn

ovato

strategy

more broad

The 2

021 Board

and committees’

fectiv

enes

review was

conducted

int

ern

ally, facil

tat

ed by th

e Gro

up Com

pany S

ecre

tar

y, and in

acc

orda

nce wi

th th

e UK Cor

rate G

over

nance C

ode

. The re

sul

wer

e insg

htf

ul an

d were rev

iewe

d with t

he G

overn

ance a

Nominaton Committee

ahead of Board discusson.

Key ﬁnd

ngs

comm

enda

tion

s and an A

ctio

n Plan fo

r 2022 we

re the

n pres

ent

and a

pprove

d. Fur

the

r det

ail is gi

ven on p

age 1

08.

e Boar

d and it

s com

mitt

ees i

nvest

ed tim

e in rev

iewn

g and

app

rovin

g the G

rou

’s Resol

vabil

t

y Ass

ess

men

t Repor

t ahe

ad of

sub

mis

son t

o the B

ank of En

glan

d in Oct

obe

r 2021, wi

th Res

olvab

ilt

rem

ainn

g a focu

s are

a thro

ugho

ut 202

2. Fur

the

r det

ail can b

e fou

in th

e key are

as of B

oard di

scu

sso

n sect

ion of t

his r

epor

t on p

age 9

and i

n the B

oard R

isk Co

mmit

tee r

epo

rt st

art

ing on p

age 12

Stakeholder

engagement is vital

to Board discusson

and

ciso

n-mak

ing. I

n addi

ton t

o our ne

t zero p

athwa

y bein

g prop

ose

to sh

areh

old

ers a

t the 202

2 AGM, we a

re als

o req

uest

ing ap

proval o

our new

director

’ remuneration

olicy

. Foll

owing consultation

with

major shareholders, the R

emuneration Committee reviewed

exi

stn

g pol

icy, conc

ludin

g it rem

ain

s appro

pri

ate to s

upp

ort t

del

iver

y o

f our st

rat

egy, with n

o sign

ﬁcant c

hang

e prop

ose

d to th

over

all str

uct

ure o

r quan

tum o

f the cu

rre

nt execu

tiv

e dire

ctor

s’

rem

une

rati

on. Fur

er det

ail can b

e fou

nd in th

e Remu

nera

tion

mmit

tee r

epor

t on p

ages 1

60 to 16

6. D

urin

g the ye

ar, we held o

ﬁr

st ever AGM o

ffe

rin

g vir

tual p

art

icp

atio

n, wh

ere ou

r shar

eho

lder

wer

e able t

o vote on r

eso

lut

ions a

nd eng

age w

ith th

e Boa

rd. I al

sted a v

irt

ual s

teward

ship e

vent in N

ovemb

er 2021 al

ongs

ide

several

Board colleagues, allowing

us to update insttutional

investors

and s

hare

hol

der re

pres

ent

ative b

odi

es on key ar

eas o

f focu

s for t

ard as we

ll as re

spo

nd to t

heir q

uest

ion

verall

, desp

ite b

eing u

nabl

e to me

et in ou

r key mar

kets t

his ye

e Boar

d has r

emai

ned ac

tive

ly invol

ved by v

irt

uall

y att

endin

subsidary board, committee and management meetings, and

through employ

and other stak

eho

lder

gagement sessions.

od pr

ogre

ss wa

s made t

o enha

nce an

d main

tan ef

ctiv

subsidary linkages through e

vent

as our subsidar

chair

etin

gs, a

s well a

s via f

orm

al rep

ort

ing me

chan

ism

s. In a

ddit

to t

his, w

e cont

inue

d to st

reng

then t

he G

roup’

s co

orat

e str

uctu

through the c

reation of our

consolidated ASE

hub under Standard

Charter

ed Bank (

Sing

apore

) Limted. Further detail on the Bo

ard’

engagement with stak

eholder

can be found on

pages 110 to

115.

e c

onti

nued t

o make g

ood pr

ogre

ss w

ith su

cces

sion p

lann

ing an

evol

utio

n of th

e Boa

rd and it

s co

mmit

tee

s. Ma

ria Ram

os jon

ed th

ard, Au

dit Co

mmit

tee a

nd Bo

ard Ris

k Com

mitt

ee in J

anuar

y 202

and w

as app

oint

ed as a m

emb

er of th

e Remu

nera

tion C

ommi

tte

in Ju

ly 2021

. Dive

rst

y re

main

s key in su

cces

sion p

lann

ing, e

spe

ciall

con

side

rng o

ur bu

sine

, net

wor

k and f

oot

prin

t. Wh

ile ou

r fem

ale

and ethnically

diver

se r

epresentation on the Board

dropp

following

Dr N

gozi Oko

njo-

Iweal

a’s depa

rtu

re las

t year, we rem

ain co

mmit

ted

to ac

hiev

ng ou

r targ

et of at l

eas

t 33 per c

ent fe

male a

nd ou

amb

iton o

f 30 pe

r cent f

rom a

n ethn

ic min

ort

y b

ackgro

und

Fur

the

r deta

il on bo

th Bo

ard ch

ang

es and di

ver

st

y can b

e foun

d in

the Gov

ernance a

nd Nominaton

ommi

tee

report starting on

ge 133

. Aman

da Me

llor l

eft t

he Gr

oup o

n 23 De

cem

ber 2021

ter ne

arl

y thr

ee yea

rs as o

ur Gr

oup C

omp

any Sec

reta

, an

her c

ontributons

have been

greatly ap

preciated,

particularly

navigatng

complex gov

ernance arrangements throug

hout the

pandemic’

s evolution. Scott Corrigan, Global

of Disputes and

Government Inv

estigatons

, has

een a

ointed as

Inter

roup

mpany S

ecr

etar

y u

ntil a p

erm

anen

t succ

ess

or is co

nﬁrm

ed.

2021, a

s wit

h 2020, has be

en an exc

ept

iona

l year. The B

oard r

emai

cau

tio

usly o

pti

mst

ic for t

he fu

tur

e and is c

ommi

tte

d to our s

trat

egy,

r pur

pos

e, and is l

ase

r focu

sed o

n impr

ovng r

etu

rns

Dr José

Viñals

Group Chair

man

2021 ha

s see

n a mixe

d pict

ure in t

erm

s of rec

over

y fr

om th

pandemic across

our markets. The Board

continued to monitor

the impact of CO

VID

, alongside geopo

litcal and

intern

atonal

developments, and sustained the 2

020 appr

ach

to meet

ing

re of

ten, g

iven r

estr

ict

ons on t

rave

l and u

sual m

eet

ing

tter

. This e

nsu

red th

at ef

fec

tive B

oard ov

ers

ight an

d str

ong

corpor

ate gov

rnance were maintaned.

It wa

s clea

r to th

e Boar

d how im

por

tant c

onti

nue

d discu

sso

rev

iew and a

pprova

l of ou

r Cor

pora

te Pla

n and st

rate

gic

priort

ies were,

especiall

y in

ligh

of an ever

-evolving landscap

r over

sight f

ocu

sed o

n driv

ng pr

oﬁtab

lit

y wh

ile con

tin

ung

to streng

then resi

lence

, setting targets that

balanced business

opportunites against risks and

controls. The Board remained

res

olu

te on de

live

rng o

ur st

rate

gic ob

ject

ves t

hrou

gh a cult

ure

that promotes

transparency

, good conduc

t and

ust. The

importance of

resilence

in deliver

ng these objectv

es cannot be

underestimated, with the Board focused on

urther strengthening

r risk a

nd con

trol c

ult

ure wi

th th

e help o

f the B

oard R

isk

, Boar

Financal Crime Risk and Audit committees.

e Boar

d also s

pen

t signﬁ

cant t

ime du

ring t

he ye

ar dis

cuss

ng

the Group’

s sustainablit

y approach. W

e reco

gnise that climate

change is

of the greatest challenges

facing the world today

and apprecia

te the com

plex trade-offs which come

with climate

act

ion

, mean

ing th

ere ar

e no sim

ple an

swe

. The G

roup’

s n

et zero

thway a

nnou

nced i

n the ye

ar was r

eviewe

d and a

pprove

d at

Board le

vel, and

consequently the

roup

has mobil

resources

dil

gent

ly to s

uppo

rt t

hese c

ommi

tme

nts

. W

e p

lan to p

ut th

thway t

o an adv

iso

y vote a

t Stan

dard C

hart

ere

d PL

’s 20

Ann

ual G

ene

ral Me

eti

ng (A

M) in re

cogn

iton o

f how im

por

tant

this is to

our shareholders and other stak

eholder

s. In

additon, the

Bra

nd, V

lue

s and Co

ndu

ct Com

mitt

ee (BVCC) was re

name

d the

Cul

tur

e and Su

stai

nabl

y Com

mitt

ee (

SC) f

ollow

ing a re

focu

s of

its remit. Greater weight has

een g

iven to

environmental, social

and g

overn

ance m

att

ers

, and a

reas o

f dup

licat

on ha

ve be

add

res

sed

. The C

SC ha

s bee

n acti

vely i

nvolve

d in sup

por

tin

e Boar

d and th

e bus

ines

s in re

lati

on to o

ur net ze

ro pro

pos

als.

Fur

the

r deta

il can b

e foun

d in th

e Stra

tegi

c rep

ort o

n page

s 61

to 7

7 and t

he C

SC rep

ort o

n pag

es 130 t

o 132 resp

ect

ivel

The Board has

continued to drive the

transformational agenda.

As t

he G

roup’

s In

novat

ion an

d Digt

isa

ton eve

nt mad

e cle

digtal

transformation is fundamental to establish

ng a solid

Standard

Chartered

– Ann

ual Rep

t 2021

Directors’ report

d of

ector

mmit

e Chai

r show

n in gre

Audit Committee

Board Risk

Committe

Culture and Sustainablit

y Committee

Governance and

Nominaton Committee

ard Fin

anc

al Cr

ime Ri

sk Co

mmi

tte

Remuneration Committee

Committee ke

Dr Jo

sé Viñ

als (

)

Group Ch

airman

Appointed

Oct

ober 20

16 and G

rou

Chairman in Decemb

er 2

016. José was

app

oint

ed to t

he Co

urt o

f Stan

dard

Charter

ed Bank in April 2019

Experien

José has substantive experience

in the i

nter

natonal

regulator

y arena

and

has ex

ceptional understanding

of the

economic

, ﬁnancal and

olitcal dynamics

of o

ur mar

ket

s and of g

loba

l trad

e, and a

deep and br

oad network of decison

-makers

in th

e jur

sdi

cton

s in our f

oot

pri

nt.

Career

sé be

gan hi

s care

er as an

economist and

a member of the faculty

at Stanford U

niversty,

before spending

25 ye

s at the C

ent

ral Ba

nk of Sp

ain,

ere he r

ose to b

e the D

epu

y Gover

nor.

sé has h

eld m

any oth

er bo

ard an

d adv

iso

positon

s, includng Chair of Spain’

s Depo

sit

Guarant

ee Fund, Chair of

the Intern

ational

Relations Committee

at the European

Central Bank, member of the E

conomic

and Fi

nanc

al Com

mitt

ee of t

he Euro

pea

Uni

on, an

d Chai

r of the Work

ing G

roup

on In

sti

tut

onal I

nvesto

rs at t

he B

ank for

Internationa

l Settlements. José jo

ned the

International

Monetar

y F

und (

IMF) in 2

009

and s

tepp

ed d

own in S

epte

mbe

r 2016 to jo

n

anda

rd Char

ter

ed PLC. W

hile at t

he IM

he wa

s the Fin

anca

l Cou

nse

llor an

d the

Dir

ecto

r of th

e Mon

etar

y an

d Cap

ital

Markets Depa

tment,

and w

as responsible

for t

he over

sig

ht and d

irec

ton o

f the IM

F’s

neta

y and ﬁn

ancal s

ect

or wor

k. He w

e IMF’s chi

ef sp

okesm

an on ﬁn

anca

matter

s, includng global ﬁnancal stabilt

rin

g his te

nure a

t the IM

, Jos

é was a

mber o

f the Pl

enar

y a

nd St

eer

ing

Committ

ee of the F

ancal Stabilty

ard, p

lay

ing a key ro

le in th

e refo

of internatonal

ﬁnancal regulation.

External appointments

José is Co-Chair

of t

he Unit

ed Na

tion’s Al

lianc

e of Gl

obal

Investors for

ustainable

Development (

GISD

)

and a b

oar

d memb

er of t

he Ins

tit

ute o

Int

ern

atio

nal Fin

ance (I

IF). He i

s also a

mber o

f the b

oard o

f dire

ctor

s of t

Bretton W

oods Committee, a

ember

e Advi

sor

y C

ounc

il of Cit

UK an

d a boar

mber o

f the S

ocia

l Progr

ess I

nita

tive

Committees

Bil

l Winte

rs (

)

Gro

up Chie

f Exe

cutive

Appointed

Jun

e 2015. B

ill wa

s also

app

oint

ed to t

he Co

urt o

f Stan

dard

Charter

ed Bank in June 2

Experien

ill is a ca

reer b

anker w

ith

signﬁcant frontline global ban

king

exp

ience a

nd a prov

en tra

ck rec

ord of

leadership and

ﬁnancal

success. He has

extensi

perience of working in emergin

mar

ket

s and a pr

oven re

cord in s

pot

tin

g and

nurturing talent.

Career

ll beg

an his c

aree

r wit

h JP Mor

gan,

ere he we

nt on t

o beco

me on

e of it

s top

ﬁve m

ost se

nior e

xecut

ives a

nd lat

er co-

chie

exec

uti

ve ofﬁ

cer at t

he inves

tme

nt ban

k fro

200

4 unti

l he st

eppe

d down i

n 2009

. B

ill wa

inv

ted to b

e a com

mitt

ee me

mber o

f the

Independent Commisson

on Banking,

established in

2010, to

recommend ways to

improve competiton and ﬁnancal stabilt

in ba

nkin

g. Su

bse

que

ntly, he se

ved as a

adviser to the P

arliamentar

y Commisson

on B

anki

ng St

andar

ds an

d was as

ked by th

Court of the Bank

of England to c

omplet

ind

epe

nden

t revi

ew of th

e bank

’s liqu

dit

erat

ions

. In 2011

, Bill f

ound

ed Ren

sha

w Bay,

an a

lternative

asset management

ﬁrm,

ere he wa

s cha

irma

n and CEO. He

stepped down on a

ppointment to the

Standard Char

tered PL

C Board.

Bil

l was pre

viou

sly a n

on-e

xecut

ive di

rect

of Pension

Insurance Corporation plc a

RIT C

apit

al Part

ner

s plc

. He re

ceiv

ed a CBE

in 2013.

External appointments

Bill i

s an

independent non-ex

ecuti

e director of

Nova

rti

s Inte

rna

tion

al AG. Bil

l rece

ntl

chaired the T

askforce on Scaling V

untar

Carbon

Markets.

And

y Half

ord (

62)

Group Chie

f F

inan

c

al Ofﬁcer

Appointed

ly 2014

. And

y was al

app

oint

ed to t

he Co

urt o

f Stan

dard

Charter

ed Bank in July 2014.

Andy has a

strong ﬁnance

background

and

deep experience of

anagi

ng complex

internatona

l businesses

across dynamic

and changing market

Career

dy was ﬁ

nanc

e dire

ctor a

t East

Mid

land

s Ele

ctri

ct

y plc pr

ior t

o joni

dafo

ne in 19

99 as ﬁ

nanc

al dire

cto

r for

dafo

ne Lim

ted, t

he UK o

per

atin

com

pany. Andy w

as lat

er app

oint

ed ﬁn

ancal

director for

odafone’s

Nor

thern E

urope,

Mid

dle Eas

t and A

fri

ca reg

ion, a

nd lat

er th

chi

ef ﬁnan

cal of

ﬁce

r of V

izon Wi

rele

ss in

e US. H

e was a me

mber o

f the b

oard o

representatives of the V

izon

Wireless

Par

tner

shi

p. And

y was ap

poin

ted c

hief

ﬁna

ncal o

fﬁce

r of V

afon

e Gro

up pl

c in

200

5, a po

sito

n he he

ld for n

ine ye

ars

As G

rou

p Chie

f Financ

al Of

ﬁcer at

Standard

Chartered, Andy is

responsible

for Fi

nanc

e, Cor

por

ate T

asu

, St

rate

Group Corporate Development, Group

Inv

estor Rela

ions, P

roper

ty and Supply

Chain Managem

ent functions

External appointments

And

y is Se

nior

Independent Director

and Chair of

the

Audi

t Com

mitt

ee at M

ark

s and Sp

enc

oup pl

c. He i

s als

o a tru

ste

e of the

Standard

Chartered Foundation.

Bil

l Wint

s lea

ds th

Management T

eam

dy Ha

lfor

d als

o sit

s on th

Management T

eam

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

Board of

Director

guib Kh

era

j (57)

Deput

y Chairm

Appointed

Januar

y 2014

and Deput

Chairman in Decemb

er 2

016. Naguib

was a

ppoi

nte

d to the C

our

t of St

anda

Charter

ed Bank in April 2019

Experien

Nag

uib has sign

ﬁcant banking

and ﬁnance exper

ience.

Career

Naguib began his

career at Salomon

Bro

the

rs in 1

986 an

d went on t

o hol

d seni

positons at R

ert Fleming,

arclays,

JP M

organ C

azen

ove and La

zard. O

ver t

cou

e of 12 yea

rs at B

arcl

ays

, Nag

uib se

ved

as group ﬁnance director and vice-ch

airman

and i

n vario

us bu

sine

ss le

ade

rsh

ip po

sito

in w

ealth management,

insttutional asset

management and in

vestment banking.

guib wa

s also a B

arcl

ays’ n

omi

nate

non-executive

director of ABSA

Group

in S

outh A

ica an

d of Firs

t Car

ibb

ean

Int

ern

atio

nal B

ank

. He als

o ser

d as chi

exec

uti

ve ofﬁ

cer of J

P Morg

an Caz

enove.

Naguib is

a former non-executive

director of

NHS E

ngla

nd and s

ved a

s a sen

ior ad

vis

to H

er Maj

est

y’s Reven

ue and C

ust

oms

and t

o the Fin

anca

l Ser

ices Au

tho

rit

y in

e UK

. He als

o ser

d as a me

mber o

f the

investment

committe

of the W

ellcome T

rust

and t

he Fina

nce C

ommi

ttee o

f the O

xfo

Universt

y Press.

External appointments

Naguib is Chairman

of Rot

hes

ay Li

fe, a sp

ecia

lst p

ensi

ons

ins

urer a

nd a me

mber o

f the Fin

ance

Committee of the

Universty of Cambridge.

He i

s also C

hair

man of Pe

ter

shil

l Part

ner

s plc

and an

independent board member of

Gavi, The V

cine

Allianc

e. Nagu

ib spends

a sub

sta

ntial a

mou

nt of hi

s time a

s a sen

ior

adviser to the A

ga Khan Development

two

rk an

d ser

s on the b

oar

ds of

var

ious e

ntit

es w

ithn i

ts ne

work

Committees

y Huey Evans

, CB

E (

67)

Independent Non-Executive Dir

ctor

Appointed

ril 201

5. G

ay was a

ppoi

nte

to t

he Co

urt o

f Stan

dard Ch

art

ere

d Bank

in April 2019

Experien

ay ha

s exte

nsi

ve ban

king a

ﬁnancal ser

vices exper

ience with signﬁcant

commercial

and UK regulator

and

governance expe

rience.

Career

ay sp

ent over 3

0 year

s wor

kin

withn

the ﬁnanca

l services industry

, the

intern

atonal capital markets and with the

ﬁnancal

regulator.

ay spent

seven years

wit

h the Fi

nanc

al Ser

ice

s Autho

rit

y f

rom

98 to 200

5, wh

ere sh

e was dir

ecto

r of

market

s divsion, capital markets se

ctor

leader

, with responsiblity for establish

ng a

market

facing divsion for the

super

vison of

market infras

tructure, oversigh

of market

conduct and

developing mark

s policy

From

2005 to 2008, Gay held

a number

of ro

les a

t Citb

ank

, incl

udng h

ead o

governance,

Cit Alternati

e Investments,

EME

, bef

ore jo

ning B

arcl

ays C

apit

al wh

ere

e was vi

ce chai

r of inves

tme

nt ban

kin

g and

investment

anagement. She w

previousl

a no

n-exec

uti

ve dire

ctor a

t A

iva pl

c, th

London Stock

xchange

roup

plc and Itau

BBA In

ter

nat

iona

l Plc. I

n 2016, s

he rec

eive

an OB

E for s

vic

es to ﬁn

anca

l ser

ices

and d

iver

st

y and a C

BE for s

ces to t

eco

nomy a

nd phil

ant

hropy in t

he Q

ueen’s

Birthday Honours list 20

21.

External appointments

y is Cha

ir of th

London Metal

xchange

, a non

-executive

dir

ecto

r of Co

noco

Phill

ps and I

HS Mar

kit

and a n

on-e

xecut

ive me

mbe

r of th

e HM

rea

sur

y b

oard

. Ga

y also s

s on the p

ane

of s

enio

r adv

iser

s at Ch

ath

am Hou

se and

e boar

d of th

e Benj

amn Fran

klin H

ous

Committees

Christne Hod

gson, CBE (

57)

Senior Independent Direc

tor

Appointed

September 2013

and Senior

Independent Director in

Febr

uary 2018.

Experien

hristne has strong business

leader

ship, ﬁnance, accounting and

technology experience.

Career

Christne held a

number of senior

sito

ns at C

oop

ers & Lyb

rand an

d was

corporate dev

elopment director of R

onson

plc b

efo

re jon

ing Ca

pge

min in 19

, wher

e held a va

rie

ty o

f role

s incl

udn

g chief

ﬁna

ncal o

fﬁce

r for C

apge

min UK p

lc an

chi

ef exec

uti

ve ofﬁc

er of te

chn

olog

y ser

ice

for North W

est Europe.

Christne stepped

dow

n as cha

ir for C

apg

emin U

K plc in M

arch

2020. Chr

istn

e was pr

evio

usl

y a tru

ste

e of

MacInty

are

, a non-executive

director of

Ladb

rokes C

ora

l Grou

p plc

, and st

epp

dow

n fro

m the b

oard o

f The Pr

ince o

f W

es’

sine

ss in t

he Co

mmun

y on 9 Feb

rua

2021

External appointments

Chri

stn

e is cha

ir of

Severn T

rent Plc and The

areers &

Enterprise

Company Ltd,

a government

-backed

company

established to help insp

re and

prepare y

oung people for

the world of

work

She is also Senior Pro Chancellor and Chair

of C

ounc

il of Lou

ghb

orou

gh Uni

vers

t

y and

xter

nal B

oard Ad

vis

or to S

pen

cer St

uar

Management Consultants NV

Christne

ceive

d a CBE fo

r ser

ices t

o edu

cati

on in

e Que

en’s New Y

ear H

ono

urs 2020.

Committees

Phil Ri

t (

66)

Independent Non-Executive Dir

ctor

Appointed

y 2020

. Phil w

as als

app

oint

ed to t

he Co

urt o

f Stan

dard

Cha

rte

red B

ank in M

ay 2020.

Experien

Phil has signﬁcant professio

nal

accountan

cy and audit experience,

specif

cally focused in the ﬁnancal

vice

s sect

or. He has a s

tron

g tec

hnica

understanding

and broad

ﬁnancal

and

business experience.

Career

Phil

joned

Pricewa

terhouseCoopers

wC) a

s a grad

uat

e train

ee ac

coun

tant in

197

, be

comi

ng a Part

ner i

n 1986

. He sp

ent

re tha

n 30 year

s as a Pa

rtn

er at P

wC a

was lead

relationshp

Partner for

several

lar

ge F

TSE 10

0 comp

anie

s incl

udn

g a

number of inter

natonal banks and ﬁnancal

ser

vices insttutions. He also

sub

stantial

intern

atonal experience, ha

ving worked

wit

h ban

ks ac

ros

s the Mi

ddle Ea

st and A

sia

in particul

China.

He b

ecam

e Lead

er of P

’s Financ

vice

s As

sura

nce pra

ctic

e in 2007 and w

appointe

d Chairman of its Global Financal

vice

s Gro

up in 2011

. Phil h

as sat o

n a

number of global ﬁnancal ser

vice

dustr

groups, producing

guidelnes for best pr

actice

in governance, ﬁnancal report

ing and risk

management.

External appointments

Phil is a

independent non-ex

ecuti

e director

and C

hair o

f the Au

dit Co

mmit

tee a

Nat

ionw

de Bu

ildn

g Soci

, t

he wor

’

largest buildng societ

Committees

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

David Conner (73)

Independent Non-Executive Dir

ctor

Appointed

nuar

y 20

16. Da

vid w

app

oint

ed to t

he Co

urt o

f Stan

dard

Charter

ed Bank in April 2019

Experien

vid has signﬁcant global and

corpor

ate, in

vest

ment and retail banking

experience, strong risk management

credentials and

an in-depth knowledge

of A

sian m

arke

Career

vid s

pen

t his car

eer in t

he ﬁn

ancal

ser

vices

industr

, liv

ng and

working across

ia for 37 ye

s, fo

r bot

h Citb

ank an

OCB

C Ban

k. He j

one

d Citb

ank in 19

6 as a

man

age

ment t

rain

ee and w

ent on t

o hol

d a

number of Asia-

ased seni

or management

rol

es, i

nclu

dng ch

ief exe

cut

ive of

ﬁcer o

Citbank India and managing directo

and

marketing mana

ger at Citbank Japan,

fore l

eav

ing Ci

tba

nk in 2002

. Dav

id jon

OCB

C Ban

k in Sing

apo

re as ch

ief exe

cuti

ﬁcer an

d dire

ctor i

n 2002. H

e impl

emen

ted

a st

rate

gy of gr

owth a

nd le

d the b

ank

roug

h a per

iod of s

ignﬁc

ant tu

rbu

lenc

David s

tepped down

as chief

executiv

ﬁcer in 20

12 but r

emai

ned a

s a non-

exec

uti

ve dire

ctor o

n the b

oard o

f OCBC

nk, b

efor

e lea

vin

g the gr

oup in 20

14. He

was p

revi

ousl

y a non-

execu

tiv

e direc

tor of

sLog L

td.

External appointments

Dav

id is a t

rus

tee o

shin

gton U

niver

st

y in S

t Loui

s wher

e he

als

o ser

s as ch

air of t

he Me

dical A

ffa

irs

Committee.

Committees

vid i

s also a m

emb

er of th

e Com

bine

US

perations

Risk Committee of

Standard

Charter

ed Bank.

Dr By

ron G

rote (

73)

Independent Non-Executive Dir

ctor

Appointed

July 2014.

Experien

ron h

as bro

ad an

d deep

commercial, ﬁnancal and intern

atonal

experience.

Career

From 1

988 to 20

00, By

ron wo

rked

acr

oss B

P in a vari

y of co

mmer

cial,

erat

iona

l and exe

cuti

ve rol

es. H

e was

app

oint

ed as c

hief e

xecut

ive of B

P Chem

ical

and a m

ana

ging di

rect

or of BP p

lc in 20

and had r

gional

group-level ac

countabilty

for B

P’s act

iv

ties i

n Asi

a fro

m 2001 to 20

06.

ron was c

hief ﬁn

anca

l ofﬁ

cer of B

P plc

om 2002 un

til 2011

, sub

seq

uent

ly se

vin

as B

P’s exec

uti

ve vice p

resi

dent

, cor

por

ate

sine

ss act

iv

ties

, fro

m 2012 to 20

13, wi

respon

siblity for the group

’

s inte

grated

supply and

trading activ

ies,

alternative

ene

rgy, ship

png an

d tech

nol

ogy. Byro

n was

a no

n-exec

uti

ve dire

ctor a

t Unile

ver plc a

Uni

lever NV b

efo

re ste

ppin

g down in 20

15.

External appointments

Byron is Senior

Independent Director at

nglo

erican

plc

and T

sco PLC and is D

epu

y Chair

man o

e supe

vis

y bo

ard at A

zo Nobe

l NV

He i

s also a m

emb

er of th

e Europ

ean Au

dit

Committee Leadership Network.

Committees

smin

e Whit

bre

ad (58)

Independent Non-Executive Dir

ctor

Appointed

ril 201

5. Ja

smin

e was

app

oint

ed to t

he Co

urt o

f Stan

dard

Charter

ed Bank in April 2019

Experien

Jas

mine has signﬁcant

usiness

ader

shi

p exp

erie

nce as w

ell as ﬁr

-h

and

exp

ience o

f ope

rati

ng acr

oss o

ur mar

ket

Career

smin

e beg

an her c

aree

r in

intern

atonal marketing in the technolo

sector and

joned Thomson

Financa

l in

1994, becoming managing directo

the Elec

tronic Settlements Group

. After

completin

g the Stanford Execut

ive P

ogram,

smin

e set up o

ne of O

xfa

m’

s ﬁr

st re

gio

nal

ofﬁces

, managing nine countr

y operations in

est Africa, later becoming internatonal

director responsible

for Oxfam’

s programmes

worldwide. Jasmine

joned Save the Ch

ildren

in 2

05, where

she was responsible for

revital

sing one of

the UK’

s most establ

ished

cha

rit

es. I

n 2010, sh

e was app

oin

ted a

Save the Child

ren’

s ﬁrst internatonal chief

exec

uti

ve ofﬁ

cer, a posi

ton sh

e hel

d unt

she stepped down in

2015. Jasmine stepped

dow

n as a no

n-exec

uti

ve dire

ctor f

rom t

ard of BT G

roup p

lc in D

ecem

ber 201

9 and

as ch

ief exe

cuti

ve of Lon

don Fir

st in M

arch

2021, a b

usi

nes

s camp

aignn

g grou

p wit

h a

mis

son t

o make Lon

don t

he be

st cit

y in t

world to

do business.

External appointments

Jasmine became

Cha

ir of T

vis Pe

rkin

s plc i

n March 202

1 and

is a n

on-exe

cut

ive dir

ecto

r of WPP pl

c and

Compa

gnie F

inan

cère

Richemont SA

Committees

Mar

ia Ramo

s (

63)

Independent Non-Executive Dir

ctor

Appointed

nuar

y 202

1. Mar

ia wa

s also

app

oint

ed to t

he Co

urt o

f Stan

dard

Charter

ed Bank in Januar

2021.

Experien

aria h

as ext

ens

ive CEO,

banking

, commercial, ﬁnancal, policy and

internatonal experience.

Career

Based in South

Africa, Maria

ser

as ch

ief exe

cuti

ve of

ﬁcer of A

BSA G

roup

Lim

ted (p

revi

ous

ly Bar

cla

ys Af

rica G

rou

a diversﬁed ﬁnancal ser

vices group ser

ving

12 Af

ric

an mar

ket

s, f

rom 200

9 to 2019

fore j

onin

g ABSA

, Ma

ria wa

s the gr

oup

chi

ef exec

uti

ve of T

ran

snet L

td, th

e sta

te-

own

ed fr

eigh

t tran

spo

rt an

d logi

stc

s ser

ice

prov

ide

, fo

r ﬁve yea

. Prio

r to her C

car

eer, Mar

ia ser

d for s

even yea

rs as

director

-general of

outh Africa’

s National

reasur

(formerly the Department of

Fina

nce

) w

here s

he pla

yed a key ro

le in

transforming the National

reasur

y into

e of the m

ost e

ffe

cti

ve and ef

ﬁcen

state department

in the post

-apartheid

adm

inst

rat

ion. M

ari

a has se

ved on a

number of in

ternatonal boards, includ

ng

Sanlam Ltd, Remgro Ltd, and SABMiller plc

and m

ore re

cen

tly wa

s a non-

execu

tive

dir

ecto

r of Th

e Saud

i Bri

tsh B

ank an

d Publ

Investment

Corporation Limted before

stepping down i

n December 202

External appointments

Maria is Chair of

gloG

old A

sha

nti Li

mte

d and a no

executive director of Comp

agnie F

ancère

Ric

hemo

nt SA

. She i

s als

o a memb

er of t

oup of T

hir

ty a

nd sit

s on t

he Int

ern

atio

nal

Adv

iso

y Boar

d of th

e Bla

vatni

k Scho

of Government at

xford U

niversty.

Committees

Standard Chartered

– Annu

al Repo

rt 2021

Directors’ report

Board of

Director

Dav

id T

ang (

)

Independent Non-Executive Dir

ctor

Appointed

ne 2019

. D

id was al

app

oint

ed to t

he Co

urt o

f Stan

dard

Charter

ed Bank in June 2

019

Experien

David has deep u

nderstanding

and experience of emerg

ing technologies

in th

e cont

ext of s

ome o

f our key m

arket

most notabl

y mainland China.

Career

vid h

as mo

re tha

n 30 yea

rs of

intern

atonal and Chinese operation

experience in the technology and

venture

capital industr

es, covering venture

inv

estments

sales, marketing,

business

development, research and

development,

and manufacturing. F

rom 1989

to 2004,

David held a

number of senior

positons in

ple, D

igtal Eq

uipm

ent C

orp an

d 3Co

sed in C

hina a

nd acr

oss t

he As

ia Pacif

c

gion

. From 200

4 to 2010, D

avi

d hel

d vario

positons in

Nok

ia,

includng corporate

nior v

ice pre

sid

ent

, chair

man o

f Nok

elecommunicato

ns Ltd and

vice chairman

of N

okia (China) Invest

men

t Co. Ltd

. He wen

on to become

corp

orate

senior vice president,

gion

al pre

side

nt of Adv

ance

d Micro

Dev

ices (AM

), Gre

ater C

hina

, befo

re jon

ing

P Capi

tal (No

kia G

row

th Part

ner

) as

Managing Dire

ctor and P

tner in 201

External appointments

David

joned

tor

s, an e

lect

ric ve

hicl

e star

-up b

ase

d in

Chi

na, in J

une 2021 a

s Chie

f V

alu

e Ofﬁc

er.

vid i

s also a n

on-e

xecut

ive dir

ecto

r of

JOYY I

nc., t

he Chi

nes

e live st

rea

ming s

ocia

media platform listed

on the Nasdaq

Stock Market, and

Kingsof

t Corporation,

a leading Chinese sof

tware and inter

net

vice

s comp

any lis

ted on t

he Ho

ng Kong

Stock Exchange

Committees

Carlson T

ong (

67)

Independent Non-Executive Dir

ctor

Appointed

bru

y 2019

. C

arl

son wa

app

oint

ed to t

he Co

urt o

f Stan

dard

Charter

ed Bank in April 2019

Experien

Carl

son h

as a de

understanding and knowledge

of operating

in mainland China and Hong Kong and

s signﬁ

cant ex

per

ien

ce of th

e ﬁnan

cal

ser

vic

es sector

in those ma

Career

rls

on jon

ed KPM

G UK in 19

comi

ng an Aud

it Part

ner o

f the H

ong Kon

ﬁrm i

n 1989

. He w

as ele

cte

d Chair

man o

KPM

G China a

nd Ho

ng Kong in 20

, b

efor

comi

ng As

ia Pacif

c c

hair

man an

d a

mber o

f the g

loba

l boar

d and gl

obal

exec

uti

ve tea

m in 2009

. He sp

ent ove

r 30

yea

rs at K

PMG and w

as act

ivel

y invol

ved

in th

e wor

k of the s

ecu

rit

es and f

ures

mar

ket

s, se

vin

g as a mem

ber o

f the M

ain

Board and Growth Enterprise Market

Listng

Committee of the

Stock Exchange of

ng Kong f

rom 20

02 to 2008 (Chai

r from

200

6 to 200

). Af

ter r

etir

ng f

rom KPM

G in

2011

, he was ap

poi

nted a n

on-e

xecut

ive

dir

ecto

r of th

e Secu

rit

es an

d Futu

res

Commis

son, becoming its Chair in 2012

unt

il he s

tepp

ed dow

n in Oct

obe

r 2018

. He

over

w a numb

er of m

ajor p

olic

y int

iat

ves

dur

ing h

is ter

m as th

e chai

r incl

udn

g the

introduct

on of the Hong

Kong and

Shanghai

/Shenzhen St

ock con

nect schemes

and t

he mu

tua

l reco

gnit

on of f

und

s bet

the mainl

and and

Hong Kong.

Carlson was

app

oint

ed as a n

on-e

xecut

ive di

rect

or of th

Hong K

ong International

Airpor

Authorit

2017

, a pos

iton h

e hel

d unt

il he st

eppe

d dow

in Ju

ly 2020.

External appointments

Car

lso

n sit

s on

var

ious H

ong Kon

g SAR gove

rnm

ent b

odie

inc

ludn

g as ch

air of t

he Uni

ver

st

y Gra

nts

mmit

tee an

d a mem

ber o

f the Ho

ng Kong

Human R

esource Pla

nning Commisson.

rls

on is al

so an ob

ser

r on beh

alf of t

ng Kong G

over

nmen

t for C

atha

y Pacif

c

Airways Ltd.

Committees

Scott Corrigan (55)

Inte

rim G

roup C

ompany S

ecret

Appointed

Scott was appointed

Int

eri

m Gro

up Com

pany S

ecre

tar

in De

cem

ber 2021

Experien

Scott joned

Standard Chartered

in 2014 a

nd he i

s curr

entl

y Gl

obal H

ead o

Disputes & Government In

vestigatons, Legal.

He previously served as an Enforcement

uns

el for t

he Fe

deral Re

ser

ve B

ank of N

k and as a

n As

sist

ant Di

str

ct Atto

rne

y at

the New

ork Country Distrct Attorney’

Ofﬁce. After leaving government service,

Scott represented banks, other ﬁnancal

insttut

ions and ﬁnancal ser

vices executives

in gov

nment

investgations

and civl

lit

gat

ion. H

e als

o ser

d in a vari

y of

man

age

rial r

oles a

s a law ﬁ

rm pa

rtn

Dr N

gozi Oko

njo-

Iweal

a was ap

poin

ted a

s Dire

ctor-G

ener

al of th

e W

ld T

de Org

aniza

ton o

n 1 Marc

h 2021 and st

epp

ed dow

n fro

m the

ard on 28 F

ebr

uar

y 2021

anda M

ello

r step

ped d

own as G

rou

p Com

pany S

ecre

tar

y on 2

3 De

cemb

er 2021

Contributons of how

each director standi

ng for r

e-election is, and

continues to be, important

to Standard Chartered PL

C’s

long-term

sus

tain

able s

ucce

ss wi

ll be in

clud

ed in t

he No

tice o

f A

M 2022

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Management T

eam

Bil

l Winte

rs (

)

Gro

up Chie

f Exe

cutive

And

y Half

ord (

62)

Group Chie

f F

inan

c

al Ofﬁcer

Simon Cooper (

)

CEO

, Cor

porate, Commercial

& Institu

tonal Banking and

Europ

e & Amer

icas

Sim

on jon

ed th

e Gro

up as C

EO, Corp

orat

& Ins

tit

uto

nal Ba

nkin

g in Ap

ril 2016

. He

assumed additonal

responsiblity for

Commer

cial

anking in March 2018 and

the

Euro

pe & Am

eri

cas re

gion i

n Janu

y 2021.

Career

Simon w

as previously

group

managing directo

r and

hief ex

cutive

of G

lob

al Com

merc

ial Ba

nkin

g at HSB

He h

as ext

ensi

ve exp

eri

ence a

cros

s our

mar

ket

s and cl

ient s

egm

ent

s. Si

mon jo

ned

HSB

C in 1989 an

d hel

d a numb

er of s

enio

roles there

, includng

deput

y cha

irman and

chi

ef exec

uti

ve ofﬁc

, Mid

dle Eas

t and No

rica; c

hief e

xecut

ive of

ﬁcer, Kore

a; and

ad of C

orp

orat

e and Inve

stm

ent Ba

nkin

Singapor

e has sign

ﬁcant exp

erience in

e area

s of cor

por

ate ﬁn

ance, c

orp

orat

banking and tran

saction banking.

External appointments

Simo

n is a me

mber

of t

he adv

iso

y boa

rd of th

e Lee Kon

g China

hool o

f Bus

ines

s and a t

stee o

f the

Standard

Chartered Foundation.

Judy Hsu

(58)

CEO, Con

sumer, Privat

& Busines

s Banking

Judy was appointe

d R

gional CEO

nsum

er, Priva

te & Bu

sine

ss Ba

nkin

g on

1Jan

uar

y 2021 a

nd has b

een a m

emb

er of

e Gro

up Man

agem

ent T

am sin

ce 2018

Career

Prior to her

most recent appointment,

dy was Re

gion

al CEO, AS

EAN & S

out

h As

ia,

a po

sito

n she h

eld f

rom Ju

ne 2018

. Jud

y was

e coun

y CEO fo

r Stan

dard C

har

tere

Sin

gapo

re fr

om 2015 t

o 2018

. She jo

ned

Standard Char

tered in December 2009 as

e Glo

bal He

ad of Wealt

h Mana

gem

ent

and l

ed th

e stra

teg

ic adva

ncem

ent o

f the

Bank

’

s wealth management business.

Pri

or to t

his, J

udy s

pen

t 18 yea

rs at Ci

tba

nk,

where she held

various leadership roles in

Consumer Banking business in Asia.

External appointments

Jud

y is se

ving a

s a

board member of the

Urban Redev

elopm

ent

Authority Singapore as wel

l as W

orkforce

Sin

gapo

re. Sh

e was ap

poin

ted t

o the b

oard

of C

apit

aLand Inv

estm

ent Li

mte

d as an

Independent Director

in June 20

21.

Claire Dix

on (

Group Head of Corporate Affairs,

Brand & Marketin

Claire joned Standard Chart

ered as

oup He

ad of C

orp

orat

e Af

fair

s, B

rand &

Marketing in March 2021.

Career

laire is a seasoned c

ommunicatons

exp

t who ha

s led t

eam

s at glo

bal br

ands i

a var

iet

y of s

ecto

, in Europ

e and t

he US

. She

ent ne

arl

y eigh

t year

s liv

ng and wo

rki

in Si

lcon V

lley

, i

nclu

dng f

or eBa

/Pay

Pal

and m

ost re

cen

tly a

s Chief C

omm

unica

ton

ﬁcer a

t Inte

l. Thro

ugh

out he

r care

er she

s bee

n a champ

ion fo

r crea

tin

g posi

tve

global impac

t, includng

leading Global

Corporate Responsib

lit

y at

laxoSmi

hKl

ne.

External appointments

Clai

re is a tr

tee of

the Standar

d Chartered

Foundation.

Standard Chartered

– A

nnu

al Rep

ort 202

Directors’ report

Manageme

nt T

eam

Sun

il Kaush

al (56)

CEO, Afr

ica & Mid

dleEast

nil was a

ppoi

nted C

EO, Afr

ica & Mi

ddle

East o

n 1 Oct

ober 20

15.

Career

ior to h

is cur

rent r

ole, S

unil wa

regional CE

O South Asia, responsible for

Standard Char

tered’s operations in Sout

Asia (

which included

India, Bangladesh, Sri

Lanka

, and Ne

pal). He h

as over 3

3 year

s of

banking exp

erience in diverse mar

ts and

s bee

n with S

tan

dard Ch

art

ere

d for over

3 year

s, ho

ldin

g seni

or rol

es ac

ross t

oles

ale an

d Con

sume

r Ban

k. Su

nil ha

s ric

experience across the Group

’

s footpr

int,

ving s

ved a

s the H

ead o

f Cor

por

ate

nkin

g in UAE, He

ad of O

rig

nati

ons an

Client Coverage in Singapore, Glo

bal Head

all and M

ediu

m Ent

erpr

ise

s (SME) a

New Ventu

res in S

inga

pore a

nd Chi

cutive Ofﬁcer of Standard Char

tered

Bank (T

aiwan

) Ltd.

Before joning Stand

ard Chartered in 1998,

nil hel

d vari

ous b

anki

ng po

sito

ns at a

number of leading

internatonal ﬁnanca

insttutions.

External appointments

Suni

l is a Gl

obal

Adv

iso

y Boar

d mem

ber of M

oney

ap, a

leading Indian Fintech company

anuj K

apilashr

am (

)

Group Head, Human R

ources

anu

j jone

d the M

anag

eme

nt T

eam a

oup He

ad, H

uman Re

sou

rces (H

) i

Nove

mber 20

18. S

he jon

ed th

e Ban

k in Mar

2017 a

s Gro

up Hea

d, T

ale

nt, Le

arn

ing an

Culture and

on additonal responsibl

as Global Head HR, Corporate,

ommerc

ial

and Institu

tonal Banking in May 2018.

Career

ior to j

onin

g the G

roup, T

bui

lt her c

aree

r at HSB

C. S

he ha

s worke

across mult

iple HR discplines in man

of o

ur foo

tpr

int ma

rket

s (Ho

ng Kong

Singapor

ubai, India and London

External appointments

anuj i

s a

non-executive

director of Sainsbury

’

s PL

and a m

emb

er of t

heir N

omin

aton a

Remuneration

committees

is a member

of t

he As

ia Hou

se bo

ard of t

ste

es, o

which Standard Char

tered is a founding

stakeholder

. Asia House is

a London-based

centre of e

xpertise on trade, inv

est

ment

and p

ubli

c pol

icy w

hos

e mis

son it i

s to

drive politcal, econ

omic and commercial

engagement bet

ween

sia a

nd Europe.

anu

j is als

o a boa

rd mem

ber o

f the UK

Financal Ser

vices Skills Commi

sson.

Benjamn Hung (

)

O, A

n was app

oin

ted CEO, A

sia on 1 J

anu

2021

Career

en joned Standard Chartere

d in

92 and h

as he

ld a num

ber of s

eni

management positons spanning c

orporate

and r

etai

l bank

ing

. Prio

r to his c

urre

nt rol

n was Reg

iona

l CEO for G

rea

ter Ch

ina &

rth A

sia an

d CEO fo

r the B

ank

’s Retai

Bankin

d W

ealth Manageme

sine

sse

s glob

ally. He is cu

rre

ntl

y bas

ed in

Hong K

ong and has

internatonal banki

exp

ience i

n the Un

ite

d King

dom an

d in

nada

. Ben wa

s prev

ious

ly ch

airm

an of

e Hong Ko

ng As

soc

iato

n of Ba

nks

a me

mber o

f the Fin

anca

l Ser

ices

Development Council

and a board member

of the

Hong Kong

Airport Authority and

the

Hong K

ong Hospital

Authorit

. He

was also a

unci

l Memb

er of t

he Hon

g Kong Un

iver

st

External appointments

Ben i

s an

independent non-ex

ecuti

e director of the

Hong K

ong Exchanges and

Clearing Lim

ted

and a m

emb

er of t

he Hon

g Kong Ch

ief

xecu

tive’s Co

uncil o

f Adv

iser

s on In

novat

ion

and S

tra

tegi

c Devel

opme

nt. H

e als

o sit

s on

the Exchange F

und Advisory Committee

and i

s a mem

ber of t

he G

ener

al Com

mit

tee

of t

he Hon

g Kong G

ene

ral Cha

mber o

mmer

ce. He i

s a stra

tegi

c adv

iso

r at the

International Consultative Conference on

the Future

Economic Development

Guan

gdong Province, China.

Roel L

whoff

(56

)

Chief Digtal, T

echnolo

& Inn

ovatio

n Ofﬁ

cer

Roe

l jone

d the G

rou

p as Chi

ef Dig

tal,

echnology & I

nnovation

Ofﬁcer in No

vember

21 and is responsible f

or leading

the dig

transformation of the

roup

into an

agile,

digtal and futur

e-focused organisat

on.

He spea

rheads the Grou

’s

technology

strategy; the development

s technology

systems and infrastructure, which support

its customers and employees

globally; and

leads its innov

aton. Roel’s

expanded role

as Ch

ief T

hnol

ogy, Ope

rati

ons an

ransformation Ofﬁcer

commences on

1 Ap

ril 202

Career

Prior to joning Standard Char

tered,

Roe

l was Chi

ef Op

erat

ions a

ransformation Ofﬁcer at ING Bank,

where he ov

saw operations, technology

and the br

oader transformation agenda.

rin

g his seve

n year

s in th

is rol

e, Roel l

ed th

successful digtal

transform

ation

of ING, seen

by many a

s a tra

ilbla

zer in di

gtis

ng ﬁna

ncal

vice

s. Be

fore I

NG, Ro

el sp

ent t

en year

at Br

it

sh T

ele

com (“BT

”), lat

ter

ly as CEO o

-Op

erat

e bas

ed in t

he UK

. At BT

, he

redeﬁned

the technology

and operational

approach and

led the BT

communicaton

sid

e of th

e 2012 Ol

ymp

ics b

efor

e appl

ying

that lear

ning in

eliverng turn-key digtal

and infrastructure solutions for

major

exh

ibti

on and s

por

tin

g event

External appointments

None.

Standard Chartered

– Annu

al Repo

rt 2021

Directors’ report

Dr Mi

cha

el Go

rri

z, pr

evio

usl

y Gro

up Chie

f Info

rma

tion O

fﬁc

, a

nd Da

vid Fe

in, pr

evio

usl

y Grou

p Ge

nera

l Coun

sel

, reti

red f

rom t

he Gr

oup on

31De

cem

ber 2021

. It was a

nnou

nce

d on 13 Jan

uar

y 202

2 tha

t Dr San

die O

koro wou

ld jon t

he G

roup a

s Gro

up Ge

nera

l Cou

nse

l in ear

ril202

David Whiteng (53)

Gro

up Chie

f Oper

ating O

fﬁcer

Mar

y H

uen (5

)

CEO, Hong Kon

g and Clus

ter CEO,

Hon

g K

ong

, T

iwan and M

acau

vid jo

ned S

tand

ard Ch

art

ered a

s Gro

Chief Operating Ofﬁcer

in September 2018

and w

ill st

ep dow

n fro

m the G

roup i

March 20

Career

David joned

Standard Chartered

om the C

omm

onwea

lth B

ank of Au

stra

lia

ere he wa

s the G

rou

p Chie

f Info

rmat

ion

ﬁcer, res

pon

sibl

e for all o

f the t

echn

olo

and o

per

atio

ns te

ams of t

he G

roup a

for d

eli

vern

g the G

rou

’s strat

egi

c pilla

r of

‘world leading

applicaton of

erations

and t

ech

nolo

gy.

’ He i

s a high

ly exp

eri

ence

exec

uti

ve wit

h a trac

k reco

rd of de

live

rng

cultural trans

formation in Australia and

over

as. Pr

ior t

o jonin

g the C

BA Gro

up in

2013

, Dav

id was Vi

ce Pres

iden

t of Ent

erp

ris

Syst

ems at B

P in th

e UK

. He is a fo

rme

Accenture technology and

erations

partner with

extensive tr

ansformation

experience.

External appointments

Dav

id is an

independent director

of Silcon

uantum

mput

ing Lt

d and a di

rect

or of Zet

ari

s Ltd.

Mar

y was appointed Chief E

ecuti

fﬁcer

(

) for H

ong Kon

g in Mar

ch 2017

, and to

on an e

xpan

ded r

ole a

s Clus

ter CEO f

or Hon

Kong

, T

aiwan a

nd Ma

cau in Ja

nuar

y 202

e jone

d the G

rou

’s Mana

geme

nt T

eam

in De

cem

ber 2021

Career

y has ove

r 30 yea

rs of e

xpe

rien

in busines

anagement and bankin

vice

s. Sin

ce jon

ing th

e ban

k in 199

1, s

s held va

rio

us key po

sito

ns ac

ross b

alan

sheet product management, wealth

management and

distrbution. Prior

to her

cur

ren

t role, M

y was Re

gion

al He

ad of

Reta

il Ban

kin

g, Gr

eate

r Chin

a & Nor

th A

sia,

and the

Head of Reta

il Banking, Hong

Kong.

External appointments

Mar

y is t

cha

irp

ers

on of t

he Hon

g Kong A

sso

ciat

on

of B

ank

s, a me

mber o

f the B

ank

ing Ad

viso

Committee of the

Hong K

ong Monetar

Authority

, the F

inancal I

nfrastructure and

Market Dev

elopm

ent

ub-Committee and

the Currency Board Sub-Committee under

the Exchange F

und Advisory Committee.

e is als

o a repr

ese

ntat

ive of H

ong Kon

Chi

na to th

e Asi

a-Paci

f

c Econo

mic

Cooperati

on (A

PEC)

Business Advi

sory

Council,

the chairperson of the

Hong Kong

rade

Development Council F

inancal

vice

s Advi

sor

y C

ommi

tte

e and th

Asian Financal Forum Stee

ring Committe

a bo

ard me

mbe

r of the H

ong Kon

g T

our

ism

Board and

Hospital A

uthor

ity

ry i

s not a P

ers

on Di

sch

argn

g Man

age

ria

Responsiblit

es (

“

DMR”) under the

UK Market

Abuse Regulation.

Mark Smith (

60)

Gro

up Chie

f Risk Of

ﬁcer

Mar

k was ap

poi

nted G

rou

p Chie

f Risk O

fﬁce

in Januar

y 2016. Mark is responsible for Credit

Marke

Operational

and T

echnology

Inf

orm

atio

n and Cybe

r Sec

uri

ty, Repu

tati

onal

and Sustainablit

, Climate and Mode

l Risk

acr

oss t

he Gr

oup an

d ens

urin

g the b

road

sk fr

amewo

rk is ef

cti

ve. Mar

k is a me

mber

of t

he Co

urt o

f Stan

dard Ch

art

ere

d Bank

Career

Befo

re jo

nin

g Standard Chartered

Mar

k was t

he chi

ef ris

k ofﬁ

cer Eur

ope,

Mid

dle Eas

t and A

fri

ca and gl

oba

l head

Wholesale Credit

and T

raded Risk

for HSBC.

He h

ad a lon

g and su

cces

ul car

eer at H

SBC

ving j

one

d Midl

and Ba

nk as a gr

adua

tra

ine

e prio

r to it

s acq

uist

ion by HS

her ro

les at H

SBC in

clu

ded ch

ief op

erat

ing

ofﬁcer

, Global Corporate & Institutonal

nkin

g. He h

as wor

ked in Lon

don an

Hong K

ong.

External appointments

Mar

k sit

s on th

Foundation Board of the Internation

Financal Risk Institute.

rac

ey McDe

rmot

t, C

BE (52)

Group Head Conduct,

Financal Crime and Complian

rac

ey has b

een t

he Gr

oup He

ad Co

ndu

ct,

Financal Crime and Compliance since

January 2019

. She orig

nally joned

Standard

Cha

rte

red a

s Gro

up Hea

d of Co

rpo

rate

Public and

Regulator

y Affairs in

ch 2

017

subse

quently adding Brand and Marketin

to h

er por

tfo

lio in D

ecem

ber 20

17 and

Complian

in March 2018.

Career

ior to j

onin

g the b

ank

, T

racey

ved as Act

ing Ch

ief E

xecu

tive o

f the

Fina

ncal Conduct

Authorit

(FCA

) from

ptem

ber 201

5 to Ju

ne 2016

. She jo

ned

the then

Financa

l Services Authority (FS

in 200

1 whe

re she h

eld a n

umbe

r of se

nior

roles includ

ng: Director of

Sup

ervison and

Authorisatons, and Di

rector of

Enforcement

and Financal Crime. T

cey

so ser

ved as

a Bo

ard Me

mbe

r of the F

SA fro

m Apr

il 2013,

as a m

embe

r of th

e Finan

cal Poli

mmit

tee o

f the B

ank of En

glan

d, an

d as

non-executive

director of the

udential

Regulation A

uthor

ity from September 2

015

to J

une 2016

. Pri

or to jo

ning t

he FC

A, T

acey

wor

ked as a l

yer in p

riva

te pra

ctic

ving s

pen

t time i

n law ﬁr

ms in t

he UK

, USA

and B

sse

ls. I

n 2016, T

cey re

ceive

d a CBE

for h

er se

vice

s to ﬁna

ncal s

ce cons

ume

and market

External appointments

racey

airs the

t Zero Ba

nkin

g Alli

ance, i

s a mem

ber of

the International R

egulator

y Strategy Group

Council

and cha

the Conduct and

Ethics

mmit

tee o

f the Fixe

d Inco

me, Cu

rre

ncie

and Commo

dites Markets Standard

ard. S

he is a t

rus

tee o

f the St

and

ard

Chartered Foundation.

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Corporate gov

nanc

Corpor

ate

ove

ey are

as of Boar

d discus

son duri

ng 2021

The f

ollowi

ng pag

es of

fer an ins

ght into key it

ems cover

by the B

oard du

ring t

he year, as well as t

he str

uct

ure of Bo

ard

meetings and

other activties.

The B

oard co

mmen

ces eac

h year revi

ewng it

s key prio

rtie

to he

lp form

ulat

e its fo

ward pla

n, whic

h requi

res a bal

ance

bet

ween standin

g items, governance re

quirement

s, and areas

of strategic, ope

rational and tactical focus. Board meetings

help s

tru

cture B

oard a

ctiv

ties an

d facilta

te disc

usson a

action. In add

iton, they pro

vide an i

mportant forum for

over

sight an

d challe

nge of m

anage

ment in re

spe

ct to asp

ect

of th

e Grou

’

s o

perat

ions

, per

form

ance an

d strat

egy

. S

ome

of th

e area

s detail

ed on th

e follow

ing pa

ges for

med p

art of

the s

tandin

g agen

da for e

ach me

eting

, while o

ther

s were

revi

ewed per

iodca

lly thr

ougho

ut the ye

Stakeholder considerat

on and open interac

ton are

central

to th

e Boar

d’s prior

ties

, wit

h the ne

ed to ge

nerat

e and

promote positve

stakeholder relationshps

of key i

ortance.

Signﬁ

cant time is spent interactng

ith

y stakeholders to

bet

ter un

der

stand t

heir vi

ews, a

s well as th

e oppo

rtu

nites

chal

lenge

s and th

e Grou

’

s im

pact ac

ross o

ur diver

se mar

ket

In addit

he Board

regularl

discusses the impact

stake

holde

, their v

iews an

d their f

eedb

ack, w

het

her in Bo

ard

and co

mmitt

ee me

eting

s, or a

s part o

f othe

r intera

cton

acro

ss th

e Grou

p. Some e

xamples o

f this can b

e foun

d in the

ction 17

2 of the C

ompa

nies Act 200

6 (

s.172

) dis

closu

re on

pag

es 50 to 7

, w

ithn sp

otlig

ht item

s on the f

ollowin

g page

and o

n page

s 110 to 115

Directors are alert to

their statutor

y duties and

obligatons,

incl

udng t

hose o

utlin

ed und

er s.172, an

d this fo

rms an i

ntegr

part of dire

ctor inducton and annual trainng. Th

e Board will

cont

inue to f

ocus o

n consi

derng s

takeho

lder

s as par

t of th

Board’s

cis

on-making.

Our stakeholders their i

nterest

drivng commerce and prosperity through our unique

diversty

The B

oard s

pend

s signﬁcant t

ime con

sider

ng and i

nterac

tng wit

h it

s k

ey stakeh

olde

rs to b

ette

r under

sta

nd thei

r views an

per

spe

ctive

s. A sum

mar

y of st

akehol

der int

erest

s can b

e found i

n the St

rateg

ic repo

rt on t

he pag

es iden

tﬁed be

low

Client

page 5

Regulators and

gov

ernments

page 53

vestors

page 54

Suppliers

page 54

Society

page 55

Employ

ees

page 56

VID-19

continued response

As w

as the c

ase l

ast ye

, t

he evol

uti

on of th

e pan

demi

c cont

inue

to impact

our colleagues, clients and communit

es during 2

021.

e Gro

up ope

rate

s acro

ss a di

ver

se foo

tpr

int

, and t

he ext

ent

to w

hich COVID

19 im

pact

ed ea

ch mar

ket var

ied

. Desp

ite th

continue

d uncertaint

, the Board maintane

d its oversight of

fec

tive g

overn

ance a

cros

s the G

rou

p. Boa

rd mee

tin

gs con

tinu

to b

e held i

n a vir

tua

l or hybr

id fo

rm th

roug

hout t

he ye

ar as a

result of

ongoing travel restrictons i

act

ng many of

roup

’

ogra

phie

s. Whi

le th

e Boar

d was un

able t

o mee

t in a num

ber o

key mar

ket

s thi

s year, it was a

ctive

ly invo

lved in a v

tual c

apac

Fur

the

r deta

il can b

e foun

d late

r in thi

s rep

ort

e Boar

d cont

inue

s to pl

ay a key rol

e in ste

ing th

e Gro

’s

VID-

19 response, receivng

gular

updates at scheduled Board

meetings.

The Board’

s focus

remained to prote

ct stakeholder

interests, includ

ng our col

leagues’ w

ellbeing, shareholder rights,

cus

tom

er and c

lient n

eed

s, a

s well as s

upp

ort f

or our c

ommu

nit

es.

In or

der to a

ssi

st wi

th thi

s aim, t

he Bo

ard de

leg

ate

d spec

c

res

pon

sibl

ite

s to it

s comm

itte

es an

d the M

anag

eme

nt T

eam

dur

ing 2020, an

d thi

s fram

ewor

k rema

ined i

n plac

e thro

ugh 2021

ere ne

ces

sar

, exp

t opin

ons we

re sou

rced

, bot

h exte

rnal

and f

rom i

nsd

e the G

roup, w

hich a

lso he

lpe

d ens

ure ef

fec

tive

decison-

aking

by the Board.

Code compliance

e UK Cor

rate G

over

nanc

e Cod

e 2018 (

he Co

) an

d the

Hong K

ong Corporate Gov

nanc

e Code contained

in Appendix

14 of t

he Ho

ng Kong L

istn

g Rule

s (HK Co

) are t

he st

anda

rds

aga

inst w

hich w

e mea

sure

d our

sel

ves in 202

e dire

ctor

s are pl

eas

ed to c

onﬁr

m that S

tan

dard Ch

art

ere

d PL

(

he Co

mpa

) cont

inu

ed to co

mpl

y with t

he pr

ovis

ons se

t out i

e Cod

e and th

e HK Co

de for t

he ye

ar und

er rev

iew

Thr

oug

hout t

his co

rpo

rate g

over

nance r

epo

rt we ha

ve prov

ide

an in

sght i

nto ho

w gover

nanc

e oper

ate

s with

n the G

rou

p and

how we h

ave ap

plie

d the p

rinc

ples s

et ou

t in th

e Cod

e and

HK Code

e Gro

up conﬁ

rms t

hat it h

as ad

opte

d a cod

e of con

duct

regarding d

irectors’ securites

transactions on terms

no less

exac

ting t

han re

quir

ed by Ap

pen

dix 10 o

f the H

ong Kon

g List

ng

Rule

s. H

avin

g mad

e spe

cif

c enq

uir

y of a

ll dire

ctor

s, t

he G

roup

con

ﬁrms t

hat a

ll dire

ctor

s ha

ve comp

lied w

ith t

he re

quire

standards of

adopte

code of conduct.

pies o

f th

e UK Co

rpo

rate G

ove

rna

nce Co

de an

d the

ng Kong C

por

ate G

over

nan

ce Co

de can b

e fou

nd at

frc.org.uk

and

ex.com.hk

respectively

o the extent applicable, informaton required by paragraphs 13(2)

(

c), (

d), (f), (h) and (i) of S

che

dule 7 o

f the L

arge a

nd Me

dium

-si

zed

Companies and

roups

(Accounts and

Report

) R

egulations 2008

is avai

lable in

Other disclosures on

page

s 181 t

o 190

Standard Cha

tered

– Annu

al Repo

rt 2021

Directors’ report

•

Revie

wed and a

pprove

d the 202

2026 Co

rpo

rate Pl

as a b

asis f

or prep

arat

ion of t

he 2022 b

udge

t, re

ceiv

ng

conﬁ

rmat

on fr

om the G

rou

p Chief Ri

sk Of

ﬁcer th

at th

e plan

is ali

gned t

o the En

ter

pris

e Risk M

anag

emen

t Framewor

k and

the Group Risk Appetite Statement

•

Dis

cus

sed pr

ogre

ss mad

e agai

nst th

e Gro

’s strat

egic

priort

ies and critcal enablers

•

viewed

the Group

’

s Stands

•

Revie

wed and s

cru

tins

ed th

e strat

egic a

nd ope

rati

onal

rfor

manc

e of the b

usin

ess a

cros

s clien

t segm

ent

s, pr

oduc

gro

ups and r

egio

ns, w

hich in

clud

ed det

ails o

f their p

rio

rtie

progress, opportunites and response to current

events

Thi

s inclu

ded d

eep di

ves int

o the fo

llow are

as:

–

China

–

Hong

Kong

–

SME banking

–

Personal bank

ing

•

Dis

cus

sed, r

eviewe

d and ap

proved t

he Gro

’s net zer

path

way

•

Received

and discussed regular corporate

development

updates

•

Revie

wed and a

pprove

d chang

es to ce

rtai

n prop

ert

y-re

late

supplier relationsh

in line with the Group

’

s propert

y strategy

•

Discussed and

review

ed the Group

’

s technology and

inn

ovaton s

trate

•

Rece

ived an u

pdat

e on th

e Grou

’s investm

ent in Chi

Bohai Bank

•

Dis

cus

sed SC V

ent

ures

, str

ateg

ic invest

ment

s and

partner

ships

proces

ey are

as of Boar

d discus

son duri

ng 2021

ontinue

Spotlight

The Group

’

s Stands

The Group launched

a combined

narrative for the orga

nisaton, bringng together

at we stan

d for an

d alignn

g the s

trate

, p

rio

rtie

s and act

ion

s to deli

ver on t

hem.

e of the key co

mpon

ent

s of th

e narr

ativ

e is the S

tand

s. W

e h

ave thr

ee St

ands –

Accel

erat

ing Zero, L

ift

ng Part

icpa

tion an

d Reset

ting G

lob

alis

aton

. The S

tand

s are

not a

n add-o

n or sep

arat

e from o

ur str

ateg

, bu

t inst

ead ar

e execut

ed th

rough o

str

ateg

. D

urin

g the yea

, th

e Boa

rd rece

ived f

eedb

ack on c

olle

ague

s’ reac

tion

s to

e Stand

s, a

s well as pr

ovidn

g its ow

n reﬂe

ction

s and v

iews

. In addi

ton, t

he Bo

ard

high

lghte

d are

as of cau

tion t

o mana

geme

nt as

soci

ated w

ith th

is inti

atve. Fu

rth

det

ail re

gardin

g the S

tand

s can be fo

und on p

age

s 2

4 and 2

Stakeholders

Risk management

•

Revie

wed and d

iscus

d risk r

epor

ts f

rom t

he Gr

oup Chi

Risk Ofﬁcer

•

Rece

ived re

gul

ar upd

ates on t

he imp

act of COVID

•

Engaged with the

udential

Regulation Authority (PRA

) on

e ﬁndng

s of the

ir 2021 Peri

odc Su

mmar

y M

eet

ing Let

ter

•

Dis

cus

sed an

d review

ed the G

rou

’

s r

isk c

ultu

•

App

roved t

he ris

k appe

tite va

lidat

on of th

e 2022 C

orpo

rate

Plan

•

App

roved t

he ren

ewal of th

e Gro

’s insur

ance p

olice

s for

2021/

202

•

Dis

cus

sed ma

ny aspe

s of Reso

lvabilt

y, approve

d the G

roup’

Reso

lvabil

ty A

ess

ment Rep

ort a

nd und

ert

ook a si

gnﬁcant

ard and m

anag

emen

t Resol

vabilt

y sc

enar

•

Dis

cus

sed an

d review

ed the G

rou

’

s T

nsfo

rma

tion an

Reme

diat

on Port

foli

o and Inf

orm

ation a

nd C

er Se

curi

ty (I

CS)

Risk proﬁ

•

Undertook blue sky thinkng/

horizon scanning

discussons,

whi

ch cons

ider

ed th

e pote

ntial r

isk

s and o

ppor

tun

ites t

hat

e Grou

p might b

e or cou

ld be

come ex

pos

ed to

Clients

Regulators and go

vernments

Inve

Suppliers

Societ

Employees

Group strategy

Spotlight

Group Chief Risk Ofﬁcer’

s report

The Group Chief

Risk Ofﬁcer regularly presents

rep

ort

s at B

oard me

eti

ngs

. The con

tent o

f the re

por

cov

s the

acr

oeconomic en

onment, geopolitcal

out

loo

k and key ri

sk tre

nds

, with a p

art

icula

r focu

on Ri

sk App

etit

e, the i

mpact f

rom t

he pan

demi

c and

her mar

ket event

s on o

ur por

tfo

lio, ma

rket

s and

operations, updates

on Princpal

and Integrated

Ris

k T

pes

, and key re

gul

ator

y m

atter

s. T

he Bo

ard

deliberates on

the updates provided a

engages

in rob

ust re

view an

d chall

enge w

here ap

prop

riat

Stakeholders

Clients

Regulators and go

vernments

Inve

Suppliers

Societ

Employees

100

Standa

Charter

– A

nnu

al Rep

ort 202

Directors’ report

Corporate gov

nanc

ey are

as of Boar

d discus

son duri

ng 2021

ontinue

Financal

s and performance

•

App

roved an

d revie

wed the G

rou

’

s 2022-

2026 Cor

pora

Plan a

nd 2022 b

udge

•

nitor

ed the G

rou

’

s ﬁnan

cal pe

rfor

man

•

App

roved t

he fu

ll year an

d half ye

ar resu

lts

•

Monitored

and assessed the streng

th of the Group

’

capital and liqudity p

ositons

•

Consid

ered the Group

’s approach to capital management

and r

etur

•

Approv

ed 202

0 ﬁnal d

vde

nd and 20

21 interm

divdend

•

Approved t

hare buy-back programmes

•

Rece

ived bi-

annu

al upda

tes on a

nd dis

cuss

ed th

e Gro

’s

maj

or invest

men

t progr

amme

s in 2021 incl

udng an

update on the

roup

’

s dig

tal tra

sformation

agenda

•

Rece

ived bi-

annu

al upda

tes on

, and di

scus

sed

, investo

relations matter

•

Dis

cus

sed p

eer be

nchm

ark

ing aga

inst 2020 pe

rfor

man

•

Approv

ed the Group

’

s 20

20 Country-b

y-Countr

y R

eporting

disclosures

•

Rece

ived an u

pdat

e on new wa

ys of wo

rkin

Spotlight

buy-back pro

grammes

In 2021 th

e Boa

rd approve

d, af

ter en

gage

ment w

ith t

regulator

, the re-commencement

of a share buy

-back

pro

gramm

e that wa

s sus

pend

ed in Ma

rch 2020 due to

e impac

t of the p

ande

mic an

d in resp

ons

e to a req

uest

by the P

. Th

e Boar

d reco

gnise

d the s

ignﬁcan

ce of

balancing a cautiou

s approach to capital management

in lig

ht of th

e cont

inue

d impa

ct of the p

ande

mic ag

ainst

ret

urn

s to our s

hare

hold

ers

, and t

his was re

info

rced by th

cison t

o approve a f

ther b

uy-b

ack pro

gramm

e that

com

plet

ed in Se

ptem

ber 2021

. The Bo

ard wi

ll cont

inue t

consider and

engage with stakeholders i

n order to drive

optimal ways of

generating shareholder value.

Stakeholders

People, cu

lture an

d v

alu

•

Approved

the Group

’

s 202

0 Modern Slaver

y Statement

•

Dis

cus

sed pr

ogre

ss mad

e agai

nst th

e Gro

’s peop

le str

ateg

•

Dis

cus

sed an

d review

ed an up

date o

n the G

roup’

s cul

ture

•

Dis

cus

sed as

pec

ts of t

he Gr

oup

’s glob

al emp

loyee en

gage

ment

sur

vey, My V

oic

•

Rece

ived up

dat

es on th

e prog

ress

ion and e

volut

ion of

e Manag

eme

nt T

eam’s and sen

ior man

agem

ent

’s

succession plans

•

Dis

cus

sed th

e Gro

’s Glo

bal Di

vers

ty a

nd Inc

lusio

n inti

atves

•

Dis

cus

sed th

e Boa

rd Dive

rst

y Pol

icy

•

Revie

wed an ann

ual re

por

t upda

te on th

e ope

ratio

n and

fect

iven

ess of t

he Gr

oup

’s Sp

eaki

ng Up pro

gramm

•

Approv

ed the adoption of

the 20

21 Standar

d Chartered Share

Plan, subject

to shareholder approv

al at the 2

021

Annual General

(AG

External env

onment

•

Receiv

updates on the macr

economi

c headwinds and

tai

lwnd

s in the g

loba

l econ

omy

, inc

ludn

g an ass

ess

ment o

f the

imp

act on t

he key dri

vers o

f the G

roup’

s ﬁna

ncal p

erfo

rman

•

Receiv

internal and ex

ter

nal

brief

ngs

and input across

range of

subjects, includng

–

climate-related matters

–

net zer

o pathwa

y met

hodo

log

–

velopments in

cloud technology

, dig

tal currencies

and

ypto assets

–

the g

lob

economic outlook

–

econ

omic re

cover

, ri

sks an

d opp

ort

unit

–

olvin

g geopolitcal lands

cape

–

‘blue sky thinkng

’

/‘horizon scanning

’ discussons

Spotlight

People strategy

The B

oard r

eviewe

d the p

rogre

ss ma

de on th

e peo

ple

str

ateg

y prev

ious

ly app

roved by th

e Boar

d in the co

ntex

of evol

vin

g clien

t nee

ds, t

he indu

str

y, and exp

ecta

tion

s of

coll

eag

ues

, part

icul

arly i

n light o

f the on

goin

g pand

emic

The B

oard r

ecog

nise

d the im

por

tanc

e of prov

idng

con

str

ucti

ve fee

dbac

k on the s

trat

egy an

d disc

usse

asp

ect

s of th

e peo

ple an

d cultu

re age

nda w

here t

hey

antic

pated challenges.

Stakeholders

Spotlight

onomic recove

, risks and opportunites

Siml

ar to la

st year, the B

oard inv

ted a n

umbe

r of exte

rna

and inte

nal

speakers to attend

oar

d sessions. The

eaker

s provi

ded ex

per

t, pr

ofes

sion

al ins

ght

s acros

s a

vari

y of ma

tter

s, su

ch as co

mmen

tar

y on t

he eco

nomi

rec

over

y dur

ing 2021 an

d key risk

s to re

cover

y in t

utur

e. Thes

e ins

ght

s provid

ed valu

able co

ntex

t to Boa

dis

cuss

ons on h

ow the

se ri

sks an

d opp

ort

unit

es may

imp

act th

e Grou

p, what f

the

r actio

ns ma

y be pr

uden

in re

spon

se to t

hese r

isk

s, an

d a cons

idera

ton of o

the

ext

erna

l risk

s. B

rief

n

gs als

o help

ed sha

pe Bo

ard de

cison-

making more br

adly

Stakeholders

Clients

ociet

Employees

Clients

Inve

Suppliers

Societ

Regulators and

gov

ernm

ents

Employees

Regulators and

gov

ernm

ents

Inve

101

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

xamp

les o

f how th

e Boa

rd con

sid

ere

d sta

keho

lder p

spe

cti

ves in s

ome

inc

pal de

cis

ons d

uri

ng th

e year a

re pr

ovid

ed on

age

s 53 an

d 66

ey are

as of Boar

d discus

son duri

ng 2021

ontinue

For a d

eta

ile

d over

ew of o

ur st

rate

gy se

ges 2

2 an

d 23

Gov

ern

ance

•

ted an

r approve

d chan

ges to t

he me

mber

ship o

f the

Audit

and Remuner

ation c

ommittees

•

Rece

ived re

por

ts a

t each s

ched

uled m

eet

ing f

rom th

e Boar

com

mitte

e Chai

rs on key ar

eas o

f focus f

or th

e commi

ttee

s and

quarterly updates from

Standard Chartered Ba

nk (

Hong K

ong)

Lim

ted an

d its Au

dit and B

oard R

isk com

mitt

ees

•

Approved

the re-appointment of

independent external adviser

to th

e Boa

rd on c

yber s

ecur

y and c

er thre

•

Aut

hori

sed var

iou

s pote

ntia

l conﬂict

s of in

tere

st rel

atin

g to

director

s’ external appoint

ments

•

Dis

cus

sed th

e obs

vati

ons an

d them

es ari

sng f

rom th

e 20

internal Boar

d and

committees’ effectiveness r

eview and

app

roved th

e 2022 Act

ion Plan

•

Revie

wed, an

d approve

d upd

ates w

here ap

prop

riat

e, to th

erm

s of Refe

rence f

or eac

h Boar

d commi

tte

•

Fur

ther d

evelop

ed me

anin

gfu

l linkage

s bet

en the B

oard a

s subs

idar

ies at ch

air, board a

nd comm

itte

e level

•

App

roved t

he tran

sito

n fro

m the Br

and, V

lues a

nd Con

duct

Committ

ee to the Culture and Sustainablit

y Committee

Shareholder and stak

eholder engagem

ent

•

Engaged virtually with i

nvestors, held meetings with brok

ers

discussed the vie

ws of insttutiona

l shareholders

•

Hel

d the 2021 AGM

•

Hel

d a vir

tual s

teward

ship eve

nt att

ende

d by investo

rep

rese

ntin

g a sizea

ble pro

por

tion o

f our e

quit

y as we

as sever

al shareholder r

epresentative bodies

•

Engaged with k

ey clients, shareholders and

regulators

•

Dis

cus

sed su

ppor

t prov

ided t

o clien

, colle

agu

es and

communites

dur

ing

continued impact of

andemi

•

Received

bi-annual updates

rom

Investor R

elations

includng

sha

re pri

ce and val

uati

on anal

ysis

, mar

ket eng

agem

ent and

ownership analysis and

ell

-side sentiment

•

Held six virtual employ

ee engagement sessions across our

rket

Spotlight

Culture and Sustaina

blit

y Committee

The B

oard a

pprove

d the ch

ange f

rom th

e Bran

d, V

alu

and C

ondu

ct Com

mitt

ee (BV

) to the C

ultu

re and

Sustainab

lit

y Commi

tee

(

SC)

in May 20

21 following

a ref

ocus o

f the Co

mmit

tee’s remi

t. G

reat

er weigh

t has

en give

n to envir

onme

ntal, s

ocia

l and gover

nan

(ES

) m

att

ers

, and ar

eas of d

uplic

aton a

ddres

Detailed map

ping w

ork was conducted

which resulted

in th

e reco

mmen

dati

on of a nu

mber o

f chang

es to t

’

s T

ms of Re

fere

nce, in

cludn

g hand

ing of

f area

of over

lap to a c

ombin

aton o

f oth

er Boa

rd comm

itte

es,

man

agem

ent an

d the Bo

ard. Fu

rth

er det

ail can b

e foun

in th

e CSC r

epor

t on pa

ge 130.

Stakeholders

Spotlight

The Board’

s intenton

was to in

vte shareholders to

attend

e 20

1 A

M in pe

rso

n, esp

ecia

lly as t

his is r

egard

ed as

an important

opportunit

y for

shareholders to engage with

e Boar

d. However, due t

o the co

ntinu

ed cha

llen

ge of th

pan

demi

c, inc

ludn

g prevailn

g gover

nmen

t guide

lnes o

non-essentia

l trav

el and publi

c gatherings

at the time

, the

mpany

’

s AGM on 1

2 May 2021 wa

s held a

s a combi

ned

physic

al and electron

ic meeting. Shareholders w

ere not

rmit

ted phy

sical e

ntr

y int

o the AGM ven

ue bu

t were

abl

e to att

end th

e A

M ele

ctron

icall

y via a li

ve web-

portal. The meeting

format ensured that

shareholders

cou

ld eng

age wi

th the B

oard r

egar

ding th

e Com

pany’s

rec

ent pe

rfor

man

ce and st

rate

gic pr

iort

ies

, whil

e also

protecting

health and safety of our

shareholders,

colleagues

and other

stakeholders. Further deta

reg

ardin

g the m

eeti

ng can be f

oun

d on pag

e 112.

Stakeholders

Regulators and

gov

ernm

ents

Societ

Inve

Employees

Clients

Suppliers

Regulators and

gov

ernm

ents

Societ

Inve

Employees

102

Standard Cha

tered

– Annu

al Repo

rt 2021

Directors’ report

Corporate gov

nanc

Boar

d and commit

tee st

ruct

ure: decis

ons, r

espon

siblite

s and dele

gation of a

uthorit

erms o

f Referen

ce for t

he Boar

d and ea

ch commi

ttee ar

e in place t

o provid

e clar

y over wher

e resp

onsibl

y for

dec

ison-ma

king lie

s. Th

ese are r

eviewed a

nnuall

y again

st indu

str

y be

st prac

tice and c

orpo

rate gove

rnanc

e provis

ons

and gui

dance, includ

ng the PRA Superv

isory Statement on

d Responsib

lites.

With t

he except

ion of t

he Gover

nanc

e and Nom

inato

n Commi

ttee (

here t

he Gro

up Chai

rman i

s its Ch

air

) and t

he Bo

ard

Financ

al Crim

e Risk Co

mmitt

ee (

ere t

wo exter

nal ad

vis

ers ar

e memb

ers

), all of th

e Board c

ommit

tees ar

e compo

sed of

ind

epend

ent no

n-execut

ive dire

ctor

s (INEDs

) w

ho bri

ng a diver

st

y of sk

ills

, exper

ienc

e and kn

owled

ge to th

e discus

son,

and p

lay an imp

ort

ant rol

e in supp

ort

ing the B

oard.

Writ

ten T

s of Ref

eren

ce fo

r the B

oard a

nd it

s com

mit

tee

s can b

e view

ed at

sc.com/termsofreference

Standard

Chartered P

oup Chi

ef Execu

tive

Audit Committee

vers

ight an

d revi

ew of ma

tte

rs re

lati

to ﬁn

anca

l repo

rti

ng, t

he Gr

oup’

s in

ter

nal

controls

and internal ﬁ

nanca

l controls,

and the

work undertaken

by Conduct,

Financal Crime & Compliance, Group

Internal A

udit and

roup

’

s Statutory

Audi

tor, Ern

st & Y

oun

g LLP (E

Y).

Culture and Sus

tainablity

Committee

vers

ight an

d revi

ew of th

e Gro

’s

culture and key sustainablit

y priorties.

Board R

isk Committee

vers

ight an

d revi

ew of th

e Gro

’s Ris

Appetite Statement, the appropriateness and

effectiveness of the Group

’

s risk management

systems and

the princpal

isks, inc

ludng

Clim

ate R

isk

, to th

e Grou

’s bus

ines

Furthermore, considerat

on of the

implcations

of material r

egulator

y c

hange proposals

and due d

ilgence on material

acquistions

and disposal

page 116

page 123

page 130

Gov

rnance and

Nominaton Committee

vers

ight an

d revi

ew of Bo

ard an

executive succes

sion, overall

oard

effectiveness and

corporate

gove

rnance issues.

page 133

Board Financal Crime Risk Commit

tee

vers

ight an

d revi

ew of th

e ef

fect

iven

ess o

e Gro

’s pol

ices

, pro

cedu

res

, sys

tem

controls and as

surance arrangement

designed to i

dentfy,

sess, manage,

onitor

and prev

ent and/

or detect money laundering,

non-compliance

with sanctions, briber

cor

ptio

n and ta

x cri

me by th

ird par

tie

page 138

Remuneration Committee

Overs

ight

review of remuneration

share pl

ans and

other incentv

page 14

e Boar

d must a

ct wit

h int

egr

ty a

nd is

collectively responsible

for establishng the

mpany

’s purp

ose

, value

s and st

rate

gy,

pro

mot

ing it

s cul

tur

e, over

see

ing it

conduct

and affairs for pr

omoting the

lon

g-te

rm suc

ces

s of the G

rou

p, and

ensuring leadership withn

a framework

of ef

ctiv

e cont

rols

e Boar

d set

s th

e stra

tegi

c dire

cton o

e Gro

up, appr

oves th

e str

ateg

y and t

akes

e appro

pri

ate ac

tion t

o ens

ure th

at th

oup is s

uita

bly re

sou

rced t

o achi

eve it

strategic aspiratons.

e Boar

d cons

ider

s th

e impa

ct of it

ciso

ns and i

ts re

spo

nsib

lit

es to al

l of the

Group

’s

stakeholders, includng emplo

yees,

shareholders, regulators and gov

nments,

clients, suppliers, the environment and the

communites in which it operates.

The Board

discharges its responsi

blites

dir

ectl

y or, in orde

r to as

sist i

t in car

yin

t its f

ctio

n of ens

uri

ng ef

fect

ive

independent oversight a

nd stewar

dship,

delegates specifed responsiblites

s comm

itt

ees

. Det

ail of h

ow the B

oard

ulﬁlle

d it

s resp

ons

ibli

tes in 202

1, as we

as key t

opic

s disc

uss

ed an

d cons

ider

ed by

e Boar

d comm

itte

, can be f

ound i

n this

Directors’ report.

Bio

grap

hes f

or eac

h dire

ctor a

re set o

ut on

ges 9

1 to 94.

The Group Chief

xecutive

is responsible

for t

he ma

nage

men

t of all a

spe

cts o

f the

Group

’

s businesses, devel

oping the strategy

in co

njun

cton w

ith t

he Gr

oup Ch

airm

an and

the Board, and

leading its implementaton.

The Board delegates

aut

hority for the

operational management

of the Group

’s

sine

ss to t

he Gr

oup Ch

ief E

xecu

tive f

further delegation by hi

m in

resp

ect

mat

ter

s th

at are ne

ces

sar

y f

or the e

ecti

day-to-day running

and management of

the business. The

Board holds the

roup

Chief Execu

tive accountable in dischargng

his delegated responsib

lites.

Management T

eam

The Management T

eam comprises the

oup Ch

ief E

xecu

tive a

nd the G

rou

p Chie

Financal Ofﬁcer

, regi

onal CEOs, client

gmen

t CEOs

, and ou

r glob

al f

unct

ion

ads

. It has r

esp

ons

iblit

y f

or exec

utin

e stra

teg

. De

tail

s of th

e Gro

’s

Man

age

ment T

am can b

e foun

d on

ges 95 t

o 97

103

Standard Chartered

– Ann

ual Rep

ort 202

Directors’ report

Our Boa

rd meetings

The Board is committed to

ainta

ning a comprehensive

sch

edul

e of mee

tings a

nd a rolli

ng agen

da to en

sure it

s tim

is us

ed mos

t eff

ecti

vely and e

fﬁcen

tly

, an

d is sup

port

ed by the

Gro

up Com

pany Se

creta

y to facilt

ate thi

s. Fle

xiblit

y in t

pro

gramme i

s impor

tant a

nd per

mit

s key items t

o be add

to any ag

enda s

o that th

e Boar

d can focu

s on evolv

ing and

important matters at the most appropriate time.

Perform

ance against deliver

y of the agre

ed ke

y ﬁnan

cal

pri

orti

es is rev

iewed at ever

y s

ched

uled m

eeti

ng, wi

particular reference

to the detailed Group management

acco

unt

s. Th

e Grou

p Chief E

xecut

ive and G

roup Ch

ief

Financal Ofﬁcer comment on cur

rent trading, bu

siness

performance, the market, col

agues, relev

ant stakeholders,

and regulatory and external dev

elopment

s at

ach

cheduled

eting

, and pre

sent co

mpara

tive dat

a and clie

nt insg

ht.

In add

iton

, the Gr

oup Chie

f Risk Of

ﬁcer p

erio

dcally at

tend

eting

s to upd

ate th

e Board o

n key risk

The G

roup C

hairm

an hold

s INED-

only m

eeti

ngs ahe

of eac

h scheduled

Board meetin

g, whi

ch pro

vides

the

opportunit

y for d

iscusson on

y agenda items and

other matte

s with

out the

ecutive

directors and

management present.

Sir Ia

in Lobba

n, who i

s engag

ed by the B

oard t

o act as an

ind

epend

ent ad

vise

r to the B

oard an

d its co

mmitt

ees on

ber s

ecur

y and cy

ber t

hreat m

anage

ment

, atte

nded a

num

ber of B

oard an

d commit

tee me

etin

gs to prov

ide an

ind

epend

ent and c

urren

t view on t

he Gro

’s progre

ss in

thi

s area. T

he Boa

rd cont

inue to ﬁn

d Sir Iain’s inpu

t relevant

practical and challen

ging. In 20

, Sir Iain

’

s app

ointment was

ren

ewed for a f

ther 12-month t

erm.

Our Boa

rd com

mittees

The B

oard p

laces s

ignﬁcant re

liance o

n its co

mmitt

ees by

delegating a broad r

ange of responsiblites

and issues to

the

m. It th

erefo

re rema

ins cr

ucial th

at ef

fecti

ve linkage

s are

in pla

ce bet

en the co

mmitt

ees an

d the Bo

ard as a wh

ole,

not l

east a

s it is imp

ractcab

le for all I

NEDs to b

e memb

ers

of all o

f the com

mitte

es. M

echan

isms ar

e in place t

facil

tate these lin

kages, includ

ng ensuring that ther

e are

no ga

ps or unn

eces

sar

y du

plicat

ons be

twe

en the r

emit

of each committee and

overlapping

embership

between Boar

d committ

ees wher

e necessary

. Alongsi

interconnected committee membership, the Board receiv

a wr

itten s

ummar

y o

f each o

f the com

mitte

e’

s m

eeti

ngs

and ver

bal up

date

s at the B

oard, w

here ap

propr

iate.

Fur

ther de

tails o

n each co

mmitt

ee, inc

ludng t

heir over

sight

and fo

cus du

ring 2021

, can be fou

nd in th

e Board c

ommit

tee

rep

ort

s star

ting o

n page 11

Dev

opment of B

oard act

ivties in 2

As t

he pan

demic co

ntinu

ed int

o 20

1, the B

oard an

d its

comm

itte

es main

taned t

heir ut

ilsat

ion of in

teract

ve

technology to ensure agile and authentic engagement.

The m

ost app

ropr

iate for

mat fo

r each B

oard m

eetin

was as

ses

sed by t

he Gro

up Chair

man, w

ith su

ppor

t from

the G

roup C

omp

any Secre

tar

, o

n a case-by-c

ase ba

sis.

Thi

s was ess

enti

al due to evol

ving e

xtern

al fact

ors s

uch as

travel

restrictons, with

some meetings bei

ng held as

a hybr

id but t

he vast m

ajort

y h

eld ent

irely v

irt

ually.

Ove

rall, th

e Boar

d adjus

ted well t

o a ﬂuid app

roach t

eting f

orma

, and irr

espe

ctve of p

hysical lo

catio

n and

tim

e zone, ea

ch direc

tor was ab

le to int

eract ef

fec

tivel

y with

other Board members

As wa

s the ca

se last ye

, t

he leng

th of sc

hedu

led Bo

ard

eting

s was adju

sted a

nd a numb

er of ad h

oc mee

ting

and informal sessions were orga

nised. This enhancement

to th

e Boar

d’s program

me hel

ped up

hold an

d prote

considered and c

ollaborative discusson on

key items.

The t

imeln

e on this p

age sh

ows the B

oard

’

s c

ollect

ive

engagement throughout the year

Boar

d activt

ies durin

g 20

January

ebruary

March

April

May

June

July

August

September

October

Nov

ember

December

Scheduled

meet

ing

Key

Informal ses

sion

Ad hoc m

eet

ing

104

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Corporate gov

nanc

Boar

d compos

iton, r

oles and at

tendan

ce in 2021

Group Chairm

J Viñals

Dir

ecto

rs p

art

icp

ated e

lec

tron

ical

ly at t

he AGM. F

urt

her d

etai

l can be f

oun

d on pa

ge 112

A num

ber o

f ad ho

c mee

ting

s were a

rra

nge

d dur

ing th

e year. A

s they t

ook p

lace o

side o

f the s

che

dul

ard ca

lend

ar, it imp

act

ed th

e abil

ty o

f our d

irec

tor

s to at

tend t

hes

e mee

tin

gs. A

ll dir

ecto

rs w

ho wer

able t

o att

end re

cei

ved ac

comp

anyi

ng ma

ter

ial an

d had op

por

tun

ite

s to pr

ovid

e comm

ent

s to th

ard. F

urt

her de

tai

l is prov

ide

d bel

ow:

–

ndy H

alfo

rd was u

nabl

e to at

ten

d the ad h

oc me

eti

ng he

ld on 3 J

une 202

1 due to a m

edi

cal

appointment

–

ron G

rot

e and Ph

il Riv

ett we

re una

ble t

o atte

nd th

e ad ho

c mee

tin

g held o

n 18 Oc

tob

er 2021 a

s a resu

of long-standing external board commitment

e bio

grap

hes o

f eac

h dire

cto

r are se

t out o

pag

es 9

1 to 94

e role

s of th

e Gr

oup Ch

air

man an

d Gr

oup Ch

ief E

xec

uti

ve are

dis

tn

ct fro

m one a

not

her a

nd are c

lea

rly d

eﬁn

ed in de

tai

led r

ole

scr

ipt

ons w

hich c

an be v

iewe

d at

sc.com/

roledescriptons

The Group Chairman is committed to ensuring optimal Board e

ffectiveness. A key

mechanism to drive this is the a

ppropriate compositon and bala

e of indviduals.

The Board is c

omp

osed of

a majort

y of

independent non-ex

ecuti

e directors.

tail r

ega

rdin

g Boa

rd di

ver

st

y can b

e fou

nd wit

hn t

he Go

vern

ance a

nd No

min

ato

n Com

mit

tee r

epo

rt on

age

s 13

3 to 137

Group Chief Financal Ofﬁcer

A N Half

ord

Responsiblite

Responsible for

leading the Board, ensuring

s ef

fect

iven

ess i

n all as

pect

s of i

ts ro

and dev

eloping the Group

’

s culture with

e Gro

up Chie

f Exe

cut

ive. Pro

mot

es hig

standards of inte

grty and governance

the G

roup a

nd en

sure

s eff

ect

ive

communicaton

and understanding

bet

ween

the Board, management,

shareholders and wider stak

olders.

Executiv

e directors

oup C

hief E

xecut

ive

W T Wint

ers

Responsiblite

Responsible for

the management of

all a

spe

cts o

f the G

rou

’s busi

nes

ses

developing

the strategy in conjunc

ton

wit

h the G

rou

p Chai

rman a

nd th

e Boa

and leading

s implementat

on.

Attendance

Scheduled

8/8

Ad ho

8/8

Responsiblite

Responsible for

Finance, Corporate T

reasur

Strategy

, Group Corporate Development,

Group Inv

estor Relations, Property and

Supply Chain

anagement

unctions.

Attendance

Scheduled

8/8

Ad ho

8/8

Independent non-executiv

e director

Deput

y Chairman

N Khe

raj

Senior Independent Director

C M Hod

gson

, CBE

P G Rive

G Huey Eva

ns, CB

J M Whit

brea

D P Con

ner

B E Gro

Responsiblite

Provides

supp

ort a

guidance to the Group

Chairman as requir

ed and, in

coordinaton

wit

h the G

rou

p Chai

rman

, act

s as an

amb

ass

ado

r for t

he Bo

ard and t

he G

roup

in their

relationshps with gov

nments,

regulators, colleagues and cl

ients. Deputises

for t

he G

roup C

hair

man at B

oard

, gen

eral

shareholder

, or

other meetings when the

Group Chairman is

unable to attend.

Responsiblite

Prov

ides a s

oun

ding b

oard f

or th

e Gro

Chairman and discus

ses concerns tha

able t

o be res

olve

d thr

ough t

he no

rma

cha

nnel

s or wh

ere su

ch con

tact w

ould b

inapproprate with shareholders and

ther

stakeholder

s. Chairs the Gover

nance and

Nominaton Committee when considerng

suc

ces

sion o

f the G

roup C

hair

man

. Is

available

to shareholders if they hav

con

cer

ns th

at cann

ot be r

esol

ved o

r for wh

ich

the normal

channels would

inapproprate.

n be con

tact

ed vi

a the G

roup C

omp

any

cret

y at 1 B

asin

ghall Aven

ue, Lon

don

2V 5D

Attendance

Scheduled

8/8

Ad ho

8/8

Attendance

Scheduled

8/8

Ad ho

8/8

Attendance

Scheduled

8/8

Ad ho

Responsiblite

Provide

an independent perspective, constructive

challenge,

and monitor

erformance a

nd deliver

of t

he str

ate

gy wit

hn th

e Risk A

ppe

tite a

nd con

trol

s set

by th

e Boar

Attendance

Scheduled

Ad h

8/8

1/1

2/2

8/8

N Okonjo-Iweala

INEDs that hav

stepped down

Ngozi

Okonjo-Iw

eala

stepped down

om the B

oar

d on

28Feb

y 2021.

INEDs that

hav

e jo

ned

M Ram

Maria Ramos

jo

ned the

Board

as an I

NED on

1 Jan

uar

y 2021

105

Standard Chartered

– Annu

al Repo

rt 202

Directors’ report

Director inducton

All n

ew Board m

embe

rs are g

iven an ext

ensi

ve and rob

ust

ind

ucton p

rogram

me whic

h is tailo

red to re

ﬂect th

eir ski

lls

and ex

per

ience. T

his is to e

nsure a

ll direct

ors a

re in a stro

pos

iton to m

ake posi

tve cont

ribu

tons f

rom t

he out

set o

their tenures.

A for

malis

ed fr

amewor

k for ind

ucton p

rogram

mes

guarantees key topics are co

vered

, i

ncludng informaton

on a di

vers

e range of m

atte

rs re

latin

g to the ro

le and

res

pons

iblite

s of a dire

ctor as we

ll as our b

usine

sse

s and

markets. Each i

duct

on t

ypically c

sists of a

combinaton

of me

etin

gs wit

h exist

ng Boa

rd memb

ers a

nd seni

or staf

New B

oard me

mber

s are als

o given t

he opp

ort

unit

y to

att

end key mana

geme

nt mee

tings a

nd eng

age wit

h key

stake

holde

rs su

ch as invest

ors an

d clien

. In light of t

cont

inue

d impac

t of the p

andem

ic, vi

sts t

o key market

acro

ss our f

oot

print h

ave be

en rest

ricte

d and t

ypi

cally

replaced with virtual engagements.

The Group Corporate Secretariat function supports the

INED

s as they u

nder

take the

ir induc

ton pro

gramm

es, wh

ich

are t

ically co

mplet

ed wit

hn the ﬁr

st si

x to nine m

onth

of an IN

ED appoi

ntme

nt. Th

e progr

ammes a

re regu

larl

revi

ewed and t

ake into acco

unt dire

ctor

s’ fee

dback t

ensure continuous dev

elopment and impro

vement

One n

ew direc

tor

, M

aria Ram

os, was a

ppoin

ted to t

he Bo

ard

in Januar

y 2021. Maria bring

s highly applicable skills and a

range of kno

ledge rele

vant to Board debate

and discusson.

She possesses deep C

, banking, comme

rcial

, ﬁnanca

pol

icy an

d inter

nato

nal exp

erie

nce, as we

ll as con

sidera

ble

non-executive

experience, having ser

ved on internatonal

ards. Pr

ior to b

eing ap

point

ed to th

e Boar

d, the Aud

and B

oard Ris

k commi

ttee

s, and l

ater th

e Remune

ratio

comm

itte

e, Mari

a was given a n

umbe

r of indu

cton se

ssio

to en

sure a sm

oot

h trans

iton int

o takin

g up her ro

les

On jon

ing th

e Board a

nd commi

ttee

s, sh

e under

too

a detailed ind

ucton programme. Furth

er detail can be

fou

nd on pa

ge 106 an

d 107

Ongoing de

velopment plans

Continuous train

ng and de

velopment beyond

a director’

inducton pla

n is essential to mainta

ning a highly engaged,

effective and well-

informe

Board. Ongoing development

plan

s also h

elp ens

ure dire

ctor

s lea

d with in

tegr

ty a

prom

ote th

e Gro

’

s c

ultur

e, pur

pose a

nd value

Mandato

y learning and trainng are impor

tant element

of dir

ector

s’ ﬁt and p

roper a

sse

ssme

nts a

s manda

ted

und

er the S

enior M

anage

rs Regi

me. Dur

ing th

e year, all

directors received a

combinaton of mandatory learning

and trainng, inter

nal and external br

iefng

s, presentat

ions

fro

m gues

t spea

kers

, and pap

ers o

n a wide ra

nge of to

pics

to en

sure th

e direc

tors a

re well-info

rme

d and tha

t the Bo

ard

remains highly effective. The Board

committe

members

als

o recei

ved spe

cif

c trainn

g relevan

t to the wo

rk of th

eir

respective

committees. The format of

ongoing train

ng

varied, includ

ng formal refresher sessions and informal

eting

s. Th

e trainn

g covered a var

iet

y of to

pics th

rough

out

the ye

, t

he majo

rt

y of whi

ch were he

ld vir

tuall

y in light

of th

e conti

nued im

pact of t

he pan

demic

. The t

able be

low

give

s fur

ther d

etail o

n who re

ceived t

hes

e brief

n

gs.

The G

roup C

hairm

an review

s with e

ach dir

ector t

heir

trai

nng and d

evelopm

ent ne

eds bo

th in re

al time an

as p

art of t

he annu

al per

form

ance c

ycle. Whe

re it is

recogn

ised that t

he Boa

rd or

indvidu

al d

irectors need

rth

er train

ng or devel

opme

nt in key area

s, addi

tonal

ses

sion

s are arr

anged w

ith su

bject m

atter e

xper

All of t

he dire

ctor

s have a

ccess t

o the ad

vice of t

he Gro

Com

pany Se

creta

, who p

rovide

s suppo

rt to t

he Boa

and is responsible

for advisng the Board on go

vernance

matters. Directors also have access to

independent

prof

ess

ional ad

vice a

t the Gr

oup

’s expe

nse wh

ere th

ey judge

it neces

sar

y to discharge their resp

onsiblites as director

2021 di

rector tr

ainng

view

Induction

Directors’

duties and

regulator

updates

Acti

vsm

Digtal

currencies

echnology

Climate-

matters

Climate Risk

Global

economic

outlook

J Viñals

W T Wint

ers

A N Half

ord

D P Co

nner

B E Gr

ote

C M Ho

dgso

n, CBE

G Hue

y Evans, C

N Kh

eraj

N Okonj

o-Iweala

M Ram

P G Rive

J M Whi

tbre

Applica

ble to

director

who received inducton

trainng during 2

021

rainng took

place via

circulaton of

material and

oppor

tunity to ra

ise questions with

external counsel and

the Group Compan

y Secretar

rainng was

pecifcally designe

d for

on-executive directors

ozi Oko

njo

-Iwe

ala st

epp

ed do

wn fr

om th

e Boa

rd on 28 F

ebr

uar

y 202

1. Mo

st tr

ainn

g se

ssi

ons id

ent

ﬁed a

bove t

ook p

lace a

fte

r thi

s dat

Mar

ia Ram

os jo

ned t

he Bo

ard o

n 1 Janu

y 2021

Director attended

ses

sion

Dir

ect

or did n

ot at

ten

d the s

sion b

ut re

cei

ved ac

com

pany

ing ma

ter

ial a

nd ha

d opp

ort

uni

tes t

o rais

e que

sti

ons w

ith t

he G

roup C

hai

rma

n and G

roup

Compan

y Secretary

106

Standard Chartered

– A

nnu

al Rep

ort 202

Directors’ report

Corporate gov

nanc

Spotlight

Boar

d induc

ton

An in

sgh

t into M

aria Ra

mos

’ tail

ored B

oar

d prog

ramm

Key t

opi

The i

ndu

on p

rog

ram

me cover

ed a wi

de ra

nge o

f act

iv

tie

s, i

ncl

udn

Board, Board

commi

ttees

and s

trategy

•

held r

egul

ar me

etin

gs wi

th Gr

oup Ch

airm

an and G

rou

p Com

pany Se

cre

tar

, w

hich i

nclu

ded a

n over

of t

he Bo

ard as we

ll as th

e Gove

rna

nce an

d Nomi

nato

n Com

mitt

•

held

one-to-one meetings with Group Chief

xecutive

, Audi

t Committee Chair

, Board Risk

ommittee

Chair

, Senior Independent

Director and Remuner

ation Committee Cha

•

brie

fn

g on over

iew of B

oar

d comm

itte

es wi

th Cul

tur

e and Su

stai

nabl

y Comm

itt

ee Cha

and Board Financal Crime Risk Committe

e Chair

•

held

one-to-one engagements with INEDs

•

brie

fn

g on th

e Gro

’s str

ate

gic ag

enda a

nd cor

e stra

tegi

c proj

ect

s fro

m Glo

bal He

ad, S

trat

egy

•

sepa

rate co

mmit

tee i

ndu

cton

s were al

so un

der

taken d

uri

ng the y

ear

Conduct, ﬁnancal

crime and compliance

•

brie

fn

gs on ove

view o

f and in

tro

duct

on to C

ompl

ianc

e with G

rou

p Hea

d Con

duct

, Finan

cal

Crime and Complian

ce and

Group Chief Risk Of

ﬁcer

•

Speak

up/

histleblo

wng discusson with

Compliance team

•

meeting with Glob

al Head of F

ancal Crime Compliance, Condu

& Co

mpliance Framework concerning

Financal Crime Compliance Programme

•

regulatory requirements and conduc

t train

ng with Group Regulatory Advisor and Compli

ance team

•

briefngs on r

egulator

y a

ffairs, Senior Managers Regime,

ystems a

controls, treating customers fairly and

conduct of

busines

ith

roup

Regulator

y Advisor a

nd Compliance

team

•

discu

sso

n on int

ern

al gover

nan

ce inc

ludn

g chan

ges co

nne

cted t

o hub e

ntit

y st

ctur

e wit

h Gro

Regulatory Advisor

•

meetings

with Fi

nancal Conduct A

hority and Prudential

Regulation A

uthor

ity

•

brie

fn

g on th

e Gro

’s Co

nduc

t prog

ramm

e and Co

de of C

ond

uct wi

th Gr

oup He

ad Co

ndu

ct,

Financal Crime and Compliance

•

meeting with Glob

al Head, Sanctions Co

mpliance

Corporate gov

ernance

•

over

iew of th

e UK and H

K corp

orat

e govern

ance l

ands

cape w

ith Gr

oup Co

mpany S

ecre

tar

•

etin

g with e

xter

nal cou

nse

l on dire

ctor

s’ res

pons

iblit

es and d

utie

s as well a

s UK and H

ong Kon

legal framew

•

ief

ng on B

oard

, Boar

d commi

tte

e and ind

vid

ual dire

ctor eva

luat

ion wi

th Gro

up Co

mpany

Secret

ary

•

discus

son

n Board trainng and dev

lopment programme with G

roup Company Secretar

•

dis

cuss

on on key gove

rnan

ce iss

ues af

cting t

he Co

mpany an

d shar

ehol

der fe

edba

ck fro

2020 AGM

•

ief

ng on m

arket

, inc

ludng s

hape o

f the s

hare re

gist

er and u

nder

stan

ding t

he vie

ws of ma

jor

insttutional i

nvestors with Global Head, I

estor R

elations

•

over

iew of exe

cuti

ve remu

nerat

ion, i

nclu

dng po

licy, tren

ds and i

ssue

s aff

ecti

ng the G

rou

p with

obal H

ead, Pe

rfor

man

ce and Rewar

M Ramo

Independent Non-Executive

Director

In ligh

t of the con

tinued im

pact of t

pande

mic y

ur induct

on progr

amme had

to be un

dertaken remo

tely

. How did y

ﬁnd t

hat work

The extensiv

e challenges

includng trav

el restrictons

imp

osed by COVID-

9 meant t

hat th

e induc

ton pro

gramme

for an I

NED such a

s myself h

ad to be a

dapte

d to new wa

of wor

king

. The ext

ensi

ve progra

mme of in

ducto

n was

str

uct

ured so t

hat it co

uld be u

nder

taken ent

irel

y remot

ely

thr

ough th

e use of e

lectr

onic fa

cilties

. The pr

ogram

me was

comp

lete

d over a six mo

nth pe

rio

A signﬁc

ant amou

nt of th

ought a

nd plan

ning went i

nto

the d

esign o

f the pro

gramm

e to pri

orti

se the key are

of wor

k and re

spon

siblit

y so t

hat I cou

ld par

ticpa

appr

opri

ately i

n Board a

nd commi

ttee wo

, no matt

whe

re I was phys

ically l

ocate

Int

vie

w with

Mar

ia R

mos

107

Standard Chartered

– Annu

al Repo

rt 2021

Directors’ report

Key t

opi

The i

ndu

on p

rog

ram

me cover

ed a wi

de ra

nge o

f act

iv

tie

s, i

ncl

udn

Client segments,

oduc

t grou

ps an

regiona

l businesses

•

meetings

with Management T

eam members responsible for Corporate, Commerc

ial and Institutonal

Bankin

g, includng Corporat

e F

inan

; Financal Market

rans

action Banking; Retail Banking and W

ealth

Managem

ent; and Private Banking

•

meet

ing w

ith Ma

nage

men

t T

eam me

mbe

rs re

spo

nsib

le for A

ica and M

iddl

e East re

gio

n; ASE

AN an

uth A

sia re

gio

n; Gre

ater C

hina an

d Nor

th A

sia re

gion; an

d Euro

pe and A

mer

icas r

egio

Ris

k and co

ntr

•

meet

ing w

ith th

e Gro

up Chi

ef Ris

k Ofﬁ

cer

•

brie

fn

g on an

ti-br

iber

y a

nd cor

ptio

n (ABC) wi

th He

ad ABC

, St

rate

gy, Gover

nan

ce and Pro

gram

Management

•

meet

ing w

ith G

roup C

hief O

pera

ting O

fﬁc

Legal

•

session

on Legal function, regulatory environment and

government inv

estgations with Group

General Counsel

•

briefng on

litgation

atters with

Senior Legal

Coun

sel,

Disput

Resolution

Finance, taxation,

capital and liqudity

•

meeting with Grou

Chief Financal Ofﬁcer

•

sessi

on with Group

reasur

Aud

•

discu

sso

n wit

h Gro

up Hea

d, Int

ern

al Audi

•

meet

ing w

ith ext

ern

al au

ditor

s, E

•

brie

fn

g on Aud

it Com

mitt

ee w

ith Aud

it Com

mitt

ee Se

cre

tar

Peo

ple

•

brie

fn

g wit

h Glo

bal H

ead, H

uma

n Resou

rces o

n the G

rou

’s peop

le st

rate

, cul

ture a

nd My V

oic

e sur

vey

•

meet

ing w

ith G

loba

l Hea

d, Per

form

ance a

nd Rewar

d on rewar

d mat

ter

Corporate activty

brand and marketing

•

brie

fn

g on ro

le of Co

orat

e and Pu

blic A

ffa

irs w

ith G

roup H

ead

, Cor

pora

te Af

fai

rs, B

ran

d and Ma

rket

ing

•

corp

orat

e soci

al res

pon

sibl

y over

ew wit

h Gro

up He

ad, Co

rpo

rate A

air

s, Br

and an

d Marke

ting

•

meet

ing w

ith Eco

nomi

c Rese

arch te

am, i

nclu

dng ma

cro-

eco

nomi

c over

•

orporate development o

ver

view with Global Head, Corporate Dev

elopm

ent

•

over

vie

w of Bra

nd and M

arket

ing w

ith G

roup H

ead

, Cor

por

ate Af

fai

, Bran

d and Ma

rket

ing

echnology

erations

and inno

vaton

•

brie

fn

g fro

m Gro

up Chi

ef Inf

orm

atio

n Ofﬁ

cer on t

echn

olo

, o

per

atio

ns, d

igtal

, cy

ber an

d inno

vaton

agenda

•

meet

ing w

ith G

roup C

hief In

for

mati

on Se

cur

y Risk O

fﬁce

•

meet

ing w

ith G

loba

l Hea

d of SC V

ntu

res

Vis

ts t

o key market

•

due to t

he con

tinu

ed im

pact o

f the p

ande

mic

, vist

s to key m

arke

ts we

re sub

stit

ute

d wit

h vir

tual s

takeh

old

engagements. Vists to mark

ets will tak

e place once gl

obal travel

restr

ict

les

sen

How succ

essf

ul did you vie

w your ind

ucton

prog

ramme in pr

eparing you for Boa

rd and

committe

e discusson

he inducton programme was exceedingl

y successf

in pre

pari

ng me for t

he wor

k of the B

oard an

d commit

tees

The m

ater

ials pr

epare

d were fo

cused a

nd deal

t with

rel

evant iss

ues. I

mpor

tant

, I ha

d the opp

ort

unit

y to m

eet

(

vir

tua

lly

) a lot o

f the exe

cutive l

eade

rshi

p of the B

ank

arou

nd the wo

rld an

d intera

ct with t

hem.

o what exte

nt did your induct

on progr

amme

provide an ins

ght into t

he Grou

’

s c

ulture?

. Al

thou

gh the int

eract

ons were a

ll vir

tual, t

hey prov

ided

me w

ith imp

orta

nt insgh

ts in

to the B

ank

’s cultu

re. The s

ense

of pu

rpo

se was vi

sble, t

he commi

tmen

t to sust

ainabli

ty,

the r

esilen

ce, care an

d resp

ect for p

eopl

e were evi

dent

Mor

eover

, a c

ultur

e of ope

nnes

s and tra

nspar

enc

y prevaile

in my inte

racto

ns wit

h ever

yone I en

gage

d with

How ﬂexible did you ﬁnd t

he induc

ton

progr

amme

The programme is

ﬂexible and each di

rector elects

top

ics for d

eep di

ves as ne

cess

. I was ab

le to ba

lance

this against

a broad range

of subjects

How effect

ly has your induc

ton

progr

amme tran

sitoned into on

going

engagement?

e progra

mme prov

ided m

e with t

he nece

ssar

base for engagement with ke

y stakeholders

oth

intern

al and external.

108

Standard Chartered

– Ann

ual Re

por

t 2021

Directors’ report

Corporate gov

nanc

The 2021 B

oard an

d commit

tees’ e

ffe

ctive

ness r

eview was

cond

ucte

d inter

nally, facilta

ted by th

e Grou

p Comp

any

cretar

, and i

n accord

ance wit

h the UK C

orp

orate

Gove

rna

nce Co

de.

Progre

ss again

st the 2

21 Actio

n P

lan

The 2021 Act

ion Plan s

et out a n

umber o

f actio

ns to be a

chieved

foll

owing t

he inte

rnal B

oard evalu

ation c

onduc

ted in 2020 and

buil

t on tho

se ambit

ons se

t follow

ing th

e exter

nally f

aciltat

revi

ews by Inde

pend

ent Bo

ard Evalua

tion an

d the PR

A in

2019

. The 2021 Act

ion Plan was r

egul

arly r

eviewed d

urin

g the

year an

d goo

d progre

ss ha

d been m

ade aga

inst ma

ny of the

acti

ons as ev

iden

ced by thi

s year’s inte

rnal B

oard ef

fec

tiven

ess

revi

. Th

e contin

ued lim

tatio

ns to tr

avel dur

ing th

e year ha

imp

acted o

n the de

liver

y of s

ome sp

ecif

c act

ions w

hich ha

en carr

ied fo

ward to 2022

21 Board e

ffective

nes

revie

Questionnares we

re sent to

ach

director for completion

in res

pect o

f the Bo

ard and r

elevant co

mmitt

ees. T

hese

que

stion

nares s

ought t

o draw o

ut and ex

plore s

ome of t

the

mes fo

r the prev

ious ye

ar’s review a

s well as p

ose so

me more

wide-ra

nging a

nd probing questi

s. The

results were c

ompiled

into a d

etail

ed rep

ort an

d conclu

sion

s were dis

cuss

ed wit

the Gro

up Chairman and by the Governance an

d Nominaton

Com

mitte

e ahea

d of a Bo

ard disc

usson

. At the B

oard, t

he key

ﬁndn

gs and re

comme

ndat

ions wer

e prese

nted a

long wi

th an

Actio

n Plan for 202

2, wh

ich was th

en approve

d. Det

ails of t

key obse

vation

s fro

m this yea

r’s review an

d the agr

eed Acti

Plan ar

e set ou

t on this p

age.

The B

oard

’

s s

ix comm

itte

es were al

so incl

uded a

s part o

f the

fect

ivenes

s revie

. Th

e obser

vatio

ns and key th

emes we

sha

red wit

h the re

levant com

mitte

e Chair

s bef

ore bein

circulated

to each of

the committees and

action plans for 2

appr

oved. De

tails of t

he key obs

vatio

ns and act

ion pl

ans

for e

ach of t

he commi

ttee

s can be fo

und wi

thn eac

h of the

committees’ reports

ey obs

ervation

s from t

he 2021 internal

effectiv

eness re

vie

•

The B

oard h

as cont

inued t

o remai

n effe

ctive i

n meet

ing

its priorties despite the c

ont

inued

VID-constrained

environment

•

Recog

niton o

f the po

sitve ch

allen

ge provi

ded to t

strategy and helpful addit

onal per

spective

on a ra

of is

sues f

rom gu

est sp

eaker

s and th

e ‘blu

e sk

y ses

sions’

•

od pro

gres

s made on u

nder

stan

ding of t

he Gro

’s

Reso

lvabilt

y pl

ans but a n

eed t

o ensur

e they con

tinue

to deve

lop and re

main pa

rt of t

he for

ward a

gend

•

Sup

por

t for the r

eallo

catio

n of the wor

k of th

e Board

Financal Crime Risk Commit

tee (BFCRC) into a

comb

inato

n of the Au

dit Com

mitte

e, Boar

d Risk

Committ

ee (BRC

) and Boa

•

Scope to cont

inue trainng on the rapidly changin

lan

dscap

e of emer

ging te

chnol

ogy an

d risk

202

2 Actio

n Plan

•

Enhance the B

oard’s

sghts into what cus

tomer

pro

duct nu

mber

s dri

ve revenue gr

owth, h

ow custo

mer

view t

he Ban

k and it

s brand

, and how o

ur intia

tves are

perceived relativ

e to competitors

•

Devot

e Boar

d time to a b

roade

r discu

sson o

f the

busine

ss enabling greate

r c

onside

raton of social

tre

nds, d

emog

raphic

s and te

chnol

ogy

, a

s well as o

comp

etit

ors an

d tren

ds fro

m non-ba

nk/ﬁnanca

l ser

ces

competitors

•

Con

side

r reallo

catin

g the wor

k of the B

FCRC to th

e BRC

Audit C

ommit

tee an

d Board i

n 20

, mainta

ning str

ong

over

sight of ﬁ

nancal cr

ime r

isks

•

Con

tinue t

o focu

s on Resol

vabilt

y and en

sure t

his is

embedded into the Board’

s for

ward

agenda

•

Review t

he key per

form

ance indc

ator

s and th

eir

sco

pe to en

sure new d

river

s of bu

sines

s growt

h and

sustainablit

y are meas

ured, withn an appropriat

dashboard

•

Contin

ue to build the Board

’

s trainng program

me,

scheduling

urther sessions o

n emerg

ing technol

ogy and

sks

, digtal a

sset

s, d

ata, an

d curr

ent use

s of art

cial

inte

llgen

ce (

. E

xpl

ore th

e use of on

line mo

dule

s and

dcast

s to en

able gre

ater ﬂe

xiblit

y an

d maxi

mse th

use o

f direct

ors’ t

ime

d ef

fectiv

ess

Internal e

valuation process

view approach

agreed

Questionna

res

completed

aluation

and report

Findngs shar

ed with

committe

e Chairs

Fin

dng

s dis

cus

sed wi

th t

he Gr

oup

Chairman and Governance and

Nominaton Committee

Board discusson a

nd agreed

Acti

on Plan f

or 2022

109

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Direct

ors’ perf

ormance

The G

roup C

hairm

an led t

he evalua

tion of in

dvid

ual dire

ctor

performance during 20

21. These one-to-one sessions provided

an imp

ort

ant opp

ort

unit

y for e

ach of t

he INEDs t

o discu

ss wit

José Vi

ñals, among other thi

•

their per

formance again

st core competencie

s and their

indvidual

effe

tiveness

•

the

ir time co

mmitm

ent to t

he Gro

up, inclu

dng (

ere

rel

evant

) t

he pot

entia

l impac

t of any out

side i

ntere

sts

•

the

ir ongo

ing devel

opmen

t and tra

inng ne

eds

•

the B

oard

’

s c

ompos

iton

, takin

g into acc

ount w

hen ea

INED e

nvisag

ed ste

pping d

own fro

m the Bo

ard

•

the current and future committee membership and

str

ucture

•

their engagement acr

s the

roup

The

se per

for

mance rev

iews ar

e used a

s the ba

sis fo

recommending the re-election

of directors by shar

eholders

at th

e 20

2 AGM and t

o assi

st the G

roup Ch

airm

an with

his a

sses

smen

t of the I

NEDs’ com

pete

ncies

. In addit

on, th

Group Ch

airman has respo

nsiblity fo

r assessin

g annually the

ﬁtne

ss and p

ropr

iet

y of th

e Comp

any’s INEDs and t

he Gr

oup

Chie

f Exec

utive O

fﬁcer u

nder t

he Sen

ior Man

ager

s Regime.

The

se as

sess

ment

s were ca

rrie

d out in r

espe

ct of eac

h INED

and t

he Gro

up Chief E

xec

utive at t

he end o

f 20

Grou

p Chairman’

s perf

ormance

The Senior Independent Director

, Christne Hodgson, oversaw

the p

roces

s of rev

iewng th

e Gro

up Chair

man’s perfo

rman

ce.

With

out th

e Gro

up Chair

man pre

sent

, she sp

oke wit

h the

INED

s sepa

ratel

y to evaluat

e his pe

rfor

mance

, takin

g into

acco

unt th

e views o

f the execu

tive dir

ector

s. T

he fee

dbac

was co

llate

d, and con

solid

ated f

eedb

ack was sh

ared w

ith

José Viñals

Director independence

The Gov

nanc

e and Nominat

on Committee revie

ws the

independence of each

of the non-executive

directors

, taking

into a

ccoun

t any circums

tance

s likely to i

mpar, or which co

uld

impar

, their independence. R

ecommendation

s a

re then made

to the Board for

urther considerat

on.

In determin

ng the independence of

a non-executive

director

the B

oard co

nside

rs e

ach ind

vidua

l again

st the cr

iter

a set

out i

n the UK C

orp

orate G

overna

nce Co

de, the H

ong Kong

Listng R

ules and also considers their c

ontr

ibuton

and conduct

at Bo

ard me

eting

s, inc

ludng h

ow they de

mons

trate o

bject

judgement and independent thinkng.

The B

oard co

nside

rs all o

f the no

n-execu

tive dire

ctor

s to be

independent

of Standa

rd Chartered, conc

luding tha

t there

are no relation

shps or circumstances likely to impar any

INED’

s judgement.

Time commit

ment

r INEDs co

mmit suf

ﬁcent t

ime in dis

chargn

g their

respo

nsiblites as director

s of Standard Charte

red. In general,

we est

imate t

hat ea

ch INED sp

ent app

roximat

ely 35 t

o 7

days on Board-

related duties, and considerably more

for

tho

se wh

o chair or ar

e memb

ers o

f multi

ple comm

itte

es.

External d

irectorshps and other business

interests

ard memb

s hold ext

erna

l direct

ors

hps and ot

her ou

ide

business interests

. W

cognise

he sig

nﬁcant beneﬁts

that broader boardroom

exp

osure

provides for our dir

ectors.

However, we close

ly mon

itor th

e natu

re and qu

antit

y of

external direc

torshps our dir

ctors hold, i

n order to satisf

our

sel

ves tha

t any addit

onal app

ointm

ent

s will n

ot adver

sel

imp

act the

ir time co

mmitm

ent to t

heir rol

e at Stan

dard

Char

tere

d, and t

o ensur

e that all o

f our Bo

ard mem

ber

rem

ain comp

liant wi

th the PR

A dire

ctor

shp re

quirem

ent

s, as

well as

shareholder advisor

y groups’ ind

v

idual

guidance

on ‘over

-bo

arding’

. Th

ese re

quire

ment

s impo

se a limt o

n the

number of dir

ectorshps both ex

cutiv

e and i

ndependent

non-executiv

e directors are permitted to hold.

Det

ails of t

he dire

ctor

s’ exter

nal dire

ctor

shps ca

n be fou

nd in

the

ir biogr

aphes o

n page

s 91 to 94. Bef

ore com

mittn

g to an

additonal appointment, directors conﬁrm the e

istence of

any pot

enti

al or actu

al conﬂic

, that th

e role w

ill not b

reach

the

ir limt as s

et out by t

he PRA

, an

d provid

e the ne

cess

assurance that the appointment will

not adversely impact

the

ir abilt

y to co

ntinu

e to fu

lﬁl their r

ole as a di

recto

r of

the C

omp

any

. All dire

ctor

s cont

inue to h

old no m

ore th

the maximum number of d

irector

sh

ps permitte

under the

PRA rules.

Our est

ablished inter

nal processes en

sure that director

do no

t unde

rtake any new e

xtern

al appo

intme

nts w

itho

ﬁr

st recei

vng fo

rmal a

pproval of t

he Boa

rd. The B

oard h

delegated authorit

y to

make

such approva

ls to the Group

Chai

rman

, with t

he except

ion of hi

s own appo

intme

nts

. Of

tho

se INED

s who to

ok on new e

xtern

al dire

ctor

shps du

ring

the ye

, t

hree wer

e regar

ded as s

ignﬁcant dir

ector

shp

(

appo

inted t

o the b

oard of a li

sted co

mpany

) an

d as

suc

h were anno

unce

d to the m

arket in lin

e with o

ur list

ng

obligatons. F

ther detail

on the specif

c

appointment

s ar

prov

ided b

elow:

•

Jasmine Whitbread, i

dependent non

-executive director

was ap

point

ed Chair o

f the b

oard of T

rav

is Perk

ins pl

c with

fect f

rom 31 Ma

rch 2021, and t

o the bo

ard of C

ompa

gnie

Financ

ère Rich

emont SA a

s a non-e

xecuti

ve direct

or and a

member of its nominatons committee with effect from

8 September 20

•

Foll

owing Pet

ersh

ill Partn

ers p

lc’s Inital Pu

blic Of

fer

ing in

Lond

on on 28 Se

ptemb

er 2021, Na

guib Kh

eraj, D

eput

Chairman

, became Chairman of ano

ther public quot

mpa

Both dire

ctors indvid

ually discusse

d their respect

ive

appoint

ments wit

h the Group Chairm

an in advance of

acce

pting t

he pos

iton

s and eac

h provid

ed as

suranc

e that

the

ir appo

intme

nts wo

uld no

t impac

t their ab

ilties t

o devote

suf

ﬁcent t

ime and fo

cus to b

oth th

eir Bo

ard and co

mmitt

responsiblites.

Naguib Kheraj s

treamlined his c

ommitte

res

pons

iblite

s by stepp

ing down a

s a memb

er of th

Remuneration and

Audit committees

The B

oard

’

s e

xecuti

ve direct

ors ar

e per

mitte

d to hol

d only on

non-executiv

e directorshp. Of our

executive directors, Andy

Half

ord is th

e Seni

or Inde

pend

ent Dire

ctor, Chair of t

he Audit

Committee and member of the Nominaton

ommittee at

Mar

ks an

d Spen

cer Gro

up plc

, liste

d on the F

TSE 2

50, and B

ill

Winters is a non

-executive director

of Novartis International

AG, list

ed on SIX Sw

iss E

xchan

ge.

110

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

Corporate gov

nanc

Stak

eholder

engagement

Ensuring a

uthentic engagement

across our m

rkets

Clients

Suppliers

Regulators and

gov

ernm

ents

Employees

Inve

Societ

Stakeholder considerat

on and engagement form a c

ucial

asp

ect of B

oard de

cison-m

aking a

nd disc

usso

ns. Th

e Boar

als

o recog

nises t

his as s

ignﬁcant in it

s con

tinue

d review o

the G

roup’

s pur

pos

e, value

s and str

ateg

. Adjust

ment t

o the

format of tradit

onal engagement continued to be essential

in 2021, a

s was the ca

se dur

ing th

e prece

ding yea

Prio

r to the p

ande

mic, th

e Boar

d would v

ist dif

feren

mar

kets a

cross t

he Gr

oup

’s foot

. This wa

s a key

enabler of sta

keholder e

ngagement as it

provided detailed

understanding of the mark

s, opportunites and risks the

Gro

up face

s, as we

ll as th

e oppor

tun

y to mee

t inter

nal and

external stak

eholder

s. The Board

opes to

able to engage

wit

h stakeho

lder

s in pe

rso

n durin

g 20

ard vist

s to m

arket

s were rep

lace

d with v

irtu

engagements in 20

21 due to the continued

rest

rict

tra

vel. However, the B

oard re

cognis

es the m

utu

al bene

ﬁts

to both stak

eholder

s and

self from engagement

activties.

Whil

e facilta

ting t

wo-wa

y dialog

ue via i

ntera

ctve

tec

hnolo

gy was p

roduc

tive and e

ffe

ctive, i

n some ar

eas it

did pr

event the b

read

th of eng

agem

ent whi

ch the B

oard

would usual

ly undertake.

spite

this

thentic

engagement

led to a number

of invaluable

oppor

tunites

for the Board to

et with s

takeho

lder

s acros

s the G

roup

’s diver

se ne

work

incl

udng t

hose id

entﬁe

d on the fo

llowin

g page

s. Dire

ctor

did no

t just en

gage co

llect

ively w

ith st

akehold

ers

, but al

comm

unicat

ed wit

h some o

f them in

dvid

ually. Ext

erna

adv

iser m

embe

rs to t

he Bo

ard Financa

l Crime Ri

sk Com

mitte

also engaged direc

tly with stak

eholder

Informal and formal sessions with indvidual stak

eholder

and st

akehol

der gro

ups acro

ss ou

r foot

print h

elp prov

ide

INEDs and e

xternal adviser member

s with

a comprehensive

understanding of the Group

’

s market

erations,

implementaton of strategy

, and the

external and internal

imp

act of th

e Grou

’

s s

vice

Fur

ther de

tail re

gardin

g the Bo

ard

’

s en

gagem

ent wit

h our

stake

holde

rs can b

e foun

d on the f

ollowin

g page

s. De

tail

reg

arding h

ow Board C

ommi

ttee

s and the

ir memb

ers

eng

aged w

ith sta

kehold

ers ca

n be foun

d in the co

mmitt

rep

ort s

ectio

ns star

ting f

rom p

age 116.

The Boa

rd of

Directors

AGM

111

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Our approach

Increasing shareholder

value b

y deliverng robust

ret

urn

s and a lon

g-term

, sust

ainabl

e share p

rice is o

key impo

rtan

ce to the B

oard

. Cont

inuou

sly lo

okin

to improv

e engagement

s helps support the Board’

focus on de

veloping open and trusted relationsh

wit

h investor

s. T

his is un

derp

inned by o

penl

y seek

ing

fee

dbac

k and revi

ewng prev

ious a

ctiv

ties

As wa

s the ca

se for all f

orm

s of stakeh

older e

ngag

ement

the p

ande

mic limte

d the B

oard

’

s ab

ilt

y to physic

ally

et with s

hareh

older

s dur

ing th

e year. A virt

ual

appr

oach in m

ost ins

tance

s was taken

. This re

stri

cted

the o

n-the

-groun

d bene

ﬁts of B

oard m

embe

rs en

gaging

with shareholders face-to-

face but di

d offer shareholders

the o

ppor

tun

y to par

ticpat

e in event

s whe

re exten

sive

tra

vel may h

ave res

trict

ed the

m in the p

ast

ring t

he year, we maintan

ed a com

prehe

nsive

programme of engagement with i

nvestors and other

y stakeholders, includng in

vestor advisor

y bodies and

cre

dit ratin

g agen

cies, a

nd provi

ded up

date

s on progr

ess

made to transform our

usiness for

improved returns.

The Gro

up Chairman and other B

oard directors

maintan

direct contact with

investors and advisor

voti

ng bod

ies, an

d recei

ve regu

lar upd

ates f

rom th

Inv

estor Relations team, includ

ng reports on market

and investor sentime

nt. The Grou

p Chairman, as par

of his r

ole, leads engagement with

shareholder

s a

hos

ted th

e 20

21 AGM alo

ngsid

e fellow B

oard me

mber

The Gro

up Chairman and certain B

oard member

s also

hel

d an Investo

r Steward

ship Event s

imlar to l

ast year.

Christne Hodgson, Chair of the R

emuneration Committee,

cont

inue

d to disc

uss wi

th and co

llect fe

edb

ack fro

shareholders on a range

of remuneration matters,

includng

he Group

’

s new

Director

Remuneration

Polic

. In he

r role as S

enio

r Indep

ende

nt Dire

ctor

she is also

ailable to

shareholder

s should

have c

oncer

ns th

at canno

t be res

olved o

r for whi

the n

orm

al chann

els wou

ld be ina

pprop

rate.

Bill Wi

nter

s and An

dy Half

ord are th

e prim

y spo

kespeo

ple

for t

he Gro

up. Thro

ugho

ut the ye

ar they en

gage

extensively with existng shareholders and potential ne

investors dur

ing indvidual or group v

irtual mee

tings and

conferences. In additon,

ach member of

Management

eam res

pons

ible fo

r a client s

egme

nt or a geo

graph

reg

ion, as we

ll as th

e Grou

p T

easur

, v

irtu

ally me

t with

inv

estors to promote g

reater awareness a

nd understanding

of th

e strat

egy in t

heir re

spec

tive are

as, a

s well as ta

king

the opportunit

y to

ceiv

e investor

edback ﬁ

st hand.

Institut

onal

areholders

The Gro

up maintans a diverse, high-qu

ality and

predominantly insttutional shareholder base. The In

vestor

Relations te

am has primar

y respo

nsiblity fo

r managing

day-to-day c

ommunicatons

with these shareholders

and pr

ovide

s suppo

rt to t

he Gro

up Chair

man, G

roup

Chief E

xecutive, Group Chief Financal Ofﬁcer, other

Board members and senior management in conducting

a comprehensive engagement progra

mme.

Presentation material and webcast transcripts

are m

ade a

vail

abl

e on th

e Gro

’s we

bsi

te and c

be v

iewe

d at

.co

m/inve

ors

Debt in

vestors and credit rating agencies

Our Debt In

vestor Relations team

primar

y responsib

lit

for managing

he Group

’

s relationsh

ps with debt inv

estor

and t

he th

ree major rating agen

cies, with local market chief

exec

utives and

chie

f ﬁnancal ofﬁcers lea

ding on smaller

sub

sidar

y ra

tings

. In 2021, ma

nagem

ent me

t virt

uall

y with

deb

t investor

s acro

ss Europ

e, Nor

th Am

erica an

d Asi

a, and

main

tane

d a regul

ar dialo

gue wi

th the ra

ting ag

encie

It is im

por

tant th

at the G

roup, as a

n active i

ssue

r of sen

ior

unsecured and non-equity capital,

maintans regular

contact with

debt investors to ensure

continued appetite

for t

he Gro

’s credit

. The G

roup

’s cred

it ratin

gs are a key

par

t of th

e exter

nal per

cepti

on of our ﬁn

ancal st

reng

and cr

editworthness.

Fur

the

r inf

orm

ato

n can b

e view

ed at

c.c

om/i

nvest

vestor ste

wardship

even

The Gro

up Chairman; Deput

y Chairman and Chair of

the Board Risk Committee;

he Senior

Indep

endent

Director and

Chair of the R

emuneration Committee;

and the Chair of the Cul

ture and Sustainablit

Com

mitte

e host

ed th

e steward

ship event o

2 Novemb

er 2021. The eve

nt was at

tende

d by

inv

estor

s representing

a sizeable proportion of our

equ

y as well as s

everal sh

areho

lder re

prese

ntat

ive

dies. A

s a res

ult of fe

edba

ck last ye

, t

he open

ing

ction of t

he event wa

s stre

amline

d, wit

h the Gr

oup

Chairman provi

d

ng a strategic up

date regarding

ard and com

mitt

ee acti

vtie

s duri

ng the ye

, as we

as op

ening r

emar

ks fr

om the Ch

air of th

e Remune

ratio

Com

mitte

e. This wa

s followe

d by a ques

tion an

ans

wer ses

sion (Q&A)

. T

he event wa

s held v

irtu

ally

, w

ith

live Q&

A fa

ciltate

d thro

ugh a web-b

ase

d platf

orm

which permitted written and verbal communicat

Engagement with in

vestor

Enga

gement wit

h inv

tors: what we did durin

g 2021

February

2020 fu

ll yea

result

March

Inv

estor

conferences

and roadshows

April

2021

ﬁrs

quarter results

May

M a

inv

estor

conferences

June

Inv

estor

conferences

Aug

2021 ha

lf year

results, investor

conferences

and roadshows

September

Inv

estor

conferences

and roadshows

October

Inn

ovation an

Digti

saton Event

Nov

ember

2021 th

ird qu

art

er res

ult

and Stewardship event

and in

vestor conferences

December

Investor

conferences

112

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Corporate gov

nanc

Retail shareholders

The G

roup C

omp

any Secre

tar

y over

see

s commu

nicato

n with ou

r retai

l shareh

olde

The B

oard

’

s i

ntent

on was to inv

te shar

ehold

ers t

att

end th

e 20

1 A

M in per

son

, espe

cially a

s this i

s seen

as an im

portant opportunit

y for shar

olders to engage

wit

h the Bo

ard in a fa

ce-to-f

ace set

ting

. However

, d

to the c

ontinued challenge

of the pandemic, i

ncludng

prevail

ng govern

ment g

uideln

es on non

-ess

entia

l travel

and p

ublic ga

ther

ings at t

he tim

e, the C

ompany

’

s AGM

on 12 M

ay 2021 was hel

d as a comb

ined p

hysical an

electronic meeting. Shareholders w

ere not permitted

physical

entr

y into the A

GM venue.

Shareholders were able

to attend the A

GM electronically

via a l

ive web-p

orta

l. The me

etin

g form

at ens

ured th

shareholders could engage with

the Board regardi

Company’

s recent perform

ance

and strategic priorties,

whil

e also p

rotec

ting th

e healt

h and sa

fet

y of ou

shareholders, col

leagues and other sta

keholders.

With

n this po

rtal

, share

holde

rs wer

e able to v

iew a live

vid

eo fee

d of th

e A

M, sub

mit votin

g inst

ruct

ons an

que

stion

s in wr

itng or a

sk the

m throu

gh an audi

o line.

estio

ns rec

eived f

rom sha

rehol

der

s covered a di

vers

range of matt

ers, inclu

dng climate

environm

ental

issues, geop

olit

cal developments, strateg

, shar

eholder

engagement and shar

e price.

propose

resolutions

were p

ass

ed, wit

h share

hold

er supp

ort f

or each r

anging

fro

m 95.

22 p

er cent to 9

97 pe

r cent

Sha

rehol

der upt

ake for th

e A

M was low in com

pari

son

to ou

r last p

urely p

hysical AGM in 2019; h

owever

, th

Board

received

positve

feedback reg

arding t

web-p

ort

al fun

ction

alt

e res

ult

s of th

e voti

ng at t

he 2021 AG

can b

e vie

wed at

com/i

nves

tor

A su

mmar

y o

f res

pon

ses t

o que

sti

ons o

n key the

mes w

made availa

ble on our website

to shareholders after the

eti

ng and c

an be f

oun

d at

sc.com/

agm

Engagement with in

vestor

s contin

ued

Clien

ts ar

e centra

l to ever

hing we do i

n the Gr

oup and t

Board recog

nises the importance

of promoti

ng productive,

sustainable relationsh

ps with them. Prior to the

andemic,

a large

proportion of k

ey cus

tomer engagements were

buil

t into Bo

ard and di

recto

r vist

s to th

e Grou

’

s m

arket

Con

tinu

ed limta

tions o

n inter

nato

nal tra

vel me

ant tha

our u

sual ap

proach c

ould n

ot be car

ried o

ut dur

ing 2021.

Instead, certain Board members engaged with clients

vir

tual

ly to keep a

brea

st of devel

oping cl

ient tr

ends

exp

erie

nces an

d need

s. In ad

diton

, upda

tes on cl

ient

s’

ins

ghts f

orme

d par

t of dee

p dives in

to prod

uct se

gment

str

ateg

y at Boar

d meet

ings

. Supp

lier

s provid

e efﬁcen

t and

sustainab

le goods and ser

vice

s for our busines

s and certain

mem

ber

s of the B

oard al

so vir

tual

ly enga

ged w

ith the

dur

ing th

e year

. D

etail o

n how the G

roup m

ore ge

nerall

eng

aged w

ith clie

nts a

nd supp

lier

s can be fo

und on

pag

es 51, 52 an

d 54 of t

he Str

ategi

c repor

Engagement with clients and suppliers

The B

oard

, eithe

r collec

tivel

y or indv

idual

, en

gages w

ith

rel

evant aut

horit

es bo

th in the U

K and acr

oss ou

r foot

prin

on a regular

asis. During 2

021 this took plac

e via a number

of vi

rtu

al for

ums

. T

ics var

ied, in

cludn

g recover

y f

rom th

pandemic, inter

natonal trade, climate-related matter

ber s

ecur

y and digt

al and te

chnol

ogical d

evelopm

ent

Certain regulators attended Board meetings during the

year, which p

rovide

d the op

port

unit

y to d

iscus

s key items

and d

evelopm

ent

s. Fur

ther de

tail on h

ow the G

roup

engaged with regulators and go

vernment

s more

generally

can be f

ound o

n page

s 52 and 53 of t

he St

rategi

c repo

rt.

Engagement with regulators and gov

ernments

The Board receiv

es regular updates from

anagement

concerning the communites

and environment in which

we ope

rate. T

his year t

he Boa

rd reviewe

d, disc

usse

d, and

appr

oved the G

roup

’s pat

hway to ne

t zero. As p

art of t

his

decison the

oard

into account the potential i

act

of th

e pathwa

y on civ

l socie

ty, includ

ng tho

se fro

m non-

governmental organisat

s, as w

as other stakeholder

grou

ps. Fur

the

r detail c

an be fou

nd reg

arding t

he Boa

rd’s

pri

ncpal d

ecison o

n page 6

6 of th

e Strat

egic re

por

Due to continued trav

el restrictons in place

hroughout

mos

t of 2021, th

e Board wa

s unab

le to vis

t many of th

Gro

’s market

s. A

s such

, exter

nal and i

ntern

al spe

akers

prov

ided in

put to t

he Boar

d’s discu

sson t

hrough

out

the ye

, w

hich covere

d some key s

ociet

al issu

es such

as cli

mate-r

elate

d matt

ers

, the evo

lvin

g geop

olitca

landscap

e in certain market

s, and the impact of the

pan

demic o

n the he

alth an

d wellbei

ng of th

e commun

ites

in whi

ch the G

roup o

perat

es.

Engagement with societ

113

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Board engagement ses

sions with emplo

yees

Africa and Middle Eas

Asia

Europe and t

he Americas

Africa cluster

30 No

vember 20

Angola, Botswana,

amer

on,

Côte d’Ivoire,

The Gambia, Ghana, K

enya, Mauritus, Nigera,

Sie

rra Le

one, S

out

h Af

rica

, T

anzani

a, Uga

nda

Zambia, Zimbabwe

Par

ticp

atin

g Boa

rd mem

ber

s: Jos

é Viña

ls,

Mar

ia Ram

os and D

avi

d Con

ner

MENAP markets

23 Nov

ember 2021

Mid

dle Eas

t, N

ort

h Afr

ica an

d Pakis

tan

Par

ticp

atin

g Boa

rd mem

ber

s: Jos

é Viña

ls,

Mar

ia Ram

os and B

yron G

rot

Ind

ia and S

out

h Asi

24 No

vember 202

India, Banglad

esh, Nepal,

i Lanka

Parti

cpa

ting Board

members:

José Viñals, C

ist

ne Hodgson

and Nagu

ib Khera

Asia cluster

12 Ju

ly 202

Australia, Brunei, Indonesia,

Malays

ia, P

hilppines,

Singapor

hailand, Vietnam

Parti

cpa

ting Board

members:

José Viñals

asmine

Whitbread and

aguib

Kheraj

GCNA markets

28 September 20

China, Hong Kong, Japan,

Korea,

Macau, T

aiw

Parti

cpa

ting Board

members:

José Vi

ñals, Carlson T

ong

and D

avi

d T

ang

EA markets

15 J

uly 202

Euro

pe an

d the Am

eri

cas

Par

ticp

atin

g Boa

rd mem

ber

s: Jos

Viñ

als, P

hil Ri

vett an

d Ga

y Huey Eva

Engagement with employ

ees

The eve

nts we

re facilt

ated t

hroug

h a vide

oconf

erenc

e with

a live Q&

A se

ssio

n acces

sed v

ia a web-b

ased p

latfo

rm.

Six s

essi

ons cover

ing th

e below g

eogra

phical re

gions

were h

oste

d by the Gr

oup Chai

rman

, who was j

oned by a

comb

inato

n of INEDs

. The co

mpos

iton of t

he INED

s who

att

ende

d was caref

ull

y consi

dered i

n order t

o ensur

e a good

balanc

e of ski

lls, e

xperience,

wledge and

perspectives

for each ge

ographical group, promoting insght

ful and

tailored engagement.

view of

emp

yee engagement

Chan

ges to t

he fra

mework o

f form

al Boa

rd enga

gemen

wit

h colle

ague

s was enha

nced du

ring t

he year, base

d on

ard and em

ployee fe

edba

ck and ex

peri

ence in 2020.

These changes

included using vi

deo technology (

rather

than audio-only

)

so that colleagues

could see Board

members

, using

a moderator out

side of management to

help e

nsur

e the qu

estio

ns were a

sked in an au

then

tic and

unﬁlt

ered wa

, and br

eaki

ng up fou

r regio

ns into s

ix mor

granular

geographical

groups to enable closer d

iscusson of

local topics.

The B

oard wa

s encou

raged by t

he level o

f intere

emp

loyees ha

d shown i

n engag

ing dire

ctly w

ith Bo

ard

mem

ber

s and rem

ains com

mitte

d to evol

ving an

d reﬁnng

this form of engagement

to ensure they remain

genuine,

authentic interactons.

Further detail r

egarding employ

engagem

ent

this year can

be f

oun

d wit

hn th

e Cult

ure a

nd Su

sta

inab

lit

y Co

mmi

tte

por

t sta

rti

ng on

age 1

The Board v

alues the opportunit

to engage with our

wor

kforc

e. It is acu

tely a

ware of th

e impor

tanc

e of

ing

a comprehensive understanding of issues that are

important to colleagues

in each mark

, learning

abo

ut the o

n-the-

groun

d realit

es of wor

king a

t Stan

dard

Char

tere

d, hea

ring ab

out w

hat is wor

king we

ll and

understanding the

challenges that

need to be addressed.

The B

oard al

so rec

ognis

es the ro

le it ha

s in upho

lding

a gen

uine and t

ransp

arent t

-way dialo

gue wi

th the

wor

kforc

e. As it is d

istnct t

o the ro

le of man

agem

ent, a

comp

ose

d of diver

se me

mber

s wit

h indv

idual voi

ces,

it is un

iquely placed to

oversee, guide

, support and,

where necessary

, challenge

the Management T

eam in

implementng the Bank

’

s strategy

. This distnction w

key poin

t commu

nicate

d by Board m

embe

rs to co

llea

gues

as p

art of en

gage

ment th

rough

out 2021.

Siml

ar to las

t year

, t

he Bo

ard cont

inued t

o adop

t an

alternative approach to

the workforce engagement

met

hod

s set ou

t in the UK C

orp

orate G

overn

ance Co

de.

The p

rimar

y rea

son fo

r takin

g a diff

erent ap

proac

h was

tha

t, as a gl

obal o

rganis

aton w

ith mor

e than 8

8,00

coll

eagu

es acro

ss 59 diver

se mar

kets

, it is v

ital th

at any

Board engagement should gather

unﬁltered feedback

whi

ch is repr

esen

tative o

f the wh

ole wor

kfo

rce in orde

r to

be truly e

fec

tive.

The Board took e

ver

y opportunit

y to

gage

ith

emp

loyees

, eithe

r colle

ctivel

y or ind

vidua

lly dur

ing th

e year

in ord

er to gai

n a tru

e under

stan

ding of t

heir v

iews, i

deas

and concerns. As with other forms of stakeholder i

nteracton

thi

s year and l

ast year, tradi

tonal f

orms o

f employe

engagement were adapted in

light of the pandemic.

114

Standard Chartered

– Ann

ual Re

por

t 2021

Directors’ report

Corporate gov

nanc

Engagement with employ

ees continued

ey th

emes cov

red by employ

es and Boar

d member

s during en

gagemen

t sess

ions

Empl

oyees were a

sked du

ring t

he ses

sion

s which ar

eas th

woul

d like to see t

he Bo

ard have g

reate

r impac

t. Th

e top

respons

es received included keeping strategy relevant,

protecting and encouraging

stakeholder interests,

cham

pionng d

iver

st

y and inc

luson

, promo

ting a cu

lture o

greater empowerment and

accountabil

, simpl

f

ying

proces

ses, balancin

g costs against b

usiness per

formance,

and f

urt

her inves

tmen

t in the Af

rica a

nd Middl

e East re

gion.

As p

art

s of th

e world b

egin t

o emerg

e from t

he pan

demic

coll

eagu

es were as

ked wha

t had chan

ged fo

r the b

etter a

Standard

Chartered, and whether

they had an

y concerns.

The b

eneﬁt

s of ‘

goin

g digtal

’ was a co

mmon t

heme, w

ith

colleagues pleased with the acc

ssib

lit

y to col

laborate

vir

tual

ly acro

ss our d

iver

se mar

kets

, as well as a g

reate

acceptance

of ﬂexible

working. In c

ontrast to this, concerns

were raised by colleagu

es regarding work-

lif

e balance, as

well a

s the tra

nspa

renc

y and coh

esion o

f cert

ain intia

tves

bet

ween di

fferent departm

ents in the Group.

The Q&

A e

lemen

t of the s

essi

ons prov

ided t

he Bo

ard with

deep insght i

nto employ

e vie

s, concerns and

interests

As i

n previo

us year

s, col

leag

ues were e

ncour

aged t

o ask th

ard anyth

ing, an

d the dia

logue c

overed a di

vers

e range

of to

pics

, some o

f which ar

e illust

rate

d below.

India and

South Asia

•

Strategic outlook

for l

ocal m

arke

•

ransfor

mation

project

Asia cluster

•

New way

s of

work

ing

•

Group

and country

relationshps

GCNA

•

gital bank

ing

and p

riva

banking str

ategy

•

nvestment i

n the

support functions

and local mark

ets

Afric

a and

Midd

le East

Africa cluster

•

sons learnt

rom

mark

et peers

•

echnological investment

in smaller market

MENAP

•

nvestment i

n local

markets

•

etur

on tangible

equit

y targets

•

mpact of

VID-

•

Sustainablit

y and

et z

ero strateg

•

Div

sty and i

ncluson

•

Strategy

•

Share price

•

Geopolitcal

developments

•

alent strategy

, remuneration and career

development

•

ork

-life balan

•

Digtalisaton trends and intiatves

•

Sponsorship in

vestment and opportunites

•

The

Stands

Collective themes

(rais

ed by mor

e tha

n one re

gion)

rope and

Americas

•

Busi

nes

re-structuring

•

elationshp with

regulators

115

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Enga

gement an

d link

ges with t

he Gr

oup

’s

subs

idaries

The B

oard an

d its c

ommit

tees re

cogni

se the i

mpor

tance o

creatin

g, maintaning and buildng upon appro

priate linkages

wit

h the G

roup

’s subs

idarie

s. Siml

ar to 2020, the Bo

ard’s

abilt

y to p

hysicall

y mee

t with p

eople f

rom ac

ross t

he Gro

’s

footp

rint remained limted

. Despite this, th

e Group Chairman

and IN

EDs eng

aged w

ith th

e Grou

’

s s

ubsida

ries t

hroug

h a

number of forums. This included cha

ir and

committee chair

engagement sessions

as well as

her forms of i

erac

ton.

The Gro

up Chairman hoste

d three subsidar

y chair

eng

agem

ent ses

sion

s duri

ng 2021, all he

ld vir

tual

. Each even

ope

ned w

ith rem

ark

s from t

he Gro

up Chair

man, f

ollowe

d by

a Q&

A ses

sion

, with Bi

ll Winte

rs joni

ng one of t

he se

ssion

The G

roup C

hairm

an was en

courag

ed by the h

igh level of

inte

racto

n and sha

ring of b

est pr

actice

s by our sub

sidar

chai

rs. I

tems d

iscus

sed a

cross t

he thr

ee ses

sion

s inclu

ded:

•

Gro

up per

for

mance an

d strat

egy

•

sus

tainab

lit

y and th

e Grou

’

s ne

t zero pat

hway

•

Resolution F

ramework

•

are

as of foc

us for t

he Gro

’

s b

oard

•

Board

fec

tiveness

•

governance be

st practice

The Au

dit Com

mitte

e held i

ts ann

ual con

feren

ce call dur

ing

the ye

, w

hich was h

osted by t

he Audit C

ommit

tee Ch

air

and at

tend

ed by the c

hair

s of subs

idar

y au

dit commi

ttee

The Gro

up Chairman; Group Hea

d, Central Finance; Group

Financ

al Cont

rolle

r; Gr

oup He

ad of Int

ernal Au

dit; G

loba

Head, A

udit, Quality Assurance

; Group Head, Conduct,

Financal Crime and Complian

; me

mbers of th

e Group

’

statutor

y auditor

, EY

includng the lead audit

par

tner; and

the G

roup C

omp

any Secre

tar

y als

o par

ticpat

ed in th

e call.

Ite

ms disc

usse

d dur

ing the c

all inclu

ded:

•

Gro

up Financ

e upda

te, whic

h feat

ured IF

RS 9 mod

els

and over

lay

s, as wel

l as a stat

us rep

ort on t

he Gr

oup

’s

Aspire Program

•

conduct

, ﬁnancal crime and compliance developm

ents

•

Gro

up Int

ernal Au

dit rep

orti

ng to sub

sidar

y a

udit

committees

•

alit

y As

suran

ce review o

f subsi

dar

y audi

t commit

tees

•

Group statutor

y audit

date

rom EY

In conjuncton with t

he Chair of the Board Financal Crime

Risk C

ommi

ttee, t

he Bo

ard Risk C

ommit

tee Ch

air hos

ted it

annu

al conf

erence c

all with c

hair

s of the s

ubsida

y boar

d risk

comm

itte

es. Th

e Gro

up Chair

man; Gro

up Chie

f Risk Of

ﬁcer

;

Group H

ead, Conduct

, Financal

Crime and Co

mpliance;

Glob

al Head of Financal Crime and Compliance; and the

Gro

up Com

pany Se

creta

y also p

articp

ate

d in the call

Ite

ms disc

usse

d dur

ing the c

all inclu

ded:

•

21 Board Risk C

ommittee and Bo

ard F

inan

cal

ime Risk

Committ

ee focus a

reas

•

Gro

up Chie

f Risk Of

ﬁcer

’

s 2021 pr

iort

ies

•

ﬁnancal crime complian

ce 2

021 prio

rties

The Rem

uner

ation C

ommit

tee Ch

air held a c

onfer

ence call

attended by the subsid

y remuneration committee chairs

and t

he chair

s of su

bsidar

y b

oard

s that h

ave remu

nerat

ion

res

pons

iblite

s. The G

roup C

hairm

an; memb

ers o

f the

Remuneration Committee;

he Global Head, P

formance,

Reward & Emp

loyee Relat

ions; H

ead, E

xecu

tive

Com

pens

atio

n and Reward G

overnan

ce; regio

nal hea

ds of

Perf

orma

nce, Reward & B

eneﬁt

s; and th

e Grou

p Comp

any

cretar

y also p

art

icpate

d in the c

all. The

se annu

al calls

are impor

tant as remuneratio

n gov

rnance continue

to be under the

otlight

as the regulator

y landscape

evolve

s acros

s our ma

rket

s. The c

alls als

o fost

er know

ledg

sha

ring an

d best p

ractic

e bet

ween t

he PL

C Rem

uner

ation

Committee and the subsidary remuneration committees

and ra

ise awar

enes

s as rem

unera

tion com

mitte

es are

incr

easn

gly exp

ecte

d to have over

sigh

t over the ap

proac

to re

muner

ation f

or the w

ider wor

kfor

ce. The to

pics t

hat

were discuss

ed included:

•

21 Remuneration Committee focus areas

•

2021 to 2022 Pe

rfor

mance

, Reward and Be

neﬁt

s prio

rtie

•

continung

to monitor the long-term

impact of the

pandemic

•

ren

ewing t

he direc

tor

s’ remun

eratio

n poli

, w

hich will b

subj

ect to a sh

areho

lder vot

e at the AGM in M

ay 2022

•

the impact of

regulator

y changes on remuneration

•

our refreshed approach to performance management

•

ensur

ing progress wit

h ongoing perfo

rmance and

reward i

ntiat

ves (for exampl

e embe

dding o

f the Fair Pa

Charte

, W

ellbeing, B

eneﬁts T

ransform

ation

)

Other activties which

place during 20

21 to fur

ther

strengthen the

linkages

across the Group inc

luded:

•

the G

roup C

hairm

an atte

nded a n

umbe

r of subs

idar

board meetings

includng ban

king subsi

daries

in Hong

Kong, Singapore, Pakis

tan, K

ya and Mala

ysia.

•

the G

roup C

hairm

an atte

nded t

he East A

fri

ca Clust

ard For

um and th

e Sou

ther

n Afr

ica Clus

ter Bo

ard

Forum.

•

the C

hair

s of the G

roup Au

dit Com

mitte

e and th

e Board

Risk Committee attended some of

the subsidar

y audi

and r

isk com

mitte

e mee

tings a

nd som

e of the su

bsida

aud

it and ri

sk commi

ttee C

hair

s atten

ded a me

etin

g of

the re

spective Gro

up Com

mittee.

Fur

the

r det

ail r

egar

din

g how th

e Gro

up en

gag

es wi

th it

akeho

lde

rs ca

n be fo

und o

pag

es 50 t

o 77

116

Standard Chartered

– A

nnu

al Rep

ort 202

Directors’ report

Corporate gov

nanc

udit

Commit

tee

I am pl

eas

ed to p

rese

nt th

e Audit C

ommi

tte

e’

s rep

t for th

e year e

nded

31 De

cem

ber 2021

In addit

on to the disclosure

quir

ements relating to aud

it committees

der th

e UK Co

rpo

rate G

over

nanc

e Cod

e 2018

, the fo

llow

ing re

por

ts ou

t the a

rea

s of sign

ﬁcant f

ocus f

or th

e Com

mitt

ee and i

ts a

ctiv

tie

over t

he cou

e of the y

ear. The re

por

t als

o cover

s the re

view u

nder

take

on t

he ef

fect

iven

ess o

f the G

rou

’s Stat

uto

y Audit

, E

, and on

goin

over

sig

ht of th

e eff

ect

iven

ess o

f the G

IA fu

ncti

on. A

uranc

e has b

een

ught a

nd rec

eive

d by the C

ommi

tte

e conc

erni

ng th

e reso

urci

ng of

Group Finance, GIA and CFCC.

Mar

ia Ram

os jon

ed th

e Com

mitt

ee on 1 J

anua

y 2021 and Na

guib

eraj s

tepp

ed dow

n fro

m the C

omm

itte

e on 5 Ju

ly 2021. I w

ould l

ike to

conv

ey the Committee’

s gratitude to Nagui

b for his considera

ble

con

tri

but

on as b

oth a me

mbe

r and Ch

air over m

any year

As w

as the c

ase in 2020, t

he imp

act

s of COVID-19 ha

ve rema

ined o

sig

nﬁcan

t focu

s for th

e Com

mitt

ee. T

his ha

s comp

ris

ed rev

iewn

g and

challenging

credit imparment pro

is

ons, includng

overlays to deal

wit

h the i

mpa

ct of COVID-19

, key acco

unt

ing is

sue

s and si

gnﬁca

accounting estimates

and judgements made by management, to

sure t

hey are s

ufﬁ

cent

, app

ropr

iate a

nd th

at the G

rou

’s publ

dis

clos

ure

s in reg

ard to t

his ar

e tran

spar

ent

. The C

ommi

tte

e revi

ewed

and considered judgemental

post model adjustments (PMAs

) and

man

age

ment ov

erla

ys in b

oth t

he wh

oles

ale an

d ret

ail po

rtf

olio

s on a

arte

rly b

asi

s, re

quir

ed in or

der t

o esti

mate e

xpe

cted c

redi

t los

s (ECL)

int

end

ed to ta

ke into a

ccou

nt the i

mpa

cts o

f CO

ID-

. Fo

cus ha

s als

en pla

ced o

n acco

unti

ng tre

atm

ent an

d value i

n use (

VIU) o

f the

oup’

s eq

uit

y acc

ount

ed inve

stm

ent in Ch

ina B

ohai B

ank

gnis

ant of t

he ever-incr

eas

ng imp

ort

ance o

f dat

a, the C

omm

itte

s kept a cl

ose wat

ch on t

he Gr

oup

’s app

roa

ch to da

ta man

age

ment

the challenges

in place and ac

ion

plans to address these.

ards the

end o

f 2021, t

he Co

mmit

tee h

eld a de

ep di

ve disc

uss

on int

o data

management. The Committee recognised

ace

of regulator

change pertai

nng to this

and probed i

nto how the

businesses and

functions are priortis

their data management action

plans and the

gove

rnan

ce in pl

ace to m

ana

ge thi

s. Da

ta man

age

ment w

ill re

main an

are

a of fo

cus fo

r the C

ommi

tte

e and th

e Boa

rd in 202

2 and be

yond.

In mid

2021, wi

the renaming o

f the

Brand, V

alues and Conduc

Committee to the

Culture and

ustaina

blity Committee (

CSC)

, Conduct

Ris

k was tr

ansf

err

ed to t

his Co

mmit

tee

. Cogn

isan

t of th

e overar

chin

nature of this

risk

, the

ommittee

discus

sed the

progress made during

21 to bring together the ne

w Conduct Risk management

approach,

are

as of e

merg

ing ri

sk an

d the ro

adma

p for 202

2. Th

e Finan

cal Co

ndu

Aut

hor

y’s (FCA) co

nsul

tati

on on a n

ew Con

sum

er Dut

y wa

s dis

cuss

and t

his w

ill fe

atur

e in th

e Comm

itte

e’s delib

era

ton

s in 2022

Fol

lowin

g on fr

om 2020, the C

omm

itte

e has b

een r

ecei

vng r

egu

lar

date

s fro

m mana

gem

ent an

d EY on t

he wor

k und

er way t

o impr

ove

e Gro

’s Info

rma

tion T

chn

olog

y (IT

) acce

ss co

ntro

ls and r

eme

diate

wea

kne

sse

s iden

tﬁed d

uri

ng pr

ior yea

r audi

. The C

ommi

tte

e has b

een

nito

rng t

he pro

gres

s bei

ng ma

de on th

is, g

iven it

s imp

tanc

e in

pro

tec

ting t

he Gr

oup’

s s

yste

ms se

cur

. Th

is wil

l be a con

tinu

ed pr

ior

t

r 202

Thi

s is E

Y’s sec

ond ye

ar as th

e Gro

’s Sta

tut

y Audi

tor an

d it ha

en us

efu

l to ha

ve inpu

t fro

m regi

onal a

nd sp

ecial

st pa

rtn

ers o

n the

Committee’

s agenda. By w

ay of ex

ample, discussons on

regional/

cou

ntr

y ove

view

s, th

e Gro

’s IT ac

cess c

ontr

ols an

d tax h

ave al

neﬁt

ted f

rom E

Y par

tne

r inpu

t. E

Y cont

inu

es to pr

ovide f

res

perspe

ctive

, independent challenge

and subject matter expertise

to the Committee’

s deliberat

e Comm

itt

ee ha

s exerci

sed it

s au

tho

rit

y de

leg

ated by t

he Bo

ard fo

suri

ng th

e inte

grt

y of t

he G

roup’

s p

ubli

she

d ﬁnanc

al inf

orm

ato

n by

discussng

and challeng

ing the judgements and

disclosures made

man

age

ment

, and t

he as

sum

ptio

ns an

d esti

mate

s on wh

ich th

ey are

sed

. The C

ommi

tte

e has exe

rcis

ed jud

gem

ent in d

ecid

ng whi

ch of

e iss

ues it co

nsi

dere

d to be s

ignﬁc

ant in th

e ﬁnan

cal st

atem

ent

s, a

thi

s rep

ort s

s out t

he mat

eri

al mat

ter

s tha

t it has c

onsi

dere

d in th

ese

deliberatons. Management

repor

ting to

the Committee from across

e busi

nes

s, f

unct

ion

s and th

e Gro

’s net

rk ha

s prov

ided t

opportunit

y for

the Committee to challenge,

probe, discuss and seek

assurance from management, enabl

ing the Committee to pro

ide

independent perspecti

As a r

esu

lt of th

e Com

mitt

ee’s work i

n 2021, as

sur

ance h

as be

prov

ide

d to th

e Boar

d on th

e qual

y and ap

prop

riat

ene

ss of t

he Gr

oup

’s

ﬁnancal report

ing, in particular takin

account of CO

VID

19 impacts

and on

internal audit, compl

iance and regulatory matters

to continue

to s

afeg

uard t

he int

ere

sts o

f the G

rou

’s broa

der st

akeho

lde

rs.

e foll

owing p

age

s prov

ide in

sght a

nd con

text in

to th

e Comm

itt

ee’s

wor

k and ac

tiv

tie

s dur

ing th

e year.

Phil R

ivett

Cha

ir of th

e Audit C

omm

itte

Committee compositon

Scheduled

meetings

P G Rive

tt (

air

)

8/8

D P Co

nner

8/8

B E Gr

ote

8/8

C M Ho

dgso

n, CBE

8/8

N Kh

eraj*

M Ram

8/8

Nagu

ib Kh

eraj s

tep

ped d

own f

rom t

he Co

mmi

tte

e on 5 Ju

ly 2021

her a

ende

es a

t Comm

itt

ee me

ing

s in 2021 i

ncl

uded

e Gro

up Chai

rma

n; Gro

up Chie

f Exe

cut

ive; Gr

oup Ch

ief

Financal Ofﬁcer; Gro

up Chief Risk

Ofﬁcer

; Group General

uns

el; Gro

up He

ad of In

ter

nal Aud

it; G

rou

p Hea

d of

Condu

ct, Financal

ime & Compliance; Group Head, Cent

ral

Fina

nce; represen

tatives from

Group Fina

nce;

Group Statutor

Auditor; and

roup

Comp

y Secretar

As part of her

ongoing engagement plan in

2021, Jasmine

Whi

tbre

ad at

ten

ded on

e Com

mitt

ee me

eti

ng as an o

bse

ver

As part of

, and i

n addit

on to most

schedule

ommittee

meetings, the Committee held private

member

s-only

meetings.

The Committee members have

detailed and

relevant

exp

ience a

nd br

ing an i

ndep

end

ent mi

nds

et to th

eir ro

le.

e Boar

d is sat

isf

e

d tha

t Phil Ri

vett h

as rec

ent an

d relev

ant

ﬁnanc

al experience and

that the other

Committee members

als

o have a d

ept

h of exp

eri

ence h

avi

ng man

age

d comp

lex

bal

ance s

hee

ts o

r hav

ing kn

owle

dge o

f ﬁnan

cal re

por

ting i

internatonal business.

Biographcal

details of the committee members

can b

e vie

wed on

es 91 t

o 94

Main respon

siblites of the Committ

The Committee is

responsible for o

versight and advice to

e Boar

d on ma

tter

s rel

atin

g to ﬁna

ncal r

epo

rti

ng. Th

mmit

tee’s rol

e is to re

view, on be

half o

f the B

oard

, the

Group

’

s internal con

rols

and internal

ﬁnancal c

ontrols. The

mmit

tee h

as exer

cise

d over

sight o

f the wo

rk un

der

taken

by Conduct, Financal Crime & Compliance (

CFCC), Group

Int

ern

al Audi

t (

) a

nd th

e Gro

’s Sta

tuto

y Audi

tor, EY

e Comm

itt

ee rep

ort

s to t

he Bo

ard on i

ts key ar

eas o

f focu

follo

wing each

Committee mee

ting.

e Com

mitt

ee h

as wr

itt

en te

rms o

f ref

eren

ce th

at can b

ewed a

sc.com

/termsofreference

“

As wa

s the c

ase i

n 2

, the impa

of C

D-

19 h

e remai

ned of

sig

n

ﬁca

nt focu

s for the Comm

ittee

”

117

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

ties during the y

ear

Financa

reporting

•

tisf

e

d its

elf th

at the G

rou

’

s a

ccoun

ting p

olice

s and pr

actic

es are ap

propr

iat

•

Revie

wed the clarity and c

ompleteness of the discl

osures made withn

the published ﬁna

ncal statements

•

nsid

ered any c

hang

es in dis

clos

ures ar

isn

g from b

est pr

actic

e in appl

yin

g the UK Fin

ance C

ode fo

Finan

cal Repo

rti

ng Dis

clos

ure, re

comm

enda

tion

s from t

he T

ask

force o

n Disc

losu

res on E

ect

ed Cre

dit

Los

ses (DEC

), high-

quali

y pract

ices w

ith re

gard to i

mplem

ent

aton o

f ECL sugg

este

d by the Pr

ude

ntia

Regu

lati

on Auth

orit

y (PR

A) and Fina

ncal Rep

ort

ing Co

uncil (F

RC) pub

licato

ns on a

spe

cts o

f UK

rep

ort

ing an

d discl

osur

e requ

ireme

s from t

he Finan

cal St

abilt

y Bo

ard

’

s T

k Force on C

limat

e-Rela

ted

Financal Disclosures (

CFD

) with regard to sustain

ablity

•

nitor

ed the i

nteg

rt

y of th

e Gro

’s publi

she

d ﬁnanc

al stat

emen

ts an

d for

mal ann

ounc

emen

rel

atin

g to the G

rou

’

s ﬁ

nanca

l perf

orm

ance, r

eview

ng the s

ignﬁcan

t ﬁnanc

al judg

emen

ts an

accounting

issues

Sign

ﬁcant ac

count

ing ju

dgem

ent

s cons

idere

d dur

ing 2021 ar

e shown b

elow.

The C

omm

itte

e can conﬁ

rm tha

t the key ju

dgem

ent

s and si

gnﬁcant i

ssu

es rep

ort

ed are co

nsis

tent w

ith th

dis

clos

ures o

f key estim

aton u

ncer

tain

tes an

d crit

cal jud

geme

s as set o

ut in No

te 1 sta

rtin

g on pa

ge 316.

y area

Act

ion t

aken

Impairmen

t of

loans and

adv

ances

Revie

wed and c

halle

nged

, on a qua

rter

ly b

asis

, rep

ort

s det

ailng t

com

posi

ton an

d credi

t quali

ty o

f the l

oan bo

ok, c

oncen

trat

ions o

f ris

k and

provis

oning le

vels.

Revie

wed and co

nsid

ered j

udge

ment

al PMA

s and man

agem

ent over

lay

s in

th the w

hol

esal

e and ret

ail po

rtf

olios o

n a quar

ter

ly ba

sis th

at were r

equir

to es

tima

te ECL. I

n the ca

se of PMA

s, s

ome mo

del

s’ per

form

ance b

reac

hed

monitorng

standards or v

alidaton s

tandards

cessita

tng adjustments. In the

cas

e of man

agem

ent over

lay

s mainl

y to de

al wit

h the im

pact of COVID

e amoun

t of lo

ans pla

ced on n

on-pu

rely p

reca

utio

nar

y ea

rly al

ert r

emain

eleva

ted co

mpar

ed wit

h the p

re-COVID

19 per

iod a

nd the e

cono

mic dis

loca

ton

obs

ved i

n 20

20 a

nd 2021 has n

ot yet b

een f

ully o

bser

d in cus

tome

rs’ ﬁn

ancal

rfor

manc

e, in par

t due t

o ongo

ing gove

rnme

nt sup

por

t mea

sures a

cros

s the

Group

’

s markets. The Committee

challenged the co

mpleteness of

these ov

erlays

and t

he over

lays r

elat

ing to u

ncer

taint

es in t

he Chin

a comme

rcial re

al est

ate

ctor. The Co

mmit

tee al

so rev

iewed an

d cons

idere

d whe

n such m

anag

emen

overlays w

ould be released.

Revie

wed the a

ppro

pria

tene

ss of ma

nage

ment

’s econ

omic f

oreca

s and

the adjustments to pr

ovisons

to incorporate the effect of

multiple economic

scenarios.

The Committee

was briefed on the

per

formanc

e of the

International F

inancal

Repo

rti

ng Sta

ndard (I

FRS) 9 mo

dels a

nd the r

emed

iato

n plan

s in plac

e to

address materia

l non-

per

formanc

e issues, where these had

een

identﬁed. The

mmitt

ee con

side

red th

e appr

opri

aten

ess of t

he st

aging o

f highe

-ri

sk lo

ans,

as we

ll as th

e expe

ctat

ion of e

levate

d loss

es in in

dust

res a

nd loca

tion

s tha

ve been p

art

icul

arly a

ffe

cted by COVID

. In re

spec

t of high-r

isk cr

edit g

rade

exp

osur

es, t

he Co

mmitt

ee was a

lso br

iefe

d on bu

sine

ss pla

ns, in

clud

ng rem

edial

act

ions a

nd man

agem

ent as

ses

smen

t of the r

ecover

ies an

d colla

teral a

vailab

le.

Impairmen

t of

aircraf

Revie

wed and c

halle

nged

, on a qua

rter

ly b

asis

, mana

geme

’

s a

sse

ssm

ent

s of

impa

rment losses

on aircraft

operating lease assets, includ

ng the assumpti

ons

use

d to de

term

ine as

set VI

U and ma

rket val

uati

ons. I

n par

ticul

, t

he Co

mmitt

challenged management’s

ssessments and the detailed sensitvity analysis

to en

sure t

hat th

e impl

catio

ns of COVID-19 had be

en f

ully co

nsid

ered

, as the

airc

raft i

ndus

y was p

arti

cular

ly af

fec

ted by COVID-19 trave

l rest

rict

ons an

lockdo

ns. The

ommittee

reviewed detailed

sensitvity analysis on the fac

tor

that woul

d impact

the VIU assessments includ

ng residual v

alues, remarketing

riod

s aft

er lea

se te

rmin

aton

s, re

duct

ions in m

arket r

ental r

ates a

dis

coun

t rates w

hile a

sse

ssin

g the im

parm

ent ca

lcula

tion

s for th

e aircr

aft

The C

omm

itte

e also f

ocus

ed it

s revi

ew on lea

se pa

yme

nt def

erral

s grant

to le

sse

es as a re

sult o

f CO

D-

19 t

o ass

ess any p

oten

tial im

pact o

n the VI

ses

smen

ts fo

r the re

late

d aircr

aft an

d moni

tore

d progr

ess o

n repa

yme

nts o

e defer

rals a

nd any ext

ensi

ons.

Goodwill

imparmen

Revie

wed man

agem

ent

’s annual a

sse

ssm

ent of g

ood

will im

parm

ent

, coveri

key as

sumpt

ion

s (

clud

ng fore

cast

, disco

unt rat

e and si

gnﬁcant c

hang

es fro

e previ

ous yea

), headr

oom ava

ilabl

y and se

nsit

vit

es to po

ssi

ble cha

nges i

key

sumptions.

118

Standard

Charter

– A

nnu

al Rep

ort 202

Directors’ report

Corporate gov

nanc

Carr

ying v

f i

nves

in ass

ociates

Revie

wed and co

nsid

ered m

anag

emen

t’s car

ying va

lue as

ses

sme

nts o

n the

oup

’s invest

ment i

n China B

ohai B

ank

, coveri

ng key ass

umpt

ions a

nd pot

enti

sen

sit

vit

y to ch

ange

s. Th

e Comm

itte

e cons

ider

ed the l

imte

d publ

ic info

rmat

on

avai

lable o

n China B

ohai B

ank

, upo

n which t

o bas

e a VIU as

ses

smen

t, an

d the

imp

act of Ch

ina Bo

hai Ba

’s expo

sure

s to China c

omme

rcial re

al est

ate in t

sen

sit

vit

y ana

lysi

s wit

h regar

d to the V

IU as

ses

sment

The Committ

ee also

reviewed

management’

s assessment that the

Group

mai

ntane

d signﬁ

cant inﬂ

uence a

nd sat

isf

ed i

elf tha

t it rem

ained a

ppro

priat

to co

ntinu

e to eq

uit

y acco

unt fo

r the inve

stme

nt.

Reco

verabilty of

parent com

pan

’

inve

t i

subs

idaries

Discussed and receiv

ed conﬁrmaton from

management that

it had

adequately

ses

sed t

he recove

rabil

ty o

f invest

ment

s in su

bsida

ries

, tog

eth

er wit

h any

intercompa

indebtedness.

IT – user ac

cess

management

Rece

ived an u

pdat

e fro

m manag

emen

t and E

Y whe

re new an

d exist

ng IT

obs

vati

ons h

ad bee

n iden

tﬁed re

lati

ng to us

er acce

ss ma

nage

ment

suppor

ting in-scope applicat

ons includng privl

eged access

, user access

review

and other user

access manag

ement con

rols.

The Committee discussed

how m

anage

ment a

nd EY a

re work

ing t

o ass

ess th

is mat

ter an

d soug

ht and

received

assurance this

matter is rec

eivng

senior

management attentio

aluation of

ﬁnancal

instrument

s held

at fair value

Rece

ived re

por

ts an

d upd

ates at e

ach re

por

ting p

eri

od det

ailng t

he key

pro

cess

es un

dert

aken to p

rodu

ce and vali

date val

uati

ons of ﬁ

nanca

ins

tru

ment

s, i

nclu

dng any ch

ange

s in met

hodo

log

y from p

rior ye

ars a

sig

nﬁcant val

uati

on judg

emen

. The C

ommit

tee r

ecei

ved reg

ular u

pdat

on th

e level o

f unso

ld po

siton

s in th

e syn

dicat

ons po

rtf

olio an

d the val

uati

of th

ese p

osit

ons an

d plan

s for se

ll down

. The C

ommit

tee a

lso rev

iewed

cre

dit valu

atio

n adjus

tmen

, debi

t valuat

ion ad

just

ment

s, f

und

ing valu

atio

adjustme

nts and own credit adjustment

s and considered the exp

lanation

and r

ation

ale fo

r any signﬁc

ant movem

ent

her are

as of f

ocus:

Classif

cation of

sets a

s held

forsal

wed management’

s assessment of whether

asset

s o

r disposa

l groups

sho

uld b

e recl

assi

f

ed as he

ld for s

ale. Th

is inc

lude

d review

ng th

e fact

s and

circ

umst

ances f

or the p

ropo

sed s

ale of s

hippn

g ass

ets a

nd the r

emai

nng

Princpal Finance investment

Restructuring

cost

Revie

wed and co

nsid

ered

, on a qua

rte

rly b

asis

, inco

me sta

teme

nt char

ges

and c

redit

s cla

ssi

fe

d as re

str

uctu

ring

Hedge accounting

Revie

wed the i

nef

fect

vene

ss rep

ted in o

perat

ing in

come f

rom he

dge

acco

unti

ng and s

ignﬁcan

t hedg

e ter

minat

ons an

d the r

easo

ns fo

r this

axation

Revie

wed and considered management’s

judgements and assumptions with

respect to tax exposure

isks, includng

certain

ositons, a

nd ensured

adequate discl

osure in

the ﬁnanc

al state

ments has been made

. This included

und

ers

tand

ing th

e Grou

’s effe

cti

ve tax rat

e, the q

uant

um and b

asi

s of

rec

ognit

on of de

fer

red ta

x ass

s, and t

he UK b

ank lev

y ch

arge f

or the ye

Pro

sons for

legal and

regulator

matter

nsid

ered a

dvic

e pres

ente

d on the c

urre

nt sta

tus of s

ignﬁcan

t leg

al and

regulator

y matters, and

considered management

’

s judgements on the

level of

prov

ison

s and th

e ade

quac

y of di

sclos

ure, a

s set ou

t in Not

e 26 on pa

ge 390.

Going concern

asses

sment and

viablity s

tatement

•

Revie

wed man

agem

ent

’s proce

ss, a

sse

ssm

ent and c

oncl

usion

s wit

h resp

ect to t

he Gr

oup

’s goin

g conce

assessment and via

blit

statement, includng

the for

ward

-looking Corporate P

lan cashﬂows,

princpa

and e

mergi

ng ri

sks

, liqu

dit

y and cap

ital p

osit

ons

, and key as

sump

tion

s. Th

e Comm

itte

e also e

nsur

at the g

oing co

ncer

n ass

essm

ent an

d viab

lit

y stat

emen

t is con

sist

ent wi

th the G

rou

’

s S

trat

egic r

epor

and other

isk

disclosures

Fur

the

r det

ail

s can be f

oun

d on

ges 3

18, 8

6 and 8

Fair

, balanced and

understandable

•

e Comm

itte

e cons

idere

d, sat

isf

e

d its

elf and r

ecom

mend

ed to t

he Boa

rd, th

at the p

roce

sses

and p

roce

dure

s in plac

e ensu

re tha

t the An

nual Rep

ort

, take

n as a who

le, is f

air

, b

alan

ced an

understandable,

and pro

vides the informat

on necessar

y for

shareholders to assess the Group

’

s posito

and performance

, business model

and strategy

, and

the business risks it fac

es. The sta

tement is

und

erp

inned by t

he Co

mmit

tee’s, an

d the Bo

ard

’

, beli

ef tha

t all imp

ort

ant el

ement

s ha

ve bee

dis

clos

ed; and t

hat th

e desc

ript

ons o

f the G

roup’

s bu

sine

ss as se

t out in t

he St

rate

gic rep

ort a

consistent

with those used

for ﬁnanc

al reporting

in the Group

’

s ﬁnanc

al statements

ties during the y

ear

continued

119

Standard Chartered

– Ann

ual Rep

ort 202

Directors’ report

Examples

of deeper

discus

sons

into speci

fc topics

•

EY r

egio

nal p

art

ner over

views:

ceive

d over

ews and t

opical u

pdat

es fr

om EY

’s local re

gion

al par

tne

om Mala

ysi

a, Ge

rmany an

d the UAE. T

hese r

egio

nal over

iews pr

ovide

d insg

ht into t

he cha

llen

ges

fac

ed in th

e Gro

’s market

s f

rom a sta

tut

y audi

t per

spe

ctive; an

d prov

ided t

he Com

mitt

ee wit

e local a

udit p

artn

er’s as

ses

smen

t of the G

rou

’

s c

ontr

ol sys

tem

s in the

se mar

kets

, the q

ualit

y o

f the

oup

’s man

agem

ent fr

om a cont

rol p

ers

pect

ive and a b

ench

mark o

f the G

roup’

s co

ntrol e

nviro

nmen

aga

inst l

ocal an

d inter

nat

onal p

eer

s. Th

e over

vie

ws als

o provi

ded in

sght in

to loca

l regu

lato

devel

opme

s, th

e Grou

’s standi

ng and e

ngag

emen

t with l

ocal re

gul

ator

s and ar

eas of f

ocus f

or 2021.

The

se E

Y regi

onal p

artn

er over

iews wi

ll cont

inue in 202

2 and b

eyond

•

Financal regulatory reporting:

Recei

ved an

d discu

sse

d upd

ates o

n the G

roup

’s ﬁna

ncal re

gula

tor

rep

ort

ing re

medi

aton p

rogra

mme. Di

scus

son fo

cuse

d on th

e chall

enge

s involve

d with r

esou

rcing

, give

e spec

ialst s

kills r

equi

red an

d ﬁnanc

/liq

udit

y rep

ort

ing in t

he Gr

oup

’s net

wor

•

Aspire progr

amme:

Discu

sse

d a pap

er whic

h set ou

t an upd

ate on t

he Gr

oup

’s As

pire pr

ogram

me (

pro

gramm

e laun

ched i

n 2018 to d

eliver a m

ode

rn te

chno

logy s

yst

ems an

d data l

ands

cape

). Dis

cuss

foc

use

d on res

ource

s, ti

melne

s and th

e imp

act tha

t CO

D-

19 wa

s hav

ing on d

elive

y of the p

rogra

mme

•

Information technology access control

ceive

d and di

scus

sed re

por

ts o

n the wor

k und

er way to

imp

rove the G

roup’

s IT a

cces

s contr

ols an

d reme

diate w

eakn

ess

es ide

ntﬁed d

urin

g pri

or year a

udit

The C

omm

itte

e discu

sse

d how ma

nage

ment i

s work

ing to re

medi

ate th

e obs

vatio

ns rai

sed by E

and s

ough

t ass

uranc

e that t

his mat

ter i

s recei

vng s

enio

r manag

emen

t atte

ntio

n. E

Y’s T

chno

log

Ris

k Partn

er was inv

ted t

o jon the

se dis

cus

sons

. This w

ill con

tinu

e to be an a

rea of f

ocus f

or 2022

•

Internal ﬁnancal cont

rols:

Recei

ved and di

scus

sed a p

ape

r sett

ing ou

t the ap

proa

ch taken t

o safe

guar

e produ

ctio

n of the G

rou

’

s ﬁ

nanca

l boo

ks and r

ecor

•

Department for Business, Energy & Industrial Strategy (BEIS)

consultation paper:

At the C

ommi

ttee

’

req

ues

t, re

ceive

d and dis

cus

sed a pa

per s

etti

ng out t

he pro

posa

ls and r

ecom

mend

ation

s fro

m the B

EIS

con

sult

ation p

ape

r entit

led: ‘

Resto

ring T

ust in Au

dit and C

orp

orat

e Gover

nanc

e’

. Dis

cuss

on foc

used o

e recom

mend

atio

ns in th

eir cur

rent f

orm t

hat mig

ht be ch

allen

ging fo

r the G

roup t

o impl

emen

t and

als

o the ap

proa

ch the G

roup w

ould t

ake dur

ing th

e consu

ltat

ion pe

rio

d. A sub

-comm

itte

e was for

med t

ﬁnal

se over

sigh

t of the G

rou

’

s w

rit

ten re

spon

se to t

he BEI

S consu

ltat

ion pa

per

•

Data management:

Recei

ved an

d discu

sse

d pap

ers o

n the G

roup

’s Dat

a Mana

geme

nt Frame

work

fol

lowin

g on fro

m disc

usso

ns hel

d in 2020. The H1 2021 di

scus

son fo

cuse

d on th

e reso

urce, t

imeln

e, ri

sks

and b

udge

t allo

cated t

o this

. The H

2 20

1 disc

usso

n focu

sed o

n the fo

ward-lo

okin

g time

lnes

, how th

bus

ines

ses a

nd fu

ncti

ons are e

mbe

dding t

heir d

ata ma

nage

ment a

ction p

lans an

d the g

overna

nce in

place to

oni

tor and

manage this

embedding

•

Conduct:

With th

e tran

sfer o

f overs

ight o

f Cond

uct Ris

k from t

he C

SC to th

e Comm

itte

e, rec

eived

and d

iscus

d a pape

r sett

ing ou

t the p

rogre

ss ma

de on th

e impl

emen

tato

n of a new Co

ndu

Ris

k mana

geme

nt appr

oach

, key them

es acro

ss th

e ﬁrs

t line of d

efen

ce Con

duct a

gend

a, area

s of

eme

rging r

isk

, exte

rnal d

evelop

ment

s an

d the ro

admap f

or 2022

. A bri

ng was r

ecei

ved on th

e FCA

’s

new Consumer Duty consultation and emerging

global developments regarding surveillance a

transactio

n reporting

•

ax up

dat

Recei

ved and d

iscu

sse

d a pape

r sett

ing o

ut impr

ovemen

ts th

at had b

een m

ade to t

oup

’s tax r

epor

tin

g, whi

ch incl

uded d

etai

l on tran

sfer p

ricn

g. EY

’s T

x Partn

er was inv

ted t

o jon thi

discusson

to add perspective

•

IFRS 9 m

ode

ls:

Rec

eive

d and dis

cuss

ed up

date

s on the G

rou

’

s use o

f IFRS 9 ECL m

ode

ls. In M

ay 2021,

dis

cuss

on foc

use

d on non-p

erf

ormi

ng mod

els an

d the re

med

iaton w

ork un

der wa

y to rect

y th

rfor

manc

e issu

es. I

t was ack

nowl

edg

ed tha

t the im

pact o

f CO

D-

19 wo

uld like

ly chal

leng

e the

cre

dit be

hav

iour

s buil

t into th

e Gro

’s mode

ls, r

esul

ting in m

ore of t

he exi

stn

g mode

ls fall

ing int

o the

non

-per

form

ing cat

egor

. In D

ecem

ber 2021

, the Co

mmit

tee n

oted t

he sig

nﬁcant pr

ogre

ss be

ing mad

with regard

to the remediaton of

non-performing models

•

Major disputes and sign

ﬁcant non-ﬁnancal

rime

compliance-r

elated regulatory gov

ernment

inve

g

eceived and d

iscusse

wo updates

on major disputes

and sign

ﬁcant non-F

inancal

Crime Complianc

e-related r

egulator

y go

vernment inv

estgations facing the

roup

•

MiFID II

Implementat

ion

and Signﬁcant T

rans

action R

eport

ing

Obligat

ons (

STORs

eceived

a paper

on th

e Gro

’s compl

iance w

ith all o

blig

aton

s with

n MiFID I

I and th

e Grou

’s ST

Rs, t

heir cu

rre

nt ris

proﬁle and remediaton plans

•

Finance resour

cing:

Reviewed a

nd dis

cuss

ed a pa

per pr

ovidng a

ssu

rance t

hat

: the Acco

unti

ng and

Fina

ncal R

orting

unction

is adequately and

appropriately

resourced; the

qualifcations, experienc

and t

rainn

g of coll

eagu

es is ap

prop

riat

e; and the b

udg

et allo

cate

d is suf

ﬁcent t

o maint

an exte

rnal

reporting obligatons

•

2020 Au

dit Qu

alit

y As

sur

ance R

eview (AQR) Ins

pec

tio

n Repor

Revi

ewed and d

iscu

sse

d the AQR

Ins

pect

ion Rep

ort i

ssu

ed in Ma

y 2021 for KPM

G’s audit o

f the G

roup

’s ﬁnanca

l state

ment

s fo

r the

year-end

ed 31 De

cemb

er 2019

. Ah

ead o

f this

, the C

ommit

tee C

hair he

ld dis

cuss

ons w

ith th

e FRC and

KPM

G on the key ﬁn

dngs

, whic

h were al

so sha

red wi

th the C

ommi

tte

•

FRC’s

obser

vations

on the Group

’s 20

20 Annual Report:

Rev

iewed a

nd dis

cuss

ed th

e Gro

’s resp

onse

to th

e FRC’s obs

vati

ons on t

he G

roup

’s 2020 Annu

al Repo

•

olck

er compliance report:

Noted the

change in Board

Committee responsibl

ites

in respect

of the

olcker

Rule

ties during the y

ear

continued

120

Standard Chartered

– Annu

al Repo

rt 2021

Directors’ report

Corporate gov

nanc

Group Stat

utory

Provi

ded ove

rsig

ht of th

e work u

nder

taken by E

Y as th

e Gro

’s Stat

utor

y Audit

. In pa

rtic

ular, the

Committ

ee:

•

rev

iewed an

d disc

usse

d the r

isk

s iden

tﬁed by E

Y’s aud

it plan

ning, s

eek

ing an

d recei

vng a

ssu

rance t

hat

ese ri

sks h

ave be

en ad

dres

sed pr

oper

ly in t

he aud

it stra

teg

•

sat

isf

ed i

elf th

at EY h

as allo

cate

d suf

ﬁcent an

d suit

ably ex

per

ienc

ed res

ource

s to ad

dres

s thes

e ris

and r

eviewe

d the ﬁn

dngs f

rom th

e audi

t work u

nder

taken

•

ught an

d rece

ived as

sur

ance th

at no un

due pr

ess

ure ha

s been a

sse

rte

d on th

e level of a

udit fe

es, t

ens

ure th

at the

re is no r

isk t

o audit wo

rk be

ing con

duct

ed ef

fect

ivel

y and in

depe

nden

tly

•

con

duct

ed an ann

ual pe

rfo

rman

ce and ef

ctive

ness r

eview o

f EY

. Inp

ut was r

ecei

ved fro

m Com

mitte

members

chairs of subsid

y audit committees, the Group Management

eam, regional

countr

y chief

ﬁnan

cal of

ﬁcer

s, me

mber

s of t

he Gro

up Finan

ce Lead

ers

hip T

eam an

d the G

IA Man

agem

ent T

eam

The r

esul

ts of t

his in

put was d

iscu

sse

d by the C

ommit

tee. O

vera

ll, it was f

elt th

at EY i

s cons

idere

d to be

fect

ive, ob

ject

ve and in

depe

nden

t in it

s role a

s the G

roup

’s Stat

utor

y Au

ditor. The C

ommi

ttee a

gree

to pr

opos

e to th

e Boar

d that t

he re-

appo

intm

ent of E

Y as th

e Gro

’s Stat

utor

y Au

dito

r for a f

urt

her

year b

e reco

mmen

ded t

o share

hold

ers a

t the 202

2 A

M. T

his rec

omme

ndat

ion was m

ade w

itho

any inﬂu

ence f

rom a t

hird pa

y and f

ree f

rom any co

ntra

ctual o

blig

aton t

o do so, in

cludn

g for th

avoi

danc

e of dou

bt, any co

ntra

ctua

l term d

escr

ibe

d in Ar

ticle 1

) of t

he Audi

t Regul

atio

•

rev

iewed an

d disc

usse

d EY

’

s aud

it plan

ning re

por

t and any up

dat

es, au

dit re

sult

s rep

ort

s and in

ter

m

revi

ews

•

ceive

d and dis

cuss

ed a pa

per se

ttin

g out E

Y’s cont

rol th

eme

s and ob

ser

vat

ions f

rom th

e 31 De

cemb

2020 year

-en

d audi

t. E

Y’s T

chno

log

y Risk Par

tne

r was invt

ed to jo

n this di

scus

son

•

rev

iewed an

d disc

usse

d EY

’

s 2021 app

roac

h to the p

rivat

e W

itte

n Audit

or Repo

rt to t

he PR

A for th

e year

ended 31 December 2

021.

The C

omm

itte

e met pr

ivat

ely wi

th E

Y at the e

nd of cer

tain C

ommi

tte

e meet

ings

, wit

hou

t manag

emen

being present.

Phil Ri

vett m

et reg

ular

ly wi

th the E

Y par

tne

rs l

eadin

g the G

roup’

s au

dit dur

ing t

he cou

rse o

f the ye

The C

omp

any comp

lies w

ith th

e Stat

utor

y Au

dit se

vice

s for Larg

e Comp

anie

s Marke

t Investi

gato

(Man

dato

y Use of C

omp

etit

ve T

ender P

roces

s and Au

dit Com

mitt

ee res

pon

siblit

es

) O

rder 2014

. EY

s been t

he Gr

oup

’s Sta

tuto

y Audit

or for t

wo ye

ars

. In acco

rdanc

e with t

he Audi

t Practi

ces Bo

ard

’

req

uirem

ent

s, t

he lea

d audi

t enga

geme

nt par

tne

r has he

ld the r

ole fo

r two ye

s. The l

ead e

ngag

emen

par

tne

, D

avid C

annin

ones

, has a b

ackgro

und of a

udit

ng ban

ks an

d unde

rst

ands t

he mar

kets i

n which

the Group opera

tes

Foll

owing t

he 2017 au

dit te

nder, EY wa

s re-ap

poin

ted a

s the G

roup

’s Statu

tor

y Au

ditor f

or the ﬁ

nanca

l year

ending 31

ecember 2

021.

Non-

audit ser

vices

•

Responsible f

or setting, re

wng and monitorng

the appropriateness of the pr

ovison

of non-audit

ser

ices

, appl

yin

g the G

roup’

s po

licy o

n the a

ward of n

on-au

dit se

vice

s to the E

erna

l Audito

, w

hile

tak

ing in

to acco

unt th

e relevan

t ethi

cal gui

dance

•

In 2021

, the G

roup sp

ent $

9 m

illon o

n non-a

udit s

vice

s provi

ded by E

Y and $5

.3 m

illon o

n audit

rel

ated s

ces suc

h as qua

rte

rly an

d half ye

ar revie

ws and re

gul

ator

y re

por

ting

Fur

the

r det

ail

s on no

n-au

dit s

vic

es pr

ovid

ed by E

Y can b

e foun

d in No

te 38 o

ge 417

d the G

rou

’s app

roa

ch to no

n-a

udit s

ces o

page 190

Internal

controls

•

Dis

cus

sed re

por

ts f

rom G

IA that p

rovid

e GIA

’s view o

n the s

yste

m of inte

rnal c

ontr

ols acr

oss al

l risk t

pes

bus

ines

s and co

untr

y f

ction

s, in

cludn

g summ

y high

lght

s of th

e most s

ignﬁcan

t matt

ers i

dent

ﬁed

by GI

A and are

as of th

emat

ic int

eres

t that h

ave ari

sen a

s part o

f the a

udit

s and war

rant t

he Co

mmitt

ee’s

att

enti

on. O

n a quar

ter

ly bas

is, G

IA rep

ort

s on any ove

rdue r

emed

iaton o

f ﬁndn

gs. T

he Boa

rd Risk

mmitt

ee, th

e Boa

rd Financ

al Crim

e Risk C

ommi

tte

e and th

e CSC di

scus

sed s

epar

ate rep

ort

s f

rom th

oup He

ad of In

tern

al Audit o

n GIA

’s appr

aisal o

f cont

rols ac

ross key r

isk

s, su

bjec

t to eac

h Comm

itte

e’

over

sight

. Co

llect

ivel

, th

e repo

s rece

ived by th

ese C

ommi

ttee

s provi

ded a

ssur

ance th

at the

re are

effective i

nternal controls

withn the

roup

•

Thr

ough

out th

e year, the C

ommit

tee co

ntin

ued to p

robe t

hat t

he Gro

’s inte

rnal co

ntro

ls inf

rast

cture

was n

ot bei

ng adve

rse

ly imp

acte

d by work

ing f

rom ho

me (W

FH) arra

ngem

ent

Fur

the

r det

ail

s on int

ern

al co

ntro

ls ca

n be fo

und o

pag

e 185

ties during the y

ear

continued

121

Standard Chartered

– Ann

ual Rep

ort 202

Directors’ report

Group

Internal

In 2021, G

IA move

d back t

o a more b

usin

ess a

s usua

l appro

ach, u

tils

ing a 6 + 6 mo

nths Au

dit Plan w

ith a

det

aile

d review a

nd ref

resh a

t six mo

nth

s to ens

ure th

e 2021 Audit Pl

an rema

ined r

elevant a

nd foc

use

d on

e Grou

’s changi

ng ris

k proﬁl

e. In Gro

up mar

ket

s wher

e CO

D-

19 i

mpact

s wer

e felt m

ore he

avil

y dur

ing

e year

, suc

h as the D

elta va

rian

t impa

ct on Ind

ia fro

m May 2021

, GIA fo

cuse

d, as r

equir

ed, on t

he rev

ise

app

roach t

hat h

ad bee

n adop

ted d

urin

g 20

20, util

sing s

hor

t, sh

arp rev

iews t

o provid

e time

ly opi

nons o

e Grou

p, incor

por

ating a

gile pr

incp

les in

to ways o

f work

ing. T

he Co

mmitt

ee was u

pdat

ed wi

th the

req

uire

d chang

es in a ti

mely m

anne

. Th

is ena

bled t

he Co

mmitt

ee to b

e provi

ded w

ith as

suran

ce tha

the Group

’

s response to and operations during C

OVID-

remained appropriate for our shareholders,

cus

tome

rs an

d colle

ague

s and ali

gned t

o the G

roup’

s He

re for g

ood br

and pro

mise

. The Co

mmit

tee s

ought

and r

ecei

ved as

suran

ce fro

m mana

geme

nt tha

t this a

gile ap

proa

ch was ad

ding val

ue to th

e busi

nes

con

tinu

ed to fo

cus on t

he ef

fect

iven

ess of c

ontro

ls and p

roce

sse

s, and f

acto

red in em

ergin

g ris

The C

omm

itte

e also m

onito

red, o

n an ong

oing b

asis

, tha

t trave

l rest

rict

ons an

d WFH ar

range

ment

s were

not i

mpac

tng th

e qual

y or inte

grt

y of a

udit wo

rk or t

he inte

rna

l contr

ols in

fras

tru

ctur

e of the G

rou

In 2019

, an e

xter

nal as

ses

sor, Gran

t Thor

nto

n (

sel

ecte

d by the C

ommit

tee f

rom a co

mpet

itve r

eque

st for

pro

posa

l proc

ess

), cond

ucte

d an exte

rnal q

ualit

y a

ssur

ance rev

iew on t

he GIA f

ction

, whic

h ass

ess

e requi

reme

nts o

f GIA a

gains

t key profe

ssi

onal an

d regu

lato

y bodi

es gover

ning t

he pra

ctice o

f inte

rnal

aud

it. W

hile it wa

s reco

gnise

d tha

t GIA “

neral

ly conf

orm

s” to th

e requi

reme

nts o

f the

se stan

dard

s, so

rec

omme

ndat

ions we

re mad

e. Dur

ing t

he cour

se o

f 20

20, t

he Com

mitt

ee re

ceive

d upda

tes on p

rogre

aga

inst t

hese r

ecom

mend

atio

ns and in 202

1 it note

d tha

t all act

ions we

re clos

ed wi

th no f

urt

her ad

dito

nal

work required.

In 2021, f

or th

e most s

ignﬁcan

t matt

ers i

dentﬁ

ed by GIA

, b

usine

ss an

r regi

onal m

anage

ment we

invt

ed to at

tend C

omm

itte

e meet

ing

s to prov

ide up

date

s on the s

teps b

eing t

aken to en

hance t

he con

trol

environ

ent

and address in

ternal audit

ﬁndngs.

The Committee

•

rev

iewed t

he ade

quac

y of re

sour

cing an

d prop

ose

d work pl

ans fo

r GIA an

d is sat

isf

ed t

hat t

hese a

app

ropr

iate in l

ight of p

ropo

sed ar

eas of f

ocus

, exp

ert

ise an

d skill

s tha

t are req

uire

•

ses

sed t

he rol

e and ef

fect

iven

ess of t

he GI

A fun

ctio

n, and r

eviewe

d and mo

nitor

ed GI

’

s pr

ogres

aga

inst t

he 2021 Audit P

lan and t

he rev

iew and m

onito

rng o

f post

audit a

ctio

ns. Ch

ange

s to the

Audi

t Plan, in p

art

icula

r CO

D-

19-re

late

d chan

ges, a

nd pe

ople ch

ange

s, wer

e also d

iscus

d by

the Committee

•

rev

iewed an

d approve

d GIA

’s 2022 Au

dit Plan an

d bud

get

•

rev

iewed an

d approve

d the r

efre

she

d GIA Ch

arte

•

ceive

d and dis

cuss

ed re

por

ts f

rom th

e Glo

bal He

ad, Aud

it Qua

lit

y As

suran

ce (

QA) on the QA f

uncti

on’s

vie

w of the c

ontro

l envir

onme

nt in GIA

•

scr

inse

d any long ove

rdue G

IA is

sues a

nd req

uest

ed man

agem

ent to d

evelop r

isk r

educt

ion pl

ans fo

ite

ms wit

h long c

losu

re per

iod

s to be mo

nito

red by G

IA.

The C

omm

itte

e is sat

isf

ed w

ith th

e inde

pen

dence o

f the G

IA fu

ncti

on.

er the co

se of th

e year, Phil Rive

tt met r

egul

arl

y with t

he Gr

oup He

ad of In

tern

al Audi

t and th

e GIA

Man

agem

ent T

eam

. Phil Ri

vett wi

ll eng

age wi

th the i

ncomn

g Gro

up Hea

d of Int

erna

l Audit

, due to t

ake

up th

e role a

s Gro

up Hea

d of Int

ern

al Audit w

ith ef

fec

t from 1 A

pril 202

Group compliance

Regu

lar com

plian

ce rep

ort

ing to t

he Com

mitt

ee se

ts ou

t the wo

rk car

rie

d out by th

e CFCC f

uncti

on,

sig

nﬁcant co

mplia

nce and r

egul

ator

y r

isk

s and is

sue

s facin

g the G

roup, an

d key actio

ns be

ing take

n to

address and

mitgate these ma

ters.

In 2021, t

he Co

mmit

tee wa

s upda

ted on a

nd dis

cuss

ed:

•

key sup

sor

y are

as of f

ocus

, reg

ulato

y upd

ates an

d for

war

d-look

ing t

heme

s, th

e stat

us of t

he Gro

’s

core col

regulator

y relationshps

and enforcement matters

•

e impo

rtan

ce of con

tinu

ng to st

rengt

hen t

he Gro

’s ris

k cultu

•

e fun

ction’s op

erati

ng mod

el, in

cludn

g an over

iew of th

e CFCC bud

get an

d organ

isat

onal c

hange

to si

mplf

y t

he fu

ncti

on. In co

njunc

ton w

ith th

e Boar

d Financa

l Crim

e Risk C

ommit

tee, t

he Co

mmit

tee

s discu

sse

d the G

roup’

s Ris

k and CFCC Pr

oduc

tiv

ty P

rogram

me, an

d the Fina

ncal Cr

ime Su

veilla

nce

Operation

s (

) T

rans

formation

•

con

duct

, wit

h a focu

s on WFH ar

range

ment

s an

d the ri

sk and c

ontro

l envir

onme

nt in pla

ce in res

pon

-1

•

update

s from CFCC

ssurance.

The C

omm

itte

e review

ed a pap

er on co

mplia

nce res

ourc

ing and c

onﬁrm

aton w

as rece

ived f

rom

man

agem

ent th

at the f

ction i

s ade

quate

ly re

sour

ced and t

hat a cl

ose wat

ch was b

eing kep

t on thi

give

n the b

uoyant ext

ern

al hir

ng mar

ket in som

e of th

e Grou

’s terr

itor

es.

The C

omm

itte

e also r

eviewe

d the 202

2 Comp

lianc

e Plan, b

udge

t and pr

ior

ties

Phil Ri

vett m

et reg

ular

ly th

rough

out t

he year w

ith th

e Gro

up Hea

d, CFCC

The B

oard Fi

nanca

l Crime R

isk Co

mmit

tee re

ceive

d rep

ort

s on ﬁn

ancal cr

ime co

mplia

nce-r

elate

d mat

ter

ties during the y

ear

continued

122

Standard Chartered

– A

nnu

al Rep

ort 202

Directors’ report

Corporate gov

nanc

Speakin

g Up

eaki

ng Up is t

he Gro

’s conﬁd

ental a

nd ano

nymou

s whis

tleb

lown

g progr

amme (the Pro

gramm

)

The P

rogra

mme ha

s bee

n desig

ned t

o compl

y with t

he G

roup

’s UK le

ad re

gulat

s’

, the PR

A and t

he FC

Whistleblowng

Rules. Our whistleblow

channels are ava

ilable to

anyone –

colleagues, contractors,

sup

plier

s and m

emb

ers o

f the pu

blic – to r

aise co

ncer

ns con

ﬁdent

ally a

nd anony

mou

sly

The C

omm

itte

e review

ed and di

scus

sed a

n annua

l repo

rt on t

he op

erati

on and e

ffe

ctive

nes

s of the

Prog

ramme w

hich wa

s subs

equ

entl

y tabl

ed to t

he Boa

rd. Th

e repo

rt prov

ide

d the Co

mmit

tee w

ith

suran

ce of th

e Gro

’s ongo

ing com

plian

ce wit

h the Wh

istl

eblow

ng Rule

s. Th

e Comm

itte

e disc

usse

e linkage

s bet

en Spe

akin

g Up and d

ata wit

hn th

e Grou

’s My V

oice (

mploye

e enga

geme

nt sur

vey)

res

ult

s and th

e focu

s area

s for 202

In 2021, t

he Co

mmit

tee Ch

air rec

eived u

pdat

es on S

peak U

p issu

es and i

ncden

ts a

s nece

ssar

Fur

the

r det

ail

s on Sp

eak

ing Up c

an be f

oun

d on

ge 72

Interaction

with regulators

ypic

ally

, th

e Comm

itte

e mee

ts wi

th th

e PRA o

n an annu

al bas

is, w

itho

ut mem

ber

s of man

agem

ent b

eing

pre

sent

. The p

urp

ose o

f such me

eti

ngs is t

o enab

le a disc

usso

n bet

en the C

ommi

ttee a

nd th

e PRA

con

cern

ing are

as of fo

cus fo

r bot

h the Co

mmit

tee an

d the PR

. This m

eet

ing did n

ot occ

ur in 2021 du

to COVID-19 rest

rict

ons; how

ever

, i

t is anti

cpat

ed tha

t this w

ill res

ume on

ce thin

gs re

turn t

o nor

malit

Phil Ri

vett a

tten

ded tr

ilat

eral m

eeti

ngs w

ith E

Y and th

e PRA ove

r the co

urs

e of the ye

ar and a

lso me

t with

e PRA in h

is capa

cit

y as Aud

it Com

mitt

ee Chai

Link

ges with

subsidar

y audit

commi

ttees

The

re are st

rong l

inkage

s and int

erac

tons i

n place b

wee

n the Co

mmit

tee, r

egion

al hub a

udit co

mmit

tees

and b

anki

ng sub

sidar

y a

udit co

mmit

tees

. In 2021, Ph

il Rive

tt att

ende

d a Stan

dard Ch

art

ered B

ank (Ho

Kong

) Limted

(SCB Hong

Kong)

audit committee

meeting and

a Standard Cha

tered

ank

(Singa

pore

)

Lim

ted (SCB Sin

gap

ore

) aud

it comm

itte

e mee

ting

. The au

dit com

mitt

ee cha

ir of SCB H

ong Kong a

nd SCB

Singapore

respectively attended one

Standard Chartered P

Audit Committee

eting.

This practice

will

con

tinu

e in 2022 to r

einfo

rce th

ese imp

ort

ant lin

kages

Phil Ri

vett h

oste

d an annu

al vid

eo-

confe

rence c

all wit

h the ch

air

s of sub

sidar

y a

udit co

mmit

tees a

nd INED

in Ma

rch 2021.

tail

s of th

is cal

l can b

e foun

d on

ge 11

Commi

tee

effectiv

eness rev

iew

ring 2021, a

n inter

nal Bo

ard and B

oard Co

mmitt

ee ef

fect

ivene

ss revi

ew was facil

tated by t

he Gr

oup Co

mpany Se

creta

ey obs

ervation

s from t

he 2021 internal

effectiv

eness re

vie

The f

eedb

ack on t

he Com

mitte

e’

s f

unct

ionng an

fect

ivenes

s was po

sitve a

nd it spe

cif

cally hi

ghlght

ed:

•

The C

ommit

tee h

as main

taned a h

igh stan

dard of wo

rk,

and t

he Com

mitte

e Chair i

s well prep

ared an

d eff

ecti

ve in

ensuring open discussons

•

In ter

ms of co

mpos

iton

, it was felt t

hat th

ere is a go

balance of ban

king, accountin

g and control skills

•

The c

ontr

ibuto

ns of E

, as the G

roup

’s Stat

utor

y Audit

were well rated

•

Suggestions were pr

ovided on potential topics for

trainng ses

sions

202

2 Actio

n Plan

The 202

2 Action Pl

an for th

e Comm

itte

e reﬂect

s sug

gest

ions

fro

m the evalu

atio

n and cont

inues t

o build o

n the so

lid

pro

gress m

ade la

st year

•

Consider includng an

annual Committee strateg

session

to rev

iew spe

cif

c issu

es or fo

rth

coming c

hange

•

Con

side

r a dedica

ted se

ssio

n on inte

rnal co

ntrol

s and

additonal

exp

ectations f

or the Committee aris

rom

the BEIS consultation

•

Consider scheduling addit

onal trai

nng on audit aspects

rel

ating t

o Climat

e, Net Zero an

d Data Ri

ties during the y

ear

continued

123

Standard Chartered

– Ann

ual Re

por

t 2021

Directors’ report

d Ri

mmittee

I am pl

eas

ed to p

rese

nt th

e Boar

d Risk C

omm

itte

e’s repo

rt fo

r the ye

end

ed 31 D

ecem

ber 202

e Comm

itt

ee was a

gain ve

y acti

ve thi

s year an

d enga

ged a

cros

s a

wide range

of risk management issues. From

a regulator

y perspective,

the Committee has held

a number of discussons

on important topics.

These included

the Bank of

England’s

(BoE) Resolvab

ilt

ssessment

Framework, the Climate Bie

nnal

xplora

tor

Scenar

io (

CBES) stress

test, operational

resilence

includng I

mpor

tant

Business Ser

vices

and

Impact

oler

ance Sta

tement

s, the

BoE Solvency stress test

and the

Interbank Offered Rate (

IBOR

) transiton.

In pa

rti

cula

, t

he Co

mmit

tee inve

ste

d time a

nd fo

cus to r

eview,

dis

cus

s, pr

obe an

d chal

leng

e the G

rou

’s Resol

vabil

ty A

ess

ment

Report, includng

key assumptions made

by management,

ahe

ad of t

he Bo

ard-a

pprove

d sub

mis

son to t

he Bo

E in Oct

obe

r 2021.

Resolvabilt

y will remain a

key area of focus, scr

utiny and discusson

for t

he Co

mmit

tee a

nd th

e Boar

d thro

ugh

out 202

Sim

lar

, t

he Co

mmit

tee re

viewe

d, dis

cus

sed a

nd cha

llen

ged t

CBE

S sub

mis

son t

o the B

oE. A

s a res

ult of t

his

, the C

ommi

ttee

requested management to

consider how the outcomes

rom

his

efu

l exerci

se can b

e lever

age

d fur

er by the G

rou

p and

incorporated into existng

risk management and stress testing

proces

ses, which managem

ent has taken

nboard. Climate Risk

rem

ains a

n impo

ant are

a of fo

cus fo

r the C

ommi

tte

e and th

Group more broadly

S rem

aine

d a key prio

rt

y in 2021

, wit

h cont

inue

d rep

ort

ing f

rom

man

age

ment i

n the ﬁr

, sec

ond an

d thir

d line

s of def

ence

. The IC

ard Ri

sk App

eti

te met

ric

s hav

e been p

ivot

al thi

s year i

n enab

ling

e Comm

itt

ee to t

rack t

he pro

gres

s bei

ng mad

e and d

elve de

epe

int

o area

s tha

t requ

ire co

ntin

ued f

ocus

. IC

S rema

ins an o

ngoi

priorty for the Committee.

ere ha

s bee

n a goo

d level o

f repr

esen

tat

ion f

rom th

e bus

ines

ses

and f

ctio

ns at Co

mmit

tee m

eet

ing

s, an

d also f

rom a re

gio

nal an

countr

level,

which has enabled the Committee

to explore how risks

are b

eing m

ana

ged on t

he gro

und i

n this ev

chan

ging e

nviro

nmen

In pa

rti

cula

, t

he ri

sks a

sso

ciat

ed wi

th wor

kin

g from h

ome (

WFH)

ve bee

n ass

ess

ed in a n

umbe

r of dif

fer

ent ar

eas

, give

n the im

pac

of COVID

19 an

d also t

he G

roup’

s t

rans

iton t

o a hybr

id wor

kin

g mod

el.

e Comm

itt

ee met v

tual

ly thr

ough

out 202

1, du

e to COVID-19

res

tri

cton

s; howev

, r

egu

lar me

eti

ngs an

d care

ful r

eview o

f all

age

nda

s and p

aper

s ha

ve ensu

red t

hat t

he Com

mit

tee ha

s be

abl

e to fo

cus on t

he ri

ght are

as an

d main

tan en

gag

emen

t in the

virtual environment. Outside of Committee

eetings, I

held regular

call

s wit

h the G

rou

p Chief R

isk Of

ﬁce

r (

GCR

), a wide r

ange o

f oth

mber

s of t

he Ris

k fun

ctio

n, an

d the s

enior m

ana

geme

nt of t

oup, to e

nsu

re tha

t I was kep

t abre

ast of ke

y risk

s and e

mer

ging

deve

lopm

ent

s as t

hey occ

urr

ed, w

hich in t

urn

, ens

ured t

hat

mmit

tee m

embe

rs we

re not

ed o

f signﬁ

cant eve

nts i

n a

timely ma

nner.

In Ma

rch 2021

, we hel

d a blue s

ky t

hink

ng/h

ori

zon sca

nnin

g ses

sion

whi

ch con

side

red t

he po

tent

ial r

isk

s tha

t the G

roup m

ight b

e or

could become exposed to

. This session informed our

for

war

d-looking

age

nda a

nd res

ulte

d in th

e Comm

itt

ee rev

iewn

g pap

ers a

nd hol

ding

eper d

iscu

sso

ns invo

lvn

g key mar

kets s

uch a

s: Chin

a, incl

udn

e outl

ook f

or th

e Chine

se ba

nkin

g sec

tor an

d chall

eng

es fac

ed;

erat

iona

l stab

ilt

y is

sues a

nd rem

edia

ton u

nder w

ay in Ho

ng Kong;

and Ko

rea, i

nclu

dng t

he Gr

oup

’s mo

rtg

age p

ort

foli

o. All of t

hes

discussons focused on

the controls in plac

e to manage the k

ey risks

and i

mpa

cts a

risn

g fro

m CO

ID-19

. W

e al

so cover

ed ma

tter

s su

ch as

Dig

tal A

sse

t Risk

, Int

eres

t Rate Ri

sk inc

ludn

g the G

rou

’s str

uct

ural

hedging pro

gramme, Exchange Rate Risk and Credit Fraud Risk. W

ve just h

eld o

ur 2022 b

lue s

ky t

hink

ng/h

oriz

on scan

ning s

ess

ion

which will

sist

in priortisng our

2022 agenda.

In 2021

, the C

ommi

tte

e held i

nfor

mal s

ess

ion

s coveri

ng Mo

del Ri

sk and

-valu

ati

on adj

ustm

ent (

. T

hes

e brie

f

ng ses

sio

ns wer

e ope

ned

up to a

ll Bo

ard me

mber

s, a

nd prov

ide

d dedi

cate

d tim

e and sp

ace to

engage on these

topic

in a more informal

sett

ing.

Cognis

ant of

he rapidly evolving external environme

nt, the

Committee continues to

discuss key

acroeconomic

and geopolitcal

sks a

nd cha

llen

ges fa

ced by t

he Gr

oup, an

d ass

ess h

ow the

se are

ing ma

nage

d and m

itga

ted by m

anag

eme

nt.

e foll

owing p

age

s prov

ide in

sght a

nd con

text in

to th

e Comm

itt

ee’s

wor

k and ac

tiv

tie

s dur

ing th

e year.

Naguib Kheraj

Cha

ir of th

e Boa

rd Ris

k Comm

itt

Committee compositon

Scheduled

meetings

Ad ho

N Kh

eraj (

hair

)

8/8

2/2

D P Co

nner

8/8

2/2

G Hue

y Evans, C

8/8

M Ram

8/8

2/2

P G Rive

8/8

2/2

8/8

2/2

y Hue

y Evan

s was un

abl

e to att

end o

ne ad h

oc me

eti

ng du

e to a pr

ior

business commitment

her a

ende

es a

t Comm

itt

ee me

ing

s in 2021 i

ncl

uded

the

Group

Chairman; Group Chief E

xecutive; Group Chief Financal Ofﬁcer; Grou

Chi

ef Ris

k Ofﬁc

er; G

rou

p Gen

eral C

oun

sel; T

asu

rer

; Gro

up He

ad,

Condu

ct, Financal

ime & Compliance; Group Head of Intern

al A

dit;

the Group

’

s Statutor

y Auditor

and Group Company Secretary

As p

art o

f the

ir ong

oing e

nga

geme

nt pla

ns in 2021

, Byro

n Gro

attended one Committee meeting, C

istne

Hodgs

attende

discussons on

ecifc topics

and Jasmine Whitbread attended

wo Com

mit

tee m

eeti

ngs an

d dis

cuss

ons o

n Reso

lvabi

lt

Sir I

ain Lob

ban

, C

ber Ad

vis

er to th

e Bo

ard, re

gul

arl

y atte

nds

dis

cus

son

s on Inf

orm

atio

n and Cybe

r Sec

urit

y (I

CS) Ri

sk and

technology

Y atte

nde

d all Co

mmit

tee m

eet

ings i

n 2021.

As part of

, and i

n addit

on to,

som

sche

duled

Committee meetings,

the Committee held priva

memb

ers-only

eetings.

e Comm

itt

ee’s memb

ship co

mpr

ise

s INEDs w

ho ha

ve a dee

p and

bro

ad ex

per

ienc

e of ban

kin

g and th

e ris

k fact

ors a

ffe

ctin

g the G

rou

Biographcal

details of the Committee members

can b

e vie

wed on

es 91 t

o 94

Main respon

siblites of the Committ

The Committee is

responsible for e

xercis

ng oversight, on behal

f of the

ard, o

f the key r

isk

s of th

e Gro

up. It re

view

s the G

roup’

s R

isk Ap

pet

ite

Statement and Enterprise Risk Management

Framework (ER

) and

makes

recommendations to the

ard.

s r

sponsib

lites a

include

rev

iewn

g the ap

prop

ria

tene

ss an

d eff

ect

iven

ess o

f the G

roup’

s r

isk

management systems, considerng the implc

ations of material

regulator

y c

ange

proposals

reviewng reports on princpal

isks,

inc

ludn

g Clim

ate Ri

sk, t

o the G

rou

’s busi

nes

s, an

d ensu

rin

g eff

ecti

due dil

gence on

mater

ial

acquistions and

disposals.

e Comm

itt

ee rep

ort

s to t

he Bo

ard on i

ts key ar

eas o

f focu

s foll

owin

each Committee meeting.

e Com

mitt

ee h

as wr

itt

en T

ms o

f Refer

enc

e tha

t can be

ewed a

sc.com

/termsofreference

“

The Commi

ttee was ag

ain v

y activ

thi

s y

ear and en

gaged ac

ross a wi

range of risk

management issues”

124

Standard

hartered

– An

nual Re

por

t 2021

Directors’ report

Corporate gov

nanc

ties during the y

ear

Risk Ap

pet

ite

Revie

wed and c

halle

nged t

he for

mul

atio

n of the G

roup’

s Ri

sk App

etit

e Stat

emen

t, in o

rder to a

ssu

re tha

t it

is ef

ctive in s

ett

ing app

ropr

iate b

ound

arie

s in res

pect o

f each Pr

incp

al Risk T

pe.

nsid

ered an

d reco

mmen

ded t

he Gro

’s Risk A

ppet

ite to t

he Bo

ard for a

pproval

ring 2021

, the f

ollow

ing key pro

pose

d chan

ges wer

e made t

o the Ri

sk App

etit

e ef

fect

ive in 2022

•

ard an

d Gr

oup Ma

nag

emen

t T

eam (MT

) Ris

k App

eti

te:

In or

der to in

crea

se cla

rit

y and f

ocus

, it was

pro

pose

d tha

t the Ri

sk App

etit

e be spl

it into B

oard a

nd MT Ris

k App

etit

e, in orde

r to str

eaml

ine th

volu

me of r

isk me

tri

cs con

sider

ed by th

e Boar

d and be

tter a

lign to p

eer

s. Al

l brea

ches wo

uld co

ntinu

e to

be re

por

ted t

o the C

ommit

tee in l

ine wi

th the c

urre

nt appr

oach

, in orde

r that t

he Co

mmit

tee an

d Boar

con

tinu

e to have v

isbi

lt

y of this

•

Integration of ne

w categories of risks:

Cons

ider

aton wa

s given t

o spe

cif

c param

ete

rs fo

r Climat

Dig

tal As

set a

nd Thir

d-Part

y r

isk

s , and ad

diton

al met

ric

s for T

ech

nolo

gy & Inn

ovatio

n. Dis

cus

son is

und

er way o

n the in

cluso

n of Dig

tal As

set r

elat

ed met

ric

Monitored actual

exposures relative to R

isk Appetite limts using

regular Board Risk

Information reports.

racke

d a broa

d range o

f ris

k metr

ics t

hat are r

epo

rte

d to the C

ommi

ttee p

eri

odcal

The B

oard Fi

nanca

l Crime R

isk Co

mmit

tee rev

iews t

he Ris

k Appe

tite S

tate

ment a

nd met

ric

s for Fina

ncal

Crime Risk

, excluding Fraud Risk.

Fur

the

r det

ail

s of th

e Gro

’s Ri

sk Ap

pet

ite a

re set o

ut on

page 260

Enterpr

ise Risk

Management

amew

ork (ERMF)

The ER

MF set

out the princples

and standards

for risk management

across the branches

and subsida

ries

of th

e Gro

up. Th

e Comm

itte

•

rev

iewed pr

opos

ed ma

teri

al chan

ges to t

he ERMF

, a

risn

g fro

m the 2021 an

nual rev

iew, and

rec

omme

nded t

hes

e chan

ges to t

he Bo

ard for ap

proval

•

con

side

red th

e appro

ach an

d key outc

omes o

f the 2021 an

nual ef

ctive

nes

s of the ER

. Afﬁ

rmat

on

was re

ceive

d fro

m the G

CRO tha

t the G

roup

’s risk m

anage

ment a

nd int

erna

l contr

ol fr

amewor

k is

mat

eria

lly ef

fec

tive an

d improve

ment a

reas we

re high

lghte

d for m

anage

ment a

tten

tion

Princpal Ris

The G

rou

’

s Pri

ncpal R

isk T

es are re

por

ted on a

t each s

ched

ule

d Comm

itte

e mee

ting

, thro

ugh a Bo

ard

Ris

k Infor

mat

ion rep

ort

, whi

ch acco

mpan

ies th

e GCRO’s rep

ort

. In add

iton

, the Co

mmit

tee h

ad dee

per

discussons on

the topics set out belo

Pri

ncpal r

isk

s are ri

s inher

ent in th

e Gro

’s stra

tegy a

nd bus

ines

s mod

el. Pr

incpa

l Risk T

es are f

orma

lly

deﬁn

ed in t

he ERMF

, w

hich prov

ide

s a str

uctu

re for m

onito

rng an

d cont

rollin

g the

se ris

ks t

hrou

gh the

Board-approved Risk Appet

ite.

Fur

the

r det

ail

s on Pri

ncp

al Ris

k T

es ar

e set o

ut on

age

s 44

, 261 an

d 264 t

o 279

•

Operational and T

echnology Risk

The Group de

ﬁnes Operational a

nd T

echnology Risk as

the potential for

loss resulti

ng from i

nade

quate

fail

ed int

ern

al proc

ess

es, t

echn

olog

y event

s, h

uman er

ror, or fro

m the im

pact o

f exter

nal eve

nts (incl

udng

legal risks

)

The Committee

•

dis

cuss

ed up

date

s on T

echn

olo

gy Risk r

edu

ction a

nd the i

ntiat

ves un

der wa

y to man

age and r

edu

echnology Risk

•

ceive

d a pape

r sett

ing ou

t an anal

ysi

s of whe

ther t

he cum

ulat

ive imp

act of COVID

19 and t

he Gr

oup

’s

cha

nge pro

gram

mes ha

ve the p

oten

tial t

o incre

ase t

he ris

k of op

erati

onal e

rror

s out

sid

e of th

e Grou

’s

Ris

k Appe

tite. D

iscu

sso

n focu

sed on t

he imp

act

s of WFH an

d cont

rols in p

lace, g

iven t

he exp

ecta

tion

s of

a h

ybrid working model

•

dis

cuss

ed a pa

per se

ttin

g out a s

tatu

s repo

rt on O

pera

tion

al and T

ech

nolo

gy Ri

•

dis

cuss

ed a pa

per se

ttin

g out h

ow the G

roup co

mpar

es to p

eer

s with r

egar

d to sys

tem re

cover

capabilties

•

ceive

d upda

tes on t

he Gr

oup

’s appr

oach t

o Infor

mat

ion T

echn

olo

gy (IT

) gover

nanc

e and

man

agem

ent

’s plans t

o stre

ngth

en thi

s. As p

art o

f the bl

ue sk

y thi

nkng

/hori

zon sca

nning s

ess

ion in Q1

21, emerging tech

nology risks and o

pportunites w

ere discussed using

an external consu

ltant f

or input

•

received

and disc

sed a

paper on technology obsolesc

ence.

125

Standard Chartered

– Ann

ual Rep

ort 202

Directors’ report

Princpal Ris

continued

•

Model R

isk

del Ris

k is th

e pote

ntial l

oss t

hat ma

y occu

r as a con

seq

uence o

f deci

sons o

r the r

isk of m

is-es

timat

on

at coul

d be pr

incpa

lly ba

sed o

n the ou

tpu

t of mod

els

, due to e

rror

s in th

e develo

pmen

t, im

plem

enta

ton

or us

e of suc

h mod

els.

The Committee

•

rev

iewed an

d disc

usse

d the key r

isk

s and is

sue

s relat

ing to M

ode

l Risk ma

nage

ment t

hrou

ghou

t 2021

•

attended teach-

in sessions on regulator

dels

and Model R

isk to obta

in a

eper

understanding of

the Group

’

s approach to

del

Risk management.

•

S Ris

S Risk i

s the r

isk to t

he Gro

’s ass

s, op

erati

ons an

d indv

idua

ls due t

o the p

oten

tial fo

r unau

tho

ris

access, use, d

isclosure, d

isrupton, modifcation or

destruction of informat

on asset

s and

or informat

systems.

The Committee

•

dis

cuss

ed re

gula

r repo

s from m

anag

emen

t with

n the ﬁr

, seco

nd and t

hird lin

es of d

efenc

e, on th

wor

k unde

r way to st

reng

then t

he G

roup

’s def

ence

s and cre

ate st

rong

er cont

rol f

ramewo

s, fo

cusin

on w

hat ha

d gone we

ll and wh

at cou

ld have g

one b

ette

r thro

ugho

ut the ye

. Suc

h repo

s enab

led

e Comm

itte

e to pro

be tha

t the G

roup’

s th

ree lin

es of de

fenc

e are alig

ned in a

dvanci

ng the G

rou

’

S stra

teg

y and key pri

ort

ies. S

enio

r mana

ger

s fro

m the bu

sine

ss were i

nvte

d to the

se dis

cuss

ons to

prov

ide on-

the-

groun

d per

spe

cti

ve and det

ail on any c

halle

nges f

aced

•

dis

cuss

ed re

gula

r repo

s on the G

rou

’

s T

nsfo

rma

tion an

d Remed

iato

n Port

folio an

d IC

S Risk pr

oﬁle

•

dis

cuss

ed an

d monit

ored t

he pro

gres

s of key ri

sk red

ucti

on inti

atve

s acros

s key cont

rol do

mains

•

rev

iewed an

d disc

usse

d IC

S Boar

d Risk Ap

pet

ite me

tric

s and co

ntro

ls tes

ting

, whic

h have b

een pi

votal

in en

ablin

g the Co

mmit

tee t

o track t

he pro

gres

s bein

g made a

nd del

ve dee

per in

to area

s tha

t requi

continue

d focus

•

rev

iewed an

d disc

usse

d an ext

erna

l repo

rt on t

he Gro

’s ICS p

rogr

amme an

d mana

geme

’

s r

espo

nse

•

con

tinu

ed to pr

obe th

e suf

ﬁcenc

y of f

undi

ng and re

sou

rce to su

ppor

t the G

rou

’

s I

CS pr

ogram

me,

cog

nisan

t of COVID-

19 i

mpac

ts an

d othe

r boo

ks of wo

rk un

der way i

n the G

roup.

Sir I

ain Lobb

an, w

ho is on

e of the e

xter

nal ad

vise

r memb

s of the B

oard Fin

ancal C

rime R

isk Co

mmit

tee

and Cyb

er Advi

ser to t

he Bo

ard, jo

ned C

ommit

tee m

eet

ings f

or the

se dis

cuss

ons

, toge

the

r with t

he Gro

Chie

f Ope

ratin

g Ofﬁ

cer; G

roup C

hief In

form

atio

n Ofﬁ

cer; t

he Gr

oup Chi

ef Info

rma

tion S

ecur

y Of

ﬁcer and

Chie

f Ope

ratin

g Ofﬁ

cer

, T

ust

, Dat

a and Resi

lence; an

d the G

roup C

hief Inf

orm

atio

n Secu

rit

y Ris

k Ofﬁ

cer

mmitt

ee me

mber

s als

o regu

larl

y att

end me

etin

gs of t

he Gro

’s C

ber S

ecur

y Advi

sor

y Fo

rum

•

reasury Risk

rea

sur

y Ris

k is for

med o

f Capi

tal and L

iqudi

y Risk

, and Int

eres

t Rate Ris

k in the b

anki

ng bo

ok.

Cap

ital Ri

sk is th

e pot

entia

l for in

suf

fc

ient lev

el, com

posi

ton or d

istr

but

ion of ca

pital

, own fu

nds an

eli

gble lia

blit

es to su

ppor

t the G

roup’

s no

rma

l acti

vtie

Liq

udit

y Ris

k is the r

isk t

hat th

e Gro

up may n

ot ha

ve suf

ﬁcent st

able o

r diver

se s

ource

s of fu

ndin

g to mee

s obli

gato

ns as th

ey fall d

ue.

Int

eres

t Rate Ris

k in the b

ankin

g boo

k is the p

ote

ntial f

or a red

ucti

on in ear

ning

s or eco

nomi

c value d

ue to

movem

ent

s in int

eres

t rates o

n bank

ing b

ook as

set

s, l

iablit

es an

d off

-bal

ance sh

eet i

tems

The C

omm

itte

e recei

ves a T

rea

sure

r’s repo

, at eac

h sche

dule

d mee

ting

, whic

h covers m

arket

devel

opme

s, capi

tal, li

qudit

y an

d fun

ding

, recove

y and re

solu

tion p

lanni

ng, re

gula

tor

y up

date

s and

rating ag

ency updates.

ring t

he year, the C

ommi

ttee c

onsi

dere

d and dis

cus

sed t

he Gro

’s capit

al and liq

udit

y p

osit

on and

e regu

lator

y envi

ronme

nt, i

nclu

dng th

e approval o

f the G

roup’

s In

tern

al Cap

ital Ade

qua

cy A

sses

sme

Proc

ess (I

AP) subm

iss

on to th

e PRA

, in or

der to s

atis

y it

self t

hat th

e Grou

’s appro

ach to cap

ital

planning is

comprehensi

e, rigorous and consistent with both

the current regulatory requirement

and

e likely an

ticp

ated o

utlo

The C

omm

itte

e also co

nsid

ered a

nd dis

cuss

ed th

e Gro

’s Inter

nal Li

qudit

y Ad

equa

cy A

sse

ssm

ent Pro

cess

(IL

AP) for su

bmis

son to t

he PR

A, w

hich co

nsid

ers t

he Gr

oup

’s liqu

dit

y pos

iton

, it

s fram

ework a

nd whe

ther

suf

ﬁcen

t liqud

y reso

urces a

re bein

g main

tane

d to me

et liabl

ites a

s they f

all due (see se

ctio

n on str

ess

testing for

urther deta

ils

Fur

the

r det

ail

s on T

asu

y Risk a

re se

t out o

pag

es 269 a

nd 270

ties during the y

ear

continued

126

Standard Chartered

– Ann

ual Rep

ort 202

Directors’ report

Corporate gov

nanc

Princpal Ris

continued

•

Credit R

isk

Cre

dit Ris

k is the p

ote

ntial f

or los

s due to f

ailu

re of a cou

nter

par

y to mee

t its a

gree

d obli

gato

ns to pa

the Group.

The Committee

received and di

scussed updates on

Credit Risk. These

discussons wer

e further enhanced

thr

ough d

eep di

ves int

o vario

us coun

y and b

usin

ess/

cli

ent se

gmen

, deta

ils of w

hich are s

et ou

t in

examples

of deeper discussons on

specif

c

topics.

The C

omm

itte

e spe

cif

cally f

ocus

ed on t

he Cre

dit Risk i

mpac

t of CO

ID-

•

raded

Risk

rade

d Risk i

s the p

oten

tial fo

r los

s resul

ting f

rom ac

tiv

ties u

nder

taken by t

he Gro

up in Fina

ncal M

arket

The Committee

•

ceive

d and dis

cuss

ed a pa

per se

ttin

g out t

he maj

or T

rade

d Risk d

evelop

ment

s and c

hange

s whic

h had

occ

urre

d in the Fin

ancal M

arket

s bu

sine

ss over t

he las

t year. Focus wa

s plac

ed on th

e T

rade

d Risk

envi

ronm

ent and c

ontro

ls in pl

ace

•

ceive

d and dis

cuss

ed a pa

per se

ttin

g out t

he maj

or T

rade

d Risk d

evelop

ment

s and c

hange

s whic

h had

occ

urre

d in the T

asu

y Port

folio

s over the l

ast ye

. Fo

cus was p

lace

d on the d

ecis

on-mak

ing pr

oces

for realisat

ons

•

att

ende

d a tea

ch-in se

ssio

n on XV

A to o

btain a d

eep

er und

ers

tandi

ng of why X

A is nee

ded an

d how it

impacts Fina

al Markets trading

operations.

Stress testing

The o

bjec

tve of s

tres

s test

ing is t

o supp

ort t

he Gr

oup in a

sse

ssin

g that i

•

es not h

ave a po

rtf

olio wi

th exces

sive r

isk co

ncen

trat

ion th

at coul

d prod

uce un

accep

tabl

y high lo

sse

under sever

e but plausible

cenarios

•

has sufﬁc

ent ﬁnanc

al resourc

es to withstand se

vere but plausi

ble scenarios

•

s the ﬁn

ancal ﬂe

xibli

ty t

o resp

ond t

o extre

me but p

laus

ible s

cenar

ios

•

und

stand

s the key b

usine

ss mo

del r

isk

s and con

side

rs w

hat ki

nd of even

t might cr

yst

allis

e thos

e ris

ks –

even if e

xtrem

e wit

h a low likelh

ood o

f occur

rin

g – and ide

ntﬁes

, as re

quire

d, act

ions t

o mitg

ate th

likelh

ood o

r impa

ct as re

quire

The C

omm

itte

e provi

ded over

sigh

t, ch

allen

ge and

, wher

e requ

ired

, approval f

or:

•

e scena

rio an

d stre

ss te

st res

ult

s for th

e 20

21 G

roup I

AP s

tres

s tes

•

e scena

rios a

nd res

ult

s for th

e 2021 Gro

up IC

AP stre

ss te

st and re

vers

e stre

ss te

•

the results for

the BoE Solvency stress test

•

e resul

ts f

or the G

roup’

s Rec

over

y Plan s

tres

s test

•

e Grou

’s R

cover

y Pl

•

e resul

ts f

or the Cl

imat

e Bienn

al E

xplo

rator

y Sce

nari

(

CBE

) stress test.

Fur

the

r det

ail

s of st

res

s tes

ting a

re se

t out o

pag

e 260 a

nd 261

Inter

nal c

ontrols

Dis

cus

sed re

por

ts f

rom th

e Gro

up Hea

d of Int

erna

l Audit w

hich prov

ide

d summ

arie

s of Gro

up Int

ern

Audi

t’s (

’

) ap

prai

sals of c

ontr

ols ac

ross key r

isk

s, su

bject t

o the C

ommit

tee’s over

sight

, to

geth

er wit

e key risk i

ssue

s iden

tﬁed by G

’

s wo

rk an

d mana

geme

nt acti

ons pu

t in pla

ce to add

res

s the ﬁnd

ngs

The Aud

it Committee, Board

Financ

al Crime

Risk Committee and

the Culture and

Sustainablity Committee

(

SC) dis

cus

s sepa

rate re

por

ts f

rom th

e Gro

up Hea

d of Int

ern

al Audit o

n GIA

’s apprai

sal of c

ontro

ls acr

oss

key ris

k t

ype

s, sub

ject t

o each re

spe

ctive C

ommi

tte

e’

s over

sig

ht. C

olle

ctive

, t

he rep

ort

s rec

eive

d by thes

mmitt

ees p

rovid

e assu

rance t

hat th

ere ar

e eff

ecti

ve inte

rnal co

ntro

ls wit

hn the G

rou

Remuneration as a

risk management

tool

nsid

ered a

dvic

e provid

ed by th

e GCRO to t

he Remu

nera

tion C

ommit

tee co

ncer

ning t

he ri

sk fact

ors t

o be

taken i

nto acc

ount by t

he Remu

nerat

ion C

ommit

tee in d

eter

minn

g incen

tves f

or th

e Grou

p Chief E

xec

utive

and o

ther c

olle

ague

s. Su

ch adv

ice as

sist

s th

e Remun

erati

on Com

mitt

ee in it

s as

ses

smen

t as to wh

eth

e Grou

’s remun

erati

on po

licy, pract

ices an

d proc

edur

es are co

nsis

tent w

ith an

d promo

te so

und an

fect

ive ri

sk man

agem

ent

, and do n

ot enco

urag

e ris

-ta

king t

hat exce

eds t

he level o

f tole

rate

d ris

k of

the Group.

Fur

the

r det

ail

s conc

ern

ing t

he Gr

oup’

s app

roa

ch to u

sing r

emu

ner

atio

n as a

risk management tool

is set out in

the Directors’ remuneration

repor

ties during the y

ear

continued

127

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Regulatory

Resolvabilty

The C

omm

itte

e held a n

umbe

r of dis

cuss

ons on r

esol

vabilt

y ove

r the co

urs

e of the ye

, i

nclu

dng

sch

edu

ling an ad h

oc me

etin

g, to e

nable d

edic

ated t

ime an

d space t

o disc

uss t

his imp

ort

ant ma

tter.

All B

oard m

embe

rs wer

e invte

d to att

end re

sol

vabilt

y di

scus

sons

, alon

g with t

he ch

airs a

nd boa

sk comm

itte

e chair

s of t

he Gro

’s mate

rial s

ubsi

darie

s in Chin

a, Hon

g Kong, Kor

ea and S

ingap

ore.

The C

omm

itte

e Chair, Gro

up Chai

rman a

nd Audit C

ommi

tte

e Chair al

so par

tic

pate

d in a num

ber of

add

iton

al mee

ting

s rela

ted to r

esol

vabilt

y w

ith th

e inter

nal t

eam, e

xter

nal ad

vise

rs an

d regu

lato

The C

omm

itte

e review

ed, dis

cus

sed an

d chall

enge

d the G

roup’

s Res

olvab

ilt

y As

ses

smen

t Repor

t, ah

ead o

app

roval by the B

oard f

or sub

miss

on to th

e BoE

. In par

ticu

lar, focus a

nd chal

leng

e was pla

ced on t

he key

sump

tion

s made by m

anag

emen

t, how f

eed

back p

rovide

d by exte

rnal c

onsu

ltant

s, t

he Bo

E and GI

A had

en addr

ess

ed, an

d the m

echan

isms p

lann

ed and t

imng f

or the G

rou

’

s h

olis

tc tes

ting

. Resol

vabilt

y w

ill

rem

ain a key pr

iort

y fo

r 2022

Climate Biennal

xploratory Scenario stress test

The Committee

reviewed, disc

sed a

nd challenged the

roup

’

s CBES s

tress test r

esult

s, ahead

sub

mis

son to t

he BoE

. All B

oard me

mbe

rs wer

e invte

d to att

end th

is dis

cuss

on. In p

arti

cular, foc

us and

cha

lleng

e was pla

ced on t

he key le

arnin

gs fr

om thi

s exercis

e, the l

inkage

s to the G

rou

’

s n

et zero a

pproa

and h

ow data c

ollec

ted fo

r this e

xercis

e would b

e use

d from a m

ode

lling p

ers

pect

ive. Th

e Com

mitt

req

ues

ted ma

nage

ment t

o consi

der how t

he ou

tcom

es fro

m the CB

ES st

res

s test co

uld b

e levera

ged

further by the

roup

and incorporated i

nto exist

ng risk management

and stress

testing processes.

Fur

the

r det

ail o

n Clim

ate Ri

sk can b

e fo

und on

es 278 an

d 279

IBOR trans

iton

Rece

ived up

date

s fro

m an indu

str

y an

d Gro

up per

ecti

ve on the I

BOR tr

ansit

on. T

he Co

mmitt

con

tinu

es to se

ek as

suran

ce tha

t this t

ransi

ton pr

ogram

me rem

ains o

n track a

nd is ad

equ

atel

y reso

urce

Thi

s will co

ntin

ue to be d

iscu

sse

d in 2022

BS 239 Pr

inc

ple

In Ma

y 2021, th

e Com

mitte

e rec

eived a

nd dis

cuss

ed an up

date o

n the o

utcom

e of th

e BCBS 2

39 sel

ses

smen

t as of en

d 202

0 a

nd the r

oadm

ap for co

mplia

nce wi

th BCB

S 239

At th

e end of t

he year, the C

ommi

ttee r

ecei

ved an up

date o

n the t

rajec

tor

y of t

he BCB

S 239 Pro

gram

me,

includ

ng the progress made

and challenges

faced.

The C

omm

itte

e will re

ceive a

n upda

te on th

e level of c

ompli

ance (

s at 31 De

cembe

r 2021)

, o

nce th

out

come o

f the s

elf

-a

sse

ssm

ent is a

vailab

le on 28 Fe

bru

y 2022

Group regulator

communicatons

The C

omm

itte

e discu

sse

d key comm

unicat

ons f

rom t

he PR

A and FC

A, w

here r

isk an

d res

olvabi

lt

y were th

main th

emes.

Examples of

deeper discus

sons

into speci

fc topics

•

ue sk

y thi

nkn

g/hori

zon sc

anni

ng:

Dis

cus

sed a h

orizo

n scan of T

chnol

ogy R

isk

, with i

nput f

rom an

ext

erna

l consu

ltan

t, and a

gree

d the d

eep di

ve topi

cs to b

e discu

sse

d by the C

ommit

tee i

n 20

•

ina Ba

nk expo

sur

e man

agem

ent

Recei

ved and d

iscu

sse

d a pape

r coveri

ng the o

utl

ook fo

r the

Chin

ese b

ankin

g sec

tor and t

he Gr

oup

’s ri

sk mana

geme

nt app

roach

. Som

e of th

e chall

enge

s face

d by

e Chine

se ban

king s

ecto

r were dis

cus

sed an

d the G

roup’

s re

latio

nshp a

nd eng

agem

ent wi

th a num

ber

of th

ese b

ank

•

Credit portfolio management (

CPM):

iscu

sse

d an over

ew of CPM act

ivt

ies

, inclu

dng leve

rage

pro

tect

ion tr

ansa

ction

s (LPT

). Cogni

sant o

f the PR

’

s i

ndus

y-wid

e conce

rn wi

th reg

ard to ‘clif

f ri

’ in

LPT

s, t

he Co

mmit

tee no

ted t

he Gro

’s cons

vati

ve prop

ort

ion an

d proc

esse

s in pla

ce to mit

gate t

soci

ated r

isk

s and co

nﬁrme

d it

s supp

ort o

f the G

roup

’s strat

egy in p

lace t

o mana

ge this

•

Hong K

ong operational stabilty issues:

scus

sed a p

aper s

etti

ng out a

n anal

ysis o

f syst

em inc

dent

in Ho

ng Kong an

d targe

ted r

emed

iato

n, alon

gsid

e stab

ilt

y intia

tves u

nder wa

. In co

njun

cton w

ith

rel

evant man

agem

ent

, the ch

air

s of Sta

ndard C

hart

ered B

ank (H

ong Kong) L

imte

d boar

d and bo

ard

sk comm

itte

e were inv

ted to t

his di

scus

son to p

rovid

e histo

rcal b

ackgro

und an

d per

spe

ctive

•

Korea

dive (includng

ortgage portfolio

)

Rec

eived a

nd dis

cuss

ed a pap

er se

ttin

g out an

over

iew of th

e key risk

s as

soci

ated w

ith th

e bus

ines

s acti

vtie

s in Korea

. In conj

uncto

n wit

h relevan

man

agem

ent

, the ch

air of S

tanda

rd Char

ter

ed Ban

k K

ore

a Limt

ed was inv

ted t

o this di

scus

son to

prov

ide con

text o

n the con

trol

s in pla

ce to man

age t

he key ris

•

Corporate, Commercial & I

stitutonal Banking (

CCIB) R

dive:

eceived

and dis

cussed papers

cover

ing th

e CCIB Ris

k revie

, Aviat

on de

ep dive an

d Earl

y Aler

t proc

ess an

d its e

ecti

venes

s. Th

imp

act

s and ch

allen

ges po

sed by COVID-19 were fo

cuse

d on and m

arket i

dos

yncra

tic r

isk was d

iscus

•

nsu

mer, Private & B

usi

nes

s Ban

king (CPB

B) Risk r

eview:

Rec

eived a

nd dis

cuss

ed pap

s coverin

g the

CPBB R

isk rev

iew and m

anagi

ng ris

ks ar

isn

g from p

art

ner

ship-

dri

ven bus

ines

s mod

els

. Focus wa

s plac

on p

artn

ers

hip gove

rnan

ce and th

e ris

ks ar

isng f

rom an

d ass

ociat

ed wi

th par

tne

rsh

ips. T

he Co

mmitt

wil

l remai

n focu

sed on t

his in 202

•

BB Frau

d Risk d

eep di

ve:

Recei

ved and di

scus

sed a p

ape

r upda

ting o

n the CPB

B Fraud Ri

sk land

scap

Dis

cus

son fo

cuse

d on pa

ymen

t frau

d and ho

w this h

ad bee

n exacer

bat

ed by COVID-

. Fu

rth

erm

ore,

how t

rainng f

or coll

eag

ues is b

eing co

ndu

cted an

d how th

e risk

s as

soci

ated w

ith WFH a

re bein

managed were

discussed

ties during the y

ear

continued

128

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Corporate gov

nanc

Examples of

deeper discus

sons

into speci

fc topics

continued

•

Operational resilence – Important

siness Services and Impact

olerance Statements:

In li

ne wit

regulator

y ob

jectves, re

viewed and recommended

list of ident

ﬁed Group I

mportant Business

vice

s to the B

oard f

or appr

oval. The C

omm

itte

e also r

eviewe

d and prov

ide

d feed

back o

n the G

roup’

Imp

act T

ole

rance S

tate

ment

s, w

hich w

ill ret

urn to t

he Co

mmit

tee in Fe

bru

y 2022

, for f

urt

her re

view

and discusson

•

Int

ere

st Rat

e Ris

k dee

p dive:

Dis

cuss

ed a pa

per se

tti

ng out t

he imp

ort

ance of I

nter

est Rate R

isk

, the key

dri

ver

s of thi

s risk a

nd how th

e Gro

up man

ages i

ts st

ruc

tura

l Inter

est Rate R

isk

. The C

ommit

tee co

nﬁrm

s supp

ort o

f the G

roup’

s st

ruc

tural h

edg

ing pro

gramm

•

Approach to crypto asset

management:

Rece

ived an

d disc

usse

d a pap

er set

ting o

ut th

e Grou

’s

app

roach t

owards e

merg

ing opp

ort

unit

es and g

overn

ance in d

igtal a

sse

. Discu

sso

n focu

sed on

e govern

ance of d

igtal a

sse

ts an

d the p

ace of ch

ange i

n regu

lato

y develo

pmen

ts w

ith re

gard to

dig

tal assets

•

Thi

rd-

Part

y Ris

k mana

gem

ent wi

th a fo

cus o

n ICS R

isk

Receive

d and di

scus

sed a p

aper o

n the T

hird

Part

y Ri

sk Man

agem

ent Fram

ework a

nd Thir

d-Part

y I

CS Ris

k. Di

scus

son fo

cus

ed on con

trol

s test

ing

no-right

-to-audit third par

ties and the securit

y onboardin

g process

•

nage

men

t, c

ont

rol an

d governa

nce of S

C PLC:

Recei

ved and d

iscu

sse

d a pape

r on th

e meas

ures t

ena

ble ef

fec

tive ma

nage

ment

, con

trol an

d gover

nance o

f Stan

dard Ch

arte

red PLC, a

head o

f subm

iss

to th

e Boa

rd for en

dor

sem

ent

•

fet

y and S

ecu

rit

y Risk

Recei

ved an up

date o

n safe

ty a

nd sec

urit

y i

ssue

s over th

e last 12 m

onth

Dis

cus

son fo

cuse

d on how da

ta se

curit

y i

s bein

g mana

ged at dr

op-in of

ﬁces a

nd how th

e physi

cal ris

are b

eing m

anage

d wit

h rega

rd to cas

h hold

ings in b

ranc

hes an

d cash vau

lts

•

UAE Risk r

eview:

Rec

eived a

nd dis

cuss

ed a pa

per cove

ring t

he mat

eria

l risk

s to t

he U

AE po

rtf

olio,

cog

nisan

t of COVID-

19 i

mpac

ts an

d chang

es in G

. In part

icul

, Cl

imat

e Risk an

d Credi

t Risk wer

foc

use

d on

•

ruc

tur

al For

eign E

xcha

nge Ri

sk de

ep dive:

Rec

eived a

nd dis

cuss

ed a pa

per se

ttin

g out t

he imp

ort

ance

of St

ctura

l Forei

gn Exc

hang

e Risk

, the key dr

iver p

ert

ainng t

o the r

isk and i

mpen

dng ch

ange

s to the

oup

’s hed

ging st

rate

gy wi

th reg

ard to ca

pital r

equir

emen

•

Enterprise

Risk re

view

: Reviewe

d progr

ess r

epor

ts f

rom t

he Liq

udit

y Ris

k review f

ction a

nd Cre

dit Risk

rev

iew fu

nctio

n, wh

ich set o

ut key th

emes f

rom th

e 2021 revi

ews and t

he rev

iew plan f

or 2022

Commi

tee

effectiv

eness rev

iew

ring 2021, a

n inter

nal Bo

ard and B

oard Co

mmitt

ee ef

fect

ivene

ss revi

ew was facil

tated by t

he Gr

oup Co

mpany Se

creta

ey obs

ervation

s from t

he 2021 internal

effectiv

eness re

vie

The f

eedb

ack on t

he Com

mitte

e’

s f

unct

ionng an

fect

ivenes

s was po

sitve a

nd it spe

cif

cally hi

ghlght

ed:

•

Ove

rall pe

rfor

mance h

as mad

e fur

the

r progre

ss dur

ing

the ye

, an

d the Co

mmitt

ee Cha

ir is well pr

epare

d and

fect

ive in ens

urin

g clear p

rior

tisa

ton and m

eeti

management

•

In ter

ms of co

mpos

iton

, this was c

onsid

ered to b

strong, with go

od regional representation and

dedicated members with banking risk experience

•

Com

mitte

e memb

s would like p

aper

s to prov

ide

gre

ater cla

rit

y arou

nd key iss

ues

•

Committ

ee members pro

vided feedba

ck on k

ey ar

eas

of fo

cus and t

opics f

or fu

ture t

rainng s

essi

ons

202

2 Actio

n Plan

The 202

2 Action Pl

an for th

e Comm

itte

e reﬂect

s sug

gest

ions

fro

m the evalu

atio

n and cont

inues t

o build o

n the f

urt

her

pro

gress m

ade la

st year

•

Con

side

r how bes

t to inclu

de key sugg

este

d areas o

f focu

wit

hn the fo

ward-loo

king ro

lling a

genda

, inclu

dng

cont

inue

d focus o

n reso

lvabilt

•

Keep un

der rev

iew the qu

alit

y and l

ength o

f pape

rs and

ens

ure th

ey provide g

reate

r clari

y on draw

ing out t

y issues

•

Schedule trainng

ses

sions to

include models, second order

sks f

rom clim

ate cha

nge and e

mergin

g tech

nolo

gy ris

ties during the y

ear

continued

129

Standard Chartered

– Ann

ual Rep

ort 202

Directors’ report

Risk informaton pro

vided to t

he Committee

The C

ommit

tee i

s auth

oris

ed to inves

tgate o

r seek a

info

rmat

on rela

ting to a

n activ

t

y withn i

ts te

rms o

f refere

nce,

receives regular

repor

ts on risk management, and tr

acks a

wid

e range o

f risk m

etri

cs thr

ough a Bo

ard Ris

k Infor

mati

rep

ort

. This re

por

t provid

es an over

ew of the G

roup’

s ri

proﬁl

e again

st the G

roup

’

s R

isk App

etit

e Stat

ement

. The

GCRO’

s report covers the macroeconomic en

ironment,

geopolitcal outlook, material d

isclosures and ongoi

ng risks.

