STANDARD CHARTERED PLC

Annual Report 2022



Connecting the

world’s most

dynamic markets



Here for good

We are a leading internat

ional

cross-border bank

Standard Chartered is a bank like no other. Our unique footprint,

diverse experience, capabil

ies and culture set us apart. They

enable us to capital

ise on opportun

ies for our bus

iness, our

customers, and the communit

ies we serve.

Guided by our Purpose – to drive commerce and prosperity through

our unique divers

ity – we connect more than 59 of the world’s most

dynamic markets, backing the people and businesses who are the

engines of global growth.

Together, we are developing new economies that can deliver

sustained prosperity in the decades ahead. As our brand promise

makes clear, we are here for good.

Strategic report

Throughout this report, we use these icons to represent the different stakeholder groups for whom we create value.

Stakeholders

Clients

Regulators and

governments

Investors

Suppliers

Society

Employees

Financ

ial KPIs

Return on tangible equity

8.0

120bps

Underlying basis

6.8

200bps

Statutory basis

Common Equity Tier 1 ratio

14.0

19bps

At the top of 13-14% target range

Total shareholder return

43ppt

Non-ﬁnancial KPIs

Divers

ity and

inclus

ion:

women in senior roles

32.1

1.4ppt

Sustainab

ity Aspirat

ions

met or on track

85.7

2.8ppt

Other ﬁnancial measures

1, 3

Operating income

$16,255

15%

Underlying basis

$16,318

16%

Statutory basis

Proﬁt before tax

$4,762

15%

Underlying basis

$4,286

30%

Statutory basis

Earnings per share

101.1

cents

15.3 cents

Underlying basis

85.9

cents

24.6 cents

Statutory basis

Reconcil

iat

ions from underlying to statutory and deﬁn

ions of alternative performance measures can be found on pages 126 to 130

For more informat

ion on our culture of

inclus

ion see page 64, and for more on our Susta

inab

ity Aspirat

ions see page 64

Year-on-Year growth on Operating Income and Proﬁt before tax is on constant currency basis

Senior leadership is deﬁned as Managing Directors and Band 4 roles (includ

ing Management Team)

Standard Chartered

– Annual Report 2022

Strategic report

Who we are and what we do

Where we operate

Group Chairman’s statement

Group Chief Executive’s review

Market environment

Business model

Our strategy

Our Stands

Client segment reviews

Regional reviews

Group Chief Financ

ial

Ofﬁcer’s review

Risk overview

Stakeholders and Sustainab

ity

124

Non-ﬁnancial

informat

ion

statement

126

Underlying versus statutory results

131

Alternative performance measures

132

Viab

ity statement

134

Directors’ report

184

Directors’ remuneration report

232

Risk review and Capital review

326

Financ

ial statements

474

Supplementary informat

ion

In this report

Group Chief Executive’s review

Unless another currency is specif

ied, the word ‘dollar’ or symbol ‘$’

in this document

means US dollar and the word ‘cent’ or symbol ‘c’ means one-hundredth of one

US dollar. All disclosures in the Strategic report, Directors’ report, Risk review and

Capital review and Supplementary informat

ion are unaud

ited unless otherwise

stated. Unless context requires with

in the document, ‘Ch

ina’ refers to the People’s

Republic of China and, for the purposes of this document only, excludes Hong Kong

Special Admin

istrat

ive Region (Hong Kong), Macau Special Admin

istrat

ive Region

(Macau) and Taiwan. ‘Korea’ or ‘South Korea’ refers to the Republic of Korea. Asia

includes Australia, Bangladesh, Brunei, Cambodia, India, Indonesia, Laos, Malaysia,

Myanmar, Nepal, Phil

ipp

ines, Singapore, Sri Lanka, Thailand, Vietnam, Mainland

China, Hong Kong, Japan, Korea, Macau, Taiwan; Africa and Middle East (AME)

includes Angola, Bahrain, Botswana, Cameroon, Côte d’Ivoire, Egypt, The Gambia,

Ghana, Iraq, Jordan, Kenya, Lebanon, Maurit

ius, N

iger

ia, Oman, Pak

istan, Qatar,

Saudi Arabia, Sierra Leone, South Africa, Tanzania, UAE, Uganda, Zambia,

Zimbabwe; and Europe and Americas (EA) include Argentina, Brazil, Colombia,

Falkland Islands, France, Germany, Ireland, Jersey, Poland, Sweden, Türkiye, the UK,

and the US. With

in the tables

in this report, blank spaces ind

icate that the number

is not disclosed, dashes ind

icate that the number

is zero and nm stands for not

meaningful. Standard Chartered PLC is incorporated in England and Wales with

lim

ited l

iab

ity, and is headquartered in London. The Group’s head ofﬁce provides

guidance on governance and regulatory standards. Standard Chartered PLC.

Stock codes are: LSE STAN.LN and HKSE 02888.

Sustainab

ity reporting

We adopt an integrated approach

to corporate reporting, embedding

non-ﬁnancial

informat

ion throughout

our annual report. While not complying

in full, in preparing this report, we have

given considerat

ion to the pr

inc

iples

of the voluntary Global Reporting

Init

iat

ive, SASB Standards and the

World Economic Forum Stakeholder

Capital

ism Metr

ics framework.

Read more in our ESG report

sc.com/ESGreport

For more informat

ion on

Standard Chartered please

vis

sc.com

Alternative performance measures

The Group uses a number of alternative

performance measures in the discuss

ion of

its

performance. These measures exclude certain

items which management believes are not

representative of the underlying performance

of the business and which distort period-on-

period comparison. They provide the reader

with ins

ight

into how management measures

the performance of the business.

About this report

Client segment reviews

Regional reviews

Our strategy

Stakeholders and Sustainab

ity

Standard Chartered

– Annual Report 2022

Strategic report

Who we are

and what we do

Who we are

Total operating income

$16,255m

Underlying basis

$16,318m

Statutory basis

Our client segments

Global functions

Enabling and supporting our businesses

Transformation, Technology

& Operations

Responsible for leading bank-wide

transformation and for reshaping

the Group’s systems and technology

platforms to ensure we provide robust,

responsive, and innovat

ive technology

dig

ital solut

ions. Also manages all

client operations, seeking to provide an

optimal client service and experience

across the board.

Legal

Provides legal advice and support

to the Group to manage legal risks

and issues.

Human Resources

Maxim

ises the value of

investment

in people through recruitment,

development and employee

engagement.

Risk

Responsible for the overall second-line-

of-defence responsib

ies related to

risk management, which involves

oversight and challenge of risk

management actions of the ﬁrst line.

Group Chief Financ

ial Ofﬁcer

Comprises seven support functions:

Finance, Treasury, Strategy, Investor

Relations, Corporate Development,

Supply Chain Management and

Property. The leaders of these

functions report directly to the

Group Chief Financ

ial Ofﬁcer.

Corporate Affairs, Brand

and Marketing

Manages the Group’s marketing and

communicat

ions and engagement

with stakeholders to protect and

promote the Group’s reputation,

brand and services.

Group Internal Audit

An independent function whose

primary role is to help the Board

and Management Team protect the

assets, reputation and sustainab

ity

of the Group.

Conduct, Financ

ial Cr

ime

and Compliance

Partners internally and externally

to achieve the highest standards in

conduct and compliance to enable

a sustainable business and ﬁght

ﬁnancial cr

ime.

Our client-facing businesses are supported by our global

functions, which work together to ensure the Group’s operations

run smoothly and consistently.

Our Purpose is to drive commerce and prosperity

through our unique divers

ity. We serve three cl

ient

segments in three regions, supported by eight

global functions.

Corporate, Commercial

and Institut

ional Bank

ing

Supporting clients with their transaction

banking, ﬁnanc

ial markets, corporate ﬁnance

and borrowing needs, Corporate, Commercial

and Institut

ional Bank

ing provides solutions

to more than 20,000 clients in the world’s

fastest-growing economies and most active

trade corridors.

$10,045m

Underlying basis

$10,086m

Statutory basis

Consumer, Private

and Business Banking

Serving more than 10 mill

ion

ind

iduals and

small businesses, Consumer, Private and

Business Banking focuses on the afﬂuent

and emerging afﬂuent in many of the world’s

fastest-growing cit

ies.

$6,016m

Underlying basis

$6,016m

Statutory basis

Ventures

promotes innovat

ion,

invests in

disrupt

ive ﬁnancial technology and explores

alternative business models. Its pipel

ine of

over 30 ventures includes two cloud-native

dig

ital banks.

$29m

Underlying basis

$29m

Statutory basis

Central and other items

$165m

Underlying basis

$187m

Statutory basis

Operating income

Standard Chartered

– Annual Report 2022

Strategic report

Valued behaviours

Our regions

Total operating income

$16,255m

Underlying basis

$16,318m

Statutory basis

Better together

Do the right thing

Never settle

•

Continuously improve and innovate

• Simpl

ify

•

Learn from your successes and failures

•

See more in others

•

“How can I help?”

•

Build for the long term

• Live with integr

ity

• Think client

•

Be brave, be the change

We’re developing a future-ready workforce built

on good conduct and our valued behaviours

Asia

We are present in 21 markets includ

ing some

of the world’s fastest-growing economies.

Hong Kong and Singapore are the highest

income contributors.

$11,213m

Underlying basis

$11,256m

Statutory basis

Africa and Middle East

We have a presence in 25 markets of which the

most sizeable by income are UAE, Pakistan,

Kenya, Niger

ia, South Afr

ica and Ghana.

$2,606m

Underlying basis

$2,608m

Statutory basis

Europe and the Americas

Centred in London, with a growing presence

across continental Europe, and New York,

we operate in both North America and several

markets in Latin America.

$2,353m

Underlying basis

$2,352m

Statutory basis

Central and other items

$83m

Underlying basis

$102m

Statutory basis

Operating income

Standard Chartered

– Annual Report 2022

Strategic report

Business model

We operate in the world’s most

dynamic markets which set the

pace for global growth. Our unique

footprint connects high-growth

and emerging markets in Asia,

Africa and the Middle East with

more established economies,

allowing us to channel capital

where it’s needed most.

For over 160 years we have used

the power of our network to

maxim

ise opportun

ies for people

and businesses who trade, operate,

or invest in these regions.

Our diverse experience, capabil

ies

and culture sets us apart.



We are present

in 59 markets

and serve clients

in a further 64



Where we operate

We have a long-standing and deep

franchise across some of the world’s

fastest-growing economies. Our Asia

region generates

two-thirds

of our

income. The two markets contribut

ing

the highest income are

Hong Kong

and Singapore

Australia

Bangladesh

Brunei

Cambodia

Hong Kong

India

Indonesia

Japan

Korea

Laos

Macau

Mainland China

Malaysia

Myanmar

Nepal

Phil

ipp

ines

Singapore

Sri Lanka

Thailand

Vietnam

Taiwan

Asia

Read more on

page 31

Group Chairman’s

statement



Deliver

ing

growth

opportunit

ies

in our

dynamic

markets



Dr José Viñals

Group Chairman

Strategic report

Group Chairman’s statement

Standard Chartered

– Annual Report 2022

Standard Chartered

– Annual Report 2022

Strategic report

In 2022, Standard Chartered continued to make good

progress executing its strategy and delivered a strong

ﬁnancial performance. The external env

ironment we faced

was mixed. The war in Ukraine created sign

iﬁcant uncerta

inty

in Europe and other key markets. However, the global

economy remained resil

ient, w

ith the recent relaxation of

COVID-19 restrict

ions

in China provid

ing more grounds for

optim

ism

in 2023.

As these events unfold, it is clear that Standard Chartered’s

role – connecting high-growth and emerging markets in Asia,

Africa and the Middle East with each other, and with Europe

and the Americas – is more vital than ever. Our ﬁnanc

ial

performance, and the resil

iency of our un

ique geographic

footprint, mean that we are well-posit

ioned to cap

ital

ise on

opportunit

ies for growth

in the years ahead.

Our performance in 2022 is due in large part to the incred

ible

work of our over 83,000 people across the world, supported

by the Management Team, and led by Group Chief Executive

Bill Winters. Every day, Standard Chartered colleagues deliver

ﬁrst-rate results for our clients, provid

ing ta

ilored products and

services to help them grasp the opportunit

ies ahead.

Anchored in our Purpose, we continue to drive commerce and

prosperity in markets across the world through our unique

divers

ity. I am extremely proud of what we have ach

ieved

together in 2022, and I look forward to the opportunit

ies that

2023 will bring.

Continued ﬁnanc

ial momentum

We continue to deliver an improv

ing ﬁnancial performance.

Bill Winters, and Andy Halford, our Group Chief Financ

ial

Ofﬁcer, will provide more detail on our ﬁnanc

ial results

in the

following pages.

Last year, our income grew by 15 per cent to $16.3 bill

ion, our

highest since 2014, and underlying proﬁt before tax increased

by 15 per cent to $4.8 bill

ion. It

is clear that our strategy to drive

improved levels of return on tangible equity (RoTE) is working.

RoTE for the year increased to 8 per cent, 120 basis points

higher year-on-year. We have revised our target RoTE for

2024 from 10 per cent to exceed 11 per cent, with further

growth thereafter.

The Group mainta

ined a robust l

iqu

ity posit

ion and our

capital levels remain strong, with a Common Equity Tier 1

(CET1) ratio of 14 per cent at year end, at the top of our target

range of 13-14 per cent. Our asset quality and earnings

trajectories are strong, wh

ich gives us conﬁdence that we can

deliver substantial shareholder returns of at least $5 bill

ion by

the end of 2024, as set out last year.

The Board is very clear that any capital not required for

growth will be distr

ibuted to shareholders. We have

increased

the total div

idend by 50 per cent to 18 cents per share and

have announced a new share buy-back of $1 bill

ion, start

ing

imm

inently. Th

is will take total capital, includ

ing d

idends,

announced since the start of 2022, to $2.8 bill

ion, wh

ich is well

over halfway towards our target.

Ambit

ion and progress on our strateg

ic prior

ies

Our strategy, outlined in 2021, aligns us with the major engines

of global growth and we see strong progress across our four

strategic prior

ies: Network, Afﬂuent, Mass Retail and

Sustainab

ity.

Our Network business continues to facil

itate

investment,

trade and capital ﬂows across our geographic footprint,

where we are one of the leading internat

ional wholesale

banks. Our Afﬂuent business is setting the standard for wealth

management across Asia, Africa and the Middle East. We are

provid

ing new d

ital solut

ions, strategic partnerships and

advanced analytics to our Mass Retail clients, lift

ing

partic

ipat

ion and generating Afﬂuent clients of the future.

And we continue to focus on our Sustainab

ity agenda that

supports a just transit

ion ensur

ing that we are making a

difference where it matters most. The addit

ional strateg

actions we are targeting to accelerate our performance are

outlined in Bill’s report and I am pleased to say that we are

executing against these at pace.

Our strategy is underpinned by our Stands, the areas where

we have set long-term ambit

ions for

impact in the markets we

call home: Accelerating Zero, Resetting Globalisat

ion and

Lift

ing Part

ipat

ion.

Through Accelerating Zero, we are progressing on our

commitment to be net zero in our ﬁnanced emiss

ions by 2050,

supporting a just transit

ion – one where cl

imate object

ives are

met without depriv

ing emerg

ing markets of their opportunity

to grow and prosper – which will underpin future social and

economic prosperity. Our 2050 Net Zero roadmap was

endorsed by our shareholders at our 2022 Annual General

Meeting, following extensive engagement with shareholders,

clients and NGOs. During 2022 we facil

itated $23.4 b

ill

ion of

sustainable ﬁnance, as we make progress towards our 2030

target of mobil

ing $300 bill

ion

in sustainable ﬁnance.

Through Resetting Globalisat

ion we are leverag

ing our

network and role as one of the world’s largest trade banks,

to create a fairer and more inclus

ive model of global growth,

and build

ing more res

iency

in global supply chains through

internat

ional d

ivers

iﬁcation and d

ital technolog

ies. We are

also helping to address funding gaps for businesses across

Asia, Africa and the Middle East, particularly for small and

micro enterprises.

Through Lift

ing Part

ipat

ion, we continue to broaden access

to ﬁnancial serv

ices and create special

ised programmes to

support disadvantaged communit

ies across our footpr

int. We

remain hugely proud of our Futuremakers programme, which

was set up in 2019 to improve economic inclus

ion

in our

markets, with a focus on women and girls, and in 2022 worked

with over 335,000 young people. In India and Kenya, we have

set up Solv, an e-commerce marketplace for small and

medium-sized enterprises, which served over 230,000

customers in 2022.

Elsewhere, we worked in partnership with FairPr

ice Group to

successfully launch the fully dig

ital Trust Bank

in Singapore,

gain

ing 450,000 customers

in our ﬁrst ﬁve months.

SC Ventures continues to invest in potentially transformational

business models and ecosystems, connecting more and more

clients with economic opportunity. This is just one example of

our collaborative approach to innovat

ion and ﬁnancial

inclus

ion.

Enhancing governance and culture

During the year, we continued to drive divers

ity

in our Board,

recognis

ing the beneﬁts of a d

iverse mix of gender, social

and ethnic backgrounds, skills, knowledge, experience

and adequate reﬂection of our key markets to support

our strategy.

The Board was heartened by the results of the externally

facil

itated effect

iveness review of the Board and its

committees. It assessed the Board’s progress since the last

external review in 2019 and concluded that the Board

continues to operate effectively while also ident

ify

ing some

areas for improvement. More detail on process, outcomes and

actions can be found on page 156.

Standard Chartered

– Annual Report 2022

In 2022, we welcomed four new independent non-executive

directors to the Board. Shir

ish Apte was appo

inted in May

2022 and joins the Remunerat

ion, Audit and Board Risk

Committees. Robin Lawther was appointed in July 2022 and

joins the Remunerat

ion and Board Risk Committees. Jackie

Hunt was appointed in October 2022 and jo

ins the Aud

it and

Culture and Sustainab

ity Committees. Dr. Linda Yueh was

appointed in January 2023 and jo

ins the Remunerat

ion and

Culture and Sustainab

ity Committees. I am delighted to

welcome them and I am sure that we will greatly beneﬁt from

their broad experience and contribut

ions.

Last year also saw the retirement of several long-standing

and valued directors from our Board. I would like to thank

Naguib Kheraj, former Deputy Chairman and Chair of the

Board Risk Committee who retired from the Board in April for

his unwavering dedicat

ion and most s

ign

iﬁcant and

impactful

contribut

ions to the Board and Comm

ittee discuss

ions. My

thanks also go to Byron Grote who retired from the Board in

November for his many contribut

ions to the Board and

its

Committees. In addit

ion, I would l

ike to thank Christ

ine

Hodgson, former Senior Independent Director and Chair of

the Remuneration Committee, for her many ins

ightful

contribut

ions and great ded

icat

ion as well as for agree

ing to

remain on the Board until January 2023 to ensure a smooth

transit

ion to a new Remunerat

ion Committee Chair.

We also announced that Jasmine Whitbread, Chair of the

Culture and Sustainab

ity Committee, and a long-standing

and much valued board member, would not be seeking

re-election at the 2023 AGM and will retire from the Board at

that time.

Looking ahead

We are well posit

ioned to take advantage of cons

iderable

growth opportunit

ies

in our footprint as we navigate an

uncertain external environment in 2023. Global growth, while

slower, should remain resil

ient. But, w

ith central banks focusing

on controlling inﬂat

ion aga

inst a backdrop of trade and

geopolit

ical tens

ions, sign

iﬁcant uncerta

int

ies rema

in.

Our markets are some of the world’s most dynamic places,

with a growth potential that sign

iﬁcantly outstr

ips more

established economies. Asia is likely to be the fastest-growing

region in the world, and the sign

iﬁcant re-open

ing of the

Chinese economy from COVID-19 restrict

ions

is likely to

materially boost demand and growth. This, together with

India and ASEAN’s high rates of economic expansion and

continued dynamism in commodity-exporting countries in our

footprint, gives us plenty of reasons for optim

ism as we

continue to help customers build growth, prosperity and a

stronger future.

The Board will continue to ensure an appropriate balance of

opportunity and risk, acting in your interests as shareholders.

We are grateful to you for the trust you place in us and for your

ongoing support of the Group. I am conﬁdent that we will

continue to create long-term, sustainable value for all

stakeholders in 2023 and beyond.

Dr José Viñals

Group Chairman

16 February 2023

Aim

Mainta

in a strong cap

ital base and Common Equity Tier 1

(CET1) ratio.

Analysis

Our CET1 ratio was 14.0 per cent, at the top end of

our 13-14 per cent target range.

The components of the Group’s capital are summarised on page 288

Common Equity Tier 1 ratio

-19

bps

Total shareholder return (TSR)

Aim

Deliver a posit

ive return on shareholders’

investment

through share price appreciat

ion and d

idends pa

id.

Analysis

Our TSR in the full year 2022 was posit

ive

41.4 per cent, compared with negative 2.0 per cent in 2021.

Combines simple share price appreciat

ion w

ith div

idends pa

id to show

the total return to the shareholder and is expressed as a percentage total

return to shareholders

+43.4

Financ

ial KPIs

Aim

Deliver sustainable improvement in the Group’s

proﬁtabil

ity as a percentage of the value of shareholders’

tangible equity.

Analysis

Underlying RoTE of 8.0 per cent in 2022 was a 120bps

improvement on 6.8 per cent in 2021.

The underlying proﬁt attributable to ordinary shareholders expressed as a

percentage of average ordinary shareholders’ tangible equity

Underlying return on tangible equity (RoTE)

+120

bps

Group Chairman’s statement

continued

8.0

2022

2021

2020

6.8

3.0

14.0

2022

2021

2020

14.1

14.4

41.4

2022

2021

2020

(2.0)

(34.6)



Helping female

entrepreneurs thrive



Throughout 2022, thousands of women were able to grow their

businesses by using our collateral-free subsid

ised loans for female

micro-entrepreneurs. Geeta Shrestha, who runs an iron metal

works in Nepal, expanded her small workshop to include a

hardware shop, allowing her to create more income for her family

and send her children to school.

Meanwhile, Sita Timals

ina was able to turn her small grocery store

into a proﬁtable cosmetics shop, which she runs while looking

after her family. The success of her store led to the opening of a

second location and allowed her husband has been able to leave

his job in the Middle East to run both stores with her.

Read more online at

sc.com/invest

ingcommun

ies

Standard Chartered

– Annual Report 2022

Strategic report

Group Chief

Executive’s review



Executing on

our strategy

and driv

ing

shareholder

returns



Bill Winters

Group Chief Executive

Standard Chartered

– Annual Report 2022

Strategic report

Group Chief Executive’s review

Standard Chartered

– Annual Report 2022

Strategic report

The Group delivered a strong performance in 2022, executing

well against our strategy and the ﬁve strategic actions we set

out this time last year, whilst continu

ing to

invest for the future.

2022 income was over $16 bill

ion, our h

ighest since 2014 and up

15 per cent, with about half coming from underlying business

growth and the remainder from the normalisat

ion

in interest

rates. This is particularly impress

ive g

iven the material

headwinds in our Wealth Management business. We have

been disc

ipl

ined with expenses, generating savings which

allow for continued investment and sign

iﬁcantly pos

ive

income-to-cost jaws. Loan impa

irment rose, ma

inly due to the

challenges of the China commercial real estate sector and

sovereign risk. The broader portfolio remains resil

ient and we

continue to be vig

ilant

in the face of volatile global markets.

All this has helped us increase underlying proﬁt before tax for

the year to $4.8 bill

ion, an

improvement of 15 per cent

year-on-year.

Our strategy is working and deliver

ing

improved performance

and returns to shareholders. Return on Tangible Equity (RoTE)

at 8 per cent is now above the levels it was before the

pandemic. We intend to build on our momentum to approach

10 per cent RoTE in 2023, to over 11 per cent in 2024, and

continue to grow thereafter. Our equity generation and

disc

ipl

ine on RWA this year has meant our year end Common

Equity Tier 1 (CET1) ratio is at the top of our target range,

allowing us to increase our full year ordinary div

idend to

18 cents per share, a 50 per cent increase. We have also

announced a further share buy-back of $1 bill

ion, start

ing

imm

inently, wh

ich will bring our total shareholder returns

since the start of 2022 to $2.8 bill

ion, well on our way to our

2024 target of at least $5 bill

ion.

Good progress on our strategic actions

We are proud to connect the world’s most dynamic markets.

Our Purpose is to drive commerce and prosperity through our

unique divers

ity and th

is guides our strategy and everything

we do. The businesses we serve, and with which we connect

and partner, are the engines of trade and innovat

ion, and

central to the transit

ion to a fa

ir, sustainable future.

In support of our Purpose, we continue to focus on three

‘Stands’, areas where we have long-term ambit

ions for

posit

ive bus

iness and societal impact – Accelerating Zero,

Resetting Globalisat

ion and L

ift

ing Part

ipat

ion. These

stands are fully consistent with our strategy, stretching our

think

ing, our act

ion and our leadership to accelerate our

growth.

We set out our strategy in early 2021, built on the four

pillars of Network, Afﬂuent, Mass Retail and Sustainab

ity.

Two years on, these themes and areas of focus are even more

relevant; our strategy is working, and will continue to drive

future growth. In 2022 we also set out ﬁve strategic actions

that we would take to accelerate delivery of double-dig

RoTE, includ

ing:

•

Driv

ing

improved returns in Corporate, Commercial &

Institut

ional Bank

ing (CCIB)

•

Transforming proﬁtab

ity through productiv

ity

in Consumer

Private & Business Banking (CPBB)

•

Seiz

ing the opportun

ity in China with the ambit

ion to

double onshore and offshore proﬁt before tax

•

Creating operational leverage and deliver

ing gross cost

savings of $1.3 bill

ion

•

Deliver

ing over $5 b

ill

ion of cap

ital returns to our

shareholders

We have made good progress across all ﬁve areas.

In CCIB we are targeting around a 160 basis point

improvement in income return on risk weighted assets

(IRORWA) to 650 basis points with RWA capped at full year

2021 levels. We have already delivered on this IRORWA

improvement target in 2022 and RWA levels are $20 bill

ion

below 2021 levels. The recently announced strategic review of

our Aviat

ion F

inance business will create further capacity for

CCIB to grow higher return business.

In CPBB the team has already achieved gross savings of

$233 mill

ion aga

inst their 2024 target of $500 mill

ion. These

savings have come from rational

ing the branch network,

process re-engineer

ing, headcount efﬁcienc

ies and further

automation. Despite a challenging Wealth Management

performance in 2022 the CPBB cost-to-income ratio improved

5 percentage points to 69 per cent and should show further

improvement in 2023.

China has faced COVID-19 and economic headwinds. Despite

those diff

icult

ies, our onshore China business increased its

income by 10 per cent in 2022, and offshore-related income is

up 21 per cent. However, impa

irments on Ch

ina commercial

real estate related risk have pushed our offshore and onshore

China operating proﬁt down in 2022. We are conﬁdent in the

long-term opportunity in China and committed to achiev

ing

our 2024 targets for China-related growth.

The Group’s posit

ive

income-to-cost jaws of 6 per cent in 2022

were driven by strong income growth and disc

ipl

ine on

expenses. We have delivered about a third of the $1.3 bill

ion

expense save target we set out earlier this year. Inﬂationary

pressures are now evident in many of our footprint markets

and these expense saves help us manage those pressures,

whilst creating capacity to invest. We will now target posit

ive

income-to-cost jaws of around 3 per cent in 2023 and 2024.

Cash investments

Network income

Number of active Afﬂuent Clients

$2.0

$5.7

24%

2.1

mill

ion

Standard Chartered

– Annual Report 2022

Strategic report

Group Chief Executive’s review

Further opportunit

ies emerg

ing

In 2022 we continued to transform and innovate with

in our

business to drive sustainable growth, includ

ing develop

ing our

dig

ital and susta

inab

ity capabil

ies. Our colleagues bring

unrivalled ﬁnanc

ial expert

ise to help ident

ify opportun

ies

across growing markets, sectors and in sustainable ﬁnance.

We continue to prove ourselves as a trusted partner, working

with start-ups, multinat

ionals, ﬁntechs and governments to

create new ideas, technology and innovat

ion.

In our Ventures segment, we were delighted to announce

the launch of our second wholly dig

ital bank, Trust Bank,

in Singapore. Partnering with FairPr

ice Group, the largest

supermarket chain in Singapore, and build

ing on our

successful experience of creating the Mox virtual bank in

Hong Kong, we were able to bring Trust Bank to the market

quickly and efﬁc

iently. The early success of Trust Bank,

onboarding over 450,000 customers so far, or 9 per cent of

the addressable market, has exceeded our most ambit

ious

expectations. In 2023, Trust Bank will build on this momentum

to roll out addit

ional products to better serve our customers.

Together with Mox, we now have fully developed virtual and

tradit

ional bank offer

ings in two of our most sign

iﬁcant

markets.

The sustainab

ity agenda continues to gather pace as the

world faces sign

iﬁcant cl

imate and environmental challenges,

with the imperat

ive to

invest, ﬁnd solutions and support a just

transit

ion to net zero hav

ing never been greater. In 2022 we

reshaped our organisat

ion to better address the challenges

and opportunit

ies, creat

ing a Chief Sustainab

ity Ofﬁcer role

as we continue to invest in the capabil

ies and expertise that

our business and clients need.

At the 2022 Annual General Meeting, our 2050 Net Zero

pathway was endorsed by our shareholders, and we are

on track to deliver on our plans to reach net zero in our

operations by 2025 and in our ﬁnanced emiss

ions by 2050.

have made good progress during the year and we have

accelerated progress in some areas where more market data

on emiss

ions has become ava

ilable.

We have a deep understanding of how climate change

affects our footprint markets, clients and communit

ies and we

continue to play a leading role in addressing these challenges.

The estimates of the ﬁnanc

ing needed to del

iver net zero

continues to grow and we mobil

ised $48 b

ill

ion of susta

inable

ﬁnance in the last 21 months as we support our clients on their

transit

ion plans. Our amb

ion

is to mobil

ise $300 b

ill

ion

sustainable ﬁnance by 2030 and we have developed a Green

and Sustainable Product Framework and Transit

ion F

inance

Framework to guide us.

Optim

ist

ic outlook for the markets in our

footprint

Looking forward into 2023, whilst there is recession risk in the

US and Europe, ongoing geopolit

ical

issues and the war in

Ukraine, we also see reasons for increased optim

ism for the

areas of the world in which we operate.

The impact of the COVID-19 pandemic is now ﬁnally abating

in the last few markets in our footprint. China’s new approach

to dealing with COVID-19 will drive economic growth and this

in turn will help further improve GDP growth in the economies

of Asia.

This will also act as a catalyst for our Wealth Management

business which was subdued in 2022. Clients remained on the

side-lines as market volatil

ity underm

ined conﬁdence. This

together with the last remain

ing pandem

ic restrict

ions led to

a year-on-year fall in income. As we go into 2023, we are

optim

ist

ic that as these factors recede the Wealth

Management business can rebound from a diff

icult year.

Ris

ing

interest rates will inev

itably feed through further

into

loan impa

irment at some stage. However, reﬂect

ing the work

we have done over a number of years to reshape our loan

portfolios, there are only relatively small pockets of stress in

our books. Our loan loss rate remains well below the histor

range. Whilst China commercial real estate exposures remain

a challenge for the banking sector generally, it remains a small

part of our portfolio, against which we feel appropriately

provided. We remain watchful on sovereign risk where

continued USD strength will remain problematic for some of

our markets though we have the capital strength to navigate

these challenges.

Finally, reﬂecting our increased optim

ism, we are l

ift

ing our

earnings targets. We had said that we will deliver double dig

RoTE in 2024, if not earlier. As we start the new year we think

we will be approaching 10 per cent RoTE in 2023 and have

raised our 2024 RoTE target to be at least 11 per cent and to

continue to grow thereafter.

In conclusion

The Group has delivered a strong performance in 2022. The

revenue outlook into 2023 is posit

ive, w

ith our core business

momentum supported by the tailw

ind of r

ing

interest rates.

We are optim

ist

ic for the markets in our footprint as they

ﬁnally emerge from the challenges brought by the pandemic

and as economic activ

ity rebounds. Our strategy

is clear, we

continue to make good progress on our ﬁve targeted strategic

actions and remain committed to deliver

ing over $5 b

ill

ion of

shareholder returns by 2024.

Finally, echoing José, I would like to highl

ight the remarkable

efforts of our more than 83,000 colleagues. Their deep

expertise combined with resil

ience

in some challenging

circumstances in certain markets has delivered seamless

service to our customers and communit

ies that we serve,

bring

ing to l

ife our brand promise to be here for good.

Bill Winters

Group Chief Executive

16 February 2023

Group Chief Executive’s review

continued

Standard Chartered

– Annual Report 2022

Strategic report

Management Team

Bill Winters

Group Chief Executive

Andy Halford

Group Chief Financ

ial Ofﬁcer

Simon Cooper

CEO, Corporate, Commercial

& Institut

ional Bank

ing and

Europe & Americas

Claire Dixon

Group Head, Corporate Affairs,

Brand and Marketing

Judy Hsu

CEO, Consumer, Private

and Business Banking

Benjamin Hung

CEO, Asia

Tanuj Kapilashram

Group Head, Human Resources

Sunil Kaushal

CEO, Africa & Middle East

Roel Louwhoff

Chief Technology, Operations

and Transformation Ofﬁcer

10.

Tracey McDermott, CBE

Group Head, Conduct,

Financ

ial Cr

ime and Compliance

11.

Sandie Okoro

Group General Counsel

12.

Sadia Ricke

Group Chief Risk Ofﬁcer

13.

Paul Day*

Group Head, Internal Audit

14.

Mary Huen

CEO, Hong Kong and Cluster

CEO for Hong Kong, Taiwan

and Macau

Paul represents Group Internal

Audit as an inv

itee at Management

Team meetings

13.

12.

14.

11.

10.

Standard Chartered

– Annual Report 2022

Strategic report

Market environment

Global macro trends

Market environment

Macroeconomic factors affecting the global landscape

Trends

in 202

•

Global GDP growth slowed sharply in 2022, likely

to 3.4 per cent, following the 6.0 per cent

expansion in 2021, as inﬂat

ion soared and central

banks were forced to tighten policy aggressively.

•

MENAP was the best-performing region,

recording growth of 6.2 per cent, supported by

elevated commodity prices; Asia recorded

growth of 4.2 per cent, down from 7.1 per cent in

2021, primar

ily dr

iven by the slowdown in China,

with growth falling to 3.0 per cent in 2022 from

8.4 per cent in 2021.

•

Among the majors, despite a technical recession

in the ﬁrst half of the year, the United States

recorded annual growth of 2.1 per cent on the

back of resil

ient domest

ic demand, while the UK

likely grew by 4.0 per cent.

•

The euro-area economy likely grew by 3.5 per

cent in 2022 following 5.3 per cent growth in 2021;

while the recovery was strong in H1 due to

COVID-19 reopening effects, H2 was held back by

ris

ing energy costs related to the Russ

ia-Ukraine

conﬂict.

•

In most majors, labour markets showed signs of

further tighten

ing, desp

ite slowing growth.

•

Central banks began to unwind support, at ﬁrst

gradually and then more rapidly as the year

progressed and inﬂat

ionary pressures bu

ilt. Fiscal

support continued in the euro area as

governments sought to shield households and

businesses from elevated energy costs, but

provided less of a tailw

ind

in the United States as

COVID-19 support measures were unwound.

Outlook

for 2023

•

Global growth is expected to weaken to 2.5 per

cent in 2023, as central banks focus on bring

ing

inﬂat

ion back under control.

•

Asia will likely be the fastest-growing region and

will continue to drive global growth, expanding

by 5.3 per cent. Among the majors, the United

States is expected to witness a mild contraction

of 0.2 per cent in 2023, the UK a larger contraction

of 0.5 per cent, while the euro area is likely to see

an overall modest expansion of 0.4 per cent.

•

2023 will be a tale of two halves, with global

growth likely to pick up in H2 2023 as the United

States and euro area recover from mild

recessions, and a reopening of the China

economy from COVID-19 restrict

ions helps boost

demand and growth.

•

Tight global liqu

ity condit

ions are l

ikely to make

it diff

icult for some emerg

ing markets to access

internat

ional ﬁnancing, forc

ing them to seek

multilateral support.

•

Downside risks to this outlook include sustained

inﬂat

ionary pressures, COVID-19 mutat

ions

following China’s quick reopening, and another

ﬂare-up of geopolit

ical tens

ions, includ

ing the

Russia-Ukraine war.

Medium-

and long-

term view

Stagﬂation risks

•

Tight labour markets and the broadening of

inﬂat

ionary pressures to the serv

ices sector are

likely to keep stagﬂation a key concern for central

banks over the coming quarters.

•

The need to meet ESG targets could also prove

inﬂat

ionary

in the medium term as the cost of

using fossil fuels during the transit

ion per

iod rises

due to a combinat

ion of taxes, carbon pr

ing

and external tariffs.

•

As companies aim to reduce concentration risks

and move towards onshore/nearshore

production, the risk is a lowering of efﬁc

iency

gains that might push up consumer prices.

•

However, easing of supply-chain bottlenecks is

likely to help dampen some of these pressures.

•

Fiscal policy might also turn from a tailw

ind to a

headwind for growth. High public debt and

government deﬁcits also mean that most

economies are looking to tighten ﬁscal policy

over the medium term.

Broader global trends

•

The world economy could see a permanent loss

of economic output or ‘scarring’ due to the

recession that followed the pandemic. This would

make it harder for emerging markets to catch up

with developed markets.

•

Long-term growth in the developed world is

constrained by ageing populations and high

levels of debt, exacerbated by the policy

response to COVID-19.

•

Ris

ing nat

ional

ism, ant

i-globalisat

ion and

protection

ism are threats to long-term growth

prospects in emerging markets.

•

However, there are potential offsets. Higher

capex to meet sustainab

ity targets, and moves

towards dig

ital

isat

ion could boost product

ity

growth, proving an antidote to economic scarring

concerns. With

in emerg

ing markets, countries in

Asia are best placed to take advantage of

dig

ital

isat

ion.

•

Relatively younger populations, as well as the

adoption of dig

ital technology, w

ill allow

emerging markets to become increas

ingly

important to global growth.

Standard Chartered

– Annual Report 2022

Strategic report

See our regional performance on

page 29

Regional outlook

•

China’s GDP growth slowed to 3.0 per cent in 2022 from 8.4 per cent

in 2021, falling short of the 5.5 per cent target. Weak consumption

and property investment were the main drag on the economy, due

to the stringent zero-COVID-19 policy and ongoing housing market

correction. We forecast 2023 growth at 5.8 per cent, as the

government appears more determined after the conclusion of the

Party Congress in October to address the two headwinds. China

scrapped the COVID-19 zero policy sooner than expected. Recent

measures aimed at supporting property ﬁnanc

ing w

ill likely stabil

ise

home sales and investment in H2 2023. In addit

ion, the regulatory

storm targeting internet platforms will likely give way to more

normalised regulation. Consumption is likely to become a key

growth driver, and property investment less of a drag.

•

Monetary policy is likely to remain accommodative near term,

diverg

ing from major econom

ies, to curb the downside risk that

may linger in early 2023. However, China’s growth will likely rebound

sign

iﬁcantly

in Q2 following the expected reopening, driv

ing

inﬂat

ion h

igher and prompting the central bank to shift to a more

neutral policy stance to stabil

ise the total debt-to-GDP rat

io. The

broad budget deﬁcit

is likely to be scaled back in 2023 on

sustainab

ity concerns.

•

We expect Hong Kong’s economy to grow 3.2 per cent in 2023

following a 3.5 per cent contraction in 2022. While there are some

domestic bright spots, includ

ing a much-

improved labour market

and relaxation of travel curbs, external drags will likely be

substantial, with tradit

ional export markets such as the Un

ited

States and euro area experienc

ing recess

ion at the start of 2023.

We expect South Korea’s economy to grow just 1.7 per cent on

concerns about weaker external demand and slowing domestic

consumption amid ris

ing

interest rates and tighter ﬁscal policy.

•

In India, recovery momentum remains robust, driven by ﬁrmer

reopening in the services sector. Nevertheless, we expect FY24 (year

beginn

ing Apr

il 2023) GDP growth to moderate to 5.5 per cent,

from 7.0 per cent in the current ﬁnanc

ial year, g

iven moderating

global growth, erosion of real purchasing power and high domestic

interest rates. Easing inﬂat

ion back to the comfort threshold of 2-6

per cent in FY24 should also lead to a prolonged pause from the

MPC after the terminal repo rate hits 6.5 per cent by February 2023.

The external sector will remain in focus amid the likel

ihood of

still-elevated crude oil prices and relatively better economic activ

ity

in India. Ample foreign exchange (FX) reserves, however, are likely

to remain a strong buffer for the economy. The central bank is likely

to focus on rebuild

ing FX reserves, although th

is might remain

challenging amid a still-wide current account deﬁc

it. The central

government budget presentation in February 2023 will be closely

watched for any growth-supportive measures ahead of national

elections in mid-2024. We believe the government will stay focused

on narrowing the ﬁscal deﬁc

it, wh

ich is already sign

iﬁcantly w

ider

relative to the pre-pandemic phase.

•

Singapore and Indonesia are likely to see softer growth in 2023

compared to 2022, and ASEAN growth is set to ease to its

long-term average of 5.0 per cent in 2023. As well as high base

effects, external demand for ASEAN exports may soften due to

global synchronised monetary policy tighten

ing and the electron

cycle peak. Domestic demand may ease as COVID-19 induced

pent-up demand normalises, while local monetary policy

tighten

ing may re

in in overall consumer and investment impetus.

However, stable labour markets will help support spending. The

recovery in the tourism sector, which is a large growth contributor

for the region, will also help drive growth. In addit

ion,

investments

may be boosted by FDI seeking divers

iﬁcation and alternat

ive

production capacity.

•

We expect inﬂat

ion to be m

ilder in 2023 due to high base effects.

External prices may be more manageable, while tighter monetary

policy should help. While monetary policy tighten

ing may pause by

early 2023, any easing might not be forthcoming amid potentially

sticky inﬂat

ion, unless growth deter

iorates sign

iﬁcantly.

Asia

Actual and projected growth by market in 2022 and 2023

5.8

2023

China

2022

2023

Hong Kong

Korea

India

Indonesia

2022

2023

2022

2023

2022

2023

2022

Singapore

2023

2022

3.6

3.0

3.2

(3.5)

1.7

2.7

5.5

7.0

5.1

5.4

2.0

Standard Chartered

– Annual Report 2022

Strategic report

Market environment

Regional outlook

continued

•

After a robust post-COVID-19 recovery in early 2022 on ris

ing global

demand and economic reopening, includ

ing the re-establ

ishment

of internat

ional travel, Sub-Saharan Afr

ican economies are now set

to see a growth moderation. Notwithstand

ing global trends, r

ing

food and fuel prices are still pressuring domestic inﬂat

ion, w

ith

transmiss

ion often exacerbated by FX weakness. The

impact of

2022’s monetary policy tighten

ing w

ill be felt with a lag, with a

number of central banks still expected to raise interest rates further.

•

In Niger

ia, pres

ident

ial and general elect

ions in February/March

2023 will be a key focus, with the likel

ihood of FX and fuel subs

idy

reforms potentially establish

ing cond

ions for more robust

medium-term investment and growth. While load-shedding will

dampen near-term growth prospects in South Africa, a faster

embrace of renewables and increased corporatisat

ion of South

Africa’s rail and port infrastructure, could unlock a greater private

sector contribut

ion to growth. In Kenya, efforts to boost lend

ing to

small and medium enterprises (SMEs), and the increased adoption

of dig

ital channels for ﬁnancial

intermed

iat

ion, should help lift loan

growth.

•

Across the Sub-Saharan Africa space, monetary tighten

ing w

ill

drive healthier net interest margins. However, internat

ional cap

ital

market access is likely to remain constrained for a number of

sovereigns, rais

ing doubts over the easy reﬁnancing of external

debt obligat

ions. The t

imely conclusion of debt restructuring in

Zambia and Ghana could help boost investor sentiment. A pause in

Fed tighten

ing, may help to reduce

investor demand for higher-risk

premia.

•

A supportive energy price environment will likely provide continued

beneﬁt to Gulf Cooperation Council (GCC) growth. The focus is

once again on the region as a provider of capital, as Gulf

economies proceed with longer-term economic divers

iﬁcation

plans, seek to reduce the tradit

ional procycl

ical

ity of spend

ing, and

invest strategically in green technology. In the United Arab Emirates

and Saudi Arabia, we expect the continuat

ion of robust growth,

driven by strong investment across both the hydrocarbon and

non-hydrocarbon sectors. For smaller GCC economies such as

Oman, higher oil prices will drive a reduction in accumulated debt

levels. For the non-GCC MENAP region, condit

ions rema

challenging. Pakistan’s abil

ity to reassure on

its external debt

commitments, amid dwindl

ing FX reserves, w

ill remain a key focus.

In Egypt, recent currency depreciat

ion and a more accommodat

ive

risk backdrop globally could see the return of the carry trade. But

economic condit

ions rema

in diff

icult am

id higher inﬂat

ion, and the

authorit

ies’ comm

itment to FX ﬂexib

ity will be closely monitored.

See our regional performance on

page 30

•

We see a high risk of contraction in the United States in H1 2023; in

the euro area, we expect annual growth to decline sharply in 2023

as high inﬂat

ion and central bank t

ighten

ing we

igh on economic

activ

ity.

•

The peak for consumer price inﬂat

ion

is likely behind us for both the

United States and euro area, but will take time to return to target.

Central banks will remain alert to any signs of inﬂat

ion expectat

ions

becoming unanchored or wage pressures build

ing over the med

ium

term.

•

The Fed is likely to end its rate tighten

ing cycle

in H1 2023, and we

expect rate-cuts to begin in H2 2023. The ECB is likely to hike its

main reﬁnanc

ing rate unt

il Q2 2023, but not start cutting rates until

2024 as inﬂat

ion proves st

icky on the downside.

•

Fiscal support is likely to remain focused on supporting households

and businesses struggling with elevated energy costs in Europe, but

otherwise we can expect the tailw

ind from ﬁscal support to ease

both the euro area and United States.

•

In Latin America, we expect a sign

iﬁcant growth slowdown

in 2023

following a strong 2022. The delayed impact of aggressive

monetary tighten

ing and other

iosyncrat

ic issues are likely to

weigh on domestic demand; external headwinds and looming

recession risks in the United States are likely to drag down the

region’s growth.

See our regional performance on

page 31

Europe and

the Americas

Africa and the

Middle East

Actual and projected growth by market in 2022 and 2023

3.5

2023

Nigeria

2022

2023

UAE

2022

3.1

4.5

6.9

Actual and projected growth by market in 2022 and 2023

(0.5)

2023

2022

2023

USA

2022

4.0

(0.2)

2.1

Market environment

continued



Helping entrepreneurs

bounce back after

COVID-19



In early 2022, we collaborated with Habitat for Humanity

Indonesia to support small, medium and micro businesses

impacted by COVID-19.

As part of the joint effort, 20 shops were constructed

in Madang

Babakan village, West Java to help female entrepreneurs re-

establish their businesses following the pandemic. This project

was part of our IDR16 bill

ion donat

ion to Indonesia to support

female micro-entrepreneurs and young adults affected by

the pandemic.

Read more online at

www.sc.com/invest

ingcommun

ies

Standard Chartered

– Annual Report 2022

Strategic report

Standard Chartered

– Annual Report 2022

Strategic report

Business model

How we generate returns

We earn net interest on the margin for loans and deposit products, fees on

the provis

ion of adv

isory and other services, and trading income from provid

ing r

isk

management in ﬁnanc

ial markets.

Income

Net interest income

Fee income

Trading income

Proﬁts

Income gained from

provid

ing our products

and services minus

expenses and

impa

irments

Return on

tangible equity

Proﬁt generated

relative to tangible

equity invested

Our business

Corporate, Commercial

and Institut

ional Bank

ing

(CCIB)

We support companies across the

world, from small and medium-sized

enterprises to large corporates and

inst

itut

ions, both dig

itally and

in person.

Ventures

We promote innovat

ion,

invest in disrupt

ive ﬁnancial technology and explore alternat

ive

business models. Our pipel

ine of over th

irty ventures includes two cloud-native dig

ital banks.

Consumer, Private and

Business Banking

(CPBB)

We support small businesses and

ind

iduals, from Mass Retail clients to

afﬂuent and high-net-worth ind

iduals,

both dig

itally and

in person.

We help internat

ional compan

ies

connect and maxim

ise opportun

ies

across our global network and we

support ind

iduals and local

businesses in growing their wealth.

Our products and services

Financ

ial Markets

• Macro, commodit

ies

and credit trading

• Financ

ing and

securit

ies serv

ices

• Sales and structuring

• Debt capital

markets and

leveraged ﬁnances

• Project and

transportation

ﬁnance

Transaction Banking

• Cash management

• Trade ﬁnance

• Working capital

Wealth Management

• Investments

• Insurance

• Wealth advice

• Portfolio

management

Retail Products

• Deposits

• Mortgages

• Credit cards

• Personal loans

Standard Chartered

– Annual Report 2022

Strategic report

How we are shaping our future

We remain committed

to executing against

our strategy to

accelerate returns

We are committ

ing resources to grow our

franchise in large and high-returns markets,

and accelerate progress in markets being

optim

ised. We cont

inue to review our

business models to drive performance.

In 2022, we refocused our resources in

the Africa and Middle East (AME) region

into exist

ing and new markets w

ith the

greatest scale and growth potential,

provided further clarity on how we are

planning to achieve net zero in ﬁnanced

emiss

ions by 2050, and successfully

launched Trust, a dig

ital bank

in Singapore.

In addit

ion,

in April 2022, we expanded

our reporting structure with the creation

of Ventures. The increased reporting

transparency for Ventures reﬂects the

growing sign

iﬁcance of the Group’s

investment in technology and innovat

ion.

We are on-track and now expect to

deliver a return on tangible equity (RoTE)

of over 11 per cent by 2024, from:

•

focusing on driv

ing

improved returns

in CCIB to reach 6.5% Income

RoRWA by 2024 (2022:

6.5%)

•

transforming proﬁtab

ity in CPBB

to improve cost-to-income ratio

to ~60% by 2024 (2022:

69%)

•

seiz

ing opportun

ies

in China to

double China onshore and offshore

proﬁt before tax (2022: $0.5bn,

-35% decline year-on-year )

•

improv

ing efﬁciency through creat

ing

operational leverage to improve group

cost-to-income ratio to ~60% by 2024

(2022: 65%) and to deliver gross expense

savings of $1.3bn by 2024 (2022: $0.4bn)

• deliver

ing susta

inable shareholder

distr

ibut

ions in excess of $5bn from

2022 - 2024 (2022: $2.8bn).

Over the medium term, we will continue

to relentlessly transform and innovate

to become a leading cross-border bank

that supports a sustainable future.

Dist

inct propos

ion

Our understanding of our markets

and our extensive internat

ional

network allow us to offer a

tailored proposit

ion to our cl

ients,

combin

ing global expert

ise and

local knowledge.

Sustainable and

responsible business

We are committed to sustainable

social and economic development

across our business, operations

and communit

ies.

Client focus

Our clients are our business.

We build long-term relationsh

ips

through trusted advice, expertise

and best-in-class capabil

ies.

What makes us different

Our purpose is to drive commerce and prosperity through

our unique divers

ity – th

is is underpinned by our brand

promise, here for good. Our Stands – aimed at tackling some

of the world’s biggest issues – Accelerating Zero, Lift

ing

Partic

ipat

ion and Resetting Globalisat

ion (see page 24 for

more), challenge us to use our unique posit

ion art

iculated

below.

Robust risk

management

We are here for the long term.

Effective risk management

allows us to grow a sustainable

business.

Reconcil

iat

ions from underlying to statutory and

deﬁnit

ions of alternative performance measures

(APMs) can be found on pages 126 to 131.

Standard Chartered

– Annual Report 2022

Strategic report

Business model

The sources of value we rely on

We aim to use our resources in a sustainable way,

to achieve the goals of our strategy

How we are enhancing our resources

•

We continue to create a work environment that

supports resil

ience,

innovat

ion and

inclus

ion, w

ith an

ongoing focus on mental, physical, social and ﬁnanc

ial

wellbeing. This includes further rolling out hybrid

working across our markets.

•

More than 32,000 colleagues have undertaken learning

in 2022 to build the future skills that we need – includ

ing

analytics, data, dig

ital, cyber secur

ity,

sustainable

ﬁnance and leadership.

•

We continue to invest in transforming our core business

into a leading dig

ital-ﬁrst and data-dr

iven platform,

posit

ion

ing us to deliver superior client experiences,

access new high-growth segments, grow wallet with

exist

ing cl

ients and create new business model

opportunit

ies.

•

Our network remains one of our key competit

ive

advantages and we continue to leverage our network

to drive growth in Transaction Banking and Financ

ial

Markets solutions for our clients.

•

In Business Banking, we continue to support the growth

of SMEs across our footprint by meeting their trade and

working capital, supply chain ﬁnanc

ing, cash

management and investment needs. We granted over

$3 bill

ion

in new loans to SMEs in 2022.

•

We launched new dig

ital partnersh

ips in China, India

and Vietnam to offer a superior banking experience to

small businesses, offering innovat

ive d

ital solut

ions to

meet their evolving needs in the trade and e-commerce

ecosystems.

•

Stronger capital and a much more resil

ient balance

sheet with growth in high-quality deposits.

•

CET1 ratio at 14 per cent, at the top of our target range

of 13 – 14 per cent.

CET1 capital

Financ

ial strength

With $820 bill

ion

in assets on our

balance sheet, we are a strong,

trusted partner for our clients.

$34

•

We are leveraging partnerships to create market-

leading dig

ital platforms

includ

ing D

ital

Banks and Banking as a Service, util

ing next-

generation technologies to service our clients.

•

We continue to invest in our engineer

ing capab

ies,

provid

ing best-

in-class tools, growing our

engineer

ing talent, and creat

ing an automated

and scalable technology stack capable of

continuously deliver

ing value to our cl

ients.

•

We are accelerating the simpl

iﬁcation and

harmonisat

ion of our technology estate to re

inforce

strong dig

ital foundat

ions, integrate platforms

using the cloud where appropriate, to provide

consistent, secure, and resil

ient technology.

Consumer

client

satisfact

ion metr

48.1

2021: 43.1%

Strong brand

We are a leading internat

ional

banking group with more than

160 years of history. In many of our

markets we are a household name.

Business model

continued

Technology

We possess strong dig

ital

foundations and leading

technological capabil

ies to enable

a data-driven dig

ital bank wh

ich

delivers world class client service

International network

We have an unparalleled

internat

ional network, connect

ing

companies, inst

itut

ions and

ind

iduals to, and in, some of the

world’s fastest-growing and most

dynamic regions.

Human capital

Divers

ity d

ifferent

iates us. Del

iver

ing

our Purpose rests on how we continue

to invest in our people, the employee

experience we further enhance and

the culture we strengthen.

Local expertise

We have a deep knowledge of our

markets and an understanding

of the drivers of the economy,

offering us ins

ights that help our

clients achieve their ambit

ions.

•

In 2022, we continued to embed our refreshed brand

ident

ity across cl

ient and employee touchpoints. We

also introduced a sonic ident

ity to br

ing to life the sound

of Standard Chartered in interact

ive d

ital

interfaces.

•

We have been successful in leveraging our brand and

ins

ights to support bus

iness growth. The Group

successfully improved its reputation in 2022, exceeding

the average score for the banking sector, and ranking

top three in the major

ity of our key markets over 2022.

Excludes CCIB, and Business Banking clients.

Includes Private Banking. Restated for 2021.

Standard Chartered

– Annual Report 2022

Strategic report

Read more on stakeholder

engagement on

pages 55 to 63

The value we create

We aim to create long-term value for a broad range of stakeholders in a sustainable way

Clients

We want to deliver simple, everyday banking

solutions to provide our clients with a great dig

ital

client experience. We enable ind

iduals to grow

and protect their wealth; we help businesses trade,

transact, invest and expand. We also help a variety of

ﬁnancial

inst

itut

ions, includ

ing banks, publ

ic sector and

development organisat

ions, w

ith their banking needs.

Suppliers

We engage diverse suppliers, locally and globally,

to provide efﬁc

ient and susta

inable goods and

services for our business.

Taxes paid in 2022

$821

2021: $1.2bn

Regulators and governments

We engage with public authorit

ies to play our part

supporting the effective function

ing of the ﬁnancial

system and the broader economy.

Employees

We believe great employee experience drives great

client experience. We want all our people to pursue their

ambit

ions, del

iver with purpose and have a rewarding

career enabled by great people leaders.

Total spent in 2022

$4.3

2021: $4.1bn

Active suppliers

11,700

2021: 12,100

Total active

ind

idual clients

Total CCIB and Business

Banking clients

10.5m

2021: 9.9m

235,000

2021: 234,000

Senior appointments

which are internal

2021: 69%

Employees committed

to our success

2021: 96%

Div

idends declared

in 2022

$523

2021: $370m

Share buy-backs in 2022

$1.3

2021: $504m

Investors

We aim to deliver robust returns and long-term

sustainable value for our investors.

Society

We strive to operate as a sustainable and responsible

company, working with local partners to promote social

and economic development.

Community investment

$51.2

2021: $48.7m

2021 restated due to a change in the deﬁn

ion of active partnership clients.

Standard Chartered

– Annual Report 2022

Strategic report

Strategy

We will continue to increase focus on:

•

Four strategic prior

ies: Network business, Afﬂuent client

business, Mass Retail business, and Sustainab

ity

•

Three crit

ical enablers: People and Culture, Ways of

Working, and Innovation

Over the past year, we have executed against our strategy.

While there are adjacent areas we will continue focusing on,

such as managing down low-returning risk-weighted assets

(RWA) in Corporate, Commercial and Institut

ional Bank

ing

(CCIB), and accelerating cost-savings across Consumer,

Private and Business Banking (CPBB), we still believe our

strategy is the right one. We have made good progress in

the year and are on track to deliver our object

ives.

We remain committed to achieve our ambit

ions by 2025:

•

To be the number one Network dig

ital bank

ing platform

•

To be among the top three Afﬂuent brands

•

To double our Mass presence

•

To become a market leader in Sustainab

ity

Going forward, our strategic prior

ies and enablers will

continue to be supported by our three Stands: Accelerating

Zero, Lift

ing Part

ipat

ion and Resetting Globalisat

ion.

More details on our Stands can be found on page 24.

Crit

ical enablers

Innovation

We have a three-pronged

innovat

ion approach to transform

the Bank, to achieve our goal

of 50 per cent income from new

businesses.

•

Transform our core via dig

isat

ion

•

Leverage partnerships to drive

scale and extended reach

•

Build new business models to

create value

We have established Ventures

as a separate operating segment.

During 2022, we launched six new

ventures and serviced more than

1.8 mill

ion customers through our

venture portfolio .

People

and Culture

We are continu

ing to

invest in our

people to build future-ready skills,

provide them with a different

iated

experience and strengthen our

inclus

ive and

innovat

ive culture.

This includes:

• Embedding our refreshed

approach to performance, reward

and recognit

ion, that puts greater

focus on ambit

ion, collaborat

ion,

and innovat

ion

•

Increasing re-skill

ing and upsk

ill

ing

opportunit

ies towards future roles

that are aligned with the business

strategy and ind

iduals’

aspirat

ions

•

Expanding hybrid working across

our footprint, with 78 per cent of

colleagues across 43 markets on

ﬂexi working arrangements

•

Focusing on wellbeing to enhance

ind

idual resil

ience, product

ity,

and performance

• Strengthening leadership

capabil

ity through a modern

ised

development offering

Ways of Working

We continue to be client-centric, to

improve our operating rhythm

in organisat

ional ag

ity and to

empower our people to continuously

improve the way we work.

We are working on ident

ify

ing

ways to track derived value and

enhance our speed of decis

ion-

making and delivery, as a key

source of competit

ive advantage.

Women in senior roles

Culture of inclus

ion score

Average time taken from

approval to technology go-live

Percentage of revenue

from new businesses

6.2

weeks

2021: 7.6 weeks

2021: 13%

32.1

2021: 30.7%

48.1

2021: 43.1%

83.07

2021: 80.65%

2022 ﬁgure includes measurement from Functions operations and cannot be directly compared to 2021 ﬁgure

Excludes CCIB, and Business Banking clients. Includes Private Banking. Restated for 2021.

Income from dig

ital

iat

ives,

innovat

ion and transformat

ion of the core, the major

ity of wh

ich will come from new and upgraded platforms

and partnerships. Also includes Sustainable Finance income and 100% of Ventures income. 2021 ﬁgure has been restated.

To become a leader

in global ﬁnance

Our strategy

Consumer client satisfact

ion metr

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

In Sustainab

ity, in line with our stands, we continue to focus

on sustainable and transit

ion ﬁnance, ach

iev

ing net zero carbon

emiss

ions for our operat

ions, supply chains and ﬁnanc

ing.

We provide access to ﬁnance, networks and train

ing to

young people, and support companies in improv

ing the

environmental, social and governance standards, ratings,

and net zero trajectories.

We aim to promote social and economic development, and

deliver sustainable outcomes in support of the UN Sustainable

Development Goals. We are:

•

Leveraging climate risk management to support clients in

managing climate risk and ident

ify

ing transit

ion opportun

ies,

e.g., mobil

ing green and sustainable ﬁnance

•

Integrating Sustainable Finance as a core component of our

customer value proposit

ion and del

iver

ing product solut

ions

•

Continu

ing to promote econom

ic inclus

ion

in our footprint

through Futuremakers by Standard Chartered

•

Targeting net zero carbon emiss

ions

in our operations by 2025,

and in our supply chain and ﬁnanced emiss

ions by 2050, w

ith

inter

im 2030 targets for our h

ighest-emitt

ing sectors

Sustainab

ity Aspirat

ions

achieved or on track

85.7%

2021: 82.9%

Mass Retail business

We deliver banking solutions to help our clients prosper by

integrat

ing our d

ital serv

ices into our clients’ everyday lives.

New dig

ital solut

ions, strategic partnerships and advanced

analytics are instrumental to our business, enabling us to

sign

iﬁcantly

increase our relevance and reach, serve our clients

in a meaningful way and lift partic

ipat

ion in the communit

ies we

serve. We are:

•

Making sign

iﬁcant progress

in rebuild

ing foundat

ions for a

proﬁtable Mass Retail business

•

Continu

ing to transform to a d

ital-ﬁrst model, deepen

ing

our capabil

ies in dig

ital sales and market

ing as well as data

and analytics

•

Becoming the partner of choice to leading global and regional

companies and scaling thoughtfully with our partners

Mass market

active clients

8.4m

2021: 7.6m

Percentage of dig

ital

sales for Retail Products

2021: 41%

Strategic prior

ies

Network business

Through our unique network, we facil

itate

investment, trade and

capital ﬂows, with an increas

ing focus on Susta

inable Finance.

We are one of the leading internat

ional network banks

in our emerging markets footprint through:

•

Taking leading posit

ions

in high-returning, high-growth

sectors

•

Deliver

ing a market-lead

ing dig

ital platform by cont

inu

ing

to invest in core dig

ital capab

ies

•

Speeding up growth in large markets while expanding in

growing markets and corridors e.g., intra-Asia and East–West

CCIB network income

$5.7

2021: $4.6bn

Percentage of CCIB

transactions dig

itally

iated

2021: 55%

Afﬂuent client business

We offer outstanding personalised advice and exceptional

experiences for our Private, Prior

ity and Prem

ium Banking clients

to help them grow and prosper internat

ionally and at home.

Our deep-rooted network, trusted brand and long-standing

commitment with clients in our markets are key sources of

competit

ive advantage.

As a leading internat

ional wealth manager, we focus on:

•

Unlocking the value of our strong afﬂuent client portfolio

across Asia, Africa and the Middle East, with suitable client

proposit

ions, coverage models and adv

isory capabil

ies

•

Maxim

ing the reach of our deep-rooted internat

ional

network, with Hong Kong, Singapore, UAE and Jersey as our

wealth advisory hubs

•

Deliver

ing personal

ised and dig

ital-ﬁrst wealth solut

ions to our

clients anchored in investment thought leadership, an open

architecture approach and supported by scalable platforms

Afﬂuent client income

$3.8

2021: $3.6bn

Afﬂuent active clients

2.1m

2021: 2.1m

Includes measurement across all countries and products. 2021 restated.

2021 restated due to a change in the deﬁn

ion of active partnership clients.

Calculation methodology has been amended to exclude Mass Retail dig

ital partnersh

ips and the markets that were announced for exit in 2022. 2021 ﬁgure has

been restated.

We’re helping emerging markets in our footprint reduce

carbon emiss

ions w

ithout slowing crit

ical local development.

This is just one of the ways we’re playing our part in putting

the world on a sustainable path to net zero by 2050.

The need for a just transit

ion to an

inclus

ive, net zero

economy brings with it a huge opportunity for innovat

ion and

growth for our clients and our Bank. Our plan to achieve net

zero has three aims: reduce emiss

ions, catalyse susta

inable

ﬁnance and partnerships, and accelerate new solutions.

We aim to reduce the emiss

ions assoc

iated with our

ﬁnancing act

ies to net zero by 2050, with 2030

inter

im targets

in our most carbon-intens

ive sectors.

Accelerating

Zero

Our Stands

The impact of climate change, stark

inequal

ity and the unfa

ir aspects of

globalisat

ion

impact us all. We’re

taking a stand by setting long-term

ambit

ions on these

issues where

they matter most. This works in

unison with our strategy, stretching

our think

ing, our act

ion and our

leadership to accelerate our growth.

Inequality, along with gaps in economic inclus

ion, mean

that many young people, women and small businesses

struggle to gain access to the ﬁnanc

ial system to save

for their futures and grow their businesses. We want to

democratise access to ﬁnance and make it easily accessible

at low cost.

We strive to expand the reach and scale of ﬁnanc

ial

services – expanding accessible banking and connecting

clients to opportunit

ies that promote access to ﬁnance

and economic inclus

ion.

Our goal is to help companies improve working and

environmental standards and give everyone the chance

to partic

ipate

in the world economy, so growth becomes

fairer and more balanced. We stand for a new model of

globalisat

ion based on transparency,

inclus

ion and d

ialogue.

Globalisat

ion has l

ifted mill

ions out of poverty, but too many

people have been left behind. We advocate a new, more

inclus

ive model of global

isat

ion based on transparency

and fairness. We aim to increase transparency across

supply chains to enable consumer choice and drive

responsible trade. In addit

ion, we want to make global

trade more equitable by improv

ing access to ﬁnance for

smaller suppliers that often lack adequate ﬁnanc

ing.

Lift

ing

Partic

ipat

ion

Resetting

Globalisat

ion

In 2022, we were part of a

consortium of banks which

created a EUR350 mill

ion

green trade facil

ity for

Polestar, an electric

performance car maker.

Case study

Supporting

the rollout of

electric vehicles

in Sweden

See

pages 326 and 327

In October, we launched

Trade Track-It, a dig

ital

transaction tracking portal

which gives our clients

end-to-end vis

ity of

their trade-transaction

status globally.

Case study

Real-time trade

transaction

status with

Trade Track-It

See

pages 232 and 233

Throughout 2022, thousands

of women were able to grow

their businesses by using our

collateral-free subsid

ised

loans product for female

micro-entrepreneurs.

Case study

Helping

female

entrepreneurs

thrive

See

page 9

Strategic report

Our Stands

Standard Chartered

– Annual Report 2022

Strategic report

Standard Chartered

– Annual Report 2022

Standard Chartered

– Annual Report 2022

Strategic report

Client segment reviews

Capital-lite income refers to products with low RWA consumption or of a

non-funded nature. This mainly includes Cash Management and FX products

Our next-generation Client dig

ital transact

ion in

iat

ion platform.

Reconcil

iat

ions from underlying to statutory and deﬁn

ions of alternative.

performance measures (APM) can be found on pages 80-85

FY 2020 and FY 2021 Income is adjusted for aviat

ion deprec

iat

ion for Income

RoRWA calculation



Partnering with SAP

Taulia for sustainable

supply chains



In October, we signed a framework agreement to

collaborate with SAP Taulia, a market leader in working

capital solutions. As part of the agreement, we will work

with Taulia to provide clients access to supply chain ﬁnance

through our unique emerging-markets network. This will

help our clients to make their supply chains more resil

ient

and sustainable by enabling their suppliers to gain access

to working capital more efﬁc

iently and cost effect

ively. This

is the ﬁrst agreement that Taulia has signed with a banking

inst

itut

ion, following its acquis

ion by SAP.

Segment overview

Corporate, Commercial and Institut

ional Bank

ing (CCIB)

supports local and large corporations, governments, banks

and investors with their transaction banking, ﬁnanc

ial markets

and borrowing needs. We provide solutions to more than

20,000 clients in some of the world’s fastest-growing

economies and most active trade corridors. Our clients

operate or invest across 50 markets across the globe.

Our strong and deep local presence enables us to help

co-create bespoke ﬁnancing solut

ions and connect our clients

multilaterally to investors, suppliers, buyers and sellers. Our

products and services enable our clients to move capital,

manage risk and invest to create wealth. Our clients represent

a large and important part of the economies we serve. CCIB is

at the heart of the Group’s Purpose to drive commerce and

prosperity through our unique divers

ity.

We are also committed to sustainable ﬁnance in our markets

and to channelling capital where the impact will be greatest.

We are deliver

ing on our amb

ion to support susta

inable

economic growth, increas

ing support and fund

ing for ﬁnanc

ial

offerings that have a posit

ive

impact on our communit

ies and

environment.

Strategic prior

ies

•

Deliver sustainable growth for clients by leveraging our network to

facil

itate trade, cap

ital and investment ﬂows across our footprint

markets.

•

Generate high-quality returns by improv

ing fund

ing quality and

income mix, growing capital-lite

income and driv

ing balance sheet

velocity while mainta

ing disc

ipl

ined risk management.

•

Be the leading dig

ital bank

ing platform, provid

ing

integrated

solutions to cater to our clients’ needs and enhance client

experience, and partnering with third parties to expand capabil

ies

and access new clients.

•

Accelerate our sustainable ﬁnance offering to our clients through

product innovat

ion and enabl

ing the transit

ion to a low-carbon

future.

Progress

•

Our underlying income is driven by our divers

iﬁed product su

ite and

expanded client solutions is supported by the ris

ing

interest rate

environment. Our network income currently contributes to 57 per

cent of total CCIB income with growth across strategic network

corridors.

•

Improved balance sheet quality with investment-grade net

exposures represent 70 per cent of total corporate net exposures

(2021: 64 per cent) and high-quality operating account balances at

67 per cent of Transaction Banking and Securit

ies Serv

ices customer

balances (2021: 63 per cent).

•

Migrated more than 73,000 client entit

ies to our S2B

NextGen

platform and increased S2B cash payment transaction volumes by

10.3 per cent.

•

We are half of the way towards developing our $1 bill

ion

income

from sustainable ﬁnance franchise.

Performance highl

ights

•

Underlying proﬁt before tax of $4,100 mill

ion, up 31 per cent,

primar

ily dr

iven by higher income, partially offset by higher

expenses and credit impa

irment charges.

•

Underlying operating income of $10,045 mill

ion, up 19 per cent, w

ith

Cash Management in Transaction Banking beneﬁt

ing from r

ing

interest rates and strong Macro Trading activ

ity

in Financ

ial

Markets.

•

Risk-weighted assets down $20 bill

ion s

ince 31 December 2021,

mainly as a result of optim

isat

ion in

iat

ives and favourable

currency movement, partly offset by business growth and

regulatory impact.

•

Underlying RoTE increased from 9.6 per cent to 13.7 per cent.

Corporate,

Commercial and

Institut

ional Bank

ing

KPIs

Contribut

ion of F

inanc

ial Inst

itut

ions segment

Aim:

Drive growth in high-returning Financ

ial Inst

itut

ions segment.

Analysis:

Share of Financ

ial Inst

itut

ions

income improved to 45 per

cent of total CCIB client income in 2022 as we allocate more capital

to this segment to drive income and returns.

Improving CCIB Income RoRWA

Aim:

Achieve RoRWA of 6.5% by 2024.

Analysis:

CCIB income RoRWA improved to 6.5% in 2022, up 160bps

YoY and in line with our 2024 target, driven by higher income and

disc

ipl

ined risk management.

Risk-weighted assets (RWA)

$144bn

$20bn

Proﬁt before taxation

$4,100

31%

underlying basis

$4,050

35%

statutory basis

13.6

430bps

statutory basis

Return on tangible equity (RoTE)

13.7

410bps

underlying basis

6.5

2022

2021

2020

4.9

2022

2021

2020

Standard Chartered

– Annual Report 2022

Strategic report



Our ﬁrst ever ESG

Structured Note



In February, we issued our ﬁrst ever ESG Structured

Note for afﬂuent clients in Hong Kong and Singapore.

The note received strong interest from clients,

generating $100 mill

ion of new sales

in less than two

weeks, with the ﬁnal amount raised standing at

$370m. Use of proceeds from the note includes both

green and social categories, enabling prior

ity and

private banking clients to have exposure to our

impactful emerging-markets asset base.

Segment overview

Consumer, Private and Business Banking serves more than

10 mill

ion

ind

iduals and small businesses, with a focus on the

afﬂuent and emerging afﬂuent in many of the world’s

fastest-growing markets. We provide dig

ital bank

ing services

with a human touch to our clients, with solutions spanning

across deposits, payments, ﬁnanc

ing and Wealth

Management. Private Banking offers a full range of

investment, credit and wealth planning products to grow, and

protect, the wealth of high-net-worth ind

iduals. We also

support our small business clients with their business banking

needs.

We are closely integrated with the Group’s other client

segments; for example, we offer employee banking services to

Corporate, Commercial and Institut

ional Bank

ing clients, and

Consumer, Private and Business Banking also provides a

source of high-quality liqu

ity for the Group.

Increasing levels of wealth across Asia, Africa and the Middle

East support our opportunity to grow the business sustainably.

We aim to continuously uplift the client experience and

improve productiv

ity by dr

ing end-to-end d

ital

isat

ion and

process simpl

iﬁcation.

Strategic prior

ies

•

Be a leading internat

ional Afﬂuent franch

ise with dist

inct

ive client

value proposit

ions to unlock the value of our Afﬂuent cl

ient

continuum.

•

Maxim

ise the reach of our deep-rooted

internat

ional network, w

ith

Hong Kong, Singapore, UAE and Jersey as our wealth advisory hubs

•

Deliver advisory-led wealth proposit

ions w

ith dig

ital-ﬁrst and

personalised experiences, leveraging an open architecture

platform with best-in-class product offering.

•

Proﬁtable Personal Banking franchise enabled by partnerships,

data and dig

ital

infrastructure.

•

A mobile-ﬁrst dig

ital channel strategy offer

ing exceptional

end-to-end client experience.

•

Continuous improvement in ways of working for process

simpl

iﬁcation and operat

ional excellence.

Progress

•

Strong afﬂuent client growth momentum across Prior

ity Bank

ing

and Private Banking.

•

Strong traction on Standard Chartered-INSEAD Wealth Academy

with more than 350 senior frontline staff across Hong Kong and

Singapore on the development journey.

•

Launched myWealth suite of dig

ital adv

isory tools to deliver

personalised portfolio construction and investment ideas for

clients; recognised as a leader in dig

ital wealth capab

ies with

more than 15 industry awards received in 2022.

•

Enhanced dig

ital exper

ience in key markets focusing on frict

ionless

mobile experience, leading to an average rating of 4.4 on App Store

and Play Store in Hong Kong, Singapore, India, China and Pakistan.

•

Continued Personal ‘scale through automation’ transformation

accelerated by acquir

ing customers from partnersh

ips, engaging

and cross-selling dig

itally, and serv

ing them through low-cost

channels.

•

Seven Mass Retail partnerships instances live in China, Indonesia

and Vietnam, reaching more than 1.2 mill

ion cl

ients.

Performance highl

ights

•

Underlying proﬁt before tax of $1,596 mill

ion was up 30 per cent

driven by higher income and lower expenses and credit

impa

irments.

•

Underlying operating income of $6,016 mill

ion was up 5 per cent (up

10 percent constant currency). Asia was up 5 per cent and Africa

and the Middle East, and Europe was up 4 per cent. Expenses were

well managed and down 2 per cent.

•

Strong income momentum growth mainly from Deposits up 138 per

cent with improved margins and balance sheet growth. These were

offset by slow down in Wealth Management products due to risk

off sentiment and Mortgages margin compression impacted by a

ris

ing

interest rate environment.

•

Underlying RoTE increased from 11.6 per cent to 15.8 per cent.

Reconcil

iat

ions from underlying to statutory and deﬁn

ions of alternative

performance measures (APM can be found on pages 80-85)

Consumer, Private

and Business Banking

KPIs

Afﬂuent Wealth Active Clients (YoY %)

Aim:

Grow and deepen client relationsh

ips,

improve investment

penetration and attract new clients.

Analysis:

Afﬂuent Wealth Active Clients stands at 857,000 clients in

2022, deliver

ing growth of 5 per cent.

Dig

ital Sales for Reta

il Products

Aim:

Accelerate the Group’s dig

ital offer

ings to enable clients to be

on-boarded dig

itally, thereby reduc

ing manual processes and

improv

ing efﬁciency.

Analysis:

Online applicat

ions for Reta

il Products have continued to

grow with the proportion increas

ing from 38 per cent

in 2020 to

48 per cent at the end of 2022.

Risk-weighted assets (RWA)

$51bn

$1bn

Proﬁt before taxation

$1,596

30%

underlying basis

$1,533

55%

statutory basis

Return on tangible equity (RoTE)

15.8

420bps

underlying basis

2022

2021

2020

2022

2021

2020

15.2

580bps

statutory basis

Standard Chartered

– Annual Report 2022

Strategic report

Client segment reviews

Ventures

KPIs

Gross Transaction Value

$16

$6bn

Customers

Underlying Loss

before taxation

$363

39%

New Minor

ity

Investments

$153

42%

Risk-weighted assets (RWA)

$1.4

$0.6bn

New Ventures launched



Solv goes from

strength to strength



Lift

ing the part

ipat

ion of micro and small businesses

in the economy, Solv, our B2B e-commerce platform,

raised $40 mill

ion

in Series-A funding in June 2022.

Build

ing on

its strong performance in India and

continu

ing expans

ion plans, Solv launched in Kenya

in October 2022 and now has a network of

approximately 300,000 micro and small businesses.

Solv has plans to grow further, aim

ing to be present

more than 300 cit

ies

in India, scale in Africa and enter

Southeast Asia in 2023. Solv announced its platform

launch in December 2020 targeting micro, small and

medium enterprises in India.

Segment overview

As part of the ongoing execution of its refreshed strategy, the

Group has expanded and reorganised its reporting structure

with the creation of a third client segment, Ventures, effective

on 1 January 2022. Ventures is a consolidat

ion of SC Ventures

and its related entit

ies as well as the Group’s two majority-

owned dig

ital banks, Mox

in Hong Kong and Trust Bank in

Singapore.

•

SC Ventures is the platform and catalyst for the Group to

promote innovat

ion,

invest in disrupt

ive ﬁnancial technology

and explore alternative business models.

•

Mox, a cloud-native, mobile-only dig

ital bank, was launched

in Hong Kong as a jo

int venture w

ith HKT, PCCW and Ctrip

in September 2020.

•

Trust Bank was launched in Singapore in partnership with

FairPr

ice Group, the nat

ion’s leading grocery retailer, in

September 2022.

Strategic prior

ies

•

SC Ventures’

focus is on build

ing and scal

ing new business models

– across the four themes of Online Economy & Lifestyle, SMEs &

World Trade, Dig

ital Assets and Susta

inab

ity & Inclusion. We do

this by connecting ecosystems, partners and clients to create value

and new sources of revenue, provid

ing opt

ional

ity for the Bank.

SC Ventures is also advancing the Fintech agenda – ident

ify

ing,

partnering and taking minor

ity

interests through the fund in

companies that provide technology capabil

ies, which can be

integrated into the Bank and Ventures. Focus is on innovat

ive,

fast-growing, technology-focused companies which accelerate

transformation in the ﬁnanc

ial

industry.

•

Mox

continues to grow the customer base and drive main bank

relationsh

ips across mass and mass afﬂuent segments

in Hong

Kong. Mox’s vis

ion

is to build the global benchmark for dig

ital

banking. It aims to be the leading virtual bank in Hong Kong for

Cards and Dig

ital Lend

ing and continues to further expand

services, includ

ing the soon-to-launch D

ital Wealth Management

services.

•

Trust Bank

is targeting continued strong growth, in particular

through its deep and extensive partner ecosystem, and to establish

itself as a scale player in the mass and upper mass consumer

segment in Singapore.

Progress

•

SC Ventures

marks its ﬁfth year anniversary in 2023. Some of the

key achievements include build

ing a d

iverse portfolio of over 30

ventures and 20+ investments. Our ventures processed $16 bill

ion of

transactions in 2022 with a customer base of 1 mill

ion. By work

ing

with strategic partners like SBI Holdings, we will accelerate the

growth of Solv, the B2B dig

ital marketplace for m

icro, small and

medium enterprises and connect with a wider ecosystem across

multiple markets. Our Financ

ial Conduct Author

ity (FCA)

authorised, inst

itut

ional grade crypto businesses, Zodia Custody

and Zodia Markets, commenced onboarding clients during the

year.

• In 2022,

Mox

had a strong focus on expanding its card and dig

ital

lending services and recorded a strong performance and an

engaged customer base. Mox has more than 400,000 customers,

up two times year-on-year, and Mox customers had on average 3.1x

products. Mox was named as the most recommended virtual bank

in Hong Kong and continued to be the number one rated virtual

bank app in Hong Kong on the Apple App Store.

•

With

in ﬁve months of launch,

Trust Bank

scaled rapidly to over

450,000 customers, equating to around 9 per cent of the

addressable market in Singapore, and making it one of the world’s

fastest growing dig

ital banks. Customer engagement was strong,

with almost 7 mill

ion transact

ions made, and more than 400,000

dig

ital coupons redeemed through the app dur

ing this period.

Performance highl

ights

•

Underlying loss before tax of $363 mill

ion was up $102 m

ill

ion, dr

iven

mainly by higher expenses as we continue to invest in new and

exist

ing ventures.

•

Risk-weighted assets of $1.4 bill

ion have

increased $0.6 bill

ion

mainly due to continued investment in new and exist

ing ventures

and minor

ity

interests.

Customers

Gross Transaction Value

2022

2021

2022

2021

Standard Chartered

– Annual Report 2022

Strategic report

Region overview

The Asia region has a long-standing and deep franchise

across the markets and some of the world’s fastest-growing

economies. The region generates over two-thirds of the

Group’s income from its extensive network of 21 markets.

Of these, Hong Kong and Singapore contributed the highest

income, underpinned by a divers

iﬁed franch

ise and deeply

rooted presence.

The region is highly interconnected, with three dist

inct and

potent sub-regions: Greater China, ASEAN and South Asia.

Our global footprint and strong regional presence, dist

inct

ive

proposit

ion, and cont

inued investment posit

ion us strongly

to capture opportunit

ies as they ar

ise from the continu

ing

opening up of China’s economy, the growing connectiv

ity of

ASEAN, and the strong economic growth of India.

The region is beneﬁt

ing from r

ing trade ﬂows, cont

inued

strong investment, and a ris

ing m

iddle class, which is driv

ing

consumption growth and improv

ing d

ital connect

ity.

Strategic prior

ies

•

Leverage our network strength to serve the inbound and outbound

cross-border trade and investment needs of our clients, particularly

across high-growth corridors e.g., China–ASEAN, China–South Asia,

Korea-ASEAN

•

Capture opportunit

ies ar

ing from Ch

ina’s opening, and accelerate

growth in ASEAN and India/South Asia.

•

Turbocharge our Afﬂuent and Wealth Management businesses

through different

iated propos

ions and serv

ice.

•

Continue to invest and advance in technology, dig

ital capab

ies

and partnerships to enhance the client experience and build

scale efﬁciently.

•

Support clients’ sustainable ﬁnance and transit

ion needs and

continue to strengthen our thought leadership status.

Progress

•

We have continued to advance our China strategy both onshore

and offshore, with steady progress in capturing afﬂuent growth,

adding new clients through dig

ital partnersh

ips and growing

internat

ional trade and

investment corridors.

In 2022 the China

business delivered its highest ever onshore income while also

growing network income strongly, with the China-ASEAN and

China-South Asia corridors being respectively up 62 per cent and

21 percent year-on-year.

Progress was made in the dig

ital reta

space with new partnerships involv

ing JD.com and WeBank.

•

Our two strong internat

ional ﬁnancial hubs

in Hong Kong and

Singapore, which enable us to serve the three sub-engines of

economic growth in Asia, continued to be the highest income

contributors in the region.

Income growth was driven by the

Afﬂuent segment and Transaction Banking, helped in part by

ris

ing

interest rates, and also by Financ

ial Markets.

•

Execution of our strategy in the Greater Bay Area (“GBA”) continues

to be on track with the establishment of a solid cross border wealth

management platform and strong growth in new economy sectors

and in network business.

•

The CPBB dig

ital agenda cont

inues to progress.

Mox has the

second largest deposit base among virtual banks in Hong Kong

while Trust Bank, in partnership with Fairpr

ice Group

in Singapore,

has onboarded more than 450,000 customers after ﬁve months of

its launch.

Performance highl

ights

•

Underlying proﬁt before tax of $3,688 mill

ion was up 8 per cent,

primar

ily from h

igher income partly offset by higher credit

impa

irment from charges on Ch

ina Commercial Real Estate

exposures and the sovereign ratings downgrade of Sri Lanka.

•

Underlying operating income of $11,213 mill

ion was up 7 per cent

(up 12 per cent on a constant currency), mainly driven by a strong

Financ

ial Markets performance and an expans

ion in the net

interest margin beneﬁt

ing Cash Management and Reta

Deposits. This was partially offset by lower Lending and Wealth

Management income as market condit

ions reduced transact

ion

volumes, as well as the impact of COVID-19 restrict

ions

impact

ing

in our key markets, Hong Kong and China.

•

Loans and advances to customers were up 2 per cent (up 6 per cent

on a constant currency), Customer accounts were down 3 per cent

(ﬂat on a constant currency) since 31 December 2021.

•

Risk-weighted assets (RWA) were down $19 bill

ion s

ince

31 December 2021 as we continue to focus on RWA optim

isat

ion.

Asia

Proﬁt before taxation

$3,688

underlying basis

Risk-weighted assets (RWA)

$151

$19bn

$3,325

17%

statutory basis

Income split by key markets

Loans and advances

to customers

(% of group)



Planting trees in Sri

Lanka and Malaysia



Our employees planted more than 1,000 trees in

Sri Lanka and Malaysia in 2022. Between March and

October in Sri Lanka, employees planted 650 trees in

total, both as part of an employee challenge and the

Bank’s global employee volunteering campaign.

Meanwhile, between August and December, as

part of our Taman Tugu Donation and Tree Planting

Programme, employees in Malaysia planted

500 trees. Taman Tugu is a 66-acre regenerated

forest park located in Kuala Lumpur city centre.

Hong Kong

Singapore

India

Others

Standard Chartered

– Annual Report 2022

Strategic report

Regional reviews



Celebrating our launch

in Egypt



In 2022, we received ofﬁc

ial approval from the Central

Bank of Egypt in for our ﬁrst branch in the market.

The branch, designated to be ofﬁc

ially launched

in 2023,

will be part of a fully-ﬂedged banking operation in Egypt

replacing our current representative ofﬁce set-up.

Region overview

We have a deep-rooted heritage in Africa and Middle East

(AME), of which the United Arab Emirates, Pakistan, Kenya,

Niger

ia, South Afr

ica, and Ghana are the largest by income.

A rich history, deep client relationsh

ips and a un

ique footprint

in the region, as well as across centres in Asia, Europe, and the

Americas, enable us to seamlessly support our clients. AME is

an important element of global trade and investment

corridors and we are well placed to facil

itate these ﬂows.

Gulf Cooperation Council (GCC) markets are expected to

outpace global growth on the back of oil price recovery, higher

government spend and bilateral trade negotiat

ions. The

macro-economic risk remains elevated in Pakistan and some

markets in Africa due to a high level of sovereign debt and FX

liqu

ity challenges. Overall, AME’s medium and long-term

attractiveness remains compelling and intact, and it is an

important part of our global network proposit

ion for our

clients.

Strategic prior

ies

•

Provide best-in-class structuring and ﬁnanc

ing solut

ions and drive

creation through client in

iat

ives.

•

Invest to accelerate growth in different

iated

internat

ional network

and Afﬂuent Client businesses.

•

Invest in market-leading dig

isat

ion

iat

ives

in CPBB to protect

and grow market share in core markets, continue with our

transformation agenda to recalibrate our network and streamline

structures.

•

Be an industry leader in the transit

ion to net zero across the reg

ion.

•

Refocusing and simpl

ify

ing our presence in AME.

Progress

•

We have strengthened our footprint with the approval for a

banking licence in Egypt.

•

We have once again led the AME bond and Sukuk markets in 2022,

taking the top spot in the AME league tables and ranking #1 in

MENA G3 issuance for the ﬁfth year in a row. Our commitment to

ESG across Debt Capital Markets (DCM) helped us almost double

our issuance ESG volumes and brought the year’s most innovat

ive

deals to market.

•

On Sustainable Finance we have brought new ideas to the market,

and supported our clients with closing market ﬁrsts and landmark

transactions that are creating a strong reputation for us among

clients.

•

We have successfully launched end-to-end dig

ital onboard

ing in

Pakistan with embedded eKYC (Electronic Know Your Customer),

allowing clients to seamlessly open accounts from the SC Mobile

App. We have also expanded our agent banking proposit

ion to ﬁve

countries, helping to drive ﬁnanc

ial

inclus

ion by offer

ing multiple

touchpoints for clients to transact.

•

We have expanded dig

ital wealth management solut

ions in Kenya

and UAE. Our micro-investment solution in Kenya has attracted 85

per cent new to wealth clients, while in UAE, clients have access to

online Trade FX and online Equit

ies.

•

Broad-based growth in income across products, with Financ

ial

Markets at the highest level since 2015.

•

Continu

ing cost d

isc

ipl

ine has allowed investments to continue

through the cycle. Cost to Income Ratio lower at 64 per cent (vs. 66

per cent in ‘21) and Revenue / Headcount has grown 11 percent vs

FY’21.

Performance highl

ights

•

Underlying working proﬁt of $937 mill

ion (up 25 per cent on

constant currency basis) was driven by higher income and

disc

ipl

ined cost management. Underlying proﬁt before tax of $819

mill

ion (up 4 per cent on constant currency bas

is) despite higher

loan impa

irment that

is primar

ily related to prov

ions for sovere

ign

downgrades in Ghana & Pakistan.

•

Underlying operating income of $2,606 mill

ion was up 7 per cent

(up 14 per cent constant currency) driven by growth in Transaction

Banking, Financ

ial Markets and Reta

il. Income was up 9 per cent

(up 15 per cent constant currency) in Middle East, North Africa, &

Pakistan and up 3 per cent (up 13 per cent constant currency) in

Africa.

•

Risk-weighted assets (RWA) were 17 per cent lower than December

2021, despite the impact of sovereign downgrades, due to

continu

ing RWA opt

isat

ion activ

ies and de-risk

ing

in markets

with elevated macro-economic risk.

•

Loans and advances to customers were down 14 per cent (9 per

cent down on constant currency basis) and customer accounts

were down 8 per cent (3 per cent down on constant currency basis)

since 31 December 2021.

Africa and the

Middle East

Proﬁt before taxation

$819

underlying basis

Risk-weighted assets (RWA)

$41

$8bn

$790

statutory basis

Loans and advances

to customers

(% of group)

Income split by key markets

UAE

Pakistan

Kenya

Others

Standard Chartered

– Annual Report 2022

Strategic report

Region overview

The Group supports clients in the region through hubs in

London, Frankfurt and New York, as well as a presence in

several other markets in Europe and Americas. Our expertise

in Asia, Africa and the Middle East allows us to offer our clients

in the region unique network and product capabil

ies.

The region generates sign

iﬁcant

income for the Group’s

Corporate, Commercial and Institut

ional Bank

ing business.

Clients based in Europe and Americas make up around

one-third of the Group’s CCIB income, with three-quarters of

client income booked in the network generating above-

average returns.

In addit

ion to be

ing a key orig

inat

ion centre for CCIB, the

region offers local, on-the-ground expertise and solutions to

help internat

ionally m

inded clients grow across Europe and

Americas. The region is home to the Group’s two biggest

payment clearing centres and the largest trading ﬂoor with

more than 90 per cent of the region’s income orig

inat

ing from

Financ

ial Markets and Transact

ion Banking products.

Our European CPBB business focuses on serving clients with

links to our footprint markets.

Strategic prior

ies

•

Leverage our network capabil

ies to connect new and exist

ing

Corporate and Financ

ial Inst

itut

ions cl

ients in the west to the

fastest-growing and highest-potential economies across our

footprint.

•

Supercharge our Financ

ial Inst

itut

ions (FI) Franch

ise.

•

Grow the business we capture from inbound trade ﬂows from our

east to west corridors.

•

Further develop our sustainable ﬁnance product offering and risk

management capabil

ies.

•

Enhance capital efﬁc

iency, ma

inta

in strong r

isk oversight, and

further improve the quality of our funding base.

•

Expand assets under management in CPBB and continue to

strengthen the franchise.

Progress

•

Strong growth of 20 per cent in global cross-border network

business with Europe & Americas CCIB clients across key footprint

markets.

•

FI segment growth of 25 per cent, now accounting for 56 per cent of

the CCIB business for European & Americas clients.

•

Expanded Financ

ial Markets Product offer

ing in our German

subsid

iary to enable more

inbound trade ﬂow.

•

Material growth in income from sustainable ﬁnance products and

expansion of our sustainable product offering.

•

Sign

iﬁcant

increase in high-quality liab

ies d

ivers

ify

ing the region’s

funding base.

•

CPBB cost saving in

iat

ives executed, w

ith strong progress made in

refocusing the Private Banking segment towards Ultra High Net

Worth clients together with the successful migrat

ion of CPBB cl

ients

from London to the Jersey booking centre.

Performance highl

ights

•

Underlying proﬁt before tax of $863 mill

ion

improved 34 per cent,

driven by higher income and lower impa

irments. Pos

ive

income to

cost jaws of 12 per cent.

•

Underlying operating income of $2,353 mill

ion was up 17 per cent

due to a strong performance from Financ

ial Markets Macro

products, and improvement in cash deposit volumes and margins

across CCIB and CPBB.

•

Expenses increased by 5 per cent or 9 per cent on a constant

currency basis largely due to the increased Investment spend and

performance-related pay.

Europe and

the Americas

Proﬁt before taxation

$863

34%

underlying basis

Risk-weighted assets (RWA)

$50

$840

46%

statutory basis

Income split by key markets

Loans and advances

to customers

(% of group)



Launching our ﬁrst

Green Trade Export

Letter of Credit

programme



In August, we launched our ﬁrst Green Trade Export Letter

of Credit programme in Singapore, New York and London,

working with food and nutrit

ion company ADM (Archer-

Daniels-Midland).

The $500 mill

ion letter of cred

it programme will cover

ADM’s shipment of commodit

ies,

includ

ing soybeans,

oilseeds and cotton from Latin America, the US, and

Australia to European markets. Issued under the

‘Sustainable Goods’ pillar of the Bank’s Green and

Sustainable Product Framework, the transaction helps

advance ADM’s widen

ing efforts to expand susta

inable

farming practices and source sustainably produced goods.

Others



Back to

growth and

improv

ing

returns



Andy Halford

Group Chief Financ

ial Ofﬁcer

Group Chief Financ

ial

Ofﬁcer’s review

Strategic report

Group Chief Financ

ial Ofﬁcer’s rev

iew

Standard Chartered

– Annual Report 2022

Standard Chartered

– Annual Report 2022

Strategic report

Summary of ﬁnancial performance

The Group delivered a strong performance in 2022

generating a 120 basis point uplift in underlying return on

tangible equity to 8.0 per cent with underlying proﬁt before

tax increas

ing 15 per cent on a constant currency bas

is.

Income at $16.3 bill

ion, grew 15 per cent on a constant currency

basis excluding DVA, and is at its highest level since 2014,

with a record performance in Financ

ial Markets and strong

expansion in the net interest margin. Loans and advances to

customers grew an underlying 3 per cent despite the ris

ing

interest rate environment. Expenses increased 9 per cent

at constant currency, due to continued investment in the

business, salary inﬂat

ion, and

increased performance-related

pay on the back of business performance. Credit impa

irment

charges increased to $838 mill

ion

includ

ing further charges

relating to the China commercial real estate sector and the

impact of sovereign-related downgrades. However, the

loan-loss rate of 21 basis points remains well below our histor

through-the-cycle loan loss range. The Group remains well

capital

ised and h

ighly liqu

id w

ith a CET1 ratio of 14.0 per cent

at the top end of its target range enabling the Board to

announce a 50 per cent increase in the full-year div

idend

and a further $1 bill

ion share buy-back programme to start

imm

inently.

All commentary that follows is on an underlying basis and

comparisons are made to the equivalent period in 2021 on a

reported currency basis, unless otherwise stated.

•

Operating income

increased 10 per cent, or 15 per cent

on a constant currency basis, normalis

ing for a $27 m

ill

ion

posit

ive movement

in DVA. About half of the growth in

income was from strong, sustained business momentum,

through a combinat

ion of balance sheet growth and

increased fee and trading income, with the remain

ing

increase reﬂecting the beneﬁt of a higher interest rate

environment

•

Net interest income

increased 12 per cent or 18 per cent on a

constant currency basis. The net interest margin averaged

141 basis points and is 20 basis points higher year-on-year

aided by ris

ing

interest rates despite a 4-basis point

negative impact from short-term and structural hedges

•

Other income

increased 9 per cent, with a record

performance in Financ

ial Markets partly offset by lower

Wealth Management income impacted by subdued

market condit

ions

•

Operating expenses

excluding the UK bank levy increased

4 per cent and were up 7 per cent on a constant currency

basis after adjust

ing for the

increase in performance-

related pay driven by the strong business performance.

The underlying expense growth reﬂects the impact of a

high-inﬂat

ion env

ironment includ

ing the

impact on salary

increases, addit

ional

investment into transformational

dig

ital capab

ies and headcount. The cost-to-income ratio

decreased 4 percentage points to 66 per cent excluding

DVA and UK bank levy and the Group generated 6 per cent

posit

ive

income-to-cost jaws at constant currency excluding

DVA

•

Credit impa

irment

was $838 mill

ion, an

increase of

$575 mill

ion. The

impa

irment charge

includes $582 mill

ion

relation to China commercial real estate sector and

$283 mill

ion

in relation to sovereign downgrades partly

offset by releases in the management overlay relating to

COVID-19. Total credit impa

irment of $838 m

ill

ion represents

a loan-loss rate of 21 basis points, a year-on-year increase

of 14 basis points in the cost of risk, but still well below the

histor

ic through-the-cycle loan loss range of 30 to 35 bas

points.

•

Other impa

irment

increased by $24 mill

ion to $79 m

ill

ion.

The $300 mill

ion

impa

irment charge recorded

in 2021

relating to the Group’s investment in its associate China

Bohai Bank (Bohai) has been reclassif

ied out of underly

ing

performance and into goodwill and other impa

irments. The

remain

ing other

impa

irment pr

imar

ily relates to the av

iat

ion

leasing portfolio

•

Proﬁt from associates and jo

int ventures

decreased 5 per

cent to $167 mill

ion reﬂect

ing a lower proﬁt share from Bohai

• Charges relating to

restructuring, other items and goodwill

and other impa

irment

reduced by $373 mill

ion to

$476 mill

ion, w

ith $333 mill

ion lower restructur

ing costs,

princ

ipally a non-repeat of the pr

ior-year retirement

programme in Korea. Goodwill and other impa

irment of

$322 mill

ion

is $22 mill

ion h

igher year-on-year following a

$14 mill

ion wr

ite off of the goodwill relating to Bangladesh.

Furthermore, there has been a $308 mill

ion

impa

irment

relating to Bohai, primar

ily a result of

industry challenges

and uncertaint

ies that may

impact proﬁtab

ity.

•

Taxation

was $1,384 mill

ion on a statutory bas

is, with a

statutory effective tax rate of 32 per cent. Taxation on

underlying proﬁts was at an effective rate of 30 per cent, an

increase of 3 percentage points compared to 2021 primar

ily

driven by lower prior year credits and higher taxes in UK,

Pakistan and US.

• Underlying

return on tangible equity

increased 120 basis

points to 8.0 per cent due to the increase in proﬁts and

lower tangible equity, reﬂecting shareholder distr

ibut

ions

and adverse movements in reserves due to movements in

interest rates and currency translation. The reclassif

icat

ion

of the 2021 Bohai impar

iment out from underly

ing

performance increased the 2021 underlying return on

tangible equity by 80 basis points to 6.8 per cent and has

made the treatment of Bohai impa

irment cons

istent across

both the 2021 and 2022 computation of underlying return

on tangible equity

• Underlying basic

earnings per share (EPS)

increased 18 per

cent to 101.1 cents and statutory EPS of 85.9 cents increased

by 40 per cent

• A ﬁnal

ordinary div

idend

per share of 14 cents has been

proposed taking the full-year total to 18 cents, a 50 per cent

increase along with a new share buy-back programme of

$1 bill

ion, tak

ing total shareholder distr

ibut

ions announced

since the start of 2022 to $2.8 bill

ion

Standard Chartered

– Annual Report 2022

Strategic report

Group Chief Financ

ial Ofﬁcer’s rev

iew

Summary of ﬁnancial performance

2022

$mill

ion

2021

$mill

ion

Change

Constant

currency

change¹

Net interest income

7,599

6,807

Other income

8,656

7,906

Underlying operating income

16,255

14,713

Other operating expenses

(10,641)

(10,275)

(4)

(9)

UK bank levy

(102)

(100)

(2)

(15)

Underlying operating expenses

(10,743)

(10,375)

(4)

(9)

Underlying operating proﬁt before impa

irment and taxat

ion

5,512

4,338

Credit impa

irment

(838)

(263)

nm³

Other impa

irment

(79)

(55)

(44)

(46)

Proﬁt from associates and jo

int ventures

167

176

(5)

Underlying proﬁt before taxation

4,762

4,196

Restructuring

(174)

(507)

Goodwill and Other impa

irment

(322)

(300)

(7)

(8)

Other items

(42)

148

Statutory proﬁt before taxation

4,286

3,347

Taxation

(1,384)

(1,034)

(34)

(44)

Proﬁt for the year

2,902

2,313

Adjusted net interest margin (%)

1.41

1.21

Underlying return on tangible equity (%)

8.0

6.8

120

Underlying earnings per share (cents)

101.1

85.8

Comparisons presented on the basis of the current period’s transactional currency rate, ensuring like-for-like currency rates between the two periods

Change is the basis points (bps) difference between the two periods rather than the percentage change

3 Not meaningful

Goodwill and Other impa

irment

include $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021

comparative has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt to Goodwill and

Other impa

irment. The 2021 Underly

ing earnings per ordinary share (cents) has been correspondingly restated to reﬂect this reclassif

icat

ion

Statutory ﬁnancial performance summary

2022

$mill

ion

2021

$mill

ion

Change

Constant

currency

change¹

Net interest income

7,593

6,798

Other income

8,725

7,903

Statutory operating income

16,318

14,701

Statutory operating expenses

(10,913)

(10,924)

–

(6)

Statutory operating proﬁt before impa

irment and taxat

ion

5,405

3,777

Credit impa

irment

(836)

(254)

nm³

Goodwill and Other impa

irment

(439)

(372)

(18)

(19)

Proﬁt from associates and jo

int ventures

156

196

(20)

Statutory proﬁt before taxation

4,286

3,347

Taxation

(1,384)

(1,034)

(34)

(44)

Proﬁt for the year

2,902

2,313

Statutory return on tangible equity (%)

6.8

4.8

200

Statutory earnings per share (cents)

85.9

61.3

Comparisons presented on the basis of the current period’s transactional currency rate, ensuring like-for-like currency rates between the two periods

Change is the basis points (bps) difference between the two periods rather than the percentage change

3 Not meaningful

Standard Chartered

– Annual Report 2022

Strategic report

Operating income by product

2022

$mill

ion

2021

(Restated)²

$mill

ion

Change

Constant

currency

change¹

Transaction Banking

3,925

2,886

Trade & Working capital

1,371

1,447

(5)

(1)

Cash Management

2,554

1,439

Financ

ial Markets

5,728

4,899

Macro Trading

2,962

2,216

Credit Markets

1,696

1,790

(5)

(3)

Credit Trading

506

437

Financ

ing Solut

ions & Issuance

1,190

1,353

(12)

(9)

Structured Finance

408

491

(17)

Financ

ing & Secur

ies Serv

ices

620

387

DVA

180

200

Lending & Portfolio Management

562

759

(26)

(22)

Wealth Management

1,802

2,225

(19)

(17)

Retail Products

4,068

3,358

CCPL & other unsecured lending

1,216

1,272

(4)

Deposits

2,044

860

138

157

Mortgage & Auto

635

1,036

(39)

(35)

Other Retail Products

173

190

(9)

(4)

Treasury

348

698

(50)

(47)

Other

(178)

(112)

(59)

(16)

Total underlying operating income

16,255

14,713

Comparisons presented on the basis of the current period’s transactional currency rate, ensuring like-for-like currency rates between the two periods

Following a reorganisat

ion of certa

in clients, there has been a reclassif

icat

ion of balances across products

The operating income by product commentary that follows is

on an underlying basis and comparisons are made to the

equivalent period in 2021 on a constant currency basis, unless

otherwise stated.

Transaction Banking

income increased 42 per cent. Cash

Management income increased 85 per cent reﬂecting strong

pric

ing d

isc

ipl

ine to take advantage of a ris

ing

interest rate

environment. Trade & Working Capital decreased 1 per cent,

with balance sheet growth offset by margin compression. The

margin compression reﬂects a shift towards investment credit

grade clients and a shift in product mix towards lower margin

but more RWA-efﬁcient products.

Financ

ial Markets

income increased 21 per cent and was a

record performance. Macro trading increased 40 per cent

with FX income deliver

ing strong double-d

it growth as

macro events led to increased client demand and elevated

volatil

ity, w

iden

ing b

id-offer spreads. Commodit

ies also

delivered strong double-dig

it growth,

includ

ing a record ﬁrst

quarter, when it beneﬁted from volatil

ity

in energy prices,

while Rates also provided strong double-dig

increase in

income on the back of policy rates increases. Credit Markets

income decreased 3 per cent driven by subdued market

condit

ions

in spite of a strong performance in Credit Trading.

Structured Finance declined 17 per cent with lower fee income

with

in Av

iat

ion F

inance. Financ

ing & Secur

ies Serv

ices

income increased 67 per cent, includ

ing $184 m

ill

ion of ga

ins

on mark-to-market liab

ies and beneﬁting from

improved

margins in Securit

ies Serv

ices.

Lending and Portfolio Management

income decreased

22 per cent due to increased cost of funds and the impact of

risk-weighted asset optim

isat

ion actions.

Wealth Management

income declined 17 per cent as

customer sentiment became more risk-averse in volatile

market condit

ions lead

ing to lower transaction volumes. There

was a negative impact from COVID-19 restrict

ions,

particular in North Asia, resulting in a number of branch

closures and lower footfall which negatively impacted

face-to-face sales. Managed Investments income was down

39 per cent, there was a 6 per cent decline in Treasury Products

income while Bancassurance income declined 6 per cent.

Wealth Management secured lending income fell by a third

on the back of client deleveraging. Net new sales remained

posit

ive albe

it at a lower level than 2021 but assets under

management volumes reduced on the back of negative

market movements.

Retail Products

income increased 29 per cent. Deposit income

increased 157 per cent due to active passthrough rate

management in a ris

ing

interest rate environment, partly

offset by migrat

ion from CASA to t

ime deposits. Mortgages &

Auto income decreased 35 per cent reﬂecting margin

compression with the major

ity of mortgages

in Hong Kong

reaching the Best Lending Rate cap. Credit Cards & Personal

Loans income increased 1 per cent reﬂecting a growth in

credit card balances, particularly in our dig

ital banks Mox

and Trust Bank.

Treasury

income

declined 47 per cent, reﬂecting the losses

from structural and short-term hedges in a ris

ing

interest rate

environment which offset increased yields on the remainder of

the Treasury portfolio.

Standard Chartered

– Annual Report 2022

Strategic report

Group Chief Financ

ial Ofﬁcer’s rev

iew

Proﬁt before tax by client segment and geographic region

2022

$mill

ion

2021

(Restated)

1, 2

$mill

ion

Change

Constant

currency

change²

Corporate, Commercial & Institut

ional Bank

ing

4,100

3,124

Consumer Private & Business Banking

1,596

1,226

Ventures

(363)

(261)

(39)

(42)

Central & other items (segment)

(571)

107

nm³

Underlying proﬁt before taxation

4,762

4,196

Asia

3,688

3,416

Africa & Middle East

819

856

(4)

Europe & Americas

863

644

Central & other items (region)

(608)

(720)

(1)

Underlying proﬁt before taxation

4,762

4,196

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from 1

January 2022. Prior period has been restated

Comparisons presented on the basis of the current period’s transactional currency rate, ensuring like-for-like currency rates between the two periods

3 Not meaningful

As part of the ongoing execution of its refreshed strategy,

the Group has expanded and reorganised its reporting

structure with the creation of a third client segment, Ventures,

effective from 1 January 2022. Ventures is a consolidat

ion of

SC Ventures and its related entit

ies as well as the Group’s two

majority-owned d

ital banks Mox

in Hong Kong and Trust

Bank in Singapore, reported alongside the current client

segments; Corporate, Commercial & Institut

ional Bank

ing

(CCIB) serving larger companies and inst

itut

ions and

Consumer, Private & Business Banking (CPBB) serving

ind

idual and business banking clients. There was no

change to the regional reporting structure.

Corporate, Commercial & Institut

ional Bank

ing

proﬁt

increased 31 per cent as robust Financ

ial Markets and Cash

Management performance drove 19 per cent income growth

excluding posit

ive movements

in DVA. This was partly offset

by a 4 per cent increase in expenses and a $469 mill

ion

increase in impa

irments reﬂect

ing further charges in relation

to the China commercial real estate sector and lower releases

on the remain

ing portfol

io.

Consumer, Private & Business Banking

proﬁt increased 30 per

cent and was 35 per cent higher on a constant currency basis.

Income grew 10 per cent on a constant currency basis with

increased Deposit income partly offset by subdued Wealth

Management and the impact of the Best Lending Rate cap

on Hong Kong mortgage income. On a constant currency

basis, expenses grew 3 per cent and impa

irments decreased

$10 mill

ion.

Ventures

loss increased to $363 mill

ion. Income totalled

$29 mill

ion for the year, w

ith an increas

ing customer base at

Mox and Trust Bank. Expenses increased by a third reﬂecting

further investment into the segment and increased

operational costs to support the sign

iﬁcant

increase in

customer onboarding and transactional volumes with

in the

new dig

ital banks. Other

impa

irment of $24 m

ill

ion was taken

in relation to the value of one of the Group’s investments

with

in the Ventures portfol

io.

Central & other items (segment)

recorded a loss of

$571 mill

ion as

income declined 71 per cent reﬂecting the losses

from structural and short-term hedges booked with

Treasury. Expenses increased 26 per cent while credit

impa

irments were $112 m

ill

ion h

igher as a result of the ratings

downgrades of select sovereigns.

Asia

proﬁts increased 8 per cent on the back of a 7 per cent

increase in income. This was partly offset by 1 per cent

expense growth and an 82 per cent increase in impa

irments

reﬂecting increased charges relating to the China commercial

real estate sector.

Africa & Middle East

proﬁts decreased 4 per cent but grew

4 per cent on a constant currency basis. Income increased

14 per cent while expenses grew 9 per cent, both on a constant

currency basis. Impairments went from a net release in the

prior year to a $118 mill

ion charge, partly due to the sovere

ign

ratings downgrades of Pakistan and Ghana.

Europe & Americas

proﬁt increased by a third with a 17 per

cent increase in income on the back of a strong Financ

ial

Markets and Cash Management performance. Expenses

increased 5 per cent while the net release in credit impa

irment

halved to $77 mill

ion.

Central & other items (region)

loss decreased by $112 mill

ion

to $608 mill

ion due to a 30 per cent

increase in expenses.

Income increased 145 per cent, while impa

irments reduced

by 16 per cent

Standard Chartered

– Annual Report 2022

Strategic report

Adjusted net interest income and margin

2022

$mill

ion

2021

$mill

ion

Change¹

Adjusted net interest income

7,976

6,796

Average interest-earning assets

565,370

559,408

Average interest-bearing liab

ies

525,351

515,769

Gross yield (%)

2.70

1.83

Rate paid (%)

1.38

0.67

Net yield (%)

1.32

1.16

Net interest margin (%)

3,4

1.41

1.21

Variance is better/(worse) other than assets and liab

ies wh

ich is increase/(decrease)

Adjusted net interest income is statutory net interest income excluding funding costs for the trading book and includ

ing ﬁnancial guarantee fees on

interest-

earning assets

Change is the basis points (bps) difference between the two periods rather than the percentage change

Adjusted net interest income div

ided by average

interest-earning assets, annualised

Adjusted net interest income increased 17 per cent driven by a 17 per cent increase in the net interest margin, which averaged

141 basis points in the year, a 20 basis points year-on-year uplift beneﬁt

ing from a rap

id increase in policy interest rates across

many of our markets :

•

Average interest-earning assets grew 1 per cent, or 7 per cent excluding the impact of currency translation and risk-weighted

asset optim

isat

ion actions, reﬂecting an increase in investment securit

ies held by Treasury Markets. Gross y

ields increased

87 basis points compared with the average in the prior year

•

Average interest-bearing liab

ies

increased 2 per cent, or 5 per cent excluding the impact of currency translation, reﬂecting

an increase in customer accounts while the rate paid on liab

ies

increased 71 basis points compared with the average in the

prior year

Credit risk summary

Income Statement

2022

$mill

ion

2021

$mill

ion

Change

Total credit impa

irment charge

838

263

219

Of which stage 1 and 2

406

421

Of which stage 3

432

185

134

Variance is increase/(decrease) comparing current reporting period to prior reporting period

Balance sheet

2022

$mill

ion

2021

$mill

ion

Change

Gross loans and advances to customers

316,107

304,122

Of which stage 1

295,219

279,178

Of which stage 2

13,043

16,849

(23)

Of which stage 3

7,845

8,095

(3)

Expected credit loss provis

ions

(5,460)

(5,654)

(3)

Of which stage 1

(559)

(473)

Of which stage 2

(444)

(524)

(15)

Of which stage 3

(4,457)

(4,657)

(4)

Net loans and advances to customers

310,647

298,468

Of which stage 1

294,660

278,705

Of which stage 2

12,599

16,325

(23)

Of which stage 3

3,388

3,438

(1)

Cover ratio of stage 3 before/after collateral (%)

57/76

58/75

(1)/1

Credit grade 12 accounts ($mill

ion)

1,574

1,730

(9)

Early alerts ($mill

ion)

4,967

5,534

(10)

Investment grade corporate exposures (%)

Variance is increase/(decrease) comparing current reporting period to prior reporting period

Includes reverse repurchase agreements and other sim

ilar secured lend

ing held at amortised cost of $24,498 mill

ion at 31 December 2022 and $7,331 m

ill

ion at

31 December 2021

Change is the percentage points difference between the two points rather than the percentage change

Standard Chartered

– Annual Report 2022

Strategic report

Group Chief Financ

ial Ofﬁcer’s rev

iew

Asset quality remains stable, despite a year-on-year increase

in the impa

irment charge, w

ith an improvement in a number

of underlying credit metrics. However, the Group continues to

remain alert to an unpredictable and challenging external

environment includ

ing pressures

in the China commercial real

estate sector, commodity price volatil

ity and the

impact of the

Russia/Ukraine war. This war in part contributed to both

commodity price volatil

ity and the accelerated trajectory of

inﬂat

ion and

interest rate rises across our footprint, which in

turn have contributed to both an increased risk of global

recession and the appreciat

ion of the US dollar versus the

majority of developed and emerg

ing market currencies. These

factors have contributed to increased sovereign credit stress

in a handful of our markets which we continue to monitor

closely and undertake mit

igat

ing actions where appropriate.

Credit impa

irment totalled $838 m

ill

ion, an

increase of

$575 mill

ion, represent

ing a loan loss rate of 21 basis points,

still some way below the histor

ic loan loss rate range.

Impairment charges relating to the China commercial real

estate sector totalled $582 mill

ion

in the year, includ

ing a

$78 mill

ion

increase in the management overlay relating to

the China commercial real estate sector, which now totals

$173 mill

ion. Sr

i Lanka and Ghana had their sovereign ratings

downgraded into stage 3 , while Pakistan sovereign ratings

were downgraded into credit grade 12. These sovereign

ratings downgrades incurred a $283 mill

ion

impa

irment

charge in the year. The CPBB normalised run-rate charge

increased by 9 per cent while recoveries in CCIB declined by a

third. The above were partly offset by a $228 mill

ion decrease

in the COVID-19 related management overlay, which now

totals $21 mill

ion.

Gross stage 3 loans and advances to customers of $7.8 bill

ion

were 3 per cent lower, primar

ily as repayments, cl

ient

upgrades and write-offs more than offset new inﬂows,

includ

ing those relat

ing to the sovereign ratings downgrade

of Ghana and Sri Lanka and the China commercial real estate

sector. Credit-impa

ired loans represented 2.5 per cent of gross

loans and advances, a decrease of 18 basis points.

The stage 3 cover ratio of 57 per cent was lower by

1 percentage point, while the cover ratio post collateral at

76 per cent increased by 1 percentage point.

Credit grade 12 balances have decreased by 9 per cent to

$1.6 bill

ion as the sovere

ign ratings downgrade of Pakistan

was more than offset by downgrades into stage 3 primar

ily as

a result of Sri Lanka and Ghana sovereign ratings downgrade.

Early Alert accounts of $5.0 bill

ion have reduced by 10 per

cent, reﬂecting the net impact of regularisat

ions of accounts

back into non-high-risk categories, net impact of downgrades

into credit grade 12 and exposure reductions partly offset by

new inﬂows. The Group is continu

ing to carefully mon

itor its

exposures in vulnerable sectors and select markets, given the

unusual stresses caused by the currently challenging macro-

economic environment.

The proportion of investment grade corporate exposures has

increased by 7 percentage points to 76 per cent, reﬂecting the

increase in reverse repurchase agreements held to collect.

The above balance sheet disclosure relates to loans and

advances to customers. The movement in high risk assets

(gross stage 3 loans and advances, credit grade 12 balances

and early alert accounts) does not fully reﬂect the impact of

the sovereign ratings downgrade of Ghana, Pakistan and Sri

Lanka as it does not capture the impact of these downgrades

on the Group’s investment and securit

ies portfol

io.

Restructuring, goodwill impa

irment and other

items

2022

2021

Restructuring

$mill

ion

Goodwill

and Other

impa

irment

$mill

ion

Other items

$mill

ion

Restructuring

$mill

ion

Goodwill

and Other

impa

irment

$mill

ion

Other items

$mill

ion

Operating income

–

(32)

–

Operating expenses

(170)

–

(487)

–

(62)

Credit impa

irment

–

Other impa

irment

(38)

(322)

–

(17)

(300)

–

Proﬁt from associates and jo

int ventures

(11)

–

Loss before taxation

(174)

(322)

(507)

(300)

(42)

Goodwill and Other impa

irment

include $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021

comparative has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt to Goodwill and

Other impa

irment

The Group’s statutory performance is adjusted for proﬁts or

losses of a capital nature, amounts consequent to investment

transactions driven by strategic intent, other infrequent and/

or exceptional transactions that are sign

iﬁcant or mater

ial in

the context of the Group’s normal business earnings for the

period and items which management and investors would

ordinar

ily

ident

ify separately when assess

ing underlying

performance period-by period. A reconcil

iat

ion of

restructuring, goodwill impa

irment and other

items excluded

from underlying results is set out on pages 126 to 130.

Restructuring charges of $174 mill

ion for 2022 reﬂects the

impact of actions to transform the organisat

ion to

improve

productiv

ity, pr

imar

ily redundancy related charges.

Goodwill and other impa

irment of $322 m

ill

ion

includes

$308 mill

ion

in relation to a further reduction in the carrying

value of the Group‘s investment in its associate China Bohai

Bank (Bohai). To ensure consistency, the Group has

retrospectively reclassif

ied the $300 m

ill

ion

impa

irment

charge taken in 2021 on its investment in Bohai, from other

impa

irment

included in underlying operating proﬁt, to

goodwill and other impa

irment wh

ich is excluded from

underlying operating performance. The remain

ing $14 m

ill

ion

goodwill impa

irment relates to Bangladesh pr

imar

ily due to

lower economic growth forecasts and higher discount rates.

Other items include a $20 mill

ion fa

ir-value gain relating to the

sale of a property in Thailand.

The Group has announced that it is exploring strategic

alternatives for its Aviat

ion F

inance business as well as the exit

of seven markets in the AME region and will focus solely on the

CCIB segment in two more. It is expected that the results from

the markets and businesses being exited will be reported in

restructuring from 1 January 2023 with prior periods

retrospectvely restated.

Standard Chartered

– Annual Report 2022

Strategic report

Balance sheet and liqu

ity

2022

$mill

ion

2021

$mill

ion

Increase/

(Decrease)

$mill

ion

Increase/

(Decrease)

Assets

Loans and advances to banks

39,519

44,383

(4,864)

(11)

Loans and advances to customers

310,647

298,468

12,179

Other assets

469,756

484,967

(15,211)

(3)

Total assets

819,922

827,818

(7,896)

(1)

Liab

ies

Deposits by banks

28,789

30,041

(1,252)

(4)

Customer accounts

461,677

474,570

(12,893)

(3)

Other liab

ies

279,440

270,571

8,869

Total liab

ies

769,906

775,182

(5,276)

(1)

Equity

50,016

52,636

(2,620)

(5)

Total equity and liab

ies

819,922

827,818

(7,896)

(1)

Advances-to-deposits ratio (%)1

57.4%

59.1%

Liqu

ity coverage ratio (%)

147%

143%

The Group now excludes $20,798 mill

ion held w

ith central banks (31.12.21: $15,168 mill

ion) that has been conﬁrmed as repayable at the po

int of stress

The Group’s balance sheet remains strong, liqu

id and well

divers

iﬁed.

•

Loans and advances to customers increased 4 per cent

since 31 December 2021 to $311 bill

ion. Th

is includes a

$24 bill

ion

increase in Treasury and securit

ies backed loans

held to collect partly offset by a $13 bill

ion reduct

ion from

risk-weighted asset optim

isat

ion actions undertaken by

CCIB and a $8 bill

ion reduct

ion from currency translation.

Excluding the above, there was 3 per cent underlying loan

growth, with growth in Trade partly offset by deleveraging

in Wealth Management.

•

Customer accounts of $462 bill

ion decreased 3 per cent

since 31 December 2021 as a result of currency translation.

Excluding the impact of currency translation, customer

accounts were broadly ﬂat in the year.

•

Other assets decreased 3 per cent since 31 December 2021

with a reduction in reverse repurchase agreements

designated at fair value through proﬁt or loss partly offset

by an increase in investment securit

ies held w

ith

in Treasury

Markets and increased derivat

ive balances

•

Other liab

ies were 3 per cent h

igher since 31 December

2021 reﬂecting an increase in derivat

ive balances

The advances-to-deposits ratio decreased to 57.4 per cent

from 59.1 per cent at 31 December 2021 reﬂecting a reduction

in loans and advances to customers excluding reverse

repurchase agreement as a result of risk-weighted asset

optim

isat

ion actions. The point-in-time liqu

ity coverage

ratio of 147 per cent increased 4 per cent and remains well

above the min

imum regulatory requ

irement.

Risk-weighted assets

2022

$mill

ion

2021

$mill

ion

Change

$mill

ion

Change

By risk type

Credit risk

196,855

219,588

(22,733)

(10)

Operational risk

27,177

27,116

–

Market risk

20,679

24,529

(3,850)

(16)

Total RWAs

244,711

271,233

(26,522)

(10)

Variance is increase/(decrease) comparing current reporting period to prior reporting periods

Total risk-weighted assets (RWA) decreased 10 per cent or

$26.5 bill

ion from 31 December 2021 to $244.7 b

ill

ion.

•

Credit risk RWA decreased $22.7 bill

ion to $196.9 b

ill

ion.

There was a $13.9 bill

ion reduct

ion in the CCIB low-returning

portfolio targeted for optim

isat

ion, a $11.1 bill

ion decrease

from other RWA efﬁciency act

ions and a $9.9 bill

ion

reduction from currency translation. This was partly offset

by a $6.9 bill

ion

increase from regulatory changes,

$3.5 bill

ion

inﬂat

ion from cred

it migrat

ion and a $1.9 b

ill

ion

increase from a combinat

ion of asset growth and m

•

Market risk RWA decreased by $3.9 bill

ion to $20.7 b

ill

ion

primar

ily reﬂect

ing reduced standardised specif

interest

rate risk posit

ions and changes

in value at risk methodology

•

Operational risk RWA was broadly ﬂat at $27.2 bill

ion

Standard Chartered

– Annual Report 2022

Strategic report

Group Chief Financ

ial Ofﬁcer’s rev

iew

Capital base and ratios

2022

$mill

ion

2021

$mill

ion

Change

$mill

ion

Change

CET1 capital

34,157

38,362

(4,205)

(11)

Addit

ional T

ier 1 capital (AT1)

6,484

6,791

(307)

(5)

Tier 1 capital

40,641

45,153

(4,512)

(10)

Tier 2 capital

12,510

12,491

–

Total capital

53,151

57,644

(4,493)

(8)

CET1 capital ratio end point (%)

14.0

14.1

(0.1)

Total capital ratio transit

ional (%)

21.7

21.3

0.4

Leverage ratio (%)

4.8

4.9

(0.1)

Variance is increase/(decrease) comparing current reporting period to prior reporting periods

Change is percentage points difference between two points rather than percentage change

The Group’s CET1 ratio of 14.0 per cent was 19 basis points

lower than at 31 December 2021, but approximately 50 basis

points above the CET1 ratio at 1 January 2022 when regulatory

changes, which reduced the Group’s CET1 ratio, came into

force. The underlying 50 basis points increase reﬂects the

impact of RWA optim

isat

ion actions and proﬁt accretion

during the year despite funding $1,258 mill

ion of share

buy-backs and an increased ordinary div

idend. The CET1 rat

is 3.6 percentage points above the Group’s current regulatory

min

imum of 10.4 per cent and at the top end of the Group’s

13-14 per cent medium-term target range.

The regulatory changes which came into force on 1 January

2022 included the cessation of software relief, the impact from

the IRB model repair programme and the introduct

ion of

standardised rules for counterparty credit risk on derivat

ives

and other instruments (SA-CCR). In aggregate, these

regulatory changes resulted in a decrease in the CET1 ratio of

approximately 70 basis points by reducing CET1 capital by

$1.1 bill

ion and

increas

ing RWAs by $5.7 b

ill

ion. In the fourth

quarter, further regulatory changes includ

ing the IRB model

repair programme increased RWAs by $1.3 bill

ion, reduc

ing

the CET1 ratio by approximately 10 basis points

The CET1 ratio was reduced by approximately 70 basis points

from a reduction in reserves mainly relating to a reversal of

prior year unrealised gains on debt securit

ies as a result of

higher market yields and movements in currency translation

reducing both the translation reserve and RWAs.

Proﬁt accretion increased the CET1 ratio by approximately

110 basis points whilst lower RWAs as a result of efﬁc

iency and

optim

isat

ion actions with

in CCIB and Treasury, prov

ided an

approximate 120 basis point uplift to the CET1 ratio.

Ordinary shareholder distr

ibut

ions reduced the CET1 ratio by

approximately 65 basis points. The Group spent $1,258 mill

ion

purchasing 184 mill

ion ord

inary shares of $0.50 each during

the year, representing a volume-weighted average price per

share of £5.48. These shares were subsequently cancelled,

reducing the total issued share capital by 6 per cent and the

CET1 ratio by approxiamtely 45 basis points. The Board has

recommended a ﬁnal div

idend of 14 cents per share result

ing

in a total 2021 ordinary div

idend of 18 cents a share or

$523 mill

ion, reduc

ing the CET1 ratio by approximately

20 basis points . Payments due to AT1 and preference

shareholders cost approximately 15 basis points.

The Board has announced a share buy-back for up to a

maximum considerat

ion of $1 b

ill

ion to further reduce the

number of ordinary shares in issue by cancelling the

repurchased shares. The terms of the buy-back will be

announced and the programme will start shortly and is

expected to reduce the Group’s CET1 ratio in the ﬁrst quarter

of 2023 by approximately 40 basis points.

The Group’s leverage ratio of 4.8 per cent is approximately

10 basis points lower than the 4.9 per cent ratio as at

31 December 2021. This reﬂects lower Tier 1 capital partly

offset by a decrease in leverage exposures largely driven by

efﬁciency and opt

isat

ion in

iat

ives. The Group’s leverage

ratio remains sign

iﬁcantly above

its current min

imum

requirement of 3.7 per cent.

Outlook

Our performance has been strong, and the pace of economic

recovery in many of our footprint markets is encouraging.

Whilst recessionary and inﬂat

ionary pressures w

ill continue to

impact many parts of the world, particularly in the ﬁrst half of

2023, we expect most of the markets in which we operate to

continue their recent momentum with GDP growth in the

Asian economies at above 5 per cent over the next two years

being pivotal to progressive global recovery.

The recent opening-up of China and the generally receding

impacts of COVID-19 should help in that regard albeit we will

continue to monitor closely the sovereign risks in markets that

are most exposed to tighten

ing l

iqu

ity.

Overall, the markets in which we operate, the further beneﬁts

of ris

ing

interest rates and the evident

ial

improvement in

many of our operating metrics cause us to be optim

ist

ic about

the period ahead. For 2023 and 2024 our expectations are

now:

•

Income to grow in the 8-10 per cent range excluding DVA

and at constant currency

•

Full year average net interest margin of around 175 basis

points in 2023 and above 180 basis points in 2024

•

Asset and RWA growth in the low single dig

it percentage

range

•

Around 3 percentage point posit

ive

income-to-cost jaws

in 2023 and in 2024, excluding DVA and UK bank levy and

at constant currency

•

Credit impa

irment to cont

inue to normalise towards

the histor

ic through the cycle loan-loss rate range of

30-35 basis points

•

To operate dynamically with

in the full 13-14 per cent CET1

target range

•

RoTE to be approaching 10 per cent in 2023

•

RoTE to exceed 11 per cent in 2024, with further growth

thereafter

Andy Halford

Group Chief Financ

ial Ofﬁcer

16 February 2023



Founding signatory of

the Sustainable STEEL

Princ

iples



In September, we became one of the founding signator

ies to the

Sustainable STEEL Princ

iples, the ﬁrst cl

imate-aligned ﬁnance

agreement for the steel industry.

The use of metallurgical coal in the manufacturing of steel,

means it contributes around 7 per cent of CO

emiss

ions globally.

With demand for steel continu

ing to

increase, it’s crit

ical that we

support the sector’s decarbonisat

ion. As part of the agreement,

signator

ies measure and d

isclose their steel-related loan

emiss

ions, w

ith a view to achiev

ing net-zero em

iss

ions

in the

steel industry.

Read more online at

www.sc.com/steel

Standard Chartered

– Annual Report 2022

Strategic report

Standard Chartered

– Annual Report 2022

Strategic report

Risk overview

Resil

ience

despite adverse

macroeconomic

environment

and volatile

global markets

Risk overview

The macroeconomic environment was challenging

throughout the year for a number of markets in which the

Group operates. February 2022 saw Russia’s invas

ion of

Ukraine, impact

ing ﬁnancial markets, commod

ity prices and

supply chains. We had very lim

ited d

irect exposure to either

country and we proactively managed risks that we faced

through ind

irect exposure, and second order

impacts, such as

increased energy and food prices or disrupted gas supplies for

our clients and customers, the impact from sanctions on asset

values and investments some of our clients have in Russia. We

also managed the increase in traded risks following increased

volatil

ity

in other markets, especially credit and commodit

ies.

Regular stress tests were performed during 2022 to assess the

impact of the war across the Group’s portfolio.

In China, growth forecasts were revised downwards as it

followed its ‘zero-COVID’ stance, exacerbating global supply

chain bottlenecks. Pressures in China’s commercial real estate

industry remain with the tim

ing of recovery st

ill uncertain

amidst recent government measures to support the sector. In

the United States, the Federal Reserve announced

consecutive interest rate hikes to counter inﬂat

ionary

pressures and hinted at more tapered rate rises in 2023. This

poses challenges to some emerging markets, as their

currencies weaken relative to the strength of the US dollar, by

ris

ing commod

ity prices, stagﬂation and tighter liqu

ity.

The impact from the war, tighten

ing of global ﬁnancing

condit

ions and

iosyncrat

ic domestic polit

ical and pol

icy

issues, have placed pressure on sovereign credit ratings during

2022. With

in the Group’s footpr

int, Sri Lanka and Ghana

embarked on sovereign debt restructuring operations, while

Pakistan has been adversely impacted by ﬂooding and

continues to face external ﬁnanc

ing r

isks in light of large

external payments coming due, while FX reserves have

declined. The Country Risk Early Warning System (CREWS) is

the princ

ipal process for track

ing a deteriorat

ion

in risk

ind

icators and has worked effect

ively during the year. CREWS

is a triage system which categorises countries based on a

combined assessment of the likel

ihood of a downgrade and

the ﬁnancial

impact of a potential downgrade. Markets in the

highest risk category are subject to enhanced monitor

ing of

qualitat

ive and quant

itat

ive r

isk triggers’ and we have

exposure management strategies in place for the highest risk

markets.

We continue to scan the horizon for topical and emerging

risks and collaborate with internal and external partners to

mit

igate r

isks as they are ident

iﬁed. Further deta

ils on how we

manage topical and emerging risks can be found on pages 48

to 51.

Standard Chartered

– Annual Report 2022

Strategic report

Asset quality has been mainta

ined, though we rema

in vig

ilant

in the face of volatile global markets. We continue to

demonstrate resil

ience as ev

idenced by strong capital and

liqu

ity metrics. Non-ﬁnanc

ial r

isks areas such as Fraud, Data

Management, Information and Cyber Security, Third Party,

Technology, People and Change Management remain

heightened. We continue to enhance our operational

resil

ience and defences aga

inst these risks through vigorous

enhancement programmes. We remain vig

ilant of sovere

ign

risks and challenges in the property sector in China and we

continue to closely monitor and manage these across the

Group.

For our Corporate, Commercial and Institut

ional Bank

ing

(CCIB) business, we have ident

iﬁed vulnerable sovere

igns with

triggers and have an action plan for exposure management

based on such triggers. We have closely monitored our clients

that may face diff

icult

ies on account of increas

ing

interest

rate, foreign exchange movements, commodity volatil

ity or

increase in price of essential goods. Stress tests and portfolio

reviews are also done to ident

ify vulnerable exposures. These

exposures are then tracked through our well-established Early

Alert monitor

ing process. Act

ions which may be required if

geo-polit

ical r

isks occur are also tracked so that the Group

could act quickly if these events do occur.

For our Consumer, Private and Business Banking (CPBB)

business, the key focus in 2022 was on the potential wider

effects of the deteriorat

ing econom

ic condit

ions across our

markets. While CPBB conducts its business mainly in local

currency, the continued strength of the US dollar has an

impact in our markets across Asia, Africa and the Middle East

and we have been monitor

ing the potent

ial secondary

impacts of a decline in sovereign credit quality in some of our

markets. For our consumer credit portfolios, we have been

monitor

ing the

impact on customer affordabil

ity through

interest rate sensit

ity analysis and tracking consumer price

ind

ices across our key markets. In our Bus

iness Banking

portfolios, we have been focused on the risks to our clients

associated with vulnerabil

ity to commod

ity supply chain

issues, spikes in input costs and the effect of an overall decline

in global demand. For Wealth Lending, which is secured by a

largely liqu

id collateral pool, we have been proact

ively

managing the portfolio through the continued market

volatil

ity and mon

itor

ing for hor

izon risks to the collateral, such

as reduced corporate earnings in the event of recession.

Where appropriate, we have tightened underwrit

ing pol

ies

and collateral acceptance criter

ia.

An update on our key risk prior

ies

2022 continued to present a challenging risk landscape,

however, we faced this from an intr

ins

ically strong posit

ion.

Our risk management approach is at the heart of our business

and is core to us achiev

ing susta

inable growth and

performance. We have made progress on our key prior

ies,

these being:

Strengthening the Group’s risk culture and conduct:

remain committed to promoting a healthy risk culture and

driv

ing the h

ighest standards of conduct. Both risk culture and

conduct are integral components of our Enterprise Risk

Management Framework (ERMF). Our ERMF sets out the

guid

ing pr

inc

iples for our colleagues, enabl

ing us to have

integrated and holist

ic r

isk conversations across the Group

and the three lines of defence. It underpins an enterprise level

abil

ity to

ident

ify and assess, openly d

iscuss, and take prompt

action to address exist

ing and emerg

ing risks. Senior

management across the Group promote a healthy risk culture

by rewarding risk-based think

ing (

includ

ing

in remuneration

decis

ions), challeng

ing the status quo, and creating a

transparent and safe environment for employees to

communicate risk concerns. We strive to uphold the highest

standards of conduct through delivery of conduct outcomes,

acknowledging that while inc

idents cannot be ent

irely

avoided, the Group has no appetite for wilful or negligent

misconduct. More broadly, we are continu

ing to focus on

strengthening ﬁrst-line Conduct Risk ownership, drawing

enhanced Conduct Risk ins

ights through the development of

conduct analytics as part of the new Conduct Risk

management standard. Furthermore, we have uplifted the

Group Conduct Risk Management approach which has been

achieved through a combinat

ion of prov

ing better tools to

enable consistent Conduct Risk oversight, increased

engagement with the ﬁrst and second line and targeted

campaigns to improve Conduct Risk awareness across the

Group. As Conduct Risk may arise from anywhere in the Group

at any time, conduct outcomes should always be considered

when material strategic decis

ions are made that may

impact

clients, investors, shareholders, counterparties, employees,

markets, competit

ion and the env

ironment. The Group is also

working towards complying with the UK Consumer Duty

requirements for in-scope clients; these requirements set

higher and clearer standards of consumer protection.

Standard Chartered

– Annual Report 2022

Strategic report

Risk overview

Continuous enhancement of our informat

ion and cyber

security (ICS) capabil

ies and governance:

We have

refreshed the Group ICS Risk Strategy by updating our ICS

Target Operating Model to increase focus on accountabil

ity,

risk ownership, change management and executive

empowerment. Our Board is regularly engaged on our

approach to managing ICS Risks and we have appointed an

ICS Risk Special Advisor to the Board. We also perform

table-top cyber cris

is test

ing exercises to ensure a consistent

view on how to respond to cyber inc

idents.

To assess the security of our ICS systems and processes, our

ICS capabil

ies include a formal process for internal controls

testing, vulnerabil

ity assessments and penetrat

ion testing (an

authorised simulated attack on a computer system,

performed to evaluate the security of the system). We

continue to deploy the Threat Scenario-led Risk Assessment

which enables a more dynamic threat-led ident

iﬁcation and

management of ICS Risk by our businesses. Our ICS polic

ies

and standards are also aligned to a number of best practice

global guidance, and we remain watchful on proposed new

guidance.

Our ICS train

ing programme

includes annual mandatory

learning and phish

ing read

iness exercises, along with ongoing

thematic campaigns which highl

ight the most prevalent

threats and risks that colleagues face. We also deliver regular

Group Board train

ing on ICS r

isks. In addit

ion to general ICS

awareness, colleagues in roles ident

iﬁed as cr

ical have

addit

ional tra

ing l

inked to their responsib

ies.

Managing Climate Risk:

Managing the risks from climate

change is a core element of our strategy and Stands. We have

made good progress this year in embedding Climate Risk

considerat

ions across the

impacted Princ

ipal R

isk Types. By

using the results from our scenario analysis, we are build

ing a

good understanding of the markets and industr

ies where the

effects of climate change will have the greatest impact.

Climate Risk assessments are now considered as part of

Reputational and Sustainab

ity transaction reviews for

impacted clients in high-carbon sectors, and integrated into

the credit applicat

ion process for approx

imately 70 per cent of

our corporate client exposure and the physical risk

ident

iﬁcation of our CPBB mortgage portfol

ios in our largest

markets. As part of our ongoing academic partnership with

Imperial College London, we supported new climate research

on the range of opportunit

ies that ex

ist for private investors in

nature related investments and cross-sectoral impl

icat

ions of

electrif

icat

ion of transport in India. Key focus areas for 2023

include establish

ing and clar

ify

ing the l

inkages between

net-zero portfolio management across high transit

ion r

isk

sectors and the impact thereof on Credit Risk parameters,

build

ing and embedd

ing our in-house Climate Risk models,

train

ing and educat

ion, and working with our data providers

and clients. All of these support the Group’s commitments

made as part of Accelerating Zero.

More details can be found at

sc.com/sustainab

ity and sc.com/tcfd

Further details on our overall approach to net zero

can be found at

sc.com/netzero

Managing our environmental, social and governance (ESG)

risk:

We continue to advance risk management across the

organisat

ion

in both our CCIB and CPBB client segments with

end-to-end reviews of inherent risks and controls in line with

our internal Environmental and Social Risk Catalogue. In

keeping with our sustainable and transit

ion ﬁnance goals, our

risk management approach seeks to ensure that our Green,

Sustainable and Transit

ion F

inance labels reﬂect the

standards set out in our Green and Sustainable Product

Framework, Transit

ion F

inance Framework and Task Force on

Climate-related Financ

ial D

isclosures (TCFD).

Managing Financ

ial Cr

ime Risk:

The Group is managing its

ﬁnancial cr

ime risk with

in acceptable levels as assessed under

the Group’s risk assessment measures, includ

ing the F

inanc

ial

Crime Risk Type Framework, Risk and Control Self-Assessments

and assurance reviews. However, some issues in 2022 have

required remedial actions in order to avoid an unacceptable

increase in Financ

ial Cr

ime Risk in certain areas. Russia-related

sanctions have continued to escalate and are increas

ingly

complex in nature to operational

ise. Wh

ile the Group has

lim

ited d

irect exposure to Russia-related sanctions, we

continue to monitor and respond to changing sanction

requirements. The Group continues to build and mainta

partnerships with industry, government and the third sector to

build consensus on effective efforts to combat ﬁnanc

ial cr

ime

and the damages it causes.

More informat

ion about the Group’s comm

itment to ﬁght

ing

ﬁnancial cr

ime can be found at

sc.com/ﬁghtingﬁnancialcr

ime

Technology and Innovation:

Our technology capabil

ies are

deliver

ing our strategy of be

ing a dig

ital dr

iven second-line of

defence function, supporting ﬁrst-line driven risk management

processes. We have expanded our Climate Risk reporting

capabil

ies and integrated ESG factors to help streamline risk

assessment across the client lifecycle. We have automated

the model development lifecycle with a dig

ised model

inventory and approval workﬂow, and have deployed a single

platform to support standardised model creation, review and

validat

ion. We have cont

inued to expand our Enterprise

Governance, Risk and Compliance with automated workﬂows

in Operational Risk, Business Continu

ity, Assurance, and BCBS

239 assessments and peer reviews. Policy documentation

management has been transit

ioned to a new platform and a

sign

iﬁcantly

improved user experience. The Group Risk

assessment process has been transit

ioned to a B

ig Data

technology stack that util

ises data more effect

ively and

improves assessment turnaround time. We continue to build

more intell

igence

into our self-service and case management

tooling. The ASK Compliance platform serves as a single

portal, where the ﬁrst line of defence and our employees get

answers to simple compliance queries using self-service tools,

with an enhanced user experience launched in 2022. We will

prior

ise integrat

ing relevant r

isk use cases into the exist

ing

self-service tools in 2023. Advisor Connect which is a

conﬁgurable case management framework launched in

Q3 2022 provides an auditable, consolidated view of cases

and serves as a knowledge repository for the advisory teams.

Advisor Connect is planned to be rolled out to prior

ised

group and country CFCC teams in 2023.

We continuously enhanced the country regulatory obligat

ion

management to improve the user experience. We continue to

explore the applicat

ion of emerg

ing technologies such as

Artif

ial Intelligence, Machine Learning and Applicat

ion bu

ild

through conﬁguration and rema

in focused on streamlin

ing

the

Standard Chartered

– Annual Report 2022

Strategic report

ident

iﬁcation of new regulat

ions through horizon scanning,

tracking amendments to exist

ing regulat

ions, and

automating the mapping and impact analysis to polic

ies and

processes. Surveillance platforms are continuously enhanced

with supervised model-based monitor

ing and vo

ice and

multil

ingual mon

itor

ing capab

ies.

Dig

ital

isat

ion and technolog

ical developments remain key

items on the Group’s agenda as we pursue the execution of

the Group’s strategy. We continue to ensure that our control

frameworks and risk appetite evolve accordingly to keep pace

with new business developments and asset classes.

Embedding and strengthening Dig

ital Asset R

isk

management capabil

ies:

The Group recognises the

increas

ing prevalence of d

ital asset act

ity and assoc

iated

risks. At present, the Group has very lim

ited, and

immater

ial,

direct exposure to dig

ital asset related act

ity. Any potent

ial

increase in activ

ity or exposures w

ill be subject to detailed

review and enhanced due dil

igence

in accordance with the

Group’s Dig

ital Asset R

isk Management Approach.

Notwithstand

ing the l

ited exposure, as a regulated global

Bank with dig

ital asset capab

ies, we continue to strengthen

our Dig

ital Asset R

isk management capabil

ies under the

ERMF, with considerat

ion g

iven to learnings from exist

ing

iat

ives as well as external market developments.

Our risk proﬁle and performance in 2022

The proportion of the Group’s gross loans and advances to

customers in stage 1 has remained stable at $295.2 bill

ion or

93 per cent (31 December 2021: $279.2 bill

ion or 92 per cent)

reﬂecting our continued focus on high-quality orig

inat

ion.

Overall stage 2 gross loans and advances to customers

decreased by $3.8 bill

ion to $13.0 b

ill

ion dr

iven by CCIB due to

exposure reductions and rating upgrades in Transport,

telecom and util

ies sectors, $1 bill

ion decrease

in the Energy

sector, offset by increase in stage 2 in China commercial real

estate. Stage 3 loans decreased by $0.2 bill

ion to $7.9 b

ill

ion

(31 December 2021: $8.1 bill

ion) pr

imar

ily as repayments, cl

ient

upgrades and write-offs more than offset new inﬂows,

includ

ing those relat

ing to the sovereign ratings downgrade

of Ghana and Sri Lanka and the China commercial real estate

sector. The stage 3 cover ratio of 57 per cent was lower by

1 percentage point, while the cover ratio post collateral at

76 per cent increased by 1 percentage point.

In 2022, we have seen a 10 per cent decrease in Early Alerts

exposure (31 December 2022: $5.0 bill

ion, 31 December 2021:

$5.5 bill

ion), reﬂect

ing the net impact of regularisat

ions of

accounts back into non-high-risk categories, net impact of

downgrades into credit grade 12 and exposure reductions

partly offset by new inﬂows. Credit grade 12 balances

decreased to $1.6 bill

ion (31 December 2021: $1.7 b

ill

ion) as the

sovereign ratings downgrade of Pakistan was more than

offset by downgrades into stage 3 primar

ily as a result of Sr

Lanka and Ghana sovereign ratings downgrade. The Group

remains vig

ilant

in view of persistent challenging condit

ions

some markets and sectors.

The overall CPBB portfolio remains 86 per cent fully secured

(31 December 2021: 86 per cent), with average resident

ial

mortgage loan-to-value (LTV) at 44.7 per cent (31 December

2021: 41.1 per cent). The portfolio has remained resil

ient w

ith

overall 30+ days past due across our programme lending

segments at 0.58

per cent, which is consistent with pre-

pandemic credit performance.

The percentage of investment-grade corporate exposure

has also increased to 76 per cent compared with 69 per cent

from 31 December 2021, reﬂecting the increase in reverse

repurchase agreements held to collect and some increase in

exposures to investment grade clients. Exposure to our

top 20 corporate clients as a percentage of Tier 1 capital

has increased to 65 per cent (31 December 2021: 61 per cent),

driven by increased exposure to investment grade clients.

Key ind

icators

2022

2021

Group total business

316.1

304.1

Stage 1 loans ($ bill

ion)

295.2

279.2

Stage 2 loans ($ bill

ion)

13.0

16.8

Stage 3 loans, credit-impa

ired ($ b

ill

ion)

7.9

8.1

Stage 3 cover ratio

57%

58%

Stage 3 cover ratio (includ

ing collateral)

76%

75%

Corporate, Commercial & Institut

ional Bank

ing

Investment grade corporate net exposures as a percentage of total corporate net exposures

76%

69%

Loans and advances maturing in one year or less as a percentage of total loans and advances

to customers

65%

66%

Early alert portfolio net exposures ($ bill

ion)

5.0

5.5

Credit grade 12 balances ($ bill

ion)

1.6

1.7

Aggregate top 20 corporate net exposures as a percentage of Tier 1 capital

65%

61%

Collateralisat

ion of sub-

investment grade net exposures maturing in more than one year

53%

49%

Consumer, Private & Business Banking

Loan-to-value ratio of Consumer, Private & Business Banking mortgages

44.7%

41.1%

These numbers represent total gross loans and advances to customers

2 Excludes reverse repurchase agreements

Standard Chartered

– Annual Report 2022

Strategic report

Risk overview

The Group’s ongoing credit impa

irment was a net charge of $838 m

ill

ion (31 December 2021: $263 m

ill

ion),

includ

ing a $83 m

ill

ion

charge split across CCIB and Central and other items segments relating to sovereign ratings downgrade of Pakistan into credit

grade 12. The impa

irment charge

includes $582 mill

ion

in relation to China commercial real estate sector and $283 mill

ion

relation to sovereign downgrades, partly offset by releases in the management overlay relating to COVID-19.

CCIB stage 1 and 2 impa

irments of $148 m

ill

ion are dr

iven by China commercial real estate downgrades, includ

ing a $78 m

ill

ion

increase for China commercial real estate overlay and sovereign downgrades in Africa and the Middle East which is offset by a

$102 mill

ion full release of COVID-19 overlay. Stage 3

impa

irment of $279 m

ill

ion

is largely from China commercial real estate

downgrades, clients’ rating changes due to the Sri Lanka and Ghana sovereign rating downgrade, offset by releases and

repayments of a few notable clients.

CPBB charge decreased by $20 mill

ion to $262 m

ill

ion (31 December 2021: $282 m

ill

ion).

Stage 1 and 2 charge increased by

$121 mill

ion to $150 m

ill

ion (31 December 2021: $29 m

ill

ion). Stage 3 charge decreased by $141 m

ill

ion to $112 m

ill

ion (31 December

2021: $253 mill

ion) as markets returned to normal

ised ﬂows following the expiry of the major

ity of COVID-19 rel

ief schemes in

2021. In 2022, there were increased charges for Korea and Taiwan due to worsening macroeconomic forecasts, as well as China

due to portfolio maturity and book growth. This was offset by a net release of $110 mill

ion (31 December 2021: $15 m

ill

ion)

management overlays and a $25 mill

ion release from s

ign

iﬁcant

increase in credit risk methodology changes and model

updates largely in the Asia region.

Ventures impa

irment charge

increased by $13 mill

ion to $16 m

ill

ion (31 December 2021: $3 m

ill

ion) due to book growth

in Mox

Bank and Trust Bank Singapore.

Central and other items stage 1 and 2 impa

irments of $95 m

ill

ion were dr

iven by the sovereign downgrades in Asia. Stage 3

impa

irment charge of $38 m

ill

ion was dr

iven by the sovereign rating downgrade of Ghana and Sri Lanka.

Credit impa

irment

2022

2021

Stage 1 & 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Stage 1 & 2

$mill

ion

Stage 3

$mill

ion

Total¹

$mill

ion

Ongoing business portfolio

Corporate, Commercial & Institut

ional

Banking

148

279

427

(67)

(44)

Consumer, Private & Business Banking

150

112

262

253

282

Ventures

–

Central & other items

133

(1)

Credit impa

irment charge/(release)

406

432

838

185

263

Restructuring business portfolio

Others

(2)

–

(2)

(7)

(9)

Credit impa

irment charge/(release)

(2)

–

(2)

(7)

(9)

Total credit impa

irment charge/

(release)

404

432

836

178

254

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from

1 January 2022. Prior period has been restated

The average level of total trading and non-trading Value at Risk (VaR) in 2022 was $52.5 mill

ion, 4.2 per cent lower than 2021

($54.8 mill

ion). The actual level of total trad

ing and non-trading VaR as at the end of the 2022 was $55.8 mill

ion, 28.6 per cent

higher than 2021 ($43.4 mill

ion), due to an

increase in market volatil

ity

in H2 2022, driven by a number of Central Banks

increas

ing

interest rates to curb inﬂat

ion.

Our Group liqu

ity coverage ratio (LCR) is 147 per cent (31 December 2021: 143 per cent) with a surplus to both Risk Appetite and

regulatory requirements. The Group’s advances-to-deposits ratio has decreased from 59.1 per cent to 57.4 per cent, driven by a

reduction of 2 per cent in our customer deposits and 5 per cent in customer loans and advances.

Our Common Equity Tier 1 (CET1) ratio is 14.0 per cent (31 December 2021: 14.1 per cent). Further details can be found in the

Capital Review section (page 320).

Further details of the risk performance for 2022 are set out in the

Risk proﬁle

section

Standard Chartered

– Annual Report 2022

Strategic report

An update on our risk management approach

Our ERMF outlines how we manage risk across the Group, as well as at branch and subsid

iary level

. It gives us the structure to

manage exist

ing r

isks effectively in line with our Risk Appetite, as well as allowing for holist

ic r

isk ident

iﬁcation.

Princ

ipal and Integrated R

isk Types

Princ

ipal r

isks are risks inherent in our strategy and business model. These are formally deﬁned in our ERMF which provides a

structure for monitor

ing and controll

ing these risks through the Board-approved Risk Appetite. We will not compromise

adherence to our Risk Appetite in order to pursue revenue growth or higher returns. The table below provides an overview of the

Group’s princ

ipal and

integrated risks and risk appetite statement. In addit

ion to pr

inc

ipal r

isks, the Group has deﬁned a Risk

Appetite Statement for Climate Risk.

Princ

ipal R

isk Types

Risk Appetite Statement

Credit Risk

The Group manages its credit exposures following the princ

iple of d

ivers

iﬁcation across

products, geographies, client segments and industry sectors.

Traded Risk

The Group should control its ﬁnanc

ial markets act

ies to ensure that Traded Risk losses do not

cause material damage to the Group’s franchise.

Treasury Risk

The Group should mainta

in sufﬁcient cap

ital, liqu

ity and funding to support its operations, and

an interest rate proﬁle ensuring that the reductions in earnings or value from movements in

interest rates impact

ing bank

ing book items do not cause material damage to the Group’s

franchise. In addit

ion, the Group should ensure

its Pension plans are adequately funded.

Operational and Technology Risk

The Group aims to control Operational and Technology Risks to ensure that operational losses

(ﬁnancial or reputat

ional), includ

ing any related to conduct of bus

iness matters, do not cause

material damage to the Group’s franchise.

Information and Cyber Security

(ICS) Risk

The Group has zero appetite for very high ICS residual risks and low appetite for high ICS residual

risks which result in loss of services, data or funds. The Group will implement an effective ICS

control environment and proactively ident

ify and respond to emerg

ing ICS threats in order to

lim

it ICS

inc

idents

impact

ing the Group’s franch

ise.

Compliance Risk

The Group has no appetite for breaches in laws and regulations related to regulatory non-

compliance; recognis

ing that wh

ile inc

idents are unwanted, they cannot be ent

irely avoided.

Financ

ial Cr

ime Risk

The Group has no appetite for breaches in laws and regulations related to ﬁnanc

ial cr

ime,

recognis

ing that wh

ile inc

idents are unwanted, they cannot be ent

irely avoided.

Model Risk

The Group has no appetite for material adverse impl

icat

ions aris

ing from m

isuse of models or

errors in the development or implementat

ion of models, wh

ile accepting model uncertainty.

Reputational and Sustainab

ity

Risk

The Group aims to protect the franchise from material damage to its reputation by ensuring

that any business activ

ity

is satisfactor

ily assessed and managed by the appropr

iate level of

management and governance oversight. This includes a potential failure to uphold responsible

business conduct or lapses in our commitment to do no sign

iﬁcant env

ironmental and social

harm.

Integrated Risk Types

Risk Appetite Statement

Climate Risk

The Group aims to measure and manage ﬁnanc

ial and non-ﬁnancial r

isks from climate change,

and reduce emiss

ions related to our own act

ies and those related to the ﬁnanc

ing of cl

ients,

in alignment with the Paris Agreement.

Dig

ital Asset R

isk

This Integrated Risk Type is currently supported by Risk Appetite metrics embedded with

relevant Princ

ipal R

isk Types.

Third-Party Risk

This Integrated Risk Type is currently supported by Risk Appetite metrics embedded with

relevant Princ

ipal R

isk Types.

The Group’s Risk Management Framework and System of Internal Control applies only to wholly controlled subsid

iar

ies of the Group, and not to Associates, Joint

Ventures or Structured Entit

ies of the Group.

Standard Chartered

– Annual Report 2022

Strategic report

Risk overview

Topical Risks refer to themes that may have emerged but are

still evolving rapidly and unpredictably, while Emerging Risks

refer to unpredictable and uncontrollable outcomes from

certain events which may have the potential to adversely

impact our business.

As part of our continuous risk ident

iﬁcation process, we have

updated the Group’s Topical and Emerging Risks (TERs) from

those disclosed in the 2021 Annual Report. We summarise

these below, outlin

ing the r

isk trend changes since the end of

2021, and the mit

igat

ing actions we are taking based on our

current knowledge and assumptions. This reﬂects the latest

internal assessment as performed by senior management.

The TER list is not exhaustive and there may be addit

ional

risks which could have an adverse effect on the Group. Our

mit

igat

ion approach for these risks may not elim

inate them

but shows the Group’s awareness and attempt to reduce or

manage the risk. As certain risks develop and material

ise over

time, management will take appropriate steps to mit

igate the

risk based on its impact on the Group.

The key changes to the TERs since the 2021 Annual Report are

as follows.

•

We have added two new TERs: “High inﬂat

ion and US dollar

strength” and “Global economic downturn risk”. This reﬂects

that continued inﬂat

ion and consequent rate h

ikes will

impact global growth, with a chance of global recession in

2023.

•

“Energy security” has been broadened to “Energy security

and shift

ing pol

ical all

iances” to reﬂect those practical

ies

around energy security, that may reshape some polit

ical

relationsh

ips, w

ith a shift in power towards exporters.

•

“Supply chain dislocat

ions” has been renamed as “Extended

supply chain issues and key material shortages” due to

continu

ing supply shortages and restr

ict

ions of some

exports, the impact of Russia-Ukraine war and China-US

rivalry, and the push for sustainable alternative supply

chains.

•

“Social unrest” and “Adapting to endemic COVID-19 and a

K-shaped recovery” are no longer presented as

independent TERs; rather they are now considered as

drivers for other overarching themes.

Macroeconomic and Geopolit

ical Cons

iderat

ions

There is interconnectedness between risks due to the

importance of US dollar ﬁnanc

ing cond

ions for global

markets, and the global or concentrated nature of key supply

chains for energy, food, semi-conductors and rare metals. The

Group is exposed directly through investments, or ind

irectly

through its clients to these risks. While the main risk impacts

are ﬁnancial, other ram

icat

ions may exist, for example,

reputational, compliance or operational considerat

ions.

High inﬂat

ion and US dollar strength

Inﬂation is now a global concern and a top policy issue in

many countries which are experienc

ing the h

ighest inﬂat

ion

levels in decades. Prices have surged due to a combinat

ion of

customer demand and supply shortages.

The Federal Reserve’s sustained ﬁght against US inﬂat

ion has

led to US dollar appreciat

ion aga

inst many other global

currencies. This increases global import costs and debt

servic

ing costs on US dollar denom

inated debt. There have

been widespread price corrections for some asset classes.

Some markets, especially emerging markets, have lim

ited

options to defend their currencies without causing other

detrimental effects.

The operating environment is likely to be testing for the Non

Bank Financ

ial Inst

itut

ions (NBFIs) sector; segments w

ith

could ﬁnd it challenging to manage liqu

ity, credit,

reﬁnancing and market r

isk. The Archegos collapse of 2021

and the liab

ity-driven investments volatil

ity are the most

notable recent examples.

There are heightened expectations

from major regulators with regard to the management of

NBFI risks.

Price inﬂat

ion for essent

ial goods, such as food and fuel has

prompted a cost-of-liv

ing cr

is across both developed and

emerging markets in which the Group operates. This has

sparked social unrest in some countries, with a heightened risk

in emerging markets which experience disproport

ionate

effects. However, the impact is felt across a wider bracket,

includ

ing the vast global m

iddle class, which raises the threat

of instab

ity, even in tradit

ionally less volat

ile countries.

Global economic downturn risk

Continued tighten

ing of monetary pol

icy to combat inﬂat

ion

in developed markets has contributed to the possib

ity of a

global recession in 2023. Higher rates could increase debt

distress levels across both developed and emerging

economies.

Global growth slowed to 3.4 per cent in 2022, with the outlook

for 2023 growth remain

ing muted at 2.9 per cent. Although

China’s reopening could lead to a faster than expected

recovery, supply chain bottlenecks remain and severe

COVID-19 outbreaks could lead to a reversal. Geopolit

ical

escalation could also lim

it the speed of recovery, and supply

chain restrict

ions may lead to deglobal

isat

ion and less

efﬁcient

internat

ional trade.

The Group is exposed to downturns in China, such as observed

turbulence in the property development sector.

Topical and

Emerging Risks

Standard Chartered

– Annual Report 2022

Strategic report

Expanding array of global tensions

The Russia-Ukraine war has catalysed a fundamental shift in

power dynamics with a demarcation of underlying polit

ical

alliances. Pressure is mounting on Russia, which may lead to

increas

ingly desperate m

itary and pol

ical act

ions.

Relations between China and other developed markets,

particularly in the West, remain fragile, with sanctions being

imposed by both sides. Increasing technological restrict

ions

and potential escalations in relation to Taiwan’s sovereignty

are among a number of ﬂashpoints. Economic geopolit

ical

actions could also escalate distrust, decoupling, and increase

ineff

ient production, potentially generating further

inﬂat

ionary pressures.

Election wins for extremist parties in a number of countries are

adding to increased vulnerabil

ity and volat

ity – espec

ially as

economics is becoming subservient to polit

ics. Volat

ity

tradit

ionally stable econom

ies could cause further disrupt

ion.

Rivalry between the United States and China may have

structural, operational and strategic impacts on business

models for companies that straddle both.

Emerging markets sovereign risk

Emerging markets have been squeezed by escalating oil and

food prices, high interest rates and the legacy of COVID-19 on

key industr

ies such as tour

ism.

Distress has already been observed across several of the

Group’s footprint markets, includ

ing defaults

in Sri Lanka and

Ghana, polit

ical

instab

ity in Pakistan, high inﬂat

ion

in Türkiye,

and issues across Africa, particularly economies that are

sensit

ive to fuel pr

ices.

For some countries with fragile governance frameworks, there

is a heightened risk of failure to manage social demands,

which might culminate in increased polit

ical vulnerab

ity.

Furthermore, food and energy security challenges have the

potential to drive other social impacts.

Tighten

ing of ﬁnancial cond

ions

in developed markets has

also led to local currency depreciat

ions aga

inst the US dollar,

increas

ing debt serv

ing costs, and potent

ially restrict

ing

debt re-ﬁnancing. Fore

ign Exchange reserves have already

been heightened depleted in some markets, and local

monetary policy may undermine already weak growth.

Extended supply chain issues and key material shortages

Demand and supply imbalances in global supply chains have

become persistent as they are increas

ingly structural

in nature.

The main dislocat

ions are l

inked to conﬂict and polit

ical

restrict

ions on trade or

investment. Repercussions range from

companies that are a party in the particular supply chain, to

end consumers and sovereigns.

Concentrated impacts to specif

ic key

industr

ies such as

semi-conductors can have contagion effects. Polit

ical

wrangling over technological supremacy further increases the

risk of market disrupt

ion and a retreat from global

isat

ion.

Potential targeted restrict

ions on sem

iconductors could lead

to complete restructuring of global supply chains, impact

ing

most sectors.

This could lead to a shift in supply chains for the future, with

increased contingency costs and production potentially

moving closer to consumers. This is further compounded by

increased scrutiny around the environmental and social

impacts of supply chains.

Energy security and shift

ing pol

ical all

iances

The Russia-Ukraine war has exacerbated an already strained

energy supply model in developed markets, spurring a rapid

pivot away from tradit

ional supply l

ines. This came amid

already increased tensions between nations as negotiat

ing

power shifted towards energy exporters.

Ris

ing energy pr

ices and potential supply shortfalls may cause

a rise in social unrest, especially in countries where there is

high dependence on energy imports.

In the wake of the conﬂict, a trade-off between pragmatism

and environmentalism has material

ised, w

ith sign

iﬁcant

divergence as some countries have embraced the renewables

opportunity while others have reversed, with rollbacks of

green polic

ies observed

in some markets. Policymakers must

balance supply and price pressures with climate goals, with a

heightened risk of short term crises divert

ing attent

ion and

resources away from longer term required climate action.

Ris

ing mater

ial costs will also impact renewable energy

development, potentially slowing the transit

ion. The Group’s

plans for sustainable ﬁnance business growth could be

achieved at a slower than expected pace.

How these risks are mit

igated/next steps

•

We conduct thematic stress tests and portfolio reviews at a

Group, country, and business level to assess the impact of

extreme but plausible events and manage the portfolio

accordingly.

•

Vulnerable sectors are regularly reviewed and exposures to

these sectors are managed as part of Credit Risk reviews.

•

Sovereign ratings, exposures, outlooks and country risk lim

its

are regularly monitored, and mit

igat

ing actions taken as

required.

•

Exposures that may result in material credit impa

irment and

increased risk-weighted assets are closely monitored and

managed.

•

We util

ise Cred

it Risk mit

igat

ion techniques includ

ing cred

insurance and collateral.

•

We track the partic

ipat

ion of our footprint countries in G20’s

Common Framework Agreement and Debt Service

Suspension Init

iat

ive for Debt Treatments and the

associated exposure.

•

We remain vig

ilant

in monitor

ing geopol

ical relat

ionsh

ips.

Increased scrutiny is applied when onboarding clients in

sensit

ive

industr

ies and

in ensuring compliance with

sanctions.

Standard Chartered

– Annual Report 2022

Strategic report

Risk overview

Environmental and Social Considerat

ions

ESG stakeholder expectations

Environmental targets are becoming embedded in global

business models, with increased pressure to set ambit

ious

sustainab

ity goals or apply more restrict

ions on ﬁnancing to

sensit

ive sectors.

There is also an increase in stakeholder expectations around

fair and balanced disclosures, includ

ing market

ing

campaigns. Scrutiny around greenwashing has accelerated

with various regulatory developments, such as the Financ

ial

Conduct Authority’s consultation on anti-greenwashing rules.

There is fragmentation in the pace and scale of adoption and

regulation around the world, which adds complexity in

managing a global business. Fragmentation in ESG

taxonomies may also lead to unintended consequences,

includ

ing m

isallocat

ion of cap

ital, polit

ical and l

igat

ion risks.

Human rights concerns are increas

ing

in focus with scope

expanding beyond direct abuses to cover other areas such as

data management, technological advancement, and supply

chains.

There are risks if the Group is required to adapt to new

fragmented regulations quickly, as well as meeting publicly

stated sustainab

ity goals and helping clients transit

ion.

How these risks are mit

igated/next steps

•

Increased scrutiny is applied to environmental and social

standards when provid

ing serv

ices to clients.

•

We monitor regulatory developments in relation to

sustainable ﬁnance and ESG risk management and provide

feedback on consultations bilaterally and through industry

groups on emerging topics.

•

We focus on min

ing our env

ironmental impact and

embedding our values through our Posit

ion Statements for

sensit

ive sectors and a l

ist of prohib

ited act

ies that the

Group will not ﬁnance.

•

We are integrat

ing the management of greenwash

ing risks

into our Reputational and Sustainab

ity Risk Type

Framework, polic

ies and standards. Green, Susta

inable and

Transit

ion F

inance labels for products, clients and

transactions reﬂect the standards set out in our Green and

Sustainable Product Framework, Transit

ion F

inance

Framework and TCFD reporting. We regularly review these

frameworks and annually obtain external verif

icat

ion on the

Sustainable Finance asset pool.

•

The Group is committed to respecting universal human

rights and we assess our clients and suppliers against

various internat

ional pr

inc

iples, as well as through our soc

ial

safeguards and supplier charter. More details can be found

in our Modern Slavery Statement and Human Rights

Posit

ion Statement.

•

Detailed portfolio reviews and stress tests are conducted to

test resil

ience to cl

imate-related risks, in line with applicable

regulatory requirements.

•

Work is under way to embed Climate Risk considerat

ions

across all relevant Princ

ipal R

isk Types. This includes stress

testing/scenario analysis, integrat

ion of cl

ient Climate Risk

assessments with

in the Cred

it process, build

ing an

internal

modelling capabil

ity and l

inkages with our net zero targets

to understand the ﬁnancial r

isks and opportunit

ies from

climate change.

Technological Considerat

ions

Data and Dig

ital

Regulatory requirements and client expectations relating to

data management and quality, includ

ing data protect

ion and

privacy, data sovereignty, the use of Artif

ial Intelligence (AI)

and the ethical use of data are increas

ing. Regulat

ion is also

becoming more fragmented and complex, requir

ing more

resources to ensure ongoing compliance.

Geopolit

ical tens

ions have added impetus to data

sovereignty legislat

ion, somet

imes extraterritor

ial

in nature.

There can also be conﬂict

ing gu

idance with

in the same

jurisd

ict

ion. There

is heightened focus on economic sanctions

and ﬁnancial cr

ime controls, reinforc

ing the need for robust

control frameworks.

Data protection risks are increas

ingly dr

iven by highly

organised and sophist

icated threat actors, w

ith

developments such as ransomware available as a service.

Data is becoming more concentrated in the hands of

governments and big private companies, with relatively few

providers of new technologies such as cloud services. Some

third parties are reluctant to disclose AI model details, cit

ing

intellectual property, which increases model risk.

A balance between resil

ience and ag

ity

is required, as new

technologies are onboarded while exist

ing systems are

mainta

ined. Clear ownersh

ip, frameworks and oversight of

new technologies is also required.

How these risks are mit

igated/next steps

•

We monitor regulatory developments in relation to all

aspects of data management, taking into account country

specif

ic requ

irements. We take a holist

ic v

iew across data

risks to facil

itate an efﬁcient and comprehens

ive risk control

environment.

•

We have established a Data Management and Privacy

Operations team to assist with compliance with data

management regulations. This includes a dedicated AI

governance forum which includes review of third party

solutions.

•

We have an inﬂ

ight programme of work to dr

ive

compliance to BCBS 239 requirements on effective risk data

aggregation and risk reporting.

•

We continue to deliver new controls and capabil

ies to

increase our abil

ity to

ident

ify, detect, protect and respond

to ICS threats.

New business structures, channels and competit

ion

Failure to harness new technologies and new business models

would place banks at a competit

ive d

isadvantage. However,

these innovat

ions requ

ire special

ist sk

ills, present new vectors

for threats to material

ise and requ

ire robust risk assessment

accordingly. Differ

ing access to new developments w

ill also

cause divergence and inequal

ity to grow across countr

ies and

social groups.

Dig

ital assets are ga

ing adopt

ion and linked business

models continue to increase in prominence. These present

material opportunit

ies for bus

inesses and consumers, as well

as potential risks as the space evolves, as evidenced by the

collapse of Futures Exchange (FTX) and other recent events,

further exacerbating dig

ital asset market volat

ity.

Increasing use of partnerships and alliances increases

exposure to third-party risk. There is also risk of inadequate

risk assessments of new and unfamil

iar act

ies.

Standard Chartered

– Annual Report 2022

Strategic report

How these risks are mit

igated/next steps

•

We monitor emerging trends, opportunit

ies and r

isk

developments in technology that may have impl

icat

ions for

the banking sector.

•

Enhanced dig

ital capab

ies have been rolled out in CPBB,

particularly around onboarding, sales, and marketing.

•

A Dig

ital Asset R

isk Management Approach and policy has

been implemented. This is regularly updated in response to

evolving dig

ital assets market act

ity.

•

Strategic partnerships and alliances are being set up with

Fintechs to enhance our competit

iveness.

People Considerat

ions

Talent pool of the future

The expectations of the workforce, especially skilled workers,

are sign

iﬁcantly sh

ift

ing. The COVID-19 pandem

ic accelerated

changes on how people work, connect and collaborate, with

expectations on ﬂexible working now a given. The focus is

increas

ingly on ‘what’ work people do and ‘how’ they get to

deliver it, which are becoming different

iators

in the war for

future skills. There is greater desire to seek meaning and

personal fulﬁlment at work that is aligned to ind

idual

purpose.

These trends are even more dist

inct among M

illenn

ials and

Gen Zs who make up an increas

ing proport

ion of the global

talent pool, and as dig

ital nat

ives also possess the attributes

and skills we seek to pursue our strategy.

With attrit

ion

increas

ing year on year, to susta

inably attract,

grow and retain talent, we must continue to invest in and

further strengthen our Employee Value Proposit

ion (EVP),

through both ﬁrm-wide intervent

ions as well as targeted

action.

How these risks are mit

igated/next steps

•

Our culture and EVP work is designed to address the

emerging expectations of the diverse talent we seek. The

quarterly Brand and Culture Dashboard monitors our D&I

Index and colleagues’ perceptions of our EVP and whether

we are liv

ing our Valued Behav

iours.

Local Management

teams discuss the dashboard to ident

ify act

ions, supported

by a central library of intervent

ions from across the Group.

•

Our Future Workplace Now programme, which formalises

hybrid working where suitable, has been rolled out across 43

markets, and 78 per cent of colleagues in these markets are

now on ﬂexi-working arrangements.

We continue to

monitor for potential people risks, and mit

igat

ing actions

include hybrid learning festivals, watercooler moments

toolkits, a social connections platform and people leader

guidance.

•

We are undertaking a multi-year journey of developing

future-skills by creating a culture of continuous learning, to

balance between ‘build

ing’ and ‘

induct

ing’ sk

ills. We are

deploying technology that democratises access to learning

content and developmental experiences.

•

To address our talent pool’s increased expectations of us

being purpose-led, we have published our Stands which

guide our strategy.

In 2022, we created 275 net zero

branches in India, China and Hong

Kong, and certif

ied 120 s

ites in Asia

and two in Africa as being free of

single-use plastic. We are continu

ing to

invest in transit

ion

ing our branches to

net zero with all new properties built

and designed for True Zero Waste and

zero emiss

ions

impact. Our aim is to

have all property transit

ioned to net

zero by 2025, includ

ing branches.

Read more online at

www.sc.com/netzero



Going net zero

in 275 branches



Stakeholders and

Sustainab

ity

Stakeholders

Sustainab

ity

Accelerating Zero: Our approach

to climate change

Reducing our emiss

ions

Mit

igat

ing Environmental and Social Risk

113

Governance of our Sustainab

ity Agenda

Standard Chartered

– Annual Report 2022

Strategic report

Stakeholders and Sustainab

ity

Strategic report

Standard Chartered

– Annual Report 2022

Standard Chartered

– Annual Report 2022

Strategic report

Stakeholders

This section forms our

Section 172

disclosure,

describ

ing how the d

irectors considered the

matters set out in section 172(1)(a) to (f) of the

Companies Act 2006. It also forms the directors’

statement required under section 414CZA of

the Act.

See the following pages for:

•

How we engage stakeholders to understand their interests

See pages 55 to 63

•

How we engage employees and respond to their interests

See pages 60 to 63

•

How we respond to stakeholder interests through

sustainable and responsible business

See pages 64 to 113

Detailed informat

ion about how the Board engages d

irectly

with stakeholders and shareholders can be found in the

Director’s report on pages 134 to 231.

Examples of a selection of the Board’s princ

ipal dec

ions are

included throughout this section.

This section also forms our key non-ﬁnanc

ial d

isclosures in

relation to sections 414CA and 414CB of the Companies Act

2006. Our non-ﬁnancial

informat

ion statement can be found

at the end of this section on page 124.

Stakeholders



Helping Ismail

build skills with

Futuremakers



In March 2022, Ismail, a graduate with cerebral

palsy, became a Futuremaker in our ﬁrst economic-

empowerment project for young people with disab

ies

in Pakistan.

The train

ing helps learners l

ike Ismail build the skills and

conﬁdence they need to make smart career choices and

enter employment.

Ismail completed the train

ing and entrepreneursh

modules and applied his learning to ace an interv

iew and

land his ﬁrst paid job at a government agency.

As an internat

ional bank

operating in 59 markets,

stakeholder engagement

is crucial in ensuring we

understand local, regional

and global perspectives

and trends which inform

how we do business.

Our stakeholders

Clients

Regulators and governments

Investors

Suppliers

Society

Employees

Strategic report

Standard Chartered

– Annual Report 2022

Listen

ing and respond

ing to stakeholder

prior

ies and concerns is crit

ical to ach

iev

ing

our Purpose and deliver

ing on our brand

promise, here for good. We strive to mainta

open and constructive relationsh

ips w

ith

a wide range of stakeholders includ

ing

regulators, lawmakers, clients, investors,

civ

il soc

iety and community groups.

In 2022, we made improvements to some of our feedback

processes, so that client needs could be addressed by

relationsh

ip managers as they emerged. Our engagement

took many forms, includ

ing one-to-one sess

ions using online

channels and calls, virtual roundtables, written responses and

targeted surveys. These conversations, and the issues that

underpin them, help inform our business strategy and support

us to operate as a responsible and sustainable business.

Stakeholder feedback, where appropriate, is communicated

internally to senior management through the relevant forums

and governing committees such as the Sustainab

ity Forum,

and to the Board’s Culture and Sustainab

ity Committee

(CSC) which oversees the Group’s approach to its main

relationsh

ips w

ith stakeholders.

We communicate progress regularly to external stakeholders

through channels such as sc.com, established social media

platforms and this report. More detailed informat

ion

on material sustainab

ity topics can be found in our

Sustainab

ity section on pages 64 to 124.

This was further enabled with self-serve dig

ital tools and

capabil

ies such as chatbot, our mobile banking app,

applicat

ion programm

ing interface (API) connectiv

ity and

data analytics, which reduced operating costs and improved

client experience. Our agile working practices have also

accelerated our speed of decis

ion-mak

ing and change

delivery to meet client needs faster.

Reﬁning our processes through cont

inuous improvement has

enabled us to achieve beneﬁts in revenue and costs savings

by creating capacity and reducing client wait

ing t

imes.

As an integrated team, we drove dig

ital transformat

ion and

leveraged networks in service to our clients on our proprietary

platforms across 47 markets. We have processes and

guidel

ines

in place, specif

ic to each of our cl

ient businesses,

to understand and respond to issues and promptly resolve

complaints.

Meanwhile, we continued to engage with our clients to help

them expand across borders, using our internat

ional network

to help them access exist

ing and new trade corr

idors. Our

presence in high-growth markets – and ongoing roll out of

dig

ital platforms – helps connect our cl

ients to the global

engines of trade and innovat

ion.

As part of our aim to reach net zero carbon emiss

ions by 2050,

our newly-formed transit

ion ﬁnance team have been work

ing

closely with our clients in hard-to-abate sectors on their own

transit

ion plann

ing. This is in addit

ion to our plan to mob

ise

$300 bill

ion of Susta

inable Finance between 2021 and 2030.

Across both CCIB and Consumer, Private and Business

Banking (CPBB), we have processes and controls to mit

igate

greenwashing risks, and to support transparency we publish

the details of what constitutes our sustainable investments

universe externally.

Accelerating adoption of our API offerings

We are committed to helping our corporate clients

achieve the beneﬁts of real-time treasury operations, so

we developed an applicat

ion programm

ing interface

(API) banking platform for foreign exchange transactions,

payment in

iat

ion, payment status and account

balances. Our Premium Banking APIs were awarded the

title of ‘Top Performer’ in the FinLync 2022 Power Rankings

Report, in recognit

ion of our revamped API Marketplace

and sandbox for testing APIs.

In CPBB, we work closely with third-party ESG data providers

to support the development of product ideas, and extensive

due dil

igence

is conducted by our in-house team on our high

convict

ion su

ite of sustainable funds.

How we create value

We want to deliver easy, everyday banking solutions to

our clients in a simple and cost-effective way with a great

customer experience. We enable ind

iduals to grow and

protect their wealth; we help businesses trade, transact,

invest and expand; and we help a variety of ﬁnanc

ial

inst

itut

ions, includ

ing banks, publ

ic sector and development

organisat

ions, w

ith their banking needs.

How we serve and engage

In 2022, Corporate, Commercial and Institut

ional Bank

ing

(CCIB) strengthened its annual feedback process by capturing

how clients feel about what we offer, includ

ing adv

ice,

customer service and dig

ital channels.

CCIB also focused on build

ing a cons

istent dig

ital exper

ience

and accelerated delivery through Cash, Trade, Financ

ial

Markets and Data Solutions.

Clients

Standard Chartered

– Annual Report 2022

Strategic report

Stakeholders

Clients

continued

Stakeholders

continued

In CPBB, train

ing

is provided to frontline staff across our

branches, contact centres and dig

ital channels to

ident

ify and

support vulnerable clients, and we have also implemented an

educational train

ing programme for those cl

ients who require

assistance in navigat

ing onl

ine and mobile channels.

Our push for a best-in-class client experience is underpinned

by innovat

ive products and d

ital stra

ight-through services.

This includes build

ing capab

ity to protect our cl

ients

against evolving risks in the ecosystem like fraud and cyber

security and comes with education and increased client

communicat

ion.

In order to act in the best interests of our clients, we use our

ins

ights gathered from our data alongs

ide robust polic

ies,

procedures and the Group’s risk appetite to design and offer

products and services that meet client needs, regulatory

requirements and Group performance targets, while

contribut

ing to a susta

inable and resil

ient env

ironment.

Wealth and Personal Banking products have increased

sustainable product options for distr

ibut

ion to our clients.

We now offer sustainable deposits in seven markets, green

mortgages in six markets, sustainable investments in 16

markets and carbon-neutral cards in 17 markets.

All new products are subjected to a comprehensive approvals

process. For investment products sold to ind

iduals, this

includes risk scores which aid our assessment of client

suitab

ity. We consider each client’s ﬁnanc

ial needs and

personal circumstances to assist us in offering suitable

product recommendations.

We achieve this using a globally consistent methodology

that takes into considerat

ion local regulatory requ

irements

to review product risks against the client’s risk appetite,

consider

ing ﬁnancial objectives, ﬁnancial ab

ity, and

knowledge. Clients are also provided with clear and simple

documentation that outlines key product features and risks

prior to executing a transaction.

Fees and charges are disclosed to clients in line with

regulatory requirements and industry best practice, and

where available, benchmarked against competitors. For

Personal and Business Banking products, agreed interest rates

, fees and other charges as billed to clients are monitored and

assessed locally, with global oversight.

Triggers for outlier fees and charges are deﬁned and subject

to annual review. Complaints are reviewed on an ongoing

basis and are one of the factors that are taken into account

prior to amendments to annual interest, fees and charges. We

also assess our product portfolio for new risks to ensure they

remain appropriate for client needs and aligned to emerging

regulation. These quantitat

ive and qual

itat

ive assessments,

includ

ing Per

iod

ic Product Rev

iews, are intended to provide a

complete view of whether to continue, enhance, grow or retire

products.

Throughout 2022, we also mainta

ined our sharp focus on

improv

ing the cl

ient experience across the Bank. We engaged

with clients to show them the opportunit

ies trade corr

idors

could bring and how using our network could help them

ﬂourish.

Our focus on partnerships in CPBB is showing results with

new partnerships launched in Vietnam, Indonesia and more

recently Singapore in addit

ion to the partnersh

ips we have

in China. These partnerships have incrementally acquired

1.2 mill

ion cl

ients, many of whom have the potential to avail

themselves of the full suite of CPBB products.

2022 saw a sign

iﬁcant

increase in our dig

ital wealth

capabil

ies with the delivery of Online Equity platforms in

Malaysia and the United Arab Emirates and the myWealth

Direct service in Hong Kong which offers personalised ins

ights

and investment ideas directly to clients.

In 2023, we will continue to listen and respond to stakeholder

prior

ies and concerns, addressing feedback as it emerges,

strengthen our dig

ital transformat

ion and innovat

ion

capabil

ies, and support our clients as they transit

ion to

net zero.

Their interests

•

Different

iated product and serv

ice offering

•

Dig

itally enabled and pos

ive exper

ience

• Sustainable ﬁnance

•

Access to internat

ional markets

Strategic report

Standard Chartered

– Annual Report 2022

How we create value

We engage with public authorit

ies to play our part

supporting the effective function

ing of the ﬁnancial system

and the broader economy.

How we serve and engage

We actively engage with governments, regulators and

policymakers at a global, regional and national level to share

ins

ights and support the development of best pract

ice, and

adoption of consistent approaches, across our markets.

In 2022, we engaged with regulators, government ofﬁc

ials and

trade associat

ions on a broad range of top

ics that included

internat

ional trade, susta

inab

ity, data, cyber security, dig

ital

adoption, and innovat

ion. We also engaged w

ith ofﬁc

ials on

the ﬁnancial serv

ices regulatory environment, in particular

on prudential, ﬁnanc

ial markets, conduct and ﬁnancial cr

ime

frameworks.

In support of this, we have a Group Public and Regulatory

Affairs team responsible for engagement as well as

ident

ify

ing and analysing relevant polic

ies, leg

islat

ion and

regulation. This work is overseen by various governance

forums with

in the Bank, wh

ich comprise senior executives

representing business and control functions to support

alignment between advocacy and business strategies.

For more details on our engagement with regulators and

governments, as well as our industry and membership associat

ions

please see

sc.com/polit

icalengagement

Their interests

•

Strong capital base and liqu

ity posit

ion

•

Robust standards for conduct and ﬁnancial cr

ime

•

Healthy economies and competit

ive markets

• Posit

ive susta

inable development

•

Dig

ital

innovat

ion

in ﬁnanc

ial serv

ices

• Operational resil

ience

• Customer protection

Regulators and governments

The Group has delivered a strong performance in 2022, with

return on tangible equity (RoTE) back above pre-pandemic

levels. We are executing well against the ﬁve strategic actions

we set out earlier in the year while navigat

ing through a

challenging external environment. Our aim is to accelerate

the delivery of our ambit

ion of double-d

it RoTE.

Regular and transparent engagement with our investors,

and the wider market, helps us understand investors’ needs

and tailor our public informat

ion accord

ingly. In addit

ion to

direct engagement from our Investor Relations team, we

communicate through quarterly, half and full-year results,

conferences, roadshows, investor days and media releases.

There was continued adoption of virtual mediums during

the year, coupled with a growing number of face-to-face

interact

ions from the very low levels seen

in the last two years.

We hosted two capital market days, focusing on our Financ

ial

Markets business and Consumer, Private and Business

Banking Afﬂuent Clients in June and November respectively.

How we create value

We aim to deliver robust returns and long-term sustainable

value for our investors.

How we serve and engage

We rely on capital from debt and equity investors to execute

our business model. Whether they have short- or long-term

investment horizons, we provide our investors with informat

ion

about progress against our strategic and ﬁnanc

ial

frameworks.

Through our footprint and the execution of our sustainab

ity

agenda, we provide our investors with exposure to

opportunit

ies

in emerging markets. We believe that our

integrated approach to ESG issues, as well as a strong risk and

compliance culture, are key different

iators.

Investors

continued

Investors

Princ

ipal Board dec

ion – market entr

ies

and exits

We are accelerating our strategy to deliver efﬁc

ienc

ies,

reduce complexity and drive scale. During 2022, the

Board approved a set of actions to focus resources with

the Africa and Middle East (AME) region to those areas

where they can have the greatest scale and growth

potential, for the beneﬁt of our shareholders, employees

and customers.

Subject to regulatory approval, we intend to exit onshore

operations in seven markets in AME, and in a further

two markets to focus solely on our CCIB business. The

Group has invested heavily in recent years in the AME

region, includ

ing fundamentally transform

ing its dig

ital

capabil

ies in its African markets. It has also been

expanding its footprint to cover some of the largest and

fastest-growing economies, having recently opened its

ﬁrst branch in the Kingdom of Saudi Arabia and obtained

prelim

inary approval for a bank

ing licence in the Arab

Republic of Egypt. The seven markets where there will

be a full exit of operations are Angola, Cameroon,

Gambia, Jordan, Lebanon, Sierra Leone and Zimbabwe.

In Tanzania and Cote d’Ivoire, the Consumer, Private and

Business Banking businesses will be exited and the focus

will turn solely to CCIB.

As part of the Board’s decis

ion-mak

ing, it recognised

that there were a number of potential challenges, risks,

costs and sign

iﬁcantly

impacted stakeholders to consider,

which management was also aware of. Carefully

designed and executed engagement with regulators,

governments and employees, as well as with other key

stakeholders, continues to be crucial. The Board has

received regular updates since the decis

ion was made.

Standard Chartered

– Annual Report 2022

Strategic report

Stakeholders

How we create value

Through the engagement of suppliers, both locally and

globally, we seek to support our business with the provis

ion of

efﬁcient and susta

inable goods and services.

How we serve and engage

Supplier selection, due dil

igence and contract management

process is guided by our Third-Party Risk Management Policy

and Standards. In 2022, we further strengthened our supplier

governance given potential increased risk and regulatory

scrutiny.

Our Supplier Charter sets out our aspirat

ions

in relation

to ethics, human rights, divers

ity and

inclus

ion (D&I), and

environmental performance. All newly onboarded suppliers

are expected to agree to adhere with the princ

iples set out

in our Supplier Charter. We seek to reinforce this through the

terms of our standard contract templates, where possible, and

we further encourage alignment to this by sending an annual

letter to all our active suppliers. This also includes guidance

regarding our technology platforms, sustainab

ity aspirat

ions,

payment processes and other relevant princ

iples such as Ant

Bribery and Corruption.

We select and work with suppliers whom we believe support

us to provide efﬁc

ient and value-add

ing goods and services

to our businesses both globally and locally. For example,

during 2022, we partnered closely with our credit/debit card

manufacturing supplier Thales, who went the extra mile

to accommodate our demand amidst a scarcity of chips.

This resulted in the Bank being able to successfully fulﬁl the

spike in demand, due to the very successful launch of our

Singapore dig

ital-only bank – Trust Bank – secur

ing our market

posit

ion

ing and fulﬁll

ing customer expectat

ions.

In 2022, we continued to make progress on our supply-chain

sustainab

ity agenda. In pursuit of our ambit

ion of ach

iev

ing

net zero in our operations by 2025, we continued to offset

emiss

ions from our bus

iness ﬂights. In partnership with an

independent climate consultancy, we continued reﬁn

ing the

Scope 3 upstream emiss

ions measurement methodology

which was used to estimate our supplier emiss

ions.

Our Stands have served to further embed our supplier D&I

approach. In 2022, we started to report and monitor supplier

D&I ind

icators across our footpr

int, and 93 per cent

of our

core markets now have supplier D&I programmes to help

accelerate progress and impact in our local communit

ies. So

far, more than 1,500 employees have been trained internally

to build capabil

ity to del

iver our supplier D&I aims.

In addit

ion, we cont

inue to partner with multiple local and

global non-governmental organisat

ions (NGOs) to

ident

ify

and onboard more sustainable and diverse-owned suppliers

across our core markets.

Suppliers

Stakeholders

continued

Key investor feedback, recommendations and requests are

considered by the Board, whose members keep abreast of

current topics of interest. Standard Chartered PLC’s Annual

General Meeting (AGM) in May was open to shareholders

to attend either in person or electronically where they were

provided a platform to view a live video feed of the meeting.

All partic

ipants were prov

ided with the opportunity to submit

their votes and ask the Board questions.

Sim

ilarly, the Group Cha

irman, alongside some members of

the Board, hosted a ‘hybrid’ stewardship event for inst

itut

ional

investors in November which provided a platform for

shareholders to receive an update on a number of topics,

includ

ing susta

inab

ity, net zero and governance matters. The

event included an open question-and-answer session across a

range of key issues.

An external investor sentiment survey was also conducted

on an anonymous basis during the year, seeking ins

ight

into

how the Group was perceived, to ident

ify areas of focus for

investors and understand how the Group could improve its

investor communicat

ions. Th

is was particularly important

given the changes in the external environment and the

evolution of the Group’s strategy. The Board discussed

key areas which it should focus on to address concerns

highl

ighted by

investors and emerging from the report.

We continue to respond to growing interest from a wide

range of stakeholders on ESG matters, includ

ing

investors.

We sought shareholder endorsement for our net zero

pathway at the AGM, intended as a means by which we will

measure progress, engage and gather views. We also work

with sustainab

ity analysts and partic

ipate

in sustainab

ity

ind

ices that benchmark our performance,

includ

ing the

Carbon Disclosure Product (CDP) Climate Change survey and

Workforce Disclosure Init

iat

ive.

In 2023, we will continue to engage with investors on progress

against our strategic prior

ies and actions, as well as our

ﬁnancial framework as we progress towards our returns

target.

Their interests

•

Safe, strong and sustainable ﬁnanc

ial performance

•

Facil

itat

ion of sustainable ﬁnance to meet the UN

Sustainable Development Goals

•

Progress on ESG matters, includ

ing advanc

ing our net zero

agenda

Investors

continued

26 out of 28 in-scope markets

Strategic report

Standard Chartered

– Annual Report 2022

How we create value

We strive to operate as a sustainable and responsible

company, working with local partners to promote social and

economic development.

How we serve and engage

We engage with a wide range of civ

il soc

iety and

internat

ional and local NGOs, from those focused on

environmental and public policy issues to partners deliver

ing

our community programmes. To shape our strategy, we

aim for constructive dialogue that helps us to understand

alternative perspectives and that our approach to doing

business is understood. This includes working with NGOs that

approach us about a specif

ic cl

ient, transaction or policy.

In 2022, climate change, our net zero pathway, human

rights and biod

ivers

ity continued to underpin many of our

conversations. We primar

ily rece

ived NGO feedback via

our public inbox and responded to queries in line with our

Reporting & Engagement Standard. For complex issues such

as climate change, we held bilateral virtual meetings with

NGOs to exchange perspectives in greater depth. In advance

of our AGM, we commiss

ioned GlobeScan, a lead

ing market

research provider, to conduct 20 stakeholder interv

iews w

ith

leaders across NGOs, academia, business and specialty

research inst

itutes from seven countr

ies to analyse how our

net zero pathway aligns to external expectations.

In 2023, we antic

ipate mapp

ing our NGO relationsh

ips to

ident

ify top

ics and geographies where we can strengthen our

engagement.

We hosted a third edit

ion of the Futuremakers Forum, br

ing

together over 1,700 clients, employers, NGOs, employees and

project partic

ipants from 61 markets to bu

ild partnerships

and create economic opportunit

ies focused on young

people. Through the two-day virtual event, we deepened

our understanding of ﬁnanc

ial products and serv

ices young

people want and need to unleash their full potential.

To increase employee engagement, we launched Mentors

Den for almost 400 colleagues across 12 markets to provide

career advice and support to over 650 Futuremakers

partic

ipants. In 2022, Futuremakers reached 335,386 young

people with education, employabil

ity and entrepreneursh

opportunit

ies.

Their interests

•

Climate change and decarbonisat

ion

•

Biod

ivers

ity and animal welfare

• Human rights

• Financ

ial

inclus

ion

• Social impact

Society

In Kenya we work with An-Nisa Taxi Lim

ited, who prov

ide

self-employed female-driven taxi services to the Bank. This

provides women employees and clients in Kenya with the

option to work and travel in a safe environment. An-Nisa’s

overall vis

ion

is to increase employment opportunit

ies for

women in what is currently a male-dominated sector.

Working with An-Nisa means Standard Chartered can

directly contribute to posit

ively

impact

ing the l

ife of the

women who own and drive the taxis.

In 2023, supply chain sustainab

ity will continue to be

a primary focus. We intend to progress integrat

ion of

environmental and social risks into our Third-Party Risk

Management Framework. Also, we plan to roll out new

iat

ives to help create soc

ial impact and further reduce

carbon emiss

ions w

ith

in our own operat

ions and supply chain.

Our Supplier Charter can be viewed at

sc.com/suppliercharter

Read more about our supplier divers

ity standard:

sc.com/supplierd

ivers

ity

Their interests

• Sustainab

ity and divers

ity

•

Open, transparent and consistent tendering process

•

Will

ingness to adopt suppl

ier-driven innovat

ions

•

Accurate and on-time payments

Standard Chartered

– Annual Report 2022

Strategic report

Stakeholders

How we create value

We recognise that our workforce is key to driv

ing our

performance and productiv

ity and that the d

ivers

ity of our

people, cultures and network sets us apart. To lead the way in

addressing the evolving needs of our clients and the advances

in technology, we are developing a workforce that is future-

ready and are co-creating with our employees an inclus

ive,

innovat

ive and cl

ient-centric culture that drives ambit

ion,

action and accountabil

ity.

How we serve and engage

By engaging employees and fostering a posit

ive exper

ience

for them, we can better serve our clients and deliver on our

Purpose and Stands. A culture of inclus

ion and amb

ion

enables us to unlock innovat

ion, make better dec

ions, del

iver

our business strategy, live our valued behaviours and embody

our brand promise: here for good. We proactively assess and

manage people-related risks, for example, organisat

ion,

capabil

ity and culture, as part of our Group r

isk management

framework.

Our People Strategy, which was approved by the Board in mid-

2019, stays relevant and future-focused, with the pandemic

having accelerated many of the future of work trends which

informed our approach.

Their interests

Translating our here for good brand promise and Purpose

of ‘Driv

ing commerce and prosper

ity through our unique

divers

ity’

into our colleagues’ day-to-day experience is crit

ical

to us remain

ing an employer of cho

ice across our footprint.

The research we have on our Employee Value Proposit

ion

(EVP) tells us that our employees, or potential employees,

want to: have interest

ing and

impactful jobs; innovate with

a unique set of markets and clients; cultivate a brand that

sustainably drives commerce and offers enrich

ing careers

and development; and be supported by great people leaders.

They want these elements to be anchored in competit

ive

rewards and a posit

ive work–l

ife balance. The employment

proposit

ion

is a key input to our People Strategy which

supports the delivery of our business strategy.

Listen

ing to employees

Frequent feedback from employee surveys helps us ident

ify

and close gaps between colleagues’ expectations and

their experience. In addit

ion to our annual survey, we use

continuous-listen

ing mechan

isms that capture colleague

sentiment more frequently, through a rolling culture survey

and through surveys at key moments for our employees, such

as when they join us, when they leave, and when they return to

work after parental leave.

In 2022, our annual My Voice survey was conducted in May

and June: 87 per cent of our employees (65,988) and 44 per

cent of elig

ible agency workers (1,797) part

ipated

in the

survey.

Key measures of employee satisfact

ion have stayed stable

in 2022, with an increase in our employee Net Promoter

Score (NPS) (which measures whether employees would

recommend working for us) and a slight drop in our employee

engagement index. We are encouraged to see that 96 per

cent of employees feel committed to doing what is required to

help the Group succeed, 88 per cent feel proud about working

for the Group, and 83 per cent say that the Group meets or

exceeds their expectations. The scores ind

icate that we have

continued to improve as a place to work.

In addit

ion to leverag

ing inputs from employee surveys, the

Board and Management Team also engage with and listen

to the views of colleagues through interact

ive sess

ions. More

informat

ion on the Board’s engagement w

ith the workforce

can be found on page 162 in the Directors’ Report.

Externally, our Glassdoor rating (out of ﬁve) has increased

from 3.7 in 2019 to 3.9 in 2022, and 79 per cent would

recommend working with us to friends. We also continue to

be recognised as an employer of choice, in 2022, we ranked

as one of the World’s Best Employers in Forbes for the second

time; ranked as a Divers

ity Leader for the th

ird consecutive

year in the Financ

ial T

imes report on Divers

ity and Inclus

ion

in Europe; ranked for the second time with

in the Top 100

organisat

ions

in the Reﬁn

iv Divers

ity and Inclus

ion Index; and

were also recognised in the Bloomberg Gender-Equality Index

for the seventh consecutive year.

All of this is ind

icat

ive of our progress in further strengthening

our employee value proposit

ion to attract, reta

in and grow

the skills and talent that are crit

ical to del

iver

ing our strategy

and outcomes for clients.

Employees

Stakeholders

continued

Group KPI: Employee engagement

eNPS measures the number of promoters (who would recommend the Group

as a great place to work) compared with detractors on a scale from -100 to +100.

This is reﬂected in the percentage change calculation.

Aim

Increase engagement across the Group by creating

a better working environment for our employees that should

translate into an improved client experience.

Analysis

eNPS has increased year-on-year from 2021 and

sign

iﬁcantly

increased since 2016 (2.44 in 2016) when we

started our culture transformation.

Employee net promoter score (eNPS)

+4.1

17.55

2022

2021

2020

2019

12.94

17.51

11.51

Strategic report

Standard Chartered

– Annual Report 2022

The health, safety, and resil

ience of our colleagues (

includ

ing

in worsening pandemic condit

ions

in some markets or other

cris

is s

ituat

ions) cont

inues to be a key prior

ity. We are m

indful

that the levels of stress felt by employees increased in the

2022 My Voice survey from previous years. At the same time,

the survey data also ind

icated that they felt more supported

on their wellbeing needs, especially around their mental and

physical health. Globally, we offer colleagues access to a

mental health app, a physical wellbeing online platform, an

employee assistance programme, wellbeing toolkits, learning

programmes on resil

ience as well as an expand

ing network

of trained Mental Health First Aiders. We also continue to

aim to mit

igate the causes of work-related stress, encourage

focus on supportive behaviours with

in ex

ist

ing processes and

decis

ion-mak

ing, and seek to insert wellbeing skills-build

ing

across learning intervent

ions.

Adapting to a hybrid world of work

2022 saw renewed optim

ism as pandem

ic-related restrict

ions

eased in many of our markets, creating opportunit

ies for

employees to increas

ingly engage w

ith clients, colleagues and

communit

ies

in person. We continue to implement the ﬂexi-

working model that we in

iated in 2021, combin

ing ﬂex

ity

in working patterns and locations. The model has now been

rolled out in 43 of our markets, with 78 per cent of employees

in these markets on agreed ﬂexi-working arrangements. This

has been a sign

iﬁcant step towards bu

ild

ing on the pos

ive

lessons learnt from the pandemic around productiv

ity and

employee experience. Our model is enabling us to be more

inclus

ive of the d

iverse needs of our workforce and support

their wellbeing and at the same time consciously balance

ind

idual choice and ﬂexib

ity with business prior

ies

and client needs. Hybrid workers have expressed greater

satisfact

ion w

ith overall employee experience and work-

life balance in the 2022 My Voice survey in comparison to

employees working fully remotely or fully in the ofﬁce.

As employees have started to experience their agreed hybrid

working arrangements with the easing of pandemic-related

restrict

ions, they have also been requ

ired to explore and

adopt ways of working in a ‘new normal’ that balances the

beneﬁts of remote working with face-to-face interact

ions.

Toolkits and guidance have been provided to ind

iduals and

leaders to help navigate hybrid working, includ

ing support

on how to organise team and ind

idual work in ways that

maxim

ise product

ity and wellbe

ing; on leading in key

moments such as onboarding new team members, returning

from parental leave and during performance conversations;

and on recreating ‘water cooler’ moments in hybrid work

environments. We continue to re-imag

ine our phys

ical

workspaces with the relevant infrastructure and technology to

provide hubs for teamwork, collaboration and learning.

Read more about our approach to hybrid working at

sc.com/hybridwork

ing

Strengthening our culture of high-performance

As the Group transforms to achieve our strategic ambit

ions,

we have refreshed the way we manage, recognise and

reward performance (launched as myPerformance in 2022).

We aim to build a strong culture of ambit

ion, act

ion and

accountabil

ity by focus

ing on continuous feedback, coaching,

and balanced two-way performance and development

conversations. As we place even greater emphasis on

recognis

ing outperformance that

is driven by collaboration

and innovat

ion, and encourage more ﬂex

ity and aspirat

ion

during goal-setting, we have removed ind

idual performance

ratings for all employees.

Behavioural changes are already vis

ible and we w

ill further

embed the cultural shift through a multi-year journey. In 2022,

over 291,000 pieces of feedback were exchanged among

colleagues (which is 1.5 times the amount of feedback that

was exchanged in the previous year). More than half of our

people leaders received feedback from their direct reports,

through our ‘always on’ feedback tool available to all

colleagues as well as through the 360-degree feedback tool

that has been launched for mid-to-senior people leaders.

We believe that the increase in upward feedback ind

icates

a greater sense of psychological safety in the organisat

ion.

The feedback is also provid

ing useful

input for further build

ing

leadership capabil

ies across the Group.

Strengthening leadership capabil

ity, spec

ically

in our people

leaders who are most directly responsible for the development

of their teams, is a key enabler of our performance and culture.

People leaders stepped up throughout the pandemic and we

saw manager NPS continue to increase to 33.07 in 2022

(+ 3.35 points year-on-year). As the expectations that

employees have of their people leaders continue to grow and

evolve, we are also re-imag

ing how we embed leadership

deep into the organisat

ion. Our Leadersh

ip Agreement forms

the foundation for a modernised leadership development

offering that all people leaders will complete over the next

three years. We are also encouraging leadership capabil

ity

build

ing across all employees through the Leadersh

Academy on our online learning platform diSCover, during

our annual Global Learning Week, and through a 60-day

Leadership Health journey of regular micro-learning activ

ies.

Read our Leadership Agreement at

sc.com/leadershipagreement

Employees

continued

Build

ing leaders that Asp

ire,

Inspire and Execute

Exceptional performance requires exceptional leadership.

With inputs from our colleagues, we have captured in our

Leadership Agreement what we believe it takes to lead

at Standard Chartered. We are asking each colleague

to Aspire, Inspire and Execute to take us from where we

are today to where we have committed to be, and to

deliver on our Purpose. In 2022, over 7,900 colleagues

have voluntarily signed up to this agreement. We are

embedding this standard of leadership into how we

induct, develop, measure and recognise our leaders.

Standard Chartered

– Annual Report 2022

Strategic report

Stakeholders

Developing skills of future strategic value

The rapid changes in the world of work demand that our

employees strengthen a combinat

ion of human and techn

ical

skills to keep pace. We are build

ing a culture of cont

inuous

learning that empowers employees to grow and follow

their aspirat

ions. We are help

ing them to build the skills

needed for high performance today, to reskill and upskill

for tomorrow and to be global cit

izens who understand the

changing nature of the world in which we operate. Since

2020, the average hours invested by employees in personal

development has increased by 23.8 per cent to 26.8 hours

in 2022.

We have continued to balance learning in classrooms with

learning through our online learning platform diSCover, which

is also accessible via a mobile app. Over 77,000 colleagues

actively used the platform in 2022 and 32,000 colleagues

have used one or more of our Future Skills Academies which

include the Data & Analytics, Dig

ital, Cyber, Cl

ient Advisory,

Sustainable Finance and Leadership Academies. Employees

also have the opportunity to learn and practise new skills on

the job through projects (often cross-functional and cross-

location) and mentoring made available through our AI-

enabled Talent MarketPlace platform. Since the launch of the

platform, employees have signed up for over 1,200 projects,

unlocking close to $4 mill

ion

in terms of productiv

ity.

We have further scaled the design and deployment of

targeted upskill

ing and resk

ill

ing programmes d

irected

towards crit

ical ‘future’ roles where our strateg

ic workforce

planning analysis has predicted the increas

ing need for talent,

includ

ing un

iversal bankers, data translators, cloud security

engineers and cyber security analysts. This approach has

united our recruitment, talent management and learning

efforts to target, upskill and deploy employees into new roles.

We are strengthening and scaling our work on sustainab

ity,

innovat

ion, performance, d

ital and leadersh

ip skills-build

ing,

both across and with

in roles.

Creating an inclus

ive workplace

We believe that inclus

ion

is how we will enable our diverse

talent to truly deliver impact. Our progress in this space

is reﬂected in our annual My Voice survey, where 83.1 per

cent of employees reported posit

ive sent

iments around our

culture of inclus

ion, wh

ich is higher than last year. This has

been enabled by increas

ing awareness around d

ivers

ity and

inclus

ion pr

inc

iples, unconsc

ious bias and micro behaviours as

well as emphasis

ing the

importance of creating an inclus

ive

environment – aspects that are covered in the ‘When we’re all

included’ learning programme which had been completed by

over 28,000 colleagues by the end of 2022.

Colleagues are also encouraged to join employee resource

groups aligned to shared characterist

ics or l

ife experiences

(includ

ing gender, ethn

ity and nat

ional

ity, generat

ions,

sexual orientat

ion, and d

isab

ity). ERGs across our markets

provide addit

ional learn

ing, development and networking

opportunit

ies, espec

ially for underrepresented populations,

and are a valuable source for better understanding the

lived experience of our workforce. This has already resulted

in improvement through actions - such as the expansion of

more accessible and assist

ive technology to support better

access to necessary tools for work, the launch of our SC Pride

Charter to cultivate a respectful and safe work environment,

and the release of an inclus

ive language gu

ide to promote

psychological safety and review business terms to be

more inclus

ive.

Read our inclus

ive language gu

ide at

sc.com/inclus

ivelanguagegu

ide

Our gender divers

ity cont

inues to grow with more women

leaders moving up to senior roles. Women currently represent

43 per cent of the Board, 16 of our CEOs are women, and

representation of women in senior leadership roles increased

to 32.1 per cent at the end of 2022. We are committed to

continuous improvement in this area and aspire to have

35 per cent representation of women at a senior level by 2025.

This aspirat

ion

is further supported by programmes such as

our IGNITE Coaching programme, which develops our women

talent in preparation for future roles.

We remain focused on build

ing a workforce that

is truly

representative of our client base and footprint. As of 2022,

21 per cent of our Board ident

iﬁes as be

ing from a minor

ity

ethnic background, and we have committed to the aspirat

ion

of reaching a min

imum of 30 per cent. Further, 22.9 per cent

of our Global Management Team and their direct reports

ident

ify as Black, As

ian or minor

ity ethn

ic. In the United

Kingdom, Black representation in senior leadership is 2.5

per cent and Black, Asian and minor

ity ethn

ic in senior

leadership is 18.1 per cent. In the United States, Black/African

American representation in senior leadership is 3.1 per cent

and Hispan

ic/Lat

inx in senior leadership is 9.4 per cent. We

continue to develop strategic partnerships and extend our

Futuremakers RISE programme to increase the divers

ity of

our talent pipel

ines. As we work towards ach

iev

ing our 2025

UK and US ethnic

ity sen

ior leadership aspirat

ions, we are

also focusing on nurturing local talent in markets across Asia,

Africa and the Middle East. We provide employees, where

legally permiss

ible, the ab

ity to self-

ident

ify ethn

ity data

through our online systems, and are increas

ing awareness

Employees

continued

Stakeholders

continued

Build

ing a d

isab

ity conﬁdent organisat

ion

Removing barriers and increas

ing access

ity have been

key focus areas. We build on the results from our internal

Disab

ity Conﬁdent Assessment, conducted in more than

40 markets to date, to take directed action. We continue

to enhance the accessib

ity of our technology, includ

ing

provid

ing s

ign language functional

ity

in e-learning

programmes.

Our continued partnership with the Purple Tuesday

iat

ive across more than 35 markets

is increas

ing

the vis

ity of role models and careers for those w

ith

disab

ies. It

is also build

ing capab

ies to break down

myths and stereotypes when engaging with clients and

colleagues with disab

ies. We’re encouraged that,

2022, a greater number of colleagues disclosed about

having a disab

ity and the annual My Voice survey

highl

ighted

improvements in their experience.

Strategic report

Standard Chartered

– Annual Report 2022

Employees

continued

Female representation

Female

(2021: 31%)

Board

2021

2022

Female

32.8

(2021: 28.4%)

Management Team and their direct reports

2021

2022

Female

Male

Female

Male

Senior leadership

(Managing directors and band 4)

2021

2022

Female

45.3

(2021: 45.5%)

All employees

2021

2022

Female

32.1

(2021: 30.7%)

Female

1,420

Male

2,989

Undisclosed

Female

37,688

Male

44,734

Undisclosed

844

on the value and purpose of collecting this informat

ion. As

we encourage and expect increased partic

ipat

ion and self-

declaration of ethnic

ity, we a

im for it to provide addit

ional

ins

ights towards bu

ild

ing an even more representat

ive

workforce.

We recognise six key D&I dates* across the year and use

these as focal points to facil

itate open d

ialogue on inclus

ion

internally and externally. Through these global campaigns we

engage and strengthen relationsh

ips w

ith clients and external

stakeholders, collectively rais

ing awareness, promot

ing best

practices and committ

ing to take pract

ical steps to advance

the D&I agenda in the community.

International Day Against Homophobia, Transphobia and Biphob

ia,

International Day of Persons with Disab

ies, Internat

ional Men’s Day,

International Women’s Day, and World Day for Cultural Divers

ity for D

ialogue

and Development, World Mental Health Day

Equal pay – Gender and Ethnic

ity Pay Gaps

To better understand the strengths and gaps of the

organisat

ion, and develop act

ion plans to tap into the

potential of a truly diverse and inclus

ive workforce, we have

been analysing and publish

ing our gender pay gap stat

ist

ics

for our ﬁve hub locations (UK, US, Hong Kong, Singapore,

and UAE). The gender pay gap is calculated based on the

approach by the UK government and compares the average

pay of men and women without accounting for some of the

key factors which inﬂuence pay, includ

ing d

ifferent roles, skills,

senior

ity and market pay rates.

Compared with last year, our mean bonus pay gaps have

decreased in every market while our mean hourly pay gaps

have remained mostly ﬂat, with reductions seen in Singapore,

Hong Kong, and UAE. While our gender pay gaps have

steadily improved since our ﬁrst disclosure for 2017, they

remain at a level that sign

iﬁes proport

ionally more male than

female colleagues in senior roles and/or roles with higher

market rates of pay.

To complement the legislat

ive approach

in the UK, we also

calculate an adjusted pay gap, which compares women and

men at the same hierarchy level and in the same business

area. Mirror

ing prev

ious years, the narrow margins for the

adjusted pay gap analysis ind

icate that our female and male

colleagues in the same business areas and at the same levels

of senior

ity are pa

id sim

ilarly. Equal pay

is a key commitment

in our Fair Pay Charter and we carry out checks during hir

ing,

promotion and year-end review in all markets to challenge

potential bias and ensure there is equal pay for equal work.

In addit

ion to the gender pay gap analys

is, this year we have

also prepared for the ﬁrst time an ethnic

ity pay d

isclosure for

the UK and the US. These two markets are our regional hubs

where we have set ethnic

ity targets for sen

ior management

representation.

Further details of our ethnic

ity pay and gender pay analys

is can be

found in our Fair Pay Report at

sc.com/fairpayreport

2022 Gender pay gap

Hong Kong

Singapore

UAE

Mean hourly pay gap

29%

20%

30%

25%

Mean bonus pay gap

49%

39%

41%

57%

44%

The hourly pay gap is calculated by taking the difference between the mean female and male hourly pay, expressed as a percentage of the male amount

The Bonus pay gap is calculated by taking the difference between the mean female and male bonus payments received in the 12 months prior to 5 April,

expressed as a percentage of the male amount

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Driv

ing a Susta

inable Future

Including our response to the recommendations and recommended disclosures

of the Task Force on Climate-related Financ

ial D

isclosures (TCFD)

Our approach to ESG Reporting

We adopt an integrated approach to corporate reporting,

embedding non-ﬁnanc

ial

informat

ion throughout th

annual report.

In line with our ‘comply or explain’ obligat

ion under the

UK’s Financ

ial Conduct Author

ity’s List

ing Rules, we can

conﬁrm that we have made disclosures consistent with the

TCFD recommendations and recommended disclosures

in this annual report, except for one area: we do not fully

disclose Scope 3 greenhouse gas emiss

ions as we are

in the

process of conducting the detailed analysis of our portfolio

starting with the sectors which are most carbon intens

ive.

Consequently, in relation to ﬁnanced emiss

ions,

in this

2022 Annual Report, we disclose our Scope 3 greenhouse

gas emiss

ions (GHG) for e

ight sectors. For FY23, we

plan to disclose our Scope 3 ﬁnanced emiss

ions for four

addit

ional sectors. Beyond that, we a

im to incrementally

improve the portfolio coverage as market data on

emiss

ions becomes more w

idely available. Further

informat

ion

is available on pages 76 to 83. In line with

the current UK List

ing Rules requ

irements, our TCFD

disclosures also take into account the implementat

ion

guidance included in the TCFD 2021 Annex.

Our disclosures are also guided by core standards,

frameworks and princ

iples to the extent relevant to

our business, as envisaged under the voluntary Global

Reporting Init

iat

ive (GRI), SASB Standards, and the World

Economic Forum (WEF) Stakeholder Capital

ism Metr

ics

framework, Equator Princ

iples (EP) and UN Pr

inc

iples for

Responsible Banking.

See pages 68 to 72

for a summary of our TCFD disclosures.

This integrat

ion

is intended to promote transparency,

build trust and provide our investors with a better

understanding of the impl

icat

ions of climate-related

risks and opportunit

ies for our bus

inesses, strategy,

ﬁnancial plann

ing, governance and risk management.

Report/Disclosure

Descript

ion

Location

ESG Data Pack

•

Granular breakdown of quantitat

ive

ESG informat

ion.

sc.com/esgdatapack

ESG Reporting Index

(to be published by end Q1 2023)

•

Alignment index tables to our prior

ity

reporting frameworks, includ

ing GRI,

SASB Standards, WEF, EP and UN PRB.

sc.com/esgreport

Modern Slavery Statement

•

This report sets out the steps we have

taken to assess and manage the risk of

modern slavery and human trafﬁcking

in our operations and supply chain.

sc.com/modernslavery

Sustainable Finance

Impact Report

•

We present the impact of our Sustainable

Finance assets on a portfolio basis,

covering the whole range of our $13.5bn

worth of assets.

sc.com/SFimpactreport

CDP Climate Change

•

We partic

ipate

in the CDP Climate

questionna

ire, scor

ing an A- in 2022.

sc.com/ESGratings

Workforce Disclosure Init

iat

ive

(WDI)

•

We continued our partic

ipat

ion in the WDI in

2022, winn

ing the award for most transparent

disclosures, and the Contingent Workforce

Data Award. We achieved an overall

disclosures score of 99% in the most recent

assessment.

The following pages set out our approach and

progress relating to sustainab

ity and its content is

subject to the statements included in (i) the ‘Forward-

Looking Statements’ section; and (i

i) the ‘Bas

is of

Preparation and Caution Regarding Data Lim

itat

ions’

section provided under ‘Important Notices’ at page

498. Addit

ional

informat

ion can be accessed through

our suite of supporting sustainab

ity reports and

disclosures at sc.com/sustainab

ity hub or via the

links below:

Standard Chartered

– Annual Report 2022

Strategic report

Achiev

ing econom

ic, social and environmental

sustainab

ity is one of the greatest challenges

of our generation and a prior

ity for the Group.

In 1987, the United Nations Brundtland

Commiss

ion deﬁned susta

inab

ity as

“meeting

the needs of the present without compromis

ing

the abil

ity of future generat

ions to meet their

own needs”

Here at Standard Chartered we are

consider

ing what susta

inab

ity means to us, and

how it can be translated into implementable

investments and actions across the Group.

Our Purpose is to drive commerce and prosperity through our

unique divers

ity. Through our valued behav

iours to never settle,

be better together, and do the right thing, we intend to truly

live our brand promise to be here for good.

However, there are a number of global challenges ahead.

We are faced with worsening climate impacts, stark inequal

ity,

and unfair aspects of globalisat

ion. Nowhere

is this felt

more keenly than in our core markets of Asia, Africa and

the Middle East.

We are taking a stand to combat these challenges and setting

long-term ambit

ions to help address the most press

ing issues

we face today when seeking to deliver sustainable social and

economic development across our business, operations and

communit

ies. In 2021, we formally recogn

ised Sustainab

ity as

a core component of our strategy, elevating it to a pillar of our

Group Strategy (see page 23). In July 2022, we took this a step

further and appointed Marisa Drew as our Chief Sustainab

ity

Ofﬁcer (CSO), to help drive our sustainab

ity agenda and

bring together our exist

ing Susta

inable Finance, Net Zero

Programme Management and Sustainab

ity Strategy Teams.

The dedicated CSO ofﬁce harmonises our exist

ing efforts

sustainab

ity and is responsible for creating and executing the

Group-wide sustainab

ity strategy, includ

ing del

ivery against

our net zero pathway. With a presence in parts of the world

where sustainable ﬁnance can have the greatest impact,

and a wealth of experience across the Sustainable Finance

(SF) and Environmental and Social Risk Management (ESRM)

teams, our CSO ofﬁce is well placed to support our clients in

their transit

ion to net zero, mob

ise cap

ital at scale and help

develop solutions.

We want to help make the world a better, cleaner and safer

place. We also want to contribute towards facil

itat

ing a

just transit

ion – one where cl

imate object

ives are met w

ithout

depriv

ing emerg

ing markets of their opportunity to grow

and prosper.

For more informat

ion on our susta

inab

ity governance see

pages 113

to 116

Measuring what matters most –

understanding our material

ity

Since 2016, our approach to striv

ing towards a susta

inable

and responsible business has been underpinned by our suite

of Sustainab

ity Aspirat

ions. These set out how we a

im to

promote social and economic development and deliver

sustainable outcomes in the areas in which we believe we can

make the most material contribut

ion to the del

ivery of the

UN Sustainable Development Goals (UN SDGs). We measure

progress against the targets set out in our Sustainab

ity

Aspirat

ions and

incorporate selected Aspirat

ions

into the

Group Scorecard to ensure consistent measurement, drive

widespread awareness and subsequently support delivery. As

a signatory of the UN Princ

iples of Respons

ible Banking (PRB),

we util

ise the gu

idance and tools provided as an input

to validat

ing the areas of our greatest

impact.

'Material

ity'

is considered to be the threshold for sign

iﬁcance

of reporting ESG issues for users of ﬁnanc

ial statements:

investors and other stakeholders. We take into considerat

ion

the guidance as provided by the IFRS Foundation Standards,

understanding that material issues are those which could

reasonably be expected to inﬂuence decis

ions of those

users. We also note that material

ity for ESG cons

iders both

quantitat

ive aspects as well as qual

itat

ive

informat

ion,

includ

ing a regard for susta

inable social and economic

development. This will evolve over time and we plan to

continue to assess our approach and reporting based on

relevance to our users.

Creating our inaugural

Chief Sustainab

ity Ofﬁce

85.7

82.9

+2.8%

Group KPI:

Deliver

ing Susta

inab

ity Aspirat

ions %

2022

2021

78.4

2020

Each Aspirat

ion conta

ins one or more performance measures. The KPI is the

proportion of all measures that have been achieved or are on track to be

delivered at the end of the reporting period.

Further details on each Aspirat

ion can be found

between

pages 485 and 487

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Accelerating zero:

Our approach to climate change

We believe that climate change is one of the greatest challenges

facing the world today and that its impact will hit hardest in the markets

where we operate, namely Asia, the Middle East and Africa.

Many of these markets are currently reliant on carbon-

intens

ive

industr

ies for the

ir continued economic growth.

Facil

itat

ing a just transit

ion – one where cl

imate object

ives

are met without depriv

ing develop

ing countries of their

opportunity to grow and prosper – will require care, capital

and special

ised support.

We are well placed to help by direct

ing cap

ital to

emerging markets that have both the greatest

opportunity to adopt low-carbon technology and some of

the toughest transit

ion ﬁnancing and cl

imate challenges.

In recognit

ion of the

important role we can play in the

transit

ion, and

in line with our Stand to Accelerate Zero, in

October 2021, we announced our plan to reach net zero

across our operations, supply chain and ﬁnanced

emiss

ions by 2050, as well as our plan to set amb

ious

inter

im targets to substant

ially reduce our ﬁnanced

emiss

ions by 2030. As a UK headquartered bank, our

pathway takes into considerat

ion the UK’s comm

itment

under the Paris Agreement to reduce GHG emiss

ions by at

least 100 per cent of 1990 levels by 2050, and to reduce

economy-wide GHG emiss

ions by at least 68 per cent by

2030. However, we are applying these targets and

ambit

ions across our global footpr

int, despite a number of

our footprint markets not having a commitment in place

to reach net zero with

in th

is timel

ine at the t

ime of our net

zero pathway publicat

ion

in October 2021.

In May 2022, our Board sought an ordinary resolution on

our net zero pathway at our Annual General Meeting

(AGM).

Company and its shareholders as a whole. The

Board reviewed the pathway before its publicat

ion

and supported the Group’s strategic approach.

In advance of the AGM and as part of the Board’s

process, the Group undertook extensive engagement

with investors, proxy voting agencies, NGOs and other

stakeholders to gather feedback on our net zero

pathway. A summary of feedback was provided to the

Board once these engagements had concluded and

was carefully reviewed. Engagement included:

•

Engagement facil

itated by Investor Forum, a

not-for-proﬁt investor-funded engagement platform,

with investors to understand their perspectives on our

net zero pathway.

•

Bilateral engagement by the Group, led by the Group

Chairman and relevant Board members, with

investors and proxy voting agencies to exchange

perspectives on our net zero pathway.

•

A roundtable hosted by Investor Forum, and with

partic

ipat

ion of the Group Chairman to gather

further feedback on the Group’s net zero pathway.

•

Bilateral engagement, which included the Group

Chairman, with Market Forces and Friends Provident

Foundation to exchange perspectives on the

transit

ion to net zero. Although we sought to

reconcile our perspectives in one jo

int resolut

ion, we

were ultimately unable to do so.

•

Commiss

ion

ing a market research ﬁrm to interv

iew

leaders from NGOs, academia, business and

specialty research inst

itutes from seven countr

ies to

analyse how our net zero pathway aligns against

external expectations.

In line with the Board’s recommendation, the advisory

resolution was endorsed with 83 per cent of shareholder

support at the 2022 AGM, and the requis

ioned

resolution did not pass. The Board is aware that

the transit

ion to net zero

is an ongoing process that

requires continued review and challenge to assess

its appropriateness. The Board oversees the Group’s

sustainab

ity strategy with input from the Culture and

Sustainab

ity Committee. It is regularly apprised of the

progress we are making against the ambit

ions

in the

net zero pathway and continues to be actively involved.

Princ

ipal board dec

ion – Shareholder

advisory vote on net zero pathway

In October 2021, we announced our plan to reach net

zero in our ﬁnanced emiss

ions by 2050 and proposed

this as a shareholder advisory resolution at the

Company’s 2022 AGM. Market Forces and Friends

Provident Foundation ﬁled a resolution outlin

ing a

different climate approach. Notwithstand

ing the fact

that all parties are highly committed to contribut

ing

to the transit

ion to net zero, the Board unan

imously

recommended that shareholders vote for our advisory

resolution and against the requis

ioned resolution,

consider

ing th

is to be in the best interests of the

See

sc.com/netzerowhitepaper

for more informat

ion.

Standard Chartered

– Annual Report 2022

Strategic report

Catalyse

sustainable

ﬁnance and

partnerships

Mit

igate the

ﬁnancial

and non-ﬁnancial

risks

Our net zero plan

Our net zero plan aims to facil

iate solut

ions to

reduce our emiss

ions, catalyse susta

inable

ﬁnance and partnerships, and mit

igate the

ﬁnancial and non-ﬁnancial r

isks we may face

associated with climate change.

In 2022, we mobil

ised $23.4 b

ill

ion through our susta

inable

ﬁnancing act

ies, bring

ing our cumulat

ive sustainable

ﬁnance total to $48 bill

ion s

ince 2021. We continue to focus

on reducing the most harmful activ

ies, by seeking to

reduce absolute ﬁnanced thermal coal min

ing em

iss

ions

by 85 per cent by 2030, from the 2020 baseline, alongside

our long standing commitment to not provide any direct

ﬁnancing to coal-power projects.

We have further invest

igated opt

ions and provided

ﬁnanced emiss

ions basel

ines and targets for eight sectors:

Oil and gas, Power, Coal min

ing, Steel, Other Metals and

min

ing, Av

iat

ion, Automot

ive manufacturers, and Shipp

ing,

covering approximately 61 per cent of the emiss

ions w

ith

our CCIB portfolio. This work will continue through 2023 with

four further sector deep dives in the Alumin

ium, Cement,

Commercial Real Estate (accelerated from 2024 to 2023)

and Resident

ial Mortgages sectors.

As introduced on page 68, this year we have integrated our

TCFD disclosures in this Annual Report. The major

ity of th

informat

ion can be found

in the following section, with

supplementary informat

ion found, for example, w

ith

in the

Risk overview (pages 42 to 51), Corporate Governance

(pages 146 to 183) and the Group Chief Financ

ial Ofﬁcer's

review (pages 32 to 40).

Reduce

our emiss

ions

See

page 74

See

page 88

See

page 84

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

TCFD summary and alignment index

The following table sets out the TCFD recommendations and recommended disclosures and summarises where addit

ional

informat

ion can be found. Where we have not

included climate-related ﬁnanc

ial d

isclosures consistent with all of the TCFD

recommendations and recommended disclosures, further informat

ion

is provided on pages 64 and 77.

Recommendation

Response

Disclosure location

Governance

a) Describe the Board’s oversight of climate-related risks and opportunit

ies

Process and frequency of

communicat

ion to Board

•

The Board and its supporting committees, includ

ing the Board R

isk Committee and

Culture and Sustainab

ity Committee, are responsible for the oversight of climate-

related risks and opportunit

ies. They rece

ive regular Climate Risk updates to guide

them when review

ing and mak

ing strategic decis

ions.

Governance of our

Sustainab

ity Agenda

– page 113

Incorporation of climate-

related issues into Board

and Board Committee

planning and decis

ions

Climate Risk was considered as part of our formal annual corporate strategy and ﬁnanc

ial

planning process.

•

In 2022 we developed management scenarios with an aim to strengthen business

strategy and ﬁnancial plann

ing to support the Group’s net zero ambit

ion.

•

The Board reviewed and approved our approach to reach net zero ﬁnanced emiss

ions

by 2050.

•

Regional and client-segment Chief Risk Ofﬁcers review revenue reliance from clients in

high-carbon sectors and/or locations in regions most exposed to Physical Risk.