Coverage

of Princpal R

isk T

ype

and regulator

y matters are

also included in

this report

. R

egular updates on CO

VID-

imp

acts

, coun

y ri

sk and ge

opol

itcal te

nsion

s have b

een

rep

orte

d on and d

iscus

sed t

hroug

hout t

he year.

The C

ommit

tee h

as the a

utho

rit

y to re

ques

t and rece

ive

relevant

infor

maton

consist

ent

ith the r

equirements

of BCB

S 239 t

hat wil

l allow the C

ommit

tee t

o fulﬁl it

governance

mandate relating to risks to which

Group is

exp

osed

, and ale

rt sen

ior man

agem

ent whe

n risk r

epor

ts d

not m

eet it

s req

uirem

ent

Risk ma

nagement disclos

ures

The C

ommit

tee h

as review

ed the r

isk dis

clos

ures in t

he Annu

Repo

rt and t

he Half Y

ear Rep

ort

, and h

as also r

eviewed t

dis

closu

res reg

arding t

he work o

f the C

ommit

tee.

Inter

action w

ith th

e Group C

hief Risk Ofﬁc

The C

ommit

tee Ch

air mee

ts in

dvid

ually w

ith th

e GCRO

regula

in between forma

l Committee

meetings. These

eting

s allow op

en discu

sson o

f any matt

ers re

latin

g to

sues ar

isng f

rom th

e Commi

ttee’s for

mal dis

cusso

ns and

inform the forward-looking agenda.

Interaction with management

The C

ommit

tee i

s mindf

ul of th

e nee

d to hol

d manag

ement

dire

ctly a

ccount

able wh

en iss

ues ha

ve aris

en and ha

ve bee

rep

orte

d by the G

CRO

. Sen

ior man

agem

ent has a

tten

ded

Com

mitte

e mee

ting

s for dee

per di

scuss

ons in su

ch inst

ances

The C

ommit

tee Ch

air als

o meet

s ind

vidu

ally wit

h seni

leaders of the Risk function.

Interaction with regulator

ypical

, th

e Commi

ttee m

eet

s wit

h the PR

A on an ann

ual

basis, without member

s of management being

pres

ent. The

pur

pos

e of such m

eeti

ngs is t

o enabl

e a discus

son b

ween

the C

ommi

ttee an

d the PR

A conc

ernin

g pru

denti

al-focu

sed

top

ics. T

his me

eting d

id not o

ccur in 2021 due t

o CO

VID

res

trict

ons; howeve

, it is an

ticpa

ted th

at this w

ill res

ume

onc

e thing

s retur

n to no

rmalit

Nag

uib Khe

raj att

ende

d calls wi

th the PR

A and t

he Bo

E over

the c

our

se of th

e year

Interac

tion b

etween

Board comm

ittees on

risk

-re

lated issues

In th

e few inst

ances w

here it d

oes no

t have pr

imar

y over

sigh

for a gi

ven t

ype o

f risk

, th

e Commi

ttee in

terac

ts cl

osel

y with

other Board

omm

ittees where

the remit of these

other

Committees clearly cov

s risk

-related matters. For e

xample,

the Au

dit Com

mitte

e has over

sigh

t of the G

roup

’s inte

rnal

ﬁnanca

l controls and regulator

compliance; the

oard

Financ

al Crim

e Risk Co

mmitt

ee has ove

rsig

ht of the

respo

nsiblites in relation to ﬁnancal crime comp

liance-

rel

ated m

atter

s; and t

he CSC h

as over

sight of c

ultur

e and

sustainablity-related matters. The interacton assists the

Com

mitte

e in ens

urin

g that it i

s well info

rme

d on discu

sson

hel

d, and th

e clos

e collab

orati

on of th

e Commi

ttee Ch

airs

help

s to ens

ure th

at ther

e are no gap

s and any po

tenti

al for

unnecessar

y duplicat

on is

avoided.

Risk function resourcing

The C

ommit

tee h

as sou

ght and re

ceive

d assu

rance t

hat the

Risk function is adequately resourc

d to

per

form its function

effectiv

ely

. The Comm

ittee revi

ewed a

nd di

scussed a pa

per

set

ting o

ut an over

ew of the ch

ange

s to the Ri

sk fu

nctio

n in

21, management

’

s assessm

ent

of the adequac

of people

res

ource

s and the f

ward-lo

okin

g view of t

he Risk f

unct

ion.

Linkages wit

h subsidar

y bo

ard risk co

mmitte

In conjuncton with t

he Chair of the Board Financal Crime

Risk C

ommi

ttee, N

aguib K

heraj c

o-host

ed an ann

ual

vid

eo-co

nfere

nce call w

ith th

e chair

s of sub

sidar

y b

oard

sk commi

ttee

s and INED

s in Jul

y 20

1. Nag

uib Khe

raj als

att

ende

d a board r

isk co

mmitt

ee of St

andard C

hart

ered

Ban

k (Hong Kong) L

imted a

s an obs

ver

. T

he bo

ard ris

comm

itte

e chair

s of our s

ubsid

aries i

n China, H

ong Kong

Korea

and Singapore attended a number of

Standard

Char

tere

d PL

C B

oard Ris

k Comm

ittee d

iscus

sons o

n matt

ers

suc

h as reso

lvabilt

y an

d Hong Kong o

pera

tiona

l stabilt

The chair of Stan

dard Chartered B

ank (

Singap

ore

) Limted

att

ende

d one St

andard C

hart

ered PLC Board Ri

sk Com

mitte

meeting as

an obser

er.

tail

s of th

is cal

l can b

e foun

d on

ge 11

130

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Corporate gov

nanc

In an eve

chan

ging wo

rld

, it is imp

tant t

hat th

e Gro

up, as we

ll as

e Comm

itt

ee, kee

ps pa

ce and t

his ye

ar the B

rand

, V

alu

es and

Conduct Committee continued

s e

volution to ensure ongoing

ali

gnme

nt wit

h the G

rou

’s strat

egi

c prio

rt

ies. T

his evo

lut

ion re

sult

in a ch

ange o

f nam

e to the C

ult

ure an

d Sust

aina

blit

y Co

mmit

tee

the Committee’

s remit now represents the Group

’

s heightened focus

on de

live

rng s

usta

inab

lit

y as a st

rat

egic p

rior

t

The Committee will

monitor the development

and implementaton

of t

he fr

amewo

rk to al

ign ﬁna

ncal s

ces wi

th net z

ero emi

sso

by 2050 a

nd wil

l over

see t

he Gr

oup

’s pr

ogre

ss to d

elive

r on

int

erm

eda

te tar

get

s. Th

e Com

mitt

ee wi

ll keep u

nder r

evie

w the

oup’

s over

all su

stai

nabli

y stra

teg

y bas

ed on t

he thr

ee pil

lar

s of

the sustainablit

y framework

: Business

, Operations and Commu

nites,

and w

ill as

ses

s pro

gres

s aga

inst t

he Gr

oup’

s ex

ter

nall

y commi

tte

target

s, sustainablit

y aspiratons and deliver

y against key

sustainablit

y priortie

Whi

le the C

omm

itte

e has r

etai

ned i

ts ove

rsi

ght of t

he Gr

oup

’s cult

ure,

includng

values, diversty and incluson

and employee engagement

and w

ork

forc

e poli

ces; ove

rsi

ght of b

rand p

osit

onin

g now si

ts w

ithn

e remi

t of the M

ana

geme

nt T

eam

. The Au

dit Co

mmit

tee h

as ta

ken

responsiblity for Conduct

Risk.

The latest cha

of the Group

’s

transform

ation

agenda includes a

cus on b

ecom

ing t

rul

y pur

pos

e-le

d, by deﬁ

nng th

ree S

tand

s of

focus: Accelerating Zero (

the Climat

Stand), Liftng Particpation

(

the Equalit

y Stand) and Resetting Gl

obalisaton (

Glob

alisaton

and). The S

tan

ds are n

ot an ad

d-on o

r sepa

rate f

rom t

he st

rate

t inst

ead ar

e align

ed an

d execu

ted t

hrou

gh th

e stra

teg

y and

sine

ss pr

ior

ties

. Du

ring t

he ye

, t

he Co

mmit

tee r

eviewe

d and

sup

por

ted t

he Ma

nage

men

t T

eam’s prop

osa

ls on ho

w the St

and

would be

embedded across the orga

nisaton and will

continue to

monitor the pr

gress

of leaders in del

ng

on the Stands.

This year

, the

ommittee

organised an

additonal session to focus

on cl

imat

e chan

ge. Th

is ses

sio

n prov

ided C

omm

itte

e mem

ber

s the

opportunit

y to

gain furth

insght into the

global challenges faced

in ac

hiev

ng net ze

ro and

, in par

tic

ular, the c

hall

enge

s face

d by the

oup gi

ven it

s uni

que fo

otp

rin

t acro

ss eme

rgin

g mar

kets

. T

o achi

eve

suc

ces

s will m

ean si

gnﬁcan

t chan

ge fo

r all and t

he Co

mmit

tee w

ill

ve a key role t

o pla

y in sup

por

tin

g deli

ver

y of t

he Gr

oup

’s ta

rget

s as

well as

monitorng progress of c

ult

ural

change across the orga

nisaton

in order

to achieve

his

target.

The Committee ov

sees the

roup

’

s commitment to

upholding

hum

an ri

ght

s and t

his yea

r reﬂe

cted o

n how th

e Gro

up sh

ould

respond to human

right

s issues

in jursdic

tons across our

otpr

int

. The C

omm

itte

e hos

ted a s

ess

ion on e

thic

s and e

thica

ciso

n-mak

ing th

at was d

eli

vered by a p

re-

emin

ent in

dust

exp

t in thi

s ﬁeld

. All Bo

ard dir

ect

ors we

re inv

ted to a

tte

nd thi

thought

provoking session.

e Comm

itt

ee con

tinu

ed to f

ocus o

n the G

rou

’s cult

ure an

d its

div

ers

ty a

nd inc

lus

on int

iat

ves, a

nd I am pl

eas

ed to re

por

t tha

t the

oup ha

s ach

ieved it

s co

mmit

ment t

o the U

K HM T

rea

sur

y Women

in Fin

ance Ch

art

er wit

h over 30 p

er ce

nt wome

n in se

nior le

ade

rsh

rol

es. T

he Gr

oup h

as, t

his ye

, f

the

r expa

nde

d its c

ommi

tme

nt to

increasng representation of

under

represented groups

in senior

leadership roles and

Committe

l continue

to monitor the

del

iver

y a

nd out

com

es of th

ese i

ntia

tves

rin

g the ye

, we a

gre

ed th

at the G

rou

p must e

nsu

re all

generations of c

olleague

are fully engaged, motivated and

supported during pivotal

life stages

in order to fully c

ontribute to the

suc

ces

s of the o

rgan

isat

on

. As su

ch, th

e Com

mitt

ee su

ppo

rte

d the

lau

nch o

f a new int

iat

ve tha

t addr

ess

es ge

nera

tion

al dive

rs

ty i

order to

increas

retention and dev

elopment of older

colleagues

as we

ll as to b

eco

me an em

ployer o

f cho

ice for y

oung

er gen

erat

ion

e Comm

itt

ee als

o reﬂe

cted o

n the i

nclu

sve le

ade

rsh

ip int

iat

which empow

s emplo

yees to challenge

cognitve bias

to enable

suc

h bias

es to b

e rais

ed an

d addr

ess

ed. T

he Co

mmit

tee wa

enc

oura

ged t

o see s

uch ma

nag

emen

t inti

atve

s tha

t will e

nsur

that the Group

’

s culture continues

to evolve

to support deliver

y of

strategic priortie

e foll

owing r

epo

rt pro

vide

s fu

rth

er ins

ght in

to th

e Comm

itt

ee’s

wor

k dur

ing th

e year.

Jasmine Whitbrea

Chair of the Culture and Sustain

ablity Commit

tee

Committee compositon

Scheduled

meetings

J M Whi

tbre

ad (

air

)

C M Ho

dgso

n, CBE

N Okonj

o-Iweala*

1/1

D Co

nner

5/5

ozi Oko

njo-

Iwe

ala st

epp

ed dow

n fr

om th

e Com

mitt

ee o

28Fe

bru

y 2021

her a

ende

es a

t Comm

itt

ee me

ing

s in 2021 i

ncl

uded

e Gro

up Chai

rma

n; Gro

up Chie

f Exe

cut

ive; Gr

oup He

ad,

man Res

ourc

es; Gr

oup H

ead C

orp

orat

e Aff

air

s, Br

and &

Marketing; and Group Co

mpany

Secret

ary.

Biographcal

details of committee members

can b

e fou

nd on

age

s 91 t

o 94

Main respon

siblites of the Committ

The Committee is

responsible for e

xercis

ng oversight

and a

dvi

ce to th

e Boa

rd on th

e Gro

’s cul

ture a

nd key

sustainablit

y priortie

e Comm

itt

ee rep

ort

s to t

he Bo

ard on i

ts key ar

eas o

f focu

follo

wing each

Committee mee

ting.

The Committee has written T

of Reference that

can b

e vie

wed at

.com

/termsofreference

“

The Comm

ittee’

s rem

it now

represent

s the G

roup

’

s heightened

focu

s on

deliver

ng su

stainablit

as a str

ategi

c prior

”

Culture

and

ainablit

mmittee

131

Standard Chartered

– Ann

ual Rep

ort 202

Directors’ report

ties during the y

ear

Remit of t

Committee

As a r

esul

t of out

put f

rom th

e Boar

d and com

mitt

ees’ e

ffe

ctive

nes

s review u

nder

taken a

t the en

d of 2020,

and i

n light of r

efr

eshe

d stra

tegi

c prio

rtie

s, th

e Com

mitte

e reﬂe

cted o

n its p

urp

ose an

d remi

t and pro

pos

a num

ber of c

hang

es to it

s T

erm

s of Refe

rence

, inclu

dng a ch

ange of n

ame, in o

rder t

o align w

ith em

ergin

iort

ies

. The Bo

ard app

roved t

he revi

sed T

ms of Ref

eren

ce on 25 M

ay 2021.

The C

omm

itte

e has re

taine

d over

sight o

f how th

e Grou

p develo

ps and m

anag

es it

s cult

ure (inclu

dng it

valu

es, di

ver

st

y and inc

luso

n, emp

loyee en

gage

ment

, and wo

rkf

orce p

olice

s and pra

ctice

)

The Committee

continues to monit

or the Group

’

s susta

inablity strategy

, includ

ng execution,

and will

rev

iew pro

gres

s again

st the G

rou

’

s e

xter

nal com

mitm

ent

s. Th

is res

pon

siblit

y in

clud

es mon

itor

ng th

devel

opme

nt and i

mplem

enta

ton of t

he f

ramewo

rk to ali

gn ﬁnan

cal ser

ices w

ith ne

t zero em

isso

by 2050 an

d deli

ver int

erme

dat

e targe

, the ﬁr

st be

ing in 202

3, con

sist

ent wi

th tha

t plan

Sust

ainablity –

climat

The C

omm

itte

e held a s

ess

ion on n

et zero an

d discu

sse

d the ch

alle

nges f

aced b

oth gl

oball

y and by th

oup as a r

esult o

f the G

roup’

s un

ique f

ootp

rint i

n many eme

rging m

arket

s. I

t revie

wed and p

rovid

cha

lleng

e to man

agem

ent

’s plan and t

arge

ts s

et out in o

rder f

or the G

rou

p to achi

eve its n

et zero t

arget

by205

Env

ironmental,

social and

gov

ernance (ESG)

matter

The Committee

•

ceive

d an upd

ate on t

he deli

ver

y of t

he Gro

’s comm

unit

y en

gage

ment s

trate

. Thi

s inclu

ded a

date on t

he ‘Fu

ture

maker

s by Sta

ndard C

hart

ered

’ pro

gramm

e, the wo

rk of t

he St

andar

d Char

tere

Fou

ndat

ion (SCF

) and em

ployee vo

lunt

eer

ing pro

ject

•

discussed the

rou

’

s thematic pos

iton

statements on human

rights

tor statements, the frame

work

and h

ow the f

ramewo

rk sh

ould b

e appli

ed in a pr

actic

al sens

e to sup

por

t deci

son-m

akin

g and esc

alat

ion

of is

sue

s to the B

oard

•

dis

cuss

ed how t

he Gr

oup co

uld st

ay abr

east o

f emer

ging be

st pra

ctice i

n govern

ance ar

ound

human right

•

nitor

ed the G

rou

’

s c

ompl

iance w

ith it

s pub

lic com

mitm

ent

s in rela

tion t

o ESG m

atte

, inclu

dng th

sustainab

lity aspirat

ons

and resultant sc

ores from ESG analysts and

indces.

Stand

The C

omm

itte

e comm

ence

d a seri

es of co

nvers

ation

s wit

h senio

r lea

der

s on how th

e Stan

ds wou

ld be

emb

edd

ed acr

oss th

e orga

nisat

on. A n

umbe

r of de

ep dive

s are pla

nned f

or 2022

Culture, diverst

and incluson

The Committee

•

dis

cuss

ed th

e My V

ce empl

oyee sur

vey r

esul

ts an

d the ac

tion p

lans t

o be devel

ope

d by mana

geme

once the

data had been interpr

eted

•

rev

iewed t

he Gro

’s appro

ach to d

iver

st

y and in

clus

on and di

scus

sed t

he int

iatve

s bein

g develo

ped i

order to

create a more inclus

ve workplace

Conduct

In th

e ﬁrs

t half of 2021

, pri

or to it

s chan

ge in re

mit, t

he Co

mmit

tee:

•

ceive

d an upd

ate on C

ondu

ct Risk a

nd a dem

onst

rati

on of th

e Cond

uct Da

shbo

ard

•

Cha

ir held a s

ess

ion wi

th the Au

dit Co

mmit

tee Ch

air to tr

ansi

ton re

spon

sibli

ty f

or th

e overs

ight of

Conduct Risk

Board –

work

force

engagement and

workforce p

olices

and pra

ctices

The C

omm

itte

e has re

spon

sibl

y for over

see

ing th

e Boar

d’s enga

geme

nt fr

amewor

k wit

h the wor

kfo

rce

and e

nsur

ing wor

kfo

rce po

lices a

nd prac

tice

s remai

n consi

sten

t with t

he Gr

oup

’s valu

ed beh

avi

our

s, in

ord

er to sa

tisf

y c

ert

ain prov

ison

s in the U

K Cor

pora

te Gove

rnan

ce Cod

Thi

s year th

e Gro

up rec

ognis

ed th

e nee

d to cont

inue a

dapt

ing wor

kin

g pract

ices to m

eet t

he ne

eds of t

wor

kfor

ce dur

ing th

e ongo

ing COVID-

19 pa

ndemi

c whil

e enhan

cing o

ur Boa

rd-wor

kfor

ce enga

geme

nt.

New hy

brid wo

rki

ng arr

angem

ent

s were in

trod

uce

d acros

s a numb

er of key m

arket

s, w

ith f

urt

her ro

ll-ou

pla

nned

. The C

ommit

tee h

as com

mitte

d to rev

iewn

g the su

cces

s of hybr

id wor

king a

rran

geme

nts a

nd has

req

ues

ted a se

ries o

f dee

p dives o

n the im

pact of hy

bri

d work

ing ar

range

ment

s, p

rodu

ctiv

t

y and wor

-l

ife

bal

ance to b

e sch

edul

ed in du

e cour

se.

echn

olo

gy has c

ontin

ued t

o play a c

entr

al role in e

nsu

ring in

tera

ctve an

d t

wo-way en

gage

ment

twe

en col

leag

ues an

d Boar

d memb

ers a

cros

s the gl

obal f

oot

prin

t at a time w

hen t

ravel r

emain

unprecedentedly restricted.

The Committee

overseen the follo

wing activty:

•

Continued to

support changes

to working prac

es during the ongoing

pandemic, includ

ng investmen

in wel

lbein

g supp

ort

, and t

he ‘Fut

ure Workp

lace, N

ow’ pr

oject t

o capit

alse o

n the st

rate

gic opp

ort

unit

es

cre

ated by t

he pan

demi

c and ad

dres

s empl

oyee que

stio

ns abo

ut f

utur

e ﬂexib

lit

y and wa

ys of wo

rkin

•

e Boar

d host

ed six r

egio

nal en

gagem

ent m

eeti

ngs cove

ring t

he Af

rica c

lust

er; th

e Midd

le East

, Nor

rica a

nd Paki

stan; In

dia and S

out

h Asia; Eu

rope an

d the A

meri

cas; th

e Asi

a clus

ter; a

nd Gr

eate

r China

and N

ort

h Asi

a, facil

tate

d by an onli

ne Q&

A plat

for

m and po

lling t

ools

, to en

able B

oard m

embe

rs to

eng

age w

ith col

leag

ues in an i

nter

actve m

anne

r with a

s much t

wo-w

ay dial

ogue a

s pos

sibl

e. The

emes cove

red du

rin

g the se

ssio

ns var

ied f

rom re

gion to r

egio

n, cover

ing pe

ople

-rela

ted to

pics s

uch as

new wa

ys of wo

rkin

g, di

verst

y a

nd incl

uson

, remu

nerat

ion an

d work-life b

alanc

e, as well a

s stra

tegi

top

ics su

ch as th

e Bank

’s share p

rice, i

nvestm

ent st

rate

, di

gtali

sato

n, ge

opol

itcal e

nviron

ment a

banking competit

on.

132

Standard Chartered

– Annu

al Repo

rt 2021

Directors’ report

Corporate gov

nanc

Commi

tee

effectiv

eness rev

iew

As p

art of t

he 2021 inte

rnal B

oard eval

uatio

n, a revie

w of the C

ommit

tee’s effe

ctive

ness wa

s cond

ucted

. Overa

ll, memb

agre

ed th

at the C

ommit

tee con

tinue

d to pe

rfor

m well and t

hat th

e trans

iton to t

he ref

resh

ed remi

t had be

en ef

fecti

ve.

Progr

ess ag

ainst t

he act

ions se

t out in t

he Com

mitte

e’

s 2021 Acti

on Plan ha

s been p

osit

ve; a summa

y of the p

rogre

ss agai

nst

eac

h of the a

ction

s is set o

ut bel

Pro

gres

s aga

ins

t the 2

021 Actio

n Plan:

•

ring th

e year, the Com

mitte

e par

ticpa

ted in a t

wo-h

our se

ssion o

n net zero p

rovide

d by Bost

on Con

sulti

ng and B

aring

Part

ner

s. Thi

s provid

ed comm

itte

e memb

ers w

ith the o

ppor

tun

y to gain f

urt

her in

sght int

o the glo

bal chal

lenge

s face

d in

achi

evng ne

t zero and, i

n part

icular, the ch

alleng

es face

d by the G

roup gi

ven it

s uniqu

e foot

print a

cros

s emergi

ng mar

kets

•

The C

ommit

tee h

oste

d a sess

ion on et

hics an

d ethic

al deci

son-mak

ing th

at was deli

vered by a p

re-em

inent in

dust

y expe

in thi

s ﬁeld. A

ll Boar

d direct

ors we

re invte

d to this s

essi

on. In a

dditon

, a numb

er of sp

eaker

s are als

o being li

ned up f

or 2022

and be

yond

•

As a r

esult o

f the Co

mmitt

ee’s revise

d remit

, resp

onsi

blit

y for C

ondu

ct and the c

ondu

ct dashb

oard we

re tran

sfer

red to t

Audit C

ommit

tee. T

he Com

mitte

e Chair

s held a h

andover s

ess

ion wit

h manag

emen

t prese

nt and th

e Audit Co

mmitt

ee Chai

had a fulsome Conduct Risk

inducton

ey obs

ervation

s from t

he 2021 internal

effectiv

eness re

vie

•

The C

ommit

tee h

ad incre

ase

d its f

ocus on c

ultur

e and

sustainablit

y and held insght

ful discus

sons on culture

and v

alues, community engagement s

trategy

, the Sta

nds

sustainablity and ESG. Committee member

s had also

appr

eciat

ed the d

eep di

ve sess

ions on t

he roa

dmap to

net ze

ro and hum

an righ

•

The C

hair was ra

ted as ve

y eff

ecti

ve and mem

ber

s note

the Chair

’

s dilgence and tho

ughtfuln

ess with regard

s to

the agenda, preparation

for the meetings and valua

ble

input into draf

t Committee p

apers

•

Members rated the Committee compositon as good with

members being committed and engaged and offering

different persp

ectives

•

The C

ommit

tee wa

s well supp

ort

ed by the S

usta

inablit

and H

uman Res

ources (H

) T

eam

s, and C

ommit

tee

pap

ers we

re usua

lly tho

rough a

nd of a high q

ualit

202

2 Actio

n Plan

The 202

2 Action Pl

an for th

e Comm

itte

e reﬂect

s sug

gest

ions

fro

m the evalu

atio

n drawn t

oget

her wi

th the C

ommit

tee’s

for

war

d-look

ing age

nda fo

r next year

•

Continue to monitor

improvements on risk culture

and also

developments on audi

tng culture more general

•

range fo

r exter

nal sp

eaker

s to provi

de the A

sia/

ina

perspectiv

e on topi

withn

the Committee

’s

remit

•

Focu

s on the d

eliver

y o

f the B

ank

’s net zero pl

ans

orkforce engagement

framew

ork: how

we engaged during 20

Regional calls

hosted

by Board

members

Continuaton of

wellbeing

suppor

intiatves

Continued

dialogue on

way

s of wor

kin

and F

utu

orkplace, Now

employee

engagement

sur

vey

Speak Up

data

Boar

d – w

kforce en

gagemen

t and workforce po

lices and pr

actice

133

Standard Chartered

– Annu

al Repo

rt 2021

Directors’ report

erna

nce

minato

n C

mitt

rin

g the ye

, t

he Co

mmit

tee h

as be

en fo

cuse

d on th

e med

ium

to long-

term compositon

of the Board, cognisant

that a number of

the Boa

’

s in

dependen

t non

-executiv

e direc

tor

(INEDs

) will

achin

g the

ir nine

-year t

enur

e over th

e cour

se o

f the ne

xt few ye

ars

At th

e beg

innn

g of the y

ear, we carr

ied o

a comprehensive formal

ses

sme

nt of se

arch ﬁ

rms t

hat co

uld as

sis

t the C

ommi

tte

e in

undertaking this

next phase of

the Board’

s succ

sion

planning.

Thi

s pro

cess r

esu

lted i

n the ap

poin

tme

nt of Rus

sel

l Reyno

lds to

sist u

s in ide

ntf

ing ca

ndid

ates w

ith a d

iver

se ran

ge of s

kill

exper

ience, backgrounds, gend

er and capabilties to enhance the

ard

’

s e

ffe

cti

ve over

sigh

t of the s

trat

egy.

Mar

ia Ram

os jon

ed th

e Boa

rd at th

e star

t of Ja

nuar

y 202

1, and

has extensi

CEO, banking, comm

ercial, ﬁnancal, policy and

intern

atonal experience. Mar

ia’

s inducton onto the Bo

ard and

e Boar

d Risk a

nd Audi

t comm

itte

, alth

ough c

ondu

cte

d almos

ent

irel

y vir

ally, remai

ned r

obus

t and ef

ctiv

e and Ma

ria is

adding signﬁcant value to the Board and committee discus

sons.

Fur

the

r insg

ht int

o Mar

ia’s indu

cton p

rogr

amme c

an be fo

und o

pages 106

and 107

In li

ght of N

agui

b Kher

’

s d

eci

son to s

tep d

own fr

om th

e Audit an

Remuneration

committees in the summer

, we

under

took a

refresh of

the committees’ membership and

recommended the appointment of

Mar

ia to t

he Rem

uner

atio

n Com

mitt

ee. In a

ddit

on to t

he sign

ﬁcant

cus on B

oard a

nd com

mitt

ee su

cces

sion p

lann

ing we al

so sp

ent a

gre

at de

al of ti

me dis

cus

sng su

cces

sio

n read

ines

s and p

lans f

or th

exec

uti

ve dire

ctor

s, t

he Ma

nage

ment T

am and o

the

r key seni

exec

uti

ves, a

s well a

s prog

ramm

es und

er way t

o devel

op tal

ent

int

ern

ally. Des

pite t

he num

ber o

f role

s whic

h have r

ecen

tly b

een ﬁl

led

ext

ern

ally, we loo

ked at an

d ass

ured o

selv

es tha

t all key ro

les ha

credible succ

ssion

plans with suitable ﬂexib

lit

y for

the immedate to

longer term.

tail of t

he Co

mmit

tee

’

s an

nua

l revie

w of the B

oar

d Dive

rst

y Pol

icy

and i

ts a

sse

ssm

ent of p

rogr

ess a

gain

st it can b

e fou

nd on p

age

s 135

and 1

36. Fo

llow

ing th

e rea

lignm

ent of t

he Pol

icy l

ast ye

, n

o fu

rth

cha

nge

s were re

comm

end

ed in 2021; h

owever, we did di

scu

ss th

imp

ort

ance o

f fu

rth

er bal

anci

ng fem

ale re

pre

sent

atio

n on th

e Boa

and the

Financa

l Conduct Authority’

s (FCA)

consultation on

changes

to t

he Lis

tng Ru

les in t

his ar

ea and a

gre

ed to kee

p our cu

rre

nt tar

get

under revie

As p

art o

f the C

omm

itte

e’

s gove

rnan

ce over

sig

ht rol

e, we con

tinu

to re

cei

ve upd

ates f

rom t

he th

ree re

gion

al CEOs w

ho e

ach ha

responsibl

y for

the subsidary gov

nanc

e processes across

their

gion

s, an

d provi

de a hol

ist

c view o

f the go

vern

ance f

rame

work a

cha

llen

ges fa

ced a

cros

s the G

rou

’s foot

pri

nt. T

he Co

mmit

tee al

spent time

reviewng

the governance

str

tures ar

ound the

growing

SC V

entures entites.

ce aga

in the C

omm

itte

e over

saw p

rogr

ess m

ade in m

eet

ing th

actions recommended i

n last y

ear

’

s internally conducted

ard

fec

tive

nes

s revie

w and ag

ree

d the ap

proa

ch for a

not

her in

ter

nall

n evalu

atio

n this y

ear. Deta

ils of b

oth a

re set o

ut on p

age 1

08.

e a

lso sp

ent t

ime di

scus

sng t

he pro

gre

ss th

e Com

mitt

ee ha

de aga

inst t

hos

e acti

ons hi

ghlg

hted i

n its o

wn ef

fec

tive

nes

rev

iew. A summ

y of th

ose r

eﬂect

ion

s and of t

his ye

ar’s Co

mmit

tee

fec

tive

nes

s revie

w and ac

tion

s for 202

2 can b

e foun

d on pa

ge 137

Dr José

Viñals

Chair of the Governance and Nomin

aton Committee

Committee compositon

Scheduled

meetings

Ad ho

J Viñals (

Chair

)

2/2

N Kh

eraj

2/2

C M Ho

dgso

2/2

J Whitbread

2/2

P G Rive

2/2

her a

ende

es a

t Comm

itt

ee me

ing

s in 2021 i

ncl

uded

e Gro

up Chie

f Exe

cut

ive; Gr

oup He

ad, H

R; and G

rou

Compan

y Secretary

Biographcal

details of the committee members

can b

e vie

wed on

es 91 t

o 94

Main respon

siblites of the Committ

e Comm

itt

ee ha

s resp

ons

iblit

y f

or keep

ing th

e size

ruct

ure a

nd com

posi

ton o

f the B

oard a

nd it

s comm

itt

ees

der rev

iew. As pa

rt of t

he Co

mmit

tee’s su

cces

sion p

lann

ing

for t

he Bo

ard, i

t takes i

nto ac

coun

t the G

roup’

s s

trat

egy a

cha

llen

ges

, and ma

kes re

comm

enda

tion

s to th

e Boa

rd in

res

pec

t of any ad

just

ment

s to t

he Bo

ard

’

s c

omp

osit

on.

e Comm

itt

ee als

o: keeps u

nde

r revi

ew the l

eade

hip ne

eds

of, and su

cces

sion p

lan

s for, the G

roup i

n rela

tion t

o bot

exec

uti

ve dire

ctor

s and o

the

r seni

or exec

uti

ves; ha

s over

sigh

of t

he pro

ces

s by whic

h the B

oard

, its c

ommi

tte

es and

indvidual

directors assess their

fectiv

enes

; keeps the

div

ers

ty o

f the B

oar

d unde

r revi

ew and mo

nito

rs p

rogr

ess

towa

rds ac

hiev

ng it

s obje

ctve

s in th

is are

a; cons

ider

s any

tent

ial si

tua

tona

l conﬂi

cts o

f inte

rest d

ecl

ared by B

oar

members; considers the impact

of material changes to

corporate gov

nance

regulation and legislaton

fecting

e Gro

up; and h

as over

sigh

t of th

e Gro

’s appr

oac

h to

subsidary corporate gov

nance.

e Comm

itt

ee rep

ort

s to t

he Bo

ard on i

ts key ar

eas o

f focu

follo

wing each

Committee mee

ting.

e Com

mitt

ee h

as wr

itt

en T

ms o

f Refer

enc

e tha

t can be

ewed a

sc.com

/termsofreference

“

Duri

ng the y

ear

, the Comm

ittee

has been f

ocused on the m

edium

to long-term compositon of

the Boa

”

134

Standard Chartered

– Ann

ual Rep

ort 202

Directors’ report

Corporate gov

nanc

ties during the y

ear

Boar

d and senior

talen

t succes

sion

planning

•

Und

ert

ook a co

mpreh

ensi

ve and t

horo

ugh for

mal a

sse

ssme

nt of se

arch ﬁr

ms to a

ssi

st the C

ommi

ttee i

undertaking the

next phase of i

s Board

succession planni

ng. Following

a long and sho

-lis

tng pr

ocess

Rus

sell Rey

nold

s was cho

sen as t

he su

cces

sfu

l ﬁrm. Ru

sse

ll Reyno

lds is a s

ignat

y to th

e volun

tar

y co

of co

nduct f

or exec

utive s

earc

h ﬁrms

. Russ

ell Reyn

olds a

lso su

pplie

s seni

or res

ourci

ng to th

e Gro

•

Eng

aged Ru

sse

ll Reyno

lds to r

eview t

he mar

ket for f

utu

re INED c

andid

ates w

ith de

ep glo

bal ba

nkin

and ﬁna

ncal services experience, s

rong

understanding of the

remuneration en

onment

signﬁca

com

merci

al exp

erie

nce and w

ith re

pres

enta

tion f

rom ou

r key marke

•

Dis

cus

sed th

e comp

osit

on of t

he Boa

rd and co

nsid

ered t

he ord

erl

y succe

ssio

n of cur

rent I

NEDs an

d the

ills, k

now

ledg

e, exp

erie

nce, di

vers

ty (in th

e wide

st se

nse

) an

d attr

ibut

es re

quire

d of fu

tur

e INEDs

, bot

imm

edat

ely an

d in the m

ediu

m to lon

ger

term

. In con

side

rng th

e Boa

rd’s succ

essi

on, t

he Com

mitt

take

s into ac

count t

he len

gth of t

enur

e of the I

NEDs

, and th

e impo

rta

nce of re

gul

arly r

efre

shin

g the

Board membership

•

Syste

mati

cally r

eviewe

d a numb

er of IN

ED long a

nd sho

rt lis

ts t

hrou

ghou

t the yea

r to ide

ntf

y po

tent

ial

can

didat

es wit

h a diver

se ra

nge of s

kills

, exp

erie

nce, k

nowl

edge a

nd per

ecti

ves

•

Mai

ntan

ed over

sight o

f the pr

ogre

ss ma

de by Phil Ri

vett an

d Mari

a Ramos a

gains

t thei

r tailo

red Bo

ard

and committee indu

cton programmes

•

Prov

ided ove

rsi

ght of th

e deta

iled e

xecut

ive and s

enior m

anag

emen

t (level b

elow Ma

nage

ment T

)

suc

cess

ion pl

ans, a

long

side o

ther c

ritc

al role

s, in

cludn

g the over

sig

ht of a pro

ces

s of exte

rnal m

arket

map

ping of key m

anag

emen

t role

•

Revie

wed suc

cess

ion pl

ans fo

r the com

mitt

ee cha

ir role

s, id

entf

ing ap

propr

iate i

ndv

idual

s wit

h the

cess

y ski

lls and a

ttr

ibut

es to prov

ide e

merge

ncy c

over as re

quire

d, as we

ll as on a l

onge

-te

basis, includ

ng acknowledging a

nd addressing where

gaps exist. Out of th

is process

the Committee

rec

omme

nded t

o the B

oard t

he app

ointm

ent of M

ari

a Ramos as a m

emb

er of th

e Remun

erati

Committ

Boar

d compos

iton as a

t 31 December 2

Gender div

ersty

Board

Femal



Male



xec

ive

Femal



Male



INED (includ

ng Chair

)

Femal



Male





(2020: 31%)



(2020: 36%)



(2020: 0%)

INED tenure

(includng Chair

)

1–3 ye

27%

–

1 ye

3–

6 ye

ars

–9 year

International

experience

Banking, risk

ﬁn

ance and

accounting e

xperience

amongst INEDs

Representation

om key m

arke

Experie

nce

Nation

alty:

The nationa

lt

of our

directors does not

in itself demonstrate

e dive

rs

ty o

f the B

oar

d’s com

pos

ito

een t

hem

, the d

irec

tor

s ha

signﬁc

ant experience of

either livng,

working or

anagi

ng operations

across

e mar

ket

s in whi

ch we op

era

te.

Ethnict

Our

aspiraton is for

our Board

to r

eﬂec

t the d

iver

st

y of o

ur fo

otp

rin

Our global ethnic

t

y categories represent

e bre

adt

h of div

ers

t

y acro

ss o

ur mar

ket

y-th

reep

er cen

t of th

e Bo

ard ar

from an

ethnic minorty back

ground.







Further details

on the work

of t

Governance and

Nominaton Committee

can b

e fou

nd be

low

1. W

hite

10 d

ire

ctor

2. C

hine

2 d

irec

tor

3. Black

0 director

4. S

out

h Asi

1 dir

ect

135

Standard Chartered

–

nual Re

por

t 2021

Directors’ report

Board an

commi

ttees

’

effectiveness

evi

•

Prov

ided ove

rsi

ght of th

e Boa

rd and co

mmitt

ees’ i

nter

nal evalu

atio

n, fac

iltat

ed by the G

rou

p Comp

any

cret

, and m

onit

ored p

rogre

ss ag

ains

t the 2021 Act

ion Plan

, whic

h addre

sse

d the key ob

ser

vat

ion

om the 2020 ef

fec

tiven

ess r

eview. T

o part

icul

ar out

put

s incl

ude

d the re

comm

endat

ion t

hat th

erm

s of Refe

rence o

f the B

rand, V

lues a

nd Con

duct C

ommi

ttee w

ere ref

ocus

ed, gi

vng m

ore wei

ght

to env

ironm

enta

l, soc

ial and g

overna

nce (E

SG) matte

rs an

d rena

ming it t

he Cul

ture a

nd Sus

taina

blit

mmitt

ee, an

d the re

comm

enda

tion

, subje

ct to a nu

mber o

f mile

ston

es bei

ng met

, tha

t the B

oard

Finan

cal Cri

me Ris

k Comm

itte

e is fol

ded in

to a comb

inat

on of th

e Audit C

ommit

tee

, Boar

d Risk

mmitt

ee and t

he Bo

ard in 2021 or e

arl

y 2022

•

Dis

cus

sed th

e obs

vati

ons an

d recom

mend

atio

ns whi

ch ﬂowed f

rom t

he 2021 int

erna

lly fa

ciltat

ard and co

mmit

tee

s’ review a

nd dis

cuss

ed th

e shap

e of the B

oard

’s 20

2 Act

ion Plan

tail

s of th

is yea

r’s Bo

ard an

d com

mit

tee

s’ eval

uati

on, i

ncl

udn

g the p

roce

ss w

hich w

e foll

owed

ser

tion

s fr

om th

e revi

ew and t

he re

sul

ting 2

022 Act

ion P

lan ca

n be fo

und o

page

108

Board Diverst

Policy

•

Revie

wed pro

gres

s made i

n 2021 again

st th

e agre

ed obj

ectve

s set o

ut in th

e Boar

d Diver

st

y Poli

•

nduct

ed a rev

iew of th

e Boa

rd Dive

rst

y Pol

icy to e

nsu

re that i

t cont

inue

d to dri

ve diver

st

y in it

bro

ades

t sen

se, whi

le cont

inun

g to take ac

count o

f bes

t pract

ice, sp

ecif

cal

ly in th

e area o

f gend

cial and e

thni

c backgr

ound

s, kn

owle

dge, p

ers

onal a

ttr

ibut

es, sk

ills a

nd exp

erie

nce

•

Dis

cus

sed th

e Boa

rd’s comm

itme

nt to en

sure a m

inmum o

f 33 pe

r cent fe

male re

pres

enta

tion o

n the

ard. C

ognis

ant of t

he FC

A cons

ultin

g on rai

sng amb

iton

s in this a

rea, w

hich in

clud

es a pro

pose

tar

get of at l

eas

t 40 pe

r cent fe

male re

pres

enta

tion o

n boar

ds, t

he Co

mmitt

ee to

ok the d

ecis

on to wait

for t

he ou

tcome o

f this c

onsu

ltat

ion and i

ts pr

opos

al in re

spec

t to gen

der tar

get

s and et

hnict

y b

efor

recommending

any further changes

to the Poli

y or

targets

Fur

the

r det

ail

s of pro

gre

ss th

e Bo

ard ha

s mad

e aga

inst t

he key o

bje

ctve

s set o

ut in t

ard D

iver

st

y Pol

icy

e set o

ut be

low

Corporate

gov

ernance

•

Reco

mmen

ded t

he exte

nsio

n, for a f

ther 1

2 mont

hs, o

f Sir Iai

n Lobba

n’

s ap

point

men

t as ind

epen

dent

viso

r to the B

oard a

nd it

s comm

itte

es on c

ybe

r secu

rit

y and c

er thr

eat

Conﬂicts of

interest

•

Conducted an

annual revie

w of the dir

ectors’ exist

ng and pre

iously

author

ised

otentia

l and actual

situatonal

conﬂicts of

interest

and considered whether

any cir

cumstances would

cessita

te the

authorisaton bei

ng revok

ed or amended. Also

noted directors’ other

directorshps and

business

int

erest

s ta

ken dur

ing th

e year in t

he cont

ext of t

ime com

mitm

ent

, overbo

ardin

g and th

e PRA l

imt

on dir

ecto

rsh

ps as wel

l as oth

er re

gulat

y re

quire

ment

s in th

is area

Assess

ment o

f the

n-ex

utiv

directors’

independence

•

Considered the independence

of each of the non

-executive direc

tors, taking into ac

count any

circumsta

nces likely

to impar

, or

ch could impa

their independence.

Noted the thorough

process

undertaken

to assess indvidual

director performance a

nd effectiveness, taking

these reviews

into

acco

unt al

ong wi

th ten

ure and s

ucce

ssio

n plan

s in mak

ing it

s reco

mmen

dati

on to ap

point t

he INE

for a f

ther ye

Subsidar

gov

ernance

•

Rece

ived up

dat

es fro

m the t

hree re

gion

al CEOs o

n the G

roup’

s app

roac

h to sub

sidar

y g

overn

ance.

Rece

ived a

ssur

ance of e

ffe

ctive ove

rsi

ght and c

ompli

ance w

ith th

e Gro

’s Subs

idar

y G

overn

ance Poli

and d

iscus

d mater

ial re

gula

tor

y t

rend

s, int

iatve

s, an

d consi

dera

tons l

ikely to i

mpac

t the cur

ren

t or

utur

e govern

ance o

f the G

roup

’s banki

ng sub

sidar

ies; t

he key acti

ons ar

isng f

rom b

anki

ng sub

sidar

ard ef

fect

iven

ess rev

iews; a

nd linka

ges be

een ba

nkin

g subs

idar

ies and t

he Gr

oup

•

Dis

cus

sed gove

rna

nce proj

ect

s wit

hn SC V

ture

s and, in p

art

icula

, th

e appro

ach to g

overn

ance of t

enture entites

•

App

roved t

he app

ointm

ent of a n

ew Chai

r to Stan

dard Ch

art

ered B

ank (Sing

apor

) Limte

d, a re

giona

hub board

erms of Reference

•

nduct

ed a rev

iew of th

e Com

mitt

ee’s T

rms of Re

fere

nce dur

ing t

he year, taki

ng int

o accou

nt the

res

pon

siblit

es

, oblig

aton

s and be

st pra

ctice p

rincp

les it h

as in th

e UK and H

ong Kon

Implem

entat

ion of the B

oard Diverst

y Policy

The C

ommit

tee co

nduct

ed it

s annua

l review of t

he Bo

ard

Dive

rst

y Poli

cy (

he Polic

) dur

ing 2021, to e

nsure t

hat it

cont

inue

s to prom

ote and d

rive di

verst

y in i

ts bro

ades

t sens

whil

e conti

nung to t

ake accoun

t of bes

t practi

ce intia

tves

incl

udng t

he Parker Rep

ort int

o ethn

ic diver

st

, th

e Hampt

Ale

xander Revi

ew on women i

n lead

ersh

ip posi

tons an

d the

UK Co

rpo

rate G

overnan

ce Cod

e 2018. W

e s

tri

ve to maint

an

a dive

rse B

oard, r

ecogn

isng th

e beneﬁ

ts of h

avin

g a Boar

mad

e up of ind

vidu

als wit

h a diver

se mi

x of gend

, s

ocial

and e

thnic b

ackgroun

ds, k

nowle

dge, p

ers

onal at

trib

utes

, skil

and ex

per

ience. W

e als

o aim to reﬂe

ct the G

roup

’

s a

spira

tons

in rel

ation t

o its e

mployee

s and it

s value

s and to po

siton t

Gro

up as a gl

obal le

ader in t

hese a

reas

. This di

vers

ty p

rovide

a rang

e of per

spe

ctive

s which we b

elieve con

trib

ute to t

effectiv

e Board dyna

mics.

Whil

e posit

ve prog

ress h

as be

en made i

n improvn

g the

balance of fem

ale directors on th

e Board in recent years

fem

ale rep

resen

tatio

n on the B

oard re

mains j

ust bel

ow the

cur

rent in

dustr

y t

arget o

f 33 per c

ent. We are cogni

sant of

the g

rowing p

ress

ure on bo

ards to s

et lon

ger

-t

erm an

d more

ambi

tous ge

nder a

spirat

ons

, inclu

dng movi

ng toward

40per cent

female representation or gender parity and

as a C

ommit

tee we sp

ent tim

e discu

ssng t

he FCA

’s

consultation on

changes to the

Listng Rules in

his

area.

While acknowledging

the import

anc

e of gender

diver

s

arou

nd the b

oard t

able and u

ltima

tely g

ender p

arit

y on t

Board, we also re

cognise the impor

tance of balancing gen

der

dive

rst

y wit

hn the b

roade

r conte

xt of diver

st

, wh

ich is

part

icularly relevant given the G

roup

’

s diver

se geographical

repr

esen

tatio

n. Whil

e we remain c

ommit

ted to d

o more to

incr

ease t

he gen

der dive

rst

y on t

he Bo

ard, th

e Commi

ttee

too

k the de

cison n

ot to rai

se it

s targe

t in this ar

ea above th

cur

rent 33 p

er cent

, pen

ding th

e outc

ome of on

goin

g exter

nal

consultations and to

ensure progress is sustainable

ties during the y

ear

continued

136

Standard Chartered

– Ann

ual Re

por

t 2021

Directors’ report

Corporate gov

nanc

Alig

ned to t

he Polic

y’s broad a

mbito

n, this ye

ar we rep

ort on

the p

rogre

ss mad

e again

st the s

even obje

ctves

, inclu

dng th

wo addit

onal co

mmitm

ent

s made a

t the en

d of 202

0, w

hich

the B

oard re

mains c

ommit

ted to in o

rder to f

ther e

nhance

pro

gress i

n this are

•

incr

easn

g the rep

resen

tatio

n of wome

n on the B

oard

wit

h an aim to ha

ve a minmu

m of 33 pe

r cent fe

male

representat

ion

•

adopting an ethn

icty aspiraton

of a minmum of

30 p

er cent f

rom an et

hnic min

ort

y ba

ckground

•

ens

urin

g that ou

r Boar

d reﬂect

s th

e diver

se mar

kets in

which we operate

•

ens

urin

g that th

e Boar

d is comp

rise

d of a goo

d bala

nce

of ski

lls, experien

ce,

knowledge,

per

spec

tive and

varied

backgrounds

•

ensuring that we

consider the Group

’

s aspiratons in r

elation

to disabli

, sexual orientaton, gender identty and

gender expression

•

eng

aging o

nly se

arch ﬁrm

s that a

re signe

d up to th

olu

ntar

y C

ode of C

ondu

ct for execu

tive se

arch ﬁr

•

rep

ort

ing annu

ally on t

he diver

st

y of th

e execut

ive pip

elne

as wel

l as the di

vers

ty o

f the Bo

ard, in

cludn

g progre

bei

ng made o

n reac

hing th

e Board

’s gender a

nd ethn

ict

aspiratons

tail

s of th

e Bo

ard

’

s d

iver

se c

omp

osit

on ar

e set o

ut on

ges 9

1 to 94

of t

his re

por

t, a

nd th

at of t

he Ma

nag

emen

m can b

e fou

nd on

age

s 95 to 97

tail

s of th

e Gro

up’

s w

ide

r Dive

rs

ty a

nd In

clu

sion s

tra

teg

clud

ng ge

nde

r bal

ance a

cro

ss th

e Gro

up an

d targ

s for e

thni

pres

ent

ati

on can b

e fou

nd on

age

s 55 to 59

of this report

A cop

y of th

e ful

l Boa

rd Di

ver

st

y Poli

cy ca

n be vi

ewed a

sc.com/boarddiverstypolicy

and further deta

ils on the

oup’s appro

ach t

o Div

ers

t

y and In

clu

sion c

an be v

iewe

sc.com

diversty-and-incluson

Progr

ess ag

ainst t

he key obje

ctves s

et out in t

he Bo

ard Diver

st

y Polic

y is se

t out be

low

ard D

iver

st

y Pol

icy ob

jec

tve

Progress

Increasing the represent

ation

women o

n the B

oard w

ith an a

to ha

ve a minmu

m of 33 pe

r cent

female representation

Inc

reas

ing ge

nder re

pres

enta

tion o

n the B

oard re

main

s an impo

rta

nt focu

s of th

Board’s

ssion pla

nning process, ensuring that female

candidates are fai

rly

rep

rese

nted o

n long a

nd sho

rt lis

. The B

oard ch

ange

s in 2021 (

app

ointm

ent of

Mar

ia Ramo

s and th

e reti

remen

t of Ngoz

i Okonjo

-Iwea

) en

sure

d that t

rcent

age of f

emale r

epre

sent

atio

n on the B

oard r

emain

ed un

chang

ed at

31 pe

r cent

. The B

oard co

ntin

ues to s

tri

ve to ens

ure gre

ate

r femal

e repr

esen

tati

and i

s cogni

sant o

f the int

iat

ves to f

urt

her ra

ise as

pirat

ons in t

his are

Adopt

ing an e

thn

ict

y aspi

rat

on of a

min

mum of 3

0 per ce

nt from a

n eth

nic

minorty background

Foll

owing c

hang

es to th

e comp

osit

on of th

e Boa

rd in ear

ly 2021, r

epre

sent

atio

n from

eth

nic min

ort

y b

ackgrou

nds dr

oppe

d fro

m 30 per c

ent to 2

3 per c

ent as a r

esul

t of

Ngoz

i Okonjo

-Iwea

la’s depar

tur

e fro

m the Bo

ard in Fe

bru

y 2021. We remain

com

mitte

d to ou

r ethn

ict

y aspi

rato

n and to en

sur

ing a bro

ad rep

rese

ntat

ion of

our d

irect

ors f

rom a

cros

s our ma

rket

surin

g tha

t our Bo

ard re

ﬂec

ts t

diver

se marke

ts in wh

ich we ope

rate

Wha

t set

s Sta

ndard C

hart

ered a

par

t is our di

ver

st

y of pe

ople, c

ultu

res an

net

s. The B

oard h

as rep

rese

ntat

ion f

rom acr

oss t

he regi

ons in w

hich we

erate

, inclu

dng th

e UK

, Nor

th Ame

rica

, Asia a

nd Af

rica

. Many of t

he INED

s have

add

iton

al exp

erie

nce of h

avin

g worke

d and li

ved in many o

f the G

roup’

s ma

rket

As p

art o

f the C

ommit

tee’s succ

ess

ion pla

nning i

n 20

, it has co

nsid

ered a

signﬁ

cant number of potential future INED

candidates who are representative

of so

me of o

ur key regi

ons an

d marke

, with a p

art

icula

r focu

s on ASE

surin

g tha

t the B

oard i

s comp

rise

of a go

od bal

ance of s

kills

, exper

ience

kno

wledge, perspectiv

e and v

aried

backgrounds

Throughout the

year the Commi

ttee has focused

on identfying the collectiv

exp

eri

ence, s

kills a

nd att

rib

utes r

equir

ed bo

th imm

edat

ely an

d in the m

ediu

m to

longer term. The

Committee has systematical

ly reviewed

candidate longl

ist

s a

sho

rtl

ist

s to ide

ntf

y p

oten

tiall

y suita

ble IN

ED candi

dates

. Are

as of p

arti

cular f

ocus

in 2

021 included

•

corporate inst

tutional

and co

mmercial

banking

•

technology risks

•

remuneration

•

previous CEO

CFO exp

erience

•

ASE

AN experie

nce

•

regulator

y understanding

Ensuring that we

con

sider

he Group

’s

aspirat

ons in relation to disablit

sexual

orientat

on, gender

ident

ty

and gender e

xpre

ssion

e re

main co

mmit

ted to a

ll asp

ect

s of dive

rst

y a

s we unde

rtake any B

oard

succes

sion process

Engaging onl

y search ﬁrms that a

sig

ned up t

o the V

olu

ntar

y Co

de of

Con

duct f

or execu

tive sear

ch ﬁrm

e co

ntin

ue to en

gage o

nly se

arch ﬁr

ms sig

ned u

p to the V

lunt

y Co

de of

nduct

. Du

ring 2021 t

he Co

mmit

tee con

duct

ed a rev

iew of it

s key req

uirem

ent

om it

s sear

ch ﬁrm an

d aft

er a ten

der pro

ces

s appo

inte

d Russe

ll Reyno

lds to a

ssi

in id

entf

ing an

d build

ng a pip

elne of h

igh-q

ualit

y p

oten

tial IN

ED candi

date

s for

e next st

age of i

ts Bo

ard su

cces

sion pr

oces

s. Rus

sell Rey

nol

ds is si

gned u

p to the

untar

y C

ode a

nd is com

mitt

ed to su

ppo

rtin

g our am

bito

ns to wi

den all a

spe

cts

of di

vers

t

y on the B

oard

Reporting annuall

y on the div

erst

of the

execu

tive pipe

lne a

s w

ell a

s the d

iverst

of t

he Boa

rd, in

clud

ng pr

ogre

ss be

ing

made on reaching the Board’

s gender

and ethnict

y aspiratons.

The C

omm

itte

e takes an a

ctive r

ole in rev

iewn

g the su

cces

sion p

lanni

ng for t

exec

utive

, Mana

geme

nt T

eam and s

enio

r mana

geme

nt one l

evel bel

ow the

Man

agem

ent T

eam

. W

e con

tinu

e to impr

ove our re

por

ting o

f Boar

d and se

nior

tal

ent su

cces

sion pl

annin

g as well a

s repo

rti

ng on th

e impo

rta

nce of a di

vers

ard as a m

eans o

f captu

rin

g diff

ern

g per

spe

ctive

s and enh

ancin

g disc

usso

137

Standard Chartered

– Ann

ual Re

por

t 2021

Directors’ report

Commi

tee

effectiv

eness rev

iew

As p

art of t

he 2021 inte

rnal B

oard eval

uatio

n, a revie

w of the C

ommit

tee was co

nduc

ted. B

roadl

, memb

s felt th

at the

Com

mitte

e had m

ade go

od prog

ress in a n

umbe

r of area

s this ye

, hig

hlghti

ng prog

ress w

ith execu

tive an

d non-exe

cuti

succ

essi

on plan

s, mor

e thor

ough rev

iews of in

ducto

n plan

s and over

sight of p

rogre

ss, an

d a more s

yste

matic r

eview and

tra

cking o

f Board a

nd Com

mitte

e eff

ecti

venes

s review a

ction pl

ans. A s

ummar

y of th

e key obser

tions a

nd the s

ubse

quent

reco

mmen

datio

ns can be f

ound b

elow.

Progr

ess ag

ainst t

he act

ions se

t out in t

he Com

mitte

e’

s 2021 Acti

on Plan ha

s been p

osit

ve; a summa

y of the p

rogre

ss agai

nst

eac

h of the a

ction

s is set o

ut bel

Pro

gres

s aga

ins

t the 2

021 Actio

n Plan:

•

Con

tinue

d to enh

ance and t

ailor t

he Bo

ard indu

cton pro

gramm

e for new B

oard an

d Commi

ttee m

embe

, providn

g great

oversight of progre

ss. Maintane

d a

ign

ﬁcant programme of ong

oing trainng for director

s during the year

•

Whil

e effo

rt was m

ade du

ring t

he year to co

ntinu

e build

ng in tim

e withn t

he Boa

rd calen

dar for m

embe

rs to m

eet int

erna

high-p

oten

tial ind

vidu

als in pe

rso

n, cont

inue

d CO

VID

19 res

trict

ons im

pacte

d Comm

itte

e memb

ers’ ab

ilt

y to reac

h as many

acro

ss th

e busin

ess as t

hey had h

ope

d. Desp

ite thi

s, many o

f the ind

vidu

als cont

inue

d to have e

xpos

ure to th

e Boar

d throu

pre

senta

tion

s to the B

oard an

d its co

mmitt

ees

. In per

son co

ntact w

ill resu

me once v

ist

s to mar

kets al

low for int

eract

on and

more informal sessions

•

As p

art of t

he Co

mmitt

ee’

s s

ucces

sion p

lannin

g proce

ss, pr

ovide

d oversi

ght of an ext

erna

l market m

apping o

f candid

ates fo

key

managem

ent

roles

•

Refr

eshe

d the Bo

ard sk

ills mat

rix

, to as

sist t

he succe

ssio

n planni

ng proc

ess

, givn

g part

icular f

ocus t

o the suc

cessi

on plan

s for

the C

hair

s of the B

oard com

mitt

ees

ey obs

ervation

s from t

he 2021 internal

effectiv

eness re

vie

The feedback

rom

the 20

21 internal

ly conducted

Governance and Nominat

on Committee effectiveness

revi

ew was bro

adly po

sitve. T

he overall f

eelin

g was

tha

t good p

rogre

ss had b

een m

ade in many ar

eas

incl

udng su

cces

sion for key exe

cuti

ve roles an

d plan

s for

non-executi

succes

sion, oversight and progres

s against

ind

ucton p

lans

, and a mor

e syst

emat

ic review an

tra

cking o

f Board a

nd comm

itte

e effe

ctive

ness r

eview

acti

on plan

s. So

me of th

e key ﬁndngs h

ighlght

ed tha

•

the C

ommit

tee wa

s well chai

red and t

hat

comm

unicat

ons an

d follow-u

ps on th

e outco

mes f

rom

meetings had

improv

•

the new

search consultan

t had strengthened the

ide

ntﬁcato

n proce

ss of new I

NEDs as p

art of s

ucces

sion

plan

ning; however, ther

e was a fee

ling th

at fu

rthe

r pace

and d

ecisve

ness c

ould b

e inecte

d into th

e proce

•

the C

ommit

tee s

aw a ben

eﬁt to sp

ending m

ore ti

me on

ensuring suitable suc

ces

sion

plans are in place

for key

Man

ageme

nt T

eam role

s, wi

th a grea

ter fo

cus on

enhancing an inter

nal pipelne of candidates

•

the C

ommit

tee i

s broad

ly happy w

ith it

s comp

osito

whi

ch it cons

idere

d to be ba

lance

d and coll

egiat

e with

a goo

d cros

s-sect

ion of sk

ills an

d diver

st

y of view

s and

per

spe

ctive

s. However, ther

e was a sen

se tha

t the

Committee would further beneﬁt from addi

tonal CFO

and ﬁnancal ser

vices exp

erience

•

the C

ommit

tee wa

s keen to ha

ve fur

the

r exter

nal ins

ght

on th

e senio

r talen

t pool i

n the glo

bal ban

king s

ector

202

2 Actio

n Plan

The 202

2 Action Pl

an for th

e Comm

itte

e reﬂect

s sug

gest

ions

fro

m the evalu

atio

n and cont

inues t

o build o

n the so

lid

pro

gress m

ade la

st year

•

Sch

edul

e a ses

sion wi

th an exte

rnal p

art

y to ga

in some

exte

rnal in

sght on t

he bro

ader s

enior ta

lent po

ol in th

global bank

ing sector

•

Schedule a focused session on Ma

nagement T

eam

succession plans, particularly focused on

a number of

key

sit

•

Ens

ure the p

ace is m

aintan

ed in th

e INED succ

essio

plan

ning pro

ces

s, foc

using o

n incre

asng th

e level of

bankin

CEO experien

•

Con

tinue t

o review e

merge

ncy s

ucces

sion pl

ans for key

Board

roles

138

Standard

Charter

– A

nnu

al Rep

ort 202

Directors’ report

Corporate gov

nanc

oar

Finan

cal

ime

Risk

Commit

tee

As C

hair o

f the B

oard Fin

anca

l Crim

e Risk C

omm

itte

e, I am pl

eas

ed to

pre

sen

t the B

oard Fin

anca

l Crim

e Risk C

omm

itte

e’s repo

rt fo

r the ye

end

ed 31 D

ecem

ber 202

e Comm

itt

ee is pl

eas

ed to n

ote t

he pro

gres

s mad

e agai

nst t

oup’

s over

sig

ht of ﬁn

anca

l crim

e pri

ort

ies

, incl

udng t

he ex

pir

of t

he Gr

oup

’s 2019 U

S Defe

rre

d Pros

ecut

ion Agr

eem

ent

s and

completion of

roup

’

s Financ

al Crime (F

C)-rela

ted remediaton

pro

gram

mes

. Whil

e this p

rogr

ess i

s not

able, w

e shall n

ot be

com

complacent and reco

gnise that Financal Crime Risk (FCR

) remains

an important ongoi

ng risk for

roup.

e Comm

itt

ee ha

s kept a clo

se wat

ch on t

he pro

gres

s bei

ng mad

to enhance ﬁnancal crime compliance (FCC)-related techn

ology

e Gro

up be

gan wor

k to up

grad

e core d

ata an

d tech

nol

ogy

inf

ras

tru

ctu

re for C

usto

mer D

ue Dil

gen

ce and FC i

n 2013, an

d the

mmit

tee wa

s ple

ase

d to not

e at th

e end of 202

1 tha

t the ma

jor

enhancements have now been

deployed to

all relevant

mar

acr

oss t

he Gr

oup. T

he Co

mmit

tee wa

s ass

ure

d that t

he Gr

oup

con

tinu

es to a

sse

ss how t

o impr

ove the e

ffe

cti

vene

ss of i

ts to

ols

and consider

-generation surveillance and

FC monitorng

infrast

ructure and machine le

arning.

e Comm

itt

ee ha

s rece

ived an

d dis

cuss

ed th

e FCR env

iron

men

controls in

place and ongoing risks for

a number of the Group

’

s ke

mar

ket

s incl

udn

g: India

, Ban

glad

esh

, Ger

many an

d the U

S. Th

e loca

CEO

s were inv

ted t

o atte

nd th

ese d

iscu

sso

ns, w

hich p

rovid

opportunites for the

ommittee to

probe how the c

lenges are

being managed on

the ground.

Fol

lowin

g dis

cuss

ons h

eld in 2020, t

he Com

mit

tee di

scus

d the

oup’

s Ri

sk and C

FCC Prod

ucti

vt

y Pro

gram

me, wi

th Audi

mmit

tee m

embe

rs b

eing i

nvte

d to jon t

his di

scus

son

. Foc

was p

lace

d on th

e nee

d to en

sure t

hat th

e rig

ht bal

ance i

s str

uck

between achiev

ng cost

-efﬁc

encies

and mainta

ning effective

risk management.

A key pr

ior

ty f

or th

e Comm

itt

ee thi

s year h

as be

en th

e Finan

cal

Crime Sur

veillance Operat

ions (FCSO

) T

ransforma

tion Programme,

whi

ch was d

iscu

sse

d at ea

ch mee

tin

g. Thi

s T

rans

for

mati

Programme

is responsible for transferring agreed i

n-scope

sur

eilla

nce act

iv

ties f

rom t

he se

cond l

ine of d

efen

ce to t

he ﬁr

lin

e, wit

h the o

bjec

tve of m

ovin

g ris

k mana

gem

ent cl

oser t

o the

source of

isk

and to

promote better decis

on-making.

The Committee has regularly

discus

sed e

xter

nal

developments,

ergin

g ris

ks an

d thre

s, in

clud

ng how COVID

19-re

late

d FCR is

evolving. F

thermore,

focus has been

placed on the

impact

col

leag

ues wo

ing fr

om ho

me (W

FH) and t

he as

soc

iate

d ris

Reg

ular r

epor

tin

g fro

m mana

gem

ent an

d Gro

up Int

ern

al Audit (GIA)

s provi

ded a

ssu

rance a

s to th

e eff

ect

iven

ess o

f cont

rols i

n plac

whi

ch wil

l be imp

tant a

s the ex

ter

nal env

iron

ment n

orm

alis

es an

as t

he Gr

oup tr

ansi

ton

s to a hyb

rid wo

rki

ng mo

del. T

he Co

mmit

tee

s cont

inue

d to mo

nito

r the G

roup’

s c

ontr

ol cap

abilt

y an

d pro

bed

at the G

rou

p is well p

rot

ecte

d agai

nst FC

At th

e requ

est o

f the C

ommi

tte

e, a pap

er on FC

R in new t

echn

olo

gies

inc

ludn

g cr

to as

set

s was r

ecei

ved an

d disc

uss

ed. T

he cap

abilt

ies

ills an

d res

ourc

es req

uire

d to ma

nage t

hes

e ris

ks wer

e dis

cuss

and management

was able

to provide assurance

that opport

unit

are b

eing a

sse

ed in a me

asu

red wa

, en

sur

ing th

at all r

elevan

sta

kehol

der

s are e

ngag

ed. Fu

rth

erm

ore, a p

ape

r was re

ceive

d on th

Group

’s

Sanctions Compliance Progr

amme. The Committee sought

and r

ecei

ved a

ssur

ance t

hat t

he Gr

oup co

ntin

ues to b

uild t

his

pro

gram

me to b

e sust

aina

ble an

d adap

t to th

e evolv

ing r

isk

s tha

t the

oup fa

ces

. The C

ommi

tte

e also d

iscu

sse

d a pap

er on t

he Gr

oup

’s

Anti-Brib

ery and Cor

ruption (ABC) Programme, includng an analysis

of k

ey risks and

management actions.

e Gro

up cont

inu

es to p

art

ner to l

ead t

he ﬁght a

gain

st ﬁna

ncal

crime throu

gh informaton-sharin

g and

ublic

-pr

ivate partner

ships.

spit

e rest

rict

ons o

n phys

ical me

eti

ngs d

urin

g CO

ID-19

, the

Committee was pleased to

note that management continued

par

tic

pat

e in info

rma

ton p

art

ner

ship

s and in

dus

y wor

k to add

res

FCR, includng thro

ugh United for Wildlfe hosted webinars focus

ing

on il

lega

l wild

lfe tr

ade (IW

), the wo

rk of t

he W

lfs

berg G

rou

p of

whi

ch th

e Gro

up is an a

ctive m

emb

er, and wit

h pub

lic-pri

vate

partnerships in multiple ma

rkets. The Committee fully supported

these virtual forums to enable

roup

to continue to play

a leading

rol

e in FCC sh

arin

g int

iatv

es.

e foll

owing p

age

s prov

ide in

sght a

nd con

text in

to th

e Comm

itt

ee’s

wor

k and ac

tiv

tie

s dur

ing th

e year.

y Huey Evan

Chair of the Board Financal Crime Risk Committe

Committee compositon

Scheduled

meetings

G Hue

y Evans, C

BE (

air

)

D P Co

nner

4/4

C M Ho

dgso

n, CBE

4/4

N Kh

eraj

External adviser members

B H Kh

Sir I

ain Lobb

her a

ende

es a

t Comm

itt

ee me

ing

s in 2021 i

ncl

uded

e Gro

up Chai

rma

n; Gro

up Chie

f Exe

cut

ive; Gr

oup He

ad,

Condu

ct, Financal

ime & Compliance; Group Gener

uns

el; Gro

up Chi

ef Ris

k Ofﬁ

cer; G

lob

al He

ad, Fin

anca

Crime Comp

liance, Conduct & Compliance Frameworks;

oup He

ad of I

nter

nal Au

dit; G

lob

al He

ad, D

ispu

tes &

Government Inv

estigatons; and Group Company

Secretar

As p

art o

f the

ir ong

oing e

nga

geme

nt pla

ns in 2021

, Phil Ri

vett

attended two

Committee

meetings, Maria

Ramos a

ttended

ree Co

mmit

tee m

eet

ing

s and By

ron G

rote a

tten

ded t

majorty of one Committee meeting.

As part of

, and i

n addit

on to,

ach

schedule

ommittee

meeting, the

Committee held

pri

ate members-only

meetings.

The Committee’

s membership currently comprises ﬁv

e INEDs

and two independent external adviser members who are

nei

the

r dire

ctor

s nor e

mploy

ees of t

he G

roup, b

ut wh

o provi

a valu

able e

xter

nal p

ers

pec

tive a

nd ha

ve exte

nsiv

experience in counter

-terrorism, cyber securit

y and

intern

atonal securit

Biographcal

details of the Committee members

can b

e vie

wed on

es 91 t

o 94

Main respon

siblites of the Committ

e Comm

itt

ee prov

ide

s overs

ight o

f the e

ffe

cti

vene

ss of t

oup’

s po

lice

s, pr

oced

ure

s, sy

ste

ms, c

ontr

ols an

d ass

uran

arrangements designed to iden

tf

, assess, manage,

monitor

and prev

ent and/

or detect money laundering, non

com

plia

nce wi

th san

ctio

ns, b

rib

, c

orr

upt

ion an

d tax c

rime

by thi

rd par

tie

s. Th

e Com

mitt

ee re

por

ts t

o the B

oard o

n its ke

areas

of focus

following

each Commi

ttee meeting.

The Committee has written T

of Reference that

can b

e vie

wed at

.com

/termsofreference

“

The Comm

ittee is pl

eased to note the

progre

ss m

ade a

gainst

the G

roup

’

sight of ﬁnanca

crime priorties”

139

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

ties during the y

ear

Completion of

technology

remediaton

progr

amme

•

xercis

ed over

sigh

t of the a

ctiv

t

y requ

ired t

o compl

y wit

h the re

quire

ment

s of t

he vari

ous FCC-r

elate

resolutions with

the US and UK

authorites and d

iscusse

material risks and business

strategy plans

pertainng

to the Group

’

s businesses in

Asse

ssment of

ﬁnancal

crime

risk co

ntrol

vironm

ent

•

Dis

cus

sed re

por

ts o

n FCR face

d by the G

rou

p acros

s a numb

er of c

lient s

egme

nts a

nd geo

grap

hies

wit

h memb

s of cou

ntr

y and r

egio

nal ma

nage

ment at

ten

ding me

etin

gs to pr

ovide p

spec

tive

•

sur

ance was s

ough

t and re

ceive

d on the a

ctio

ns und

er way t

o stren

gth

en cont

rols i

n relat

ion to F

•

Revie

wed rep

ort

s on G

’

s w

ork an

d opino

n on the G

rou

’

s c

ontr

ol envir

onme

nt rel

ating t

o FCR

Dis

cus

sons in

clud

ed th

e gradi

ng of au

dit rep

ort

s acr

oss FCC r

isk t

heme

s, gap

s and de

ﬁcenci

es tha

ve been i

dent

ﬁed. A

ssu

rance wa

s sou

ght and r

ecei

ved con

cern

ing man

agem

ent

’s respo

nse a

res

ulti

ng man

agem

ent act

ions

. Gi

ven WFH ar

range

ment

s du

e to CO

VID

19 lo

ckdown

s, th

e Comm

itte

pro

bed h

ow GIA is m

anag

ing it

s audi

ts an

d sou

ght as

suran

ce tha

t appro

pria

te cont

rol

s were be

ing

mainta

•

Dis

cus

sed an a

nnual r

epor

t fro

m the G

roup’

s Mo

ney Laun

der

ing Rep

ort

ing Of

ﬁcer cove

ring:

responsibl

ites across the

roup

for anti-

money laundering systems a

nd controls and

the structure withn

whi

ch they o

pera

te; an overal

l ass

essm

ent of t

he FCC pr

ogram

me; an as

ses

smen

t of the o

pera

tion o

systems and c

ontrols; a summa

y of business

issues and

strategy; conclusions a

nd recommendations for

act

ion; rep

ort

ing f

rom th

e Nomin

ate

d Ofﬁc

•

At ea

ch mee

ting

, rece

ived a re

por

t fro

m the G

loba

l Head o

f FCC

, Cond

uct and C

omp

liance Fr

amewor

set

tin

g out st

atus r

epor

ts o

n the FC p

rogr

amme, FC o

bjec

tves

, reg

ulato

y mat

ter

s, sig

nﬁcant

inv

estgations, external

hreats a

nd technology

enhancements being

rolled out acr

oss the Group

•

At th

e requ

est of t

he Co

mmitt

ee, a p

aper s

etti

ng out t

he key exta

nt and e

mergi

ng FC ri

sks f

rom

chnol

ogy-

enabl

ed ﬁna

ncal in

novato

n, foc

usin

g on the G

roup’

s di

gtal as

set

s st

rate

gy was di

scus

sed

•

Dis

cus

sed th

e Gro

’s ABC Pro

gramm

e focu

sing on t

he key ri

sks a

nd acti

ons ta

ken by mana

geme

nt to

add

ress t

hes

e. In par

ticu

lar, discu

sson f

ocus

ed on t

he cont

rol pr

oces

ses fo

r inte

rme

dari

es and n

partner

ships, for

example, with S

C V

entures-

related intiatves

•

Dis

cus

sed a p

aper s

etti

ng out t

he nat

ure of F

CR inhe

rent in t

he CCIB b

usin

ess

, pot

enti

al new FCR in l

ight

of CCI

B’

s str

ateg

, mit

gat

ing act

ions a

nd rem

ainng c

halle

nges

Financa

l crime

future threats

•

Dis

cus

sed ex

tern

al devel

opme

nt and em

ergin

g thre

s at eac

h Comm

itte

e mee

ting

•

Revie

wed and p

rovid

ed fee

dba

ck on th

e main ar

eas of F

CR thre

at for t

he Gr

oup, wi

th the C

omm

itte

prov

idng in

sght

s on w

hat is b

eing s

een el

sewh

ere. In p

art

icula

, di

scus

sed h

ow the th

reat o

f CO

D-

19-

rel

ated F

C is evolv

ing

•

Rece

ived an

d disc

usse

d pap

ers p

rovid

ng an as

ses

smen

t of the u

nder

lyi

ng FC th

reat

s ari

sng w

ith mo

eque

ncy i

n rece

nt and on

goin

g signﬁca

nt invest

gat

ions

. Dis

cuss

on focu

sed o

n how man

agem

ent is

res

pon

ding to t

he vari

ous t

hemat

ic ri

sks a

nd hor

izon sc

annin

g emer

ging r

isk

oup Ris

Appet

ite

Statement in

rela

tion to

ﬁnancal

crime

•

Revie

wed and r

ecom

mend

ed to th

e Boa

rd the G

roup’

s Ri

sk App

etit

e Stat

emen

t, me

tri

cs and t

hres

hold

in re

latio

n to FCR

•

Regu

lar

ly revi

ewed me

tri

cs me

asur

ing ag

ainst t

he FC Ri

sk App

etit

CFCC fun

ction

•

Regularly discussed the

engagement of people and the

impact

of the FCSO

ransformation

Prog

ramme a

nd act

ions t

o mana

ge the r

isk

s and im

plem

ent ch

ange

Financa

l crime

compliance

matters

•

Rece

ived an

d disc

usse

d upd

ates o

n signﬁc

ant FCC-rel

ate

d matt

ers

engagement in

indus

y and

public-p

riv

intiat

v

•

Dis

cus

sed re

por

ts o

n FCC-rela

ted pu

blic-pr

ivate in

for

mato

n-sha

ring in

tiat

ves to w

hich t

he Gro

con

trib

utes

, in ord

er to pr

otec

t the in

tegr

t

y of the g

lobal ﬁ

nanca

l sys

tem and i

mprove t

he ef

fect

ivene

of th

e cont

ribu

ton

s of ﬁnan

cal ins

ttu

tion

s in ﬁght

ng ﬁnan

cal cr

ime

•

Discussed how

the Group contributes to

industr

y think

ng on reform a

nd informat

on-sharing

par

tne

rsh

ips in a nu

mber o

f mar

kets

, as well a

s work

ing w

ith int

ern

aton

al fora s

uch as t

he W

lfsb

erg

Group

•

Dis

cus

sed th

e Gro

’s role in p

art

ner

ing wi

th indu

str

y p

eer

s, no

n-gove

rnme

ntal o

rgani

sato

ns and

gover

nme

nt ofﬁ

cals

, to eng

age in co

ordin

ated e

ffo

s to com

bat so

me of t

he wor

ld’s mos

t per

nicou

crimes, includ

ng human trafﬁ

ckng, terro

rism, IWT and the

transnational organ

ise

money

laundering network

Ongoing

engagement

•

e Grou

p par

ticp

ated in a n

umb

er of Uni

ted fo

r Wildlf

e host

ed webi

nar

s, wh

ich bro

ught t

oget

her

experts and stak

eholder

to share knowledge

and perspective on these

challenges and

hat

the

ﬁnan

cal se

ctor ca

n do to com

bat t

hese i

ssu

es and di

scus

s eme

rging IW

T tr

ends a

nd thr

eat

Link

ges with

subs

idaries

•

In co

njunct

on wi

th the C

hair of t

he Bo

ard Ris

k Comm

itte

e, Ga

y Huey Eva

ns co-h

oste

d an annu

vid

eo-

confe

rence c

all wit

h the ch

air

s of sub

sidar

y b

oard r

isk co

mmit

tees a

nd INED

s in Jul

y 2021

tail

s of th

is cal

l can b

e foun

d on

ge 11

140

Standard

Chartere

– A

nnu

al Repo

rt 2021

Directors’ report

Corporate gov

nanc

Commi

tee

effectiv

eness rev

iew

ring 2021, a

n inter

nal Bo

ard and B

oard Co

mmitt

ee ef

fect

ivene

ss revi

ew was facil

tated by t

he Gr

oup Co

mpany Se

creta

ey obs

ervation

s from t

he 2021 internal

effectiv

eness re

vie

The f

eedb

ack on t

he Com

mitte

e’

s f

unct

ionng an

fect

ivenes

s was po

sitve a

nd it spe

cif

cally hi

ghlght

ed:

•

The C

ommit

tee h

as per

form

ed well w

ith su

staine

d focu

on th

e key challen

ges fa

ced for F

CC. T

he Comm

itte

e Chair

is well

prepared and manages the agenda

effectively

•

od pro

gres

s had be

en mad

e in compl

eting ove

rsig

of th

e key milest

ones an

d prio

rtie

s agree

d in las

t year’s

fect

ivenes

s revie

, and co

mmen

tar

y was pr

ovided o

the f

ure rol

e and foc

us of the C

ommi

ttee

•

A sug

gest

ion was ma

de tha

t addito

nal FCR t

rainng b

offered to Committee and non-Committee member

202

2 Actio

n Plan

The 202

2 Action Pl

an for th

e Comm

itte

e reﬂect

s sug

gest

ions

fro

m the evalu

atio

•

Con

side

raton w

ill be gi

ven to the f

ure rol

e and focu

of th

e Comm

itte

e, ensu

ring t

hat FCR co

ntinu

es to ha

sufﬁcent o

ver

sight

•

Addit

onal FCR t

rainng f

or Com

mitte

e and no

Com

mitte

e memb

s to be org

anise

d in 2022

141

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Director

’

remuner

ation repor

Committee compositon

Scheduled

meetings

C M Ho

dgso

n, CBE (Chair

)

5/5

B E Gr

ote

N Kh

eraj

(Ste

ppe

d dow

n as Me

mbe

r of th

e Com

mit

tee o

n 5 Jul

y 2021)

2/2

M Ram

(App

oin

ted a

s Mem

ber o

f the C

omm

itt

ee on 5 J

uly 202

J M Whi

tbre

ogra

phc

al det

ail

s of th

e Com

mitt

ee m

embe

rs c

an be

ewed o

pag

es 92 t

o 93

her a

ende

es f

or re

levant pa

s of Com

mit

e mee

tin

gs in

2021 i

ncl

ude

Group Chairm

; Group Chief E

ecuti

(CE

;

Group Chief Financal Ofﬁcer (

CFO

); Group Chief Risk Of

ﬁcer;

oup He

ad, H

R; Gl

obal H

ead

, Perf

orm

ance, Re

ward an

Beneﬁts; Group General Counsel;

roup

Head, Conduct,

Financal Crime and Compliance; Group Comp

any

ecretar

Main respon

siblites of the Committ

The Committee is

responsible for setting

the governance

framework for remuneration

for all employees, ensuring

ali

gnme

nt wit

h our cu

ltu

re, th

e req

uirem

ent

s of th

e UK

rpo

rate G

over

nanc

e Cod

e and any o

ther r

eleva

regulations. Ke

y responsiblites of

the Committee include:

•

Over

sig

ht of th

e Gro

’s Fair Pa

y Char

ter i

nclu

dng t

development

and implementaton of

work

forc

remuneration polices and practices that are consistent

with sound and

fective

isk

management to sup

port

e Gro

’s str

ateg

ic pri

ort

ies an

d ena

ble lo

ng-te

sustainabl

e success.

•

App

rov

al of Group d

iscretonar

incentves, incl

udng

adjustment for current a

uture risks.

•

get

her w

ith th

e Boa

rd, de

ter

minn

g and ag

reei

ng th

rem

une

rati

on fra

mewor

k and p

olic

es fo

r the G

roup

Chairman

executive director

s and other senior executives

usi

ng th

e Fair Pa

y Char

ter pr

inc

ples

, tak

ing in

to acc

ount

wider workforce remuneration, a

nd ensuring the alig

nment

of re

ward wi

th cul

ture a

nd con

duct

e Com

mitt

ee h

as wr

itt

en te

rms o

f ref

eren

ce th

at can b

ewed a

sc.com

/termsofreference

“

Deliverng competitve rew

ard

in recogniton of resilent

perform

anc

e achi

ed in

chal

lenging ci

rcumstances

”

Summar

y of 20

21 remuneration decison

•

Following signﬁ

cantly reduced remun

eration

out

comes i

n 20

20, G

roup di

scret

onar

y in

centve

s for

2021 are $1

7 m

illon; up 3

8 per cen

t on 202

0 and

slig

htly u

p on 2019

, reﬂect

ing res

ilent p

erfo

rman

ce in

2021

•

Ann

ual ince

ntve awa

rds for t

he execu

tive dir

ector

s are

dire

ctly li

nked to th

e Grou

p score

card wit

h an out

come

of 57 p

er cent o

f the ma

ximu

•

Sal

y incre

ase

s of 2.7 p

er cent w

ill be imp

leme

nted in

Apr

il 2022 fo

r both e

xecuti

ve direct

ors

, in line w

ith th

aver

age sal

y incre

ase fo

r the G

roup

’s UK wor

kforc

and b

elow th

e averag

e salar

y in

crea

se for t

he Gro

(

4.8 per cent

)

•

A new dir

ector

s’ rem

unera

tion po

licy i

s prop

osed f

implementaton in 2

022

, sub

ject to shareholder

appr

oval at the AGM

. There ar

e no mat

erial c

hange

as th

e poli

cy con

tinue

s to supp

ort t

he deli

ver

y of ou

strategy.

•

eater a

lignme

nt is int

roduc

ed bet

en reward an

the Group

’

s strateg

ic priorties, includ

ng our Stands,

through dire

ct links to annual and long-term in

centve

measures.

Introduction

On b

ehalf of t

he Remun

erati

on Com

mitte

e, I am ple

ase

d to

pre

sent ou

r direct

ors’ r

emune

ratio

n repo

rt for t

he year en

ded

31 De

cembe

r 20

. The rep

ort p

rovide

s an over

view o

f the

Com

mitte

e’

s wo

rk in th

e year on re

muner

ation f

or the

execu

tive dir

ector

s and t

he wide

r work

force.

During 20

21 we have c

ontinued to support colleagues thr

ugh

the C

VID-

19 pandemi

recognis

ng the

fatigue and ongoi

chal

lenge

s creat

ed by the p

rolon

ged na

ture of t

he cr

iss. W

are se

nsit

ve to the d

iff

cult

ies ma

ny continu

e to face a

nd are

invest

ng hea

vily i

n our pe

ople an

d cultu

re, bei

ng commi

tted

to deve

loping t

he ban

k for th

e new econ

omy – one t

hat is

inc

lusve

, colla

bora

tive an

d innova

tve.

Acros

s more t

han 50 ma

rket

s we have bu

ilt a bank w

ith

divers

e experience, cap

abil

ties and cultu

re. W

e are

dedicate

to making remuneration de

cis

ons that are fair

, transparent

and co

mpet

itve in or

der to en

able a f

utu

re-rea

dy wor

kforc

and build

a workplace that

helps our colleagues perform at

the

ir best

. Ou

r Fair Pay Cha

rter co

ntinu

es to gu

ide our

per

for

mance an

d reward de

cison-m

aking g

loball

. Ou

r 20

Fair Pay Re

port p

rovide

s an upd

ate on th

e progr

ess ma

and su

mmar

ises h

ow we meet t

he pr

incple

s of our Fai

r Pay

Char

ter. Highlgh

ts th

is year in

clude t

aking t

he ﬁr

st step

s to

incorporate livng

wages into

our supply chain and

continung

to in

creas

e consi

sten

cy of b

eneﬁt

s acro

ss our m

arket

e 2021 Fai

r Pay Rep

t can be v

iewe

d at

sc.com/

airpay

charter

As p

art of t

his rep

ort we a

re pres

entin

g our new di

recto

rs’

rem

unerat

ion po

licy (the po

licy

) w

hich, i

f approved

, will

appl

y fro

m the dat

e of the 202

2 A

M for up t

o thre

e years

No ma

teri

al chang

es are pro

pos

ed to th

e polic

y as th

Com

mitte

e is conﬁd

ent th

at it rem

ains ﬁt fo

r purp

ose an

cont

inue

s to supp

ort t

he deli

ver

y of ou

r strat

egy

. I

n arri

vng

at this c

clusion,

we have consulted with

shareholders and

con

sidere

d the ex

per

ience o

f our wid

er stakeh

olde

r group.

A sum

mar

y of th

e prop

osed c

hange

s is incl

uded b

elow and

the f

ull p

olic

y is set o

ut on pa

ges 161 to 166

142

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Directors’ remuneration

rep

ort

Our perf

ormance in 2021

Thro

ugho

ut the ye

, th

e Gro

up has de

mons

trate

d resil

ent

perf

ormance agains

t a

allenging backdrop. Underl

ying

proﬁt b

efor

e tax is up 5

5 per cen

t on 202

0, dr

iven by low l

evels

of cre

dit imp

arme

nt and go

od pro

gress a

cros

s our str

ategi

pri

orti

es. Ret

urn on t

angib

le equi

ty (Ro

TE) i

s up 30

0 basis

poi

nts t

o 6.0 per ce

nt and th

e Gro

up remai

ns stro

ngly

capit

alse

d, with t

he Com

mon Equi

ty T

ier 1 (CET

1) ratio at

14.

1 per cent, demonstrating resilence.

The f

ormu

laic G

roup sc

orecar

d outco

me was 6

4 per ce

wit

h 37 per cen

t base

d on ﬁnan

cal achieve

ment

s incl

udng

fect

ive cost m

anage

ment

, low level

s of cred

it impar

ment

and gr

owth in hi

gh-per

form

ing liabl

ites an

d 27 per c

ent

based on non

-ﬁna

ncal ach

iev

ement

s, inc

ludng

digtal

adoption, increased inno

vaton,

eed to

market (

from idea

formation to client

deliver

) and

deliver

y on our c

ommitment

to the W

omen in Finance Char

ter

Group

wide remunerat

ion

2021 a

nnual discret

onary incentves

Following signﬁcantly red

uced discretonar

y ince

ntves and

limt

ed pay i

ncrea

ses in 2020, remu

nerat

ion out

comes h

ave

increas

ed in 2

021 in line with perfor

mance.

The G

roup s

core

card as

sess

ment of 6

4 pe

r cent was u

sed

as a starting point for determin

ng discretonar

y incentves.

The C

ommit

tee al

so con

sidere

d caref

ull

y risk

, cont

rol and

conduct

matter

s, re

viewng materia

l issues and ﬁnes,

includ

the p

enalt

y r

eceive

d from t

he Pru

dent

ial Regul

ation Au

thor

(PR

) in r

espe

ct of liqu

dit

y repo

rtin

g issu

es.

Considerng all

factor

s, and

to ensure the outc

ome reﬂects

underlying per

formance, the

ommittee determined that a

red

uctio

n of 7 perc

entag

e point

s was ap

propr

iate, r

esult

ing in

an ou

tcome o

f 57 per ce

nt for t

he pur

pose

s of dis

creto

nar

ince

ntves

. This r

esult

s in ag

grega

te incen

tves of $

367 millon

whi

ch is 38 p

er cent hi

gher th

an 202

0 a

nd sligh

tly ab

ove 2019

Fur

ther de

tail is s

et out o

n page 1

53.

2022 salaries

At the s

tart o

f 20

1 we limte

d salar

y in

crea

ses in re

cognit

on

of th

e prevailng c

ircums

tance

s. However, throu

gh the ye

ar we

w an incre

ase in co

mpet

iton fo

r talen

t in the glo

bal lab

our

mar

ket. In r

espon

se to t

his, an

d wage inﬂa

ton acr

oss seve

ral

of th

e market

s we op

erate i

n, our a

verage gl

obal s

alar

incr

ease i

s 4.8 p

er cent fo

r 20

Executive

director remunerat

ion

in 2021

Ann

ual in

cent

ves fo

r execut

ive dire

cto

Ann

ual ince

ntves f

or Bill an

d Andy r

eﬂect t

he Gro

up scor

ecard

out

come w

ith po

tenti

al to adju

st upward

s or downward

sed on p

ers

onal p

erfor

manc

e. For 2021, th

e Comm

itte

det

ermin

ed th

at the an

nual inc

entve f

or Bill an

d Andy s

houl

be un

adjus

ted f

rom th

e Grou

p outco

me, at 57 p

er cent o

the maximum.

In 2020, the Gr

oup sco

recard o

utcom

e was 37 per c

ent, w

hich

was th

en red

uced by Bi

ll’s and And

y’s volunt

y waiver o

f the

cash p

ort

ion (i.e. 50 per ce

), res

ultin

g in an overall ann

ual

ince

ntve ou

tcome o

f 18.

5 per c

ent of th

e maxi

mum.

The 2021 s

corec

ard resu

lts in a

nnual in

cent

ve outco

mes fo

the e

xecuti

ve direct

ors t

hat are 5

4 per c

ent high

er than 2020

(bef

ore th

e volunt

y waiver o

f the cas

h por

tion

) a

nd sligh

tly

lower t

han 2019

, whic

h is a more c

ompar

able year g

iven th

mat

erial i

mpact o

f CO

VID

201

9–

1 L

P award

s vesti

ng in Ma

rch 2

022

The 2019–21 lon

g-term i

ncent

ve plan (L

TIP) awards a

re due

to ves

t in March 202

2. Foll

owing an a

sse

ssme

nt of th

per

for

mance co

ndito

ns, t

he exp

ected l

evels of ve

sting ar

•

E – 0% vesti

•

otal sh

areho

lder re

turn (

TSR) – 0% vesti

•

Strategic prio

rties – 23% vesting

e ha

ve not ad

juste

d the pe

rfor

manc

e target

s as a r

esult

of th

e pand

emic. T

he valu

e delive

red by the 2

3 pe

r cent

vest

ing out

come an

d inclu

ded in t

he singl

e total ﬁ

gure of

rem

unerat

ion is b

ase

d on a share p

rice o

f £

.55 (

he thr

ee-

mon

th avera

ge to 31 D

ecemb

er 2021) comp

ared wi

th the

sha

re price o

f £6.11 at grant in 2019

. Th

is red

uces th

e award

out

come val

ue by 25 pe

r cent

Single total ﬁgure of remuneration for 20

The 2

021 annual

incentve

and expected 2

019

–21

TIP

vesting

res

ult

s in a 20

1 singl

e ﬁgure fo

r Bill of £4,

657

,00

0 and for

And

y of £

979

00. This r

epres

ent

s a year

on-year inc

reas

of 19 an

d 21 per ce

nt resp

ecti

vely

, w

hich pa

rtia

lly reﬂe

cts t

imp

act of th

e execut

ive direc

tor

s’ volunt

y waiver o

f the cas

por

tio

n of thei

r annual i

ncent

ve in 202

2021 sin

gle tot

ﬁgu

re of remu

nera

tio

(

£000

)

4,657

2021

Bil

nte

2020

2019

452

3,636

2021

And

alfo

2020

2019

1,000

2,000

000

4,000

6,000

5,000

lar

y (

sh and sh

ares)

Pension

Beneﬁt

Annual i

centv

TIP

ncr

eas

for

Bil

inte

rs in 2021

21% inc

ase

for

dy Halfo

rd in 20

Execut

e dire

ctors’ s

hareholdings

A signﬁc

ant por

tion o

f Bill

’

s an

d Andy

’

s t

otal re

muner

ation i

deli

vered i

n share

s which w

ill be rel

eas

ed over the n

ext eigh

year

s. Th

e defe

rral, r

etent

ion and r

ecover

y prov

ison

s of thei

pay reinforce continued al

ignment with shareholder interests

and t

he Gro

’s long-ter

m per

for

mance. A

s of 31 De

cemb

21, both Bill

and Andy

had ex

ceeded their shar

eholding

req

uirem

ent

s as out

lined b

elow.

Exe

cut

ive

irec

tor sh

areh

oldin

alar

)

250%

Bil

nte

And

alfo

279

200

100%

50%

150%

250%

300%

350%

450%

400%

Actual

shareholding

Shareholdin

requirement

143

Standard Chartered

– Ann

ual Re

por

t 2021

Directors’ report

Directors

’ remuneration policy

The C

ommit

tee i

s seek

ing sha

rehol

der app

roval for a new

rem

unerat

ion po

licy f

or the exe

cuti

ve direct

ors

, as the t

erm

for t

he exis

tng po

licy c

omes t

o an end at th

e 2022 AGM.

e ha

ve unde

rtaken an e

xtens

ive revi

ew of the ex

istn

policy

, includng c

sulti

ng with our major

shareholder

s, and

we bel

ieve it rema

ins app

ropri

ate to su

ppor

t the de

liver

y o

our s

trate

. A

s such

, no signﬁca

nt chan

ge to th

e overall

str

uct

ure or qu

antum o

f the cu

rrent e

xecuti

ve direct

ors’

rem

unerat

ion is b

eing pr

opos

ed in th

e new poli

. Fu

rthe

det

ail is se

t out on p

ages 16

0 to 166

As a r

emind

, at t

he A

GM in 2019 t

he dire

ctor

s’ remu

nerat

ion

pol

icy re

ceive

d the su

ppor

t of 63

.8 per c

ent of sh

areho

lder

The Committee re-engaged with shareholders to

eek

feedback and address c

cerns rela

ing

to the pension

allowan

ce. Follow

ing th

ese dis

cuss

ons, w

ith ef

fec

t from

1 Janu

y 2020

, t

he pe

nsion al

lowance fo

r the cur

rent

execu

tive dir

ector

s was re

duce

d from 20 pe

r cent of

sal

y to 10 pe

r cent of s

alar

, al

ignng wi

th UK em

ployees

The subsequ

ent directors’ remuneration repor

ts received

sha

rehol

der sup

por

t of 97

.0 per c

ent and 98

.6 per c

ent at

the 2020 and 2021 AGMs r

espe

ctive

wo develop

ment

s to th

e direct

ors’ r

emune

ratio

n polic

y are

prop

ose

d to align w

ith mar

ket pract

ice, wh

ich has evo

lved

since 2019:

•

With

out ch

anging t

he value o

f the ma

ximu

m oppo

rtun

the c

alcula

tion of var

iabl

e pay wi

ll be ba

sed on s

alar

y (

cas

and s

hares

) on

ly and w

ill no lon

ger inc

lude t

he pen

sion

allowan

ce. This i

s pure

ly a pres

entat

ional c

hange

Basis of calculation

Maximum opportunity

Annual

incentve

Current: ﬁxed pay –

salar

y and pension

80%

120%

Proposed: salar

88%

32%

•

The post

-employment shareholdi

ng requirement will

incr

ease

d to 10

0 per cen

t of the s

hareh

olding r

equir

ement

for t

wo yea

rs fo

llowing t

he ces

sati

on of emp

loyme

nt.

In add

iton

, to reco

gnise m

arket pra

ctice an

d the v

iews of

som

e of our s

hareh

older

s, t

he pen

sion all

owance for n

dire

ctor

s will be b

ase

d on the c

ash ele

ment of s

alar

y on

The Committee considered carefully whether the pension

allowan

ce for Bi

ll and And

y sho

uld als

o be bas

ed on t

he cash

ele

ment of s

alar

y on

. Howeve

, th

e pens

ion red

uctio

ns in

2020 had a dire

ct impa

ct on the var

iabl

e pay op

por

tunit

(8 per cent l

ower for b

oth Bill a

nd And

) in addi

ton to t

red

uctio

n in ﬁxed pa

. The

refor

e, to avoi

d fur

ther r

educi

the o

ppor

tun

, we beli

eve the cur

rent p

olic

y (10 per ce

nt of

sal

) cont

inues t

o be appr

opria

te for B

ill and An

dy and

rem

ains con

sist

ent wit

h the app

roach f

or the r

est of th

e UK

wor

kforc

e. In maki

ng this d

eciso

n, the C

ommit

tee al

so too

into acc

ount the high

level of shar

eholder support expressed

for t

he cur

rent ar

rangem

ent

s at the 2020 and 2021 AGMs

and in recent

eng

agement sessions.

Executive

directors

’ remuneration in 20

For 202

2, th

e asse

ssme

nt of pe

rso

nal pe

rfor

mance w

ill be

embedded into the annual incentv

e scorecard assessm

ent,

acco

untin

g for a ma

ximum we

ightn

g of 10 pe

r cent

. F

nancal

asure

s will con

tinue t

o make up 50 p

er cent of t

he ann

ual

ince

ntve sc

orecar

d. Furt

her de

tail is se

t out on p

age 169

Under the remuneration policy

, the Committee considers

salar

y increa

ses annually for the execut

ive directors and takes

acco

unt of in

creas

es in sco

pe or re

spon

siblit

, t

he ind

vidu

al’s

devel

opmen

t in role, m

arket com

pet

itvene

ss, a

nd sala

incr

ease

s acros

s the G

roup. T

his is in lin

e with t

he appr

oach

taken

for all Group emplo

yees

aking in

to acco

unt the a

verag

e 20

2 sal

y incre

ase

award

ed to t

he Gro

’

s U

K and glo

bal wor

kforc

e, the

Com

mitte

e has d

eter

mined t

hat an in

creas

e is appr

opri

ate.

The C

ommit

tee h

as award

ed sal

y incre

ases o

f 2.7 p

er cent

to Bil

l and And

, fr

om £2

0,00

0 to £

2,43

4,00

0 and fr

£1

,515

,000 to £

556,0

00 re

spect

ively. This is t

he sec

ond sal

incr

ease a

warde

d to Bill an

d the thi

rd to And

y since t

heir

app

ointm

ent

s in 2015 and 2014 r

espe

ctivel

2022-

24 L

TIP awards to b

e grante

d in March 202

ter con

sider

ng 2021 per

for

mance, 202

–2

4 L

TIP a

wards wi

be gr

anted t

o both B

ill and An

dy wit

h a value of 1

20 per cent

of ﬁxe

d pay

, i

n line wit

h our cur

rent p

olic

. Sub

ject to

per

for

mance over t

he next t

hree ye

ars

, awards w

ill vest p

rata ove

r years t

hree t

o seven wi

th an addi

tonal r

etent

ion

per

iod of 1

2 mont

hs aft

er vest

ing. Per

form

ance wil

l be

sess

ed ba

sed on Ro

TE wi

th a CE

T1 un

derpi

n, TSR rel

ative

to a pe

er grou

p, and the a

chievem

ent of me

asur

es that a

aligned with the Group

’s strategic priorties.

Last ye

ar we adju

sted t

he weight

ngs of t

he per

for

mance

meas

ures and included a stand

alone sustainablit

y pillar to

recognis

e its impor

tance. This year we are retainng this pillar

and in

crea

sng the f

ocus on t

he bro

ader im

pact of c

lient

acti

vt

, rat

her th

an on ou

r inter

nal op

eratio

ns. T

o enh

ance

the a

lignme

nt bet

en execut

ive remu

nerat

ion and o

str

ateg

, mea

sures r

elati

ng to all t

hree St

ands ar

e inclu

ded in

the 202

–2

4 L

TIP

. More i

nfor

maton o

n our St

ands is s

et out o

pag

es 24 and 25

Discussons with shareholders w

ere held in

Januar

y 20

on th

e develop

ment o

f thes

e perf

orm

ance me

asure

s and

targets, and were fac

tore

into ﬁnal decisons

made by the

Com

mitte

e. Furt

her de

tails o

n the 2022–

24 L

TIP and th

per

for

mance t

arget

s are se

t out on p

ages 1

57 and 15

Thi

s direct

ors’ re

mune

ration r

epor

t is sub

ject to t

sha

rehol

der vote

s at the 202

2 A

•

An ad

vis

y vote on t

he appl

icaton o

f the ex

istn

g direct

ors’

remuneration po

licy in 2

021.

•

A bind

ng vote on t

he prop

ose

d direct

ors’ r

emune

ratio

pol

icy w

hich, if ap

proved, w

ill appl

y fro

m the dat

e of the

AGM. Th

e poli

cy set

s ou

t the f

ramewor

k for dir

ector

s’

rem

unerat

ion fo

r up to thr

ee year

In th

e rest of t

his rep

ort we p

resen

t the dis

clos

ures re

quire

by regulations, as

well as

additonal informaton to

explain

how re

muner

ation f

or our exe

cutive

s aligns w

ith ou

r strat

egy

shareholder interests and wider workforce pay

All disclosures in the directors’ remunerat

ion report are

unaudited unless other

wise stated. Disclosures

marked as

aud

ited sh

ould b

e consi

dere

d audite

d in the c

ontext o

f the

ﬁnan

cal stat

ement

s as a w

hole.

In mak

ing re

muner

ation d

eciso

ns for 2021 and b

eyond, we

have b

een mi

ndf

ul of the e

xper

ience o

f our wi

der sta

kehold

grou

p. I would li

ke to thank p

ers

onall

y our sh

areho

lder

s and

my fello

w Committee member

s for their

going

support and

engagement as we sought to

str

e the appropriate balance.

Christne Hodgson

Chai

r of the Rem

unera

tion Co

mmitt

144

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Directors’ remuneration

rep

ort

emuner

ati

at a glance

Financal

Proﬁt before tax







55%

Retur

n on tan

gible e

quit



.

300bps

Underly

ing basis

Com

mon Equ

ity T

ier 1 r

atio





.

28bps

ove our t

arge

t rang

e of 13-14

otal shareholder return

(





)

2.0%

Executive

directors

’ remuneration

Non-ﬁnancal

KPIs

Diversty and incluson:

wome

n in seni

or rol



.



3ppt

Sust

ainablity A

spiratons

met o

r on tr

ack





.

4.5ppt

Group

wide remunerat

ion

200

400

600

800

1,000

1,200

1,400

2021

2020

2019

990

367

ota

iscr

et

onar

y ince

nt

ves, 2019

–

202

(

are owne

rsh

ip as % of s

alar

(

at 31 De

cemb

er 2021)

279

200%

250%

Bill Winter

Requirement

Actu

Andy Halfo

086

1,333

axi

mum

Bil

l Winte

Andy

Halford

2021 ann

ual ince

ntve

(

000

)

696

,12

2,000

f maxi

mum

Bil

l Winte

Andy

Halford

201

9–

TIP ou

tcom

(

000

)

4,657

58% of ma

xim

21 outcome

Bil

l Winte

Andy

Halford

2021 sin

gle ﬁgur

(

000

)

Maximum opportunity

2021

roup scorecard

outcome

Financal



/





Clients

/





Enablers





/



21 Group

scoreca

outcome



Ris

k and con

trol

/





Sust

ainablity

/





Discretonar

eduction

to formulaic outcome

p

Considerng

all factors, the

Committee determined that a

reduction of 7

percentage points

(ppt

) to the formulaic

outcome

(

64 per cent

) was appropriate,

sult

ing i

n an out

com

e of

57 p

er cen

t for t

he pu

ose

of discret

onar

incentves

145

Standard Chartered

– Ann

ual Rep

ort 2

021

Directors’ report

Summ

ary o

f the pro

posed new executive direc

tors

’ remune

ration p

olicy

r polic

y on rem

unera

tion fo

r direct

ors wa

s last rev

iewed in 201

8 and app

roved by shar

ehol

ders a

t the Ma

y 2019 A

M. D

urin

2021 we have ca

rrie

d out a rev

iew of exec

utive di

recto

r remun

erati

on and at o

ur May 202

2 A

M we will p

ropos

e a new dire

ctor

s’

remuneration po

licy

aking in

to acco

unt fee

dbac

k recei

ved fro

m our ma

jor sha

rehol

der

s and prox

y adv

iser

s, t

he Com

mitte

e cons

ider

s that t

cur

rent dir

ector

s’ remu

nerat

ion po

licy r

emain

s approp

riat

e and cont

inues t

o supp

ort t

he deli

ver

y of ou

r strat

egy

. T

heref

ore, no

signﬁc

ant chan

ges to t

he overall st

ruc

ture or q

uant

um of th

e curre

nt execut

ive dire

ctor

s’ remun

erati

on pac

kages are b

eing

prop

ose

d. The key el

ement

s of t

he prop

osed p

olic

y and an ex

plan

ation o

f the pro

pose

d chang

es are se

t out b

elow

. Fu

ll detai

of th

e new dire

ctor

s’ remu

nerat

ion pol

icy are s

et out o

n page

s 160 to 16

Element

rrent policy

Proposed

changes to

policy and

rat

iona

Fixed

rem

uneration

Salar

Del

ivere

d par

t in cash (

paid m

onth

)

and p

art in s

hare

s (20 per ce

nt rele

ase

ann

ually ove

r ﬁve year

)

No change

Why

Deli

vern

g salar

y p

art i

n cash an

d par

t in shar

es cont

inue

s to

reinforce

long-term ali

gnment with shareholders.

Pension

ximu

m of 20 per c

ent of s

alar

implemented at 10

cent of sa

lar

for c

urre

nt execu

tive di

rect

ors

Paid a

s a cash all

owance a

nd/

contributon to

a deﬁned contributon

scheme

Change:

ximu

m will re

duce t

o 10 pe

r cent of s

alar

y in l

ine wi

th cur

rent

implementaton.

Why

With ef

ct fro

m 1 Janu

y 2020

, t

he pe

nsio

n allowan

ce for t

cur

rent e

xecuti

ve dire

ctor

s was re

duce

d fro

m 20 per cen

t of sal

y to

10 p

er cent o

f salar

y. This r

educ

ed th

e variab

le pa

y oppo

rtu

nit

y by

8 pe

r cent fo

r both B

ill and A

ndy. T

o a

void a f

urt

her re

duct

ion in

rem

uner

ation

, pen

sion f

or the c

urre

nt execu

tive di

rect

ors i

s bein

mai

ntane

d as a pe

rcent

age of t

he cas

h and sh

are el

ement

s of s

alar

Change:

For n

ew dire

ctor

s pen

sion w

ill be b

ase

d on the c

ash el

emen

t of

Why

o recog

nise f

eedb

ack f

rom sh

areho

lder

s and t

o align f

urt

her w

ith

market practice.

Beneﬁt

A rang

e of be

neﬁt

s are prov

ide

d which

sup

por

t dire

ctor

s to car

y out th

eir

duties effectively

No change

Why

Core b

eneﬁ

ts co

ntinu

e to be al

igne

d with t

he wid

er wor

kfor

ce.

ariable

remuner

ation

otal

var

iable remuneration cannot

exceed regulatory limts

Annual

incentve

sed on t

he G

roup s

corec

ard of

ﬁnanc

al and strategi

c targets and

personal perfor

mance

, measured ov

one ye

ximu

m oppo

rtu

nit

y of 80 p

er cen

t of

ﬁxed p

ay (

ﬁned a

s salar

y a

nd pen

sion)

to b

e deliv

ered a

s a combi

nato

n of

cash and

shares subject

to holding

requirement

Change:

e annu

al incen

tve op

por

tuni

y will be r

e-ex

pres

sed a

s a

rcent

age of s

alar

y on

, ch

angin

g fro

m a perc

entag

e of ﬁxed p

The m

axi

mum op

por

tuni

ty, as a per

centa

ge of s

alar

, w

ill be 8

8 per c

ent

and r

esult

s in t

he sam

e value o

f oppo

rtu

nit

Why

The b

asis f

or calcu

lati

on of var

iable r

emun

erat

ion is ch

angin

g to

align with

mar

et practice and to

recognise shareholder preference.

Long-term

incentve plan

(

)

Sha

re awar

ds to be g

rante

d annu

ally

and subject

to perfor

mance

easured

over th

ree ye

ars

ximu

m oppo

rtu

nit

y of 120 pe

r cent o

ﬁxed p

ay (

ﬁned a

s salar

y a

nd pen

sion)

wit

h pha

sed ves

ting ove

r thre

e to seve

year

s and s

ubje

ct to hol

ding

requirement

Change:

e L

IP will b

e re-e

xpre

sse

d as a pe

rcent

age of s

alar

y on

cha

nging f

rom a p

ercen

tage o

f ﬁxed pa

. Th

e max

imum o

ppor

tun

, as

a pe

rcent

age of s

alar

, w

ill be 132 p

er cen

t and res

ult

s in the s

ame val

of opportunity.

Why

The b

asis f

or calcu

lati

on of var

iable r

emun

erat

ion is ch

angin

g to

align with

mar

et practice and to

recognise shareholder preference.

Shareholding

requirements

xecut

ive dir

ector

s are r

equir

ed to h

old a

ecif

ed l

evel of sh

ares ex

pres

d as a

percentage of sala

ring t

he cur

rent p

olic

y the

req

uirem

ent

s have b

een 2

50 pe

r cent

of sa

lar

y fo

r the CEO an

d 200 pe

r cent

of sa

lar

y fo

r the CFO

No change

Why

The shareholdi

ng requirements remain appr

opr

iate

and alig

ned

to th

e inte

rest

s of sh

areh

olde

rs an

d marke

t pract

ice.

Pos

employment

shareholdin

requirement

100 per ce

nt of

shareholding

req

uirem

ent in p

lace fo

r one ye

ar and

50 pe

r cent o

f the re

quire

ment i

n place

for t

he se

cond ye

ar foll

owing c

ess

ation

of employment

Change:

The post

-employment shar

eholding requirement

will be

0 per ce

nt of th

e share

hold

ing re

quire

ment f

or the f

ull t

wo ye

ars

fol

lowin

g the ce

ssat

ion of e

mploy

ment

Why

The re

quir

emen

ts are c

hang

ing to al

ign wit

h marke

t pract

ice

and shar

eholder guidance.

ave

provisons

On a c

ase-by-c

ase basis, the Committ

has the discr

eton to

disapply the

pro

ratio

n of vest

ing L

TIP a

wards fo

r time

not served during the

performance

period (

e.g.

in retirement situatons

)

en spe

cif

c cri

tera a

re met

No change

Why

This p

rovis

on is be

ing ret

aine

d to prov

ide th

e Com

mitte

ﬂex

iblit

, i

f the sp

ecif

c cr

iter

a set o

ut in th

e fu

ll poli

cy on p

age 165 a

met

, to en

able s

moo

th lea

der

ship t

ransi

ton an

d to ret

ain alig

nment

of th

e ret

irng exe

cuti

ves wi

th the l

ong-t

erm in

tere

sts o

f the G

roup

and shareholders.

146

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Directors’ remuneration

rep

ort

emuner

ati

gnment

How does re

munera

tion for ou

r e

xecu

tive directo

rs align wit

h ourstr

ategy

Remun

erati

on deci

sons m

ade acro

ss th

e Grou

p and by the C

ommi

ttee al

ign wit

h our str

ateg

y and St

ands

, our sta

kehold

ers’

inte

rest

s in our d

eliver

y of lo

ng-ter

m susta

inable va

lue and w

ith th

e wider wo

rkf

orce in lin

e with t

he pri

ncples s

et out i

n our

Fair Pay Charter.

The t

able b

elow set

s ou

t how we have al

igned t

he mea

sure

s and targ

s in our G

roup ann

ual and l

ong-ter

m ince

ntves w

ith

our s

trate

gy and S

tand

s, and o

ther rewa

rd elem

ent

s that a

chieve fu

rth

er alignm

ent

oup a

nnu

al an

d lon

g-t

erm i

nce

nt

ve perf

orm

anc

e mea

res

Other reward

element

Strategic

priortie

Client

Net

ork

•

Improve cl

ient satisfacton rating

•

liver n

work in

come g

rowth i

n Cor

pora

te, Co

mmerc

ial &

Institu

tonal Banking

•

ow digta

l ventu

res valu

•

ow afﬂu

ent we

alth cli

ent act

ivt

•

get

s in

indvidual

balance

d scorecards

Afﬂuent

Mass

retail

Sustainablit

y and

Stands

•

Pro

gres

s again

st the G

rou

’

s aim to a

chieve n

et zero fo

r 2050

•

Deliver strong pro

gress towards our green and transiton ﬁnance

target

•

Lif

t par

ticp

atio

n of sma

ll busi

nes

ses th

roug

h incre

asng a

cces

s to

ﬁnanc

al ser

vices

•

Sup

por

t comp

anies t

o impr

ove work

ing and e

nviro

nment

al sta

ndard

•

Employee

volunteer

ing

•

Futuremakers

Strategic

enablers

People a

nd culture

•

ive cult

ure o

f innovat

on to ge

nera

te new reve

nues

•

Adopt ne

w ways of working

hat

result in quick

er decison-

making

and deliv

•

Develop huma

n capital

by improv

employee engagement,

diversty and i

ncluson

•

Fair Pa

y Char

ter

•

Livng w

ages

•

Gender pay reporting

•

Salar

y ranges

•

Recogniton

New wa

ys of

work

ing

Inn

ovatio

Shareholder returns

•

perating proﬁt

•

Return on

tangible equi

•

otal

shareholder return

•

All e

mploye

e share

schemes

•

Holding periods

•

Shareholding

requirement

Ris

k and c

ont

rols

•

Imp

rove ef

fect

ivene

ss of r

isk an

d cont

rol gover

nan

•

Successfully deliver m

ilestones with

n the cyber risk management plan

•

Deferral

•

Mal

us and c

lawb

ack

•

Indivdual

per

formance

adjustment

How

es remuneration for our ex

ecutive directors align with shareholder interests?

The d

iagram b

elow

, b

ase

d on the n

ew direct

ors’ r

emune

ratio

n polic

, sh

ows how a po

rtio

n of Bill

’

s s

alar

, a

nnual in

cent

ve and

lon

g-term i

ncent

ve is paid i

n share

s which ar

e relea

sed u

p to eight ye

ars fo

llowin

g grant

, so tha

t the ﬁna

l compo

nent of p

grant

ed in 202

2 is rele

ase

d in 2030. This cre

ates s

trong a

lignme

nt bet

wee

n the in

teres

ts of e

xecuti

ves and sh

areho

lder

s to

cre

ate lon

g-term val

ue. On a m

aximu

m oppo

rtu

nit

y bas

is, Bi

ll’s total re

mune

ratio

n is deli

vered 67 per ce

nt in shar

es (

ncludn

tho

se sub

ject to p

erfo

rman

ce condit

ons

) an

d 33 per ce

nt in cas

Annual

incentve and

TIP shares

are s

ubj

ect t

clawback for

up t

o 10 yea

from grant

20%

202

2023

2024

202

2026

027

2028

029

203

20%

Annual

incentve

sh and

esting based

on performance

asu

red ov

er 3 yea

TIP shares v

pro rata

over y

ear

s 3 to 7 wi

th ad

dit

ona

tent

ion p

eri

od of 1

2 mon

ths

50%

Beneﬁts

Pen

sion

100%

Salar

sh and

100%

10%

50%

lar

y sh

are

s rele

ed pro r

ata ov

er 5 yea

TIP shares

Annual i

ncentve shares

Salar

y shares

Annual incentve

cash

Salar

y cash

20%

147

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

How does re

munera

tion for ou

r e

xecu

tive directo

rs align wit

h the wider workf

orce

r approa

ch to rem

unera

tion is c

onsis

tent fo

r all emp

loyees and i

s desi

gned to c

reate a

lignme

nt with o

ur Fair Pay C

hart

princples w

hich apply globally

Pay st

ruct

ure var

ies acco

rding to l

ocati

on. Th

e table b

elow de

mons

trate

s remun

erati

on alignm

ent be

een th

e executi

dire

ctor

s and ou

r UK work

force, b

eing t

he most r

elevant m

arket

All UK

employees

Executive

directors and

the

Management T

eam

Exe

tive d

ire

cto

rs on

Salar

Pension

Annual incentve

Shareholding

requirement

•

Salar

y i

s a

contractually ﬁx

amo

unt an

d is se

sed o

n role

, skil

and experi

ence.

•

Salar

y i

s revi

ewed

annually agains

relevant market

benchmarks for both

the executive director

and other

employees.

•

The

executive

director

s’ salaries are

pai

d in a com

bina

ton

of ca

sh and s

hare

s to

align with sharehol

der

interests.

•

or UK employees,

sal

y is p

aid 10

0 per

cen

t in cas

h in line w

ith

the mark

et.

•

Pensi

on is se

t at

10 p

er cen

t of sal

for b

oth t

he exe

cuti

director

s and other

UK employees, aligne

wit

h the p

rovi

son

s of

e UK Cor

rate

Gove

rnan

ce Cod

•

In line w

ith t

UK Corporate

Governan

ode,

only salary is

pensionable.

•

Beneﬁts and

incentves are

not pensionable.

•

All UK em

ploye

es are

eligble

for an annual

incentve.

•

Annual

incentves

are b

ase

d on Gr

oup

perfo

rmance

(

measured against

e annu

al Gro

scorecar

indvidu

perfo

rmance.

•

The

same Group

sco

reca

rd is us

ed to

determine incentves

for executive director

and other

employees.

•

Annual

incentves

are subject

to risk

adjustment provisons.

•

IP awar

ds are

gra

nted t

o sen

ior

exec

utives who

ve the ab

ilt

to in

ﬂuence

the

long-term

perfo

rmance of

the Group

•

The gra

nt of a

wards

is dependent on

perfo

rmance in

e year an

d the

ves

ting o

f award

is dependent on

performance over

a thr

ee-year

post

-grant period.

•

ested shares are

subject to

urther

retention periods.

•

IP awar

ds are

subject to

isk

adjustment provisons.

•

Executive director

have a

shareholding

requirement of

0 per ce

nt of s

alar

for t

he CEO a

200 per c

ent for

the CFO.

•

Executive director

ve a pos

employment

sharehol

ding

requirement. Under

the pr

oposed policy

the shareho

lding

requirement will be

ual to t

he f

ull

sharehol

ding

requirement for

wo year

Beneﬁt

Sharesave

•

The cor

e ben

eﬁt

s off

ere

d to exec

uti

ve dire

ctor

and o

the

r UK emp

loyee

s are th

e sam

e: pri

vate

medical insuran

ce,

life assurance, incom

protect

ion, accidental death and disablit

insurance and a cash beneﬁt

s allowance.

•

Exe

cuti

ve dire

ctor

s re

ceive a l

ower ca

sh ben

eﬁt

all

owance t

han o

ther U

K empl

oyees

, as a

percenta

ge of

their salar

•

Exe

cuti

ve dire

ctor

s ha

ve the u

se of a ve

hicle a

iver. This i

s a rol

e-ba

sed p

rovis

on du

e to se

curi

and privacy requirements.

•

The CEO i

s enti

tle

d to a con

trib

uto

n to th

pre

para

tio

n of his an

nual t

ax re

tur

ns owi

ng to

e comp

lexi

ty o

f his t

ax af

fair

s, in p

art d

ue to

travel requirements for Group business.

•

mployees

are eligble

for tax return p

reparation

in th

e year o

f an int

ern

aton

al rel

ocat

ion ow

ing

to t

he com

plex

y of th

eir re

tur

ns in th

ose ye

All U

K empl

oyees a

eligble

to particpate

in th

e Sha

resa

ve pla

which enables

employees

to share

in th

e succ

ess o

f the

oup at a d

isco

unt

share price.

148

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

Directors’ remuneration

rep

ort

The Committee is responsible f

or ov

seeing the r

emuneration

of all e

mployee

s, whi

ch inclu

des de

term

inng th

e fram

ework

and p

olices f

or the r

emune

ratio

n of the G

roup Ch

airm

an,

the e

xecuti

ve direct

ors a

nd oth

er senio

r mana

gemen

The C

ommit

tee al

so over

sees wo

rkf

orce rem

unera

tion an

the a

lignme

nt of reward

, cultu

re and th

e strat

egic pr

ior

ties

e Com

mitt

ee h

as wr

itt

en te

rms o

f ref

eren

ce th

at can

be v

iewe

d at

sc.com/

terms

ofreference

Shareholder v

ing

The t

able b

elow show

s the vot

es cast

at ou

r A

M in May 2021

on th

e 20

20 di

recto

rs’ rem

uner

ation re

por

t. Th

e reso

lutio

n on

the d

irecto

rs’ re

muner

ation p

olic

y at the M

ay 2019 AGM

rec

eived a bi

ndng vot

e in favou

r of 64 p

er cent

For

Agai

nst

Withheld

Adv

isor

y vo

te on t

20 remuneration

report

685,

018

(98

8,508,

938

41%

)

73,691

1 Number of

votes is equal

to number of shares

held

Advice to the C

ommitt

The C

ommit

tee wa

s assi

sted in i

ts co

nside

raton

s by Pw

who wa

s for

mally re

appo

inted by t

he Com

mitte

e as it

rem

unerat

ion ad

vise

r in June 2021 f

ollowi

ng a review o

pot

enti

al adv

isor

s and th

e qualit

y o

f advi

ce recei

ved. It i

the C

ommi

ttee’s pract

ice to un

dert

ake a detai

led rev

iew

of po

tent

ial adv

iser

s ever

y th

ree to fo

ur year

wC is a s

ignato

y to the vo

lunta

y Cod

e of Con

duct in

rel

ation t

o remun

erati

on cons

ultin

g in the UK

. P

wC al

prov

ides pro

fes

sional s

vic

es to th

e Grou

p in the or

dinar

course of business includ

ng assurance, advisor

advice and cer

tain ser

vices relat

ing to Human Resources

The C

ommit

tee co

nside

red P

’

s r

ole as an a

dvi

ser to th

Gro

up and d

eter

mined t

hat th

ere was n

o conﬂict or p

oten

tial

conﬂi

ct arisn

g. The C

ommit

tee is s

atis

fe

d that t

he ad

vice th

Committee rece

es is objectv

e and independen

. The

total

fee p

aid to P

wC (

n an agree

d fee b

asis

) wa

s £137

,450 wh

ich

includes advice to

Committee relating to

executive

directors’ remuneration

and regulator

y matters.

The G

roup C

hief Finan

cal Ofﬁ

cer and G

roup Chi

ef Risk O

fﬁcer

provided the Committee

with regular updates on

ﬁnance

and ri

sk ma

tters

respectively

. The Commi

ttee recogn

ises and

man

ages any co

nﬂict

s of inter

est wh

en rece

ivng v

iews f

rom

executive

directors or senior management on

executive

rem

unerat

ion pro

posa

ls and no i

ndvi

dual is invo

lved in

decidng their own remuneration.

Commi

tee

effectiv

eness rev

iew

Thi

s year the B

oard e

ffe

ctiven

ess rev

iew comp

rise

d an

inte

rnall

y facilt

ated

, quest

ionn

are-ba

sed evalu

ation

for t

he Boa

rd and it

s Com

mitte

es comp

lete

d by ever

Board member

ey obs

ervation

s from t

he 2021 internal

effectiv

eness re

vie

The r

eview ou

tcome

s for th

e Remune

ration C

ommi

ttee,

whi

ch are sum

mari

sed be

low

, wer

e ver

y pos

itve:

•

Mem

ber

s highlgh

ted th

e goo

d proce

ss arou

prep

arati

on for t

he 2022 po

licy vo

te.

•

Members rated the Committee compositon as

strong with a

good understanding of remuneration.

The C

ommit

tee we

lcome

s the ad

diton of M

aria Ram

and the

ls and experience

she brings.

•

Info

rmat

ion re

ceived by t

he Com

mitte

e is con

sidere

clear and comprehensive

. Meetings are considered

ﬁcent and p

roact

ively m

anage

d wit

h well-str

uct

ured

agendas.

•

Management incentves are

considered well aligned

wit

h the G

roup

’s strat

egic ai

ms and inves

tor

expecta

tions, with m

etrics c

learly deﬁn

ed and

measurable.

202

2 Actio

n Plan

The 202

2 Action Pl

an for th

e Comm

itte

e reﬂect

suggestions from the ev

aluation and continues to

build

on th

e fur

the

r progre

ss ma

de last ye

ar:

•

Impl

emen

t the 2022 d

irecto

rs’ re

muner

ation p

olic

y for

executive director

•

Con

tinue t

o review t

he impl

emen

taton o

f the G

roup

’s

Fair Pay Charter and alignme

nt of w

ork

force polices

and pr

actice

s with i

ts pr

incpl

es.

•

Mon

itor ma

rket tre

nds to en

sure t

hat th

e Grou

’

rem

unerat

ion rem

ains co

mpet

itve, in t

he cont

ext of

impro

vng performance and

productivt

•

Con

tinue t

o ass

ess t

he alignm

ent be

twe

en Gr

oup

ince

ntves a

nd the d

eliver

y o

f the st

rateg

y and ou

desired performance-or

ientated, inno

vatve culture,

underpinned b

y conduct a

nd sustainab

lit

•

Over

see compliance wit

h the PRA and Financal

Conduct Authority (FCA)

remuneration rules, includng

applicable elements of the Capital

Requirement



•

Con

side

r jont hor

izon-s

cannin

g sess

ions w

ith the

Culture an

d Sustainablit

y Committe

The R

emuner

ati

Committee

149

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

mmit

e act

iv

tie

s in th

e year

-Jan

01-Feb

28-Jul

-Oct

9-N

Executive

dire

ctors’ remuneration

Revie

w of the di

rect

ors’ r

emun

erati

on po

licy a

nd impl

emen

tato

Fixed a

nd vari

able re

mune

ratio

Senior management remuneration

Recruitme

nt and terminaton

Fixed a

nd vari

able re

mune

ratio

All emplo

yee remuneration

Group-wide discr

etonary incentves

tcom

es fro

m the an

nual p

erfo

rma

nce and r

eward rev

iew

Incentive

perform

anc

e measures, targets and outc

omes

oup-w

ide rewa

rd, th

e Fair Pay Ch

art

er and ge

nder p

ay ga

Rew

ard governance

Consideraton of

risk

, c

ontrol and conduct

matters

Ide

ntif

ca

tion o

f mate

rial r

isk ta

kers

Engagement with

stakeholders a

nd regulatory

, in

vestor and polit

cal matters

The C

ommit

tee h

eld an ad

diton

al strat

egy m

eetin

g to dis

cuss t

he Gro

’

s a

pproa

ch to com

pens

ation co

s and the i

mpact o

UK/EU r

emuneration rules on competit

on for talent with domestic banks not

subject to the same regulatory requirements

The C

ommit

tee d

ealt wi

th cer

tain les

s mate

rial m

atter

s on an a

d hoc ba

sis th

rough em

ail circu

laton

Under

standin

g the views of our workfor

The Committee recognises the i

ortance of

eking

feedback from colleagues on

remuneration to inform decis

on-

making. This y

, 92

per cent of colleagues r

esponded to the Group

’

s engagement sur

, which sought to

under

stand

coll

eagu

e senti

ment in r

espe

ct of reward

, ﬂexibl

e work

ing and we

llbein

g. Key insght

s were p

resen

ted to t

he Com

mitte

for di

scus

son, an

d resul

ts wer

e share

d with t

he work

force a

long w

ith a sum

mar

y of act

ions b

eing t

aken.

The B

oard e

ngage

s with an

d liste

ns to th

e view

s of empl

oyees. In 2021

, six int

eract

ve enga

geme

nt ses

sions t

ook pl

ace

virtually

, with particpation from

more than 2,600 colleagues. A ra

of people-related topics were d

iscussed, includng

new wa

ys of wor

king

, diver

st

y and inc

luson

, remun

erati

on and wor

-lif

e balan

ce.

Further informaton

on our w

orkforce engagement framew

k is

included in our Culture and

Sustainablity Committee

rep

ort on p

ages 13

0 to 132.

150

Standard Chartered

– Ann

ual Re

por

t 2021

Directors’ report

Directors’ remuneration

rep

ort

Our Fair Pay Char

ter

As we n

avig

ate new wa

ys of wor

king

, our Fai

r Pay Char

ter

enables us to

continue to build a

culture of s

ustainable hig

per

for

mance w

here ever

ne can be a

t their b

est and f

eel

their contr

ibutons are fairl

y rew

arded.

r Fair Pay Cha

rter p

rincp

les gui

de per

form

ance and r

eward

dec

ison-ma

king gl

oball

y and cont

inue to b

e our co

mpas

s in

devel

oping a rewa

rd strat

egy t

hat res

pond

s to coll

eagu

es’

changing

needs

In Feb

ruar

y 202

2 we pub

lish ou

r third Fai

r Pay Repor

t whic

exp

lains h

ow our reward p

racti

ces cur

rentl

y meet o

princples a

summar

ises pr

gress made

to enhance

alignment in 2021.

Pro

gres

s aga

ins

t the Fai

r Pay Cha

rte

r in 2021

e are p

roud of t

he pro

gress w

e have ma

de again

st the

pri

ncple

s of our Ch

arte

r since it

s lau

nch in 2018

Impl

emen

tatio

n contin

ues as n

ew ways o

f worki

ng evolve;

wor

k in 20

1 has b

een in th

e follow

ing are

as:

•

On an an

nual b

asis we co

mplet

e assu

rance ac

tivt

y t

ens

ure th

at all colle

ague

s are pai

d a livn

g wage, as

asure

d by the be

nchma

rks i

n place t

hroug

h our wor

wit

h the Fair Wage Net

wor

•

e ha

ve taken int

ial step

s to inte

grate f

air pay i

nto our

sup

ply cha

in, whi

ch is a mult

i-year und

erta

king. T

his year

we publishe

d the Standard Chart

ered Supplier Char

ter

whi

ch set

s out h

ow suppli

ers ca

n develop t

heir

understanding o

f liv

ng wages

and encourages

the

adoption of fai

r pay practices.

•

In so

me mar

kets th

at were a

cutel

y impac

ted by th

pan

demic d

urin

g 20

1, such a

s India

, the Philp

pines

, Sri

Lanka, Ni

gera an

d Zimba

bwe, we provid

ed add

itona

ﬁnanc

al assis

tance to

employees, i

ncludng acc

ess to

incr

ease

d credi

t facilt

ies.

•

ring th

e pand

emic

, we have rai

sed limt

s on m

edical

ben

eﬁts i

n several m

arket

s in As

ia and Af

rica an

d the

Middle E

ast to supplement state c

overage

for CO

VID-

tre

atme

nt, an

d procu

re vaccine

s for col

leagu

es and t

heir

dependent

s i

n suppor

t of

government

-led intiatves.

•

o improve th

e trans

paren

cy an

d fairn

ess of ﬁ

xed pay

decison-

making, we provide

people leaders with Group-

wid

e prin

cples gu

ided by ma

rket dat

a and sal

y range

e ha

ve conti

nued t

o expan

d the covera

ge of sa

lar

rang

es in 2021, up t

o 7

6 per ce

nt. Th

is redu

ces th

e pote

ntial

sk of bia

s by shift

ng focu

s away f

rom an in

dvid

ual’s pas

or current compensation.

•

e con

tinue t

o improve co

nsist

enc

y in our b

eneﬁt

approach for

colleagues across 50 markets. Flexible

ben

eﬁts wa

s laun

ched in M

alay

sia in Mar

ch 2021,

enab

ling gre

ater f

ree

dom of ch

oice ba

sed on i

ndvi

dual

circumstan

ces.

Fair Pa

y Cha

rter p

rinc

ple

e com

mit to pa

y a livn

g wage in all o

ur mar

kets

and s

eek to g

o beyond co

mplian

ce with m

inmum

wage requirement

e prov

ide an ap

propr

iate mi

x of ﬁxed an

d variab

y and a core l

evel of be

neﬁt

s to ensu

re a minmu

level o

f earni

ngs and s

ecur

y to coll

eagu

es and to

reﬂe

ct the G

roup

’s comm

itmen

t to wellbe

ing.

e su

ppor

t colle

ague

s in work

ing ﬂexi

bly

, in wa

that bala

nce both bus

iness needs and their

ersonal

circ

umstances, and

provide c

olleagues with

the

opportunit

y to select

combinaton and le

vel of

ben

eﬁts t

hat is r

ight fo

r them

Pay is we

ll admin

stere

d with co

llea

gues p

aid

accu

ratel

, on tim

e and in a wa

y that is c

onvenient

for them.

e prov

ide a com

peti

tve tot

al ﬁxed and va

riabl

y oppo

rtun

y that e

nable

s us to att

ract

, moti

vate

and re

tain col

leag

ues ba

sed on m

arket ra

tes for t

heir

rol

e, locat

ion, p

erfo

rman

ce, skil

ls and ex

peri

ence.

The s

tru

cture o

f pay an

d bene

ﬁts is c

onsis

tent fo

coll

eagu

es bas

ed on th

eir loc

ation an

d role, w

ith a

clear rationale for exceptions.

e are co

mmitt

ed to rewa

rding co

lleag

ues in a wa

tha

t is fre

e fro

m discr

minat

on on the b

asis o

dive

rst

, a

s set ou

t in our G

roup Co

de of C

onduc

e en

sure pa

y deci

sons re

ﬂect th

e perf

orm

ance

of th

e indv

idual

, the bu

sines

s they wor

k in and

the G

roup, an

d reco

gnise t

he pot

entia

l, condu

ct,

beh

avio

urs a

nd value

s demo

nstra

ted by ea

indvidu

al.

e se

t clear e

xpec

tatio

ns for h

ow collea

gues a

rewar

ded and the princ

ples guidng dec

isons,

includ

ng clear personal obj

ectves

and feedback.

e prov

ide cle

ar comm

unicat

on of pa

y and

per

for

mance d

ecison

s, an

d seek f

eedb

ack and in

put

from colleagues on our

y s

tructures and outcomes.

oup

wide remuner

ation in 20

151

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

A bank fo

r the new econo

Flexible w

orkin

e are f

ocuse

d on how we a

dapt and r

emain f

utu

re-re

ady

in res

pons

e to th

e evolvin

g natu

re of wor

k and chan

ging

exp

ectat

ions f

rom cli

ent

s and coll

eagu

es. In 2020, we

committed to implementng a

hybrid working approach,

comb

inng vir

tua

l and of

ﬁce-ba

sed wor

king w

ith gre

ater

ﬂexiblit

y in working patt

erns and locatio

ns, balancing

colleague preference and

business demands.

As we e

merge f

rom th

e pand

emic

, the of

ﬁce is be

comin

g a

spa

ce whe

re we will go t

o conne

ct, co

llabo

rate, inn

ovate and

lea

rn wit

h othe

rs – cli

ent

s and coll

eagu

es alike. At th

e root of

the

se chan

ges is a

n appet

ite for a

uton

omy

, ﬂexi

blit

y and

choice.

e are

ransforming

aces

into communites

curated

to enhanc

e business performance,

connectivt

coll

abora

tion an

d wellbei

ng. W

e ha

ve also cr

eate

d a Near

Home solution to imple

ment colleagues’

hybrid working

arrangements, givng

choices about when,

where and ho

we wor

Driven by

continuaton of pandemic

-related restrictons

and by ou

r new ﬂex

ible wor

king in

tiat

ve, base

d on th

e result

of th

e 20

1 My V

oice s

vey

, 42 per c

ent of col

leag

ues were

wor

king f

ully f

rom ho

me, 26 pe

r cent f

ully f

rom the o

fﬁce,

and 32 pe

r cent a com

binat

on of ho

me and of

ﬁce (hybr

id).

In 2021, o

ur ﬂexi-wor

king m

odel we

nt live in 28 m

arket

73 p

er cent o

f collea

gues i

n thes

e market

s agre

ed fo

rmal

ﬂexi-wo

rkin

g arran

gemen

. The G

roup

’s remai

nng coun

trie

will t

ransi

ton over 202

2 and 2023.

e continue

to monitor feedback received and

provide

sup

port t

o colle

ague

s worki

ng bot

h in the o

fﬁce, at h

ome,

or bo

th. Pl

ans are in p

lace to co

llect in

sght

s fro

m the

programme in

order to support leadership decisons. T

ide

ntf

y way

s to work m

ore ef

fect

ively, insght

s will b

e sou

ght

to un

der

stand h

ow work is b

eing p

erfo

rmed i

n the new hy

brid

wor

ld and wh

ethe

r there i

s a corr

elati

on with p

erf

orman

ce,

productivt

eople and

culture.

Redeﬁnng performance

managem

ent

Siml

ar to las

t year

, t

here wa

s no for

mulaic l

ink bet

perf

ormance rating

s and annual incentve outcome

s for

colleagues. People leaders continued

to have the

ﬂexiblity to

adju

st out

comes f

or indv

idua

ls wit

h ver

y stro

ng per

form

ance

and fo

r indv

idual

s whos

e per

form

ance fe

ll shor

t of

expectations, with management revie

of decisons for

fairness and

consistency

As we c

ontin

ue to tra

nsfor

m the G

roup t

o achieve ou

str

ategi

c ambito

ns, we ar

e makin

g chang

es to th

e way

we man

age and r

ecogn

ise pe

rfor

mance i

n 20

2, t

o help

cre

ate the c

ultur

e nee

ded for s

ucces

s. Ou

r new appr

oach

to performance and talent

management hinges upon

continuous performance con

vers

ations

and will furth

support our princple

of clear communicaton

of expectations

and re

gula

, rea

l-time fe

edb

ack. We will pla

ce great

emphasis on recognisng

utperformance driven by

collaboration a

nd innovaton,

encourage more ﬂexibl

and aspiraton dur

ing goal sett

ing and remove indvidual

per

for

mance ra

ting

s. Dur

ing 2021, we p

ilote

d facet

s of o

new approach

with a population of ﬁrst adopters, which

help

ed us r

eﬁne the d

esign a

nd impl

ement

aton

Upskillng/

skillng

In to

day

’

s rap

idly cha

nging wo

rld, we wan

t to buil

d a

workforce for

the future by enabli

ng colleagues to dev

elop

the

ir skill

s and th

eir own car

eer pa

th in a mor

e trans

paren

agil

e and incl

usve wa

. T

o e

nable t

his, we h

ave be

exper

imentng with an inter

nal virtual m

arketplace where

colleagues can

connect skills, experience and aspira

tons

with suitable

short

-term, on-

he-

job learning opportunites,

cre

ating p

ossi

blites f

or ups

killng an

d resk

illng. W

e will r

oll

out o

ur inte

rnal v

irt

ual tale

nt mar

ketpla

ce to the r

est of t

Gro

up in 2022

ellbeing

r ambito

n is to cre

ate a wor

kpla

ce and cul

ture t

hat has a

positve impac

t on col

ague w

ellbeing, enabling col

agues

to ma

nage th

eir wellb

eing pr

oacti

vely an

d brin

g their b

est

sel

ves to wor

Init

ative

s launc

hed in t

he ﬁrs

t year of ou

r thre

e-year wellb

eing

str

ateg

y have st

arte

d to have a p

osit

ve impac

t. Th

e numbe

of col

leag

ues exp

erie

ncng a hig

h level of wor

-re

lated s

tres

red

uced b

ween 2019 an

d 20

20, an

d near

ly thr

ee-q

uart

ers

of all

colleagues feel comfortable sharing these concerns

with their people leaders. T

o understand more about the

caus

e of wor

-rel

ated st

ress

, we intr

oduce

d new qu

estio

into t

he 2021 eng

ageme

nt sur

vey

, e

nablin

g us to ta

e f

urth

meaningf

ul action.

In 2021 the f

ollowi

ng wellb

eing int

iatve

s were pro

gress

ed:

•

Laun

ch of Men

tal W

ell

being Phi

losop

hy and As

pirato

ns,

to underpin our

three-year

wellbeing strategy

, to support

colleagues in

developi

skills needed for the future,

(

.g.

build

ng resilenc

e, supporting others and

inclusv

leadership

)

•

Embed

ding Unmind, a digtal applicaton and platfor

that enabl

es col

leagues to

assess their w

ellbeing needs

and receive per

sonalise

d recommendat

ions and coaching

on sim

ple st

eps to deve

lop he

althie

r habit

•

Partner

ing with clincal psychiatrst

s and psycholo

gists

to la

unch th

e Build

ng Resilen

ce prog

ramme, h

elpin

colleagues to understand the neurosc

ience of c

ommon

men

tal he

alth is

sues

, teac

hing how t

o build re

silen

ce to

cope with disrupton

and rapid

change.

•

xpan

sion o

f the men

tal he

alth ﬁr

st aide

r (MHF

pro

gramme

, increa

sng th

e numb

er of tra

ined MH

to of

fer in-

count

y coverag

e to 98 per ce

nt of th

our colleagues.

•

Launch of

ellbeing Ex

periments to spark fun, incluson

and co

llabo

ratio

n around we

llbein

g at tea

m level. Th

exp

erim

ent

s align wi

th our fo

cus on p

reventat

ive and

pro

active we

llbein

g supp

ort in o

rder to cr

eate h

ealth

ier

and m

ore sus

tainab

le habit

s fo

r the f

utur

•

ivng l

ocal int

iatves t

hrou

gh W

ellb

eing W

eks in

countries and region

e are i

ncrea

sng th

e promin

ence of we

llbein

g fur

the

r in

2022 w

ith an em

phasi

s on ﬁnan

cal wellbe

ing inti

atves

Priorties include

encouraging uptake

amongst colleagues of

new an

d exist

ng wellb

eing pro

gramm

es; fu

rth

er liste

nng and

asure

ment of i

ntiat

ves thro

ugh fe

edba

ck chann

els; and

increased

locali

saton to maxi

mse effectiveness

in countries

and region

152

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

Directors’ remuneration

rep

ort

Director

’ remuner

ation in 20

Thi

s secti

on, wh

ich is sub

ject to an a

dvi

sor

y vot

e at the 202

AGM, se

ts o

ut how rem

unera

tion was d

eliver

ed to th

execu

tive dir

ector

s in 2021 und

er the re

mune

ration p

olic

appr

oved by share

hold

ers in 2019

. I

t also se

ts o

ut the 2021

fee

s paid t

o the Gr

oup Cha

irman a

nd the in

depe

ndent

non-executiv

e directors (INEDs

Annual in

centve awards for t

he ex

cutive

directo

(

dited)

Ann

ual ince

ntve awa

rds for e

xecuti

ve direct

ors ar

e base

d on

the assessment

of the Group sco

recard and

an assessment

of in

dvidu

al per

form

ance. T

he Gro

up scor

ecard is u

sed fo

all eli

gble employ

ees, includng the

executive directors, to

main

tan align

ment an

d a share

d sens

e of pur

pos

For Bi

ll and An

, th

e Comm

ittee c

onsid

ered G

roup

perf

ormance, indvid

ual perfor

mance, and risk

, control and

cond

uct

-rela

ted ma

tter

s (

wit

h input f

rom Ris

k and ot

her

control functions

)

. The Committee follows a three-step

process for determinng annual

incentve awards.

Consider eligbilty:

e Comm

ittee c

onsid

ered t

hat ea

dire

ctor ha

d exhibt

ed an app

ropr

iate level o

f condu

ct and

was de

eme

d to have m

et the ga

teway re

quire

ment to b

eligble for an incentve.

Evalu

ate p

erfo

rman

ce aga

inst t

he G

roup’s scor

ecar

The G

roup r

epor

ted s

tead

y progr

ess ag

ainst b

oth ﬁna

ncal

and strategic measu

res in

he scorecard, demonstrating

resil

ent performance throug

hout 2

021 despite

a challengi

bac

kdrop. Und

erly

ing pro

ﬁt befor

e tax is u

p 55 per cen

t on

2020

, help

ed by low leve

ls of cre

dit imp

armen

t and st

rong

und

erly

ing bu

sines

s mom

entu

m. Ro

E is up 30

0 basi

s point

to 6

.0 per cent a

nd the G

roup

’s capit

al remai

ns stro

ng, w

ith

the C

1 ratio a

t 14.

1 per c

ent, d

emon

strat

ing res

ilence. Fu

det

ails of t

he scor

ecard o

utcom

e can be se

en on pa

ge 145.

3. A

sse

ss pe

rso

nal pe

rfor

manc

e and ﬁn

als

e award

out

lined i

n the po

licy, the Co

mmitt

ee can make an u

pwards

or dow

nwards adj

ustm

ent to th

e score

card ou

tcome f

per

son

al per

form

ance (

ually in t

he rang

e of +

- 1

0 per

cent

consi

stent with

he a

pproach for other emplo

yees

who are eli

gble to be considered

for discretonar

incentves. When considerng

whether such an adjustment

is appropriate, the Committee considers areas of

responsiblity together with progress against

key objectv

for t

he year an

d per

sonal c

ontr

ibuto

n to the G

roup

score

card outcome.

ses

sme

nt of p

erso

nal p

erfo

rman

ce and ﬁn

als

ed awar

Bill W

inter

A sum

mar

y of key ach

ievement

s ag

ainst Bi

ll’s per

sonal

obje

ctves i

s set ou

t as foll

ows:

•

Throughout

the chal

lenging circ

umstances of 2

021, Bill

has

demonstrated exc

eptional leadership,

avigatng

the

Gro

up and it

s coll

eagu

es thr

ough th

is unce

rtain p

erio

wit

h skill an

d dete

rmin

aton.

•

Bill h

as deli

vered s

tead

y progr

ess on ﬁn

ancal p

erfo

rman

ce,

alth

ough it i

s note

d that t

here is t

he ne

ed to con

tinue t

impr

ove the Ro

TE to achieve a s

ignﬁcant

ly bet

ter valu

ation

Thi

s shoul

d be acco

mpani

ed by fu

rth

er stre

ngthe

ning of t

Gro

’s risk an

d contr

ol fram

ework in l

ight of th

e evolv

ing

landscap

•

Bill r

emain

s commit

ted to t

he achi

evement o

f the G

roup

’s

ambi

tous m

edium an

d long-t

erm go

als; a key pri

ort

y for

Bill d

urin

g 20

1 has be

en deli

ver

y aga

inst th

e strat

egic

pri

orti

es. Pro

gres

s has be

en mad

e in push

ing for

war

d the

age

nda on o

ur Stan

ds and s

ettin

g the ro

admap fo

achi

evng ou

r net zero am

biton

•

Bill con

tinues to drive

innovaton

and colla

boration, ensuring

tha

t new ways o

f work

ing are b

ecomin

g gradu

ally

embedded across the organisat

on to support this.

•

ring 2021, B

ill has b

een fo

cuse

d on stre

ngth

ening t

Man

ageme

nt T

eam thro

ugh key str

ategi

c hires

•

Bill consistently

role-models our v

alued behav

iours in

his

inte

racto

ns wit

h the Man

agem

ent T

eam and B

oard

His t

ransp

arenc

y and loyal

ty i

nspre a s

hared s

ense o

purp

ose and vison durin

g challenging times

The C

ommit

tee d

eter

mined t

hat nei

ther an u

pwards no

downwar

ds adju

stme

nt to the ove

rall Gro

up sco

recard

out

come wa

s approp

riate f

or 2021. Bil

l’s annual in

cent

ve is

align

ed wit

h the G

roup s

coreca

rd outco

me at 57 p

er cent o

the m

axim

um opp

ort

unit

, wh

ich equ

ates t

o £1,188

,792 an

d is

6 per cen

t of ﬁxed pa

y (15 per c

ent in 2020 and 4

4 per ce

n 2

9).

And

y Half

ord

A sum

mar

y of key ach

ievement

s ag

ainst A

ndy

’

s pe

rso

nal

obje

ctves i

s set ou

t as foll

ows:

•

And

y has pl

ayed an i

nstr

umen

tal par

t in achi

evng st

eady

pro

gress a

cros

s a range of ﬁ

nancal an

d strat

egic o

bject

ves

whi

ch has in t

urn en

able

d the Gr

oup to de

mons

trate

resilent performance despite continu

ng adverse

operational and

economic challe

nges.

•

And

y has b

een key to th

e deli

ver

y of new wa

ys of wor

king

enab

ling ou

r drive f

or prod

ucti

vt

y by improv

ng the

nchro

nisat

on of ﬁnan

cals wi

th the co

ncept o

f client

centred end-to-end processes.

•

Andy continues to

demonstrate strong leadership in

res

tru

ctur

ing of th

e Grou

’

s l

egal en

tite

s and the d

eliver

y o

a radi

cal chan

ge progr

amme w

ithn th

e Proper

y fun

ction

•

Andy has supported str

uctural i

mprovements in T

reasur

management with further work planned.

•

And

y has b

een a gre

at par

tner t

o the Ma

nagem

ent T

eam,

pro

vidng ba

lanced perspec

tives acr

oss strategy

inv

estment, productiv

y and

transformati

on in

tiatves.

Andy consistently demonstrates objectvit

, transparency

and integr

ty

•

And

y will co

ntinu

e to reﬁne o

ur dialo

gue w

ith stake

holde

to ef

fect

ivel

y commun

icate o

ur strat

egy an

d execut

ion

pro

gress

. Con

sist

ent wit

h that

, And

y will con

tinue t

evolve in

tern

al per

form

ance me

asur

es to alig

n with o

strategic prior

ties.

The Committee considered Andy’s performance against his

key obje

ctves in t

he year an

d area

s for fu

rth

er improve

ment

det

ermin

ng that n

eith

er an upward

s nor dow

nwards

adju

stme

nt to th

e overall Gr

oup sco

recard o

utcom

e was

appropriate for 2

021. Andy

’

s annual i

centv

e is 57 per cent of

the m

axim

um opp

ort

unit

, wh

ich equ

ates t

o £759

924 and i

6 per cen

t of ﬁxed pa

y (15 per c

ent in 2020 and 4

4 per ce

n 2

9).

153

Standard Chartered

– Annu

al Repo

rt 2021

Directors’ report

ses

sme

nt of t

he 2021 G

rou

p scor

ecar

Financal

measures

eightng

Threshold (

)

Maximu

(

100%

)

Achie

vement

utcome

Income

$15.8bn

$14.5bn

$15.

1bn

$14.7bn

Costs

10%

$10.

0 bn

$10.8bn

$10.4bn

$10.3bn

Operating proﬁt

$3.5bn

.9 b

$3.

2bn

wit

h a CE

underpin

of t

he hig

her o

f 13% or t

minmum regulatory

requirement

20%

4.7%

3.8%

.3%

6.0

20%

Growth of high-qu

ality

liablites

$15.

9bn

$5.

3bn

$10.6bn

$19

9bn

Other strategi

measures

5,6

eightng

Assessment of achiev

ement

Outcome

Client

afﬂuent, mass

)

10%

•

Improve client

satisfacton rating

•

Deliver growt

h in

ualifed clien

acr

oss Pr

ivate B

anki

ng, Pr

ior

Banking and Premium Bank

ing,

and Wealth M

anag

emen

t acti

vt

acr

oss to

p 11 afﬂ

uent co

untr

ies

•

Deliver network income

growth

in Co

rpo

rate, C

omm

ercial &

Institu

tonal Banking

•

liver cl

ient gr

owth in key

digtal

par

tnerships, platforms

and technolog

ies

•

Client sa

tisfacton

targets exceeded ac

ros

all segments

•

ﬂuen

t growt

h sligh

tly b

ehind t

arge

t due to s

lower

grow

th in as

set

s un

der man

agem

ent an

d W

eal

Man

agem

ent ac

tive cli

ent

s in Hon

g Kong and T

wan

•

Slo

w Net

wor

k incom

e growt

h desp

ite pip

elne d

eals

and tactic

al actions

adopted to deepen network

opportunites

•

rong cl

ient gr

owth in d

igtal b

anki

ng inti

atve

s in

Hon

g Kong and A

ica of

et by del

ays wi

th lau

nch

of the Nexus

e-commerce platform

Sustain

ablity

10%

•

Progress again

st our P

Agreement cl

ient commitment

•

Reduce a

nd off

set emisson

was

te fro

m ﬂight

s, p

rope

rtie

and suppliers

•

Established the methodology and ta

rget

s to

suppor

t our

pat

h to ne

t zero by 2050

•

Strong performance in

emisson reduction largely

driven

by the i

mpac

t of CO

VID

19 res

tri

cton

s on ﬂight a

propert

y emissons

Enabler

ovat

on

new ways o

working and

15%

•

rive cu

ltur

e of inn

ovaton t

generate ne

w revenues

•

Adop

t new way

s of wor

king t

hat

result in

quicker decis

on-making

and deliv

•

Deve

lop hu

man capi

tal by

improvng

employee engagement

and div

s

y and i

ncluson

•

Inn

ovatio

n targe

ts exc

eede

d pri

marl

y due to s

ucce

ssf

partnerships (

.g. Ali P

, Asia Miles

)

, and ne

w business

proof of c

oncept

•

New w

ays of w

orking and di

gtal adoption targets

exc

eeded, includ

ng the

successful roll-out of

the client

onb

oard

ing po

rtal

, Chat

bot an

d Digta

l Clien

t Ass

ist

•

Emp

loyee ne

t prom

oter a

nd incl

uson m

etr

ics re

duce

d in

21 following

the strong outcomes

in 20

20 during the

onset of the

pandemic

•

nior fe

male d

iver

st

y of 30.7

%, ah

ead o

f the

30% target

12%

Ris

k and

controls

15%

•

ainta

n eff

ecti

ve ris

k and con

trol

gove

rnance

•

Successfully deliver m

ilestones

wit

hn the c

er ri

sk man

agem

ent

plan

•

Fur

ther i

mprovem

ent re

quir

ed on ti

meln

ess of r

isk

tre

atm

ent pla

ns and r

elat

ed ri

sk red

uctio

•

od pr

ogres

s in c

yber r

isk r

educ

tion

, but so

me del

ays

in ach

ievng planned

milestones

00%

ota

l scorecard

assessment

The Committee

considered carefully risk, c

ontrol and

conduct matters, revie

wng material issues

and ﬁnes, includ

ng the penalty

rec

eived f

rom t

he PR

A in res

pect o

f liqud

y repo

rtin

g iss

ues

. Cons

ider

ng all f

actor

s, t

he Co

mmitt

ee de

term

ined t

hat a re

duct

ion

of 7 p

ercen

tage p

oint

s was ap

propr

iate

, resu

lting i

n an out

come o

f 57% fo

r the pu

rpo

ses of d

iscr

eton

y ince

ntve

Fin

al Gr

oup s

core

car

d out

come f

or de

ter

minn

g ann

ual in

cent

ves f

or execu

tive di

rec

tor

s and ot

r empl

57%

al in

come a

nd op

era

ting p

roﬁt a

re on a

n unde

yin

g bas

is. C

ert

ain i

tem

s are pr

ese

nte

d as re

str

uct

uri

ng an

d oth

er ite

ms th

at ar

e exclu

d fro

m the u

nder

ing

sult

s of t

he Gr

oup

. The

se are i

nco

me, co

s and im

par

men

t and r

esu

ltin

g ope

rat

ing pr

oﬁt re

lat

ing t

o iden

tﬁa

ble b

usin

ess u

nit

s, p

rod

uct

s or po

foli

os fr

om th

levan

t dat

es th

at th

ey have b

n appr

oved f

or res

uct

uri

ng, d

isp

osal

, win

d-do

wn or r

edu

ndan

cy. Thi

s inc

lude

s rea

lis

ed an

d unre

ali

sed g

ain

s and lo

sse

s fr

management’s decis

ons to dispose of

sets, as w

ell as residual i

come

, direct

cost

and imparment of

related legacy asset

of those identﬁable

business units,

pro

cts o

r por

tfo

lio

s. Se

e Not

e 2 pa

ge 318

der

lyi

ng Ro

TE r

epre

sen

ts t

he ra

tio o

f the cu

rre

nt ye

ar’s pr

oﬁt av

aila

ble fo

r dis

tr

but

ion to o

rdin

y sh

areh

old

s, to t

he wei

ght

ed ave

rag

e ordi

nar

y s

hare

hol

der

s’

equity less the average

goo

dwill

and intangbles

for the reporting period. Underlying R

TE normally ex

clude

regulator

y ﬁnes

ut, for

remuneration purposes, this

wou

ld be s

ubj

ect to r

evi

ew by th

e Com

mitt

e CE

T1 un

der

pin wa

s dy

nami

call

y set a

t the h

ighe

r of 13 p

er cen

t or th

e min

mum re

lato

y leve

l at 31 De

cem

ber 202

1. In a

ddit

on

, the C

omm

itte

e ha

s the

dis

cre

ton t

o take i

nto a

ccou

nt at t

he en

d of th

e per

for

man

ce pe

rio

d any cha

nge

s in re

gul

ator

y c

apit

al and r

isk-we

ight

ed as

t req

uire

men

ts t

hat mi

ght h

ave

been announced and

implem

ented

after the start of

the perfor

mance

per

iod

Ini

ta

tive t

hat t

arge

ts g

rowt

h of ef

ﬁce

nt an

d reg

ulat

y fr

ien

dly d

epo

sit

s to im

prov

e qual

y of ou

r fu

ndin

g mix (

liab

lit

) t

o sup

por

t the G

’s gr

owth

aspiratons

A max

imu

inm

um pe

rfo

rma

nce th

res

hol

d was s

et for e

ach p

erf

manc

e mea

sur

e. For s

tra

tegi

c mea

sur

es, t

he C

ommi

tte

e use

d it

s jud

gem

ent to d

ete

rmi

orec

ard o

utco

mes w

ith

n thi

s ran

ge (

ith a h

ighe

r tha

n 50 pe

r cent o

utc

ome f

or pe

rfo

rma

nce ab

ove ta

rge

t and a lo

wer th

an 50 p

er cen

t out

com

e for b

elow

target perfo

rmance

)

he Co

mmi

tte

e cons

ide

red t

he pe

rfo

rma

nce a

gain

st th

e ES

G met

ric

s wit

hn th

e peo

ple a

nd pu

rpo

se el

eme

nt of t

he an

nual i

ncen

tv

e scor

eca

rd and 20

19–21 L

rate

gic m

eas

ure

s, as w

ell as t

he G

rou

’s wid

er pr

ogre

ss o

n ESG m

etr

ics

, and d

ete

rmi

ned t

hat t

he ou

tco

mes we

re ap

prop

ria

te an

d that t

he in

cen

tve s

tru

ctu

res

do not

raise ESG risks b

y motivatng irresponsble

behav

iour

154

Standard Chartered

–

nual Re

por

t 2021

Directors’ report

Directors’ remuneration

rep

ort

Performan

ce outcom

e for 2019–21 L

TIP award

s (

audited)

The s

ingle t

otal ﬁgu

re of rem

unera

tion ta

ble show

s that L

TIP a

wards wil

l vest in Mar

ch 2022 wi

th an est

imate

d value of

£696,00

0 and £445

,000 fo

r Bill and A

ndy

, r

espe

ctive

. Th

ese L

TIP awar

ds were gra

nted t

o Bill and A

ndy in 2019 w

ith a fac

value o

f 120 per cen

t of ﬁxed p

, to in

cent

vise t

he cont

inue

d execut

ion of th

e strat

egy over t

he thr

ee-year p

erio

d 2019 to 2021.

The a

wards ar

e share

-base

d and sub

ject to t

he sat

isfact

on of st

retch

ing per

for

mance m

easu

res over thr

ee year

s. T

he cond

uct

gat

eway req

uireme

nt mus

t be met b

efore a

ny awards ves

t. Th

e awards a

re then s

ubjec

t to Ro

TE a

nd rela

tive TSR t

arget

s and

a qua

litat

ve and quan

titat

ve ass

ess

ment of t

he str

ategi

c meas

ures

The C

ommit

tee co

nclud

ed th

at Bill and A

ndy ex

hibte

d appro

priat

e condu

ct dur

ing the p

erfo

rman

ce per

iod and t

here

fore

the c

onduc

t gatewa

y was met

. The t

hresh

old Ro

TE targe

t has no

t been a

chieved an

d the re

lati

ve TSR thre

shol

d target w

ill be

asure

d in March 202

2 but i

s estim

ated n

ot to ha

ve been a

chieved an

d, the

refor

e, ther

e will be n

o vestin

g of the 6

6 per cen

of th

e awards s

ubje

ct to the

se mea

sures

The C

ommit

tee co

nside

red pe

rfor

manc

e again

st the pr

oof po

int

s as set o

ut in the t

able b

elow and de

ter

mined t

hat th

e overall

vest

ing of th

e L

IP would b

e 23 p

er cent

. The t

able be

low set

s out t

he per

for

mance re

quire

d, the 201

9–

21 pe

rfor

manc

e achieved

and t

he L

IP vesti

ng out

come. Th

e share p

rice us

ed to e

stima

te the val

ue of vest

ing of t

he 2019–

1 L

TIP a

wards i

s lower tha

n the

sha

re price o

n the a

ward date o

f £6.

11 and

, there

fore, t

he value at

tri

butab

le to sha

re pric

e growth i

s nil. Th

e value of t

he award

vest

ing is re

duce

d by 25 per c

ent whe

n compa

red wi

th the val

ue at gran

No di

scret

on has b

een app

lied to t

he vest

ing out

come o

f the L

TIP in res

pect o

f perf

orm

ance targ

s or shar

e price m

ovement

The a

wards w

ill vest pro r

ata over 202

2 to 2026 and the sh

ares w

ill be sub

ject to a 12 m

onth r

etent

ion pe

riod p

ost

-vesti

ng.

Malus and clawback p

rovisons

apply

Measure

eightng

Performance for

minmum vesting (25%

)

Performance for

maximum vesting (100%)

Assessment of achie

vement

outcome

in 2021 wi

th a

CET

derpin

One-third

11%

TE 6.0% an

d CET

1 14.1% the

refo

0% vesting

Relative TSR

performance against

peer group

One-third

Medi

Upper quartile

Perform

ance currently est

imated

low med

ian. TS

R perf

orm

ance w

ill

be m

easu

red in M

arch 202

Strategic

measures

ne-third

proved p

erf

orma

nce ag

ainst o

strategic prior

ties

23%

al 2019

–

1 L

IP awar

ds vest

ing o

utc

ome

23%

Strategic

mea

sure

Proof point

Assessment

Deliver our

net

ork and

grow our

afﬂuent

business

Improv

e client satisfacton ra

ing

Client satisfacton

metr

ics

across Corporate, Commerc

ial & Institutonal

anking,

Pri

vate B

ank and Ret

ail Ba

nk have m

et or exce

ede

d targ

ets a

cros

s each ye

ar of

e plan

Del

iver cl

ient gro

wth in t

arget

segments

rpor

ate, C

omme

rcial & In

stit

uto

nal Ba

nkin

g net

wor

k incom

e growt

h and

ﬂuent w

ealth o

utco

mes we

re sligh

tly b

ehind t

arge

ts ac

ross t

he th

ree

year pe

rio

Cap

itals

e on Chin

a opp

ort

unit

includ

ng through renmi

nb a

mainland wealth growth

rong p

erfo

rman

ce in Chi

na wit

h incre

ase

d revenu

e and cli

ent grow

th, a

mai

ntane

d pos

iton a

s the nu

mbe

r one ran

ked for

eign ba

nk for B

ond Co

nne

trading

Deve

lop Af

rica t

hrou

gh digt

growth, increas

ng the number

of cl

ient

s and im

provn

g clien

satisfacton

Har

nes

sing o

f digta

l oppo

rtu

nite

s in Afr

ica ha

s led t

o incre

ase

d clien

t growt

inc

ludn

g the cre

atio

n of mo

bile inves

tme

nt opt

ions f

or mas

s and em

ergin

ﬂuent c

lient

s. C

lient s

atis

fact

on targ

s have b

een ac

hieved

Maintan credit qualit

get

s excee

ded, eva

luat

ed wit

h refe

renc

e to exp

osur

e orign

ate

d over the p

eri

and the

credit quality of ne

w business

and disrup

with digtal

Use partnership, platforms

and technolog

ies to

improve

client experience

Laun

ch of Ne

xus e-

comme

rce pl

atfor

m del

ayed d

ue to th

e impa

ct of COVID-

rong p

erfo

rman

ce in dig

tal ban

king i

ntiat

ves in H

ong Kong a

nd Af

rica

Deliver progres

sion through

grow

th in dig

tal vol

umes

arge

ts me

t for di

gtall

y intia

ted tr

ansa

ctio

ns in Co

rpo

rate, C

omme

rcial &

Ins

titu

ton

al Bank

ing

. T

rget

s excee

ded f

or digt

al sale

s growt

h in Con

sum

Private

& Business Banking

Purpose and

people

Enhance compliance and

ﬁnancal crime complian

controls

Continung

progress made incl

udng

the increased use of

technology

, data

and ana

ytics i

n enhancing effective

and sustainable

ﬁnancal

crime

compliance

controls

Successfully deliver cyber risk

management plan

milestones

od pro

gres

s in c

yber r

isk re

duct

ion

, but so

me del

ays in a

chiev

ng pla

nned

milestones

Deve

lop hum

an capi

tal by

improvng

diverst

, employ

engagement and

culture of

inc

luso

n metr

ics an

d by

deliverng

conduct plans

Emp

loyee ne

t prom

oter a

nd incl

uson m

etr

ics ha

ve incr

eas

ed over th

e per

iod

des

pite a r

educ

tion f

rom 2020 to 2021. S

tron

g prog

ress i

n senio

r fem

ale dive

rst

whi

ch has i

ncre

ased t

o 30.7% i

n 2021

TE w

as ba

sed o

n proﬁ

t att

rib

ute

d to or

dina

y shar

eho

lde

, adju

ste

d, on a t

ax-ef

cted b

asi

s, f

or pro

ﬁts o

r los

ses o

f a cap

ital n

atu

re, re

str

uct

ing ch

arg

es,

amounts consequent to inv

estm

ent

trans

actions

iven

by strategic intent

and infrequent/

exceptional transactions that a

re sign

ﬁcant or material i

n the context

of t

he Gr

oup’s norm

al bu

sin

ess e

arn

ing

s for t

he pe

rio

d. Th

e CET

1 un

der

pin wa

s set a

t the h

ighe

r of 13 p

er cen

t or th

e min

mum re

gul

ato

y level a

s at 31 D

ece

mbe

21 (

taking into

account any

ransit

on rules or material c

hanges in

regulator

y rules

)

155

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Single t

otal ﬁgure o

f remune

ration f

or 20

21 (

audite

The f

ollowi

ng tabl

e set

s out th

e singl

e total ﬁg

ure of re

mune

ration f

or 2021 for th

e CEO and th

e CFO. The sin

gle ﬁgur

e consi

sts

of sa

lar

, pe

nsio

n, ben

eﬁts an

d annua

l incent

ves re

ceivabl

e in resp

ect of 2021 an

d the est

imat

ed value

s of 2019–

1 L

P awards

vest

ing. Th

e L

IP value is b

ase

d on the o

utcom

e of award

s made in 201

9 and doe

s not in

clude t

he for

war

d-look

ing awar

ds to

be m

ade in Mar

ch 2022, i

n resp

ect of 2021 pe

rfor

mance a

nd bas

ed on f

urt

her th

ree-yea

r perf

orma

nce mea

sure

s, due t

o vest

in ear

ly 2025. T

he sin

gle ﬁgur

e for Bill an

d And

y repre

sent

s a year

on-year in

creas

e of 19 and 2

1 per cen

t resp

ecti

vely

, w

hich

par

tiall

y reﬂec

ts th

e impa

ct of the exe

cuti

ve direct

ors’ vol

untar

y wa

iver of t

he cash e

lemen

t of the

ir 20

20 an

nual in

centve

whi

ch redu

ced th

e award by 50 p

er cent

000

Bill Winters

Andy

Halford

2021

2020

2021

2020

Salar

2,3

370

515

1,504

Pension

237

150

Ben

eﬁts

165

107

113

otal

ﬁxed

emuneration

,772

Annual incen

tve award

386

246

ting o

f L

IP award

alu

e of vest

ing a

wards b

ased o

n per

for

mance

696

445

439

alu

e of vest

ing a

wards b

ased o

n shar

e pric

e growt

–

otal

var

iable remuneration

1,885

094

205

Single total

ﬁgure of remuneration

4,657

,452

tes t

o the s

ingle t

ota

l ﬁgur

e of rem

uner

ati

on tab

Salar

•

or execu

tive di

rect

ors p

art of s

alar

y i

s paid in c

ash an

d part i

s paid i

n share

s, to a

lign wi

th shar

ehol

der in

tere

sts

•

e salar

y s

hare

s are sub

ject to a r

eten

tion p

erio

d wit

h 20 per cen

t rele

ase

d annu

ally over a p

eri

od of ﬁve ye

ars

•

e numb

er of sh

ares all

ocat

ed is de

ter

mine

d by the mo

neta

y value an

d the p

revailn

g marke

t price o

f the

mpany

’

s sh

ares o

n the da

te of all

ocat

ion.

•

Bil

l’s salar

y i

s paid 5

0 per cen

t in cas

h and 50 pe

r cent in s

hare

s and An

dy’s sal

y is pai

d 6

7 p

er cen

t in cash a

33 p

er cent i

n share

•

dy’s sala

y was inc

reas

ed th

ree pe

r cent e

ffe

ctive 1 A

pril 2020.

Pension

•

Pens

ion is s

et as a p

ercen

tage o

f salar

y a

nd can b

e delive

red a

s a contr

ibu

ton to t

he UK p

ensi

on fu

nd or pa

id as

a cash allowance.

•

Pens

ion fo

r Bill is d

elive

red as a c

ash all

owance an

d a £4,000 c

ontr

ibut

on to t

he UK pe

nsio

n fun

d, and f

or And

e pens

ion is d

elive

red as a c

ash all

owance.

•

In lin

e wit

h the UK C

orp

orat

e Gover

nanc

e Code

, only s

alar

y i

s pens

ionab

le.

Beneﬁt

•

he cor

e bene

ﬁts p

rovid

ed to exe

cuti

ve direc

tor

s and ot

her UK e

mploye

es are t

he sam

e: priva

te med

ical

insurance, life as

surance, income prote

ction, accidental de

ath and disablit

y insurance and a cash beneﬁt

allowance.

•

xecut

ive dir

ecto

rs re

ceive a lo

wer cash b

eneﬁ

ts all

owance t

han ot

her UK e

mploye

es as a p

ercen

tage o

f thei

sal

. In a

ddito

n, Bil

l has th

e use o

f a vehicl

e and dr

iver. In line w

ith pr

incpl

e six of o

ur Fair Pa

y Char

ter, this i

s a

rol

e-ba

sed pr

oviso

n given t

heir exe

cuti

ve role a

nd the a

sso

ciat

ed sec

urit

y an

d pri

vacy r

equi

reme

nts

•

xecut

ive dir

ecto

rs oc

casio

nally u

se a pr

ivate ve

hicl

e for tra

vellin

g and th

eir pa

rtn

ers m

ay tr

avel to a

ccomp

any

att

enda

nce at B

oard or o

the

r simla

r event

s. Th

e Gro

up cover

s any tax li

ablit

y th

at ari

ses o

n thes

e ben

eﬁts

•

Bil

l is enti

tle

d to a cont

rib

uton t

o the pr

epar

ation o

f his ann

ual ta

x ret

urn

s owing t

o the co

mplex

y of his t

fair

s, in p

art du

e to tra

vel re

quire

ment

s for G

rou

p busi

ness

•

e bene

ﬁts ﬁg

ures r

efer to U

K tax ye

ars 2020

1 and 2019

/20 re

spe

ctive

•

e decre

ase i

n Bill

’

s b

eneﬁt

s ﬁgu

re reﬂe

cts a r

educ

tion in t

he us

e of a vehic

le and dr

iver i

n the 2020

1 tax yea

par

tial

ly of

et by a pa

ymen

t for sa

le of ho

lida

y unde

r our ﬂex

ible b

eneﬁt

s pl

an.

xed

remuneration

•

Fixed r

emun

erat

ion is th

e tot

al of sal

, pe

nsio

n and be

neﬁt

Annual incentve

•

xec

uti

ve direc

tor

s’ annua

l incen

tve aw

ards ar

e deliv

ered 50 p

er cen

t in cash a

nd 50 pe

r cent in s

hare

s, sub

ject t

a minm

um 12 mo

nth re

tent

ion pe

rio

•

e detai

l of how dir

ecto

rs’ an

nual in

cent

ve award

s are de

ter

mined i

s set o

ut on pa

ge 152

. A

rds are s

ubje

ct to

cla

wba

ck for u

p to 10 yea

rs.

•

e execut

ive dir

ector

s ele

cte

d to volu

ntar

ily wai

ve the ca

sh ele

ment o

f their 2020 an

nual in

cent

ve whic

red

uced t

he awa

rd by 50 pe

r cent (£38

6,0

00 for B

ill and £

246

,00

0 for An

tin

g of L

TIP

awa

•

e L

IP award

s grant

ed in M

arch 2019 ar

e due to ve

st in Mar

ch 2022

, bas

ed on p

erfo

rman

ce over th

e year

s 2019

to 2021

. Follow

ing an e

stima

ted a

sse

ssme

nt of th

e per

for

mance m

eas

ures (Ro

TE w

ith CE

T1 u

nder

pin, r

elat

ive TSR

and s

trat

egic m

easu

res

), 23 p

er cent o

f the

se awar

ds are ex

pect

ed to ve

st. T

he ﬁnal a

sse

ssm

ent of r

elati

ve TSR

rfor

manc

e will b

e condu

cted i

n March 202

2, t

he end o

f the th

ree

-year per

for

manc

e per

iod. B

ase

d on a sha

ice of £4.

55, th

e thre

e-mo

nth ave

rage t

o 31 Dec

embe

r 20

1, th

e esti

mate

d value t

o be del

ivere

d is £0.7

m to B

ill

and £0.4m t

o Andy. The ﬁn

al value w

ill be r

esta

ted in t

he 2022 di

rect

ors’ r

emun

erati

on rep

ort b

ase

d on ﬁnal T

rfor

manc

e and th

e share p

rice a

t vesti

ng. Awards a

re subj

ect to m

alus an

d claw

bac

k for up t

o 10 year

s fro

gran

t. Fur

the

r deta

ils on t

he per

for

mance o

utco

me for t

he 2019–21 L

TIP are p

rovide

d on pa

ge 15

•

e value of t

he L

TIP 2019–21 awar

ds vest

ing is r

educ

ed by £

8,00

0 and £

152,0

00 for B

ill and A

ndy, respe

cti

vely

en comp

ared w

ith t

he value a

t grant

. The va

lues o

f the L

TIP 201

8–20 vestin

g award

s for 2020 ha

ve been

res

tate

d bas

ed on t

he act

ual sha

re pri

ce of £5

.03 when t

he awa

rds vest

ed in M

arch 2021.

156

Standard Chartered

– Ann

ual Re

por

t 2021

Directors’ report

Directors’ remuneration

rep

ort

TIP shares

Annual i

ncentve shares

Salar

y shares

Annual incentve

cash

Salar

y cash

Bill Wi

nters’ 2021 sing

le total ﬁgure

of remunerat

ion

Annual

incentve

are a

lso

subject to

clawback

r up to

10 ye

from grant

–

696

202

2021

otal: 4,657

000

202

2024

2025

202

2027

2021 annual

incentve

,18

TIP shares v

pro rata

over y

ear

s 3 to 7 wi

th ad

dit

ona

tent

ion p

eri

od of 1

2 mon

ths

neﬁ

ts 16

Pen

sio

n 237

Salary

370

237

,18

237

165

lar

y sh

are

s rele

ed pro r

ata ov

er 5 yea

ariable

remuneration

Fix

remuneration

594

Executi

ve d

irectors’ shareho

ldings and

share interes

s in

cludng sha

re awa

rds (

audi

ted)

xecut

ive direc

tor

s are requ

ired to h

old a sp

ecif

ed l

evel of sha

res, t

o be buil

t up over a rea

sonab

le tim

e fram

e from t

he date o

app

ointm

ent as an exe

cuti

ve direct

or (

, if l

ater, from t

he date o

f any chang

e to the t

erms o

f the sh

areho

lding re

quire

ment)

Sha

res tha

t count t

owards th

e requi

remen

t are ben

eﬁcally ow

ned sh

ares

, inclu

dng vest

ed shar

e awards s

ubjec

t to a

ret

entio

n peri

od, and u

nveste

d share a

wards for w

hich p

erfor

manc

e condit

ons ha

ve bee

n satis

f

ed (

on a net

-o

-tax b

asis

The s

hareh

oldin

g requi

remen

t for 2021 was ex

press

ed as a p

ercent

age of s

alar

, s

et as 2

50 per ce

nt of sal

y for th

e CEO

and 20

0 per cen

t of salar

y for t

he CFO.

As o

f 31 Dece

mber 2021

, both B

ill and An

dy excee

ded t

heir sh

areho

lding re

quire

ment

. Share

s purch

ase

d volunt

arily f

rom t

heir

own f

und

s are equi

valent t

o 59 and 42 per cen

t of sala

y for Bill a

nd And

, res

pecti

vely

The f

ollowi

ng tabl

e summa

rise

s the exec

utive di

recto

rs’ sh

areho

ldings a

nd shar

e intere

Shares hel

beneﬁcally

1,2,3

Unvested share

awards

not

subject to

performance

measures

(

et of t

ax)

otal

counting

toward

shareholdin

requirement

Shareholdin

requirement as

a percentage

of salar

alary

alue of

counting

toward

shareholdin

requirement as

a percentage

of salar

Unvested share

awards subject

to performance

measures

B Wint

ers

2,03

1,032

166,883

250%

370,00

416%

A Half

ord

8,344

104,

348

942

£1,515,000

279%

ll ﬁgu

res a

re as o

f 31 De

cemb

er 2021

. The

re we

re no ch

ang

es to an

y execu

ve dire

cto

rs’ i

nter

est

s in s

hare

s bet

en 31 D

ece

mbe

r 2021 and 1

6 Feb

rua

y 2022

No d

irec

tor h

as eit

her

: (i) an inte

res

t in com

pany p

ref

eren

ce sh

are

s or lo

an sto

s of any su

bsi

dar

y o

r ass

ocia

ted u

nde

akin

g of th

e Gro

up; or (i) any c

orp

ora

int

ere

s in Co

mpan

y ordi

nar

y sh

are

s. Th

e clo

sing s

har

e pri

ce on 31 D

ece

mbe

r 2021 was £4

.48

e ben

eﬁca

l inte

res

ts o

f dire

cto

rs an

d con

nect

ed p

ers

ons i

n the s

har

es of t

he Co

mpan

y are se

t out a

bove. T

he exe

cut

ive di

rec

tor

s do no

t hav

e any non

neﬁc

al int

ere

s in th

e Com

pany

’s shar

es. N

one o

f the e

xecu

tive d

ire

ctor

s us

ed sh

ares a

s col

late

ral f

or any lo

ans

e sal

y and s

hare

s hel

d ben

eﬁc

ally i

ncl

ude sh

are

s awar

ded t

o del

iver t

he exe

cut

ive di

rect

s’ sal

y sh

ares

s Bill a

nd An

dy are b

oth U

K ta

xpa

yer

s: zero p

er ce

nt ta

x is as

sum

ed to a

ppl

y to Sh

ares

ave (as Sha

res

ave is a U

K tax q

ual

ed sh

are p

lan) and 47 pe

r cent t

ax is

sum

ed to a

ppl

y to ot

her u

nvest

ed sh

are a

ward

s (

rgin

al co

mbin

ed PA

YE rat

e of in

come t

ax at 45 p

er ce

nt an

d empl

oyee N

ati

onal I

nsu

ranc

e con

tri

but

ons a

wo pe

r cent) – ra

tes m

ay ch

ange

157

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

TIP awards fo

r the executive direc

tors to b

grante

d in 20

The s

ize of th

e L

P award ha

s been d

eter

mine

d on Gro

up and

ind

vidu

al perf

orm

ance dur

ing th

e year

. Awards for t

he 2021

per

for

mance ye

ar will b

e grante

d to Bill an

d Andy i

n March

2022 w

ith a valu

e of 120 per ce

nt of ﬁxed p

ay (

3.1 millon an

2.0 millon

, resp

ecti

vely

), the ma

ximu

m amoun

t unde

r the

2019 dire

ctor

s’ remu

nerat

ion pol

icy

. The a

mount t

hat th

execu

tive dir

ector

s will r

eceive a

t the en

d of the t

hree-ye

per

for

mance p

erio

d will be b

ase

d on the l

evel of pe

rfor

mance

achi

eved agai

nst th

e perf

orma

nce me

asure

s and the f

ure

share price.

The p

erf

orman

ce mea

sures a

nd targ

ets a

re aligne

d with o

strategic prior

ties, and we

have also incorporate

d measures

tha

t reﬂect o

ur thr

ee Stan

ds – our l

ong-te

rm ambi

tons o

cietal ch

allen

ges: Accel

eratin

g Zero; Lif

tng Part

icpat

ion;

Resetti

ng Globalisaton.

e are retainng the stand

alone sustainablit

y measu

int

roduc

ed last ye

ar and in

creas

ng the f

ocus on t

he bro

ader

imp

act of clie

nt acti

vt

, rat

her th

an on our i

nter

nal

operati

ons. The sus

tainab

lit

measures

have been

selected

carefully from our broader

range of sustainabl

y aspiratons

sed on t

heir leve

l of impa

ct for th

e Grou

p and wid

er soci

and ab

ilt

y to dri

ve ﬁnancal r

etur

ns in th

e mediu

m term

Details of

the sustainab

lity and other

strategic measures

and t

arget

s are sh

own in th

e table b

elow and a

re discl

osed

pros

pect

ively, except wh

ere the i

nter

nal targ

ets a

considered commercially

ensitve

. Details of achievement

agai

nst tar

get

s will be d

isclo

sed re

trosp

ecti

vely at t

he end

of th

e per

form

ance pe

riod

The Ro

TE tar

get ran

ge for 202

–

24 L

P awards i

s 7 to

11 per c

ent whi

ch retai

ns a 4 per

centag

e poin

t range a

s for the

pri

or year a

ward, bu

t is fur

the

r stret

ched by 1 p

ercent

age po

int

at bo

th the t

hres

hold an

d maxi

mum targ

et level

s. Thi

s reﬂect

the p

rogre

ss in Ro

TE achieve

d in 2021 and ou

r target t

o deli

ver

ret

urn

s above 10 pe

r cent in t

he medi

um ter

The peer group of

companies selected for the ca

lculation of

the r

elati

ve TSR per

for

mance ar

e compa

nies wi

th gene

rally

comparable business ac

vties, siz

e or geographic spread

Sta

ndard Ch

arte

red or co

mpani

es with w

hich we co

mpet

for inve

stor f

unds a

nd tale

nt. T

he pee

r group i

s inten

ded to

be representative of our geographic

presen

and busines

ope

ratio

ns. T

he comp

anies t

hat make up t

he pe

er group a

revi

ewed annu

ally

, p

rior t

o each ne

w L

P grant

The T

SR peer g

roup fo

r the 202

–

24 L

P awards w

ill be th

sam

e as for t

he 2021–

3 L

P and is de

taile

d below. TSR is

asure

d in ster

ling fo

r each co

mpany and t

he TSR da

ta is

aver

aged over a m

onth a

t the sta

rt and e

nd of th

e three

-year

asure

ment p

erio

d which st

art

s fro

m the da

te of gran

Remun

erati

on reg

ulati

ons for U

K bank

s prohi

bt the a

ward of

divdend equivalent

shares on vesting. The

numb

of shares

award

ed in re

spect o

f the L

TIP wil

l take into a

ccount t

he lack

of di

vden

d equi

valent

s (

calcul

ated by re

feren

ce to mar

ket

con

sens

us div

dend yi

eld) su

ch that t

he overall m

arket valu

of th

e award is m

aintan

ed.

The

se awar

ds will ves

t in ﬁve annu

al tran

ches b

eginnn

g afte

the t

hird ann

iver

sar

y of th

e grant (i.e. Marc

h 20

5 to Mar

2029) subjec

t to mee

ting th

e per

form

ance me

asure

s set ou

bel

ow at the e

nd of 202

. All vest

ed sha

res are su

bject t

o a

12 month retention period.

The p

erf

orman

ce mea

sures f

or the 202

–2

4 L

TIP a

wards are

set o

ut in th

e table b

elow.

158

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Directors’ remuneration

rep

ort

Performan

ce meas

ures for 2

2–

24 L

TIP a

Measure

eightng

Amount vesting

(as a % of to

tal a

ward

)

Threshold performance target

aximum

erformance target

in 2024 with a

CET

und

erp

in of the

high

er of 13% o

r the

minmum

regulator

requirement

30%

Maximum –

30%

Threshold –

low thr

esho

ld – 0%

11%

If Ro

TE rea

ches 7 p

er cen

t then 7

.5 p

er cent o

f the a

ward ves

. If Ro

E reac

hes 11 p

er cent t

hen 3

0 per cen

t of th

e award ve

sts

. If Ro

TE is

twe

en th

e thre

shol

d and ma

ximu

m, vest

ing is c

alcul

ated o

n a strai

ght

-lin

e basi

s bet

en the

se t

wo poi

nts

2. Rel

ati

ve TSR

against the

peer group

30%

Maximum –

30%

Threshold –

low thr

esho

ld – 0%

Median

Upper quartile

Rela

tive TSR i

s mea

sure

d again

st a pe

er gro

up of com

panie

s. If t

he Gr

oup

’s TSR pe

rfor

man

ce is at le

ast e

quiva

lent to t

he me

dian

ranke

d comp

any the

n 7

5 per cen

t of the a

ward ves

. If the G

rou

’

s TSR p

erfo

rman

ce is at l

east e

qual t

o the u

pper q

uart

ile ran

ked

com

pany th

en 30 pe

r cent of t

he awa

rd vest

s. B

ween t

hes

e point

, the G

roup

’s TSR i

s compa

red wi

th th

at of th

e peer c

ompa

nies

sito

ned im

meda

tely a

bove and b

elow it a

nd stra

ight

-lin

e vest

ing app

lies

3. Sustainablit

15%

Maximum

– 15%

Minm

um – 0%

•

Imp

leme

nt roa

dmap to a

chieve ai

m of net ze

ro by 2050

•

Pro

gres

s toward

s targe

t of $3

00bn i

n gree

n and tra

nsit

on ﬁnan

twe

en 2021 and 203

0 align

ed wit

h our G

reen a

nd Sus

taina

ble Pro

duct

Framework and T

ran

siton F

ance F

ramewor

•

Pro

gres

s on goa

l for cli

ent

s in carb

on-int

ens

ve indu

str

es to ha

ve a

str

ateg

y to tr

ansit

on th

eir bus

ines

s in line w

ith t

he Pari

s Agree

ment

4. Other str

ategic

measures

25%

Maximum –

Minm

um – 0%

Stands

•

ift p

art

icpat

ion of s

mall bu

sine

sse

s thro

ugh inc

reas

ng acce

ss to

ﬁnanc

al ser

vices

•

Sup

por

t comp

anies t

o impr

ove work

ing and e

nviro

nment

al sta

ndard

Client

•

Imp

rove clie

nt sat

isfa

cton ra

ting ev

iden

ced in su

veys and i

nter

nal

benchmar

•

liver gr

owth in a

fﬂue

nt weal

th clie

nt act

ivt

y an

d incre

ase t

he num

ber

of ac

tive p

ers

onal cl

ient

•

liver n

work in

come g

rowth i

n Cor

pora

te, Co

mmerc

ial & Ins

titu

ton

Bankin

•

ow value o

f Digta

l V

entu

res

Enabler

(innovat

on, new

way

s of wor

king

and people

)

•

Imp

rove prop

ort

ion of n

ew reven

ues

•

Increase senior female

repres

entation

to 3

•

Imp

rove empl

oyee en

gage

ment an

d incre

ase o

ur cul

ture o

f inclu

son

score (internal index)

•

Imp

rove empl

oyee pe

rcept

ion of i

nnovat

Ris

k and con

trol

•

prove ef

fect

iven

ess o

f risk a

nd cont

rol gove

rnan

•

ccess

lly del

iver mi

lest

ones w

ithn t

he inf

orma

ton an

d cyb

er se

curi

risk management plan

nde

rly

ing RoTE rep

rese

s the r

ati

o of th

e curr

ent ye

’

s un

der

lyi

ng op

erat

ing p

roﬁt a

ttr

ibu

tab

le to o

rdin

y sha

reh

olde

rs t

o the w

eigh

ted a

vera

ge or

dina

shareholders’ equity less the

average goodwill

and intangbles for

the reporting period. Underlying R

TE normally excludes

regulator

y ﬁnes

and certain other

just

men

ts b

, for re

mun

erat

ion p

urp

es, s

uch a

djus

tme

s are su

bje

ct to re

view b

y the C

ommi

tte

e CE

T1 un

der

pin w

ill b

e dyn

amic

all

y set at t

he hi

ghe

r of 13 pe

r cen

t or th

e minm

um re

gul

ato

ry l

evel a

s of 31 D

ece

mbe

r 2024. In ad

dit

on, t

he Co

mmi

tte

e has t

dis

cre

ton t

o take i

nto a

ccou

nt at t

he en

d of th

e per

for

man

ce pe

rio

d any cha

nge

s in re

gul

ator

y c

apit

al and r

isk-we

ight

ed as

t req

uire

men

ts t

hat mi

ght h

ave

en an

nou

nced a

nd im

ple

ment

ed af

r the s

tar

t of th

e per

for

man

ce pe

rio

d, for e

xamp

le, in r

ela

tio

n to Ba

sel IV

The p

eer gr

oup for t

he TSR me

asur

e in the 202

–2

4 L

TIP is u

nchan

ged f

rom the 2021

–

3 award an

d is set o

ut bel

ow:

Banco Santan

der

Credit Sui

sse

KB Fin

ancal G

roup

Ban

k of Ame

rica

BS Gr

oup

ver

sea Chi

nese B

ank

ing Co

rpo

ratio

Ban

k of Chin

Deut

sche Bank

Société Gé

nérale

Ban

k of East A

sia

HSB

Standard Bank

Barclay

ICBC

Sta

te Ban

k of Ind

P Parib

ICICI

UBS

Citgroup

JPMor

gan Chase

United Overse

as Bank

159

Standard Chartered

– Annu

al Repo

rt 2021

Directors’ report

al v

ariab

le remune

ration a

ded to dire

ctors i

n respe

ct of 2021 (

audited)

Bill Winters

Andy Halford

2021

2020

2021

2020

Annual incen

tve (

)

386

Ann

ual in

cent

ve as a per

cent

age of ﬁ

xed pay

15%

TIP awa

rd (

valu

e of sha

res sub

ject t

o perf

orm

ance co

ndit

ons

) (£

)

,12

2,000

TIP awa

rd as a pe

rcent

age of ﬁ

xed pa

120%

otal

var

iable remuneration (

£00

)

,317

514

otal

var

iable remuneration as a

percent

age

of ﬁxed pay

135%

he 2020 an

nua

l ince

nt

ve valu

es re

ﬂect t

he vo

lunt

ari

ly wai

ver

s of th

e cas

h ele

ment w

hic

h red

uce

d the a

ward

s by 50 pe

r cen

t (

6,0

00 fo

r Bill a

nd £

246

,000

for Andy

)

TIP award

s for th

e 20

1 per

form

ance year w

ill be gr

anted t

o executi

ve direc

tor

s in March 202

2 and are b

ased o

n 20

21 ﬁxe

d pay

Ser

vice con

tract

s for execut

e dir

ector

Cop

ies of t

he execut

ive dire

ctor

s’ ser

ice cont

ract

s are avail

able fo

r insp

ecton a

t the Gr

oup

’s regis

tere

d ofﬁce. T

hese co

ntra

cts

have r

olling 12 m

onth n

otice p

erio

ds and t

he dat

es of th

e executi

ve direct

ors’ c

urren

t ser

ice cont

ract

s are show

n below.

The c

ontra

cts wer

e upda

ted ef

fect

ive 1 Jan

uar

y 2020 to reﬂect t

he chan

ges ma

de foll

owing t

he impl

ement

aton of t

he 2019

rem

unerat

ion po

licy a

nd the ch

ange t

o pens

ion cont

ribu

ton. E

xecu

tive dir

ector

s are p

ermit

ted t

o hold no

n-execu

tive

dire

ctor

shp po

siton

s in othe

r organ

isato

ns. W

here su

ch appo

intme

nts a

re agree

d wit

h the Bo

ard, th

e execut

ive dire

ctor

y retain a

ny fees pa

yable fo

r their s

vic

es. B

oth execu

tive dir

ector

s ser

d as no

n-execut

ive dire

ctor

s elsew

here a

rec

eived fe

es for t

he per

iod cove

red by thi

s repor

t as se

t out be

low

Date of

Standard Cha

rtered

employment

cont

ract

tai

ls of a

ny non

-exe

cut

ive di

rec

tor

p

Fee

s re

tai

ned f

or any no

exec

uti

directorshp (

local currency

)

Bill Winter

1 Ja

nua

y 2020

Novar

tis I

nter

nati

onal AG

CHF

0,00

Andy Halfor

1 Ja

nua

y 2020

Mar

ks an

d Spe

ncer G

roup p

857

Single ﬁgure of remuneration for the Chairman and independent non-ex

utiv

e director

s’ (

dited)

The C

hairm

an and INE

Ds were p

aid in mon

thly in

stalm

ent

s duri

ng the ye

. Th

e INEDs ar

e requi

red to h

old sha

res wit

h a

nom

inal valu

e of $1,0

00. The t

able be

low show

s the fe

es and b

eneﬁt

s rece

ived by th

e Chair

man and IN

EDs in 2021 and

2020

. The I

NEDs’ 2021 be

neﬁt ﬁgur

es are in re

spec

t of the 2020

/21 t

ax year an

d the 2020 bene

ﬁt ﬁgures a

re in resp

ect of t

2019

/20 tax ye

ar to provi

de cons

isten

cy w

ith the r

epor

ting o

f simlar b

eneﬁt

s in prev

ious ye

ars an

d with t

hose r

eceive

d by

executive director

Fees

£000

Beneﬁts

£000

otal

£000

beneﬁcally

ld as a

31 December

2021

2020

2021

2020

2021

2020

Group Chairm

J Viñals

1,250

1,2

267

1,293

30,

000

Current INEDs

D P Con

ner

255

273

256

10,000

B E Gro

–

170

0,041

C M Hod

gson

, CBE

325

–

325

328

,571

G Huey Eva

ns, CB

200

–

200

615

N Khe

raj

360

–

328

0,5

N Okonjo-Iweala

135

142

–

M Ram

190

–

190

–

2,000

P G Rive

225

119

–

225

119

170

171

000

205

–

205

211

,000

J M Whit

brea

210

–

210

211

3,6

vid C

onn

’

s f

ee in

clu

des hi

s rol

e on th

e Com

bin

ed US O

pera

tio

ns Ri

sk Co

mmit

tee

ozi Oko

njo-

Iwe

ala st

epp

ed do

wn fr

om th

e Boa

rd on 28 F

ebr

uar

y 202

1. He

r rep

ort

ed fe

e for 202

1 of £

,00

0 is in re

spe

ct of t

he pe

rio

d of 1 Ja

nua

ry 202

1 to

28 Fe

bru

y 2021

. Her b

ene

ﬁts f

or 2021 o

f £90

0 are in r

esp

ect of t

he p

eri

od fr

om 6 Ap

ril 2020 t

o 28 Feb

rua

y 2021, i

n line w

ith t

he ap

pro

ach to d

isc

los

e INED

neﬁt

s in re

ect of t

he re

leva

nt ta

x year

ria Ra

mos wa

s app

oint

ed t

o the B

oard o

n 1 Jan

uar

y 202

e cos

ts of b

ene

ﬁts (and an

y ass

ocia

ted t

ax co

) ar

e paid b

y the G

rou

The b

ene

ﬁcal i

nte

rest

s of C

hair

man a

nd IN

EDs

, and co

nne

cte

d per

son

s in th

e sha

res o

f the C

omp

any are s

et ou

t abo

ve. Th

ese di

rec

tor

s do no

t hav

e any

n-be

neﬁc

al int

ere

s in th

e Com

pany

’

s sh

ares

. Non

e of t

hes

e dire

ctor

s us

ed sh

are

s as col

lat

eral f

or any l

oan

s. No d

irec

tor h

ad eit

her

: (i) an inte

res

t in th

mpa

ny’s pre

fer

ence s

har

es or lo

an st

ock

s of any s

ubs

ida

y or as

soc

iate

d und

taki

ng of t

he G

roup; o

r (i) any cor

por

ate in

ter

est

s in th

e Co

mpany

’s ordi

nar

ares

. All ﬁ

gure

s are a

s of 31 D

ecem

ber 2

021 or on t

he re

tir

eme

nt of a di

rec

tor un

les

s ot

her

se st

ate

Independent non-executiv

e direc

tors’ letters of appointment

The I

NEDs ha

ve lett

ers o

f appoin

tmen

t, wh

ich are avai

lable f

or insp

ecto

n at the G

roup

’s regi

stere

d ofﬁce

. Detai

ls of th

e INEDs’

app

ointm

ent

s are set o

ut on pa

ges 9

1 to 9

. INEDs ar

e appoi

nted fo

r a per

iod of on

e year, unles

s term

inate

d by eithe

r part

with thr

ee months

’ notic

160

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Directors’ remuneration

rep

ort

Thi

s secti

on set

s out t

he revi

sed di

rector

s’ rem

unera

tion p

olic

whi

ch will be p

ut for

rd to shar

ehol

ders a

t the 202

2 A

M for

a bind

ng vote an

d, if appr

oved, will a

pply f

rom 4 Ma

y 20

2 fo

up to t

hree ye

ars

The c

urren

t remun

erati

on pol

icy fo

r executi

ve direc

tor

s, the

Chairman and ind

ependent non-

cutive director

s was

appr

oved at the AGM h

eld on 8 M

ay 2019 and h

as appli

for t

hree ye

ars f

rom tha

t date. T

he poli

cy ha

s conti

nued t

support the delivery of our strategy

Chan

ges made t

o the curr

ent policy s

ince the

2019 shareholder v

ote

At the AGM in 2019 t

he dire

ctor

s’ remu

nerat

ion pol

icy re

ceive

the s

uppo

rt of 6

4 per ce

nt of sh

areho

lder

s. Th

e Commi

ttee

re-engaged with shareholders to seek feedback a

nd address

conc

erns r

elati

ng to th

e pens

ion allowan

ce. Follow

ing th

ese

dis

cusso

ns, w

ith ef

fect f

rom 1 Jan

uar

y 2020 the pe

nsion

allowan

ce for th

e curr

ent execu

tive dir

ector

s was re

duce

fro

m 20 per cen

t of sala

y to 10 pe

r cent of s

alar

, ali

gnng wi

all UK emplo

yees. The subsequ

ent

directors’ remuneration

rep

ort

s rece

ived su

ppor

t fro

m shareh

olde

rs of 97

.0 per cent

and 98

.6 pe

r cent of sh

areho

lder

s at the 2020 and 2021 AGMs

respect

ively

The B

oard an

d Comm

itte

e condu

cted a de

taile

d review

of th

e polic

y in 2021 con

sider

ng the v

iews of s

takeho

lder

the strategic objectves of the Grou

, the remun

eration

framewor

k applicable to all colleagues

, market benchmar

king

and b

est pra

ctice. Fo

llowin

g caref

ul cons

idera

ton, t

Committ

ee decided

to retain

a broadly

unchanged

policy

mak

ing som

e small c

hange

s in orde

r to align w

ith mar

ket

practice, incre

ase sharehold

er alignment and reinforce

sus

taine

d long-t

erm fo

cus on ou

r strat

egic go

als. M

aintan

ing

a siml

ar polic

y wil

l contin

ue to sup

por

t the de

liver

y of t

Gro

’s purp

ose an

d strat

egy

, r

einfor

ce the ac

hievemen

of shareholder v

alue creation, and ensure

continued

regulator

y compl

iance.

o recog

nise sh

areho

lder v

iews and f

ther ali

gn with m

arket

prac

tice, th

e pen

sion allowa

nce for n

ew direct

ors w

ill be

sed on t

he cash e

leme

nt of sal

y only. The Co

mmitt

con

sidere

d caref

ull

y whet

her th

e pens

ion allowan

ce for th

current directors should a

e based on

cash element

of sa

lar

y onl

. However, the pe

nsion r

educt

ions i

n 20

20 ha

a dire

ct impa

ct on the var

iabl

e pay op

por

tunit

y (8 per ce

lower f

or bot

h Bill and A

ndy

), in addi

ton to t

he redu

ction o

ﬁxed pay

. Therefore, to avoid fur

ther reducing remuneration,

for t

he cur

rent dire

ctor

s the p

ensi

on is not c

hangin

g and

will c

ontin

ue to be b

ased o

n the ca

sh and sh

are ele

ment

of salar

The basis of ca

lculation of variable

remuneration will be

re-

expre

sse

d as a perc

entag

e of sala

y (

cash and s

hares

)

onl

y chang

ing fro

m a perce

ntage o

f ﬁxed pa

y (

sala

y and

pen

sion

). Thi

s is pure

ly a pre

senta

tiona

l chang

e with no

impact on

the value

of oppor

tunity

The C

ommit

tee Ch

air main

tans re

gular c

ontact w

ith th

Group

’

s major shareholders on remuneration

and informs the

Committee of their views. In 2

021, shareholders representing

appr

oximat

ely 55 pe

r cent of o

ur shar

e regis

ter and t

main pro

y advisor

y agencies

were engaged to discuss

the p

ropo

sals fo

r the new d

irecto

rs’ re

muner

ation p

olic

Con

side

raton wa

s given to t

he view

s expre

sse

d and th

proposed

policy reﬂ

ect

the feedback

received

The r

emune

ratio

n of the G

roup C

hairm

an, execu

tive dir

ector

sen

ior man

ageme

nt and all co

llea

gues wa

s consid

ered in

the d

evelopm

ent of t

he ref

reshe

d poli

. A

lignme

nt wit

the w

ider wo

rkfo

rce and w

ith Gr

oup-wi

de remu

nerat

ion

arr

angem

ent

s was cri

tcal in th

e develop

ment of t

he po

licy

whi

ch is des

igned t

o reﬂect t

he Gro

’s purp

ose as we

ll as

foll

owing t

he prin

cples o

f our Fair Pa

y Char

ter whi

ch guide

rewar

d decisons.

ring t

he review a

nd develo

pment o

f the re

fres

hed

remuneration po

licy

, no indvidual particpated in

decisons that

would impact the determinaton

of their

own remuneration.

Director

’ remuner

ation policy

161

Standard Chartered

– Ann

ual Rep

ort 202

Directors’ report

Propos

ed ex

cutive direc

tors

’ remuner

ation po

licy

The p

ropo

sed exec

utive di

recto

rs’ rem

unera

tion p

olic

, to be e

ffe

ctive f

rom the d

ate of t

he Gro

’s A

GM o

n 4 May 202

2, for u

to th

ree year

s, i

s set ou

t below.

Fix

d remuneration

Salar

Changes

•

No change to

oli

Pur

pos

e and lin

to strategy

•

t to reﬂe

ct the r

ole, an

d the sk

ills a

nd exp

erie

nce of t

he ind

vidu

al, fo

llowin

g the G

roup

-wide p

rinc

ples

whi

ch appl

y to all e

mploye

es.

Operation

•

elive

red pa

rt in ca

sh and p

art in s

hares

•

o main

tan alig

nmen

t with s

hareh

old

ers

, the s

hare el

emen

t is rel

ease

d over a pe

rio

d of ﬁve yea

(20 pe

r cent ann

uall

)

•

Revie

wed ann

ually i

n line wi

th th

e wide

r work

force w

ith p

otent

ial in

crea

ses ap

plyi

ng fro

m Apr

il.

•

Sal

y for n

ew execu

tive di

recto

rs w

ill be su

bject t

o the s

ame po

licy.

Maximum potent

ial

•

crea

ses ma

y be ma

de at th

e Com

mitte

e’

s dis

cret

on to take a

ccoun

t of circu

mst

ances s

uch as:

–

ncre

ase in s

cope o

r resp

onsi

blit

–

ndv

idual

’s develop

ment i

n role (

e.g

. for a new a

ppoin

tme

nt whe

re sala

y may b

e incre

ase

d over tim

rat

her th

an set a

t the leve

l of th

e previ

ous in

cumbe

nt or ma

rket leve

l fro

m appo

intme

nt)

–

alary incre

ases across the Gro

–

alignment to mark

-competitve le

vels.

Alignment with

UK workforce

•

e proce

ss of s

etti

ng and an

nuall

y revi

ewng s

alar

ies aga

inst m

arket in

for

mato

n is in lin

e with t

he app

roach

for a

ll empl

oyees

•

For o

ther e

mploye

es, s

alar

y is d

elive

red on

ly as ca

sh.

Pension

Changes

•

or new exe

cuti

ve direc

tor

s pens

ion wi

ll be ba

sed o

n the ca

sh ele

ment o

f salar

y o

nly. This ch

ange i

s to

rec

ogni

se fee

dbac

k fro

m share

hold

ers a

nd to ali

gn wit

h marke

t pract

ice.

•

For t

he cur

rent exe

cuti

ve dire

ctor

s pen

sion i

s not ch

angin

g. Thi

s is to avo

id a fu

rth

er red

ucti

on in ﬁxed p

and va

riabl

e pay o

ppor

nit

y foll

owing t

he re

ducti

on in pe

nsio

n imple

ment

ed in 2020.

•

e maxi

mum pe

nsio

n is bei

ng red

uced f

rom 20 p

er cent t

o 10 per c

ent

, in line w

ith im

plem

entat

on for t

cur

rent e

xecuti

ve dire

ctor

s sinc

e Janu

y 2020

Pur

pos

e and lin

to strategy

•

The pension arrangements com

prise part of a

competitve remuneration

ack

age and facil

tate long-term

retirement

savings for ex

ecutive di

rectors.

Operation

•

Pai

d as a cas

h allowan

ce and/

or con

tri

buto

n to a deﬁn

ed con

trib

uto

n sche

me.

•

Pens

ion co

ntri

buto

ns ma

y also b

e mad

e in lieu o

f any waive

d salar

y (

nd the c

ash am

ount o

f any annua

incentve

Maximum potent

ial

•

For c

urre

nt execu

tive d

irect

ors

, 10 pe

r cent of s

alar

•

For n

ew execu

tive dir

ecto

, 10 per c

ent of t

he cas

h elem

ent of s

alar

y on

Alignment with

UK workforce

•

e contr

ibu

ton rat

e of 10 p

er cent o

f sala

y is align

ed wi

th UK em

ployee

Beneﬁt

Changes

•

No change to

oli

Pur

pos

e and lin

to strategy

•

A com

peti

tve be

neﬁt

s pac

kage to su

ppo

rt exec

utive

s to car

y out t

heir du

ties e

ffe

cti

vely

Operation

•

A ra

nge of b

eneﬁt

s ma

y be prov

ide

d, incl

udng s

tand

ard ben

eﬁt

s such a

s holid

ay an

d sick pa

, an

d may al

inc

lude t

he prov

ison o

f a bene

ﬁts ca

sh allo

wance, a ca

r and dr

iver (

or o

ther c

-re

late

d ser

ice

), priva

medical insu

rance, permanen

t health insurance, life insuran

ce, ﬁnancal advice and tax preparat

ion and tax

return assistance.

•

Addi

tona

l bene

ﬁts m

ay als

o be prov

ided w

her

e an execu

tive dir

ecto

r is rel

ocate

d or sp

ends a s

ubst

anti

rtio

n of th

eir tim

e in mor

e than on

e jur

sdict

on for b

usin

ess p

urp

oses

. Ben

eﬁt

s may in

clud

e, but ar

not l

imte

d to, rel

ocat

ion, s

hippn

g and sto

rage

, hous

ing allo

wance, e

ducat

ion fe

es an

d tax an

d socia

curi

ty c

ost

•

her be

neﬁt

s may b

e of

fere

d if cons

ider

ed app

ropr

iate an

d reas

onab

le by th

e Comm

itte

•

xecut

ive dir

ecto

rs are r

eimbu

ed for e

xpen

ses

, such a

s tra

vel and su

bsis

tenc

e, and any a

sso

ciate

d tax

inc

urre

d in the p

erf

orm

ance of t

heir d

utie

•

e execut

ive dir

ector

s ma

y be acc

ompan

ied by th

eir sp

ous

e or par

tne

r to mee

ting

vent

s. In exce

ptio

nal

circ

umst

ances

, the c

ost

s (

and any as

soc

iate

d tax) will b

e met by t

he Gro

up.

Maximum potent

ial

•

e max

imum o

ppor

tun

y for be

neﬁt

s will va

y accor

ding to t

he mar

ket, i

ndv

idual c

ircum

stanc

es and

other factors.

•

t at a level t

hat th

e Comm

itte

e cons

ider

s app

ropr

iate b

ased o

n the ro

le and i

ndv

idual c

ircum

stanc

es.

Alignment with

UK workforce

•

re ben

eﬁts a

re align

ed wi

th the a

ppro

ach for a

ll empl

oyees

•

me add

iton

al, rol

e-sp

ecif

c be

neﬁt

s are pr

ovide

d as app

ropr

iate b

ase

d on the ro

les an

d resp

ons

iblit

es of

e execut

ive dire

ctor

162

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

Directors’ remuneration

rep

ort

ariable remuneration

Annual incentve

Changes

•

e basi

s for cal

culat

ion of va

riab

le remu

nera

tion (

nual i

ncent

ves an

d L

IP awar

) is ch

angin

g from a

rcent

age of ﬁ

xed pay (salar

y a

nd pen

sion) to a per

centa

ge of sa

lar

y onl

. Th

is doe

s not im

pact t

he tot

qua

ntum o

ppo

rtu

nit

. Th

is is to al

ign wit

h mar

ket prac

tice an

d to reco

gnis

e fee

dbac

k from s

hare

hold

ers

•

Thi

s is a cha

nge fr

om a ma

ximum o

f 80 pe

r cent of

ﬁxed p

ay to 8

8 per c

ent of s

alar

•

Thi

s is a cha

nge fr

om a ma

ximum o

f 120 per c

ent of

ﬁxed p

ay to 132 p

er cen

t of sala

Pur

pos

e and lin

to strategy

•

Incentivse performanc

e lin

ked

to the Group

’

s stra

and al

igned to shareholder

interests.

Operation

•

nnual i

ncen

tve awa

rds are d

eter

mine

d bas

on G

roup an

d ind

vidu

al per

for

mance ove

r the

pre

cedi

ng ﬁnan

cal year.

•

Ann

ual in

cent

ves are d

eliver

ed as a co

mbin

aton

of ca

sh and s

hares s

ubje

ct to ho

lding r

equir

emen

and deferred shares.

•

TIP awards are

gran

ted annually with perfo

rmance

of th

e Gro

up and o

f the in

dvid

ual co

nsid

ered in

det

erm

inng th

e award l

evel.

•

TIP awa

rds wi

ll be sub

ject t

o long-t

erm

rfor

manc

e mea

sures

, me

asur

ed over a pe

rio

d of

at le

ast t

hree ye

ars

•

TIP awa

rds are d

elive

red in s

hares a

nd are su

bjec

to holding requir

ements

•

ferr

al and ves

ting o

f the an

nual an

d long-

term i

ncent

ve awar

ds are s

tru

ctur

ed so th

at, i

n combi

nato

–

he pro

por

tion o

f varia

ble rem

uner

atio

n that i

s defe

rred i

s no les

s tha

n requ

ired by t

he rel

evant

remuneration regulations (

currentl

60 per cent

)

–

The deferre

remuneration vests no faster than permitted under the

relevant

remuneration regulations

(

cur

rent

ly pro r

ata over ye

ars t

hree t

o seven af

ter a

ward).

•

e Comm

itte

e can, in s

peci

fe

d circu

msta

nces

, appl

y malu

s or cla

wba

ck to all o

r part o

f annu

al ince

ntve

and/

or any L

TIP a

wards

. Det

ails o

n how mal

us and cl

awb

ack op

erat

e curr

entl

y are prov

ided o

n pag

e 17

•

ferr

ed ann

ual inc

entve a

wards a

nd L

TIP awa

rds wil

l be gran

ted a

s condi

tona

l share a

wards o

r nil-co

options.

•

On t

he occu

rre

nce of co

rpo

rate even

ts an

d oth

er reo

rgani

sato

n event

s, t

he Com

mitt

ee ma

y appl

discreton

to adjust:

–

he vest

ing of d

efer

red a

nnual i

ncent

ve awar

ds and/

or t

he num

ber of s

hare

s unde

rly

ing a de

ferr

annual incent

ward

–

he vest

ing of L

P award

s and/

or th

e numb

er of sh

ares un

der

lyin

g an L

TIP awar

Maximum potent

ial

•

he max

imum va

lue of a

n annua

l incen

tve awa

granted to any ex

ecuti

e director cannot exceed

88 p

er cen

t of tha

t execut

ive dir

ector

’s salar

y (

ash

and shar

•

e maxi

mum valu

e of an L

TIP a

ward gran

ted t

any exec

utive d

irect

or cann

ot exce

ed 132 per c

ent of

at execu

tive dir

ecto

r’s sala

y (

cash an

d share

)

•

For t

his pu

rpo

se, L

TIP aw

ards ma

y be valu

ed in li

with the rele

vant remuneration

regulations

•

e maxi

mum valu

e of th

e combi

ned an

nual in

cent

ve opp

ort

unit

y and L

P award ca

nnot e

xceed

regulator

y l

imts

•

iable r

emun

erat

ion awa

rds can b

e any amou

nt fr

om zero to t

he ma

ximu

Performance

measures

•

The determinaton

of an exec

utive dir

ctor’

ann

ual inc

entve i

s mad

e by the Co

mmit

tee

sed on a

n ass

ess

ment of a b

alan

ced G

roup

sco

recar

d conta

inng a mi

x of ﬁna

ncal an

d othe

long-term

strategic measures and

per

sonal

performance. Financ

al measures will comprise

at le

ast 50 p

er cen

t of the a

nnual s

core

card.

•

e targe

, tog

ethe

r with a

n ass

essm

ent of

rfor

manc

e again

st th

ose ta

rget

s, w

ill be

disclosed

retrospectively

•

e Comm

itte

e will rev

iew th

e scor

ecard a

nnual

and m

ay var

y th

e mea

sure

s, wei

ghtng

s and

tar

get

s each ye

•

Dis

cret

on ma

y be exerc

ised by t

he Co

mmitt

ee to

ens

ure th

at the a

nnua

l incen

tve ou

tcom

e is a fair

and acc

urate reﬂection

of business and i

ndvidual

rfor

manc

e and any r

isk

relat

ed is

sues (

but it w

ill

not e

xceed t

he ma

ximu

m oppo

rtu

nit

•

e long-t

erm p

erfo

rma

nce me

asur

es may b

e a

mix of

ﬁnanc

al measures and

her

long-term

strategic

measures.

•

Finan

cal me

asur

es will c

ompr

ise at l

eas

t 50 per ce

of th

e per

for

mance m

eas

ures

. W

eig

htng

s and

tar

get

s will b

e set in a

dvance o

f each g

rant by

the Committee

and disc

losed prospectiv

and

rfor

manc

e again

st th

ose me

asu

res wil

l be

disclosed

retrospectively

•

For ﬁn

ancal m

eas

ures

, vest

ing wil

l be on a sl

idng-

sca

le bas

is bet

en thr

esho

ld and m

axim

um wit

no m

ore th

an 25 pe

r cent ve

sting a

t thre

shol

perform

ance

Alignment with

UKw

orkfor

•

e annua

l incen

tve pl

an is op

erate

d for al

emp

loyees

, pai

d in cash t

o cert

ain lim

ts wi

th th

rem

ainng b

alan

ce defe

rre

d over at le

ast th

ree

year

s in sh

ares an

or cash

•

mber

s of th

e Mana

geme

nt T

eam are a

lso el

igble

for L

TIP aw

ards, assessed on

the same performanc

measures and

target

163

Standard Chartered

– Ann

ual Rep

ort 202

Directors’ report

Other

Sharehol

ding require

ment

Changes

•

No change

to policy

Pur

pos

e and lin

to strategy

•

A re

quire

ment fo

r execu

tive di

recto

rs to h

old a sp

ecif

e

d value o

f share

s for al

ignme

nt wit

h the in

tere

sts o

shareholders during employment.

Operation

•

xecu

tive d

irect

ors a

re req

uired t

o hold a s

peci

f

ed level o

f shar

es, to b

e buil

t up over a re

ason

able t

ime

ame fr

om the d

ate of a

ppoin

tme

nt as an exe

cuti

ve dire

ctor (

or, if lat

, f

rom t

he date o

f any chan

ges to

the terms of

the shareholding r

qui

rement)

•

e share

hold

ing re

quire

ment i

s expre

sse

d as a pe

rcent

age of s

alar

y an

d is rev

iewed by t

he Com

mitt

as appropriate.

•

ares th

at cou

nt toward

s the r

equir

emen

t are be

neﬁcal

ly owne

d shar

es inc

ludn

g the sh

are ele

ment o

sal

, ves

ted sh

are awa

rds su

bject t

o a rete

ntio

n per

iod and u

nveste

d shar

e award

s for wh

ich

performance condit

ons have

been satisfed (

on a

net

-of

-tax basis

)

•

On im

plem

enta

ton of t

he po

licy, in 2022

, the CEO a

nd the C

FO will b

e requ

ired t

o hold 2

50 pe

r cent an

200 p

er cent o

f sala

y in shar

es, re

spe

ctive

Alignment with

UK workforce

•

For

mal sh

areh

oldin

g requ

ireme

s are op

erate

d for th

e execu

tive di

recto

rs on

•

Howeve

, ot

her em

ploye

es may h

old sh

ares a

s par

t of the d

efer

ral an

d reten

tion r

equi

remen

Sharesave

Changes

•

No change

to policy

Pur

pos

e and lin

to strategy

•

Prov

ides an o

ppor

nit

y for all e

mploye

es to inve

st volu

ntar

ily in t

he Gro

up.

Operation

•

hares

ave is a

n all-em

ployee p

lan wh

ere pa

rtic

pant

s (inclu

dng exec

utive d

irect

ors

) a

re able t

o ope

n a

ving

s cont

ract to f

und t

he exerc

ise of a

n opti

on over sh

ares

•

ving

s per m

onth o

f bet

wee

n £5 an

d the ma

ximu

m set by t

he Gro

up whi

ch is cur

rent

ly £

250.

•

e opti

on pri

ce is se

t at a disc

ount o

f up to 20 pe

r cent of t

he sha

re pri

ce at th

e date of i

nvtat

ion, o

r such

her dis

coun

t as ma

y be det

ermi

ned by t

he Com

mitt

ee.

•

An e

quiva

lent ca

sh or sh

are pla

n is of

fere

d in som

e coun

trie

s whe

re Shar

esa

ve may no

t be of

fer

ed (

icall

due to tax, regulatory or securites law

sues

Alignment with

UK workforce

•

All e

mploye

es are e

ligble t

o par

ticp

ate on t

he sam

e basi

Legacy arrangements

Changes

•

No change

to policy

Pur

pos

e and lin

to strategy

•

Honour existng commitments.

Operation

•

ny previ

ous com

mitm

ent

s or ar

range

ment

s ent

ered i

nto wi

th cur

rent o

r form

er exec

utive d

irect

ors w

ill be

honoured, includng

remuneration arrangements entered into

under the previously a

pproved directors’

remuneration po

licy

External

roles

Changes

•

No change

to policy

Pur

pos

e and lin

to strategy

•

o enco

urag

e self

develo

pmen

t and all

ow for th

e intr

oduc

ton of e

xter

nal ins

ght and p

ract

ice.

Operation

•

xecu

tive d

irect

ors m

ay acc

ept app

oint

ment

s in ot

her o

rgani

sato

ns sub

ject to r

elevan

t Boar

d approval

xecut

ive dir

ector

s te

nd to be l

imted t

o one n

on-exe

cuti

ve direc

tor

shp in an

othe

r list

ed com

pany

. Fe

es ma

be re

tain

ed by the e

xecut

ive dire

ctor.

164

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

Directors’ remuneration

rep

ort

Execu

tive director

s’ polic

y on recr

uitmen

The C

ommit

tee’s appro

ach to re

crui

tmen

t is to att

ract di

vers

e exper

ienc

e and exp

erti

se by pa

ying co

mpet

itve rem

unera

tion

tha

t reﬂect

s ou

r inter

naton

al nat

ure and e

nable

s us to att

ract an

d retain key ta

lent f

rom a glob

al mar

ketpla

ce. Any new

executive

director’s r

emuneration pack

age would include the same

element

s and

be subject to

the same variable remunera

tion

max

imum

s as tho

se for t

he exi

stng exec

utive di

recto

rs wi

th the exce

ption o

f the p

ensio

n provis

on. Th

e polic

y is su

mmari

sed

ow.

Element

Details

Salar

t to reﬂe

ct the r

ole and t

he sk

ills an

d expe

rien

ce of th

e candi

date. S

alar

y i

s deli

vered p

art in c

ash an

d part

in sh

ares w

ith th

e share

s bein

g rele

ase

d to th

e execut

ive dire

ctor i

n equa

l tran

ches over ﬁ

ve year

Beneﬁt

Dep

end

ent on ci

rcums

tanc

es but in l

ine wi

th the p

olic

y on pa

ge 161.

Pension

10 p

er cent o

f the ca

sh ele

ment o

f salar

ariable

remuneration

Dep

end

ent on ci

rcums

tanc

es but in l

ine wi

th the p

olic

y on pa

ge 162 and r

egul

ator

y li

mts

Shareholding

requirements

In lin

e with t

he po

lic

y on pag

e 163.

Buy-out

awards

•

The Committee may consider

ying out

forfeited remuneration and

for

feited

opp

ortunites

and/

com

pens

atin

g for lo

sse

s incur

red a

s a resu

lt of jon

ing th

e Grou

p subj

ect to pr

oof of f

orf

eitu

re or los

•

e value of a

ny buy-o

ut awa

rd will n

ot excee

d, in br

oad te

rms

, the va

lue of t

he rem

uner

ation f

orf

eite

•

Any aw

ard will b

e str

uct

ured w

ithn t

he req

uirem

ent

s of th

e appli

cable r

emun

erat

ion re

gulat

ion

s, and w

ill

be n

o more g

enero

us overa

ll than t

he rem

uner

atio

n forf

eite

d in ter

ms of t

he exi

sten

ce of pe

rfor

manc

asur

es, t

imng of ve

stin

g and fo

rm of de

liver

•

e value of b

uy-o

ut awar

ds is no

t incl

uded w

ithn t

he ma

ximu

m variab

le rem

uner

atio

n level wh

ere it

rel

ates t

o forf

eite

d remu

nerat

ion f

rom a pr

eviou

s role o

r empl

oyer

Legacy matters

Whe

re a seni

or execu

tive i

s prom

oted t

o the B

oard, h

is or he

r exis

tng co

ntrac

tual c

ommit

ment

s agr

eed

ior to t

heir ap

point

men

t may st

ill be h

onou

red in a

ccord

ance wi

th the t

erm

s of th

e relevan

t commi

tmen

includ

ng vesting of

any pre-exis

tng de

ferred or l

ong-term

incentve aw

ards.

Not

es to the r

emuner

ation po

licy for ex

ecu

tive director

Committee’s

judgement and discreton

In add

iton to a

sse

ssin

g perf

orma

nce and m

aking ju

dgem

ent

s on the a

ppropr

iate l

evels of an

nual inc

entve a

wards an

TIP award

s, th

e Commi

ttee h

as cer

tain op

erati

onal di

scret

ons th

at it may e

xercise w

hen con

sider

ng execu

tive dir

ector

s’

remuneration,

includng but

not limt

ed to

dete

rminn

g whet

her a le

aver is an e

ligble l

eaver u

nder th

e Gro

’

s s

hare pl

ans and t

reat

ment of r

emune

ratio

arrangements

i.

ame

nding L

TIP p

erfo

rman

ce mea

sures f

ollowin

g a corp

orate eve

nt to en

sure a fai

r and con

siste

nt ass

essm

ent of

perf

ormance

ii.

cidng w

heth

er to appl

y malu

s or claw

back t

o an award

Abi

lt

y for t

he Com

mitt

ee to a

mend t

he p

olicy f

or eme

rgin

g and f

utu

re re

gula

tor

y re

quir

emen

The C

ommit

tee re

tains t

he dis

creto

n to make re

ason

able and p

ropor

tio

nate ch

anges t

o the re

muner

ation p

olic

y if the

Committee considers this appropriate

in order to respond to

changing legal or regulatory requirements or guidelnes (

includ

but n

ot limt

ed to any FC

A or PR

A reviso

ns to it

s remu

nerat

ion r

ules an

d any chang

es to re

gulat

ions ca

used by, or follow

ing,

the U

K lea

ving th

e Europe

an Unio

)

. T

his incl

udes t

he abilt

y to m

ake admins

trat

ive chan

ges to b

eneﬁt th

e oper

ation o

f the

rem

unerat

ion po

licy a

nd/

r to impl

ement s

uch cha

nges ah

ead of any f

ormal e

ffe

ctive d

ate, en

surin

g time

ly comp

liance.

Whe

re prop

osed c

hange

s are con

sidere

d by the C

ommit

tee to b

e mate

rial, t

he Gro

up will e

ngage w

ith it

s majo

r share

hold

ers

and any ch

anges wo

uld be f

orm

ally inco

rpo

rated i

nto the p

olic

y whe

n it is next p

ut to sh

areho

lder

s for app

roval.

165

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Execu

tive director

s’ polic

y on contr

act

s, out

side app

ointmen

ts and p

ayment

s on los

s of ofﬁce

Executive directors’ ser

vice contracts

Changes

•

No change

to policy

Pur

pos

e and lin

to strategy

•

ximu

m of 12 mon

ths’ n

otic

e from t

he com

pany and t

he exec

utive d

irect

Operation

•

y be re

quire

d to wor

k and/

or se

ve a peri

od of g

arden l

eave d

urin

g the no

tice p

erio

d and/

or ma

y be p

aid

in lie

u of no

tice if n

ot req

uire

d to rema

in in emp

loyme

nt for t

he wh

ole no

tice p

erio

Compensation for loss of ofﬁce

in service contract

Changes

•

No change

to policy

Pur

pos

e and lin

to strategy

•

pend

ent on an i

ndv

idual

’s contr

act but i

n any event no m

ore th

an 12 mo

nths’ s

alar

y, pens

ion and

ben

eﬁts.

Operation

•

Payab

le qua

rte

rly (

ther t

han th

e shar

e elem

ent of s

alar

y wh

ich is re

lea

sed an

nuall

) and s

ubjec

t to

mit

gati

on if th

e execut

ive dir

ecto

r seek

s alte

rna

tive em

ploym

ent

•

t in addit

on to any p

aym

ent in li

eu of no

tice o

r if the in

dvi

dual r

emain

s in emp

loyme

nt for t

he wh

ole

notice perio

•

In th

e event of a s

ett

leme

nt agre

eme

nt, t

he Com

mitt

ee ma

y make pa

ymen

ts i

t consi

der

s reas

onab

le in

settlement of potential legal

claims, includng

otential

entitlem

ent

to compensation in respect of statutory

rights under employment protection

gislat

on.

•

e Comm

itte

e may al

so inc

lude i

n such p

aym

ent

s reas

onab

le reim

bur

sem

ent of p

rofes

sio

nal fe

es, su

ch as

gal fe

es and ta

x adv

ice (

and a

ny ass

ociat

ed ta

), in con

nect

ion wi

th suc

h arran

gem

ent

s. Ca

reer t

ransi

ton

sup

por

t may al

so be p

rovid

ed.

reatment of v

ariable remuneration on terminaton

Changes

•

No change

to policy

Pur

pos

e and lin

to strategy

•

ariable re

muneration is

awarded at the Committee

’

s discreton.

Operation

•

Elig

ble le

aver

s (

as de

ter

mined by t

he Co

mmit

tee

) ma

y be el

igble f

or vari

able re

mune

rati

on alth

ough t

here

is no automatic en

titlement.

•

e Comm

itte

e has di

scre

ton to r

educ

e the en

titl

emen

t of an eli

gble le

aver i

n line wi

th per

for

manc

e and

the cir

cumstances of the

ter

naton.

•

On a ch

ange o

f cont

rol, th

e amo

unt is pr

o rata t

o the pe

rio

d of ser

ice du

ring t

he year. The C

ommi

ttee m

alt

er the p

erf

orma

nce pe

riod

, mea

sure

s and tar

get

s to en

sure t

he per

for

mance m

eas

ures r

emain r

elevan

but chal

lenging.

reatment of un

vested awa

rds on terminaton under

share plan rules

Changes

•

No change

to policy

Pur

pos

e and lin

to strategy

•

e Comm

itte

e has t

he disc

reto

n unde

r the re

levant p

lan r

ules t

o dete

rmin

e how elig

ble le

aver s

tatu

sho

uld b

e appli

ed on te

rmin

aton

•

e curre

nt app

roach i

s that e

ligbl

e lea

ver sta

tus w

ill gen

erall

y be give

n in cas

es such a

s dea

th, di

sabli

ty,

ret

irem

ent and r

edun

danc

. D

iscre

ton i

s appli

ed as to a

wardin

g eligb

le le

aver st

atus i

n case

s of mut

ual

separation

•

In ad

dito

n, elig

ble le

aver st

atu

s will be g

iven (

her t

han in ca

ses of t

erm

inato

n for ca

use

) wh

ere th

e date

of te

rmin

aton i

s ﬁve year

s or m

ore af

ter th

e date o

f grant

Operation

•

For e

ligbl

e lea

vers

, award

s not s

ubjec

t to lon

g-ter

m per

form

ance m

easu

res ves

t in fu

ll over th

e orig

nal

tim

esca

le and re

main su

bjec

t to the G

rou

’

s c

lawb

ack ar

rang

emen

. The C

ommit

tee h

as dis

cret

on to

red

uce th

e level o

f vestin

•

Awards s

ubjec

t to lon

g-ter

m per

form

ance m

easu

res wi

ll vest su

bjec

t to tho

se pe

rfor

manc

e mea

sure

s and

on a pr

o rata b

asis (reﬂect

ing th

e prop

ort

ion of t

he rel

evant ﬁna

ncal pe

rfo

rman

ce per

iod t

hat th

e execut

ive

dire

ctor h

as be

en emp

loyed) an

d rema

in subj

ect to t

he Gro

’s claw

bac

k arran

geme

•

ting m

ay be s

ubjec

t to non-

soli

ct and no

n-com

pete r

equi

remen

•

Awards l

apse f

or empl

oyees n

ot des

ignat

ed eli

gble le

aver

•

On a ch

ange o

f cont

rol, a

wards b

ecom

e exercis

able an

d vest t

o the ext

ent pe

rfo

rman

ce mea

sure

s are

met (

ithe

r at the c

hang

e of cont

rol or l

ater)

. Th

e Comm

itte

e may a

llow awar

ds to co

ntinu

e or rol

l-over in

agr

eeme

nt wit

h the ac

quire

, ta

king i

nto acc

ount t

he circu

msta

nces

, and ma

y alte

r the p

erfo

rman

ce per

iod

asur

es and t

arget

s to en

sure t

he pe

rfor

man

ce mea

sure

s remai

n releva

nt.

•

e Comm

itte

e has t

he ﬂexi

blit

y to di

sapp

ly tim

e prora

tion o

n the ve

sting o

f L

TIP awar

ds in cer

tain

circ

umst

ances

, as

ses

sed on a c

ase-by-

case b

asis

, tak

ing int

o acco

unt all of t

he cir

cumst

ance

s at tha

t time.

The f

ollow

ing min

mum cr

iter

a nee

d to be m

et bef

ore th

e Com

mitt

ee can co

nsid

er usin

g this ﬂ

exibl

–

he exec

utive d

irect

or has m

ore t

han ﬁve ye

ars’ s

vic

e on the B

oard

–

he exec

utive d

irect

or is re

tirn

g fro

m ful

l-time e

mploy

ment i

n ﬁnanc

al ser

ices an

d comp

arabl

e roles i

other industr

es.

–

The executive d

irector has demonstrated satisfactory conduct and

has achieved

heir

perfor

mance

objectves.

–

A c

lear, Boa

rd-app

roved, h

andove

r plan is i

n place t

o tran

sito

n to an ide

ntﬁe

d succe

sso

•

If th

e ﬂexi

blit

y were t

o be us

ed, th

ere wou

ld be n

o L

IP award i

n the ﬁn

al year of e

mploy

ment o

r addi

tona

ymen

ts in l

ieu of n

otic

•

If an in

dvi

dual l

eaves a

nd sub

seq

uent

ly takes u

p an execu

tive r

ole, unve

sted a

wards t

hat h

ad pror

atio

dis

apple

d will l

apse a

nd the e

xecut

ive will b

e exp

ecte

d to re-p

ay any ves

ted a

wards

166

Standard Chartered

– Ann

ual Re

por

t 2021

Directors’ report

Directors’ remuneration

rep

ort

Post-emplo

yment shareholding requirement

Changes

•

align with shareholder guida

nce and ma

rket prac

tice, the post

-employment shareholding requirement

is in

crea

sng to 1

00 pe

r cent of t

he sha

reho

lding r

equi

reme

nt for t

wo yea

rs fo

llowi

ng the c

essa

tion o

emp

loyme

nt. T

he re

quire

ment in t

he prev

iou

s poli

cy was 1

00 pe

r cent of t

he sh

areho

ldin

g requi

reme

nt for

one ye

ar and 5

0 per ce

nt of th

e requ

ireme

nt for t

he se

cond ye

ar foll

owing t

he ces

sat

ion of em

ploym

ent

Pur

pos

e and lin

to strategy

•

o align e

xecuti

ve dire

ctor

s’ int

erest

s wi

th the G

rou

’

s l

ong-t

erm st

rate

gy an

d the int

eres

ts o

f share

hold

ers

fol

lowin

g employ

men

t ther

e is a req

uirem

ent fo

r execut

ive dir

ecto

rs to h

old a sp

ecif

e

d value of s

hare

s aft

ey have le

ft th

e empl

oymen

t of th

e Grou

Operation

•

On ce

ssa

tion o

f empl

oymen

t execut

ive dir

ecto

rs wi

ll be re

quire

d to ho

ld 100 p

er cen

t of the s

hareh

oldi

req

uirem

ent in p

lace fo

r t

wo year

s (

, i

f lower, the act

ual sh

areh

oldin

g on dep

art

ure

Chairman and independent non-ex

cutiv

e director

s’ remuneration policy

The B

oard h

as review

ed the r

emune

ratio

n polic

y for in

depe

ndent n

on-exec

utive di

recto

rs (INED

) and det

ermi

ned th

ere woul

be no c

hange t

o the fe

e str

uctu

re.

Fee

Changes

•

No change

to policy

Pur

pos

e and lin

to strategy

•

Att

ract a Ch

airm

an and IN

EDs wh

o, toge

the

r with t

he Bo

ard as a w

hole, h

ave a bro

ad ran

ge of sk

ills an

exp

eri

ence to d

eter

mine G

rou

p stra

tegy a

nd over

see it

s im

plem

entat

on.

Operation

•

e INEDs a

re paid f

ees f

or chai

rman

shp an

d memb

ers

hip of B

oard co

mmitt

ees a

nd for t

he Dep

Chairman and

Senior Independent Director

roles

•

Fee

s are pa

id in cas

h or shar

es. Po

-tax f

ees m

ay be u

sed to a

cquir

e share

•

e Chair

man an

d INED fe

es are rev

iewed p

eri

odcal

. T

he Boa

rd set

s INED f

ees an

d the C

ommi

ttee s

e Chair

man’s fees

. The Ch

airm

an and I

NEDs excu

se th

emse

lves f

rom any di

scus

son on t

heir f

ees

•

INED

s may a

lso re

ceive f

ees a

s direct

s of sub

sidar

ies of S

tand

ard Cha

rter

ed PLC, to t

he ext

ent pe

rmit

ted

by r

egulation.

•

verall ag

greg

ate ba

se fe

es pai

d to the C

hair

man and a

ll INED

s will re

main wi

thn th

e limt st

ated i

n the

ticl

es of A

sso

ciato

n (

curr

entl

y £1.

5 mill

on per a

nnum

•

Fee

s are se

t at a level w

hich re

ﬂect th

e dut

ies, t

ime co

mmit

ment an

d cont

ribu

ton ex

pec

ted f

rom th

Chairman and INEDs

•

Fee

s are rev

iewed an

d appr

opri

atel

y posi

tone

d agai

nst th

ose f

or the Ch

airm

an and I

NEDs in b

ank

s and

her com

panie

s of a sim

lar sca

le and co

mple

xit

•

ere are n

o recover

y prov

ison

s or per

for

manc

e mea

sures

Beneﬁt

Changes

•

No change

to policy

Pur

pos

e and lin

to strategy

•

App

ropr

iate b

eneﬁt

s pa

ckage t

o supp

ort t

he Chai

rman a

nd INED

s to car

y out th

eir du

ties e

ffe

ctive

Operation

•

e Chair

man is p

rovid

ed wit

h ben

eﬁts a

sso

ciate

d wit

h the ro

le, inc

ludn

g a car and dr

iver a

nd pri

vate

dical in

suran

ce, pe

rman

ent he

alth i

nsur

ance an

d life in

suran

ce. Any ta

x cost

s as

soci

ated w

ith th

ese

neﬁt

s are pa

id by the G

roup. A

ny fut

ure Ch

airm

an bas

ed ou

ide of t

he UK ma

y rece

ive as

sist

ance

wit

h the

ir relo

catio

n cons

iste

nt wit

h the su

ppor

t of

fere

d to ind

vid

uals un

der t

he Gro

’s inte

rnat

onal

mobilt

y polices.

•

e Chair

man an

d INEDs ar

e reimb

sed fo

r expe

nse

s, su

ch as tra

vel an

d subsi

sten

ce (

and in

clud

ng any

soci

ated t

ax)

, in

curr

ed in th

e per

for

mance o

f thei

r duti

es, an

d may r

ecei

ve tax pr

epar

ation a

nd tax

return assistance.

•

In exce

ptio

nal circ

umst

ance

s the Ch

airm

an and INE

Ds ma

y be acco

mpan

ied by th

eir sp

ouse o

r par

tner t

etin

gs or even

. The co

sts (

nd any as

soci

ated t

ax) are pai

d by the G

roup.

Approach on recruitment for Chairman or INEDs

Fee

s and ben

eﬁts f

or a new Ch

airma

n or INED wi

ll be in lin

e with t

he Chair

man and i

ndep

enden

t non-exe

cuti

ve direct

ors’

remuneration po

licy

Ser

vice con

tract

s and po

licy on payme

nt for los

s of ofﬁce for t

he Chair

man and INED

Chairman

he Cha

irma

n is prov

ided a n

otic

e peri

od of u

p to 12 mon

ths an

d is ent

itle

d to a pa

yme

nt in lie

u of not

ice in

res

pect o

f any unex

pire

d par

t of the n

otic

e per

iod at t

he poi

nt of te

rmin

aton

INEDs

INED

s are app

oint

ed for a p

eri

od of on

e year un

les

s term

inat

ed ear

lier by e

ithe

r part

y w

ith th

ree mo

nth

s’

itte

n noti

ce. No en

titl

emen

t to the p

aym

ent of f

ees o

r provi

son of b

eneﬁt

s con

tinu

es beyon

d ter

minat

on of

e appoi

ntme

nt and IN

EDs are n

ot ent

itle

d to any pa

yme

s for los

s of of

ﬁce (

her th

an ent

itle

ment

s und

con

tract l

, s

uch as a p

ment in l

ieu of n

otice i

f noti

ce is no

t ser

ved

)

167

Standard Chartered

– Ann

ual Rep

ort 202

Directors’ report

Remun

erati

on for t

he execut

ive dire

ctor

s in 2022 wi

ll be in lin

wit

h our new d

irecto

rs’ re

muner

ation p

olic

y as det

ailed o

pages 16

1 to 166 of this

repor

t, subject

to shareholder approv

at th

e May 202

2 A

e 2022 p

oli

cy is a

lso s

et ou

t on ou

r webs

ite:

.com

The ke

y element

of remuneration

for 20

2 i

clude

ala

(

deli

vered in ca

sh and s

hares

), pen

sion, b

eneﬁt

s, an a

nnual

ince

ntve an

d an L

P award. A p

ort

ion of th

e execut

ive

dire

ctor

s’ salar

ies is p

aid in sh

ares to st

rengt

hen sh

areho

lder

align

ment

. Bill

’

s p

ensio

n is deli

vered a

s a contr

ibut

on to a

deﬁn

ed cont

ribu

ton pl

an and as a ca

sh allowan

ce. And

y’s

pen

sion i

s delive

red as a ca

sh allowan

ce. The p

ensio

allowan

ce is set a

s a perc

entag

e of sala

y (both t

he cas

and shar

es components

)

The C

ommit

tee rev

iews t

he salar

ies of t

he execu

tive dir

ector

on an an

nual ba

sis

, afte

r consi

derng a

ny change

s to the

scope or responsib

lit

y of the r

ole, the ind

v

idual’

s development

in th

e role, ali

gnmen

t with m

arket

-com

peti

tve level

s, and

consideraton

of the average salary increases made across

the G

roup.

aking in

to acco

unt the a

verag

e 20

2 sal

y incre

ase

award

ed to t

he Gro

’

s U

K and glo

bal wor

kforc

e, the

Com

mitte

e dete

rmin

ed to inc

reas

e salar

y f

or Bill f

rom

0,0

00 to £

2,43

4,00

0 and to i

ncrea

se sal

y for An

fro

m £1,

515,0

00 to £

1,55

6,00

0 (

ncrea

ses of 2

.7 pe

r cent)

fect

ive fro

m 1 April 202

Det

ails of ﬁ

xed pay f

or Bill an

d Andy w

ith ef

fect f

rom 1 A

pril

2022 ar

e set ou

t below.

000

Bill Winters

Andy Halford

202

2021

% cha

nge

202

2021

% change

Salar

2,43

370

2.7

556

515

2.7

of w

hich cas

,217

1,1

2.7

1,0

2.7

of w

hich sh

ares

217

2.7

500

2.7

Pension

243

237

2.7

156

2.7

al ﬁxed pa

2.7

,712

1,666

2.7

Prop

ort

ion of t

otal ﬁ

xed pa

y paid in c

ash

55%

Prop

ort

ion of t

otal ﬁ

xed pa

y paid in s

hare

45%

30%

Illustration of applicaton of

2022 remunerat

ion

policy

The c

hart

s be

low illus

trate t

he pot

entia

l outco

mes un

der

the p

ropo

sed dir

ector

s’ remu

nerat

ion po

licy b

eing p

ut to

sha

rehol

der

s for appr

oval at the AGM in M

ay 2022 (i.e. for

award

s that wo

uld be m

ade in M

arch 2023, b

ase

d on 2022

per

for

mance an

d ﬁxed rem

unera

tion w

ith ef

fect f

rom

1 Apr

il 2022)

The c

hart

s show p

oten

tial rem

uner

ation o

utcom

es for e

ach

executive director in fou

r perform

ance scenarios: minmum,

on-ta

rget

, max

imum and m

axim

um wit

h 50 per ce

nt share

price appreciaton, in line with reportin

g requirements. Th

per

centa

ges show

n in eac

h bar rep

resen

t the am

ount of

rem

unerat

ion prov

ided by e

ach ele

ment o

f pay

. A

lso sh

own

are th

e 202

0 a

nd 2021 singl

e total ﬁg

ures o

f remun

eratio

n for

Bill

and Andy

Executive

director remuneration

(£

000

)

Bil

nte

1,000

2,000

3,000

4,000

5,000

8,000

10,0

000

6,000

12,000

11,

000

,000

Fixe

d remu

ner

atio

Annual

incentve

TIP

Minmum

2,842

100%

On-targ

520

51%

19%

30%

Maximum

8,1

35%

26%

39%

29%

2020 singl

ﬁ

gure

2021 sin

gle ﬁgur

72%

10%

18%

4,657

59%

15%

ximu

m +

are pric

ncre

ase

And

alfo

Minmum

1,8

100%

On-targ

595

51%

19%

30%

Maximum

370

25%

41%

28%

51%

2020 singl

ﬁ

gure

2021 sin

gle ﬁgur

24%

61%

26%

13%

ximu

m +

are pric

ncre

ase

2 policy

plementat

for director

168

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Directors’ remuneration

rep

ort

Deﬁnt

ions f

or the c

hart o

n page 167 show

ing po

tenti

al remu

nerat

ion out

comes f

or eac

h executi

ve direc

tor in fo

ur per

form

ance

scenar

ios:

xed

remuneration

All scenarios

•

nsi

sts o

f tota

l ﬁxed rem

uner

atio

n – salar

y, bene

ﬁts an

d pen

sion

•

Sal

y – sal

y as of 1 A

pril 202

•

neﬁt

s – bas

ed on 2021 s

ingle ﬁg

ure, a

ctual ﬁ

xed rem

uner

ation i

n 2022 wi

ll be de

pend

ent on

e cost of b

eneﬁt

•

Pens

ion – 10 p

er cen

t of sal

y as of 1 A

pril 202

Incentives

Min

mum

•

o annu

al ince

ntve i

s award

•

No L

TIP a

ward ves

On-target

•

nnual i

ncen

tve of 50 p

er cen

t of targ

et (

4 per ce

nt of sa

lar

)

•

TIP awa

rd vest

s at 50 p

er cent t

otal a

ward (

6 per ce

nt of sa

lar

)

Maximum

•

nnua

l incen

tve of 1

00 pe

r cent of t

arge

t (

8 per ce

nt of sa

lar

)

•

TIP awa

rd vest

s at 10

0 per ce

nt tot

al awar

d (132 per ce

nt of sal

)

ximum + 5

share pri

ce increase

•

Ann

ual in

cent

ve of 10

0 per ce

nt of tar

get (88 pe

r cent of s

alar

•

TIP awa

rd vest

s at 10

0 per ce

nt tot

al awar

d (132 per ce

nt of sal

)

•

50 p

er cent s

hare pr

ice ap

preci

aton i

n the valu

e of th

e veste

d L

IP awar

d since t

ime of g

rant

2020 single

ﬁgure

Fixed

rem

uneration

•

alar

y – r

ecei

ved in 2020

•

neﬁt

s – rece

ived in 20

/20 tax yea

•

Pens

ion – co

ntri

buto

cash all

owance r

ecei

ved in 2020

Incentives

•

Ann

ual in

cent

ve – rece

ived in r

espe

ct of 2020 per

for

mance ye

ar (50 p

er cent c

ash po

rti

waive

•

TIP – ves

ting o

f 2018

–

20 L

TIP awa

2021 single

ﬁgure

Fixed

rem

uneration

•

alar

y – r

ecei

ved in 2021

•

neﬁt

s – rece

ived in 2020

21 tax ye

•

Pens

ion – co

ntri

buto

cash all

owance r

ecei

ved in 2021

Incentives

•

Ann

ual in

cent

ve – rece

ived in r

espe

ct of 2021 p

erfo

rman

ce year

•

TIP – ves

ting o

f 2019–

1 L

IP award

Independent non-executiv

e direc

tor fees

The f

ee level

s are bas

ed on m

arket dat

a and th

e dutie

s, ti

me commi

tmen

ts an

d contr

ibut

on expe

cted f

or the PLC Boar

and, w

here a

ppropr

iate, s

ubsid

ar

y boa

rds. T

he Chair

man an

d the INED

s are elig

ble for b

eneﬁt

s in lin

e with t

he direc

tors’

remuneration po

licy

. Neither the Chairman or the INEDs receive any performance-related remu

neration.