Governance of our

Sustainab

ity Agenda

– page 113

Qualitat

ive rev

iew of

climate risks and

opportunit

ies

in annual

business strategy and

ﬁnancial plann

ing –

page 95

Investing in Climate

Research – page 87

Board oversight of

climate-related goals

and targets

•

The Board oversees the Group’s overall net zero plan, and in 2022 reviewed progress on

delivery against the Group’s net zero plan and approved the Group Climate Risk

Appetite Statement and related Board-level metrics.

Governance

committees and

steering groups with

committees – page 114

Sustainable Finance

Governance

Committee – page 116

b) Describe management’s role in assessing and managing climate-related risks and opportunit

ies

Roles and responsib

ies

for climate-related risks

and opportunit

ies

•

Specif

ic roles and respons

ies for the overs

ight of climate change have been

delegated to management. These are deﬁned with

in the ‘Governance comm

ittees and

steering groups with responsib

ity for climate-related issues’ section. Climate-related

agenda frequency and inputs are also set out for these bodies.

•

The Chief Sustainab

ity Ofﬁce as led by the CSO is responsible for creating and

executing the Group-wide sustainab

ity strategy, includ

ing del

ivery against our net

zero pathway.

•

Responsib

ity for ident

ify

ing and managing ﬁnanc

ial r

isks from climate change sits

with the Group Chief Risk Ofﬁcer (Group CRO) as the appropriate Senior Management

Function (SMF) under the Senior Managers Regime (SMR).

•

The Group CRO is supported by the Global Head, Enterprise Risk Management who has

day-to-day oversight and central responsib

ity for the Group’s second line of defence

against Climate Risk.

•

The organisat

ion structure assoc

iated with climate change has also been set out in the

‘Governance of our Sustainab

ity Agenda’ chapter of our annual report.

Governance of our

Sustainab

ity Agenda

– page 113

Governance

committees and

steering groups with

committees – page 114

A descript

ion of the

associated organisat

ional

structures and their

monitor

ing of cl

imate-

related issues

•

Several committees with

in the Group support the Board and Management Team on

the management and monitor

ing of cl

imate change and its associated impacts.

•

The organisat

ion structure assoc

iated with climate change has also been set out in the

‘Governance of our Sustainab

ity Agenda’ chapter of our annual report.

Governance of our

Sustainab

ity Agenda

– page 113

Assessing and

managing climate risk

– page 117

Processes used to inform

management

•

Management is informed by several committees and forums, with climate-related

informat

ion commun

icated via channels includ

ing our Group CRO and Cl

imate Risk

Information Reports.

Governance

committees and

steering groups –

page 114

Standard Chartered

– Annual Report 2022

Strategic report

Recommendation

Response

Disclosure location

Strategy

a) Describe the climate-related risks and opportunit

ies the organ

isat

ion has

ident

iﬁed over the short, med

ium and long term

Relevant short-, medium-,

and long-term

time horizons

•

In our strategic business planning, we consider ‘short-term’ to be less than two years,

‘medium-term’ to be two to ﬁve years and ‘long-term’ to be beyond this. For climate

scenario analysis we can run 30-year scenarios for both Physical and Transit

ion R

isk.

Some elements of our Physical Risk scenario analysis can also extend to 2100.

Our net zero timel

ine –

page 73

Scenario analysis –

page 90

Processes used to

determine material risks

and opportunit

ies

•

We util

ise a range of tools and methodolog

ies, to assess Transit

ion and Phys

ical

Climate Risk, which we apply to our clients, portfolios and our own operations. These

includes: scenario analysis, location-based hazard and risk scores, temperature

alignment scores and Munich Re's NATHAN tool (acute physical risk impact

assessments).

•

In addit

ion, we engage w

ith our corporate clients to understand their transit

ion and

physical risks, as well as their plans to prepare for climate change.

•

In 2022, we continued to enhance our understanding of climate-related risks, and

sign

iﬁcantly strengthened our stress test

ing and scenario analysis abil

ies for a range

of management scenarios that are more plausible.

Scenario analysis –

page 90

Overview of our

Climate Risk toolkit and

applicat

ion – page 99

Climate-related risk and

opportunit

ies

ident

iﬁed

•

We have assessed the impact of Climate Risk to the banking book using scenario

analysis over a 30-year time horizon, which has enabled us to ident

ify and m

igate

climate risks which may manifest.

•

In addit

ion, susta

inab

ity and climate change have moved from being predominantly

risk-based in

iat

ives to becom

ing a value driver. This gives us an opportunity to deploy

our market and industry knowledge to advise our clients on their ind

idual

sustainab

ity journeys.

•

Sustainable ﬁnance is an opportunity to both defend our exist

ing bus

iness from

Transit

ion R

isk, and to fund our clients' transit

ion from a h

igh-carbon present to a low

carbon future. Through supporting clients on their net zero journeys, and provid

ing

further ﬁnance to clients as they adapt to be less carbon intens

ive and em

itt

ing over

time, we help mit

igate the

ir, and our, Transit

ion R

isk. Our aim to achieve Sustainable

Finance income of $1 bill

ion by 2025 and to mob

ise $300 b

ill

ion of Susta

inable Finance

by 2030 are measures of this success.

•

We do not fully disclose impacts on ﬁnanc

ial plann

ing and performance (includ

ing

proportions of income, costs and balance sheet related to climate-related

opportunit

ies), deta

iled Climate Risk exposures for all sectors and geographies or

physical risk metrics. Data lim

itat

ions, and our plans to mit

igate these, are d

iscussed in

greater detail in the report.

Note 1 sign

iﬁcant

judgement and

estimates – page 348

Sustainable Finance

mobil

ised – page 84

Sign

iﬁcant concentrat

ions

of credit exposure to

carbon-related assets

•

We have disclosed our exposures to high-carbon sectors which includes the expected

credit losses on these balances as well as the maturity proﬁles associated with them.

Our exposure to high-carbon sectors makes up 14.4% of our CCIB loan balances.

•

We aim to become net zero in our ﬁnanced emiss

ions by 2050, w

ith inter

im 2030

targets for our highest emitt

ing sectors.

•

In 2022, we made progress towards this goal, and set out to measure, manage and

reduce emiss

ions start

ing with our most carbon-intens

ive sectors,

in line with our net

zero roadmap.

Exposure to high

carbon sectors –

page 78

Reducing our emiss

ions

– page 74

b) Describe the impact of climate-related risks and opportunit

ies on the organ

isat

ion’s bus

inesses, strategy and ﬁnanc

ial plann

ing

Impact of climate-related

risks and opportunit

ies on

business areas

The specif

ic areas

impacted by climate issues include:

Operations

•

We have measured and reduced our greenhouse gas (GHG) emiss

ions s

ince 2008 and

since 2018 we have been actively targeting a reduction in our Scope 1 and 2 emiss

ions

towards a well-below two degrees Celsius scenario.

•

We intend to optim

ise our ofﬁce and branch network, cont

inually maxim

ing efﬁc

iency

while leveraging clean and renewable power where appropriate, in line with our

commitment to the global corporate renewable in

iat

ive, RE100, and to help us meet

our own challenging targets.

Suppliers

•

Through our Supplier Charter, we encourage our suppliers to support and promote

standards in environmental protection and to manage and mit

igate env

ironmental

risks.

•

In 2022, we launched a global project to deﬁne strategies to address emiss

ions related

to Scope 3 Category 1, 2, 4 and 6. Our internal targets cover reducing our emiss

ions

related to Upstream transportation and distr

ibut

ion and Business travel by 28 per cent

against 2019 levels over the next seven years. Simultaneously, for Purchased goods and

services and Capital goods categories, we plan to engage our suppliers (covering circa

67 per cent of spend) to set science-based targets in the next ﬁve years.

Products and services

•

We have set targets to achieve $1 bill

ion of Susta

inable Finance income by 2025, to

mobil

ise $300 b

ill

ion of Susta

inable Finance by 2030, and to launch and grow green

mortgages in key markets across our footprint.

•

In 2022, we made progress against these targets, reporting $0.5 bill

ion Susta

inable

Finance income, mobil

ing $23.4 bill

ion through our Susta

inable Finance activ

ies, and

launching green mortgages in three new markets.

Investment in research and development

•

Our four-year partnership with Imperial College London covers long-term research on

Climate Risk, advisory on shorter-term, internally focused projects to enhance Climate

Risk capabil

ies and train

ing of our colleagues, Management Team and Board.

Reducing emiss

ions

in our operations –

page 74

Our suppliers –

reducing Scope 3

upstream emiss

ions –

page 75

Catalysing ﬁnance and

partnerships for

transit

ion – page 84

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Recommendation

Response

Disclosure location

Incorporating climate-

related inputs into the

ﬁnancial plann

ing process

•

In 2022, Climate Risk was considered as part of our formal annual corporate strategy

and ﬁnancial plann

ing process. In addit

ion, we developed management scenar

ios with

an aim to strengthen business strategy and ﬁnanc

ial plann

ing to support the Group’s

net zero journey.

•

In addit

ion to th

is, from a capital perspective, Climate Risk considerat

ions have been

part of our Internal Capital Adequacy Assessment Process (ICAAP) submiss

ions.

Qualitat

ive rev

iew of

climate risks and

opportunit

ies

ﬁnancial plann

ing –

page 95

Processes for

managing Climate Risk

– page 113

Note 1 sign

iﬁcant

judgement and

estimates – page 348

c) Describe the resil

ience of the organ

isat

ion’s strategy, tak

ing into considerat

ion d

ifferent climate-related scenarios,

includ

ing a 2°C or lower scenar

Approach to scenario

analysis

•

Over recent years, we have progressively strengthened our scenario analysis

capabil

ies and developed our infrastructure and capabil

ies to incorporate Climate

Risk into data, modelling, and analysis.

•

Our work to date, using current assumptions and proxies, ind

icates that our bus

iness is

resil

ient to all Network of Central Banks and Superv

isors for Greening the Financ

ial

System (NGFS) and International Energy Agency (IEA) scenarios that were explored.

•

In 2021, we recognised Sustainab

ity as a core component of our strategy, elevating it to

a pillar of our Group Strategy. In July 2022, we formalised this further and appointed our

inaugural Chief Sustainab

ity Ofﬁcer (CSO), to help drive our sustainab

ity agenda and

bring together our exist

ing Susta

inable Finance, Sustainab

ity Strategy, and Net Zero

Programme Management, teams.

Creating our inaugural

Chief Sustainab

ity

Ofﬁce – page 65

Scenario analysis –

page 90

Scenarios used

•

In 2022 we engaged a third-party vendor to begin development of bespoke internal

modelling capabil

ies to provide greater transparency.

•

In 2022, we assessed the impact on our CCIB corporate client portfolio based on three

IEA scenarios and three Phase 2 scenarios from the NGFS.

•

We also assessed the impact of sea-level rises under various Intergovernmental Panel

on Climate Change (IPCC) Representative Concentration Pathways (RCP) scenarios to

explore the Physical Risk impact on the CPBB resident

ial mortgage portfol

io over short-

and long-term time horizons for internal risk management purposes.

Scenario analysis –

page 90

Impact of climate-related

risks and opportunit

ies on

business strategy

•

We are working to reduce our exposure to high carbon emitt

ing act

ies and are

supporting clients in these industr

ies to trans

ion to lower carbon technolog

ies.

•

Our sustainable ﬁnance prior

ies, includ

ing new emerg

ing products such as sustainable

deposits, carbon trading and ESG Advisory, and dedicated transit

ion frameworks, are a

robust response to transit

ion r

isks in the short term, strengthening our resil

ience

towards a 2°C or lower transit

ion scenar

io.

Qualitat

ive rev

iew of

climate risks and

opportunit

ies

in annual

business strategy and

ﬁnancial plann

ing –

page 95

Catalysing ﬁnance and

partnerships for

transit

ion – page 84

Risk Management

a) Describe the organisat

ion’s processes for

ident

ify

ing and assessing climate-related risks

Processes for ident

ify

ing

and assessing risk

•

To support the management and monitor

ing of Phys

ical and Transit

ion r

isks, we

continue to conduct case level reviews for enhanced due dil

igence on h

igh ‘Climate

Credit’ and ‘Climate and Reputational and Sustainab

ity Risk’ for our corporate clients.

•

The toolkits are used to ident

ify and assess:

–

Physical Risk: current-day and longer-term time horizons (2050, 2100) representative

concentration pathway (RCP) scenarios 2.6, 4.5 and 8.5, for acute weather events

(e.g. storms, ﬂoods or earthquakes) and chronic sea-level rise.

–

Transit

ion R

isk: translates Orderly, Disorderly and ‘Hot-House’ world transit

ion

scenario variables from NGFS and Net Zero Emiss

ions by 2050, and Susta

inable

Development and Announced Pledges scenario variables from IEA to ﬁnanc

ial

impact at a client level. Further informat

ion on cl

ient level assessments can be found

on page 102 and the lim

itat

ions of our methodology on page 94.

–

Temperature alignment: provides a temperature score to ind

icate cl

ient- and

portfolio-level global warming potential up to 2030.

–

We deﬁne Climate Risk as the potential for ﬁnanc

ial loss and non-ﬁnancial

detriments aris

ing from cl

imate change and society’s response to it. With

in th

is, we

assess and deﬁne sub-risk types in the form of a climate risk taxonomy which

includes:

–

Physical Risk: Risk aris

ing from

increas

ing sever

ity and frequency of climate and

weather-related events.

–

Transit

ion R

isk: Risks aris

ing from the adjustment towards a carbon-neutral economy,

which will require sign

iﬁcant structural changes to the economy.

Overview of our

Climate Risk toolkit and

applicat

ion – page 98

Climate Risk Taxonomy

table – page 96

TCFD summary and alignment index

continued

Standard Chartered

– Annual Report 2022

Strategic report

Recommendation

Response

Disclosure location

Exist

ing and emerg

ing

regulatory requirements

related to climate change

•

We have established a process for tracking various Climate Risk-related regulatory

developments and obligat

ions set by both ﬁnancial and non-ﬁnancial serv

ice

regulators at Group and regional/country level, with roles and responsib

ies set out

the Climate Risk Policy.

•

Regulatory requirements or enhancements needed are recorded through workplans

across various teams. The workplans are coordinated and monitored through various

working groups by having the relevant accountable executives partic

ipate

in the

relevant forums.

Processes for

managing Climate Risk

– page 113

Characteris

ing cl

imate-

related risks in the context

of tradit

ional bank

ing

industry risk categories

•

We have ident

iﬁed seven Pr

inc

iple R

isk Types (PRT) that are most materially impacted

by potential climate risks and describe transmiss

ion channels for Cl

imate Risk

manifest

ing as ﬁnancial and non-ﬁnancial r

isk.

Exist

ing r

isk

classif

icat

ion and

climate-risk

transmiss

ion channels

– page 97

Overview of our

Climate Risk toolkit and

applicat

ion – page 99

b) Describe the organisat

ion’s processes for manag

ing climate-related risks

Processes for managing

and mit

igat

ing risks

•

We manage Climate Risk according to the characterist

ics of these PRTs and are

embedding climate-risk considerat

ions

into the relevant frameworks and processes as

well as setting risk appetites for each.

•

Our Climate Risk Appetite Statement (RAS) is approved annually by the Board and is

supported by Board and Management Team level risk appetite metrics across Credit

– CCIB and CPBB, Reputational and Sustainab

ity Risk (RSR), Traded Risk and Country

Risk.

•

We regularly review the scope and coverage of our risk appetite metrics for enhanced

risk ident

iﬁcation and management. Add

ional metr

ics to address our public targets

across key sectors and a stress loss metric built on scenario outcomes have been

ident

iﬁed and are be

ing monitored for inclus

ion

in risk appetite reporting in 2023.

•

We have toolkits to quantitat

ively measure cl

imate-related Physical and Transit

ion

Risks to determine if they should be prior

ised for risk management purposes.

Mit

igat

ing

environmental and

social risk – page 88

Sustainable Finance

mobil

ised – page 84

c) Describe how processes for ident

ify

ing, assessing and managing climate-related risks are integrated into the organisat

ion’s overall r

isk

management

Integration into Enterprise

Risk Management

Framework

•

Climate Risk is recognised in the Group Enterprise Risk Management Framework

(ERMF) as an integrated risk type, i.e. it manifests through exist

ing r

isk types and is

managed in line with the impacted risk type frameworks. We manage Climate Risk

according to the characterist

ics of these PRTs and are embedd

ing climate-risk

considerat

ions

into the relevant frameworks and processes for each. In 2022, we have

continued to build Climate Risk into exist

ing r

isk-management processes, focusing on

ident

ify

ing, assessing, and monitor

ing across r

isk types.

Integrating climate-

related risks into overall

risk management –

page 100

Metrics and Targets

a) Disclose the metrics used by the organisat

ion to assess cl

imate-related risk and opportunit

ies

in line with its strategy and risk

management processes

Key metrics used to

measure and manage

climate-related risks and

opportunit

ies as well as

metrics used to assess the

impact of (transit

ion and

physical) climate-related

risks on their lending and

other ﬁnancial

intermed

iary bus

iness

activ

ies

We disclose the following metrics in order to measure and manage climate-related risks

and opportunit

ies:

GHG emiss

ions:

•

Absolute Scope 1, Scope 2, and Scope 3; ﬁnanced emiss

ions

intens

ity

Climate-related transit

ion r

isks:

•

Temperature Alignment score

•

Client-level Climate Risk assessment scores by region

•

Projected potential average minor notch credit grade downgrade by 2050

•

Exposure to high-emitt

ing sectors

•

Increase in Counterparty Credit Risk (CCR) stress exposures from physical climate event

Climate-related physical risks:

•

Location-based hazard and risk scores

•

Outstanding exposure at very high gross Physical Risk %

•

Outstanding exposure subject to very high gross Flood Risk

•

Market Risk stress loss from physical climate event

Climate-related opportunit

ies:

•

Green and social assets

•

Sustainable ﬁnance income

Capital deployment:

•

$300 bill

ion mob

isat

ion progress

Reducing our emiss

ions

– page 74

Overview of our

Climate Risk toolkit and

applicat

ion – page 99

Exposure to high-

carbon sectors – page

Sustainable Finance

mobil

ised – page 84

Green and Social

Assets – page 86

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Recommendation

Response

Disclosure location

Climate-related incent

ive

structures

•

Selected sustainab

ity targets, includ

ing those w

ith a climate change dimens

ion, are

incorporated into our annual Group Scorecard which informs variable remuneration for

all colleagues under our Target Total Variable Compensation plan, includ

ing execut

ive

directors and Group Management Team. Sustainab

ity has also been included in the

2022–2024 Long-Term Incentive Plan performance measures.

Annual percentage

change in

remuneration of

directors and

employees – page 210

Incentive Structure –

page 119

b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas emiss

ions and the related r

isks

Our own operations

•

Despite only a 5 per cent reduction in our measured real estate, we reduced our Scope 1

and 2 emiss

ions by more than 42 per cent to 49,434 tonnes dur

ing 2022. This has been

possible through a consumption reduction of 3 per cent to 177.3 GWh through

energy-efﬁcient

investment, plus a 12 per cent increase in renewable energy across the

portfolio.

Reducing our emiss

ions

– page 74

In our supply chain

•

In partnership with an independent climate consultancy, we continued improv

ing the

accuracy of our methodology and estimated our supplier emiss

ions.

•

The process for Scope 3 upstream vendor emiss

ions measurement

is being embedded

into our wider annual reporting process and is expected to be executed in the ﬁrst

quarter of each year based on the previous year’s vendor spend.

Reducing our emiss

ions

– page 74

Measuring our ﬁnanced

emiss

ions

•

Analysing our exposure to high-carbon sectors (i.e. sectors that are responsible for the

majority of the GHG em

iss

ions

in the atmosphere) is the starting point of our ﬁnanced

emiss

ion calculat

ions.

•

We built on our progress in 2021 where we baselined our emiss

ions for ﬁve of our

high-emitt

ing sectors namely O

il and gas, Power, Coal min

ing, Steel and other Metals

and min

ing to

include three addit

ional transport sectors

in 2022 being Automotive

manufacturers, Aviat

ion and Sh

ipp

ing.

Supporting our

Corporate, Commercial

and Institut

ional

Banking (CCIB) clients

with the transit

ion –

page 77

c) Describe the targets used by the organisat

ion to manage cl

imate-related risks and opportunit

ies and performance aga

inst targets

Details of targets set and

whether they are absolute

or intens

ity based

•

The targets we have set for climate-related risks are primar

ily our net zero, across

Scopes 1, 2 and specif

ically 3 ﬁnanced em

iss

ions, start

ing in 2030, with thermal coal

targets in the shorter term from 2024. Our progress is set out in the Financed emiss

ion

section.

•

On climate-related opportunit

ies, we have a $1 b

ill

ion of Susta

inable Finance income

and $300 bill

ion mob

isat

ion of Sustainable Finance targets to 2025 and 2030

respectively.

•

During the year, we revised the measurement of our Oil and gas sector emiss

ions from

an income-based carbon intens

ity to absolute ﬁnanced em

iss

ions to better reﬂect the

sector emiss

ion proﬁle, effect

ively creating a carbon budget for the sector which is

intended to decrease over time.

•

In 2022, we continued to expand the coverage of our ﬁnanced emiss

ions calculat

ions

and this report announces three further sectoral targets covering transportation. By

2030, we aim to reduce emiss

ions

in the transportation sector:

–

34% in aviat

ion (product

ion intens

ity)

–

Reduce our alignment delta in shipp

ing from +2.6% to 0%

–

49% in automotive manufacturers (production intens

ity).

Measurement and

progress of our

ﬁnanced emiss

ions –

page 79

A descript

ion of the

methodologies used to

calculate targets and

measures.

•

The methodologies used to calculate baseline emiss

ions are set out

in the Our Clients

– reducing our ﬁnanced emiss

ions sect

ion.

Measurement and

progress of our

ﬁnanced emiss

ions –

page 79

Other key performance

ind

icators used

•

In 2021, we set our Sustainab

ity Aspirat

ions to

include an inter

im target to a

im to reach

net zero in our operations by 2030 and in our ﬁnanced emiss

ions by 2050. In 2022, we

updated our target for reaching net zero in our operations by 2030 and brought it

forward to 2025.

Sustainab

ity

Aspirat

ions – page 493

TCFD summary and alignment index

continued

Standard Chartered

– Annual Report 2022

Strategic report

Our net zero timel

ine

To help us remain on track, we have set short- to medium-term quantif

iable targets to manage our

progress and disclose our data on an annual basis. Details of our targets in this area, as well as progress

towards these, are set out throughout this section of the report.

In our strategic business planning, we consider ‘short-term’ to be less than two years, ‘medium-term’ to be

two to ﬁve years and ‘long-term’ to be beyond this. For climate scenario analysis we can run 30-year

scenarios for both Physical and Transit

ion R

isk. Some elements of our Physical Risk scenario analysis can

also extend to 2100 (see page 92).

2021

Launched our pathway to net zero

by 2050, includ

ing

inter

im targets and a

supporting methodology

Announced plans to mobil

ise $300 b

ill

ion

Sustainable Finance

Published a Transit

ion F

inance Framework

2022

•

Developed 2030 emiss

ions basel

ine and targets

for Aviat

ion, Sh

ipp

ing and Automot

ive

Manufacturers

•

Joined Partnership for Carbon Accounting

Financ

ials (PCAF)

•

Developed capabil

ies for and commenced

quarterly external reporting against key

sustainab

ity measures

2023

Develop 2030 emiss

ions basel

ine and targets for

Cement, Mortgages, Commercial Real Estate

(CRE) and Alumin

ium, planned to be

communicated in our 2023 TCFD report in

Q1 2024

Announce timeframe for enhanced Oil & Gas

absolute emiss

ions target by our 2023 AGM

Expand our coverage to facil

itated em

iss

ions,

aim

ing to adopt the PCAF standards (expected

to be published in H1 2023)

2024

•

Develop 2030 emiss

ions basel

ine and targets for

Agriculture, planned to be communicated in our

2024 TCFD report in Q1 2025

2025

•

Aim to double our share of sustainable invest

ing

assets under management and integrate ESG

considerat

ions

into our advisory activ

ies in our

wealth management business

•

Aim to be net zero in our own operations

(brought forward from 2030)

203

Aim to only provide ﬁnanc

ial serv

ices to clients

who are less than 5% dependant on revenue

from thermal coal

Aim to meet ﬁnanced-emiss

ions targets

in our

most carbon-intens

ive sectors

2032

•

Targeted end date for legacy direct coal

ﬁnancing globally

205

Aim to become net zero in our ﬁnanced emiss

ions

•

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Since 2018 we have been working on align

ing

our operational and ﬁnanced emiss

ions to the

Paris Agreement's goal of well below two degrees

Celsius of global warming by the end of the

century.

We focus on three areas with

in our strategy

to reduce direct and ﬁnanced greenhouse gas

(GHG) emiss

ions: our operat

ions, those

associated with our supply chain (ind

irect

impacts in value chain) and our ﬁnanced

emiss

ions assoc

iated with our clients.

Our operations –

reducing our environmental footprint

We are mindful of the direct environmental impact of our

branches and ofﬁces and are determined to reduce their

impact.

We have measured and reduced our GHG emiss

ions s

ince

2008, and since 2018 we have been actively targeting a

reduction in our Scope 1 and 2 emiss

ions

in line with a well-

below two degrees celsius scenario. In 2021, we enhanced

this ambit

ion, sett

ing out targets to achieve net zero in our

operations by 2025.

Our approach is simple. We intend to optim

ise our ofﬁce

and branch network, retir

ing unused and

ineffect

ive space

to retain a working environment in line with modern

requirements for home- and hybrid-working solutions.

In partnership with our long-term strategic real estate

suppliers such as CBRE and JLL, we are working to maxim

ise

efﬁciency wh

ile leveraging clean and renewable power

where appropriate, in line with our commitment to the global

corporate renewable energy in

iat

ive, RE100, and to help us

meet our own challenging targets.

Despite only a 5 per cent reduction in our measured real

estate, we reduced our Scope 1 and 2 emiss

ions by more than

42 per cent to 49,434 tonnes during 2022. This has been

possible through a consumption reduction of 3 per cent to

177.3 GWh through energy-efﬁcient

investment, plus a 12 per

cent increase in renewable energy (being through direct

power purchase agreements, green util

ies and renewable

energy certif

icates) and across the portfol

io.

While new ways of working have led to a direct reduction in

our property requirements and associated emiss

ions, we

recognise that these emiss

ions have s

imply been shifted.

Throughout 2022, we have begun measuring addit

ional

categories of Scope 3 emiss

ions

includ

ing waste, employee

commuting and downstream leased assets. See page 75.

Read the princ

iples and methodology for measur

ing our

environment data at

sc.com/environmentcriter

For further details on our environmental performance see page 489

and our ESG data pack at

sc.com/esgdatapack

Read the independent environmental assurance at

sc.com/environmentalassurance

We are also committed to reducing waste. In 2022, we

reduced our overall waste by 37 per cent, and our waste per

employee by 39 per cent to 19.2kg, achiev

ing our target to

reduce waste to 40kg per employee per year three years

ahead of schedule. This was primar

ily due to new ways of

working reducing employee presence in our build

ings.



Improving our

ofﬁce efﬁciency



We have created a rolling asset replacement strategy

for light

ing

in our ofﬁces. We now aim to only install LED

and circad

ian l

ight

ing, and any new ﬁt-out or project,

small churn-related changes or upgrades always include

improved light

ing.

Reducing our emiss

ions

Standard Chartered measures greenhouse gas emiss

ions us

ing the

Greenhouse Gas Protocol

Source: The Group’s aviat

ion portfol

io which it leases to airl

ines has been

added in our Supply Chain Scope 3 (Cat. 13 as per the GHG protocol)

For more informat

ion on

our own operations refer

page 75

For more details on our

own ﬁnanced emiss

ions

refer to

page 76

Shipp

ing

Steel

Other Metals

and Min

ing

Coal

Min

ing

Automotive

Manufacturers

Commercial

Real Estate

Power

Alumin

ium

Resident

ial

Mortgages

Business travel

Employee travel

Electric

ity

Cooling

Heating

Purchased goods

and services

Waste management

Emiss

ions

Scope 1&2:

SCB’s own emiss

ions

0.08% (0.05 MtCO

Scope 3:

Indirect impacts in

value chain

Cat 1 to 14

3.65% (2.22 MtCO

Scope 3:

CCIB Corporates

Financed Emiss

ions

96.26% (58.50 MtCO

60.8

Aviat

ion

Cement

Oil & Gas

Agriculture

Other

Standard Chartered

– Annual Report 2022

Strategic report

Water availab

ity is a growing challenge in many of our

markets. Although we did not face any issues sourcing

potable water in 2022, we continue to take a responsible

approach to managing water across the Group.

We continue to work towards our target to recycle 90 per cent

of our waste by 2025. We have commenced the True Zero

Waste programme across our top 20 build

ings by s

ize and

expect to see the ﬁrst results next year.

During 2023, we will continue to accelerate our True Zero

Waste certif

icat

ion programme across more ofﬁces. This

certif

ies 90 per cent of waste d

iverted from landﬁll or

inc

inerat

ion and will require further investment and education

in waste management and avoidance. Addit

ionally, we w

ill

certify more single-use-plastic free build

ings and promote

more sustainable practices.

Our suppliers –

reducing Scope 3 upstream

With approximately 11,700 suppliers, we recognise our

contribut

ion to cl

imate impacts through the goods and

services we procure and understand that severe weather

events could result in material disrupt

ions to our supply cha

that may potentially impact our abil

ity to serve our cl

ients.

From 1 April 2022 all new and renewing material third-party

corporate services arrangements in-scope for Business

Continu

ity Management controls are subject to cl

imate risk

assessment as part of third-party continu

ity plans.

Through our Supplier Charter, we encourage our suppliers to

support and promote standards in environmental protection

and to manage and mit

igate env

ironmental risks.

In 2022, we continued to make progress against our supply

chain sustainab

ity agenda. We saw an approximately

58 per cent decrease in our ﬂight emiss

ions

in the period

from October 2021 to September 2022, against our target to

achieve and mainta

in ﬂ

ight emiss

ions at 28 per cent lower

than our October 2018 to September 2019 baseline, and

continued to offset these.

In partnership with an independent climate consultancy, we

continued improv

ing the accuracy of our methodology and

estimated our supplier emiss

ions. Due to a l

ited number

of suppliers able to report emiss

ion ﬁgures to the Group, our

methodology relies primar

ily on em

iss

ion factors comb

ined

with an increas

ing volume of data reported by suppl

iers via

the CDP climate change survey and emiss

ion ﬁgures reported

by suppliers to the Group. We expect that both supplier

emiss

ion calculat

ions and our methodology will continue

to evolve over time. Using these ins

ights, we

ident

iﬁed

and engaged our key highest-emitt

ing suppl

iers to better

understand and align on sustainab

ity actions, metrics

and goals.

The process for Scope 3 upstream supplier emiss

ions

measurement has been developed and embedded into our

wider annual reporting process, with emiss

ions prov

ided for

Purchased goods and services, Capital Goods, Upstream

transport and Other Business Travel. These emiss

ions are

based on the previous year's actual spend, hence a one year

time lag: 2022 emiss

ions relate to 2021 expend

iture.

Furthermore, we launched a global project to deﬁne

strategies to address emiss

ions related to Scope 3 Categor

ies

1 (Purchased goods and services), 2 (Capital goods), 4

(Upstream transportation and distr

ibut

ion) and 6 (Business

travel). Our targets cover reducing our emiss

ions related to

Upstream transportation and distr

ibut

ion and Business travel

by 28 per cent against 2019 levels by 2023. Simultaneously, for

Purchased goods and services and Capital goods categories,

we plan to engage our suppliers (covering circa 67 per cent of

spend) to set science-based targets in the next ﬁve years.

In 2022, to build internal understanding of our supply chain

sustainab

ity aspirat

ions and dr

ive united engagement for

our net zero goals, we delivered train

ing and awareness

sessions which were attended by approximately 450

partic

ipants from across the organ

isat

ion.

Scope of emiss

ions

2022 (tCO

2021 (tCO

2020 (tCO

Scope 1

direct

emiss

ions

(combustion of fuel)

2,071

2,902

3,988

Scope 2

energy

ind

irect em

iss

ions

(purchase of

electric

ity)

47,363

82,761

113,870

Total Scope 1 and 2

49,434

85,662

117,858

Scope 3

other ind

irect

emiss

ions

Purchased goods

and services (other)

380,732

330,244

–

Purchased goods

and services (global

data centres)

706

43,132

29,562

Capital goods

34,496

47,217

–

Upstream

transportation and

distr

ibut

ion

20,300

20,949

–

Waste generated

in operations

498

–

Business travel

(air travel)

39,107

3,654

33,930

Business travel

(miscellaneous

other than ﬂights)

2,654

4,994

–

Employee

commuting

61,917

–

Downstream leased

assets (corporate

real estate)

8,594

–

Downstream leased

assets (leased

aircraft)

1,671,867

–

Investments

2, 5

58,500,000

45,200,000

–

Total Scope 3

emiss

ions

60,720,871

45,650,190

63,492

Total emiss

ions

60,770,305

45,735,852

181,350

We use an independent third-party assurance provider to verify our

greenhouse gas (GHG) emiss

ions. In 2022, our measured Scope 1 and Scope 2

emiss

ions, as well as waste and water consumpt

ion, were assured by Global

Documentation Ltd, ensuring the accuracy and credib

ity of our reporting.

The reporting period for carbon emiss

ions

is 1 October to 30 September.

This only differs for category 1: Purchased Goods, category 2: Capital

Goods, category 4: Upstream Transportation and Distr

ibut

ion, Category 6:

Miscellaneous travel and category 15: Investments where the period 1 Jan

to 31 December on a one year lag is used.

The decrease in emiss

ions from data centres was due to the offset of REC's

(Renewable Energy Certif

icate) aga

inst the total energy consumption. REC's

are a type of Energy Attribute Certif

icate that represents the env

ironmental

attributes of the generation of a one-megawatt hour (MWh) of energy

produced by renewable sources ie the proportion of power sourced from

a national grid that is produced using renewable energy sources.

Emiss

ions for Category 5: Waste generated

in operations, Category 7:

Employee Commuting and Category 13: Downstream Leased Assets was

measured and reported for the ﬁrst time in 2022.

These are ﬁnanced emiss

ions of our CCIB lend

ing portfolio.

For further details on our Scope 3 vendor emiss

ions see

our ESG data pack at

sc.com/esgdatapack

Read our Supplier Charter at

sc.com/suppliercharter

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Our clients –

reducing our ﬁnanced emiss

ions

We aim to support our clients in their own transit

ions to net

zero and see our role in supporting this alignment to the Paris

Agreement's goal as a crit

ical part of our cl

imate response

plans. We aim to become net zero in our ﬁnanced emiss

ions

by 2050, with inter

im 2030 targets for our h

ighest-emitt

ing

sectors.

In 2022, we made progress towards this goal, and set out

to measure, manage and reduce operational and ﬁnanced

emiss

ions v

ia the implementat

ion of our net zero pathway. In

2021, we announced that we expect all clients (beginn

ing w

ith

those in high-carbon sectors) to have a strategy to transit

ion

to a low-carbon business model. Since then, we have focused

on assessing clients in sectors where we have set 2030 net

zero targets (Oil and gas, Metals and min

ing and Power). We

have also developed an in

ial methodology for assessing the

credib

ity of client transit

ion plans. We expect th

is area to

evolve, and will look to adapt our methodology accordingly.

Our methodology draws on informat

ion gathered from our

client Climate Risk Assessments (see page 88) and considers

the guidance on Credible Transit

ion Plans by the Glasgow

Financ

ial All

iance for Net Zero (GFANZ) and the UK’s

Transit

ion Plan Taskforce. In 2022, we tracked the ex

istence

of a transit

ion plan for our corporate cl

ients, and by the end

of 2023 intend to have a view of credib

ity of those transit

ion

plans for our largest exposures. We acknowledge that

targeting net zero will not be a linear pathway, especially for

a bank which operates primar

ily

in the emerging markets and

recognises its role in helping to support a just transit

ion. As

such, in the shorter term, our ﬁnanced emiss

ions may

increase

as we focus on funding our clients' transit

ion journeys toward

reaching net zero emiss

ions.



Standard Chartered

joins PCAF



During 2022 the Group jo

ined the Partnersh

ip for Carbon

Accounting Financ

ials (PCAF). Jo

ing PCAF w

ill help us

to take a consistent approach to assessing and reporting

emiss

ions for

its ﬁnanced and facil

itated transact

ions.

PCAF is a global partnership of ﬁnanc

ial

inst

itut

ions

to develop and implement a harmonised approach

for assessing and disclos

ing the greenhouse gas

(GHG) emiss

ions of the

ir loans and investments and

is becoming the market standard approach.

PCAF has developed GHG accounting methodologies

that can be applied by ﬁnanc

ial

inst

itut

ions who

have exposure to listed equity and corporate bonds,

business loans and unlisted equity, project ﬁnance,

mortgages, commercial real estate and motor

vehicle loans. PCAF currently represents ﬁnanc

ial

inst

itut

ions with total ﬁnanc

ial assets

in lending

and investments in excess of $40 trill

ion dollars.

Calculating ﬁnanced emiss

ions

PCAF deﬁne ﬁnanced emiss

ions as the GHG em

iss

ions

from loans and investments provided by ﬁnanc

ial

inst

itut

ions to their clients i.e. the proportion of our clients'

emiss

ions we ﬁnance. To calculate our basel

ine

projections, we measure three types of ﬁnanced

emiss

ions us

ing three methodologies:

•

Revenue-based carbon intens

ity:

a measurement of

the quantity of GHG emitted by our clients per USD of

their revenue.

•

Absolute ﬁnanced emiss

ions:

a measurement of our

attributed share of clients’ GHG emiss

ions.

•

Production-based intens

ity:

a measurement of the

quantity of GHG emitted by our clients per USD of their

production capacity.

Our methodology is based on global standards, includ

ing

those set by the Science Based Target in

iat

ive (SBT

i), the

Net Zero Banking Alliance (NZBA) and PCAF.

Absolute

ﬁnanced

emiss

ions

Client exposure

Client EVIC

Client

emiss

ions

(

)

Revenue

based

intens

ity

Client exposure

Client EVIC

Client exposure

Client EVIC

Client

emiss

ions

Client

revenues

(

)

Production-

based

intens

ity

Client exposure

Client EVIC

Client per unit of production

Client

emiss

ions

(

)

EVIC stands for economic value includ

ing cash and

the sum of the client's debt plus equity. If the client is

listed, that equity is the client's market capital

isat

ion.

The numerical value of the clients EVIC will impact

the measurement of all three ﬁnanced emiss

ion

methodologies. If, for example, the market capital

isat

ion

of a listed client increases (through the client's share price

increas

ing), the ﬁnanced em

iss

ions w

ill decrease on an

absolute ﬁnanced emiss

ion, revenue based

intens

ity and

production based intens

ity bas

is.

Further, for revenue based intens

ity, when cl

ient revenues

increase (for example, commodity based clients

experienc

ing h

igher commodity prices) the revenue

based emiss

ions

intens

ity w

ill decrease.

It is noted that there is a one-year lag on data used for

ﬁnanced emiss

ions. Th

is is a result of the time taken for

our clients to report their ﬁnanc

ial and carbon em

iss

ion

informat

ion. Therefore, the Group's basel

ine as released

in 2021 util

ised the 2020 year-end balance sheet date for

client exposures, ﬁnanc

ial and carbon

informat

ion, and

the 2022 updated ﬁnanced emiss

ions ut

ises the 2021

year-end balances. We still refer to these as the 2022 and

2021 updates.

Standard Chartered

– Annual Report 2022

Strategic report

Supporting our Corporate, Commercial

and Institut

ional Bank

ing (CCIB) clients with the transit

ion

In our net zero whitepaper, released in 2021, we provided

details of our ﬁnanced emiss

ions for the 2021 year, us

ing the

2020 balance sheet. Our ﬁrst baseline emiss

ions measured

45.2 MtCO

e (covering 77 per cent of the CCIB exposure

portfolio for which the Group could source ﬁnanc

ial

informat

ion), and set out our approach to ach

ieve emiss

ions

reduction by 2030 in our most carbon-intens

ive sectors of:

•

63 per cent in Power (Scopes 1 and 2 intens

ity)

•

33 per cent in Steel (Scopes 1 and 2 intens

ity)

•

33 per cent in Other metals and min

ing (ex. Coal M

ing)

(Scopes 1 and 2 intens

ity)

•

30 per cent in Oil and Gas (Scopes 1, 2 and 3 intens

ity)

•

85 per cent in Coal Min

ing (Scopes 1, 2 and 3 absolute)

Percentage of ﬁnanced emiss

ions covered

Included in analysis

2021

2022

2023

2024 and later

Coal

Min

ing

Steel

Automotive

Manufacturers

Power

Other Metals

and Min

ing

Oil & Gas

Commercial

Real Estate

Remain

ing

Sectors

Agriculture

Resident

ial

Mortgages (CPBB)

Alumin

ium

Shipp

ing

Aviat

ion

Cement

of ﬁnanced

emiss

ions

covered

Exposure

The following section sets out our progress made against

these targets during 2022, and builds on this foundation with

the announcement of three further sectoral baselines and

targets being Automobile Manufacturers, Aviat

ion, and

Shipp

ing. W

ith the addit

ion of these further three sectors, we

have set targets for eight sectors in total. The emiss

ions of the

CCIB lending book across all counterparties in all sectors is

estimated to be 58.5MtCO

e. These total emiss

ions are where

the Group is able to obtain client ﬁnanc

ial

informat

ion, be

ing

the clients' EVIC. In 2022, the Group was able to source client

data for 87 per cent of the CCIB lending portfolio to calculate

the 58.5MtCO

e. Of these emiss

ions, 61 per cent

is due to the

emiss

ions of the counterpart

ies in the eight high-carbon

sectors for which the Group has set targets. These eight

sectors represent 14.4 per cent of the CCIB lending book as of

30 September 2022.

In 2023, we plan to add a further four sectors into our

analysis, and beyond that to incrementally improve the

portfolio coverage as market data on emiss

ions becomes

more widely available. Analysing our exposure to high-carbon

sectors (i.e. sectors that are responsible for the major

ity of the

GHG emiss

ions

in the atmosphere) is the starting point of our

ﬁnanced emiss

ion calculat

ions. In order to ident

ify wh

ich of

our lending is to high-carbon sectors, we use the Task Force on

Climate-related Financ

ial D

isclosures (TCFD) sector

categorisat

ion, namely: energy; transportat

ion; materials and

build

ings; and agr

iculture, food and forest products. The most

material sub-sectors to the Group for which baselined targets

have been set are presented below.

Emiss

ions coverage

Completed

Not completed

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Loans and advances and undrawn balances to high-carbon sectors ²

Sector

Loans and advances

(drawn funding)

Undrawn commitments

and ﬁnancial guarantees

2022

2021

2022

2021

Automotive manufacturers

3,439

3,168

3,036

3,675

Aviat

ion

2,497

2,846

1,276

1,114

Coal min

ing

133

Steel

1,681

1,838

1,007

837

Other Metals and min

ing

2,847

2,021

3,237

3,729

Oil and gas

6,641

7,077

13,926

14,750

Power

4,918

4,916

3,843

5,594

Shipp

ing

5,456

5,596

1,510

1,491

Total balance

27,548

27,595

27,843

31,200

Maturity and expected credit losses of exposure to high-carbon sectors²

Sector

2022

Maturity buckets

2022

Loans and

advances

(drawn funding)

Less than

1 year

More than 1

to 5 years

More than

5 years

Expected

credit loss

Automotive manufacturers

3,439

2,855

534

–

Aviat

ion

2,497

120

916

1,461

Coal min

ing

Steel

1,681

1,456

216

Other Metals and min

ing

2,847

2,330

312

205

Oil and gas

6,641

2,506

2,203

1,931

276

Power

4,918

1,495

1,434

1,988

117

Shipp

ing

5,456

801

2,988

1,668

Total balance

27,548

11,567

8,635

7,344

603

This is as at 30 September 2022

The ISIC codes used by the Group above are as follows:

Automotive

manufacturers (Manufacture of motor vehicles and Motor Finance);

Aviat

ion

(Passenger air transport),

Coal

(Coal Min

ing),

Steel

(Iron and Steel basis

Industries and casting of iron and steel),

Other Metals and Min

ing

(Iron Ore Min

ing, Gold and Prec

ious Metals, Copper & Zinc, Stone quarrying clay and sand pits,

Min

ing & Quarry

ing NEC; Support activ

ies for other min

ing and quarry

ing, Casting of non-ferrous metals, Alumin

ium, Non-ferrous metal bas

is industr

ies, Metal

products services, Manufacture of fabricated metals);

Oil & Gas

(Extraction of Oil, Oil rig operators, Support activ

ies for petroleum and natural gas extraction,

Extraction of natural gas, Petroleum reﬁner

ies, Manufacture and repa

ir of min

ing, O

ilf

ield & gasﬁeld and related mach

inery and equipment);

Power

(Electric

ity

generation and distr

ibut

ion, Water Supply & distr

ibut

ion, Collection of non-hazardous waste);

Shipp

ing

(Sea and coastal freight water transport, Support services

to water transport/NEC, Sea and coastal passenger water transport, Gas Manufacture & distr

ibut

ion)

2021 balances are as at 31 December

We have extended our ﬁnanced emiss

ions analys

is and

disclosure on our exposure to high-carbon sectors.

Sectors are ident

iﬁed and grouped as per the Internat

ional

Standard Industrial Classif

icat

ion (ISIC) system and exposure

numbers have been updated to include all in-scope ISIC codes

used for target setting among the seven high-carbon sectors.

The maximum exposures shown in the table include Loans

and Advances to Customers at Amortised cost, Fair Value

through proﬁt or loss, and committed facil

ies available as per

IFRS 9 – Financ

ial Instruments

in $mill

ion. Green and other

sustainable ﬁnance loans which support the transit

ion to the

net zero economy are also included. The full exposure does

not provide an ind

icat

ion of how many clients have net zero

pathways in alignment with our own, and hence can be

banked through the transit

ion of the

ir businesses from a

higher-carbon present to a lower-carbon future. As reporting

efforts harmonise around green, sustainable and transit

ion

taxonomies, we will evolve our reporting accordingly.

High-carbon sectors as a % of total CCIB lending

14.

Shipp

ing

Steel

Other

Metals and

Min

ing

Oil & Gas

Power

Aviat

ion

Coal Min

ing

Automotive

Manufacturers

Standard Chartered

– Annual Report 2022

Strategic report

Measurement

Measurement and progress of our ﬁnanced emiss

ions: sectoral deep d

ives

Sector

Absolute Financed

Emiss

ions MtCO

Intensity Financed

Emiss

ions kgCO

Change YTD

22 vs YTD 21

2030

target

Target based on

2022

2021

2022

2021

Standard Chartered Group

58.5

45.2

Oil and gas

10.2

13.7

2.8

3.0

-8.3%

-30%

Revenue Emiss

ions Intens

ity

Power

6.3

7.7

2.1

3.7

-43.6%

-63%

Revenue Emiss

ions Intens

ity

Coal min

ing

2.3

3.3

-30.3%

-85%

Absolute Emiss

ions

Metals and min

ing

0.4

0.9

1.0

-7.4%

-33%

Revenue Emiss

ions Intens

ity

Steel

2.7

1.9

2.2

-12.0%

-33%

Revenue Emiss

ions Intens

ity

Transport

13.9

2.7

–

415%

Auto Manufacturers²

4.3

160g CO

e/Vkm

-49%

Production Emiss

ions

intens

ity⁵

Aviat

ion³

2.2

1,152g CO

e/ Rtk

-34%

Production Emiss

ions

intens

ity⁵

Shipp

ing⁴

7.4

+2.6% delta

Production Emiss

ions

intens

ity⁵

Other

22.7

14.7

2022 ﬁnanced emiss

ions are calculated based on 31 December 2021 data

Vkm means vehicle per km

Rtk means per revenue tonnes km

An alignment delta is an asset by asset plot against a set curve, either below

(being negative which means less CO

per asset than the curve) or above

(being posit

ive wh

ich means more CO

per asset than the curve). In this

instance the assets are ships and how they plot against the International

Marit

ime Organ

isat

ion curve

Sector specif

intens

ity be

ing CO

per distance traveled

'Other' includes manufacturing, wholesale and retailers, commercial real

estate, alumin

ium and cement sectors

The exposure to clients is from the Group’s systems, however, the abil

ity to

ﬁnd counterparty EVIC’s and carbon disclosed is evolving and currently relies

on third party inputs and ind

idual searches for ﬁnanc

ial

informat

ion. EVIC

informat

ion

is usually found via external aggregators, internal risk systems

and ind

idual ﬁnanc

ial

informat

ion searches. For em

iss

ions, th

is is done

through external aggregators and where not available; regression analysis

and proxy informat

ion

is used

2021 ﬁnanced emiss

ions are calculated based on 31 December 2020 data

Standard Chartered Group total

Our total ﬁnanced emiss

ions

in 2022 are 58.5 MtCO

e, up

from 45.2 MtCO

e in 2021. This represents an increase of

29 per cent. This increase is not unexpected and reﬂects a

combinat

ion of: sector deep d

ives, which capture full sector

value chain emiss

ions; methodolog

ical improvements based

on evolving industry best practice; and expanded coverage of

our emiss

ions footpr

int based on increas

ing data ava

ilab

ity.

These factors contribut

ing to the 2022 reported group

emiss

ions ﬁgure are therefore not a reﬂect

ion of an inherent

increase in our clients' underlying emiss

ions footpr

ints.

Over time, we will seek to capture and report on emiss

ions

reductions versus those attributed to methodology changes

and expanded coverage of sector emiss

ions.

• Expansion in scope

– prior to conducting our sector deep

dives as articulated in our net zero pathway, we took a

top-down corporate level approach in calculating the

baseline. In particular, for the transport sector, our corporate

level approach accounted for only Scope 1 and 2 emiss

ions

(e.g. solely the emiss

ions from the

ir direct manufacturing

and admin

istrat

ive activ

ies). Through the transport sector

deep dives we were able to do a full mapping of the sector

value chain from a bottom up perspective, which included

the underlying asset level emiss

ions. Therefore, em

iss

ions

have been counted for each underlying vehicle produced,

aircraft ﬂown and ship sailed, in addit

ion to the

manufacturing and admin

istrat

ive activ

ies. This

sign

iﬁcantly

increased our baseline emiss

ions

in 2022 from

2.7 to 13.9 MtCO

• Increased data coverage

– we continue to improve our

data coverage. In 2022, our client coverage of ﬁnanc

ial

(EVIC) informat

ion

increased YoY from 77 per cent to 87 per

cent. This increased data availab

ity also increased our

baseline emiss

ions.

• Financ

ial volat

ity

– offsetting the prior two factors,

increases in commodity prices increased proﬁtab

ity and

resulted in higher share prices in these sectors, both of which

increased EVICs, therefore decreasing absolute ﬁnanced

emiss

ions for the Group.

Further, for revenue emiss

ions

intens

ity (as appl

icable to

the Oil and gas, Power, Steel and Other metals and min

ing

sectors), this increased proﬁtab

ity decreased revenue-based

carbon intens

ity (as the rat

io of emiss

ions to revenue earned

decreased). In 2023, we will be moving to production-based

intens

ity metr

ics for these sectors which will reduce the impact

of market volatil

ity on our em

iss

ions proﬁle.

We acknowledge that our ambit

ion to ach

ieve net zero in our

ﬁnanced emiss

ions by 2050 w

ill not be a linear decreasing

pathway given the above factors.

Indiv

idual h

igh-carbon sectors

We measured progress against our emiss

ion targets

in three

forms:

absolute ﬁnanced emiss

ion

(Coal min

ing and a

baseline for Oil and gas),

revenue-based carbon intens

ity

(Oil

and gas, Power and Metals and min

ing), and

production-

based intens

ity

(Auto manufacturers, Aviat

ion and Sh

ipp

ing).

•

Oil and gas has shown movement in revenue-based

intens

ity as well as the absolute ﬁnanced em

iss

ion basel

ine.

There was a decrease in absolute emiss

ions, due to

increas

ing EVICs and a port

ion of the 2021 population (Gas-

related ships) moving to the Shipp

ing transport sector.

•

Coal min

ing exposure decreased to less than $100 m

ill

ion;

this is a run-down book with no new coal min

ing loans

made in the year.

•

Steel ﬁnanced emiss

ions rema

in widely ﬂat across 2021–

2022, decarbonisat

ion of steel w

ill be a long-term journey

with lim

ited short-term

impact.

•

Power on an economic intens

ity bas

is saw a sign

iﬁcant

decrease, primar

ily attr

ibuted to macroeconomic factors

of increased commodity prices passed onto customers

with resulting higher revenues. The Power portfolio does

however have approximately 25 per cent of its exposure to

renewable energy counterparties, which is also bring

ing th

intens

ity metr

ic down.

We continue to reﬁne our approach to measuring production

targets. In 2023, noting the shortcoming of economic intens

ity,

these sectors will be measured using production-based

intens

ity metr

ics (CO

per KWh or tonne of steel produced).

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Power Generation

The Power sector sits at the forefront of the energy

transit

ion, w

ith many industr

ies rely

ing on electrif

icat

ion to

achieve net zero by 2050. However, this will not be possible

without a sufﬁc

ient supply of low-carbon electr

ity. The

private sector is well-established as the leading source of

ﬁnance for power generation in most economies around

the world.

Oil and gas

The decarbonisat

ion of th

is sector is central to global

efforts to reach net zero, and is particularly relevant

with

in the markets

in which we operate as around half of

the sector’s global emiss

ions or

inate

in Asia, Africa and

the Middle East. Oil and gas represents the single biggest

contributor to our total absolute ﬁnanced emiss

ions,

representing 17 per cent of the total.

Oil and gas value chain in scope

Our portfolio

Balance

$bn

2022 ﬁnanced

emiss

ions

Target

Target type

6.3

10.2 MtCO

–30%

(2020–2030)

Revenue emiss

ion

intens

ity

Power Generation value chain in scope

Other

Oil & Gas

companies

Service

companies

Oil & Gas

Companies

Scope 1, 2 and 3

Scope 1, 2

Our portfolio

Balance

$bn

2022 carbon

intens

ity

Target

Target type

4.0

2.07 KgCO

–63%

(2020–2030)

Revenue emiss

ion

intens

ity

Other

util

ity

providers

Power

distr

ibutors

Generators

Coal

Gas

Renewables

Scope 1, 2

Progress

In our net zero whitepaper, we targeted an emiss

ions

reduction in the Oil and gas sector of 30 per cent (Scopes 1,

2 and 3 intens

ity) by 2030.

During 2022, we revised the measurement of our Oil

and gas sector emiss

ions from a revenue-based carbon

intens

ity to absolute ﬁnanced em

iss

ions. Th

is better reﬂects

the sector emiss

ion proﬁle and prov

ides alignment with

the emerging consensus of peer banks as to the best way

in which to measure and set targets for the sector. This

effectively creates a carbon budget which is intended

to decrease over time, which further helps meet the

expectations of our key stakeholders. Our new absolute

baseline is 10.2MtCO

e and we will disclose targets for this

baseline by the Group's 2023 Annual General Meeting.

In 2022, using the exist

ing

intens

ity target, we ach

ieved

an 8 per cent reduction year-on-year. This reduction was

primar

ily due to macroeconom

ic factors, includ

ing an

increase in clients’ underlying corporate value (EVIC)

due to increases in commodity prices linked to the war

in Ukraine and ris

ing energy pr

ices. This has resulted in a

proportionate reduction in our share of ﬁnanced emiss

ion

contribut

ions.

Calculation methodology/Science-based scenario selected

For the Oil and gas sector, our calculations are based on

the International Energy Agency (IEA) Net Zero Emiss

ion

by 2050 (NZE) and the Current Polic

ies Scenar

io (CPS).

In the NZE scenario, the share of fossil fuels in global energy

falls from around 80 per cent in 2020 to 20 per cent in 2050,

and the residual usage of fossil fuels by 2050 is primar

ily

related to goods where carbon is embedded (e.g. plastics),

or production facil

ies ﬁtted with CCUS (Carbon capture,

util

isat

ion and storage). Any remain

ing usage of foss

fuels is lim

ited to sectors where low-em

iss

ions technology

options are scarce. Scope 2 emiss

ions are projected us

ing the

power generation emiss

ions pathway. Scope 3 downstream

emiss

ions make up around 90 per cent of total em

iss

ions

the Oil and gas sector and have been calculated assuming

that all fuel is burnt and there is no impact from CCUS.

Changes in baseline method

For 2022, we have updated the Oil and gas sector emiss

ion

measurement from revenue-based carbon intens

ity to absolute

ﬁnanced emiss

ion to better reﬂect sector em

iss

ion proﬁle.

Progress

We have set ourselves the target to reduce emiss

ions

the Power Generation sector by 63 per cent (Scopes 1 and

2 intens

ity) by 2030. In 2022, we ach

ieved a 44 per cent

reduction, primar

ily dr

iven by increases in commodity prices

which are passed onto customers by power producers,

thereby increas

ing the revenue earned by the producer.

Increases in the producer’s revenue and EVICs

decreases our proportion of ﬁnanced emiss

ions, both

on an absolute and economic intens

ity bas

is. Absolute

reductions in emiss

ions are therefore pr

imar

ily because of

macroeconomic factors. As a caveat, the Group continues

to grow our ﬁnancing prov

ided to renewable power

producers, which now represents approximately 25 per

cent of the power portfolio and contributes towards this

intens

ity decrease.

Calculation methodology

Scope 1 is the most material component of the Power

sector’s emiss

ions. By contrast, Scope 2

is ins

ign

icant and

relates to energy used to operate power plants which

cannot be isolated from the overall industry electric

ity

consumption. Scope 3 is not included as there is no

agreed approach to its quantif

icat

ion in this sector.

Changes in baseline method

We intend to update our measurement basis of the

power sector from a revenue-based intens

ity measure to

a production-based measure in 2023. We believe this will

provide a more accurate measure of our counterparty CO

emiss

ions, wh

ich will be per unit of power produced (KWh).

Scope 1, 2

Standard Chartered

– Annual Report 2022

Strategic report

Metals and min

ing

The Metals and Min

ing sector prov

ides raw

materials that support much of the global economy. The

sector contributes around 12 per cent of global CO

emiss

ions

(Scope 1 and 2), of which Asia, Africa and the Middle East

contribute more than 75 per cent.

Our net zero whitepaper detailed our targets to achieve an

emiss

ions reduct

ion of 33 per cent for Steel (Scopes 1 and 2

intens

ity); 33 per cent for Other Metals and M

ing (ex. Coal

min

ing) (Scopes 1 and 2

intens

ity); and 85 per cent for Coal

min

ing (Scopes 1, 2 and 3 absolute).

Thermal coal

We will only provide ﬁnanc

ial serv

ices

to clients who:

Progress

In 2022, we achieved a 30 per cent reduction in the

absolute emiss

ions assoc

iated with our Coal min

ing

portfolio, from 3.3 to 2.3 MtCO

e. This has been achieved

by allowing the period

ic run-down of our loan book

in this

sector.

For Steel and Other Metals and Min

ing, we ach

ieved a

11 per cent reduction in the revenue intens

ity target. Th

decrease was primar

ily due to

increases in commodity

prices reducing our proportion of the client’s emiss

ions.

Price increases resulted in an increase in client revenue

which therefore reduced our share of emiss

ions.

Calculation methodology

Min

ing projections

We have used a Baringa scenario to calculate Scope 1 emiss

ions

from coal min

ing. The Power sector has been followed for Scope

2 emiss

ions and Scope 3 em

iss

ions have been based on coal

production adapted from the IEA’s Net Zero Emiss

ions scenar

io.

Steel producer projections

Emiss

ions for the steel sector are often quoted or publ

ished

in a way that partially includes Scope 2 and/or Scope 3. In our

methodology, we different

iate Scope 1 from Scopes 2 and 3 to

support clearer, more precise calculations. Scope 3 emiss

ions

are not currently calculated due to lim

ited data ava

ilab

ity;

however, we continue to engage our clients and standard

setters to develop a suitable approach to calculating Scope 3

emiss

ions for steel.

Changes in baseline method

We intend to update our measurement basis of the Metals

and min

ing sector from revenue-based

intens

ity measures to a

production-based measure in 2023. We believe this will provide

a more accurate measure of our counterparty CO

emiss

ions

which will be provided by unit of metal produced (e.g. tonne of

steel).

Metals and min

ing value cha

in in scope

By 2024

are less than 80% dependent on thermal coal

(based on % revenue)

By 2025

are less than 60% dependent on thermal coal

(based on % revenue)

By 2027

are less than 40% dependent on thermal coal

(based on % revenue)

By 2030

are less than 5% dependent on thermal coal

(based on % revenue)

Our portfolio

Sector

Balance

$bn

2022

ﬁnanced

emiss

ions

Target

Target type

Steel

1.4

1.9

-33%

Revenue

emiss

ions

intens

ity

Other

Metals and

Min

ing

0.7

0.9

-33%

Revenue

emiss

ions

intens

ity

Coal

Min

ing

<0.1

2.3

-85%

Absolute ﬁnanced

emiss

ion

Other metals

Steel

production

Coal

min

ing

Scope

1, 2 and 3

Scope 1, 2

Progress

In October 2021, we enhanced our Power Generation and

Extractive Industries Posit

ion Statements to test our

clients’ dependency on thermal coal at client entity level

and at group level (tested at group level previously). Since

then, we ident

iﬁed 37 cl

ient entit

ies that der

ive 100% of

their revenue from thermal coal. Of these, 14 entit

ies have

been fully exited in 2022 with the remainder in progress,

subject to contractual commitments.

All our criter

ia on thermal coal

is tested on an annual

basis via our Environmental and Social Risk Assessments.

Where a client triggers a threshold but approaches us to

provide Transit

ion F

inance we will consider our

involvement on a case-by-case basis, includ

ing

instances

where a client is reducing greenhouse gas emiss

ions

through the early retirement of coal power assets.

Expanding our ﬁnanced emiss

ions coverage

In line with our aim to measure, manage and reduce our

ﬁnanced emiss

ions,

in 2022, we continued to expand the

coverage of our calculations and are pleased to announce

three further sectoral targets covering transportation.

By 2030, we aim to reduce emiss

ions

in the transportation

sector:

•

34 per cent in Aviat

ion (product

ion intens

ity)²

•

Reduce our alignment delta in Shipp

ing from +2.6 per cent

to 0 per cent

•

49 per cent in Automotive manufacturers (production

intens

ity)²

Alignment with the International Marit

ime Organ

isat

ion (IMO) em

iss

ions

trajectory curve

Sector specif

intens

ity be

ing CO

per Km distance traveled

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Aviat

ion

The aviat

ion sector

includes all activ

ies related to

domestic and internat

ional a

ir travel. It is responsible for

over 2 per cent of global energy-related CO

emiss

ions, as

per the IEA Tracking report 2022.

Our 2022 portfolio emiss

ions basel

ine is 1152 gCO

e/Rtk

(revenue tonne kilometre). Reaching net zero in this sector

will be challenging; however, we believe we can make

progress towards net zero by leveraging new ﬂeet

technology, sustainable aviat

ion fuels (SAF) and engag

ing

ambit

ious counterpart

ies.

We have set ourselves the target to achieve a 34 per cent

reduction in production intens

ity², from our basel

ine.

Shipp

ing

The shipp

ing sector cons

ists of moving

goods or passengers by water and is responsible

for 2.9 per cent of global emiss

ions.

Our shipp

ing portfol

io has a baseline ‘alignment delta’ of

+2.6 per cent in 2022. Achiev

ing the current Internat

ional

Marit

ime Organ

isat

ion (IMO) target of zero delta

feasible and future regulations are likely to drive the

industry to net zero. Key levers for the sector include:

•

Support transit

ion through

investment in retroﬁt,

alternative fuels and greener vessels (e.g. young and dual

fuel vessels).

•

Deepen relationsh

ips w

ith ambit

ious counterpart

ies and

engage others.

Calculation methodology

The emiss

ions are calculated based on M

iss

ion Poss

ible

Partnership (MPP) Prudence (1.5C scenario) by counting

aviat

ion fuel burn by each a

ircraft to which asset-backed

ﬁnance has been provided. The calculation uses a well-to-wake

formula which includes all emiss

ions from the po

int of oil

extraction to being burnt by the aircraft engines. Therefore,

Scopes 1, 2 (for the corporate) and 3 (emiss

ions for each

aircraft) are included for each counterparty funded.

For each aircraft, we receive total km travelled, estimate total

fuel burnt on a well-to-wake basis (based on total distance

travel and aircraft engine type) and add onto this a load

(weight) factor of specif

ic a

ircraft to calculate Revenue Tonnes

per Kilometre.

Calculation methodology

Shipp

ing em

iss

ions are calculated by count

ing fuel oil burn for

each ship to which asset-backed ﬁnance has been provided.

Each owner or lessee is required to report to a regulator the

distance its ships have travelled during the year, as well as fuel

consumed per vessel. Some vessels consume more energy

based on their type of cargo.

IMO conversion factors are used to convert fuel burnt to CO

emiss

ions, w

ith these emiss

ions d

ided by d

istance travelled

and Dead Weight Tonnage (the loaded weight of a ship) to

provide the gCO

e/Vkm (vehicle kilometre).

The IMO also has a 2050 trajectory. This is not yet 1.5 degree

compliant, however the Poseidon Princ

iples, wh

ich are shipp

ing

specif

ic, requ

ires that banks measure and report their

‘alignment delta’ and provide a trajectory for each type of

vessel in a different weight category to that trajectory.

IMO, 2020. Fourth IMO GHG Study. https://www.imo.org/en/OurWork/Environment/Pages/Fourth-IMO-Greenhouse-Gas-Study-2020.aspx

Sector specif

intens

ity be

ing CO2 per Km distance travelled

Momentum case (aggressive)

Momentum case (conservative)

Net Zero reference scenario (MPP Prudence)

Baseline

Emission intensity

(gCO

e/RTK)

1,450

1,400

1,350

1,433

1,152

1,222

-760

Emissions

reduction

required to

meet target

1,300

1,250

1,200

1,150

1,100

1,050

1,000

950

900

850

800

750

700

650

600

2030

-34%

Momentum based on IMO compliance

SCB 2021 Baseline

Alignment delta

(calculated against current IMO trajectory)

35%

30%

25%

2.6%

20%

15%

10%

-5%

-10%

-15%

-20%

-25%

2021

2030

Fully aligning to IMO trajectory means

achieving 0% delta alignment

Standard Chartered

– Annual Report 2022

Strategic report

Automotive manufacturers

Automotive manufacturers includes industr

ies

associated with the production, wholesaling, retail

ing and

maintenance of motor vehicles. The sector is responsible

for 17 per cent of global emiss

ions.

Our portfolio emiss

ions basel

ine was 160 gCO

e/Vkm in

2022. A focus on ﬁnancing the growth of the electr

ic vehicle

industry is key to success in this sector.

We have set ourselves the target to achieve a 49 per cent

reduction in production intens

ity,

from our baseline.

Calculation methodology

There is currently no automotive sector-specif

ic target. Therefore,

the target is based upon the IEA net zero 1.5C scenario.

The total emiss

ions calculated are the Scope 1 and 2 em

iss

ions

of the orig

inal equ

ipment manufacturers (OEM), being the

manufacturing carbon cost)+ Scope 3, being the lifet

ime ta

ilp

ipe

emiss

ions x veh

icles produced + OEM emiss

ions from supply cha

in.

This is div

ided by the total k

ilometres travelled of vehicles

produced to calculate gCO

e/Vkm.

What comes next

As a member of the NZBA, we are committed to measure and set targets against all our

high-carbon sectors with

in three years.

Activ

ity

2023

2024

Alumin

ium

Data

collection

Cement

Data

collection

Mortgage (CPBB)

Commercial

Real Estate

Data

collection

Agriculture

Remain

ing Sectors

Enhancements: Targets to be set in the future

Commercial

Real Estate

Remain

ing

Sectors

Agriculture

Resident

ial

Mortgages (CPBB)

Alumin

ium

Cement

Enhancements to exist

ing targets

We have made, or will be making, the following changes to the way we set targets. This is to better reﬂect our progress

against reductions without these being impacted by changes in commodity prices inﬂuenc

ing revenue

intens

ies.

Oil & Gas

Metals & Min

ing

Power

2023

Absolute

emiss

ions

Revenue

intens

ity

Production

intens

ity

Revenue

intens

ity

Production

intens

ity

Revenue

intens

ity

CPBB mortgage emiss

ions

With

in our CPBB segment, we set a target to measure and report mortgage em

iss

ions w

ith a view to setting targets by

December 2023. During 2022 we completed baseline emiss

ions measurement for S

ingapore, Hong Kong and Korea, covering

more than 80 per cent of the consumer mortgage portfolio.

Sector specif

intens

ity be

ing CO

per Km distance travelled

Net zero reference scenario (IEA NZE – rebaselined

)

Baseline (Historic and current, as at 2021)

Augmented to be new light duty vehicles only, CO

to CO

e, scope 3 TTW to scope 1-3

excl. WTT

Emission intensity

(gCO

e/vkm)

210

200

190

171

165

160

Emissions

reduction

required to

meet target

180

170

160

150

140

130

120

110

100

2030

49%

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Mobil

isat

ion of Sustainable Finance is deﬁned as any investment or ﬁnanc

ial

service provided to clients which supports: (i) the preservation, and/or

improvement of biod

ivers

ity, nature or the environment; (i

i) the long-term

avoidance/decrease of CO

emiss

ions,

includ

ing the al

ignment of client’s

business and operations with a 1.5 degree trajectory (known as transit

ion

ﬁnance); and (i

i) a social purpose.

Lending transactions are measured as per the loan commitment/

underwritten amount provided to the counterparty. This lending meets the

requirements of the Group’s Green and Sustainable Product Framework.

In recent years, sustainab

ity has moved

from a predominantly risk-based in

iat

ive

to become a value driver for many banks as

they seek opportunit

ies to m

igage cl

imate

change and its effects, and tackle social

issues through the provis

ion of ﬁnance.

Our Opportunity 2030 report (

www.sc.com/opportunity2030

published in 2020) ident

iﬁed a $10 tr

ill

ion

investment

opportunity in contribut

ing to the SDGs,

includ

ing clean

energy. It is this opportunity which we are targetting through

our low-carbon products and services.

With our strong emerging markets footprint, we recognise the

role we have to play in facil

itat

ing a just transit

ion, d

irect

ing

capital and special

ised support to the reg

ions that need it

most to support sustainable economic growth. More than 90

per cent of our sustainable ﬁnanc

ing

is directed at

communit

ies w

ith

in the As

ia, Africa and the Middle East

region (see

sc.com/SFImpactReport

for more detail).

We have focused on strengthening our capabil

ies in

transit

ion ﬁnance throughout 2022,

includ

ing deploy

ing a

dedicated Transit

ion Accelerat

ion Team with

in the CSO

organisat

ion to support cl

ients in high-carbon sectors. This

team includes special

ists w

ith industry knowledge to advise

our clients in their ind

idual sustainable ﬁnance journeys.

We have set ourselves targets to

achieve Sustainable Finance income

of $1 bill

ion by 2025, and mob

ise

$300 bill

ion of Susta

inable Finance

between 2021 and 2030.

We have set ourselves a target to mobil

ise $300 b

ill

ion of

Sustainable Finance by 2030. This includes the facil

itat

ion

of green and social bond rais

ing, prov

ion of fund

ing

commitments to green and social causes as outlined below,

advisory services to support our clients on their own journeys

to net zero and facil

itat

ion of Sustainab

ity Linked Loans.

In 2022, we mobil

ised $23.4 b

ill

ion through our susta

inable

ﬁnancing act

ies, bring

ing our cumulat

ive sustainable

ﬁnance total towards this target to $48 bill

ion s

ince 2021.

This target update covers the time period from 1 January

2021 to 30 September 2022. Note the decline in our capital

markets activ

ity

is consistent with the overall market for

green, social and sustainable issuances in 2022.

Further

our Project Export Finance (PEF) portfolio was impacted

by supply chain issues and market sentiment.

Sustainable Finance mobil

ised¹

2021

$24.6bn

2022

$23.4bn

2021–2030

$300bn

Product

2022

$mn

2021

$mn

Cumulative

progress

Balance-sheet related

transactions provided²

Green/Transit

ion Project Export

Finance (PEF) lending

985

1,647

2,632

Social/Sustainable PEF lending

872

1,290

2,162

Financ

ing Solut

ion (FS) and

Leveraged and Acquis

ion

Finance (LAF) lending

2,599

2,427

5,026

Sustainable linked loans (SLL)³

5,201

8,544

13,745

Transit

ion ﬁnance

144

Green mortgages⁴

3,500

Business banking Small and

Medium Enterprise (SME)

lending⁵

535

499

1,034

Micro ﬁnance

778

618

1,396

Capital Market/Advisory⁶

Green/Transit

ion bonds

2,899

3,961

6,860

Social/Sustainable bonds

3,593

4,688

8,281

Mergers & Acquis

ion (M&A)/

Advisory⁷

2,279

905

3,184

Total sustainable ﬁnance

mobil

ised

23,385

24,578

47,964

Of the above

CCIB

18,572

23,461

CPBB

4,813

1,117

23,385

24,578

SLLs are measured as the committed/underwritten amount as provided to

the counterparty. SLLs provide funding to counterparties with KPIs linked to

either green or social targets, and if those targets are met the interest rate

charged is reduced by a certain percent and increases if the targets are not

met. SLLs are not specif

ic use of proceed

instruments and the funding raised

may not be used for green and/or social purposes but rather for general

business purposes.

Green mortgages are lending from Consumer, Private and Business Banking

(CPBB) that meets a specif

ic energy rat

ing. During the year, these mortgages

were reviewed and ident

iﬁed by CPBB as meet

ing the requirements of the

Group’s Green and Sustainable Product framework.

Business banking; SME and Microf

inance lend

ing which is the provis

ion of

ﬁnance to the Development Assistance Committee (DAC) lower- and

middle-lower-income countries as per the Organisat

ion for Econom

Co-operation and Development (OECD). The inclus

ion of bus

iness banking is

linked to the Access to Finance sub-theme with

in the Group's Green and

Sustainable Product Framework incorporating Employment generation, and

programmes designed to prevent and/or alleviate unemployment, includ

ing

through the potential effect of SME ﬁnanc

ing and m

icrof

inance. W

ith the

inclus

ion of bus

iness banking, the Entrepreneur (Lending to SMEs and

Microf

inance) asp

irat

ions would be double counted and these asp

irat

ions

have therefore been retired.

Capital market bonds are measured by the proportional bookrunner share of

facil

itated act

ies as determined by third-party league table rankings

based on the level of services provided.

M&A/Advisory represents sole ﬁnanc

ial adv

iser, measured by the total deal

size div

ided by the number of adv

isers on the deal.

Mobil

ised $23.4bn of Susta

inable Finance is for YTD Sept 2022 and $48bn

delivered between 2021-2022 includes full year 2021 and YTD Sept 2022.

Catalysing ﬁnance

and partnerships for transit

ion

Standard Chartered

– Annual Report 2022

Strategic report

Our Sustainable Finance Frameworks

Our Green and Sustainable Product Framework governs

our Sustainable Deposits products and suite of

Sustainable Trade Products, and sets out what qualif

ies

as ‘green’, ‘social’ or ‘sustainable’.

The Sustainab

ity Bond Framework governs our debt

products, provid

ing transparency and gu

idance on the

use of proceeds and the impact of the green, social and

sustainable bonds issued by the Group.

We have outlined our approach to deﬁn

ing Trans

ion

Finance in our Transit

ion F

inance Framework

. This

Framework is informed by the IEA NZE 2050 scenario.

In pursuit of this, throughout 2022 we continued to expand

and develop our suite of sustainable products in line with our

Sustainable Finance product frameworks. These frameworks,

developed in collaboration with Sustainalyt

ics, a lead

ing

provider of ESG and corporate governance research, are

reviewed annually.

Following the launch of our new Transit

ion F

inance Framework

in 2021, we updated our Green and Sustainable Product

Framework and expanded the list of elig

ible act

ies.

In CCIB, new product launches included Sustainable Fiduc

iary

Deposits, sustainab

ity-linked sale and leaseback for aviat

ion

ﬁnance, and ESG structured products with rates underlying.

With

in CPBB, we connected reta

il clients with access to

sustainable ﬁnance offerings, launching new products

includ

ing structured notes, susta

inable deposits and Green

Mortgages. Throughout 2022, we increased the number of

markets where we offer Green Mortgages to six, through

successful product launches in Vietnam, South Korea and

Malaysia.

In total, we now have 31 sustainable ﬁnance products

spanning both our CCIB and CPBB client segments. By

review

ing the

income potential from this growing suite of

Sustainable Finance products and services, alongside our

client base and the estimated scale of the opportunity, we

believe that we are on track towards our target of achiev

ing

$1 bill

ion of Susta

inable Finance income

by 2025.

In 2022, we reported $0.5 bill

ion Susta

inable Finance related

income against this target, and increased our Sustainable

Finance asset base by 45 per cent to $13.5 bill

ion between July

2021 and September 2022. This increase was largely due to the

ident

iﬁcation and tagg

ing of $3.8 bill

ion

in Green Mortgages,

primar

ily w

ith

in the Hong Kong market.

The majority of our Susta

inable Finance asset base

($10.2 bill

ion of the $13.5 b

ill

ion) has been extended to a var

iety

of green projects which help lower carbon emiss

ions, such as

renewable energy projects, commercial real estate and

funding for the development of rail projects.

Our social lending makes up the remain

ing $3.3 b

ill

ion of our

total Sustainable Finance asset pool and encompasses

categories such as healthcare, education and access to

ﬁnance.

Sustainable Finance income

Product

($m)

2022

3,4

2021

YOY

Transaction Banking

150%

Trade & Working capital

140%

Cash Management

186%

Financ

ial Markets

326

241

35%

Macro Trading

157%

Credit Markets

268

217

24%

Financ

ing & Secur

ies Serv

ices

33%

Lending & Portfolio Management

102

16%

508

361

41%

SF income is deﬁned as a portion of the Groups income, generated by products and services as approved by the Sustainable Finance Governance Committee.

This includes, interest and margin earned on assets as disclosured in the Green and Sustainable assets, and fees from advisory and hedging activ

ies for clients'

ESG products.

YoY = year-on-year variance which is better/(worse) comparing 2022 to 2021.

CPBB income will be added to this product suite in subsequent reporting periods.

Our Transit

ion F

inance Framework can be found at: https://av.sc.com/corp-en/content/docs/Standard-Chartered-Bank-Transit

ion-F

inance-Framework.pdf.

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Green Assets

Theme

($m)

Sept'22

June'22

June'21

SDG

Clean Transport

541

532

527

Energy Efﬁciency

507

164

–

Manufacture of components for renewable energy technology

393

–

Energy-efﬁciency technology

122

–

Transport

–

Green Build

ing

7,014

6,326

3,436

Green Build

ing

3,216

2,826

3,436

Mortgage Portfolio HK

3,785

3,491

Mortgage Portfolio SG

Pollution Prevention and Control

102

110

–

Renewable Energy

2,122

2,425

1,526

Grid expansion

104

Hybrid Wind & Solar

154

237

174

Hydropower

Manufacture of components for renewable energy technology

274

450

481

Solar

785

976

269

Waste to Energy

111

Wind

714

577

414

Sustainable Water and Wastewater Management

10,295

9,585

5,502

Social Assets

Theme

($m)

Sept'22

June'22

June'21

SDG

Access to Water

COVID-19

197

Crit

ical Care Equ

ipment

197

Healthcare Facil

ies

Hygiene Products

Pharma and Medical Goods

Protective Equipment

Healthcare infrastructure

105

152

140

Hospital

101

147

140

Hospital Equipment

Road Infrastructure

105

Access to Finance

2,930

3,013

3,122

Business Banking

2,587

2,640

2,618

Micro Finance

341

373

465

Fund ﬁnance

–

165

SME loans

–

3,173

3,284

3,760

Total Sustainable Finance Assets

13,468

12,869

9,262

Sustainable liab

ies

Sept'22

June'22

June'21

Total bond issuances

2,083

1,983

1,095

Total sustainable deposits (CCIB)

3,154

3,056

1,943

Total sustainable CASA (CCIB)

335

182

–

Total sustainable CASA and deposits (CPBB)

217

118

5,789

5,339

3,048

Amounts included in the table are as at September 2022, June 2022 and June 2021 from left to right and have been taken from the Sustainable Finance Impact

Report (sc.com/SFImpactreport). September 2022 has been prepared under the same basis as the Impact Report and reviewed by Sustainalyt

ics.

See

sc.com/SFimpactreport

for more highl

ights from our Susta

inable Finance portfolio in 2022

Standard Chartered

– Annual Report 2022

Strategic report

A shared ambit

ion – work

ing in partnership

We have ident

iﬁed several opportun

ies for the Group to

play an active role in shaping global standards ranging from

net zero to carbon markets. Along these lines, we are actively

involved in the leadership of several standard-setting or

standard-inﬂuenc

ing efforts.

For instance, we are active partic

ipants of the Glasgow

Financ

ial All

iance for Net Zero (GFANZ) Princ

iples Group,

an ambit

ious programme to generate the comm

itment,

investment and alignment needed to drive forward the

transit

ion to net zero. Together w

ith the CEO of Macquarie

Group, our CEO is the Co-Chair of the GFANZ Working Group

on Capital Mobil

isat

ion to Emerging Markets and Developing

Economies, and throughout 2022, our Group Head, Conduct

and Financ

ial Cr

ime and Compliance has chaired the Net Zero

Banking Alliance (NZBA) – the industry-led banking element

of GFANZ.

Our Group Chairman has co-chaired the United Nations’

Global Investors for Sustainable Development (GISD) Alliance,

which has set ambit

ious objectives to scale up long-term

ﬁnance and investment in sustainable development; and

our Global Head, Sustainable Finance has continued to hold

the posit

ion of Cha

ir of the Equator Princ

iples Assoc

iat

ion. In

2023, we intend to support the Equator Princ

iples Steer

ing

Committee as our term as Chair comes to an end. We are also

join

ing the Roundtable on Sustainable Palm Oil as a member

of the Board of Governors.

In addit

ion, we are members of the Un

ited Nations

Environment Programme Finance Init

iat

ive and the Climate

Bonds Init

iat

ive, as well as one of the in

ial members of the

Task Force on Climate-related Financ

ial D

isclosures (TCFD)

and signator

ies of the Pose

idon Princ

iples, a global framework

for assessing and disclos

ing the cl

imate alignment of

ﬁnancial

inst

itut

ions’ shipp

ing portfol

ios.Our Global Head of

Sustainab

ity Strategy and Net Zero represents the Group on

SBTi's Financ

ial Net-Zero Expert Adv

isory Group (EAG).

Our Head of Carbon Markets Development is a Board

member of the Integrity Council for the Voluntary Carbon

Markets (IC-VCM), which is focused on developing a high-

quality internat

ional carbon market. The IC-VCM carr

ied out

a consultation on its Core Carbon Princ

iples over the summer,

receiv

ing over 350 responses and 5,000

ind

idual comments.

Our Group CEO sits on the Dist

ingu

ished Advisory Group of

the IC-VCM and will aim to be involved in the development

and trading of carbon markets around the world.

Meanwhile, we increased our representation at COP27 and

the G20 and were actively involved in the launch of several

groundbreaking in

iat

ives on the marg

ins of each; these

include the launch of the Africa Carbon Markets Init

iat

ive

(ACMI) and Egypt's Nexus for Water, Food & Energy (NWFE)

at COP27, the $20 bill

ion comm

itment to advance Indonesia's

Just Energy Transit

ion Partnersh

ip (JETP) at the G20, and the

$15.5 bill

ion comm

itment to the Vietnam JETP.

The Group partic

ipates

in various industry in

iat

ives, forums

and roundtables, includ

ing the Cl

imate Financ

ial R

isk Forum

(CFRF) and Global Associat

ion of R

isk Professionals (GARP)

roundtable, to ensure we benchmark our risk management

capabil

ies and stay abreast of changes.

Sim

ilarly, we are engaged at local and reg

ional levels to share

ins

ights, comment on regulatory consultat

ions, and better

understand the regulatory landscape and practices across

our footprint.

Investing in Climate Research

Our four-year partnership with Imperial College London

covers long-term research on Climate Risk, advisory on

shorter-term, internally focused projects to enhance Climate

Risk capabil

ies and train

ing of our colleagues, Management

Team and Board.

In 2022, we sponsored a research project on ‘Investing in

Nature to Tackle Biod

ivers

ity Loss and Enhance Food Security’,

which explored the risks and opportunit

ies fac

ing the global

agricultural sector from climate change.

•

Part 1 expanded on the known risks of climate change on

the agriculture sector by examin

ing the fa

ings of major

climate models, as well as the immed

iacy of the s

ign

iﬁcant

impacts of climate change on the agriculture sector.

•

Part 2 explored the potential for nature-based solutions to

tackle the interl

inkages between agr

iculture, land-use, and

climate change.

•

Part 3 focused on the ﬁnancial opportun

ies surround

ing

natural assets and sustainable agriculture.

In addit

ion, we worked w

ith Imperial College London on three

advisory projects during 2022, to develop a methodology

to assess the impact of Climate Risk on sovereign ratings;

develop Physical Risk report cards for sovereigns; and enhance

the energy consumption calculation methodology and

emiss

ion factor database for mortgage portfol

ios in our key

markets.

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

While transit

ion

ing to a net zero economy

creates clear opportunity, it also comes with risk.

But before we can manage the risk, ﬁrst we must

be able to ident

ify, assess

its size and monitor it.

In the front line, our Environmental and Social Risk

Management team with

in the Ch

ief Sustainab

ity Ofﬁce aims

to drive growth while managing the environmental and social

(E&S) risks associated with ﬁnanc

ing related to our CCIB

clients. Our approach is embedded directly into our credit

approval process and supports us to work with our

stakeholders to ident

ify, manage, m

igate and mon

itor the

potential impacts that stem from our ﬁnanc

ing dec

ions.

Our Posit

ion Statements, approved by the Group

Responsib

ity and Reputational Risk Committee (GRRRC),

outline the standards we apply to assess whether to provide

ﬁnancial serv

ices to our clients, and help us to ident

ify and

assess E&S risks related to our CCIB clients.

We use these statements – which draw on International

Finance Corporation (IFC) Performance Standards, the

Equator Princ

iples (EP) and global best pract

ice – to assess

whether to provide ﬁnanc

ial serv

ices to clients operating

in sensit

ive (

includ

ing h

igh-carbon) business sectors.

In addit

ion, we have spec

ic gu

idance for clients operating

in sectors with a high potential environmental or social

impact. Our list of prohib

ited act

ies can be found at

sc.com/prohib

itedact

ies

In 2022, we reviewed 1,170 clients and 550 transactions that

presented potential E&S risks. If we ﬁnd a material E&S issue,

we take steps to proactively engage the client to mit

igate

ident

iﬁed r

isks and impacts, and support and guide our clients

to improve their E&S performance over time.

In relation to climate, we encourage all clients in the Power

generation, Metals and min

ing, and O

il and gas sectors to

have a strategy to transit

ion the

ir business, in line with the

goals of the Paris Agreement. We review a client’s approach

to transit

ion us

ing the output from our client Climate Risk

assessments. In particular, we util

ise a cl

ient’s Transit

ion R

isk

mit

igat

ion score, which considers both quantitat

ive

inputs

(e.g. emiss

ions measurement data and reduct

ion targets), and

qualitat

ive overlays through d

irect client conversations to

assess management focus and commitment.

We aim to support and guide our clients to a low-carbon

pathway and offer them sustainable ﬁnanc

ing as the ma

levers to help us achieve our net zero targets. We will also be

assessing our exposure to emiss

ions-

intens

ive cl

ients and/or

assets and will seek to replace these over time by adding new

low-carbon-intens

ity cl

ients and/or assets to our portfolio.

This does not mean walking away from our exist

ing cl

ients,

but instead working with them to ﬁnance investment in

low-carbon methods and technologies, particularly across

Asia, Africa and the Middle East where investment could have

the biggest impact. However, for clients who do not align with

our Posit

ion Statements, we may look to w

ithdraw ﬁnanc

ial

services and exit the relationsh

if we cannot work with them

to align over time.

We recognise how important it is to get this right, so in support

of our Sustainab

ity Aspirat

ions, we updated our E&S R

isk

Management Framework based on our 2021 Posit

ion

Statement refresh, and we expanded our capacity,

establish

ing a team w

ith

in our Global Bus

iness Service centre

in Warsaw to conduct enhanced E&S due dil

igence on cl

ients.

In addit

ion, all relat

ionsh

ip managers and cred

it ofﬁcers are

offered train

ing

in assessing E&S risk, as well as having access

to detailed online resources. 4,944 colleagues received E&S

related train

ing

in 2022.

In 2022, we prior

ised our approach to biod

ivers

ity by

undertaking a pilot biod

ivers

ity risk assessment. This included

a loan book analysis to ident

ify

impacts and dependencies

from biod

ivers

ity-related risks at a sector, country and

ﬁnancial serv

ices level. We are continu

ing to develop our

approach to biod

ivers

ity, expanding on the review conducted

this year to gain a clearer view of the biod

ivers

ity risk

associated with the Group’s activ

ies.

In 2023, we plan to update our Posit

ion Statements cover

ing

all sensit

ive sectors, w

ith the requirements to become

effective the following year.

Read more about our prohib

ited act

ies at

sc.com/prohib

itedact

ies

Read more about our reporting against the Equator Princ

iples at

sc.com/equatorprinc

iples

Mit

igat

ing Environmental

and Social Risk

Group Climate Risk Appetite Statement

“

The Group aims to measure

and manage ﬁnancial

and non-ﬁnancial r

isks

from climate change,

and reduce the emiss

ions

related to our own activ

ies

and those related to the

ﬁnancing of cl

ients in order

to support alignment with

the Paris Agreement

”

Standard Chartered

– Annual Report 2022

Strategic report

Climate Risk appetite metrics

Risk Type

Metrics Reported

Climate Risks Reported

Credit Risk – CPBB

Concentration of consumer mortgage

exposure with high gross physical (ﬂood) risk

across the Group’s seven key markets

Physical risks: ﬂood risk

Credit Risk – CCIB

Net nominal exposure concentration to clients with

High Transit

ion and Phys

ical Risk, and Low Readiness

Physical Risk and Transit

ion R

isk

Traded Risk

Climate risk is incorporated with

in Traded R

isk Stress

Risk Appetite

Physical Risk

Reputational & Sustainab

ity

Risk

Net nominal exposure concentration to clients with

High Temperature Alignment and Low Transit

ion

Readiness to monitor misal

ignment to Par

Agreement

Temperature alignment – the degree of

projected warming up to 2030 under an

orderly scenario

Country Risk

Concentration of Gross Country Risk (GCR) exposure

for countries exposed to extreme transit

ion and

physical risks

Physical and Transit

ion R

isk based on

internal country Climate Risk index

Supporting our frontline teams, we have a dedicated second-

line Climate Risk team. Our Climate Risk Appetite Statement

(RAS) is approved annually by the Board, and is supported by

Board and Management Team level risk appetite metrics

across Credit – CCIB and CPBB, Reputational and

Sustainab

ity Risk (RSR), Traded Risk and Country Risk.

The metrics are approved by the Group Risk Committee (GRC)

(for Management Team level risk appetite metrics) and the

Board (for Board level risk appetite metrics) annually.

Monitor

ing of adherence to r

isk appetite metrics commenced

in January 2022 and any breaches are reported to the GRC

and Board Risk Committee (BRC).

We are expanding the scope and coverage of our risk

appetite metrics for enhanced risk ident

iﬁcation and

management. Addit

ional metr

ics to address our public

targets across key sectors and a stress loss metric built on

scenario outcomes have been ident

iﬁed and are be

ing

monitored for inclus

ion

in risk appetite reporting in 2023. The

focus for 2023 will be to increase the coverage of exist

ing

metrics and introduce new risk appetite metrics.

The uncertaint

ies surround

ing how and when Physical and

Transit

ion R

isk will impact mean that no tool or methodology

is perfectly able to estimate risks from climate change now or

in the future. However, we need to move quickly so we are

developing methodologies, engaging with clients and

integrat

ing Cl

imate Risk into our mainstream risk

management activ

ies and assessments. We will seek to

adapt our approach as the impact from Climate Risk becomes

clearer and the tools and methodologies to gather reliable

data mature.

We have toolkits to quantitat

ively measure cl

imate-related

Physical and Transit

ion R

isk and in 2022, we continued to

enhance our understanding of climate-related risks, and

sign

iﬁcantly strengthened our stress test

ing and scenario

analysis capabil

ies for a range of management scenarios

that are more plausible. We continue to engage with our

corporate clients to understand their Transit

ion and Phys

ical

Risks, as well as their plans to prepare for climate change.

The data we captured helped us develop our own client-level

climate-risk assessments for both exist

ing and new cl

ients,

improve our internal climate modelling capabil

ies and

strengthen the risk measurement and monitor

ing of the

portfolios. Despite sign

iﬁcantly advanc

ing in these areas,

quality and availab

ity of data is a pervasive issue. While we

are focusing on improv

ing the data qual

ity, improvements are

likely to take several years. In view of the paucity of data and

little to no transit

ion or phys

ical risk related histor

ic data for

model testing, several assumptions and lim

itat

ions must be

made while build

ing these models. The l

itat

ions and

challenges continue to exist which are discussed throughout

our disclosures.

For more details on how we apply scenario analyses and consider

time horizons, please see

pages 90 to 95.

For more detail on how we recognise Climate Risk with

in our ERMF,

the risks ident

iﬁed, as well as the processes and toolk

its used to do

this, see

pages 96 to 112

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

To assess climate-related risks and opportunit

ies

the short-, medium-, and long-term we use scenario

analysis to consider how risks and opportunit

ies

may evolve under different situat

ions.

Over recent years, we have progressively strengthened

our scenario analysis capabil

ies and developed our

infrastructure and capabil

ies to incorporate Climate Risk

into data, modelling, and analysis. Despite sign

iﬁcantly

advancing scenario analysis capabil

ies over the past

three years, the modelling of Climate Risk impact over a

30-year period has been expectedly challenging across

multiple dimens

ions,

includ

ing scenar

io data and pathways,

availab

ity of client-specif

ic data, and modell

ing lim

itat

ions.

Notwithstand

ing these challenges, our work to date,

using certain assumptions and proxies, ind

icates that

our business is resil

ient to all Network of Central Banks

and Supervisors for Greening the Financ

ial System

(NGFS) and International Energy Agency (IEA) scenarios

that were explored. For more details on the lim

itat

ions

pertain

ing to the scenar

io analysis, please see page 94.

With the aim to enhance our internal scenario analysis

capabil

ies in line with our Risk Appetite Statement, in

2022 we assessed the impact of Transit

ion R

isk on our CCIB

corporate client portfolio based on three IEA scenarios and

three Phase 2 scenarios from the NGFS, and partic

ipated

in the Monetary Authority of Singapore Industry-Wide

Stress Test. We also assessed the impact of sea-level

rises under various Intergovernmental Panel on Climate

Change (IPCC) Representative Concentration Pathways

(RCP) scenarios to explore the Physical Risk impact on

the Consumer, Private and Business Banking (CPBB)

resident

ial mortgage portfol

io over short- and long-term

time horizons for internal risk management purposes.

The results of these analyses are being used to further

inform strategy and business planning, set Risk Appetite,

ident

ify portfol

ios with elevated risk concentration, and

establish linkages to enhanced credit risk assessments.

While we have continued to use external models to

support scenario expansion and modelling of Transit

ion

and Physical Risks, in 2022 we built on this foundation and

developed internal model-build

ing capab

ies supported

by an external vendor. The outputs of these models will be

used to support IFRS9 impact analysis, stress testing runs

and various risk management processes. Our aim is that

these internal models will provide greater transparency

when compared to vendor models and enable us to run

various scenarios and calibrate the models as required.

We aim to continuously improve these models throughout

2023 to cater for shorter, more plausible scenarios that

can inform our business strategy and ﬁnanc

ial plann

ing.

The following section describes the scenarios we use,

their inputs, assumptions, lim

itat

ions and key ins

ights.

Scenarios used at Standard Chartered

Transit

ion R

isk scenarios

In 2022, we adapted the following scenarios to our CCIB

clients:

IEA Scenarios:

•

Net Zero Emiss

ions by 2050

scenario, which sets out a

narrow but achievable pathway for the global energy

sector to achieve net zero CO

emiss

ions by 2050.

•

Sustainable Development

scenario, which specif

ies a

pathway to ensure universal access to affordable, reliable,

sustainable energy by 2030 (SDG 7.1); substantial reduction

in air pollution (SDG 3.9) and effective action to combat

climate change (SDG 13).

•

Announced Pledges

scenario, which assumes that all

climate commitments made by governments around the

world, includ

ing Nat

ionally Determined Contribut

ions

(NDCs) and longer-term net zero targets, will be met in full

and on time.

NGFS Phase 2 framework:

This maps scenarios in three different worlds with two

scenarios produced under each category:

•

'Hot House' world

scenarios, also noted as ‘No Addit

ional

Polic

ies’,

include only currently implemented or pledged

polic

ies, wh

ich at a global level are insuff

ient to halt

sign

iﬁcant global warm

ing resulting in severe Physical Risk.

•

Orderly

scenarios assume climate polic

ies are

introduced

early and become increas

ingly str

ingent, with both physical

and transit

ion r

isks relatively subdued.

• Disorderly

scenarios explore higher Transit

ion R

isk due to

polic

ies be

ing delayed or being divergent across countries

and sectors.

Each of the three IEA and NGFS scenarios are characterised

by different levels of Transit

ion R

isk, driven by various features

in each scenario.

Assessing the resil

ience of our

strategy using scenario analysis

Standard Chartered

– Annual Report 2022

Strategic report

Features of the IEA and NGFS scenarios used in Standard Chartered scenario analysis

IEA

NGFS

Net Zero Emiss

ions

by 2050

Sustainable

Development

Announced

Pledges

Orderly

Transit

ion

Disorderly

Transit

ion

No Addit

ional

Polic

ies

Transit

ional R

isks

High

Moderate

Lim

ited

High

Lim

ited

Scenario object

ive

To show what is

needed to

achieve net zero

energy-related

and industr

ial

emiss

ions

by 2050

Explores

pathway to

achieve

universal

energy access

and meet goals

to combat

climate change

Show where

current NDCs

get world

towards 1.5⁰C

target –

highl

ights

ambit

ion gap

against Paris

Agreement

Early and

orderly

transit

ion

towards a

low-carbon

future

Delayed and

disorderly

transit

ion w

ith

global action

commencing

only in 2031

Physical risk is

high as no new

climate polic

ies

are introduced

beyond those

implemented

by end-2021.

Severe ﬂood

event assumed

in ﬁrst half of

2022

Temperature rise

1.5°C

1.7°C

2.1°C

1.6°C

1.8°C

3.0°C

Carbon price

2050

109

725

670

Oil price increase

(2050 vs 2021, %)

-62%

-29%

-9%

-13%

-9%

76%

Gas price increase

(2050 vs 2021, %)

-49%

-48%

-76%

-87%

-76%

¹ http://www.unepﬁ.org/wordpress/wp-content/uploads/2018/04/EXTENDING-OUR-HORIZONS.pdf

² http://www.unepﬁ.org/wordpress/wp-content/uploads/2018/07/NAVIGATING-A-NEW-CLIMATE.pdf

³ https://av.sc.com/corp-en/content/docs/emiss

ions-wh

itepaper.pdf

Low

High

Transit

ion R

isks

Physical Risks

High

Low

NGFS Disorderly

Transit

ion

NGFS Orderly

Transit

ion

IEA Net Zero

Emiss

ions

IEA

Sustainable

Develop-

ment

IEA

Announced

Pledges

NGFS Hot

House

World

Scenarios used in Standard Chartered Scenario Analysis

NGFS

IEA

International Energy Agency (IEA)

Network of Central Banks and

Supervisors for Greening the Financ

ial

System (NGFS)

The size of the bubble is ind

icat

ive of the gross expected losses

assessed for 53% of our corporate portfolio.

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Physical Risk Scenarios

Our Physical Risk tool, provided by Munich Re’s Location Risk Intelligence platform, uses standardised scenarios and set time

horizons to assess future risk from acute and chronic physical risks. The forward-looking risk ind

ices are der

ived based on the

RCP scenarios published by the IPCC. Given the academic challenges with forward-looking Physical Risk scenarios, it is not

possible at this point to customise these as we have done for Transit

ion R

isk scenarios.

Forward-looking physical risks, scenarios and time horizons used in our Physical Risk assessments

NATHAN climate hazard ind

ices

Descript

ion of current and projected cl

imate hazard scores

RCP Scenario

Time horizon

Tropical Cyclone (TC)

Tropical Cyclone zones

4.5, 8.5

2050, 2100

River Flood

River Flood zones

4.5, 8.5

2050, 2100

Sea-Level Rise

Sea-Level Rise zones

2.6, 4.5, 8.5

2100

Heat Stress

Heat Stress Index based on range of high-temperature ind

icators

2.6, 4.5, 8.5

2050, 2100

Precip

itat

ion Stress

Precip

itat

ion Stress Index based on heavy precip

itat

ion ind

icators

2.6, 4.5, 8.5

2050, 2100

Fire Weather

Stress

Climatolog

ical

index for wildf

ire hazard

2.6, 4.5, 8.5

2050, 2100

Drought Stress

Drought Stress Index based on Standardised Precip

itat

ion-

Evapotranspirat

ion Index (SPEI)

2.6, 4.5, 8.5

2050, 2100

Key scenario parameters that inform Group scenarios

Global carbon price

In the NGFS orderly transit

ion scenar

io, the global carbon

price rises progressively to above ~$700 by 2050 as the

transit

ion progresses. By contrast,

in the NGFS Disorderly

Transit

ion scenar

io, the global carbon price is very low

throughout the 2030s, and then rises steeply in line with the

extreme decarbonisat

ion effort requ

ired in the late 2030s

onwards. In the IEA scenarios, the global carbon price is

sign

iﬁcantly lower compared to NGFS scenar

ios and rises to

~$100 by 2050 only in the Net Zero Emiss

ions scenar

io.

Carbon prices can vary sign

iﬁcantly across reg

ions. In the

Middle East and North Africa, and Oceania and Asia Pacif

ic,

the trend of carbon prices in an orderly scenario is gradual

over the 30-year horizon, peaking at around $650. North

America and Europe on the other hand experience a more

rapid pick up in carbon prices between 2020 and 2025 to

approximately $250, after which they gradually increase to

reach a price of just under $900 by 2050.

100

200

300

400

500

600

700

800

USD2015/tCO

2022

2026

2030

2034

2038

2042

2046

2050

NGFS – Orderly Transition

NGFS – Hot House World

IEA – Net Zero Emissions

IEA – Sustainable Development

IEA – Announced Pledges

Global carbon price used in the NGFS and IEA scenarios

and applied at Standard Chartered

100

200

300

400

500

600

700

800

900

1000

USD2015/tCO

2022

2026

2030

2034

2038

2042

2046

2050

Europe

Middle East & North Africa

North America

Oceania Asia Paciﬁc

Regional carbon price used in the NGFS orderly transition

scenario and applied at Standard Chartered

Standard Chartered

– Annual Report 2022

Strategic report

Oil and gas

Oil demand varies depending on the scenario pathway

taken. In the NGFS 'Hot House’ world scenario, the oil

demand remains like the present day across the time

horizon, whereas in both NGFS Orderly and NGFS

Disorderly Transit

ion scenar

ios, oil demand begins to fall

after 2030 and drops by about half by 2050. By contrast,

in the IEA Announced Pledges scenario, the oil demand

shows a marginal decline to the present day, whereas

in both IEA Net Zero Emiss

ions and IEA Susta

inable

Development, oil demand begins to fall after 2030 and

drops by about half by 2050.

The oil price is expected to be impacted. Under both

NGFS Orderly and NGFS Disorderly Transit

ion, the o

price continues to increase steadily by 2050. In the NGFS

Disorderly scenario, there is an in

ial increase before

it peaks by 2030 and after which it follows the Orderly

Transit

ion scenar

io. In the ‘Hot House’ world scenario, the

oil price is expected to increase continuously to above

$100 by 2050. By contrast, in the IEA Announced Pledges

scenario, the oil price remains sim

ilar to the present day

across the time horizon, whereas in both IEA Sustainable

Development and IEA Net Zero scenarios, the oil price

continues to fall and drops by about half by 2050.

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

mboe (Million barrel of oil equivalent)/year

2022

2026

2030

2034

2038

2042

2046

2050

NGFS – Orderly Transition

NGFS – Hot House World

IEA – Net Zero Emissions

IEA – Sustainable Development

IEA – Announced Pledges

Global oil demand

5,000

10,000

15,000

20,000

25,000

30,000

mboe (Million barrel of oil equivalent)/year

2022

2026

2030

2034

2038

2042

2046

2050

NGFS – Orderly Transition

NGFS – Hot House World

IEA – Net Zero Emissions

IEA – Sustainable Development

IEA – Announced Pledges

Global gas demand

100

120

$2015/boe (barrel oil equivalent)

2022

2026

2030

2034

2038

2042

2046

2050

NGFS – Orderly Transition

NGFS – Hot House World

IEA – Net Zero Emissions

IEA – Sustainable Development

IEA – Announced Pledges

Global oil price

$2015/MMbtu (Million British thermal units)

2022

2026

2030

2034

2038

2042

2046

2050

NGFS – Orderly Transition

NGFS – Hot House World

IEA – Net Zero Emissions

IEA – Sustainable Development

IEA – Announced Pledges

Global gas price

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Lim

itat

ions

Despite the efforts in gathering data, sign

iﬁcant gaps st

ill

exist, and we have not been able to run a Transit

ion R

isk

scenario for CPBB. We have a plan to close these data gaps,

but it is likely to take several years, includ

ing per

iod

ically

working with third parties, use of proxies and engaging clients

to gather more informat

ion.

The impact of the scenarios has so far been based on a

simpl

iﬁed approach, pr

imar

ily focus

ing on the credit risk of

the Group’s portfolios, static balance sheets and conducted

at a counterparty level for CCIB clients and postcode level for

Consumer Mortgages. Sign

iﬁcant

increase in credit risk (SICR)

thresholds are not incorporated while estimat

ing cred

it risk

losses for climate scenario analysis.

Many of the assumptions and methodologies that underpin

scenario analysis rely sign

iﬁcantly on nascent methodolog

ies

as well as a dependence on ﬁrst generation external models

and data challenges. Most of these lim

itat

ions are shared

across the industry. Levels of disclosure, climate preparedness

and polic

ies to l

it em

iss

ions are often observed to be less

mature in some emerging market regions.

As more solution providers come to the market and banks

start extensively using them to build internal understanding

and capabil

ies, the transparency and sophist

icat

ion of

modelling methodologies and assumptions will likely increase.

Regional Power Generation

Power sector decarbonisat

ion

is not uniform across all

regions in our scenarios, reﬂective of current market

condit

ions and reg

ional need for energy. It also considers

that population growth and economies expand at different

rates.

Both the NGFS Orderly and NGFS Disorderly Transit

ion

scenarios are characterised by a highly decarbonised power

sector in 2050 with a sign

iﬁcant expans

ion in renewables.

Sim

ilarly, IEA Net Zero and IEA Susta

inable Development

scenarios show sign

iﬁcant expans

ion in renewables.

In the NGFS ‘Hot House’ world scenario, renewables are

projected to increase to meet the growing demand, while

the total hydrocarbon power production remains relatively

stable. Sim

ilarly,

in the IEA Announced Pledges scenario,

renewables increase to meet reduction in hydrocarbon

power production.

mboe/year

2020

NGFS - Hot House World

NGFS –

Orderly

Transition

NGFS –

Disorderly

Transition

IEA –

Net Zero

Emissions

IEA –

Sustainable

Development

IEA –

Announced

Pledges

2050

CHN EUR

IND NAM CHN EUR

IND NAM

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Other

Regional power production by energy mix used in the NGFS and IEA scenarios, applied by Standard Chartered Group

Wind

Solar

Oil

Nuclear

Hydro

Natural Gas

Coal

Bio Energy

Standard Chartered

– Annual Report 2022

Strategic report

Transit

ion and Phys

ical Risk scenario

analysis results

Modelled results demonstrate the clear beneﬁts of early

action to mit

igate cl

imate change.

The modelled results

across the IEA and NGFS scenarios have been carried out for

approximately 53 per cent of our corporate portfolio, primar

ily

reﬂective of the gross transit

ion r

isks, while client-level

transit

ion plans have not been factored

into the analysis.

Relatively lower loss estimates in the NGFS ‘Hot House’ world

and the IEA Announced Pledges scenarios reﬂect the nascent

modelling capabil

ies on assessing Physical Risk impact to

client asset locations, and second-order impacts such as on

the supply chain. The impact from each of the scenarios on

aggregate gross expected credit loss in the NGFS and IEA

scenarios is shown in the bubble charts on page 91.

In comparison to other stress tests conducted across our

portfolios, these estimates are relatively muted.

The result of the IEA Net Zero scenario is more crit

ical, w

ith

severe loss projection over a 30-year hor

izon compared to the

other two IEA scenarios. The increase in carbon price, drastic

decrease in oil and gas demand and oil price, along with the

emergence of a highly decarbonised power sector by 2050

impacts Oil and gas, Commodity traders and the

Transportation sectors.

The IEA Announced Pledges scenario shows the least severe

loss projection over a 30-year hor

izon. The scenario depicts a

neglig

ible

increase in carbon price and almost no change in oil

demand and price by 2050. The combinat

ion of these factors

results in a moderate loss project

ion.

The IEA Sustainable Development scenario depicts a

moderate increase in carbon price. Oil demand almost halves

and oil price reduces by ~30 per cent over current levels. The

combinat

ion of these factors results

in higher losses for the Oil

and gas, Commodity Traders and Automobile sectors.

The results for the NGFS Orderly Transit

ion scenar

io are driven

by an increase in carbon price and drop in oil and gas

demand. The steady increase in carbon price from 2021 to

2050 leads to an overall increase in defaults, driven by the

decrease in revenue and proﬁtab

ity levels due to an increase

in carbon price related costs.

By contrast, the NGFS Disorderly Transit

ion scenar

io sees

fast-growing carbon prices after 2030, which impacts

company Probabil

ity of Defaults (PDs) and leads to an

increase in loss project

ions. The Commod

ity Traders, Oil and

gas and Automobiles sectors are the most impacted in this

scenario.

The concentration of the Group’s portfolio exposure for the

top eight resident

ial mortgage portfol

ios exposed to extreme

sea-level rise risk was computed using the Munich Re model’s

outputs. It has been observed to remain stable at 2 per cent

for RCP 4.5 and 8.5 scenarios and at 1 per cent under the RCP

2.6 scenario.

Developing our capabil

ies

We have ident

iﬁed several areas for future development:

•

Improved data availab

ity and abil

ity to gather data across

our corporate and retail clients (e.g. client-level emiss

ion

intens

ity, phys

ical locations of assets, power consumption

patterns). Through our client-level climate risk

questionna

ires (cover

ing approximately 65 per cent of our

total corporate exposure in 2022) we gather informat

ion on

client-level transit

ion plans,

includ

ing potent

ial client

outreach for clients with high Transit

ion R

isk and low

transit

ion m

igat

ion levels.

•

Continued improvement in scenario design and modelling

capabil

ies, with an established roadmap to develop this

capabil

ity

in-house and build internal models.

•

In line with plans to develop internal modelling capabil

ies,

engage an external vendor and/or partner with our

academic adviser (Imperial College London) to design a

range of scenarios (e.g. short-term, bespoke scenarios

targeted to our portfolios and markets, and considerat

ion

of second-order impacts).

•

Despite these lim

itat

ions, our intent

ion

is to focus on how

Climate Risk management can inform portfolio

management and support opportunity ident

iﬁcation w

ith

clients on their transit

ion and adaptat

ion pathways.

Qualitat

ive rev

iew of climate risks and

opportunit

ies

in annual business strategy

and ﬁnancial plann

ing

In 2022, Climate Risk was considered as part of our formal

annual corporate strategy and ﬁnancial plann

ing process.

In addit

ion, we developed management scenar

ios with an

aim of strengthening our business strategy and ﬁnanc

ial

planning to support the Group’s net zero journey.

We use both qualitat

ive and quant

itat

ive aspects focus

ing on

revenue reliance from clients in high-carbon sectors and/or

locations in regions most exposed to Physical Risk, consider

ing

adequacy of mit

igat

ion plans. Where applicable, results are

then independently reviewed by regional and client-segment

Chief Risk Ofﬁcers (CROs) and the Climate Risk team. Climate

Risk impact is also included in the Risk review of our corporate

plan, which is considered by the Board as part of their

approval of the overall Corporate Plan. The 2023 Corporate

Plan includes an increase in loan impa

irment due to the

impact from Climate Risk.

In most cases, the physical and transit

ion r

isks ident

iﬁed were

assessed to be well controlled in the short term. We are not

actively targeting growth in most of the high-carbon sectors

and are instead prior

ing susta

inable ﬁnance products to

clients in high-carbon sectors to decarbonise their business

models. Growth ambit

ion

is shift

ing to lower-carbon sectors

such as clean technology. Our sustainable ﬁnance prior

ies,

includ

ing new emerg

ing products such as sustainable

deposits, carbon trading and ESG Advisory, and dedicated

transit

ion frameworks, seek to respond to trans

ion r

isks in the

short term, strengthening our resil

ience towards a 2°C or lower

transit

ion scenar

io. However, longer-term transit

ion r

isks were

highl

ighted, part

icularly for the Africa and Middle East (AME)

region, given its dependency on fossil fuels; and longer-term

physical risks were deemed to be most relevant for the Asia

region.

The modelled results across the IEA and NGFS scenarios have been carried out for approximately 53% of our corporate portfolio reﬂective of primar

ily the gross

transit

ion r

isks while client-level transit

ion plans have not been factored

into the analysis. Relatively lower loss estimates in the NGFS ‘Hot House’ world scenario

and the IEA Announced Pledges scenario reﬂect the nascent modelling capabil

ies on assessing Physical Risk impact to client asset locations and second-order

impacts such as that on the supply chain. The impact from each of the scenarios on aggregate gross expected credit loss in the NGFS and IEA scenarios is shown

in the bubble charts on page 91. In comparison to other stress tests conducted across our portfolios, these estimates are relatively muted.

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

We are exposed to Climate Risk through our

clients, our own operations and from the sectors

and markets we support.

Preparations to manage Climate Risk as a Prudential Financ

ial

risk began in 2019. At that time, our Group Chief Risk Ofﬁcer

took responsib

ity for Climate Risk and the requirements set

out in the Prudential Regulation Authority's Supervisory

Statement 3/19. Climate Risk was also incorporated into our

Group-wide risk taxonomy through the ERMF (where it is

deﬁned as ‘the potential for ﬁnanc

ial loss and non-ﬁnancial

detriments aris

ing from cl

imate change and society’s

response to it’).

Since then, we have designed an approach that begins to

integrate Climate Risk with other Princ

ipal R

isk Types (PRTs)

with

in our central ERMF, based around two pr

inc

iples:

•

Treat Climate Risk like a tradit

ional r

isk type.

Climate Risk

may lead to ﬁnancial losses and non-ﬁnancial detr

iments,

much like Credit Risk, and should be managed as such to

lim

it the Group’s exposure to detr

iments. This means

embedding Climate Risk considerat

ions

into our exist

ing r

isk

ident

iﬁcation and management processes, governance,

reporting, scenario analysis (includ

ing stress test

ing),

strategy and ﬁnancial plann

ing.

•

Recognise and build for where Climate Risk is different.

Unlike tradit

ional r

isk types, Climate Risk is likely to crystallise

over much longer time horizons and is inherently diff

icult to

quantify. Its unique features and a need for granular

forward-looking measurements require the use and

development of new tools and methodologies to quantify

and analyse the impl

icat

ions.

Climate Risk

The potential for ﬁnanc

ial loss and non-ﬁnancial detr

iments aris

ing

from climate change and society’s response to it.

Sub-risk types

Physical Risk

Risks aris

ing from

increas

ing sever

ity and frequency of climate- and weather-related events.

These events can damage property and other infrastructure, disrupt business supply chains,

and impact food production. This can reduce asset values, potentially resulting in lower

proﬁtabil

ity for companies. Indirect effects on the macroeconomic environment, such as

lower output and productiv

ity, exacerbate these d

irect impacts.

Acute

Specif

ic event-dr

iven weather events, includ

ing

increased severity of extreme weather

events, such as cyclones, hurricanes, ﬂoods or wildf

ires.

Chronic

Longer-term shifts in climate patterns, such as changing precip

itat

ion patterns, sea-level

rise, and longer-term drought.

Transit

ion R

isk

Risk aris

ing from the adjustment towards a carbon-neutral economy, wh

ich will require

sign

iﬁcant structural changes to the economy. These changes w

ill prompt a reassessment

of a wide range of asset values, a change in energy prices, and a fall in income and

creditworth

iness of some borrowers. In turn, th

is entails credit losses for lenders and

market losses for investors.

Climate Risk is considered an Integrated Risk Type because it manifests though impacted Princ

ipal R

isk Types (PRTs) or

overarching risk types. Princ

ipal r

isks are those risks that are inherent in our strategy and business model and are also formally

deﬁned in the ERMF. We have ident

iﬁed seven PRTs that are most mater

ially impacted by potential climate risks and describes

transmiss

ion channels for Cl

imate Risk manifest

ing as ﬁnancial and non-ﬁnancial r

isk.

Climate Risk taxonomy

Mit

igat

ing the ﬁnanc

ial and non-ﬁnancial

risks from climate change

Standard Chartered

– Annual Report 2022

Strategic report

Exist

ing r

isk classif

icat

ion and Climate Risk transmiss

ion channels

in the context of the Group’s exist

ing r

isk types.

Credit

CCIB

Disrupt

ion to cl

ient business

models or operations

from both Transit

ion

and Physical Risk events

may increase operating

expenditure as well as cause

disrupt

ion to revenue. A

client’s proﬁtab

ity can

be impacted due to a

reduced demand in high-

carbon products or services,

impacted asset/collateral

valuations and increas

ing

capital expenditure driven

by regulatory carbon

penalties and investment in

new technology aimed at

encouraging transit

ion to a

low-carbon economy. The

impact to proﬁtab

ity can

thereby affect their capacity

to generate the income

required to repay debt, or

the capital and collateral

required to back the loan.

Credit

CPBB

Physical risks, such as ris

ing

sea levels and increas

ingly

severe ﬂood events, could

damage property and

impact collateral valuations,

or through direct damage

or loss of insurance, could

also adversely affect

repayment abil

ity and

leading to potential

increases in credit losses.

Furthermore, increased

default risk and losses may

arise through changes to

the economic environment

as the economy transit

ions

towards lower emiss

ions.

Compliance

Risk of fail

ing to comply w

ith

current and emerging Climate

Risk regulations globally.

For example, the Prudential

Regulation Authority’s

Supervisory Statement SS3/19

and the Monetary Authority

of Singapore’s Environmental

Risk Management guidel

ines.

Reputational

and Sustainab

ity

Potential for stakeholders to

view the Group negatively

due to actual or perceived

actions or inact

ions related to

our stated climate, ESG and

net zero ambit

ion. Increas

ing

expectations on banks from

governments, regulators,

NGOs, investors and

ind

iduals brings heightened

reputational risks.

Traded

Acute Physical Risk events

or an extremely disrupt

ive

transit

ion can cause sudden

changes in the fair value of

assets driven by commodity

price changes. Addit

ional

impact may result due to

trigger sales, sudden and

negative price adjustments

where Climate Risk is not yet

incorporated into prices.

Country

Climate-related risks may

adversely impact sovereigns'

economic strength and

impact their abil

ity to ra

ise

taxes and increase their

cost of borrowing, directly

impact

ing the

ir overall

creditworth

iness. Phys

ical

risks from increas

ing

frequency and severity of

extreme climate change-

related weather events may

lead to the degradation

of exist

ing

infrastructure,

large-scale disrupt

ions,

displacement of assets

and mass migrat

ion, wh

ile

transit

ion r

isk arises from

a sovereigns' efforts to

transit

ion towards a low-

carbon economy which

leads to policy, market

and technology shocks.

Treasury

Disrupt

ion from weather

events and adverse impacts

due to the transit

ion to a

low-carbon economy, on

client business models and

ﬁnancial stab

ity of cl

ients

that provide us liqu

ity, can

impact capital adequacy

and/or liqu

ity levels needed

to ensure ﬁnancial stab

ity

during periods of stress.

Operational

and Technology

Climate-related risks

manifest when acute or

chronic physical risks,

such as ﬂooding or storms

disrupt our own properties

(includ

ing branches,

ofﬁces, data centres), client

service resil

ience, th

ird-

party corporate service

arrangements and material

supply chain arrangements.

Climate Risk manifests through exist

ing r

isk types

Princ

ipal R

isk Types:

Financ

ial

Non-ﬁnancial

Physical Risk

Transit

ion R

isk

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Across each risk type, we provide some early-stage prototype

metrics that provide quantitat

ive est

imates of gross transit

ion

and gross physical risks using the toolkits explained above

and are used to inform risk management for each of the PRTs

integrated with climate-related risks. Depending on the PRT,

metrics are used for risk-management activ

ies and processes

spanning across stress testing, transaction assessments, client

reviews, portfolio assessments, risk-appetite metrics and

management informat

ion. For all the metr

ics presented, there

are challenges with availab

ity of reliable data, and

methodologies that are simpl

ist

ic and ﬁrst-generation,

placing some reliance on proxy informat

ion. As

methodologies and learnings emerge, we intend to

progressively reﬁne and update our approach, and to extend

the coverage of client or product groups captured.

Our climate toolkit – processes for ident

ify

ing

and assessing Climate Risk

While the outputs and ﬁnd

ings

inform our risk management

decis

ions,

it is important to be aware of the lim

itat

ions when

assessing Climate Risk. Approaches to quantify

ing Cl

imate

Risk are nascent and data availab

ity and coverage present

challenges. This is particularly true in emerging markets where

Climate Risk-related disclosure and preparedness can be less

advanced. This places some reliance on proxy informat

ion

and we will reﬁne our evaluations and methodologies

progressively as the availab

ity and quality of data improves.

To enable us to gather more data and manage and monitor

Physical and Transit

ion r

isks actively, we continue to conduct

case level reviews for enhanced due dil

igence on h

igh ‘Climate

Credit’ and ‘Climate and RSR’ for our corporate clients.

The toolkits are used to ident

ify and assess:

•

Physical Risk:

current-day and longer-term time horizons

(2050, 2100) under representative concentration pathway

(RCP) scenarios 2.6, 4.5 and 8.5, for acute weather events

(e.g. storms, ﬂoods or earthquakes) and chronic sea-level

rise.

•

Transit

ion R

isk:

translates orderly, disorderly and ‘hot-house’

world transit

ion scenar

io variables from NGFS and Net

Zero Emiss

ions by 2050, Susta

inable development and

announced pledges scenario variables from IEA to ﬁnanc

ial

impact at a client level. See page 94 for more detail on how

we use these scenarios and their lim

itat

ions.

• Temperature alignment:

provides a temperature score to

ind

icate cl

ient- and portfolio-level global warming potential

up to 2030.

Standard Chartered

– Annual Report 2022

Strategic report

Overview of our Climate Risk toolkit and applicat

ion

Advisor or

Data Provider

Asset Class or

Operations

Metrics

Scope

Time Horizon

Scenario

Applicat

ion

Munich RE

• Corporate

• Retail mortgages

• The Group’s ofﬁces,

branches and data

centres

Location-based

hazard and risk

scores

• Tropical Cyclone

• River

• Flood

• Sea-Level Rise

• Heat Stress Index

• Precip

itat

ion Stress Index

• Fire Weather Stress

(climatolog

ical

index)

• Drought Stress Index

Current day,

2050, 2100

RCP 2.6, 4.5, 8.5

Assessing Physical

Risk for:

1. Client assets and operating

locations as well as property

collateral.

2. Retail mortgages – portfolio

concentrations by hazard type.

3. The Group’s location strategy for

operations – branches, ofﬁces and

data centres, other sites.

4. The toolkit also helps inform the

Group’s risk appetite across all risk

types.

BlackRock

• Corporate

Temperature

Alignment

• Generate a company’s

TA score to measure its

impact on the climate

through a dedicated

methodology

2030

2 degrees only

Reputational and Sustainab

ity Risk

assessment for CCIB clients in high

carbon-emitt

ing sectors

BlackRock

• Corporate

• Sovereigns

• Financ

ial

impact

• Equity

valuations

• Sovereign bond

valuations

• Using Standard

Chartered data and

conﬁgurations, run

BlackRock’s Aladdin

Climate Transit

ion R

isk

models to translate

transit

ion scenar

variables to impact on

company ﬁnancials and

probabil

ies of default

Up to 2050

Scenarios for

categories

orderly,

disorderly and

hot-house

world, e.g.

NGFS Phase 2,

IEA

Transit

ion R

isk assessments over

various scenarios for corporate and

sovereign clients are used for:

1. Client-level reviews as part of credit

decis

ion-mak

ing.

2. Portfolio concentration measures

includ

ing R

isk Appetite.

3. Scenario analysis and stress testing.

S&P Global

• Provides addit

ional

climate data

Emiss

ions

informat

ion across

clients (includ

ing

history)

Corporate client

asset-location

data

Absolute emiss

ions (tonnes

of CO

e) and emiss

ions

intens

ies by revenue

(tonnes of CO

e/$ mill

ion)

for Scope 1 and 2 and

where available for Scope

3 emiss

ions.

(Client-level emiss

ions were

only available for about

37 per cent of corporate

clients, so sector average

proxies were used for the

remain

ing ent

ies.)

Geolocation for clients

Current Day

and Histor

N/A

Inputs into the Group’s client-level risk

assessment for corporate clients and

net zero modelling.

Imperial

College

London

• Academic advisory

and research

partnership

1. Long-term research on Climate Risk.

2. Advisory on shorter-term, internally focused

projects to enhance Climate Risk capabil

ies.

3. Train

ing and educat

ion of our colleagues,

Management Team and Board.

N/A

1. The Group has partnered with

Imperial College London to produce

a three-part series on ‘Future of Food’

research, exploring the risks and

opportunit

ies fac

ing the global

agricultural sector from climate

change.

Deloitte

• Corporates

• Sovereigns

Forecasting the

ﬁnancial

impact

• Transit

ion R

isk

• Physical Risk

• Climate scenario

expansion

Up to 2050

NGFS scenarios

for orderly

transit

ion,

disorderly

transit

ion, and

hot-house

world

We are developing our own internal

Climate Risk models to reduce

reliance on vendor models and

increase transparency and control in

the assessment of the impact of

Climate Risk.

Once the models have gone through

our model risk management

governance and approval process,

the outputs will be used to support

management in their assessment of

the impact of climate risk on IFRS 9

expected credit losses, stress testing

runs, and related risk management

processes.

The inclus

ion of the Aladd

in Climate analytics, provided by BlackRock, contained in this report should not be construed as a characterisat

ion regard

ing the

material

ity or ﬁnancial

impact of that informat

ion. The Aladd

in Climate analytics include non-ﬁnanc

ial metr

ics that are subject to measurement uncertaint

ies

resulting from lim

itat

ions inherent in the nature and the methods used for determin

ing such data.

The Aladdin Climate analytics are not ﬁxed and are likely to change and evolve over time. The Aladdin Climate analytics rely on comparatively new analysis and

there is lim

ited peer rev

iew or comparable data available. BlackRock does not guarantee and shall not be responsible for the content, accuracy, timel

iness,

non-infr

ingement, or completeness of Aladd

in Climate analytics contained herein or have any liab

ity resulting from the use of the Aladdin Climate analytics in

this report or any actions taken in reliance on any informat

ion here

in. Some results are disclosed in this report to illustrate our steps in beginn

ing to quant

ify the

impact of Climate Risk. We fully intend to develop and mature our applicat

ion of Cl

imate Risk assessment over the coming years.

Physical Risk

Transit

ion R

isk

100

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Process to embed Climate Risk considerat

ions

Princ

ipal R

isk

Type

Framework/

Polic

ies/

Standards

Risk

Appetite

Reporting

Further Details

Credit Risk

– CCIB

(Effective

July 2022)

•

The Climate Risk Standard, effective from 1 July 2022, mandates all new and

exist

ing corporate cl

ients (CG 1-12) with an advised lim

it greater or equal to

$20m to be assessed for Climate Risk considerat

ions.

•

A new technology solution called the ESG Navigator has been deployed to

assess Climate Risk considerat

ions for all

in scope clients since July 2022.

•

Throughout 2022 we have covered ~80 per cent of high Transit

ion R

isk sectors

(i.e. Oil and gas, Min

ing and Power) and ~65 per cent of the Group’s total

corporate exposure.

•

By 2023, we aim to achieve 80 per cent coverage of the Group’s total

corporate exposure and extend Climate Risk-related considerat

ions to

deepen credit underwrit

ing and broaden l

inkages, account management and

client engagement.

Credit Risk

– CPBB

•

In our progress for 2022, we have expanded Physical Risk assessments to

addit

ional markets w

ith

in Consumer Mortgage (Bangladesh, V

ietnam, Jersey)

and new products (Business Banking Client Mortgage) and Medium

Enterprises (ME). These are over and above the Top 8 markets for the Group

covered in 2021.

•

The metrics are refreshed on a quarterly basis and reported to key governance

committees.

Country Risk

•

Our methodology for Physical and Transit

ion R

isk Sovereign Rankings now

includes external benchmarks as key inputs and factors in Transit

ion R

isk

mit

igat

ion measures being put in place by sovereigns.

•

We have partnered with Imperial College to develop Physical Risk Report

Cards for key sovereigns in Asia, which provide a detailed breakdown of the

scores, along with key takeaways and histor

ic cl

imate disaster statist

ics. We

intend to expand this to other countries.

Reputational

and

Sustainab

ity

Risk

•

Adherence to net zero RA thresholds for our Phase 1 high-carbon sectors will

be monitored as part of management informat

ion. The Cl

imate Risk Decis

ion

Framework (CRDF) which helps assess climate-related reputational risk for

clients in high transit

ion sectors

is now embedded with

in the Group

Reputational Risk Standards. The framework details a set of referral triggers

to the Group Climate Risk team to consider for enhanced due dil

igence and

rating change methodology.

•

We aim to become net zero in our ﬁnanced emiss

ions by 2050 and have set

inter

im targets for spec

ic h

igh-carbon sectors. This will be extended to other

sectors through 2023.

Operational

and

Technology

Risk

In-progress

•

All new property sites onboarded with

in the Group are assessed for Phys

ical

Risk vulnerabil

ies. Material Third-Party Corporate Service arrangements in

scope for Business Continu

ity Management controls are subject to Cl

imate

Risk assessment as part of third-party continu

ity plans.

Traded Risk

(Effective

May 2022)

•

The Traded Risk stress testing framework has been updated to cover market

impacts from Climate Risk includ

ing an assessment of Trans

ion R

isk and two

Physical Risk scenarios as part of the global Traded Risk scenarios inventory.

These ﬂow into exist

ing Traded R

isk Board-level RA metrics.

Compliance

Risk

•

We have an established process to mainta

in overs

ight of climate risk-related

regulations across footprint markets centrally.

Treasury Risk

•

We consider Capital requirements as part of the Group Internal Capital

Adequacy Assessment Process (ICAAP). On the liqu

ity side, we have

leveraged our client-level Climate Risk assessments to assess climate risk-

related vulnerabil

ies and readiness of our top corporate liqu

ity providers.

Relevant Framework/Polic

ies/Standards, RA metr

ics and Risk Reporting are available/implemented.

2 Integral component of the ERMF.

Plans are in place to integrate Climate Risk into the Framework/polic

ies/standards, RA and R

isk Reporting.

4 Plans to integrate Climate Risk into the Framework/polic

ies/standards, RA and R

isk Reporting will be developed.

Processes for managing Climate Risk

Integrating climate-related risks into

overall risk management

Climate Risk is recognised in the Group ERMF as an

integrated risk type, i.e. it manifests through exist

ing r

isk

types and is managed in line with the impacted risk type

frameworks. We manage Climate Risk according to the

characterist

ics of these PRTs and are embedd

ing climate-risk

considerat

ions

into the relevant frameworks and processes

for each. In 2022, we have continued to build Climate Risk

into exist

ing r

isk-management processes, to enhance our

abil

ity to

ident

ify, assess and mon

itor across risk types.

We continuously look for ways to reﬁne and update our

approach as methodologies and learnings emerge, includ

ing

the expansion of client or product coverage where possible.

The areas where we have made progress to embed Climate

Risk considerat

ions w

ith

in bus

iness and across PRTs are listed

below.

101

Standard Chartered

– Annual Report 2022

Strategic report

Assessment of gross Physical Risk proﬁle for Consumer Mortgages showing outstanding exposure subject to very high gross

Physical Risk

Outstanding exposure at very high gross Physical Risk %

Physical risk event

Korea

Hong Kong

Taiwan

India

Malaysia

Singapore

UAE

Indonesia

Others

Globally

Flood (Acute)

14%

45%

12%

23%

30%

21%

52%

26%

Sea-level rise

(Chronic – RPC 8.5)

36%

Data as of Sep 22

A deeper dive into each risk type is provided in the

following section.

Credit Risk

For many banks, Credit Risk presents the largest proportion of

risk they face on their books. The industry has developed

sophist

icated management frameworks, wh

ich provide a

baseline level of effective mit

igat

ion from risks. However, these

industry-wide, exist

ing processes have not yet evolved to

account for the unprecedented level and type of risk that

climate change brings, and addit

ional cl

imate risk-specif

analysis is required as the tools and methodologies mature.

Consumer, Private and Business Banking (CPBB) Credit Risk

For CPBB, we have made progress in embedding Climate Risk

into mainstream portfolio management in 2022. Our

approach is currently more advanced for the Consumer

Mortgage business, which is CPBB’s largest portfolio and for

which there are ident

iﬁable and measurable r

isks applicable

to the resident

ial property collateral. Across CPBB, our r

isk

ident

iﬁcation and measurement focuses on acute and

forward-looking physical risks (storm, ﬂood, wildf

ire, and

sea-level rise) across key markets.

In 2021, this covered approximately 65 per cent of the total

CPBB consumer business book. In 2022, this was expanded to

three addit

ional markets for Consumer Mortgages and select

markets for other CPBB products (Business Banking Client

Mortgages and Medium Enterprises, representing 3 per cent

and 1.6 per cent of the consumer business book respectively).

We use the output of the Physical Risk assessments of our

Consumer Mortgage property locations to inform discuss

ions

during our credit portfolio quarterly reviews, and to

period

ically mon

itor concentration exposure to the perils

ident

iﬁed above.

With

in the Consumer Mortgage bus

iness, we have developed

internal guidance on physical Climate Risk management for

all our markets. The recommendations covered through this

include the establishment of a zoning policy with

different

iated cr

iter

ia accord

ing to the level of exposure

concentration to physical risk, the setting of risk mit

igat

ions

where appropriate, as well as accounting for government-led

adaptation measures on Physical Risk if it has not been

considered before. A key design step has been to set up the

framework for a holist

ic approach, cater

ing for market forces

when establish

ing the zon

ing policy, includ

ing the sett

ing of

appropriate trigger monitor

ing and escalat

ion measures.

We currently offer different

iated loan-to-value for select ESG

focused structured products, which align with the Bank’s

Green and Sustainable Product Framework.

The focus for 2023 will be to further develop our approach for

assessing the physical and transit

ion

impact of unsecured

consumer lending products such as credit cards and personal

loans and in

iate work on measuring Transit

ion R

isk

vulnerabil

ies of our Consumer Mortgage portfolios. We aim

to util

ise prox

ied ﬁnanced emiss

ions for our key markets to

begin model transit

ion r

isk for consumer mortgages. We

recognise that the data lim

itat

ion will continue to persist given

the lack of property-level data on energy consumption and

lim

ited energy label coverage

in the key markets we operate

in. To improve the accuracy of our ﬁnanced emiss

ions

measurement capabil

ies, we partnered with Imperial

College to reﬁne our energy consumption derivat

ion

methodology, includ

ing the enhancement of our em

iss

ions

factor database for major markets.

We undertake quarterly scenario analysis for the eight key

Consumer Mortgage portfolios, focusing on sea-level rise

across 3 RCPs (2.6, 4.5, 8.5) in the year 2100.

102

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– Annual Report 2022

Strategic report

Sustainab

ity

Analysis of Consumer Mortgage portfolio showing outstanding exposure subject to very high gross Flood Risk

Physical risk event

Korea

Hong Kong

Taiwan

India

Q4-21

Q3-22

Trend

Q4-21

Q3-22

Trend

Q4-21

Q3-22

Trend

Q4-21

Q3-22

Trend

Flood (Acute)

14.2%

13.8%

45.0%

11.6%

11.8%

22.0%

23.0%

Physical risk event

Malaysia

Singapore

UAE

Indonesia

Q4-21

Q3-22

Trend

Q4-21

Q3-22

Trend

Q4-21

Q3-22

Trend

Q4-21

Q3-22

Trend

Flood (Acute)

6.0%

5.7%

2.8%

3.1%

30.1%

30.4%

19.7%

20.5%

Note: Increase is called out for markets showing a rise of >5% year-on-year in ﬂood risk exposure concentration.

Caution about the metrics

The metrics are based on outputs from Munich Re’s natural

catastrophe model and the results do not factor in exist

ing

adaptation measures, governmental polic

ies to protect and

build for changing weather, and structural adaptation (e.g.

age and quality of construction, or ﬂood defences and dams

protecting the property). Over time, sovereigns and

policymakers are expected to drive market trends such as

investment in adaptation ﬁnanc

ing, technolog

ical

advancements, innovat

ive r

isk transfer and mit

igat

ion

approaches to combat the potential impacts of climate

change. Presently, we do not see any sign

iﬁcant stress over the

short-term horizon on account of Physical Risk in our Consumer

Mortgage and Business Banking Mortgage portfolios.

Corporate, Commercial and Institut

ional

Banking (CCIB) Credit Risk

Our client-level Climate Risk Questionna

ire (CRQ) helps us

assess the potential ﬁnanc

ial r

isks from climate change using

both quantitat

ive and qual

itat

ive

informat

ion across ﬁve key

pillars. The assessment presents a consolidated view of how

the ind

idual company has performed with regards to overall

Climate Risk, how it sits with

in the sector as well as a reg

ional

view against benchmarks.

Physical Risk for our corporate client locations is assessed

using Munich Re’s NATHAN tool, which helps us evaluate

the impact from current and acute risks of operating asset

locations as sourced from S&P's Trucost asset location data.

A view of Transit

ion R

isk across a variety of global transit

ion

pathways is derived using a climate change scenario

modelling tool as well as a temperature alignment tool.

We have also ident

iﬁed relevant cl

imate policy inputs

at a sector and regional level and assessed the specif

impact timeframe that an entity may face, to provide an

understanding of Transit

ion R

isk applicable to each client.

Their outputs are fed into our client-level Climate Risk

Questionna

ires (CRQ) to help to create a mult

i-dimens

ional

consolidated assessment of Climate Risk.

By the end of 2022, we had embedded assessments in our

exist

ing cred

it process for clients covering approximately

85 per cent of high Transit

ion R

isk sectors (i.e. Oil and gas,

Min

ing and Power) and 65 per cent of the Group’s total

corporate exposure (c. 2,100 clients assessed).

Where climate change is expected to manifest into a ﬁnanc

ial

risk in the near-term, we may ﬁnd it appropriate to apply

warning signals, such as risk triggers through an enhanced

due dil

igence conducted by the Group Cl

imate Risk and

Credit Risk teams. In 2023, we intend to look at implement

ing

guidance to allow adjustments to credit grading scorecards

and addit

ional mon

itor

ing mechan

isms, for example through

our Early Alert process. One of our key focus areas is to develop

a pilot framework to help inform these credit decis

ions and we

aim to embed this framework by December 2023.

103

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– Annual Report 2022

Strategic report

Data as of Nov 22

Our Climate Risk client-level assessment for Credit Risk and data sources

In 2023, we aim to refresh exist

ing assessments as well as

expand our coverage to c.4,000 clients covering 80 per cent of

the overall corporate net nominal exposure. Addit

ionally, as

part of our ongoing agenda to accurately measure the total

impact from Climate Risk, we have started to develop an

approach for assessing the Climate Risk of our clients’

collateral across property, shipp

ing and av

iat

ion and w

ill

begin incorporating this into our Climate Risk assessments

when ﬁnalised. For the sh

ipp

ing and av

iat

ion sectors, we

assess the vulnerabil

ity to trans

ion r

isk of the underlying

collateral asset itself (aircraft or carriers), whereas for property

collateral, Physical risk related vulnerabil

ies are prior

ised.

The client assessments not only help form a view of the overall

Climate Risk vulnerabil

ies and readiness for clients but

provide a tool for data gathering and analysis of the

underlying themes that drive Climate Risk and its mit

igat

ions.

The following section gives ins

ights ga

ined from all completed

Client Risk assessments performed over 2022 (2,100 entit

ies

covering approximately 65 per cent of corporate net nominal

exposure), compared with the previous year (covering 1,940

entit

ies), to h

ighl

ight the d

irect

ion of travel across our portfol

io.

The charts ind

icate the percentage of cl

ients with

in our

assessed portfolio performing Climate Risk management

activ

ies.

Governance and

Disclosures

Identify any

acknowledgment

of climate change

related risks in public

reports, deﬁned

targets, management

incent

ives al

ignment

with Climate Risk, TCFD

aligned disclosures.

It helps to review

the level of Climate

Risk management a

company has in place,

as well as assess how

the market can perceive

their sophist

icat

ion of

climate disclosures.

TCFD disclosures, CDP,

ESG, Sustainab

ity

reports, annual reports

Standard Chartered’s corporate client Climate Risk assessment framework

Data sources

Gross Physical

Risk

Modelled output to

assess the current day

and forward-looking

risks to client’s operating

locations across a

number of climate

related hazards.

S&P (asset level data),

Climate Change

Scenario Model and

Munich Re’s NATHAN &

Climate tool

Physical Risk

Adaptation

Acknowledgment and

assessment of Physical

Risk to client’s business,

its supply chain and on

assets from a forward-

looking perspective,

quantif

icat

ion of

Physical Risk impact,

adaptation measures

to date, adaptation

measures in plan,

includ

ing

insurance

coverage.

TCFD disclosures, CDP,

ESG, Sustainab

ity

reports, annual reports

Gross Transit

ion

Risk

Identify Transit

ion R

isk of

a company based on

the client’s reliance on

fossil fuels as part of

product/service mix,

potential ﬁnanc

ial

impact under various

climate scenarios as well

as potential macro and

micro-climate risks via

the tracking of climate

transit

ion pol

ies across

all footprint regions and

sectors. Addit

ionally, we

look at how the entity

performs across these

areas, with respect to

the average of the

sector in which they

operate, to ident

ify

divergences from sector

transit

ion expectat

ions.

S&P for client-level

emiss

ions data,

temperature alignment

model and climate

change scenario model

Transit

ion

Risk Mit

igat

ion

Acknowledgement of

Transit

ion R

isk and a

display of credib

ity of

a client’s business and

supply chain focused on

assessing their emiss

ions

reporting, emiss

ions

reductions targets and

progress, plans to reduce

reliance on fossil fuels,

capital expenditure

or investment in low

carbon technologies,

adaptabil

ity for change

in consumer demand as

well as strategy plans

towards implement

ing

internal carbon pric

ing

or other offset related

mechanisms.

TCFD disclosures, CDP,

ESG, Sustainab

ity

reports, annual reports

104

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– Annual Report 2022

Strategic report

Sustainab

ity

Governance and disclosures

This pillar of our client assessment seeks to understand how

climate-related responsib

ies are managed w

ith

in an

organisat

ion w

ith a stronger score ind

icat

ing a greater degree

of client readiness. Two-thirds of clients now acknowledge

Climate Risk as a ﬁnanc

ial r

isk to their direct operations and/

or supply chain, while only 58 per cent have a quantif

iable

climate policy or commitment in place. These have both

increased since our 2021 assessment, reﬂecting an increase in

our coverage, as well as a posit

ive movement from compan

ies

to disclose their climate-related risks, moving to over half of

assessed clients.

Transit

ion R

isk readiness

This pillar of the CRA covers the intent, progress and

capabil

ity of the cl

ient to mit

igate the r

isks in transit

ion

ing to

a net zero economy. There has been a drop in the percentage

of clients reporting Scope 1, 2 & 3 emiss

ions. Desp

ite this, the

number of clients that have set Scope 1, 2 & 3 emiss

ions

reduction targets has grown, showing a posit

ive trend

towards setting quantif

iable comm

itments to action against

climate change. This is encouraging as it shows quantif

iable

steps taken by corporates to act on their transit

ion plans.

Physical Risk readiness

Through this pillar, we are seeking to assess if clients have

quantif

ied the ﬁnancial

impact of physical risks and

understand if they are taking proportionate adaptation

actions.

We have seen a posit

ive movement

in the number of clients

acknowledging the impact that physical risks could have on

their direct operations, up to 54 per cent, while those adopting

adaptation measures against these risks has only climbed by 1

per cent. This is not surpris

ing, as we have seen l

ittle progress

in industr

ies towards phys

ical adaptation measures given the

long-term and large-scale nature of mit

igants.

Acknowledges

limate risks in annual/

SG reporting

67%

64%

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

55%

58%

49%

55%

29%

32%

37%

29%

33%

29%

Has quantiﬁable

climate policy

or commitment

Has board

member with

climate oversight

Have management

incentives linked

to climate

Has TCFD-aligned

disclosures

Discloses to

CDP

Reports Scope 1 & 2

emissions

Percentage of clients in scope

Reports Scope 3

emissions

Has transition plan

to meet current or

future regulations

Has made plans for

investment in low-

carbon technologies

Has Scope 1 & 2

reduction targets

Has Scope 3

reduction targets

Client performs

ﬁnancial transition

scenario analysis

61%

71%

52%

61%

43%

54%

49%

35%

17%

13%

21%

23%

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

Acknowledges

Physical Risk

Assessed

Physical Risk

Have taken

adaptation measures

to date or made

future plans to

Estimates a

ﬁnancial impact

54%

50%

39%

34%

40%

39%

24%

22%

Percentage of clients in scope

2022

2021

2022

2021

2022

2021

2022

2021

Results from our client-level Climate Risk assessment

on governance and disclosure*

2022

(2,109 clients)

2021 (1,940 clients)

Results from our client-level Climate Risk assessment

on transit

ion read

iness*

2022

2021

Results from our client-level Climate Risk assessment

on Physical Risk readiness*

2022

2021

Data as of Nov 22

105

Standard Chartered

– Annual Report 2022

Strategic report

Client-level Climate Risk assessment scores by region

Worst

Best

How do different regions fare in their risk and preparedness?

2022 Assessment*

Number of

clients

Overall score

Governance &

disclosures

Gross Physical

Risk

Physical Risk

adaptation

Gross Transit

ion

Risk

Transit

ion R

isk

Mit

igat

ion

Asia

1,335

41%

40%

66%

27%

42%

36%

Africa & Middle East

386

37%

31%

67%

21%

38%

27%

Europe & Americas

388

57%

63%

81%

47%

46%

58%

Total

2,109

43%

69%

29%

42%

38%

2021 Assessment

Number of

clients

Overall score

Governance &

disclosures

Gross Physical

Risk

Physical Risk

adaptation

Gross Transit

ion

Risk

Transit

ion R

isk

Mit

igat

ion

Asia

1,238

40%

36%

67%

27%

36%

Africa & Middle East

340

38%

34%

69%

25%

33%

32%

Europe & Americas

360

51%

53%

78%

39%

37%

50%

Total

1,938

42%

39%

70%

29%

35%

38%

Data as of Nov 22

The average overall score in our client-level Climate Risk

assessment has remained at around 43 per cent in 2022. This

is despite our increased coverage of clients with high Climate

Risk scores.

Scores were on average better in developed economies and

regions (EU, US, UK) and on average lower in the emerging

markets (AAME), and this observation was seen consistently

across the assessment pillars. This is driven by the increased

level of climate policy and regulation in the developed

economies and regions; however, clients in these markets are

also subject to higher expectations and scrutiny as a result.

Physical Risk adaptation scored the lowest across all ﬁve

questionna

ire sect

ions, ind

icat

ing a low readiness of

corporates to potential climate-related events, while gross

Physical Risk scores decreased to 69 per cent in 2022 from

70 per cent in 2021. This is driven by an increased assessment

coverage in our Asia region, where there is a higher frequency

of physical risk hazards (e.g. storms and ﬂooding).

Overall levels and consistency in the availab

ity of climate

informat

ion from publ

ic disclosures is still low, and in many

cases absent, which highl

ights the

importance of carrying out

direct engagement with our clients.

Beneﬁts from the client engagement

We learned a lot from undertaking the client assessments,

and so did our clients. The beneﬁts included:

•

Improvement of our data coverage, especially where this

was not publicly available, and strengthening the quality of

our risk assessments and modelling capabil

ies. The

client-level risk assessments are now being integrated into

the CCIB Credit Risk underwrit

ing process.

•

Clients were interested in seeing their Climate Risk proﬁles,

as well as the tools and methodologies we use to quantify

their Transit

ion R

isk. They were also interested in how to

improve their climate-related reporting and disclosures.

•

Internal capabil

ity-bu

ild

ing of our cl

ient bankers and risk

teams, with all affected frontline staff required to complete

internal climate-risk train

ing.

106

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– Annual Report 2022

Strategic report

Sustainab

ity

Vulnerable sectors to Climate Risk

Climate change impacts almost all the sectors with

in the

economy. However, we note that there are certain sectors that

are more vulnerable to climate risks under different Transit

ion

Risk and Physical Risk scenarios.

Our approach to Transit

ion R

isk assessment is data-led,

covering a broad range of sectors and at a company level

where data is available and use of proxies in absence of

granular informat

ion. We use a cl

imate-change scenario

model, which helps us to assess potential credit-grade

movements for our corporate clients over a 30-year time

horizon for a range of scenarios ranging from NGFS scenarios

as well as the IEA scenarios. This is based on a sample of 2,388

corporate client entit

ies cover

ing 53 per cent of corporate

good book on net nominal basis. We have used the MSCI

Market Classif

icat

ion to assign countries or regions as

developed or emerging markets.

Caution about the metrics

Scenario-based potential credit downgrades are one

approach for estimat

ing future Trans

ion R

isk. The probabil

ity

of default metrics that inform potential credit downgrades

capture the potential impact to clients’ ﬁnanc

ials under

different transit

ion scenar

ios.

The potential credit downgrades estimated do not factor in

the transit

ion m

igat

ion plans that our clients and the Group

will undertake over the next 30 years and represent the gross

risks we are exposed to.

The results ind

icate a ‘what

if’ analysis, and not a ‘what is likely

to happen’ view. As climate action increases globally, clients,

sovereigns and banks are likely to take addit

ional m

igat

ion

measures to manage transit

ion r

isks.

A 30-year period inherently brings challenges around

forecasting likely outcomes, due to the uncertaint

ies

associated with the speed and direct

ion of trans

ion,

includ

ing breakthrough technolog

ical developments,

sovereign polic

ies and management responses.

Insights

Climate risks are likely to impact our portfolios disproport

ionately, depend

ing on the region and sector. Fossil fuel

dependent sectors that are most sensit

ive to em

iss

ions reduct

ion polic

ies are l

ikely to see larger credit downgrades

over a 30-year period. Oil and gas, Metals and min

ing, Transportat

ion, Automotive and Commercial Real Estate are

the sectors most impacted in the NGFS scenarios, while the oil and gas sector is likely to be most impacted under

the IEA scenarios. Compared with our 2021 disclosures, the impact is relatively muted given the scenario selection

and underlying scenario pathways being more benign as provided in the NGFS and IEA scenario datasets.

Projected potential average minor notch credit grade downgrade by 2050 based on our climate scenario analysis of the

in-scope sample corporate portfolio*

Developed Markets

Emerging Markets

IEA Net

Zero

Emiss

ions

IEA

Sustainable

Develop-

ment

IEA

Announced

Pledges

NGFS

Orderly

NGFS

Disorderly

NGFS

“Hot

House“

IEA Net

Zero

Emiss

ions

IEA

Sustainable

Develop-

ment

IEA

Announced

Pledges

NGFS

Orderly

NGFS

Disorderly

NGFS

“Hot House“

Automobiles

and components

Construction

Consumer

durables and

apparel

CRE

Metals

and

min

ing

Oil and gas

Telecom

Transportation

Util

ies

Total portfolio

Data as of Nov 22

107

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– Annual Report 2022

Strategic report

Sectors exposed to Transit

ion R

isk

The vulnerable industr

ies l

ist ident

iﬁed below

is based on the

expected increase in potential addit

ional costs dr

iven by

adopting new technology, changing energy mix towards

renewables and associated technology adoption costs as well

as an applicat

ion of a carbon pr

ice over a long-term horizon

which will eventually impact the companies’ abil

ity to rema

proﬁtable in the long run.

Sectors most impacted by Transit

ion R

isk include:

Oil and gas,

includ

ing coal and the manufacture of reﬁned

petroleum products. Industry efforts to decarbonise are

currently supported by switch

ing to gas, b

iofuels, hydrogen

and renewables, as well as leveraging technologies such as

Carbon Capture and other emiss

ions abatement projects. The

oil and gas sector plays a central role in global efforts to

decarbonise, with several of our clients having already

committed to decarbonisat

ion targets, most w

ith carbon

intens

ity targets for Scope 1 and Scope 2 em

iss

ions. Another

linked sector that is likely to be impacted is the Commodity

Traders linked to upstream and downstream supply chains for

Oil and gas.

Power:

Our focus remains on selectively ﬁnanc

ing gr

expansion and renewable energy, recognis

ing that these are

key enabling technologies that support the transit

ion towards

greener sources of power. Switch

ing to abated gas w

ill be key

in the short-term to support the transit

ion away from thermal

coal.

Metals and min

ing:

This sector provides raw materials that

support much of the global economy includ

ing those requ

ired

for build

ing and scal

ing clean energy technologies at the rate

required in the NZ scenario. The sector contributes around 12

per cent of global emiss

ions (Scope 1 and 2), of wh

ich Asia,

Africa and the Middle East contribute more than 75 per cent.

Structural changes in demand, combined with ﬁnanc

ial and

regulatory pressures, are driv

ing

increased awareness of the

need for companies in this sector to decarbonise operations.

Some of our clients have already committed to net zero

targets and we are working with them to reduce their

emiss

ions through ﬁnancing trans

ion technolog

ies.

Transportation:

This covers a range of sub-sectors that

primar

ily rely on the burn

ing of fossil fuels such as gasoline

and diesel to deliver its direct and ind

irect serv

ices. Burning

fuels directly results in the release of CO

and other emiss

ions

into the atmosphere and contribute sign

iﬁcantly to Scope 3

emiss

ions on many other

industr

ies.

These sub-sectors consist of:

•

Aviat

ion,

such as airl

ines and a

ir transport entit

ies

themselves, aircraft manufacturers as well as air transport

services, such as airports and ground staff.

•

Shipp

ing,

such as freight

ing serv

ices as well as entit

ies that

mainta

in and operate ports and term

inals.

•

Automobiles,

includ

ing the product

ion and manufacture of

automobiles and their components, as well as any related

service companies.

Sectors exposed to Physical Risk

Below vulnerable industr

ies are shortl

isted based on expected

physical damage to the industry over a longer time horizon.

Real Estate activ

ies:

One of the sectors that is most likely to

be impacted is Real Estate activ

ies. Given the nature of the

asset-backed lending, an increased frequency and severity

of acute weather events and increase in chronic risks will

sign

iﬁcantly

increase damage costs that the Real Estate

portfolio will be exposed to if adaptation measures taken

are not sign

iﬁcant.

Manufacture of food and agricultural products:

Agriculture is

highly vulnerable to climate change and therefore from the

impact higher carbon emiss

ions can have on local cl

imate

and the environment. Dry summers or heavy rainfall seasons

could dramatically impact crops, leading to sign

iﬁcant

ﬂuctuations in proﬁtab

ity and risks for companies throughout

the supply chain.

The impact in developed markets is found to be higher than

that in emerging markets. This is driven by higher regional

carbon prices in developed markets which lead to a higher

number of defaults over the next 30 years.

Reputational and Sustainab

ity Risk

Climate Risk is considered with

in the Reputat

ional and

Sustainab

ity Risk Framework, for our corporate clients,

through an assessment of a client's abil

ity to meet the

ir own

climate related commitments, as well as satisfy the Group's

public ambit

ions and pos

ion statements as well as

its

responsib

ies for ESG r

isk management.

We have continued to perform addit

ional cl

ient-level due

dil

igence leverag

ing our Climate Risk questionna

ires where

possible to ident

ify add

ional Reputat

ional Risk from climate-

related factors.

This addit

ional due d

igence

is conducted by the Group

Climate Risk team for (i) clients in our high Transit

ion R

isk and

Phase 1 net zero sectors (Oil and gas, Power, Metals and

min

ing), (

i) cl

ients with a coal nexus

as well as (i

i) those that

have been assessed at client level as high Climate Risk. Given

the lack of attribut

ion for Phys

ical Risk events, the assessment

concentrates on Transit

ion R

isk. The assessment focuses on

three pillars covering both client and transaction level aspects:

Client level

•

Temperature alignment scoring and a comparison to the

client’s peers.

•

Client-level transit

ion read

iness and robustness of plans

from Climate Risk Questionna

ires or through desktop

assessments

Transaction level

•

Emiss

ions

impact of transactions consider

ing both

internal

and regional contexts.

Data as of Nov 22

As deﬁned by the Group’s public Posit

ion Statement to only prov

ide ﬁnanc

ial serv

ices to clients who, by 2030, are less than 5% dependent on thermal coal

(based on % revenue).

108

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– Annual Report 2022

Strategic report

Sustainab

ity

•

Of the case reviews completed, an increase in Reputational

Risk rating was suggested for ~13 per cent of transactions.

These consisted of companies in both the oil and gas and

manufacturing sectors, primar

ily look

ing to procure coal or

other high-carbon emitt

ing products for manufactur

ing,

production or wholesale purposes. In addit

ion, some ent

ies

with high temperature alignment scores and no clear

transit

ion plan were ra

ised as having addit

ional r

isk and

rating increases recommended.

The above-mentioned due dil

igence

is in addit

ion to w

ider

exist

ing env

ironmental and social (E&S) risk management

processes as well as our oversight against our Posit

ion

Statements and Prohib

ited Act

ies list. During 2022, we have

enhanced this E&S process through the Environmental &

Social Risk Assessment (ESRA) to ident

ify cl

ients and

transactions which may be more susceptible to reputational

risk by assessing clients’ level of commitment and strategy to

manage climate change as well as their level of alignment to

internat

ional standards of greenhouse gas em

iss

ions

reporting.

This is intended to ensure a greater level of oversight of clients’

readiness to manage climate change and the lim

itat

ions on

business activ

ies that could result in a sign

iﬁcant sh

ift in

stakeholder views (from both environmental and social

impact) and/or negative perception by investors and the

market.

Where negative perception exists or there is exposure to

clients that do not comply with E&S criter

ia, rev

iews are

conducted at a client level to ident

ify root causes and propose

mit

igat

ion plans, which are agreed with the relationsh

manager. These may involve client engagement, commitment

from clients to take corrective action in the context of their

business, or may result in potential run down if corrections

cannot be achieved.

Addit

ionally, where spec

ic cr

iter

in Posit

ion Statements are

not fully met or there are ind

idual clients that do not comply

with the enhanced E&S criter

ia, these may be deemed to have

high/very high reputational risks and are escalated to the

Group Responsib

ity and Reputational Risk Committee

(GRRRC) for client and transactional determinat

ions.

We have also set a Risk Appetite for our exposure

concentration to clients with a high-temperature alignment

combined with low-transit

ion read

iness.

We use temperature alignment as a metric to inform our

client-level Climate Risk assessment, which is part of the

Reputational and Sustainab

ity Risk reviews for clients and

transactions as mentioned above. Temperature alignment is

one way to consider a company’s impact on climate change

and an approach to estimate the emiss

ions proﬁle of our

clients. It is calculated based on emiss

ion

intens

ies and

volume of hydrocarbons produced. It maps the company’s

forward-looking carbon intens

ity and hydrocarbon

production outlook (where applicable) against a temperature

alignment score.

We assessed the weighted average temperature alignment

(WATA) of 2,388 corporate client entit

ies (cover

ing 53 per cent

of corporate good book on net nominal basis) by high-carbon

sector, projected to 2030. As part of our 2023 modelling

roadmap, we are also looking to develop an in-house

methodology to model temperature alignment and overall

reduce reliance on third-party modelling capabil

ies.

Caution about the metrics

•

Temperature alignment is an emerging concept, and

industry-wide standards on methodology are still evolving.

We expect our approach to evolve in line with best practice.

•

Client-level emiss

ions were only ava

ilable for about 37 per

cent of corporate clients, so sector average proxies were

used for the remain

ing ent

ies. In 2023, we a

im to refresh

exist

ing assessments as well as expand our coverage to

c.4,000 clients. The client assessments not only help form a

view of the overall Climate Risk vulnerabil

ies and readiness

for clients but provide a tool for data gathering and analysis

of the underlying themes that drive Climate Risk and its

mit

igat

ions. Addit

ionally, expanded coverage from the

exist

ing vendor engagement w

ill help to bridge the data

gaps.

Insights

•

Our overall average is 3.25⁰C, ind

icat

ing that our

portfolio is largely in line with the current global

emiss

ions and temperature trajectory.

•

Compared to other sectors with

in our portfol

io,

Util

ies and CRE have a higher temperature

alignment compared to other sectors, given the

dependence on high-carbon emitt

ing product

ion, but

our portfolio temperature alignment for these sectors

is below the sector average.

•

Compared to the previous year, average sector

temperature alignment scores have increased across

most of the sectors. This increase is driven by

improvements in both emiss

ion data coverage for our

clients (i.e. reduced use of proxies) and changes in the

third-party temperature alignment scoring

methodology. A maximum increase of 26 per cent for

CRE is observed where WATA score has increased

from 3.1 in 2021 to 3.8 in 2022. Telecommunicat

ion (26

per cent increase) and Consumer durables and

apparel (24 per cent increase) are other notable

sectors with an increase in WATA.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

WATA (⁰C)

Utilities

O&G

Transportation

CRE

Construction

Automobiles

& Components

Telecoms

Others

Metals &

Mining

Consumer

Durables

& Apparel

3.84

2.81

3.27

3.84

3.05

3.56

3.12

3.49

2.98

3.25

Weighted average temperature alignment (WATA) – 2030

by client sectors

The weighted average of approximately 20 other sectors to which the Group

has the lowest net nominal exposure

109

Standard Chartered

– Annual Report 2022

Strategic report

Country Risk

The Group has developed a set of Physical and Transit

ion r

isk

rankings, to ident

ify from a set of 165 sovere

igns globally that

are deemed most vulnerable and least ready to adapt and

mit

igate cl

imate-related Physical and Transit

ion r

isks.

•

The Physical Risk rankings are based on a set of publicly

available scores such as ND-Gain Country Index and

GermanWatch Climate Risk Index, as well as S&P Global

Ratings and Moody’s Investors Service.

•

The Transit

ion R

isk rankings are based on an internally

developed methodology which comprises a combinat

ion

of both climate and macroeconomic data.

The two pillars underlying this assessment include the

Sovereigns’ Gross Transit

ion R

isks (such as reliance on

carbon-intense sectors, import and export of fossil fuels, gap

to ﬁll to meet 2030 Nationally Determined Contribut

ions

targets) and Transit

ion R

isk Mit

igat

ions established (such as

low-carbon energy production in place, imports of low-carbon

technology, governments’ abil

ity and cred

ity to support the

transit

ion). The two p

illars are further combined to obtain a

measure of Net Transit

ion R

isk for each market.

Based on their aggregated Physical and Transit

ion r

isk scores,

sovereigns are split into decile-based rankings. These rankings

are a qualitat

ive

input to the Group Country Risk reviews for

sovereign credit grades and lim

its,

inputs to various climate-

related stress tests and computation of Country Risk

Benchmarks and Risk Appetite. They are also used as proxies

for miss

ing cl

ient asset location informat

ion

in Climate Risk

Assessments.

Insight

•

For Physical Risk, the bulk of exposure is located in

sovereigns which score in the top half (buckets 1 to 5),

with over 2 per cent in the two lowest categories

(buckets 9 and 10).

•

Sim

ilarly, for Trans

ion R

isk, the bulk of exposure is

located in sovereigns which score in the top half, with

less than 1 per cent in the two lowest categories

(buckets 9 and 10).

•

This ind

icates that the Group

is overall well posit

ioned

in managing its climate-related physical and

transit

ion r

isks. The combined exposures in the two

worst categories are also well below the Group's

current Risk Appetite escalation levels.

Caution about the metrics

•

The rankings are informed by external ind

ices.

– Physical Risk rankings are based on four scores (ND-Gain

Country Index/GermanWatch Climate Risk Index/S&P

Global Ratings/Moody’s Investors Service)

– Transit

ion R

isk rankings are based on Gross Transit

ion R

isk

and Transit

ion R

isk Mit

igat

ion factors, with data sourced

from World Bank/OECD/S&P/International Monetary

Fund/Fitch Ratings

•

The computation inputs are based on latest available data

which may be dated. Proxies have been used where data

for the sovereign is not available.

•

The ranking uses equally spaced decile scores and provides

the results in an ordinal manner. While the simpl

ity helps in

adoption and provides the relative posit

ion of the

sovereigns, other systems may provide more informat

ion.

Physical and Transit

ion R

isk rankings methodological deep dives

ND-Gain

Country Index

S&P Global

Rating

German

Watch Climate

Risk Index

Moody’s

Investor

Services

Assessing markets’

vulnerabil

ies to climate

change and readiness to adapt

Physical Risk

Transit

ion R

isk

Risk faced to transit

ion

Abil

ity to trans

ion

Gross Transit

ion

Risk factors

Transit

ion R

isk

Mit

igat

ion factors

Measuring markets’ exposure

to extreme weather events

Gauging markets’ histor

ical

losses as a result of extreme

weather events

Measuring markets’ exposure

to extreme weather events

Reil

iance on foss

fuel imports and

exports

Governments’

effectiveness in

achiev

ing targets

Emiss

ion footpr

int

per capita

Low-carbon energy

production capacity

Carbon footprint of

imports and efforts

Governments’ ﬁscal

ﬂexib

ity to support

the transit

ion

Energy efﬁciency

levels

Imports of

low-carbon

technology products

110

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Gross Country Risk (GCR) exposure distr

ibut

ion as at 31 December 2022 across the Physical Risk categories

Category

1 (Best)

10 (Worst)

Exposures %

3.07

13.72

25.11

26.27

16.20

6.85

7.49

0.74

0.37

0.18

Physical and Transit

ion r

isk rankings distr

ibut

ions

Physical Risk

Transit

ion R

isk

Bucket distr

ibut

ion

Operational and Technology Risk

Standard Chartered’s own operations

We perform granular Physical Risk assessment across all our

own operating sites (ofﬁces, branches and data centres). From

a risk management and mit

igat

ion perspective, all new

properties (branches, ofﬁces) onboarded with

in the Group are

assessed for Physical Risk vulnerabil

ies. A key development

this year has been that all material Third-Party Corporate

Service arrangements in scope for Business Continu

ity

Management controls are subject to Climate Risk assessment

as part of third-party continu

ity plans.

We analysed approximately 1,000 of our operating locations

across branches, ofﬁces, data centres and other sites to assess

the gross Physical Risk proﬁle.

Caution about the metrics

The metrics are based on outputs from Munich Re’s natural

catastrophe model and do not assume adaptation measures

such as build

ing qual

ity, hazard protection infrastructure (such

as ﬂood defences) or government adaptation polic

ies.

Assessment of gross Physical Risk at our own operating locations*

Physical risk event

Time horizon

Scenario

Operating locations at extreme Physical Risk (%)

Korea

UAE

Indonesia

Globally

Flood (Acute)

2022

N/A

26%

10%

16%

22%

Wildf

ire (Acute)

Storm (Acute)

20%

15%

Sea-level rise (Chronic)

2100

RCP 8.5

Number of operating locations

734

223

994

Data as of Nov 22

Insight

•

Outputs from the Munich Re Location Risk

Intelligence platform show that 22 per cent of the

Group’s locations globally are in locations of extreme

ﬂood risk, 15 per cent with extreme storm risk and

none at risk from wildf

ire.

•

Longer-term risk (up to 2100) from sea-level rise under

RCP 8.5 are min

imal, be

ing below 5 per cent.

•

Not surpris

ingly, g

iven our footprint, a higher

proportion (26 per cent for ﬂood, 20 per cent for

storm) of the Group’s locations in Asia are subject

to extreme physical risks. A total of 16 per cent of

locations in Europe & Americas are subject to

ﬂood risks, which is entirely driven by the locations

in America.

•

In the locations where weather events such as storms

or cyclones are frequent, the build

ings are bu

ilt with

this in mind.

•

Mit

igat

ion options include property insurance and

operating a divers

iﬁed locat

ion strategy, splitt

ing

delivery and therefore reducing concentration risk.

111

Standard Chartered

– Annual Report 2022

Strategic report

Traded Risk

We manage the Climate Risk of Traded Risk exposures as part

of the Traded Risk stress-testing framework. Climate risks are

incorporated with

in Traded R

isk Stress Risk Appetite.

Climate-related stress scenarios are designed to include

Transit

ion R

isk effects from climate change polic

ies and

shocks to markets due to supply and demand disrupt

ion from

physical climate events.

Posit

ions booked

in the trading and fair value banking books

are in scope, with a time horizon for stress shocks of between

three days and one year depending on underlying market

liqu

ity.

From a risk management and mit

igat

ion process, two physical

climate stress scenarios – ‘Hurricane Season’ and ‘Winter Cold

Wave’ – were introduced after consider

ing the

impact of

extreme weather events on commodit

ies pr

ices and own

account and client portfolio concentrations. Addit

ionally, an

exist

ing global stress scenar

io, ‘Global Inﬂation’, was updated

to incorporate the impact of transit

ion effects from cl

imate

change polic

ies, notably

inelast

ic carbon energy suppl

ies.

Descript

ion

Traded Risk:

Market Risk stress

loss from physical

climate event

Potential stress loss to trading and fair value

banking book exposures from extreme weather

events, includ

ing

increased impact and intens

ity

of hurricanes and severe winter

Traded Risk:

increase in

Counterparty

Credit Risk stress

exposures from

physical climate

event

Potential increase in counterparty credit

stressed exposures from extreme weather,

includ

ing

increased impact and intens

ity of

hurricanes and severe winter

Basel Committee

Princ

iples of

effective climate risk

management in Jun

22 and FAQ Dec 22

Australia – APRA

Climate change

ﬁnancial r

isk

management

guidel

ines

in Nov 21

Climate scenario

analysis conducted

in 22

Singapore – MAS

Guidel

ines on

environmental

risk management

published in Dec 20,

effective Q2 22

Climate impact

included in 2022

industry-wide stress

testing excercise

Malaysia – BNM

Guidel

ines on

environmental

risk management

published in Dec 20,

effective Q2 22

Climate impact

included in 2022

industry-wide stress

testing excercise

China – CBIRC

Green Finance

guidel

ines

issued in

Jun 22

Japan – JFSA

Guidel

ines on

climate risk

management in

Jul 22

Hong Kong – HKMA

Supervisory Manual

on climate risk

management

published in Dec 21,

effective Dec 22

Pilot climate stress

testing conducted

in 2021

Phil

ipp

ines – BSP

Draft environmental

risk management

guidel

ines

in Sep 21

Draft circular on

climate risk stress

testing Aug 22

UK – BoE/PRA

Supervisory

Statement on

Enhancing climate

risk management

(SS3/19)

BoE 21 stress testing

includ

ing cl

imate

impact

US – OCC, FDIC, Fed

OCC, FDIC and Fed

consultations in

Feb, May and Dec

22 on climate risk

management

Fed announced

pilot climate stress

testing in 23

EU – ECB

Supervisory guide

on climate and

environmental risk

management in

Nov 20, effective

immed

iately

ECB-led climate

stress testing

ECB report on state

of readiness of EU

banks

AME region

Central Bank of

Kenya guidel

ines on

climate risk in Oct 21

Dubai FSA to isssue

draft guidel

ines on

climate risk in Sep 21

Central Bank of

Oman adopted

the Basel princ

iples

in climate risk

management in

Dec 21

India – RBI

Survey on climate

risk and sustainable

ﬁnance in March

22 followed by a

discuss

ion paper

in Sept 22. RBI-led

climate scenario

analysis expected

Nepal – BoN

Guidel

ines on

climate risk

management in

Feb 22

Compliance Risk

We have established a process for tracking various Climate

Risk-related regulatory developments and obligat

ions set by

ﬁnancial serv

ice regulators at Group and regional/country

level, with roles and responsib

ies set out

in the Climate Risk

Policy.

Regulatory requirements or enhancements needed are

recorded through workplans across various teams. The

workplans are coordinated and monitored through various

working groups by having the relevant accountable

executives partic

ipate

in the relevant forums.

The processes of implement

ing regulat

ions or addressing

regulatory feedback is also monitored and challenged by the

relevant governance committees.

Many regulators across our footprint have proposed or set

supervisory expectations on climate/environmental risk

management. Those expectations are broadly aligned in

princ

iple, but local

implementat

ions could vary. We have

actively worked with industry bodies and regulators to

promote consistency in policy making around the globe.

Over 2022, we have developed horizon-scanning capabil

ies

for climate-related regulations as well as a global register. We

on-boarded external counsel to assist with horizon-scanning

of ESG-related regulations for both Group and 13 of our key

markets in standard regulatory scanning and ident

iﬁcation.

Aggregating inputs from both external counsel and internal

markets, a global obligat

ions reg

ister has been established

to provide a complete view of the current obligat

ions and

upcoming regulatory requirements. We have documented an

operating model clarify

ing roles and respons

ies across

the Group and our markets to establish clear ownership of

sustainab

ity regulations.

112

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Treasury Risk

From a capital perspective, Climate Risk considerat

ions have

been part of our Internal Capital Adequacy Assessment

Process (ICAAP) submiss

ions s

ince 2019. Our approach for

assessing the Climate Risk impact on capital adequacy has

improved from qualitat

ive judgements to quant

itat

ive

simulat

ions w

ith the availab

ity of tools and greater

understanding of our portfolio.

For the 2022 ICAAP submiss

ion, we moved towards a more

quantitat

ive approach compar

ing the worst (annualised)

ﬁve-year loss period from all three NGFS scenarios to the

projected peak losses from the 2022 Group ICAAP. The Late

Action scenario was ident

iﬁed to dr

ive the maximum

difference in losses; however, this was lower than credit losses

experienced under the ICAAP macroeconomic stress scenario,

concluding that addit

ional cap

ital add-on was not required

for Climate Risk. The severity and potential impact on our

clients’ loan impa

irment level under cl

imate scenarios was

lower than the ICAAP scenario and we determined that an

addit

ional cap

ital buffer was not required.

The approach for incorporating climate related credit risks

into the Group’s ICAAP is set to continue using scenario driven

analysis to best judge the ﬁnanc

ial

impact of Climate Risk. It is

envisaged however that as understanding of Climate Risk

management and potential forward-looking scenarios

develops, this may lead to evolution in our approach and

assessment includ

ing us

ing a wide range of scenario

outcomes to determine any potential capital related impact

in the future.

From a Liqu

ity Risk perspective, we conducted a proof-of-

concept analysis to assess climate risk-related vulnerabil

ies

and readiness of approximately 77 per cent of the corporate

liqu

ity portfolio, leveraging the client outreach and data

gathering exercise being undertaken on the asset side. The

analysis showed that exposure concentration in the ‘high

transit

ion r

isk and low readiness’ bucket is broadly

comparable to what we see for our top corporate client

exposures on the asset side. Liqu

ity providers with high

transit

ion r

isk are from the Oil and gas, Pharma, Transport

storage – others and Util

ies sectors. We will continue to

enhance our analysis capabil

ies and exposure coverage

through 2023, includ

ing embedd

ing climate related liqu

ity

considerat

ions w

ith

in our Internal L

iqu

ity Adequacy

Assessment Process.

113

Standard Chartered

– Annual Report 2022

Strategic report

Climate change and its associated risks,

opportunit

ies and organ

isat

ional

impl

icat

ions

are overseen by the Group’s Board, Management

Team and multiple supporting sub-committees.

The structure of the Group’s Board and Management Team can be

found on

pages 138 to 145

Standard Chartered PLC Board

The Board is responsible for the long-term success of the

Group and its supporting committees consider climate-

related risks and opportunit

ies when rev

iew

ing and gu

ing

strategic decis

ions.

Since 2019, the Board has approved a Climate Risk Appetite

Statement (RAS) annually to reﬂect both our aim to measure

and manage the ﬁnancial and non-ﬁnancial r

isks aris

ing from

climate change, and to reduce emiss

ions related to the

Group’s own activ

ies and those associated with the ﬁnanc

ing

of clients seeking to align with the Paris Agreement. In

November 2021, we introduced a suite of Risk Appetite (RA)

metrics and thresholds to monitor and manage the exposure

concentration in our portfolio across key risk types.

Throughout 2022, Board activ

ies have included review

ing

and guid

ing strateg

ic decis

ions on our approach to reach net

zero ﬁnanced emiss

ions by 2050.

For more informat

ion on our governance structure please see

page

184

in the Directors' remunerations report.

Management Team

Each member of the Group Management Team is responsible

for strategically driv

ing cl

imate considerat

ions w

ith

in the

geography, business segment or function in line with our net

zero pathway.

In response to the Prudential Regulation Authority’s (PRA’s)

Supervisory Statement 3/19, ‘enhancing banks’ and insurers’

approaches to managing the ﬁnanc

ial r

isks from climate

change’, and responsib

ity for ident

ify

ing and managing

ﬁnancial r

isks from climate change sits with the Group Chief

Risk Ofﬁcer (CRO) as the appropriate Senior Management

Function (SMF) under the Senior Managers Regime (SMR). The

Group CRO is supported by the Global Head, Enterprise Risk

Management (ERM) who has day-to-day oversight and

central responsib

ity for the Group’s second line of defence

against Climate Risk.

The Global Head, ERM has also appointed a dedicated

Managing Director, Global Head of Climate Risk and Net Zero

Oversight. Risk Framework Owners for the impacted Princ

ipal

Risk Types (PRTs) and integral component of the Enterprise

Risk Management Framework (ERMF) are responsible for

embedding Climate Risk requirements with

in the

ir respective

risk types.

Governance committees and steering groups

Several committees with

in the Group support the Board and

Management Team on the management and monitor

ing of

climate change and its associated impacts.

Governance of our

Sustainab

ity Agenda

Structural overview of Standard Chartered PLC’s climate-related governance

Group Risk Committee

(GRC)

Sustainab

ity

Forum

Board Risk Committee

(BRC)

Audit Committee

Culture and Sustainab

ity Committee

(CSC)

Group Management Team

(MT)

Standard Chartered PLC Board

Group Responsib

ity and Reputational

Risk Committee (GRRRC)

Sustainable Finance Governance and Other Committees

Climate Risk Management

Committee (CRMC)

114

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Governance committees and steering groups with responsib

ity for climate-related issues

Governance body

Chair

Climate-related

agenda frequency

and inputs

Key purposes and responsib

ies

related to climate

Climate-related topic 2022

Board

Standard

Chartered

PLC Group

Chairman

Twice during

2022.

Climate Risk

updates delivered

via Group CRO

Reports

•

Oversee the Group’s overall net zero

approach.

•

Responsible for the net zero pathway

shareholder advisory vote proposal.

•

Discussed and reviewed the

Group’s net zero pathway,

approved its approach and

reviewed the progress on

delivery.

•

Completed train

ing focus

ing on

how Climate Risk is being

embedded across the three lines

of defence.

Board Risk

Committee

(BRC)

Independent

non-Executive

Director

Three times a

year.

Climate Risk

updates to BRC in

Group reports

seven times a

year, delivered via

Group Chief Risk

Ofﬁcer’s Reports

Quarterly Climate

Risk informat

ion

provided as part

of the Risk

Information

Report, covering

key metrics based

on the

concentration of

transit

ion and

physical risks in

our portfolio.

•

Provide oversight of the Group’s key

risks on behalf of the Board and is

the primary Risk Committee at the

Board level that oversees Climate

Risk.

•

Consider the Group’s Risk Appetite

and make recommendations to the

Board on the Risk Appetite

Statement (RAS).

•

Assess risk types (includ

ing Cl

imate

Risk) and the effectiveness of risk

management frameworks and

polic

ies.

•

Provide oversight and challenge of

the design and execution of

climate-related stress testing.

• Reviewed, discussed and

challenged the Group’s

Management scenario analysis.

• Reviewed and recommended

Group Climate RAS to the Board.

• Reviewed Climate Risk

Information Report (RIR)

quarterly.

•

Monitored adherence to RA

metrics includ

ing any relevant

breaches.

Culture and

Sustainab

ity

Committee (CSC)

Independent

non-Executive

Director

Four times in

2022.

•

Oversee the Group’s overall

sustainab

ity strategy.

•

Monitor the development and

implementat

ion of the susta

inab

ity

framework to align with the Group’s

net zero approach.

• Discussed ESG benchmarking

and ind

ices progress,

includ

ing

via CDP climate change survey.

• Reviewed Group Sustainab

ity

Strategy (includ

ing cl

imate).

• Discussed Board engagement

protocols on sustainab

ity.

Audit Committee

Independent

non-Executive

Director

Once in 2022

(Q4). This will be

quarterly from

2023.

•

Responsible for oversight of the

Group’s quantitat

ive report

ing

metrics.

•

Reviewed proposal to integrate

TCFD-aligned disclosures and

metrics into Annual Report and

agreed this approach.

Group Risk

Committee

(GRC)

Group Chief

Risk Ofﬁcer

(CRO)

Three times

during 2022.

Climate Risk

updates in Group

CRO and CRIR

reports 11 times

per year.

•

Ensure the effective management of

Group risk in support of the Group’s

Strategy.

•

Oversee implementat

ion of the

Enterprise Risk Management

Framework.

•

Review Risk Appetite and approve

Management Team level Risk

Appetite metrics and thresholds for

Princ

ipal R

isk Types (PRT) and

integrated risks, includ

ing Cl

imate

Risk.

•

Received update on Climate

Bienn

ial Exploratory Scenar

Round 2.

•

Received update on Climate Risk

embedding and the Climate Risk

proﬁle as part of the Risk

Information Report.

• Approved the Management

Team level Climate RA metrics

and monitored adherence to

these.

115

Standard Chartered

– Annual Report 2022

Strategic report

Governance body

Chair

Climate-related

agenda frequency

and inputs

Key purposes and responsib

ies

related to climate

Climate-related topic 2022

Climate Risk

Management

Committee

(CRMC)

Group CRO

Three times in

2022. (CRMC

commenced in

July 2022) and will

be held six times

a year in 2023.

Note: Prior to its

formalisat

ion as a

Committee, there

were also three

Climate Risk

Management

Forum (CRMF)

meetings held in

2022.

Climate Risk

Information

Report (RIR)

tabled quarterly,

covering key

metrics based on

the concentration

of transit

ion and

physical risks in

our portfolio.

• Oversee development and

implementat

ion of the Cl

imate Risk

framework.

•

Oversee all aspects of risk

management practices for climate-

related ﬁnancial and non-ﬁnancial

risks, includ

ing leadersh

ip and

oversight in developing and

effectively implement

ing the Group’s

Climate Risk management

framework.

• Provide structured governance

around engagement with relevant

PRTs impacted by or linked to

Climate Risk.

Drove delivery of:

•

Climate stress testing and

management scenario analysis.

• Progress associated with

integrat

ing Cl

imate Risk across

all impacted risk types.

• Climate risk-related disclosures,

includ

ing those d

iscussed in this

report.

•

Climate Risk research with

Imperial College London.

• Regulatory feedback and

supervis

ion.

• Climate-related management

informat

ion and RA metr

ics.

•

Approach to deliver

ing tra

ing

and upskill

ing staff on Cl

imate

Risk across the Group.

Group

Responsib

ity

and Reputational

Risk Committee

(GRRRC)

Group Head,

Conduct,

Financ

ial

Crime and

Compliance

Monthly

•

Oversee and approve climate-

related Posit

ion Statements

includ

ing sector-spec

ic trans

ion

criter

ia and assoc

iated risk tolerance

thresholds

Reviewed:

•

Exposure to clients that do not

comply with enhanced E&S

criter

ia.

• Transactions where Posit

ion

Statements are not fully met.

•

Transactions with high or very

high Reputational Risk with

climate change factors.

Sustainab

ity

Forum

Group Head,

Corporate

Affairs Brand

& Marketing

(Jan-Aug);

Chief

Sustainab

ity

Ofﬁcer

(Sep-Dec)

The Forum meets

eight times per

annum.

• Oversee development and

implementat

ion of the Group’s

sustainab

ity strategy, includ

ing

climate.

•

Guide a coordinated Group-wide

approach to key sustainab

ity

themes, includ

ing cl

imate change.

Reviewed:

•

New, exist

ing, and updated

Sustainab

ity Aspirat

ions.

•

Processes for integrat

ion of

Climate Risk into Reputational

and Sustainab

ity Risk.

•

Approved the approach to the

Group’s own ESG ratings.

• Discussed Group-wide climate

internal and external

engagement programmes.

116

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– Annual Report 2022

Strategic report

Sustainab

ity

Governance body

Chair

Climate-related

agenda frequency

and inputs

Key purposes and responsib

ies

related to climate

Climate-related topic 2022

Sustainable

Finance

Governance

Committee

Global Head

of Sustainable

Finance

Monthly

•

Provide leadership, governance and

oversight in deliver

ing the Group’s

sustainable ﬁnance offerings.

•

Review and endorse sustainable

ﬁnance products.

•

Guide the Group in ident

ify

ing and

embracing opportunit

ies and

review

ing the reputat

ional risks

relating to sustainable ﬁnance

includ

ing any greenwash

ing risks on

sustainable ﬁnance products.

Reviewed and approved:

• Sustainable ﬁnance products

includ

ing susta

inable deposits,

green mortgages, sustainable

trade ﬁnance products,

sustainable ﬁnance wealth

management products.

•

Green and sustainable ﬁnance

transactions includ

ing

transactions with climate-

related KPIs.

•

The Group’s approach to

launching sustainable and

climate products.

•

The Group’s Green and

Sustainable Product Framework,

encompassing a range of

climate ﬁnance activ

ies.

•

The Group’s update to the 2022

Sustainable Finance Impact

Report.

Sustainable

Finance Steering

Committee

Global Head

of Sustainable

Finance

Monthly

•

Provide strategic direct

ion for the

Corporate, Commercial and

Institut

ional Bank

ing (CCIB)

sustainab

ity agenda.

•

Coordinate and scale CCIB products,

segments and markets.

• Discussed Sustainable Finance

trends.

•

Monitored and tracked progress

of sustainable ﬁnance targets.

•

Coordinate and scale CCIB

products, segments and

markets.

Net Zero

Operating

Steering

Committee

Net Zero

Transit

ion

Programme

Director

Weekly

•

Drive the operational

isat

ion of the

Group’s net zero pathway.

•

Coordinated the embedding of

net zero pathway across the

bank.

Consumer, Private

and Business

Banking

Sustainab

ity

Steering Group

(CPBB)

Global Head,

Transfor-

mation and

Strategic

Init

iat

ives

Bi-monthly

•

Provide strategic direct

ion for the

Consumer, Private and Business

Banking (CPBB) sustainab

ity

agenda.

• Discussed Sustainable Finance

trends.

•

Tracked progress of Sustainable

Finance targets and discussed

further opportunit

ies.

•

Updates and progress on CPBB

net zero plans.

The Net Zero and overall Sustainab

ity governance structure will be renewed and refreshed in 2023.

Addit

ionally, we are expand

ing governance and risk management at the regional, country and segment levels to better ident

ify

the risk and actively manage their portfolios.

117

Standard Chartered

– Annual Report 2022

Strategic report

Assessing and managing climate with

in our bus

iness

Climate risks and opportunit

ies are a grow

ing prior

ity across the Group. Mul

itple different teams across our businesses and

functions are either dedicated to, or spend a proportion of their time working on climate-related activ

ies.

Employees dedicated to supporting Climate Risk and opportunit

ies

Line of defence

Team

Purpose and responsib

ies

related to climate

First line

Sustainab

ity Strategy and

Net Zero Project

Management Ofﬁce

Formed in July 2022 under the new CSO, this team manages the overall Group

sustainab

ity strategy includ

ing external d

isclosures and engagement with NGOs

and Policy Coalit

ions, w

ith team members actively partic

ipat

ing in and convening

the Group’s partic

ipat

ion in industry platforms and in

iat

ives.

The team acts as Secretariat to the Sustainab

ity Forum helping shape the

direct

ion of the Group’s act

ion on sustainab

ity and leads the Group’s net zero

strategy and implementat

ion. As of 2023, th

is team will serve as the host of the

Group Net Zero Programme Management Ofﬁce (PMO).

Sustainable Finance

Comprises Sustainable Finance Orig

inat

ion and Strategic Init

iat

ives teams who

actively collaborate to ident

ify, capture and manage opportun

ies regard

ing

Climate Finance.

The Transit

ion ﬁnance team also s

its with

in th

is structure and supports our clients

with their decarbonisat

ion ﬁnancing needs.

ESRM

Responsible for setting and operational

ing the Group’s sector-specif

ic Pos

ion

Statements and working with clients in all our carbon-intens

ive sectors to avo

id,

mit

igate and manage any potent

ial negative impacts of our ﬁnanc

ing.

Climate Risk Analysis

(includ

ing Adv

isory and

Analyst teams)

Formed in 2022. Conducts data collection and analysis for the client-level Climate

Risk assessments for all in-scope clients.

Second line

Climate Risk

Forms part of the Group Enterprise Risk Management (ERM) function. Conducts

period

ic hor

izon scanning, looking at both top-down risk ident

iﬁcation of

emerging industry themes and regulatory expectations, and bottom-up risk

ident

iﬁcation through

impacted processes.

Reputational and

Sustainab

ity Risk (RSR)

Responsible for overseeing and challenging the ﬁrst line of defence in respect of

risk management activ

ies of reputational and climate-related risks.

Other Princ

ipal R

isk Types

As Climate Risk is integrated into impacted PRT frameworks, responsib

ity for

second line ownership of Climate Risk specif

ic to each Pr

inc

iple R

isk Type is

delegated to the relevant Risk Framework Owner.

Other Business

Partners

Legal, Conduct

Financ

ial

Crime and Compliance and

Supply Chain Management

Provide support to the Group as necessary, includ

ing to Susta

inable Finance,

Sustainab

ity, Climate Risk and RSR.

Headcount is based on budgeted numbers and could change subject to ongoing recruitment. Sustainab

ity Strategy and Net Zero Project Management Ofﬁce

and Climate Risk Analysis teams didn't exist in years prior to their 2022 formation.

118

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– Annual Report 2022

Strategic report

Sustainab

ity

Education and train

ing

Understanding Sustainab

ity

We are encouraging all employees across our footprint to

grow their understanding of sustainab

ity and climate, how

we embed it into our business, operations and communit

ies,

and how they can actively play their part in this journey. In

April 2022, we launched our ‘Understanding Sustainab

ity’

online learning, and more than 12,800 (15 per cent) of

colleagues voluntarily completed this programme during the

year.

To recognise their engagement, we planted a tree for each

employee completing the train

ing

in our ‘Standard Chartered

Forest’, which spans seven of our footprint markets and is

tended by local NGOs.

Climate-related ﬁnanc

ial and non-ﬁnancial r

isk train

ing

For Climate Risk specif

ically, the Board were g

iven train

ing

that provided an overview of how Climate Risk is being

embedded across the three lines of defence, as well as what

this means for our clients and colleagues.

In addit

ion, we launched R

isk-wide mandatory e-learnings,

and provided 35 hours of bespoke classroom-based train

ing

for almost 4,000 colleagues across CCIB, CPBB, Risk and Audit.

Recordings of these sessions are available to all staff to access

as convenient.

In Q1 2023, we intend to embed Climate Risk-related credit

train

ing mater

ial into both our ﬁrst and second line Credit Risk

curricula. In addit

ion,

in partnership with our academic

partner, Imperial College London, we also aim to launch a

detailed online train

ing programme ava

ilable to all impacted

staff.

Sustainable Finance and ESRM train

ing

In 2022, we focused on educating colleagues across all levels

of the Group on our net zero pathway and Sustainable

Finance in

iat

ives. We launched foundat

ional sustainab

ity

and Sustainable Finance curricula across the Group; provided

dedicated train

ing on our Susta

inable Finance product suite

and Posit

ion Statements; hosted panel d

iscuss

ions on key

themes includ

ing greenwash

ing risk and ESG ratings; and held

topical sessions on net zero and Transit

ion F

inance concepts,

such as carbon capture, util

isat

ion and storage, and

decarbonisat

ion market trends.

In 2023, our Sustainable Finance education programmes will

accelerate. This will include the roll-out of a tiered practit

ioner-

level learning curriculum, and further modularisat

ion of our

Sustainable Finance train

ing to help us

improve knowledge

and awareness across our network.

Incentive structure

Variable remuneration is applicable to employees through the

Group Scorecard and the Long-Term Incentive Plan (LTIP). This

is overseen by the Board-level Remuneration Committee.

Selected sustainab

ity targets, includ

ing those w

ith a climate

change dimens

ion, are

incorporated into our annual Group

Scorecard which informs variable remuneration for all

colleagues under our Target Total Variable Compensation

plan, includ

ing execut

ive directors and the Group

Management Team.

Sustainab

ity has also been included in the 2023–25 LTIP

performance measures, with an increased focus on the

broader impact of client activ

ity, rather than on our

internal

operations. The sustainab

ity measures in the 2023–25 plan

include:

•

Sustainable Finance income in excess of $1 bill

ion by 2025

•

Delivery of the net zero roadmap

•

Contribut

ion to the advancement of susta

inab

ity

ecosystem

The Group scorecard includes the following for 2023:

•

Progress against the Group’s aim to achieve net zero by

2050

•

Improve community engagement through employee

volunteering partic

ipat

ion

In addit

ion to the Group Scorecard and LTIP performance

measures, dedicated climate and sustainab

ity-related

objectives apply across funct

ional and regional scorecards

includ

ing the R

isk function, and ind

idual object

ives add a

further link between sustainab

ity and reward. Specif

ically,

relation to the delivery of core aspects of our climate change

approach, several ind

iduals and teams have object

ives

which impact variable remuneration.

119

Standard Chartered

– Annual Report 2022

Strategic report

Indiv

iduals or teams w

ith object

ives wh

ich impact variable remuneration

Indiv

idual or team

Objectives/performance l

inkage

Chief Risk Ofﬁcer (CRO)

The Group CRO is responsible and accountable for Climate Risk under the Financ

ial Conduct

Authority’s Senior Managers and Certif

icat

ion Regime. This includes responsib

ity for overseeing

the delivery of the Climate Risk workplan covering Climate Risk governance, Climate Risk

assessment, Climate Risk scenario analysis and stress testing, and Climate Risk disclosure.

These responsib

ies form part of the Group CRO’s objectives, and therefore d

irectly affect their

remuneration.

Risk

The Group scorecard includes a 10 per cent weighted metric for the sustainab

ity pillar to

achieve net zero by 2050, and another 15 per cent for Risk & Controls.

Climate Risk team

Delivery of the Group’s approach to Climate Risk management, development of tools and

methodologies for risk ident

iﬁcation, quant

icat

ion, management, monitor

ing and report

ing;

build

ing capac

ity and skills for Climate Risk management across three lines of defence and

organisat

ion w

ide.

Sustainable Finance team

Income targets for sustainable ﬁnance strategic revenue related to sustainable ﬁnance products

and delivery of relevant Sustainab

ity Aspirat

ions targets.

Clean Technology team, and other

climate ﬁnance orig

inat

ion teams

Revenue targets for orig

inat

ion of climate ﬁnance.

Property team

Delivery of emiss

ions reduct

ion targets, operational net zero strategy by 2025 and Scope 1 and 2

carbon offsetting.

Supply Chain Management

Delivery of business travel emiss

ion reduct

ion targets and Scope 3 business travel carbon

offsetting.

Corporate Real Estate Partners,

JLL and CBRE

Setting operational KPIs and implemented incent

ives structures for our partners, JLL and CBRE,

who manage day-to-day property management activ

ies. In addit

ion, we further

incent

ise

our partners to accelerate activ

ies, with the aim of achiev

ing our targets ahead of schedule.

Metrics and targets

The data we have used provides the best available approach to making progress, notwithstand

ing the challenges that ex

ist

given the incompleteness and novelty of the data sets and methodologies required. We expect the availab

ity and reliab

ity of

required data to improve over time, and we intend to integrate applicable improved data into our reporting as it becomes

available.

120

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Social Sustainab

ity

While it’s clear that our main impact on society

and the environment is through the businesses

we ﬁnance, we aim to be a force for good for

our clients, people and communit

ies. To us, that

not only means ensuring that we are min

ing

our own environmental impact, but also striv

ing

to be a responsible company: util

ing our skills,

experience and network to ﬁght ﬁnanc

ial cr

ime,

embedding our values across the markets where

we operate, and invest

ing

in our people and

communit

ies.

Conduct and ethics

Good conduct is crit

ical to del

iver

ing pos

ive outcomes for

our clients, markets and stakeholders. It’s fundamental to

achiev

ing our brand prom

ise, here for good.

Our Conduct Risk management approach has been

strengthened since 2021 through several in

iat

ives,

includ

ing

launching a new annual Conduct Risk management

effectiveness review, which increased our abil

ity to

ident

ify

and mit

igate aga

inst Conduct Risk, and re-energis

ing our

engagement strategy.

Our Speaking Up programme is essential to upholding our

here for good brand promise and valued behaviours. The

early disclosure of concerns reduces the risk of ﬁnanc

ial and

reputational loss caused by misconduct. We encourage

colleagues, contractors, clients, suppliers and members of the

public to use our Speaking Up programme which offers secure

and conﬁdential channels to report known or suspected

misconduct without fear of retaliat

ion. Examples of concerns

include breaches of regulatory requirements, breaches of

Group policy or standards, or behaviour that has adverse

effects on colleagues and/or our reputation.

The Speaking Up programme continues to be util

ised across

all countries, businesses and functions, and our 2022 MyVoice

survey found that 88 per cent of employees (87 per cent in

2021) felt comfortable rais

ing concerns through the channels.

Despite this, 2022 saw a 9.6 per cent (113 cases) decrease

noted in the volume of total disclosures via Speaking Up

channels compared with the previous period. This is a trend

noted across the industry, primar

ily due to the COVID-19

pandemic which continues to inﬂuence internal reporting

trends.

Throughout 2022, we hosted a series of awareness campaigns

to ensure that our colleagues understand the importance of

upholding our conduct standards and know how, and when,

to Speak Up. To celebrate Whistleblowers’ Day on 23 June, we

held a month-long global campaign themed around ‘Doing

the Right Thing One Speak Up at a Time’, and in October

colleagues in Africa and the Middle East region ran a regional

Conduct Week. In December, we celebrated Conduct Month

and UN Anti-Corruption Day, under the theme ‘The Stands,

Conduct and Me’, highl

ight

ing the link between the day-to-

day conduct of ind

idual colleagues and the Bank’s Stands.

All campaigns included interact

ive messages from our sen

ior

leaders and live panel discuss

ions des

igned to both set the

tone from the top and nurture it from with

in.

The Group Code of Conduct (the Code) remains the primary

tool through which we set our conduct expectations: it

supports all our polic

ies, sett

ing min

imum standards and

reinforc

ing our valued and expected behav

iours. It also

outlines a framework to help colleagues make good decis

ions.

To reinforce our shared commitment to the highest possible

standards of conduct, each year we ask our colleagues to

reconsider what the Code means to them through a refresher

e-learning, and to reafﬁrm their commitment. In 2022, 99.5 per

cent of our colleagues completed the mandatory train

ing and

afﬁrmation. Colleagues who are overdue w

ithout a valid

reason (i.e. for which they are given an exemption) are subject

to a 40 per cent reduction in their annual variable

compensation for the year they failed to attest.

In 2023, we plan to refresh the Code to improve alignment

with our Stands, strengthen the link between ethics, culture

and conduct, and intertw

ine the Code w

ith the Group

strategy. We also intend to take steps to make the Code more

accessible and relatable to all colleagues.

Download our Group Code of Conduct at

sc.com/codeofconduct

and vis

sc.com/speakingup

to ﬁnd more about how our Speaking Up programme works

% colleagues afﬁrmed commitment to Code of Conduct

99.5

15 Navex 2022 Regional Whistleblow

ing Benchmark Report

121

Standard Chartered

– Annual Report 2022

Strategic report

Fight

ing ﬁnancial cr

ime

Access to the ﬁnancial system helps transform l

ives around

the world, helping to reduce poverty and spur economic

development. But the ﬁnancial system

is also used by those

involved in some of today’s most damaging crimes – from

human trafﬁcking to terror

ism, corruption and the drug trade.

Our ambit

ion

is to help tackle these crimes by making the

ﬁnancial system a host

ile environment for crim

inals and

terrorists. We have no appetite for breaches in laws and

regulations related to ﬁnanc

ial cr

ime.

Our Conduct, Financ

ial Cr

ime & Compliance (CFCC) team sets

our ﬁnancial cr

ime risk management framework. We seek to

safeguard our clients and communit

ies aga

inst money

laundering (AML), terrorist ﬁnanc

ing, sanct

ions, fraud and

other risks, applying core controls such as client due-dil

igence,

screening and monitor

ing, and strengthen

ing our people's

understanding as to how to ident

ify, manage and m

igate

such risks. In addit

ion, ant

i-bribery and corruption (ABC)

controls aim to prevent colleagues, or third parties working on

our behalf, from engaging in bribery.

A particular focus of our ﬁnanc

ial cr

ime invest

igatory teams

the use of data analytics to ident

ify those cl

ients and cases

which generate the greatest ﬁnanc

ial cr

ime risk. This has

strengthened the second line of defence in support of

colleagues in business lines and country teams across the

Group.

To mit

igate the r

isk of ﬁnanc

ial cr

ime, particularly laundering

the proceeds of corruption, in the lead-up to, during and after

major polit

ical elect

ions in footprint markets, the Group

conducts enhanced monitor

ing des

igned to ident

ify and

invest

igate transact

ions of potential concern. In 2022,

enhanced monitor

ing was conducted dur

ing major elections

and times of polit

ical trans

ion or conﬂ

ict, for example in

Kenya, Angola, Nepal, Phil

ipp

ines and Sri Lanka.

Since the beginn

ing of the war

in Ukraine on 24 February 2022,

the authorit

ies of the European Un

ion, United Kingdom,

United States, and several other nations have imposed

multiple rounds of sanctions against Russia by targeting a

wide range of Russian entit

ies (state-owned and pr

ivate) and

a large number of Russian elites, oligarchs, polit

ical leaders

and ofﬁcials. Wh

ile the pace of change and the complexity of

these sanctions against Russia are unprecedented and had

the potential to create areas of uncertainty as to the scope

of some of the regulatory prohib

ions, we have sought to

comply with these requirements fully and promptly. This work

has been a sign

iﬁcant area of focus for F

inanc

ial Cr

ime

Compliance teams during 2022.

We have invested sign

iﬁcantly to ensure our employees are

properly equipped to combat ﬁnanc

ial cr

ime. In 2022, 99.7 per

cent of colleagues and governance body members

completed ﬁnancial cr

ime e-learnings which cover ABC, AML,

sanctions and fraud topics (Asia: 99.7 per cent, AME: 99.7 per

cent, EA: 99.8 per cent, Governance body members: 100 per

cent). For those in high-risk roles and functions, addit

ional

targeted ABC train

ing, masterclasses and forums were held to

deepen understanding. We also shared our Supplier Charter,

which sets out our aspirat

ions and prov

ides guidance related

to ABC, with more than 11,700 suppliers and third parties

across 48 markets.

This was supported by our Group-wide communicat

ion

campaign, ‘The whole story’, which aimed to raise employee

awareness of the real-life impact of ﬁnanc

ial cr

ime and

highl

ight the work we are do

ing ind

idually and collectively to

build a robust Risk Culture and lead in the ﬁght against

ﬁnancial cr

ime. In 2022, the theme for The Whole Story was

‘Connecting the Dots’ and focused on our efforts to ﬁght crime

by ‘Connecting, Collaborating and Communicat

ing’, and

build

ing partnersh

ips with government bodies, regulators and

other global banks to strengthen our collective defences.

These public-private partnerships include in

iat

ives w

ith the

International Center for Miss

ing & Explo

ited Children which

focuses on the use of cryptoassets in the trade of child

exploitat

ion and abuse mater

ial; the National Cyber Forensics

and Train

ing All

iance which assists law enforcement in

ident

ify

ing sign

iﬁcant organ

ised groups engaged in business

email compromise schemes; and US Customs and Border

Protection which focuses on economic security, trade security,

forced labour and other risk areas, such as Trade Based

Money Laundering. These partnerships are producing

material new ins

ights about var

ious crim

inal typolog

ies and

advances in how we collectively combat ﬁnanc

ial cr

ime in an

increas

ing number of jurisd

ict

ions,

includ

ing S

ingapore, South

Africa, the UK and Hong Kong.

Throughout 2022, we also engaged with peers in contribut

ing

to the ongoing dialogue to advance effectiveness in

combating ﬁnanc

ial cr

ime through our active partic

ipat

ion in

several of the leading industry groups, includ

ing the

Wolfsberg Group of global banks (Including our Global Head

of FCC serving as co-chair and hosting the September

meeting of the organisat

ion), Mad

ison Group and UK Finance.

We also partic

ipated

in discuss

ions and forums w

ith many

external thought leaders includ

ing the World Econom

Forum’s Partnering Against Corruption Init

iat

ive (PACI).

For more, vis

sc.com/ﬁghtingﬁnancialcr

ime

Read our Fair Pay Report at

https://av.sc.com/corp-en/content/docs/fair-pay-report.pdf

122

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

Respecting human rights

We strive to be a responsible company and safeguard human

rights across our business. We recognise that the global

nature of our business may expose us to the risk of modern

slavery and human trafﬁcking (MSHT)

in our operations,

supply chain and customer and client relationsh

ips, and we

are committed to ident

ify

ing and mit

igat

ing these risks.

Our approach to managing and mit

igat

ing environmental

and social risk is reﬂected in our Sustainab

ity Framework,

which includes a Posit

ion Statement on Human R

ights. The

framework outlines the cross-sector and thematic Posit

ion

Statements that we use to assess whether to provide ﬁnanc

ial

services to our clients. These documents, informed by

internat

ional best pract

ice and the International Finance

Corporation’s (IFC) Environmental and Social Performance

Standards, outline the cross-sector standards that form part

of the credit approval processes for CCIB clients and

transactions.

Our Modern Slavery Statement details our actions to tackle

MSHT across our CCIB client base, supply chain and workforce.

In 2022, we enhanced our human rights due dil

igence by

requir

ing CCIB cl

ients to provide evidence of their polic

ies and

processes to manage potential human rights risks in their

operations or supply chains. We also developed more detailed

guidance for clients on grievance mechanisms in line with IFC

guidel

ines and UN Gu

ing Pr

inc

iples for Bus

iness and Human

Rights. We continued to work with third parties, such as the

Thun Group and Sustainable Shipp

ing In

iat

ive, to promote

coordinated action against MSHT.

We completed a risk review of our supply chain and

supplemented our MSHT assessment questionna

ire w

ith

geopolit

ical analys

is. We also plan to review enhancements to

MSHT controls in our procurement system alongside broader

ESG requirements under review.

For our workforce, we introduced a refreshed set of Industrial

Relations princ

iples that take

into considerat

ion the

fundamental ILO conventions. We also expanded pay gap

reporting to include ethnic

ity data. Our ethn

ity pay gap

reporting covered the United Kingdom and United States,

having achieved the min

imum requ

ired levels of ethnic

ity

declared by employees in these regions to make pay gap

analysis possible.

Impact in our communit

ies

Young people across the world – women and girls in particular

– continue to face barriers to economic inclus

ion. Many fall

short of their potential and become stuck in low-income

poverty. The future of work also presents challenges – an

estimated 50 per cent of employees worldwide will need

reskill

ing by 2025

, as adoption of technology increases.

Accessing the relevant train

ing w

ill be vital for young people.

We seek to amplify our social impact and continue to support

communit

ies through Futuremakers, our global

iat

ive to

tackle youth economic inclus

ion. Futuremakers supports

disadvantaged young people, especially girls and people with

visual impa

irments, to learn new sk

ills and improve their

chances of getting a job or starting their own business.

In 2022, we contributed $14.7 mill

ion to Futuremakers,

includ

ing

donations from the Group and fundrais

ing of $3.8 m

ill

ion from

our employees and partners, to enable the next generation to

learn, earn and grow.

With our internat

ional and local partners,

includ

ing the

Standard Chartered Foundation, in 2022 we reached more

than 335,000 young people through Futuremakers, includ

ing

provid

ing ﬁnancial educat

ion to 102,248 unbanked or young

people. In India, we continue to support eye health and water,

sanitat

ion and hyg

iene education (WASHE) in alignment with

development prior

ies in the market.

Our Futuremakers Impact Report reviews the progress we

have made through Futuremakers since its launch in 2019.

Highl

ights

include reaching more than one mill

ion young

people (74 per cent women) across 43 markets and rais

ing

$78.7 mill

ion. Key results show that s

ince 2019, 28,423 young

people have entered employment; 5,202 jobs have been

created by young entrepreneurs; and 40,615 adolescent girls

are more likely to continue in secondary education.

Collective effort is needed to accelerate progress in tackling

inequal

ity and promot

ing economic growth. In 2022, we

published ins

ights from our partnersh

ip with Unilever

supporting over 25,000 small-scale retailers affected by

COVID-19 to build more resil

ient bus

inesses through

dig

isat

ion. We joined the UK Fore

ign and Commonwealth

Development Ofﬁce led Girls’ Education Skills Partnership

alongside 10 other companies, and agreed a partnership with

Primark to design solutions to support the ﬁnanc

ial health of

garment sector workers.

Read our Modern Slavery Slavery Statement at

sc.com/modernslavery

Read out Human Rights Posit

ion Statement at

sc.com/posit

ionstatements

123

Standard Chartered

– Annual Report 2022

Strategic report

16 World Economic Forum, The Future of Jobs Report 2020, Page 6

To inform access to ﬁnance solutions for young people, 1,270

young people from 21 markets partic

ipated

in research

conducted with Business Fights Poverty and Cambridge

Univers

ity. The Futuremakers Ins

ights Paper 2022 provided

informat

ion and data for the th

ird edit

ion of the Futuremakers

Forum. More than 1,700 stakeholders from 61 markets

partic

ipated

in this two-day virtual event to hear ﬁrst-hand

from Futuremakers partic

ipants, and to explore how to

advance inclus

ive ﬁnance.

Over 39 per cent of our colleagues gave back to the

community through volunteering in 2022, contribut

ing almost

50,000 days of their time to support worthwhile causes.

Our IGNITE programme aims to unlock the potential of female

talent across the Group. In 2022, we partnered with IGNITE to

extend this coaching support to Futuremakers partic

ipants to

help them change, challenge and stretch themselves in

pursuit of their goals. In addit

ion, we hosted 12 Mentor’s Den

sessions across our markets, supporting over 300 young

people with strategic advice on personal brand, future skills

and banking services. We mobil

ised our colleagues to support

famil

ies affected by the ﬂoods

in Pakistan and increased our

provis

ion of three volunteer

ing days annually to ﬁve per

colleague in the Europe region to help support displaced

people from Ukraine.

In 2023, we will set up a women entrepreneurs’ network

involv

ing alumn

i of Futuremakers and expand our women’s

entrepreneurial support further across our footprint markets.

Furthermore, in alignment with our commitment to the UN

Princ

iples for Respons

ible Banking, we will ﬁnal

ise our

impact

analysis to better understand our broader impact. This work

will support us to shape our onwards Futuremakers strategy

and further increase employee volunteering support for

communit

ies.

Read more about Futuremakers by Standard Chartered at

sc.com/futuremakers

Read our Futuremakers impact report at

sc.com/futuremakersimpact

The content contained in the above Sustainab

ity section (includ

ing, for the avo

idance of doubt, the TCFD disclosures)

of this Annual Report is subject to the statements included in (i) the ‘Forward-Looking Statements’ section; and (i

i) the

‘Basis of Preparation and Caution Regarding Data Lim

itat

ions’ section provided under ‘Important Notices’ at page 498.

124

Standard Chartered

– Annual Report 2022

Strategic report

Sustainab

ity

This table sets out where shareholders and stakeholders can ﬁnd informat

ion about key non-ﬁnancial matters

in this report, in

compliance with the non-ﬁnanc

ial report

ing requirements contained in sections 414CA and 414CB of the Companies Act 2006.

Further disclosures are available on

sc.com

and in our 2022 ESG Reporting Index, published at

sc.com/esg-reporting-index

in Q1 2023.

Reporting requirement

Where to read more in this report about our polic

ies and

impact

(includ

ing r

isks, policy embedding, due dil

igence and outcomes)

Page

Environmental matters

Risk overview

• Risk overview

Stakeholders and Sustainab

ity

•

Our approach to climate change

•

Our net zero plan

•

TCFD summary and alignment index

•

Reducing our environmental footprint in our operations and supply chain

•

Reducing our ﬁnanced emiss

ions

•

Catalysing ﬁnance and partnerships for transit

ion

•

Mit

igat

ing environmental and social risk

•

Assessing the resil

ience of our strategy us

ing scenario analysis

•

Mit

igat

ing the ﬁnanc

ial and non-ﬁnancial r

isks from climate change

•

Governance of our sustainab

ity agenda

113

Directors' report

•

Environmental impact of our operations

227

Employees

Engaging stakeholders

• Employees

Stakeholders and Sustainab

ity

• Conduct and ethics

120

Directors' report

•

Employee polic

ies and engagement

223

• Health and safety

224

Human rights

Engaging stakeholders

• Suppliers

Stakeholders and Sustainab

ity

• Respecting human rights

122

Social matters

Engaging stakeholders

• Society

Stakeholders and Sustainab

ity

•

Impact in our communit

ies

122

Anti-corruption and bribery

Risk overview

Stakeholders and Sustainab

ity

• Conduct and ethics

120

• Fight

ing ﬁnancial cr

ime

121

Directors' report

• Polit

ical donat

ions

219

Descript

ion of bus

iness model

Business model

Non-ﬁnancial KPIs

Employees

• Employee engagement (eNPS)

•

Gender and ethnic

ity pay d

isclosure

•

Gender divers

ity

in senior roles

•

Train

ing on ﬁnancial cr

ime (includ

ing ABC, AML, sanct

ions and fraud)

121

•

Recommitment to the Code of Conduct

120

• Supplementary people informat

ion

484

Environment and Society

•

Sustainab

ity Aspirat

ions ach

ieved or on track

•

Supplementary informat

ion: Env

ironmental and social risk management

488

• Supplementary informat

ion: Env

ironment

489

•

Supplementary informat

ion: Char

itable giv

ing

492

Princ

ipal r

isks and uncertaint

ies

Risk review and Capital review

234

Vis

sc.com/environmentcriter

for our carbon emiss

ions cr

iter

ia and

sc.com/environmentalassurance

for Global Documentation’s Assurance Statement of our

Scope 1 and 2 emiss

ions, and waste and water data

Non-ﬁnancial

informat

ion statement



Our Sustainable

Accounts go global



In 2022, we launched our innovat

ive Susta

inable Account for

corporate clients in Mainland China, Singapore, Dubai, Hong

Kong, Taiwan, Malaysia and the US, after pilot launches in the

UK and UAE in 2021. Our Sustainable Account offers clients the

ﬂexib

ity of retain

ing access to the

ir cash while supporting

activ

ies aligned with the United Nations Sustainable

Development Goals. Cash placed into the Sustainable

Account is referenced against projects aligned with the Bank’s

Green and Sustainable Product Framework, developed with

the support of Sustainalyt

ics, an

independent provider of

environmental, social and governance research and ratings.

Read more online at

www.sc.com/sustainableaccounts

125

Standard Chartered

– Annual Report 2022

Strategic report

126

Standard Chartered

– Annual Report 2022

Strategic report

Underlying versus statutory results

Reconcil

iat

ions between underlying and statutory results are set out in the tables below:

Operating income by client segment

2022

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Underlying operating income

10,045

6,016

165

16,255

Restructuring

–

Other items

–

Statutory operating income

10,086

6,016

187

16,318

2021 (Restated)¹

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Underlying operating income

8,407

5,735

570

14,713

Restructuring

–

(41)

(32)

Other items

–

Statutory operating income

8,416

5,735

529

14,701

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment. In 2022

Prior periods have been restated.

Operating income by region

2022

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

$mill

ion

Total

$mill

ion

Underlying operating income

11,213

2,606

2,353

16,255

Restructuring

(1)

Other items

–

Statutory operating income

11,256

2,608

2,352

102

16,318

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

$mill

ion

Total

$mill

ion

Underlying operating income

10,448

2,446

2,003

(184)

14,713

Restructuring

(30)

(35)

(32)

Other items

–

Statutory operating income

10,478

2,449

1,973

(199)

14,701

Underlying versus statutory results

reconcil

iat

ions

127

Standard Chartered

– Annual Report 2022

Strategic report

Proﬁt before taxation (PBT)

2022

Underlying

$mill

ion

Regulatory ﬁne

$mill

ion

Restructuring

$mill

ion

Net gain on

businesses

disposed of/

held for sale

$mill

ion

Goodwill

and other

impa

irment

$mill

ion

Statutory

$mill

ion

Operating income

16,255

–

16,318

Operating expenses

(10,743)

–

(170)

–

(10,913)

Operating proﬁt/(loss) before

impa

irment losses and taxat

ion

5,512

–

(127)

–

5,405

Credit impa

irment

(838)

–

(836)

Other impa

irment

(79)

–

(38)

–

(322)

(439)

Proﬁt from associates and jo

int ventures

167

–

(11)

–

156

Proﬁt/(loss) before taxation

4,762

–

(174)

(322)

4,286

2021

Underlying

$mill

ion

Regulatory ﬁne

$mill

ion

Restructuring

$mill

ion

Net gain on

businesses

disposed of/

held for sale

$mill

ion

Goodwill

and other

impa

irment

$mill

ion

Statutory

$mill

ion

Operating income

14,713

–

(32)

–

14,701

Operating expenses

(10,375)

(62)

(487)

–

(10,924)

Operating proﬁt/(loss) before

impa

irment losses and taxat

ion

4,338

(62)

(519)

–

3,777

Credit impa

irment

(263)

–

(254)

Other impa

irment

(55)

–

(17)

–

(300)

(372)

Proﬁt from associates and jo

int ventures

176

–

196

Proﬁt/(loss) before taxation

4,196

(62)

(507)

(300)

3,347

Goodwill and other impa

irment

include $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021

comparative has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt to Goodwill and

other impa

irment

Proﬁt before taxation (PBT) by client segment

2022

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Operating income

10,045

6,016

165

16,255

External

8,899

4,989

2,338

16,255

Inter-segment

1,146

1,027

–

(2,173)

–

Operating expenses

(5,480)

(4,148)

(336)

(779)

(10,743)

Operating proﬁt/(loss) before impa

irment losses

and taxation

4,565

1,868

(307)

(614)

5,512

Credit impa

irment

(425)

(262)

(16)

(135)

(838)

Other impa

irment

(40)

(10)

(24)

(5)

(79)

Proﬁt from associates and jo

int ventures

–

(16)

183

167

Underlying proﬁt/(loss) before taxation

4,100

1,596

(363)

(571)

4,762

Restructuring

(50)

(63)

(1)

(60)

(174)

Goodwill and other impa

irment

–

(322)

Other items

–

Statutory proﬁt/(loss) before taxation

4,050

1,533

(364)

(933)

4,286

Goodwill and other impa

irment

include $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021

comparative has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt to Goodwill and

other impa

irment

128

Standard Chartered

– Annual Report 2022

Strategic report

Underlying versus statutory results

Proﬁt before taxation (PBT) by client segment

continued

2021 (Restated)

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Operating income

8,407

5,735

570

14,713

External

7,952

5,375

1,385

14,713

Inter-segment

455

360

–

(815)

–

Operating expenses

(5,278)

(4,227)

(253)

(617)

(10,375)

Operating proﬁt/(loss) before impa

irment losses

and taxation

3,129

1,508

(252)

(47)

4,338

Credit impa

irment

(282)

(3)

(22)

(263)

Other impa

irment

(49)

–

(6)

(55)

Proﬁt from associates and jo

int ventures

–

(6)

182

176

Underlying proﬁt/(loss) before taxation

3,124

1,226

(261)

107

4,196

Restructuring

(114)

(235)

(3)

(155)

(507)

Goodwill and other impa

irment

–

(300)

Other items

–

(62)

(42)

Statutory proﬁt/(loss) before taxation

3,010

991

(244)

(410)

3,347

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022.

Prior periods have been restated.

Goodwill and other impa

irment

include impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021 comparative

has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt to Goodwill and other impa

irment.

Proﬁt before taxation (PBT) by region

2022

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

$mill

ion

Total

$mill

ion

Operating income

11,213

2,606

2,353

16,255

Operating expenses

(6,867)

(1,669)

(1,564)

(643)

(10,743)

Operating proﬁt/(loss) before impa

irment losses

and taxation

4,346

937

789

(560)

5,512

Credit impa

irment

(790)

(120)

(5)

(838)

Other impa

irment

(47)

(3)

(31)

(79)

Proﬁt from associates and jo

int ventures

179

–

(12)

167

Underlying proﬁt/(loss) before taxation

3,688

819

863

(608)

4,762

Restructuring

(75)

(29)

(23)

(47)

(174)

Goodwill and other impa

irment

(308)

–

(14)

(322)

Other items

–

Statutory proﬁt/(loss) before taxation

3,325

790

840

(669)

4,286

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

$mill

ion

Total

$mill

ion

Operating income

10,448

2,446

2,003

(184)

14,713

Operating expenses

(6,773)

(1,623)

(1,485)

(494)

(10,375)

Operating proﬁt/(loss) before impa

irment losses

and taxation

3,675

823

518

(678)

4,338

Credit impa

irment

(434)

144

(7)

(263)

Other impa

irment

–

(1)

(18)

(36)

(55)

Proﬁt from associates and jo

int ventures

175

–

176

Underlying proﬁt/(loss) before taxation

3,416

856

644

(720)

4,196

Restructuring

(286)

(25)

(69)

(127)

(507)

Goodwill and other impa

irment

(300)

–

(300)

Other items

–

(42)

Statutory proﬁt/(loss) before taxation

2,830

831

575

(889)

3,347

Goodwill and other impa

irment

include $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021

comparative has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt to Goodwill and other

impa

irment

129

Standard Chartered

– Annual Report 2022

Strategic report

Return on tangible equity (RoTE)

2022

$mill

ion

2021

$mill

ion

Average parent company Shareholders’ Equity

44,237

46,383

Less Preference share premium

(1,494)

Less Average intang

ible assets

(5,557)

(5,218)

Average Ordinary Shareholders’ Tangible Equity

37,186

39,671

Proﬁt for the period attributable to equity holders

2,902

2,313

Non-controlling interests

Div

idend payable on preference shares and AT1 class

ied as equ

ity

(401)

(410)

Proﬁt for the period attributable to ordinary shareholders

2,547

1,905

Items normalised:

Provis

ion for regulatory matters

–

Restructuring

174

507

Goodwill and other impa

irment¹

322

300

Net gains on sale of businesses

(20)

Ventures FVOCI unrealised (gains)/losses net of tax

(36)

Tax on normalised items

(24)

(87)

Underlying proﬁt for the period attributable to ordinary shareholders

2,963

2,705

Underlying return on Tangible Equity

8.0%

6.8%

Statutory return on Tangible Equity

6.8%

4.8%

Other impa

irment

includes $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021 comparative

has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt.

2022

Corporate,

Commercial&

Institut

ional

Banking

Consumer,

Private &

Business

Banking

Ventures

Central &

other Items

(Segment)

Total

Underlying RoTE

13.7

15.8

nm²

(14.0)

8.0

Regulatory ﬁne

–

Restructuring

Of which: Income

0.2

–

0.1

Of which: Expenses

(0.3)

(0.8)

(1.2)

(0.4)

(0.5)

Of which: Credit impa

irment

–

Of which: Other impa

irment

(0.1)

–

(0.3)

(0.1)

Of which: Proﬁt from associates and jo

int ventures

–

(0.1)

–

Net gain on businesses disposed/held for sale

–

0.3

0.1

Goodwill and other impa

irment

–

(4.5)

(0.9)

Ventures FVOCI Unrealised gains net of taxes

–

35.6

–

0.1

Tax on normalised items

0.1

0.2

0.3

(0.1)

0.1

Statutory RoTE

13.6

15.2

nm²

(19.2)

6.8

130

Standard Chartered

– Annual Report 2022

Strategic report

Underlying versus statutory results

2021 (Restated)

1, 3

Corporate,

Commercial&

Institut

ional

Banking

Consumer,

Private &

Business

Banking

Ventures

Central &

other Items

(Segment)

Total

Underlying RoTE

9.6

11.6

nm²

(5.4)

6.8

Regulatory ﬁne

–

(0.8)

(0.2)

Restructuring

Of which: Income

–

(0.6)

(0.1)

Of which: Expenses

(0.6)

(3.0)

(45.2)

(1.2)

Of which: Credit impa

irment

–

Of which: Other impa

irment

0.1

–

(0.6)

–

Of which: Proﬁt from associates and jo

int ventures

–

0.3

0.1

Net loss on businesses disposed/held for sale

–

nm²

–

0.1

Goodwill and other impa

irment

–

(4.1)

(0.8)

Ventures FVOCI Unrealised gains/(losses) net of taxes

–

nm²

–

(0.1)

Tax on normalised items

0.2

0.8

(59.7)

–

0.2

Statutory RoTE

9.3

9.4

nm²

(12.3)

4.8

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022.

Prior periods have been restated.

2 Not meaningful

Goodwill and other impa

irment

include $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021

comparative has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt to Goodwill and other

impa

irment

RoTE for a segment is calculated as current year’s proﬁts to weighted average tangible equity of that segment. Full details of

RoTE calculation is provided in APM deﬁn

ions.

Net charge-off ratio

2022

2021

Credit

impa

irment

(charge)/

release for the

year/period

$mill

ion

Net average

exposure

$mill

ion

Net

charge-off

ratio

Credit

impa

irment

(charge)/

release for the

year/period

$mill

ion

Net average

exposure

$mill

ion

Net

charge-off

ratio

Stage 1

317,962

0.00%

319,860

0.00%

Stage 2

(325)

13,486

2.41%

(65)

17,896

0.36%

Stage 3

(423)

3,022

14.00%

(194)

3,740

5.19%

Total exposure

(743)

334,470

0.22%

(258)

341,496

0.08%

Earnings per ordinary share (EPS)

2022

Underlying

$ mill

ion

Provis

ion for

regulatory

matters

$ mill

ion

Restructuring

$ mill

ion

Net loss

on sale of

businesses

$ mill

ion

Goodwill

& other

impa

irment

$ mill

ion

Tax on

normalised

items

$ mill

ion

Statutory

$ mill

ion

Proﬁt/(loss) for the year attributable to ordinary

shareholders

2,999

–

(174)

(322)

2,547

Basic – Weighted average number of shares (mill

ions)

2,966

Basic earnings per ordinary share (cents)

101.1

85.9

2021 (Restated)¹

Underlying

$ mill

ion

Provis

ion for

regulatory

matters

$ mill

ion

Restructuring

$ mill

ion

Net loss

on sale of

businesses

$ mill

ion

Goodwill

& other

impa

irment

$ mill

ion

Tax on

normalised

items

$ mill

ion

Statutory

$ mill

ion

Proﬁt/(loss) for the year attributable to ordinary

shareholders

2,667

(62)

(507)

(300)

1,905

Basic – Weighted average number of shares (mill

ions)

3,108

Basic earnings per ordinary share (cents)

85.8

61.3

Other Impairment includes $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021 comparative

has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt which has resulted in the restatement

of Underlying basic earnings per ordinary share (cents) and Underlying diluted earnings per ordinary share (cents)

131

Standard Chartered

– Annual Report 2022

Strategic report

An alternative performance measure is a ﬁnanc

ial measure of h

istor

ical or future ﬁnancial performance, ﬁnancial pos

ion, or

cash ﬂows, other than a ﬁnancial measure deﬁned or spec

ied

in the applicable ﬁnanc

ial report

ing framework. The following

are key alternative performance measures used by the Group to assess ﬁnanc

ial performance and ﬁnancial pos

ion.

Measure

Deﬁnit

ion

Constant currency basis

A performance measure on a constant currency basis is presented such that comparative periods

are adjusted for the current year’s functional currency rate. The following balances are presented on

a constant currency basis when described as such:

• Operating income

• Operating expenses

• Proﬁt before tax

•

RWAs or Risk-weighted assets

Underlying/Normalised

A performance measure is described as underlying/normalised if the statutory result has been

adjusted for restructuring and other items representing proﬁts or losses of a capital nature; amounts

consequent to investment transactions driven by strategic intent, excluding amounts consequent to

Ventures transactions, as these are considered part of the Group’s ordinary course of business; and

other infrequent and/or exceptional transactions that are sign

iﬁcant or mater

ial in the context of

the Group’s normal business earnings for the period, and items which management and investors

would ordinar

ily

ident

ify separately when assess

ing performance period-by-period. A reconcil

iat

ion

between underlying/normalised and statutory performance is contained in Note 2 to the ﬁnanc

ial

statements. The following balances and measures are presented on an underlying basis when

described as such:

• Operating income

• Operating expense

• Proﬁt before tax

•

Earnings per share (basic and diluted)

• Cost-to-income ratio

• Jaws

•

RoTE or Return on tangible equity

Advances-to-deposits/

customer advances-to-deposits

(ADR) ratio

The ratio of total loans and advances to customers relative to total customer accounts, excluding

approved balances held with central banks, conﬁrmed as repayable at the point of stress. A low

advances-to-deposits ratio demonstrates that customer accounts exceed customer loans resulting

from emphasis placed on generating a high level of stable funding from customers.

Cost-to-income ratio

The proportion of total operating expenses to total operating income.

Cover ratio

The ratio of impa

irment prov

ions for each stage to the gross loan exposure for each stage.

Cover ratio after collateral/

cover ratio includ

ing collateral

The ratio of impa

irment prov

ions for stage 3 loans and real

isable value of collateral held against

these non-performing loan exposures to the gross loan exposure of stage 3 loans.

Gross yield

Statutory interest income div

ided by average

interest earning assets.