1 January 2021

£000

1 Ja

nuar

y 20

£000

Group Chair

man

1,250

250

Board Member

105

Additonal respon

siblites

Deput

y Chairm

Senior Independent Director

Chair

Audit Committe

ard Ris

k Comm

itte

Remuneration Committee

Board Financal Crime Risk Com

mittee

Culture and Sust

ainablity Commit

tee

Membership

Audit Committe

ard Ris

k Comm

itte

Remuneration Committee

Board Financal Crime Risk Com

mittee

Culture and Sust

ainablity Commit

tee

Governance

and Nominaton

Committee

he G

roup C

hair

man r

ece

ives a s

tan

dal

one f

ee wh

ich is i

ncl

usve o

f all s

vic

es (

.g. Bo

ard an

d Co

mmit

tee r

esp

ons

ibl

ite

)

169

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

2022 annual incentve scorecard

r annual i

ncent

ve score

card reﬂe

cts o

ur str

ategi

c prior

ties

, ref

reshe

d at the b

egin

nng of 2021. T

he targ

ets a

re set ann

ually

by the C

ommit

tee an

d take into a

ccount t

he Gro

’s annual ﬁn

ancal pl

an and st

rateg

ic prio

rtie

s for th

e next few ye

ars w

hich

reﬂe

ct the evol

ving m

acroe

cono

mic out

look

. The C

ommit

tee w

ill also c

onsid

er prog

ress d

emon

strat

ed agai

nst th

e Stand

s in the

det

ermin

aton o

f the overal

l score

card out

come.

For 202

2, to si

mplf

y th

e proce

ss, t

he Com

mitte

e has de

ter

mined t

o embe

d the as

ses

smen

t of per

son

al perf

orm

ance int

o the

annu

al incen

tve sco

recard a

sse

ssme

nt, a

ccount

ing for a m

axim

um weight

ng of 10 p

er cent

. Financ

al meas

ures co

ntinu

e to

make up 5

0 per cen

t of the an

nual in

centve s

corec

ard. Prev

iousl

, per

son

al per

form

ance was a

sse

d indep

ende

ntly fo

llowin

the a

sse

ssme

nt of th

e score

card wh

en the C

ommit

tee cou

ld appl

y an adju

stme

nt of +

- 1

0 perce

ntag

e point

s to th

e award

out

come. S

trate

gic and p

ers

onal me

asur

es are as

ses

sed by th

e Comm

itte

e using a q

uanti

tatve an

d quali

tatve f

ramewor

The C

ommit

tee co

nside

rs su

ch targ

ets t

o be comm

erciall

y sens

itve an

d that it wo

uld be d

etri

menta

l to the in

teres

ts of t

Gro

up to di

sclos

e them b

efore t

he end o

f the ﬁna

ncal year. As su

ch, tar

get

s will be d

isclo

sed re

trosp

ecti

vely in t

he 2022 An

nual

Report alongside

he le

vel of performance achie

ved.

ep 1: Co

ndu

ct ga

teway re

quir

eme

nt to b

e met in o

rde

r to be e

ligb

le fo

r any annu

al inc

ent

ve

App

ropr

iate l

evel of in

dvid

ual val

ued be

hav

iour

s and co

ndu

ct exhib

ted d

urin

g the co

urs

e of the ye

ep 2: M

eas

ure

ment o

f per

form

ance a

gain

st ﬁn

anc

al an

d oth

er st

rat

egic a

nd pe

rso

nal me

ure

Financal

measures

eightng

Income

10%

•

get

s to

be disclosed retrospectiv

Cost

10%

Operat

ing proﬁt

wit

h a CET

underpin of

the h

igher o

f 13% or the

minmum

gulatory

requirement

20%

Growt

h of high-qualit

y liab

lit

es

mix

Other strategi

c measures

eightn

Clien

ts (

work

, afﬂ

uent

, mas

ventures

)

12%

•

Improv

e client

atisfact

on and client experience ra

ing

•

liver gr

owth in q

ualif

e

d clien

ts a

cros

s Afﬂu

ent

, Priva

te Ban

king

, and W

alth

Man

agem

ent ac

tivt

y a

cros

s top 11 af

ﬂuen

t coun

trie

s and in

crea

se the n

umb

er of

act

ive pe

rso

nal cli

ent

•

liver n

work in

come g

rowth i

n Cor

pora

te, Co

mmerc

ial & Ins

titu

ton

al Bank

ing

•

ow value o

f Digta

l V

entu

res

Sustain

ablity

•

Pro

gres

s again

st the G

rou

’

s aim to a

chieve n

et zero by 205

•

Improv

e community engagement through emplo

yee volunteering particpation

Enab

ler

s (

inn

ovaton

, new ways

of working and

eople

)

•

Grow proportion of

digtally in

tiated transactions and

digtal sales

adoption

•

Improv

e end-to-end speed to

deliver change (

from idea formation to

commercialsation

)

•

Deve

lop hu

man capi

tal by imp

rovng e

mploye

e enga

geme

nt, d

iver

st

y and in

clus

Risk and

controls

•

Imp

rove ris

k and con

trol g

overn

ance ef

fec

tiven

ess

•

ccess

lly del

iver mi

lest

ones w

ithn t

he inf

orma

ton an

d cyb

er ri

management plan

Personal

performance measures

eight

ng

Indivdual

objectves

10%

•

For B

ill, th

is incl

udes e

xecut

ing pl

ans to ac

celer

ate th

e deli

ver

y of key ﬁna

ncal

tar

get

s and ma

intan

ing fo

cus on in

novato

n and ou

r core bu

sine

ss pro

duct

•

For A

ndy, this in

clud

es devel

opme

nt of th

e Resol

vabilt

y A

sse

ssm

ent Frame

work an

evol

ving in

ter

nal pe

rfor

man

ce mea

sure

s to align w

ith o

ur stra

tegi

c prio

rti

e Gro

’s sta

tut

y per

rma

nce is a

dju

ste

d for pr

oﬁt

s or lo

es of a ca

pita

l nat

ure

, amou

s con

seq

uen

t to inve

stm

ent t

rans

act

ion

s dri

ven by st

rat

egi

c inte

her in

equ

ent an

d/ or exce

pti

ona

l tran

sac

tio

ns th

at are s

ign

ﬁcant o

r mat

eri

al in t

he con

tex

t of th

e Gro

’s no

al bus

ine

ss ea

rni

ngs f

or th

e per

iod a

nd it

ems

which management and

investors would ordina

rly identfy separately when assessing underlying performance period by

eriod

der

lyi

ng Ro

TE r

epre

sen

ts t

he ra

tio o

f the cu

rre

nt ye

ar’s un

der

lyi

ng op

era

tin

g proﬁt a

ttr

ibu

tab

le to o

rdin

y sh

areh

old

ers t

o the w

eigh

ted a

vera

ge or

dina

shareholders’ equity less the

average goodwill

and intangbles for

the reporting period. Underlying R

TE normally excludes

regulator

y ﬁnes

and certain other

just

men

ts b

, for re

mun

erat

ion p

urp

es, s

uch a

djus

tme

s are su

bje

ct to re

view b

y the C

ommi

tte

e CE

T1 un

der

pin w

ill be d

amic

ally s

et at t

he hi

gher o

f 13 pe

r cent o

r the m

inm

um re

gul

ator

y l

evel a

s at 31 De

cem

ber 202

2. I

n add

ito

n, th

e Com

mit

tee h

as th

dis

cre

ton t

o take i

nto a

ccou

nt at t

he en

d of th

e per

for

man

ce pe

rio

d any cha

nge

s in re

gul

ator

y c

apit

al and r

isk-we

ight

ed as

t req

uire

men

ts t

hat mi

ght h

ave

been announced and

implem

ented

after the start of

the perfor

mance

per

iod

170

Standard

Chartered

– Ann

ual Rep

t 2021

Directors’ report

Directors’ remuneration

rep

ort

How does ou

r directo

rs’ re

munera

tion policy

addr

ess t

he k

ey fea

tures s

et out in t

he UK

Corporate Gov

ernance Code

Risk

•

The Committee considers risk adjustment i

n respect of

the G

roup s

core

card and h

as a trac

k record o

f appl

ying

discreton appropriately

•

The r

ule

s of the L

TIP gi

ve the Co

mmitt

ee th

e neces

sar

dis

creto

n to adju

st vestin

g outc

omes if i

t consid

ers t

hat

they are

inconsstent with underlying business perform

ance

•

e op

erate m

alus an

d claw

back in re

spe

ct of our an

nual

incentve and L

TIP

•

e se

t the inc

entve

s of empl

oyees in Audi

t, Ris

k and

Complianc

e functions i

ndependently of

the businesses

ey overs

ee.

Alignment with culture

•

Performance metrics used to determine incentve outcomes

directly align wit

h our busines

s strategy

•

In lin

e with ou

r Fair Pay Ch

arte

, our i

ncent

ve plan

s suppo

us in embeddin

g a performan

ce-orient

ated culture and

our princple

that colleagues should share in

the success of

the G

roup. O

ur sco

recard i

nclud

es ﬁnan

cal and st

rateg

asure

s and all em

ployees’ p

erfo

rman

ce is as

ses

sed by

wha

t is achi

eved and how i

t is achieve

d in line w

ith our

val

ued behaviours.

•

In combi

naton with our

isk

procedures

, our

remuneration

str

uct

ure ens

ures th

at our val

ued b

ehav

iour

s are

appropriatel

y recognised and rewarded.

Proportionalty

•

In lin

e with ou

r commi

tment t

o pay fo

r per

form

ance, a

sign

ﬁcant proportion of ex

ecuti

e director pay is deliv

ere

through ince

ntves based on pe

rformance me

trics aligne

with our

strategy

•

xecuti

ve direc

tor

s are fu

rth

er aligne

d with l

ong-te

shareholder interests through the deferred release of salar

annu

al incen

tve and L

TIP sh

are awar

ds over a per

iod o

f one

to eig

ht year

s with in

cent

ve awards a

lso be

ing subj

ect to

cla

wbac

k for up to 1

0 year

s from gr

ant.

•

Additonal shareho

lding requiremen

ts are in place for

executive director

s to build and maintan a signﬁcant

shareho

lding in Company shares while in employm

ent

and p

ost

-emp

loyme

nt for t

wo year

s. B

oth exec

utive

director

s currentl

y ex

ed the shareholdin

g requirement

Predictablit

•

The r

ange of p

ossi

ble reward

s to ind

vidu

al execut

ive

dire

ctor

s is set o

ut in th

e scenar

io char

s on pag

e 16

7 w

here

we als

o demon

stra

te the im

pact of a 5

0 per cen

t share

price appreciaton

over the three-y

ear performance period

of th

e L

•

Max

imum a

wards leve

ls unde

r all ince

ntves ar

e cappe

at t

wo tim

es ﬁxed p

. Ot

her th

an vesti

ng levels w

hich

are dr

iven by pe

rfor

mance o

utco

mes, t

he onl

y sour

ce of

vari

aton in ﬁn

al payo

uts i

s the fa

ct that a s

ignﬁcant p

art

of in

centve a

wards is d

eliver

ed in sha

res and li

nked to th

share price.

Simplcit

y and

larity

•

Simp

lcit

y is a key dri

ver for th

e str

uctu

re of our exe

cuti

y as far as p

oss

ible, no

with

standn

g the co

mplex

y of

ope

ratin

g as a UK re

gulat

ed ban

•

Addit

informaton is included on

the alignment

execu

tive and w

ider wo

rkfo

rce pa

y on pag

e 14

7 in s

uppo

of our commi

ment

to clarity

171

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

ddit

onal r

emuneration disclosur

The f

ollowi

ng disc

losur

es provi

de fu

rthe

r infor

mato

n and cont

ext in rel

ation t

o execut

ive dire

ctor rem

unera

tion an

remuneration for

the wider workforce

as required by com

pany r

eporting regulations, corporate gov

ernance guidance

and

insttutional in

vestor guidel

nes. These include the Dir

ectors’ Remunera

tion R

eport Regulations, the UK Corporate Gov

nance

de, Pillar 3 d

isclo

sure re

quirem

ent

s and th

e requi

remen

ts of T

he Sto

ck E

xchange o

f Hong Kon

g Limte

Appropriateness of ex

cutiv

e director

s’ remuneration

r approa

ch to rem

unera

tion is c

onsis

tent fo

r all emp

loyees and i

s desi

gned to h

elp ens

ure pa

y is comp

etit

ve and in lin

e with

the p

rincp

les of o

ur Fair Pay Ch

arte

. Remu

nerat

ion for t

he execu

tive dire

ctor

s, in li

ne wit

h other e

mployee

s, is r

eviewed an

nuall

agai

nst int

erna

l and exte

rnal m

easu

res to en

sure t

hat level

s are appro

pria

te. Furt

her de

tails o

n the alig

nment o

f execut

ive

dire

ctor an

d wider wo

rkf

orce rem

unera

tion is s

et out o

n page 147

Measure

Approach

External

rke

data

•

e co

mpet

e for ta

lent in a g

loba

l marke

tpla

ce, wit

h many of o

ur key comp

etit

ors b

ase

d out

sid

e the UK

. W

e r

eview

exec

utive d

irect

or ﬁxed a

nd vari

able re

mune

ratio

n level

s again

st a pe

er grou

p of UK an

d inter

nat

onal b

ank

s to

ens

ure th

at it re

mains a

pprop

riat

ely co

mpe

titve

. Marke

t data u

sed in b

ench

mark

ing is b

ase

d on th

e late

st pub

lishe

rep

ort a

nd acco

unt

•

In ad

dito

n, we con

sider t

heir r

emun

erat

ion aga

inst F

TSE

30 co

mpan

ies, w

ith da

ta so

urced f

rom an e

xter

nal prov

ider.

Internal

measures

•

As w

ith al

l employe

es, e

xecut

ive dire

ctor

s’ sal

arie

s are rev

iewed an

nuall

y in lin

e with t

he Gr

oup-w

ide sa

lar

y inc

reas

incpl

es. In a

ddit

on, we rev

iew ann

uall

y the yea

-on

-year pe

rcent

age ch

ange in r

emun

erati

on for t

he exec

utive

directors and

ider

employee population.

•

r incen

tve pl

ans ha

ve a cle

ar link to G

rou

p and bu

sines

s per

for

manc

e, thro

ugh pu

blis

hed sc

oreca

rds

. The sa

oup sco

reca

rd is se

t to det

ermi

ne ince

ntve

s for col

leag

ues in

clud

ng the e

xecut

ive dire

ctor

•

Inc

enti

ve deci

sons f

or coll

eagu

es, i

nclu

dng th

e execut

ive dir

ecto

rs, a

re dri

ven by th

e asse

ssm

ent of i

ndv

idual

performance includ

ng achie

vement

against personal objectves

and conduct.

•

The remuneration

str

ucture

for ex

ecuti

e directors was c

onsidered as part of

the broader directors’

remuneration

licy r

eview du

rin

g 20

1, ta

king a

ccoun

t of the r

emun

erat

ion fr

amewor

k appl

icabl

e to all col

leag

ues

CEO p

ratio

•

In lin

e wit

h UK reg

ulat

ions

, we annu

ally re

por

t pay r

atio

s compa

ring C

EO remu

nerat

ion to a

ll UK emp

loyees

•

e re

view yea

-o

n-year rat

io chan

ges t

o unde

rst

and th

e reas

ons an

d appro

pri

atene

ss fo

r such m

ovemen

•

In ad

dito

n, we revi

ew the m

edian r

atio a

gains

t UK F

TSE and i

ndus

y pe

er aver

ages

The rel

ations

hp bet

en the r

emunera

tion of t

he Group C

EO and all UK empl

yees

Rat

io of th

e tot

al rem

une

rat

ion of t

he CEO t

o tha

t of th

e UK lower qu

art

ile, me

dian a

nd upp

er qua

rti

le emp

loy

Method

CEO

£000

UK e

mpl

oyee – £0

Pay r

P25

P50

P75

P25

P50

P75

2021

4,657

215

51:1

4:1

22:1

2020

128

199

6:1

20:1

2019

360

212

65:1

42:1

5:1

201

,287

124

208

80:1

51:1

0:1

2017

4,683

121

203

39:1

23:1

It is ex

pect

ed th

at the rat

io will d

epen

d mater

ially o

n long-t

erm in

centve o

utcom

es ea

ch year

, a

nd accor

dingly m

ay ﬂuc

tuat

The

refor

e, the C

ommit

tee als

o discl

oses t

he pa

y ratio

s covering s

alar

y an

d salar

y p

lus ann

ual ince

ntve, as U

K empl

oyees are

eligb

le to be c

onsid

ered fo

r an annu

al incen

tve ba

sed on G

roup, bu

sine

ss and in

dvid

ual per

for

mance. T

hese s

how a more

consistent ratio o

ver time.

Addit

on

al rat

ios o

f pay ba

sed o

n sala

ry an

d sala

ry p

lus an

nual i

ncen

tve

Salar

CEO

£000

UK e

mpl

oyee – £0

Pay r

P25

P50

P75

P25

P50

P75

2021

2,3

100

136

5:1

4:1

17:

2020

2,37

116

8:1

25:1

20:1

2019

2,35

128

36:1

26:1

8:1

201

2,300

142

9:1

16:1

2017

2,30

124

42:

19:1

Salary plus annual

incentve

2021

559

122

186

45:1

29:1

19:1

2020

,756

104

175

26:1

16:1

2019

604

109

187

33:1

19:1

201

,69

105

183

52:1

35:1

20:1

2017

182

58:1

39:1

2:1

172

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Addit

remuneration disclosures

•

The p

ay rat

ios are ca

lculat

ed usin

g Opt

ion A pub

lishe

d meth

odol

ogy

, in lin

e with inves

tor gui

dance.

•

Empl

oyee pay d

ata is b

ase

d on fu

ll-time e

quival

ent pa

y for UK em

ployees a

s of 31 De

cemb

er for th

e relevan

t year and

exclu

des le

aver

s, jone

, and emp

loyee tran

sfer

s in or o

ut of the U

K dur

ing the ye

, to h

elp ens

ure dat

a is on a like-f

-like

sis. T

ota

l pay is ca

lculat

ed in lin

e with t

he singl

e ﬁgure m

etho

dolo

gy (

i.e. ﬁxe

d remun

eratio

n accr

ued du

ring t

he ﬁnan

cal

year an

d variab

le remu

nerat

ion rel

ating t

o the pe

rfor

manc

e year

) and d

ata for i

nsure

d ben

eﬁts ar

e base

d on not

ional

premia. No other ca

lculation adjustments or assumptions have been made.

•

CEO pa

y is as pe

r the sin

gle to

tal ﬁgur

e of remu

nerat

ion for 2021 an

d resta

ted fo

r 20

20 to t

ake accou

nt of the a

ctual L

TIP

vest

ing in 2021. Fur

the

r infor

mato

n on the s

ingle to

tal ﬁgur

e is on pa

ge 155. T

he 2021 rati

o will be r

estat

ed in th

e 20

2 dire

ctor

s’

rem

unerat

ion rep

ort t

o take acco

unt of th

e ﬁnal L

TIP vest

ing dat

a for eli

gble emp

loyees an

d for th

e CEO

•

The C

ommit

tee h

as cons

idere

d the da

ta for th

e thre

e indv

idual

s ident

ﬁed at th

e lower qua

rtil

e, media

n and upp

er quar

tile

for 2021 an

d believe

s that it i

s a fair reﬂ

ectio

n of pay a

mong t

he UK emp

loyee po

pulat

ion. Eac

h of the in

dvid

uals id

entﬁe

was a f

ull-tim

e empl

oyee dur

ing the ye

ar and re

ceive

d remun

eratio

n in line w

ith th

e Grou

p remun

erati

on poli

, an

d none

receiv

ed ex

ceptional

pay

•

r L

P is inten

ded to l

ink tot

al remun

erat

ion to th

e achievem

ent of t

he Gro

’

s lon

g-term s

trate

gy and t

o reinfo

rce

alignment between executive remuneration a

shareholder interest. Particpation

is ty

pica

lly senior emplo

yees who have

line o

f sight to i

nﬂuen

ce direct

ly th

e perf

orma

nce targ

ets o

n the a

wards. T

he lower q

uart

ile, me

dian and u

pper qu

art

ile

emp

loyees id

entﬁed t

his year a

re not p

articp

ant

s in the L

TIP

•

The ye

-o

n-year incr

ease i

s due to t

he CEO rece

ivng a h

igher an

nual in

centve f

or 2021 (57 pe

r cent of m

aximu

m comp

ared

wit

h the re

duce

d award of 1

8.5 p

er cen

t in 20

20 f

ollowin

g the vol

untar

y wa

iver of th

e cash p

ort

ion

Group performance v

sus the CEO’

s remuneration

The g

raph be

low shows t

he Gr

oup

’s TSR per

form

ance on a cu

mulat

ive ba

sis over th

e past 1

0 year

s along

side th

at of th

e FTS

0 and pe

er bank

s. T

he graph al

so show

s histo

rcal leve

ls of rem

unera

tion of t

he CEO over th

e 10 year

s end

ed 31 De

cembe

20 for comparison. The

E 100 pro

ides a

broad comparison group against

hic

h shareholders may measure their r

elati

return

Jan 22

Jan 21

Jan 20

Jan

Jan 18

Jan 17

Jan 16

Jan 15

Jan

Jan 13

Jan 12

100

150

200

250

oup per

form

ance vs the CEO

’s

emun

erat

ion

ue of £10

nvest

ed on 31

cemb

er 2011

CEO tot

al remu

nera

tion (£

illon)

CEO to

tal rem

une

rat

ion (Pet

er San

)

ota

rem

une

rat

ion (Bi

ll Wint

ers)

Standard

Chartered

TSE 100

omparator median

The t

able b

elow show

s the sin

gle ﬁgu

re of tot

al remu

nerat

ion for t

he CEO sin

ce 2012 and th

e variab

le remu

nerat

ion deli

vered a

a percentage of

max

imum

opp

ortunity

2012

201

2017

2018

2019

2020

202

Single ﬁgure

of total remuneration £000

Pete

r Sand

s (

CEO un

til 10 J

une 2015

)

378

,093

290

–

Bill W

inter

s (

app

oint

ed CEO on 1

0 June 201

–

,39

392

4,6

287

5,3

,657

Annual incentv

e as a percentage of

maximum

opportunity

Peter

ands

63%

50%

–

Bill Winter

–

45%

76%

55%

57%

tin

g of L

TIP awar

ds as a p

erc

ent

age of m

axim

opportunity

Peter

ands

33%

10%

–

Bill Winter

–

27%

38%

•

Bill

’

s s

ingle ﬁg

ure of to

tal rem

unera

tion in 201

5 includ

es his b

uyout a

ward of £6

.5 mil

lon to com

pens

ate for t

he for

feit

ure of

share interests on joni

from his previous emplo

ment.

•

The 2020 sin

gle ﬁgure f

or Bill h

as bee

n rest

ated b

ased o

n the act

ual ves

ting an

d share pr

ice wh

en the 201

8–2

0 L

TIP a

wards

vest

ed in Mar

ch 20

173

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Annual percentage change in remuneration of directors and employ

ees

UK percentage change in

remun

eration

In lin

e with o

ur Fair Pa

y Char

ter, we moni

tor yea

-on

-year cha

nges b

ween t

he move

ment in s

alar

y, beneﬁ

ts an

d annu

al incen

tves

for t

he CEO be

ween p

erfo

rman

ce year

s com

pare

d with t

he wid

er wor

kfor

ce. As r

equir

ed un

der th

e Shar

ehol

der Righ

ts D

irect

ve

(pa

rt of UK C

omp

anies r

egul

atio

), we comp

are the d

irect

ors o

f the PLC Boa

rd agai

nst an a

verag

e full

-time e

quiva

lent U

K employe

The r

egu

latio

ns re

quire t

his ana

lysi

s to be u

nder

taken f

or all ind

vid

uals e

mploye

d by Stan

dard Ch

arte

red PLC (

e paren

t comp

any

As n

o indv

idu

als are e

mploye

d by Stan

dard Ch

arte

red PLC (

ey are emp

loyed by le

gal en

tite

s whic

h sit be

low the p

aren

t comp

any

)

we volu

ntar

ily di

sclo

se the c

ompa

ris

ons ag

ainst U

K empl

oyees a

s we feel t

his pr

ovide

s a repre

sen

tati

ve comp

aris

on.

Salary

/fees

% change

axable beneﬁts % change

Annual incentv

e % change

2021

2020

2021

2020

021

2020

CEO

B Win

ter

0.0

0.7

6.5)

(

.9)

208.

)

CFO

A Hal

ford

3.7

(

30.

208.

)

oup C

hair

man

J Viñals

0.0

)

(11.7

)

–

Current INEDs

D P Co

nner

)

(

)

–

B E Gr

ote

0.0

–

C M Ho

dgso

n, CBE

0.0

(

0.0)

28.

–

G Hue

y Evans

, CBE

0.0

0.0)

–

N Kh

eraj

(

)

0.0

(

0.0)

–

N Okonj

o-Iweala

–

0.0

–

63.6

–

M Ram

–

P G Rive

–

18.3

–

(

0.0)

–

J M Whi

tbre

0.0

(

0.0)

)

–

orkforce

ver

age F

TE UK e

mploye

4, 5, 6

3.8

(

.0)

38.2

(

)

e incr

eas

es in a

nnu

al inc

ent

ves f

or Bil

l Wint

s and An

dy Ha

lfo

rd are r

eﬂec

tiv

e of th

e impa

ct of t

he vol

unt

y wai

ver of t

he ca

sh el

emen

t of th

eir 2020 a

nnu

cent

ves

, whi

ch re

duc

ed th

e awar

ds by 50 p

er ce

In 202

1: Ngoz

i Okon

jo-I

wea

la ste

ppe

d dow

n fro

m the B

oar

d on 28 Fe

uar

y an

d Mar

ia Ramo

s was a

ppo

inte

d to th

e Bo

ard on 1 J

anu

In 2020: P

hil Ri

vet

t was ap

poin

ted t

o the B

oar

d on 6 Ma

ploye

e dat

a is ba

sed o

n fu

ll-t

ime e

quiv

alen

t pa

y for UK e

mpl

oyee

s as of 31 D

ece

mbe

r of th

e rel

evant y

ear. Thi

s dat

a exclu

des l

ver

s, jo

ner

s and e

mpl

oyee

ansf

s in or o

ut of t

he UK du

rin

g the y

ear t

o help e

nsu

re da

ta is on a l

ike-f

or-like b

asi

s. Sa

lar

y pe

rce

nta

ge cha

nge r

eﬂec

ts i

ncre

ase

s dec

ide

d at th

e end o

f 2020

and implemented in

2021

Avera

ge F

TE UK em

ploy

ee pe

rcen

tag

e cha

nge h

as be

en cal

cul

ate

d on a me

an ba

sis

. As th

e emp

loye

e pop

ula

tion w

ill c

hang

e yea

rly a

nd th

e mea

n aver

age

con

sid

s the f

ull r

ange o

f dat

a, it i

s exp

ecte

d thi

s wil

l prov

ide a m

ore co

nsi

ste

nt yea

on-ye

ar com

par

iso

n. An

y perc

ent

age c

hang

es im

pac

ted by e

xtre

mes a

eit

her e

nd of t

he da

ta se

t will b

e exp

lai

ned i

n the s

upp

ort

ing co

mme

nta

he re

duct

ion i

n taxa

ble b

ene

ﬁts f

or UK e

mplo

yees r

eﬂe

cts t

he im

pact o

f le

aver

s dur

ing 2

021, w

ho wou

ld ha

ve t

ypi

call

y rec

eive

d high

er le

gac

y be

neﬁt

rang

eme

s. On a m

atc

hed s

amp

le ba

sis

, ben

eﬁt

s incr

eas

ed by 1

.6 pe

r cen

t year-on

-year

For t

he CEO and C

FO and t

he Gro

up Cha

irman a

nd INED

s, th

e data t

he cha

nges r

elat

e to are se

t out o

n page

s 155 and 1

, resp

ecti

vely.

The c

hang

e in taxab

le ben

eﬁt

s rela

tes to t

he chan

ge in th

e value

s for th

e 2020

/21 an

d 2019

/20 tax ye

ars

e to the l

ow value o

f the ta

xable b

eneﬁt

s re

ceive

d by INEDs

, whic

h have n

ot excee

ded £

1,00

0 in 2021 (

et out o

n page 1

), sma

cha

nges t

o thes

e value

s are ex

pect

ed to ca

use th

e perc

enta

ge chan

ge to ﬂu

ctua

te year-on-yea

Sch

eme inter

est

s aw

rded, exercise

d and lapse

d during th

e y

Emp

loyees

, incl

udng e

xecut

ive dire

ctor

s, ar

e not p

ermi

tted t

o enga

ge in any p

ers

onal inve

stme

nt str

ateg

ies wit

h reg

ards to t

heir

Company

shares, includng

hedging against

the share

price of Compan

y shares. The mai

n features of the

out

standing

shares and

awar

ds are s

ummar

ise

d bel

ow:

Awa

Performance measure

Acc

rue

s not

ion

al div

de

nds?

No. of

tranches

ranche spl

Performance outcome

–1

33% – RoE

33% – TS

33% – S

trat

egic

50% t

ranch

e 1

12.5% tranc

hes 2

-5

27%

7–

5 equal

tranches

38%

201

8–20

–2

33% – Ro

33% – TS

33% – S

trat

egic

2020

–

o be a

sses

d at end of 202

o be as

ses

sed a

t end of 202

–2

30% – Ro

30% – TSR

15% – Sustainablit

25% – S

trat

egic

2016

–18 an

d 2017–

19 LTIP awa

rds m

ay re

cei

ve div

den

d eq

uiva

lent s

har

es ba

sed o

n div

den

ds de

cla

red b

wee

n gran

t and ve

. From 1 Ja

nua

ry 20

17 rem

une

rat

ion

gul

atio

ns fo

r Euro

pea

n ban

ks pr

ohib

te

d the a

ward o

f div

den

d equ

ival

ent s

hare

s. T

here

for

e, th

e numb

er of s

har

es awa

rde

d in re

spe

ct of th

e 2018

–20, 2019–21

2020

–

2 an

d 2021–2

3 L

TIP a

ward

s too

k into a

cco

unt t

he lac

k of di

vd

end e

quiv

alen

ts (calc

ulat

ed by re

fer

enc

e to mar

ket co

nse

nsu

s div

de

nd yi

eld) s

uch t

hat t

over

all va

lue of t

he a

ward wa

s mai

nta

ned

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

Addit

remuneration disclosures

ange in i

nte

res

ts du

ring t

he pe

riod 1 Ja

nuar

y to 3

1 Dece

mber 2

021 (

dite

Share award

price (

£)

As o

1 Januar

Awa

Divdends

awarde

xercis

Laps

As o

31 December

Performance

period end

esting date

B Wint

ers

2016

–

18 L

TIP

5.560

33,50

–

5,42

–

11 Mar 20

4 M

ay 2021

33,

506

–

33,

506

4 Ma

y 20

–

33,507

4 M

ay 2023

2017

–

19 L

TIP

,049

–

355

,404

–

13 M

ar 2020

13 Mar 2021

,049

–

049

13 Mar 202

,049

–

049

13 M

ar 2023

,049

–

049

13 Ma

r 20

201

–

20 L

TIP

–

80,

200

–

9 M

ar 2021

9 M

ar 2021

378

–

0,20

,17

9 Ma

r 20

378

–

0,20

,17

9 M

ar 2023

378

–

0,20

,17

9 Ma

r 20

379

–

80,

,179

9 Mar 2025

2019

–

21 L

TIP

133

,065

–

133,065

1 Mar 2022

11 Mar 202

133

,065

–

133,065

11 M

ar 2023

133

,065

–

133,065

11 M

ar 202

133

,065

–

133,065

11 M

ar 2025

–

133,06

11 Mar 2026

2020

–

2 L

TIP

161

–

161

9 M

ar 2023

9 Mar 202

61,

–

161

9 Mar 202

61,

–

161

9 Mar 2025

61,

–

161

9 Mar 2026

61,

–

161

9 Mar 2027

2021

–

3 L

TIP

–

50,

621

–

0,62

15 M

ar 202

15 M

ar 202

–

621

–

621

15 Ma

r 20

–

621

–

621

15 Ma

r 20

–

621

–

621

5 Mar 2027

–

621

–

621

15 Mar 2028

A Hal

for

4,5

2016

–

18 L

TIP

5.560

20,0

–

,14

,15

–

11 M

ar 2019

4 M

ay 2021

20,00

–

20,0

4 May 202

20,00

–

0,009

4 May 202

2017

–

19 L

TIP

,888

–

838

28,7

–

13 M

ar 2020

13 Mar 2021

,888

–

,888

13 Mar 202

,888

–

,888

13 M

ar 2023

–

13 Mar 2024

201

–

20 L

TIP

–

9 Ma

r 2021

9 M

ar 2021

–

9 Ma

r 2022

–

9 M

ar 2023

–

9 M

ar 202

–

9 M

ar 2025

2019

–

21 L

TIP

–

85,09

11 M

ar 2022

11 M

ar 2022

–

85,09

11 M

ar 2023

–

85,09

11 Ma

r 20

–

85,09

11 Ma

r 2025

,096

–

85,096

11 M

ar 2026

2020

–

2 L

TIP

9,9

–

9 M

ar 2023

9 Ma

r 20

9,9

–

9 Ma

r 20

9,9

–

9 Ma

r 20

9,9

–

9 Ma

r 20

9,9

–

9 M

ar 2027

2021

–

3 L

TIP

–

283

–

283

5 Mar 2024

15 Ma

r 202

–

96,283

15 M

ar 2025

–

96,283

15 M

ar 2026

–

96,283

15 Ma

r 20

–

96,283

15 Ma

r 20

Sharesave

4.9

807

–

1,8

–

1 D

ec 202

175

Standard Chartered

– Ann

ual Rep

ort 2

021

Directors’ report

For t

he 202

1–23 L

P awa

rds gr

ante

d to B

ill Win

ter

s and A

ndy H

alf

ord on 1

5 Mar

ch 2021

, the va

lue

s gran

ted w

ere: Bi

ll Win

ter

s: £3

.1 mill

on; An

dy Ha

lfor

d £2

mil

lon

. The n

umb

er of s

hare

s awa

rded i

n res

pec

t of th

e L

TIP t

ook i

nto ac

cou

nt th

e lack o

f div

de

nd eq

uiva

lent

s (

alcu

lat

ed by re

fer

ence t

o mar

ket co

nse

nsu

vde

nd yi

eld

) such t

hat t

he ove

rall va

lue o

f the a

ward wa

s mai

nta

ned

. Perf

orm

anc

e mea

sur

es app

ly to 2

021–23 LTIP awa

rds

. The c

los

ing sh

are p

ric

e on th

e day

fore g

ran

t was £4.901 (f

urt

her d

eta

ils ar

e inc

lud

ed in No

te 31

, Sha

re-b

ase

d pa

yme

s on pa

ges 4

03 to 407

)

On 3

1 Marc

h 2020 Sta

nda

rd Cha

rte

red a

nno

unce

d tha

t in re

spo

nse t

o the r

equ

est f

rom t

he PR

A and a

s a con

seq

uen

ce of t

he unp

rec

ede

nte

d chal

len

ges f

acin

e wor

ld due t

o the C

ID-19 pa

ndem

ic, t

he B

oard d

eci

ded t

o wit

hdra

w the r

eco

mme

nda

tion t

o pa

y a ﬁnal d

ivd

end f

or 201

. 1,

200 di

vd

end e

qui

vale

nt sh

ares

all

oca

ted t

o Bill

’s 2017

–19 L

TIP a

ward t

ran

che w

hich ve

ste

d in Ma

rch 2020 an

d 7

42 al

loca

ted t

o And

y’s 2017–19 L

TIP a

ward t

ranc

he wh

ich ve

ste

d in Mar

ch 2020

lati

ng to t

he can

cel

led d

ivd

end w

ere de

duc

ted f

rom t

he ca

lcul

ati

on of di

vd

end e

qui

vale

nt sh

ares a

llo

cate

d to sh

are

s vest

ing in M

arc

h 2021. D

iv

den

uiva

len

t shar

es all

oca

ted t

o the 20

–

8 L

TIP a

ward t

ran

che ve

stin

g in Ma

y 2021 di

d not i

nclu

de any s

har

es rel

ati

ng to t

he can

cel

led di

vd

end

On 1

5 Mar

ch 2021

, Bill Wi

nte

rs exe

rci

sed t

he 2017–19 L

TIP a

ward ove

r a tot

al of 4

404 s

hare

s and A

ndy H

alfo

rd exe

rcis

ed th

e 2017–

9 L

TIP a

ward ove

r a tot

al of

,726 s

har

es. T

he cl

osin

g sha

re pr

ice on t

he da

y be

fore t

he exe

rcis

e was £4

01. O

n 17 Mar

ch 2021

, Bill W

inte

rs ex

erci

sed t

he 201

8–20 L

TIP a

war

d over a to

tal

of 28

,178 sha

res an

d And

y Hal

for

d exerc

ise

d the 20

–

20 L

IP awa

rd ove

r a tot

al of 17

8 shar

es. T

he cl

osi

ng sh

are pr

ice o

n the d

ay be

for

e the exe

rci

se was £4

13.

On 4 M

ay 2021

, Bil

l Wint

ers e

xerc

ise

d the 20

16–18 LTIP awa

rd over a t

ota

l of 35

,421 s

hare

s and A

ndy H

alfo

rd exe

rcis

ed th

e 2016

–18 L

P awar

d over a t

otal o

f 21,15

ares

. Th

e clos

ing s

hare p

ric

e on th

e day b

efo

re th

e exerc

ise wa

s £5

e unve

ste

d shar

e awar

ds he

ld by Bi

ll Win

ter

s and A

ndy H

alfo

rd ar

e cond

ito

nal r

igh

ts un

der t

he 201

1 Plan

. They d

o not h

ave t

o pay t

oward

s the

se a

ward

The u

nves

ted S

hare

sav

e opt

ion h

eld by A

ndy H

alfo

rd is a

n opti

on gr

ante

d on 1 Oc

tob

er 2019 u

nde

r the 20

13 Pla

n – to exer

cis

e thi

s opti

on, A

y has to p

ay a

exe

rcis

e pri

ce of £4.98 pe

r sha

re, wh

ich h

as be

en di

scou

nte

d by 20 pe

r cent

As o

f 31 Dece

mber 2021

, none o

f the dire

ctor

s had re

gist

ered an in

teres

t or sho

rt po

siton in t

he sha

res, u

nder

lyin

g share

s or

deb

entu

res of th

e Comp

any or any of it

s as

socia

ted cor

pora

tion

s that was r

equir

ed to be r

ecord

ed pur

suan

t to sec

tion 352 o

the Securites

and Futures Or

dinance, or

as other

wise notifed to the

ompan

y and The

Stock E

change of Hong

Kong Lim

ted

pursuant to the Model Code for

Securites T

ransactions by Directors of

Liste

ssuers.

Shareholder diluton

All a

wards vest

ing un

der th

e Grou

’

s sh

are pla

ns are sa

tisf

ed by t

he tran

sfer o

f exist

ng shar

es or

, w

here a

ppropr

iate, t

suance o

f new sha

res. T

he Gro

’

s sha

re plan

s contain m

onito

red limt

s th

at govern b

oth t

he aggr

egate a

moun

t of award

tha

t may b

e grante

d and th

e amoun

t of shar

es that m

ay be i

ssue

d to sat

isf

y any su

bseq

uent exer

cise of a

wards

. Thes

e limts

are in li

ne wit

h thos

e state

d in the Inve

stmen

t Ass

ociat

on’

s Pr

incpl

es of Remu

nerat

ion and t

he ter

ms of ou

r listn

g on The S

tock

Exchange of Hong K

ong Limted.

The G

roup h

as t

wo empl

oyee ben

eﬁt tr

ust

s that ar

e admins

tered by i

ndep

enden

t tru

stee

s and whi

ch hold s

hares t

o meet

vari

ous obl

igato

ns und

er the G

roup

’s shar

e plans

. As e

ach execu

tive dire

ctor i

s withn t

he clas

s of be

neﬁcar

y of t

hes

e tru

sts

they a

re deem

ed, fo

r the pu

rpo

ses of t

he Com

panie

s Act 2006, t

o have an int

eres

t in the tr

ust

s’ sha

res.

tail

s of th

e tr

ust

s’ sh

areh

old

ing

s are se

t out i

n Not

e 28 to t

he ﬁna

nca

l stat

eme

s on

ge 392

Historcal L

TIP aw

ards

The c

urren

t posi

ton on ves

ting fo

r unveste

d L

IP award

s from t

he 2019 and 2020 per

form

ance yea

rs ba

sed on c

urren

per

for

mance an

d share p

rice as o

f 31 Dec

ember 2021 i

s set ou

t in the ta

bles b

elow

. T

he TSR p

eer gro

up for bo

th awar

ds is

as se

t out on p

age 15

Cur

rent p

osi

ton o

n the 2

020

–

2 L

TIP award

: proje

cte

d part

ial ves

tin

Measure

eightng

Performance for

minmum vesting (25%

)

Performance for

maximum vesting (100%)

202

0–2

2 L

TIP a

ess

men

t as of 3

1 Dec

emb

2021

TE in 2022 p

lus CE

T1 u

nder

of th

e high

er of 13% or t

minmum

regulator

requirement

33%

.5%

11.0

TE below

hreshold therefore

indcative 0% vesting

Relative TSR perfo

rmance

aga

inst t

he pe

er grou

33%

edian

Upper quartile

TSR p

osit

one

d below t

he me

dian

theref

ore indcative 0% vesting

Strategic

measures

arge

ts se

t for st

rate

gic me

asur

es linke

d to

the business s

trategy

rack

ing ab

ove targe

t per

for

mance

theref

ore indcative partial vestin

Cur

rent p

osi

ton o

n the 2

021–23 L

TIP awar

d: pro

ject

ed pa

rtia

l vest

ing

Measure

eightng

Performance for

minmum vesting (25%

)

Performance for

maximum vesting (100%)

202

1–23 L

IP as

ssm

ent a

s of 31 D

ece

mbe

2021

TE in 2023 p

lus CE

T1 u

nder

of th

e high

er of 13% or t

minmum

regulator

requirement

30%

.0%

10.0%

TE at threshold therefore indcative

part

ial v

esting

Relative TSR perfo

rmance

aga

inst t

he pe

er grou

30%

edian

Upper quartile

TSR p

osit

one

d below t

he me

dian

theref

ore indcative 0% vesting

Sustainablit

arg

s set fo

r sust

ainab

lit

y mea

sure

s linked

to the bus

iness strategy

rack

ing ab

ove targe

t per

for

mance

theref

ore indcative partial vestin

Strategic

measures

arget

s se

t for st

rate

gic me

asur

es linke

d to

the business s

trategy

rack

ing ab

ove targe

t per

for

mance

theref

ore indcative partial vestin

The C

ommit

tee a

sses

ses t

he value o

f L

P awards o

n vestin

g and ha

s the ﬂex

iblit

y to ad

just if t

he for

mulai

c outco

me is no

con

sidere

d to be an a

ppropr

iate r

eﬂecti

on of th

e perf

orma

nce achi

eved and to a

void win

dfall ga

ins.

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

Addit

remuneration disclosures

The a

pproa

ch use

d to dete

rmin

e Grou

p-wide t

otal di

scret

onar

y in

cent

ves in 2021 is exp

laine

d on pag

e 142 of this r

epor

The follo

wing tables sho

w the income

statement charge

for these incentv

es.

Income statement charge for Group discr

etonary incentves

2021

2020

ota

l discretonary incentv

990

Les

s: defe

rre

d discr

eton

y ince

ntve

s that w

ill be c

harge

s in fu

ture ye

(195)

(

Plus

: curre

nt year c

harge f

or def

erre

d dis

creto

nar

y in

cent

ves fr

om pri

or year

296

ar in wh

ich i

nco

me st

ate

men

t is exp

ted t

o reﬂ

ect

deferred discretonary incentves

Act

ual

Expected

2020

2021

202

3 and

bey

ond $

Discretonary incentves

defer

red

from 20

19 and

earlier

101

Discretonary incentves

defer

red

from 20

Discretonary incentves

defer

red

from 20

–

106

144

171

147

Allocation of the Group

’s earn

ings bet

een stakeholders

When considerng

roup v

ariable remuneration, the Committee tak

es account of shareholders’

concerns about relative

exp

endit

ure on p

ay and d

eter

mines t

he allo

cation o

f earn

ings to e

xpen

ditur

e on remu

nerat

ion care

full

, and h

as appro

ache

thi

s allocat

ion in a di

scplin

ed way over t

he pas

t ﬁve year

s. Th

e table b

elow sh

ows the di

strb

utio

n of ear

nings b

ween

stake

holde

rs over t

he pas

t ﬁve year

s. Th

e amoun

t of corp

orat

e tax

, inclu

dng the b

ank lev

, i

s inclu

ded in t

he tabl

e beca

use

it is a si

gnﬁcant pa

yme

nt and ill

ustra

tes th

e Grou

’

s co

ntri

buton t

hrou

gh the ta

x sys

tem.

Act

ual

Allocation

2021

2020

2019

2018

2017

2021

2020

2019

2018

2017

Staff costs

,668

6,886

6,7

Corporate taxation

includ

ng lev

138

,19

Paid

to shareholder

in div

dends

375

720

Appro

ach to ris

k adjust

ment

Indi

vdu

al remun

erati

on is alig

ned wi

th our lo

ng-ter

m inte

rest

s and th

e time f

rame over w

hich ﬁna

ncal ri

sks cr

stalli

se:

•

For re

levant coll

eagu

es, a p

ropor

tion o

f variab

le remu

nerat

ion is de

livere

d in the f

orm of a

wards th

at are de

ferr

ed for a

suf

ﬁcent p

erio

d of time d

urin

g which r

isk ad

justm

ent

s can be app

lied.

•

The a

bilt

y to appl

y per

form

ance ad

justm

ent th

rough t

he redu

ction i

n the valu

e of any defe

rred va

riabl

e remun

erati

on award

through non-v

esting due to perform

ance

consideratons and share price mov

ement over the deferral period.

The o

perat

ion of in-ye

ar adju

stmen

, malus a

nd claw

back i

s summ

aris

ed in the f

ollowi

ng tabl

Critera includes

Applicaton

Indivdual

level

•

eeme

d to ha

ve: (

i) caus

ed in f

ull or i

n part a

mat

eria

l los

s for th

e Grou

p as a res

ult of r

eckl

ess

glige

nt or wil

ful a

ction

s, or (i) exhib

ted

inapproprate behaviours, or (

ii)

applied a lack

of appropriate supervison and due di

lgence

•

The indvi

dual fai

led to meet appro

priate standa

rds

of ﬁt

nes

s and pro

prie

•

In-yea

r adju

stme

nt, m

alus an

d claw

bac

k may

be ap

plie

d to all or p

art o

f an award a

t the

Committee’

s discreton

Business unit

and/

Group level

•

Material resta

tement of the Group

’

s ﬁnanc

als

•

Signﬁ

cant failure in

isk

management

•

Discovery of endemic problems i

n ﬁnancal

repor

ting

•

Finan

cal los

ses

, due t

o a mate

rial b

reac

h of

regulator

y gu

idelnes

•

The ex

ercise of

regulator

y or go

vernment ac

tion

to re

capit

alse t

he Gr

oup fo

llowin

g mate

rial

ﬁnanc

al losses

•

In-yea

r adju

stme

nt, m

alus an

d claw

bac

k may

be ap

plie

d to all or p

art o

f an award a

t the

Committee’

s discreton

177

Standard Chartered

– A

nnu

al Rep

ort 202

Directors’ report

Pillar 3 discl

osure

s on material ri

sk takers’ r

emuner

ation and di

sclos

ures on t

he highes

t paid

emplo

yees

Identif

cation

of material risk tak

Indi

vdu

als have b

een id

entﬁe

d as mate

rial r

isk taker

s in acco

rdanc

e with t

he quan

titat

ve and qu

alitat

ve crit

era se

t out in

the Eu

rope

an Bank

ing Auth

orit

’

s Reg

ulato

y T

chnica

l Stand

ard (EU 604/2014 ad

opte

d by the PR

A that c

ame into f

orce in

Jun

e 2014

) and th

e Remune

ratio

n Part of th

e PRA Ru

lebo

ok in whi

ch upda

ted ide

ntﬁcat

on crit

era re

latin

g to the C

apital

Requi

remen

ts Di

rect

ve V have be

en tran

spos

ed. M

ateri

al ris

k takers a

re ident

ﬁed on a: (i

) St

andard C

hart

ered PLC (

Gro

)

;

and (i

) s

olo leve

l conso

lidate

d enti

tes un

der Sta

ndard Ch

arte

red Ba

nk UK (Solo

) b

asis

Quantit

atve

ritera

The quantitatve critera i

dentf

y emplo

yees who:

•

have b

een a

warded t

otal re

muner

ation o

f £658,0

00 or m

ore in th

e previo

us ﬁnan

cal year

•

are w

ithn th

e 0.3 pe

r cent of t

he num

ber of em

ployee

s on a Gro

up or So

lo bas

is who h

ave bee

n awarde

d the hi

ghest t

otal

remuner

ation in the preceding ﬁnan

cal

year

•

were a

warded t

otal re

muner

ation i

n the pre

cedin

g ﬁnancal ye

ar tha

t was equ

al to or gre

ater t

han the l

owest to

tal

rem

unerat

ion awa

rded th

at year to c

erta

in spe

cif

ed grou

ps of em

ployees

Empl

oyees ide

ntﬁed by o

nly th

e quant

itat

ve crite

ra can be e

xclude

d from b

eing de

signa

ted as m

ater

ial ris

k taker

s if it can be

evid

ence

d that th

ey do not h

ave the a

bilt

y to ha

ve a mater

ial imp

act on th

e risk p

roﬁle of t

he Gro

up or th

e Solo e

ntit

Qualitat

v

e critera

The qualitatve

critera broadly identﬁ

the following emplo

yees:

•

director

s (both executive and non-execut

ive

) of St

andard Chartere

d PL

•

a mem

ber of s

enior m

anage

ment

, which i

s deﬁne

d as one o

r more of t

he fol

lowing:

–

a s

enior m

anage

r under t

he PR

A or FC

A Senio

r Manag

er Regim

–

a m

ember o

f the G

roup M

anage

ment T

eam an

d the So

lo Man

ageme

nt T

eam

•

the l

evel ben

eath t

he Man

ageme

nt T

eams

•

sen

ior emp

loyees wi

thn the Au

dit, C

ompli

ance, Leg

al and Ris

k fun

ction

•

senior employ

es with

n material business unit

•

employees who a

re member

s of specifc committees

•

emp

loyees wh

o are abl

e to intia

te or app

rove Credit R

isk exp

osure

s above a cer

tain t

hresh

old and s

ign of

f on trad

ing bo

tran

sact

ions at o

r above a sp

ecif

c value a

t risk li

mt.

For t

he pur

pose o

f the Pill

ar 3 table

s on pag

es 178 and 18

0, unles

s oth

wis

e state

d, sen

ior man

ageme

nt is deﬁn

ed as di

recto

of St

andar

d Chart

ered PLC (both e

xecuti

ve and no

n-execut

ive

)

, s

enior m

anag

ers un

der th

e PRA o

r FCA S

enior M

anage

r Regime

and m

ember

s of th

e Gro

up Mana

geme

nt T

am.

Material risk tak

ers

’

emuneration deliv

Remun

erati

on for ma

teri

al risk t

akers wa

s deli

vered in 2021 th

rough a co

mbina

ton of s

alar

, p

ensio

n, ben

eﬁts a

nd varia

ble

remuneration

ari

able rem

uner

ation fo

r mate

rial r

isk taker

s is st

ruct

ured i

n line wit

h the PR

A and FC

’

s re

mune

ratio

n rule

s. For t

he 2021

per

for

mance ye

, th

e follow

ing str

uct

ure app

lies:

•

At lea

st 40 p

er cent of a m

ater

ial ri

sk taker

’

s var

iable r

emune

ratio

n will be d

efer

red over a min

mum pe

riod o

f four yea

dep

endin

g on the ca

tego

y of mat

erial r

isk take

•

Non-

defer

red var

iable r

emun

eratio

n will be d

eliver

ed 50 pe

r cent in sh

ares

, subje

ct to a minm

um 12 mon

th rete

ntion p

erio

and 50 p

er cent i

n cash.

•

At lea

st 50 pe

r cent of de

ferr

ed vari

able rem

unera

tion w

ill be de

livere

d entir

ely in sh

ares

, subje

ct to a minmu

m 12 mont

ret

entio

n peri

od (

wit

h the exce

ption o

f defer

red sh

ares a

warded t

o risk m

anage

, which ar

e subje

ct to a six m

onth mi

nmum

ret

entio

n peri

od in lin

e with th

e regu

latio

)

•

For so

me mat

erial r

isk ta

kers

, part o

f their 2021 var

iable r

emun

eratio

n may b

e in share a

wards w

hich vest af

ter a m

inmum of

four years, subject to

the satisfacton of performance measures.

•

ari

able rem

unera

tion a

wards are s

ubject t

o remun

erat

ion adju

stme

nt provi

sons

. This pr

ovides t

he Gr

oup wit

h the abi

lt

y to

red

uce or revo

ke v

ari

able rem

unera

tion in r

espe

ct of a ri

sk, co

ntrol o

r condu

ct issu

e, event or b

ehav

iour.

•

Mat

erial r

isk ta

kers are s

ubject t

o a 2:

1 m

aximu

m ratio o

f variab

le to ﬁxed r

emune

ratio

178

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Addit

remuneration disclosures

Material risk tak

ers

’

def

erred v

ariable remuneration deliv

ear 0 (

grant)

March 20

Senior

managers

Risk managers

Higher paid

Non-higher paid

Other material

sk t

ake

ate

ria

l ris

k take

rs wi

th 2021 t

ota

l rem

uner

ati

on eq

ual t

o or gre

ate

r tha

n £50

0,00

0 or wi

th var

iabl

e com

pen

sat

ion e

qual t

o or gr

eat

er th

an 33 p

er cen

t of to

tal

mune

rat

ion ar

e cla

ssi

f

ed as ‘

hig

her p

aid

’

. M

ater

ial r

isk t

aker

s be

low th

is th

resh

old a

re cla

ed as ‘n

on-h

ighe

r pai

d’

fer

ral i

s ﬁve ye

ars f

or ‘oth

er ma

ter

ial r

isk t

aker

s’ wh

o are: i) hig

her p

aid; an

d i) mem

ber

s or c

hair

s of re

leva

nt ri

sk com

mit

tee

Material risk tak

ers

’

def

erred remuneration in

2021

Senior management

l ot

her m

ate

rial r

isk t

aker

s $0

Cash

Sta

rt of t

he year (1 J

anua

Unv

ested

114

,643

,011

,632

351

,097

126

,793

224,304

ested and

unexercised

–

Imp

act of ch

ange

s to mat

eria

l ris

k taker po

pula

tion i

nclu

dng

aver

s dur

ing 2020 and jon

ers i

n 2021

(

)

(

(21,569)

(

03)

(

Sta

rt of t

he year (1 J

anua

) (

aft

er adj

ustm

ent

Unv

ested

0,6

14,

96,4

0,027

490

214,537

ested and

unexercised

–

6,881

–

6,881

Awarde

d duri

ng the ye

34,906

2,858

32,0

140

,888

52,

268

620

otal r

educ

tion d

urin

g the ye

ar due to m

alus o

r claw

back

;

or p

erfo

rman

ce me

asure

s not b

eing m

(

5,1

–

(

(36,4

)

(

otal d

efer

red re

mune

rati

on pai

d out in t

he ﬁnan

cal year

(10,358)

(1,

(

)

(

,90

)

(

,039)

Clo

se of th

e year (31 D

ecem

ber)

Unv

ested

120,

058

15,

875

104,

120,

271

ested and

unexercised

–

280

–

5,280

Material risk tak

ers

’

2021 ﬁx

and variable

remuner

ation

Senior

management

$000

All other

material

risk tak

ers

$000

Fixed

rem

uneration

Number of emplo

yees

608

otal

ﬁxed remuneration

Cash-based

Of w

hich de

ferr

–

Shares or

other share-li

nked

instr

uments

2,325

–

Of w

hich de

ferr

–

Other

forms

–

Of w

hich de

ferr

–

ariable

remuner

ation

2, 3

Number of emplo

yees

otal

variable remuneration

,584

272,

218

Cash-based

138

,735

Of w

hich de

ferr

66,858

Shares or

other share-li

nked

instr

uments

33,57

133,4

Of w

hich de

ferr

24,

Other

forms

–

Of w

hich de

ferr

–

otal

remuneration

xed re

mun

era

tio

n incl

ude

s sal

, c

ash al

lowan

ces

, be

neﬁt

s and p

sion

, in th

e cas

e of th

e Chai

rma

n and IN

EDs

, any fe

r som

e mat

eri

al ri

sk take

, par

t of t

heir 202

1 vari

abl

e rem

uner

ati

on ma

y be de

live

red i

n shar

e awa

rds

, wit

h vest

ing s

ubje

ct to p

erf

orm

anc

e mea

sur

es.

ese a

ward

s are sh

own o

n a fac

e value b

is. A

s the C

hai

rma

n and IN

EDs ar

e not e

ligb

le to r

ece

ive var

iab

le re

mun

erat

ion t

hey ar

e not i

nclu

ded i

n thi

s dat

e rat

io be

twe

en ﬁx

ed and v

ari

able r

emu

nera

tio

n for a

ll mat

eri

al ri

sk ta

kers i

n 2021 was 1

:0.89

Minmum

of 40% of 2

021 variable

remuneration

Minmum

of 40% of 2

021 variable

remuneration

Minmum

of 40% of 2

021 variable

remuneration

Minmum

of 40% of 2

021 variable

remuneration

179

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Material risk tak

ers

’

gregate 20

21 remuneration by

business

Corporate,

Commercial &

Institu

tonal

Banking

$000

Consumer,

Pri

vate

Business

Banking

$000

Central

management

& ot

her

$000

2021

50,03

283,013

ivat

e Ban

kin

g incl

ude

s W

alth M

ana

gem

ent

ntr

al man

age

men

t & oth

er inc

lud

es Gr

oup e

xecu

tive d

ire

ctor

s, t

he Ch

air

man

, INED

s, co

ntro

l fu

nct

ion

s, su

ppo

rt f

unct

ion

s and c

entr

al ro

les

teri

al risk t

akers

’ sig

n-o

n and sever

ance p

ayme

s in 2021

Senior management

l oth

er ma

rial r

isk t

aker

Number of

employ

otal amount

$000

Number of

employ

otal amount

employ

$000

Sign

-on payments

–

Guaranteed incen

tves

2,683

116

Sev

erance paym

ents

–

Remuneration at or abo

EUR1 mil

lon

The t

able b

elow is pr

epare

d in accor

dance w

ith Ar

ticle 450 o

f the EU C

apital Re

quirem

ent

s Regula

tion a

s it form

s par

t of

UK domestic law

Remuneration band

EUR

Number of

employ

1,000

,000–

1,500,

000

1,500,

001–

2,000

,000

2,000

,001–

2,500

,000

2,500,

001–3,

000,000

3,000

,001–

3,500,000

3,500,

001–4,000

,000

4,000

,001–4,500

,000

4,500,

001–5,

000,

000

5,000

,001–

5,500,

000

5,500,

001–6,000,

000

–

6,000

,001–6,500,

000

–

6,500,

001–

,000

–

,000

,001–

,500

,000

–

,500,

001–8,000

,000

–

8,000

,001–8,500,

000

8,500,

001–9

,000,

000

000,

001–

,500

,000

–

500,0

–

0,000,0

–

10,0

00,0

01–10,

0,000

175

Remuneration of the ﬁv

e highest paid indviduals and the remuneration of senior management

In lin

e with t

he requ

ireme

nts o

f The St

ock E

xchang

e of Hon

g K

ng Limt

ed, th

e follow

ing tab

le set

s out

, on an ag

grega

sis, t

he annu

al remu

nerat

ion of

: (

i) the ﬁve h

ighes

t paid emp

loyees; an

d (



) sen

ior man

agem

ent for t

he year en

ded

31 December 20

21.

Components of remuneration

Five

highest

paid

$000

Senior

management

$000

Salar

, cash allowances and ben

eﬁts in kind

16,7

594

Pension

contributons

561

iable r

emun

erat

ion awa

rds pai

d or rec

eivab

494

41,6

Payments made on appointment

–

999

Remuneration

for loss of ofﬁce

(

contractual or

other

)

–

Other

–

otal HKD

equivalent

,070

541

The ﬁve

highest paid

indviduals include

Bill Win

ters

enio

r man

age

ment c

omp

ris

es th

e exec

uti

ve dir

ecto

rs a

nd th

e mem

ber

s of th

e Gro

up Ma

nag

eme

nt T

m at any p

oint d

ing 2021

180

Standard Chartered

– Ann

ual Re

por

t 2021

Directors’ report

Addit

remuneration disclosures

The t

able b

elow show

s the em

olum

ent

s of: (i

) t

he ﬁve high

est pa

id empl

oyees; and (i

) sen

ior man

ageme

nt for t

he year en

ded

31De

cembe

r 20

Remuneration band

HKD

Remuneration band

USD equivalent

Number of

employ

Five

highest

paid

Senior

management

21,

000,

001–

21,500,

000

2,7

02,564–

2,7

66,

910

–

23,500,

001–

24,

000,000

3,02

4,297

–3,

088,6

–

25,000

,001–

25,500

,000

3,217

,338

–

1,6

–

26,

000,00

1–

26,500

,000

,031

–3,410,

378

–

26,500

,001–

000,

000

3,410,

378–

3,47

725

–

,500,

001–

28,000

,000

3,539

071–3,60

3,4

–

30,

0,001

–31

,00

0,000

2–

–

36,000

,001–

36,

00,

000

4,6

32,966

–4

,697

313

–

36,500,

001–3

,000,

000

4,697

–4,7

1,6

–

0,001

–4

0,00

5,083,39

–

5,14

–

46,000

,001–46,500,

000

9,90

–

,000,

001–4

500

,000

–

,11

,941

–

48,000

,001–48,500,

000

,288–6,2

1,63

75,500

,001–

000,000

,716,360

–9

,780

,000,

001–

500

,000

9,9

–

91,000

,001–

1,500

,000

11,711

09–

11,

5,456

–

eni

or ma

nag

emen

t com

pri

ses t

he exe

cut

ive di

rect

s and t

he me

mber

s of t

he G

roup M

ana

gem

ent T

am at a

ny poin

t dur

ing 202

The exchange rat

es use

d in this re

port

Unle

ss an alt

erna

tive exch

ange rat

e is det

ailed in t

he not

es to th

e relevan

t table, t

he exchan

ge rate

s use

d to convert t

dis

closu

res to US d

ollar

s are set o

ut in th

e table b

elow.

2021

2020

EUR

0.8

421

0.8

827

GBP

0.7

7833

HKD

Christne Hodgson

Chai

r of the Rem

unera

tion Co

mmitt

17 Feb

ruar

y 202

181

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Other

isclosur

The D

irect

ors’ re

por

t for th

e year end

ed 31 De

cembe

r 20

comp

rise

s page

s 90 to 19

1 of thi

s repor

t (

geth

er wit

h the

ction

s of the A

nnual Rep

ort in

corp

orate

d by refer

ence

The C

ompa

ny has cho

sen, in a

ccorda

nce wit

h sect

ion 414C(11)

of th

e Comp

anies Act 20

06, an

d as not

ed in thi

s Direct

ors’

rep

ort

, to incl

ude cer

tain m

atter

s in it

s Str

ategi

c repor

t tha

woul

d othe

wise b

e discl

ose

d in this Di

recto

rs’ rep

ort

. Bot

h the

Str

ategi

c repor

t and t

he Dire

ctor

s’ repo

rt ha

ve been dr

awn up

and pr

esen

ted in ac

cordan

ce with E

nglish c

ompany la

, an

the l

iablite

s of the d

irecto

rs in co

nnect

ion wi

th that r

epor

shal

l be subj

ect to th

e limtat

ions a

nd rest

ricto

ns prov

ided by

suc

h law

. Ot

her info

rmat

on to be d

isclo

sed in t

he Dire

ctor

s’

rep

ort is g

iven in th

is sect

ion. I

n addito

n to the r

equir

ement

set o

ut in th

e Discl

osure G

uida

nce and T

rans

paren

cy Rul

rel

ating t

o the Ann

ual Repo

, infor

mato

n requir

ed by UK

Lis

tng Rule 9

8.4 to be i

nclud

ed in th

e Annu

al Repor

t, wh

ere

appl

icable, i

s set ou

t in the t

able be

low and cro

ss-ref

erence

Inform

ation to b

e include

d in the Annu

al Report

(UK List

ng Rules 9

.8.4

)

Rel

evant Li

ng Ru

Page

LR 9

.4 (1) (2) (5-

) (

A) (B

)

LR 9

.4 (

)

154, 15

and 15

Princpal ac

tivtie

e are a l

eadin

g inter

nato

nal ban

king gr

oup, wit

h over

160ye

ars of h

istor

y i

n some o

f the wor

ld’s most d

ynam

mar

kets

. Our p

urpo

se is to d

rive com

merce a

nd pros

peri

thr

ough ou

r uniqu

e diver

st

. The G

roup’

s roo

ts in t

rade

ﬁnan

ce and com

mercia

l banki

ng have b

een at t

he core o

f its

succ

ess th

rough

out it

s hist

, bu

t the G

roup is n

ow more

bro

adly b

ased a

cross C

ons

umer, Private a

nd Bus

ines

s Bank

ing

in it

s foo

tprin

t market

s in A

sia, Af

ric

a and the M

iddle Eas

The G

roup o

perat

es in th

e UK and over

sea

s thro

ugh a num

ber

of subsid

aries, branches

and ofﬁc

es.

Further det

ails on

our business, incl

udng

key performance

indcators,

can b

e fou

nd wi

thn t

Strategic repo

on pag

es 1 to 3

Fair

, balanced and under

standable

On b

ehalf of t

he Bo

ard, th

e Audit Co

mmitt

ee has r

eviewed

the A

nnual Re

port a

nd the p

roces

s by which t

he Gro

bel

ieves tha

t the An

nual Rep

ort

, is fair, balan

ced and

understandable and pro

ides

he i

nfor

mat

on necessar

for s

hareh

older

s to as

ses

s the po

sito

n and per

for

mance,

str

ateg

y and bus

ines

s mode

l of the G

roup. Fo

llowin

g its

revi

, th

e Audit Co

mmitt

ee has a

dvi

sed th

e Board t

hat

suc

h a state

ment can b

e made i

n the An

nual Repo

ts aft

er the b

alance she

et date

For de

tails o

n post b

alance s

heet eve

nts

, see N

ote 37 to t

ﬁnancal

statem

ents.

Code for Financal R

eport

ing Disclosure

The G

roup’

s 2021 ﬁnan

cal stat

ement

s ha

ve been p

repar

ed in

accordance

ith

princples of

the UK Finance

Disclosure

Code for F

inancal R

orting Disclosure

Disclosure of informaton to auditor

As f

ar as th

e direct

ors ar

e aware, th

ere is n

o relevant a

udit

informaton of

hich

the Group statutor

y auditor

, EY

, is

una

ware. Th

e direct

ors h

ave taken all r

easo

nable s

teps t

asc

erta

in any relevan

t audit in

form

aton an

d ensur

e that t

Group statutor

y auditors are

aware of such i

nformaton.

Viablity and goin

g concern

ving ma

de appr

opria

te enq

uires

, the B

oard is s

atis

fe

tha

t the Co

mpany an

d the Gr

oup as a w

hole h

as ade

quate

res

ource

s to cont

inue in op

erat

ion and m

eet it

s liabli

tes

as th

ey fall du

e for a per

iod o

f 12 mont

hs fro

m 17Febr

uar

2 and

therefore continues

to adopt the go

ing concern

basis in preparing the ﬁnanc

al statement

The d

irecto

rs’ v

iablit

y sta

teme

nt in resp

ect to t

he Gro

up can

be fo

und in t

he Stra

tegic r

epor

t on pa

ges 86 an

d 87

, whil

e the

dire

ctor

s’ going c

oncer

n consi

derat

ons of t

he Gro

up can be

found on page 318.

Sufﬁcency of public ﬂoat

As a

t the dat

e of thi

s repor

t, t

he Com

pany has m

aintan

the p

rescr

ibe

d publi

c ﬂoat un

der th

e rule

s govern

ing the

listng

of securites on

The Stock Exchange o

f Hong K

ong

Limt

ed (

e “Ho

ng Kong Lis

tng Rule

s”), base

d on the

informaton publicly

ailable to the Compan

y and with

the knowledge of the d

irector

Research and de

velopment

ring t

he year, the Gro

up invest

ed $1.

89 billo

n (20

20:

.59billon) in rese

arch and d

evelopm

ent, o

f which $

billo

n (20

20: $0.

78 billon

) was r

ecogn

ised a

s an expe

nse. T

res

earch an

d develop

ment inve

stmen

t prim

arly re

late

d to the

planning, analysis, design, dev

elopm

ent, testing, integraton,

deployment and in

tial support of technolog

systems

Poli

tcal donations

The G

roup h

as a po

licy in p

lace wh

ich proh

ibts d

onat

ions

being made that w

ould: (

improperl

inﬂuence legisla

ton

or re

gulat

ion, (i

) p

romo

te poli

tcal vi

ews or ide

olog

es, an

(

ii) fun

d poli

tcal cau

ses. I

n alignme

nt to thi

s, no p

olitca

don

ation

s were ma

de in the ye

ar ende

d 31 De

cembe

r 20

Directo

rs and

hei

r interests

The m

embe

rshi

p of the B

oard, t

oget

her wi

th thei

bio

graphcal d

etail

s, are gi

ven on pa

ges 9

1 to 9

. Deta

ils of

the d

irecto

rs’ b

eneﬁcal an

d non-b

eneﬁcal in

teres

ts in t

ordi

nar

y sha

res of th

e Comp

any are show

n in the D

irecto

rs’

rem

unerat

ion rep

ort o

n page

s 14

1 t

o 180. Th

e Grou

p opera

tes

a num

ber of sh

are-b

ased a

rrang

ement

s fo

r its di

rector

s and

employees.

tail

s of th

ese a

rra

nge

ment

s ar

e incl

ude

d in th

e Dir

ecto

rs’

mune

rat

ion r

epo

rt an

d in Not

e 31 to t

he ﬁn

anca

l sta

tem

ent

182

Standard Cha

rtered

– Ann

ual Re

por

t 2021

Directors’ report

Other disclosures

The C

ompa

ny has rec

eived f

rom ea

ch of the I

NEDs an an

nual

conﬁrmaton

of independence pursuant to Rule

13 of the

Hon

g K

ong L

istng Ru

les and s

till con

sider

s all of t

he non-

executive

directors to be independent.

At no ti

me dur

ing the ye

ar did any dir

ector h

old a mat

eria

inte

rest in any co

ntrac

ts of s

ignﬁcance w

ith th

e Comp

any or

any of it

s sub

sidar

y un

dert

akin

gs.

In acco

rdanc

e with t

he Comp

anies Act 20

06, we h

ave

established a process

requirng di

rectors to disclose proposed

outside busines

s i

erests before an

y are entered into. This

enab

les pr

ior as

ses

sment o

f any conﬂict o

r pote

ntial co

nﬂict

of int

erest a

nd any impa

ct on tim

e commit

ment

. On be

half

of th

e Boar

d, the G

overna

nce and N

ominat

on Com

mitt

revi

ews exi

stng con

ﬂicts o

f inter

est ann

ually to c

onsid

er if

they c

ontin

ue to be co

nﬂict

s of inte

rest

, and als

o to revi

st the

ter

ms up

on whic

h they were d

eter

mined t

o be. Th

e Board

is sa

tise

d that o

ur proce

sse

s in this r

espe

ct conti

nue to

operat

e effect

ively

Sub

ject to co

mpany la

, th

e Art

icles o

f Ass

ociat

on and

the a

utho

rit

y gran

ted to di

recto

rs in ge

neral m

eeti

ng, th

dire

ctor

s may exer

cise all t

he power

s of th

e Comp

any and

may delegate authorites to c

ommitte

es. The Articles of

Asso

ciat

on contain provisons relating

to the appointment

re-election and r

emova

l of di

ctors. Newly ap

pointed

dire

ctor

s retir

e at the AGM fo

llowin

g appoin

tmen

t and are

eligble

for election. All directors ar

e nominated for

annual

re-election by

shareholder

subject to

continued satisfactory

performance

based upon the

ir annual

sessment.

Non-executi

director

s are appointed for an intial per

iod of

one ye

ar and su

bject to (re

)elect

ion by sha

rehol

der

s at A

Ms,

in lin

e with th

e UK Co

rpor

ate Gove

rnan

ce Code 201

The C

ompa

ny has gran

ted ind

emnti

es to all of i

ts dir

ector

on terms consistent with

he a

pplicable statutor

y pro

visons.

alif

yn

g third-pa

y ind

emnt

y provi

sons f

or the p

urpo

ses

of se

ction 2

4 of the C

ompa

nies Act 2006 we

re accor

dingl

in for

ce duri

ng the co

urs

e of the ﬁ

nancal ye

ar ende

31De

cembe

r 20

21 an

d remain i

n force at t

he date o

this report.

Qualif

yn

g pension s

cheme ind

emntie

Qualif

yng pension scheme indemn

y provisons

(

as deﬁn

ed by se

ction 2

35 of t

he Com

panies Ac

t 2006

)

were in f

orce du

ring t

he cour

se of t

he ﬁnan

cal year en

ded

31De

cembe

r20

21 fo

r the be

neﬁt of t

he UK’s pensi

on fu

corporate trustee (

Standard Chartered T

rustees (UK) Lim

ted),

and re

main in fo

rce at th

e date of t

his rep

ort

Signﬁcant agre

ements

The C

ompa

ny is not pa

y to any sig

nﬁcant agr

eemen

ts t

hat

woul

d take ef

fect

, alter o

r term

inate fo

llowin

g a chang

e of

cont

rol of t

he Com

pany

. Th

e Comp

any does n

ot have

agre

emen

ts w

ith any dire

ctor or e

mployee t

hat wou

ld provid

compensation for loss of ofﬁce or

employment resulting

fro

m a takeover, except th

at provi

sons of t

he Co

mpany’s

sha

re sche

mes and p

lans m

ay caus

e opti

ons and a

wards

grant

ed to em

ployee

s under s

uch sch

emes an

d plan

s to vest

on a t

akeover.

Future development

s in th

e busine

ss of t

he Group

An in

dcatio

n of likely f

utu

re develo

pmen

ts in t

he busi

ness o

the G

roup i

s provid

ed in th

e Strat

egic re

por

Result

s and divd

ends

2021

: paid i

nte

rm div

den

d of 3 ce

nts p

er or

dina

ry s

har

(2020: no int

erm di

vde

nd pai

2021

: prop

ose

d ﬁna

l divd

end o

f 9 cent

s pe

r ordi

nar

y sh

are

(2020: paid ﬁ

nal div

den

d of 9 cent

s pe

r ordin

y sha

)

2021

: tot

al div

den

d of 12 ce

nts p

er or

dina

ry s

har

(2020: tot

al div

dend

, 9 cent

s per o

rdina

y share

)

Share capit

The i

ssue

d ordin

y shar

e capital o

f the Co

mpany was

red

uced by a to

tal of 7

,06

3,16

2 over t

he cou

rse o

f 20

1. Thi

was du

e to the c

ancella

tion o

f ordinar

y shar

es as pa

rt of th

Com

pany’s t

wo share b

uy-ba

ck progr

ammes

. No ordi

nar

sha

res were i

ssue

d duri

ng the ye

. Th

e Comp

any has on

cla

ss of or

dinar

y sh

ares

, which car

rie

s no righ

ts t

o ﬁxed

inco

me. On a sh

ow of han

ds, ea

ch mem

ber pre

sent h

as the

rig

ht to one vo

te at our g

ener

al meet

ings

. On a po

ll, each

mem

ber is e

ntitl

ed to on

e vote for eve

y $2 nomin

al value o

share cap

ital held.

The issued nomi

nal value

of the or

dinar

y shar

es represents

85.

3 p

er cent of t

he tot

al iss

ued no

minal val

ue of all sh

are

capital. The

remainng 1

.7 per

cent comprises preference

sha

res, w

hich ha

ve prefe

renti

al right

s to in

come an

d capital

but w

hich, i

n gener

al, do no

t confer a r

ight t

o atten

d and vote

at our

general meetings.

Fur

the

r det

ail

s of th

e Gro

’s sh

are c

apit

al can b

e fou

nd in

te 28 to t

he ﬁn

anc

al sta

tem

ent

The

re are no s

pecif

c re

stri

ctons o

n the si

ze of a hold

ing nor

on th

e tran

sfer of s

hares

, which a

re bot

h govern

ed by the

gen

eral prov

ison

s of the A

rtic

les of A

sso

ciaton a

nd prevailn

leg

islat

on. Th

ere are n

o speci

fc r

estr

icton

s on votin

g righ

and t

he dire

ctor

s are not a

ware of any agr

eeme

nts b

ween

hol

der

s of the C

ompany

’

s s

hares t

hat ma

y resul

t in rest

ricto

on th

e tran

sfer of s

ecur

ites o

r on votin

g right

s. N

o per

son ha

any spe

cial ri

ght

s of contr

ol over the C

omp

any’

s shar

e capita

and all i

ssu

ed shar

es are f

ully p

aid.

Articles of Associat

on

The A

rti

cles of A

sso

ciato

n may b

e amend

ed by spe

cial

resolution of the shar

eholders.

A cop

y of th

e Com

pany

’s Art

icle

s of A

sso

ciat

on ca

n be fo

und

on o

ur web

sit

e here

com/i

nves

tor

Authorit

y to pur

chase own shar

At the AGM h

eld on 12 M

ay 2021, ou

r share

holde

rs re

newed

the C

omp

any’

s a

utho

rit

y to m

ake market p

urcha

ses of u

to 312,143,7

71 ordinar

y shares, e

quivalent to approximatel

10 p

er cent of i

ssue

d ordin

y shar

es as at 2

5 March 2021,

and u

p to all of th

e issu

ed pre

feren

ce share c

apital.

183

Standard Chartered

– A

nnu

al Rep

ort 202

Directors’ report

The a

utho

rit

y to ma

ke market p

urcha

ses up to 1

0 per ce

of is

sue

d ordinar

y shar

e capital wa

s use

d durin

g the yea

thr

ough t

wo bu

y-back pr

ogramm

es ann

ounce

d in Febr

uar

and Aug

ust 2021. T

hese we

re util

sed to r

educe t

he num

ber of

ordi

nar

y sha

res in is

sue and a

s par

t of the G

roup

’s appro

ach

to di

vden

d growth a

nd capit

al retu

rns

. The ﬁr

st shar

y-back pr

ogramm

e was lau

nche

d on 1 March 2021 an

end

ed on 29 M

arch 2021. Th

e seco

nd shar

e buy-b

ack

pro

gramme wa

s laun

ched on 4 Au

gust 2021 an

d ende

d on

16 Se

ptemb

er 2021. A to

tal of 7

,06

162 ordin

y share

s with a

nom

inal valu

e of $0.5

0 were re-p

urcha

sed fo

r an approx

imate

aggregate considerat

on paid

of $504 millon.

A mon

thly b

reakdow

n of the sh

ares p

urcha

sed du

ring t

per

iod in

cludn

g the lowe

st and high

est pr

ice pai

d per sh

are

is se

t out in N

ote 28 to t

he ﬁnanc

al state

ment

s. A

ll ordin

sha

res whi

ch were bo

ught ba

ck were can

celle

In acco

rdanc

e with t

he ter

ms of a wai

ver grante

d by

The S

tock E

xchan

ge of Ho

ng Kong Lim

ted (HK

SE) as

subseque

ntly mod

ed,

the Compan

y will

comply wi

th the

applicable

law and regulation in the

UK in rela

tion to holdi

of any sh

ares in tr

easu

y and wit

h the co

ndito

ns of gran

ting

the wa

iver by the H

KSE. N

o trea

sur

y sh

ares wer

e held du

ring

Fur

the

r det

ail

s can be f

oun

d in No

te 28 to t

he ﬁn

anc

al sta

tem

ent

Authorit

y to is

sue shar

The C

ompa

ny is grante

d aut

horit

y t

o issu

e share

s by the

sha

rehol

der

s at its AGM

. The si

ze of the au

thor

ites g

rante

dep

ends o

n the pu

rpo

ses for w

hich sh

ares are t

o be is

sued

and is with

n appl

icable legal

and regulator

y requirements.

Shareh

older rights

Under the

Companies Act

2006, shareholders hol

ding

5 per c

ent or mo

re of th

e paid-up s

hare cap

ital of t

Com

pany car

ying t

he righ

t of votin

g at gene

ral me

eting

of th

e Comp

any are abl

e to requ

ire the d

irecto

rs to h

old a

gen

eral me

eting

. A requ

est ma

y be in har

d copy or el

ectro

nic

for

m and mu

st be aut

hent

icate

d by the sh

areho

lder

s makin

. Where s

uch a req

uest h

as bee

n duly l

odge

d with t

Com

pany

, th

e direct

ors a

re oblig

ed to call a g

enera

l meet

ing

wit

hn 21 da

ys of be

coming s

ubje

ct to the re

que

st and mu

set a d

ate for t

he me

eting n

ot mor

e than 28 da

ys fr

om the

dat

e of the i

ssue o

f the no

tice conven

ing the m

eet

ing.

Und

er the C

ompan

ies Act 2006

, share

hold

ers h

oldin

g 5 per

cent o

r more o

f the tot

al votin

g righ

ts at an AGM of t

Com

pany

, or 1

00 sha

rehol

der

s entit

led to vo

te at th

e A

wit

h an avera

ge of at le

ast £

100 pa

id-up sha

re capit

al per

shareholder

, are entitled to

require the Company to

circulate a

res

olut

ion inte

nded t

o be moved a

t the Co

mpany

’

s ne

xt A

Suc

h a requ

est mus

t be mad

e not lat

er tha

n six wee

ks be

fore

the AGM t

o which t

he requ

est re

lates o

, if la

ter

, t

he tim

not

ice is gi

ven of the AGM

. The re

ques

t may b

e in hard copy o

ele

ctron

ic form

, must i

dentf

y t

he res

olut

ion of w

hich not

ice is

to be g

iven and m

ust be a

uthe

nticat

ed by the s

hareh

older

making it

Shareholders are a

able to put forward proposals

to shareholder

eti

ngs an

d enq

uir

es t

o the B

oard a

nd/

r the S

enio

r Ind

epe

nde

Dir

ect

or by us

ing t

he ‘con

tact u

s’ inf

orm

at

on on t

he Co

mpa

ny’s

web

sit

e sc.

com or by e

mai

lng t

he Gr

oup C

orp

ora

te Se

cre

tar

iat at

group-corporate.secretar

iat@sc.com

Major in

teres

ts in sh

ares and voting rig

hts

As a

t 31 Dece

mber 2021

, T

asek H

oldin

gs (Pri

vate

) Limte

(

asek) is t

he onl

y shareh

olde

r that h

as an inte

rest of

mor

e than 10 p

er cent i

n the Co

mpany

’

s is

sued o

rdinar

sha

re capita

l carr

ng a righ

t to vote at a

ny genera

l meet

ing.

Info

rmat

ion prov

ided t

o the Co

mpany pu

rsu

ant to th

Financ

al Conduct Authority

’

s (F

CA)

Dis

closure

and

ransp

ency Rules (

DTRs

) is published on a R

egulator

Info

rmat

ion Se

vice an

d on the C

ompa

ny’

s we

bsite.

As a

t 11 Febr

uar

y 2021, t

he Com

pany has b

een no

tif

ed of t

foll

owing in

form

aton

, in accord

ance wi

th D

R 5, fro

m hold

ers

of no

tif

able i

ntere

sts i

n the Co

mpany

’

s is

sued s

hare cap

ital.

The i

nfor

maton p

rovide

d in the t

able be

low was cor

rect at

the d

ate of n

otif

cat

ion; however, the dat

e recei

ved may n

have b

een w

ithn 2021. I

t shoul

d be not

ed th

at thes

e hold

ings

are likel

y to ha

ve chang

ed since t

he Co

mpany was n

otif

ed

However, notif

ca

tion of a

ny change i

s not re

quire

d until t

next notifable threshold is c

ros

sed.

Notifable interests

Interest in

ordinar

hares

(ba

d on vot

ing

rights disclosed)

Percentage of

capital disclosed

Natur

of holding as per

dis

closure

ema

sek Ho

lding

s (Priva

) Lim

ted

0,451,

383

16.0

Indire

Schrode

rs plc

127

,83

687

Ind

irec

t (5.63

Contract

Differ

ence

(0.

01513%

)

BlackRock Inc.

183,640,

172

5.55

direct (5.

)

Securit

es Lending (

0.39%)

Contract

Differ

ence

(0.

)

184

Standard Chartered

– Annu

al Repo

rt 202

Directors’ report

Other disclosures

Related party tran

sactions

Details of tr

ansactions wit

h directors and of

ﬁcers and

oth

er rela

ted p

artie

s are set o

ut in No

te 36 to t

ﬁnancal

statem

ents.

Connected/

continung connected trans

actions

By vi

rtu

e of its s

hareh

oldin

g of over 10 p

er cent in t

Com

pany

, T

ema

sek and it

s as

soci

ates are r

elate

d par

ties an

conn

ecte

d per

sons o

f the Co

mpany fo

r the pu

rpo

ses of t

UK Listng

Rules and the Hong K

ong Listng R

ules

, respectively

(

together the “Rules”)

The Ru

les are in

tend

ed to en

sure th

at ther

e is no fa

vourab

treatment

to T

emasek or

s assoc

iates

to the

detriment of

other shareholders in the Compan

. Unless transactions

bet

en the G

roup a

nd T

mase

k or it

s ass

ociate

s are

spe

cif

cally e

xempt und

er the Ru

les or are s

ubjec

t to a spe

cif

c

waive

, they m

ay re

quire a com

binat

on of ann

ounce

ment

reporting and independent shareholders’ approv

al.

On 12 N

ovember 2021

, the HK

SE exten

ded a wai

ver (

“Waiver

”) it prev

ious

ly gran

ted to t

he Com

pany for t

revenu

e bank

ing tra

nsact

ions w

ith T

emas

ek whic

h do not f

all

und

er the p

assi

ve investo

r exempti

on (

e “Pas

sive Invest

xempti

on”) un

der Rule

s 14A

99 an

d 14A

0 of the H

ong Kong

Lis

tng Rule

s. Und

er the W

iver

, t

he HK

SE agree

d to waive t

announcement requirement, the requirement to enter i

nto a

itten a

greem

ent and s

et an ann

ual cap, and t

he rep

ort

ing

(

incl

udng an

nual rev

iew

) req

uireme

nts u

nder Ch

apter 1

for t

he thre

e-year p

erio

d endin

g 31 Dece

mber 2024 on the

conditons that:

) The Com

pany will d

isclo

se det

ails of t

he W

aive

r (

cludng

nat

ure of t

he revenu

e bank

ing tran

sact

ions w

ith T

emas

and re

aso

ns for t

he W

aive

) in subs

equ

ent annu

al repo

and

) The Com

pany will c

ontin

ue to mon

itor th

e revenue b

anki

transacti

ons with T

emasek during th

e three

years ending

31 De

cembe

r 20

24 to ens

ure tha

t the 5 pe

r cent th

resho

for t

he revenu

e ratio w

ill not b

e exceed

ed.

The m

ain rea

sons f

or see

king t

he W

aive

r were:

•

The n

atur

e and ter

ms of reve

nue ban

king t

ransa

ction

y var

y and evolve ove

r time; ha

ving ﬁ

xed-ter

m writ

ten

agreements would not be sui

table to accommodate the

vari

ous ban

king n

eeds o

f the C

ompany

’

s cu

stome

(

incl

udng T

ema

sek) and woul

d be imp

ractcal a

unduly burdensome.

•

It wou

ld be imp

ractca

ble to es

timat

e and det

ermi

ne an

annu

al cap on t

he revenu

e banki

ng tran

sact

ions wi

emas

ek as th

e volume a

nd aggre

gate val

ue of ea

tran

sact

ion are un

cert

ain and un

know

n to the C

ompany a

a banking group

due to multiple factors includ

ng market

driven factors.

•

The r

evenues g

enera

ted f

rom revenu

e bank

ing tra

nsact

ions

were in

sgnif

can

t. With

out a wai

ver fro

m the HK

SE or an

applicable

exemption, these transactions w

uld

e sub

to various percentage r

atio tests which cater for

different

ype

s of conn

ecte

d trans

actio

ns and a

s such ma

y prod

uce

anomalo

us results

For t

he year en

ded 31 D

ecemb

er 2021, th

e Grou

p provid

emas

ek with m

oney ma

rket and ca

pital ma

rket

s produ

cts

and s

vice

s that we

re revenue t

rans

actio

ns in nat

ure.

As a r

esult o

f the Pas

sive Inves

tor E

xempti

on and th

e W

aive

the v

ast majorty of the Com

y’s

transactions wi

th T

emasek

and it

s as

socia

tes fal

l out

side of t

he conn

ecte

d trans

actio

reg

ime. However, non-reven

ue tran

sact

ions w

ith T

emas

ek or

any of it

s as

sociat

es cont

inue t

o be subj

ect to mo

nitor

ng for

conn

ecte

d trans

actio

n issu

es. T

he Com

pany conﬁr

ms th

at:

•

The r

evenue b

ankin

g trans

actio

ns ente

red int

o with

emas

ek in 2021 were be

low the 5 p

er cent t

hresh

old fo

r the

revenu

e ratio t

est un

der th

e Hong Kong L

istng Ru

les; and

•

It will

continue to monitor re

venue banking

ransactions

wit

h T

mase

k durin

g the th

ree yea

rs en

ding 31 De

cemb

202

4 t

o ensu

re that t

he 5 per c

ent thr

eshol

d for th

e revenue

ratio

will not

be ex

ceeded.

The C

ompa

ny there

fore sa

tisf

ed t

he con

diton

s of the W

iver

Fixed ass

ets

Det

ails of a

ddito

ns to ﬁxed a

sse

ts are p

rese

nted in N

ote 18 t

the ﬁnancal

statement

Loan capital

Det

ails of t

he loa

n capital o

f the Co

mpany an

d its su

bsida

ries

are se

t out in N

otes 2

2 and 2

7 to the ﬁ

nancal st

atem

ent

Debenture is

sues and equity-link

ed agreement

ring t

he ﬁnanc

al year end

ed 31 De

cemb

er 2021, the

Company made

suance

of debentures or equit

-linked

agreements

Risk management

The B

oard i

s respo

nsib

le for ma

intanin

g and revi

ewng th

effectivenes

of the risk management system. An ongoing

proces

s for identf

ying, evaluating an

d managing the

signﬁc

ant ris

ks th

at we face i

s in place

. The Bo

ard is sa

tisf

ed

tha

t this pr

oces

s const

itut

es a robu

st as

sess

ment of a

ll of the

princpal ri

sks, eme

rging risks and ma

terial cross-cutt

ing risks

faci

ng the G

roup, in

cludn

g thos

e that wou

ld thr

eaten i

bus

ines

s mode

l, fu

ture p

erfo

rman

ce, sol

vency o

r liqudi

ty.

e Gro

’s Risk M

ana

gem

ent Fr

amewo

rk an

d Syst

em of In

ter

nal C

ont

rol

app

lie

s onl

y to wh

oll

y cont

rol

led s

ubsi

dar

ies o

f the G

rou

p, and n

ot to

ciat

es, J

oin

t V

tur

es or S

tru

ctu

red E

ntit

es o

f the G

rou

Key areas o

f risk o

n ﬁnanca

l instr

ume

nts f

or the di

recto

incl

uded t

he imp

arme

nt of loa

ns and ad

vances a

valuation

of ﬁnancal instruments held at fai

r va

lue. This

risk

sess

ment an

d mana

gemen

t is expl

ained f

ther in t

Audit C

ommit

tee Key are

as and Acti

on taken on p

age 120.

e Risk r

evi

ew and C

apit

al rev

iew o

pag

es 194 to 2

ts o

ut th

princpal

risks, emerging risks and

integrated risks

our approach to

isk

management, includng our

isk

mana

gement

inc

ple

an ov

view of

our Enterprise Risk

Management Framew

and the risk management

d gover

nan

ce pra

cti

ces fo

r eac

h pri

ncp

al ri

sk t

e. The B

oar

app

rove

d Risk A

etit

e Sta

tem

ent ca

n be fo

und o

pag

es 26

4 to 2

In acco

rdanc

e with Ar

ticl

e 435(1)(

) of the UK o

nsho

red

Capital R

equirement

s R

egulation, the Board Risk Committee,

on be

half of t

he Boa

rd, has c

onsid

ered t

he ade

quac

y of the

sk mana

gemen

t arran

geme

nts o

f the Gr

oup and h

as sou

ght

and re

ceive

d assu

rance t

hat the r

isk m

anage

ment s

ystem

in place

are adequate with regard to

the Group

’

s proﬁle

and strategy

185

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

Internal con

trol

The B

oard i

s respo

nsib

le for ma

intanin

g and revi

ewng th

effectivenes

of the internal control system. Its effectiveness

is rev

iewed re

gular

ly by th

e Board

, its co

mmitt

ees

, the

Man

ageme

nt T

eam and G

roup In

tern

al Audit

For t

he year en

ded 31 D

ecemb

er 2021, th

e Boar

d Risk

Com

mitte

e has rev

iewed t

he ef

fecti

venes

s of th

e Grou

’

stem of i

nter

nal cont

rol. A

s par

t of this r

eview

, afﬁ

rmat

on

was re

ceive

d that th

e Gro

up Chief Ri

sk Of

ﬁcer is sa

tisf

e

d that

the G

roup’

s ri

sk mana

geme

nt and int

erna

l contro

l fram

ework

is ma

teri

ally ef

fect

ive and ad

equa

tely h

ighlght

s ri

sks an

improv

ent a

as for

anagement attention. Group

Inte

rnal Au

dit repr

esent

s th

e third lin

e of def

ence an

provides independent assurance of

the effectiveness of

man

ageme

’

s co

ntrol o

f busin

ess ac

tivt

ies (

he ﬁrs

t line

) and

of th

e contr

ol proc

esse

s maint

aned by th

e Risk Fram

ework

Owner

and Policy Owners (

the second

line

)

. The audi

programme

includes obtain

ng an understandi

ng of the

pro

cess

es and s

ystem

s unde

r audit r

eview

, eva

luati

ng the

design

of contr

ols

and testi

ng the oper

ating effectiveness

and o

utcom

es of key cont

rols

. The wor

k of Gr

oup Int

ernal

Audit i

s focus

ed on t

he area

s of grea

test r

isk as d

eter

mined by

a ri

-ba

sed a

sses

smen

t meth

odol

ogy

. T

he Bo

ard cons

ider

the i

nter

nal cont

rol sy

stem

s of the C

ompa

ny to be ef

fect

ive

and adequate.

Gro

up Int

ernal Au

dit rep

ort

s reg

ularl

y to the Au

dit Com

mitte

the G

roup C

hairm

an and th

e Gro

up Chief E

xecu

tive; and t

Gro

up He

ad, Inte

rnal Au

dit rep

ort

s dire

ctly to t

he Chair o

f the

Audit C

ommit

tee an

d admins

trati

vely to t

he Gr

oup Chie

xecut

ive. The ﬁn

dngs of a

ll adver

se au

dits a

re repo

rte

d to

the Au

dit Com

mitte

e, the G

roup C

hairm

an and th

e Grou

Chief Executi

e where immedate correcti

e actio

is required.

The B

oard Ri

sk Com

mitte

e has re

spon

siblit

y fo

r overs

eeing

the m

anag

ement o

f the Co

mpany

’

s pr

incpal r

isk

s as well a

revi

ewng th

e eff

ecti

venes

s of the G

roup

’s Ente

rpr

ise Ris

Man

ageme

nt Framewor

k. T

he Audit C

ommit

tee mo

nitor

s the

integrt

y of the Co

mpany’

s ﬁnancal repo

rting, comp

liance

and internal control en

vironment

e ris

k man

agem

ent a

ppr

oach s

tar

tin

g on

ge 25

describes the

Group

’s risk

anagement

oversight committee structure.

r busin

ess is c

onduc

ted wi

thn a develo

ped co

ntrol

amewor

k, und

erpi

nned by p

olic

y state

ment

s and st

andard

The

re are wr

itte

n police

s and st

andard

s desig

ned to e

nsure

the identﬁ

caton and management of

risk

, includ

ng Credit

Risk, T

rade

Risk

, T

reasur

y Risk, Operational and

echnology

Risk, Information and C

yber Securit

y R

isk, Compliance Risk,

Financal Crime Risk, M

odel Risk and Reputation

al and

Sustain

ablity Risk

. The Board has est

ablished a managem

ent

structure that

clearly deﬁ

nes roles, responsib

lites and

repor

ting lines.

e Gro

’s Risk M

ana

gem

ent Fr

amewo

rk an

d Syst

em of In

ter

nal C

ont

rol

app

lie

s onl

y to wh

oll

y cont

rol

led s

ubsi

dar

ies o

f the G

rou

p, and n

ot to

ciat

es, J

oin

t V

tur

es or S

tru

ctu

red E

ntit

es o

f the G

rou

Delegated authorites are documented a

communicated.

Executive risk committees regularly re

w the Group

’s

isk

proﬁl

e. The p

erfo

rman

ce of the G

roup

’

s b

usin

esse

s is rep

orte

regularly to senior ma

nagement and the Board.

Performance

tre

nds and f

oreca

s, as well a

s actu

al per

form

ance ag

ainst

bud

get

s and pr

ior pe

riod

s, are m

onito

red clo

sely. F

nancal

informaton is prepared using

appropriate accounting

polices, which are

applied consistently

Operational

procedures and c

ontrols have been

established

to facil

tate complete, accur

ate and timely processing of

transacti

ons and the sa

feguarding of

asset

s. These

controls

include appropriate

gregation

of duties, the regular

reco

ncilat

ion of ac

count

s and t

he valua

tion of a

sset

s and

pos

iton

s. In res

pect o

f handli

ng insd

e infor

mato

n, we have

appl

ied rel

evant cont

rols on e

mploye

es who ar

e subje

ct to

handling

insde inf

ormaton, i

ncludng contr

ols over

the

dis

semna

tion of s

uch inf

orma

ton and t

heir de

aling

s in the

Com

pany’s shar

es. Su

ch sys

tems ar

e desig

ned to m

anage

rat

her tha

n elimna

te the r

isk of f

ailure t

o achieve bu

sines

obje

ctves a

nd can onl

y provid

e reas

onab

le and no

t absol

ute

assurance against material misstatement or loss.

Empl

yee police

s and enga

gement

e wor

k hard to e

nsure t

hat ou

r employe

es are kept

info

rme

d abou

t matte

rs af

fect

ing or of i

ntere

st to th

em,

but more importantly to pr

ovide opportunites for feedback

and dialogue.

e continue

to listen and act

on fee

dback

rom

colleagues

to ensure internal communic

atons remain i

actful

and m

eaning

ful

, in supp

ort of t

he Gr

oup

’s strat

egy an

transformation. In addit

on to the Bridge (

our

inter

nal

busines

collaboration pla

form

) whic

h allows colleagues

to receive

key upda

tes

, exchange i

deas a

nd provi

de fee

dback

, we als

leverage

a range of channels

includng email broadcasts,

newsletters with customised content for each employ

gment

, audi

o and vid

eo calls

, town h

alls and o

ther s

taff

engagement and recogniton

events. T

o continue to improv

the wa

y we comm

unicat

e and ens

ure our e

mployee

comm

unicat

ons re

main rel

evant, we a

lso pe

riodc

ally ana

lyse

and m

easu

re the im

pact of o

ur comm

unicat

ons th

rough a

rang

e of sur

vey an

d feed

back t

ools

Our senior leaders and P

eople Leaders continue to play

a cri

tcal rol

e in enga

ging ou

r team

s acros

s the ne

two

ens

urin

g that t

hey are kept up t

o date o

n ke

y bus

ines

developments related to

our perfor

mance

and strategy

Our People L

eader

s also

provide gu

idance and

help

colleagues

under

stand

their role i

n executing

and deliver

on th

e Bank

’

s s

trate

. Wi

th the o

ngoin

g impac

t of the gl

obal

pan

demic

, the B

ank has a

lso end

eavo

ured to d

isse

mnate

timely informaton that

enable

colleagues to stay

informed of the various national

/internatonal dev

elopm

ents

and m

ore imp

orta

ntly, to ensur

e they are s

uppo

rte

d in term

of th

eir physi

cal and me

ntal sa

fet

y and we

llbein

Across the

organisaton, r

egular team meetings with P

eople

Leaders, one-to-ones and v

ariou

anagement

etings

provide a

n import

ant

platform for colleagues to discuss a

clarif

y k

ey issues. Regular performance con

versations provide

the o

ppor

tun

y to discu

ss how in

dvid

uals

, the te

am and th

bus

ines

s area ha

ve contr

ibut

ed to o

ur overall pe

rfor

manc

and, i

n year

end conver

sat

ions

, how any comp

ensa

tion

awards relate

to this. The Bank

’

s senior leadership (

Group

Chairman

, CE

O, Board) also regular

ly shares global, regi

onal

and co

untr

y u

pdat

es on ﬁnan

cal per

form

ance, s

trate

str

uct

ural cha

nges

, HR prog

ramme

s, per

for

mance rev

iews

and campaigns

186

Standard Chartered

– An

nual Re

por

t 2021

Directors’ report

Other disclosures

The B

oard e

ngage

s with an

d liste

ns to th

e view

s of the

wor

kforc

e throu

gh several s

ource

s, inc

ludng t

hroug

virtual, interactve engagement sessions. More informaton

can be f

ound o

n page

s 113 and 114 in t

he Dire

ctor

s’ repo

rt.

Empl

oyees

, past

, pres

ent and f

ure can fo

llow our pr

ogres

thr

ough th

e Grou

’

s L

inkedIn n

work an

d Faceb

ook pa

ge,

and o

ther s

ocial ne

two

rk cha

nnels

, whic

h colle

ctivel

y have

over 2.

2 millo

n follower

The d

iver

se rang

e of comm

unicat

on tool

s and cha

nnel

s we

have put in

place, ensures that al

l our col

agues regar

dless

of wh

ere th

ey sit wit

hn our or

ganisa

tonal n

work r

eceive

tim

ely and r

elevant in

form

aton (in chann

els of t

heir ch

oosin

to su

ppor

t them i

n being e

ffe

ctive in t

heir var

ious ro

les.

The we

llbein

g of our e

mployee

s is cent

ral to ou

r think

ng

abo

ut ben

eﬁts a

nd supp

ort

, so th

at they can t

hri

ve at work

and in t

heir p

ers

onal live

s. Ou

r Grou

p minmu

m stand

ards

prov

ide emp

loyees wi

th a rang

e of ﬂexib

le work

ing op

tion

and, i

n term

s of lea

ve, at le

ast thi

y day

s’ leave (throu

annu

al lea

ve and pub

lic hol

idays

), a minmu

m of t

went

cale

ndar wee

ks’ f

ully p

aid mat

ernit

y l

eave, a mi

nmum of t

cale

ndar wee

ks of l

eave fo

r spou

ses or p

artn

ers

, and t

calendar w

eks for

adoption leave.

ombined,

his

is above

the International L

abo

rgan

isaton min

mum standards.

e se

ek to bu

ild prod

ucti

ve and end

urin

g part

ner

ships w

ith

various employee representative bodies (includng unions

and wo

rk coun

cils

). In our re

cognit

on and int

eract

ons

we are he

avi

ly inﬂue

nced by t

he 19

8 Unit

ed Nat

ions

Uni

versa

l Decl

aratio

n of Hum

an Right

s (UDH

), and sever

International La

bour Organisaton

(IL

) conventions

includng

the R

ight to O

rganis

e and Co

llect

ive Barg

ainng C

onventio

194

9 (N

o. 98

) an

d the Free

dom of A

sso

ciato

n and Prot

ectio

of th

e Right to O

rgani

se Conven

tion

, 19

8 (No. 87

)

. 14

.3 p

cent o

f employe

es acro

ss 21 m

arket

s are covere

d by colle

ctive

bargainng ag

ements and for emplo

yees not covered b

collecti

argainng agreement

s, their wor

king conditons

and t

erms o

f employ

ment ar

e base

d on th

e Bank

’s Gro

up &

Countr

y polices and

as per indvidual employment contracts

sued by th

e Bank

The G

roup G

rievan

ce Stan

dard pr

ovides a f

orma

l frame

work

to de

al wit

h concer

ns th

at empl

oyees ha

ve in relat

ion to

the

ir empl

oyment o

r anot

her coll

eagu

e, which a

ffe

cts

the

m direct

, an

d cannot b

e reso

lved t

hrough i

nfor

mal

mechanisms, such as counsell

ing, coaching

or mediaton.

This can

include issues of bullying, harassment, discrminaton

and v

ictmis

aton

, as well as c

oncer

ns aro

und con

diton

s of

emp

loymen

t (

or exampl

e, healt

h and sa

fet

, new wo

rkin

prac

tices o

r the wor

king e

nvironm

ent)

. Emp

loyees can r

aise

gri

evances to t

heir Peo

ple Lea

der or a Hu

man Reso

urces (H

)

Repr

esentative

. The g

lobal process to

address grie

vances

involve

s an HR repr

esen

tati

ve and a mem

ber of t

he busi

ness

revi

ewng th

e grievan

ce, cond

uctin

g fact ﬁndn

g into th

gri

evance and p

rovidng a w

ritt

en out

come to t

he agg

rieved

emp

loyee. If a gr

ievance is u

pheld

, the ne

xt step

s might

incl

ude rem

edy

ing a po

licy o

r proce

ss, o

r intiat

ng a

dis

cplinar

y r

eview of t

he cond

uct of th

e subje

ct of the

grievance. The Gro

up Grievance Standard and accom

panying

pro

cess i

s reviewe

d on a per

iodc ba

sis in co

nsult

ation w

ith

stakeholder

s across HR

, L

gal, Compliance and Shar

Invest

igat

ve Ser

ces. G

rievan

ce tren

ds are rev

iewed on a

quarterly basis and action pla

are de

veloped to add

ress

any concerning tren

ds.

The

re is a dis

tnct G

roup Sp

eaki

ng Up Polic

y whic

h covers

ins

tances w

here a

n employe

e wish

es to ‘

blow the w

hist

le’

on actual, pla

nne

or potential wrongdoing

by another

emp

loyee or th

e Grou

The G

roup i

s commi

tted t

o creat

ing a fair, consi

stent

, and

transp

arent approach to makin

g decisons in a discplinar

cont

ext. T

his comm

itme

nt is codi

fe

d in our Fa

ir Account

abilt

Princples, whi

ch underpin our

roup Disc

plinar

y Standard.

Dismssals due to

misconduct issues and/

or performance

(

ere req

uired by l

aw to fol

low a discp

linar

y pr

oces

) are

governed b

y the Group Discplinary Standard. Where loca

law o

r regu

latio

n requi

res a dif

feren

t proce

ss wit

h rega

rds to

dism

ssal

s and ot

her dis

cplinar

y out

comes

, we have co

untr

variances in place.

r Grou

p Diver

st

y and Inc

lusio

n Stan

dard ha

s been

developed to

ensure a respectful workplace, with fair

and

equ

al tre

atmen

t, di

verst

y an

d inclu

son, an

d the prov

ison o

opportunites for emplo

yees to particpate fully and r

each

their full potential in an

appropr

iate

work

ing en

vironment

The G

roup a

ims to pr

ovide e

qualit

y of o

ppor

tun

y for all,

prot

ect th

e dignt

y of em

ployees a

nd prom

ote re

spect a

wor

k. All in

dvid

uals ar

e entit

led to b

e trea

ted wi

th dignt

and re

spe

ct, and t

o be fr

ee fro

m haras

sme

nt, bu

llyin

discrminaton

and victmisaton. This

helps to support

pro

ducti

ve work

ing cond

itons

, dec

reas

ed staf

f att

rito

positve employ

ee morale and engagement, maintans

employ

ee well

being, and reduces

people-related risk. All

employ

ees and contrac

tor

s are

required to take

ersonal

responsib

lit

y to

comply with the Sta

ndard,

includ

conducting

themselves in a

manner that demonstra

tes

appropriate, non

-discrminator

y behaviours

The Group is commi

ted to

provide equal opportunites and

fair treatment in emplo

ent. W

e do

accept unlawful

discrminaton in

our recr

uitment or

employment practices

on any gro

unds in

cludn

g but no

t limte

d to: sex, r

ace,

colo

, n

ation

alt

, eth

nict

, nat

ional o

r indge

nous or

ign,

dis

ablit

, ag

e, mari

tal or civ

l par

tner s

tatu

s, pre

gnanc

y or

maternit

, sexual orientaton,

gender identty

, expression or

reassignment

HIV or AIDS status, parental status, miltary

and vet

erans s

tatu

s, ﬂex

iblit

y of wor

king a

rrang

emen

religon

or belief

e st

rive fo

r recr

uitm

ent, a

pprais

als, p

ay and c

ondit

ons,

trainng, de

velopment

, succession pla

nning, promotion,

grievance/

dis

c

plinar

y proced

ures and employment

termin

aton practices that are inclu

sve

d accessible;

and t

hat do no

t direct

ly or in

drect

ly disc

rmina

te.

Recruitment, employment, trainng, dev

elopment and

promotion decisons

are based on the skills, knowledge

and b

ehav

iour re

quire

d to per

for

m the ro

le to the G

roup’

standards. Implied in a

ll employment terms is

the

comm

itmen

t to equ

al pay f

or equ

al work

. W

e wil

l also ma

reasonable workplace adjustments (

includng during

the

hirn

g proce

) to en

sure all i

ndvi

duals f

eel su

ppor

ted an

d are

able t

o par

ticpat

e ful

ly and re

ach th

eir pot

entia

l. If empl

oyees

become disabled, we

will proactively seek to s

upport them

wit

h appro

priat

e trainn

g and wor

kpla

ce adjus

tmen

ts wh

ere

possible and explore

ever

y opportunit

to ensure their

employment continues.

Healt

h and safe

r Healt

h, Saf

y and W

lbeing (H

SW) p

rogra

mme cover

both mental

and physic

al health and

wellbeing. The

Group

complies with

oth ex

ter

nal

gulatory requirements and

inte

rnal p

olic

y and st

andard

s for HSW i

n all mar

kets

. It is

Gro

up po

licy to e

nsur

e that t

he more s

trin

gent of t

he t

req

uirem

ent

s is alway

s met

, ensu

ring o

ur HSW pr

actice

meet or ex

cee

regulator

y min

mum. Compliance

rate

s are rep

ort

ed at le

ast bian

nuall

y to each c

ountr

y’s

Management T

am.

187

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

e fo

llow the ILO code o

f pract

ice on rec

ording a

notif

c

ation of occupational acc

idents and diseases, as well

as ali

gnng to UK H

ealt

h and Saf

y Exe

cuti

ve, and en

surin

we me

et all loc

al H&S reg

ulato

y repo

rtin

g requi

remen

e re

cord and r

epor

t all wor

-rela

ted illn

ess an

d inuri

es,

includng

sub-contractor

s, vis

tor

s and

client

HSW p

erfo

rman

ce and ri

sks a

re repo

rte

d annual

ly to th

Gro

up Risk C

ommi

ttee an

d Boar

d Risk Co

mmitt

ee. W

e us

e a

hea

lth and s

afet

y man

agem

ent sy

stem a

cross al

l count

ries

to en

sure a co

nsist

entl

y high level o

f healt

h and saf

rep

ort

ing for all o

ur coll

eagu

es and cli

ent

The B

ank sp

onso

rs me

dical an

d healt

hcare s

vice

s for all

emp

loyees

, except in ma

rket

s wher

e cover is prov

ided t

hrough

State-manda

thcare, which

represent less than

0.5 p

er cent o

f the G

roup

’s employe

es. A

ll staf

f also h

ave

access to professional

counselling via our Emplo

yee

sistance Program.

Fur

ther

more, we co

nsid

er and tr

eat men

tal he

alth is

sues

req

uirng ﬁ

rst ai

d in the sa

me way th

at we woul

d treat

physi

cal inur

ies. O

ur glob

al Men

tal Hea

lth Firs

t Aid (MHFA

)

pro

gram of

fer

s help to s

omeo

ne devel

oping a m

ental h

ealth

problem, experiencng a w

sening of an

existng mental

illne

ss or a m

ental h

ealth c

riss

. The me

ntal he

alth su

ppor

t is

give

n until ap

propr

iate pr

ofes

siona

l help is re

ceive

d, or th

criss resolved.

In 2021, we wo

rked wit

h an exte

rnal ce

rtif

e

d provid

er to

devel

op our pr

eviou

sly cla

ssro

om-ba

sed MH

A trai

nng

pro

gram into a v

irt

ual pro

gram whi

ch can be a

ccess

ed by

any coll

eagu

e regard

less o

f their l

ocati

on. T

o date we h

ave

trai

ned over 4

00 men

tal he

alth ﬁr

st aide

rs in 42 mar

kets

coveri

ng 95 per c

ent of col

leag

ues.

In 2021, we re

corde

d no wor

-rel

ated fa

talit

es or ser

ious

lon

g-term wo

-r

elate

d heal

th iss

ues in ou

r staf

, alt

hough

68 co

llea

gues p

asse

d away f

rom COVID-

19 in n

on-wor

related situatons. Whilst

not mandator

, we ‘

strongly

encourage’ v

accinaton against

VID-

19 for

employees

and h

ave hel

d vaccinat

on dri

ves whe

re pos

sible t

o assi

colleagues and thei

r famil

es to access vac

cinatons.

Maj

or inur

ies (pe

r the UK H

ealth & S

afet

y E

xecut

ive deﬁnt

ion

)

incr

ease

d sligh

tly f

rom 23 i

n 20

20 t

o 2

, with f

ract

ures th

mos

t commo

n t

ype of m

ajor inu

y (52 per ce

). Over

all,

rep

orte

d inur

ies red

uced by si

x per ce

nt, w

ith ‘slips/tri

ps/

alls’

and ‘

transport/

com

muting’ r

emain

ng the most

common

caus

es of inu

. Ou

r inur

y rat

es rema

in aligne

d to, or b

etter

than indus

y benchmark

Hazar

ds and n

ear mis

s repo

s decre

ase

d 42 per cen

bet

en 2020 and 2021, and al

l premis

es are in

spe

cted at

lea

st annu

ally to i

dentf

y a

ny hazards

, ris

ks and i

ncden

ces

of non-compl

iance.

Throughout

21, the CO

VID-

pandemic continued

imp

act hea

lth, sa

fet

y and we

llbein

g. With lo

ckdown

s and

restrict

ons continu

ng across ou

r mark

s th

roughout the

year

, we

accelerated our Future W

orkplace No

w plans and

approximately

per cent of

colleagues adopted working

from home arrangements. W

orkplace closures and

restricted

operations resulted in

a reduction in workplace ac

cident

and in

cdent

s; however, home wo

rkin

g intro

duce

d new

and em

ergin

g risk

s to man

age ac

ross h

ealth

, safet

y an

wellbeing.

A H&S inspecton checklist

is available for

staff to

sess t

heir wor

kin

g area fo

r hazards

, and v

irtu

al ass

ess

ment

by H&S ex

pert

s are o

rganis

ed if re

quire

d. All st

aff op

ting t

wor

k ﬂexibl

y recei

ve an allowan

ce to purc

hase e

rgono

mic

ﬁce equi

pment

. Our wo

rk inur

y insu

rance cover

s all st

aff

wor

king f

rom hom

Major customers

Our ﬁve la

rgest customers together accounted

for

7 per cen

t of our to

tal op

eratin

g incom

e in the ye

ended 31 December 20

21.

Major s

uppliers

In 2021, $

4.1 billon was s

pent w

ith app

roximat

ely 12

0 ﬁrs

tie

r suppli

ers

. Of thi

s, 73 p

er cent o

f the to

tal sp

end was sp

ent

in th

e Asia r

egion

, with 19 p

er cent i

n Europe an

d the Am

erica

and ei

ght per c

ent in Af

rica an

d the Mi

ddle East

Our ﬁve la

rgest suppliers together acc

ounte

d f

or 16 per

cent of

tot

al spen

d, wit

h the lar

gest t

en amou

nting t

o 2

4 p

er cent o

total spend.

Supply chain management

o suppo

rt th

e opera

tion o

f our bran

ches

, ofﬁc

es, bu

sines

ses

and f

unct

ions we s

ource a var

iet

y of go

ods an

d ser

ices. T

maj

ort

y of ou

r expe

nditu

re is on se

vice

s and is ma

nage

thr

ough a th

ird-par

y governa

nce fr

amewor

k which en

sure

tha

t we follow t

he highe

st stan

dards i

n term

s of sou

rcing

awarding and onbo

arding supplier

For in

form

aton ab

out how t

he Gro

up eng

ages w

ith sup

plier

on en

vironmental

and social

matter

s, p

lease see ou

r Suppl

ier

Charte

r and Supplier Diver

sty and Inclus

ion Standard.

As s

et out u

nder t

he UK Mo

dern S

laver

y Act 201

5, the G

roup

is required to

publish a Modern Slaver

y Statement a

nnually

The G

roup’

s 2021 Mod

ern S

laver

y S

tatem

ent wil

l be iss

ued

at th

e same t

ime as th

e Annu

al Repor

t. Th

is docu

ment w

ill

give f

ther de

tail on h

ow the G

roup ha

s prevent

ed mo

dern

sla

ver

y and hu

man tra

fﬁckn

g in it

s opera

tion

s, ﬁnan

cng and

supply chain

during 20

21.

Our Supplier Charter

and Supplier Diversty and Inclusion sta

ndard

can b

e vie

wed at

.com

en/

group

suppliers/

tail

s of ho

w we cre

ate va

lue fo

r our s

upp

lier

s an

d oth

er st

akeho

lde

gro

ups c

an be f

oun

d on

ges 5

1 to 59

Product

sponsib

lity

e aim t

o design a

nd of

fer pro

duct

s bas

ed on cli

ent ne

eds

to en

sure fa

ir trea

tment a

nd out

comes f

or clien

The G

roup h

as in pl

ace a ris

k fram

ework

, compr

isng p

olices

and st

andar

ds, to s

uppo

rt th

ese obj

ectve

s in alignm

ent wit

our C

ondu

ct Risk Fram

ework

. This f

ramewo

rk cover

s sales

practices, client c

ommunicatons, appropriateness and

suit

ablit

, an

d post

-s

ales pra

ctice. A

s par

t of thi

s, we ens

ure

pro

duct

s sold a

re suita

ble for c

lient

s and com

ply w

ith rel

evant

laws and regulations. The Group does not

manufacture

products and

therefore

not have a de

ﬁned quality

suranc

e proce

ss or re

call pro

cedur

es; nor d

oes it se

ll or

ship p

roduc

ts th

at woul

d be liabl

e for ret

urn o

n heat

h and

safety grounds.

e ha

ve proce

sse

s and guid

elnes s

pecif

c to e

ach of o

client businesses, to promptly resolve client

complaint

understand and

respond to clien

t issues. Conduct

consideratons are

given sign

ﬁcant weight

ng in front

-line

ince

ntve st

ruct

ures t

o drive t

he rig

ht beha

vio

urs

For more i

nfor

maton

on our approach to

product design,

pro

duct pr

icng, t

reat

ing cust

omer

s fair

ly and p

rotec

ting

vulnerable customers, and incentvis

ng our frontline

emp

loyees

, see pa

ges 51 an

d 52. For mo

re info

rmat

on

on f

raud id

entﬁcat

on see p

ages 7

2 and 73

188

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Other disclosures

Safeg

uarding intellec

tual proper

ty right

The G

roup h

as pro

cess

es in pla

ce to man

age th

e Grou

’

intellect

ual propert

y right

s and respe

ct third part

y intellectual

prop

ert

y r

ight

s. Th

e Grou

p has com

plied w

ith app

licabl

intellectual property laws and regulations.

Group Code of Conduct

The B

oard h

as adop

ted a G

roup C

ode of C

ondu

ct (

the C

ode

)

rel

ating t

o the la

wfu

l and et

hical con

duct of b

usine

ss and t

his

is su

ppor

ted by th

e Gro

’

s va

lued b

ehav

iour

s. Th

is has b

een

comm

unicat

ed to all d

irecto

rs an

d employe

es, all o

f whom

are ex

pect

ed to ob

ser

ve high s

tanda

rds of in

tegr

ty a

nd fair

dealing in

relation to customers, employees a

nd regulators

in th

e commu

nites in w

hich th

e Gro

up oper

ates

. Direct

ors

and em

ployee

s are asked t

o recom

mit to th

e Cod

e annual

and 9

.6 per c

ent have c

omple

ted th

e 20

1 reco

mmitm

ent.

All

Board

members have

recommitted

to the Code

Mana

ging environment

al and socia

l risk

The B

oard i

s respo

nsib

le for en

suri

ng that h

igh stan

dards

of re

spon

sible b

usine

ss are m

aintan

ed and t

hat an

fect

ive cont

rol fra

mework i

s in plac

e. This en

comp

asse

risk ass

ociated with clients’ operation

s a

nd their potential

imp

act on th

e environ

ment

, incl

udng clim

ate ch

ange,

and local comm

unites.

The B

oard re

cogni

ses it

s res

pons

iblit

y to ma

nage t

hese

risks and that failure

to manage them adequately could

have a

dver

se imp

act on st

akehold

ers a

s well as th

e Gro

up.

The B

oard

, via th

e Cultu

re and Su

stain

ablit

y Com

mitte

revi

ews sust

ainabl

y prio

rtie

s, and over

es the deve

lopm

ent

, and deliv

y against, public commitments regarding

the

activties

and/

or businesses that the

roup

will or wil

l not

acce

pt in align

ment w

ith our H

ere for g

ood br

and pro

mise.

At a man

ageme

nt level, t

he CEO, CCIB is re

spon

sible

for sustainable

ﬁnance, which inc

porates E

&S risk

man

ageme

nt. Le

d in 2021 by the G

roup He

ad, Co

nduct

Financal Crime and Complian

ce, a

ross-business

Sustainabl

Forum is responsible for

developing and

deli

vern

g the Gr

oup

’s broad

er sust

ainabl

y strat

egy

Sta

ndard Ch

arte

red ha

s publi

cly com

mitte

d to the

reco

mmen

datio

ns of th

e Financal S

tabilt

y B

oard

’

s T

ask

Force on Climate-relat

ed Financal

Disclo

sures (TCFD

)

recommendat

ions since 2

017

Our comprehensive T

CFD

disclosure is

published in

a standalone report which pro

vide

informaton in

a readily iden

tﬁable

and accessible format for a

interested stakeholders.

A su

mmar

y o

f the TCF

D repo

rt ca

n be fo

und o

n pag

es 67 to 69,

th th

e ful

l rep

ort a

vail

abl

e at

.co

m/tc

Community engagement

e col

labor

ate wit

h local p

artn

ers t

o supp

ort so

cial and

economic dev

elopment in communites

across our markets.

e are co

mmitt

ed to su

stain

able so

cial and e

cono

mic

development through

ur business, operations and

comm

unite

s. W

e aim t

o creat

e more in

clus

ve econo

mies by

sharing our skills

and expert

ise a

developing communi

pro

gramme

s that t

ransf

orm li

ves. W

e co

ntinu

e to supp

ort

our co

mmuni

tes th

rough Fu

turem

akers by S

tanda

Char

tere

d, our g

lobal in

tiat

ve to tack

le yout

h econo

mic

incl

uson an

d enabl

e the nex

t gener

ation t

o lear

n, ear

and gr

. For m

ore info

rmat

on on Fut

urem

akers

, as well

as our employ

volunteer

ing a

nd community investment

exp

endit

ure, pl

ease s

ee pa

ges 7

6 and 7

7 in t

he Sus

tainab

and R

sponsible Business section.

ESG reporting guide

e comply with the requirements for en

ironmental,

cia

and go

vernance reporting

under Appendix 27 of

the Hong

Kong Li

stng Rul

es with t

he excep

tion of A1.

3 on hazar

dous

wast

e and A

.6 on pr

oduct

ion and h

andlin

g of hazar

dous

wast

e and A

5 on pac

kaging. A

s an of

ﬁce-ba

sed ﬁna

ncal

ser

ices pr

ovider, we gene

rate min

mal hazar

dous wa

ste or

pac

kaging ma

teri

al. As su

ch, th

ese is

sues a

re not m

ateri

and we d

o not rep

ort t

hem.

Env

ironmental impact of our operations

e aim t

o minmis

e the env

ironme

ntal im

pact of o

operations as part of our

commitment to be a responsible

comp

any

. W

e re

port o

n ener

, wate

r and non

-hazardo

wast

e data w

hich be

come th

e basi

s of our G

reen

hous

e Gas

(

) emi

sson

s manag

ement

, as wel

l as the t

arget

s we

have s

et to re

duce en

ergy, water and wa

ste con

sumpt

ion.

Disclosures related to

Group

’

s environmental polic

es as

well a

s GHG

, energ

y efﬁc

ency, water and wa

ste pe

rfor

manc

metr

ics are included in the su

stainable and respo

nsible

bus

ines

s sect

ion of th

e Strat

egic re

por

t on pag

es 7

4 and 75

and in the supplementary environment data table on

page 45

Our reporting methodology is based upon the W

orld

Resources

Institute/

orld Busines

ouncil

for Sustainable

Devel

opmen

t Gre

enhou

se Ga

s Proto

col Cor

por

ate

Accou

nting an

d Repor

ting S

tanda

rd (Revise

d Editon

e rep

ort o

n all emis

son so

urces r

equir

ed und

er the

Com

panie

s Act 2006 (Stra

tegic Rep

ort an

d Dire

ctor

s’

Reports

) Regulations.

Using con

version factors from the International Energy

Agen

cy 2021 Emis

son

s Factor

s and th

e UK Gove

rnme

’

Department for Business

, Energy

& Industrial Strategy

emissons are

repor

ted in

etric tonnes

of carbon dioxde

equivalent (

)

, e

ncomp

ass

ing the s

ix K

to gas

es.

Sco

pe 1 emi

sson

s are deﬁne

d as ar

isng f

rom the co

nsum

ption

of en

ergy f

rom dire

ct sou

rces, d

urin

g the us

e of prop

ert

occu

pied by th

e Gro

up. On-si

te comb

ustio

n of fu

els in

cludng

dies

el, liq

uef

ed p

etrol

eum ga

s (LPG) and nat

ural ga

s, is

reco

rded u

sing me

ter

s, or w

here me

teri

ng is no

t availab

le,

collated from fuel vendor’

s inv

oces. Emissons from the

combustion of fuel in

roup-operated transportation

devi

ces, a

s well as f

ugit

ve emis

sons

, are exclu

ded as

being immat

eral.

Sco

pe 2 emi

sson

s are deﬁne

d as ar

isng f

rom the

con

sumpt

ion of in

drect so

urces o

f energ

, dur

ing th

e use of

prop

ert

y o

ccupie

d by the G

roup. En

ergy ge

nerat

ed of

-site i

the f

orm of p

urcha

sed e

lectr

ict

, he

at, st

eam or co

oling

, is

coll

ected a

s kilowa

tt hou

rs con

sume

d using m

eter

s or wh

ere

metering is not av

ailable,

collated from vendor’

s in

voces.

App

licabl

e to bot

h Scop

e 1 and 2 emis

son

s, we incl

ude all

indr

ect and di

rect so

urces o

f energ

y consu

med by bu

ildng

ser

vices

(

amongst

other activties

) withn

the space oc

cupied

by the G

roup, le

ase

d or owne

d. Thi

s can incl

ude ba

se buil

dng

ser

ices un

der lan

dlord co

ntro

l, but over w

hich we t

ypi

cally

hold a reasonable degree

of inﬂuence.

All da

ta cent

re facilt

ies wi

th cond

itonin

g syst

ems an

hard

ware rem

ainng un

der th

e opera

tion

al contr

ol of th

Group are

included in the

repor

ting

. This

does not include

ene

rgy us

ed at ou

tso

urced d

ata cen

tre faci

lties w

hich are

captured under Scope 3.

Sco

pe 3 emi

sson

s occur a

s a conse

quen

ce of the G

roup’

acti

vti

es but ar

isng f

rom so

urces n

ot cont

rolle

d by us.

Bus

ines

s air tra

vel data i

s colle

cted as p

son kil

omet

res

tra

velled by s

eati

ng clas

s, by em

ployees o

f the G

roup.

189

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

Dat

a is draw

n from c

ountr

y ope

ratio

ns tha

t have pro

cess

es in

place to ga

ther accurate

employee air

travel data

rom trav

management companies. Flights are categorised bet

ween

sho

, mediu

m and lon

g-haul t

rips

Emis

sons f

rom ot

her p

otent

ial Sco

pe 3 sou

rces su

ch as

ele

ctri

cty t

ransm

isso

n and dist

rbu

tion lin

e loss

es are n

cur

rentl

y accou

nted f

or on the b

asis t

hat th

ey canno

be calculated

with an ac

ceptable le

vel of reliab

lit

y or

con

siste

ncy. W

e do however cap

ture S

cope 3 e

misso

ns fr

out

urced d

ata cent

res an

d busin

ess air t

ravel excl

usive

ly in

ter

ms of car

bon e

misso

ns, b

oth ma

nage

d by third p

artie

Further informaton

on the princ

ples and methodologies

use

d to calcu

late t

he GHG e

miss

ons of t

he Gro

can be f

ound in o

ur rep

ort

ing cri

tera d

ocume

nt at

sc.com/

environmentcritera

Reporting period

The r

epor

ting p

erio

d of our e

nvironm

ental d

ata is f

rom

1 Oct

ober 2020 to 30 S

eptem

ber 2021. T

his allow

s sufﬁ

cent

tim

e for ind

epen

dent as

suran

ce to be g

ained p

rior t

o the

publicaton

of result

s. A

ccordingly

, the operating

income

use

d in this i

nventor

y co

rres

pond

s to the s

ame tim

e per

iod

rat

her tha

n the cal

endar ye

ar use

d in ﬁnancal r

epor

ting

surance

r Scope 1 a

nd 2 emis

sons a

re ass

ured by an in

depe

ndent b

ody, Glob

al Docu

ment

ation

, again

st the re

quire

ment

s of

ISO14

064.

Indicator

202

2020

Units

adcou

nt (

at yea

r end)

83,657

398

Headcount

Net i

nter

nal are

a of oc

cupie

d prop

ert

y cove

red by re

por

ting

998

,571

1,05

0,4

154,

999

Ann

ual op

erat

ing inc

ome f

rom 1 Oct

ober t

o 30 Se

ptem

ber

15,233

200

$mill

Greenhouse gas emissons (location based)

Scope 1 emiss

(

combustion of fuels

)

4,542

tonnes CO

eq/

year

Sco

pe 2 emi

sso

ns (pu

rchas

ed el

ectr

ict

)

870

tonnes CO

eq/

year

Sco

pe 1 & 2 emi

sso

85,662

,858

313

tonnes CO

eq/

year

Sco

pe 1 & 2 emi

sso

ns (UK an

d off

ore are

a onl

)

–

tonnes CO

eq/

year

Sco

pe 3 emi

sso

ns wit

h dist

ance up

lift (

ir tra

vel)

,654

tonnes CO

eq/

year

Sco

pe 3 emi

sso

ns (

loba

l Data C

entr

)

,13

,36

tonnes CO

eq/

year

otal S

cope 1

, 2 & 3 emi

sson

132

181,

350

286,7

tonnes CO

eq/

year

otal S

cope 1

, 2 & 3 emi

sson

s/head

count

.62

.17

3.40

tonnes C

eq/

headcount/y

ear

otal S

cope 1

, 2 & 3 emi

sson

pera

ting i

ncom

9.1

11.

18.86

tonnes CO

eq/

$m/y

Environmental

resource efﬁcency

Indirect non

-renewa

energ

consumpt

ion

142

184.2

222.

h/ye

Indirect rene

wable energy consumption

h/ye

Direct non-

renewable energy consumption

12.4

16.

18.8

Wh/ye

Direct renew

able energy consumption

0.7

h/ye

Energy consumption (

Group

)

183

215.6

258.

Wh/ye

Energy consumption

(UK and offshore area only

)

h/yea

Fur

the

r det

ail o

n our en

viro

nme

nt pe

rfo

rma

nce, a

s wel

l as as

soc

iate

d as

sum

ptio

ns an

d met

hod

olo

gie

s can be f

oun

d on

ges 4

51 an

d 452

Electr

onic

communicaton

The Boa

rd recogn

ises the i

mportanc

e of good

communicat

ons with all

shareholder

s. Directors ar

e in

regular contact

with our insttutional shareholders and

gen

eral pre

sent

ation

s are mad

e when we a

nnoun

ce our

ﬁnan

cal resu

lts

. The AGM pre

sent

s an op

port

unit

y to

communicate

ith

all shareholders. Our shareholders

are encouraged

to receive

our corporate documents

electro

nically

. The annual and inter

m

ﬁnancal stateme

nts,

Notice of AGM and any divdend circulars are all available

ele

ctron

ically

. If you do n

ot alre

ady re

ceive you

r corp

orate

doc

ument

s ele

ctron

ically an

d would l

ike to do so in f

utu

re,

please contact our

gistra

s at

address on page 4

Shareholders are also a

ble to vote electronic

ally on the

res

olut

ions b

eing pu

t to the AGM th

rough o

ur regi

strar

s’

website at i

nvestorcentre.co

.uk

Annual General Meeting

r 20

2 AGM will b

e held a

t 11:00am (U

K time

) (

6:0

0pm

Hon

g K

ong t

ime

) on 4 Ma

y 2022. Fu

rth

er deta

ils reg

arding

the f

orma

t, lo

catio

n and bus

ines

s to be tr

ansact

ed wil

l be

dis

d with

n the 2022 N

otice o

f A

r 20

1 A

M was hel

d on 12 May 2021 a

t 11:00am (U

K time

)

(

6:00

pm Hon

g K

ng tim

). Spe

cial bu

sines

s at the m

eet

ing

incl

uded t

he appr

oval of the p

ower to allo

t ECA

T1 S

ecur

ites

for cash with

out certain for

malites.

All re

solu

tion

s were pa

ssed a

t the me

etin

g, the d

etail

s of

whi

ch can be v

iewed on o

ur websi

te.

190

Standard Chartered

– Annu

al Rep

ort 202

Directors’ report

Other disclosures

Non-

audit ser

vices

The G

roup’

s non

-audit s

vic

es poli

cy (“the p

olic

y”) wa

revi

ewed and ap

proved by th

e Audit Co

mmitt

ee on 28

Oct

ober 2021. T

he po

licy i

s base

d on an over

ridng p

rincpl

tha

t, to a

void any act

ual or pe

rceive

d conﬂict

s of int

erest

the G

roup’

s aud

itor sh

ould o

nly be u

sed wh

en eith

er the

is evi

dence t

hat th

ere is no a

ltern

ative i

n term

s of qual

and t

here is n

o conﬂict w

ith th

eir dut

ies as au

ditor. EY

can be u

sed w

here th

e work i

s requir

ed by a reg

ulato

r or

competent authorit

The p

olic

y clea

rly se

ts o

ut the cr

iter

a for w

hen the Au

dit

Com

mitte

e’

s p

rior w

ritt

en approval i

s requ

ired. T

he pol

icy

req

uires a co

nser

tive app

roach t

o be taken t

o the

assessment of requests for EY to provide non

-audit serv

ices.

Sub

ject to t

he overr

idng pr

incple

, the Audi

t Commi

ttee’s

view i

s that E

Y can be o

f value in a ra

nge of no

n-aud

it ser

ice

acti

vti

es and sh

ould b

e allowed to t

ende

r subje

ct to the t

erm

of th

e polic

. Th

e Gro

up is req

uired t

o take a cons

vati

approach to interpretng

the potential threats to auditor

independence and requires commensurately robust

safeg

uards against them

UK le

gisla

ton and g

uidan

ce from t

he FRC se

ts ou

t thre

ats

to audit

independence incl

udng self

interest, self

review

fami

larit

, t

aking o

f a manag

emen

t role or co

nduct

ing

advocac

. In particul

, maintaning EY

’

s indep

endence from

the G

roup r

equir

es EY t

o avoid ta

king d

ecison

s on th

e Grou

’

beh

alf

. It i

s also re

cogni

sed as e

sse

ntial t

hat man

ageme

ret

ains th

e decis

on-mak

ing capa

bilt

y as to w

heth

er to act on

adv

ice give

n by EY as p

art of a n

on-au

dit ser

ice. Thi

s mean

not j

ust th

e abilt

y to act

ion the a

dvic

e given, b

ut to ha

suf

ﬁcent k

nowle

dge of t

he subj

ect mat

ter to b

e able to m

ake

a rea

sone

d and ind

epen

dent ju

dgem

ent as to i

ts valid

ty.

All of t

his is co

ntain

ed wit

hn the p

olic

By way

of (

non-exhaustive

) illustraton

of the applicaton

the p

rincp

les se

t out in th

e polic

, th

e follow

ing t

es of

non-audit services are lik

ely to be permissble under the policy:

•

Revi

ews of int

erm ﬁna

ncal info

rmat

on and ver

catio

n of

inte

rm proﬁt

s – th

e Grou

p would al

so exte

nd thi

s to work o

investor circulars in mos

t foreseeabl

e c

ircumstan

ces

•

xtend

ed au

dit or as

suran

ce work on ﬁ

nancal in

form

aton

and/

or ﬁnan

cal or op

erati

onal con

trol

s, whe

re this wo

rk is

closely linked

to the audit engagement

•

Agree

d upo

n proce

dures o

n mater

ials w

ithn or r

efere

nced

in th

e annual r

epor

t of the G

rou

p or an ent

y withn

the Group

•

Inte

rnal co

ntro

l review se

vice

Str

ictl

y prohib

ted un

der the p

olic

•

Bookkeeping, informaton technology and internal

audit ser

vice

•

Corp

orate ﬁnance serv

ices, valuation ser

vices or

litgation

support

•

ax or regulator

y structuring proposals

•

Ser

vice

s wher

e fees a

re paid on a c

ontin

gent b

asis

(

in wh

ole or in p

art)

•

Con

sult

ing ser

ices t

hat act

ively a

ssis

t in run

ning th

bus

ines

s in place o

f mana

gemen

t as opp

osed t

o provid

or val

idatng informaton, which

anagement then util

ses

in th

e opera

tion of t

he bus

ines

The p

olic

y is not a p

rescr

ibe

d list of n

on-au

dit ser

ices th

Y is per

mitte

d to prov

ide. Rath

, ea

ch req

uest fo

r EY to

prov

ide non-

audit s

vice

s will b

e asse

sse

d on it

s own mer

its

The Au

dit Com

mitte

e beli

eves that s

uch a cas

e-by-cas

appr

oach b

est acco

mmod

ates (i

) t

he nee

d for th

appropriate rigour and

challenge to be appli

d to

each

req

uest f

or EY t

o provide n

on-au

dit ser

ices w

hile (i

)

pre

ser

vin

g suf

ﬁcent ﬂex

iblit

y for t

he Gro

up to en

gage E

to pro

vide non-audit

ervices where they are

able to deliver

par

ticu

lar value t

o the G

roup an

d where t

he prop

ose

ser

ices can b

e provi

ded wi

thou

t compro

misng E

Y’s

obje

ctv

y and ind

epen

dence. T

o ens

ure th

at the G

roup

will c

omply w

ith a cap t

hat limt

s fe

es on non

-audit s

vic

prov

ided by E

Y to und

er 70 per cent o

f the ave

rage G

roup

aud

it fee f

rom the p

revio

us thre

e cons

ecut

ive ﬁnan

cal year

(

whi

ch will ap

ply f

rom EY

’

s f

our

th year of b

eing t

he Gro

’

extern

al auditor

)

, th

e policy requir

es that annual non-audit

ser

ice fe

es are lower t

han 70 per cen

t of the a

verage a

nnual

Gro

up aud

it fee up t

o this t

ime. The c

aps exclu

de audit r

elate

non-

audit s

vice

s and se

vices c

arri

ed out p

urs

uant to l

aw or

regulation. For 2

021, without deducting non-audi

t ser

vice fees

whi

ch were re

quired by l

aw or re

gulat

ion and p

erfo

rme

d by

, t

he rati

o was 0.4:

1. D

etail

s relat

ing to E

Y‘s rem

unera

tion as

the Group statutor

y auditor

and a descripton of

he br

cate

gor

ies of th

e t

ypes o

f non-a

udit se

vices p

rovide

d by EY

are gi

ven in Not

e 38 to t

he ﬁnanc

al state

ment

The Au

dit Com

mitte

e review

s the ap

point

ment of t

he Gr

oup

’s

statutor

y auditor

, its effectiveness and its relationsh

p with the

Group, which

includes monitorng our use of

the auditors for

non-audit

ser

vices and

the balance of

audit and non

-audit

fees pa

id.

Foll

owing an an

nual pe

rfor

manc

e and ef

fect

ivenes

s revie

w of

, it wa

s felt t

hat E

Y is cons

idere

d to be ef

fect

ive, obj

ectve

and independent in

s r

ole as Group statutor

tor.

Each dir

ector b

elieves t

hat th

ere is no r

elevant in

form

aton of

whi

ch our G

roup st

atut

y audi

tor is un

aware. Eac

h has taken

all st

eps ne

cess

y as a dire

ctor to b

e aware o

f any relevant

audit informaton

and to establish that

the Group statutor

auditor is made

aware of an

y per

tinent

informaton.

Y will be in a

tten

dance at t

he 2022 AGM

. A resol

utio

n to

re-

appoin

t EY a

s audito

r was prop

ose

d at the C

ompany

’

2021 A

M and wa

s succes

ully pa

sse

Y is a Publi

c Intere

st Enti

y Auditor r

ecogn

ised in a

ccorda

nce

with the Hong

Kong F

inanca

l R

epor

ting

Council Ordinanc

By ord

er of th

e Board

Scott Corrigan

Inte

rim G

roup C

ompany S

ecret

17 Feb

ruar

y 202

Standard Char

tered PL

Regis

tere

d No. 966

425

191

Standard Chartered

– Ann

ual Rep

t 2021

Directors’ report

ate

men

t o

f dir

cto

’ r

siblite

The directors are

resp

onsible

for preparing the Annual

Repo

rt and t

he Gro

up and C

ompany ﬁn

ancal st

ateme

nts

in accor

dance with applicable

and regulations.

Com

pany law r

equir

es the di

recto

rs to p

repare G

rou

p and

Com

pany ﬁnan

cal stat

emen

ts fo

r each ﬁn

ancal year.

Und

er that l

aw they a

re requ

ired to p

repar

e the Gr

oup

ﬁnanca

l statement

s i

n accorda

with UK

-adopte

internatonal accounting standards

in conformity with

the r

equir

ement

s of t

he Com

panies Ac

t 2006.

•

The G

roup ﬁ

nancal s

tatem

ent

s have be

en pre

pared i

accordance

ith

UK adopted internatonal accounting

standards

and International

Financ

al Reporting Sta

ndards

as adopted by

the European Union

;

•

The Company ﬁnanc

al statement

s hav

e be

properly

prepared in ac

cordance with UK adopted in

ternatonal

accountin

g standards as applied in accordan

ce with

ction 4

08 of th

e Comp

anies Act 20

06; and

•

The ﬁnanca

l statements have been prepared in

acco

rdance w

ith th

e requi

remen

ts of t

he Co

mpanie

Act 20

Und

er comp

any law th

e direct

ors m

ust not a

pprove th

ﬁnan

cal stat

ement

s unl

ess t

hey are sa

tisf

ed t

hat th

give a t

rue an

d fair vi

ew of the s

tate of a

ffai

rs of t

he Gro

and C

ompany an

d of the

ir proﬁt or l

oss fo

r that p

erio

In pre

pari

ng each o

f the G

roup an

d Comp

any ﬁnancal

statement

s, the directors are required to:

•

Sel

ect sui

table a

ccount

ing po

lices an

d then ap

ply th

consistently;

•

Make ju

dgeme

nts a

nd est

imate

s that ar

e reas

onabl

releva

nt and reliable

;

•

Sta

te whe

ther t

hey have b

een pr

epare

d in accor

dance

wit

h UK and EU IF

RS;

•

ses

s the G

roup an

d the Co

mpany

’

s abil

ty t

o conti

nue as

a going c

cern, d

clos

ng, as appl

icable, matters related

to go

ing conc

ern; and

•

Use t

he goin

g concer

n bas

is of acco

unti

ng unle

ss th

eith

er inte

nd to liq

udate t

he Gro

up or th

e Comp

any or to

cea

se ope

ratio

ns, or h

ave no re

alist

c alter

nati

ve but to

do so

The directors are

resp

onsible

for keeping adequate

acco

untin

g recor

ds tha

t are suf

ﬁcent to s

how and ex

plain

the Compan

y’s

transactions a

nd disclose with

reasonable

accu

racy a

t any time th

e ﬁnanca

l posit

on of th

e Comp

any

and en

able t

hem to en

sure t

hat it

s ﬁnanca

l state

ment

comp

ly wit

h the C

ompani

es Act 2006

. They are r

espo

nsibl

for such internal control

as th

ey dete

rmine i

s nece

ssar

y t

enab

le the p

repar

ation o

f ﬁnancal s

tatem

ent

s that a

ee fro

m mater

ial mis

stat

emen

t, wh

ethe

r due to f

raud or

err

, an

d have ge

neral re

spon

siblit

y fo

r taki

ng such s

teps

as are r

easo

nabl

y open t

o them to s

afeg

uard th

e ass

ets

of th

e Grou

p and to pr

event and d

etect f

raud a

other irregularties.

he G

roup’s Risk M

ana

gem

ent Fra

mewo

rk an

d Syst

em of In

ter

nal C

ont

rol

app

lie

s onl

y to wh

oll

y cont

rol

led s

ubsi

dar

ies o

f the G

rou

p, and n

ot to

ciat

es, J

oin

t V

tur

es or S

tru

ctu

red E

ntit

es o

f the G

rou

Under applic

able law and regulations, the directors ar

e also

responsible for preparing

a Strategic R

epor

t, Directors’

Report,

Directors’ R

emuneration Report and Corporate Governance

Sta

temen

t that co

mplie

s with t

hat law a

nd tho

se reg

ulati

ons.

The director

s are respons

ible for the maintenan

ce and

inte

grt

y of t

he cor

porat

e and ﬁnan

cal info

rmat

on incl

uded

on th

e Comp

any’s websit

e. Legisl

aton in t

he UK gover

ning th

preparation and dissemnatio

n of

ﬁnan

al statement

s may

differ from legislaton

in other jursdictons.

Respon

siblit

y stat

ement of t

he direc

tors in

res

pect of t

he annual ﬁn

ancal rep

ort

e con

ﬁrm tha

t to the b

est of o

ur know

ledg

•

The ﬁn

ancal st

atem

ent

s, pre

pared i

n accord

ance wit

h the

applicable set of acco

unting standard

s, give a true and fair

view o

f the as

set

s, li

ablite

s, ﬁnan

cal pos

iton an

d proﬁt or

los

s of the C

omp

any and the u

nder

takin

gs inc

lude

d in the

con

solid

aton ta

en as a w

hole; an

•

The S

trate

gic rep

ort i

nclud

es a fair rev

iew of th

devel

opmen

t and per

for

mance o

f the bu

sines

s and th

positon

of the Company

and the undertakings i

ncluded

in th

e conso

lidat

on taken as a w

hole

, toge

ther w

ith a

descripton

of the emerging

risk

s a

nd uncertaintes

that

they face

e con

sider t

he Ann

ual Repo

rt and Acc

ount

s, ta

ken as a

whole, is fair

, bala

nced and understandable and pro

vides the

informaton necessar

for shareholders to assess the Group

’

pos

iton an

d per

form

ance, bu

sines

s mod

el and st

rate

By ord

er of th

e Board

And

y Half

ord

Group Chie

f F

inan

c

al Ofﬁcer

17 Feb

ruar

y 202

192

Standard Chartered

– Annu

al Rep

ort 202

sk r

evi

193

Standard Chartered

– Annu

al Rep

ort 202

Ris

k re

vie

w and Cap

ita

l revi

Risk index

Risk update

199

Risk proﬁle

258

Enterpr

ise Risk

anagement F

ramework

288

apital r

eview

Cre

ting

the

orkplace

f t

e fu

In 2

21, we implemented F

ure W

orkplace, Now –

hybrid

-w

king whic

h combines virtual and ofﬁce-

based working, with greater ﬂexib

lit

y in w

ork

ing

patterns and locations. The programme has been

rolled out in 28 ma

s – includ

ng Hong Kong,

Singapore, the Un

ited K

ingdom, the Un

ited States,

the United Arab Emi

rates as well as our Global

Business Ser

vice locations in India and Ma

laysia –

where 73 per cent of employ

ees have agreed

ﬂexible

-w

rking

arrangem

ents

Rea

d mor

e onli

ne at

ww.sc.com

/hybridworkng

sk rev

iew and C

api

tal r

eview

194

Standard Chartered

– Annu

al Repo

rt 2021

sk r

evi

Ind

isk re

w a

nd Ca

pit

al re

vie

Risk I

ndex

Annual

Report and

Accounts

Pil

lar 3

Report

Risk update

196

Ris

k pro

ﬁle

ur ri

sk pr

oﬁle i

n 2021

Credit R

isk

200

32 - 80

Basis of preparation

Cre

dit Ris

k over

view

200

IFRS 9 expected credit los

s princples and approaches

ximu

m expo

sure t

o Credi

t Risk

202

Analysis of

ﬁnancal

instr

ument

by stage

203

Credit qualit

y analysi

205

58 - 7

•

Cre

dit qu

alit

y by clie

nt seg

ment

205

•

Credit qualit

y by geographic region

210

Movem

ent in g

ross e

xpos

ures a

nd cre

dit imp

arme

nt for l

oans a

nd adva

nces

debt securit

es, undrawn c

ommitments and ﬁnanc

al guarantees

211

Movem

ent of d

ebt s

ecur

ites

, alte

rna

tive T

ier 1 an

d oth

er elig

ble bil

213

Analysis of

stage 2 balances

218

3 - 56

Credit imparmen

charge

218

VID-

19 relief measures

219

Problem credit managem

ent and provisoning

220

•

For

bor

ne and o

ther m

odif

e

d loan

s by clien

t segm

ent

•

For

bor

ne and o

ther m

odif

e

d loan

s by regi

221

•

Cre

dit

-imp

ared (stage 3) loa

ns and a

dvanc

es by clie

nt seg

ment

222

•

Cre

dit

-imp

ared (stage 3) loa

ns and a

dvanc

es by geo

graph

ic reg

ion

222

Credit Risk mitgation

222

1 - 73

•

Collateral

222

•

llate

ral hel

d on lo

ans and a

dvanc

223

•

Collateral

– Corporate, Commercia

l and Institutona

l Banking

223

•

Collateral

– Consumer

, Private a

nd Business Ba

nking

•

Mortgage loan-to-

value ratios b

y geography

225

•

Collateral

and other credit

enhancements possessed or call

ed upon

225

•

her Cre

dit Ri

sk mit

gatio

Other portfolio a

nalysis

226

•

Mat

uri

ty a

naly

sis of l

oans a

nd adva

nces by cl

ient s

egme

•

Credit qualit

y by industr

•

Ind

ustr

y a

nd Reta

il Produ

cts a

naly

sis of l

oans a

nd adva

nces by

geographicregion

228

•

ulnerable sectors

229

•

bt sec

urit

es and o

ther e

ligbl

e bills

232

IFRS 9 e

xpe

cted c

redit l

oss m

etho

dolo

233

mpos

iton o

f credi

t impa

rmen

t provi

sons

234

raded

Risk

245

81 - 96

Market risk change

245

Counte

rpart

y Credit Risk

Der

ivat

ve ﬁnan

cal ins

tru

ment

s Cre

dit Ri

sk mitg

atio

248

Liqudity and F

unding Risk

Liq

udit

y and f

ding r

isk me

tric

249

Encumbran

251

Liq

udit

y ana

lysi

s of th

e Grou

’s balan

ce she

253

Int

ere

st Rat

e Ris

k in th

e Bank

ing B

ook

256

Operational and T

echnology Risk

257

Operational Risk pro

ﬁle

257

Other

princpal

risks

257

195

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Risk I

ndex

Annual

Report and

Accounts

Pil

lar 3

Report

Risk management approach

Enterprise Risk Management F

ramework

258

4 -5

Princpal Risk

Emerging Risk

280

Capital

Capital sum

mar

288

CRD Capital base

289

12 - 15

Movem

ent in t

otal ca

pital

290

Ris

-weig

hted a

sse

291

26 - 29

UK Lever

age ra

tio

293

The f

ollowin

g par

ts of t

he Ri

sk review an

d Capi

tal revi

ew form pa

rt of t

hes

e ﬁnan

cal st

ate

men

ts an

d are au

dite

d by the

exte

rnal a

udit

ors:

•

a) Risk r

eview:

Dis

closu

res mar

ked as ‘audit

ed’ f

rom t

he star

t of Cre

dit ris

k sect

ion (pag

e 200

) to t

he end o

f Oth

er prin

cpal

sks in t

he sam

e secti

on (pag

e 257

); and

•

) Ca

pita

l review:

able

s marked a

s ‘

udite

d’ f

rom th

e star

t of ‘CRD capi

tal bas

e’ to th

e end of ‘

Movemen

t in tota

l capital

’

exclu

ding ‘

tal ris

-weigh

ted as

set

s’ (pa

ges 289 to 2

196

Standard Chartered

– Ann

ual Rep

t 2021

sk r

evi

Risk update

isk update

All risk t

ypes, bot

h ﬁ

anc

al and non-

ﬁnancal

, are managed and reporte

in accor

dance with the G

roup

’

s Enterprise Risk Management F

ramework.

Our ke

y highlgh

ts f

rom the past year a

re shown here.

Our p

ortfolio q

uality

Wide-rang

ing disrupton to supply chains

and risng inﬂat

level

s, in ad

diton to t

he hum

an cost o

f the pan

demic

continued to plac

e intense pressure on

the majort

y of

our

mar

kets

. Desp

ite th

ese ext

reme ch

alleng

es, we h

ave built

a sol

id foun

datio

n that h

as help

ed us to d

eliver a g

ood

per

for

mance w

ith a res

ilent r

isk proﬁ

le. This ye

demonstrated our commitment to strong and

sustainable

grow

th, wi

th cont

inued i

mproveme

nts s

een in a n

umbe

r of our

met

ric

s since t

he end of 2020. Cred

it Risk re

mains e

levated a

the Group continues to

monitor the impact of the

andemic

and o

ngoin

g volatil

ty i

n the re

al estat

e sect

or in Chin

Thro

ugh ou

r stres

s test

ing cap

abilti

es and ext

ensi

ve port

folio

revi

ews, we id

entﬁe

d and pro

active

ly man

aged a nu

mber

of po

rtf

olios t

hat were a

t risk

, esp

eciall

y areas w

ith hig

her

lnerab

ilt

y to CO

D-

19 an

d volatil

e commo

dit

y pri

ces,

suc

h as A

iato

n, Hos

pitalt

y and O

il & Ga

s. T

o suppo

rt ou

clients, we continued to enact c

omprehen

sive

supp

ort

sch

emes fo

r retai

l and cor

porat

e custo

mer

s, inc

ludng l

oan

and interest repayment holidays, cov

enant relief

, fee w

aiver

or can

cellat

ions

, loan ex

tens

ions an

d new facilt

ies

In th

e secon

d half of t

he year, we bega

n to see s

igns of

recove

y in som

e market

s as ac

tions t

aken by govern

ment

and vac

cine roll-

out

s help

ed to all

eviate t

he eco

nomic e

ffe

cts

of th

e pand

emic. H

owever

, t

he resu

rgenc

e of CO

D-

infe

cton

s and new var

iant

s saw in

crea

sed ca

ses as 2021

came t

o a close

, and loc

kdowns wer

e reint

roduc

ed in a

num

ber of t

erri

tore

s. W

e re

main vi

glant as t

he recove

rem

ains un

even glob

ally

, w

ith som

e count

ries i

ncrea

sng

reli

ance on vac

cines as a m

eans o

f mana

ging th

e pande

mic

and o

ther co

untr

ies usi

ng a wid

er range o

f meas

ures

. The

thr

eat of pr

olong

ed weak e

cono

mic out

look

s may l

ead to a

sus

taine

d peri

od of in

creas

ed ri

sk aver

sion

, uncer

taint

y an

emerging r

isks.

The G

roup’

s tot

al gros

s loan

s and adva

nces in 2021 wer

04.1 billon, an i

ncrea

se of $1

5.8 bi

llon fro

m 20

20. Stag

e 2

and 3 lo

ans ha

ve improve

d since 2020 by $7 billo

n to

$24.

9 bil

lon, as we co

ntinu

e to foc

us on high-

qualit

ignati

on. St

age 3 lo

ans dec

reas

ed to $

1 b

illon (2020:

.2 bi

llon

), with t

he overall co

ntrib

uton t

o the to

tal rem

ainng

unc

hange

d at 3 per ce

nt.

In Co

rpor

ate, Co

mmerc

ial and In

stit

utona

l Bank

ing, st

age 1

gros

s loan

s incre

ase

d by $11.4 bill

on to $12

2.4 b

illon,

representing 85 per cent of

ortfolio (2

020:

per cent

on th

e back o

f trans

fer

s from s

tage 2 an

d contin

ued fo

cus on

orignation of

investment grade

lending. Compared to 20

20,

exp

osure i

n earl

y aler

ts de

crea

sed by 49 per c

ent to $5

.5 bill

(2020: $10.7 bill

), mainly d

ue to re

ducti

ons in cou

nter

par

exp

osure a

nd clien

ts b

eing rem

oved fr

om ear

ly aler

t. Wh

ile

ear

ly ale

s have de

crea

sed, t

he Gro

up rema

ins vig

lant in

view o

f per

sist

ent chal

lengin

g condit

ons in s

ome mar

ket

s and

ctor

s. Cre

dit Gra

de 12 bal

ances de

crea

sed to $

1.7 bi

llon

(2020: $2.2 b

illon

) ma

inly du

e to repa

yme

nts a

nd outﬂ

ows to

non-p

erf

ormin

g loan

s, tha

t were par

tly o

set by sove

reign

rating downgr

ades. The percentage of

investment grade

cor

porat

e expo

sure ha

s also in

crea

sed to 69 p

er cent

comp

ared t

o 6

2 p

er cent a ye

ar ago, re

ﬂecti

ng an incr

ease

in repurcha

se agreement balan

ces and high-qualit

ignati

ons. E

posur

e to our t

op 20 corp

orate c

lient

s as a

per

centa

ge of T

ier 1 capit

al has in

crea

sed by 1 pe

r cent to 61

per c

ent (2020: 60 per ce

), dri

ven by incre

ase

d expo

sure to

inv

stment grade

client

s. The Corporate, Commercial a

Instit

utonal Bankin

g portfolios re

main predominant

short

-tenor a

nd continue to

be diversﬁed across i

dustry

sectors, product

s, and

ogra

phies.

r Cons

umer, Privat

e and Bus

ines

s Bank

ing por

tfo

lio rema

ins

stable a

nd resilent

despite ongoing

challenges posed b

y the

pan

demic

, with s

tage 1 gr

oss lo

ans inc

reasn

g by $8.0 bil

lon

in 2021 dri

ven by growt

h in Mor

tgag

e and Se

cured we

alth

products

Stage 1 loans represent 97

cent of the Consumer

Pri

vate and B

usine

ss Ba

nking p

ort

folio (2020: 97 per c

ent

)

wit

h 96 per cent r

ated a

s ‘St

rong’

. Sta

ge 2 loan

s redu

ced by

$0.7 bil

lon, ma

inly dr

iven by mor

tga

ge loan

s moveme

nt fro

stage 2 to

stage 1 due to forward-looking macroeconomic

outlook improvement. Stage 3 loans

remain stable at

1 per

cent o

f the po

rtf

olio. Th

e major

t

y of Con

sume

, Pri

vate and

Bus

ines

s Bank

ing pro

duct

s cont

inue to b

e ful

ly sec

ured lo

ans

at 86 p

er cent o

f tota

l loans (2020: 86 p

er cent)

. T

he overall

average loan

-to-value of

ortgage portfolio remai

low at 41 per cen

t. Th

e unse

cure

d por

tfolio h

as rem

ained ﬂ

comp

ared t

o the prev

ious ye

ar and con

tinu

es to make up

a sma

ll propo

rti

on of tot

al Con

sumer, Priva

te and Bu

sines

Bankin

g exposure.

Average G

roup V

ue at Risk (

aR) in 20

21 was $

54.

8 millon

a signﬁc

ant dec

reas

e compar

ed to th

e previ

ous year

(2020: $97

.6 mil

lon

) due t

o extre

me mar

et move

ment

fro

m 20

20 dropp

ing out o

f the on

e-year V

aR t

ime hor

izon.

However, volati

lty s

tart

ed to in

creas

e in the s

econ

d half

of 2021, dr

iven by t

he impa

ct of new COVID-

19 var

iant

rading activti

es have

remained relativ

ely unchang

and primar

ly client driven.

ey highlght

s 20

•

set qu

alit

y has c

ontin

ued to im

prove in a cha

llengi

macroeconomic environment

•

Credit imparm

ent signﬁcantly reduced acro

allst

ages

•

The G

roup h

as main

tane

d a stron

g liqudit

y an

capital posito

197

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

The G

roup m

aintan

ed str

ong liq

udit

y rati

os desp

ite th

cont

inue

d impac

t of the COVID-

19 s

tres

s. Th

e liqudit

coverag

e ratio (LCR

) h

as rem

ained u

nchan

ged at 143 p

er cent

des

pite rev

isng ou

r appro

ach to cal

culat

ing the LCR. We have

re-

asse

sse

d the me

thod

olog

y to be

tter re

ﬂect th

e por

tabilt

of liq

udit

y acro

ss th

e Grou

p, while st

ill cons

ider

ng curr

enc

conv

tib

lit

y and regulatory intra group l

imts

. The

roup

’

adva

nces-to

-depo

sit

s ratio h

as dec

reas

ed by 2 per ce

to 59

1 p

er cent

, dri

ven by an 8 per ce

nt growt

h in cust

omer

dep

osit

s, m

ost of wh

ich came f

rom cor

por

ate cust

omer

Cus

tomer l

oan grow

th was ma

inly f

rom mor

tga

ges in

Sing

apor

e and Hon

g K

ng, an

d corp

orate l

oans ac

ross

the G

roup.

The G

roup’

s CE

T1 cap

ital de

crea

sed by 28 ba

sis po

int

s to

14.1 per cen

t (202

0: 1

4.4 per ce

). Furt

her de

tails

, inclu

dng

exp

lanat

ion of pro f

orm

a change

s as at 1 Jan

uar

y 2022

can be f

ound in t

he Cap

ital Review s

ecti

on on Page 28

ey indcators

2021

2020

2019

Group total

business

288.

Sta

ge 1 lo

ans ($ billon)

256.4

Sta

ge 2 lo

ans ($ billon)

16.8

2.7

20.

Sta

ge 3 lo

ans, c

redit

-im

pare

d ($ billon

)

Sta

ge 3 cover r

atio

58%

Sta

ge 3 cover r

atio (incl

udng co

llate

ral)

75%

85%

Corporate, Commercial &

Institut

onal

Banking

Inv

estm

ent

grade corporate net e

xposures as a

erc

entage of total corporate

nete

osures

69%

62%

61%

Loan

s and ad

vance

s matu

rin

g in one ye

ar or les

s as a pe

rcent

age of t

otal l

oans a

advances

to customers

Earl

y aler

t por

tfo

lio net e

xpo

sure

s (

$ bi

llon

)

5.5

10.7

5.3

Cre

dit gra

de 12 bal

ances ($ bil

lon

)

1.7

2.2

1.6

Aggr

egat

e top 20 cor

por

ate ne

t expo

sure

s as a per

centa

ge of T

ier 1 ca

pital

llate

ralis

aton o

f sub-inve

stme

nt gra

de net ex

pos

ures m

atur

ing in m

ore th

an one ye

49%

45%

Consumer

, Priv

& Busines

s Banki

Loan-

to-valu

e rati

o of Con

sume

, Pr

ivate & B

usin

ess B

anki

ng mor

tga

ges

41%

45%

hes

e num

ber

s rep

res

ent t

ota

l gros

s loa

ns an

d adva

nce

s to cus

tom

A num

ber of m

anage

ment ac

tions we

re taken th

rough

out th

year t

o mitga

te the ef

ct of CO

D-

19 on o

ur por

tfo

lios and

sk proﬁle

, infor

med by st

ress t

estin

g of vario

us CO

VID

related scenarios and

ep-div

es on specif

c

ortfolios.

arious short

-term relief

asures w

ere implemented and

we ha

ve increa

sed e

ngage

ment w

ith our c

ustom

ers t

o ﬁnd

appropriate ﬁna

ncng options

here

ailable. This includes

enh

ancing o

ur moni

torn

g of facilt

y dr

awdown

s, lo

an and

interest repayment holidays, covenant

relief

, fee waiv

s or

canc

ellati

ons

, loan ext

ensio

ns and n

ew facilt

ies.

In Co

rpor

ate, Co

mmerc

ial and In

stit

utona

l Bank

ing,

0.2 p

er cent o

f the po

rtfo

lio are su

bject t

o relief m

easu

res.

Aro

und 68 p

er cent o

f the am

ount

s appr

oved are for t

enor

exte

nsion

s of 90 da

ys or le

ss and ap

proxim

atel

y 17 per cen

of th

e relie

fs gran

ted are t

o clien

ts in v

ulner

able se

ctor

In Co

nsum

, Pr

ivate an

d Busin

ess B

ankin

g, les

s than 1 p

er cent

of to

tal Co

nsume

, Pri

vate and B

usin

ess B

ankin

g expo

sure

has h

ad reli

ef mea

sures a

pproved a

s at 31 Dec

ember 2021

, of

whi

ch 51 per cen

t is fu

lly se

cured

. Throu

gh the u

se of cus

tome

sur

eys a

nd analysis of

the C

OVID-

9 impact and

delinquency

tre

nds, we h

ave ide

ntﬁed a hi

gher

-r

isk co

hort o

f Busin

ess

Banking customers which ar

e being ac

tively managed.

56 p

er cent o

f the Bu

sines

s Bank

ing po

rtf

olio is f

ully s

ecur

by property or government guarantees.

Whil

e the ma

croec

onomi

c environ

ment h

as stab

ilsed f

the m

ajor

ty o

f the ma

rket

s in our fo

otpr

int

, we conti

nue to

be co

gnisa

nt of the p

oten

tial lo

nger

-ter

m impa

ct, es

pecia

lly

as re

lief me

asure

s have now b

een e

ased i

n most of o

major ma

e are m

anagin

g expo

sure

s to a set of i

dentﬁe

d vuln

erabl

ctor

s inclu

dng Aviaton

, Oil & G

as, C

ommo

dit

y T

ader

Met

als & Minn

g, Co

mmerci

al Real Es

tate an

d Hote

ls &

our

ism particularly cl

osely

. These sectors represent 28 per

cent (3

1 Dece

mber 2021: 2

7 per cen

) of t

he tot

al net ex

posur

in Co

rpor

ate, Co

mmerc

ial and In

stit

utona

l Bank

ing, w

ith the

incr

ease o

f 10 per c

ent to $7

5 billon (2020: $65

.6 billo

)

largely due to

higher levels of

undrawn commitments and

ﬁnancal guarante

es, parti

cularly in the Comm

odit

y T

rader

and C

omme

rcial Real E

stat

e secto

Sta

ge 3 loans

Ove

rall, st

age 3 gro

ss loan

s and ad

vances t

o custo

mer

dec

reas

ed by 12 per c

ent in 2021, f

rom $9

.2 b

illon to $

8.1 billon.

Sta

ge 3 provi

sons d

ecrea

sed by $0.

7 billon to $

4.7 b

illon.

In Co

rpor

ate, Co

mmerc

ial and In

stit

utona

l Bank

ing, gro

sta

ge 3 loan

s decr

ease

d by $1.1 billon co

mpare

d with

31 De

cembe

r 20

20 due to d

ebt sa

les and re

pay

ment

s in A

sia,

and A

fric

a and Mid

dle East re

gions

. Provis

ons de

crea

sed by

$0.7 bil

lon to $3

9 billo

n drive

n by repa

ymen

ts an

d writ

e-of

Inﬂow

s into st

age 3 were l

ower by 53 per c

ent at $1

.7 billo

comp

ared w

ith $3

.6 billo

n in 202

0. T

he new inﬂ

ows in 2021

were m

ainly in A

sia, a

nd Afr

ica and t

he Mid

dle East

Gro

ss st

age 3 loa

ns in Co

nsume

, Pri

vate an

d Busin

ess B

ankin

rem

ained b

roadl

y stabl

e at $1.

6 billon

198

Standard Chartered

– An

nual Re

por

t 2021

sk r

evi

Risk update

The s

tage 3 cove

r ratio (

exclu

ding col

later

al) in the t

otal

cust

omer l

oan bo

ok rema

ined at 5

8 per ce

nt. C

orpo

rate,

Com

mercia

l and Ins

titu

tonal B

ankin

g cover rat

io decre

ase

by 1 per ce

nt to 59 per c

ent as a re

sult of w

rite

-of

fs an

d new

acco

unt

s with a l

ower coverag

e than ex

istng s

tage 3 lo

ans

The C

onsu

mer, Private a

nd Bus

ines

s Banki

ng cover rat

is 51 pe

r cent (2020: 4

7 p

er cent) prim

arly d

ue to a new

prov

ison take

n on a Busi

ness B

anki

ng clien

t. Th

e cover

rat

io inclu

dng coll

ateral d

ecre

ased t

o 75 per c

ent (2020:

6 per cent

)

Credit im

parment

At Gro

up level, t

otal cr

edit imp

arm

ent char

ge inclu

dng th

res

tru

ctur

ing por

tfo

lio signﬁca

ntly re

duce

d to $0.

3 billon

(2020: $2.

3 billon

) r

epres

entin

g a loan lo

ss rat

e of 7 bas

poi

nts (b

) of ave

rage cus

tome

r loans a

nd advan

ces (2020:

66 b

)

. D

ecre

ases we

re see

n acros

s all sta

ges, w

ith st

age 3

imp

armen

t down by $1

.3 b

illon, m

ajort

y o

f which wa

s from

Corporate, Commercial a

Inst

itutona

l Banking. Stage 1

and 2 im

parm

ent de

creas

ed by $7

49 millon

, par

tly du

e to

red

uctio

n in stag

e 2 expo

sures f

rom lowe

r levels of e

arly

alert

s, additon

al collateral and improvement in probabilt

of default, and partly due to

improvng macroeconomic

for

ecast

s and r

educt

ion in COVID-

19 m

anage

ment over

lay

Cor

por

ate, Co

mmerci

al and Ins

titu

tonal B

anki

ng saw a

release of $4

4 mill

on, a signﬁc

ant improvement c

ompared

wit

h the cre

dit imp

arme

nt charg

e of $1.

5 billo

n last ye

Sta

ge 1 and 2 im

parm

ent is a ne

t charg

e of $23 m

illon main

dri

ven by charg

es fro

m a post m

odel a

djust

ment f

or mult

iple

eco

nomic s

cenar

ios and t

he sovere

ign down

grade o

f Sri

Lanka. Th

e CO

D-

19 man

agem

ent over

lays al

so red

uced by

$95 millo

n altho

ugh thi

s was of

et by a new

, s

epara

tely

sess

ed man

agem

ent overl

ay of $95 mi

llon over th

e end

of 2021 for t

he Co

mmerci

al Real Es

tate ex

posu

res in Chi

na.

Sta

ge 3 cred

it rele

ase of $

7 m

illon was d

ue to sig

nﬁcant

rec

overie

s dur

ing th

e year.

Con

sume

, Pri

vate and B

usin

ess B

ankin

g credit i

mparm

ent

has d

ecre

ased (

1: $285 millo

n, 2020: $7

1 millo

)

. S

tage 1

and 2 impa

ment w

ere signﬁcantly lo

wer compared with

2020 at $32 millo

n, mainl

y due to EC

L revers

als as t

for

war

d-look

ing ma

croec

onomi

c outlo

ok imp

roved in

rel

ative te

rms

. Stag

e 3 credi

t impar

ment of $2

53 mil

lon

dec

reas

ed by 23 p

er cent d

riven by b

ette

r recover

ies.

Cen

tral an

d othe

r items s

aw a tot

al impar

men

t of

2 millon p

rimar

ly due t

o mult

iple eco

nomic s

cenar

post model adjustment

The

re was a ne

t $9 millon im

parm

ent rel

ease f

rom th

Group

’

s discontnued businesses.

2021

2020

age 1 & 2

$millon

age 3

$millon

age 1 & 2

$millo

Stage 3

$millo

otal

$millo

Ongoing business

ortfoli

Corp

orate, Commercial &

Institu

tonalBanking

)

390

529

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

253

285

328

ntral & o

ther i

tems

(1)

–

Credit imparment

charge/

(

release

)

263

827

Restructuring business

portfolio

Others

(2)

(7)

(9)

–

Credit imparment

charge/

(

release

)

(2)

(7)

(9)

–

otal credit imparment charge/

(

elease

)

254

827

,498

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng; Pr

ivat

e Ban

kin

g and Ret

ail B

ank

ing t

o Con

sum

er, Priv

ate & Bu

sin

ess B

ank

ing

. Fur

the

, c

ert

ain cl

ient

s ha

ve be

mov

ed be

een t

he t

wo new c

lien

t seg

men

. Pri

or pe

rio

d has b

een r

est

ate

Fur

the

r det

ail

s of th

e ris

k per

for

man

ce fo

r 2021 is s

et ou

t in the

isk p

roﬁ

cti

on (pa

ges 1

99 to 2

)

199

Standard Chartered

– Ann

ual Rep

t 2021

sk rev

iew and C

api

tal r

eview

Risk

proﬁle

Our ri

sk proﬁle in 2021

Our Enterprise Risk Management F

ramework (

ERMF) enables

us to closely ma

nage enterprise-wide risks with the objectv

of maximsing

risk

-adjusted returns while remain

ith

n our

Risk Appetite. Identifcation and assessment of potentially

adve

rse r

isk even

ts is a

n esse

ntial ﬁr

st st

ep in mana

ging th

sks of a

ny busine

ss or a

ctivt

y an

d in orde

r to facilt

ate th

at,

the G

roup m

aintan

s a dyn

amic ri

-s

cannin

g proce

ss wit

inpu

ts f

rom th

e inter

nal and e

xter

nal ris

k enviro

nment

, as well

as p

otent

ial thr

eat

s and opp

ort

unite

s from t

he bus

ines

s and

client perspectives, enabling us

to proactively manage our

por

tfo

lio. The G

roup m

aintan

s a taxon

omy of the Pr

incpa

Risk T

es (PRT

), Int

egrate

d Risk T

es (IRT

) and ris

k sub-

ype

s that ar

e inher

ent to th

e strat

egy an

d busi

ness m

odel;

as wel

l as an eme

rging r

isks i

nventor

y t

hat inc

ludes n

ear

-t

erm

risks as well as longer

-term uncertaintes.

Despite the

challenges of

the ongoing pandemic,

our solid

foundation has helped us

to deliver a good performance

wit

h a resile

nt ris

k proﬁle. O

ur cor

porat

e por

tfoli

os rem

ain

predominantly short

tenor and div

s

ﬁed across industr

ctor

s, pro

duct

s and ge

ograp

hies. We have se

impr

ovement

s in a num

ber of o

ur met

ric

s that re

ﬂect ou

robust risk management during

pandemic. W

e remain

vigl

ant to th

e cont

inued i

mpact o

f CO

VID

19 and an u

neven

global recover

. W

e are par

ticularly clos

ely managing

exposures in ident

ﬁed vulnerable sectors includng

Aviaton,

Com

mercia

l Real Es

tate an

d Oil & Ga

The t

able b

elow high

lght

s the G

roup

’s overall ri

sk proﬁl

associated

with our

business strategy

e have a r

obus

t ris

k mana

geme

approach supported through our

wel

established

ERMF

•

Cros

s-cutt

ing ri

sks h

ave be

rep

osito

ned as I

s an

d are deﬁn

as r

isks t

hat are s

ignﬁcant in n

atur

and mat

erial

se primarly th

rough

the

rel

evant PRT

•

Given their integrated nat

ure, Dig

tal

set Ri

sk and Th

ird-Part

y Ri

sk, in

additon to

Climate Risk, have been

cate

gor

ised a

s IRT

s i

n the ERMF

•

The C

apita

l and Liqu

dit

y PRT has

en renam

ed to T

rea

sur

y Ris

k and

the s

cope o

f the ri

sk t

ype h

as be

exp

ande

d to cover Int

erest Rat

e Risk

in th

e bank

ing bo

•

Self

-assessment

s performed in our

foo

tpr

int mar

kets re

ﬂect th

e matu

ring

ERMF adoption

with emphasis on

ﬁr

-line own

ersh

ip of ri

sks

•

The m

ore mat

ure ﬁn

ancal ri

sks

continued to be

more effectively

managed on a r

elative basis

compared to non

-ﬁnancal

risks in

2021, an

d other a

spe

cts o

f the ERMF

are es

tabli

shed an

d oper

ating t

o a

more consistent standard

•

The G

roup a

ims to f

urt

her st

rengt

hen

s risk m

anag

ement p

ractic

es in 2022

through further im

prov

ng on the

management of non-

ﬁnancal risks

withn

s bus

inesses, functions and

acro

ss th

e foot

, as well a

management of risks which a

integrated in nature

Fur

the

r det

ail

s on th

e ERMF ca

n be fo

und i

Risk management

appro

ach

ction

page 258

r port

fol

ios exhi

bt a re

sil

ent ri

proﬁle despite a

challenging

macroeconomic env

ironment

•

The p

ropo

rtio

n of the G

roup

’s gros

loans and ad

vances to customer

in sta

ge 1 and 2 h

as improve

d to

92 pe

r cent an

d 6 per cen

t respe

ctive

(from 89 p

er cent a

nd 8 per ce

respect

ively

in 20

)

•

xposure to i

nvestment grade clients

has i

ncrea

sed to 69 p

er cent (2020:

62 per cen

) reﬂ

ectin

g an incre

ase in

repurcha

se agreement bal

ances and

high-qualit

y orignations

•

The

re has b

een a 49 per ce

dec

reas

e to $5.

5 billon (

20:

$10.

7 billon

) in e

arl

y alert

s ex

posur

main

ly due t

o redu

ction

s in

counterpart

y exposure and clients

bei

ng remove

d from e

arly a

lert

•

The total

credit impa

ment

charge

signﬁc

antly r

educe

d to $0.

3 billon

(2020: $2.

3 billon

), wit

h decre

ase

en acros

s all thr

ee sta

ges

•

Sta

ge 3 gros

s loan

s decre

ase

d to

1 bil

lon (2020: $9

2 billon)

, wi

the ove

rall cont

ribu

ton to t

he tot

rem

ainng un

chang

ed at 3 pe

r cent

The ove

rall sta

ge 3 cover rat

rem

ained s

table at 5

8 per ce

(2020: 58 per c

ent

)

•

The majorty of our Consumer

Pri

vate & Bus

ines

s Bank

ing pro

duct

cont

inue to b

e fu

lly se

cured l

oans

(

able at 8

6 per cen

t of the p

ort

folio

e overall a

verag

e loan-t

o-valu

of th

e mor

tgage p

ort

folio i

s low at

1 per cent

Our capital and liqudity positons

con

tin

ue to be a

t heal

thy levels

•

e rem

ain well ca

pitals

ed and o

balance she

et remains highly liqud

•

The G

roup l

iqudit

y cover

age rat

io has

rem

ained s

table at 1

43 per ce

•

e con

tinue t

o have a st

rong

advances

-to-deposit

s ratio

•

Our customer deposit base is

dive

rsﬁed by t

pe and m

atur

•

r Comm

on Equit

y T

ier 1 rat

io is

14.1 per cen

t (202

0: 1

4.4 per ce

Further deta

ils, includng

explanation

of pro f

orm

a change

s as at 1 Jan

uar

2022

, can be fo

und in t

he Capi

tal

Review s

ectio

n on pag

e 288

200

Standard Chartered

– An

nual Re

por

t 2021

sk r

evi

Risk proﬁle

Credit

Risk (

audited)

Basis of preparation

Unless otherwise stated the bala

nce sheet and i

ncome

statement informaton presented withn this

ection is

ased

on th

e Grou

’

s m

anage

ment v

iew

. T

his is pr

incpal

ly the

location from which a client relationshp is managed, which

y diff

er from w

here i

t is ﬁnanca

lly bo

oked and m

ay be

sha

red be

twe

en bus

ines

ses and/

or re

gions

. This v

iew reﬂe

cts

how th

e client s

egme

nts a

nd regi

ons are m

anage

d inte

rnall

Loan

s and adva

nces to cu

stom

ers an

d bank

s hel

d at

amo

rtis

ed cos

t in this Ri

sk proﬁl

e secti

on incl

ude rever

repurchase

agreement bal

ances

held at amortised

cost, as

per N

ote 14 Rever

se rep

urcha

se and r

epurch

ase ag

reem

ent

includ

ng other sim

lar secured lendi

ng and borrowing.

edit Ri

sk over

view

Cre

dit Risk i

s the po

tenti

al for lo

ss due t

o the fai

lure of a

counterpart

y to meet i

s contractual

obligatons to pay the

Gro

up. Cre

dit exp

osure

s aris

e from b

oth th

e bank

ing and

trading bo

oks.

Impairment mode

IFRS 9 requires an imparment model that requires the

reco

gnito

n of exp

ecte

d credit l

osse

s (ECL

) o

n all ﬁnan

cal

deb

t instr

ume

nts h

eld at am

ort

ised co

st, f

air value t

hroug

other comprehensive income (

OCI),

drawn loan

commitme

nts and ﬁnancal guarante

es.

Staging of

ﬁnancal instruments

Financal instrum

ents tha

t are

not alread

y credit

imp

ared are

ignate

d into st

age 1 and a 1

-mon

th exp

ected c

redit l

oss

provison

is recognised.

Ins

tru

ment

s will re

main in st

age 1 un

til they a

re repa

id, unle

they e

xper

ience s

ignﬁcant cr

edit de

teri

orato

n (

stag

e 2

) o

they

become cred

impared

(

stage 3

)

Ins

tru

ment

s will t

ransf

er to sta

ge 2 and a lif

etme e

xpect

cre

dit los

s provis

on reco

gnise

d when t

here h

as bee

n a

signﬁc

ant chan

ge in the c

redit r

isk com

pare

d to what wa

expecte

d at

ignation.

The f

ramewo

rk us

ed to det

ermi

ne a signﬁca

nt incre

ase in

cre

dit ris

k is set o

ut bel

IFRS 9 ex

pect

ed cr

edi

t los

s princ

ple

s and ap

pro

ache

The m

ain met

hodo

log

y princp

les and a

pproa

ch adop

ted by th

e Gro

up are set o

ut in th

e follow

ing tab

le.

Title

Descripton

Supplem

entary informaton

Approach to

determinng

expecte

d credit

losses

For m

ater

ial lo

an por

tfo

lios

, the G

roup h

as ado

pted a s

tati

stcal

dellin

g appr

oach f

or det

ermi

nng exp

ect

ed cre

dit los

ses t

hat ma

kes

ext

ensi

ve use of c

redit m

ode

lling

. Thes

e mod

els leve

rage

d exis

tng

vanced i

nter

nal rat

ing

s base

d (IRB) mode

ls, w

here t

hese w

ere

available

. Where model performance breaches

model monitorng

thr

esho

lds or va

lidat

on sta

ndard

s, a p

ost mo

del ad

just

ment m

ay be

req

uire

d to cor

rect fo

r iden

tﬁed m

odel i

ssu

es, w

hich wi

ll be rem

oved

once those

sues

have been remedied.

IFRS 9 m

eth

odol

ogy

Deter

minng lifetme expecte

cre

dit los

s for r

evolvi

ng pro

duct

Post model adjustments

233

235

Incorporation of

for

ward-l

ookin

informaton

The determinat

on of expected cr

t loss i

ncludes various assumptions

and judgements in

respe

of for

ward

-looking macroeconomic

informaton. R

efer to pages 235 to 239

for incorporation

of for

ward

looking informaton,

forecast of ke

y macroeconomic varia

bles

und

erl

ying t

he exp

ect

ed cre

dit los

s calcu

lati

on and t

he imp

act on

non

-line

art

y and s

ensi

tvi

ty o

f exp

ecte

d credi

t los

s calcul

atio

n to

mac

roec

onom

ic vari

ables

. Man

agem

ent over

lay

s may al

so be u

sed

to cap

tur

e risk

s not i

dent

ﬁed in th

e mod

els

Incorporation of

for

ward-l

ooking

informaton a

impact of

non-linear

ty

Forecast of

key macroeconomi

variables

underlying the expected

credit los

s calculation

Management ov

erlay and

sensitvit

to macroeconomic

variables

235

236

239

Signﬁcant

increas

in credit

risk (

SICR

)

xpe

cted c

redit l

oss f

or ﬁnan

cal as

set

s will t

rans

fer f

rom a 12

-m

ont

sis (

tage 1) t

o a lifet

me ba

sis (

tage 2) wh

en the

re is a sig

nﬁcant

inc

reas

e in cre

dit ris

k (SICR) relat

ive to th

at whi

ch was ex

pect

ed at

e time o

f orign

atio

n, or w

hen th

e ass

et be

come

s credi

-impar

ed.

On t

ransf

er to a lif

etm

e basi

s, th

e exp

ecte

d credi

t loss f

or th

ose as

set

wil

l reﬂec

t the imp

act of a d

efau

lt event ex

pec

ted to o

ccur ove

r the

rem

ainng l

ifet

me of th

e inst

rum

ent ra

ther t

han jus

t over th

e 12 mont

om the r

epor

tin

g date.

SICR i

s ass

ess

ed by com

par

ing th

e risk o

f defa

ult of an e

xpo

sure at t

reporting date with

isk

of default at orig

nation (

after considerng

e pas

sage o

f time

). ‘S

ignﬁcan

t’ d

oes n

ot mea

n stat

istca

lly si

gnﬁcant

nor i

s it reﬂe

ctive o

f the ex

tent o

f the im

pact o

n the G

roup

’s ﬁnan

cal

sta

teme

nts

. Whe

ther a c

hang

e in the r

isk of d

efau

lt is sig

nﬁcant o

r not

is assessed using

quantitatve and

qualitatve

critera, the we

ight of

whi

ch will d

epen

d on th

e ty

pe of p

rodu

ct and co

unte

rpar

Quantit

atve critera

Signﬁcant increase in credit risk

thresholds

Specifc qualitat

ve a

quantitat

ve

itera per segment

Corp

orate, Commercial &

Institutonal Banking clients

Consumer Banking clients

Pri

vate B

ankin

g clien

Debt securites

242

243

Sta

ge 1

•

-m

onth ECL

•

Performing

Sta

ge 2

•

Lifetme

exp

ected

credit loss

•

Perf

ormin

g but ha

s exhib

ted

signﬁcant increase in credit r

isk

Sta

ge 3

•

Credit

-impared

•

Non-performing

201

Standard Chartered

– Ann

ual Rep

ort 202

sk rev

iew and C

api

tal r

eview

Title

Descripton

Supplem

entary informaton

Asses

sment of

credit

-impared

ﬁnanc

al asset

Cre

dit

-imp

ared (

sta

ge 3) ﬁnanca

l ass

ets c

ompr

ise t

hose a

sse

ts t

hat

ve expe

rien

ced an o

bser

d cred

it event an

d are in de

faul

t. De

faul

rep

rese

nts t

hos

e ass

ets t

hat ar

e at lea

st 90 da

ys pa

st due in r

esp

ect of

incpa

l and int

eres

t pay

ment

s and/

or w

here t

he as

set

s are ot

her

ise

considered unli

kely to pay

. This de

ﬁntion is c

sistent

with internal

Credit R

isk management and the

regulator

y de

ﬁntion of defaul

Unlik

ely to pay factors include ob

jectve condit

ons such as

bankr

uptcy

deb

t rest

ruc

tur

ing, f

raud o

r deat

h. It al

so inc

lude

s cred

-rela

ted

dif

cati

ons of c

ontra

ctua

l cashﬂ

ows due t

o signﬁc

ant ﬁnan

cal

dif

cult

y (for

bear

ance

) w

here t

he Gro

up ha

s grant

ed con

cess

ions

at it woul

d not or

dinar

ly co

nside

Int

eres

t incom

e for st

age 3 as

set

s is re

cogn

ised by a

pply

ing th

e ori

gnal

fect

ive int

eres

t rate to t

he ne

t ass

et amo

unt (

hat is

, net o

f cred

imp

arme

nt prov

ison

)

. W

hen ﬁn

ancal a

sse

ts ar

e tran

sfer

red f

rom

sta

ge 3 to st

age 2

, any cont

ractu

al inte

rest r

ecover

ed in exce

ss of th

int

erest i

ncom

e reco

gnise

d whil

e the a

sse

t was in st

age 3 is re

por

ted

wit

hn the c

redi

t impar

men

t line.

Consumer Banking clients

Corp

orate, Commercial &

Institu

tonal Banking and

Pri

vate B

ankin

g clien

243

nsfers

bet

ween

stages

set

s wil

l tran

sfer f

rom st

age 3 to s

tage 2 w

hen t

hey are no l

onge

con

side

red to b

e cred

-impar

ed. A

sse

ts w

ill not b

e cons

ider

cre

dit

-imp

ared o

nly if t

he cust

omer m

akes pa

yme

nts s

uch th

at th

are p

aid to cu

rren

t in line w

ith th

e ori

gnal co

ntrac

tual t

erm

set

s ma

y tran

sfer t

o stag

e 1 if they ar

e no lon

ger co

nsid

ered t

o have

exp

eri

ence

d a signﬁca

nt incr

eas

e in cred

it ris

k. Th

is will b

e imme

date

en the o

rign

al PD bas

ed tr

ansfe

r crit

era a

re no lon

ger m

et (

and as

lon

g as non

e of th

e othe

r tran

sfer c

rite

ra app

). Wher

e ass

s were

tra

nsfe

rre

d using o

the

r meas

ures

, the a

sse

ts w

ill onl

y tran

sfer b

ack

to st

age 1 w

hen th

e condi

ton th

at cau

sed t

he signﬁ

cant inc

reas

e in

cre

dit ri

sk no lo

nger ap

plie

s (

and as l

ong as n

one of t

he ot

her tr

ansfe

critera appl

)

Movem

ent in l

oan ex

posu

res an

expecte

d credit losses

211

Modif

ed

ﬁnanc

al asset

Whe

re the c

ontr

actu

al ter

ms of a ﬁn

ancal in

str

ume

nt have

en mod

ed, an

d this d

oes n

ot res

ult in th

e inst

rum

ent b

eing

der

ecog

nise

d, a mod

catio

n gain o

r loss i

s reco

gnis

ed in th

e incom

statement representing the d

ference between the orignal

cashﬂows

and t

he mo

dif

ed ca

shﬂows

, dis

count

ed at t

he ef

fect

ive int

erest r

ate.

The m

odif

ca

tion g

ain/los

s is dire

ctl

y applie

d to th

e gros

s carr

ing

amount o

f the

instrument.

If th

e modi

fc

atio

n is cre

dit rel

ated

, such a

s forb

eara

nce or w

here t

oup ha

s grant

ed con

cess

ions t

hat it wo

uld no

t ordin

arl

y cons

ider,

en it wil

l be con

sider

ed cre

dit

-imp

ared

. Modi

fc

ation

s tha

t are not

cre

dit rel

ated w

ill be s

ubje

ct to an as

ses

sme

nt of wh

ethe

r the a

sset

’s

cre

dit ri

sk has i

ncre

ased s

ignﬁca

ntly s

ince or

igna

tion by co

mpar

ing

e remai

nng lif

etme PD b

ase

d on th

e modif

e

d ter

ms wit

h the

rem

ainng l

ifet

me PD bas

ed on t

he or

ignal co

ntra

ctua

l term

VID-

19 relief measures

Forbearance

and other

modifed loa

219

Governance

and

applicat

on of

exper

t credit

judgement in

respect

expecte

d credit

losses

The m

ode

ls use

d in det

erm

inng ECL ar

e revie

wed and a

pproved by t

oup Cre

dit Mo

del A

sse

ssm

ent Co

mmit

tee an

d have b

een vali

date

by Gr

oup mo

del vali

dato

n, whi

ch is in

depe

nden

t of the b

usin

ess

A qua

rte

rly m

odel m

onit

orng p

roce

ss is in p

lace t

hat us

es rec

ent dat

to co

mpare t

he dif

fer

ence

s bet

wee

n mode

l pred

icto

ns and a

ctual

out

come

s agai

nst app

roved th

resh

old

s. Whe

re a mod

el’s pe

rfor

man

breaches the

monitorng thresholds

hen

an assessment of whether

an ECL ad

just

ment i

s requ

ired t

o corr

ect for t

he ide

ntﬁe

d mode

l iss

is completed.

The d

eter

min

aton o

f expe

cted c

redit l

oss

es req

uire

s a signﬁca

degree of managemen

t judgement

which had

an impact on

gover

nan

ce proc

ess

es, w

ith th

e outp

ut of t

he exp

ecte

d cred

models assessed b

y the IFRS

9 Impairment

ommi

ttee.

oup Cre

dit Mo

del A

sse

ssm

ent

Committ

IFRS 9 I

mpai

rmen

t Comm

itte

202

Standard Chartered

– Annu

al Repo

rt 2021

sk r

evi

Risk proﬁle

Maximu

m e

xpos

ure to Cre

dit Risk (

audit

ed)

The t

able b

elow pre

sent

s the G

roup

’

s m

axim

um exp

osure t

o Credit R

isk for i

ts on-b

alanc

e shee

t and of

-bala

nce she

et ﬁnan

cal

ins

tru

ment

s as at 31 D

ecemb

er 2021, b

efore an

d afte

r takin

g into ac

count any co

llate

ral held o

r othe

r Credit R

isk mit

gatio

The G

roup’

s on-b

alance s

heet m

axim

um expo

sure t

o Credit Ri

sk incr

ease

d by $36 b

illon to $796 bi

llon (2020: $7

60 billo

)

. C

ash

and b

alance

s at Cen

tral ban

ks in

creas

ed by $6 bi

llon and l

oans an

d advanc

es to cus

tomer

s grew by $1

7 billon. O

f the $

17 billon

incr

ease

, $6 billo

n was in Cor

por

ate, Co

mmerci

al and Ins

titu

tonal B

anki

ng. Co

nsum

, Pr

ivate an

d Busin

ess B

ankin

g incre

ased

by $7

.4 b

illon lar

gely in M

ort

gage an

d Secu

red weal

th pro

duct

s, and C

entr

al and ot

her ite

ms incr

ease

d by $3 billo

n. The

re was

an inc

reas

e of $21 billo

n in fair valu

e thro

ugh proﬁt a

nd los

s instr

ume

nts a

nd an incr

ease o

f $10 bil

lon in invest

ment s

ecur

ites

deb

t, of

et by a $17 bill

on decr

ease i

n deri

vatve ex

posur

es.

2021

2020

Maximum

exposure

$millon

Credit R

isk management

Net

exposure

$millon

Maximum

exposure

$millo

Credit Ris

k management

Net

exposure

$millo

Collateral

$millon

Master

netting

agreements

$millon

Collateral

$millo

Master

netting

agreements

$millo

On-balance

sheet

sh and b

alanc

es at cen

tral b

anks

72,6

,663

6,712

,712

Loan

s and ad

vance

s to ban

44,

383

,079

3,304

,34

247

of w

hich – reve

rse r

epur

chas

agreements and other simla

secured lending

1,079

–

247

–

Loan

s and ad

vance

s to cust

ome

298,468

31,

397

,071

281,6

123,

516

,18

of w

hich – reve

rse r

epur

chas

agreements and other simla

secured lending

–

Inves

tmen

t secu

rit

es – deb

t secu

rite

and o

ther e

ligbl

e bills

2,700

152,

152,86

Fair va

lue th

rough p

roﬁt or l

oss

3, 7

123,234

80,0

–

43,2

102

259

63,405

–

38,85

Loan

s and ad

vance

s to ban

847

,87

877

Loan

s and ad

vance

s to cust

ome

,377

Rev

se repurchase

agreem

ents and

other simlar

lending

80,0

80,00

–

63,405

63,40

–

Inves

tmen

t secu

rit

es – deb

t secu

rite

and o

ther e

ligbl

e bills

25,600

25,

600

Der

ivat

ve ﬁnan

cal ins

tru

ment

, 7

8,0

851

,13

12,

Accrued inco

1,775

set

s he

ld for s

ale

Other assets

40,0

0,06

ota

l balance sheet

5,687

220

,577

535,608

198,304

514,7

Off-balance

sheet

Undrawn commit

ments

158,

3,848

675

,403

,432

Fina

ncal guara

nte

and

other equivalents

58,535

240

6,295

3,8

2,252

51,

580

ota

l off

-balance sheet

6,088

–

210,

6,684

–

0,551

ota

226,

665

,416

715,

331

et of c

red

it imp

arm

ent

. An an

aly

sis o

f cre

dit qu

alit

y i

s set o

ut in t

he cre

dit q

uali

ty a

nal

ysi

s sec

tion (

pag

e 205). Fur

er det

ail

s of col

lat

eral h

eld by c

lie

nt se

gmen

d stag

e are s

et ou

t in th

e coll

ate

ral an

aly

sis se

cti

on (p

age 2

)

xclu

des e

qui

ty a

nd ot

her i

nvest

men

ts o

f $737 m

ill

on (31 D

ece

mbe

r 2020: $45

4 mi

llon). Furt

her d

eta

ils ar

e set o

ut in N

ote 13 Fi

nan

cal in

str

ent

xcl

ude

s equ

y and ot

her i

nves

tme

nts o

f $5,

861 mil

lon (

31 De

cemb

er 2020: $

528 mi

llon). Furt

her d

eta

ils ar

e set o

ut in N

ote 13 Fi

nan

cal in

str

ent

The G

roup e

nte

rs in

to ma

ste

r net

tin

g agre

eme

s, wh

ich in t

he eve

nt of d

efa

ult re

sul

t in a sin

gle am

oun

t owed b

y or to t

he cou

nte

art

y th

rou

gh net

tin

g the s

of the positv

e and negative ma

-to-market values

of applicable

der

ivatv

e transactions

her a

sse

ts i

ncl

ude H

ong Kon

g cer

tif

ca

tes o

f ind

ebt

edn

ess

, cas

h coll

ate

ral, a

nd acc

ept

ance

s, in a

ddi

ton t

o uns

ett

led t

rad

es an

d oth

er ﬁna

nca

l ass

Exc

lud

es ECL a

llowa

nce

s whic

h are re

por

d und

er Prov

is

ons f

or lia

blit

es a

nd cha

rge

oll

ater

al cap

ped a

t max

imu

m exp

osu

re (

ove

col

late

rali

Adjus

ted f

or ove

coll

ate

rali

sat

on, w

hic

h has b

een d

ete

rmin

ed w

ith re

fer

enc

e to th

e draw

n and u

ndra

wn co

mpo

nen

t as th

is be

st reﬂ

ect

s th

e eff

ect o

n the

ount a

ris

ng f

rom ex

cted c

red

it los

s. Lo

ans an

d adv

ance

s to cu

stom

s coll

ate

ral no

w re-p

res

ente

d be

een o

n and of

f -ba

lan

ce she

et a

s it als

includes

guarantees

203

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Analy

s o

f ﬁnancal instrument b

y stage (

audi

)

Thi

s table s

hows ﬁnan

cal ins

trum

ent

s and of

-bal

ance sh

eet com

mitme

nts by s

tage, al

ong wi

th the t

otal cre

dit imp

arme

loss provis

on against

each class of ﬁ

nancal

instr

ument.

The p

ropo

rtio

n of ﬁnanc

al inst

rum

ent

s held w

ithn sta

ge 1 impr

oved by 1 per ce

nt to 9

.8 pe

r cent (2020: 93.8 p

er cen

). T

sta

ge 1 bala

nces in

creas

ed by $

7 bil

lon, of w

hich aro

und $2

3 billon wa

s in loan

s and adva

nces to cu

stom

ers

. Of the $2

3 billo

incr

ease i

n loans t

o custo

mer

s, $11 bi

llon was in C

orp

orate, C

omme

rcial and I

nstit

uton

al Bank

ing an

d $8 billo

n was in

Con

sume

, Pri

vate and B

usin

ess B

ankin

g acros

s Mor

tgage a

nd Sec

ured we

alth pro

duct

s. O

-b

alance s

heet ex

posu

res

incr

ease

d by $11.

3 billo

n due to an i

ncrea

se of $5

.8 billo

n in undra

wn com

mitme

nts a

nd a $5.4 bi

llon incr

ease i

n ﬁnancal

gua

rante

es, tr

ade cre

dit

s and irr

evocable l

ette

r of cred

it.

Sta

ge 2 ﬁnan

cal inst

rum

ent

s redu

ced to $

34.

6 billon (2020: $39

9 b

illon

) du

e to exp

osure c

hange

s and par

tly d

ue to tr

ansfe

rs to

sta

ge 1 in Cor

por

ate, Co

mmerci

al and Ins

titu

tonal B

anki

ng as ear

ly ale

rt ba

lances r

educ

ed. A

s a result

, the p

ropo

rtio

n of loan

and a

dvance

s to custo

mer

s clas

sif

ed in s

tage 2 al

so red

uced to $

16.8 b

illon or 6 p

er cent (2020: $2

2.6 bi

llon or 8 pe

r cent)

Sta

ge 3 ﬁnan

cal inst

rum

ent

s were sta

ble at 1 pe

r cent of t

he Gro

up tot

al.

2021

age 1

tag

e 2

tag

e 3

Gross

balance

$millon

otal

credit

imparment

$millon

Net

carrying

val

$millon

Gross

balance

$millon

otal

credit

imparment

$millon

Net

carrying

val

$millon

Gross

balance

$millon

otal

credit

imparment

$millon

Net

carrying

val

$millon

Gross

balance

$millon

otal

credit

imparment

$millon

Net

carrying

val

$millon

Cash a

balances at

central bank

,601

–

72,

601

)

–

)

72,6

Loans and

advances

to b

anks

(

amortised

580

(4)

,41

(27

)

4,383

Loans and

vances t

customers

(

amortised

)

278,7

849

(

325

8,0

)

3,438

304

298,468

Debt securites

and other

eligble bills

(67

)

,315

)

113

)

162

780

(175

)

Amortised cost

41,

092

,079

(

199

41,325

116,

260

(

,11

)

–

121

,37

(95)

–

Accrued inco

(

amortised

–

Asset

s held

for s

ale

–

Other assets

067

–

0,0

–

(

0,071

(

0,06

Undrawn

commitments

)

–

158,523

(102)

Financal

guarantees,

trade credit

and i

rrevoc

able

letter

s of credit

,92

(15)

799

(

207

)

58,535

(

799

153

)

,834

)

ros

s car

yin

g amo

unt fo

r of

-b

alan

ce sh

eet r

efe

rs to n

oti

ona

l valu

ese i

nst

men

ts ar

e hel

d at fai

r valu

e on th

e bal

ance s

hee

t. T

he ECL p

rovi

son i

n resp

ect o

f deb

t sec

uri

tes m

sure

d at F

VOCI is h

eld w

ith

n the O

CI re

ser

hes

e are of

bal

ance s

hee

t ins

tru

men

. Onl

y the E

CL is re

cor

ded o

n-ba

lanc

e she

et as a ﬁ

nanc

al li

abli

ty a

nd th

ere

fore t

her

e is no “n

et car

yin

g amo

unt

”

ECL a

llowa

nces o

n of

-b

alan

ce sh

eet i

nst

rum

ent

s ar

e held a

s lia

blit

y p

rovi

son

s to th

e ext

ent th

at th

e dra

wn an

d undr

awn c

omp

one

s of lo

an exp

osu

res c

be s

epa

rate

ly id

ent

ﬁed

. Oth

se th

ey wil

l be re

por

ted a

gai

nst t

he dra

wn co

mpo

nen

Stag

e 1 ECL is n

ot ma

ter

ial

age 3 gr

oss i

ncl

ude

s $33 m

illo

n or

igna

ted c

red

-im

pa

red de

bt se

cur

it

204

Standard Chartered

– Ann

ual Re

por

t 2021

sk r

evi

Risk proﬁle

2020

Stage 1

Stage 2

Stage

otal

Gross

balance

$millo

otal credit

imparment

$millo

Net

carr

ying

value

$millo

Gross

balance

$millo

otal credit

imparment

$millo

Net

carr

ying

value

$millo

Gross

balance

$millo

otal credit

imparment

$millo

Net

carr

ying

value

$millo

Gross

balance

$millo

otal credit

imparment

$millo

Net

carr

ying

value

$millo

Cash a

balances at

central bank

–

(4)

–

,716

)

6,7

Loans and

advances

to b

anks

(

amortised

4,0

(

4,0

(

346

–

44,3

(17

)

44,34

Loans and

vances t

customers

(

amortised

256,43

(

)

873

312

)

281,6

Debt securites

and other

eligble bills

(

506

114

(

Amortised cost

(15

)

195

(2)

193

114

(

,555

(

75)

130,070

)

,311

(

24)

–

133

)

Accrued inco

(

amortised

1,775

–

1,7

–

775

–

775

Asset

s held

for s

ale

–

Other assets

,97

(1)

–

(

(4)

Undrawn

commitments

,70

(39)

(

78)

–

3,4

(117

)

Financal

guarantees,

trade credit

and i

rrevoc

able

letter

s of credit

573

(

53,

832

(

ota

752

)

10,

104

(5,

596)

802

(

)

ros

s car

yin

g amo

unt fo

r of

-b

alan

ce sh

eet r

efe

rs to n

oti

ona

l valu

ese i

nst

men

ts ar

e hel

d at fai

r valu

e on th

e bal

ance s

hee

t. T

he ECL p

rovi

son i

n resp

ect o

f deb

t sec

uri

tes m

sure

d at F

VOCI is h

eld w

ith

n the O

CI re

ser

hes

e are of

bal

ance s

hee

t ins

tru

men

. Onl

y the E

CL is re

cor

ded o

n-ba

lanc

e she

et as a ﬁ

nanc

al li

abli

ty a

nd th

ere

fore t

her

e is no “n

et car

yin

g amo

unt

”

ECL a

llowa

nces o

n of

-b

alan

ce sh

eet i

nst

rum

ent

s ar

e held a

s lia

blit

y p

rovi

son

s to th

e ext

ent th

at th

e dra

wn an

d undr

awn c

omp

one

s of lo

an exp

osu

res c

be s

epa

rate

ly id

ent

ﬁed

. Oth

se th

ey wil

l be re

por

ted a

gai

nst t

he dra

wn co

mpo

nen

Stag

e 1 ECL is n

ot ma

ter

ial

age 3 gr

oss i

ncl

ude

s $38 m

ill

on or

ign

ate

d cred

-i

mpa

red d

ebt s

ecur

it

205

Standard Chartered

– Ann

ual Rep

ort 202

sk rev

iew and C

api

tal r

eview

Cre

dit qualit

y analysis (

audit

ed)

edit q

ualit

y by clie

nt se

gmen

For t

he Cor

porat

e, Com

mercial a

nd Inst

itut

onal B

ankin

g por

tfoli

o, expo

sures ar

e analy

sed by cre

dit gra

de (

CG)

, whi

ch pla

a cent

ral rol

e in the qu

alit

y as

sess

ment an

d monit

orng o

f risk

. All lo

ans are a

ssig

ned a CG, w

hich is r

eviewed p

erio

dcally a

ame

nded in l

ight of ch

anges i

n the bo

rrower

’

s ci

rcums

tances o

r beha

vio

. CG

s 1 to 12 are as

sign

ed to sta

ge 1 and st

age 2

(per

for

ming) cli

ent

s or accou

nts

, whil

e CGs 13 and 1

4 are ass

igned t

o stag

e 3 (

defaul

ted) cli

ent

s. Th

e mappin

g of cred

it quali

is as f

ollows

Map

ping of c

redi

t qualit

The G

roup u

ses th

e follow

ing int

erna

l risk m

apping t

o dete

rmine t

he cre

dit qual

y for loa

ns.

Credit quality

descripton

Corporate, Commercial &

stitutonal Banking

Private Banking

Consumer &

Business Banking

Internal grade mapping

P exte

rna

l rat

ing

equivalent

Reg

ula

tor

y PD r

ang

e (%)

Internal ratings

umb

er of d

ays p

ast d

Strong

A to 5B

A to BB+

0 to 0.42

ass I an

d Clas

s IV

Cur

rent l

oans (no pas

dues nor

impared

)

Satisfactor

6A to 11C

B to B-/

CCC

0.426 to 15

.75

lass I

I and Cl

ass II

Loan

s pas

t due ti

29 da

Higher risk

Grade 12

CCC/C

5.751

to 99

999

GSAM managed

Pas

t due lo

ans

30 da

ys an

d over

till 9

0 day

or Pr

ivat

e Ban

kin

g, cla

es of r

isk r

epre

sen

t the t

pe of c

olla

ter

al hel

d. Cl

ass I r

epre

sen

ts f

acil

tie

s wit

h liqu

d col

lat

eral

, such a

s cas

h and m

arke

tab

le se

cur

ite

Cla

ss I

I repr

ese

s uns

ecu

red/par

tial

ly se

cur

ed fa

cilt

ies a

nd th

ose w

ith il

lqu

id col

lat

eral

, suc

h as eq

uit

y in pr

iva

te en

ter

pri

ses

. Cla

ss II

I repr

ese

s faci

lti

es wi

side

nt

al or co

mme

rcial r

eal e

sta

te col

lat

eral

. Cla

ss IV co

vers m

arg

in tra

din

g faci

lti

Rat

ing fo

r Cor

rate/N

BFI

s. Ba

nks

’ rati

ng: BB t

o CCC/C

The t

able over

leaf s

ets o

ut the g

ross l

oans an

d advanc

hel

d at amor

tis

ed cost

, exp

ecte

d credit l

oss pr

ovison

s and

exp

ecte

d credit l

oss cover

age by bus

ines

s segm

ent and s

tage.

Expected cred

it loss c

overag

e represen

s the

expected c

redit

los

s repo

rte

d for ea

ch segm

ent and s

tage a

s a propo

rtio

n of

the g

ross lo

an bal

ance for e

ach se

gment a

nd stag

age 1:

Sta

ge 1 gros

s loan

s and ad

vances to c

ustom

ers in

crea

sed by

3 billon com

pare

d with 31 D

ecem

ber 2020 and repr

esen

t an

incr

ease o

f 3 per cen

t. St

age 1 gro

ss bal

ances re

pres

ent 92 pe

cent o

f loan

s and adva

nces to cu

stom

ers (2020: 89 per c

ent

The s

tage 1 cove

rage rat

io rema

ined at 0.

2 per ce

nt comp

ared

wit

h 31 Dece

mber 2020.

In Co

rpor

ate, Co

mmerc

ial and In

stit

utona

l Bank

ing, t

prop

ort

ion of st

age 1 lo

ans ha

s incre

ased t

o 85 per ce

nt (2020:

80 p

er cent)

, an

d the pe

rcent

age of st

age 1 lo

ans rat

ed as

str

ong is hig

her at 6

4 per ce

nt (2020: 58 per ce

) a

s the G

roup

continues to foc

us on the orig

nation of

investment grade

len

ding. S

tage 1 lo

ans in

creas

ed by $11 bil

lon, pr

imarl

y in the

Government, Manufacturing and Consumer dura

bles sector

Con

sume

, Pri

vate and B

usin

ess B

ankin

g stage 1 l

oans

incr

ease

d by $8 billo

n prim

arly d

riven by n

ew lendin

g in

Mortgage and Secured wealth

product

s. The proportion

rate

d as st

rong rem

aine

d stabl

e at 96 per cent

Stage 2:

Sta

ge 2 gros

s loan

s and ad

vances to c

ustom

ers d

ecre

ased

by $6 bi

llon comp

ared w

ith 31 De

cemb

er 202

0, an

d the

prop

ort

ion of st

age 2 lo

ans als

o redu

ced to 5

.5 pe

r cent f

rom

9 p

er cent p

er cent d

ue to ch

anges i

n expos

ures an

d also

due t

o trans

fer

s to stag

e 1 in Cor

pora

te, Com

mercia

l and

Instit

utonal Bankin

Con

sume

, Pri

vate and B

usin

ess B

ankin

g stage 2 l

oans s

a dec

reas

e of $0.7 bill

on, mai

nly dri

ven by mor

tgag

e loan

movem

ent fr

om stag

e 2 to stag

e 1 due to f

ward-lo

okin

macroeconomic outlook improvement.

Sta

ge 2 loan

s to cus

tomer

s cla

ssif

ed a

s ‘Hig

her ri

’

dec

reas

ed by $0.

9 bil

lon, pr

imarl

y dri

ven by lower inﬂow

fro

m earl

y aler

t non-p

urely p

recau

tion

, of

et by outﬂow

to stage 3.

The ove

rall sta

ge 2 cover rat

io redu

ced fr

om 3.

3 per c

ent to

1 per cent.

age 3:

Sta

ge 3 gros

s loan

s and ad

vances to c

ustom

ers d

ecre

ased by

12 pe

r cent to $

1 billo

n compa

red wit

h 31 Dec

ember 2020

of $9

.2 b

illon. S

tage 3 p

roviso

ns dec

reas

ed by $0.7 billo

to $

4.7 bi

llon. Th

e stag

e 3 cover ratio (

excl

uding c

ollate

ral)

rem

ained s

table at 5

8 per ce

nt.

In Co

rpor

ate, Co

mmerc

ial and In

stit

utona

l Bank

ing, gro

sta

ge 3 loan

s decr

ease

d by $1.1 billon co

mpare

d with

31 De

cembe

r 20

20 due to d

ebt sa

les and re

pay

ment

s in A

sia

and A

fric

a and the M

iddle Eas

t regio

ns. Prov

ison

s decre

ase

by $0.7 bill

on to $3

9 billo

n also dr

iven by rep

aym

ent

s and

write-off

s. Corporate, Commercial

and Institutonal Banking

cover rat

io dec

reas

ed by 1 per ce

nt as a res

ult of w

rite

-off

and n

ew accoun

ts w

ith a lower cove

rage th

an exis

tng

sta

ge 3 loan

In Co

nsum

, Pr

ivate an

d Busin

ess B

ankin

g, sta

ge 3 loan

rem

ained s

table at 1 p

er cen

t of the p

ortf

olio wh

ile the c

over

rat

io improve

d by 4 per cent t

o 51 per cen

t (202

0: 47 per c

ent

)

due t

o a new prov

ison taken o

n a Busi

ness B

anki

ng clien

206

Standard Chartered

– Ann

ual Rep

t 2021

sk r

evi

Risk proﬁle

Loa

ns and a

dvance

s by clien

t seg

ment (audit

ed)

Amortised cost

2021

Banks

$millon

Customers

Undrawn

commitments

$millon

Financal

guarantees

$millon

Corporate,

Commercial &

Institu

tonal

Banking

$millon

Consumer,

Pri

vate &

Business

Banking

$millon

Central &

other items

$millon

Customer

$millon

Stage 1

2,368

34,

371

4,9

– Strong

,813

,333

,418

– Satisfactory

4,803

106

Stage 2

580

14,81

,92

110

– Strong

126

2,36

1,253

–

619

– Satisfactory

105

308

–

,488

235

1,546

– High

er ri

,272

360

110

553

Of w

hich (

tage 2):

– Les

s than 3

0 days p

ast d

–

308

–

385

–

– Mor

e than 3

0 day

s past d

–

360

–

Sta

ge 3, cr

edit

-im

pare

d ﬁnanc

al ass

520

,575

–

8,0

–

Gros

s balance

410

,70

137

,867

304,122

158,

58,

535

Stage 1

(12)

03)

70)

–

)

(15)

– Strong

(4)

83)

–

(

41)

(5)

– Satisfactory

(8)

)

(87

)

–

32)

(19)

(

10)

Stage 2

)

(

341)

(183)

–

)

– Strong

(2)

)

(

–

(

(6)

(1)

– Satisfactory

(2)

(179

)

(

32)

–

(211)

(9)

– High

er ri

–

)

–

(

147

)

(8)

(12)

Of w

hich (

tage 2):

– Les

s than 3

0 days p

ast d

–

(2)

(32)

–

(

–

– Mor

e than 3

0 day

s past d

–

(3)

)

–

(50)

–

Sta

ge 3, cr

edit

-im

pare

d ﬁnanc

al ass

(

11)

(

61)

(

96)

–

)

–

07)

otal credit imparment

(27

)

(

4,305)

(

349

)

–

(

(102)

(

Net carr

ying v

alue

44,

383

136,518

298,468

Stage 1

0.0%

0.1

0.0%

0.2%

0.0%

– Strong

0.0%

0.1

0.0%

.1%

0.0%

0.0

– Satisfactory

0.1%

0.1

1.8%

0.0%

0.1

Stage 2

0.7

0.0%

.1%

0.7

0.8%

– Strong

.3%

0.0

0.1

– Satisfactory

0.0%

.8%

.9%

– High

er ri

0.0%

3.1

0.0%

8.4%

.2%

Of w

hich (

tage 2):

– Les

s than 3

0 days p

ast d

0.0

0.0%

8.8%

0.0

– Mor

e than 3

0 day

s past d

0.0

.1%

0.0%

.2%

0.0

Sta

ge 3, cr

edit

-im

pare

d ﬁnanc

al ass

0.5%

0.0

0.0%

Cov

er ratio

0.1

3.0

1.0

0.0

.1%

Fair val

ue th

rou

gh pr

oﬁt or l

oss

Performing

,19

–

– Strong

0,1

53,756

1,7

595

–

– Satisfactory

15,600

–

602

–

– High

er ri

–

Defaulted (

CG1

–

)

–

s bala

nce (F

VTP

71,

235

–

t carr

ng value (

inc

l FV

TPL)

,95

8,795

136,585

24,323

–

oan

s and ad

vanc

es in

clu

des re

ver

se rep

urc

has

e agr

eem

ent

s and o

the

r sim

lar se

cur

ed le

ndin

g of $7

1 mill

on un

der C

usto

mer

s an

d of $1

,079 mill

on un

der

nks

, hel

d at am

ort

ise

d cos

ans an

d ad

vance

s inc

lud

es reve

e rep

urch

ase a

gre

eme

nts a

nd ot

her s

iml

ar se

cure

d len

din

g of $61,

282 mi

llo

n und

er Cus

tom

s and of $

,72

7 mill

on un

der

nks

, hel

d at fa

ir val

ue thr

oug

h proﬁ

t or lo

207

Standard Cha

tered

– Annu

al Repo

rt 2021

sk rev

iew and C

api

tal r

eview

Amortised cost

2020 (Rest

ate

Banks

$millo

Customers

Undrawn

commitments

$millo

Financal

Guarante

$millo

Corporate,

Commercial &

Institutonal

Banking

$millo

Consumer,

ivat

e &

Business

Banking

$millo

Central &

other items

$millo

Customer

otal

$millo

Stage 1

,015

0,9

9,1

256,4

703

– Strong

64,27

120,

892

8,8

204,0

122

,792

0,879

– Satisfactory

6,716

379

20,

Stage 2

20,00

,657

–

3,573

– Strong

2,756

,52

–

537

386

– Satisfactory

233

,10

665

–

,52

– High

er ri

470

–

613

639

Of w

hich (

tage 2):

– Les

s than 3

0 days p

ast d

–

202

663

–

– Mor

e than 3

0 day

s past d

–

628

–

Sta

ge 3, cr

edit

-im

pare

d ﬁnanc

al ass

–

562

–

Gros

s balance

44,3

0,513

288

,312

53,

403

Stage 1

(

)

(1)

(

39)

(

– Strong

(7)

(

–

(

(19)

– Satisfactory

(7)

)

(

(1)

(

20)

(7)

Stage 2

(

)

(25

–

(

– Strong

–

)

(

–

(

(3)

– Satisfactory

(

91)

)

–

(

)

(19)

– High

er ri

–

(

–

(

(31)

(

Of w

hich (

tage 2):

– Les

s than 3

0 days p

ast d

–

)

–

– Mor

e than 3

0 day

s past d

–

)

–

(

–

Sta

ge 3, cr

edit

-im

pare

d ﬁnanc

al ass

–

(

4,6

)

(

731)

–

(

)

–

(

94)

otal credit imparment

(17)

(

5,1

(

20)

(1)

(117

)

(

Net carr

ying v

alue

44,3

133,

457

281,6

Stage 1

0.0%

.1%

0.0

0.2

0.0%

0.0

– Strong

0.0%

0.1

0.0%

– Satisfactory

0.1

2.0

0.1

0.0

Stage 2

.4%

0.0

.0%

– Strong

0.0%

.5%

0.0

3.3%

0.1

0.8%

– Satisfactory

12.8%

0.0%

.4%

– High

er ri

0.0%

14.0%

0.0%

1.8%

Of w

hich (

tage 2):

– Les

s than 3

0 days p

ast d

0.0%

3.0

12.8%

0.0

10.

0.0%

– Mor

e than 3

0 day

s past d

.0%

.1%

13.

.0%

11.

0.0%

Sta

ge 3, cr

edit

-im

pare

d ﬁnanc

al ass

0.0%

0.2

46.

0.0%

.0%

0.0%

5.2%

Cov

er ratio

0.0%

3.7%

0.0%

.3%

.1%

Fair val

ue th

rou

gh pr

oﬁt or l

oss

Performing

,082

54,384

135

54,5

–

– Strong

133

–

– Satisfactory

24,

,78

–

– High

er ri

–

Defaulted (

CG1

)

–

s bala

nce (F

VTP

2,0

4,430

135

54,57

–

t carr

ng value (

inc

l FV

TPL)

429

187

887

–

oan

s and ad

vanc

es in

clu

des re

ver

se rep

urc

has

e agr

eem

ent

s and o

the

r sim

lar se

cur

ed le

ndin

g of $2

19 mi

llon u

nde

r Cus

tom

ers a

nd of $

7 m

ill

on und

nks

, hel

d at am

ort

ise

d cos

ans an

d ad

vance

s inc

lud

es reve

e rep

urch

ase a

gre

eme

nts a

nd ot

her s

iml

ar se

cure

d len

din

g of $45

,20

0 mil

lon u

nde

r Cust

ome

rs an

d of $1

205 mi

llo

n und

nks

, hel

d at fa

ir val

ue thr

oug

h proﬁ

t or lo

llow

ing t

he G

roup’s chan

ge in o

rgan

isa

ton

al st

ruc

tur

e, the

re ha

s be

en an in

teg

rat

on of C

orp

orat

e & Ins

tit

ut

onal B

ank

ing a

nd Co

mme

rcia

l Bank

ing t

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng; Pr

ivat

e Ban

kin

g and Ret

ail B

ank

ing t

o Con

sum

er, Priv

ate & Bu

sin

ess B

ank

ing

. Prio

r pe

rio

d has b

een r

est

ate

FY 2020 C

ons

umer, Pr

ivat

e & Bus

ine

ss Ba

nki

ng St

age 1 G

ros

s: St

rong r

est

ate

d fro

m $119,7

6 mil

lon t

o $120,

892 mi

llon a

nd Sa

tis

fac

tor

y re

sta

ted f

rom $

528 mi

llon

to $5

,402 m

ill

on. S

tag

e 1 ECL: S

tron

g res

tat

ed f

rom $3

07 mill

on to $

328 mi

llon a

nd Sa

tis

fact

y re

sta

ted f

rom $

131 mil

lon t

o $110 m

ill

208

Standard Chartered

– Annu

al Rep

ort 202

sk r

evi

Risk proﬁle

Loa

ns and a

dvance

s by clien

t seg

ment c

red

it qua

lity a

nalys

Credit

grade

Reg

ula

tor

y 1 yea

PD ra

nge (

)

P exte

rna

l rat

ing

equivalent

Corporate, Commercial &

stitutonal Banking

2021

Gross

Credit

imparment

age 1

ge 2

age 3

tag

e 1

ge 2

age 3

Strong

2,36

–

,19

(58)

–

(

A–2

–0.0

- and a

bove

4,01

216

–

14,

229

(

–

(

3A–

0.04

–

+ to A-

3,1

515

–

23,688

(

–

(3)

–5B

0.111

–0.

425

BBB+ to

BBB-

/BB+

40,640

1,635

–

275

(

–

(

Satisfactory

–

55,722

)

(

179)

–

(

A–7

–1

BB+

BB to BB-

894

–

(21)

)

–

(61

)

8A–9B

1–4.000

B-

B+ to B+

1,9

5,59

–

(

90)

–

03)

–11

4.001–

15.75

B to B-/

CCC

,62

694

–

,317

(49

)

–

)

Higher risk

–

272

–

272

–

(

00)

–

(

15.75

1–99

999

CCC/C

–

272

–

,272

–

00)

–

(

00)

Defaulted

–

520

–

(

61)

(

61)

–1

Defaulted

–

520

–

(

61)

22,368

14,818

,52

706

(

103)

(

341

)

(

61)

(

,305)

Credit grade

Regulatory 1 year

PD ra

nge (%)

S&P external ratings

equivalent

2020 (Rest

ate

d¹)

Gross

Credit imparment

Stage 1

Stage 2

Stage

otal

Stage 1

Stage 2

Stage 3

otal

Strong

64,27

756

–

,033

(

)

–

(

)

A–2

–0.0

- and a

bove

295

–

11,

–

(4)

–

)

3A–

0.04

–

+ to A-

16,753

815

–

(

(11)

–

(

13)

–5B

0.111

–0.

425

BBB+ to

BBB-

/BB+

453

1,6

–

,09

(

32)

(27

)

–

(59)

Satisfactory

,716

–

)

91)

–

(

A–7

–1

BB+

BB to BB-

396

–

34,

313

(

31)

(

)

–

05)

8A–9B

1 –4.000

/B+

to B+

235

–

(

–

(

–11

4.001–

15.75

B to B-/

CCC

523

–

(

–

(11

Higher risk

–

,14

–

(

–

(

15.75

1–99

999

CCC/C

–

,14

–

,14

–

(

–

Defaulted

–

(

4,610

)

(

4,610

)

–1

Defaulted

–

(

4,610

)

(

4,610

)

20,004

138

649

(95)

)

(

)

(

,19

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng. Pr

ior p

eri

od ha

s be

en re

stat

209

Standard Chartered

– Ann

ual Rep

ort 202

sk rev

iew and C

api

tal r

eview

Credit

grade

Consumer,

Private &

Busine

ss Banking

2021

Gross

Credit imparment

age 1

age 2

tag

e 3

tag

e 1

age 2

tag

e 3

Strong

1,253

–

130,8

83)

(

–

(

387)

Secured

112

167

884

–

3,0

)

(19)

–

)

Unsecur

–

(

235)

(85

)

–

(320

)

Satisfactory

4,803

–

5,111

(87)

(

32)

–

(

119)

Secured

4,524

164

–

4,688

)

(

–

)

Unsecur

279

–

)

(

31)

–

(

)

Higher risk

–

360

–

360

–

(47

)

–

)

Secured

–

(

11)

–

(11)

Unsecur

–

110

–

110

–

(

–

(

Defaulted

–

575

1,575

–

(

96)

(

96)

Secured

,10

(516

)

(516

)

Unsecur

–

468

–

80)

(

371

575

137

,867

(

70)

(183)

(

96)

(

349

)

Credit grade

2020 (Rest

ate

d¹)

Gross

Credit impa

rment

Stage 1

Stage 2

Stage 3

otal

Stage 1

Stage 2

Stage 3

otal

Strong

20,892

522

–

2,4

(

–

)

Secured

104,44

–

105

,791

(59)

(

–

Unsecur

16,4

–

623

(

269)

(

–

(

Satisfactory

402

665

–

067

(

)

–

(195)

Secured

,023

–

243

(11)

(

–

(

Unsecur

379

–

81)

Higher risk

–

470

–

470

–

)

–

)

Secured

–

316

–

316

–

(

12)

–

(

12)

Unsecur

–

154

–

154

–

(

–

(

Defaulted

–

562

–

(

731)

Secured

061

)

(41

)

Unsecur

–

501

–

13)

(

2,657

130,513

)

(

251)

31)

(

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Priv

ate B

ank

ing an

d Reta

il Ban

kin

g to Co

nsu

mer, Pr

ivat

e & Bus

ine

nki

ng. Pr

ior p

eri

od ha

s be

en res

tat

Y 2020 Co

nsu

mer, Pri

vate & B

usi

nes

s Ban

kin

g Sta

ge 1 G

ros

s: Str

ong Un

cure

d res

tat

ed fr

om $1

319 mi

llo

n to $16

46 m

illo

n and S

ati

sfa

ctor

y U

nse

cure

stat

ed f

rom $1

05 mi

llon t

o $379 m

illo

n. St

age 1 E

CL: St

ron

g Uns

ecu

red r

est

ated f

m $249 mill

on to $26

9 mill

on an

d Sat

isfa

cto

y Uns

ecur

ed re

sta

ted f

rom

$11

8 mil

lon to $

99 mi

llo

210

Standard Chartered

– Ann

ual Rep

ort 202

sk r

evi

Risk proﬁle

edit q

ualit

y by geo

grap

hic re

gion

The f

ollowi

ng tabl

e set

s out th

e credi

t qualit

y fo

r gros

s loans a

nd advan

ces to cu

stome

rs an

d bank

s, he

ld at amo

rtis

ed cos

by geo

graphi

c regio

n and sta

ge.

Loa

ns and a

dvance

s to cu

sto

mer

Amortised cost

2021

2020

(Res

tate

Asia

$millon

Africa &

Middle East

$millon

Europe &

Americas

$millon

Asia

$millo

ric

a &

Middle E

ast

$millo

Europe &

Americas

$millo

otal

$millo

oss (

tage 1)

235,

123

24,065

211,668

3,6

256,

437

Provis

on (

stage

71)

(

(47

)

(15)

(

oss (

tage 2)

779

,07

,639

Provis

on (

stage

(31

(137

)

(

)

55)

)

(

oss (

tage 3)²

4,4

729

,095

790

,47

951

Provis

on (

stage

00)

(

,970

)

(287)

)

(

45)

41)

Net loans

245,261

24,792

28,415

298,468

,20

590

281,6

ncl

ude

s rever

se r

epu

rcha

se ag

ree

men

ts an

d oth

er si

mlar s

ecu

red l

end

ing

oun

ts d

o not i

ncl

ude t

hos

e purc

has

ed or o

rig

nat

ed cr

edi

-imp

are

d ﬁna

nca

l ass

llow

ing t

he G

roup’s chan

ge in o

rgan

isa

ton

al st

ruc

tur

e, the

re ha

s be

en an in

teg

rat

on of G

rea

ter Ch

ina & N

ort

h Asi

a and A

AN & So

uth A

sia t

o As

ia.

Prior

period has

been restated.

Loa

ns and a

dvance

s to ba

nks

Amortised cost

2021

2020

(Res

tate

Asia

$millon

Africa &

Middle East

$millon

Europe &

Americas

$millon

Asia

$millo

ric

a &

Middle E

ast

$millo

Europe &

Americas

$millo

otal

$millo

oss (

tage 1)

8,0

31,4

539

,015

Provis

on (

stage

(3)

(5)

(4)

(9)

(

(2)

(

oss (

tage 2)

346

580

Provis

on (

stage

(1)

(2)

)

(1)

(

–

(3)

oss (

tage 3)

–

Provis

on (

stage

(

11)

–

(

11)

–

Net loans

30,301

5,9

,11

44,

383

31,54

44,34

ncl

ude

s rever

se r

epu

rcha

se ag

ree

men

ts an

d oth

er si

mlar s

ecu

red l

end

ing

llow

ing t

he Gr

oup’s chan

ge in or

gan

isat

on

al str

ture

, the

re ha

s bee

n an int

egr

ato

n of G

reat

er Ch

ina & No

h Asi

a and A

AN & So

uth A

sia t

o Asi

a. Pr

ior

period h

as been

restated

211

Standard Chartered

– Ann

ual Rep

t 2021

sk rev

iew and C

api

tal r

eview

Moveme

nt in gr

oss ex

posu

res a

nd cr

edit im

par

ment f

or lo

ans an

d advanc

es, d

ebt se

cur

ite

s, un

draw

n comm

itm

ent

s and

ﬁnancal guarant

ees (

audited)

The t

ables ove

rlea

f set ou

t the movem

ent in gro

ss ex

posur

es and cr

edit imp

arme

nt by stag

e in resp

ect of am

ort

ised co

st loa

to ba

nks an

d custo

mer

s, und

rawn co

mmitm

ent

s, ﬁna

ncal gua

rante

es and de

bt secu

rite

s clas

sif

ed at a

mort

ised c

ost and

CI. Th

e table

s are pre

sente

d for th

e Grou

p, debt se

curi

tes an

d other e

ligble b

ills.

Methodolo

The m

ovement l

ines wi

thn the t

able

s are an aggr

egat

ion of mo

nthl

y movemen

ts over t

he year an

d will th

erefo

re reﬂe

ct the

accumulation of

multiple trades during the year

. The

credit imparment charge

in the income statement c

ompr

ises the

amounts

wit

hn the b

es in t

he tabl

e below l

ess re

coverie

s of amou

nts p

revio

usly w

ritt

en of

. Dis

count u

nwind is r

epor

ted in n

et inte

rest

inco

me and re

late

d to stag

e 3 ﬁnancal i

nstr

ume

nts o

nly

The a

pproa

ch for de

term

inng th

e ke

y line i

tems in t

he tab

les is se

t out b

elow

•

nsfers

– tran

sfer

s bet

en sta

ges are de

eme

d to occu

r at the b

eginnn

g of a mont

h bas

ed on pr

ior mo

nth clo

sing

balances

•

Net remeasurement from stage changes

–

the rem

easu

reme

nt of cre

dit impa

rmen

t proviso

ns ari

sng fr

om a chan

ge in

sta

ge is rep

ort

ed wit

hn the st

age th

at the a

sset

s are t

ransf

erre

d to. For examp

le, as

set

s tran

sfer

red int

o stage 2 a

rem

easu

red fr

om a 12

-mo

nth to a li

fetme e

xpe

cted cre

dit los

s, w

ith the e

ffe

ct of rem

easu

remen

t repo

rted i

n stage 2

. For

sta

ge 3, th

is repre

sent

s th

e intial re

meas

urem

ent fro

m spec

if

c proviso

ns rec

ognis

ed on in

dvidu

al ass

s trans

ferr

ed into

sta

ge 3 in the ye

•

t chan

ges in ex

pos

ures

–

new bus

ines

s writ

ten les

s rep

ayme

nts i

n the year. Withn s

tage 1

, new bus

ines

s writ

ten wil

l attra

up to 12 m

onth

s of exp

ecte

d credit l

oss ch

arges

. Repay

ment

s of no

n-amo

rtis

ng loan

s (prim

arly w

ithn C

orpo

rate,

Com

mercia

l and Ins

titu

tonal B

ankin

g) will ha

ve low amo

unt

s of exp

ected c

redit l

oss prov

ison

s attr

ibut

ed to th

em, du

e to the

rel

ease o

f provis

ons over th

e term t

o matu

rit

. In s

tage

s 2 and 3, t

he amou

nts p

rincp

ally reﬂ

ect rep

aym

ent

s altho

ugh sta

ge 2

y inclu

de new bu

sines

s writ

ten wh

ere cli

ent

s are on no

n-purel

y preca

utio

nar

y ear

ly ale

, are cred

it grade 12

, or wh

non-in

vestment grade debt

curites

are acquired.

•

ange

s in ris

k para

met

ers

– fo

r stag

es 1 and 2

, this reﬂ

ect

s chang

es in the p

robab

ilt

y of defa

ult (PD

), loss gi

ven def

ault

) and ex

posu

re at def

ault (E

) of a

sset

s dur

ing th

e year

, whi

ch inclu

des th

e impac

t of rele

asin

g proviso

ns over th

e term

to ma

turi

ty. It also i

nclud

es the e

ffe

ct of chan

ges in fo

recas

ts o

f macro

econo

mic vari

ables d

urin

g the year a

nd moveme

nts

in management o

verlays

In stage 3, this line

represent

s addit

onal specifc pro

is

recognised on exposures held

withn

stage 3

•

Int

ere

st du

e but no

t paid

– c

hange i

n contra

ctual a

mount o

f inter

est due i

n stage 3 ﬁ

nancal in

str

umen

ts bu

t not p

aid, bei

the n

et of acc

rual

s, rep

aym

ent

s and wr

ite-

off

s, t

oget

her wit

h the co

rresp

ondi

ng chan

ge in cred

it impar

ment

Chan

ges to ECL m

odel

s, wh

ich inco

rpor

ates ch

anges t

o mode

l appro

aches a

nd met

hodo

logie

s, is no

t repo

rte

d as a sep

arate

line i

tem as it h

as an imp

act over a num

ber of li

nes and s

tage

Mov

ements during the yea

Sta

ge 1 gros

s expo

sure

s increa

sed by $

42 billon t

o $68

5 billon w

hen com

pared w

ith 31 D

ecemb

er 2020

. H

alf of th

is incre

ase in

exp

osure

s was in Co

rpo

rate, Co

mmer

cial and In

stit

uton

al Bank

ing, f

rom new o

rigna

tions a

nd tran

sfer

s fro

m stage 2 i

n part

due t

o upgra

des of a

ccount

s fr

om non-p

urely p

recau

tion

y ear

ly aler

t. T

here was a $9 b

illon inc

reas

e in Cons

umer, Privat

and B

usine

ss Ban

king w

hich was m

ainly dr

iven by ne

w orign

ation

s in mor

tgag

e and se

cured we

alth pr

oduct

s. Ad

diton

ally

the

re was a $8 b

illon inc

reas

e in debt s

ecur

ites in s

tage 1

otal st

age 1 prov

isons d

ecre

ased by $

54 mil

lon to $6

09 millo

n, pri

marl

y in Cons

umer, Privat

e and Bu

sines

s Bank

ing un

secur

lending, due to

an improvement

in macroeconomic forecasts for Singapore

and Hong K

ong. Corporate, Commercial and

Ins

titu

tonal B

ankin

g provi

sons in

creas

ed by $9 millo

n prim

arly d

ue to an over

lay take

n for Chin

a Comm

ercial re

al esta

exp

osure

s of $31 m

illon of

et by improve

ment in p

robabi

lt

y of defa

ult.

Sta

ge 2 gros

s expo

sure

s decre

ase

d by $5 billon to $

35 billo

n, pri

marl

y drive

n by $6 billon o

f net ou

tﬂows f

rom exp

osur

chan

ges an

d trans

fers t

o stag

e 1 in Cor

porat

e, Com

mercial a

nd Inst

itut

onal B

ankin

g, par

ticul

arly i

n the Ma

nufact

urin

g and

Com

mercia

l Real Es

tate se

ctor

s. C

onsum

, Pr

ivate an

d Busi

ness B

anki

ng exp

osure

s decre

ase

d by $0.

9 billon

, of whi

$0.7 bil

lon was f

rom the s

ecure

d por

tfol

io (

main

ly mor

tgag

es in As

)

, and $0.

2 billon wa

s from u

nse

cured p

ort

folios

Deb

t secu

rite

s incre

ased by $

1.8 bi

llon main

ly due t

o the Sr

i Lanka soverei

gn down

grade.

Sta

ge 2 provi

sons d

ecrea

sed by $2

29 mil

lon comp

ared to 3

1 Dece

mber 2020, $17

4 millon o

f which wa

s in Cor

porat

Com

mercia

l and Ins

titu

tonal B

ankin

g as a res

ult of ex

posu

re chang

es and t

ransf

ers to s

tage 1

, repa

ymen

t of exp

osure

incr

ease

d colla

teral an

d a net re

ducti

on of $31 m

illon in ju

dgem

ental m

anage

ment over

lays (

whi

ch are rep

orte

d in ‘Chan

ges

in ri

sk para

meter

s’ in th

e table

). The COVID-

19 m

anage

ment over

lay r

educe

d by $95 millon a

s earl

y aler

t balan

ces fel

l, this wa

par

tly o

set by an over

lay ta

ken for Chin

a Comm

ercial Rea

l Est

ate exp

osure

s of $6

4 millo

n. Con

sume

, Pri

vate and B

usin

ess

Ban

king pr

ovison

s decr

ease

d by $72 mi

llon, ma

inly in u

nsec

ured le

nding f

rom imp

rovemen

t in macro

econ

omic fo

recas

and lowe

r delin

quen

ces as con

diton

s norm

alise

d in a num

ber of o

ur marke

The i

mpact o

f chang

es in mac

roeco

nomic f

oreca

sts d

ecre

ased p

roviso

ns by $5 millo

n (202

0: i

ncrea

se of $

81 millon

), whi

includes a $5

1 millon

multiple economic scenario post model adj

stment.

New ECL m

odel

s imple

mente

d dur

ing the ye

ar decr

ease

d provi

sons by $

3 millon

In Co

rpor

ate, Co

mmerc

ial and In

stit

utona

l Bank

ing, gro

ss st

age 3 loa

ns dec

reas

ed by $1.1 billon co

mpare

d wit

h 31 Dece

mber

2020 due to de

bt sale

s and rep

aym

ent

s in Asi

a and Af

rica an

d the Mid

dle East re

gion

s. Provi

sons de

crea

sed by $0.7 b

illon to

9 billo

n also dr

iven by rep

aym

ent

s and wr

ite-

off

s. C

orpo

rate, C

ommer

cial and In

stit

uton

al Bank

ing cover ra

tio de

creas

ed by

1 per c

ent as a re

sult of w

rite

-of

fs an

d new acco

unt

s with a lowe

r coverage t

han exi

stng s

tage 3 lo

ans

. Cons

umer, Private a

Bus

ines

s Bank

ing tot

al stag

e 3 loan

s remain

ed bro

adly s

table at $

1.6 bi

llon.

212

Standard Chartered

– A

nnu

al Rep

ort 202

sk r

evi

Risk proﬁle

All segments (

audited

)

ort

ise

d cos

t and F

VOCI

age 1

age 2

age 3

Gross

balance

$millon

credit

impar-

ment

$millon

Net

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

$millon

As a

t 1 Janu

y 2020

612,404

(

,787

)

329

,082

(5,

255)

,82

)

653

,04

sfers to

stage 1

437

(

12)

45,

)

–

)

–

sfers to

stage 2

067

)

430

(90,6

)

09)

(

08)

–

sfers to

stage 3

)

,13

)

868

–

Net change

exposures

63,2

(

119)

(

)

142

(

)

(

1,544

)

(1,

311)

2,0

256

22,325

Net remeasurement

from stage cha

nges

–

)

–

(

789)

(

789)

–

(

Changes i

n risk

parameter

–

(546

)

(546

)

–

(

–

(1,

715)

,715

)

rite-of

–

(

–

(

–

Interest

due

but u

npai

–

31)

–

31)

–

Discount unwind

–

ange translation

differences a

other movements

12,414

146

12,560

511

57)

262

(97

)

165

,18

(

As at 31

December

2020²

,96

)

642

297

)

906

10,

100

(

507

(

)

685,710

Inc

ome st

atem

ent ECL

(

charge

)

rele

ase

(

(81

(

)

(2,56

Recove

ries o

f amou

nts

ious

ly wr

itt

en of

–

242

ota

l credit

imparment

(

charge

)

release

(

(81

(

327

)

As a

t 1 Janu

y 2021

)

297

787

81)

38,

906

10,

100

,59

507

692

(

)

685,710

sfers to

stage 1

(620)

25,

355

(

(25,304

)

(51)

–

(51)

–

sfers to

stage 2

(53,99

)

211

(53,7

83)

54,

335

,11

41)

(332)

–

sfers to

stage 3

(212)

(20

822)

335

,487

)

,03

(33

696

–

Net change

exposures

84,288

32)

84,156

551)

169

0,3

82)

,429)

(1,7

68)

51,

308

698

,00

Net remeasurement

from stage cha

nges

–

(

157)

(157)

–

(212)

–

(315)

(31

Changes i

n risk

parameter

–

(89)

–

(915)

–

(92

(925)

rite-of

–

,215)

215

–

(1,

215)

1,21

–

Interest

due

but u

npai

–

(189

)

189

–

(

189)

–

Discount unwind

–

227

ange translation

differences a

other movements

(14,258)

459

(13,799

)

(275)

29)

(

152

(

(32)

(14,3

(

14,5

35)

As at 31

December

202

1²

684,759

)

4,1

34,

550

)

33,898

)

Inc

ome st

atem

ent ECL

(

charge

)

rele

ase

(77)

42)

Recove

ries o

f amou

nts

ious

ly wr

itt

en of

–

288

ota

l credit

imparment

(

charge

)

release

(77)

(

178)

(

Includes fair

value adjustments and amortisaton

on debt securites

xclu

des C

h and ba

lan

ces at c

ent

ral ba

s, Acc

rue

d inc

ome, A

s hel

d for s

ale an

d Oth

er as

ts gr

oss b

ala

nces o

f $11

4,4

64 m

illo

n (2020: $1

6 mill

)

d T

ota

l cred

it im

par

men

t of $7 m

illo

n (2020: $8 m

ill

)

oes n

ot inc

lud

e Nil (2020

: $2 mill

on re

lea

) r

ela

tin

g to Ot

her a

sse

Statutor

y basis

age 3 gr

oss i

ncl

ude

s $33 m

illo

n (2020: $

38 mi

llon) or

ign

ated c

red

-i

mpa

red d

ebt se

cur

it

Inc

lude

s $17

1 mil

lon ad

jus

tme

nt in re

lat

ion t

o inte

res

t ear

ned o

n imp

are

d ass

The g

ross balanc

e includes the

notional amount

of off balance

sheet instruments

213

Standard Chartered

– Annu

al Repo

rt 2021

sk rev

iew and C

api

tal r

eview

Of w

hich – movem

ent of de

bt se

curit

es, al

tern

ative Ti

er 1 and ot

her eli

gble bil

ls (

audi

ted)

ort

ise

d cos

t and F

VOCI

age 1

age 2

age 3

Gross

balance

$millon

credit

impar-

ment

$millon

Net

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

$millon

As a

t 1 Janu

y 2020

138

,78

(

,732

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Inc

ome st

atem

ent ECL

(

charge

)

rele

ase

(

73)

)

Recove

ries o

f amou

nts

ious

ly wr

itt

en of

–

201

ota

l credit

imparment

(

charge

)

release

00)

(

241)

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Priv

ate B

ank

ing an

d Reta

il Ban

kin

g to Co

nsu

mer, Pr

ivat

e & Bus

ine

nki

ng. Pr

ior p

eri

od ha

s be

en res

tat

The gross balanc

e includes the

notional amount

of off ba

lance

sheet instruments

218

Standard Chartered

– Ann

ual Re

por

t 2021

sk r

evi

Risk proﬁle

Ana

lysi

s of sta

ge 2 bal

ance

The t

able b

elow anal

yses t

otal st

age 2 gro

ss exp

osur

es and as

soci

ated ex

pect

ed cre

dit provi

sons by t

he key signﬁcant

incr

ease i

n credit r

isk (SICR) drive

r that ca

used t

he exp

osure

s to be cl

assi

fe

d as sta

ge 2 as at 31 D

ecem

ber 2021 and 31

cembe

r 20

20 fo

r each s

egme

nt. Th

is may n

ot be th

e same dr

iver t

hat cau

sed th

e intial t

ransf

er into s

tage 2

Whe

re mult

iple dr

iver

s apply, the exp

osur

e is alloc

ated b

ased o

n the ta

ble ord

. Fo

r example, a l

oan ma

y have bre

ache

the PD t

hresh

olds a

nd coul

d also b

e on non-p

urely p

recau

tion

y ear

ly aler

t; in t

his ins

tance, t

he exp

osure i

s repor

ted u

nder

‘In

crea

se in PD’

2021

Corporate, Commercial &

Institu

tonal banking

Consumer,

Private &

Business Banking

Cent

ral

& other items

Gross

$millon

ECL

$millon

Cov

erage

Gross

$millon

ECL

$millon

Cov

erage

Gross

$millon

ECL

$millon

Cov

erage

Gross

$millon

ECL

$millon

Cov

erage

Inc

reas

e in PD

14,

737

187

.3%

122

.5%

,69

331

Non-purely

precautionar

early alert

5,000

–

0.0%

–

0.0%

5,0

0.5

High

er ri

sk (

CG12)

1,075

3.4

3.2%

3.1

1,733

Sub-i

estment grade

235

–

0.0%

–

0.0%

235

up/

Sell down

(Pri

vate B

ankin

–

0.0%

493

–

0.0

493

Others

,39

178

173

30 da

ys pa

st due

–

0.0

199

–

0.0

199

Management ov

erlay

166

–

208

ota

l stage 2

25,

437

.7%

3,684

187

5.1

,495

,61

2020

Corporate, Commercial &

Institu

tonal banking

Consumer,

Private &

Busines

s Banking

Cent

ral

& other items

otal

Gross

$millo

ECL

$millo

Cover

age

Gross

$millo

ECL

$millo

Cover

age

Gross

$millo

ECL

$millo

Cover

age

Gross

$millo

ECL

$millo

Cover

age

Inc

reas

e in PD

326

1.7%

219

152

4.7%

487

.0%

Non-purely

precautionar

early alert

.4%

–

0.0%

–

0.0%

High

er ri

sk (

CG12)

635

5.7%

–

0.0%

383

.1%

,018

4.7%

Sub-i

estment grade

317

–

0.0%

,018

1,33

.4%

up/

Sell down

(Pri

vate B

ankin

–

0.0

0.1

–

0.0%

632

0.1

Others

0.2

211

30 da

ys pa

st due

–

0.0%

272

10.0

–

0.0%

272

0.0%

Management ov

erlay

197

–

275

ota

l stage 2

4,53

259

5.7%

0.8%

885

.2%

The m

ajor

ty o

f expo

sures a

nd the a

sso

ciated e

xpe

cted cre

dit

los

s provi

sons co

ntinu

e to be in st

age 2 du

e to decr

ease

s in

the probabil

ty of default.

The a

mount o

f expo

sures i

n Corp

orat

e, Comm

ercial an

Institutonal Banking plac

ed on non-

purel

pre

cautionary

ear

ly ale

rt dec

reas

ed dur

ing th

e year and a

s a resul

t the

proportion of stage 2

ive

n by

this categor

y decreased.

Altho

ugh ‘Higher risk

’ lending balan

ces decrease

d compared

to 2020, the po

rtio

n of exp

osure

s in stag

e 2 with a ‘

High r

isk

’

dri

ver incr

ease

d, as a hig

her pro

por

tion of CG12 a

ccount

s were

incl

uded w

ithn ‘

Incre

ase in PD’ i

n 20

20.

10 per cent

of the provisons held

against stage 2 Consumer

Pri

vate and B

usine

ss Ba

nking e

xpos

ures ar

ise f

rom the

appl

icaton o

f the 30 d

ays p

ast due b

ack

stop, alt

houg

h this

repr

esen

ts on

ly 5 per c

ent of ex

posur

es. T

he prop

ort

ion of PD

dri

ven exp

osure

s in stag

e 2 has re

duce

d compar

ed to 2020 as

the i

mpact o

f CO

VID

19 me

asure

s redu

ced in th

e Grou

’

maj

or Con

sumer B

anki

ng mar

kets

The C

entr

al and ot

her ite

ms seg

ment h

as see

n a signﬁcant

incr

ease i

n the ’H

igher r

isk

’ ca

tego

y at 31 Dec

ember 2021

pri

marl

y due to n

ewly dow

ngrad

ed sover

eign coun

terp

art

ies

in Sr

i Lanka.