Jaws

The difference between the rates of change in revenue and operating expenses. Posit

ive jaws

occurs when the percentage change in revenue is higher than, or less negative than, the

corresponding rate for operating expenses.

Loan loss rate

Total credit impa

irment for loans and advances to customers over average loans and advances to

customers.

Net charge-off ratio

The ratio of net credit impa

irment charge or release to average outstand

ing net exposures.

Net tangible asset value

per share

Ratio of net tangible assets (total tangible assets less total liab

ies) to the number of ord

inary

shares outstanding at the end of a reporting period.

Net yield

Gross yield less rate paid.

NIM or Net interest margin

Net interest income adjusted for interest expense incurred on amortised cost liab

ies used to fund

the Financ

ial Markets bus

iness, div

ided by average

interest-earning assets excluding ﬁnanc

ial assets

measured at fair value through proﬁt or loss.

RAR per FTE or Risk adjusted

revenue per full-time equivalent

Risk adjusted revenue (RAR) is deﬁned as underlying operating income less underlying impa

irment

over the past 12 months. RAR is then div

ided by the 12 month roll

ing average full-time equivalent

(FTE) to determine RAR per FTE.

Rate paid

Statutory interest expense adjusted for interest expense incurred on amortised cost liab

ies used to

fund ﬁnancial

instruments held at fair value through proﬁt or loss, div

ided by average

interest

bearing liab

ies.

RoTE or Return on ordinary

shareholders’ tangible equity

The ratio of the current year’s proﬁt available for distr

ibut

ion to ordinary shareholders to the

weighted average tangible equity, being ordinary shareholders’ equity less the average goodwill

and intang

ible assets for the report

ing period. Where a target RoTE is stated, this is based on proﬁt

and equity expectations for future periods.

Underlying RoTE

The ratio of the current year’s proﬁt available for distr

ibut

ion to ordinary shareholders plus fair value

movements through other comprehensive income relating to the Ventures segment to the weighted

average ordinary shareholders’ equity for the reporting period.

TSR or Total shareholder return

The total return of the Group’s equity (share price growth and div

idends) to

investors.

Alternative performance measures

132

Standard Chartered

– Annual Report 2022

Strategic report

Viab

ity statement

The directors are required to issue a viab

ity statement regarding

the Group, explain

ing the

ir assessment of the prospects of the

Group over an appropriate period of time and state whether they

have reasonable expectation that the Group will be able to

continue in operation and meet its liab

ies as they fall due.

The directors are to also disclose the period of time for which they

have made the assessment and the reason they consider that

period to be appropriate.

In consider

ing the v

iab

ity of the Group, the directors have

assessed the key factors includ

ing, but not l

ited to;

inﬂat

ionary

pressures, sovereign downgrades and recession, the war in

Ukraine and other geopolit

ical events l

ikely to affect the Group’s

business model and strategic plan, future performance, capital

adequacy, solvency and liqu

ity taking into account the

emerging risks as well as the princ

ipal r

isks.

The viab

ity assessment has been made over a period of three

years, which the directors consider appropriate as it is with

in both

the Group’s strategic planning horizon and, the basis upon which

its regulatory capital stress tests are undertaken and is

representative of the continuous level of regulatory change

affecting the ﬁnanc

ial serv

ices industry. The directors will continue

to monitor and consider the appropriateness of this period.

The directors have reviewed the corporate plan, the output of the

Group’s formalised process of budgeting and strategic planning.

For the 2023 Corporate Plan, the forward-looking cash ﬂows and

balances includes the antic

ipated

impact of global interest rates

on revenues and inﬂat

ionary pressure on costs . The corporate

plan is evaluated and approved each year by the Board with

conﬁrmation from the Group Ch

ief Risk Ofﬁcer that the Plan is

aligned with the Enterprise Risk Management Framework and

Group Risk Appetite Statement and considers the Group’s future

projections of proﬁtabil

ity, cash ﬂows, capital requirements and

resources, liqu

ity ratios and other key ﬁnanc

ial and regulatory

ratios over the period. The corporate plan details the Group’s key

performance measures, of forecast proﬁt, CET 1 capital ratio

forecast, return on tangible equity forecasts, cost to income ratio

forecasts and cash investment project

ions. The Board has

reviewed the ongoing performance management process of the

Group by comparing the statutory results to the budgets and

corporate plan.

The Group performs enterprise-wide stress tests using a range of

bespoke hypothetical scenarios that explore the resil

ience of the

Group to shocks to its balance sheet and business model.

To assess the Group’s balance sheet vulnerabil

ies and capital

and liqu

ity adequacy, severe but plausible macro-ﬁnanc

ial

scenarios explore shocks that trigger one or more of:

•

Global slowdowns includ

ing recess

ions in China, Asian and

Western economies that can be acute or more protracted,

resulting in severe declines in propertyprices

•

Sharp falls in world trade volumes and disrupt

ion to global

supply chains, includ

ing the severe worsen

ing of trade tensions

and rise of

protection

ism.

•

Inﬂationary pressures in the global economy includ

ing volat

ity

in commodity prices

•

Sign

iﬁcant r

ises in interest rates and depreciat

ion

in emerging

market currencies, resulting in heightened sovereign risk

•

Financ

ial market volat

ity,

includ

ing s

ign

iﬁcant moves

in asset

prices driven by a combinat

ion of macroeconom

ic and

geopolit

ical events

This year, the primary focus has been on the effects of ris

ing

interest rates and inﬂat

ion, comb

ined with severe market volatil

ity

and a global economic downturn.

The Group has explored the

impact of ris

ing rates and

inﬂat

ion on customers’ ab

ity to serv

ice

debt and considered how net interest income sensit

ity evolves

under various scenarios.

For the 2022 ICAAP submiss

ion for cl

imate risk, the Group moved

towards a more quantitat

ive approach compar

ing the worst

(annualised) ﬁve-year loss period from all three NGFS scenarios to

the projected peak losses from the 2022 Group ICAAP. The Late

Action scenario was ident

iﬁed to dr

ive the maximum difference in

losses in a ﬁve year period; however, this was lower than losses

experienced under the ICAAP macroeconomic stress scenario,

concluding that an addit

ional cap

ital add-on was not required

for climate risk.

In 2022, the Group further assessed the impact from Climate risk

on our CCIB corporate client portfolio based on three

International Energy Agency (IEA) scenarios and three Phase 2

NGFS scenarios and partic

ipated

in the Monetary Authority of

Singapore Industry-Wide Stress Test. The impact of sea level rises

under various Intergovernmental Panel on Climate Change (IPCC)

Representative Concentration Pathways (RCP) scenarios was

used to explore the Physical Risk impact on the Consumer, Private

and Business Banking (CPBB) resident

ial mortgage portfol

io.

Under this range of scenarios, the results of these stress tests

demonstrate that the Group has sufﬁcient cap

ital and liqu

ity to

continue as a going concern and meet regulatory min

imum

capital and liqu

ity requirements.

To assess the Group’s business model vulnerabil

ies, extreme and

unlikely scenarios are explored that, by design, result in the

Group’s business model no longer being viable these scenarios

have included for the Group extreme geopolit

ical tens

ions

disrupt

ing cap

ital ﬂows with

in the Group’s footpr

int and cyber

security attacks. Insights from these reverse stress tests can inform

strategy, risk management and capital and liqu

ity planning.

Further informat

ion on stress test

ing is provided in the

Risk management approach

section (page 295).

The directors further considered the Group’s Internal Liqu

ity

Adequacy Assessment Process (ILAAP), which considers the

Group’s liqu

ity posit

ion,

its framework and whether sufﬁc

ient

liqu

ity resources are being mainta

ined to meet l

iab

ies as they

fall due. Funding and liqu

ity was considered in the context of

the risk appetite metrics, includ

ing the ADR and LCR rat

ios.

Further informat

ion on stress test

ing is provided in the Risk

management approach section (page 297).

The Board Risk Committee (“BRC”) exercises oversight on behalf

of the Board of the key risks of the Group and makes

recommendations to the Board on the Group’s Risk Appetite

Statement. These risks include, amongst others; credit, traded,

treasury, operational and technology, reputational and

sustainab

ity, compliance, informat

ion and cyber secur

ity

ﬁnancial cr

ime and model risks. The BRC further exercises

oversight over the integrated risks of climate, dig

ital asset and

third party which cut across all princ

ipal r

isks.

Viab

ity statement

133

Standard Chartered

– Annual Report 2022

Strategic report

The BRC receives regular reports that inform it of the Group’s key

risks, as well as updates on the macroeconomic environment,

geo-polit

ical outlook, market developments, and regulatory

updates on relevant matters. In 2022, the BRC had deeper

discuss

ion on: Blue Sky Th

ink

ing/ Hor

izon Scanning, CCIB Risk

deep dives, specif

ically the r

isk to the Group’s assets, operations

and ind

iduals due to the potential for unauthorised access, use,

disclosure, disrupt

ion, mod

icat

ion or destruction of informat

ion.

GSAM second line to ﬁrst line transit

ion, Commod

ity Traders

Framework, Credit Portfolio Management annual review, cloud

governance and material cloud deployments, Reputational and

Sustainab

ity risk includ

ing the Groups approach to

ident

iﬁcation

and management thereof. CPBB Risk Review, Safety and Security

risk, Credit Risk review includ

ing how COVID-19 related restr

ict

ions

are lift

ing

in many of the groups markets. Chief Risk ofﬁcer report

around balance sheet capital and liqu

ity management. SC

Ventures risk and governance, Taiwan tensions and actions

proposed by management, emerging ﬁnanc

ial cr

ime threats and

the appointment of the new GCRO.

Based on the informat

ion rece

ived, the directors’ considered the

princ

ipal uncerta

int

ies as well as the pr

inc

ipal r

isks in their

assessment of the Group’ viab

ity, how these impact the risk

proﬁle, performance and viab

ity of the Group and any specif

mit

igat

ing or remedial actions necessary.

For further details of informat

ion relevant to the d

irectors,

assessment can be found in the following sections of the annual

report and accounts:

•

The Group’s Business model (pages 18 to 20) and Strategy

(pages 22 to 23)

•

The Group’s current posit

ion and prospects

includ

ing factors

likely to affect future results and development, together with a

descript

ion of ﬁnancial and fund

ing posit

ions are descr

ibed in

the client segment reviews and regional reviews (pages 26 to

31)

•

An update on the key risk themes of the Group is discussed in

the Risk overview, fo und in the Strategic Report (pages 42 to 51)

•

The BRC section of the Director’s report (pages 170 to 175)

•

The Group’s Topical and Emerging Risks, sets out the key

external factors that could impact the Group in the coming

year (page 48 to pages 51).

•

The Group’s Enterprise Risk Management Framework details

how the Group ident

iﬁes, manages and governs r

isk (pages 295

to 300)

•

The Group’s Risk proﬁle provides an analysis of our risk

exposures across all major risk types (page 301 to 319)

•

The capital posit

ion of the Group, regulatory development and

the approach to management and allocation of capital are set

out in the Capital review (pages 320 to 325)

Having considered all the factors outlined above, the directors

conﬁrm that they have a reasonable expectation that the Group

will be able to continue in operation and meet its liab

ies as they

fall due over the period of the assessment up to 31 December

2025.

Our Strategic report from pages 01 to 133 has been

reviewed and approved by the Board.

Bill Winters

Group Chief Executive

16 February 2023

Directors’ report

136

Group Chairman’s governance overview

138

Board of Directors

143

Management Team

146

Corporate governance

184

Directors’ remuneration report

218

Other disclosures

231

Statement of Directors’ responsib

ies



Four more

years with

Liverpool FC



This year we announced a four-year

extension of our partnership with

Liverpool Football Club and Liverpool

Football Club Women.

We ﬁrst became main sponsors in July

2010 and the extension runs until the

end of 2026/27 UK football season.

The extension includes increased

investment in LFC Women.

As part of our partnership with the

Reds, Liverpool plays an active role in

our Goal programme - which aims to

empower young girls through sport

by provid

ing ﬁnancial educat

ion and

life skills.

Read more online at

www.sc.com/lfc

134

Standard Chartered

– Annual Report 2022

Directors’ report

135

Standard Chartered

– Annual Report 2022

Directors’ report

136

Standard Chartered

– Annual Report 2022

Directors’ report

Group Chairman’s governance overview

Group Chairman’s

governance overview

“Good governance requires an

awareness of the landscape,

appropriate oversight, and

a strong tone from the top,

driven by an effective Board.”

Dr José Viñals

Group Chairman

strengthening of our risk oversight through the reallocation of the

work of the Board Financ

ial Cr

ime Risk Committee to a combinat

ion of

the Board, Board Risk Committee and Audit Committee. The

reallocation enables a more integrated review of risks that are closely

associated, such as fraud, informat

ion and cyber secur

ity and

ﬁnancial cr

ime. Financ

ial and non-ﬁnancial r

isks continue to receive

substantial attention and focus at the Board Risk Committee and

Board. In addit

ion, the Aud

it Committee carefully scrutin

ised ﬁnancial

reporting matters and internal controls, cognisant of the challenging

external environment.

The Corporate Plan is an important part of the Board’s agenda each

year and never more than this year, with so many economic and

polit

ical headw

inds. The Board considered a number of strategic

opportunit

ies for growth

in the context of our risk appetite, receiv

ing

presentations from our front-line businesses and risk teams before

approving the plan.

The easing of travel restrict

ions has meant that I have been able to

vis

it a number of markets and we have add

ionally held Board

meetings in Singapore and Dubai, where we hosted a subsid

iary

governance conference attended by the chairs of many of our

banking subsid

iar

ies. It was a great event and I welcomed the

opportunity to engage with so many of my colleagues, both old and

new. The Board is planning to vis

it several countr

ies across our

footprint this year as we continue to strengthen the linkages between

the main and subsid

iary boards. We also were pleased that

shareholders could attend our 2022 Annual General Meeting (AGM)

in person for the ﬁrst time since 2019 given the easing of restrict

ions on

public gatherings.

Recognis

ing the

impact on society and other stakeholders, the Board

sought, and received, shareholder endorsement of our net zero

pathway at the 2022 AGM. Market Forces and Friends Provident

Foundation ﬁled a resolution outlin

ing a d

ifferent approach, which did

not pass. We appreciate the involvement of both organisat

ions and

share their commitment to the transit

ion to net zero, but the Board

preferred the Group’s strategic approach to achieve this and

recommended that shareholders support our advisory resolution and

oppose the requis

ioned resolution. The Board, whether directly or

through our Culture and Sustainab

ity Committee, is regularly

apprised of the progress we are making against the commitments in

the net zero pathway and continues to be actively involved, and I am

pleased that we are meeting the milestones set out in our plan.

Further informat

ion on th

is can be found on pages 64 to 124.

I was disappo

inted w

ith the levels of support for our directors’

remuneration policy and directors’ remuneration report at last year’s

AGM, which was the subject of much Board and Remuneration

Committee discuss

ion. I am grateful to Chr

ist

ine for lead

ing the

engagement with many of our shareholders to better understand

their views. This resulted in the updates announced in September

which are detailed, along with the extensive engagement undertaken

by the Committee, in the Directors’ Remuneration Report starting on

page 184.

The Board was heartened by the results of the externally facil

itated

effectiveness review of the Board and its committees. It assessed the

Board’s progress since the last external review in 2019 and concluded

that the Board continues to operate effectively while also ident

ify

ing

some areas for improvement. More detail on process, outcomes and

actions can be found on page 156.

Finally, the Board remains conﬁdent for the Group’s future and is

committed to our strategy, our purpose, and is laser focused on

developing sustained and sustainable returns with

in our r

isk appetite.

Dr José Viñals

Group Chairman

In my opening letter, I referred to the uncertain backdrop to 2022,

caused by ongoing economic, polit

ical and soc

ial dislocat

ion, the

continu

ing

impact of COVID-19 and geopolit

ical tens

ions in many

parts of the World. Despite the uncertainty, we have made strong

progress across our portfolio. This progress is supported by the

resil

ience of the bus

iness, which is in turn underpinned by our

governance.

Good governance requires an awareness of the landscape,

appropriate oversight, and a strong tone from the top, driven

by an effective Board. A key focus of the Board this year was

managing its own succession, with the loss of a number of very

experienced non-executives and the appointment of some

excellent replacements, as I mentioned in my statement on

pages 7 and 8. I am very conscious that with the retirements

of Naguib Kheraj, Byron Grote, Christ

ine Hodgson and Jasm

ine

Whitbread, we lose a wealth of experience and knowledge of the

Group. Accordingly, we have accelerated the induct

ions of our new

non-executives who have spent a lot of time with the outgoing

non-executives. I was also pleased to welcome Adrian de Souza as

Group Company Secretary in May 2022, who takes over from Scott

Corrigan’s inter

im tenure and I would l

ike to take the opportunity

to thank Scott for his wise counsel. Further detail regarding the

changes made to our Board appears in the Governance and

Nominat

ion Comm

ittee report starting on page 179.

Another key area of focus was geopolit

ical r

isk. The Board received

presentations from economists, strategists and geo-polit

ical

commentators over a number of Board sessions and dinners. We

considered carefully the impact on our business of China- US

tensions and the Russia-Ukraine war, as well as those presented by

Climate Risks. The conclusions of these sessions helped us

challenge and shape our Corporate Plan. In April, we continued the

137

Standard Chartered

– Annual Report 2022

Directors’ report

Succession

The Board planned for the transit

ion

of our long standing non-executive

directors, ensuring that the Board

and its committees remained well

balanced with a strong pipel

ine

of candidates with the appropriate

skillsets, experience and capabil

ies.

Board at a glance

Strategy

The Board approved actions to

focus

resources with

its Africa and

Middle East (AME) region to those

areas where it can have the greatest

scale and growth potential, in order

to better support its clients.

Female

Male

100% director

attendance at

scheduled Board

meetings

during 2022

Review undertaken

over 4 months.

43% female

representation on

the Board as at

10 February 2023

Exits in 7 markets

Focus solely on our

CCIB business in

2 markets

Meetings

Divers

ity

Effectiveness

Engagement

The Board paid sign

iﬁcant attent

ion

to enhancing its effectiveness and

that of its committees. An externally

facil

itated Board effect

iveness review

was commiss

ioned dur

ing 2022.

Given the alleviat

ion of travel

restrict

ions

in many of our markets

we were able to reintroduce director

vis

its across our footpr

int.

See page 156

See pages 179 to 183

See page 152

See pages 179 to 183

See pages 158 to 162

See page 147

4 new director

appointments

Shir

ish Apte

Robin Lawther, CBE

Jackie Hunt

Dr Linda Yueh, CBE

2 new committee

Chairs

Maria Ramos

Shir

ish Apte

New Senior

Independent

Director

Maria Ramos

Figures on this page cover the period 1 January 2022 to 10 February 2023

100

Directors, either collectively

or ind

idually, vis

ited

more than

16 markets in

total during the year

138

Standard Chartered

– Annual Report 2022

Directors’ report

Board of Directors

Committee Chair shown in green

Audit Committee

Board Risk Committee

Culture and Sustainab

ity Committee

Governance and Nominat

ion Comm

ittee

Remuneration Committee

Committee key

Dr José Viñals (68)

Group Chairman

Appointed

October 2016 and Group

Chairman in December 2016. José was

appointed to the Court of Standard

Chartered Bank in April 2019.

Experience

José has substantial experience

in the internat

ional regulatory arena and has

exceptional understanding of the economic,

ﬁnancial and pol

ical dynam

ics of our

markets and of global trade. He has a broad

network of decis

ion-makers

in the

jurisd

ict

ions

in our footprint.

Career

Until 2016, José was the Financ

ial

Counsellor and the Director of the Monetary

and Capital Markets Department at the

International Monetary Fund (IMF) and was

responsible for the oversight and direct

ion of

the IMF’s monetary and ﬁnancial sector work.

He was the IMF’s chief spokesman on

ﬁnancial matters,

includ

ing global ﬁnancial

stabil

ity. Dur

ing his tenure, José was a

member of the Plenary and Steering

Committee of the Financ

ial Stab

ity Board,

playing a key role in the reform of

internat

ional ﬁnancial regulat

ion. Prior to the

IMF, José began his career as an economist

and as a member of the faculty at Stanford

Univers

ity, before go

ing to the Central Bank

of Spain, where he was the Deputy Governor.

José has held many other board and advisory

posit

ions,

includ

ing cha

ir of Spain’s Deposit

Guarantee Fund, chair of the International

Relations Committee at the European

Central Bank, member of the Economic and

Financ

ial Comm

ittee of the European Union,

and chair of the Working Group on

Institut

ional Investors at the Bank for

International Settlements.

External appointments

José is Co-Chair of

the United Nations’ Alliance of Global

Investors for Sustainable Development

(GISD). He is a board member of the Institute

of International Finance (IIF), a member of

the board of directors of the Bretton Woods

Committee, member of the Advisory Council

of CityUK, member of the World Economic

Forum’s Community of Chairpersons and

board member of the Social Progress

Init

iat

ive. He is a past President of the

International Monetary Conference.

Committees

Bill Winters (61)

Group Chief Executive

Appointed

June 2015. Bill was also

appointed to the Court of Standard

Chartered Bank in June 2015.

Experience

Bill is a career banker with

sign

iﬁcant frontl

ine global banking

experience and a proven track record of

leadership and ﬁnanc

ial success. He has

extensive experience of working in emerging

markets and a proven record in spotting and

nurturing talent.

Career

Bill began his career with JP Morgan,

where he went on to become one of its top

ﬁve most senior executives and later co-chief

executive ofﬁcer at the investment bank from

2004 until he stepped down in 2009. Bill was

inv

ited to be a comm

ittee member of the

Independent Commiss

ion on Bank

ing to

recommend ways to improve competit

ion

and ﬁnancial stab

ity

in banking.

Subsequently, he served as an adviser to the

Parliamentary Commiss

ion on Bank

ing

Standards and was asked by the Court of the

Bank of England to complete an independent

review of the bank’s liqu

ity operations. In

2011, Bill founded Renshaw Bay, an alternative

asset management ﬁrm, where he was

chairman and CEO. He stepped down on

appointment to the Standard Chartered PLC

Board. Bill was previously a non-executive

director of Pension Insurance Corporation plc

and RIT Capital Partners plc. He received a

CBE in 2013. Bill is a director of Standard

Chartered Holdings Lim

ited.

External appointments

Bill is an independent

non-executive director of Novartis

International AG. He is also an Advisory

Group Member of the Integrity Council for

Voluntary Carbon Markets and a member of

the Steering Committee of the UK Voluntary

Carbon Markets Forum.

Bill Winters leads the

Management Team

139

Standard Chartered

– Annual Report 2022

Directors’ report

Andy Halford (63)

Group Chief Financ

ial Ofﬁcer

Appointed

July 2014. Andy was also

appointed to the Court of Standard

Chartered Bank in July 2014.

Experience

Andy has a strong ﬁnance

background and deep experience of

managing complex internat

ional bus

inesses

across dynamic and changing markets.

Career

Andy was ﬁnance director at East

Midlands Electric

ity plc pr

ior to jo

ing

Vodafone in 1999 as ﬁnanc

ial d

irector for

Vodafone Lim

ited, the UK operat

ing

company. Andy was later appointed ﬁnanc

ial

director for Vodafone’s Northern Europe,

Middle East and Africa region, and later the

chief ﬁnanc

ial ofﬁcer of Ver

izon Wireless in

the US. He was a member of the board of

representatives of the Verizon Wireless

Partnership. Andy was appointed Chief

Financ

ial Ofﬁcer of Vodafone Group plc

2005, a posit

ion he held for n

ine years. In 2013,

he joined Marks and Spencer Group plc as an

independent non-executive director,

becoming its Senior Independent Director in

2018 until stepping down on 31 December

2022.

As Group Chief Financ

ial Ofﬁcer at Standard

Chartered, Andy is responsible for Finance,

Treasury, Strategy, Corporate Development,

Investor Relations, Property and Supply Chain

Management functions. Andy is also director

of Standard Chartered Holdings Lim

ited and

a trustee of the Standard Chartered

Foundation.

External appointments

None.

Andy Halford also sits on the

Management Team

Shir

ish Apte (70)

Independent Non-Executive Director

Appointed

May 2022. Shir

ish was

appointed to the Court of Standard

Chartered Bank in January 2023.

Experience

Shir

ish has extens

ive corporate,

investment banking, risk management,

commercial and retail banking experience.

He has a deep understanding of ﬁnanc

ial

services, notably across the Asia Pacif

ic,

Middle East, Africa and Central and Eastern

European regions.

Career

Shir

ish spent over 30 years w

ith

Cit

igroup, where he focused on corporate

and investment banking, and managed

commercial and retail banking businesses at

country and regional level. He has strong risk

experience at country and regional level and

was a Senior Credit Ofﬁcer and a Senior

Securit

ies Ofﬁcer at C

igroup. Sh

ish was

Co-CEO for Cit

i’s Europe, M

iddle East and

Africa business from 2008 to 2009, and

Regional CEO Asia Pacif

ic from 2009 to 2011.

He was Chairman of Asia Pacif

ic Bank

ing

from 2012 until his retirement in 2014. He was

on the Executive and Operating Committees

of Cit

igroup from 2008 to 2014. From June

2014, he was an independent non-executive

director at the Commonwealth Bank of

Australia until stepping down in October

2022.

External appointments

Shir

ish

is an

independent non-executive director at

Singapore Life Pte Ltd, and an independent

non-executive director of Keppel Corporation

Lim

ited, where he

is a member of its Audit

and Board Risk Committees.

Committees

Maria Ramos (64)

Senior Independent Director

Appointed

January 2021. Maria was also

appointed to the Court of Standard

Chartered Bank in January 2021 and

appointed Senior Independent Director

in September 2022.

Experience

Maria has extensive CEO,

banking, commercial, ﬁnanc

ial, pol

icy and

internat

ional exper

ience.

Career

Based in South Africa, Maria served

as chief executive ofﬁcer of ABSA Group

Lim

ited (prev

iously Barclays Africa Group),

a divers

iﬁed ﬁnancial serv

ices group serving

12 African markets, from 2009 to 2019. Before

join

ing ABSA, Maria was the group chief

executive of Transnet Ltd, the state- owned

freight transport and logist

ics serv

ice

provider, for ﬁve years. Prior to her CEO career,

Maria served for seven years as director-

general of South Africa’s National Treasury

(formerly the Department of Finance), where

she played a key role in transforming the

National Treasury into one of the most

effective and efﬁc

ient state departments

the post-apartheid admin

istrat

ion. Maria has

served on a number of internat

ional boards,

includ

ing Sanlam Ltd, Remgro Ltd, and

SABMiller plc and more recently was a

non-executive director of The Saudi Brit

ish

Bank and Public Investment Corporation

Lim

ited before stepp

ing down in December

2020.

External appointments

Maria is Chair of

AngloGold Ashanti Lim

ited and a non-

executive director of Compagnie Financ

ière

Richemont SA. She is also a member of the

Group of Thirty, sits on the International

Advisory Board of the Blavatnik School of

Government at Oxford Univers

ity and on the

Wits Foundation Board of Governors.

Committees

140

Standard Chartered

– Annual Report 2022

Directors’ report

Board of Directors

Phil Rivett (67)

Independent Non-Executive Director

Appointed

May 2020. Phil was also

appointed to the Court of Standard

Chartered Bank in May 2020.

Experience

Phil has sign

iﬁcant

professional accountancy and audit

experience, specif

ically focused

in the

ﬁnancial serv

ices sector. He has a strong

technical understanding and broad

ﬁnancial and bus

iness experience.

Career

Phil jo

ined Pr

icewaterhouseCoopers

(PwC) as a graduate trainee accountant

in 1976, becoming a Partner in 1986. He

spent more than 30 years as a Partner at

PwC and was lead relationsh

ip Partner

for several large FTSE 100 companies,

includ

ing a number of

internat

ional banks

and ﬁnancial serv

ices inst

itut

ions. He also

has substantial internat

ional exper

ience,

having worked with banks across the

Middle East and Asia, in particular China.

He became Leader of PwC’s Financ

ial

Services Assurance practice in 2007 and

was appointed Chairman of its Global

Financ

ial Serv

ices Group in 2011. Phil has sat

on a number of global ﬁnancial serv

ices

industry groups, producing guidel

ines

for best practice in governance, ﬁnanc

ial

reporting and risk management.

External appointments

Phil is an

independent non-executive director

and Chair of the Audit Committee

at Nationw

ide Bu

ild

ing Soc

iety.

Committees

Gay Huey Evans, CBE (68)

Independent Non-Executive Director

Appointed

April 2015. Gay was appointed

to the Court of Standard Chartered Bank

in April 2019.

Experience

Gay has extensive banking and

ﬁnancial serv

ices experience with sign

iﬁcant

commercial and UK regulatory and

governance experience.

Career

Gay spent over 30 years working

with

in the ﬁnancial serv

ices industry, the

internat

ional cap

ital markets and with the

UK ﬁnancial regulator. Gay spent seven years

with the Financ

ial Serv

ices Authority from

1998 to 2005, where she was director of

markets div

ion, capital markets sector

leader, with responsib

ity for establish

ing a

market-facing div

ion for the supervis

ion of

market infrastructure, oversight of market

conduct and developing markets policy. From

2005 to 2008, Gay held a number of roles at

Cit

ibank,

includ

ing head of governance, C

Alternative Investments, EMEA, before jo

ing

Barclays Capital where she was vice chair of

investment banking and investment

management. She was previously a

non-executive director at Aviva plc, the

London Stock Exchange Group plc and Itau

BBA International Plc. In 2016, she received an

OBE for services to ﬁnanc

ial serv

ices and

divers

ity and a CBE for serv

ices to the

economy and philanthropy in the Queen’s

Birthday Honours list 2021.

External appointments

Gay is Chair of the

London Metal Exchange, a non-executive

director of ConocoPhill

ips and S&P Global,

and a non-executive member of the HM

Treasury board. Gay also sits on the panel of

senior advisers at Chatham House and the

board of the Benjamin Frankl

in House.

Committees

David Conner (74)

Independent Non-Executive Director

Appointed

January 2016.

Experience

David has sign

iﬁcant global and

corporate, investment and retail banking

experience, strong risk management

credentials and an in-depth knowledge of

Asian markets.

Career

David spent his career in the ﬁnanc

ial

services industry, liv

ing and work

ing across

Asia for 37 years, for both Cit

ibank and OCBC

Bank. He joined C

ibank

in 1976 as a

management trainee and went on to hold a

number of Asia-based senior management

roles, includ

ing ch

ief executive ofﬁcer of

Cit

ibank Ind

ia and managing director and

marketing manager at Cit

ibank Japan,

before leaving Cit

ibank

in 2002. David jo

ined

OCBC Bank in Singapore as chief executive

ofﬁcer and director in 2002. He implemented

a strategy of growth and led the bank

through a period of sign

iﬁcant turbulence.

David stepped down as chief executive

ofﬁcer in 2012 but remained as a non-

executive director on the board of OCBC

Bank, before leaving the group in 2014. He

was previously a non-executive director of

GasLog Ltd.

External appointments

David is Chair of the

Barnard Cancer Institute and an emeritus

trustee of Washington Univers

ity

in St Louis.

Committees

David is also a member of the Combined

US Operations Risk Committee of Standard

Chartered Bank.

Jasmine Whitbread (59)

Independent Non-Executive Director

Appointed

April 2015. Jasmine was

appointed to the Court of Standard

Chartered Bank in April 2019.

Experience

Jasmine has sign

iﬁcant bus

iness

leadership experience as well as ﬁrst-hand

experience of operating across our markets.

Career

Jasmine began her career in

internat

ional market

ing in the technology

sector and joined Thomson F

inanc

ial

in 1994,

becoming managing director of the

Electronic Settlements Group. After

completing the Stanford Executive Program,

Jasmine set up one of Oxfam’s ﬁrst regional

ofﬁces, managing nine country operations in

West Africa, later becoming internat

ional

director responsible for Oxfam’s programmes

worldwide. Jasmine jo

ined Save the Ch

ildren

in 2005, where she was responsible for

revital

ing one of the UK’s most established

charit

ies. In 2010, she was appo

inted as

Save the Children’s ﬁrst internat

ional ch

ief

executive ofﬁcer, a posit

ion she held unt

il she

stepped down in 2015. Jasmine stepped

down as a non-executive director from the

Board of BT Group plc in December 2019 and

as chief executive of London First in March

2021, a business campaign

ing group w

ith a

miss

ion to make London the best c

ity in the

world to do business.

External appointments

Jasmine became

Chair of Travis Perkins plc in March 2021 and

is a non-executive director of WPP plc and

Compagnie Financ

ière R

ichemont SA.

Committees

As announced in November 2022, Jasmine will step

down from the Board at the 2023 Annual General

Meeting (AGM).

141

Standard Chartered

– Annual Report 2022

Directors’ report

David Tang (68)

Independent Non-Executive Director

Appointed

June 2019. David was also

appointed to the Court of Standard

Chartered Bank in June 2019.

Experience

David has a deep understanding

and experience of emerging technologies in

the context of some of our key markets, most

notably mainland China.

Career

David has more than 30 years of

internat

ional and Ch

inese operational

experience in the technology and venture

capital industr

ies, cover

ing venture

investments, sales, marketing, business

development, research and development

and manufacturing. From 1989 to 2004,

David held a number of senior posit

ions

Apple, Dig

ital Equ

ipment Corp and 3Com

based in China and across the Asia Pacif

region. From 2004 to 2010, David held

various posit

ions

in Nokia, includ

ing

corporate vice president, chairman of

Nokia Telecommunicat

ions Ltd and v

ice

chairman of Nokia (China) Investment Co.

Ltd. He went on to become corporate senior

vice president and regional president of

Advanced Micro Devices (AMD), Greater

China, before jo

ing NGP Capital (Nokia

Growth Partners) in Beijing as managing

director and partner in 2013, a posit

ion he

held until retir

ing

in June 2021.

External appointments

David jo

ined Ka

iyun

Motors, an electric vehicle start-up based in

China, in June 2021 as Chief Value Ofﬁcer.

David is also a non-executive director of

JOYY Inc., the Chinese live streaming social

media platform listed on the Nasdaq Stock

Market, and Kingsoft Corporation, a leading

Chinese software and internet services

company listed on the Hong Kong Stock

Exchange.

Committees

Robin Lawther, CBE (61)

Independent Non-Executive Director

Appointed

July 2022. Robin was

appointed to the Court of Standard

Chartered Bank in December 2022.

Experience

Robin brings extensive

internat

ional bank

ing experience in

global markets and ﬁnancial

inst

itut

ions.

In addit

ion to a broad understand

ing of

commercial banking, she has special

ist

knowledge in investment banking, mergers

and acquis

ions and capital rais

ing.

Career

Robin spent over 25 years at JP

Morgan Chase in a number of senior

executive posit

ions. She has valuable

executive and non-executive experience

across global markets and has considerable

understanding of regulatory and governance

issues. From 2019 to 2021, she served as a

non-executive director on the board of

M&G plc. In January 2014, Robin jo

ined

Shareholder Executive, which later

became UK Government Investments

(UKGI), as a non-executive board

member until completing her term

in May 2022. She received a CBE for

services to ﬁnance and divers

ity

in the

Queen's Birthday Honours 2020.

External appointments

Robin is an

independent non-executive director of

Nordea Bank Abp, the largest Nordic Bank,

and a member of its Remuneration & People

Committee. She is also an independent

board member of Ashurst LLP and a

member of the advisory board at Aon PLC.

Committees

Jackie Hunt (54)

Independent Non-Executive Director

Appointed

October 2022. Jackie was also

appointed to the Court of Standard

Chartered Bank in October 2022.

Experience

Jackie is a Chartered

Accountant and has spent most of her

career with

in ﬁnancial serv

ices. She

brings sign

iﬁcant UK and

internat

ional

ﬁnancial serv

ices experience, includ

ing

asset management, insurance, regulatory

and accounting knowledge.

Career

Jackie has held a number of senior

management posit

ions

in companies

includ

ing Av

iva, Hibern

ian Group, Norw

ich

Union Insurance, PwC and RSA Insurance.

From 2016, Jackie was a member of the

Allianz SE management Board with executive

responsib

ity for the asset management

and US life insurance div

ions, a posit

ion

she held until 2021. Prior to that, Jackie

was an executive director of Prudential

plc and CEO of Prudential UK, Europe

and Africa. She was Group Chief Financ

ial

Ofﬁcer of Standard Life plc from 2010 to

2013, where she helped transform the life

insurer into a diverse savings, pensions and

asset management business. Jackie was

previously the Senior Independent Director

of National Express Group PLC, a non-

executive director of TheCityUK and the

Deputy Chair of the FCA Practit

ioner Panel.

External appointments

Jackie is an

independent non-executive director of

Man Group PLC and Rothesay Life PLC.

Ahead of commencing her role as an

independent non-executive director of

Will

is Towers Watson plc from 1 Apr

2023, Jackie will step down from her

role as an independent non-executive

director of OneWeb Holdings Lim

ited.

Committees

142

Standard Chartered

– Annual Report 2022

Directors’ report

Board of Directors

Adrian de Souza (52)

Group Company Secretary

Appointed

Adrian was appointed Group

Company Secretary in May 2022.

Career

Adrian qualif

ied as a lawyer

in 1997.

Prior to jo

ing Standard Chartered, he was

General Counsel for Vivo Energy PLC, a

FTSE-250 pan-African fuel retailer, where he

was responsible for the: Company Secretarial,

Governance, Ethics, Compliance and Forensic

Investigat

ions funct

ions and was a member

of the group’s Executive Committee.

After working in private practice at

internat

ional law ﬁrms Hogan Lovells and

Clifford Chance, Adrian served as General

Counsel and Company Secretary at IQSA

Group (a Goldman Sachs private equity

business); Company Secretary at Barclays

Bank UK PLC, General Counsel and Company

Secretary of the FTSE 100 company, Land

Securit

ies Group PLC, where he was a

member of the Group’s Executive Committee

and Head of Legal at SABMiller Europe.

Naguib Kheraj, Dr Byron Grote and Christ

ine Hodgson, CBE stepped down from the Group as

independent non-executive directors on

30 April 2022, 30 November 2022 and 31 January 2023 respectively.

Scott Corrigan stepped down as Interim Group Company Secretary on 5 May 2022.

Contribut

ions of how each d

irector standing for re-election is, and continues to be, important to Standard Chartered PLC’s long-term

sustainable success will be included in the Notice of AGM 2023.

Dr Linda Yueh, CBE (51)

Independent Non-Executive Director

Appointed

January 2023. Linda was

also appointed to the Court of Standard

Chartered Bank in January 2023.

Experience

Linda is a renowned economist

and ﬁnancial broadcaster w

ith a diverse

range of skills and experience across ﬁnanc

ial

services, technology, not-for-proﬁt and

business to business service sectors.

Career

Linda has held various academic roles

and acted in various advisory roles after

starting her career as a corporate lawyer at

Paul, Weiss, Rifk

ind, Wharton & Garr

ison.

Linda was Economics Editor at Bloomberg

News from 2010 to 2012 and Chief Business

Correspondent for the BBC between 2013

and 2015. She was a Vis

ing Professor at LSE

IDEAS at the London School of Economics

and Polit

ical Sc

ience from 2019 to 2022 and

served on the Independent Review Panel on

Ring-Fencing and Proprietary Trading for HM

Treasury. Between 2011 and 2013, Linda held

non-executive directorsh

ips w

ith Scottish

Mortgage Investment Trust Plc, London &

Partners Ltd and JPMorgan Asia Growth &

Income Plc. She was Senior Independent

Director of Fidel

ity Ch

ina Special Situat

ions

Plc from 2019 before stepping down in

December 2022. Linda was awarded a CBE

for Services to Economics in the New Year

Honours List of 2023.

External appointments

Linda is a Fellow at

St Edmund Hall, Oxford Univers

ity and

Adjunct Professor of Economics at London

Business School. She currently serves as an

independent non-executive director of

Rentokil Init

ial Plc and Segro Plc. She

is Chair

of the Baill

ie G

ifford The Schiehall

ion Fund

Ltd, an investment company listed on the

Special

ist Fund Segment of the London Stock

Exchange Main Market. Linda is Executive

Chair of the Royal Commonwealth Society,

Trustee of the Coutts Foundation, Adviser to

the UK Board of Trade and an Associate

Fellow at Chatham House.

Committees

Carlson Tong (68)

Independent Non-Executive Director

Appointed

February 2019.

Experience

Carlson has a deep

understanding and knowledge of operating

in mainland China and Hong Kong and has

sign

iﬁcant exper

ience of the ﬁnanc

ial

services sector in those markets.

Career

Carlson joined KPMG UK

in 1979,

becoming an Audit Partner of the Hong Kong

ﬁrm in 1989. He was elected Chairman of

KPMG China and Hong Kong in 2007, before

becoming Asia Pacif

ic cha

irman and a

member of the global board and global

executive team in 2009. He spent over

30 years at KPMG and was actively involved

in the work of the securit

ies and futures

markets, serving as a member of the Main

Board and Growth Enterprise Market List

ing

Committee of the Stock Exchange of Hong

Kong from 2002 to 2008 (Chair from 2006 to

2008). After retir

ing from KPMG

in 2011, he

was appointed a non-executive director of

the Securit

ies and Futures Comm

iss

ion,

becoming its Chair in 2012 until he stepped

down in October 2018. He oversaw a number

of major policy in

iat

ives dur

ing his term as

the chair, includ

ing the

introduct

ion of the

Hong Kong and Shanghai/Shenzhen Stock

connect schemes and the mutual recognit

ion

of funds between the mainland and Hong

Kong. From 2017 until July 2020, Carlson was

a non-executive director of the Hong Kong

International Airport Authority. He was a

member of the Hong Kong Human Resource

Planning Commiss

ion from Apr

il 2020 until

December 2022 and Chair of the Hong

Kong Univers

ity Grants Comm

ittee from

January 2016 until he stepped down in

December 2022.

External appointments

Carlson is an

independent non-executive director of MTR

Corporation Lim

ited, Cha

irman of its Audit &

Risk Committee and a member of its Finance

and Investment Committee. He sits on

various Hong Kong SAR government bodies

and is also an observer on behalf of the Hong

Kong Government for Cathay Pacif

ic A

irways

Lim

ited.

Committees

143

Standard Chartered

– Annual Report 2022

Directors’ report

Management Team

Bill Winters (61)

Group Chief Executive

Andy Halford (63)

Group Chief Financ

ial Ofﬁcer

Simon Cooper (55)

CEO, Corporate, Commercial

& Institut

ional Bank

ing and

Europe & Americas

Simon jo

ined the Group as CEO, Corporate &

Institut

ional Bank

ing in April 2016. He

assumed addit

ional respons

ity for

Commercial Banking in March 2018 and the

Europe & Americas region in January 2021.

Career

Simon was previously group

managing director and chief executive of

Global Commercial Banking at HSBC. He has

extensive experience across our markets and

client segments. Simon jo

ined HSBC

in 1989

and held a number of senior roles there,

includ

ing deputy cha

irman and chief

executive ofﬁcer, Middle East and North

Africa; chief executive ofﬁcer, Korea; and

head of Corporate and Investment Banking,

Singapore. He has extensive experience in

the areas of investment banking, corporate

banking and transaction banking.

External appointments

Simon is Chairman of

the advisory board of the Lee Kong China

School of Business.

Judy Hsu (59)

CEO, Consumer, Private

& Business Banking

Judy was appointed Regional CEO,

Consumer, Private & Business Banking on

1 January 2021 and has been a member of the

Group Management Team since 2018.

Career

Prior to her most recent appointment,

Judy was Regional CEO, ASEAN & South Asia,

a posit

ion she held from June 2018. Judy was

the country CEO for Standard Chartered

Singapore from 2015 to 2018. She jo

ined

Standard Chartered in December 2009 as

the Global Head of Wealth Management

and led the strategic advancement of the

Bank’s wealth management business.

Prior to this, Judy spent 18 years at Cit

ibank,

where she held various leadership roles in its

Consumer Banking business in Asia.

External appointments

Judy is serving as a

board member of the Urban Redevelopment

Authority Singapore. She was appointed to

the board of CapitaLand Investment Lim

ited

as an Independent Director in June 2021.

Claire Dixon (50)

Group Head of Corporate Affairs,

Brand & Marketing

Claire jo

ined Standard Chartered as Group

Head of Corporate Affairs, Brand &

Marketing in March 2021.

Career

Claire is a seasoned communicat

ions

expert who has led teams at global brands in

a variety of sectors, in Europe and the US. She

spent nearly eight years liv

ing and work

ing in

Sil

icon Valley,

includ

ing for eBay/PayPal and

latterly as Chief Communicat

ions Ofﬁcer at

Intel. Throughout her career she has been a

champion for creating posit

ive global

impact,

includ

ing lead

ing Global Corporate

Responsib

ity at GlaxoSmithKl

ine. Cla

ire is

Chair of the Standard Chartered Foundation.

External appointments

None.

144

Standard Chartered

– Annual Report 2022

Directors’ report

Management Team

Sunil Kaushal (57)

CEO, Africa & Middle East

Sunil was appointed CEO, Africa & Middle

East on 1 October 2015.

Career

Prior to his current role, Sunil was

regional CEO South Asia, responsible for

Standard Chartered’s operations in South

Asia (which included India, Bangladesh, Sri

Lanka, and Nepal). He has over 33 years of

banking experience in diverse markets and

has been with Standard Chartered for over

23 years, holding senior roles across the

Wholesale and Consumer Bank. Sunil has rich

experience across the Group’s footprint,

having served as the Head of Corporate

Banking in UAE, Head of Orig

inat

ions and

Client Coverage in Singapore, Global Head

Small and Medium Enterprises (SME) and

New Ventures in Singapore and Chief

Executive Ofﬁcer of Standard Chartered

Bank (Taiwan) Ltd.

Before join

ing Standard Chartered in 1998,

Sunil held various banking posit

ions at a

number of leading internat

ional ﬁnancial

inst

itut

ions.

External appointments

Sunil is a Global

Advisory Board member of MoneyTap, a

leading Indian Fintech company.

Tanuj Kapilashram

i (45)

Group Head, Human Resources

Tanuj joined the Management Team as

Group Head, Human Resources (HR) in

November 2018.

Career

Prior to jo

ing the Group, Tanuj built

her career at HSBC. She has worked across

multiple HR disc

ipl

ines in many of our

footprint markets (Hong Kong, Singapore,

Dubai, India and London). Tanuj jo

ined the

Bank in March 2017 as Group Head, Talent,

Learning and Culture and took on addit

ional

responsib

ity as Global Head HR, Corporate,

Commercial and Institut

ional Bank

ing in May

2018.

External appointments

Tanuj is a non-

executive director of Sainsbury’s PLC and a

member of their Nominat

ion and

Remuneration committees. She is a member

of the Asia House board of trustees, of which

Standard Chartered is a founding

stakeholder. Asia House is a London-based

centre of expertise on trade, investment and

public policy whose miss

ion

it is to drive

polit

ical, econom

ic and commercial

engagement between Asia and Europe.

Tanuj is also a board member of the UK

Financ

ial Serv

ices Skills Commiss

ion.

Benjamin Hung (58)

CEO, Asia

Ben was appointed CEO, Asia on 1 January

2021. He is the Chairman of Standard

Chartered Bank (China) Lim

ited and

Standard Chartered Bank (Singapore)

Lim

ited.

Career

Ben joined Standard Chartered

1992 and has held a number of senior

management posit

ions spann

ing corporate

and retail banking. Prior to his current role,

Ben was Regional CEO for Greater China &

North Asia and CEO for the Bank’s Retail

Banking and Wealth Management

businesses globally. He is currently based in

Hong Kong and has internat

ional bank

ing

experience in the United Kingdom and in

Canada. Ben was previously chairman of the

Hong Kong Associat

ion of Banks, a member

of the Financ

ial Serv

ices Development

Council and a board member of the Hong

Kong Airport Authority and the Hong Kong

Hospital Authority. He was also a Council

Member of the Hong Kong Univers

ity.

External appointments

Ben is an

independent non-executive director of the

Hong Kong Exchanges and Clearing Lim

ited.

He also sits on the Exchange Fund Advisory

Committee and is a member of the General

Committee of the Hong Kong General

Chamber of Commerce. He is a strategic

adviser at the International Consultative

Conference on the Future Economic

Development of Guangdong Province, China.

Roel Louwhoff (57)

Chief Technology, Operations and

Transformation Ofﬁcer

Roel joined the Group as Ch

ief Dig

ital,

Technology & Innovation Ofﬁcer in November

2021 and is responsible for leading the dig

ital

transformation of the Group into an agile,

dig

ital and future-focused organ

isat

ion. He

spearheads the Group’s technology strategy;

the development of its technology systems

and infrastructure, which support its

customers and employees globally; and leads

its innovat

ion. Roel’s expanded role as Ch

ief

Technology, Operations and Transformation

Ofﬁcer commenced in April 2022.

Career

Prior to jo

ing Standard Chartered,

Roel was Chief Operations and

Transformation Ofﬁcer at ING Bank, where

he oversaw operations, technology and the

broader transformation agenda. During his

seven years in this role, Roel led the successful

dig

ital transformat

ion of ING, seen by many

as a trailblazer in dig

ing ﬁnancial serv

ices.

Before ING, Roel spent ten years at Brit

ish

Telecom (BT), latterly as CEO of BT-Operate

based in the UK. At BT, he redeﬁned the

technology and operational approach and

led the BT communicat

ion s

ide of the 2012

Olympics before applying that learning in

deliver

ing turn-key d

ital and

infrastructure

solutions for major exhib

ion and sporting

events.

External appointments

None.

145

Standard Chartered

– Annual Report 2022

Directors’ report

Mark Smith, previously Group Chief Risk Ofﬁcer and a director of Standard Chartered Bank, retired from the Group on 31 December 2022.

Paul Day, Group Head of Internal Audit, attends Management Team meetings as an inv

itee.

Mary Huen (55)

CEO, Hong Kong and Cluster CEO,

Hong Kong, Taiwan and Macau

Mary was appointed Chief Executive Ofﬁcer

(CEO) for Hong Kong in March 2017, and took

on an expanded role as Cluster CEO for Hong

Kong, Taiwan and Macau in January 2021.

Career

Mary has over 30 years of experience

in business management and banking

services. Prior to her current role, Mary was

Regional Head of Retail Banking, Greater

China & North Asia, and the Head of Retail

Banking, Hong Kong. She is a board member

of Standard Chartered Bank (Hong Kong)

Lim

ited. She

is also chairperson of the Board

of Standard Chartered Bank (Taiwan)

Lim

ited and Mox Bank L

ited.

External appointments

Mary is the vice

chairperson of the Hong Kong Associat

ion of

Banks, a member of the Banking Advisory

Committee of the Hong Kong Monetary

Authority, the Financ

ial Infrastructure and

Market Development Sub-Committee under

the Exchange Fund Advisory Committee. She

is also a representative of Hong Kong, China

to the Asia-Pacif

ic Econom

ic Cooperation

(APEC) Business Advisory Council, the

chairperson of the Hong Kong Trade

Development Council Financ

ial Serv

ices

Advisory Committee and the Asian Financ

ial

Forum Steering Committee, a board member

of the Hong Kong Tourism Board and

Hospital Authority.

Sandie Okoro (58)

Group General Counsel

Sandie Okoro jo

ined the Bank as Group

General Counsel in April 2022. In the role,

she leads the Bank’s Legal, Group Corporate

Secretariat and Shared Investigat

ive Serv

ices

functions.

Career

Sandie is a pre-eminent lawyer, having

served as General Counsel and Senior Vice

President, and Vice President for Compliance,

at the World Bank Group. Prior to jo

ing the

World Bank, Sandie was General Counsel for

HSBC Global Asset Management and Global

General Counsel at Barings. Sandie is an

Honorary Bencher of Middle Temple in the

United Kingdom (2018) and was named one

of the Upstanding 100 Leading Ethnic

Minor

ity Execut

ives (2016), Top 20 Global

General Counsel (2019) by the Financ

ial T

imes,

and was recognised as Brita

in’s 10th most

inﬂuent

ial person of Afr

ican and African

Caribbean heritage by Powerlist (2023).

Sandie received a lifet

ime ach

ievement

award from the UK Black Solic

itors Network

(2016), was named one of the Power 100

Women by City A.M. and 100 Women to

Watch by Female FTSE Board.

External appointments

Sandie was

appointed inaugural Chair of the UK-based

charity Women of the World Foundation in

June 2021, she received an honorary lifet

ime

Emeritus membership of the Law Societ

ies’

Compact and Forum for Sustainable

Development Goal 16 in June 2022, and she is

a Governor of the Royal Shakespeare

Company.

Tracey McDermott, CBE (53)

Group Head Conduct,

Financ

ial Cr

ime and Compliance

Sadia Ricke (52)

*Group Chief Risk Ofﬁcer,

director of Standard Chartered Bank

Tracey has been the Group Head Conduct,

Financ

ial Cr

ime and Compliance since

January 2019.

Career

Tracey orig

inally joined Standard

Chartered as Group Head of Corporate,

Public and Regulatory Affairs in March 2017,

subsequently adding Brand and Marketing

to her portfolio in December 2017 and

Compliance in March 2018. Prior to jo

ing the

bank, Tracey served as Acting Chief Executive

of the Financ

ial Conduct Author

ity (FCA)

from September 2015 to June 2016. She joined

the then Financ

ial Serv

ices Authority (FSA)

in 2001 where she held a number of senior

roles, includ

ing: D

irector of Supervis

ion and

Authorisat

ions, and D

irector of Enforcement

and Financ

ial Cr

ime. Tracey also served as a

Board Member of the FSA from April 2013, as

a member of the Financ

ial Pol

icy Committee

of the Bank of England, and as non-executive

director of the Prudential Regulation

Authority from September 2015 to June 2016.

Prior to jo

ing the FCA, Tracey worked as a

lawyer in private practice, having spent time

in law ﬁrms in the UK, USA and Brussels. In

2016, Tracey received a CBE for her services to

ﬁnancial serv

ice consumers and markets. She

is a trustee of the Standard Chartered

Foundation.

External appointments

Tracey chairs the Net

Zero Banking Alliance, is a member of the

International Regulatory Strategy Group

Council and chairs the Conduct and Ethics

Committee of the Fixed Income, Currencies

and Commodit

ies Markets Standards Board.

Sadia Ricke jo

ined the Bank

in February 2023.

*Subject to regulatory approval, she will be

appointed Group Chief Risk Ofﬁcer and a

director of Standard Chartered Bank.

Career

Sadia has a broad range of ﬁnanc

ial

and risk experience and a thorough

understanding of our footprint markets. She

joined the Bank from Soc

iété Générale, where

she started in 1994 in the Financ

ial Inst

itut

ions

Credit department. She gained more than 13

years of structured ﬁnance experience in the

Natural Resources and Energy Finance

div

ion where she was Co-Deputy Head, a

posit

ion she held unt

il 2010. She then became

Head of Credit Risk for SG CIB in Paris, before

moving to Hong Kong to take on the role of

Head of Global Finance for Asia Pacif

January 2015. She was appointed Group

Country Head and Head of Coverage and

Investment Banking for the UK in 2017. In 2019,

Sadia became Deputy Chief Risk Ofﬁcer and

then Group Chief Risk Ofﬁcer in January 2021.

External appointments

None.

146

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Corporate

governance

Our stakeholders, their interests: driv

ing commerce and prosper

ity through our unique divers

ity

The Board spends sign

iﬁcant t

ime consider

ing, and engag

ing with, its key stakeholders to better understand their views

and perspectives. A summary of stakeholder interests can be found in the Strategic report across the pages ident

iﬁed

below.

Clients

page 56

Regulators and

governments

page 57

Investors

page 58

Suppliers

page 59

Society

page 59

Employees

page 60

Key areas of Board discuss

ion dur

ing 2022

This section offers an ins

ight

into key Board items and

activ

ies covered during the year, as well as the structure of

the Board, its committees, and its meetings.

At the beginn

ing of the year, and follow

ing approval of

the Corporate Plan, the Board reviewed and updated its

key prior

ies, as well as discussed potential Blue Sky topics,

to help prepare its forward plan. This required careful

considerat

ion and regular rev

iew throughout the year to

ensure standing items, strategic object

ives, governance

princ

iples and r

isk and compliance requirements were

appropriately addressed. Some of the areas detailed on

the following pages formed part of the standing agenda

for each meeting, while others were reviewed period

ically

during 2022.

Stakeholder considerat

ion and engagement

is central

to the Board’s prior

ies. We recognise the importance

of promoting posit

ive stakeholder relat

ionsh

ips and the

Board spends sign

iﬁcant t

ime interact

ing w

ith them to

better understand their views, as well as the opportunit

ies,

challenges and the Group’s impact across our diverse

markets. In addit

ion, the Board regularly d

iscusses the

impact on stakeholders, their perspectives and their

feedback, whether in Board and committee meetings, or as

part of other interact

ions across the Group. Some examples

of this can be found in the section 172 of the Companies Act

2006 (s.172) disclosure on pages 54 to 124, with

in spotl

ight

items on the following pages and on pages 158 to 162.

Directors are alert to their statutory duties and obligat

ions,

includ

ing those outl

ined under s.172, and this forms an

integral part of director induct

ion and annual tra

ing. The

Board will continue to focus on consider

ing stakeholders as

part of the Board’s decis

ion-mak

ing.

Code compliance

The UK Corporate Governance Code 2018 (UK Code) and the Hong

Kong Corporate Governance Code contained in Appendix 14 of the

Hong Kong List

ing Rules (HK Code) are the standards aga

inst which

we measured ourselves in 2022.

The directors are pleased to conﬁrm that Standard Chartered PLC

(the Company) continued to comply with the provis

ions set out

the UK Code and the HK Code for the year.

Throughout this corporate governance report we have provided an

ins

ight

into how governance operates with

in the Group and how we

have applied the princ

iples set out

in the UK Code and HK Code.

The Group conﬁrms that it has adopted a code of conduct

regarding directors’ securit

ies transact

ions on terms no less exacting

than required by Appendix 10 of the Hong Kong List

ing Rules.

Having made specif

ic enqu

iry of all directors, the Group conﬁrms

that all directors have complied with the required standards of the

adopted code of conduct.

References to examples of UK Code applicat

ion

in the

Annual Report can be found on

page 218

Copies of the UK Code and the HK Code can be found at

frc.org.uk

and

hkex.com.hk

respectively

To the extent applicable, informat

ion requ

ired by

paragraphs 13(2) (c), (d), (f), (h) and (i) of Schedule 7 of

the Large and Medium-sized Companies and Groups

(Accounts and Reports) Regulations 2008 is available in

Other disclosures on

pages 218 to 230

147

Standard Chartered

– Annual Report 2022

Directors’ report

Key areas of Board discuss

ion dur

ing 2022

continued

Strategy

•

Reviewed and approved the 2023-2027 Corporate Plan

as a basis for preparation of the 2023 budget, receiv

ing

conﬁrmation from the Group Ch

ief Risk Ofﬁcer that the plan

is aligned to the Enterprise Risk Management Framework and

the Group Risk Appetite Statement

•

Discussed progress made against the Group’s strategic

prior

ies and crit

ical enablers

•

Reviewed and scrutin

ised the strateg

ic and operational

performance of the business across client segments, product

groups and regions, which included details of their prior

ies,

progress, opportunit

ies and response to current events. Th

included deep dives into the following areas:

– Financ

ial Markets

– Private Banking

– Africa and Middle East

•

Received and discussed regular corporate development

updates

•

Reviewed and approved changes to focus the Group’s

presence in the Africa and Middle East region. Further

informat

ion on th

is can be found on page 57

•

Discussed and reviewed the Group’s sustainab

ity strategy

•

Discussed and reviewed the Group’s Transformation,

Technology & Operations strategy

•

Received an update on the Group’s investment in its associate

China Bohai Bank

•

Approved the corporate restructuring of the Ventures

business segment

•

Approved the Liverpool Football Club sponsorship renewal

Risk management

•

Discussed and reviewed progress against the Group’s

Transformation and Remediat

ion Portfol

io and Information

and Cyber Security Risk (ICS) proﬁle

•

Received and discussed brief

ings from management on ICS

matters regularly throughout the year, includ

ing contr

ibut

ions

from the independent adviser to the Board on cyber security

and cyber threat management

•

Discussed and endorsed the Group’s ICS strategy

•

Reviewed and discussed risk reports from the Group Chief Risk

Ofﬁcer

•

Approved Sadia Ricke’s appointment as Group Chief Risk

Ofﬁcer, subject to regulatory approval

•

Discussed, reviewed and/or approved various activ

ies

relating to Resolvabil

ity

•

Engaged with the Prudential Regulation Authority (PRA) on

the ﬁndings of the

ir 2022 Period

ic Summary Meet

ing Letter

•

Assessed progress in continu

ing to strengthen the Group’s r

isk

culture

•

Approved the risk appetite validat

ion of the 2023 Corporate

Plan, which included a considerat

ion of pr

inc

ipal r

isks,

includ

ing Cl

imate Risk

•

Approved the renewal of the Group’s insurance polic

ies for

2022/2023

•

Approved material changes to the Enterprise Risk

Management Framework

•

Undertook Blue Sky think

ing/hor

izon scanning discuss

ions,

which considered the potential risks and opportunit

ies that

the Group might be or could become exposed to

Spotlight

Liverpool Football Club

sponsorship renewal

The Group announced a four-year extension to their

main sponsor agreement with Liverpool Football Club

(LFC) and LFC Women in July 2022. The Board discussed

and reviewed the proposed plans to renew the long-

standing relationsh

ip and fully supported cont

inu

ing the

partnership through to the end of the 2026/27 season,

includ

ing

increased investment in LFC Women. LFC is a

globally renowned football club, with many followers

across our markets in Asia, Africa and the Middle East.

The Board recognised this as a unique and valuable

opportunity to help deliver our narrative and Stands.

Continu

ing to

invest in brand and business marketing

where appropriate is an important part of the Group’s

Corporate Plan.

Spotlight

Resolvabil

ity

Resolvabil

ity was a fundamental part of the Board’s

agenda for the year. They reviewed, challenged and

approved enhancements to the updated Group’s

Resolvabil

ity Assessment Report prov

ided to the Bank

of England in February 2022 and approved the Group’s

Resolvabil

ity d

isclosure published in June 2022. In July

2022, the Board attended a teach-in session of the Master

Resolution Playbook. It also partic

ipated

in a Resolution

simulat

ion exerc

ise with senior leaders and experts in

December 2022 to role play a hypothetical scenario that

could arise if Standard Chartered were to enter resolution.

Further informat

ion can be found on

page 173

Stakeholders

Clients

Investors

Suppliers

Society

Stakeholders

Clients

Regulators and

governments

Investors

Suppliers

Society

Employees

148

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Key areas of Board discuss

ion dur

ing 2022

continued

Financ

ials and performance

•

Monitored the Group’s ﬁnanc

ial performance

•

Approved the 2021 full year and 2022 half year results

•

Monitored and assessed the strength of the Group’s

capital and liqu

ity posit

ions

•

Considered the Group’s approach to capital management

and returns

•

Approved a 2021 ﬁnal div

idend and 2022

inter

im d

idend

•

Approved two share buy-back programmes

•

Received half yearly updates on, and discussed, the

Group’s major investment programmes in 2022

•

Received half yearly updates on, and discussed, investor

relations matters

•

Approved the Group’s 2021 Country-by-Country Reporting

disclosures

People, culture and values

•

Approved the Group’s 2021 Modern Slavery Statement

•

Discussed progress made against the Group’s people

strategy and culture aspirat

ions

•

Discussed aspects of the Group’s global employee

engagement survey, My Voice

•

Received updates on the progression and evolution of

the Management Team’s and senior management’s

succession plans following a number of recent

appointments

•

Discussed the Group’s divers

ity and

inclus

ion

iat

ives

•

Approved updates to the Board Divers

ity Pol

icy

•

Approved changes to the Group’s operational resil

ience

strategy

•

Reviewed an annual report update on the operation and

effectiveness of the Group’s Speaking Up programme

External environment

•

Received updates on the macroeconomic headwinds and

tailw

inds

in the global economy, includ

ing an assessment

of the impact on the key drivers of the Group’s ﬁnanc

ial

performance

•

Received internal and external brief

ings and

input across a

range of subjects, includ

ing:

– global market trends

–

the global macro impact of the Russia-Ukraine war

–

geopolit

ical developments between the US and Ch

ina

– societal and business impl

icat

ions of global

demographic trends

–

strategic ins

ights

into global markets, geopolit

ics and

policy

– regulatory developments and updates

Spotlight

Div

idend payments

and share buy-backs

The Board approved two div

idend payments

in 2022, as

well as two ordinary share buy-back programmes. As part

of its decis

ion-mak

ing process, the Board took account

of the importance of approving distr

ibut

ions and other

capital management activ

ies with

in an appropr

iately

prudent framework. The Board sought assurance from

management that the proposed plans would not impact

the Group’s abil

ity to prov

ide sufﬁc

ient support to the

Group’s key clients and other stakeholders.

Spotlight

Culture

The Board considered the Group’s culture aspirat

ions,

recognis

ing that good progress had been made

a number of areas, includ

ing employee exper

ience,

psychological safety and leadership. They discussed

with management the ambit

ions for the future, tak

ing

into account feedback from across the Group. The

aspirat

ion

is to encourage greater innovat

ion that

aligned to our strategy, enable the simpl

iﬁcation of

decis

ion-mak

ing and drive client centric

ity through

a culture of high performance and execution.

Spotlight

Global market trends

The Board inv

ited a number of

internal experts and guest

speakers to attend Board dinners provid

ing

important

and special

ist

ins

ight and context to the Board d

iscuss

ion,

on a variety of matters. A number covered global market

trends, set against the backdrop of demographic,

economic and technological developments.

Stakeholders

Clients

Society

Employees

Stakeholders

Regulators and

governments

Investors

Clients

Stakeholders

Clients

Regulators and

governments

Investors

Suppliers

Society

Employees

149

Standard Chartered

– Annual Report 2022

Directors’ report

Examples of how the Board considered stakeholder perspectives in some

princ

ipal dec

ions dur

ing the year are provided on

pages 57 and 66

Key areas of Board discuss

ion dur

ing 2022

continued

For a detailed overview of our

strategy see

pages 22 and 23

Governance

•

Noted and/or approved changes to the membership of

the Board’s committees and chairs of the Remuneration

Committee and Board Risk Committee

•

Approved the appointment of the new Senior Independent

Director

•

Received reports at each scheduled meeting from the Board

committee chairs on key areas of focus for the committees

and quarterly updates from Standard Chartered Bank (Hong

Kong) Lim

ited and

its Audit and Board Risk committees

•

Undertook train

ing on d

irector duties and the governance

landscape

•

Approved the reallocation of the work of the Board Financ

ial

Crime Risk Committee

•

Discussed and reviewed the independence, performance and

annual re-election of the non-executive directors

•

Approved the continued independence of Christ

ine Hodgson,

an independent non-executive director (INED), up until she

stepped down from the Board on 31 January 2023

•

Approved the re-appointment of the independent advisers to

the Board, on cyber security and cyber threats, and ﬁnanc

ial

crime

•

Authorised potential conﬂicts of interest relating to directors’

external appointments

•

Discussed the observations and themes aris

ing from the 2022

external Board and committees’ effectiveness review ahead

of approving the 2023 Action Plan in early 2023

•

Reviewed, and approved updates where appropriate, to the

Terms of Reference for each Board committee

•

Further developed meaningful linkages between the Board

and its subsid

iar

ies at chair, board and committee level

•

Approved changes to the Group Sources of Authority

Framework to support the reorganisat

ion of certa

client segments

Shareholder and

stakeholder engagement

•

Engaged with investors, held meetings with brokers, discussed

the views of inst

itut

ional shareholders

•

Discussed and reviewed the approach to engaging investors

and other relevant stakeholders ahead of the 2022 Annual

General Meeting (AGM) in relation to the Group’s net zero

pathway

•

Held the 2022 AGM

•

Held a hybrid stewardship event attended by investors

representing a sizeable proportion of our equity as well as

several shareholder representative bodies

•

Engaged with employees, clients, shareholders and regulators

•

As part of the Group’s asset reunif

icat

ion programme,

approved the donation of reclaimed assets to Futuremakers

by Standard Chartered, a global in

iat

ive to tackle

inequal

ity

and promote greater economic inclus

ion

•

Met with shareholders to discuss remuneration proposals

and outcomes, also following response to our directors’

remuneration policy and directors’ remuneration report at the

2022 AGM, to better understand their views

•

Discussed support provided to clients, colleagues and

communit

ies dur

ing continued impact of COVID-19 in some

markets

•

Reviewed and discussed an investor sentiment survey

•

Received bi-annual updates from Investor Relations, includ

ing

share price and valuation analysis, market engagement and

ownership analysis and sell-side sentiment

Spotlight

Board Financ

ial

Crime Risk Committee

Given the progress made by the Board Financ

ial

Crime Risk Committee (BFCRC) in respect to ﬁnanc

ial

crime risk management, the 2020 Board effectiveness

review highl

ighted the potent

ial for the work of the

BFCRC to be reallocated to a combinat

ion of the

Board Risk Committee, the Audit Committee and the

Board. Feedback from the 2021 Board effectiveness

review ind

icated broad support for th

is approach.

In light of this, the Board agreed to reallocate the

work with effect from 1 April 2022. The reallocation of

BFCRC oversight enables a more holist

ic and efﬁcient

examinat

ion and d

iscuss

ion of r

isks that are closely

linked, such as fraud, informat

ion and cyber secur

ity

and ﬁnancial cr

ime. The BFCRC held one meeting in

2022 where it reviewed the agenda and conﬁrmed

the reallocation of each item into the new structure.

Spotlight

Investor sentiment

survey

An external investor sentiment survey, on an

anonymous basis, was conducted during the year with

the intent

ion of seek

ing ins

ight

into how the Group was

perceived, to ident

ify areas of focus for

investors and

understand how the Group could improve its investor

communicat

ions. Th

is was particularly important

given the changes in the external environment and the

evolution of the Group’s strategy. The Board discussed

key areas to focus on to address concerns investors had

highl

ighted and wh

ich had emerged from the report.

Stakeholders

Regulators and

governments

Investors

Stakeholders

Investors

Society

Employees

150

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Board and committee structure: decis

ions, respons

ies and delegat

ion of authority

Terms of Reference for the Board and each committee are in place to provide clarity over where responsib

ity for decis

ion-

making lies. These are reviewed annually against industry best practice and corporate governance provis

ions and gu

idance,

includ

ing the PRA Superv

isory Statement on Board Responsib

ies (as amended).

With the exception of the Governance and Nominat

ion Comm

ittee (where the Group Chairman is its Chair) all of the Board

committees are composed of INEDs who bring a divers

ity of sk

ills, experience and knowledge to the discuss

ion, and play an

important role in supporting the Board.

Written Terms of Reference for the Board and its committees can be viewed at

sc.com/termsofreference

Standard Chartered PLC

The Board must act with integr

ity and

collectively responsible for establish

ing the

Company’s purpose, values and strategy. It

is also responsible for promoting its culture

and overseeing its conduct and affairs for

promoting the long-term success of the

Group, as well as ensuring leadership with

a framework of effective controls.

The Board sets the strategic direct

ion of

the Group, approves the strategy and takes

the appropriate action to ensure that the

Group is suitably resourced to achieve its

strategic aspirat

ions.

The Board considers the impact of its

decis

ions and

its responsib

ies to all of the

Group’s stakeholders, includ

ing employees,

shareholders, regulators and governments,

clients, suppliers, the environment and the

communit

ies

in which we operate.

The Board discharges its responsib

ies

directly or, in order to assist it in carrying

out its function of ensuring effective

independent oversight and stewardship,

delegates specif

ied respons

ies to

its committees. Detail of how the Board

fulﬁlled its responsib

ies

in 2022, as well

as key topics discussed and considered by

the Board committees, can be found in this

Directors’ report.

Biograph

ies for Board members are set out

on pages 138 to 142.

The Group Chief Executive is responsible for

the management of all aspects of the

Group’s businesses, developing the strategy

in conjunct

ion w

ith the Group Chairman and

the Board, and leading its implementat

ion.

The Board delegates authority for the

operational management of the Group’s

business to the Group Chief Executive for

further delegation by him in respect of

matters that are necessary for the effective

day-to-day running and management of

the business. The Board holds the Group

Chief Executive accountable in discharg

ing

his delegated responsib

ies.

The Management Team comprises the

Group Chief Executive and the Group Chief

Financ

ial Ofﬁcer, reg

ional CEOs, client

segment CEOs, and our global function

heads. It has responsib

ity for executing

the strategy. Details of the Group’s

Management Team can be found on

pages 143 to 145

Group Chief

Executive

Management Team

Audit Committee

Oversight and review of matters relating to ﬁnanc

ial report

ing,

the Group’s internal controls, includ

ing

internal ﬁnanc

ial controls,

and the work undertaken by Conduct, Financ

ial Cr

ime &

Compliance, Group Internal Audit and the Group’s Statutory

Auditor, Ernst & Young LLP (EY).

page 163

Board Risk Committee

Oversight and review of the Group’s Risk Appetite Statement,

the appropriateness and effectiveness of the Group’s risk

management systems and the princ

ipal r

isks, includ

ing Cl

imate

Risk, to the Group’s business. Furthermore, considerat

ion of the

impl

icat

ions of material regulatory change proposals and due

dil

igence on mater

ial acquis

ions and disposals.

page 170

Culture and Sustainab

ity

Committee

Oversight and review of the Group’s culture and

sustainab

ity prior

ies.

page 176

Governance and

Nominat

ion Comm

ittee

Oversight and review of Board and executive succession,

overall Board effectiveness and corporate governance issues.

page 179

Remuneration Committee

Oversight and review of remuneration, share plans and

other incent

ives.

page 184

151

Standard Chartered

– Annual Report 2022

Directors’ report

Our Board meetings

The Board is committed to mainta

ing a comprehensive

schedule of meetings and a forward agenda to ensure its time

is used most effectively and efﬁc

iently, and

is supported by the

Group Company Secretary to facil

itate th

is. Flexib

ity in the

programme is important and permits key items to be added

to any agenda so that the Board can focus on evolving and

important matters at the most appropriate time.

Performance against delivery of the agreed key ﬁnanc

ial

prior

ies is reviewed at every scheduled meeting, with

particular reference to the detailed Group management

accounts. The Group Chief Executive and Group Chief

Financ

ial Ofﬁcer comment on current trad

ing, business

performance, the market, colleagues, relevant stakeholders,

and regulatory and external developments at each scheduled

meeting, and present comparative data and client ins

ight.

In addit

ion, the Group Ch

ief Risk Ofﬁcer period

ically attends

meetings to update the Board on key risks.

The Group Chairman holds INED-only meetings ahead

of each scheduled Board meeting, which provides

the opportunity for discuss

ion on key agenda

items and

other matters without the executive directors and

management present.

Sir Iain Lobban and Paul Khoo, who are engaged by the

Board to act as independent advisers to the Board and its

committees on cyber security and cyber threat management,

and ﬁnancial cr

ime respectively, attended a combinat

ion of

Board and committee meetings to provide an independent

and current view on the Group’s progress in this area. The

Board continue to ﬁnd Sir Ian’s and Paul’s inputs valuable and

renewed their appointments for a further 12 months.

Our Board committees

The Board places sign

iﬁcant rel

iance on its committees by

delegating a broad range of responsib

ies and

issues to

them. It therefore remains crucial that effective linkages are

in place between the committees and the Board as a whole,

not least as it is impract

icable for all INEDs to be members of

all of the committees. Mechanisms are in place to facil

itate

these linkages, includ

ing ensur

ing that there are no gaps

or unnecessary duplicat

ions between the rem

it of each

committee and overlapping membership between Board

committees where necessary. Alongside interconnected

committee membership, the Board receives a written

summary of each of the committee’s meetings and verbal

updates at the Board, where appropriate.

Further details on each committee, includ

ing the

ir oversight

and focus during 2022, can be found in the Board committee

reports starting on page 163.

Development of Board activ

ies in 2022

Given the easing of travel restrict

ions dur

ing 2022, the Board

and its committees were pleased to hold a greater number

of in-person meetings than seen in the previous couple of

years. However, as a global Board that reﬂects our diverse

footprint, some directors continued to face challenges with

travel, and as such it was important to continue to util

ise

interact

ive technology where requ

ired.

As in previous years, the most appropriate format for each

Board and committee meeting was assessed by the Group

Chairman or respective committee chair, with support

from the Group Company Secretary, to ensure inclus

ity

and agil

ity and to protect authent

ic engagement. This

resulted in some meetings being held in person, virtually or

a combinat

ion of the two. Irrespect

ive of location and time

zone, each director was able to interact effectively with

other attendees.

The timel

ine on th

is page shows the Board’s collective

engagement throughout the year.

Board activ

ies during 2022

January

February

March

April

May

June

July

August

September

October

November

December

Scheduled meeting

Key:

Informal session

AGM

Ad hoc meeting

Dubai, UAE

Singapore

152

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Board composit

ion, roles and attendance

in 2022

Group Chairman

José Viñals

The Group Chairman is committed to ensuring optimal Board effectiveness. A key mechanism to

drive this is the appropriate composit

ion and balance of

ind

iduals.

The Board is composed of a major

ity of

independent non-executive directors who provide an independent perspective,

constructive challenge, and monitor the performance and delivery of the strategy with

in the R

isk Appetite and controls set by

the Board.

Detail regarding Board divers

ity can be found w

ith

in the Governance and Nom

inat

ion Comm

ittee report on

pages 179 to 183

Group Chief Financ

ial Ofﬁcer

Andy Halford

Responsib

ies

Responsible for leading the Board, ensuring

its effectiveness in all aspects of its role

and developing the Group’s culture with

the Group Chief Executive. Promotes high

standards of integr

ity and governance

across the Group and ensures effective

communicat

ion and understand

ing

between the Board, management,

shareholders and wider stakeholders.

Executive directors

Group Chief Executive

Bill Winters

Responsib

ies

Responsible for the management of

all aspects of the Group’s businesses,

developing the strategy in conjunct

ion

with the Group Chairman and the Board

and leading its implementat

ion.

Attendance

AGM

Scheduled

8/8

Ad hoc

2/2

Responsib

ies

Responsible for Finance, Corporate Treasury,

Strategy, Group Corporate Development,

Group Investor Relations, Property and

Supply Chain Management functions.

Attendance

AGM

Scheduled

8/8

Ad hoc

2/2

Independent non‑executive directors

Senior Independent Director

Maria Ramos

Phil Rivett

Gay Huey Evans, CBE

Jasmine Whitbread

Shir

ish Apte

David Conner

Christ

ine Hodgson, CBE

David Tang

Carlson Tong

Responsib

ies

Provides a sounding board for the Group

Chairman and discusses concerns that are

unable to be resolved through the normal

channels or where such contact would be

inappropr

iate w

ith shareholders and other

stakeholders. Chairs the Governance and

Nominat

ion Comm

ittee when consider

ing

succession of the Group Chairman. Is

available to shareholders if they have

concerns that cannot be resolved or for

which the normal channels would be

inappropr

iate. Can be contacted v

ia the

Group Company Secretary at 1 Basinghall

Avenue, London EC2V 5DD. Maria Ramos

took over from Christ

ine Hodgson as Sen

ior

Independent Director on 1 September 2022.

Attendance

AGM

Scheduled

8/8

Ad hoc

2/2

Attendance

AGM

Scheduled

8/8

Ad hoc

2/2

Attendance

AGM

Scheduled

Ad hoc

8/8

2/2

8/8

2/2

8/8

2/2

8/8

2/2

8/8

2/2

8/8

2/2

8/8

2/2

N/A

2/2

1/1

7/7

2/2

6/6

1/1

N/A

4/4

N/A

2/2

N/A

Naguib Kheraj

Robin Lawther, CBE

INEDs that

have stepped

down in 2022

Naguib Kheraj and

Byron Grote stepped

down from the

Board on 30 April

and 30 November

2022 respectively.

INEDs that

joined

in 2022

Byron Grote

Jackie Hunt

Shir

ish Apte, Rob

Lawther and Jackie

Hunt joined the

Board on 4 May,

1 July and 1 October

2022 respectively.

The biograph

ies of each d

irector are set out

pages 138 to 142

The roles of the Group Chairman and

Group Chief Executive are dist

inct from one

another and are clearly deﬁned in detailed

role descript

ions wh

ich can be viewed at

sc.com/roledescript

ions

Board committee roles and attendance can

be found in the committee sections starting

from page 163. Prior to the retirement of the

Board Financ

ial Cr

ime Risk Committee on

1 April 2022, it held one meeting during 2022

with all members in attendance

Christ

ine Hodgson stepped down from the Board on 31 January 2023.

Linda Yueh jo

ined the Board on 1 January 2023.

Further informat

ion can be found on

page 142

153

Standard Chartered

– Annual Report 2022

Directors’ report

Director induct

ion

Three new directors were appointed to the Board during the

year. Shir

ish Apte, Rob

in Lawther and Jackie Hunt possess a

range of skills and a breadth of knowledge relevant to the

Board debate. Details regarding their experience can be

found in their biograph

ies on pages 139 to 141.

All new Board members are given a comprehensive,

formalised induct

ion programme. Pr

ior to taking up their

respective Board and committee posit

ions, the three new

directors were provided with a number of induct

ion sess

ions

to ensure a smooth transit

ion

into their roles and posit

ive

contribut

ions from the outset. In add

ion, Sh

ish Apte and

Maria Ramos received in-depth handovers from Christ

ine

Hodgson and Naguib Kheraj before succeeding them as

Chair of the Remuneration Committee and Board Risk

Committee respectively. This included a period of shadowing

Christ

ine Hodgson and Nagu

ib Kheraj through discuss

ions

and meetings in the lead-up to becoming committee chairs.

Phil Rivett was appointed inter

im Board R

isk Committee Chair

following the retirement of Naguib Kheraj and pending Maria

Ramos’ appointment as Chair receiv

ing regulatory approval.

He was actively involved in the handover process for Maria

Ramos.

While a proportion of the induct

ion

is relevant to all new

Board members, the content of the programme is tailored

to meet each director’s ind

idual level of experience and

expertise. Shir

ish Apte, Rob

in Lawther and Jackie Hunt

partic

ipated or w

ill partic

ipate

in deep-dive sessions on

a number of key topics. Examples include: the role and

responsib

ies of a d

irector; our strategic prior

ies; the crit

ical

enablers and the Stands; the markets in which we operate;

client groups and product segments and princ

ipal r

isks. In

addit

ion, learn

ing and development sessions have taken

place or have been arranged to ensure they are well versed

with the sign

iﬁcant

issues unique to each of their committee

memberships.

Each induct

ion typ

ically consists of a combinat

ion of meet

ings

with exist

ing Board members and sen

ior staff. New Board

members are also given the opportunity to attend key

management meetings and engage with stakeholders,

includ

ing

investors and clients. Vis

its to key markets across our

footprint were lim

ited due to the var

iat

ion of travel restr

ict

ions

but opened up as the year progressed. As such, there was a

combinat

ion of

in person and virtual engagements.

Linda Yueh jo

ined the Board on 1 January 2023; her exper

ience

can be found in her biography on page 142. She has made

good progress in respect to her induct

ion plan so far th

is year,

vis

ing two of our markets.

The Group Corporate Secretariat function supports the

INEDs as they undertake their induct

ion programmes,

which are typically completed with

in the ﬁrst s

ix to nine

months of an INED appointment and progress is reviewed

by the Governance and Nominat

ion Comm

ittee after six

months. The programmes are regularly reviewed and take

into account directors’ feedback to ensure continuous

development and improvement.

Ongoing development plans

Continuous train

ing and development beyond a d

irector’s

induct

ion plan

is essential to mainta

ing a highly engaged,

effective and well-informed Board. Ongoing development

plans also help ensure directors lead with integr

ity and

promote the Group’s culture, purpose and values.

Mandatory learning and train

ing are

important elements

of directors’ ﬁtness and propriety assessments as required

under the Senior Managers Regime. During the year, all

directors received a combinat

ion of mandatory learn

ing

and train

ing,

internal and external brief

ings, presentat

ions

from guest speakers, and papers on a wide range of

topics to ensure the directors are well informed and that

the Board remains highly effective. The Board committee

members also received specif

ic tra

ing relevant to the

work of their respective committees. The format of ongoing

train

ing var

ied, includ

ing formal refresher sess

ions and

informal meetings. The train

ing covered a var

iety of topics

throughout the year and were held either in person, virtually

or a combinat

ion of the two. The table on the next page

gives further detail on who received these brief

ings.

The Group Chairman reviews with each director their

train

ing and development needs both

in real time and

as part of the annual performance cycle. Where it is

recognised that the Board or ind

idual directors need

further train

ing or development

in key areas, addit

ional

sessions are arranged with subject matter experts.

All of the directors have access to the advice of the Group

Company Secretary, who provides support to the Board

and is responsible for advis

ing the Board on governance

matters. Directors also have access to independent,

professional advice at the Group’s expense where they judge

it necessary to discharge their responsib

ies as d

irectors.

154

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

2022 director train

ing overv

iew

Induction

Directors’

duties and

regulatory

updates

Data

management

Supply

chain ICS

threats

Cloud

technology

Global

demographic

trends

Resolvabil

ity

Cyber

attacks

Climate

risk

ICS deep

dive: Threat

Scenario-

Led Risk

Assessment

José Viñals

N/A

Bill Winters

N/A

Andy Halford

N/A

Shir

ish Apte

N/A

David Conner

N/A

Byron Grote

N/A

Christ

ine Hodgson, CBE

N/A

Gay Huey Evans, CBE

N/A

Jackie Hunt

N/A

Naguib Kheraj

N/A

Robin Lawther, CBE

N/A

Maria Ramos

N/A

Phil Rivett

N/A

David Tang

N/A

Carlson Tong

N/A

Jasmine Whitbread

N/A

Applicable to directors who received induct

ion tra

ing dur

ing 2022

Train

ing sess

ions were circulated as online video tutorials

Shir

ish Apte, Rob

in Lawther and Jackie Hunt jo

ined the Board on 4 May 2022,

1 July 2022 and 1 October 2022 respectively. A number of train

ing sess

ions

took place before their appointments

Naguib Kheraj and Byron Grote stepped down from the Board on 30 April

2022 and 30 November 2022 respectively. Certain train

ing sess

ions took place

after these dates

Director attendance was not mandatory

Director attended the session

Director did not attend the session but received any accompanying material

and had opportunit

ies to ra

ise questions and observations with the Group

Chairman and Group Company Secretary

Directors’ performance

The Group Chairman led the evaluation of ind

idual director

performance during 2022. These one-to-one sessions

considered:

•

their performance against core competencies and their

ind

idual effectiveness

•

their time commitment to the Group, includ

ing (where

relevant) the potential impact of any outside interests

•

their ongoing development and train

ing needs

•

the Board’s composit

ion, tak

ing into account when each

INED envisaged stepping down from the Board

•

the current and future committee membership and

structure

•

their engagement across the Group.

These performance reviews are used as the basis for

recommending the re-election of directors by shareholders

at the 2023 AGM and to assist the Group Chairman with

his assessment of the INEDs’ competencies. In addit

ion, the

Group Chairman has responsib

ity for assessing annually the

ﬁtness and propriety of the Company’s INEDs and the Group

Chief Executive Ofﬁcer under the Senior Managers Regime.

These assessments were carried out in respect of each INED

and the Group Chief Executive and no issues in relation to

ﬁtness and propriety were ident

iﬁed.

Group Chairman’s performance

Maria Ramos, as Senior Independent Director, assisted by

Christ

ine Hodgson, who was Sen

ior Independent Director for

part of the year, and Fﬁon Hague, who facil

itated the Board

evaluation this year, reviewed José Viñals’ performance

as Group Chairman. Consolidated feedback was shared

with him.

Time commitment

Our INEDs commit sufﬁc

ient t

ime in discharg

ing the

responsib

ies as d

irectors of Standard Chartered. In general,

we estimate that each INED spent approximately 40 to

70 days on Board-related duties, and considerably more for

those who chair or are members of multiple committees.

Spotlight

Interview with

Robin Lawther

An ins

ight

into one of our new INEDs

What drew you to Standard Chartered

and how do your in

ial impress

ions al

ign to

your expectations?

As an entrepreneur at heart, I was delighted with the

opportunity to jo

in a global bank that serves bus

inesses

that promote trade and innovat

ion and puts cl

ients at

the heart of everything they do. Standard Chartered’s

drive to be diverse and inclus

ive as well as g

ing back

to communit

ies

in which they work was also a big

draw, particularly as these are important concepts

I’ve championed throughout my career. Since jo

ing

Standard Chartered in July my in

ial impress

ions have

been great. I’ve enjoyed getting to know my colleagues,

as well as other stakeholders, and the Board’s vis

it to

Dubai in November is a good example of this. We were

hosted by an excellent team who ran a comprehensive

agenda and were very welcoming.

How effective have you found your

induct

ion programme

in preparing you

as an INED and for the Standard Chartered

Board and committee discuss

ions?

My induct

ion programme has been very useful so

far and has covered a broad range of different topics

relevant to my role. I’ve also engaged with members of

our leadership team across the Group who’ve provided

valuable ins

ight

into their roles, the business and the

functions. As part of the programme, I recently vis

ited

Malaysia and Singapore, along with two of my fellow

new directors. This was a fascinat

ing exper

ience where I

spoke to many different people from across the business,

includ

ing our colleagues

in the Global Business Service

centre, Malaysia as well as our partners in Singapore

who work on our dig

ital bank

ing solutions. I was really

encouraged to see how focused everyone is on driv

ing

the client experience and supporting the younger

demographic. I’m looking forward to the remainder of the

induct

ion process.

What are the key skills and experience

you bring to the Board?

I’ve thoroughly enjoyed my executive and non-

executive roles over the years at organisat

ions such

as JP Morgan, UK Government Investments, Nordea

Bank Abp, M&G plc, Ashurst LLP and Aon PLC. I’m truly

thankful for the opportunit

ies and great exper

iences

these roles have provided, which have helped deepen

my comprehensive knowledge across global markets

and the ﬁnancial, regulatory and governance landscape

more broadly. I enjoy acting as a sounding board and

helping to problem-solve on many issues, as well as

having the chance to get to know the teams with whom

I have worked. I believe very strongly in being respectful

to everyone and embracing inclus

ity. Whilst I seek to

improve divers

ity

in all aspects, I have chosen to focus on

gender. This has been important to me throughout my

career, and I feel it’s crucial for women to empower and

support each other. In addit

ion, I th

ink that mentoring

and reverse mentoring are crit

ical and I am happy to say

that I have just been assigned a colleague in Hong Kong

as my ﬁrst reverse mentor and I am learning loads.

How important is a company’s culture to

you and what are your views on the culture

at Standard Chartered?

This is incred

ibly

important. In my experience

a company that focuses on embedding the right

behaviours, and taking actions to make this culture a

reality, will have a better chance at achiev

ing success

in the long-term. I’m impressed by how many people at

Standard Chartered are invested in deliver

ing on the

Group’s ambit

ions through collaborat

ion and innovat

ion,

while continu

ing to strengthen an

inclus

ive, h

igh

performance, risk-aware culture.

How do you build connections with

key stakeholders?

I believe respect, empathy and a steely determinat

ion

to do the right thing are key ingred

ients

in build

ing

connections and relationsh

ips. We have a wealth

of stakeholders to consider at Standard Chartered,

includ

ing cl

ients, suppliers, colleagues, shareholders,

regulators and the communit

ies

in which we operate.

Listen

ing and respond

ing to their prior

ies and concerns

is so important and helps to deliver on our strategic

prior

ies. As I mentioned before, divers

ity and

inclus

ion

are important to me. Earlier in my career I set up an

annual women’s networking event which has really

grown over the years. I now host this more regularly and

I’m delighted by the high turnout and enthusiasm to

support one another.

What do you see as some of the key

prior

ies for Standard Chartered over the

next 5 years?

This is an important aspect of the Board’s agenda,

and we discuss this with management in depth. I believe

continu

ing to put cl

ients at the heart of all that we do

to be vital, as well as developing our talent and youth,

aim

ing to

increase shareholder returns, giv

ing back to

the communit

ies and env

ironments in which we operate,

mainta

ing a risk aware strategy, and leveraging off our

diverse and unique network.

Robin Lawther, CBE

Independent

Non-Executive Director

155

Standard Chartered

– Annual Report 2022

Directors’ report

156

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

This year, the Board Effectiveness Review comprised an

externally facil

itated evaluat

ion in accordance with the UK

Corporate Governance Code. It was conducted by Fﬁon

Hague of Independent Board Evaluation (IBE). The Board’s

ﬁve committees were also observed as part of the review.

Neither Fﬁon Hague nor IBE has any other connection with the

Company or any ind

idual directors. This was the third external

evaluation the Board has undertaken during José Viñals’ tenure

as Group Chairman.

Board effectiveness review format

A comprehensive brief was provided to the assessment team

at IBE by the Group Chairman and the assessment team

observed the Board and its committees between July and

October. The review took the form of detailed interv

iews w

ith

every board member, members from the Management Team

and other key non-board contributors, some 26 people in total.

All partic

ipants were

interv

iewed thoroughly

in accordance

with a tailored agenda. The evaluation team also observed

Board and committee meetings, reviewed papers from these

meetings, as well as more static documentation provided.

A report was compiled by the evaluation team based on the

informat

ion and v

iews supplied by those interv

iewed and

observations from the Board and committee meetings. Draft

conclusions were discussed with the Group Chairman and

subsequently the whole board in December 2022, with Fﬁon

Hague present. Following the Board discuss

ion, IBE prov

ided

feedback to each committee chair on the performance of

their committee and also discussed the report on the Group

Chairman’s performance with the current and previous Senior

Independent Director.

In addit

ion, the Group Cha

irman received a report with

feedback on ind

idual directors which was used to support

the ind

idual Fit and Proper and annual assessments

conducted with directors. Key observations were discussed by

the Governance and Nominat

ion Comm

ittee ahead of the

Board and its committees ﬁnal

ing their 2023 action plans. Key

observations and action plans for the Board’s ﬁve committees

can be found in the Board committee reports starting on

page 163.

Progress against the 2022 Action Plan

The 2022 Action Plan set out a number of actions to be achieved

following the internal Board evaluation conducted in 2021. The

2022 Action Plan was regularly reviewed during the year and

good progress had been made against actions as evidenced

by this year’s external Board effectiveness review.

Key observations from the 2022 external

effectiveness review

•

The Board has shown considerable progress since

the last external evaluation and believes in continuous

improvement.

•

The Board is regarded as well constructed overall, with

plenty of listed experience and good divers

ity rat

ios,

although slightly larger than most market peers.

•

The Board considered the importance of creating

more space on the Board agendas and creating a

mechanism to take papers by exception.

•

That the standard tenure of INEDs needed further

considerat

ion

in order to smooth succession.

2023 Action Plan

•

Review agendas of the Board and its committees to

reduce overlaps and create efﬁcienc

ies.

•

Revise key performance ind

icators and regular

reports to focus attention on outcomes rather than

activ

ity and completed steps.

•

Enhance peer benchmarking informat

ion and data.

•

Improve INED appointment process by increas

ing

pace of recruitment and decis

ion mak

ing.

•

Clarify the timetable and those responsible for

Board appointments with

in that framework.

•

Enhance new director induct

ion packs to ass

ist

them in understanding how strategy, risk appetite

and the organisat

ion ﬁt together.

•

Rebalance the Board agendas to create more time

for linked strategic discuss

ions.

•

Review the mechanism for Board workforce

engagement.

•

Enhance the framework for ensuring reputational

risk is appropriately escalated to the Board and

its committees.

Board effectiveness

External evaluation process

Evaluation brief

provided to IBE

Observations discussed

with the Group Chairman,

Governance and Nominat

ion

Committee, Board and

committee chairs

Action plans for 2023 agreed

with Board and committees

One‑to‑one interv

iews

conducted

Board and committees

observed

Evaluation and report

prepared

157

Standard Chartered

– Annual Report 2022

Directors’ report

Director independence

The Governance and Nominat

ion Comm

ittee reviews the

independence of each of the non-executive directors, taking

into account any circumstances likely to impa

ir, or wh

ich could

impa

ir, the

ir independence. Recommendations are then made

to the Board for further considerat

ion.

In determin

ing the

independence of a non-executive director,

the Board considers each ind

idual against the criter

ia set

out in the UK Code, the Hong Kong List

ing Rules and also

considers their contribut

ion and conduct at Board meet

ings,

includ

ing how they demonstrate objective judgement and

independent think

ing.

The Board considers all of the non-executive directors to be

independent of Standard Chartered, concluding that there

are no relationsh

ips or c

ircumstances likely to impa

ir any

INEDs’ judgement.

Christ

ine Hodgson

independence

At the request of the Company, Christ

ine, who had s

ignalled

her intent

ion to ret

ire from the Board at the end of her

nine-year term as an independent non-executive director

in September 2022, agreed to remain on the Board until

31 January 2023. This enabled Christ

ine to fac

itate the orderly

transit

ion of her role as Cha

ir of the Remuneration Committee

to her successor, Shir

ish Apte, as well as lead the shareholder

consultation required following a sign

iﬁcant m

inor

ity vote

against the Company’s remuneration policy and report

resolutions at the 2022 AGM.

The Board, taking into account the provis

ions set out

in the UK

Code and the Hong Kong List

ing Rules, cons

idered Christ

ine

independent up until she stepped down from the Board

despite her serving for a period of more than nine years and

concluded that there were no relationsh

ips or c

ircumstances

likely to impa

ir her judgement. Th

is was based on a number of

factors, includ

ing:

•

Christ

ine’s strong record

in making object

ive dec

ions and

holding management to account and remain

ing w

ill

ing and

able to do so

•

her clear independence demonstrated in terms of her

partic

ipat

ion at meetings with management and her

interact

ions w

ith shareholders and proxy agencies

•

her arm’s-length approach to dealing with executive

directors and continued challenge where appropriate

•

none of Christ

ine’s external d

irectorsh

ip appo

intments

conﬂicted or potentially conﬂicted with those of the

Company

•

the broader composit

ion of the Board,

includ

ing the fact

that no other director had a tenure in excess of nine years.

External directorsh

ips and other bus

iness

interests

Board members hold external directorsh

ips and other outs

ide

business interests. We recognise the sign

iﬁcant beneﬁts

that broader boardroom exposure provides for our directors.

However, we closely monitor the nature and quantity of

external directorsh

ips our d

irectors hold, in order to satisfy

ourselves that any addit

ional appo

intments will not adversely

impact their time commitment to their role at Standard

Chartered, and to ensure that all of our Board members

remain compliant with the PRA directorsh

ip requ

irements, as

well as the shareholder advisory groups’ ind

idual guidance

on ‘over-boarding’. These requirements impose a lim

it on

the number of directorsh

ips both execut

ive and INEDs are

permitted to hold.

Details of the directors’ external directorsh

ips can be found

their biograph

ies on pages 138 to 142. Before comm

itt

ing to

an addit

ional appo

intment, directors conﬁrm the existence of

any potential or actual conﬂicts, that the role will not breach

their lim

it as set out by the PRA, and prov

ide the necessary

assurance that the appointment will not adversely impact

their abil

ity to cont

inue to fulﬁl their role as a director of the

Company. All directors continue to hold no more than the

maximum number of directorsh

ips perm

itted under the PRA

rules.

Our established internal processes ensure that directors

do not undertake any new external appointments

without ﬁrst receiv

ing formal approval of the Board. The

Board has delegated authority to make such approvals

to the Group Chairman, with the exception of his own

appointments. Of those INEDs who took on new external

directorsh

ips dur

ing the year, four were regarded as

sign

iﬁcant d

irectorsh

ips (appo

inted to the board of a

listed company) and as such were announced to the

market in line with our list

ing obl

igat

ions. Further deta

on the specif

ic appo

intments are provided below:

•

Gay Huey Evans was appointed to the board of S&P

Global as a non-executive director and member of its audit

committee on 28 February 2022, following the closing of the

merger between S&P Global and IHS Markit. Gay resigned

as an independent director of IHS Markit on the same day

•

Carlson Tong was appointed to the board of MTR

Corporation Lim

ited as an

independent non-executive

director, chairman of its audit and risk committee and

a member of its ﬁnance and investment committee on

25 May 2022

•

Byron Grote was appointed to the board of

InterContinental Hotels Group PLC (IHG) as a non-executive

director and member of its audit and remuneration

committees on 1 July 2022

•

Jackie Hunt will jo

in the Board of W

ill

is Towers Watson plc

(WTW) as an independent non-executive director on

1 April 2023.

All four directors discussed their respective appointments

with the Group Chairman in advance of accepting the

posit

ions. Each d

irector conﬁrmed the existence of any

potential or actual conﬂicts; provided assurance that the

respective roles would not breach their lim

its as set out by

the PRA; and conﬁrmed that their appointments would

not impact their abil

ies to devote sufﬁc

ient t

ime and

focus to both their Board and committee responsib

ies.

The Board’s executive directors are permitted to hold

only one non-executive directorsh

ip. Of our execut

ive

directors, Andy Halford, was until 31 December 2022,

the Senior Independent Director, Chair of the Audit

Committee and member of the Nominat

ion Comm

ittee

at Marks and Spencer Group plc, listed on the FTSE 250

and Bill Winters is a non-executive director of Novartis

International AG, listed on SIX Swiss Exchange.

158

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Stakeholder

engagement

Ensuring authentic engagement

across our markets

Clients

Regulators and

governments

Employees

Investors

Society

The Board recognises the importance of stakeholder

considerat

ion and

interact

ion. It forms a cruc

ial part of Board

decis

ions and d

iscuss

ions, as well as the rev

iew of our purpose,

values and strategy.

As the impact of COVID-19 started to lessen across many

of our markets, overseas travel was gradually reintroduced

during the year. This was an opportunity for directors, either

collectively or ind

idually, to engage in person with a wide

range of stakeholders, some for the ﬁrst time since early 2020.

Some of our markets continued to face COVID-19-related

restrict

ions dur

ing 2022, particularly in the early stages.

Certain vis

its were e

ither lim

ited or replaced w

ith virtual

engagements. Dialogue via interact

ive technology ensured

authentic engagement, but did at times prevent the meeting

engagement the Board would usually undertake if it were

in-person. Despite this, the Board is aware that a combinat

ion

of both virtual and in-person meetings is an effective way

of driv

ing stakeholder engagement as

it provides ﬂexib

ity

and the opportunity to tailor interact

ions depend

ing on the

partic

ipants.

Regardless of the format, Board activ

ies led to a number of

invaluable opportunit

ies to engage w

ith stakeholders across

the Group’s diverse network, includ

ing those

ident

iﬁed on the

following pages. Directors did not just engage collectively

with stakeholders, but also ind

idually. Independent adviser

members to the Board, Board Risk Committee and Audit

Committee also engaged directly with them.

Informal and formal sessions with stakeholders across our

footprint help provide INEDs and independent

adviser

members with a comprehensive understanding of the Group’s

market operations, implementat

ion of strategy, and the

external and internal impact of the Group’s activ

ies.

Further detail regarding the Board’s engagement with our

stakeholders can be found on the following pages. Detail

regarding how Board Committees and their members

engaged with stakeholders can be found in the committee

report sections starting from page 163.

Members of the Board, Management Team, directors from the Group’s banking subsid

iar

ies and other colleagues during a

market vis

it to Duba

i in November 2022

Suppliers

159

Standard Chartered

– Annual Report 2022

Directors’ report

Engagement with investors

Our approach

Aim

ing to del

iver robust returns and long-term,

sustainable value for shareholders is of key importance

to the Board. We continuously reﬂect on how the Board

engages with our investors, openly seeking feedback and

review

ing prev

ious activ

ies. We believe this strengthens

engagements and helps support the Board’s focus on

developing open and trusted relationsh

ips w

ith investors.

Although travel restrict

ions

in some markets lim

ited

in-person engagement at times, the Board was able to

physically meet with shareholders on a number of occasions.

Where directors could not meet with shareholders in

person, a virtual approach was taken. As with last year, this

provided the opportunity to partic

ipate

in events where

extensive travel may have restricted investors in the past.

During the year, we mainta

ined a comprehens

ive programme

of engagement, includ

ing

investor advisory bodies and

credit rating agencies, and provided updates on progress

made to transform our business for improved returns.

The Group Chairman and other Board directors had

direct contact with investors and advisory voting bodies

during the year, and received regular updates from the

Investor Relations team, includ

ing reports on market and

investor sentiment. An external independent investor

perception study was commiss

ioned, wh

ich was then

considered by the Board. The Group Chairman, as part

of his role, leads engagement with shareholders and

hosted the 2022 AGM alongside fellow Board members.

The Group Chairman and certain Board members also

held an investor stewardship event sim

ilar to last year.

Christ

ine Hodgson, Cha

ir of the Remuneration Committee

up until 31 December 2022, led the shareholder

consultation required following a sign

iﬁcant m

inor

ity

vote against the Company directors’ remuneration

policy and report resolutions at the 2022 AGM. Maria

Ramos took over from Christ

ine Hodgson as Sen

ior

Independent Director in September 2022. The Senior

Independent Director was available to shareholders

if they had concerns that could not be resolved or for

which the normal channels were inappropr

iate.

Bill Winters and Andy Halford are the primary spokespeople

for the Group. Throughout the year they engaged extensively

with exist

ing shareholders and potent

ial new investors during

ind

idual or group meetings and conferences, either in person

or virtually. In addit

ion, each member of the Management

Team responsible for a client segment or a geographic region,

as well as the Group Treasurer, engaged with investors

to promote greater awareness and understanding of

the strategy in their respective areas, as well as taking

the opportunity to receive investor feedback ﬁrst hand.

Institut

ional shareholders

The Group mainta

ins a d

iverse, high-quality and

predominantly inst

itut

ional shareholder base. The Investor

Relations team has primary responsib

ity for managing

day-to-day communicat

ions w

ith these shareholders

and provides support to the Group Chairman, Group

Chief Executive, Group Chief Financ

ial Ofﬁcer, other

Board members and senior management in conducting

a comprehensive engagement programme.

Presentation material and webcast transcripts

are made available on the Group’s website and can

be viewed at

sc.com/investors

Debt investors and credit rating agencies

Our Debt Investor Relations team has primary responsib

ity

for managing the Group’s relationsh

ips w

ith debt investors

and the three major rating agencies, with local market chief

executives and chief ﬁnanc

ial ofﬁcers lead

ing on smaller

subsid

iary rat

ings. In 2022, management met with debt

investors across Europe, North America and Asia, and

mainta

ined a regular d

ialogue with the rating agencies.

It is important that the Group, as an active issuer of senior

unsecured and non-equity capital, mainta

ins regular

contact with debt investors to ensure continued appetite for

the Group’s credit. The Group’s credit ratings are a key part

of the external perception of our ﬁnanc

ial strength and

creditworth

iness.

Engagement with investors: what we did during 2022

February

2021 full year results

and roadshows

March

Conferences and

roadshows

April

2022 ﬁrst quarter

results and

conferences

May

AGM and

conferences

June

Financ

ial Markets

event and

conferences

July

2022 half year

results

August

Roadshows

September

Conferences and

roadshows

October

2022 third quarter

results

November

Stewardship event,

Consumer, Private &

Business Banking event

and conferences

December

Conferences

Investor stewardship event

The Group Chairman hosted a stewardship

event in November 2022 alongside the Senior

Independent Director and chairs of the Board

Risk, Audit, and Remuneration Committees. Given

the easing of travel restrict

ions

in the UK, the

event was held as a hybrid meeting which offered

ﬂexib

ity regarding how investors could engage.

The Group Chairman provided a strategic update

regarding Board and committee activ

ies during

the year which was supplemented by opening

remarks from the Remuneration Committee Chair.

This was followed by a question and answer (Q&A)

session. Questions could be submitted in advance

of the event, asked live in person or via a web-

based platform for those who joined electron

ically.

160

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Engagement with investors

continued

Retail shareholders

The Group Company Secretary oversees communicat

ion w

ith our retail shareholders.

AGM

The meeting was held on 4 May 2022. We were pleased

that shareholders could attend in person for the ﬁrst

time since 2019 given the easing of restrict

ions on publ

gatherings. In addit

ion,

in light of the success of last year’s

dig

itally enabled meet

ing, we also offered shareholders

the opportunity to partic

ipate electron

ically via a live web-

portal. With

in th

is portal, shareholders were able to view

a live video feed of the AGM, submit voting instruct

ions

and questions in writ

ing or ask them through an aud

line. Shareholders who attended the meeting in person

were able to submit voting instruct

ions and ask quest

ions

directly.

The AGM is a key date in the Board’s calendar and the

hybrid format ensured that shareholders could engage

with them regarding the Company’s recent performance

and strategic prior

ies. Questions received from

shareholders covered a diverse range of topics, includ

ing

climate and the Group’s net zero pathway; divers

ity; the

Group’s strategy; shareholder engagement; share price

and regulatory developments.

All Board-proposed resolutions were passed, with

shareholder support for each ranging from 68.81 per cent

to 100 per cent. We proposed our net zero pathway as

a shareholder advisory resolution at the AGM. Market

Forces and Friends Provident Foundation ﬁled a resolution

outlin

ing a d

ifferent approach. The Board appreciate the

involvement of both of these organisat

ions and share

their commitment to the transit

ion to net zero, however

the Board supported the Group’s strategic approach to

achieve this and recommended that shareholders support

our advisory resolution and oppose the requis

ioned

resolution. In line with the Board’s recommendation

the advisory resolution was endorsed with 83 per cent

of shareholder support at the 2022 AGM, and the

requis

ioned resolution did not pass. We remain very

grateful for the support of our shareholders.

Detail regarding the directors’ remuneration report and

directors remuneration policy resolutions can be found in

the Directors’ Remuneration Report starting on page 184.

Voting results from the 2022 AGM can be viewed at

sc.com/investors

A summary of responses to questions on key themes raised

by shareholders was made available on our website after the

meeting and can be found at

sc.com/agm

Further informat

ion can be

viewed at

sc.com/investors

Engagement with

clients and suppliers

Clients are central to everything we do and promoting

productive, sustainable relationsh

ips w

ith them is a

key prior

ity. Pr

ior to the COVID-19 pandemic, customer

engagement was built into Board and director vis

its across

our footprint and given the alleviat

ion of travel restr

ict

ions

in certain markets, this method of interact

ion was

gradually reintroduced during the year. Board members,

either collectively or ind

idually, met clients face-to-face

or virtually to keep abreast of developing client trends,

experiences and needs. This also formed and will continue

to form a part of the director induct

ion programme. In

addit

ion, updates on cl

ients’ ins

ights form part of deep

dives into product segment strategy at Board meetings.

Suppliers provide efﬁc

ient and susta

inable goods and

services for our business and certain members of the Board

also met with them during the year. Detail on how the

Group more generally engaged with clients and suppliers

can be found on pages 55, 56, 58 and 59 of the Strategic

report.

Engagement with

regulators and governments

The Board, either collectively or ind

idually, engages with

relevant authorit

ies both

in the UK and across our footprint on

a regular basis. During 2022, this took place via a number of

virtual and physical forums. Topics varied, includ

ing recovery

from the pandemic, geopolit

ical developments, resolut

ion

planning, dig

isat

ion and

innovat

ion, cl

imate-related matters

and cyber security. Certain regulators attended Board

meetings during the year, which provided the opportunity to

discuss key items and developments. Further detail on how

the Group engaged with regulators and governments more

generally can be found on page 57 of the Strategic report

Engagement with society

The Board receives regular updates from management

concerning the communit

ies and env

ironment in which we

operate.

Either collectively or ind

idually, directors were able to vis

some of the Group’s markets this year given the easing

of travel restrict

ions

in certain markets. This provided a

productive opportunity to meet stakeholders in civ

il soc

iety. In

addit

ion, external and

internal speakers provided input to the

Board’s discuss

ions, wh

ich covered key societal issues such as

climate change, the evolving geopolit

ical landscape, and the

continued impact of the pandemic in some of our markets.

Further detail on how the Group engaged with society more

generally can be found on page 59.

161

Standard Chartered

– Annual Report 2022

Directors’ report

The Group Chairman also hosted two subsid

iary cha

engagement sessions during 2022, both held virtually. Each

event opened with specif

ic top

ics introduced by the Group

Chairman, followed by a Q&A session. José Viñals was

encouraged by the high level of interact

ion and shar

ing of

best practices by our subsid

iary cha

irs. Items discussed across

the sessions included:

•

Group performance, strategy and investor reaction

• 2022 Board prior

ies

•

UK Corporate Governance update

•

New ways of working for certain markets post COVID-19

•

Areas of focus for the Group’s boards, includ

ing board

transformation and overseeing culture

• Sustainab

ity.

Committee chair engagement

The Audit Committee held its annual videoconference during

the year, followed by a Q&A session. This was hosted by

the Audit Committee Chair and attended by the chairs of

subsid

iary aud

it committees. The Group Financ

ial Controller;

Group Head, Internal Audit; Regional Head, Audit, Europe

and the Americas and Africa and the Middle East; Group

Head, Conduct, Financ

ial Cr

ime and Compliance; members

of the Group’s statutory auditor, EY, includ

ing the lead aud

partner; the Group Company Secretary and the Committee

Secretary also partic

ipated

in the call. Items discussed during

the call included:

•

2022 Audit Committee focus areas

•

Group Finance update, which featured ﬁnanc

ial results,

IFRS 9 models, overlays and a status report on the Group’s

Aspire Programme

•

Conduct, ﬁnancial cr

ime and compliance update

•

Group Internal Audit reporting to subsid

iary aud

it committees

•

Group statutory audit update from EY.

The Board Risk Committee Chair hosted its annual

videoconference with chairs of the subsid

iary board

risk committees, followed by a Q&A session. The Group

Chairman; Group Chief Risk Ofﬁcer; Global Head of

Enterprise Risk Management and Deputy Chief Risk Ofﬁcer

Standard Chartered Bank; the Group Company Secretary

and Committee Secretary also partic

ipated

in the call.

Items discussed during the call included:

•

2022 Board Risk Committee focus areas

•

Group Chief Risk Ofﬁcer’s 2022 prior

ies

•

Update on Model Risk

•

Management scenarios undertaken during the year,

includ

ing stagﬂat

ion.

The Remuneration Committee Chair also held a

videoconference attended by the subsid

iary remunerat

ion

committee chairs and the chairs of subsid

iary boards that

have remuneration responsib

ies. The Group Cha

irman;

members of the Remuneration Committee; Group Head,

Human Resources; Global Head, Performance, Reward

and Beneﬁts; Head, Executive Compensation and Reward

Governance; the regional, functional and business heads of

Pensions, Rewards and Beneﬁts; and the Group Company

Secretary also partic

ipated

in the call. The calls foster

knowledge sharing and best practice between the Company

Remuneration Committee and the subsid

iary remunerat

ion

committees and raise awareness as remuneration

committees are increas

ingly expected to have overs

ight over

the approach to remuneration for the wider workforce. The

topics that were discussed included:

•

2022 Remuneration Committee focus areas

•

Framework for subsid

iary

interact

ion

•

2022 total variable compensation and ensuring strong

different

iat

ion

•

2023 compensation in light of inﬂat

ion and cost of l

ing

pressures.

Other activ

ies which took place during 2022 to further

strengthen the linkages across the Group included:

•

the Group Chairman attended a Standard Chartered Bank

(Hong Kong) Lim

ited (SCBHK) board meet

ing

•

the Chair of the Group Audit Committee attended a

SCBHK audit committee meeting and the audit committee

chair of Standard Chartered Bank (Singapore) Lim

ited

attended one Group Audit Committee Meeting

•

the Chair of the Board Risk Committee attended a SCBHK

board risk committee meeting.

Further detail regarding how the Group engages with its

stakeholders can be found on

pages 54 to 124

Global subsid

iary governance conference

During the Board’s vis

it to Duba

i in November, we held

our third global subsid

iary governance conference. Th

two-day event was attended by members of the Board,

Management Team and directors from the Group’s

banking subsid

iar

ies. The conference presented the

opportunity for the Board to strengthen and reconnect its

linkages with the Group’s subsid

iary cha

irs, hear their views

on the progress of the Group’s strategy and discuss what

improvements could be made in their markets, as well

as a range of other topics. It also enabled the Board and

Management Team to gain a better appreciat

ion of some

of the challenges and opportunit

ies the Group faces across

its subsid

iary markets. Items d

iscussed across the two days

included:

•

Group strategy, ﬁnancial performance and governance

structure

•

The transformation taking place in the UAE from a

policy perspective

•

Regional CEOs strategy session

•

Build

ing res

ient bus

iness models and ecosystems for

the new economy

•

Strategic oversight of sustainab

ity

•

Talent opportunity and changing workforce

expectations

•

Overview of the Dubai International Financ

ial Centre

(DIFC) Fintech hive.

Engagement and linkages with the Group’s subsid

iar

ies

The Board and its committees recognise the importance of creating, mainta

ing and build

ing upon appropr

iate linkages

with the Group’s subsid

iar

ies. Sim

ilar to 2021, the Board’s ab

ity to phys

ically meet with people from across the Group’s

footprint remained lim

ited. Desp

ite this, the Group Chairman and INEDs engaged with the Group’s subsid

iar

ies through a

number of forums. This included video-enabled chair and committee chair engagement sessions, as well as other forms

of interact

ion.

162

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Engagement with employees

The Board places great importance on workforce

engagement and values its interact

ions at all levels of the

Group. Two-way dialogue through a variety of forums

helps build the Board’s understanding of key issues and

developments around its markets, as well as provid

ing an

ins

ight

into the hands-on experiences of colleagues.

The role of the Board is dist

inct from management, and

the directors are aware of the importance of overseeing,

supporting and, where necessary, challenging management

in implement

ing

its people strategy. In light of this, the Board

tasked the Culture and Sustainab

ity Committee to oversee

a review of the exist

ing framework w

ith management,

consider

ing certa

in adjustments aimed to enhance the

Board workforce engagement.

The Board continued to adopt an alternative approach

to the workforce engagement methods set out in the UK

Corporate Governance Code. The primary reason for taking

a different approach was that, as a global organisat

ion w

ith

more than 83,000 employees across 59 diverse markets, it is

vital that any Board engagement should gather unﬁltered

feedback which is representative of the whole workforce in

order to be truly effective.

Given the easing of travel restrict

ions the Board was able

to meet colleagues across parts of our footprint, both

collectively and ind

idually. The diagram below illustrates

which markets were vis

ited. Dur

ing the year, directors

appreciated being able to meet face-to-face with a

number of employees, whether through formal meetings

or informal discuss

ions. The opportun

ity to resume meeting

the workforce in person is something directors found highly

beneﬁcial and w

ill continue to form part of the approach

for 2023.

Through our comprehensive employee listen

ing

programme, the Board has an opportunity to understand

diverse employee perspectives. This is comprised of

an annual engagement survey, a continuous listen

ing

programme, lifecycle surveys and diagnost

ic research on

specif

ic areas of focus, such as ﬂex

ible working, wellbeing

and performance management. The Board can also access

data on employee issues through our Speak Up channel.

Further detail regarding employee engagement this year can

be found with

in the Culture and Susta

inab

ity Committee

report starting on

page 176

Director travel: an opportunity to engage with the workforce and other stakeholders

Europe and the Americas

1. France

2. Germany

3. UK

4. US

Africa and Middle East

5. Kenya

6. Qatar

7. Saudi Arabia

8. UAE

Asia

9. Bangladesh

10. Hong Kong

11. India

12. Indonesia

13. Korea

14. Malaysia

15. Singapore

16. Vietnam

Directors, either together

or ind

idually, vis

ited a range of

markets.

Dubai, UAE

On 10 November, the Board hosted an

informal lunch with the UAE talent. They

inv

ited a number of top talents who came

from various business segments, support

functions and backgrounds, representing

the divers

ity of the UAE franch

ise. José

Viñals and Maria Ramos also hosted a

townhall for all employees, alongside

members of the Management Team.

Singapore

The Board travelled to Singapore in

March 2022. Although pandemic-related

restrict

ions on soc

ial gatherings remained

in place, which lim

ited the amount of

engagement permitted, the Board took

advantage of meeting with a wide

range of stakeholders where possible,

includ

ing

informal discuss

ions w

ith

senior leaders and other colleagues.

163

Standard Chartered

– Annual Report 2022

Directors’ report

Who else attended 2022 Committee meetings?

The Group Chairman; Group Chief Executive; Group Chief

Financ

ial Ofﬁcer; Group Ch

ief Risk Ofﬁcer; Group General

Counsel; Group Head, Internal Audit; Group Head of Conduct,

Financ

ial Cr

ime & Compliance; Group Head, Central Finance;

representatives from Group Finance; Group Statutory Auditor;

and Group Company Secretary. Sir Iain Lobban and Paul Khoo,

independent advisers to the Board, attend discuss

ions on

Financ

ial Cr

ime Compliance (FCC)-related matters. As part of his

induct

ion plan

in 2022, Shir

ish Apte attended one Comm

ittee

meeting as an observer prior to jo

ing.

As part of, and in addit

ion to most scheduled Comm

ittee

meetings, the Committee held private members-only meetings.

The Committee also met with the Group’s Statutory Auditor, Ernst

& Young LLP (EY) and the Group Head, Internal Audit, without

management being present. The Committee members have

detailed and relevant experience and bring an independent

mindset to their role.

The Board is satisf

ied that Ph

il Rivett has recent and relevant

ﬁnancial exper

ience. Phil is a chartered accountant with over

forty years’ experience of professional accountancy and audit

focused on banks and insurance companies. He led the audits of

a number of leading banks during his career as senior audit

partner of PricewaterhouseCoopers (PwC). He is also Chair of the

Audit Committee for Nationw

ide Bu

ild

ing Soc

iety.

Biograph

ical deta

ils of the committee members can be

viewed on

pages 138 to 142

What are the main responsib

ies of the Comm

ittee?

The Committee is responsible for oversight and advice to

the Board on matters relating to ﬁnanc

ial report

ing. The

Committee’s role is to review, on behalf of the Board, the Group’s

internal controls, includ

ing

internal ﬁnanc

ial controls. The

Committee has exercised oversight of the work undertaken by

Conduct, Financ

ial Cr

ime & Compliance (CFCC), Group Internal

Audit (GIA) and EY. The Committee Chair reports to the Board on

the Committee’s key areas of focus following each meeting.

The Committee has written Terms of Reference that can be

viewed at

sc.com/termsofreference

I am pleased to present the Audit Committee report for the year

ended 31 December 2022. The report sets out the areas of sign

iﬁcant

focus for the Committee and its activ

ies over the course of the year.

I have enjoyed working with Committee members, management,

EY, regulators and colleagues, in what has been a strong year of

performance for the Group.

There have been some changes to the Committee’s composit

ion

2022. We welcomed Shir

ish Apte and Jack

ie Hunt as Committee

members in May and October respectively. Dr Byron Grote stepped

down as a Committee member in November, and I would like to

convey the Committee’s gratitude to Byron for his sign

iﬁcant

contribut

ions over the years. Paul Day, Group Head, Internal Aud

it,

joined the Comm

ittee as a permanent inv

itee, replac

ing the previous

incumbent.

As you would expect, the challenging external environment and

linger

ing

impacts of COVID-19 have been sign

iﬁcant focus areas for

the Committee this year. The Committee has carefully scrutin

ised and

challenged credit impa

irment prov

ions,

includ

ing the cont

inued

appropriateness or release of COVID-19-related overlays, key

accounting issues and sign

iﬁcant account

ing estimates and

judgements made by management, to ensure that they are sufﬁcient,

appropriate and clearly communicated in the Group’s public

disclosures. The Group’s investment in China Bohai Bank (Bohai) has

continued to be an area warranting ongoing attention, includ

ing the

assumptions and judgements made around the Group’s sign

iﬁcant

inﬂuence over Bohai; and further impa

irment of the

investment to

reﬂect the challenges and uncertainty in the outlook for the banking

industry and property markets in China. China Commercial Real

Estate (CRE) has been reviewed, discussed and challenged

throughout the year, in light of the Chinese economy and the

continued impacts of COVID-19. Sovereign downgrades have also

been reviewed and discussed, includ

ing Sr

i Lanka, Pakistan and

Ghana. Given the complex external landscape, this level of scrutiny

will continue in 2023.

The Committee has continued to place oversight on the Group’s

Conduct Programme and the Group’s Speak Up Programme. We

observed regulatory developments in the use of private

communicat

ion channels and the act

ions under way by management

to protect the Group against the associated risks. The Committee

invested time and attention in scrutin

ing Standard Chartered Bank’s

implementat

ion plans for F

inanc

ial Conduct Author

ity (FCA)

Consumer Duty, which comes into effect on 31 July 2023. In 2022, I was

appointed as the FCA Consumer Duty Board Champion. As part of

this role, I meet regularly with the Accountable Executive and receive

monthly updates on the progress of the implementat

ion plans,

whereby I then update the Group Chairman and Group Chief

Executive, as required.

Given the retirement of the Board Financ

ial Cr

ime Risk Committee on

1 April 2022, the Group Money Laundering Reporting Ofﬁcer’s annual

report was transferred to the Audit Committee for review and

discuss

ion, wh

ich took place in December 2022. We had the beneﬁt of

Sir Iain Lobban and Paul Khoo, our Board independent advisers, jo

this discuss

ion to prov

ide independent and special

ist perspect

ive. In

conjunction w

ith the Board Risk Committee, we continue to ensure

that FC Risk is sufﬁc

iently covered

in Board committee discuss

ions.

The Committee continues to receive regular updates from

management and EY on the steps being taken by the Group to

improve Information Technology (IT) access controls and remediate

weaknesses ident

iﬁed

in prior year statutory audits. The Committee

has kept a close watch on the work under way to improve controls

and protect the Group’s security systems.

The Committee has exercised its authority delegated by the Board for

ensuring the integr

ity of the Group’s publ

ished ﬁnanc

ial

informat

ion

by discuss

ing and challeng

ing the judgements and disclosures made

by management, and the assumptions and estimates on which they

are based. The Committee has exercised judgement in decid

ing

which of the issues it considered to be sign

iﬁcant

in the ﬁnanc

ial

statements, includ

ing Cl

imate, and this report sets out the material

matters that it has considered in these deliberat

ions.

As a result of the Committee’s work in 2022, assurance has been

provided to the Board on the quality and appropriateness of the

Group’s ﬁnancial report

ing, and on internal audit, compliance and

regulatory matters, to continue to safeguard the interests of the

Group’s broader stakeholders. The following pages provide ins

ight

and context into the Committee’s work and activ

ies during the year.

Phil Rivett

Chair of the Audit Committee

Audit Committee

“As you would expect,

the challenging external

environment and linger

ing

impacts of COVID-19

have been sign

iﬁcant

focus areas for the

Committee this year.”

Committee composit

ion

Phil Rivett (Chair)

Jackie Hunt

David Conner

Shir

ish Apte

Christ

ine Hodgson, CBE

Maria Ramos

Carlson Tong

Scheduled meetings

Byron stepped down from the Committee on 30 November 2022

Shir

ish joined the Comm

ittee on 4 May 2022

Jackie jo

ined the Comm

ittee on 1 October 2022

Byron Grote

164

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Activ

ies during the year

Financ

ial

reporting

•

Satisf

ied

itself that the Group’s accounting polic

ies and pract

ices are appropriate.

•

Reviewed the clarity and completeness of the disclosures made with

in the publ

ished ﬁnanc

ial

statements, in particular, that they are fair, balanced and understandable.

•

Monitored the integr

ity of the Group’s publ

ished ﬁnanc

ial statements and formal announcements

relating to the Group’s ﬁnanc

ial performance, rev

iew

ing the s

ign

iﬁcant ﬁnancial judgements, est

imates

and accounting issues.

•

Considered any changes in disclosures aris

ing from best pract

ice in applying the UK Finance Code for

Financ

ial Report

ing Disclosure, recommendations from the Taskforce on Disclosures on Expected Credit

Losses (ECL), high-quality practices with regard to implementat

ion of ECL suggested by the Prudent

ial

Regulation Authority (PRA) and Financ

ial Report

ing Council (FRC) publicat

ions on aspects of UK

reporting and disclosure requirements from the Financ

ial Stab

ity Board’s Task Force on Cl

imate-Related

Financ

ial D

isclosures (TCFD).

Sign

iﬁcant account

ing judgements considered during 2022 are shown below.

The Committee can conﬁrm that the key judgements and sign

iﬁcant

issues reported are consistent with the

disclosures of key estimat

ion uncerta

int

ies and cr

ical judgements as set out

in Note 1 starting on page 348.

Key area

Action taken

Impairment of

loans and

advances

Reviewed and challenged, on a quarterly basis, reports detail

ing the

composit

ion and cred

it quality of the loan book, concentrations of risk and

provis

ion

ing levels.

Reviewed, considered and challenged judgemental Post Model Adjustments

(PMAs) and management overlays in both the wholesale and retail portfolios

on a quarterly basis that were required to estimate ECL. Careful considerat

ion,

review and challenge were placed on the China CRE overlay. In the case of

PMAs, some models’ performance breached monitor

ing standards or val

idat

ion

standards necessitat

ing adjustments. In the case of management overlays

mainly to deal with the impact of COVID-19, the COVID-19 overlay for Corporate,

Commercial and Institut

ional Bank

ing (CCIB) has been fully released and for

Consumer, Private and Business Banking (CPBB) has been sign

iﬁcantly reduced,

as the outlook has improved during 2022.

As well as the expectation of elevated losses in industr

ies and locat

ions, paid

particular attention to the China CRE sector and certain sovereigns, includ

ing

Sri Lanka, Pakistan and Ghana, which have deteriorated during 2022. In respect

of high-risk credit grade exposures, the Committee was also briefed on

business plans, includ

ing remed

ial actions and management assessment

of the recoveries and collateral available. The Committee challenged the

completeness of these overlays and reviewed and considered when such

management overlays would be released.

Reviewed the appropriateness of management’s economic forecasts and the

adjustments to provis

ions to

incorporate the effect of multiple economic

scenarios.

The Committee was briefed on the redevelopment of the Group’s Monte Carlo

model in Q4 2022 to incorporate a wider range of scenario outcomes than the

previous model with the effect of increas

ing non-l

inear

ity

in the model output.

The Committee reviewed and challenged the judgement to release the

previously held PMA for the CCIB portfolios and retain the PMA for CPBB as a

result of the output of these model changes.

The Committee reviewed the Group’s high-level quantitat

ive assessment of the

impact of Climate Risk on the Group’s ECL and considered the material

ity of the

impact and the judgement to disclose a potential range of impact rather than

adjust the ECL given the lim

ited

impact.

The Committee was briefed on the performance of the International Financ

ial

Reporting Standard (IFRS) 9 models and the remediat

ion plans

in place to

address material non-performance issues, where these had been ident

iﬁed.

The Committee considered the appropriateness of the staging of higher-risk

loans.

Goodwill

impa

irment

Reviewed management’s annual assessment of goodwill impa

irment, cover

ing

key assumptions (includ

ing forecasts, d

iscount rate and sign

iﬁcant changes from

the previous year), headroom availab

ity and sensit

ies to poss

ible changes in

key assumptions and related disclosures.

165

Standard Chartered

– Annual Report 2022

Directors’ report

Carrying value

of investments

in associates

Reviewed and challenged management’s carrying value assessments on the

Group’s investment in Bohai, consider

ing carefully key assumpt

ions and their

potential sensit

ity to changes. Given Bohai is a public company, with lim

ited

forecasted proﬁt informat

ion, the Group

is required to prepare its own forecasts,

making prudent estimates of future proﬁtab

ity. The Committee considered the

basis of the preparation of the Value-in-Use (VIU) assessment, and the

challenges and uncertainty in the outlook for the banking industry and property

markets in China that may impact credit losses in the VIU assessment and

reviewed the related disclosures for Bohai.

The Committee also reviewed and challenged management’s assessment that

the Group mainta

ined s

ign

iﬁcant

inﬂuence and satisf

ied

itself that it remained

appropriate to continue to equity account for the investment.

Recoverabil

ity of

parent company’s

investment in

subsid

iar

ies

Discussed and received conﬁrmat

ion from management that

it had adequately

assessed the recoverabil

ity of

investments in subsid

iar

ies, together with any

intercompany indebtedness.

IT – user access

management

Received an update from management and EY on new and pre-exist

ing IT

observations ident

iﬁed by EY and GIA, relat

ing to user access management,

includ

ing pr

ileged access, user access rev

iews and other user access controls.

The Committee sought and received assurance this matter is receiv

ing sen

ior

management attention, and also discussed EY’s audit response.

Valuation of

ﬁnancial

instruments held

at fair value

Received reports and updates at each reporting period detail

ing the key

processes undertaken to produce and validate valuations of ﬁnanc

ial

instruments, includ

ing any changes

in methodology from prior years and

sign

iﬁcant valuat

ion judgements. The Committee received regular updates on

the level of unsold posit

ions

in the syndicat

ions portfol

io and the valuation of

these posit

ions and plans for sell down. The Comm

ittee also reviewed credit

valuation adjustments, debit valuation adjustments, funding valuation

adjustments and own credit adjustments and considered the explanation and

rationale for any sign

iﬁcant movements.

Other areas of focus:

Impairment of

aircraft

Reviewed and challenged, on a quarterly basis, management’s assessments of

impa

irment losses on a

ircraft operating lease assets, includ

ing the assumpt

ions

used to determine asset VIU and market valuations.

The Committee reviewed detailed sensit

ity analysis on the factors that would

impact the VIU assessments includ

ing res

idual values, remarketing periods after

lease terminat

ions, reduct

ions in market rental rates and discount rates while

assessing the impa

irment calculat

ions for the aircraft.

Classif

icat

ion of

assets as held

for sale

Reviewed management’s assessment of whether certain assets or disposal

groups should be reclassif

ied as held for sale. Th

is included review

ing the facts

and circumstances for the proposed sale of the business exits in the AME region,

the proposed sale of the aircraft leasing business, shipp

ing assets and rema

ing

Princ

ipal F

inance investments.

Restructuring

costs

Reviewed and considered, on a quarterly basis, income statement charges and

credits classif

ied as restructur

ing.

Taxation

Reviewed and considered management’s judgements and assumptions with

respect to tax exposure risks, includ

ing uncerta

in tax posit

ions, and ensured

adequate disclosure in the ﬁnanc

ial statements has been made. Th

is included

understanding the Group’s effective tax rate, the quantum and basis of

recognit

ion of deferred tax assets, and the UK bank levy charge for the year.

Provis

ions for

legal and

regulatory

matters

Considered advice presented on the current status of sign

iﬁcant legal and

regulatory matters, and considered management’s judgements on the level of

provis

ions and the adequacy of d

isclosure, as set out in Note 26 on page 420.

Activ

ies during the year

continued

166

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Going concern

assessment and

viab

ity statement

•

Reviewed management’s process, assessment and conclusions with respect to the Group’s going concern

assessment and viab

ity statement, includ

ing the forward-look

ing Corporate Plan cashﬂows, the results

of stress tests that explore the resil

ience of the Group to shocks to

its balance sheet and business model,

princ

ipal and emerg

ing risks, liqu

ity and capital posit

ions and key assumpt

ions. The Committee also

ensured that the going concern assessment and viab

ity statement is consistent with the Group’s

Strategic report and other risk disclosures.

Further details can be found on

pages 350, 219 and 231

Fair, balanced and

understandable

•

The Committee considered, satisf

ied

itself and recommended to the Board, that the processes and

procedures in place ensure that the Annual Report, taken as a whole, is fair, balanced and

understandable, and provides the informat

ion necessary for shareholders to assess the Group’s pos

ion

and performance, business model and strategy, and the business risks it faces. The statement is

underpinned by the Committee’s, and the Board’s, belief that all important elements have been

disclosed; and that the descript

ions of the Group’s bus

iness as set out in the Strategic report are

consistent with those used for ﬁnanc

ial report

ing in the Group’s ﬁnanc

ial statements.

Examples of

deeper discuss

ions

into specif

ic top

ics

•

EY regional partner overviews:

Received country/regional overviews from EY’s local regional partners

from China, Hong Kong, Korea and Taiwan. These overviews provided ins

ight

into the challenges faced in

the Group’s markets from a statutory audit perspective; and provided the Committee with the local audit

partner’s views on internal controls, as well as perspectives on how the Group compares against local

peers. The overviews also provided ins

ight

into local regulatory developments, engagement with local

regulators and areas of focus for 2022. This year, a technical discuss

ion on IFRS 9 ECL – Cred

it Update was

also held, with EY’s Special

ist Partners prov

ing perspect

ive and peer comparison. These EY regional

partner overviews and technical topics will continue in 2023 and beyond.

•

UK audit and corporate governance reforms implementat

ion approach:

Received and discussed

papers setting out the key components of the proposed UK audit and corporate governance reforms,

the work completed by the Group and the work to be undertaken to strengthen the control environment

with

in F

inance in advance of the ﬁnal rules being published. Discuss

ion focused on the

importance of

end-to-end controls gap analysis, includ

ing clear hand-offs and hand-

ins and the changes that will

need to be managed as a result of a strengthened control environment. The proposed approach for an

Audit and Assurance Policy was also discussed, with the Committee provid

ing feedback on th

is.

•

Financ

ial regulatory report

ing:

Received and discussed updates on the Group’s Financ

ial Regulatory

Reporting Remediat

ion Programme. D

iscuss

ion focused on the challenges

involved with resourcing, given

the special

ist sk

ills required and ﬁnanc

ial/l

iqu

ity reporting in the Group’s network.

•

Aspire programme:

Discussed an update on the Group’s Aspire programme (a programme launched

in 2018 to deliver a modern technology systems and data landscape for ﬁnanc

ial management and

reporting). Discuss

ion focused on resources, t

imel

ines and the

impacts of migrat

ion to the cloud.

•

Internal ﬁnancial controls:

Received and discussed a paper setting out the approach taken to safeguard

the production of the Group’s ﬁnanc

ial books and records.

•

IFRS 9 models:

Received and discussed updates on the Group’s use of IFRS 9 ECL models.

•

Finance resourcing:

Reviewed and discussed a paper provid

ing assurance that the Account

ing and

Financ

ial Report

ing function is adequately and appropriately resourced; the qualif

icat

ions, experience

and train

ing of colleagues

is appropriate; and the budget allocated is sufﬁc

ient to ma

inta

in external

reporting obligat

ions,

includ

ing cl

imate disclosures.

•

Tax update:

Received and discussed a paper setting out an update on internat

ional tax reform and a

review of tax exposures and deferred tax assets. EY’s Tax Partner was inv

ited to join th

is discuss

ion to

add perspective.

•

Information technology access controls:

Received and discussed reports on the work under way to

improve the Group’s IT access controls in light of weaknesses ident

iﬁed dur

ing prior years’ audits. The

Committee discussed how management is working to remediate the observations raised by EY and

sought assurance that this matter is receiv

ing sen

ior management attention. We had the beneﬁt of EY’s

Technology Risk Partner jo

in these d

iscuss

ions, to prov

ide independent perspective and peer comparison.

This will continue to be an area of focus for 2023.

•

Data management:

Received and discussed papers on the Group’s Data Management Framework,

following on from discuss

ions held

in 2021. The H1 2022 discuss

ion focused on the report

ing on of

timel

ines, w

ith feedback provided as to how this would be more useful for the Committee to track

progress. The H2 2022 discuss

ion focused on what had gone well and less well throughout the year, and

challenges involved with cross-border data transfer in the Group’s footprint and managing competing

national requirements. Further feedback was provided on the reporting of timel

ines wh

ich will return to

the Committee in 2023.

•

Conduct:

Received and discussed an annual report on the Group Conduct Programme.

•

Use of Private Communicat

ion Channels:

Several discuss

ions were held on the r

isks faced by the Group

from inappropr

iate use of pr

ivate communicat

ion channels such as WhatsApp and WeChat, the act

ions

being taken, the reliance on colleagues’ personal judgement and the increased regulatory scrutiny on

this. Data sovereignty changes, for example, in China, were discussed. The Committee counselled on the

need to undertake a prior

ised approach, to ensure that train

ing and Group-w

ide communicat

ions are

clear and the importance of managing the expectations of clients.

•

FCA Consumer Duty:

Reviewed, discussed and scrutin

ised Standard Chartered Bank’s

implementat

ion

plans. Particular focus was placed on vulnerable customers and how this legislat

ion m

ight impact the

Group’s wider footprint. Phil Rivett was appointed as the FCA Consumer Duty Board Champion.

•

Major disputes, sign

iﬁcant regulatory and government

invest

igat

ions:

Received and discussed two

updates on major disputes and sign

iﬁcant regulatory government

invest

igat

ions facing the Group.

Activ

ies during the year

continued

167

Standard Chartered

– Annual Report 2022

Directors’ report

Group Statutory

Auditor, EY

Provided oversight of the work undertaken by EY as the Group’s Statutory Auditor. In particular, the

Committee:

•

reviewed and discussed the risks ident

iﬁed by EY’s aud

it planning, seeking and receiv

ing assurance that

these risks have been addressed properly in the audit strategy

•

satisf

ied

itself that EY has allocated sufﬁc

ient and su

itably experienced resources to address these risks

and reviewed the ﬁnd

ings from the aud

it work undertaken

•

sought and received assurance that no undue pressure has been asserted on the level of audit fees, to

ensure that there is no risk to audit work being conducted effectively and independently

•

conducted an annual performance and effectiveness review of EY. Input was received from Committee

members, chairs of subsid

iary aud

it committees, the Group Management Team, regional/country chief

ﬁnancial ofﬁcers, members of the Group F

inance Leadership Team and the GIA senior leadership. The

results of this input were discussed by the Committee. Overall, it was felt that EY is considered to be

effective, object

ive and

independent in its role as the Group’s Statutory Auditor. The Committee agreed

to propose to the Board that the re-appointment of EY as the Group’s Statutory Auditor for a further year

be recommended to shareholders at the 2023 Annual General Meeting (AGM). This recommendation

was made without any inﬂuence from a third party and free from any contractual obligat

ion to do so,

includ

ing for the avo

idance of doubt, any contractual term described in Article 16(6) of the Audit

Regulation

•

reviewed and discussed EY’s audit planning report and any updates, audit results reports and inter

review reports

•

received and discussed a paper setting out EY’s control themes and observations from the 31 December

2022 year-end audit, as well as an update on these matters later in the year

•

reviewed and discussed EY’s 2022 approach to the private Written Auditor Report to the PRA for the year

ended 31 December 2022.

The Committee met privately with EY at the end of certain Committee meetings, without management

being present.

Phil Rivett met regularly with the EY partners leading the Group’s audit during the course of the year.

The Company complies with the Statutory Audit services for Large Companies Market Investigat

ion

(Mandatory Use of Competit

ive Tender Process and Aud

it Committee responsib

ies) Order 2014. EY has

been the Group’s Statutory Auditor for three years. In accordance with the Audit Practices Board’s

requirements, the lead audit engagement partner has held the role for three years. The lead engagement

partner, David Canning-Jones, has a background of audit

ing banks and understands the markets

in which

the Group operates.

Following the 2017 audit tender, EY was appointed as the Group’s Statutory Auditor for the ﬁnanc

ial year

ended 31 December 2020. EY has been re-appointed as the Group’s Statutory Auditor for the ﬁnanc

ial year

ended 31 December 2022 at the 2022 AGM.

Non-audit services

•

Responsible for setting, review

ing and mon

itor

ing the appropr

iateness of the provis

ion of non-aud

services, applying the Group’s policy on the award of non-audit services to EY, while taking into account

the relevant ethical guidance.

•

In 2022, the Group spent $4.7 mill

ion on non-aud

it services provided by EY and $5.5 mill

ion on aud

it-

related services such as quarterly and half year reviews and regulatory reporting.

Further details on non-audit services provided by EY can be found in Note 38 on

page 448

and the Group’s approach to

non-audit services on

page 229

Internal

controls

•

Discussed reports from GIA that provide GIA’s view on the system of internal controls across all risk types,

business and country functions, includ

ing summary h

ighl

ights of the most s

ign

iﬁcant matters

ident

iﬁed

by GIA and areas of thematic interest that have arisen as part of the audits and warrant the Committee’s

attention. On a period

ic bas

is, GIA reports on any overdue remediat

ion of ﬁndings. The Board R

isk

Committee and the Culture and Sustainab

ity Committee discussed separate reports from the Group

Head, Internal Audit on GIA’s appraisal of controls across key risks, subject to each Committee’s oversight.

Further details on internal controls can be found on

pages 222 and 223

Activ

ies during the year

continued

168

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Group Internal

Audit

Provides independent assurance on the effectiveness of controls that support ﬁrst line’s risk management of

business activ

ies, and the processes mainta

ined by the second l

ine. GIA adopts a risk-based audit

approach that focuses on the key risks that impact its clients, businesses and regulators. This supports the

long-term objectives of the Group and

its stakeholders and increases GIA’s productiv

ity by creat

ing an

integrated and collaborative Audit Plan that is aligned to both the Group’s strategic object

ives and

ind

idual country requirements (includ

ing regulatory obl

igat

ions), and that

is effective and efﬁc

ient

deliver

ing an op

ion on the Group’s key r

isks and controls. Changes to the Audit Plan were approved by the

Audit Committee on a quarterly basis.

In 2022, for the most sign

iﬁcant matters

ident

iﬁed by GIA, management was

inv

ited to attend Comm

ittee

meetings to provide updates on the steps being taken to enhance the control environment and address

internal audit ﬁnd

ings.

The Committee:

•

assessed the role and effectiveness of the GIA function, and reviewed and monitored GIA’s progress

against the 2022 Audit Plan and the review and monitor

ing of post-aud

it themes, trends and sign

iﬁcant

issues. Sign

iﬁcant changes to the Aud

it Plan were also discussed by the Committee

•

reviewed and approved GIA’s 2023 Audit Plan, resourcing and budget, and is satisf

ied that these are

appropriate

•

reviewed and approved the refreshed GIA Charter

•

received and discussed reports from the Global Head, Audit Quality Assurance (QA) on the QA function’s

view of the control environment in GIA

•

scrutin

ised any long overdue GIA

issues and requested management to develop risk reduction plans for

items with long closure periods to be monitored by GIA

•

reviewed and approved GIA’s functional strategy, includ

ing GIA’s m

iss

ion, v

ion and pr

ior

ies.

The Committee is satisf

ied w

ith the independence and object

ity of the GIA function.

Over the course of the year, Phil Rivett met regularly with the Group Head, Internal Audit and the GIA

Management Team. The Group Head of Internal Audit also met privately with the Committee.

Conduct, Financ

ial

Crime &

Compliance

Regular compliance reporting to the Committee sets out the work carried out by the CFCC function,

sign

iﬁcant compl

iance and regulatory risks and issues facing the Group, and key actions being taken to

address and mit

igate these matters.

In 2022, the Committee was updated on and discussed:

•

regulators’ supervisory focus areas, regulatory updates and forward-looking themes, the status of the

Group’s core college regulatory relationsh

ips and enforcement matters

•

topical compliance issues, for example, the Committee was updated on transaction reporting,

recognis

ing progress made to date and

issues faced by the Group

•

the importance of continu

ing to strengthen the Group’s r

isk culture

•

the function’s operating model, includ

ing an overv

iew of the CFCC budget and organisat

ional changes to

simpl

ify the funct

ion.

The Committee reviewed a paper on compliance resourcing and conﬁrmat

ion was rece

ived from

management that the function is adequately resourced and that a close watch was being kept on this,

given the buoyant external hir

ing market

in some of the Group’s territor

ies.

The Committee also reviewed the 2023 Compliance strategy, budget and prior

ies.

Phil Rivett met regularly throughout the year with the Group Head, CFCC.

Speaking Up

Speaking Up is the Group’s conﬁdent

ial and anonymous wh

istleblow

ing programme (the Programme).

The Programme has been designed to comply with the Group’s UK lead regulators, the PRA and the FCA

Whistleblow

ing Rules. Our wh

istleblow

ing channels are ava

ilable to anyone – colleagues, contractors,

suppliers and members of the public – to raise concerns conﬁdent

ially and anonymously.

The Committee reviewed and discussed an annual report on the operation and effectiveness of the

Programme which was subsequently tabled to the Board. The report provided the Committee with

assurance of the Group’s ongoing compliance with the Whistleblow

ing Rules. Focus was placed on the level

of colleague conﬁdence in the Programme, key areas of enhancement and the focus areas for 2023.

In 2022, the Committee Chair received updates on Speak Up issues and inc

idents as necessary.

Further details on Speaking Up can be found on

page 120

Activ

ies during the year

continued

169

Standard Chartered

– Annual Report 2022

Directors’ report

Interaction

with regulators

Phil Rivett attended a trilateral meeting with EY and the PRA and also met with the PRA in his capacity as

Audit Committee Chair.

Linkages with

subsid

iary aud

committees

There are strong linkages and interact

ions

in place between the Committee, regional hub audit committees

and banking subsid

iary aud

it committees. In 2022, Phil Rivett attended a Standard Chartered Bank (Hong

Kong) Lim

ited (SCB Hong Kong) aud

it committee meeting. The audit committee chair of SCB Singapore

attended one Standard Chartered PLC Audit Committee meeting. This practice will continue in 2023 to

reinforce these important linkages.

Phil Rivett hosted an annual video-conference with the chairs of subsid

iary aud

it committees and INEDs in

March 2022.

Details of the call can be found on

page 161

Committee effectiveness review

During 2022, an external Board and Board Committee effectiveness review was facil

itated by Independent Board Evaluat

ion.

Key observations from the 2022 external

effectiveness review

The feedback on the Committee’s function

ing and

effectiveness was posit

ive and

it specif

ically h

ighl

ighted:

•

In terms of composit

ion,

it was felt that there is a good

level of ﬁnancial and account

ing knowledge among

Committee members

•

The contribut

ions from EY and F

inance were well rated

•

Non-Committee members feel well informed of the key

issues and areas of discuss

ion.

2023 Action Plan

The 2023 Action Plan for the Committee reﬂects

suggestions from the evaluation and continues to

build on the solid progress made last year:

•

Consider spending more time on internal controls

and on the interface with the Board Risk Committee

•

Consider how some long-standing high-risk

control issues could be remediated more quickly

by management to reduce the level of risk.

Activ

ies during the year

continued

170

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

I am pleased to present the Board Risk Committee’s report for the year

ended 31 December 2022. The Committee has been immersed in a

broad range of ﬁnancial and non-ﬁnancial r

isk management issues

pertinent to the Group, set against the backdrop of a volatile,

challenging and complex operating environment. Cognisant of this

evolving external landscape, the Committee has paid attention to key

macroeconomic issues, geopolit

ical and emerg

ing risks, as well as key

evolving regulatory themes. The current and future impl

icat

ions for the

Group have been discussed and challenged, includ

ing the act

ions

being taken and planned by management to mit

igate these r

isks. The

Committee has carefully considered the challenges posed by inﬂat

ion,

commodity prices, interest rates, FX and the linger

ing effects of

COVID-19, includ

ing lockdowns

in China and Hong Kong. The impacts

of this on sovereign risk and credit risk, in particular, China CRE, have

been reviewed and challenged regularly, to ensure that all associated

risks are being adequately managed. We have also continued to seek

assurances that sufﬁcient resources are

in place to manage these

complex risks.

There have been a number of changes to the composit

ion of the

Committee in 2022. Naguib Kheraj stepped down as Chair on 30 April,

upon which Phil Rivett was appointed Interim Chair. Following receipt of

the necessary regulatory approvals, I became Chair on 1 August. Shir

ish

Apte and Robin Lawther jo

ined the Comm

ittee on 4 May and 1 July

respectively. I would like to convey the Committee’s gratitude to Naguib

for his immense contribut

ion and leadersh

ip as both a member and

Chair. Mark Smith, our GCRO, retired from the Group at the end of the

year, and I would like to express our thanks to Mark for his dedicat

ion

and valuable contribut

ions to the Comm

ittee’s deliberat

ions and to the

Group more broadly, over the last seven years. Mark’s replacement,

Sadia Ricke jo

ined the Group on 1 February, (currently awa

ing

regulatory approval), after successfully completing a rigorous selection

process. She brings a broad range of ﬁnanc

ial and r

isk experience, as

well as a good understanding of our footprint markets. I also want to

thank our regulators, for their constructive approach, advice and

sharing of best practice, which assists to make the Group more resil

ient.

Resolvabil

ity has been a key area of focus. At the beg

inn

ing of the year,

we held a dedicated meeting to focus on the Group’s Resolution

self-assessment report, ahead of approval by the Board and submiss

ion

to the PRA and Bank of England (BoE). Furthermore, regular discuss

ions

on Resolvabil

ity have taken place throughout the year. The Comm

ittee

and Board remained focused on Resolvabil

ity and enhancements have

been made to our Resolution capabil

ies, in terms of addressing

shortcomings and developing our areas of enhancement. We have also

paid close attention as to how the expectations of the UK regulators

are being met. Board and Committee engagements have taken place

via formal discuss

ions and tra

ing sess

ions, includ

ing a s

imulat

ion

exercise, which was useful to understand the various impl

icat

ions for

the Group and a number of its key subsid

iar

ies. Resolvabil

ity w

ill remain

a key agenda item throughout 2023.

ICS Risk management is presented to the Committee by management

four times a year. While sign

iﬁcant progress has been made, we

acknowledge that there is still more work to be done to reach our

desired sustainable control environment and defensive posit

ion. We

have had the beneﬁt of Sir Iain Lobban, our Board independent adviser,

attend all ICS discuss

ions to prov

ide independent and special

ist

perspective. The Committee reviewed the Group’s ICS Strategy ahead

of approval by the Board; and we also reviewed the ﬁnd

ings of the

CBEST Threat Intelligence-Led exercise. Given the evolution of ICS Risk,

this will remain an area of focus for 2023.

With the retirement of the Board Financ

ial Cr

ime Risk Committee

on 1 April 2022, we have placed focus on FC Risk to ensure that this

continues to receive sufﬁc

ient overs

ight and scrutiny. The Committee

received reports from CCIB and CPBB on their strategy, top risks and

how these are being mit

igated and managed w

ith focused discuss

ion

on FC risk.

We have placed increased attention on stress testing and tail risks,

for example running scenarios on stagﬂation, sovereign default and

commodity prices as well as our key regulatory stresses, such as during

the 2022 BoE Stress Test results. We have reviewed and discussed

geopolit

ical r

isks, includ

ing Ch

ina and Russia. We are mindful of the

need to continue to probe into the dark corners, and as the economy

shows signs of recovery, to mainta

in the Group’s cred

it disc

ipl

ine. As a

result, we have had a renewed focus on implement

ing an appropr

iate

Risk Appetite framework. The following pages provide ins

ight and

context into the Committee’s work and activ

ies during the year.

Maria Ramos

Chair of the Board Risk Committee

Who else attended Committee meetings in 2022?

The Group Chairman; Group Chief Executive; Group Chief

Financ

ial Ofﬁcer; Group Ch

ief Risk Ofﬁcer (GCRO); Group

General Counsel; Group Treasurer; Group Head, Conduct,

Financ

ial Cr

ime & Compliance; Group Head, Internal Audit;

the Group’s Statutory Auditor and Group Company Secretary.

Sir Iain Lobban, independent adviser to the Board, regularly

attends discuss

ions on Informat

ion and Cyber Security (ICS) Risk,

technology and Financ

ial Cr

ime (FC) Risk-related matters. Paul

Khoo, an independent adviser to the Board, attends discuss

ions

on FC Risk-related matters. EY attended all Committee meetings

in 2022. As part of, and in addit

ion to scheduled Comm

ittee

meetings, the Committee held private members-only meetings.

The Committee’s membership comprises INEDs who have a deep

and broad experience of banking and the risk factors affecting

the Group, includ

ing geopol

ical, econom

ic, IT, FC and general

business risks.

Biograph

ical deta

ils of the Committee members can be

viewed on

pages 138 to 142

What are the main responsib

ies of the Comm

ittee?

The Committee is responsible for exercis

ing overs

ight, on

behalf of the Board, of the key risks of the Group. It reviews

the Group’s Risk Appetite Statement and Enterprise Risk

Management Framework (ERMF) and makes recommendations

to the Board. Its responsib

ies also

include review

ing

the appropriateness and effectiveness of the Group’s risk

management systems, consider

ing the

impl

icat

ions of material

regulatory change proposals, review

ing reports on pr

inc

ipal

risks, includ

ing Cl

imate Risk, to the Group’s business, and

ensuring effective due dil

igence on mater

ial acquis

ions and

disposals. The Committee Chair reports to the Board on the

Committee’s key areas of focus following each meeting.

The Committee has written Terms of Reference that can be

viewed at

sc.com/termsofreference

Board Risk Committee

“The Committee has

carefully considered the

challenges posed by

inﬂat

ion, commod

ity

prices, interest rates,

FX and the linger

ing

effects of COVID-19”

Naguib stepped down from the Committee on 30 April 2022

David was unable to attend one ad hoc meeting due to a prior

business commitment

Shir

ish joined the Comm

ittee on 4 May 2022

Robin jo

ined the Comm

ittee on 1 July 2022

Committee composit

ion

Maria Ramos (Chair)

David Conner

Phil Rivett

Scheduled meetings

Gay Huey Evans, CBE

David Tang

Shir

ish Apte

Carlson Tong

Robin Lawther, CBE

N/A

Ad hoc

Naguib Kheraj

171

Standard Chartered

– Annual Report 2022

Directors’ report

Activ

ies during the year

Risk Appetite

Reviewed and challenged the formulation of the Group’s Risk Appetite Statement, in order to assure that it

is effective in setting appropriate boundaries in respect of each Princ

ipal R

isk Type.

Considered and recommended the Group’s Risk Appetite to the Board for approval.

Annual review of Risk Appetite:

After review and recommendation by the Committee, the Board approved

a revised set of Risk Appetite metrics which provided a sharper focus on the strategic measures of risk and

streamlined the number of metrics reported to the Board. Some metrics were moved for oversight to the

Group Risk Committee, ensuring a comprehensive coverage of risk is mainta

ined.

Monitored actual exposures relative to Risk Appetite lim

its us

ing regular Board Risk Information reports.

Tracked a broad range of risk metrics that are reported to the Committee period

ically.

Attended a Risk Appetite teach-in session ahead of the annual review discuss

ion, wh

ich was helpful in

provid

ing ded

icated time and space to discuss the sufﬁc

iency of the Group’s R

isk Appetite, statements and

metrics in detail. This will be an annual pre-brief discuss

ion go

ing forward.

Further details of the Group’s Risk Appetite are set out on

page 297

Enterprise Risk

Management

Framework (ERMF)

The ERMF sets out the princ

iples and standards for r

isk management across the branches and subsid

iar

ies

of the Group. The Committee:

•

reviewed proposed material changes to the ERMF, aris

ing from the 2022 annual rev

iew, and

recommended these changes to the Board for approval

•

considered the approach and key outcomes of the 2022 annual effectiveness of the ERMF. Afﬁrmat

ion

was received from the Interim GCRO (in situ at the time of the review as the new GCRO awaited

regulatory approval) that the Group’s risk management and internal control framework is materially

effective and improvement areas were highl

ighted for management attent

ion.

Princ

ipal R

isk

Types

The Group’s Princ

ipal R

isk Types are reported on at each scheduled Committee meeting, through a Board

Risk Information report, which accompanies the GCRO’s report. In addit

ion, the Comm

ittee had deeper

discuss

ions on the top

ics set out below.

Princ

ipal r

isks are risks inherent in the Group’s strategy and business model. Princ

ipal R

isk Types are formally

deﬁned in the ERMF, which provides a structure for monitor

ing and controll

ing these risks through the

Board-approved Risk Appetite.

Further details on Princ

ipal R

isk Types are set out on

pages 298 and 301 to 319

Operational and Technology Risk

The Group deﬁnes Operational and Technology Risk as the potential for loss resulting from inadequate or

failed internal processes, technology events, human error, or from the impact of external events (includ

ing

legal risks).

The Committee:

•

discussed Technology Risk reduction and the in

iat

ives under way to manage and reduce Technology

Risk and obsolescence

•

discussed a status report on Operational and Technology Risk

•

discussed an update on the embedding of Risk and Control Self-Assessment for effective management

of key risks

•

discussed the Operational Risk issues in the transit

ion to becom

ing a dig

itally focused bank.

Model Risk

Model Risk is the potential loss that may occur as a consequence of decis

ions or the r

isk of mis-estimat

ion

that could be princ

ipally based on the output of models, due to errors

in the development, implementat

ion

or use of such models.

The Committee:

•

reviewed and discussed the key risks and issues relating to Model Risk management

•

provided review and challenge on the Group Model Risk Appetite

•

received updates on the Group Model Risk proﬁle, includ

ing a breakdown of act

ive models across model

famil

ies, assoc

iated model risk ratings and model validat

ion outcomes

•

received updates on the progress of model risk strategic in

iat

ives

•

reviewed and discussed progress on Group-related regulatory model submiss

ions and any ongo

ing

regulatory dialogue relating to the progress in establish

ing a robust model r

isk management framework

•

attended a teach-in session on Model Risk, focusing on the framework and key regulatory capital related

model types.

172

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Princ

ipal R

isk

Types

continued

ICS Risk

ICS Risk is the risk to the Group’s assets, operations and ind

iduals due to the potential for unauthorised

access, use, disclosure, disrupt

ion, mod

icat

ion or destruction of informat

ion assets and/or

informat

ion

systems.

The Committee:

•

discussed regular reports from management with

in the ﬁrst, second and th

ird lines of defence, on the

work underway to strengthen the Group’s defences and create stronger control frameworks, focusing on

what had gone well and what could have gone better throughout the year. Such reports enabled the

Committee to probe that the Group’s three lines of defence are aligned in advancing the Group’s ICS

strategy and key prior

ies. Relevant management was inv

ited to these d

iscuss

ions to prov

ide on-the-

ground perspective and detail on any challenges faced

•

discussed regular reports on the Group’s Transformation and Remediat

ion Portfol

io and ICS Risk proﬁle.

Reports are received and discussed by the Committee at least four times and a year

•

discussed and monitored the progress of key risk reduction in

iat

ives across key control doma

ins

•

reviewed and discussed ICS Board Risk Appetite metrics and controls testing, which have been pivotal in

enabling the Committee to track the progress being made and delve deeper into areas that require

continued focus

•

reviewed and discussed an external report on the Group’s ICS programme and management’s response

•

continued to probe the sufﬁc

iency of fund

ing and resource to support the Group’s ICS programme

•

reviewed and discussed the ﬁnd

ings from the CBEST Threat Intell

igence-Led Assessment.

Sir Iain Lobban jo

ined Comm

ittee meetings for these discuss

ions, together w

ith the Chief Transformation,

Technology & Operations Ofﬁcer; the Group Chief Information Security Ofﬁcer, the Group Chief Information

Security Risk Ofﬁcer and representation from Group Internal Audit (GIA). Committee members also

regularly attend meetings of the Group’s Cyber Security Advisory Forum.

Treasury Risk

Treasury Risk is the potential for insuff

ient capital, liqu

ity or funding to support our operations, the risk of

reductions in earnings or value from movements in interest rates impact

ing bank

ing book items and the

potential for losses from a shortfall in the Group’s pensions plans.

The Committee receives the Group Treasurer’s report, at each scheduled meeting, which covers market

developments, capital, liqu

ity and funding, recovery and resolution planning, regulatory updates and

rating agency updates.

During the year, the Committee considered and discussed the Group’s capital and liqu

ity posit

ion and the

regulatory environment, includ

ing the approval of the Group’s Internal Cap

ital Adequacy Assessment

Process (ICAAP) submiss

ion to the PRA,

in order to satisfy itself that the Group’s approach to capital

planning is comprehensive, rigorous and consistent with both the current regulatory requirements and the

likely antic

ipated outlook.

The Committee considered and discussed the Group’s Internal Liqu

ity Adequacy Assessment Process

(ILAAP) for submiss

ion to the PRA, wh

ich considers the Group’s liqu

ity posit

ion,

its framework and whether

sufﬁcient l

iqu

ity resources are being mainta

ined to meet l

iab

ies as they fall due (see sect

ion on stress

testing for further details).

The Committee also reviewed, discussed and challenged the Group’s stress test results for the BoE’s Annual

Cyclical Scenario (ACS).

The Committee’s work on Resolvabil

ity

is set out on

page 173

Further details on Treasury Risk are set out on

pages 306 and 307

Credit Risk

Credit Risk is the potential for loss due to failure of a counterparty to meet its agreed obligat

ions to pay the

Group.

The Committee received and discussed updates on Credit Risk. These discuss

ions were further enhanced

through deep dives into various country and business/client segments, details of which are set out in

examples of deeper discuss

ions on spec

ic top

ics.

Traded Risk

Traded Risk is the potential for loss resulting from activ

ies undertaken by the Group in Financ

ial Markets.

The Committee received and discussed a paper setting out the major Traded Risk developments and

changes which had occurred in the Financ

ial Markets bus

iness over the last year. Focus was placed on

sufﬁciency of resources and fund

ing to support the enhanced infrastructure; and assurance was received

that Financ

ial Market’s growth asp

irat

ions are be

ing managed safely. A discuss

ion was also held on

Treasury Portfolios and changes which had occurred over the last year.

Activ

ies during the year

continued

173

Standard Chartered

– Annual Report 2022

Directors’ report

Princ

ipal R

isk

Types

continued

Financ

ial Cr

ime Risk

Financ

ial Cr

ime Risk is the potential for legal or regulatory penalties, material ﬁnanc

ial loss or reputat

ional

damage resulting from the failure to comply with applicable laws and regulations relating to internat

ional

sanctions, anti-money laundering, anti-bribery and corruption and fraud.

Given the progress made on the Board Financ

ial Cr

ime Risk Committee’s (BFCRC) purpose with respect to

Financ

ial Cr

ime Risk management, the Board reallocated the work of the BFCRC to the Audit Committee,

Board Risk Committee and Board with effect from 1 April 2022. The reallocation of BFCRC oversight enables

a more holist

ic and efﬁcient exam

inat

ion and d

iscuss

ion of r

isks that are closely linked.

The Committee discussed Financ

ial Cr

ime issues as part of its regular business deep dives. It also considered

a paper setting out emerging Financ

ial Cr

ime threats for the Group and what is being done to mit

igate

and manage these threats. Specif

ic r

isks related to sanctions, particularly in relation to Russia, were

also discussed.

Stress testing

The objective of stress test

ing is to support the Group in assessing that it:

•

does not have a portfolio with excessive risk concentration that could produce unacceptably high losses

under severe but plausible scenarios

•

has sufﬁcient ﬁnancial resources to w

ithstand severe but plausible scenarios

•

has the ﬁnancial ﬂex

ity to respond to extreme but plausible scenarios

•

understands the key business model risks and considers what kind of event might crystallise those risks –

even if extreme with a low likel

ihood of occurr

ing – and ident

iﬁes, as requ

ired, actions to mit

igate the

likel

ihood or

impact as required.

The Committee provided oversight, challenge and, where required, approval for:

•

the scenario and stress test results for the 2022 Group ILAAP stress test

•

the scenarios and results for the 2022 Group ICAAP stress test and reverse stress test

•

the results for the BoE ACS stress test

•

the results for the Group’s Recovery Plan stress test

•

the Group’s Recovery Plan

•

a number of internal management deﬁned scenarios were reviewed.

Further details of stress testing are set out on

pages 298 and 299

Internal controls

Discussed reports from the Group Head, Internal Audit which provided summaries of GIA’s appraisals of

controls across key risks, subject to the Committee’s oversight, together with the key risk issues ident

iﬁed by

GIA’s work and management actions put in place to address the ﬁnd

ings.

The Audit Committee and the Culture and Sustainab

ity Committee discuss separate reports from the

Group Head, Internal Audit on GIA’s appraisal of controls across key risk types, subject to each respective

Committee’s oversight.

Remuneration as a

risk management

tool

Considered advice provided by the Interim GCRO to the Remuneration Committee concerning the risk

factors to be taken into account by the Remuneration Committee in determin

ing

incent

ives for the Group

Chief Executive and other colleagues. Such advice assists the Remuneration Committee in its assessment as

to whether the Group’s remuneration policy, practices and procedures are consistent with and promote

sound and effective risk management, and do not encourage risk-taking that exceeds the level of tolerated

risk of the Group.

Further details concerning the Group’s approach to using remuneration as a risk

management tool is set out in the Directors’ remuneration report.

Regulatory

Resolvabil

ity

The Committee held a number of discuss

ions on Resolvab

ity over the course of the year,

includ

ing

scheduling an ad hoc meeting earlier in the year to review and challenge the Group’s Resolution self-

assessment report, ahead of Board approval and submiss

ion to the PRA and BoE. Non-Comm

ittee

members attended this ad hoc meeting, as well as the Group’s external consultants.

Resolvabil

ity

is discussed at most Committee meetings with representation from the three lines of defence,

so that the Committee receives a holist

ic overv

iew of progress being made and items being worked on. The

Committee has also had the beneﬁt of enhanced reporting and metrics to assist its oversight. Furthermore,

there have been more informal train

ing sess

ions and brief

ings held at Board-level to ensure that Comm

ittee

members have the opportunity to discuss some of the more complex issues that Resolvabil

ity presents for

the Group.

The Committee Chair, Group Chairman and Audit Committee Chair also partic

ipated

in a number of

addit

ional meet

ings related to Resolvabil

ity w

ith the internal team, external advisers and regulators.

Resolvabil

ity w

ill remain a key prior

ity for 2023.

Climate Bienn

ial Exploratory Scenar

io (CBES) stress test

The Committee reviewed, discussed and challenged the Group’s CBES response, ahead of submiss

ion to

the BoE. In particular, focus and challenge was placed on the assumptions made by management and the

supporting numbers.

Later in the year, the Committee received a paper setting out the results of the Group’s ﬁrst set of

management scenarios, focused on the impact of Climate Risk on the Group’s portfolio and the next steps.

Further detail on Climate Risk can be found on

pages 316 and 317

Activ

ies during the year

continued

174

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Regulatory

continued

Operational resil

ience – Important Bus

iness Services and Impact Tolerance Statements

In line with regulatory object

ives, the Comm

ittee reviewed and recommended to the Board for approval:

•

changes to the Group’s Important Business Services aris

ing from the annual rev

iew

•

changes to the Group’s Impact Tolerance Statements aris

ing from the annual rev

iew

•

the Group’s Operational Resil

ience self-assessment.

IBOR transit

ion

Received updates from an industry and Group perspective on the IBOR transit

ion. The Comm

ittee

continues to seek assurance that this transit

ion programme rema

ins on track, delivery risks are adequately

managed and that it is sufﬁc

iently resourced. Th

is will continue to be reviewed and discussed throughout

2023.

BCBS 239 Princ

iples

In May 2022, the Committee received and discussed an update on the outcome of the BCBS 239 self-

assessment as of end 2021 and the roadmap for compliance with BCBS 239.

At the end of the year, the Committee received an update on the trajectory of the BCBS 239 Programme,

includ

ing the progress made and challenges faced.

The Committee will receive an update on the level of compliance (as at 31 December 2022), once the

outcome of the self-assessment is available on 28 February 2023.

Group regulator

communicat

ions

The Committee discussed key communicat

ions from the PRA and FCA, where r

isk and Resolvabil

ity were

the main themes.

Examples of

deeper discuss

ions

into specif

ic top

ics

•

Blue Sky Think

ing/Hor

izon Scanning:

Held a horizon scanning session where risk perspectives were

sought from three Group senior colleagues. There were a number of outputs from this session, which were

incorporated into our rolling agenda.

•

CCIB Risk deep dive:

Received and discussed papers covering the CCIB Risk review, and ICS Risk and FC

Risk in CCIB. The top risk issues for CCIB were discussed, with specif

ic focus placed on ICS and FC r

isks.

•

Stressed Assets Risk (SAR):

Reviewed and discussed the transfer of responsib

ity from the second line

of defence to the ﬁrst line. The Committee monitored how this transit

ion

is working and its overall

effectiveness.

•

Review of the Commodity Traders Framework:

Reviewed and provided feedback on the workplan

responding to the PRA’s observations.

•

Credit Portfolio Management (CPM) Annual Review:

Reviewed and discussed the risks relating to CPM

activ

ies and the progress made in optim

ing asset quality and liqu

ity and the effective use of

distr

ibut

ion.

•

Cloud governance:

The Committee has received regular updates on cloud material deployments and

enhanced reporting was discussed and agreed.

•

Reputational and Sustainab

ity Risk:

Discussed a paper setting out the Group’s approach to

Environmental, Social and Governance risk and key enhancements made and planned.

•

CPBB Risk review:

Received and discussed papers covering the CPBB Risk review and managing risks

aris

ing from partnersh

ip-driven business models. Focus was placed on partnership governance, the risks

aris

ing from and assoc

iated with partnerships and controls in Business Banking. A separate paper on ICS

Risk and FC Risk was received and discussed, to ensure that these important risks are receiv

ing sufﬁcient

focus and attention.

•

Change Management:

Received a paper on change management. Discuss

ion focused on effect

ive

prior

isat

ion.

•

Safety and Security Risk:

Received an update on safety and security issues over the last 12 months.

•

Credit Risk review:

Reviewed progress reports from the Credit Risk review function, which set out key

themes from the 2022 reviews and the review plan for 2023. Discuss

ion focused on the sufﬁciency of

resources and the importance of site-vis

its now that COVID-19-related restr

ict

ions are l

ift

ing

in many of

the Group’s markets.

•

Chief Risk Ofﬁcer Treasury report:

Discussed a paper from the Treasury Chief Risk Ofﬁcer following the

establishment of the function with

in Enterpr

ise Risk Management in January 2022. This included risk

observations and recommendations around the current balance sheet and management of capital and

liqu

ity.

•

SC Ventures Risk and Governance:

Discussed the paper setting out an overview of the business activ

ies,

risk proﬁle and governance model of the SC Ventures business unit.

•

Taiwan:

Discussed a paper on Taiwan tensions, impact analysis and stress testing and reviewed the

actions that had been proposed by management.

•

Appointment of new GCRO:

The Committee carefully reviewed, scrutin

ised and challenged the

appointment of the new GCRO, ahead of recommendation to the Board for approval.

Activ

ies during the year

continued

175

Standard Chartered

– Annual Report 2022

Directors’ report

Committee effectiveness review

During 2022, an external Board and Board Committee effectiveness review was facil

itated by Independent Board Evaluat

ion.

Key observations from the

2022 external effectiveness

review

The feedback on the Committee’s

function

ing and effect

iveness was

posit

ive and

it specif

ically h

ighl

ighted:

•

The Committee has a broad remit

with a potentially long list of issues

•

The risks associated with the change

in GCRO and Committee Chair

were acknowledged; however, the

Committee feels that these have

been mit

igated by the cont

inu

ity of

Committee members and strong

Finance and Risk teams.

2023 Action Plan

The 2023 Action Plan for the Committee reﬂects suggestions from the

evaluation and continues to build on the solid progress made last year:

•

Consider how best to reduce the volume of the Committee pack, with

more succinct papers and better use of appendices and non-essential

reading materials

•

Keep under review how FC Risk features in the rolling agenda, given the

retirement of the Board Financ

ial Cr

ime Risk Committee in April 2022

•

Strengthen the focus on Risk Appetite work to be more forward-looking

and continued focus on Resolvabil

ity

•

Consider how ind

idual Committee members might take responsib

ity

for leading on particularly complex issues, includ

ing regulatory matters,

so as to improve the Committee’s deliberat

ions

•

Schedule a Blue Sky Think

ing sess

ion for the Board Risk Committee and

Audit Committee to consider which key risks could derail the Group’s

strategy.

Risk informat

ion prov

ided to the Committee

The Committee is authorised to invest

igate or seek any

informat

ion relat

ing to an activ

ity w

ith

its Terms of

Reference, receives regular reports on risk management, and

tracks a wide range of risk metrics through a Board Risk

Information report. This report provides an overview of the

Group’s risk proﬁle against the Group’s Risk Appetite

Statement. The GCRO’s report covers the macroeconomic

environment, geopolit

ical outlook, mater

ial events and

disclosures and ongoing risks. Coverage of Princ

ipal R

isk Types

and regulatory matters are also included in this report.

Regular updates on COVID-19 impacts, country risk and

geopolit

ical tens

ions have been reported on and discussed

throughout the year.

The Committee has the authority to request and receive

relevant informat

ion cons

istent with the requirements of BCBS

239 that will allow the Committee to fulﬁl its governance

mandate relating to risks to which the Group is exposed, and

alert senior management when risk reports do not meet its

requirements.

Risk management disclosures

The Committee has reviewed the risk disclosures in the Annual

Report and the Half Year Report, and has also reviewed the

disclosures regarding the work of the Committee.

Interaction with the Group Chief Risk Ofﬁcer

The Committee Chair meets ind

idually with the GCRO

regularly in between formal Committee meetings. These

meetings allow open discuss

ion of any matters relat

ing to

issues aris

ing from the Comm

ittee’s formal discuss

ions and

inform the forward-looking agenda.

Interaction with management

The Committee is mindful of the need to hold management

directly accountable when issues have arisen and have been

reported by the GCRO. Senior management has attended

Committee meetings for deeper discuss

ions

in such instances.

The Committee Chair also meets ind

idually with senior

leaders of the Risk function.

Interaction with regulators

Maria Ramos attended meetings with the PRA and the BoE

over the course of the year.

Interaction between Board committees on

risk-related issues

In the few instances where it does not have primary oversight

for a given type of risk, the Committee interacts closely with

other Board Committees where the remit of these other

Committees clearly covers risk-related matters. For example,

the Audit Committee reviews the Group’s internal ﬁnanc

ial

controls and has oversight of regulatory compliance and the

Culture and Sustainab

ity Committee has oversight of culture

and sustainab

ity-related matters. The interact

ion ass

ists the

Committee in ensuring that it is well informed on discuss

ions

held, and the close collaboration of the Committee Chairs

helps to ensure that there are no gaps and any potential for

unnecessary duplicat

ion

is avoided.

Risk function resourcing

The Committee has sought and received assurance that the

Risk function is adequately resourced to perform its function

effectively. The Committee reviewed and discussed a paper

setting out an overview of the changes to the Risk function in

2022, management’s assessment of the adequacy of people

resources with

in the funct

ion and the forward-looking view of

the Risk function.

Linkages with subsid

iary board r

isk committees

Maria Ramos hosted an annual video-conference with the

chairs of subsid

iary board r

isk committees and INEDs in

October 2022. Maria Ramos also attended a board risk

committee of Standard Chartered Bank (Hong Kong) Lim

ited

as an observer.

Details of the video-conference can be found on

page 161

176

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

At the 2022 AGM, the Group pledged to follow a roadmap that

aims to see it achieve its net zero goal by 2050 and the Committee,

alongside the Board, is tracking progress against this roadmap.

The Group is well placed to assist clients in transit

ion

ing away from

carbon-intens

ive

industr

ies. Th

is is particularly pertinent as a number

of countries in the Group’s footprint do not yet have a net zero pledge.

I am pleased to report that this programme is on track, with the

milestones outlined in the Group’s public net zero roadmap having

been met for 2022.

In my last report I described the latest chapter of the Group’s

transformation agenda, which includes a focus on becoming truly

purpose-led by taking three Stands: Accelerating Zero, Lift

ing

Partic

ipat

ion and Resetting Globalisat

ion. Dur

ing this year, the

Committee monitored progress on how the Stands were coming to

life across the organisat

ion,

includ

ing deep d

ives with business leaders

who shared the in

iat

ives currently

in place and plans for the future.

This year, the Committee has overseen the redeﬁn

ing of the Group’s

culture aspirat

ion to better reﬂect the des

ire for high performance

and excellence, the need for transparent management of risk and a

‘One Bank’ mindset. The new cultural deﬁn

ion is framed around

ambit

ion, act

ion and accountabil

ity.

Exemplary leadership with

in the Group

is essential to the Committee’s

agenda, such as embedding the Group’s culture and ensuring we

deliver on our Purpose. It’s therefore important for the Committee to

oversee the work that the Group is doing to engage our leaders at all

levels to aspire, insp

ire and execute. The Comm

ittee heard from a

Leadership Council member who gave ﬁrst-hand experience of how

investment in our leaders is being implemented in practice and, more

importantly, the impact this was having.

The Committee is responsible for the Board workforce engagement

programme and this year kicked off a review of the current

framework, to determine if an alternate model could enhance the

Board-colleague connection. This will be concluded and implemented

in 2023.

Focus on the Group’s divers

ity and

inclus

ion

iat

ives cont

inued, and

the Committee was pleased with progress across all three strands of

work: Best Place to Work (colleagues), Best Place to Bank (clients) and

Prosperous Communit

ies (supply cha

in and communit

ies). The

Committee asked the team to increase focus on ethnic divers

ity to

ensure our leadership is representative of our client base and

footprint.

We continued our practice of inv

ing external speakers to challenge

our think

ing. Th

is year, the Committee hosted a thought-provoking

session on how sustainab

ity is viewed in China, delivered by a

pre-eminent industry leader. All Board directors were inv

ited to th

session.

This will be my last report from the Committee as I stand down from

the Board at the 2023 AGM. It has been a real pleasure to chair this

Committee (and its previous incarnat

ion) over e

ight years, during

which time our agenda has developed very meaningfully along with

the Group’s strategy and the wider environment. I’d like to thank all my

colleagues past and present who should feel proud of what they have

achieved. Particular thanks to Christ

ine Hodgson, who stood down

from the Board and the Committee on 31 January 2023, for her

unwavering dedicat

ion and s

ign

iﬁcant contr

ibut

ion to the

Committee’s evolution over the past nine years.

Finally, I’d like to welcome the two new members of the Committee,

Robin Lawther and Jackie Hunt, who have already started to make a

posit

ive

impact in the Committee’s deliberat

ions, and I w

ish them well

as they take the Committee forward.

The following report provides further ins

ight

into the Committee’s

work during the year.

Jasmine Whitbread

Chair of the Culture and Sustainab

ity Committee

Who else attended Committee meetings in 2022?

The Group Chairman; Group Chief Executive; Group Head,

Human Resources; Group Head, Corporate Affairs, Brand and

Marketing; Chief Sustainab

ity Ofﬁcer, Group General Counsel

and Group Company Secretary.

Biograph

ical deta

ils of committee members can be found

pages 138 to 142

What are the main responsib

ies of the Comm

ittee?

The Committee was formed by the Board to oversee the Group’s

culture and sustainab

ity prior

ies.

The Committee has written Terms of Reference that

can be viewed at

sc.com/termsofreference

Culture and

Sustainab

ity

Committee

“The Committee has

overseen the redeﬁning

of the Group’s culture

aspirat

ion to better

reﬂect the desire for

high performance

and excellence.”

Committee composit

ion

Jasmine Whitbread (Chair)

Robin Lawther, CBE

Christ

ine Hodgson, CBE

Jackie Hunt

David Conner

Scheduled meetings

David stepped down from the Committee on 1 October 2022.

Jackie and Robin jo

ined the Comm

ittee on 1 October 2022.

David Tang

177

Standard Chartered

– Annual Report 2022

Directors’ report

Activ

ies during the year

Sustainab

ity and

environmental,

social and

governance

(ESG) matters

The Committee:

•

Continued to oversee the Group’s progress on the net zero pledge made at the 2022 AGM, and while the

Group has a number of challenges due to its diverse footprint, the ambit

ion

is progressing

•

Monitored the assessment of the Group’s performance by the various external agencies on its approach

to ESG matters, focusing on the agencies that the investors prior

ised

•

Received a progress update on the current ﬁve-year Global Community Engagement Strategy,

`Futuremakers’ and the prior

ies due by the end of 2023; and a look forward to the Futuremakers Phase 2

Strategy for 2024 to 2030, which will be presented to the Committee in March 2023

•

Welcomed the Group’s inaugural Chief Sustainab

ity Ofﬁcer as a standing attendee, who presented a

refreshed Sustainab

ity Strategy to the Board in Q4.

Stands

Following the launch of the three stands of focus: Accelerating Zero, Lift

ing Part

ipat

ion and Resetting

Globalisat

ion

in 2021, there were two deep dives at which business leaders presented to the Committee on

how the Stands were being ‘lived’ in practice:

•

The ﬁrst was from CPBB and focused on four key areas: mass market to lift partic

ipat

ion; in

iat

ives

in small

and medium enterprises (SME); ESG Products/Sustainable Finance; and Talent development in

iat

ives.

A number of in

iat

ives were ongo

ing and a progress update from CPBB will be given to the Committee

in 2023

•

The second was from the new Chief Sustainab

ity Ofﬁcer and focused on the work taking place on the

Accelerating Zero Stand, consolidat

ion of the Group’s susta

inab

ity aspirat

ions and the Group’s

performance against the Group Sustainab

ity Scorecard Metrics.

More deep dives are planned for 2023.

Culture and

Divers

ity and

Inclusion

The Committee:

•

Oversaw the redeﬁning of the Group’s cultural asp

irat

ion to ensure that

it sufﬁc

iently reﬂects the need for

high performance and excellence in all we do

•

Reviewed the Group’s approach to divers

ity and

inclus

ion and d

iscussed the various strands of divers

ity

and the progress that was being made for each

•

Worked with Group Internal Audit to establish an approach to assessing behavioural risk during audit

activ

ies and received the ﬁrst report of the output of this enhanced audit approach at the meeting in

December 2022.

Board workforce

engagement and

workforce polic

ies

and practices

The Committee has responsib

ity for overseeing the Board’s workforce engagement programme and

ensuring workforce polic

ies and pract

ices remain consistent with the Group’s valued behaviours.

The Committee is overseeing a review of the exist

ing framework and cons

ider

ing certa

in adjustments

aimed to enhance Board workforce engagement.

During the year, the Committee has overseen the following activ

ity:

•

The annual employee engagement survey, My Voice, and probed the results to understand what was

driv

ing the scores and challenged the team on areas for

improvement. More informat

ion on l

isten

ing to

our employees can be found on pages 60 to 63

•

Monitored the impact of hybrid working on team members, particularly in relation to learning and career

development for more junior team members and how changes

in working patterns could be affecting

mental health

•

The continued implementat

ion of a Leadersh

ip Agreement, which all leaders will need to pledge to in

2023. More informat

ion on the Leadersh

ip Agreement can be found on page 61

•

Reviewed the in

iat

ives for the development and assessment of leaders throughout the Group

•

Reviewed the in

iat

ives ongo

ing to improve psychological safety across the Group and the importance of

strong leadership from both the top and throughout the layers of management

•

An informal lunch, hosted by the Board, with the UAE talent which provided an opportunity for the Board

to hear directly from staff on how the Group’s direct

ion and strategy was l

ived and embedded in different

parts of the Group

•

An interact

ive UAE townhall , hosted by the Group Cha

irman with members of the Board and

Management Team. Over 500 colleagues attended in person and were encouraged to ask questions

directly to the panel. In addit

ion,

it was live-streamed and facil

itated by an onl

ine question and answer

platform to enable engagement across the business.

Further detail regarding Board workforce engagement can be found on

page 162

178

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Committee effectiveness review

During 2022, an external Board and Board Committee effectiveness review was facil

itated by Independent Board Evaluat

ion.

Progress against the 2022 Action Plan:

•

Following a challenge by the Committee, Group Internal Audit has enhanced its audit approach to include a behavioural risk

assessment with the development of testing plans and the recruitment of a special

ist

in this ﬁeld; and by the end of 2022 had started

reporting on the outcomes of this enhanced audit approach.

•

In June, the Committee hosted a session on developments in China that was delivered by a pre-eminent industry expert in this ﬁeld.

All Board directors were inv

ited to th

is session.

•

The Committee has been tracking the Group’s progress against the net zero milestones.

Key observations from the 2022 external

effectiveness review

The feedback on the Committee’s function

ing and

effectiveness was posit

ive and

it specif

ically h

ighl

ighted:

•

The Committee Chair was rated as highly effective, and

members noted that meetings ran to time and had an

inclus

ive and part

ipat

ive tone. The Chair took a keen

interest in the agenda and was felt to be extremely well

qualif

ied for the role

•

Members report that the topics discussed at the

Committee were both interest

ing and challeng

ing. They

noted that the committee Chair had done a good job of

bring

ing r

igour and data to potentially nebulous subjects

and that debates were well founded and balanced as a

result.

2023 Action Plan

The 2023 Action Plan for the Committee reﬂects

suggestions from the evaluation and continues to

build on the solid progress made last year:

•

Review strengthening the links between the

Committee and the business

•

Consider the remit of the Committee and the

overlap between the Board and other Board

Committees

•

Review of the Board/employee engagement tool

•

Continue to focus on the net zero strategy and

milestones.

179

Standard Chartered

– Annual Report 2022

Directors’ report

This year has seen a number of sign

iﬁcant changes to the compos

ion

of the Board, following the retirement of a number of our long-

standing and valued independent non-executive directors. I would

like to thank Naguib Kheraj, former Deputy Chairman and Chair of the

Board Risk Committee who retired from the Board in April for his

dedicat

ion and s

ign

iﬁcant and

impactful contribut

ions to the Board

and Committee discuss

ions. My thanks also go to Byron Grote who

retired from the Board in November for his many contribut

ions to the

Board and its Committees. I would also like to thank Christ

ine

Hodgson, former Senior Independent Director and Chair of the

Remuneration Committee for her ins

ightful contr

ibut

ions as well as for

agreeing to remain on the Board until 31 January 2023 to ensure a

smooth transit

ion to a new Remunerat

ion Committee Chair, Shir

ish

Apte. Before recommending the short extension beyond her nine-year

term, the Committee conducted a robust assessment of her

independence. We also announced that Jasmine Whitbread would

not be seeking re-election at the 2023 AGM and would retire from the

Board at that time.

The Committee has been focused on planning for the transit

ion of

our long-standing non-executive directors, ensuring that the Board

remains well balanced with a strong pipel

ine of cand

idates with the

appropriate skillsets, experience and capabil

ies, specif

ically across

banking and ﬁnanc

ial serv

ices; executive and non-executive global

listed experience; remuneration committee experience; and broad

market and gender divers

ity. Over the course of 2022, and w

ith

the assistance of an external search ﬁrm we shortlisted and

recommended to the Board the appointment of four experienced

independent non-executive directors, Shir

ish Apte, Rob

in Lawther,

Jackie Hunt and Linda Yueh, each of whom bring elements of these

key attributes to the Board discuss

ion. Deta

ils on each of the new

directors can be found on pages 139, 141 and 142.

As well as focusing on the search for new directors, we also spent a

great deal of time refreshing the committees’ succession, notably the

Chairs of the Board Risk and Remuneration Committees. This resulted

in the appointment of Maria Ramos and Shir

ish Apte tak

ing on the

respective roles. Maria Ramos also took on the Senior Independent

Director role from Christ

ine Hodgson upon her reach

ing her nine-year

tenure.

Earlier in the year, the Committee considered the sign

iﬁcant progress

which had been made by the Board Financ

ial Cr

ime Risk Committee

in the area of ﬁnanc

ial cr

ime risk since it was formed, and in line with

the recommendations of the 2020 Board effectiveness review,

recommended to the Board that its work was reallocated to a

combinat

ion of the Board R

isk Committee, Audit Committee and the

Board, signall

ing a s

ign

iﬁcant m

ilestone in this area for the Group.

Detail of the Committee’s annual review of the Board Divers

ity Pol

icy

and its assessment of progress against it can be found on pages 180

to 182. Following the sign

iﬁcant real

ignment of the Policy a couple

of years ago, only one material change was recommended in 2022,

to increase the representation of women on the Board to at least

40 per cent, reﬂecting the Board’s continued commitment to further

balancing female representation on the Board and to align to the

Financ

ial Conduct Author

ity’s (FCA) changes to the List

ing Rules

this area.

As part of the Committee’s governance oversight role, we continued

to receive updates from the three regional CEOs who each have

responsib

ity for the subsid

iary governance processes across the

regions and provide a holist

ic v

iew of the governance framework

and challenges faced across the Group’s footprint. This was further

reinforced with the return of the Global Subsid

iary Conference

Dubai in November, attended by members of the Board and

Management Team and the Chairs and selected INEDs from across

the Group’s diverse footprint. This conference provided an important

opportunity for creating and mainta

ing appropriate linkages with

the Group’s subsid

iar

ies, as well as sharing best practice.

The Committee also paid sign

iﬁcant attent

ion to enhancing the

effectiveness of the Board and its committees. An externally

facil

itated Board effect

iveness review was commiss

ioned

in the

autumn which concluded that the Board continues to operate

effectively while also signall

ing several areas for

improvement, details

of which can be found on page 156.

Dr José Viñals

Chair of the Governance and Nominat

ion Comm

ittee

Who else attended Committee meetings in 2022?

The Group Chief Executive; Group Head, HR; and Group

Company Secretary.

Biograph

ical deta

ils of the committee members

can be viewed on

pages 138 to 142

What are the main responsib

ies of the Comm

ittee?

The Committee has responsib

ity for keeping the size, structure

and composit

ion of the Board and

its committees under review.

As part of the Committee’s succession planning for the Board, it

takes into account the Group’s strategy and challenges, and

makes recommendations to the Board in respect of any

adjustments to the Board’s composit

ion.

The Committee also: keeps under review the leadership needs of,

and succession plans for, the Group in relation to both executive

directors and other senior executives; has oversight of the

process by which the Board, its committees and ind

idual

directors assess their effectiveness; keeps the divers

ity of the

Board under review and monitors progress towards achiev

ing

its

objectives

in this area; considers any potential situat

ional

conﬂicts of interest declared by Board members; considers the

impact of material changes to corporate governance regulation

and legislat

ion affect

ing the Group; and has oversight of the

Group’s approach to subsid

iary corporate governance.

The Committee reports to the Board on its key areas of focus

following each Committee meeting.

The Committee has written Terms of Reference that

can be viewed at

sc.com/termsofreference

Governance

and Nominat

ion

Committee

“The Committee has been

focused on planning for

the transit

ion of our long-

standing non-executive

directors, ensuring that

the Board remains

well balanced.”

Committee composit

ion

José Viñals (Chair)

Christ

ine Hodgson, CBE

Scheduled meetings

Naguib Kheraj

Jasmine Whitbread

Phil Rivett

N/A

Ad hoc

Maria

Ramos

Shir

ish Apte observed a number of meet

ings in 2022 ahead of his

appointment to the Committee on 1 January 2023

Naguib stepped down from the Committee on 30 April 2022

Maria jo

ined the Comm

ittee on 1 August 2022

Christ

ine stepped down from the Comm

ittee on 31 December 2022

Jasmine was unable to attend one scheduled meeting and one ad hoc

held on 8 November 2022 and 21 July 2022 respectively as a result of

long-standing external board commitments

180

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Activ

ies during the year

Board and senior

talent succession

planning

•

Engaged Russell Reynolds, a signatory to the voluntary code of conduct for executive search ﬁrms who

also supplies senior resourcing to the Group, to review the market for future INED candidates with deep

global banking and ﬁnanc

ial serv

ices experience, strong understanding of the remuneration

environment, sign

iﬁcant commerc

ial experience and with representation from our key markets.

•

Discussed the composit

ion of the Board and cons

idered the orderly succession of current INEDs and the

skills, knowledge, experience, divers

ity (

in the widest sense) and attributes required of future INEDs, both

immed

iately and

in the medium to longer term. In consider

ing the Board’s success

ion, the Committee

takes into account the length of tenure of the INEDs, and the importance of regularly refreshing the

Board membership.

•

Systematically reviewed a number of INED long and short lists throughout the year to ident

ify potent

ial

candidates with a diverse range of skills, experience, knowledge and perspectives. This process resulted

in the Committee recommending to the Board the appointments of Shir

ish Apte, Rob

in Lawther, Jackie

Hunt and Linda Yueh.

•

Mainta

ined overs

ight of the progress made by Shir

ish Apte, aga

inst his tailored Board and committee

induct

ion programmes.

•

Provided oversight of the detailed executive and senior management (level below Management Team)

succession plans, alongside other crit

ical roles,

includ

ing the overs

ight of a process of external market

mapping of key management roles.

•

Reviewed succession plans for the committee chair roles, ident

ify

ing appropriate ind

iduals with the

necessary skills and attributes to provide emergency cover as required, as well as on a longer term basis,

includ

ing acknowledg

ing and addressing where gaps exist. Following this process, the Committee

recommended to the Board the appointment of:

–

Maria Ramos as Senior Independent Director, Chair of the Board Risk Committee and a member of the

Governance and Nominat

ion Comm

ittee

–

Shir

ish Apte as a member and subsequently Cha

ir of the Remuneration Committee and a member of

the Governance and Nominat

ion Comm

ittee

–

David Conner as a member of the Remuneration Committee

–

Robin Lawther as a member of the Remuneration Committee and Culture and Sustainab

ity

Committee

–

Jackie Hunt as a member of the Culture and Sustainab

ity Committee and Audit Committee.

Board composit

ion as at 31 December 2022

Gender divers

ity

Board

Female

Male

Executive

Female

Male

Number of senior of posit

ions

(CEO, CFO, SID

and Chair)

Female

Male

(2021: 31%)

(2021: 25%)

(2021: 0%)

International

experience

Banking, risk, ﬁnance and

accounting experience

among INEDs and Chair

Representation

from key markets

Experience

National

ity

The national

ity of our d

irectors does

not in itself demonstrate the divers

ity

of the Board’s composit

ion. Between

them, the directors have sign

iﬁcant

experience of either liv

ing, work

ing

or managing operations across the

markets in which we operate.

Ethnic

ity

Our aspirat

ion

is for our Board to reﬂect

the divers

ity of our footpr

int. Our

global ethnic

ity categor

ies represent

the breadth of divers

ity across our

markets. Twenty-one per cent of the

Board were from an ethnic minor

ity

background as at the end of the year.

Further details

on the work of

the

Governance

and Nominat

ion

Committee

can

be found below

INED tenure

(includ

ing Cha

ir)

0–1 year

3–6 year

1–3 years

6–9 years

9+ years

1. White

11 directors

2. Chinese

2 directors

3. South Asian

1 director

181

Standard Chartered

– Annual Report 2022

Directors’ report

Board and

committees’

effectiveness

review

•

Considered and recommended the appointment of Fﬁon Hague of Independent Board Evaluation to

conduct the 2022 external evaluation of the Board and its committees. Provided oversight of the Board

and committees’ evaluation, and monitored progress against the 2022 Action Plan, which addressed the

key observations from the 2021 effectiveness review.

•

Discussed the observations and recommendations which ﬂowed from the 2022 externally facil

itated

Board and committees’ review and discussed the shape of the Board’s 2023 Action Plan.

Details of this year’s Board and committees’ external evaluation, includ

ing the process wh

ich we

followed, observations from the review and the resulting 2023 Action Plan can be found on

page 156

Board Divers

ity

Policy

•

Reviewed progress made in 2022 against the agreed commitments set out in the Board Divers

ity Pol

icy.

•

Conducted a review of the Board Divers

ity Pol

icy to ensure that it continued to drive divers

ity

in its

broadest sense, while continu

ing to take account of best pract

ice, specif

ically

in the area of gender,

social and ethnic backgrounds, knowledge, personal attributes, skills and experience.

•

Discussed the Board’s commitment to ensuring female representation on the Board and increased its

target from a min

imum of 33 per cent to at least 40 per cent female

in order to align with the changes to

the UK List

ing Rules

in this area.

•

Reviewed the outcome of the FCA consultation on changes to the UK List

ing Rules and D

isclosure

Guidance and Transparency Rules (DTRs) in relation to divers

ity and

inclus

ion on company boards and

considered the Company’s current and projected compliance against the new targets.

Further details of progress the Board has made against the key object

ives set out

in the

Board Divers

ity Pol

icy

are set out on

page 182

Independent

advisers

•

Recommended to the Board the extension, for a further 12 months, of Sir Iain Lobban’s appointment as

independent adviser to the Board and its committees on cyber security and cyber threats.

•

Recommended to the Board the extension, for a further 12 months, of Paul Khoo’s appointment as

independent adviser to the Board and its Committees on Financ

ial Cr

ime.

Conﬂicts of

interest

•

Conducted an annual review of the directors’ exist

ing and prev

iously authorised potential and actual

situat

ional conﬂ

icts of interest and considered whether any circumstances would necessitate the

authorisat

ion be

ing revoked or amended. Also noted directors’ other directorsh

ips and bus

iness interests

taken during the year in the context of time commitment, overboarding and the PRA lim

its on

directorsh

ips as well as other regulatory requ

irements in this area.

Assessment of the

non-executive

directors’

independence

•

Conducted a robust assessment of Christ

ine Hodgson’s

independence ahead of taking the decis

ion that

she remain on the Board for a short period beyond her nine-year tenure, to enable her to lead the

shareholder consultation required in the wake of a sign

iﬁcant m

inor

ity vote aga

inst the remuneration

policy in 2022, and to facil

itate an orderly trans

ion to Sh

ish Apte as the

incom

ing Remunerat

ion

Committee Chair.

•

Considered the independence of each of the non-executive directors, taking into account any

circumstances likely to impa

ir, or wh

ich could impa

ir, the

ir independence. Noted the thorough process

undertaken to assess ind

idual director performance and effectiveness, taking these reviews into

account along with tenure and succession plans in making its recommendation to appoint the INEDs for

a further year.

Subsid

iary

governance

•

Received updates from the three regional CEOs on the Group’s approach to subsid

iary governance.

Received assurance of effective oversight and compliance with the Group’s Subsid

iary Governance Pol

icy

and discussed material regulatory trends, in

iat

ives, and cons

iderat

ions l

ikely to impact the current or

future governance of the Group’s banking subsid

iar

ies; the key actions aris

ing from bank

ing subsid

iary

board effectiveness reviews; and linkages between banking subsid

iar

ies and the Group.

•

Approved the appointments of a new Chair and an independent non-executive director of Standard

Chartered (Hong Kong) Lim

ited.

Terms of Reference

•

Considered the progress made by the Board Financ

ial Cr

ime Risk Committee, discussed the proposed

future oversight of Financ

ial Cr

ime and recommended that its remit was allocated into a combinat

ion of

the Audit Committee, Board Risk Committee and the Board’s Terms of Reference.

•

Conducted a review of the Committee’s Terms of Reference during the year, taking into account the

responsib

ies, obl

igat

ions and best pract

ice princ

iples

it has in the UK and Hong Kong.

Implementation of the Board Divers

ity Pol

icy

The Committee conducted its annual review of the Board

Divers

ity Pol

icy (the Policy) during 2022, to ensure that it

continues to promote and drive divers

ity

in its broadest sense,

while continu

ing to take account of best pract

ice in

iat

ives.

We strive to mainta

in a d

iverse Board, recognis

ing the

beneﬁts of having a Board made up of ind

iduals with a

diverse mix of gender, social and ethnic backgrounds,

knowledge, personal attributes, skills and experience. We also

aim to reﬂect the Group’s aspirat

ions

in relation to its

employees and its values and to posit

ion the Group as a

global leader in these areas. This divers

ity prov

ides a range of

perspectives which we believe contribute to the effective

Board dynamics.

We made good progress in improv

ing the balance of female

directors on the Board this year, with female representation on

the Board at 43 per cent, above the new target being

incorporated into the UK List

ing Rules

in 2023, of 40 per cent.

However, this will continue to move around in the short term

as the composit

ion of the Board cont

inues to change.

While acknowledging the importance of gender divers

ity

around the board table and ultimately gender parity on the

Board, we also recognise the importance of balancing gender

divers

ity w

ith

in the broader context of d

ivers

ity, wh

ich is

particularly relevant given the diverse markets in which the

Group operates.

Activ

ies during the year

continued

182

Standard Chartered

– Annual Report 2022

Directors’ report

Corporate governance

Aligned to the Policy’s broad ambit

ion, th

is year we report on

the progress made against the seven object

ives,

includ

ing the

updated commitments on female representation made at the

end of 2022, which the Board remains committed to in order

to further enhance progress in this area:

•

increas

ing the representat

ion of women on the Board with

an aim to have a min

imum of 40 per cent female

representation

•

adopting an ethnic

ity asp

irat

ion of a m

imum of 30 per

cent from an ethnic minor

ity background

•

ensuring that our Board divers

ity better reﬂects the d

iverse

markets in which we operate

•

ensuring that the Board is comprised of a good balance of

skills, experience, knowledge, perspective and varied

backgrounds

•

ensuring that we consider the Group’s aspirat

ions

in relation

to disab

ity, sexual orientat

ion, gender

ident

ity and gender

expression

•

only engaging search ﬁrms that are signed up to the

Voluntary Code of Conduct for Executive Search ﬁrms

•

reporting annually on the divers

ity of the execut

ive pipel

ine

as well as the divers

ity of the Board,

includ

ing progress

being made on reaching the Board’s gender and ethnic

ity

aspirat

ions.

Details of the Board’s diverse composit

ion are set out on

pages 138

to 142

of this report, and that of the Management Team can be

found on

pages 143 to 145

Details of the Group’s wider divers

ity and

inclus

ion strategy,

includ

ing gender balance across the Group and targets for ethn

representation, can be found on

pages 60 to 63

of this report

A copy of the full Board Divers

ity Pol

icy can be viewed at

sc.com/boarddivers

itypol

icy

and further details on the

Group’s approach to Divers

ity and Inclus

ion can be viewed

sc.com/divers

ity-and-

inclus

ion

Progress made in 2022 against the key object

ives set out

in the Board Divers

ity Pol

icy is set out below.

Board Divers

ity Pol

icy object

ives

Progress

Increasing the representation of women

on the Board with an aim to have a

min

imum of 33 per cent female

representation

Increasing gender representation on the Board remains an important focus of the

Board’s succession planning process, ensuring that female candidates are fairly

represented on long and short lists. A number of changes to the composit

ion of the

Board were announced during 2022: the appointment of Shir

ish Apte, Rob

Lawther, Jackie Hunt and Linda Yueh as well as the retirement of Naguib Kheraj,

Byron Grote, Jasmine Whitbread and Christ

ine Hodgson. The Board cont

inues to

strive to ensure that female representation continues to increase and the Committee

recommended rais

ing the Board’s target for women’s representat

ion to 40 per cent,

in line with the forthcoming changes to the List

ing Rules. Compl

iance against new

targets under the List

ing Rules can be seen on page 180.

Adopting an ethnic

ity asp

irat

ion of a

min

imum of 30 per cent from an ethn

minor

ity background

Despite changes to the composit

ion of the Board dur

ing the year, representation

from ethnic minor

ity background rema

ined steady at 21 per cent. We remain

committed to our ethnic

ity asp

irat

ion and to ensur

ing a broad representation.

Compliance against new targets under the List

ing Rules can be seen on page 180.

Ensuring that our Board reﬂects the

diverse markets in which we operate

What sets Standard Chartered apart is our divers

ity of people, cultures and

networks. The Board has representation from across the regions in which we

operate, includ

ing the UK, the EU, North Amer

ica, Asia and Africa. Many of the INEDs

have addit

ional exper

ience of having worked and lived in many of the Group’s

markets. As part of the Committee’s succession planning in 2022, it has considered a

sign

iﬁcant number of potent

ial future INED candidates who are representative of

some of our key regions and markets.

Ensuring that the Board is comprised

of a good balance of skills, experience,

knowledge, perspective and varied

backgrounds

Throughout the year, the Committee has focused on ident

ify

ing the collective

experience, skills and attributes required both immed

iately and

in the medium to

longer term. The Committee has systematically reviewed candidate long and short

lists to ident

ify potent

ially suitable INED candidates. Areas of particular focus in 2022

included:

•

Corporate inst

itut

ional and commercial banking

• Technology risks

• Remuneration

• Previous CEO/CFO experience

• ASEAN experience

• Regulatory understanding.

Ensuring that we consider the Group’s

aspirat

ions

in relation to disab

ity,

sexual orientat

ion, gender

ident

ity

and gender expression

We remain committed to all aspects of divers

ity as we undertake any Board

succession process.

Engaging only search ﬁrms that are

signed up to the Voluntary Code of

Conduct for executive search ﬁrms

We continue to engage only search ﬁrms signed up to the Voluntary Code of

Conduct. We worked with Russell Reynolds to assist us in ident

ify

ing and build

ing a

pipel

ine of h

igh-quality potential INED candidates for a number of assignments.

Russell Reynolds is signed up to the Voluntary Code and is committed in supporting

our ambit

ions to w

iden all aspects of divers

ity on the Board.

Reporting annually on the divers

ity of the

executive pipel

ine as well as the d

ivers

ity

of the Board, includ

ing progress be

ing

made on reaching the Board’s gender

and ethnic

ity asp

irat

ions.

The Committee takes an active role in review

ing the success

ion planning for the

executive, Management Team and senior management one level below the

Management Team. We continue to improve our reporting of Board and senior

talent succession planning as well as reporting on the importance of a diverse Board

as a means of capturing differ

ing perspect

ives and enhancing discuss

ion. Progress

enhancing divers

ity along w

ith the Board’s gender and ethnic

ity asp

irat

ions w

ill

continue to be developed in line with the forthcoming changes to divers

ity report

ing

in the UK List

ing Rules.

183

Standard Chartered

– Annual Report 2022

Directors’ report

Committee effectiveness review

This year’s Committee Effectiveness Review was conducted

simultaneously with that of the Board and comprised an

externally facil

itated evaluat

ion conducted by Fﬁon Hague

of Independent Board Evaluation. Broadly, members and

other contributors felt that the Committee is well chaired,

methodical and dil

igent

in its work. There has been sign

iﬁcant

focus on deliver

ing more Board appo

intments during the

year, although there was a sense that the process could be

speeded up over the coming year as well as ensuring an

orderly succession of key Board roles over the next few years.

A summary of the key observations and the subsequent

actions can be found below.

Progress against the 2022 Action Plan:

The 2022 Action Plan set out a number of actions from the

internally facil

itated Comm

ittee evaluation conducted in 2021.

The 2022 Action Plan was reviewed during the year and good

progress had been made against the actions.

Key observations from the 2022 external

effectiveness review

The feedback on the Committee’s function

ing and

effectiveness was posit

ive and

it specif

ically h

ighl

ighted:

•

Members continued to feel that the Committee was well

Chaired and the Board was kept well informed of its

activ

ies

•

There was a sense from exist

ing and new INEDs that the

recruitment process could be streamlined and more pace

and efﬁciency

injected into the process

•

Members supported greater ﬂexib

ity in the tenure of

INEDs on the Board, to create greater option in succession

planning

•

Conﬁdence in the quality of the new jo

iners

is high, but it

is inev

itable that some of the Board

is in induct

ion mode

at present

•

The succession plans for the years ahead should be

discussed more widely.

2023 Action Plan

The 2023 Action Plan for the Committee reﬂects

suggestions from the Board evaluation and continues

to build on the solid progress made last year:

•

Increase the pace of the INED appointment process

•

Focus on increas

ing the level of technology

experience on the Board

•

Improve divers

ity by

increas

ing representat

ion from

across our markets

•

Continue to enhance the comprehensive induct

ion

programmes for new Board and Committee

members, by includ

ing add

ional wr

itten

informat

ion and schedul

ing a follow-up induct

ion

at the end of the ﬁrst year

•

Continue to oversee the development of the

executive talent pipel

ine w

ith a view to increas

ing

the proportion on senior internal appointments.

184

Standard Chartered

– Annual Report 2022

Directors’ report

Directors’ remuneration report

Summary of 2022 remuneration decis

ions

•

The current economic environment remains

challenging, with ris

ing

inﬂat

ion across large parts of

our network. In order to support our staff, especially

junior colleagues, we are

implement

ing salary

increases

in April 2023, at a global average of 6.6 per cent.

•

Salary increases for executive directors and senior

management, at 3.4 per cent, are 50 per cent lower

than the average increase for other UK employees.

•

Group performance in 2022 was strong, across ﬁnanc

ial

and non-ﬁnancial metr

ics, as measured through the

Group balanced scorecard. As such, the approved

aggregate discret

ionary remunerat

ion for the year is

USD1,589 mill

ion, up 16 per cent on 2021.

•

Annual incent

ive awards for execut

ive directors,

Bill Winters (CEO) and Andy Halford (CFO), were

assessed at 70 per cent of the maximum for Bill

and at 69 per cent of the maximum for Andy.

•

Reward for all Group employees, includ

ing execut

ive

directors, continues to be aligned to the Group’s

strategic prior

ies, through the annual and long-term

incent

ive scorecards.

I am pleased to present our directors’ remuneration report for

the year ended 31 December 2022. I joined the Comm

ittee on

1 August 2022 and assumed responsib

ity as Committee Chair

on 1 January 2023, after receiv

ing all necessary regulatory

approvals. I have the honour of taking over as Chair of the

Remuneration Committee from Christ

ine Hodgson, who has

been the Committee Chair from May 2015 until December

2022. I would like to thank Christ

ine for the s

ign

iﬁcant

contribut

ion she has made to the Comm

ittee as Chair and for

working with me through a very comprehensive handover

process.

The Group has performed well in 2022, despite continu

ing

challenges in the external environment, such as the ongoing

impact of the pandemic, the Russia-Ukraine conﬂict and ris

ing

inﬂat

ion. Th

is report provides an overview of the Committee’s

work during 2022 with respect to remuneration for executive

directors and the wider workforce. The decis

ions we have

taken were based upon careful considerat

ion of a broad

range of factors such as ris

ing

inﬂat

ion

in several of our

markets, economic diff

icult

ies faced by our colleagues, and

the need for appropriate and fair reward for our workforce.

The directors’ remuneration policy has been operated as

intended, to incent

ise performance linked to the Group’s

strategy and to be aligned with shareholder interests.

Response to 2022 AGM remuneration votes

2022 directors’ remuneration policy

The Committee engaged with shareholders during 2021 and

early 2022 and feedback from this consultation was used as

an input into the development of the 2022 directors’

remuneration policy. At the AGM, the directors’ remuneration

policy received the support of 69 per cent of shareholders. In

view of the number of opposing votes, the Committee

continued to engage with shareholders to understand their

concerns.

Shir

ish joined the Comm

ittee on 1 August 2022 and was appointed as

Committee Chair on 1 January 2023.

David jo

ined the Comm

ittee on 1 October 2022.

Byron stepped down from the Committee on 30 November 2022.

Christ

ine stepped down as Comm

ittee Chair on 31 December 2022

and from the Committee on 31 January 2023.

Robin jo

ined the Comm

ittee on 1 October 2022.

Who else attended Committee meetings in 2022?

The Group Chairman; Group Chief Executive (CEO); Group Chief

Financ

ial Ofﬁcer (CFO); Group Ch

ief Risk Ofﬁcer; Group Head, HR;

Global Head, Performance, Reward and Beneﬁts; Group General

Counsel; Group Head, Conduct, Financ

ial Cr

ime and Compliance;

Group Company Secretary.

Biograph

ical deta

ils of the Committee members can be

viewed on

pages 139 to 141

What are the main responsib

ies of the Comm

ittee?

The Committee is responsible for setting the governance

framework for remuneration for all employees, ensuring

alignment with our culture, the requirements of the UK Corporate

Governance Code and any other relevant regulations. Key

responsib

ies of the Comm

ittee include:

•

Oversight of our Fair Pay Charter includ

ing the development

and implementat

ion of remunerat

ion polic

ies and pract

ices

that are consistent with sound and effective risk management

to support the Group’s strategic prior

ies and enable

long-term sustainable success.

•

Approval of Group discret

ionary remunerat

ion, includ

ing

adjustment for risk, control and conduct matters.

•

Determin

ing and agree

ing the remuneration framework and

polic

ies for the Group Cha

irman, executive directors and other

senior executives, using the Fair Pay Charter princ

iples, tak

ing

into account wider workforce remuneration, and ensuring the

alignment of reward with culture and conduct.

The Committee has written terms of reference that can be

viewed at

sc.com/termsofreference

Directors’

remuneration report

Shir

ish Apte

(Chair)

Maria Ramos

Robin Lawther,

CBE

Christ

ine Hodgson

, CBE

Jasmine Whitbread

Scheduled meetings

Byron Grote

David Conner

Proportionate

remuneration

outcomes in the

context of strong

Group performance

Committee composit

ion

185

Standard Chartered

– Annual Report 2022

Directors’ report

During this engagement, it was clear that the key issue

impact

ing the vote outcome was the prov

ion wh

ich provides

the Committee the ﬂexib

ity to disapply time proration on the

vesting of long-term incent

ive plan (LTIP) awards for ret

ing

executive directors. While we recognise that this provis

ion

not standard practice in the UK, we have conﬁrmed to

shareholders that its applicat

ion,

if used, will not be

automatic. Each case will be considered on its own merit by

the Committee taking into account the Group’s ﬁnanc

ial and

non-ﬁnancial performance and any other relevant

circumstances. The directors’ remuneration report at that time

will contain full disclosure on the Committee’s decis

ion and

rationale, and shareholders will then have the opportunity,

through the AGM vote, to express their view on whether the

specif

ic d

isappl

icat

ion was appropriately applied or not.

The shareholders we met with conﬁrmed that they would

consider the circumstances and explanation very carefully if

the provis

ion

is ever used and vote accordingly.

2021 directors’ remuneration report

The resolution to approve the directors’ remuneration report

for 2021 received the support of 73 per cent of shareholders.

The main concern related to our response to the ﬁne on the

Group in December 2021 by the Prudential Regulation

Authority (PRA) for liqu

ity reporting and governance fail

ings.

A detailed review of the issues connected with the ﬁne had

been undertaken at the end of 2019, when the matter was ﬁrst

ident

iﬁed and a further rev

iew was carried out in 2021 when

the ﬁne was imposed. Remuneration actions were taken at a

collective and ind

idual level. We acknowledge that we

should have provided more informat

ion on the s

ign

iﬁcant

steps taken by the Committee since 2019 to address this

matter. We will take this feedback into account in our

disclosures going forward.

Having reﬂected on the views expressed by shareholders

during the engagement process, we remain satisf

ied that

the remuneration adjustments made were appropriate.

The Committee continues to be updated on risk matters

at all its meetings.

Our performance in 2022

The Group delivered a strong set of results for the year.

Underlying proﬁt before tax is up 15 per cent on 2021, reﬂecting

our resil

ient and

improv

ing ﬁnancial performance. Return on

tangible equity (RoTE) is up 120 basis points to 8 per cent, and

on track to meet our increased ambit

ion of 11 per cent by 2024.

The Group remains well capital

ised w

ith Common Equity Tier 1

(CET1) ratio at 14 per cent, the top of our stated range of 13-14

per cent.

The formulaic outcome for Group performance, based on the

balanced scorecard, was 71 per cent. Of this, 39 per cent (out

of a possible 50 per cent) related to ﬁnanc

ial performance,

includ

ing strong underly

ing income growth, income from new

business and the increase in RoTE. The remain

ing 32 per cent

related to achiev

ing non-ﬁnancial goals,

includ

ing s

ign

iﬁcant

improvement in client satisfact

ion, strong performance

against our engagement, divers

ity and

inclus

ion targets and

progress on our Stands (more informat

ion on our Stands can

be found on page 24).

Group-wide remuneration

2022 discret

ionary annual

incent

ives

Our strong performance in 2022, in the face of ongoing

external challenges, is reﬂected in increased remuneration

outcomes for the year.

The Group scorecard assessment of 71 per cent is a starting

point for determin

ing d

iscret

ionary remunerat

ion. In arriv

ing

at a distr

ibutable pool, the Comm

ittee considers addit

ional

factors such as share price performance, the impact of ris

ing

interest rates and overall affordabil

ity. The Comm

ittee also

considers carefully all risk, control and conduct matters,

includ

ing ongo

ing invest

igat

ions and any matters raised by

regulators. As ever, the Committee’s assessment also takes

into account our Fair Pay princ

iples.

Following its review of these factors, the Committee

determined that a reduction of 4 percentage points from the

ial scorecard outcome was appropriate. This resulted in a

ﬁnal Group scorecard outcome of 67 per cent for the purposes

of discret

ionary remunerat

ion and an aggregate incent

ive

pool of USD1,589 mill

ion, 16 per cent h

igher than 2021 on a

reported basis and 28 per cent higher on a same store basis.

Further details can be found on page 187.

2023 salaries

During 2022, we have seen high inﬂat

ion

in many of our

markets due to global economic challenges. In response to

this, we made targeted changes to salaries in 2022 to support

colleagues in markets faced with the most extreme economic

condit

ions.

As a result of ongoing cost of liv

ing pressures

in many of our

markets, average global salary increases of 6.6 per cent are

being awarded in 2023. Increases have been weighted

towards our junior colleagues and colleagues

in countries

where cost of liv

ing pressures are most s

ign

iﬁcant. Execut

ive

director and senior management salary increases will be

discounted by 50 per cent from the rate applicable in their

respective market.

Executive director remuneration in 2022

Annual incent

ives for execut

ive directors

In 2021, the Committee approved a change to the executive

directors’ scorecard by includ

ing an

ind

idual performance

assessment measure of 10 per cent. Financ

ial measures

continue to make up 50 per cent of the total scorecard, while

strategic and non-ﬁnanc

ial measures make up the balance of

40 per cent. These changes were covered in the 2021 report.

For the year 2022, the Committee approved scorecard

outcomes, includ

ing

ind

idual performance assessments, of

70 per cent of the maximum for Bill, and 69 per cent of the

maximum for Andy. Applying these scores to the annual

incent

ive max

imum, the Committee approved annual

incent

ives of GBP1,499,344 for B

ill, a 26 per cent increase over

2021, and GBP944,803 for Andy, a 24 per cent increase over

2021. The Committee is satisf

ied that these are appropr

iate

given the strong performance of the Group in 2022 and the

sign

iﬁcant personal contr

ibut

ions from B

ill and Andy. Further

detail can be found on pages 194 to 196.

186

Standard Chartered

– Annual Report 2022

Directors’ report

Directors’ remuneration report

2020-22 LTIP awards vesting in March 2023

The 2020–22 LTIP awards are due to vest in March 2023 with

the expected vesting currently at 22 per cent, based on

performance against strategic measures. The ﬁnal total

shareholder return (TSR) performance will be assessed in

March 2023. The projected values delivered by the 22 per cent

outcome and included in the single total ﬁgures of

remuneration for Bill and Andy are GBP1,024,408 and

GBP634,488 respectively and are based on a share price of

GBP5.78 (three-month average to 31 December 2022)

compared with the share price on award of GBP5.20, an

increase of 11 per cent.

The Committee considered the question of windfall gains

from awards granted in 2020. The share price when the

awards were granted was 15 per cent lower than the grant

price in the prior year. The Committee decided not to make

any adjustment at grant for the lower share price at the start

of the pandemic. Instead the Committee opted to review any

potential windfall gains at the end of the performance period.

Having considered the posit

ion now, the Comm

ittee is

comfortable that the share price increase over the

performance period has been broadly consistent with

improvement in underlying ﬁnanc

ial performance.

Single total ﬁgure of remuneration for 2022

The 2022 annual incent

ive and expected 2020–22 LTIP vest

ing

results in a 2022 single ﬁgure for Bill of GBP5,483,442 and for

Andy of GBP3,412,390. This represents a year-on-year increase

of 16 and 13 per cent, respectively, reﬂecting the strong Group

performance in 2022.

2022 single total ﬁgure of remuneration

(£000)

5,483

4,740

3,926

2022

Bill Winters

2021

2020

3,412

3,032

2,452

2022

Andy Halford

2021

2020

1,000

2,000

3,000

4,000

6,000

5,000

Salary (cash and shares)

Pension

Beneﬁts

Annual incent

ive

LTIP

A sign

iﬁcant port

ion of both Bill’s and Andy’s total

remuneration is delivered in shares which will be released over

the next eight years. The deferral, retention and recovery

provis

ions of the

ir pay continue to reinforce alignment of their

incent

ives w

ith shareholder interests and the Group’s long-

term performance. Both Bill and Andy continue to exceed their

shareholding requirements (see page 199 for further details).

Executive directors’ remuneration in 2023

In accordance with the approved remuneration policy, the

Committee considers annual salary increases for executive

directors taking account of any increase in scope or

responsib

ity, market competit

iveness, and salary

increases

across the Group.

In line with our approach for all senior management, the

Committee has awarded salary increases of 3.4 per cent to Bill

and Andy, 50 per cent lower than the average increase

awarded to the other UK employees. This increases their

salaries in 2023 from GBP2,434,000 to GBP2,517,000 and from

GBP1,556,000 to GBP1,609,000 respectively, effective from 1

April.

In September 2022, the UK Government announced measures

to remove the cap on banker incent

ives

imposed in 2014. On

19 December 2022, the PRA issued a consultative paper on this

subject. Should the cap be removed as is expected we will

consult extensively with shareholders before making changes

to our remuneration policy.

2023-25 LTIP awards to be granted in March 2023

Having considered 2022 performance, the Committee has

approved LTIP awards for the period 2023-25 of GBP3,212,880

and GBP2,053,920 to Bill and Andy respectively, representing

132 per cent of their salary. As in the past, these are

performance linked awards, and vesting will depend upon

achiev

ing spec

ied performance targets by the end of the

three year review period (2025). Following the review period,

the shares will vest pro-rata from years three to seven. There is

an addit

ional retent

ion period of 12 months after vesting.

Performance will be assessed based on RoTE with a CET1

underpin, TSR relative to a deﬁned peer group, and the

achievement of sustainab

ity and other measures, includ

ing

our Stands, that are aligned with the Group’s strategic

prior

ies.

Discuss

ions w

ith shareholders were held in January 2023 on

the development of these performance measures and targets

and the input received was incorporated into the ﬁnal

decis

ions by the Comm

ittee. Further details on the 2023–25

LTIP awards and the performance measures and targets can

be found on pages 199 and 200.

In the rest of this report we present the disclosures required by

regulations, as well as addit

ional

informat

ion to expla

in how

remuneration for our executives aligns with our strategy,

shareholder interests and wider workforce pay. In making

remuneration decis

ions for 2022 and beyond, we have also

been mindful of the experience of our wider stakeholder

group.

I would like to thank Christ

ine for her very s

ign

iﬁcant

contribut

ions as Cha

ir of the Committee. I would also like to

thank my fellow Committee members for the work they have

put into the Committee, and our shareholders for their

ongoing support and engagement.

Shir

ish Apte

Chair of the Remuneration Committee

(All disclosures in the directors’ remuneration report are unaudited unless

otherwise stated. Disclosures marked as audited should be considered audited

in the context of the ﬁnanc

ial statements as a whole)

187

Standard Chartered

– Annual Report 2022

Directors’ report

Remuneration at a glance

Financ

ial KPIs

Proﬁt before tax

$4,762

15%

Return on tangible equity

8.0

120

bps

Underlying basis

Common Equity Tier 1 ratio

14.0

bps

The top of our target range of 13-14%

Total shareholder return

41.4

43.4ppt

Executive directors’ remuneration

Non-ﬁnancial KPIs

Divers

ity and

inclus

ion:

women in senior roles

32.1

1.4ppt

Sustainab

ity Aspirat

ions

met or on track

85.7

2.8

ppt

Group-wide remuneration

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2022

2021

2020

990

1,367

1,589

Total discret

ionary remunerat

ion, 2020–2022

($m)

Share ownership as % of salary

(at 31 December 2022)

637%

441%

200%

250%

Bill Winters

Requirement

Actual

Andy Halford

1,499

2,142

945

1,369

Bill Winters

(70% of maximum)

Andy Halford

(69% of maximum)

Bill Winters

(22% of maximum)

Andy Halford

(22% of maximum)

Bill Winters

(66% of maximum)

Andy Halford

(65% of maximum)

2022 annual incent

ive

(£000)

1,024

3,213

634

2,054

2020–22 LTIP outcome

(£000)

5,483

8,314

3,412

5,256

2022 outcome

2022 single ﬁgure

(£000)

Maximum opportunity

2022 Group scorecard outcome

Financ

ials

39/50

Clients

8/15

Enablers

9/10

Risk and controls

9/15

2022 Group scorecard

outcome

67%

Sustainab

ity

5/10

Progress against our Stands

+1ppt

Discret

ionary reduct

ion

to formulaic outcome

-4ppt

Consider

ing all factors, the

Committee determined that a

reduction of 4 percentage points

(ppt) to the formulaic outcome

(71 per cent) was appropriate,

resulting in an outcome of

67 per cent for the purposes

of discret

ionary remunerat

ion.

188

Standard Chartered

– Annual Report 2022

Directors’ report

Directors’ remuneration report

The forward-looking remuneration policy for executive directors and independent non-executive directors (INEDs) was

approved at the AGM held on 4 May 2022 and applies for three years from that date. A summary of the executive director

policy, includ

ing the key remunerat

ion elements, is set out below and is provided for informat

ion only. The full pol

icy, includ

ing

recruitment and leaver provis

ions, can be found on pages 161 to 166 of the 2021 Annual Report and on our webs

ite.

Our approach to remuneration is consistent for all employees and is designed to create alignment with our Fair Pay Charter

princ

iples, wh

ich apply globally. However, our pay structures may vary according to location (to comply with local requirements)

and, therefore, the table below explains the alignment between the executive directors and our UK workforce, being the most

relevant market.

The full policy is available on our website at

sc.com

Fixed remuneration

Policy

Alignment with UK employees

Salary

Set to reﬂect the role,

and the skills and

experience of the

ind

idual.

•

Delivered part in cash and part in shares.

•

To mainta

in al

ignment with shareholders, the

share element is subject to a holding period of

ﬁve years, with 20 per cent being released

annually.

•

The process of setting and annually review

ing

salaries against market informat

ion

is the same

for all employees.

•

For all other UK employees, salary is paid 100 per

cent in cash in line with market practice.

Pension

To facil

itate long-term

retirement savings.

•

For current directors, an annual pension

allowance or contribut

ion of 10 per cent of salary

is payable.

•

For new executive directors, 10 per cent of the

cash element of salary only will be payable.

•

Pension is set at 10 per cent of salary for both the

executive directors and other UK employees,

aligned with the provis

ions of the UK Corporate

Governance Code.

Beneﬁts

A competit

ive beneﬁts

package to support

executives to carry out

their duties effectively.

•

A range of beneﬁts is provided includ

ing hol

iday

and sick pay, a beneﬁts cash allowance, private

medical insurance, life insurance, ﬁnanc

ial adv

ice

and tax return preparation. A car and driver or

other car-related service is available to executive

directors, which is a role-based provis

ion due to

security requirements.

•

Executive directors receive a lower cash beneﬁts

allowance than other UK employees as a

percentage of their salary.

•

Core beneﬁts are aligned with all employees.

Some addit

ional, role-spec

ic beneﬁts are

received by the current executive directors.

•

Employees are elig

ible for tax return preparat

ion

in the year of an internat

ional relocat

ion.

Variable remuneration

Policy

Alignment with UK employees

Annual incent

ive

Remuneration based

on measurable

performance criter

linked to the Group’s

strategy and assessed

over a period of one

year.

•

Annual incent

ive awards are del

ivered as a

combinat

ion of cash and shares subject to

holding requirements, and deferred shares.

•

The maximum value of an annual incent

ive

award cannot exceed 88 per cent of salary and

can be any amount from zero to the maximum.

•

Awards are determined by the Committee, based

on the assessment of the Group scorecard which

contains ﬁnanc

ial (at least 50 per cent of the

scorecard) and strategic measures, as well as the

personal performance of the ind

idual.