‘Other

s’

primarly incorp

orates exposures where or

ig

ation

dat

a is incom

plet

e and the e

xpos

ures are a

llocat

ed into

sta

ge2.

Credit

imparment

charge (

restated

)

The o

ngoin

g credi

t impar

ment is a n

et char

ge of $263 m

illon

(2020: $2,2

4 mi

llon

). The net c

harge o

f $263 millo

n is div

ded

acro

ss Co

nsum

, Pr

ivate an

d Busin

ess B

ankin

g $285 millo

and $2

2 millo

n in Cen

tral and o

ther it

ems

, part

ly of

et by

rel

ease o

f $4

4 millo

n in Cor

porat

e, Com

mercial a

Instit

utonal Bankin

Sta

ge 1 and 2 im

parm

ent is a ne

t charg

e of $78 millon

219

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Cor

por

ate, Co

mmerci

al and Ins

titu

tonal B

anki

ng stag

e 1 and

2 is a ne

t charge o

f $23 mi

llon, du

e to a $3

0 millon ch

arge

from a post model adj

ustment for multiple

conomi

sce

nario

s, $24 millon ch

arge on s

overeign d

owngra

de of

i Lanka, of

fse

t by decli

ne in sta

ge 2 expo

sure

s reﬂect

ing

lower l

evels of no

n-pure

ly pre

cauti

onar

y ea

rly al

ert ex

posu

res,

additonal collat

eral and improvement in probabilt

y of

default. The CO

VID-

19 management

overlay reduced by

$95 millo

n altho

ugh thi

s was of

et by a new

, s

epara

tely

sess

ed man

agem

ent overl

ay in Q4 2021 of $9

5 millon fo

Chin

a Comm

ercial Real E

sta

te exp

osure

Con

sume

, Pri

vate and B

usin

ess B

ankin

g credit i

mparm

ent

has a

lso de

creas

ed (2021: $285 m

illon, 2020: $7

1 m

illon

Sta

ge 1 and 2 im

parm

ent red

uced t

o $32 millon a

t the en

of 2021 (2020: $413 millon

) m

ainly d

ue to ECL reve

rsal

s as

the f

ward-lo

okin

g macro

econ

omic ou

tloo

k improved i

relative terms

The C

entr

al and ot

her ite

ms seg

ment st

age 1 and 2 i

s a net

char

ge of $2

3 millon pr

imar

ly due t

o multi

ple eco

nomic

scenario post model adjustments

Sta

ge 3 imp

armen

t is a net ch

arge of $

185 mil

lon.

The

re was a rel

eas

e of $67 millon f

rom Co

rpo

rate,

Com

mercia

l and Ins

titu

tonal B

ankin

g stag

e 3 credit

imp

armen

t due to s

ignﬁcant re

coverie

s duri

ng the ye

Con

sume

, Pri

vate and B

usin

ess B

ankin

g stage 3 c

redit

imp

armen

t of $25

3 millon de

crea

sed f

rom $328 mi

llon,

dri

ven by be

tte

r recove

ries

Restructuring (

aud

ited)

The

re was a ne

t $9 millon im

parm

ent rel

ease f

rom th

e Grou

’

s d

iscont

nued b

usin

esse

2021

2020

(Res

tate

age 1 & 2

$millon

age 3

$millon

age 1 & 2

$millo

Stage 3

$millo

otal

$millo

Ongoing business

ortfoli

Corp

orate, Commercial &

Institu

tonal Banking

)

390

529

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

253

285

328

ntral & o

ther i

tems

(1)

–

Credit imparment

charge/

(

release

)

185

263

827

Restructuring business

portfolio

Others

(2)

(7)

(9)

–

Credit imparment

charge/

(

release

)

(2)

(7)

(9)

–

otal credit imparment

charge

(release

)

254

827

,498

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng an

d Priv

ate B

ank

ing an

d Reta

il Ban

kin

g to Co

nsu

mer, Pr

ivat

e & Bus

ine

ss Ba

nki

ng. Fu

rth

er, cer

tain c

lie

nts h

ave b

een

mov

ed be

een t

he t

wo new c

lien

t seg

men

. Pri

or pe

rio

d has b

een r

est

ate

VID-19

relief measures

ID-

19 p

aym

ent

-relat

ed reli

ef mea

sure

s were in pla

acro

ss mo

st of our m

arket

s dur

ing 2020 and 2021, pa

rticu

larl

foc

used o

n Cons

umer, Privat

e and Bus

ines

s Bank

ing

cust

omer

s. M

easu

res in mo

st marke

ts ha

ve now exp

ired,

although

moratoria schemes in

certain Africa and

the

Midd

le East co

untr

ies have b

een ex

tende

d to 30 Ju

ne 2022

The

se sch

emes ar

e gener

ally int

iated by co

untr

y r

egul

ator

and gov

nments. Measures include princpal and

or interest

moratoria and term e

xtensions

, and

are generally ava

ilable to

eligb

le bor

rower

s (

tho

se tha

t are cur

rent or l

ess th

an 30 da

past due, unless local

regulator

s hav

e specif

ed different

cri

tera

). Cer

tain s

cheme

s may b

e restr

icte

d to tho

se in

ind

ustr

es signﬁca

ntly im

pacte

d by CO

D-

, suc

h as avi

aton

or con

sume

r ser

ces, b

ut are no

t bor

rower

-s

pecif

c in n

ature.

Relief m

eas

ures are g

enera

lly man

dated o

r supp

orte

d by

regulators and gov

nments and ar

e available to a

ll eligble

cust

omer

s who r

eque

st it. H

owever

, in a n

umbe

r of coun

trie

par

ticu

larl

y in Asia a

nd Af

rica and t

he Mid

dle East

compulsor

y (

regulatory approved

) moratoria rel

iefs are

applied to

all eli

gble loans unless a customer

has specif

cal

aske

d to opt ou

In mo

st majo

r Cons

umer, Privat

e and Bus

ines

s Bank

ing

mar

kets

, the int

ial pe

riod o

f relief p

rovide

d was be

twe

6 and 12 m

onth

s. In so

me smal

ler mar

kets

, the in

tial pe

riod

of re

lief was fo

r 3 mont

hs.

ID-

19 re

late

d teno

r extens

ions h

ave also b

een m

ade

available to Cor

porate, Comm

ercial and Instituton

al Banking

clie

nts

, prim

arly f

or per

iods b

ween 3 t

o 9 mont

hs, if t

hey are

exp

ecte

d to ret

urn to n

orma

l paym

ent

s with

n 12 mont

hs.

ses

sme

nt fo

r expec

ted c

red

it los

ses

ID-

19 p

aym

ent reli

efs t

hat are g

enerall

y avail

able to a

mar

ket or ind

ustr

y a

s a whol

e and are no

t bor

rower

-s

pecif

c

in nat

ure ha

ve not

, on the

ir own, re

sulte

d in an aut

omat

chan

ge in sta

ge (

at is, i

ndvi

dual cus

tome

rs are n

con

sidere

d to ha

ve exper

ienc

ed a signﬁca

nt incre

ase in

cre

dit ris

k or an impr

ovement in c

redit r

isk) nor ha

ve they

been considered to be

for

borne.

A cust

omer

’

s s

tage an

d past d

ue sta

tus reﬂ

ect

s their s

tatu

imm

edate

ly pri

or to th

e granti

ng of the r

elief, with pa

st due

amounts assessed based on

the new terms

as set out in

the

temporar

y payment reliefs.

If a cus

tomer r

equir

es addi

tonal s

uppo

rt af

ter the e

xpir

y of

gen

erally a

vailabl

e pay

ment re

lief

s, th

ese wi

ll be con

sider

at a bo

rrower l

evel, aft

er tak

ing into a

ccoun

t their in

dvid

ual

circumstances. Depending on the type of subsequent suppor

prov

ided, t

hese c

ustom

ers m

ay be cl

ass

if

ed wit

hn stag

e 2 or

stage 3.

Whe

re clien

t level gover

nment g

uaran

tees ar

e in place

the

se do no

t aff

ect sta

ging bu

t are taken in

to accou

whe

n dete

rminn

g the level o

f credi

t impar

ment

220

Standard Chartered

– Annu

al Rep

ort 202

sk r

evi

Risk proﬁle

Impact from temporary changes to loan

contractual terms

The g

rantin

g of CO

ID-

19 p

ayme

-relat

ed reli

ef mea

sures

y cause a t

ime valu

e of money l

oss fo

r the G

roup w

here

inte

rest is n

ot per

mitt

ed to b

e compo

unde

d (

tha

t is, int

eres

char

ged on in

teres

) or w

here in

tere

st is not p

ermi

tted t

o be

char

ged or a

ccru

ed dur

ing th

e relief p

erio

d. As s

et out a

bove,

suc

h relief

s do no

t impa

ct a custo

mer

’

s st

age and ar

e not

con

sidere

d to be f

orbo

rne even t

houg

h a time valu

e of mon

los

s aris

es. A

s the re

lief pe

riod

s are rel

ative

ly sho

-ter

m in

nat

ure, an

d a small pe

rcent

age of t

he tota

l loans o

stand

ing,

thi

s has no

t resul

ted in a ma

teri

al impa

ct for th

e Grou

The t

able b

elow set

s ou

t the ext

ent to wh

ich pa

yment r

elief

are in p

lace acr

oss th

e Gro

’

s l

oan po

rtfo

lio ba

sed on t

amo

unt out

anding a

t 31 Dece

mber 2021

The C

onsu

mer, Private a

nd Bus

ines

s Banki

ng por

tfo

lio unde

mor

ator

ia redu

ced to $1

82 millon co

mpare

d to $2,

372 mi

llon

at th

e end of 2020 and a pe

ak of $

9 bil

lon in the ﬁ

rst ha

lf of

20,

with the rem

ainng balance primarl

y concentrated in

ia. Thi

s repre

sent

s les

s than 1 p

er cent o

f the Gr

oup

’s gross

loa

ns and ad

vances t

o bank

s and cus

tome

rs. 51 p

er cent o

reli

ef mea

sures a

re ful

ly sec

ured. 3

1 per cen

t of the t

otal

amount

s approved are to Busines

s Banking custom

ers,

conc

entra

ted in in

dust

res th

at have b

een ma

teri

ally

disr

upt

ed. 79 p

er cent of t

he tot

al amou

nts a

pproved ar

e in

sta

ge 1 and 2 pe

r cent in st

age 2

, the lat

ter ma

inly in M

alays

where compulsor

y (

gulatory mandated) relief

easures a

in place

. 79

er c

ent of stage 2 acc

unts under reli

ef measures

are collateralis

ed by

immovable proper

ty.

In Co

rpor

ate, Co

mmerc

ial and In

stit

utona

l Bank

ing,

0.2 p

er cent o

f the po

rtfo

lio are su

bject t

o relief m

easu

res.

Aro

und 68 p

er cent o

f the am

ount

s appr

oved are for t

enor

exte

nsion

s of 90 da

ys or le

ss and ap

proxim

atel

y 17 per cen

of th

e relie

fs gran

ted are t

o clien

ts in v

ulner

able se

ctor

VID-19

relief measures

Segment/

Product

sia

ric

a & Mid

dle Ea

rop

e & Ame

rica

Outstanding

$millon

% of

portfolio

Outstanding

$millon

% of

portfolio

Outstanding

$millon

% of

portfolio

Outstanding

$millon

% of

portfolio

Credit cards &

Persona

l loa

1.2%

.7%

Mortgages & Auto

600

0.7%

Business banking

.3%

365

–

0.0

otal

Consumer

, Priv

and Busines

s Banking

.9%

,029

0.9

153

Corporate, Commercial &

Instit

utonal Banking

511

388

al at 31 De

cem

ber 202

,693

,417

266

otal C

ons

umer, Priva

and Business

anki

,37

1.8%

206

166

Corp

orate, Commercial &

Institu

tonal Banking

1,195

429

otal a

t 31 Dec

embe

r 20

567

.0%

595

ahr

ain’s mo

rato

ria s

che

me ex

pire

d on 31 D

ece

mbe

r 2021. T

he sc

hem

e has b

een f

the

r exte

nde

d to 30 J

une 202

2 on a

n opt-in bas

. Amo

unt in

clu

des $

151 mi

llon

of cu

sto

mer

s wh

o were u

nde

r mor

ator

ia sc

hem

es th

at ex

pire

d on 31 D

ece

mbe

r 2021 ha

ve opt

ed to c

ont

inu

e unde

r the e

xte

nde

d sch

eme u

p to 31 Ja

nua

ry 202

rcen

tag

e of po

rtf

olio r

epr

ese

s the o

stan

din

g amou

nt at 3

1 Dec

emb

er 2021 a

s a perc

ent

age o

f the g

ros

s loan

s and a

dvan

ces t

o ban

ks an

d cust

ome

rs by

pro

ct and s

egm

ent an

d tot

al lo

ans a

nd ad

vance

s to b

ank

s and cu

sto

mer

s at 31 D

ece

mbe

r 2021 and 2

020

Problem credit management and pro

visoning

(

dited)

Forb

orne a

nd ot

her mo

dif

ed l

oan

s b

y cli

ent se

gmen

A for

bor

ne loan a

rise

s when a c

onces

sion h

as bee

n made t

the c

ontra

ctual t

erms o

f a loan in r

espo

nse to a cu

stom

er’s

ﬁnancal diff

culties

Net f

orbo

rne lo

ans de

crea

sed by $

499 millo

n to $1,

529 mill

on,

comp

ared w

ith 31 De

cemb

er 202

0, $71

8 millon o

f which wa

s in

per

for

ming fo

rbor

ne lo

ans of

et by an incre

ase o

f $219 millo

in no

n-perf

ormi

ng for

born

e loan

s. Jus

t under h

alf of th

e total

dec

reas

e in for

born

e loan

s was in Cor

por

ate, Co

mmerci

and In

stit

uton

al Bank

ing, p

rimar

ly dr

iven by cure

s out of

per

for

ming fo

rbor

ne lo

ans in Af

rica an

d the Mi

ddle East

wit

h the re

mainde

r of the d

ecre

ase du

e to lower p

erfor

ming

for

bor

ne loan

s in Con

sume

, Pri

vate and B

usine

ss Ba

nking

main

ly dri

ven by fu

ll repa

ymen

t of a signﬁca

nt out

stan

ding

loa

n accoun

t in Privat

e Bank

ing.

221

Standard Chartered

– Ann

ual Rep

ort 202

sk rev

iew and C

api

tal r

eview

The t

able b

elow pre

sent

s loan

s with f

orb

earanc

e meas

ures by se

gmen

Amortised cost

2021

2020 (Rest

ate

Corporate,

Commercial

Institu

tonal

Banking

$millon

Consumer,

Pri

vate &

Business

Banking

$millon

Corporate,

Commercial

Institutonal

Banking

$millo

Consumer,

ivat

e &

Business

Banking

$millo

otal

$millo

All l

oans w

ith fo

rbe

aranc

e mea

sures

526

406

,890

703

593

Cre

dit imp

arm

ent (

age 1 an

d 2

)

(4)

–

(4)

(

(1)

(4)

Cre

dit imp

arm

ent (

age 3)

(1,

237)

(

162)

,39

(

81)

(

61)

Net carr

ying v

alue

285

244

,52

521

2,02

Inc

lude

d with

n the ab

ove tabl

Gross performing

forborne loans

272

331

698

1,0

dif

cati

on of te

rms

and conditons¹

257

316

696

Reﬁ

nancng²

–

Impairment provisons

(4)

–

)

(3)

(1)

(4)

dif

cati

on of te

rms an

d cond

iton

(4)

–

)

(3)

(1)

(4)

Reﬁ

nancng

–

Net performing forbor

ne loans

268

695

350

1,0

Collateral

121

352

Gross non-performing forborne loans

253

348

,601

,19

2,544

dif

cati

on of te

rms an

d cond

iton

,095

348

2,4

2,02

352

Reﬁ

nancng²

158

–

158

–

170

Impairment provisons

,237

)

(

162)

399)

(

(18

(

61)

dif

cati

on of te

rms an

d cond

iton

(

06)

(

162)

268)

(

(181)

(

429)

Reﬁ

nancng²

31)

–

(

131)

32)

–

(

132)

Net non-

performing forborne loans

1,0

186

202

812

171

Collateral

236

298

289

336

odi

f

cati

on of t

erm

s is any c

ont

ract

ual c

hang

e apa

rt f

rom re

ﬁnan

cng

, as a re

sul

t of cre

dit s

tres

s of t

he cou

nte

art

y, i.e. in

tere

st re

duc

tio

ns, l

oan co

vena

waive

Reﬁ

nan

cng is a n

ew co

ntra

ct to a l

end

er in cr

edit s

tre

, such t

hat t

hey ar

e reﬁn

anc

ed an

d can pa

y ot

her de

bt co

ntr

act

s tha

t they w

ere un

abl

e to ho

nou

llow

ing t

he G

roup’s chan

ge in o

rgan

isa

ton

al st

ruc

tur

e, the

re ha

s be

en an in

teg

rat

on of C

orp

orat

e & Ins

tit

ut

onal B

ank

ing a

nd Co

mme

rcia

l Bank

ing t

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng an

d Priv

ate B

ank

ing an

d Reta

il Ban

kin

g to Co

nsu

mer, Pr

ivat

e & Bus

ine

ss Ba

nki

ng. Pr

ior p

eri

od ha

s be

en res

tat

Forb

orne a

nd ot

her mo

dif

ed l

oan

s b

y re

gion

Amortised cost

2021

2020

(Res

tate

Asia

$millon

Africa &

Middle East

$millon

Europe &

Americas

$millon

Asia

$millo

ric

a &

Middle E

ast

$millo

Europe &

Americas

$millo

otal

$millo

Performing forborne loans

205

327

135

325

1,0

Stage 3 forborne loans

572

137

202

180

983

Net forbor

ne loans

777

539

529

505

028

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Gre

ate

r Chin

a & Nor

th A

sia an

d ASE

AN & S

out

h As

ia to A

sia

. Prio

period h

as been

restated

222

Standard Chartered

– Ann

ual Re

por

t 2021

sk r

evi

Risk proﬁle

edit-

impa

red (st

age 3) lo

ans an

d advan

ces by cli

ent

segment (

audited)

Gro

ss st

age 3 loa

ns for t

he Gro

up is $8

1 bi

llon (2020:

.2 bi

llon

). The red

uctio

n in loan

s was pr

imarl

y drive

n by

Corporate, Commercial and Institutonal Banking debt

sal

es and rep

aym

ent

s in As

ia and Af

rica an

d the Mi

ddle

East regions.

Inﬂow

s into st

age 3 for C

orp

orate, C

omme

rcial and

Ins

titu

tonal B

ankin

g were lower by 5

3 per ce

nt at $1.

7 billon

comp

ared w

ith $3

.6 billo

n in 202

0 a

nd rema

in low comp

ared

to hi

storc

al nor

ms. Th

e new inﬂow

s in 2021 were mai

nly in A

sia

and A

fric

a and the M

iddle Eas

Gro

ss st

age 3 loa

ns in Co

nsume

, Pri

vate an

d Busin

ess B

ankin

rem

ained b

roadl

y stabl

e at $1.

6 billon

age 3 cover ra

tio (audit

ed)

The s

tage 3 cove

r ratio me

asur

es the p

ropor

tio

n of stag

e 3

imp

armen

t provis

ons to gr

oss st

age 3 lo

ans, an

d is a met

ric

commonly used in considerng i

mparment trends. This metric

doe

s not all

ow for vari

atons i

n the com

posi

ton of st

age 3

loa

ns and sh

ould b

e used i

n conjun

cton wi

th oth

er Cred

it Risk

info

rmat

on provi

ded, in

cludn

g the leve

l of colla

teral cover.

The b

alanc

e of stag

e 3 loan

s not covere

d by stag

e 3

imparment provis

ns repr

esent

he adjusted v

alue of

coll

ateral h

eld and t

he net o

utcom

e of any wor

kout or

recover

y strategies. Collateral provides risk mitgation to some

deg

ree in all c

lient se

gmen

ts an

d suppo

s the cr

edit qu

alit

and cov

er ratio assessm

ents post imparment pro

is

Fur

ther in

form

aton on co

llate

ral is prov

ided in t

he Cre

dit Risk

mitgation section

The C

orp

orate

, Comm

ercial an

d Insti

tuto

nal Ban

king cove

rat

io decre

ase

d by 1 per cen

t as a resu

lt of wr

ite-

off

s and ne

acco

unt

s with a l

ower coverag

e than ex

istng s

tage 3 lo

ans

The C

onsu

mer, Private a

nd Bus

ines

s Banki

ng cover rat

io is

51 per c

ent (2020: 4

7 p

er cent) due to a n

ew provis

on taken

on a Bu

sine

ss Ban

king cli

ent

Amortised cost

2021

2020 (Rest

ated

)

Corporate,

Commercial &

Institu

tonal

Banking

$millon

Consumer,

Pri

vate &

Business

Banking

$millon

Corporate,

Commercial &

Institutonal

Banking

$millo

Consumer,

ivat

e &

Business

Banking

$millo

otal

$millo

Gros

s credit

-impare

520

,575

,095

562

Cre

dit imp

arm

ent prov

ison

(

61)

(

96)

)

(

4,6

)

(

41)

Net credit

-impared

,659

3,438

3,0

831

873

Cov

er ratio

51%

58%

60%

58%

llate

ral ($ millon)

805

1,4

1,0

706

Cov

er ratio (

after collateral)

72%

91%

75%

76%

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng an

d Priv

ate B

ank

ing an

d Reta

il Ban

kin

g to Co

nsu

mer, Pr

ivat

e & Bus

ine

ss Ba

nki

ng. Pr

ior p

eri

od ha

s be

en res

tat

edit-

impa

red (st

age 3) lo

ans an

d advan

ces by geo

gra

phic re

gion

Sta

ge 3 gros

s loan

s decre

ase

d by $1.1 billon or 12 p

er cent c

ompar

ed wit

h 31 Dece

mber 2020. The de

crea

se was pr

imar

ly dri

ven

by Cor

pora

te, Com

mercia

l and Ins

titu

tonal B

ankin

g debt s

ales an

d repa

ymen

ts in A

sia and A

ica and th

e Middl

e East regi

ons

Amortised cost

2021

2020

(Res

tate

Asia

$millon

Africa &

Middle East

$millon

Europe &

Americas

$millon

Asia

$millo

ric

a &

Middle E

ast

$millo

Europe &

Americas

$millo

otal

$millo

Gros

s credit

-impare

4,4

729

,095

790

,47

951

Cre

dit imp

arm

ent prov

ison

401)

(

70)

(

)

(

13)

45)

(

)

Net credit

-impared

047

443

3,438

406

,87

Cov

er ratio

39%

58%

57%

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Gre

ate

r Chin

a & Nor

th A

sia an

d ASE

AN & S

out

h As

ia to A

sia

. Prio

period h

as been

restated

edit Ri

sk mi

tga

tion

Poten

tial cr

edit lo

sses f

rom any gi

ven accou

nt, cu

stom

or po

rtf

olio are m

itgat

ed usin

g a range o

f tool

s such as

collateral, ne

tting arrangem

ents

, credit insurance and

cre

dit der

ivatve

s, tak

ing int

o accoun

t expe

cted vo

latilt

and guarante

es.

The r

elianc

e that can b

e plac

ed on th

ese mit

gant

s is

care

full

y ass

esse

d in light o

f issu

es suc

h as leg

al cert

aint

and enforceab

il

, market valuation corre

lation and

counterpart

y risk of the

guarantor

Collateral (

audited)

The r

equir

ement f

or colla

teral i

s not a sub

stit

ute for t

abilt

y to r

epay, which is t

he pr

imar

y con

sider

aton fo

r any

lending decis

The u

nadju

sted m

arket valu

e of coll

ateral a

cross a

ll ass

ype

s, in re

spec

t of Cor

porat

e, Com

mercial a

nd Inst

itut

onal

Banking, without adjustng for ov

col

lateralisaton, was

46 b

illon (2020: $313 bill

223

Standard Chartered

– An

nual Re

por

t 2021

sk rev

iew and C

api

tal r

eview

The c

ollate

ral value

s in the t

able be

low (

whic

h covers l

oans

and advances to bank

s and customer

s, excluding thos

hel

d at fair valu

e thro

ugh proﬁt o

r loss

) ar

e adjus

ted wh

ere

appropriate in

accordance with our risk

mitgation policy

and fo

r the ef

fec

t of over

-co

llate

ralisa

ton. T

he exte

nt of

overc

llatera

lizaton has been determined with reference

to bo

th th

e drawn an

d undra

wn com

pone

nts o

f expo

sure

as th

is bes

t reﬂect

s th

e effe

ct of coll

atera

l and oth

er cred

enh

ancem

ent

s on the am

ount

s ari

sng fr

om expe

cted c

redit

los

ses

. The valu

e of colla

teral re

ﬂect

s mana

gemen

’

s be

est

imate a

nd is ba

cktest

ed aga

inst ou

r prio

r expe

rienc

On a

verage, a

cross a

ll t

ypes o

f non-c

ash coll

ateral

, the valu

asc

ribe

d is appr

oximat

ely hal

f of its c

urre

nt marke

t value.

In th

e Cons

umer, Privat

e and Bus

ines

s Bank

ing se

gment

, a

cured l

oan is on

e wher

e the bo

rrower pl

edge

s an ass

as co

llater

al of whic

h the G

roup is ab

le to ta

e pos

ses

sion

in th

e event tha

t the bo

rrower d

efaul

. T

al colla

teral f

Con

sume

, Pri

vate and B

usin

ess B

ankin

g has inc

reas

to $1

03 billon (2020: $10

0 billon

) d

ue to an in

creas

e in

Mortgages and Secured wealth

produ

cts.

Sta

ge 2 colla

teral r

educe

d by $2.

9 bi

llon to $

1 b

illon

, due to a

dec

reas

e in Cor

porat

e, Com

mercial a

nd Inst

itut

onal B

ankin

and Cons

umer

, Private and Bu

siness Bank

ing loan balances

otal col

latera

l for Ce

ntral an

d othe

r items i

ncrea

sed by

3 billon to $

6.4 bil

lon comp

ared w

ith 2020 due to an

incr

ease i

n lendin

g unde

r revers

e repu

rchas

e agree

ment

Col

late

ral he

ld on lo

ans a

nd advan

ces

The t

able b

elow det

ails col

latera

l held ag

ainst e

xpos

ures

, sepa

ratel

y discl

osng st

age 2 and s

tage 3 ex

posu

re and

corresponding collatera

Amortised cost

2021

Net amount

out

standing

Collateral

Net e

xposure

$millon

age 2

ﬁnancal

assets

$millon

Credit-

impared

ﬁnancal

assets

$millon

age 2

ﬁnancal

assets

$millon

Credit-

impared

ﬁnancal

assets

$millon

age 2

ﬁnancal

assets

$millon

Credit-

impared

ﬁnancal

asset

$millon

Corp

orate, Commercial &

Institu

tonal Banking

183,784

15,053

,414

,077

805

897

nsum

, Pr

ivat

e &

Business Banking

36,518

1,738

779

1,04

33,7

138

ntral & o

ther i

tems

549

110

–

381

–

16,168

110

–

,85

,90

3,481

138,564

,12

1,4

4,2

0,7

,03

Amortised cost

2020 (Rest

ate

Net amount

outstanding

Collateral

Net exposure

otal

$millo

Stage 2

ﬁnancal

assets

$millo

impare

ﬁnancal

assets

$millo

otal

$millo

Stage 2

ﬁnancal

assets

$millo

impare

ﬁnancal

assets

$millo

otal

$millo

Stage 2

ﬁnancal

assets

$millo

impare

ﬁnancal

assets

$millo

Corp

orate, Commercial &

Institu

tonal Banking

1, 3

042

,063

802

nsum

, Pr

ivat

e &

Business Banking

2,406

831

392

1,677

,70

729

188

ntral & o

ther i

tems

–

,05

–

326,0

,269

,87

706

194

,21

ncl

ude

s loan

s and a

dvan

ces t

o ban

just

ed fo

r over-co

llat

era

lisa

ton b

ed on t

he dra

wn an

d und

raw

n com

pon

ent

s of ex

pos

ure

llow

ing t

he G

roup’s chan

ge in o

rgan

isa

ton

al st

ruc

tur

e, the

re ha

s be

en an in

teg

rat

on of C

orp

orat

e & Ins

tit

ut

onal B

ank

ing a

nd Co

mme

rcia

l Bank

ing t

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng an

d Priv

ate B

ank

ing an

d Reta

il Ban

kin

g to Co

nsu

mer, Pr

ivat

e & Bus

ine

ss Ba

nki

ng. Pr

ior p

eri

od ha

s be

en res

tat

Collateral – Cor

porate, Commercial and Institutonal

Banking (

audite

Collateral held

against Corp

orate

, Commercial and

Ins

titu

tonal B

ankin

g expo

sures a

moun

ted to $29 b

illon.

Collateral tak

en for longer

-term and sub-in

vestment grade

cor

porat

e loan

s improved t

o 49 per cent (2020: 4

6 per cen

Our under

writng standa

rds encourage ta

ing

specifc

char

ges on a

sset

s and we co

nsis

tentl

y see

k high-qu

alit

inv

stment

-grade collateral.

75 p

er cent of t

angibl

e collat

eral (2020: 82 per cen

) he

comp

rise

s physica

l ass

ets o

r is prop

ert

y ba

sed

, with t

rem

ainder l

argel

y in cash an

d investm

ent se

curit

es. T

reduction in

tangible col

lateral is due to decrease i

n propert

collateral from repay

ments in Asia. O

erall collateral

rem

ained l

argel

y ﬂat at $29 bil

lon as th

e decre

ase in t

angibl

coll

ateral h

eld th

at compr

ise

s physical a

sse

ts or i

s prope

sed, wa

s off

set by in

crea

ses in ca

sh and inves

tment

curit

es by $1.4 b

illon, an

d in ﬁnan

cal guara

ntee an

ins

urance by $

1 b

illon.

Non-tangible coll

ateral, such as guarante

es and standby

letters of credit, is also

held against c

porate e

posures,

alth

ough t

he ﬁnan

cal eff

ect of t

his t

ype o

f collat

eral is l

ess

signﬁc

ant in ter

ms of re

coverie

s. Howeve

, thi

s is cons

idere

whe

n dete

rminn

g the pro

babilt

y of d

efau

lt and ot

her

credit

-related factors. Collateral is also

held against off

balance

sheet exposures, includ

ng undrawn comm

itments

and trade-rela

ted instrument

224

Standard Chartered

– An

nual Re

por

t 2021

sk r

evi

Risk proﬁle

Corporate, Commercial and I

stitutonal Banking (

restat

)

Amortised cost

2021

$millon

2020

$millo

Maximum exposur

183,784

Prop

ert

10,589

12,

872

Plan

t, ma

chine

y and ot

her st

ock

,411

1,5

Cash

,06

Rev

se repos

,042

A- to A

438

BBB- to

BBB+

483

Unrated

437

992

Fina

ncal guara

nte

and insurance

616

470

Commo

dites

198

222

Ships and aircraft

5,0

al value o

f coll

ater

,414

Net e

xposure

370

djus

ted f

or ove

coll

ater

ali

sat

on ba

sed o

n the d

raw

n and u

ndra

wn co

mpo

nen

ts o

f exp

osur

llow

ing t

he Gr

oup’s chan

ge in or

gan

isat

on

al str

ture

, the

re ha

s bee

n an int

egr

ato

n of Co

orat

e & Ins

tit

uto

nal B

ank

ing an

d Co

mmer

cial B

ank

ing t

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng. Pr

ior p

eri

od ha

s be

en re

stat

Collateral – Consumer

, P

rivate and Business Banking (

dited)

In Co

nsum

, Pr

ivate an

d Busin

ess B

ankin

g, 86 p

er cent o

f the po

rtf

olio is f

ully s

ecure

d (202

0: 86 p

er cent)

The f

ollowi

ng tabl

e prese

nts a

n analy

sis of lo

ans to in

dvid

uals by pr

oduct

; split b

ween f

ull

y secur

ed, pa

rtia

lly se

cured

and unsecured.

Amortised cost

2021

2020

Ful

secured

$millon

Partially

secured

$millon

Unsecured

$millon

Full

secured

$millo

Partially

secured

$millo

Unsecure

$millo

otal

$millo

Maximum exposur

117

129

329

18,06

136,518

111

112

Loans to

indviduals

Mortgages

,222

–

,222

597

–

,59

CCPL

150

–

171

–

Auto

–

536

–

536

Secured

wealth

products

495

–

495

–

Other

5,720

329

1,029

,078

300

ota

l collateral

100,

Net exposure

33,7

,70

Percentage of

tal

loan

13%

oll

ate

ral val

ues a

re adj

ust

ed wh

ere a

ppro

pri

ate i

n acco

rdan

ce wi

th ou

r ris

k mit

gat

ion p

olic

y an

d for t

he ef

fec

t of over-co

lla

tera

lis

ato

oun

ts n

et of EC

225

Standard Chartered

– Ann

ual Rep

ort 202

sk rev

iew and C

api

tal r

eview

Mort

gage loan

-to

value rat

ios by geography (

audite

Loan-t

o-value (L

V) rat

ios me

asur

e the rat

io of th

e curre

nt mor

tgag

e out

stand

ing to th

e curr

ent fair val

ue of th

e prope

rti

es on

whi

ch they are s

ecur

ed.

In mo

rtga

ges

, the valu

e of prop

ert

y he

ld as se

curit

y s

ignﬁcant

ly excee

ds pri

ncpal ou

tandin

g of the m

ortg

age lo

ans.

The a

verage L

V of th

e overall mo

rtga

ge por

tfol

io redu

ced f

rom 45 per ce

nt in 2020 to 4

1 p

er cent in 2021

. Hong Kon

g, whic

repr

esen

ts 33 p

er cent o

f the mo

rtg

age po

rtfo

lio, ha

s an averag

e L

V of 43

.8 pe

r cent

. All of ou

r othe

r key market

s cont

inue

to ha

ve low por

tfo

lio L

, (Korea, S

ingap

ore and T

aiwa

n at 35.

2 per cen

t, 43

.2 pe

r cent an

d 48.

8 per ce

nt resp

ecti

vely

An an

alysi

s of L

V ra

tios by ge

ograp

hy for the m

ort

gage p

ortf

olio is p

resen

ted in t

he tabl

e below.

Amortised cost

2021

Asia

Gross

Africa &

Middle East

Gross

Europe &

Americas

Gross

Les

s than 5

0 per cen

68.2

16.8

66.4

50 pe

r cent t

o 59 per cen

11.6

18.6

60 p

er cent t

o 69 per ce

70 per cen

t to 79 pe

r cent

80 p

er cent t

o 89 per ce

8.7

90 pe

r cent t

o 99 pe

r cent

4.8

–

0 per ce

nt and gr

eate

0.1

3.8

–

verage portfolio loan-

to-value

0.5

0.8

Loa

ns to i

ndv

idua

ls – mo

rtg

age

s ($mil

lon)

85,7

1,651

1,806

,222

Amortised cost

2020 (Rest

ate

Asia

Gross

ric

a &

Middle E

ast

Gross

Europe &

Americas

Gross

otal

Gross

Les

s than 5

0 per cen

16.4

50 pe

r cent t

o 59 per cen

15.0

8.0

15.4

60 p

er cent t

o 69 per ce

10.

11.

70 per cen

t to 79 pe

r cent

8.6

20.7

21.7

80 p

er cent t

o 89 per ce

2.6

3.7

2.7

90 pe

r cent t

o 99 pe

r cent

6.0

0.6

0 per ce

nt and gr

eate

–

0.6

0.3

verage portfolio loan-

to-value

4.7

60.4

4.7

Loa

ns to i

ndv

idua

ls – mo

rtg

age

s ($mil

lon)

871

156

597

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Gre

ate

r Chin

a & Nor

th A

sia an

d ASE

AN & S

out

h As

ia to A

sia

. Prio

period h

as been

restated

Collateral and other credit

enhancement

s possessed or called upon

(

audite

The G

roup o

btain

s ass

ets by t

aking p

oss

essi

on of coll

atera

l or calling u

pon ot

her cre

dit enh

ancem

ent

s (

such a

s guaran

tees

Repo

sses

sed p

roper

tie

s are sol

d in an orde

rly fa

shion

. Wher

e the pro

ceed

s are in exces

s of th

e out

stand

ing loa

n balan

ce the

exces

s is ret

urne

d to the b

orrowe

Cer

tain e

quit

y se

curit

es acq

uired m

ay be he

ld by the G

roup f

or investm

ent pu

rpos

es and ar

e clas

sif

ed as f

air value t

hroug

proﬁt o

r loss

, and th

e relat

ed lo

an writ

ten of

. Th

e carr

ing valu

e of colla

teral p

osse

sse

d and hel

d by the G

roup is $

11.8 m

illon

(2020: $23.

2 millo

)

2021

$millon

2020

$millo

Propert

, plant

and equipment

5.8

18.

Guarantees

Other

0.0

0.2

11.8

23.2

226

Standard Chartered

– Annu

al Rep

ort 202

sk r

evi

Risk proﬁle

her Cre

dit Risk mit

gation (

audi

ted)

her for

ms of Cr

edit Ris

k mitga

tion ar

e set ou

t below.

Credit default swaps

The G

roup h

as ent

ered in

to cred

it defa

ult swap

s for po

rtfo

lio

management purposes

, referenci

loan asset

with a

not

ional val

ue of $12

1 b

illon (2020: $10.

5 billon

). Thes

e credi

def

ault s

waps are acc

ounte

d for as ﬁ

nancal g

uarant

ees as

per I

FRS 9 as th

ey will on

ly reimb

urs

e the h

older f

or an incu

rred

los

s on an un

derl

ying d

ebt ins

tru

ment

. The G

roup con

tinu

to ho

ld the u

nder

lyin

g asse

ts r

eferen

ced in t

he cred

it defa

ult

swap

s and it con

tinu

es to be ex

pos

ed to rel

ated Cr

edit Ri

and Fo

reign E

xchan

ge Rate Ris

k on the

se ass

Credit

linked

notes

The G

roup h

as is

sued cr

edit lin

ked note

s for po

rtf

olio

management purposes

, referenci

loan asset

with a

not

ional val

ue of $1

0.0 billon (2020: $8.0 bil

lon

). The Gro

cont

inue

s to hold t

he und

erly

ing as

set

s for w

hich th

e credit

linked

notes provide mitga

tion.

Deriv

v

e ﬁnancal instruments

The Group enters into master netting agreements

, which

the eve

nt of def

ault re

sult in a si

ngle am

ount owe

d by or to

the c

ounte

rpar

y thro

ugh net

ting t

he sum of t

he po

sitve an

negative mark

-to-mark

et va

lues of appli

cable derivatve

tran

sact

ions

. Thes

e are set o

ut in mo

re deta

il under D

eri

vatve

ﬁnanca

l instr

uments Credit

Risk mitga

ion

(page 248

Off-balanc

e sheet exposures

For ce

rtain t

pes of e

xpos

ure, su

ch as let

ter

s of cred

it and

gua

rante

es, th

e Grou

p obta

ins coll

ateral s

uch as ca

dep

endin

g on inte

rnal Cr

edit Ris

k ass

essm

ent

s, as we

as in t

he case o

f lett

ers o

f credit h

oldin

g legal t

itle t

o the

underlying asset

s should a

default take plac

Other portfolio analysis

Thi

s secti

on provi

des mat

uri

ty a

nalys

is by cred

it qualit

y by

indust

ry and ind

ustr

y and retail product

s analysis by region

turi

ty an

alysi

s of loa

ns an

d advanc

es by clie

nt seg

ment

Loan

s and adva

nces to t

he Cor

pora

te, Co

mmerci

al and

Institutonal Banking segment remain predominantly

sho

-ter

m, wit

h $95.

5 billon or 6

6 per c

ent (2020: $84

.6 billo

or 61 per cen

) ma

tur

ing in les

s than o

ne year. 98 per cen

(2020: 9

4 pe

r cent) of loan

s to bank

s mat

ure in le

ss th

an one

year, an incre

ase co

mpare

d with 2020 as ne

t expo

sures

incr

ease

d by $1.

8 billon

. Shor

ter ma

turi

tes gi

ve us the

ﬂexi

blit

y to res

pond p

rompt

ly to even

ts an

d rebal

ance or

red

uce our e

xpos

ure to cli

ent

s or sec

tors t

hat are f

acing

increas

ed pressure or un

certaint

The C

onsu

mer, Private a

nd Bus

ines

s Banki

ng sho

-ter

m book

of on

e year or le

ss and l

ong-te

rm bo

ok of over ﬁve ye

ars are

stab

le at 26 pe

r cent (2020: 25 pe

r cent) and 62 per cen

(2020: 6

2 p

er cent) of th

e total p

ort

folio re

spec

tivel

Amortised cost

2021

e year o

r les

$millon

e to ﬁve ye

ars

$millon

Ove

r ﬁve ye

ars

$millon

rpor

ate, C

omme

rcial & In

stit

uto

nal Ba

nkin

95,

454

36,

953

,299

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

,99

16,7

85,093

137

,86

ntral & o

ther i

tems

22,3

224

s loan

s and a

dvance

s to cu

sto

mer

153,7

53,

960

399

304,122

Impairm

ent provisons

(5,

057

)

(135)

(

Net loans

and adv

ances to customers

706

53,4

96,

8,4

t loan

s and a

dvance

s to ba

nks

955

154

44,383

Amortised cost

2020 (Rest

ate

e year o

r les

$millo

e to ﬁve y

ear

$millo

Ove

r ﬁve years

$millo

otal

$millo

rpor

ate, C

omme

rcial & In

stit

uto

nal Ba

nkin

84,5

,13

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

,037

16,00

130,

513

ntral & o

ther i

tems

18,7

s loan

s and a

dvance

s to cu

sto

mer

136

,295

,578

312

Impairm

ent provisons

(

)

(

)

Net loans

and adv

ances to customers

130,

56,835

1,699

t loan

s and a

dvance

s to ba

nks

41,

,821

44,34

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng an

d Priv

ate B

ank

ing an

d Reta

il Ban

kin

g to Co

nsu

mer, Pr

ivat

e & Bus

ine

ss Ba

nki

ng. Pr

ior p

eri

od ha

s be

en res

tat

227

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

edit q

ualit

y by ind

ust

Loans and ad

ces

Thi

s secti

on provi

des an an

alysi

s of the G

roup

’

s a

mort

ise

d cost po

rtf

olio by ind

ustr

y on a g

ross

, tota

l credit i

mparm

ent an

net b

asis

From an in

dustr

y per

spe

ctive, g

ross lo

ans an

d advanc

es incre

ase

d by $15.

8 billon t

o $304

1 bil

lon comp

ared w

ith 31 De

cembe

2020

, of wh

ich $8

.5 bill

on was fr

om Cor

pora

te, Com

mercia

l and Ins

titu

tonal B

ankin

g and th

e Cent

ral and ot

her it

ems

gment

s, an

d $7

.4 bi

llon in Co

nsume

, Pri

vate an

d Busin

ess B

ankin

Sta

ge 1 loan

s incre

ase

d by $23 bill

on to $279

2 billon

. Of the $2

3 billo

n, $15 b

illon were co

rpo

rate lo

ans, m

ainly d

ue to new

len

ding in Ma

nufac

turi

ng and pr

imar

ly stag

e tran

sfer

s in the T

ran

spor

t, te

lecom a

nd util

ties

, Comm

ercial re

al esta

te and

Man

ufact

urin

g secto

. Cons

umer, Privat

e and Bus

ines

s Bank

ing incr

ease

d by $8 bill

on, mai

nly fr

om the m

ortg

age bo

and s

ecure

d wealt

h produ

cts f

rom new o

rigna

tion

s largel

y fro

m Asia

. Stage 2 l

oans d

ecre

ased by $

6 billon l

argel

y due to

Cor

por

ate, Co

mmerci

al and Ins

titu

tonal B

anki

ng, in p

art du

e to tran

sfer

s to sta

ge 1. St

age 3 lo

ans re

duced by $

1 b

illon to

1 bil

lon due t

o Corp

orate

, Comm

ercial an

d Inst

ituto

nal Ba

nking d

ebt sal

es and re

pay

ment

s in As

ia and Af

rica a

nd the

Middle East regions.

2021

age 1

age 2

age 3

Gross

balance

$millon

credit

impar-

ment

$millon

Net

carrying

amount

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

carrying

amount

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

carrying

amount

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

carrying

amount

$millon

Indust

ry:

Energy

10,4

(19)

0,4

(

)

,99

998

(719)

279

,519

(

705

Manufacturing

792

(9)

,78

,15

(

562

)

290

25,825

)

25,

224

Fina

ncng, insuranc

and non

-banking

24,

380

(9)

24,

257

(

12)

1,245

268

07)

905

28)

sport, telecom

and util

ties

(5)

,773

,92

(51)

,875

89)

18,6

(345)

18,

325

Food and

household

produ

cts

,093

(2)

8,0

721

(

695

380

(

)

104

(

890

Commercial

real estate

,680

)

787

(

75)

712

833

(335)

498

20,

)

Minng

and quarr

ying

793

(3)

790

480

272

(

167

)

105

5,5

(

5,355

Consumer durables

(3)

407

(9)

398

425

(

(35

Construction

279

(3)

(

19)

487

290

699

3,0

rading companies

and distrbutors

(1)

117

(8)

109

35)

,404

(

,260

Government

26,588

(2)

26,586

678

(

154

(8)

(11)

Other

5,757

(4)

5,753

801

(

787

316

(

94)

122

(212)

662

Retail

Products:

Mortgage

,987

(

,222

CCP

L and other

unsecured lending

16,880

78)

(

132)

438

395

(

Auto

541

(1)

540

–

543

(

Secured

wealth

produ

cts

067

(61

)

,006

(

10)

297

483

(29

192

,857

(

362

)

495

Other

(8)

,888

180

(21)

(95)

,078

otal v

alu

(

customers)

)

278,705

(

325

,095

)

3,438

304

(

298,468

ncl

ude

s rever

se r

epu

rcha

se ag

ree

men

ts an

d oth

er si

mlar s

ecu

red l

end

ing h

eld at a

mor

tis

ed co

st of $

31 mil

lon

228

Standard Chartered

– Annu

al Repo

rt 2021

sk r

evi

Risk proﬁle

2020

Stage 1

Stage 2

Stage 3

otal

Gross

balance

$millo

otal

credit

impar-

ment

$millo

Net

carr

ying

amount

$millo

Gross

balance

$millo

otal

credit

impar-

ment

$millo

Net

carr

ying

amount

$millo

Gross

balance

$millo

otal

credit

impar-

ment

$millo

Net

carr

ying

amount

$millo

Gross

balance

$millo

otal

credit

impar-

ment

$millo

Net

carr

ying

amount

$millo

Indust

ry:

Energy

10,0

(25)

10,02

889

(87

)

,036

(777)

12,0

Manufacturing

20,16

(

13)

20,151

)

698

1,5

(

42)

(

Fina

ncng, insuranc

and non

-banking

(8)

3,408

834

(7)

827

310

(

209)

560

(

sport, telecom

and util

ties

,77

(

12)

11,

759

071

(

,947

)

568

)

Food and

household

produ

cts

625

(7)

752

(

728

529

(

183

906

(37

)

Commercial

real estate

15,834

3,0

(

,034

408

(

222

Minng

and quarr

ying

4,723

)

717

887

286

82)

104

(207

)

689

Consumer durables

,689

(3)

4,6

967

(

931

601

)

188

257

)

,805

Construction

571

(

2,568

(28

)

821

067

(527)

540

,487

(

rading companies

and distrbutors

(1)

314

(7)

307

37)

475

(245

)

1,2

Government

3,0

(1)

,098

1,0

(3)

061

(11)

(15)

Other

314

(4)

4,310

1,546

(

493

316

(207

)

109

(

Retail

Products:

Mortgage

(

507

(

,47

09)

384

85,860

(

597

CCP

L and other

unsecured lending

708

(363

)

(20

580

(283)

)

Auto

531

(1)

530

–

537

(1)

536

Secured

wealth

produ

cts

(

52)

319

(9)

310

466

(

253

20,160

(

)

Other

(4)

(1)

(

,013

(31)

otal v

alu

(

customers)

256,437

(

38)

)

873

312

281,699

ncl

ude

s rever

se r

epu

rcha

se ag

ree

men

ts an

d oth

er si

mlar s

ecu

red l

end

ing h

eld at a

mor

tis

ed co

st of $2

,919 mi

llo

Ind

ust

y and Ret

ail Pro

duc

ts an

alysi

s of lo

ans an

d advanc

geo

graphic

region

Thi

s secti

on provi

des an an

alysi

s of the G

roup

’

s a

mort

ise

d cost

loa

n port

folio, n

et of pr

ovison

s, by ind

ustr

y an

d regio

In th

e Corp

orat

e, Comm

ercial an

d Inst

itut

onal Ba

nking

gment

, our la

rgest i

ndust

y expo

sures a

re to Finan

cng,

insurance and no

n-banking, Govern

ment and Manufactu

ring

ctor

s, wit

h each co

nsti

tutn

g at lea

st 15 per c

ent of

Corp

orate, Commercial and In

stitutonal B

anking loans and

advances to

customer

Financng, insurance and no

bankin

g industr

y client

s are

mostly investment

-grade insttutions and this lending

for

ms par

t of th

e liqudit

y m

anage

ment o

f the Gr

oup. Th

Manufacturing sector group

is spread across a div

erse range

of industres, includ

ng automobiles and components, capital

good

s, pharmace

uticals, biot

ech and life sciences, te

chnology

hard

ware and e

quipm

ent

, chemic

als, p

aper pr

oduct

s and

pac

kaging, w

ith le

nding s

pread ove

r 3,5

00 clie

nts

Loan

s and adva

nces to t

he Ener

gy se

ctor rem

ained l

argel

stab

le at $13

.5 bil

lon or 8 pe

r cent (2020: $13.0 billo

n or 8 per

cent) of tot

al loan

s and ad

vances t

o Corp

orat

e, Comm

ercial

and In

stit

uton

al Bank

ing. T

he Energ

y sect

or len

ding is sp

read

acro

ss ﬁve su

b-se

ctor

s and over 190 cl

ient

The G

roup p

rovide

s loan

s to comm

ercial re

al est

ate

coun

terp

art

ies of $20 billo

n, whi

ch repre

sent

s 7 per c

ent of

tot

al custo

mer lo

ans and a

dvance

s. In to

tal, $

8.4 billo

n of this

len

ding is t

o counte

rpar

tie

s where t

he so

urce of re

pay

ment is

sub

stant

ially de

rive

d from r

ental or s

ale of re

al est

ate and i

cured by re

al est

ate coll

ateral

. The rem

ainng co

mmerci

rea

l estat

e loans c

ompr

ise wor

king ca

pital lo

ans to re

est

ate cor

pora

tes, l

oans w

ith non

-prope

y coll

ateral

uns

ecur

ed loan

s and lo

ans to re

al esta

te ent

ites of d

iver

sﬁed

cong

lomer

ates

. The ave

rage L

V ratio of t

he com

mercial r

eal

est

ate po

rtfo

lio has d

ecre

ased t

o 50 per ce

nt, co

mpare

wit

h 51 per cen

t in 202

0. T

he prop

ort

ion of lo

ans wi

th an

TV gr

eater t

han 80 p

er cent h

as dec

reas

ed to 2 pe

r cent

comp

ared w

ith 4 pe

r cent in 2020. The Chin

a Comm

ercial

Real E

stat

e port

folio i

s being c

lose

ly moni

tore

d and a

man

ageme

nt overl

ay of $95 mil

lon has b

een ta

en to

acco

unt for r

isk

s not reﬂ

ecte

d in the ECL m

odel

The Mortgage portfolio continues to

be the largest

ortion of

the Re

tail Prod

uct

s por

tfoli

o, at $89

.4 billo

n. CCPL and o

ther

unsecured lending remained

largely stable at $17

bill

229

Standard Chartered

– Ann

ual Rep

t 2021

sk rev

iew and C

api

tal r

eview

Amortised cost

2021

2020

(Res

tate

Asia

$millon

Africa &

Middle East

$millon

Europe &

Americas

$millon

Asia

$millo

ric

a &

Middle E

ast

$millo

Europe &

Americas

$millo

otal

$millo

Indust

ry:

Energy

265

,721

3,719

705

,879

,717

2,0

Manufacturing

0,7

1,751

702

5,224

,89

202

260

Fina

ncng, insuranc

e and non-

banking

905

588

278

1,01

,04

nsp

ort, telecom

and utilties

218

2,4

18,

10,

5,21

1,6

Food and

household products

,49

2,3

,03

,890

Commercial

real estate

1,0

649

,94

1,7

1,39

Minng

and quarr

ying

3,833

572

950

355

4,0

892

,689

Consumer durables

398

403

,249

5,805

Construction

1,839

400

053

2,608

940

381

rad

ing companies and

distrbutor

,047

1,260

908

192

130

1,2

Government

,98

305

,416

4,880

Other

4,681

670

311

928

1,214

Retail

Products:

Mortgages

85,7

1,651

806

,222

,87

2,1

597

CCP

L and other

secured lending

5,09

100

,019

Auto

500

–

542

481

–

536

Secured

wealth

products

966

,495

383

Other

–

,078

,426

556

–

Net loans

and adv

ances to customers

245,

24,792

28,4

298,468

,20

590

281,6

t loan

s and a

dvance

s to ba

nks

30,

301

,96

4,383

,545

44,34

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Gre

ate

r Chin

a & Nor

th A

sia an

d ASE

AN & S

out

h As

ia to A

sia

. Prio

period h

as been

restated

ulnerable sectors

ulnerable sectors are those that

Group considers to

be m

ost at ri

sk fro

m CO

VID

19 and vo

latil

e energ

y price

and we

continue to monitor exposures to

thes

sectors

part

icularly caref

ully

otal net on balance sheet

exposure to vulnerable

ectors

incr

ease

d by $0.5 bi

llon to $3

3 billon co

mpar

ed to

31 De

cembe

r 20

20 and th

e tota

l net on an

d off

-b

alanc

she

et exp

osure i

ncrea

sed t

o 28 per cen

t (20

20: 2

7 per cen

)

of th

e total n

et exp

osure i

n Cor

porat

e, Comm

ercial an

Ins

titu

tonal B

ankin

g. The i

ncrea

se is lar

gely d

ue to high

level

s of undr

awn com

mitme

s and ﬁnan

cal guara

ntee

part

icularly in the Com

mercial real estate and Co

mmodit

traders sectors respectively

Sta

ge 2 loan

s decr

ease

d by $1.9 billon of lo

ans to v

ulne

rable

ctor

s, as co

mpare

d to 31 De

cembe

r 20

20. Th

is was pr

imarl

dri

ven by a decr

eas

e in Comm

ercial re

al est

ate por

tfo

lio due

to transfers to stage 1.

Sta

ge 3 loan

s to vu

lnerab

le sec

tor

s incre

ased by $0.

6 billon

comp

ared t

o 31 Dece

mber 2020, mainl

y due to C

omme

rcial

rea

l estat

e and Oil an

d gas se

ctor

s fro

m new down

grade

from ‘High risk

’ acc

unts.

The G

roup h

as net e

xpos

ure of $

4.0 billo

n (20

20: $

5 billon

)

to Chi

na Comm

ercial Re

al Est

ate cou

nter

part

ies wh

ich are

pri

marl

y booke

d in Hong Kon

g and Chin

a. $3.1 billon o

f this

exp

osure i

s to prop

ert

y deve

lope

rs wh

ose ca

shﬂows h

ave

been particularly impacted by

cy changes to dele

verage

the p

rope

y sect

or and $2

1 bil

lon of th

ese are o

n purel

precautionar

y a

nd non-purely

pre

cautiona

y early alert.

As a r

esult o

f ongoi

ng unce

rtain

tes af

fect

ing thi

s sect

the G

roup h

as taken a $95 m

illon (2020: $nil) ma

nagem

ent

overl

ay on cre

dit imp

arme

nt for th

e expo

sures o

n earl

y aler

at 31 D

ecemb

er 2021 (

e page 240)

. Th

e Grou

p is fu

rth

indr

ectly e

xpos

ed to Ch

ina Com

mercia

l Real Es

tate th

rough

s ass

ociate i

nvestme

nt in Chin

a Bohai B

ank

. Refer to N

ote 32

Inv

stments in subsidary undertaking

s, jo

nt ventures and

asso

ciates.

230

Standard Chartered

– Ann

ual Re

por

t 2021

sk r

evi

Risk proﬁle

Maximum exposure

Amortised cost

2021

Maximum

on-balance

sheet

exposure

(net o

f cr

edit

imparment)

$millon

Collateral

$millon

Net

on-balance

sheet

exposure

$millon

Undrawn

commitments

(net o

f cr

edit

imparment)

$millon

Financal

guarantees

(net o

f cr

edit

imparment)

$millon

Net

off-balance

sheet

exposure

$millon

tal o

n &

off-balance

sheet net

exposure

$millon

Industr

t

n¹

3,458

,03

1,425

2,345

Commodit

raders

,732

8,4

2,43

6,832

Met

als & mi

nng

616

450

,16

387

637

4,024

Commercial

real estate

,557

291

20,0

Hotels & tourism

2,39

789

1,601

1,363

121

1,484

3,08

Oil & g

826

1,02

797

,01

14,

855

20,

652

44,869

,853

33,0

325

473

otal

Corporate, Commercial &

Instit

utonal Banking

294

,10

,666

,072

otal

roup

342

851

138,56

04,2

158,421

58,

291

16,712

420

999

Amortised cost

2020 (Rest

ate

Maximum

on-balance

sheet

exposure

(

et of c

red

imparment

)

$millo

Collateral

$millo

Net

on-balance

sheet

exposure

$millo

Undrawn

commitments

(

et of c

red

imparment

)

$millo

Financal

guarantee

(

et of c

red

imparment

)

$millo

Net

off-

balance

sheet

exposure

$millo

al on &

off-

balance

sheet net

exposure

$millo

Industr

t

n¹ ²

255

321

531

,852

,001

Commodit

raders

8,66

318

8,3

,18

,459

6,6

Met

als & mi

nng

513

2,850

886

3,736

Commercial

real estate

,004

,08

,283

313

596

Hotels & tourism

,557

1,1

110

295

Oil & g

,032

20,08

,08

32,564

160

11,

886

33,0

,61

otal

Corporate, Commercial &

Instit

utonal Banking

133,45

896

2,0

46,725

8,7

,62

otal

roup

326

,04

94,

53,28

582

206,868

s a re

sult o

f ind

ust

ry c

las

sif

c

atio

n cha

nge

s in 2021

, FY 2020 o

n-ba

lanc

e she

et ex

pos

ure h

as be

en re

stat

ed by $

416 mil

lon to m

ake th

e num

ber

s com

par

abl

In a

ddi

ton t

o the a

via

ton s

ect

or lo

an exp

ures

, th

e Gro

up own

s $3

1 b

ill

on (31 D

ece

mbe

r 2020: $3

9 bi

llo

) of a

ircr

aft u

nde

r ope

rat

ing le

es. Re

fer t

o pag

e 383

– Operati

ng lease assets

231

Standard Chartered

– Ann

ual Rep

t 2021

sk rev

iew and C

api

tal r

eview

Loa

ns and a

dvance

s by sta

2021

age 1

age 2

age 3

Gross

balance

$millon

credit

impar-

ment

$millon

Net

carrying

amount

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

carrying

amount

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

carrying

amount

$millon

Gross

balance

$millon

credit

impar-

ment

$millon

Net

carrying

amount

$millon

Indust

ry:

t

–

239

533

(

75)

3,458

Commodit

raders

8,482

)

8,47

195

(5)

190

713

)

732

Met

als & mi

nng

3,0

(1)

,082

450

(17

)

433

219

18)

101

,752

(

616

Commercial

real estate

,680

)

787

(

75)

712

833

(335)

498

20,

)

Hotels & tourism

(1)

561

(9)

182

116

,466

(

76)

2,39

Oil & g

999

(5)

595

(

561

(215)

271

(

6,82

,92

(

36,

872

,92

51)

,772

672

(

)

1,2

46,

(

652)

44,869

otal

Corporate,

Commercial &

Instit

utonal Banking

122,3

03)

265

,818

41)

,47

,52

(

61)

,659

(

305)

otal

roup

,95

)

(528)

6,9

(

4,668)

3,481

48,532

(5,681)

42,

2020 (Rest

ate

Stage 1

Stage 2

Stage 3

otal

Gross

balance

$millo

otal

credit

impar-

ment

$millo

Net

carr

ying

amount

$millo

Gross

balance

$millo

otal

credit

impar-

ment

$millo

Net

carr

ying

amount

$millo

Gross

balance

$millo

otal

credit

impar-

ment

$millo

Net

carr

ying

amount

$millo

Gross

balance

$millo

otal

credit

impar-

ment

$millo

Net

carr

ying

amount

$millo

Indust

ry:

t

n¹

,19

(1)

(

1,883

258

(

78)

180

360

(105

)

4,2

Commodit

raders

(3)

,06

139

)

8,6

Met

als & mi

nng

(

,12

659

210

12)

,015

(

Commercial

real estate

15,834

3,0

(

,034

408

(

222

Hotels & tourism

318

(

1,316

)

,624

)

,557

Oil & g

5,650

)

5,6

1,548

)

479

(

75)

203

(

29)

8,8

(17

8,666

2,08

88)

otal

Corporate,

Commercial &

Instit

utonal Banking

(95

)

0,898

20,00

)

(

4,610

)

,042

(

,19

133,

457

otal

roup

00,452

(

548)

299

904

,010

(

)

,269

(

)

873

)

326

,04

s a re

sult o

f ind

ust

ry c

las

sif

c

atio

n cha

nge

s in 2021

, FY 2020 g

ros

s has b

een r

est

ated b

y $416 mi

llon (S

tag

e 1 $120 mi

llo

n and S

tage 2 $

296 mil

lon) to ma

ke the

numbers comparable

Loa

ns and a

dvance

s by reg

ion (net of c

red

it impa

rme

nt)

2021

2020

(Res

tate

Asia

$millon

Africa &

Middle East

$millon

Europe &

Americas

$millon

Asia

$millo

ric

a &

Middle E

ast

$millo

Europe &

Americas

$millo

otal

$millo

Indust

ry:

t

1,356

214

888

3,458

1,795

,49

4,2

Commodit

raders

352

660

720

8,7

617

8,664

Met

als & mi

nng

,736

388

,61

2,825

597

460

Commercial

real estate

1,0

649

,94

1,7

1,39

Hotel & tourism

1,464

397

2,3

1,69

512

557

Oil & g

,248

1,808

6,82

334

,036

829

,059

,98

4,86

30,

267

s a re

sult o

f ind

ust

ry c

las

sif

c

atio

n cha

nge

s in 2021

, FY 2020 h

as be

en re

sta

ted by $

416 mil

lon (Eu

rop

e &A

mer

ica

) to m

ake th

e num

ber

s com

par

able

llow

ing t

he Gr

oup’s chan

ge in or

gan

isat

on

al str

ture

, the

re ha

s bee

n an int

egr

ato

n of G

reat

er Ch

ina & No

h Asi

a and A

AN & So

uth A

sia t

o Asi

a. Pr

ior

period h

as been

restated

232

Standard Chartered

– Annu

al Rep

ort 202

sk r

evi

Risk proﬁle

edit q

ualit

y – lo

ans an

d advanc

Amortised cost

Credit

grade

2021

viat

on

Gross

$millon

Commodity

traders

Gross

$millon

Metals &

minng

Gross

$millon

Commercial

real esta

Gross

$millon

Hotels &

tourism

Gross

$millon

l & gas

Gross

$millon

Gross

$millon

Strong

896

878

1,730

731

,41

Satisfactor

257

,78

353

,892

0,80

Higher risk

141

151

200

108

633

Defaulted

713

219

833

182

486

672

otal gross balance

533

752

300

,466

521

Strong

–

(

–

(92)

–

(93)

Satisfactor

(8)

(5)

(

(21)

(4)

(

)

Higher risk

(3)

(4)

)

(6)

(

Defaulted

)

(

118)

(

335)

(215)

(

)

otal credit imparment

(75)

)

(

36)

)

(

76)

(

52)

Strong

0.0

0.0%

.0%

0.0%

Satisfactor

0.2

0.8%

Higher risk

.2%

.3%

.0%

Defaulted

.8%

1.0%

0.2

36.3%

.2%

Cov

er ratio

.2%

Credit

grade

2020 (Rest

ate

Aviaton

Gross

$millo

Commodit

traders

Gross

$millo

Metals &

minng

Gross

$millo

Commercial

real estate

Gross

$millo

Hotels &

tourism

Gross

$millo

Oil & g

Gross

$millo

otal

Gross

$millo

Strong

,406

,96

,055

696

,17

Satisfactor

2,540

3,554

423

110

1,6

,04

Higher risk

156

118

905

Defaulted

258

799

210

408

138

2,08

otal gross balance

4,3

4,0

,624

Strong

)

(1)

(9)

–

)

(

Satisfactor

(7)

(

(37

)

(

Higher risk

(

13)

(

)

(1)

(17

)

Defaulted

(

)

(

)

99)

82)

otal credit imparment

(105)

)

(

)

75)

Strong

0.0

.1%

0.0

0.1

Satisfactor

0.7%

.1%

.4%

Higher risk

.3%

.1%

1.2%

0.0%

0.8%

6.2%

4.2%

Defaulted

30.

.6%

53.

45.6

.1%

.4%

Cov

er ratio

.3%

1.2%

3.7%

s a re

sult o

f ind

ust

ry c

las

sif

c

atio

n cha

nge

s in 2021

, FY 2020 g

ros

s has b

een r

est

ated b

y $416 mi

llon (S

ati

sfa

ctor

y) to ma

ke the n

umb

ers c

omp

arab

Deb

t sec

urit

es an

d oth

er eli

gbl

e bills (audit

ed)

Thi

s secti

on provi

des f

urt

her det

ail on gro

ss deb

t secur

ite

s and tre

asur

y b

ills.

The s

tanda

rd credi

t ratin

gs use

d by the Gr

oup are t

hose u

sed by St

andar

d & Poor’s or it

s equ

ivalent

. Deb

t secu

rite

s held t

hat

have a s

hor

term ra

ting ar

e repor

ted a

gains

t the lon

g-ter

m rating o

f the is

suer. For se

curit

es th

at are unra

ted, t

he Gro

appl

ies an int

erna

l credit r

ating

, as des

crib

ed und

er the cr

edit rat

ing and m

eas

ureme

nt sect

ion (pa

ge 265).

otal gro

ss deb

t secu

rite

s and oth

er eligb

le bills i

ncrea

sed by $9

.8 b

illon to $

.8 bil

lon. Th

e incre

ase in h

olding

s of deb

curit

es and ot

her el

igble bil

ls is main

ly due t

o T

easu

y Market

s ut

ilsing e

xcess liq

udit

y fro

m the grow

th in th

e Grou

’

bal

ance she

. Of the t

otal in

creas

e, 82 per ce

nt is in sta

ge 1 wit

h the rem

ainng 1

8 per cen

t in stag

e 2. Mos

t secu

rite

s held ar

high

ly rate

d to mee

t liqudi

ty r

egul

ator

y re

quire

ment

. This ca

n be obs

ved in th

e incre

ase of s

tage 1 s

ecur

ites ra

ted A- and

above of $

4 billon.

233

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

ort

ise

d cos

t and F

VOCI

2021

2020

Gross

$millon

ECL

$millon

Net

$millon

Gross

$millo

ECL

$millo

Net

$millo

age 1

)

157

,285

(

AAA

5,9

(

23)

5,897

209

(

A- to AA+

,577

(8)

40,

0,37

(2)

40,

A- to A

23,

993

(3)

23,99

6,551

(

26,548

BBB- to

BBB+

,071

(27)

11,0

,58

12,

557

Low

er than BBB-

,12

(

,12

398

(1)

397

Unrated

4,668

)

4,663

(9)

age 2

315

)

5,273

506

(

,480

AAA

641

(7)

–

A- to AA+

592

(3)

–

A- to A

(1)

(

BBB- to

BBB+

(

10)

,69

(7)

2,686

Low

er than BBB-

809

(21)

788

(11)

404

Unrated

–

)

age 3

113

114

(

Low

er than BBB-

–

Unrated

113

114

(

58)

Gros

s balance

780

(175)

(

,796

tag

e 3 inc

lud

es $3

3 mill

on or

ign

ate

d cre

dit

-i

mpa

red d

ebt s

ecu

rit

es

VOCI in

str

ent

s are n

ot pr

ese

nte

d net o

f ECL. W

hile t

he pr

ese

nta

tio

n is on a ne

t ba

sis fo

r the t

abl

e, th

e tot

al net o

n-ba

lan

ce she

et am

oun

t is $162

,700 m

illo

(31 D

ece

mbe

r 2020: $15

2,8

61 mill

on)

. Re

fer t

o the A

nal

ysi

s of ﬁna

nca

l inst

men

t by sta

ge tab

le on p

age 20

IFRS 9 expect

ed credi

t loss me

thodo

logy (

audite

App

roa

ch for d

ete

rmin

ng expe

cte

d cre

dit lo

sse

Credit loss termi

nology

Component

Deﬁntion

Probabilty of

def

ault

(PD

)

The p

roba

bilt

y th

at a coun

terp

art

y w

ill def

ault

, over th

e next 12 m

onth

s fro

m the re

por

ting

dat

e (

sta

ge 1) or over t

he lif

etme o

f the pr

oduc

t (

sta

ge 2)

, in

corp

orat

ing th

e impa

ct of for

rd-

loo

kin

g econ

omic as

sum

ptio

ns tha

t have an e

ffe

ct on Cre

dit Ri

sk, s

uch as u

nemp

loyme

nt rate

and G

DP for

ecas

The P

D estim

ates w

ill ﬂu

ctuat

e in line w

ith t

he eco

nomi

c cycle

. The lif

etm

e (

or ter

m str

uctu

)

PDs ar

e bas

ed on st

atis

tcal mo

del

s, cali

brate

d usin

g hist

orca

l data an

d adju

sted t

o incor

por

ate

for

rd-looking

conomi

c assumptions

Loss giv

en default (L

)

The l

oss t

hat is e

xpe

cted t

o aris

e on def

ault

, inco

rpo

ratin

g the im

pact o

f for

ward-

look

ing

economic assumptions where relev

ant

hich

represent

s the d

ference between the

con

tract

ual ca

shﬂows d

ue and t

hos

e that t

he ban

k expe

s to rece

ive.

The G

rou

p esti

mate

s L

D bas

ed on th

e hist

y of re

cover

y rat

es and c

onsid

s the re

cover

of any co

llate

ral th

at is int

egra

l to the ﬁn

ancal a

sse

t, ta

king i

nto acc

ount f

ward-lo

oki

economic assumptions where relev

ant

Exposure at default (EAD

)

e expe

cted b

alan

ce she

et exp

osur

e at the t

ime of d

efau

lt, t

aking i

nto acc

ount e

xpe

cted

cha

nges ove

r the lif

etm

e of the e

xpos

ure. T

his inco

rpo

rate

s the im

pact o

f drawd

owns of

fac

iltie

s with l

imts

, rep

aym

ent

s of pr

incpa

l and int

eres

t, an

d amor

tis

aton

o deter

mine t

he exp

ecte

d credit l

oss

, thes

e compo

nent

s are mu

ltiple

d tog

ether

: PD for t

he refe

rence p

erio

d (

up to 12 mo

nths

or lif

etme

) x LGD x E

AD and dis

count

ed to t

he bala

nce she

et date u

sing t

he ef

fecti

ve inter

est rat

e as the di

scou

nt rate.

IFRS 9 ex

pect

ed cre

dit los

s mode

ls ha

ve been d

evelope

d for th

e Cor

porat

e, Comm

ercial a

nd Inst

itut

onal B

ankin

g busin

ess

es on

a glob

al bas

is, in li

ne wit

h their r

espe

ctive p

ortf

olios

. However, for som

e of the key cou

ntr

ies, co

untr

y-s

pecif

c m

odel

s have als

been developed.

The c

alibrat

on of for

ward-lo

okin

g infor

mato

n is ass

ess

ed at a cou

ntr

y or re

gion leve

l to take int

o accoun

t local

macroeconomic condit

ons.

Retail e

xpe

cted cre

dit los

s mod

els are co

untr

y a

nd prod

uct spe

cif

c given t

he loc

al natu

re of the C

ons

umer, Private a

nd Bus

ines

Bankin

g business

For le

ss mat

eria

l retail p

ort

folio

s, the G

roup h

as ado

pted l

ess s

ophist

cate

d approa

ches b

ase

d on histo

rcal ro

ll rates o

r los

rates:

•

For me

dium-s

ized re

tail po

rtfo

lios

, a roll rat

e mode

l is appli

ed, wh

ich use

s a matr

ix tha

t gives th

e avera

ge loan m

igrato

n rate

bet

en deli

nquen

cy st

ates f

rom pe

riod t

o peri

od. A ma

trix m

ultip

lcatio

n is the

n perf

orme

d to gen

erate t

he ﬁnal PD

s by

deli

nque

ncy b

ucket over dif

fere

nt time h

ori

zons.

234

Standard Chartered

– An

nual Re

por

t 2021

sk r

evi

Risk proﬁle

•

For sm

aller re

tail po

rtf

olios

, loss r

ate mo

dels ar

e applie

The

se use a

n adjus

ted gro

ss char

ge-of

f rat

e, develop

usin

g mont

hly wr

ite-

off an

d recover

ies over t

he prec

eding

12 months and to

tal outst

anding balances

•

Whil

e the lo

ss rate m

odel

s do not i

ncorp

orat

e for

ward-

looking informaton, to the extent that

here a

re signﬁcant

chan

ges in t

he macr

oecon

omic fo

reca

sts an a

sse

ssme

will b

e compl

eted o

n whet

her an a

djust

ment to t

modelled output is required.

For a lim

ted nu

mber of e

xpos

ures

, prox

y param

eter

s or

appr

oache

s are us

ed whe

re the da

ta is no

t availab

le to

calcu

late t

he ori

gnatio

n PDs for t

he pur

pose o

f appl

ying t

SICR c

riter

a; or for s

ome ret

ail por

tfo

lios wh

ere a f

ull hist

of LGD data i

s not ava

ilable

, estim

ates b

ased o

n the lo

exp

erie

nce fro

m simlar p

ort

folio

s are use

d. The u

se of prox

ies

is mo

nitor

ed and wi

ll redu

ce over tim

The f

ollowi

ng proc

esse

s are in pla

ce to as

ses

s the on

going

per

for

mance o

f the mo

dels:

•

arte

rly mo

del mo

nitor

ng tha

t uses r

ecent d

ata to

comp

are th

e diff

erence

s bet

wee

n mode

l predi

ctons a

actual outcomes agai

approved thresholds.

•

Annual independent vali

datons of the performance of

mat

erial m

odel

s by Grou

p Mode

l V

aluat

ion (

MV); an

abridged val

idaton is

completed for non-material models.

Applicaton of

lifetme

xpe

cted cr

edit lo

ss is es

timat

ed ba

sed on t

he per

iod over

whi

ch the G

roup is e

xpos

ed to Cre

dit Ris

k. For t

he maj

ort

y of

exposures this equates to

maximum contractual period.

For re

tail cre

dit card

s and cor

porat

e overdraf

t facilt

ies

however, the G

roup do

es not t

picall

y enforc

e the con

tract

ual

per

iod, w

hich can b

e as sho

rt as o

ne day. As a res

ult, t

per

iod over w

hich th

e Grou

p is exp

osed t

o Credit R

isk for t

hese

instr

ument

s reﬂects their b

ehavioural life, w

hich incorporate

exp

ectat

ions o

f custo

mer be

havi

our and t

he exte

nt to whi

Cre

dit Risk m

anage

ment ac

tions c

urta

il the pe

rio

d of that

exp

osure

. The ave

rage be

havi

oural li

fe for re

tail cre

dit card

is be

ween 3 and 6 ye

ars a

cross o

ur foo

tpri

nt mar

kets

In 2021, t

he beh

avio

ural lif

e for cor

porat

e overdraf

t facilt

ies

was re

-est

imate

d using r

ecent d

ata, an

d it was conﬁr

med

tha

t the ex

istng l

ifetm

e of 24 month

s remai

ns appr

opria

te.

Compositon of credit imparment

visons (

audited)

The t

able b

elow sum

mari

ses th

e ke

y comp

onen

ts of t

Gro

’s credit im

parm

ent prov

ison b

alance

s at 31 Dec

embe

2021 and 31 D

ecemb

er 2020.

Modelled ECL

provisons, which includes post

odel

adjustment

s, management o

verla

ys a

the impact of

multiple economic scenarios, were 23 per cent

(31 December

2020: 2

4 p

er cent) of tot

al credi

t impar

ment p

rovison

s at

31 De

cembe

r 20

. 2

4 p

er cent o

f the mo

delle

d ECL provi

sons

at 31 December 2

021 related to judgemental management

overl

ays com

pare

d with 2

1 per cen

t at 31 Dec

ember 2020.

Post model adjustments (PMAs

)

duced sig

nﬁc

antl

comp

ared w

ith 31 De

cemb

er 202

0 as th

e volat

ilt

y in

macroeconomic forecasts subsided which removed the

nee

d for PMA

s to cor

rect fo

r a mod

el’s overre

actio

n to the

macroeconomic forecast.

31 December 2

021

Corporate,

Commercial

& Instituton

Banking

$ millon

Consumer,

Pri

vate &

Business

Banking

$ millon

Central & other

items

$ millon

delle

d ECL prov

ison

s (bas

e fore

cast)

365

539

,007

Impact of

multiple economic scenarios

otal EC

L provi

sons b

efor

e mana

geme

nt overl

ays

397

553

112

Of w

hich: Post m

ode

l and ot

her mo

del a

djust

ment

(8)

Management ov

erlays

–

-1

102

– Chin

a Com

mercia

l Real E

state

ota

l modelled pro

visons

594

112

1,406

Of w

hich:

Sta

ge 1

163

378

609

Stage 2

425

187

656

Stage 3

135

Stage 3 non

-modelled pro

visons

4,073

4,803

otal credit imparment provisons

180

6,20

31 December 2

020

delle

d ECL prov

ison

s (bas

e fore

cast)

564

380

Impact of

multiple economic scenarios

(8)

otal EC

L provi

sons b

efor

e mana

geme

nt overl

ays

556

372

Of w

hich: Post m

ode

l and ot

her mo

del a

djust

ment

(

58)

Man

agem

ent over

lay – COVID

197

ota

l modelled pro

visons

753

1,731

Of w

hich:

Sta

ge 1

154

Stage 2

599

885

Stage 3

182

Stage 3 non

-modelled pro

visons

4,8

548

414

otal c

redit i

mpar

ment p

rovis

ons

556

1,43

155

clud

es a PMA o

f $51 mi

llo

$11

5 mill

on (2020

: $78 mil

lon) is in st

age 1

, $208 m

illo

n (2020: $2

75 mi

llon) in st

age 2 a

nd $21 m

illo

n (2020: $

6 mill

on) in sta

ge 3

235

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Pos

t mode

l and ot

her m

ode

l adju

stm

ent

Where a model’

s performance breaches the monitorng

thresholds or va

lidaton standards, an

assessment is

comp

lete

d to det

ermin

e whet

her an ECL PM

A is requ

ired to

cor

rect fo

r the ide

ntﬁed m

odel i

ssue. PM

As wil

l be rem

oved

whe

n the mo

dels a

re upd

ated to c

orre

ct for th

e ident

ﬁed

del is

sue or th

e esti

mates r

etur

n to bei

ng with

n the

monitorng thresholds.

The u

npre

ceden

ted vola

tilt

y in th

e quar

terl

y macro

econ

omic

for

ecast

s th

at was se

en over 2020 meant t

hat a num

ber of

the G

roup’

s IFRS 9 EC

L mode

ls were op

erati

ng out

sid

e the

undar

ies to w

hich th

ey were calib

rated

. Over t

he CO

ID-

per

iod we h

ave comm

only s

een GD

P decr

ease

s over a singl

qua

rter o

f aroun

d 10 to 20 per c

ent whil

e a count

y is in

loc

kdown, fo

llowed by a re

cover

y of 10 t

o 20 per cent t

foll

owing q

uart

er when t

he loc

kdown is as

sum

ed to end

As t

he qua

rter

ly ma

croeco

nomi

c forec

ast

s and as

socia

ted

del est

imate

s have b

ecome l

ess vol

atile in 2021

, PMAs

rel

ating t

o volatil

ty h

ave not b

een re

quire

As a

t 31 Dece

mber 2021

, PMAs ha

ve bee

n applie

d for 11

dels ou

t of the t

otal of 1

72 mod

els

. In aggre

gate, t

PMA

s incre

ase th

e Grou

’

s im

parm

ent prov

ison

s by

$17 mi

llon (1 per c

ent of mo

delle

d provi

sons

) com

pare

d with

a $133 m

illon de

crea

se at 31 De

cemb

er 202

0, an

d prim

arly

rel

ate to a no

n-linea

rt

y PMA (

e page 2

39 fo

r the imp

act

of multiple economi

c scenarios

)

and unsecured Consumer

len

ding mo

dels

. The PMA

s rang

e bet

wee

n a $51 millon

incr

ease (the no

n-linea

rt

y PMA) to a $16 millo

n decre

ase in

ECL (

for Malaysia Business Clients

)

. Cor

porate,

Commercial

and Instit

utonal Bankin

g P

As reduced signﬁcantl

comp

ared t

o 31 Dece

mber 2020 as new m

odel

s were

implemented during the period.

As at 31 December 2

021, judgemental model adjustment

have b

een ap

plied t

o cert

ain Con

sume

, Pri

vate and B

usine

Banking models to hold back

relea

ses of

ECL identﬁ

rom

model monitorng breaches

ecause moratoria

and other

support schemes have suppressed obser

ved defaults. Thes

will be released when the

served defaults normalise.

As s

et out o

n page 2

, a sep

arate m

anage

ment over

lay t

hat

cover

s risk n

ot capt

ured by t

he mod

els ha

s been a

pplie

d afte

tak

ing int

o accoun

t thes

e PMAs

$ millon

$ mil

lon

olatilty-related PMAs

rpor

ate, C

omme

rcial & In

stit

uto

nal Ba

nkin

–

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

–

ntral & o

ther i

tems

–

)

–

)

Model performance PMAs

rpor

ate, C

omme

rcial & In

stit

uto

nal Ba

nkin

(

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

(15)

ntral & o

ther i

tems

–

(

Judgemental model adjustments

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

otal

model adjustment

(

Key ass

umpt

ion

s and ju

dgem

ent

s in det

erm

inng ex

pec

ted

credit

los

Incorporation of forward-looking informat

The evo

lvin

g econo

mic envi

ronme

nt is a key dete

rmin

ant

of th

e abilt

y of a b

ank

’s client

s to me

et the

ir oblig

aton

s as

they f

all due. I

t is a fu

ndame

ntal pr

incple o

f IFRS 9 th

at the

provisons

anks hold

against potential future credit

isk

los

ses sh

ould d

epen

d not jus

t on the h

ealth o

f the ec

onomy

today but should also tak

e into account

tential

changes

to th

e econ

omic env

ironme

nt. Fo

r example, i

f a bank wer

e to

ant

icpate a s

harp s

lowdown in t

he worl

d econ

omy over the

coming y

, i

t should hold more

provisons today to absorb

the c

redit l

osse

s likely to o

ccur in t

he near f

ure.

o captu

re the ef

fec

t of chang

es to th

e econ

omic

envir

onmen

t, th

e PDs and LGDs u

sed to ca

lculat

e ECL

inco

rpo

rate for

rd-look

ing inf

orma

ton in t

he for

m of

for

ecast

s of th

e values o

f econ

omic var

iable

s and as

set pr

ices

tha

t are likely t

o have an e

ffe

ct on the r

epay

ment ab

ilt

y of

the G

roup’

s clie

nts

The ‘

Bas

e Forec

ast

’ of th

e econo

mic vari

ables an

d ass

et pri

ces

is ba

sed o

n manag

ement

’s view of t

he ﬁve-yea

r outl

ook

sup

port

ed by proj

ecton

s fro

m the Gr

oup

’s in-hous

e rese

arch

tea

m and out

put

s fro

m a third-p

art

y mo

del th

at proje

spe

cif

c econ

omic var

iable

s and as

set pr

ices

. The res

earch

tea

m takes con

sens

us view

s into con

side

raton

, and sen

ior

man

ageme

nt revie

ws proje

cton

s for som

e core co

untr

vari

ables a

gainst c

onse

nsus w

hen for

ming t

heir vi

ew of the

out

look

. For t

he per

iod beyo

nd ﬁve year

s, m

anage

ment

uti

lses th

e in-hou

se res

earch v

iew and th

ird-par

y mode

out

put

s, w

hich allow f

or a rever

sion to l

ong-te

rm growt

h rate

or no

rms

. All proj

ecton

s are up

date

d on a quar

ter

ly bas

is.

236

Standard Chartered

– A

nnu

al Rep

ort 202

sk r

evi

Risk proﬁle

For

ecas

t of key macr

oec

onomi

c variable

s und

erly

ing the

expected credit loss ca

lculation a

nd the impact on non-

lineart

In th

e Base F

oreca

st – mana

geme

’

s vi

ew of the m

ost likel

out

come – t

he worl

d econo

my is exp

ected t

o grow by just over

4 per c

ent in 2022

, eas

ing fr

om an almo

st 6 per ce

nt expa

nsion

in 2021. T

he stro

ng growt

h last ye

ar was dr

iven by vaccin

roll

out

s and gover

nmen

t stimu

lus and f

ollows a co

ntra

ction of

mor

e than 3 p

er cent in 2020, the wor

st p

erfor

manc

e since t

Great Depression of 1929–3

1. Currently

, the near

-term recovery

momentum is being curtailed

by supply-side

disruptons and

elevat

ed inﬂa

ton. D

espit

e this

, world G

DP grow

th in 2022 i

stil

l expe

cted to b

e above th

e averag

e of 3.

7 per cen

t for the

10 yea

rs be

een 2010 an

d 2019

accin

es agai

nst COVID-

19 h

ave allowe

d econo

mies to

reo

pen, b

ut con

stant

ly evolv

ing vir

us st

rains h

ave resu

lted

in int

ermt

tent re

coverie

s, and s

ector

s like ho

spitalt

y an

tourism remain under

pres

sure.

In general, dev

elope

ark

have b

een m

uch bet

ter th

an emer

ging mar

ket

s in rollin

g out

vaccin

es; it is th

erefo

re not s

urpr

isng t

hat devel

oped m

arket

have l

ed th

e recover

y so f

. T

he improve

ment in vac

cine

acce

ss in em

erging m

arket

s in rec

ent mon

ths sh

ould h

elp

to na

rrow th

e growth g

ap in 2022

The b

alanc

e of ris

ks to t

he 2022 grow

th for

ecast i

s to the

down

side. T

he eme

rgence o

f the new O

micro

n variant

acro

ss many m

arket

s is likely t

o be fel

t in slowi

ng the p

ace

of reopening of

conomies

or the re-introducton

res

trict

ons limt

ing pu

blic con

tact and m

ovemen

t. Thi

s will

pose downside risks to economic

activ



y a

employment

A delayed employment r

ecovery would lik

ely extend supply

chain disr

uptons, weakening growth and keepin

g inﬂaton

elevated

for longer

. This combinaton

will create

challenges

for p

olic

y-makers g

lobal

ly as th

ey attem

pt to st

rike a

deli

cate ba

lance b

ween re

spon

ding to upwa

inﬂatona

y pressures a

nd managing do

side

isks

to the economic

utlook.

Whil

e the qu

arte

rly B

ase For

ecast

s inf

orm th

e Grou

’

str

ategi

c plan, o

ne key requi

remen

t of IFRS 9 is t

hat th

assessment of provisons

ould

consider multiple

uture

economic en

ironments. For e

xample, the global

conom

y grow more q

uickl

y or mor

e slowl

y than th

e Bas

e Foreca

st,

and t

hese var

iato

ns woul

d have dif

fere

nt implca

tion

s for the

provisons

roup should

old

today

. As the negative

imp

act of an e

conomi

c downt

urn on c

redit l

osse

s tend

s to

be gr

eater t

han th

e posit

ve impa

ct of an ec

onomi

c uptu

rn,

if th

e Grou

p set

s provi

sons on

ly on th

e ECL unde

r the Ba

Fore

cast it m

ight mai

ntan a level o

f provis

ons th

at doe

not a

ppropr

iate

ly capt

ure th

e range o

f pote

ntial ou

tcom

es.

o address this propert

y of

skewness (

or non

-lineart

)

IFRS 9 r

equire

s repo

rte

d ECL to be a pr

obabilt

y-wei

ghted

ECL, c

alcula

ted over a ran

ge of po

ssib

le out

comes

o asse

ss th

e range o

f poss

ible ou

tcom

es the G

roup si

mulat

a set o

f 50 scen

ario

s around t

he Ba

se Fore

cast

, calcul

ates

the EC

L under e

ach of t

hem and a

ssign

s an equ

al weight o

2 per c

ent to ea

ch scen

ario o

utcom

e. Thes

e scen

arios ar

gen

erate

d by a Mont

e Carl

o simula

ton, w

hich ad

dress

es the

challenge

s of crafting many realistc alter

native scenari

os in

the m

any count

ries i

n which t

he Gro

up ope

rates by m

eans o

a mo

del, wh

ich prod

uces t

hese al

tern

ative s

cenar

ios whi

considerng the degr

ee of historc

al uncertaint

y (

or volatilty

)

obs

ved f

rom Q1 19

90 to Q3 202

0 a

round e

cono

mic

out

comes a

nd how th

ese ou

tcome

s have te

nded t

o move in

relation to one

another (

or correlation

)

. This natural

eans

tha

t each o

f the 50 sc

enari

os do no

t have a sp

ecif

c nar

rati

ve,

alth

ough co

llect

ively t

hey exp

lore a ran

ge of hyp

othe

tical

alternative

outcomes for the

global economy

, includng

sce

nario

s that t

urn ou

t bet

ter tha

n expe

cted an

d scena

rios

that amplif

y anticpat

ed stress

es.

The t

able on p

age 2

37 to 23

8 provi

des a sum

mar

y of t

Gro

’s Base Fo

reca

st for key foo

tpr

int mar

kets

, along

side

the corresponding range

en ac

ros

the multiple scenarios.

The p

eak

rough a

moun

ts in t

he tabl

e show th

e highes

t and

lowes

t point

s wit

hn the B

ase For

ecas

t, and t

he GD

P graphs

illu

strat

e the sh

ape of th

e Bas

e Foreca

st in rel

ation t

o prio

per

iod

s’ actua

ls and th

e long-t

erm grow

th rat

es.

Chin

a’

s grow

th is ex

pect

ed to ea

se fr

om over 8 per c

ent in 2021

to 5.

6 per ce

nt in 2022

. Aft

er exclud

ing the COVID-

19 rel

ated

weak

nes

s of 202

0 w

hen t

he econ

omy grew by 2.

3 pe

r cent th

will b

e the sl

owest pa

ce of exp

ansio

n since 19

90 wh

en GDP

grew by 3.9 per cen

t. He

adw

inds to Ch

ina’s outlo

ok incl

ude

the s

prea

d of the n

ew variant o

f CO

D-

19 and co

ncer

ns over

the r

eal est

ate se

ctor. Hong Kong i

s also ex

pect

ed to sh

ow a

sha

rp slowdow

n in 2022 f

rom a grow

th of alm

ost 7 pe

r cent

in 2021. W

hile hop

es are r

isng th

at quar

antin

e-fre

e trave

bet

en Hon

g K

ng and t

he main

land ma

y resum

e, fu

reo

penin

g of the b

order i

s unlikel

y until H

2 20

2 at t

he ear

liest

as th

e auth

orit

es are ex

pect

ed to take a ca

utio

us appro

ach.

The resumpti

on of

internatona

l travel to

other destinatons

cou

ld take even lon

ger. In Singap

ore, grow

th is ex

pect

ed to

hol

d up bet

ter in 202

2 compa

red wit

h Hong Kon

g. Earlie

pro

gress w

ith bo

rder re

open

ing and a hi

gh dome

stic

vacci

at

on rate should support economic activty

. Korea

and In

dia’s growth ar

e also ex

pect

ed to be r

elati

vely mo

rob

ust comp

ared w

ith 2021. Eas

ing COVID-

19 re

stri

ctons

and a reco

ver

y in emplo

yment will pro

vide support to

Korea

. In India

, a rapid pic

-up in va

ccine dis

trbu

tion an

exp

ansio

nar

y po

lices are s

uppo

rtin

g the re

cover

Mom

entu

m from t

he str

ong reb

ound in 2021 i

s also ex

pect

to ea

se in wes

tern e

conom

ies. T

he Unit

ed Sta

tes is fa

cing

incr

easn

g head

wind

s in 20

. This fo

llows rob

ust grow

th la

year a

s the rap

id pace o

f vaccinat

ons in t

he ﬁrs

t half of 2021

allowe

d acti

vt

y to nor

malis

e. US GDP g

rowth i

s expe

cted to

derate t

o 3.7 p

er cent in 202

2 fro

m 5.7 pe

r cent in 2021

as su

pply-s

ide con

strain

ts st

art to b

ite and hi

gh inﬂato

squeezes real

incomes

Europe also faces si

mlar

challenges

wit

h the grow

th in th

e eurozone e

xpe

cted to e

ase to a

round

4 per c

ent fro

m 4.

9 p

er cent in 2021

The s

lowdown in wo

rld G

DP growt

h will t

ransla

te to a

sof

teni

ng in the g

rowth o

f deman

d for com

modit

es in 2022

Supply disruptons from C

OVID-

are also expected to

dimni

sh this ye

. T

he tigh

tnes

s in the su

pply-

deman

bal

ance in th

e oil mar

ket is th

erefor

e likely to e

ase an

d the

pri

ce of Bre

nt Cru

de oil is e

xpec

ted to a

verage $

.6 in 2022

comp

ared w

ith $70.0 in 2021.

237

Standard Chartered

– An

nual Re

por

t 2021

sk rev

iew and C

api

tal r

eview

15 Q1

18 Q1

17 Q1

19 Q1

20 Q1

21 Q1

23 Q1

25 Q1

26 Q1

24 Q1

-8

-4

Chi

YoY

Actual

Lon

g-ter

m growt

Forecast

-10

-8

-6

-4

-2

Hon

Kong GDP

YoY

Actual

Lon

g-ter

m growt

Forecast

15 Q1

18 Q1

17 Q1

19 Q1

20 Q1

21 Q1

23 Q1

25 Q1

26 Q1

24 Q1

15 Q1

23 Q1

25 Q1

26 Q1

24 Q1

-4

-3

-2

-1

Korea GDP

YoY

Actual

recast

Lon

g-ter

m growt

15 Q1

18 Q1

17 Q1

19 Q1

20 Q1

21 Q1

23 Q1

25 Q1

26 Q1

24 Q1

-15

-10

-5

Sin

gapo

YoY

Actual

recast

Lon

g-ter

m growt

15 Q1

18 Q1

17 Q1

19 Q1

20 Q1

21 Q1

23 Q1

25 Q1

26 Q1

24 Q1

-30

-20

-10

Ind

YoY

Actual

recast

Lon

g-ter

m growt

Lon

g-t

erm gr

owth = f

ward-l

ooki

ng fu

tur

e GDP gr

owth p

ote

ntia

2021

China

Hong K

ong

GDP

owth

(

Unemployment

3-month

interest

rates

House

prices

(

oY %

)

P grow

(

oY %

)

Unemployment

3-month

interest

rates

House

prices

(

oY %

)

Base forecast

202

3.4

2.3

3.0

4.2

202

5.5

3.4

3.8

2024

5.4

3.4

4.4

3.7

1.7

2.8

202

5.3

3.4

3.0

4.4

2.5

3.7

2.8

2026

5.2

3.4

4.4

2.5

3.7

2.3

2.7

5-year

average

3.4

2.6

3.8

Pea

3.4

4.5

3.5

4.4

2.3

4.7

3.4

1.8

3.7

2.7

Monte Carlo

Low

2.6

1.3

(

.8)

(1.7)

(0.

(

High

8.3

3.5

4.6

1.1

5.8

5.0

2021

Singapore

Korea

GDP

owth

(

Unemployment

3-month

interest

rates

House

prices

(

GDP

owth

(

Unemployment

3-month

interest

rates

House

prices

(

oY %

)

Base forecast

202

3.6

2.7

3.7

1.2

5.8

202

2.7

1.0

3.3

2.5

3.4

0.0

2024

3.4

2.5

3.3

1.6

202

3.6

2.5

2026

3.8

5-year

average

2.5

1.4

3.6

2.5

3.3

1.6

2.7

Pea

4.8

3.4

4.2

2.8

3.7

1.8

1.2

Monte Carlo

Low

)

0.1

)

(

)

2.7

(5.

High

4.5

4.2

15.4

4.5

238

Standard Chartered

– Ann

ual Re

por

t 2021

sk r

evi

Risk proﬁle

2021

India

Brent

Crude

$ pb

GDP

owth

(

Unemployment

3-month

interest

rates

House

prices

(

Base forecast

202

8.0

4.6

66.6

202

5.5

5.2

0.0

2024

6.0

5.7

202

5.0

2026

6.5

6.2

4.0

5-year

average

6.4

5.4

63.7

Pea

16.

6.2

73.5

4.2

4.0

5.8

60.0

Monte Carlo

Low

3.2

(

)

High

10.

8.8

24.9

211.

2020

China

Hong

Kong

P grow

(

YoY

)

Unemployment

3-month

interest rates

House

prices

(

YoY

)

P grow

(

YoY

)

Unemployment

3-month

interest rates

House

prices

(

YoY

)

5-year

average

3.4

5.8

2.8

3.7

Pea

3.7

6.2

5.5

6.3

3.4

2.2

4.7

2.5

)

Monte Carlo

Low

1.2

(

.9)

2.3

.8)

High

20.4

3.7

8.7

3.2

2020

Singapore

Kor

P grow

(

YoY

)

Unemployment

3-month

interest rates

House

prices

(

YoY

)

P grow

(

YoY

)

Unemployment

3-month

interest rates

House

prices

(

YoY

)

5-year

average

2.8

3.5

0.7

4.0

2.8

3.3

Pea

1.2

5.3

3.7

3.2

(

1.5

Monte Carlo

Low

(5.4

)

0.0

(

2.6

)

High

4.5

3.5

2020

Singapore

Kor

P grow

(

YoY

)

Unemployment

3-month

interest rates

House

prices

(

YoY

)

P grow

(

YoY

)

Unemployment

3-month

interest rates

House

prices

(

YoY

)

5-year

average

2.8

3.5

0.7

4.0

2.8

3.3

Pea

1.2

5.3

3.7

3.2

(

1.5

Monte Carlo

Low

(5.4

)

0.0

(

2.6

)

High

4.5

3.5

2020

India

Brent

crude

$ pb

GDP

growt

(

YoY

)

Unemployment

3-month

interest rates

House

prices

(

YoY

)

5-year

average

4.3

4.0

Pea

32.

5.4

0.0

3.3

4.8

Monte Carlo

Low

(

2.1

)

2.0

)

High

21.8

116

e fore

cas

ts a

re eval

uat

ed fr

om Q1 202

2 to Q4 2

026. Th

e for

rd-l

ook

ing si

mul

ato

n sta

s fro

m Q1 202

Rep

res

ent

s th

e 10t

h per

cent

ile i

n the r

ange o

f eco

nom

ic sce

nar

ios u

sed t

o det

erm

ine n

on-li

nea

rt

pres

ent

s th

e 90t

h per

cent

ile i

n the r

ange o

f eco

nom

ic sce

nar

ios u

sed t

o det

erm

ine n

on-l

inea

rt

India G

DP fo

llow

s th

e Fisca

l Y

r beg

innn

g in Q2. A

ll ot

her va

riab

les a

re on a ca

len

dar ye

ar ba

sis

A – No

t avai

labl

239

Standard Chartered

– Ann

ual Re

por

t 2021

sk rev

iew and C

api

tal r

eview

Impact of multiple

economic scenarios

The ﬁ

nal prob

abilt

y-weight

ed ECL re

port

ed by the G

roup

is a sim

ple ave

rage of t

he ECL for e

ach of t

he 50 sce

nario

simu

late

d using a M

onte C

arlo m

odel

. The Mo

nte Car

appr

oach ha

s the ad

vanta

ge that i

t gener

ates ma

plausible alternative scenarios that co

ver our global footprint;

however, a recog

nise

d challe

nge wit

h the M

onte Ca

rlo

appr

oach is t

hat th

e range o

f scena

rios it f

oreca

sts c

be na

rrow.

The M

onte C

arlo m

odel i

s being r

edevelo

ped t

o widen t

rang

e of the s

cenar

ios; howeve

, pr

ior to th

is new mo

del

bei

ng impl

ement

ed a $51 millo

n non-lin

eart

y PM

A has

en appli

ed. Th

e total a

mount o

f non-lin

eart

y h

as bee

est

imate

d by assi

gnng pro

babilt

y wei

ght

s of 7

0 p

er cent

25 p

er cent an

d 5 per ce

nt resp

ecti

vely to t

he ECL fro

m the

Base Forecast, Supply Chain

Disr

upton a

New CO

VID-

ari

ant scen

ario

s which ar

e prese

nted o

n page

s 2

0 to 24

and co

mpar

ing thi

s to the u

nweighte

d base f

oreca

st ECL.

The non-linearty PMA represents the difference bet

ween

the

prob

abilt

y weig

hted ECL ca

lculat

ed usi

ng the t

hree s

cenar

ios

and t

he prob

abilt

y weigh

ted ECL cal

culat

ed by the M

onte

Carlo model.

The impact of

multiple economic scenarios (

whic

h includes

the n

on-line

art

y PMA) on sta

ge 1, st

age 2 and s

tage 3

delle

d ECL is set o

ut in the t

able b

elow to

gethe

r with

the management overlay

Base

forecast

$millon

Multiple

economic

scenarios

$millon

Management

erlay

$millon

al expe

cte

d cre

dit lo

ss at 3

1 Dece

mbe

r 2021

1,0

,406

otal e

xpe

cted cr

edit l

oss at 3

1 Dece

mber 2020

1,3

(8)

359

1,7

Total m

ode

lle

d ECL com

pri

ses s

tag

e 1 and s

tag

e 2 bala

nce

s of $1

,26

5 mill

on (31 D

ece

mbe

r 2020: $1

49 mill

on) and $1

1 m

ill

on (31 D

ece

mbe

r 2020: $182 m

ill

) o

modelled ECL

on stage 3 l

oans

The a

verage e

xpe

cted cre

dit los

s und

er mult

iple sce

nari

os is

5 per c

ent high

er than t

he exp

ecte

d credit l

oss cal

culat

usin

g only t

he mos

t likely sc

enar

io (

the B

ase Fo

reca

Port

folio

s that ar

e more s

ensit

ve to non-l

inear

t

y inclu

tho

se wit

h great

er levera

ge and/

or a lon

ger ten

, s

uch as

Project and Shippng Finance and credit card por

tfolios.

Othe

r portfolio

s display minmal non-lineart

y owing to limted

responsiveness to macroeconomic i

acts for structural

rea

sons s

uch as si

gnﬁcant co

llater

alisat

on as wi

th the

Consumer

, Private and Business Bankingmortgage portfolios.

Management ov

erlay

As a

t 31 Dece

mber 2021

, the G

roup he

ld:

•

A $24

9 m

illon (31 D

ecemb

er 2020: $359 millon)

management ov

lay rela

ing

to uncertaintes as a resul

t of

the COVID-19 pande

mic, $1

02 millon (31 D

ecemb

er 2020:

$197 mi

llon

) of w

hich rel

ates t

o Corp

orate

, Comm

ercial an

Ins

titu

tonal B

ankin

g and $147 millo

n (31 Dece

mber 2020:

$162 millo

) to Co

nsume

, Pri

vate an

d Busin

ess B

ankin

4 millo

n (31 Dece

mber 2020: $78 millo

) of th

e overla

y is

hel

d in stag

e 1, $14

4 millo

n (31 De

cembe

r 20

20: $2

75 millon)

in sta

ge 2 and $2

1 millon (31 D

ecem

ber 2020: $6 millo

) in

stage 3.

•

A $95 millo

n (31 Dec

ember 2020: $nil

) manag

ement

overlay rela

ting to uncertaint

around exposures to China

Com

mercia

l Real Es

tate, all o

f which r

elate

s to Cor

pora

te,

Com

mercia

l and Ins

titu

tonal B

ankin

g. $31 m

illon is h

eld in

sta

ge 1 and $

64 mil

lon in sta

ge 2.

The ove

rlay

s have b

een det

ermi

ned af

ter ta

king ac

count o

the PM

As rep

ort

ed on p

age 2

35 and th

ey are re-a

sse

qua

rter

. T

hey are rev

iewed and a

pproved by th

e IFRS 9

Impairment Committee.

VID

19 o

verlay

Corp

orate, Comme

rcial and Instit

utonal Banking

Although the amount of

loans placed on non-purely

precau

tionar

y ea

rly alert has

decreased c

ompared wi

31 Decemb

er 2

020, balances remain higher th

an before

the p

ande

mic. T

he impa

ct of the r

apid det

erio

raton in

the e

cono

mic envir

onmen

t in 20

20 has n

ot yet be

en fu

lly

obs

ved in cu

stom

ers’ ﬁn

ancal pe

rfor

manc

e, in par

t due to

ongoing government support measures across the Group

’

mar

kets

. Accordin

gly

, we h

ave not ye

t seen a s

ignﬁcant

incr

ease i

n the level o

f stag

e 3 loans r

elati

ng to COVID-

19 up

to 31 D

ecemb

er 2021. T

o take acco

unt of t

he heigh

tene

Credit Risk and the cont

inung uncertainte

s in the pace and

timn

g of eco

nomic re

cover

, a ju

dgem

ental over

lay h

as bee

taken by e

stima

tng the i

mpact o

f fur

the

r deter

iorat

on to th

non-p

urel

y preca

ution

y ear

ly ale

rt por

tfo

lio. The over

lay i

hel

d in stag

e 2. The b

asis o

f dete

rminn

g the over

lay rem

aine

unc

hange

d duri

ng 202

0 and 2021

, altho

ugh the a

ssum

ed level

of f

urt

her de

terio

raton wa

s redu

ced in 2021 in lin

e with o

exp

erie

nce. The ove

rlay h

as ste

adily r

educ

ed fro

m $197 millo

at 31 D

ecemb

er 2020 to $102 millo

n at 31 Dec

ember 2021 a

the lev

el of non-

purely precautionar

y early alerts has reduced.

Consumer

, Priv

ate and

Business Banking

A number of components contribute to the judgemental

overl

ay for C

onsu

mer

, Pr

ivat

e and Bus

ines

s Bank

ing. Wit

hn

Bus

ines

s Bank

ing, t

he Gro

up has eval

uate

d thos

e sect

ors t

hat

have

been adversely

impacted

VID-

, both thr

ough

inte

rnal c

redit pr

oces

ses as we

ll as thr

ough a ‘

oice of

Customer’ sur

vey to

nderstand how c

ustomers have been

fecte

d. The G

roup h

as als

o consi

dered t

he exte

nt to wh

ich

loc

kdowns ha

ve impa

cted co

llecti

ons an

d recover

ies, an

the e

xtent t

o which p

ayme

nt reli

efs m

ay mas

k unde

rlyi

cre

dit ris

ks, p

art

icular

ly in th

ose ma

rket

s wher

e compu

lsor

extended moratoria schemes

were in

place. For those

markets, the

roup

has estimated the

impact of

increased

delinquences

and ﬂows to defaults when the mora

toria are

lif

ted as we

ll as th

e extent t

o which cu

stom

ers in s

tage 1 m

have e

xper

ience

d a signﬁcan

t incre

ase in cr

edit r

isk if no

for the moratoria. The

roup assessment also c

sidered

employ

ee banking relationsh

ps with high-i

act

ctors

and t

he impa

ct on Mor

tga

ges in Af

rica a

nd the M

iddle Eas

whi

ch gene

rally ha

ve high L

TVs. $8

4 millo

n of the over

lay i

hel

d in stag

e 1, $

42 millon in st

age 2 and $2

1 millon in s

tage 3

The basis of

determinng the

overlay rema

ined uncha

nged

dur

ing 2020 and 2021. Th

e overla

y has re

duce

d from

$162 millo

n at 31 De

cembe

r 20

20 to $

7 m

illon at

31 De

cembe

r 20

. While ge

neral m

orato

ria sch

emes h

ave

end

ed in a num

ber of m

arket

s and in

creas

ed del

inque

ncy

ﬂows we

re captu

red by th

e ECL mod

els, m

orato

ria sc

hemes

were f

urt

her ext

ende

d in cer

tain As

ian and A

fric

a and Mid

dle

East

markets.

240

Standard Chartered

– Ann

ual Re

por

t 2021

sk r

evi

Risk proﬁle

Chin

a Comm

ercial Re

al Est

ate overl

Chin

ese pro

per

ty d

evelop

ers ar

e exper

iencn

g liqudi

sues

, trig

gere

d by governm

ent po

licy ch

ange

s aimed at

deleverag

ing the propert

y sector and

suring p

ropert

devel

oper

s have t

he ﬁnan

cal abilt

y to co

mplet

e resid

ental

properties under constru

ction. The

government

’

s ‘three red

line

s’ matr

ix was in

trodu

ced in Aug

ust 2020 to tigh

ten th

nding c

ondito

ns for p

roper

y develo

per

s by limtin

g the

grow

th rate in e

xtern

al debt

. With a

ddito

nal cont

rols o

sales of properties to

end bu

s (

e.g. mortgage lending

cont

rol, pr

icng con

trol, e

ligbilt

y co

ntrol) an

d on res

trict

ng

devel

oper

s’ abilt

y to a

ccess ca

sh fro

m ‘

scrow ac

count

s’

wit

h cash p

aid by retai

l resid

ental b

uyer

s, th

e cashﬂow o

devel

oper

s has b

een sig

nﬁcantl

y sque

ezed. Al

so, wit

h capita

mar

kets r

eacti

ng neg

ativel

y to th

e tighte

nng po

lices

, we

have s

een gr

eater vo

latilt

y in b

ond pr

icng an

d reduc

acce

ss to cap

ital mar

kets l

iqudit

y fo

r develop

s. As s

uch,

some dev

elopers have faced

are facing

dif

fculties in

ervicng

and repaying

ﬁnancng

obligat

ons

The G

roup’

s ban

king b

ook ne

t expo

sure to Ch

ina Co

mmerci

Real E

stat

e was $4

.0 billon at 31 D

ecem

ber 2021 (31 De

cemb

2020: $3.

5 billon

). Clien

t level ana

lysis c

ontin

ues to b

e done,

with the high

-risk clients being placed on purely

precautionar

or no

n-pure

ly prec

autio

nar

y ea

rly al

ert

. Given t

he evolv

ing

nat

ure of t

he ris

ks in th

e China C

omme

rcial Real E

stat

e secto

a man

ageme

nt overl

ay of $95 mil

lon has b

een ta

en by

est

imatn

g the imp

act of f

ther de

teri

orato

n to tho

se clien

placed on early alert.

age 3 a

sse

Cre

dit

-impare

d ass

ets m

anage

d by Gro

up Spe

cial As

set

Management incorporate forward-looking economi

sumpt

ions in r

espe

ct of th

e recover

y ou

tcom

es iden

tﬁed,

and are assign

ed indvidual prob

abilty weightngs usin

management judgment. These assumption

are not

sed on a M

onte C

arlo si

mulat

on but ar

e infor

med by

the Base F

orecast.

nsit

vit

y of exp

ect

ed cr

edit l

oss c

alcu

lat

ion to

macroeconomic va

riables

The ECL

calculation relies on

multiple variables and

inherently non-linear a

ortfolio-dependent, which imples

tha

t no sing

le anal

ysis can f

ull

y demon

stra

te the s

ensit

vit

of th

e ECL to chan

ges in t

he macr

oeco

nomic var

iable

s. Th

Gro

up has c

ondu

cted a se

ries o

f analy

ses wi

th the ai

m of

ide

ntf

yin

g the ma

croe

conom

ic variab

les wh

ich might h

ave

the g

reate

st imp

act on th

e overall ECL. T

hes

e encomp

ass

single v

ble and multi

-variable e

xercises, using simple

down v

ariaton a

nd extracts from actual

calculation data,

as wel

l as bes

poke sce

nario d

esign a

sses

sme

nts

The primary conclusion

of these exe

rcises i

s that

no ind

vidual

macroeconomic va

iable

is materially inﬂuental

. The Group

believes

this is plausible as the num

ber of v

ariables used

in th

e ECL calcul

ation i

s large. T

his doe

s not me

an tha

mac

roeco

nomic var

iabl

es are uni

nﬂuent

al; rathe

, th

at the

Group believes

that consideraton of

acroeconomics

should

involve w

hole s

cenar

ios, a

s this al

igns wi

th the m

ulti-vari

able

nature of the c

alculation.

The G

roup f

aces dow

nsid

e risk

s in th

e opera

ting env

ironm

ent

related to the unc

ertaintes surrounding the

macroe

conomi

out

look

. T

o explo

re this

, a sen

sitv

y analy

sis of ECL wa

und

erta

ken to expl

ore th

e eff

ect of sl

ower econ

omic

recove

ries a

cross t

he Gr

oup

’s foot

print m

arket

s. T

wo down

side

sce

nario

s were con

sider

ed. In th

e ﬁrst s

cenar

io the c

urre

supply chain disruptons pro

ve more persistent than expected.

Labo

ur and ma

teri

al shor

tage

s per

sist t

hroug

hout 202

2 and

high

er comm

odit

y and o

ther in

put pr

ices ad

d to inﬂat

onar

pressure. The global reco

ver

y in in

vestment and consumption

disappont

s and ﬁnancal market

s w

aken. The impact on

the g

lobal e

conomy i

s temp

orar

, h

owever

. Su

pply c

hain

disr

upt

ons ea

se sign

ﬁcantly f

rom 202

3. In the s

econ

sce

nario, n

ew CO

D-

19 vi

rus var

iant

s are as

sume

d to lea

d to

a new in

fecto

n wave in eme

rging m

arket

s and devel

oping

eco

nomie

s, res

ultin

g in the re

-intro

ducto

n of severe l

ockdown

measures

. T

ravel restricton

s sign

ﬁcantly impact the Aviaton

and Hotels and

urism sectors.

Baselin

Supply

chain disrupton

New CO

VID

19 variant

Five y

ear a

vera

Peak

rough

ve yea

r aver

age

Peak/

rough

ve year a

ver

age

Peak/T

ugh

China GDP

5.4

4.7

5.0

5.5/3.6

5.2

13.4/

(5.

)

China unemplo

ment

3.4/3.4

3.5

.9/

China proper

ty pr

ices

4.0

4.5/

1.8

4.5

(1.5)

3.8

6.6

(1.6

)

Hong K

ong GDP

2.6

3.5/

1.8

5/0

)

Hong K

emplo

ment

3.8

4.4/3.7

4.0

4.6/

4.7

6.8

/3.8

Hong K

ong propert

prices

8/(

3.5

US GD

2.3

4.7

/1.7

1.6

0/(

2.0

1/(

Singapore GDP

2.5

4.8

/1.8

3/(

)

2.2

11.

(8.

)

India GDP

5.4

6.0

)

Crud

e oil

63.7

66.

/32.7

241

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

se (GDP

, Y

oY%)

Supply chain

disr

upton

(

GDP

, Y

Y%)

iff

ere

nce f

rom B

ase

202

2023

2024

202

2026

2022

2023

2024

202

2026

202

2024

202

2026

China

5.6

5.5

5.4

5.3

5.2

4.8

5.4

5.2

(

0.0

Hong K

ong

3.0

2.5

1.4

2.5

(

)

(

.1)

0.0

3.7

2.3

1.8

1.6

1.0

1.8

(

.1)

0.0

Singapore

3.6

2.7

2.0

1.7

2.0

)

(

0.0

India

8.0

5.5

6.5

5.6

4.3

5.4

5.6

6.5

(

0.0

se (GDP

, Y

oY%)

New COVI

D-

9 vari

ant (GDP

, Yo

Y%)

ffe

ren

ce fr

om Ba

202

2024

2025

202

2024

2025

202

2024

2025

202

China

5.6

5.5

5.4

5.3

5.2

.5)

5.7

5.2

(

)

0.3

0.0

Hong K

ong

3.0

2.5

(

)

6.2

2.5

3.7

4.6

0.4

0.0

3.7

2.3

1.8

6.7

1.8

(

)

5.5

0.0

Singapore

3.6

2.7

2.0

)

6.2

6.3

2.4

2.0

(

)

3.5

4.3

0.3

0.0

India

8.0

5.5

6.5

)

15.8

10.

6.2

(14.

10.

0.0

ith t

he exce

pti

on of I

ndia e

ach ye

ar is d

eﬁne

d as ca

len

dar ye

ars

, st

art

ing in Q

1 and en

din

g in Q4

. For In

dia th

e var

iabl

es ar

e pres

ent

ed fo

r the ﬁ

scal y

ear w

ith

ch yea

r star

ng in Q2 an

d endi

ng in Q1 o

f the n

ext ye

The t

otal re

por

ted st

age 1 and 2 ECL p

roviso

ns (

nclud

ng

bot

h on and o

-b

alance s

heet in

str

umen

) wou

ld be

appr

oximat

ely $11

0 millon hi

gher un

der th

e suppl

y chain

disr

upt

on scen

ario an

d $545 mi

llon high

er unde

r the new

Cov

id-

19 varia

nt scen

ario t

han the b

asel

ine ECL prov

ison

(

which ex

cluded the impact of mul

iple

conomi

c scenarios

and m

anage

ment over

lays w

hich ma

y alrea

dy capt

ure so

of th

e risk

s in th

ese sce

nari

)

. T

he prop

ort

ion of st

age 2

set

s would in

crea

se fro

m 4.2 p

er cent t

o 4.6 p

er cent an

.7 per cent

resp

ectively

der

supply chain

disr

upton

and N

ew Covid-

9 V

ariant s

cenar

ios

. This in

clude

s the imp

act

of ex

posu

res tran

sfer

ring t

o stag

e 2 from s

tage 1 bu

t does n

consider an

increase in stage 3 defaults.

Und

er bot

h scena

rios t

he majo

rt

y of th

e incre

ase was in

Cor

por

ate, Co

mmerci

al and Ins

titu

tonal B

anki

ng wit

h the

main c

orpo

rate po

rtf

olios in t

he Unit

ed Kin

gdom

, Hong Kong

and the

United States being

impacted. Under

oth

scenarios

arou

nd 26 per c

ent of th

e incre

ase was i

n Cons

umer, Privat

and B

usine

ss Ban

king p

ort

folio

s with mo

st of th

e incre

ases

comi

ng fro

m the big u

nsec

ured re

tail po

rtf

olios (the Korea

and H

ong Kong Per

son

al Loan po

rtfo

lios wer

e impact

under the supply cha

in disrupton sc

enario, whereas the

Malay

sia and Singapore Credit Card

s portfolio

s were

imp

acted u

nder t

he new Cov

id-

19 vari

ant sce

nario

The

re was no m

ater

ial chan

ge in mod

elle

d stage 3 p

roviso

as th

ese pr

imar

ly rel

ate to un

secu

red Co

nsum

, Pr

ivate an

Bus

ines

s Bank

ing exp

osur

es for w

hich the LGD is n

ot sen

sitve

to ch

anges in t

he mac

roeco

nomic f

oreca

s. The

re is als

o no

mat

erial c

hange f

or non-m

odell

ed sta

ge 3 exp

osure

s as the

are mo

re sen

sitve t

o client s

pecif

c fa

ctor

s than t

o alter

nati

macroeconomic scenarios.

The a

ctual o

utcom

e of any sce

nario m

ay be m

ater

ially

dif

feren

t due to, am

ong ot

her fa

ctor

s, th

e eff

ect of

management actions to mitgate

otential inc

reases

in ri

sk and ch

anges i

n the un

derl

ying p

ortf

olio.

Modelled prov

isons

Base

forecast

ECL

Supply chain

disrupton

ECL

w C

-1

variant ECL

rpor

ate, C

omme

rcial & In

stit

uto

nal Ba

nkin

437

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

455

ntral & o

ther i

tems

103

105

112

otal s

tage 1 a

nd 2 bef

ore over

lay

s and mul

tipl

e scen

ario

997

1,4

Sta

ge 1 and 2 m

anag

emen

t overla

323

Impact of

multiple economic scenarios

otal r

epor

ted s

tage 1 a

nd 2 ECL

265

Sta

ge 3 ECL

,94

otal EC

209

Includes $21 mil

lon management overlay

Proportion of

asset

s in

stage 2

Base

forecast

scenario

Supply chain

disrupton

scenario

w C

-1

variant

scenario

rpor

ate, C

onsu

mer & In

stit

uto

nal Ba

nkin

14.

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

1.6

ntral & o

ther i

tems

2.2

2.3

ota

4.2

4.6

xcl

ude

s cas

h and b

alan

ces a

t cent

ral b

ank

s, ac

cru

ed in

com

e, as

set

s he

ld for s

ale a

nd ot

her a

sse

242

Standard Chartered

– Ann

ual Re

por

t 2021

sk r

evi

Risk proﬁle

Signﬁcant increa

se in

redit risk (SICR)

Quantitatve

critera

SICR i

s ass

esse

d by compa

ring t

he ris

k of defa

ult at th

reporting date to the risk

of default at orignation.

ether a

chan

ge in th

e risk o

f defau

lt is signﬁc

ant or no

t is ass

ess

using qua

ntitatve and

qualitatve

critera. These quan

ita

tve

signﬁcant

eterioraton thresholds ha

een separately

deﬁn

ed for e

ach bus

ines

s and wh

ere me

aningf

ul are

consistently applied across business lines.

set

s are con

side

red to ha

ve exp

erien

ced SIC

R if they ha

bre

ache

d both r

elati

ve and abs

olut

e thres

hold

s for th

change in the avera

ge annualised lifetme pro

babilty of

def

ault over t

he resi

dual te

rm of th

e expo

sure.

The a

bsolu

te me

asure o

f incre

ase in cr

edit ri

sk is us

ed to

capt

ure ins

tance

s wher

e the PDs o

n expo

sures ar

e relat

ively

low at int

ial rec

ognit

on as th

ese ma

y incre

ase by seve

ral

mul

tiple

s with

out rep

resen

ting a si

gnﬁcant in

creas

e in cred

sk. Wh

ere PDs ar

e relat

ively h

igh at inti

al reco

gniton

, a

rel

ative me

asur

e is more a

pprop

riate i

n asse

ssin

g whet

her

the

re is a sign

ﬁcant incr

ease i

n credit r

isk

, as th

e PDs incre

ase

more quickly

The S

ICR thr

eshol

ds have b

een cal

ibrate

d bas

ed on th

foll

owing pr

incpl

es:

•

Sta

bilt

y – The t

hresh

olds ar

e set to ac

hieve a stab

le stag

e 2

pop

ulat

ion at a po

rtf

olio level

, tr

yin

g to minmi

se the

num

ber of a

ccount

s mov

ing bac

k and for

th be

twe

sta

ge 1 and st

age 2 in a sh

ort p

erio

d of time

•

Accura

cy – Th

e thre

shold

s are set s

uch th

at ther

e is a

materially higher propensity for stage 2 exposures to

event

ually d

efaul

t than is t

he cas

e for sta

ge 1 exp

osure

•

Dependenc

y from backstops – The thresholds are

str

ingent

eno

ugh suc

h that a hi

gh prop

orti

on of acco

unt

s tran

sfer

to st

age 2 due t

o moveme

nts in f

ward-lo

okin

g PDs

rat

her tha

n rely

ing on ba

ward-loo

king b

acks

tops s

uch

as arrear

•

Relationsh

p with business and product risk pr

oﬁles –

The t

hres

holds r

eﬂect t

he rela

tive ri

sk dif

feren

ces be

twe

diffe

rent product

s, and are aligned to busine

ss processe

For Corporate, Commercial and

stitutonal Banking c

lients,

the r

elati

ve thre

shol

d is a 100 p

er cent in

crea

se in PD and t

abs

olute c

hange i

n PD is bet

wee

n 50 and 10

0 bps

For C

onsum

er and B

usine

ss Ban

king c

lient

s, th

e relat

ive

thr

eshol

d is a 10

0 per cen

t incre

ase in PD an

d the abs

olut

chan

ge in PD is b

ween 10

0 and 350 b

ps dep

endin

g on the

product. Certain

countries have a

higher absolute

threshold

reﬂe

cting t

he lower d

efault r

ate wit

hn thei

r per

sonal l

oan

por

tfo

lios com

pared w

ith th

e Gro

’

s o

ther p

ers

onal lo

portfolios.

Pri

vate Ban

king cl

ient

s are as

ses

sed qu

alitat

vely

, b

ase

on a deli

quency measure relating

to collateral top-ups

sell-downs.

Deb

t secu

rite

s orign

ated b

efore 1 J

anuar

y 201

8 with an

intern

al credit rating mappe

d to an

investm

ent grade

equ

ivalen

t are allo

cated t

o stage 1 a

nd all ot

her deb

curit

es to st

age 2. D

ebt se

curit

es or

ignate

d aft

er 1 Janu

2018 ap

ply th

e same ap

proac

h and thr

eshol

ds as fo

Corporate, Commercial and Institutonal Banking cli

ent

Qualita

tve

ritera

alitat

ve facto

rs th

at indca

te that t

here h

as bee

n a

signﬁcant increase in credit r

isk include proces

ses linked to

current risk management, such as

placing loans on non-

urely

precaut

ionar

y early aler

Backstop

Acros

s all por

tfo

lios, a

ccoun

ts th

at are 30 o

r more da

ys pa

due (D

) on cont

ractu

al pay

ment

s of pr

incpa

l and/

inte

rest t

hat ha

ve not be

en capt

ured by th

e crit

era ab

ove

are co

nside

red to h

ave exp

erien

ced a sig

nﬁcant inc

reas

e in

credit risk

xpe

rt cre

dit judg

ement m

ay be a

pplied i

n ass

essin

signﬁc

ant incre

ase in c

redit r

isk to t

he exte

nt that ce

rtai

n risk

y not ha

ve been ca

ptur

ed by the m

odel

s or thro

ugh th

above cr

iter

a. Suc

h insta

nces are e

xpec

ted to b

e rare, fo

exampl

e due to eve

nts an

d mate

rial un

cert

ainte

s arisn

clo

se to th

e repor

ting d

ate.

Corporate, Commercial and I

stitutonal Banking clients

Quantitatve

critera

xpo

sures ar

e ass

esse

d bas

ed on bo

th the a

bsol

ute and t

rel

ative move

ment in t

he PD fro

m orign

ation t

o the re

por

ting

dat

e as des

cribe

d above.

o accoun

t for th

e fact th

at the ma

pping b

ween in

tern

cre

dit grade

s (

used i

n the or

ignat

ion pro

cess

) an

d PDs is

non-l

inear (

e.g. a o

ne-no

tch dow

ngrade i

n the inves

tment

grad

e univer

se re

sult

s in a muc

h smalle

r PD incre

ase th

an in

the sub-

inves

tment grade u

niverse

)

, the absolu

te thres

holds

have b

een di

ffer

entat

ed by cre

dit quali

y at orign

atio

n, as

asure

d by inter

nal cre

dit grad

es bein

g investm

ent gra

or sub-in

vestment grade.

Qualita

tve

ritera

All a

sset

s of cl

ient

s that h

ave be

en place

d on ear

ly ale

(

for non-

purely precautionar

asons

)

are deemed to

have e

xper

ience

d a signﬁcan

t incre

ase in cr

edit r

isk.

An account

is placed on

non-purely precautionar

y early alert

if it ex

hibt

s risk o

r pote

ntial we

akne

sses o

f a mate

rial na

ture

requirng closer

onitor

super

vison or

attention by

man

ageme

nt. W

eak

nes

ses in su

ch a bor

rower

’

s acc

ount

, if

left uncorrected, could result

in deterioraton of repayment

pros

pect

s and t

he likelho

od of b

eing dow

ngrad

ed. In

dicator

cou

ld inclu

de a rapid e

rosio

n of pos

iton wi

thn the i

ndust

concerns ov

er management

’

s abil

y to manage operations,

weak/

deterioratng operat

ing results, liqudit

y strain and

over

due balances, among other

factor

All cl

ient as

set

s tha

t have be

en as

signe

d a CG12 ratin

equ

ivalen

t to ‘Hig

her ri

’

, are d

eeme

d to have e

xper

ience

a signﬁc

ant incre

ase in c

redit r

isk

. Account

s rat

ed CG12 are

man

aged by t

he GSAM u

nit. A

ll Cor

porat

e, Comm

ercial an

Ins

titu

tonal B

ankin

g clien

ts are p

laced i

n CG12 when t

hey

are 30 D

PD unle

ss they a

re grante

d a waiver t

hroug

h a stri

governance proce

ss.

Consumer and Business Banking clients

Quantitatve

critera

Mat

erial p

ort

folio

s (

deﬁned a

s a combin

aton o

f count

and product, for e

xample Hong K

ong mortgages

, T

aiwan

cre

dit cards

) f

or which a s

tati

stcal mo

del ha

s bee

n built

, are

assessed based on both

the absolute a

nd relative

movement

in th

e PD from o

rigna

tion to t

he rep

orti

ng date a

s desc

ribe

iousl

y in pag

e 23

3. For th

ese p

ortf

olios

, the or

ignal

life

tme PD te

rm str

uctu

re is de

termi

ned ba

sed o

n the or

ignal

App

licato

n Score o

r Risk Se

gmen

t of the cl

ient

Qualita

tve

ritera

Accou

nts t

hat are 3

0 DPD that h

ave not b

een ca

pture

d by

the q

uanti

tatve c

riter

a are con

sider

ed to ha

ve expe

rien

ced

a signﬁc

ant incre

ase in c

redit r

isk

. For les

s mate

rial p

ortf

olios

whi

ch are mo

delle

d base

d on a roll-r

ate or lo

ss-rate ap

proa

ch,

SICR i

s prim

arly a

sses

sed t

hroug

h the 30 D

PD trig

ger

243

Standard Chartered

– Ann

ual Re

por

t 2021

sk rev

iew and C

api

tal r

eview

Privat

e Bank

ing cl

ient

For Pr

ivate B

ankin

g client

s, S

ICR is as

ses

sed by re

feren

cing

the n

atur

e and the l

evel of coll

atera

l again

st which c

redit i

exte

nded (k

nown a

s ‘Clas

ses of Ri

’).

Qualita

tve

ritera

For all Pr

ivate B

anki

ng clas

ses

, in line w

ith ri

sk mana

geme

prac

tice, an in

crea

se in cre

dit ris

k is dee

med to h

ave occu

rred

whe

re margi

nng or lo

an-to-valu

e covenant

s ha

ve been

breached.

For Cl

ass I as

set

s (len

ding ag

ainst di

versﬁe

d liqud co

llate

ral),

if th

ese mar

ginng re

quire

ment

s have n

ot bee

n met wi

thn

30 da

ys of a tr

igge

, a sig

nﬁcant incr

ease i

n credit r

isk is

assumed to have occurred.

For Cl

ass I an

d Clas

s III ass

s (

real-

estat

e lendin

, a

signﬁc

ant incre

ase in c

redit r

isk is a

ssum

ed to ha

ve occur

red

whe

re the b

ank is un

able to ‘se

ll down’ th

e appli

cable as

set

to me

et revi

sed co

llater

al requ

ireme

nts w

ithn ﬁve d

ays of

a trigger

Cla

ss II as

set

s are t

ypi

cally un

secu

red or p

arti

ally se

cured

or se

cure

d again

st illqui

d collat

eral suc

h as shar

es in pri

vate

comp

anies

. Signﬁcan

t credi

t deter

iorat

on of th

ese as

set

s is

dee

med to h

ave occ

urre

d when any e

arly a

lert t

rigg

er has

been br

eached.

Debt securites

Quantitatve

critera

For de

bt sec

urit

es ori

gnate

d befor

e 1 Janua

y 2018, t

he bank

is ut

ilsing t

he low Cre

dit Ris

k simplﬁe

d appro

ach, wh

ere

deb

t secur

ite

s with an in

tern

al cred

it ratin

g mappe

d to an

invest

ment gr

ade equ

ivalen

t are allo

cated t

o stage 1 a

nd all

oth

er deb

t secur

ites a

re alloc

ated to s

tage 2

. Debt s

ecur

ites

ignate

d aft

er 1 Janu

y 2018 are a

sses

sed b

ase

d on the

abs

olute a

nd rela

tive move

ment

s in PD fro

m orign

ation t

the r

epor

ting d

ate.

Qualita

tve

ritera

Deb

t secu

rite

s utils

e the sa

me quali

tatve c

riter

a as th

Corporate, Commercial and Institutonal Banking cli

ent

gment

s, in

cludn

g being p

lace

d on ear

ly aler

t or bei

cla

ssif

ed a

s CG12.

ses

sme

nt of c

redi

t-imp

are

d ﬁnan

cal a

ets

Consumer and

Business Banking cl

ients

The core components in determinng c

redit

impared

exp

ecte

d credit l

oss pr

ovison

s are th

e value of gr

oss cha

rge-

f and re

coveries

. Gro

ss cha

rge-o

ff and/

or lo

ss prov

isons a

recognised when it

is established that

he ac

count is unlik

to pa

y thro

ugh th

e norm

al proce

ss. Re

cover

y of un

secu

red

deb

t post cr

edit imp

arm

ent is re

cognis

ed ba

sed on a

ctual

cash c

ollec

ted, ei

ther dir

ectl

y from c

lient

s or thr

ough t

he sale

of de

fault

ed loa

ns to thi

rd-par

ty i

nstt

ution

s. Rele

ase o

f credit

imp

armen

t provis

ons fo

r secur

ed loa

ns is re

cognis

ed if th

loa

n out

stand

ing is pa

id in fu

ll (

rele

ase o

f full p

roviso

)

, o

r the

prov

ison is hi

gher th

an the l

oan out

sta

nding (

elea

se of th

excess provison

)

Corp

orate, Comme

rcial and Instit

utonal Banking, and Pri

Banking c

lients

Cre

dit

-impare

d accou

nts ar

e manag

ed by the G

roup’

spe

cialst r

ecover

y un

it, G

roup Sp

ecial A

sse

ts M

anage

ment

(

GSA

, w

hich is in

depe

ndent f

rom it

s main b

usine

sse

Where an

y amount is considered irreco

verable, a stage

credit impa

rment pro

vison is

raised. This stage 3 pro

is

on is

the dif

ference bet

ween the loan-car

ying amount and the

prob

abilt

y-weigh

ted pre

sent val

ue of es

timat

ed fu

ture c

ash

ﬂows

, reﬂec

ting a ran

ge of sc

enari

os (

ypi

cally th

e best

, wor

and m

ost likel

y recover

y o

utcom

)

. W

here th

e cashﬂ

ows

include realisable

collateral, the v

alues used will incorporate

the impact of

for

ward-looking

economic informaton.

The indvi

dual circumstances of ea

ch client are considered

whe

n GSAM es

timat

es f

uture c

ashﬂow

s and the t

imng of

ture r

ecoveri

es whic

h involves si

gnﬁcant ju

dgeme

nt. A

available

urc

es, such as cash

ﬂow a

is

rom operations,

sel

ling as

set

s or sub

sidar

ies, r

ealisn

g collat

eral or p

aym

ent

under guarantees a

re considered. I

n any decis

on relating

to th

e raisn

g of provi

sons

, the G

roup at

tempt

s to b

alance

eco

nomic co

ndito

ns, l

ocal kn

owled

ge and ex

per

ience, an

the r

esult

s of in

depe

ndent a

sse

t reviews

rite-of

Whe

re it is con

sider

ed tha

t ther

e is no rea

listc p

rospe

of re

coverin

g a por

tion of an e

xpos

ure aga

inst wh

ich an

imp

armen

t provis

on has b

een rai

sed, t

hat amo

unt wi

be w

ritt

en off.

Gov

ernance and applicaton

of ex

pert credit judgement in

spe

ct of exp

ect

ed cr

edit l

oss

The Gro

’

s Credit Policy and St

andards framewor

k details

the requirements for continuous

onitor

ng to identf

y a

chan

ges in cr

edit qu

alit

y and re

sulta

nt ratin

gs, a

s well as

ensuring a consistent

approach to

onitor

managing

and mi

tgat

ing Cred

it Risk

s. Th

e fram

ework ali

gns wit

h the

gover

nance o

f ECL estim

aton t

hroug

h the ea

rly re

cognit

on

of sig

nﬁcant det

erio

raton

s in rati

ngs whi

ch dri

ve stage 2

and 3 ECL

The m

odel

s use

d in dete

rminn

g expe

cted cre

dit los

ses

are rev

iewed an

d approved by t

he Gro

up Cre

dit Mod

Asse

ssment Committee (

CMA

C) which is a

ppointed by

the M

odel R

isk Co

mmitt

ee. CMAC has t

he resp

onsi

blit

to as

ses

s and app

rove the us

e of mod

els and t

o review

all IFR

S 9 inter

preta

tons r

elate

d to mod

els

. CMAC also

provides o

versight on operational matters related to

del

development, performance monitor

ng and model v

alidaton

activties includ

ng standards, regulator

y and

Group Internal

Audi

t matters.

Prio

r to sub

misso

n to CMAC for app

roval, the m

odel

s are

valida

ted by G

roup Mo

del V

ali

daton (GMV), a f

unctio

n which

is in

depen

dent o

f the bu

sines

s and th

e mode

l develop

ers

GMV’s a

alysis

compris

review

of model documentation,

del des

ign and m

etho

dolog

, dat

a validat

on, rev

iew of

the model dev

elopment and calibrat

on process, out

-of

sample pe

rformance te

sting, and ass

essment of comp

liance

revi

ew again

st IFRS 9 r

ules an

d inter

nal st

andard

A quarterly model monitorng pr

ocess is in plac

e that uses

rec

ent dat

a to comp

are the di

ffe

rence

s bet

ween m

odel

predicton

s and actual outcomes ag

ainst approved

thresholds. Where a model’

s perfor

mance

breaches the

mon

itorn

g thre

shold

s, an as

ses

smen

t of whe

ther a PMA i

required to c

rect

for the ident

ﬁed model issue is completed.

Key input

s int

o the calc

ulati

on and re

sulti

ng exp

ected c

redit

los

s provi

sons are s

ubjec

t to review a

nd approval by t

he IFRS 9

Imp

airme

nt Com

mitte

e (IIC) wh

ich is app

ointe

d by the G

roup

Risk Committee. The IIC c

sists of senior representatives

fro

m Risk

, Finance

, and Gro

up Econo

mic Rese

arch. It m

eet

s at

lea

st t

wice eve

y quar

ter

, o

nce be

fore th

e mode

ls are r

un to

appr

ove k

ey i

nput

s into t

he calcu

latio

n, and o

nce aft

er the

dels are r

un to a

pprove the e

xpe

cted cre

dit los

s provi

sons

and any ju

dgem

ental over

rid

es that m

ay be n

eces

sar

244

Standard Chartered

– Ann

ual Rep

t 2021

sk r

evi

Risk proﬁle

The IFRS 9

Imp

airment Committee:

•

Ove

rse

es th

e approp

riate

nes

s of all Bu

sines

s Mode

ses

smen

t and Sol

ely Pay

ment

s of Pr

incpal a

nd Inte

rest

(SP

) t

•

Review

s and appr

oves expe

cted c

redit lo

ss for ﬁ

nancal

set

s clas

sif

ed as s

tage

s 1, 2 and 3 fo

r each ﬁn

ancal

reporting

period

•

Review

s and appr

oves stag

e alloca

tion r

ules an

d thre

shold

•

App

roves mat

erial a

djust

ment

s in rel

ation t

o expe

cted

credit loss for fai

r value

hrough

ther compr

ehensive

inco

me (F

CI) and amo

rti

sed cos

t ﬁnancal a

sse

•

Review

s, chal

lenge

s and app

roves bas

e macro

econ

omic

forecasts and the multiple mac

roeconomic scenarios

appr

oach t

hat are ut

ilse

d in the fo

ward-loo

king ex

pect

credit los

s calculations

The I

FRS 9 Imp

airme

nt Comm

itte

e is supp

ort

ed by an E

xpe

Panel w

hich al

so review

s and cha

lleng

es the b

ase ca

projectons

and multiple

macroeconomic scenarios. The

xpert Panel

consi

sts of members of Enterprise Risk

Management

(

which

includes the Scenario

Design team

)

Financ

e, Gro

up Econom

ic Resea

rch and cou

ntr

representat

ives of

ajor jursdictons.

PMA

s may be a

pplie

d to accou

nt for id

entﬁe

d weakn

esse

s in

model estimates.

The processes for id

entfying the need for

calcu

latin

g the leve

l of

, and a

pprovin

g PMAs ar

e pres

cribe

in th

e Credit R

isk IFRS9 ECL M

odel F

amily S

tandar

ds whic

are ap

proved by th

e Glob

al Hea

d, Mod

el Risk M

anage

ment

PMA calc

ulati

on met

hodo

logie

s are revi

ewed by GMV an

sub

mitte

d to CMAC as th

e mode

l approver or t

he IIC

. Al

l PMAs

have a r

emed

iaton p

lan to ﬁx t

he iden

tﬁed mo

del weak

nes

and t

hese p

lans are r

epor

ted t

o and tra

cked at CMAC

In add

iton

, Risk Event O

ver

lays a

ccount f

or event

s that a

sud

den and t

heref

ore no

t captu

red in th

e Bas

e Case Fo

reca

or th

e resul

ting ECL ca

lculat

ed by the m

odel

s. All R

isk Event

Ove

rla

ys must b

e approve

d by the IIC h

avin

g cons

idere

d the

nat

ure of t

he event

, why the r

isk is n

ot capt

ured in t

he mod

el,

and t

he bas

is on whi

ch the qu

antu

m of the over

lay h

as bee

calcu

late

d. Risk Eve

nt Over

lay

s are subj

ect to qu

arte

rly rev

iew

and re

-appr

oval by the IIC a

nd will b

e rele

ased w

hen th

e risk

are no l

onge

r relevant

245

Standard Chartered

– Ann

ual Rep

t 2021

sk rev

iew and C

api

tal r

eview

raded R

isk

raded R

isk is t

he pot

ential f

or los

s resul

ting f

rom act

ivti

und

erta

ken by the G

roup in ﬁn

ancal mar

ket

s. Unde

r the

Enterprise Risk Management F

ramework, the T

raded Risk

Framewo

rk bri

ngs to

geth

er Mar

ket Risk

, Coun

terp

art

y Cre

dit

Risk and

Algorithmc T

rading. T

raded Risk Management

is the core

isk

anagement

unction supporting mark

facing busin

esses

, predominantl

y F

inan

cal

arkets and

Market Risk (

audited)

Mar

ket Risk is t

he po

tenti

al for lo

ss of ec

onomi

c value du

to ad

vers

e chang

es in ﬁnan

cal mar

ket rates o

r price

The Group

’

s exposure to Market

Risk arises predominantly

fro

m the fo

llowin

g sourc

es:

•

rading book:

–

he Gro

up provi

des clie

nts a

cces

s to ﬁnanc

al market

faci

ltatio

n of whic

h entail

s the G

roup ta

king m

odera

Mar

ket Risk p

osito

ns. A

ll tradi

ng team

s supp

ort cl

ient

activty

. There ar

e no pr

oprietar

y tradi

ng teams. Henc

income earned from Mark

et Risk

-related ac

vties

pri

marl

y drive

n by the volu

me of cli

ent acti

vt

y rat

her

than ris

-taking

•

Non-trading

ook:

–

he T

reasu

y Market

s de

sk is req

uired t

o hold a li

qud

set

s buf

fer, much of w

hich is he

ld in high-

qualit

marketable debt

secur

it

–

he Gro

up has ca

pital inves

ted an

d relat

ed inco

str

eams d

enomin

ated i

n curre

ncies o

ther t

han US do

llars

o the ext

ent tha

t thes

e are not h

edge

d, the G

roup i

subject to

tructural For

eign Exchange R

isk which is

reﬂe

cted in r

eser

A sum

mar

y of ou

r curr

ent pol

ices and p

ractic

es rega

rding

Mar

ket Risk m

anage

ment is p

rovide

d in the Pr

incpa

l Risk

section (page 2

67).

The p

rimar

y cate

gori

es of Ma

rket Risk f

or the G

roup a

re:

•

Inte

rest Rat

e Risk: a

risn

g from ch

ange

s in yiel

d cur

ves and

impl

ed volat

iltie

s on inter

est rat

e optio

•

Fore

ign E

xchange Rat

e Risk

: arisn

g from c

hange

s in

cur

renc

y exchang

e rates a

nd imple

d volat

ilties o

n forei

excha

nge options

•

Com

modit

y Ri

sk: ar

isng f

rom ch

anges in c

ommo

dit

y pric

and im

pled vol

atilti

es on com

modit

y o

ption

s; coverin

ene

rgy

, pr

eciou

s metal

s, ba

se met

als and a

gricu

lture a

well a

s commo

dit

y bas

kets

•

Cre

dit Spre

ad Risk

: ari

sng fro

m chang

es in th

e price o

f debt

instrument

s and credi

-l

inked derivatves, driven b

y factors

oth

er tha

n the level o

f risk-fre

e intere

st rate

•

Equit

y Ri

sk: ar

isng f

rom chan

ges in t

he pri

ces of eq

uites

equ

y indces

, equ

y basket

s and i

mpled vo

latilt

ies on

related options

Market risk changes (

audite

alue

-at Ris

k (V

aR) allows t

he Gro

up to ma

nage ma

rket ri

acro

ss th

e tradin

g boo

k and mos

t of the f

air value

d non-

trading bo

oks

. The s

cope o

f instr

ume

nts i

nclud

ed in th

aR was ch

ange

d in 2021 to exclud

e inst

rum

ent

s held at

amo

rtis

ed cos

t. Th

e 20

20 V

aR n

umbe

rs pre

sent

ed reﬂe

the r

evise

d scop

The a

verage l

evel of to

tal tra

ding and n

on-tra

ding V

aR in

2021 was $5

4.8 m

illon, 43

9 pe

r cent lowe

r than in 2020 (

$97

millo

)

. T

he actu

al level of t

otal t

rading a

nd non-t

rading V

as at t

he year en

d of 2021 was $

43.4 mi

llon, 65

.3 p

er cent l

ower

tha

n in 20

20 (

$12

5.2 m

illon

). The de

crea

se in tot

al avera

aR was dr

iven by th

e extre

me mar

ket moveme

nts f

rom 2020

drop

ping ou

t of the o

ne-year V

aR t

imes

eres

. However, durin

cond hal

f of 2021 volati

lt

y start

ed to in

creas

e dri

ven by the

imp

act of new COVID vari

ant

For t

he trad

ing boo

k, t

he avera

ge level of V

R in 20

21 was

$17

2 millo

n, 1.

2 per ce

nt highe

r than in 2020 ($17

.0 millon)

rading activti

es have

remained relativ

ely unchang

ed and

client

driven.

Dai

ly value a

t risk (

aR at 9

5%, on

e day) (

audi

ted)

rading

and non-trading

2021

2020

verage

$millon

High

$millon

Low

$millon

erage

$millo

High

$millo

Low

$millo

ear End

$millo

Interest

Rate

Risk

31.

68.3

16.

6.0

8.0

Cre

dit Spr

ead Ri

4.0

14.8

21.

20.

1.0

Foreign Exchang

e Risk

6.3

3.0

Commo

dity Risk

4.5

0.4

2.3

3.6

2.5

0.7

Equity Risk

1.3

1.0

1.4

2.6

1.5

54.8

140.

0.7

43.4

135

125

rading

2021

2020

verage

$millon

High

$millon

Low

$millon

erage

$millo

High

$millo

Low

$millo

ear End

$millo

Interest

Rate

Risk

5.2

8.4

12.

5.0

9.1

Cre

dit Spr

ead Ri

8.6

4.2

6.2

13.0

4.8

Foreign Exchang

e Risk

6.3

3.0

Commo

dity Risk

4.5

0.4

2.3

3.6

2.5

0.7

Equity Risk

–

28.4

15.

8.3

4.7

246

Standard Chartered

– Ann

ual Rep

t 2021

sk r

evi

Risk proﬁle

Non-trading

2021

2020

verage

$millon

High

$millon

Low

$millon

erage

$millo

High

$millo

Low

$millo

ear End

$millo

Interest

Rate

Risk

8.2

18.

24.3

34.7

4.5

21.6

Cre

dit Spr

ead Ri

0.0

14.4

20.

66.5

Equity Risk

1.3

1.7

1.4

2.6

106

25.

8.3

he no

n-tr

adi

ng bo

ok V

R doe

s not i

nclu

de s

ynd

icat

ed lo

ans

. 2020 non

-tra

din

g boo

k V

aR i

s res

tate

d to re

ﬂec

t the r

evis

ed sc

ope

ghe

st and l

owes

t V

aR f

or ea

ch ri

sk fa

ctor a

re in

dep

ende

nt an

d usu

ally o

ccu

r on dif

rent d

ays

he T

al V

R show

n in th

e tab

les a

bove is n

ot e

qual t

o the s

um of t

he co

mpo

nent r

ks du

e to of

s bet

en th

din

g boo

k for M

arke

t Risk i

s deﬁ

ned i

n acco

rdan

ce wi

th th

e UK on

sho

red C

apit

al Req

uire

men

ts Re

gul

ati

on Par

t 3 T

itl

e I Cha

pte

r 3, wh

ich re

str

ict

s the p

osi

to

rmi

tte

d in th

e trad

ing b

ook

Non-trading E

quity Risk V

aR i

cludes

only listed equites

omp

arat

ive i

nfor

mat

on f

or 2020 ha

s bee

n rep

res

ente

d to re

ﬂec

t the sp

lit b

wee

n Inte

res

t Rate R

isk an

d Cre

dit Sp

rea

d Ris

The f

ollowi

ng tabl

e set

s out how t

radin

g and non-t

radin

g V

aR is dis

trbu

ted ac

ross t

he Gro

’

s p

rodu

cts:

2021

2020

verage

$millon

High

$millon

Low

$millon

erage

$millo

High

$millo

Low

$millo

ear End

$millo

rading

and non-trading

54.8

140.

0.7

43.4

135

125

rading

Rates

4.8

8.5

Foreign Exchang

6.3

3.0

Credit T

rading & Capital Markets

18.7

3.6

4.8

14.

3.3

Commo

dites

4.7

0.4

2.5

3.8

2.5

5.5

Equi

tes

–

5.2

2.5

13.7

28.4

15.

8.3

4.7

Non-trading

reasury Markets

40.

36.4

4.7

24.7

71.8

reasury Capital Management

6.5

10.

4.6

Glob

al Credit

5.2

11.7

2.3

2.7

Lis

ted Pr

ivate Eq

uit

1.7

1.0

1.4

106

25.

8.3

he no

n-tr

adi

ng bo

ok V

R doe

s not i

nclu

de s

ynd

icat

ed lo

ans

. 2020 non

-tra

din

g boo

k V

aR i

s res

tate

d to re

ﬂec

t the r

evis

ed sc

ope

ghe

st and l

owes

t V

aR f

or ea

ch ri

sk fa

ctor a

re in

dep

ende

nt an

d usu

ally o

ccu

r on dif

rent d

ays

he T

al V

R is no

t equ

al to t

he su

m of th

e comp

one

nt ri

s due t

o off

ts b

wee

n the

din

g boo

k for M

arke

t Risk i

s deﬁ

ned i

n acco

rdan

ce wi

th th

e UK on

sho

red C

apit

al Req

uire

men

ts Re

gul

ati

on Par

t 3 T

itl

e I Cha

pte

r 3, wh

ich re

str

ict

s the p

osi

to

rmi

tte

d in th

e trad

ing b

ook

Ris

ks no

t in V

In 2021, t

he main m

arket ri

sks n

ot reﬂe

cted in V

R were:

•

Potential

dep

eg risk from

cur

renc

ies currently pegged or managed,

the historcal

one-year V

aR obser

vation period does

not r

eﬂect t

he pos

siblit

y of a c

hange i

n the cur

renc

y regi

me such a

s sudd

en dep

eggin

•

sis ri

sks fo

r which t

he hist

orcal m

arket pr

ice dat

a is limte

d and is t

heref

ore prox

ied, gi

vng r

ise to p

otent

ial prox

y ba

sis ri

tha

t is not ca

pture

d in V

•

al conti

ngent r

isk wh

ere a clie

nt is gran

ted th

e righ

t to cance

l a hedgi

ng trad

e conti

ngent o

n condit

ons no

t bein

g met

wit

hn a time w

indow

•

ola

tilt

y skew ris

k due to m

ovement

s in op

tion

s volatil

ties at di

ffe

rent st

rikes wh

ile V

aR reﬂe

cts o

nly move

ment

s in at

-the

money

volatil

ties

Addit

onal cap

ital is s

et asid

e to cover suc

h ‘

isk

s not in V

’

. For f

urt

her det

ails on M

arket Ri

sk capit

al, see t

he Mar

ket Risk

ction in t

he Stan

dard Ch

arte

red PL

C Pi

llar 3 Dis

closu

res fo

r 31 Dece

mber 2021

247

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Backtesting

In 2021, t

here wer

e three r

egul

ator

y b

ackte

sting n

egat

ive except

ions at G

roup l

evel (

n 20

20, th

ere were t

hree r

egula

tor

bac

ktest

ing ne

gati

ve exceptio

ns at G

roup leve

. G

roup exce

ption

s occur

red on:

•

18 Oc

tobe

r: Whe

n market

s fe

ll and yie

lds ro

se follow

ing ha

wki

sh cent

ral bank co

mmen

ts an

d higher t

han exp

ecte

d core

inﬂat

on res

ults i

n New Zeala

•

26 October: When N

igeran FX Non

Deliverable For

ard ﬁxngs dropped sharply

, rais

ng impled Non Del

iverable F

ward

yie

lds; oil p

rices a

nd opt

ions im

pled vol

atilti

es also f

ell

•

1 De

cembe

r: Whe

n oil and ﬁn

ancal ma

rket

s fell wi

th conc

erns a

bout t

he efﬁ

cacy o

f CO

VID

19 vaccin

es agai

nst th

Omicron variant

In to

tal, th

ere have b

een t

hree G

roup exce

ption

s in the p

reviou

s 250 bu

sine

ss day

s which i

s withn t

he ‘

gree

n zone’ appl

ied

internatonally to

internal models by bank supervisor

s (

Basel Committee on Banking Super

vison,

Sup

ervis

ory framework for

the u

se of ba

cktes

ting in co

njunc

ton wit

h the in

tern

al mode

ls appr

oach to m

arket r

isk capi

tal req

uireme

nts

, Janu

y 1996

The g

raph be

low illus

trate

s the pe

rfor

mance o

f the V

aR m

odel u

sed in ca

pital cal

culat

ions

. It comp

ares th

e 99 pe

rcent

ile los

conﬁd

ence leve

l given by th

e V

aR mod

el with t

he hyp

othet

ical pro

ﬁt and los

s of ea

ch day gi

ven the a

ctual m

arket move

ment

wit

hout t

aking i

nto acco

unt any int

ra-da

y tradin

g activ

t

-50

-40

-30

-20

-10

2021 Back

tes

ting char

Int

erna

del appr

oach reg

ulat

rad

ing book at

rou

level

Hyp

oth

eti

cal

roﬁ

and los

(P&L) v

rsu

aR (99 per cent

)

Hypot

hetical

P&L

Pos

it

VaR at

ega

tiv

VaR at

Negative

exceptions

202

eb 2021

ar 2021

pr 2021

y 2021

Jun 2021

ul 2021

Aug 2021

ep 2021

202

021

ec 2021

Positve

excepti

ons

radi

ng loss day

2021

2020

Num

ber o

f loss d

ays re

por

ted f

or Finan

cal Mar

kets t

radin

g boo

k tota

l prod

uct inc

ome

Reﬂe

s tot

al pro

duc

t inco

me fo

r Fina

ncal M

ark

ets

•

clud

ing cr

edi

t valu

ati

on adj

ust

men

t (

A) and f

und

ing va

luat

ion a

dju

stm

ent (F

•

xclu

ding Treas

y Ma

rket

s bu

sin

ess (non

-tra

ding

) and p

eri

odc va

lua

tion c

han

ges f

or Cap

ita

l Mar

ket

s, ex

pec

ted l

oss p

rovi

son

s and ov

ern

ight i

nde

xed sw

(

OIS) discountng and

accounting adjustments such as debit

valuation adjustments

ver

age da

ily in

come e

arne

d from M

arket Ri

sk-rela

ted a

cti

vti

es¹

The a

verage l

evel of to

tal tra

ding dail

y incom

e in 2021 was $9

.8 mi

llon, 8

.4 per cen

t lower th

an in 202

0 ($10.

7 millon

), due t

lower t

rading i

ncome co

mpare

d to pr

ior year w

hich ha

d witne

sse

d unpre

cede

nted l

evels of ma

rket vola

tilt

y and h

ence

incr

ease

d trad

ing acti

vt

y and w

ider sp

read

rading

2021

$millon

2020

$millo

Interest

Rate

Risk

3.3

3.6

Cre

dit Spr

ead Ri

0.9

Foreign Exchang

e Risk

4.7

Commo

dity Risk

0.9

Equity Risk

–

10.7

Non-trading

$millon

$mi

llon

Interest

Rate

Risk

0.4

Cre

dit Spr

ead Ri

0.2

Equity Risk

–

0.6

1.4

Reﬂe

s tot

al pro

duc

t inco

me wh

ich i

s the s

um of cl

ien

t inco

me an

d own ac

cou

nt inc

ome. I

ncl

ude

s ele

ment

s of t

rad

ing in

com

e, int

ere

st inc

ome a

nd ot

her in

com

ich ar

e gen

erat

ed f

rom Ma

rket R

isk-re

lat

ed act

iv

tie

s. Rat

es, X

A an

d T

rea

sur

y i

ncom

e are i

nclu

d unde

r Int

ere

st Rate R

isk w

hil

st Cre

dit T

adin

g inc

ome i

included under

Credit Spread

Risk

2020 ﬁg

ures h

ave b

een r

est

ate

d to excl

ude i

nco

me fr

om no

n fair va

lue p

osi

ton

248

Standard Chartered

– Annu

al Rep

ort 202

sk r

evi

Risk proﬁle

ruc

tur

al for

eign exch

ange ex

pos

ures

The t

able b

elow set

s ou

t the pr

incpal s

tru

ctura

l foreig

n exchange e

xpos

ures (

et of invest

ment h

edge

) of the G

roup.

2021

$millon

2020

$millo

Hong K

ong dollar

4,757

739

Indian rupe

323

4,222

Renminb

186

,07

Singapore dol

lar

228

2,543

Korean

won

1,756

2,856

aiwanese dollar

556

dirham

643

1,863

Malay

sian ringgt

532

1,575

Thai baht

775

892

Indones

ian

rupiah

289

Pakistan rup

Other

,42

33,54

As a

t 31 Dece

mber 2021

, the G

roup ha

d taken net i

nvestme

hed

ges us

ing der

ivat

ve ﬁnancal i

nvestme

nts t

o part

cover it

s exp

osure t

o the Kore

an won of $2,

856 m

illon

(2020: $1,

4 millo

)

, T

aiwa

nese d

ollar of $

1,14

9 m

illon (2020:

34 mil

lon

), R

enmi

nb of $1

42 millon (2020: $1,

527 mil

lon

Indi

an rup

ee of $

656 mil

lon ( 202

0: $

652 millo

)

, H

ong Kong

doll

ar of $

5 millon (2020: Nil), U

AE di

rham o

f $1,198 millon

(2020: Nil) and Sin

gapo

re dolla

r of $72

9 millon (2020: Nil).

An an

alysi

s has be

en per

for

med on t

hese e

xpos

ures to a

sse

the i

mpact o

f a 1 per cen

t fall in th

e US doll

ar exchang

e rates

adjusted to inc

orporate the impacts of correlations of

thes

cur

rencie

s to the U

S dollar. The im

pact on t

he pos

iton

s above

woul

d be an inc

reas

e of $39

9 millon (2020: $3

81 millon)

Chan

ges in t

he valuat

ion of t

hese p

osito

ns are ta

ken to

res

ves. F

or anal

ysis of t

he Gro

’s capital p

osito

n and

req

uirem

ent

s, ref

er to the C

apita

l Review (pag

e 288)

Counterparty Credit Risk

unter

par

ty C

redit Ri

sk is th

e pote

ntial fo

r loss i

n the event

of th

e defa

ult of a de

rivat

ve count

erp

art

, af

ter ta

king in

account the v

alue of elig

ble collaterals and

risk mitgation

tec

hniqu

es. Th

e Gro

’

s co

unte

rpar

y credi

t expo

sures ar

incl

uded i

n the Cre

dit Risk s

ecti

on.

Deriv

v

e ﬁnancal instruments Credit Risk mitgation

The Group enters into master netting agreements

, which

the eve

nt of def

ault re

sult in a si

ngle am

ount owe

d by or to

the c

ounte

rpar

y thro

ugh net

ting t

he sum of t

he po

sitve

and negative mark

-to-

market v

alues of applicable

der

atve

tran

sact

ions

. The valu

e of exp

osure u

nder m

aster n

etti

agre

emen

ts is $

,502 mi

llon (2020: $47

,097 millo

)

In add

iton

, the Gr

oup ent

ers i

nto cre

dit supp

ort an

nexes

(

SAs

) wit

h count

erp

arti

es whe

re collat

eral is d

eeme

d a

necessar

y or desira

ble mitgant to the

exposure. Cash

collateral incl

udes collateral called und

er a v

iaton margin

proces

s from counter

parties if total un

collateralised mar

-to-

mar

ket expo

sure exce

eds t

he thre

shol

d and minm

um tran

sfer

amo

unt spe

cif

ed in t

he CSA

. Wit

h cert

ain coun

terp

art

ies, t

CSA i

s recip

rocal an

d requi

res us to p

ost col

latera

l if the overa

mar

-to

-market val

ues of p

osito

ns are in t

he coun

terp

art

’

favour and

exceed a

n agreed threshold.

Liqudity and Funding Risk

Liqu

dit

y and Fun

ding Ris

k is the r

isk th

at we may n

ot have

suf

ﬁcent st

able or d

iver

se sou

rces of f

undi

ng to me

et our

obligatons as

y fall due.

The G

roup’

s Liq

udit

y and Fun

ding Ris

k fram

ework re

quire

eac

h count

y to ens

ure tha

t it oper

ates w

ithn pre

deﬁne

liqudit

y limts and remains in complian

ce with Group

liqu

dit

y poli

ces and pr

actice

s, as wel

l as loca

l regul

ator

requirement

The G

roup a

chieves t

his thr

ough a com

binat

on of se

tting

Risk A

ppet

ite and a

sso

ciate

d limt

s, po

licy fo

rmat

ion, r

isk

measurement and monitorng, prudential and internal stress

testing, go

vernance and

review

Des

pite th

e challe

nges b

rough

t by CO

VID

, the G

roup h

en resil

ent thr

ougho

ut and kep

t a stron

g liqudit

y p

osito

The G

roup c

ontin

ues to fo

cus on im

provng t

he qua

lit

y of it

nding m

ix and re

mains c

ommit

ted to su

ppor

ting i

ts cl

ient

during these u

ncertain ti

mes

Prim

y sour

ces of f

und

ing (

udit

ed)

The G

roup’

s f

unding s

trate

gy is l

argel

y drive

n by its p

olic

y to

maintan adeq

uate liqudit

y at

all times

, in

all ge

ographic

loc

ation

s and for a

ll curre

ncies

, and he

nce to be i

n a posit

on

to me

et all ob

ligato

ns as t

hey fall du

e. The G

roup

’s fu

nding

proﬁle is

therefore well d

ersﬁed across different sources,

maturites a

nd currencies.

Our asset

are funded predominantly b

y customer deposits,

sup

pleme

nted w

ith wh

oles

ale fu

nding (

whi

ch is diver

sﬁed by

ype a

nd mat

urit

e ma

intan acc

ess to w

hole

sale f

undin

g marke

ts in all m

ajor

ﬁnan

cal cent

res in wh

ich we ope

rate. Th

is see

ks to en

sure

tha

t we have ma

rket inte

llgen

ce, maint

an stab

le fu

nding

lines and can obtain opt

imal pricng when per

forming our

Interest Rate

Risk management activties.

In 2021, t

he Gro

up iss

ued app

roxima

tely $

6.8 b

illon of s

enior

deb

t secur

ite

s, $1.

2 billo

n of sub

ordina

ted de

bt secu

rite

and $2

.75 bil

lon of Addit

onal T

ier 1 se

curi

tes f

rom it

holding comp

any

(Ho

ldCo

) Standard Char

tered PL

. (2

.8 billo

n of ter

m senio

r debt

, $2.4 bi

llon of sub

ordin

ated

curit

es and $1 b

illon of Add

itona

l T

r 1)

. In t

he next

12 mo

nths ap

proxima

tely $

.5 b

illon of t

he Gro

’

s sen

ior deb

sub

ordin

ated de

bt and Addi

tonal T

ier 1 s

ecur

ites in t

otal ar

either fall

ing due for repayment contractually or

callable by

the G

roup.

249

Standard Chartered

– A

nnu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

oup’

s co

mpos

iti

of liab

iliti

31 Decemb

er 20

4.6

6.5

ogr

aph

ic dist

rb

uti

on of cus

tom

er acco

unt

31 Dece

mber 2021

Derivatve ﬁnancal

instrument

Deposits by banks

Debt securites in

issue

Customer accounts

Other liablites

Equity

Subordinated liablites

and other

orrowed

unds

65.5

6.4

100%

Asia

Africa &

Middle East

Europe &

America

100%

65.0

6.4

28.6

Liqudity and Funding

Ris

k metrics

e monitor k

ey liqu

dit

y metrics regularly at country

, regional,

and aggregate Group

level.

The f

ollowi

ng liqud

y and fu

nding B

oard Ri

sk App

etite

met

ric

s deﬁne t

he max

imum am

ount an

d ty

pe of r

isk th

at the

Gro

up is wi

llng to as

sume i

n pur

suit of it

s st

rateg

y: liqu

dit

coverag

e ratio (LCR

), liqud

y stres

s sur

ival hor

izon

s, exte

rnal

who

lesa

le bor

rowing

, and ad

vances-to

-dep

osit

s rati

o. As of

Janu

y 2022

, the Ne

t Stabl

e Fundin

g Ratio wil

l also be

includ

ed withn

Board Ri

sk Appetite

Liqudity cov

erag

atio (L

CR)

The LCR is a re

gulat

y req

uireme

nt set t

o ensur

e that t

Group has sufﬁcent

unencumbered high-quality liqud assets

to me

et it

s liqudi

ty n

eed

s in a 30-

calend

-da

y liqud

str

ess sc

enari

The Group monitors and reports its liqudity positons under

UK onshored Commisson Delegated R

egulation 2015

1 and

has m

aintan

ed it

s L

CR a

bove the pr

ude

ntial r

equire

ment

The G

roup m

aintan

ed str

ong liq

udit

y rati

os desp

ite th

cont

inue

d impac

ts of t

he CO

ID-

19 st

ress

. For f

urt

her de

tail

e the Liq

udit

y sec

tion in t

he Stan

dard Ch

arte

red PL

C Pi

llar 3

Disclosures for FY 20

21.

The LCR has r

emain

ed unch

ange

d at 143 per c

ent (2020:

143 p

er cent)

, de

spite r

evisng o

ur appr

oach to c

alcula

ting

the LCR. We have re-

asse

sse

d the me

tho

dolog

y to mor

udent

ly reﬂe

ct the p

ort

abilt

y of liq

udit

y acro

ss the G

rou

whilst still

considerng currency conve

rtiblity and regulator

intra group limt

s. Portable liqudit

y is deﬁned as uns

ecured

liqu

dit

, usu

ally in th

e form o

f cash

, that is f

ree

ly tran

sfera

ble

acro

ss Gr

oup ent

ites d

urin

g a peri

od of st

ress

, ther

eby

enab

ling th

e Gro

up to me

et it

s ﬁnancal o

bligat

ons as t

hey

fall due.

e als

o held a

dequ

ate liq

udit

y acro

ss our f

ootp

rint to m

eet

all local

udential L

CR requirements where applicable.

2021

$millon

2020

$millo

Liqudity buffer

2,178

,94

ota

l net cash outﬂ

ows

0,78

2,66

Liqudit

y c

overage ratio

143%

43%

Stressed co

verag

The G

roup i

ntend

s to main

tan a pr

udent a

nd sust

ainab

fun

ding and liqudity p

ositon, in all countrie

s and currencies,

suc

h that it ca

n with

stand a s

evere but p

laus

ible liq

udit

stress

Our appro

ach to managing liqudit

y and funding is reﬂe

cted

in th

e follow

ing Bo

ard-level Ri

sk App

etite S

tatem

ent

“The Group should hold an adequate buffer of h

igh-qualit

liqud

ssets to sur

vive

extreme but plausible liqu

dit

y stress

sce

nario

s for at le

ast 60 d

ays w

ithou

t reco

urs

e to

extraordinar

y cent

ral bank suppor

”

The G

roup’

s int

ernal l

iqudit

y st

ress t

esti

ng fram

ework cove

the f

ollowi

ng stre

ss sce

nari

os:

Standard Char

tered-spe

cifc – Captu

res the liqudit

y impact

fro

m an idos

yncr

atic event a

ffe

cting S

tanda

rd Char

tere

d only

i.e. th

e rest of t

he mar

ket is as

sume

d to ope

rate no

rmall

Mar

ket wide – C

aptu

res th

e liqudit

y im

pact f

rom a mar

ket

wid

e cris

s affe

cting a

ll part

icpan

ts in a co

untr

y, region

or globally.

Combined –

ssumes both

Standard Chartered

-specifc and

Mar

ket

-wide even

ts af

fect

ing th

e Grou

p simult

aneo

usly a

hen

ce is the m

ost seve

re scen

ario.

All s

cenar

ios incl

ude, b

ut are no

t limted t

o, mode

lled o

utﬂows

for retail and who

lesale fu

nding, Off

-B

alance Sheet Funding

Risk, Cross-currency Fund

ing Risk, Intraday R

isk, Franch

ise

Risk a

nd ris

ks as

soci

ated w

ith a det

erio

raton o

f a ﬁrm’

credit rating.

Str

ess te

stin

g result

s sh

ow that a p

osit

ve surpl

us was

main

tane

d under al

l scena

rios at 3

1 Decem

ber 2021, i

.e.

res

pect

ive coun

trie

s are able t

o sur

ve for a pe

riod o

f time

as de

ﬁned un

der ea

ch scen

ario. Th

e resu

lts t

ake into acco

unt

curren

cy convertiblit

y and portabilt

y constraint

s while

calculating

he l

iqudit

y s

urplus at Group lev

el.

Sta

ndard Ch

arte

red Ba

’s credit ra

tings a

s at 31 De

cembe

2021 were A

+ w

ith ne

gati

ve outl

ook (Fitch

), A

+ wi

th stab

out

look (S&P) and A1 with st

able ou

tloo

k (Mood

y’s

)

. At

31 De

cembe

r 20

21, t

he est

imate

d cont

ractu

al outﬂ

ow of a

thr

ee-no

tch lon

g-term r

ating

s downg

rade is $

1.7 bil

lon.

250

Standard Chartered

– Ann

ual Re

por

t 2021

sk r

evi

Risk proﬁle

External wholesale borrowing

The B

oard s

ets a r

isk lim

t to prevent e

xcessi

ve relian

ce on

wholesale borrowing. With

n the de

ﬁntion of Wholesale

Borrow

ing, limts are applied to all branch

es and operating

sub

sidar

ies in th

e Grou

p and as at t

he rep

orti

ng date

the G

roup r

emain

ed wit

hn Boar

d Risk Ap

peti

te.

Adv

ances-to

-deposits ratio

Thi

s is deﬁne

d as th

e ratio of t

otal lo

ans an

d advanc

es to

customers relative to

total customer ac

count

s. An adva

nces-

to-

depo

sit

s ratio of b

elow 10

0 per ce

nt demo

nstr

ates t

hat

cust

omer d

epos

its exce

ed cus

tomer l

oans a

s a resul

t of the

emphasis placed on

gen

erati

ng a hig

h level of funding

from customers.

The G

roup’

s ad

vances-to

-dep

osit

s ratio h

as dec

reas

ed by

2.0 pe

r cent to 59

.1 per cent

, dri

ven by an 8 per ce

nt growt

in cus

tomer d

epos

its

, most o

f which c

ame fro

m corp

orate

customers

2021

$millon

2020

$millo

otal l

oans a

nd adva

nces t

o custo

mer

1,2

285,

273,861

otal customer accoun

483,86

48,236

Advanc

-to-deposit

ratio

.1%

xcl

ude

s reve

rse r

epu

rch

ase a

gree

men

t and o

the

r sim

lar se

cur

ed le

ndin

g of $7

1 mill

on and i

ncl

ude

s loa

ns and a

dva

nces t

o cus

tom

ers h

eld a

t fair v

alue

rou

gh pro

ﬁt and l

oss o

f $9

,953

mill

ans an

d ad

vance

s to cu

sto

mer

s for t

he pu

ose of t

he a

dvan

ces-t

o-d

epo

sit

s rat

io exc

lude

s $15

,168 mi

llo

n of app

rove

d bal

ance

s hel

d wit

h cent

ral b

ank

con

ﬁrm

ed as r

epa

yabl

e at th

e poi

nt of st

res

s (31 D

ece

mbe

r 2020: $14

96 mill

)

clu

des c

ust

omer a

cco

unt

s hel

d at fa

ir valu

e thr

oug

h proﬁ

t or lo

ss of $9,29

1 mil

lon (

31 De

cemb

er 2020: $

897 mil

lon)

t stab

le fun

ding r

ati

o (NSFR)

The N

SFR is a ba

lance sh

eet m

etri

c which re

quire

s instt

utio

to ma

intan a st

able f

undin

g proﬁle in r

elat

ion to an as

sum

dur

ation o

f their a

sset

s and o

-b

alance s

heet a

ctiv

ties over

a one

-year hor

izon. I

t is the ra

tio be

twe

en the a

moun

t of

available stabl

e funding (ASF) and th

e amount of required

stable f

unding (RSF). ASF factors are applie

d to balance sheet

liablites and capital, bas

ed on their perceived stab

il

y and

the a

mount o

f stabl

e fun

ding th

ey provid

e. Likews

e, RSF

factors are appl

to ass

ets and off

-bala

nce sheet exposures

acco

rding to t

he amo

unt of st

able f

undin

g they re

quire. T

NSFR b

ecam

e a regul

ator

y re

quire

ment in J

anuar

y 202

2 with

a minm

um of 10

0 per cen

t. At th

e last re

por

ting da

te, the

Gro

up NSFR r

emain

ed above 10

0 per ce

nt.

Liqudity pool

The l

iqudit

y valu

e of the G

roup’

s L

CR eli

gble liq

udit

y poo

at th

e repo

rtin

g date was $ 17

2 billon

. The ﬁg

ures in t

table below

account for haircuts, currency conv

tib

lit

and por

tabilty cons

traints

, and therefore are not direct

comparable with

consolidated balance

she

et. Liqu

dit

ol is hel

d to of

et stre

ss out

ﬂows as d

eﬁned in U

K onsh

ored

Commisson Delegated R

gulation

2015

1. Following

Gro

’s reas

sess

ment o

f the po

rtab

ilt

y meth

odol

ogy

, o

n a

like-fo

-like app

roach D

ecemb

er 2021 HQL

A in

creas

ed whi

was of

set by a siml

ar size de

creas

e in HQL

2021

Asia

$ millon

Africa &

Middle East

$ mill

$ millon

Europe &

Americas

$ millon

Level 1 se

cur

ite

sh and b

alanc

es at cen

tral b

anks

,07

890

,97

,93

Central banks, governments/

public sector entites

328

,813

Multilateral

development banks and

internatonal organisatons

356

15,534

Other

–

478

al Level 1 se

curi

te

342

Level 2

A se

curi

tes

3,447

186

,047

8,680

Level 2B s

ecur

ite

114

–

620

1,734

otal

LCR eligble

ssets

,777

,873

172

178

2020 (Rest

ate

Asia

$ mil

lon

ric

a &

Middle E

ast

$ mil

lon

Europe &

Americas

$ mil

lon

otal

$ mil

lon

Level 1 s

ecur

ites

sh and b

alanc

es at cen

tral b

anks

26,

726

1,42

502

70,

Central banks, governments/

public sector entites

41,

33,652

Multilateral

development banks and

internatonal organisatons

372

6,8

12,426

Other

–

1,6

1,659

otal Leve

l 1 secu

rit

,11

240

617

60,

969

Level 2

A se

curi

tes

11,

515

891

14,4

Level 2B s

ecur

ite

207

–

otal LCR eli

gble as

set

84,83

319

,94

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Gre

ate

r Chin

a & Nor

th A

sia an

d ASE

AN & S

out

h As

ia to A

sia

. Prio

period h

as been

restated

251

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Encumbrance

Encumbered as

sets

Encu

mber

ed ass

s repre

sent on-b

alanc

e shee

t asse

pledged or subject

to any form of

rangement

to secure,

coll

ateral

ise or cr

edit enh

ance a tr

ansa

ction f

rom whi

ch it

cannot be freely withdrawn. Cash col

lateral pledged against

derivatves and Hong

Kong

Government certif

c

ate

ind

ebted

ness

, whic

h secu

re the e

quivale

nt amou

nt of Ho

Kong cur

renc

y not

es in circu

laton

, are inc

lude

d withn

Other assets.

Unencumbered – readily available for encumbrance

Une

ncumb

ered a

sset

s th

at are con

sider

ed by the G

roup t

o be

rea

dily ava

ilable i

n the no

rmal co

urs

e of bus

ines

s to secu

nding

, mee

t collat

eral ne

eds

, or be so

ld to re

duce po

tent

ial

ture f

und

ing req

uirem

ent

s and are no

t subje

ct to any

restrict

ons on their

use for these

purposes.

Une

ncumb

ere

d – othe

r ass

ets ca

pable o

f being e

ncum

bere

Une

ncumb

ered a

sset

s th

at, in t

heir cur

rent f

orm, a

re not

con

sidere

d by the G

roup to b

e read

ily re

alisab

le in the n

orma

cour

se o

f busin

ess to s

ecure f

und

ing, m

eet col

latera

l need

or be s

old to r

educe p

oten

tial f

utu

re fun

ding re

quire

ment

and ar

e not sub

ject to any r

estr

icton

s on thei

r use for t

hes

pur

pos

es. In

clude

d with

n this cat

egor

y a

re loan

s and

adva

nces wh

ich woul

d be suit

able fo

r use in se

cure

d fun

ding

structures su

ch as

securitsations.

Unencumbered – cannot be encumbered

Une

ncumb

ered a

sset

s th

at have no

t bee

n pled

ged and

cann

ot be us

ed to se

cure f

undi

ng, me

et colla

teral n

eeds

or be s

old to r

educe p

oten

tial f

utu

re fun

ding re

quire

ment

as assessed b

y the Group.

Derivat

ves, re

verse repurchase asset

and stock

lending

The

se as

set

s are show

n sep

aratel

y as the

se on-b

alance s

heet

amo

unt

s cannot b

e ple

dged

. However

, t

hese a

sse

ts can g

ive

se to of

-bala

nce she

et coll

ateral w

hich can b

e used t

o raise

secure

d funding or me

et additonal fun

ding requirement

The f

ollowi

ng tabl

e provid

es a reco

ncilat

ion of th

e Grou

’

encu

mber

ed as

set

s to tot

al ass

ets

2021

Assets

$millon

ts en

cum

ber

ed a

s a res

ult o

transac

tions with counterparties

her t

han c

ent

l ban

her a

s (

omp

ris

ng a

sse

ts e

ncu

mbe

red a

t th

e cent

l ban

and unencum

bered assets

)

As a r

esu

lt of

securit

sations

$millon

Other

$millon

Asset

positone

the central

bank

(ie p

positone

plus

encumbered)

$millon

ts no

t pos

on

ed at t

he ce

ntr

al ba

Readily

available

for

encumbrance

$millon

Other asse

at ar

capable of

being

encumbered

$millon

Derivatves

d rever

repo

stock

lending

$millon

Cannot be

encumbered

$millon

Cash and

balances

at cen

tral b

ank

,663

–

8,1

,516

–

72,

663

Der

ivat

ve ﬁnan

cal

instrument

–

52,

–

Loans and

vances t

o bank

,95

–

34,834

,29

66,868

Loans and

vances t

customers

–

539

–

68,61

13,791

5,1

Investment

secur

ites

198,

723

–

,94

,96

5,637

–

,08

4,7

Other assets

–

16,501

16,

501

–

3,1

–

20,

33,457

Current tax assets

–

Prepaym

ent

and

accru

ed income

–

937

–

239

Interests in

associates and

jont v

ent

ures

–

,14

Goodwill a

intangble

ass

ets

,47

–

471

Propert

, plant

and equipment

,61

–

448

–

,61

Def

err

ed tax a

sse

–

859

Asset

s classifed

as h

eld for s

ale

334

–

334

ota

–

5,0

,069

8,243

2,31

342

0,8

58,4

ncl

ude

s hel

d at fai

r valu

e thro

ugh p

roﬁt o

r los

s and a

mor

tis

ed co

st bal

anc

clu

des h

eld a

t fair va

lue t

hro

ugh pr

oﬁt or l

oss

, fai

r valu

e thr

ough o

the

r com

preh

ens

ive i

ncom

e and a

mor

tis

ed co

st ba

lanc

252

Standard Chartered

– An

nual Re

por

t 2021

sk r

evi

Risk proﬁle

2020

Asset

$millo

ts en

cum

ber

ed as a r

esu

lt of

transactions

with counterparties

other than central bank

Other assets (

comprisng assets encumbered at the c

ent

ral

bank

and unencumbered assets

)

As a r

esu

lt of

securitsatio

$millo

Other

$millo

otal

$millo

Asset

positoned at

the central

bank

(ie

pre-

positoned

plus

encumbered)

$millo

ts no

t po

sit

one

d at th

e cent

ral b

ank

Readily

available

for

encumbrance

$millo

Other assets

that are

capable of

being

encumbered

$millo

Derivatves

and rev

repo

/stock

lending

$millo

Cannot be

encumbered

$millo

otal

$millo

Cash and

balances

at cen

tral b

ank

,712

–

6,712

Der

ivat

ve ﬁnan

cal

instrument

–

Loans and

vances t

o bank

,429

–

,023

8,0

863

,429

Loans and

vances t

customers¹

–

826

3,826

–

402

32,

450

Investment

cur

it

es²

3,443

–

11,

282

,282

–

131,304

6,09

–

4,7

Other assets

48,688

–

18,7

–

0,89

Current tax assets

808

–

808

Prepaym

ent

and

accru

ed income

–

980

–

,14

Interests in

associates and

jont v

ent

ures

–

Goodwill a

intangble

ass

ets

5,0

–

5,0

Propert

, plant

and equipment

,515

–

448

–

067

515

Def

err

ed tax a

sse

–

919

Asset

s classifed

as h

eld for s

ale

–

446

ota

–

4,1

,16

28,

698

333,28

137

,037

48,5

754,888

ncl

ude

s hel

d at fai

r valu

e thro

ugh p

roﬁt o

r los

s and a

mor

tis

ed co

st bal

anc

clu

des h

eld a

t fair va

lue t

hro

ugh pr

oﬁt or l

oss

, fai

r valu

e thr

ough o

the

r com

preh

ens

ive i

ncom

e and a

mor

tis

ed co

st ba

lanc

The G

roup r

ecei

ved $117

08 mill

on (31 De

cembe

r 20

20: $9

38 mil

lon

) as co

llater

al unde

r revers

e repu

rchas

e agree

ment

tha

t was eligb

le for re

pled

ging; of th

is, th

e Gro

up sold o

r reple

dge

d $57

879 millon (31 D

ecemb

er 2020: $4

209 millon

) u

nder

repurchase agreements

253

Standard Chartered

– Annu

al Repo

rt 2021

sk rev

iew and C

api

tal r

eview

Liqu

dit

y ana

lysis o

f the G

rou

’s bal

ance s

hee

t (

aud

ite

Cont

ractual matu

rity of as

sets and liablites

The f

ollowi

ng tabl

e prese

nts a

sse

ts an

d liablit

es by mat

urit

grou

pings b

ase

d on the r

emainn

g peri

od to th

e contr

actua

mat

urit

y d

ate as at t

he bala

nce she

et dat

e on a disco

unte

sis. C

ontra

ctual m

atur

ites d

o not ne

cess

aril

y reﬂect a

ctual

rep

aym

ent

s or cashﬂ

ows.

With

n the tab

les be

low

, ca

sh and ba

lance

s with ce

ntral

banks, interb

ank

pla

cements and in

vestment securites that

are fa

ir value th

rough o

ther co

mpreh

ensi

ve incom

e are use

by the G

roup p

rincp

ally fo

r liqudit

y m

anage

ment p

urpo

ses

As a

t the rep

ort

ing dat

e, ass

s remain p

redom

inant

sho

-dat

ed, wi

th 59 per cen

t matu

ring in u

nder o

ne year.

r less t

han thr

ee-mo

nth cum

ulati

ve net f

undin

g posi

ton

rem

ained in s

urpl

us and t

he scale o

f the su

rplu

s incre

ased

fro

m the pr

eviou

s year

, l

argel

y due to an i

ncrea

se in cus

tomer

acco

unt

s as the G

roup f

ocus

ed on imp

rovng th

e quali

ty o

f its

dep

osit b

ase. In pr

actice

, thes

e depo

sits a

re reco

gnise

d as

stable a

nd have behavioural

proﬁles that

extend beyo

nd their

contractual maturites

2021

e mon

or less

$millon

Between

one month

and three

months

$millon

Between

three

nth

s and

x mon

ths

$millon

Between

x mon

ths

and nine

months

$millon

Between

nine months

and one

yea

$millon

Between

e year

d two

yea

$millon

Between

wo year

and ﬁv

yea

$millon

re th

ﬁve

years

and

undated

$millon

Asset

sh and b

alanc

es at

central bank

,516

–

,663

Der

ivat

ve ﬁnan

cal

instrument

11,

695

0,4

3,583

,731

4,738

493

5,384

Loan

s and ad

vance

to b

anks

1,2

25,486

4,415

4,50

1,455

1,4

295

Loan

s and ad

vance

to customers

1,2

68,

13,

255

,99

21,

36,

299

,948

Investment securites

11,813

590

,07

13,

266

13,407

26,424

53,

189

,96

198,

723

Other assets

24,

283

989

21,

654

ota

l asset

0,2

,014

34,586

,12

4,04

392

Liablites

Dep

osit

s by ba

nks

1,3

34,858

244

408

116

206

38,4

Customer accounts

1,4

0,071

,436

11,738

,023

4,8

,12

,45

Der

ivat

ve ﬁnan

cal

instrument

11,715

,573

788

5,0

53,

399

Senior debt

190

,036

320

397

5,336

15,2

,845

her de

bt sec

urit

es in is

sue

233

,96

118

,281

782

411

320

,899

Othe

r liablites

,545

,04

,14

797

990

4,059

Subordin

ated liablites and

other borrow

ed f

unds

,007

240

,430

593

,646

otal liablites

494

619

101

014

46,824

,033

,040

598

5,1

Net liqudit

y gap

(264,6

45)

,19

13,553

,087

34,683

oan

s and ad

vanc

es, i

nves

tme

nt se

cur

ite

s, de

pos

s by ban

, cust

ome

r acco

unt

s an

d debt s

ecu

rit

es i

n iss

ue inc

lud

e ﬁnan

cal i

nst

rum

ent

s he

ld at f

air val

rou

gh pro

ﬁt or lo

, see N

ote 13 Fi

nan

cal in

str

ent

s (pa

ges 3

39 to 3

64)

ans an

d ad

vance

s inc

lud

e rever

se r

epu

rcha

se ag

ree

men

ts an

d oth

er si

mlar s

ecu

red l

end

ing o

f $88

.4 bil

lon

epo

sit

s by ban

ks i

nclu

de re

pur

cha

se agr

eem

ent

s and o

er sim

lar s

ecu

red b

orr

owin

g of $7

.1 bil

lon

Cust

ome

r acco

unt

s inc

lud

e rep

urch

ase a

gre

eme

s and ot

her s

iml

ar se

cure

d bo

rrow

ing o

f $58

.6 bi

llon

nior d

ebt m

atu

rit

y p

roﬁl

es are b

ase

d up

on con

tra

ctu

al mat

, w

hich m

ay be l

ate

r tha

n call o

pti

ons ove

r the d

ebt h

eld by t

he G

roup

254

Standard Chartered

– Annu

al Rep

ort 202

sk r

evi

Risk proﬁle

2020

One month

or less

$millo

Bet

ween

one month

and three

months

$millo

Bet

ween

three

months and

six months

$millo

Bet

ween

six months

and nine

months

$millo

Bet

ween

nine months

and one

year

$millo

Bet

ween

e year

d two

year

$millo

Bet

ween

wo yea

d ﬁve

year

$millo

More tha

ﬁve year

and

undated

$millo

otal

$millo

Asset

sh and b

alanc

es at

central bank

–

66,

712

Der

ivat

ve ﬁnan

cal

instrument

4,09

6,210

3,840

555

697

Loan

s and ad

vance

to b

anks

1,2

375

,455

,09

277

429

Loan

s and ad

vance

to customers

1,2

84,657

,20

11,635

,454

,00

Investment securites

1,1

20,426

13,

260

13,

792

30,

783

45,718

313

183

,443

Other assets

2,4

18,753

314

120

3,82

66,723

ota

l asset

,075

18,

403

,484

35,85

877

Liablites

Dep

osit

s by ba

nks

1,3

33,08

288

2,563

216

221

194

Customer accounts

1,4

389

,896

52,

604

20,

9,1

313

1,6

859

492,

Der

ivat

ve ﬁnan

cal

instrument

247

13,633

,739

4,2

11,

4,0

71,533

Senior debt

1,215

2,1

168

253

,090

,482

,042

her de

bt sec

urit

es in is

sue

1,275

2,863

504

26,

319

Othe

r liablites

18,795

,958

,089

485

314

,468

Subordin

ated liablites and

other borrow

ed f

unds

–

0,9

,654

otal liablites

20,128

,636

31,

366

4,09

321

Net liqudit

y gap

(23

8,435)

5,728

12,627

1,66

64,800

124

0,72

oan

s and ad

vanc

es, i

nves

tme

nt se

cur

ite

s, de

pos

s by ban

, cust

ome

r acco

unt

s an

d debt s

ecu

rit

es i

n iss

ue inc

lud

e ﬁnan

cal i

nst

rum

ent

s he

ld at f

air val

rou

gh pro

ﬁt or lo

, see N

ote 13 Fi

nan

cal in

str

ent

s (pa

ges 3

39 to 3

64)

ans an

d ad

vance

s inc

lud

e rever

se r

epu

rcha

se ag

ree

men

ts an

d oth

er si

mlar s

ecu

red l

end

ing o

f $67

.6 bil

lon

epo

sit

s by ban

ks i

nclu

de re

pur

cha

se agr

eem

ent

s and o

er sim

lar s

ecu

red b

orr

owin

g of $6

.6 bi

llo

Cust

ome

r acco

unt

s inc

lud

e rep

urch

ase a

gre

eme

s and ot

her s

iml

ar se

cure

d bo

rrow

ing o

f $43

9 b

ill

nior d

ebt m

atu

rit

y p

roﬁl

es are b

ase

d up

on con

tra

ctu

al mat

, w

hich m

ay be l

ate

r tha

n call o

pti

ons ove

r the d

ebt h

eld by t

he G

roup

Beha

vioural matur

ity of ﬁnancal a

ssets and liablite

The c

ashﬂow

s prese

nted in t

he prev

ious s

ectio

n reﬂect t

cash

ﬂows th

at will be c

ontra

ctuall

y payab

le over th

e resid

ual

mat

urit

y o

f the ins

tru

ment

s. H

owever

, con

tract

ual mat

urit

es

do no

t nece

ssar

ily reﬂ

ect the t

imng of a

ctual r

epay

ment

s or

cash

ﬂow

. In p

ractic

e, cert

ain ass

s and liabl

ites b

ehave

dif

feren

tly f

rom th

eir cont

ractu

al term

s, es

pecia

lly for s

hort

term cust

omer account

s, credit card balances and overdraf

ts,

whi

ch exten

d to a long

er per

iod th

an the

ir contr

actua

maturit

On the other hand,

mor

tgage

ances tend to

have a s

hor

ter rep

aym

ent per

iod t

han the

ir contr

actu

mat

urit

y d

ate. E

xpe

cted cu

stom

er beha

vio

ur is as

sess

and m

anage

d on a coun

y ba

sis usi

ng quali

tatve an

quantitatv

e techniques, inc

ludng

analysis of observed

customer behaviour over time.

255

Standard Chartered

– Ann

ual Rep

ort 202

sk rev

iew and C

api

tal r

eview

turi

ty of ﬁ

nanc

al lia

blit

es o

n an und

isco

unte

d bas

)

The follo

wing table a

nalyses the c

ontractual cash

ﬂows

payable for th

e Group

’

s ﬁnancal liablites by remainng

contractual maturites

on an und

iscounted basis. The ﬁnanc

al

liabl

y balan

ces in th

e table b

elow wil

l not agr

ee wit

h the

balances re

ported in the con

solidated bal

ance sheet as

the t

able in

corp

orate

s all cont

ractu

al cashﬂow

s, on an

und

iscou

nted b

asis

, relat

ing to b

oth pr

incpal a

nd inte

rest

payments. Deriv

atves n

ot trea

ted as hedg

ing deriva

tves

are in

clude

d in the ‘O

n dema

nd’ t

ime bu

cket and no

t by

contractual maturity

With

n the ‘M

ore th

an ﬁve year

s and un

date

d’ ma

turi

ty b

and

are un

date

d ﬁnancal l

iablite

s, th

e major

t

y of whic

h relat

to su

bordin

ated d

ebt

, on whic

h intere

st pay

ment

s are n

incl

uded a

s this in

form

aton wo

uld not b

e mean

ingf

ul, give

the instrument

s are

dated. Interest

payment

s on these

ins

tru

ment

s are inc

lude

d withn t

he releva

nt mat

urit

es up to

ﬁve ye

ars

2021

e mon

or less

$millon

Between

one month

and three

months

$millon

Between

three

nth

s and

x mon

ths

$millon

Between

x mon

ths

and nine

months

$millon

Between

nine months

and one

yea

$millon

Between

e year

d two

yea

$millon

Between

wo year

and ﬁv

yea

$millon

re th

ﬁve

years

and

undated

$millon

Dep

osit

s by ba

nks

34,866

1,246

409

117

208

38,47

Customer accounts

,19

11,8

,120

,212

495

Der

ivat

ve ﬁnan

cal

instrument

783

106

212

179

53,

399

Deb

t sec

urit

es in is

sue

,52

13,618

3,586

,891

5,00

Subordin

ated liablites and

other borrow

ed f

unds

1,114

134

928

2,546

3,03

16,044

24,

105

Othe

r liablites

,460

1,9

797

990

,216

otal liablites

18,69

5,209

24,6

46,

335

2020

One month

or less

$millo

Bet

ween

one month

and three

months

$millo

Bet

ween

three

months and

six months

$millo

Bet

ween

six months

and nine

months

$millo

Bet

ween

nine months

and one

year

$millo

Bet

ween

e year

d two

year

$millo

Bet

ween

wo yea

d ﬁve

year

$millo

More tha

ﬁve year

and

undated

$millo

otal

$millo

Dep

osit

s by ba

nks

297

227

225

195

38,255

Customer accounts

0,203

20,4

9,1

507

362

1,679

493,27

Der

ivat

ve ﬁnan

cal

instrument

70,

219

160

510

121

71,533

Deb

t sec

urit

es in is

sue

494

596

3,40

,94

,556

4,45

,293

Subordin

ated liablites and

other borrow

ed f

unds

–

,59

202

15,4

3,881

Othe

r liablites

657

904

483

317

,027

otal liablites

13,02

,444

13,633

16,

339

,805

459

riv

atve

s are o

n a dis

coun

ted b

asi

256

Standard Chartered

– A

nnu

al Rep

ort 202

sk r

evi

Risk proﬁle

Int

ere

st Rat

e Risk i

n the B

ankin

g Boo

The f

ollowi

ng tabl

e provid

es the e

stima

ted imp

act to a

hypothetic

al base case

projecton

of the Group

’

s earni

ngs

und

er the f

ollowin

g scen

arios:

•

A 50 ba

sis po

int para

llel int

erest r

ate sho

ck (

up and d

own

)

to th

e curr

ent mar

ket

-impled p

ath of ra

tes, a

cros

s all

yield curves

•

A 10

0 basi

s point p

aralle

l intere

st rate s

hock (

) t

o the

cur

rent ma

rket

-imple

d path o

f rates

, acros

s all yie

ld cur

ves

These inter

est rate

shock scenarios assume

all other econom

variables remain

const

ant. The sensitvites sho

n r

epresent

the estima

ted change to

a hypothetica

l base case pr

ojected

net i

ntere

st incom

e (NII), plus th

e chang

e in inter

est rat

impl

ed inco

me and ex

pens

e from F

X swap

s used t

o manag

banking book currency positons

nder the

different interest

rate shock scenarios

The i

ntere

st rate s

ensit

vit

es are ind

cative an

d bas

ed on

simp

lﬁed sce

nario

s, est

imat

ng the a

ggreg

ate imp

act of an

ins

tantan

eou

s paralle

l shoc

k acros

s all yie

ld cur

ves over

one

-year hor

izon, in

cludn

g the ti

me taken to i

mplem

ent

changes to

pricng befor

e becoming effective.

The

sess

ment a

ssum

es tha

t the size a

nd mix of t

he bal

ance

she

et rem

ain cons

tant and t

hat th

ere are n

o speci

fc

man

ageme

nt acti

ons in re

spon

se to th

e chang

e in rate

No as

sump

tion

s are mad

e in relat

ion to t

he impa

ct on cre

dit

spre

ads in a c

hangin

g rate env

ironm

ent.

Signﬁcant modelling and beh

avioural as

sumptions are

made reg

arding scenario simplﬁcaton, mar

et compet

iton,

ss-thro

ugh rat

es, as

set an

d liablit

y re

-pricn

g teno

, and

pri

ce ﬂoor

ing. In p

art

icular, the as

sump

tion t

hat int

erest ra

tes

of all cu

rren

cies and m

atur

ites s

hift by t

he same a

moun

conc

urre

ntly

, and t

hat no act

ions a

re taken to m

itgat

e the

impacts arisng from this

are considered unlik

ely

. Reported

sen

sitv

ites w

ill var

y over ti

me due t

o a numbe

r of fact

ors

includ

ng changes in

balance sheet c

ompositon,

market

conditons, customer

ehaviour and

isk ma

nagement

str

ateg

y and sho

uld th

erefo

re not b

e consid

ered a

n income

or proﬁt

recast.

tima

ted on

e-year i

mpact t

o ear

ning

s from

a par

allel s

hift i

n yiel

d cur

ves at t

he be

ginnn

of th

e per

iod of

2021

USD bloc

$millon

D blo

$millon

D blo

$millon

KRW

$millon

Y blo

$millon

Other

currency

bloc

$millon

+ 50 ba

sis p

oint

200

150

140

660

- 50 ba

sis p

oint

(210)

(

170)

(

70)

(

70)

+ 10

0 basi

s poin

380

280

130

300

260

tima

ted on

e-year i

mpact t

o ear

ning

s from

a par

allel s

hift i

n yiel

d cur

ves at t

he be

ginnn

of th

e per

iod of

2020

USD b

loc

$millo

HKD bloc

$millo

D blo

$millo

KRW

bloc

$millo

CNY b

loc

$millo

Other

currency

bloc

$millo

otal

$millo

+ 50 ba

sis p

oint

100

- 50 ba

sis p

oint

(180

)

(

20)

(

70)

)

+ 10

0 basi

s poin

100

110

620

ens

it

vit

y fo

r 2020 has b

n rest

ate

d due t

o cor

rec

tion o

f int

ere

st rat

e bas

is fo

r cer

tain U

SD de

nomi

nat

ed in

tere

st ra

te sw

aps an

d HKD d

eno

mina

ted m

ort

gag

As a

t 31 Dece

mber 2021

, the G

roup es

timat

es the o

ne-year

impact of an instant

aneous

, parallel increase acro

ss all yield

cur

s of 50 bas

is poi

nts t

o incre

ase pro

jecte

d NII by $6

millo

n. The e

quival

ent imp

act fr

om a paral

lel dec

reas

e of

50 ba

sis po

int

s would re

sult in a re

duct

ion in pro

jecte

d NII of

$670 millon. T

he Gro

up est

imate

s the on

e-year imp

act of

an instantan

eous, paralle

l increase acros

s all

ield cur

ves of

0 basi

s point

s to in

creas

e proje

cted NI

I by $1,

260 millo

The b

eneﬁt f

rom ri

sng int

erest r

ates is p

rimar

ly f

rom

reinves

tng at hi

gher yi

elds an

d from a

sse

ts re

-pricn

g faste

and t

o a great

er exten

t than de

posit

s. N

II sen

sitv

y in all

sce

nario

s has in

creas

ed ver

sus 31 D

ecemb

er 2020 due to

chan

ges in m

odelli

ng ass

umpt

ions to r

eﬂect ex

pect

re-p

ricng a

ctivt

y o

n Retail and T

ran

sact

ion Ban

king cu

rrent

acco

unt

s and sa

ving

s accoun

ts in t

he cur

rent int

erest r

ate

environment, and to recognise

he i

nterest rate sensitvity

of ba

nking b

ook in

come w

hen prov

idng f

undin

g to the

tra

ding bo

ok. T

he incl

uson of t

his ite

m now align

s the

asure

ment sc

ope to t

hat use

d for th

e calcul

ation o

f the

Gro

’s net inte

rest m

argin, an

d has in

creas

ed th

e repor

ted

sen

sitv

y to th

e 50 basi

s point p

aralle

l shoc

ks by $170 millo

and t

o a 100 ba

sis po

int par

allel up s

hock by $

340 m

illon,

primar

ly in US

dollar

The a

sym

metr

y b

ween t

he up and d

own 50 ba

sis po

int

sho

ck is pr

imarl

y due to t

he low level o

f inter

est rat

es,

whi

ch may co

nstra

in the G

roup

’s abilt

y to re

price a

sse

and li

ablite

s shou

ld rates f

all by a fu

rth

er 50 bas

is poi

nts

as wel

l as dif

fern

g beha

viou

ral ass

umpt

ions

, which ar

sce

nario s

pecif

c

. The leve

l of asy

mmet

y has ch

ange

d since

31 De

cembe

r 20

20 due to a

n incre

ase in t

he prop

ort

ion of th

Gro

’s asse

ts w

hose p

ricng is a

ssu

med to b

e ﬂoore

d unde

the 5

0 basi

s point p

aralle

l down sh

ock

, and whi

ch now larg

ely

ets t

he as

sume

d impact o

f ﬂoor

ing liab

lit

y pricn

g unde

the s

ame sce

nari

o, prim

arly in G

reat

er Chin

a and Nor

th A

sia.

The d

eciso

n to pas

s on chan

ges in in

teres

t rates i

s highl

subjectve

and depends on a range

of factors includ

market en

ironment

and competitor beha

viour

257

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Oper

ational a

nd T

echn

ology Risk

eratio

nal Ris

k is deﬁne

d as th

e “Poten

tial fo

r loss f

rom

ina

dequ

ate or fai

led int

erna

l proce

sses

, tec

hnolo

gy event

hum

an erro

, or f

rom th

e impac

t of exter

nal event

s (includ

ng

leg

al ris

)”

. It is inh

erent i

n the G

roup car

ying o

ut bus

ines

and ca

n be impa

cted f

rom a ran

ge of op

eratio

nal ri

sks

Operational Risk proﬁle

In 2021, t

he Gro

up has t

aken step

s for f

urth

er emb

eddin

g of

the e

nhanc

ed fra

mework t

o augm

ent the m

anage

ment o

operational risk with the

aim of ensuring that risk is

anaged

wit

hn Risk A

ppet

ite and we co

ntinu

e to deli

ver ser

ices to

our clients

The G

roup h

as cont

inue

d to provi

de a stab

le level of s

vic

e to

clie

nts d

urin

g the pe

riod o

f CO

VID

19 and a

dapte

d swif

y to

chan

ges in op

erat

ions br

ought by t

he pan

demic

. As a re

sult of

the change

s in internal and extern

al operating environme

due t

o CO

VID

, par

ticul

ar area

s of focu

s are Fraud

Info

rmat

ion & Cyber S

ecur

, Pri

vacy

, C

ondu

ct and Resi

lence.

erat

ion

al Risk even

ts an

d los

ses

eratio

nal los

ses ar

e one ind

cator of t

he ef

fect

ivene

ss and

rob

ustne

ss of t

he non-ﬁn

ancal ri

sk cont

rol envi

ronme

nt. A

s at

31 De

cembe

r 20

21, r

ecord

ed imp

act fro

m oper

ation

al loss

for t

he year wa

s higher t

han 2020, primar

ly dr

iven by the

reg

ulato

y pena

y of $61.7 mi

llon imp

osed by t

he PR

A on the

bac

k of liqud

y misre

por

tng be

twe

en 2018 an

d 2019 due to

execution deliv

y and pr

cess management issues.

The G

roup’

s proﬁ

le of ope

ratio

nal los

s event

s in 2021 and 2020

is su

mmari

sed in t

he tab

le below. It show

s the pe

rcent

age

dist

rbu

tion of g

ross op

erat

ional lo

sse

s by Base

l busin

ess li

ne.

str

bu

tio

n of Op

era

tio

nal L

ses by B

ase

l bus

ine

ss l

ine

% Lo

2021

2020

Agency Ser

vices

0.0%

1.2%

Asset Management

0.0%

–

Comme

rcial Banking

Corporate F

inance

–

Corporate

Items

.2%

.8%

Payment and Settlements

35.8%

.1%

Retail Banking

0.1

Retail

Brokerage

0.0%

ding a

nd Sales

.4%

10.

oss

es in 2020 h

ave b

een re

sta

ted t

o inc

lud

e incr

eme

ntal e

vent

s re

cogn

ise

d in 2021

The G

roup’

s proﬁ

le of ope

ratio

nal los

s event

s in 2021 and 2020 is als

o summar

ise

d by Base

l event t

e in the ta

ble be

low

. It

show

s the pe

rcent

age dis

trbu

tion of g

ross o

perat

ional l

osse

s by Bas

el event t

str

bu

tio

n of Op

era

tio

nal L

ses by B

ase

l event t

% Lo

2021

2020

Business disrupton and system failur

3.4%

.0%

Clients produc

s and

business practices

.1%

5.8%

Damage to ph

ysical assets

0.0%

.1%

Employment

practices and w

orkplace safety

0.0%

0.5%

Execution delivery and process management

70.

External fraud

20.

Internal fraud

.7%

oss

es in 2020 h

ave b

een re

sta

ted t

o inc

lud

e incr

eme

ntal e

vent

s re

cogn

ise

d in 2021

Oth

er princpal risks

Loss

es ari

sng fr

om ope

ration

al failu

res fo

r other p

rincp

al ris

ks are r

epor

ted a

s opera

tiona

l loss

es. O

perat

ional l

osse

s do not

include Operat

ional Risk

-related credit imparment

258

Standard Chartered

— An

nual Re

por

t 2021

sk r

evi

Risk management approach

Enterprise

sk Management

ork

Effective risk management is essential in deliv

erng consistent and

sustainable performance for a

ll our stak

eholder

s and is a c

entral part of

the ﬁnanc

al and operational management of the Group. The Group

adds value to c

lient

s and the commun

ites in which they opera

te by

taking and managi

g ap

propriate le

vels of risk, which in turn generates

returns for shareholders.

The Enterprise Risk Management

Framework (

ERMF

)

enables

the Group to manage

enterprise-wide risks, with the objectve

of maximsing

risk

-adjusted returns while remain

ith

n our

Risk A

ppet

ite. Th

e ERMF has b

een d

esign

ed wit

h the exp

lict

goa

l of improv

ng the G

roup’

s ri

sk mana

gemen

t, an

d since it

lau

nch in Jan

uar

y 2018

, it has b

een em

bedd

ed acro

ss th

Gro

up and ro

lled o

ut to it

s bran

ches an

d subsi

darie

In 2021, we co

mplet

ed a com

prehe

nsive rev

iew of th

e ERMF

and t

he foll

owing ch

anges we

re approve

d by the Bo

ard:

•

Cross

-cutting

risks have bee

n repo

sitoned

as In

tegrated

Risk T

es (IRT

) and are de

ﬁned as “r

isks t

hat are s

ignﬁcant

in nat

ure an

d mater

ialse p

rimar

ly th

rough t

he relevan

Prin

cpal Ris

k T

pes”

. T

he ERMF se

ts o

ut the ro

les and

respo

nsiblites and minmum governance require

ments

for management of IR

•

ven thei

r integ

rated n

ature

, Digtal A

et Risk an

Thir

d-Part

y Ris

k, in ad

diton t

o Climat

e Risk

, have be

cate

gor

ised a

s Integ

rated R

isk T

ype

s in the ERM

•

The C

apita

l and Liqu

dit

y Princp

al Risk T

e has b

een

ren

amed to T

asur

y Ri

sk and th

e scop

e of the r

isk t

e has

en expa

nded t

o cover Inte

rest Rate R

isk in th

e Bank

ing

Boo

k (

IRRBB)

The r

evise

d ERMF was ap

proved in Fe

bru

y 2022 and w

ill

come ef

fect

ive in Ma

rch 2022

Risk culture

The Group

’

s risk culture pro

ides

guidng princples

for the

behaviour

expected from our people when managing

isk.

The B

oard h

as approve

d a risk c

ultur

e state

ment t

hat

enco

urag

es the fo

llowin

g beha

viou

rs an

d outco

mes:

•

An en

terp

rise

-level abilt

y t

o ident

f

y and as

ses

s curre

nt and

ture r

isk

s, op

enly di

scus

s thes

e and take pr

ompt ac

tions

•

The h

ighes

t level of int

egrt

y by b

eing tra

nspa

rent and

pro

active i

n disclo

sng and m

anagi

ng all t

ype

s of ri

sks

•

A con

stru

ctive an

d collab

orat

ive appro

ach in pr

ovidng

over

sight an

d challe

nge, an

d takin

g decis

ons in a ti

mely

manner

•

Everyone to be acc

untable

for their decisons a

nd feel

saf

e in using t

heir ju

dgem

ent to ma

e the

se con

sider

decisons.

e ack

nowl

edge t

hat ban

king in

heren

tly invol

ves ris

-tak

ing

and u

ndesi

red ou

tcome

s will occ

ur fro

m time to t

ime; however,

we sha

ll take the o

ppor

tuni

ty t

o lear

n from o

ur exp

erien

and fo

rmal

ise wh

at we can do to i

mprove. W

e ex

pect

man

ager

s to dem

onst

rate a hig

h awaren

ess of r

isk an

cont

rol by sel

-ident

f

ying i

ssue

s and man

aging t

hem in a

mann

er tha

t will de

liver la

sting c

hange.

rategic ri

sk manag

ement

The G

roup a

pproa

ches st

rate

gic ris

k manag

emen

t as foll

ows:

•

By con

ducti

ng an imp

act anal

ysis on t

he ri

sk proﬁl

e from

grow

th plan

s, str

ategi

c intiat

ves and

bus

ines

s mode

l vuln

erabilt

ies, w

ith

the a

im of pro

active

ly iden

tf

yin

g and

managing new

isks or e

ist

isks

tha

t need t

o be rep

rior

tise

d as par

t of

the s

trate

gy rev

iew proc

ess.

•

By conﬁ

rmng t

hat grow

th plan

s and

strategic intiatves can be delivered

wit

hn the ap

proved Ris

k Appe

tite an

r propo

sing

additonal

Risk Appetite for Board considerat

on as part of

the s

trate

gy rev

iew proc

ess.

•

By valid

atng t

he Cor

porat

e Plan aga

inst th

e approve

d or

prop

ose

d Risk Ap

peti

te Stat

emen

t to the B

oard. T

he Boa

appr

oves the st

rate

gy revi

ew and the ﬁ

ve-year Co

rpo

rate

Plan w

ith a conﬁr

mato

n from t

he Gr

oup Chie

f Risk Of

ﬁcer

tha

t it is align

ed wit

h the ERM

F and the G

roup R

isk App

etit

Statement where projectons al

low.

•

Countr

y Risk management

approach and Countr

y Risk

revi

ews are us

ed to en

sure t

he coun

y limt

s and ex

posu

res

are re

ason

able an

d in line wi

th Gro

up str

ateg

, coun

strategy

, and the operating environment, considerng the

identﬁed risks.

Roles and resp

onsiblite

Senior Managers Regime

Roles a

nd resp

onsi

blite

s under t

he ERMF ar

e aligne

d to the

obje

ctves o

f the S

enior M

anage

rs Regim

e. The G

roup Ch

ief

Risk Ofﬁcer is

respon

sible

for the overa

ll dev

elopment and

main

tenan

ce of th

e Grou

’

s ERM

F and for id

entf

ing ma

teria

sk t

ypes t

o which t

he Gr

oup ma

y be pot

entia

lly exp

ose

d. The

Group Chief R

isk Of

ﬁc

er delegates effe

ctiv

e implementaton

of th

e Risk T

e F

amewor

ks (RTFs

) to Ri

sk Framewor

k Ow

ner

who p

rovide s

econ

d line of d

efence ove

rsig

ht for th

e Princp

Risk T

es (PRT

). In ad

diton

, the Gr

oup Chie

f Risk O

fﬁcer h

en for

mally id

entﬁe

d as the re

levant se

nior ma

nager

responsible for the de

velopment of the Group

’

s Digta

l A

sset

Risk A

essm

ent Ap

proach

, as well a

s the se

nior ma

nager

responsible for Cl

imate Risk management as it

relates to

ﬁnan

cal and no

n-ﬁnancal r

isk

s to the G

rou

p arisn

g from

climate cha

nge. This

does not include elements of c

porate

cial resp

onsi

blit

, th

e Grou

’

s co

ntri

buto

n to clima

change and th

e Sustainable Finance strate

gy support

ing a

low-ca

rbon t

ransi

ton, w

hich are t

he resp

onsi

blit

y of ot

her

releva

nt senior managers.

Risk identﬁ

caton

Group

strategy

Stress testing

Risk Appetite

e Gro

’s Risk M

ana

gem

ent Fr

amewo

rk an

d Syst

em of In

ter

nal C

ont

rol a

ppli

es on

ly to w

hol

ly con

tro

lle

d sub

sida

rie

s of th

e Gro

up, an

d not t

o As

soc

iate

s, J

oint

ntu

res o

r Str

uct

ure

d Ent

ite

s of th

e Gro

up.

nior m

ana

ger

s ref

er to i

ndv

idu

als d

esi

gnat

ed as s

eni

or ma

nage

men

t fu

ncti

ons u

nde

r the F

CA an

d PR

A Seni

or Ma

nag

ers Re

gim

e (SMR).

259

Standard Chartered

— Annu

al Repo

rt 2021

sk rev

iew and C

api

tal r

eview

The Risk f

unction

The Risk function is

resp

onsible

for the sustainablity of our

bus

ines

s throu

gh goo

d mana

gemen

t of ris

k acros

s the G

roup

by pro

vidng oversight and

challenge, thereby ensuring that

business is conducted i

n line with regulator

y e

pectations.

The G

roup C

hief Ris

k Ofﬁce

r direct

ly man

ages t

he Risk

nctio

n, whi

ch is sep

arate an

d indep

ende

nt fro

m the

orignati

on, trading and

sales functions of the

businesses.

The Risk function is

resp

onsible

for

•

Main

taning t

he ERMF

, en

suri

ng that i

t remain

s relevan

and ap

propr

iate to t

he Gr

oup

’s busin

ess ac

tivt

ies, a

nd is

effectively communicated and implemented across the

Group, and adminste

ring related govern

ance and

reporting proc

esses.

•

Upho

lding t

he overall i

ntegr

t

y of the G

roup

’s ris

k and ret

urn

dec

isons t

o ensu

re that r

isk

s are prop

erl

y ass

esse

d, tha

these decisons a

re made transparently

on the basis of

prop

er as

ses

sment

s and t

hat ri

sks ar

e contr

olled in

acco

rdance w

ith th

e Grou

’

s s

tandar

ds and Ri

sk App

etite.

•

Over

seeing and challen

ging the manageme

nt of Princpal

Risk T

es and I

ntegr

ated Ri

sk T

ypes u

nder th

e ERMF

The independenc

e of the Risk

uncti

on ensures

that the

nec

essa

y balan

ce in mak

ing ri

sk and re

turn d

eciso

ns is no

compromised by short

-term pressure

generate rev

enu

es.

In addit

he R

isk f

unction

is a centre of e

xcel

lence that

prov

ides sp

ecials

t capabi

lties of r

elevanc

e to ris

management processes in the

broader organisaton.

The Risk function supports the Group

’

s commitment to be

‘H

ere for g

ood

’ by buildn

g a sust

ainabl

e fram

ework th

places regulatory and compliance

anda

rds and a

culture of

appropriate conduc

t at the

forefront of the Group

’

s agenda, i

a manner pr

oportionate to the nature, sca

le and complexity

of th

e Grou

’

s b

usine

ss.

Condu

ct, Financal Crime and Compliance (

CFCC), under the

Management T

eam leadership of the Group Head, CFC

wor

ks alo

ngsid

e the Ris

k fun

ction w

ithn th

e fram

ework o

f the

ERMF to d

eliver a u

nif

ed se

cond li

ne of def

ence.

Three lines of

defence model

Roles a

resp

onsib

lites for risk management a

re deﬁned

und

er a thre

e lines o

f defe

nce mod

el. Each li

ne of def

ence

has a s

pecif

c s

et of res

pons

iblite

s for ri

sk man

ageme

nt and

cont

rol as s

hown in th

e tabl

e below.

Lines of

defence

Deﬁntion

Key

respons

iblites include



The businesses a

nd functions engaged in

supporting re

venue-genera

ting activties that

own an

d mana

ge th

e risk

•

Propose the

risk

s r

qui

red to undertake

revenue-generati

activties

•

Ide

ntif

y, ass

ess

, moni

tor an

d escal

ate ri

sks a

nd is

sues t

o the

cond li

ne and s

enior m

anag

emen

and promote

a healthy

risk culture a

nd good conduct

•

ali

date an

d self-ass

ess co

mpli

ance to RTF

s and po

lices

conﬁ

rm th

e quali

ty o

f valida

ton, a

nd prov

ide evi

denc

e-bas

ﬁrmat

on to t

he se

cond lin

•

Man

age r

isk

s with

n Risk Ap

pet

ite, se

t and exe

cute

rem

edia

ton pl

ans an

d ensu

re law

s and re

gula

tion

s are bei

complied with

•

Ensure systems meet risk

data aggregation, risk reporting and

dat

a quali

y requi

reme

nts s

et by th

e seco

nd line



The contr

ol functions i

ndependent of

the ﬁrst

lin

e that p

rovide ove

rsi

ght and c

halle

nge of r

isk

management to

provide

conﬁdence

to the

Group Chief R

isk Ofﬁcer

, senior management

and t

he Bo

ard

•

Ide

ntif

y, moni

tor and e

scal

ate ri

sks a

nd iss

ues t

o the G

roup

Chie

f Risk O

fﬁce

, se

nior ma

nage

ment a

nd the B

oard a

pro

mote a h

ealt

hy risk c

ultu

re and go

od co

nduct

•

Oversee and chal

lenge ﬁrst

-li

ne risk

-taking

activties and

rev

iew ﬁrs

-line r

isk pro

pos

als

•

Prop

ose Ri

sk App

eti

te to th

e Boar

d, mon

itor an

d repo

adherence

to Risk Appetite

and inter

ene to

curtail business if

it is n

ot in lin

e with e

xist

ng or ad

just

ed Ris

k Appe

tite

, ther

e is

mat

eria

l non-c

ompl

iance w

ith po

lic

y requ

ireme

nts o

r whe

operational con

trols do not

fectively

manage risk

•

Set risk data agg

regation, risk reporting and data

requirement

•

Ens

ure th

at the

re are ap

prop

riat

e contr

ols to c

ompl

y with

app

licabl

e law

s and re

gulat

ion

s, and e

scala

te sign

ﬁcant

non-complianc

e matters to senior management

and the

appropriate committees.



The Internal

Audit function

provides

independent assurance on the

fectiveness of

con

trol

s that s

uppo

rt ﬁr

st line

’

s r

isk ma

nage

ment

of business

activties, a

nd the processes

mainta

by the second

line

•

Independently assess wheth

managem

ent

identﬁed

the k

ey risks in the

businesses and

whether these are

rep

ort

ed and g

overn

ed in lin

e with t

he es

tabli

shed r

isk

management processes

•

Independently assess the adequacy of the desi

gn of controls

and their

operating effectiveness.

nior m

ana

gem

ent in t

his t

abl

e ref

ers t

o ind

vid

ual

s des

igna

ted a

s sen

ior m

anag

eme

nt f

unct

ion

s und

er th

e FCA a

nd PR

A Sen

ior M

ana

ger

s Regi

me (SMR).

260

Standard Chartered

— Annu

al Repo

rt 2021

sk r

evi

Risk management approach

Risk App

etite a

nd proﬁle

e re

cognis

e the fo

llowin

g const

raint

s whic

h deter

mine t

sks th

at we are wi

llng to ta

ke in pur

suit of ou

r strat

egy an

the d

evelopm

ent of a s

ustain

able bu

sine

ss:

•

Risk capacity

is the m

axim

um level of r

isk th

e Gro

up can

sume, gi

ven it

s curr

ent capa

biltie

s and res

ource

s, bef

ore

breachin

g constraint

s determined by capital and liqudit

requirem

ents and inter

nal operation

al capabilty (includng

but n

ot limt

ed to te

chnical i

nfra

stru

ctur

e, risk m

anage

ment

capa

biltie

s, exp

ert

ise

), or othe

wise f

ailng to m

eet th

expectations of regulators and law

enforcement agencies.

•

Risk A

ppetite

is deﬁne

d by the G

roup an

d approved by t

ard. It is t

he max

imum am

ount an

d t

ype of r

isk t

he Gro

is wi

llng to as

sume i

n pur

suit of it

s str

ateg

. Risk A

ppet

ite

cann

ot excee

d risk ca

pacit

The B

oard h

as approve

d a Risk Ap

peti

te Sta

temen

t, wh

ich is

und

erpin

ned by a se

t of ﬁnan

cal and op

erati

onal con

trol

par

amete

rs kn

own as Ri

sk App

etite m

etri

cs and t

heir

associated th

resholds. These di

rectly c

onstrain the

aggregate

sk expo

sures t

hat can b

e taken acr

oss th

e Gro

up.

The G

roup R

isk App

etit

e is revie

wed at le

ast on an an

nual

sis to en

sure th

at it is ﬁt fo

r pur

pose an

d aligne

d with

str

ateg

, and fo

cus is gi

ven to eme

rging o

r new ris

ks. T

he Ris

Appetite Statement is supplemented by an

overarching

sta

temen

t outli

nng the G

roup’

s Ris

k Appe

tite pr

incpl

es.

Risk A

ppetite pr

incples

The Group Risk Appetite is

deﬁned in accorda

with risk

management princples that inform our

overall approach

sk mana

gemen

t and our r

isk cu

lture. We follow th

e highe

eth

ical stan

dards a

nd ens

ure a fair o

utcom

e for ou

r client

s, a

well a

s facilta

ting th

e eff

ecti

ve opera

tion of ﬁn

ancal m

arket

whil

e at the s

ame tim

e meet

ing ex

pecta

tion

s of regu

lato

and l

aw enfo

rceme

nt agen

cies. We set our R

isk App

etit

e to

enab

le us to gr

ow susta

inabl

y and to avo

id sho

cks to e

arnin

or ou

r gener

al ﬁnanca

l healt

h, as wel

l as mana

ge our

Reput

atio

nal Risk i

n a way tha

t does n

ot mate

riall

y unde

rmine

the c

onﬁden

ce of our i

est

ors an

d all inte

rnal an

d exter

nal

stakeholders.

Risk Appetite Statement

The G

roup w

ill not c

ompro

mise ad

heren

ce to it

s Risk Ap

peti

in ord

er to pu

rsue r

evenue gr

owth or h

igher re

tur

ns. Th

e Gro

Risk Appetite is

supplemente

d b

y risk control tools such

granular level limts

, polices, standard

s and other operati

onal

cont

rol par

amete

rs th

at are us

ed to kee

p the G

roup

’s risk

proﬁl

e withn R

isk App

etit

e. The G

roup

’s ris

k proﬁle is i

ts overa

exp

osure t

o risk a

t a given p

oint in ti

me, coveri

ng all app

licable

sk t

ypes

. Sta

tus ag

ainst Ri

sk App

etite i

s repo

rted t

o the

ard, Bo

ard Risk C

ommit

tee an

d the G

roup Ri

sk Comm

itte

includ

ng the status of

breaches and remedi

aton

plans where

appl

icable. T

o keep t

he Gro

’s risk pr

oﬁle wit

hn Risk A

ppet

ite

(

and th

erefo

re also r

isk cap

acit

), we have ca

scade

d crit

cal

Gro

up Risk A

ppet

ite me

tric

s acros

s our Pr

incpal R

isk T

ype

s to

our footprint markets with signﬁ

cant business operations

untr

y Ri

sk App

etite i

s manag

ed at a co

untr

y or l

ocal leve

wit

h Grou

p and re

gional over

sigh

t. In ad

diton t

o Risk Ap

peti

Sta

temen

ts fo

r the Pr

incpal Ri

sk T

ypes

, the G

roup a

lso ha

a Risk A

ppet

ite St

ateme

nt for Cli

mate Ri

sk which i

s an

Inte

grate

d Risk T

e that ca

n manife

st thro

ugh ot

her ri

ypes. Consideraton for standalone Risk

App

etite Statements

will b

e given in 202

2 for ad

diton

al inte

grate

d risk

s such a

Thir

d-Part

y Ris

k and Digt

al As

set Ris

k. Th

ese r

isk t

ype

s are

currently supporte

by Risk

App

etite metrics embedded

wit

hn the re

spec

tive PRT

s. The G

rou

p Risk Co

mmitt

ee, th

Gro

up Finan

cal Crim

e Risk Co

mmitt

ee, th

e Grou

p Non-

Financ

al Risk Co

mmit

tee and t

he Gr

oup As

set an

d Liabli

Committee are responsible f

or ensuring that our

isk pr

oﬁle is

man

aged in c

omplia

nce wit

h the Ris

k Appe

tite s

et by the

ard. Th

e Board R

isk Com

mitte

e and th

e Boar

d Financal

Crime Risk Co

mmittee (for Financal C

rime Co

mpliance

)

adv

ise t

he Boa

rd on and m

onitor t

he Gr

oup

’s compli

ance wit

the Risk Appetite Statement.

The ind

vidual P

rincpal Risk

ypes’ Risk

Appetite Statements

app

rove

d by the B

oar

d are s

et ou

t in the

Princp

sks

secti

(

ges 2

64 t

o 279

Risk identﬁcaton and assess

ment

Identif

ca

tion and assessment of potentially adverse risk

event

s is an es

sen

tial ﬁr

st step i

n manag

ing the r

isk

s of any

business or activt

. T

o ensure consistency in communicat

we use Pr

incpa

l Risk T

ype

s to cla

ssif

y o

ur ris

k expo

sures

Never

thel

ess

, we also r

ecogni

se th

e need t

o maint

an a

hol

istc pe

rsp

ecti

ve since a s

ingle tr

ansa

ction or a

ctiv

t

y may

give rise to

multiple t

ypes of risk exposure

; risk concentrations

may arise from multiple e

posures that

are closely correlated;

and a gi

ven ris

k expo

sure ma

y chan

ge it

s form f

rom on

e risk

ype t

o anot

her

. T

here ar

e also so

urces o

f risk t

hat ar

ise

beyon

d our own o

perat

ions s

uch as t

he Gro

’

s d

epen

denc

on su

pplier

s for t

he provi

son of s

vice

s and te

chnol

ogy

As the Group remains acc

ount

able

for risk

arisng from the

actions of such

third-parties, failure to

ade

quately moni

tor

and manage these rela

ionsh

ps could materially impact

Gro

’s abilt

y to op

erate an

d could h

ave an imp

act on ou

abilt

y to c

ontin

ue to prov

ide ser

vice

s that ar

e mater

ial to

the G

roup.

o facilta

te ris

k ident

ﬁcaton an

d ass

essm

ent, t

he Gr

oup

maintans a dyn

amic risk

-scan

ning process with inp

uts

fro

m the in

tern

al and ext

ernal r

isk env

ironm

ent, a

s well as

pot

enti

al thre

ats an

d oppo

rtu

nites f

rom th

e busi

ness a

clie

nt per

spe

ctives

. The G

roup m

aintan

s a taxon

omy of the

Prin

cpal Ris

k T

pes

, Inte

grate

d Risk T

ype

s and ri

sk sub-t

pes

tha

t are inhe

rent to t

he str

ateg

y and bus

ines

s mode

l; as well

as an e

mergin

g risk

s invento

y that i

nclud

es nea

-ter

m as well

as lo

nger-term un

cert

ainte

s. Ne

-ter

m ris

ks are t

hose t

hat

are on t

he hor

izon an

d can be me

asure

d and mit

gate

d to

some extent, while uncertaintes are

lon

ger

-term matters that

sho

uld be o

n the rad

ar but ar

e not yet f

ully m

easu

rable.

The G

roup C

hief Ris

k Ofﬁce

r and th

e Grou

p Risk Co

mmitt

revi

ew regu

lar rep

ort

s on th

e risk p

roﬁle for t

he Prin

cpal Ris

ypes

, adhe

rence t

o the app

roved Ris

k Appe

tite an

d the

Group risk inv

entor

y includng

erg

ing risks. They use this

informaton to

scala

aterial

developments in each risk

event an

d make reco

mmen

datio

ns to th

e Board a

nnuall

y on

any pot

enti

al chang

es to ou

r Corp

orat

e Plan.

Fur

the

r inf

orm

ato

n on th

e Gro

up’

emerging risks

can b

e fou

nd on

pages 280 to

287

Stress testing

The o

bject

ve of str

ess te

sting i

s to sup

port t

he Gr

oup in

assessing that i

•

doe

s not ha

ve a por

tfoli

o with exce

ssi

ve risk co

ncent

ratio

tha

t could p

roduc

e unacce

ptabl

y high lo

sses u

nder s

evere

but plausible scenarios

•

has s

ufﬁce

nt ﬁnanc

al reso

urces to w

iths

tand s

evere but

plausible scenarios

•

has t

he ﬁnan

cal ﬂexib

lit

y to res

pond t

o extrem

e but

plausible scenarios

•

understands the ke

y business model risk

s a

consider

wha

t kind o

f event migh

t cr

ysta

llise th

ose r

isk

s - even if

extr

eme wi

th a low likelh

ood of o

ccurr

ing - an

d identﬁe

as re

quire

d, acti

ons to mi

tgate t

he likelh

ood or i

mpact

as required.

261

Standard Chartered

— Ann

ual Rep

t 2021

sk rev

iew and C

api

tal r

eview

Ente

rpr

ise st

ress t

est

s incor

porat

e Capit

al and Li

qudit

Adequacy Stress T

ests, includ

ng in

the context of

capital

ade

quac

, re

cover

y and re

solu

tion, a

nd stre

ss te

sts t

hat

assess scenario

s where

our business model

omes

chal

lenge

d, such a

s the B

oE Bien

nal E

xplo

rator

y S

cenar

io,

or unv

iable, s

uch as reve

rse s

tres

s test

Str

ess te

s are per

form

ed at G

roup, cou

ntr

, b

usine

ss and

por

tfo

lio level un

der a wi

de rang

e of ris

ks and a

t var

ying

deg

rees o

f severit

y. Unles

s set by th

e Bank of E

ngland

sce

nario d

esign i

s a besp

oke proce

ss th

at aims to e

xplo

re risk

tha

t can adve

rse

ly impa

ct the G

roup.

The B

oard d

elega

tes app

roval of str

ess te

st sub

misso

ns to th

Ban

k of Engl

and to th

e Board R

isk Co

mmitt

ee, whi

ch review

the recommendations from the Group R

isk Committee.

sed on t

he stre

ss te

st resu

lts

, the G

roup Ch

ief Financ

ﬁcer and G

roup C

hief Ris

k Ofﬁce

r can reco

mmen

str

ategi

c action

s to the B

oard t

o ensur

e that t

he Gro

str

ateg

y remain

s with

n the Bo

ard-app

roved Ris

k Appe

tite.

Princpal Ris

k T

ypes

Prin

cpal Ris

k T

pes ar

e risk

s tha

t are inhe

rent in ou

r strat

egy

and b

usine

ss mo

del and h

ave be

en form

ally de

ﬁned in t

Gro

’s ERMF

. Thes

e risk

s are ma

nage

d throu

gh dist

nct RTFs

whi

ch are appr

oved by the G

roup Ch

ief Risk O

fﬁce

The Pr

incpa

l Risk T

ype

s and as

socia

ted Ris

k Appe

tite

Sta

temen

ts ar

e approved by t

he Bo

ard.

The G

roup c

urre

ntly re

cogni

ses Clim

ate Ris

k, Di

gtal As

set Ri

and T

hird-Par

ty R

isk as In

tegrat

ed Ris

k T

pes

. Climat

e Risk is

deﬁned as

“the potential

for ﬁnanc

al loss and non

-ﬁnanc

det

rime

nts a

risng f

rom cli

mate ch

ange an

d socie

’

res

pons

e to it

”

; Digt

al As

set Ris

k is deﬁne

d as “the p

oten

tial

for regulator

enalties, ﬁ

anc

al loss and or r

eputational

dam

age to th

e Gro

up resu

lting f

rom digt

al ass

et exp

osure o

digt

al ass

et rela

ted act

ivti

es ari

sng fro

m the G

roup

’s Clien

Prod

uct

s and Proje

cts” an

d Third-Par

y ris

k is deﬁne

d as “the

potential for loss or

se impact

rom

failure to manage

mul

tiple r

isk

s arisn

g from t

he use o

f third p

arti

es, an

d is the

aggregate of these risks.

”

In lin

e with t

he Gro

’

s s

trate

gy to ex

plor

e digtal-a

sse

related opportunites, the Group continued to

develop and

enhance its Dig

tal As

set R

isk Management approach during

21 in order to

furt

her

embed risk management practic

and en

sure t

hat digt

al ass

et acti

vtie

s acros

s the G

roup ar

appropriately risk managed, a

nd withn

roup

’

s Risk

Appetite. The approach requires

comprehensive assessment

of r

isks a

risng f

rom su

ch intia

tves an

d seek

s to int

egrat

the approach withn

existng risk management practices.

The a

pproa

ch reco

gnise

s the ne

ed for d

igtal as

set su

bject

mat

ter exp

ert

s to a

sses

s and ad

vise o

n the sp

ecif

c ri

sks

pre

sente

d by digtal a

sse

. A Digtal A

sse

ts Ri

sk Mana

geme

pol

icy

, o

utlin

ng requ

ireme

nts f

or digta

l asse

t intiat

ves, h

been implemented and is supported by deﬁ

ned processes,

templates and gui

dance relating to the iden

tﬁc

aton

of hig

her

-r

isk digt

al ass

et acti

vtie

s, coi

n admis

son

requirem

ents

, and enhanced due dilgence practice

s for

pro

duct

s, pro

ject

s and cli

ent

s. The G

roup h

as for

malis

ed a

stan

d-alon

e commi

ttee t

o overse

e digta

l asse

t relat

ed ri

sks

In f

utur

e review

s, we will c

ontin

ue to con

sider if e

xist

Prin

cpal Ris

k T

pes or i

ncrem

ental r

isk

s shou

ld be tr

eate

d as

Inte

grate

d Risk T

es. Th

e tabl

e below sh

ows the G

rou

’

cur

rent Pr

incpal Ri

sk T

ypes

Princ

pal Risk T

ypes

Deﬁntion

Credit R

isk

•

tent

ial for l

oss du

e to th

e failu

re of a cou

nter

par

y to mee

t it

s agree

d obli

gato

ns to p

the Group.

raded

Risk

•

tent

ial for l

oss re

sult

ing f

rom act

ivt

ies un

dert

aken by th

e Grou

p in ﬁnan

cal mar

ket

reasury Risk

•

rea

sur

y Ris

k is for

med o

f Capi

tal and L

iqudi

y Risk

, and Int

eres

t Rate Ris

k in the B

ank

ing

ok. C

apit

al Risk i

s the po

tent

ial fo

r insu

cien

t level, c

ompo

sito

n or dist

rbu

tion o

f capit

al,

own f

und

s and el

igble li

ablit

es to su

ppo

rt our n

orm

al act

ivti

es. L

iqudi

ty R

isk is t

he ri

sk tha

we ma

y not ha

ve suf

ﬁcent s

tabl

e or dive

rse s

ourc

es of f

undin

g to me

et our o

bliga

ton

s as

ey fall du

e. Inte

rest Rat

e Risk in t

he Ba

nkin

g Book i

s the p

oten

tial fo

r a redu

ctio

n in ear

ning

or e

conom

ic value d

ue to m

ovemen

ts in in

tere

st rat

es on ba

nkin

g book a

sse

, liabl

ites a

off

-balance sheet items.

Operational and T

echnology Risk

•

Potential

for loss r

esulting from inadequate

or failed internal

processes, technology ev

ent

hum

an err

, o

r fro

m the imp

act of e

xter

nal even

ts (incl

udng l

egal r

isk

)

Information and Cyber

curity R

•

sk to th

e Gro

’s ass

ets

, ope

rati

ons an

d indv

idua

ls due t

o the po

tent

ial fo

r unau

thor

ise

access, use, d

isclosure, d

isrupton, modifcation, or destruction

of informaton assets and/

informaton systems.

Compliance Risk

•

Pot

entia

l for pe

nalt

ies or lo

ss to t

he Gr

oup or f

or an ad

vers

e impa

ct to ou

r client

sta

kehold

s or to th

e inte

grt

y of t

he mar

kets we o

pera

te in th

rough a f

ailu

re on our p

art

to comply

with laws or

gulations.

Financal Crime Risk

•

Potential

for legal or regulatory penalties, material ﬁ

nancal

loss or reputational damage

res

ulti

ng fro

m the fa

ilure t

o comp

ly wit

h appli

cable l

aws an

d reg

ulati

ons re

lati

ng to

internatonal

sanctions, anti

-money laundering, anti

-briber

y and c

orruption, and fraud.

Model R

•

Pot

enti

al los

s that m

ay oc

cur as a co

nse

quen

ce of de

cison

s or th

e risk o

f mis-e

stim

aton

at coul

d be pr

incpa

lly ba

sed o

n the ou

tpu

t of mod

els

, due to e

rror

s in th

e develo

pmen

implementaton

or use of such models.

Reputation

and Sustainablit

y Risk

•

Pot

enti

al for da

mage t

o the f

ranch

ise (

uch as l

oss o

f tru

st, e

arni

ngs or m

arket c

apital

sati

caus

e of stake

hold

ers t

akin

g a nega

tive v

iew of th

e Gro

up thr

ough a

ctual o

r perc

eived

actions or

inactons, includ

ng a failu

re to

uphold responsible business

conduct or lapses

our c

ommit

men

t to do no s

ignﬁcan

t enviro

nmen

tal and s

ocial h

arm t

hrou

gh our cl

ient

thi

rd-par

y rela

tion

shps or o

ur own o

pera

tion

Fur

the

r det

ail

s of ou

r prin

cp

al ris

ks a

nd how t

hes

e are b

eing m

ana

ged a

re se

t out i

n the

Princpal Risks

section (

page

s 26

4 to 279

262

Standard Chartered

—

nual Re

por

t 2021

sk r

evi

Risk management approach

ERMF effectiv

eness re

view

The Group Chief

Risk Ofﬁcer is responsible for

annually

afﬁ

rmng t

he eff

ecti

venes

s of the ER

MF to th

e Board Ri

Com

mitte

e. T

o facilta

te this

, an ERMF ef

fec

tiven

ess rev

iew

was es

tabli

shed in 201

8, wh

ich foll

ows the p

rincpl

e of

evid

ence-b

ase

d self

-a

sse

ssme

nts f

or all th

e Risk T

ype

Framewo

rks a

nd relevan

t police

s. A to

p-dow

n review an

chal

lenge o

f the re

sult

s is cond

ucte

d by the Gr

oup Chie

f Risk

ﬁcer wit

h all Risk Fra

mework O

ers

, and an opi

non

on th

e inter

nal con

trol env

ironm

ent is pr

ovided by G

roup

Intern

al A

dit.

The ER

MF eff

ecti

venes

s review i

s condu

cted an

nually a

enab

les me

asur

ement o

f progr

ess ag

ainst t

he 2018 ba

selin

The key o

utcom

es of th

e 20

1 eff

ecti

venes

s review ar

•

Whil

e the ERMF h

as evolve

d over the p

ast fo

ur year

s to

reﬂe

ct chang

es in th

e risk p

roﬁle, th

e focu

s in 20

21 con

tinu

on th

e eff

ecti

ve embe

dding of t

he fr

amewor

k acros

s the

organisaton.

•

The m

ore mat

ure ﬁn

ancal ri

sks co

ntinu

ed to b

e more

effectively managed on a rela

tive basis compar

ed to

non-ﬁn

ancal r

isk

s, and o

ther a

spect

s of t

he ERMF are

established and operati

ng to a

more consistent sta

dar

incl

udng t

he key risk co

mmitt

ees an

d key suppo

rtin

standard

•

Self

-assess

ments performed in our footprint markets reﬂect

the maturing ERMF

adopt

ion

ith

emphasis on ﬁrst

-line

ownership of risks. Countr

y and regiona

l risk committees

cont

inue to p

lay an a

ctive an

d vital r

ole in man

aging a

over

seein

g mate

rial is

sues a

risng i

n count

ries

Ove

r the co

urs

e of 2022

, the Gr

oup aim

s to fu

rth

er stre

ngthe

its risk management practices through further improvng on

the management

of non-ﬁ

nancal risks with

n its businesses,

nctio

ns and a

cross t

he foo

tpr

int, a

s well as ma

nagem

ent of

risk

s which are

inte

grated in nature.

Execu

tive and Board ri

sk o

vers

ight

ver

iew

The Board has ultimate

respon

sib

lit

y for

isk management

and i

s suppo

rte

d by six Bo

ard-level co

mmitt

ees

. The Bo

ard

appr

oves the ERM

F base

d on the r

ecomm

enda

tion f

rom th

ard Risk C

ommit

tee, w

hich als

o recom

mend

s the G

roup

Risk A

ppet

ite St

ateme

nt for all Pr

incpa

l Risk T

ype

s othe

r than

Financal Crime Risk. Financal Crime Ris

k Appetite is reviewed

and re

comm

ende

d to the B

oard by th

e Board Fin

ancal Cr

ime

Risk Committee. I

n additon, the Culture a

nd Sustainab

lit

Com

mitte

e (

C) overs

ees th

e Gro

’

s c

ultur

e and key

sustainablit

y prior

ties.

Boar

d and Execut

e lev

el ri

sk commit

tee gov

nance st

ructu

The C

ommit

tee g

overnan

ce str

uctu

re below p

rese

nts t

he view a

s of 2021.

Group As

set and L

iab

lity Committee

Group Risk Committee

Board of Directors

Board R

isk

Committee

Culture and

Sustain

ablity

Committee

Gov

rnance

and

Nominaton

Committee

Board

Financal

Crime R

isk

Committee

Remuneration

Committee

Aud

Committee

Group Non-F

inancal Risk

ommittee

Group Financal Crime Risk Commit

tee

Group Responsib

lity and Reputational

Risk Committee

IFR

S 9 Impa

irme

nt Co

mmit

tee

Model Risk Committee

Corporate, Commercial

and Institutonal Banking Risk

Committe

nsum

er, Priva

te and B

usin

s Bank

ing Ri

sk Co

mmit

tee

Asia Risk Committee

rica a

nd Mid

dle Ea

st Risk C

omm

itte

Investment

Committee

Inv

estment Committee for

ransportation Assets

Standard

Chartered V

entures Commi

tte

The commi

ttee governance

str

ture ensures

that

risk

-taking authorit

y and

isk ma

agement

olic

es are

cas

caded d

own fro

m the B

oard to t

he appro

pria

nctio

nal, cli

ent se

gment an

d count

y-level se

nior

management and committees. Information regarding

mat

erial r

isk is

sues a

nd comp

liance w

ith po

lices and

standards is

communicated to

the appropriate countr

clie

nt segm

ent

, fun

ction

al and Gr

oup-l

evel senio

management and committees.

Board

vel c

ommittees

Executiv

e le

vel c

ommittees

ia Ri

sk Co

mmit

tee d

eri

ves a

uth

ori

ty f

rom b

h the G

rou

p Risk C

omm

itt

ee (fo

r over

sigh

t of th

e Asi

a reg

ion) and t

he E

xecu

tive C

omm

itt

ee of S

tan

dard

Cha

ered B

ank (

Hon

g Kong) L

imte

d (“S

CBHK

”) fo

r over

sigh

t of SC

BHK G

rou

263

Standard Chartered

— Annu

al Repo

rt 2021

sk rev

iew and C

api

tal r

eview

Group Risk Committee

The G

roup R

isk Co

mmitt

ee, whi

ch deri

ves it

s auth

orit

y f

rom

the Group Chief

Risk Ofﬁcer

, is responsible for ensuring the

effective ma

nagement of risk

throughout the

roup

sup

port o

f the G

roup

’s stra

tegy. The Gr

oup Chie

f Risk

ﬁcer cha

irs th

e Grou

p Risk C

ommit

tee, w

hose m

ember

are dra

wn f

rom the G

roup

’

s M

anag

ement T

eam

. The

Com

mitte

e dete

rmin

es the ERM

F and over

see

s its ef

ctive

implementaton ac

ross the Group,

includng the delegation

of any pa

rt of it

s aut

hor

ites to a

ppropr

iate in

dvid

uals o

properly constituted sub-committee

Group Risk Committee sub-committ

ees

The G

roup N

on-Finan

cal Risk C

ommit

tee, co

-chair

ed by

the Global Head, Enterprise Risk Management and Deput

CRO SC B

ank and G

roup He

ad, C

entral Fin

ance and D

eput

CFO SC B

ank

, govern

s the no

n-ﬁnancal r

isk

s acros

s clien

businesses, products and

uncti

ons. The non

-ﬁna

ncal Risk

ypes i

n scop

e are Ope

ratio

nal and T

ech

nolog

y Risk

Compliance Risk, Conduct

Risk

, In

formation and C

yber

Securit

y Risk, F

raud Risk and Secondary Reputational Risk

tha

t is cons

eque

ntial i

n natur

e arisn

g from r

isk

s per

tainn

to Pr

incpal Ri

sk T

ypes

. The C

ommit

tee al

so review

s the

ade

quac

y of th

e inter

nal con

trol s

ystem a

cros

s all Princp

Risk T

ypes

The G

roup Fin

ancal Cr

ime Ris

k Commi

ttee

, chaire

d by the

Group H

ead, Conduct

, Financal

Crime and Co

mpliance

governs the Financal Crime Risk T

ype (

excluding Fraud Risk

and Secondar

Reputational

Risk that is

conse

quential

nature ar

isng from risk

s pertainng to Financal Crime Risk)

acro

ss th

e Grou

p. The Co

mmitt

ee ens

ures t

hat the Fin

ancal

Cri

me Risk p

roﬁle is m

anage

d withn a

pproved Ri

sk App

etite

and p

olices

. The C

ommit

tee is a

lso res

pons

ible fo

recomme

nding the Financal Crime Risk Appet

ite Statement

and Ri

sk App

etite m

etr

ics to t

he Boa

rd Financal C

rime

Risk Committee.

The Group Responsib

lit

y and R

eputational Risk Committee,

chai

red by the G

rou

p Head

, Cond

uct, Fin

ancal Cr

ime

and Compliance, ensures

he effective management of

Reput

atio

nal and S

ustain

ablit

y Ris

k acros

s the G

roup. Th

incl

udes p

rovidng ove

rsig

ht of mat

ter

s arisn

g from c

lient

product

s, transactions and strategic coverage-related

dec

isons a

nd matt

ers e

scala

ted by th

e respe

ctive Ri

Framewo

rk Ow

ner

The I

FRS 9 Imp

airme

nt Comm

itte

e, chair

ed by the G

loba

Head, Enterprise Risk Management, ensures the effe

ctive

man

ageme

nt of th

e expe

cted cr

edit lo

ss comp

utat

ions a

well a

s stage a

llocat

ion of ﬁn

ancal as

set

s for qu

arte

rly

ﬁnan

cal repo

rtin

g with

n the au

thor

ites s

et by the G

roup

Risk Committee.

The M

odel R

isk Co

mmitt

ee, chai

red by th

e Glob

al Hea

Enterprise Risk Management, ensures the effe

ctive

asure

ment an

d manag

ement o

f Mod

el Risk in li

ne wit

inte

rnal p

olice

s and Mod

el Risk A

ppet

ite.

The C

orp

orate

, Comm

ercial an

d Insti

tuto

nal Ban

king (

)

Risk C

ommi

ttee, c

haire

d by the Chie

f Risk Of

ﬁcer, CCIB and

Europ

e & Amer

icas

, ensu

res the e

ffe

ctive m

anage

ment o

f risk

thr

ougho

ut CCIB in su

ppor

t of th

e Grou

’

s st

rate

The C

onsu

mer, Private a

nd Bus

ines

s Banki

ng (

CPBB) Risk

Com

mitte

e, chai

red by the C

hief Ris

k Ofﬁce

, CPBB

, ensu

res

the e

ffe

ctive m

anage

ment of r

isk t

hrough

out CPB

B in supp

ort

of th

e Grou

’

s s

trate

The t

wo re

gion

al risk co

mmit

tees ar

e chaire

d by the Chi

Risk O

fﬁce

r for the r

espe

ctive re

gion

. Thes

e ensu

re the

fect

ive mana

geme

nt of ri

sk in the r

egion

s in supp

ort o

the Group

’

s str

ategy

The I

nvestme

nt Comm

itte

e ensu

res the o

ptim

sed wi

nd-

down o

f the G

roup

’s exis

tng dire

ct investm

ent act

ivt

ies in

equites, quas

i-equi

tes (

exclud

ing mezzani

)

, f

unds

and

other alternative inv

estm

ents (

xcluding

debt/

debt

-like

instrument

)

. The Committee is chaired b

y a representative of

the Risk function (

whi

ch includes the

lobal Head,

Enterprise

Risk Management, Global Head, Group Special

ssets

Management and other members appointed by the Group

Chief Risk Of

ﬁcer

)

The I

nvestme

nt Comm

itte

e for T

ransp

ort

ation A

ets

, chair

by the Ch

ief Ris

k Ofﬁce

, CCIB an

d Europe & A

meri

cas, e

nsure

the o

ptim

satio

n of the G

roup

’s invest

ment in a

viato

n and

ship

png ope

ratin

g leas

e ass

ets

, wit

h the aim o

f delive

rng

bet

ter re

turn

s thro

ugh the c

ycle.