•

The annual incent

ive plan

is operated for all

employees, paid in cash to certain lim

its w

ith the

balance deferred over at least three years in

shares and/or cash.

•

The same Group scorecard is used in assessing

incent

ives for execut

ive directors and other UK

employees.

LTIP

LTIP awards are granted

to senior executives

who have the abil

ity to

inﬂuence the long-term

performance of the

Group.

Awards are

performance

dependent based on

measurable, long-term

criter

ia.

•

LTIP awards are granted annually, based on

performance in the relevant year.

•

The maximum value of an LTIP award cannot

exceed 132 per cent of salary and can be any

amount from zero to the maximum.

•

Following the grant of awards, performance is

measured over three years with no award vesting

before the third anniversary of the grant.

•

LTIP awards are delivered in shares and subject to

holding requirements.

•

Members of the Management Team are also

elig

ible for LTIP awards, granted annually and

assessed on the same performance measures

and targets, with awards typically at a lower

level.

•

LTIP awards may also be granted to other

employees in the Group which may be subject to

the same or different performance condit

ions.

Summary of the directors’ remuneration policy

189

Standard Chartered

– Annual Report 2022

Directors’ report

Other remuneration

Policy

Alignment with UK employees

Sharesave

Provides an opportunity

for all employees to

invest voluntarily in the

Group.

•

Partic

ipants are able to open a sav

ings contract

to fund the exercise of an option over shares.

•

The option price is set at a discount of up to

20 per cent of the share price at the date of the

inv

itat

ion to partic

ipate.

•

Savings per month of between £5 and the

maximum set by the Group, which is currently

£250.

•

All employees are elig

ible to part

ipate

in the

Sharesave plan, which enables employees to

share in the success of the Group at a discounted

share price.

Shareholding

requirements

Provides alignment with

the interests of

shareholders during

employment.

•

Executive directors are required to hold a

specif

ied level of shares, to be bu

ilt up over a

reasonable time frame from the date of

appointment.

•

Under the policy, in 2022, the CEO and the

CFO are required to hold 250 per cent and

200 per cent of salary in shares, respectively.

• Post-employment shareholding requirement

in place for two years following cessation

of employment. The amount to be held is

as described above or, if lower, the actual

shareholding on departure.

•

Formal shareholding and post-employment

shareholding requirements are operated for the

executive directors only.

•

However, other employees hold shares as part of

the deferral and retention requirements.

Delivery of executive remuneration over time

The diagram shows how a portion of Bill’s salary, annual incent

ive and long-term

incent

ive

is paid in shares which are released

up to eight years following grant, with the ﬁnal component of pay granted in 2023 being released in 2031. This creates strong

alignment of interests between executives and shareholders to create long-term value. On a maximum opportunity basis, Bill’s

total remuneration is delivered 67 per cent in shares (includ

ing those subject to performance cond

ions) and 33 per cent

in cash.

Annual

incent

ive and

LTIP shares

are subject to

clawback for

up to 10 years

from grant

20%

LTIP

2023

2024

2025

2026

2027

2028

2029

2030

2031

20%

Annual

incent

ive

Cash and

Vesting based on performance

measured over 3 years

LTIP shares vest pro rata

over years 3 to 7 with addit

ional

retention period of 12 months

50%

Beneﬁts

Pension

100%

Salary

Cash and

100%

10%

50%

Salary shares released pro rata over 5 years

LTIP shares

Annual incent

ive shares

Salary shares

Annual incent

ive cash

Salary cash

20%

190

Standard Chartered

– Annual Report 2022

Directors’ report

Directors’ remuneration report

Alignment with our culture

Our performance and reward framework supports us in

embedding a high-performance culture and aligns with our

princ

iple that colleagues should share

in the success of the

Group. For example:

•

All remuneration decis

ions are grounded

in our Fair Pay

Charter, with one consistent set of princ

iples for the w

ider

workforce and executive directors (further details on our Fair

Charter are on page 193).

•

Employee performance is assessed based on what is

achieved and how it is achieved in line with our valued

behaviours. Our remuneration structure and polic

ies ensure

that behaviours consistent with these values are

appropriately recognised and rewarded.

•

To support this approach, the wider workforce and our

executive directors partic

ipate

in continuous performance

management and feedback.

•

Our LTIP assessment measures include a conduct gateway

to further support this.

Alignment with our strategy

Remuneration decis

ions made across the Group,

includ

ing for

our executive directors, align with our strategic prior

ies and

our Stands, includ

ing our comm

itment to sustainable social

and economic development through:

•

Performance measures in our Group and LTIP scorecards are

designed to drive achievement of the ﬁnanc

ial and

strategic goals that will deliver long-term sustainable value

for our stakeholders.

•

Sustainab

ity and our Stands are key considerat

ions for

setting and measuring ﬁnanc

ial and strateg

ic targets.

Alignment with our approach to risk and control

The determinat

ion of remunerat

ion policy and outcomes

align with the Group’s risk and control framework (see page 211

for further details). In particular:

•

The Group and LTIP scorecards include risk and control

measures.

•

In addit

ion, the Comm

ittee considers further discret

ionary

risk adjustment in respect of the Group scorecard outcome

and has a track record of applying discret

ion appropr

iately.

•

The rules of the LTIP also give the Committee necessary

discret

ion to further adjust vest

ing outcomes if the

Committee considers that the outcome is incons

istent w

ith

underlying business performance.

•

Long-term sustainable performance is supported through

the abil

ity to make adjustments to var

iable remuneration

for risk, control and conduct behaviours, the deferral of

variable remuneration, and the abil

ity to apply malus and

clawback where appropriate.

•

The incent

ives for employees engaged

in Audit, Risk and

Compliance functions are set independent of the

businesses they oversee.

Remuneration alignment

How does our directors’ remuneration policy

address other key features set out in the UK

Corporate Governance Code?

Proportional

ity

•

In line with our commitment to pay for performance, a

sign

iﬁcant proport

ion of executive director pay is

delivered through incent

ives based on performance

metrics aligned with our strategy.

•

Executive directors’ interests are further aligned with

long-term shareholder interests through the deferred

release of salary, annual incent

ive and LTIP awards over

a period ranging from one to eight years. Incentive

awards are also subject to clawback provis

ions for up

to 10 years from grant.

•

Addit

ional sharehold

ing requirements are in place for

executive directors requir

ing them to bu

ild and

mainta

in a s

ign

iﬁcant sharehold

ing in Company shares

while in employment and, for a period of two years

post-employment. Both executive directors currently

exceed their respective shareholding requirements.

Predictab

ity

•

The range of possible rewards to ind

idual executive

directors is set out in the scenario charts on page 203

where we also demonstrate the impact of a 50 per cent

share price appreciat

ion over the three-year

performance period of the LTIP.

•

Maximum awards levels for all incent

ives are capped at

220 per cent of salary and cannot exceed regulatory

lim

its. Other than vest

ing levels which are driven by

performance outcomes, the only source of variat

ion

in ﬁnal payouts is that a sign

iﬁcant part of

incent

ive

awards is delivered in shares and is linked to the

share price.

Simpl

ity and clarity

•

Simpl

ity is a key driver for the structure of our

executive pay, subject to regulatory requirements

aris

ing from operat

ing as a UK regulated bank.

•

Addit

ional

informat

ion

is included on the alignment of

executive and wider workforce pay on pages 188 and

189 in the summary of the directors’ remuneration policy

in support of our commitment to clarity.

191

Standard Chartered

– Annual Report 2022

Directors’ report

The Committee is responsible for setting the princ

iples,

parameters and governance framework for the Group’s

remuneration policy and overseeing its implementat

ion. Th

includes determin

ing the framework and pol

ies for the

remuneration of the Group Chairman, the executive directors

and other senior management. The Committee also oversees

the alignment of reward, culture, the strategic prior

ies and

our Stands.

The Committee has written terms of reference that can

be viewed at

sc.com/termsofreference

Shareholder voting

The table below shows the votes cast

at the AGM in May

2022 on remuneration related matters.

For

Against

Withheld

Advisory vote on the

2021 remuneration

report

408,108,378

73.24%

149,094,072

26.76%

55,027,858

Bind

ing vote to

approve the

2022 directors’

remuneration policy

404,531,068

68.81%

183,344,607

31.19%

24,340,637

Number of votes is equal to number of shares held

The Remuneration Committee engaged extensively with

shareholders on the development of the directors’

remuneration policy in 2021 and early 2022. Subsequently,

following the voting outcome at the AGM, the Committee

re-engaged with shareholders as explained on pages 184

and 185 and in our update statement in September 2022.

Advice to the Committee

The Committee was assisted in its considerat

ions by PwC,

who were formally re-appointed as the Committee’s

remuneration adviser in 2021. It is the Committee’s practice to

undertake a detailed review of potential advisers every three

or four years.

PwC is a signatory to the voluntary Code of Conduct in

relation to remuneration consulting in the UK. PwC also

provides professional services to the Group in the ordinary

course of business, includ

ing assurance, adv

isory, tax advice

and certain services relating to Human Resources. The

Committee considered PwC’s role as an adviser to the Group

and determined that there was no conﬂict or potential conﬂict

aris

ing. The Comm

ittee is satisf

ied that the adv

ice it receives is

objective and

independent. The total fee paid to PwC (on an

agreed fee basis) was £104,208, which includes advice to the

Committee relating to executive directors’ remuneration and

regulatory matters.

The Group Chief Financ

ial Ofﬁcer and Group Ch

ief Risk Ofﬁcer

provided the Committee with regular updates on ﬁnance and

risk matters. The Committee recognises and manages any

conﬂicts of interest when receiv

ing v

iews from executive

directors or senior management on remuneration proposals

and no ind

idual is involved in decid

ing the

ir own

remuneration.

Committee effectiveness review

The feedback from the externally conducted 2022 Committee

effectiveness review was posit

ive. The key po

ints raised and

the action plan for 2023 are summarised below.

The Remuneration Committee

Key observations from the 2022 external

effectiveness review

The key points highl

ighted by the rev

iew include:

•

The Committee is recognised for dealing with diff

icult

and sensit

ive

issues, and the work the Committee Chair

does in consulting with investors and attending subsid

iary

RemCo meetings is appreciated.

•

The close coordinat

ion of remunerat

ion and sustainab

ity

issues, strengthened by cross-membership of the

Remuneration Committee and Culture and Sustainab

ity

Committee provides helpful alignment.

•

Posit

ive commentary was g

iven on the support received

from internal special

ists (e.g. human resources, ﬁnance,

risk) and PwC (the external advisers).

•

Non-Committee members feel well informed of the key

issues and areas of discuss

ion.

2023 Action Plan

The 2023 Action Plan for the Committee reﬂects the

recommendations from the effectiveness review and

continues to build on the progress made last year:

•

Consider how PwC can best provide further ins

ight

on how the Group’s more sensit

ive remunerat

ion

proposals will be received by investors.

•

Consider how non-Committee members can

become more informed on the Committee’s debate,

while protecting conﬁdent

ial

ity.

192

Standard Chartered

– Annual Report 2022

Directors’ report

Directors’ remuneration report

Committee activ

ies in the year

19 Jan

31 Jan

27 Jul

29 Sep

24 Nov

Executive directors’ remuneration

Review of the directors’ remuneration policy and implementat

ion

Fixed and variable remuneration

Senior management remuneration

Joiners and leavers

Fixed and variable remuneration

All employee remuneration

Group-wide discret

ionary remunerat

ion

Outcomes from the annual performance and reward review

Incentive performance measures, targets and outcomes

Group-wide reward, and the Fair Pay Charter

Reward governance

Considerat

ion of r

isk, control and conduct matters

Identif

icat

ion of material risk takers

Engagement with stakeholders and regulatory, investor and polit

ical matters

The Committee held an addit

ional strategy meet

ing to discuss the progress of the Group’s Future of Work in

iat

ive,

its Employee

Value Proposit

ion and to

ident

ify ongo

ing areas of focus and further development. The Committee considered the changes to

tradit

ional ways of work

ing and discussed approaches to attracting and retain

ing future talent to dr

ive a high-performance

culture.

Understanding the views of our workforce

The Committee recognises the importance of seeking feedback from colleagues on remuneration to inform decis

ion-

making. This year, 87 per cent of colleagues responded to the Group’s engagement survey, which sought to understand

colleague sentiment in respect of performance management, the process of giv

ing and rece

ing feedback and reward.

Key ins

ights were presented to the Comm

ittee for discuss

ion, and results were shared w

ith the workforce along with a

summary of actions being taken.

The Board engages with and listens to the views of employees. In 2022, the Board hosted informal events with employees

which provided an opportunity for the Board to understand how the Bank’s strategy and culture are being lived and

embedded across the Group.

Further informat

ion on our workforce engagement framework

is included in our Culture and Sustainab

ity Committee

report on pages 176 to 178.

193

Standard Chartered

– Annual Report 2022

Directors’ report

Our Fair Pay Charter

The Fair Pay Charter is the compass for our performance and reward strategy and outlines how we aim to ensure fairness

in our approach to reward. It sets out the princ

iples that underp

in our performance and reward strategy and associated

decis

ions –

includ

ing prov

ing a sufﬁcient level of ﬁnancial secur

ity, being competit

ive aga

inst the market, paying for

performance, ensuring consistency and transparency in outcomes, supporting ﬂexib

ity and wellbeing of colleagues, and

rewarding colleagues in a way that is free from unjust bias.

Together with broader human resources in

iat

ives support

ing divers

ity and

inclus

ion, organ

isat

ional and

ind

idual

development and the recognit

ion of h

igh performance, we are build

ing a culture of excellence where, through

innovat

ion

and continuous improvement, each and every one of our colleagues can fulﬁl their potential.

Full details of the Charter can be found in our Fair Pay Report here:

sc.com/fairpayreport

Key highl

ights

include:

Financ

ial secur

ity during the cost of liv

ing cr

During 2022, supporting colleagues’ ﬁnanc

ial secur

ity in the

face of widespread cost of liv

ing challenges has been a

prior

ity. We have taken a number of act

ions to support this,

includ

ing

interven

ing

in markets faced by the most extreme

economic circumstances, such as Sri Lanka, Pakistan and

Zimbabwe, to address the challenges facing our more jun

ior

employees in particular. We have also set aside addit

ional

funding for 2023 salary increases, again prior

ing junior

colleagues.

Redeﬁning our approach to manage and

reward performance

In 2022, we launched a new approach to motivate

outperformance and deliver a culture of excellence by

redeﬁning how we manage, recogn

ise and reward

performance across the Group. With this approach we are

creating a more transparent, real-time feedback culture

underpinned by continuous feedback, coaching, and open

two-way performance and development conversations with

people leaders.

We also introduced our Leadership Agreement, designed to

set clear expectations of the leadership standards needed to

drive and accelerate our performance, focused around

behaviours that aspire, insp

ire and dr

ive execution.

Divers

ity and pay

Since 2017, we have published gender pay gap analysis for the

UK, Hong Kong, Singapore, UAE and the US. In 2022, for the

ﬁrst time, we have extended our divers

ity pay analys

is to

include ethnic

ity pay gap report

ing in the UK and US. These

analytics, which are included in our Fair Pay Report, combined

with local ins

ights on the un

ique dynamics and talent context

of each market, enable us to better understand the strengths

and gaps in the organisat

ion, and to develop act

ion plans to

tap into the potential of a truly diverse and inclus

ive

workforce.

Fair Pay Charter princ

iples

We commit to pay a liv

ing wage

in all our markets

and seek to go beyond compliance with min

imum

wage requirements.

We provide an appropriate mix of ﬁxed and variable

pay and a core level of beneﬁts to ensure a min

imum

level of earnings and security to colleagues and to

reﬂect the Group’s commitment to wellbeing.

We support colleagues in working ﬂexibly, in ways

that balance both business needs and their personal

circumstances, and provide colleagues with the

opportunity to select the combinat

ion and level of

beneﬁts that is right for them.

Pay is well admin

istered w

ith colleagues paid

accurately, on time and in a way that is convenient

for them.

We provide a competit

ive total ﬁxed and var

iable

pay opportunity that enables us to attract, motivate

and retain colleagues based on market rates for their

role, location, performance, skills and experience.

The structure of pay and beneﬁts is consistent for

colleagues based on their location and role, with a

clear rationale for exceptions.

We are committed to rewarding colleagues in a way

that is free from discr

inat

ion on the bas

is of

divers

ity, as set out

in our Group Code of Conduct.

We ensure pay decis

ions reﬂect the performance of

the ind

idual, the business they work in and the

Group, and recognise the potential, conduct,

behaviours and values demonstrated by each

ind

idual.

We set clear expectations for how colleagues are

rewarded and the princ

iples gu

ing dec

ions,

includ

ing clear personal objectives and feedback.

We provide clear communicat

ion of pay and

performance decis

ions, and seek feedback and

input

from colleagues on our pay structures and outcomes.

Group-wide remuneration

194

Standard Chartered

– Annual Report 2022

Directors’ report

Directors’ remuneration report

Directors’ remuneration in 2022

This section, which is subject to an advisory vote at the 2023 AGM, sets out how remuneration was delivered to the executive

directors in 2022 under the remuneration policy approved by shareholders in 2022. It also sets out the 2022 fees paid to the

Group Chairman and the INEDs.

Annual incent

ive awards for the execut

ive directors (audited)

Annual incent

ive awards for execut

ive directors are based on the assessment of the Group scorecard and personal

performance, embedded into the scorecard assessment for the executive directors in 2022, in line with the remuneration policy.

The personal element accounts for a maximum weight

ing of 10 per cent, w

ith ﬁnanc

ial measures cont

inu

ing to make up to

50 per cent and the strategic measures accounting for up to 40 per cent. The Committee has also considered progress

demonstrated against our Stands in the determinat

ion of the overall scorecard outcome. The Group scorecard

is used for all

elig

ible employees,

includ

ing the execut

ive directors, to mainta

in al

ignment and a shared sense of purpose.

For Bill and Andy, the Committee considered Group performance, ind

idual performance, and risk, control and conduct-related

matters (with input from Risk and other control functions). The Committee considered that each director had exhib

ited an

appropriate level of conduct and was deemed to have met the gateway requirement to be elig

ible for an

incent

ive.

The annual incent

ive scorecard outcome for B

ill and Andy is summarised below:

Executive director scorecard outcomes

Weight

ing

Bill Winters

outcome

Andy Halford

outcome

Financ

ial

50%

39%

Strategic

40%

25%

Personal performance

10%

Our Stands

Total

74%

73%

Committee adjustment (see page 185 for further details)

(4%)

Final scorecard for determin

ing annual

incent

ives

70%

69%

Maximum annual incent

ive opportun

ity (£000)

2,142

1,369

Annual incent

ive outcome (£000)

1,499

945

Set out below are the assessments of performance in 2022 for the Group (ﬁnanc

ial, strateg

ic and our Stands) and for Bill

and Andy.

Assessment of the 2022 scorecard – ﬁnancial measures

Weight

ing

Threshold (0%)

Target

Maximum (100%)

Achievement

Outcome

Income

10%

$15.6bn

$14.4bn

$15.0bn

$16.3bn

10%

Costs

10%

$9.9bn

$10.7bn

$10.2bn

$10.4bn

Operating proﬁt

$4.4bn

$3.6bn

$4.0bn

$4.8bn

RoTE

with a CET1

underpin of the higher of

13% or the min

imum

regulatory requirement

20%

7.0%

5.8%

6.4%

20%

Growth of high-quality

liab

ies m

$11.5bn

$3.8bn

$7.7bn

$(17.8)bn

Total income and operating proﬁt are on an underlying basis. Certain items are presented as restructuring and other items that are excluded from the underlying

results of the Group. These are income, costs and impa

irment and result

ing operating proﬁt relating to ident

iﬁable bus

iness units, products or portfolios from the

relevant dates that they have been approved for restructuring, disposal, wind-down or redundancy. This includes realised and unrealised gains and losses from

management’s decis

ions to d

ispose of assets, as well as residual income, direct costs and impa

irment of related legacy assets of those

ident

iﬁable bus

iness units,

products or portfolios. See Note 2 on page 350.

Cost achievement has been adjusted by USD0.2 bill

ion, to exclude add

ional performance related pay

in relation specif

ically to overach

ievement of proﬁt target,

which was highl

ighted

in our Q1 earnings release.

Underlying RoTE represents the ratio of the current year’s proﬁt available for distr

ibut

ion to ordinary shareholders, to the weighted average ordinary shareholders’

equity less the average goodwill and intang

ibles for the report

ing period. Underlying RoTE normally excludes regulatory ﬁnes but, for remuneration purposes, this

would be subject to review by the Committee.

4 The CET1 underpin was set at the higher of 13 per cent or the min

imum regulatory level at 31 December 2022. In add

ion, the Comm

ittee has the discret

ion to take

into account at the end of the performance period any changes in regulatory capital and risk-weighted asset requirements that might have been announced and

implemented after the start of the performance period.

Init

iat

ive that targets growth of efﬁc

ient and regulatory fr

iendly deposits to improve quality of our funding mix (liab

ies) to support the Group’s growth

aspirat

ions. The deﬁnit

ion of high quality liab

ies w

ith

in the 2022 scorecard excludes term depos

its, therefore the achievement of USD(17.8)bill

ion excludes the

migrat

ion to Term Depos

its from CASA balances driven by the high interest rate environment.

195

Standard Chartered

– Annual Report 2022

Directors’ report

Assessment of the 2022 scorecard – strategic measures

1,2

Clients (network, afﬂuent, mass)

Target

Assessment

•

Improve client satisfact

ion rat

ing.

•

Deliver growth in qualif

ied cl

ients across Afﬂuent, Private

Banking, and Wealth Management activ

ity across top

11 afﬂuent countries and increase the number of active

personal clients.

•

Deliver network income growth in Corporate, Commercial &

Institut

ional Bank

ing.

•

Grow value of Dig

ital Ventures.

•

Client satisfact

ion outperformed across all bus

inesses.

•

Afﬂuent and Wealth Management adversely impacted by the

pandemic restrict

ions, the onset of the Russ

ia-Ukraine conﬂict

and increases in interest rates to tackle inﬂat

ion.

•

Network income growth exceeded targets.

•

Dig

ital Ventures

impacted by market volatil

ity and delays

external approvals.

Weight

ing

12%

Outcome

Sustainab

ity

Target

Assessment

•

Progress against the Group’s aim to achieve net zero by 2050.

•

Improve community engagement through employee

volunteering partic

ipat

ion.

•

Net zero targets progressing well with delivery of green and

transit

ion ﬁnance on track.

•

Outperformance of community engagement from all markets

includ

ing reg

ional campaigns.

Weight

ing

Outcome

Enablers (innovat

ion, new ways of work

ing and people)

Target

Assessment

•

Grow proportion of dig

itally

iated transactions and dig

ital

sales adoption.

•

Improve end-to-end speed to deliver change (from idea

formation to commercial

isat

ion).

•

Develop human capital by improv

ing employee engagement,

divers

ity and

inclus

ion.

•

Dig

ital adopt

ion below target impacted by external approvals

and go live delays.

•

Speed to deliver targets achieved.

•

Improved employee inclus

ion and engagement outcomes and

an increase in number of females in senior roles by 1.4ppt.

Weight

ing

Outcome

Risk and controls

Target

Assessment

•

Improve risk and control governance effectiveness.

•

Successfully deliver milestones with

in the cyber r

isk

management plan.

•

Non-ﬁnancial r

isk index improved in 2022, reﬂecting a

reduction in non-ﬁnanc

ial r

isk exist

ing

in the Bank.

•

Progress made in reducing risk across key informat

ion and

cyber security domains.

Weight

ing

12%

Outcome

A maximum/min

imum performance threshold was set for each performance measure. For strateg

ic measures, the Committee used its judgement to determine

scorecard outcomes with

in th

is range (with a higher than 50 per cent outcome for performance above target and a lower than 50 per cent outcome for below

target performance).

The Committee considered the performance against the ESG metrics with

in the people and purpose element of the annual

incent

ive scorecard and 2020–22 LTIP

strategic measures, as well as the Group’s wider progress on ESG metrics, and determined that the outcomes were appropriate and that the incent

ive structures

do not raise ESG risks by motivat

ing

irrespons

ible behav

iour.

Assessment of the 2022 scorecard – our Stands

Our Stands: Accelerating Zero; Lift

ing Part

ipat

ion; Resetting Globalisat

ion

A holist

ic assessment of the embedd

ing of our Stands showed good progress has been made across the Group.

See page 24 for further details and examples of the in

iat

ives and programmes that have been

implemented.

Assessment of the 2022 scorecard – personal performance

The Committee considers areas of responsib

ity together with progress against key object

ives for the year and personal

contribut

ion to the Group scorecard outcome. Th

is element focuses on measures that reﬂect real personal impact, such as

transformation of processes and improv

ing the culture w

ith

in the Bank. Key ach

ievements against Bill’s and Andy’s personal

objectives are summar

ised in the table below.

Bill Winters

Bill has continued to deliver as an authentic and trusted leader. The strong ﬁnanc

ial and strateg

ic performance delivered by the

Bank in 2022, our best performance over the past ﬁve years despite challenging circumstances, has been sign

iﬁcantly

inﬂuenced

by Bill’s personal drive and contribut

ion throughout the year.

Goal

Assessment

Execution and

prior

isat

ion

•

Champion new ways of

working across the Group

to maxim

ise product

ity

gains

•

Bill has taken action throughout the year to simpl

ify and champ

ion new, collaborative ways of working and to

drive ambit

ion and execut

ion.

•

His personal focus results in success for the Group with proven examples includ

ing performance

in China, UAE,

India and Korea.

•

He also led the strategic effort to realign the bank’s Africa and Middle East footprint by exit

ing some markets

and entering or increas

ing our presence

in high potential markets, such as Saudi Arabia and Egypt.

•

He has overseen and inﬂuenced many enhancements in our internal capabil

ies which are contribut

ing to

improved performance.

•

For example, Bill set up a Global Strategy Delivery Squad, comprised of senior and experienced leaders from

across the organisat

ion, to accelerate progress aga

inst our strategic object

ives and ﬁnd solut

ions to embed

other enterprise-wide strategic enablers.

196

Standard Chartered

– Annual Report 2022

Directors’ report

Directors’ remuneration report

Culture and

transformation

•

Simpl

ify processes and

inst

il a h

igh-performance

culture.

•

Increase divers

ity and

inclus

ion proﬁle and

promote action, both

internally and externally.

•

Bill drives our culture, promoting the core values of the bank, includ

ing d

ivers

ity and

inclus

ion, susta

inab

ity and

our Stands.

•

He was instrumental in the development of our new performance management process, driv

ing our amb

ion

for a truly high-performance environment.

•

Bill has been a key advocate of our drive towards a culture of excellence, leading by example and mainta

ing a

focus on risk and control issues, ensuring risk ownership across the business.

•

Our Group Management Team is more than 50% female with Mary Huen jo

ing in 2022 and Sadia Ricke

join

ing as Chief Risk Ofﬁcer in 2023.

•

Through our employee survey, we have seen our Manager Net Promotor Score (mNPS) at its highest ever; there

has also been an increase in the employee Net Promoter Score (eNPS) and scores related to the Bank exceeding

employees’ expectations.

Innovation

•

Drive innovat

ion

in new

and core businesses.

•

Bill has driven innovat

ion

in new and core businesses, both in our new ventures and in the success of our dig

ital

assets.

•

30+ ventures in the portfolio across 10+ markets, 7 of which were commercial

ised

in 2022. Examples include the

successful launch of Nexus (Indonesia), Solv (Kenya) and Trust Bank (Singapore).

•

Dig

ital capab

ies have been launched in CPBB to support wealth education.

•

During 2022, both Zodia Custody and Zodia Markets commenced business as a key step in provid

ing

inst

itut

ional client support for dig

ital assets.

Key stakeholder

interact

ion

•

Spend more time with

clients and investors to

increase impact

•

Fulﬁl external roles to

improve credentials on

global issues.

•

Bill has successfully increased his level of engagement with key clients, investors and other stakeholders

throughout the year. Investors are very supportive of him as evidenced by a recent investor perception survey.

•

Bill holds roles in various important external fora which enhances the Bank’s internat

ional

image and

reputation, posit

ion

ing us as a thought leader and relevant actor in sustainable ﬁnance, innovat

ion and d

ital

assets, in particular.

•

He currently co-chairs the B20 India Taskforce on Financ

ing for Global Econom

ic Recovery and is UK Chair of the

India-UK Financ

ial Partnersh

ip.

Sustainab

ity

• Promote our

sustainab

ity credentials.

•

Bill takes a leadership posit

ion

in various banking and markets efforts to address the climate challenge.

•

He has mainta

ined a h

igh-proﬁle focus on sustainab

ity generally and on carbon markets in particular.

Partnerships include Advanced Market Commitment for the African Carbon Markets Init

iat

ive (ACMI), acting as

a princ

ipal

in the Glasgow Financ

ial All

iance for Net Zero (GFANZ) and involvement in the Indonesian and

Vietnamese Just Energy Transit

ion Partnersh

ips (JETPs).

•

Bill created the Group’s Chief Sustainab

ity Ofﬁcer role and played a key role in hir

ing Mar

isa Drew for the

posit

ion, and

in refreshing our sustainab

ity strategy.

Weight

ing

10%

Outcome

Andy Halford

During 2022, Andy has continued to be a strong partner to Bill, the Management Team and the Board. The strong ﬁnanc

ial

results delivered by the Bank in 2022, despite challenging condit

ions, have been s

ign

iﬁcantly

inﬂuenced by Andy’s focus and

commitment to improve the bank.

Goal

Assessment

Transformation and

execution

• Deliver major

programmes.

•

Andy led on the implementat

ion of the strateg

ic actions we set out publicly in February 2022.

•

Sign

iﬁcant progress made w

ith

in our strategy funct

ion resulting in an enhanced focus on strategy across the

Group.

•

He was instrumental in the assessment that resulted in the decis

ion to streaml

ine the bank’s African presence.

•

Andy has personally driven the implementat

ion of a mult

i-year programme to fundamentally upgrade the

quality of the ﬁnanc

ial systems be

ing used across the Group.

Stakeholder management

• Increase investor

conﬁdence in the Group’s

refreshed strategy.

•

Andy played a key role in sharpening the externally communicated goals and the progress of the Bank both

with the investor community and the external media, build

ing trust and conﬁdence externally.

•

He has been an active board member contribut

ing on mult

iple fronts both with

in and outs

ide his core areas

of ﬁnance expertise, includ

ing process

improvements and efﬁc

ienc

ies and governance and ﬁnanc

ial control

improvements for new businesses in and around SC Ventures.

Risk and controls

•

Delivery of regulatory

reporting remediat

ion

programme.

•

Deliver the Resolvabil

ity

Assessment Framework.

•

Andy has given considerable attention to upgrading the quality of the Group’s regulatory reporting, with

notable improvements in the overall ﬁnanc

ial control env

ironment.

•

He has coordinated a sign

iﬁcant mult

isc

ipl

inary team to ensure that the Group

is compliant with its Resolution

responsib

ies.

•

Andy created a new team to manage the verif

icat

ion and reporting of many of the new ESG metrics.

Financ

ial performance

•

Contribute to delivery of

Group ﬁnancial

performance, includ

ing

through management of

cost base.

•

Andy actively managed the Group’s cost base throughout the year, which enabled the rate of income growth to

exceed the rate of cost growth by the largest margin in recent years.

•

Through his chair

ing of the Group Asset and L

iab

ity Committee during an unparalleled period of economic

volatil

ity, Andy ensured that the bank appropr

iately managed the resultant risks and realised many of the

opportunit

ies.

Weight

ing

10%

Outcome

197

Standard Chartered

– Annual Report 2022

Directors’ report

Performance outcome for 2020–22 LTIP awards (audited)

The single total ﬁgure of remuneration table on page 198 shows that LTIP awards will vest in March 2023 with an estimated

value of GBP1,024,408 and GBP634,488 for Bill and Andy, respectively. These LTIP awards were granted in 2020 with a face value

of 120 per cent of ﬁxed pay, to incent

ise the achievement of the Group’s refreshed strategic prior

ies over the three-year period

2020 to 2022. The awards are share-based and were subject to the satisfact

ion of stretch

ing RoTE, TSR and strategic

performance measures over three years. The targets for these measures were set at the beginn

ing of 2020 and have not been

adjusted to reﬂect the challenges caused by the onset of the pandemic. A conduct gateway requirement must be met before

any awards vest.

The Committee concluded that Bill and Andy exhib

ited appropr

iate conduct during the performance period and therefore the

conduct gateway was met.

The threshold RoTE target has not been achieved and the relative TSR threshold target will be measured in March 2023 but is

estimated not to have been achieved. The Committee considered performance against the strategic proof points set out in the

table below and determined that vesting of 22 per cent was appropriate.

The share price used to estimate the value of vesting of the 2020–22 LTIP awards is higher than the share price on the award

date of GBP5.196 and the value attributable to share price growth for Bill and Andy can be seen in the single total ﬁgure of

remuneration on the next page.

The Committee considered carefully the vesting of the LTIP awards, taking account of the share price at grant, which was

15 per cent lower than the share price of the awards made in the previous year. The stretching targets set at the beginn

ing of

2020 were not adjusted to reﬂect the impact of the pandemic, and the share price increase to the end of the performance

period has been broadly consistent with the improvement in underlying performance. Therefore, the Committee considers

the values to be delivered remain appropriate, and are not a windfall.

The awards will vest pro rata over 2023 to 2027 and the shares will be subject to a 12 month retention period post-vesting.

Malus and clawback provis

ions apply.

Measure

Weight

ing

Performance for

min

imum vest

ing (25%)

Performance for

maximum vesting (100%)

Assessment of achievement

Vesting

outcome

RoTE

in 2022 with a

CET1 underpin

One-third

8.5%

11.0%

RoTE 8% and CET1 14%

Relative TSR

performance against

peer group

One-third

Median

Upper quartile

Performance currently estimated

below median. TSR performance will

be measured in March 2023

Strategic measures

One-third

Improved performance against our

strategic prior

ies

22%

Total 2020–22 LTIP awards vesting outcome

22%

Strategic measure

Proof point

Assessment

Deliver our

network and

grow our

afﬂuent

business

Improve client satisfact

ion rat

ing

Client satisfact

ion metr

ics across Corporate, Commercial & Institut

ional Bank

ing

and Consumer, Private & Business Banking have met or exceeded targets in each

year of the plan.

Deliver network growth in target

segments

Exceeded targets in 2022, with good performance in areas of strategic focus,

following slower progress in 2021 and 2020.

Deliver afﬂuent growth in target

markets

Progress made in 2022 but metric impacted by the pandemic restrict

ions and the

onset of the Russia-Ukraine conﬂict during the performance period.

Transform

and disrupt

with dig

ital

Successfully deliver key dig

ital

partnerships, platforms and

technologies

Dig

ital ventures adversely

impacted in 2022 by market volatil

ity and delays

external approvals. Strong performance in earlier years.

Improve data analytics to

develop new products and

attract new clients

Strong performance across the three year period, with targets achieved in

advance of the performance period end.

Purpose and

people

Improve divers

ity, employee

engagement and culture of

inclus

ion

Improved employee inclus

ion and engagement outcomes

in 2022. Increase in the

number of females in senior roles by 3.6ppt over the three years.

Successfully embed sustainable

and responsible practices in

relation to climate, infrastructure,

environment and community

engagements

Sign

iﬁcant outperformance

in sustainable ﬁnance revenues deliver

ing USD500m

in challenging markets, making material progress towards USD300bn target.

Delivered on 2022 net zero public commitment milestones, fulﬁlled leading roles in

key industry in

iat

ives/standards sett

ing and received A- ‘leadership status’ from

CDP, recognis

ing Standard Chartered among very few banks for

its climate action.

Risk and

controls

Successfully deliver milestones

with

in the r

isk management plan

A sign

iﬁcant push

in 2022 to improve risk and controls following two years of

slower progress. Non-ﬁnancial r

isk reduction reﬂects a strong performance in

2022 against stretching targets and an improvement on previous years.

Information and cyber security remedial actions from earlier years were

extended in subsequent periods; however, an improvement in 2022 with risk

reduction across key control domains. Audit targets were achieved in all years.

Enhance compliance control

effectiveness

Mainta

in r

isk proﬁle with

Group’s risk appetite

RoTE was based on proﬁt attributed to ordinary shareholders, adjusted, on a tax-effected basis, for proﬁts or losses of a capital nature, restructuring charges,

amounts consequent to investment transactions driven by strategic intent and infrequent/exceptional transactions that are sign

iﬁcant or mater

ial in the context

of the Group’s normal business earnings for the period. The CET1 underpin was set at the higher of 13 per cent or the min

imum regulatory level as at 31 December

2022 (taking into account any transit

ion rules or mater

ial changes in regulatory rules).

198

Standard Chartered

– Annual Report 2022

Directors’ report

Directors’ remuneration report

Single total ﬁgure of remuneration for 2022 (audited)

The following table sets out the single total ﬁgure of remuneration for 2022 for the CEO and the CFO. The single ﬁgure consists

of salary, pension, beneﬁts and annual incent

ives rece

ivable in respect of 2022 and the estimated values of 2020–22 LTIP

awards vesting. The LTIP value is based on the outcome of awards made in 2020 and does not include the forward-looking

awards to be made in March 2023, due to vest in early 2026. The single ﬁgure for Bill and Andy represents a year-on-year

increase of 16 and 13 per cent respectively, reﬂecting the improved performance achieved.

£000

Bill Winters

Andy Halford

2022

2021

2022

2021

Salary

2,418

2,370

1,546

1,515

Pension

245

237

154

152

Beneﬁts

297

165

133

107

Total ﬁxed remuneration

2,960

2,772

1,833

1,774

Annual incent

ive award

1,499

1,189

945

760

Vesting of LTIP award

Value of vesting awards based on performance

921

779

570

498

Value of vesting awards based on share price growth

103

Total variable remuneration

2,523

1,968

1,579

1,258

Single total ﬁgure of remuneration

5,483

4,740

3,412

3,032

Notes to the single total ﬁgure of remuneration table

Salary

•

Bill’s salary is paid 50 per cent in cash and 50 per cent in shares and Andy’s salary is paid 67 per cent in cash and

33 per cent in shares.

•

Bill and Andy’s salaries were increased 2.7 per cent effective 1 April 2022.

Pension

•

Pension is set as a percentage of salary and can be delivered as a contribut

ion to the UK pens

ion fund or paid as

a cash allowance.

•

Pension for Bill is delivered as a cash allowance and a GBP4,000 contribut

ion to the UK pens

ion fund, and for

Andy the pension is delivered as a cash allowance.

Beneﬁts

•

Bill has the use of a vehicle and driver. This is a role-based provis

ion g

iven the executive role and the associated

security and privacy requirements.

•

Bill is entitled to a contribut

ion to the preparat

ion of his annual tax returns owing to the complexity of his tax

affairs, in part due to travel requirements for Group business.

•

The beneﬁts ﬁgures refer to UK tax years 2021/22 and 2020/21 respectively.

•

The increase in beneﬁts compared with 2021 reﬂects the resumption of business travel to pre-pandemic levels, an

increase in tax preparation assistance given the complexity in ﬁl

ings and an

increase in beneﬁt premiums.

Fixed

remuneration

•

Fixed remuneration is the total of salary, pension and beneﬁts.

Annual incent

ive

•

Executive directors’ annual incent

ive awards are del

ivered 50 per cent in cash and 50 per cent in shares, subject to

a min

imum 12 month retent

ion period.

•

The detail of how directors’ annual incent

ive awards are determ

ined is set out on pages 194 to 196.

Vesting of LTIP

awards

•

Further details on the performance outcome for the 2020–22 LTIP are provided on page 197.

•

The values of the LTIP 2019–21 vesting awards for 2021 have been restated based on the actual share price of

£5.09 when the awards vested in March 2022.

No payments were made to, or in respect of, past directors in the year in excess of the min

imum threshold of GBP50,000, set for

this purpose.

199

Standard Chartered

– Annual Report 2022

Directors’ report

Executive directors’ shareholdings and share interests includ

ing share awards (aud

ited)

Shares that count towards the executive director shareholding requirements are beneﬁc

ially owned shares,

includ

ing vested

share awards subject to a retention period, and unvested share awards for which performance condit

ions have been sat

isf

ied

(on a net-of-tax basis). As of 31 December 2022, both Bill and Andy sign

iﬁcantly exceeded the

ir shareholding requirement.

Shares purchased voluntarily from their own funds are equivalent to 79 and 58 per cent of salary for Bill and Andy, respectively.

The following table summarises the executive directors’ shareholdings and share interests:

Shares held

beneﬁcially

1,2,3

Unvested share

awards not

subject to

performance

measures

(net of tax)

4,5

Total shares

counting

towards

shareholding

requirement

Shareholding

requirement as

a percentage

of salary

Salary

Value of shares

counting

towards

shareholding

requirement as

a percentage

of salary

Unvested share

awards subject

to performance

measures

Bill Winters

2,315,677

175,196

2,490,873

250%

£2,434,000

637%

2,315,512

Andy Halford

989,936

111,527

1,101,463

200%

£1,556,000

441%

1,465,157

All ﬁgures are as of 31 December 2022. There were no changes to any executive directors’ interests in shares between 31 December 2022 and 15 February 2023. No

director has either: (i) an interest in company preference shares or loan stocks of any subsid

iary or assoc

iated undertaking of the Group; or (i

i) any corporate

interests in Company ordinary shares. The closing share price on 31 December 2022 was £6.224.

The beneﬁcial

interests of directors and connected persons in the shares of the Company are set out above. The executive directors do not have any

non-beneﬁcial

interests in the Company’s shares. None of the executive directors used shares as collateral for any loans.

The salary and shares held beneﬁcially

include shares awarded to deliver the executive directors’ salary shares.

As Bill and Andy are both UK taxpayers, zero per cent tax is assumed to apply to Sharesave (as Sharesave is a UK tax qualif

ied share plan) and 47 per cent tax

assumed to apply to other unvested share awards (marginal combined PAYE rate of income tax at 45 per cent and employee National Insurance contribut

ions at

2 per cent) – rates may change.

The ﬁgures reported in the 2022 half year report were calculated assuming 48.25 per cent tax (marginal combined PAYE rate of income tax at 45 per cent and

employee social security contribut

ions at 3.25 per cent). As the Health and Soc

ial Care Levy was cancelled on 6 November 2022 the tax rate assumed to apply to

unvested share awards of 47 per cent has been used.

LTIP awards for the executive directors to be granted in 2023

The size of the LTIP award has been determined based on Group and ind

idual performance during the year. Awards for the

2022 performance year will be granted to Bill and Andy in March 2023 with a value of 132 per cent of salary (GBP3.2 mill

ion and

GBP2.1 mill

ion, respect

ively), the maximum amount under the 2022 directors’ remuneration policy. The amount that the

executive directors will receive at the end of the three-year performance period will be based on the level of performance

achieved against the performance measures and the future share price.

The performance measures and targets are aligned with our strategic prior

ies, and continue to incorporate measures that

reﬂect our three Stands. The sustainab

ity measures have been selected based on their level of impact for the Group and wider

society and abil

ity to dr

ive ﬁnanc

ial returns

in the medium term. Details of the sustainab

ity and other strategic measures

and targets are shown in the table below and are disclosed prospectively, except where the internal targets are considered

commercially sensit

ive. Deta

ils of achievement against targets will be disclosed retrospectively at the end of the performance

period.

The RoTE target range for the awards is increased to 10 to 12.5 per cent, from 7 to 11 per cent for the 2022–24 awards. A narrower

range of 2.5 ppts is considered appropriate due to the increase in target range which reﬂects the progress in RoTE achieved in

2022 and our increased ambit

ion of 11 per cent by 2024.

The peer group of companies selected for the calculation of the relative TSR performance are companies with generally

comparable business activ

ies, size or geographic spread to Standard Chartered or companies with which we compete for

investor funds and talent. The peer group is intended to be representative of our geographic presence and business operations.

The TSR peer group for the 2023–25 LTIP awards will be the same as for the 2022–24 LTIP and is detailed below. TSR is measured

in sterling for each company and the TSR data is averaged over a month at the start and end of the three-year measurement

period which starts from the date of grant.

Remuneration regulations for UK banks prohib

it the award of d

idend equ

ivalent shares on vesting. The number of shares

awarded in respect of the LTIP will take into account the lack of div

idend equ

ivalents (calculated by reference to market

consensus div

idend y

ield) such that the overall market value of the award is mainta

ined.

These awards will vest in ﬁve annual tranches beginn

ing after the th

ird anniversary of the grant (i.e. March 2026 to March 2030)

subject to meeting the performance measures set out below at the end of 2025. All vested shares are subject to a 12 month

retention period.

The performance measures for the 2023–25 LTIP awards are set out in the table on page 200.

Peer group for the TSR measure in the 2023–25 LTIP

Banco Santander

Credit Suisse

KB Financ

ial Group

Bank of America

DBS Group

Oversea Chinese Banking Corporation

Bank of China

Deutsche Bank

Société Générale

Bank of East Asia

HSBC

Standard Bank

Barclays

ICBC

State Bank of India

BNP Paribas

ICICI

UBS

Cit

igroup

JPMorgan Chase

United Overseas Bank

200

Standard Chartered

– Annual Report 2022

Directors’ report

Directors’ remuneration report

Performance measures for 2023–25 LTIP awards

Measure

Weight

ing

Amount vesting

(as a % of total award)

Threshold performance target

Maximum performance target

1. RoTE

in 2025 with a

CET1

underpin of the

higher of 13% or the

min

imum regulatory

requirement

30%

Maximum – 30%

Threshold – 7.5%

Below threshold – 0%

10%

12.5%

If RoTE reaches 10 per cent then 7.5 per cent of the award vests. If RoTE reaches 12.5 per cent then 30 per cent of the award vests. If RoTE

is between the threshold and maximum, vesting is calculated on a straight-line basis between these two points.

2. Relative TSR

against the

peer group

30%

Maximum – 30%

Threshold – 7.5%

Below threshold – 0%

Median

Upper quartile

Relative TSR is measured against a peer group of companies. If the Group’s TSR performance is at least equivalent to the median

ranked company then 7.5 per cent of the award vests. If the Group’s TSR performance is at least equal to the upper quartile ranked

company then 30 per cent of the award vests. Between these points, the Group’s TSR is compared with that of the peer companies

posit

ioned

immed

iately above and below

it and straight-line vesting applies.

3. Sustainab

ity

15%

Maximum – 15%

Min

imum – 0%

•

Sustainable ﬁnance revenues in excess of $1bn by 2025

•

Delivery of the net zero roadmap

•

Contribut

ion to the advancement of the susta

inab

ity ecosystem

4. Other strategic

measures

25%

Maximum – 25%

Min

imum – 0%

Our Stands

•

Uplift

ing part

ipat

ion: increase access to ﬁnanc

ial serv

ices and lending

to female entrepreneurs and SMEs

•

Resetting globalisat

ion: create d

ivers

ity and

inclus

ion suppl

ier plans; bank

an increased proportion of our clients’ internat

ional and domest

networks of suppliers and buyers

Clients

•

Improve client satisfact

ion rat

ing evidenced in surveys and internal

benchmarks

•

Deliver growth in afﬂuent wealth client activ

ity

•

Deliver network income growth in Corporate, Commercial & Institut

ional

Banking

•

Increase China onshore and offshore proﬁt before tax in line with

externally disclosed targets

•

Drive dig

ital ventures growth w

ith meaningful value from dig

ital creat

ions

Enablers

(Ways of working

and people)

•

Ways of working: organisat

ional effect

iveness - reducing complexity

•

People: improve employee net promoter score; increase divers

ity;

increase

our culture of inclus

ion

Risk and controls

•

Reduction in non-ﬁnanc

ial r

isk, evaluating the elevated residual risks to

allow for effective prior

isat

ion and g

ive credit for risk reduction

•

An assessment of the proportion of audit issues ident

iﬁed by the

business/region/function compared to total issues raised, reﬂecting drive

to improve risk awareness and culture across the Bank

Underlying RoTE represents the ratio of the current year’s underlying operating proﬁt attributable to ordinary shareholders to the weighted average ordinary

shareholders’ equity less the average goodwill and intang

ibles for the report

ing period. Underlying RoTE normally excludes regulatory ﬁnes and certain other

adjustments but, for remuneration purposes, such adjustments are subject to review by the Committee.

The CET1 underpin will be set at the higher of 13 per cent or the min

imum regulatory level as of 31 December 2025. In add

ion, the Comm

ittee has the discret

ion to

take into account at the end of the performance period any changes in regulatory capital and risk-weighted asset requirements that might have been

announced and implemented after the start of the performance period, for example in relation to Basel IV.

Total variable remuneration awarded to directors in respect of 2022 (audited)

Bill Winters

Andy Halford

2022

2021

2022

2021

Annual incent

ive (£000)

1,499

1,189

945

760

Annual incent

ive as a percentage of salary

62%

50%

61%

50%

LTIP award (value of shares subject to performance condit

ions) (£000)

3,213

3,128

2,054

2,000

LTIP award as a percentage of salary

132%

Total variable remuneration (£000)

4,712

4,317

2,999

2,760

Total variable remuneration as a percentage of salary

194%

182%

193%

182%

2021 variable remuneration ﬁgures have been recalculated as a percentage of salary, in line with the 2022 Directors’ remuneration policy approach.

LTIP awards for the 2022 performance year will be granted to executive directors in March 2023 and are based on 2022 salary.

201

Standard Chartered

– Annual Report 2022

Directors’ report

Service contracts for executive directors

Copies of the executive directors’ service contracts are available for inspect

ion at the Group’s reg

istered ofﬁce. These contracts

have rolling 12 month notice periods and the dates of the executive directors’ current service contracts are shown below.

The contracts were updated effective 1 January 2020 to reﬂect the changes made following the implementat

ion of the 2019

remuneration policy and the change to pension contribut

ion. Execut

ive directors are permitted to hold non-executive

directorsh

ip pos

ions

in other organisat

ions. Where such appo

intments are agreed with the Board, the executive directors may

retain any fees payable for their services. Both executive directors served as non-executive directors elsewhere and received

fees for the period covered by this report as set out below. Andy stepped down from the Board of Marks and Spencer Group plc

on 31 December 2022.

Date of Standard Chartered

employment contract

Details of any non-executive directorsh

Fees retained for any non-executive

directorsh

ip (local currency)

Bill Winters

1 January 2020

Novartis International AG

CHF360,000

Andy Halford

1 January 2020

Marks and Spencer Group plc

GBP104,298

Single ﬁgure of remuneration for the Chairman and INEDs (audited)

The Chairman and INEDs were paid in monthly instalments during the year. The INEDs are required to hold shares with a

nominal value of $1,000. The table below shows the fees and beneﬁts received by the Chairman and INEDs in 2022 and 2021.

The INEDs’ 2022 beneﬁt ﬁgures are in respect of the 2021/22 tax year and the 2021 beneﬁt ﬁgures are in respect of the 2020/21

tax year to provide consistency with the reporting of sim

ilar beneﬁts

in previous years and with those received by executive

directors.

Fees £000

Beneﬁts £000

Total £000

beneﬁcially

held as at

31 December

2022

2021

2022

2021

2022

2021

Group Chairman

José Viñals

1,250

1,295

1,267

45,000

Current INEDs

Shir

ish Apte

128

2,000

David Conner

233

255

234

256

10,000

Byron Grote

156

170

156

170

–

Christ

ine Hodgson, CBE

289

325

289

325

2,571

Gay Huey Evans, CBE

155

200

156

200

2,615

Jackie Hunt

2,000

Naguib Kheraj

328

–

Robin Lawther, CBE

2,000

Maria Ramos

239

190

239

190

2,000

Phil Rivett

234

225

234

225

2,128

David Tang

170

171

2,000

Carlson Tong

183

205

183

205

2,000

Jasmine Whitbread

210

3,615

The costs of beneﬁts (and any associated tax costs) are paid by the Group.

The beneﬁcial

interests of Chairman and INEDs, and connected persons in the shares of the Company are set out above. These directors do not have any

non-beneﬁcial

interests in the Company’s shares. None of these directors used shares as collateral for any loans. No director had either: (i) an interest in the

Company’s preference shares or loan stocks of any subsid

iary or assoc

iated undertaking of the Group; or (i

i) any corporate

interests in the Company’s ordinary

shares. All ﬁgures are as of 31 December 2022 or on the retirement of a director unless otherwise stated.

Shir

ish Apte was appo

inted to the Board on 4 May 2022.

4. David Conner’s fee includes his role on the Combined US Operations Risk Committee.

Byron Grote stepped down from the Board on 30 November 2022 and we are no longer tracking his shareholding. His reported fee for 2022 of £156,000 is in

respect of the period of 1 January 2022 to 30 November 2022.

6. Jackie Hunt was appointed to the Board on 1 October 2022.

Naguib Kheraj stepped down from the Board on 30 April 2022 and we are no longer tracking his shareholding. His reported fee for 2022 of £96,000 is in respect of

the period of 1 January 2022 to 30 April 2022. His beneﬁts for 2022 of £1,000 are in respect of the period from 6 April 2021 to 5 April 2022, in line with the approach

to disclose INED beneﬁts in respect of the relevant tax year.

8. Robin Lawther was appointed to the Board on 1 July 2022.

The increase in fees for Maria Ramos is due to changes in Board and Committee responsib

ies dur

ing the year.

INEDs’ letters of appointment

The INEDs have letters of appointment, which are available for inspect

ion at the Group’s reg

istered ofﬁce. Details of the INEDs’

appointments are set out on pages 138 to 142. INEDs are appointed for a period of one year, unless terminated by either party

with three months’ notice.

202

Standard Chartered

– Annual Report 2022

Directors’ report

Directors’ remuneration report

Remuneration for the executive directors in 2023 will be in

line with our directors’ remuneration policy, approved at the

AGM in May 2022, as summarised on pages 188 and 189 of

this report and set out in full on pages 161 to 166 of the 2021

Annual Report.

The 2022 policy is also set out on our website:

sc.com

The key elements of remuneration for 2023 include salary

(delivered in cash and shares), pension, beneﬁts, an annual

incent

ive and an LTIP award. A port

ion of the executive

directors’ salaries is paid in shares to strengthen shareholder

alignment. Bill’s pension is delivered as a contribut

ion to a

deﬁned contribut

ion plan and as a cash allowance. Andy’s

pension is delivered as a cash allowance. The pension

allowance is set as a percentage of salary (both the cash and

shares components).

The Committee reviews the salaries of the executive directors

on an annual basis, after consider

ing any changes to the

scope or responsib

ity of the role, alignment with market-

competit

ive levels, and cons

iderat

ion of the average salary

increases made across the Group.

In response to the global cost of liv

ing challenges, salary

increases across the Group have been focused towards jun

ior

employees and are generally higher than in 2022. Taking into

account the average 2023 salary increase awarded to the

Group’s UK and global workforce, the Committee has

determined that an increase is appropriate and has awarded

salary increases of 3.4 per cent to Bill and Andy. In line with the

approach used for all senior roles, these increases are 50 per

cent lower than the average increase awarded to other UK

employees. This increases their salaries from GBP2,434,000 to

GBP2,517,000 and from GBP1,556,000 to GBP1,609,000

respectively. Details of ﬁxed pay for Bill and Andy with effect

from 1 April 2023 are set out below.

£000

Bill Winters

Andy Halford

2023

2022

% change

2023

2022

% change

Salary

2,517

2,434

3.4

1,609

1,556

3.4

of which cash

1,258

1,217

3.4

1,078

1,043

3.4

of which shares

1,259

1,217

3.4

531

513

3.4

Pension

252

243

3.4

161

156

3.4

Total ﬁxed pay

2,769

2,677

3.4

1,770

1,712

3.4

Proportion of total ﬁxed pay paid in cash

55%

70%

Proportion of total ﬁxed pay paid in shares

45%

30%

Illustration of applicat

ion of the 2023 remunerat

ion policy

The charts below illustrate the potential outcomes under our

directors’ remuneration policy (i.e. for awards that would be

made in March 2023, based on 2022 performance and ﬁxed

remuneration with effect from 1 April 2023).

The charts show potential remuneration outcomes for each

executive director in four performance scenarios: min

imum,

on-target, maximum and maximum with 50 per cent share

price appreciat

ion,

in line with reporting requirements. The

percentages shown in each bar represent the amount of

remuneration provided by each element of pay. Also shown

are the 2021 and 2022 single total ﬁgures of remuneration for

Bill and Andy.

2023 policy implementat

ion for d

irectors

203

Standard Chartered

– Annual Report 2022

Directors’ report

Executive director remuneration

(£000)

Bill Winters

1,000

2,000

3,000

4,000

5,000

8,000

10,000

7,000

6,000

12,000

11,000

9,000

Fixed remuneration

Annual incent

ive

LTIP

Min

imum

3,065

100%

On-target

5,834

53%

19%

28%

Maximum

8,603

35%

26%

39%

10,264

29%

22%

49%

2021 single ﬁgure

2022 single ﬁgure

4,740

59%

25%

16%

5,483

54%

27%

19%

Maximum + 50%

share price increase

Andy Halford

Min

imum

1,903

100%

On-target

3,673

52%

19%

29%

Maximum

5,442

35%

26%

39%

6,504

29%

22%

49%

2021 single ﬁgure

2022 single ﬁgure

3,032

59%

25%

16%

3,412

53%

28%

19%

Maximum + 50%

share price increase

Deﬁnit

ions for the chart above showing potential remuneration outcomes for each executive director in four performance

scenarios:

Fixed

remuneration

All scenarios

•

Consists of total ﬁxed remuneration – salary, beneﬁts and pension

•

Salary – salary as of 1 April 2023

•

Beneﬁts – based on 2022 single ﬁgure, actual ﬁxed remuneration in 2023 will be dependent on

the cost of beneﬁts

•

Pension – 10 per cent of salary as of 1 April 2023

Incentives

Min

imum

•

No annual incent

ive

is awarded

•

No LTIP award vests

On-target

•

Annual incent

ive of 50 per cent of target (44 per cent of salary)

•

LTIP award vests at 50 per cent total award (66 per cent of salary)

Maximum

•

Annual incent

ive of 100 per cent of target (88 per cent of salary)

•

LTIP award vests at 100 per cent total award (132 per cent of salary)

Maximum + 50%

share price increase

•

Annual incent

ive of 100 per cent of target (88 per cent of salary)

•

LTIP award vests at 100 per cent total award (132 per cent of salary)

•

50 per cent share price appreciat

ion

in the value of the vested LTIP award since time of grant

2021 single

ﬁgure

Fixed remuneration

•

Salary – received in 2021

•

Beneﬁts – received in 2020/21 tax year

•

Pension – contribut

ion/cash allowance rece

ived in 2021

Incentives

•

Annual incent

ive – rece

ived in respect of 2021 performance year

•

LTIP – actual vesting of 2019–21 LTIP award

2022 single

ﬁgure

Fixed remuneration

•

Salary – received in 2022

•

Beneﬁts – received in 2021/22 tax year

•

Pension – contribut

ion/cash allowance rece

ived in 2022

Incentives

•

Annual incent

ive – rece

ived in respect of 2022 performance year

•

LTIP – expected vesting of 2020–22 LTIP award

204

Standard Chartered

– Annual Report 2022

Directors’ report

Directors’ remuneration report

2023 annual incent

ive scorecard

Our annual incent

ive scorecard reﬂects our strateg

ic prior

ies. The targets are set annually by the Committee and take into

account the Group’s annual ﬁnancial plan and strateg

ic prior

ies for the next few years which reﬂect the evolving

macroeconomic outlook. The Committee will also consider progress demonstrated against our Stands in the determinat

ion of

the overall scorecard outcome.

From 2022, to simpl

ify the process, the Comm

ittee embedded the assessment of personal performance into the annual

incent

ive scorecard assessment, account

ing for a maximum weight

ing of 10 per cent. F

inanc

ial measures cont

inue to make up

50 per cent of the annual incent

ive scorecard. Strateg

ic and personal measures are assessed by the Committee using a

quantitat

ive and qual

itat

ive framework.

The Committee considers such targets to be commercially sensit

ive and that

it would be detrimental to the interests of the

Group to disclose them before the end of the ﬁnanc

ial year. As such, targets w

ill be disclosed retrospectively in the 2023 Annual

Report alongside the level of performance achieved.

Step 1: Conduct gateway requirement to be met in order to be elig

ible for any annual

incent

ive

Appropriate level of ind

idual valued behaviours and conduct exhib

ited dur

ing the course of the year

Step 2: Measurement of performance against ﬁnanc

ial and other strateg

ic and personal measures

Financ

ial measures

Weight

ing

Target

Income

10%

•

Targets to be disclosed retrospectively

Costs

10%

RoTE

with a CET1

underpin

of the higher of 13% or the

min

imum regulatory

requirement

30%

Other strategic measures

Weight

ing

Target

Clients (network, afﬂuent, mass,

ventures)

12%

•

Improve client satisfact

ion and cl

ient experience ratings.

•

Deliver growth in qualif

ied cl

ients across Afﬂuent, Private Banking, and Wealth

Management activ

ity.

•

Deliver network income growth in Corporate, Commercial & Institut

ional Bank

ing.

•

Grow value of Dig

ital Ventures.

•

Mass market Retail growth through new to bank personal customers.

Sustainab

ity

•

Progress against the Group’s sustainable ﬁnance revenue targets and its aim to

achieve net zero by 2050.

•

Improve community engagement through employee volunteering partic

ipat

ion.

Enablers (ways of working and

people)

•

Grow proportion of dig

itally

iated transactions and dig

ital sales adopt

ion.

•

Improve end-to-end speed to deliver change (from idea formation to

commercial

isat

ion).

• Improve organisat

ional effect

iveness.

•

Improve employee engagement, divers

ity and

inclus

ion.

Risk and controls

12%

• Non-ﬁnancial r

isk reduction.

•

Self-ident

iﬁcation of aud

it issues.

Personal performance measures

Weight

ing

Target

Bill - performance goals

10%

•

Continue personal push for innovat

ion and s

impl

iﬁcation across the Group, and grow

other sources of income in our footprint.

•

Further improve the Group’s risk and control framework, accelerating progress and

embedding a robust preventative risk culture.

•

Continue drive for a high-performance culture, includ

ing the development of

internal

talent and effective succession planning.

Andy - performance goals

•

Drive collaboration with

in the F

inance function across segments and markets.

•

Continue to improve ﬁnanc

ial report

ing procedures.

•

Deliver the focus on achiev

ing target RoTE and other strateg

ic object

ives.

The Group’s statutory performance is adjusted for proﬁts or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent,

other infrequent and/or exceptional transactions that are sign

iﬁcant or mater

ial in the context of the Group’s normal business earnings for the period and items

which management and investors would ordinar

ily

ident

ify separately when assess

ing underlying performance period by period.

Underlying RoTE represents the ratio of the current year’s underlying operating proﬁt attributable to ordinary shareholders to the weighted average ordinary

shareholders’ equity less the average goodwill and intang

ibles for the report

ing period. Underlying RoTE normally excludes regulatory ﬁnes and certain other

adjustments but, for remuneration purposes, such adjustments are subject to review by the Committee.

The CET1 underpin will be set at the higher of 13 per cent or the min

imum regulatory level as at 31 December 2023. In add

ion, the Comm

ittee has the discret

ion to

take into account at the end of the performance period any changes in regulatory capital and risk-weighted asset requirements that might have been

announced and implemented after the start of the performance period.

205

Standard Chartered

– Annual Report 2022

Directors’ report

INED fees

The Board regularly reviews the fee levels, consider

ing market data and the dut

ies, time commitment and contribut

ion

expected for the PLC Board and, where appropriate, subsid

iary boards, w

ith the last increase taking place in 2019. The

Chairman’s fee has remained unchanged since his appointment in 2016. In recent years, the demands made of our Chairman

and INEDs has increased in line with greater regulatory expectations, and an increase in the amount of learning and train

ing

required.

Consider

ing th

is alongside the high inﬂat

ionary pressures be

ing faced in a number of our markets the Board determined an

increase in fee levels was appropriate. The revised fees are set out in the table below. The Chairman and the INEDs are elig

ible

for beneﬁts in line with the directors’ remuneration policy. Neither the Chairman nor the INEDs receive any performance-related

remuneration.

1 January 2022

£000

1 January 2023

£000

Group Chairman

1,250

1,293

Board Member

105

110

Addit

ional respons

ies

Deputy Chairman

–

Senior Independent Director

Chair

Audit Committee

Board Risk Committee

Remuneration Committee

Board Financ

ial Cr

ime Risk Committee

–

Culture and Sustainab

ity Committee

Membership

Audit Committee

Board Risk Committee

Remuneration Committee

Board Financ

ial Cr

ime Risk Committee

–

Culture and Sustainab

ity Committee

Governance and Nominat

ion Comm

ittee

The Group Chairman receives a stand-alone fee which is inclus

ive of all serv

ices (includ

ing Board and Comm

ittee responsib

ies).

The Group does not currently util

ise the role of Deputy Cha

irman and does not plan to do so.

The Board Financ

ial Cr

ime Risk Committee was retired during 2022, with responsib

ies reallocated to a comb

inat

ion of the Board, Aud

it and Board Risk

Committees.

206

Standard Chartered

– Annual Report 2022

Directors’ report

Addit

ional remunerat

ion disclosures

Addit

ional remunerat

ion disclosures

The following disclosures provide further informat

ion and context

in relation to executive director remuneration and

remuneration for the wider workforce as required by company reporting regulations, ﬁnanc

ial serv

ices regulations, corporate

governance guidance and inst

itut

ional investor guidel

ines. These

include the Directors’ Remuneration Report Regulations,

the UK Corporate Governance Code, Pillar 3 disclosure requirements and the requirements of The Stock Exchange of Hong

Kong Lim

ited.

Appropriateness of executive directors’ remuneration

Our approach to remuneration is consistent for all employees and is designed to help ensure pay is competit

ive and

in line with

the princ

iples of our Fa

ir Pay Charter. Remuneration for the executive directors, in line with other employees, is reviewed annually

against internal and external measures to ensure that levels are appropriate. Further details on the alignment of executive

director and wider workforce remuneration is set out on pages 188 and 189.

Measure

Approach

External

market

data

•

We compete for talent in a global marketplace, with many of our key competitors based outside the UK. We review

executive director ﬁxed and variable remuneration levels against a peer group of UK and internat

ional banks to

ensure that it remains appropriately competit

ive. Market data used

in benchmarking is based on the latest published

report and accounts.

•

In addit

ion, we cons

ider their remuneration against FTSE30 companies, with data sourced from an external provider.

Internal

measures

•

As with all employees, executive directors’ salaries are reviewed annually. In addit

ion, we rev

iew annually the year-on-

year percentage change in remuneration for the executive directors and the wider employee population.

•

Our incent

ive plans have a clear l

ink to Group and business performance, through published scorecards. The same

Group scorecard is used in the assessment of incent

ives for colleagues

includ

ing the execut

ive directors.

•

Incentive decis

ions for colleagues,

includ

ing the execut

ive directors, are also driven by the assessment of ind

idual

performance includ

ing ach

ievements against personal object

ives and conduct.

•

The remuneration structure for executive directors was considered as part of the broader directors’ remuneration

policy review during 2021, taking account of the remuneration framework applicable to all colleagues.

CEO pay

ratio

•

In line with UK regulations, we annually report pay ratios comparing CEO remuneration to all UK employees.

•

We review year-on-year ratio changes to understand the reasons and appropriateness for such movements.

•

In addit

ion, we rev

iew the median ratio against UK FTSE and industry peer averages.

The relationsh

ip between the remunerat

ion of the Group CEO and all UK employees

Ratio of the total remuneration of the CEO to that of the UK lower quartile, median and upper quartile employees

Year

Method

CEO

£000

UK employee – £000

Pay ratio

P25

P50

P75

P25

P50

P75

2022

5,483

145

228

58:1

38:1

24:1

2021

4,740

139

215

52:1

34:1

22:1

2020

3,926

128

199

46:1

31:1

20:1

2019

5,360

128

212

65:1

42:1

25:1

2018

6,287

124

208

80:1

51:1

30:1

2017

4,683

121

203

61:1

39:1

23:1

The ratio will depend materially on long-term incent

ive outcomes each year for the CEO, and accord

ingly may ﬂuctuate.

Therefore, the Committee also discloses the pay ratios covering salary and salary plus annual incent

ive, as the majority of UK

employees do not typically receive LTIP awards.

Addit

ional rat

ios of pay based on salary and salary plus annual incent

ive

Salary

CEO

£000

UK employee – £000

Pay ratio

P25

P50

P75

P25

P50

P75

2022

2,418

138

34:1

28:1

18:1

2021

2,370

100

136

35:1

24:1

17:1

2020

2,370

116

38:1

25:1

20:1

2019

2,353

128

36:1

26:1

18:1

2018

2,300

142

39:1

27:1

16:1

2017

2,300

124

42:1

28:1

19:1

Salary plus annual incent

ive

2022

3,917

123

202

47:1

32:1

19:1

2021

3,559

122

186

45:1

29:1

19:1

2020

2,756

104

175

37:1

26:1

16:1

2019

3,604

109

187

49:1

33:1

19:1

2018

3,691

105

183

52:1

35:1

20:1

2017

3,978

103

182

58:1

39:1

22:1

207

Standard Chartered

– Annual Report 2022

Directors’ report

•

The pay ratios are calculated using Option A published methodology, in line with investor guidance.

•

Employee pay data is based on full-time equivalent pay for UK employees as of 31 December for the relevant year and

excludes leavers, joiners and employee transfers

in or out of the UK during the year to help ensure data is on a like-for-like

basis. Total pay is calculated in line with the single ﬁgure methodology (i.e. ﬁxed remuneration accrued during the ﬁnanc

ial

year and variable remuneration relating to the performance year) and data for insured beneﬁts are based on notional

premiums. No other calculation adjustments or assumptions have been made.

•

CEO pay is as per the single total ﬁgure of remuneration for 2022 and restated for 2021 to take account of the actual LTIP

vesting in 2022. Further informat

ion on the s

ingle total ﬁgure is on page 198. The 2022 ratio will be restated in the 2023

directors’ remuneration report to take account of the ﬁnal LTIP vesting data for elig

ible employees and for the CEO.

•

The Committee has considered the data for the three ind

iduals ident

iﬁed at the lower quart

ile, median and upper quartile

for 2022 and believes that it is a fair reﬂection of pay among the UK employee population. Each ind

idual ident

iﬁed was a

full-time employee during the year and received remuneration in line with the Group remuneration policy, and none received

exceptional pay.

•

Our LTIP is intended to link total remuneration to the achievement of the Group’s long-term strategy and to reinforce

alignment between executive remuneration and shareholder interest. Partic

ipat

ion is typically senior employees who have

line of sight to inﬂuence directly the performance targets on the awards. The lower quartile, median and upper quartile

employees ident

iﬁed th

is year are not partic

ipants

in the LTIP.

Group performance versus the CEO’s remuneration

The graph below shows the Group’s TSR performance on a cumulative basis over the past 10 years alongside that of the FTSE

100 and peer banks. The graph also shows histor

ical levels of remunerat

ion of the CEO over the 10 years ended 31 December

2022 for comparison. The FTSE 100 provides a broad comparison group against which shareholders may measure their relative

returns.

Jan 23

Jan 22

Jan 21

Jan 20

Jan 19

Jan 18

Jan 17

Jan 16

Jan 15

Jan 14

Jan 13

100

120

140

160

180

200

Value of £100 invested on 31 December 2012

CEO total remuneration (£ mill

ion)

CEO total remuneration (Peter Sands)

CEO total remuneration (Bill Winters)

Standard Chartered

FTSE

100

Comparator median

The table below shows the single ﬁgure of total remuneration for the CEO since 2013 and the variable remuneration delivered as

a percentage of maximum opportunity.

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Single ﬁgure of total remuneration £000

Peter Sands (CEO until 10 June 2015)

4,378

3,093

1,290

–

Bill Winters (appointed CEO on 10 June 2015)

–

8,399

3,392

4,683

6,287

5,360

3,926

4,740

5,483

Annual incent

ive as a percentage of max

imum

opportunity

Peter Sands

50%

–

Bill Winters

–

45%

76%

63%

55%

18.5%

57%

70%

Vesting of LTIP awards as a percentage of maximum

opportunity

Peter Sands

33%

10%

–

Bill Winters

–

27%

38%

26%

23%

22%

•

Bill’s single ﬁgure of total remuneration in 2015 includes his buyout award of £6.5 mill

ion to compensate for the forfe

iture of

share interests on jo

ing from his previous employment.

•

The 2021 single ﬁgure for Bill has been restated based on the actual vesting and share price when the 2019–21 LTIP awards

vested in March 2022.

208

Standard Chartered

– Annual Report 2022

Directors’ report

Addit

ional remunerat

ion disclosures

Annual percentage change in remuneration of directors and UK employees

In line with our Fair Pay Charter, we monitor year-on-year changes in salary, beneﬁts and annual incent

ives for the CEO and the

wider workforce.

In addit

ion, as requ

ired under the Shareholder Rights Direct

ive (part of UK Compan

ies regulations), we compare the directors of

the PLC Board against an average full-time equivalent UK employee. The regulations require this analysis to be undertaken for

all ind

iduals employed by Standard Chartered PLC (the parent company). As no ind

iduals are employed by Standard

Chartered PLC (they are employed by legal entit

ies wh

ich sit below the parent company), we voluntarily disclose the

comparisons against UK employees as we feel this provides a representative comparison.

Salary/fees % change

Taxable beneﬁts % change

Annual incent

ive % change

2022

2021

2020

2022

2021

2020

2022

2021

2020

CEO

Bill Winters

2.0

0.0

0.7

79.8

(26.5)

(2.9)

26.1

208.1

(69.2)

CFO

Andy Halford

2.0

0.7

3.7

23.9

(5.6)

30.2

24.3

208.9

(68.2)

Group Chairman

José Viñals

0.0

170.2

(61.5)

(11.7)

–

Current INEDs

–

Shir

ish Apte

–

David Conner

(8.8)

(6.7)

(0.6)

11.1

5.9

(57.5)

–

Byron Grote

–

0.0

–

0.0

–

Christ

ine Hodgson, CBE

(11.0)

0.0

(100.0)

28.2

–

Gay Huey Evans, CBE

(22.5)

0.0

100.0

(100.0)

233.9

–

Jackie Hunt

–

Naguib Kheraj

–

(9.0)

0.0

–

(100.0)

7.9

–

Robin Lawther, CBE

–

Maria Ramos

25.9

–

0.0

–

Phil Rivett

3.9

–

0.0

–

David Tang

0.0

18.3

–

11.1

(82.3)

–

Carlson Tong

(11.0)

0.0

–

0.0

(100.0)

–

Jasmine Whitbread

0.0

(100.0)

(49.2)

–

Workforce Average

FTE UK employee

4,5

3.3

3.1

3.8

(7.0)

(2.0)

2.9

14.3

38.2

(22.1)

The increase in 2022 taxable beneﬁts for Bill Winters and José Viñals are primar

ily due to the resumpt

ion of business travel to pre-pandemic levels.

In 2022, Naguib Kheraj and Byron Grote stepped down from the Board on 30 April and 30 November respectively. Shir

ish Apte, Rob

in Lawther and Jackie Hunt

were appointed to the Board on 4 May, 1 July and 1 October respectively.

The increase in fees for Maria Ramos is due to changes in Board and Committee responsib

ies dur

ing the year.

Employee data is based on full-time equivalent pay for UK employees as of 31 December of the relevant year. This data excludes leavers, jo

iners and employee

transfers in or out of the UK during the year to help ensure data is on a like-for-like basis. Salary percentage change reﬂects increases decided at the end of 2021

and implemented in 2022.

Average FTE UK employee percentage change has been calculated on a mean basis. As the employee population will change yearly and the mean average

considers the full range of data, it is expected this will provide a more consistent year-on-year comparison. Any percentage changes impacted by extremes at

either end of the data set will be explained in the supporting commentary.

For the CEO, CFO, the Group Chairman and INEDs, the data the changes relate to are set out on pages 198 and 201, respectively.

The change in taxable beneﬁts relates to the change in the values for the 2021/20, 2020/21 and 2019/20 tax years.

Due to the low value of the taxable beneﬁts received by INEDs, which have not exceeded £1,000 in 2022 (set out on page 201), small

changes to these values are expected to cause the percentage change to ﬂuctuate year-on-year.

Scheme interests awarded, exercised and lapsed during the year

Employees, includ

ing execut

ive directors, are not permitted to engage in any personal investment strategies with regards to their

Company shares, includ

ing hedg

ing against the share price of Company shares. The main features of the outstanding shares and

awards are summarised below:

Award

Performance measures

Performance outcome

Accrues notional

div

idends?

No. of tranches

Tranche splits

2016–18 LTIP

33% RoE

33% TSR

33% Strategic

27%

Yes

Tranche 1: 50%

Tranches 2–5: 12.5%

2017–19 LTIP

38%

Yes

5 equal tranches

2018–20 LTIP

26%

5 equal tranches

2019–21 LTIP

33% RoTE

33% TSR

33% Strategic

23%

5 equal tranches

2020–22 LTIP

22%

5 equal tranches

2021–23 LTIP

30% RoTE

30% TSR

15% Sustainab

ity

25% Strategic

To be assessed at the end of 2023

5 equal tranches

2022–24 LTIP

To be assessed at the end of 2024

5 equal tranches

2016–18 and 2017–19 LTIP awards may receive div

idend equ

ivalent shares based on div

idends declared between grant and vest. From 1 January 2017 remunerat

ion

regulations for European banks prohib

ited the award of d

idend equ

ivalent shares. Therefore, the number of shares awarded in respect of the 2018–20, 2019–21,

2020–22, 2021–23 and 2022-24 LTIP awards took into account the lack of div

idend equ

ivalents (calculated by reference to market consensus div

idend y

ield) such

that the overall value of the award was mainta

ined.

209

Standard Chartered

– Annual Report 2022

Directors’ report

Change in interests during the period 1 January to 31 December 2022 (audited)

Share award

price (£)

As of

1 January

Awarded

Div

idends

awarded

Vested/

exercised

3,4

Lapsed

As of

31 December

Performance

period end

Vesting date

Bill Winters

2016–18 LTIP

5.560

33,506

–

2,517

36,023

–

11 Mar 2019

4 May 2022

33,507

–

33,507

4 May 2023

2017–19 LTIP

7.450

45,049

–

3,380

48,428

–

13 Mar 2020

13 Mar 2022

45,049

–

45,049

13 Mar 2023

45,049

–

45,049

13 Mar 2024

2018–20 LTIP

7.782

28,178

–

28,178

–

9 Mar 2021

9 Mar 2022

28,178

–

28,178

9 Mar 2023

28,178

–

28,178

9 Mar 2024

28,179

–

28,179

9 Mar 2025

2019–21 LTIP

6.105

133,065

–

30,604

102,461

–

11 Mar 2022

133,065

–

102,461

30,604

11 Mar 2023

133,065

–

102,461

30,604

11 Mar 2024

133,065

–

102,461

30,604

11 Mar 2025

133,067

–

102,462

30,605

11 Mar 2026

2020–22 LTIP

5.196

161,095

–

161,095

9 Mar 2023

161,095

–

161,095

9 Mar 2024

161,095

–

161,095

9 Mar 2025

161,095

–

161,095

9 Mar 2026

161,095

–

161,095

9 Mar 2027

2021–23 LTIP

4.901

150,621

–

150,621

15 Mar 2024

150,621

–

150,621

15 Mar 2025

150,621

–

150,621

15 Mar 2026

150,621

–

150,621

15 Mar 2027

150,621

–

150,621

15 Mar 2028

2022–24 LTIP

4.876

–

151,386

–

151,386

14 Mar 2025

14 Mar 2026

–

151,386

–

151,386

14 Mar 2027

–

151,386

–

151,386

14 Mar 2028

–

151,386

–

151,386

14 Mar 2029

–

151,388

–

151,388

14 Mar 2030

Andy Halford

4,5

2016–18 LTIP

5.560

20,008

–

1,502

21,510

–

11 Mar 2019

4 May 2022

20,009

–

20,009

4 May 2023

2017–19 LTIP

7.450

27,888

–

2,094

29,982

–

13 Mar 2020

13 Mar 2022

27,888

–

27,888

13 Mar 2023

27,890

–

27,890

13 Mar 2024

2018–20 LTIP

7.782

17,448

–

17,448

–

9 Mar 2021

9 Mar 2022

17,448

–

17,448

9 Mar 2023

17,448

–

17,448

9 Mar 2024

17,448

–

17,448

9 Mar 2025

2019–21 LTIP

6.105

85,094

–

19,571

65,523

–

11 Mar 2022

85,094

–

65,523

19,571

11 Mar 2023

85,094

–

65,523

19,571

11 Mar 2024

85,094

–

65,523

19,571

11 Mar 2025

85,096

–

65,524

19,572

11 Mar 2026

2020–22 LTIP

5.196

99,976

–

99,976

9 Mar 2023

99,976

–

99,976

9 Mar 2024

99,976

–

99,976

9 Mar 2025

99,976

–

99,976

9 Mar 2026

99,977

–

99,977

9 Mar 2027

2021–23 LTIP

4.901

96,283

–

96,283

15 Mar 2024

96,283

–

96,283

15 Mar 2025

96,283

–

96,283

15 Mar 2026

96,283

–

96,283

15 Mar 2027

96,283

–

96,283

15 Mar 2028

2022-24 LTIP

4.876

–

96,772

–

96,772

14 Mar 2025

14 Mar 2026

–

96,772

–

96,772

14 Mar 2027

–

96,772

–

96,772

14 Mar 2028

–

96,772

–

96,772

14 Mar 2029

–

96,773

–

96,773

14 Mar 2030

2019 Sharesave

4.980

1,807

–

1,807

–

1 Dec 2022

2022 Sharesave

4.230

–

2,127

–

2,127

–

1 Feb 2026

210

Standard Chartered

– Annual Report 2022

Directors’ report

Addit

ional remunerat

ion disclosures

For the 2022-24 LTIP awards granted to Bill Winters and Andy Halford on 14 March 2022, the values granted were: Bill Winters: £3.1 mill

ion; Andy Halford

£2.0 mill

ion. The number of shares awarded

in respect of the LTIP took into account the lack of div

idend equ

ivalents (calculated by reference to market consensus

div

idend y

ield) such that the overall value of the award was mainta

ined. Performance measures apply to 2022-24 LTIP awards. The clos

ing price on the day before

grant was £4.876.

Div

idend equ

ivalent shares may be awarded on vesting for awards granted prior to 1 January 2018. On 31 March 2020, Standard Chartered announced that in

response to the request from the PRA and as a consequence of the unprecedented challenges facing the world due to the COVID-19 pandemic, the Board

decided to withdraw the recommendation to pay a ﬁnal div

idend for 2019. D

idend equ

ivalent shares allocated to the 2016-18 LTIP and 2017-19 awards vesting in

2022 did not include any shares relating to the cancelled div

idend.

Shares (before tax) were delivered to Bill Winters and Andy Halford from the vesting element of LTIP awards. The number of shares and the closing share price on

the day before the shares were delivered were as follows:

2016-18 LTIP: 6 May 2022, 36,023 shares delivered to Bill Winters and 21,510 shares delivered to Andy Halford. Previous day closing share price: £5.65.

2017-19 LTIP: 14 March 2022, 48,428 shares delivered to Bill Winters and 29,982 shares delivered to Andy Halford. Previous day closing share price: £4.876.

2018-20 LTIP: 10 March 2022, 28,178 shares delivered to Bill Winters and 17448 shares delivered to Andy Halford. Previous day closing share price: £4.931.

2019-21 LTIP: 21 March 2022, 30,604 shares delivered to Bill Winters and 19,571 shares delivered to Andy Halford. Previous day closing share price: £5.064.

4. Andy Halford chose to partic

ipant

in the 2022 Sharesave. This unvested option was granted on 28 November 2022 under the 2013 Plan – to exercise this option,

Andy has to pay an exercise price of £4.23 per share, which has been discounted by 20 per cent. On 29 December 2022, Andy Halford exercised his 2019 Sharesave

option under the 2013 Plan at an exercise price of £4.98 per share. The closing share price on the day before exercise was £6.292.

The unvested LTIP awards held by Bill Winters and Andy Halford are condit

ional r

ights. They do not have to pay towards these awards. Under these awards,

shares are delivered on vesting or as soon as practicable thereafter.

The vesting date relates to the end of the savings contract and the start of the six month exercise window.

As at 31 December 2022, none of the directors had registered an interest or short posit

ion

in the shares, underlying shares or

debentures of the Company or any of its associated corporations that was required to be recorded pursuant to section 352 of

the Securit

ies and Futures Ord

inance, or as otherwise notif

ied to the Company and The Stock Exchange of Hong Kong L

ited

pursuant to the Model Code for Securit

ies Transact

ions by Directors of Listed Issuers.

Histor

ical LTIP awards

The current posit

ion on projected vest

ing for unvested LTIP awards from the 2020 and 2021 performance years based on current

performance and share price as of 31 December 2022 is set out in the tables below. The TSR peer group for both awards is as set

out on page 199.

Current posit

ion on the 2021–23 LTIP award: projected part

ial vesting

Measure

Weight

ing

Performance for

min

imum vest

ing (25%)

Performance for

maximum vesting (100%)

2021–23 LTIP assessment as of

31 December 2022

RoTE in 2023 plus CET1 underpin

of the higher of 13% or the

min

imum regulatory

requirement

30%

6.0%

10.0%

RoTE between threshold and

maximum therefore ind

icat

ive partial

vesting

Relative TSR performance

against the peer group

30%

Median

Upper quartile

TSR posit

ioned between med

ian and

upper quartile therefore ind

icat

ive

partial vesting

Sustainab

ity

15%

Targets set for sustainab

ity measures linked

to the business strategy

Tracking above target performance

therefore ind

icat

ive partial vesting

Strategic measures

25%

Targets set for strategic measures linked to

the business strategy

Tracking above target performance

therefore ind

icat

ive partial vesting

Current posit

ion on the 2022–24 LTIP award: projected part

ial vesting

Measure

Weight

ing

Performance for

min

imum vest

ing (25%)

Performance for

maximum vesting (100%)

2022–24 LTIP assessment as of

31 December 2022

RoTE in 2024 plus CET1 underpin

of the higher of 13% or the

min

imum regulatory

requirement

30%

7.0%

11.0%

RoTE between threshold and

maximum therefore ind

icat

ive partial

vesting

Relative TSR performance

against the peer group

30%

Median

Upper quartile

TSR posit

ioned above upper quart

ile

therefore ind

icat

ive full vesting

Sustainab

ity

15%

Targets set for sustainab

ity measures linked

to the business strategy

Tracking above target performance

therefore ind

icat

ive partial vesting

Strategic measures

25%

Targets set for strategic measures linked to

the business strategy

Tracking above target performance

therefore ind

icat

ive partial vesting

The Committee assesses the value of LTIP awards on vesting and has the ﬂexib

ity to adjust if the formulaic outcome is not

considered to be an appropriate reﬂection of the performance achieved and to avoid windfall gains.

211

Standard Chartered

– Annual Report 2022

Directors’ report

The approach used to determine Group-wide total discret

ionary

incent

ives

in 2022 is explained on page 185 of this report.

The following tables show the income statement charge for these incent

ives.

Income statement charge for Group discret

ionary

incent

ives

2022

2021

Total discret

ionary

incent

ives

1,589

1,367

Less: discret

ionary

incent

ives that w

ill be charged in future years

(242)

(195)

Plus: current year charge for discret

ionary

incent

ives from pr

ior years

150

124

Total

1,497

1,296

Year in which income statement is expected to reﬂect discret

ionary

incent

ives

Actual

Expected

2021

2022

2023

2024

and beyond

Discret

ionary

incent

ives awarded for 2020 and earl

ier

107

Discret

ionary

incent

ives awarded for 2021

Discret

ionary

incent

ives awarded for 2022

–

117

125

Total

171

227

187

189

Allocation of the Group’s earnings between stakeholders

When consider

ing Group var

iable remuneration, the Committee takes account of shareholders’ concerns about relative

expenditure on pay and determines the allocation of earnings to expenditure on remuneration carefully, and has approached

this allocation in a disc

ipl

ined way over the past ﬁve years. The table below shows the distr

ibut

ion of earnings between

stakeholders over the past ﬁve years. The amount of corporate tax, includ

ing the bank levy,

is included in the table because

it is a sign

iﬁcant payment and

illustrates the Group’s contribut

ion through the tax system.

Actual

Allocation

2022

2021

2020

2019

2018

2022

2021

2020

2019

2018

Staff costs

7,618

7,668

6,886

7,122

7,074

Corporate taxation

includ

ing levy

1,486

1,138

1,193

1,720

1,763

Paid to shareholders

in div

idends

393

375

720

561

Approach to risk adjustment

Remuneration is aligned with our long-term interests and the time frame over which ﬁnanc

ial r

isks crystallise. All colleagues

have a duty to do the right thing and understand which behaviours are acceptable and unacceptable. Risk, control and

conduct behaviours are considered and assessed as part of continuous performance management.

Risk adjustment

What and how?

When?

Collective adjustments

•

At a collective level, the Group annual

scorecard and LTIP performance criter

include risk and control measures.

•

In addit

ion, the Comm

ittee carries out a

detailed review of all risk, control and conduct

matters includ

ing ongo

ing invest

igat

ions and

any matters raised by regulators, and may use

its discret

ion to adjust scorecard outcomes or

remuneration to reﬂect matters not

adequately captured by the scorecards.

•

Material restatement of the Group’s ﬁnanc

ials

•

Sign

iﬁcant fa

ilure in risk management.

•

Discovery of endemic problems in ﬁnanc

ial

reporting.

•

Financ

ial losses, due to a mater

ial breach of

regulatory guidel

ines.

•

The exercise of regulatory or government

action to recapital

ise the Group follow

ing

material ﬁnanc

ial losses.

Indiv

idual adjustments

•

Indiv

idual r

isk adjustments to variable

remuneration are considered based on the

material

ity of the

issue.

•

At an ind

idual level, risk adjustments can be

applied through the reduction in the value of

current year variable remuneration or the

applicat

ion of malus or clawback to unpa

id or

paid variable remuneration as appropriate, at

the Committee’s discret

ion.

•

Deemed to have: (i) caused in full or in part a

material loss for the Group as a result of

reckless, negligent or wilful actions, or (i

exhib

ited

inappropr

iate behav

iours, or (i

applied a lack of appropriate supervis

ion and

due dil

igence.

•

The ind

idual failed to meet appropriate

standards of ﬁtness and propriety.

212

Standard Chartered

– Annual Report 2022

Directors’ report

Addit

ional remunerat

ion disclosures

Pillar 3 disclosures on material risk takers’ remuneration and disclosures on the highest paid

employees

Identif

icat

ion of material risk takers

Indiv

iduals have been

ident

iﬁed as Mater

ial Risk Takers (MRTs) in line with the qualitat

ive and quant

itat

ive cr

iter

ia set by the

Prudential Regulation Authority (PRA) and Financ

ial Conduct Author

ity (FCA). MRTs are ident

iﬁed on both a: (

i) Standard

Chartered PLC (Group) basis; and (i

i) solo level consol

idated entit

ies under Standard Chartered Bank UK (Solo) bas

is.

Qualitat

ive cr

iter

The qualitat

ive cr

iter

ia broadly

ident

iﬁes the follow

ing colleagues as Group MRTs:

•

directors (both executive and non-executive) of Standard Chartered PLC

•

a member of senior management

•

senior colleagues with

in the aud

it, compliance, legal and risk functions

•

senior colleagues with

in Mater

ial Business Units (MBUs)

•

colleagues who are members of specif

ic comm

ittees

•

colleagues who are able to in

iate or approve credit risk exposures above a certain threshold and sign off on trading book

transactions at or above a specif

ic value at r

isk lim

•

colleagues whose professional activ

ies may have a sign

iﬁcant

impact on the risk proﬁle of a MBU and are above certain pay

thresholds

•

traders and senior colleagues in Financ

ial Markets who earn above certa

in pay thresholds.

Quantitat

ive cr

iter

The quantitat

ive cr

iter

ident

iﬁes colleagues:

•

who have been awarded total remuneration of GBP660,000 or more in the previous ﬁnanc

ial year

•

whose total remuneration in the preceding year is with

in the top 0.3 per cent of the Group or Solo ent

ity.

For the purpose of the Pillar 3 tables on pages 213 to 215, supervisory function is deﬁned as non-executive directors of

Standard Chartered PLC, management function is deﬁned as executive directors of Standard Chartered PLC and other

senior management is deﬁned as

senior managers under the Senior Manager and Certif

icat

ion Regime and members of

the Group Management Team.

Solo MRTs are ident

iﬁed based on s

ilar cr

iter

ia appl

ied to the Solo entity.

MRT remuneration delivery

Remuneration for MRTs was delivered in 2022 through a combinat

ion of salary, pens

ion, beneﬁts and variable remuneration.

Variable remuneration for MRTs is structured in line with the PRA and FCA’s remuneration rules. For the 2022 performance year,

the following structure applies:

•

At least 40 per cent of an MRT’s variable remuneration will be deferred over a min

imum per

iod of four years and a maximum

of seven years depending on the applicable ident

iﬁcation cr

iter

ia.

•

60 per cent of an MRT’s variable remuneration will be deferred if variable remuneration exceeds GBP500,000.

•

Non-deferred variable remuneration will be delivered 50 per cent in shares, subject to a min

imum 12 month retent

ion period,

and 50 per cent in cash.

•

At least 50 per cent of deferred variable remuneration will be delivered entirely in shares, subject to a min

imum 12 month

retention period (with the exception of deferred shares awarded to higher paid MRTs, which are subject to a six month

min

imum retent

ion period in line with the regulations).

•

For some MRTs, part of their 2022 variable remuneration may be in LTIP share awards which are released after a min

imum of

four years, subject to the satisfact

ion of performance measures and hold

ing periods.

•

As explained on page 211, all variable remuneration is subject to remuneration adjustment provis

ions. Th

is provides the Group

with the abil

ity to reduce or revoke var

iable remuneration in respect of a risk, control or conduct issue, event or behaviour.

•

Material risk takers are subject to a 2:1 maximum ratio of variable to ﬁxed remuneration.

213

Standard Chartered

– Annual Report 2022

Directors’ report

Remuneration awarded to MRTs for the ﬁnanc

ial year (REM1)

Management body

Other

senior

management

Other

ident

iﬁed

staff

Supervisory

function

Management

function

Fixed remuneration

Number of ident

iﬁed staff

580

Total ﬁxed remuneration

4.35

5.86

31.62

306.95

Cash-based

4.35

3.74

31.62

306.95

Shares or equivalent ownership interests

–

2.12

–

Share-linked instruments or equivalent non-cash instruments

–

Other instruments

–

Other forms

–

Variable remuneration

Number of ident

iﬁed staff

580

Total variable remuneration

–

9.52

45.64

315.74

Cash-based

–

1.51

18.14

160.03

Of which deferred

–

9.01

82.78

Shares or equivalent ownership interests

–

8.01

27.50

155.71

Of which deferred

–

6.50

18.38

82.79

Share-linked instruments or equivalent non-cash instruments

–

Of which deferred

–

Other instruments

–

Of which deferred

–

Other forms

–

Of which deferred

–

Total remuneration

4.35

15.38

77.26

622.69

Special payments to staff whose professional activ

ies have a material impact on inst

itut

ions’ risk proﬁle (MRTs) (REM2)

No special payments were made during the period.

214

Standard Chartered

– Annual Report 2022

Directors’ report

Addit

ional remunerat

ion disclosures

MRT deferred remuneration in 2022 (REM3)

Deferred and retained

remuneration

Total amount

deferred

remuneration

awarded for

performance

periods

Of which due

to vest in the

ﬁnancial year

Of which

vesting in

subsequent

ﬁnancial years

Amount of

performance

adjustment

made in the

ﬁnancial year

to deferred

remuneration

that was due

to vest in the

ﬁnancial year

Amount of

performance

adjustment

made in the

ﬁnancial year

to deferred

remuneration

that was due

to vest in

future

performance

years

Total amount

of adjustment

during the

ﬁnancial year

due to ex post

impl

adjustments

(i.e. changes

of value of

deferred

remuneration

due to the

changes of

prices of

instruments)

Total amount

of deferred

remuneration

awarded

before the

ﬁnancial year

actually paid

out in the

ﬁnancial year

Total of

amount of

deferred

remuneration

awarded for

performance

period that

has vested but

is subject to

retention

periods

Management body

Supervisory function

–

Cash-based

–

Shares or equivalent

ownership interests

–

Share-linked instruments

or equivalent non-cash

instruments

–

Other instruments

–

Other forms

–

Management body

Management function

45.75

16.68

29.07

(6.33)

11.73

10.35

4.98

Cash-based

–

Shares or equivalent

ownership interests

45.75

16.68

29.07

(6.33)

11.73

10.35

4.98

Share-linked instruments

or equivalent non-cash

instruments

–

Other instruments

–

Other forms

–

Other senior management

128.14

24.52

103.62

(11.48)

26.75

13.04

6.69

Cash-based

23.82

2.62

21.21

–

2.62

–

Shares or equivalent

ownership interests

104.32

21.90

82.41

(11.48)

26.75

10.42

6.69

Share-linked instruments

or equivalent non-cash

instruments

–

Other instruments

–

Other forms

–

Other ident

iﬁed staff

505.15

159.06

346.09

(0.18)

–

86.09

152.98

56.08

Cash-based

169.43

43.69

125.73

–

40.63

–

Shares or equivalent

ownership interests

296.05

104.80

191.26

(0.18)

–

75.92

101.78

56.08

Share-linked instruments

or equivalent non-cash

instruments

39.67

10.57

29.10

–

10.17

10.57

–

Other instruments

–

Other forms

–

Total amount

679.04

200.26

478.78

(17.99)

–

124.57

176.37

67.75

Includes LTIP award lapse following testing of performance condit

ions

215

Standard Chartered

– Annual Report 2022

Directors’ report

Remuneration of 1 mill

ion EUR or more per year (REM4)

Remuneration band

EUR

Number of employees

1,000,000 to below 1,500,000

148

1,500,000 to below 2,000,000

2,000,000 to below 2,500,000

2,500,000 to below 3,000,000

3,000,000 to below 3,500,000

3,500,000 to below 4,000,000

4,000,000 to below 4,500,000

–

4,500,000 to below 5,000,000

5,000,000 to below 6,000,000

6,000,000 to below 7,000,000

7,000,000 to below 8,000,000

–

8,000,000 to below 8,500,000

–

8,500,000 to below 9,000,000

9,000,000 to below 9,500,000

9,500,000 to below 10,000,000

–

10,000,000 to below 10,500,000

13,000,000 to below 13,500,000

Total

250

Data presented in EUR in accordance with the requirements of CRR Article 450, converted at the exchange rates used by European Commiss

ion for ﬁnancial

programming and the budget for December of the reporting year, as published on its website

Information on remuneration of staff whose professional activ

ies have a material impact on inst

itut

ions’ risk proﬁle (MRTs)

(REM5)

Management body remuneration

Business areas

Supervisory

function

Management

function

Total

Investment

banking

Retail

banking

Asset

management

Corporate

functions

Independent

internal

control

functions

All other

Total

Total number of

ident

iﬁed staff

263

163

133

612

Of which:

members of the

management

body

–

Of which: other

senior

management

–

Of which: other

ident

iﬁed staff

–

260

138

130

580

Total

remuneration of

ident

iﬁed staff

4.35

15.38

19.73

373.56

45.65

7.09

197.75

84.84

10.80

719.69

Of which:

variable

remuneration

–

9.51

208.92

25.68

3.10

94.67

33.75

4.78

370.90

Of which: ﬁxed

remuneration

4.35

5.87

10.22

164.64

19.97

3.99

103.08

51.09

6.02

348.79

216

Standard Chartered

– Annual Report 2022

Directors’ report

Addit

ional remunerat

ion disclosures

Remuneration of the ﬁve highest paid ind

iduals and the remuneration of senior management

In line with the requirements of The Stock Exchange of Hong Kong Lim

ited, the follow

ing table sets out, on an aggregate

basis, the annual remuneration of: (i) the ﬁve highest paid employees; and (i

i) sen

ior management for the year ended

31 December 2022.

Components of remuneration

Five highest

paid

$000

Senior

management

$000

Salary, cash allowances and beneﬁts in kind

19,110

28,317

Pension contribut

ions

349

1,417

Variable remuneration awards paid or receivable

31,235

42,254

Payments made on appointment

–

Remuneration for loss of ofﬁce (contractual or other)

–

243

Other

–

Total

50,694

72,231

Total HKD equivalent

397,190

565,953

The ﬁve highest paid ind

iduals include Bill Winters.

Senior management comprises the executive directors and the members of the Group Management Team at any point during 2022.

Value reported relates to contractual payments made for loss of ofﬁce.

Share award movements for the ﬁve highest paid ind

iduals for the year to 31 December 2022

LTIP

Deferred /Restricted

Sharesave

Outstanding at 1 January 2022

4,272,880

2,283,710

–

Granted

3,4,5

1,454,130

1,347,609

4,246

Lapsed

1,064,794

–

Vested/Exercised

178,688

533,892

–

Outstanding at 31 December 2022

4,483,528

3,097,427

4,246

Exercisable as at 31 December 2022

–

The ﬁve highest paid ind

iduals include Bill Winters.

Granted under the 2021 Plan and 2011 Plan. Employees do not contribute to the cost of these awards.

1,448,057 (LTIP) granted on 14 March 2022, 4,989 (LTIP) granted as a notional div

idend on 1 March 2022, 1,084 (LTIP) granted as a not

ional div

idend on 8 August

2022, 1,346,460 (Deferred/Restricted shares) granted on 14 March 2022, 774 (Deferred/Restricted shares) granted as a notional div

idend on 1 March 2022, 375

(Deferred/Restricted shares) granted as a notional div

idend on 8 August 2022 under the 2021 Share Plan. 4,246 (Sharesave) granted on 28 November 2022 under

the 2013 Sharesave Plan.

LTIP and deferred/restricted shares were granted at a share price of £4.876, being the closing price on the last trading day preceding the grant date. The vesting

period for these awards ranges from 1 to 7 years.

For Sharesave granted in 2022 the exercise price is £4.23 per share, a 20% discount from the closing price on 1 November 2022. The closing price on 1 November

2022 was £5.282.

For details of awards and options for Bill Winters and Andy Halford refer to pages 209 and 210.

For a view of share awards and options for all employees refer to page 436.

The accounting standard adopted for share awards is IFRS2: please refer to page 434 for details.

217

Standard Chartered

– Annual Report 2022

Directors’ report

The table below shows the emoluments of: (i) the ﬁve highest paid employees; and (i

i) sen

ior management for the year ended

31 December 2022.

Remuneration band

HKD

Remuneration band

USD equivalent

Number of employees

Five highest

paid

Senior

management

11,000,001 - 11,500,000

1,403,921 - 1,467,735

20,000,001 - 20,500,000

2,552,583 - 2,616,398

20,500,001 - 21,000,000

2,616,398 - 2,680,212

21,000,001 - 21,500,000

2,680,212 - 2,744,027

23,500,001 - 24,000,000

2,999,285 - 3,063,100

25,000,001 - 25,500,000

3,190,729 - 3,254,544

25,500,001 - 26,000,000

3,254,544 - 3,318,358

28,500,001 - 29,000,000

3,637,431 - 3,701,246

29,500,001 - 30,000,000

3,765,060 - 3,828,875

39,000,001 - 39,500,000

4,977,537 - 5,041,352

40,000,001 - 40,500,000

5,105,167 - 5,168,981

46,500,001 - 47,000,000

5,934,756 - 5,998,571

52,500,001 - 53,000,000

6,700,531 - 6,764,345

73,500,001 - 74,000,000

9,380,743 - 9,444,558

75,500,001 - 76,000,000

9,636,002 - 9,699,816

83,500,001 - 84,000,000

10,657,035 - 10,720,849

110,500,001 - 111,000,000

14,103,022 - 14,166,837

Total

Senior management comprises the executive directors and the members of the Group Management Team at any point during 2022

The exchange rates used in this report

Unless an alternative exchange rate is detailed in the notes to the relevant table, the exchange rates used to convert the

disclosures to US dollars are set out in the table below.

2022

2021

EUR

0.9520

0.8421

GBP

0.8106

0.7246

HKD

7.8352

7.7704

Shir

ish Apte

Chair of the Remuneration Committee

16 February 2023

218

Standard Chartered

– Annual Report 2022

Directors’ report

Other disclosures

The Directors’ report for the year ended 31 December 2022

comprises 134 to 231 of this report (together with the sections

of the Annual Report incorporated by reference). The

Company has chosen, in accordance with section 414C(11) of

the Companies Act 2006, and as noted in this Directors’

report, to include certain matters in its Strategic report that

would otherwise be disclosed in this Directors’ report. Both the

Strategic report and the Directors’ report have been drawn up

and presented in accordance with English company law, and

the liab

ies of the d

irectors in connection with that report

shall be subject to the lim

itat

ions and restrict

ions prov

ided by

such law. Other informat

ion to be d

isclosed in the Directors’

report is given in this section. In addit

ion to the requ

irements

set out in the Disclosure Guidance and Transparency Rules

relating to the Annual Report, informat

ion requ

ired by UK

List

ing Rule 9.8.4 to be

included in the Annual Report, where

applicable, is set out in the table below and cross-referenced.

Information to be included in the Annual Report

(UK List

ing Rules 9.8.4)

Relevant List

ing Rule

Pages

LR 9.8.4 (1) (2) (5-14) (A) (B)

N/A

LR 9.8.4 (4)

197, 199 and 200

Princ

ipal act

ies

We are a leading internat

ional bank

ing group, with over

160 years of history in some of the world’s most dynamic

markets. Our purpose is to drive commerce and prosperity

through our unique divers

ity. The Group’s roots

in trade

ﬁnance and commercial banking have been at the core of its

success throughout its history, but the Group is now more

broadly based across Consumer, Private and Business Banking

and Ventures in its footprint markets in Asia, Africa and the

Middle East. The Group operates in the UK and overseas

through a number of subsid

iar

ies, branches and ofﬁces.

Further details on our business, includ

ing key performance

ind

icators,

can be found with

in the

Strategic report

on pages 1 to 133.

Fair, balanced and understandable

On behalf of the Board, the Audit Committee has reviewed

the Annual Report and the process by which the Group

believes that the Annual Report, is fair, balanced and

understandable and provides the informat

ion necessary for

shareholders to assess the posit

ion and performance, strategy

and business model of the Group. Following its review, the

Audit Committee has advised the Board that such a

statement can be made in the Annual Report.

UK Corporate Governance Code compliance

The table below contains examples of where the Company has applied the princ

iples of the UK Corporate Governance Code

this Annual Report.

A copy of the UK Corporate Governance Code can be found at

frc.org.uk

Princ

iples

Pages/reference

Board leadership

and company

purpose

A – Promoting long-term sustainable success and value

2 to 133, 136 to 230

B – Purpose, value, strategy and alignment with culture

2 to 133, 136 to 230

C – Performance measures, controls and risk management

136, 147 to 150 and 163 to 175

D – Shareholder and other stakeholder engagement

54 to 124, 136, 149 and 158 to 162

E – Workforce polic

ies and pract

ices

60 to 124, 168 and 177

Div

ion of

responsib

ies

F – Chair role and responsib

ies

138, 150 and 152

G – Board roles and responsib

ies

138 to 142, 150, 152, 157, 179 to 183

H – Non-executive directors role and capacity

150, 152, 157 and 181

I – Board effectiveness and efﬁc

iency

156

Composit

ion,

succession

and evaluation

J – Board appointments and succession plans

179 to 183

K – Board skills, experience, knowledge and tenure

138 to 142, 179 to 183

L – Board evaluation of composit

ion, d

ivers

ity and effect

iveness

154, 156, 169, 175, 178, 183, 191

Audit, risk and

internal control

M – Independence and effectiveness of internal and external audit functions,

integr

ity of ﬁnancial and narrat

ive statements

163 to 169

N – Fair, balanced and understandable assessment of the Company’s posit

ion

and prospects

218

O – Risk management and internal controls

147, 163 to 175

Remuneration

P – Remuneration polic

ies and pract

ices

184 to 217

Q – Procedure for developing remuneration policy

Committee terms of reference

R – Independent judgement and discret

ion when author

ing remunerat

ion

outcomes

Committee terms of reference

The Remuneration Committee has written terms of reference that can be viewed at

sc.com/termsofreference

219

Standard Chartered

– Annual Report 2022

Directors’ report

Events after the balance sheet date

For details on post balance sheet events, see Note 37 to the

ﬁnancial statements.

Code for Financ

ial Report

ing Disclosure

The Group’s 2022 ﬁnancial statements have been prepared

accordance with the princ

iples of the UK F

inance Disclosure

Code for Financ

ial Report

ing Disclosure.

Disclosure of informat

ion to aud

itor

As far as the directors are aware, there is no relevant audit

informat

ion of wh

ich the Group statutory auditor, EY, is

unaware. The directors have taken all reasonable steps to

ascertain any relevant audit informat

ion and ensure that the

Group statutory auditors are aware of such informat

ion.

Viab

ity and going concern

Having made appropriate enquir

ies, the Board

is satisf

ied

that the Company and the Group as a whole has adequate

resources to continue in operation and meet its liab

ies as

they fall due for a period of at least 12 months from 16

February 2023 and therefore continues to adopt the going

concern basis in preparing the ﬁnanc

ial statements.

The directors’ viab

ity statement in respect to the Group can

be found in the Strategic report on pages 132 and 133, while

the directors’ going concern considerat

ions of the Group can

be found on page 350.

Sufﬁciency of publ

ic ﬂoat

As at the date of this report, the Company has mainta

ined the

prescribed public ﬂoat under the rules governing the list

ing of

securit

ies on The Stock Exchange of Hong Kong L

ited (the

“Hong Kong List

ing Rules”), based on the

informat

ion publ

icly

available to the Company and with

in the knowledge of the

directors.

Research and development

During the year, the Group invested $1.98 bill

ion (2021:

$1.89 bill

ion)

in research and development, of which

$0.94 bill

ion (2021: $0.94 b

ill

ion) was recogn

ised as an expense.

The research and development investment primar

ily related

to the planning, analysis, design, development, testing,

integrat

ion, deployment and

ial support of technology

systems.

Polit

ical donat

ions

The Group has a policy in place which prohib

its donat

ions

being made that would: (i) improperly inﬂuence legislat

ion

or regulation, (i

i) promote pol

ical v

iews or ideolog

ies, and

i) fund polit

ical causes. In al

ignment to this, no polit

ical

donations were made in the year ended 31 December 2022.

Directors and their interests

The membership of the Board, together with their

biograph

ical deta

ils, are given on pages 138 to 142. Details of

the directors’ beneﬁc

ial and non-beneﬁcial

interests in the

ordinary shares of the Company are shown in the Directors’

remuneration report on pages 184 to 217. The Group operates

a number of share-based arrangements for its directors and

employees.

Details of these arrangements are included in the Directors’

remuneration report and in Note 31 to the ﬁnanc

ial statements

The Company has received from each of the INEDs an annual

conﬁrmation of

independence pursuant to Rule 3.13 of the

Hong Kong List

ing Rules and st

ill considers all of the non-

executive directors to be independent.

At no time during the year did any director hold a material

interest in any contracts of sign

iﬁcance w

ith the Company or

any of its subsid

iary undertak

ings.

In accordance with the Companies Act 2006, we have

established a process requir

ing d

irectors to disclose proposed

outside business interests before any are entered into. This

enables prior assessment of any conﬂict or potential conﬂict of

interest and any impact on time commitment. On behalf of

the Board, the Governance and Nominat

ion Comm

ittee

reviews exist

ing conﬂ

icts of interest annually to consider if they

continue to be conﬂicts of interest, and also to revis

it the terms

upon which they were determined to be. The Board is satisﬁed

that our processes in this respect continue to operate

effectively.

Subject to company law, the Articles of Associat

ion and the

authority granted to directors in general meeting, the

directors may exercise all the powers of the Company and

may delegate authorit

ies to comm

ittees. The Articles of

Associat

ion conta

in provis

ions relat

ing to the appointment,

re-election and removal of directors. Newly appointed

directors retire at the AGM following appointment and are

elig

ible for elect

ion. All directors are nominated for annual

re-election by shareholders subject to continued satisfactory

performance based upon their annual assessment.

Non-executive directors are appointed for an in

ial period of

one year and subject to (re)election by shareholders at AGMs,

in line with the UK Corporate Governance Code 2018.

The Company has granted indemn

ies to all of its directors on

terms consistent with the applicable statutory provis

ions.

Qualify

ing th

ird-party indemn

ity prov

ions for the purposes

of section 234 of the Companies Act 2006 were accordingly in

force during the course of the ﬁnanc

ial year ended

31 December 2022 and remain in force at the date of this

report.

Qualify

ing pens

ion scheme indemn

ies

Qualify

ing pens

ion scheme indemn

ity prov

ions (as deﬁned

by section 235 of the Companies Act 2006) were in force

during the course of the ﬁnanc

ial year ended 31 December

2022 for the beneﬁt of the UK’s pension fund corporate trustee

(Standard Chartered Trustees (UK) Lim

ited), and rema

in in

force at the date of this report.

Sign

iﬁcant agreements

The Company is not party to any sign

iﬁcant agreements that

would take effect, alter or terminate following a change of

control of the Company. The Company does not have

agreements with any director or employee that would provide

compensation for loss of ofﬁce or employment resulting from

a takeover, except that provis

ions of the Company’s share

schemes and plans may cause options and awards granted

to employees under such schemes and plans to vest on a

takeover.

220

Standard Chartered

– Annual Report 2022

Directors’ report

Other disclosures

Future developments in the business of the Group

An ind

icat

ion of likely future developments in the business of

the Group is provided in the Strategic report.

Results and div

idends

2022: paid inter

im d

idend of 4 cents per ord

inary share

(2021: paid inter

im d

idend of 3 cents per ord

inary share)

2022: proposed ﬁnal div

idend of 14 cents per ord

inary share

(2021: paid ﬁnal div

idend of 9 cents per ord

inary share)

2022: total div

idend of 18 cents per ord

inary share

(2021: total div

idend, 12 cents per ord

inary share)

Share capital

The issued ordinary share capital of the Company was

reduced by a total of 184,369,245 over the course of 2022. This

was due to the cancellation of ordinary shares as part of the

Company’s two share buy-back programmes. No ordinary

shares were issued during the year. The Company has one

class of ordinary shares, which carries no rights to ﬁxed

income. On a show of hands, each member present has the

right to one vote at our general meetings. On a poll, each

member is entitled to one vote for every $2 nominal value of

share capital held.

The issued nominal value of the ordinary shares represents

86.8 per cent of the total issued nominal value of all share

capital. The remain

ing 13.2 per cent compr

ises preference

shares, which have preferential rights to income and capital

but which, in general, do not confer a right to attend and vote

at our general meetings.

Further details of the Group’s share capital can be found in

Note 28 to the ﬁnancial statements

There are no specif

ic restr

ict

ions on the s

ize of a holding nor

on the transfer of shares, which are both governed by the

general provis

ions of the Art

icles of Associat

ion and preva

ing

legislat

ion. There are no spec

ic restr

ict

ions on vot

ing rights

and the directors are not aware of any agreements between

holders of the Company’s shares that may result in restrict

ions

on the transfer of securit

ies or on vot

ing rights. No person has

any special rights of control over the Company’s share capital

and all issued shares are fully paid.

Articles of Associat

ion

The Articles of Associat

ion may be amended by spec

ial

resolution of the shareholders.