The Standar

d Chartered V

entur

es (

SCV

)

Committee, c

haired

by the Ch

ief Ris

k Ofﬁce

, SC

, re

ceives a

utho

rit

y dire

ctly f

rom

the G

CRO and en

sure

s the ef

fect

ive man

ageme

nt of ri

throughout

SCV and

indvidua

l entit

es operating under

SCV

Group As

set and Liablity Committee

The G

roup A

et and Li

ablit

y Com

mitte

e is chai

red by th

Gro

up Chie

f Financal O

fﬁcer. Its m

embe

rs are d

rawn

pri

ncpall

y from t

he Man

agem

ent T

eam. T

he Com

mitte

e is

responsible for determin

ng the Group

’s

approach to balance

she

et str

ateg

y and recove

y plann

ing. Th

e Comm

ittee i

als

o respo

nsib

le for en

suri

ng that

, in execu

ting t

he Gro

’s

str

ateg

, the G

roup o

perat

es wit

hn inter

nally a

pproved

Risk Appe

tite and external req

uirement

s relating to capital,

loss-absorbing ca

pacity

, liqudity

, leverage,

Interest Rate Risk

in th

e Bank

ing Bo

ok, B

ankin

g Book B

asi

s Risk and S

tru

ctura

Foreign E

xchange Risk, and me

ets inter

nal and external

recovery planning requirements.

264

Standard Chartered

– An

nual Re

por

t 2021

sk r

evi

Risk management approach

rinc

pal risk

e manage a

nd control our Princ

al R

isk T

through dist

nct Risk T

ype Frame

work

s, polic

and Board-a

pproved Risk Appetite

The Group deﬁnes Credit R

isk as the potential for loss

due to the failure of a c

ounterpart

y to meet it

s agreed

obligat

s to pay the Group.

Risk Appetite Statement

The G

roup m

anag

es it

s credit e

xpos

ures fo

llowin

the princple

of diversﬁcat

on across products,

geograp

hies, client segm

ents and indus

y sectors

Roles and resp

onsiblite

The C

redit Ri

sk T

ype Framewo

s for the G

rou

p are set an

owne

d by the Chi

ef Risk O

fﬁcer

s for t

he bus

ines

s segm

ent

The C

redit Ri

sk fu

nctio

n is the s

econd-l

ine cont

rol f

uncti

responsible for independent

challenge,

monitorng and

over

sight of t

he Cre

dit Risk m

anage

ment pr

actice

s of the

business and functions engaged in

or supporting rev

enue-

gen

eratin

g acti

vtie

s which co

nstit

ute t

he ﬁrs

t line of d

efence

In add

iton

, they ens

ure th

at credi

t risk

s are pro

per

ly as

sess

and t

ransp

arent

; and th

at credi

t decis

ons are co

ntrol

led in

acco

rdance w

ith th

e Grou

’

s Ri

sk App

etit

e, credit p

olice

and standard

Mitgation

gment

-sp

ecif

c po

lices ar

e in place f

or the m

anage

ment o

Cre

dit Risk

. The Cr

edit Poli

cy for C

orp

orate

, Comm

ercial an

Ins

titu

tonal B

ankin

g Client C

overage s

s the pr

incple

s that

mus

t be foll

owed for t

he end-t

o-end c

redit p

roces

s inclu

dng

credit intiaton, cre

dit grading, credit ass

essment

, product

structuring, Credit Risk mit

gation, monitorng

and control,

and documentation.

The C

onsu

mer, Private a

nd Bus

ines

s Banki

ng Cred

it Risk

Management Policy sets the princples for the management

of Co

nsum

, Pr

ivate an

d Busi

ness B

ankin

g segm

ent

s, th

mus

t be foll

owed for e

nd-to-e

nd cre

dit proc

ess in

cludng

cre

dit intia

ton, cr

edit as

ses

smen

t and mon

itorn

g for le

nding

to these

ments.

The G

roup a

lso se

ts ou

t stan

dards fo

r the el

igbilt

enf

orceab

ilt

y and ef

fect

ivene

ss of Cre

dit Risk m

itgat

ion

arrangements

. P

otent

ial

credit losses from a given account,

clie

nt or por

tfo

lio are mit

gate

d using a r

ange of t

ools s

uch

as collateral, ne

tting agreeme

nts, cre

dit insurance, credit

derivatv

es and guaran

es.

Risk m

itgan

ts are a

lso care

ful

ly ass

ess

ed for t

heir ma

rket

value,

gal

enforceabilty

, correlation and counterparty risk

of th

e prote

ctio

n provide

Col

later

al must b

e valued p

rior t

o drawdow

n and reg

ular

the

reaf

ter as r

equir

ed, to re

ﬂect cur

rent m

arket con

diton

the p

robab

ilt

y of recove

y and the p

erio

d of tim

e to real

ise

the c

ollate

ral in th

e event of liq

udati

on. Th

e Grou

p also

eks to d

iver

sf

y it

s collat

eral hol

dings a

cros

s asse

t clas

ses

and market

Where guaran

tees, credit ins

urance, standby letter

s of credit

or cre

dit der

ivat

ves are us

ed as Cre

dit Ris

k mitga

tion, t

cre

dit

wort

hnes

s of the pr

otect

ion prov

ider is a

sse

d and

mon

itore

d using t

he sam

e credit a

pproval pro

cess a

pplie

d to

the obligor

Gov

ern

ance committe

e o

versight

At Bo

ard level, t

he Boa

rd Risk C

ommit

tee over

see

s the

fect

ive mana

geme

nt of Cre

dit Risk

. At the exe

cuti

ve level,

the G

roup R

isk Co

mmitt

ee (

GRC) ove

rse

es and ap

point

sub-committees for the

management of Cr

edit Risk

– in

part

icular the Corp

orate, Commercial and In

stitutonal

Ban

king Ri

sk Com

mitte

e (

CCIBRC), Con

sume

, Pri

vate and

Busine

ss Banking Risk C

ommittee (

CPBBRC), and the regional

sk commi

ttee

s for As

ia, and A

fri

ca & Middl

e East. T

he GRC

als

o recei

ves repo

s fro

m other key G

roup C

ommit

tees s

uch

as th

e Stan

dard Cha

rter

ed Ban

k Exec

utive Ri

sk Com

mitte

The

se comm

itte

es are re

spon

sible fo

r overs

eeing t

he Cre

dit

Risk p

roﬁle of t

he Gro

up wit

hn the re

spe

ctive bu

sines

s area

and re

gion

s. Me

eting

s are hel

d regu

larl

, and th

e commit

tee

mon

itor all m

ater

ial Cred

it Risk ex

posu

res, a

s well as key

internal developments and external trends, and ensure

hat

appropriate action is

taken.

Decison-making aut

hori

tes and delegation

The C

redit Ri

sk T

ype Framewo

s are the f

orma

l mecha

nism

which delegate C

redit Risk

aut

horites

cascading from

the

Gro

up Chie

f Risk Of

ﬁcer, as the S

enior M

anage

r of the Cr

edit

Risk T

e, to ind

vidu

als suc

h as the b

usine

ss se

gment

s’ Chie

Risk Ofﬁcers. Named indviduals further delegate credit

authorites to ind

vidual credit

ﬁcers based on risk

-adjusted

scal

es by cust

omer t

e or po

rtfo

lio.

Cre

dit Risk a

uthor

ite

s are reviewe

d at lea

st annu

ally to e

nsure

that they remain appropriate. In Corporat

ommercial

and Instit

utonal Bankin

g Client Cov

erage, the indv

iduals

delegating the Credit

Risk authorites perform oversight b

revi

ewng a sam

ple of t

he limt ap

plicato

ns app

roved by the

delegated credit ofﬁcers on

a monthly basis

In Consumer,

Pri

vate and B

usine

ss Ba

nking

, in mos

t cases c

redit de

cison

stem

s and too

ls (

e.g. app

licato

n score

cards

) are u

sed fo

credit decis

oning. Where

manual or discretonary credit

dec

isons a

re applie

d, th

ese are su

bject t

o peri

odc qu

alit

control

asses

smen

t and assuranc

e checks.

Credit R

isk

265

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Monito

rng

e regularly monitor

credit exposures, portfolio performance,

and ex

tern

al tren

ds tha

t may imp

act ri

sk mana

geme

out

comes

. Inte

rnal r

isk ma

nagem

ent rep

ort

s th

at are

presented to risk committees contain i

nformaton on k

pol

itcal an

d econo

mic tre

nds acr

oss ma

jor po

rtfo

lios an

countries, por

tfolio

delinquency and loan imparment

perf

ormance.

The I

ndust

y Port

folio M

andat

e, develop

ed jon

tly by th

Corp

orate, Commercial and In

stitutonal B

anking Client

Cover

age bus

ines

s and th

e Risk f

uncti

on, prov

ides a fo

ward-

looking assessment of risk using a

platform from which

busines

s strategy

, risk consideratons and client planning are

per

for

med wi

th one co

nsen

sus vi

ew of the e

xtern

al indu

str

outlook

, portfolio o

ver

views, Risk Appetite, under

writng

princ

ples and

stress test insg

In Corp

orate, Commercial and Ins

titutonal Bank

ing Client

Coverage

, clients and portfolios a

re subjected to additona

revi

ew when t

hey disp

lay si

gns of act

ual or p

oten

tial

weak

nes

s; for examp

le, whe

re ther

e is a dec

line in th

e client

’s

pos

iton w

ithn th

e indus

, ﬁna

ncal det

erio

raton

, a brea

of coven

ant

s, or no

n-per

form

ance of an o

bligat

on wit

hn the

sti

pulat

ed per

iod. S

uch acc

ount

s are sub

jecte

d to a ded

icate

pro

cess over

en by the Cre

dit Is

sues C

ommit

tees i

n the

relevant countries where client account strategies and credit

grades are

re-evaluated. In add

iton, remedial actions,

includng exposure reduction, security enhancement or exitng

the account, could be

under

tak

en, and certain accounts

cou

ld also b

e trans

ferr

ed into t

he cont

rol of G

roup S

pecia

set

s Man

ageme

nt (

GSA

, wh

ich is ou

r speci

alst re

cover

unit f

or Cor

pora

te, Com

mercia

l and Ins

titu

tonal B

ankin

Client Cov

erage that operates independently from our

main busine

ss.

For C

onsum

, Pr

ivate a

nd Busi

ness B

anki

ng, ex

posu

res and

coll

ateral m

onito

rng are p

erfo

rme

d at the co

unte

rpar

and/

or po

rtfo

lio level a

cross d

iffe

rent cli

ent se

gment

s to

ens

ure tra

nsact

ions an

d por

tfoli

o expo

sures r

emain w

ithn

Risk Appetite. P

ortfolio delinquency trends are monitored

an on

going b

asis

. Account

s th

at are pa

st due (

or p

ercei

ved

as hig

h risk b

ut not ye

t past d

) are subj

ect to a co

llect

ions

or re

cover

y pro

cess m

anage

d by a speci

alst f

uncti

independent from the orig

nation f

unction.

In some countries,

asp

ect

s of coll

ectio

ns and re

cover

y act

ivti

es are ou

tso

urce

For discreton

y lending portf

olios, simlar proces

ses as of

Commercial client

coverage are fol

lowed.

In add

iton

, an indep

ende

nt Credi

t Risk Revie

w team (p

art of

Enterprise Risk Management

), performs judgement

-based

sess

ment

s of th

e Credi

t Risk pro

ﬁles at var

ious p

ortf

olio

level

s, wit

h focu

s on sele

cted co

untr

ies an

d segm

ent

thr

ough de

ep dive

s, comp

arati

ve analy

sis

, and revi

ew and

chal

lenge o

f the ba

sis of cr

edit ap

provals. T

he revi

ens

ures t

hat the evo

lvin

g Credit R

isk proﬁl

es of Co

rpo

rate,

Com

mercia

l and Ins

titu

tonal B

ankin

g and Co

nsum

, Pr

ivate

and B

usine

ss Ban

king ar

e well man

aged w

ithn ou

r Risk

App

etit

e and pol

ices th

rough pr

ompt an

d for

ward-lo

okin

mitgating ac

ions.

Credit

rating and measu

rement

All cr

edit pro

pos

als are su

bject to a r

obust C

redit Ri

sess

ment

. It incl

udes a c

ompreh

ensi

ve evaluat

ion of th

client

’

s credit qu

ality

, inc

ludng willngness

, abil

t

y and

capa

cit

y to rep

. Th

e prim

y len

ding con

sider

aton is b

ase

on th

e client

’s credi

t qualit

y an

d the re

paym

ent cap

acit

y fr

ope

ratin

g cashﬂow

s for cou

nter

part

ies

, and per

son

al incom

or wea

lth for i

ndvi

dual bo

rrower

s. Th

e ris

k asse

ssm

ent give

due considerat

on to the client’s

liqudity and leverage

positon. Where a

pplicable,

the ass

essment includes

detaile

d analysis of the Credit Risk mitg

ation arrangem

ents

to de

term

ine the l

evel of rel

iance on s

uch arr

angem

ent

as th

e seco

ndar

y s

ource of r

epay

ment i

n the event o

f a

signﬁcant deterior

aton in a

lient’s credit qualit

y leading

to default.

Risk measurement plays a central

role, along with

judgement

and exper

ience, in informng risk-taking and por

tfolio

man

ageme

nt deci

sons

. Since 1 J

anuar

y 20

08, we h

ave use

the a

dvance

d inter

nal rat

ings-b

ased a

pproa

ch unde

r the

Basel regulator

y framew

k to

calculate Credit

Risk cap

ital

req

uirem

ent

s. The G

roup h

as als

o estab

lishe

d a glob

programme to undertake

a comprehensive asses

sment of

capit

al requ

ireme

nts n

eces

sar

y to b

e imple

mente

d to me

the l

atest r

evise

d Bas

el III ﬁn

alsat

ion (Bas

el IV

) regu

latio

ns.

A stan

dard alp

hanum

eric Cr

edit Ri

sk grade s

yst

em is use

for Corporate, Commercial and I

nstitutonal Banking Client

Cover

age. Th

e numer

ic grad

es ru

n from 1 t

o 14 and som

e of

the grades ar

e f

urther sub-classifed. Lower

numer

credit

grad

es are in

dcative o

f a lower likelh

ood of d

efaul

t. Cre

dit

grad

es 1 to 12 are a

ssig

ned to p

erfo

rmin

g custo

mers

, whil

cre

dit grade

s 13 and 14 ar

e assig

ned to n

on-per

for

ming or

defaulted customers.

Con

sume

, Pri

vate and B

usin

ess B

ankin

g inter

nal rat

ings-

sed po

rtf

olios us

e appli

caton an

d beha

viou

ral cre

dit scor

tha

t are calib

rated t

o gener

ate a pro

babilt

y of d

efaul

t and

then mapp

ed to the standard alphanu

meric Credit Risk grade

stem

. W

e refer t

o exter

nal rat

ings f

rom cre

dit bur

eaus

(

ere the

se are a

vailabl

); howeve

, we do n

ot rely s

olel

on these to determine

CPBB c

redit grades. R

isk Decison

Framewo

rk (RDF

) as a cre

dit rati

ng sys

tem sup

por

ts t

delivery of optimum risk

-adjusted-returns with controlled

volat

ilt

y and is u

sed to d

eﬁne th

e por

tfoli

w book

ing

segmentation, shape and dec

ison critera

for the unsecured

consumer business segment.

Advan

ced inte

rnal r

ating

s-base

d mode

ls cover a su

bstant

ial

maj

ort

y of ou

r expo

sures a

nd are us

ed in as

ses

sing ri

sks a

t a

cust

omer an

d por

tfoli

o level, se

ttin

g strat

egy an

d optim

sing

our risk

-return decisons. Material i

nter

nal

ratings-based risk

asure

ment mo

dels a

re approve

d by the Mo

del Ris

Com

mitte

e. Prio

r to review a

nd approva

l, all inte

rnal ra

ting

sed mo

dels ar

e validat

ed in det

ail by a mod

el valida

ton

tea

m, whic

h is sep

arate f

rom th

e team

s that deve

lop and

maintan

odels. Models undergo

annual v

alidaton

by an ind

epen

dent mo

del valid

aton t

eam. Revi

ews are

als

o trig

gered i

f the pe

rfor

mance o

f a mode

l dete

riora

tes

materially against

predetermined thresholds during the

ongoing model performance monitorng

proces

hic

h tak

place between the annual v

alidatons.

266

Standard Chartered

– Ann

ual Re

por

t 2021

sk r

evi

Risk management approach

Credit Concentrat

ion

Risk

Credit Concentration

Risk may arise from a single

large

exp

osure t

o a count

erp

art

y or a gro

up of con

necte

counterparties, or from multiple exposures acr

s the

ortfolio

that are closely correlate

d. L

arge exposure Concent

ration

Risk i

s mana

ged th

rough co

ncent

ratio

n limt

s set for a

coun

terp

art

y or a g

roup of co

nnect

ed cou

nter

part

ies ba

sed

on control

and economic dependence

critera. Risk Appetite

met

ric

s are set a

t port

folio l

evel and mo

nitor

ed to con

trol

concentrations, where appropriate, by

indust

, specif

c

products, tenor

, collateralisaton

level,

top clients and

expos

ure to holding companies

. Single name credit

conc

entra

tion th

resh

olds ar

e set by clie

nt group d

epen

ding on

cre

dit grade

, and by cust

omer s

egme

nt. For c

oncen

trati

ons

tha

t are mat

erial a

t a Grou

p level, bre

ache

s and po

tenti

bre

aches a

re moni

tored by t

he res

pecti

ve govern

ance

comm

itte

es and re

por

ted to t

he Gro

up Risk C

ommit

tee

and Boa

rd Risk

Committees.

Credit im

parment

xpe

cted cr

edit lo

sses (ECL) are de

term

ined f

or all ﬁnan

cal

set

s that ar

e clas

sif

ed as a

mort

ise

d cost or fa

ir value

through other comprehensive income

. ECL

is computed as

an unbiased, probabil

y-w

eighted provis

on determined by

eva

luating a ra

of plausible outcomes, the time va

mon

, and fo

ward-loo

king in

form

aton s

uch as cr

itcal

global or c

ount

ry-specifc macroeconomic variables. F

or more

detailed informaton

on macroeconomic data feeding into

IFRS 9 ECL c

alcula

tions

, ple

ase re

fer to th

e Risk pr

oﬁle se

ction

(pa

ges 2

33 to 24

)

At the t

ime of o

rigna

tion or p

urcha

se of a no

n-cred

imp

ared ﬁna

ncal as

set (

age 1), ECL repre

sent ca

shortfalls arisng from

ossible defaul

t ev

ent

s up to

12 months

into t

he f

uture f

rom t

he bala

nce she

et date

. ECL conti

nue to

be de

term

ined o

n this b

asis un

til the

re is a sig

nﬁcant incr

ease

in th

e Credit R

isk of th

e ass

et (

sta

ge 2

), in which ca

se an ECL is

reco

gnis

ed for de

fault eve

nts t

hat ma

y occur ove

r the lif

etme

of th

e ass

et. If t

here i

s obser

d obje

ctve evi

dence o

f credit

imparment or

default (

stage 3

), E

CL continue to be

measured

on a lif

etme b

asis

. T

o p

rovide t

he Boa

rd with ove

rsig

ht and

suranc

e that t

he quali

ty o

f ass

ets o

rign

ated ar

e aligne

d to

the G

roup’

s str

ateg

, the

re is a Risk A

ppet

ite me

tric t

o monit

the s

tage 1 an

d stag

e 2 expe

cted cr

edit lo

sses f

rom as

set

ignate

d in the p

ast 12 mo

nths

In Corp

orate, Commercial and Ins

titutonal Bank

ing Client

Cov

erage, a

loan is

considered

credit

-impa

red where

analysis

and rev

iew indc

ate tha

t full p

aym

ent of ei

ther in

teres

t or

pri

ncpal, i

ncludn

g the t

imelne

ss of su

ch pay

ment

, is

que

stion

able, o

r as soo

n as pa

ymen

t of inter

est or p

rincp

is 90 d

ays overd

ue. The

se cre

dit

-impare

d accou

nts ar

man

aged by o

ur spe

cialst re

cover

y unit (GSAM). Where

appropriate, non-material credit

-impared accounts are

co-m

anage

d with t

he bus

ines

s under t

he sup

vis

on

of GS

AM.

In Co

nsum

, Pr

ivate an

d Busin

ess B

ankin

g, a loa

n is

con

sidere

d cred

imp

ared as s

oon as p

aym

ent of in

teres

t or

pri

ncpal i

s 90 days ove

rdue or m

eet

s oth

er obje

ctve evi

dence

of imp

arme

nt such a

s bank

rup

tcy, debt res

tru

ctur

ing, f

raud

or de

ath. Fin

ancal as

set

s are wr

itte

n-of

f when i

t meet

cer

tain th

resho

ld cond

itons w

hich are s

et at th

e point w

here

empi

rcal evi

dence s

ugge

sts t

hat th

e client i

s unlikel

y to mee

their contrac

tual obligatons, or

a loss of princpal

is expected.

timat

ng the a

mount a

nd timn

g of fu

ture re

coverie

inv

lves

signﬁcant j

udgement and considers the assessment

of ma

tter

s such a

s fut

ure ec

onomi

c condit

ons an

d the valu

of col

later

al, for wh

ich the

re may n

ot be a re

adily a

ccess

ible

mar

ket. Th

e tota

l amoun

t of the G

roup

’s imp

armen

t provis

is inherently uncertain, being sensitve

change

in economic

and cr

edit con

diton

s acros

s the r

egion

s in which t

he Gr

oup

ope

rates

. For f

urt

her det

ails on s

ensi

tvit

y an

alysi

s of exp

ecte

cre

dit los

ses un

der IFRS 9

, pl

eas

e refer t

o the Ris

k proﬁle

ction (p

ages 2

33 to 24

)

Stress testing

Str

ess te

stin

g is a for

ward-l

ook

ing ris

k mana

gemen

t tool t

hat

con

stitu

tes a key inp

ut into t

he iden

tﬁcato

n, moni

torn

and mi

tgat

ion of Cre

dit Ris

k, as we

ll as cont

ribu

tng to Ri

App

etit

e calibra

ton. Per

iodc s

tres

s test

s are pe

rfor

med o

credit portfo

lios

gments to anticpate vulnerabilties from

stres

sed conditons and intiate t

imely right

-sizng and

mitgation pla

s. A

dditonally

, multiple enterprise-wide

and

countr

level stress tests are mandated b

y regulators to

sess t

he abilt

y o

f the Gr

oup and i

ts su

bsidar

ies to co

ntinu

to meet their c

apital requirements during a plausible,

shock to

the business. These regulatory stress tests are

cond

ucte

d in line wi

th the p

rincp

les sta

ted in t

he Ente

rpri

Str

ess T

est

ing Polic

. St

ress t

est

s for key por

tfo

lios are rev

iewed

by the Cr

edit Ri

sk T

ype Framewo

rk O

wner

s (

or del

egate

) as

par

t of po

rtfo

lio over

sight

; and mat

ter

s consi

dered m

ater

ial to

the G

roup a

re escal

ated t

o the G

roup Chi

ef Risk O

fﬁcer an

respective regional

isk c

ommitte

267

Standard Chartered

– Ann

ual Rep

t 2021

sk rev

iew and C

api

tal r

eview

The T

rad

ed Ris

k T

pe Framewo

rk (

TRTF) b

ring

s toget

her all

risk sub-typ

es e

hib

ting risk features common to T

raded Risk.

These risk sub-typ

es i

nclude Market Risk, Counterpart

y Credit

Risk and

Algorithmc T

rading. T

raded Risk Management

(TRM) is the c

ore risk management function supporting

market

-facing busines

ses, spe

cifcally Financal Market

Roles and resp

onsiblite

The T

RTF

, which se

ts t

he role

s and res

pons

iblite

s in resp

ect

of T

rade

d Risk fo

r the G

roup, is ow

ned by th

e Glob

al Hea

raded R

isk Man

agem

ent. T

he bus

ines

s, act

ing as ﬁr

st line o

defence, is

resp

onsible

for the effective management

of risk

wit

hn the s

cope of it

s dir

ect orga

nisat

onal re

spon

siblit

es set

by the B

oard. T

he TRM f

unct

ion is th

e seco

nd-line co

ntrol

function that performs independent challenge,

oni

torng

and ov

sight

of the T

raded

Risk management practices of

the ﬁ

rst lin

e of def

ence. Th

e ﬁrst a

nd sec

ond line

s of def

ence

are supported by

organisaton

str

ucture, job

descriptons

and authorites delegated b

y T

raded R

isk control

owners.

Mitgation

The G

roup c

ontro

ls it

s tradin

g por

tfoli

o and act

ivti

es wit

hn

Risk Appetite b

y asse

ssing the

various T

raded

Risk factors.

These are capt

ured and analyse

d using propriet

ary anal

ytical

too

ls, in a

ddito

n to ris

k manag

ers’ s

pecia

lst mar

ket and

product knowledge.

The G

roup’

s T

rade

d Risk exp

osur

e is align

ed wit

h its Ri

App

etit

e for T

rade

d Risk

, and as

sess

ment o

f pote

ntial lo

sse

tha

t might b

e incur

red by th

e Grou

p as a cons

eque

nce of

extreme but plausi

ble ev

ent

All b

usine

sses i

ncur

rng T

rade

d Risk mu

st be in co

mplian

wit

h the TRTF

. Th

e TRTF requ

ires th

at T

raded Ri

sk limt

s are

deﬁn

ed at a level a

pprop

riate t

o ensu

re that t

he Gro

rem

ains wi

thn T

raded R

isk App

etit

The TR

, and

underlying polices

and standards

ensure that

these T

raded Risk limts are

implemented. All T

aded Risk

exp

osure

s thro

ughou

t the G

roup ag

grega

te up to TR

M’s

Group-level

repor

ting. This

aggregation approach ensures

tha

t the limt

s st

ruct

ure acr

oss th

e Gro

up is con

siste

nt with

the G

roup’

s Ris

k Appe

tite.

The T

RTF and Ente

rpr

ise St

ress T

est

ing Polic

y ens

ure th

adh

erence t

o stre

ss-rela

ted Ris

k Appe

tite me

tric

s is ach

ieved.

Str

ess te

stin

g aims at su

pplem

enti

ng oth

er ris

k metr

ics us

wit

hn the G

roup by pr

ovidng a fo

ward-loo

king v

iew of

pos

iton

s and an as

ses

sment o

f their r

esilen

ce to str

ess

mar

ket condi

tons

. Stre

ss tes

ting i

s perf

orme

d on all G

roup

bus

ines

ses wi

th T

raded R

isk exp

osure

s, eit

her wh

ere th

e risk i

actively traded or

here

mater

ial

isk

remains

This addit

informaton is

sed to

inform the management of the T

raded

Risk t

aken wit

hn the G

roup. Th

e outc

ome of st

ress t

est

s is

discus

sed across the vario

us business line

s and management

level

s so tha

t exist

ng and po

tent

ial ris

ks can b

e reviewe

and related management

actions can be decided upon

where appropriate.

Police

s are revi

ewed and ap

proved by th

e Glob

al Hea

TRM ann

ually t

o ensu

re thei

r ongoi

ng eff

ecti

venes

Gov

ern

ance committe

e o

versight

At Bo

ard level, t

he Boa

rd Risk C

ommit

tee over

see

s the

fect

ive mana

geme

nt of T

raded R

isk

. At the execu

tive leve

the Group Risk Committee delegates

resp

onsib

lites to the

CCIBRC t

o act as th

e prim

y ris

k governa

nce for T

rad

ed Risk

Whe

re T

raded Ri

sk limt

s are se

t at a count

y level, co

mmitt

gover

nan

ce is:

•

Subsidary authorit

y for setting T

raded Risk li

mts, where

applicable

, is delegated from the

local board to the local

risk committee, Countr

Chief Risk Ofﬁcer and

raded Risk

managers.

•

Bran

ch aut

hori

ty f

or set

ting T

rade

d Risk li

mts re

mains

wit

h TRM whic

h retain

s resp

onsi

blit

y for mo

nitor

ng and

reporting ex

cesses.

Decison-making aut

hori

tes and delegation

The G

roup’

s Ris

k Appe

tite St

atem

ent, al

ong wi

th the key

socia

ted Ris

k Appe

tite me

tric

s, is a

pproved by t

he Boa

wit

h resp

onsib

lit

y for T

rade

d Risk limt

, then t

iered

accordingly.

Subject to the

roup

’

s Risk

Appetite for T

raded Risk, the

Group Risk Committee sets Group-lev

el T

raded Risk lim

s, via

delegation to the Group C

hief Risk Ofﬁcer

. The Group Chief

Risk Ofﬁcer delegates

thority for all T

raded Risk li

mt

s to

the T

RTF Own

er (

obal H

ead, TR

M) who in t

urn de

legat

approv

al authorites to indvidual

raded Risk ma

nagers.

Addit

limts are placed on

ecifc instruments

positons,

and portfolio concentrations where appropriate. A

uthor

ites

are rev

iewed at l

east an

nuall

y to ens

ure tha

t they rem

ain

appr

opri

ate and to a

sse

ss th

e qualit

y of d

eciso

ns taken by

the authorised person

. K

ey risk

-taking decis

ons are made

onl

y by cert

ain indv

idual

s with t

he ski

lls, ju

dgem

ent and

per

spe

ctive t

o ensu

re that t

he Gro

’s contro

l stand

ards

and risk

-return objectv

es are met. A

uth

ority delegators are

responsible for monitor

he qua

lit

y of the risk

decisons

taken by t

heir de

legat

es and t

he ongo

ing suit

ablit

y of

their authorit

es.

Market Risk

The G

roup u

ses a V

ue at Risk (

aR) mode

l to mea

sure th

sk of los

ses ar

isng f

rom f

utur

e pote

ntial a

dver

se moveme

nts

in mar

ket rate

s, pr

ices and vo

latilt

ies. V

R is a quan

titat

ve

asure o

f Market Ri

sk tha

t applie

s recen

t histo

rcal ma

rket

cond

iton

s to esti

mate th

e pot

ential f

ure los

s in mar

ket

value t

hat wi

ll not be e

xceede

d in a set t

ime per

iod at a s

statistcal conﬁ

dence level. V

provides a consistent measure

tha

t can be app

lied ac

ross t

rading b

usin

esse

s and pro

duct

over tim

e and can b

e set ag

ainst ac

tual da

ily tra

ding pro

ﬁt

and loss outc

omes.

The Group deﬁnes T

raded Risk as the potential for loss

resulting from activties undertak

en by the Group in

ﬁnancal mar

Risk Appetite Statement

The Group should control

s trading

por

tfolio

and a

ctivt

ies to e

nsure t

hat T

rade

d Risk lo

sses

(ﬁnancal o

r reput

ation

al) do no

t cause m

ater

ial

damage to the

Group

’

s franchise.

raded Risk

268

Standard Chartered

– Ann

ual Rep

t 2021

sk r

evi

Risk management approach

For day-

to-da

isk management, V

aR is calculated as

at the

clo

se of bu

sines

s, gen

erall

y at UK tim

e for exp

ecte

d marke

movem

ent

s over one bu

sines

s day a

nd to a conﬁd

ence leve

of 97

5 pe

r cent. I

ntra-d

ay ri

sk levels m

ay var

y f

rom tho

rep

orte

d at the e

nd of th

e day

The G

roup a

pplies t

wo V

R meth

odolo

gies:

•

Historcal

simulaton: this i

nvolves the re

valuation of al

exi

stng p

osito

ns to reﬂ

ect the e

ffe

ct of his

torcal

obser

ved cha

nges in Mark

et Risk factors on the v

aluation of

the c

urren

t por

tfoli

o. This ap

proach i

s appli

ed for ge

neral

Market R

isk factors and the

ajor

y of specifc (

credi

spread) risk V

aRs

•

Monte Carlo simulaton

: this methodology is simla

r to

historcal

simulaton but with considerably

more input risk

factor observations. These are generated b

y random

sampling

techniques, but the r

esult

s r

etain the essential

variab

lit

y and c

relations of

historcally obser

ved

isk

factor changes. This

approach is applied f

or some of the

specif

c (

credit spre

ad)

risk V

aRs in relation to idosyncratic

exp

osure

s in cred

it market

A one-y

ear historcal observation period is applied

both methods.

As a

n input t

o regul

ator

y ca

pital, t

rading b

ook V

aR i

calcu

late

d for exp

ecte

d movemen

ts over 1

0 busin

ess d

ays

and t

o a conﬁden

ce level of 9

9 per ce

nt. S

ome t

es of Ma

rket

Risk a

re not cap

ture

d in the re

gula

tor

y V

aR m

easu

re, and

the

se Risk

s not i

n V

aR (RNIV

) ar

e subje

ct to capit

al add-o

ns.

An an

alysi

s of V

aR and b

ackte

sting r

esult

s in 2021 is a

vailabl

in th

e Risk pro

ﬁle sect

ion (pa

ges 245 to 248)

Counterparty Cr

edit R

The C

ount

erp

art

y Cre

dit Risk ar

isng f

rom act

ivt

ies in ﬁna

ncal

mar

kets i

s in scop

e of the Ri

sk App

etite s

et by the G

roup f

rade

Risk

The G

roup u

ses a Pot

ential Fu

ture E

osur

e (PFE) mo

del

to me

asur

e the cre

dit exp

osure a

risn

g from t

he pos

itve

mar

-to

-market o

f trade

d prod

uct

s and fu

ture p

oten

tial

movem

ent

s in marke

t rates

, pric

es and vol

atilti

es. PFE is a

qua

ntita

tve mea

sure o

f Count

erp

art

y Cre

dit Risk t

hat app

lies

rec

ent hist

orcal m

arket co

ndito

ns to est

imat

e the po

tenti

ture c

redit ex

posu

re tha

t will no

t be excee

ded in a se

t time

per

iod at a c

onﬁden

ce level of 97

.5 pe

r cent

PFE is cal

culat

ed for ex

pect

ed mar

ket moveme

nts ove

dif

feren

t time h

orizo

ns bas

ed on th

e teno

r of the t

ransa

ction

The G

roup a

pplies t

wo PFE m

etho

dolo

gies: si

mulat

on bas

ed,

whi

ch is pre

domin

antly u

sed, a

nd an add-

on bas

ed PFE

methodology

Under

writn

The u

nder

ritn

g of sec

urit

es and lo

ans is in s

cope of t

he Ris

App

etit

e set by th

e Grou

p for T

rade

d Risk

. Additon

al limt

appr

oved by the G

roup Ch

ief Risk O

fﬁcer a

re set on t

und

itng po

rtf

olio str

ess lo

ss, a

nd the m

axim

um hold

ing

period. The Under

writng Committee,

under the authorit

y of

the G

roup C

hief Ris

k Ofﬁce

, app

roves ind

vidu

al propo

sals t

und

ite new se

curi

ty i

ssue

s and lo

ans for o

ur clien

Monito

rng

TRM mo

nitor

s the ove

rall por

tfo

lio ris

k and ens

ures t

hat it is

wit

hn spe

cif

ed limt

s and t

heref

ore Risk A

ppet

ite. Lim

ts are

ypic

ally rev

iewed t

wice a ye

Most of the T

raded Risk exposures

are monitored daily agai

appr

oved limt

s. T

rade

d Risk lim

ts ap

ply at all t

imes un

less

sep

arate in

tra-d

ay limt

s have b

een se

t. Lim

t excess ap

proval

dec

isons a

re bas

ed on an as

ses

smen

t of the cir

cumst

ances

dri

vng t

he excess a

nd of th

e propo

sed re

media

ton pl

an.

Limt

s and exce

sse

s can onl

y be approve

d by a T

aded Ri

manager with the a

ppropriate delegated authority

TRM re

port

s and m

onito

rs lim

ts app

lied to s

tres

sed

exp

osure

s. St

ress s

cenar

io anal

ysis i

s perf

orme

d on all T

rade

Risk e

xpos

ures in ﬁn

ancal ma

rket

s and in po

rtf

olios o

uts

ide

ﬁnancal market

s such as syndicate

d loans and princpal

ﬁnance

. Stress loss ex

cesses are discussed

with the bus

iness

and ap

proved wh

ere app

ropr

iate, ba

sed o

n dele

gated

authorit

y lev

els

Stress testing

The V

aR a

nd PFE

easurements are complemented by

week

ly st

ress t

estin

g of Mar

ket Risk an

d Coun

terp

art

y Cre

dit

Risk t

o highlgh

t the p

otent

ial ris

k that m

ay ari

se fro

m severe

but plausible mark

et events.

Str

ess te

stin

g is an inte

gral pa

rt of th

e T

aded Ri

management framework

and considers both historc

mar

ket event

s and for

ward-lo

okin

g scenar

ios

. A consi

stent

str

ess te

sting m

etho

dolo

gy is ap

plied t

o tradin

g and no

trading

ooks. The str

testing methodology

sumes

that

scope for management

action would be lim

ted during a

str

ess even

t, reﬂe

cting t

he de

creas

e in mar

ket liqudit

y t

hat

often occurs.

Regu

lar stre

ss te

st scen

arios a

re appli

ed to int

erest r

ates

cre

dit spre

ads

, exchang

e rates

, commo

dit

y pri

ces and e

quit

pri

ces. T

his cover

s all as

set cla

sse

s in the Finan

cal Mar

kets

and T

rea

sur

y bo

s. Ad hoc s

cenar

ios are al

so pre

pared

reﬂecting sp

ecifc mar

ket c

onditons an

d for particular

conc

entra

tions o

f risk t

hat ar

ise wi

thn the b

usin

ess

Str

ess s

cenar

ios are re

gular

ly up

date

d to reﬂe

ct chang

es in

sk proﬁle a

nd econ

omic even

. The TRM f

unct

ion rev

iews

stress testing

results and, where necessary

, enforces

reductions in o

verall T

raded Risk exposures. The Group Risk

Com

mitte

e cons

ider

s the re

sult

s of str

ess te

s as par

t of it

super

vison of

Risk Appetite.

Whe

re requ

ired, G

roup a

nd busi

ness-w

ide str

ess te

sting w

ill

be su

pplem

ente

d by entit

y st

res

s testi

ng at a cou

ntr

y level

Thi

s stres

s test

ing is co

ordin

ated at t

he coun

y level a

subj

ect to t

he relevan

t local g

overnan

ce.

269

Standard

Chartered

– Ann

ual Rep

t 2021

sk rev

iew and C

api

tal r

eview

Roles and resp

onsiblite

The Global Head, Enterprise Risk Management

is responsible

for t

he Risk T

e Framewor

k for T

reas

y Risk

The G

roup T

asure

r is supp

ort

ed by tea

ms in T

reas

y and

Financ

e to impl

ement t

he T

reas

y Risk T

e Framewor

k as

the ﬁ

rst lin

e of def

ence, an

d is resp

onsi

ble for m

anagi

asury Risk.

From 2022

, the s

econ

d line of de

fence r

espo

nsibli

ty f

Pension risk

sub-ty

pe wil

l move from T

raded Risk to

asury

Risk

, and t

he ris

k will be g

overne

d unde

r the T

rea

sur

y Ris

ype Fram

ework

Mitgation

The G

roup d

evelop

s police

s to addr

ess ma

teri

al T

easu

Risk

s and ai

ms to mai

ntan it

s ris

k proﬁle w

ithn Ri

sk Appe

tite.

In ord

er to do t

his, m

etri

cs are s

et again

st Capi

tal Ris

Liqu

dit

y and Fun

ding Ris

k and Inte

rest Rat

e Risk in th

Ban

king B

ook (IRRB

). Where ap

propr

iate, R

isk App

etit

met

ric

s are casc

aded d

own to re

gions an

d count

ries i

n the

form of lim

t

s and

management action triggers.

Capital Risk

In ord

er to man

age Ca

pital Ri

sk, st

rate

gic bus

ines

s and capit

plan

s are dra

wn up cover

ing a ﬁve-ye

ar hor

izon and ar

appr

oved by the B

oard ann

ually. The capit

al plan e

nsure

s that

adequate lev

els of ca

pital, inc

ludng loss

-absor

bing

capacit

and an efﬁc

ent mix of the different components of capital

are ma

intane

d to sup

por

t our str

ateg

y and bu

sines

s plan

asury is responsible for the ongoing

sessment of

the d

eman

d for capit

al and th

e upda

ting of t

he Gro

’s

capital plan.

Risk A

ppet

ite me

tric

s inclu

dng capi

tal, lever

age, min

mum

req

uirem

ent for ow

n fun

ds and el

igble li

ablit

y (MREL) and

double lev

erage are assessed withn the Corporate Plan

to en

sure th

at our b

usine

ss pla

n can be ach

ieved wit

hn

risk tolerances.

Structural FX R

The G

roup’

s str

uct

ural po

siton r

esult

s fr

om the G

roup

’s

non-

US doll

ar investm

ent in th

e share ca

pital an

d reser

s of

subsid

aries and branc

hes. The FX tr

anslation

gains, or losses

are re

corde

d in the G

roup

’s tran

slat

ion res

ves wit

h a direc

imp

act on th

e Grou

’

s C

ommo

n Equit

y T

ier 1 ratio.

The Group contracts hedges to manage

s structural FX

pos

iton in a

ccorda

nce wit

h the Bo

ard-app

roved Ris

App

etit

e, and as a re

sult t

he Gro

up has t

aken net inves

tment

hed

ges to p

art

ially cover it

s ex

posur

e to cer

tain no

n-US doll

cur

rencie

s to mitg

ate th

e FX imp

act of su

ch posi

tons o

n its

capital ratios.

Liqudity and Funding Risk

At Gro

up, regi

on and cou

ntr

y leve

l we imple

ment var

ious

business-as

-usual and

stress risk metrics and mon

itor these

against lim

t

s a

nd management action

iggers. This ensures

tha

t the G

roup ma

intans a

n adeq

uate an

d well-di

versﬁe

liqu

dit

y buf

fer, as well as a st

able f

undin

g bas

e, and th

at it

meet

s liqu

dit

y and

unding regulatory requirements

The

appr

oach to m

anagi

ng ris

ks and t

he Bo

ard Risk A

ppet

ite are

sess

ed ann

ually t

hroug

h the Int

ernal L

iqudit

y Ad

equa

ses

smen

t Proces

s. A f

undin

g plan is al

so devel

oped f

ﬁcent liq

udit

y proje

cton

s to ensu

re tha

t the Gr

oup is

adequately funded in the required currenci

s, to

et i

obligaton

s and client funding ne

eds.

Inter

est Rate Ris

k in the Ba

nking Book

Thi

s risk ar

ise

s from di

ffer

ences i

n the rep

ricng p

roﬁle, in

teres

rate b

asis

, and op

tion

alt

y of bank

ing bo

ok as

set

s, lia

blites

and o

-ba

lance sh

eet it

ems. I

RRBB rep

rese

nts an e

cono

mic

and co

mmerci

al ris

k to the G

roup an

d its c

apital ad

equa

The G

roup m

onito

rs IRRB

B again

st the B

oard Ri

sk App

etite

reasur

y Risk is formed of Capital and Liqu

dit

y Risk,

and Interest R

ate Risk in the Banking Book. C

ital Risk

is the potential for an insuff

c

ient level, c

ompositon or

distrbution of ca

pital, own funds and eligble l

iablit

to support our normal activties. Liqudity Risk is the risk

that we may not have sufﬁc

ently stable or diverse

sources of funding to meet our obligatons as the

fall due

. Interest R

ate Risk in the Banking Book is the

potential for a reduction i

n earnings or economic v

alue

due to mov

ement

s in interest r

ates on banking bo

asset

s, liab

lites and off

ala

nce sheet items

Risk Appetite Statement

The G

roup s

houl

d maint

an a stron

g capita

positon

includng the

maintenance of

management buffer

s sufﬁc

ent to support it

str

ategi

c aims and h

old an ad

equa

te buf

fer o

high q

ualit

y liq

ud ass

ets t

o sur

ve extre

me but

plausible liqu

dit

y stress scenarios f

or at least

60 da

ys wit

hout r

ecour

se to e

xtrao

rdinar

central bank support.

reasur

y R

isk

Standard

hartered

– An

nual Re

por

t 2021

sk r

evi

Risk management approach

Recov

y and Res

olution Plannin

In lin

e with PR

A req

uirem

ent

s, the G

roup m

aintan

s a Recover

Plan w

hich is a li

ve docum

ent to b

e used by m

anage

ment in

the eve

nt of str

ess in o

rder to r

estor

e the G

roup to a s

table

and su

stain

able p

osito

n. The Re

cover

y Plan inc

lude

s a set of

recove

y indcat

ors

, an esca

latio

n fram

ework an

d a set of

management actions c

apable of bei

ng implemented in

str

ess

. A Recover

y Plan i

s also ma

intane

d with

n each ma

jor

ent

, and all r

ecover

y pl

ans are su

bject t

o peri

odc ﬁre-

drill testin

As t

he UK re

solu

tion au

thor

, the B

ank of En

gland (B

oE) i

req

uired t

o set a pre

ferr

ed res

olut

ion str

ateg

y for the G

roup.

The B

oE’s prefe

rred r

esol

ution s

trate

gy is w

hole G

roup si

ngle

poi

nt of ent

y bail-in at t

he ult

imate h

olding c

ompany leve

(Stand

ard Char

tere

d PL

C) an

d would b

e led by th

e BoE as

the Group

’

s home resolution authorit

. In

suppor

t of

this

str

ateg

, the G

roup h

as bee

n develop

ing a se

t of capab

ilties

arr

angem

ent

s and res

ource

s to achieve t

he req

uired

out

comes

. The G

roup e

xpec

ts to di

sclo

se a summ

y of it

prep

arati

ons in 202

2, alo

ngsid

e a publi

c state

ment f

rom th

BoE o

n the re

solva

bilt

y of eac

h in-scop

e ﬁrm

Gov

ern

ance committe

e o

versight

At the B

oard l

evel, the B

oard Ri

sk Com

mitte

e overs

ees th

fect

ive mana

geme

nt of T

reas

y Risk

. At the exe

cuti

ve level,

the G

roup A

et and Li

ablit

y Com

mitte

e ensu

res th

e eff

ecti

man

ageme

nt of ri

sk thro

ugho

ut the G

roup in s

uppo

rt of t

Gro

’s strate

, g

uides t

he Gro

’s strate

gy on b

alance s

heet

opt

imsat

ion and e

nsure

s that t

he Gro

up ope

rates w

ithn t

intern

ally approved Risk Appetite and ot

her internal and

external treasur

y requirements.

Regio

nal and co

untr

y ove

rsigh

t resid

es wit

h regio

nal and

coun

y As

set an

d Liabli

ty C

ommit

tee

s. Regio

ns and

coun

trie

s must e

nsure t

hat th

ey remain i

n compli

ance wit

Gro

up T

reas

y poli

ces and p

ractice

s, as we

ll as loc

regulator

y requirements.

Decison-making aut

hori

tes and delegation

The Gro

up Chief F

ancal Ofﬁcer has respo

nsiblity fo

r capital,

fun

ding and liqudity un

der the Senior Mana

gers Regime.

The Group Chief

Risk Ofﬁcer has delegated the Risk

Framewo

rk Ow

ner re

spon

siblit

es ass

ociat

ed wit

h T

easu

Risk to the

lobal Head, E

nter

prise Risk

Management

The Global Head, Enterprise Risk Management

delegates

second-line overs

ight and challenge respo

nsiblites to

relevant and suitably qu

alifed T

reasur

y Chief Risk Of

ﬁcer

and C

ount

y Chief Ri

sk Ofﬁc

ers

Monito

rng

On a day-

to-da

asis, the management

of T

reasur

y R

isk is

per

for

med by th

e Grou

p T

easu

rer

, C

ount

y Chief E

xecu

tive

ﬁcer and T

asur

y M

arket

s. Th

e Grou

p regu

larly r

epor

and m

onitor

s T

reas

y Risk i

nhere

nt in it

s busin

ess ac

tivt

ies

and t

hose t

hat ari

se fr

om inter

nal an

d exter

nal event

Inte

rnal r

isk ma

nagem

ent rep

ort

s cover

ing the b

alanc

e shee

and t

he capit

al and liq

udit

y pos

iton are p

rese

nted to t

rel

evant As

set and L

iablit

y C

ommit

tee. Th

e repo

s contai

y informaton on balance

eet trends, exposures

against

Risk Appetite and

supp

orting risk measures whi

ch enable

mem

ber

s to make inf

orme

d deci

sons aro

und th

e overall

management of the bala

nce sheet

In add

iton

, an indep

ende

nt T

reasu

y Chief Ri

sk Ofﬁ

cer as

par

t of Ent

erpr

ise Ris

k Mana

gemen

t review

s the pr

uden

and effectiveness of T

reasury Risk management.

Stress testing

Stres

s testing and scenar

io analysis are an integral par

t of

the T

asur

y Ri

sk Framewor

k and are u

sed to e

nsur

e that th

Gro

’s inter

nal as

sess

ment o

f capital a

nd liqud

y consid

ers

the impact of

extreme but plausible scenarios on

s risk

proﬁl

e. A numb

er of st

ress s

cenar

ios, s

ome de

signe

d inter

nally,

some required b

y regulator

s, are

un period

cally

They p

rovide a

n insght i

nto the p

oten

tial imp

act of si

gnﬁcant

adve

rse eve

nts o

n the G

roup

’s capita

l and liqu

dit

y posi

ton

and h

ow this co

uld be mi

tgate

d thro

ugh app

ropri

ate

man

ageme

nt acti

ons to e

nsure t

hat th

e Grou

p remain

wit

hn the ap

proved Ris

k Appe

tite an

d regu

lator

y l

imts

Dail

y liqudi

y stres

s scen

arios a

re also r

un to en

sure t

hat th

Gro

up hol

ds suf

ﬁcent hi

gh-qua

lit

y liqud a

sset

s to w

ithst

and

extr

eme liq

udit

y event

s. Th

e Gro

up relie

s on the

se stre

tes

ts to u

nder

stan

d the G

roup leve

l vuln

erabilt

ies give

n the

signﬁc

ant overl

ap bet

wee

n the G

roup and PLC Gro

’

asury Risk.

271

Standard Chartered

– Annu

al Repo

rt 202

sk rev

iew and C

api

tal r

eview

Roles and resp

onsiblite

The O

pera

tiona

l and T

echno

logy R

isk T

ype Fram

ework

(

T RTF

) set

s the r

oles an

d resp

onsib

lites in r

espe

ct of

eratio

nal Ris

k for th

e Grou

p, and is own

ed by the G

loba

Head of Risk, Func

ions

and Operational Risk (

GHRFOR

)

. This

framework col

lectively deﬁnes

Group

’

s Operational Risk

sub

-t

ypes w

hich ha

ve not be

en cla

ssif

ed a

s Princp

al Risk

ypes (PRT

) and s

ets s

tandar

ds for t

he iden

tﬁcaton

control, monitor

and treatment of risks

hese sta

ndards

are ap

plicabl

e acros

s all PRT

s and ris

k sub-t

es in th

e O&

RTF

. Thes

e ris

k sub-t

es rel

ate to exec

ution c

apabilt

governance, rep

orting and obligat

ons, legal enfo

rceabilty

and opera

iona

l resilenc

e (

includ

ng client service, change

management, people management, safet

y and

curity

and t

echno

logy r

isk)

The O&T R

F reinfo

rces cle

ar acco

untabi

lt

y for man

aging r

isk

thr

ougho

ut the G

roup a

nd dele

gate

s seco

nd line of d

efen

responsiblites to

identﬁed subject matter expert

s. For

ach

sk sub-t

pe, th

e exper

t set

s po

lices an

d stand

ards for t

organisaton

to comply with, and pro

ides

guidance,

oversight

and ch

allen

ge over the a

ctiv

ties of t

he Gr

oup. They e

nsur

tha

t key risk de

cison

s are onl

y taken by ind

vidu

als wit

h the

req

uiste s

kills

, judg

ement

, and p

ers

pecti

ve to ens

ure th

at the

Gro

’s risk-retur

n obje

ctves ar

e met

Mitgation

The O&T R

F set

s out th

e Gro

’

s ove

rall appr

oach to t

man

ageme

nt of Op

erati

onal Ri

sk in line w

ith th

e Grou

’

eratio

nal and T

ech

nolo

gy Risk A

ppet

ite. Th

is is sup

por

ted

by Risk a

nd Cont

rol Se

-Ass

essm

ent (RCSA) whi

ch deﬁne

roles and responsiblit

he ident

ﬁcaton, control and

monitorng of

isks (

applicable to al

l PRT

s and risk sub-types

The RC

SA is us

ed to de

term

ine th

e design s

treng

th and

reli

ablit

y of ea

ch proc

ess

, and req

uires:

•

the r

ecordi

ng of pro

cess

es ru

n by client s

egme

nts

, prod

uct

and f

unct

ions in

to a proc

ess un

iver

•

the i

dentﬁca

ton of p

otent

ial bre

akdown

s to thes

pro

cess

es and th

e relat

ed ri

sks o

f such bre

akdown

•

an as

ses

sment o

f the imp

act of t

he iden

tﬁed ri

sks b

ase

on a consistent scale

•

the design a

nd monitorng of

controls to mitgate

priortised risks

•

assessment

s of r

esidual risk and

timel

actions for

elevated

isks.

Risk

s tha

t exceed t

he Gro

’s Opera

tiona

l and T

echno

logy

Risk Appetite require

treatment plans to address

underlying causes.

Gov

ern

ance committe

e o

versight

At Bo

ard level, t

he Boa

rd Risk C

ommit

tee over

see

s the

fect

ive mana

geme

nt of Op

eratio

nal Ris

k. At th

e execut

ive

level,

the Group Risk Committee is responsible for

gover

nance an

d overs

ight of O

perat

ional Ri

sk for t

he Gro

up,

monitors the Group

’

s Operational and T

echnology Risk

App

etit

e and reli

es on ot

her key Gro

up comm

ittee

s for th

management of Operational

Risk

, i

n particular the Group

Non-Financal Risk Commit

tee (

GNFRC)

Regio

nal busi

ness segments and functio

nal co

mmittees also

provide enterprise ov

ersight of their respective processes and

related operational risks. In addi

ton, Countr

y Non

-Financal

Risk C

ommi

ttee

s (

CNFRC

) overse

e the m

anage

ment of

eratio

nal Ris

k at the co

untr

y (

or e

ntit

) leve

l. In smal

ler

coun

trie

s, th

e resp

onsib

lites o

f the CNFRC m

ay be exer

cised

dire

ctly by th

e Cou

ntr

y Ris

k Commi

ttee (for b

ranch

) or

ecut

ive

Risk Committee (for subsid

ies

Decison-making aut

hori

tes and delegation

The O&T R

F is the fo

rmal m

echa

nism th

rough w

hich th

delegation of Operational

Risk authorites is made. The

GHRFOR places rel

iance on the respective Senior

Manager

who a

re out

side t

he Ris

k fun

ction fo

r seco

nd-line over

sigh

of th

e risk s

ub-t

es thro

ugh th

is fram

ework

. The S

enior

Managers may fur

ther delegate

eir

second-line

responsib

lites to desi

gnated indviduals

at a global

business,

pro

duct and f

unc

tion leve

l, as well a

s regio

nal or co

untr

y leve

Monito

rng

o delive

r ser

ces to cli

ent

s and to pa

rticp

ate in th

e ﬁnanca

ser

ices s

ector, the G

roup r

uns pr

oces

ses wh

ich are exp

ose

to operational risks. The Group priortises and

manages risk

whi

ch are signﬁc

ant to clie

nts a

nd to th

e ﬁnancal s

vic

sectors. Control indcators are

regular

ly moni

tore

det

ermin

e the re

sidua

l risk t

he Gro

up is ex

pose

d to.

The r

esidu

al ris

k asse

ssm

ent

s and rep

ort

ing of event

s for

the Group

’

s Operational Risk pro

ﬁle. The completeness of the

Operational Risk proﬁle

sures a

ppropr

iate

priortisaton and

timelness of risk

cis

ons

, i

ncludng risk acceptances

ith

treatment plans for risks that e

xceed acc

eptable thresholds.

The B

oard i

s infor

med on a

dhere

nce to Op

erat

ional an

echno

logy R

isk App

etit

e throu

gh met

rics r

epor

ted f

selected risks. These metric

s a

re monitored, and escalation

thr

eshol

ds are dev

ise

d base

d on th

e mater

ialt

y and

sign

ﬁcance of

the risk. These Operational

and T

chno

logy

Risk A

ppet

ite me

tric

s are con

solid

ated o

n a regul

ar bas

is and

rep

orte

d at rel

evant Gro

up comm

ittee

s. Thi

s provid

es sen

ior

management with the releva

nt informaton to inform their

risk decisons.

Stress testing

and scenario ana

lysis are used to

ass

ess c

apital

requirements for operational risks. This appr

oach considers

the i

mpact o

f extrem

e but pl

ausib

le scen

ario

s on the G

roup

’s

eratio

nal Ris

k proﬁle. A n

umbe

r of scen

arios h

ave be

ide

ntﬁed to t

est th

e robus

tnes

s of the G

rou

’

s pr

oces

ses and

sess t

he po

tenti

al impa

ct on the G

roup. T

hese s

cenar

ios

include anti

-money laundering and sanc

ions, as w

ell as

informaton and cyber securit

The Group deﬁnes Operational and T

echnology Risk

as the potential for loss resulting from inadequate or

failed internal process

es, technolog

y ev

ent

s, human

error or from the impact of external e

vents (i

ncludng

legal risks

)

Risk Appetite Statement

The G

roup a

ims to co

ntrol o

perat

ional a

tec

hnolo

gy ri

sks t

o ensu

re that o

perat

ional l

osse

(

ﬁnancal

or reputational)

, inc

ludng

any rela

ted to

cond

uct of b

usine

ss mat

ter

s, do no

t caus

e mater

ial

damage to the

Group

’

s franchise.

Operationa

l and T

echnology R

isk

272

Standard Chartered

– Annu

al Rep

ort 202

sk r

evi

Risk management approach

Roles and resp

onsiblite

The G

roup’

s Info

rmat

ion and Cyb

er Secu

rit

y Ris

k T

Framewo

rk (IC

S R

) deﬁne

s the rol

es and re

spon

siblit

es

of th

e ﬁrst a

nd seco

nd line

s of def

ence in ma

nagin

g and

gover

ning IC

S Risk r

espe

ctivel

y acros

s the G

roup w

ith

emphasis on

business ownership a

nd ind

vidual

account

abilty

The G

roup C

hief Op

erati

ng Of

ﬁcer has ove

rall ﬁrs

t line of

defence responsibl

y for ICS Risk

and holds acc

ountabil

y f

the G

roup’

s IC

S strat

egy. The Gro

up Chie

f Infor

matio

n Secu

rit

ﬁcer (

) lea

ds the d

evelopm

ent an

d executi

on of th

ICS strate

The G

roup C

hief Inf

orma

tion S

ecur

y Risk Of

ﬁcer (

SRO

)

nctio

n withn G

roup R

isk

, led by th

e Grou

p CISRO, oper

ates

as th

e seco

nd line o

f defen

ce and se

ts t

he stra

tegy a

met

hodo

log

y for as

sess

ing, s

corin

g and pr

iort

isng IC

S ris

acro

ss th

e Grou

p. This f

unct

ion has ove

rall resp

ons

iblit

y for

governance,

oversight and independent challenge of ICS Risk.

Mitgation

S Risk is m

anage

d thro

ugh a str

uct

ured I

CS Ris

k frame

work

comprisng a

isk

assessment methodolo

gy a

supp

orting

polic

, standards and met

hodologie

s which are aligned to

industr

y best prac

tice models.

In 2021, t

he IC

S R

F was exte

nded t

o inclu

de ICS e

nd-to-

end

Risk Manag

ement and Governance and an enh

anced

threat

led risk assessment

The Group CISRO

unction moni

tor

s compl

iance to

ICS

amewor

k throu

gh the rev

iew of th

e ICS r

isk as

ses

smen

cond

ucte

d by Grou

p CISO.

All key IC

S ris

ks, b

reac

hes and r

isk tr

eatm

ent pla

ns are

man

aged u

nder G

roup CI

SRO overs

ight and a

ssur

ance. IC

Risk p

ost

ure, Ris

k Appe

tite br

eache

s and rem

ediat

on sta

tus

are re

por

ted at key Gr

oup, bus

ines

s, f

uncti

onal and c

ountr

governance c

mmittees.

Gov

ern

ance committe

e o

versight

At Bo

ard level, t

he Boa

rd Risk C

ommit

tee over

see

s the

effective management of ICS Risk. The Group

Risk Committee

(

GRC) has

delegated authorit

y to

the Group Non-F

inancal

Risk Committee (

GNFRC)

to ensure effective implementaton

of th

e ICS RTF

. Th

e GRC and G

NFRC are re

spon

sible f

over

sight of I

CS Ris

k post

ure and R

isk App

etit

e brea

ches ra

ted

ver

y hig

h and high

. Sub-

commit

tees o

f the G

NFRC have

over

sight of I

CS Ris

k mana

gemen

t arisn

g from b

usine

ss,

country and functiona

l areas.

At a man

ageme

nt level, t

he Gro

up has a

lso cre

ated t

he C

ber

curit

y Ad

viso

y Foru

m, chai

red by the G

rou

p Chief E

xecut

ive

ﬁcer

, a

s a way of en

sur

ing the M

anage

ment T

eam

, the

Group Ch

airman and several non-executive directo

rs are well

info

rme

d on IC

S Risk

, and to in

creas

e busin

ess u

nder

stan

ding

and a

warene

ss so th

at bus

ines

s prior

ties d

rive th

e secu

rit

and c

ybe

r resile

nce age

nda.

Decison-making aut

hori

tes and delegation

The I

CS RTF deﬁ

nes how IC

S Risk M

anag

ement w

ill ope

rate

wit

hn the G

roup. T

he Gro

up CISRO d

eleg

ates au

thor

y to

designated

indviduals throug

h the ICS R

, i

ncludng

cond-lin

e owner

ship at a b

usin

ess and f

ction leve

l as

well a

s region

al or cou

ntr

y leve

l The IC

S RTF deﬁne

s the leve

of app

roval req

uired fo

r diff

erent r

isk rat

ings

The Group CISO is

resp

onsible

for implementng and

ope

ratin

g ICS S

ecur

y Risk Ma

nagem

ent wi

thn the G

roup,

levera

ging Bu

sine

ss Hea

ds of IC

S to ext

end IC

S risk

management

into the

businesses, f

unc

ions,

countries and

Info

rmat

ion A

sset a

nd System ow

ner

s to comp

ly wit

h the

S RTF

, polic

y and st

andard

Monito

rng

The r

isk as

ses

smen

t is per

form

ed by Gr

oup CIS

O to iden

tf

key ICS r

isk

s, br

eache

s and wea

knes

ses

, and to as

cert

ain the

sever

y of the R

isk po

sture

The R

isk po

sture

s of all bu

sines

ses

, fun

ction

s and cou

ntri

es are

consolidated to present

a holistc Group-lev

el IC

Risk posture

for ongoing ICS Risk

monitorng.

ring t

hese rev

iews

, the st

atus o

f each r

isk is as

ses

sed t

ide

ntf

y any cha

nges to m

ater

ialt

, imp

act and li

kelhoo

whi

ch in tur

n aff

ect

s the overal

l ICS Ri

sk scor

e and rati

ng.

Risk

s whi

ch exceed d

eﬁned t

hresh

olds a

re reviewe

d with

Gro

up CIS

RO for appr

oval and esc

alate

d to appro

priat

Group governance commi

tees.

Mon

itorn

g and rep

ort

ing on t

he ICS R

isk App

etit

e proﬁle

ens

ures t

hat per

for

mance w

hich fall

s out

side t

he appr

oved

Risk A

ppet

ite is hi

ghlght

ed and rev

iewed at t

he appr

opria

gover

nance co

mmitt

ee or au

thor

y levels a

nd ensu

res th

adequate remediaton

actions are in place

here

cessary

Stress testing

The G

roup’

s cy

ber re

silen

ce test

ing app

roach en

tails:

•

The Group CISRO

is responsible for risk based, intell

gence

led

, scena

rio dr

iven as

ses

sment

s th

at simul

ate th

e actio

of real-

world cyb

adversaries targeting the orga

nisaton.

Thi

s layere

d test

ing app

roach i

s used t

o validat

e the

fect

ivenes

s of th

e meas

ures t

aken to preven

t, de

tect an

res

pond t

o cyb

er thr

eat

s targe

ting ou

r crit

cal busi

ness

•

Group CISO is responsible

for support

ing

control

impr

ovement an

d risk r

educ

tion by em

ulatin

g cy

ber at

tack

to en

hance t

he Gro

’

s c

er defe

nce cap

abiltie

The Group deﬁnes Information and C

yber Securit

Risk as the risk to the Group

’

s asset

s, operations and

indviduals due to the potential for u

nauthorised

access, use, disclosure, d

isr

upton, modifcation,

or destruction of informaton assets and/

informaton system

Risk Appetite Statement

The G

roup s

eek

s to minm

ise IC

S ris

k from t

hreat

to th

e Grou

’

s m

ost cr

itcal inf

orm

aton as

set

s and

stem

s, and h

as a low app

etite f

or mat

erial

incd

ent

s affe

cting t

hes

e or the w

ider op

erati

ons

and re

puta

tion of t

he Gr

oup.

Information and Cy

er Securi

y (ICS) R

273

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Roles and resp

onsiblite

The Gro

up Head, Condu

ct, Financal Crime and Compliance

(

roup He

ad, CFCC) a

s Risk Frame

work O

wner f

Compliance Risk

provides support to senior ma

nagement

on regulator

and compli

ance matters by:

•

provid

ng interpretaton and advice on

CFCC regulatory

req

uirem

ent

s and the

ir impa

ct on the G

roup

•

setting enterprise-wide standards for management

of complia

isks through

the establishment a

maintenan

ce of the Compliance Risk T

ype Framework

(

Complian

ce R

)

•

setting a progra

mme for monitor

omplia

Risk

The C

ompli

ance RTF se

ts ou

t the G

roup

’s overall ap

proac

to th

e mana

gemen

t of Com

plianc

e Risk and t

he role

s and

responsiblites

in respect of Compliance

Risk for the Group.

All ac

tivt

ies th

at the G

roup e

ngage

s in must b

e desi

gned

to comply with

he a

pplicable laws and regulations i

n the

coun

trie

s in whic

h we opera

te. The C

FCC fun

ction is t

cond lin

e that pr

ovides ove

rsig

ht and cha

lleng

e of

the ﬁrst

line risk management

activties that relate to

Complian

ce Risk.

Where Compliance

Risk arises, or could arise, from fa

ilure

to ma

nage an

othe

r Princp

al Risk T

e or sub-t

pe, th

Com

plian

ce RTF outli

nes th

at the re

spon

siblit

y re

s with th

respective Risk

Frame

work Ow

ner or

control function to ensure

tha

t eff

ecti

ve oversig

ht and ch

alleng

e of the ﬁr

st lin

e can be

prov

ided by th

e appro

priat

e seco

nd-line f

unct

ion.

Each of t

he as

signe

d secon

d-line f

unct

ions ha

s resp

onsi

blites

includng

onitor

ng relevant regulatory developments from

Non-F

inancal Ser

vices regulators at

oth Group a

nd countr

levels, policy development, implementaton, and

validaton

as wel

l as overs

ight and c

hallen

ge of ﬁr

-line pr

oces

ses

and co

ntrols.

In add

iton

, the Co

mplian

ce RTF has b

een sim

plﬁed in 2021

via rationalsation of the Compliance Risk t

ypes

Mitgation

The C

FCC fun

ction d

evelops an

d depl

oys relevan

t police

and st

andar

ds set

ting o

ut requ

ireme

nts an

d contr

ols fo

adh

erence by t

he Gro

up to en

sure co

ntinu

ed comp

liance w

ith

applicable

law

and regulations. Through a

combinaton of

standard setting, risk assessment, control monitorng

and

suranc

e activ

ties

, the C

ompli

ance Ris

k F

ramewo

rk O

wner

eks to e

nsur

e that all p

olice

s are ope

rating a

s expe

cted

to mit

gate t

he ris

k that t

hey cover

. The i

nstall

aton o

appr

opri

ate pro

cess

es and con

trol

s is the pr

imar

y t

ool fo

r the

mitgation of

Compliance Risk. In this, the requi

rements of

the O

pera

tiona

l and T

echno

logy R

isk T

ype Fram

ework ar

followed to

sure

a consistent approach to the management

of processes and controls. Deployment of technological

sol

utio

ns to imp

rove efﬁce

ncies an

d simplf

y p

roces

ses

has conti

nue

in 20

21. These include further expansi

of dig

tal chatbots.

Gov

ern

ance committe

e o

versight

At a

management level, Complia

Risk and the risk of

non-complianc

e with laws and

regulations resulting from

fail

ed pro

cess

es and con

trol

s are overs

een by th

e resp

ecti

Countr

, Busi

nes

s, P

roduct and F

unction Non-F

inanca

l Risk

Committees inc

ludng the Ri

sk and

CFCC Non

-Fi

nancal R

isk

Com

mitte

e for CFCC ow

ned pr

oces

ses. Re

levant mat

ter

s, as

req

uired

, are fu

rth

er escal

ated t

o the G

roup No

n-Financa

Risk Committee and

roup R

isk Committee.

At Bo

ard level, over

sigh

t of Com

plianc

e Risk is pr

imar

ly

prov

ided by th

e Audit Co

mmitt

ee, and a

lso by th

e Board

Risk Committee for

releva

nt issues

While not a

form

committee, the Compliance R

isk

Framewo

rk Ow

ner ha

s also e

stabli

shed a C

FCC Over

sight

Gro

up to pr

ovide over

sight o

f CFCC ris

ks inc

ludng t

effective implementaton of the Compliance

RTF

Decison-making aut

hori

tes and delegation

The C

ompli

ance Ris

k T

pe Framewo

rk is t

he for

mal

mechanism through whi

ch the delegation

of Compliance

Risk

aut

hori

tes is m

ade. Th

e Grou

p Head

, CFCC has t

he aut

hori

to delegate second-

line responsiblites

ith

n the CFCC

fun

ction to relevant and suitably qualif

ed indvid

uals.

Monito

rng

The monitorng of

controls designed to mit

gate the risk of

regulator

y non-c

ompliance in processes is

governed in

line

wit

h the Op

erat

ional an

d T

chnol

ogy Ri

sk T

ype Frame

work

The G

roup h

as a mon

itorn

g and rep

ort

ing pro

cess i

n place fo

Compliance Risk, whic

h includes esca

lation and r

orting to

Risk and

CFCC

Non-Financ

al Risk Committee, Group Non-

Financ

al Risk Committee, Group R

isk Committee, Board Risk

Committee and Audit

ommittee, as a

ppropr

iate.

Stress testing

and scenario ana

lysis are used to

ass

ess c

apital

req

uirem

ent

s for Com

plian

ce Risk an

d form p

art of t

he overall

scenar

io analysis por

tfolio manage

d under the Operat

ional

and T

ech

nolo

gy Risk T

e Framewor

k. Sp

ecif

c sce

nari

os are

devel

oped an

nuall

y with co

llabo

ratio

n bet

ween t

he bu

sines

whi

ch owns an

d manag

es the r

isk

, and th

e CFCC fu

nctio

which is seco

nd line to incorporate signﬁcant Comp

liance Risk

tail eve

nts

. This ap

proa

ch consi

der

s the imp

act of ext

reme b

plausible scenarios on

the Group

’s

omplia

Risk proﬁle.

The Group deﬁnes Compliance R

isk as th

e potential f

penalties or loss to the Group or for an adverse impact

to our clients, stakeholders or to the integrty of t

markets which we opera

te in through a fai

lure on our

part to comply with laws or regulations.

Risk Appetite Statement

The G

roup h

as no ap

petit

e for br

eache

s in law

and regulations related

to regulator

non-

compliance; recognisng t

hat whilst incdent

s are

unwant

ed, th

ey cannot b

e enti

rely a

voided

Compliance Risk

Standard Chartered

– An

nual Re

por

t 2021

sk r

evi

Risk management approach

The Group deﬁnes F

inanc

al Crime Ri

sk as the potential

for legal or regulator

y penalties, material ﬁna

al loss

or reputational damage resu

lting from the failure to

comply with appli

cable laws and regulations rela

ing

to internatonal sa

nctions

, anti

-money laundering,

anti

-briber

y and corr

uption, and fraud.

Risk Appetite Statement

The G

roup h

as no ap

petit

e for br

eache

s in law

and regulations related

to ﬁnanc

al crime,

reco

gnisn

g that w

hile inc

dent

s are unwant

ed,

they c

annot b

e entir

ely avo

ided.

Financ

al Crime Ris

Roles and resp

onsiblite

The G

roup H

ead, C

FCC has overal

l respo

nsibl

y for Finan

cal

Crime Risk a

is responsible for the establishment

and

main

tenan

ce of ef

fect

ive sy

stems a

nd cont

rols to m

eet le

gal

and regulatory obligatons in respect

of Financ

al Crime R

isk

The G

roup H

ead, C

FCC is the G

roup

’s Com

plianc

e and

Money-L

aunder

ing

Reporting Ofﬁcer and performs the

Financ

al Conduct Authority (FCA)

controlled function and

senior management function i

n accorda

with the

req

uirem

ent

s set ou

t by the FC

A, i

ncludn

g thos

e set ou

t in

the

ir handb

ook o

n syst

ems and c

ontro

ls. A

s the ﬁr

st line

, the

bus

ines

s unit pro

cess ow

ner

s have re

spon

siblit

y fo

r the

appl

icaton o

f polic

y cont

rols an

d the id

entﬁcat

on and

asure

ment of r

isk

s relat

ing to ﬁn

ancal cr

ime. Bu

sines

s unit

must communica

isks and a

ny policy non-compliance

the s

econ

d line for r

eview an

d approval fo

llowin

g the mo

del

for delegation of

thority

Mitgation

The

re are fo

ur Gro

up poli

ces in sup

por

t of the Fina

ncal Cri

Risk T

e Framewor

•

Gro

up Ant

i-Brib

y and C

orr

upti

on Polic

•

Group Anti-Money

Laundering and Counter T

errorist

Financng Policy

•

Gro

up San

ction

s Polic

•

Group Fraud

Risk Management Policy

The G

roup o

perat

es ri

-ba

sed a

sses

sme

nts an

d contr

ols

in suppor

t of its Financal Crime Risk programm

e, includng

(but n

ot limt

ed to

•

Group Risk Assessment - the Group monitors enterprise-

wide Financal Crime Risk

s through the CFCC Risk

sessment pro

cess consistn

g of F

inan

cal

ime Risk and

Complian

ce Risk assess

ments

. The Financal Crime Risk

assessment is a Group-wide risk assessment undertaken

annually to as

sess the inhe

rent F

ancal Crime Risk

exposures a

nd the associated processes

and controls

by whic

h thes

e expo

sures a

re mitg

ated.

•

Financal Crime Sur

veillance – risk-

ased sys

tems and

pro

cess

es to preve

nt and de

tect ﬁna

ncal cr

ime.

The s

tren

gth of con

trol

s is test

ed and a

sses

sed t

hrou

gh the

Gro

’s Opera

tiona

l and T

echno

log

y Risk T

ype Fram

ework

in add

iton to ove

rsig

ht by CFCC As

suran

ce and Gr

oup

Intern

al A

dit.

Gov

ern

ance committe

e o

versight

Financ

al Crim

e Risk wit

hn the G

roup i

s govern

ed by the

Group Financal Crime Ris

k Committee (

FCRC)

d the

Group Non-F

inancal Risk

Committee (

GNFRC)

for Fraud

Risk w

hich is a

ppoin

ted by and r

epor

ts in

to the G

roup

Risk Committee.

Thro

ugho

ut the G

roup, t

he GFCRC i

s resp

onsib

le for en

suri

fect

ive overs

ight for O

pera

tion

al Risk re

latin

g to Financal

Crime Risk, while the

NFR

C is responsible for ensuring

effective ove

rsight of Operational R

isk relating to Non-

Financal Risks includng Fraud Risk

. The Board appoin

ts the

Board Financal Crime Risk Co

mmittee to provide oversi

ght

on anti

-briber

y and corruption, anti-

money laundering

(

and te

rror

ist ﬁnan

cng) and s

anctio

ns, an

d the B

oard Ris

Committee for oversight on

Fraud Risk. The committees

prov

ide over

sight of t

he ef

fect

ivenes

s of th

e Grou

’

s p

olices

procedures, systems, controls and assurance

echanisms

designed to ident

, asses

s, manage,

monitor

, detect or

prevent

money laundering, non-compliance

with sanctions,

iber

, c

orr

uptio

n, inte

rnal/

exte

rnal f

raud an

d tax cr

ime by

third par

ties.

Decison-making aut

hori

tes and delegation

The Fin

ancal Cr

ime Ris

k T

pe Framewo

rk is th

e form

mechanism through whi

ch the delegation

of F

inancal Crime

Risk authorites is

made. The Group Head, CFCC

is the Risk

Framewo

rk Ow

ner fo

r Financal Cr

ime Ris

k unde

r the G

roup

’s

Enterprise Risk Management F

ramework. Certain aspects of

Financal Crime Complian

ce, second-line oversight and

challenge, a

re delegated withn the CFC

C function. Approval

amewor

ks are in p

lace to al

low for r

isk

-b

ased d

eciso

ns on

client onboarding, pot

ential breaches of sanctions regulatio

or policy

, situatons of

otential

money laundering (

and

ter

rori

st ﬁnan

cng)

, b

ribe

y and cor

rup

tion or i

nter

nal and

extern

al fraud.

Monito

rng

The Gro

up monitors Financal Crime Risk com

pliance against

a set o

f Risk Ap

peti

te met

rics t

hat are a

pproved by th

e Boar

The

se met

ric

s are revi

ewed per

iodca

lly and re

por

ted

regularly to the Group F

inancal Crime

Risk Committee,

Group Non-F

inancal Risk

Committee, Board Risk

ommittee

and Board Financal Crime Risk Co

mmittee.

Stress testing

The assessment of

Financ

al Crime vulnerab

ilties under

str

esse

d condi

tons o

r extrem

e event

s with a l

ow likelhoo

d of

occu

rrin

g is car

ried o

ut thro

ugh ent

erpr

ise st

res

s testi

ng whe

sce

nario a

nalys

is is us

ed to as

ses

s capital r

equir

ement

s for

Financal Crime Risk as part of t

he ov

all

scenar

io analysis

por

tfo

lio mana

ged un

der th

e Oper

ation

al and T

echn

olog

Risk T

e Framewor

k. Sp

ecif

c sc

enari

os are deve

lope

annu

ally wi

th coll

aborat

ion be

ween th

e busin

ess

, which

own

s and man

ages th

e ris

k, and t

he CFCC f

uncti

on, wh

ich is

second lin

e to incorporate signﬁcant Financal Crime Risk

event

s. T

his appr

oach co

nside

rs th

e impac

t of extre

me but

plausible scenarios on

the Group

’s

Financal

Crime Risk proﬁle.

275

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Roles and resp

onsiblite

The Global Head, Enterprise Risk Management

is the Risk

Fra

mework Owner for Model Risk

under the Group

’

s Enterpris

Risk Management F

ramework

. R

espon

sib

lit

y for the o

ver

sight

and implementat

on of the Model

Risk T

ype Framew

k is

delegated to the Global Head, Model R

isk Management

The M

odel R

isk T

ype Fram

ework s

ets o

ut cle

ar accou

ntabilt

and ro

les fo

r Mode

l Risk man

agem

ent thr

ough a th

ree lin

es of

defence model. F

-line ownership of

del

Risk resides

with

del Sp

onso

rs, w

ho are t

he busi

ness o

r fun

ction h

eads a

sign a Mo

del O

wner f

or each m

odel

. Mode

l Ow

ners m

ainly

represent model dev

eloper

s a

nd users, and are responsible

for end-

to-end model dev

elopment

, ensuring

model

performance through regular model mon

itorng, and

communicat

odel l

imtations, model assumptions and

risks

Model Owner

s a

coordinate the

submisson of

models

for val

idaton and a

pproval and ensure

appropr

iate

odel

implementaton and use.

econd-

line oversight is pro

ided b

Model Risk Management, which

compris

es Group

Model

alidaton and Mode

l Risk P

licy and Governan

ce.

Group Model V

alida

ton independently reviews and

grades

dels

, in line wi

th des

ign obje

ctves

, busi

ness u

ses an

compliance requirements, and highl

ghts identﬁed model

risks by rais

ng model related issues. The Model Risk P

olic

y a

Gove

rnan

ce team pr

ovides ove

rsig

ht of Mo

del Ris

k activ

ties

performing regular Model Risk

Asses

sment a

isk pr

oﬁle

reporting to senior management.

Mitgation

The M

odel R

isk po

licy an

d stand

ards de

ﬁne req

uireme

nts

for model dev

elopment and val

idaton ac

ivties, incl

udng

regular model performance monitorng.

Any model issues

or deﬁ

cencie

s identﬁe

d thro

ugh the va

lidato

n proce

ss are

mitgated through

applicaton of model mon

itorng,

model ov

erlays and/

or a model redev

elopment plan, which

und

ergo ro

bust rev

iew

, ch

allen

ge and app

roval. Op

erati

onal

controls go

vern all

Model Risk

-related processes, with regular

risk

assessments p

erform

ed to asse

ss appr

opriate

ness

and

fect

ivenes

s of th

ose con

trol

s, in line w

ith th

e Ope

ration

and T

ech

nolo

gy Risk T

e Framewor

k, wi

th rem

ediato

n plan

implemented where necessar

Gov

ern

ance committe

e o

versight

At Bo

ard level, t

he Boa

rd Risk C

ommit

tee exerc

ises over

sigh

of Mo

del Ri

sk with

n the Gr

oup. At th

e executi

ve level, t

Group Risk Committee has a

ointed

the Model Risk

Committee to ensure effective measurement and

management of Model R

isk. Sub-committees such as the

Credit Model Assessment Committee and T

raded Risk Model

Assessment Committee

oversee their

respective in

-scope

models and escalate

mater

ial

del

Risks to the Model

Risk Committee. I

n parallel, business and function-

level risk

committees provide go

vernance oversight of the models

used i

n their r

espective

processe

Decison-making aut

hori

tes and delegation

The M

odel R

isk T

ype Fram

ework is t

he for

mal me

chani

through which

he delegation

of Model Risk authorites

is made.

The Global Head, Enterprise Risk Management

delegates

authorites to

designated ind

v

idua

ls or Poli

y Owners

thr

ough th

e RTF

. The se

cond-lin

e owner

ship f

or Mod

el Risk

at country level is

delegated to Countr

y Ch

ief Risk Ofﬁcers

at the

applic

able branches a

nd subsidaries.

The Model Risk Committee is

respon

sible

for approving

models for use. Model

approv

al authorit

y is also

dele

gated

to the Credit

Model A

ssessment Committee, T

raded Risk

Model Asses

sment

Committee and indvidual

designated

model approv

s for

les

aterial

dels.

Monito

rng

The Group monitors Model Risk via

a set of Risk Appetite

met

ric

s that ar

e approved by t

he Boa

rd. Adher

ence to

del Risk A

ppet

ite and a

ny thres

hold br

each

es are

reported regularly to the Board Risk

ommittee,

roup R

isk

Com

mitte

e and Mo

del Ri

sk Comm

itte

e. Thes

e metr

ics an

thr

eshol

ds are rev

iewed on a

n annual b

asis t

o ensu

re that

thresh

old calibraton remains approp

riate and the them

are adequately co

vering the current risks.

Models undergo regular moni

tor

ng

sed on

eir

level of

perceived Model Risk, with

onitor

ng result

and breaches

presented to Model Risk

Management and delegated

model approv

ers.

Model Risk Management

produces Model Risk

rep

orts

coveri

ng the m

odel l

ands

cape, wh

ich incl

ude pe

rfor

mance

metrics, identﬁed model issues and

reme

aton plans.

The

se are pr

esent

ed for d

iscus

son at t

he Mod

el Risk

governance

committees on a regular basis.

Stress testing

dels pl

ay an int

egral ro

le in th

e Grou

’

s st

ress t

esti

ng and

are r

igoro

usly u

ser

-t

este

d to ensu

re tha

t they are ﬁt

-fo

-us

under stressed market c

onditons. Compliance with Model

Risk management r

equirements and regulator

y gu

idelnes

are al

so ass

ess

ed as p

art of e

ach str

ess te

st, w

ith any

identﬁed gaps

mitgated through model overlays and

deﬁned remediat

on plans.

The Group deﬁnes Model Risk as potential loss that

may occur as a consequence of decis

s or the risk of

mis-esti

on that could be princ

pally based on the

output of models

, due to errors in the dev

elopment

implementat

on or use of such mo

dels.

Risk Appetite Statement

The G

roup h

as no ap

petit

e for ma

teria

l adver

implc

ations arisng

rom m

isuse of models or

errors

in the de

velopment or implementaton

of models;

whilst accep

ting model uncer

taint

Model R

Standard Chartered

– Annu

al Rep

ort 202

sk r

evi

Risk management approach

The Group deﬁnes Re

putational and Sustai

nabl

y Risk

as the potential for damage to the franchise (

such as

loss of trust

, earnings or mark

et capitalsati

)

, because

of stak

eholder

s taking a negative vie

w of the G

roup

through actual or perc

eived actions or inactons,

includ

ng a failure to uphold responsible business

conduct or lapses i

n our commitment to do no

signﬁcant environme

ntal and so

cial harm

through o

client, third

-part

y relationshps or our o

n operati

Risk Appetite Statement

The G

roup a

ims to pr

otect t

he fr

anchis

e from

mat

erial d

amage t

o its r

eput

ation by en

sur

ing tha

any

usiness ac

ivty is satisfactorly assessed

and m

anage

d by the app

ropr

iate level o

management and gov

nance

oversight. This

includes a potential

failure to uphold responsible

bus

ines

s condu

ct or laps

es in ou

r commit

ment t

do no signﬁcant environmental and so

cial harm.

put

ati

onal and Sustaina

blity Risk

Sustain

ablity Risk contin

ues to be an area of growing

imp

orta

nce, dr

ivng a n

eed fo

r strat

egic tr

ansfo

rmat

ion acr

oss

bus

ines

s activ

ties a

nd ris

k manag

ement t

o ensu

re that we

uphold the princ

ple

of Responsible Business Conduct and

cont

inue to d

o the r

ight thi

ng for ou

r stakeh

older

s, t

environment and

fected communites. Throughout 2

021,

we ha

ve laid the f

ound

ation t

o integ

rate Su

stain

ablit

y Risk

man

ageme

nt for cl

ient

s, th

ird par

ties an

d our op

erati

ons and

cont

inue

d to invest in in

fras

tru

cture a

nd tech

nolo

gy to kee

pace with em

erging environmental, so

cial and gov

rnance

(ESG

) regulator

y obligatons a

nd accelerating commitments

acro

ss our m

arket

Roles and resp

onsiblite

The Global Head, Enterprise Risk Management

is the Risk

Framework Own

er for R

eputat

ional and Sustainablit

y Risk

under the Group

’

s Enterprise Risk Management F

ramework.

The resp

onsiblit

y for R

putational and Su

stainablit

y Risk

management is delegated to

Reputational and Sustainab

lit

Risk Le

ads in ERM a

s well as Ch

ief Risk O

fﬁce

rs at re

gion,

coun

y and c

lient

-bus

ines

s levels

. They con

stit

ute th

e seco

line of defence, overs

eeing and challenging t

he ﬁrst line of

def

ence, w

hich res

ides wi

th the C

hief E

xecut

ive Of

ﬁcers

Bus

ines

s Head

s, Pro

duct He

ads an

d Functio

n Head

s in

respect of risk management

activties of reputational and

sustainabl

y-related

risks respectively

. The Environ

mental

and S

ocial Ri

sk Mana

geme

nt team (E

SRM), which is i

n the

ﬁr

st line of d

efen

ce, also p

rovide

s dedica

ted su

ppor

t on the

management of environmental

and social risks and impacts

arisng from the

roup

’

s client

relationshps and transactions.

Mitgation

In li

ne with the princ

ples of R

esponsible Business Conduct

and

Do No S

ignﬁcant H

arm, t

he Gro

up dee

ms Reput

atio

nal and

Sustain

ablity Risk to be dri

ven b

•

negative shifts in stak

eholder perceptions due to decis

related to client

s, products

, transactions, third part

ies and

strategic coverage

•

potential mater

ial harm or degradation to the natural

environment (

environmental) through actions

/inactons of

the Group

•

pot

enti

al mater

ial har

m to ind

vidu

als or co

mmunit

es

(

social)

isks through ac

ions

/inactons

of the Group.

The G

roup’

s Repu

tatio

nal Risk p

olic

y set

s out t

he pr

incpal

sou

rces of Rep

utat

ional Ri

sk dri

ven by neg

ative sh

ift

s in

stakeholder perceptions as

well as r

esponsiblites, control and

oversight standards

for identf

ying, asses

sing, escalating

and

effectively manag

ing Reputationa

l Risk. The Group ta

kes

str

uct

ured ap

proac

h to the a

sses

smen

t of ris

ks as

soci

ated

wit

h how ind

vidua

l client

, tran

sact

ion, pr

oduct an

str

ategi

c coverage d

ecison

s may af

ct perce

ption

s of the

organisaton

and it

acti

vti

es, based on explic

t princples

includng, b

ut not limted to gambling, def

ence and dual

use goods. Whenever potential for stak

eholder concerns

is id

entﬁed

, issu

es are su

bject to p

rior ap

proval by a

management authorit

y commensurate with the material

of ma

tter

s bein

g consi

dered

. Such a

utho

rite

s may acc

ept

or decline the

isk or

impose conditons upon proposals,

to pro

tect t

he Gro

’s reput

ation

The G

roup’

s Sus

taina

blit

y Risk p

olic

y set

s out t

he requ

ireme

nts

and respo

nsiblites for managing environm

ental and social

sks fo

r the G

roup

’s oper

ation

s, clie

s and thir

d part

ies, a

guid

ed by vari

ous ind

ustr

y s

tandar

ds such a

s the O

ECD’

Due Dilgence

uidance

for Responsible Business Conduct,

Equator P

rincples, UN Sustainable De

velopment Goals and

the Paris A

greem

ent.

Thro

ugh ou

r opera

tion

s, the G

rou

p seek

s to minm

ise it

imp

act on th

e environ

ment an

d have ta

rget

s to red

uce

ene

rgy

, wat

er and was

te. Clie

nts ar

e expe

cted t

o adhere t

minmum

gulatory and complianc

e requirements, includng

critera from the Group

’

s Positon Statements. Suppliers must

comp

ly wit

h the G

roup

’s Supp

lier Cha

rter w

hich se

ts o

ut the

Gro

’s expe

ctatio

ns on et

hics

, anti-br

iber

y a

nd corr

upt

ion,

human righ

ts, environm

ental, health and safe

ty stan

dards,

lab

our and p

rote

ction of t

he envi

ronmen

Gov

ern

ance committe

e o

versight

At Bo

ard level, t

he Cult

ure and S

usta

inablit

y C

ommit

tee

provides o

versight for our Sustainab

lity strategy while

the B

oard Ri

sk Com

mitte

e overs

ees Rep

utati

onal an

Sus

tainab

lit

y Risk a

s part o

f the ERMF

. T

he Gro

up Risk

Com

mitte

e (

GRC) p

rovide

s execut

ive-level c

ommit

tee

oversight

and delegates the authorit

y to ensure

fective

manage

ment of Reputational and Su

stainablit

y Risk to

the Group Responsib

lit

y and R

eputational Risk Committee

(

GRRRC).

277

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

The G

RRRC’s remi

t is to:

•

Challenge, con

strain and, if required, sto

p business acti

vties

whe

re ris

ks are n

ot align

ed wit

h the G

roup

’s Risk A

ppet

ite.

•

Mak

e decis

ons on R

eputational R

isk matters assessed as

high o

r ver

y high ba

sed o

n the G

roup

’s prim

y Reput

ation

Risk ma

terialty assessment matrix, and

matters escalated

fro

m the re

gions o

r clien

t busin

esse

•

Provid

e overs

ight of ma

teri

al Reputa

tion

al Risk an

the

matic i

ssu

es aris

ng fro

m the po

tent

ial failu

re of ot

her

risk t

ypes.

•

Ove

rse

e Sust

ainabl

y Risk man

agem

ent of th

e Gro

up.

The Sust

ainable Finance Governance Com

mittee, appoint

by the G

RRRC provi

des le

ader

ship, gover

nanc

e and over

sight

for deliver

Group

’

s sustainable ﬁnance

fering. This

includes:

•

Review

ng and su

ppor

ting t

he Gro

’s framewo

s for

Gree

n and Sustainable Product

s, and T

ransiton Finance

for ap

proval of G

RRRC. T

hese f

ramewo

s set ou

t the

guidelnes

for approval

of products and transactions

which carr

y the sus

tainable ﬁnance and/

or transiton

ﬁnance label

•

cison-ma

king au

thor

y on th

e eligbilt

y o

f a susta

inable

set for a

ny risk-weighte

d asse

ts (RW

A) relief.

The G

roup N

on-Finan

cal Risk C

ommit

tee ha

s overs

ight of

the control en

vironment and effective management of

Reput

atio

nal Risk i

ncurr

ed wh

en ther

e are neg

ative s

hift

s in

stakeholder

erce

ptions of the Group due

to failure of other

PRT

s. The re

gion

al and clie

-busin

ess r

isk com

mitte

provide oversight on th

e R

utational and Su

stainablit

Risk p

roﬁle w

ithn th

eir remit

. The C

ount

y Non-Fin

ancal Ris

Committee (

CNFRC)

provides o

versight of the R

eput

ational

and S

ustain

ablit

y Ris

k proﬁle a

t a count

y level.

Decison-making aut

hori

tes and delegation

The R

eputational and Sus

tainab

lit

y R

TF is the

for

mal

mechanism through whi

ch the delegation

of Re

putational

and Sustainab

lit

y Risk

thorites is

made. The Global Head,

Enterprise Risk Management delegates

risk acceptance

authorites for stak

eholder perception risks to designated

ind

vidu

als in th

e ﬁrst li

ne and se

cond li

ne or to co

mmitt

ees

suc

h as the G

RRRC via r

isk au

thor

y matr

ices

These risk aut

horit

y matrices are tiered at countr

, regional,

bus

ines

s segm

ent or G

roup leve

ls and ar

e estab

lishe

d for

sks in

curre

d in stra

tegic c

overage, cl

ient

s, pro

duct

s or

tran

sact

ions

. For envir

onmen

tal and s

ocial r

isk

s, the E

SRM

mus

t review an

d supp

ort th

e risk a

sse

ssme

nts f

or clie

nts

and t

ransa

ction

s and es

calate t

o the Repu

tatio

nal and

Sustain

ablity Risk lea

ds as required.

Monito

rng

Reputation

al and Sustainablit

y Risk polices and standard

are ap

plicabl

e to all Gr

oup ent

ites

. However, local re

gulat

ors

in so

me mar

kets ma

y impo

se add

itonal r

equir

ement

s on h

bank

s manage and track Reputati

onal and Sustainablit

y Risk.

In su

ch case

s, the

se are co

mplie

d with in a

ddito

n to Gro

polices and stand

ards.

posure to

stakeholder perception risks arisng

rom

transaction

s, clients, produ

cts and strategic coverage are

monitored through esta

blished triggers outlined in risk

mat

erialt

y m

atri

ces to pro

mpt th

e right l

evels of r

isk

-b

ase

con

sidera

ton by th

e ﬁrst li

ne and es

calat

ions to t

he se

cond

line where ne

cessar

. Risk accept

ance decisons and them

atic

tre

nds are al

so bei

ng review

ed on a pe

riodc b

asis

posure to

Sustainablity Risk is monitored thr

ough triggers

embedded withn the ﬁrst

-l

ine process

es where

environmental

and s

ocial r

isks a

re cons

idere

d for clie

nts a

nd tran

sacti

ons

via t

he Enviro

nmen

tal and S

ocial Ri

sk As

ses

sment

s, a

con

sidere

d for ven

dor

s in our su

pply ch

ain thro

ugh th

Modern Slaver

y questionnares.

In 2021, we h

ave approve

d new Ris

k Appet

ite me

tric

s for

Envir

onmen

tal and S

ocial r

isk

s as well as m

anagin

g mod

ern

slaver

y risks in

supply chain.

Stress testing

Reput

atio

nal Risk o

utcom

es are t

aken into ac

count in

ent

erpr

ise st

ress t

est

s and inc

orpo

rated i

nto th

e Grou

’

str

ess te

sting s

cenar

ios

. For exampl

e, the G

roup mi

ght

con

sider w

hat imp

act a hypo

thet

ical event l

eadin

g to los

s of

conﬁdence amon

g liqudity provider

s in a particular mar

ket

migh

t have, or w

hat th

e implca

tions m

ight be f

or supp

ort

ing

par

t of th

e organi

saton i

n order t

o prote

ct the b

rand. A

Sus

tainab

lit

y Risk co

ntinu

es to evol

ve as an area o

f emer

ging

regulator

y focus

with various

markets develop

ing ESG

regulator

y guida

nce, w

e are

keeping

ace

ith

external

developments to ena

ble us to

explore meaningful scenario

analysi

s with the aim of advancing Reputatio

nal and

Sustain

ablity Risk mana

gement.

278

Standard

Chartere

– A

nnu

al Repo

rt 2021

sk r

evi

Risk management approach

The Group recognises Climate R

isk as an Integrated

Risk T

ype. Cli

mate Risk is deﬁned as the potential for

ﬁnanc

al loss and non-ﬁ

nanc

al detr

iments arisng

from climate cha

nge and societ

y’

s response to it.

Risk Appetite Statement

The G

roup a

ims to me

asur

e and man

age ﬁna

ncal

and non-ﬁnancal risk

s from climate change, and

reduce emissons r

elated to our o

wn activties

and t

hose re

late

d to the ﬁn

ancng o

f client

s in

alignment with the P

aris Agreement.

Climate R

isk

Climate Risk has b

een recognise

d as an emerging risk since

2017 and wa

s elevate

d to an Int

egrat

ed Risk T

e (previ

ousl

own as mat

eria

l cross-

cutti

ng ris

) w

ithn th

e ERMF

, our

cent

ral ri

sk fram

ework in 2019

. W

e have i

ntrod

uced Cl

imate

Risk into mainst

ream risk manag

ement in alignment with th

Bank of England’

s Super

visor

y Statement 3

/19 requirement

and in 20

1 greatly improved our scenar

io analysis and

str

ess te

sting a

biltie

s to deli

ver the 2021 Cli

mate Bi

ennal

xplo

rator

y S

cenar

io (

CBE

S). However

, it i

s still a re

lati

vely

nas

cent r

isk are

a which w

ill mat

ure and s

tabils

e over the

year

s to com

Roles and resp

onsiblite

The t

hree li

nes of d

efenc

e mode

l as per t

he Ente

rpri

se Ris

Man

ageme

nt Framewor

k appli

es to Clim

ate Ris

k. Th

e Grou

Chie

f Risk Of

ﬁcer (

CRO

) has t

he ult

imate s

econd-l

ine and

senior management r

esponsiblity for Climate

Risk

. The

is supported by the Global Head, Enterprise Risk Management

who h

as da

y-to-da

y overs

ight and ce

ntral r

espo

nsiblit

for secon

line Climate Risk acti

vties. As Clim

ate Risk is

inte

grate

d into t

he relevan

t Princp

al Risk T

es (PRT

cond-lin

e respo

nsibl

ites lie w

ith th

e Risk Fram

ework O

wner

(

at Gro

up, regi

onal an

d count

y level), with su

bject m

atter

exp

ert

ise sup

por

t from t

he cent

ral Clim

ate Risk t

eam.

Mitgation

As a

n Integ

rated Ri

sk T

ype ma

nifes

ts th

rough o

ther PRT

s, r

isk

mit

gatio

n activ

ties ar

e spec

if

c to indv

idual PRT

s. T

he Gro

has undertaken in

tial development and integrat

on of

Climate Risk into PRT processe

s. Climate Risk ass

essment

are considere

d as part of Reputatio

nal and Sustainablit

tran

sact

ion revi

ews for cl

ient

s and tr

ansac

tions i

n high car

bon

ctor

s. W

e ha

ve direct

ly eng

aged w

ith cli

ent

s on thei

adaptation and

mitgation plans using cl

ient level Cl

imate

Risk q

uest

ionna

res and a ﬁr

st ph

ase of in

tegra

ton int

o the

cre

dit deci

soning p

roces

s is un

der way fo

r CCIB Cred

it Risk

As p

art of q

uart

erl

y credit p

ort

folio r

eviews in C

PBB, phys

ical

risk assessment

s for

residental

mortgage portfolios are

also being monitor

ed for concen

tration lev

els

Withn

raded

Risk

, a physi

cal ris

k scena

rio is n

ow part o

f their s

tres

tes

ting f

ramewor

k whil

e the fo

cus for O

perat

ional a

echno

logy R

isk ha

s been o

n Resilen

ce and Thi

rd-Part

y Ris

man

ageme

nt. Rel

evant pol

ices and s

tanda

rds acro

ss PRT

have been updated to

factor in

Climate Risk considerat

ons

and a fo

cus are

a in 2022 w

ill be to de

liver t

he impl

ement

aton

of these requiremen

ts.

Gov

ern

ance committe

e o

versight

ard-level over

sigh

t is exercis

ed thro

ugh th

e Boar

d Risk

Commit

tee (BRC)

, and regul

ar Climate Risk updates are

prov

ided to t

he Bo

ard and BRC

. At th

e execut

ive level, t

Group Risk Committee oversees implementaton of the

Clim

ate Risk wo

rkp

lan. Th

e GCRO ha

s also ap

point

ed a

Climate R

isk Management F

orum consistng of

senior

representativ

es from the business, risk, stra

tegy and other

fun

ctions such as sustain

ablity and leg

al. The Climate Risk

Management Forum meets quarterly to discuss dev

elopment

and implementat

on of the C

limate Risk workplan, and

provide structured governance a

rou

nd engagement with

rel

evant PRT

s im

pact

ed by Clima

te Risk

. Thro

ugh 2022

, we will

strengthen countr

y and regional

governance oversight for

Clim

ate Risk p

roﬁle ac

ross o

ur key market

ool

s and met

hodolo

gies

Applying existng risk ma

nagement tools to quantify Climate

Risk i

s challe

nging g

iven inh

erent d

ata and m

etho

dolo

chal

lenge

s, inc

ludng t

he nee

d to be fo

ward-loo

king ove

lon

g time ho

rizon

s. T

o quant

y clim

ate phys

ical and t

ransit

on

sk we leverag

e and ha

ve investe

d in a numb

er of are

as,

includ

ng tools and partnerships

•

Mun

ich Re – we are usi

ng Muni

ch Re’

s phys

ical ri

sess

ment t

ool, w

hich is bu

ilt on ext

ensi

ve re-insu

rance

experience.

•

Barin

ga P

tner

s –

we are using Baring

a’

s ﬂagship climat

dels to u

nder

stan

d climat

e scena

rios

, and com

pute

transiton risk and temperature a

lignment.

•

Sta

ndard & Poo

r – we are levera

ging S&

P and T

ruco

’

weal

th of clim

ate dat

a coverin

g asse

t locat

ions

, ener

mixes and

emi

ssons.

•

Imp

erial C

olle

ge – we are lever

aging Im

peri

al’s acade

mic

exper

tise to advance our und

erstandin

g of climate science,

ups

kill ou

r staf

f and sen

ior man

agem

ent, a

nd prog

ress t

sta

te of ind

epen

dent re

searc

h on clima

te ris

ks wi

th an

acute focu

s on emerging markets

Decison-making aut

hori

tes and delegation

The Global Head, Enterprise Risk Management is supported

by a cent

ralise

d Clima

te Risk t

eam wit

hn the ERM f

unc

tion.

The G

lob

al Hea

d, Climat

e Risk an

d Net Zero O

vers

ight is

responsible for ensuring and

executing the deliv

y of

the

Climate Risk work

plan which will deﬁne decison-mak

ing

authorites and delegations acr

s the

roup.

279

Standard Chartered

– An

nual Re

por

t 2021

sk rev

iew and C

api

tal r

eview

Monito

rng

The C

limate R

isk App

etit

e State

ment i

s approved a

revi

ewed annu

ally by th

e Boar

The Group has dev

elope

s ﬁrst

-generation Climate Risk

rep

ort

ing and M

anage

ment T

eam leve

l Risk Ap

peti

te met

rics

The ﬁ

rst ver

sion o

f thes

e metr

ics wa

s share

d with t

he rel

evant

comm

itte

es as pa

rt of th

e Gro

up Risk In

form

ation Rep

ort a

Board

Risk Inf

ormation R

eport, respectiv

ely

, in Se

ptember

2021. G

oing fo

ward, th

ese wi

ll be incl

uded i

n the G

roup an

Board risk report

s quarterly

, and management informaton

is al

so bein

g progr

essi

vely rol

led ou

t at the re

giona

l and

countr

y le

vel.

Stress testing

Climate Risk inten

sﬁ

es over time, and fut

ure global

tem

perat

ure ri

ses de

pend o

n toda

y’s trans

iton pa

thway

Considerng different transiton scenarios is c

rucial to

sess

ing Clim

ate Ris

k over the ne

xt 10, 20 and 50 yea

rs.

Stress testing

and scenario ana

lysis are used to

ass

ess c

apital

requirem

ents for Climat

e Risk and since 2

0, physical and

tran

sito

n risk

s have b

een in

clude

d in the G

roup I

ntern

Cap

ital Ade

quac

y As

sess

ment Pro

cess (I

AP)

. In 2021

, we

undertook a number of Cl

imate Risk stress tests, includng b

the Hong K

ong Monetary Authority and the Bank

of England’

Climate Biennal Explo

rator

y Scenario (

CBES)

. This require

signﬁ

cant client engagement and helped gro

w our

under

standing and mana

gement of Climate Risk

In 2022

, the G

roup in

tend

s to develo

p manag

emen

t scena

rios

strengthening

business strategy and

ﬁnancal

planning and

sup

port

ing th

e Grou

’

s n

et zero jo

urney.

tail

s on th

e Gro

up’

s T

kfo

rce on C

lima

te-

rela

ted Fi

nan

cal

sclo

sur

es can b

e fou

nd on

com/t

280

Standard Chartered

– An

nual Re

por

t 2021

sk r

evi

Risk management approach

Emergi

risks

In addit

on to our Princpal Ris

k T

ypes that we

manage through Risk T

e F

ramewo

s, polic

es

and Risk Appetite, w

e also maintan an i

nventor

of emerging risks. Emerging risks refer to

unpredicta

ble and uncontrollable e

vent

s with

the potential to materially impac

t o

ur busi

ness.

These include near

ter

m risks that are on the

horizon and ca

n b

e measured or mit

gated to

some extent, as well as longer

-term uncertaintes

that are on the radar but not y

et f

ully

measurable.

In 2021, we u

nder

took a t

horou

gh revie

w of our Em

erging

Risk

s, u

sing th

e appro

ach des

crib

ed in th

e Enter

pris

e Risk

Management Frame

work

ction (p

age 25

8 to 263)

. T

he key

res

ult

s of the rev

iew are de

taile

d below.

ey chan

ges to our e

merging ri

sks:

The f

ollowi

ng item

s have b

een rem

oved as em

erging r

isk

•

‘Mi

ddle East g

eop

olitca

l tensi

ons’ – Th

e risk h

as be

rem

oved as th

e immed

ate imp

act to th

e Grou

’

s c

redit

portfolio is manageable

•

‘Interbank Off

ered R

ate discontnuation and transiton

’ –

Thi

s risk h

as bee

n remove

d given th

e Grou

p has a well-

established global

IBOR T

ransiton Prog

ramme to c

sider

all as

pect

s of th

e trans

iton an

d how ris

ks f

rom the t

ransi

ton

can be m

itgat

The f

ollowi

ng item

s have b

een ame

nded o

r adde

d as new

eme

rging r

isk

•

‘Cr

tallis

aton of i

nﬂaton f

ear

s’ – Inter

est rat

es have

alre

ady in

creas

ed or are l

ikely to r

ise in s

everal coun

trie

s as

cent

ral ban

ks res

pond t

o inﬂato

nar

y pre

ssur

e. Dri

vers o

price increases include

shor

tages of

aterials

and labour

incr

ease

d dema

nd as eco

nomi

c recover

ies take ho

ld and

lon

g-term m

onet

y stim

ulus

, with gr

owing ac

ceptan

tha

t the inﬂa

tonar

y sho

ck will la

st lon

ger th

an intiall

expected

•

‘En

ergy s

ecur

y’ – Inc

reas

ed indu

str

al deman

d and

acce

lerat

ed tran

siton

s to cle

aner en

ergy s

ource

s have pu

a str

ain on sup

ply lin

es. Th

is has in

crea

sed te

nsion

s bet

wee

nat

ions a

s power shi

s towards e

nergy e

xpor

ter

s, an

energy securit

becomes questionable across de

veloped

market

s and emerging market

s alik

e. A lack of investmen

by oil pro

duce

rs as we t

ransi

ton cou

ld also l

ead to an

incr

ease i

n oil pri

ces in th

e shor

t term

•

‘S

uppl

y chain di

sloca

tons’ – G

loba

l suppl

y chain

s have

en disr

upte

d bot

h by CO

VID

19 loc

kdowns an

deglobalisaton. As economies

ver there are

ortages

in so

me key sourc

e mater

ials an

d deli

ver

y dela

ys whi

ch are

fecti

ng many ind

ustr

es’ abilt

y to m

eet t

he rapid in

crea

in demand

•

‘E

xpanding stak

ehold

pectations for en

vironmental,

cial and cor

por

ate gover

nance (E

SG)’ – A

ded a

s an

emerging risk to

reﬂect the broader sustainab

lit

y agenda

the G

roup a

nd capt

ure ES

G conce

rns beyo

nd Clima

te Risk

suc

h as biod

vers

y loss an

d depl

etion o

f natu

ral res

ources

which are

increasng areas of focus

for regulators

, in

vestors

and non-go

vernmental organisatons. The speed of

tran

sito

n to mee

t the re

quirem

ent

s could b

e fast

er in

developed mark

•

‘E

andin

g array o

f glob

al tens

ions’ – E

ande

d to cover a

proliferaton of

global politcal and economic

agenda items

that create disrupton and potential ﬂashpoints bet

ween

countr

ies. These are res

haping global politcal alliances and

disruptng traditona

l economic corridors

•

‘

Adapti

ng to end

emic COVID-

19 an

d a K

-sh

aped r

ecover

’

– Enca

psula

tes th

e shift t

owards li

vng wi

th CO

ID-

19 an

wha

t the new p

ost

-COVID nor

mal wi

ll look l

ike. V

ying

vacci

at

on rates and lev

els of economic stimulus have

wid

ened t

he recove

y gap and t

hreat

en a K

-s

hape

d global

recove

, whe

re coun

trie

s or sect

ors r

ecover at dif

fer

ent

rate

s depe

nding o

n their a

bilt

y to adap

t to a pos

ID worl

•

‘New business

str

uctures,

channels and c

ompetiton’ –

Reﬂect

s th

e linkage b

ween th

e Gro

’

s i

ncrea

sng rel

iance

on part

nerships and alliance

s in exploring new techn

ologies

and di

gtal enhanc

ement

and the heightened

risk

s tha

t are

int

rnsic

ally linke

d to such a

ctiv

ties

. Digtal a

sse

ts are a

lso

covere

d withn t

his em

erging r

isk

•

‘

ent po

ols of t

he fu

ture’ – E

ande

d to cons

ider th

e ris

of wi

denng s

kills g

aps and s

hiftn

g expe

ctat

ions of t

ture wo

rkf

orce, beyo

nd just t

he prac

tical ch

alleng

es of

incr

ease

d remo

te work

ing

r list of em

ergin

g risk

s, b

ased o

n our cur

rent k

nowle

dge an

sumpt

ions

, is set o

ut bel

, wi

th our su

bject

ve ass

essm

ent

of th

eir imp

act, li

kelhoo

d and velo

cit

y of chan

ge. Thi

s reﬂect

the l

atest i

nter

nal as

sess

ment o

f mater

ial ri

sks t

hat th

e Grou

face

s as ide

ntﬁed by se

nior ma

nagem

ent

. This lis

t is not

des

igned t

o be exh

aust

ive and th

ere ma

y be add

itonal

sks w

hich cou

ld mate

rials

e or have an a

dver

se ef

fect o

the G

roup.

r mitgat

ion app

roach f

or the

se ris

ks ma

y not el

imnate

the

m but sh

ows the G

roup’

s att

empt to r

educ

e or mana

the r

isk

. As ce

rtain r

isk

s develo

p and mat

erial

se over tim

management will tak

e appropriate steps to mitgate the risk

sed on it

s imp

act on th

e Gro

up.

e Gro

’s Risk M

ana

gem

ent Fr

amewo

rk an

d Syst

em of In

ter

nal C

ont

rol a

ppli

es on

ly to w

hol

ly con

tro

lle

d sub

sida

rie

s of th

e Gro

up, an

d not t

o As

soc

iate

s, J

oint

ntu

res o

r Str

uct

ure

d Ent

ite

s of th

e Gro

up.

281

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Geopolitcal considerat

ons

(

Risk rank

ed according to severit

)

Emerging

risk

Risk trend

since 2020

Context

How

these are mi

tgated/

steps

Expan

ding

array of g

lobal

tensions

Pot

enti

al imp

act:

High

Lik

elhood:

Medium

elocity of change:

Moderate

•

Rela

tion

s bet

wee

n China a

nd the West re

main f

ragil

The U

S and Chi

na are en

gage

d in a se

curi

ty c

ompe

tito

at has ra

mif

cati

ons ac

ross m

any asp

ect

s of th

eir

complex interdependenc

•

ere ha

s also b

een in

crea

sng vol

atilt

y w

ithn Ch

ina,

wit

h tur

bul

ence in t

he pro

per

ty d

evelop

ment s

ecto

r and

targeted legislat

on for s

pecifc industres such

education, tech

nology and

real estate

, which could

have

spi

llover ef

fec

ts in

to oth

er mar

kets g

iven t

he size o

China’s

conomy

•

ens

ions ar

e also in

crea

sng re

gard

ing Rus

sia’s pres

ence

on th

e Ukra

inan b

order. Alt

houg

h the G

roup

’s expos

ure

to th

e regi

on is lim

ted, t

he po

tent

ial imp

act on t

he res

of th

e worl

d fro

m econ

omic or m

iltar

y a

ction c

ould b

sig

nﬁcant

, and ca

use f

urt

her f

ractu

res b

ween Ea

and W

est

•

In addit

on, tensions are risng

bet

ween historc

allies

wit

hn NA

O a

nd th

e G7

, aro

und ﬂa

shpo

int

s such a

s the

withdra

wal

rom Afghanistan, the laun

ch of

, and

ten

sion

s on th

e K

rean p

enin

sula

. Thes

e may i

nten

sf

wit

h ele

ction

s due in s

ome m

ajor co

untr

ies in 202

•

Are

as of co

llab

orat

ion exi

st – suc

h as agre

eme

nts

mad

e at the CO

P26 clim

ate su

mmit – b

ut the

re are a

number of issues that rema

in, includ

ublic

health

and s

afet

, tra

de, na

tion

al secu

rit

, s

overei

gnt

, an

territoral d

isputes

•

A fo

cus on do

mest

ic rec

over

y in th

e wake of COVID-

s led to p

rote

ction

st po

lices an

d disr

upt

on to gl

obal

supply chains

•

me gover

nmen

ts h

ave us

ed the p

ande

mic as a

opportunit

y to

consolidate power

, which

could lead to

further tension and potential

retaliator

y actions

•

Inc

reas

ed de

mand h

as cre

ated s

hor

tage

s in som

e key

ctor

s, su

ch as el

ectr

onic

s and ene

rgy, which co

uld ti

e balan

ce of pow

er toward

s prod

ucer

s. Inve

stme

nt in

loc

al tec

hnol

ogical i

nfra

str

uct

ure ha

s beco

me a key foc

to reduce

dependence on ex

ternal counte

rparties and

ensure national security

•

The Group,

with its notable exposure

and presence

Chin

a, fac

es a high r

isk of b

eing c

aught i

n the cr

ossﬁr

of es

calat

ing ge

opo

litca

l tens

ions b

ween t

he East

and W

est

•

e Grou

p also d

eri

ves sign

ﬁcant reve

nues f

rom

supporting cross-

order

trade and material offshore

support operations

•

arp sl

owdown

s in the US

, Chin

and more

broadly

, world

trade and

glo

bal grow

th are a f

eat

ure of G

roup

stress scenarios.

These stress tests

prov

ide vi

sbilt

y to key v

uln

erabil

ties

so that management c

an implement

timely inter

ventons

•

taile

d por

tfo

lio revi

ews are

conducted on

an ongoing basis,

most recently

regarding incr

easng

tension

s around Ukraine, and action

is tak

en where necessary

•

e Grou

p is clo

sely m

onit

orn

g the

China–G7 rel

ationshp

and assessing

e impac

t on our b

usin

ess w

ith

ams in th

e ﬁrs

t and se

cond l

ine

of defence

•

e Grou

p rema

ins vi

glant in

monitorng geopolit

cal relationshps

•

Inc

reas

ed sc

rut

iny is app

lied w

hen

onb

oard

ing cli

ent

s in sen

sitve

industres a

nd in ensuring c

ompliance

with sanc

tions requirements

Energy

secu

rity

Pot

enti

al imp

act:

High

Lik

elhood:

Medium

elocity of change:

Fas

•

Inc

reas

ed de

mand fo

r ener

, b

ott

lene

cks in t

production of rene

wables and pressure to ac

celerate the

tra

nsit

on to new c

lean s

ourc

es are dr

ivn

g an eme

rging

energy supply shortage, causing

ice

inﬂaton and

exacerbat

ing disrupton

s in

obal supply chains

•

Eme

rging m

arket

s wh

ich rel

y on imp

ort

s of en

ergy r

isk

bei

ng dis

advan

tage

d due to t

he ma

ssi

ve ener

gy nee

required to

develop

•

Developed nations

also face a trade-off

, as

pressure to

ado

pt cle

an ene

rgy ha

s cons

train

ed th

eir abil

ty t

o rely o

traditonal

sources to meet demand,

likely leading

sig

nﬁcant pr

ice vol

atilt

y u

ntil pr

oduc

tion ca

pacit

y f

ren

ewable s

ourc

es is su

fﬁcen

t to me

et the e

nerg

y gap

•

There are

increasng geopoli

tcal tensions

as the bal

ance

of p

ower shif

s toward

s energ

y exp

ort

ers

. The re

luct

ance

of so

me nat

ion

s to comm

it to cli

mate g

oals al

so ad

ds to

pre

ssur

e for a gl

obal t

ransi

ton

, and th

e polit

cal

advantage ac

uing

to traditonal o

il-pr

duci

nations

y fur

the

r compl

icate t

he go

als of a n

et zero e

conomy

•

Lack o

f invest

ment by oi

l prod

ucer

s as we tr

ansi

ton cou

als

o lead t

o an incr

eas

e in oil pr

ices i

n the sh

ort t

erm

•

As p

art o

f our st

res

s test

s, a

n oil sho

scenario was

developed

•

Sove

reign ra

ting

s, ou

tlo

oks an

cou

ntr

y r

isk limt

s are r

egu

larl

monitored with period

c updates

to senior stak

eholder

•

e Grou

p is imp

leme

ntng a Cl

imat

Ris

k work

plan an

d aims t

o embe

clim

ate r

isk

s acros

s all re

levant

incpa

l risk

s in 202

2. Thi

s incl

udes

scenario a

nalysis and stress testi

capabil

t

y to

under

stand

ﬁnancal

risks and opportunites from

climate

change

e ris

k tre

nd ref

s to th

e overa

ll ri

sk sco

re tr

end

, whi

ch is a co

mbin

at

on of p

oten

tia

l imp

act

, likel

hoo

d and v

elo

cit

y of ch

ang

is th

eme wa

s prev

iou

sly c

overe

d und

er ‘

US–

Chi

na tr

ade t

ens

ions d

ven by ge

opo

lit

cs an

d tra

de im

bala

nce’

282

Standard Chartered

– Ann

ual Rep

ort 202

sk r

evi

Risk management approach

Macroeconomic considerat

ons

(

Risk ranked according to severit

)

Emerging

risk

Risk trend

since 2020

Context

w these are

mitgated/

nex

t steps

ystall

saton

of inﬂaton

fear

Pot

enti

al imp

act:

High

Lik

elhood:

High

elocity of change:

Moderate

•

In th

e seco

nd par

t of 2021

, several key d

evelop

ed ec

onom

ies

exp

eri

ence

d rates o

f inﬂat

on th

at far exce

ede

d centr

al ban

for

ecas

. Severa

l centr

al ban

ks ha

ve ackn

owle

dge

d their

surprise and a

ltered their stanc

e on monetary policy

, starting

to ra

ise rat

es or si

gnalln

g the

ir willn

gnes

s to do s

•

ere is a r

isk th

at the c

onﬂue

nce of s

uppl

y and dem

and

pre

ssur

es cou

ld ha

ve eff

ect

s on inﬂa

ton th

at are lo

nger-

lasting than

expected

•

e easi

ng of COVID-

19 res

tri

cton

s has cr

eate

d a dema

surge in

developed market

conomi

that have reopened,

and labour supply

shortages have compounded price

pressures

•

ere is st

ill a lac

k of ﬁrm c

onse

nsus w

ithn t

he ind

ustr

y o

som

e key inﬂat

on que

stio

ns, s

uch as w

het

her it is t

rans

itor

y o

unl

ikely to e

ase in t

he ne

ar fu

ture

, caus

ed by exces

s dem

and or

limt

ed sup

ply, and whe

the

r it is limt

ed to s

pecif

c i

ndus

tre

s or

a gen

eral pr

oble

m for th

e econ

omy

. Ri

sng int

eres

t rate

s also

int

rodu

ce a ris

k of sta

gﬂati

on in 2022 w

here e

cono

mic grow

is mu

ted b

ut inﬂa

ton pe

rsi

•

It is

possible that

monetar

y policy tighte

nng

in W

estern

cou

ntri

es cou

ld lea

d to a dep

recia

ton in e

merg

ing mar

ket

currencies

versus the US dol

lar

, increas

ng debt reﬁ

nancng

costs for emer

ging market

economies. Sharp

increases in the

ice of en

ergy a

nd agr

icult

ural p

rodu

cts al

so po

se ri

sks t

eme

rging m

arket

s th

at will f

ace hig

her imp

t cost

s, fe

edin

into hig

her domestic inﬂaton

•

e price

s of ri

y ﬁnanc

al ass

s have b

een ar

tif

cia

lly

sup

por

ted t

hrou

gh the cr

iss f

ollow

ing mul

ti-tr

illon d

ollar

cen

tral ba

nk as

set pu

rcha

ses an

d recor

d low int

erest r

ates

As ﬁ

scal an

d mone

tar

y su

ppor

t is wi

thdr

awn an

d coun

trie

sta

rt to ra

ise in

teres

t rate

s, th

ere is an e

levate

d ris

k of

widespread price c

rections

•

As p

art o

f our st

res

s test

s, a

seve

re stre

ss in t

he glob

eco

nomy as

soc

iate

d with a

sharp slo

w-down w

as assessed

•

Both Group-

wide mana

gement

and T

ded Ri

sk scen

ario

s are

bei

ng devel

ope

d to examin

e the

imp

act of a ra

pid bui

ld-up in

inﬂatonar

y pressure

s around

e world

•

Sove

reign ra

ting

s, ou

tlo

oks an

cou

ntr

y r

isk limt

s are r

egu

larl

monitored with period

c updates

to senior stak

eholder

Adapting to

endemic

9 a

a K

-sha

ped

reco

4,5

Pot

enti

al imp

act:

High

Lik

elhood:

High

elocity of change:

Moderate

•

untr

ies w

ith hig

h vaccina

ton ra

tes are m

ovin

g toward

accepting C

OVID-

9 as endemic. Nev

ertheless, domestic

lices o

n mana

ging th

e spre

ad of th

e vir

us dif

fer va

stl

among nations,

and the longer

-term i

s (

includ

alth an

d ment

al wellb

eing) ar

e still u

ncer

tain

•

e eff

ecti

venes

s of vacc

ines i

s conﬁr

med to d

imnis

h afte

seve

ral mon

ths

, thus t

he po

licy r

esp

onse t

o new wave

s of

inf

ecto

n or new var

iant

s ten

ds to qu

ickl

y rever

t to for

ms of

res

tric

ton, i

nclu

dng lo

ckdown

s, as s

een w

ith th

e recen

Omicron variant

•

VID-

19 c

ontinues to

disrupt economies, how

ever another

not

able e

mergi

ng ef

fect i

s on po

litc

s. The COVID

19 th

eme is

inc

reas

ngly in

ter-woven with b

oth d

omes

tic so

cial un

rest a

the geopolitca

l agenda

•

Dif

fer

ence

s in the p

ace and s

cale of va

ccine r

ollou

ts a

dis

part

ies in ﬁn

ancal r

eso

urces h

ave wi

dene

d the re

cover

gap an

d thre

ate

n a K

-sh

aped g

loba

l recover

, w

here co

untr

ies

or se

ctor

s re

cover at a dif

fer

ent rat

e depe

ndin

g on the

ir abilt

to adapt

to a post

-CO

VID world

•

Eme

rging m

arket

s ha

ve lagg

ed be

hind in t

heir ab

ilt

y to

com

bat th

e pand

emic w

hich ma

y res

ult in lo

nger-ter

eco

nomi

c scar

ring

. Ther

e has b

een lim

ted ﬁs

cal sti

mulu

s for

e third wo

rld, a

nd sho

-te

rm sup

por

t may t

ake prec

eden

over lo

nger-ter

m str

uctu

ral tra

nsfo

rmat

ion

, which i

s espe

ciall

rel

evant fo

r the G

roup

’s fo

otpr

int

•

Deeper structural transformations of

traditonal economic

stem

s are be

ing ob

ser

ved

. A shif

t in pri

ort

ies, p

art

icul

arly

amo

ng youn

ger ge

nera

tion

s, ma

y lea

d to fu

ndam

ental

cha

nges in t

he wor

kfo

rce, inc

ludn

g a per

mane

nt drop in t

lab

our su

pply a

nd a des

ire to m

ove away f

rom tr

adit

onal

industres. V

accine mandates

are causing

domestic tensions,

and m

ay le

ad to lab

our s

hor

tage

s in som

e stat

es or ind

ust

res

•

ere is a r

isk th

at fu

rth

er vari

ant

s or oth

er dis

eas

may emerge

•

As p

art o

f our st

res

s test

s, a

seve

re stre

ss in t

he glob

eco

nomy as

soc

iate

d with a

sharp slo

w-down w

as assessed

•

Sensitve sectors (

e.g. aviaton

and hospitalt

) are regularly

review

ed and exposures t

o these

sectors are activ

managed

as p

art of C

redit R

isk rev

iews

•

xpo

sure

s that c

ould re

sult i

materi

edit imparment

cha

rges an

d ris

k weight

ed as

set

inﬂa

ton un

der st

res

s test

s are

regularly review

ed and actively

managed

•

e Grou

’s prior

t

y rema

ins th

alth an

d safe

ty o

f our cl

ient

and e

mploye

es and co

ntin

uato

of normal operations

lever

aging our robust

Business

Continuty Plans which ena

ble

e major

t

y of our c

olle

ague

s to

work remotely where possible

his th

eme w

as pr

evio

usl

y cover

ed un

der ‘

Uni

nte

nde

d cons

uenc

es of a

ccom

mod

ati

ve mo

net

y pol

icy a

nd th

e ris

k of as

t bub

bles a

nd inﬂ

ato

n’

4 A K-sha

ped g

lob

al rec

over

y o

ccur

s wh

ere co

unt

rie

s or se

cto

rs re

cove

r at dif

fer

ent r

ates f

oll

owin

g a rec

ess

ion

Thi

s the

me was p

rev

iou

sly co

vere

d und

er ‘T

he COVID

9 out

bre

ak and t

he em

erg

ence o

f new d

ise

ase

s’

283

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

Emerging

risk

Risk trend

since 2020

Context

w these are

mitgated/

nex

t steps

Supply chain

dislocatons

Pot

enti

al imp

act:

High

Lik

elhood:

Medium

elocity of change:

Moderate

•

e emerg

ence o

f supp

ly chai

n disr

upt

ons can b

e att

ribu

ted

to a c

ombinaton of demand

and supply factors, some of

whi

ch may p

rove to be t

rans

itor

y w

hile ot

her

s rem

ain mor

ent

renc

hed. A key r

isk is t

hat su

ppl

y chain di

sru

pton

s rais

inﬂa

ton ex

pect

atio

ns on a su

stain

ed ba

sis

, prom

ptin

g centr

ban

ks to t

ight

en mon

etar

y p

olic

•

Pand

emic-rel

ated c

hange

s, su

ch as a su

rge in de

mand f

ele

ctro

nics an

d fu

rnit

ure, h

as res

ulte

d in a run

down o

invent

ore

s. Fur

the

rmor

e, the s

hift t

owards o

nline s

hopp

ing

ten

ds to b

e more im

por

t inte

nsve an

d Asi

a-focu

sed

, ther

eby

exacerbat

ing shippng backlog

•

Seve

re weat

her eve

nts h

ave cau

sed a re

duct

ion in s

uppli

es of

nat

ural g

as and s

ome ag

ricu

ltura

l prod

uct

s. Su

pply o

f good

suc

h as sem

i-cond

ucto

rs ha

s also b

een h

ampe

red by la

bour

lockdo

ns a

nd shortages

licensng

regulations and backlogs

at po

•

As w

ell as di

sru

pton t

o exis

tng ch

ains

, ther

e may b

e a

undam

enta

l shif

t in the s

uppl

y chain

s in the f

ure.

mpani

es ma

y be req

uire

d to set u

p paral

lel sup

ply ch

ains a

con

ting

ences

, as wel

l as mov

ing pro

duct

ion clo

ser t

o the en

use

. S

ome of t

his ma

y als

o be man

date

d by prot

ectio

nst

polices which drive fragmentatio

for strategic industr

es

•

xpo

sure

s that m

ay res

ult in

materi

edit imparment and

increased risk

weighted assets

are closely

oni

tored and

actively managed

•

Sector

s which exhibt

high suppl

chain pressure and v

ulnerabilty

(

g. electronics

) are

regularly

review

ed and exposures t

o these

sectors are activ

managed as

par

t of Cre

dit Ri

sk revi

ews

•

e a

ctive

ly uti

lse Cre

dit Ris

mitgation

techniques includ

ng

credit insurance and collateral

Emerging

markets

sov

eign risk

Pot

enti

al imp

act:

Medium

Lik

elhood:

Medium

elocity of change:

Moderate

•

COVID-

, and th

e resp

onse t

o it, h

ave exace

rba

ted alr

ead

deterioratng ma

rket c

tons

causing liqudi

and

tent

ially s

olven

cy i

ssue

s for a nu

mber o

f the wo

rld

’

poorest countries

•

clinn

g govern

ment r

evenue c

ombin

ed wit

h high

endin

g, ha

s raise

d gover

nmen

t deﬁct

s and de

bt to

unp

rece

dent

ed leve

ls acro

ss all co

untr

y inco

me gro

ups

•

Seve

ral eme

rging m

arket

s ha

ve see

n nega

tive s

overeig

rat

ing and c

ount

y ris

k limt act

ions

, reﬂe

ctin

g the hi

gher leve

of sove

reign r

isk a

s comp

ared t

o pre-p

andem

ic level

•

8 count

rie

s have re

que

sted p

art

icpat

ion in t

he G20 Deb

vice S

uspe

nsio

n Inita

tive (DS

SI), while t

hree c

ount

ries

(Zambia,

Ethiopa,

Chad) have r

quested

debt restructuring

as p

art of t

he Co

mmon Fra

mewor

k beyond D

SSI

•

A sha

rp ti

ghten

ng of ﬁna

ncal co

ndito

ns, p

oss

ibly t

rig

gere

by a ri

se in bo

nd yie

lds in a

dvanc

ed eco

nomie

s or a

deterioraton i

n global risk sentiment, could

push up debt

ser

icng c

ost

s for em

ergin

g marke

•

xpo

sure

s that m

ay res

ult in

materi

edit imparment and

increased risk

weighted assets

are closely

oni

tored and

actively managed

•

e conduct

stress tests and

rtfo

lio rev

iews at a G

rou

cou

ntr

y an

d busi

ness l

evel to

assess the im

pact of

extreme but

plausible e

vent

and manage

the por

tfolio accordingly

•

e a

ctive

ly uti

lse Cre

dit Ris

mitgation

techniques includ

ng

credit insurance and collateral

•

e a

ctive

ly tra

ck the

particpa

tion of

our footprint

cou

ntri

es in G20’s Com

mon

Frame

work Agr

eeme

nt and D

ebt

Ser

vice Suspension Init

ative

for D

ebt T

atme

nts a

nd the

associate

exposure

his t

hem

e was pr

evio

usl

y cove

red u

nder ‘

Ris

e of po

pul

ism a

nd nat

ion

als

m dri

ven by u

nem

ploy

men

t and a sh

ift i

n glob

al su

ppl

y cha

ins’

is th

eme w

as pre

vio

usl

y cover

ed un

der ‘

Ris

ng sov

erei

gn def

aul

t ris

k and p

riv

ate se

cto

r cre

dito

r par

tic

pat

ion i

n the C

omm

on Fram

ewor

k Agre

eme

’

284

Standard Chartered

– Ann

ual Re

por

t 2021

sk r

evi

Risk management approach

Env

ironmental and social consideratons

(Risk rank

d accord

ing to severit

)

Emerging

risk

Risk trend

since 2020

Context

How

these are

mitgated/

steps

Expan

ding

stakeholder

expect

ations f

vironm

ental,

social and

corporate

gov

ernance

SG)

Pot

enti

al imp

act:

High

Lik

elhood:

High

elocity of change:

Fas

•

ere are r

isk

s if the G

rou

p is unab

le to ad

apt to n

reg

ulat

ion qu

ickl

, as we

ll as me

etin

g publ

icly st

ate

sustainablit

y goals and helping client

s transiton

•

Envi

ronme

ntal t

arget

s are b

eing i

ncor

pora

ted in

to many

countries’

domestic policy

, wi

th incr

ased

pressure to

set ambitous sustain

ablity goals

. How

ever,

mplexit

remains in drivng sus

tainablity acros

s diverse markets

which priortise

topics differently

•

Clim

ate ch

ange i

s a facto

r in bio

dver

sit

y los

s, p

ollut

ion

and d

eple

tion o

f reso

urces

. Thi

s pose

s a ris

k to foo

d and

alth s

yste

ms, e

nerg

y secu

rit

y and t

he dis

rup

ton o

supply cha

ins. Understanding

of other en

vironmental

risk

s remains limted

•

stain

able Fin

ance an

d Climat

e Risk c

ontin

ue as a co

foc

us of re

gula

tor

y po

lic

y maki

ng acro

ss all j

urs

dicto

ns,

enhanced b

y COP26-related i

ntiatves. Corporations

are ex

pec

ted to i

ncor

pora

te envir

onme

ntal r

isk

s and

sustainab

lity in thei

r business models. This

exposes

e Grou

p to tra

nsit

on ris

ks an

d emer

ging th

eme

s in

regulator

y c

ompliance

•

Dis

clos

ure re

quire

ment

s are i

ncre

asng e

ach yea

r as

regulators and

her

stakeholders require

greater

tra

nspa

renc

. Th

ere is a c

lear t

rend t

oward ma

ndato

dis

clos

ures w

ith deve

lope

d mar

kets l

eadi

ng the wa

. W

exp

ect t

he reg

ulat

y focu

s to gra

duall

y exp

and beyo

clim

ate to o

the

r enviro

nmen

tal ri

sks

. The

re is ri

sk of

agmen

tati

on of re

quire

ment

s acr

oss r

egion

s over tim

•

e spee

d of tr

ansit

on to m

eet re

quire

ment

s cou

ld be

fas

ter fo

r UK ent

ites t

han th

ose in e

merg

ing mar

ket

and we a

re alre

ady ob

ser

ing fr

agme

ntat

ion in th

pace and

le of adoption around

world

•

Ban

ks ar

e alrea

dy mak

ing co

mmer

cial de

cison

s on

account of

emissons and lack

of credible reduction

tar

get

s. At th

e same t

ime, co

mpan

ies are b

eing

celebrated for

progress around reducing

emis

s

ons

despite the

presence of other

social and go

vernance

sks – hi

ghlgh

ting a t

ensi

on bet

en Envi

ronme

ntal

and Social

isk

sessments. This ‘

carbon-tunnel-vis

on’

com

bine

d with in

crea

sng f

ragm

entat

ion in E

taxonomies,

to unintended co

nsequences

•

The C

VID-

19 pandemic, c

limate change a

geopolitcal

isk

e under

scored

the importance of

supply chain tra

sparency

. This is

creating pressure to

exp

and su

pply c

hain m

etri

cs to in

clud

e grea

ter vi

sbilt

aro

und hu

man ri

ght

s issu

es, c

arbo

n emis

son

s and

governance

factors

•

e re

main co

mmit

ted to b

eing a

responsible bank, minmis

ng our

environmental

impact and

emb

edding

our va

lues through our

strengthened

Positon

Statem

ents for sensitv

ctor

s and a li

st of Proh

ibte

d Activ

ties

that the

Group will

not ﬁnance

•

e ar

e proa

ctive

ly par

ticp

atin

g in

industr

intiatves

and framework

devel

opme

nt on b

oth cli

mate an

bio

dver

sit

, t

o help in

form o

ur int

ern

effo

rts and capabilties. Incre

ased

scr

uti

ny is appl

ied to e

nviron

ment

and s

ocial s

tand

ards in p

rovidn

ser

ices t

o clien

•

taile

d por

tfo

lio revi

ews are

conducted on

an ongoing basis and

act

ion is t

aken whe

re nec

ess

•

Stress tests are

conducted t

o test

resilence to climate

-related risk

s in line

with local

regulator

y requirements

•

The Group has

announced our net

zero p

athway a

nd sp

ecif

c emi

sso

reduction targets for

carbon sensitve

ctor

s. Th

e Gro

’s T

CFD r

epo

include

s more details on Climate Risk

and n

et zero

•

Our Green and

Sustainable Produc

Frame

work

developed

with the

sup

por

t of Sus

tain

alyt

cs

, has be

inf

orme

d by indu

str

y an

d sup

vis

princples

and standards

such as

e Gree

n Bon

d Princ

ples an

d EU

onomy for

sustainable activti

•

e h

ave deﬁn

ed th

ree St

ands t

o use

our u

niqu

e abilt

y to wo

rk acr

oss

boundaries and

connect capi

tal,

ople, i

dea

s and be

st pra

ctice

s to

help address

ome

key socioeconom

challenges and enabl

e a

st transiton

•

e ar

e develo

ping an a

ppro

ach to

furt

her

integrate ESG risk management

acr

oss th

e ERMF

abo

our positon statements:

sc.com/

positonstatement

page

s 455 a

nd 45

for a f

l list o

f our

2022 Sustainablit

y Aspiratons

Social unrest

Pot

enti

al imp

act:

Medium

Lik

elhood:

Medium

elocity of change:

Moderate

•

Gove

rnm

ental r

estr

icto

ns on m

ovemen

t as a res

ult of

e CO

D-

19 p

andem

ic, co

mbine

d wit

h long

-t

erm

trends of

resurgent national

sm and ideology

, hav

heightened

existng

ial tensi

ons

•

accine

mandates are

causing

domestic tensions

and m

ay le

ad to lab

our s

hor

tage

s in som

e stat

es or

industres s

uch as

thcare and aviat

on. There have

als

o bee

n tens

ions i

n some m

arket

s wh

ere lo

ckdown

have been

reintroduced despite

higher vac

cinat

on rates

•

In ad

dito

n, CO

VID

19 ha

s conti

nued t

o exacer

bat

economic equa

lit

, includ

ng reducing

availabli

y or

qua

lit

y of wor

k. C

olle

ctive

, t

hese i

ssu

es have g

iven r

ise

to so

ciet

al dist

urb

ance

s in a numb

er of m

arket

s. T

here

ve also b

een th

emat

ic dis

tur

banc

es conn

ecte

d to a

com

mon cau

se su

ch as Bl

ack Li

ves Mat

ter, or clima

protest

s around high-proﬁle ev

nts such as the COP26

climate summit

•

Long

-t

erm im

pact

s of cl

imat

e chang

e may f

orce ma

rel

ocat

ion in so

me are

as whi

ch coul

d heig

hten lo

cal

tensions

•

e Grou

p is com

mitte

d to ma

nagin

hum

an rig

hts i

mpac

ts th

roug

h our

cial saf

egu

ards in o

ur Posit

on

Statements

•

e Human R

ight

s W

kin

g Grou

p has

developed

an appr

oach to moni

tor,

rep

ort a

nd esc

alate h

uman r

ight

sues t

o our Ma

nage

ment T

m for

con

side

raton w

ith o

ur Gro

’s stra

teg

•

e continue to

suppo

rt our

erations

and co

mmun

ites w

ho are g

reat

imp

acte

d by CO

D-

19 t

hrou

gh vario

aid programmes and ﬁnancng

•

e co

nduc

t por

tfol

io revie

ws at a

oup, cou

ntr

y an

d busi

nes

s level to

assess the im

pact of

extreme but

plausible geopolit

cal events

is th

eme wa

s pre

vio

usl

y cover

ed un

der ‘

cial u

nres

t dri

ven by e

con

omic d

own

tur

ns, w

ate

r cri

ses

, med

ical p

rovi

son a

nd fo

od se

cur

y’

285

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

echnological consideratons

(Risk ranked accordi

ng to severit

)

Emerging

risk

Risk trend

since 2020

Context

How

these are

mitgated/

steps

Data a

digtal

Pot

enti

al imp

act:

High

Lik

elhood:

High

elocity of change:

Moderate

•

Regulator

y requirements and client expectations are

inc

reas

ng in are

as suc

h as dat

a mana

geme

nt, d

ata

pro

tect

ion and d

ata sove

reign

y and pr

ivac

, inc

ludn

e ethic

al use o

f data an

d art

if

cial int

ellge

nce

•

e Grou

p, as well a

s the in

dust

, con

tinu

es to fa

cha

lleng

es to kee

p pace w

ith th

e volu

me of dat

a rela

ted

regulator

y c

ange

. Regulator

y d

ivers suc

h as BC

39’

requirements on effective risk

data aggregation and

risk

rep

ort

ing re

quire e

nhan

ced con

trol

s over dat

a line

age

and q

ualit

y. There h

as be

en incr

eas

ed us

e of power

afforded under data

gisla

ton b

y regulators to impose

punitve

ﬁnes or to demand

data disclosures. Regulatory

dri

ver

s and re

quire

ment

s var

y by ma

rket

, and th

e risk o

fragmentation of

requirements across our

ark

s is

grow

ing over t

ime

•

There are

increased bilatera

l geopolitcal

disputes,

pro

mpti

ng som

e govern

ment

s to i

ssue d

ata sove

reign

gisla

ton, i

n some c

ases e

xtrat

err

itor

al in na

ture

, which

y impa

ct Gro

up pro

cess

es. In s

ome in

stan

ces th

ere is

conﬂic

tng guidance from

dif

ferent

regulator

authorites

withn the

same ju

sd

icton

•

Rapid a

dopt

ion of n

ew tec

hnol

ogies s

uch as B

ig Dat

req

uire

s that we n

eed t

o dete

rmin

e how the G

rou

’

Data Managemen

t P

olic

Standards

and Controls

are

updated

and app

lied

•

As i

nfor

mato

n ass

umes a

n incre

asn

gly f

undam

ent

rol

e and th

e migra

ton to C

loud in

fra

str

uctu

re cont

inue

dat

a is be

comin

g conce

ntra

ted in t

he han

ds of

gover

nme

nts a

nd larg

e pri

vate com

pani

es. D

ata rel

ated

sks n

eed t

o be cont

inuo

usl

y gaug

ed to en

sure G

rou

pro

cess

es and c

ontr

ols are e

ffe

cti

•

ere is an i

ncrea

sng t

rend o

f highl

y organ

ised t

hre

actors, both state sponsored and

through organised

cri

me. T

acti

cs are b

ecom

ing mo

re sop

hist

cated a

att

ack

s more t

arget

ed over t

ime. Ne

w tech

nique

s and

devel

opme

s of weap

ons s

uch as ra

nsomwa

re are

avai

lable a

s a ser

ice, re

ducin

g the co

st of co

mplex

attack

methods

•

Increasing

connectivty is drivng

growth and

new

technologies, but

also increasng

the Group

’s

yber

att

ack su

rfac

e and po

ssib

le ent

y poin

ts fo

r cy

ber

crimnals

•

e Grou

p accep

ts inv

tat

ions f

rom

its regulators to lead on

eci

fc data

and a

rtif

ci

al inte

llgen

ce (AI) rela

ted

industr

consultations. The Group

also

act

ivel

y work

s wit

h AI indu

str

y b

odie

to help

inﬂuence AI regulations

•

e Grou

p acti

vely m

onito

, both i

house and

through external c

ounsel,

regulator

y de

velopments in relation to

data manageme

nt, includ

ng records

management, data

protection and

ivac

, dat

a sovere

ignt

y and A

•

e Grou

p has f

urt

her e

mbed

ded t

existng risk

control framework for

dat

a mana

geme

nt ris

, whic

h has

strengthened and

streamlined risk

oversight

•

ven th

e growt

h of AI to

ols an

d the

inherent risks, the deployment and

release into Group

era

tional

process

es is monitored through an

AI Co

unci

•

ntro

ls fro

m the c

ybe

r and clo

domains are

leveraged for

data

management risks where appropriate

•

The Group esta

blished a dedicated

Dat

a and Pr

ivac

y Ope

ratio

ns te

and m

obils

ed a G

roup

-wide

transformation

programme t

o buil

data managem

ent capabilties and

expertise to ensure compliance

with

data management

gulations

•

e h

ave an inﬂg

ht pro

gramm

e of

wor

k to dri

ve comp

liance t

o BCBS 2

requirements on effective risk

data

aggregation and

risk reporting

•

e co

ntin

ue to de

liver n

ew cont

rols

and c

apabil

ties t

o incre

ase o

ur abil

to ident

, detect, protect

and respond

to IC

S thr

eat

his t

hem

e was pr

evio

usl

y cove

red u

nder ‘

Inc

rea

sed d

ata p

riv

acy a

nd se

cur

y ris

ks f

rom s

tra

tegi

c and w

ide

r use o

f data

’

286

Standard Chartered

– Ann

ual Rep

t 2021

sk r

evi

Risk management approach

Emerging

risk

Risk trend

since 2020

Context

How

these are

mitgated/

steps

w business

structures

channels and

compet

iton

Pot

enti

al imp

act:

High

Lik

elhood:

High

elocity of change:

Fas

•

There is

increasng usage

of partner

shi

ps and alli

ances

by ban

ks to r

espo

nd to di

sru

pton a

nd chan

ges t

o the

industr

articul

arly from ne

w technologies. Thus

par

tne

rsh

ips and a

llian

ces are in

tegr

al to ban

ks’

eme

rging b

usin

ess m

odel

s and val

ue prop

osit

on to

clie

s. Howeve

, th

is als

o expo

ses t

he ban

ks to

thi

rd-par

y risk

s. T

here a

re also n

ew bus

ines

s mod

els

such as

Revenue

Sharing Partnerships that

present

new risks and

dilgence conside

ratons

•

echn

olo

gical ad

vance

s such a

s AI, Ma

chine Le

arn

ing

(ML) and cl

oud-b

ased s

yst

ems ar

e creat

ing ne

opportunites but

also bringng

new c

hallenges. Ther

e is

als

o a ris

k that f

ailur

e to exp

edien

tly a

dapt an

d harn

ess

suc

h tech

nolo

gies wo

uld pl

ace th

e Gro

up at a

competitve

disad

antage

•

As n

ew tec

hnol

ogie

s grow in so

phist

cati

on and b

ecom

further embedded across the

banking and ﬁna

ncal

ser

vices

industr

, ban

s may

become more susc

eptible

to te

chno

log

y-relat

ed ri

sks

. Ban

ks ma

y als

o face

inc

reas

ed ri

sks o

f busi

nes

s mode

l disr

upt

on as ne

products and

technologies c

ontinue to emerge

. There is

als

o pot

entia

l for in

adeq

uate r

isk a

sses

sme

nt for n

and unfamilar activties

•

e healt

h and so

cial im

pact o

f CO

D-

, t

he eco

nomi

fall

out and a

soc

iated inc

reased cyber th

reats hav

impacte

d companies globally,

sulting in signﬁcant

pre

ssur

e on th

e ﬁnanca

l heal

th and s

ecur

y of sup

plie

rs,

vend

ors a

nd oth

er thi

rd par

ties t

hat t

he Gro

up rel

ies on

•

A remote

workforce

introduces new vulne

rabil

ties

whi

ch were e

asie

r to man

age in an o

fﬁce e

nviron

ment

Part

icul

ar focu

s sho

uld be g

iven to h

ighly p

riv

leg

ed or

high-risk roles

•

e Grou

p is sub

ject to s

ignﬁcan

t comp

etit

on fr

loc

al bank

s and o

the

r inter

nat

onal b

anks i

n the ma

rket

in wh

ich it op

erat

es, in

clud

ng comp

eti

tor

s that m

have g

reater ﬁna

ncal and

other resources. In

additon,

e Grou

p may ex

per

ienc

e incre

ase

d comp

etit

on fro

new e

ntran

ts su

ch as ﬁn

tech

s deli

verng d

igtal-

onl

ban

king o

ffe

rin

gs wit

h a diff

eren

tate

d use

r expe

rien

ce,

valu

e prop

osit

on and pr

odu

ct pric

•

In Co

rpo

rate, C

omm

ercial a

nd Ins

titu

ton

al Bank

ing

ere is an in

crea

sng fo

cus on p

roce

ss dig

tisa

ton

to pr

ovide s

calab

le and p

ers

onali

sed s

olut

ions f

cor

pora

te clie

s. The

re are a gr

owing n

umbe

r of

use cases

for blockchai

n technologies

•

In addit

on, digtal assets are

gainng adoption a

linked busines

s models are increa

sng in

rominence.

The

se pre

sen

t mate

rial op

por

tun

ites a

s well as r

isk

•

e monit

or emerg

ing trends,

opportunites and risk

developments in

technology that

e implcati

ons

on th

e bank

ing s

ecto

•

e ar

e enhan

cing ca

pabil

ties t

ensure our systems are

resilent, we

remain relevant and can capitalse

quickly on

technology trends

•

Enhanced digtal capabilties have

en roll

ed ou

t in Con

sume

, Pr

ivate

and Business

anki

ng, particularly

around onbo

arding, sales and

marketi

•

e h

ave devel

ope

d and imp

leme

nted

a risk management appr

ach

add

ress t

he sp

ecif

c ri

sks a

risn

g fro

dig

tal asset activ

ties, as w

ell as

internal guida

nce on

w to leverage

existng risk

management practices

for n

ew acti

vti

es and n

asce

nt ris

•

Strategic partnerships

and allianc

are b

eing s

et up wi

th ﬁnte

chs t

o bett

com

pete i

n the ma

rket

s in whi

ch we

erate. A t

iere

d sec

urit

y mo

del h

been established to ensure

appropriate

curi

ty ove

rsi

ght and g

overn

ance is i

pla

ce for di

ffe

rent t

es of s

trat

egic

partner

ships

•

Third-

Part

y Ris

k management

polices,

pro

cedu

res an

d govern

ance ar

e bein

review

to ensure adequate co

verage

acr

oss all G

rou

p acti

vtie

is th

eme wa

s prev

iou

sly c

overe

d und

er ‘

Thir

d-pa

y de

pen

den

’ and ‘N

ew te

chn

olo

gies a

nd di

gti

sat

on’

287

Standard Chartered

– Ann

ual Rep

t 2021

sk rev

iew and C

api

tal r

eview

Emerging

risk

Risk trend

since 2020

Context

How

these are

mitgated/

steps

alen

t pools of

the future

Pot

enti

al imp

act:

Medium

Lik

elhood:

High

elocity of change:

Moderate

•

COVID-

9 accel

erate

d the m

ove toward

s remo

wor

king f

or emp

loyees

. Whil

e this in

tiall

y enab

led b

ette

saf

y and wa

s foun

d to ben

eﬁt pro

duct

ivt

, i

t also

rai

sed co

ncer

ns aro

und ef

fect

ive mi

tgat

ion and

management of

operational, i

nfor

mat

on and

cyber

securit

, c

ompliance and conduc

t risk

•

e exten

ded na

ture o

f the COVID-19 pand

emic i

con

tinun

g to res

tric

t empl

oyees’ ab

ilt

y to op

erate i

eir pre

ferr

ed hybr

id wor

king l

ocat

ion fo

rmat (

bet

wee

hom

e and of

ﬁce

), caus

ing po

tent

ial ri

sks t

o wellbe

ing,

se of co

llabo

ratio

n and le

arni

ng fr

om oth

ers

•

As d

eman

d for new s

kill

s and cap

abilt

ies gai

mom

ent

um wit

h the ra

pid cha

nge in te

chno

log

y and

new wa

ys of wo

rkin

g, th

e shor

tag

e of key skil

ls is dr

ivn

a war fo

r tale

nt in the ﬁ

nanca

l ser

ces in

dust

. Thi

com

bine

d with cr

oss-b

orde

r mobil

ty r

estr

icto

ns and

gover

nme

nt prot

ecti

onst p

olice

s, w

ill esp

ecial

int

ensf

y c

ompe

tito

n for lo

cal tal

ent

. A comp

elling

pur

pos

e, com

bined w

ith ﬂe

xibl

e and agi

le work

ing

models, upskill

ng and reskill

ng opportunites, and

career mobi

lty options becomes crit

cal to attract,

motivate a

nd retain talen

•

brid-wo

rki

ng at

-s

cale als

o dem

ands co

ncer

ted e

ffo

towar

ds inc

lusve b

eha

viou

rs an

d actio

ns to e

nsur

e a

consistent experience for emplo

yees working remotely

in of

ﬁce or hy

brid

, as well a

s thos

e repr

esen

ting o

dive

e work

force o

r deali

ng wit

h chall

enge

s that

y not be v

isb

le or ma

y be acc

entu

ated w

hen

working remotely

•

The Group pr

activ

ely assesses and

manages people-related

isks; for

example, organisaton, capabilt

con

duct an

d cult

ure, as p

art o

f our

Group risk management framework

and o

ur Peop

le St

rateg

•

e Grou

p unde

rto

ok a Fut

ure of

k chan

ge ri

sk as

ses

sment w

hich

considered operationa

l, compl

iance,

dat

a pri

vacy a

nd cy

ber s

ecur

y ris

in addit

on to

wellbeing, culture

and

leadership

•

e Grou

p has ro

lled o

ut hybr

id-

working options ac

ros

28 markets

and ove

r 73 pe

r cent of c

olle

ague

in th

ese lo

cati

ons ar

e now on ﬂex

working arran

gements

•

llbein

g is one o

f the key pi

llar

s of the

Group

’s

Diverst

y and

Inclusion strategy

and we

have embedded multiple tools

and resources to

suppor

t c

lleague

wellbei

ng. These include

toolkits for

man

ager

s and e

mploye

es, a

conﬁdental

Employee Assistance

Programme, an online programme to

support physical

wellbeing, increased

tra

inng fo

r Ment

al Hea

lth Fir

st Aid

ers

an on-

the-

go mob

ile app a

proacti

trainng in resilence

•

e Grou

p has em

bar

ked on a

mul

ti-year jo

urn

ey focu

sed o

n upsk

illng

and r

e-sk

illng o

ur work

forc

e by

bui

ldng a cu

ltur

e of cont

inuo

learning a

nd lev

eraging technology

to en

able e

mploye

es to bu

ild f

utur

rea

dy sk

ills t

hroug

h conte

nt and

cross-

unctiona

l experiences

Thi

s the

me wa

s prev

iou

sly c

overe

d und

er ‘I

ncre

e in lon

g-te

rm re

mot

e wor

kin

g prov

idn

g new ch

alle

nge

s’

Ris

k hei

ght

ene

d in 2021

Ris

k red

uce

d in 2021

Risk remained

consistent with 20

20 levels

Potential impact

Ref

ers t

o th

e exte

nt to w

hich a r

k event m

igh

fec

t the G

rou

Likelhood

Ref

ers t

o th

e pos

sib

lit

y th

at a gi

ven eve

nt wi

ll occ

elocity of

change

Ref

ers t

o wh

en th

e ris

k even

t migh

t mat

eri

als

Hig

h (

ign

ﬁcan

t ﬁnan

cal o

r non

-ﬁnan

cal r

isk)

High (

almost certain)

st (ris

k of sud

den d

evel

opm

ent

s wi

th lim

te

d tim

e to

respond)

diu

m (

ome ﬁn

anc

al or n

on-ﬁ

nanc

al r

isk)

diu

m (like

ly o

r pos

sib

)

der

ate (mo

dera

te pa

ce of d

evel

opm

ent

s for w

hic

h we

pec

t the

re wil

l be ti

me to r

esp

ond

)

Low

(marg

inal ﬁnanca

l or

non-ﬁnancal

risk)

Low (unli

kely o

r rar

)

Steady (gradua

l or orderly dev

elopment

)

288

Standard Chartered

– Annu

al Rep

ort 202

Capital review

apital

Capital summ

ary

The G

roup’

s capit

al, lever

age and m

inmum re

quirem

ent

s for own f

und

s and eli

gble liab

lites (M

REL

) p

osito

n is mana

ged

wit

hn the B

oard-ap

proved Ri

sk App

etite. T

he Gro

up is well c

apital

sed wi

th low levera

ge and hi

gh levels o

f loss-a

bsor

bing

2021

2020

CET

1 capital

ier 1 cap

ital

16.

otal capital

21.

1.2%

UK lev

erage

5.2%

MREL ratio

31.7%

Ris

-weig

hted a

sse

ts (RW

A) $mill

on

71,233

834

The G

roup

‘s cap

ital, leve

rage an

d MREL pos

itons we

re all

above current requir

ements and B

oard-approved Risk

App

etit

e. For fu

rth

er det

ail see t

he Capi

tal se

ction in t

Sta

ndard Ch

arte

red PLC Pillar 3 Dis

closu

res for F

Y 2021.

The G

roup’

s CE

T1 cap

ital de

crea

sed 28 ba

sis po

int

s to 14.1 per

cent o

f R

A s

ince F

Y2020. Proﬁts we

re more t

han of

et by

dist

rbu

tions (incl

udng or

dinar

y sh

are bu

y-back

s of $0.

5 billon

dur

ing th

e year

), R

A gr

owth

, movemen

ts in re

ser

ves a

nd an

increase in regulatory deductions.

The PR

A up

date

d the G

roup

’s Pillar 2

A req

uirem

ent dur

ing

H2 2021. A

s at 31 De

cembe

r 20

21 th

e Gro

’

s Pi

llar 2

A was

3.4 p

er cent o

f R

, of w

hich at le

ast 1

9 per ce

nt must b

hel

d in CET

1 capi

tal. Th

e Grou

’

s mi

nmum CE

T1 ca

pital

req

uirem

ent was 10.1 per cen

t at 31 De

cembe

r 20

1. Th

e UK

coun

ter c

yclical bu

ffe

r will inc

reas

e to 1.0 pe

r cent fr

cembe

r 20

2; h

owever

, t

he impa

ct on the G

roup’

s minm

T1 cap

ital re

quirem

ent is ex

pect

ed to be i

mmate

ral.

Foll

owing up

date

d guidan

ce fro

m the PR

, Str

uctur

al Forei

xchang

e risk w

ill be cap

italse

d unde

r the Pill

ar 1 appro

ach

for M

arket Ris

k from 3

1 Decem

ber 2021. T

his cha

nge in

regulator

y treatment c

ontributed $3.7 billon

to the reported

Market R

isk R

A at y

-end. T

o avoid

any possible double

count of capital requirements for Str

uctural Foreign Exchange

sk acros

s Pillar 1 an

d Pillar 2

, the PR

A has a

greed t

o rese

t the

Gro

’s Pillar 2

A requ

ireme

nt for th

is spe

cif

c risk

The

re are th

ree po

licy ch

ange

s expe

cted to i

mpact t

calcu

latio

n of CE

T1 an

d or RW

s in 2022

. First

, th

e PRA h

conﬁr

med t

hat so

ware re

lief will b

e exclud

ed fro

m CET

fro

m 1 Janua

y 20

2 w

hich will r

educe C

1 by approx

imate

32 basis

oints. Secondly

, recent i

ndustr

y wide regulatory

chan

ges to al

ign IRB mo

del pe

rfor

mance (the IRB m

odel r

epair

pro

gram

) wi

ll add app

roximat

ely $

4.7 bi

llon of ad

diton

A from 1 J

anuar

y 202

2. Finall

, the i

ntrod

ucton o

standardised rules for c

unterpart

credit risk on

der

iva

tves

and o

ther in

str

ument

s (SA

CCR

) w

ill add ap

proxim

ately

.6 billon o

f addit

onal RW

. The com

binato

n of the I

del rep

air prog

ram and SA-CCR are e

xpe

cted to r

educe

the C

1 ratio by a

pproxim

atel

y 31 basi

s point

s f

rom 1 Janu

2022

. On a pro fo

rma b

asis

, aft

er the de

duct

ion of so

ware

relief and

oth

gulatory changes and adjustments, the

T1 ra

tio as at 1 J

anuar

y 202

2 is 13.

5 per ce

nt.

The G

roup C

1 capita

l ratio at 3

1 Dece

mber 2021 reﬂ

ect

s the

sha

re buy-b

acks o

f $25

4 millon co

mplet

ed in th

e ﬁrst q

uart

of 2021 and $2

50 millo

n compl

eted in t

he thi

rd quar

ter of 2021

The C

1 capita

l ratio al

so incl

udes an a

ccru

al for th

e FY 2021

divdend.

The Board

has recommended a ﬁ

nal divdend for

Y 20

1 of $27

7 mill

on or 9 cent

s pe

r share re

sult

ing in a tot

2021 div

dend of 1

2 cent

s per sh

are, a on

e-third i

ncrea

se on

the 2020 div

dend

. In addit

on, th

e Boar

d has ann

ounce

d a

sha

re buy-b

ack of $7

50 millo

n, the im

pact of t

his wi

ll redu

the G

roup’

s CE

T1 cap

ital by aro

und 28 ba

sis po

int

s in the ﬁr

qua

rter o

f 20

The G

roup e

xpe

cts to m

anag

e CET

1 capit

al dyn

amicall

wit

hn our 13

–

14 p

er cent t

arget ra

nge in su

ppor

t of our ai

of deliver

uture sustainable

shareholder distrbutions.

The G

roup’

s f

ully ph

ased M

REL will b

e 26.4 pe

r cent of RW

fro

m 1 Janua

y 20

. This is co

mpos

ed of a mi

nmum

req

uirem

ent of 2

2.7 p

er cent o

f RW

A an

d the G

roup

’s

combined buffer (

comprisng the capital

conser

vation buffer

the G

-SII bu

ffer a

nd the co

unte

rcycli

cal buf

fer

). The G

roup

’s

MREL ra

tio was 31

.7 pe

r cent of RW

A and 9

.4 pe

r cent of U

levera

ge exp

osure a

t 31 Dece

mber 2021

ring 2021, t

he Gr

oup suc

cessf

ull

y raise

d aroun

d $10.8 b

illon

of MREL

eligble securites from

its holding compan

, Standard

Char

tere

d PL

. Is

suanc

e was acro

ss the c

apital st

cture

incl

udng $2

.8 billo

n of Addito

nal T

ier 1 (A

, $

1.2 b

illon of

ier 2 and aro

und $

6.8 bi

llon of call

able se

nior de

bt.

ring 2021 th

e Grou

p repu

rchas

ed $1 bill

on 7

5 per cen

T1 se

curit

es via a t

ende

r off

er along

side a n

ew 4.

3 per cen

T1 is

sue of $

1.5 b

illon. T

his tran

sact

ion was p

art of t

he Gro

’

pro

active a

pproa

ch to capit

al mana

geme

nt and re

duced t

weigh

ted ave

rage cos

t of the G

roup’

s A

T1 capi

tal ba

se.

The Group successfully completed the formation of

an ASE

hub d

urin

g 20

1 in which o

ur exi

stng bu

sine

sses i

n Malay

sia,

Tha

iland an

d Vietn

am were move

d under o

ur exi

stng

Sing

apor

e subsid

ar

y enti

ty, which it

lf remain

s unde

Standard Char

tered Bank

The G

roup i

s a G-SII

, with a 1

.0 per cen

t G-SII CE

T1 c

apital

buf

fer. The St

andard C

hart

ered PLC G-SII di

sclos

ure is

published at: sc.com

en/

investors/

ﬁnanca

l-resul

The Capital re

w provides an analysis of the Group

’

s capital and le

verage positon,

and requirement

289

Standard Chartered

– Ann

ual Rep

ort 202

sk rev

iew and C

api

tal r

eview

CRD cap

ital base

(

dited)

2021

$millon

2020

$millo

CET

1 capital instrument

s and reserves

Capital instruments and the related share

premium accounts

528

564

Of which:

share premium accounts

3,9

Retai

arni

ngs

24,

968

25,72

Accumulated other

comprehensi

e income (

and other

res

erves

)

11,

805

,68

Non-control

ling interests (

amount allow

ed in consolidated

T1)

201

180

Indepen

dently audited year

end proﬁts

2,34

718

Foreseeable divdends

)

CET1 capital before

regulator

y adjustments

,355

44,3

CET

gulatory adjustments

Additonal

value adjustment

s (

udential va

luation adjustments

)

Int

angib

le as

set

s (

net o

f rela

ted ta

x liabl

)

Def

err

ed tax a

sse

ts t

hat re

ly on f

utu

re proﬁt

ablit

y (

excl

ude

s thos

e aris

ng fr

om tem

porar

y d

iff

erenc

)

(

50)

(

Fair va

lue res

ves r

elate

d to ne

t loss

es on ca

shﬂow h

edge

duct

ion of am

ount

s re

sulti

ng fro

m the ca

lcula

tion o

f exces

s expe

cted l

oss

(580

)

(

Net g

ains o

n liabli

tes at f

air valu

e resu

lting f

rom c

hange

s in own Cr

edit Ri

Deﬁned-beneﬁt

pen

sion

und assets

(

159)

)

Fair va

lue gai

ns ari

sng f

rom th

e inst

tut

ion’s own Cred

it Risk r

elat

ed to de

riva

tve lia

blite

)

xpo

sure am

ount

s wh

ich cou

ld qua

lif

y for r

isk we

ightn

g of 1,

250

(

al reg

ula

tor

y adj

ust

men

ts t

o CET

(

,99

(

CET

1 capital

38,

8,7

Additonal Tier 1 capital (A

strument

6,811

632

T1 regulatory adjustment

(

Tier 1 capital

45,

153

44,3

Tier 2 capital instrumen

521

12,

687

Tier 2

regulator

adjustment

(

Tier 2 capital

491

,657

otal capital

otal

risk-

weighted assets (

unaudited)

271,

233

8,8

CRD capi

tal is

prepared on the regulatory scope of

consolidaton

tain

ed ea

rni

ngs in

clu

des I

FRS 9 ca

pita

l rel

ief (tran

sit

ona

l) of $2

52 mil

lon

, incl

udn

g dy

nami

c rel

ief of $

40 m

illo

The deduction

of intang

ble assets includes

soft

war

e deduction

relief of $1,005

millon availa

ble as

per CRR

‘Quick Fix’

measures. (FY20 software deduction

relief

of $

677 mi

llo

)

290

Standard Chartered

– Annu

al Repo

rt 2021

Capital review

Mov

ent in tota

l capital (

audit

ed)

2021

$millon

2020

$millo

T1 a

t 1 Janu

38,

779

513

Ord

inar

y sh

ares i

ssu

ed in th

e per

iod and s

hare p

remiu

–

Share buy-back

(

242)

Proﬁt f

or the p

eri

2,34

718

Foreseeable divdends

ducted

rom

(49

)

Difference bet

ween

divdend

aid

and foreseeable divdends

03)

Movem

ent in g

ood

will an

d othe

r inta

ngble a

sse

(11

1,04

Foreign currency translation diff

erences

)

Non-control

ling interests

(

43)

Movement

in elig

ble other comprehensive income

(

Def

err

ed tax a

sse

ts t

hat re

ly on f

utu

re proﬁt

ablit

(9)

Decrease

(

increase

) in

cess expected

loss

121

Additonal

value adjustment

s (

udential valuation

adjust

ment

)

(175

)

IFRS 9 t

rans

iton

al imp

act on re

gula

tor

y re

ser

ves i

nclu

dng da

y one

(

142)

xpo

sure am

ount

s wh

ich cou

ld qua

lif

y for r

isk we

ightn

Fair va

lue gai

ns ari

sng f

rom th

e inst

tut

ion’s own Cred

it Risk r

elat

ed to de

riva

tve lia

blite

(

12)

(

Other

(

)

(28)

CET

at 31 December

38,362

T1 a

t 1 Janu

612

Net issuances (

edemptions

)

1,736

)

Foreign currency translation diff

erence

(2)

xcess o

n A

T1 gran

dfat

here

d limt (inel

gible

)

(555)

(565)

T1 at

31 December

791

612

Tie

r 2 capi

tal at 1 J

anu

12,

657

,288

Regulatory amortisaton

,03

)

Net issuances (

edemptions

)

573

)

Foreign currency translation diff

erence

(

181)

257

ier 2 in

elgib

le mino

rt

y int

erest

(81)

Recognit

on of

inelgible A

555

565

Other

(3)

Tier 2

capital at

31 December

491

,657

otal

capital at

31 December

The m

ain movem

ent

s in capita

l in the p

erio

d were:

•

T1 cap

ital de

creas

ed by $0.4 billo

n as ret

ained p

roﬁt

s of $2.

3 billon w

ere mor

e than of

et by shar

e buy-b

acks o

$0.5b

illon, d

istr

butio

ns pai

d and fore

see

able of $

0.8 billon

, forei

gn curr

ency t

rans

latio

n impact o

f $0.7 billo

n, movem

ent in

oth

er comp

rehen

sive in

come of $0.

3 billo

n and an in

creas

e in reg

ulato

y dedu

ction

s and ot

her movem

ent

s of $0.4 billo

•

T1 capi

tal incr

ease

d by $1.

2 billon f

ollowin

g the is

suan

ce of $1

.25 b

illon 4.

75 per ce

nt and $1

.5 bi

llon 4.

3 per c

ent A

T1 se

curit

es

par

tly o

set by th

e repur

chas

e of $1 billo

n 7

.5 p

er cent A

1 secur

ites v

ia a ten

der of

fer an

d the ph

asing o

ut of $0.6 b

illon of

grandfath

ered instr

uments

•

ier 2 capit

al decr

ease

d by $0.2 bil

lon as is

suanc

e of $1.

2 billon o

f new T

ier 2 ins

tru

ment

s and re

cognit

on of ine

lgible A

were m

ore tha

n off

set by r

egula

tor

y am

orti

sato

n and the r

edem

ption o

f $0.5 bil

lon of T

ier 2 dur

ing th

e year

291

Standard Chartered

– Ann

ual Rep

ort 2

021

sk rev

iew and C

api

tal r

eview

Risk

ighted assets b

y business

2021

Credit R

isk

$millon

Operational

Risk

$millon

Market

Risk

$millon

otal

risk

$millon

rpor

ate, C

omme

rcial & In

stit

uto

nal Ba

nkin

125,904

,595

,789

163,

288

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

,504

–

1,2

ntral & o

ther i

tems

0,9

,017

otal

risk-

weighted assets

24,

271

,233

2020 (Rest

ate

Credit Risk

$millo

Operational Risk

$millo

Market R

isk

$millo

otal risk

$millo

rpor

ate, C

omme

rcial & In

stit

uto

nal Ba

nkin

127

,663

21,4

165,091

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

4,755

8,338

–

3,09

ntral & o

ther i

tems

8,02

,49

128

50,650

otal

risk-

weighted assets

20,4

26,800

21,

8,8

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng an

d Priv

ate B

ank

ing an

d Reta

il Ban

kin

g to Co

nsu

mer, Pr

ivat

e & Bus

ine

ss Ba

nki

ng. Pr

ior p

eri

od ha

s be

en res

tat

Risk

-weighted a

sset

s by geograp

hic region

2021

$millon

2020 (Rest

ate

$millo

Asia

170

rica & M

iddle Ea

,14

Euro

pe & Ame

rica

50,

45,

758

ntral & o

ther i

tems

,717

(2,356

)

otal

risk-

weighted assets

271,

233

268

,83

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Gre

ate

r Chin

a & Nor

th A

sia an

d ASE

AN & S

out

h As

ia to A

sia

Prior

period has

been restated

Mov

ent in risk

-weighte

d asse

Credit Risk

Operational

Risk

$millo

Market R

isk

$millo

otal risk

$millo

Commercial,

Corporate &

Institutonal

Banking

$millo

Consumer,

ivat

e &

Business

Banking

$millo

Central &

other items

$millo

otal

$millo

At 31 De

cemb

er 20

123,667

,81

215,6

,62

20,

806

4,0

At 1 Jan

uar

y 2020

123,6

42,

875

215,6

,62

20,8

4,0

set

s grow

th mi

(

)

520

711

–

(

12)

set qualit

2,40

–

Ris

-weig

hted a

sse

ts e

fﬁcen

cies

–

(

–

(

71)

Model, methodology and

policy changes

1,0

–

(

)

Disposals

–

(

)

(

)

(1,0

)

(

159)

(

)

Foreign currency translation

1,42

903

(77)

2,255

–

2,255

her no

n-cre

dit ri

sk movem

ent

–

183

2,4

629

At 31 De

cemb

er 2020

4,755

8,02

20,

26,800

21,593

268,834

set

s grow

th mi

614

350

0,2

–

10,

242

set qualit

37)

)

(

–

(

Ris

-weig

hted a

sse

ts e

fﬁcen

cies

)

(

02)

–

(

)

Model, methodology and

policy changes

–

(

,70

)

–

(

–

,06

(1,636

)

Disposals

–

Foreign currency translation

85)

(1,243)

–

her no

n-cre

dit ri

sk movem

ent

–

316

515

At 31 De

cemb

er 2021

125,904

0,9

24,

271,

233

ollo

win

g a reo

rgan

isa

ton o

f cer

tain c

lie

nts

, th

ere ha

s be

en a re

clas

sif

c

atio

n of ba

lan

ces ac

ros

s clie

nt se

gme

s. 1 Ja

nuar

y 2020 b

ala

nce

s have b

een r

est

ate

llow

ing t

he Gr

oup’s chan

ge in or

gan

isat

on

al str

ture

, the

re ha

s bee

n an int

egr

ato

n of Co

orat

e & Ins

tit

uto

nal B

ank

ing an

d Co

mmer

cial B

ank

ing t

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng an

d Priv

ate B

ank

ing an

d Reta

il Ban

kin

g to Co

nsu

mer, Pr

ivat

e & Bus

ine

ss Ba

nki

ng. Pr

ior p

eri

od ha

s be

en res

tat

292

Standard Chartered

– Ann

ual Rep

ort 2

021

Capital review

Moveme

nts i

n risk-weight

ed as

A increa

sed by $2

.4 billon

, or 0.

9 pe

r cent fr

31 De

cembe

r 20

20 to $27

2 billon

. This was m

ainly d

ue to

incr

ease

s in Mar

ket Risk RW

A of $2.9 billon and O

pera

tiona

Risk RW

A of $0.

3 billo

n, par

tly o

set by a de

crea

se in Cre

dit

Risk RW

A of $0.9 billon.

Corporate, Commercial & I

nstitut

onal

anking

Cre

dit Risk RW

A dec

reas

ed by $1.

8 billon t

o $125

9 billo

main

ly due t

•

$2.

1 billon decrease from foreign curre

ncy translation

•

$1.

5 billo

n decre

ase d

ue to imp

rovement i

n asse

t quali

reﬂecting clien

t upgrades and action

s concerning specif

c

stage 3 exposures

•

$0.4 billo

n decre

ase f

rom RW

A efﬁce

ncies re

latin

g to

unsecure

d reco

ver

ies

•

$2.

2 billon i

ncrea

se due t

o ass

et balan

ce growt

h mainl

fro

m Lendin

g in Asi

Consumer

, Priv

ate & Business Banking

Cre

dit Risk RW

A dec

reas

ed by $2.0 billo

n to $42

.7 billo

main

ly due t

•

.7 billon d

ecre

ase f

rom a mo

del chan

ge ben

eﬁt in Korea

•

$1.

2 bi

llon decrea

se from foreign currency translat

ion

•

$0.7 bil

lon decr

eas

e due to im

provemen

t in ass

et qual

acro

ss ret

ail por

tfo

lios in A

sia

•

.6 billo

n incre

ase in as

set b

alance g

rowth in A

sia.

Central & other items

Cen

tral & ot

her it

ems RW

A mainl

y relat

e to the T

rea

sur

Mar

kets li

qudit

y po

rtf

olio, eq

uit

y investm

ent

s and cur

rent &

def

erre

d tax as

set

Cre

dit Risk RW

A incr

ease

d by $2.

9 bi

llon to $51

.0 billon mai

nly

due to

•

4.4 billon i

ncrea

se fr

om ass

et bal

ance grow

th pri

marl

y in

Europ

e and th

e Amer

icas an

d Afr

ica and th

e Middl

e East,

part

ially off

set by asset balance de

cline in Asia

•

$0.

3 billon in

crea

se rela

ting to s

oft

war

e intang

ble as

set

with a corresponding

deduction to CET1

•

$1.1

billon decreas

e from foreign currency translatio

•

$0.7 bil

lon decr

eas

e due to ef

ﬁcenci

es rela

ting to

covere

d bon

Market Risk

otal Ma

rket Risk RW

A inc

reas

ed by $2.

9 billo

n, or 14 pe

r cent

fro

m 31 Dec

ember 2020 to $24.

5 billon

The i

ncrea

se was ma

inly du

e to the i

mpact o

f updat

ed PR

guid

ance ($2 billon

). Str

uct

ural For

eign E

xchang

e risk o

.7 billon i

s now tre

ated a

s Pillar 1 ma

rket ri

sk RW

. Prev

ious

thi

s was reco

gnise

d enti

rely as Pi

llar 2

A ris

k. Thi

s incre

ase was

et in par

t by the $1

.6 billo

n bene

ﬁt of PR

A perm

isso

n to

con

solid

ate mar

ket risk RW

A for S

CB Mala

ysia B

erha

d, SCB

Tha

i PCL and SC

B (Vie

tnam

) L

td. Co

nsoli

daton r

eﬂect

dive

rsﬁcat

on and th

us give

s lower RW

her movem

ent

s contr

ibut

ed a $0.

9 bi

llon incr

ease d

ue to:

•

$1.1 billon i

ncrea

se in St

andard

ised A

pproa

ch Spe

cif

c

Inte

rest Rat

e Risk RW

A due to in

crea

sed cre

dit spr

ead

positons

•

$1.0 b

illon incr

ease i

n Inter

nal Mo

dels A

pproa

ch (IMA)

str

esse

d V

aR RW

A due to in

creas

ed IMA p

osito

•

$1.0 b

illon de

creas

e in IMA V

aR RW

A wit

h redu

ced

mar

ket volat

ilt

y in the on

e-year hi

stor

cal rates a

pplie

for d

aily V

•

$0.5 b

illon de

crea

se in IMA Ri

sks n

ot in V

•

$0.

3 billon o

f other s

mall in

creas

es.

Operational Risk

eratio

nal Ris

k R

A in

crea

sed by $0.

3 billo

n, or 1 pe

r cent

fro

m 31 Dec

ember 2020 to $2

1 bi

llon. Th

is was mai

nly du

to an in

crea

se in aver

age inco

me as me

asur

ed over a roll

ing

thr

ee-year t

ime hor

izon, w

ith hig

her 2020 incom

e repla

cing

lower 2017 in

come.

293

Standard Chartered

– Annu

al Rep

ort 202

sk rev

iew and C

api

tal r

eview

UK lev

rage rat

The G

roup’

s UK leve

rage rat

io was 4.9 per cen

t at FY

, which wa

s above the cu

rren

t minmum r

equir

ement o

f 3.7 p

er cent

The l

everage r

atio was 2

9 basi

s point

s lower t

han F

Y20. Leverage e

xpos

ure incr

eas

ed by $7

6 billo

n from a

n incre

ase in on-

bal

ance she

et ite

ms (

excludi

ng der

ivatve

) of $58 bi

llon, of

-ba

lance sh

eet it

ems of $

11 billon an

d a secur

ites ﬁ

nancng

tran

sact

ions ad

d-on of $9 b

illon. En

d point T

ier 1 i

ncrea

sed by $1

3 billon as C

1 capita

l redu

ced by $0.4 billo

n and the

suance o

f $1.

25 bill

on 4.7

5 per cen

t and $1.

5 billo

n 4.

3 per cen

t A

1 sec

urit

es comp

leted d

urin

g the yea

r was par

tly of

set

by the r

epurch

ase o

f $1 billon 7

.5 pe

r cent A

T1 se

curi

tes vi

a a tende

r off

In Oct

ober 2021

, the PR

A pub

lishe

d a polic

y sta

temen

t outli

nng chan

ges to t

he UK lever

age rat

io fram

ework

. The m

inmum

levera

ge rati

o requi

remen

t applica

ble to t

he Gro

up was mai

ntane

d at 3.

25 per c

ent. Ad

diton

al buf

fer

s bas

ed on th

coun

terc

yclical an

d G-SII b

uff

ers ar

e set at 35 p

er cent o

f their r

isk-

weigh

ted eq

uivale

nt and mu

st be me

t with 1

00 per c

ent of

T1 cap

ital. Fir

ms tha

t breac

h their l

everage ra

tio bu

ffer

s wil

l not fac

e any capital di

strb

utio

n restr

icto

ns. Th

e expo

sure val

of de

rivat

ve contr

act

s will be b

ase

d on the st

andar

dised a

pproa

ch to Co

unter

par

y Credit Ri

sk, w

hile cen

tral b

ank rese

ves

cont

inue to b

e exclud

ed fro

m the UK l

everage r

atio ex

posu

re mea

sure. Th

e rul

es came in

to force o

n 1 Janu

y 20

. The imp

act

fro

m imple

ment

aton of t

he new leve

rage r

ules i

s estim

ated t

o be imma

tera

UK lev

rage rat

2021

$millon

2020

$millo

ier 1

capit

al (

transitonal)

45,

153

44,3

Addit

onal T

r 1 capit

al subj

ect to p

hase o

(557)

(

Tie

r 1 capi

tal (end po

int)

596

43,27

Der

ivat

ve ﬁnan

cal ins

tru

ment

Derivatve cash

collateral

,759

Securites ﬁ

nancng transac

tions (

)

88,418

Loan

s and ad

vance

s and ot

her as

set

0,2

otal

on-balance sheet

sets

Regulatory consolidaton adj

ustm

ents

(

0,059)

Derivatves adjustments

Derivatves

netting

(34,

819)

(

44,2

57)

Adjustments to cash

collateral

(17

,86

(21,278

)

Net writt

en credit protection

1,53

1,28

Pote

ntial f

ure ex

posu

re on de

riva

tves

50,8

otal

rivatves

adjustm

ents

(295)

(

41)

Counterpart

y Risk le

verage exposure

easure for

13,724

,96

Off

-balance sheet items

128

167

Regulatory deductions from T

ier 1 capi

tal

(

521)

UK lever

age ex

pos

ure (end po

int)

911,140

UK lever

age r

ati

o (

d poin

5.2%

UK le

verage exposure quarterly

average

UK le

verage ratio quarterly av

erage

.0%

Countercyclical

leverage ratio

uffer

0.1

0.0%

G-SII additonal lev

erage ratio buffer

0.4%

.4%

Tier 1 cap

ita

l (

end p

oin

t) is adj

ust

ed on

ly for g

ran

dfat

her

ed Add

ito

nal T

er 1 in

str

ume

Includes adjust

ment for qualifyng central bank claims

Standard Chartered

– An

nual Re

por

t 2021

Finan

cal st

ateme

nts

296

Independent auditor

’

s report

308

Con

solidated income

atement

309

Consolidated statement of comprehensive income

310

Con

solidated b

alance sheet

311

Con

soli

dated s

tatem

ent of c

hange

s in equi

312

Cash ﬂ

ow state

ment

313

ompany balance sheet

314

ompa

ny statem

ent of ch

ange

s in equit

315

Notes to the ﬁna

ncal stateme

nts

oes

from

streng

Mox, our dig

tal banking ser

vice for Hong Kong

-based

customers, went from strength to strength in 2

021 and

now has more than 2

,000 user

s – more than triple

the ﬁgure for 2

0. The app, whi

ch includes a Go

als

and Savings Calculator

, helps c

ustomers better manage

their money

. A new feature called Fli

p allows customers

to instantly switch bet

ween debi

t and credit payments

using the same Mox c

ard and number

Rea

d mor

e onli

ne at

.mox.com

Financal statements

295

Standard Chartered

– Ann

ual Rep

ort 2

021

296

Standard Chartered

–

nual Re

por

t 2021

Financal state

ments

Independent auditor’

s report

Opinon

In our opi

non:

•

the ﬁnanc

al statements of

Standard Chartered

C (

the

‘Co

mpany’

)

, i

ts su

bsidar

ies (

tog

ethe

, th

e ‘Grou

’) an

d the

Group

’

s interest in associates and jontly c

ont

rolled entit

(

geth

, t

he ‘Gr

oup ﬁnan

cal stat

emen

ts’) g

ive a tr

ue and

fair v

iew of th

e state o

f the G

roup

’s and of t

he Com

pany’s

fair

s as at 31 De

cemb

er 20

21 an

d of the G

roup

’s proﬁt f

the ye

ar the

n ende

•

the Group ﬁnancal

statem

ents have been properly

prepared in ac

cordance with UK adopted in

ternatonal

accountin

g standards (IAS) and Intern

ational Financal

Repo

rtin

g Stand

ards (IFR

S) as adop

ted by th

e Europe

Unio

n (EU IFRS);

•

the Company ﬁnanc

al statement

s hav

e been properly

prep

ared i

n accord

ance wit

h UK ado

pted I

AS as ap

plied in

acco

rdance w

ith se

ction 4

08 of t

he Com

panie

s Act 2006;

and

•

the ﬁ

nancal st

atem

ent

s have be

en pre

pared i

n accord

ance

wit

h the re

quirem

ent

s of the C

omp

anies Act 200

e have

audited the ﬁna

ncal stateme

nts of Standar

Char

tere

d PL

C (

he ‘Co

mpany

’) and it

s sub

sidar

ies

(

geth

, t

he ‘Gr

oup

’) f

or the ye

ar ende

d 31 Dec

embe

r 20

which compris

Group

Parent company

Consolidated income

sta

teme

nt for t

he year e

nde

31 December 2

021;

Company cash

ﬂow statement

for t

he year e

nde

d 31 Dec

embe

2021

;

Consolidated state

ment of

comprehensive income

for the

year e

nde

d 31 Dece

mbe

r 20

mpany b

alance s

hee

t as at

31 December 2

021;

Consolidated bala

nce sheet as

at 31 D

ecem

ber 2021;

Company

statement of changes

in eq

uit

y for t

he year t

hen

ended;

and

Consolidated state

ment of

cha

nges in e

quit

y f

or the ye

then ended;

notes 1 to 40

, where

rel

evant to t

he ﬁnan

cal

statements, includ

ng a

summar

y of

signﬁcant

accountin

g polices.

nsol

idate

d cash ﬂ

sta

teme

nt for t

he year t

hen

ended

Rela

ted no

tes 1 to 4

0 to th

ﬁnanc

al statements, includng

a summary of signﬁ

cant

accountin

g polices;

Information

marked as

‘audit

’ with

n the Di

recto

rs’

remuneration report from

ge 141 to 180; an

Ris

k review a

nd capi

tal rev

iew

disclosur

es marked as ‘

audite

d’

om pag

e 200 to 29

The ﬁ

nancal re

por

ting f

ramewor

k that h

as be

en appli

ed in

the

ir prep

aratio

n is appl

icable l

aw and UK a

dopt

ed IAS

, and

as re

gard to t

he Gro

up ﬁnan

cal stat

ement

s, E

U IFRS, an

d as

reg

ards th

e Comp

any ﬁnanca

l state

ment

s, a

s applie

d in

acco

rdance w

ith se

ction 4

08 of t

he Com

panie

s Act 2006.

Basis for opinon

e conducted our

audit in accorda

nce with International

Sta

ndard

s on Auditn

g (UK) (IS

As (UK

)

) and appli

cable la

Our responsiblit

der

hose sta

ndards are

urther

des

crib

ed in th

e Auditor

’s respo

nsiblit

es for t

he aud

it of the

ﬁnan

cal stat

ement

s se

ction o

f our rep

ort

. W

e be

lieve tha

t the

aud

it evide

nce we have o

btain

ed is su

fﬁcent a

nd appro

pria

to pro

vide a basis for

our opinon.

Independence

e are i

ndepe

nden

t of the G

roup an

d Comp

any in

acco

rdance w

ith th

e ethic

al requi

remen

ts th

at are re

levant to

our a

udit of t

he ﬁnan

cal stat

ement

s in th

e UK

, inclu

dng the

Financal R

epor

ting Council

’

s (‘FRC’) Ethical St

andard as

appl

ied to li

sted p

ublic in

teres

t entit

es, an

d we have f

ulﬁlle

our o

ther e

thical r

espo

nsiblit

es in acc

ordanc

e with t

hese

requirement

The n

on-au

dit ser

ices pr

ohibte

d by the FRC

’

s Et

hical

Sta

ndard wer

e not prov

ided t

o the G

roup or t

he Com

pany

and we re

main in

depen

dent o

f the G

roup and t

he Co

mpany

in co

nducting

the audit.

Conclusions relating to going concern

In audi

tng the ﬁna

ncal

statements, we have

concluded that

the d

irecto

rs’ us

e of the g

oing co

ncern b

asis o

f accou

nting in

the preparation of the ﬁ

anc

al statement

s is

appropr

iate

r evaluati

on of th

e direct

ors’ a

sses

sme

nt of the g

roup an

Company’

s abilty to continue

to adopt the going concern

basis of accounting

included:

•

Understanding management

’

s going concern assessment

pro

cess

, inclu

dng th

e impact o

f the COVID-

19 p

andem

-1

)

;

•

Review o

f the Co

rpor

ate Plan

, inclu

dng as

sess

ing th

reasonableness of assumptions and historc

al forecasting

accuracy;

•

Assessing the results of

management

’

s stress testi

includng

consideraton of princ

and emerging risks, on

fun

ding, liqudit

y and regulator

y capital;

•

viewng c

orrespondence with prudential regulators and

aut

hori

tes fo

r matte

rs th

at may i

mpact t

he goin

g conce

assessment; and

•

Eva

luating the appr

opriateness of

the going conce

dis

closu

re inclu

ded in n

ote 1 to t

he ﬁnanc

al state

ment

sed on t

he work we h

ave pe

rfor

med, we h

ave not i

dentﬁe

any mat

erial u

ncer

taint

es rela

ting to eve

nts o

r condit

ons

tha

t, ind

vidu

ally or co

llect

ively, may cas

t signﬁcan

t doubt

on th

e Grou

p and Co

mpany

’

s abilt

y t

o contin

ue as a go

ing

conc

ern fo

r a peri

od of t

wel

ve month

s from 1

7 Febr

uar

y 2022

In rel

ation t

o the G

roup an

d Comp

any’s repor

ting o

n how they

have a

pplie

d the UK C

orp

orate G

overn

ance Co

de, we ha

not

hing ma

teri

al to add o

r draw at

tenti

on to in re

latio

n to

the d

irecto

rs’ st

ateme

nt in th

e ﬁnancal s

tatem

ent

s abou

whether the directors considered

it appropriate

to adopt the

going concern basis

of accounting.

Independent A

itor

’

eport

to th

e mem

bers of St

and

ard C

har

red P

297

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

Our responsiblit

and the responsiblites

of the dir

ectors

wit

h resp

ect to go

ing con

cern are d

escr

ibed i

n the rel

evant

ction

s of this r

epor

t. Howeve

, be

cause n

ot all f

utu

re event

or con

diton

s can be pr

edict

ed, thi

s state

ment i

s not a

gua

rante

e as to th

e Grou

’

s an

d Comp

any’s abilt

y to

cont

inue a

s a going co

ncer

Overview of

our audit approach

Audit scope

•

e p

erf

orm

ed an au

dit of th

e comp

lete

ﬁnan

cal inf

orm

aton o

f 21 comp

one

nts i

n 14

cou

ntri

es and a

udit pr

oced

ures o

n spe

cif

c

bal

ance

s for a f

urt

her 7 com

pon

ent

s in 4

countries.

•

e compo

nent

s wh

ere we p

erfo

rme

d ful

l or

ecif

c au

dit pro

cedu

res acc

ount

ed for 8

of ab

solu

te adj

uste

d proﬁt b

efor

e tax (PBT

)

asur

e used t

o calcu

late m

ater

ialt

, 89

of absolute

operating income

and 96

% of

ota

l asset

Key a

matters

•

Credit imparm

ent

•

User access management

•

Impairm

ent of non-

ﬁnancal asset

s (

Aircraf

odw

ill and I

nvestm

ent

s in sub

sidar

undertakings

)

•

sis of a

ccoun

ting a

nd imp

arme

ses

smen

t of Chin

a Boha

i Bank (In

tere

st in

•

alu

atio

n of ﬁnan

cal in

str

umen

ts he

ld at fa

valu

e with h

igher r

isk ch

aract

eri

stcs

Materialt

•

veral

l group m

ater

ialt

y of $

195m wh

ich

rep

rese

nts 5% o

f adju

sted PBT

An ov

view of the s

cope of th

e Company and

Group audits

ailorng the scope

r asse

ssm

ent of au

dit ris

k, ou

r evaluat

ion of ma

teri

alt

y and

our a

llocat

ion of p

erfor

manc

e mater

ialt

y det

ermi

ne our au

dit

sco

pe for e

ach comp

onen

t withn t

he Gro

up. T

aken toge

ther,

this enables us

to form an opin

on on the c

solidated

ﬁnan

cal stat

ement

s. We took in

to accou

nt the s

ize, ris

proﬁl

e, the o

rganis

aton of t

he grou

p and ef

fect

ivene

of G

roup con

trol e

nvironm

ent

, change

s in the b

usine

envir

onmen

t and ot

her fact

ors s

uch as m

ateri

al iss

ues or

mis

stat

ement

s no

ted in pr

ior pe

riod w

hen as

ses

sing t

he level

of wor

k to be p

erfo

rmed a

t each co

mpon

ent.

In as

ses

sing th

e risk o

f mate

rial mi

ssta

temen

t to the

con

solid

ated ﬁn

ancal st

ateme

nts

, and to e

nsure we h

adequate quantitatve

coverage of

signﬁcant

account

in the

ﬁnan

cal stat

ement

s, o

f the 352 r

epor

ting co

mpon

ent

s of the

Gro

up, we sel

ected 2

8 compo

nent

s in 18 co

untr

ies cover

ing

entites

withn Bangladesh,

erman

, Hong K

ong, India,

Indone

sia, Ireland, Japan, Kenya, Mainland China, Malay

sia,

Nige

ra, Pak

istan

, Singap

ore, S

outh Kore

a, T

aiwan, U

nited

Arab E

mirate

s, Unit

ed Kin

gdom

, and th

e United S

tate

s of

America, which represent the princ

usiness units withn

the G

roup. T

he deﬁnt

ion of a co

mpon

ent is ali

gned w

ith th

str

uct

ure of th

e Grou

’

s co

nsol

idato

n syst

em, t

ically t

hese

are eit

her a br

anch, gr

oup of b

ranche

s, gro

up of sub

sidar

ies, a

sub

sidar

y or a

n asso

ciate.

e took a centralis

ed approach to auditng cer

tain process

and co

ntrol

s, as we

ll as the s

ubst

antive t

estin

g of spe

cif

c

bal

ances

. This in

clude

d audi

t work over G

lobal B

usin

ess

Ser

vice

s, Commercial, Co

rporate and Inst

itutonal Bank

ing,

Credit Impair

ment and T

chnology.

Of t

he 28 comp

onent

s se

lecte

d in 18 co

untr

ies, we p

erfo

rme

an au

dit of th

e comple

te ﬁnan

cal infor

mat

on of 21

comp

onen

ts in 14 c

ountr

ies (‘

full s

cope co

mpon

ent

s’) whi

were s

elect

ed ba

sed on t

heir si

ze or risk c

haract

eris

tcs

. For the

rem

ainng 7 com

pone

nts i

n 4 count

ries (‘spe

cif

c scop

components’),

we performe

audit procedures

on specifc

acco

unt

s withn t

hat com

pone

nt that we c

onsid

ered h

ad the

pot

enti

al for th

e great

est imp

act on th

e signﬁcan

t accoun

in th

e ﬁnancal s

tatem

ent

s eith

er beca

use of t

he size o

f thes

accounts or their risk p

roﬁle.

The reporting component

s where w

e perfor

med audit

pro

cedur

es accou

nted f

or 81% (2020: 86

%) of the G

roup

’s

abs

olute a

djust

ed PBT

, 89% (2020: 89%) of the G

roup’

abs

olute o

pera

ting in

come and 96% (20

20: 97%) of the

Gro

’s total a

sset

s. F

or the cu

rrent ye

, t

he fu

ll scop

comp

onen

ts co

ntrib

ute

d 7

4% (2020: 82%

) o

f the G

roup

’s

abs

olute a

djust

ed PBT

, 81% (20

20: 82%) of the G

roup

’s

abs

olute o

pera

ting in

come and 8

8% (2020: 90%) of the

Gro

’s total a

sset

s. T

he spe

cif

c scop

e comp

onent

cont

ribu

ted 7% (

20: 4%

) o

f the G

roup

’s abso

lute a

djuste

PBT

, 8% (20

20: 7

) o

f the Gr

oup

’s absol

ute op

erati

ng incom

and 8% (2020: 7%) of the G

rou

’

s to

tal as

set

s. Th

e audit

scope of

thes

components may not have

included tes

ting

of all s

ignﬁcant ac

count

s of th

e comp

onent b

ut will h

ave

cont

ribu

ted to t

he covera

ge of signﬁc

ant acco

unt

s teste

for t

he Gro

up.

Of the remainng

324 c

omp

onents that together represent

19% o

f the G

roup

’s abso

lute ad

juste

d PBT

, n

one are

ind

vidu

ally gre

ater th

an 1.7

% of the G

roup’

s abs

olute

adju

sted PBT

. For t

hese co

mpon

ent

s, we pe

rfor

med o

ther

pro

cedur

es at a Gr

oup level w

hich inc

lude

d, per

form

ing

anal

ytic

al review

s at a Gro

up ﬁnan

cal stat

ement li

item l

evel, te

sting e

ntit

y level c

ontro

ls, p

erfor

ming a

udit

proced

ures on the centralise

d shared ser

vice centre

s, testing

of consolidat

on journals and

intercompan

y elimnations,

inq

uring w

ith lo

cal comp

onent t

eams a

nd ass

essi

ng the

outcome of prior y

ear local statutor

y audi

ts to respond to

any pot

enti

al risk

s of ma

teri

al miss

tatem

ent to t

he Gro

ﬁnan

cal stat

ement

s. T

he char

s below ill

ustra

te the cove

rage

obt

ained f

rom th

e work p

erfo

rme

d by our aud

it team

Abs

olu

te adju

ste

roﬁt be

fore ta

ull scop

e compo

nen

7% Sp

ecif

c sco

pe comp

one

nts

the

roce

dur

Abs

olu

te oper

atin

g incom

81% Full sco

pe comp

one

8% Spe

cif

c scop

e comp

onen

11% Oth

er proc

edu

res

ota

sse

ll scop

omp

onen

8% Spe

cif

c scop

e comp

onen

the

pro

ced

ures

298

Standard Cha

rtered

– Ann

ual Re

por

t 2021

Financal state

ments

Independent auditor’

s report

ange

s from t

he pr

ior year

e as

ses

sed ou

r 20

21 au

dit scop

e wit

h consid

erato

n of

histor

y or

exp

ectation

of unusual or complex

nsactions and

potential for or history of material misstatement

s. W

e also

kept ou

r audit s

cope un

der rev

iew thro

ugho

ut the ye

A tot

al of 5 comp

onen

ts in 4 co

untr

ies wh

ich were pr

eviou

sly

incl

uded i

n our pr

ior year a

udit sco

pe, th

at toge

ther r

epres

ent

3% of t

he pri

or year abs

olut

e adjus

ted PBT have n

ow bee

exclu

ded fr

om the G

roup a

udit sco

pe in th

e curre

nt year

based on our updated risk assessment.

Ban

glade

sh whic

h was a fu

ll scop

e compo

nent in t

he pri

year i

s design

ated a

s a spe

cif

c scope c

ompon

ent in t

current year

sed on

our updated risk asses

sment.

Inv

olvement

wit

component teams

In est

ablis

hng our ove

rall appr

oach to t

he Gro

up aud

it, we

det

ermin

ed th

e ty

pe of wo

rk tha

t need

ed to b

e under

taken

at ea

ch of th

e compo

nent

s by us, a

s the G

roup au

dit

engagement team, or b

y component auditors from other

Y global n

work ﬁr

ms and a

noth

er ﬁrm op

erat

ing und

our instructon.

Of t

he 21 f

ull scop

e comp

onent

s, a

udit pr

ocedu

res were

per

for

med on 2 o

f thes

e (

cludn

g the au

dit of th

e Comp

any

)

dire

ctly by th

e Gro

up audit e

ngag

ement t

eam (E

Y Londo

)

in th

e Unite

d Kingd

om. For t

he 7 sp

ecif

c scop

e comp

onent

whe

re the wo

rk was p

erfo

rmed by co

mpon

ent au

ditor

s, we

determined the appropriate level

of involvement to

able

us to d

eter

mine th

at suf

ﬁcent au

dit evid

ence ha

d been

obt

ained a

s a basi

s for ou

r opinon o

n the G

roup as a w

hole.

In add

iton

, the Gr

oup ha

s centra

lise

d proces

ses an

d cont

rols

over key area

s in it

s share

d ser

ce cent

res. M

ember

s of t

Group audit engagement team pro

vide direct o

ver

sight,

revi

ew and coo

rdinat

on of ou

r share

d ser

ce centr

e audit

Our programme of

planned vists to components and shared

ser

ice cen

tres in s

everal loc

ation

s was imp

acted by t

he tra

vel

restrictons and other imposed gov

nment measures which

are st

ill in pla

ce fro

m the pr

ior year a

s a resul

t of the o

ngoin

ID-

19 p

andem

ic. Th

e audit wa

s perf

orm

ed remo

tely

at bo

th Gro

up aud

it enga

gemen

t team an

d compo

nent

loc

ation

s supp

orte

d thro

ugh the u

se of E

Y sof

ware

collaboration pla

forms for

he secure

and timely deliver

of re

ques

ted au

dit evid

ence. W

e al

so und

erto

ok vir

tua

engagement with local audit teams a

management.

These virtual meetings

involv

discussng the a

udit

approach with the component and

ared

ser

vice centres

tea

m and any is

sues ar

isng f

rom th

eir work

, me

eting w

ith

local

management, attendi

ng meetings

with the k

ey audit

partner

s of

aterial c

omp

onents, attending interm and

clo

sing me

etin

gs and pe

rfor

ming r

emote r

eviews o

f key audit

workpapers

Furthermore, the Senior Statutory Auditor visted

Sing

apor

e as it is th

e locat

ion wh

ere signﬁc

ant elem

ent of

the wo

rk on si

gnﬁcant r

isk are

as such a

s credi

t and ﬁnan

cal

instrument v

aluation is

performed. He attended

eti

ngs

with management and

eld

discus

s

ons on the audit

appr

oach an

d any issu

es ari

sng fro

m the wor

k of th

Sing

apor

e compo

nent an

d Share

d Ser

ice Cen

tre te

ams.

As a r

esult o

f CO

VID

, we main

taned co

ntinu

ous

inv

lvement

and oversight of the component teams. This

includes the Group audit

engagement partner

s and

eni

mem

ber

s of the p

rimar

y a

udit te

am incr

easng r

egul

interactons through c

alls and video conferences during

vari

ous sta

ges of t

he audi

t proce

ss, in

crea

sng our w

ritt

communicat

s to

and reporting from the component teams

and inv

ting co

mpon

ent tea

ms to ou

r virt

ual pl

anning eve

and su

bse

quent v

irt

ual event

s ded

icate

d to spe

cif

c areas o

the audit.

For ma

jort

y of t

he sign

ﬁcant and f

raud r

isk are

as, s

ubsta

ntial

ele

ment

s of th

e audit wo

rk were le

d cent

rally

, e

ither w

ithn th

Gro

up aud

it enga

gemen

t team

, or wit

hn othe

r team

performing centralised procedures.

This, together with the addit

onal procedures performed at

Gro

up level

, gave us ap

propr

iate ev

idence f

or our o

pinon on

the G

roup a

nd Com

pany ﬁnan

cal stat

ement

Climate change

The

re has b

een in

creasn

g inter

est fr

om stakeh

olde

rs as t

how cli

mate ch

ange wi

ll impa

ct the ba

nking i

ndust

. Th

Gro

up has d

eter

mine

d climat

e risk t

o be a Prim

y Inte

grate

Risk T

e and th

e ass

essm

ent of t

his ris

k is exp

laine

d in the

ask Forc

e for Clim

ate rel

ated Fina

ncal Dis

closu

res and i

n the

Prin

cpal Ris

ks and U

ncer

taint

es sect

ion of t

he Annu

al Repor

(

col

lectively the “C

limate Disclosures

”

)

The C

limate D

isclo

sure

s form p

art of t

he ‘Ot

her inf

orma

ton,’

rather tha

n the aud

ited ﬁnanca

l statements. Our procedures

on the Cli

ate

Dis

closures

therefore consisted solely of

con

sider

ng whe

ther t

hey are ma

teri

ally inco

nsst

ent wit

h the

ﬁnan

cal stat

ement

s or o

ur know

ledg

e obtai

ned in t

he cour

of th

e audit o

r othe

wise a

ppear t

o be mat

erial

ly mis

state

Gove

rnme

ntal and s

ociet

al resp

ons

es to clim

ate cha

nge ri

sks

are st

ill develo

ping an

d are inte

rdepe

nden

t upon e

ach oth

er;

accordingly,

ﬁn

ancal statement

s cannot capture all poss

ible

ture o

utcom

es as t

hese ar

e not yet k

nown. T

he deg

ree of

uncertainty of these c

hanges may also mean

that they

cann

ot be ta

en int

o accou

nt when d

eter

minng a

sset a

liabl

y valuat

ions an

d the tim

ng of f

utur

e cash ﬂow

s under

the r

equir

ement

s of U

K adopt

ed IA

S and EU IFRS

r audit ef

for

t in con

sider

ng clima

te chan

ge ris

ks was

foc

used o

n evaluat

ing whe

ther t

he Gro

’s asse

ssme

nt of th

fect

s of ma

teria

l climat

e chang

e risk

s disc

lose

d withn B

asis

of Pre

parat

ion on pa

ge 316 ha

ve been a

pprop

riate

ly reﬂe

cted

in th

e valuat

ion of as

set

s and lia

blites

, whe

re the

se can be

reli

ably me

asur

ed. Th

is was in th

e conte

xt of the G

roup

’

pro

cess over t

his eme

rging ar

ea bei

ng limte

d, as a re

sult

of limt

atio

ns in the a

vailabl

y of data a

nd soph

istcat

dels

, and as t

he Gro

up cons

ider

s how it f

urt

her emb

eds

its clim

ate ambitons into the plannin

g process.

e also understood the Directors’

consideratons of

climate

chan

ge in th

eir ass

ess

ment of g

oing con

cern a

nd viabl

y and

the asso

ciated disclosures.

Whil

st the G

roup h

as stat

ed it

s commi

tmen

t to the

asp

iraton

s of the Par

is Agre

ement t

o achieve n

et zero

emi

sson

s by 2

050, th

e Gro

up cons

ider

s Climat

e Risk as a

lon

ger

-t

erm r

isk and w

ill addr

ess th

e risk t

hrou

gh its b

usine

str

ateg

y and ﬁnan

cal plan

ning as t

he Gro

up impl

ement

s it

net ze

ro jour

ney

. A

s set ou

t above and o

n page 31

6 withn

sis of Pre

parat

ion, th

e Gro

’

s p

roces

s is cur

rent

ly limte

and accordingly,

he potential imp

acts of Climate Risk ma

not be fully i

ncorporated in these ﬁ

nancal s

tatements.

299

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

ey audit m

atte

Key audit m

atter

s are t

hose m

atter

s tha

t, in o

ur profe

ssio

nal jud

geme

nt, wer

e of mos

t signﬁcanc

e in our au

dit of th

e ﬁnancal

sta

temen

ts of t

he cur

rent p

erio

d and incl

ude th

e most s

ignﬁcant as

ses

sed r

isk

s of mat

erial m

isst

ateme

nt (

whe

ther o

r not du

to f

raud) t

hat we ide

ntﬁed. T

hese m

atte

rs inc

lude

d thos

e which h

ad the gr

eate

st eff

ect on: th

e overall au

dit stra

teg

, the

allo

catio

n of reso

urces in t

he aud

it; and d

irectn

g the ef

for

ts o

f the en

gagem

ent te

am. Th

ese ma

tter

s were ad

dres

sed in th

cont

ext of ou

r audit o

f the ﬁnan

cal sta

temen

ts as a w

hole

, and in ou

r opinon t

here

on, and we d

o not prov

ide a se

parat

opin

on on these ma

tter

Risk

r res

pon

se t

o the r

isk

Credit Im

pairment

Refe

r to the Au

dit Co

mmitt

ee Rep

ort (p

age 117

); Accou

ntin

polices

(page 32

; Note 8 of

ﬁnancal

statements; and

rel

evant cre

dit ri

sk dis

clos

ures (incl

udng p

ages 203 an

d 23

)

At 31 De

cemb

er 2021, t

he Gr

oup rep

ort

ed to

tal cre

dit

imp

arme

nt bal

ance sh

eet p

rovis

on of $6

,20

9 millo

(2020: $

,145 mil

lon

Management’s

judgements and estimates

are especially

sub

ject

ve due to s

ignﬁca

nt unce

rta

int

y ass

ocia

ted wi

th th

assumptions used. Assumption

ith

increas

ed c

mplexity in

res

pect o

f the t

imng an

d mea

surem

ent of e

xpe

cted cr

edit

los

ses (EC

) in

clud

•

Staging

– A

lloca

tion o

f ass

s to stag

e 1, 2, o

r 3 on a tim

ely

sis us

ing cr

iter

a in acco

rdanc

e with I

FRS 9;

•

del ou

ut and a

dju

stm

ent

– Accounting inter

pretatons

dellin

g ass

umpt

ions a

nd dat

a use

d to buil

d and r

un the

models that c

alculate the E

CL, includng

the appropriateness,

completeness and

valuation

of post

-model adjustments

app

lied to m

ode

l outp

ut to a

ddres

s ris

ks no

t fu

lly cap

ture

d by

the models

;

•

Economic scenari

– S

ignﬁcan

t judg

emen

ts invo

lved w

ith

e dete

rmin

aton o

f param

eter

s us

ed in Mo

nte Ca

rlo

Sim

ulat

on and t

he evalu

ation o

f the ap

prop

riat

enes

s of

usi

ng Mon

te Car

lo Sim

ulat

on wit

h rega

rds to w

heth

er th

sim

ulat

on can su

fﬁcen

tly ca

ptur

e the n

on-lin

eart

y o

ECL an

d appro

pria

tely g

ener

ate a wi

de eno

ugh ran

ge of

possible outcomes

;

•

Management ov

erlays

– Ap

propriateness, completeness and

valu

atio

n of ris

k event over

lay

s to capt

ure r

isk

s not id

entﬁe

by the c

redi

t impar

men

t mode

ls, i

nclu

dng th

e consi

derat

on

of th

e ris

k of man

agem

ent over

rid

e; and

•

Indivdually ass

essed ECL allow

ance

– Measurement of

ind

vidu

al prov

ison

s incl

udng t

he as

sess

ment o

f prob

abilt

weighted

recovery scenarios, exit

strategies, collatera

valu

atio

ns and t

ime to co

llect

The a

bove com

plex

ites a

re fu

rth

er exacer

bat

ed by th

e ongo

ing

COVID-

19 p

ande

mic

, part

icul

arly d

ue to it

s dy

nami

c natu

re and

e diver

st

y of it

s imp

act acr

oss ge

ogra

phie

s and tim

e. The

mos

t not

able r

isk in t

his res

pect r

emain

s the a

pprop

riat

enes

s of

e manag

emen

t CO

ID-

19 ove

rla

y reco

gnis

ed wit

hn the EC

The l

evel of r

isk re

main

s consi

sten

t with t

he pr

ior yea

e eval

uate

d the d

esign a

nd ope

ratin

g ef

fect

ivene

ss of

con

trol

s relevan

t to the G

rou

’

s pro

cess

es over m

ater

ial ECL

balances, i

ncludng

the judgements and estima

tes noted,

invol

vng E

Y spe

cials

ts to a

ssi

st us in p

erfo

rmin

g our p

roce

dures

to the e

xtent it w

as appro

priate. These

included:

•

credit monitor

ng

;

•

con

trol

s over the a

lloca

tion o

f ass

ets i

nto st

ages s

uch as

management’s mon

itorng of

stage effectiveness;

•

completeness and ac

curac

of data;

•

rev

iew and ap

proval of m

ulti

ple ec

onom

ic scen

ario

•

model gov

ernance, inc

ludng

model monitorng, model

valid

aton a

nd revi

ew and ap

proval of p

ost mo

del

adjustment

•

rev

iew and ap

proval of m

anag

emen

t overl

ays; an

•

rev

iew and ap

proval of t

he ind

vid

ually a

sse

d ECL.

In eval

uatin

g the co

ntro

ls, we o

btain

ed th

e releva

nt pap

ers a

min

utes o

f the exe

cuti

ve for

ums t

hat dis

cus

s and app

rove the

cre

dit mo

dels a

nd ECL allow

ances f

or evid

ence o

f execut

ive

review

and challenge

e p

erfo

rme

d an overal

l stand-

back a

sse

ssme

nt of th

e ECL

allow

ance leve

ls by sta

ge to de

ter

mine if t

hey were r

eas

onabl

by con

side

rng th

e overall c

redit q

ualit

y o

f the G

roup’

s po

rtf

olios

sk proﬁl

e, imp

act of COVID-19 inclu

dng ge

ogra

phic

con

side

raton

s and v

ulne

rable s

ecto

. W

e als

o ass

ess

ed the

fect o

f gover

nment s

upp

ort m

easu

res in key lo

cati

ons (

e.g.

ymen

t defe

rral

)

, w

hich m

ay del

ay or m

ask st

age mi

grato

ns.

r ass

essm

ent al

so inc

lude

d the eval

uati

on of th

mac

roec

onom

ic envir

onme

nt by con

sider

ng tr

ends i

n the

eco

nomi

es and in

dust

res t

o whic

h the G

roup i

s expo

sed

. W

rfor

med p

eer b

ench

mark

ing wh

ere a

vailabl

e to as

ses

s overall

sta

ging an

d provi

son cove

rage leve

ls.

Staging

– W

e evalu

ated t

he cri

ter

a used t

o allo

cate ﬁn

ancal

set

s to st

age 1, 2 o

r 3 in acco

rdanc

e with I

FRS 9

. W

rep

erf

orme

d the s

tagin

g dist

rbu

tion f

or a samp

le of ﬁn

ancal

assets and assessed the reasonableness

of staging do

ngr

ades

applied b

y management.

o test c

redit m

onit

orn

g which l

argel

y dri

ves th

e prob

abilt

y of

default es

timates used

in the

staging calcula

tion, we chal

lenged

e risk r

ating

s for a s

ample o

f per

form

ing ac

count

s and o

the

acco

unt

s exhi

btin

g risk c

harac

teri

stc

s such a

s ﬁnanc

dif

cult

ies, d

efer

ment o

f pay

men

t, lat

e pay

men

t and watc

hlist

e also c

sider

ed the vulnerable

ctors (

as deﬁned on page

29 in th

e annua

l repo

rt) impa

cted by COVID-19

300

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Independent auditor’

s report

Risk

r res

pon

se t

o the r

isk

Credit Im

pairment

continued

dell

ed ou

tpu

t and a

djus

tme

– W

e per

for

med a r

isk

ses

smen

t on mod

els invo

lved in t

he ECL cal

culat

ion to

select a sa

mple of models

to test. W

e engaged our modelli

ecial

sts t

o evalua

te a samp

le of ECL m

odel

s by ass

ess

ing

the reasonableness

of underpinn

ng assumptions, inputs and

formulae used. This

included a combinaton

of assessing the

appropriateness of

odel des

ign, formulae a

algorithms

alternative

modelling techniques

and recalculati

ng the

Prob

abilt

y of D

efa

ult, Lo

ss Gi

ven De

fault a

nd E

xpo

sure at

Default parameters. T

ogether with our modelling

specialsts,

we a

lso assessed material post

-model adj

ustments which

were

app

lied a

s a resp

onse t

o ris

ks no

t ful

ly capt

ure

d by the mo

del

includ

ng the completeness and

appropriateness of

these

adj

ustm

ent

s, fo

r which w

e consi

dere

d the ap

plie

d judgm

ent

and methodology

, a

nd go

vernance

thereon.

In re

spon

se to t

he new mo

del

s imple

ment

ed th

is year t

add

ress k

nown w

eakn

ess

es in pre

viou

s mode

ls, we p

erf

orm

substantive

testing procedures, inc

ludng

code review

and

implementaton testing.

o evalua

te dat

a quali

ty, we agre

ed a sam

ple of EC

L calcul

atio

data points to

source systems, includ

ng, among other data

poi

nts

, bal

ance sh

eet d

ata us

ed to r

un th

e mode

ls. We also

tes

ted a s

ample o

f the ECL d

ata p

oint

s fro

m the cal

cula

tion

eng

ine th

rough t

o the g

enera

l ledg

er and di

sclo

sure

s. W

inc

lude

d CO

D-

19 s

peci

fc d

ata po

int

s in thi

s test

ing.

Economic scenari

– F

or mat

erial m

ode

ls, in c

ollab

orat

ion wi

our e

cono

mist

s and m

ode

lling s

pecia

lst

s, we al

so cha

lleng

the completeness

and appropriateness

of the mac

roeconomic

vari

able

s used a

s inpu

ts t

o thes

e mod

els

Addit

onal

, we invo

lved e

cono

mic sp

ecial

sts t

o ass

ist us in

evalu

atin

g the re

aso

nable

nes

s of the b

ase f

orec

ast fo

r sampl

of ma

croe

cono

mic var

iable

s most r

elevan

t for th

e Gro

’s ECL

calc

ulat

ion inﬂu

ence

d by the ab

ove ass

ess

ment

. Proc

edur

rfor

med i

nclu

ded be

nchm

ark

ing th

e fore

cast fo

r a samp

of ma

croe

cono

mic var

iable

s to a vari

y of ext

ern

al sour

ces.

Furthermore,

we assessed the reasona

bleness of the no

lin

eart

y im

pact o

n ECL allowan

ces

. By eng

aging o

eco

nomi

sts a

nd mo

dellin

g spe

cials

, we ass

ess

ed th

oup

’s choi

ce of sce

nar

ios and c

hose

n weight

s us

ed, an

the underlying mechanics a

nd formulae to determine the

upl

ift in EC

Management ov

erlays

–

e chal

lenged the completeness a

app

ropr

iaten

ess o

f overl

ays us

ed fo

r risk

s not c

aptu

red by th

dels

, par

ticu

larl

y the un

cer

taint

es as a r

esult o

f the COVID-19

pan

demi

c and ob

ser

ved i

n the Chi

na Co

mmerc

ial Real E

stat

sector

. Our procedures

included ev

aluating the underpinn

ng

sump

tion

s and ju

dgmen

ts a

s to whe

the

r they are a

pprop

riat

in pr

evailng m

arket co

ndit

ons

Indivdually asse

ssed ECL allow

ance

– Our procedures

included cha

llenging management’

s for

war

d-looking economic

sump

tion

s of the r

ecover

y o

utco

mes id

entﬁe

d and as

sign

ind

vidu

al pro

babil

ty we

ight

ngs, a

nd rec

alcul

atin

g a sampl

e of

indvidually

ssessed provis

ons

e al

so eng

age

d our valu

atio

n spe

cialst

s to t

est th

e value o

the collateral

use

in management’s

calculations. Our sample

was based on

quantitatve thresholds and

qualitatve fac

tor

inc

ludn

g expo

sure t

o vuln

erabl

e sect

ors

. W

e co

nsid

ered t

imp

act COVID-

9 had on co

llat

eral val

uatio

ns and t

ime to

coll

ect

. W

e als

o cons

idere

d whe

ther p

lann

ed exi

t strat

egie

remained viable under

COVI

D-

Our conclusions

e co

nclu

ded th

at man

agem

ent

’s meth

odol

ogy, judge

ment

s and a

ssu

mpti

ons us

ed in cal

cula

ting cr

edit im

par

ment ar

e in

acco

rdan

ce wit

h the acc

ount

ing st

andar

d. W

e hig

hlght

ed th

e follow

ing m

atte

rs to t

he Audit C

omm

itte

•

a num

ber o

f contr

ol ﬁndn

gs in re

latio

n to th

e mode

l gover

nance f

rame

work

;

•

me inst

ance

s of over an

d unde

r estim

ato

•

e level of u

ncer

taint

y i

n the Chi

na Com

merci

al Real E

stat

e sect

or and t

he as

soci

ated m

anag

emen

t overla

y incl

udng t

he key

assumptions used;

•

nchm

arki

ng imp

act of no

n-line

art

y f

rom th

e bas

eline EC

L again

st UK pe

s; and

•

e nee

d for to co

ntin

uous

ly as

ses

s the co

mpos

iton o

f the CPB

B CO

D-

19 ove

rla

y to reﬂe

ct the eve

rchan

ging m

arket u

ncer

taint

es.

erall mo

dell

ed ECL leve

ls, s

tagin

g and in

dvi

duall

y ass

ess

ed prov

ison

s were re

aso

nable

. W

e con

clude

d tha

t the G

roup’

s ECL

allow

ances we

re rea

son

able an

d reco

gnise

d in acco

rdan

ce wit

h IFRS 9

301

Standard Chartered

– Annu

al Repo

rt 202

Financal statements

Risk

r res

pon

se t

o the r

isk

User Acces

s Managem

ent – Privlege

d A

cce

Management

Refe

r to the Au

dit Co

mmitt

ee Rep

ort (p

age 11

)

IT G

ener

al Con

trol

s (IT

) su

ppo

rt th

e conti

nuou

s oper

atio

of th

e aut

omat

ed and o

ther I

T depe

nden

t contr

ols w

ithn th

business processes

related to ﬁnanc

al reporting. Effective

gen

eral co

ntro

ls are ne

ede

d to en

sure t

hat IT ap

plicat

ons

process business

data as expected and

that changes a

re made

in an appropriate manner.

ring t

he 2020 audit

, a num

ber o

f signﬁca

nt pri

vle

ged

ide

ntt

y man

agem

ent (PIM) c

ontr

ol deﬁce

ncie

s were ide

ntﬁe

by us

. Simla

r deﬁcen

cies we

re iden

tﬁed by G

roup I

nter

nal Aud

(

) and t

he pre

dece

sso

r audi

tor in 201

8 and 2019

The p

oss

iblit

y o

f IT appli

cato

n user

s gain

ng acce

ss pr

ivl

ege

beyond

those necessar

y to

erform

their assigned

duties

y resu

lt in bre

ache

s in seg

rega

tion o

f duti

es, in

clud

inappropr

ate manua

l inter

vent

on, unauthorised

changes

to s

yste

ms or pr

ogram

mes

The

se deﬁ

cenci

es are st

ill in th

e proc

ess of b

eing f

ull

rem

edia

ted. D

uri

ng the c

urre

nt year a

udit

, we mad

e fur

the

obs

vati

ons re

lati

ng to th

e eff

ecti

vene

ss of re

medi

aton

activties.

The r

isk h

as de

crea

sed in t

he cur

rent ye

ar due t

o mana

geme

’

rem

edia

ton pro

gram

, whic

h is stil

l in prog

ress a

s at th

e year

end

date.

e rev

iewed t

he re

sult

s of ma

nage

ment

’s reme

diato

n prog

ram

and r

isk a

sses

sme

nt for ap

plica

ton

s in our au

dit sco

pe an

ses

sed t

he imp

act on th

e ﬁnan

cal sta

teme

nts f

or the ye

ended 31 December 2

021.

e te

ste

d IT comp

ens

ating c

ontr

ols wh

ere po

ssi

ble, an

d also

rfor

med a

ddit

onal IT s

ubst

anti

ve proc

edur

es to as

ses

s the

imp

act of r

isk

s ass

ociat

ed wi

th the r

epor

ted d

eﬁcen

cies

, on the

ﬁnanc

al statements.

Where requi

red, we tested bus

iness compensating

controls and

performed additona

l business substantive

procedures.

Our conclusions

•

e co

mmun

icate

d a weak

nes

s in inte

rnal co

ntro

l to th

e Audit Co

mmit

tee t

hroug

hout t

he au

dit, i

n resp

ect of t

he ef

fect

iven

ess of

privleged identty management

•

e explained

the additonal

procedures performed, includ

ng IT substan

tive testi

ng, testing

of IT and busi

nes

compensating

controls, and

where required, ad

ditona

l substan

tive testi

ng ov

er impacted ac

count bal

ances.

As a r

esul

t of the p

roce

dure

s per

form

ed, we h

ave red

uced t

he ri

sk tha

t our au

dit ha

s not id

entﬁe

d a mate

rial e

rror i

n the G

roup an

Company ﬁna

ncal

atements, related to user

privleged access management, to an a

ppropr

iate

level.

302

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Independent auditor’

s report

Risk

r res

pon

se t

o the r

isk

Impairment assessment of non-ﬁnancal assets

Refe

r to the Au

dit Co

mmitt

ee Rep

ort (p

ages 1

17 and 118);

) Im

pair

ment o

f aircra

ft: Ac

count

ing p

olice

s (page 3

81); and

Note 18 of

the ﬁnanca

l statements

) Imp

airm

ent of G

dwill: Acc

ount

ing po

lices (

page 378); and

Note 17

of the ﬁnanc

al statements and

) Impairment of

inv

estments in subsidary undertakings:

Accou

nting polic

es (page 40

7); and

Note 32 of

the ﬁnancal

statement

COVID-

19 c

onti

nues t

o have a si

gnﬁcant e

cono

mic imp

act

glo

bally. As a re

sult

, the G

rou

p asse

sse

d for im

par

ment it

vari

ous no

n-ﬁnan

cal as

set

s dur

ing 2021, t

he mo

st signﬁ

cant of

whi

ch are se

t out b

elow.

Impairment of aircraf

The G

rou

p owns a p

ort

folio o

f aircr

aft w

ith a car

ying va

lue

of $

3,092 m

illon (2020: $3

,897 m

illon

), which a

re lea

sed to

air

lnes

. The ai

rcraf

t are me

asur

ed at co

st les

s accu

mulat

dep

recia

ton an

d impa

rmen

t. A

s at 31 De

cemb

er 2021, t

oup ha

s repo

rte

d a $6

4 millo

n impa

rmen

t charg

e in

res

pect o

f aircr

aft

. Each air

craf

t was tes

ted fo

r impa

rmen

Imp

airm

ent of a

ircraf

t is de

term

ined by c

ompa

ring t

he car

ying

valu

e to the h

igher o

f the cu

rren

t mar

ket value, p

rovid

ed by

ind

epen

dent a

pprai

ser

s, an

d the valu

e in use (

VIU

)

. T

judgemental assumptions i

n the VIU calc

ulation include the

discount

rate a

nd residua

l values.

Goodwill and inv

stments in subsidar

y undertaking

The G

rou

p per

form

ed an im

par

ment t

est on g

oodw

ill

amo

unti

ng to $2

,595 mil

lon (2020: $2,

17 m

illon

) a

nd,

in th

e Comp

any ﬁnan

cal st

ateme

s, inves

tmen

ts in

subsidary undertakings amounting to $60,4

29 millon

(2020: $5

07 mill

on

Imp

airm

ent of g

ood

will an

d invest

ment

s in su

bsida

undertakings is

determined by com

paring the

carr

ying

value

to re

coverab

le amo

unt

. Wher

e the re

coverab

le amo

unt is

sed on V

IU, this i

s mode

lled by r

efer

ence to f

ure ca

shﬂow

for

ecas

ts (p

roﬁt for

ecas

t inclu

dng a re

gula

tor

y cap

ital h

aircut

adjustment

discount rates and

macroeconomic assumptions

such as

long-term gro

rates.

nseq

uent

, t

here i

s a ris

k that if t

he jud

gem

ent

s and

assumptions underpinnng the impa

rm

ent

ssessments are

inapproprate, then

odwill a

investments in subsidaries

balances

may be misstated.

The l

evel of r

isk re

main

s consi

sten

t with t

he pr

ior yea

e obtained

an understanding of

management

’

s processes f

ses

sing im

par

ment an

d evalua

ted th

e des

ign of con

trol

s. W

took a

ly substantiv

e approa

ch.

Impairment of aircraf

e a

sses

d the app

ropr

iate

nes

s of the G

rou

’

s V

met

hod

olog

y for t

estin

g the im

par

ment o

f the air

craf

t por

tfol

io.

e te

ste

d the ma

them

atic

al accur

acy o

f the VI

U mod

el and

eng

age

d our valu

atio

n spe

cialst

s to s

uppo

rt th

e audi

t team in

calc

ulat

ing an in

depe

nden

t range f

or as

sump

tion

s in the V

calcul

ations, suc

h as

discount

rates, re-lease

sump

tions and

residual

values.

Whe

re cur

rent m

arket val

ues an

d resi

dual val

ues wer

e use

d to

sup

por

t the ca

yin

g value

, we agre

ed a sam

ple to in

dep

ende

appraisal reports.

e eval

uate

d mana

geme

’

s s

ensi

tvi

y analy

sis in r

elati

on to

sump

tion

s in VIU cal

cula

tion

s and pe

rfor

med s

tres

s tes

ting f

rea

son

ably p

oss

ible ch

ange

s to the d

isco

unt rat

e and ma

rket

values.

Imp

airm

ent o

f goo

dwill a

nd invest

nts i

n sub

sid

undertakings

e assessed the app

ropriateness of

the Group

’

s methodology

for t

esti

ng the i

mpar

ment o

f goo

dwil

l and inves

tmen

ts in

subsidary undertakings for compliance with

accounting

standards

For g

ood

will, we a

sse

d the ap

prop

riat

enes

s of th

e cash-

generating units identﬁ

by management, includng the

cha

nge as a r

esult o

f the G

roup’

s or

ganis

aton

al str

uct

ure

fect

ive 1 Jan

uar

y 2021

e te

ste

d the ma

them

atic

al accur

acy o

f the VI

U mod

el and

eng

age

d our sp

ecial

s to supp

ort t

he au

dit te

am in as

sess

ing

reasonableness of the r

egulator

y hai

rcut adjustment

to futur

proﬁtablit

y forecast

s and calculating an indepe

ndent range

for a

ssu

mpti

ons un

derl

yin

g the VI

U calcul

atio

ns, s

uch as

e disco

unt rat

e and lo

ng-te

rm grow

th rat

e for ea

ch cash

gen

erat

ing uni

t. W

e a

lso re

conci

led th

e fu

ture p

roﬁtab

lit

for

ecas

ts to t

he Gr

oup

’s app

roved Co

rpo

rate Pl

an (‘the Plan’

)

e p

erfo

rme

d audi

t proce

dure

s to as

ses

s the re

aso

nable

nes

of th

e fore

cast

s by rev

iewng t

he G

roup St

rate

, c

halle

ngin

key as

sumpt

ion

s unde

rpin

nng th

e Plan, re

viewn

g the f

easi

blit

of ma

nage

ment a

ction

s nec

ess

y to ach

ieve the Pl

an,

tes

ting t

he rel

iablit

y o

f the G

roup’

s his

tor

cal for

ecas

ting an

benchmarking ke

y metrics against brok

er report

s publ

ished

for compa

rable bus

inesses.

e a

sses

d the app

ropr

iate

nes

s of goo

dwi

ll disc

losu

res in

acco

rdan

ce wit

h IAS 36

e fore

cas

t pro

ﬁts a

re hai

rcut u

sin

g an int

ern

al ri

sk ap

pet

ite an

d for

eca

, to r

eﬂec

t the a

mou

nt of ca

pita

l to be r

eta

ined b

y eac

h CGU be

for

proﬁts may

be distrbuted.

Our conclusions

Impairment of aircraf

e co

nclu

ded th

at man

agem

ent

’s meth

odol

ogy, judge

ment a

nd as

sumpt

ion

s relat

ed to t

he imp

arme

nt as

sess

ment o

f aircr

aft

were r

eas

onabl

e and in a

ccorda

nce wi

th IAS a

nd EU IFR

S. W

e hi

ghlgh

ted th

e foll

owing m

atte

rs to t

he Audi

t Comm

itte

•

Cur

rent m

arket va

lues a

nd res

idual va

lues we

re appr

opri

ate ba

sed o

n inde

pend

entl

y sou

rced ma

rket da

ta; and

•

e disco

unt rat

e was wi

thn ou

r inde

pend

ent ex

pect

atio

n of a rea

sona

ble ran

ge, wi

th due r

egar

d to the r

isk

s facin

g the a

viat

on

ind

ustr

y a

nd the c

harac

teri

stc

s of the G

rou

’

s p

tfoli

o of airc

raft

e co

nclu

ded th

at th

e valuat

ion of t

he airc

raft p

ort

foli

o was not m

ater

iall

y miss

tate

Impairment of

goodwill and

investments in subsidary undertakings

e co

nclu

ded th

at th

e good

will b

alan

ce as at 31 D

ecem

ber 2021 is n

ot mat

eri

ally mi

ssta

ted

. W

e als

o concl

ude

d that t

he invest

ment

in su

bsida

y unde

rta

king

s in Com

pany ﬁna

ncal st

atem

ent

s is not m

ater

iall

y miss

tate

d. W

e ar

e sati

ed th

at th

e chang

e in cash

generating units, management methodologies, judgements and assumptions supporting the carr

ying v

alue were reasonable and

in acc

ordan

ce wit

h IAS an

d EU IFRS

e concluded that the

disclosures were appropriate.

303

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

Risk

r res

pon

se t

o the r

isk

Basis of accounting and impa

rment as

sessment

of Chin

a Bohai Bank (Int

erest i

n Asso

ciate

)

Refe

r to the Au

dit Co

mmitt

ee Rep

ort (p

age 11

); Acco

unti

polices

(page 40

7); and

Note 32 of

the ﬁnanca

l statements

Int

eres

t in As

socia

te – Chin

a Boh

ai Bank $

17 mil

lon (2020:

$2,

025

mill

)

her imp

arm

ent – Chi

na Boh

ai Ban

k – $30

0 millo

n (202

: nil).

e focused o

n judgements and

estimates, includ

ng the

appropriateness of the equity accounting treatment under

S 28 and th

e ass

ess

ment o

f impar

men

Basis of accounting

The G

rou

p hold

s a 16.

% s

take in Chi

na Bo

hai Ban

k and eq

uit

accounts for

the inv

estment as an

associate, on

the grounds

that the

roup

has assessed that it

exerci

ses sig

nﬁcant

inﬂu

ence ove

r China B

ohai B

ank

S 28 stat

es tha

t if the e

ntit

y ho

lds

, dire

ctly or i

ndre

ctly, less

an 20% of th

e votin

g power of t

he inves

tee, i

t is pre

sume

that the

entity does not have

signﬁc

ant inﬂuence

, unless s

uch

inﬂu

ence ca

n be cle

arl

y demo

nstr

ated

The

re is a r

isk th

at the e

quit

y ac

count

ing tr

eat

ment m

ay not b

app

ropr

iate, i

f the G

roup ca

nnot d

emon

stra

te tha

t it exert

sig

nﬁcant inﬂ

uenc

e over Chin

a Boha

i Bank

Impairment tes

ting

At 31 De

cemb

er 2021, t

he Chin

a Boh

ai Bank

’s market

capi

tals

ation w

as at a sig

nﬁcant di

scou

nt comp

ared t

o the

car

ying va

lue of t

he invest

men

t, wh

ich rep

rese

nts a

n indca

tor

of imparment.

Imp

airm

ent of t

he inves

tmen

t in China B

ohai B

ank is d

eter

mine

by com

pari

ng the c

arr

ng valu

e to the V

IU. Where t

rec

overabl

e amou

nt is ba

sed o

n VIU, thi

s is mod

elle

d by

ref

eren

ce to f

utur

e cashﬂ

ow fore

cast

s (pro

ﬁt inclu

dng a

regulatory capital ha

ircut adjustment

)

, discount ra

tes and

mac

roec

onom

ic ass

umpt

ions s

uch as l

ong-t

erm gr

owth ra

tes

nseq

uent

, t

here i

s a ris

k that if t

he jud

gem

ent

s and

assumptions underpinnng the impa

rm

ent

ssessments are

ina

pprop

rat

e, then t

he inves

tmen

t in Chin

a Boha

i Bank m

be misstated.

The r

isk h

as inc

reas

ed in cu

rren

t year in t

he cont

ext of e

conom

devel

opme

s in China a

s well as B

ohai

’s ﬁnan

cal pe

rfor

man

in 202

Basis of accounting

e eval

uate

d the f

act

s and circ

umst

ances t

hat t

he Gro

pre

sent

ed to de

mon

strat

e it

s abilt

y to exe

rt sig

nﬁcant in

ﬂuen

over th

e mana

geme

nt, a

nd ﬁnan

cal and o

pera

ting p

olice

s of

China Bohai

Bank, through Board representation, membership

of Board

ommi

tte

and the sharing o

f industry and techni

cal

advice

Impairment tes

ting

e a

sses

d the app

ropr

iate

nes

s of the G

rou

’

s V

met

hod

olog

y for t

estin

g the im

par

ment o

f the inve

stme

nt in

Chin

a Boh

ai Bank f

or com

plian

ce with t

he acc

ount

ing

sta

ndard

s. W

e t

este

d the m

athe

mati

cal accu

rac

y of the V

del and e

ngag

ed ou

r valuat

ion sp

ecia

lst

s to sup

por

t the

aud

it tea

m in calcu

latin

g an ind

epen

dent r

ange fo

r the

sump

tion

s unde

rly

ing th

e VIU cal

culat

ions

, suc

h as the

dis

coun

t rate an

d long-t

erm gr

owth r

ate.

e p

erfo

rme

d audi

t proce

dure

s to as

ses

s the re

aso

nable

nes

of th

e Gro

’s fore

cast o

f the f

utu

re cash

ﬂows re

latin

g to Boh

ai,

revie

wng management’

s assessment, benchmarking the

forecasts to brok

er report

s publ

ished for c

omparable c

omp

ani

and c

halle

nging m

anag

emen

t with r

egar

d to the r

elevan

ce and

rel

iablit

y o

f histo

rcal d

ata wh

en pre

pari

ng the

ir ass

ess

ment

e assessed the app

ropriateness of

disclosures in

annual

report in relati

on to the

impact of reasonably possible c

anges

in key as

sump

tion

s on th

e carr

ing valu

es of th

e invest

ment

in Bo

hai.

Our conclusions

e co

nclu

ded th

at th

e Grou

p cont

inue

s to main

tan sig

nﬁcant in

ﬂuen

ce over Chin

a Boh

ai Bank a

s at 31 De

cemb

er 2021.

e co

nclu

ded th

at th

e Inter

est in A

sso

ciat

e – China B

ohai B

ank ba

lance a

s at 31 De

cemb

er 2021 was no

t mat

erial

ly mis

stat

ed.

e co

nclu

ded th

at th

e discl

osur

es in th

e annua

l repo

rt app

ropr

iate

ly reﬂe

ct the s

ens

itv

y of the c

arr

ng valu

e to rea

sona

bly

possible changes in

key

sumptions.

304

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Independent auditor’

s report

Risk

r res

pon

se t

o the r

isk

alu

ation of ﬁn

ancal ins

trume

nts he

ld at fair

value with high

er risk cha

racteri

stc

Refe

r to the Au

dit Co

mmitt

ee Rep

ort (p

age 11

); Acco

unti

polices

(page 339

); and

Note 13 of

the ﬁnancal

statements

At 31 De

cemb

er 2021, t

he Gr

oup rep

ort

ed ﬁna

ncal a

sset

asur

ed at fai

r value o

f $303,

8 m

illon

, and ﬁna

ncal

liab

lite

s at fair val

ue of $1

38,

596 millon

, of wh

ich ﬁnan

cal

set

s of $

4,116 millon a

nd ﬁnan

cal lia

blite

s of $1

,653 m

illon

are cl

ass

ed as Leve

l 3 in the f

air valu

e hiera

rchy

The f

air valu

e of ﬁnan

cal in

str

umen

ts w

ith hig

her ri

characterist

cs involv

es the use of ma

nagement judgement

in th

e sele

ctio

n of valu

ation m

ode

ls and t

echni

ques

, pr

icng

inp

uts a

nd as

sump

tion

s and fai

r value a

djust

ment

A high

er leve

l of est

imat

on unce

rta

int

y is invol

ved fo

r ﬁnanca

ins

tru

ment

s valu

ed us

ing com

plex m

odel

s, pr

icng in

put

at have li

mted o

bser

bilt

, an

d fair val

ue adj

ustm

ent

includ

ng the Credit

aluation

Adjustment and

Debit V

aluatio

Adju

stme

nt, in r

elat

ion to d

eri

vatve t

ransa

ctio

ns wit

cou

nter

par

ties w

here c

redit s

prea

ds are l

ess re

adil

y able t

be determined.

e co

nsid

ered t

he fol

lowin

g por

tfol

ios pre

sent

ed a hig

her leve

of estimat

on uncertaint

•

Level 3 d

eriva

tve ﬁn

ancal in

str

ume

nts a

nd a por

tfo

lio of

Level 2 de

riva

tve ﬁna

ncal in

str

ume

nts d

ue to th

e use o

com

plex mo

del

s or illq

uid pr

icng inp

s, an

•

Unli

ste

d equi

ty i

nvestm

ent

s, lo

ans at f

air valu

e, debt a

her ﬁna

ncal in

str

umen

ts cl

ass

ed in Level 3 w

ith

unobser

vable

pricng i

nputs

The l

evel of r

isk re

main

s consi

sten

t with t

he pr

ior yea

e eval

uate

d the d

esign a

nd ope

ratin

g ef

fect

ivene

ss of

con

trol

s relat

ing to t

he valu

atio

n of ﬁnan

cal ins

tru

ment

inc

ludn

g indep

end

ent pr

ice ver

if

catio

n, mo

del rev

iew and

app

roval, fai

r value a

djust

ment

s, i

ncom

e stat

emen

t analy

sis

and reporting.

ong ot

her pr

oced

ures

, we eng

aged o

ur valu

ation s

pec

ialst

to as

sis

t the au

dit te

am in per

for

ming t

he fol

lowin

g proce

dure

•

est

complex model-dependent v

aluations by independently

reval

uing a sa

mple o

f Level 3 and co

mple

x Level 2 der

ivat

ve

ﬁnan

cal in

str

umen

, in orde

r to as

ses

s the ap

propr

iate

nes

of models and

the adequac

of assumptions and

input

s used

by the G

rou

•

est val

uati

ons of o

ther ﬁ

nanca

l inst

rum

ent

s wit

h highe

estimaton uncertaint

, such

unliste

d equity inv

estment

loa

ns at fa

ir value

, debt an

d oth

er ﬁnan

cal ins

tru

ment

e co

mpar

ed man

agem

ent

’

s valu

atio

n to our ow

independently developed range

, where appropriate

;

•

ses

sed t

he app

ropr

iate

nes

s of pri

cng inp

uts a

s par

t of th

Independent Price V

ifcation process;

and

•

mpare

d the m

eth

odol

ogy u

sed fo

r fair val

ue adj

ustm

ent

to cu

rren

t marke

t pract

ice. W

e r

evalue

d a samp

le of valu

atio

adj

ustm

ent

s, co

mpare

d fu

nding a

nd cre

dit spr

eads t

o thir

par

y data a

nd chal

leng

ed th

e basi

s for de

term

inng il

lquid

credit spread

Where material di

fferences bet

ween our

indepen

dent

valuation

and m

anag

emen

t’s valu

ation we

re out

de our t

hres

hold

s, we

rfor

med a

ddit

onal te

stin

g to as

ses

s the im

pact o

n the

valu

atio

n of ﬁnan

cal ins

tru

ment

Our conclusions

e co

nclu

ded th

at as

sump

tion

s use

d by mana

geme

nt to est

imat

e the f

air value o

f ﬁnan

cal ins

tru

ment

s wit

h high

er ris

cha

racte

rist

cs an

d the re

cogni

ton of r

elat

ed inc

ome wer

e reas

onab

le. W

e hi

ghlgh

ted th

e foll

owing m

atte

rs to t

he Audi

t Comm

itte

•

Complex model-dependent valuations

were appropriate based on the output of

our independent revaluations;

•

Fair va

lues o

f deri

vatve t

rans

acti

ons

, unlis

ted e

quit

y inves

tmen

, loan

s, de

bt and o

ther ﬁ

nanca

l inst

rum

ent

s value

d usin

g pricn

inf

orma

ton w

ith lim

ted ob

ser

vab

ilt

y were no

t mate

rial

ly mis

stat

ed as a

t 31 Dece

mbe

r 20

1, ba

sed o

n the ou

tpu

t of our

indepe

ndent calculation

•

alu

atio

n adju

stme

nts i

n resp

ect of c

redit

, fu

ndin

g and ot

her r

isk

s applie

d to de

rivat

ve po

rtfo

lios a

nd deb

t secu

rite

s iss

ued we

app

ropr

iate, b

ase

d on our a

naly

sis of m

arket d

ata and b

ench

mar

king o

f pricn

g info

rmat

on.

The K

Ms rema

in cons

isten

t from p

rior ye

Our applicaton of materialty

e app

ly the c

oncep

t of mate

rialt

y in p

lannin

g and

per

for

ming th

e audit

, in evalu

ating t

he ef

fect of i

dentﬁe

mis

stat

ement

s on th

e audit a

nd in for

ming o

ur audit o

pinon

Material

The magnitude of

an omisson

or misstatement that,

indvidually or

in the aggregate, could

asonably be

exp

ecte

d to inﬂue

nce th

e econo

mic dec

isons o

f the us

ers

of th

e ﬁnanca

l state

ment

s. Ma

teri

alt

y provid

es a bas

is for

det

ermin

ng the n

ature a

nd exten

t of our a

udit pro

cedu

res.

e de

term

ined ma

teri

alt

y for th

e Grou

p to be $195 m

illon

(2020: $14

4 millon

), whi

ch is 5% (202

0: 5%) of adjus

ted PBT

Thi

s reﬂect

s act

ual PBT adjus

ted fo

r non-re

curr

ing ite

relating to r

estructuring, regulator

y ﬁne and

gain on

bus

ines

ses dis

pose

d/held fo

r sale. W

e b

elieve th

at adju

sted

PBT provid

es us wi

th the m

ost app

ropri

ate me

asure f

or the

use

rs of t

he ﬁnan

cal stat

ement

s, g

iven th

e Grou

p is proﬁt

mak

ing; it is co

nsist

ent wi

th the w

ider in

dustr

y a

nd is th

stan

dard fo

r liste

d and re

gulat

ed ent

ites an

d we believe it

reﬂe

cts t

he mos

t usef

ul me

asure f

or use

rs of t

he ﬁnan

cal

sta

temen

. W

e also b

elieve th

at the a

djust

ment

s are

appr

opri

ate as th

ey relat

e to mat

erial n

on-recu

rrin

g item

•

tatu

tor

y pro

ﬁt befor

e tax – $

347

Starting basis

•

Restructuring – $5

•

Regulator

y ﬁne

– $62

•

et gain on b

usin

esse

s disp

osed/he

ld for sa

le – (

$20

)

justments

•

ota

ls $3,

896m Adju

sted PBT

•

ater

ialt

y of $195

m (5% of Adjus

ted PBT

)

Mate

rialty

305

Standard Chartered

– Annu

al Repo

rt 2021

Financal statements

e de

term

ined ma

teri

alt

y for th

e Comp

any to be $17

6 m

illon

(2020: $130 millo

) whic

h is 0.3

3% (202

0: 0.

25%) of the e

quit

of th

e Comp

any

. W

e be

lieve tha

t equit

y pr

ovides u

s with t

mos

t approp

riat

e meas

ure for t

he use

rs of t

he Com

pany’s

ﬁnan

cal stat

ement

s, g

iven th

at the C

ompany i

s prima

rly a

holding comp

any

Performance

materialty

The a

pplicat

on of ma

teri

alt

y at the in

dvid

ual acco

unt

or ba

lance leve

l. It is se

t at an amo

unt to re

duce t

o an

appr

opri

ately l

ow level the p

robab

ilt

y that t

he aggr

egat

of uncorrected and

undetected misstatements exceeds

materialt

On t

he bas

is of our r

isk as

ses

smen

, toge

ther w

ith our

assessm

ent of

roup

’

s over

all control

environment

, our

jud

gemen

t was tha

t perf

orma

nce mat

erialt

y wa

s 50%

(2020: 50%

) of ou

r planni

ng mat

erialt

, n

amel

y $98 millon

(2020: $72 mill

). W

e have se

t perf

orma

nce mat

erialt

y a

this percentage based on

a variet

y of

isk

assessment factors

such as the expectation of misstatements, internal control

environment considerat

s a

other factors such as the

global complexi

y of

the Group.

Audit wo

rk at com

pone

nt loca

tions f

or the p

urp

ose of

obtainng audit

coverage ov

er signﬁc

ant ﬁnanc

al statement

accounts is undertaken

ased on

a percentage of

total

per

for

mance m

ater

ialt

. The p

erf

orma

nce mat

erialt

y s

et for

eac

h compo

nent i

s base

d on the r

elati

ve size and r

isk of t

comp

onen

t to the G

roup a

s a whol

e and our a

sse

ssme

nt of

the risk of misstatement at that component. In the c

urrent

year, the ran

ge of pe

rfor

mance m

ater

ialt

y allo

cated t

comp

onen

ts wa

s $8m to $2

9m (20

20: $

m to $2

Reporting threshold

An amount below which

identﬁed misstatement

s a

consi

dered

as being c

learly trival

e agr

eed w

ith the Au

dit Com

mitte

e that we wo

uld re

port t

the

m all unco

rrec

ted au

dit dif

feren

ces in exces

s of $10 m

illon

(2020: $7 millon)

, whi

ch is set a

t 5% of plan

ning mat

erial

ty,

as wel

l as dif

feren

ces bel

ow that t

hresh

old th

at, in o

ur view,

warranted re

porting on qu

alitatve grounds.

e evalu

ate any unc

orre

cted mi

ssta

temen

ts a

gainst b

oth

the q

uanti

tatve m

easu

res of m

ater

ialt

y discu

sse

d above and

in ligh

t of oth

er relevan

t qualit

atve co

nside

raton

s in for

ming

our opin

Other informaton

The other informaton comprises the informaton included in

the a

nnual re

por

t set ou

t on pag

es 1 to 293

, inclu

dng th

Str

ategi

c repor

t (pag

e 2 to 87), the D

irect

ors’ re

por

t (page 8

to 14

) and t

he info

rmat

on not m

arked as ‘aud

ited

’ in the

Dire

ctor

s’ remu

nerat

ion rep

ort (p

age 141 to 190

) a

nd the

Risk a

nd capit

al review s

ectio

n (page 1

4 to 2

), and th

Supplementar

y informaton (page 440 to 468)

, other than

the ﬁ

nancal s

tatem

ent

s and our a

udito

r’s repor

t the

reon

The directors are

resp

onsible

for the other informaton

cont

ained w

ithn t

he annu

al repo

rt.

r opinon o

n the ﬁna

ncal sta

temen

ts do

es no

t cover the

other informaton and, ex

cept to the extent other

wise

exp

lictly s

tate

d in this re

por

t, we do n

ot expr

ess any fo

of assurance c

onclusion thereon.

r respo

nsibl

y is to rea

d the ot

her inf

orma

ton and

, in

doing so, c

onsider whether the other informaton is materially

inco

nsst

ent wit

h the ﬁna

ncal sta

teme

nts o

r our kn

owled

obt

ained i

n the cou

rse o

f the au

dit, o

r othe

wise ap

pear

to be m

ater

ially m

isst

ated. I

f we ident

f

y such m

ateri

inconsstencies or a

arent

aterial misstatements, we are

req

uired t

o deter

mine w

heth

er this g

ives ri

se to a ma

teri

misstatement in the ﬁnanc

al statement

s themselves. If

, based

on th

e work we h

ave per

form

ed, we co

nclud

e that t

here is a

material misstatement of the other informaton, we

are

required to repor

t that fact.

e ha

ve noth

ing to rep

ort i

n this re

gard.

Opinon

s on oth

er matt

ers pre

scribed by th

Compa

nies Act 2006

In ou

r opinon

, the pa

rt of t

he direc

tor

s’ remun

eratio

n repo

rt to

be aud

ited has been

properly pr

epared in

accorda

nce with

the C

omp

anies Act 200

In ou

r opinon

, base

d on th

e work un

dert

aken in the c

our

se of

the audit:

•

the i

nfor

maton g

iven in th

e strat

egic re

por

t and the

dire

ctor

s’ repo

rt for t

he ﬁnan

cal year fo

r which t

he ﬁnan

cal

statements are prepared is consistent with the ﬁnanc

al

statements; and

•

the s

trate

gic rep

ort an

d the dir

ector

s’ rep

ort h

ave bee

prepare

d in

accordance wit

h applicable legal requir

ements

Mat

ters on w

hich w

e are re

quired t

o report

bye

xcept

ion

In th

e light of t

he know

led

ge and un

ders

tandi

ng of th

e Grou

and t

he Com

pany and it

s envir

onmen

t obtai

ned in t

he cour

of th

e audit

, we have n

ot iden

tﬁed ma

teri

al miss

tatem

ent

s in

the s

trate

gic rep

ort o

r the dire

ctor

s’ rep

ort

e ha

ve noth

ing to rep

ort i

n respe

ct of th

e follow

ing mat

ter

in rel

ation t

o which t

he Com

panie

s Act 2006 re

quires u

s to

rep

ort to yo

u if

, in ou

r opinon:

•

ade

quat

e accoun

ting re

cords h

ave not b

een kep

t by the

Com

pany

, or r

etur

ns ade

quat

e for our a

udit ha

ve not b

een

rec

eived f

rom bra

nches n

ot vis

ted by us; or

•

the C

ompa

ny ﬁnancal s

tatem

ent

s and th

e part o

f the

Dire

ctor

s’ remu

nerat

ion rep

ort t

o be audi

ted are n

ot in

agre

emen

t with t

he accou

ntin

g record

s and ret

urn

s; or

•

certain disclosures

of directors’ remuneration specifed by

law a

re not ma

de; or

•

we ha

ve not rec

eived all t

he info

rmat

on and ex

plan

ation

we req

uire for o

ur aud

it.

Corporate Gov

ernance Statement

e ha

ve reviewe

d the dir

ector

s’ sta

temen

t in relat

ion to

goin

g conce

rn, lo

nger-term v

iablit

y and t

hat pa

rt of th

Cor

por

ate Gove

rnanc

e State

ment re

latin

g to the G

roup

and C

ompany

’

s co

mplian

ce with t

he prov

isons o

f the UK

Cor

por

ate Gove

rnanc

e Code s

pecif

e

d for ou

r review by th

Listng Rules.

sed on t

he work u

nder

taken as p

art of o

ur aud

it, we ha

conc

lude

d that e

ach of th

e follow

ing el

ement

s of th

Corporate Governance Statement is materially consistent

wit

h the ﬁna

ncal sta

teme

nts o

r our kn

owled

ge obt

ained

during the audit:

•

Dire

ctor

s’ stat

ement w

ith re

gards t

o the app

ropr

iaten

ess of

adopting the going

concern basis of accounting and

any

material uncertaintes identﬁ

;

•

Directors’ explanation

to it

s assessment of the

Com

pany’s pros

pect

s, t

he per

iod th

is ass

essm

ent cover

and w

hy the pe

riod i

s approp

riat

;

306

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Independent auditor’

s report

•

Dire

ctor

’

s s

tatem

ent on w

heth

er it has a r

easo

nable

exp

ectat

ion th

at the G

roup w

ill be abl

e to cont

inue in

ope

ratio

n and me

ets i

ts lia

blites;

•

Directors’ statement on

fair

, balanced and understandable;

•

ard’s conﬁr

maton t

hat it h

as carr

ied ou

t a robu

sess

ment o

f the em

erging an

d prin

cpal ri

sks;

•

The s

ecti

on of the a

nnual r

epor

t that d

escr

ibes t

he review

of effectiveness of risk management and internal control

stem

s; and;

•

The s

ecti

on desc

ribng t

he wor

k of the Aud

it Comm

itte

Responsib

lites of directors

As e

xplain

ed mo

re ful

ly in th

e State

ment of D

irect

ors’

Resp

onsib

lites s

et out on p

age 19

1, th

e direct

ors a

responsible for the preparation of the

ﬁnancal

statem

ents

and fo

r bein

g satis

f

ed tha

t they give a t

rue a

nd fair v

iew

and fo

r such in

tern

al cont

rol as th

e direct

ors d

eter

mine is

nec

essa

y to enab

le the p

repar

ation o

f ﬁnancal s

tatem

ent

tha

t are fre

e fro

m mater

ial mis

stat

ement

, wh

ether d

ue to

fraud or error

In pre

pari

ng the ﬁn

ancal st

ateme

nts

, the d

irecto

rs are

res

pons

ible fo

r asse

ssin

g the G

roup an

d Comp

any’s abilt

y to

cont

inue a

s a going co

ncer

n, disc

losng

, as appl

icable, m

atte

rel

ated to g

oing co

ncern a

nd usin

g the go

ing conc

ern ba

sis

of accounting

unles

s the

director

either intend to liqu

date

the G

roup o

r the C

ompany or t

o ceas

e oper

ation

s, or ha

no re

alist

c alter

nati

ve but to do s

Auditor

’

s r

espon

siblite

s for th

e audit of th

ﬁnancal statement

Our objectves

are to obtain reasonable assuranc

e about

whe

ther t

he ﬁnan

cal stat

ement

s as a w

hole a

re fre

e from

mat

erial m

isst

ateme

nt, w

heth

er due t

o frau

d or erro

, an

d to

issue an auditor’

s report that includes our

opinon. R

easonable

suranc

e is a high leve

l of ass

urance

, but is n

ot a guar

antee

tha

t an audit c

onduc

ted in ac

cordan

ce with I

SAs (U

K) will

alwa

ys det

ect a mat

erial m

isst

ateme

nt whe

n it exis

Mis

stat

ement

s can ar

ise f

rom fr

aud or er

ror and a

con

sidere

d mate

rial if, indvi

duall

y or in the a

ggreg

ate, th

cou

ld reas

onab

ly be ex

pecte

d to inﬂu

ence th

e econ

omic

dec

isons o

f user

s taken on t

he ba

sis of th

ese ﬁn

ancal

statements

plan

atio

n as to w

hat ext

ent t

he aud

it was con

sid

ere

capable of detect

ing irregularties

, includng fraud

Irregularites, includng

raud, a

re instances of non-compl

iance

wit

h laws a

nd regu

latio

ns. We design p

roced

ures in li

ne wit

our responsibli

tes, outlined abov

e, to detect irregularties,

includ

ng fraud. The risk of

not detecting a

material

mis

stat

ement d

ue to fr

aud is hi

gher th

an the r

isk of n

det

ectin

g one re

sultin

g from e

rror, as fra

ud ma

y involve

deliberate concealment b

, for example,

forger

y or intentonal

misrepresentatons, or through collusion. The ex

tent to which

our procedures are

capable of detecting irregularties,

includng

raud is

detailed below

However, the pr

imar

y re

spon

siblit

y fo

r the pr

eventio

n and

det

ectio

n of fra

ud rest

s wi

th bot

h thos

e charg

ed wit

gover

nance o

f the Co

mpany and m

anag

ement

•

e obtained a

n understanding of the

gal

and regulator

amewor

ks th

at are appl

icable t

o the G

roup an

det

ermin

ed th

at the mo

st signﬁc

ant are th

ose th

at rela

to th

e repo

rtin

g fram

ework (UK-ado

pted IA

S and EU IF

RS,

the C

omp

anies Act 200

6 and the U

K Cor

porat

Governanc

e Code, the

Financ

al Conduct A

uthorit

y (F

)

Lis

tng Rule

s, th

e Main Bo

ard Lis

tng Rule

s of the H

ong Kong

Stock Exchange

)

, regulations and

super

visor

y requirements

of th

e Prud

entia

l Regula

tion Aut

hori

ty (PR

, FRC

, FC

A and

other ov

seas regulator

y requi

rement

s, includng

but not

limt

ed to re

gulat

ions in i

ts ma

jor mar

kets s

uch as Ho

ng, India

, Singapore, the

United States of

America, and

the relev

ant tax compliance

regulations in the j

sdic

tons

in whi

ch the G

roup o

perat

es. In a

ddito

n, we conc

lude

d that

the

re are cer

tain si

gnﬁcant la

ws and r

egula

tion

s that m

have a

n eff

ect on th

e dete

rmina

ton of t

he amou

nts a

dis

closu

res in th

e ﬁnancal s

tatem

ent

s and th

ose la

ws and

regulations relating to

regulator

y capital a

nd liqu

dit

conduct, ﬁ

nanc

al crime

includng a

nti-money

laundering,

sanction

s and market abuse recogni

sng the ﬁnancal and

regulated nature of the

Group

’

s activties.

•

e un

der

stoo

d how the G

roup i

s compl

ying w

ith tho

amewor

ks by per

for

ming a com

binat

on of inq

uries o

sen

ior man

ageme

nt and th

ose ch

arged w

ith gover

nanc

as re

quire

d by audit

ng stan

dards

, review o

f board a

committe

e meeting minut

es, gainng an under

standing of

the Group

’

s approach to go

vernance, inspecton of

regulator

y correspondences i

n the y

ear and engagi

ng with

inte

rnal a

nd exter

nal le

gal cou

nsel

s. W

e al

so enga

ged E

ﬁnan

cal crim

e and for

ensic

s spe

cialst

s to pe

rfor

procedures on ar

eas relating to

anti-money laundering,

whistleblo

wng, a

nd sancti

ons

. Th

rough these procedures,

we be

came awar

e of actu

al or sus

pect

ed non-

compl

iance.

The i

dentﬁe

d actu

al or sus

pecte

d non-

complia

nce was no

suf

ﬁcent

ly signﬁca

nt to our a

udit th

at woul

d have res

ulte

in be

ing iden

tﬁed as a key au

dit mat

ter

•

e assessed the

susceptibl

y of

the Group

’

s ﬁnanc

al

statements to material misstatement

, includ

ng how

raud

migh

t occur by co

nside

rng th

e contr

ols th

at the G

roup h

established to addr

ess risks identﬁed b

y the entit

, or

that

oth

wis

e see

k to prevent

, det

er or det

ect f

raud. O

procedures to addr

ess the risks identﬁed

also included

incorporat

ion of

unpredictablit

y into the nature, timng

and/

or ext

ent of ou

r test

ing, ch

alleng

ing as

sumpt

ions an

judgements made by management in their

signﬁcant

accounting

estimates and j

our

nal

entr

y testing.

•

sed on t

his und

ers

tandin

g, we des

igned o

ur aud

procedures to ident

f

y non

-compliance with such laws

and

regulations. Our procedures in

volved inquries of

the Group

’s

internal and e

xternal legal c

ounsel, money laundering

repor

ting ofﬁcer,

ternal audit

, certain senior mana

gement

execu

tives an

d focu

sed te

sting o

n a sampl

e basi

s, inc

ludng

jou

rnal en

y tes

ting

. W

e also p

erfo

rme

d inspe

cton

of k

ey regulatory correspondence from the relev

ant

reg

ulato

y auth

orit

es as wel

l as review o

f boar

d and

committee minutes.

307

Standard Chartered

– Annu

al Repo

rt 2021

Financal statements

•

For instances

of actual or suspected non-compl

iance with

law

s and re

gulat

ions

, which h

ave a mat

erial i

mpact o

n the

ﬁnancal

statem

ents, these were communicated b

management to the Group

audit engagement team

and

component teams (

where applicable

) who perform

ed audit

pro

cedur

es such a

s inqur

ies wi

th mana

geme

nt and

extern

al legal counsel, se

nding conﬁrmatons to exter

nal

law

yers, substantive testing

and meeting with regulators.

Whe

re appro

priat

e, we involve

d speci

alst

s from o

ur ﬁrm t

sup

port t

he aud

it team

•

The Group is authorised to pro

vide banking, insurance,

mortgages and home ﬁnance

, consumer credit, pensions,

inv

estment

and other activti

es. The Group

operates i

n the

ban

king in

dust

y which i

s a highly r

egul

ated env

ironm

ent.

As s

uch, t

he Seni

or Sta

tuto

y Auditor c

onsid

ered t

exp

erie

nce and ex

per

tise o

f the G

roup au

dit eng

ageme

tea

m, the c

ompon

ent te

ams and t

he sha

red ser

vice c

entre

tea

ms to en

sure th

at the t

eam ha

d the app

ropri

ate

comp

eten

ce and cap

abilti

es, wh

ich incl

uded t

he use

of specialsts wh

ere appropriate.

A further descripton of our responsib

lites for the audit

the ﬁ

nancal s

tatem

ent

s is loca

ted on t

he FRC’s webs

ite

at https:

/ww

.frc.org.uk/

auditorsresponsbil

ties. This

descripton forms part of our

auditor

’

s report.

Other matters w

e are

required to a

ddress

•

Foll

owing th

e recom

mend

ation f

rom th

e Audit Co

mmitt

ee,

we were re

-app

ointe

d by the Co

mpany at t

he Annu

neral M

eeti

ng on 12 Ma

y 2021 to audi

t the ﬁna

ncal

statements for the year ending 31

cember 2

021 and

subsequent ﬁnancal periods.

•

The p

erio

d of tot

al unint

err

upte

d enga

gemen

t is t

year

s, cover

ing th

e year

s ende

d 31 Dece

mber 2020 to

31 December 20

21.

•

The audit opi

non is consistent with

additonal

repor

to th

e Audit Co

mmitt

ee.

Use of our report

Thi

s repor

t is ma

de sole

ly to t

he Comp

any’s memb

ers

, as

a bo

, in ac

cordan

ce with Ch

apte

r 3 of Part 16 of t

Com

panie

s Act 2006. O

ur au

dit work h

as bee

n unde

rtaken

so th

at we migh

t state t

o the Co

mpany

’

s me

mber

s tho

mat

ter

s we are req

uired t

o state t

o them in a

n audito

r’s repo

and fo

r no oth

er pur

pos

e. T

o t

he fu

llest e

xtent p

ermit

ted by

law, we do not a

ccept o

r assu

me resp

onsi

blit

y to anyone

oth

er tha

n the Co

mpany and t

he Co

mpany’s memb

s as a

, fo

r our aud

it work

, for th

is rep

ort

, or for t

he opino

ns we

have formed.

David Canning

Jone

(Senior statutor

y auditor

)

for an

d on beh

alf of Er

nst & Y

oun

g LLP

, S

tatu

tor

y Audit

London

17 Feb

ruar

y 202

308

Standard Chartered

– Ann

ual Re

por

t 2021

Financal state

ments

Financ

al statements

Notes

2021

$millon

2020

$millo

Interest

income

10,246

12,292

Interest exp

ense

(3,448)

(5,440)

Net interest

income

6,798

6,852

Fees and

commisson income

4,458

3,865

Fee

s and com

mis

son ex

pens

(736)

(705)

t fee an

d com

mis

son i

ncom

3,722

3,160

Net trading

income

3,431

3,672

Other operating

income

750

1,070

Operating income

14,701

14,754

Staff costs

(7,668)

(6,886)

Premises costs

(387)

(412)

General adminstrati

penses

(1,688)

(1,831)

Depreciaton

and amortisaton

(1,181)

(1,251)

Operating expenses

(10,924)

(10,380)

Operating proﬁt before imparment

losses and taxation

3,777

4,374

Credit imparm

ent

(254)

(2,325)

Goodw

ill

, propert

, plant and equipment

and other imparment

(372)

(587)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

196

151

Proﬁt before

taxation

3,347

1,613

(1,034)

(862)

Pro

ﬁt for t

he yea

2,313

751

Proﬁt attribut

able to:

Non-control

ling interests

(2)

Parent

company shareholders

2,315

724

Pro

ﬁt for t

he yea

2,313

751

cents

Earnings per share:

sic ea

rning

s per o

rdina

y share

61.3

10.4

Diluted earnings

per ordinary share

60.4

10.3

The n

otes o

n page

s 316 to 437 fo

rm an int

egral p

art of t

hese ﬁn

ancal st

ateme

nts

Con

sol

idated

ncome st

atement

For t

he year en

ded 31 D

ecemb

er 2021

309

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

Notes

2021

$millon

2020

$millo

Pro

ﬁt for t

he yea

2,313

751

Other comprehensive (

)

/income:

ems t

hat w

ill no

t be re

cla

ssi

fe

d to in

com

e sta

teme

nt:

309

(9)

n cre

dit gain

(los

ses

) o

n ﬁnanc

al liabl

ites d

esign

ated a

t fair val

ue thr

ough

proﬁ

t or los

(55)

Equity instrument

s at

fair value through

other comprehensive income

169

Actuarial

gains on retirement

eneﬁ

t obligatons

179

ation relating to components of other comprehensiv

e income

(82)

(17)

ems t

hat m

ay be r

ecl

ass

ed s

ubse

que

ntl

y to in

come s

tat

eme

nt:

(1,081)

922

Exchange differences on

translation of foreig

n operations:

Net (

loss

)

ains ta

ken to eq

uit

(791)

657

Net gains

(losses

) on

net inv

estment hedges

118

(287)

Recl

ass

if

ed to in

come s

tatem

ent on s

ale of j

ont vent

ure

–

246

Share of

other comprehensive

income/

(

loss

) from associates

and jo

nt ventures

(37)

Debt instrument

at fair value

hrough

oth

comprehensi

e income:

Net va

luat

ion (lo

sse

)

gain

s taken t

o equi

(386)

815

Reclassifed to income statement

(157)

(431)

Net i

mpac

t of exp

ecte

d cred

it los

ses

sh ﬂow he

dges:

Net l

oss

es taken t

o equi

(1)

(25)

Reclassifed to income statement

ation relating to components of other comprehensiv

e income

(54)

Other comprehensive (

)

/income for

year

, net of tax

ion

(772)

913

otal

comprehensive income

for the year

1,541

1,664

otal

comprehensive income

tributable to

Non-control

ling interests

(17)

Parent

company shareholders

1,558

1,649

otal

comprehensive income

for the year

1,541

1,664

Con

sol

idated

statement of

comprehens

e income

For t

he year en

ded 31 D

ecemb

er 2021

310

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Financ

al statements

Notes

2021

$millon

2020

$millo

Asset

sh and b

alanc

es at cen

tral b

anks

13,35

72,663

66,712

Finan

cal as

set

s hel

d at fair val

ue th

rough p

roﬁt or l

oss

129,121

106,787

Der

ivat

ve ﬁnan

cal ins

tru

ment

13,14

52,445

69,467

Loan

s and ad

vance

s to ban

13,15

44,383

44,347

Loan

s and ad

vance

s to cust

ome

13,15

298,468

281,699

Investment securites

163,437

153,315

Other assets

49,932

48,688

Current tax assets

766

808

Prepaym

ent

and acc

ued

income

2,176

2,122

Interests in

socia

tes and

jont ven

ures

2,147

2,162

Goodwill a

nd intang

ble assets

5,471

5,063

Propert

, plant

and equipment

5,616

6,515

Def

err

ed tax a

sse

859

919

set

s cla

ssi

fe

d as he

ld for s

ale

334

446

otal

ssets

827,818

789,050

Liablites

Dep

osit

s by ba

nks

30,041

30,255

Customer accounts

474,570

439,339

Repurchase agr

eements and other simlar

cured

orrowing

3,260

1,903

Finan

cal liab

lite

s held a

t fair valu

e thro

ugh pr

oﬁt or lo

85,197

68,373

Der

ivat

ve ﬁnan

cal ins

tru

ment

13,14

53,399

71,533

Deb

t sec

urit

es in is

sue

13,22

61,293

55,550

Othe

r liablites

44,314

47,904

Current tax liab

lites

348

660

Accr

uals a

nd def

erre

d inco

4,651

4,546

Subordinated

liab

lites and

other borrow

ed f

unds

13,27

16,646

16,654

Def

err

ed tax l

iablit

es

800

695

Provisons for liablites and charges

453

466

Retirement

beneﬁt obligatons

210

443

otal liablites

775,182

738,321

Equity

Share capital and share premium account

7,022

7,058

Other reserves

11,805

12,688

Retai

arni

ngs

27,184

26,140

otal parent company shareholders’ equit

46,011

45,886

Other equit

inst

ruments

6,254

4,518

otal equity excluding non-cont

rolling interest

52,265

50,404

Non-control

ling interests

371

325

otal equity

52,636

50,729

otal equity and liablites

827,818

789,050

The n

otes o

n page

s 316 to 437 fo

rm an int

egral p

art of t

hese ﬁn

ancal st

ateme

nts

The

se ﬁnan

cal stat

ement

s were a

pproved by t

he Boar

d of Dire

ctor

s and aut

hor

ised f

or iss

ue on 17 Feb

ruar

y 202

2 and si

gned on

s beha

lf by:

Jos

é Viña

ill Win

ter

And

y Half

ord

Group Ch

airman

Gro

up Chief Executi

Group Chief Financal Of

ﬁcer

Consolida

ted b

lance sheet

As a

t 31 Dece

mber 2021

311

Standard Chartered

– Ann

ual Rep

ort 202

Financal statements

Con

sol

idated

statement of

changes in equit

For t

he year en

ded 31 D

ecemb

er 2021

Ordinar

capital

and

premium

account

$millon

Preference

capital

and share

premium

account

$millon

Capital

and

merger

reserves

$millon

Own

credit

adjus-

ment

rese

rve

$millon

Fair

value

through

other

compre-

hensive

income

rese

rve

– debt

$millon

Fair

value

through

other

compre-

hensive

income

rese

rve

– equity

$millon

Cash

ﬂow

hedge

rese

rve

$millon

lation

rese

rve

$millon

Retained

earnings

$millon

Paren

com

pany

share-

holders’

equit

$millon

Other

equit

instru-

ments

$millon

Non-

controlling

interests

$millon

otal

$millon

As a

t 1 Janu

y 2020

5,584

1,494

17,187

197

150

(59)

(5,792)

26,072

44,835

5,513

313

50,661

Pro

ﬁt for t

he yea

–

724

–

751

Other comprehensive (

los

)

/income

–

(54)

332

(2)

631

925

–

(12)

913

Distrbutions

–

(20)

Other equity instrument

s issued,

t of exp

ens

–

992

–

992

Redemption of

her

quity instruments

–

(13)

(1,987)

–

(2,000)

reasur

shares purchased

–

(98)

–

(98)

reasur

shares issued

–

Share option

expens

–

133

–

133

Divdends on preference

shares and



–

(395)

–

(395)

Share buy

-back

(20)

–

(242)

–

(242)

Other movements

–

(60)

–

As a

t 31 De

cemb

er 202

5,564

1,494

17,207

(52)

529

148

(52)

(5,092)

26,140

45,886

4,518

325

50,729

Pro

ﬁt/

(

los

) for t

he ye

–

2,315

–

(2)

2,313

Other comprehensive inc

(loss

)

–

(426)

101

(662)

175

(757)

–

(15)

(772)

Distrbutions

–

(31)

Other equity instrument

s issued,

t of exp

ens

–

2,728

–

2,728

Redemption of

her

quity instruments

–

(51)

(992)

–

(1,043)

reasur

shares purchased

–

(242)

–

(242)

reasur

shares issued

–

Share option

expens

–

147

–

147

Divdends on

ordinar

–

(374)

–

(374)

Divdends on preference

shares and



–

(410)

–

(410)

Share buy

-back

6, 7

(39)

–

(506)

–

(506)

Other movements

–

(17)

(4)

–

As a

t 31 De

cemb

er 202

5,528

1,494

17,246

(15)

103

249

(34)

(5,744)

27,184

46,011

6,254

371

52,636

clud

es ca

pita

l res

ve of $5 m

ill

on, ca

pit

al red

emp

tio

n res

ve of $

130 mi

llon a

nd me

rge

r rese

ve of $17,111 mill

on

mpr

ise

s act

uar

ial ga

in, n

et of t

axat

ion on G

up deﬁ

ned b

ene

ﬁt sch

eme

On 2

8 Febr

uar

y 2020

, the G

rou

p anno

unc

ed th

e bu

y-ba

ck pro

gram

me fo

r a sha

re bu

y-ba

ck of it

s or

dina

y shar

es of $

0.50 e

ach

. Nom

ina

l valu

e of sha

re pu

rcha

was $

20 mill

on, a

nd th

e tot

al con

sid

erat

on p

aid wa

s $242 mill

on

. The to

tal n

umb

er of s

hare

s pur

cha

sed w

as 40,029,585 r

epre

sen

tin

g 1.25 pe

r cent o

f the o

rdi

nar

ares i

n iss

ue. T

he no

mina

l valu

e of th

e sha

res wa

s tran

sfe

rre

d fr

om th

e shar

e capi

tal t

o the ca

pit

al red

emp

tio

n res

ve acc

oun

t. O

n 1 Apr

il 2020, th

e Gro

announced that, in

response to a request

rom

Prudential Regulation A

hority and as

a consequence of the

unprecedented challenges facing

the world due

to t

he COVID

19 p

and

emi

c, it

s Bo

ard ha

d dec

ide

d aft

er car

ul con

sid

erat

on t

o wit

hdra

w the r

eco

mme

ndat

ion t

o pa

y a ﬁnal d

ivd

end f

or 2019 o

f 20 cen

ts p

dina

ry s

har

e, and t

o sus

pen

d the b

uy-b

ack p

rog

ramm

clud

es $

69 mill

on re

lat

ed to p

rio

r per

iod a

djus

tme

s to re

cla

ss FX m

ovem

ent

s fr

om tra

nsl

ati

on re

ser

ve t

o reta

ine

d ear

nin

gs ($45 m

illo

n rel

ate

d to FX

mov

emen

ts o

f the h

edg

ing in

str

ent

s for n

et inv

est

ment h

ges an

d $24 mil

lon re

lat

ed to F

X move

men

ts f

or mo

neta

y ite

ms, w

hic

h were co

nsi

der

structural positons

)

Move

men

t rela

ted t

o non

-con

tro

llin

g int

eres

t fro

m Mox B

ank Li

mte

n 25 Fe

bru

y 2021

, the G

rou

p ann

oun

ced t

he bu

y-ba

ck pro

gra

mme f

or a sha

re bu

y-ba

ck of i

ts or

din

y sha

res o

f $0.50 eac

h. No

mina

l valu

e of sh

are pu

rch

ase

was $

19 mil

lon

, and t

he to

tal co

nsi

der

ato

n paid w

as $255 mill

on (inc

lud

ng $2 mi

llo

n of fe

es and s

tam

p dut

. T

he to

tal n

umb

er of sh

are

s pur

chas

ed wa

37,148,399 re

pre

sent

ing 1.18 pe

r cent o

f the o

rdin

y sh

ares i

n iss

ue. T

he no

mina

l valu

e of th

e shar

es wa

s tran

sfe

rre

d fr

om th

e shar

e capi

tal t

o the ca

pit

redemption reserve account

On 3 A

ugu

st 2021

, the G

rou

p ann

oun

ced th

e bu

y-ba

ck pro

gram

me fo

r a sha

re bu

y-ba

ck of it

s or

dina

y shar

es of $

0.50 each

. No

mina

l valu

e of sh

are pu

rch

ase

was $

20 mill

on, a

nd th

e tot

al con

sid

erat

on p

aid wa

s $251 m

illo

n (incl

udn

g $1 mil

lon o

f fee

s and s

tamp d

). Th

e tot

al nu

mbe

r of sh

ares p

urc

has

ed wa

39,914,763 re

pre

sen

ting 1.28 per ce

nt of t

he or

dina

y shar

es in i

ssu

e. Th

e nomi

nal va

lue o

f the s

hare

s was t

rans

fer

red f

m the s

hare c

apit

al to t

he cap

ital

redemption reserve account

veme

nt re

late

d to T

ans

lati

on ad

just

men

t and A

T1 s

ecu

rit

es ch

arg

ovem

ent

s rel

ate

d to no

n-co

ntr

olli

ng int

ere

st fr

om Mox B

ank L

imt

ed ($21 m

illo

), T

ust B

ank Si

nga

por

e Lim

ted ($70 mi

llo

) an

Zod

ia Mar

ket

s Ho

ldin

gs Li

mte

d ($3mil

lon)

Not

e 28 inclu

des a de

scri

pton of e

ach res

ve.

The n

otes o

n page

s 316 to 437 fo

rm an int

egral p

art of t

hese ﬁn

ancal st

ateme

nts

312

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Financ

al statements

Notes

Group

Comp

2021

$millon

2020

$millo

2021

$millon

2020

$millo

Cash ﬂow

s from operating activties:

Proﬁt b

efor

e taxat

ion

3,347

1,613

2,090

666

Adjustments for

non-cash items

and other

adjustments included

withn income

statement

2,104

4,342

(1,201)

Cha

nge in op

erat

ing as

set

(37,904)

(38,064)

(5,366)

(8,451)

Change in operat

ing liablites

45,952

54,437

3,127

6,415

Contributons to

deﬁned beneﬁt

che

mes

(120)

(123)

–

UK an

d overs

eas t

axes pa

(1,161)

(971)

–

Net cash from

(

use

in) operating activties

12,218

21,234

(1,350)

(1,348)

sh ﬂows fr

om inves

tn

g act

ivt

ies:

Internally

generated c

apitalsed software

(989)

–

Purchase of property

, plant and equipment

(352)

(1,270)

–

Disposal of property,

plant and equipment

816

178

–

Dis

pos

al of hel

d for s

ale pro

per

ty, plant a

equipment

149

–

Acqui

stio

n of inves

tmen

t in subs

idar

ies

, asso

ciat

es,

and j

ont vent

ures

, net o

f cash a

cquir

(35)

(52)

–

Divdends rece

rom

subsidaries, associates

and

jont v

ent

ures

–

2,244

1,110

Dis

pos

al of jon

t ventu

res

, net of ca

sh acq

uired

–

1,066

–

Purchase

of inv

estment securites

(299,468)

(285,026)

–

Dis

pos

al and ma

tur

y of inves

tmen

t secu

rite

290,846

280,626

1,650

2,590

t cas

h (

ed in)

/fro

m inv

tn

g act

ivt

ies

(8,995)

(4,478)

3,894

3,700

sh ﬂows fr

om ﬁn

anc

ng ac

tiv

tie

Exercise of sha

re options

Pur

chas

e of own sh

ares

(242)

(98)

(242)

(98)

Cancellation

of shares inc

ludng share

-back

(506)

(242)

(506)

(242)

Prem

ises a

nd equ

ipme

nt lea

se liab

lit

princ

pal paymen

(278)

(319)

–

sue of Ad

dito

nal T

ier 1 Ca

pital

, net of e

xpen

ses

2,728

992

2,728

990

Redemption

of Add

itonal T

ier 1 Capital

(1,043)

(2,000)

(1,043)

(2,000)

oss pr

ocee

ds fr

om is

sue of s

ubor

dinat

ed liab

lite

1,137

2,473

1,137

2,473

Interest paid on subo

rdinated liablites

(580)

(601)

(580)

(537)

Repaym

ent

of s

ubordi

nated li

ab

lites

(546)

(2,446)

(546)

(1,402)

Proceeds from issue

of senior debts

10,944

9,953

2,250

2,193

Repayment of senior

debt

(9,945)

(4,305)

(5,408)

(2,106)

Int

eres

t paid on s

enio

r debt

(690)

(627)

(504)

(575)

Net cash inﬂow from non-co

ntrolling interest

–

Divdends paid

to non-control

ling interests,

preference shareholders and A

T1 securites

(441)

(415)

(410)

(395)

Divdends paid to

ordinary shareholder

(374)

–

(374)

–

t cas

h from/

(use

d in) ﬁnanc

ng a

cti

vti

265

2,373

(3,491)

(1,691)

t incr

(

ecr

) in c

ash a

nd ca

sh eq

uivale

3,488

19,129

(947)

661

sh and ca

sh eq

uivale

nts a

t beg

innng o

f the ye

97,874

77,454

12,283

11,622

fect o

f exchan

ge rate m

ovemen

ts o

n cash an

cash equivalents

(1,757)

1,291

–

sh and c

ash e

qui

valent

s at e

nd of t

he year

99,605

97,874

11,336

12,283

mpr

ise

s cas

h and ba

lan

ces at c

ent

ral ba

s $72,663

mil

lon (

31 De

cemb

er 2020: $

66,712

mill

on)

, T

asu

ry b

ill

s and ot

her e

lig

ble bi

lls $9,132

mill

on (3

1 Dece

mbe

2020: $

10,499 m

ill

), lo

ans a

nd ad

vanc

es to b

ank

s $24,788

mil

lon (

31 De

cemb

er 2020: $

25,758 m

illo

), tr

adin

g sec

uri

te

s $1,174

ill

on (31 D

ece

mbe

r 2020:

2,239 mil

lon) les

s res

tri

cte

d bala

nce

s $8,152

mill

on (31 D

ece

mbe

r 2020: $

7,341 mi

llon)

Inte

rest re

ceive

d was $10,167

illon (31 D

ecemb

er 2020: $12,619 millo

)

, i

ntere

st paid wa

s $3,591

mil

lon (31 De

cembe

r 20

20:

$5,809

llon

sh ﬂo

statement

For t

he year en

ded 31 D

ecemb

er 2021

313

Standard Chartered

– Ann

ual Rep

ort 202

Financal statements

omp

balan

eet

For t

he year en

ded 31 D

ecemb

er 2021

Notes

2021

$millon

2020

$millo

Non-current asse

Inv

estments in subsidary undertakings

60,429

57,407

Current assets

Der

ivat

ve ﬁnan

cal ins

tru

ment

320

971

Finan

cal as

set

s hel

d at fair val

ue th

rough p

roﬁt or l

oss

15,647

12,783

Investment securites

9,424

11,146

Amounts owed by

subsidar

y undertakings

11,336

12,283

–

otal

current asset

36,727

37,192

Current liablites

Der

ivat

ve ﬁnan

cal ins

tru

ment

339

360

Amounts owed to subsid

ar

y undertakings

–

212

Finan

cal liab

lite

s held a

t fair valu

e thro

ugh pr

oﬁt or lo

11,804

6,552

Other credit

ors

462

465

otal current liablites

12,605

7,589

Net curren

t assets

24,122

29,603

al as

set

s les

s cur

ren

t liab

lit

es

84,551

87,010

Non-

current liablites

Deb

t sec

urit

es in is

sue

16,809

20,701

Subordinated

liab

lites and

other borrow

ed f

unds

13,830

14,783

otal non-curre

nt liablites

30,639

35,484

otal asset

s less liablites

53,912

51,526

Equity

Share capital and share premium account

7,022

7,058

Other reserves

17,220

17,178

Retai

arni

ngs

23,418

22,774

otal shareholders

’ equity

47,660

47,010

Other equit

inst

ruments

6,252

4,516

otal equity

53,912

51,526

The C

ompa

ny has taken a

dvanta

ge of th

e exempti

on in se

ction 4

08 of th

e Comp

anies Act 20

06 not t

o prese

nt it

s indv

idual

sta

temen

t of comp

rehen

sive inc

ome and r

elate

d note

s that f

orm a pa

rt of th

ese ﬁn

ancal st

ateme

nts

. The C

ompany p

roﬁt for

the ye

ar aft

er tax i

s $2,081 m

illon (31 De

cemb

er 202

0: $659 mi

llon

). Pleas

e see No

te 39 Sta

ndard Ch

arte

red PL

C (

mpany

) fo

details of the

roup r

eorganisaton.

The n

otes o

n page

s 316 to 437 fo

rm an int

egral p

art of t

hese ﬁn

ancal st

ateme

nts

The

se ﬁnan

cal stat

ement

s were a

pproved by t

he Boar

d of Dire

ctor

s and aut

hor

ised f

or iss

ue on 17 Feb

ruar

y 202

2 and si

gned on

s beha

lf by:

Jos

Viñ

als

Bil

Wint

ers

And

Half

ord

Group Ch

airman

Gro

up Chief Executi

Group Chief Financal Of

ﬁcer

314

Standard Cha

tered

– Annu

al Repo

rt 2021

Financal state

ments

Financ

al statements

capital

and share

premium

account

$millo

Capital

and merger

ser

e¹

$millo

Own credit

adjustment

res

$millo

sh ﬂow

hedge

res

$millo

Retained

earnings

$millo

Other equity

instrument

$millo

otal

$millo

As a

t 1 Janu

y 2020

7,078

17,187

(10)

–

22,722

5,513

52,490

Proﬁt f

or the ye

–

659

–

659

Other comprehensive loss

–

(8)

(11)

–

(19)

her eq

uit

y ins

tru

ment

s is

sue

d, net o

f expe

nses

–

990

reasury shares purchased

–

(98)

–

(98)

reasury shares issued

–

Share option

exp

ense

–

133

–

133

Divdends on preference

share and A

1 securites

–

(395)

–

(395)

Redemption of

ther equity instrument

–

(13)

(1,987)

(2,000)

Share buy-back

(20)

–

(242)

As a

t 31 Dec

emb

er 2020

7,058

17,207

(18)

(11)

22,774

4,516

51,526

Proﬁt f

or the ye

–

2,081

–

2,081

Other comprehensive income

(loss

)

–

(1)

–

her eq

uit

y ins

tru

ment

s is

sue

d, net o

f expe

nses

–

2,728

reasury shares purchased

–

(242)

–

(242)

reasury shares issued

–

Share option

exp

ense

–

147

–

147

Divdends on

ordinar

y s

hares

–

(374)

–

(374)

Divdends on preference

share and A

1 securites

–

(410)

–

(410)

Redemption of

ther equity instrument

–

(51)

(992)

(1,043)

Share buy-back

4,5

(39)

–

(506)

Other movements

–

(8)

(5)

As a

t 31 Dec

emb

er 2021

7,022

17,246

(14)

(12)

23,418

6,252

53,912

clud

es ca

pita

l res

ve of $5 m

ill

on, ca

pit

al red

emp

tio

n res

ve of $

130 mi

llon a

nd me

rge

r rese

ve of $1

1 mill

on

On 28 F

ebr

uar

y 2020, t

he G

rou

p anno

unc

ed th

e bu

y-bac

k pro

gram

me fo

r a shar

e bu

y-ba

ck of it

s or

dina

ry s

har

es of $

0.50 e

ach

. Nom

inal v

alue o

f sha

re pu

rcha

ses

was $

20 mill

on, a

nd th

e tot

al con

sid

erat

on p

aid wa

s $242 mill

on

. The to

tal n

umb

er of s

hare

s pur

cha

sed w

as 40,02

585 r

epre

sen

tin

g 1.

25 pe

r cent o

f the o

rdi

nar

ares i

n iss

ue. T

he no

mina

l valu

e of th

e sha

res wa

s tran

sfe

rre

d fr

om th

e shar

e capi

tal t

o the ca

pit

al red

emp

tio

n res

ve acc

oun

t. O

n 1 Apr

il 2020, th

e Gro

announced that, in

response to a request

rom

Prudential Regulation A

hority and as

a consequence of the

unprecedented challenges facing

the world due

to t

he COVID

19 p

and

emi

c, it

s Bo

ard ha

d dec

ide

d aft

er car

ul con

sid

erat

on t

o wit

hdra

w the r

eco

mme

ndat

ion t

o pa

y a ﬁnal d

ivd

end f

or 2019 o

f 20 cen

ts p

dina

ry s

har

e, and t

o sus

pen

d the b

uy-b

ack p

rog

ramm

clud

es di

vd

end r

ecei

ved o

f $1,

511 mi

llo

n fro

m Sta

ndar

d Char

red H

oldi

ngs L

imt

On 2

5 Feb

rua

y 2021, t

he G

roup a

nno

unc

ed th

e buy

-bac

k pro

gram

me fo

r a shar

e bu

y-bac

k of it

s ord

inar

y s

har

es of $0

.50 e

ach

. Nom

inal v

alue o

f sha

re pu

rcha

ses

was $

19 mil

lon

, and t

he to

tal co

nsi

der

ato

n paid w

as $2

55 mill

on (inc

lud

ng $2 mi

llo

n of fe

es and s

tam

p dut

. T

he to

tal n

umb

er of sh

are

s pur

chas

ed wa

,148

99 re

pre

sent

ing 1

.18 pe

r cent o

f the o

rdin

y sh

ares i

n iss

ue. T

he no

mina

l valu

e of th

e shar

es wa

s tran

sfe

rre

d fr

om th

e shar

e capi

tal t

o the ca

pit

redemption reserve account

On 3 Au

gust 2

021, t

he Gr

oup a

nnou

nce

d the b

uy-b

ack p

rog

ramm

e for a s

hare b

uy-

bac

k of it

s ordi

nar

y s

hare

s of $0.

50 e

ach. N

omi

nal va

lue o

f shar

e pur

cha

ses

was $

20 mill

on, a

nd th

e tot

al con

sid

erat

on p

aid wa

s $251 m

illo

n (incl

udn

g $1 mil

lon o

f fee

s and s

tamp d

). Th

e tot

al nu

mbe

r of sh

ares p

urc

has

ed wa

,91

4,763 re

pre

sen

ting 1

8 per ce

nt of t

he or

dina

y shar

es in i

ssu

e. Th

e nomi

nal va

lue o

f the s

hare

s was t

rans

fer

red f

m the s

hare c

apit

al to t

he cap

ital

redemption reserve account

ovem

ent ma

inl

y rel

ate

d to A

1 secu

rit

es c

harg

Not

e 28 inclu

des a de

scri

pton of e

ach res

ve.

The n

otes o

n page

s 316 to 437 fo

rm an int

egral p

art of t

hese ﬁn

ancal st

ateme

nts

Compan

y st

atement of changes

in equit

For t

he year en

ded 31 D

ecemb

er 2021

315

Standard Chartered

– Ann

ual Rep

ort 202

Financal statements

Contents

– Notes

to the ﬁnanc

al statements

Section

Note

Pag

Basis of preparation

Accountin

g polices

316

Performance

return

egmental i

nformaton

318

Net interest

income

Net fees and

commisson

324

Net trading

income

326

Other operating

income

327

Operating expenses

327

Credit imparm

ent

Good

will,

proper

, plant and equipment

and other imparment

332

333

Divdends

337

Earnings per ordinar

y share

338

set

s an

d liab

lit

es he

ld at f

air valu

Financal instr

ument

Der

ivat

ve ﬁnan

cal ins

tru

ment

365

Financal

inst

ruments held

at amortised cost

Loa

ns and a

dvance

s to ba

nks an

d cust

omer

Rev

se repurc

hase and repurchase ag

reements includng other

simlar lending and borrowin

her a

ets a

nd inves

tme

nts

Goodwill and

intang

ble assets

378

Propert

, plant

and equipment

Leased assets

384

Other assets

385

s held f

or sale a

nd as

socia

ted li

ablit

es

386

Funding,

accru

als, pro

visons

cont

ingent

liablites and legal procee

dings

Deb

t secu

rite

s in is

sue

387

her liablites

388

Provison

s for liab

lit

es and charges

388

Contingent liablites and

commitme

nts

389

Legal

and regulator

y matters

390

Capital instr

uments, equit

y and reserves

Subordinated li

ablites

and other borrowed

unds

Share capital

, other equ

y instruments and rese

ves

392

Non-control

ling interests

397

Employ

ee beneﬁts

Retirement

beneﬁt obligatons

398

Share-

based payments

403

Scope of consolidaton

Investments in

subsidar

undertakings, jont v

entures and associates

407

Structured entit

412

Cash ﬂow

stat

ement

Cash ﬂow statement

sh and ca

sh eq

uivale

Other disclosure matter

arty transactions

st bal

ance sh

eet even

Auditor’s

remuneration

andard Chartered PL

C (

ompany

)

elated undertakings

of the Group

421

316

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

1. Account

ing police

Statement of compliance

The Group ﬁ

nancal sta

tement

s c

onsolidate Standard

Char

tere

d PL

C (

he Co

mpany

) and i

ts su

bsida

ries (toget

her

ref

erre

d to as th

e Grou

) and equ

y accoun

t the G

roup

’s

interests in associates and jontly c

ontrolled entites. The

Company ﬁnanc

al statement

s present i

nfor

maton a

out

the C

omp

any as a sep

arate en

tit

The G

roup ﬁ

nancal s

tatem

ent

s have be

en pre

pared i

accordance

ith

UK-adopted i

nter

natona

l accounting

standards

and International

Financ

al Reporting Sta

ndards

(IFRS) a

s adopt

ed by the Eu

rope

an Union (EU IF

RS)

. T

Company ﬁnanc

al statement

s have

een prepared

accordance

ith

UK-adopted i

nter

natona

l accounting

stan

dards a

s appli

ed in conf

ormi

ty w

ith se

ction 4

08 of t

Com

panie

s Act 2006. T

he ﬁnan

cal stat

emen

ts ha

ve been

prep

ared i

n accord

ance wit

h the re

quire

ment

s of th

Com

panie

s Act 2006.

The

re are no s

ignﬁcant dif

fer

ences b

ween U

-ad

opte

intern

atonal accounting st

andards and EU IFRS.

The f

ollowi

ng par

ts of t

he Ris

k review an

d Capit

al review

for

m par

t of the

se ﬁnanc

al state

ment

) Ris

k review: D

isclo

sure

s marked a

s ‘

udite

d’ f

rom th

e star

of th

e Credi

t Risk se

ction (p

age 200) to the en

d of Ot

her

pri

ncpal r

isk

s in the sa

me sec

tion (p

age 25

7).

) Capi

tal revi

ew: T

ables ma

rked as ‘aud

ited

’ fro

m the sta

of ‘CRD C

apita

l base’ t

o the en

d of ‘Move

ment in t

otal

capit

al’

, excl

uding ‘

otal r

isk

-we

ighte

d asse

ts’ (p

ages 289

to 290

)

Basis of preparation

The G

roup a

nd Com

pany ﬁnan

cal stat

ement

s ha

ve been

prep

ared o

n a going co

ncer

n basi

s and und

er the h

istor

cal

cost c

onventio

n, as mo

dif

ed by th

e revaluat

ion of ca

sh-

settled sha

re-based

payments, fair v

alue through

other

comprehe

nsive income, and ﬁnancal asse

ts and liablites

(

incl

udng de

rivat

ves

) at fai

r value th

rough pr

oﬁt or los

The consolidated ﬁnanca

l statements are presented in

Unit

ed Sta

tes dol

lars ($), being t

he pres

entat

ion cur

renc

of th

e Grou

p and f

uncti

onal cur

renc

y of th

e Comp

any

, and

all valu

es are ro

unde

d to the n

eares

t millon do

llar

s, excep

when otherwise indcated.

The G

roup h

as as

ses

sed th

e impac

t of clima

te ris

k on the

Gro

’s ﬁnancal r

epor

t. A

s set ou

t on pag

e 6

7 o

f the T

ask

Force for

Climate related F

inancal Disclosures a

nd pages

278 and 2

79 of th

e Princp

al Risk

s and Unc

erta

intes s

ectio

of th

e Annu

al Repor

t, th

e Gro

up has de

term

ined c

limate

sk to be a Pr

imar

y Int

egrat

ed Ris

k T

pe. Th

e areas o

imp

act were cr

edit ri

sk and t

he impa

ct on len

ding

por

tfo

lios; E

SG feat

ures w

ithn is

sue

d loans a

nd bon

ds;

physica

l risk on our mortgage lending portfolio

; and, the

cor

porat

e plan

, in resp

ect of wh

ich for

war

d look

ing cas

ﬂows im

pact t

he recover

abilt

y of cer

tain a

sset

s, i

nclud

ng

of go

odw

ill, def

erre

d tax as

set

s and inves

tmen

ts in

subsid

y undertakings.

Thi

s asse

ssm

ent was un

dert

aken by cons

idern

g the

mat

urit

y pr

oﬁle of t

he loan p

ort

folio w

hich is ma

jort

y sh

ort

ter

m. T

ransi

ton ri

sk, a

s our cli

ent

s move to lower ca

rbon

emittng rev

enues is considered with reference to client

tran

sito

n pathwa

ys and ma

nifest

s over a lo

nger te

rm th

the m

atur

y of th

e loan bo

ok (

up to 205

). Ph

sical r

isk is

already included with

n the majort

of our mortgage

lending and we have applie

d scenario analysi

s against the

pathways of di

ferent temperature additons

and countr

pol

icy s

cenar

ios. W

e als

o asse

ss th

e impac

t of clima

te ris

k on

the c

lass

catio

n of ﬁnanca

l instr

ume

nts u

nder IF

RS 9

, when

Environment

al, Sustainablit

y or Governance (ESG) trigge

y affe

ct the ca

sh ﬂows re

ceive

d by the Gr

oup un

der the

contractual terms of the instrument.

r corp

orate pl

an has a 5 ye

ar outl

ook an

d alread

incl

udes w

here we h

ave comm

itted t

o tran

sitoni

ng away

fro

m cert

ain high ca

rbon s

ecto

rs (i.e. coal), off

set by

transiton ﬁ

nance opport

unit

es. This is

shorter term than

many of t

he clim

ate sce

nario o

utlo

oks b

ut se

eks to

capt

ure th

e neare

r term p

erf

orman

ce as re

quire

d by

recoverabil

y model

e ha

ve fur

the

r part

icpat

ed in the ﬁ

rst Cli

mate Bi

ennal

ploratory Scenario (

CBES) to e

plore

key risks from climate

chan

ge, bei

ng tran

siton r

isk of t

he eco

nomy as it m

oves

awa

y from ca

rbon a

nd the p

hysical r

isks a

sso

ciate

d with

high

er glob

al temp

erat

ures

. Focus

sed on c

redit r

isk in th

loans and ad

vances portfo

lio to corporate and instt

utional

clie

nts a

s well as p

ers

onal cus

tome

rs over a th

irt

y year t

ime

horizon. Estimates included the im

pact of transi

ton risk on

the G

roup’

s len

ding po

rtf

olios w

ith imp

act

s moving f

rom

tem

porar

ily lowe

r growth u

p to rece

ssio

n and per

mane

ntly

lower gr

owth.

r proce

ss was limt

ed in th

e conte

xt of this b

eing an

emerging are

a, particular

ly given of the availablit

y of data

and t

he soph

istca

tion of m

odel

s, and s

o the p

otent

ial

imp

act of Clim

ate Ris

k may no

t be f

ully reﬂ

ecte

d in thes

ﬁnan

cal stat

ement

s. T

he Gr

oup con

sider

s Clima

te Risk t

have l

imted im

pact in t

he imme

date t

erm and a

s a long

ter

m ris

k will be a

ddres

sed t

hrough i

ts bu

sine

ss stra

teg

and ﬁn

ancal pl

anning a

s the G

roup im

pleme

nts i

ts ne

Notes

to the ﬁnanc

al statements

317

Standard Chartered

– Ann

ual Rep

ort 202

Financal statements

1. Account

ing police

continued

Signﬁcant accountin

stimates and judge

ments

In de

termi

nng the c

arr

ng amou

nts o

f cert

ain ass

s and

liabl

ites

, the G

roup ma

kes assu

mpti

ons of t

he eff

ect

s of

unce

rtai

n fut

ure event

s on t

hose a

sset

s and l

iablite

s at the

bal

ance she

et dat

e. The G

roup

’s esti

mates a

nd ass

umpt

ions

are b

ased o

n histo

rcal ex

peri

ence and e

xpe

ctatio

n of fu

ture

event

s and ar

e reviewe

d peri

odcall

. Furt

her inf

orma

ton

abo

ut key ass

umpti

ons con

cerni

ng the f

utu

re, and o

ther key

sou

rces of e

stima

ton un

cert

aint

y and ju

dgeme

nt, ar

e set

out i

n the rel

evant dis

closu

re note

s for th

e follow

ing are

as:

•

Cre

dit impar

ment

, inc

ludng eval

uatio

n of mana

geme

overlays and post

-model adjustment

s, and determinaton

of pro

babilt

y wei

ghtng

s for St

age 3 ind

vidu

ally as

ses

sed

prov

ison

s (Not

e 8

)

•

axation (

Note 10

)

•

Financ

al inst

rume

nts m

eas

ured at f

air value (N

ote 13)

•

Goodwill

impa

rment (N

ote 17)

•

Reco

verable

amounts for air

craft operating

lease asset

(Note 18

)

•

Provi

sons fo

r liablit

es and ch

arges (N

ote 24

)

•

Inv

stments in subsida

y undertakings, jont v

entures and

socia

tes – Chin

a Bohai a

sso

ciate a

ccount

ing and

imparment analysis (Note

32)

IFRS

and Hong K

ong accounting requirements

As r

equir

ed by the H

ong Kong Li

stng Rul

es, an e

xplan

ation

of th

e diff

erenc

es in acco

untin

g pract

ices be

twe

en UK-

adopted IFR

S and Hong K

ong Fi

nancal R

eporting Standards

is re

quire

d to be dis

clos

ed. Th

ere woul

d be no si

gnﬁcant

dif

feren

ces ha

d thes

e accoun

ts b

een pre

pare

d in

accorda

nce with Hong K

ong Fi

nancal R

eporting Standards.

Comparatives

Cer

tain co

mpara

tives h

ave be

en rest

ated in l

ine wit

h curre

year di

sclo

sures

. Deta

ils of th

ese ch

anges a

re set ou

t in the

rel

evant sect

ions an

d note

s below

•

Note 2 Segmental informaton

•

Not

e 4 Net fe

es and co

mmis

son

•

Note 13 Financal instru

ments

•

Not

e 17 Goo

dwi

ll and int

angble a

sse

•

Risk r

eview: var

ious c

redit r

isk tab

les fo

r chang

e in

segme

nt policy

•

Risk r

eview: in

tere

st rate r

isk in th

e bank

ing bo

•

Risk re

view: tables ma

rked as ‘

audited’ disaggregating

Credit Risk

informaton by

client segment have

een

res

tated f

ollowi

ng the G

roup

’

s c

hange i

n organi

sato

nal

str

uct

ure tha

t came int

o eff

ect on 1 Jan

uar

y 2021

•

Risk r

eview: m

arket r

isk chan

ges

New ac

coun

ting s

tan

dard

s ado

pte

d b

y th

e Gro

Amendments to IFRS

16 Leases: Covid-

19-R

elated Rent

Concessions bey

ond 30 June 2

021

The G

roup h

as ado

pted a

mendm

ent

s to IFRS 16 t

hat pe

rmit

the G

roup n

ot to as

ses

s whet

her a re

nt conce

ssio

n grante

as a dir

ect con

sequ

ence of t

he CO

ID-

19 p

andem

ic is

acco

unte

d for as a le

ase m

odif

cati

on. In M

arch 2021 the

IAS

B exten

ded th

e availab

lit

y of the p

ractic

al expe

dient by

one ye

ar and th

is was end

ors

ed by the U

K Endo

rse

ment

ard on 12 Ma

y 2021, the

refor

e a rent con

cess

ion is de

eme

to be a d

irect co

nseq

uence o

f CO

D-

19 if an

d only if al

l the

foll

owing cr

iter

a are met

•

A chan

ge in le

ase pa

ymen

ts re

sult

s in revi

sed

con

sidera

ton for t

he le

ase th

at is sub

stant

ially t

sam

e as, or l

ess t

han, th

e cons

iderat

on for t

he lea

immedate

ly preceding the chan

ge;

•

Any

reduction

in lease

payments affec

ts only payme

ignally d

ue up to an

d inclu

dng 30 J

une 2022 (this

includes the

case where the c

hange results in reduc

lease payments before

this date a

nd increased lease

ymen

ts af

ter th

is date

); and

•

There is

no substantive

change t

o other te

rms and

conditons of

the lease

The a

mendm

ent

s have no

t had a ma

teri

al eff

ect on th

Group

’

s ﬁnancal statements.

New ac

coun

ting s

tan

dard

s in is

sue b

ut not ye

t effe

cti

IFRS 17 In

sur

ance Co

ntr

acts

IFRS 17 I

nsura

nce Con

tract

s was is

sue

d in May 2017 t

replace IFR

S 4 Insura

Cont

rac

s and to

establish a

comprehensive standard for

inceptor

s of

insurance polic

es.

The e

ffe

ctive d

ate is 1 Jan

uar

y 2023

. The G

roup is a

sse

ssing

the lik

ely implementaton impact of

adopting the standards

on its ﬁnancal

statem

ents.

Ame

ndmen

ts to I

FRS 9 Finan

cal Ins

tru

ment

s: Fees i

n the

’

10 per cent

’ test for de

recogniton of ﬁnan

cal liablites

In Ma

y 20

20 t

he IAS

B publi

shed it

s 2018

202

0 annu

improv

ents process which pro

ides non

-urgent but

neces

sar

y amendment

s to IFRS. This publicat

on included

chan

ges to I

FRS 9 that w

ill be ef

ctive pro

spe

ctivel

y from

1 Janu

y 2022

, with e

arly a

dopt

ion per

mitt

ed. Un

der th

ese

ame

ndmen

, when a

sses

sing c

hange

s in ter

ms of a

ﬁnan

cal liabli

ty, the onl

y fees c

onsid

ered in t

he as

sess

ment

of wh

ethe

r the te

rms o

f a new or mo

dif

ed ﬁnan

cal liabli

are su

bstan

tiall

y diffe

rent (i.e. a chan

ge in pre

sent valu

e of

mor

e than 10 p

er cent) fro

m the te

rms of t

he or

ignal

ﬁnan

cal liabli

ty a

re fees p

aid or re

ceive

d bet

wee

n the

bor

rower or l

ender. This in

clud

es fee

s paid or r

eceive

d by

eith

er the b

orrowe

r or len

der on th

e othe

r’s beha

. The e

ffe

of th

ese am

endme

nts i

s not ex

pecte

d to be m

ater

ial to th

Group

’

s ﬁnancal statements.

318

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

1. Account

ing police

continued

Going concern

The

se ﬁnan

cal stat

ement

s were a

pproved by t

he Boa

rd of

Dire

ctor

s on 17 Feb

ruar

y 202

2. Th

e direc

tors h

ave mad

e an

sess

ment o

f the Gr

oup

’s abilt

y to con

tinue a

s a goin

conc

ern. T

his as

ses

sment h

as be

en mad

e havi

ng cons

idere

the impact of

VID-

, macroeconomic and geopolitca

headwinds, includ

ng:

•

A revi

ew of the G

roup S

trate

gy and C

orp

orate Pl

an, bo

of wh

ich cover a year f

rom t

he date o

f signng t

he annu

report

•

An as

ses

smen

t of the a

ctual p

erfo

rman

ce to dat

e, loan

book quality

, credit imparment, legal,

regulator

y and

compliance

matt

ers, and the updated

annual budget

•

Consideraton of stress testing performed, includng both

the B

ank of En

gland an

nual st

ress t

est an

d a Grou

Recover

y an

d Resol

ution Pl

an (RRP) as submi

tted t

o the

PRA

. Both these submiss

ons include the a

pplicaton of

stressed scenarios

includng

; CO

VID-

19 add

itonal

waves

with th

e accompa

nying ec

onomic shoc

credi

t impact

and s

hort t

erm liq

udit

y sho

cks

. Unde

r the te

sts an

thr

ough th

e range o

f scena

rios

, the re

sult

s of th

ese

exerci

ses and t

he RRP de

monst

rate t

hat the G

rou

p has

suf

ﬁcent cap

ital and l

iqudit

y to c

ontin

ue as a goi

concern and meet

minmum

regulator

y capital a

liqudity req

uirements

•

Ana

lysis o

f the cap

ital, f

undi

ng and liq

udit

y pos

iton of

the G

roup, in

cludn

g the cap

ital and l

everage ra

tios

, and

AP which s

ummar

ise

s the Gr

oup

’s capital a

nd ris

assessment proc

ses,

assesses its cap

ital require

ment

and t

he ade

quac

y of res

ource

s to mee

t them

. Furt

her

nding a

nd liqud

y was cons

idere

d in the co

ntext o

f the

sk appe

tite me

tric

s, in

cludn

g the ADR a

nd L

CR r

atios

•

The Group

’

s Internal Liqud

Adequac

y Assessment

Proce

ss (IL

AP)

, w

hich con

sider

s the G

roup

’

s l

iqudit

pos

iton

, its f

ramewo

rk and w

heth

er suf

ﬁcent liq

udit

res

ource

s are bein

g maint

aned to m

eet li

ablite

s as they

fall d

ue, was al

so reviewe

•

The l

evel of deb

t in iss

ue, incl

udng re

demp

tions a

suance

s duri

ng the ye

, de

bt fallin

g due fo

r repa

ymen

in th

e next 12 mo

nths an

d fu

rthe

r plann

ed deb

t issu

ances

incl

udng t

he appe

tite in t

he mar

ket for th

e Grou

’

s d

ebt

•

A det

ailed r

eview of all p

rincp

al and em

erging r

isk

sed on t

he anal

ysis p

erfo

rme

d, the dir

ector

s conﬁr

they

are sa

tisf

ed tha

t the Group has

adequate resources

to con

tinue i

n busin

ess fo

r a per

iod of 12 m

onth

s from

17 Feb

ruar

y 202

2. For t

his re

ason

, the G

roup con

tinue

s to

adopt the going

concern basis of accounting for

prepar

ing

the ﬁnancal

statement

. Segmental informaton

Segments and

regions

The G

roup’

s se

gment

al repo

rtin

g is in acco

rdance w

ith IFR

S 8

Operating Segment

s and

is repor

ted consistently with the

inte

rnal p

erfo

rman

ce fram

ework an

d as pre

sente

d to th

Group

’

s Management T

eam.

Foll

owing th

e Gro

’

s c

hange i

n organi

saton

al str

uctu

re,

fect

ive 1 Janu

y 2021, th

e compo

siton o

f the rep

ort

able

gment

s has b

een am

ende

d to reﬂe

ct this n

ew str

uctur

As s

uch, t

here are t

wo n

ew repor

tabl

e busi

ness s

egme

nts:

•

Corp

orate & Institu

tonal Banking and Co

mmercial Banking

have b

een co

mbine

d to for

m Cor

porat

e, Comm

ercial &

Instit

utonal Bankin

g, ser

ving larger comp

anies and

insttutions.

•

Retail a

nd Pri

vate bank

ing ha

ve bee

n combin

ed to fo

Con

sume

, Pri

vate & Bu

sines

s Bank

ing se

ving in

dvid

ual

and busine

ss banking client

From a re

gional p

ers

pect

ive, Gr

eate

r China & No

rth A

sia and

ASE

AN & S

outh A

sia h

ave bee

n combin

ed to fo

rm a sin

gle

Asia region.

The t

hree g

eogra

phic re

gions ar

e now: A

sia, Af

rica & M

iddle

East

, and Euro

pe & Ame

ricas

. Activ

ties n

ot dire

ctly re

late

d to

a client segme

nt and

or geo

graphic region are included in

Cen

tral & ot

her it

ems. T

hese m

ainly i

nclud

e Cor

porat

e Cent

costs

reasur

y activties, certain strategic in

vestment

s and

the U

K bank l

The c

hange

s above req

uire com

parat

ive per

iods t

o be

restated.

The follo

wing should also

be noted:

•

ransa

ction

s and f

undin

g bet

ween t

he se

gment

s are

car

ried o

ut on an ar

m’

s-len

gth ba

sis

•

Corporate Centre cost

repres

ent ste

wardship and central

management

ser

vices

roles and activ

ties that are

not

directly

attributable to

business or cou

ntr

y operations

•

asur

markets, jont ventures a

nd associate inv

est

ments

are ma

nage

d in the re

gion

s and are in

clude

d withn t

appl

icable r

egion

. However

, they a

re not ma

nage

d direct

by a clien

t segm

ent and a

re ther

efore in

clud

ed in the

Central & other items segment

319

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

. Segmental informaton

continued

Basis of preparation

The a

nalys

is reﬂe

cts h

ow the clie

nt seg

ment

s and ge

ograp

hic

reg

ions are m

anag

ed inte

rnall

. Thi

s is des

cribe

d as th

Man

ageme

nt View (

on an un

der

lyin

g basis

) a

nd is pr

incpall

the location from whi

ch a cl

ient relationshp is

managed,

whi

ch may dif

fer f

rom w

here it is ﬁ

nancall

y boo

ked and ma

be sh

ared b

ween bu

sine

sses a

nd/

r regio

ns. In c

ertai

instance

s this approach is not appropr

iate and a Financal

View is di

sclo

sed, t

hat is

, the lo

catio

n in which t

he tran

sact

ion

or ba

lance wa

s booke

d. T

ypicall

, the Fin

ancal View i

s used in

are

as such a

s the Ma

rket and L

iqudit

y Ri

sk review

s wher

act

ual bo

oking l

ocati

on is mo

re impo

rtan

t for an as

ses

sment

Segmental informaton is therefore on a

Managem

ent V

iew

unless other

wise stated.

Restructuring items ex

clude

from underlying

results

The G

roup’

s sta

tuto

y per

form

ance is ad

juste

d for pro

ﬁts o

los

ses of a c

apital n

ature

, amoun

ts co

nseq

uent to i

nvestme

transactions driven by

rategic

intent

, other infrequent and

or excep

tion

al trans

actio

ns th

at are signﬁc

ant or mat

eria

l in

the c

ontext o

f the G

roup

’s nor

mal bus

ines

s earn

ings fo

r the

per

iod an

d item

s which m

anage

ment an

d investor

s woul

ordinarly identfy separately when asse

ssing underlying

performanc

e period-

by period.

Restr

uct

urin

g charge

s of $507 millon f

or 2021 reﬂe

cts

, the

impact of

actions to tra

nsform the organisaton

to improve

productivt

imarly

redun

dancy related

charges, the

maj

ort

y of wh

ich, in

cludng a

n earl

y retir

ement p

rogram

in Korea

, were bo

oked in 2021.

Other restructuring items include a $6

2 millon

regulator

ﬁnancal penalt

y and a $20 mill

o

n fair

-v

ue gain relating

to a SC

entures in

vestment.

Recon

cilati

ons be

twe

en und

erl

ying an

d statu

tor

y re

sult

s are

set o

ut in th

e table

s below

Proﬁt before tax

ation (PB

)

2021

Underlying

$millon

Regulatory

Fine

$millon

Restructuring

$millon

t gai

n on

businesses

disposed

held for sale

$millon

Goodwill

imparment

$millon

Statutory

$millon

Operat

ing income

14,713

–

(32)

–

,70

Operating expenses

375)

(62

)

–

(10,

924

)

Operating proﬁt/

(loss

) before

imparment

losses and taxati

4,338

)

19)

–

3,777

Credit imparm

ent

63)

–

(

Other imparment

55)

–

(

17)

–

(372)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

–

196

Proﬁt/

(loss)

befor

ation

896

)

(

507

)

–

347

2020

Underly

ing

$millo

Regulatory

Fin

$millo

Restructuring

$millo

t los

s on

businesses

disposed/

held for

ale

$millo

Goodwill

imparment

$millo

Statutor

$millo

Operat

ing income

–

(

–

14,75

Operating expenses

(

,14

–

(

Operating proﬁt/

(loss

) before

imparment

losses and taxati

,62

25)

(

–

Credit imparm

ent

(

94)

–

(

31)

–

(2,325)

Other imparment

–

(

–

)

87)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

164

–

151

Proﬁt/

(loss

) before taxati

,508

(

82)

(

38)

)

1,61

320

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

. Segmental informaton

continued

Underlying perform

ance b

y client segmen

2021

Corporate,

Commercial &

Institu

tonal

Banking

$millon

Consumer

Pri

vate &

Business

Banking

$millon

Central &

other items

(segment

)

$millon

Operating income

8,407

5,73

573

14,713

xternal

373

388

14,713

Inter

-s

egment

455

360

15)

–

Operating expenses

(5,278

)

(720)

375)

Operating proﬁt/

(loss

) before imparment

los

ses and

taxation

,12

356

(

47)

338

Credit imparm

ent

(285)

63)

Other imparment

)

–

(

(355)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

–

Underlying proﬁt

(loss)

before taxation

,12

1,07

(29

,896

Restructuring

(114

)

(23

58)

(507

)

Goodwill i

mparment

–

Other items

–

(42

)

Statutor

y proﬁt

(loss)

befor

ation

3,0

836

)

ota

l asset

405,

839

,98

Of w

hich: lo

ans an

d advan

ces to cu

stom

ers

208,729

136,

565

24,409

loa

ns and a

dvanc

es to cus

tom

ers

136,498

,635

298,468

loa

ns hel

d at fair va

lue th

roug

h proﬁt or l

oss (F

TPL)

71,

235

otal liablites

397

,94

110,

,18

Of w

hich: cus

tome

r acco

unt

696

,777

,982

2020

(Rest

ated)

Corporate,

Commercial &

Institutonal

Banking

$millo

Consumer

ivat

e &

Business

Banking

$millo

Central &

other items

(

segment)

$millo

otal

$millo

Operating income

8,4

,69

589

xternal

304

795

1,666

Inter

-s

egment

181

,07

)

–

Operating expenses

(

5,003)

)

(90

,14

Operating proﬁt/

(loss

) before imparment

los

ses and

taxation

482

(320

)

623

Credit imparm

ent

,529)

(

)

(

Other imparment

(

16)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

–

164

Underlying proﬁt

(loss)

before taxation

(

96)

2,50

Restructuring

21)

)

82)

Goodwill i

mparment

–

)

Other items

–

(

Statutor

y proﬁt

(loss)

befor

ation

1,773

1,6

ota

l asset

31,

783

Of w

hich: lo

ans an

d advan

ces to cu

stom

ers

loa

ns and a

dvanc

es to cus

tom

ers

3,54

281,699

loa

ns hel

d at fair va

lue th

roug

h proﬁt or l

oss (F

TPL)

,430

135

54,

577

otal liablites

81,0

,32

Of w

hich: cus

tome

r acco

unt

0,7

173,

506

492,

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng; Pr

ivat

e Ban

kin

g and Ret

ail B

ank

ing t

o Con

sum

er, Priv

ate & Bu

sin

ess B

ank

ing

. Fur

the

, c

ert

ain cl

ient

s ha

ve be

mov

ed be

een t

he t

wo new c

lien

t seg

men

. Pri

or pe

rio

d has b

een r

est

ate

ans an

d ad

vance

s inc

lud

es reve

e rep

urch

ase a

gre

eme

nts a

nd ot

her s

iml

ar se

cure

d len

din

g of $61,

282 mi

llo

n (31 De

cem

ber 2020

: $45

,20

0 mill

) he

ld at

fai

r valu

e thr

oug

h proﬁt o

r los

usto

mer a

cco

unt

s inc

lud

e repu

rch

ase a

gre

emen

ts a

nd ot

her s

imla

r sec

ure

d bor

row

ing of $

,594 mil

lon (3

1 Dec

emb

er 2020: $

43,91

8 mill

on)

321

Standard Chartered

– A

nnu

al Rep

ort 202

Financal statements

. Segmental informaton

continued

Operating income b

y client

gment

2021

Corporate,

Commercial &

Institu

tonal

Banking

$millon

Consumer

Pri

vate &

Business

Banking

$millon

Central &

other items

(segment

)

$millon

Underlying operating income

8,407

5,733

573

14,713

Restructuring

–

)

(32)

Other items

–

Statutor

y operating income

8,416

733

2020

(Rest

ated)

Corporate,

Commercial &

Institutonal

Banking

$millo

Consumer

ivat

e &

Business

Banking

$millo

Central &

other items

(

segment)

$millo

otal

$millo

Underlying operating income

,485

,69

589

Restructuring

–

(

13)

Other items

–

(

Statutor

y operating income

,52

,69

538

14,75

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng; Pr

ivat

e Ban

kin

g and Ret

ail B

ank

ing t

o Con

sum

er, Priv

ate & Bu

sin

ess B

ank

ing

. Fur

the

, c

ert

ain cl

ient

s ha

ve be

mov

ed be

een t

he t

wo new c

lien

t seg

men

. Pri

or pe

rio

d has b

een r

est

ate

Underlying perform

ance b

y region

2021

Asia

$millon

Africa &

Middle East

$millon

Europe &

Americas

$millon

Central &

other items

$millon

Operating income

10,

2,446

,00

(

14,713

Operating expenses

)

(

,62

(1,4

85)

94)

375)

Operating proﬁt/

(loss

) before imparment

los

ses

and taxation

675

823

518

)

338

Credit imparm

ent

(7)

63)

Other imparment

(

(1)

(

18)

(

55)

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

175

–

Underlying proﬁt

(loss)

before taxation

,11

856

(720)

,896

Restructuring

(

(25)

(127)

07)

Goodwill i

mparment

–

Other items

–

)

Statutor

y proﬁt

(loss)

befor

ation

830

831

575

(88

347

ota

l asset

,95

Of w

hich: lo

ans an

d advan

ces to cu

stom

ers

,600

–

loa

ns and a

dvanc

es to cus

tom

ers

243,86

,17

–

298,468

loa

ns hel

d at fair va

lue th

roug

h proﬁt or l

oss

PL)

21,883

423

,92

–

71,

235

otal liablites

4,200

233,

65,

807

5,1

Of w

hich: cus

tome

r acco

unt

355

,792

,962

–

,45

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

. Segmental informaton

continued

Underlying perform

ance b

y region

continued

2020

(Rest

ated)

Asia

$millo

ric

a &

Middle E

ast

$millo

Europe &

Americas

$millo

Central &

other items

$millo

otal

$millo

Operating income

10,

364

Operating expenses

)

(1,683

)

(

19)

(

42)

Operating proﬁt/

(loss

) before imparment

los

ses

and taxation

4,02

539

)

Credit imparm

ent

(1,

484

)

(

161

)

(

Other imparment

110

(

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

163

–

Underlying proﬁt

(loss)

before taxation

2,814

386

(

705

)

,508

Restructuring

(

)

(115

)

(

82)

Goodwill i

mparment

–

)

Other items

)

–

(

Statutor

y proﬁt

(loss)

befor

ation

(

75)

(1,290)

1,61

ota

l asset

,069

253,438

10,

Of w

hich: lo

ans an

d advan

ces to cu

stom

ers

–

loa

ns and a

dvanc

es to cus

tom

ers

28,

214

–

281,6

loa

ns hel

d at fair va

lue th

roug

h proﬁt or l

oss

PL)

,19

40,

–

54,

577

otal liablites

711

9,9

211

790

738

321

Of w

hich: cus

tome

r acco

unt

,62

125,425

–

154

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Gre

ate

r Chin

a & Nor

th A

sia an

d ASE

AN & S

out

h As

ia to A

sia

. Prio

period h

as been

restated

ans an

d ad

vance

s inc

lud

es reve

e rep

urch

ase a

gre

eme

nts a

nd ot

her s

iml

ar se

cure

d len

din

g of $61,

282 mi

llo

n (31 De

cem

ber 2020

: $45

,20

0 mill

) he

ld at

fai

r valu

e thr

oug

h proﬁt o

r los

usto

mer a

cco

unt

s inc

lud

e repu

rch

ase a

gre

emen

ts a

nd ot

her s

imla

r sec

ure

d bor

row

ing of $

,594 mil

lon (3

1 Dec

emb

er 2020: $

43,91

8 mill

on)

Operating income b

y region

2021

Asia

$millon

Africa &

Middle East

$millon

Europe &

Americas

$millon

Central &

other items

$millon

Underlying operating income

10,

2,446

,00

(

14,713

Restructuring

(

(35)

(32)

Other items

–

Statutor

y operating income

0,478

449

1,9

(

199)

,70

2020

(Rest

ated)

Asia

$millo

ric

a &

Middle E

ast

$millo

Europe &

Americas

$millo

Central &

other items

$millo

otal

$millo

Underlying operating income

10,

2,36

Restructuring

(2)

–

)

Other items

)

–

(

Statutor

y operating income

417

14,

754

Fol

lowi

ng th

e Gro

up’

s c

han

ge in or

gani

sat

on

al str

uct

ure

, the

re ha

s bee

n an int

egr

ato

n of G

reat

er Ch

ina & No

h Asi

a and A

AN & So

uth A

sia t

o Asi

a. Pr

ior

period h

as been

restated

323

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

. Segmental informaton

continued

Additonal

gmental

informaton (

stat

utory

)

2021

Corporate,

Commercial &

Institu

tonal

Banking

$millon

Consumer

Pri

vate &

Business

Banking

$millon

Central &

other items

(segment

)

$millon

Net inter

est inc

ome

267

,214

317

,798

Net fees and

commisson income

784

)

722

Net tradi

ng and other inc

ome

365

516

300

Operating income

8,41

5,733

552

2020

(Rest

ated)

Corporate,

Commercial &

Institutonal

Banking

$millo

Consumer

ivat

e &

Business

Banking

$millo

Central &

other items

(

segment)

$millo

otal

$millo

Net inter

est inc

ome

411

,458

(17

)

6,852

Net fees and

commisson income

716

(

Net tradi

ng and other inc

ome

3,637

517

588

Operating income

525

,69

538

14,75

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng; Pr

ivat

e Ban

kin

g and Ret

ail B

ank

ing t

o Con

sum

er, Priv

ate & Bu

sin

ess B

ank

ing

. Fur

the

, c

ert

ain cl

ient

s ha

ve be

mov

ed be

een t

he t

wo new c

lien

t seg

men

. Pri

or pe

rio

d has b

een r

est

ate

2021

Asia

$millon

Africa &

Middle East

$millon

Europe &

Americas

$millon

Central &

other items

$millon

Net inter

est inc

ome

,069

798

Net fees and

commisson income

614

03)

722

Net tradi

ng and other inc

ome

2,6

936

)

Operating income

0,478

,97

(19

2020

(Rest

ated)

Asia

$millo

ric

a &

Middle E

ast

$millo

Europe &

Americas

$millo

Central &

other items

$millo

otal

$millo

Net inter

est inc

ome

1,2

316

320

6,852

Net fees and

commisson income

2,344

531

519

(

Net tradi

ng and other inc

ome

3,0

608

,087

(

Operating income

,41

362

14,7

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Gre

ate

r Chin

a & Nor

th A

sia an

d ASE

AN & S

out

h As

ia to A

sia

. Prio

period h

as been

restated

2021

Hong K

ong

$millon

rea

$millon

China

$millon

Singapore

$millon

India

$millon

Indonesia

$millon

Net inter

est inc

ome

724

589

Net fees and

commisson

income

902

213

192

664

240

101

414

Net tradi

ng and other inc

ome

306

192

336

216

624

206

Operating income

3,4

111

1,08

598

213

546

865

818

2020

Hong K

ong

$millo

Kor

$millo

China

$millo

Singapore

$millo

India

$millo

Indonesia

$millo

UAE

$millo

Net inter

est inc

ome

557

650

676

664

281

Net fees and

commisson

income

175

163

515

202

113

Net tradi

ng and other inc

ome

1,2

175

379

156

173

Operating income

552

883

558

245

308

947

783

324

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

3. Ne

t intere

st income

Accounting po

licy

Inte

rest in

come fo

r ﬁnancal a

sse

ts he

ld at eit

her fai

r value th

rough o

ther co

mpreh

ensi

ve income o

r amor

tise

d cost

and in

teres

t expe

nse on al

l ﬁnancal l

iablite

s held a

t amor

tise

d cost is r

ecogni

sed in p

roﬁt or lo

ss usin

g the ef

fec

tive

interest method.

The e

ffe

ctive in

teres

t meth

od is a me

thod o

f calcul

ating t

he amo

rtis

ed cos

t of a ﬁnanc

al ass

et or a ﬁnan

cal liabli

ty a

of all

ocatin

g the in

teres

t incom

e or inter

est exp

ens

e over the re

levant pe

riod

. The ef

fect

ive int

erest ra

te is th

e rate th

dis

count

s est

imate

d fu

ture ca

sh pay

ment

s or re

ceipt

s thr

ough th

e expe

cted li

fe of th

e ﬁnancal i

nstr

umen

t or

, w

hen

appr

opri

ate, a sho

rte

r peri

od, to t

he net car

yin

g amoun

t of the ﬁn

ancal as

set o

r ﬁnancal l

iablit

. W

hen calcu

latin

g the

fect

ive inte

rest rat

e, the G

roup e

stima

tes cas

h ﬂows con

sider

ng all con

tract

ual ter

ms of t

he ﬁnan

cal inst

rum

ent (for

exampl

e, prep

aym

ent opt

ions

) b

ut doe

s not con

sider f

ure cre

dit los

ses. T

he calcu

latio

n inclu

des all f

ees pa

id or rece

ived

bet

en par

ties t

o the con

tract t

hat are an i

ntegr

al part o

f the ef

fec

tive int

erest r

ate, tra

nsact

ion cos

ts an

d all oth

prem

iums o

r disco

unt

s. Whe

re the e

stima

tes of ca

sh ﬂows ha

ve bee

n revis

ed, th

e carr

ng amo

unt of th

e ﬁnanca

l asse

t or

liabl

y is adju

sted t

o reﬂect t

he actu

al and rev

ised c

ash ﬂows

, disc

ounte

d at the i

nstr

umen

ts o

rignal e

ffe

ctive in

teres

t rate.

The a

djust

ment i

s recog

nised a

s inter

est inc

ome or ex

pens

e in the p

erio

d in whic

h the rev

ison is m

ade.

Inte

rest in

come fo

r ﬁnancal a

sse

ts t

hat are eit

her he

ld at fair va

lue thr

ough ot

her com

prehe

nsive i

ncome o

r amor

tise

d cost

tha

t have be

come cr

edit

-imp

ared sub

seq

uent to i

ntial re

cognit

on (

sta

ge 3

), is reco

gnise

d using t

he ori

gnal ef

fect

ive

inte

rest ra

te appli

ed to th

e net car

ying val

ue. Int

erest in

come i

s there

fore re

cogni

sed on t

he amor

tis

ed cost o

f the ﬁn

ancal

set inc

ludng ex

pect

ed cre

dit los

ses

. Shou

ld the cr

edit r

isk on a st

age 3 ﬁnan

cal as

set imp

rove such th

at the ﬁn

ancal as

set

is no l

onger c

onsid

ered cr

edit

-imp

ared, in

teres

t incom

e recog

niton reve

s to a comp

utat

ion bas

ed on t

he gros

s carr

ing

value o

f the ﬁn

ancal as

set

2021

$millon

2020

$millo

Balance

s at

ntral banks

113

Loan

s and ad

vance

s to ban

801

Loan

s and ad

vance

s to cust

ome

473

Debt securites

,787

her eli

gble b

ills

303

495

Accr

ued o

n impar

ed as

set

s (

dis

count u

nwind

)

227

Interest

income

10,

12,

292

Of w

hich: ﬁna

ncal in

str

umen

ts h

eld at f

air value t

hrou

gh oth

er com

preh

ensi

ve incom

541

Dep

osit

s by ba

nks

136

237

Customer accounts

3,6

Deb

t sec

urit

es in is

sue

566

836

Subordinated

liab

lites and

other borrow

ed f

unds

497

637

Int

eres

t expe

nse on I

FRS 16 le

ase li

ablit

Interest

expense

3,448

5,4

Net interest

income

,798

6,85

1 In

clud

es a $1

71 mi

llon a

dju

stm

ent in r

ela

tio

n to int

ere

st ea

rne

d on im

par

ed as

set

s as r

equ

ired b

y IFRS9 Fi

nan

cal In

str

ent

s Reco

gni

ton a

nd Me

asu

rem

ent

4. Ne

t fees and c

ommiss

on

Accounting po

licy

Fee

s and comm

isso

ns char

ged for s

vic

es provi

ded by th

e Grou

p are reco

gnise

d as or w

hen th

e ser

ce is comp

lete

d or

signﬁ

cant act performed.

Loan s

yndi

caton fe

es are re

cogni

sed a

s revenue w

hen th

e syn

dicato

n has be

en comp

lete

d and the G

roup r

etain

ed no pa

of th

e loan p

ackage fo

r its

elf

, or r

etain

ed a par

t at the s

ame ef

fect

ive inte

rest ra

te as fo

r the ot

her par

ticp

ant

The G

roup c

an act as t

rust

ee or in o

ther ﬁd

ucar

y cap

acite

s that re

sult in t

he hold

ing or pl

acing of a

sse

ts on b

ehalf o

ind

vidu

als, t

rust

s, r

etire

ment b

eneﬁt pl

ans and o

ther in

stt

ution

s. Th

e ass

ets an

d incom

e arisn

g ther

eon are e

xclude

d from

the

se ﬁnan

cal stat

emen

, as they ar

e not as

set

s and in

come of t

he Gro

up.

325

Standard Chartered

– A

nnu

al Rep

ort 202

Financal statements

4. Ne

t fees and c

ommiss

on

continued

The G

roup a

pplies t

he fol

lowing p

ractic

al expe

dient

•

informaton on

amount

s of tra

nsaction price al

located to unsatisf

ed (

or partially unsatisf

ed)

erformance obl

igatons

at th

e end of t

he repo

rtin

g per

iod is n

ot disc

lose

d as almo

st all fee

-ear

ning co

ntract

s ha

ve an expe

cted d

urati

on of les

tha

n one year

•

prom

ised c

onsid

erato

n is not a

djuste

d for th

e eff

ect

s of a signﬁc

ant ﬁnan

cng comp

onent a

s the p

erio

d bet

ween t

he Gr

oup

prov

idng a ser

vice a

nd the cu

stom

er pay

ing for i

t is exp

ecte

d to be le

ss tha

n one year

•

incr

ement

al cost

s of ob

tainng a f

ee-e

arnin

g contr

act are re

cogni

sed up

front i

n ‘Fee

s and comm

isso

n expe

nse’ rat

her th

amo

rtis

ed, if t

he exp

ecte

d term o

f the con

tract is l

ess t

han one ye

The d

eter

minat

on of th

e ser

ces per

for

med fo

r the cus

tome

, the t

rans

actio

n price, a

nd whe

n the se

vices a

re compl

eted

dep

ends o

n the na

ture of t

he pro

duct wi

th the cu

stom

. T

he main co

nside

raton

s on inco

me reco

gnito

n by produ

ct are

as fo

llows:

ransaction Bankin

The G

roup r

ecogn

ises f

ee inco

me ass

ociat

ed wit

h trans

actio

nal tra

de and ca

sh mana

geme

nt at the p

oint in t

ime th

e ser

is prov

ided

. The G

roup re

cogni

ses inc

ome as

socia

ted wi

th trad

e conti

ngent r

isk ex

posu

res (

ch as let

ter

s of cred

it and

gua

rante

) over the p

erio

d in which t

he ser

vice i

s provid

ed.

Paym

ent of f

ees is u

suall

y recei

ved at th

e same ti

me the s

vice i

s provid

ed. In s

ome cas

es, l

etter

s of cr

edit and g

uarant

ees

sued by th

e Gro

up have an

nual up

fron

t premiu

ms, w

hich are am

ort

ised o

n a strai

ght

-line ba

sis to f

ee inco

me over the ye

Financal Markets

The G

roup r

ecogn

ises f

ee inco

me at the p

oint in t

ime th

e ser

ce is provi

ded. Fe

e incom

e is rec

ognis

ed for a si

gnﬁcant no

len

ding se

vice wh

en the t

rans

action h

as be

en comp

lete

d and the t

erm

s of the co

ntract w

ith th

e custo

mer en

title t

he Gro

to th

e fee. Fe

es are us

ually r

eceive

d shor

tly af

ter t

he ser

ice is pr

ovide

Syndic

aton fe

es are re

cogni

sed wh

en the s

ynd

icaton i

s compl

ete. Fee

s are gen

erall

y recei

ved bef

ore comp

leti

on of the

ndicat

on, or w

ithn 12 m

onth

s of the t

ransa

ction d

ate.

curit

es ser

ices in

clude c

usto

dy ser

ices

, fun

d accou

nting an

d admin

strat

ion, an

d broker cl

earin

g. Fee

s are reco

gnise

d over

the p

erio

d the cu

stod

y or fu

nd man

ageme

nt ser

ices are p

rovide

d, or as a

nd whe

n broker se

vice

s are requ

este

ealth Management

Upfront consideraton on

ancassurance ag

reement

is amortised straight

-l

ine over the contractual

erm. Commissons for

ban

cass

urance a

ctiv

ties are r

ecord

ed as th

ey are ear

ned t

hroug

h sales o

f third-p

art

y ins

urance p

rodu

cts to c

ustom

ers

. The

comm

isso

ns are re

ceived w

ithn a sh

ort t

ime fr

ame of th

e commi

sson b

eing ea

rne

d. T

rget

-linke

d fees ar

e accr

ued ba

sed o

per

centa

ge of th

e target a

chieved

, provid

ed it is as

ses

sed a

s highly p

robab

le tha

t the tar

get wil

l be met

. Cas

h pay

ment is

rec

eived at a c

ontra

ctuall

y spe

cif

ed dat

e afte

r achievem

ent of a ta

rget ha

s bee

n conﬁrm

ed.

Upf

ront an

d trailn

g commis

sons f

or mana

ged inves

tmen

t place

ment

s are re

corde

d as they ar

e conﬁrm

ed. In

come f

rom the

acti

vti

es is rel

ativel

y even thr

ougho

ut the p

erio

d, and ca

sh is us

ually re

ceive

d withn a s

hort t

ime f

rame af

ter th

e commi

sson

is earned.

Retail

Products

The G

roup r

ecogn

ises m

ost inco

me at th

e point i

n time th

e Gro

up is ent

itle

d to the f

ee, sin

ce most s

vice

s are prov

ided at t

tim

e of the cu

stom

er’s requ

est

Cre

dit card ann

ual fe

es are re

cognis

ed at th

e time t

he fee i

s recei

ved sinc

e in most o

f our ret

ail mar

kets t

here ar

e contra

ctual

circu

mstan

ces und

er whi

ch fees a

re waived

, so inco

me reco

gnito

n is cons

traine

d unti

l the un

certa

intes a

sso

ciate

d with t

annu

al fee ar

e reso

lved. T

he Gro

up defe

rs th

e fair valu

e of reward p

oint

s on it

s cred

it card reward p

rogram

mes

, and rec

ognis

inco

me and co

sts a

sso

ciate

d with f

ulﬁllng t

he reward a

t the tim

e of red

empt

ion.

2021

$millon

2020

$millo

Fees and

commissons income

4,458

,865

Of which:

Finan

cal ins

tru

ment

s th

at are no

t fair val

ued t

hrou

gh proﬁt o

r loss

282

rust a

nd other ﬁduc

y activties

703

254

Fee

s and com

mis

sons e

xpen

(

705

)

Of which:

Finan

cal ins

tru

ment

s th

at are no

t fair val

ued t

hrou

gh proﬁt o

r loss

(

)

rust a

nd other ﬁduc

y activties

)

t fee

s and co

mmi

ss

722

326

Standard

Chartere

– A

nnu

al Repo

rt 2021

Financal state

ments

Notes to the

ﬁnancal

statement

4. Ne

t fees and c

ommiss

on

continued

2021

Corporate,

Commercial &

Institu

tonal

Banking

$millon

Consumer

Pri

vate &

Business

Banking

$millon

Central &

other Items

(Segment)

$millon

ransaction Bankin

,09

–

rade

590

–

617

Cash Management

507

–

519

Financal Markets

–

Lend

ing & Por

tfol

io Man

agem

ent

143

–

144

Princpal Finance

(5)

–

(5)

ealth Mana

gement

–

556

–

1,55

Retail Products

–

406

–

406

reasury

–

)

(47

)

Others

–

(

18)

(

17)

t fee

s and co

mmi

ss

,78

)

3,72

2020 (Rest

ate

Corporate,

Commercial &

Institutonal

Banking

$millo

Consumer

ivat

e &

Business

Banking

$millo

Central &

other Items

(Segment

)

$millo

otal

$millo

ransaction Bankin

973

–

1,0

rade

531

–

553

Cash Management

442

–

452

Financal Markets

432

–

432

Lend

ing & Por

tfol

io Man

agem

ent

–

Princpal Finance

–

ealth Mana

gement

1,350

–

351

Retail Products

–

333

–

333

reasury

–

Others

–

(8)

t fee

s and co

mmi

ss

,47

,716

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng; Pr

ivat

e Ban

kin

g and Ret

ail B

ank

ing t

o Con

sum

er, Priv

ate & Bu

sin

ess B

ank

ing

. Fur

the

, c

ert

ain cl

ient

s ha

ve be

mov

ed be

een t

he t

wo new c

lien

t seg

men

. Pri

or pe

rio

d has b

een r

est

ate

Upf

ront b

ancas

suran

ce consi

derat

on amou

nts a

re amor

tis

ed on a st

raight

-lin

e basi

s over the con

tract

ual pe

riod t

o which t

con

sidera

ton rel

ates

. Defe

rred i

ncome o

n the ba

lance sh

eet in re

spe

ct of the

se acti

vtie

s is $6

34 mi

llon (31 De

cembe

r 20

20:

18 millo

)

. T

he inco

me will b

e earn

ed evenl

y over the ne

xt 7

.5 ye

ars (3

1 Dece

mber 2020: 8.

5 year

)

. For t

he 12 mon

ths en

ded

31 De

cembe

r 20

21, $

84 m

illon of f

ee inco

me was rel

eas

ed fro

m defer

red in

come (31 D

ecem

ber 2020: $8

4 millon

5. Net t

radin

g income

Accounting po

licy

ins and lo

sse

s arisn

g from c

hange

s in the f

air value of ﬁ

nancal in

str

umen

ts he

ld at fair va

lue thr

ough pr

oﬁt or los

s are

reco

rded i

n net tra

ding inc

ome in th

e per

iod in wh

ich they ar

ise. T

his inc

ludes c

ontra

ctual in

teres

t recei

vable or p

ayabl

Inco

me is re

cognis

ed fr

om the s

ale and p

urcha

se of tra

ding po

sito

ns, ma

rgins on m

arket m

aking an

d custo

mer bu

sines

s and

fair value changes

Whe

n the int

ial fair val

ue of a ﬁnan

cal inst

rum

ent he

ld at fair val

ue thr

ough pro

ﬁt or los

s relie

s on unob

ser

vabl

e inpu

, the

dif

feren

ce bet

en the int

ial valu

ation an

d the tr

ansa

ction pr

ice is am

ort

ised t

o net tra

ding in

come as t

he inpu

ts b

ecom

obs

vable o

r over the lif

e of the i

nstr

umen

t, wh

ichever i

s shor

ter

. Any un

amor

tise

d ‘d

ay on

e’ gain is re

leas

ed to ne

t tradi

inco

me if th

e trans

actio

n is ter

minate

2021

$millon

2020

$millo

Net trading

income

3,431

3,6

Sign

ﬁcant it

ems wi

thn ne

t trad

ing inc

ome in

clude:

ins on in

str

ume

nts h

eld fo

r trad

ing¹

381

3,254

ins on ﬁn

ancal a

sse

ts m

andat

oril

y at fai

r value t

hroug

h proﬁt o

r loss

181

Los

ses on ﬁ

nanca

l ass

ets d

esign

ate

d at fair val

ue thr

ough p

roﬁt or lo

(8)

(4)

Los

ses on ﬁ

nanca

l liabli

tes de

sign

ated a

t fair valu

e thro

ugh pr

oﬁt or lo

(

247

)

ncl

ude

s $339 m

ill

on gai

n (31 De

cem

ber 2020

: $395 m

illo

n los

) f

rom t

he tr

ansl

ati

on of f

orei

gn cur

ren

cy m

one

tar

y a

sse

ts an

d lia

blit

es

327

Standard Chartered

– An

nual Re

por

t 2021

Financal statements

6. Other operat

ing income

Accounting po

licy

eratin

g leas

e incom

e is reco

gnis

ed on a st

raight

-lin

e basi

s over the pe

riod o

f the le

ase u

nles

s anoth

er sys

tema

tic ba

sis is

more appropriate.

Div

dend

s on equ

y inst

rume

s are reco

gnise

d when t

he Gr

oup

’s right t

o recei

ve pay

ment is e

stabl

ishe

On di

spos

al of fair val

ue thro

ugh ot

her com

prehe

nsive in

come d

ebt ins

tru

ment

s, th

e cumul

ative g

ain or los

s reco

gnise

d in

oth

er comp

rehen

sive in

come is re

cycl

ed to th

e proﬁt or l

oss in o

ther o

perat

ing inco

me/

xpen

se.

Whe

n the G

roup lo

ses con

trol of t

he sub

sidar

y or d

ispo

sal grou

p, the dif

fere

nce bet

en the co

nsid

erato

n recei

ved and th

car

ying am

ount o

f the sub

sidar

y o

r dispo

sal gro

up is rec

ognis

ed as a gai

n or los

s on sale o

f the bu

sines

2021

$millon

2020

$millo

Other operating

income includes

Renta

l income from

operating lease assets

463

ins le

ss los

ses o

n disp

osal o

f fair val

ue thr

ough o

ther co

mpre

hens

ive inc

ome de

bt ins

tru

ment

157

431

ins le

ss los

ses o

n amor

tis

ed cos

t ﬁnanc

al ass

Net gain

(loss

) on

sale of businesses

Divdend inc

ome

in on sal

e of airc

raft

Other

104

Other operating income

750

,070

. Opera

ting expens

Accounting po

licy

Sho

-ter

m empl

oyee bene

ﬁts: s

alarie

s and so

cial se

curit

y ex

pens

es are re

cogni

sed over t

he per

iod in w

hich th

e employe

prov

ide the s

vic

e. V

ariab

le comp

ensa

tion is in

clud

ed wit

hn share

-base

d pay

ment

s cos

ts an

d wages an

d salar

ies. Fu

rth

det

ails are d

isclo

sed in t

he Dire

ctor

s’ remun

erati

on rep

ort (p

ages 141 to 170

)

Pens

ion cost

s: con

trib

uton

s to deﬁne

d cont

ribu

ton pen

sion s

cheme

s are rec

ognis

ed in pro

ﬁt or los

s when p

ayable

. For

deﬁn

ed ben

eﬁt plan

s, ne

t intere

st exp

ense, s

vic

e cost

s and ex

pens

es are re

cognis

ed in th

e incom

e state

ment

. Furt

her

det

ails are p

rovide

d in Not

e 30.

Share-

ased

compensation:

the Group operates

equit

-settled and c

ash-settled

share-based payment

compensation

plan

s. Th

e fair valu

e of the e

mployee s

vice

s (

mea

sure

d by the fair va

lue of th

e opti

on grant

ed) rec

eived in e

xchange f

the g

rant of t

he opti

ons is r

ecogni

sed a

s an expe

nse. Fur

the

r detail

s are prov

ided in N

ote 31

2021

$millon

2020

$millo

Staff costs:

ages and

salaries

5,83

cial se

curi

y cost

209

168

her pe

nsio

n cost

s (Not

e 30

)

377

358

Share-based payment

cost

(Note 3

167

Other staff cos

,081

866

,668

6,8

her sta

ff cos

ts in

clude r

edun

danc

y expe

nses o

f $328 millo

n (31 Dece

mber 2020: $179 mi

llon

). Furth

er cost

s in thi

s categ

incl

ude tr

ainng, t

ravel co

sts a

nd oth

er staf

-rel

ated co

sts

The f

ollowi

ng tabl

e summa

rise

s the nu

mber o

f employe

es wit

hn the G

roup:

2021

2020

Business

Support

ser

vices

Business

Support ser

vices

otal

At 31

cember

30,

51,

1,9

752

83,657

Average f

or the ye

31,

468

,268

736

6,435

8,305

The C

ompa

ny employed N

il staf

f at 31 De

cemb

er 20

21 (31 D

ecem

ber 2020: Nil) and it in

curr

ed cost

s of $1 m

illon

(31 De

cemb

er 202

0: $

87 millon)

Det

ails of d

irecto

rs’ pa

, be

neﬁt

s, pen

sion

s and be

neﬁt

s and inte

rest

s in sha

res are di

sclos

ed in th

e Direc

tor

s’ remun

eratio

report (page 14

ransa

ction

s with di

recto

, ofﬁce

rs and o

ther r

elate

d par

ties are d

isclo

sed in N

ote 36

328

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

. Opera

ting expens

continued

2021

$millon

2020

$millo

Premises and

quipment

exp

enses:

387

General adminstrati

penses:

UK b

ank lev

100

331

Regulatory ﬁne

(

Other general admin

strative expenses

526

1,514

1,688

831

Depreciaton

and amortisaton:

Propert

, plant

and equipment:

Premi

ses

370

Equipment

129

Operating

lease asset

213

229

712

731

Intangibles:

Software

515

Acquired on busine

ss combinatons

251

otal

operating expenses

0,9

380

eratin

g expe

nses i

nclud

e rese

arch exp

endit

ure of $945 millon (3

1 Decem

ber 2020: $7

7 millon

), whic

h was reco

gnized a

s an

exp

ense i

n the year.

The U

K bank lev

y is app

lied on t

he char

geabl

e equit

y an

d liablit

es on th

e Gro

’

s c

onso

lidate

d balan

ce she

et. Key exclu

sions

from charg

eable equit

y and liablites include T

ier 1 capital, insured or guarant

eed retail depo

sits, rep

os secured on cer

tain

sovere

ign deb

t and liabl

ites su

bject to n

etti

ng. From 1 Ja

nuar

y 2021 th

e rates a

re 0.

10 p

er cent f

or shor

-ter

m liablit

es and

0.05 per c

ent for lo

ng-ter

m liabli

tes. I

n addit

on, th

e scope o

f the UK b

ank lev

y is r

estr

icted t

o the b

alance s

heet o

f UK

operations only from this

date.

8. Cre

dit imparment

Accounting po

licy

Signﬁ

cant accounting estimates and judgements

The G

roup’

s exp

ecte

d credi

t loss (ECL) calcu

latio

ns are ou

tput

s of co

mplex m

odel

s with a n

umber o

f unde

rly

ing as

sumpt

ions

The s

ignﬁcant ju

dgem

ent

s in dete

rminn

g expe

cted cr

edit lo

ss incl

ude:

•

The G

roup’

s cri

tera f

or ass

ess

ing if th

ere has b

een a si

gnﬁcant in

creas

e in cred

it risk

;

•

Devel

opmen

t of exp

ecte

d credit l

oss mo

dels

, incl

udng th

e choic

e of inpu

ts re

latin

g to macr

oecon

omic var

iable

•

Evaluation

of management overlays a

nd post

del

adjustments;

•

Det

ermi

naton o

f proba

bilt

y weight

ngs fo

r Stage 3 i

ndvi

duall

y asse

sse

d provis

ons

The c

alcula

tion of c

redit im

parm

ent prov

isons a

lso invol

ves expe

rt cre

dit jud

gemen

t to be app

lied by th

e credi

t risk

management team based upon counterparty informaton they receiv

e from various sources i

ncludng rela

ionsh

p managers

and o

n exter

nal mar

ket infor

mato

n. Det

ails on t

he appr

oach fo

r dete

rminn

g expe

cted cr

edit los

s can be f

ound in t

he cre

dit

risk section, under IFR

S 9 Methodology (page 233

timat

es of fo

recas

ts of key ma

croe

conom

ic variab

les un

derl

ying t

he exp

ected c

redit l

oss cal

culat

ion can be f

ound w

ithn

the R

isk revi

, Key ass

umpt

ions an

d judge

ment

s in det

ermi

nng exp

ecte

d credit l

oss (p

age 2

35).

Expected credit

losse

xpe

cted cr

edit lo

sses a

re dete

rmine

d for all ﬁn

ancal d

ebt ins

tru

ment

s that a

re clas

sif

ed at a

mort

ise

d cost or fa

ir value

through other comprehensive income,

undraw

commitments and ﬁnancal

ara

ees.

An ex

pect

ed cred

it los

s repres

ent

s the pr

esen

t value of ex

pect

ed cas

h shor

tfall

s over the re

sidua

l term o

f a ﬁnancal a

sse

undraw

n commitment or ﬁnancal guarante

A cash s

hor

tfall is t

he dif

fere

nce bet

en the ca

sh ﬂows t

hat are du

e in accor

dance w

ith th

e contra

ctual t

erm

s of the

ins

tru

ment an

d the cas

h ﬂows th

at the G

roup ex

pect

s to re

ceive over t

he cont

ractu

al life of t

he ins

tru

ment

329

Standard Cha

tered

– Annu

al Repo

rt 202

Financal statements

8. Cr

edit imparm

ent

continued

Measurement

xpe

cted cr

edit lo

sses a

re compu

ted a

s unbia

sed, pr

obabi

lty-wei

ghted a

moun

ts wh

ich are de

term

ined by evalu

atin

g a

range of r

asonably possible outcomes, the ti

me value

of money

, and consider

all reasonable and supportable

info

rmat

on incl

udng th

at whic

h is for

war

d-look

ing.

For ma

teri

al por

tfoli

os, t

he esti

mate of e

xpe

cted ca

sh shor

tfall

s is det

ermin

ed by mul

tiply

ng th

e probab

ilt

y of def

ault (PD

)

wit

h the lo

ss give

n defau

lt (L

) with t

he exp

ecte

d expo

sure at t

he time o

f defau

lt (E

)

. T

here m

ay be mu

ltipl

e defau

event

s over th

e lifetm

e of an ins

tru

ment

. Furt

her det

ails on t

he comp

onen

ts of PD, LGD and E

AD are di

sclo

sed in t

he Credi

sk sect

ion. Fo

r less m

ater

ial Retail B

anki

ng loan p

ort

folio

s, th

e Grou

p has ado

pted l

ess s

ophis

tcate

d appro

aches b

ase

d on

hist

orcal r

oll rate

s or los

s rates

For

war

d-look

ing eco

nomic a

ssum

ption

s are inc

orpo

rated i

nto th

e PD

, LGD and E

AD w

here re

levant and w

here t

hey

inﬂu

ence cre

dit ri

sk, su

ch as GD

P growt

h rates

, inte

rest rat

es, h

ouse p

rice ind

ces and co

mmod

y price

s among o

ther

The

se as

sumpt

ions ar

e incor

pora

ted usi

ng the G

roup

’

s m

ost likel

y fore

cast fo

r a range o

f macro

econ

omic as

sump

tions

These forecasts are determined using a

ll reasonable and supportable informaton, whi

ch includes both

internally dev

elope

for

ecast

s and t

hose a

vailabl

e exter

nally, and are con

sist

ent wit

h thos

e used f

or bud

getin

g, for

ecast

ing and c

apital p

lannin

o accoun

t for th

e pote

ntial no

n-line

art

y in cre

dit los

ses

, multi

ple for

rd-look

ing sce

nari

os are inc

orpo

rate

d into th

e range

of re

ason

ably p

ossib

le out

comes f

or all ma

teria

l por

tfolio

s. For e

xample, w

here th

ere is a gr

eater r

isk of d

ownsi

de cred

losses than upside gai

s, multiple

for

ward-looking

conomic

scenarios are incorporated into

he r

ange of reasonably

pos

sibl

e outco

mes

, both in r

espe

ct of det

ermi

nng the PD (

d wher

e relevant

, the LGD and E

) a

nd in det

ermin

ng the

overall e

xpec

ted cre

dit los

s amou

nts

. The

se scen

arios a

re dete

rmin

ed usin

g a Mont

e Carl

o appro

ach cent

red aro

und th

Group

’

s most likely

fore

cast

of macroeconomic assumptions.

The p

erio

d over whic

h cash sh

ort

falls are d

eter

mine

d is gene

rally li

mted to t

he max

imum co

ntrac

tual p

erio

d for whi

ch the

Gro

up is ex

pose

d to cre

dit ris

k. Howeve

, for ce

rtai

n revolv

ing cre

dit facilt

ies, w

hich in

clude c

redit ca

rds or overd

raft

s, t

Gro

’s expos

ure to cr

edit ri

sk is no

t limted t

o the co

ntract

ual pe

riod

. For the

se ins

tru

ment

s, t

he Gro

up est

imate

s an

appr

opri

ate life b

ase

d on the p

erio

d that t

he Gro

up is exp

ose

d to cred

it risk

, whi

ch inclu

des th

e eff

ect of cr

edit ri

man

ageme

nt acti

ons su

ch as the w

ithd

rawal of u

ndraw

n facilt

ies.

For cr

edit

-impar

ed ﬁnan

cal inst

rum

ent

s, th

e estim

ate of ca

sh sho

rtfa

lls may r

equir

e the us

e of exp

ert cr

edit jud

geme

nt.

The e

stim

ate of ex

pecte

d cash s

hort

falls o

n a collat

eralis

ed ﬁnan

cal inst

rum

ent reﬂ

ect

s the amo

unt and t

imng of c

ash

ﬂows t

hat are ex

pect

ed fr

om fore

closu

re on th

e collat

eral les

s the co

sts o

f obtai

nng and s

elling t

he colla

teral

, regard

less o

whether foreclosure is deemed pr

obable.

sh ﬂows f

rom unf

und

ed cred

it enhan

cemen

ts h

eld are in

clude

d with

n the me

asur

ement o

f expe

cted cr

edit lo

sses i

they a

re par

t of

, or in

tegra

l to, the co

ntract

ual te

rms o

f the ins

tru

ment (this inc

ludes ﬁ

nancal g

uarant

ees

, unf

unde

d risk

part

icpations and othe

r non-derivatve credit ins

urance

)

. Altho

ugh non-integral credit enhancem

ents do not imp

act

the m

easu

reme

nt of exp

ecte

d credit l

oss

es, a re

imbur

sem

ent as

set is re

cogni

sed to t

he exte

nt of th

e expe

cted cr

edit

losses recorded.

sh shor

tfal

ls are dis

count

ed usin

g the ef

ctive int

erest r

ate (

or cre

dit

-adju

sted e

ffe

ctive in

teres

t rate fo

r purch

ased o

ignate

d credi

-im

pare

d instr

ume

nts (P

OCI)

) on th

e ﬁnancal i

nstr

ume

nt as calcu

late

d at intia

l recog

niton or i

f the

instrument has a variable interest

rate, the current effective interest

rate determined under the contract.

Instruments

Location

of expected

credit loss p

rovisons

Finan

cal as

set

s hel

d at amor

tis

ed co

Loss prov

iso

ns: net

ted a

gains

t gros

s carr

ing val

Finan

cal as

set

s hel

d FVOCI – D

ebt in

str

umen

her co

mpre

hens

ive inco

me (F

CI exp

ect

ed cre

dit los

s res

)

Loan commitment

Provisons for liablites and charges

Fina

ncal guara

nte

Provisons for liablites and charges

Pur

cha

sed o

r ori

gna

ted c

red

-im

par

ed as

ts do n

ot at

tra

ct an ex

cted c

red

it los

s pro

vis

on on i

nti

al rec

ogni

to

n. An ex

cte

d cred

it lo

ss pr

ovis

on wi

ll be

cogn

ise

d onl

y if th

ere i

s an inc

rea

se in ex

cted c

red

it lo

sse

s fro

m tha

t con

side

red a

t int

ial re

cog

nit

bt and t

rea

sur

y s

ecu

rit

es cl

sif

ed a

s fai

r valu

e thro

ugh o

the

r comp

reh

ens

ive in

com

e (FVO

CI) are h

eld a

t fair v

alue o

n the f

ace o

f the b

alan

ce sh

eet

e exp

ect

ed cre

dit l

oss a

ttr

ibu

ted t

o the

se in

str

ent

s is he

ld as a s

epa

rate r

ese

ve wit

hn ot

her c

omp

rehe

nsi

ve in

come (OCI

) and is r

ycle

d to th

e proﬁ

d los

s acco

unt al

ong w

ith a

ny fair v

alue m

sure

men

t gain

s or lo

es he

ld wit

hn F

VOCI w

hen t

he app

lic

able i

nst

rum

ent

s ar

e dere

cog

nis

xpe

cte

d cre

dit lo

ss o

n loan c

omm

itm

ent

s and ﬁ

nanc

al gu

aran

tee

s is re

cog

nise

d as a li

abl

y prov

iso

n. Wh

ere a ﬁn

anc

al in

str

ume

nt in

clud

es b

oth a lo

(i.e. ﬁn

anc

al as

set c

omp

one

nt) and an u

ndra

wn co

mmi

tme

nt (i.e. lo

an co

mmit

men

t com

pon

ent), and i

t is not p

sibl

e to se

par

ate

ly id

ent

y the ex

cte

cre

dit l

oss o

n the

se co

mpo

nen

, exp

ect

ed cre

dit l

oss a

mou

nts o

n the l

oan c

omm

itme

nt ar

e reco

gni

sed t

oge

the

r wit

h exp

ect

ed cr

edit l

oss a

mou

s on

e ﬁnan

cal a

sse

t. T

o t

he ex

ten

t the co

mbi

ned e

xpe

cte

d cred

it lo

ss exc

eed

s the g

ros

s carr

ing a

mou

nt of t

he ﬁna

nca

l ass

, the ex

cte

d cred

it lo

ss is

cogn

ise

d as a li

abli

y prov

iso

Recogniton

12 mo

hs exp

ect

ed cr

edi

t los

ses (S

ge 1)

xpe

cted cr

edit lo

sses a

re reco

gnise

d at the t

ime of int

ial reco

gnito

n of a ﬁnan

cal

ins

tru

ment an

d repres

ent th

e lifet

me cash s

hort

falls a

risng f

rom p

ossib

le def

ault event

s up t

o 12 mont

hs into t

he fu

ture

fro

m the b

alance s

heet d

ate. E

xpe

cted cr

edit lo

sses c

ontin

ue to be d

eter

mined o

n this b

asis u

ntil th

ere is eit

her a si

gnﬁcant

incr

ease i

n the cre

dit ri

sk of an ins

tru

ment o

r the ins

tru

ment b

ecome

s credi

mpare

d. If an in

stru

ment i

s no long

con

sidere

d to exh

ibt a signﬁca

nt incre

ase in cr

edit r

isk

, expe

cted cre

dit los

ses w

ill rever

t to bein

g dete

rmine

d on a

-month

basis.

330

Standard Chartered

– Annu

al Repo

rt 2021

Financal state

ments

Notes to the

ﬁnancal

statement

8. Cr

edit imparm

ent

continued

Sig

nﬁc

ant i

ncr

eas

e in cr

edit r

isk (S

ge 2)

If a ﬁnan

cal ass

et exp

erie

nces a si

gnﬁcant inc

reas

e in credi

t risk (SICR) since i

ntial

reco

gnito

n, an exp

ecte

d credi

t loss p

roviso

n is reco

gnise

d for de

fault even

ts t

hat ma

y occur over t

he life

tme of t

he ass

et.

Signﬁc

ant incre

ase in c

redit r

isk is a

sses

sed by co

mpar

ing th

e risk o

f defau

lt of an ex

posur

e at the re

por

ting da

te to th

e risk

of de

fault a

t orign

ation (

ter ta

king in

to accou

nt the p

ass

age of t

ime

)

. S

ignﬁcant d

oes no

t mean st

atis

tcally s

ignﬁcant n

is it a

sses

sed i

n the con

text of ch

anges i

n expe

cted cr

edit lo

ss. Wh

ethe

r a chang

e in the r

isk of de

fault i

s signﬁcan

t or not i

sess

ed usi

ng a numb

er of qu

antit

atve an

d qualit

atve fa

ctor

s, the w

eight of w

hich dep

end

s on the t

e of pro

duct an

coun

terp

art

. Fin

ancal as

set

s tha

t are 30 or m

ore da

ys pas

t due and n

ot cre

dit

-impare

d will al

ways be c

onsid

ered to h

ave

exp

erie

nced a si

gnﬁcant in

creas

e in cred

it risk

. For le

ss mat

eria

l por

tfolio

s wher

e a loss r

ate or ro

ll rate app

roach i

s applie

d to

comp

ute ex

pect

ed cred

it los

s, signﬁc

ant incre

ase in c

redit r

isk is p

rimar

ly ba

sed on 3

0 days p

ast du

antit

atve fac

tor

s includ

e an ass

ess

ment of w

heth

er the

re has b

een sig

nﬁcant inc

reas

e in the fo

ward-loo

king p

robabi

lty

of de

fault (PD

) s

ince or

ignat

ion. A fo

ward-loo

king PD i

s one th

at is adju

sted f

or fu

ture e

conom

ic condi

tons t

o the ext

ent

the

se are co

rrel

ated to c

hange

s in cred

it risk

. W

e com

pare th

e resid

ual lif

etme PD at t

he bal

ance she

et dat

e to the re

sidu

life

tme PD th

at was exp

ecte

d at the t

ime of or

ignat

ion for t

he sam

e point i

n the te

rm str

uct

ure and de

term

ine wh

ethe

r both

the a

bsol

ute and r

elati

ve chang

e bet

wee

n the t

wo excee

ds pre

deter

mine

d thre

shold

s. T

o the ext

ent th

at the di

ffer

ences

bet

en the m

easu

res of de

fault o

utlin

ed excee

d the de

ﬁned t

hresh

olds

, the in

str

ument i

s consi

dered t

o have ex

per

ience

a signﬁc

ant incre

ase in c

redit r

isk

Qualitatve

factors assesse

include those linked to

current credit risk management pr

ocesses, such as lending plac

non-purely precautiona

y early alert (

and subject to

closer monitorng)

A non-p

urel

y preca

ution

y ear

ly ale

rt acco

unt is on

e which e

xhibt

s ris

k or pot

entia

l weakn

esse

s of a mat

erial n

atur

req

uirng c

lose

r monito

rng

, super

vis

on, or at

tent

ion by man

ageme

nt. W

akn

esse

s in such a b

orrowe

r’s accoun

t, if le

uncorrected, could result

in deterioraton of re

payment prospects and the lik

elhood of being downgraded.

Indicators could

incl

ude a rap

id erosi

on of po

siton w

ithn th

e indu

str

, co

ncern

s over man

ageme

’

s abi

lt

y to mana

ge ope

ration

s, we

ak/

deterioratng operating

result

s, liqu

dit

y strain

and overdue bala

nces among other

factors.

Credit-

impared

(

or defaul

ted)

exposures (

Stage 3)

Finan

cal as

set

s that ar

e credi

-im

pared (

r in defa

ult

) r

epres

ent th

ose th

are at l

east 9

0 days p

ast du

e in resp

ect of pr

incpa

l and/

or inter

est. Fin

ancal as

set

s are al

so cons

idere

d to be cr

edit

-impa

red

whe

re the o

bligo

rs are u

nlikely t

o pay on t

he occu

rren

ce of one o

r more ob

ser

vab

le event

s that h

ave a det

rime

ntal imp

act

on th

e estim

ated f

ure cas

h ﬂows of th

e ﬁnanca

l asse

t. It m

ay not b

e pos

sible t

o ident

f

y a singl

e discre

te event b

ut inst

ead

the c

ombine

d ef

fect of s

everal event

s ma

y cause ﬁn

ancal a

sset

s to b

ecome c

redit

-imp

ared.

•

Evid

ence th

at a ﬁnan

cal ass

et is cre

dit

-impar

ed incl

udes o

bser

vab

le data a

bout t

he foll

owing even

ts:

•

Signﬁc

ant ﬁnanc

al diff

cu

y of the i

ssue

r or bor

rower;

•

Bre

ach of co

ntract s

uch as d

efaul

t or a past d

ue event

;

•

For e

conom

ic or cont

ractu

al rea

sons re

latin

g to the b

orrowe

r’s ﬁnancal d

iff

cul

ty, the len

der

s of the b

orrowe

r have gran

ted

the borrower

concession/

s that lenders would not other

wise c

onsider

. This would

include forbearance ac

tion

(page 331);

•

Pending

or actual bankruptc

y or

oth

ﬁnancal reorganisat

on to avoid or

delay discharge of

the borrower’s

obligaton/

;

•

The d

isapp

earan

ce of an act

ive mar

ket for th

e applic

able ﬁnan

cal as

set du

e to ﬁnanca

l diff

cu

lties o

f the bo

rrower

;

•

Purc

hase o

r orign

ation o

f a ﬁnancal a

sse

t at a dee

p discou

nt tha

t reﬂect

s incu

rre

d credit l

osse

Lendi

ng comm

itmen

ts to a c

redit

-imp

ared ob

ligor t

hat ha

ve not yet be

en dra

wn down ar

e inclu

ded to t

he exte

nt that t

comm

itmen

t canno

t be wit

hdraw

n. Los

s provis

ons aga

inst cre

dit

-impar

ed ﬁnan

cal ass

s are det

ermin

ed ba

sed on an

sess

ment o

f the re

coverable c

ash ﬂows u

nder a ra

nge of sc

enar

ios, in

cludn

g the re

alisat

on of any col

later

al held w

here

appr

opri

ate. The l

oss pr

ovison

s held r

epres

ent th

e diff

erence b

ween t

he pres

ent valu

e of the e

xpec

ted cas

h shor

tfall

dis

count

ed at th

e instr

ume

’

s or

ignal e

ffe

ctive int

eres

t rate, an

d the gro

ss carr

yin

g value (includ

ng cont

ractu

al inter

est due

but n

ot pai

d) of the in

str

umen

t prior t

o any credi

t impar

ment

. The G

roup

’s deﬁnt

ion of de

fault i

s aligne

d with t

he reg

ulato

deﬁntion

of default as set out

in the UK

’

s onshored capital r

equirements regulations (

t 1

331

Standard Chartered

– Ann

ual Rep

ort 202

Financal statements

8. Cr

edit imparm

ent

continued

Exper

credit judgement

For C

orpo

rate & In

stit

uton

al, Com

mercial a

nd Priva

te Bank

ing, b

orr

owers ar

e grade

d by credit r

isk man

agem

ent on a cr

edit

grad

ing (

CG) scale f

rom CG1 to CG14. O

nce a bo

rrower s

tart

s to ex

hibt cre

dit det

erior

aton

, it will move al

ong th

e credit

grad

ing scal

e in the p

erfo

rming b

ook an

d when i

t is clas

sif

ed a

s CG12 the cre

dit as

sess

ment an

d overs

ight of th

e loan w

ill

nor

mall

y be per

form

ed by Gr

oup Sp

ecial A

sse

ts Ma

nagem

ent (

SAM)

Bor

rower

s grade

d CG12 exhib

t well-deﬁn

ed weak

nes

ses in ar

eas su

ch as man

agem

ent and/

or pe

rfor

mance b

ut the

re is no

cur

rent ex

pect

ation o

f a loss o

f princp

al or int

erest

. Whe

re the im

parm

ent as

ses

sment in

dcate

s that t

here wi

ll be a los

s of

pri

ncpal o

n a loan, t

he bor

rower is gr

aded a CG14 w

hile b

orrower

s of ot

her cre

dit

-impar

ed loan

s are gra

ded CG13.

Ins

tru

ment

s grad

ed CG13 or CG14 are r

egard

ed as st

age 3.

For in

dvid

ually s

ignﬁcant ﬁn

ancal as

set

s wit

hn stag

e 3, GSAM w

ill cons

ider all j

udgem

ent

s that h

ave an imp

act on

the e

xpe

cted f

utur

e cash ﬂow

s of the a

sset

. The

se incl

ude: th

e busin

ess pr

ospe

cts

, indu

str

y and g

eo pol

itcal cli

mate

of the customer

, quali

y of realisable

value of collatera

l, the Group

’

s legal posit

on relative

to other claimants and an

renegotiaton

/ forbearance

/ modif

c

ation options. The fut

ure

cash ﬂo

w calcula

ion

involves si

gnﬁ

cant judgements

and e

stima

tes. A

s new inf

orm

aton be

come

s availab

le and f

urt

her ne

goti

atons/ fo

rbe

arance m

easu

res are ta

ken the

est

imate

s of the f

ure cash ﬂ

ows will b

e revis

ed, an

d will ha

ve an impa

ct on the f

utu

re cash ﬂ

ow analy

sis.

For ﬁn

ancal as

set

s whic

h are not in

dvid

ually s

ignﬁcant

, such a

s the Ret

ail Bank

ing po

rtf

olio or sm

all bus

ines

s loans

, whic

comp

rise a l

arge nu

mber o

f homo

geno

us loan

s that s

hare siml

ar chara

cter

istc

s, sta

tistc

al esti

mates a

nd tech

nique

s are

use

d, as wel

l as cred

it scor

ing anal

ysis

Retail B

anki

ng clien

ts ar

e consid

ered c

redit

-imp

ared wh

ere th

ey are more 9

0 days p

ast du

e. Retail B

ankin

g prod

ucts a

re also

con

sidere

d cred

imp

ared if th

e bor

rower ﬁles f

or ban

kru

ptc

y or othe

r forb

earan

ce prog

ramme, t

he bor

rower is d

ecea

sed or

the b

usin

ess is c

lose

d in the ca

se of a sma

ll busin

ess

, or if th

e bor

rower sur

rende

rs th

e collat

eral, o

r there i

s an ident

ﬁed fr

aud

on th

e accou

nt. Addi

tonal

, if th

e accou

nt is uns

ecur

ed and t

he bor

rower has o

ther c

redit a

ccount

s wit

h the G

roup t

hat are

consi

dered

credit

-impa

red,

the acc

ount may be

also be c

redit

-im

pared.

echniq

ues us

ed to co

mpute i

mpar

ment am

ount

s use m

odel

s which an

alys

e histo

rcal re

pay

ment an

d defau

lt rate

s over

a tim

e hori

zon. Wh

ere vario

us mo

dels ar

e used

, judge

ment is r

equir

ed to ana

lyse t

he avail

able inf

orm

aton prov

ided a

select the appropriate

del

or combinat

on of models to use.

xpe

rt cre

dit judg

ement i

s also ap

plied t

o dete

rmine w

heth

er any pos

-model a

djust

ment

s are re

quire

d for cre

dit ri

ele

ment

s whic

h are not ca

pture

d by the m

odel

Modif

ed ﬁnancal in

strume

nts

Whe

re the or

ignal c

ontra

ctual t

erms o

f a ﬁnanca

l asse

t have b

een mo

dif

ed for c

redit re

aso

ns and th

e inst

rum

ent has n

en dere

cogni

sed (

an ins

tru

ment i

s derec

ognis

ed whe

n a modif

ca

tion re

sult

s in a chan

ge in cas

h ﬂows tha

t the G

roup

woul

d consi

der sub

stant

ial), the res

ultin

g modif

cat

ion los

s is re

cognis

ed wit

hn cred

it impar

ment i

n the inco

me sta

temen

wit

h a corre

spon

ding de

crea

se in th

e gross ca

yin

g value of t

he as

set

. If the mo

dif

cati

on involve

d a conces

sion t

hat th

ban

k would no

t othe

wis

e consid

, t

he inst

rum

ent is co

nside

red to b

e credi

-im

pare

d and is con

sider

ed for

bor

ne.

xpe

cted cr

edit lo

ss for m

odif

ed ﬁn

ancal as

set

s tha

t have no

t been d

ereco

gnis

ed and are n

ot con

sider

ed to be cr

edit

imp

ared wi

ll be rec

ognis

ed on a 12

-m

onth b

asis

, or a life

tme b

asis

, if ther

e is a signﬁca

nt incre

ase in cr

edit r

isk. T

hes

e asse

are as

ses

sed (by co

mpar

ison t

o the or

ignat

ion dat

) t

o dete

rmine w

het

her th

ere has b

een a si

gnﬁcant inc

reas

e in credi

t risk

sub

sequ

ent to t

he modi

fc

ation

. Alth

ough lo

ans ma

y be mo

dif

ed for n

on-cre

dit rea

son

s, a signﬁc

ant incre

ase in c

redit r

isk

y occur. In addit

on to th

e recog

niton o

f modif

cat

ion gai

ns and lo

sses

, the r

evise

d carr

ing valu

e of modi

fe

d ﬁnanc

set

s will imp

act th

e calcul

ation o

f expe

cted cr

edit lo

sses

, wit

h any increa

se or de

crea

se in exp

ecte

d credi

t loss r

ecogn

ised

wit

hn imparm

ent.

Forborne loa

For

born

e loan

s are tho

se loa

ns tha

t have be

en mod

if

ed in res

pons

e to a cust

omer

’

s ﬁnan

cal dif

fcu

ltie

s. For

beara

nce

str

ategi

es ass

ist clie

nts w

ho are te

mpor

arily i

n ﬁnancal d

istre

ss and ar

e unabl

e to mee

t their o

rign

al contr

actua

l repa

ymen

ter

ms. F

orbe

arance c

an be inti

ated by t

he clien

t, th

e Grou

p or a thir

d-part

y in

cludn

g governm

ent sp

onso

red pro

gramm

or a con

glome

rate of c

redit in

sttu

tion

s. For

bear

ance ma

y inclu

de debt r

estr

uct

uring s

uch as n

ew repa

ymen

t sche

dules

payment deferrals

, tenor

extension

s, interest

only payment

s, lower

interest rates, forgiveness of princpal, interest

or fees

or relaxa

tion of loan

covenants.

For

born

e loan

s that h

ave bee

n modif

e

d (

and not d

ereco

gnise

d) on ter

ms th

at are no

t consi

stent w

ith th

ose re

adily

avail

able in t

he mar

ket and/

or wher

e we have gra

nted a co

nces

sion com

pare

d to the o

rignal t

erm

s of the l

oans ar

con

sidere

d cred

imp

ared if th

ere is a d

etri

menta

l impact o

n cash ﬂow

s. Th

e modif

cat

ion los

s (

e Clas

sif

catio

n and

asure

ment – Mo

dif

cati

ons

) is re

cogni

sed in t

he proﬁt o

r loss w

ithn cre

dit imp

armen

t and th

e gross c

arr

yin

g value of

the l

oan re

duced by t

he sam

e amoun

t. Th

e modif

e

d loan is d

isclo

sed as ‘

Loans s

ubjec

t to for

beara

nce – cre

dit

-impare

d’

Loan

s that h

ave bee

n subje

ct to a for

bear

ance mo

dif

catio

n, but w

hich are n

ot con

sidere

d credi

mpare

d (

not cl

assi

f

as CG13 or CG14

), are di

sclos

ed as ‘

Forb

orne – n

ot cre

dit

-impare

d’

. Th

is may i

nclud

e amend

ment

s to coven

ants w

ithn t

contractual terms.

332

Standard Chartered

– Ann

ual Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

8. Cr

edit imparm

ent

continued

ite-

off

s of cr

edit-imp

are

d inst

rume

nts an

d rever

sal of im

parm

ent

o the ext

ent a ﬁnan

cal debt i

nstr

umen

t is cons

idere

d irre

coverabl

e, the ap

plicabl

e por

tion of t

he gros

s carr

ing valu

e is

itten o

ff ag

ainst t

he rela

ted lo

an provi

son. S

uch loan

s are wr

itte

n off af

ter al

l the ne

cess

y proc

edure

s have b

een

comp

lete

d, it is de

cided t

hat th

ere is n

o realis

tc prob

abilt

y of re

cover

y and t

he amou

nt of th

e loss h

as be

en dete

rmin

ed.

Sub

sequ

ent re

coverie

s of amou

nts p

revio

usly w

ritt

en of

f decre

ase th

e amou

nt of th

e proviso

n for cre

dit imp

armen

t in the

income statement.

Loss pro

visons on purch

ased or

orig

nated credit

-impa

instruments (POCI)

The G

roup m

eas

ures ex

pecte

d cred

it loss o

n a lifet

me bas

is for P

OCI ins

tru

ment

s thro

ugho

ut the li

fe of the i

nstr

ume

nt.

However, expe

cted cr

edit lo

ss is no

t reco

gnise

d in a sepa

rate lo

ss prov

ison on in

tial re

cognit

on for PO

CI ins

tru

ment

s as

the l

ifetm

e expe

cted cr

edit lo

ss is inh

erent w

ithn t

he gros

s carr

ing amo

unt of th

e inst

rum

ent

s. The G

roup r

ecogn

ises

the c

hange i

n lifetm

e expe

cted c

redit lo

sse

s arisn

g subs

equen

t to inti

al reco

gniton in t

he inco

me sta

temen

t and th

cumu

lati

ve chang

e as a los

s provis

on. Wh

ere life

tme ex

pecte

d credi

t loss

es on PO

CI inst

rum

ent

s are les

s than t

hos

e at

inti

al reco

gniton

, then t

he favo

urabl

e diff

erence

s are rec

ognis

ed as im

parm

ent gain

s in the in

come st

atem

ent (

and as

imp

armen

t loss w

here t

he exp

ecte

d credit l

osse

s are gre

ater

Improvement in credit ri

sk/

curing

A per

iod m

ay elap

se fro

m the p

oint at wh

ich ins

trum

ent

s ente

r lifetm

e expe

cted c

redit lo

sse

s (

stag

e 2 or sta

ge 3

) an

are re

clas

sif

ed b

ack to 12

-m

onth e

xpec

ted cre

dit los

ses (

tage 1). For ﬁnan

cal as

set

s that ar

e credit

-imp

ared (

tage 3)

a tran

sfer t

o stage 2 o

r stag

e 1 is onl

y perm

itte

d where t

he ins

tru

ment is n

o long

er cons

idere

d to be cre

dit

-impar

ed.

An in

str

ument w

ill no lo

nger b

e consi

dered c

redit

-imp

ared wh

en the

re is no sh

ort

fall of ca

sh ﬂows co

mpare

d to the

orignal c

ontractual terms

For ﬁn

ancal as

set

s wit

hn stag

e 2, the

se can on

ly be tr

ansfe

rred t

o stag

e 1 when t

hey are no l

onger c

onsid

ered to h

ave

exp

erie

nced a si

gnﬁcant in

creas

e in cred

it risk

Whe

re signﬁcan

t incre

ase in cr

edit r

isk was de

term

ined u

sing qu

antit

atve me

asure

s, th

e instr

ume

nts w

ill aut

omat

ically

tran

sfer b

ack to st

age 1 wh

en the o

rigna

l PD base

d tran

sfer cr

iter

a are no lo

nger m

et. Wh

ere ins

tru

ment

s were t

ransf

erre

to st

age 2 due t

o an ass

ess

ment of q

ualita

tve fac

tors

, the i

ssue

s that l

ed to th

e recla

ssif

ca

tion mu

st be cur

ed bef

ore th

ins

tru

ment

s can be re

clas

sif

ed t

o stage 1

. This in

clud

es inst

ances w

here m

anage

ment ac

tions l

ed to in

str

ument

s be

ing

cla

ssif

ed a

s stag

e 2, req

uirng t

hat act

ion to b

e reso

lved be

fore lo

ans are r

eclas

sif

ed t

o stage 1

A for

bor

ne loan c

an only b

e remove

d from b

eing dis

clos

ed as fo

rbo

rne if t

he loan i

s perf

ormi

ng (

sta

ge 1 or 2) and a fu

rth

wo-year pr

obat

ion per

iod is m

et.

In ord

er for a fo

rbo

rne lo

an to be

come p

erfor

ming

, the fo

llowin

g crite

ra ha

ve to be sa

tisf

ed:

•

At lea

st a year h

as pas

sed w

ith no de

fault b

ase

d upon t

he for

bor

ne cont

ract ter

•

The c

ustom

er is likel

y to rep

ay it

s oblig

atons i

n full w

itho

ut rea

lisng se

curi

•

The c

ustom

er has n

o accumu

late

d impar

ment a

gains

t amoun

t out

stand

ing (

except f

or ECL

)

Sub

sequ

ent to t

he crit

era ab

ove, a fur

the

r two

-year prob

atio

n peri

od has t

o be f

ulﬁlled

, wher

eby regu

lar pa

ymen

ts are

mad

e by the cus

tome

r and non

e of the ex

pos

ures to t

he cust

omer ar

e more t

han 30 da

ys pa

st due.

2021

$millon

2020

$millo

Net c

redit i

mpar

men

t on loan

s and ad

vance

s to ban

ks an

d custo

mer

258

,19

Net c

redit i

mpar

men

t on debt s

ecu

rite

Net c

redit i

mpar

men

t relat

ing to ﬁn

ancal g

uara

ntee

s and lo

an comm

itme

nts

Net c

redit i

mpar

men

t relat

ing to o

ther ﬁ

nanca

l ass

ets

–

(2)

Credit imparme

254

2,325

o mat

eri

al pu

rcha

sed o

r or

igna

ted c

red

-im

pa

red (P

OCI) a

sse

. G

oodwil

l, property

, plant and equipment and other imparment

Accounting po

licy

Refer t

o the be

low refe

rence

d note

s for th

e relevant a

ccoun

ting po

licy.

2021

$millon

2020

$millo

Imp

airm

ent of g

ood

will (No

te 17

)

–

Imp

airm

ent of p

rope

, pl

ant an

d equip

ment (N

ote 1

)

106

Imp

airm

ent of o

ther i

ntan

gble as

set

s (No

te 17

)

Other

262

(51)²

Propert

, plant

and equipment and other impa

rment

372

Goodwill, property

, plant and

quipment

and other imparment

372

587

the

r Inc

lud

es Imp

air

men

t of inve

stm

ent i

n Chin

a Boh

ai $3

00 mi

llon

clu

des a r

ever

sal o

f $165 m

illo

n as a re

sul

t of rec

over

y on a d

isp

ute

d der

iva

tve r

ecei

vabl

e, fo

llow

ing a f

avou

rab

le cou

rt r

ulin

333

Standard Chartered

– An

nual Re

por

t 2021

Financal statements

10. T

axation

Accounting po

licy

Inco

me tax p

ayabl

e on proﬁt

s is ba

sed o

n the app

licable t

ax la

w in each ju

rsdi

cton an

d is reco

gnise

d as an exp

ens

e in the

per

iod in w

hich pro

ﬁts ar

ise.

Def

erre

d tax is p

rovide

d on tem

porar

y d

iffe

rence

s arisn

g bet

wee

n the ta

x base

s of as

set

s and liab

lites an

d their c

arr

amo

unt

s in the co

nsoli

date

d ﬁnancal s

tatem

ent

s. De

ferr

ed tax i

s deter

mine

d using t

ax rat

es (

and la

) that h

ave be

ena

cted or s

ubst

antive

ly ena

cted as a

t the ba

lance sh

eet da

te, and t

hat are ex

pect

ed to app

ly wh

en the re

late

d defer

red

tax a

sse

t is real

ised o

r the def

erre

d incom

e tax lia

blit

y is se

ttle

Def

erre

d tax as

set

s are re

cogni

sed wh

ere it is p

robab

le tha

t fut

ure ta

xable proﬁt w

ill be a

vailabl

e again

st which t

tem

porar

y d

iffe

rence

s can be ut

ilsed

. Where p

erm

itted

, defe

rred t

ax as

set

s and liab

lites ar

e off

set o

n an enti

ty b

asis a

not by co

mpon

ent of de

ferr

ed taxat

ion.

Cur

rent an

d defer

red t

ax rela

ting to i

tems w

hich are ch

arge

d or credi

ted dir

ectl

y to equi

ty, is credi

ted or ch

arge

d direct

ly to

equ

y and is su

bseq

uent

ly reco

gnise

d in the i

ncome s

tatem

ent to

geth

er with t

he cur

rent or d

efer

red gai

n or los

Signﬁ

cant accounting estimates and judgements

•

Det

ermi

nng the G

roup’

s tax c

harge f

or the ye

ar involves e

stima

ton and j

udgem

ent

, which in

clud

es an inte

rpre

taton o

loc

al tax la

ws and an a

sse

ssme

nt of wh

ethe

r the ta

x auth

orit

es will a

ccept th

e posi

ton taken

. Thes

e judg

ement

s take

acco

unt of ext

erna

l advi

ce wher

e appro

priat

e, and th

e Grou

’

s v

iew on se

ttlin

g with t

he relevan

t tax au

thor

ites

•

The G

roup p

rovide

s for cur

rent t

ax liabli

tes at t

he bes

t estim

ate of t

he amou

nt that i

s expe

cted t

o be paid t

o the ta

aut

hori

tes wh

ere an ou

tﬂow is pr

obabl

e. In mak

ing it

s estim

ates t

he Gro

up as

sumes t

hat th

e tax au

thor

ites w

ill examin

all th

e amou

nts re

por

ted to t

hem and h

ave f

ull know

led

ge of all re

levant info

rmat

on

•

The r

ecoverab

ilt

y of the G

roup

’s defe

rre

d tax as

set

s is ba

sed on m

anage

ment

’s judge

ment of t

he avail

ablit

y of f

utu

taxab

le proﬁt

s aga

inst wh

ich the d

efer

red ta

x ass

ets w

ill be ut

ilse

d. In prep

arin

g manag

emen

t forec

ast

s the ef

fect o

applicable

law

and regulations rele

vant to the util

sation of future taxable proﬁ

s have

been considered.

The f

ollowi

ng tabl

e provid

es anal

ysis of t

axatio

n charg

e in the yea

2021

$millon

2020

$millo

The c

harg

e for ta

xation b

ase

d upo

n the pr

oﬁt for t

he year co

mpr

ises:

Current tax:

Unit

ed Ki

ngdo

m corp

orat

ion ta

x at 19 per c

ent (2020: 19 pe

r cent):

Cur

rent t

ax cha

rge on in

come f

or the ye

–

Adju

stme

nts i

n resp

ect of p

rior ye

ars (inc

ludn

g doub

le tax r

elief

)

Foreign tax:

Cur

rent t

ax cha

rge on in

come f

or the ye

896

061

Adju

stme

nts i

n resp

ect of p

rior ye

ars

(

52)

879

668

Deferred tax:

Orignation/

ver

sal

of temporar

y differences

218

Adju

stme

nts i

n resp

ect of p

rior ye

ars

)

155

194

ax on p

roﬁt

s on o

rdin

y act

ivt

ies

1,0

Effectiv

e tax ra

0.9

.4%

The t

ax char

ge for t

he year of $

1,034 mi

llon (31 De

cemb

er 202

0: $

862 millo

) on a proﬁt b

efore t

ax of $

347 millon

(31 De

cemb

er 202

0: $

1,613 millon) reﬂect

s the i

mpact o

f count

ries w

ith ta

x rates hi

gher or l

ower than t

he UK

, the m

ost sig

nﬁcant

of which is

India, non-deductible expenses and

-creditable withhold

ng taxes. The 20

20 charge

included adjustment

s i

res

pect of p

rior ye

ars o

f $288 millo

n, bet

en cur

rent and d

efer

red ta

x, re

latin

g to the t

reatm

ent of l

oan imp

armen

ts in I

ndia

as de

duct

ible in th

e per

iod th

ey are impa

red.

Fore

ign tax in

clud

es curr

ent ta

x of $78 millon (

31 Dece

mber 2020: $167 millon

) on th

e proﬁt

s ass

ess

able in H

ong Kong. D

efer

red

tax i

nclud

es ori

gnati

on or rever

sal of t

empo

rar

y dif

feren

ces of $

39 millon (3

1 Decem

ber 2020: $(30

) m

illon

) pr

ovided a

t a rate

of 16

.5 pe

r cent (31 D

ecemb

er 2020: 16.

5 per cen

) on t

he proﬁt

s as

ses

sable in H

ong Kong

334

Standard Chartered

– Ann

ual Re

por

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

10. T

axation

continued

ax ra

te:

The t

ax char

ge for th

e year is hi

gher th

an the ch

arge at t

he rate o

f corp

orati

on tax in t

he UK

, 19 per c

ent.

The diff

erences are explaine

d below:

2021

2020

$millon

millon

Pro

ﬁt on or

dina

ry a

cti

vt

ies be

for

e tax

1,6

ax at 19 p

er cent (

20: 1

9 per ce

)

636

306

Lower t

ax rate

s on over

sea

s ear

nings

(93)

(

High

er ta

x rates o

n over

seas e

arni

ngs

366

305

ax at do

mest

ic rat

es app

licabl

e wher

e proﬁt

s ear

ned

909

575

35.7

Non-credita

ble withholdng

taxes

120

3.6

127

ax exem

pt inco

(85

)

.5)

(12

(

)

Share of

asso

ates and jo

nt ventures

(

33)

(

1.0)

(

Non-deductible e

xpenses

217

6.5

0.2

Regulatory ﬁne

0.4

–

Ban

k lev

Non-tax

able losses on i

estments

–

Pay

ment

s on ﬁn

ancal in

str

ume

nts i

n rese

ves

)

(

)

(59)

.7)

Goodwill i

mparment

–

5.8

Def

err

ed tax n

ot re

cogni

sed

1.6

Deferred tax assets written-off

–

Deferred tax ra

te changes

–

(51)

Adju

stme

nts t

o tax ch

arge in r

esp

ect of pr

ior ye

ars

(

(6)

Other items

(

.1)

2.0

ax on p

roﬁt o

n ord

inar

y ac

tiv

tie

1,0

0.9

53.4

e 2020 com

para

tiv

es ha

ve bee

n rec

las

sif

e

d as fo

llow

s to ali

gn wi

th pre

sen

tat

ion i

n the cu

rre

nt pe

rio

d: ta

x exemp

t inc

ome by $

6 mill

on f

rom $(1

33) mill

on

to $(

127

) mill

on, n

on-

ded

uct

ible e

xpe

nse

s by $1

02 mill

on fr

om $26

6 mill

on to $

4 mill

on an

d oth

er ite

ms by $96 m

illo

n fro

m $(

) m

illo

n to $

32 mill

Fact

ors af

fec

ting th

e tax ch

arge in f

utu

re year

s: the G

roup

’s tax ch

arge, an

d effe

ctive t

ax rate i

n fut

ure year

s cou

ld be af

fect

by severa

l factor

s inc

ludng a

cquist

ions

, disp

osals a

nd rest

ruct

urin

g of our b

usine

sse

s, th

e mix of pr

oﬁts a

cross j

ursd

icton

s with

dif

feren

t stat

utor

y t

ax rate

s, cha

nges in t

ax leg

islat

on and ta

x rate

s and res

oluti

on of un

cert

ain tax p

osito

ns.

The eval

uati

on of unc

erta

in tax po

sito

ns involves a

n inter

pret

aton of l

ocal ta

x laws w

hich cou

ld be su

bject t

o challe

nge by a

tax a

utho

rit

, an

d an ass

essm

ent of w

heth

er the t

ax aut

hori

tes wi

ll accept t

he po

siton t

aken. Th

e Grou

p does n

ot cur

rentl

con

sider t

hat as

sumpt

ions o

r judge

ment

s mad

e in ass

essi

ng tax li

ablite

s have a sig

nﬁcant ri

sk of res

ultin

g in a mate

rial

adju

stme

nt wit

hn the nex

t ﬁnancal ye

ax re

cog

nise

d in ot

her

comprehensive income

2021

2020

Current tax

$millon

Deferred

tax

$millon

Current tax

$millo

Deferred tax

$millo

otal

$millo

Ite

ms th

at will n

ot be re

cla

ssif

e

d to

income s

tatement

–

(82)

–

(17

)

(17

)

Own cre

dit adjustment

–

(6)

–

Equit

y i

nstr

ume

nts a

t fair val

ue thr

ough

other comprehensive inc

–

(59)

–

(27

)

Retirement

beneﬁt obligatons

–

(

17)

(17

)

–

Items

that may be

reclassed

subsequently to income statement

–

(1)

(

Deb

t inst

rum

ent

s at fai

r value t

hroug

other comprehensive inc

–

(1)

)

sh ﬂow he

dges

–

(2)

–

ota

l tax credi

(

charge

)

recognised

in equity

–

(8)

(1)

(

71)

335

Standard Chartered

– Annu

al Repo

rt 2021

Financal statements

10. T

axation

continued

Cur

rent t

ax:

e follow

ing are t

he moveme

nts i

n curre

nt tax d

uring t

he year

Current tax compr

ises:

2021

$millon

2020

$millo

Current tax assets

808

539

Current tax liab

lites

(

t curr

ent t

ax ope

nin

g bala

nce

(

Movem

ent

s in inc

ome st

atem

ent

(879)

)

Movements in other

comprehensi

e income

–

(1)

,161

971

Other movements

t curr

ent t

ax bal

ance a

s at 31 D

ecem

ber

Current tax assets

808

Current tax liab

lites

48)

ota

418

Deferred tax:

The fol

lowing a

re the ma

jor def

erre

d tax lia

blites a

nd ass

s recog

nise

d by the Gr

oup and m

ovement

s th

ereon

dur

ing th

e year:

1 January

2021

$millon

Exchange

& ot

her

adjustments

$millon

(

Charge)

credi

to p

roﬁ

$millon

(

Charge)

credi

to equity

$millon

31 December

2021

$millon

Deferred tax comprises:

Accelerated

depreciaton

)

(

–

(51

Imp

airm

ent pr

oviso

ns on lo

ans an

d advan

ces

–

ax los

ses c

arr

ied fo

ward

(3)

(

16)

–

263

Fair v

alue through other comprehensive

income

(

(2)

(

sh ﬂow he

dges

–

(2)

–

Own cre

dit adjustment

–

(6)

(3)

Retirement

beneﬁt obligatons

(5)

(

17)

Share-

based payments

–

Other temporar

y di

ferences

(33)

–

Net defer

red tax

sets

224

(

(155)

(8)

1 Januar

2020

$millo

Exchange

& other

adjustments

$millo

(

Charge)

credit

to proﬁt

$millo

(

Charge)

credit

to equity

$millo

31 December

2020

$millo

Deferred tax comprises:

Accelerated

depreciaton

(

26)

–

)

Imp

airm

ent pr

oviso

ns on lo

ans an

d advan

ces

957

(

–

ax los

ses c

arr

ied fo

ward

(5)

–

282

Fair v

alue through other comprehensive

income

)

–

(2)

(

sh ﬂow he

dges

–

Own cre

dit adjustment

–

Retirement

beneﬁt obligatons

(1)

(

Share-

based payments

(

–

Other temporar

y di

ferences

(187

)

268

Net defer

red tax

sets

494

(9)

(

94)

)

336

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

10. T

axation

continued

Def

erre

d tax co

mpris

es as

set

s and lia

blites a

s follow

2021

2020

$millon

Asset

$millon

Liablity

$millon

otal

$millo

Asset

$millo

Liablit

$millo

Deferred tax comprises:

Accelerated

depreciaton

(515)

(533

)

(

)

Imp

airm

ent pr

oviso

ns on lo

ans

and adv

ances

351

389

419

ax los

ses c

arr

ied fo

ward

263

172

282

111

Fair va

lue th

rough o

the

comprehensive income

(

26)

(

)

sh ﬂow he

dges

–

(

(4)

Own cre

dit adjustment

(3)

(1)

(2)

Retirement

beneﬁt obligatons

Share-

based payments

–

Other temporar

y di

ferences

290

395

(297

)

859

00)

)

At 31 De

cembe

r 20

1, th

e Grou

p has ne

t defer

red t

ax ass

s of $59 millon (3

1 Decem

ber 2020: $224 mill

)

. The r

ecoverab

ilt

y of

the G

roup’

s def

erre

d tax as

set

s is b

ased o

n manag

emen

t’s judg

ement o

f the ava

ilablit

y of f

ure taxab

le proﬁt

s aga

inst wh

ich

the d

efer

red ta

x ass

ets w

ill be ut

ilse

Of t

he Gro

’

s t

otal d

efer

red ta

x asse

, $263 millo

n relat

es to ta

x loss

es car

ried f

ward. T

hese t

ax los

ses ha

ve aris

en in

ind

vidu

al legal e

ntit

es and wi

ll be of

et as f

utur

e taxabl

e proﬁt

s aris

e in thos

e enti

tes.

•

$10

4 millon o

f the def

erre

d tax a

sset

s rel

ating t

o loss

es has a

rise

n in Irela

nd, wh

ere the

re is no ex

pir

y dat

e for unu

sed t

los

ses

. Thes

e loss

es rel

ate to air

craft l

easi

ng and are e

xpec

ted to b

e full

y util

sed over t

he usef

ul e

conom

ical life o

f the as

set

bei

ng up to 18 ye

ars

•

$112 mi

llon of th

e defe

rred t

ax as

set

s relat

ing to lo

sse

s has ar

isen in t

he US. M

anag

ement f

oreca

sts s

how tha

t the los

ses ar

exp

ecte

d to be f

ully u

tilse

d over a per

iod of t

hree ye

ars

The r

emainn

g defer

red t

ax ass

s of $47 millo

n relat

ing to lo

sse

s have ar

isen in o

ther ju

rsdi

ctons a

nd are exp

ecte

d to be

recove

red in le

ss th

an 10 year

Unrecogn

ised deferred ta

2021

$millon

2020

$millo

No a

ccou

nt ha

s bee

n taken of t

he f

ollowi

ng po

tent

ial d

efer

red t

ax as

set

(lia

blit

es):

Withhold

ng tax on unrem

itted earnings

rom

overseas subsid

aries and

asso

ates

(397

)

losses

1,6

Hel

d over gai

ns on in

corp

orat

ion of over

as bra

nche

)

Other temporar

y di

ferences

221

The a

ggreg

ate te

mpora

y diff

erence

s relat

ing to u

nreco

gnise

d defer

red t

ax ari

sng on un

remitt

ed ear

ning

s from over

sub

sidar

ies and a

sso

ciates a

t the bal

ance sh

eet da

te was $(5,

) m

illon (31 De

cemb

er 202

0: $(5,183) millon)

, th

e gross val

of th

e unre

cognis

ed ta

x loss

es (

ncludn

g capita

l loss

) was $8

92 millon (

31 Dece

mber 2020: $7

213 mil

lon

), gross val

ue of hel

over gain

s on inco

rpo

ratio

n of overs

eas br

anche

s $(1,47

) millon (

31 Dece

mber 2020: $(1,4

89) millon

), and ot

her te

mpora

dif

feren

ces $79

0 millon (31 D

ecem

ber 2020: $9

6 millon)

337

Standard Chartered

– Ann

ual Re

por

t 2021

Financal statements

11. Divdends

Accounting po

licy

Div

dend

s on ordi

nar

y sha

res and p

refere

nce sha

res cla

ssif

e

d as equi

ty a

re reco

gnise

d in equi

y in the yea

r in which t

hey are

dec

lared

. Div

dends o

n ordin

y equit

y s

hares ar

e recor

ded in th

e year in w

hich they a

re decl

ared an

d, in res

pect of t

he ﬁnal

divdend, have been appro

ved by the shareholders.

The B

oard co

nside

rs a nu

mber o

f facto

rs pr

ior to di

vden

d decl

aratio

n which in

clud

es the ra

te of re

cover

y in the G

roup’

ﬁnan

cal per

form

ance, t

he macr

oecon

omic env

ironm

ent, a

nd opp

ort

unite

s to fu

rth

er invest in ou

r busin

ess an

d grow proﬁt

ably

in ou

r market

Ordinar

y equity share

2021

Cents per share

$millon

2020 ﬁnal di

vde

nd dec

lare

d and pai

d dur

ing th

e year

2021 int

erm di

vde

nd dec

lare

d and pa

id dur

ing th

e year

Div

dend

s on ordi

nar

y eq

uit

y share

s are reco

rded i

n the pe

riod in w

hich th

ey are de

clared a

nd, in re

spect o

f the ﬁn

al divd

end,

have b

een ap

proved by th

e share

holde

. Accordin

gly

, th

e ﬁnal ord

inar

y eq

uit

y shar

e divd

ends s

et out ab

ove relat

e to the

respect

ive

prior yea

On 31 M

arch 2020, the Gr

oup ann

ounce

d that in r

espo

nse to a r

eque

st fro

m the Pr

udent

ial Regu

latio

n Autho

rit

y and a

s a

con

sequ

ence of t

he unpr

eced

ente

d challe

nges fa

cing th

e world d

ue to th

e CO

VID

19 pan

demic

, it

s Board h

ad deci

ded af

ter

care

ful co

nside

raton t

o with

draw th

e recom

mend

ation t

o pay a ﬁn

al divd

end fo

r 2019 of 20 cent

s per o

rdinar

y s

hare.

2021 recommended ﬁnal ordinary equit

y share divdend

The 2021 o

rdinar

y e

quit

y sh

are div

dend re

comme

nded by t

he Bo

ard is 9 cen

ts pe

r share. T

he ﬁnan

cal stat

ement

s fo

r the year

end

ed 31 De

cembe

r 20

1 do not r

eﬂect t

his div

dend a

s this w

ill be acco

unte

d for in sh

areho

lder

s’ equi

ty a

s an appro

pria

ton of

ret

ained p

roﬁt

s in the yea

r ending 3

1 Decem

ber 202

The d

ivde

nd will b

e paid in e

ither p

ound

s ster

ling, H

ong Kong d

ollar

s or US do

llars o

n 12 May 202

2 to sha

rehol

der

s on the U

reg

ister o

f memb

ers at t

he clo

se of bu

sines

s in the U

K on 25 Feb

rua

y 20

Preference

shares and A

dditonal Tier 1

securites

Div

dend

s on the

se pre

feren

ce share

s and se

curit

es cla

ssif

ed a

s equi

ty a

re reco

rded in t

he per

iod in w

hich th

ey are decl

ared

2021

$millon

2020

$millo

Non-cumulative redeemable pr

eference shares:

.014 p

er cen

t pref

erenc

e share

s of $5 e

ach

6.4

09 pe

r cent pr

efer

ence sh

ares o

f $5 eac

Addit

onal T

r 1 secu

rit

es: ﬁxed r

ate re

sett

ing pe

rpe

tual s

ubor

dinat

ed con

ting

ent conve

rti

ble se

curi

tes

344

410

395

338

Standard Chartered

– Annu

al Repo

rt 202

Financal state

ments

Notes to the

ﬁnancal

statement

. Earnings per ordin

ary sh

are

Accounting po

licy

Basic e

arnings per ordinar

y share is calcul

ated by divding the proﬁt attr

ibutable to ordinar

y shareh

olders by the weighte

average numb

er of ordinar

y shares out

standing, excluding own sh

ares held. Dilute

d earnings per ordinar

y shar

e is calculated

by div

ding th

e basi

c earni

ngs

, which re

quire n

o adjus

tmen

t for the e

ffe

cts o

f dilut

ve pote

ntial o

rdinar

y s

hares

, by the

weigh

ted ave

rage nu

mber o

f ordinar

y shar

es tha

t would ha

ve bee

n out

stan

ding as

sumin

g the conver

sio

n of all dilu

tve

potential o

rdinary shares, ex

cluding o

wn shares

held.

The G

roup a

lso me

asur

es ear

nings p

er shar

e on an und

erly

ing ba

sis. T

his dif

fer

s fro

m earn

ings deﬁ

ned in IA

S 33 Earn

ings

per s

hare. Un

derl

ying e

arnin

gs is pro

ﬁt/

(los

) attr

ibut

able to o

rdinar

y shar

ehold

ers a

djust

ed for p

roﬁts o

r loss

es of a cap

ital

nature; amounts consequent to inv

estm

ent

transactions driven by

rategic

intent

; a

nd other infrequent and/

or exceptional

tran

sact

ions t

hat are si

gnﬁcant or m

ater

ial in the c

ontext o

f the G

roup

’s nor

mal bus

ines

s earn

ings fo

r the year.

The t

able b

elow prov

ides th

e basi

s of und

erly

ing ea

rning

2021

$millon

2020

$millo

Pro

ﬁt for t

he p

eriod a

ribu

tab

le to e

quit

y hol

der

2,3

751

Non-control

ling interest

vden

d paya

ble on pr

efer

ence sh

ares a

nd A

T1 cl

assi

f

ed as e

quit

(395

)

Pro

ﬁt for t

he p

eriod a

ribu

tab

le to or

din

y shar

eho

lder

,90

329

Items nor

malised:

Regulatory ﬁne

(

Restructuring

507

382

odw

ill imp

arm

ent (No

te 9)

–

Net (g

ain

)/loss o

n sale o

f Busi

ness

es (No

te 6

)

(20)

ax on n

orma

lise

d item

(87

)

Underlying proﬁt att

ributable to equity holder

2,36

sic – W

ghte

d avera

ge num

ber of s

hare

s (

millo

)

,10

Diluted – W

eighted

erage number of

ares

(

millons

)

3,154

sic e

arnin

gs pe

r ord

inar

y sh

are (cent

)

0.4

Dil

ute

d ear

ning

s per o

rdin

y shar

e (

)

60.

10.

Underlying basic earning

s per

ordinar

y share (

cents)

Underlying dilute

arnings per ordinary shar

(

cent

)

5.0

o tax i

s inc

lud

ed in re

spe

ct of t

he im

par

men

t of go

odw

ill a

s no ta

x reli

ef is a

vail

abl

339

Standard Chartered

– Ann

ual Rep

t 2021

Financal statements

13. Financa

l instruments

Classif

cation and

asurement

Accounting po

licy

The G

roup c

lass

es it

s ﬁnanca

l asse

ts in

to the f

ollowin

g mea

surem

ent cate

gor

ies: amo

rtis

ed cos

t; fair val

ue thro

ugh ot

her

comp

rehen

sive in

come (F

CI); and fair val

ue thr

ough pro

ﬁt or los

s (FV

TPL)

. Fin

ancal liab

lites a

re clas

sif

ed as e

ither

amo

rtis

ed cos

t, or h

eld at fai

r value th

rough pr

oﬁt or los

s. Ma

nagem

ent de

term

ines th

e clas

sif

catio

n of it

s ﬁnanca

l asse

and li

ablite

s at intial r

ecogn

iton of t

he ins

tru

ment or, wher

e applica

ble, at t

he time o

f recl

assif

ca

tion

Fin

anc

al as

set

s hel

d at amo

rti

sed co

st and f

air valu

e thr

ough o

the

r comp

reh

ens

ive incom

Deb

t inst

rume

nts h

eld at am

ort

ised c

ost or he

ld at F

CI have co

ntra

ctual t

erms t

hat give r

ise t

o cashﬂow

s that ar

e solel

ymen

ts of p

rincp

al and int

erest (SPPI) cha

racter

istc

s. Pr

incpal i

s the fai

r value of t

he ﬁnan

cal ass

et at inti

al reco

gniton

but t

his ma

y chang

e over the lif

e of the i

nstr

umen

t as amo

unt

s are rep

aid. Int

erest co

nsis

ts of c

onsid

erato

n for th

e time

value o

f money, for the Cr

edit Ri

sk ass

ociat

ed wit

h the pr

incpal a

mount o

stand

ing dur

ing a par

ticu

lar per

iod an

d for ot

her

sic len

ding ri

sks an

d cost

s, as we

ll as a pro

ﬁt margin

In as

ses

sing wh

ethe

r the con

tract

ual cas

hﬂows ha

ve SPPI chara

cteri

stc

s, the G

roup c

onsid

ers t

he cont

ractu

al ter

ms of th

instrument. This i

ncludes assessing

whether the ﬁ

nancal asset

contains

a contractual

term that could c

hange the tim

ng or

amo

unt of co

ntract

ual cas

hﬂows su

ch that i

t would no

t mee

t this con

diton

. In mak

ing the a

sse

ssme

nt, t

he Gro

up con

sider

•

Con

ting

ent event

s tha

t would ch

ange th

e amou

nt and ti

mng of cas

hﬂows

•

Leverag

e charac

teri

stcs w

hich inc

reas

e the var

iablit

y of co

ntrac

tual ca

shﬂows

•

Prepayment and extension terms

•

erms t

hat limt t

he Gro

’s claim to ca

shﬂows f

rom sp

ecif

ed a

sse

ts (

e.g. no

n-reco

urs

e asse

t arran

geme

nts

)

•

Feat

ures t

hat mo

dif

y con

sider

aton of t

he tim

e value of m

oney – for e

xample, p

erio

dcal res

et of int

erest r

ates

Whe

ther ﬁn

ancal as

set

s are he

ld at amo

rti

sed cos

t or at F

CI dep

ends o

n the obj

ectve

s of the b

usine

ss mo

dels u

nder

whi

ch the as

set

s are he

ld. A bu

sines

s mod

el refe

rs to h

ow the G

roup man

ages ﬁ

nancal a

sset

s to ge

nerat

e cashﬂow

The G

roup m

akes an as

ses

sment o

f the ob

jectve o

f a busin

ess m

odel in w

hich an a

sset i

s held a

t the ind

vidu

al prod

uct

bus

ines

s line, an

d, wher

e applic

able, w

ithn bu

sines

s lines d

epen

ding on t

he way th

e busin

ess i

s manag

ed and in

form

aton

is pro

vided to management. Factors considered

include:

•

How th

e per

form

ance of t

he prod

uct bus

ines

s line is eval

uate

d and rep

orte

d to th

e Grou

’

s m

anage

ment

•

How ma

nager

s of th

e busi

ness m

odel a

re compe

nsat

ed, in

cludng w

het

her man

agem

ent is com

pens

ated b

ase

d on the

fair val

ue of as

set

s or th

e contr

actua

l cashﬂow

s colle

cted

•

The r

isk

s that a

ffe

ct the pe

rfor

manc

e of the b

usine

ss mo

del and h

ow thos

e risk

s are ma

nage

•

The f

req

uenc

, volu

me and ti

mng of sa

les in pr

ior pe

riod

s, th

e reas

ons fo

r such sal

es and ex

pect

ation

s abou

t fut

ure

sales activty

The G

roup’

s bus

ines

s mode

l ass

essm

ent is a

s follows:

Business model

Busines

objectve

Characteristcs

Businesses

Products

Hold to

collect

Int

ent is t

o orig

nate

ﬁnanc

al asset

and

hol

d the

m to mat

urit

collecting

the

contract

ual cashﬂows

over th

e ter

m of the

instrument

•

Provi

dng

ﬁnancng a

ignat

ing as

set

s to e

arn int

eres

income

as primar

y i

ncome stream

•

Perfor

ming Credit Risk

management

activties

•

Costs include funding

cost

transactio

n costs a

nd imparment

losses

•

Corporate Lend

ing

•

Financal Markets

•

ransaction Bankin

•

Retai

l Le

nding

•

reasury Markets

(Loan

s and

Borrowi

ngs

)

•

Loan

s and ad

vance

•

Debt securites

Hold to

collect

and s

ell

Business objectv

e met

through both

hold to

coll

ect an

d by selli

ﬁnanc

al asset

•

Por

tfol

ios he

ld for li

qudit

y n

eeds

;

or w

here a ce

rtai

n inter

est y

ield

proﬁ

le is ma

intan

ed; or th

at are

nor

mall

y reb

alance

d to ach

ieve

matching of

duration of assets

and liablites

•

Inc

ome st

ream

s come f

rom

interest inco

me, fair value

changes, and

imparment losses

•

reasury Markets

•

eri

vatves

•

Debt securites

Fair va

lue

through

proﬁ

t or los

All other

business

objectv

includ

trading and managing

ﬁnan

cal as

set

s on a

fair va

lue ba

sis

•

Asset

s held

for trading

•

set

s th

at are or

igna

ted,

pur

chas

ed, an

d sold f

or pro

ﬁt

taking or

under

writng activ

•

Per

form

ance o

f the po

rtf

olio is

evalu

ated o

n a fair val

ue ba

sis

•

Income stre

ams are from fair

valu

e chang

es or t

radin

g gains

or losses

•

Financal Markets

•

All other

business lines

•

rivat

ves

•

rad

ing portfolios

•

Financal Markets

reverse repos

•

Financal Markets

(FM Bo

nd and Lo



340

Standard Chartered

–

nual Re

por

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

Financ

al ass

ets w

hich ha

ve SPPI chara

cteri

stc

s and tha

t are hel

d withn a b

usine

ss mo

del wh

ose obj

ectve i

s to hold

ﬁnan

cal ass

s to colle

ct cont

ractu

al cashﬂow

s (hold t

o colle

) ar

e record

ed at am

orti

sed co

st. C

onvers

ely

, ﬁn

ancal

set

s which h

ave SPPI cha

racter

istc

s but ar

e held w

ithn a bu

sines

s mod

el who

se obje

ctve is a

chieved by b

oth coll

ectin

cont

ractu

al cashﬂ

ows and s

elling ﬁn

ancal as

set

s (Hol

d to colle

ct and se

ll) are cla

ssif

e

d as hel

d at FVOCI

Bot

h hold t

o colle

ct busin

ess an

d hold t

o colle

ct and se

ll busin

ess m

odel

s involve hol

ding ﬁna

ncal as

set

s to coll

ect th

cont

ractu

al cashﬂ

ows. H

owever

, th

e busin

ess m

odel

s are dist

nct by refe

rence t

o the f

requ

ency a

nd signﬁca

nce tha

t asse

sal

es pla

y in meet

ing th

e objec

tve und

er which a p

art

icular g

roup of ﬁn

ancal as

set

s is ma

nage

d. Hold t

o colle

ct busi

ness

dels are c

haract

eris

ed by as

set sal

es tha

t are incd

ental to m

eet

ing the o

bject

ves und

er whic

h a group o

f asse

ts is

man

aged

. Sales o

f ass

ets u

nder a h

old to co

llect bu

sine

ss mod

el can be m

ade to m

anage i

ncrea

ses in t

he cred

it risk o

ﬁnan

cal ass

s but sal

es for o

ther re

ason

s sho

uld be in

freq

uent o

r insgnif

ca

nt.

shﬂows f

rom th

e sale of ﬁn

ancal as

set

s und

er a hol

d to colle

ct and se

ll busi

ness m

odel by co

ntra

st are int

egral to

achi

evng th

e objec

tves un

der whi

ch a par

ticul

ar group o

f ﬁnancal a

sse

ts ar

e manag

ed. Thi

s may b

e the ca

se whe

frequent sales of ﬁna

ncal

ssets are required

to manage the Group

’

s daily liqud

y requirements or to meet regulatory

req

uirem

ent

s to demo

nstr

ate liqu

dit

y of ﬁnan

cal inst

rum

ent

s. Sal

es of as

set

s und

er hol

d to colle

ct and se

ll busin

ess

dels are t

here

fore bo

th mor

e fre

quent an

d more s

ignﬁcant in val

ue tha

n thos

e under t

he hol

d to coll

ect mod

el.

Equ

ity i

nst

rum

ent

s des

igna

ted a

s held a

t FVOCI

Non-t

radin

g equit

y in

str

umen

ts acq

uired f

or stra

tegic p

urp

oses ra

ther t

han capi

tal gain m

ay be ir

revocab

ly des

ignate

d at

inti

al reco

gniton a

s held a

t FVOCI on a

n instr

ume

-by-

nstr

umen

t basi

s. Di

vden

ds rece

ived are r

ecogn

ised in p

roﬁt or lo

ss.

ins and lo

sse

s arisn

g from c

hange

s in the f

air value of t

hes

e instr

ume

nts

, incl

udng for

eign excha

nge gain

s and lo

sses

are re

cogni

sed dir

ectl

y in equit

y an

d are never r

eclas

sif

ed t

o proﬁt or l

oss

, even on dere

cogni

ton.

Fin

anc

al as

set

s and li

abli

te

s held a

t fair val

ue th

roug

h proﬁ

t or los

Financ

al ass

ets w

hich are n

ot hel

d at amor

tis

ed cost o

r that ar

e not hel

d FVOCI ar

e held at f

air value t

hrou

gh proﬁt or l

oss

Financ

al ass

ets a

nd liabli

tes he

ld at fair val

ue thro

ugh pro

ﬁt or los

s are eith

er mand

ator

ily cla

ssif

e

d fair valu

e throu

gh proﬁt

or lo

ss or ir

revocabl

y desi

gnate

d at fair val

ue thro

ugh proﬁ

t or los

s at intial r

ecogn

iton.

Man

dat

orily c

las

sif

ed a

t fair val

ue th

rou

gh pro

ﬁt or lo

Financ

al ass

ets a

nd liabli

tes whi

ch are man

dator

ily h

eld at fai

r value th

rough pr

oﬁt or los

s are spl

it bet

wee

n t

sub

categ

orie

s as foll

ows:

rading, includ

ng:

•

Financ

al ass

ets a

nd liabli

tes he

ld for tr

ading

, which ar

e thos

e acquir

ed pri

ncpall

y for th

e purp

ose of s

elling i

n the

short

-term

•

Der

ivat

ves

Non-t

radin

g manda

tori

ly at fair val

ue thr

ough pro

ﬁt or los

s, inc

ludng:

•

Ins

tru

ment

s in a bus

ines

s which h

as a fair val

ue busi

ness m

odel (see th

e Grou

’

s b

usine

ss mo

del as

ses

sment) which a

re not

trading or

derivatves

•

Hyb

rid ﬁn

ancal as

set

s tha

t contain o

ne or mo

re emb

edde

d deri

vatves

•

Financ

al ass

ets t

hat wou

ld oth

wis

e be mea

sure

d at amor

tis

ed cost o

r FVOCI b

ut which d

o not ha

ve SPPI chara

cter

istc

•

Equit

y in

str

ument

s th

at have n

ot bee

n desig

nated a

s held a

t FVOCI

•

Financ

al liablit

es that constitute contingent consideraton

in a business combinaton.

sign

ated a

t fair val

ue th

roug

h pro

ﬁt or lo

inan

cal ass

s and liabl

ites m

ay be de

signat

ed at fa

ir value th

rough p

roﬁt or lo

ss whe

n the de

signat

on elim

nates o

signﬁc

antly r

educe

s a mea

surem

ent or re

cognit

on inco

nsst

ency t

hat wou

ld oth

wis

e aris

e from m

easu

ring a

sset

s or

liabli

tes on a different basis (‘

accounting mismatch’).

Financ

al liablit

es ma

y also be d

esign

ated at f

air value t

hrou

gh proﬁt or l

oss wh

ere th

ey are man

aged on a f

air value

sis or ha

ve a embe

dded d

eri

vatve wh

ere the G

rou

p is not ab

le to bif

urcat

e and sep

arate

ly value t

he emb

edde

derivatve component.

Financal liablites held at amort

ised cost

Financal liablites that are not ﬁnancal guarantee

s or loan commitment

s and that are not clas

sife

d as ﬁnancal liab

lit

es

hel

d at fair valu

e thro

ugh proﬁt o

r loss a

re clas

sif

ed a

s ﬁnancal li

ablite

s held at a

mor

tise

d cost

Pref

erence s

hares w

hich car

y a mand

ator

y co

upon t

hat rep

resen

ts a m

arket rat

e of inte

rest at t

he iss

ue dat

e, or whic

h are

red

eema

ble on a sp

ecif

c dat

e or at th

e optio

n of the s

hareh

older a

re clas

sif

ed as ﬁ

nancal li

ablite

s and are pr

esen

ted in

oth

er bor

rowed f

und

s. The d

ivde

nds on t

hese p

refer

ence sh

ares are re

cogni

sed in t

he inco

me stat

emen

t as inte

rest ex

pens

on an am

ort

ised co

st bas

is usin

g the ef

fec

tive int

erest m

etho

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

13. Financa

l instruments

continued

Financal guarant

ee contract

s and loan

commitm

ents

The G

roup i

ssue

s ﬁnanca

l guaran

tee con

tract

s and l

oan comm

itme

nts in r

etur

n for fe

es. Fin

ancal gu

arante

e contr

acts a

any loa

n commit

ment

s iss

ued at b

elow-mar

ket inte

rest ra

tes are int

ially r

ecogn

ised at t

heir fa

ir value a

s a ﬁnancal li

ablit

and su

bse

quent

ly me

asure

d at the h

igher of t

he inti

al value le

ss th

e cumul

ative am

ount of i

ncome r

ecogn

ised in a

ccorda

nce

wit

h the pr

incpl

es of IFRS 1

5 Revenue f

rom Con

tract

s wit

h Custo

mer

s and th

eir exp

ecte

d credit l

oss prov

ison

. Loan

comm

itmen

ts m

ay be de

signa

ted at fa

ir value th

rough p

roﬁt or lo

ss wh

ere tha

t is the b

usine

ss mo

del und

er whic

h such

contracts are held.

Fair v

alue of ﬁnancal as

sets and liablites

Fair val

ue is th

e price t

hat woul

d be rec

eived t

o sell an a

sset o

r paid to t

ransf

er a liabli

ty i

n an orde

rly tr

ansac

tion b

ween

mar

ket par

ticpan

ts at t

he me

asure

ment da

te in the p

rincp

al mar

ket for th

e asse

t or liabli

, or in th

e absen

ce of a pr

incpal

mar

ket, t

he most a

dvanta

geo

us marke

t to which t

he Gr

oup ha

s acces

s at the da

te. The f

air value o

f a liablit

y in

clude

s the

sk that t

he ban

k will no

t be able t

o hono

ur it

s obliga

tons

The f

air value o

f ﬁnancal i

nstr

ume

nts i

s gener

ally me

asure

d on th

e basi

s of the in

dvid

ual ﬁnan

cal inst

rum

ent

. However

whe

n a group o

f ﬁnancal a

sse

ts an

d ﬁnancal l

iablite

s is man

aged o

n the ba

sis of it

s ne

t expos

ure to ei

ther M

arket Ris

k or

Cre

dit Risk

, the f

air value o

f the gro

up of ﬁnan

cal inst

rum

ent

s is me

asure

d on a net b

asis

The f

air value

s of quo

ted ﬁna

ncal as

set

s and liab

lites in a

ctive m

arket

s are ba

sed on c

urren

t price

s. A mar

ket is re

garde

d as

acti

ve if tran

sact

ions fo

r the as

set or l

iablit

y take p

lace wi

th suf

ﬁcent f

reque

ncy a

nd volum

e to prov

ide pri

cng info

rmat

on

on an on

goin

g basi

s. If th

e market f

or a ﬁnanca

l instr

ume

nt, an

d for un

liste

d secur

ite

s, is no

t active

, the G

roup es

tablis

hes

fair val

ue by usin

g valuat

ion tec

hniqu

es.

Inital recogniton

Purc

hase

s and sal

es of ﬁnan

cal as

set

s and liabl

ites h

eld at fai

r value th

rough pr

oﬁt or los

s, an

d debt se

curi

tes cl

assif

e

d as

ﬁnan

cal ass

s held at f

air value t

hroug

h othe

r compre

hens

ive incom

e are inti

ally re

cognis

ed on t

he trad

e date (the dat

on wh

ich the G

roup c

ommit

s to pu

rchas

e or sell t

he as

set)

. Loan

s and ad

vances an

d othe

r ﬁnanca

l asse

ts h

eld at amo

rti

sed

cost a

re reco

gnise

d on the s

ettl

emen

t date (

he dat

e on which c

ash is ad

vance

d to the b

orrowe

All ﬁn

ancal in

str

ument

s are int

ially r

ecogn

ised at f

air value

, which i

s norm

ally th

e trans

actio

n price

, plus dir

ectl

y attr

ibut

able

tran

sact

ion cost

s fo

r ﬁnancal a

sse

ts wh

ich are no

t subs

eque

ntly m

easu

red at fa

ir value th

rough p

roﬁt or lo

ss.

In cer

tain cir

cumst

ances

, the int

ial fair va

lue ma

y be bas

ed on a val

uatio

n techn

ique w

hich ma

y lead t

o the re

cognit

on of

proﬁt

s or lo

sse

s at the t

ime of int

ial reco

gnito

n. However, thes

e proﬁt

s or los

ses ca

n only b

e recog

nised w

hen t

he valuat

ion

tec

hniqu

e used i

s base

d sole

ly on ob

ser

vabl

e marke

t data. In t

hos

e cases w

here t

he intia

lly rec

ognis

ed fair val

ue is ba

sed on

a valua

tion m

odel t

hat use

s unob

ser

vabl

e input

s, t

he dif

fere

nce bet

en the t

ransa

ction p

rice an

d the valu

ation m

odel i

not r

ecogn

ised im

meda

tely in t

he inco

me stat

emen

t but is am

ort

ised o

r rele

ased t

o the inc

ome sta

teme

nt as th

e input

become obser

vable

, or the transaction matures or

is terminated.

Subsequent measurement

Financal as

sets and ﬁnan

cal liablites held at amortis

ed cost

Financ

al ass

ets a

nd ﬁnanc

al liablit

es hel

d at amor

tis

ed cost ar

e subs

eque

ntly ca

rrie

d at amor

tis

ed cost u

sing t

fect

ive inte

rest me

thod (see Int

erest in

come an

d expe

nse

). Foreign e

xchange g

ains and l

oss

es are re

cognis

ed in th

income statement.

Whe

re a ﬁnanc

al instr

ume

nt carr

ied at a

mort

ise

d cost is t

he hed

ged ite

m in a quali

yng fa

ir value he

dge re

latio

nshp,

s carr

ing valu

e is adju

sted by th

e fair valu

e gain or l

oss at

trib

utabl

e to the h

edge

d risk

Financa

l ass

ets hel

d at FVOCI

Deb

t inst

rume

nts h

eld at F

VOCI are su

bse

quent

ly car

ried a

t fair value

, with all u

nreal

ised g

ains and l

oss

es aris

ng fro

chan

ges in fa

ir value (inclu

dng any rel

ated fo

reign exch

ange ga

ins or lo

sses

) r

ecogn

ised in o

ther co

mpreh

ensi

ve incom

and a

ccumul

ated in a s

epara

te comp

onen

t of equi

ty. Foreign e

xchange g

ains an

d loss

es on th

e amor

tise

d cost are

reco

gnis

ed in inco

me. Chan

ges in ex

pect

ed cre

dit los

ses are r

ecogn

ised in t

he proﬁt o

r los

s and are acc

umula

ted in e

quit

On de

reco

gniton

, the cu

mulat

ive fair val

ue gain

s or los

ses

, net of th

e cumul

ative e

xpec

ted cre

dit los

s rese

ve, are tra

nsfer

red

to th

e proﬁt or l

oss

Equit

y inves

tmen

ts de

signat

ed at F

VOCI are su

bseq

uent

ly carr

ied at f

air value w

ith all un

reali

sed gai

ns and lo

sse

s arisn

fro

m chang

es in fair va

lue (includn

g any relat

ed for

eign exchan

ge gain

s or los

ses

) re

cognis

ed in ot

her com

prehe

nsive

income and

accumulated in a separate

component of equity

. On derecogniton,

cumulati

e reser

ve is tra

sferred to

ret

ained e

arnin

gs and i

s not rec

ycle

d to proﬁt o

r loss

Financal as

sets and liablite

s held at

air value t

hrou

gh pro

ﬁt or lo

Financal asset

s and liablites mandator

ily held at fair value through proﬁt or loss and ﬁnan

cal

sset

s designated at fair

value t

hrou

gh proﬁt or l

oss are s

ubse

quen

tly car

rie

d at fair valu

e, with g

ains an

d loss

es ari

sng fro

m chang

es in fair va

lue,

incl

udng co

ntract

ual int

erest i

ncome o

r expe

nse, re

corde

d in the n

et trad

ing inco

me line in t

he proﬁt o

r los

s unles

s the

ins

tru

ment is p

art of a c

ashﬂow h

edgin

g relat

ionsh

342

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

Financal liablite

s designated at fair value thr

ough proﬁt or lo

Financal liablites designated at fair value thro

ugh proﬁt or loss are held at fair value, with change

s in

air v

ue recognised

in th

e net tra

ding in

come lin

e in the pr

oﬁt or los

s, ot

her th

an that a

ttri

butab

le to cha

nges in C

redit Ri

sk. Fa

ir value ch

anges

att

ribu

table t

o Credit R

isk are re

cogni

sed in o

ther co

mpreh

ensi

ve incom

e and reco

rded in a s

epar

ate cate

gor

y of r

eser

unl

ess th

is is exp

ecte

d to cre

ate or en

large an a

ccount

ing mis

match

, in whic

h case th

e entir

e chang

e in fair valu

e of the

ﬁnan

cal liabli

ty d

esign

ated at f

air value t

hrou

gh proﬁt or l

oss is r

ecogn

ised in p

roﬁt or lo

ss.

Derecogniton of ﬁnancal

ins

truments

Financ

al ass

ets a

re dere

cognis

ed wh

en the r

ight

s to rec

eive cas

hﬂows fr

om the ﬁn

ancal as

set

s ha

ve expire

d, or wh

ere th

Gro

up has t

rans

ferre

d subs

tanti

ally all r

isk

s and reward

s of owne

rshi

p. If subs

tanti

ally all th

e ris

ks and r

ewards ha

ve been

neit

her re

taine

d nor tr

ansfe

rred a

nd the G

roup h

as reta

ined co

ntrol

, the as

set

s cont

inue to b

e reco

gnise

d to the ex

tent of

the Group

’

s continung in

volvement.

Whe

re ﬁnanc

al ass

ets h

ave be

en modi

fe

d, the m

odif

ed t

erm

s are ass

ess

ed on a qu

alitat

ve and qu

antit

atve ba

sis to

det

ermin

e whet

her a f

unda

menta

l chang

e in the na

ture o

f the ins

tru

ment h

as occu

rred

, such as w

heth

er the d

ereco

gnito

of the pre-existng instrument and the recognit

on of a new instrument is appropriate.

On de

reco

gniton o

f a ﬁnancal a

sse

t, th

e diff

erenc

e bet

ween t

he car

ying am

ount o

f the as

set (

or t

he carr

ing amo

unt

allo

cated t

o the po

rti

on of the a

sse

t dere

cognis

ed) and t

he sum o

f the con

sider

aton re

ceive

d (

inc

ludng a

ny new ass

obt

ained l

ess any ne

w liablit

y as

sume

d) and any cum

ulat

ive gain o

r loss t

hat had b

een re

cogni

sed in o

ther co

mpreh

ensi

inco

me is re

cognis

ed in pro

ﬁt or los

s, excep

t for eq

uit

y inst

rum

ent

s elect

ed F

CI (

e above

) and cum

ulati

ve fair valu

adju

stme

nts a

ttri

butab

le to th

e Credit R

isk of a lia

blit

y tha

t are hel

d in othe

r compre

hens

ive inco

me.

Financal liablites are derecognise

d when they are extingushe

d. A ﬁnancal

liablit

y is extingushed wh

en the obligaton is

dis

charge

d, cance

lled o

r expire

s and thi

s is evalua

ted bo

th qual

itat

vely and q

uanti

tatve

. Howeve

, wh

ere a ﬁnan

cal

liabl

y has be

en mod

ed, it is d

ereco

gnis

ed if the d

iffe

rence b

ween t

he modi

fe

d cashﬂ

ows and t

he orig

nal cas

hﬂows is

mor

e than 10 p

er cent

; or if le

ss th

an 10 per c

ent, t

he Gr

oup will p

erf

orm a qu

alitat

ve ass

essm

ent to d

eter

mine wh

ethe

r the

terms of the t

o instr

uments are substantially different.

If th

e Grou

p purch

ases i

ts own d

ebt

, it is der

ecogni

sed an

d the dif

fer

ence be

twe

en th

e carr

ng amou

nt of th

e liablit

y an

the c

onsid

erato

n paid is i

nclud

ed in Ot

her inc

ome excep

t for the c

umula

tive fai

r value adj

ustm

ent

s attr

ibut

able to t

he Cred

Risk o

f a liablit

y t

hat are h

eld in ot

her com

prehe

nsive in

come w

hich are n

ever rec

ycled to t

he proﬁ

t or los

Modif

ed ﬁnancal instru

ments

Financ

al ass

ets a

nd ﬁnanc

al liablit

es who

se or

ignal con

tract

ual ter

ms ha

ve bee

n modif

e

d, inclu

dng th

ose lo

ans subj

ect

to fo

rbe

arance st

rate

gies

, are cons

idere

d to be mo

dif

ed in

str

ument

s. M

odif

cat

ions m

ay incl

ude cha

nges t

o the ten

cash

ﬂows and o

r intere

st rate

s, amo

ng oth

er fact

ors

Whe

re dere

cognit

on of ﬁna

ncal as

set

s is appr

opri

ate (

e Dere

cognit

on

), the new

ly reco

gnis

ed resi

dual lo

ans are a

sse

ssed

to de

term

ine whe

ther t

he as

set

s shou

ld be cl

assif

e

d as pur

chase

d or or

ignate

d Credi

-Impair

ed as

set

s (POCI).

Whe

re dere

cognit

on is no

t approp

riat

e, the gro

ss car

ying am

ount o

f the app

licabl

e instr

ume

nts i

s recal

culate

d as th

pre

sent valu

e of the r

eneg

otiat

ed or mo

dif

ed co

ntract

ual cas

hﬂows di

scoun

ted at t

he orig

nal ef

fect

ive inte

rest rat

e (

cre

dit

-adju

sted e

ffe

ctive int

eres

t rate for P

OCI ﬁn

ancal as

set

)

. T

he dif

feren

ce bet

wee

n the re

calcul

ated val

ues and t

pre

-modif

e

d gross ca

yin

g values o

f the in

str

ument

s are re

corde

d as a mo

dif

catio

n gain or lo

ss in th

e proﬁt or l

oss

ins and lo

sse

s arisn

g from m

odif

cat

ions fo

r credi

t reas

ons are r

ecord

ed as pa

rt of ‘Cr

edit imp

arme

’ (

see C

redit

Imp

airme

nt poli

). Modi

fca

tion ga

ins and l

osse

s arisn

g for no

n-cred

it reas

ons ar

e recog

nised e

ither a

s par

t of Cred

imp

armen

t or wit

hn incom

e, depe

nding o

n whet

her th

ere has b

een a ch

ange in t

he Cre

dit Risk o

n the ﬁnan

cal as

set

subse

quent to the modif

cation. M

odifcat

ion gains and losses ar

isng on ﬁnancal liablites are recognised wit

hn

come.

The m

ovement

s in th

e appli

cable ex

pect

ed cred

it loss l

oan po

siton

s are dis

d in fu

rth

er det

ail in Risk r

eview.

Und

er the Pha

se 2 Int

erest Rat

e Benc

hmark Re

form am

endm

ent

s to IFRS 9

, cha

nges to t

he ba

sis for d

eter

minng co

ntract

ual

cash

ﬂows as a di

rect res

ult of in

teres

t rate be

nchma

rk refo

rm are t

reate

d as cha

nges to a ﬂ

oatin

g inter

est rat

e to tha

ins

tru

ment

, provid

ed tha

t the tr

ansit

on fro

m the Int

erba

nk Of

fere

d Rate (IBOR) benc

hmar

k rate to t

he alter

nati

ve ris

ee rate (RF

) take

s place on a

n econo

micall

y equi

valent b

asis

. Where t

he ins

tru

ment is m

easu

red at am

ort

ised c

ost or

CI, thi

s resu

lts in a c

hange in t

he ins

tru

ment

’s effe

ctive in

teres

t rate, w

ith no ch

ange in t

he amor

tis

ed cost va

lue of th

ins

tru

ment

. If the ch

ange to t

he ins

tru

ment do

es no

t meet t

hese cr

iter

a, the G

rou

p applie

s judge

ment to a

sse

ss wh

ether

the c

hange

s are sub

stant

ial and, i

f they are, t

he ﬁnan

cal inst

rum

ent is de

reco

gnise

d and a new ﬁn

ancal in

stru

ment i

reco

gnis

ed. If th

e chang

es are no

t subs

tanti

al, the G

roup a

djust

s the g

ross ca

yin

g amoun

t of the ﬁn

ancal in

str

ument by t

pre

sent valu

e of the c

hange

s not cover

ed by the pr

actica

l expe

dient

, disco

unte

d using t

he revi

sed ef

ctive int

erest r

ate.

343

Standard

Chartered

– Ann

ual Rep

t 2021

Financal statements

13. Financa

l instruments

continued

Reclassif

cations

Financ

al liablit

es are no

t recl

assif

e

d subs

eque

nt to inti

al reco

gniton

. Recla

ssif

cat

ions o

f ﬁnancal a

sse

ts are m

ade wh

en,

and o

nly wh

en, th

e busin

ess m

odel fo

r thos

e ass

ets c

hange

s. Su

ch chang

es are ex

pect

ed to be i

nfre

quent a

nd ari

se as a

res

ult of sig

nﬁcant exte

rnal o

r inter

nal cha

nges

, such a

s the ter

mina

ton of a lin

e of bus

ines

s or the p

urcha

se of a su

bsidar

who

se bu

sines

s mode

l is to re

alise t

he value o

f pre-e

xistn

g held f

or trad

ing ﬁnan

cal ass

ets t

hrou

gh a hold t

o colle

ct mode

Financ

al ass

ets a

re recl

assif

e

d at the

ir fair valu

e on the d

ate of re

clas

sif

catio

n and prev

ious

ly reco

gnis

ed gain

s and los

ses

are no

t rest

ated. M

oreove

, rec

lass

catio

ns of ﬁnan

cal as

set

s bet

wee

n ﬁnancal a

sse

ts he

ld at amo

rti

sed cos

t and ﬁnan

cal

set

s held a

t fair value t

hrou

gh othe

r compr

ehens

ive inco

me do no

t affe

ct ef

fecti

ve inter

est rat

e or exp

ected c

redit l

oss

computation

Reclassifed from

amortised cost

Whe

re ﬁnanc

al ass

ets h

eld at am

orti

sed co

st are re

clas

sif

ed to ﬁn

ancal as

set

s hel

d at fair valu

e thro

ugh proﬁt o

r loss

, the

dif

feren

ce bet

en the fa

ir value of t

he as

set

s at the d

ate of re

clas

sif

cati

on and th

e previ

ousl

y recog

nised a

mort

ise

d cost is

reco

gnis

ed in proﬁt o

r los

For ﬁn

ancal as

set

s hel

d at amor

tise

d cost t

hat are re

clas

sif

ed to a

ir value th

rough o

ther co

mpreh

ensi

ve incom

e, the

dif

feren

ce bet

en the fa

ir value of t

he as

set

s at the d

ate of re

clas

sif

cati

on and th

e previ

ousl

y recog

nised g

ross ca

yin

value i

s reco

gnise

d in othe

r compr

ehens

ive inco

me. Addit

onall

, the re

late

d cumul

ative ex

pect

ed cre

dit los

s amoun

rel

ating t

o the re

clas

sif

ed ﬁnan

cal as

set

s are rec

lass

ed fro

m loan l

oss prov

ison

s to a sep

arate re

ser

ve in ot

her

comprehensi

e income at the date of reclassif

cation.

Reclassifed from ai

r value

through other comprehensiv

e income

Whe

re ﬁnanc

al ass

ets h

eld at air va

lue thr

ough ot

her com

prehe

nsive i

ncome ar

e recla

ssif

e

d to ﬁnan

cal ass

ets h

eld at f

air

value t

hrou

gh proﬁt or l

oss

, the cum

ulat

ive gain or l

oss pr

eviou

sly re

cognis

ed in ot

her com

prehe

nsive in

come i

s trans

ferr

ed to

the p

roﬁt or lo

ss.

For ﬁn

ancal as

set

s hel

d at fair valu

e throu

gh oth

er comp

rehen

sive inc

ome th

at are rec

lass

ed to ﬁn

ancal as

set

s hel

d at

amo

rtis

ed cos

t, th

e cumul

ative ga

in or los

s previ

ousl

y recog

nised i

n othe

r compre

hens

ive inco

me is adj

uste

d agains

t the fa

value o

f the ﬁn

ancal as

set su

ch that t

he ﬁnan

cal ass

et is re

corde

d at a value a

s if it had al

ways b

een he

ld at amo

rtis

ed cos

In add

iton

, the rel

ated cu

mulat

ive exp

ecte

d credi

t loss

es hel

d withn o

ther co

mpreh

ensi

ve incom

e are rever

sed ag

ainst t

gros

s carr

ing valu

e of the r

eclas

sif

ed a

sset

s at t

he date o

f recla

ssif

ca

tion.

Recl

ass

ed fr

om fair val

ue thr

ough p

roﬁt o

r loss

Whe

re ﬁnanc

al ass

ets h

eld at fa

ir value th

rough p

roﬁt or lo

ss are re

clas

sif

ed to ﬁn

ancal a

sset

s hel

d at air valu

e throu

oth

er comp

rehen

sive in

come or ﬁn

ancal as

set

s hel

d at amor

tis

ed cost

, the f

air value a

t the dat

e of rec

lass

if

cation i

s used t

det

ermin

e the ef

fec

tive int

erest r

ate on th

e ﬁnanca

l asse

t going f

ward. I

n addito

n, the d

ate of re

clas

sif

cati

on is us

ed as

the d

ate of int

ial re

cognit

on for th

e calcul

ation o

f expe

cted cr

edit lo

sses

. Whe

re ﬁnanca

l asse

ts h

eld at fai

r value th

rough

proﬁt o

r loss a

re recl

assi

fe

d to ﬁnan

cal ass

s held at a

mort

ise

d cost

, the fair va

lue at th

e date o

f recla

ssif

cat

ion be

come

the g

ross ca

yin

g value of t

he ﬁnan

cal ass

et.

344

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

The G

roup’

s cla

ssif

cat

ion of it

s ﬁnan

cal as

set

s and liab

lites is s

ummar

ise

d in the fo

llowin

g table

Asset

Notes

ts at f

air va

lue

$millon

Derivatves

held for

hedging

$millon

Non-tr

ading

mandatorily

at f

air val

through

proﬁt or l

oss

$millon

Designated

at f

air val

through

proﬁt or l

oss

$millon

Fair v

alu

through other

comprehensive

income

$millon

ﬁnancal

ts at

fair value

$millon

Asset

ld at

amortised

cost

$millon

sh and b

alanc

es at

central bank

–

,663

Fin

anc

al as

set

s he

ld at f

air

valu

e thr

ough p

roﬁ

t or los

Loan

s and ad

vance

o b

s¹

491

–

2,356

–

Loan

s and ad

vance

to customers

5,813

–

9,9

–

verse repurchase

agreements and other

simlar

cured

len

ding

–

80,

009

–

80,0

–

80,

009

Debt securites, alternative

tier one

and other

eligble bills

28,801

–

463

–

Equit

5,65

–

208

–

861

–

861

Other assets

–

,75

–

129

121

–

129

Der

ivat

ve ﬁnan

cal

instrument

,002

1,443

–

52,

–

Loan

s and ad

vance

o b

s¹

–

44,

383

44,

383

of w

hich – reve

rse

repurchase agreements

and other sim

lar

secured lending

–

,079

1,079

Loan

s and ad

vance

to customers

–

8,4

298,468

of w

hich – reve

rse

repurchase agreements

and other sim

lar

secured lending

–

Inve

ent

rit

e

Debt securites, alternative

tier one

and other

eligble bills

–

121

,375

121

,375

1,325

Equit

–

737

–

2,112

122

,112

41,325

163,437

Other assets

–

0,06

40,06

set

s he

ld for s

ale

–

al at 31 De

cem

ber 202

1,443

204

122

112

303,

721

6,9

800,680

urt

her a

naly

d in Ris

k revi

ew and C

api

tal re

view (

pag

es 200 t

o 293)

345

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

13. Financa

l instruments

continued

Asset

Notes

ts at f

air va

lue

rading

$millo

Derivatves

held for

hedging

$millo

Non-trading

mandatorily

at fair value

through

pro

ﬁt or l

oss

$millo

Designated

at fair value

through

pro

ﬁt or l

oss

$millo

Fair value

through

other

comprehensive

income

$millo

otal

ﬁnancal

assets at

fair value

$millo

Asset

held at

amortised

cost

$millo

otal

$millo

sh and b

alanc

es at

central bank

–

6,712

,712

Fin

anc

al as

set

s he

ld at f

air

valu

e thr

ough p

roﬁ

t or los

Loan

s and ad

vance

o b

s¹

1,552

–

,87

–

,87

Loan

s and ad

vance

to customers

,16

–

verse repurchase

agreements and other

simlar

cured

len

ding

–

63,405

–

63,405

–

63,405

Debt securites, alternative

tier one

and other

eligble bills

–

256

–

5,600

–

25,600

Equit

4,2

–

305

–

528

–

528

Other assets

–

34,86

–

,589

335

–

787

–

787

Der

ivat

ve ﬁnan

cal

instrument

1,64

–

Loan

s and ad

vance

o b

s¹

–

,34

44,34

of w

hich – reve

rse

repurchase agreements

and other sim

lar

secured lending

–

247

Loan

s and ad

vance

to customers

–

281,6

281,699

of w

hich – reve

rse

repurchase agreements

and other sim

lar

secured lending

–

Inve

ent

rit

e

Debt securites, alternative

tier one

and other

eligble bills

–

133,

2,861

Equit

–

454

–

133

,835

133,

835

153,

315

Other assets

–

set

s he

ld for s

ale

–

otal a

t 31 Dec

embe

r 20

02,

1,641

,589

133,

835

10,094

urt

her a

naly

d in Ris

k revi

ew and C

api

tal re

view (

pag

es 200 t

o 293)

346

Standard Chartered

– Annu

al Repo

rt 2021

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

Liablites

Notes

Liablites at fair v

alue

Amortised

cost

$millon

Derivatves

held for

hedging

$millon

Designated

at f

air val

through

proﬁt or l

oss

$millon

ﬁnancal

liablites at

fair value

$millon

Financal liablites held at fair value through

oﬁt or l

oss

Dep

osit

s by ba

nks

–

352

–

Customer accounts

–

Repurchase agr

eements and other simlar

secured

borrowing

–

2,38

–

2,38

Deb

t sec

urit

es in is

sue

–

597

–

597

Short positons

–

Othe

r liablites

–

78,43

85,1

–

85,1

Der

ivat

ve ﬁnan

cal ins

tru

ment

706

693

–

53,

399

–

53,399

Dep

osit

s by ba

nks

–

0,0

0,041

Customer accounts

–

Repurchase agr

eements and other simlar

secured

borrowing

–

3,260

,260

Deb

t sec

urit

es in is

sue

–

Othe

r liablites

–

3,43

Subordinated

liab

lites and

other borrow

ed f

unds

–

16,64

16,

646

al at 31 De

cem

ber 202

693

78,431

596

Liablites

Notes

Liablites at fair v

alue

Amortised

cost

$millo

otal

$millo

rading

$millo

Derivatves

held for

hedging

$millo

Designated

at fair value

through

pro

ﬁt or l

oss

$millo

otal

ﬁnancal

liablites at

fair value

$millo

Financal liablites held at fair value through

oﬁt or l

oss

Dep

osit

s by ba

nks

–

,249

,24

–

,249

Customer accounts

–

,897

8,897

–

,897

Repurchase agr

eements and other simlar

secured

borrowing

–

662

Deb

t sec

urit

es in is

sue

–

811

–

,811

Short positons

3,754

–

3,754

–

3,754

Othe

r liablites

–

3,754

–

619

–

373

Der

ivat

ve ﬁnan

cal ins

tru

ment

–

,533

–

1,533

Dep

osit

s by ba

nks

–

0,2

Customer accounts

–

439

,339

439

,339

Repurchase agr

eements and other simlar

secured

borrowing

–

Deb

t sec

urit

es in is

sue

–

55,550

,550

Othe

r liablites

–

Subordinated

liab

lites and

other borrow

ed f

unds

–

,654

16,65

otal a

t 31 Dec

embe

r 20

73,544

619

139

906

90,

929

730,835

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

13. Financa

l instruments

continued

Interest

rate benchmar

k reform

In 2017

, t

he Financa

l Cond

uct Auth

orit

y (FC

) a

nnoun

ced th

at it had r

each

ed an agre

emen

t with LI

BOR pan

el ban

ks to

cont

ribu

te to LIB

OR unt

il the en

d of 2021, af

ter wh

ich the

re would b

e a tran

siton f

rom LIB

ORs to r

isk

-f

ree r

ates (RFR

)

. Sin

ce then

the

re have b

een f

urt

her up

dates

, par

ticul

arly w

ith re

spect t

o the ce

ssat

ion dat

e for cer

tain USD L

IBOR te

nor

s being d

efer

red

fro

m 31 Dec

ember 2021 t

o 30 Jun

e 20

How t

he Gr

oup is m

anag

ing t

he tr

ans

ito

n to alt

erna

tive be

nchm

ark r

ates

In 2018

, the G

roup e

stabli

shed i

ts IBO

R T

ransit

on Progra

mme, wi

th Sen

ior Man

ager over

sight f

rom t

he Gro

up Chief O

pera

ting

ﬁcer

, t

o mana

ge the t

ransit

on awa

y from LI

BOR. T

he Prog

ramme’s strat

egic b

ank

-w

ide appr

oach aim

s to sup

por

t client

thr

ougho

ut the t

ransi

ton, w

hile en

surin

g key risk

s and is

sues a

re ident

ﬁed and e

ffe

ctivel

y mana

ged. T

he Progr

amme is

gover

ned by a pr

incpal Pr

ogramm

e Ste

ering C

ommi

ttee t

hat over

see

s 16 work

stre

ams alig

ned to t

he Gro

’s busine

sse

s and

nctio

ns. Wi

thn the Pr

ogramm

e, sep

arate co

mmitt

ee mee

ting

s are hel

d for ea

ch work

stre

am, wi

th all wor

kst

reams h

avin

dedicated accounta

ble ex

cutives.

Addit

governance is supported b

y regular updates p

rovided to

enior

isk

committees

, i

clud

ng the Group R

isk Committee,

ard Risk C

ommit

tee an

d the Co

rpo

rate, Co

mmer

cial and In

stit

uton

al Bank

ing Ris

k Commi

ttee.

From an in

dustr

y and re

gula

tor

y pe

rsp

ecti

ve, the G

roup act

ivel

y part

icpate

s in and co

ntrib

utes t

o RFR work

ing gro

ups, i

ndust

socia

tons an

d busin

ess f

orum

s that f

ocus on d

iffe

rent as

pect

s of th

e tran

siton

. The G

roup mo

nitor

s the d

evelopm

ent

s at

the

se for

ums a

nd reﬂe

cts

, then al

igns sig

nﬁcant de

cisons i

nto it

s broa

der tra

nsito

n plan

Progres

during 2021

Sup

por

ted by a num

ber of s

yste

m enhan

cemen

, the G

roup ha

s succe

ssf

ully e

nable

d the tr

ansit

on to RFR pr

oduct

s, w

ith

end-t

o-en

d capabilt

ies deve

lope

d acros

s a ful

l suite of d

eri

vatve and c

ash pro

duct

s. Th

e Grou

p maint

aned f

ull adh

eren

to all t

he inte

rm GB

P LIBOR ce

ssat

ion mil

eston

es set by t

he Ban

k of Engla

nd’s W

ork

ing G

roup on S

ter

ling Ris

-Free Ref

erenc

Rates

. Activ

t

y in prod

ucts r

efere

ncing RFR

s cont

inued t

o grow thro

ugho

ut the ye

The G

roup h

as adh

ered to t

he Int

ernat

ional Swap

s and De

rivat

ves As

soci

aton (IS

A) 20

20 IBOR Fa

llback

s Prot

ocol fo

r all

s tradi

ng enti

tes and e

ngag

ed clie

nts t

hat had n

ot adh

ered to n

egot

iate re

medi

aton of n

on-USD LI

BOR con

tract

s by

31 De

cembe

r 20

. The conver

sion eve

nts a

t the Lon

don Cle

aring H

ouse we

re succe

ssf

ully c

omple

ted fo

r clear

ed der

ivatve

At the e

nd of 2021, re

medi

aton of al

l clear

ed and un

clear

ed der

ivat

ve contra

cts r

efere

ncing ce

asing L

IBORs wa

s compl

ete.

Clien

ts w

ith le

gacy n

on-USD L

IBOR lo

ans were e

ngag

ed to rem

ediat

e their c

ontra

cts v

ia acti

ve convers

ions t

o alter

nati

ve rates

fallb

ack

s, or ot

her su

itable t

ransi

ton me

chani

sms. At e

nd of 2021, all n

egot

iato

ns for dr

awn no

n-USD LIBO

R expo

sure

s were

conc

lude

d, and all b

ut fou

r loans h

ad the

ir docu

menta

tion co

mplet

ed (it is expe

cted t

he doc

ument

ation w

ill be ﬁn

shed p

rior

to th

e resp

ecti

ve next ﬁxn

g date

)

The G

roup i

s well-po

siton

ed to su

ppor

t the tr

ansit

on to Se

cured O

ver

night Finan

cng Rate (SOFR) for th

e USD LIBO

R trans

iton

The G

roup i

s oper

ation

ally re

ady and i

s acti

vely of

fer

ing SOFR p

rodu

cts

, in line w

ith th

e regul

ator

y pr

ohibti

ons on n

ew USD

LIBO

R ﬁnanca

l instr

ume

nts

. Prepa

ration

s are als

o unde

way to en

sure th

at the G

roup i

s read

y to rem

ediate l

egac

y USD LIB

tran

sact

ions

. Over t

he cour

se of 2021

, the G

roup m

ade con

sidera

ble pro

gres

s in auto

matin

g IBOR-relat

ed data

, and inc

reasn

pro

cess a

utoma

tion re

mains a p

rior

t

y for 2022

Frontline

and client engagement, includng internal and cl

ient communicat

s, frontline train

ng, and client webinars, were

key feat

ure of t

he Progr

amme th

rough

out 2021. T

his allowe

d for a sm

ooth c

lient ex

peri

ence du

ring t

he tran

siton o

f non-U

LIBO

R to RFRs

, and thi

s appro

ach wil

l contin

ue in 2022 f

or USD LIBO

R. Fo

llowing a

n intial US

D LIBOR-focu

sed cli

ent out

reac

and in

tern

al commu

nicato

ns in ea

rly D

ecemb

er 2021, th

e Grou

p has alre

ady s

tart

ed eng

aging cl

ient

s to asc

erta

in their l

evel

of re

adine

ss, an

d to se

cure an ind

cative t

imeln

e for rem

ediat

on acti

vtie

Ris

ks whi

ch th

e Gro

up is exp

ose

d to du

e to IBO

R tra

nsit

on

The G

roup h

as larg

ely mi

tgate

d all mat

erial a

dver

se out

comes a

sso

ciate

d with t

he ces

satio

n of LIBO

R bench

mark

s, an

the

se ha

ve not req

uired a c

hange t

o the G

roup

’s risk m

anag

ement s

trate

. H

owever

, th

e Grou

p will con

tinu

e to focu

s on the

rem

ediat

on requ

ired fo

r othe

r bench

mark

s, an

d will con

tinu

e to monit

or and m

anage t

he inhe

rent r

isks o

f the tr

ansit

on, wi

par

ticu

lar att

entio

n being p

aid to th

e follow

ing:

•

Lega

l Risk: L

IBOR tr

ansit

on intro

duce

s signﬁcan

t legal r

isk

s and th

e Grou

p has taken a

ction t

o mitga

te the

m where p

oss

ible.

The

se incl

ude r

isks a

round co

ntra

cts t

hat refe

rence U

SD LIBOR an

d oth

er LIBOR

s such a

s GBP an

d JPY

. S

teps h

ave bee

n taken

to eit

her in

sert r

obust f

allba

cks or a

ctivel

y convert t

rans

actio

ns fro

m the re

levant LIBO

R to the n

ew RFR

-b

ase

d optio

ns.

•

Conduct Risk: The Group c

onsiders Conduct Risk to

a sign

ﬁcant area of

non-ﬁnanca

l risk management thr

oughout

the t

ransi

ton. O

ur ri

sk appe

tite st

atem

ent on Co

nduct R

isk str

ives t

o mainta

n approp

riat

e outco

mes by con

tinuo

usly

dem

onst

ratin

g that we ar

e ‘Doin

g the Rig

ht Thing’ in t

he way we do b

usine

ss. Ac

cording

, we re

cognis

e that t

identﬁc

aton and mitgation

of conduct risks arisng in

respe

of the transiton are

undamental to

the successf

transiton

to new R

-ba

sed ra

tes by 30 J

une 2023

. The G

roup ha

s there

fore t

aken actio

ns in thi

s regar

d as an int

egral p

art of it

s IBO

ransiton Programme, includng an exten

sive outreach progr

amme.

348

Standard Chartered

– A

nnu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

•

eratio

nal Ris

k: The G

rou

p has re

cognis

ed the i

mpor

tance o

f the on

going i

dentﬁca

ton and m

anag

ement o

f Oper

ation

Risk a

s a resu

lt of LIBO

R trans

iton

. The Prog

ramme h

as adop

ted t

he Gro

’

s exi

stng O

perat

ional Ri

sk Framewor

k in it

appr

oach to i

dentf

yin

g, quan

tif

yn

g, and m

itgat

ing the i

mpact o

f opera

tion

al risk

s res

ultin

g from t

he tran

siton

•

Mar

ket Risk

: As tr

ades ar

e trans

itone

d fro

m IBOR to RFR

, the b

usin

ess-a

s-usual m

etri

cs, li

mt str

uctu

re and con

trols w

ill

cont

inue to a

pply. Limts f

or value a

t risk an

d Marke

t Risk se

nsit

vite

s are in acco

rdance w

ith th

e Grou

p Risk Ap

peti

Sta

temen

t. New l

imts w

ill be se

t follow

ing en

gagem

ent wit

h the b

usine

ss, t

o consi

der clie

nt dema

nd and ma

rket liqu

dit

in RFR-linked pr

oduct

s, a

s well as t

he regu

lator

y exp

ectat

ions an

d inter

m miles

tone

s agree

d by the in

dustr

•

Financ

al and Cre

dit Risk

: As p

art of t

he ‘Da

ta coll

ectio

n on exp

osure

s’ exercise u

nder

taken fo

r the Pr

udent

ial Regu

latio

Auth

orit

y an

d FCA

, th

e Grou

p set ou

t its v

iew of th

e impact o

f LIBOR t

ransi

ton on it

s Finan

cal Risk pr

oﬁle, inc

ludng i

ts Cre

dit

Risk a

nd fu

nding p

roﬁle. At pre

sent

, the G

roup h

as yet to s

ee any mat

erial ch

ange t

o any of the

se cate

gori

es. Howeve

, all of

the

se ri

sks w

ill cont

inue to b

e monit

ored a

s part o

f the Pro

gramme a

cros

s busin

ess an

d fun

ction

al work

stre

ams

•

Accou

nting Ri

sk: T

he Gro

up has id

entﬁe

d the ﬁna

ncal ins

tru

ment

s tha

t may be a

ffe

cted by acc

ounti

ng iss

ues su

ch as

accounting for

contractual changes due to

IBOR reform, fair value

asurement

and hedge accounting. W

e c

ontinue to

monitor and

contribute to industry developments on tax and

accounting changes.

At 31 De

cembe

r 20

1, th

e Grou

p had th

e follow

ing not

ional p

rincp

al exp

osure

s to inte

rest rat

e benc

hmark

s th

at are exp

ecte

to be s

ubjec

t to inte

rest rat

e benc

hmark r

efor

m. The G

roup h

as exclu

ded ﬁna

ncal ins

tru

ment

s linked t

o USD LIBO

R matu

ring

bef

ore 30 J

une 2023 as i

t is ass

umed t

hese w

ill not r

equir

e refor

m due to U

SD LIBOR n

o long

er bein

g publi

shed b

eyond thi

s date.

The G

roup h

as als

o exclude

d $2.7 b

illon of ex

posu

res th

at trans

iton

ed und

er fallb

ack clau

ses im

medat

ely af

ter 31 D

ecemb

2021

IBOR e

xposures by

benchmark

as o

f 31 Dec

embe

r 2021

D LIBO

$millon

P LIBO

$millon

SGD SOR

$millon

THB F

$millon

Other IBOR

$millon

Asset

Loan

s and ad

vance

s to ban

552

–

Loan

s and ad

vance

s to cust

ome

123¹

,47

Deb

t sec

urit

es, Ad

diton

al T

ier 1 an

d othe

eligble bills

,735

237¹

–

1,1

360

496

33,05

Liablites

Dep

osit

s by ba

nks

–

Customer accounts

575

–

612

Repurchase agr

eements and other

secured

borrowing

–

Deb

t sec

urit

es in is

sue

326

–

326

Subordinated

liab

lites and

other

borrow

ed funds

160

–

160

–

5,584

Deriv

atves –

Foreign

ange

cont

racts

Cur

renc

y swa

ps and o

ptio

158,

184

–

877

1,725

–

163

786

Deriv

atves –

Intere

ate contracts

Swap

686,403

–

10,0

51,

395

–

For

ard ra

te agreements and opti

ons

28,406

–

28,

604

Exchange traded futures and

opt

ions

24,

236

–

24,

236

Equity and stock

index options

–

Credit deriv

atve

contracts

515

–

277

–

5,864

otal

IBOR deriv

atve ex

osure

902

–

114

53,521

–

970

,453

otal

IBOR ex

posure

360

53,

,00

,096

Loan commitment

s off balance sheet

285

179

–

,59

sid

ual G

BP LIB

OR ex

pos

ure

s are ma

inl

y due t

o deb

t sec

urit

y a

sse

ts w

her

e the i

ssu

s have y

et to co

nﬁr

m revi

sed i

nst

rum

ent t

erm

s, a

nd lo

ans to c

ust

ome

ere t

he te

rms o

f rem

edia

to

n have b

een a

gre

ed bu

t leg

al do

cum

enta

tio

n is no

t comp

let

e. It i

s exp

ecte

d th

at the

se ex

sure

s wil

l be re

medi

ate

d bef

ore t

heir

xt int

ere

st rat

e ﬁxn

g, ho

wever, sh

oul

d this n

ot b

e achi

eved a ‘s

ynt

het

ic LI

BOR

’ bas

ed on T

rm SO

NIA w

ill ap

ply

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

13. Financa

l instruments

continued

IBOR e

xposures by

benchmark

as a

t 31 Dec

embe

r 2020

USD LIBOR

$millo

GBP LIBOR

$millo

D SOR

$millo

THB FIX

$millo

Other IBOR

$millo

otal

IBOR

$millo

Asset

Loan

s and ad

vance

s to ban

,072

–

127

Loan

s and ad

vance

s to cust

ome

,14

2,861

,011

905

Deb

t sec

urit

es, Ad

diton

al T

ier 1 an

d othe

eligble bills

1,40

365

–

,32

,07

Liablites

Dep

osit

s by ba

nks

399

–

Customer accounts

189

,49

Repurchase agr

eements and other

secured

borrowing

1,195

–

195

Deb

t sec

urit

es in is

sue

–

Subordinated

liab

lites and

other

borrow

ed funds

160

–

175

419

Deriv

atves –

Foreign

ange

cont

racts

Cur

renc

y swa

ps and o

ptio

202,0

205

,12

21,658

5,07

Deriv

atves –

Intere

ate contracts

Swap

104,7

43,653

For

ard ra

te agreements and opti

ons

21,634

523

527

Exchange traded futures and

opt

ions

63,

239

–

64,

684

Equity and stock

index options

–

Credit deriv

atve

contracts

4,4

–

134

–

600

otal

IBOR deriv

atve ex

osure

,13

,050

otal

IBOR ex

posure

145

0,428

1,502,606

Loan commitment

s off balance sheet

206

,496

Offsetting of ﬁnanc

al instruments

Financ

al ass

ets a

nd liabli

tes are o

set an

d the net a

moun

t repor

ted i

n the bal

ance sh

eet wh

en the

re is a le

gally en

force

able

rig

ht to of

et the re

cogni

sed am

ount

s and t

here is an i

ntent

on to se

ttle o

n a net ba

sis, o

r to real

ise th

e asse

t and se

ttle t

liablit

y simultaneou

sly

In pra

ctice, f

or credi

t mitga

tion

, the Gr

oup is ab

le to of

et ass

s and liabl

ites w

hich do no

t meet t

he IA

S 32 netti

ng crit

era s

out below

. Such arrangements include master netting arrangement

for derivatves and

global master repurchase agreement

for re

purchase

and rev

erse repurc

hase tra

nsactions. Th

ese agr

eements genera

lly allo

w that

all outstanding

transactions with

par

ticu

lar coun

terp

art

y can b

e off

set

, but o

nly in t

he event of d

efaul

t or oth

er pred

eter

mine

d event

In addit

he Group

also receives

and pledges readily realisable c

ollateral for derivatv

e transactions to

cover net e

posure i

the eve

nt of a def

ault

. Under r

epurc

hase a

nd rever

se rep

urchas

e agre

ement

s, t

he Gr

oup ple

dges (l

egall

y sell

) and obt

ains

(le

gally pu

rchas

) res

pect

ively

, high

ly liqud a

sse

ts w

hich can be s

old in t

he event of a d

efaul

The f

ollowi

ng tabl

es set o

ut the im

pact of n

ett

ing on th

e balan

ce shee

t. Th

is comp

rise

s deri

vatve tr

ansa

ction

s sett

led th

rough

an enf

orcea

ble net

ting a

greem

ent wh

ere we have t

he int

ent and ab

ilt

y to set

tle ne

t and whic

h are of

fse

t on the b

alanc

e shee

2021

Gross amounts

of recognised

ﬁnancal

instruments

$millon

Impact of

fse

t in th

balance

sheet

$millon

Net amounts

of ﬁnancal

instruments

presented

in the

balance

sheet

$millon

Related a

mount not

offset

in t

he ba

lan

ce sh

eet

Net amount

$millon

Financal

instruments

$millon

Financal

collateral

$millon

Asset

Der

ivat

ve ﬁnan

cal ins

tru

ment

598)

52,

(

)

,092)

4,851

Rev

se repurchase

agreem

ents and

other simlar

secured lending

,84

(

)

88,41

–

(88,41

–

At 31 De

cemb

er 2021

4,888

(34,0

)

140,

(

)

(96

11)

851

Liablites

Der

ivat

ve ﬁnan

cal ins

tru

ment

598)

53,

399

(

)

(

)

4,680

Repurchase agr

eements and other

simlar secure

d borrowing

3,07

(

)

65,6

–

)

–

At 31 De

cemb

er 2021

153,0

(34,

024

)

(

)

4,865)

4,680

350

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

2020

Gross amounts

of rec

ognised

ﬁnancal

instrument

$millo

Impact of

et in t

balance sheet

$millo

Net amounts

of ﬁnancal

instrument

presented in the

balance sheet

$millo

Related a

mount not offset

in the balance sheet

Net amount

$millo

Financal

instrument

$millo

Financal

collateral

$millo

Asset

Der

ivat

ve ﬁnan

cal ins

tru

ment

111,

)

(

12,

Rev

se repurchase

agreem

ents and

other simlar

secured lending

,490

(

)

–

(

)

–

At 31 De

cemb

er 2020

(50,

431)

137

,038

(

)

(

)

Liablites

Der

ivat

ve ﬁnan

cal ins

tru

ment

114

,045

)

1,533

(

)

(11

,75

679

Repurchase agr

eements and other

simlar secure

d borrowing

58,

484

(

)

50,

565

–

(

50,

565)

–

At 31 De

cemb

er 2020

172

,529

0,431

)

2,09

(

)

679

Rela

ted a

moun

ts no

t off

set in t

he b

alanc

e she

et com

pris

•

Financ

al inst

rume

nts n

ot of

et in the b

alanc

e shee

t but covere

d by an enfo

rceabl

e nett

ing ar

rangem

ent

. This co

mpri

ses

master netting arrangements held against derivatve ﬁnanc

al instrument

and excludes the effect of ov

-collateralisaton

•

Financ

al inst

rume

nts w

here a l

egal op

inon evi

dencng e

nforc

eabilt

y of t

he rig

ht of of

et may n

ot have b

een so

ught

, or ma

have been unable

to obtain

•

Financ

al collat

eral com

pris

es cash c

ollate

ral ple

dged a

nd rece

ived fo

r deri

vatve ﬁna

ncal ins

tru

ment

s and co

llater

al bou

ght

and s

old for r

evers

e repur

chase a

nd repu

rchas

e agre

ement

s res

pect

ively, and exclud

es the e

ffe

ct of over

collat

eralis

aton

Fin

anc

al liab

lit

es de

sign

ate

d at fai

r value t

hrou

gh pro

ﬁt or lo

2021

$millon

2020

$millo

Car

yin

g bala

nce agg

rega

te fair va

lue

78,43

619

ount co

ntra

ctual

ly obl

iged t

o repa

y at mat

uri

78,

691

4,405

Dif

fer

ence b

ween a

ggreg

ate fa

ir value a

nd cont

ract

ually o

blig

ed to re

pay at m

atu

rit

60)

Cum

ulat

ive cha

nge in f

air value a

ccre

dite

d to Cred

it Risk d

iff

erenc

)

The n

et fair val

ue los

s on ﬁnan

cal liablit

es des

ignat

ed at fai

r value thr

ough pr

oﬁt or los

s was $13

3 millon fo

r the yea

(31 De

cemb

er 202

0: n

et los

s of $24

7 mi

llon

). Furth

er det

ails of t

he Gro

’

s ow

n cred

it adjus

tmen

t (

OCA) valua

tion t

echniq

is de

scrib

ed lat

er in thi

s Note.

aluation

of ﬁnancal instrument

The f

air value

s of quo

ted ﬁna

ncal as

set

s and liab

lites in a

ctive m

arket

s are ba

sed on c

urren

t price

s. A mar

ket is re

garde

d as

acti

ve if tran

sact

ions fo

r the as

set or l

iablit

y take p

lace wi

th suf

ﬁcent f

reque

ncy a

nd volum

e to prov

ide pri

cng info

rmat

on on

an on

going b

asis

. Whereve

r pos

sible, f

air value

s have be

en calcu

late

d using u

nadju

sted q

uote

d market p

rice

s in active m

arket

for id

entca

l instr

ume

nts h

eld by th

e Grou

p. Where q

uote

d market p

rice

s are not a

vailabl

e, or are un

reliab

le beca

use of p

oor

liqu

dit

, fair val

ues ha

ve been d

eter

mine

d using val

uatio

n tech

nique

s which

, to the ex

tent po

ssib

le, use m

arket ob

ser

vab

inpu

, but in s

ome ca

ses us

e non mar

ket obs

vable in

put

s. V

alu

ation t

echni

ques u

sed in

clude di

scou

nted ca

shﬂow ana

lysis

and pr

icng m

odel

s and, wh

ere app

ropri

ate, com

pari

son wi

th inst

rum

ent

s that h

ave chara

cter

istc

s simlar t

o thos

e of the

ins

tru

ment

s held by t

he Gro

up.

The V

aluation

Met

hodology function is responsible

for independent price verifcation, ov

sight

of fair value

and appropriate

value a

djust

ment

s and e

scalat

ion of val

uatio

n issu

es. In

depe

ndent p

rice ver

catio

n is the p

roces

s of det

ermin

ng that t

valua

tion

s incor

porat

ed into t

he ﬁnan

cal stat

emen

ts are va

lidate

d indep

ende

nt of th

e busin

ess ar

ea resp

ons

ible for t

pro

duct

. The V

alu

ation M

etho

dolo

gy f

uncti

on has over

sigh

t of the f

air value a

djust

ment

s to en

sure th

at the ﬁn

ancal

ins

tru

ment

s are pr

iced to e

xit. T

hese a

re key contro

ls in en

surin

g the ma

teri

al accura

cy of t

he valua

tion

s incor

porat

ed in th

ﬁnan

cal stat

ement

s. T

he mar

ket data u

sed fo

r price ve

rif

cati

on (PV) m

ay incl

ude da

ta sour

ced fr

om rece

nt trad

e data

involv

ng exte

rnal co

unte

rpar

ties o

r third p

arti

es such a

s Bloo

mberg

, Reute

, broker

s and con

sens

us pri

cng provi

ders

. V

alua

tion

Met

hodo

log

y perf

orm an o

ngoin

g review of t

he mar

ket data s

ource

s that ar

e used a

s part o

f the PV an

d fair value p

roces

ses

whi

ch are for

mally d

ocum

ente

d on a semi-a

nnual b

asis

, deta

ilng the s

uitabl

y of the m

arket dat

a use

d for pr

ice test

ing. PV

use

s indep

ende

ntly s

ource

d data t

hat is de

eme

d most re

prese

ntat

ive of th

e market t

he inst

rum

ent

s trad

e in. T

o deter

mine t

quality of the market

data inputs, factors such as independence,

relevance, r

eliablity

, availabl

of multiple data sources and

methodolog

y emplo

yed by the pric

ng provider are tak

en into consideraton.

The V

luati

on and B

enchm

ark

s Commi

ttee (

VBC) i

s the valu

ation g

overnan

ce for

um con

sistn

g of repr

esent

ative

s from G

roup

Mar

ket Risk

, Produ

ct Con

trol, V

uatio

n Meth

odol

ogy an

d the bu

sines

s, w

hich me

ets m

onth

ly to dis

cuss an

d approve t

ind

epend

ent valu

ation

s of the i

nventor

. For Pr

incpal Fin

ance, th

e Investm

ent Co

mmitt

ee mee

ting i

s held on a q

uart

erl

y basi

to rev

iew investm

ent

s and valu

ation

351

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

13. Financa

l instruments

continued

Signﬁcant accountin

stimates and judge

ments

The G

roup eva

luate

s the sig

nﬁcance of ﬁ

nancal in

str

umen

ts an

d mater

ial accu

rac

y of the val

uatio

ns inco

rpor

ated in t

ﬁnan

cal stat

ement

s as t

hey involve a hi

gh degr

ee of jud

geme

nt and es

timat

on unce

rtain

y in dete

rminn

g the car

ying

value

s of ﬁnan

cal ass

s and liabl

ites at t

he bala

nce she

et dat

•

Fair val

ue of ﬁnan

cal inst

rum

ent

s is det

ermin

ed usi

ng valuat

ion te

chniq

ues and e

stima

tes (

ee bel

) which

, to the e

xtent

pos

sibl

e, use ma

rket obs

vable i

nput

s, b

ut in som

e case

s use no

n-market o

bser

vab

le inpu

. Chang

es in th

e obser

bilt

of signﬁcant valuation input

s can materially af

fect the fair values of ﬁnancal instr

ument

•

Whe

n estab

lishng t

he exi

t price o

f a ﬁnancal i

nstr

umen

t using a va

luati

on tech

nique

, the Gr

oup est

imat

es valuat

ion

adju

stme

nts i

n deter

minng t

he fair val

ue (pag

e 351)

•

In det

ermi

nng the va

luati

on of ﬁnan

cal inst

rum

ent

s, th

e Grou

p makes ju

dgeme

nts o

n the am

ount

s res

ved to ca

ter for

del and val

uatio

n risk

s, w

hich cover b

oth Level 2 an

d Level 3 ass

ets

, and th

e signﬁcan

t valuat

ion jud

gemen

ts in r

espe

of Level 3 in

str

umen

ts (pa

ge 353)

•

Whe

re the e

stima

ted me

asure

ment o

f fair valu

e is more j

udgem

ental i

n respe

ct of Level 3 as

set

s, t

hese ar

e valued b

ase

on mo

dels t

hat us

e a signﬁcan

t degre

e of non-m

arket

-ba

sed un

obse

vable inp

uation techniques

Refer t

o the fai

r value hie

rarchy exp

lanat

ion – Level 1, 2 a

nd 3 (pag

e 353)

•

Financal

inst

ruments held

at fair v

alue

–

ebt se

curi

te

s – ass

et-b

acked s

ecu

rit

es:

set

-ba

cked se

curit

es are valu

ed ba

sed on e

xtern

al pri

ces obt

ained f

rom

con

sens

us pricn

g provid

ers

, broker q

uote

s, rec

ent tra

des, a

rrang

ers’ q

uote

s, etc

. Wher

e an obs

vable pr

ice is a

vailabl

for a gi

ven se

curit

, i

t is clas

sif

ed a

s Level 2. In in

stance

s wher

e third-p

art

y pr

ices are n

ot avail

able or r

eliabl

e, the se

curi

is cl

assif

e

d as Level 3. T

he fair val

ue of Level 3 se

curi

tes is e

stima

ted us

ing mar

ket stan

dard cas

hﬂow mod

els wi

th inpu

parameter assumptions, which include

prepa

yment speeds, default ra

tes, discount margi

ns derived from compara

ble

curit

es wit

h simlar v

intag

e, colla

teral t

e, and cre

dit rat

ings

–

ebt se

curi

te

s in is

sue:

ese de

bt sec

urit

es rela

te to str

uct

ured n

otes is

sue

d by the G

roup. Wh

ere ind

epend

ent mar

ket

dat

a is availa

ble thr

ough pr

icng ven

dor

s and bro

er so

urces

, the

se pos

itons a

re clas

sif

ed a

s Level 2. Whe

re such li

qud

exte

rnal p

rices a

re not ava

ilable

, valuati

ons of t

hese d

ebt se

curit

es are im

pled us

ing inp

ut param

eter

s suc

h as bon

spre

ads an

d credi

t sprea

ds, an

d are cla

ssif

ed a

s Level 3. Th

ese inp

ut par

amete

rs are d

eter

mine

d with re

feren

ce to the

same issuer (

if availa

ble

) or pro

ies

rom c

omp

ara

ble issuer

s or

ssets

–

Derivatv

es:

eri

vatve pro

duct

s are cl

assif

e

d as Level 2 if th

e valuat

ion of t

he prod

uct is ba

sed u

pon inp

ut para

meter

whi

ch are obs

vable f

rom in

depen

dent an

d reliab

le mar

ket data s

ource

s. Der

ivat

ve produ

cts ar

e clas

sif

ed as Leve

l 3

if th

ere are si

gnﬁcant valu

ation i

nput p

aramet

ers w

hich are u

nobs

vable in t

he mar

ket, su

ch as pro

duct

s whe

re the

performance is link

ed to more than one underlying v

ariable. E

amples are foreign

exchange basket

options

, equi

y options

sed on t

he per

form

ance of t

wo o

r more un

derl

ying i

ndces an

d intere

st rate p

rodu

cts w

ith qua

nto pa

yout

s. In mo

st cas

the

se uno

bser

vab

le cor

relat

ion par

amete

rs can

not be im

pled f

rom th

e market

, and me

tho

ds such a

s histo

rcal an

alysi

and co

mpar

ison w

ith his

torca

l levels or o

ther b

enchm

ark da

ta must b

e empl

oyed

–

quit

y sha

res - pr

ivate e

quit

e major

t

y of pri

vate eq

uit

y unlis

ted inves

tment

s are val

ued b

ased o

n earn

ing mult

iple

s –

Pric

e-to-Ear

ning

s (P

) or ente

rpr

ise valu

e to ear

nings b

efore i

ncome t

ax, d

eprec

iaton an

d amor

tisa

ton (E

/EBITDA

)

rat

ios – of com

parab

le liste

d comp

anies

. The t

wo pr

imar

y inp

s for the va

luati

on of th

ese invest

ment

s are t

he actu

or fo

recas

t earn

ings of t

he invest

ee comp

anies an

d earn

ing mul

tiple

s for th

e compar

able li

sted co

mpanie

s. T

o ensu

comparabil

y bet

ween these unquoted inv

estm

ents and the compara

ble listed companies, appropriate adjustments are

als

o applie

d (

or exampl

e, liqudi

ty a

nd size

) in th

e valuat

ion. In c

ircums

tance

s where a

n investm

ent doe

s not ha

ve direct

comparables, or where

multiples for the

comparable companies ca

nno

sourced from relia

ble external sourc

alternative v

aluation techniques (

for example, d

counted

cashﬂow models

)

, which use predomina

ly unobservable inputs

or Level 3 in

put

s, ma

y be app

lied. Eve

n thou

gh earn

ing mul

tiple

s for th

e compa

rable li

sted co

mpanie

s can be s

ource

d from

thir

d-part

y s

ource

s (

or example

, Bloo

mberg), and t

hose in

put

s can be de

eme

d Level 2 input

, all unlis

ted inves

tment

(

exclud

ing tho

se whe

re obs

vable in

put

s are avai

lable, f

or exampl

e, over

-th

e-cou

nter (

C) p

rice

) are clas

sif

ed a

s Level 3

on th

e basi

s that t

he valua

tion me

thod

s involve ju

dgeme

nts r

anging f

rom de

term

inng com

parab

le comp

anies to d

iscou

rate

s wher

e the dis

coun

ted cas

hﬂow met

hod is a

pplie

–

ans a

nd advan

ces:

hese p

rimar

ly inc

lude lo

ans in t

he FM Bon

d and Loan Syn

dicato

n busin

ess w

hich were n

ndicat

ed as of t

he bal

ance sh

eet dat

e and ot

her ﬁnan

cng tran

sact

ions w

ithn Finan

cal Mar

kets

, and loa

ns and

adva

nces in

cludng r

evers

e repur

chase a

greem

ent

s that d

o not ha

ve SPPI cashﬂ

ows or are m

anage

d on a fair val

ue bas

is.

The

se loa

ns are ge

nerall

y bilat

eral in nat

ure an

d, whe

re availab

le, th

eir valuat

ion is b

ase

d on obse

vable cl

ean sal

transactions prices or

mar

et obser

vable spreads. If

obser

vable credit

spre

ads a

re not available,

prox

y sp

reads based on

comp

arabl

e loans w

ith sim

lar cre

dit grade

, secto

r and re

gion, ar

e used

. Where o

bser

ble cre

dit spre

ads an

d market

stan

dard pr

oxy me

tho

ds are avai

lable, t

hese l

oans ar

e clas

sif

ed as Leve

l 2. Whe

re ther

e are no re

cent tr

ansac

tions o

comp

arabl

e loans

, the

se loa

ns are cla

ssif

e

d as Level 3

352

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

–

her debt

curites:

These debt securites

include con

vertible

onds, c

pora

te bonds, cred

it and

str

tured notes.

Where quoted prices ar

e available through

pricng v

endor

s, brok

s or

obser

vable trading ac

vties

rom

liqud markets,

the

se are cl

assi

fe

d as Level 2 an

d valued u

sing su

ch quot

es. W

here th

ere are si

gnﬁcant valu

ation i

nput

s whi

ch are

uno

bser

vab

le in th

e market

, due to i

llquid t

rading o

r the com

plex

y of the pr

oduct

, the

se are cl

assi

fe

d as Level 3.

The val

uati

ons of t

hese d

ebt se

curit

es are imp

led us

ing inpu

t param

eter

s such a

s bond s

prea

ds and cr

edit spr

eads

The

se inp

ut param

eter

s are de

term

ined w

ith ref

erence t

o the s

ame iss

uer (if availab

) or prox

ied fr

om comp

arable

suer

s or as

set

•

Financal

inst

ruments held

at amortised cost

The f

ollowi

ng set

s out t

he Gro

’s basis f

or est

ablish

ng fair valu

es of am

orti

sed co

st ﬁnanc

al inst

rum

ent

s and the

cla

ssif

cat

ion be

twe

en Levels 1

, 2 and 3. A

s cer

tain cate

gor

ies of ﬁn

ancal ins

tru

ment

s are no

t acti

vely tra

ded, t

here i

s a

signﬁc

ant level of m

anag

ement j

udgem

ent invol

ved in calcu

latin

g the fai

r values:

–

ash an

d bala

nce

s at cent

ral b

ank

The fair value of cash and balances at cent

ral banks is their carr

ing amount

–

ebt se

curi

te

s in is

sue, s

ubor

din

ated l

iabl

ite

s and o

the

r borr

d fun

ds:

The ag

gregate fair values are calculate

sed on q

uote

d market p

rices

. For th

ose no

tes wh

ere qu

oted m

arket pr

ices are n

ot avail

able, a di

scoun

ted ca

shﬂow

del is us

ed ba

sed on a cu

rren

t market r

elate

d yiel

d cur

ve appr

opri

ate for t

he rema

inng ter

m to mat

urit

–

Dep

osits and borrowings:

The e

stim

ated fa

ir value of d

epos

its w

ith no st

ated m

atur

y is th

e amoun

t repa

yable on

dem

and. Th

e esti

mated f

air value o

f ﬁxed int

erest

-b

earin

g depo

sit

s and oth

er bor

rowin

gs wit

hout q

uote

d market p

rices i

sed on di

scoun

ted ca

shﬂows u

sing th

e prevailng m

arket ra

tes for d

ebt

s with a s

imlar Cre

dit Ris

k and rem

ainng ma

turi

–

stm

ent se

curi

te

For invest

ment s

ecur

ites t

hat do no

t have dir

ectl

y obse

vable mar

ket value

s, th

e Grou

p utils

es a

num

ber of val

uatio

n techn

iques t

o dete

rmine f

air value. W

here a

vailabl

e, secu

rite

s are value

d usin

g input p

roxies f

rom th

same or closely r

elated underlying (

for example, bond

spre

ads

from the same or

closel

y r

elate

issuer

) or input p

roxies from

a dif

feren

t unde

rly

ing (for exampl

e, a simla

r bond b

ut usin

g sprea

ds for a p

arti

cular s

ector a

nd ratin

. C

erta

in inst

rum

ent

cann

ot be prox

ies as s

et out ab

ove, and in su

ch case

s the p

osito

ns are valu

ed usi

ng non-m

arket ob

ser

vabl

e input

s. T

his

incl

udes t

hose i

nstr

umen

ts h

eld at amo

rti

sed co

st and pre

domin

antl

y relat

es to as

set

-ba

cked sec

urit

es. Th

e fair valu

e for

suc

h instr

ume

nts i

s usuall

y proxie

s from i

nter

nal as

sess

ment

s of th

e unde

rly

ing cash

ﬂows

–

ans a

nd advan

ces t

o bank

s and cu

sto

mer

For loa

ns and ad

vances t

o bank

s, th

e fair valu

e of ﬂoa

ting rat

e place

ment

and over

night d

epos

its i

s their ca

yin

g amoun

. The es

timat

ed fair val

ue of ﬁxe

d intere

-bear

ing de

posit

s is b

ased o

dis

count

ed cash

ﬂows usin

g the pr

evailng mo

ney mar

et rat

es for d

ebt

s with a s

imlar Cre

dit Risk a

nd rema

inng mat

urit

The G

roup’

s loa

ns and ad

vances t

o custo

mer

s’ por

tfoli

o is well di

versﬁe

d by geogr

aphy and in

dustr

y. Approx

imate

ly a

qua

rter o

f the po

rtf

olio re-p

rices w

ithn on

e mont

h, and ap

proxim

ately h

alf re-p

rices w

ithn 12 m

onth

s. Loan

s and adva

nces

are pr

esent

ed net o

f provi

sons fo

r impar

ment

. The f

air value of l

oans a

nd advan

ces to cu

stome

rs wi

th a resi

dual ma

tur

of le

ss tha

n one year g

enera

lly appr

oximat

es the ca

yin

g value. T

he esti

mate

d fair valu

e of loan

s and ad

vances w

ith a

res

idual m

atur

y of more t

han on

e year rep

resen

ts th

e disco

unte

d amou

nt of fu

ture c

ashﬂows e

xpe

cted to b

e recei

ved,

incl

udng a

ssump

tion

s relat

ing to pr

epay

ment r

ates an

d Credit R

isk. E

pecte

d cash ﬂow

s are dis

count

ed at cur

rent m

arket

rate

s to det

ermin

e fair valu

e. The G

roup h

as a wide r

ange of i

ndvi

dual in

stru

ment

s wit

hn it

s loans a

nd advan

ces po

rtfo

lio

and a

s a resul

t providn

g quant

cation o

f the key as

sump

tions u

sed to va

lue suc

h instr

ume

nts i

s impra

ctcal

–

the

r as

set

Oth

er as

set

s compr

ise pr

imar

ly of cas

h collat

eral an

d trade

s pendi

ng set

tlem

ent. T

he car

ying am

ount o

the

se ﬁnan

cal inst

rum

ent

s is con

sidere

d to be a re

aso

nable ap

proxim

aton of f

air value a

s they are e

ither s

hort

-t

erm in

nat

ure or re

-price t

o curr

ent mar

ket rate

s freq

uent

Fair val

ue adju

ment

Whe

n estab

lishng t

he exi

t price o

f a ﬁnancal i

nstr

umen

t using a va

luati

on tech

nique

, the Gr

oup con

sider

s adju

stme

nts t

the m

odel

led pr

ice whic

h market p

art

icpant

s woul

d make whe

n pricn

g that in

str

ument

. The m

ain valua

tion a

djust

ment

(

des

cribe

d fu

rthe

r below

) i

n deter

minng f

air value f

or ﬁnan

cal ass

ets a

nd ﬁnanc

al liablit

es are as f

ollows:

01.01.21

$millon

Mov

ement

ring t

he ye

$millon

01.01.20

$millo

Movement

rin

g the ye

$millo

Bid-offer va

luation adjustment

103

(2)

101

Cre

dit valu

atio

n adjus

tmen

189

(

165

189

Deb

it valua

tion a

djus

tmen

(55)

(

15)

(

70)

)

(

12)

(55)

Model valuati

on adjustment

–

(

Fund

ing valu

atio

n adju

stme

(5)

–

(21)

her fai

r value a

djust

ment

(

12)

(

13)

(58)

250

Income deferrals

y 1 and ot

her de

ferr

als

138

te: Br

acket r

epr

ese

s an as

set an

d cre

dit to t

he in

com

e sta

teme

353

Standard Chartered

–

nual Re

por

t 2021

Financal statements

13. Financa

l instruments

continued

•

Bid-offer valuation

djustment:

Gen

erall

, marke

t param

eter

s are mar

ked on a mid-m

arket b

asis in t

he revalu

ation s

yste

ms,

and a bi

d-of

fer valu

ation a

djust

ment is r

equir

ed to qu

antif

y t

he exp

ecte

d cost of n

eutra

lisng th

e busi

ness’ p

osit

ons th

rough

dea

ling awa

y in the m

arket

, there

by brin

gng lon

g posit

ons to b

id and sh

ort p

osito

ns to of

fer. The met

hod

olog

y to calcu

late

the b

id-of

fer ad

justm

ent for a d

eri

vatve po

rtfo

lio involve

s nett

ing be

twe

en lon

g and sho

rt po

siton

s and th

e groupi

ng of ri

by str

ike and ten

or bas

ed on t

he hed

ging st

rateg

y wher

e long p

osito

ns are ma

rked to bi

d and sho

rt po

siton

s marke

d to of

fer

in th

e syst

ems

•

edit val

uati

on adj

ust

men

t (

A):

The G

roup a

ccount

s fo

r CV

A again

st the fa

ir value of d

eri

vatve pro

duct

s. C

A i

s an

adju

stme

nt to th

e fair valu

e of the t

ransa

ction

s to reﬂe

ct the po

ssibl

y that o

ur coun

terp

arti

es may d

efaul

t and we ma

not r

eceive t

he f

ull mar

ket value of t

he out

sta

nding t

ransa

ction

s. It re

prese

nts a

n estim

ate of t

he adju

stmen

t a market

par

ticp

ant woul

d includ

e when d

eri

vng a pu

rchas

e price t

o acquir

e our ex

posur

es. C

A i

s calcul

ated fo

r each s

ubsid

, and

wit

hn each e

ntit

y for e

ach co

unter

par

ty t

o which t

he ent

y has ex

posur

e and takes a

ccoun

t of any collat

eral we ma

y hold

The G

roup c

alcula

tes th

e CV

A by using e

stima

tes of f

utu

re pos

itve exp

osur

e, marke

-im

pled pr

obabil

ty o

f defau

lt (PD

) and

recove

y rates

. Wher

e market

-imp

led dat

a is not r

eadil

y availab

le, we us

e market

-ba

sed pr

oxies to e

stim

ate the PD. Wrong-

way r

isk occ

urs w

hen th

e expo

sure to a co

unter

par

y is adve

rse

ly cor

relate

d wit

h the cre

dit qual

y of that c

ounte

rpar

, and

the G

roup h

as imp

lemen

ted a mo

del to ca

ptur

e this imp

act for key w

rong-way e

xpos

ures

. The G

roup al

so capt

ures th

unce

rtai

ntes a

sso

ciated w

ith wr

ong-way r

isk in th

e Gro

’

s Pr

ude

ntial V

uatio

n Adjust

ment

s fr

amewor

•

Deb

it valua

tion a

djus

tme

nt (DV

A):

The G

roup c

alcula

tes DV

A a

djust

ment

s on it

s der

ivatve l

iablite

s to reﬂe

ct chang

es in it

own cr

edit st

anding

. The G

roup

’s D

A adj

ustme

nts w

ill incr

eas

e if its c

redit st

andin

g wors

ens and c

onvers

ely

, d

ecrea

se if it

cre

dit stan

ding imp

roves. Fo

r deri

vatve lia

blites

, a D

A ad

justm

ent is de

term

ined by ap

plyi

ng the G

roup

’s prob

abilt

y of

default to the

roup

’

s negative expected e

xposure against the c

unterpart

The Group

’

s probabilty of default

and loss

exp

ecte

d in the even

t of defa

ult is de

rive

d base

d on bo

nd and cre

dit def

ault s

wap (

CDS) spr

eads a

sso

ciate

d with t

he Gro

’

suance

s and mar

ket stan

dard re

cover

y level

s. The e

xpec

ted exp

osur

e is mod

elled b

ase

d on the s

imulat

on of th

e unde

rly

ing

sk facto

rs over t

he exp

ected l

ife of th

e deal. T

his sim

ulato

n meth

odol

ogy in

corp

orate

s the col

later

al post

ed by the G

roup

and t

he ef

fect

s of ma

ster ne

ttin

g agree

ment

•

Model v

aluation adjustment:

aluation models ma

y have

icng

deﬁcencies or lim

tat

ions that require a va

luation

adju

stme

nt. T

hese p

ricng de

ﬁcencie

s or limta

tion

s aris

e due to th

e choic

e, imple

menta

ton and c

alibrat

on of th

e pricn

model

•

Fundi

ng valua

tion a

dju

stm

ent (F

A):

e Gro

up makes F

A adjus

tmen

t again

st deri

vatve pr

oduct

s. F

A reﬂe

cts an

est

imate o

f the ad

justm

ent to it

s fair va

lue tha

t a market p

art

icpant wo

uld make to i

ncor

porat

e fun

ding cos

ts or b

eneﬁt

tha

t could a

rise in r

elati

on to th

e expo

sure. F

A is calcu

lated by d

eter

minng t

he net ex

pect

ed exp

osure a

t a count

erpa

level an

d then a

pply

ing a fu

nding r

ate to th

ose ex

posu

res th

at reﬂect t

he mar

ket cost o

f fun

ding. T

he FV

A fo

r uncoll

atera

lised

(

incl

udng p

artia

lly coll

ateral

ised) d

eri

vatves in

corp

orate

s the es

timat

ed pre

sent valu

e of the m

arket f

undi

ng cost or b

eneﬁt

associated wi

th funding these tr

ansactions

•

her f

air value a

dju

stm

ent

The G

roup c

alculat

es the f

air value o

n the in

teres

t rate call

able pro

duct

s by calib

ratng t

o a set

of ma

rket pr

ices wit

h diff

erng m

atur

, exp

y and st

rike of th

e trad

•

Day o

ne and o

the

r def

erra

ls:

In certain circum

stances the intial fair value is base

d on a v

alu

ation techniqu

e which differ

to th

e trans

actio

n pric

e at the ti

me of int

ial reco

gnito

n. However, thes

e gains ca

n only b

e recog

nised w

hen t

he valuat

ion

tec

hniqu

e used i

s base

d prim

arly o

n obse

vable ma

rket dat

a. In tho

se cas

es whe

re the int

ially r

ecogn

ised f

air value i

s base

on a valu

ation m

odel t

hat us

es inpu

ts w

hich are n

ot obs

vable in t

he mar

ket, t

he dif

feren

ce bet

wee

n the tr

ansac

tion pr

ice

and t

he valuat

ion mo

del is n

ot reco

gnise

d imme

datel

y in the in

come s

tatem

ent. T

he dif

fere

nce is amo

rti

sed to t

he inco

sta

temen

t until t

he inpu

ts b

ecom

e obser

vable, o

r the tr

ansa

ction m

ature

s or is ter

mina

ted. O

ther d

efer

rals pr

imarl

repr

esen

t adjus

tment

s taken t

o reﬂect t

he sp

ecif

c ter

ms and co

ndito

ns of cer

tain d

eriva

tve cont

ract

s which a

ffe

ct the

terminaton value

at the measurem

ent

ate

In add

iton

, the Gr

oup calc

ulate

s own cre

dit adju

stmen

t (

) o

n its is

sue

d debt de

signa

ted at f

air value, in

cludn

g str

uctur

not

es, in o

rder to r

eﬂect ch

anges i

n its ow

n credit s

tandi

ng. O

wn iss

ued no

te liabl

ites are d

iscou

nted u

tilsin

g spre

ads as

at th

e meas

ureme

nt date

. Thes

e sprea

ds con

sist of a m

arket leve

l of fu

nding co

mpon

ent and an i

dosy

ncrat

ic own cre

dit

comp

onen

t. Und

er IFRS 9 t

he chan

ge in the O

CA co

mpon

ent is re

port

ed und

er oth

er comp

rehen

sive inc

ome. Th

e Grou

’

A rese

ve will inc

reas

e if it

s credit s

tandin

g wors

ens an

d, conver

sely, decre

ase if it

s cre

dit stan

ding imp

roves. T

he Gro

’s

A rese

ve will rever

se over t

ime as it

s liab

lites m

ature. T

he OC

A at 31 De

cembe

r 20

21 is a g

ain of $3 m

illon (31 D

ecemb

2020: $43 mil

lon los

)

Fair val

ue hier

arc

y – ﬁna

nca

l inst

rum

ent

s hel

d at fai

r value

set

s and li

ablite

s carri

ed at fai

r value, or f

or whic

h fair value

s are dis

d, ha

ve been c

lass

if

ed into t

hree l

evels acco

rding to

the o

bser

bilt

y of the s

ignﬁcant in

put

s use

d to dete

rmin

e the fai

r values

. Chang

es in th

e obser

vabilt

y of s

ignﬁcant valu

atio

inpu

ts d

urin

g the rep

ort

ing pe

riod m

ay res

ult in a tra

nsfer o

f ass

ets a

nd liabli

tes wit

hn the f

air value hi

erarchy

. T

he Gr

oup

reco

gnis

es tran

sfer

s bet

en levels o

f the fai

r value hie

rarchy whe

n ther

e is a signﬁca

nt chang

e in eith

er it

s princp

al mar

ket

or th

e level of o

bser

vabi

lt

y of the in

put

s to the va

luati

on tech

nique

s at the e

nd of the r

epor

ting p

erio

•

Level 1:

Fai

r value me

asure

ment

s are th

ose de

rive

d from u

nadju

sted q

uote

d price

s in acti

ve market

s for i

dentc

al ass

ets o

liablites

•

Level 2:

Fai

r value me

asure

ment

s are t

hose w

ith quo

ted pr

ices f

or simlar i

nstr

ume

nts in a

ctive m

arket

s or quo

ted pr

ices fo

identcal or simlar instr

ument

s in inactve markets and ﬁnancal inst

rument

s valued using mod

els where all signﬁcant inputs

are observable

•

Level 3:

Fair val

ue me

asure

ment

s are th

ose wh

ere inp

uts w

hich co

uld ha

ve a signﬁcant e

ffe

ct on th

e instr

ume

’

s valu

ation

are no

t bas

ed on ob

ser

vabl

e market d

ata

354

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

The f

ollowi

ng tabl

es show t

he clas

sif

cati

on of ﬁna

ncal ins

tru

ment

s held a

t fair valu

e into th

e valuat

ion hier

archy:

Asset

Leve

l 1

$millon

Leve

l 2

$millon

Leve

l 3

$millon

Fin

anc

al in

str

ume

nts h

eld a

t fair val

ue th

rou

gh pro

ﬁt or l

oss

Loan

s and ad

vance

s to ban

–

3,838

Loan

s and ad

vance

s to cust

ome

–

,596

357

Rev

se repurchase

agreem

ents and other

simlar secured lending

–

8,4

566

0,009

Deb

t sec

urit

es and o

ther e

ligbl

e bills

,057

Of which:

sued by c

entr

al bank

s & gover

nme

nts

10,

731

–

Issued by

corporates other than

ﬁnanc

al insttutions

750

111

Issued by

ﬁnancal i

nsttutions

1,325

6,06

238

Equit

637

186

Der

ivat

ve ﬁnan

cal ins

tru

ment

1,06

51,

289

Of which:

Foreign exchange

1,577

Interest

rate

,314

Credit

–

,265

289

Equity and stock

index options

–

133

136

Commo

dity

896

1,000

–

,896

Inve

ent

rit

e

Deb

t sec

urit

es and o

ther e

ligbl

e bills

51,

298

121,

375

Of which:

sued by c

entr

al bank

s & gover

nme

nts

24,651

64,

281

Issued by

corporates other than

ﬁnanc

al insttutions

–

1,9

–

1,9

Issued by

ﬁnancal i

nsttutions

43,423

–

,13

Equit

493

Other assets

–

al ﬁnan

ca

l inst

ment

s at 31 D

ece

mber 2

021²

285

678

Liablites

Fin

anc

al in

str

ume

nts h

eld a

t fair val

ue th

rou

gh pro

ﬁt or l

oss

Dep

osit

s by ba

nks

–

,069

283

Customer accounts

–

8,8

Repurchase agr

eements and other simlar

cured

orrowing

–

2,38

–

2,38

Deb

t sec

urit

es in is

sue

–

597

Short positons

4,1

2,3

–

562

Der

ivat

ve ﬁnan

cal ins

tru

ment

949

2,35

53,

399

Of which:

Foreign exchange

169

41,555

Interest

rate

6,448

471

Credit

–

,084

3,1

Equity and stock

index options

–

126

160

Commo

dity

–

Othe

r liablites

–

al ﬁnan

ca

l inst

ment

s at 31 D

ece

mber 2

021²

131,807

1,653

ncl

ude

s cover

ed bo

nds o

f $7

326 mill

on, s

ecu

rit

es i

ssu

ed by Mu

lti

lat

eral D

evel

opm

ent B

ank

s/Inte

rna

tio

nal O

rgan

isa

ton

s of $1

2,109 m

illo

n and S

tat

e-ow

agencies and

development banks of

$19

,95

9 millon

e abo

ve tab

le do

es no

t incl

ude h

eld f

or sa

le as

set

s of $

43 mi

llon a

nd lia

bli

tes o

f $ni

l. Th

ese ar

e rep

ort

ed in N

ote 2

1 tog

eth

er wi

th th

eir f

air val

ue hi

erar

chy

The

re were no s

ignﬁcant ch

ange

s to valuat

ion or l

evelling ap

proac

hes in 2021.

The

re were no s

ignﬁcant t

ransf

ers o

f ﬁnancal a

sse

ts an

d liablit

es mea

sure

d at fair valu

e bet

wee

n Level 1 and Level 2 du

ring

355

Standard Chartered

– Ann

ual Rep

t 2021

Financal statements

13. Financa

l instruments

continued

Asset

Leve

l 1

$millo

Leve

l 2

$millo

Leve

l 3

$millo

otal

$millo

Fin

anc

al in

str

ume

nts h

eld a

t fair val

ue th

rou

gh pro

ﬁt or l

oss

Loan

s and ad

vance

s to ban

–

3,677

,87

Loan

s and ad

vance

s to cust

ome

–

718

,377

Rev

se repurchase

agreem

ents and other

simlar secured lending

–

1,06

63,405

Deb

t sec

urit

es and o

ther e

ligbl

e bills

15,8

258

25,600

Of which:

sued by c

entr

al bank

s & gover

nme

nts

8,630

–

16,

530

Issued by

corporates other than

ﬁnanc

al insttutions

1,2

209

,781

Issued by

ﬁnancal i

nsttutions

1,2

5,208

104

Equit

3,657

592

,528

Der

ivat

ve ﬁnan

cal ins

tru

ment

473

Of which:

Foreign exchange

111

54,53

Interest

rate

,78

,826

Credit

–

700

702

Equity and stock

index options

–

109

110

Commo

dity

326

856

–

Inve

ent

rit

e

Deb

t sec

urit

es and o

ther e

ligbl

e bills

,280

133

Of which:

sued by c

entr

al bank

s & gover

nme

nts

55,020

3,45

516

Issued by

corporates other than

ﬁnanc

al insttutions

1,2

378

–

200

Issued by

ﬁnancal i

nsttutions

1,2

11,43

38,2

–

Equit

Other assets

–

otal ﬁn

anca

l instr

ent

s at 31 De

cemb

er 2020³

81,

931

25,210

10,08

Liablites

Fin

anc

al in

str

ume

nts h

eld a

t fair val

ue th

rou

gh pro

ﬁt or l

oss

Dep

osit

s by ba

nks

–

,10

249

Customer accounts

–

897

Repurchase agr

eements and other simlar

cured

orrowing

–

Deb

t sec

urit

es in is

sue

–

,651

160

5,811

Short positons

2,573

–

3,754

Der

ivat

ve ﬁnan

cal ins

tru

ment

1,00

119

71,533

Of which:

Foreign exchange

115

Interest

rate

10,

0,424

Credit

–

Equity and stock

index options

–

255

260

Commo

dity

287

487

–

Othe

r liablites

–

otal ﬁn

anca

l instr

ent

s at 31 De

cemb

er 2020³

986

446

906

pre

sen

ted t

o reﬂe

ct co

rre

ct cla

ssi

f

cati

on of c

oun

ter

par

ty t

pes

. The

re ha

s be

en no ch

ang

e to th

e leve

llin

g appr

oac

h or be

een F

TPL an

d Inves

tme

securites

categories d

ue to

the restatement

Includes co

vered bonds of

,216 millon,

curites

sued

by Multilateral

Development Banks/International

rganisatons

of $11,454 mill

on (

represented from

0,870 mil

lon), and St

ate

-own

ed ag

enc

ies an

d deve

lop

men

t bank

s of $

13,950 mi

llo

n (

pre

sent

ed f

rom $

15,

606 m

illo

)

he ab

ove tab

le do

es no

t incl

ude h

eld f

or sa

le as

set

s of $

5 mill

on and l

iab

lit

es of $

nil. T

hes

e are re

por

d in No

te 21 t

oge

the

r wit

h thei

r fair v

alue h

ier

archy

356

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

Fair val

ue hier

arc

y – ﬁna

nca

l inst

rum

ent

s me

asur

ed at a

mort

ise

d cos

The f

ollowi

ng tabl

e shows t

he carr

ing am

ount

s and in

corp

orate

s the Gr

oup

’s estim

ate of f

air values o

f thos

e ﬁnanc

al ass

ets

and li

ablite

s not pre

sent

ed on th

e Grou

’

s b

alance s

heet a

t fair valu

e. Thes

e fair valu

es may b

e dif

ferent f

rom t

he actu

amo

unt tha

t will be r

ecei

ved or pai

d on the s

ettl

ement o

r matu

rit

y of t

he ﬁnanc

al instr

ume

nt. Fo

r cert

ain inst

rum

ent

s, th

e fair

value m

ay be d

eter

mined u

sing a

ssump

tion

s for wh

ich no ob

ser

vabl

e price

s are avail

able.

Carryin

value

$millon

Fair v

alu

Leve

l 1

$millon

Leve

l 2

$millon

Leve

l 3

$millon

Asset

sh and b

alanc

es at cen

tral b

anks¹

72,6

–

,663

–

,66

Loan

s and ad

vance

s to ban

44,383

–

44,

383

–

44,

383

of w

hich – reve

rse r

epur

chas

e agree

ment

s an

d othe

simlar

cured

len

ding

,079

–

,079

–

,079

Loan

s and ad

vance

s to cust

ome

298,468

–

6,2

298,425

of w

hich – reve

rse r

epur

chas

e agree

ment

s an

d othe

simlar

cured

len

ding

–

Investment securites

–

Other assets

40,0

–

0,0

40,0

set

s he

ld for s

ale

–

At 31 De

cemb

er 2021

496

,95

–

,11

Liablites

Dep

osit

s by ba

nks

30,0

–

0,041

–

30,

041

Customer accounts

–

Repurchase agr

eements and other simlar

cured

bor

rowin

260

–

,260

–

3,260

Deb

t sec

urit

es in is

sue

6,073

35,

503

–

Subordinated

liab

lites and

other borrow

ed f

unds

16,6

16,

811

519

–

Othe

r liablites

43,4

–

43,431

43,432

At 31 De

cemb

er 2021

399

630,284

Carr

ying value

$millo

Fair value

Leve

l 1

$millo

Leve

l 2

$millo

Leve

l 3

$millo

otal

$millo

Asset

sh and b

alanc

es at cen

tral b

anks¹

,712

–

66,7

–

,712

Loan

s and ad

vance

s to ban

44,34

–

4,275

4,2

of w

hich – reve

rse r

epur

chas

e agree

ment

s an

d othe

simlar

cured

len

ding

247

–

265

–

265

Loan

s and ad

vance

s to cust

ome

281,699

–

,13

of w

hich – reve

rse r

epur

chas

e agree

ment

s an

d othe

simlar

cured

len

ding

–

Investment securites

–

20,

Other assets

0,9

–

set

s he

ld for s

ale

–

At 31 De

cemb

er 2020

453,

–

201

,484

252,0

53,544

Liablites

Dep

osit

s by ba

nks

30,

–

30,

–

30,

Customer accounts

,339

–

Repurchase agr

eements and other simlar

cured

bor

rowin

–

Deb

t sec

urit

es in is

sue

,550

25,638

–

,079

Subordinated

liab

lites and

other borrow

ed f

unds

16,

654

–

Othe

r liablites

–

At 31 De

cemb

er 2020

590

,929

42,

631

–

592,

he ca

ng amo

unt o

f the

se ﬁn

anc

al ins

ume

nts i

s con

sid

ered t

o be a re

onab

le ap

prox

imat

on o

f fair va

lue a

s they a

re sh

ort-ter

m in na

tur

e or rep

ric

e to

current market rates frequently

clu

des g

over

nmen

t bon

ds an

d T

asu

ry b

ill

s of $17

,153 m

ill

on at 31 D

ece

mbe

r 2021 an

d $ 7

1 mill

on at 3

1 Dec

emb

er 2020

357

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

13. Financa

l instruments

continued

Loa

ns and a

dvance

s to cu

sto

mer

s by clien

t segm

ent

2021

Carryin

value

Fair value

age 3

$millon

age 1 a

age 2

$millon

age 3

$millon

age 1 a

age 2

$millon

Corp

orate, Commercial &

Institu

tonal Banking

659

136,7

,750

36,463

,213

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing

779

135,739

136,

518

135,87

136

,650

ntral & o

ther i

tems

–

562

At 31 De

cemb

er 2021

3,43

295,030

298,468

3,530

94,

8,425

2020

Carr

ying value

Fair v

alue

Stage 3

$millo

Stage 1

and

stage 2

$millo

otal

$millo

Stage 3

$millo

Stage 1

and

stage 2

$millo

otal

$millo

Corp

orate, Commercial &

Institu

tonal Banking²

3,0

415

133

,457

,10

nsum

, Pr

ivat

e & Busi

nes

s Bank

ing²

262

838

,079

ntral & o

ther i

tems

–

At 31 De

cemb

er 2020

,87

81,699

,13

Loans and advances include reverse repu

rchase agreement

and other simlar secured lending: carr

ying value $7

331 millon and fair

value $7

,331 millon

(31 D

ece

mbe

r 2020: $2,91

9 mill

on an

d $2,92

2 mill

on re

spe

cti

vely)

llow

ing t

he Gr

oup’s chan

ge in or

gan

isat

on

al str

ture

, the

re ha

s bee

n an int

egr

ato

n of Co

orat

e & Ins

tit

uto

nal B

ank

ing an

d Co

mmer

cial B

ank

ing t

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng; Pr

ivat

e Ban

kin

g and Ret

ail B

ank

ing t

o Con

sum

er, Priv

ate & Bu

sin

ess B

ank

ing

. Fur

the

, c

ert

ain cl

ient

s ha

ve be

mov

ed be

een t

he t

wo new c

lien

t seg

men

. Pri

or pe

rio

d has b

een r

est

ate

358

Standard Cha

tered

– Annu

al Repo

rt 202

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

Fair

value

of ﬁnanc

al instruments

Lev

el 3 summar

y and signﬁcant unobser

input

The f

ollowi

ng tabl

e prese

nts t

he Gr

oup

’s prima

y Level 3 ﬁnanc

al inst

rume

s which ar

e held at f

air value. T

he tabl

e also

pre

sent

s the val

uatio

n tech

nique

s used t

o meas

ure th

e fair value o

f thos

e ﬁnanca

l instr

ume

nts

, the s

ignﬁcant un

obse

vable

inpu

, the ra

nge of valu

es for t

hose i

nput

s and t

he weight

ed aver

age of th

ose in

put

Instrument

lue a

s at

31 December

2021

Princpal valuation

technique

Signﬁcant

unobs

ervable

inputs

Range

eighted

average

Assets

$millon

Liablites

$millon

Loan

s and ad

vance

s to ban

–

Discounted cashﬂ

ows

Rec

over

y rate

–

.6%

Loan

s and ad

vance

s to

customers

357

–

Discounted c

ashﬂows

Price

/yield

2% – 11.

.1%

Recove

y rate

10.6% – 10

verse repurchase

agreements and other simla

secured lending

1,566

–

Discounted cash

ﬂows

Repo curve

3%–

3.0%

Debt securites, alternative tier

one and

other eligble

securites

–

Discounted c

ashﬂows

Price

/yield

1% – 12

Recove

y rate

0.0

1% – 1.0

Gove

rnm

ent bo

nds an

reasur

y bil

–

Discounted

cashﬂows

Price/yield

.7% – 5

.5%

3.7%

Asset

backed s

ecurites

–

Discounted cash

ﬂows

Price/

ield

Equity shares

(includ

es private

equit

y in

vestment

)

679

–

Comp

ara

ble pricng

yield

/EBITD

A multiples

x–1

8.6x

/Revenue

multiples

0.1

E multiples

12.6x

–

25.

B multiples

4x–

.4x

S multiples

1.8x–

1.8x

Liqudit

y discount

–

16.

Discounted

cashﬂows

Discount rates

.0%–

Option pric

ng model

evenue multiples

x–

2.1



.0%–

.0%

Other assets

–

Der

ivat

ve ﬁnan

cal ins

tru

ment

of which:

Foreign exchange

Option pricng model

Foreign

exchange option

imp

led vol

atilt

.1%

– 6

Discounted

cashﬂows

Fore

ign

exchange cur

ves

6.4

)% – 57

.3%

Interest

rate

Discounted cas

hﬂows

Interest ra

te cur

ves

)%-

18.8%

.0%

Option pric

ng model

Bond option impl

vola

tilt

Credit

Discounted c

ashﬂows

Credit spreads

–1

.0%

Price/

yield

–

Equit

and stock index

Internal pric

ng model

Equit

correlation

.0% – 96

.0%

Equity-FX correlation

(70.0)%-85

.0%

(

0)%

Dep

osit

s by ba

nks

–

283

Discounted cas

hﬂows

Credit spread

0.4% – 3.0%

.4%

Price/

yield

6.8%–8.

Customer accounts

–

454

Discounted cashﬂ

ows

Credit spre

ads

.0% – 2.0

Interest

rate c

ves

–

5.6%

4.7%

Price/

yield

–

0.1

Deb

t sec

urit

es in is

sue

–

821

Discounted

cashﬂo

Cre

dit spreads

–2

.0%

Interest

rate c

ves

% – 5.6%

Internal pric

ng model

Equity correlation

.0% – 96.0

70.

Equity-FX correlation

(70.0)%-85

.0%

(

0)%

Othe

r liablites

–

Comp

ara

ble pricng/

yield

/EBITD

A multiples

–

9.9

ota

,653

he ra

nge

s of val

ues s

hown i

n the a

bove ta

ble r

epr

esen

t the h

igh

est an

d lowe

st lev

els u

sed i

n the va

luat

ion o

f the G

rou

’s Leve

l 3 ﬁnan

cal i

nst

rum

ent

s at

31 D

ecem

ber 202

1. T

he ran

ges o

f valu

es us

ed ar

e reﬂe

cti

ve of th

e und

erl

yin

g cha

ract

eri

st

cs of t

hes

e Level 3 ﬁ

nanc

al in

str

ume

s bas

ed on t

he ma

rket

con

dit

ons a

t the b

ala

nce sh

eet d

ate

. Howev

er, thes

e ran

ges o

f valu

es ma

y not r

epre

sen

t the u

nce

rta

int

y in f

air val

ue me

asu

rem

ent

s of th

e Gr

oup’

s L

evel 3

ﬁnancal instrum

ents

Weigh

ted a

vera

ge fo

r non-

der

iva

tve ﬁ

nanc

al in

str

ume

s has b

een c

alcu

lat

ed by we

ight

ng in

put

s by th

e rel

ati

ve fai

r valu

e. W

ight

ed av

erag

e for

riva

tve

s has b

n prov

ide

d by weig

htn

g inp

s by the r

isk r

elev

ant to t

hat va

ria

ble. N/

A h

as be

en en

ter

ed fo

r the c

ase

s whe

re wei

ghte

d ave

rage i

not a meaningful indcator

359

Standard Chartered

– Annu

al Repo

rt 2021

Financal statements

13. Financa

l instruments

continued

Lev

el 3 summar

y and signﬁcant unobser

input

ontinue

Instrument

lue a

s at

31 December 2

020

Princpal valuation

technique

Signﬁ

cant unobser

vable

input

Rang

eighted

average

Asset

$millo

Liablites

$millo

Loan

s and ad

vance

s to ban

200

–

Discounted cash

ﬂows

Price/

yie

12.

7%–

12.8%

Loan

s and ad

vance

s to

customers

718

–

Discounted c

ashﬂows

ice

/yield

% – 11.

Recove

y rates

4.2

% – 100%

verse repurchase

agreements and other simla

secured lending

1,0

–

Discounted c

ashﬂows

Repo c

1.0

%–3

.8%

Debt securites, alternative tier

one and

other eligble

securites

171

–

Discounted cashﬂ

ows

Price/

ield

4.7%–

11.5%

10.

Gove

rnm

ent bo

nds an

reasur

y bil

–

Discounted cashﬂo

Price/

ield

8% – 5.

Asset

backed s

ecurites

–

Discounted c

ashﬂows

Price

/yield

–1

11.7%

Recove

y rates

5.0%

.0%

Equity shares

(includ

es private

equit

y in

vestment

)

660

–

Comparable pricng/

yield

/EBITD

A multiples

3x – 14.

E multiples

B multiples

5x – 2.0

S multiples

Liqudit

y discount

20.0%

Discounted

cashﬂows

Discount rates

6.0

% – 15

.0%

Other assets

–

Der

ivat

ve ﬁnan

cal ins

tru

ment

of which:

Foreign exchange

Option pricng model

Foreign

excha

nge option

imp

led vol

atilt

Discounted

cashﬂows

Fore

ign

exchange cur

ves

.7%–5.6

.1%

Interest

rate

Discounted cashﬂ

ows

Interest ra

te curves

(5.2

18.6%

10.0%

Option pric

ng model

Bond option impl

vola

tilt

20.0%

–30.0%

Credit

Discounted cashﬂ

ows

Cre

dit

spread

2.0%

.0%

Equit

and stock index

Internal pric

ng model

Equi

correlation

20.0%

– 90.0%

Equity-FX correlation

(

.0)

– 80.0

(

)

Dep

osit

s by ba

nks

–

Discounted c

ashﬂows

Credit spread

1.0% – 1

Bond option impl

ed

vola

tilt

Customer accounts

–

Discounted cashﬂ

ows

Credit spre

ads

.0%

1.0

Interest

rate c

ves

)% – 7

Recove

y rates

5.0%

.0%

Deb

t sec

urit

es in is

sue

–

Discounted

cashﬂo

Cre

dit spreads

0.1% – 11.

Internal pric

ng model

Equity correlation

20.0% – 9

0.0%

Equity-FX correlation

(

.0)

– 80.0

(

)

Othe

r liablites

–

ota

446

he ra

nge

s of val

ues s

hown i

n the a

bove ta

ble r

epr

esen

t the h

igh

est an

d lowe

st lev

els u

sed i

n the va

luat

ion o

f the G

rou

’s Leve

l 3 ﬁnan

cal i

nst

rum

ent

s at

31 D

ecem

ber 202

0. The ra

nge

s of val

ues u

sed a

re reﬂ

ect

ive of t

he un

der

ing ch

ara

cter

ist

cs o

f the

se Leve

l 3 ﬁnan

cal i

nst

rum

ent

s ba

d on th

e mar

ket

con

dit

ons a

t the b

ala

nce sh

eet d

ate

. Howev

er, thes

e ran

ges o

f valu

es ma

y not r

epre

sen

t the u

nce

rta

int

y in f

air val

ue me

asu

rem

ent

s of th

e Gr

oup’

s L

evel 3

ﬁnancal instrum

ents

Weigh

ted a

vera

ge fo

r non-

der

iva

tve ﬁ

nanc

al in

str

ume

s has b

een c

alcu

lat

ed by we

ight

ng in

put

s by th

e rel

ati

ve fai

r valu

e. W

ight

ed av

erag

e for

riva

tve

s has b

n prov

ide

d by weig

htn

g inp

s by the r

isk r

elev

ant to t

hat va

ria

ble. N/

A h

as be

en en

ter

ed fo

r the c

ase

s whe

re wei

ghte

d ave

rage i

not a meaningful indcator

360

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

Lev

el 3 Summar

y and signﬁcant unobser

abl

input

ontinue

The f

ollowi

ng sect

ion de

scrib

es th

e signﬁcant u

nobs

vable in

put

s iden

tﬁed in th

e valuat

ion te

chniqu

e table:

•

Comparable price

yield

is a valu

atio

n meth

odolo

gy in w

hich the p

rice o

f a compar

able in

str

ument i

s used t

o estim

ate th

fair val

ue whe

re the

re are no dir

ect obs

vable p

rice

s. Yield i

s the in

teres

t rate th

at is use

d to dis

count t

he fu

ture ca

shﬂows

in a dis

count

ed cas

hﬂow mod

el. V

alu

ation u

sing com

parab

le inst

rum

ent

s can be do

ne by calcul

ating a

n imple

d yield (

spre

ad over a liq

ud ben

chmar

) f

rom th

e price o

f a comp

arable in

str

umen

t, th

en adju

stng th

at yie

ld (

or spre

ad) to de

rive

a value f

or the in

str

umen

t. Th

e adjus

tment s

houl

d accoun

t for rel

evant dif

feren

ces in th

e ﬁnanca

l instr

ume

nts s

uch as

mat

urit

y an

r credit q

ualit

. A

lter

nati

vely

, a pr

ice-t

o-pric

e basi

s can be as

sume

d bet

wee

n the co

mparab

le inst

rum

ent

and t

he inst

rum

ent be

ing value

d in orde

r to est

ablish t

he value o

f the in

str

ument (for e

xample, de

riv

ng a fair val

ue for a

juno

r unse

cure

d bond f

rom th

e price o

f a senio

r secu

red bo

nd)

. A

n incre

ase in p

rice, in i

solat

on, wou

ld res

ult in a fa

vourabl

movem

ent in th

e fair valu

e of the a

sset

. An in

creas

e in yiel

d, in iso

lato

n, woul

d result i

n an unfa

vourab

le moveme

nt in the f

air

value o

f the as

set

•

Correlation

is th

e mea

sure of h

ow movemen

t in one var

iable in

ﬂuence

s the move

ment in an

oth

er variab

le. An eq

uit

correlation is the

correlation bet

ween two equity instr

uments, while an

interest rate

correlation refers to the correlation

bet

en t

wo swap ra

tes

•

edit s

pre

repr

esent

s th

e addit

onal yi

eld th

at a market p

art

icpant wo

uld dem

and fo

r takin

g expo

sure to t

he Cred

it Risk

of an instrument

•

Discount rate

refer

s to th

e rate of r

etur

n use

d to conver

t expe

cted ca

sh ﬂows in

to pres

ent valu

•

Equity-FX correl

ation

is the

correlation bet

ween equity instrument and foreign

excha

nge instrument

•

BITDA mult

iple

is t

he rat

io of Ent

erpr

ise V

alu

e (EV

) to Earn

ings B

efore In

teres

t, T

axes

, Depre

ciato

n and Amo

rti

saton

(EBITDA)

. E

V is the a

ggreg

ate mar

ket capit

alsat

ion and d

ebt minu

s the ca

sh and ca

sh equi

valent

s. A

n incre

ase in E

/EBIT

mul

tiple w

ill resu

lt in a favo

urabl

e movemen

t in the fa

ir value of t

he unli

sted ﬁr

•

/Revenu

e mult

iple

s the ra

tio of Ent

erpr

ise V

ue (EV

) to Revenu

e. An inc

reas

e in EV

/Reven

ue mult

iple w

ill resu

lt in a

favo

urabl

e movemen

t in the fa

ir value of t

he unli

sted ﬁr

•

Fore

ign exch

ange c

is th

e term s

tru

cture f

or for

ward r

ates an

d swap rat

es bet

en curr

enc

y pair

s over a spe

cif

ed

period

•

t ass

et value (N

)

is the va

lue of an en

tit

y’s ass

s afte

r dedu

cting any li

ablite

•

Interest

rate curves

s the te

rm str

uct

ure of int

erest r

ates an

d meas

ure of f

utu

re inte

rest rat

es at a par

ticu

lar poi

nt in tim

•

Liqu

dit

y dis

coun

ts in t

he valu

atio

n of unl

ist

ed invest

men

imar

ly appl

ied to th

e valuat

ion of un

liste

d ﬁrms’ i

nvestme

nts

to reﬂ

ect the f

act tha

t thes

e stoc

ks are n

ot acti

vely tr

aded

. An incre

ase in l

iqudit

y di

scoun

t will res

ult in un

favour

able

movem

ent in th

e fair valu

e of the u

nliste

d ﬁrm

•

Price-Earnings (P

E) mult

iple

is the ra

tio of th

e marke

t value of t

he equi

y to the ne

t incom

e afte

r tax

. An incr

ease i

n P

mul

tiple w

ill resu

lt in a favo

urabl

e movemen

t in the fa

ir value of t

he unli

sted ﬁr

•

Price

-B

ook (P

/B) mult

iple

is t

he rat

io of the m

arket val

ue of eq

uit

y to the b

ook val

ue of eq

uit

. An in

creas

e in P

/B multip

le will

res

ult in a fa

vourabl

e movemen

t in the f

air value of t

he unl

isted ﬁ

•

Price

-Sa

les (P

/S) mult

iple

s the rat

io of the m

arket val

ue of eq

uit

y to sal

es. An i

ncrea

se in P

/S multip

le will re

sult in a

favo

urabl

e movemen

t in the fa

ir value of t

he unli

sted ﬁr

•

Recover

y ra

tes

e the ex

pecta

tion o

f the rat

e of retu

rn res

ultin

g from t

he liqu

datio

n of a par

ticul

ar loan

. As th

e prob

abilt

of de

fault in

crea

ses fo

r a given in

stru

ment

, the val

uatio

n of tha

t instr

ume

nt will in

crea

sngly re

ﬂect it

s exp

ecte

d recover

y leve

sumin

g defau

lt. An i

ncrea

se in th

e recover

y ra

te, in is

olato

n, woul

d resul

t in a favou

rable m

ovement in t

he fair va

lue of th

loan

•

Repo c

is the t

erm st

ruct

ure of re

po rate

s on rep

os and reve

rse r

epos at a p

art

icular p

oint in t

ime

•

olatilty

repr

esen

ts an e

stima

te of how mu

ch a par

ticul

ar inst

rum

ent

, parame

ter or in

dex wil

l chang

e in value over t

ime.

nerall

, the h

igher t

he volat

ilt

, the m

ore ex

pens

ive the o

ption w

ill be

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

13. Financa

l instruments

continued

Level 3 moveme

nt tab

les – ﬁn

anc

al as

set

The t

able b

elow anal

yses m

ovemen

ts in Level 3 ﬁn

ancal as

set

s car

ried a

t fair valu

Asset

2021

ld at f

air val

ue t

hro

ugh pr

oﬁt o

r los

Derivatve

ﬁnancal

instruments

$millon

Inv

stment securites

$millon

Loans and

advances

to b

ank

$millon

Loans and

advances

to customers

$millon

Reve

rse

repurchase

agreements

and other

simlar

secured

lending

$millon

Debt

securites

alternative

er on

e and

other

eligble bills

$millon

Equity

$millon

Other

assets

$millon

Debt

securites

alternative

er on

and other

eligble bills

$millon

Equity

$millon

At 1 Jan

uar

y 2021

200

,06

258

279

–

381

,94

ota

l gains/

(

losses

)

rec

ogni

sed in in

come

statement

(

–

(

114

)

Net trading

income

(

30)

–

(

113)

Other operating

income

–

(1)

–

(1)

otal g

ains re

cogn

ised i

other comprehensive

inco

me (

CI)

–

Fair va

lue th

rough

OCI reser

–

ange difference

–

(3)

(2)

(5)

Purchases

281

387

–

6,87

Issues

Sales

–

)

(

(55)

–

(

32)

–

(9)

(5,401)

Settlement

(201)

(302

)

(81)

(

70)

–

(5)

(

13)

–

)

nsfers out

–

(11)

–

)

(149)

nsfers in

–

504

–

At 31 De

cemb

er 2021

357

1,566

186

,11

otal unrealise

d gains

(lo

sses

) rec

ogni

sed in t

income s

tatement, with

net trading inco

me, relating

to ch

ange in f

air valu

of as

set

s he

ld at

31 December 2

021

–

(15)

–

Trans

fer

s out i

ncl

ude l

oan

s and ad

vanc

es, d

ivat

ve ﬁn

anca

l ins

tru

men

ts a

nd eq

uit

y sh

ares w

her

e the v

alua

tio

n para

met

s bec

ame ob

ser

ble d

uri

ng th

rio

d and we

re tr

ans

fer

red t

o Level 1 an

d Level 2

ans

fer

s in pr

imar

ly r

ela

te to lo

ans a

nd ad

vanc

es, d

ebt s

ecu

rit

es

, alte

rna

tiv

e tier o

ne an

d oth

er el

igb

le bil

ls, d

eri

vat

ve ﬁna

nca

l inst

men

ts an

d oth

er as

where the v

aluation parameters become unobservable during the

year

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

The t

able b

elow anal

yses m

ovemen

ts in Level 3 ﬁn

ancal as

set

s car

ried a

t fair valu

Level 3 moveme

nt tab

les – ﬁn

anc

al as

set

continued

Asset

2020

ld at fa

ir val

ue th

rou

gh pro

ﬁt or lo

Derivatve

ﬁnancal

instrument

$millo

Investment

securites

otal

$millo

Loans and

advances

to b

ank

$millo

Loans and

advances

to customers

$millo

Reverse

repurchase

agreements

and other

simlar

secured

lending

$millo

Debt

securites,

alternative

tier one

and other

eligble

bills

$millo

Equi

$millo

Other

assets

$millo

Debt

securites,

alternative

tier one

and other

eligble

bills

$millo

Equi

$millo

At 1 Jan

uar

y 2020

443

–

200

–

257

1,548

ota

l gains/

(

losses

)

rec

ogni

sed in in

come

statement

(

20)

(

–

(6)

–

(

78)

Net trading

income

(15

)

(

–

)

–

(

76)

Other operating

income

–

(2)

–

(

otal g

ains re

cogn

ised i

other comprehensive

inco

me (

CI)

–

Fair va

lue th

rough

OCI reser

–

ange difference

–

(1)

Purchases

540

1,165

203

–

109

,496

Issues

Sales

(

(28

)

(

102)

(

237

)

(

37)

–

(

–

)

Settlement

)

–

)

–

(7)

–

(

nsfers out

–

(

74)

–

(37

)

(1)

–

)

(

nsfers in

519

–

217

136

–

950

At 31 De

cemb

er 2020

718

,06

258

279

–

381

,94

ota

l unrealised (losses

)

gain

s reco

gnis

ed in th

income s

tatement, with

net trading inco

me, relating

to ch

ange in f

air valu

e of

set

s hel

d at 31 De

cemb

2020

–

(6)

–

(

–

(5)

Trans

fer

s out i

ncl

ude l

oan

s and ad

vanc

es, d

ivat

ve ﬁn

anca

l ins

tru

men

, deb

t sec

uri

te

s, alt

ern

ati

ve ti

er on

e and ot

her e

lig

ble bi

lls an

d eq

uit

y sha

res w

her

e the

val

uat

ion p

aram

ete

rs be

cam

e obs

vab

le dur

ing t

he ye

ar and w

ere t

rans

fer

red t

o Level 1 a

nd Leve

l 2. T

ans

fer

s in of $

62 mill

on f

urt

her r

elat

es to e

qui

ty s

har

moved

from held for

sale

ans

fer

s in pr

imar

ly r

ela

te to lo

ans a

nd ad

vanc

es, d

ebt s

ecu

rit

es

, alte

rna

tiv

e tier o

ne an

d oth

er el

igb

le bil

ls, a

nd eq

uit

y sh

ares w

her

e the va

lua

tio

n para

met

become unobservable during the

year

363

Standard Chartered

– A

nnu

al Rep

ort 202

Financal statements

13. Financa

l instruments

continued

Lev

el 3 mov

ent tables – ﬁnancal liablites

2021

Deposit

by ba

nks

$millon

Customer

accounts

$millon

Debt securites

in issue

$millon

Derivatve

ﬁnancal

instruments

$millon

Other

Liablites

$millon

At 1 Jan

uar

y 2021

146

160

119

–

446

otal l

oss

es/

(gain

) reco

gnis

ed in in

come

statement –

net trading i

ncome

(5)

(12)

(

23)

–

(32)

Issues

269

803

166

–

,853

Settlement

(14

(365)

(

181)

–

(

)

nsfers out

–

)

–

nsfers in

–

117

At 31 De

cemb

er 2021

283

454

821

,653

otal u

nrea

lise

d (gains

) r

eco

gnise

d in the

income s

tatement, with

n net trading

inco

me, re

lati

ng to cha

nge in f

air valu

e of

liab

lite

s held a

t 31 Dece

mbe

r 20

–

(

–

(

2020

Deposits

by ba

nks

$millo

Customer

Accounts

$millo

Debt securites

in is

$millo

Derivatve

ﬁnancal

instrument

$millo

Other

Liablites

$millo

otal

$millo

At 1 Jan

uar

y 2020

–

563

otal l

oss

es/

(gain

) reco

gnis

ed in in

come

statement –

net trading i

ncome

(1)

(

–

Issues

136

557

201

–

984

Settlement

(

(575)

(

–

)

nsfers out

–

(

–

(

76)

nsfers in

–

At 31 De

cemb

er 2020

146

160

119

–

446

otal u

nrea

lise

d loss

es re

cogni

sed in t

income s

tatement, with

n net trading

income, r

elating to

change

in fai

r value o

f liabli

tes he

ld at

31 December 2

020

–

Trans

fer

s out d

uri

ng th

e year p

rim

ar

ly re

late t

o deb

t sec

uri

tes i

n iss

ue an

d der

ivat

ve ﬁn

anc

al ins

ume

s whe

re the v

alua

tio

n par

amet

s bec

ame o

bse

able

rin

g the ye

ar an

d were t

ran

sfer

d to Leve

l 2 ﬁnan

cal li

abl

ite

ans

fer

s in du

rin

g the ye

ar pr

ima

rly r

ela

te to d

eri

vat

ve ﬁna

ncal i

nst

ment

, bank d

epo

sit

s and d

ebt s

ecu

rit

es in i

ssu

e wh

ere th

e valu

ati

on pa

rame

ter

s be

com

unobser

ble during the

year

364

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

13. Financa

l instruments

continued

nsit

vit

es i

n res

pec

t of th

e fair valu

es of L

vel 3 as

set

s and l

iabl

ite

Sen

sit

vit

y anal

ysis i

s perf

orme

d on pro

duct

s with s

ignﬁcant u

nobs

vable in

put

s. Th

e Grou

p applie

s a 10 per c

ent incr

ease o

decrease on the v

alues of these unobser

vable i

npu

ts, to generate a

range of reasonably possible alternative

valuations. The

per

centa

ge shif

t is det

ermin

ed by sta

tistc

al analy

sis pe

rfor

med o

n a set of re

feren

ce pric

es bas

ed on t

he comp

osito

n of the

Gro

’s Level 3 inventor

y a

s the me

asur

ement d

ate. Fa

vourabl

e and unf

avour

able cha

nges (

hich sh

ow the bal

ance ad

juste

for in

put ch

ange

) are de

ter

mined o

n the ba

sis of ch

ange

s in the valu

e of the i

nstr

umen

t as a res

ult of var

ing the l

evels of t

uno

bser

vab

le para

meter

s. T

he Level 3 sen

sit

vit

y anal

ysis a

ssum

es a one

-way mar

ket move and do

es not c

onsid

er of

fse

for hedges.

ld at f

air val

ue t

hro

ugh pr

oﬁt o

r los

Fai

r valu

e thr

oug

h oth

er co

mpr

ehe

ive inc

ome

Net e

xposure

$millon

Favourable

changes

$millon

Unfavourable

changes

$millon

Net e

xposure

$millon

Favourable

changes

$millon

Unfavourable

changes

$millon

Financal inst

ruments held at fair value

Loan

s and ad

vance

1,366

328

–

Rev

se repurchase

agreem

ents and

other simlar

secured lending

566

579

1,550

–

Asset

backed s

ecurites

–

Deb

t sec

urit

es, al

ter

nati

ve tier o

ne and

her eli

gble bi

lls

349

366

Equit

186

205

168

493

Other assets

–

Der

ivat

ve ﬁnan

cal ins

tru

ment

(4)

(

–

Customer accounts

)

–

Dep

osit

s by ba

nks

83)

(

278)

(287

)

–

Deb

t sec

urit

es in is

sue

(821)

(

79)

–

Othe

r liablites

(1)

(

–

At 31 De

cemb

er 2021

,93

,09

1,758

533

582

480

Financal inst

ruments held at fair value

Loan

s and ad

vance

918

947

–

Rev

se repurchase

agreem

ents and

other simlar

secured lending

,06

,089

1,0

–

Asset

backed s

ecurites

–

Deb

t sec

urit

es, al

ter

nati

ve tier o

ne and

her eli

gble bi

lls

171

183

Equit

279

Other assets

–

Der

ivat

ve ﬁnan

cal ins

tru

ment

(111)

(

–

Customer accounts

(21)

(

–

Dep

osit

s by ba

nks

(

–

Deb

t sec

urit

es in is

sue

(

)

–

Othe

r liablites

–

At 31 De

cemb

er 2020

2,08

204

421

458

384

The r

easo

nabl

y poss

ible alt

erna

tives c

ould ha

ve incre

ase

d or decr

ease

d the f

air value

s of ﬁnanc

al instr

ume

nts h

eld at f

air

value t

hrou

gh proﬁt or l

oss an

d thos

e clas

sif

ed as f

air value t

hroug

h other c

ompre

hensi

ve incom

e by the am

ount

s disc

lose

ow.

Financal instru

ments

air value

changes

$millon

$millo

Hel

d at fair va

lue th

roug

h proﬁt or l

oss

Pos

sible increase

123

Possible decrease

(

172)

(

147

)

Fair v

alue through other comprehensive

income

Poss

ible increase

Possible decrease

(

37)

365

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

14. Deriv

atve ﬁnancal

instrum

ents

Accounting po

licy

Der

ivat

ves are ﬁna

ncal ins

tru

ment

s that d

eri

ve their val

ue in res

pons

e to chan

ges in in

teres

t rates

, ﬁnanc

al instr

ume

pri

ces, co

mmod

y price

s, for

eign excha

nge rat

es, Cre

dit Ris

k and indc

es. De

rivat

ves are ca

tego

rise

d as tra

ding un

less t

hey

are designat

ed as hedging instr

ument

Der

ivat

ves are int

ially re

cogni

sed an

d subse

quen

tly me

asur

ed at fai

r value, wi

th revalu

ation g

ains re

cognis

ed in pro

ﬁt or

los

s (

except wh

ere cas

hﬂow or net i

nvestme

nt hed

ging ha

s been a

chieved

, in which ca

se th

e effe

ctive p

ort

ion of ch

anges i

fair val

ue is re

cognis

ed wit

hn oth

er comp

rehen

sive inc

ome

)

Fair val

ues ma

y be obt

ained f

rom qu

oted m

arket pr

ices in a

ctive m

arket

s, re

cent mar

ket tran

sact

ions

, and valua

tion

tec

hniqu

es, in

cludn

g discou

nted c

ashﬂow mo

dels a

nd opt

ion pr

icng mod

els

, as appro

pria

te. Whe

re the int

ially re

cogni

sed

fair val

ue of a de

rivat

ve contr

act is ba

sed o

n a valuati

on mod

el tha

t uses in

put

s which a

re not ob

ser

vabl

e in the m

arket

, it

foll

ows the s

ame int

ial reco

gnito

n accoun

ting p

olic

y as for ot

her ﬁn

ancal as

set

s and lia

blites

. All de

rivat

ves are car

rie

d as

set

s when f

air value i

s posi

tve and a

s liablit

es whe

n fair value i

s neg

ative.

Hedge accounting

Und

er cert

ain cond

iton

s, the G

roup m

ay de

signat

e a recog

nise

d asse

t or liabl

, a ﬁrm com

mitm

ent, h

ighly p

robab

forecast transaction

or net in

vestment of a fore

ign operation

into a formal hedge accounting

relationshp with a derivatv

tha

t has be

en ent

ered to m

anag

e intere

st rate a

nd/

r foreig

n exchang

e risk

s pres

ent in t

he hed

ged ite

m. The G

rou

p applie

the ‘

Phas

e 1’ he

dge acco

untin

g requ

ireme

nts o

f IAS 39 Finan

cal Ins

trum

ent

s: Recogn

iton an

d Meas

ureme

nt and th

e ‘Pha

2’ a

mendm

ent

s to IFRS in r

espe

ct of int

erest ra

te ben

chmar

k refor

m. Th

ere are t

hree cat

egor

ies of h

edge r

elati

onshp

•

Fair val

ue hed

ge: to mana

ge the f

air value o

f intere

st rate a

nd/

r forei

gn curre

ncy r

isk

s of rec

ognis

ed as

set

s or liabli

tes or

ﬁrm commitments

•

Cashﬂow hedge

: to manage interest r

ate or fore

ign ex

change risk of highly

probable f

uture c

shﬂ

ows attributable to a

reco

gnis

ed as

set or lia

blit

, or a fo

reca

sted t

ransa

ction

•

Net i

est

ment h

edge: to m

anage t

he str

uct

ural for

eign exchan

ge ri

sk of an invest

ment i

n a foreig

n opera

tion.

The G

roup f

orma

lly do

cument

s at t

he incep

ton of t

he tran

sact

ion the r

elati

onshp b

ween h

edgin

g inst

rume

nts a

hedged items, as well

as it

s risk

management objectv

e and strategy for undertaking hedge transactions. This

is describe

in mo

re deta

il in the ca

tegor

ies of h

edge

s below.

The G

roup a

sse

s, bot

h at hed

ge ince

pton an

d on a quar

ter

ly ba

sis, w

heth

er the d

eriva

tves de

signa

ted in he

dge

rel

ation

shps are h

ighly e

ffe

ctive in o

sett

ing cha

nges in f

air value

s or cashﬂ

ows of he

dged i

tems

. Hedg

es are co

nside

red to

be hi

ghly ef

fect

ive if all t

he foll

owing cr

iter

a are met

•

At ince

pton of t

he he

dge and t

hroug

hout it

s lif

e, the he

dge is p

rospe

ctive

ly exp

ecte

d to be hig

hly ef

fect

ive in achi

evng

ettin

g chang

es in fair val

ue or ca

sh ﬂows at

trib

utabl

e to the h

edge

d risk

•

Actu

al resul

ts of t

he he

dge are w

ithn a ran

ge of 80

–

5%. T

his is te

sted u

sing re

gres

sion ana

lysi

•

The r

egres

sion co

-ef

ﬁcent (R squ

ared), whic

h meas

ures t

he corr

elati

on bet

en the var

iable

s in the re

gres

sion, i

s at

lea

st 80%

•

In th

e case of t

he he

dge of a fo

recas

t trans

actio

n, the t

rans

action m

ust ha

ve a high pro

babilt

y of o

ccur

ring an

d must

pre

sent an ex

posu

re to vari

aton

s in cashﬂow

s that a

re expe

cted t

o affe

ct rep

orte

d proﬁt or l

oss

. The G

roup as

sume

tha

t any intere

st rate b

ench

mark

s on whi

ch hed

ged ite

m cashﬂow

s are ba

sed are n

ot alte

red by IBO

R refor

The G

roup d

iscon

tnues h

edg

e accoun

ting in any o

f the fol

lowing ci

rcums

tances:

•

The h

edgin

g inst

rum

ent is no

t, or h

as cea

sed to b

e, highl

y eff

ecti

ve as a hed

•

The h

edgin

g inst

rum

ent has e

xpire

d, is so

ld, ter

minat

ed, or e

xercise

•

The h

edge

d item m

ature

s, is s

old, or r

epaid

•

The forecast transaction

is no longer deemed highly pr

able

•

The Group elects to discont

edge ac

counting voluntarily

For in

teres

t rate be

nchma

rks d

eeme

d in scop

e of IBO

R refor

m, if th

e actu

al resul

t of a hed

ge is ou

tsi

de the 8

5% range,

but t

he he

dge pa

sses t

he pro

spect

ive as

sess

ment

, the

n the G

roup wi

ll not de

-desi

gnate t

he hed

ge rela

tion

shp.

Und

er the Pha

se 2 Int

erest Rat

e Benc

hmark Re

form am

endm

ent

s to IFRS 9 an

d IAS 39

, th

e Grou

p may ch

ange he

dge

designat

ons and correspondi

ng documenta

tion without

the hedge being di

scontnued

where there is a

change in i

nterest

rate b

ench

mark o

f the he

dged it

em, he

dging i

nstr

ume

nt or des

ignat

ed hed

ged r

isk. Pe

rmit

ted cha

nges in

clude t

he ri

ght to:

•

Redeﬁ

ne the d

escr

ipton o

f the he

dged i

tem and/

or he

dging in

str

umen

•

Redeﬁ

ne the h

edge

d risk t

o refer

ence an alt

ern

ative r

isk

-f

ree ra

•

Chan

ge the m

etho

d for as

ses

sing he

dge ef

fec

tiven

ess du

e to mod

ifc

ation

s requ

ired by IBO

R refor

•

Ele

ct, on a h

edge

-by-hedge b

asis

, to res

et the c

umula

tive fai

r value cha

nges in t

he as

sess

ment o

f retro

spect

ive he

dge

effectivenes

to zero

A hed

ge des

ignat

on may b

e modif

e

d more t

han onc

e, each t

ime a rel

ation

shp is af

fect

ed as a dir

ect res

ult of IBO

R refo

rm.

366

Standard Chartered

– Ann

ual Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

14. Derivat

e ﬁnan

cal inst

rumen

continued

Fair

value

hedge

Changes in the fair value of der

ivatves that are designat

ed and qualif

y as fair value hedging inst

rument

s are recorded in

net t

radin

g income

, toge

ther w

ith any chan

ges in t

he fair val

ue of the h

edg

ed ass

et or lia

blit

y that a

re attr

ibut

able to t

hed

ged r

isk

. If the he

dge no l

onge

r meet

s the c

rite

ra for h

edge a

ccount

ing, t

he adju

stme

nt to the c

arr

ng amou

nt of a

hed

ged it

em for w

hich the e

ffe

ctive in

teres

t meth

od is us

ed is am

ort

ised t

o the inc

ome sta

teme

nt over the r

emainn

g term

to ma

turi

ty o

f the he

dge

d item. I

f the he

dged i

tem is so

ld or rep

aid, t

he unam

ort

ised f

air value a

djust

ment is r

ecogn

ised

imm

edate

ly in th

e income s

tatem

ent

. For ﬁnan

cal ass

s clas

sif

ed as f

air value t

hrough o

ther c

ompre

hensi

ve incom

the hedge accounting

adjustment attributable to the hedged risk is included i

n net trading income

to match the

dging d

eri

vatve.

Cashﬂow hedge

The e

ffe

ctive p

ort

ion of ch

anges in t

he fair val

ue of de

rivat

ves tha

t are des

ignate

d and qu

alif

y as ca

shﬂow he

dging

ins

tru

ment

s are int

ially re

cogni

sed in ot

her co

mpreh

ensi

ve income

, accumu

latin

g in the ca

shﬂow he

dge res

ve wit

hn

equ

. The

se amo

unt

s are sub

sequ

entl

y rec

ycled to t

he inco

me stat

ement i

n the pe

riod

s when t

he he

dged it

em af

fect

proﬁt o

r loss

. Bot

h the de

rivat

ve fair valu

e moveme

nt and any re

cycle

d amou

nt are re

corded i

n the ‘C

ashﬂow h

edge

s’ line

item in other c

omprehensive income.

The G

roup a

sse

s hedg

e effe

ctive

ness u

sing t

he hypot

het

ical der

ivatve m

etho

d, whi

ch creat

es a der

ivat

ve instr

ume

nt to

ser

ve a

s a prox

y for th

e hedg

ed tran

sact

ion. T

he ter

ms of th

e hypot

heti

cal der

ivatve m

atch th

e critc

al term

s of th

e hedg

item a

nd it ha

s a fair value o

f zero at inc

epton

. The hyp

oth

etical d

eriva

tve and t

he actu

al der

ivatve a

re regre

sse

d to

est

ablish t

he sta

tist

cal signﬁcan

ce of th

e hedg

e relat

ionsh

p. Any inef

fect

ve por

tion o

f the gain o

r los

s on the he

dgin

ins

tru

ment is r

ecogn

ised in t

he net t

radin

g income i

mmed

ately.

If a cas

h ﬂow hed

ge is dis

contn

ued, t

he amou

nt accum

ulat

ed in the c

ashﬂow h

edge re

ser

ve is r

elea

sed to t

he inco

sta

temen

t as and w

hen th

e hedg

ed item a

ffe

cts t

he incom

e stat

ement

For in

teres

t rate be

nchma

rks d

eeme

d in scop

e of IBO

R refor

m, th

e Grou

p will ret

ain the c

umula

tive gai

n or los

s in the

cash

ﬂow hed

ge rese

ve for des

ignat

ed cash

ﬂow hed

ges even th

ough t

here is u

ncer

taint

y ar

isng f

rom the

se ref

orms w

ith

res

pect to t

he timn

g and amo

unt of t

he cash

ﬂows of th

e hedg

ed ite

ms. S

hould t

he Gr

oup con

sider t

he hed

ged f

utu

cash

ﬂows are n

o longe

r expe

cted to o

ccur du

e to rea

sons o

ther t

han IBO

R refor

m, th

e cumul

ative ga

in or los

s will b

imm

edate

ly rec

lass

if

ed to pro

ﬁt or los

Net in

vestment

hedge

dges of n

et invest

ment

s are acc

ounte

d for in a si

mlar man

ner to ca

shﬂow he

dges

, with g

ains an

d loss

es ari

sng on th

fect

ive por

tion o

f the he

dges r

ecord

ed in the l

ine ‘E

xchan

ge dif

feren

ces on t

ransl

ation o

f foreig

n opera

tion

s’ in othe

comp

rehen

sive in

come, ac

cumul

ating in t

he tra

nslat

ion res

ve wit

hn equi

ty. Thes

e amoun

ts re

main in eq

uit

y unt

il the ne

invest

ment is d

ispo

sed of. The ine

ffe

ctve po

rtio

n of the h

edge

s is reco

gnis

ed in the n

et tra

ding inc

ome imm

edate

The tables

below analyse the

notional princ

pal amounts and the posi

tve and nega

tive fa

ir values

of deriva

tve

ﬁnancal

ins

tru

ment

s. No

tion

al prin

cpal amo

unt

s are the a

moun

ts of p

rincp

al unde

rly

ing the c

ontra

ct at the r

epor

ting d

ate.

Deriv

atves

2021

2020

Notional

princpal

amounts

$millon

Assets

$millon

Liablites

$millon

Notional

princpal

amount

$millo

Asset

$millo

Liablites

$millo

Foreign e

xchange deriv

atve contracts:

For

ward foreign ex

change contract

,750,

151

30,

0,068

,01

8,8

9,1

Cur

renc

y swa

ps and o

ptio

,412

055

,49

11,

659

1,423,520

,162

41,

4,442,386

Interest rate deriv

v

e contract

Swap

3,609

,625

490

31,078

3,165,532

,755

For

ard ra

te agreements and opti

ons

127

287

,32

,859

606

,357

1,350

Exchange traded futures and

opt

ions

5,1

156

61,

184

33,06

,033,

261

4,338

Credit deriv

atve

contracts

953

289

3,1

0,437

702

Equity and stock

index options

714

136

160

,018

110

Commodit

der

iva

tve c

ontract

113,80

,896

Gross total de

rivatves

111,979

114

,045

Off

set

–

(26

98)

598)

–

)

Net total

derivatves

53,

71,

533

The G

roup l

imts e

xpos

ure to cre

dit los

ses in t

he event o

f defau

lt by ente

ring in

to mast

er net

ting a

greem

ent

s with ce

rtain

mar

ket count

erp

arti

es. A

s requi

red by IA

S 32, exp

osure

s are onl

y pres

ented n

et in th

ese acco

unt

s whe

re they are s

ubjec

t to

leg

al righ

t of of

fse

t and int

ende

d to be se

ttle

d net in th

e ordin

y cour

se of b

usine

ss.

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

14. Derivat

e ﬁnan

cal inst

rumen

continued

The G

roup a

pplies b

alan

ce shee

t off

set

ting o

nly in th

e inst

ance wh

ere we are ab

le to dem

onst

rate le

gal enf

orceab

ilt

y of the

rig

ht to of

et (

e.g. via l

egal op

inon

) an

d the abilt

y an

d inten

ton to s

ettl

e on a net b

asis (

e.g. v

ia ope

ratio

nal prac

tice

The G

roup m

ay ent

er into e

conom

ic hed

ges th

at do not q

ualif

y f

or IAS 39 h

edge a

ccount

ing tr

eatm

ent, i

ncludn

g der

ivatve

suc

h as inte

rest rat

e swaps

, inte

rest rat

e fut

ures a

nd cros

s-curr

enc

y swaps t

o manag

e intere

st rate a

nd cur

renc

y risk

s of th

Gro

up. The

se der

ivat

ves are me

asure

d at fair val

ue, wit

h fair valu

e chang

es reco

gnis

ed in net t

radin

g income: re

fer to M

arket

Risk (page

5).

The D

eri

vatves an

d Hedg

ing se

ction

s of the Ri

sk review a

nd Capi

tal revi

ew (page 2

) e

xplai

n the Gr

oup

’s risk m

anage

ment o

derivatve c

ontract

s a

nd applic

aton of

dging.

Deriv

v

es held for hedging

The G

roup e

nter

s into d

eriva

tve cont

ract

s for th

e pur

pose o

f hedgi

ng inte

rest rat

e, curr

enc

y and str

uct

ural for

eign excha

nge

sks in

heren

t in ass

ets

, liabli

tes and f

oreca

st tran

sact

ions

. The tab

le bel

ow summa

rise

s the no

tion

al prin

cpal amo

unt

s and

carr

ying v

alues of derivatves desig

ated i

n hedge accounting relationshps

at the reporting date.

Incl

uded i

n the tab

le above ar

e deri

vatves h

eld for h

edgin

g pur

pose

s as foll

ows:

2021

2020

Notional

princpal

amounts

$millon

Assets

$millon

Liablites

$millon

Notional

princpal

amount

$millo

Asset

$millo

Liablites

$millo

Deriv

atves designated as

fair value

hedges:

Interest

rate swa

8,666

957

338

,846

1,50

712

Currency swaps

151

,13

179

0,9

000

489

,52

891

Deriv

atves designated as

ﬂow

hedges:

Interest

rate swa

10,

129

For

ward foreign ex

change contract

–

164

–

Currency swaps

12,

214

340

355

116

469

Deriv

atves designated as

inve

ent

For

ward foreign ex

change contract

,19

–

383

ota

l derivatves

held for

hedging

6,79

1,4

693

1,64

Fair

value

hedges

The G

roup i

ssue

s vario

us long-

term ﬁ

xed-rate de

bt iss

uance

s that ar

e meas

ured at a

mort

ise

d cost

, inclu

dng som

den

omina

ted in fo

reign cu

rrenc

, su

ch as un

secur

ed sen

ior and su

bordi

nate

d debt (

ee Not

es 2

2 and 27

). The Gro

up als

o hold

vari

ous ﬁxed-r

ate deb

t secur

ites s

uch as g

overnme

nt and co

rpor

ate bo

nds, i

ncludn

g some d

enom

inate

d in forei

gn curr

enc

(

e Note 13)

. The

se as

set

s and liab

lites h

eld are ex

pos

ed to cha

nges in f

air value d

ue to movem

ent

s in mar

ket inter

est and

foreign currenc

y rates.

The G

roup u

ses in

teres

t rate swa

ps to excha

nge ﬁxed r

ates fo

r ﬂoati

ng rate

s on fu

nding t

o match ﬂo

atin

g rates r

eceive

d on

set

s, or exch

ange ﬁxe

d rates o

n ass

ets t

o match ﬂ

oatin

g rates p

aid on f

undi

ng. The G

roup f

ther u

ses cro

ss-cur

renc

y swap

to ma

tch the c

urre

ncy of t

he is

sued d

ebt or he

ld as

set wit

h that o

f the en

tit

y’s fun

ction

al curr

enc

Hedge ineffectveness from fair

value hedges is driven b

y cross currency basis risk. The amortisaton of fair

value hedge

adjustments for hedged items no longer

sig

nated is recognised i

n net trading income.

In fut

ure

eriods, hedge relationsh

linked t

o an inte

rest rat

e benc

hmar

k deem

ed in sco

pe of be

nchma

rk refo

rm ma

y expe

rien

ce inef

fect

venes

s due to m

arket

par

ticp

ants’ e

xpec

tatio

ns for w

hen th

e chang

e from t

he exis

tng IBO

R ben

chmar

k to an alte

rnat

ive ris

-fr

ee rate w

ill occ

sinc

e the tr

ansit

on may o

ccur at dif

fer

ent tim

es for t

he hed

ged ite

m and he

dging in

str

umen

At 31 De

cembe

r 20

1 the G

roup h

eld the f

ollowi

ng inte

rest rat

e and cro

ss-cur

renc

y swap

s as hed

ging in

stru

ment

s in fai

r value

hedges of interest

and currenc

isk.

368

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

14. Derivat

e ﬁnan

cal inst

rumen

continued

Fair val

ue hed

ges

continued

Hedging ins

trument

s and ineffectvene

Interest

rate

2021

Notional

$millon

Carrying amount

Cha

nge in f

air

valu

e us

ed to

calculate hedge

ineffectveness

$millon

Ineffectiveness

recognised in

proﬁt or l

oss

$millon

Asset

$millon

Liablity

$millon

Interest

rate swa

ps – issued notes

5,31

575

212

(89

(9)

Int

eres

t rate s

waps – lo

ans and a

dvan

ces

,079

–

Interest

rate swa

ps – debt securit

es and other

eligble bills

41,

363

717

(1)

Interest

and currenc

y ris

Cross-c

rency sw

aps –

subordinated notes issued

–

150

(

139)

Cross-c

rency sw

aps –

debt securites and

other

eligble bills

793

–

al at 31 De

cem

ber 202

0,9

000

489

(4)

Interest

rate

2020

Notional

$millo

Carr

ying amount

Change in fair

val

ue us

ed to

calculate

hedge

ineffectveness

$millo

Ineffectiveness

recogni

sed in

pro

ﬁt or l

oss

$millo

Asset

$millo

Liablit

$millo

Interest

rate swa

ps – issued notes

,47

858

Int

eres

t rate s

waps – lo

ans and a

dvan

ces

2,535

(27

)

–

Interest

rate swa

ps – debt securit

es and other

eligble bills

,713

660

(

Interest

and currency

risk

Cross-c

rency sw

aps –

subordinated notes issued

,32

Cross-c

rency sw

aps –

debt securites and

other

eligble bills

807

(

otal a

t 31 Dec

embe

r 20

525

891

Int

ere

st ra

te swa

ps ar

e desi

gna

ted i

n hed

ges o

f the f

air val

ue of i

nter

est r

ate r

isk a

ttr

ibu

tabl

e to th

e hed

d item

. Cro

ss-c

urr

enc

y swa

ps are u

d to he

dge b

oth

int

ere

st ra

te and c

urr

enc

y ri

sks

. All t

he he

dgi

ng in

str

ume

s are de

riv

atv

es, w

ith c

hang

es in f

air va

lue in

clu

dng h

edg

e ine

ffe

ct

vene

ss re

cor

ded w

ith

n net t

radi

income

dged i

tem

s in fai

r v

lue he

dge

2021

Carrying amount

Acc

umu

lat

ed am

oun

t of fa

ir valu

dge a

dju

stm

ent

s in

clu

ded i

n the

carrying amount

Change in

the

valu

e us

ed fo

calculating

hedge

ineffectveness

$millon

Cumulative

balance of

fair value

adjustment

from

de-designated

hedge

relationshps¹

$millon

Asset

$millon

Liablity

$millon

Asset

$millon

Liablity

$millon

Issued notes

–

35,206

–

,029

Deb

t sec

urit

es and o

ther e

ligbl

e bills

41,637

–

(

–

(

)

(19)

Loan

s and ad

vance

s to cust

ome

,072

–

(7)

–

(

(1)

al at 31 De

cem

ber 202

709

35,206

(

70)

2020

Carr

ying

Amount

Accumulated

amount of fair v

alue

hedge adjustments included in the

carr

ying amount

Change in fair

value used

calculating

hedge

ineffectveness

$millo

Cumulative

balance of

fair value

adjustments

from

de-designated

hedge

relationshps

$millo

Asset

$millo

Liablit

$millo

Asset

$millo

Liablit

$millo

Issued notes

–

737

–

,096

03)

856

Deb

t sec

urit

es and o

ther e

ligbl

e bills

40,663

–

,00

Loan

s and ad

vance

s to cust

ome

2,56

–

otal a

t 31 Dec

embe

r 20

609

1,0

(

71)

his r

epre

sen

ts a c

red

it/(

deb

it) to th

e bal

ance s

hee

t valu

369

Standard Chartered

– A

nnu

al Rep

ort 202

Financal statements

14. Derivat

e ﬁnan

cal inst

rumen

continued

Income statement impact of

fair v

alue hedges

2021

$millon

2020

$millo

me/

(

expense

)

Cha

nge in fa

ir value o

f hed

ging in

str

umen

(

50)

Cha

nge in fa

ir value o

f hed

ged ri

sks a

ttr

ibut

able t

o hedg

ed ite

246

Net ineffectveness (

los

)

gain

to net trading i

come

(4)

Amortisaton gain

(loss

) to net

interest income

Cashﬂow hedges

The G

roup h

as exp

osur

e to marke

t movemen

ts in f

utu

re inte

rest ca

shﬂows on p

ort

folio

s of cust

omer ac

count

s, d

ebt se

curit

es

and lo

ans an

d advanc

es to cus

tomer

s. T

he amou

nts a

nd timn

g of fu

ture ca

shﬂows

, repr

esent

ing bo

th pri

ncpal an

d inter

est

ﬂows

, are proj

ecte

d on the b

asis o

f contra

ctual t

erm

s and oth

er releva

nt facto

, inclu

dng est

imate

s of prep

aym

ent

and defaults.

The h

edgin

g strat

egy o

f the G

roup invol

ves usin

g intere

st rate s

waps to m

anage t

he vari

ablit

y in f

utur

e cashﬂow

s on as

set

and li

ablite

s that ha

ve ﬂoat

ing rat

es of int

erest by exch

angin

g the ﬂoa

ting ra

tes for ﬁ

xed rate

s. It al

so use

s foreig

n exchang

cont

ract

s and cur

renc

y swap

s to man

age the va

riabli

ty i

n fut

ure excha

nge rat

es on it

s ass

s and liabl

ites an

d cost

s in

for

eign cur

rencie

s. Thi

s is don

e on bot

h a micro b

asis

, wher

eby a singl

e intere

st rate o

r cross-

curre

ncy s

wap is de

signat

ed in

a sep

arate r

elati

onshp w

ith a sin

gle he

dged it

em (

suc

h as a ﬂoat

ing rat

e loan to a c

ustom

), and on a po

rtfo

lio ba

sis,

whe

reby ea

ch hedg

ing ins

tru

ment is d

esign

ated ag

ainst a g

roup of h

edge

d item

s that sh

are the s

ame r

isk (

ch as a grou

of customer ac

count

)

The h

edge

d ris

k is dete

rmin

ed as th

e variabl

y of fu

ture ca

shﬂows a

risng f

rom ch

anges i

n the de

signat

ed ben

chmar

interest rate.

Hedging instruments and

ineffectveness

2021

Notional

$millon

Carrying amount

ang

e in fa

valu

e us

ed to

calculate

hedge

ineffectveness

$millon

Gain

recognised

in O

$millon

Ineffectiveness

gain/

(loss

)

recognised in

net trading

income

$millon

Amount

reclassifed

from

reserves

income

$millon

Asset

$millon

Liablity

$millon

Interest

rate risk

Interest

rate swa

10,

–

Currency risk

For

ward foreign ex

change contract

–

Cross-c

rency sw

aps

,214

293

297

–

al as at 3

1 Dece

mbe

r 2021

667

355

125

–

2020

Notional

$millo

Carr

ying amount

Change in fair

val

ue us

ed to

calculate

hedge

ineffectveness

$millo

(Loss

)

/gain

recogni

sed

in O

$millo

Ineffectiveness

gain/

(loss

)

recogni

sed in

net trading

income

$millo

Amount

reclassif

ed

from

reser

ves

income

$millo

Asset

$millo

Liablit

$millo

Interest

rate risk

Interest

rate swa

129

)

–

Currency risk

For

ward foreign ex

change contract

164

–

Cross-c

rency sw

aps

9,9

340

(

61)

(

261

)

–

otal a

s at 31 De

cemb

er 2020

92)

–

370

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

14. Derivat

e ﬁnan

cal inst

rumen

continued

Hedged items in cashﬂo

w hedges

2021

ang

e in fa

valu

e us

ed fo

calculating

hedge

ineffectveness

$millon

Cashﬂow

hedge reserve

$millon

Cumulative

lanc

e in t

cash ﬂow

hedge

reserve

from

de-designated

hedge

relationshps

$millon

Customer accounts

(95)

(

(4)

Deb

t sec

urit

es and o

ther e

ligbl

e bills

(231)

–

Loan

s and ad

vance

s to cust

ome

(8)

Forecast cas

hﬂow

rrency he

dge

–

Intragroup lending

currenc

y hedge

(73)

–

Intragroup bo

rrowing currenc

y hedge

–

otal a

t 31 Dec

embe

r 20

(

)

(17

)

(

2020

Change in fair

value used

calculating

hedge

ineffectveness

$millo

Cas

hﬂow

hedge reserve

$millo

Cumulative

balance in the

cash ﬂo

w hedge

reser

rom

de-designated

hedge

relationshps

$millo

Customer accounts

105

(

(8)

Deb

t sec

urit

es and o

ther e

ligbl

e bills

–

Loan

s and ad

vance

s to cust

ome

)

Forecast cas

hﬂow

rrency he

dge

(

–

Intragroup lending

currenc

y hedge

169

–

Intragroup bo

rrowing currenc

y hedge

(15)

–

otal a

t 31 Dec

embe

r 20

292

(

32)

(7)

Impact of cashﬂo

w hedges on proﬁt and loss and

her c

omprehensive income

2021

$millon

2020

me/

(

expense

)

$millo

shﬂow he

dge re

ser

ve b

alanc

e as at 1 Ja

nuar

(52)

(

59)

Los

s reco

gnise

d in ot

her com

preh

ensi

ve inco

me on ef

fec

tive p

orti

on of ch

ange

s in fair val

ue of he

dgin

instrument

(1)

in recl

ass

ed to in

come s

tate

ment w

hen he

dge

d item af

cted n

et proﬁt

axation (

arge

)

credit relating to cashﬂow hedges

(2)

shﬂow he

dge re

ser

ve b

alanc

e at 31 De

cemb

(

Net in

vestment

hedges

Fore

ign curr

enc

y expo

sures a

rise f

rom inves

tment

s in su

bsidar

ies th

at have a d

iffe

rent f

uncti

onal cu

rren

cy fr

om that o

f the

pre

senta

tion cu

rren

cy of t

he Gro

up. This r

isk ar

ises f

rom th

e ﬂuctu

atio

n in spot e

xchange r

ates be

ween th

e fun

ction

al curr

enc

of th

e subs

idarie

s and th

e Grou

’

s pr

esen

tatio

n curre

ncy, which cau

ses th

e value of t

he invest

ment t

o var

The G

roup’

s po

licy i

s to hed

ge the

se exp

osure

s only w

hen no

t doing s

o would b

e expe

cted to h

ave a signﬁc

ant imp

act on th

reg

ulato

y ratio

s of the G

roup a

nd it

s bank

ing sub

sidari

es. T

he Gro

up use

s foreig

n exchange f

wards t

o mana

ge the ef

ct of

exchan

ge rate

s on it

s net inves

tment

s in fo

reign su

bsidar

ies

371

Standard Chartered

– Ann

ual Rep

t 2021

Financal statements

14. Derivat

e ﬁnan

cal inst

rumen

continued

Hedging instruments and

ineffectveness

2021

Notional

$millon

Carrying amount

ang

e in fa

valu

e us

ed to

calculate

hedge

ineffectveness

$millon

Changes in

e valu

e of

the hedging

instrument

recognised

in O

$millon

Ineffectiveness

recognised in

proﬁt or l

oss

$millon

Amount

reclassifed

from res

erves

to income

$millon

Asset

$millon

Liablity

$millon

Der

ivat

ve for

rd curr

enc

y cont

ract

116

–

2020

Notional

$millo

Carr

ying amount

Change in fair

val

ue us

ed to

calculate

hedge

ineffectveness

$millo

Changes

e valu

e of

the hedging

instrument

recogni

sed

in O

$millo

Ineffectiveness

recogni

sed in

pro

ﬁt or l

oss

$millo

Amount

reclassif

ed

from reserves

to income

$millo

Asset

$millo

Liablit

$millo

Der

ivat

ve for

rd curr

enc

y cont

ract

–

383

(286

)

(286)

–

hes

e der

iva

tve f

ward c

urr

enc

y con

tra

cts h

ave a m

atu

rit

y of l

ess t

han o

ne ye

ar. The he

dge

s are r

olle

d on a pe

rio

dc b

asi

dged i

tem

s in net i

stm

ent h

edge

2021

Change in

the

valu

e us

ed fo

calculating

hedge

ineffectveness

$millon

ranslation

rve

$millon

Balances

remainng in the

translation

reserve

from

hedging

relationshps for

which hedge

accounting is no

longer applied

$millon

Net inv

est

ments

–

2020

Change

in the

value used

calculating

hedge

ineffectveness

$millo

ranslation

res

$millo

Balances

remainng in the

translation

reser

rom

hedging

relationshps

for

which hedge

accounting is

longer applied

$millo

Net inv

est

ments

286

(

–

Impact of net

inv

estm

ent

dges on

her c

omprehensive income

2021

$millon

2020

me/

(

expense

)

$millo

Gains/

(losses

)

cognised

in other comprehensive

income

118

(287

)

372

Standard

Charter

– A

nnu

al Repo

rt 202

Financal state

ments

Notes to the

ﬁnancal

statement

14. Derivat

e ﬁnan

cal inst

rumen

continued

Maturity of hedging instrument

Fair

value hedges

2021

Less than

one month

re th

one month

d les

s th

e year

One to

ﬁve

years

re th

ﬁve ye

Interest

rate sw

Notional

$mill

186

18,

919

Average ﬁ

xed int

eres

t rate

USD

0.7

.05%

43%

EUR

–

0.1

(0.1

(

0.1

1)%

Cross-

currency sw

Notional

$mill

,492

722

–

Average ﬁ

xed int

eres

t rate (

to US

)

–

.29%

–

KRO

–

0.09

–

era

ge ex

ange rate

EUR/USD

–

0.80

–

Cashﬂow hedges

Interest

rate sw

Notional

$mill

–

4,44

4,750

Average ﬁ

xed int

eres

t rate

HKD

–

41%

–

USD

–

0.08%

29%

Cross-

currency sw

Notional

$mill

0,2

–

Average ﬁ

xed int

eres

t rate

HKD

–

73%

–

KRO

–

.09%

–

JPY

–

(0.1

–

(0.

3)%

33)

–

era

ge ex

ange rate

–

/USD

.85

–

Forward foreign

exchange contracts

Notional

$mill

–

era

ge ex

ange rate

/USD

–

8.1

–

Net in

vestment

hedges

Foreign e

xchange deriv

atves

Notional

$mill

234

–

era

ge ex

ange rate

CNY¹

/USD

.57

–

¹/

.10

–

/USD

–

Off

shore

currency

373

Standard Chartered

– Ann

ual Rep

t 2021

Financal statements

14. Derivat

e ﬁnan

cal inst

rumen

continued

Maturity of hedging instrument

continued

Fair

value hedges

2020

Less tha

one month

More tha

one month

and less

than

e year

e to

ﬁve year

More tha

ﬁve year

Interest

rate sw

Notional

$mill

334

13,836

Average ﬁ

xed int

eres

t rate

USD

.28%

.47

EUR

–

1.86

.49

1.72%

Cross-

currency sw

Notional

$mill

1,384

–

Average ﬁ

xed int

eres

t rate (

to US

)

25%

1.63%

3.43%

–

JPY

(0.

2)%

–

era

ge ex

ange rate

EUR/USD

0.7

–

9.9

–

Cashﬂow hedges

Interest

rate sw

Notional

$millon

–

3,42

4,686

233

Average ﬁ

xed int

eres

t rate

HKD

–

62%

–

USD

–

1.80%

.32

Cross-

currency sw

Notional

$millon

–

,08

Average ﬁ

xed int

eres

t rate

HKD

–

.15

–

KRO

–

0.79

–

WD¹

–

JPY

–

era

ge ex

ange rate

–

4.75

–

WD¹

/USD

–

Forward foreign

exchange contracts

Notional

$millon

–

era

ge ex

ange rate

0.8

–

Net in

vestment

hedges

Foreign e

xchange deriv

atves

Notional

$mill

–

era

ge ex

ange rate

CNY¹

/USD

–

¹/

–

WD¹

/USD

28.8

–

Off

shore

currency

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

14. Derivat

e ﬁnan

cal inst

rumen

continued

Interest

rate benchmar

k reform

The G

roup a

pplies t

he Pha

se 1 Inte

rest Rate B

ench

mark Ref

orm Am

endme

nts t

o IFRS 9

, IA

S 39 and IFRS 7 w

hich allow t

he Gr

oup

to as

sume t

hat th

e inter

est rat

e bench

mark o

n which ca

shﬂows f

or the h

edge

d item an

or h

edgin

g inst

rum

ent are b

ased i

are alt

ered a

s a resul

t of IBOR r

efor

m for the f

ollowi

ng acti

vtie

•

Prospective hedge

assessment

•

Det

ermi

nng whe

ther a ca

sh ﬂow or fo

reca

st tran

sacti

on for a ca

shﬂow he

dge is hig

hly pro

bable

. However

, t

he Gro

oth

wis

e ass

ess

es whe

ther t

he cashﬂ

ows are con

sider

ed high

ly prob

able

•

Determinng when c

umulati

e balances i

n the cashﬂow hedge

reser

from de-designated hedges should be

recycled to the

income statement

The G

roup w

ill not d

e-de

signat

e a hedg

e relat

ions

hp of a ben

chmar

k in scop

e of IBO

R refor

m if the re

tros

pect

ive hed

ge resu

is ou

tsi

de the r

equire

d 80-125% rang

e but

, the he

dge pa

sse

s the pro

spec

tive as

ses

sment

. Any he

dge ine

ffe

ctven

ess con

tinu

to be r

ecord

ed in ne

t tradin

g incom

For he

dges o

f non-c

ontra

ctuall

y spe

cif

ed ben

chmar

k por

tion

s of an int

erest ra

te (

suc

h as fair val

ue hed

ges of in

teres

t rate r

isk

on ﬁxe

d rate deb

t inst

rum

ent

) the Gr

oup onl

y ass

ess

es whe

ther t

he desi

gnate

d benc

hmar

k is sep

aratel

y ident

ﬁable at h

edge

ince

pton

. The cho

ice of de

signat

ed be

nchma

rk is no

t revist

ed for ex

istn

g hedg

e relat

ions

hps.

In app

lyin

g thes

e amend

ment

s, t

he Gro

up has m

ade th

e follow

ing key ass

umpti

ons fo

r the pe

riod e

nd, to b

e reviewe

d on an

ongoing basis:

•

the i

ntere

st rate b

enchm

ark

s applic

able to t

he Gro

up tha

t are in sco

pe of th

e IFRS ame

ndmen

ts are a

ll LIBOR

s, EONI

Sing

apor

e S

p Off

er Rate (SGD SO

) an

d Thai B

aht Inte

rest Rate Fi

xng (

THB FIX)

•

EURIB

OR is no

t in scop

e of the IF

RS amen

dment

s be

cause i

ts rev

ised m

etho

dolo

gy inc

orpo

rates m

arket t

ransa

ction da

ta,

hen

ce the b

enchm

ark is ex

pect

ed to co

ntinu

e to exis

t in fut

ure re

por

ting pe

riod

The G

roup a

ssu

mes th

at the un

cert

aint

y ari

sng fr

om USD LIBO

R will b

e prese

nt unti

l 30 Jun

e 20

3, at w

hich ti

me the

amendments to IFRS no longer apply

As a

t 31 Dece

mber 2021

, the fol

lowing n

otio

nal pri

ncpal am

ount

s of de

rivat

ve inst

rum

ent

s desig

nated i

n fair valu

e or cash ﬂow

hedge accounting relat

ionshps were

linked to IBOR reference rates:

Fair v

alu

hedges

$millon

Cashﬂow

hedges

$millon

eighted

average

exposure

Interest

rate sw

aps

USD LIBOR

615

,636

3.6

P LIBOR

1,444

–

1,444

0.1

JPY L

IBO

637

–

637

D SOR

–

8,696

,636

332

Cross-

currency sw

aps

USD LI

BOR vs ﬁ

xed rate f

orei

gn curr

enc

262

3,681

,94

al not

iona

l of he

dgin

g ins

tru

men

ts in s

cope o

f IFRS am

end

men

as a

t 31 Dec

embe

r 2021

0,9

3.2

375

Standard Chartered

– Ann

ual Rep

t 2021

Financal statements

14. Derivat

e ﬁnan

cal inst

rumen

continued

Fair value

hedges

$millo

Cas

hﬂow

hedges

$millo

otal

$millo

eighted

average

exposure

Interest

rate sw

aps

USD LIBOR

478

,07

48,556

3.2

P LIBOR

,98

,07

JPY L

IBO

337

–

337

D SOR

483

–

1.2

50,

286

,16

53,453

3.5

Cross-

currency sw

aps

USD LI

BOR vs ﬁ

xed rate f

orei

gn curr

enc

,13

–

,13

1.3

otal n

otio

nal of h

edgi

ng ins

tru

ment

s in sc

ope of I

FRS ame

ndme

nts

as at 3

1 Dece

mber 2020

,42

3.4

The G

roup’

s pr

imar

y ex

posur

e is to USD LI

BOR due t

o the ext

ent of ﬁ

xed rate de

bt sec

urit

y as

set

s and i

ssue

d note

den

omina

ted in USD t

hat are d

esign

ated in f

air value h

edge r

elati

onshp

s. Whe

re ﬁxed rat

e inst

rum

ent

s are in oth

er cur

rencie

cros

s-cur

renc

y swaps a

re use

d to achieve an e

quiva

lent ﬂo

ating U

SD expo

sure.

xpo

sures in G

BP LIB

OR and JPY LIB

OR are sh

ort

-d

ated b

asis s

waps cre

ated p

er the LCH’s meth

odol

ogy fo

r convert

ing

der

ivat

ves to alte

rnat

ive ben

chmar

k rate

s. Und

er this m

etho

dolo

, if an i

ntere

st rate s

wap refe

rencin

g eithe

r of the

ben

chmar

ks wo

uld ha

ve had a ﬁxn

g bet

wee

n its co

nversi

on date a

nd 31 Dec

embe

r 20

1, the o

rigna

l swap is re

place

d with a

RFR s

wap of the s

ame mat

urit

y an

d a LIBOR ve

rsu

s RFR bas

is swap th

at mat

ures at t

he end o

f the la

st LIBO

R ﬁxng p

erio

d set

bef

ore 31 De

cemb

er 2021. Thi

s repla

cemen

t is tre

ated a

s contin

uato

n of the or

ignal L

IBOR s

wap as the n

ew boo

king

s do not

alte

r or amen

d the le

gal ri

ghts a

nd obli

gaton

s unde

r the or

ignal de

rivat

ve. The G

roup h

as appl

ied th

e Phase 2 am

endm

ent

to IA

S 39 to red

eﬁne th

e desc

ripto

n of the h

edgin

g inst

rum

ent and h

edge

d risk t

o refer

ence th

e alter

nati

ve benc

hmark r

ate in

order to c

ont

inue

the

se hedge

relationshps.

15. Lo

ans and advances t

o banks and c

ustom

ers

Accounting po

licy

Refer t

o Note 13 Fin

ancal ins

tru

ment

s for t

he releva

nt accou

nting p

olic

2021

$millon

2020

$millo

Loan

s and ad

vance

s to ban

410

44,364

Expected cr

edit

loss

(27)

44,

383

44,34

Loan

s and ad

vance

s to cust

ome

304,122

288

,312

Expected cr

edit

loss

(

298,468

281,6

otal l

oans a

nd adva

nces t

o bank

s and cu

stom

ers

42,

326

,04

The G

roup h

as out

anding r

eside

ntal mo

rtg

age loa

ns to Korea r

eside

nts o

f $21.

7 billon (31 D

ecemb

er 2020: $22

1 bill

) and

Hon

g K

ong r

eside

nts o

f $3

4.5 bi

llon (31 De

cemb

er 202

0: $

32 billon

Ana

lysi

s of loan

s and ad

vances to c

ustom

ers by g

eogra

phic reg

ion and c

lient se

gmen

t toget

her w

ith the

ir relat

ed imp

arme

prov

isons a

re set ou

t withn t

he Ris

k review an

d Capit

al review (p

ages 2

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

16. R

erse repurchase and repurchase agreements includng other sim

lar l

ending and

borrowing

Accounting po

licy

The G

roup p

urcha

ses s

ecur

ites (

a rever

se re

purch

ase agr

eeme

nt – ‘reverse r

epo’

) ty

picall

y with ﬁn

ancal in

sttu

tion

s subje

to a com

mitm

ent to re

sell or re

tur

n the se

curi

tes at a pr

edet

ermin

ed pr

ice. The

se sec

urit

es are no

t inclu

ded in th

e bala

nce

she

et as th

e Gro

up doe

s not acq

uire the r

isk

s and rewar

ds of own

ers

hip, however th

ey are reco

rded o

-ba

lance sh

eet a

coll

ateral r

eceive

d. Con

side

raton p

aid (

or cas

h collat

eral prov

ided) i

s accoun

ted fo

r as a loan a

sse

t at amor

tis

ed cost

unl

ess it i

s manag

ed on a fai

r value ba

sis or d

esigna

ted at f

air value t

hrough p

roﬁt or lo

ss. I

n major

t

y of case

s throu

gh the

cont

ractu

al ter

ms of a rever

se re

po arr

angem

ent

, the Gr

oup as t

he tran

sfere

e of th

e secur

y colla

teral h

as the r

ight to s

ell

or repledge the asset c

oncerned.

The G

roup a

lso se

lls se

curit

es (

a repu

rchas

e agree

ment – ‘rep

o’) sub

ject to a co

mmitm

ent to re

purch

ase or r

edee

m the

curit

es at a pre

dete

rmine

d pri

ce. The se

curi

tes are r

etaine

d on th

e balan

ce shee

t as the G

roup r

etain

s subst

antia

lly all

the r

isk

s and rewar

ds of own

ers

hip and th

ese se

curi

tes are d

isclo

sed as p

ledg

ed coll

ateral

. Cons

iderat

on rec

eived (

or ca

coll

ateral r

eceive

d) is acco

unte

d for as a ﬁn

ancal lia

blit

y at amo

rtis

ed cos

t unles

s it is eit

her ma

ndato

rily c

lass

if

ed as fai

value t

hrou

gh proﬁt or l

oss or i

rrevoca

bly des

ignat

ed at fai

r value thr

ough pr

oﬁt or los

s at inti

al reco

gniton

Financ

al ass

ets a

re pled

ged as c

ollate

ral as p

art of s

ales and r

epurc

hase

s, se

curit

es bor

rowin

g and se

curit

sati

tran

sact

ions un

der te

rms t

hat are us

ual and cu

stom

y for su

ch acti

vtie

s. The G

roup i

s oblig

ed to re

turn e

quival

ent

secur

ites.

Repo an

d rever

se repo t

rans

actio

ns t

ypica

lly ent

itle th

e Gro

up and it

s coun

terp

art

ies to ha

ve recou

rse t

o ass

ets s

imlar

to th

ose pr

ovided a

s colla

teral in t

he event of a d

efaul

t. Se

curi

tes so

ld subje

ct to rep

os, e

ither by wa

y of a Gl

obal Ma

ster

Repur

chas

e Agreem

ent (

RA)

, or th

rough a s

ecur

ites s

ale and T

otal Re

turn Swap (

TRS) co

ntinu

e to be re

cogni

sed on

the b

alanc

e shee

t as the G

roup r

etain

s subst

antial

ly the a

sso

ciated r

isk

s and rewar

ds of th

e secu

rite

s (

the TR

S is not

reco

gnis

ed). The coun

terp

art

y lia

blit

y is inc

lude

d in depo

sit

s by bank

s or cust

omer ac

count

s, a

s approp

riat

e. As

set

s sold

under repurchase agreements are

considered encumbered as the Group cannot

pledge these to obtain

unding.

verse repurchase agreement

s a

her siml

ar secured lending

2021

$millon

2020

$millo

Bank

Customers

68,6

88,41

Of which:

Fair va

lue th

rough p

roﬁt or l

oss

80,00

63,405

Bank

18,727

,20

Customers

61,

,20

Hel

d at amo

rti

sed co

8,4

Bank

,079

247

Customers

Und

er rever

se repu

rchas

e and se

curi

tes bo

rrowin

g arran

geme

nts

, the G

roup o

btain

s secur

ite

s on ter

ms whic

h perm

it it to

rep

ledge o

r rese

ll the se

curi

tes to o

ther

s. Am

ount

s on su

ch ter

ms are:

2021

$millon

2020

$millo

curi

tes an

d colla

teral r

ecei

ved (

at fa

ir value

)

118,636

curi

tes an

d colla

teral w

hich ca

n be rep

ledg

ed or s

old (

at fa

ir value

)

117

,408

ount

s rep

ledg

ed/trans

fer

red to o

ther

s for ﬁ

nancn

g acti

vtie

s, to s

atis

y liabl

ites u

nder s

ale an

repurchase agreements (

at fa

ir v

alue

)

209

377

Standard Chartered

– A

nnu

al Rep

ort 202

Financal statements

16. R

erse repurchase and repurchase agreements includng other sim

lar l

ending and

borrowing

continued

Repurchase agreements and other simlar secured borro

wing

2021

$millon

2020

$millo

Bank

Customers

594

65,6

0,5

Of which:

Fair va

lue th

rough p

roﬁt or l

oss

2,38

Bank

Customers

,555

Hel

d at amo

rti

sed co

,260

Bank

1,94

540

Customers

313

363

The t

ables b

elow se

t out th

e ﬁnanca

l asse

ts p

rovide

d as coll

ateral f

or repu

rchas

e and ot

her se

cured b

orrow

ing tra

nsact

ions:

Collateral pledged against repurchase agreements

2021

Fair v

alu

through proﬁt

or loss

$millon

Fair v

alu

through Other

Comprehensive

Income

$millon

Amortised cost

$millon

Off-balance

sheet

$millon

On-balance

sheet

Deb

t sec

urit

es and o

ther e

ligbl

e bills

3,427

2,655

,601

–

8,683

Off-balance

sheet

Repledged collater

al received

–

At 31 De

cemb

er 2021

3,4

,655

,601

Collateral pledged against repurchase agreements

2020

Fair value

through proﬁt

or l

oss

$millo

Fair value

through Other

Comprehensive

Income

$millo

Amortised cost

$millo

Off-balance

sheet

$millo

otal

On-balance

sheet

Deb

t sec

urit

es and o

ther e

ligbl

e bills

2,664

355

–

Off-balance

sheet

Repledged collater

al received

–

209

,20

At 31 De

cemb

er 2020

,664

355

209

51,

378

Standard

Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

. G

oodwill and in

tangble a

sset

Accounting po

licy

Goodwill

odw

ill repr

esent

s th

e excess o

f the cos

t of an acqu

istio

n over the fa

ir value of t

he Gro

’s share of t

he iden

tﬁable n

set

s and con

tinge

nt liabli

tes of t

he acqui

red sub

sidar

y, asso

ciate or j

ont vent

ure at th

e date of a

cquist

ion. G

dwill o

acquistions

of subsidaries is included

in intangble assets. Goo

dwill

on acquistions of associates

is included in

Investments

in as

socia

tes. G

dwill in

clud

ed in int

angble a

sse

ts is a

sse

d at each b

alance s

heet d

ate for i

mpar

ment an

d carri

ed at

cost l

ess any ac

cumul

ated im

parm

ent los

ses

. Gain

s and los

ses o

n the dis

posa

l of an ent

y inclu

de the ca

yin

g amoun

t of

goo

dwil

l relat

ing to th

e entit

y s

old. D

etaile

d calcu

latio

ns are pe

rfor

med b

ased o

n disco

untn

g expe

cted ca

sh ﬂows of t

rel

evant cash-

gener

ating u

nit

s (

CGUs

) and di

scoun

tng th

ese at an a

ppropr

iate di

scou

nt rate, t

he det

ermin

aton o

f which

req

uires t

he exercis

e of jud

gemen

t. G

oodw

ill is all

ocate

d to CGUs fo

r the pu

rpo

se of imp

arme

nt test

ing. CGU

s repre

sent

the l

owest level w

ithn t

he Gro

up whic

h gener

ate sep

arate ca

sh inﬂow

s and at wh

ich the g

oodw

ill is mo

nitor

ed for in

tern

man

ageme

nt pur

pos

es. Th

ese are e

qual t

o or small

er than t

he Gr

oup

’s repor

tabl

e segm

ent

s (

as set o

ut in Not

e 2

) a

s the

Gro

up view

s it

s repor

tabl

e segm

ent

s on a glob

al bas

is. Th

e major CG

Us to whi

ch goo

dwill h

as bee

n alloca

ted are s

et out i

the CG

U table (p

age 3

Signﬁ

cant accounting estimates and judgements

The c

arr

yin

g amou

nt of go

odwi

ll is bas

ed on t

he appli

caton of j

udge

ment

s incl

udng th

e basi

s of goo

dwill i

mpar

ment

calculation

ssumptions. Judgement is

also applied

in determinaton of cash

-generating units.

timat

es incl

ude fo

recas

ts us

ed for d

eter

minng ca

sh ﬂows fo

r CGUs, t

he appr

opria

te long-

term gr

owth rat

es to us

e and

discount rates

hic

h factor i

n countr

y risk

-free rates and a

pplicable

isk pr

emiums. The Group undertakes

an annual

sess

ment t

o evaluate w

heth

er the c

arr

ng value o

f good

will is im

pare

d. The e

stima

ton of f

utu

re cash ﬂow

s and th

e level

to wh

ich they ar

e disco

unte

d is inhe

rentl

y uncer

tain an

d requ

ires sig

nﬁcant jud

gemen

t and is su

bject t

o pote

ntial ch

ange

over t

ime.

Acquired intangble

At the d

ate of ac

quist

ion of a su

bsidar

y o

r ass

ociate

, intang

ble as

set

s which a

re deem

ed se

parabl

e and th

at aris

e from

cont

ractu

al or ot

her le

gal righ

ts ar

e capital

sed an

d inclu

ded wi

thn the n

et iden

tﬁable a

sset

s acq

uired

. Thes

e intan

gble

set

s are inti

ally me

asur

ed at fair val

ue, whi

ch reﬂe

cts ma

rket exp

ecta

tions o

f the pr

obabilt

y t

hat th

e fut

ure eco

nomi

ben

eﬁts e

mbo

died in th

e ass

et will ﬂow t

o the en

tit

y and ar

e amor

tise

d on the b

asis o

f their e

xpec

ted us

efu

l lives (

4 to 16

year

)

. At e

ach bal

ance sh

eet da

te, the

se as

set

s are as

sess

ed for i

ndcato

rs of im

parm

ent

. In the even

t that an a

sset

’s

car

ying am

ount is d

eter

mine

d to be gre

ater t

han it

s recover

able amo

unt

, the as

set is w

rit

ten dow

n immed

ately.

Computer soft

are

Acquir

ed comp

uter s

oft

ware l

icence

s are capit

alse

d if the pr

incpl

es of devel

opmen

t are met o

n the ba

sis of t

he cost

incu

rred t

o acquir

e and br

ing to us

e the sp

ecif

c so

ware.

Inte

rnall

y gene

rate

d soft

war

e repre

sent

s sub

stant

ially all o

f the to

tal sof

ware capi

talse

d. Dire

ct cost

s of th

e develop

ment

of se

parat

ely ide

ntﬁabl

e inter

nally g

enera

ted so

ware ar

e capital

sed wh

ere it is p

robab

le that f

ure eco

nomic b

eneﬁt

att

ribu

table t

o the as

set w

ill ﬂow fro

m its u

se (

inte

rnall

y gene

rated s

oft

war

)

. Th

ese cos

ts in

clude s

alar

ies and wa

ges,

mater

ials, ser

vice provide

rs and contractor

s, and directl

y attributab

le ov

rheads

. Costs incu

rred in the ongoing m

aintenance

of so

ware ar

e expen

sed im

meda

tely w

hen inc

urre

d. Inte

rnall

y gene

rated s

oft

ware i

s amor

tise

d over eac

h asse

’

s us

efu

l life

to a ma

ximu

m of a 10-yea

r time p

erio

d. On an an

nual ba

sis so

ware as

set

s’ res

idual val

ues and u

sef

ul lives a

re reviewe

incl

udng a

sses

sing f

or indcat

ors o

f impar

ment

. Indic

ator

s of imp

armen

t inclu

de los

s of bus

ines

s relevanc

e, obso

lesce

nce of

set

, exit of t

he busi

ness t

o which t

he sof

ware rel

ates

, techn

olog

ical chan

ges

, chang

e in use of t

he ass

et, r

educt

ion in us

efu

life, pla

s to

reduce usage or scope.

For cap

itals

ed sof

ware, jud

geme

nt is req

uired t

o deter

mine w

hich cos

ts re

late to r

esea

rch (

and th

erefo

re expe

nse

d) and

whi

ch cost

s rela

te to devel

opmen

t (

capital

sed). Furth

er jud

gemen

t is req

uired to d

eter

mine t

he tech

nical fe

asibli

y of

comp

letin

g the s

oft

ware s

uch tha

t it will b

e availab

le for us

e. Est

imate

s are us

ed to det

ermi

ne how th

e sof

twa

re will

generate

probable

uture eco

nomic beneﬁ

s, these es

timates i

nclude: cost

sav

ings,

income increases, bala

nce sheet

improv

ents, improved

unctionalty or improv

sset safeguarding.

379

Standard Chartered

– Ann

ual Rep

t 2021

Financal statements

. G

oodwill and in

tangble a

sset

continued

2021

2020

Goodwill

$millon

Acqu

ired

intangbles

$millon

Computer

ftwa

$millon

Goodwill

$millo

Acquired

intang

bles

$millo

Computer

sof

tware

$millo

otal

$millo

Cost

At 1 Jan

uar

617

3,682

6,7

,07

,239

ange translation dif

ferences

(

73)

09)

103

Additons

–

989

–

790

Disposals

–

(4)

)

Impairm

ent

–

)

–

)

Amounts written off

–

(2)

(

–

)

At 31

cember

595

457

4,4

516

617

3,682

6,7

Pro

son

for amortisat

on

At 1 Jan

uar

–

1,258

709

–

431

,05

1,4

ange translation dif

ferences

–

(

22)

(

20)

)

–

Amortisaton

–

469

–

515

520

Impairm

ent charge

–

Disposals

–

(4)

)

Amounts written off

–

(95)

(

95)

–

(

349)

At 31

cember

–

1,608

,045

–

451

1,2

709

Net book

value

595

,856

471

617

,424

5,06

At 31 De

cembe

r 20

1, accu

mula

ted go

odw

ill impar

ment l

osse

s incur

red f

rom 1 Jan

uar

y 2005 a

mount

ed to $

317 millo

(31 De

cemb

er 202

0: $

317 mill

), of which $N

il was rec

ognis

ed in 2021 (31 De

cemb

er 202

0: $

89 millon

Software amortisaton change in estimate

ring t

he per

iod th

e Grou

p has re

ass

esse

d the us

ul econ

omic lif

e for so

ware as

set

s to reﬂ

ect the p

erio

d over whic

h the

set

s are exp

ecte

d to be ava

ilable f

or use by t

he Gro

up. As a re

sult of t

his cha

nge in es

timat

e, the G

roup h

as reco

rded a

dec

reas

e in sof

ware amor

tis

aton of a

pproxim

atel

y $88 m

illon for t

he year w

hen com

pare

d to the pr

eviou

s estim

ate.

Goodwill

Outcome of

imparment assessment

ange i

n cas

gen

era

tin

g unit

s (CGUs)

odw

ill is allo

cated t

o CGUs, w

hich are co

nsid

ered th

e level at w

hich go

odwi

ll is

man

aged an

d which g

enera

te inde

pend

ent cas

h inﬂows

. At year

-e

nd 2021, th

e Grou

p had t

wo glob

al CGUs re

prese

nting

Cor

por

ate, Co

mmerci

al & Inst

itut

onal Ba

nking (C

) an

d Privat

e Bank

ing (PB

), alon

g with s

ix indv

idua

l count

y CGUs

representing Retail

anking (

) for each country

Foll

owing th

e chang

es in th

e Grou

’

s or

ganis

atona

l str

uctur

e as des

cribe

d in Not

e 2 – Oper

ating S

egme

nts w

hich ha

s resu

lted

in t

wo new bu

sines

s seg

ment

s, CCIB a

nd CPBB, t

he CGUs h

ave chan

ged. G

ood

will re

latin

g to CB ($478 millon

), which wa

iousl

y alloc

ated to c

ount

y CGUs, h

as bee

n reallo

cate

d to the gl

obal CCIB CG

U. The CB go

odwi

ll has be

en allo

cated o

n a

rel

ative valu

e bas

is with r

efere

nce to th

e ratio o

f RB and CB r

isk

-wei

ghted a

sse

ts in t

he ind

vidua

l count

y at 1 Janu

y 2021.

The c

hange

s above req

uire com

parat

ive per

iods t

o be res

tate

esti

ng of go

odwi

ll for im

parme

An ann

ual as

ses

sment i

s made a

s to whe

ther t

he cur

rent car

ying val

ue of go

odw

ill is imp

ared. Fo

r the pu

rpo

ses of im

parm

ent

tes

ting

, good

will is a

llocat

ed at th

e date of a

cquist

ion to a CGU. G

ood

will is co

nside

red to b

e impar

ed if the c

arr

ng amou

of th

e relevan

t CGU exceed

s its r

ecoverab

le amou

nt. In

dicato

rs of i

mparm

ent in

clude ch

ange

s in the e

conomi

c per

form

ance

and o

utlo

ok of th

e region i

nclud

ng geo

polit

cal chan

ges, c

hange

s in marke

t value of re

gion

al investm

ent

s, larg

e credi

t defau

lts

and st

rate

gic deci

sons t

o exit cer

tain re

gion

s. The r

ecoverab

le amou

s for all th

e CGUs were m

easu

red ba

sed on val

ue in us

(

VIU). The calcu

latio

n of ViU for e

ach CGU is c

alculat

ed usi

ng ﬁve-yea

r cashﬂow p

roject

ons and a

n estim

ated t

ermin

al value

sed on a p

erp

etuit

y val

ue aft

er year ﬁve. T

he cash

ﬂow proje

ctons a

re bas

ed on fo

recas

ts ap

proved by man

agem

ent up

to 2026. Th

e per

petu

y term

inal valu

e amoun

t is calcu

lated u

sing ye

ar ﬁve cash

ﬂows usin

g long-t

erm G

DP growt

h rates

All ca

shﬂows ar

e disco

unte

d using di

scoun

t rates w

hich reﬂ

ect mar

ket rate

s approp

riat

e to the CGU.

The g

ood

will allo

cate

d to each CG

U and key ass

umpt

ions us

ed in de

term

inng th

e recoverab

le amo

unt

s are set o

ut bel

ow and

are so

lely e

stim

ates fo

r the pu

rpos

es of as

ses

sing im

parm

ent of ac

quire

d good

will.

380

Standard Chartered

– Ann

ual Re

por

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

. G

oodwill and in

tangble a

sset

continued

Goodwill

con

tinued

Cash-gen

erating unit

2021

2020

Goodwill

$millon

-Ta

discount

rates

per cent

Long-term

forecast GDP

growth

rates

per cent

Goodwill

$millo

-T

discount

rates

per cent

Long-term

forecast GDP

growth rates

per cent

Countr

y CGUs

Asia

,073

,07

Hong K

ong

357

10.6

2.5

359

2.7

aiwan

10.

360

0.6

Singapore

11.6

2.4

346

3.0

Bangladesh

Afr

ica & Mi

ddle E

ast

Pakistan

6.0

20.

Bahrain

3.0

14.

2.8

Global CGUs

1,430

obal Pr

ivat

e Bank

ing

2.5

3.6

Corp

orate, Commercial &

Institu

tonal Banking

1,346

3.0

357

,59

617

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f seg

ment

s (CIB an

d CB to CCI

B and PB a

nd RB to C

PBB) and r

egi

ons

(

ate

r Chin

a & Nor

th A

sia an

d ASE

AN & S

out

h As

ia to A

sia)

. P

rio

r per

iod

s hav

e bee

n rest

ate

In th

e curre

nt year th

ere are n

o CGUs tha

t are sen

sitve t

o any indvi

dual move

ment on key e

stima

tes (

cash

ﬂow

, dis

count r

ate

and G

DP grow

th rate

). This is p

rima

rly du

e to incre

ase

d anticp

ated c

ashﬂows a

s econ

omic un

cert

aint

y caus

ed by th

ID-

19 p

andem

ic has ab

ated a

nd the ch

ange in CG

Us as des

crib

ed above.

Acquired intangble

The

se pr

imarl

y compr

ise th

ose it

ems re

cognis

ed as p

art of t

he acqu

istio

ns of Unio

n Bank (

ow amalg

amate

d into S

tandar

Charte

red Bank (Pakistan

) Limted), Hsinchu (

now amalgamate

d into Standard Chart

ered Bank (T

aiwan

) Limted), P

broke,

Ame

rican E

ress B

ank and A

BSA

’

s cu

stod

y busi

ness i

n Afr

ica. Mai

ntena

nce inta

ngble a

sset

s rep

resen

t the valu

e in the

diffe

rence bet

ween the contract

ual right under acquire

d leases to recei

aircr

aft in a specif

ed maintenance con

diton at

the e

nd of th

e leas

e and th

e actua

l physical c

ondito

n of the a

ircraf

t at the d

ate of ac

quisti

on.

The a

cquire

d intan

gbles ar

e amor

tise

d over per

iods f

rom fo

ur year

s to a ma

ximum o

f 16 year

s. Th

e const

itue

nts ar

e as foll

ows:

2021

$millon

2020

$millo

Acquir

intangbles comprise

Aircraft mainte

nance

Brand na

mes

–

Customer relationshps

Licences

Net book

value

381

Standard Chartered

– Ann

ual Rep

ort 2

021

Financal statements

18. Property

, plant and equipment

Accounting po

licy

All pr

oper

, plan

t and equ

ipmen

t is stat

ed at cos

t less a

ccumu

lated d

epre

ciaton a

nd impar

ment l

oss

es. Co

st incl

udes

exp

endit

ure th

at is dire

ctly at

trib

utab

le to th

e acquis

tion of t

he as

set

s. Su

bseq

uent co

sts ar

e inclu

ded in t

he ass

’

s ca

yin

amo

unt or are r

ecogn

ised a

s a sepa

rate as

set

, as app

ropri

ate, onl

y whe

n it is prob

able t

hat f

uture e

cono

mic ben

eﬁts

socia

ted wit

h the it

em will ﬂow t

o the G

roup an

d the cos

t of the i

tem can be m

eas

ured re

liably.

At eac

h balan

ce shee

t date t

he ass

’

s re

sidu

al values a

nd usef

ul li

ves are rev

iewed, an

d adju

sted if ap

propr

iate, i

ncludn

sess

ing for i

ndcato

rs of im

parm

ent

. In the even

t that an a

sset

’s carr

ing amo

unt is de

term

ined t

o be grea

ter th

an its

recove

rable am

ount

, the a

sset i

s wri

tten dow

n to the r

ecoverab

le amou

nt. G

ains an

d los

ses on di

spos

als are in

clude

d in the

income statement.

Repai

rs and m

ainte

nance ar

e charge

d to the i

ncome s

tatem

ent du

ring t

he ﬁnanc

al per

iod in wh

ich they ar

e incur

red.

Land an

d buildn

gs comp

ris

e mainly b

ranch

es and of

ﬁces

. Freeho

ld land i

s not de

precia

ted, al

thou

gh it is sub

ject to

imparment testing.

Dep

reciat

on on ot

her as

set

s is calc

ulate

d usin

g the str

aight

-lin

e meth

od to allo

cate th

eir cos

t to thei

r residu

al value

s over

the

ir esti

mate

d usef

ul live

s, as fo

llows:

•

Buil

dngs

•

up t

o 50 year

•

Leas

ehol

d improvem

ent

s life of l

ease

•

up t

o 50 year

•

Equipm

ent an

d motor ve

hicle

•

ree to 1

5 years

•

Airc

raft

•

up to 1

8 year

•

Ship

•

up t

o 15 year

Whe

re the G

roup i

s a less

ee of a r

ight

-of

-u

se as

set

, the le

ased a

sse

ts ar

e capital

sed and i

nclud

ed in Prop

ert

, p

lant an

equ

ipmen

t with a co

rres

pondi

ng liabli

ty t

o the le

sso

r recog

nised i

n Othe

r liablit

es, in a

ccorda

nce wit

h the G

roup

’s leas

set

s accou

nting p

olic

y in Not

e 19

All o

ther re

pair

s and mai

ntena

nce are ch

arged t

o the inc

ome sta

teme

nt duri

ng the ﬁn

ancal p

erio

d in which t

hey are

incurre

Signﬁcant accountin

stimates and judge

ments

The c

arr

yin

g amou

nt of th

e Grou

’

s air

craft l

easi

ng por

tfol

io is ba

sed on t

he appl

icaton o

f judge

ment an

d estim

ates t

determine the most appropriate recov

erable amount for each aircra

t when assessing for imparment. Estimates involv

e the

appr

opri

ate cash ﬂ

ows, di

scoun

t rates a

nd resi

dual valu

es use

d in dete

rminn

g a value-in-

use fo

r aircraf

t, an

d judge

ment i

req

uired in d

eter

minng t

he appr

opria

te obs

vable t

hird-par

y valuat

ions t

o use for a

sse

ssin

g curre

nt mar

et valu

382

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

18. Prop

erty

, plan

t and equipm

ent

continued

2021

Prem

ises

$millon

Equipment

$millon

Operating

lease

assets

$millon

Leased

premises

assets

$millon

Leased

equipment

assets

$millon

Cost or v

aluation

At 1 Jan

uar

5,233

,577

ange translation dif

ferences

)

–

(

38)

(

115)

Additons

107

135

729

Dis

pos

als and f

ull

y depr

eciat

ed as

set

itte

n off

(

(95

)

(

1,095

)

(58)

(1)

49)

rans

fer

s to as

set

s hel

d for sal

–

(

12)

As a

t 31 Dec

embe

,98

901

4,248

1,854

Depreciaton

Accum

ulat

ed at 1 Ja

nuar

594

1,336

536

3,248

ange translation dif

ferences

(

–

(15)

–

)

Cha

rge for t

he year

121

296

712

Impairm

ent charge

–

106

Attributabl

e to

sets sold

or written off

(31)

)

–

)

rans

fer

s to as

set

s hel

d for sal

(3)

–

(

Accumulated a

t 31 December

795

819

3,400

Net book amount

at 31 December

290

3,09

,036

,61

fer t

o the c

ash ﬂ

ow sta

tem

ent un

der c

ash ﬂo

ws fr

om inve

st

ng act

iv

tie

s sec

tion f

or th

e pur

cha

se of p

rop

ert

y, plan

t and e

quip

men

t dur

ing t

he ye

ar of

51 mill

on on p

age 3

spo

sal

s for p

rop

ert

y, plan

t and e

quip

men

t dur

ing t

he ye

ar of $

816 mi

llon i

n the c

ash ﬂo

w stat

eme

nt wo

uld in

clu

de th

e gain

s and l

oss

es in

cur

red a

s par

t of

her o

per

atin

g inco

me (N

ote 6) on di

spo

sal o

f ass

s dur

ing t

he yea

r and t

he ne

t boo

k valu

e disp

2020

Premises

$millo

Equipment

$millo

Operating

lease

assets

$millo

Leased

premises

assets

$millo

Leased

equipment

assets

$millo

otal

$millo

Cost or v

aluation

At 1 Jan

uar

,05

800

,493

8,8

ange translation dif

ferences

(2)

Additons

121

952

155

1,270

Dis

pos

als and f

ull

y depr

eciat

ed as

set

itte

n off

(

98)

rans

fer

s to as

set

s hel

d for sal

(

–

(

As a

t 31 Dec

embe

,04

5,233

1,57

Depreciaton

Accum

ulat

ed at 1 Ja

nuar

737

286

615

ange translation dif

ferences

–

Cha

rge for t

he year

229

300

Impairm

ent charge

–

132

–

132

Attributabl

e to

sets sold,

transferred or

itte

n off

(

52)

(

(2)

(24

rans

fer

s to as

set

s hel

d for sal

(1)

–

(1)

Accumulated a

t 31 December

1,336

536

Net b

ook a

moun

t at 31 De

cemb

280

897

,51

fer t

o the c

ash ﬂ

ow sta

tem

ent un

der c

ash ﬂo

ws fr

om inve

st

ng act

iv

tie

s sec

tion f

or th

e pur

cha

se of p

rop

ert

y, plan

t and e

quip

men

t dur

ing t

he ye

ar of

$1,270 mil

lon on page

312

spo

sal

s for p

rop

ert

y, plan

t and e

quip

men

t dur

ing t

he ye

ar of $1

78 mill

on in t

he cas

h ﬂow st

ate

men

t woul

d inc

lud

e the g

ains a

nd lo

sse

s inc

urr

ed as p

art o

her o

per

atin

g inco

me (N

ote 6) on di

spo

sal o

f ass

s dur

ing t

he yea

r and t

he ne

t boo

k valu

e disp

ircr

aft h

ave b

een im

par

ed du

e to a de

cre

ase i

n the m

arke

t valu

es, p

ticu

lar

ly wi

de-b

y vari

ant

383

Standard Chartered

– Annu

al Repo

rt 2021

Financal statements

18. Prop

erty

, plan

t and equipm

ent

continued

erat

ing l

eas

e ass

The o

perat

ing le

ase as

set

s sub

sect

ion of pro

per

ty, plant an

d equip

ment is t

he Gr

oup

’s aircraf

t ope

rating l

easi

ng bus

iness

con

sistn

g of 97 comm

ercial ai

rcraf

t at year en

d, of whi

ch 9

4 ar

e narrow-b

odie

s and thr

ee are wi

de-bo

dies

. The le

ases ar

cla

ssif

ed a

s oper

ating l

ease

s as they d

o not tr

ansfe

r subst

antia

lly all th

e risk

s and re

wards incd

ental t

o the own

ers

hip of th

set

s to the l

ess

ee, and re

ntal in

come f

rom ope

ratin

g leas

e ass

ets i

s discl

osed i

n Note 6

. At 31 Dece

mber 2021

, thes

e ass

ets

had a n

et boo

k value of $

3,092 m

illon (31 D

ecemb

er 2020: $3,

897 millon

Und

er thes

e lea

ses th

e less

ee is re

spon

sible f

or the m

ainten

ance an

d ser

cng of th

e aircraf

t dur

ing the l

eas

e term w

hile th

Gro

up rec

eives re

ntal inc

ome and a

ssum

es the r

isk

s of th

e residu

al value o

f the airc

raft a

t the end o

f the le

ase. In

ital le

ase

ter

ms ran

ge in len

gth up to 12 ye

ars

, whil

e the ave

rage re

mainng l

ease t

erm at 31 D

ecem

ber 2021 is ap

proxima

tely ﬁ

ve year

By var

ing the l

ease t

erm

s, the e

ffe

cts o

f chang

es in c

yclical mar

ket cond

itons a

t the ti

me aircra

ft be

come el

igble fo

r re-le

ase

are mi

tgate

d. The G

roup w

ill loo

k at ente

ring i

nto a lea

se exte

nsio

n with ex

istn

g less

ees well i

n advanc

e of lea

se expi

y in order

to min

mise th

e ris

k of aircra

ft dow

ntime an

d aircraf

t tran

sito

n cost

s. Air

craft m

ay als

o be so

ld from t

ime to t

ime to m

anage t

compositon a

nd average

age of the ﬂeet.

A ser

ies of s

tres

s sens

itvi

tes con

ducte

d on th

e narrow-b

ody p

ortf

olio hig

hlght th

e t

wo bigge

st ris

ks rem

ain eith

er an inc

reas

in th

e disco

unt rate o

r a subs

tantia

l numb

er of air

lne clien

ts de

fault

ing. A s

ensit

vit

y te

st was pe

rfor

med o

n the nar

row-bo

por

tfo

lio ass

uming a d

iscou

nt rate in

crea

se of 10

0 basi

s point

, from a b

ase ran

ge of 4.

5%-5.5%

, (31 D

ecemb

er 2020: 4.5%-

whi

ch resul

ted in a p

ossi

ble incr

ease i

n impar

ment o

f $26 millon

A fu

rth

er sen

sitv

y test co

nsid

ered th

at the l

ess

ees wi

th lower cre

dit rat

ings de

fault

ed on th

eir cur

rent le

ase

s. Thi

s scenar

woul

d resul

t in a pos

sible in

crea

se in imp

arme

nt of $75 m

illon.

ring 2020 the G

roup o

ffer

ed pa

ymen

t conces

sion

s to cust

omer

s as a re

sult of t

he CO

ID-

19 p

andemi

c, allow

ing th

em to

def

er lea

se pay

ment

s for b

ween t

hree an

d nine mo

nths

. For cus

tome

rs wh

o have no

t defa

ulted o

n their o

bliga

tons

, defe

rrals

do no

t aff

ect inco

me reco

gnito

n provid

ed the t

otal le

ase re

ntals a

nd lea

se expi

y date are u

nchan

ged. F

or custo

mer

s who

have d

efau

lted, a

ny income n

ot covere

d by collate

ral is prov

ided a

gains

t. Th

e provis

on is rever

sed o

n receip

t of the d

efer

red

payment

2021

Minmum l

ease

receivables

under operating

leases falling

due:

$millon

2020

Minmum

ase

receivables

under operating

leases falling

$millo

Wit

hn one ye

330

478

e to t

wo year

285

436

wo to th

ree yea

251

Thr

ee to fo

ur year

197

328

Fou

r to ﬁve yea

153

251

ter ﬁve ye

411

,62

2,56

384

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

. Leased a

sset

Accounting po

licy

The G

roup a

sse

s whet

her a cont

ract is a l

ease i

n scop

e of this p

olic

y by deter

minng w

het

her the c

ontra

ct gives it t

he rig

to us

e a spec

if

ed und

erly

ing phys

ical as

set for a l

eas

e term gr

eate

r than 12 m

onth

s, unl

ess th

e unde

rly

ing as

set is of l

valu

Whe

re the G

roup i

s a less

ee and t

he lea

se is de

emed i

n scope

, it reco

gnise

s a liablit

y eq

ual to t

he pres

ent valu

e of lea

ymen

ts over t

he lea

se ter

m, dis

count

ed usin

g the in

creme

ntal bo

rrowin

g rate ap

plicab

le in the e

conom

ic enviro

nment o

the l

eas

e. The liab

lit

y is reco

gnis

ed in ‘Ot

her liab

lites’

. A co

rres

pond

ing rig

-of

-us

e ass

et equ

al to th

e liablit

, a

djust

ed for

any lea

se pa

ymen

ts ma

de at or b

efore t

he comm

encem

ent dat

e, is re

cognis

ed in ‘Pr

oper

, plan

t and equ

ipmen

t’

. T

he lea

ter

m inclu

des any ext

ensio

n opti

ons con

taine

d in the co

ntract t

hat th

e Grou

p is rea

sonab

ly cer

tain it w

ill exercis

The G

roup s

ubse

quen

tly de

precia

tes th

e right

-o

-use a

sse

t using t

he stra

ight

-line m

etho

d over the le

ase t

erm and m

eas

ures

the l

eas

e liablit

y us

ing the e

ffe

ctive in

teres

t meth

od. De

preci

aton on t

he as

set is re

cogni

sed in ‘

Depr

eciato

n and

amo

rtis

aton’

, an

d inter

est on th

e lea

se liabli

ty i

s reco

gnise

d in ‘Int

erest e

xpen

se’

If a le

ased p

remis

e, or a physi

cally di

stnct p

ort

ion of a pre

mise s

uch as an in

dvid

ual ﬂoo

, is d

eeme

d by manag

emen

t to be

sur

plus t

o the G

roup

’s nee

ds and act

ion ha

s been t

aken to aba

ndon t

he spa

ce befo

re the le

ase ex

pires

, this i

s consi

dere

d an

indca

tor of im

parm

ent

. An impar

ment l

oss i

s recogn

ised i

f the ri

ght

-of

-u

se as

set

, or por

tion t

here

, ha

s a carr

ng value in

exces

s of it

s value-in-

use wh

en tak

ing into a

ccount f

actor

s such a

s the ab

ilt

y and likelh

ood of o

btainn

g a subte

nant

The j

udgem

ent

s in det

erminn

g lea

se bala

nces are t

he det

ermin

aton o

f whet

her th

e Grou

p is rea

sonab

ly cer

tain th

at it will

exerci

se exten

sion o

ption

s pres

ent in le

ase con

tract

s. O

n intial r

ecogn

iton, t

he Gr

oup con

sider

s a rang

e of chara

cter

istc

suc

h as prem

ises f

unct

ion, re

giona

l trend

s and th

e term r

emainn

g on the l

ease t

o dete

rmine w

heth

er it is re

aso

nably c

ertai

tha

t a contr

actua

l right t

o extend a l

eas

e will be exe

rcise

d. Wher

e a chang

e in assu

mpti

on is conﬁr

med by t

he loca

l prope

management team, a remeasurement is performed in the Group-managed vendor system.

The e

stim

ates wer

e the det

ermi

naton o

f incre

menta

l borr

owing ra

tes in th

e resp

ecti

ve econo

mic envir

onmen

. The G

roup

use

s third-p

art

y bro

ker quot

es to es

timat

e its US

D cost of s

enior u

nsec

ured b

orrow

ing, th

en use

s cros

s-curre

ncy s

wap pri

cng

info

rmat

on to de

term

ine the e

quival

ent cos

t of bor

rowing i

n othe

r curre

ncies

. If it is no

t pos

sible t

o estim

ate an in

cremen

tal

bor

rowin

g rate th

rough t

his pro

cess

, oth

er proxie

s such as l

ocal gove

rnme

nt bond y

ield

s are use

The G

roup p

rima

rly en

ters l

eas

e contra

cts t

hat gran

t it the r

ight to u

se prem

ises su

ch as of

ﬁce buil

dngs an

d retail b

ranch

es.

xist

ng lea

se liabl

ites ma

y chan

ge in fu

ture p

erio

ds due t

o chang

es in as

sumpt

ions o

r decis

ons to exe

rcise le

ase re

newal or

ter

minat

on opt

ions

, chang

es in pa

ymen

ts du

e to ren

egot

iaton

s of mar

ket renta

l rates a

s per

mitte

d by thos

e contr

acts a

chan

ges to p

aym

ent

s due to re

nt bein

g contr

actua

lly linke

d to an inﬂat

on inde

x. In ge

neral t

he re-me

asur

ement o

f a leas

liabl

y under t

hese c

ircums

tance

s lead

s to an equ

al chan

ge to th

e right

-o

-use a

sset b

alanc

e, with n

o imme

date ef

fect o

n the

income statement.

The t

otal ca

sh out

ﬂow duri

ng the ye

ar for pre

mise

s and equ

ipmen

t leas

es was $

331 millo

n (20

20: $352 m

illon

The t

otal ex

pens

e dur

ing the ye

ar in res

pect of l

eas

es with a t

erm le

ss th

an or equ

al to 12 mo

nths wa

s less t

han $1 m

illon

(2020: $1 millon)

The r

ight

-of-use as

set b

alance

s and dep

reciat

on charg

es are di

sclos

ed in No

te 18. T

he le

ase liab

lit

y balan

ces are di

sclo

sed in

Not

e 23 an

d the int

erest e

xpen

se on le

ase li

ablite

s is disc

lose

d in Note 3

Maturit

y analysis

The m

atur

y proﬁl

e for lea

se liabl

ites a

ssoc

iated w

ith le

ased p

remis

es and e

quipm

ent as

set

s is as fo

llows:

2021

e year

or less

$millon

Between

e year a

wo year

$millon

Between

o year

s and

ﬁve

years

$millon

re th

ﬁve

years

$millon

her lia

blite

s – lea

se liab

lite

293

247

175

1,236

2020

e year

or less

$millo

Bet

ween

e year a

wo yea

$millo

Bet

ween

wo yea

rs an

ﬁve year

$millo

More tha

ﬁve year

$millo

otal

$millo

her lia

blite

s – lea

se liab

lite

368

280

188

395

385

Standard Chartered

– Annu

al Repo

rt 2021

Financal statements

20. Othe

r asse

Accounting po

licy

Refer t

o Note 13 Fin

ancal ins

tru

ment

s for t

he releva

nt accou

nting p

olic

Com

modit

es rep

resen

t physica

l holdin

gs wh

ere the G

roup h

as tit

le and ex

posu

re to the M

arket Ri

sk ass

ociat

ed wit

the holding

Com

modit

es and e

misso

ns cer

tif

cate

s are fair val

ued w

ith the f

air value d

eri

ved fro

m obse

vable sp

ot or sh

ort

-ter

ture

s pric

es fro

m relevant exch

ange

Other assets include

2021

$millon

2020

$millo

Finan

cal as

set

s hel

d at amor

tis

ed co

st (Not

e 13

Hong K

ong SAR Gov

ernment certifcates of i

ndebtedness (Note

)¹

Cash collateral

11,7

Acce

ptances a

nd endorsement

868

Unsettled trades

and other ﬁnanc

al assets

18,637

16,

058

40,0

Non-ﬁ

nancal assets:

Commodites

and emiss

ons certif



cates

Other assets

599

9,9

8,688

he Ho

ng Kon

g SAR G

over

nme

nt cer

tif

c

ates o

f ind

ebt

edn

ess a

re sub

ord

inat

ed t

o the cl

aim

s of ot

her p

art

ies i

n resp

ect o

f ban

k not

es is

sue

mmo

dit

es an

d emis

so

n cer

tif

ca

tes a

re car

rie

d at fa

ir valu

e les

s cos

ts t

o sell

, $5.

7 bill

on ar

e cla

ssif

e

d as Lev

el 1 and $

6 bill

on are c

las

sif

e

d as Leve

l 2

386

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

21. A

sset

s held fo

r sale and as

sociat

ed liablit

es

Accounting po

licy

Financ

al inst

rume

s can be re

clas

sif

ed as h

eld for s

ale if th

ey are non-

curre

nt ass

s or if they a

re par

t of a disp

osal gr

oup;

however, in thes

e circum

stan

ces ﬁnan

cal inst

rum

ent

s contin

ue to be m

eas

ured p

er the re

quire

ment

s of IFRS 9 Fin

ancal

Ins

tru

ment

s. Refe

r to Not

e 13 Financal in

str

umen

ts fo

r the re

levant acco

untin

g polic

Non-

curr

ent as

set

s are cla

ssif

ed a

s held f

or sale a

nd mea

sured a

t the lowe

r of thei

r carr

ing amo

unt and fa

ir value le

ss cos

to se

ll when:

) The

ir carr

ing amo

unt

s will b

e recovere

d prin

cpally t

hrou

gh sale;

) They ar

e availab

le for im

medat

e sale in t

heir pr

esent c

ondito

n; and

) Th

eir sale i

s highl

y proba

ble.

Imm

ediat

ely be

fore th

e intial c

lass

if

cation a

s held f

or sale, t

he car

ying am

ount

s of th

e ass

ets a

re mea

sured i

n accord

ance

wit

h the app

licabl

e accoun

ting p

olices r

elate

d to the a

sse

t or liabli

ty b

efor

e recla

ssif

cat

ion as h

eld for s

ale.

The a

sse

ts b

elow have b

een pr

esen

ted as h

eld for s

ale fol

lowing t

he appr

oval of Gro

up mana

geme

nt, an

d the tr

ansac

tions

are ex

pect

ed to com

plete i

n 20

Foll

owing a de

cison by t

he Boa

rd of Dire

ctor

s to exi

t the ship l

easi

ng bus

ines

s withn CCI

B, the s

hippng p

ort

folio i

s clas

sif

ed

as ‘Held for sale

’

The ﬁ

nancal a

sset

s rep

ort

ed bel

ow are cla

ssif

ed u

nder Level 1 $ n

il (31 Dec

embe

r 20

20: $n

il)

, Level 2 $

nil (31 De

cemb

er 202

$25 m

illon ) and Level 3 $9

5 millon (31 D

ecemb

er 2020: $63 mi

llon

set

s he

ld for s

ale

2021

$millon

2020

$millo

Finan

cal as

set

s hel

d at fair val

ue th

rough p

roﬁt or l

oss

Loan

s and ad

vance

s to cust

ome

Equit

–

Finan

cal as

set

s hel

d at amor

tis

ed co

Loan

s and ad

vance

s to cust

ome

Propert

, plant

and equipment

239

358

essels

230

354

Others

334

446

On t

he 20 May 2020 the G

roup co

mplet

ed th

e sale of it

s 4

56 pe

r cent eq

uit

y inte

rest in PT B

ank Perm

ata Tb

k to Bang

kok Bank

Pub

lic Com

pany Limte

d for ca

sh cons

iderat

on of ID

R 17 trillo

n (

1,072 millon)

387

Standard Chartered

– Ann

ual Re

por

t 2021

Financal statements

2. D

ebt securi

tes in is

sue

Accounting po

licy

Refer t

o Note 13 Fin

ancal ins

tru

ment

s for t

he releva

nt accou

nting p

olic

2021

2020

Certifcates

of deposit

of $

100,000

or more

$millon

Other debt

securites

in issue

$millon

Certif

cates

of deposit

of $

100,000

or more

$millo

Other debt

securites

in is

$millo

otal

$millo

Deb

t sec

urit

es in is

sue

896

,397

,020

34,530

55,

550

Deb

t sec

urit

es in is

sue in

clud

ed wit

hn:

Finan

cal liab

lite

s held a

t fair valu

thr

ough p

roﬁt or lo

ss (No

te 13)

–

597

–

,811

5,811

al deb

t sec

urit

es in i

,896

6,890

1,020

In 2021, t

he Com

pany iss

ued a to

tal of $

6.8 bi

llon sen

ior not

es for g

eneral b

usin

ess pu

rpo

ses of t

he Gro

up as sh

own bel

ow:

Securites

$millon

$50

0 millo

n ﬁxed-ra

te seni

or not

es du

e 20

5 (

call

able 2024

)

500

$50

0 millo

n ﬂoat

ing rat

e seni

or not

es due 202

5 (

callab

le 202

500

EUR 50

0 millo

n ﬁxed-ra

te sen

ior no

tes du

e 2029 (

callab

le 2028)

,000 mi

llon ﬁxe

d-rate s

enior n

ote

s due 2025 (

llabl

e 20

)

1,000

50 millo

n ﬁxed-ra

te seni

or not

es du

e 203

2 (

call

able 2031)

1,250

,50

0 millo

n ﬁxed-ra

te seni

or not

es du

e 20

5 (

call

able 2024

)

,500

,50

0 millo

n ﬁxed-ra

te seni

or not

es du

e 20

7 (

calla

ble 2026

)

500

otal

senior notes issued

819

In 2020, the Co

mpany is

sued a t

otal of $

8 billon se

nior no

tes fo

r gener

al busin

ess p

urpo

ses of t

he Gr

oup as sh

own be

low:

Securites

$millo

$2,0

00 mil

lon ﬁxed-

rate se

nior n

otes d

ue 2026 (

calla

ble 2025)

2,000

$2,0

00 mil

lon ﬁxed-

rate se

nior n

otes d

ue 2031 (

call

able 2030)

2,000

,000 mi

llon ﬁxe

d-rate s

enior n

ote

s due 2023 (

allabl

e 2022)

1,000

EUR 7

50 millo

n ﬁxed-ra

te sen

ior no

tes du

e 2028 (

callab

le 2027

)

$50

0 millo

n ﬂoat

ing rat

e seni

or not

es due 202

3 (

calla

ble 2022)

500

HKD 1

,081 mi

llon ﬁxe

d-rate s

enior n

otes d

ue 2023 (

llabl

e 2022)

139

$10

0 millo

n zero co

upon ca

llabl

e bon

d due 2050 (

allabl

e 2025)

100

0 millo

n zero cou

pon cal

lable b

ond d

ue 2050 (

cal

labl

e 20

JPY 5,

500 m

illon ﬁ

xed-rat

e senio

r not

es due 202

3 (

callab

le 2022)

$50 m

illon zer

o coup

on calla

ble bo

nd du

e 2050 (

call

able 202

)

ota

l senior notes issued

6,839

hes

e not

es wi

ll be s

ubje

ct to r

eme

diat

on u

nder i

nte

res

t rate b

enc

hma

rk re

for

m. Ple

ase r

efe

r to No

te 13 fo

r fu

rth

er in

for

mat

on on t

his

388

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

23. O

ther li

ablites

Accounting po

licy

Refer t

o Note 13 Fin

ancal ins

tru

ment

s for t

he releva

nt accou

nting p

olic

y for ﬁna

ncal liab

lites

, Note 19 Le

ase

d asse

ts f

the a

ccoun

ting po

licy f

or lea

ses

, and Not

e 31 Shar

e-bas

ed pa

ymen

ts fo

r the acc

ounti

ng pol

icy fo

r cash-s

ettl

ed shar

based paymen

2021

$millon

2020

$millo

Finan

cal liab

lite

s held a

t amor

tis

ed cost (N

ote 13)

Notes in

circulaton

Acce

ptances a

nd endorsement

868

Cash collateral

,092

0,1

Propert

y leases

1,1

Equipment

ases²

Unsettled trades

and other ﬁnanc

al liab

lites

1,94

782

43,433

Non-ﬁ

nancal li

ablites

Cash-settled

share-based payments

Othe

r liablites

826

635

,314

ong Ko

ng cu

rre

ncy n

ote

s in cir

cula

to

n of $7

284 m

illo

n (31 De

cem

ber 2020

: $7

95 mill

on) that a

re se

cur

ed by th

e Gove

rnm

ent o

f Hon

g Kong SA

R cer

tif

ca

tes

of in

deb

ted

nes

s of th

e sam

e amo

unt i

nclu

ded i

n ‘Ot

her a

sse

ts’ (

Not

e 18)

her ﬁ

nanc

al lia

bli

tes i

ncl

ude t

he pr

esen

t valu

e of le

ase l

iab

lit

es, a

s req

uire

d by IFR

S 16 fr

om 1 Ja

nuar

y 20

19; ref

er to N

ote 1

24. Proviso

ns for liablit

es and ch

arges

Accounting po

licy

The G

roup r

ecogn

ises a p

rovison f

or a pre

sent le

gal or co

nstr

ucti

ve oblig

aton re

sulti

ng fro

m a past eve

nt when i

t is more

likel

y than no

t that it w

ill be re

quire

d to tran

sfer e

conom

ic ben

eﬁts t

o sett

le the o

bligat

on and t

he amou

nt of th

e obliga

ton

can be e

stim

ated re

liabl

. Wher

e a liablit

y ar

ises b

ase

d on par

ticpa

tion in a m

arket at a s

pecif

e

d date, t

he oblig

aton i

reco

gnis

ed in th

e ﬁnancal s

tatem

ent

s on tha

t date an

d is not ac

crue

d over the p

erio

Signﬁ

cant accounting estimates and judgements

The r

ecogn

iton an

d meas

ureme

nt of prov

isons f

or liabl

ites an

d charge

s requi

res sign

ﬁcant jud

gemen

t and the u

se of

est

imate

s abou

t uncer

tain f

utu

re condi

tons o

r event

timat

es incl

ude th

e best e

stima

te of th

e proba

bilt

y of out

ﬂow of eco

nomic r

esou

rces, c

ost of se

ttlin

g a provi

son and

timn

g of set

tlem

ent. J

udge

ment

s are re

quire

d for inh

erent

ly unce

rtai

n areas s

uch as le

gal de

cison

s (

cludng e

xtern

advice obtained)

, and outcome

of regulator re

2021

2020

Provison

for credit

commitments

$millon

Other

provisons

$millon

Provison

for credit

commitments

$millo

Other

provisons

$millo

otal

$millo

At 1 Jan

uar

466

317

132

ange translation dif

ferences

(

nsfer

–

Charge against proﬁt

(

30)

125

Provi

son

s utils

–

)

(47

)

(3)

)

31 December

346

453

Provi

son for cr

edit com

mitm

ent comp

rise

s thos

e undra

wn con

tract

ually co

mmitt

ed fac

ilties w

here t

here is d

oubt a

s to the

bor

rower

’

s ab

ilt

y to mee

t their r

epay

ment o

bligat

ons

Other provisons

consist mainly of pro

is

for regulator

y settlements and legal claims, the nature

of which are described in

Note 26.

389

Standard Chartered

– Ann

ual Rep

t 2021

Financal statements

25. Cont

ingent liablite

s and commitment

Accounting po

licy

Financal guar

antee contr

acts and loan com

mitments

The G

roup i

ssue

s ﬁnanca

l guaran

tee con

tract

s and l

oan comm

itme

nts in r

etur

n for fe

es. Fin

ancal gu

arante

e contr

acts

and any lo

an comm

itmen

ts is

sue

d at below-m

arket in

teres

t rates ar

e intiall

y reco

gnise

d at the

ir fair valu

e as a ﬁnan

cal

liabl

, and su

bseq

uent

ly mea

sure

d at the hi

gher of t

he intia

l value le

ss the c

umula

tive amo

unt of in

come re

cogni

sed in

acco

rdance w

ith th

e prin

cples of I

FRS 15 Revenu

e from C

ontra

cts w

ith Cu

stome

rs an

d their ex

pect

ed cre

dit los

s provis

on.

Loan co

mmitm

ent

s may b

e design

ated a

t fair valu

e throu

gh proﬁt o

r loss w

here th

at is th

e busin

ess m

odel u

nder w

hich suc

cont

ract

s are he

ld. Not

ional val

ues of ﬁn

ancal gu

arant

ee cont

ract

s and lo

an commit

ment

s are di

sclos

ed in th

e tabl

e below.

Financ

al guaran

tees

, tra

de credi

ts an

d irrevoc

able le

tter

s of cre

dit are th

e noti

onal valu

es of con

tract

s is

sued by t

he Gro

’

ransa

ction B

ankin

g busi

ness f

or whic

h an oblig

aton to m

ake a pay

ment ha

s not ar

isen a

t the rep

ort

ing dat

e. T

ansac

tion

Ban

king w

ill iss

ue cont

ract

s to clien

ts an

d count

erp

artie

s of clie

nts

, whe

reby in the eve

nt the h

older o

f the con

tract i

s not

pai

d, the G

roup w

ill reimb

urs

e the ho

lder o

f the con

tract fo

r the act

ual ﬁna

ncal los

s suf

fere

d. The

se cont

ract

s have var

ious

leg

al for

ms such a

s lett

ers o

f credit

, gua

rante

e contra

cts a

nd per

form

ance bo

nds

. The con

tract

s are is

sue

d to facilt

ate

tra

de thro

ugh exp

ort an

d impo

rt bus

ines

s, prov

ide gu

arante

es to ﬁna

ncal ins

ttut

ions w

here th

e Gro

up has a lo

cal pre

sence

as wel

l as guar

antee

ing proje

ct ﬁnan

cng involv

ng larg

e const

ruct

ion pro

ject

s unde

rtaken by s

overeign

s and cor

porat

es.

The c

ontra

cts m

ay cont

ain per

form

ance cl

ause

s which re

quire t

he coun

terp

art

y p

erfor

ming s

vic

es or prov

idng go

ods to

et cert

ain cond

iton

s befor

e a right t

o pay

ment is a

chieved

, however th

e Grou

p does n

ot guar

antee t

his pe

rfor

mance.

The G

roup w

ill onl

y guara

ntee t

he cred

it of the co

unte

rpar

y pay

ing for t

he ser

ices or g

ood

Com

mitm

ent

s are whe

re the G

roup h

as conﬁr

med it

s int

enton t

o provid

e fun

ds to a cus

tomer o

r on beh

alf of a cus

tome

und

er pres

pecif

e

d term

s and con

diton

s in the f

orm of lo

ans

, overdraf

, fu

ture gu

arant

ees, w

het

her canc

ellabl

e or not an

the G

roup h

as not m

ade p

ayme

nts a

t the ba

lance sh

eet da

te; thos

e inst

rum

ent

s are incl

uded in t

hese ﬁ

nancal s

tatem

ent

as ‘commi

tmen

ts’

. Co

mmitm

ent

s and con

tinge

nt liabli

tes are g

enera

lly con

sidere

d on dem

and as t

he Gro

up may h

ave to

hon

our th

em, or t

he clien

t may dr

aw down a

t any time.

‘Cap

ital com

mitme

nts’ a

re cont

ractu

al commit

ment

s th

e Grou

p has ent

ered i

nto to pu

rchas

e non-ﬁna

ncal as

set

The t

able b

elow show

s the con

tract o

r under

lyi

ng prin

cpal am

ount

s of unm

atur

ed of

-balan

ce she

et tran

sact

ions at t

bal

ance she

et dat

e. The co

ntract o

r unde

rlyi

ng pri

ncpal am

ount

s indca

te the vo

lume of b

usine

ss ou

tst

andin

g and do no

represent amounts at risk.

2021

$millon

2020

$millo

Financal guarant

ees and trade credit

Financal guarantees, trad

e credits and irrevocable letter

s of credit

58,535

3,8

58,535

3,8

Commitments

Und

rawn f

orm

al stan

dby facil

ties

, cred

it line

s and ot

her co

mmitm

ent

s to le

e year and ove

68,848

Les

s than o

ne year

,306

Unconditonall

cancellable

,67

60,0

158,523

53,

403

Capital commitme

nts

ntrac

ted cap

ital ex

pen

ditu

re approv

ed by the d

irect

ors b

ut no

t provid

ed fo

r in the

se acco

unt

124

135

f whi

ch th

e Gro

up ha

s com

mitm

ent

s to

tall

ing $96 m

illo

n to pu

rch

ase ai

rcra

ft f

or del

iver

y i

n 2022 (

31 De

cemb

er 2020: $

110 mi

llon). Pre-

del

iver

y p

aym

ent

s of

$26 m

illo

n (2020: $n

il) ha

ve be

en ma

de in re

spe

ct of t

hes

e com

mitm

ent

As s

et out i

n Note 26

, the G

roup ha

s conti

ngent l

iablite

s in resp

ect of ce

rtai

n legal a

nd regu

lato

y matte

rs fo

r which it i

s not

prac

ticabl

e to est

imate t

he ﬁnan

cal impa

ct as the

re are many f

actor

s that m

ay af

fect t

he rang

e of pos

sible o

utcom

es.

390

Standard Chartered

– An

nual Re

por

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

26. Legal and regulator

y matters

Accounting po

licy

Whe

re appro

priat

e, the G

roup r

ecogni

ses a pr

ovison f

or liabli

tes wh

en it is pr

obabl

e that an o

utﬂow of e

cono

mic res

ources

emb

ody

ing eco

nomic b

eneﬁt

s will b

e requ

ired, a

nd for wh

ich a reli

able es

timat

e can be ma

de of th

e obliga

ton. T

unce

rtai

ntes in

heren

t in lega

l and reg

ulato

y matt

ers af

ct the am

ount an

d timng o

f any poten

tial ou

tﬂows w

ith res

pect

to wh

ich provi

sons h

ave be

en esta

blish

ed. Th

ese un

certa

intes a

lso me

an that i

t is not p

ossi

ble to gi

ve an aggre

gate

estimate of con

tingent liab

lites arisng

from such legal

and regulator

atters.

The Group receives

gal

claims against it in

a number of jursdict

and is sub

ject to r

egulator

y and

enforcement

invest

gatio

ns and pr

ocee

dings f

rom ti

me to tim

e. Apar

t fro

m the ma

tter

s des

cribe

d bel

, the G

rou

p curre

ntly co

nside

rs no

of th

e ongo

ing clai

ms, inves

tgat

ions or p

roce

eding

s to be ma

teria

l. However, in light of t

he unce

rtai

ntes invol

ved in su

mat

ter

s there c

an be no a

ssura

nce tha

t the ou

tcome o

f a part

icula

r matte

r or mat

ter

s curre

ntly n

ot cons

idere

d to be ma

teri

y not ult

imate

ly be m

ateri

al to the G

roup’

s res

ult

s in a par

ticul

ar repo

rtin

g peri

od dep

endin

g on, amo

ng oth

er thin

gs, t

amo

unt of th

e los

s result

ing f

rom the m

atte

) and t

he resu

lts o

ther

ise re

port

ed for s

uch pe

riod

Sinc

e 2014, the G

roup h

as be

en name

d as a def

endan

t in a ser

ies of la

wsuit

s th

at have b

een ﬁle

d in the Un

ited S

tates D

istr

ct

urt

s for th

e Sou

ther

n and East

ern Di

strct

s of N

ew Y

rk aga

inst a nu

mber of b

ank

s (

cludng S

tand

ard Char

tere

d Bank o

r its

afﬁ

lates

) on b

ehalf o

f plaint

ff

s who ar

e, or are re

lati

ves of

, v

ictms o

f variou

s terr

oris

t attac

ks in Ira

q and Af

ghanis

tan. Th

e most

rec

ent law

suit was ﬁl

ed in Aug

ust 2021 and co

ncern

s ter

roris

t atta

cks th

at occu

rred i

n Afghan

istan b

ween 2011 an

d 2016.

The p

laint

s in each o

f thes

e laws

uit

s have alle

ged t

hat th

e defen

dant ba

nks ai

ded and a

bett

ed the u

nlaw

ful c

onduc

t of

U.S

. sanct

ione

d part

ies in br

each o

f the U.S

. Ant

error

ism Act

. While t

he cour

s have r

uled in f

avour o

f the ba

nks’ mo

tion

s to

dism

ss in ﬁve o

f thes

e laws

uit

s, plai

ntf

fs’ ha

ve appe

aled or a

re expe

cted t

o appe

al again

st cer

tain of t

hese ju

dgem

ent

The r

emainn

g case

s are at an ear

ly pro

cedu

ral sta

ge and, exce

pt for t

he law

suit ﬁle

d in Augus

t 20

1, ha

ve been s

tayed p

endin

the o

utcom

es of th

e appe

als in th

e disms

sed c

ases

. None o

f thes

e laws

uit

s have sp

ecif

ed t

he amou

nt of dam

ages c

laime

In Jan

uar

y 2020, a shareh

older d

eri

vatve com

plaint wa

s ﬁled by th

e Cit

y of Phil

adelp

ha in New Y

ork S

tate C

ourt a

gains

t 45

cur

rent an

d form

er direc

tor

s and seni

or ofﬁ

cers o

f the G

roup. It i

s allege

d that t

he ind

vidu

als bre

ache

d their d

uties t

o the G

roup

and ca

used a wa

ste of co

rpo

rate as

set

s by per

mittn

g the co

nduct t

hat ga

ve rise t

o the cos

ts an

d loss

es to th

e Grou

p relat

to le

gac

y condu

ct and con

trol is

sues

. In Mar

ch 20

1, an am

ende

d compla

int was se

ved in wh

ich SCB and s

even ind

vidua

were removed from the cas

e. Standard Charte

red PL

C and Standard Char

tered Holding

s Limted remained as name

d “

minal

def

endan

ts” in t

he comp

laint

. In May 2021

, Stand

ard Char

tere

d PL

C ﬁl

ed a mot

ion to di

smss t

he comp

laint

. On 2 Feb

ruar

y 202

the N

ew Y

ork St

ate Co

urt r

uled in f

avour o

f Stan

dard Char

ter

ed PL

’

s m

otio

n to dism

ss the c

omplai

nt. T

he plain

tff

s ha

ve a

right of appe

al.

Sinc

e Octob

er 2020

, t

wo l

awsui

ts ha

ve bee

n ﬁled in t

he Engli

sh High C

ourt a

gains

t Stand

ard Char

tere

d PL

C on b

ehalf o

f more

than 300 shareholders in rela

ion

to alleged untrue and/

or misleadng statements and

or omissons in

informaton published by

Sta

ndard Ch

arte

red PLC in its r

ight

s issu

e prosp

ect

uses o

f 2008, 201

0 and 2015 an

or pub

lic sta

temen

ts re

gardin

g the G

roup

’s

historc sanctions, mone

y laundering and ﬁnanca

l crime compliance

issues. These lawsuits have been brought under sections

90 and 9

A o

f the Finan

cal Ser

ices an

d Market

s Act 200

0. Sect

ion 90 pe

rmit

s sha

rehol

der

s to pur

sue a cl

aim if they a

cquire

sha

res, an

d suf

fer los

s, as a r

esult o

f misle

adng s

tatem

ent

s in, or om

isso

ns of ne

cess

y info

rmat

on fro

m, a pros

pect

us or

list

ng par

ticu

lars

. Sect

ion 90A per

mit

s share

hold

ers to p

urs

ue a clai

m if they acq

uire, ho

ld or dis

pose o

f share

s in relia

nce

upon a knowingly

or recklessly made untrue or misleadng

statement in, or dishonest omiss

on of requir

ed informaton from

published informaton, or

if there has been a dishonest delay

in publishng rele

vant informaton. These lawsuits are

at an early

procedural stage.

As t

he Gro

up has p

revio

usly di

sclo

sed, B

erna

rd Mado

’s 2

08 con

fess

ion to r

unnin

g a Ponzi s

cheme t

hroug

h Ber

nard L. M

adof

Invest

ment S

ecur

ites LLC (BMIS) g

ave ris

e to a num

ber of l

awsui

ts ag

ainst t

he Gro

up. BMI

S and th

e Fairf

el

d fun

ds (

whi

invest

ed in BMI

S) are in ba

nkr

uptc

y and liq

udati

on, res

pect

ively. Bet

ween 201

0 and 2012

, ﬁve law

suit

s were bro

ught ag

ainst

the G

roup by t

he BMI

S bank

rup

tcy t

rust

ee and t

he Fair

fe

ld fu

nds’ liq

udato

, in each ca

se se

eking t

o recover f

und

s paid to t

Gro

’s client

s pur

suan

t to red

empti

on req

uest

s mad

e prior t

o BMIS’ b

ankr

uptc

y ﬁlng

. The tot

al amou

nt sou

ght in th

ese cas

excee

ds USD 30

0 millon

, excludi

ng any pre-ju

dgmen

t inter

est th

at may b

e awarde

d. The f

our la

wsuit

s comm

ence

d by the

Fair

fe

ld fu

nds’ liq

udato

rs ha

ve bee

n disms

sed an

d the app

eals o

f thos

e disms

sals by t

he f

unds’ liq

udato

rs are o

ngoin

g. The

law

suit br

ought a

gains

t the Gr

oup by th

e BMIS b

ankr

uptc

y tr

uste

e had be

en sta

yed pen

ding a r

uling by t

he US Se

cond Cir

cut

urt of A

ppea

ls in rel

ated ca

ses bro

ught by th

e BMIS b

ankr

upt

cy tr

ust

ee agai

nst ot

her def

endan

ts th

at had b

een di

smss

ed.

In Augu

st 2021, th

e US Cou

rt of Ap

peal

s issu

ed it

s rul

ing in th

e relat

ed cas

es with t

he res

ult tha

t the BM

IS bank

ptcy t

rus

tee’s

law

suit ag

ainst t

he Gro

up is no l

onger s

tayed a

nd is now o

ngoin

g. While t

he Gro

up cont

inue

s to vigo

rous

ly defe

nd the

law

suit

s, th

ere is a ra

nge of p

ossib

le out

comes i

n this lit

gati

on.

sed on t

he fact

s cur

rent

ly know

n, it is n

ot pos

sible f

or the G

roup t

o predi

ct the ou

tcom

e of thes

e law

suit

391

Standard Chartered

– An

nual Re

por

t 2021

Financal statements

. Subor

dinated li

ablites an

d other b

orrow

d funds

Accounting po

licy

Sub

ordin

ated li

ablite

s and oth

er bor

rowed f

und

s are clas

sif

ed a

s ﬁnancal i

nstr

umen

. Refer to N

ote 13 Finan

cal

instrument

s for the acc

unting policy

All subordin

ated liablites are unsecur

ed, unguarante

ed and subordinate

d to the claims of other cre

ditors includng w

ithout

limt

ation

, custo

mer dep

osit

s and d

eposi

ts by ba

nks

. The G

roup ha

s the r

ight to s

ettl

e thes

e debt in

str

ument

s in cer

tain

circu

mstan

ces, a

s set ou

t in the co

ntrac

tual ag

reem

ent

s. Whe

re a debt in

str

umen

t is callab

le, the i

ssu

er has th

e righ

t to call.

2021

$millon

2020

$millo

Subordinated loan capital

– iss

ued

sub

sidary undertakings

200 mill

on 7

5 per ce

nt sub

ordin

ate

d note

s (

callab

le 2022)¹

$700 mi

llon 8.0 p

er cen

t subo

rdina

ted no

tes d

ue 2031 (

calla

ble 2026

)¹

418

466

506

bord

ina

ted lo

an ca

pita

l – iss

ued by t

he Co

mpany

Primary capital

ﬂoating rate notes

$400 millon

ﬂoating-rate

undated subordinated notes

$300 mill

on ﬂ

oating-

rate unda

ted subordi

nated notes (

Series 2

)

$400 millon

ﬂoating-rate

undated subordinated notes

(Series 3

)

00 mill

on ﬂoating-

rate undated subordi

nated notes (

eries

)

£150 mil

lon ﬂoating

-rate undated subor

dinated notes

–

£90

0 millon 5

25 per c

ent su

bordi

nate

d not

es due 203

848

930

$2 bill

on 5.7 p

er cen

t subo

rdina

ted n

otes d

ue 204

2,36

370

$2 bill

on 3.95 per cen

t subo

rdina

ted n

otes d

ue 2023

,027

2,0

$1 bi

llon 5.

7 per ce

nt sub

ordin

ated n

ote

s due 202

1,000

1,0

$1 bi

llon 5.

2 per c

ent su

bordi

nate

d note

s due 2024

1,0

50 millo

n 5.

3 per ce

nt sub

ordin

ated n

ote

s due 2043

788

€

750 mil

lon 3.

625 per ce

nt sub

ordin

ate

d note

s due 202

868

955

€50

0 millo

n 3.125 pe

r cent su

bord

inate

d not

es due 2024

585

646

D 7

0 millo

n 4.4 pe

r cent su

bord

inate

d not

es due 2026 (

cal

lable 202

–

530

.25 b

illon 4

.3 p

er cent s

ubo

rdina

ted no

tes du

e 2027

1,250

,310

$1 bi

llon 3.

516 pe

r cent su

bord

inat

ed not

es du

e 20

30 (

cal

labl

e 20

1,0

997

$50

0 millo

n 4.8

86 pe

r cent su

bord

inate

d not

es due 203

3 (

callab

le 2028

)

543

£ 9

035 mill

on 7

.375% non-cumulative

irrede

emable

preference shares (

reclassed as Debt

)

129

134

£ 99

.250 mill

on 8.

25%

non-cumulative irredeemable preference shares

(

reclassed as Debt

)

134

138

€ 1 bill

on 2.

5 per ce

nt sub

ordin

ate

d debt 2030

,12

,217

.25 b

illon 3

.265 p

er cen

t subo

rdina

ted no

tes du

e 2036

1,1

252

€1 b

illon 1

.200 p

er cen

t ﬁxed rat

e rese

t date

d sub

ordin

ated n

ote

s due 2031 (

call

able 2026

)

1,114

–

6,1

,14

al for G

rou

16,64

16,

654

ued by S

tan

dard C

har

ter

ed Ba

In t

he ba

lan

ce she

et of t

he C

omp

any th

e amou

nt re

cog

nise

d is $1

6,162 mil

lon (

2020: $16

,069 mi

llon), wit

h the d

iff

ere

nce be

ing t

he ef

ct of he

dge a

cco

unti

ach

ieve

d on a Gr

oup b

asi

hes

e not

es wi

ll be su

bje

ct to re

med

iat

on un

der i

nter

est r

ate b

ench

mar

k ref

orm

. Ple

ase r

efer t

o Not

e 13 fo

r fur

er inf

orm

at

on on t

his

392

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

. Subor

dinated li

ablites an

d other b

orrow

d funds

continued

2021

USD

$millon

GBP

$millon

EUR

$millon

Others

$millon

Fix

rate subordinated debt

11,636

,16

3,689

–

,485

Floating-

rate subordinated

debt

161

–

11,

797

3,689

–

16,6

2020

USD

$millo

GBP

$millo

EUR

$millo

Others

$millo

otal

$millo

Fix

rate subordinated debt

,87

1,25

2,81

Floating-

rate subordinated

debt

–

ota

12,03

1,270

2,81

530

,654

Red

empt

ion

s and re

purc

has

es du

ring t

he year

On 26 Ja

nuar

y 2021, S

tand

ard Char

tere

d PL

C exerci

sed it

s ri

ght to re

deem SG

D 7

00 mi

llon 4.4 p

er cent su

bordi

nate

d note

s 20

(

llable 2

021)

On 31 M

arch 2021, S

tandar

d Char

tered B

ank exerci

sed it

s ri

ght to re

deem t

he rema

inng USD 16 m

illon £ 150 m

illon und

ated

primar

y capital ﬂoa

ting rate notes

Issuance during

year

On 2

3 March 2021

, Stan

dard Cha

rter

ed PL

C i

ssue

d EUR 1 billo

n 1.2 p

er cent ﬁ

xed rate r

eset da

ted su

bordi

nated n

otes d

ue 2031

(

llable 2

026

)

28. Sh

are capital

, other e

quity i

nstr

ument

s and res

erves

Accounting po

licy

Financ

al inst

rume

s issu

ed are cl

assif

e

d as equ

y when t

here is n

o contr

actu

al oblig

aton to t

ransf

er cash

, othe

r ﬁnanca

set

s or iss

ue avail

able nu

mber o

f own equ

y instr

ume

nts

. Incre

ment

al cost

s dire

ctly at

trib

utabl

e to the i

ssue o

f new shar

or op

tion

s are show

n in equit

y a

s a dedu

ction

, net of t

ax, f

rom th

e proce

eds

curit

es whi

ch carr

y a di

scret

onar

y co

upon a

nd have n

o ﬁxed mat

urit

y or r

edem

ption d

ate are c

lass

if

ed as ot

her eq

uit

ins

tru

ment

s. Int

eres

t paym

ent

s on the

se se

curit

es are re

cogni

sed, n

et of ta

x, as di

strb

utio

ns fro

m equit

y in t

he per

iod in

whi

ch they are p

aid.

Whe

re the C

ompany o

r other m

embe

rs of t

he con

solid

ated G

roup p

urcha

se the C

ompany

’

s e

quit

y sha

re capit

al, the

con

sidera

ton pa

id is ded

ucte

d from t

he tot

al share

holde

rs’ e

quit

y of th

e Grou

p and/

or of the C

omp

any as T

reasu

y share

unt

il they are c

ancell

ed. Wh

ere suc

h shares a

re subs

eque

ntly s

old or r

eissu

ed, any co

nside

raton re

ceive

d is incl

uded i

sha

rehol

der

s’ equit

y of t

he Gr

oup and/

or th

e Comp

any

Number of

ordinary

millons

Ordinar

capital

millons

Ordinar

premium

millons

Preference

premium

millons

otal

capital and

share premium

millons

Other

equity

instruments

millons

At 1 Jan

uar

y 2020

,59

513

Cancellation

of shares inc

ludng share

y-ba

(

–

(

–

Addit

onal T

r 1 equi

ty i

ssu

ance

–

992

Addit

onal T

ier

1 equit

y redemption

–

(

)

At 31 De

cemb

er 2020

3,156

578

494

,518

Cancellation

of shares inc

ludng share

y-ba

(77)

(39)

–

(39)

–

Addit

onal T

r 1 equi

ty i

ssu

ance

–

2,728

Addit

onal T

ier

1 redemption

–

92)

Other movements

–

At 31 De

cemb

er 2021

,079

,539

494

254

ued an

d fu

lly p

aid or

din

y sha

res o

f 50 cen

ts e

ach

Includes

preference share

capital of

$75,000

393

Standard Chartered

– Ann

ual Rep

ort 202

Financal statements

28. Sh

are capital

, other e

quity i

nstr

ument

s and res

erves

continued

Share buy

-back

On 2

5 Febr

uar

y 2021, t

he Gro

up anno

unce

d the bu

y-back p

rogram

me for a sh

are bu

y-back of i

ts or

dinar

y sh

ares of $

0.50 ea

ch.

Nom

inal valu

e of shar

e purch

ases wa

s $19 millo

n, and th

e tota

l consid

erato

n paid was $2

55 millo

n (

cludng $2 m

illon of f

ees

and st

amp du

). The t

otal nu

mber o

f share

s purch

ased wa

s 37

9 repre

sent

ing 1.18 per c

ent of th

e ordin

y share

s in iss

ue.

The n

omina

l value of t

he shar

es was tra

nsfe

rred f

rom th

e share ca

pital to t

he capit

al red

empti

on rese

ve accou

nt. Th

e share

were

purchased by Stand

ard C

hartered PL

C on v

arious excha

nges

not includ

ng the Hong K

ong Stock

Exchange.

On 3 Aug

ust 2021, t

he Gro

up anno

unce

d the bu

y-back p

rogram

me for a sh

are bu

y-back of i

ts or

dinar

y sh

ares of $

0.50 ea

ch.

Nom

inal valu

e of shar

e purch

ases wa

s $20 millon, an

d the to

tal con

sider

aton p

aid was $251 m

illon (includ

ng $1 millo

n of fee

and st

amp du

). The t

otal nu

mber o

f share

s purch

ased wa

s 39

4,7

63 r

epres

entin

g 1.

28 per cen

t of the o

rdinar

y s

hares in i

ssu

The n

omina

l value of t

he shar

es was tra

nsfe

rred f

rom th

e share ca

pital to t

he capit

al red

empti

on rese

ve accou

nt. Th

e share

were

purchased by Stand

ard C

hartered PL

C on v

arious excha

nges

not includ

ng the Hong K

ong Stock

Exchange.

Number of

ordinar

hares

Highest

price paid

Lowe

price paid

verage

price paid

per share

Aggreg

ate

price paid

Aggreg

ate

price paid

March 20

399

5.09200

4.68000

253,

3,477

August

2021

23,892,15

4.68200

4.40200

4.5501

108,73

149

,886,418

September 20

6,02

,60

4.64600

670

4.51573

2,38

,34

100,

113,434

Ordinar

y share capital

In acco

rdanc

e with t

he Comp

anies Act 20

06 the C

ompa

ny does no

t have au

thor

ise

d share ca

pital. T

he nom

inal valu

e of each

ordinar

y share is 50 cent

ring t

he per

iod nil s

hares we

re issu

ed und

er emp

loyee shar

e plans

Preference share capi

tal

At 31 De

cembe

r 20

1, th

e Comp

any had 15

,000 $5 n

on-cum

ulati

ve rede

emab

le pref

erence s

hares i

n issu

e, with a p

remiu

m of

$99

,995 mak

ing a pai

d-up amo

unt per p

refer

ence sh

are of $1

00,000. T

he pref

erenc

e share

s are red

eemab

le at th

e optio

n of the

Com

pany and ar

e clas

sif

ed in e

quit

The a

vailabl

e proﬁt

s of th

e Comp

any are dist

rbut

ed to t

he hold

ers o

f the is

sue

d prefe

rence sh

ares in p

rior

ty t

o pay

ment

mad

e to hol

ders o

f the or

dinar

y sh

ares an

d in prio

rt

y to, or p

ari pa

ssu w

ith, any p

ayme

nts t

o the ho

lder

s of any ot

her cla

ss of

sha

res in is

sue. On a w

indng u

p, the as

set

s of the C

omp

any are appli

ed to th

e hold

ers o

f the pre

feren

ce share

s in pri

ort

y to

any pa

ymen

t to the or

dinar

y sh

areho

lder

s and in p

rior

ty t

o, or par

i pas

su wit

h, the h

olde

rs of any ot

her sh

ares in i

ssue, f

or an

amo

unt eq

ual to any div

den

ds payab

le (

on appr

oval of the B

oard) an

d the no

minal val

ue of th

e share

s toge

ther w

ith any

prem

ium as d

eter

mined by t

he Boa

rd. The r

edee

mable p

refer

ence sh

ares are r

edee

mable a

t the pa

id-up amo

unt (

ich

incl

udes p

remium) at the op

tion of t

he Com

pany in acc

ordanc

e with t

he ter

ms of th

e share

s. Th

e holde

rs of t

he pref

erenc

sha

res are no

t entit

led to a

tten

d or vote at a

ny genera

l meet

ing, exce

pt whe

re any relevan

t divd

end due i

s not pa

id in fu

ll,

or wh

ere a res

olut

ion is pr

opos

ed var

ng the r

ight

s of the p

refer

ence sh

ares

Other equity instr

uments

The table

provides detai

ls of outstanding ﬁx

ed rate resetting

perp

etual

subordinated conti

ngent conv

ert

le A

T1 securites

sued by St

andar

d Chart

ered PLC. A

ll iss

uance

s are mad

e for gen

eral bu

sines

s pur

pose

s and to in

creas

e the re

gula

tor

y capi

tal

se of th

e Grou

Issuance date

Nominal value

Proceeds

net of

issue costs

Interest

rate

Coupon

payment

dates

Fir

st re

set d

ate

Conversion price

per ordinar

18 Aug

ust 2016

USD 9

99 mi

llon

USD 9

90 mill

2 Apri

l, 2 Octo

ber e

ach year

2 Apr

il 2022

18 Januar

y 2017

USD 1

,000 m

illon

USD 9

92 mill

on

2 Apr

il, 2 Oct

obe

r each ye

2 Apri

l 20

3 Jul

y 2019

D 750 mil

lon

D 552 millon

3 Apr

il, 3 Oc

tobe

r each ye

3 Octob

er 2024

0.9

26 Ju

ne 2020

USD 1,0

00 mil

lon

SD 992 m

illon

26 Jan

uar

, 2

6 July e

ach yea

26 Jan

uar

y 2026

USD 5.3

14 Jan

uar

y 2021

USD 1

50 mill

D 1,

239 mi

llon

4.75%

14 J

anuar

y, 14 Jul

y each ye

Jul

y 2031

USD 6

19 A

ugust 20

USD 1

00 mill

SD 1,4

89 millo

30%

19 Fe

bru

, 19 Aug

ust e

ach year

9 Augus

t 20

USD 6.382

ing th

e pe

rio

d, th

e Gro

up rep

urc

has

ed ar

oun

d USD 1,0

01 mi

llon o

f the

se s

ecur

it

es vi

a a ten

der o

ffe

ter

est ra

tes f

or th

e per

iod f

rom (and in

clu

dng

) the i

ssu

e date t

o (bu

t excl

udin

g) the ﬁ

t rese

t dat

Interest payable semi-annu

ally in

rears

Secu

rit

es ar

e res

ett

abl

e eac

h date f

alli

ng ﬁve y

ear

s, or a

n int

egra

l mul

tipl

e of ﬁv

e year

s, a

fte

r the ﬁ

rst r

ese

t dat

The A

1 issu

ances ab

ove are pri

marl

y purch

ased by i

nstt

ution

al investo

394

Standard Chartered

– Ann

ual Re

por

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

28. Sh

are capital

, other e

quity i

nstr

ument

s and res

erves

continued

The p

rincp

al ter

ms of th

e A

1 sec

urit

es are de

scrib

ed be

low:

•

The s

ecur

ites ar

e per

petu

al and re

deem

able, at t

he opt

ion of St

andar

d Chart

ered PLC in who

le but n

ot in par

t, on t

he ﬁr

inte

rest re

set da

te and ea

ch date f

alling ﬁ

ve years a

fter t

he ﬁr

st rese

t date

•

The s

ecur

ites ar

e also re

deem

able fo

r cert

ain reg

ulato

y or tax r

easo

ns on any da

te at 10

0 per cen

t of thei

r princp

al amo

unt

tog

ethe

r with any a

ccru

ed but u

npaid in

teres

t up to (bu

t excludin

g) the da

te ﬁxed fo

r rede

mptio

n. Any red

empt

ion is su

bject

to Standard

Chartered PL

C givng

notice to the

releva

nt regulator and the regulator g

ranting permisson to redeem

•

Inte

rest p

ayme

s on thes

e secu

rite

s will b

e accoun

ted fo

r as a div

dend.

•

Inte

rest on t

he se

curit

es is du

e and pa

yable on

ly at th

e sole an

d absol

ute dis

cret

on of Sta

ndard Ch

arte

red PLC, su

bject to

cer

tain ad

diton

al rest

ricto

ns set o

ut in th

e term

s and con

diton

s. Accord

ingly

, Sta

ndard Ch

arte

red PLC may at any ti

me ele

to can

cel any inte

rest p

ayme

nt (

or par

t the

reof

) wh

ich woul

d othe

wise b

e payab

le on any int

erest p

aym

ent dat

•

The s

ecur

ites co

nvert int

o ordina

y share

s of Stan

dard Ch

arte

red PL

, at a p

rede

term

ined pr

ice det

ailed i

n the tab

le above,

sho

uld th

e full

y load

ed Co

mmon Equi

y T

r 1 ratio o

f the Gr

oup fall b

elow 7

.0 p

er cent

. Appr

oximat

ely 94

7 mil

lon ordin

sha

res woul

d be req

uired t

o satis

y the co

nversi

on of all th

e secu

rite

s ment

ioned a

bove

The s

ecur

ites r

ank behi

nd the c

laims ag

ainst S

tand

ard Char

tere

d PL

C of

; (

) unsu

bordi

nated c

redit

ors; (b

) w

hich are ex

pres

sed

to be s

ubor

dinate

d to the c

laims o

f unsu

bordin

ated c

redito

rs of S

tand

ard Char

tere

d PL

C bu

t not f

urt

her or ot

her

ise; or (

)

whi

ch are, or ar

e expre

sse

d to be, ju

nor to th

e claim

s of othe

r credi

tor

s of Stan

dard Cha

rter

ed PL

, wh

ethe

r subo

rdinat

ed or

uns

ubor

dinate

d, oth

er tha

n claims w

hich ran

k, or ar

e expre

sse

d to rank

, par

i pas

su with

, or juno

r to, the c

laims o

f holde

rs of t

T1 se

curit

es in a wi

ndng–

up occu

rri

ng pri

or to the c

onvers

ion tr

igger.

Reserv

The c

onst

ituen

ts of t

he res

ves are s

ummar

ise

d as follow

•

The c

apital re

ser

ve re

prese

nts t

he exchan

ge dif

feren

ce on red

enom

inato

n of share c

apital an

d share p

remiu

m from s

terli

to US d

ollar

s in 2001

. The capi

tal red

empti

on res

ve repre

sent

s the n

omina

l value of p

refere

nce sh

ares re

deem

•

The a

mount

s in th

e ‘Capi

tal and M

erger Res

ve’ repr

esen

, the pre

mium ar

isng on s

hares i

ssue

d usin

g a cash box ﬁn

ancng

str

uct

ure, whi

ch requ

ired th

e Comp

any to cre

ate a mer

ger res

ve und

er sect

ion 612 of the C

ompa

nies Act 2006

. Shar

es were

sued u

sing thi

s str

uctu

re in 2005 an

d 2006 to a

ssis

t in the f

undin

g of Korea ($1.9 billon

) an

d T

wan ($1.

2 billon

) a

cquist

ions

in 200

8, 2010 an

d 2015 for t

he share

s iss

ued by way o

f a right

s is

sue, pr

imar

ly for cap

ital mai

ntena

nce req

uirem

ent

s, and f

the s

hares i

ssue

d in 2009 by wa

y of an acce

lerat

ed bo

ok build

, the pr

ocee

ds of whi

ch were us

ed in th

e ordina

y cour

se of

bus

ines

s of the G

roup. T

he fu

nding r

aised by t

he 2008

, 2010 and 201

5 righ

ts is

sues a

nd 2009 s

hare is

sue was f

ully r

etain

wit

hn the C

ompany. Of the 2015 f

und

ing, $1

.5 bi

llon was us

ed to su

bscr

ibe to a

dditon

al equ

y in Stan

dard Char

ter

ed Bank

a who

lly own

ed sub

sidar

y of t

he Co

mpany

. A

part f

rom th

e Korea, T

aiwan a

nd Stan

dard Cha

rter

ed Ban

k fun

ding, t

he mer

ger

reser

is considered r

ealised and distr

butable.

•

n cred

it adjus

tmen

t (

OCA) res

ve repr

esent

s th

e cumul

ative g

ains and l

osse

s on ﬁnan

cal liabli

tes de

signat

ed at fai

value t

hrou

gh proﬁt or l

oss re

latin

g to own cre

dit. G

ains a

nd los

ses on ﬁn

ancal lia

blites d

esign

ated a

t fair value t

hrou

proﬁt o

r loss r

elati

ng to own cr

edit in t

he year ha

ve bee

n taken thr

ough ot

her com

prehe

nsive i

ncome in

to thi

s reser

ve. O

der

ecogni

ton of ap

plicab

le inst

rum

ent

s, th

e balan

ce of any OC

A will no

t be rec

ycle

d to the in

come st

atem

ent, b

ut will b

tran

sfer

red w

ithn eq

uit

y to ret

ained e

arnin

•

Fair val

ue thro

ugh oth

er comp

rehen

sive in

come (F

CI) deb

t reser

ve r

epres

ent

s the un

reali

sed fai

r value gai

ns and lo

sses i

res

pect of ﬁ

nancal a

sset

s cla

ssif

e

d as F

CI, net o

f expe

cted c

redit lo

sse

s and taxat

ion. G

ains a

nd los

ses are d

efer

red in th

res

ve and are r

ecla

ssif

ed t

o the in

come st

ateme

nt whe

n the un

derl

ying a

sset i

s sold

, matu

res or be

come

s impare

•

CI equi

ty r

eser

ve r

epres

ent

s unrea

lised f

air value g

ains an

d loss

es in res

pect o

f ﬁnancal a

sse

ts cl

assif

e

d as F

CI, ne

t of

taxat

ion. G

ains a

nd los

ses are r

ecord

ed in thi

s reser

ve and neve

r rec

ycled to t

he inco

me stat

emen

•

sh ﬂow hed

ge res

ve repre

sent

s th

e effe

ctive p

ort

ion of th

e gains a

nd los

ses on d

eriva

tves th

at mee

t the cr

iter

a for

the

se t

ype

s of he

dges

. Gain

s and los

ses ar

e defer

red in t

his res

ve and ar

e recla

ssif

e

d to the in

come st

ateme

nt whe

n the

und

erly

ing he

dged i

tem af

fect

s proﬁt a

nd los

s or whe

n a forec

ast tra

nsact

ion is n

o longe

r expe

cted to o

ccur

•

ransl

ation r

eser

ve re

prese

s the cum

ulati

ve forei

gn exchang

e gains a

nd los

ses on t

ransl

ation o

f the ne

t investme

nt of th

Gro

up in for

eign op

erati

ons. S

ince 1 Jan

uar

y 200

4, gain

s and los

ses ar

e defer

red to t

his res

ve and ar

e recla

ssif

e

d to the

inco

me stat

emen

t when t

he und

erly

ing for

eign op

eratio

n is disp

ose

d. Gai

ns and lo

sse

s arisn

g from d

eriva

tves us

ed as

hed

ges of n

et invest

ment

s are ne

tted a

gains

t the for

eign excha

nge gain

s and lo

sses o

n trans

lati

on of the n

et invest

ment

of the foreign operations

•

Retain

ed ear

ning

s repre

sent

s, pr

oﬁts a

nd oth

er compr

ehen

sive inco

me ear

ned by t

he Gro

up and Co

mpany in t

he cur

rent

and pr

ior p

erio

ds, to

geth

er wit

h the af

ter

tax inc

reas

e relat

ing to eq

uit

y-set

tled s

hare op

tion

s, les

s div

dend di

strb

utio

ns,

own sh

ares he

ld (

asur

y s

hares

) a

nd share b

uy-ba

cks

A sub

stant

ial par

t of the G

roup’

s res

ves is h

eld in over

sea

s subsi

dar

y und

erta

king

s and bran

ches

, prin

cpally t

o supp

ort lo

cal

operations or to

comply with local

regulations

. The

maintenance of local

regulator

y ca

pital ratios

could potentially restrict the

amo

unt of re

ser

ves w

hich can b

e remit

ted. In a

ddito

n, if th

ese over

sea

s reser

s were to b

e remit

ted, f

urt

her un

provid

taxation liablites might ari

se.

As a

t 31 Dece

mber 2021

, the dis

trbu

table r

eser

s of Stan

dard Ch

arte

red PL

C (the Co

mpany

) wer

e $15.0 bil

lon (31 De

cembe

2020: $14.

3 billon)

. Th

ese com

pris

ed ret

ained e

arnin

gs and $

12.6 bi

llon of th

e merge

r rese

ve accoun

t. Di

strb

ution o

f rese

ves is

subject to maint

aning min

mum capital requir

ements

395

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

28. Sh

are capital

, other e

quity i

nstr

ument

s and res

erves

continued

Own sha

res

Com

pute

rsh

are T

rust

ees (Jers

) Limte

d is the t

rus

tee of t

he 2004 E

mployee B

eneﬁt T

ust (‘2004 T

ust

’) an

d Ocori

an T

rust

ees

(

ers

) Limte

d (

orme

rly k

nown as B

ede

ll T

ust

ees Lim

ted) is t

he tr

uste

e of the 19

95 Empl

oyees’ Sh

are Ow

ner

ship Plan T

ust

(‘

1995 T

rus

t’

)

. T

he 2004 T

ust is us

ed in co

njunct

on with t

he Gr

oup

’s employe

e share s

cheme

s and th

e 1995 T

rus

t is use

d for th

deli

ver

y of ot

her em

ployee sh

are-ba

sed p

aym

ent

s (

such a

s upfr

ont shar

es and ﬁxe

d pay all

owances

). Gro

up comp

anies f

und

the

se tr

ust

s fro

m time to t

ime to en

able t

he tr

uste

es to acq

uire sha

res to sa

tisf

y t

hese a

rrang

emen

xcept as di

sclo

sed, n

eithe

r the Co

mpany no

r any of it

s subsi

darie

s has bo

ught

, sold o

r rede

emed a

ny secur

ites o

f the

Com

pany list

ed on T

he Sto

ck Exch

ange o

f Hong Kong L

imted d

urin

g the pe

riod

. Detai

ls of th

e share

s purch

ased a

nd held by

the t

rus

ts ar

e set ou

t below.

2021

2020

202

2020

2021

2020

Shares pur

chased during

the period

–

999

,210

36,487

Mar

ket pr

ice of sh

ares p

urcha

sed



–

237

108

Shares tra

sferred

bet

ween trusts

–

(2,

999

,210

)

–

,210

–

Sha

res he

ld at th

e end of t

he pe

riod

–

,46

1,243

666

,46

1,243

,666

Maximum number of shares

held

dur

ing t

he per

iod

23,076,993

262

ote t

hat 3

5,768 sh

are

s were p

urc

has

ed by th

e tr

ust

ee of t

he 200

4 T

st us

ing $

0.2 mi

llon p

ticp

ant s

ings a

s par

t of S

hare

sav

e exerc

ise

Divdend waiv

ers

The t

rus

tees o

f the 200

4 T

ust

, whic

h hold

s ordina

y share

s in Stan

dard Char

tere

d PL

C in co

nnec

tion wi

th the o

perat

ion of it

emp

loyee sha

re plan

s, have l

odge

d stand

ing ins

tru

ctons i

n relat

ion to sh

ares he

ld by them t

hat ha

ve not be

en allo

cated t

emp

loyees

, where

by any divd

end is wai

ved on th

e balan

ce of ord

inar

y sh

ares and r

ecalcu

late

d and paid a

t the rat

e of 0.01p

per s

hare.

ange

s in sha

re cap

ital a

nd ot

her eq

uit

y ins

tru

ment

s of S

tand

ard Ch

art

ered P

C s

ubs

idar

ies

The t

able b

elow det

ails th

e trans

actio

ns in eq

uit

y inst

rum

ent

s (

cludn

g convert

ible and hy

brid i

nstr

umen

) of t

he Gro

’s

subsidaries, includ

ng issuances, conversions, redemptions, purchase or c

ancellation. This is required

der

Hong K

ong

Listng requirements, appendix 16, paragraph 10

Name and registered addres

Countr

y of

incorporation

Descripton

of shares

Issued

(

redeemed)

capital

Issued

(

redeemed)

Proportion

of shares

held

(%)

The follo

wing companies

e the

address of 1

Basinghall A

venue, London,

EC2V 5DD, Un

ited K

ingd

SCMB Overseas Limted

nited Kingdom

£0

.10

inar

y shares

£1,500,

000

15,000

,000

100

Standard Char

tered Bank

United Kingdom

$1.00 Ordinar

y shares

$1,273,000,

000

1,273,000

,000

100

Standard

Chartered Holdings Lim

ted

United Kingdom

$2.00 Ordinar

y shares

$1,273,000

,000

636,500,

000

100

Standard

Chartered Overseas Holdings

Limte

United Kingdom

£1.00 Ordinar

y shares

£(

,087

)

(

,087

)

100

Standard

Chartered UK Holdings

Limted

United Kingdom

£10.

inary shares

£16

,240

340

,724

,034

100

The follo

wing companies

e the

address of Thomas

use,

4 E

ccleston

uare, Lo

ndon

, SW1V 1

, Unit

Kingdom

Zodi

a Custo

dy Li

mted

United Kingdom

1.00 Ordinar

y share

$14,886,435

14,886,4

100

Zodia

Holdings Lim

United Kingdom

$1.00 Ordinar

y-A

100

The follo

wing companies

e the

address of Spaces,

25 Wilton

Road,

Victora,

London, SW1V 1L

, U

nited

Kingdom

Zodia

Markets Holdings Lim

ted

United Kingdom

0 Ordinar

y shares

$10,0

0,000

5.01

396

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

Name and registered addres

Countr

y of

incorporation

Descripton

of shares

Issued

(

redeemed)

capital

Issued

(

redeemed)

Proportion

of shares

held

(%)

The follo

wing companies

e the

address of

15/

, T

wo International

Finance

ntre, N

o. 8 Financ

e Stre

et, C

ent

ral,

Hong K

ong

Marina Angeli

te Shippng

Limted

Hong K

ong

$ Ordinar

y shares

$2,

558,984

100

Marina Beryl Shippng

Limted

Hong K

ong

$ Ordin

ary share

100

Marina Eme

rald Shippng Limted

Hong Kong

$ Ordin

ary shar

$2,00

6,284

2,006,2

100

Marina Iridot

Shippng Li

mted

Hong K

ong

$ Ordinar

y shares

$2,880

258

2,880,258

100

Marina Mim

osa Limted

Hong

Kong

$ Ordinar

y shares

$16,356,848

16,356,84

100

Marina S

apphire Shippng Limted

Hong Kong

$ Ordinar

y shares

$2,36

1,1

,11

100

Marina T

ourm

aline Shippng Limted

Hong K

ong

$ Ordin

ary share

$2,566,7

2,56

6,77

The follo

wing company

has the address

of 32/F

, S

tand

ard Char

ter

ed Ban

Bui

ldng

, 4-4A D

es V

ux Roa

d, Cen

tral,

Hong K

ong

Mox B

ank Lim

ted

Hong Kong

HKD Ordinar

y shares

HKD

20,00

6,920,00

The follo

wing company

has the address

of S

econ

d Floo

, In

diqub

e Edge, K

hata N

571/

4, Sy

.No.6

4, Amba

lipura

Village, V

arth

ur Hobli, Marathahalli

Sub-Divsion, W

ard No

. 150

, Bengaluru,

560102, India.

Standard Char

tered Research and

ech

nolo

India Private

Limted

India

INR

10.00 A Equ

232

,039

203,964

100

The follo

wing company

has the address

of StandardCh

artered@Chiromo,

Num

ber 4

8, Westla

nds Roa

d, P

. O

. B

003 – 001

00, Nai

rob, Kenya

Standard

Chartered Bancassurance

Interm

ediar

y Lim

ted

Ken

KES

100.

00 Ordinar

KES4,000

,000

0,000

100

The follo

wing company

has the address

of C/

o IQ EQ C

orp

orat

e Ser

ices

(Mau

rit

us

) Ltd

, 33 Edith C

avel

l Stre

et,

Por

t Louis

, 11324, Mau

ritu

t

Mauritu

$1.00 Ordinar

y shares

$35,000

35,

000

The follo

wing company

has the address

of Standar

d Chartered Bank Nepa

Limted, Madan Bhan

dari Marg, W

ard

No.3

4, Kathmandu Metropo

litan City

thmandu

Distrct,

Bagmati Z

one,

Kath

mandu,

Nepal

Standard

Chartered Bank Nepal L

imted

Nepal

NPR10

.00 Ordin

ary

R1,418

,023

,00

14,

180,230

70.

The follo

wing companies

e the

address of 1

Basinghall A

venue, London,

EC2V 5DD, Un

ited K

ingd

Standard

Chartered Holdings (

Africa

) B.

Netherlands

€4.50 Ord

inary shares

€1,800,

000

400,

000

Standard

Chartered Holdings

(Internationa

l) B.

Netherlands

€

4.50 Ordinary shares

€1,800,

000

400,

000

100

The follo

wing company

has the address

of 9 & 11

, Light

foo

t Bost

on Str

eet

Free

town

, Sier

ra Leon

Sta

ndar

d Char

tere

d Bank Si

erra Le

one

Limte

Sie

rra Leo

SLL1.00 Ordinar

SLL21,69

73,680

21,6

73,680

80.

The follo

wing companies

e the

add

ress o

f 8 Mar

ina Bo

ulevard

, #27

-0

Mar

ina B

ay Finan

cal Ce

ntre T

ower 1

018981, Singapore

Standard Char

tered Bank (

Singapore

)

Limte

Singapore

$ Ordinar

y-A shares

$868,671,601

868

71,601

100

Singapore

$ Ordinar

y-B shares

100

Singapore

$ Ordinar

y-C shares

4,04

296

4,04

0,2

100

Standard

Chartered Holdings

(Singa

pore

) Pr

ivat

e Limte

Sing

apore

$ Ordinar

y shares

$868,6

1,60

8,6

71,601

100

28. Sh

are capital

, other e

quity i

nstr

ument

s and res

erves

continued

397

Standard Chartered

– Ann

ual Rep

t 2021

Financal statements

Name and registered addres

Countr

y of

incorporation

Descripton

of shares

Issued

(

redeemed)

capital

Issued

(

redeemed)

Proportion

of shares

held

(%)

The follo

wing companies

e the

address of 80

Robinson Road,

#02

-00,

068898, Singapore

Autumn Life

Pte. Ltd.

Singapore

$ Ordinar

y-A shares

100

Car

dspa

l Pte. Lt

Singapore

$ Ordinar

y-A shares

,00

,000

,009

000

Dis

cover

y T

ech

nolo

gy Se

vice

s Pte. Lt

Singapore

$ Ordinar

y shares

,416,001

100

Pegasus

Dealmaking

Pte.

Ltd.

Singap

ore

$ Ordinar

y shares

100

Pow

er2SME Pte

. Ltd.

Singapore

$ Ordinar

y shares

$59

906

,501

906,

501

100

SCV Master Hol

ding Compan

y Pte.

Ltd.

Singap

ore

$ Ordinar

y shares

,906,501

60,

906,501

100

V Resea

rch and D

evelop

ment Pt

e. Ltd.

Singapore

$ Ordinar

y shares

100

Solv-Indi

a Pte

. Ltd.

Singapore

$ Ordin

ary share

4,806,50

44,806,501

100

The follo

wing companies

e the

address of 1

Robinson

Road, #17

-01,

Crow

n At Robins

on, S

ingap

ore, 06

8907

Singapore

st Bank S

inga

pore L

imted

Singapore

SGD Ordin

ary share

GD19

0,00

190,0

00,0

The follo

wing company

has the address

of Roo

m 1810

15, Level 1

8, Bu

ildng 7

Keangnam Hanoi Landmark T

Pham H

ung Roa

d, Ca

u Giay N

ew Urb

Are

a, Me T

ri Ward, Na

m T

u L

iem Di

strc

Hanoi10000, Vietna

Standard Char

tered Bank (Vietn

)

Limte

Vietn

VND Charte

r Capital

VND

2,739

,600,

000,000

2,73

,600,

000,

000

100

den

omi

nat

on of 4

00,00

0 sha

res f

rom U

S$ Or

dina

y shar

es to U

S$ Or

dina

y-A shar

den

omin

ato

n of 1,

620,00

0 sha

res f

rom US

$ Ord

ina

ry s

har

es to U

S$ Or

dina

A sh

ares

Plea

se se

e Note 2

2 De

bt secu

rite

s in iss

ue for is

suan

ces and re

demp

tion

s of seni

or not

es.

Plea

se se

e Note 2

7 Subo

rdinat

ed liabl

ites an

d othe

r borr

owed fu

nds fo

r issu

ance and r

edem

ption

s of sub

ordin

ated li

ablite

and A

T1 s

ecur

ites

Plea

se se

e Note 4

0 Relate

d unde

rtak

ings o

f the Gr

oup for s

ubsid

aries l

iqudat

ed, di

ssol

ved or so

ld dur

ing th

e year

. Non-control

ling in

terests

Accounting po

licy

Non-controlli

interest

s are

asured a

t the non-controlling i

nterest

’

s proportionate share of the acqu

iree’s

identﬁable

net assets.

$millo

At 1 Jan

uar

y 2020

313

Income i

n equit

y a

ributabl

e to

non-control

ling interests

(

12)

Other proﬁ

s attributabl

e to

non-control

ling interests

mpreh

ensi

ve inco

me for t

he year

Distrbutions

(

20)

Other increases

At 31 De

cemb

er 2020

325

Income i

n equit

y a

ributabl

e to

non-control

ling interests

(15)

Other proﬁ

s attributabl

e to

non-control

ling interests

(

mpreh

ensi

ve inco

me for t

he year

(17

)

Distrbutions

(31)

Other increases

At 31 De

cemb

er 2021

371

Mov

emen

t rel

ate

d to no

n-co

ntr

olli

ng int

ere

s fro

m Mox Ba

nk Lim

te

d ($17 mil

lon)

Mov

emen

ts r

ela

ted t

o non-

con

trol

ling i

nte

res

ts f

rom M

ox Ban

k Limt

ed ($21 m

ill

), T

t Bank S

ing

apo

re Lim

ted ($

70 millo

), Zo

dia Ma

rket

s Ho

ldi

ngs Li

mte

l

28. Sh

are capital

, other e

quity i

nstr

ument

s and res

erves

continued

398

Standard Chartered

– Annu

al Repo

rt 202

Financal state

ments

Notes to the

ﬁnancal

statement

30.

Retirement beneﬁt obligatons

Accounting po

licy

The G

roup o

perat

es pen

sion an

d othe

r post

-re

tirem

ent be

neﬁt plan

s aroun

d the wor

ld, w

hich can b

e categ

oris

ed into

deﬁned contributon

plans and deﬁned beneﬁt

plans

. F

or deﬁned contributon plans, the Group pays c

ont

ributons

publicly or priva

tely adminster

d pension

plans on a statutor

y or

contractual basis, and such amounts are c

harged to

ope

ratin

g expe

nses

. The G

roup h

as no f

urth

er pa

ymen

t obliga

tons o

nce the c

ontr

ibuto

ns ha

ve been p

aid.

For f

unde

d deﬁne

d ben

eﬁt plan

s, the l

iablit

y re

cognis

ed in th

e balan

ce she

et is th

e prese

nt value o

f the deﬁn

ed be

neﬁt

obligaton

at the balance sheet date less the

fair value of

plan asset

s. For unfunded deﬁned beneﬁ

t plans the liab

lit

reco

gnis

ed at th

e balan

ce shee

t date is t

he pre

sent val

ue of th

e deﬁned b

eneﬁt o

bligat

on.

The d

eﬁned b

eneﬁt o

bligat

on is calc

ulate

d annua

lly by ind

epend

ent act

uari

es usin

g the pro

jecte

d unit me

thod

Actu

arial ga

ins and l

osse

s that ar

ise ar

e recog

nise

d in share

hold

ers’ e

quit

y and p

resen

ted in t

he stat

ement o

f othe

comp

rehen

sive in

come in t

he per

iod th

ey aris

e. The G

roup de

term

ines th

e net int

eres

t expen

se on t

he net de

ﬁned b

eneﬁt

liabl

y for the ye

ar by appl

ying t

he disc

ount ra

te use

d to mea

sure th

e deﬁne

d bene

ﬁt oblig

aton at t

he beg

innng of t

annu

al per

iod to t

he net d

eﬁned b

eneﬁt li

ablit

, tak

ing int

o accou

nt any chang

es in th

e net deﬁn

ed be

neﬁt liabl

y durin

the ye

ar as a re

sult of co

ntri

buton

s and be

neﬁt pa

yme

nts

. Net int

eres

t expen

se, th

e cost of t

he accr

ual of n

ew bene

ﬁts

ben

eﬁt enha

nceme

nts (

r reduc

tions

) a

nd admin

strat

ion exp

ens

es met dir

ectl

y from p

lan as

set

s are rec

ognis

ed in th

inco

me stat

emen

t in the p

erio

d in which t

hey were in

curre

Signﬁ

cant accounting estimates and judgements

The

re are many f

actor

s that a

ffe

ct the me

asur

ement o

f the re

tirem

ent be

neﬁt obli

gaton

s. Th

is mea

surem

ent re

quires t

use o

f estim

ates

, such a

s disco

unt rat

es, inﬂ

aton, p

ensi

on incre

ase

s, sal

y incre

ases

, and lif

e expe

ctanci

es whic

h are

inhe

rent

ly unce

rtain

. Disc

ount ra

tes are d

eter

mined by re

feren

ce to mar

ket yie

lds at th

e end of t

he rep

orti

ng per

iod on

high-

qualit

y co

rpo

rate bo

nds (

or, in count

ries w

here t

here is n

o deep m

arket in su

ch bon

ds, g

overnme

nt bon

) of a cur

renc

and t

erm con

sist

ent wit

h the cur

renc

y and t

erm of t

he pos

empl

oyment b

eneﬁt o

bligat

ons

. This is t

he appr

oach ad

opte

acro

ss our g

eogr

aphies

. Wher

e ther

e are inﬂat

on-linked b

onds a

vailab

le (

e.g. Unite

d King

dom and t

he eur

one

), the G

roup

der

ives inﬂ

aton b

ased o

n the mar

ket on th

ose bo

nds

, with t

he mar

ket yiel

d adjus

ted in re

spect o

f the Uni

ted Ki

ngdo

m to

take acc

ount of t

he fact t

hat liab

lites a

re linked to C

onsu

mer Pr

ice Index i

nﬂaton

, whe

reas t

he refe

rence b

onds ar

e linked

to Reta

il Price In

dex inﬂa

ton. W

here no i

nﬂaton-l

inked bo

nds exi

st, we d

eter

mine inﬂ

aton as

sump

tion

s base

d on a

comb

inato

n of long-

term fo

reca

sts an

d shor

-term i

nﬂaton d

ata. S

alar

y grow

th as

sumpt

ions r

eﬂect th

e Gro

’

s l

ong-te

exp

ectat

ions

, taki

ng into a

ccount f

ure bus

ines

s plans a

nd macr

oeco

nomic d

ata (pr

imarl

y expe

cted f

utu

re long-

term

inﬂat

on

). Demo

graphic a

ssum

ptio

ns, in

cludn

g mort

alit

y and t

urnove

r rates

, are t

ypi

cally se

t base

d on th

e assu

mptio

ns use

in th

e most re

cent ac

tuar

ial fu

nding val

uatio

n, and w

ill gene

rally u

se indu

str

y st

andard t

ables

, adju

sted w

here ap

propr

iate

to reﬂ

ect rec

ent hist

orc ex

per

ience an

r fut

ure exp

ecta

tions

. The s

ensit

vit

y of t

he liabl

ites to c

hange

s in the

sumpt

ions i

s shown in t

he Not

e below.

Retirement beneﬁt

obligatons comprise:

2021

$millon

2020

$millo

Deﬁned beneﬁt

plans obligaton

192

434

Deﬁned contributon

plans obligaton

Net obligaton

210

Retirement beneﬁt

charge comprises:

2021

$millon

2020

$millo

Deﬁn

ed be

neﬁt pl

ans

Deﬁned contributon

plans

315

arge a

gain

st pr

oﬁt (N

ote 7

)

377

358

he G

roup h

as du

rin

g the y

ear u

til

sed a

gain

st de

ﬁned c

ont

rib

uto

n pa

yme

s, $5

m for

feit

ed p

ens

ion co

ntr

ibu

ton

s in re

spe

ct of e

mplo

yees w

ho le

ft b

efo

re the

int

ere

s vest

ed f

ull

. T

he res

idu

al ba

lanc

e of fo

rfe

ite

d cont

rib

ut

ons i

s $17m

The G

roup o

perat

es over 60 d

eﬁned b

eneﬁt pl

ans acr

oss it

s geo

graph

ies, m

any of which a

re clos

ed to new e

ntran

ts wh

o now

jon de

ﬁned con

trib

uton a

rrang

ement

s. T

he aim of a

ll thes

e plans i

s, as p

art of t

he Gr

oup

’s commit

ment to ﬁ

nancal we

llbein

for e

mployee

s, to gi

ve employe

es the o

ppor

tuni

ty t

o save ap

propr

iatel

y for ret

irem

ent in a way t

hat is co

nsist

ent wit

h local

reg

ulati

ons

, taxati

on requ

ireme

nts an

d marke

t condit

ons. T

he deﬁn

ed ben

eﬁt plan

s expo

se the G

rou

p to curr

enc

y risk

, inte

rest

rate r

isk

, investm

ent ri

sk and ac

tuar

ial ris

ks su

ch as lon

gevit

y r

isk

The m

ater

ial hol

dings o

f governm

ent and c

orpo

rate b

onds sh

own on p

age 40

0 par

tially h

edge m

ovemen

ts in t

he liabli

tes

res

ultin

g from in

teres

t rate an

d inﬂato

n change

s. Se

ttin

g aside m

ovement

s fr

om oth

er dri

vers su

ch as cur

renc

y ﬂuct

uati

on,

the i

ncrea

ses in di

scoun

t rates i

n most ge

ograp

hies over 2021 ha

ve led t

o lower liabl

ites

. Thes

e have be

en par

tly o

set by

dec

reas

es in th

e value of b

onds h

eld but g

ood st

ock ma

rket per

for

mance h

as led t

o ass

ets b

roadl

y holdi

ng level over t

he year

res

ultin

g in a mater

ial fal

l in the pe

nsio

n deﬁct rep

orte

d. Th

ese movem

ent

s are show

n as act

uaria

l gains in t

he tab

les be

low

Con

trib

uton

s into a nu

mber o

f plans i

n excess of t

he amo

unt

s requi

red to f

und b

eneﬁt

s accr

uing h

ave also h

elpe

d to red

uce

the n

et deﬁct over t

he year.

The d

isclo

sures r

equir

ed und

er IAS 19 h

ave be

en calcul

ated by in

depe

ndent q

ualif

ed a

ctuar

ies b

ased o

n the mo

st rece

nt fu

act

uaria

l valuati

ons up

date

d, whe

re nece

ssar

y, to 31 Dec

ember 2021

399

Standard Chartered

– Ann

ual Re

por

t 2021

Financal statements

30.

Retirement beneﬁt obligatons

continued

Fun

The S

tand

ard Char

tere

d Pensio

n Fund (

he ‘UK Fu

nd’

) is the G

rou

’

s la

rgest p

ensio

n plan

, repre

senti

ng 58 pe

r cent (31

cembe

r 20

20: 6

3 per cen

) of t

otal p

ensio

n liablit

es. Th

e UK Fund i

s set up u

nder a tr

ust t

hat is le

gall

y separ

ate fro

m the B

ank

(

s form

al spo

nsor

) and, a

s requ

ired by UK l

egisl

aton

, at lea

st one th

ird of th

e tru

stee di

recto

rs are n

omina

ted by mem

ber

s; the

rem

ainder a

re appo

inted by t

he Ban

k. Th

e tru

stee di

recto

rs ha

ve a ﬁducar

y d

y to mem

ber

s and are re

spon

sible f

or gover

ning

the U

K Fund in ac

cordan

ce with i

ts T

st Dee

d and Rule

The U

K Fund was cl

ose

d to new ent

rant

s fro

m 1 July 19

98 and cl

osed t

o the acc

rual o

f new ben

eﬁts f

rom 1 Ap

ril 2018: al

l UK

emp

loyees are n

ow off

ered m

embe

rshi

p of a deﬁne

d contr

ibut

on plan

The ﬁ

nancal p

osito

n of the U

K Fund is re

gular

ly as

ses

sed by an in

depe

ndent q

ualif

ed a

ctuar

. Th

e fun

ding valu

ation a

at 31 D

ecemb

er 2020 was compl

eted in D

ecem

ber 2021 by the S

chem

e Actuar

y, T Kripp

s of Wills T

ower

s W

son, u

sing

sumpt

ions di

ffe

rent fr

om tho

se on pa

ge 399

, an

d agree

d with t

he UK Fun

d tru

stee. I

t showed t

hat th

e UK Fund was 9

nded a

t that d

ate, revea

ling a pa

st ser

ice deﬁct o

f $172 mil

lon (

127 mill

)

o repair t

he deﬁct

, thre

e annu

al cash p

ayme

nts e

ach of $

45 millo

n (

32.

9 mill

) were a

greed

, with t

he ﬁrs

t of the

se paid i

cembe

r 20

1, and t

wo f

urt

her ins

talme

nts t

o be pai

d in Dece

mber 202

2 and De

cembe

r 20

3. T

he agre

emen

t allows th

at, if

the f

und

ing po

siton im

proves to b

eing at o

r near a su

rplu

s in fu

ture ye

ars

, the pa

yme

nts d

ue in 2022 an

d 20

3 wil

l be red

uced or

elimn

ated

. In addit

on, an a

dditon

al pa

yment o

f $6

8 millon (£50 millo

) has b

een ma

de to to

p up the ex

istn

g escrow a

ccount

of $149 mi

llon (

110 millo

) whic

h exist

s to prov

ide se

curi

ty f

or fu

ture co

ntri

buto

ns.

The G

roup h

as not r

ecogn

ised a

ny addito

nal liabl

y under I

FRIC 14, a

s the Ba

nk has co

ntrol o

f any pens

ion sur

plus u

nder t

rus

t Deed a

nd Rules

Overseas plans

The p

rincp

al overs

eas de

ﬁned b

eneﬁt ar

range

ment

s ope

rated by t

he Gro

up are in G

erm

any

, Hon

g K

ng, In

dia, Je

rsey

, Kor

ea,

aiwan, Un

ited A

rab Emira

tes (UAE) an

d the Unit

ed Sta

tes of A

meri

ca (US)

. Pl

ans in G

erm

any

, Hong Kon

g, Indi

a, Korea, T

aiwa

and UAE rem

ain ope

n for accr

ual of f

ure ben

eﬁt

ssumptions

The p

rincp

al ﬁnanc

al assu

mpti

ons us

ed at 31 De

cemb

er 2021 were:

Funded plans

UK Fu

erseas P

lans

2021

2020

2021

2020

Discount rate

1.4

4 – 3.1

0.3 – 2

Price Inﬂation

2.6

2.2

.0 – 3.

1.0

– 3.0

Salar

y increa

ses

.5 – 4

9 – 4.0

Pension inc

reases

2.5

9 – 3

.3 – 2

he ra

nge o

f ass

ump

tion

s sho

wn is f

or th

e fun

d deﬁn

ed be

neﬁt o

ver

sea

s plan

s in G

erm

any, Hong Ko

ng, J

ers

ey, K

ea, T

iwan

, and t

he US

. The

se co

mpr

ise

aro

und 8

0 per c

ent o

f the t

otal l

iab

lit

es of ove

eas f

ded p

lan

Unfunded plans

US post

-ret

ireme

nt medi

cal

her

2021

2020

2021

2020

Discount rate

2.8

.2 – 6

.4 – 6.

Price inﬂaton

2.5

.0 – 4.0

Salar

y increa

ses

.7 – 7

5 – 7

Pension inc

reases

0.0 – 2

0.0 – 2.1

Post

-retirement me

dical rate

7% in 2021

reducing b

5% pe

annum to

5% in 202

7% i

n 2020

reducing

5% per

annum to

5% in 2024

he ra

nge o

f ass

ump

tion

s sho

wn is f

or th

e main u

und

ed de

ﬁned b

ene

ﬁt pla

ns in B

ahr

ain, I

ndia

, Kore

a, Th

aila

nd, UAE a

nd th

e UK. T

hey co

mpr

e arou

nd 90 p

cen

t of th

e tot

al lia

bli

tes o

f oth

er un

nde

d plan

The p

rincp

al non-ﬁn

ancal as

sump

tions a

re tho

se made f

or UK lif

e expe

ctanc

. Th

e UK mor

talit

y ta

bles ar

e S3PMA f

or male

and S

3PF

A fo

r femal

es, pr

oject

ed by year of b

irth w

ith th

e CMI 2019 impr

ovement m

odel w

ith a 1.

25% an

nual tr

end and in

tial

additon par

ameter of 0.25%. Scaling factors of

92% for male pensioners, 92% for female

ensioners, 92% for ma

le dependants

and 82% f

or fema

le dep

endant

s ha

ve been a

pplie

The r

esult

ing as

sumpt

ions f

or life ex

pect

anc

y for the U

K Fund are t

hat a mal

e memb

er curr

entl

y aged 6

0 will li

ve for 27 ye

ars

(31 De

cemb

er 202

0: 2

7 year

) and a fem

ale mem

ber fo

r 30 year

s (31 De

cembe

r 20

20: 3

0 years

) an

d a male m

embe

r curre

ntly

age

d 40 wil

l live for 2

9 years (3

1 Dece

mber 2020: 29 year

) and a fe

male me

mber f

or 31 year

s (31 De

cembe

r 20

20: 31 ye

ars

) af

ter

their 60th

birthdays

400

Standard Chartered

– A

nnu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

30.

Retirement beneﬁt obligatons

continued

Bot

h ﬁnanc

al and non

-ﬁnancal a

ssum

ption

s can be ex

pect

ed to cha

nge in th

e fu

ture, w

hich wou

ld aff

ect th

e value pla

ced

on th

e liablit

es. Fo

r example, c

hange

s at the r

epor

ting d

ate to on

e of the r

elevant act

uar

ial ass

umpt

ions

, holdi

ng oth

sumpt

ions co

nstan

t, wou

ld have a

ffe

cted th

e deﬁne

d bene

ﬁt oblig

aton by th

e amoun

ts sh

own be

low:

•

If th

e disco

unt rate i

ncrea

sed by 2

5 basi

s point

s th

e liablit

y wou

ld red

uce by appr

oximat

ely $6

5 millon fo

r the UK Fun

(31 De

cemb

er 202

0: $

75 millo

) and $

35 millon f

or the o

ther pl

ans (31 D

ecemb

er 2020: $40 m

illon

)

•

If th

e rate of in

ﬂaton in

crea

sed by 25 b

asis p

oint

s the l

iablit

, all

owing fo

r the co

nseq

uent im

pact on p

ensi

on and sa

lar

incr

ease

s would in

crea

se by approx

imate

ly $

45 millon fo

r the UK Fun

d (31 De

cembe

r 20

20: $5

0 millon

) an

d $20 millon fo

the o

ther p

lans (31 D

ecem

ber 2020: $25 millo

)

•

If th

e rate sal

arie

s incre

ase com

pare

d to inﬂato

n incre

ase

d by 25 bas

is poin

ts t

he liabli

ty wo

uld inc

reas

e by nil for t

UK Fun

d (31 Dece

mber 2020: nil) an

d approxi

matel

y $15 mil

lon for th

e oth

er plan

s (31 Dece

mber 2020: $15 m

illon

)

•

If lon

gevit

y ex

pect

ation

s incre

ase

d by one year t

he liabli

y would in

creas

e by approxi

matel

y $80 m

illon fo

r the UK Fun

(31 De

cemb

er 202

0: $

0 m

illon

) an

d $15 millo

n for th

e othe

r plans (

31 Dece

mber 2020: $20 millon

)

Alt

hough t

his ana

lysi

s does n

ot take acco

unt of t

he fu

ll distr

but

ion of ca

sh ﬂows ex

pecte

d, it do

es provi

de an appr

oximat

on of

the s

ensi

tvit

y t

o the mai

n assu

mptio

ns. W

hile chan

ges in o

ther a

ssum

ption

s would al

so ha

ve an impac

t, th

e eff

ect woul

d not

be a

s signﬁcant

Proﬁle of

plan obligatons

Funded plans

Unfunded plans

UK Fu

erseas

Post-retirement

medical

Other

ratio

n of the d

eﬁne

d bene

ﬁt obli

gato

n (

in ye

ars

)

(Du

ratio

n of the d

eﬁne

d bene

ﬁt obli

gato

n – 20

20)

neﬁt

s exp

ecte

d to be pa

id fro

m plan

neﬁt

s exp

ecte

d to be pa

id dur

ing 202

neﬁt

s exp

ecte

d to be pa

id dur

ing 202

neﬁt

s exp

ecte

d to be pa

id dur

ing 2024

neﬁt

s exp

ecte

d to be pa

id dur

ing 2025

neﬁt

s exp

ecte

d to be pa

id dur

ing 2026

neﬁt

s exp

ecte

d to be pa

id dur

ing 2027 t

o 20

514

489

Fund

values

The f

air value o

f ass

ets an

d pres

ent valu

e of liablit

es of t

he deﬁne

d bene

ﬁt plan

s were:

At 31

December

2021

2020

Funded plans

Unfunded plans

Funded plans

Unf

unded pla

UK Fu

$millon

Ove

rseas

plans

$millon

Post

retirement

medical

$millon

Other

$millon

UK Fund

$millo

Overseas

plans

$millo

retirement

medical

$millo

Other

$millo

Equi

tes

145

306

118

Gove

rnm

ent bo

nds

224

844

189

Corporate bonds

164

508

129

Absolute R

urn

Fund

–

Hedge funds

–

Insurance linked f

unds

–

Prop

ert

127

Der

ivat

ves

–

sh and e

quiva

lent

108

260

297

Others

otal f

air valu

e of as

set

1,0

,02

Pres

ent val

ue of lia

blite

(

822)

(

1,076

)

(

)

(

Net pension plan

surplus/

obli

gaton

(22

)

(

Unquoted asset

elf-inves

tme

nt is m

onit

ore

d clo

sel

y and is l

s than $

1 mill

on of S

tan

dar

d Char

ter

ed eq

uit

es an

d bon

ds fo

r 2021 (31 D

ece

mbe

r 2020: <$1 m

illo

). Se

inves

tme

nt is

ly all

owed w

her

e it is n

ot pra

cti

cal to e

xclu

de it – fo

r exam

ple t

hrou

gh inve

stm

ent i

n inde

tra

ckin

g fu

nds w

her

e the G

rou

p is a co

nst

itu

ent of t

he re

leva

nt ind

401

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

30.

Retirement beneﬁt obligatons

continued

The p

ensi

on cost f

or deﬁne

d bene

ﬁt plans wa

202

Funded plans

Unfunded plans

$millon

UK Fu

$millon

Overseas plans

$millon

Post-

retirement

medical

$millon

Other

$millon

Current ser

vice c

ost

–

Past s

vic

e cost an

d cur

tailme

–

(1)

–

(4)

(5)

Settlement cost

–

(

–

(1)

)

Int

eres

t incom

e on pen

sion p

lan as

set

(

26)

(27

)

–

(

53)

Int

eres

t on pen

sion p

lan liab

lite

–

al cha

rge t

o proﬁ

t bef

ore de

duc

tio

n of tax

–

Net (g

ains

)/loss

es on p

lan as

set

(6)

)

–

(

Gain

)

/losses on liablites

(87

)

(

10)

(

(9)

08)

otal (g

ains

)/loss

es re

cogni

sed dir

ectl

y in sta

teme

of comprehensive

income before tax

(93)

(75)

(

(9)

(179)

Deferred taxation

–

al (gain

)

ses af

ter t

(93)

(2)

(9)

(

162)

ncl

ude

s admi

nst

rat

ive ex

pen

ses p

aid o

ut of p

lan a

sse

ts o

f $ 1 mill

on (31 D

ece

mbe

r 2020: $2 mi

llon)

clu

des va

rio

us sm

all co

s and ga

ins f

rom p

lan am

end

men

ts an

d set

tle

men

ts i

n Indi

a, Kenya

, Sou

th Kor

ea and S

ri La

nka

he act

ual r

etu

rn on t

he UK F

und a

sse

ts wa

s a gai

n of $32 m

illo

n and o

n over

sea

s pla

n ass

s was a ga

in of $9

2 mill

on

2020

Funded plans

Unfunded plans

otal

$millo

UK Fund

$millo

Overseas plans

$millo

Post

- retirement

medical

$millo

Other

$millo

Current ser

vice c

ost

–

Past s

vic

e cost an

d cur

tailme

–

Settlement cost

–

Int

eres

t incom

e on pen

sion p

lan as

set

(

32)

(28)

–

)

Int

eres

t on pen

sion p

lan liab

lite

otal c

harge t

o proﬁt b

efor

e dedu

ctio

n of tax

Net (g

ains

)/loss

es on p

lan as

set

(

–

(

241

)

Losses/

(

ains

) on liablites

131

(1)

otal (g

ains

)/loss

es re

cogni

sed dir

ectl

y in sta

teme

of comprehensive

income before tax

(

29)

(1)

Deferred taxation

–

(9)

–

(9)

ota

l (gains

)

los

ses

ter

tax

(

29)

(

(1)

(

ncl

ude

s admi

nst

rat

ive ex

pen

ses p

aid o

ut of p

lan a

sse

ts o

f $2 mill

on (3

1 Dec

emb

er 2019: $

2 mill

on)

st se

ice c

ost

s aro

se pr

imar

ly d

ue to r

eco

gnit

on of a l

ega

cy U

K lon

g-te

rm si

ck pla

n whi

ch has b

n clar

ed a

s tec

hnic

all

y repr

ese

nti

ng a deﬁ

ned b

ene

ﬁt

he act

ual r

etu

rn on t

he UK F

und a

sse

ts wa

s a gai

n of $19

2 mill

on an

d on over

as pl

an as

set

s wa

s a gain o

f $10

9 mill

Movem

ent in th

e deﬁne

d beneﬁ

t pens

ion plan

s and po

-retir

ement m

edical d

eﬁct dur

ing th

e year comp

ris

Funded plans

Unfunded plans

$millon

UK Fu

$millon

Overseas plans

$millon

Post-

retirement

medical

$millon

Other

$millon

(Deﬁc

t

surp

lus at J

anuar

y 2021

)

(124

)

(

)

Contributons

Current ser

vice c

ost

–

(55)

–

(9)

)

Past s

vic

e cost an

d cur

tailme

–

Settlement costs and transfers impact

–

Net i

nter

est on t

he net d

eﬁne

d bene

ﬁt ass

et/lia

blit

(1)

(2)

–

)

(7)

Actuaria

l gains

(losses

)

179

Exchange rate

adjustment

(

–

Surplus

(

deﬁct)

at 31 December 20

21²

(

13)

23)

(

192)

ncl

ude

s admi

nst

rat

ive ex

pen

ses p

aid o

ut of p

lan a

sse

ts o

f $1 mil

lon (3

1 Dec

emb

er 2020: $2 m

illo

)

e deﬁ

ct tot

al of $

192 mi

llo

n is ma

de up of p

lan

s in de

ﬁct of $

355 mi

llo

n (31 De

cem

ber 2020: $

6 m

illo

) n

et of p

lans i

n sur

plu

s wit

h ass

s tot

alli

ng $16

3 mil

lon

(31 D

ece

mbe

r 2020: $42 m

ill

)

402

Standard Chartered

– Ann

ual Re

por

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

30.

Retirement beneﬁt obligatons

continued

Movem

ent in th

e deﬁne

d beneﬁ

t pens

ion plan

s and po

-retir

ement m

edical d

eﬁct dur

ing th

e year comp

ris

Funded plans

Unfunded plans

otal

$millo

UK Fund

$millo

Overseas plans

$millo

Post

- retirement

medical

$millo

Other

$millo

(Deﬁc

t

surp

lus at J

anuar

y 2020

(117)

(11

(

(210

)

Contributons

–

Current ser

vice c

ost

–

(

–

(7)

(57

)

Past s

vic

e cost an

d cur

tailme

–

(

Settlement costs and transfers impact

–

(5)

–

(5)

Net i

nter

est on t

he net d

eﬁne

d bene

ﬁt ass

et/lia

blit

(3)

(1)

(5)

(

Actuaria

l gains

(losses

)

(

Exchange rate

adjustment

(1)

(9)

–

(4)

(

(Deﬁc

t)

surplus at

31 December 202

0³

)

(

ncl

ude

s admi

nst

rat

ive ex

pen

ses p

aid o

ut of p

lan a

sse

ts o

f $2 mill

on (3

1 Dec

emb

er 2019: $

1 mil

lon)

pac

t of tr

ansf

s rela

tes t

o a grat

uit

y p

lan in I

ndia w

hic

h was in

clu

ded w

ith

n IAS 19 d

isc

los

ures f

or th

e ﬁr

st tim

e thi

s year. Pre

vio

usl

, a s

epa

rate p

rovi

son f

these lia

blit

es was includ

ed on

the balance sheet.

he deﬁ

ct to

tal of $

4 mil

lon i

s mad

e up of pl

ans i

n deﬁc

t of $

76 mil

lon (3

1 Dec

emb

er 2019

: $4

86 mi

llon) ne

t of pla

ns in s

urp

lus w

ith a

sse

ts t

ota

llin

g $42 mi

llo

(31 D

ece

mbe

r 2019: $2

8 mill

on)

The G

roup’

s exp

ecte

d contr

ibut

on to it

s deﬁn

ed ben

eﬁt pen

sion pl

ans in 2022 i

s $ 116 millon

2021

2020

Assets

$millon

Obligatons

$millon

Asset

$millo

Obligatons

$millo

otal

$millo

At 1 Jan

uar

y 2021

391)

(

)

Contributons

123

(

122

123

–

Current ser

vice c

ost

–

(57

)

(57

)

Past s

vic

e cost an

d cur

tailme

–

(

Settlement costs & impact of

ransfers

(6)

(

(5)

Int

eres

t cost on p

ensi

on pla

n liabli

tes

–

)

–

(

Int

eres

t incom

e on pen

sion p

lan as

set

–

neﬁt

s paid o

–

(

161

)

–

Actuaria

l gains

(losses

)

108

241

(

Exchange rate

adjustment

(52)

(

79)

(

At 31 De

cemb

er 2021

,942

(

192)

391)

Includes employee

contr

ibutons

of $1 mi

llon (31 December

2020:

nil)

clu

des a

dmin

str

ati

ve exp

ses p

aid ou

t of pl

an as

set

s of $

1 mill

on (31 D

ece

mbe

r 2020: $2 mi

llon)

pac

t of tr

ans

fer

s inc

lude

s a deﬁ

ned co

ntr

ibu

to

n plan i

n Zamb

ia whi

ch was r

eco

gni

zed wi

thn I

AS 19 D

isc

losu

res f

or th

e ﬁrs

t tim

e thi

s year d

ue to t

he ex

iste

nce o

an inv

est

men

t guar

ant

ee wh

ich co

nst

itu

tes a d

eﬁne

d ben

eﬁt un

der I

AS 19. Previ

ous

ly, this p

lan wa

s acc

oun

ted f

or as a p

ure de

ﬁne

d cont

rib

ut

on pl

an.

Actua

ria

l gain o

n obl

igat

on co

mpr

ise

s of $1

08 mi

llon g

ain (3

1 Dec

emb

er 2020: $2

56 mi

llo

n los

) f

rom ﬁn

anc

al as

sump

tio

n cha

nge

s, $3 m

illo

n gai

n (31 De

cem

ber

2020: $2

1 mill

on ga

) f

rom d

emo

grap

hic a

ssu

mpt

ion ch

ang

es an

d $3 mi

llon l

oss (

31 De

cemb

er 2020: $

5 mill

on lo

) f

m exp

erie

nce

403

Standard Chartered

– Ann

ual Rep

ort 202

Financal statements

31. Share-based payment

Accounting po

licy

The G

roup o

perat

es eq

uit

y-sett

led an

d cash-s

ettl

ed sha

re-bas

ed com

pens

ation p

lans

. The fa

ir value of t

he emp

loyee

ser

ices (

easu

red by th

e fair valu

e of the a

wards gran

ted) re

ceive

d in exchang

e for th

e grant of t

he shar

es and a

wards

is re

cognis

ed as an e

xpen

se. For d

efer

red sha

re award

s grante

d as par

t of an ann

ual pe

rfor

mance a

ward, th

e expe

nse

is re

cognis

ed over th

e per

iod fr

om the s

tart o

f the pe

rfor

mance p

erio

d to th

e vestin

g date. Fo

r example, t

he exp

ense f

thr

ee-year a

wards gra

nted in 202

2 in resp

ect of 2021 p

erfo

rman

ce, whic

h vest in 2023

2025, is re

cogni

sed as a

n expe

nse

over th

e peri

od fro

m 1 Janua

y 20

1 to the ve

sting d

ates in 202

2025. F

or all oth

er award

s, th

e expe

nse is r

ecogn

ised over

the p

erio

d fro

m the dat

e of grant t

o the ves

ting da

te.

For e

quit

y-set

tle

d awards

, the to

tal amo

unt to b

e expe

nsed ove

r the ves

ting pe

riod i

s dete

rmine

d by refe

rence to t

he fair

value o

f the sh

ares an

d awards a

t the dat

e of grant

, whi

ch exclude

s the im

pact of any n

on-mar

ket vestin

g condi

tons

(for exampl

e, proﬁt

ablit

y and gr

owth ta

rget

)

. T

he fair valu

e of eq

uit

y inst

rum

ent

s grante

d is bas

ed on m

arket pr

ices

, if

avail

able, at t

he dat

e of grant

. In the a

bsen

ce of mar

ket pric

es, th

e fair valu

e of the i

nstr

umen

ts is e

stim

ated us

ing an

appr

opri

ate valua

tion te

chniq

ue, suc

h as a bino

mal opt

ion pri

cng mod

el. No

n-market ve

sting co

ndito

ns are in

clude

d in

sumpt

ions f

or the nu

mber o

f share

s and awar

ds that a

re expe

cted t

o vest

At eac

h balan

ce shee

t date, t

he Gro

up revi

ses it

s est

imate

s of the n

umbe

r of share

s and awa

rds tha

t are exp

ecte

d to vest

. It

reco

gnis

es the im

pact of t

he revi

son of or

ignal e

stim

ates

, if any

, in the i

ncome s

tatem

ent and a c

orre

spon

ding adj

ustm

ent

to equity over the

remainng vesting

eriod. Forfeitures

ior

to vesting

attr

ibutable

to factors other than

the failure

to satisf

ser

ice con

diton

s and non-m

arket ves

ting co

ndito

ns are tr

eate

d as a cance

llati

on and th

e remai

nng unam

ort

ised c

harge

is de

bited t

o the in

come st

ateme

nt at the t

ime of ca

ncella

tion

. The pro

ceed

s recei

ved net o

f any direct

ly att

ribu

table

tran

sact

ion cost

s are c

redite

d to sha

re capita

l (

nomi

nal value

) an

d share p

remium w

hen awa

rds in th

e form o

f opti

ons

are exercised.

sh-set

tled a

wards ar

e revalue

d at each b

alanc

e shee

t date and a l

iablit

y re

cognis

ed on t

he bala

nce she

et for all

unp

aid amo

unt

s, wit

h any chang

es in fair va

lue char

ged or cr

edite

d to sta

ff cos

ts in t

he inco

me stat

ement u

ntil t

awards ar

e ex

ercised. Where forfeitures occur prior

to vesting that are

att

ributable to

factor

ther than

a failure to satisfy

ser

vice cond

itons or

market

-based perfor

mance

conditons, the cumulative char

ge incurred up to the date

of forfeiture is

cre

dited t

o the inc

ome sta

teme

nt. Any reva

luati

on rela

ted to ca

sh-se

ttle

d awards i

s recor

ded as a

n amoun

t due fr

subsid

y undertakings.

The G

roup o

pera

tes a num

ber of s

hare-b

ased a

rrang

emen

ts fo

r its exe

cuti

ve direct

ors an

d employe

es. D

etails o

f the sh

are-

sed pa

yme

nt charg

e are set o

ut bel

2021

2020¹

Cash

$millon

Equity

$millon

Cash

$millo

Equi

$millo

otal

$millo

Deferred share awards

(1)

her sh

are awar

(1)

otal shar

e-based paymen

(

132

o for

fei

tur

e ass

ume

2021 S

tand

ard Ch

art

ered S

har

e Plan (t

he ‘202

1 Plan’) a

nd 201

1 Stan

dar

d Char

ter

ed Sha

re Plan (t

he ‘

2011 Pla

n’)

The 2021 Pl

an was appr

oved by share

hold

ers in M

ay 2021 and i

s the Gr

oup

’s main sh

are plan

, repla

cing th

e 2011 Plan for n

award

s, Ju

ne 2021. It m

ay be us

ed to de

liver var

ious t

pes of s

hare awar

ds, pr

eviou

sly gran

ted un

der th

e 2011 Plan:

•

Long T

erm I

ncent

ive Plan (L

TIP) awards: g

rante

d with ves

ting su

bject t

o perf

orma

nce me

asure

s. Perf

orm

ance me

asure

att

ache

d to award

s grante

d previ

ousl

y inclu

de: total s

hareh

older r

etur

n (TS

); ret

urn on e

quit

y (RoE

) and ret

urn on t

angib

equ

y (Ro

) (

in t

he cas

e of bot

h RoE and Ro

TE, wi

th a Com

mon Equit

y T

ier 1 (

1) unde

rpin

); str

ategi

c meas

ures; e

arnin

per s

hare (EPS) gr

owth; and r

etur

n on ri

-weigh

ted a

sset

s (RoRW

). Each me

asure i

s ass

esse

d inde

pend

entl

y over a

thr

ee-year p

erio

d. Awards gran

ted f

rom 2016 ha

ve an indv

idual co

nduct g

ateway r

equir

ement t

hat res

ult

s in the a

ward

lapsing

if not met

•

Def

erre

d awards a

re use

d to deli

ver the d

efer

red po

rtio

n of varia

ble rem

unera

tion, i

n line wit

h bot

h market p

ractic

e and

reg

ulato

y requ

iremen

. Thes

e award

s vest in ins

talme

nts o

n anniver

sar

es of t

he award d

ate spe

cif

ed at t

he time o

f grant

Def

erre

d awards a

re not su

bject t

o any plan limt

. Thi

s enabl

es the G

roup t

o meet re

gula

tor

y re

quirem

ent

s relat

ing to d

efer

ral

level

s, and i

s in line wi

th mar

ket pract

ice

•

Restr

icte

d share a

wards

, made o

uts

ide of th

e annua

l perf

orma

nce pro

cess a

s repla

cemen

t buy-o

ut award

s to new jon

ers

who f

orfe

it award

s on lea

ving t

heir pr

evious e

mployer

s, ves

t in inst

alment

s on t

he anni

vers

ares o

f the awar

d date sp

ecif

ed

at th

e time of g

rant

. This en

ables t

he Gro

up to me

et reg

ulato

y requ

ireme

nts re

latin

g buy- t

o buy-o

s, and is i

n line wi

mar

ket pract

ice. In lin

e with si

mlar pla

ns ope

rated by o

ur comp

etit

ors

, rest

ricte

d share a

wards ar

e not sub

ject to an a

nnual

limt an

d do not h

ave any per

form

ance m

easur

Und

er the 2021 Plan a

nd 2011 Plan, n

o grant p

rice is p

ayable t

o recei

ve an award

. The rem

ainng li

fe of the 2021 Pl

an dur

ing

whi

ch new awar

ds can be m

ade is te

n year

s. The 2011 Pl

an has ex

pired a

nd no f

urt

her awar

ds will b

e grante

d unde

r this pl

an.

404

Standard Cha

tered

– Annu

al Repo

rt 2021

Financal state

ments

Notes to the

ﬁnancal

statement

31. Sh

are-b

ased pa

yment

continued

alu

atio

n – L

P award

The ve

sting o

f award

s grante

d in bot

h 20

1 and 2020 is subje

ct to rel

ative TS

R perf

orma

nce me

asure

s, ach

ievement o

f a

str

ategi

c score

card and s

atisf

acton o

f Ro

TE (

subj

ect to a cap

ital CE

T1 u

nder

). The vest

ing of a

wards gran

ted in 2021 ha

addi

tonal c

ondit

ons und

er str

ategic m

eas

ures re

lated t

o targe

ts s

et for su

staina

blit

y linked t

o busin

ess s

trate

. Th

e fair valu

of th

e TSR comp

onen

t is calcu

lated u

sing th

e prob

abilt

y of me

etin

g the me

asur

es over a thre

e-year p

erfo

rman

ce per

iod,

usin

g a Mont

e Carl

o simul

aton m

odel. T

he num

ber of sh

ares ex

pect

ed to ves

t is evaluat

ed at ea

ch rep

orti

ng date, b

ase

d on

the e

xpe

cted pe

rfor

manc

e agains

t the Ro

TE and st

rate

gic mea

sures i

n the sco

recard

, to det

ermin

e the ac

count

ing char

ge.

No di

vden

d equi

valent

s accr

ue for t

he L

TIP award

s made i

n 20

20 or 2021 an

d the fa

ir value ta

kes this in

to accou

nt, ca

lculat

by refe

rence t

o market co

nsen

sus di

vden

d yiel

021

2020

ant dat

–March

9–March

Sha

re pri

ce at gran

t date (£)

ting p

erio

d (year

)

03–Jul

–J

Expected div

ded yield

)

3.4

4.2

Fair va

lue (Ro

TE) (£)

1.25,

1.20

1.40,

Fair va

lue (

TSR) (

£)

0.7

, 0.7

0.7

5, 0.7

Fair va

lue (Stra

tegi

) (

)

1.66,

1.60

1.40,

luation –

deferred sha

res an

d restri

cted shares

The f

air value f

or defe

rred a

wards w

hich are n

ot grant

ed to ma

teri

al risk t

akers i

s base

d on 10

0 per cen

t of the f

ace value o

f the

sha

res at th

e date of g

rant as t

he share p

rice w

ill reﬂe

ct expe

ctati

ons of all f

ure div

dend

s. For a

wards gra

nted t

o mater

ial ri

taker

s in 2021, th

e fair valu

e of award

s takes int

o accou

nt the la

ck of div

dend e

quiva

lent

s, cal

culate

d by refe

rence to m

arket

consensus divdend yield.

Deferre

hare aw

ards

Grant d

ate

2021

-Jun

15-Mar

Sha

re pri

ce at gran

t date (£)

.69

4.9

tin

g peri

od (year

)

Expected

divdend

yield

(

Fair v

alu

(£)

Expected

divdend

yield

(

Fair v

alu

(£)

1-3 year

3.4

4.6

,4.24

,3.4,

3.4

90,4.58,4.43

1-5 year

3.4

3.4,

3.4,3.4

4.43,4.

36,4.29

7 ye

ars

–

3.4,

3.4

5,4.

ant dat

2020

2-J

30-Mar

09-

Mar

Sha

re pri

ce at gran

t date (£)

4.2

.67

ting p

erio

d (year

)

Expected

divdend

yield

(%)

Fair value

(£

)

Expected

divdend

yield

(%)

Fair value

(£

)

Expected

divdend

yield

(%)

Fair value

(£

)

1-3 year

4.27

,4.2

4.67

,4.

,4.2

5.20,4.7

,4.59

1-5 year

–

4.2

4.0

4.2

,4.2

4.59

,4.50

7 ye

ars

–

2,4.2

4.23

,4.

405

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

31. Sh

are-b

ased pa

yment

continued

Other restri

cted share a

wards

Grant d

ate

2021

30 September

21 June

15 March

Sha

re pri

ce at gran

t date (£)

.69

tin

g peri

od (year

)

Expected

divdend

yield

(

Fair v

alu

(£)

Expected

divdend

yield

(

Fair v

alu

(£)

Expected

divdend

yield

(

Fair v

alu

(£)

1 year

3.4

4.2

3.4

4.53

3.4

4.7

2 year

3.4

.09

3.4

4.58

3 year

3.4

4.24

3.4

4.43

4 year

3.4

.82

3.4

4.29

5 year

3.4

–

ant dat

2020

26 No

vember

30 September

2 Ju

9 March

Sha

re pri

ce at gran

t date (£)

4.71

.20

ting p

erio

d (year

)

Expected

divdend

yield

(%)

Fair value

(£

)

Expected

divdend

yield

(%)

Fair value

(£

)

Expected

divdend

yield

(%)

Fair value

(£

)

Expected

divdend

yield

(%)

Fair value

(£

)

1 year

4.2

34,4.52

4.10

4.2

2 year

4.2

4.16,4.

4.2

4.79

3 year

4.2

.11

4.2

3.77

4.2

.59

4 year

4.2

4.0

4.2

.41

5 year

–

4.2

3.4

4.2

4.23

All E

mployee S

hare

save Plan

2013 Share

savePlan

Und

er the 2013 S

hares

ave Plan, e

mployee

s may o

pen a sa

ving

s contra

ct. Wit

hn a mat

urit

y pe

rio

d of six mo

nths a

fter t

thir

d annive

rsar

y, employe

es may s

ave up to £

0 per mo

nth over th

ree year

s to pu

rchas

e ordin

y shar

es in the C

ompa

at a dis

count o

f up to 20 per c

ent on th

e share p

rice at t

he dat

e of invtat

ion (

his is k

nown as t

he ‘optio

n exercise p

rice’

)

. Th

ere

are no p

erf

orman

ce mea

sure

s attac

hed to o

ption

s grante

d unde

r the 2013 Sh

ares

ave Plan and n

o grant pr

ice is p

ayable t

rec

eive an op

tion. I

n some co

untr

ies in w

hich the G

roup o

pera

tes, i

t is not p

ossib

le to op

erate S

hares

ave pla

ns, t

ically d

ue to

securites law and

regulator

y restrict

ons. In these countries, where possible, the

roup offers an equiva

lent cash-based plan to

its employees.

The 2013 S

hares

ave Plan wa

s approved by s

hareh

older

s in Ma

y 2013 and all f

utu

re Shar

esave inv

tatio

ns are m

ade und

er this

plan

. The re

mainng l

ife of th

e 2013 Share

save Pla

n is one ye

alua

tion – Sh

ares

ave:

Opt

ions u

nder t

he Shar

esave p

lans are va

lued u

sing a bin

omal op

tion-pr

icng mo

del. T

he sam

e fair valu

e is appli

ed to all

emp

loyees in

cludng e

xecuti

ve direct

ors

. The f

air value p

er opti

on grant

ed and t

he as

sumpt

ions u

sed in th

e calcul

ation a

as fo

llows:

All E

mployee S

hare

save Plan (S

har

esave)

021

2020

ant dat

–September

30–Septemb

Sha

re pri

ce at gran

t date (£)

.52

xercis

e pric

e (

£)

.67

ting p

erio

d (year

)

xpe

cted vo

lati

lt

y (%

)

31.8

xpe

cted o

ptio

n life (yea

)

3.33

Ris

-f

ree rat

e (%

)

0.42

–

0.07

xpe

cted d

ivd

end yi

eld (%)

3.4

Fair va

lue (£)

The e

xpec

ted vol

atilt

y is b

ased o

n histo

rcal vol

atilt

y over th

e last t

hree yea

, or thre

e year

s prior t

o grant

. The ex

pect

ed life

is th

e avera

ge expe

cted p

erio

d to exerci

se. The r

isk-free ra

te of ret

urn i

s the yi

eld on zero

-coup

on UK G

overnm

ent bo

nds of

a ter

m cons

isten

t with t

he ass

umed o

ption l

ife. The e

xpe

cted di

vden

d yiel

d is calcul

ated by re

feren

ce to mar

ket cons

ensu

divdend yield.

406

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

31. Sh

are-b

ased pa

yment

continued

Limts

An awa

rd shall n

ot be gra

nted u

nder th

e 2021 Plan in any cale

ndar ye

ar if

, at th

e time o

f its p

ropos

ed gran

t, it wou

ld caus

e the

num

ber of S

tandar

d Char

tered PLC ordin

y share

s alloc

ated in t

he per

iod of 1

0 calen

dar year

s endin

g with t

hat cal

endar ye

und

er the 2021 Pla

n and und

er any oth

er discr

eton

y share p

lan op

erate

d by Stand

ard Char

tere

d PL

C to e

xceed su

ch numb

as re

prese

nts 5 p

er cent o

f the or

dinar

y sh

are capit

al of St

andard Ch

arte

red PLC in issu

e at that t

ime.

An awa

rd shall n

ot be gra

nted u

nder th

e 2021 Plan or 2013 Sh

aresa

ve Plan in any cal

endar ye

ar if

, at t

he time o

f its p

ropo

sed

grant

, it wou

ld caus

e the nu

mber o

f Stand

ard Char

tere

d PL

C or

dinar

y sh

ares all

ocate

d in the p

erio

d of 10 cale

ndar ye

ars en

ding

wit

h that ca

lenda

r year und

er the 2021 Pla

n or 2013 Shar

esave Pl

an and und

er any oth

er empl

oyee shar

e plan op

erate

d by

Sta

ndard Ch

arte

red PLC to exceed s

uch num

ber as re

pres

ent

s 10 per ce

nt of th

e ordina

y share ca

pital of S

tanda

rd Char

tere

C i

n issu

e at that t

ime.

An awa

rd shall n

ot be gra

nted u

nder th

e 2021 Plan or 2013 Sh

aresa

ve Plan in any cal

endar ye

ar if

, at t

he time o

f its p

ropo

sed

grant

, it wou

ld caus

e the nu

mber o

f Stand

ard Char

tere

d PL

C or

dinar

y sh

ares wh

ich may b

e iss

ued or t

ransf

erre

d pur

suant t

award

s then o

stand

ing und

er the 2021 Pla

n or 2013 Shar

esave Pl

an as releva

nt to excee

d such nu

mber a

s repre

sent

s 10 p

cent o

f the or

dinar

y sh

are capit

al of Sta

ndard Ch

arte

red PLC in issu

e at that t

ime.

The n

umbe

r of Stan

dard Cha

rter

ed PL

C o

rdinar

y s

hares w

hich ma

y be is

sued p

urs

uant to a

wards gra

nted u

nder th

e 2021

Plan in any 12-mont

h peri

od must n

ot excee

d such n

umber a

s repre

sent

s 1 per c

ent of th

e ordin

y share c

apital o

f Stand

ard

Char

tere

d PL

C in i

ssue a

t that ti

me. The n

umbe

r of Stan

dard Cha

rter

ed PL

C o

rdinar

y s

hares w

hich ma

y be is

sued p

urs

uant to

award

s grant

ed und

er the 2013 S

hares

ave Plan in any 12-month p

erio

d must n

ot excee

d such nu

mber a

s repre

sent

s 1 per ce

of th

e ordin

y share c

apital o

f Stand

ard Char

tere

d PL

C in is

sue at t

hat tim

Sta

ndard Ch

arte

red PLC has be

en grant

ed a waiver f

rom st

rict co

mplian

ce with Ru

les 17

.03(3)

, 17

03(9

) an

d 17

.03(18) of the Rul

Gove

rning t

he Lis

tng of S

ecur

ites on t

he Sto

ck E

xchange o

f Hong Kon

g. Det

ails are s

et out in t

he mar

ket anno

uncem

ent mad

on 5 Ma

y 2021.

Reco

ncilat

ion of s

hare a

ward movem

ents f

or the ye

ar to 31 De

cemb

er 2021:

11 Pla

Sharesave

eighted

average

Sharesave

exer

cis

e pri

(£)

Deferred /

Restrict

Outstanding at 1

Januar

y 2

021

918,242

543,548

16,

591,704

Grante

2,3

4,0

,071

4,039

–

Laps

–

15,005,847

–1,

018,379

–3,

964,053

xerc

ise

–3

,715

–

15,92

0,488

–

615

3.53

Outstanding at 3

1 December 20

11,6

,718,654

6,8

,075

.95

otal

number of securites available

for issue under the plan

11,62

,751

,718,6

,89

,07

Perce

ntag

e of the i

ssu

ed sha

res th

is rep

rese

nts a

s at 31 De

cemb

er 2021

0.40%

.30%

.95

xercis

able a

s at 31 De

cemb

er 2021

,952

1,7

01,

,571,

.96

Rang

e of exerci

se pr

ices (£)

–

14 – 6

–

Int

rins

c value o

f veste

d but n

ot exerci

sed o

ptio

ns ($ millon)

0.02

10.

ghte

d avera

ge cont

ract

ual rem

ainn

g life (year

)

.12

ghte

d avera

ge sha

re pri

ce for aw

ards exer

cise

d duri

ng the p

eri

od (£)

4.9

.89

.66

mpl

oyee

s do not c

ont

rib

ute t

oward

s the c

ost o

f the

se aw

ards

,704

,511 (

DRSA

/RSA) gr

ante

d on 15 M

arch 2

021, 94,95

4 (DRSA

/RSA) gr

ante

d as no

tio

nal d

ivd

end o

n 01 Ma

rch 2021

, 4,02

843 (LTIP) gran

ted o

n 15 Ma

rch 202

10,95

4 (L

TIP) gr

ante

d as n

oti

onal d

iv

den

d on 01 Ma

rch 202

1, 197

,111 (D

RSA/R

SA) gran

ted o

n 21 Ju

ne 2021

. 34

,60

6 (DRS

A/RSA) gr

ant

ed as n

oti

onal d

iv

den

d on

13 Au

gust 2

021, 3

4 (L

P) grant

ed as n

oti

ona

l div

den

d on 13 Au

gus

t 2021, 82

,79

1 (RSA) gr

ant

ed on 3

0 Sep

tem

ber 202

1, 4,

4,03

9 (Shar

esa

) gr

ante

d on

30 S

ept

emb

er 2021

. L

TIP a

nd DRS

A/RS

A awar

ds gra

nte

d in Mar

ch 2021 w

ere gr

ante

d und

er th

e 2011 Pl

an, a

nd DRS

A/RSA a

war

ds gra

nte

d in Jun

e and S

ept

emb

2021 we

re gr

ante

d und

er th

e 2021 Pl

an. No

tio

nal d

ivd

end

s wer

e gran

ted u

nde

r the 201

1 Plan

. Sha

res

ave op

tio

ns gr

ante

d in 2021 w

ere gr

ante

d und

er th

e 2013

Sharesa

Plan.

r Sha

res

ave op

tio

ns gr

ante

d in 2021 t

he exe

rcis

e pri

ce is £

67 per sh

are, w

hic

h was a 20% d

isc

ount t

o the c

los

ing s

hare p

ric

e on 27 Au

gus

t 2021. T

he cl

osi

are pr

ice o

n 27 Aug

ust 202

1 was £4.

578

407

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

31. Sh

are-b

ased pa

yment

continued

Reco

ncilat

ion of s

hare a

ward movem

ents f

or the ye

ar to 31 De

cemb

er 2020:

2011 P

lan

PSP

Sharesave

eighted

average

Sharesave

exercise

ice

(£

)

TIP

Deferred /

Restricted

Outstanding at 1

Januar

y 2

020

20,

12,60

2,842

.28

Grante

2,3

3,0

452

,373,729

–

Laps

(824,

(

)

(

307

)

xerc

ise

(

256,

388

)

(

)

56,

560

)

5.30

Outstanding at 3

1 December

,543,548

4.31

otal

number of securites available

for issue under

e plan

,543,548

,70

Perce

ntag

e of the i

ssu

ed sha

res th

is rep

rese

nts a

s at

31December

.7%

0.5%

Exercisable as at

31 December

395,136

1,54

.16

Rang

e of exerci

se pr

ices (£)

–

3.14 – 6.

–

Int

rins

c value o

f veste

d but n

ot exerci

sed o

ptio



0.1

15.2

ghte

d avera

ge cont

ract

ual rem

ainn

g life (year

)

.28

.47

ghte

d avera

ge sha

re pri

ce for aw

ards exer

cise

dur

ing t

he per

iod (£)

.28

ploy

ees d

o not c

ontr

ibu

te to

ward

s the c

ost of t

hes

e awa

rds

2,0

4 (DR

SA/RS

A) grant

ed on 0

9 Mar

ch 2020, 18

,991 (

DRSA

/RSA) gra

nte

d as no

tio

nal di

vd

end o

n 06 Ma

rch 2020, 3

,025,16

3 (L

TIP) gr

ant

ed on 0

9 Marc

2020, 56

05 (L

P) gran

ted a

s not

ion

al div

de

nd on 0

6 Marc

h 2020, 86

19 (DRS

A/RSA) g

rant

ed on 3

0 Mar

ch 2020, 214

,75

4 (DR

SA/R

SA) gran

ted o

n 22 J

une 2020,

252 (LTIP) gran

d as no

tion

al di

vd

end on 2

5 Aug

ust 2020, 5

03,

520 (DR

SA/RS

A) grant

ed on 3

0 Sep

tem

ber 2020

, 7

, 37

729 (Sh

are

sav

) gra

nte

d on

30 S

ept

emb

er 2020, 450,

4 (DRS

A/RSA) gr

ant

ed on 26 N

ovem

ber 2020.

3. For Sh

ares

ave g

rant

ed in 2020 t

he exe

rcis

e pri

ce is £

3.14 p

er sha

re, w

hich wa

s a 20% di

sco

unt t

o the cl

osi

ng sh

are pr

ice o

n 28 Aug

ust 2020. T

he cl

osin

g sha

re pr

ice

on 28 A

ugu

st 2020 was £

3.924.

32. Inv

estm

ents in subsidary undertakings

, jo

nt v

entur

es and associates

Accounting po

licy

Subsida

ries

Sub

sidar

ies are all e

ntit

es, in

cludn

g stru

cture

d enti

tes

, which t

he Gro

up cont

rols

. The G

roup con

trols a

n entit

y w

hen it is

exp

osed t

o, and ha

s right

s to, var

iable r

etur

ns fr

om it

s involveme

nt wit

h the ent

y and ha

s the abi

lty t

o aff

ect tho

se ret

urn

thr

ough it

s power ove

r the invest

ee. Th

e asse

ssm

ent of powe

r is bas

ed on t

he Gro

’

s prac

tical abi

lt

y to direc

t the rel

evant

acti

vti

es of the e

ntit

y un

ilater

ally for t

he Gr

oup

’s own ben

eﬁt and is s

ubject t

o reas

ses

smen

t if and wh

en one or m

ore of

the e

leme

nts o

f contro

l chang

e. Subs

idari

es are f

ully co

nsoli

date

d from t

he date o

n which t

he Gro

up ef

fect

ively o

btain

cont

rol. Th

ey are de

conso

lidat

ed fro

m the dat

e that co

ntro

l ceas

es, an

d where a

ny intere

st in the s

ubsid

y remai

ns, t

his

is re

meas

ured to i

ts fa

ir value an

d the cha

nge in car

ying a

mount i

s reco

gnise

d in the in

come st

atem

ent.

Associate

and jont arrangements

Join

t arran

geme

nts ar

e wher

e two o

r more p

arti

es eith

er have r

ight

s to the a

sse

, and obl

igato

ns of th

e jont ar

rangem

ent

(

nt ope

ration

)

, o

r have ri

ght

s to the n

et ass

ets o

f the jon

t arran

geme

nt (

jon

t ventur

)

. Th

e Grou

p evaluat

es the

cont

ractu

al ter

ms of jon

t arran

gemen

ts t

o deter

mine w

heth

er a jont ar

range

ment i

s a jont op

eratio

n or a jont ven

ture.

The G

roup d

id not ha

ve any contr

actu

al inter

est in jon

t opera

tion

An as

soc

iate is a

n entit

y over wh

ich th

e Gro

up has s

ignﬁcan

t inﬂuen

ce.

Invest

ment

s in as

socia

tes and j

ont vent

ures are a

ccoun

ted for by t

he equ

y meth

od of acc

ount

ing and ar

e intiall

reco

gnis

ed at cos

t. Th

e Grou

’

s inves

tmen

t in ass

ociate

s and jon

t ventur

es incl

udes g

oodw

ill iden

tﬁed on a

cquist

ion

(

t of any accum

ulate

d impar

ment l

oss

The G

roup’

s sha

re of it

s ass

ociat

es’ and jon

t ventur

es’ pos

-acqui

stion pr

oﬁts o

r loss

es is re

cogni

sed in th

e incom

e stat

ement

and it

s sh

are of po

-acqui

stion m

ovement

s in ot

her com

prehe

nsive i

ncome i

s recog

nise

d in rese

ves. Th

e cumul

ative

pos

-acqui

stion m

ovement

s are a

djuste

d again

st the c

arr

ng amou

nt of th

e investme

nt. W

hen th

e Grou

’

s sh

are of lo

sse

in an as

soci

ate or a jon

t ventu

re equa

ls or excee

ds it

s inte

rest in t

he ass

ociat

e, inclu

dng any ot

her uns

ecur

ed rece

ivable

s, th

Gro

up doe

s not re

cogni

se fu

rth

er los

ses, u

nles

s it has in

curr

ed obli

gaton

s or mad

e pay

ment

s on be

half of t

he ass

ociat

e or

jont v

entu

Unre

alise

d gains a

nd los

ses on t

ransa

ction

s bet

wee

n the G

roup an

d its a

sso

ciates an

d jont ven

tures a

re elimn

ated to t

exte

nt of th

e Grou

’

s in

teres

t in the as

soci

ates an

d jont vent

ures

. At each b

alanc

e shee

t date, t

he Gro

up ass

ess

es whe

ther

the

re is any obj

ectve ev

idenc

e of impar

ment i

n the inves

tment i

n asso

ciate

s and jont ve

nture

s. Su

ch evide

nce inc

ludes a

signﬁc

ant or pro

longe

d dec

line in th

e fair valu

e of the G

roup

’s invest

ment in an a

sso

ciate or j

ont vent

ure bel

ow its c

ost,

among other factors.

408

Standard Chartered

– A

nnu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

. In

vest

ment

s in subsid

ary un

dertakin

gs, jont ventu

res and a

ssocia

tes

continued

Signﬁ

cant accounting estimates and judgements

The G

roup a

pplies j

udge

ment in d

eter

minng if it h

as cont

rol, jon

t contr

ol or sign

ﬁcant inﬂu

ence over su

bsidar

ies

, jont

vent

ures an

d asso

ciate

s resp

ecti

vely

. T

hese ju

dgem

ent

s are bas

ed up

on iden

tf

yin

g the rel

evant act

ivti

es of cou

nter

part

ies,

bei

ng tho

se acti

vtie

s that si

gnﬁcantl

y aff

ect th

e entit

es ret

urns

, and f

urt

her mak

ing a de

cison o

f if the G

roup h

as cont

rol

over th

ose ent

ites

, jont co

ntrol

, or has si

gnﬁcant inﬂ

uence (b

eing th

e power to p

art

icpate i

n the ﬁna

ncal and o

perat

ing

pol

icy de

cison

s but no

t contr

ol the

)

The

se jud

gemen

ts ar

e at time

s deter

mine

d by equit

y h

oldin

gs, an

d the vot

ing rig

hts a

sso

ciated w

ith th

ose ho

lding

However, fur

the

r consid

erato

ns incl

udng b

ut not lim

ted to b

oard s

eat

s, ad

viso

y commit

tee m

ember

s and s

pecia

lst

owled

ge of som

e deci

son-maker

s are al

so taken in

to accou

nt. Fur

the

r judge

ment is r

equir

ed whe

n dete

rminn

g if the

Gro

up has d

e-fact

o contr

ol over an ent

y even tho

ugh it ma

y hold l

ess t

han 50% of t

he votin

g share

s of tha

t entit

Jud

geme

nt is req

uired t

o deter

mine t

he rela

tive si

ze of the G

roup

’s shar

ehold

ing wh

en comp

ared to t

he size an

d dispe

rso

of other shareholders.

Imp

airme

nt test

ing of inve

stmen

ts in a

sso

ciates a

nd jont ven

ture

s, and o

n a Comp

any level invest

ment

s in sub

sidar

ies is

per

for

med if t

here is a p

ossi

ble ind

cator of i

mparm

ent

. Judg

ement i

s used t

o dete

rmine i

f there i

s obje

ctve evid

ence of

imp

armen

t. Ob

ject

ve eviden

ce may b

e obse

vable da

ta such a

s loss

es incu

rred o

n the inves

tment w

hen ap

plyi

ng the

equ

y meth

od, th

e granti

ng of con

cess

ions as a r

esult o

f ﬁnanca

l diff

cul

ty, or brea

ches o

f contra

cts/

gula

tor

y ﬁne

s of the

socia

te or jont ve

nture

. Furth

er judg

ement i

s requ

ired wh

en con

sider

ng broa

der ind

cator

s of imp

arme

nt such a

s loss

es of

acti

ve mar

s or rat

ings dow

ngrad

es acro

ss key mar

kets in w

hich th

e ass

ociate o

r jont vent

ure op

erate i

Imp

airme

nt test

ing is b

ase

d on esti

mates i

nclud

ng fore

casti

ng the ex

pect

ed cas

h ﬂows fr

om the inves

tmen

, growt

h rates

ter

minal val

ues an

d the dis

count r

ate use

d in calcu

latio

n of the p

resen

t values o

f thos

e cash ﬂow

s. The e

stim

aton of f

ure

cash ﬂ

ows and t

he level to w

hich th

ey are dis

counte

d is inh

erent

ly unce

rtai

n and req

uires si

gnﬁcant ju

dgeme

nt.

Busin

ess combinato

The a

cquist

ion me

thod o

f accou

nting i

s used t

o accoun

t for th

e acquis

tion of s

ubsid

aries by t

he Gro

up. The c

ost of an

acqu

istio

n is mea

sure

d as the f

air value o

f the as

set

s given

, equit

y in

str

umen

ts is

sue

d and liabl

ites in

curre

d or as

sume

at th

e date of e

xchange

, toget

her wi

th the f

air value o

f any contin

gent co

nside

raton p

ayabl

e. The exces

s of th

e cost of

acqu

istio

n over the fa

ir value of t

he Gro

’s share of t

he ide

ntﬁable n

et as

set

s and con

tinge

nt liablit

es acq

uired i

reco

rded a

s goo

dwill (

ee No

te 17 for de

tails o

n good

will re

cogni

sed by th

e Grou

)

. If t

he cost o

f acquis

tion is l

ess t

han the

fair val

ue of th

e net as

set

s and co

nting

ent liabl

ites of t

he sub

sidar

y ac

quire

d, the di

ffer

ence is r

ecogn

ised di

rectl

y in the

income statement.

Whe

re the fa

ir values o

f the id

entﬁabl

e net as

set

s and co

nting

ent liab

lites a

cquire

d have be

en det

ermin

ed prov

isona

lly

or where contingent

or deferred consideraton is

aya

ble, adjustments arisng from their subsequent ﬁ

sation are not

reﬂe

cted in t

he inco

me stat

emen

t if (

i) they ar

ise wi

thn 12 mo

nths o

f the acq

uistio

n date (

or r

elate t

o acquis

tion

s comple

ted

bef

ore 1 Jan

uar

y 2014

) and (i) the adju

stme

nts a

rise f

rom b

etter i

nfor

maton a

bout co

ndito

ns exi

stng at t

he acqu

istio

dat

e (

mea

surem

ent per

iod ad

just

ment

)

. S

uch adj

ustme

nts a

re appli

ed as at t

he date o

f acqui

stion an

d, if app

licable

, prior

year am

ount

s are re

state

d. All c

hange

s that ar

e not me

asure

ment p

erio

d adjus

tmen

ts are r

epor

ted in i

ncome o

ther t

han

chan

ges in co

nting

ent con

sider

aton no

t clas

sif

ed as ﬁn

ancal in

str

umen

, which ar

e accoun

ted fo

r in accord

ance wi

th the

appr

opri

ate acco

untin

g polic

, and c

hange

s in cont

ingen

t consi

derato

n clas

sif

ed as e

quit

, w

hich is n

ot reme

asur

ed.

Chan

ges in ow

ner

ship int

erest in a s

ubsid

, whi

ch do not r

esult in a l

oss of c

ontro

l, are tre

ated a

s tran

sacti

ons be

twe

equ

y hold

ers an

d are rep

orte

d in equ

. Whe

re a busin

ess co

mbina

ton is ac

hieved in st

ages

, the p

reviou

sly he

ld equ

inte

rest is r

emea

sure

d at the ac

quist

ion dat

e fair value w

ith th

e resu

lting g

ain or los

s reco

gnise

d in the in

come st

atem

ent.

In th

e Comp

any’s ﬁnancal st

atem

ent

s, invest

ment in s

ubsid

aries

, ass

ociat

es and jo

nt ventu

res are h

eld at cos

t less

imp

armen

t and div

dend

s from p

re-a

cquist

ion proﬁt

s re

ceived p

rior t

o 1 Januar

y 2009

, if any. Inter

comp

any trans

actio

ns,

bal

ances an

d unre

alise

d gains an

d loss

es on tr

ansa

ction

s bet

ween G

roup c

ompan

ies are el

imnate

d in the G

roup a

ccount

Inv

estm

ents in

sub

sidary undertakings

2021

$millon

2020

$millo

As a

t 1 Janu

8,037

Additons

4,02

370

Disposal

,00

(2,

000

)

As a

t 31 Dec

embe

60,

429

ncl

ude

s inte

rna

l Addi

ton

al T

r 1 iss

uan

ces o

f $2.7 b

illo

n by St

anda

rd Ch

art

ered B

ank a

nd $1

.3 b

illo

n by St

anda

rd Cha

ered H

old

ing

s Lim

ted (3

1 Dec

emb

er 2020:

clud

es in

ter

nal Ad

dit

onal Tier 1 is

sua

nce

s of $1 bi

llo

n by Sta

ndar

d Cha

rte

red B

ank (H

ong Ko

ng) Li

mte

demp

tio

n of Add

ito

nal T

er1 c

apit

al of $

1 bill

on by St

and

ard Ch

art

ere

d Ban

k (31 De

cem

ber 2020: R

ede

mpti

on of Ad

dit

ona

l T

ier

1 capi

tal o

f $2 bill

on by

Standard Charte

red Bank

)

409

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

. In

vest

ment

s in subsid

ary un

dertakin

gs, jont ventu

res and a

ssocia

tes

continued

At 31 De

cembe

r 20

1, th

e prin

cpal sub

sidar

y un

der

takin

gs, all i

ndrect

ly hel

d except fo

r Stand

ard Char

tere

d Bank (H

ong Kong)

Limt

ed, and p

rincp

ally en

gage

d in the b

usine

ss of ba

nking a

nd provi

son of ot

her ﬁn

ancal se

vices

, were as f

ollows:

Countr

and place of incorporation

or regist

raton

Main areas o

f opera

Group in

terest

in ordinary

share capital

Standard

Chartered Bank, England

and W

ales

nite

d King

dom, M

iddle Ea

st, S

out

h Asi

a, Asi

a Pacif

c,

erica

s and, t

hrou

gh Gro

up com

panie

s, Af

ric

100

Standard

Chartered Bank (Hong

Kong)

Limted, Hong K

ong

Hong K

ong

100

Standard

Chartered Bank (

Singapore

) L

imted,

Singapore

Singapo

100

Sta

ndar

d Char

tere

d Bank Kor

ea Limt

ed, Kore

100

Standard

Chartered Bank (

China

) Limted,

China

100

Standard Char

tered Bank (T

aiwan

) Limted, T

aiwan

100

Standard Char

tered Bank A

, Germany

Fra

nce

, Ge

any

, Swe

den

100

Standard

Chartered Bank Malaysia

erhad,

Malaysia

100

nde

r PRC la

, r

egi

ster

ed as S

tan

dar

d Char

ter

ed Ba

nk (China) Lim

ted

Countr

and place of incorporation

or regist

raton

Main areas o

f opera

Group in

terest

in ordinary

share capital

Standard

Chartered Bank (Thai

) Public Compan

y Limted,

Thailand

Standard Char

tered Bank (Pakistan

) Limted, Pakistan

Pakistan

Standard

Chartered Bank Botswana Lim

ted, Botswana

Bot

swana

75.83

Sta

ndar

d Char

tere

d Bank Kenya Li

mted

, Kenya

nya

Standard

Chartered Bank Nepal L

imted, Nepal

Nepal

70.

Standard

Chartered Bank Ghana P

LC, Ghana

Ghana

Mox B

ank Lim

ted, H

ong Kong

Hong K

ong

A complete l

ist of subsidary undertaking is included in Note 40

The G

roup d

oes no

t have any ma

teri

al non-c

ontro

lling int

erest e

xcept as li

sted ab

ove, whic

h contr

ibute $

17 millon

(31 De

cemb

er 202

0: $26 m

illon

) o

f the proﬁ

t attr

ibuta

ble to no

n-cont

rollin

g inter

est and $2

98 millon (31 D

ecem

ber 2020:

08 millo

) of the e

quit

y at

trib

utabl

e to non-

contro

lling in

teres

Whil

e the G

roup

’s subs

idarie

s are subj

ect to lo

cal sta

tuto

y capital a

nd liqud

y requi

remen

ts in re

latio

n to fore

ign exchan

remi

ttanc

e, thes

e rest

ricto

ns ari

se in th

e norm

al cour

se of b

usine

ss and d

o not sig

nﬁcantl

y restr

ict th

e Grou

’

s ab

ilt

y to acces

or us

e ass

ets a

nd set

tle liab

lites o

f the Gr

oup.

The G

roup d

oes no

t have si

gnﬁcant re

stri

ctons o

n its ab

ilt

y to acce

ss or us

e its a

sse

ts an

d sett

le it

s liablit

es oth

er than t

hose

res

ultin

g from t

he reg

ulato

y fram

ework wi

thn whi

ch the b

ankin

g subsi

darie

s opera

te. The

se fra

mework

s req

uire ba

nking

ope

ratio

ns to keep c

erta

in levels o

f regul

ator

y ca

pital, li

qud as

set

s, ex

posur

e limt

s and comp

ly wit

h othe

r requ

ired rat

ios.

The

se res

trict

ons are s

ummar

ise

d below

Regulator

y and

liqudit

y requirement

The Group

’s subsidaries are required to maintan

minmum capital, leverage ratios, liqudity and expo

sure ratios which therefore

res

trict t

he abilt

y of t

hese s

ubsid

aries t

o distr

but

e cash or o

ther a

sset

s to t

he pare

nt comp

any

The s

ubsid

aries a

re also r

equire

d to mai

ntan bal

ances w

ith cen

tral ba

nks an

d othe

r regul

ator

y a

utho

rite

s in the co

untr

ies in

whi

ch they op

erate. At 3

1 Dece

mber 2021, t

he tot

al cash an

d balan

ces wi

th cent

ral bank

s was $7

3 billon (

31 Dece

mber 2020:

$67 billon) of which $

8 billon (3

1 Dece

mber 2020: $7 billo

) is res

trict

ed.

Statutor

y requirements

The G

roup’

s sub

sidar

ies are su

bject t

o stat

utor

y re

quire

ment

s not t

o make dist

rbut

ions o

f capital a

nd unre

alise

d proﬁt

s to th

par

ent comp

any

, gen

erally t

o maint

an solve

ncy. These r

equir

ement

s res

tric

t the abilt

y o

f subsi

darie

s to remit d

ivde

nds to t

Gro

up. Cer

tain s

ubsid

aries a

re also s

ubject t

o local exch

ange co

ntrol r

egul

ation

s which p

rovide f

or rest

ricto

ns on ex

por

ting

capita

l from the country other than th

rough normal

divdends.

410

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

. In

vest

ment

s in subsid

ary un

dertakin

gs, jont ventu

res and a

ssocia

tes

continued

Contractual requirement

The e

ncumb

ered a

sse

ts in t

he bala

nce she

et of th

e Grou

’

s s

ubsida

ries ar

e not ava

ilable f

or tran

sfer aro

und th

e Gro

up.

Encu

mber

ed ass

s are disc

lose

d in Risk rev

iew and C

apital r

eview (pa

ge 251).

Sha

re of proﬁt f

rom inves

tmen

t in ass

ociate

s and jon

t ventur

es comp

rise

2021

$millon

2020

$millo

Los

s from i

nvestm

ent in jo

nt vent

ures

(2)

(

Proﬁt f

rom inve

stme

nt in as

soci

ates

198

ota

196

151

Interests i

n associates a

nd jont

ventures

2021

$millon

2020

$millo

As a

t 1 Janu

ange translation dif

ference

123

Additons

Share of proﬁts

196

151

Divdend received

–

Disposals

(

(35)

Impairm

ent

–

Share of

OCI and Other

reser

(37

)

As a

t 31 Dec

embe

,16

A comp

lete li

st of th

e Grou

’

s in

teres

t in ass

ociat

es is inc

lude

d in Note 4

0. The G

roup

’s prin

cpal as

socia

tes are:

Associate

Nature of

activties

Main areas of

operation

Group interest

in ordinar

share capital

Chin

a Boh

ai Bank

Bankin

China

.26

CurrencyFair Limted

Bankin

Irelan

.42

On t

he 10t

h Sept

embe

r 20

1, the G

roup, t

hroug

h its su

bsida

y Stand

ard Char

tere

d UK Hol

dings L

imted co

mple

ted it

inv

stment in

Cur

rencyFair Lim

ted, an Irish foreign ex

change pay

ments platform.

The Group purchased Currenc

yFai

r through the contributon of

s existng

inv

stment in

s jo

nt venture, Assembl

Payments

Pte. Li

mted, a

nd a cash i

nectio

n into Cu

rren

cyFai

r of $35 m

illon, w

hich prov

ided t

he Gro

up wit

h equit

y o

f 43.42% in

Cur

renc

yFair. This ow

ner

ship, alon

g with s

eat

s on the b

oard o

f direct

ors re

sulte

d in the G

roup h

avin

g signﬁcan

t inﬂuen

over Cur

renc

yFair a

nd as su

ch will e

quit

y met

hod ac

count t

he investm

ent

The t

rans

action w

ill faci

ltate cr

eatio

n of a comb

ined p

ayme

nts a

nd fore

ign exchan

ge prod

uct

s fran

chise, co

mbinng t

cust

omer b

ase, s

taff, exper

tis

e and cap

abiltie

s of bot

h Curr

enc

yFair and A

embly Pa

yme

nts

The f

air value o

f consi

derat

on for th

e investm

ent was a

s follows:

Consideraton

$millo

Fair va

lue of t

he Gro

’s invest

ment i

n Ass

embl

y Paym

ent

Cash consideraton

ota

l consideraton

/inv

estment in associate

he fa

ir val

ue of A

sse

mbl

y Pay

men

ts wa

s det

erm

ine

d to be $

60 mi

llon

, of wh

ich t

he Gr

oup’s equi

ty o

wne

rsh

ip on t

rans

fer w

as 59

63%

. The G

rou

p car

rie

d thi

inve

stm

ent u

nde

r the e

quit

y m

eth

od at a b

alan

ce of $

16 mil

lon re

sul

tin

g in a pro

ﬁt on di

spo

sal o

f $20 mil

lon

The G

roup’

s invest

ment in C

hina Bo

hai Ban

k is les

s than 20 pe

r cent bu

t it is con

sider

ed to be an a

sso

ciate b

ecaus

e of th

signﬁc

ant inﬂue

nce th

e Grou

p is able t

o exercise ove

r the man

agem

ent and ﬁn

ancal an

d opera

ting p

olices

. This in

ﬂuence

is th

rough b

oard re

prese

ntat

ion and t

he provi

son of te

chnica

l exper

tis

e to Boh

ai. The G

roup a

pplie

s the eq

uit

y meth

od of

accounti

ng for in

vestments in assoc

iates.

The G

roup’

s own

ersh

ip perce

ntag

e in China B

ohai B

ank is 16

.26%.

For t

he year en

ded 31 D

ecemb

er 2021, th

e Grou

p reco

gnise

d Bohai

’s resu

lts t

hroug

h 30 Sep

temb

er 2021 (12 mont

hs of e

arnin

gs,

incl

udng t

he four

th qu

arte

r of 202

. B

ohai ha

s a stat

utor

y ye

ar end of 3

1 Decem

ber, but pub

lishe

s their r

esult

s af

ter th

e Grou

The G

roup w

ill the

refor

e contin

ue on a th

ree-m

onth la

g in reco

gnisn

g its sh

are of B

ohai

’s earnin

gs goi

ng for

ward

If th

e Grou

p did not h

ave signﬁca

nt inﬂue

nce in Bo

hai, th

e investm

ent woul

d be car

ried a

t fair valu

e rathe

r than th

e curr

ent

carr

ying value.

411

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

. In

vest

ment

s in subsid

ary un

dertakin

gs, jont ventu

res and a

ssocia

tes

continued

Impairment te

sting

At 31 De

cembe

r 20

1, th

e carr

ing amo

unt of G

roup

’s investm

ent in Bo

hai was gr

eater t

han it

s fair val

ue bas

ed on th

e Gro

’

sha

rehol

ding and B

ohai

’s quot

ed shar

e price. A

s a res

ult, t

he Gro

up as

sess

ed it

s investm

ent in a

ssoc

iate for i

mpar

ment an

conc

lude

d an impar

ment l

oss of $

300 m

illon was r

equir

ed due t

o the sho

rtf

all bet

en the val

ue-in-us

e and th

e carr

ing

amo

unt. T

he dec

reas

e in recover

able am

ount of B

ohai i

s prima

rly a re

sult of l

ower fore

cast ca

shﬂows du

e to the l

ates

published results being weak

er than expected.

Bohai

2021

$millon

2020

$millo

VIU

Carr

ying amount pre

imparment¹

,217

2,0

Fair va

lue

1,114

1,888

he ab

ove re

pres

ent

s th

e Gro

up’

s 1

6.2

% s

har

e of ne

t ass

s les

s oth

er eq

uit

y in

str

ent

s the G

rou

p doe

s not h

old

sis o

f recover

able am

ount

The i

mpar

ment te

st was pe

rfor

med by co

mpar

ing the r

ecoverab

le amou

nt of Bo

hai, de

term

ined by a VI

U calcula

tion

, with it

car

ying am

ount

. The VI

U calcul

ation u

ses th

e follow

ing pr

imar

y inp

•

short to medium term pr

ojectons based on

management

’

s best estimates of

uture proﬁ

s avai

lable to ordinary shareholders

The

se proj

ecton

s have b

een de

termi

ned wi

th refe

rence t

o the la

test pu

blish

ed ﬁnan

cal resu

lts a

nd hist

orcal p

erfo

rman

ce;

•

a dis

count ra

te bas

ed up

on a capita

l asse

t pricn

g mode

l (

PM) calcula

tion fo

r Boha

i repre

senti

ng the r

isk

-fre

e rate an

company

isk

premiums. Management compares

this CAPM against external

sources and the

cost

-of

-equity used for

transa

ctions in the China market;

•

a lon

g term gr

owth ra

te, for Ch

ina, wh

ich is us

ed to ext

rapol

ate in pe

rpe

tuit

y th

ose exp

ecte

d shor

t to me

dium te

rm ear

nings

to de

rive a te

rmin

al value, an

•

an est

imat

on of RW

As and RW

A grow

th to de

termi

ne a capit

al maint

enanc

e haircu

t to fore

cast pr

oﬁts

. This h

aircut is t

aken

in ord

er for B

ohai to m

eet it

s targ

et reg

ulato

y capital r

equir

ement

s over th

e fore

cast pe

rio

d. This h

aircut t

akes into ac

count

movem

ent

s in risk w

eighte

d ass

ets a

nd the t

otal capi

tal req

uired

, inclu

dng req

uired r

etaine

d ear

nings over t

ime to m

eet th

target capital ratios.

The key a

ssump

tion

s used i

n the VIU c

alcula

tion:

2021

2020

Pre ta

x disc

ount r

ate

14.83

.75

Fore

cast p

roﬁt lo

ng ter

m grow

th rate

4.75

.00

Long t

erm RW

A grow

th ra

4.75

5.0

Capital requi

rement adequacy ratio

Carrying amount

Pre imparment

$millons

Base Case

Sensitv

ites –

2021

VIU

$millon

Headroom

$millon

Pre ta

discount

rate

GDP

Discount rate

Forecast p

roﬁt

Combined

WA -

+1%

-1

+1%

-1%

-10

F -10

F +10%

Headroom

$millon

Headroom

$millon

Headroom

$millon

Headroom

$millon

Headroom

$millon

Headroom

$millon

Headroom

$millon

Headroom

$millon

Headroom

$millon

Headroom

$millon

,217

(

14.83%

4.75%

(

50)

(

82)

31)

)

(297)

(

o improve th

e head

room to ze

ro would re

quire

, on the b

asis o

f changin

g indv

idual a

ssum

ptio

ns, an in

crea

se in for

ecast p

roﬁt

by 9

.71%

, dec

reas

e in disco

unt rat

e by 0.

95%, in

crea

se in GD

P growth r

ate by 1.16

% o

r decre

ase in RW

As by 9

The m

ovement i

n R

s is cor

relat

ed to fo

recas

t proﬁt grow

th. T

his can be s

een ab

ove in the co

mbine

d R

A an

d cashﬂ

sce

nario

s in the s

ensit

vit

y tab

le.

The f

ollowi

ng tabl

e set

s out th

e summ

aris

ed ﬁnan

cal stat

ement

s of Ch

ina Boh

ai Bank p

rior t

o the G

roup

’s share o

f the

asso

ciates being applied:

30 S

ep 202

$millon

30 S

ep 2020

$millo

ota

l asset

0,95

202

otal liablites

4,1

Other equit

inst

ruments

3,0

Operat

ing income

3,557

Net proﬁt

950

Other comprehensive income

21)

412

Standard Chartered

– Annu

al Repo

rt 202

Financal state

ments

Notes to the

ﬁnancal

statement

33. Structured

entites

Accounting po

licy

A str

uct

ured en

tit

y is an en

tit

y tha

t has be

en des

igned s

o that vo

ting or s

imlar r

ight

s are not t

he dom

inant fa

ctor in de

cidng

who c

ontro

ls the e

ntit

. C

ontra

ctual a

rrang

emen

ts de

term

ine the r

ight

s and t

heref

ore releva

nt acti

vtie

s of the s

tru

cture

ent

. Str

uct

ured en

tite

s are gene

rally cr

eate

d to achi

eve a narrow an

d well-de

ﬁned ob

ject

ve with re

stri

ctons a

round t

heir

acti

vti

es. St

ruct

ure

d entit

es are con

solid

ated w

hen th

e subs

tance of t

he rel

ation

shp bet

en the G

roup a

nd the st

cture

ent

y indcat

es the G

roup h

as power ove

r the con

tract

ual rel

evant acti

vtie

s of the s

tru

cture

d entit

, is ex

pose

d to vari

able

ret

urn

s, and can u

se th

at power to a

ffe

ct the var

iable re

tur

n expo

sure.

In de

termi

nng whe

ther t

o cons

olidat

e a str

uctur

ed ent

y to whic

h asse

ts h

ave bee

n trans

ferr

ed, th

e Grou

p takes int

acco

unt it

s abilt

y to di

rect th

e relevant a

ctiv

ties of t

he str

uct

ured en

tit

. Th

ese re

levant act

ivt

ies are ge

nerall

y evide

nced

thr

ough a uni

later

al right t

o liqud

ate the s

tru

cture

d enti

ty, investme

nt in a sub

stant

ial prop

ort

ion of th

e secu

rite

s issu

ed by

the s

tru

cture

d enti

ty o

r wher

e the G

roup ho

lds sp

ecif

c sub

ordin

ate sec

urit

es tha

t embo

dy cer

tain con

trolli

ng righ

. The

Gro

up ma

y fur

ther c

onsid

er relevan

t acti

vtie

s embe

dded w

ithn con

tract

ual arr

angem

ent

s such a

s call opt

ions wh

ich give

the p

racti

cal abilt

y to dir

ect th

e entit

, s

pecia

l relat

ionsh

ps bet

en the st

ruc

ture

d entit

y an

d investor

s, an

d if a sing

invest

or has a la

rge exp

osur

e to variab

le ret

urns o

f the st

ruct

ured e

ntit

Jud

geme

nt is req

uired in d

eter

minng co

ntrol ove

r str

uctur

ed ent

ites

. The pu

rpo

se and de

sign of t

he enti

ty i

s cons

idere

alon

g with a d

eter

minat

on of wh

at the re

levant act

ivt

ies are of t

he ent

y and wh

o direct

s the

se. Fur

ther ju

dgem

ent

s are

mad

e aroun

d which inve

stor is e

xpos

ed to, an

d absor

bs th

e variabl

e retu

rns of t

he str

uct

ured en

tit

. Th

e Gro

up will h

ave to

weigh u

p all of th

ese fac

ts to co

nsid

er whe

ther t

he Gro

up, or anot

her invol

ved par

y is acti

ng as a pr

incpal i

n its ow

n right o

as an a

gent on b

ehalf o

f other

s. J

udge

ment is f

ther re

quire

d in the o

ngoin

g ass

essm

ent of co

ntrol over s

tru

cture

d enti

tes,

spe

cif

cally i

f market co

ndito

ns have a

n effe

ct on th

e variab

le retu

rn exp

osur

e of dif

ferent i

nvestor

The G

roup h

as involve

ment w

ith bo

th cons

olida

ted and u

ncon

solid

ated st

ruct

ure

d entit

es, w

hich ma

y be est

ablish

ed by the

Gro

up as a sp

ons

or or by a thir

d-part

Interests i

n consolid

ated structu

red enti

es

A str

uct

ured e

ntit

y is co

nsoli

dated i

nto th

e Grou

’

s ﬁn

ancal st

ateme

nts w

here t

Gro

up cont

rols t

he str

uctu

red en

tit

, as p

er the d

eter

minat

on in the a

ccount

ing po

licy a

bove.

The following table

pres

ents the Group

’

s interest

in consolidated structured entites.

2021

$millon

2020

$millo

Air

craf

t and shi

p leas

ing

3,450

388

Princ

pal and other s

tructured ﬁnance

229

365

ota

679

4,753

Interest

in unconsolidated struc

tured entites:

Unco

nsol

idate

d str

uctur

ed ent

ites ar

e all str

uctu

red ent

ites t

hat are n

ot cont

rolle

d by the Gr

oup. The G

rou

p enter

s into

tran

sact

ions w

ith unc

onso

lidate

d str

uctu

red ent

ites in t

he nor

mal co

urs

e of busi

ness t

o facilt

ate cust

omer t

ransa

ction

s and for

specif

c

investment opportunites. An interest in a structured entity is contractual or non-contractual in

volvement which creates

vari

ablit

y of th

e retu

rns of t

he Gr

oup ari

sng fr

om the p

erfo

rman

ce of the s

tru

cture

d enti

ty.

The t

able b

elow pre

sent

s the ca

yin

g amou

nt of the a

sse

ts re

cogni

sed in t

he ﬁnanc

al state

ment

s rel

ating t

o variabl

e inter

est

hel

d in uncon

soli

dated s

tru

cture

d enti

tes

, the ma

ximum e

xpos

ure to lo

ss rel

ating t

o thos

e inter

est

s and the t

otal a

sset

s of t

str

uct

ured en

tite

s. Ma

ximum ex

pos

ure to lo

ss is pr

imarl

y limte

d to the c

arr

yin

g amou

nt of th

e Grou

’

s on-b

alanc

e shee

exp

osure t

o the st

ruct

ure

d entit

. F

or der

ivatve

s, the m

axim

um exp

osure t

o loss r

epres

ent

s the on-b

alanc

e shee

t valuat

ion and

not t

he not

ional a

mount

. For co

mmitm

ent

s and gua

rante

es, t

he max

imum ex

posu

re to los

s is the n

otio

nal amo

unt of p

otent

ial

future losses.

2021

2020

Ass

et-

cked

securites

$millon

Structured

ﬁnance

$millon

Princpal

Finance

funds

$millon

Other

activties

$millon

backed

secur

ites

$millo

Structured

ﬁnance

$millo

Princpal

Finance

funds

$millo

Other

activties

$millo

otal

$millo

Group

’s

interest –

sets

Finan

cal as

set

s hel

d at fair

valu

e thro

ugh pro

ﬁt or los

–

128

307

,002

–

197

470

Loan

s and ad

vance

Investment securites at

amortised cos

13,635

3,466

–

3,0

–

11,6

Inves

tmen

t secu

rit

es (fair valu

through other comprehensive

–

Other assets

–

ota

l asset

,000

3,466

138

20,

639

,18

,081

16,03

Off-

alance sheet

102

–

279

–

,050

Group

’s

max

imum

exp

osure

to lo

,042

4,601

240

12,253

565

271

otal a

sse

ts of s

uctu

red

entites

241,580

13,9

1,01

56,

587

,410

,424

11,

732

413

Standard Chartered

– Ann

ual Rep

ort 202

Financal statements

33. Structured

entites

continued

The m

ain t

ype

s of acti

vtie

s for wh

ich the G

roup u

tilse

s uncon

soli

dated s

tru

cture

d enti

tes cover s

ynth

etic cr

edit de

fault s

waps

for m

anage

d investm

ent f

unds (inclu

dng sp

ecials

ed Prin

cpal Finan

ce fu

nds

), port

folio m

anage

ment p

urpo

ses

, str

uctur

ﬁnan

ce and as

set

-ba

cked sec

urit

es. Th

ese are d

etail

ed as fo

llows:

•

set-

bac

ked sec

urit

es (A

BS):

The G

roup a

lso ha

s investme

nts i

n ass

-backed s

ecur

ites i

ssue

d by third-p

art

y spo

nsor

and m

anage

d str

uctu

red ent

ites

. For th

e purp

ose of m

arket ma

king an

d at the di

scret

on of AB

S tradin

g desk

, the G

roup m

hol

d an immat

eral a

mount o

f debt s

ecur

ites f

rom str

uct

ured e

ntite

s orign

ated by cr

edit p

ortf

olio man

agem

ent

. This is

dis

d in the A

BS colu

mn above.

Portfoli

o management (

up sponsored

entites

)

: For

the purposes of portfoli

o manage

ment

the Group purchased

credit

prot

ecti

on via s

ynth

etic cr

edit de

fault s

waps f

rom not

e-iss

ung str

uctu

red en

tites

. This c

redit p

rotec

tion cre

ates c

redit r

isk

whi

ch the st

ruct

ured e

ntit

y an

d subse

quen

tly th

e end inves

tor abs

orbs

. The re

feren

ced as

set

s rem

ain on the G

rou

’

s b

alance

she

et as th

ey are not a

ssig

ned to t

hese s

tru

cture

d entit

es. T

he Gro

up cont

inues t

o own or ho

ld all of t

he ris

ks an

d retur

relating to these assets. The credit pr

otection obtained from the

gulatory-compliant securitsation

only ser

ves to pr

otect

the G

roup a

gains

t loss

es upo

n the o

ccurre

nce of el

igble cr

edit event

s and t

he und

erly

ing as

set

s are no

t dere

cognis

fro

m the G

roup

’s bala

nce she

et. T

he Gro

up doe

s not ho

ld any equ

y intere

sts i

n the st

ruct

ured e

ntit

es, bu

t may ho

ld an

ins

gnif

cant am

ount of t

he is

sued n

otes fo

r market m

akin

g purp

oses

. This i

s discl

osed i

n the AB

S secti

on above. Th

e proce

eds

of th

e note

s’ issu

ance are t

picall

y held as c

ash coll

atera

l in the is

suer

’

s a

ccoun

t opera

ted by a tr

ust

ee or invest

ed in A

A-

rate

d govern

ment

-ba

cked se

curit

es to col

latera

lise th

e str

uctu

red ent

ites s

wap obli

gaton

s to the G

roup, an

d to rep

ay the

pri

ncpal t

o investor

s at mat

urit

y. The str

uct

ured en

tite

s reimbu

rse t

he Gr

oup on ac

tual lo

sse

s incur

red, t

hrough t

he use o

f the

cash c

ollat

eral or re

alisa

ton of th

e colla

teral se

curi

ty. Corr

espo

ndingl

, th

e stru

cture

d enti

tes wr

ite dow

n the no

tes is

sue

d by

an eq

ual amo

unt of th

e los

ses inc

urre

d, in rever

se ord

er of sen

iort

. A

ll fu

nding is c

ommit

ted fo

r the lif

e of the

se vehicl

es and

the G

roup h

as no in

drect ex

posu

re in resp

ect of t

he vehic

les’ liqu

dit

y pos

iton. T

he Gro

up has r

eput

ation

al ris

k in resp

ect of

cer

tain po

rtf

olio man

agem

ent vehic

les and i

est

ment f

und

s eithe

r beca

use th

e Grou

p is the ar

rang

er and le

ad mana

ger or

because the s

tructured entit

es have

Standard Chartered

branding.

•

Structured ﬁnance:

tru

cture

d ﬁnanc

e compr

ises in

teres

ts in t

rans

action

s that t

he Gro

up or, more us

ually

, a c

ustom

er has

structured, using one or more structured entites, which provide beneﬁc

al arrangement

s for

customer

s. The Group

’

s exposure

pri

marl

y repre

sent

s the p

roviso

n of fu

nding t

o thes

e stru

ctur

es as a ﬁnan

cal inte

rme

dar

, fo

r which it r

eceive

s a lend

er’s

ret

urn

. The tra

nsact

ions l

argel

y relat

e to real e

state ﬁ

nancng an

d the pr

ovison o

f aircraf

t lea

sing an

d ship ﬁna

nce.

•

Princ

pal Finance F

und:

The G

roup

’s expo

sure to Pr

incpa

l F

inan

ce Funds r

epres

ent

s commi

tted o

r investe

d capital in

unl

everage

d investm

ent fu

nds

, prim

arly inves

tng in p

an-

sian in

fra

stru

cture

, real es

tate an

d priva

te equ

•

her a

ctiv

tie

Other activti

es includ

e structured enti

tes created to

support margin ﬁ

nancng transac

tions, the reﬁnanc

ng

of ex

istng c

redit an

d debt f

aciltie

s, as we

ll as set

ting up o

f bank

rup

tcy re

mote s

tru

cture

d enti

tes.

34. Cas

h ﬂo

w statement

Adjustment for non-cash items and other adj

ustment

s included

withn income statement

Group

Comp

2021

$millon

2020

$millo

2021

$millon

2020

$millo

Amortisaton

of discounts and

premiums of i

nvestment

rites

(

–

Interest exp

ense on subordinated liablites

551

606

Int

eres

t expe

nse on s

enio

r debt s

ecur

ite

s in iss

639

559

Other non-cash items

(

113)

)

(

30)

(

Pens

ion co

sts f

or deﬁn

ed be

neﬁt sc

heme

–

Share-

based payment

costs

132

–

Imp

airm

ent lo

sse

s on loa

ns and a

dvance

s and ot

her cr

edit

skprov

ison

254

2,325

–

Divdend income from subsi

daries

–

(

Other imparment

587

–

in on dis

pos

al of pro

per

ty, plant a

nd eq

uipme

(93)

(27

)

–

in on dis

pos

al of F

CI and A

MCS

T ﬁnanc

al ass

(

179)

)

–

Depreciaton

and amortisaton

251

–

Fair va

lue cha

nges t

aken to PL

)

–

Foreign Currency revaluation

37)

–

Net g

ain on d

ereco

gnit

on of inves

tmen

t in as

socia

–

(6)

–

Proﬁt f

rom a

sso

ciate

s and jon

t ventu

res

(

96)

(151)

–

01)

414

Standard Cha

tered

– Annu

al Repo

rt 2021

Financal state

ments

Notes to the

ﬁnancal

statement

34. Cas

h ﬂo

w statement

continued

Change in operating assets

Group

Comp

2021

$millon

2020

$millo

2021

$millon

2020

$millo

Decrease

(in

crease

)

in derivatv

e ﬁnanc

al instruments

,52

(

21,640

)

630

(

)

Inc

reas

e in deb

t secu

rite

s, tr

eas

y bill

s and eq

uit

y shar

es hel

d at

fairva

lue th

roug

h proﬁt or l

oss

(

)

85)

(

)

Inc

reas

e in loa

ns and a

dvance

s to ban

ks an

d cust

omer

(

61)

–

Net (

inc

rease

)

dec

rease in

prepayments and

accrued i

ncome

(

588

–

Net (

increase

)

decrease in

other assets

(

)

572

(

(5,

365

)

Change in operat

ing liablites

Group

Comp

2021

$millon

2020

$millo

2021

$millon

2020

$millo

(De

crea

)

/in

crea

se in der

ivat

ve ﬁnan

cal ins

ument

(

)

399

–

(

Net i

ncre

ase in d

epos

its f

rom b

ank

s, cus

tome

r accou

s, deb

t secu

rit

in issue,

Hong Kong

notes in circ

ulaton and s

hort positons

66,805

,087

6,630

Increase

(

decrease

) in accruals

and deferred i

ncome

)

(15)

Net (

ecre

ase

)/ incre

ase in o

ther l

iablit

es

(3,365)

(83

,95

4,437

,12

In 2020, $790 millo

n of addit

ons to i

nter

nally g

enerat

ed capi

talse

d sof

twa

re were inc

lude

d in the ca

sh ﬂows f

rom op

eratin

acti

vti

es sect

ion of t

he cash ﬂow s

tate

ment wi

thn chan

ge in op

eratin

g ass

ets

. In 2021, $989 m

illon of ad

diton

s to inte

rnall

gen

erate

d capita

lsed s

oft

ware ar

e inclu

ded in ca

sh ﬂows f

rom invest

ng acti

vtie

s as a sep

arate li

ne item

. The 2020

comp

arati

ve cash ﬂow s

tatem

ent ha

s not be

en adju

sted f

or this c

hange i

n clas

sif

catio

Disclosures

Group

Comp

2021

$millon

2020

$millo

2021

$millon

2020

$millo

Subordinated debt (includng accrued

interest):

Openin

g balance

16,892

16,4

16,

301

Proc

eed

s from t

he is

sue

Interest paid

(580

)

(

76)

(537

)

Repaym

ent

(

02)

Foreign exchange movements

01)

(20

Fair

value changes

)

255

(305)

243

Accrued I

nterest a

nd Other

584

596

585

552

Closing balance

16,885

16,892

16,

395

16,

Senior debt (

includng accrued interest

Openin

g balance

3,8

20,

889

Proc

eed

s from t

he is

sue

0,94

,19

Interest paid

)

(

(575)

Repaym

ent

(

)

(5,408)

(

Foreign exchange movements

(67

)

(

468

Fair

value changes

)

(372

)

426

Accrued I

nterest a

nd Other

685

(117

)

634

Closing balance

20,

889

415

Standard Chartered

– Ann

ual Rep

ort 202

Financal statements

35. Ca

sh and ca

sh equivalent

Accounting po

licy

For t

he pur

pose

s of the c

ash ﬂow st

ateme

nt, ca

sh and ca

sh equi

valent

s com

pris

e cash, o

n deman

d and over

night ba

lance

wit

h centr

al bank

s (

unle

ss res

trict

ed) and b

alance

s with l

ess t

han thre

e mont

hs’ mat

uri

ty f

rom th

e date o

f acquis

tion,

incl

udng t

reasu

y bills an

d othe

r eligbl

e bills

, loan

s and advan

ces to b

anks

, and sh

ort

-te

rm gover

nment s

ecur

ites

The f

ollowi

ng bala

nces wi

th les

s than t

hree m

onths’ m

atur

y fro

m the da

te of acq

uistio

n have be

en ide

ntﬁed by th

e Grou

p as

bei

ng cash an

d cash e

quival

ent

Group

Comp

2021

$millon

2020

2021

$millon

2020

$millo

sh and b

alanc

es at cen

tral b

anks

72,6

,712

–

Less:

restricted balances

(8,

152)

(

)

–

rea

sur

y bil

ls and o

ther e

ligbl

e bills

0,5

–

Loan

s and ad

vance

s to ban

24,7

–

rading securit

es

241

–

Amounts owed by

subsidar

y undertakings

–

11,336

12,28

11,336

2,28

36. R

elated party transac

tions

Directors and ofﬁcers

Det

ails of d

irecto

rs’ rem

uner

ation an

d inter

est

s in share

s are dis

d in the D

irect

ors’ re

mune

ration r

epor

IAS 24 Rela

ted pa

y dis

closu

res req

uires t

he follow

ing ad

diton

al infor

mato

n for key mana

geme

nt comp

ensa

tion. Key

management comprises non-ex

ecutive directors, executive

directors of Standard Chartered P

LC, the Court directors of

Standard Char

tered Bank and th

e person

s dischargng manager

ial responsiblites (PDMR) of Standard Chartere

d PL

2021

$millon

2020

$millo

Salari

es, allowances and beneﬁt

s in

ind

Share-

based payments

nuse

s paid o

r recei

vable

ran

sac

tion

s wit

h dire

cto

rs and o

the

At 31 De

cembe

r 20

1, th

e total a

mount

s to b

e discl

osed u

nder t

he Com

panies Act 20

06 (

e Act

) an

d the Li

stng Rul

es of th

Hon

g K

ong S

tock E

xchan

ge Limt

ed (Hon

g K

ng Lis

tng Rule

) about l

oans t

o direct

ors we

re as foll

ows:

2021

2020

Number

$millon

Number

illon

Directors

–

Out

standing loan balances were below $50,000

The l

oan tra

nsact

ions p

rovide

d to the d

irecto

rs of S

tanda

rd Char

tere

d PL

C were a co

nnect

ed tra

nsact

ion un

der Chap

ter 14A of

the H

ong Kong L

istng Ru

les. I

t was fu

lly exemp

t as ﬁnan

cal ass

istan

ce unde

r Rule 14A

.87

(1), as it was p

rovide

d in our o

rdinar

and u

sual cou

rse o

f busin

ess an

d on nor

mal com

mercia

l term

As a

t 31 Dece

mber 2021

, Stand

ard Char

tere

d Bank h

ad in pla

ce a charg

e over $10

0 millon (31 D

ecemb

er 2020: $89 millo

) of

cash a

sse

ts in f

avour o

f the ind

epen

dent tr

ust

ee of it

s emp

loyer ﬁnan

ced ret

ireme

nt bene

ﬁt sche

me.

her tha

n as disc

lose

d in the A

nnual Rep

ort an

d Account

s, t

here we

re no ot

her tran

sact

ions

, arran

geme

nts o

r agree

ment

out

sta

nding f

or any direc

tor

, co

nnec

ted pe

rso

n or ofﬁ

cer of th

e Comp

any which h

ave to be d

isclo

sed un

der th

e Act, th

e rul

of th

e UK Lis

tng Auth

orit

y or t

he Hon

g Kong Lis

tng Rule

416

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

36. Rela

ted part

y tr

ansact

ions

continued

Company

The C

ompa

ny has rec

eived $9

7 mi

llon (31 De

cemb

er 202

0: $9

04 millo

) of net i

ntere

st incom

e from i

ts su

bsida

ries

The C

ompa

ny issue

s debt e

xtern

ally an

d lends p

roce

eds to G

roup co

mpani

es.

The C

ompa

ny has an agr

eeme

nt with S

tand

ard Char

tere

d Bank t

hat in th

e event of St

andar

d Chart

ered B

ank def

aulti

ng on

s debt co

upon i

ntere

st pay

ment

s, w

here t

he ter

ms of su

ch debt r

equir

es it, t

he Com

pany sha

ll issu

e share

s as set

tlem

ent for

non-p

aym

ent of t

he coup

on inte

rest

2021

2020

Standard

Chartered

Bank

$millon

Standard

Chartered

Bank

(Hong

Kong)

Limted

$millon

Others

$millon

Standard

Chartere

Bank

$millo

Standard

Chartered Bank

(Hong

Kong

)

Limted

$millo

Others

$millo

Asset

Due from subsidaries

0,81

279

706

356

Der

ivat

ve ﬁnan

cal ins

tru

ment

266

–

846

126

–

Debt securites

,852

8,09

4,686

,15

otal

ssets

30,

127

988

452

0,6

857

507

Liablites

Due to subsida

ies

–

212

–

Der

ivat

ve ﬁnan

cal ins

tru

ment

339

–

otal liablites

339

–

Oth

ers include Standard Chartere

d Bank (

Singap

ore

) Limted, Standard Chartered Holding

Limted and Standard Chartere

I H Limted

Associate and jont v

entures

The f

ollowi

ng tran

sacti

ons wi

th rela

ted pa

rtie

s are on an ar

m’

s le

ngth b

asis:

2021

$millon

2020

$millo

Asset

Loan

s and ad

vance

–

otal

ssets

–

Liablites

Deposits

984

Der

ivat

ve liab

lites

otal liablites

985

1,06

Loan

commitments and other gua

rantees

he ma

xim

um lo

an com

mit

men

ts an

d oth

er gu

ara

nte

es dur

ing t

he p

eri

od wer

e $80 m

ill

on (31 D

ece

mbe

r 2020: $55 mi

llo

)

. Pos

t balance sh

eet ev

ent

On 12 J

anuar

y 202

2, St

andard C

hart

ered PLC issu

ed $1,

0 millon 2

.608 p

er cent s

enior d

ebt du

e 20

28 (

cal

lable 2027

) and

$75

0 millon 3

.603 pe

r cent sub

ordin

ated d

ebt se

curit

y du

e 2033 (

callabl

e 203

2).

A sha

re buy-b

ack for u

p to a max

imum con

side

raton o

f $750 mi

llon has b

een de

clare

d by the dir

ector

s af

ter 31 De

cemb

er 2021.

Thi

s will re

duce th

e numb

er of ordi

nar

y sha

res in is

sue by can

celling t

he rep

urcha

sed sh

ares.

A ﬁnal di

vde

nd for 2021 of 9 ce

nts p

er ordi

nar

y sha

re was de

clared by t

he dire

ctor

s aft

er 31 Dec

ember 2021

417

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

38. Auditor’s

emuneration

Audit

or’s remu

nerat

ion is in

clude

d withn o

ther g

enera

l admins

trati

on exp

ense

s. The a

mount

s pa

id by the G

roup to t

heir

pri

ncpal a

uditor, Erns

t & Y

oung LLP an

d its a

sso

ciate

s (

tog

ethe

r Ernst & Y

ng LLP)

, ar

e set ou

t below. All ser

ices ar

e approved

by the G

roup Au

dit Com

mitte

e and are s

ubject t

o contr

ols to en

sure t

he exte

rnal au

ditor

’

s ind

epend

ence is u

naf

fecte

d by the

prov

ison of o

ther s

vice

2021

$millon

2020

$millo

Audi

t fees f

or the G

rou

p stat

utor

y a

udit

of w

hich fe

es for t

he aud

it of St

andar

d Char

tere

d Bank G

rou

11.8

Fee

s paya

ble to E

Y for o

ther s

vic

es prov

ided t

o the SC PLC Gro

up:

Audit

of Standard C

hartered PL

C subsida

ies

10.8

al aud

it fee

26.7

20.9

Audit

-related assurance ser

vices

5.3

Other assurance ser

vices

Other non-aud

it services

0.1

Corp

orate ﬁnance

transaction ser

vice

0.6

al fee

s payab

The f

ollowi

ng is a des

crip

ton of t

he t

ype o

f ser

ces incl

uded w

ithn th

e cate

gorie

s liste

d above:

•

Audit f

ees fo

r the G

roup st

atuto

y audit a

re in resp

ect of f

ees p

ayable t

o Erns

t & Y

ung LLP fo

r the st

atut

y audi

t of the

con

solid

ated ﬁn

ancal st

ateme

nts o

f the G

roup an

d the se

parate ﬁ

nancal s

tatem

ent

s of Stan

dard Ch

arte

red PL

•

Audit

-re

lated f

ees co

nsist o

f fees s

uch as t

hose f

or ser

ices re

quire

d by law or re

gulat

ion to b

e provid

ed by the a

udito

, revi

ews

of interm

ﬁnancal informaton,

rep

orting on

gulatory returns

reporting to a regulator

on client

sets and extended

work

per

for

med over ﬁn

ancal inf

orma

ton and c

ontro

ls aut

hori

sed by th

ose ch

arged w

ith gover

nance

•

Other assurance ser

vices

include agreed-upon-procedures i

n relation to statutor

y and

regulator

y ﬁlngs

•

Cor

por

ate ﬁnan

ce tran

sacti

on ser

ices are f

ees pa

yable to E

Y LLP fo

r issu

ng comf

ort le

tter

xpe

nses in

curr

ed in res

pect o

f their ro

le as au

ditor

s were re

imbur

sed t

o EY LLP ($0.

2 millon

). Such e

xpen

ses did n

ot excee

d 1%

of to

tal fe

es charg

ed above.

. Stand

ard Chartered

C (

Compan

)

Group reorganisaton

The Group has completed a

roup

reorganisaton. The

urpose of the

reorganisaton

was to

form a holding

company

str

ucture

(

a “Si

ngapo

re Hub

”

) under t

he exi

stng St

andar

d Chart

ered B

ank Gr

oup.

The S

ingap

ore Hub h

as be

en crea

ted wi

th Stan

dard Ch

arte

red Ban

k (

ingap

ore

) Limt

ed (“SCB S

”) acq

uirng ow

ner

ship of

0% of Stan

dard Ch

arte

red Ba

nk Mala

ysia B

erha

d (“SCB MY

”), Stand

ard Char

tere

d Bank (

Viet

nam

) Li

mted (“S

CB VN”

)

,an

871% of St

andard Ch

art

ered B

ank (T

hai) Public C

ompa

ny Limted (“

SCB TH

”).

On 1 S

eptem

ber 2021, S

CB SL purc

hase

d SCB MY fr

om Stan

dard Ch

arter

ed Hol

dings (As

ia Pacif

c

) B.

. (

“

SCHA

P”

)

On 1 Nove

mber 2021

, SCB SL pur

chase

d SCB TH dir

ectl

y from t

he Com

pany for t

he iss

uance o

f SCB SL sha

re capita

On 1 D

ecemb

er 2021, SCB SL p

urcha

sed SC

B VN direc

tly f

rom the C

ompa

ny for the i

ssua

nce of SCB SL s

hare cap

ital.

The a

bove had no i

mpact o

n the PLC Group.

418

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

. S

tandard C

harter

ed PL

C (Company

)

con

tinued

Classif

cation and

asurement of ﬁna

ncal instruments

Financal ass

ets

2021

2020

Derivatves

held for

hedging

$millon

Amortised

cost

$millon

Non-tr

ading

mandatorily

at f

air val

through

proﬁt or l

oss

$millon

Derivatves

held for

hedging

$millo

Amortised

cost

$millo

Non-trading

mandatorily

at fair value

through

pro

ﬁt or l

oss

$millo

otal

$millo

Der

ivat

ves

–

320

971

–

971

Investment securites

–

,071

–

,78

Amounts owed by

subsidar

undertakings

–

11,

336

–

11,336

–

12,

283

–

12,

283

ota

36,727

,429

783

Stand

ard

Chartere

Bank, Stan

dard C

hartere

d Bank

(Hong Kong) Lim

ted, Standard Chart

ered Bank (

China

) Limted and Standard Charter

ed Bank (

Singap

ore

)

Limted issued

Loss Absorbing Capacity (LAC)

eligble debt securites

Ins

tru

ment

s clas

sif

ed a

s amor

tise

d cost are r

ecord

ed in St

age 1.

Der

ivat

ves held f

or hed

ging are h

eld at fa

ir value an

d are cla

ssif

ed a

s Level 2 whil

e the cou

nter

part

y i

s Stand

ard Char

tere

Bank and Stan

dard Chartered B

ank (Hong K

Limted.

Deb

t secu

rite

s compr

ise cor

pora

te sec

urit

es iss

ued by St

andard C

hart

ered B

ank and ha

ve a fair valu

e equ

al to carr

ing valu

of $9

,424 millon (3

1 Decem

ber 2020: $11,146 m

illon

In 2021 and 2020, amou

nts owe

d by subs

idar

y und

ert

aking

s have a fai

r value eq

ual to car

ying va

lue.

Financal liablites

2021

2020

Derivatves

held for

hedging

$millon

Amortised

cost

$millon

Designated

at f

air val

through

proﬁt or l

oss

$millon

Derivatves

held for

hedging

$millo

Amortised

cost

$millo

Designated

at fair value

through

proﬁt or

loss

$millo

otal

$millo

Der

ivat

ves

339

–

339

–

360

Deb

t sec

urit

es in is

sue

–

16,8

26,

281

–

20,

701

266

Subordinated

liab

lites and

other

borrow

ed funds

–

13,830

2,3

16,16

–

4,78

286

6,069

Amounts owed to subsid

ar

undertakings

–

212

–

212

30,

639

11,

804

782

360

696

552

42,6

Der

ivat

ves held f

or hed

ging are h

eld at fa

ir value an

d are cla

ssif

ed a

s Level 2 whil

e the cou

nter

part

y i

s Stand

ard Char

tere

Bank

The f

air value o

f debt s

ecur

ites in i

ssue h

eld at am

orti

sed co

st is $17

171 m

illon (31 D

ecemb

er 2020: $21,

231 m

illon

The f

air value o

f subo

rdinat

ed liabl

ites an

d other b

orr

owed fu

nds he

ld at amo

rtis

ed cos

t is $14,

569 mi

llon (31 De

cemb

er 202

$15

,798 millo

)

Deriv

v

e ﬁnancal instruments

Deriv

atves

2021

2020

Notional

princpal

amounts

$millon

Assets

$millon

Liablites

$millon

Notional

princpal

amount

$millo

Asset

$millo

Liablites

$millo

Foreign e

xchange deriv

atve contracts:

Forward foreign exchange

300

126

Currency swaps

–

3,895

186

Interest rate deriv

v

e contract

Swap

14,465

266

777

–

For

ard ra

te agreements and opti

ons

–

24,87

320

339

266

971

360

419

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

. S

tandard C

harter

ed PL

C (Company

)

con

tinued

Credit r

Max

imum ex

posu

re to cr

edit r

isk

2021

$millon

2020

$millo

Der

ivat

ve ﬁnan

cal ins

tru

ment

320

971

Debt securites

,071

Amounts owed by

subsidar

y undertakings

,336

12,28

36,727

In 2021 and 2020, amou

nts owe

d by subs

idar

y und

ert

aking

s were neit

her p

ast due n

or imp

ared; th

e Comp

any had no

indvidu

ally impared loans

In 2021 and 2020, the C

ompany h

ad no imp

ared de

bt sec

urit

es. Th

e debt s

ecur

ites he

ld by the C

ompa

ny are issu

ed by

Standard Char

tered Bank

, Standard Char

tered Bank (Hong Kong) Limted, Stand

ard Chartered Ban

k (

China

) Limted and

Standard Char

tered Bank (Singapore

) Limted, sub

sidar

y undertak

ings with credit rating

s of A

The

re is no m

ateri

al expe

cted c

redit lo

ss on t

hese in

str

umen

ts as t

hey are St

age 1 as

set

s, an

d of a high q

ualit

Liqudity ri

The f

ollowi

ng tabl

e analy

ses th

e resid

ual cont

ract

ual mat

urit

y of t

he as

set

s and liab

lites o

f the Co

mpany on a

discounted basis:

2021

e mon

or less

$millon

Between

one month

and three

months

$millon

Between

three

nth

s and

x mon

ths

$millon

Between

x mon

ths

and nine

months

$millon

Between

nine months

and one

yea

$millon

Between

e year

d two

yea

$millon

Between

wo year

and ﬁv

yea

$millon

re th

ﬁve

years

and

undated

$millon

Asset

Der

ivat

ve ﬁnan

cal

instrument

–

104

103

320

Investment securites

–

4,444

,947

16,720

5,07

Amount owed

by subsidary

undertakings

2,33

305

853

2,34

,98

11,336

Inv

estments in subsidary

undertakings

–

60,

429

60,

429

otal

ssets

2,39

160

218

305

1,813

6,848

80,

156

Liablites

Der

ivat

ve ﬁnan

cal

instrument

–

117

Senior debt

–

11,

873

26,

281

Othe

r liablites

169

126

–

Subordin

ated liablites and

other borrow

ed f

unds

,007

240

883

,409

470

16,

162

otal liablites

1,2

173

988

,95

14,4

43,

244

Net liqudity gap

,167

(

13)

120

(

)

53,

912

420

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

. S

tandard C

harter

ed PL

C (Company

)

con

tinued

Liqudity risk

continued

2020

One month

or less

$millo

Bet

ween

one month

and three

months

$millo

Bet

ween

three

months and

six months

$millo

Bet

ween

six months

and nine

months

$millo

Bet

ween

nine months

and one

year

$millo

Bet

ween

e year

d two

year

$millo

Bet

ween

wo yea

d ﬁve

year

$millo

than

ﬁve year

and

undated

$millo

otal

$millo

Asset

Der

ivat

ve ﬁnan

cal

instrument

136

–

326

485

Investment securites

–

247

Amount owed

by subsidary

undertakings

600

355

975

–

300

12,28

Inv

estments in subsidary

undertakings

–

Other assets

–

otal

ssets

710

600

975

,620

Liablites

Der

ivat

ve ﬁnan

cal

instrument

138

–

114

–

360

Senior debt

1,000

–

230

436

–

9,9

10,

Amount owed

subsidar

undertakings

–

212

Othe

r liablites

179

126

–

Subordin

ated liablites and

other borrow

ed f

unds

–

3,710

0,403

6,069

otal liablites

,317

126

1,436

726

13,

710

21,

300

3,07

Net liqudity gap

)

(

,62

51,

526

Financal liablites on an undiscoun

ted basis

2021

e mon

or less

$millon

Between

one month

and three

months

$millon

Between

three

nth

s and

x mon

ths

$millon

Between

x mon

ths

and nine

months

$millon

Between

nine months

and one

yea

$millon

Between

e year

d two

yea

$millon

Between

wo year

and ﬁv

yea

$millon

re th

ﬁve

years

and

undated

$millon

Der

ivat

ve ﬁnan

cal

instrument

–

117

Deb

t sec

urit

es in is

sue

179

130

196

5,1

,12

,019

Subordin

ated liablites and

other borrow

ed f

unds

1,114

134

261

786

Othe

r liablites

–

otal liablites

1,263

216

208

,666

16,02

26,5

53,46

2020

One month

or less

$millo

Bet

ween

one month

and three

months

$millo

Bet

ween

three

months and

six months

$millo

Bet

ween

six months

and nine

months

$millo

Bet

ween

nine months

and one

year

$millo

Bet

ween

e year

d two

year

$millo

Bet

ween

wo yea

d ﬁve

year

$millo

More tha

ﬁve year

and

undated

$millo

otal

$millo

Der

ivat

ve ﬁnan

cal

instrument

138

–

114

–

360

Deb

t sec

urit

es in is

sue

1,000

,517

446

317

350

11,

783

Subordin

ated liablites and

other borrow

ed f

unds

–

359

,069

Othe

r liablites

–

otal liablites

870

446

,344

421

Standard Chartered

– A

nnu

al Rep

ort 202

Financal statements

40. R

elated undert

akings of

the Group

As a

t 31 Dece

mber 2021

, the G

roup

’s inter

est

s in relat

ed und

ert

aking

s are dis

d below. Unles

s oth

wis

e state

d, the s

hare

capit

al disc

lose

d compr

ises o

rdinar

y o

r commo

n share

s which ar

e held by su

bsidar

ies of t

he Gr

oup. Sta

ndard Ch

arte

red Ba

(Hong

ng) Li

mted, Standar

d Chartered

Funding (

Jersey

)

Limted, Stanc

har

Nominees Limted,

Standard Chartered

Holdings

Lim

ted and

Standard

Chartered Nominees Lim

ted are d

irectly hel

d subsid

aries, all other

related undertakings ar

e held

indr

ectly. Unles

s othe

wis

e state

d, the p

rincp

al count

y of op

eratio

n of eac

h subsi

dar

y is th

e same a

s its co

untr

y o

inco

rpo

ration N

ote 32 det

ails un

der

takin

gs tha

t have a sig

nﬁcant cont

ribu

ton to t

he Gro

’s net proﬁt o

r net as

set

Subsidary Undertakings

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The follo

wing companies

e the address of

1 Basinghall

venue, London, E

C2V 5DD

, United Kingdom

Fin

entures UK Limted

United Kingdom

0 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng (UK) L

imte

United Kingdom

£1

00 Ordinar

y shares

100

SC (

Secretaries

) Li

mted

United Kingdom

£1

.00 Ordinar

y shares

100

SC T

ran

spor

t Leas

ing 1 L

United Kingdom

£1

0 Ordinar

y shares

100

SC T

ran

spor

t Leas

ing 2 Li

mted

United Kingdom

£1.00 Ordinar

y shares

SC V

tur

es Innova

tion I

nvestm

ent L.

United Kingdom

Limted Partnership interest

100

SCMB Overseas Limted

ited Kingdom

10 Ordinar

100

Stanchart Nomi

Limted

United

ingdom

£1

.00 Ordinar

y shares

100

Standard

Chartered Africa Lim

ted

United Kingdom

£1.00 Ordinar

y shares

Standard Char

tered Bank

United Kingdom

$0.01

Non-Cumulati

Irredeemable Preference shar

$5.00 Non-Cumulative

Redeemable Pr

eference shares

100

$1.00 Ordinar

y shares

100

Standard

Chartered Foundation

United Kingdom

uarantor

100

Standard

Chartered Health T

ustee

(UK) Limted

United Kingdom

£1.00 Ordinar

y shares

100

Standard

Chartered Holdings Lim

ted

United Kingdom

0 Ordinar

y shares

Standard

Chartered I H Lim

ted

United Kingdom

$1.00 Ordinar

y shares

100

Sta

ndar

d Char

tere

d Leasi

ng (UK) 2 L

imte

United Kingdom

.00 Ordinar

y shares

100

Sta

ndar

d Char

tere

d Leasi

ng (UK) 3 L

imte

United Kingdom

1.00 Ordinar

y shares

100

Standard

Chartered Leasing (

UK) Limted

United Kingdom

.00 Ordinar

y shares

100

Standard

Chartered NEA Limted

nited Kingdom

.00 Ordinar

y shares

100

Standard

Chartered Nominees Lim

ted

United Kingdom

£1

.00 Ordinar

y shares

100

Standard

Chartered Nominees (P

ate Clients UK) Li

mted

ite

Kingdom

$1.00 Ordinar

y shares

100

Standard

Chartered Overseas Holdings Lim

ted

United Kingdom

£1.00 Ordin

ary share

Standard

Chartered Securites (

Africa

) Holdings

Limted

United Kingdom

.00 Ordinar

y shares

100

Standard

Chartered T

rustees (UK)

Limted

United Kingdom

1.00 Ordinar

y shares

100

Standard

Chartered UK Holdings

Limted

United Kingdom

£10.00 Ordi

nar

y shares

100

The S

C T

ransp

ort Le

asin

g Part

ner

ship 1

United Kingdom

Limted Partnership interest

The S

C T

ransp

ort Le

asin

g Part

ner

ship 2

United Kingdom

Limted Partnership interest

The S

C T

ransp

ort Le

asin

g Part

ner

ship 3

United Kingdom

Limted Partnership interest

100

The S

C T

ransp

ort Le

asin

g Part

ner

ship 4

United

ingdom

Limted Partnership interest

The BW Le

asing Pa

rtn

ers

hip 1 LP

United Kingdom

Limted Partnership interest

100

The BW Le

asing Pa

rtn

ers

hip 2 LP

United Kingdom

Limted Partnership interest

100

The BW Le

asing Pa

rtn

ers

hip 3 LP

United Kingdom

Limted Partnership interest

100

The BW Le

asing Pa

rtn

ers

hip 4 LP

United Kingdom

Limted Partnership interest

100

The BW Le

asing Pa

rtn

ers

hip 5 LP

United Kingdom

Limted Partnership interest

100

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of 2 Mor

e Londo

Riversde,

London SE1 2JT

, Un

ite

Kingdom

icks (C&K) L

United Kingdom

Limted Partnership interest

100

icks (C) LP

United Kingdom

Limted Partnership interest

100

icks (

) LP

United Kingdom

Limted Partnership interest

100

icks (M

) LP

United Kingdom

Limted Partnership interest

100

The f

ollow

ing co

mpani

es have t

he ad

dres

s of 8th F

loo

Farringdon

Street, London, E

C4A 4AB,

United Kingdom.

SC V

tur

es G.

. L

imte

United

Kingdom

£1.00 Ordin

ary share

sem

bly Pay

men

ts UK L

United Kingdom

1.00 Ordinar

y shares

100

The follo

wing company

has the address of

1 Bartholomew La

ne,

London, E

C2N 2

AX, United Kingdom

rras

i Covere

d Bon

ds LLP

United Kingdom

Memb

ership In

terest

The follo

wing companies

e the address of

Thomas House, 84

Eccleston

Square, London, SW1V

1PX, Uni

ingdom

Zodi

a Custo

dy Li

mted

United

Kingdom

$1.00 Ordinar

y shares

100

Zodia

Holdings Lim

United Kingdom

$1.00 Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of TM

F Grou

p, 8th Fl

oor,

Farringdon Street, London,

EC4A 4AB, Un

ited Kingdom

Zodi

a Marke

ts (U

K) Limt

United

ingdom

00 Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of Sp

aces

, 25 Wil

ton

Road, V

ictora, London, S

, United Kingdom

Zodia

Markets Holdings Lim

ted

United Kingdom

$1.00 Ordinar

y shares

5.0

The follo

wing company

has the address of

Robert Denholm

Hou

se, Bl

etch

ingl

y Road, N

utﬁel

d, Redhi

ll, RH1 4HW

, Un

ited

Kingdom

CurrencyFair (UK) Lim

nited Kingdom

1.00 Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s Edif

íco Kila

mba,

7 And

ar Avenida 4 d

e Feverei

ro, Marg

inal, Lu

anda

, Ango

Standard

Chartered Bank Angola S.A

Angola

AOK8,

42.0

5 Ord

inar

y sh

are

The f

ollow

ing com

pany ha

s the a

ddres

s of Level 5

, 345 G

eorg

e St,

Sydney NS

W 2000, Aus

trali

Standard

Chartered Grindlays Pty Limted

Aust

ralia

D Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 17

31 Que

en St

reet

Mel

bour

ne VI

C 300

0, Austra

lia

sem

bly Pay

men

ts Aus

trali

a Pt

y Ltd

Australia

$ Ordinar

y shares

100

The follo

wing company

has the address of

Wilsons Land

ing,

Level 5

, 6A Gle

n Stre

et, M

ilso

ns Point N

SW 2061, Aust

ralia

Curren

cyFair Australia Pt

y Ltd

Aust

ralia

D Ordinar

The f

ollow

ing co

mpany ha

s the a

ddres

s of Level 20, 31 Q

uee

Street, Melbourne V

IC 3000, A

ustralia

Zai Aus

tralia P

ty L

Australia

UD0.01 Ordinar

y shares

100

$1.00 Ordinar

y shares

100

The follo

wing companies

e the address of

Floor Standard

Hou

se Bl

dg, Th

e Mall

, Que

ens Roa

d, PO Box 496, G

abo

rone,

Botswana

Standard Char

tered Bank Insurance Agenc

y (

Propr

ietar

)

Limte

Bot

swana

BWP Ordinar

y shares

100

Standard

Chartered Inves

ment

Ser

vices (P

roprietar

) Lim

ted

Bot

swana

BWP Ordinar

y shares

100

Standard

Chartered Bank Botswana Lim

ted

Bot

swana

BWP Ordinar

y shares

75.8

Standard

Chartered Bots

na Nominees (P

roprietar

) Lim

ted

Botswana

BWP

rdinar

y shares

Standard

Chartered Bots

na Education

rust

Botswana

Interest in T

ust

100

40. R

elated undert

akings of

the Group

continued

Subsidary undertakings

continued

423

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of Avenida B

riga

dero

Far

ia Lima

, no 3.47

, 6 an

dar

, c

onjun

to 62 – T

orre N

orte

Condomino

Patio

Victor Malzoni

, CEP

04538-

133, Sao Paulo

Brazil

Standard

Chartered Partic

oes Ltda

razil

BRL

1.00 Ordi

nar

y shares

100

Standard

Chartered Representaç

ão Ltda

Bra

zil

BRL

1.00 Or

dinar

y shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of G0

1-02, Wi

sma H

aj

Moh

d T

aha Bui

ldng

, Jalan G

ado

ng, B

4119

, Br

une

i Dar

uss

alam

Sta

ndar

d Char

tere

d Secu

rit

es (B

) S

dn Bhd

Brunei Dar

ussalam

BND1.00 Ord

inar

y shares

100

The follo

wing company

has the address of

Standard Chartered

Ban

k Came

roon S

A, 11

55, Bo

ulevar

d de la Lib

ert

é, Dou

ala, B

1784, Cameroo

Standard Char

tered Bank Cameroon S

Camero

AF10,000

.00 Ordinary shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 6

6 W

ellin

gton S

tre

et,

st, S

uite 4100, T

oro

nto Do

minon C

ent

re, T

oront

o ON M5K 1

Canada

CurrencyFair (

Cana

) Ltd

Canada

AN$

ommon sha

res

100

The follo

wing company

has the address of

Maples Corporate

vice

s Limte

d, PO B

ox 309

, Ugl

and Ho

use, G

rand C

aym

KY1-

110

4, Cayman Island

Cerulean Investments LP

Cay

man Islands

Limted P

art

nership interest

100

The follo

wing company

has the address of

Maples Fi

nance

Lim

ted, P

O Box 10

93 GT

, Que

ens

gate H

ouse

, Geo

rget

own,

Grand Ca

yman, Caym

Islands

SCB I

estment Holdi

ng Company Li

mted

Caym

Islands

1,00

0.00 A Ord

inar

y sh

ares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of W

lkers C

orp

orate

Lim

ted, C

aym

an Cor

por

ate Ce

ntre, 2

7 Hos

pital Ro

ad Ge

orge

own, G

rand C

aym

an KY

1-9008

, Ca

yman I

slan

Sirat

Holdings Limted

Caym

an Islands

$0.01 Ordinar

y shares

The follo

wing company

has the address of

No. 1034, Ma

naged

by T

ianin D

ong

jan

g Sec

retar

ial S

vice

s , Co., Lt

d., Room 202

ﬁce Are

a of Ins

pec

tion Wareho

use,

, No.6262 Ao Zhou Ro

ad,

Don

ang Fre

e T

rade Por

t Zone, T

nin Pilo

t Free T

rade Zo

ne,

China

Pemb

roke Air

craf

t Leasi

ng (T

nin

) Li

mted³

China

$1.00 Ordinar

y shares

100

The follo

wing company

has the address of

No. 1035,

Managed

by T

ianin D

ong

jan

g Sec

retar

ial S

vice

s , Co., Lt

d., Room 202

ﬁce Are

a of Ins

pec

tion Wareho

use,

, No.6262 Ao Zhou Ro

ad,

Don

ang Fre

e T

rade Por

t Zone, T

nin Pilo

t Free T

rade Zo

ne,

China

Pemb

roke Air

craf

t Leasi

ng T

ianin 1 Li

mted

China

CNY

1.00 Ordinar

y shares

100

The follo

wing company

has the address of

No. 1036, Ma

naged

by T

ianin D

ong

jan

g Sec

retar

ial S

vice

s , Co., Lt

d., Room 202

ﬁce Are

a of Ins

pec

tion Wareho

use,

, No.6262 Ao Zhou Ro

ad,

Don

ang Fre

e T

rade Por

t Zone, T

nin Pilo

t Free T

rade Zo

ne,

China

Pemb

roke Air

craf

t Leasi

ng T

ianin 2 Li

mted

China

CNY

1.00 Ordinar

y shares

100

The follo

wing company

has the address of

Standard Chartered

wer

, 201

Centur

y A

venue,

Pudong, Shanghai 2

00120,

China

Standard

Chartered Bank (

China

) Limted

China

CNY Ordinar

y shares

100

The follo

wing company

has the address of

26F

, F

tune

Financa

ntre, #

5, Don

g San Hu

an Zho

ng Lu, Cha

oyang Dis

trct

, Be

iing

. R. Chi

na.

Standard

Chartered Corporate Advisory Co. Ltd

China

00 Ordinar

y shares

100

40. R

elated undert

akings of

the Group

continued

Subsidary undertakings

continued

424

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The f

ollow

ing co

mpany ha

s the a

ddres

s of No. 3

5, Xin

huanb

e

Road

, TEDA, T

ian

in, 30

0457

, China

Standard

Chartered Global Business Services Co., L

China

$ Ordinar

y shares

The f

ollow

ing co

mpani

es have t

he ad

dres

s of Unit

s 61-65 (

ﬁce

use o

nly

), Se

-nu

mber

ed Room 0

1-04

, Room 901

, No 6, Z

huj

ang

East

Road, T

ianhe Distrct, Guangzhou

Cit

, Guangdong P

rovince,

China

Standard

Chartered Global Business Services (

Guangzhou

)

Co., L

td.

China

$ Ordinar

y shares

Standard

Chartered (

Guangzhou

) Business Ma

nagement

Co., L

td.

China

$ Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of Roo

m 26

, N

o 9

, Linh

est R

oad, T

ianhe

Distrct, Guangzhou, C

hina

Guangzhou CurrencyFair

Information T

nology Lim

ted³

China

CNY Ordin

ary share

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of No. 1

88 Y

esh

en Rd, 11F

A-

1161 RM, Pu

dong N

ew Dist

rct

, Shan

ghai, 3

1, 20130

8, Chi

Standard

Chartered T

radi

ng (Shang

hai) L

imted

China

$15,000

,000.

00 Ord

inary Share

100

The follo

wing company

has the address of

Standard Chartered

Ban

k Cot

e d’I

voire, 2

3 Bo

ulevard d

e la Répu

bliqu

e, Abi

dan 17

17B.

. 11

, Cot

e d’I

voire

Sta

ndar

d Char

tere

d Bank C

ote d

’ Ivoir

e SA

te d

’Ivoi

OF100,000.

00 Ordinary shares

100

The follo

wing company

has the address of

Standard Chartered

Ban

k France, 32 Ru

e de Mon

ceau,

750

08, Par

, France

Pemb

roke Lea

se France S

anc

€

1.00 Ordinar

y shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of 8 Ecowa

s A

nue,

Banjul, Gamb

Standard Char

tered Bank Gambia Limted

Gambia

MD1.00 Ordinar

y shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of T

aun

usanl

age 16

60325

, Frank

fur

t am Mai

n, Ge

rmany

Standard Char

tered Bank A

many

€ Ordin

ary shar

100

The follo

wing companies

e the address of

Standard

Cha

rter

ed Ba

nk Buil

dng, 87 In

dep

ende

nce Avenue

, P

.O. Box 7

Accra,Ghana

Standard

Chartered Bank Ghana P

Ghana

S Ordinar

GHS0.52 Preferenc

e shares

Standard

Chartered Ghana Nominees Li

mted

Ghana

HS Ordinar

y shares

100

The follo

wing company

has the address of

Standard Chartered

Ban

k Gha

na Limt

ed, 87

, Indep

ende

nce Avenu

e, Post Of

ﬁce Box

678, Accra

, Ghan

Standard Char

tered W

ealth Manage

ment Limted Company

Ghana

HS Ordinar

y shares

100

The follo

wing company

has the address of

18/

., Standar

Cha

rter

ed T

ower, 388 Kwun T

ong Ro

ad, Kwun T

ong

, Kowloo

Hong K

ong

Horsford Nominees

Limted

Hong K

ong

D Ordinar

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of 14t

h Floo

, O

aikoo Pl

ace, 979 K

ing’

s Ro

ad, Q

uarr

y B

, H

ong Kon

Kozagi Lim

ted

Hong Kong

HKD Ordinar

y shares

100

Standard

Chartered PF R

eal Estate (Hong

Kong) L

imted

Hong Kong

$ Ordinar

y shares

100

40. R

elated undert

akings of

the Group

continued

Subsidary undertakings

continued

425

Standard Chartered

– A

nnu

al Rep

ort 202

Financal statements

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of 15/F

., T

International

Finance Centr

e, No

. 8 Fina

nce Street, Central,

Hong K

ong

Marina Acacia Shippng Limte

Hong K

ong

$ Or

dinary shar

Marina Ameth

yst Shippng

Limted

Hong Kong

$ Ordinar

y shares

100

Marina Angeli

te Shippng

Limted

Hong K

ong

$ Ordinar

y shares

100

Marina Beryl Shippng

Limted

Hong Kong

$ Ordinar

y shares

100

Marina Eme

rald Shippng Limted

Hong Kong

$ Ordinar

y shares

100

Marina Flax

Shippng Lim

ted

Hong Kong

$ Ordinar

y shares

100

Marina G

loxina Shippng Limted

Hong K

ong

$ Ordinar

y shares

Marina Haz

el Shippng

Limted

Hong K

ong

$ Ordinar

y shares

100

Marina Ile

x Shippng

Limted

Hong Kong

$ Ordinar

y shares

100

Marina Iridot

Shippng Li

mted

Hong K

ong

$ Ordinar

y shares

Mar

ina Le

asin

g Limte

Hong K

ong

$ Ordinar

y shares

100

Marina Mimosa

Shippng Li

mted

Hong Kong

$ Ordinar

y shares

100

Marina Moonstone

Shippng Lim

ted

Hong Kong

$ Ordinar

y shares

100

Marina P

eridot Shippng

Limted

Hong Kong

$ Ordinar

y shares

100

Marina S

apphire Shippng Limted

Hong Ko

$ Ordinar

y shares

100

Marina T

ourm

aline Shippng Limted

Hong K

ong

$ Ordin

ary share

100

Standard

Chartered Leasing Group

Limted

Hong K

ong

$ Ordinar

y shares

100

Sta

ndar

d Char

tere

d T

ade Su

ppor

t (HK) L

imte

Hong K

ong

HKD Ordinar

y shares

100

The follo

wing companies

e the address of

13/

F Standard

Cha

rter

ed Ba

nk Buil

dng, 4

-4A De

s V

oeu

x Road C

entr

al,

Hong K

ong

Standard

Chartered Private E

quit

Limted

Hong K

ong

HKD Ordin

ary share

100

Standard

Chartered Private E

quit

Managers (Hong

Kong)

Limte

Hong Kong

HKD Ordinar

y shares

The follo

wing company

has the address of

, Standa

Cha

rter

ed Ba

nk Buil

dng, 4

-4A De

s V

oeu

x Road

, Cent

ral,

Hong K

ong

Standard

Chartered T

rust (

Hong Kong

) Lim

ted

Hong Kong

HKD Ordinar

y shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of 15/F

, T

International

Finance Centr

e, No

. 8 Fina

nce Street, Central,

Hong K

ong

Standard

Chartered Securites (Ho

ng K

ong) Lim

ted

Hong Kong

HKD Ordinar

y shares

100

The follo

wing company

has the address of

21/

Standard

Cha

rter

ed T

ower, 388 Kwun T

ong Ro

ad, Kwun T

ong

, Kowloo

Hong K

ong

Standard

Chartered Asia Limted

Hong K

ong

HKD Deferred shares

100

HKD Ordinar

y shares

100

$ Ordinar

y shares

100

The follo

wing companies

e the address of

32/F

Standard

Cha

rter

ed Ba

nk Buil

dng, 4

-4A De

s V

oeu

x Road

, Cent

ral,

Hong K

ong

Standard

Chartered Bank (Hong

Kong)

Limted

Hong Kong

HKD A O

rdin

y shar

100

HKD B O

rdina

y shar

$ D Ord

inar

y sh

ares

$ C Ord

inar

y sh

ares

100

Mox B

ank Lim

ted

Hong Kong

HKD Ordinar

y shares

5.1

40. R

elated undert

akings of

the Group

continued

Subsidary undertakings

continued

426

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The f

ollow

ing co

mpany ha

s the a

ddres

s of 31/F

, T

ower 2

imes S

quar

e, 1 Mat

heso

n St, C

aus

eway Ba

, Ho

ng Kong

Assembl

Payment

s HK

Limted

Hong

Kong

HKD Ordinary Shares

The follo

wing company

has the address of

Suites 110

3-4

A T

owe

, Lan

dmar

k East

, 100 H

ow Ming S

tree

t, K

n T

ong,

Hong K

ong

Currencyfair Asia Limted

Hong Kong

HKD Ordin

ary share

The f

ollow

ing co

mpany ha

s the a

ddres

s of 1s

t Floo

, Euro

Build

ng, No.

1, Haddo

ws R

ad,

Nungambakkam, C

hennai,

600 00

6, Indi

Standard

Chartered Global Business Services Private

Limted

India

INR10.00 Equity shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 90 M

.G.Roa

d, II Fl

oor,

Fort

, Mumbai, Maharashtra, 4

00 001, India

Standard

Chartered Financ

e Private Lim

ted

India

INR10

.00 Ordinary shares

98.

The f

ollow

ing co

mpany ha

s the a

ddres

s of G

round F

loo

Cre

scen

zo Build

ng, G B

lock

, C 38/39

, Ban

dra Kurl

a Com

plex

Bandra (East

), Mumbai, Mumbai, Mah

arashtra, 400

051, India

Sta

ndar

d Char

tere

d Priva

te Equit

y Ad

viso

y (India) Privat

Limte

India

NR1,000.00 Ordinar

y shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of Se

cond F

loor,

Indiqube E

dge, Khata No

. 571/

630

.No.6

4, Ambali

pura

Vill

age, V

thu

r Hobl

i, Mara

thah

alli Su

b-Di

vsio

n, W

d No. 150,

Bengaluru, 560102, Indi

Standard

Chartered Research

and T

echnol

ogy India

Private

Limte

India

R10.00 A Equ

y shar

100

INR10.00 P

ref

erence shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of Cre

scen

zo, 6t

h Floo

Plot N

o 38-39 G B

lock , B

andra Kur

la Co

mple

x, Ba

ndra Eas

Mum

bai , M

ahara

shtr

a , 400

051, In

dia

Standard

Chartered Capital Li

mted

India

INR10.00 E

quit

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 2n

d Floo

, 2

5 M.G.

Road

, Fort

, Mu

mbai, 4

00 0

01, In

dia

Standard

Chartered Securites (I

ndia

) Lim

ted

India

INR10.00 Equity shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of G

round F

loo

Cre

scen

zo Build

ng, G B

lock

, C 38/39

, Ban

dra Kurl

a Com

plex

Bandra (East

), Mumbai, Mumbai, Mah

arashtra, 400

051, India

St Helen

’s No

minees Ind

ia P

rivate Li

mted

dia

INR10.

Equity shares

100

The follo

wing company

has the address of

aishnav Serenity

Firs

t Floo

, N

o. 112, Kora

manga

la Ind

ustr

ial Ar

ea, 5t

h Blo

ck,

Koramangala, Bangalore, Karnataka, 560

095, India

Standard

Chartered (India

)

Modeling and Ana

ytics Centre

Pri

vate Li

mted

India

INR10.00 E

quit

y shares

100

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of 91 Pe

mbroke Ro

ad,

blin 4, B

alls

brid

ge, Du

blin, D

O4 EC42

, Irel

and

CurrencyFair (

Canada

) Lim

ted

Ire

land

€

1.00 Ordinar

100

CurrencyFair Nom

inees Lim

ted

Ireland

€

1.00 Ordinar

100

40. R

elated undert

akings of

the Group

continued

Subsidary undertakings

continued

427

Standard Chartered

– An

nual Re

por

t 2021

Financal statements

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The follo

wing companies

e the address of

32 Molesworth

reet

, Dub

lin 2, D

Y512

, Irel

and

Inishbrophy

Leasing Limted

Irelan

€

1.00 Ordinar

y shares

100

Inishcan

non L

easing Lim

ted

Irelan

00 Ordinar

y shares

100

Ini

shcre

an Lea

sing Li

mted

Irelan

00 Ordinar

y shares

100

Ini

shda

wson Le

asin

g Limt

Ireland

€

1.00 Ordinar

y shares

Inisherkn Leasing

Limted

Ireland

00 Ordinar

y shares

100

Ini

shoo Le

asin

g Limte

Ireland

00 Ordinar

y shares

100

Nightar Limted

Ireland

$1.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 1 Limt

Irelan

€

1.00 Ordinar

y shares

Pemb

roke Air

craf

t Leasi

ng 2 Limt

Ireland

€

1.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 3 Limt

Ireland

.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 4 Limt

Ireland

.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 5 Limt

Ireland

$1.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 6 Limt

Ire

land

$1.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 7 Limt

Irelan

00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 8 Limt

Ireland

1.00 Ordinar

y shares

Pemb

roke Air

craf

t Leasi

ng 9 Limt

Ire

land

$1.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 10 Lim

ted

Irel

and

1.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 11 Limt

Ireland

$1.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 12 Lim

ted

Ireland

$1.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 13 Limt

Ireland

$1.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 14 Lim

ted

Irelan

.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 15 Lim

ted

Irelan

.00 Ordinar

y shares

100

Pemb

roke Air

craf

t Leasi

ng 16 Lim

ted

Ireland

0 Ordinar

y shares

100

Pembrok

e Aircraft

Leasing Holdings

Limted

Ireland

1.00 Ordinar

y shares

100

Pembroke Capital Limted

Ireland

€1.

25 Ordinar

y shares

100

$1.00 Ordinar

y shares

100

Skua Lim

ted

Ireland

$1.00 Ordinar

y shares

100

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of TMF

, 3

rd Flo

Kil

more H

ouse

, Park Lane

, Spen

cer Do

ck , Dub

lin 1, I

relan

Zodi

a Custo

dy (Ir

eland

) Limte

Irel

and

1.00 Ordinar

y shares

100

Zodi

a Marke

ts (Ir

eland

) Limte

Ireland

$1.00 Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 9

1 Pembro

ke Road,

blin 4, B

alls

brid

ge, Du

blin, D

O4 EC42

, Irel

and

CurrencyFair Limted

Ireland

€0.

01 A

rdinar

€0

.001 Ordin

ary share

The follo

wing company

has the address of

First Names

use,

Vict

ora Ro

ad, Do

uglas

, IM2 4D

, Isle o

f Man

Pembrok

e Group Limted

le of Man

$0.01 Ordinar

y shares

The f

ollow

ing co

mpani

es have t

he ad

dres

s of 1st F

loor, Go

ldie

Hou

se, 1-

4 Gol

die T

err

ace, Upp

er Chu

rch St

reet

, Dou

glas

, IM1 1EB

le of Man

Standard

Chartered Assurance Lim

ted

le of Man

1.00 Ordinar

y shares

100

$1.00 R

edeemable Preference

100

Standard

Chartered Insurance

Limted

le of Man

1.00 Ordinar

y shares

40. R

elated undert

akings of

the Group

continued

Subsidary undertakings

continued

428

Standard Cha

rtered

– Ann

ual Re

por

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The f

ollow

ing co

mpany ha

s the a

ddres

s of 21/F

, San

no Park

ower, 2

11-1 Nagat

acho, C

hiyod

a-ku, T

yo, 100

-6155, J

apan

Standard Char

tered Securite

s (

Japan

) Limted

Japan

,00

0 Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 15 C

astl

e Str

eet

St He

lier, JE4 8PT

, Jer

sey

SCB N

omine

es (

I) Limte

rsey

$1.00 Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of IFC 5

, St He

lier, JE1 1S

Jer

sey

Standard

Chartered Funding

(Jersey

)

Limted⁶

rsey

£1.00 Ordinar

y shares

The follo

wing companies

e the address of

StandardChartered@

Chiromo, Number

8, W

estlands

Road,

. O

. B

ox 300

03 – 001

00, Nair

ob, Kenya

Standard Char

tered Bancassu

rance Intermediar

y Limted

Ken

KES100.00 Or

dinary shares

100

Standard

Chartered Inves

ment

Ser

vices Lim

ted

Keny

ES20

.00 Ordin

ary share

100

Sta

ndar

d Char

tere

d Bank Kenya Li

mted

nya

S5.00 Ordinar

y shares

KES5.00 Preference

Sta

ndar

d Char

tere

d Secu

rit

es (Kenya

) Lim

ted

nya

KES10.00 Or

dinary shares

100

Standard

Chartered Financ

al Ser

vices

Limted

nya

0.00 Ordinar

y shares

100

Standard

Chartered Ken

ya Nominees Li

mted

Ken

KES20.00 Ordinar

y shares

100

The follo

wing company

has the address of

Jongno,

Jongno-gu,

Seoul, 110-

02, Republ

ic of

Korea

Standard

Chartered Bank K

orea Limted

Korea, R

epublic of

KRW5,000.00 Ordinar

y shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of 2F

, 47 Jon

gno,

Jongno-gu,

Seoul, 110-

02, Republ

ic of

Korea

Standard

Chartered Securites K

orea Co. Ltd

ore

Republic of

KRW5,000.00 Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of Atr

ium B

uildn

Maa

rad St

reet

, 3rd F

loor, P

O.B

ox: 11-

4081 R

iad El S

olh, B

eiru

Bei

rut C

ent

ral Dis

trct

, Leba

non

Standard

Chartered Metropolitan Hold

ings SAL

Leban

$10.00 Or

dinary A shares

100

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of Level 26

, Equat

orial

Plaza

, Jala

n Sulta

n Isma

il, 5025

0 Kuala Lum

pur, Malay

sia

Car

tab

an (Mala

) No

mine

es Sdn B

erh

Malaysia

RM Ordinar

y shares

100

Cartaban Nominees

(Asing)

Bhd

Malaysia

RM Ordin

ary share

Cartaban Nominees

(

empatan

) Sdn Bhd

Malaysia

RM Ordinar

y shares

100

lden M

aest

ro Sdn B

Malay

sia

RM Ordinar

y shares

100

Pri

ce Sol

utio

ns Sdn B

Malaysia

RM Ordinar

y shares

100

SCBMB T

rustee Berhad

Malaysia

RM Ordinar

y shares

100

Standard

Chartered Bank Malaysia

erhad

Malaysia

RM Irredeemable Convertible

Preference sha

res

100

RM Ordinar

y shares

Standard

Chartered Saadiq Berhad

Malaysia

RM Ordinar

y shares

100

The follo

wing companies

e the address of

TMF T

rust L

abuan

Lim

ted, B

rum

by Cent

re, Lot 42

, Jalan M

uhib

bah, 8700

0 Labua

., Malaysia

Marina Morga

nite Sh

ippng

Limted

Malaysia

$ Ordin

ary share

100

Marina Moss Sh

ippng

Limted

Malaysia

$ Ordin

ary share

100

Marina T

anzanite

Shippng Lim

ted

Malaysia

$ Ordin

ary share

100

Pemb

roke Lea

sing (Lab

uan

) 3 B

erh

Malaysia

$ Ordinar

y shares

100

40. R

elated undert

akings of

the Group

continued

Subsidary undertakings

continued

429

Standard Cha

rtered

– Ann

ual Re

por

t 2021

Financal statements

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The f

ollow

ing co

mpany ha

s the a

ddres

s of Su

ite 18

1, Leve

l 18,

tical C

orp

orat

e T

ower B, Avenue 1

0, The V

rti

cal, Ba

ngsa

uth Cit

y, No. 8, J

alan Keri

nch, 5920

0 K

ual

a Lumpu

, Wil

ayah

Persekutuan, Malaysia

Resolution

Alliance Sdn

Bhd

Malaysia

RM Ordinar

y shares

RM Irredeemable Pr

eference

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of Level 1

, Wism

Standard Char

tered, Jalan T

knologi 8, T

aman T

nologi

Malaysia, 57

0 Bukit

il, K

uala Lumpur

, Wilayah

Persekut

uan,

Malaysia

Standard

Chartered Global Business Services Sdn Bhd

Malaysia

RM Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 10

th Flo

Men

ara Ha

p Seng

, No. 1&3

, Jala

n P

. Ram

lee, 5

0250 Kuala

Lumpur

, Malaysia

Assembl

Payment

s Malaysia Sdn.

hd.

Malaysia

RM Ordinar

y shares

100

The follo

wing companies

e the address of

rust Company

Complex

, Ajeltake R

ad, Ajeltake Island, Majuro, MH96

960,

Mars

hall Islands

Marina Alysse Shi

ppng Lim

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Amand

ier Shi

ppng Lim

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Ambro

isee Shipp

ng Limted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Angeli

ca Shippng

Limted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina A

venturine Shi

ppng Lim

ted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Buxus Sh

ippng Lim

ted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Citr

ne Shippng

Limted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Dah

lia Shippng Limted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Ditta

Shippng Lim

ted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Dorado

Shippng

Limted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Lila

c Shippng Limted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina L

olite Shipp

ng Lim

ted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Obsid

an Shipp

ng Lim

ted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina P

rotea Ship

png

Limted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Quartz Shippng

Limted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina R

emora Shipp

ng Lim

ted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina T

urquoise Shipp

ng Limted

Mars

hall Islands

1.00 Ordinar

y shares

100

Marina Zircon Ship

png Limted

Mars

hall Islands

1.00 Ordinar

y shares

100

The follo

wing company

has the address of

, Standard

Cha

rter

ed T

ower, 19

, Bank S

tree

t, Cybe

rcit

, Eb

ene, 7

2201

Maur

itus

Standard

Chartered Bank (Maurit

) Limted

Mau

ritus

$ Ordinar

y shares

100

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of c/

o Ocor

ian

rpor

ate Se

vice

s (Mau

ritu

) Ltd, 6

th Fl

oor, T

owe

r A, 1 Cyb

ercit

Ebene, 72

201, Mauritus

Standard

Chartered Financ

al Holdings

uritus

$1.00 Ordin

ary share

100

Sta

ndar

d Char

tere

d Priva

te Equit

y (Ma

uri

tus

) Li

mted

auritu

.00 Ordinar

y shares

100

Sta

ndar

d Char

tere

d Priva

te Equit

y (Ma

uri

tus

) II L

imte

uritus

$1.00 Ordin

ary share

100

Sta

ndar

d Char

tere

d Priva

te Equit

y (Ma

uri

tus

) lll L

imte

auritus

0 Ordinar

y shares

100

40. R

elated undert

akings of

the Group

continued

Subsidary undertakings

continued

430

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The follo

wing company

has the address of

Mondial

Man

agem

ent S

vice

s Ltd, U

nit 2L, 2

nd Flo

or Sta

ndard

Cha

rter

ed T

ower, 19 C

berci

ty, Eben

e, Mau

ritu

Subcontinental

Equites

Limted

uritus

$1.00 Ordin

ary share

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of SG

G Cor

pora

vice

s (Maur

itus

) L

td, 33

, Edith C

avell S

tre

et, Po

rt Loui

s, 11324,

Maur

itus

Acti

s T

eit Ho

lding

s (Mau

ritu

) Limt

Maur

itus

Cla

ss A $1

.00 Ord

inar

y sh

ares

2.001

Cla

ss B $1

.00 Ord

inar

y sh

ares

2.001

The follo

wing company

has the address of

Standard Chartered

Ban

k Nep

al Limt

ed, Ma

dan Bh

andar

i Marg

, W

ard N

o.3

thmandu

Metropolita

n City

, K

athmandu Distrc

Bagmati

Zone,

Kathmandu

, Nepal

Standard

Chartered Bank Nepal L

imted

Nep

NPR100

.00 Ordinary shares

70.

The f

ollow

ing co

mpany ha

s the a

ddres

s of Ho

ogo

orddr

eef 15

1101

BA, Amsterdam, Netherla

nds

Pembrok

e Holland B.

Netherlands

€450.

00 Ordinar

y shares

100

The follo

wing companies

e the address of

1 Basinghall

venue, London, E

C2V 5DD

, United Kingdom

Standard

Chartered Holdings (

Africa

) B.

Netherlands

€4.50 Ordi

nar

y shares

100

Standard

Chartered Holdings (

Asia Paci

c

) B.

Netherlands

€4.50 Ordi

nar

y shares

100

Standard

Chartered Holdings (

International) B.

Netherlands

€4.50 Ordi

nar

y shares

100

Standard

Chartered MB Holdings

Netherlands

€4.50 Ordi

nar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 4 All g

ood Pl

ace,

Rototuna

North, Hamilton,

New Zeala

nd, 3210

PromiseP

ay Lim

New Z

ala

NZD Ordinar

y shares

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of 142, A

hmad

u Bell

, Victora

Island, Lagos, 1012

41,

Nigera

Cherroots Nigera Limted

Nigera

NGN1.00

Ordinar

y Shar

100

Standard

Chartered Bank Nigera

Limted

Nigera

NGN1.00 Irredeemable Non

Cumulative Preferenc

e shares

100

NGN1.00 Ord

inar

y shares

100

NGN1.00 R

edeemable Preference

100

Sta

ndar

d Char

tere

d Capit

al & Adv

isor

y N

iger

a Limte

Nigera

NGN1.00

inary shares

100

Standard

Chartered Nominees (N

igera

) Lim

ted

Nigera

NGN1.

Ordinar

y shar

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 3/F Main SCB B

uild

ng,

I.I Chundr

igar R

ad, K

ara

chi, Sindh, 7

000, Pakistan

Pri

ce Sol

utio

n Pakis

tan (Pri

vate

) Li

mted

Pakist

PKR10

.00 Ordinary shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of P

O. Box No. 555

6I.

Chundrig

Road, Karachi, 7

000, P

akistan

Standard Char

tered Bank (Pakistan

) Limted

Pakistan

PKR

10.00 Ordi

nar

The follo

wing company

has the address of

Rondo Ignac

ego

yńsk

iego 2

B, 00

-8

43, W

rsa

, Pol

and

Standard

Chartered Global Business Services spółka z

ograniczoną odpowied

zal

nością

Poland

PLN50.00 Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of Vis

tra Co

rpo

rate

vice

s Cent

re, Gr

ound F

loor, NPF Bui

ldng

, Bea

ch Road, A

pia,

Samoa

Standard

Chartered Nominees (W

estern Samoa

) Li

mted

amoa

$1.00 Ordinar

y share

100

40. R

elated undert

akings of

the Group

continued

Subsidary undertakings

continued

431

Standard Chartered

– Ann

ual Rep

t 2021

Financal statements

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The f

ollow

ing co

mpany ha

s the a

ddres

s of Al Fa

isal

ah Ofﬁ

ower Flo

or No 7 (

), Kin

g Fahad H

ighway, Olaya D

istr

ct,

Riya

dh P

O b

ox 29552

2, Ri

yadh, 113

51, Sa

udi Ar

abia

Standard Char

tered Capital (Saudi Arabia

)

Saudi Arabia

SAR10

.00 Ordina

y shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of 9 & 11, L

ight

foot

Boston Street, Freeto

Sierra Leone

Sta

ndar

d Char

tere

d Bank Si

erra Le

one L

imte

Sie

rra Le

one

SLL1.00 Ordinar

y shares

80.

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of 9 Rafﬂ

es Plac

#27

00 Repu

blic Pl

aza, 04

8619

, Sin

gapo

Acti

s T

eit Ho

lding

s No.1 (

ingap

ore

) Pr

ivate L

imte

d¹

Sin

gapore

GD Ordinar

100

Acti

s T

eit Ho

lding

s No.

2 (

ingap

ore

) Pr

ivate L

imte

d¹

Singapore

D Ordinar

100

The follo

wing companies

e the address of

8 Marina

ulevard

, Mari

na Ba

y Financ

al Cent

re T

ower 1, Leve

l 25

-01,

018981, Singapore

Standard

Chartered Private E

quit

(

Singapore

) Pte. Ltd

Singapore

$ Ordinar

y shares

100

Standard

Chartered Real Estate

Investment

Holdings

(Singa

pore

) Pr

ivat

e Limte

Singapore

$ Ordinar

y shares

100

The follo

wing companies

e the address of

8 Marina

ulevard

, Level 26, M

arin

a Bay Fin

ancal C

ent

re, T

ower 1, 01

8981,

Singapore

Marina A

quata Shippng

Pte. Ltd.

Singapo

$ Ordinar

y shares

Marina Aruana Sh

ippng Pte

. Ltd.

Singapore

SGD Ordinar

y shares

100

Marina Cobia

Shippng P

te. Ltd.

Singapore

SGD Ordin

ary share

100

Marina Fa

marin

 Shippng

Pte. Ltd.

Singapore

$ Ordinar

y shares

100

Marina F

rabandari Shipp

ng P

te. Ltd.

Singapore

$ Ordinar

y shares

100

Marina Gerbera Shi

ppng

Pte. Ltd.

Singapore

$ Ordinar

y shares

Marina Opah

Shippng Pte

. Ltd.

Singapore

SGD Ordinar

y shares

100

$ Ordinar

y shares

100

Marina P

arta

ati Shippng

Pte. Ltd.

Singapo

$ Ordinar

y shares

Rafﬂes

Nominees (Pte.

)

Limted

Sing

apore

D Ordinar

y shares

The follo

wing companies

e the address of

8 Marina

ulevard

, #27

-0

1 Mari

na Ba

y Financa

l Cent

re T

ower 1, 01

8981,

Singapore

TS Cap

ital Pt

e. Ltd

Singapore

GD Ordinar

y shares

TS Man

agem

ent Pte

. Ltd.

Singapore

SGD Ordin

ary share

100

Standard

Chartered Bank (

Singapore

) L

imted

Sing

apore

D Ordinar

y shares

100

SGD Non-cumulative

Preference

100

SGD Non-cumulativ

e Class C

Preference shar

100

$ Ordinar

y shares

100

$ Preference

100

Standard

Chartered T

rust (

Singapore

)

Limted

Singapore

D Ordinar

100

Standard

Chartered Holdings (

Singapore

)

Private Lim

ted

Singapore

D Ordinar

y shares

100

$ Ordinar

y shares

100

Standard

Chartered Nominees (

Singapore

)

Pte L

Singapore

D Ordinar

y shares

40. R

elated undert

akings of

the Group

continued

Subsidary undertakings

continued

432

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of 80 Rob

inso

n Road,

#02

00, 06

8898

, Sing

apor

Autumn Life

Pte. Ltd.

Sing

apore

$ Ordin

ary share

Car

dspa

l Pte. Lt

Sing

apore

$ Ordin

ary share

Nexc

o Pte. Ltd.

Singapore

$ Ordinar

y shares

100

Dis

cover

y T

ech

nolo

gy Se

vice

s Pte. Lt

Singapore

$ Ordinar

y shares

100

V Resea

rch and D

evelop

ment Pt

e. Ltd.

Singapore

$ Ordinar

y shares

Pow

er2SME Pte

. Ltd.

Singapore

$ Ordinar

y shares

100

SCV Master Hol

ding Compan

y Pte.

Ltd.

Singapore

$ Ordinar

y shares

100

Pegasus

Dealmaking P

te. Ltd.

Singapore

$ Ordinar

y shares

Solv-Indi

a Pte

. Ltd.

Singapore

$ Ordinar

y shares

100

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of 140 Ro

binso

Road

, #17

01, Crow

n At Robin

son, 0

68907

, S

inga

pore

st Bank S

inga

pore L

imted

Singapore

SGD Ordin

ary share

CurrencyFair (

Singapore

) Pte.Ltd

Singapore

D Ordinar

y shares

The f

ollow

ing co

mpani

es have t

he ad

dres

s of 38 B

each Ro

ad,

#29-

11 S

out

h Bea

ch T

ower

, 1

897

, Sin

gapo

sem

bly Pay

men

ts SG

P Pte. Lt

Singapore

SGD Ordin

ary share

100

Assembl

Payment

s Pte

. Ltd.

Singapore

$ Ordinar

y shares

$ Preference

100

The follo

wing company

has the address of

Abogado Pte Ltd,

No.

8 Mar

ina B

ouleva

rd, #05

-02 MB

FC T

ower 1, 01

8981, S

ingap

ore

Standard

Chartered IL&FS

Management (

Singapore

) P

te. Limted

Sing

apore

$ Ordin

ary

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of 2nd F

loor, 115 W

Street, Sandton, Joha

nnesburg, 21

96,

South Africa

CMB N

omine

es (RF

) PT

Y Limt

South Africa

AR1.00 Ordinar

y shares

100

Standard

Chartered Nominees South Africa

Proprietar

y Li

mted

(RF

)

South Africa

ZAR Ordin

ary share

The f

ollow

ing co

mpany ha

s the a

ddres

s of 6 For

t Str

eet

PO 785

8, B

irna

m, San

dton

, 2196 214

6, S

outh A

ica

Prom

isep

ay (PT

) Ltd

outh

rica

AR1.00 Ordinar

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 1F

, No

7 & 3F-

17F-19F

, No.

179

, Lia

onng S

tre

et, Zh

ong

shan Di

st.

, T

ipe, 1

04,

aiwan

Standard Char

tered Bank (T

aiwan

) Limted

wan

TWD10.00 Ordinar

y shares

100

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of 1 Flo

International

House, Shaaban R

ober

treet/

Garden A

venue,

PO B

ox 9011, D

ar Es S

alaam

, T

anzani

a, Unit

ed Repu

blic of

Standard Char

tered Bank T

anzania

imted

zania,

Unit

Republic

S1,000.00 Ordinar

y shares

100

S1,000.

00 Preference shares

100

Standard

Chartered T

anz

ania Nominees Li

mted

anzania, United

Republic

S1,000.00 Ordinar

y shares

100

The follo

wing company

has the address of

100 North Sathorn

Road, Silom, Bangrak Bangkok , 10500, Thailand

Standard

Chartered Bank (Thai

) Public Compan

y Limted

Thailand

THB10

.00 Ordina

y sha

res

The f

ollow

ing co

mpany ha

s the a

ddres

s of Bu

kdere C

ad. Y

api

Kre

di Pla

za C Blok

, Kat 15, Leve

nt, I

stan

bul, 3

433

0, T

rkey

Sta

ndar

d Char

tere

d Y

atirm B

ankas

i T

rk An

onim Si

rket

TRL0

.10

Ordinar

y sha

res

100

The follo

wing company

has the address of

Standard Chartered

Ban

k Bldg

, 5 Spe

ke Road, P

O Box 7111

, Kampal

a, Ugan

40. R

elated undert

akings of

the Group

continued

Subsidary undertakings

continued

433

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

Name and

gistered add

ess

Countr

y of

incorporation

Descript

on of shares

Proportion

of s

har

held

(%)

Standard

Chartered Bank Uganda

Limted

Uganda

UGS1,000.

00 Ordinary shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 251 L

ittl

e Falls D

rive

Wilm

ngton

DE 19

8, U

nited States

Curren

cyFair (USA

) Inc.

United

States

US$1.00 Uncertifcated

The f

ollow

ing co

mpany ha

s the a

ddres

s of 50

5 Howard S

t. #201

San F

rancisco, CA 9

105, United Sta

tes

SC St

udio

s, LLC

United States

embership Interest

100

The follo

wing company

has the address of

Standard Chartered

Ban

k, 37F

, 1

095 Avenue o

f the Am

eri

cas, N

ew Y

ork 10

036

, Unite

States

Standard

Chartered Bank Internationa

l (

Americas

) Lim

ted

United States

,000.

00 Ordinar

y shares

100

The follo

wing companies

e the address of

Cor

poratio

n T

ust

ntre, 1

209 Oran

ge Str

eet

, Wilmn

gton D

E 19801

, Unite

d Stat

Standard

Chartered Holdings Inc.

United States

$10

.00 Common shares

100

Standard

Chartered Securites (No

rth America

)

United States

Member

ship I

nterest

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 50 Fre

mont S

tree

San F

rancisco CA 9

105, United States

Standard

Chartered Overseas Investment,

Inc.

United States

$10

.00 Ordinary shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of C/O Corp

orat

ion

vice C

ompa

, 251 Li

ttle F

alls Dr

ive, Wi

lmngt

on DE 198

08,

United Sta

tes

Standard C

hartered T

rade Ser

vices Corporation

United

States

$0.01 Common shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 25 T

ylor S

t, S

, C

9410

2-39

Ass

embly Escrow Inc

United States

$0.0001 Ordinar

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 555 W

ash

ingto

n A

St Lou

is, M

O, United S

tat

es of Am

eric

a, 631

Assembl

Payment

s, Inc

United

States

$0.

001 Ordinar

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of Roo

m 1810

181

5, Level

18, Build

ng 72, Keangna

m Hanoi Land

mark T

er,

Pham Hung

Road

, Cau G

iay Ne

w Urba

n Area

, Me T

ri W

rd, Nam T

u Li

Distrct, Hano

i1000

, Vietnam

Standard

Chartered Bank (Vietnam

) L

imted

Vietna

VND Charter Capi

tal shares

The follo

wing companies

e the address of

Vistra Corporate

vice

s Cent

re, Wick

ham

s Cay II

, Road T

own

, T

orto

la, VG1110,

Virg

n Islan

ds, B

rit

sh

y Favo

ur Inves

tmen

ts Li

mted

Virg

n Islan

ds, B

rit

sh

$1.00 Ordinar

y shares

Sky Harmony Holdi

ngs Limted

Virg

n Islan

ds, B

rit

sh

$1.00 Ordinar

y shares

The follo

wing companies

e the address of

Stand No. 4642,

rner o

f Mwaimwe

na Road a

nd Addis A

bab

a Dri, Lu

saka,

Zambia, 10101, Zambia

Standard Char

tered Bank Zambia Plc

Zamb

ZMW0

25 Ordinar

y shares

Standard

Chartered Zambia

Securites Ser

vices

Nominees Lim

ted

Zamb

ZMW1.00 Ordinar

y shares

100

The follo

wing companies

e the address of

rica

Unit

uare B

uildn

g, 68 N

elso

n Mand

ela Avenue

, Harar

e, Zimb

abwe

Africa Enterprise Network T

rust

Zimb

abwe

Interest in T

rust

100

Standard Char

tered Bank Zimbabwe Limted

Zimb

abwe

.00 Ordinar

y shares

100

Standard

Chartered Nominees Zimbab

we (P

rivate

)

Limted

Zimb

abwe

0 Ordinar

y shares

e Gro

up ha

s det

erm

ine

d tha

t the

se un

der

tak

ing

s are exc

lud

ed fr

om be

ing co

nso

lid

ate

d into t

he G

roup

s acc

oun

, and do n

ot me

et t

he deﬁ

nti

on of a

bsid

ar

y un

der I

FRS. S

ee n

ote

s 31 and 32 f

or th

e con

sol

idat

on p

olic

y an

d disc

los

ure o

f the u

nder

tak

ing

No s

har

e capi

tal by v

irt

ue of b

ein

g a tr

ust

Limted liablity comp

The G

roup h

as de

ter

min

ed th

e pri

ncp

al pl

ace of o

per

ati

on to b

e Sing

apo

e Gro

up ha

s det

erm

ine

d the p

rin

cpal p

lac

e of op

era

tion t

o be Ir

ela

The G

rou

p has d

ete

rmi

ned t

he pr

inc

pal p

lace o

f ope

rat

ion to b

e Uni

ted K

ing

dom

he G

roup h

as de

ter

min

ed th

e pri

ncp

al pl

ace of o

per

ati

on to b

e Hon

g Kong

434

Standard Chartered

– Annu

al Rep

ort 202

Financal state

ments

Notes to the

ﬁnancal

statement

40. R

elated undert

akings of

the Group

continued

Joint v

enture

Name

Countr

y of

Incorporation

Descripton of shar

Proportion

of shares

hel

d (%

)

The f

ollow

ing co

mpany ha

s the a

ddres

s of T

ric

or WP Co

rpo

rate

vice

s Pte Ltd

, 80 Robin

son Roa

d #02

00, 06

8898

, Singa

pore

ea Gl

obal Pt

e. Ltd.

Singapore

$ Ordinar

y shares

$ Preference

100

Associates

Name

Countr

y of

Incorporation

Descripton of shar

Proportion of

shares held

(%)

The f

ollow

ing co

mpany ha

s the a

ddres

s of W

.Lif

e ,

33 Fo

ley Str

eet , Lo

ndon

, W1W 7

, Unite

d Kin

gdom

Fintech for

Inter

national Dev

elopment Ltd

United Kingdom

$0.0001 Ordinar

y-A

The f

ollow

ing co

mpany ha

s the a

ddres

s of 3 Mo

re Lond

Riversde,London,

England, SE1 2A

Q, United Ki

ngdom

rade

Information Net

work

Limted

United Kingdom

.00 Ordinar

y shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of Bo

hai Ba

nk Buil

dng,

No.

218 H

ai He Do

ng Lu, Hed

ong Di

str

ct, T

iani

n, Chin

a, 30

0012

China

Chin

a Boh

ai Bank C

o., Ltd

China

CNY

rdinar

y shares

.263

The f

ollow

ing co

mpany ha

s the a

ddres

s of 17

, 1

00, Go

ngpyeo

ng-

dong, Jongno-gu,

oul,

Korea, Re

public of

cent

a IV

orea, Republic of

KRW1.00

Partnership Interest

The f

ollow

ing co

mpany ha

s the a

ddres

s of 1 Raf

ﬂes Qu

, #

23-

01,

e Rafﬂe

s Qua

, 04

858

3, Sin

gapo

Cliffor

d Capital Holdings Pte. Ltd.

Singapore

00 Ordinar

y shares

9.9

The f

ollow

ing co

mpany ha

s the a

ddres

s of 10 M

arin

a Boul

evard

8-0

8, Mar

ina B

, Fin

ancal C

entr

e, 01898

3, Sin

gapo

erifed Impact Excha

nge Holdings Pte

. Ltd

Singapore

$ Ordinar

y shares

$ Redeemable

Convertible

Preference shar

.57

The follo

wing company

has the address of

Victora House

, State

Hou

se Avenue

, Victor

a, MA

HE, Se

ychell

Seychel

les International Mer

cantile

Banking Corporation Lim

ted.

Sey

chelles

SCR1,00

.00 Ordin

ary share

The f

ollow

ing co

mpany ha

s the a

ddres

s of Avenue d

e T

ivol 2, 1

007

Lausanne, Swit

zerland

Metaco SA

Switzerlan

HF 0.01 Prefe

renc

e A Share

435

Standard Chartered

– Annu

al Rep

ort 202

Financal statements

40. R

elated undert

akings of

the Group

continued

Signﬁcant

investment holdings a

nd other related undertakings

Name

Countr

y of

Incorporation

Descripton of shar

Proportion of

shares held

(%)

The follo

wing company

has the address of

1 Bartholomew La

ne,

London, E

C2N 2

AX, United Kingdom

rras

i Covere

d Bon

ds (LM) Lim

ted

United Kingdom

1.00 Ordinar

The follo

wing company

has the address of

Intertr

ust

Corp

orate

vice

s (

Cay

man

) Lim

ted, 19

0 Elgin Avenu

e, Ge

orge T

Grand Ca

yman, KY1-9005, Ca

yman Islands

TSC Ca

yma

n Hold

co Limt

yman Islands

$0.01 Ordinar

A shares

5.272

$0.01

rdinar

y-B

ares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 3, F

loor 1

, No.1, Shin

uxingcayuan, W

est Er

Huan Rd,

Xi Shan Distrc

t, Kun

ming,

nan Prov

ince, PRC

, Chi

unnan Golden Shiner P

roper

ty Development Co.

, Ltd.

China

CNY1

00 Ordinar

y shares

The f

ollow

ing co

mpani

es hav

e the ad

dres

s of Unit 6

05-

08, 6/F

Wing O

n Cen

tre, 111 C

onna

ught Ro

ad, Ce

ntra

l, She

ung W

Hong K

ong

Acti

s Carr

ock Ho

ldin

gs (HK) L

imte

Hong K

ong

$ C

las

s A Ordin

y shar

$ Cla

ss B Or

dinar

y s

hares

Acti

s T

mple S

tay H

oldin

gs (HK) L

imte

Hong Kong

$ Cla

ss A Or

dinar

y s

hare

$ Cla

ss B Or

dinar

y s

hares

Acti

s Jack H

oldin

gs (HK) L

imte

Hong Kong

$ Cl

ass A O

rdina

y share

$ Cla

ss B Or

dinar

y s

hares

Acti

s Riven

dell Ho

ldin

gs (HK) L

imte

Hong K

ong

$ C

las

s A Ordin

y shar

$ Cla

ss B Or

dinar

y s

hares

Acti

s Y

oung Ci

ty H

oldi

ngs (HK

) Limte

Hong K

ong

$ Cl

ass A O

rdinar

y sha

res

$ Cla

ss B Or

dinar

y s

hares

The f

ollow

ing co

mpany ha

s the a

ddres

s of 12

21 A

, Dev

ika T

ower

12th F

loor, 6 Neh

ru Pla

ce, New D

elhi 110

019

, New D

elhi, 1

10019

, I

ndia

Mikad

o Realt

ors Pr

ivat

e Limte

India

INR10.

inar

y shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of 4t

h Floo

, 2

4, Chit

ala

Hou

se, Dr. Ca

wasj H

orm

usj Ro

ad, Dh

obi T

ala

o, Mumb

ai Cit

Mah

aras

htra, I

ndia 4

00 002

, Mumb

ai, 40

0 002, I

ndia

Indust

rial Minerals and Chemical Co. P

vt. Ltd

dia

INR100

.00 Ordinary shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of 17F

, 1

00, Go

ngpyeo

ng-

dong, Jongno-gu,

oul,

Korea, Re

public of

Korea

Ascenta III

Kor

KRW Class B Eq

uit

y Int

erest

The f

ollow

ing co

mpany ha

s the a

ddres

s of 3 Jal

an Pisa

ng,

o W

iga T

st Ltd

, 199070 Singa

pore

SCIAIGF Liqudating T

rust

Singapore

Interest in trust

The f

ollow

ing co

mpany ha

s the a

ddres

s of 49

, Sun

gei Kadu

Avenue, #

03-01 S

729673, S

ingap

ore

Omn

i Cent

re Pte. L

td.

Singap

ore

SGD Redeemable Convertible

Preference shar

The f

ollow

ing co

mpany ha

s the a

ddres

s of 251 L

ittl

e Falls D

rive

Wilm

ngton

, New Ca

stl

e DE 1980

8, Uni

ted St

ates

Pax

ata, Inc.

United States

US$0

.000

1 Series

C2 Pre

ferred

Stock

US$0

.0001

Series C

2 P

referred

Stock

0.1

436

Standard Chartered

– Ann

ual Rep

t 2021

Financal state

ments

Notes to the

ﬁnancal

statement

40. R

elated undert

akings of

the Group

continued

In liqudation

Subsidary Undertakings

Name

Countr

y of

Incorporation

Descripton of shar

Proportion of

shares held

(%)

The follo

wing companies

e the address of

O T

eneo

Restructuring L

imted

reat

Charles Street Queensway

Birmngha

m W

est Midlands

B3 3HN

Compass Estates Lim

ted

United Kingdom

£1.00 Ordinar

y shares

100

Standard

Chartered Masterbrand Lice

nsng L

imted

United Kingdom

$1.00 Ordinary Shares

100

The follo

wing companies

e the address of

Bucktrout House,

ateg

ny Espl

anad

e, St Pet

er Port

, GY1 3H

Q, G

uern

sey

Birdsong Li

mted

uern

sey

£1

.00 Ordinar

y shares

100

Nominees One

Limted

uern

sey

£1

.00 Ordinar

y shares

100

Nominees T

wo Lim

ted

uer

nsey

1.00 Ordinar

y shares

100

Songbird Limte

ern

sey

£1.00 Ordin

ary share

Standard

Chartered Secretaries (

Guernsey

) Li

mted

uer

nsey

1.00 Ordinar

y shares

100

Standard

Chartered T

rust (

Guernsey

)

Limted

uern

sey

£1

00 Ordinar

y shares

100

The follo

wing company

has the address of

Floor,

Gloucester

ower , Th

e Landma

, 15 Que

en’s Road Ce

ntral

, Hong Kon

Leo

pard Ho

ng Kong L

imted

Hong Kong

$ Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 32 Mo

lesw

ort

h Stre

et,

blin 2

, D02Y512, Ir

elan

Ini

shly

nch Lea

sing L

imte

Irelan

€

1.00 Ordinar

y shares

The follo

wing company

has the address of

Menara Standard

Cha

rter

ed, 3r

d Floo

, Jl

. Prof.Dr. Satr

io no. 16

4, S

etiab

ud, Ja

rkart

Selatan, Indones

PT So

lusi C

akra I

ndon

esia (

alam lik

udas

)

Indonesia

IDR

23,809

,600.

00 Ordinary shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of No. 1

57 – 157 A

, Ja

karta

Barat, 11

130, Indonesia

Price Solutions Indonesia

(

dalam

likudasi

)

Indonesia

$100.

inar

y shares

The follo

wing company

has the address of

Standard Chartered@

Chir

omo, Nu

mbe

r 48

, W

est

land

s Road, P

. O. Box 30

003 – 001

00,

Nai

rob, Kenya

Standard

Chartered Management Services Limted

Kenya

KES20

.00 Ordinar

y shares

The f

ollow

ing co

mpany ha

s the a

ddres

s of 30 Ru

e Schr

obilg

en,

2526, Lux

embo

urg

Sta

ndar

d Char

tere

d Financa

l Ser

ices (Luxe

mbo

urg) S.

Luxembourg

€25

0 Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of Level 26

, Equat

ori

Plaza

, Jala

n Sulta

n Isma

il, 5025

0 Kuala Lum

pur, Malay

sia

Popu

lar Am

bienc

e Sdn Bh

Malaysia

RM Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of C/

o IQ EQ C

orp

orate

vice

s (Maur

itus

) L

td, 33 Ed

ith Ca

vell St

reet

, Por

t Louis

, 11324,

Maur

itus

t

Mau

ritus

US$1.00 Ordin

ary share

The f

ollow

ing co

mpany ha

s the a

ddres

s of Jir

on Hua

scar 2055

Jes

us Mar

ia, Li

ma 15072

, Peru

Banco Standard

Chartered en Liqudac

ion

Per

$75.1

33 Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of 8 Ma

rina B

ouleva

rd,

Level 2

, Mar

ina B

ay Finan

cal Ce

ntre, T

owe

r 1, 01898

1, Sin

gapo

Standard

Chartered (2000

) Lim

ted

Singapore

D1.00 Ordinar

y shares

100

The f

ollow

ing co

mpany ha

s the a

ddres

s of Luis A

lber

to de H

erre

1248

, T

orre I

I, Piso 1

1, Es

c. 1111

, Uru

guay

Standard

Chartered Uruguay Representac

ion S.

Uruguay

YU1.00 Ordinar

y shares

100

1 Th

e Gro

up ha

s det

erm

ine

d the p

rin

cpa

l pla

ce of o

per

atio

n to be S

ing

apo

437

Standard

Chartered

– Ann

ual Rep

t 2021

Financal statements

40. R

elated undert

akings of

the Group

continued

Signﬁcant

investment holdings a

nd other related undertakings

Name

Countr

y of

Incorporation

Descripton of shar

Proportion of

shares held

(%)

The f

ollow

ing co

mpany ha

s the a

ddres

s of Lot 6

.05, Level 6

, KPMG

ower, 8 F

rst Avenu

e, Ban

dar Uta

ma, 47800 Pe

talin

g Jaya,

Selangor

, Malaysia

House Network SDN BH

alaysia

RM1.00 Ordinar

y shares

Liqudated/

dis

solv

sold

Subsidary Undertakings

Name

Countr

y of

Incorporation

Descripton of shar

Proportion of

shares held

(%)

SC Lea

sec

o Limte

United Kingdom

0 Ordinar

y shares

100

Standard

Chartered APR Li

mted

United Kingdom

$1.00 Ordinar

y shares

100

Standard

Chartered Financ

e (Brunei

) Bhd

Brunei Dar

ussalam

BND1.00

Ordinar

y shar

100

Standard

Chartered Princpa

l F

inance (

Cayman

) Lim

ted¹

Cay

man Islands

$0.0001 Ordinar

y shares

Sunﬂo

wer

Cayman SPC

Cayman Isl

ands

$1.00 Management shares

Marina Amaryllis Shipp

ng Limted

Hong K

ong

$ Ordinar

y shares

100

Marina Ametrine

Shippng Lim

ted

Hong K

ong

$ Ordinar

y shares

Marina Apollo

Shippng Li

mted

Hong K

ong

$ Ordinar

y shares

100

Marina Carnelia

n Shippng

Limted

Hong K

ong

$ Ordinar

y shares

100

Marina Honor

Shippng Lim

ted

Hong

Kong

HKD Ordinar

y shares

100

$ Ordinar

y shares

100

Marina K

unzite Shipp

ng Limted

Hong Kong

$ Ordinar

y shares

100

Marina Splendor

Shippng Li

mted

Hong Kong

HKD Ordinar

y shares

100

$ Ordinar

y shares

100

i Priva

te Limt

Hong Kong

$ Ordinar

y shares

100

$ A Ord

inar

y sh

ares

90.

S C Lear

ning L

imte

Hong Kong

HKD Ordinar

y shares

100

Standard

Chartered Sher

wood (

HK) Limted

Hong Kong

HKD Ordinar

y shares

100

Resolution

Alliance K

orea Ltd

Korea,

Republic of

KRW5,000.00 Ordinar

y shares

100

Pemb

roke Lea

sing (Lab

uan

) 2 B

erh

Malaysia

$ Ordinar

y shares

100

Pemb

roke Lea

sing (Lab

uan

) Pt

e Limt

Malaysia

$ Ordinar

y shares

100

Marina Pissenlet Shipp

ng Limted

Mar

shall Islands

$1.00 Ordinar

y shares

100

Acti

s Asia Re

al Es

tate (M

aur

itus

) L

imte

auritus

ass A $

1.00 O

rdina

y share

100

Cla

ss B $1

.00 Ord

inar

y sh

ares

100

wang Hua

Mocatta Company

Ltd.

aiwan

WD1,000.00 Ordinar

y shares

Acti

s RE Invest

ment 1 Pr

ivat

e Limte

Sing

apore

D Ordinar

y shares

Acti

s RE Invest

ment 2 Pr

ivat

e Limte

Singap

ore

D Ordinar

y shares

Acti

s RE Invest

ment 3 Pr

ivat

e Limte

Singapore

SGD Ordin

ary share

100

Acti

s RE Invest

ment 4 Pr

ivat

e Limte

Singapore

D Ordinar

y shares

100

Marina Aster Sh

ippng Pte

. Ltd.

Singapore

$ Ordinar

y shares

100

Marina P

oise Shippng

Pte. Ltd.

Singapore

$ Ordinar

y shares

100

Marina Mars Shi

ppng Pte.

Ltd.

Sing

apore

$ Ordin

ary share

100

Marina Merc

y Sh

ippng Pte

. Ltd.

Singapore

$ Ordinar

y shares

100

Marina Daffodil

Shippng P

te. L

td.

Singapore

$ Ordinar

y shares

100

Marina F

reesia Shipp

ng Pte. Ltd.

Singap

ore

$ Ordinar

y share

100

Standard Char

tered Capital Managem

ent (

Jersey

), LL

United States

$ Ordinar

y shares

Standard

Chartered International (

USA)

LLC

United States

Membership Interest

100

StanChart Securit

es International LL

United States

Member

ship

Interest

100

1 Th

e Gro

up ha

s det

erm

ine

d the p

rin

cpa

l pla

ce of o

per

atio

n to be S

ing

apo

Thi

s year’s overall w

inner, is Sing Yi

Chai and her take on Accelerating

Zero. Th

e phot

o is taken in

sde

Singapore’

s famous T

ree T

unnel.

“M

y subje

ct had take

n some

calculated risks and o

vercome

physica

l challenges to get up

the

re,” she say

s. “L

ikewse, t

jou

rney towar

ds carb

on-fr

ee is no

without its risks and

challenges.

Look u

p to our g

oal and we w

ill

t t

e.”

Emplo

yee pho

to comp

etit

This year our

photo

competit

ask

d our

emplo

yees

to interp

ret our

Stands: Accelerating

Zero, Lif

tng

ticpatio

n and

set

ting

lobal

sat

. Her

e are the

three

winner

s…

For m

ore i

nfor

mat

on o

n our S

tand

s se

e pag

es 24 and 2

ccelerating Zero

by Sing Yi Chai, Singapor

438

Standard Chartered

– Annu

al Rep

ort 202

In thi

rd place i

s Preman

and

Managaran.

The photo

repr

esen

ts th

e power to b

uild

bac

k from COVID-

. “T

pict

ure was t

aken befo

re the

pandem

ic,

” Premanan

d explains.

“We are not a

s free a

s we

were an

d, as a ba

nk, we ai

to em

power sm

all busi

ness

to build back

stronger.

”

In second place

, is Md Ahidul

Hasan, and his interpretaton

of Acce

lerat

ing Zero, a sh

ot of

bam

boo – es

sent

ial bui

ldng

blocks for

many househol

ds.

“M

y photo

graph s

hows bam

boo

being transported to

the mark

et through

the

cana

ls. Ba

mboo c

an be a

goo

d alter

nati

ve to mor

carbon int

ensve buildng

material

for households.

”

De Lat Mark

by Premanand

Managaran

Mala

ysia

Bamb

oo M

arket

by Md Ahidul

Hasan, Bangladesh

upp



439

Standard Chartered

– An

nual Re

por

t 2021

Sup

pleme

ntar

y inf

orma

ton

Supplementar

y ﬁnancal

inform

at

Supplementar

y people informaton

450

Supplementar

y sustainablity informaton

457

hareholder i

nfo

rmaton

ain award

s and acco

lade

s in 20

62 G

440

Standard Chartered

– Ann

ual Re

por

t 2021

Supplementar

informat

on

Supplementar

y ﬁna

ncal

informaton

Five-

year summar

2021

$millon

2020

$millo

2019

$millo

2018

$millo

2017

$millo

erat

ing proﬁ

t befo

re imp

arme

nt los

ses an

d taxat

ion

3,777

484

,00

Imp

airm

ent lo

sse

s on loa

ns and a

dvance

s and ot

her

credit risk provison

(

(2,325

)

62)

Other imparment

(372)

(

82)

(

179)

Proﬁt b

efor

e taxat

ion

1,6

3,7

2,548

Proﬁ

(loss

) attributable t

o sharehol

ders

2,31

1,0

219

Loan

s and ad

vance

s to ban

44,

383

44,34

53,54

,41

Loan

s and ad

vance

s to cust

ome

298,468

281,6

268

,52

256,557

282,

288

ota

l asset

20,3

3,501

Dep

osit

s by ba

nks

,041

0,2

562

,94

Customer accounts

439

339

405,357

1,01

370,5

Shareholders’ equ

6,0

4,835

,11

46,5

ota

l capital

resources

66,868

65,

353

Informa

tion per ordinar

y share

sic ea

rning

(los

) per s

hare

0.4c

23.5c

Underlying earnings

per share

Divdends per share

–

.0c

–

Net a

sse

t value p

er sha

1,456.4c

409

.3c

358.3c

1,319

.3c

Net t

angib

le as

set val

ue per s

hare

214.7

Return on

ssets

.1%

0.2

Rat

ios

Statutor

y return on

ordinar

y shareholders’

equit

.2%

.4%

1.7%

Statutor

y return on

ordinar

y shareholders’

tangible equit

.0%

Underlying return on ordinary shareholders’ equit

.3%

5.6%

.5%

Underlying return on ordinary shareholders’

tangible equit

6.0

3.0

.4%

.1%

Sta

tut

y cost t

o inco

me rati

o (

exclud

ing UK B

ank Lev

)

68.7%

.7%

Sta

tut

y cost t

o inco

me rati

o (

clud

ng UK B

ank Lev

)

70.

78.8

72.

Und

erl

ying co

st to in

come ra

tio (

excl

udin

g UK Ban

k lev

)

.7%

Und

erl

ying co

st to in

come ra

tio (incl

udng UK B

ank le

)

70.

68.7%

68.

70.

Capital ratios:

T 1

4.1

13.8

14.2%

otal capital

.3%

21.

.2%

.0%

e amo

unt

s for t

he ﬁn

anca

l year e

nde

d 2017 a

re pre

sen

ted i

n line w

ith I

AS 39 an

d, th

ere

for

e, not o

n a com

para

ble b

asi

s to th

e cur

ren

t ﬁnan

cal ye

ar pr

ese

nte

in ac

cor

danc

e wit

h IFRS 9

xclu

des a

mou

nts h

eld a

t fair v

alue t

hro

ugh p

roﬁt o

r los

Shareholder

s’ funds, non-contro

lling interests and subordinate

oan capital

vd

end p

aid du

rin

g the y

ear p

er sha

Repr

ese

s proﬁ

t att

rib

utab

le to s

hare

hol

der

s di

vde

d by th

e tot

al as

set

s of t

he Gr

oup

6 Unaudited

pple

ntar

ﬁnan

cal

info

aton

Standard Chartered

– Ann

ual Rep

t 2021

Supplementar

informat

on

Analysi

s of underlyin

g perform

ance by k

ey market

The f

ollowi

ng tabl

es provi

de info

rmat

on for key mar

kets i

n which t

he Gro

up ope

rates

. The nu

mber

s are pr

epare

d on a

man

ageme

nt view. Refer to N

ote 2 fo

r detail

2021

Hong K

ong

$millon

rea

$millon

China

$millon

Singapore

$millon

India

$millon

Indonesia

$millon

Operating income

3,440

1,0

1,608

213

546

895

818

Operating expenses

08)

(

)

(

)

(

175)

62)

(

721)

(

533)

Operating proﬁt before

imparment losses a

taxation

330

554

538

285

Credit imparm

ent

(

251)

(

)

(3)

Other imparment

–

(301)

(

–

Proﬁt from associat

es and

jont v

ent

ures

–

175

–

Underlying proﬁt

bef

ore

taxation

318

147

516

242

328

312

otal a

sse

ts em

ploye

4,881

28,4

4,836

93,

807

Of whi

ch: loa

ns and

advances

to customers

323

18,014

56,454

,99

257

,93

375

otal l

iablit

es emp

loyed

6,727

58,406

35,

637

93,88

0,5

,92

70,

Of w

hich: cus

tome

account

1,256

,15

14,73

11,

466

105,490

2020

Hong K

ong

$millo

Kor

$millo

China

$millo

Singapore

$millo

India

$millo

Indonesia

$millo

UAE

$millo

Operating income

3,4

1,0

926

562

,24

309

783

Operating expenses

(

)

(

)

(97

)

(

)

(525)

Operating proﬁt before

imparment losses a

taxation

1,526

585

170

273

258

Credit imparm

ent

99)

)

12)

74)

27)

(

(27

)

(

Other imparment

(55)

(1)

–

(1)

–

(

–

Proﬁt from associat

es and

jont v

ent

ures

–

Underlying proﬁt/

(loss)

before taxation

1,272

283

309

111

337

(

154

228

otal a

sse

ts em

ploye

1,827

28,

272

63,

330

Of whi

ch: loa

ns and

advances

to customers

78,

42,636

16,8

53,

444

,25

212

10,

,803

otal l

iablit

es emp

loyed

60,

329

,713

,554

20,

728

494

324

Of w

hich: cus

tome

account

135

26,

319

303

,05

11,7

1,1

,717

Loa

ns an

d adva

nce

s to cus

tom

s and cu

sto

mer a

ccou

s incl

ude

s FV

TPL a

nd re

pur

chas

e agr

eem

ent

Standard Chartered

– An

nual Re

por

t 2021

Supplementar

informat

on

Supplementar

y ﬁna

ncal

informaton

Analysi

s of operat

ing incom

e b

y pr

oduct an

d segment

The f

ollowi

ng tabl

es provi

de a bre

akdown of th

e Gro

’

s u

nder

lyin

g oper

ating in

come by pr

oduct a

nd clien

t segm

ent.

2021

Corporate,

Commercial &

Institu

tonal

Banking

$millon

Consumer,

Pri

vate &

Business

Banking

$millon

Central &

other items

(segment

)

$millon

ransaction Bankin

,50

–

592

rade

1,1

–

153

Cash Management

1,403

–

,439

Financal Markets

–

,92

Macro T

rading

216

–

,216

Credit Market

823

–

,823

Credit T

rading

437

–

437

Fina

ncng Solutions &

suanc

1,386

–

1,386

Structured Fi

nance

480

–

480

Fina

ncng & Securit

es Ser

vices

–

387

–

Lend

ing & Por

tfol

io Man

agem

ent

968

–

,00

ealth Mana

gement

,224

–

225

Retail Products

,357

–

358

Cre

dit Car

ds & Per

sona

l Loans (CCPL

) & o

ther u

nse

cure

d lendi

–

272

–

1,272

Deposits

–

860

Mortgage & Auto

–

1,0

–

,036

Other R

etail P

roducts

–

190

–

190

reasury

–

698

Other

(125)

(89)

otal

underlying operating income

8,407

5,733

573

14,713

2020 (Rest

ate

d)¹

Corporate,

Commercial &

Institutonal

Banking

$millo

Consumer,

ivat

e &

Business

Banking

$millo

Central &

other items

(

segment)

$millo

otal

$millo

ransaction Bankin

–

2,838

rade

951

–

Cash Management

794

–

1,8

Financal Markets

–

Macro T

rading

–

532

Credit Market

1,62

–

1,6

Credit T

rading

404

–

404

Fina

ncng Solutions &

suanc

217

–

217

Structured Fi

nance

–

382

Fina

ncng & Securit

es Ser

vices

364

–

364

–

Lend

ing & Por

tfol

io Man

agem

ent

846

–

884

ealth Mana

gement

–

Retail Products

565

–

3,566

Cre

dit Car

ds & Per

sona

l Loans (CCPL

) & o

ther u

nse

cure

d lendi

–

211

–

,211

Deposits

,456

–

457

Mortgage & Auto

–

750

–

750

Other R

etail P

roducts

–

148

–

reasury

–

635

Other

)

otal

underlying operating income

8,4

691

589

ollo

win

g the G

rou

’s cha

nge i

n orga

nis

ato

nal s

tru

ctu

re, t

here h

as be

en an i

nte

grat

on o

f Cor

por

ate & In

sti

tut

on

al Ban

kin

g and C

omm

erci

al Ba

nkin

g to

rpo

rat

e, Co

mmer

cial & I

nst

itu

ton

al Ba

nki

ng; Pr

ivat

e Ban

kin

g and Ret

ail B

ank

ing t

o Con

sum

er, Priv

ate & Bu

sin

ess B

ank

ing

. Fur

the

, c

ert

ain cl

ient

s ha

ve be

mov

ed be

een t

he t

wo new c

lien

t seg

men

. Pri

or pe

rio

d has b

een r

est

ate

443

Standard Chartered

– An

nual Re

por

t 2021

Supplementar

informat

on

erag

e balance sh

eet

s and yields an

d v

olu

me and price variances

ver

age ba

lanc

e she

ets a

nd yie

lds

For t

he pur

pose

s of calcu

latin

g net int

erest m

argin th

e follow

ing adj

ustm

ent

s are mad

•

Sta

tuto

y net int

erest i

ncome i

s adjus

ted to re

move inte

rest ex

pens

e on amo

rtis

ed cos

t liablit

es use

d to provi

de fu

nding t

the Financal Market

s business

•

Financ

al inst

rume

nts m

eas

ured at f

air value t

hroug

h proﬁt or lo

ss are c

lass

if

ed as no

n-intere

st ear

ning

•

Premi

ums on ﬁn

ancal gu

arante

es pu

rchas

ed to man

age int

eres

t earni

ng ass

s are tre

ated a

s intere

st exp

ense

In th

e Grou

’

s v

iew this r

esult

s in a ne

t inter

est marg

in that i

s more re

ﬂecti

ve of bank

ing bo

ok per

for

mance.

The f

ollowi

ng tabl

es set o

ut the a

verage b

alanc

es and yi

elds fo

r the G

roup

’s ass

s and liabli

tes fo

r the pe

riod

s ende

31 De

cembe

r 20

21 an

d 31 Dece

mber 2020 und

er the rev

ise

d deﬁntio

n of net in

tere

st margin

. For th

e purp

ose of t

hes

e table

aver

age bal

ances h

ave be

en dete

rmine

d on th

e basi

s of dail

y balan

ces, exce

pt for cer

tain ca

tego

ries

, for w

hich bal

ances

have b

een d

eter

mined l

ess f

requ

entl

. The G

roup d

oes no

t believe t

hat th

e infor

mato

n prese

nted in t

hese t

able

s would b

signﬁc

antly d

iffe

rent ha

d such ba

lance

s been d

eter

mined o

n a daily b

asis

verage assets

2021

verage

non-interest

earning

balance

$millon

verage

interest

earning

balance

$millon

Interest

income

$millon

Gross yield

interest

earning

balance

Gross yield

total

balance

sh and b

alanc

es at cen

tral b

anks

,61

.16

.12

oss lo

ans an

d advan

ces to b

ank

22,33

5,9

490

1.07

0.72

oss lo

ans an

d advan

ces to c

ustom

.46

.08

Imp

airm

ent pr

oviso

ns aga

inst lo

ans an

d advan

ces to

ban

ks an

d custo

mer

–

(6,01

–

Investment securites

250

1.34

Prop

ert

y, plant an

d equ

ipmen

t and int

angb

le ass

869

–

Prep

aym

ent

s, ac

cru

ed inco

me and o

the

r ass

ets

111,

564

–

Inv

estment associates and

jont ve

ntures

2,330

–

al avera

ge as

set

559

,408

0,2

1.83

2020

erage

non-interest

earning

balance

$millo

erage

interest

earning

balance

$millo

Interest

income

$millo

Gross yield

interest

earning

balance

Gross yield

total

balance

sh and b

alanc

es at cen

tral b

anks

185

43,

210

113

0.2

oss lo

ans an

d advan

ces to b

ank

,68

801

1.4

.98

oss lo

ans an

d advan

ces to c

ustom

51,

1,4

558

.94

Imp

airm

ent pr

oviso

ns aga

inst lo

ans an

d advan

ces to

ban

ks an

d custo

mer

–

Investment securites

28,

313

,820

1.64

Prop

ert

y, plant an

d equ

ipmen

t and int

angb

le ass

–

Prep

aym

ent

s, ac

cru

ed inco

me and o

the

r ass

ets

116

,26

–

Inv

estment associates and

jont ve

ntures

–

otal

average assets

253,6

370

12,

292

444

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

Supplementar

y ﬁna

ncal

informaton

verage liablites

2021

verage

non-interest

bearing

balance

$millon

verage

interest

bearing

balance

$millon

Interest

expen

$millon

Rate paid

bearing

balance

Rate paid

total

balance

Dep

osi

ts by ba

nks

18,486

136

Customer accounts:

Current accounts and savings deposits

51,

848

me and other deposits

4,658

348

0.9

0.6

Deb

t sec

urit

es in is

sue

6,288

9,1

566

0.96

Accruals, de

ferred income

and other lia

blites

115,4

0.05

Subordinated

liab

lites and

other borrow

ed f

unds

–

525

497

3.0

.01

Non-control

ling interests

343

–

Shareholders’ funds

–

3,448

Adjustment

for Fina

ncal Mark

s funding

cost

(97

)

Fina

ncal guara

nte

fees on interest

arni

ng asset

otal av

age liablites and shareholders

’ funds

3,450

.67

0.42

2020

erage

non-interest

bearin

balance

$millo

erage

interest

bearin

balance

$millo

Interest

expense

$millo

Rate paid

bearin

balance

Rate paid

total

balance

Dep

osit

s by ba

nks

,89

0.87

Customer accounts:

Current accounts and savings deposits

,729

278

0.42

me and other deposits

789

154,

865

531

1.63

Deb

t sec

urit

es in is

sue

6,883

52,

391

836

1.60

Accruals, de

ferred income

and other lia

blites

,16

5.0

0.0

Subordinated

liab

lites and

other borrow

ed f

unds

–

,170

637

.94

Non-control

ling interests

319

–

Shareholders’ funds

0,37

–

0,1

478

,44

Adjustment

for Fina

ncal Mark

s funding

cost

(

Fina

ncal guara

nte

fees on interest

arni

ng asset

104

ota

l average li

abl

ites and shar

eholder

s’

unds

,19

478

371

0.69

Net i

nterest

margin

2021

$millon

2020

$millo

Interest

income (

statutor

)

10,

12,29

Average i

nter

est ea

rning a

sse

,408

370

oss y

ield (%)

1.83

2.3

Interest

expense (

statutory

)

3,44

5,4

Adjustment

for Fina

ncal Mark

s funding

cost

(97

)

Fina

ncal guara

nte

fees on interest

arni

ng asset

104

Adju

sted i

ntere

st exp

ens

e use

d to fu

nd ﬁnan

cal ins

ument

s he

ld at fai

r value

3,450

371

rage interest

-bearin

g liablites

Rate p

aid (%)

.67

Net y

ield (%)

.16

Net interes

t income adjusted for Financal Market

s funding cos

ts and Financal guarantee fee

on int

erest e

arni

ng ass

796

Net interes

t margin (%

)

1.21

445

Standard Chartered

– Ann

ual Rep

ort 202

Supplementar

informat

on

ume and price variances

The follo

wing table a

nalyses the es

ima

change in the

roup

’s

net inter

est income attributab

le to

changes i

n the average

volu

me of int

erest

-e

arnin

g ass

ets a

nd inte

rest

-be

aring l

iablite

s, and c

hange

s in thei

r respe

ctive i

ntere

st rate

s for the ye

ars

pre

sente

d. V

olu

me and ra

te varian

ces ha

ve been d

eter

mine

d base

d on movem

ent

s in avera

ge bala

nces and a

verag

exchan

ge rate

s over the ye

ar and cha

nges in in

tere

st rates o

n avera

ge inte

rest

-ea

rning a

sse

ts an

d averag

e inter

est

bear

ing liablites.

2021 v

ersu

2020

(Decrease

)

/increase

in in

res

t due t

Net increase

(

decrease

) in

interest

$millon

olume

$millon

Rate

$millon

Interes

t earning assets

sh and un

rest

rict

ed bal

ance

s at cent

ral ban

)

(21)

Loan

s and ad

vance

s to ban

(

(31

Loan

s and ad

vance

s to cust

ome

(

402)

(

Investment securites

158

88)

(

ota

l interest earning

asset

510

(2,

556

)

(

Interes

t bearing liablites

Subordinated

liab

lites and

other borrow

ed f

unds

(

151)

(

Dep

osit

s by ba

nks

(

102)

(

101)

Customer accounts:

Current accounts and savings deposits

123

)

(297

)

me and other deposits

(

50)

(

Deb

t sec

urit

es in is

sue

(33

(

70)

ota

l interest bearing

liablites

(

,14

(

)

2020 ver

sus 2019

(Decrease

)

/inc

rease

in in

ter

est d

ue to:

Net inc

rease/

(

decrease

) i

interest

$millo

Rate

$millo

Interes

t earning assets

sh and un

rest

rict

ed bal

ance

s at cent

ral ban

(

Loan

s and ad

vance

s to ban

02)

)

(1,03

Loan

s and ad

vance

s to cust

ome

659)

(2,2

17)

Investment securites

82)

(

ota

l interest earning

asset

568

)

(

4,257

)

Interes

t bearing liablites

Subordinated

liab

lites and

other borrow

ed f

unds

(

(11

Dep

osit

s by ba

nks

(4)

)

(

02)

Customer accounts:

Current accounts and savings deposits

233

(

1,1

me and other deposits

(

13)

(1,6

22)

Deb

t sec

urit

es in is

sue

(333

)

(28

)

ota

l interest bearing

liablites

109

,551)

(

446

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

Supplem

entary people informaton

Supplementar

y p

eople informaton

Global

2021

2020

% change

Full-t

ime e

quival

ent (F

)

,90

83,601

(

adcou

nt (year e

nd)

,95

83,657

(

Employed

workers (permanent)

0,60

2,08

(1.8

)

of w

hich fe

male

36,644

(

Fix

term workers (

temporar

)

1,573

(

.0)

of w

hich fe

male

(

)

Non

-emp

loyed wor

kers (N

)

13,

845

11,63

Non-outsourced N

Outsourced NEW

,715

31.5

Headcount (1

month average

)

82,736

84,7

(

Male

033

5,1

(

Headcount

4,0

,210

(

Full

-time

4,0

172

(

Part

-time

Female

969

(

)

Headcount

,013

(

.9)

Full

-time

(

)

Part

-time

143

153

)

Undisclos

434

Headcount

631

45.

Full

-time

433

Part

-time

–

National

ties

132

131

0.8

Positon type

021

2020

% change

Executive and non

-executive direc

tor

–

of w

hich fe

male

–

Man

agem

ent te

am and t

heir di

rect re

por

116

129

.1)

of w

hich fe

male

(

)

Senior leadership

4,2

0.7

of w

hich fe

male

299

1,236

Rest o

f Employe

of w

hich fe

male

,98

36,7

Employment

ype

021

2020

% change

Business FTE

30,

595

4,883

(

Business headcount

,61

Business female headcount

15,866

,016

(

.9)

Support ser

vices FTE

51,

308

8,717

Support ser

vices headcount

,752

Female support serv

ices

adcount

21,415

9,9

Standard Chartered

– Ann

ual Rep

t 2021

Supplementar

informat

on

Regio

2021

2020

% change

ia F

8,357

)

Asia headcount

68,

385

)

Asia female headcount

31,47

31,61

Asia employed

workers headcount

,96

)

Asia ﬁxed term w

s headcount

936

(

ia fu

ll tim

e head

coun

8,300

ia par

t tim

e head

coun

AME FTE

10,

(

AME headcount

0,695

(

AME female headcount

,652

(

)

AME employ

ed workers headcount

8,999

,13

(

AME ﬁx

ed term work

ers headcount

(32

)

AME f

ull t

ime he

adco

unt

0,69

(

AME p

art t

ime he

adco

unt

–

A FT

,69

550

EA headcount

,714

577

EA female headcount

1,7

751

(

A empl

oyed wor

kers h

eadc

ount

4,638

,496

3.2

A ﬁxed te

rm wor

kers h

eadc

ount

)

A ful

l time h

eadc

ount

627

3.4

A par

t time h

eadc

ount

103

(15.

Age

2021

2020

% change

< 30 ye

ars F

4,06

(

.0)

< 30 ye

ars h

eadco

unt

,069

,98

(

< 30 ye

ars f

emale h

ead

count

8,409

(

)

0 year

s F

60,8

60,

0.0

0 year

s hea

dcou

0,9

0.0

0 year

s fem

ale he

adcou

26,583

> 50 yea

rs F

,949

> 50 yea

rs he

adco

unt

,969

> 50 yea

rs fe

male h

eadc

ount

3,07

963

3.8

448

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

Supplem

entary people informaton

alent management

2021

2020

% change

obal vo

lunt

y tur

nover – F

10,

214

6,001

70.

obal t

urn

over – F

13,

160

8,0

obal vo

lunt

y tur

nover ra

te (%)

.5%

71.7

obal t

urn

over rate (%)

16.0

63.

Mal

e tur

nover F

332

386

Mal

e (%

)

16.

9.9

Female turnover

5,736

3,6

56.2

Fem

ale (%)

.7%

58.

ia tur

nover F

,004

588

ia (%)

16.

66.

AME t

urn

over F

1,454

1,0

AME (%)

14.

A tur

nover F

4.7

A (%

)

15.

< 30 ye

ars t

urn

over F

3,712

2,561

< 30 ye

ars (%)

24.2%

.1%

71.

0 year

s tur

nover F

144

0 year

s (%)

13.

.2%

5.4

> 50 yea

rs t

urnove

r FT

304

71.

> 50 yea

rs (%)

Average t

enur

e (year

) – Male

verage tenure (y

ear

)

– Female

1.7

obal n

ew hire

s – FTE

,660

8,639

6.6

obal n

ew hire ra

te (%)

.1%

10.

Mal

e new hir

e FTE

6,758

963

36.2

Mal

e (%

)

.0%

1.0%

36.4

Fem

ale new hi

re F

580

423

63.0

Fem

ale (%)

14.7%

8.8%

ia new hi

re F

11,387

0.0

ia (%)

16.

.1%

0.2

AME n

ew hire F

431

366

AME (%)

4.0

A new hir

e FT

23.5

A (%

)

.5%

15.

< 30 ye

ars n

ew hire F

5,857

,020

45.

< 30 ye

ars (%)

36.7%

.1%

0 year

s new hir

e FT

6,514

4,433

0 year

s (%)

0.7

42.

> 50 yea

rs ne

w hire F

290

186

55.6

> 50 yea

rs (%)

.0%

43.8

Role

s ﬁlled i

nter

nall

y (%

)

0.8%

of w

hich ﬁll

ed by fem

ales (%)

.1%

Emp

loyees w

ith co

mple

ted p

erfo

rman

ce appr

aisal (%)

.7%

Absenteeism ra

(%)

23.

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

Learning

2021

2020

% change

Emp

loyees r

ecei

vng t

rainng (%)

)

Emp

loyees r

ecei

vng t

rainng f

or pe

rso

nal deve

lopm

ent (%)

1.7%

Fem

ale (%)

91.

9.9

1.5

Senior leadership (%

)

96.

94.

1.8

verage number of train

ng hour

employee

31.8

18.0

Female

36.

30.

21.

Emp

loyed wor

kers

31.

18.1

Fixed t

erm wo

rker

24.

Average c

ost of t

rainn

g per em

ployee ($)

ork

-related Health

& Safety

2021

2020

% change

Fatalites

–

Fat

alite

s (

rate p

er mil

lon ho

urs wo

rked)

0.01

–

Major inuries

,12

,13,1

Maj

or inur

ies (rate pe

r millon h

our

s wor

ked

)

.12

4.5

Recordable

work

-related inuries

Reco

rdabl

e work-rela

ted in

urie

s (

rate p

er mil

lon hou

rs wo

rked

)

0.45

(

.8)

ork-related ill-health (fatalites

)

–

xcl

ude

s 247 empl

oyee

s (hea

dco

unt) fr

om So

lv an

d Zai (for

rly k

now

n as Cu

rre

ncy F

air A

sse

mbl

y Pay

ment

) e

nti

tes

n-o

sou

rced N

EWs are r

eso

urce

s eng

age

d on a ti

me an

d mat

eri

als ba

sis w

her

e tas

k sel

ect

ion an

d sup

son i

s the r

esp

ons

ibl

y of th

e Ban

k, su

ch as a

gen

workers. Re

ferences to

total number of col

leagues in

this report include

employees plus

on-outsourced NEW

sou

rced N

EWs are a

rra

ngem

ent

s wi

th a th

ird p

art

y ven

dor w

her

e the d

eli

ver

y is b

ase

d on a sp

eci

f

c ser

ce or o

utc

ome at a

n agr

eed p

ric

e, irr

esp

ect

ve of t

mbe

r of res

our

ces r

equ

ired t

o per

for

m th

e ser

ice. T

hes

e res

ourc

es are n

ot co

nsi

der

ed as t

he Gr

oup’s head

cou

The disclosure of

gender informaton is

mandator

y in

some markets

nag

emen

t tea

m (MT

) and c

olle

agu

es wh

o rep

t to th

em, exc

lud

ing a

dmin

str

ati

ve or exe

cut

ive su

ppo

rt ro

les (

per

nal as

sis

tan

t, b

usin

ess p

lan

ning

managers

).I

ncludes Group

Head of Internal

Audit.

Sen

ior l

ead

ers

hip is d

eﬁn

ed as M

ana

ging D

ire

ctor

s an

d Ban

ds 4 (incl

udn

g Man

age

men

t T

eam)

over me

ics ar

e bas

ed o

n per

man

ent em

ploy

ed wor

ker

s onl

. N

ew hir

e met

ric

s are b

ase

d on ex

ter

nal ne

w hire

s. T

rno

ver an

d new hi

re met

cs fo

r the

undisclosed gender population

is not shown

due to

small population

size

Repre

sen

ts h

ealt

h and d

isa

blit

y r

elat

ed ab

sen

ce, in

clu

dng q

uara

nti

ne and v

acci

nat

on le

ave in r

esp

ect o

f COVID-19

. E

xcl

ude

s Korea

Lear

nin

g met

ric

s ha

ve bee

n upd

ate

d to exc

lud

e non-

emp

loyed w

orke

rs (N

EWs

) an

d 2020 ha

s bee

n upd

ate

d for co

mpa

ris

on. Train

ng fo

r per

son

al dev

elop

men

is d

eﬁne

d as al

l trai

nng e

xclu

ding m

and

ator

y o

r rol

e spe

cif

c tr

ainn

Average cost

of trainng per

employee includes cost

of learning management system

11 I

ncludes c

ommuting

12 P

er UK H

SE deﬁn

tio

Mos

t comm

on t

es of m

ajor i

nur

y a

re fr

actu

res (

52%)

2021 i

cludes

4 contractors/

is

tor

s. 2

020 includes

1 contractor

/vis

tor

15 202

1 hou

rs wo

rked = 1

,097 . 2

020 hou

rs wo

rked = 1

85,

3,6

16 2

021 includes

3 c

ontractors/

is

tor

s. 2

020 includes

14 contractors/

vistors

450

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

Supplem

entary sustainablity informaton

pple

ntar

tainablit

info

aton

Pillar 1: Bus

iness

ployees t

rain

ed in e

vir

onme

ntal a

nd so

cial ri

sk ma

nage

ment

2021

2020

2019

Emp

loyees t

raine

1,280

1,604

,14

mpl

oyee

s targ

ete

d for t

rain

ng ar

e tho

se in cl

ien

-fa

cing r

ole

s and re

leva

nt sup

por

t te

ams

Environmental

and social

risk management

2021

2020

2019

Num

ber o

f trans

acti

ons rev

iewed

Number of clients re

viewed

688

804

Equator P

rincples

Project

ﬁnance manda

tes

Project

-related corporate loans

Project

-related reﬁnance

Project

advisor

mandates

t A

t B

t C

t A

t B

at C

at A

Cat B

Cat C

ota

l 2019

–

ota

l 2020

–

otal 20

202

Sector

Minng

Infrastr

ucture

Oil & G

Renew

ables

elecoms

Power

Other

Regi

GCNA

ASA

Americas

Designaton

Designated

Non-Designa

Independent Re

view

‘C

at A

’ or C

ate

gor

y A a

re pro

jec

ts w

ith p

oten

tia

l sign

ﬁcan

t adve

e envi

ron

ment

al an

d soc

ial ri

s and/

r imp

act

s tha

t are di

ver

se, i

rrev

ers

ble o

r unp

rec

ede

nte

‘C

at B’ o

r Cate

ry B a

re pro

jec

ts w

ith p

ote

ntia

l lim

ted a

dver

se e

nvir

onme

nta

l and s

ocia

l ris

ks an

or i

mpa

cts t

hat a

re few i

n num

ber, gen

era

lly si

te-

spe

cif

c,

largely re

versible and

readily addressed through mit

gation measures

‘C

at C’ o

r Cat

ego

y C are pr

oje

cts w

ith m

inm

al or n

o adve

e envi

ronm

ent

al an

d soci

al ri

sks a

nd/

r imp

act

In li

ne wi

th Equ

ato

r Prin

cpl

es 4, S

tan

dard C

har

ter

ed now r

epo

s tho

se t

rans

act

ion

s tha

t tri

gger P

roje

ct Rel

ate

d Reﬁna

nce

‘De

sig

nat

on’ is s

pli

t into d

esi

gnat

ed an

d non

-de

sign

ate

d cou

ntr

ies

. Des

igna

ted c

oun

tri

es are d

eem

ed by t

he Equ

ato

r Prin

cpl

es to h

ave ro

bus

t envi

ron

ment

d soci

al gove

ance

, leg

isla

to

n sys

tem

s and in

st

tut

ion

al cap

acit

y d

esig

ned t

o pro

tect t

hei

r peo

ple a

nd th

e nat

ural e

nvir

onm

ent

. Non

-de

sign

ate

d cou

ntr

ies

are c

ountries that are

not found on

the list of

designated countries.

The list of

countries can

found at ww

.equator

-princples.

com

tan

dard C

har

ter

ed did n

ot pa

icpa

te in a

ny Proje

ct Ad

vis

y man

dat

es th

at tr

igg

ere

d the a

ppli

cab

lit

y of th

e Equ

ator P

rin

cple

s in 2021

451

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

Pillar 2: Ope

ration

Environment

See

footnote:

2021

2020

2019

Measured

Scaled Up

Measured

Scaled Up

Measur

Scaled Up

Ofﬁces rep

orting

838

756

164

–

Net i

nter

nal are

a of oc

cupie

d prop

ert

y (

)

998,571

1,05

0,4

825,088

154,

999

een le

ase c

laus

e inclu

son (%)

–

Occ

upied n

et int

ern

al area w

here d

ata is c

olle

cted (%)

–

Headcount

318

,95

83,657

398

Ann

ual op

erat

ing inc

ome f

rom 1 Oct

ober t

o 30 Se

ptem

ber

–

541

–

15,233

–

15,

een

hou

se ga

s emis

so

ns – Ab

solu

te (t

onne

s CO

eq/

year

)

Scope 1 emiss

(

combustion of fuels

)

2,834

589

3,435

4,542

Sco

pe 2 emi

sso

ns (pu

rchas

ed el

ectr

ict

y – loc

ation b

ase

80,

,47

870

98,

383

Sco

pe 2 emi

sso

ns (pu

rchas

ed el

ectr

ict

y – mar

ket bas

ed)

73,016

4,906

Sco

pe 1 & 2 emi

sso

ns (lo

catio

n bas

ed)

83,66

85,662

106,066

117

,858

101,81

313

Sco

pe 1 & 2 emi

sso

ns (UK an

d off

ore are

a onl

)

–

Sco

pe 3 emi

sso

ns wit

h dist

ance up

lift (

ir tra

vel)

3,4

3,654

31,6

Sco

pe 3 emi

sso

ns (

out

urce

d Glob

al Dat

a Cen

tre

)

43,

132

–

6,362

Sco

pe 1, 2 & 3 e

miss

ons (l

ocati

on ba

sed)

,079

132

137

,683

181

,350

286,718

een

hou

se ga

s emis

so

ns – In

ten

sit

Scope 1 &

2 emissons/

adcount

(

tonnes CO

eq/headcount/y

ear

)

.04

.05

1.43

1.4

1.73

Sco

pe 1 & 2 emi

sso

ns/$m oper

atin

g incom

(

tonnes CO

eq/

$m/

year

)

.89

–

.63

Scope 3 emiss

/headcount with d

istance upl

ift

(

tonnes CO

eq/headcount/y

ear

)

0.04

0.0

.40

.41

1.1

Sco

pe 1, 2 & 3 e

miss

ons/he

adco

unt

(

tonnes CO

eq/headcount/y

ear

)

.08

1.85

.17

.59

3.40

Sco

pe 1, 2 & 3 e

miss

ons/$m op

erati

ng inco

(

tonnes CO

eq/

$m/

year

)

9.1

–

11.

–

18.86

Environmental

resource efﬁcency

Energy

Indirect non

-renewa

ble energy consumption (

GWh

/year

)

142

163

184.2

153

222.

Indirect rene

wable energy consumption (

Wh/

year

)

26.8

16.4

Direct non-

renewable energy consumption (

Wh/y

)

14.

14.4

18.8

Direct renew

able energy consumption (

GWh

/year

)

0.7

.70

0.8

Energy consumption (

Wh/y

)

183

215.6

184.

258.

Ene

rgy co

nsum

ptio

n (

GWh/year

) (U

K and of

shore a

rea

Energy consumption

/Headcount (k

Wh/Headcount/

year

)

,233

,26

2,544

061

ater

ater consumption (

ML/year

)

256

384

363

483

er con

sump

tion in r

egio

ns of hi

gh or ext

reme

ly high

wate

r stre

ss (%)

ater consumption

/headcount (

/headcount/

year

)

aste (k

tonnes

/year

)

5.4

4.8

–

aste per col

ague

(kg/headcount/

year

)

–

ste re

used o

r rec

ycled (%)

–

452

Standard Chartered

– Ann

ual Re

por

t 2021

Supplementar

informat

on

Supplem

entary sustainablity informaton

Per

cent

age o

f gre

en le

ase c

laus

e inc

lus

on in al

l new an

d ren

ewed l

eas

es w

ithn t

he re

por

ng yea

Ref

ers t

o the G

rou

’s he

adc

oun

t as at 31 D

ece

mbe

r 2021.

is is a n

ew rep

ort

ing a

ddi

ton f

or 2021

. Mar

ket

-b

ed da

ta is u

nava

ilab

le fo

r prev

iou

s year

s. A

ll ag

greg

ate a

nd int

ens

t

y emi

sso

ns ﬁg

ures u

se lo

cat

ion b

ase

data as their foundation.

is is a l

ocat

ion b

ase

d con

sum

pti

on val

ue emi

ss

on. T

his is z

ero, a

s all en

erg

y con

sum

ed in t

he UK is f

m veri

f

ed re

newab

le so

urc

es.

Mea

sur

ed Sc

ope 3 ﬂ

ight e

mis

son

s are d

raw

n fro

m reli

abl

e data c

oll

ecte

d fr

om 35 co

unt

rie

s, ba

d on se

ati

ng cla

ss an

d dis

tan

ce ﬂow

n. Thi

s dat

a is th

en sc

ale

up t

o reﬂe

ct th

e por

tio

n of th

e por

tfo

lio we d

o not g

ath

er me

asu

rem

ent

s fr

om. A

s we op

erat

e lar

gel

y out

sid

e of th

e UK

, all ﬂi

ght

s dom

est

ic or i

nter

nat

on

al wit

ﬂig

ht dis

tan

ce of l

ess t

han 78

5km

, lab

elle

d by th

e Dep

art

men

t for B

usin

s, En

erg

y and In

dus

tri

al St

rate

gy (D

BEI

S) as do

mes

tic ﬂi

ght

s, h

ave be

en cl

sif

ed a

ort h

aul

. All ﬂi

ght

s wit

h dis

tanc

e ﬂown r

ang

ing f

rom 785 t

o 3,70

0km

, lab

ell

ed by DB

EIS a

s sho

rt ha

ul ha

ve be

en cla

ed as m

edi

um ha

ul. A

ll ﬂig

hts w

ith a

dis

tan

ce ﬂow

n in exce

ss o

f 3,700

km ar

e cla

ssi

f

ed as l

ong h

aul

. Note t

hat 2

020 scal

ed up ﬂ

ight e

mis

son

s, al

ong w

ith a

sso

cia

ted t

otal

s and i

nte

nst

y me

ics

ve be

en res

tat

ed du

e to an e

rro

r mad

e in prev

iou

s rep

ting p

iod

s. Th

is was a

n imm

ater

al ch

ang

e of le

ss th

an on

e per c

ent

We mea

sur

ed da

ta fr

om 98% o

f our p

rop

ert

ies t

o calc

ulat

e our e

ner

gy us

e acr

oss o

ur pro

per

es. T

his i

s the

n scal

ed up t

o reﬂe

ct th

e por

tio

n of th

e por

olio w

e do

not gather measurements from. W

arehouses, empt

land, car parks, unoccupied sites for

busines

continut

purposes

residental properties, space occupied b

automated teller

machines, vaults a

space sub-let to

tenant

s a

re excluded from

his

extrapolation. Figures

for renewable,

on-

renewable and

total energy

GWh a

re rou

nde

d to on

e dec

imal p

lac

e – the

refo

re so

me di

scre

pan

ces i

n rou

nde

d sum t

otal

s may a

ris

e. T

tal co

nsu

mpt

ion ﬁg

ure

s have b

een v

eri

f

ed as a

ccur

ate

om so

urce d

ata

. Thi

s also a

ppl

ies to p

rev

iou

s per

iod

s whi

ch are t

her

efor

e res

tat

ed to t

he sa

me leve

l of de

tai

l. Fur

the

r det

ail on t

he t

es of e

ner

gy in

clud

thn t

hes

e calc

ula

tion

s can b

e fou

nd at s

c.co

env

iro

nmen

tcr

ite

ra

In 202

1, re

por

tin

g has c

han

ged t

o GWh fo

r thi

s met

ric

. In pre

vio

us yea

rs t

his wa

s rep

ort

ed in M

Wh.

is val

ue re

pres

ent

s th

e tot

al en

erg

y of he

atin

g, co

oli

ng and e

lec

tri

ct

y con

sum

pti

on glo

bal

. T

al en

erg

y use i

s nor

mali

d to reﬂ

ect p

eri

ods o

f vacan

cy i

cer

tai

n sit

es du

rin

g the r

epo

rti

ng pe

rio

We mea

sur

ed da

ta fr

om 67% of o

ur pr

ope

rti

es to c

alcu

lat

e our wa

ter u

se ac

ros

s our pr

ope

ies

. This i

s the

n sca

led u

p to reﬂ

ect t

he po

rti

on of t

he po

foli

o we do

not gather measurements from.

rea

s of hig

h and ex

tre

mel

y high w

ate

r stre

ss de

ter

min

ed ac

cord

ing t

o WRI Aqu

adu

ct to

ol. A

s acc

ess

ed on 1

0 Jan 202

2, t

hes

e cou

ntr

ies ar

e Sou

th A

fri

ca, S

audi

abia

, Bah

rain

, Oma

n, Qa

tar, UAE, Pak

ist

an, I

ndia

, Tha

ilan

d and C

hina

. Thi

s is a new r

epo

ing ad

dit

on fo

r 2021, d

ata i

s una

vail

able f

or pr

evio

us ye

ars

e m

eas

ure

d dat

a fro

m 63% o

f our p

rope

ies to c

alcu

lat

e our wa

ste a

cro

ss ou

r pro

per

tie

s. Th

is is t

hen s

cale

d up to r

eﬂe

ct the p

tio

n of th

e por

tfo

lio we d

o not

gather measurements from.

Addi

onal notes on en

vironment data

The e

miss

ons wit

hn our inven

tor

y cor

resp

ond to a r

epor

ting p

erio

d of 1 Oct

ober 2020 to 30 S

eptem

ber 2021. T

his is to a

llow

suf

ﬁcent t

ime for in

depe

ndent a

ssu

rance to b

e gaine

d prio

r to the p

ublica

ton of re

sult

s. Acco

rdingl

, the o

perat

ing inco

use

d in this i

nventor

y co

rres

pond

s to the s

ame pe

riod r

ather t

han th

e calend

ar year us

ed in ﬁna

ncal rep

ort

ing. Th

is is con

siste

with inter

natonal carbo

n reporting pra

ctice.

e us

e an inde

pend

ent thir

d-part

y a

ssura

nce prov

ider to ver

y ou

r green

hous

e gas (

HG) emiss

ons. I

n 20

1, our m

easu

red

Sco

pe 1 and S

cope 2 em

isso

ns, a

s well as was

te and wat

er cons

umpti

on, were a

ssu

red by Gl

obal Do

cume

ntati

on Ltd, e

nsur

ing

the accuracy and

credibl

y of our reporting.

Read our

environment reporting critera at

sc.com/

vironmentcritera

Read our

indep

endent

ssurance

repo

rt a

sc.com/

vironm

entalassurance

453

Standard Chartered

– Annu

al Repo

rt 2021

Supplementar

informat

on

Pillar 2: Ope

ration

Financ

al crime prevention

Com

plet

ion r

ate

s of Fin

anc

al Crim

e Risk t

rai

nng

2021

2020

2019

Internal Financal Crime Risks

Group total

Asia

Gove

rnan

ce bo

Emp

loyees – E

mploye

d W

kers

Emp

loyees – Fi

xed ter

m worke

AME

Gove

rnan

ce bo

Emp

loyees – E

mploye

d W

kers

Emp

loyees – Fi

xed ter

m worke

Gove

rnan

ce bo

100

Emp

loyees – E

mploye

d W

kers

Emp

loyees – Fi

xed ter

m worke

External Financ

al

rime Risks

Group total

9.9

Asia

Gove

rnan

ce bo

Emp

loyees – E

mploye

d W

kers

Emp

loyees – Fi

xed ter

m worke

Business P

artners

100

AME

9.9

Gove

rnan

ce bo

Emp

loyees – E

mploye

d W

kers

Emp

loyees – Fi

xed ter

m worke

Business P

artners

100

Gove

rnan

ce bo

100

Emp

loyees – E

mploye

d W

kers

Emp

loyees – Fi

xed ter

m worke

Business P

artners

100

Additonal n

otes on ﬁn

ancal crime p

rev

ent

ion data

Wit

h the i

ntr

odu

cto

n of ali

gnm

ent to G

RI an

d WEF me

tri

, enh

ance

d dat

a rel

ated t

o emp

loye

e cate

gor

ies a

nd re

gio

ns ha

s bee

n prov

ide

d for 202

1. T

tal tr

ain

rat

es ha

ve be

en pr

ovid

ed fo

r prev

iou

s per

iod

s, f

or wh

ich re

gio

nal an

d cate

gor

y b

rea

kdow

ns are n

ot av

aila

ble.

In 20

20, the Financal Crime Compliance (FCC)

e-le

arning courses merge

Ext

ernal and Internal Financal

Crime Risk course

hich co

ver anti-money launde

ring

(AML), san

cti

ons

, ant

i bri

ber

y an

d cor

ptio

n (ABC) a

nd fr

aud r

isk

2019 r

epo

rte

d dat

a prov

ide

s the t

ota

l empl

oyee

s com

plet

ing t

hre

e sep

arat

e e-l

ear

ning c

our

on s

anct

ion

s, AM

L and A

vern

anc

e bod

y ref

ers t

o Sta

nda

rd Cha

rte

red PLC Bo

ard m

emb

s. Al

l Boa

rd mem

ber

s are r

epo

ed un

der E

A re

gion

Emp

loye

d wor

kers a

re pe

rma

nen

t empl

oyee

s of St

and

ard Ch

art

ere

d PLC. Fix

ed te

rm wor

ker

s are e

mplo

yed fo

r a ﬁxed p

eri

od.

sin

ess p

art

ner

s ref

s to su

ppli

ers a

nd th

ird p

art

ies t

hat re

cei

ved o

ur Su

ppli

er Cha

rte

r in 2021

. The S

upp

lie

r Char

ter c

omm

unic

ate

s our ex

ctat

ion

s and m

inmu

anda

rds w

ith r

egar

ds to A

BC an

d ﬁnan

cal cr

ime

Computing method :

(Completed +

Due

) / (T

otal Population

– Untagged) =

rate of Completion.

Data is

the “T

agged” population.

454

Standard Chartered

– Ann

ual Rep

t 2021

Supplementar

informat

on

Supplem

entary sustainablity informaton

Pillar 3: Commun

ites

Community expenditure

otal ($millon)

2021

2020

2019

Cash contri

butons

1.5

Emp

loyee ti

me (

n-cas

h item)

11.4

Gif

s in kin

d (

non-

cash i

tem

)

2.6

Management costs

4.7

4.4

4.5

al (

rec

t invest

ment by t

he G

roup)

46.8

88.6

Lev

erage

otal

(incl. lev

erage

)

8.7

Percentage of

prior year

erating proﬁt

(% PY

OP)

2.58

2.0

Gift

in kind

comprise

all non-monetary donations

Lev

erag

e dat

a rel

ates t

o the p

roc

eed

s fro

m sta

ff an

d oth

er f

undr

ais

ng ac

tiv

t

455

Standard Chartered

– Ann

ual Rep

t 2021

Supplementar

informat

on

Pillar one: Bus

iness

Theme

spiraton

arget Date

Green and T

ransit

Finance

Achiev

ng a ju

st tran

sito

n will re

quir

directng capital and spe

cialsed

sup

por

t to the r

egio

ns th

at nee

d it

most to

drive sus

tainable economic

growth

Mob

ilse $

300 b

illon al

igne

d to our G

ree

n and Sus

tain

able Pro

duct

Fra

work and T

ransiton F

inance F

ramework incl

udng contributon

from existng

target to:

Jan 2021 – D

ec 2030

Mob

ilse p

rojec

t ﬁnancn

g ser

ices fo

r $4

0 billo

n of inf

rast

ruc

ture

proj

ect

s tha

t promo

te su

stain

able de

velopm

ent t

hat alig

n to our

ver

if

ed Gr

een an

d Sust

ainab

le Prod

uct Fram

ework

Jan 2020 – De

c 202

Laun

ch and gr

ow gree

n mor

tgag

es in key mar

ket

s acros

s our f

ootp

rint

Jan 202

2 – Dec 202

Climate

change is

one of today’s

greatest c

hallenges and add

ressing

it is

sentia

l to promote susta

inable

economic growth

asur

e, mana

ge and r

educ

e emis

sons a

sso

ciate

d wit

h our ﬁn

ancng

via t

he imp

leme

ntat

on of ou

r net zer

o road

map

Jan 202

2 – Dec 202

Onl

y prov

ide ﬁna

ncal se

vice

s to clie

nts w

ho are:

•

by 2024, les

s than 8

0% dep

ende

nt on th

erm

al coal

(ba

sed o

n % revenu

)

;

•

by 2025, a

re les

s than 6

0% dep

ende

nt on th

erm

al coal

(ba

sed o

n % revenu

)

;

•

by 2027

, a

re les

s than 4

0% dep

end

ent on t

herm

al coal

(ba

sed o

n % revenu

)

;

•

by 2030, are l

ess t

han 5% dep

end

ent on t

herm

al coal

(ba

sed o

n % revenu

)

Jan

2020 – Jan 203

Achie

ve emissons reduction

in our most c

arbon-intens

ve sectors of:

•

63% i

n Power (Scop

es 1 and 2 in

tens

t

);

•

33% i

n Stee

l Produ

cer

s (

cop

es 1 and 2 in

tens

t

);

•

33% i

n Minng (

ex C

oal) (Sc

opes 1 a

nd 2 inte

nst

);

•

30% i

n Oil and G

as (Sco

pes 1

, 2 and 3 int

enst

), and;

•

85% em

isso

ns re

duct

ion in co

al minn

g (

cope

s 1, 2 an

d 3 abso

lute

)

Jan

2020 – Dec 203

Measure and re

port mortgage emissons with

a view to setting

targets

by 202

Jan 202

2 – Dec 202

Entrepreneur

Ent

repre

neu

rs are t

he he

art of

local ec

onomies, creati

ng jobs

and empowering

eople

Provi

de $15 b

illon o

f ﬁnancn

g to sm

all bus

ines

s clien

ts (B

usin

ess

Ban

king)

Jan 2020 – De

c 202

Provi

de $3 b

illon of ﬁ

nancn

g to micr

nanc

e inst

tuti

ons

Jan 2020 – Dec 2024

Commerce

de creates

jobs and con

tributes

to economies

by enabling people

connect acr

s borde

Ban

k 10,00

0 of our c

lient

s’ int

ern

aton

al and do

mest

ic net

s of

sup

plier

s and b

uyer

s thr

ough b

anki

ng the e

cos

yste

m progr

amme

Jan 2020 – De

c 202

Impact Finance

Inn

ovative ﬁ

nanca

l prod

uct

s and

partnerships can

help us solve

global de

velopment challenges

and i

mprove th

e lives o

f millo

in ou

r marke

Double sustainabl

e in

vestng assets under management from

tual

unds o

nly to a m

ore ho

list

c prop

osit

on incl

udng e

xchang

e trad

unds (E

TFs

), bon

ds, e

quit

es, s

tru

ctur

ed pro

duct

s, d

iscre

ton

rtfo

lio ma

ndat

es (DPMs

) a

nd ins

uranc

e-linke

d plan

s (ILPs

)

Jun 2021 – D

ec 2025

Integrate ESG

consideratons

in wealth management

adv

isory

activties

Jan 2021 – D

ec 2025

tainabli

ira

ton

456

Standard Chartered

– Ann

ual Rep

ort 202

Supplementar

informat

on

2022 Su

stainablit

y Aspiratons

Pillar two: Oper

ations

Theme

spiraton

arget Date

Peo

ple

r peo

ple are o

ur gre

ates

set

, and ou

r diver

st

y dr

ives

our business

success

Increase gender representation to

35% women in

senior roles

p 2016 – Dec 202

Inc

reas

e our ‘C

ultu

re of Inc

lusi

on’ scor

e to 8

4.5%

an 2020 – Dec 2024

Embed

an integ

rated

health a

nd well

being str

ategy

to su

pport

bui

ldng an

d re-s

killn

g a fut

ure-r

ead

, dive

e work

force

Jan 2020 – De

c 2022

Create Diversty & Inclusion Suppl

ier Plans

for all our mark

ets to support

40% o

f our n

ewly on

boa

rded s

uppli

ers b

eing di

ver

Jan 202

2 – Dec 202

ow our em

ployee M

y V

oice s

core to t

he qu

esti

on “the wa

y that w

erate d

ay-to

-day i

s align

ed wit

h our v

ison o

f being t

he wor

’

s mo

sus

tain

able an

d resp

onsi

ble ba

” fr

om 2021 ba

selin

e of 84% to 8

Jan 202

2 – Dec 2024

Sup

por

t at lea

st 50% o

f all emp

loyees t

o comp

lete o

ur lea

rnin

programme on Sust

ainablity

Sup

por

t at lea

st 70% of rel

evant em

ployee

s to com

plet

e our

Sustainab

le F

inance trainng program

Jan 202

2 – Dec 202

Environment

Redu

cing o

ur own im

pact on t

environment wil

l protect our planet

for t

he be

neﬁt of o

ur comm

unit

es

Redu

ce annu

al Sco

pe 1 & 2 gre

enho

use g

as emi

sson

s to net ze

by2025

Jan 201

9 – Dec 2025

Source all

energ

rom r

enewable

sources

Jan 2020 – De

c 2025

Achiev

e and mai

ntan ﬂig

ht emi

sson

s 28% lower t

han ou

r 2019 ba

selin

of 9

4,000 tonnes

Jan 2021 – D

ec 2023

Redu

ce wast

e per co

llea

gue to 4

0kg/F

TE/year

Jan 2020 – De

c 2025

Rec

ycle 90

% of wast

Jan 2020 – De

c 20

et all re

sidu

al emis

son

s fro

m our op

erat

ions (Sco

pe 1 and 2

, Sco

3 ﬂigh

, waste a

nd dat

a centr

), doub

ling ou

r avera

ge cos

t from $

in 2021 to $

15per t

onne i

n 20

Jan 202

2 – Dec 202

Conduct and Complia

nce

By pa

rtn

erin

g proa

ctive

ly and

fect

ivel

, we can dr

ive th

ght out

come

s for cli

ent

and commun

ites

ﬁnancal

crimes b

y contributng to

developing

ypologies and

red ﬂ

ags fo

r ﬁnanc

al ﬂows

, train

ng fr

ontli

ne sta

ff to i

dentf

y po

tent

ial

suspic

ous transactions

and partic

ati

ng in public

-priva

te partnerships

to sh

are int

ellge

nce an

d good p

ract

ices

Ongoing

Deve

lop and d

elive

r a targ

eted o

utre

ach pr

ogram

me, inc

ludn

thr

ough key in

ter

nato

nal pla

tfor

, aime

d at safe

ly and t

rans

pare

ntly

reducing barriers to c

apital mobilsation

for sustainable de

velopment

Jan 202

2 – Dec 2024

Pil

lar three: Communites

Theme

spiraton

arget Date

Communites

Everyone deser

es economic

opportunites that enable them

to learn, ear

n and gro

Inves

t 0.75% of pr

ior ye

ar ope

ratin

g proﬁt (PYOP) in our co

mmuni

tes

Ongoing

Rais

e $75 mil

lon for Fu

tur

emaker

s by Sta

ndard C

hart

ered

an 2019 – De

c 20

Educ

ation: Re

ach 1 mil

lon gir

ls and yo

ung wom

en th

rough G

oal

n 2006 – De

c 2023

Emp

loyabilt

: Reach 10

0,000 yo

ung p

eopl

Jan 201

9 – Dec 202

Inc

reas

e par

ticp

ation f

or emp

loyee vol

unte

eri

ng to 55%

Jan 2020 – Dec 202

457

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

Shareholder

nfor

mat

on

Divdend and interest payment dates

Ordinar

y shares

Final divdend

Results a

nd divde

nd announc

17 Feb

rua

y 2022

Ex-div

dend date

24 (UK) 2

3 (HK) F

ebru

y 2022

Record

date for divdend

25 Febr

uar

y 202

Last d

ate to a

mend cu

rre

ncy e

lect

ion ins

tru

cton

s for ca

sh div

den

12 Ap

ril 202

Divdend payment date

12 May 202

In e

ith

er US do

llar

s, s

ter

lin

g, or H

ong Kon

g dol

lar

Preference

1st h

alf yea

rly d

ivd

end

nd ha

lf yea

rly di

vd

end



per ce

nt non-

cumu

lati

ve irre

dee

mable p

refe

rence s

hare

s of £1 e

ach

1 Ap

ril 202

1 Oct

ober 202



r cent no

n-cum

ulat

ive irr

ede

emabl

e pref

eren

ce shar

es of £1 e

ach

1 Ap

ril 202

1 Oct

ober 202

6.4

09 pe

r cent n

on-cum

ulat

ive re

deem

able p

refer

ence s

hares o

f $5 eac

30 Januar

y and

30 Ap

ril 202

30 July a

30 O

ctobe

r 2022

.01

4 per cen

t non-

cumul

ative r

ede

emab

le pref

eren

ce shar

es of $5 e

ach

0 Janua

y 2022

0 Jul

y 20

Annual G

eneral Mee

ting

The A

nnual G

ene

ral Mee

ting (A

M) will b

e held on

nesda

y 4 May 202

2 at 11:00 U

K time (18:0

0 Hong Kon

tim

)

. Fur

ther d

etails r

egardi

ng the f

orma

t, lo

cation a

bus

ines

s to be tr

ansact

ed at th

e meet

ing wi

ll be dis

wit

hn the 202

2 Notic

e of A

tail

s of vot

ing a

t the C

omp

any’s AGM a

nd of pr

y vote

s cast c

be f

oun

d on th

e Com

pany

’s websi

te at

sc.com/

agm

Interim results

The i

nterm r

esult

s wil

l be anno

unced t

o the Lon

don St

ock

Exchange,

The Stock

xcha

nge of

Hong K

ong Lim

ted and

put o

n the Co

mpany

’

s web

site.

Countr

y-b

y-Count

ry Reporting

In acco

rdance w

ith th

e requ

iremen

ts of t

he Cap

ital

Requirements (

Countr

-by-Countr

y R

epor

ting

) Regulations

201

the Group will

publish addit

onal countr

y-b

y-countr

info

rmat

on in res

pect of t

he year e

nded 31 D

ecem

ber 2021,

on or b

efore 3

1 Decem

ber 202

2. W

e ha

ve also pu

blish

ed our

appr

oach to t

ax and t

ax poli

is inf

orm

ato

n wil

l be ava

ilab

le on t

he G

roup’s webs

ite at

c.com

Care

ShareCare is av

ailable to shareholders on the

ompan

’

s UK

reg

ister w

ho have a U

K addre

ss and b

ank acco

unt. I

t allows

you to h

old your S

tanda

rd Char

tere

d PL

C sha

res in a nom

inee

acco

unt. Y

r share

s will be h

eld in el

ectro

nic for

m so you wil

no lo

nger ha

ve to wor

y abou

t k

eep

ing your s

hare cer

tif

cate

saf

e. If you jon Sh

areCa

re, you wil

l still be i

nvted t

o atten

the C

ompa

ny’

s AGM an

d you will re

ceive any di

vden

d at the

sam

e time as eve

yone el

se. Shar

eCar

e is fre

e to jon and t

here

are no a

nnual f

ees to p

If yo

u woul

d like t

o rece

ive mo

re in

for

mat

on, p

lea

se vi

st ou

web

sit

e at

sc.com/

shareholders

contact the shareholder

helpline on

370 70

2 01

Donating shares to

ShareGift

Sha

rehol

der

s who ha

ve a small nu

mber o

f share

s ofte

n ﬁnd

it un

econo

mical to s

ell the

m. An alt

erna

tive is t

o consid

don

ating t

hem to t

he char

y Share

Gif

t (

regi

stere

d char

10526

), whic

h colle

cts do

natio

ns of unwan

ted sh

ares unt

the

re are en

ough to s

ell and us

es th

e proce

eds to s

uppor

UK ch

arite

s. Th

ere is no im

plcati

on for cap

ital gain

s tax

(

no g

ain or los

) when yo

u donat

e share

s to char

, and UK

tax

paye

rs ma

y be able t

o claim in

come ta

x relie

f on the val

of their donation.

Fur

the

r inf

orm

ato

n can b

e obta

ine

d fro

m the C

omp

any’s re

gis

trar

or f

rom S

hare

Gif

t on

0 7930 37

or f

rom

sharegift.org

Bankers

’ A

omated C

learing System (BA

CS)

Div

dend

s can be p

aid stra

ight into yo

ur bank o

r buildn

societ

account

Ple

ase r

egi

ste

r onli

ne at

inv

estorcentre.co.

contact our

gist

rar f

or a div

de

nd ma

ndat

e for

Regist

rars and sh

areholder enq

uires

If y

ou have an

y enquires

relating to y

our shareholdi

ng and

you ho

ld your sh

ares on t

he UK re

giste

, ple

ase co

ntact o

reg

istrar C

ompu

ter

share Inve

stor Se

vice

s PL

, The Pav

ilons

idgwat

er Road, B

rist

ol, BS9

9 6ZZ or c

all the sh

areho

lder

help

line nu

mber on 0370 7

02 013

If you ho

ld your s

hares o

n the Hon

g Kong bran

ch regi

ster an

you

have enq

uires, pl

ease contac

t Computershare Hong

Kong Invest

or Ser

ices Li

mted, 17

M Floo

, Hop

ewell Ce

ntre,

3 Quee

n’

s Roa

d East, W

an Chai

, Hong Kon

u can ch

eck yo

ur sh

areh

old

ing at

comput

ershare.com

/hk/inv

tors

458

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

Shareholder informaton

Substantial shareholders

The C

ompa

ny and it

s share

holde

rs ha

ve bee

n grante

d part

ial

exemp

tion f

rom the d

isclo

sure re

quire

ment

s und

er Part XV o

the S

ecur

ites a

nd Futu

res Ord

inance (SFO

). As a re

sult of t

his

exemption,

areholders no

longer have a

n obligaton under

Part X

V of the S

FO (

other t

han Di

vsio

ns 5, 11 an

d 12 ther

eof

) to

notif

y the

Company of s

ubstantial sharehol

ding interests, and

the C

omp

any is no lon

ger re

quired t

o maint

an a regi

ster of

interests of substantial shareholders under section 336 of the

SFO. The C

ompany i

s, however, requ

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held f

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ts o

f divd

ends by

Standard

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C. Shareholders and pr

ospe

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purchasers should consult an appropriate independent

professional adviser regarding

ax c

sequences of

investment in shares in light of their p

articular circumst

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incl

udng t

he eff

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ﬁnancal year

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under share d

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15 M

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.32c

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$11.7

405

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rim 200

8 O

ctob

er 2009

21.

23c/1

251

/HK$1.645304

13.87

799

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13 M

ay 2010

.80c/29

54233p/

HK$

3.4

78306

£17

.351/$26.2

Interim 2010

5 Oct

ober 20

3.3

5c/14.71618p/

K$1.8112

4/INR0.

98412

Final 2010

11 M

ay 2011

6.65c/

28.272513p

/HK$3.6

3404

/INR1.

997517

£15.

$25.649

Interim 2011

7 Octo

ber 2011

24.75c/15.81958125

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928909813/

INR1

13797125

£14.

127

/$23.

140

Final 201

15 Ma

y 2012

51.25

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/HK$3.

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$24.634

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11 O

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23c

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463/

INR1.3498

950

417

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14 M

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.77

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/INR2.

6283575

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.40

/$26.

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17 O

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4.0

737

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14 Ma

y 2014

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9211

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.815

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20 O

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28.80c/1

911072

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2.2340

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R1.6

71842560

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14 M

ay 2015

.20

c/37

85p/HK

.4332

/INR

5140

£9

.797

/$1

4.37

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19 Oct

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r 2015

14.40c

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985456

/IN

R0.86

139

372

£8.

5226/$13.

343

Final 2015

No divdend

declared

Interim 2016

No divdend declar

Final 2016

divdend declared

Interim 2017

No divdend declared

Final 2017

17 M

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11.00c

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/HK$

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93/

INR0

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£7

600

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Interim 2018

2 Octo

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51952

Final 2018

16 M

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5.00

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$1.17

626

/INR

691

650

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1 Octo

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uly 2020

Chine

se tran

slatio

If you wo

uld like a Chin

ese ver

sion o

f the 2021 Ann

ual Repo

please contact Computershare Hong K

ong Inv

stor

erv

Limt

ed, 17M F

loor, Hopewe

ll Cent

re, 18

3 Quee

n’

s Roa

d East,

an C

hai, Hong

Kong.

二〇二

一

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

號

合

和

中

心

樓

。

Shareholders on

the Hong K

ong branc

h register who hav

asked to receive corporate communicatons in either

Chinese or

English c

an change

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ele

ction

by contacting

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If th

ere is a dis

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ransl

ation a

nd the En

glish

ver

sion of t

his Ann

ual Repo

, the Eng

lish tex

t shall pr

evail.

Electr

onic

communicaton

If you h

old your s

hares o

n the UK re

gist

er and in f

utu

re you

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d like to rece

ive the A

nnual Re

port e

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ronicall

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gister o

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orcent

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Click o

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egist

er’ a

nd foll

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tru

cton

s. Y

ou will n

eed to

have yo

ur Shar

ehol

der or Sh

areC

are refe

rence n

umber t

han

d. Y

ou can ﬁnd t

his on you

r share ce

rtica

te or Sh

areCa

sta

temen

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ce you ha

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nd conﬁr

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email communicaton preference, you will receive future

not

catio

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y vote

onli

ne. In add

iton, a

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er of Inves

tor Cen

tre, you w

ill be

able to manage

your shareholding onli

ne and submit divdend

elections electronica

lly and c

ange

your bank mandate or

address informaton.

459

Standard Chartered

– Annu

al Repo

rt 2021

Supplementar

informat

on

Important notices

Forward-looking statement

This document may contain ‘for

rd-looking statement

s’

tha

t are bas

ed on cu

rren

t expe

ctatio

ns or be

lief

s, as we

ll as

sumpt

ions ab

out f

utu

re event

s. Th

ese fo

ward-loo

king

sta

temen

ts can b

e iden

tﬁed by the f

act tha

t they do n

relate only to

historcal or current

facts. For

ward

-looking

sta

temen

ts of

ten u

se word

s such as ‘ma

y’

, ‘could

’

, ‘wil

l’

, ‘expe

’

‘

inten

d’

, ‘esti

mate’

, ‘anti

cpate’

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beli

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, ‘

an’

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tainte

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the G

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ns and ob

ject

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tho

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ress

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led in th

e for

ward-l

ook

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emen

Recip

ent

s should not

place reliance on, a

nd are cautioned

abo

ut rel

ying on

, any for

ward-l

ooki

ng stat

emen

. There ar

severa

l factors which

could cause ac

ual

result

s to

dif

fer

mat

eriall

y fro

m thos

e expre

sse

d or imple

d in for

war

d-look

ing

statements. The factors that could cause ac

ual

result

s to

dif

fer ma

teria

lly fr

om thos

e des

cribe

d in the f

ward-lo

okin

sta

temen

ts in

clude (b

ut are n

ot limte

d to

): change

s in glob

al,

pol

itcal, e

conom

ic, bu

sines

s, co

mpet

itve and m

arket fo

rces

or con

diton

s; fu

ture exch

ange an

d intere

st rate

s; chang

es in

environmental,

social or physi

cal risks; legislatv

e, regulator

and p

olic

y develop

ment

s; the d

evelopm

ent of st

andar

and in

terp

retat

ons; th

e abilt

y of th

e Gro

up to mit

gate th

imp

act of clim

ate cha

nge ef

fect

ively

; risk

s ari

sng out o

f heal

cri

ss and p

andem

ics; cha

nges in t

ax rate

s, f

utur

e busin

ess

combinatons

or dispostions; and other

factor

s speci

c to

the G

roup. A

ny for

ward-lo

okin

g stat

ement co

ntain

ed in thi

doc

ument i

s bas

ed on pa

st or cur

rent t

rends a

nd/

r activ

ties

of th

e Grou

p and sh

ould no

t be taken a

s a repre

sent

ation t

hat

suc

h trend

s or acti

vtie

s will co

ntinu

e in the f

utu

re.

No st

ateme

nt in thi

s docum

ent is in

tend

ed to be a p

roﬁt

for

ecast o

r to impl

y that t

he ear

nings o

f the G

roup fo

r the

cur

rent yea

r or fu

ture ye

ars wi

ll nece

ssar

ily ma

tch or exce

the historcal

or published earnings of the Group.

Each

for

war

d-look

ing sta

teme

nt spe

aks on

ly as of t

he dat

e of the

part

icular statement

. Except as req

uired by an

y applicab

laws or regulations, the Group expressly discla

ms any

obligaton

to revise or update an

y for

ward

-looking statement

cont

ained w

ithn t

his doc

ument

, reg

ardles

s of wh

ethe

r thos

sta

temen

ts ar

e affe

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s a resul

t of new inf

orma

ton, f

utu

event

s or ot

her

se.

Financa

l instruments

Not

hing in t

his doc

ument s

hall con

stit

ute, in any ju

rsdi

cton,

an of

fer or s

olicta

tion to s

ell or p

urcha

se any secu

rite

s or

oth

er ﬁnan

cal inst

rum

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s, nor s

hall it co

nstit

ute a

recommendation or advice

in respect of an

y securites or

oth

er ﬁnan

cal inst

rum

ent

s or any oth

er matt

Caut

ion regar

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te and environme

related informaton

Som

e of th

e climat

e and envir

onmen

t relat

ed info

rmat

on in

thi

s docum

ent is su

bject t

o cert

ain limta

tions

, and th

erefo

the r

eade

r shou

ld trea

t the inf

orma

ton prov

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, as well as

conclusions, project

ons and assumptions drawn

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info

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on, wi

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on may b

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s, w

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lude (b

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)

a lack of

reliable data;

a lack of standardisat

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and future unce

tain

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sou

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•

Place

d T

p 100

Sus

tainablit

y indces

e pa

rticp

ate in th

e W

ork

force

Dis

closu

re Inita

tive an

d in 20

sco

red a top 1

0 per ce

nt resp

onse.

e pa

rticp

ate in th

e CDP Clim

ate

que

stion

nare, s

corin

g a B in 20

Fur

ther de

tail on o

ur indci

es and

anal

yst

s ratin

gs can be f

ound a

sc.com/ESGratings

Sus

tainablit

and comm

unity

engagement awa

ADB – T

SCFP Awards

•

Most Responsive Bank A

gainst

ID-

19 (

onﬁr

mng Ban

) Award

(

BT Banking A

wards

•

Best C

SR Bank (Bangladesh

)

China Sust

ainablity T

ribune

•

Sustainablity Development Solution

ard (

Chin

)

Community Chest A

wards

•

Charit

y Gol

d A

ward (Standard

Charte

red Singapore

)

CorpComms A

wards

•

Best Inte

rnational Cam

paign -

Zeronomics

•

Best Su

stainablit

y Campaign –

Zeronomics

The Economic

Obser

ver

•

Sustain

able F

ance Contrib

uton

ard (

Chin

)

The Ex

cellent Magazine

•

st Soci

al Inclu

sion (

aiwan

)

Global Brands

agaz

ine

•

Best C

SR Bank (Bangladesh

)

PRW

eek G

loba

l A

ward

•

st Glo

bal Co

ntent Award –

Oppor

tunit

y 2

030

PRCA C

ity & F

inan

cal Aw

ard

•

Best Strate

gic

Communicatons/

Corp

orate Brand Camp

aign –

Oppor

tunit

y 2

030

Singapore President

•

Com

munit

y Sp

irt Plat

inum Award

(Singapore

)

aiw

an Adv

ertisers

’ Associaton and

Brain Magazine

•

Best CSR

-Social E

ngagement – Silver

Award (Futur

emaker

s, T

aiwan

)

Standard Chartered

– Ann

ual Rep

t 2021

Supplementar

informat

on

lossar

ossa

Absolut

e ﬁnanced emisson

A measureme

nt of our a

ttributed sha

of our clients greenhouse gas emissons.

1 or Additonal T

ier 1 capital

Addit

onal T

ier 1 capi

tal con

sist

s of

instrument

s other than Common

Equit

y T

ier 1 th

at mee

t the Ca

pital

Requirements R

gulation

(

as it forms

par

t of UK do

mest

ic law

) c

riter

a for

incl

uson in T

ier 1 ca

pital.

dditonal v

alue adj

ustment

See Prudent valuation adjustment.

Adv

anced Int

ernal Rating

Based (AIRB

) approac

The A

IRB appro

ach un

der th

e Base

amewor

k is use

d to calcul

ate cre

dit

sk capita

l base

d on the G

rou

’

s ow

estimates of prudential parameters.

Alternat

e pe

rformance

measures

A ﬁnanc

al measure of historcal

ture ﬁnancal perfor

mance, ﬁnancal

pos

iton

, or cash ﬂow

s, ot

her th

an a

ﬁnanc

al meas

ure deﬁn

ed or speci

ed

in the applicable ﬁnancal rep

orting

amewor

ASE

soci

aton of S

out

h East As

ian Nati

ons

(ASE

AN) whi

ch inclu

des th

e Grou

’

operation

in Brunei, Indon

esia,

Malay

sia, Phil

pines, Singap

ore,

Thailand and Viet

nam.

UM or Asset

s under

management

otal ma

rket value o

f ass

ets s

uch as

dep

osit

s, s

ecur

ites an

d fun

ds hel

d by

the G

roup o

n beha

lf of the c

lient

Basel II

The capital

adequac

y framew

k issued

by the B

asel C

ommi

ttee o

n Bank

ing

Sup

son (BCBS) i

n June 200

6 in the

form of the International Conv

ergen

of Capital Me

asurement and Capi

tal

Standards.

Basel III

The global regulatory standards on

bank capital ade

quacy and liqudit

ignally i

ssu

ed in De

cembe

r 2010 and

upd

ated i

n June 2011

. In Dece

mber 2017

the BCBS published a

document setting

out t

he ﬁnal

satio

n of the B

asel I

framework

. The latest requirement

sued in D

ecem

ber 2017 wil

l be

implemented from 20

BCB

S or Basel C

ommitt

ee on

Banking Super

vison

A forum on banking supervisor

y matters

which dev

elops global super

visor

standard

s for the banking indu

str

s memb

ers a

re ofﬁca

ls fro

m 45 centra

banks or prudential super

visor

s from

27 co

untr

ies and t

err

itor

es.

Bas

ic earnings p

er share (EPS)

Repre

sent

s ear

nings d

ivde

d by the

basic weighted average

numb

of shares.

Bas

is point (bps

)

One h

undre

dth of a p

er cent (0.

per cent

); 100 basis points is 1 per c

ent

CRD or Capital R

quirements

Directv

A capita

l adequac

y legislatv

e package

ado

pted by t

he PR

A. CRD c

ompr

ises t

Capital Requirem

ents Direct

ve

and the

UK onshored Capital Requirement

Regulation (

CRR)

. The pack

age

impl

emen

ts th

e Bas

el III f

ramewor

together with transitonal arrangements

for s

ome of it

s re

quirem

ent

s. CRD IV

came i

nto forc

e on 1 Janu

y 2014. Th

EU CRR II an

d CRD V amen

ding th

existng pack

age came into for

ce in

June 2

019 with most

changes starting

to app

ly fr

om 28 Jun

e 20

1. Onl

y thos

par

ts o

f the EU CRR I

I that ap

plied o

or before 31 December 2

020

, when

the U

K was a mem

ber of t

he EU, have

been implemented. The PRA recently

ﬁnal

sed th

e UK’

s ve

rsio

n of the C

RR II

for implementaton

on 1 Januar

y 2

022.

Capital-lit

e income

Inco

me der

ived f

rom pro

duct

s wit

h low

A consumption or products which

are no

n-fun

ding in n

ature

Capi

tal resources

Sum o

f T

r 1 and T

ier 2 capit

al aft

regulator

y adjustments.

CGU or Cash-gen

erating unit

The smallest i

dentﬁa

ble group

of assets

tha

t gener

ates ca

sh inﬂows t

hat are

largely independent of

the cash inﬂows

fro

m othe

r ass

ets o

r group

s of ass

Cash shortfall

The d

iffe

rence b

ween t

he cash ﬂow

tha

t are due in a

ccorda

nce wit

h the

cont

ractu

al ter

ms of th

e inst

rum

ent and

the c

ash ﬂows t

hat th

e Grou

p expe

cts

to re

ceive over t

he cont

ractu

al life of

the instrument

Clawback

An am

ount an in

dvid

ual is re

quire

d to

y back to t

he Gr

oup, whic

h has to b

ret

urne

d to th

e Grou

p under c

erta

circumstan

ces.

Commerc

ial real esta

Includes ofﬁce bui

ldngs, industral

propert

cal centres, hotels,

retail store

s, shopping centr

es, farm

land, mult

-famil

y housing buildngs

warehous

es, garages

, and industral

properties

ommercial

real estate loans

are th

ose b

acked by a pa

ckage of

comm

ercial r

eal est

ate as

set

T1 or Com

mon Equit

y Tier 1

capital

Com

mon Equi

ty T

ier 1 ca

pital co

nsist

of th

e commo

n share

s issu

ed by the

Group and related shar

e premium,

retaine

d earnings, accu

mulated othe

comprehensive income and

her

disclosed reser

ves, el

igble non-

controlling

interest

s and

regulator

adjustment

s required in the calculation

of Co

mmon Equ

y T

er 1.

T1 rat

A me

asure o

f the G

roup

’s CET

1 capit

as a p

ercent

age of r

isk

-we

ighte

d asse

Contract

ual maturity

Con

tract

ual mat

uri

ty r

efer

s to the

ﬁnal p

aym

ent dat

e of a loan o

r othe

ﬁnan

cal inst

rum

ent

, at which p

oint all

the remainng ou

tstandin

g princpal

and in

teres

t is due t

o be paid

463

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

Countercyclical

capital buffer

The counte

rcyclical capital buff

(

CCyB

) is p

art of a s

et of

macroprudential instru

ments, designed

to he

lp count

er pro

cyclica

lt

y in the

ﬁnan

cal sys

tem. CCyB as de

ﬁned in

the B

ase

l III stan

dard prov

ides f

or an

additonal

capital requirement of

up to

5 per ce

nt of ri

-wei

ghted a

sse

ts in a

give

n jurs

dicton

. The B

ank of Eng

land

’

Financ

al Polic

y Commi

ttee h

as the

power t

o set th

e CC

yB r

ate for t

Unit

ed Kin

gdom

. Each bank m

ust

calculate it

s ‘inst

tution-specif

c’ CC

rate

, deﬁne

d as the we

ighte

d averag

of th

e CC

yB r

ates in ef

ct acros

s the

jursdictons in which it has credit

expo

sures

. The instt

ution-s

pecif

c

B rate is t

hen app

lied to a b

ank

’s

total risk

-weig

hted assets

Counterparty cre

dit

risk

The risk that a

counterpart

y defaults

before satisf

yng i

s obligat

der

a der

ivat

ve, a secu

rite

s ﬁnancng

transaction (

T) or a sim

lar contract.

CCF or Credit con

version factor

An estima

te of the amo

unt the

rou

exp

ect

s a custo

mer to h

ave draw

rth

er on a fac

ilt

y limt at th

e point o

def

ault

. This is e

ither p

rescr

ibe

d by CRR

or mo

delle

d by the b

ank.

CDS o

r Credit de

fault swaps

A cre

dit der

ivatve i

s an arran

geme

whe

reby th

e credit r

isk of an a

sse

t (

the

ref

erence a

sse

) is t

ransf

erre

d from t

yer to th

e selle

r of prot

ectio

n. A cre

dit

def

ault s

wap is a cont

ract wh

ere the

protection seller receives

premium or

interest

rel

ated payments in return for

cont

racti

ng to make p

ayme

nts t

o the

prot

ecti

on buye

r upon a d

eﬁned cr

edit

event

. Credi

t event

s norm

ally in

clude

bankruptc

, payment default

a ref

erence a

sse

t or ass

s, or

down

grade

s by a ratin

g agenc

Credi

t insttu

tions

An in

sttu

tion w

hose b

usine

ss is to

rec

eive dep

osit

s or ot

her rep

ayabl

nds f

rom th

e public a

nd to gran

cre

dits f

or it

s own acco

unt.

Cre

dit risk mit

gation

Cre

dit ris

k mitga

tion is a p

roces

s to

mit

gate po

tent

ial cred

it los

ses fr

om any

given ac

count, customer or portfolio b

usin

g a range o

f tool

s such a

s collat

eral,

nettin

g agreement

s, credit insuran

ce,

credit der

ivatves and guarantees

A or Cre

dit v

luation

adjust

ment

An ad

justm

ent to t

he fair val

ue of

der

ivat

ve contra

cts t

hat reﬂe

cts t

pos

sibli

ty t

hat th

e count

erpa

y may

default such

that the Group would

not r

eceive t

he f

ull mar

ket value of

the contracts.

Customer account

Mon

ey depo

site

d by all indv

idual

and co

mpani

es whic

h are not cr

edit

insttutions includ

ng securites sold

under repurchase agreement (

see repo

rever

se rep

)

. Su

ch fu

nds are r

ecord

as liablites in the Grou

’

s balance she

under customer ac

counts.

Days

past due

One o

r more d

ays th

at inte

rest an

princ

pal payments a

re ov

erdue based

on th

e contr

actua

l term

A or Debi

t v

aluat

ion

adjust

ment

An ad

justm

ent to t

he fair val

ue of

der

ivat

ve contra

cts t

hat reﬂe

cts t

pos

sibli

ty t

hat th

e Grou

p may de

fault

and n

ot pay t

he f

ull mar

ket value of

contracts.

Debt securites

Deb

t secu

rite

s are ass

s on the G

roup

’s

balance she

et and represent cer

tifcat

of in

debte

dnes

s of cre

dit inst

tuti

ons

public bodi

es or other undertakings

exclu

ding th

ose is

sued by ce

ntral b

anks

Debt s

ecurite

s in iss

Deb

t secu

rite

s in issu

e are tra

nsfer

able

certifcates of

indebtedness of

the

Gro

up to th

e bear

er of th

e cert

if

cate.

The

se are lia

blite

s of the G

roup an

include certifcates of deposits.

Deferred tax asset

Inco

me taxe

s recoverab

le in f

utur

periods in respect of

deductible

temporar

y differences between the

acco

untin

g and ta

x base o

f an ass

et or

liabl

y that w

ill resu

lt in tax d

educt

ible

amo

unt

s in fu

ture p

erio

ds, th

e carr

for

war

d of tax l

osse

s or the c

arr

for

war

d of unu

sed ta

x credit

Deferre

d tax liablity

Inco

me taxe

s payabl

e in fu

ture p

erio

in respect of

able temporar

diffe

rences bet

ween the account

ing

and t

ax bas

e of an as

set or li

ablit

tha

t will re

sult in ta

xable am

ount

s in

fut

ure periods.

Default

Financ

al asset

s in default

represent

tho

se tha

t are at le

ast 90 da

ys pa

due i

n respe

ct of pr

incpal o

r inter

est

and/

or wh

ere the a

sse

ts ar

e other

ise

considered to be

unlikely to pay

includng those that are credit

-impa

red.

Deﬁned beneﬁt obligaton

The p

rese

nt value of e

xpec

ted f

utur

payments required

to settle the

obligatons of

a deﬁned beneﬁt scheme

resulting from employ

e service.

Deﬁned beneﬁt

scheme

Pension or other post

-retirement

beneﬁt

scheme other

than a deﬁned

contribut

on scheme.

Deﬁned contributon scheme

A pension or other post

-retirement

beneﬁt scheme where the emplo

yer

’

obligaton

is limted to its contributons

to the fund.

Delinquency

A debt or

her

ﬁnanca

l obligaton is

con

sidere

d to be in a s

tate of

delinquency when paym

ents are

overdue. Loans and advances are

considered to be

delinquent when

consecu

tive payments a

re m

issed.

Als

o know

n as arre

ars

Deposits b

y banks

Deposit

by banks comprise amounts

owed to o

ther d

omes

tic or fo

reign

cre

dit inst

tuti

ons by th

e Grou

p inclu

dng

curit

es sol

d under r

epo.

Dilut

ed earning

s per shar

e (EPS)

Repre

sent

s ear

nings d

ivde

d by the

weighted av

erage number of shares

tha

t would h

ave bee

n out

stan

ding

sumin

g the conver

sion o

f all dilu

tve

poten

tial ordinar

y shares.

Divdend per share

Represents the entitlement of each

sha

rehol

der in th

e share o

f the pro

ﬁts

of th

e Comp

any

. Cal

culat

ed in the

lowes

t unit of cu

rren

cy in wh

ich the

shares a

re quoted.

464

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

lossar

Early aler

t, pur

ely and non

purely precautionar

A bor

rower

’

s ac

count w

hich exh

ibts

sks or p

oten

tial wea

knes

ses o

f a

material natu

requirng closer

monitorng, super

vis

on, or attention

management. W

eaknesses i

n such a

borrower’

s account, if left uncorrected,

could result

in deterioraton of

repayment

prospects an

d the lik

elh

ood

of be

ing dow

ngrade

d to cre

dit grad

e 12

or wor

se. Wh

en an acco

unt is on e

arl

aler

t, it i

s clas

sif

ed a

s eithe

r purel

precautionar

y or

non-purely

precautionar

. A

urely

precautionar

acco

unt is on

e that ex

hibt

s ear

aler

t char

acter

istc

s, bu

t thes

e do not

present any

immnent credit concern.

If the symptoms present an imm

nent

cre

dit conce

rn, an a

ccount w

ill be

considered for c

lassif

c

ation as non

purely precautionar

Effectiv

e tax

rate

The t

ax on pr

oﬁt/ (los

ses

) on o

rdinar

acti

vti

es as a pe

rcenta

ge of pro

ﬁt/

(los

)

on ordinar

y activties before taxation.

Encumbered as

sets

On-balance

she

asset

s pledged or

use

d as coll

ateral i

n resp

ect of cer

tain

of th

e Grou

’

s li

ablite

EU or Europ

ean Union

The Eu

ropea

n Union (EU) i

s a polit

cal

and e

conom

ic union o

f 27 mem

ber

sta

tes th

at are loc

ated pr

imar

ly

in E

urope.

Eur

ozone

Repre

sent

s the 19 E

U count

ries t

hat

have a

dopt

ed the e

uro as t

heir

common currency

ECL or E

xpect

ed cred

it loss

Represents the present value

exp

ecte

d cash sh

ort

falls over t

res

idual te

rm of a ﬁn

ancal as

set

undrawn commitment or

ﬁnancal guarante

Expected loss

The G

roup m

eas

ure of ant

icpat

loss for exposures ca

ured under

an int

erna

l rating

s-base

d credi

t risk

approach for

capital adequacy

calcu

latio

ns. I

t is mea

sured a

s the

Group-modelled view of

anticpated

los

s bas

ed on pro

babilt

y o

f defau

lt, lo

given default

and exposure at default,

wit

h a one-yea

r time ho

rizon

Exposures

Credit exposures represent the amount

len

t to a custo

mer, toget

her wi

th any

undrawn commitments

EAD or Exposur

e at

default

The e

stim

aton of t

he exte

nt to whi

the G

roup m

ay be e

xpos

ed to a

cust

omer o

r count

erpa

y in th

e event of

and at t

he tim

e of

, th

at coun

terp

art

’

default. At defaul

t, the customer may

not h

ave dra

wn the l

oan f

ully or m

alre

ady ha

ve repai

d some o

f the

pri

ncpal, s

o that e

xpos

ure is t

ypi

cally

les

s than t

he appr

oved loan li

mt.

ECAI or E

xternal Cr

edit

sessme

nt Instit

uton

xter

nal cre

dit rati

ngs are u

sed to a

ssign

risk

-weights under the sta

ndardised

approach for sovereigns, corporates

and insttu

tions. The exte

rnal ratings

are from credit rating agencies that are

registe

red or certif

ed in accordance

wit

h the cre

dit rat

ing age

ncies

regulation or from a

central bank issung

cre

dit ratin

gs whi

ch is exemp

t from t

applicat

on of this regulation.

ESG

Environment

, Social and Governan

ce.

FCA or

Financal Conduct

The F

inancal

onduc

t Authorit

regulates the conduct

of ﬁnancal

ﬁrms and, for certain ﬁ

ms, prudential

stan

dards i

n the UK

. It ha

s a strat

egic

obje

ctve to e

nsure t

hat th

e relevan

markets function well.

Forbearance

Forbe

arance takes place when a

concession is made

to the contractual

ter

ms of a lo

an in res

pons

e to an

obligor

’

s ﬁnancal diff

cultie

s. The Group

cla

ssif

es s

uch mo

dif

ed loa

ns as eit

her

‘Fo

rbor

ne – no

t impare

d loan

s’ or ‘Lo

ans

subjec

t to forbea

rance –

impared’

. Once

a loa

n is cate

gori

sed as e

ither o

f thes

it wil

l remain i

n one of t

hese t

cate

gor

ies unt

il the lo

an mat

ures or

satisf

es

‘curing

’ condit

described

in No

te 8 to th

e ﬁnancal s

tatem

ent

Forborne – n

ot impare

d loans

Loan

s wher

e the con

tract

ual ter

have b

een m

odif

ed d

ue to ﬁnan

cal

dif

f

cultie

s of the b

orrowe

, bu

t the lo

is no

t consi

dered t

o be imp

ared. S

‘Forb

earance’

ded

unfunded exposures

Exp

osures

where the notional

amount

of the transaction

is f

unded or

unfunde

Represents exposures where

a comm

itmen

t to provi

de fu

ture f

und

ing

is ma

de but f

und

s have be

en rel

ease

not released.

A or Funding valuat

ion

adjust

ment

A r

eﬂect

s an adj

ustme

nt to fai

r value

in res

pect o

f deri

vatve con

tract

s th

reﬂe

cts t

he fu

nding co

s that th

mar

ket par

ticpan

t would in

corp

orate

whe

n dete

rminn

g an exit pr

ice.

G-SIB

s or Global S

ystemically

Importan

t Banks

Glob

al banking ﬁnancal insttu

tions

whose size, complexity and systemic

interco

nnectedness mean

that their

distress or failur

e would cause sign

ﬁc

ant

disrupton to the wider

ﬁnancal system

and e

conom

ic acti

vt

. Th

e list of

G-SI

Bs is as

ses

sed un

der a fr

amewor

est

ablish

ed by the F

SB and th

e BCBS

In th

e UK, t

he G-SI

B fram

ework is

impl

emen

ted vi

a the CRD an

d G-SIB

are referred to as Global S

ystemically

Important Institutons (

G-SIIs

)

G-SIB buffer

A CE

T1 cap

ital bu

ffer w

hich re

sult

s fro

des

ignat

on as a G-SI

B. The G

-SIB buf

fer

is be

ween 1 pe

r cent and 3

.5 p

er cent

dep

endin

g on the al

locat

ion to on

e of

ﬁve bu

ckets b

ase

d on the an

nual

sco

ring. I

n the UK

, th

e G-SIB bu

ffe

r is

impl

emen

ted vi

a the CRD a

s Glob

Systemica

lly Impor

tant

Institutons

(

G-SII)

uffer requirement

Green and

Sustainabl

e P

roduct

amew

ork

Sets out underlying eligble qual

yng

themes and

activties that may

consider

ed green, social or sust

ainable.

Thi

s has be

en co-a

utho

red wi

th a third

part

y verif

er (Sustainalytc

) and has

en infor

med by in

dust

y and

super

visor

y princ

ples and standards

suc

h as the G

reen B

ond Pr

incple

s and

EU T

axonomy

Hong K

ong regional hub

Standard

Chartered Bank (

Hong K

ong)

Lim

ted and

its subsid

aries includng

the prim

y operating entite

s in

ina,

Korea and T

wan. Standard Charte

red

C i

s the ult

imat

e paren

t company o

Standard

Chartered Bank (

Hong K

ong)

Limte

Interest

rate risk

The r

isk of a

n adver

se imp

act on th

Gro

’s income s

tatem

ent du

e to

changes i

n interest ra

tes

IRB or internal ratings-based

approach

Risk

-weightng me

thodolo

gy in

acco

rdance w

ith th

e Bas

el Capit

Accord where capital requirements

are b

ased o

n a ﬁrm’s o

wn es

timat

of prudential parameters.

465

Standard Chartered

– Ann

ual Rep

t 2021

Supplementar

informat

on

Internal model approach

The a

pproa

ch use

d to calcul

ate mar

ket

sk capita

l and RW

A with an in

tern

mar

ket ris

k mode

l approved by t

he PR

und

er the t

erms o

f CRD

RR.

IAS or International

Accounting Stan

dard

A stan

dard th

at for

ms par

t of th

Intern

ational Financal Reporting

Standard

s framework

IASB or International

Accounting Stan

dards Boar

An independen

t standa

rd-setting body

responsible for the de

velopment and

publicaton of IFRS

, and approving

interpretaton

s of

IFRS standards

tha

t are reco

mmen

ded by th

e IFRS

Interpretations Committee (IFRIC)

IFRS or

Int

ernational Fi

ancal

Reporting S

tandards

A set o

f inter

nato

nal acco

untin

stan

dards d

evelop

ed and is

sue

d by the

International

Accounting

Standards

Board, consistng of princ

ples-

based

guidance contain

ed withn IFRSs and

IASs. All c

ompanies that hav

e issued

pub

licly t

rade

d secur

ites i

n the EU are

require

d to prepare annual and interm

rep

ort

s und

er IFRS an

d IAS st

andard

tha

t have be

en end

ors

ed by the EU.

IFRI

The IFRS Interpretation

s Committee

sup

port

s th

e IASB in p

rovidn

authoritatve guidanc

e on the

accounting

treatment of issues

not

spe

cif

cally d

ealt wi

th by exis

tng IFR

and IASs.

Inve

t g

A deb

t secur

, tr

easur

y bill or s

imlar

ins

tru

ment wi

th a cred

it ratin

asure

d by exter

nal age

ncies o

A to BBB

verage ratio

A rat

io intro

duce

d under C

RD IV

tha

t compa

res T

ier 1 capit

al to tot

exposures, incl

udng

certain exposures

hel

d off

-b

alanc

e shee

t as adju

sted by

stipulated credit c

onversion factors.

Inte

nded t

o be a sim

ple, no

n-risk-base

backstop measure.

Liqudat

ion port

folio

A por

tfo

lio of as

set

s whic

h is beyond o

cur

rent r

isk app

etite m

etr

ics and i

s held

for liqu

dation.

LCR or Liqudit

y co

verage rat

The r

atio of t

he sto

ck of high-

qualit

liqu

d asse

ts t

o expe

cted ne

t cash

out

ﬂows over th

e follow

ing 30 da

ys.

High-quali

y liqud

ssets should be

unencum

bered, liqud in market

s during

a tim

e of stre

ss and

, ideall

, be ce

ntral

bank elig

ble.

Loan e

xposure

Loans and advances to cust

omers

reported on the balance sheet

eld

at amo

rti

sed co

st or F

CI, no

cancellable cre

dit commitment

s and

cancellable

credit commitments for

credit cards and overdraft facilties

Loans a

nd advances to

customer

This represents lending made under

bilateral agreements with customers

ent

ered in

to in the n

orma

l cour

se of

bus

ines

s and is b

ased o

n the le

gal for

of the instrument.

Loans a

nd advances to ban

Amo

unt

s loan

ed to cre

dit ins

ttut

ions

includ

ng securites bought

under

Revers

e repo.

V or loan-

to-v

ue ratio

A calcu

latio

n which e

xpres

ses t

amo

unt of a ﬁr

st mor

tga

ge lien a

s a

percentage of the total appr

ais

value o

f real pr

oper

. The l

oan-to

value r

atio is u

sed in d

eter

minng th

appr

opri

ate level o

f risk fo

r the lo

and t

heref

ore the c

orre

ct pric

e of the

loa

n to the b

orrowe

Loans past due

Loan

s on

which paymen

ts have

been

due f

or up to a m

aximu

m of 90 da

incl

udng t

hose on w

hich p

artia

ymen

ts are b

eing m

ade.

Loans sub

ject to forbearanc

e –

impa

red

Loan

s wher

e the terms

have been

renegotiated on terms not consistent

wit

h curre

nt mar

ket levels d

ue to

ﬁnan

cal dif

fcu

ltie

s of the b

orrower.

Loans in this categ

y are

neces

sarily

impa

red. See ‘F

orbearance

’

Loss rate

Use

s an adjus

ted gro

ss cha

rge-o

ff rat

developed usi

ng monthly write-off and

recove

ries over t

he pre

cedin

g 12 mont

and total out

standing b

alances.

D or Loss giv

en default

The p

ercen

tage of a

n expo

sure th

at a

len

der exp

ect

s to los

e in the even

t of

obligor default.

Low return

ing client

See ‘Perennial sub-optimal cl

ient

s’

Malus

An ar

range

ment t

hat per

mit

s the G

roup

to pr

event vest

ing of all o

r part o

f the

amount of an

unvested va

riable

rem

unerat

ion awa

rd, due t

o a speci

fc

ystallised

risk, behav

iour

, conduc

t or

adverse performanc

e outcome.

Master netting

agreement

An ag

reeme

nt bet

en t

counterparties that have multiple

der

ivat

ve contra

cts w

ith ea

ch othe

tha

t provid

es for t

he net se

ttle

ment o

all con

tract

s thr

ough a sin

gle pa

ymen

in a sin

gle cur

renc

, in th

e event of

default on, or

ter

minat

on of

, any

one contract.

Mezzanine capit

nanc

ng that combines

debt and

equit

characteristcs. For

example,

a loa

n that al

so conf

ers s

ome pro

ﬁt

particpation to

the lender

MREL or minmum requirement

for own fund

s and eligble

liablites

A requirement under the Bank

Recover

and Res

olut

ion Dire

ctve fo

r EU

resolution authorites to set

a minmum

req

uirem

ent for ow

n fun

ds and el

igble

liabli

tes for banks

, implement

ng the

FSB’

s T

otal Loss

Abs

orbi

ng Capacity

(TL

C) standard. MRE

L is intended

ens

ure th

at ther

e is suf

ﬁcent eq

uit

y and

spe

cif

c t

ype

s of liabli

tes to fa

ciltat

an ord

erly r

esol

ution t

hat min

mises a

imp

act on ﬁna

ncal stab

ilt

y and en

sures

the c

ontin

ut

y of crit

cal fu

nctio

ns and

avoi

ds exp

osing t

axpa

yers t

o loss

Net a

sset value (NA

V) p

er share

Ratio o

f net as

set

s (

tal as

set

s less t

otal

liablites

) to the number of ordin

shares outstandi

ng at the end

of a

reporting

period.

Net e

xposure

The a

ggreg

ate of lo

ans an

d advanc

to cus

tome

rs/loan

s and ad

vances to

banks after imparment provisons,

restr

icted balances wit

h central banks

der

ivat

ves (

net o

f mast

er nett

ing

agreements

investment debt and

equ

y secu

rite

s, and l

etter

s of cr

edit

and guarante

es.

t Zero

The a

im of rea

ching ne

t zero car

bon

emissons from our opera

tions by

2025

and f

rom ou

r ﬁnancng by 20

50.

NII or N

et intere

st incom

The difference bet

ween i

erest

rec

eived on a

sse

ts an

d inter

est pai

on liablites.

466

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

lossar

NSFR or N

et stable f

unding r

atio

The ratio of

ailable stable funding to

req

uired s

table f

undi

ng over a one

-year

time horiz

on, assuming a

stressed

sce

nario. I

t is a long

-te

rm liqu

dit

asure d

esign

ed to res

train t

amo

unt of w

holes

ale bo

rrowin

g and

encourage stable

unding o

ver a

one-year

time horizon.

NPLs or non-p

erforming loans

An NPL i

s any loan th

at is mo

re than

90 da

ys pas

t due or i

s othe

wise

indvidually i

mpared. This

excludes

Retail l

oans r

eneg

otiat

ed at or af

ter

90 da

ys pas

t due, b

ut on whi

ch ther

has b

een n

o defau

lt in inte

rest or

pri

ncpal p

aym

ent

s for mor

e than 1

days since ren

egotiaton

, and against

whi

ch no los

s of pri

ncpal is e

xpe

cted.

Non-lin

earty

Non-

linearty of

expected cr

edit

loss

occurs

when the av

erage of

expected

cre

dit los

s for a po

rtfo

lio is hig

her tha

the b

ase ca

se (

dian

) du

e to the f

act

that bad economic

environment

could

have a la

rger impact on E

CL calc

ulation

than good economic environment.

Norma

lised ite

See ‘Underlying/Normalised’ on

page 85.

Operating expenses

Staff and premises costs, general and

adminstrative expense

s, depreciaton

and amortisaton. Underlying operating

expenses

clude

expenses as

descr

ibed in ‘Under

lying ear

nings’

A rec

oncil

ation between un

derlying

and statu

tor

y earnings is contain

ed in

Note 2 to

the ﬁnanc

al statements.

Operating income or

operating proﬁt

Net i

ntere

st, ne

t fee an

d net tra

ding

inco

me, as wel

l as oth

er ope

rating

income.

Underlying operating i

ncome

repr

esen

ts th

e incom

e line ite

ms above,

on a

n unde

rlying basis. See

‘Underlying

earnin

gs’

C or Ov

er-the

-counter

deriv

v

A bilateral transaction (

e.g.

derivatves

)

tha

t is not exch

ange t

raded a

nd that i

valued using

valuation models.

OCA or O

wn cre

dit adjust

ment

An ad

justm

ent to t

he Gro

’

s is

sued

deb

t design

ated a

t fair valu

e throu

proﬁt o

r loss t

hat reﬂ

ect

s the po

ssibl

tha

t the G

roup ma

y defa

ult and n

ot pay

the f

ull m

arket valu

e of the co

ntra

cts

Perennial

ub-opt

imal

clients

Clien

ts t

hat ha

ve retur

ned b

elow 3%

ret

urn on r

isk-weighte

d asse

ts f

or the

las

t thre

e years

ysic

al risks

The r

isk of i

ncrea

sed ex

treme we

athe

event

s incl

udng ﬂo

od, dro

ught an

d sea

level

ise.

Pill

ar 1

The ﬁ

rst pil

lar of th

e thre

e pillar

s of th

sel fr

amewor

k which p

rovide

s the

approach to

calculation of the min

mum

capital requirem

ents for cre

dit, market

and operat

ional risk

. Minmum capital

req

uirem

ent

s are 8 per ce

nt of th

Group

’

s risk

-wei

ghted assets

Pill

ar 2

The s

econ

d pillar of t

he thr

ee pilla

rs of

the B

ase

l fram

ework wh

ich req

uires

banks to undertake a comprehensive

sess

ment o

f their r

isk

s and to

determine the appropriate amounts

of cap

ital to b

e held ag

ainst t

hese

risks where other suitable mitgants

are not available.

Pill

ar 3

The t

hird pill

ar of th

e three p

illar

s of

the B

ase

l fram

ework wh

ich aims t

provide a

consistent and comprehensive

dis

closu

re fram

ework t

hat enh

ances

comparabilt

y bet

ween bank

s and

fur

ther promotes impr

ovement

risk practices.

Priorty B

anking

Prio

rt

y Ban

king cu

stome

rs are

indviduals

who have met

certain

critera for deposits, A

UM, mort

gage

loa

ns or mo

nthly p

ayr

oll. Cr

itera va

ries

countr

iva

e e

y i

nves

Equit

y se

curi

tes in op

erat

ing comp

anies

gen

erally n

ot quo

ted on a p

ublic

exchan

ge. Invest

ment in p

rivat

e equit

ten invol

ves the inves

tmen

t of capit

in pr

ivate co

mpanie

s. Ca

pital fo

r priva

equ

y investm

ent is rai

sed by re

tail or

ins

ttut

ional inve

stor

s and us

ed to f

und

inv

stment strategies such

as leveraged

yout

s, vent

ure cap

ital, grow

capital, distre

ssed investment

s and

mez

zanine capital.

PD or P

robabilty of default

PD is an in

tern

al esti

mate fo

r each

bor

rower gra

de of th

e likelhoo

d that

an obligor

l default on an obl

igaton

over a give

n time h

orizon

Probabilt

y w

eight

Obtained b

y considerng

the values the

met

ric can a

ssum

e, weight

ed by the

probabil

y of each v

alue occurring.

Proﬁt (los

) attrib

utable t

ordinar

y shareholders

Proﬁt (lo

) for t

he year af

ter n

on-

controlling int

erests and div

dends

declared in respect of preference

sha

res cla

ssif

ed a

s equi

ty.

A or Prudent v

aluation

adjust

ment

An ad

justm

ent to CE

1 capital t

o reﬂect

the dif

ference bet

ween fair value and

prudent value positons, where the

appl

icaton o

f pru

dence r

esult

s in a

lower ab

solu

te carr

ing valu

e than

reco

gnis

ed in th

e ﬁnancal s

tatem

ent

PRA or Prudential R

egulation

The Prudential R

egulation Authorit

y is

the statutor

y body responsible for

prudential super

vison of banks, buildng

cietes

, cred

it union

s, in

surer

s and a

small number of sig

nﬁcant in

vestment

ﬁrm

s in the U

K. Th

e PRA i

s a part o

f the

Bank of England

venue-based carbon intenst

A me

asure

ment of t

he qua

ntit

y of

greenhouse gases emitted by our cl

ient

per U

SD of the

ir revenue

Regulatory consolidat

on

The regulator

y c

solidat

on of

Standard Char

tered PL

C dif

fers fro

the s

tatu

tor

y con

solid

aton in t

hat it

incl

udes A

scen

ta IV

, Olea G

loba

l Pte.

Ltd, Seyc

helles International Mercantile

Bankin

g Corporat

ion Limted., and

all of t

he leg

al enti

tes in th

e Curr

enc

Fair g

roup on a proportionate

consolidaton basis. These entites are

considered as

sociates for statutor

accounti

ng purposes.

The regulator

y c

solidat

on f

urther

exclu

des th

e follow

ing ent

ites

, which

are consolidated

for statutor

acco

untin

g purp

ose

s; Autumn L

ife

Pte. Lt

d., Car

dspal Pt

e. Ltd. D

iscover

echno

logy S

ces Pte. Lt

d, Nexco Pte.

Ltd, S

CV Rese

arch and D

evelop

ment

Pte. Ltd., Standard Char

tered As

surance

Limted, Stan

dard Chartered In

surance

Lim

ted, Corrasi

Cover

ed Bonds

LLP

Pegasus De

almaking Pte. Ltd., Standard

Char

tere

d Bot

swan

a Educat

ion T

rus

Standard Char

tered Banca

ssurance

Interm

ediar

y Limted, Standard

Charte

red Bank Insurance Agenc

(Proprietar

) Limted

, Standard

Charte

red Research and T

chnology

Indi

a Privat

e Limte

d, Stan

dard

Charte

red T

radin

g (

Shan

ghai

) Limted.

Standard Chartered

– Ann

ual Rep

t 2021

Supplementar

informat

on

Repo

rev

se repo

A rep

urcha

se agre

ement o

r repo i

s a

short

-term funding agreement, which

allow

s a borr

ower to se

ll a ﬁnancal

set

, such as a

sse

-b

acked s

ecur

ites or

government bonds as col

ateral

for

cash

. As p

art of t

he agre

emen

t the

bor

rower agr

ees to r

epurc

hase t

curit

y at s

ome lat

er dat

e, usual

ly les

tha

n 30 day

s, rep

ayin

g the pr

ocee

ds of

the l

oan. Fo

r the p

art

y on th

e othe

r end

of the

transaction (

ying

the securit

and a

greein

g to sell i

n the f

utur

)

, it is

a rever

se rep

urcha

se agre

emen

t or

rever

se rep

Residental mortgage

A loa

n to purc

hase a re

siden

tal

prop

ert

y w

hich is t

hen use

d as coll

atera

to gu

arante

e repa

yme

nt of the l

oan.

The b

orrowe

r gives t

he lend

er a lien

agai

nst th

e prope

, an

d the len

der can

for

eclos

e on the p

roper

y if the b

orrowe

doe

s not re

pay th

e loan p

er the a

greed

ter

ms. A

lso k

nown as a h

ome lo

an.

RoR

A o

r R

turn on ri

weighted ass

ets

Proﬁt b

efore t

ax for ye

ar as a

per

centa

ge of RW

A. Pro

ﬁt may b

statutor

y or underlying and

specifed

where

used. See ‘R

’

and ‘Und

erlying ear

nings’

A o

r Risk

-w

ighted a

sset

A me

asure o

f a bank

’s ass

s adjus

ted

for t

heir as

soci

ated r

isk

s, exp

ress

as a p

ercent

age of an ex

pos

ure value

in accordance with t

he applicable

standardi

sed or IRB approach

provisons.

Risks-not-in-

aR (RNIV)

A fr

amewor

k for iden

tf

yin

g and

quantif

ng marginal ty

pes of market

sk that a

re not cap

ture

d in the V

at Ris

k (V

aR) mea

sure fo

r any reas

on,

suc

h as bein

g a far

-t

ail ris

k or the

neces

sar

y historcal market data

not being a

vailable.

ll rate

Use

s a matr

ix tha

t gives a

verage lo

migraton rate from delinquenc

sta

tes fr

om per

iod to p

erio

d. A mat

rix

multiplc

ation is then

erformed to

generate

the ﬁna

l PDs

by delinquency

buc

ket over dif

ferent t

ime ho

rizon

Scope 1 emissons

Arise from the consumption of

energy

fro

m direct s

ource

s duri

ng the u

se of

prop

ert

y o

ccupie

d by the G

roup. On-

site

comb

usti

on of f

uels su

ch as die

sel,

liquefed petroleum gas and natural

gas i

s recor

ded us

ing met

ers o

, wh

ere

metering is not av

ailable,

collated from

fuel vendor in

voces. Emissons from

combustion of fuel in

roup-operated

tran

spo

rtat

ion dev

ices, a

s well as

gitve e

misso

ns, a

re exclude

d as

being immat

eral.

Scope 2 emissons

Arise from the consumption of

indrect

sou

rces of e

nergy d

urin

g the us

e of

prop

ert

y o

ccupie

d by the G

roup.

Ene

rgy gen

erate

d off-site in th

e form

of pu

rchas

ed ele

ctri

ct

, heat

, ste

or co

oling is c

ollect

ed as k

ilowatt h

our

con

sume

d using m

eter

s or

, w

here

metering is not av

ailable,

collated from

vendor in

voces. For

ased properties

we include all indrect and direct sou

rces

of en

ergy co

nsum

ed by buil

dng ser

ices

(

mongst other

activties

) withn

the

spa

ce occu

pied by th

e Grou

p. This can

include base build

ng serv

ices

under

lan

dlord con

trol b

ut over whi

ch we

ypical

old

a reasonable degree of

inﬂu

ence. All d

ata cen

tre fac

ilties w

ith

conditoning s

ystems and hardware

remainng under the operational

cont

rol of t

he Gro

up are inc

lude

d in the

reporting. This

does not include

energy

use

d at out

urced d

ata cent

re facil

ties

whi

ch are capt

ured u

nder S

cope 3

Scope 3 emissons

Occu

r as a con

sequ

ence of t

he Gro

’s

activties

but arisng from

sources not

cont

rolle

d by the G

roup. Bu

sine

ss air

tra

vel data i

s colle

cted a

s per

son

kilometres

travelled b

y seating class

by empl

oyees of t

he Gro

up. Dat

a are

drawn from countr

y operat

ions that

have p

roces

ses in p

lace to g

athe

accurate empl

oyee

air travel data from

travel management companies. Flights

are categorised as short, medium or

long haul trips. Emissons

rom

other

pot

enti

al Scop

e 3 sourc

es such a

electricty transmisson and d

ist

rbution

line l

osse

s are not c

urre

ntly a

ccount

for o

n the ba

sis th

at they can

not be

calculated with

an acceptable lev

el of

reliab

lit

y or consistency

. The Group does

however ca

pture S

cope 3 e

miss

ons f

rom

outsourced data

centres managed

third par

ties.

Sec

ured (fully and pa

rtially

)

A se

cured lo

an is a lo

an in whic

h the

bor

rower pl

edge

s an ass

et as col

latera

for a l

oan whi

ch, in th

e event tha

t the

borrower defaul

the Group is able

take po

sse

ssio

n of

. All s

ecure

d loan

s are

con

sidere

d fu

lly se

cured if t

he fair val

of th

e collat

eral is e

qual to o

r great

tha

n the lo

an at the t

ime of or

ignat

ion.

All o

ther s

ecure

d loan

s are cons

idere

to be

partly secured.

Securitsat

ion

curit

sati

on is a pro

cess by w

hich

credit exposures are aggregate

into a p

ool, w

hich is u

sed to b

ack

new securites. Under

rad

itonal

securitsati

on transactions,

assets are

sol

d to a str

uctu

red en

tit

y whic

h then

sues new s

ecur

ites t

o investor

s at

dif

feren

t levels o

f senio

rt

y (

credit

tran

ching). This al

lows th

e credit q

ualit

of th

e ass

ets t

o be sep

arate

d from t

credit rating of the orignating insttution

and transfers risk to ex

ter

nal

investors

in a way t

hat me

ets t

heir r

isk app

etit

Under syntheti

c securitsation

transactions, the transfer of

isk is

achi

eved by the u

se of cre

dit der

ivat

ves

or guara

ntees

and the exposures be

ing

curit

sed re

main ex

posur

es of th

ori

gnating in

sttut

ion.

Senior debt

Deb

t that t

akes prio

rt

y over ot

her

unsecured or other

wise more

‘

junor’

deb

t owed by the i

ssue

. Se

nior de

bt has

gre

ater se

niort

y in t

he is

suer

’

s cap

ital

str

uct

ure tha

n subor

dinat

ed debt

. In th

event t

he iss

uer go

es bank

rup

t, se

nior

deb

t theo

retic

ally mus

t be rep

aid bef

ore

other

credi

tors receiv

e any

payment.

SIC

R or Signﬁcant increas

e in

cre

dit risk

ses

sed by co

mpari

ng the r

isk of

default of a

n exposure at the reporting

date to the

risk of default

at orignation

(

aft

er cons

idern

g the p

assa

ge of ti

)

Solo

The solo regulatory group as deﬁned i

the Prudential R

egulat

ion

Authorit

waive

r lette

r date

d 10 Augus

t 20

diffe

rs from Stan

dard Chartered B

ank

Com

pany in th

at it incl

udes t

he fu

consolidaton

of nine s

ubsidaries,

namel

y Standard Chartere

d Holdings

(Internati

onal) B.

, Standard Cha

tered

MB Holding

s B.

tandard Charte

red

UK Holding

s Limted, Standard

Charte

red Grindla

ys PTY Limted

, SCMB

Over

seas Limted, St

andard Chartere

Capital Man

agement (

Jer

sey

) LL

Cerule

Investments L.

., SC V

ent

ures

Innovation

Investment L.P

and

SC V

ent

ures G

. Limte

468

Standard Chartered

– Annu

al Rep

ort 202

Supplementar

informat

on

lossar

vere

ign

exposures

xposures to centra

l government

and

central gov

ernm

ent

department

cent

ral ban

ks and e

ntit

es owne

d or

guaranteed by the a

rementioned.

Sta

ge 1

set

s have n

ot exp

erie

nced a

signﬁcant increase in credit r

isk since

ori

gnation an

d imparm

ent reco

gnise

on th

e basi

s of 12 mon

ths ex

pect

credit loss

es.

Sta

ge 2

set

s have e

xper

ience

d a signﬁcan

incr

ease i

n credit r

isk si

nce ori

gnati

and im

parm

ent is re

cogni

sed on t

sis of lif

etme ex

pect

ed cre

dit los

ses

Sta

ge 3

set

s tha

t are in def

ault an

considered credit

-impared (

non-

performing loans

)

Standa

rdised a

pproach

In rel

ation t

o credi

t risk

, a met

hod

for calculatin

g credit risk capital

requirem

ents using E

xtern

al Credit

Assessment Institut

ons (ECAI

) ratings

and super

visor

risk weights. In relation

to operational risk, a method of

calculating t

he operational capital

req

uirem

ent by the ap

plicat

on of a

super

visor

y deﬁned

ercen

tage charge

to th

e gros

s income o

f eight sp

ecif

e

business li

nes

Structured no

An inves

tmen

t tool w

hich pa

ys a ret

urn

linked t

o the valu

e or level o

f a speci

fe

asset or i

ndex and someti

mes offers

capital prote

ction if the value declines

Str

uct

ured n

otes can b

e linked t

equites, interes

t r

ates, f

unds,

commodit

es and foreign currenc

Subor

dinated liablite

Liab

lites w

hich, in t

he event o

insolvency or liqu

dation of the issuer

are su

bordi

nated t

o the cl

aims of

depositors and other creditors of

the issuer

Sust

ainablity As

piratons

A ser

ies of t

arget

s and m

etri

cs by whic

we aim to p

romot

e socia

l and eco

nomic

development, and deliver

sustainable

out

comes i

n the are

as in wh

ich we can

mak

e the mo

st mate

rial c

ontributon

to th

e deli

ver

y of the U

N Sust

ainabl

Development Goals.

Sust

ainable Finance as

sets

set

s fro

m client

s wh

ose act

ivt

ies are

aligned wit

h the Green and Sust

ainable

Prod

uct Framewor

k and/

or fr

tran

sact

ions fo

r which t

he use o

proceeds

will be

utilsed

directly

cont

ribu

te toward

s eligbl

e them

es and

acti

vti

es set o

ut with

n the Gr

een an

Sus

tainab

le Prod

uct Framewor

Sust

ainable Finance rev

Revenue f

rom cli

ent

s whos

e acti

vtie

are ali

gned w

ith the G

ree

n and

Sus

tainab

le Prod

uct Framewor

k and/

fro

m tran

sacti

ons for w

hich pro

cee

will b

e util

sed dir

ectly t

o contr

ibut

toward

s eligbl

e them

es and ac

tivt

ies

set o

ut wit

hn the G

reen an

Sus

tainab

le Prod

uct Framewor

k and/

from approv

ed ‘lab

elled’ transactions

suc

h as any tran

sacti

on refe

rred t

o as

“

green”

, “

ocial”

, “sustainable”

, “SD

(

sustainable dev

elopm

ent goal

)

aligned

”

, “ESG”

, “transiton”

, “CO

VID

faci

lty

” or “COVID-

19 r

espo

nse” wh

ich

have b

een ap

proved by th

e Sust

ainabl

Finance Governance C

ommittee.

Tier 1 capi

tal

The s

um of Co

mmon Equ

y T

r 1 capital

and Additonal T

ier 1 capital.

Tier 1 capi

tal ratio

ier 1 capit

al as a pe

rcenta

ge of

risk

-weighted as

sets.

Tier 2 capi

tal

ier 2

cap

ital comprises qu

alif

yng

subordin

ated liablites and related

share premium ac

counts

TLAC or T

otal lo

ss abso

rbing

capacity

An internatonal standard

for TLAC

sued by th

e FSB, w

hich req

uires G

-SIBs

to ha

ve sufﬁ

cent los

s-abs

orbin

g and

recapitalsat

ion capacit

y available in

resolution, to min

mise impacts on

ﬁnancal stabilt

, maintan the

continuty of critca

l f

unctions

and

avoi

d expo

sing pu

blic f

unds t

o loss

ansito

n risks

The r

isk of c

hange

s to mar

ket

dynamics or sectoral ec

onomics

due to go

vernment

s’

resp

onse to

climate chang

UK bank l

A lev

y th

at appli

es to cer

tain U

K bank

and t

he UK op

erati

ons of fo

reign b

anks

The l

y is pa

yable ea

ch year ba

sed on

a percentage of

the chargeable equites

and li

ablite

s on the G

roup

’s UK ta

resident entites’

balance sheets

Key

exclusions

rom

chargeable equites and

liablites include T

ier 1 capital, insured

or gu

arante

ed ret

ail dep

osit

s, re

pos

secure

d on certain sovereign debt and

liablites subject to net

ting.

Unbiase

Not ove

rly op

timst

ic or pe

ssim

stic

represents informaton that is not

slanted, weighted, emphasised,

de-emphasised or other

wise

mani

pulat

ed to in

creas

e the pr

obabil

tha

t the ﬁna

ncal info

rmat

on will b

received favoura

or unfavourably

by us

ers

Unlikely to pay

Indi

caton

s of unlikel

ness t

o pay sh

all

include placing

the credit obligaton

non-

accr

ued st

atus; t

he reco

gnito

n of a

specif

c credit adjustment resu

lting from

a signﬁcant perceived decline in cre

dit

quality subsequent to

the Group taking

on th

e expo

sure; se

lling th

e credit

obligaton at a material credit

-related

eco

nomic l

oss; th

e Grou

p cons

entin

g to

a dist

res

sed re

stru

ctur

ing of t

he cred

obligaton

here

this is li

kely to result

in a dimnished ﬁnancal obligaton

caus

ed by th

e mater

ial for

givene

ss, o

postponement

, of princ

pal, interest

or, where re

levant fe

es; ﬁlng f

or the

obligor’

s bankr

uptcy or a

simlar order i

respect of an

obligor

’

s credit

obligaton

to th

e Grou

p; the obl

igor ha

s soug

ht or

has b

een pl

aced in b

ankr

upt

cy or s

imlar

prot

ecti

on whe

re this wo

uld avoi

d or

delay repayment of a cr

edit obligat

to th

e Grou

aR o

r V

alue at Ri

A qua

ntita

tve mea

sure o

f market r

isk

est

imatn

g the po

tent

ial los

s that w

ill

not b

e exceed

ed in a se

t time p

erio

at a se

t stati

stcal co

nﬁdenc

e level.

ViU or V

alu

e-in-

Use

The p

rese

nt value of t

he f

uture

expected

cash ﬂo

ws expected

to be

der

ived f

rom an as

set o

r CGU.

ite-d

ter an ad

vance ha

s bee

n identﬁe

as im

pared an

d is sub

ject to an

imp

armen

t provis

on, th

e stag

e may be

rea

ched w

hereby i

t is concl

uded t

hat

the

re is no re

alist

c prosp

ect of f

ther

recove

. W

ite-

downs w

ill occu

r when

and t

o the ext

ent tha

t, th

e whol

e or par

of a debt

is considered irrecover

able.

The t

erm us

ed to in

corp

orate c

redit

debit and f

unding valuation

adju

stme

nts t

o the fa

ir value of

derivatve ﬁnanc

al instrum

ents.

e ‘CV

’

, ‘DV

’ and ‘

’

sign

ed an

d pro

duc

ed by

Friend

ww.fr

iendst

udo.com

inte

d by Par

k Com

mun

icat

on

s on FSC

certifed

paper.

Par

k wor

ks to t

he EM

AS st

and

ard an

d it

s Envi

ron

ment

nag

eme

nt Syst

em is c

ert

ed t

o ISO 1

400

is pu

blic

ato

n has b

n manu

fac

tur

ed us

ing 1

00%

hor

e win

d ele

ctr

ict

y so

urc

ed fr

om UK w

ind

is is a ce

ed cl

ima

te ne

utr

al pr

int pr

odu

ct fo

ich ca

rbo

n emi

ss

ons h

ave b

een ca

lcu

late

d and

offset by supporting

recognised carbon

fset proj

ects.

e car

bon o

set p

roje

s are a

udit

ed an

d cer

tif

e

according

to internatonal standa

rds and

demonstrably

reduce emiss

ons. The

climate neutral

label includes a

ique I

D num

ber s

pec

c to t

his pr

odu

ct wh

ich ca

n be

acke

d at w

clim

ate

par

tne

r.com

, giv

ng de

tai

ls of

e car

bon o

set

tin

g pro

ces

s inc

lud

ng inf

mat

on on

e emi

sso

ns vo

lum

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he car

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t proj

ect

being supported.

0% of t

he ink

s us

ed ar

e vege

tab

le oi

l bas

ed, 9

of p

res

s che

mica

ls are r

ycle

d for f

the

r use a

nd,

on a

vera

ge 99

% of a

ny wast

e as

soci

ate

d wit

h thi

odu

ctio

n wil

l be re

cyc

led a

nd th

e rem

ainn

g 1%

used to generate

energy.

is do

cume

nt is p

rin

ted o

n Nau

til

us Su

per

hite

0% Rec

ycl

ed pa

per c

ont

ainn

g 10

0% rec

ycl

ed ﬁb

re.

The FSC

label on

this product ensures

respon

sible

use

of t

he wor

’s fore

st re

sou

rce

d Chartered

PLC. Al

l rights r

eserved.

e ST

NDARD CH

ARTER

ED wor

d mar

k, it

s lo

go de

vice

d ass

oci

ate

d prod

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