A copy of the Company’s Articles of Associat

ion can be found

on our website here

sc.com/investors

Authority to purchase own shares

At the AGM held on 4 May 2022, our shareholders renewed

the Company’s authority to make market purchases of up to

302,578,862 ordinary shares, equivalent to approximately

10 per cent of issued ordinary shares as at 21 March 2022,

and up to all of the issued preference share capital.

The authority to make market purchases up to 10 per cent

of issued ordinary share capital was used during the year

through two buy-back programmes announced in February

and July 2022. These were util

ised to reduce the number of

ordinary shares in issue and as part of the Group’s approach

to div

idend growth and cap

ital returns. The ﬁrst share

buy-back programme was launched on 21 February 2022

and ended on 19 May 2022. The second share buy-back

programme was launched on 1 August 2022 and ended on

10 October 2022. A total of 184,369,245 ordinary shares with a

nominal value of $0.50 were re-purchased for an approximate

aggregate considerat

ion pa

id of $1,250 mill

ion.

A monthly breakdown of the shares purchased during the

period includ

ing the lowest and h

ighest price paid per share is

set out in Note 28 to the ﬁnanc

ial statements. All ord

inary

shares which were bought back were cancelled.

In accordance with the terms of a waiver granted by The

Stock Exchange of Hong Kong Lim

ited (HKSE) as

subsequently modif

ied, the Company w

ill comply with the

applicable law and regulation in the UK in relation to holding

of any shares in treasury and with the condit

ions of grant

ing

the waiver by the HKSE. No treasury shares were held during

the year.

Further details can be found in Note 28 to the ﬁnanc

ial statements

Authority to issue shares

The Company is granted authority to issue shares by the

shareholders at its AGM. The size of the authorit

ies granted

depends on the purposes for which shares are to be issued

and is with

in appl

icable legal and regulatory requirements.

Shareholder rights

Under the Companies Act 2006, shareholders holding 5 per

cent or more of the paid-up share capital of the Company

carrying the right of voting at general meetings of the

Company are able to require the directors to hold a general

meeting. A request may be in hard copy or electronic form

and must be authenticated by the shareholders making it.

Where such a request has been duly lodged with the

Company, the directors are obliged to call a general meeting

with

in 21 days of becom

ing subject to the request and must

set a date for the meeting not more than 28 days from the

date of the issue of the notice convening the meeting.

Under the Companies Act 2006, shareholders holding 5 per

cent or more of the total voting rights at an AGM of the

Company, or 100 shareholders entitled to vote at the AGM

with an average of at least £100 paid-up share capital per

shareholder, are entitled to require the Company to circulate a

resolution intended to be moved at the Company’s next AGM.

Such a request must be made not later than six weeks before

the AGM to which the request relates or, if later, the time

notice is given of the AGM. The request may be in hard copy or

electronic form, must ident

ify the resolut

ion of which notice is

to be given and must be authenticated by the shareholders

making it.

Shareholders are also able to put forward proposals to shareholder

meetings and enquir

ies to the Board and/or the Sen

ior Independent

Director by using the ‘contact us’ informat

ion on the Company’s

website sc.com or by email

ing the Group Corporate Secretar

iat at

group-corporate.secretariat@sc.com

Major interests in shares and voting rights

As at 31 December 2022, Temasek Holdings (Private) Lim

ited

(Temasek) is the only shareholder that has an interest of more

than 10 per cent in the Company’s issued ordinary share

capital carrying a right to vote at any general meeting.

Information provided to the Company pursuant to the

Financ

ial Conduct Author

ity’s (FCA) Disclosure and

Transparency Rules (DTRs) is published on a Regulatory

Information Service and on the Company’s website.

221

Standard Chartered

– Annual Report 2022

Directors’ report

As at 10 February 2023, the Company has been notif

ied of the

following informat

ion,

in accordance with DTR 5, from holders

of notif

iable

interests in the Company’s issued share capital.

The informat

ion prov

ided in the table below was correct at

the date of notif

icat

ion; however, the date received may not

have been with

in 2022. It should be noted that these hold

ings

are likely to have changed since the Company was notif

ied.

However, notif

icat

ion of any change is not required until the

next notif

iable threshold

is crossed.

Ahead of join

ing the Group in May 2022, Shir

ish Apte stepped

down as an independent non-executive director of Pierfront

Capital Mezzanine Fund, a 90 per cent owned subsid

iary of

Temasek.

Notif

iable

interests

Interest in

ordinary shares

(based on voting

rights disclosed)

Percentage of

capital disclosed

Nature of holding as per disclosure

Temasek Holdings (Private) Lim

ited

474,751,383

16.00

Indirect

BlackRock Inc.

183,640,172

5.55

Indirect (5.01%)

Securit

ies Lend

ing (0.39%)

Contracts for Difference (0.14%)

Dodge & Cox

150,620,884

5.08

Indirect

Related party transactions

Details of transactions with directors and ofﬁcers and other

related parties are set out in Note 36 to the ﬁnanc

ial

statements.

Connected/continu

ing connected transact

ions

By virtue of its shareholding of over 10 per cent in the

Company, Temasek and its associates are related parties and

connected persons of the Company for the purposes of the

UK List

ing Rules and the Rules Govern

ing the List

ing of

Securit

ies on The Stock Exchange of Hong Kong L

ited

(“HKEx”) (“the HK List

ing Rules”) respect

ively (together “the

Rules”).

The Rules are intended to ensure that there is no favourable

treatment to Temasek or its associates to the detriment of

other shareholders in the Company. Unless transactions

between the Group and Temasek or its associates are

specif

ically exempt under the Rules or are subject to a spec

waiver, they may require a combinat

ion of announcements,

reporting and independent shareholders’ approval.

On 12 November 2021, the HKEx extended a waiver (the

“Waiver”), it previously granted to the Company for the

revenue banking transactions with Temasek which do not fall

under the passive investor exemption (“the Passive Investor

Exemption”) under Rules 14A.99 and 14A.100 of the HK List

ing

Rules. Under the Waiver, the HKEx agreed to waive the

announcement requirement, the requirement to enter into a

written agreement and set annual caps, and the annual

report disclosure (includ

ing annual rev

iew) requirements

under Chapter 14A of the HK List

ing Rules for the three-year

period ending 31 December 2024 on the condit

ions that:

a) The Company will disclose details of the Waiver (includ

ing

nature of the revenue banking transactions with Temasek

and reasons for the Waiver) in subsequent annual reports;

and

b) The Company will continue to monitor the revenue banking

transactions with Temasek during the three years ending 31

December 2024 to ensure that the 5 per cent threshold for

the revenue ratio will not be exceeded.

The main reasons for seeking the Waiver were:

•

The nature and terms of revenue banking transactions may

vary and evolve over time; having ﬁxed-term written

agreements would not be suitable to accommodate the

various banking needs of the Company’s customers

(includ

ing Temasek) and would be

impract

ical and unduly

burdensome.

•

It would be impract

icable to est

imate and determine an

annual cap on the revenue banking transactions with

Temasek as the volume and aggregate value of each

transaction are uncertain and unknown to the Company as

a banking group due to multiple factors includ

ing market

driven factors.

•

The revenues generated from revenue banking transactions

were ins

ign

icant. W

ithout a waiver from the HKEx or an

applicable exemption, these transactions would be subject

to various percentage ratio tests which cater for different

types of connected transactions and as such may produce

anomalous results.

For the year ended 31 December 2022, the Group provided

Temasek with money market and foreign exchange revenue

transactions that were revenue transactions in nature.

As a result of the Passive Investor Exemption and the Waiver,

the vast majority of the Company’s transact

ions with Temasek

and its associates fall outside of the connected transactions

regime. However, non-revenue transactions with Temasek or

any of its associates continue to be subject to monitor

ing for

connected transaction issues.

The Company conﬁrms that:

•

The revenue banking transactions entered into with

Temasek in 2022 were below the 5 per cent threshold for the

revenue ratio test under the HK List

ing Rules; and

•

It will continue to monitor revenue banking transactions

with Temasek during the three years ending 31 December

2024 to ensure that the 5 per cent threshold for the revenue

ratio will not be exceeded.

The Company therefore satisf

ied the cond

ions of the Wa

iver.

222

Standard Chartered

– Annual Report 2022

Directors’ report

Other disclosures

Non-revenue transaction with Temasek

The following non-revenue transaction between Temasek

and the Group was entered into and during the year ended

31 December 2022 and relevant announcement had been

made by the Company on 3 November 2022 in accordance

with the HK List

ing Rules:

On 3 November 2022, the Company’s wholly owned

subsid

iary, Standard Chartered Overseas Hold

ings Lim

ited

(“SCOHL”), entered into a share subscript

ion agreement w

ith

Partior Pte. Ltd. (“Partior”) (“Share Subscript

ion Agreement”),

pursuant to which SCOHL agreed to subscribe for 31,923

ordinary shares and 9,036,404 Series A preference shares in

Partior (collectively the “Subscript

ion Shares”) at a pr

ice of

US$2.573 per Subscript

ion Share, and for a total subscr

ipt

ion

price of US$23,332,806 in order to acquire 25% shareholding in

Partior, subject to the satisfact

ion of certa

in condit

ions.

On completion of the Share Subscript

ion Agreement, SCOHL

will enter into a shareholders’ agreement (“Shareholders’

Agreement”) with Partior, Silverheels Investments Pte. Ltd.

(“Silverheels”), DBS Finnovat

ion Pte. Ltd. and JPMC Strateg

Investments I Corporation (with the latter two collectively the

“Other Transaction Parties”). The Shareholders’ Agreement

contains terms and shareholder rights customary for

transactions of this nature, includ

ing as to board

representation, voting, transfer restrict

ions and ex

it provis

ions.

Regarding the Other Transaction Parties, to the best of the

Company’s knowledge, informat

ion and bel

ief having made

all reasonable enquiry, save for DBS Finnovat

ion Pte. Ltd.

which Temasek is an ind

irect substant

ial shareholder, JPMC

Strategic Investments I Corporation and its ultimate beneﬁc

ial

owner are both independent third parties of the Company

and connected persons of the Company. Immediately before

the sign

ing of the Share Subscr

ipt

ion Agreement, Part

ior’s

shares were held by Silverheels and the Other Transaction

Parties in equal proportion.

The equity investment in Partior builds on the Company’s

desire to shape the Future of Payments by assuring the

Company could provide a payment foundation that is able to

meet its clients’ emerging needs. It allows the Company to

deepen its blockchain innovat

ion capab

ies and ramp up its

commitment to build

ing a more transparent, efﬁcient and

secure infrastructure for global value movement.

As Temasek is a substantial shareholder of the Company as

deﬁned under the HK List

ing Rules, Temasek

is a connected

person of the Company. By virtue of Temasek holding more

than 30% of its issued share capital, via Silverheels, Temasek’s

ind

irect wholly-owned subs

iary, Part

ior is also a connected

person of the Company. Pursuant to Chapter 14A of the HK

List

ing Rules, SCOHL’s entry

into the Share Subscript

ion

Agreement between SCOHL and Partior and the

Shareholders’ Agreement between SCOHL, Partior, Silverheels

and the Other Transaction Parties constitutes a connected

transaction for the Company.

As at 31 December 2022, Standard Chartered Overseas

Holdings Lim

ited had changed

its name to Standard

Chartered Strategic Investments Lim

ited.

Fixed assets

Details of addit

ions to ﬁxed assets are presented

in Note 18 to

the ﬁnancial statements.

Loan capital

Details of the loan capital of the Company and its subsid

iar

ies

are set out in Notes 22 and 27 to the ﬁnanc

ial statements.

Debenture issues and equity-linked agreements

During the ﬁnanc

ial year ended 31 December 2022, the

Company made no issuance of debentures or equity-linked

agreements.

Risk management

The Board is responsible for mainta

ing and review

ing the

effectiveness of the risk management system. An ongoing

process for ident

ify

ing, evaluating and managing the

sign

iﬁcant r

isks that we face is in place. The Board is satisf

ied

that this process constitutes a robust assessment of all of the

princ

ipal r

isks, topical and emerging risks and Integrated risks

facing the Group, includ

ing those that would threaten

its

business model, future performance, solvency or liqu

ity.

The Group’s Risk Management Framework and System of Internal Control

applies only to wholly controlled subsid

iar

ies of the Group, and not to

Associates, Joint Ventures or Structured Entit

ies of the Group.

Key areas of risk on ﬁnanc

ial

instruments for the directors

included the impa

irment of loans and advances and

valuation of ﬁnanc

ial

instruments held at fair value. This risk

assessment and management is explained further in the

Audit Committee Key areas and Action taken on pages 164

and 165.

The Risk review and Capital review on

pages 236 and 325

sets out the

princ

ipal r

isks, topical and emerging risks and integrated risks, our

approach to risk management, includ

ing our r

isk management

princ

iples, an overv

iew of our Enterprise Risk Management Framework

and the risk management and governance practices for each princ

ipal

risk type. The Board-approved Risk Appetite Statement can be found

pages 301 to 309

In accordance with Article 435(1)(e) of the UK onshored

Capital Requirements Regulation, and the Disclosure (CRR)

Part of the PRA Rulebook, the Board Risk Committee, on

behalf of the Board, has considered the adequacy of the risk

management arrangements of the Group and has sought

and received assurance that the risk management systems in

place are adequate with regard to the Group’s proﬁle and

strategy.

Internal control

The Board is responsible for mainta

ing and review

ing the

effectiveness of the internal control system. Its effectiveness is

reviewed regularly by the Board, its committees, the

Management Team and Group Internal Audit.

For the year ended 31 December 2022, the Board Risk

Committee has reviewed the effectiveness of the Group’s

system of internal control. As part of this review, afﬁrmat

ion

was received from the Interim GCRO (in situ at the time of the

review as the new GCRO awaited regulatory approval) that

the Group’s risk management and internal control framework

is materially effective and improvement areas were

highl

ighted for management attent

ion. Group Internal Audit

represents the third line of defence and provides independent

assurance of the effectiveness of management’s control of

business activ

ies (the ﬁrst line) and of the control processes

mainta

ined by the R

isk Framework Owners and Policy Owners

(the second line). The audit programme includes obtain

ing an

understanding of the processes and systems under audit

review, evaluating the design of controls, and testing the

operating effectiveness and outcomes of key controls. The

work of Group Internal Audit is focused on the areas of

greatest risk as determined by a risk-based assessment

methodology. The Board considers the internal control

systems of the Company to be effective and adequate.

The Group’s Risk Management Framework and System of Internal Control

applies only to wholly controlled subsid

iar

ies of the Group, and not to

Associates, Joint Ventures or Structured Entit

ies of the Group.

223

Standard Chartered

– Annual Report 2022

Directors’ report

Group Internal Audit reports regularly to the Audit Committee,

the Group Chairman and the Group Chief Executive; and the

Group Head, Internal Audit reports directly to the Chair of the

Audit Committee and admin

istrat

ively to the Group Chief

Executive. The ﬁnd

ings of all adverse aud

its are reported to

the Audit Committee, the Group Chairman and the Group

Chief Executive where immed

iate correct

ive action is required.

The Board Risk Committee is responsible for exercis

ing

oversight, on behalf of the Board, of the key risks of the Group.

It reviews the Group’s Risk Appetite Statement and Enterprise

Risk Management Framework and makes recommendations

to the Board. The Audit Committee is responsible for oversight

and advice to the Board on matters relating to ﬁnanc

ial

reporting. The Committee’s role is to review, on behalf of the

Board, the Group’s internal controls includ

ing

internal ﬁnanc

ial

controls.

The risk management approach starting on

page 295

describes the

Group’s risk management oversight committee structure.

Our business is conducted with

in a developed control

framework, underpinned by policy statements and standards.

There are written polic

ies and standards des

igned to ensure

the ident

iﬁcation and management of r

isk, includ

ing Cred

Risk, Traded Risk, Treasury Risk, Operational and Technology

Risk, Information and Cyber Security Risk, Compliance Risk,

Financ

ial Cr

ime Risk, Model Risk, Climate Risk and

Reputational and Sustainab

ity Risk. The Board has

established a management structure that clearly deﬁnes

roles, responsib

ies and report

ing lines.

Delegated authorit

ies are documented and commun

icated.

Executive risk committees regularly review the Group’s risk

proﬁle. The performance of the Group’s businesses is reported

regularly to senior management and the Board. Performance

trends and forecasts, as well as actual performance against

budgets and prior periods, are monitored closely. Financ

ial

informat

ion

is prepared using appropriate accounting

polic

ies, wh

ich are applied consistently.

Operational procedures and controls have been established

to facil

itate complete, accurate and t

imely processing of

transactions and the safeguarding of assets. These controls

include appropriate segregation of duties, the regular

reconcil

iat

ion of accounts and the valuation of assets and

posit

ions. In respect of handl

ing ins

ide

informat

ion, we have

applied relevant controls on employees who may handle

ins

ide

informat

ion,

includ

ing controls over the d

issem

inat

ion

of such informat

ion and the

ir dealings in the Company’s

shares. Such systems are designed to manage rather than

elim

inate the r

isk of failure to achieve business object

ives and

can only provide reasonable and not absolute assurance

against material misstatement or loss.

Employee polic

ies and engagement

We work hard to ensure that our employees are kept informed

about matters affecting or of interest to them, and more

importantly have the opportunit

ies to prov

ide feedback and

engage in a dialogue.

We continue to listen and act on feedback from colleagues

to ensure internal communicat

ions are t

imely, informat

ive,

meaningful, and in support of the Group’s strategy and

transformation. In addit

ion to the Br

idge (our primary internal

communicat

ions platform) wh

ich allows colleagues to receive

key updates, exchange ideas and provide feedback, we also

leverage a range of channels includ

ing ema

il, dig

ital

newsletters with customised content for each employee

segment, audio and video calls, virtual and face-to-face

townhalls, and other staff engagement and recognit

ion

events. To continue to improve the way we communicate

and ensure our employee communicat

ions rema

in relevant,

we also period

ically analyse and measure the

impact of our

communicat

ions through a range of survey and feedback

tools. We are currently assessing our suite of communicat

ion

channels as we prepare to launch improved solutions and

discont

inue those that are less effect

ive.

Our senior leaders and people leaders continue to play a

crit

ical role

in engaging our teams across the network,

ensuring that they are kept up to date on key business

developments related to our performance and strategy. We

provide addit

ional support to our people leaders w

ith specif

calls and communicat

ions packs to help them prov

ide context

and guidance to their team members to better understand

their role in executing and deliver

ing the Group’s strategy.

Across the organisat

ion, regular team meet

ings with people

leaders, one-to-ones and various management meetings

provide an important platform for colleagues to discuss and

clarify key issues. Regular performance conversations provide

the opportunity to discuss how ind

iduals, the team and the

business area have contributed to our overall performance

and how any compensation awards relate to this. The Group’s

senior leadership also regularly share global, business,

function, region and market updates on performance,

strategy, structural changes, HR programmes, community

involvement and other campaigns.

The Board engages with and listens to the views of the

workforce through several sources, includ

ing through

interact

ive engagement sess

ions. More informat

ion can be

found on pages 162 and 177 in the Directors’ report.

Employees, past, present and future can follow our progress

through the Group’s LinkedIn network and Facebook page,

as well as other social network channels includ

ing Instagram,

which collectively have over 2.4 mill

ion followers.

The diverse range of internal and external communicat

ion

tools and channels we have put in place ensure that all our

colleagues receive timely and relevant informat

ion to support

their effectiveness.

The wellbeing of our employees is central to our think

ing

about beneﬁts and support, so that they can thrive at work

and in their personal lives. Our Group min

imum standards

provide employees with a range of ﬂexible working options,

in relation to both location and working patterns. In terms of

leave, employees are provided with at least thirty days’ leave

(through annual leave and public holidays), a min

imum of

twenty calendar weeks’ fully paid maternity leave, a min

imum

of two calendar weeks of leave for spouses or partners, and

two calendar weeks for adoption leave. Combined, this is

above the International Labour Organisat

ion m

imum

standards.

224

Standard Chartered

– Annual Report 2022

Directors’ report

Other disclosures

We seek to build productive and enduring partnerships with

various employee representative bodies (includ

ing un

ions and

work councils). In our recognit

ion and

interact

ions, we are

heavily inﬂuenced by the 1948 United Nations Universal

Declaration of Human Rights (UDHR), and several

International Labour Organisat

ion (ILO) convent

ions includ

ing

the Right to Organise and Collective Bargain

ing Convent

ion,

1949 (No. 98) and the Freedom of Associat

ion and Protect

ion

of the Right to Organise Convention, 1948 (No. 87). 14 per cent

of employees across 19 markets have collective representation

through unions or employee representative bodies. The

working condit

ions and terms of employment of other

employees are based on our Group and country polic

ies, and

in accordance with ind

idual employment contracts issued by

the Group.

The Group Grievance Standard provides a formal framework

for dealing with concerns that employees have in relation to

their employment or another colleague, which affects them

directly, and cannot be resolved through informal

mechanisms, such as counselling, coaching or mediat

ion.

This can include concerns related to bullying, harassment,

discr

inat

ion and v

ict

isat

ion, as well as concerns regard

ing

condit

ions of employment (for example, health and safety,

new working practices or the working environment).

Employees can raise grievances to their People Leader or a

Human Resources (HR) Representative. The global process for

addressing grievances involves an HR representative and a

member of the business review

ing the gr

ievance, conducting

fact ﬁnding

into the grievance and provid

ing a wr

itten

outcome to the aggrieved employee. If a grievance is upheld,

the next steps might include remedying a policy or process, or

iat

ing a d

isc

ipl

inary review of the conduct of the colleague

who is the subject of the grievance. The Group Grievance

Standard and accompanying process is reviewed on a

period

ic bas

is in consultation with stakeholders across HR,

Legal, Compliance and Shared Investigat

ive Serv

ices.

Grievance trends are reviewed on a quarterly basis and action

is taken to address any concerning trends.

There is a dist

inct Group Speak

ing Up Policy which covers

instances where an employee wishes to ‘blow the whistle’ on

actual, planned or potential wrongdoing by another

employee or the Group.

The Group is committed to creating a fair, consistent, and

transparent approach to making decis

ions

in a disc

ipl

inary

context. This commitment is codif

ied

in our Fair Accountabil

ity

Princ

iples, wh

ich underpin our Group Disc

ipl

inary Standard.

Dism

issals due to m

isconduct issues and/or performance

(where required by law to follow a disc

ipl

inary process) are

governed by the Group Disc

ipl

inary Standard. Where local

law or regulation requires a different process with regards to

dism

issals and other d

isc

ipl

inary outcomes, we have country

variances in place.

Our Group Divers

ity and Inclus

ion Standard has been

developed to ensure a respectful workplace, with fair and

equal treatment, divers

ity and

inclus

ion, and the prov

ion of

opportunit

ies for employees to part

ipate fully and reach

their full potential in an appropriate working environment.

The Group aims to provide equality of opportunity for all,

protect the dign

ity of employees and promote respect at

work. All ind

iduals are entitled to be treated with dign

ity and

respect, and to be free from harassment, bullying,

discr

inat

ion and v

ict

isat

ion. Th

is helps to support

productive working condit

ions, decreased staff attr

ion,

posit

ive employee morale and engagement, ma

inta

ins

employee wellbeing, and reduces people-related risk. All

employees and contractors are required to take personal

responsib

ity to comply with the Standard, includ

ing

conducting themselves in a manner that demonstrates

appropriate, non-discr

inatory behaviours.

The Group is committed to provide equal opportunit

ies and

fair treatment in employment. We do not accept unlawful

discr

inat

ion

in our recruitment or employment practices on

any grounds includ

ing but not l

ited to: sex, race, colour,

national

ity, ethn

ity, nat

ional or ind

igenous or

in, d

isab

ity,

age, marital or civ

il partner status, pregnancy or matern

ity,

sexual orientat

ion, gender

ident

ity, express

ion or

reassignment, HIV or AIDS status, parental status, mil

itary and

veterans status, ﬂexib

ity of working arrangements, relig

ion or

belief. We strive for recruitment, appraisals, pay and

condit

ions, tra

ing, development, success

ion planning,

promotion, grievance/disc

ipl

inary procedures and

employment terminat

ion pract

ices that are inclus

ive and

accessible; and that do not directly or ind

irectly d

iscr

inate.

Recruitment, employment, train

ing, development and

promotion decis

ions are based on the sk

ills, knowledge and

behaviour required to perform the role to the Group’s

standards. Implied in all employment terms is the

commitment to equal pay for equal work. We will also make

reasonable workplace adjustments (includ

ing dur

ing the

hir

ing process) to ensure all

ind

iduals feel supported and are

able to partic

ipate fully and reach the

ir potential. If employees

become disabled, we will proactively seek to support them

with appropriate train

ing and workplace adjustments where

possible and explore every opportunity to ensure their

employment continues.

Health and safety

Our Health, Safety and Wellbeing (HSW) programme covers

both mental and physical health and wellbeing. The Group

complies with both external regulatory requirements and

internal policy and standards for HSW in all markets. It is

Group policy to ensure that the more stringent of the two

requirements is always met, ensuring our HSW practices meet

or exceed the regulatory min

imum. Compl

iance rates are

reported at least biannually to each country’s Management

Team.

225

Standard Chartered

– Annual Report 2022

Directors’ report

We follow the ILO code of practice on recording and

notif

icat

ion of occupational accidents and diseases, as well as

align

ing to UK Health and Safety Execut

ive, and ensuring we

meet all local H&S regulatory reporting requirements. We

record and report all work-related illness and injuries, includ

ing

sub-contractors, vis

itors and cl

ients.

HSW performance and risks are reported annually to the

Group Risk Committee and Board Risk Committee. We use a

health and safety management system across all countries to

ensure a consistently high level of health and safety reporting

for all our colleagues and clients.

The Bank sponsors medical and healthcare services for all

employees, except in markets where cover is provided through

State-mandated healthcare, which represent less than

0.5 per cent of the Group’s employees. All staff also have

access to professional counselling via our Employee

Assistance Program, as well as to more proactive mental

health support through our holist

ic wellbe

ing app and

wellbeing platform.

Furthermore, we consider and treat mental health in the same

way that we would treat physical health. Our global Mental

Health First Aid (MHFA) programme offers help to someone

developing a mental health problem, experienc

ing a

worsening of an exist

ing mental

illness or a mental health

cris

is. The mental health support

is given until appropriate

professional help is received, or the cris

is resolved. To date we

have trained over 500 mental health ﬁrst aiders in 48 markets,

covering more than 99 per cent of colleagues.

In 2022, we recorded one work-related fatality where a

contractor was fatally injured when crossing a road in

Pakistan. Major in

juries (per the UK Health & Safety Executive

deﬁnit

ion) decreased from 24 in 2021 to 21, with fractures the

most common type of major in

jury (21%).

Overall, reported injuries increased by 5.1% per cent, with

‘slips/trips/falls’ and ‘transport/commuting’ remain

ing the

most common causes of injury. Our injury rates remain aligned

to, or better than industry benchmarks. Hazards and near miss

reports increased 23% per cent between 2021 and 2022, and

all premises are inspected at least annually to ident

ify any

hazards, risks, and inc

idences of non-compl

iance. The overall

increase in accidents and inc

idents was due to the large

increase in staff returning to ofﬁce locations in 2022 after the

lockdowns and restrict

ions of 2021.

One hundred and twenty of our largest premises were

certif

ied w

ith the WELL Health & Safety Rating; an evidence-

based, third-party certif

icat

ion that validates our efforts to

address the hygiene and safety of our workspaces during

COVID-19 and prepare our build

ings for re-entry post-

pandemic.

Our regular Workplace Experience survey, conducted across

60 countries, returned our highest ever H&S and security

satisfact

ion scores. The Health and Wellbe

ing index increased

by 7%, and staff reported improved scores for work-life

balance, wellbeing at home, and overall wellbeing. Staff also

reported that our workplace design better supports their

wellbeing and physical health compared with previous years.

Throughout 2022, the COVID-19 pandemic reduced its impact,

with lockdowns and restrict

ions eas

ing across most markets

and staff returning to the ofﬁce in greater numbers. That said,

we still encourage ﬂexible and hybrid work arrangements as

part of our Future Work Now programme. A H&S online

assessment tool is available for staff to assess their home

working area for hazards, with a virtual assessments of the

ind

idual’s work environment. All staff opting to work ﬂexibly

received an allowance to purchase ergonomic ofﬁce

equipment. Our work injury insurance covers all staff working

from home.

Health, Safety & Security train

ing

is mandatory for all

colleagues’ train

ing, and 2022 saw both our

ial and

annual refresher train

ing packages completely updated and

refreshed, with emphasis on mental health and wellbeing,

as well as work from home aspects.

Major customers

Our ﬁve largest customers together accounted for 1.9 per cent

of our total operating income in the year ended 31 December

2022.

Major suppliers

In 2022, $4.3 bill

ion was spent w

ith approximately 11,700

suppliers. Of this, 74 per cent of the total spend was spent in

the Asia region, with 18 per cent in Europe and the Americas,

and 8 per cent in Africa and the Middle East.

Furthermore, 80 per cent of total spend in 2022 was with 465

suppliers. In addit

ion, 80 per cent of carbon em

iss

ions were

with 652 suppliers. In 2022, our ﬁve largest suppliers together

accounted for 14 per cent of total spend, with the largest ten

amounting to 21 per cent of total spend.

Supply chain management

To support the operation of our businesses we source a variety

of goods and services governed through a third-party risk

management framework which ensures that we follow the

highest standards in terms of vendor selection, due dil

igence,

and contract management.

For informat

ion about how the Group engages w

ith suppliers

on environmental and social matters, please see our Supplier

Charter and Supplier Divers

ity and Inclus

ion Standard.

As set out under the UK Modern Slavery Act 2015, the Group

is required to publish a Modern Slavery Statement annually.

The Group’s 2022 Modern Slavery Statement is issued at the

same time as the Annual Report. This document gives further

detail on the actions the Group has taken as it seeks to

prevent modern slavery and human trafﬁcking

in its

operations, ﬁnanc

ing and supply cha

in during 2022.

Our Supplier Charter and Supplier Divers

ity and Inclus

ion standard can

be viewed at

sc.com/suppliercharter and sc.com/supplierd

ivers

ity

Details of how we create value for our suppliers and other stakeholder

groups can be found on

pages 54 to 63

226

Standard Chartered

– Annual Report 2022

Directors’ report

Other disclosures

Product responsib

ity

We aim to design and offer products based on client needs to

ensure fair treatment and outcomes for clients.

The Group has in place a risk framework, compris

ing pol

ies

and standards, to support these objectives

in alignment with

our Conduct Risk Framework. This framework covers sales

practices, client communicat

ions, appropr

iateness and

suitab

ity, and post-sales practices. There are controls across

all activ

ies above and the controls are tested on a regular

basis to provide assurance on the framework. As part of this,

we ensure products sold are suitable for clients and comply

with relevant laws and regulations. We also review our

products on a period

ic bas

is and reﬁne them to keep them

relevant to the changing needs of clients and regulators.

We have processes and guidel

ines spec

ic to each of our

client industr

ies, to promptly resolve cl

ient complaints

and understand and respond to client issues. Conduct

considerat

ions are g

iven sign

iﬁcant we

ight

ing

in frontline

incent

ive structures to dr

ive the right behaviours.

For more informat

ion on our approach to product des

ign,

product pric

ing, treat

ing customers fairly and protecting

customers, and incent

ing our frontl

ine employees, see

pages 55 and 56. For more informat

ion on fraud

ident

iﬁcation

see page 121.

Safeguarding intellectual property rights

The Group has processes in place to manage the Group’s

trade mark rights and it respects third party intellectual

property rights.

Group Code of Conduct

The Board has adopted a Group Code of Conduct (the Code)

relating to the lawful and ethical conduct of business and this

is supported by the Group’s valued behaviours. This has been

communicated to all directors and employees, all of whom

are expected to observe high standards of integr

ity and fa

dealing in relation to customers, employees and regulators

in the communit

ies

in which the Group operates. Directors

and employees are asked to recommit to the Code annually,

and 99.5 per cent have completed the 2022 recommitment. All

Board members have recommitted to the Code.

Managing environmental and social risk

The Board is responsible for ensuring that high standards of

responsible business are mainta

ined and that an effect

ive

control framework is in place. This encompasses risk

associated with clients’ operations and their potential impact

on the environment, includ

ing cl

imate change, and local

communit

ies.

The Board recognises its responsib

ity to manage these risks

and that failure to manage them adequately could have

adverse impact on stakeholders as well as the Group. The

Board, via the Culture and Sustainab

ity Committee, reviews

sustainab

ity prior

ies, and oversees the development of, and

delivery against, public commitments regarding the activ

ies

and/or businesses that the Group will or will not accept in

alignment with our here for good brand promise.

At a management level, the Chief Sustainab

ity Ofﬁcer is

responsible for Sustainable Finance, which incorporates E&S

risk management. A cross-business Sustainab

ity Forum is

responsible for developing and deliver

ing the Group’s

sustainab

ity strategy, and in 2022 this Forum was chaired by

the Group Head, Corporate Affairs, Brand & Marketing from

January to July, and from August onwards 2022 by the Chief

Sustainab

ity Ofﬁcer.

The Group Responsib

ity and Reputational Risk Committee

(GRRRC), chaired by the Group Head, Conduct, Financ

ial

Crime and Compliance, oversees management of the

Reputational and Sustainab

ity Risk proﬁle for the Group,

includ

ing overs

ight of our Posit

ion Statements and assoc

iated

risk tolerance thresholds.

Community engagement

We collaborate with local partners to support social and

economic development in communit

ies across our markets.

We are committed to sustainable social and economic

development through our business, operations and

communit

ies. We a

im to create more inclus

ive econom

ies by

sharing our skills and expertise and developing community

iat

ives that transform l

ives. We continue to support our

communit

ies through Futuremakers by Standard Chartered,

our global in

iat

ive to tackle youth econom

ic inclus

ion and

enable the next generation to learn, earn and grow. For more

informat

ion on Futuremakers, as well as our employee

volunteering and community investment expenditure,

please see pages 122 to 123 in the ‘Sustainab

ity’ section

and page 492.

ESG reporting guide

Compliance with List

ing Rules

We comply with the requirements for environmental, social

and governance reporting under Appendix 27 of the Hong

Kong List

ing Rules w

ith the exception of A1.3 on hazardous

waste and A1.6 on production and handling of hazardous

waste and A2.5 on packaging and B2.2 on lost days due to

work injury. As an ofﬁce-based ﬁnanc

ial serv

ices provider, we

generate min

imal hazardous waste or packag

ing material. As

such, these issues are not material and we do not report them.

We aim to design and offer products based on client needs to

ensure fair treatment and outcomes for clients. The Group has

in place a risk framework, compris

ing pol

ies and standards,

to support these objectives

in alignment with our Conduct Risk

Framework. This framework covers sales practices, client

communicat

ions, appropr

iateness and suitab

ity, and

post-sales practice. As part of this, we ensure products sold

are suitable for clients and comply with relevant laws and

regulations. The Group does not manufacture products and

therefore does not have a deﬁned quality assurance process

or recall procedures; nor does it sell or ship products that

would be liable for return on health and safety grounds.

227

Standard Chartered

– Annual Report 2022

Directors’ report

Compliance with Task Force on Climate-related Financ

ial

Disclosures (TCFD)

In line with our ‘comply or explain’ obligat

ion under the UK’s

Financ

ial Conduct Author

ity’s List

ing Rules, we can conﬁrm

that we have made disclosures consistent with the TCFD

Recommendations and Recommended Disclosures in this

Annual Report, except for one area: we do not fully disclose

Scope 3 greenhouse gas emiss

ions as we currently focus on

the sectors which are most carbon intens

ive. Further

informat

ion

is available on pages 79 to 80.

In line with the current UK List

ing Rules requ

irements, our TCFD

disclosures also take into account the implementat

ion

guidance included in the TCFD 2021 Annex.

EU Taxonomy

The European Union Sustainable Finance Taxonomy (“EU

Taxonomy”) is a classif

icat

ion system that establishes a list of

environmentally sustainable economic activ

ies. It has come

into force as of 1 January 2022 for entit

ies fall

ing with

in the

scope of disclosures.

Standard Chartered Bank AG has assessed that

implementat

ion of the EU Taxonomy

is not mandatory for

Standard Chartered Bank AG at this stage given certain

qualif

icat

ion thresholds; however, given the amendments

introduced by the Corporate Sustainab

ity Reporting Direct

ive

(“CSRD”) Standard Chartered Bank AG and Standard

Chartered PLC (the Group) have commenced preparation to

embed EU Taxonomy classif

icat

ions and metrics and will

continue to monitor expected policy developments from the

European Commiss

ion concern

ing guidance on Taxonomy

Alignment and Technical Screening Criter

ia to

incrementally

enhance our assessment and support reporting as required.

In this regard, the Group is developing dig

ital capab

ity to

help facil

itate report

ing against the different taxonomies that

are being developed across the jur

isd

ict

ions

in which the

Group operates. As the EU Taxonomy is the most advanced,

the dig

ital solut

ion will adopt a rules-based approach to

assess if a client and any client activ

ity w

ith the Group is

in-scope and elig

ible for EU Taxonomy report

ing. The

intent

ion

is to expand this dig

ital capab

ity to

include local

taxonomy reporting and climate-related ﬁnanc

ial d

isclosures

requirements.

The Group will consider taxonomy alignment in our business

decis

ions,

includ

ing at a cl

ient and transaction level, as well as

more broadly at a sector strategy level. Given our footprint

across Europe/UK, Asia, Africa and the Middle East, we need

to continually review our abil

ity to assess taxonomy-al

ignment

based on informat

ion ava

ilable from clients and through our

due dil

igence process.

Environmental impact of our operations

We aim to min

ise the environmental impact of our

operations as part of our commitment to be a responsible

company. We report on energy, water and non-hazardous

waste data which become the basis of our Greenhouse Gas

(GHG) emiss

ions management, as well as the targets we have

set to reduce energy, water and waste consumption.

Disclosures related to the Group’s environmental polic

ies as

well as GHG, energy efﬁciency, water and waste performance

metrics are included in the Sustainab

ity section of the

Strategic Report on pages 74 and 75, and in the

Supplementary Environment Data table on pages 489 to 491.

Our reporting methodology is based upon the World

Resources Institute/ World Business Council for Sustainable

Development Greenhouse Gas Protocol Corporate

Accounting and Reporting Standard (Revised Edit

ion). We

report on all emiss

ion sources requ

ired under the Companies

Act 2006 (Strategic Report and Directors’ Reports)

Regulations.

Using conversion factors from the International Energy

Agency 2021 Emiss

ions Factors and the UK Government’s

Department for Business, Energy & Industrial Strategy,

emiss

ions are reported

in metric tonnes of carbon diox

ide

equivalent (tCO

e), encompassing the six Kyoto gases.

Scope 1 emiss

ions are deﬁned as ar

ing from the consumpt

ion

of energy from direct sources, during the use of property

occupied by the Group. On-site combustion of fuels, includ

ing

diesel, liquef

ied petroleum gas (LPG) and natural gas,

recorded using meters, or where metering is not available,

collated from fuel vendors’ invo

ices. Em

iss

ions from the

combustion of fuel in Group-operated transportation devices,

as well as fugit

ive em

iss

ions, are excluded as be

ing

immater

ial.

Scope 2 emiss

ions are deﬁned as ar

ing from the

consumption of ind

irect sources of energy, dur

ing the use of

property occupied by the Group. Energy generated off-site in

the form of purchased electric

ity, heat, steam or cool

ing, is

collected as kilowatt hours consumed using meters or where

metering is not available, collated from vendor’s invo

ices.

Applicable to both Scope 1 and 2 emiss

ions, we

include all

ind

irect and d

irect sources of energy consumed by build

ing

services (amongst other activ

ies) with

in the space occup

ied

by the Group, leased or owned. This can include base build

ing

services under landlord control, but over which we typically

hold a reasonable degree of inﬂuence.

All data centre facil

ies with condit

ion

ing systems and

hardware remain

ing under the operat

ional control of the

Group are included in the reporting. This does not include

energy used at outsourced data centre facil

ies which are

captured under Scope 3, Category 1.

Scope 3 emiss

ions occur as a consequence of the Group’s

activ

ies but aris

ing from sources not controlled by us. We

have made great strides to enhance our Scope 3 GHG

reporting for both upstream and downstream categories.

Further informat

ion on the pr

inc

iples and methodolog

ies used

to calculate the GHG emiss

ions of the Group can be found on

pages 74 to 83 with

in the Strateg

ic Report and in our reporting

criter

ia document at

sc.com/environmentcriter

ia.

228

Standard Chartered

– Annual Report 2022

Directors’ report

Other disclosures

Reporting period

The reporting period of our Scope 1 and 2, Scope 3 Category 6

(business ﬂights), Scope 3 Category 1 (data centres) and

environmental resource efﬁc

iency data

is from 1 October 2021

to 30 September 2022. This allows sufﬁc

ient t

ime for

independent assurance to be gained on our Scope 1 and 2

emiss

ions pr

ior to the publicat

ion of results. Our Scope 1 and 2

emiss

ions are assured by an

independent body, Global

Documentation, against the requirements of ISO14064.

Accordingly, the operating income used in this inventory

corresponds to the same time period rather than the calendar

year used in ﬁnanc

ial report

ing.

It is noted that there is a one year lag on data used for

ﬁnanced emiss

ions. Th

is is a result of time taken for our clients

to report their ﬁnanc

ial and carbon em

iss

ion

informat

ion.

Therefore, the Group’s baseline as released in 2021 util

ised the

2020 year-end balance sheet date for client exposures,

ﬁnancial and carbon

informat

ion and the 2022 updated

ﬁnanced emiss

ions ut

ises the 2021 year end balances. We st

ill

refer to these as the 2022 and 2021 updates.

Assurance

Our Scope 1 and 2 emiss

ions are

independently assured by Global Documentation, in accordance with ISO 14064.

Units

2022

2021

2020

Reporting coverage of data

Headcount

No. of employees

83,266

81,957

83,657

Annual operating income from 1 October to 30 September

$ mill

ion

15,863

14,541

15,233

Net internal area of occupied property

946,234

998,571

1,050,414

Greenhouse gas emiss

ions (locat

ion based)

Scope 1 & 2: 2

Scope 1 emiss

ions (combust

ion of fuels)

tCO

2,071

2,902

3,988

Scope 2 emiss

ions (purchased electr

ity – locat

ion based)

tCO

47,363

82,761

113,870

Scope 1 & 2 emiss

ions (locat

ion based)

tCO

49,434

85,662

117,858

Scope 1 & 2 emiss

ions (UK and offshore area only)

tCO

–

Scope 3:

Purchased goods (Global data centres)

tCO

706

43,132

29,562

Business travel (Air travel)

tCO

39,107

3,654

33,930

Total scope 1,2 and 3

tCO

89,247

132,448

181,350

T GHG emiss

ions – Intens

ity:

Total Scope 1, 2 & 3 emiss

ions/headcount

tCO

e/headcount/year

1.07

1.62

2.17

Total Scope 1, 2 & 3 emiss

ions/operat

ing income

tCO

e/$m

5.63

9.11

11.91

Environmental resource efﬁc

iency

Energy

Indirect non-renewable energy consumption

GWh/year

142

184

Indirect renewable energy consumption

GWh/year

Direct non-renewable energy consumption

GWh/year

Direct renewable energy consumption

GWh/year

Energy consumption

GWh/year

177

183

216

Energy consumption (UK and offshore area only)

GWh/year

–

Energy consumption/Headcount

kWH/headcount/year

2,129

2,233

2,544

Standard Chartered measures greenhouse gas emiss

ions us

ing the Greenhouse Gas emiss

ions protocol

Despite only a 5 per cent reduction in our measured real estate, we reduced our Scope 1 and 2 emiss

ions by more than 42 per cent to 49,434 tonnes dur

ing 2022.

This has been possible through a consumption reduction of 3 per cent to 177.3 GWh through energy-efﬁc

ient

investment, plus a 12 per cent increase in renewable

energy (being through direct power purchase agreements, green util

ies and renewable energy certif

icates) across the portfol

io.

Included in energy consumption is our scope 1 emiss

ions from the combust

ion of fuel. This energy usage has been measured in litres of fuel and converted to

GWh/year using an energy intens

ity factor

Further detail on our environment performance, as well as associated assumptions and methodologies can be found on

pages 74 to 83

with

in the Strateg

ic Report and in our reporting criter

ia document at

sc.com/environmentcriter

ia.

229

Standard Chartered

– Annual Report 2022

Directors’ report

Electronic communicat

ion

The Board recognises the importance of good

communicat

ions w

ith all shareholders. Directors are in regular

contact with our inst

itut

ional shareholders and general

presentations are made when we announce our ﬁnanc

ial

results. The AGM presents an opportunity to communicate

with all shareholders. Our shareholders are encouraged to

receive our corporate documents electronically. The annual

and inter

im ﬁnancial statements, Not

ice of AGM and any

div

idend c

irculars are all available electronically. If you do not

already receive your corporate documents electronically and

would like to do so in future, please contact our registrars at

the address on page 509. Shareholders are also able to vote

electronically on the resolutions being put to the AGM through

our registrars’ website at investorcentre.co.uk.

Annual General Meeting

Our 2023 AGM will be held at 11:00am (UK time) (6:00pm

Hong Kong time) on 3 May 2023. Further details regarding

the format, location and business to be transacted will be

disclosed with

in the 2023 Not

ice of AGM.

Our 2022 AGM was held on 4 May 2022 at 11:00am (UK time)

(6:00pm Hong Kong time). Special business at the meeting

included the approval of the power to allot ECAT1 Securit

ies

for cash without certain formalit

ies.

All Board recommended resolutions were passed at the meeting; a

shareholder requis

ioned resolution concerning a proposed revis

ion to

the Group’s net-zero pathway was not passed, the details of which can

be viewed on our website at

sc.com/agm

Non-audit services

The Group’s non-audit services policy (“the policy”) was

reviewed and approved by the Audit Committee on

22 September 2022. The policy is based on an overrid

ing

princ

iple that, to avo

id any actual or perceived conﬂicts of

interest, the Group’s auditor should only be used when either

there is evidence that there is no alternative in terms of quality

and there is no conﬂict with their duties as auditor. EY can be

used where the work is required by a regulator or competent

authority.

The policy clearly sets out the criter

ia for when the Aud

Committee’s prior written approval is required. The policy

requires a conservative approach to be taken to the

assessment of requests for EY to provide non-audit services.

Subject to the overrid

ing pr

inc

iple, the Aud

it Committee’s view

is that EY can be of value in a range of non-audit service

activ

ies and should be allowed to tender subject to the terms

of the policy. The Group is required to take a conservative

approach to interpret

ing the potent

ial threats to auditor

independence and requires commensurately robust

safeguards against them.

UK legislat

ion and gu

idance from the FRC sets out threats to

audit independence, includ

ing self-

interest, self-review,

famil

iar

ity, taking of a management role or conducting

advocacy. In particular, mainta

ing EY’s independence from

the Group requires EY to avoid taking decis

ions on the Group’s

behalf. It is also recognised as essential that management

retains the decis

ion-mak

ing capabil

ity as to whether to act on

advice given by EY as part of a non-audit service. This means

not just the abil

ity to act

ion the advice given, but to have

sufﬁcient knowledge of the subject matter to be able to make

a reasoned and independent judgement as to its valid

ity.

All of this is contained with

in the pol

icy.

By way of (non-exhaustive) illustrat

ion of the appl

icat

ion of

the princ

iples set out

in the policy, the following types of

non-audit services are likely to be permiss

ible under the pol

icy:

•

Reviews of inter

im ﬁnancial

informat

ion and ver

icat

ion of

inter

im proﬁts – the Group would also extend th

is to work on

investor circulars in most foreseeable circumstances

•

Extended audit or assurance work on ﬁnanc

ial

informat

ion

and/or ﬁnancial or operat

ional controls, where this work is

closely linked to the audit engagement

•

Agreed upon procedures on materials with

in or referenced

in the annual report of the Group or an entity with

in the

Group

•

Internal control review services

Strictly prohib

ited under the pol

icy:

•

Bookkeeping, informat

ion technology and

internal audit

services

•

Corporate ﬁnance services, valuation services or lit

igat

ion

support

•

Tax or regulatory structuring proposals

•

Services where fees are paid on a contingent basis (in whole

or in part)

•

Consulting services that actively assist in running the

business in place of management as opposed to provid

ing

or validat

ing

informat

ion, wh

ich management then util

ises

in the operation of the business

230

Standard Chartered

– Annual Report 2022

Directors’ report

Other disclosures

The policy is not a prescribed list of non-audit services that EY

is permitted to provide. Rather, each request for EY to provide

non-audit services will be assessed on its own merits. The

Audit Committee believes that such a case-by-case approach

best accommodates (i) the need for the appropriate rigour

and challenge to be applied to each request for EY to provide

non-audit services while (i

i) preserv

ing sufﬁc

ient ﬂex

ity for

the Group to engage EY to provide non-audit services where

they are able to deliver particular value to the Group and

where the proposed services can be provided without

compromis

ing EY’s objectiv

ity and independence. To ensure

that the Group will comply with a cap that lim

its fees on

non-audit services provided by EY to under 70 per cent of the

average Group audit fee from the previous three consecutive

ﬁnancial years, (wh

ich will apply from EY’s fourth year of being

the Group’s external auditor), the policy requires that annual

non-audit service fees are lower than 70 per cent of the

average annual Group audit fee up to this time. The caps

exclude audit related non-audit services and services carried

out pursuant to law or regulation. For 2022, without deducting

non-audit service fees which were required by law or

regulation and performed by EY, the ratio was 0.3:1. Details

relating to EY‘s remuneration as the Group statutory auditor

and a descript

ion of the broad categor

ies of the types of

non-audit services provided by EY are given in Note 38 to the

ﬁnancial statements.

Auditor

The Audit Committee reviews the appointment of the Group’s

statutory auditor, its effectiveness and its relationsh

ip w

ith the

Group, which includes monitor

ing our use of the aud

itors for

non-audit services and the balance of audit and non-audit

fees paid.

Following an annual performance and effectiveness review of

EY, it was felt that EY is considered to be effective, object

ive

and independent in its role as Group statutory auditor.

Each director believes that there is no relevant informat

ion of

which our Group statutory auditor is unaware. Each has taken

all steps necessary as a director to be aware of any relevant

audit informat

ion and to establ

ish that the Group statutory

auditor is made aware of any pertinent informat

ion.

EY will be in attendance at the 2023 AGM. A resolution to

re-appoint EY as auditor was proposed at the Company’s

2022 AGM and was successfully passed.

EY is a Public Interest Entity Auditor recognised in accordance

with the Hong Kong Financ

ial Report

ing Council Ordinance.

By order of the Board

Adrian de Souza

Group Company Secretary

16 February 2023

Standard Chartered PLC

Registered No. 966425

231

Standard Chartered

– Annual Report 2022

Directors’ report

Statement of directors’ responsib

ies

The directors are responsible for preparing the Annual

Report and the Group and Company ﬁnancial statements

in accordance with applicable law and regulations.

Company law requires the directors to prepare Group and

Company ﬁnancial statements for each ﬁnancial year.

Under that law:

•

The Group ﬁnancial statements have been prepared

accordance with UK-adopted International Accounting

Standards and International Financ

ial Report

ing Standards

as adopted by the European Union;

•

The Company ﬁnancial statements have been properly

prepared in accordance with UK-adopted International

Accounting Standards as applied in accordance with

section 408 of the Companies Act 2006; and

•

The ﬁnancial statements have been prepared

accordance with the requirements of the Companies Act

2006.

Under company law the directors must not approve the

ﬁnancial statements unless they are sat

isf

ied that they

give a true and fair view of the state of affairs of the Group

and Company and of their proﬁt or loss for that period.

In preparing each of the Group and Company ﬁnanc

ial

statements, the directors are required to:

•

Select suitable accounting polic

ies and then apply them

consistently;

•

Make judgements and estimates that are reasonable,

relevant and reliable;

•

State whether they have been prepared in accordance

with UK-adopted International Accounting Standards and

International Financ

ial Report

ing Standards as adopted by

the European Union;

•

Assess the Group and the Company’s abil

ity to cont

inue as

a going concern, disclos

ing, as appl

icable, matters related

to going concern; and

•

Use the going concern basis of accounting unless they

either intend to liqu

idate the Group or the Company or to

cease operations, or have no realist

ic alternat

ive but to

do so

The directors are responsible for keeping adequate

accounting records that are sufﬁc

ient to show and expla

the Company’s transactions and disclose with reasonable

accuracy at any time the ﬁnanc

ial pos

ion of the Company

and enable them to ensure that its ﬁnanc

ial statements

comply with the Companies Act 2006. They are responsible

for such internal control

as they determine is necessary to

enable the preparation of ﬁnanc

ial statements that are free

from material misstatement, whether due to fraud or error,

and have general responsib

ity for taking such steps as

are reasonably open to them to safeguard the assets of

the Group and to prevent and detect fraud and other

irregular

ies.

Under applicable law and regulations, the directors are also

responsible for preparing a Strategic Report, Directors’ Report,

Directors’ Remuneration Report and Corporate Governance

Statement that complies with that law and those regulations.

The directors are responsible for the maintenance and

integr

ity of the corporate and ﬁnancial

informat

ion

included

on the Company’s website. Legislat

ion

in the UK governing the

preparation and dissem

inat

ion of ﬁnanc

ial statements d

iffer

from legislat

ion

in other jur

isd

ict

ions.

Responsib

ity statement of the directors in

respect of the annual ﬁnancial report

We conﬁrm that to the best of our knowledge:

•

The ﬁnancial statements, prepared

in accordance with the

applicable set of accounting standards, give a true and fair

view of the assets, liab

ies, ﬁnancial pos

ion and proﬁt or

loss of the Company and the undertakings included in the

consolidat

ion taken as a whole; and

•

The Strategic report includes a fair review of the

development and performance of the business and the

posit

ion of the Company and the undertak

ings included in

the consolidat

ion taken as a whole, together w

ith a

descript

ion of the emerg

ing risks and uncertaint

ies that

they face

We consider the Annual Report and Accounts, taken as a

whole, is fair, balanced and understandable and provides the

informat

ion necessary for shareholders to assess the Group’s

posit

ion and performance, bus

iness model and strategy.

By order of the Board

Andy Halford

Group Chief Financ

ial Ofﬁcer

16 February 2023

The Group’s Risk Management Framework and System of Internal Control

applies only to wholly controlled subsid

iar

ies of the Group, and not to

Associates, Joint Ventures or Structured Entit

ies of the Group

Risk review and

Capital review

236

Risk proﬁle

295

Enterprise Risk Management Framework

301

Princ

ipal r

isks

320

Capital review



Real-time trade

transaction

status with

Trade Track-It



In October, we launched Trade Track-It,

a dig

ital-transact

ion-tracking portal

which gives our clients end-to-end

vis

ity of the

ir trade-transaction

status globally.

The tool is integrated with DHL’s

tracking system and Lloyd’s List

Intelligence’s vessel-tracking solution

provid

ing our cl

ients, and their

customers, with 24/7 access to

near real time updates for trade

transactions, document delivery

and vessel status.

Before the introduct

ion of Trade

Track-It, clients would have to wait

hours – and sometimes days – for an

update on the status of their trade

transactions and related document

and goods ﬂows.

Read more online at

www.sc.com/tradetrackit

232

Standard Chartered

– Annual Report 2022

Risk review

233

Standard Chartered

– Annual Report 2022

Risk review and Capital review

234

Standard Chartered

– Annual Report 2022

Risk review

Index

Risk review and Capital review

Risk Index

Annual

Report and

Accounts

Risk proﬁle

Credit Risk

236

Basis of preparation

236

Credit risk overview

236

Impairment model

236

Staging of ﬁnanc

ial

instruments

236

IFRS 9 expected credit loss princ

iples and approaches

236

Maximum exposure to credit risk

238

Analysis of ﬁnanc

ial

instrument by stage

239

Credit quality analysis

240

•

Credit quality by client segment

240

•

Credit quality by geographic region

246

Movement in gross exposures and credit impa

irment for loans and advances, debt secur

ies,

undrawn commitments and ﬁnanc

ial guarantees

247

Movement of debt securit

ies, alternat

ive tier one and other elig

ible b

ills

249

Analysis of Stage 2 balances

254

Credit impa

irment charge

255

COVID-19 relief measures

255

Problem credit management and provis

ion

ing

256

•

Forborne and other modif

ied loans by cl

ient segment

256

•

Forborne and other modif

ied loans by reg

ion

256

•

Credit-impa

ired (stage 3) loans and advances by cl

ient segment

257

•

Credit-impa

ired (stage 3) loans and advances by geograph

ic region

257

Credit risk mit

igat

ion

257

• Collateral

258

•

Collateral held on loans and advances

258

•

Collateral – Corporate, Commercial & Institut

ional Bank

ing

258

•

Collateral – Consumer, Private & Business Banking

259

•

Mortgage loan-to-value ratios by geography

260

•

Collateral and other credit enhancements possessed or called upon

260

•

Other Credit Risk mit

igat

ion

261

Other portfolio analysis

261

•

Contractual maturity analysis of loans and advances by client segment

261

•

Credit quality by industry

262

•

Industry analysis of loans and advances by geographic region

263

•

Vulnerable and Cyclical Sector tables

264

•

China commercial real estate

268

•

Debt securit

ies and other el

ible b

ills

269

IFRS 9 expected credit loss methodology

269

Traded risk

282

Market Risk movements

282

Counterparty Credit Risk

285

Derivat

ive ﬁnancial

instruments Credit Risk mit

igat

ion

285

Liqu

ity and Funding Risk

285

Liqu

ity & Funding Risk metrics

286

Encumbrance

288

Liqu

ity analysis of the Group’s balance sheet

290

Interest Rate Risk in the Banking Book

293

Operational and Technology Risk

294

Operational and Technology Risk proﬁle

294

Other princ

ipal r

isks

294

235

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Risk Index

Annual

Report and

Accounts

Risk management approach

Enterprise Risk Management Framework

295

Princ

ipal R

isks

301

Capital

Capital summary

320

• Capital ratio

320

• Capital base

321

•

Movement in total capital

322

Risk-weighted asset

323

Leverage ratio

325

The following parts of the Risk review and Capital review form part of these ﬁnanc

ial statements and are aud

ited by the

external auditors:

•

a) Risk review:

Disclosures marked as ‘audited’ from the start of Credit risk section (page 236) to the end of other princ

ipal

risks in the same section (page 301); and

•

b) Capital review:

Tables marked as ‘audited’ from the start of ‘Capital base’ to the end of ‘Movement in total capital’,

excluding ‘Total risk-weighted assets’ (pages 321 to 322).

236

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Credit Risk (audited)

Basis of preparation

Unless otherwise stated the balance sheet and income

statement informat

ion presented w

ith

in th

is section is based

on the Group’s management view. This is princ

ipally the

location from which a client relationsh

is managed, which

may differ from where it is ﬁnanc

ially booked and may be

shared between businesses and/or regions. This view reﬂects

how the client segments and regions are managed internally.

Loans and advances to customers and banks held at

amortised cost in this Risk proﬁle section include reverse

repurchase agreement balances held at amortised cost, per

Note 16 Reverse repurchase and repurchase agreements

includ

ing other s

ilar secured lend

ing and borrowing.

Credit Risk overview

Credit Risk is the potential for loss due to the failure of a

counterparty to meet its contractual obligat

ions to pay the

Group. Credit exposures arise from both the banking and

trading books.

Impairment model

IFRS 9 mandates an impa

irment model that requ

ires the

recognit

ion of expected cred

it losses (ECL) on all ﬁnanc

ial

debt instruments held at amortised cost, Fair Value through

Other Comprehensive Income (FVOCI), undrawn loan

commitments and ﬁnanc

ial guarantees.

Staging of ﬁnanc

ial

instruments

Financ

ial

instruments that are not already credit-impa

ired are

orig

inated

into stage 1 and a

12-month expected credit loss

provis

ion

is recognised.

Instruments will remain in stage 1 until they are repaid, unless

they experience sign

iﬁcant cred

it deteriorat

ion (stage 2) or

they become credit-impa

ired (stage 3).

Instruments will transfer to stage 2 and a lifet

ime expected

credit loss provis

ion

is recognised when there has been a

sign

iﬁcant change

in the Credit Risk compared to what was

expected at orig

inat

ion.

The framework used to determine a sign

iﬁcant

increase in

Credit Risk is set out below.

IFRS 9 expected credit loss princ

iples and approaches

The main methodology princ

iples and approach adopted by the Group are set out

in the following table.

Title

Descript

ion

Supplementary informat

ion

Page

Approach for

determin

ing

expected credit

losses

For material loan portfolios, the Group has adopted a statist

ical

modelling approach for determin

ing expected cred

it losses that makes

extensive use of credit modelling. These models leveraged exist

ing

advanced internal ratings based (IRB) models, where these were

available. Where model performance breaches model monitor

ing

thresholds or validat

ion standards, a post model adjustment may be

required to correct for ident

iﬁed model

issues, which will be removed

once those issues have been remedied.

IFRS 9 expected credit loss

methodology

Determin

ing l

ifet

ime expected

credit loss for revolving products

Post-model adjustments

269

276

Incorporation of

forward-looking

informat

ion

The determinat

ion of expected cred

it loss includes various assumptions

and judgements in respect of forward-looking macroeconomic

informat

ion. Refer to pages 271 to 274 for

incorporation of forward-

looking informat

ion, forecast of key macroeconom

ic variables

underlying the expected credit loss calculation and the impact on

non-linear

ity and sens

ity of expected credit loss calculation to

macroeconomic variables. Judgemental adjustments, includ

ing

management overlays may also be used to capture risks not ident

iﬁed

in the models.

Incorporation of forward-looking

informat

ion and

impact of

non-linear

ity

Forecast of key macroeconomic

variables underlying the expected

credit loss calculation

Judgemental adjustments and

sensit

ity to macroeconomic

variables

271

272

275

Stage 1

• 12-month ECL

• Performing

Stage 2

•

Lifet

ime expected cred

it loss

•

Performing but has exhib

ited

sign

iﬁcant

increase in Credit Risk

(SICR)

Stage 3

• Credit-impa

ired

• Non-performing

Risk proﬁle

237

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Title

Descript

ion

Supplementary informat

ion

Page

Sign

iﬁcant

increase in Credit

Risk (SICR)

Expected credit loss for ﬁnanc

ial assets w

ill transfer from a 12-month

basis (stage 1) to a lifet

ime bas

is (stage 2) when there is a sign

iﬁcant

increase in Credit Risk (SICR) relative to that which was expected at the

time of orig

inat

ion, or when the asset becomes credit-impa

ired. On

transfer to a lifet

ime bas

is, the expected credit loss for those assets will

reﬂect the impact of a default event expected to occur over the

remain

ing l

ifet

ime of the

instrument rather than just over the 12 months

from the reporting date.

SICR is assessed by comparing the risk of default of an exposure at the

reporting date with the risk of default at orig

inat

ion (after consider

ing

the passage of time). ‘Sign

iﬁcant’ does not mean stat

ist

ically s

ign

iﬁcant

nor is it reﬂective of the extent of the impact on the Group’s ﬁnanc

ial

statements. Whether a change in the risk of default is sign

iﬁcant or not

is assessed using quantitat

ive and qual

itat

ive cr

iter

ia, the we

ight of

which will depend on the type of product and counterparty.

Quantitat

ive cr

iter

Sign

iﬁcant

increase in Credit Risk

thresholds

Specif

ic qual

itat

ive and

quantitat

ive cr

iter

ia per segment:

Corporate, Commercial &

Institut

ional Bank

ing (CCIB) clients

Consumer and Business Banking

clients

Private Banking clients

Debt securit

ies

278

279

280

Assessment of

credit-impa

ired

ﬁnancial assets

Credit-impa

ired (stage 3) ﬁnancial assets compr

ise those assets that

have experienced an observed credit event and are in default. Default

represents those assets that are at least 90 days past due in respect of

princ

ipal and

interest payments and/or where the assets are otherwise

considered unlikely to pay. This deﬁn

ion is consistent with internal

Credit Risk management and the regulatory deﬁn

ion of default.

Unlikely to pay factors include object

ive cond

ions such as bankruptcy,

debt restructuring, fraud or death. It also includes credit-related

modif

icat

ions of contractual cashﬂows due to sign

iﬁcant ﬁnancial

diff

iculty (forbearance) where the Group has granted concess

ions that

it would not ordinar

ily cons

ider.

Interest income for stage 3 assets is recognised by applying the orig

inal

effective interest rate to the net asset amount (that is, net of credit

impa

irment prov

ions). When ﬁnancial assets are transferred from

stage 3 to stage 2, any contractual interest recovered in excess of the

interest income recognised while the asset was in stage 3 is reported

with

in the cred

it impa

irment l

ine.

Consumer and Business Banking

clients

CCIB and Private Banking clients

280

Transfers

between stages

Assets will transfer from stage 3 to stage 2 when they are no longer

considered to be credit-impa

ired. Assets w

ill not be considered

credit-impa

ired only

if the customer makes payments such that the

obligat

ions are current

in line with the orig

inal contractual terms.

Assets may transfer to stage 1 if they are no longer considered to have

experienced a sign

iﬁcant

increase in Credit Risk. This will be immed

iate

when the orig

inal probab

ity of default based transfer cr

iter

ia are no

longer met (and as long as none of the other transfer criter

ia apply).

Where assets were transferred using other measures, the assets will

only transfer back to stage 1 when the condit

ion that caused the

sign

iﬁcant

increase in Credit Risk no longer applies (and as long as none

of the other transfer criter

ia apply).

Movement in loan exposures and

expected credit losses

247

Modif

ied

ﬁnancial assets

Where the contractual terms of a ﬁnancial

instrument have been

modif

ied, and th

is does not result in the instrument being

derecognised, a modif

icat

ion gain or loss is recognised in the income

statement representing the difference between the orig

inal cashﬂows

and the modif

ied cashﬂows, d

iscounted at the effective interest rate.

The modif

icat

ion gain/loss is directly applied to the gross carrying

amount of the instrument.

If the modif

icat

ion is credit related, such as forbearance or where the

Group has granted concessions that it would not ordinar

ily cons

ider,

then it will be considered credit-impa

ired. Mod

icat

ions that are not

credit related will be subject to an assessment of whether the asset’s

Credit Risk has increased sign

iﬁcantly s

ince orig

inat

ion by comparing

the remain

ing l

ifet

ime PD based on the mod

ied terms w

ith the

remain

ing l

ifet

ime PD based on the or

inal contractual terms.

COVID-19 relief measures

Forbearance and other

modif

ied loans

255

256

Governance and

applicat

ion of

expert credit

judgement in

respect of

expected credit

losses

The models used in determin

ing ECL are rev

iewed and approved by the

Group Credit Model Assessment Committee and have been validated

by Group model validat

ion, wh

ich is independent of the business.

A quarterly model monitor

ing process

is in place that uses recent data

to compare the differences between model predict

ions and actual

outcomes against approved thresholds. Where a model’s performance

breaches the monitor

ing thresholds then an assessment of whether an

ECL adjustment is required to correct for the ident

iﬁed model

issue is

completed.

The determinat

ion of expected cred

it losses requires a sign

iﬁcant

degree of management judgement which had an impact on

governance processes, with the output of the expected credit models

assessed by the IFRS 9 Impairment Committee.

Group Credit Model Assessment

Committee

IFRS 9 Impairment Committee

280

281

238

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Maximum exposure to Credit Risk (audited)

The table below presents the Group’s maximum exposure to Credit Risk for its on-balance sheet and off-balance sheet ﬁnanc

ial

instruments as at 31 December 2022, before and after taking into account any collateral held or other Credit Risk mit

igat

ion.

The Group’s on-balance sheet maximum exposure to Credit Risk reduced by $6 bill

ion to $790 b

ill

ion (31 December 2021:

$796 bill

ion).

Loans and advances to customers increased by $12 bill

ion to $311 b

ill

ion (31 December 2021: $298 b

ill

ion). Th

is includes a

$24 bill

ion

increase in Treasury and securit

ies backed loans held to collect partly offset by a $13 b

ill

ion reduct

ion from risk-

weighted asset optim

isat

ion actions undertaken by CCIB and a $8 bill

ion reduct

ion from currency translation. Excluding the

above, there was 3 per cent underlying loan growth, with growth in Trade partly offset by deleveraging in Wealth Management.

Excluding reverse repurchase agreements, loans and advances to customers reduced by $5 bill

ion. The reduct

ion was primar

ily

in the CPBB business and was mainly driven by a decrease in Private Bank exposure (largely from UK, Hong Kong, and

Singapore in all classes) and Resident

ial Mortgage segment

in Korea (due to tightened Debt Service Ratio following new

government guidel

ines). Th

is was partly offset by $0.6 bill

ion

increase in Ventures from portfolio growth in Mox and the launch

of Trust Bank in Singapore.

Derivat

ive exposures

increased by $11.3 bill

ion to $64 b

ill

ion and

investment debt securit

ies

increased by $9 bill

ion to $172 b

ill

ion.

This was offset by a decrease of $14 bill

ion of cash and balances at Central banks.

Off-balance sheet instruments increased by $12 bill

ion to $229 b

ill

ion, dr

iven by higher undrawn commitments which increased

from $159 bill

ion to $169 b

ill

ion.

2022

2021

Maximum

exposure

$mill

ion

Credit risk management

Net

exposure

$mill

ion

Maximum

exposure

$mill

ion

Credit risk management

Net

exposure

$mill

ion

Collateral

$mill

ion

Master

netting

agreements

$mill

ion

Collateral⁸

$mill

ion

Master

netting

agreements

$mill

ion

On-balance sheet

Cash and balances at central banks

58,263

72,663

Loans and advances to banks¹

39,519

978

38,541

44,383

1,079

43,304

of which – reverse repurchase

agreements and other sim

ilar

secured lending

978

–

1,079

–

Loans and advances to customers

310,647

135,194

175,453

298,468

131,397

167,071

of which – reverse repurchase

agreements and other sim

ilar

secured lending

24,498

–

7,331

–

Investment securit

ies – Debt secur

ies

and other elig

ible b

ills

171,640

162,700

Fair value through proﬁt or loss

3, 7

102,575

64,491

–

38,084

123,234

80,009

–

43,225

Loans and advances to banks

976

3,847

Loans and advances to customers

6,546

9,953

Reverse repurchase agreements and

other sim

ilar lend

ing

64,491

–

80,009

–

Investment securit

ies – Debt secur

ies

and other elig

ible b

ills

30,562

29,425

Derivat

ive ﬁnancial

instruments

4, 7

63,717

9,206

50,133

4,378

52,445

8,092

39,502

4,851

Accrued income

2,706

1,674

Assets held for sale

1,388

Other assets

39,295

40,068

Total balance sheet

789,750

209,869

50,133

529,748

795,687

220,577

39,502

535,608

Off-balance sheet

Undrawn Commitments

168,668

2,951

165,717

158,523

3,848

154,675

Financ

ial Guarantees and

other equivalents

60,410

2,592

57,818

58,535

2,240

56,295

Total off-balance sheet

229,078

5,543

–

223,535

217,058

6,088

–

210,970

Total

1,018,828

215,412

50,133

753,283

1,012,745

226,665

39,502

746,578

An analysis of credit quality is set out in the credit quality analysis section (page 240). Further details of collateral held by client segment and stage are set out in

the collateral analysis section (page 257)

Excludes equity and other investments of $808 mill

ion (31 December 2021: $737 m

ill

ion). Further deta

ils are set out in Note 13 Financ

ial

instruments

Excludes equity and other investments of $3,230 mill

ion (31 December 2021: $5,861 m

ill

ion). Further deta

ils are set out in Note 13 Financ

ial

instruments

4 The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the counterparty through netting the sum

of the posit

ive and negat

ive mark-to-market values of applicable derivat

ive transact

ions

Other assets include Hong Kong certif

icates of

indebtedness, cash collateral, and acceptances, in addit

ion to unsettled trades and other ﬁnancial assets

6 Excludes ECL allowances which are reported under Provis

ions for l

iab

ies and charges

Collateral capped at maximum exposure (over-collateralised)

8 Adjusted for over-collateralisat

ion, wh

ich has been determined with reference to the drawn and undrawn component as this best reﬂects the effect on the

amount aris

ing from expected cred

it losses.

239

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Analysis of ﬁnanc

ial

instrument by stage (audited)

The total balance of ﬁnancial

instruments held increased by $15.3 bill

ion to $858 b

ill

ion (31 December 2021: $843 b

ill

ion).

Total stage 1 balances increased by $22 bill

ion, of wh

ich around $16 bill

ion was

in loans and advances to customers, primar

ily

due to increased levels of reverse repurchase agreements in Central and other items segment. CPBB decreased by $5.2 bill

ion

due to mortgages and secured wealth. CCIB increased by $4 bill

ion to $126 b

ill

ion (31 December 2021: $122 b

ill

ion). Off-balance

sheet exposures increased by $15 bill

ion pr

imar

ily

in undrawn commitments from increased customer demand.

Stage 2 ﬁnancial

instruments reduced to $28.1 bill

ion (31 December 2021: $34.6 b

ill

ion) due to exposure changes and transfers to

stage 1 in CCIB, particularly in the Transport, telecoms and util

ies and Energy sectors, partly offset by increase in commercial

real estate, primar

ily

in Asia. As a result, the proportion of loans and advances to customers classif

ied

in stage 2 reduced by

$3.8 bill

ion.

Stage 3 ﬁnancial

instruments were stable at $9.3 bill

ion (31 December 2021: $9.1 b

ill

ion).

2022

Stage 1

Stage 2

Stage 3

Total

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

value

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

value

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

value

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

value

$mill

ion

Cash and

balances at

central banks

57,643

–

57,643

333

(8)

325

295

–

295

58,271

(8)

58,263

Loans and

advances to

banks (amortised

cost)

39,149

(9)

39,140

337

(3)

334

(14)

39,545

(26)

39,519

Loans and

advances to

customers

(amortised cost)

295,219

(559)294,660

13,043

(444)

12,599

7,845

(4,457)

3,388

316,107

(5,460) 310,647

Debt securit

ies

and other

elig

ible b

ills

166,103

(25)

5,455

(90)

144

(106)

171,702

(221)

Amortised cost

59,427

(9)

59,418

271

(2)

269

(51)

59,776

(62)

59,714

FVOCI

106,676

(16)

5,184

(88)

(55)

111,926

(159)

–

Accrued income

(amortised cost)

2,706

–

2,706

–

2,706

Assets held

for sale

1,083

(6)

1,077

262

(4)

258

120

(67)

1,465

(77)

1,388

Other assets

39,294

–

39,294

–

(3)

39,298

(3)

39,295

Undrawn

commitments

162,958

(41)

5,582

(53)

128

–

168,668

(94)

Financ

ial

guarantees,

trade credits

and irrevocable

letters of credit

56,683

(11)

3,062

(28)

665

(147)

60,410

(186)

Total

820,838

(651)

28,074

(630)

9,260

(4,794)

858,172

(6,075)

Gross carrying amount for off-balance sheet refers to notional values

These instruments are held at fair value on the balance sheet. The ECL provis

ion

in respect of debt securit

ies measured at FVOCI

is held with

in the OCI reserve

These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a ﬁnanc

ial l

iab

ity and therefore there is no “net carrying amount”.

ECL allowances on off-balance sheet instruments are held as liab

ity provis

ions to the extent that the drawn and undrawn components of loan exposures

can be separately ident

iﬁed. Otherw

ise they will be reported against the drawn component

4 Stage 1 ECL is not material

Stage 3 gross includes $28 mill

ion (2021: $33 m

ill

ion) or

inated cred

it-impa

ired debt secur

ies w

ith impa

irment of $13 m

ill

ion (2021: N

il)

240

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

2021

Stage 1

Stage 2

Stage 3

Total

Gross

balance¹

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

value

$mill

ion

Gross

balance¹

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

value

$mill

ion

Gross

balance¹

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

value

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

value

$mill

ion

Cash and

balances at

central banks

72,601

–

72,601

(4)

–

72,667

(4)

72,663

Loans and

advances to

banks (amortised

cost)

43,776

(12)

43,764

580

(4)

576

(11)

44,410

(27)

44,383

Loans and

advances to

customers

(amortised cost)

279,178

(473) 278,705

16,849

(524)

16,325

8,095

(4,657)

3,438

304,122

(5,654) 298,468

Debt securit

ies

and other

elig

ible b

ills

157,352

(67)

5,315

(42)

113

(66)

162,780

(175)

Amortised cost

41,092

(13)

41,079

200

(1)

199

113

(66)

41,405

(80)

41,325

FVOCI

116,260

(54)

5,115

(41)

–

121,375

(95)

Accrued income

(amortised cost)

1,674

–

1,674

–

1,674

Assets held

for sale

–

Other assets

40,067

–

40,067

–

(3)

40,071

(3)

40,068

Undrawn

commitments

149,530

(42)

8,993

(60)

–

158,523

(102)

Financ

ial

guarantees,

trade credits

and irrevocable

letters of credit

54,923

(15)

2,813

(22)

799

(207)

58,535

(244)

Total

799,153

(609)

34,616

(656)

9,065

(4,944)

842,834

(6,209)

Gross carrying amount for off-balance sheet refers to notional values

These instruments are held at fair value on the balance sheet. The ECL provis

ion

in respect of debt securit

ies measured at FVOCI

is held with

in the OCI reserve

These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a ﬁnanc

ial l

iab

ity and therefore there is no “net carrying amount”. ECL

allowances on off-balance sheet instruments are held as liab

ity provis

ions to the extent that the drawn and undrawn components of loan exposures can be

separately ident

iﬁed. Otherw

ise they will be reported against the drawn component

4 Stage 1 ECL is not material

Stage 3 gross includes $33 mill

ion or

inated cred

it-impa

ired debt secur

ies and N

il impa

irment

Credit quality analysis (audited)

Credit quality by client segment

For CCIB, exposures are analysed by credit grade (CG), which plays a central role in the quality assessment and monitor

ing of

risk. All loans are assigned a CG, which is reviewed period

ically and amended

in light of changes in the borrower’s circumstances

or behaviour. CGs 1 to 12 are assigned to stage 1 and stage 2 (performing) clients or accounts, while CGs 13 and 14 are assigned

to stage 3 (credit-impa

ired) cl

ients. Consumer and Business Banking portfolios are analysed by days past due and Private

Banking by the type of collateral held.

Mapping of credit quality

The Group uses the following internal risk mapping to determine the credit quality for loans.

Credit quality

descript

ion

Corporate, Commercial & Institut

ional Bank

ing

Private Banking

Consumer &

Business Banking

Internal grade mapping

S&P external ratings

equivalent

Regulatory PD range (%)

Internal ratings

Number of days past due

Strong

1A to 5B

AAA/AA+ to BBB-/BB+0 to 0.425

Class I and Class IV

Current loans (no past

dues nor impa

ired)

Satisfactory

6A to 11C

BB+/BB to B-/CCC+

0.426 to 15.75

Class II and Class III

Loans past due till

29 days

Higher risk

Grade 12

CCC+ to C

15.751 to 99.999

Stressed Assets

Group (SAG)

managed

Past due loans

30 days and over till

90 days

For Private Banking, classes of risk represent the type of collateral held. Class I represents facil

ies with liqu

id collateral, such as cash and marketable secur

ies.

Class II represents unsecured/partially secured facil

ies and those with ill

iqu

id collateral, such as equity in private enterprises. Class III represents facil

ies with

resident

ial or Commerc

ial real estate collateral. Class IV covers margin trading facil

ies

2 Banks’ rating: BB to CCC/C

3 Banks’ rating: CCC to C

4 Medium enterprise clients with

in Bus

iness Banking are managed using the same internal credit grades as CCIB

241

Standard Chartered

– Annual Report 2022

Risk review and Capital review

The table overleaf sets out the gross loans and advances held

at amortised cost, expected credit loss provis

ions and

expected credit loss coverage by business segment and stage.

Expected credit loss coverage represents the expected credit

loss reported for each segment and stage as a proportion of

the gross loan balance for each segment and stage.

Stage 1:

Stage 1 gross loans and advances to customers increased by

$16 bill

ion to $295 b

ill

ion (31 December 2021: $279 b

ill

ion) and

represent an increase of 1 percentage point to 93 per cent of

loans and advances to customers (31 December 2021: 92 per

cent). The stage 1 coverage ratio remained at 0.2 per cent

compared with 31 December 2021.

In CCIB, the proportion of stage 1 loans has increased to

$126 bill

ion, be

ing 88 per cent (31 December 2021: 85 per cent),

and the percentage of stage 1 loans rated as strong is

higher at $90 bill

ion, be

ing 71 per cent (31 December 2021:

64 per cent) as the Group continues to focus on the orig

inat

ion

of investment grade lending. This is primar

ily due to a

$10.5 bill

ion

increase in exposures in Financ

ing,

insurance and

non-banking from a few notable clients, $1.5 bill

ion from rat

ing

upgrades in Transport, telecom and util

ies clients, offset

by $2.8 bill

ion decrease

in Manufacturing and $5.3 bill

ion

decrease in China Real Estate sector from repayments and

downgrades into stage 2.

CPBB stage 1 loans decreased by $5 bill

ion to $129 b

ill

ion

(31 December 2021: $134 bill

ion), ma

inly driven by a decrease

in Private Bank exposure (largely from UK, Hong Kong, and

Singapore in all classes), and a decrease in exposure of the

Resident

ial Mortgage segment

in Korea (due to tightened

Debt Service Ratio following new government guidel

ines).

The proportion of loans and advances rated as strong

increased to 97 per cent (31 December 2021: 96 per cent).

Ventures increased by $609 mill

ion to $691 m

ill

ion

(31 December 2021: $82 mill

ion) from new lend

ing in

Mox Bank and the launch of Trust Bank in Singapore.

Central and other items segment increased by $17 bill

ion to

$39.1 bill

ion (31 December 2021: $22.4 b

ill

ion), due to h

igher

levels of reverse repurchase agreements with Non Bank

Financ

ial Inst

itut

ions and placements w

ith governments.

Stage 2:

Stage 2 loans and advances to customers decreased by

$4 bill

ion to $13.0 b

ill

ion (31 December 2021: $16.8 b

ill

ion),

primar

ily

in CCIB due to exposure reductions and rating

upgrades in Transport, telecom and util

ies sectors, $1 bill

ion

decrease in the Energy sector, offset by increase in stage 2 in

China commercial real estate. The proportion of stage 2 loans

also reduced to 4.1 per cent (31 December 2021: 5.5 per cent).

Stage 2 loans to customers classif

ied as ‘H

igher risk’ was at

$1.8 bill

ion due to the downgrade of Pak

istan. This was largely

offset by downgrades to stage 3 primar

ily as a result of Sr

Lanka and Ghana sovereign rating downgrade.

CPBB stage 2 loans reduced by $0.2 bill

ion pr

imar

ily due to the

transfers into stage 1 aris

ing from the change

in Credit Risk

thresholds for certain credit card portfolios, largely in Asia.

The overall stage 2 cover ratio increased by 0.3 per cent to

3.4 per cent (31 December 2021: 3.1 per cent). CCIB cover ratio

increased to 2.8 per cent (31 December 2021: 2.3 per cent)

primar

ily w

ith

in h

igher risk exposures from sovereign

downgrades offset by full release of COVID-19 overlay. CPBB

stage 2 cover ratio decreased to 7.2 per cent (31 December

2021: 9.5 per cent), primar

ily dr

iven by the release of $30 mill

ion

of COVID-19 management overlays aris

ing from the

reassessment of residual risk after manifestat

ion of such r

isk

through ind

idual impa

irments, partly offset by worsen

ing

macroeconomic variables and portfolio maturity in the China

loan book.

Stage 3:

Gross stage 3 loans decreased by $0.3 bill

ion to $7.8 b

ill

ion

(31 December 2021: $8.1 bill

ion) as a result of upgrades and

debt sales in CCIB which was offset by the downgrade of Sri

Lanka and Ghana and China commercial real estate clients.

CPBB stage 3 loans were materially unchanged at $1.5 bill

ion,

the $0.1 bill

ion decrease was largely

in Secured wealth and

Mortgages portfolio.

Ventures stage 3 was $1 mill

ion pr

imar

ily dr

iven by

downgrades in Mox Bank Hong Kong.

Central and other items stage 3 balances increased to $248

mill

ion (31 December 2021: N

il) due to downgrade of local

currency loans to Sri Lanka Sovereign.

242

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Loans and advances by client segment (audited)

Amortised cost

2022

Banks

$mill

ion

Customers

Undrawn

commitments

$mill

ion

Financ

ial

Guarantees

$mill

ion

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

$mill

ion

Customer

Total

$mill

ion

Stage 1

39,149

126,261

129,134

691

39,133

295,219

162,958

56,683

- Strong

27,941

89,567

124,734

685

39,133

254,119

148,303

39,612

- Satisfactory

11,208

36,694

4,400

–

41,100

14,655

17,071

Stage 2

337

11,355

1,670

–

13,043

5,582

3,062

- Strong

148

2,068

1,215

–

3,293

1,449

522

- Satisfactory

119

7,783

146

–

7,933

3,454

2,134

- Higher risk

1,504

309

–

1,817

679

406

Of which (stage 2):

- Less than 30 days past due

109

148

–

261

–

- More than 30 days past due

310

–

337

–

Stage 3, credit-impa

ired ﬁnancial

assets

6,143

1,453

248

7,845

128

665

Gross balance¹

39,545

143,759

132,257

710

39,381

316,107

168,668

60,410

Stage 1

(9)

(143)

(406)

(10)

–

(559)

(41)

(11)

- Strong

(3)

(43)

(332)

(10)

–

(385)

(28)

(3)

- Satisfactory

(6)

(100)

(74)

–

(174)

(13)

(8)

Stage 2

(3)

(323)

(120)

(1)

–

(444)

(53)

(28)

- Strong

–

(30)

(62)

(1)

–

(93)

(6)

–

- Satisfactory

(2)

(159)

(17)

–

(176)

(42)

(15)

- Higher risk

(1)

(134)

(41)

–

(175)

(5)

(13)

Of which (stage 2):

- Less than 30 days past due

–

(2)

(17)

–

(19)

–

- More than 30 days past due

–

(1)

(41)

–

(42)

–

Stage 3, credit-impa

ired ﬁnancial

assets

(14)

(3,662)

(776)

(1)

(18)

(4,457)

–

(147)

Total credit impa

irment

(26)

(4,128)

(1,302)

(12)

(18)

(5,460)

(94)

(186)

Net carrying value

39,519

139,631

130,955

698

39,363

310,647

Stage 1

0.0%

0.1%

0.3%

1.4%

0.0%

0.2%

0.0%

- Strong

0.0%

0.3%

1.5%

0.0%

0.2%

0.0%

- Satisfactory

0.1%

0.3%

1.7%

0.0%

0.4%

0.1%

0.0%

Stage 2

0.9%

2.8%

7.2%

5.6%

0.0%

3.4%

0.9%

- Strong

0.0%

1.5%

5.1%

10.0%

0.0%

2.8%

0.4%

0.0%

- Satisfactory

1.7%

2.0%

11.6%

0.0%

2.2%

1.2%

0.7%

- Higher risk

1.4%

8.9%

13.3%

0.0%

9.6%

0.7%

3.2%

Of which (stage 2):

- Less than 30 days past due

0.0%

1.8%

11.5%

0.0%

7.3%

0.0%

- More than 30 days past due

0.0%

4.3%

13.2%

0.0%

12.5%

0.0%

Stage 3, credit-impa

ired ﬁnancial

assets (S3)

23.7%

59.6%

53.4%

100.0%

7.3%

56.8%

0.0%

22.1%

Cover ratio

0.1%

2.9%

1.0%

1.7%

0.0%

1.7%

0.1%

0.3%

Fair value through proﬁt or loss

Performing

24,930

44,461

–

2,557

47,046

–

- Strong

21,451

36,454

–

2,409

38,890

–

- Satisfactory

3,479

8,007

–

148

8,156

–

- Higher risk

–

Defaulted (CG13-14)

–

Gross balance (FVTPL)

24,930

44,498

–

2,557

47,083

–

Net carrying value (incl FVTPL)

64,449

184,129

130,983

698

41,920

357,730

–

Loans and advances includes reverse repurchase agreements and other sim

ilar secured lend

ing of $24,498 mill

ion under Customers and of $978 m

ill

ion under

Banks, held at amortised cost

Loans and advances includes reverse repurchase agreements and other sim

ilar secured lend

ing of $40,537 mill

ion under Customers and of $23,954 m

ill

ion under

Banks, held at fair value through proﬁt or loss

243

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Amortised cost

2021 (Restated)

Banks

$mill

ion

Customers

Undrawn

commitments

$mill

ion

Financ

ial

Guarantees

$mill

ion

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

$mill

ion

Customer

Total

$mill

ion

Stage 1

43,776

122,368

134,289

22,439

279,178

149,530

54,923

– Strong

30,813

77,826

129,486

22,333

229,727

132,274

37,418

– Satisfactory

12,963

44,542

4,803

–

106

49,451

17,256

17,505

Stage 2

580

14,818

1,912

110

16,849

8,993

2,813

– Strong

126

2,366

1,253

–

3,619

2,786

714

– Satisfactory

105

11,180

308

–

11,488

5,235

1,546

– Higher risk

349

1,272

351

110

1,742

972

553

Of which (stage 2):

– Less than 30 days past due

–

308

–

385

–

– More than 30 days past due

–

351

–

409

–

Stage 3, credit-impa

ired

ﬁnancial assets

6,520

1,575

–

8,095

–

799

Gross balance

44,410

143,706

137,776

22,549

304,122

158,523

58,535

Stage 1

(12)

(103)

(369)

(1)

–

(473)

(42)

(15)

– Strong

(4)

(58)

(282)

(1)

–

(341)

(23)

(5)

– Satisfactory

(8)

(45)

(87)

–

(132)

(19)

(10)

Stage 2

(4)

(341)

(181)

(2)

–

(524)

(60)

(22)

– Strong

(2)

(62)

(104)

–

(166)

(6)

(1)

– Satisfactory

(2)

(179)

(32)

–

(211)

(46)

(9)

– Higher risk

–

(100)

(45)

(2)

–

(147)

(8)

(12)

Of which (stage 2):

– Less than 30 days past due

–

(2)

(32)

–

(34)

–

– More than 30 days past due

–

(3)

(45)

(2)

–

(50)

–

Stage 3, credit-impa

ired

ﬁnancial assets

(11)

(3,861)

(796)

–

(4,657)

–

(207)

Total credit impa

irment

(27)

(4,305)

(1,346)

(3)

–

(5,654)

(102)

(244)

Net carrying value

44,383

139,401

136,430

22,549

298,468

Stage 1

0.0%

0.1%

0.3%

1.2%

0.0%

0.2%

0.0%

– Strong

0.0%

0.1%

0.2%

1.2%

0.0%

0.1%

0.0%

– Satisfactory

0.1%

1.8%

0.0%

0.3%

0.1%

Stage 2

0.7%

2.3%

9.5%

22.2%

0.0%

3.1%

0.7%

0.8%

– Strong

1.6%

2.6%

8.3%

0.0%

4.6%

0.2%

0.1%

– Satisfactory

1.9%

1.6%

10.4%

0.0%

1.8%

0.9%

0.6%

– Higher risk

0.0%

7.9%

12.8%

22.2%

0.0%

8.4%

0.8%

2.2%

Of which (stage 2):

– Less than 30 days past due

0.0%

2.6%

10.4%

0.0%

8.8%

0.0%

– More than 30 days past due

0.0%

6.1%

12.8%

22.2%

0.0%

12.2%

0.0%

Stage 3, credit-impa

ired

ﬁnancial assets (S3)

20.4%

59.2%

50.5%

0.0%

57.5%

0.0%

25.9%

Cover ratio

0.1%

3.0%

1.0%

3.3%

0.0%

1.9%

0.1%

0.4%

Fair value through proﬁt or loss

Performing

22,574

69,356

–

1,774

71,197

–

– Strong

20,132

53,756

–

1,772

55,595

–

– Satisfactory

2,442

15,600

–

15,602

–

– Higher risk

–

Defaulted (CG13-14)

–

Gross balance (FVTPL)

22,574

69,394

–

1,774

71,235

–

Net carrying value (incl FVTPL)

66,957

208,795

136,497

24,323

369,703

–

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from

January 2022. Prior period has been restated

Loans and advances includes reverse repurchase agreements and other sim

ilar secured lend

ing of $7,331 mill

ion under Customers and of $1,079 m

ill

ion under

Banks, held at amortised cost

Loans and advances includes reverse repurchase agreements and other sim

ilar secured lend

ing of $61,282 mill

ion under Customers and of $18,727 m

ill

ion under

Banks, held at fair value through proﬁt or loss

244

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Loans and advances by client segment credit quality analysis

Credit grade

Regulatory 1 year

PD range (%)

S&P external ratings

equivalent

Corporate, Commercial & Institut

ional Bank

ing

2022

Gross

Credit impa

irment

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Total

Strong

89,567

2,068

–

91,635

(43)

(30)

–

(73)

1A-2B

0 – 0.045

AA- and above

8,247

117

–

8,364

(4)

–

(4)

3A-4A

0.046 – 0.110

A+ to A-

36,379

321

–

36,700

(5)

–

(5)

4B-5B

0.111 – 0.425

BBB+ to BBB-/BB+

44,941

1,630

–

46,571

(34)

(30)

–

(64)

Satisfactory

36,694

7,783

–

44,477

(100)

(159)

–

(259)

6A-7B

0.426 – 1.350

BB+/BB to BB-

23,196

2,684

–

25,880

(67)

(94)

–

(161)

8A-9B

1.351 – 4.000

BB-/B+ to B+/B

9,979

3,116

–

13,095

(20)

(35)

–

(55)

10A-11C

4.001 – 15.75

B to B-/CCC+

3,519

1,983

–

5,502

(13)

(30)

–

(43)

Higher risk

–

1,504

–

1,504

–

(134)

–

(134)

15.751 – 99.999

CCC+/C

–

1,504

–

1,504

–

(134)

–

(134)

Credit-

impa

ired

–

6,143

–

(3,662)

13-14

100

Defaulted

–

6,143

–

(3,662)

Total

126,261

11,355

6,143

143,759

(143)

(323)

(3,662)

(4,128)

Credit grade

Regulatory 1 year

PD range (%)

S&P external ratings

equivalent

2021

Gross

Credit impa

irment

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Total

Strong

77,826

2,366

–

80,192

(58)

(62)

–

(120)

1A-2B

0 – 0.045

AA- and above

14,013

216

–

14,229

(1)

–

(1)

3A-4A

0.046 – 0.110

A+ to A-

23,173

515

–

23,688

(3)

–

(3)

4B-5B

0.111 – 0.425

BBB+ to BBB-/BB+

40,640

1,635

–

42,275

(54)

(62)

–

(116)

Satisfactory

44,542

11,180

–

55,722

(45)

(179)

–

(224)

6A-7B

0.426 – 1.350

BB+/BB to BB-

27,009

2,894

–

29,903

(21)

(40)

–

(61)

8A-9B

1.351 – 4.000

BB-/B+ to B+/B

11,910

5,592

–

17,502

(13)

(90)

–

(103)

10A-11C

4.001 – 15.75

B to B-/CCC+

5,623

2,694

–

8,317

(11)

(49)

–

(60)

Higher risk

–

1,272

–

1,272

–

(100)

–

(100)

15.751 – 99.999

CCC+/C

–

1,272

–

1,272

–

(100)

–

(100)

Credit-

impa

ired

–

6,520

–

(3,861)

13-14

100

Defaulted

–

6,520

–

(3,861)

Total

122,368

14,818

6,520

143,706

(103)

(341)

(3,861)

(4,305)

245

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Credit grade

Consumer, Private & Business Banking

2022

Gross

Credit impa

irment

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Total

Strong

124,734

1,215

–

125,949

(332)

(62)

–

(394)

Secured

107,262

995

–

108,257

(48)

(12)

–

(60)

Unsecured

17,472

220

–

17,692

(284)

(50)

–

(334)

Satisfactory

4,400

146

–

4,546

(74)

(17)

–

(91)

Secured

4,006

115

–

4,121

(11)

(1)

–

(12)

Unsecured

394

–

425

(63)

(16)

–

(79)

Higher risk

–

309

–

309

–

(41)

–

(41)

Secured

–

216

–

216

–

(6)

–

(6)

Unsecured

–

(35)

–

(35)

Credit-impa

ired

–

1,453

–

(776)

Secured

1,028

(552)

Unsecured

–

425

–

(224)

Total

129,134

1,670

1,453

132,257

(406)

(120)

(776)

(1,302)

Credit grade

2021 (Restated

)

Gross

Credit impa

irment

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Total

Strong

129,486

1,253

–

130,739

(282)

(104)

–

(386)

Secured

112,167

884

–

113,051

(48)

(19)

–

(67)

Unsecured

17,319

369

–

17,688

(234)

(85)

–

(319)

Satisfactory

4,803

308

–

5,111

(87)

(32)

–

(119)

Secured

4,524

164

–

4,688

(44)

(1)

–

(45)

Unsecured

279

144

–

423

(43)

(31)

–

(74)

Higher risk

–

351

–

351

–

(45)

–

(45)

Secured

–

250

–

250

–

(11)

–

(11)

Unsecured

–

101

–

101

–

(34)

–

(34)

Credit-impa

ired

–

1,575

–

(796)

Secured

1,107

(516)

Unsecured

–

468

–

(280)

Total

134,289

1,912

1,575

137,776

(369)

(181)

(796)

(1,346)

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from 1

January 2022. Prior period has been restated. Detailed credit quality analysis not presented as amounts are not sufﬁc

iently mater

ial

246

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Credit quality by geographic region

The following table sets out the credit quality for gross loans and advances to customers and banks, held at amortised cost, by

geographic region and stage.

Loans and advances to customers

Amortised cost

2022

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Gross (stage 1)

248,625

17,553

29,041

295,219

235,123

19,990

24,065

279,178

Provis

ion (stage 1)

(454)

(73)

(32)

(559)

(371)

(86)

(16)

(473)

Gross (stage 2)

8,302

3,122

1,619

13,043

8,779

4,077

3,993

16,849

Provis

ion (stage 2)

(337)

(104)

(3)

(444)

(318)

(137)

(69)

(524)

Gross (stage 3)

4,562

2,725

558

7,845

4,448

2,918

729

8,095

Provis

ion (stage 3)

(2,483)

(1,765)

(209)

(4,457)

(2,400)

(1,970)

(287)

(4,657)

Net loans

258,215

21,458

30,974

310,647

245,261

24,792

28,415

298,468

Includes reverse repurchase agreements and other sim

ilar secured lend

ing

Loans and advances to banks

Amortised cost

2022

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Gross (stage 1)

21,806

3,818

13,525

39,149

29,916

5,828

8,032

43,776

Provis

ion (stage 1)

(3)

(4)

(2)

(9)

(3)

(5)

(4)

(12)

Gross (stage 2)

212

116

337

346

144

580

Provis

ion (stage 2)

(2)

(1)

–

(3)

(1)

(2)

(4)

Gross (stage 3)

–

Provis

ion (stage 3)

(14)

–

(14)

(11)

–

(11)

Net loans¹

22,058

3,929

13,532

39,519

30,301

5,966

8,116

44,383

Includes reverse repurchase agreements and other sim

ilar secured lend

ing

247

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Movement in gross exposures and credit impa

irment for loans and advances, debt secur

ies, undrawn comm

itments and

ﬁnancial guarantees (aud

ited)

The tables overleaf set out the movement in gross exposures and credit impa

irment by stage

in respect of amortised cost loans

to banks and customers, undrawn commitments, ﬁnanc

ial guarantees and debt secur

ies class

ied at amort

ised cost and

FVOCI. The tables are presented for the Group, debt securit

ies and other el

ible b

ills.

Methodology

The movement lines with

in the tables are an aggregat

ion of monthly movements over the year and will therefore reﬂect the

accumulation of multiple trades during the year. The credit impa

irment charge

in the income statement comprises the amounts

with

in the boxes

in the table below, less recoveries of amounts previously written off. Discount unwind is reported in net interest

income and related to stage 3 ﬁnanc

ial

instruments only.

The approach for determin

ing the key l

ine items in the tables is set out below.

•

Transfers

– transfers between stages are deemed to occur at the beginn

ing of a month based on pr

ior month closing

balances

•

Net remeasurement from stage changes

– the remeasurement of credit impa

irment prov

ions ar

ing from a change

stage is reported with

in the stage that the assets are transferred to. For example, assets transferred

into stage 2 are

remeasured from a 12-month to a lifet

ime expected cred

it loss, with the effect of remeasurement reported in stage 2. For

stage 3, this represents the in

ial remeasurement from specif

ic prov

ions recogn

ised on ind

idual assets transferred into

stage 3 in the year

•

Net changes in exposures

– new business written less repayments in the year. With

in stage 1, new bus

iness written will attract

up to 12 months of expected credit loss charges. Repayments of non-amortis

ing loans (pr

imar

ily w

ith

in CCIB) w

ill have low

amounts of expected credit loss provis

ions attr

ibuted to them, due to the release of provis

ions over the term to matur

ity. In

stages 2 and 3, the amounts princ

ipally reﬂect repayments although stage 2 may

include new business written where clients

are on non-purely precautionary early alert, are CG 12, or when non-investment grade debt securit

ies are acqu

ired.

•

Changes in risk parameters

– for stages 1 and 2, this reﬂects changes in the probabil

ity of default (PD), loss g

iven default

(LGD) and exposure at default (EAD) of assets during the year, which includes the impact of releasing provis

ions over the term

to maturity. It also includes the effect of changes in forecasts of macroeconomic variables during the year. In stage 3, this line

represents addit

ional spec

ic prov

ions recogn

ised on exposures held with

in stage 3

•

Interest due but not paid

– change in contractual amount of interest due in stage 3 ﬁnanc

ial

instruments but not paid, being

the net of accruals, repayments and write-offs, together with the corresponding change in credit impa

irment

Changes to ECL models, which incorporate changes to model approaches and methodologies, are not reported as a separate

line item as these have an impact over a number of lines and stages.

Movements during the year

Stage 1 gross exposures increased by $35 bill

ion to $720 b

ill

ion when compared w

ith 31 December 2021. $2 bill

ion net

increase

was in CCIB, from new orig

inat

ions largely reverse repurchase agreements from a change in booking model and undrawn

commitments. There was a $2 bill

ion net

increase in CPBB due to an increase in undrawn commitments of $7 bill

ion. Debt

securit

ies

increased by $9 bill

ion

in stage 1. The rest of the increase is largely Central and other items segment due to lending to

Governments in Asia.

Total stage 1 provis

ions

increased by $36 mill

ion to $645 m

ill

ion. CPBB

increase is $36 mill

ion pr

imar

ily

in unsecured lending from

net change in exposures, MEV changes and book growth in Asia offset by partial release of COVID-19 overlay. CCIB provis

ions

increased by $31 mill

ion pr

imar

ily due to new or

inat

ions. Debt Security provis

ion decreased by $42 m

ill

ion largely due to stage

transfers following sovereign downgrades in Asia and Africa and the Middle East.

Stage 2 gross exposures decreased by $7 bill

ion to $27 b

ill

ion, pr

imar

ily dr

iven by $6 bill

ion of net outﬂows from exposure

changes and transfers to stage 1 in CCIB, particularly in the Energy and Transport, Telecom and Util

ies sectors. CPBB exposures

decreased by $1.9 bill

ion, of wh

ich $1.3 bill

ion was from the secured portfol

io. Debt securit

ies were broadly stable as ex

its were

offset by the sovereign downgrade of Pakistan.

Stage 2 provis

ions decreased by $34 m

ill

ion to $618 m

ill

ion compared to 31 December 2021. $14 m

ill

ion decrease

is from CCIB

from full release of judgemental COVID-19 overlay of $102 mill

ion offset by the

impact of sovereign downgrades and an increase

in provis

ions for Ch

ina commercial real estate. CPBB provis

ions decreased by $67 m

ill

ion, ma

inly in unsecured lending as a result

of sign

iﬁcant

increase in credit risk thresholds which resulted in a decrease of ECL of $15 mill

ion and model changes resulted

ECL decrease of $7 mill

ion, and part

ial release of COVID-19 overlay.

In CCIB, gross stage 3 loans decreased by $0.4 bill

ion compared w

ith 31 December 2021 due to upgrades and repayments

offset by sovereign downgrades in Africa and the Middle East and increased exposure to China commercial real estate. CCIB

provis

ions decreased by $0.3 b

ill

ion to $3.8 b

ill

ion. CPBB total stage 3 loans decreased by $0.1 b

ill

ion to $1.5 b

ill

ion and prov

ion

decreased by $21 mill

ion dr

iven by Personal loans and other unsecured lending portfolio as markets returned to normalised

ﬂows following the expiry of the major

ity of COVID-19 rel

ief schemes in 2021 offset by increase in provis

ions secured portfol

io.

Debt Security Gross assets increased by $31 mill

ion to $144 m

ill

ion (31 December 2021: $113 m

ill

ion) due to new downgrade of

Ghana Sovereign, offset by one corporate write-off.

248

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

All segments (audited)

Amortised cost and FVOCI

Stage 1

Stage 2

Stage 3

Total

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

As at 1 January 2021

642,960

(663) 642,297

39,787

(881)

38,906

10,100

(5,593)

4,507

692,847

(7,137) 685,710

Transfers to stage 1

25,975

(620)

25,355

(25,924)

620

(25,304)

(51)

–

(51)

–

Transfers to stage 2

(53,994)

211

(53,783)

54,335

(220)

54,115

(341)

(332)

–

Transfers to stage 3

(212)

(209)

(2,822)

335

(2,487)

3,034

(338)

2,696

–

Net change in

exposures

84,288

(132)

84,156

(30,551)

169

(30,382)

(2,429)

661

(1,768)

51,308

698

52,006

Net remeasurement

from stage changes

–

(157)

–

(212)

–

(315)

Changes in risk

parameters

–

(89)

–

(915)

–

(925)

Write-offs

–

(1,215)

1,215

–

(1,215)

1,215

–

Interest due

but unpaid

–

(189)

189

–

(189)

189

–

Discount unwind

–

227

–

227

Exchange translation

differences and other

movements¹

(14,258)

459

(13,799)

(275)

(429)

(704)

152

(184)

(32)

(14,381)

(154)

(14,535)

As at 31 December

2021²

684,759

(609) 684,150

34,550

(652)

33,898

9,061

(4,941)

4,120

728,370

(6,202)

722,168

Income statement ECL

(charge)/release

(77)

(466)

(542)

Recoveries of amounts

previously written off

–

288

Total credit

impa

irment

(charge)/release

(77)

(178)

(254)

As at 1 January 2022

684,759

(609) 684,150

34,550

(652)

33,898

9,061

(4,941)

4,120

728,370

(6,202) 722,168

Transfers to stage 1

24,666

(555)

24,111

(24,633)

555 (24,078)

(33)

–

(33)

–

Transfers to stage 2

(46,960)

228

(46,732)

47,479

(246)

47,233

(519)

(501)

–

Transfers to stage 3

(176)

(102)

(3,630)

253

(3,377)

3,806

(327)

3,479

–

Net change in

exposures

83,204

(137)

83,067

(24,324)

(24,231)

(1,710)

338

(1,372)

57,170

294

57,464

Net remeasurement

from stage changes

–

(126)

–

(168)

–

(249)

Changes in risk

parameters

–

106

–

(387)

–

(895)

–

(1,176)

Write-offs

–

(949)

949

–

(949)

949

–

Interest due

but unpaid

–

(157)

157

–

(157)

157

–

Discount unwind

–

136

–

136

Exchange translation

differences and other

movements¹

(25,381)

203

(25,178)

(1,963)

(108)

(2,071)

(658)

(649)

(28,002)

104

(27,898)

As at 31 December

2022²

720,112

(645) 719,467

27,479

(618)

26,861

8,841

(4,724)

4,117

756,432

(5,987)750,445

Income statement ECL

(charge)/release

(420)

(725)

(1,131)

Recoveries of amounts

previously written off

–

293

Total credit

impa

irment

(charge)/release

(420)

(432)

(838)

Includes fair value adjustments and amortisat

ion on debt secur

ies

Excludes Cash and balances at central banks, Accrued income, Assets held for sale and Other assets gross balances of $101,743 mill

ion (2021: $114,464 m

ill

ion) and

Total credit impa

irment of $88 m

ill

ion (2021: $7 m

ill

ion)

The gross balance includes the notional amount of off balance sheet instruments

4 Statutory basis

Stage 3 gross includes $28 mill

ion (2021: $33 m

ill

ion) or

inated cred

it-impa

ired debt secur

ies w

ith impa

irment of $13 m

ill

ion (2021: N

il)

6 Does not include $2 mill

ion (2021: N

il) release relating to Other assets

249

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Of which – movement of debt securit

ies, alternat

ive tier one and other elig

ible b

ills (audited)

Amortised cost and FVOCI

Stage 1

Stage 2

Stage 3

Total

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

As at 1 January 2021

149,316

(56) 149,260

3,506

(26)

3,480

114

(58)

152,936

(140)

152,796

Transfers to stage 1

403

(11)

392

(403)

(392)

–

Transfers to stage 2

(2,358)

(2,342)

2,358

(16)

2,342

–

Transfers to stage 3

–

Net change in

exposures

14,670

(39)

14,631

(155)

(11)

(166)

–

14,515

(49)

14,466

Net remeasurement

from stage changes

–

(17)

–

(4)

Changes in risk

parameters

–

(3)

–

Write-offs

–

Interest due

but unpaid

–

Exchange translation

differences and other

movements

(4,679)

(11)

(4,690)

(1)

(6)

(7)

(4,671)

(8)

(4,679)

As at 31 December

2021

157,352

(67)

157,285

5,315

(42)

5,273

113

(66)

162,780

(175) 162,605

Income statement ECL

(charge)/release

(5)

(20)

(2)

(27)

Recoveries of amounts

previously written off

–

Total credit

impa

irment

(charge)/release

(5)

(20)

(2)

(27)

As at 1 January 2022

157,352

(67) 157,285

5,315

(42)

5,273

113

(66)

162,780

(175) 162,605

Transfers to stage 1

2,296

(22)

2,274

(2,296)

(2,274)

–

Transfers to stage 2

(3,942)

(3,904)

3,942

(38)

3,904

–

Transfers to stage 3

–

(66)

(24)

(42)

–

Net change in

exposures

21,613

(44)

21,569

(752)

(743)

–

20,861

(34)

20,827

Net remeasurement

from stage changes

–

(2)

–

(23)

–

(15)

Changes in risk

parameters

–

(98)

–

(13)

–

(73)

Write-offs

–

(30)

–

(30)

–

Interest due

but unpaid

–

Exchange translation

differences and other

movements

(11,216)

(11,194)

(688)

(671)

(5)

(11,909)

(11,863)

As at 31 December

2022

166,103

(25) 166,078

5,455

(90)

5,365

144

(106)

171,702

(221)

171,481

Income statement ECL

(charge)/release

(91)

(35)

(122)

Recoveries of amounts

previously written off

–

Total credit

impa

irment

(charge)/release

(91)

(35)

(122)

Includes fair value adjustments and amortisat

ion on debt secur

ies

Stage 3 gross includes $28 mill

ion (2021: $33 m

ill

ion) or

inated cred

it-impa

ired debt secur

ies w

ith impa

irment of $13 m

ill

ion (2021: N

il)

FVOCI instruments are not presented net of ECL. While the presentation is on a net basis for the table, the total net on-balance sheet amount to $171,640 mill

ion

(31 December 2021: $162,700 mill

ion. Refer to the Analys

is of ﬁnanc

ial

instrument by stage table on page 239

250

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Corporate, Commercial & Institut

ional Bank

ing (audited)

Amortised cost and FVOCI

Stage 1

Stage 2

Stage 3

Total

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

As at 1 January 2021

292,453

(154) 292,299

31,742

(599)

31,143

8,422

(4,803)

3,619

332,617

(5,556)

327,061

Transfers to stage 1

21,123

(243)

20,880

(21,123)

243

(20,880)

–

Transfers to stage 2

(45,354)

103

(45,251)

45,556

(112)

45,444

(202)

(193)

–

Transfers to stage 3

(69)

–

(69)

(1,989)

164

(1,825)

2,058

(164)

1,894

–

Net change in

exposures

50,762

(62)

50,700

(28,447)

133

(28,314)

(2,082)

636

(1,446)

20,233

707

20,940

Net remeasurement

from stage changes

–

(27)

–

(145)

–

(171)

Changes in risk

parameters

–

(105)

–

(434)

–

(498)

Write-offs

–

(510)

510

–

(510)

510

–

Interest due

but unpaid

–

(224)

224

–

(224)

224

–

Discount unwind

–

191

–

191

Exchange translation

differences and other

movements

(5,783)

151

(5,632)

(302)

(122)

(424)

(90)

(103)

(193)

(6,175)

(74)

(6,249)

As at 31 December

2021

313,132

(163)

312,969

25,437

(425)

25,012

7,372

(4,079)

3,293

345,941

(4,667)

341,274

Income statement ECL

(charge)/release

(20)

Recoveries of amounts

previously written off

–

Total credit

impa

irment

(charge)/release

(20)

As at 1 January 2022

313,132

(163) 312,969

25,437

(425)

25,012

7,372

(4,079)

3,293

345,941

(4,667) 341,274

Transfers to stage 1

17,565

(227)

17,338

(17,565)

227

(17,338)

–

Transfers to stage 2

(37,505)

(37,457)

37,944

(66)

37,878

(439)

(421)

–

Transfers to stage 3

(42)

–

(42)

(2,478)

134

(2,344)

2,520

(134)

2,386

–

Net change in

exposures

30,508

(44)

30,464

(21,915)

(21,850)

(1,314)

340

(974)

7,279

361

7,640

Net remeasurement

from stage changes

–

(42)

–

(104)

–

(144)

Changes in risk

parameters

–

(154)

–

(551)

–

(684)

Write-offs

–

(384)

384

–

(384)

384

–

Interest due

but unpaid

–

(130)

130

–

(130)

130

–

Discount unwind

–

110

–

110

Exchange translation

differences and other

movements

(8,221)

169

(8,052)

(1,275)

(150)

(1,425)

(631)

(567)

(10,127)

(10,044)

As at 31 December

2022

315,437

(194) 315,243

20,148

(411)

19,737

6,994

(3,822)

3,172

342,579

(4,427) 338,152

Income statement ECL

(charge)/release

(21)

(131)

(315)

(467)

Recoveries of amounts

previously written off

–

Total credit

impa

irment

(charge)/release

(21)

(131)

(266)

(418)

The gross balance includes the notional amount of off balance sheet instruments

Does not include $2 mill

ion (2021: N

il) release relating to Other assets

251

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Consumer, Private and Business Banking (restated)¹ (audited)

Amortised cost and FVOCI

Stage 1

Stage 2

Stage 3

Total

Gross

balance

$mill

ion

Total

credit

impa

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ment

$mill

ion

Net

$mill

ion

As at 1 January 2021

182,044

(445)

181,599

4,534

(259)

4,275

1,561

(730)

831

188,139

(1,434) 186,705

Transfers to stage 1

4,450

(365)

4,085

(4,399)

365

(4,034)

(51)

–

(51)

–

Transfers to stage 2

(6,270)

(6,181)

6,409

(89)

6,320

(139)

–

(139)

–

Transfers to stage 3

(144)

(142)

(833)

172

(661)

977

(174)

803

–

Net change in

exposures

14,055

(28)

14,027

(2,060)

(2,013)

(347)

(323)

11,648

11,691

Net remeasurement

from stage changes

–

(113)

–

(66)

–

(139)

Changes in risk

parameters

–

(480)

–

(455)

Write-offs

–

(705)

705

–

(705)

705

–

Interest due but

unpaid

–

(35)

–

(35)

–

Discount unwind

–

Exchange translation

differences and other

movements

(3,275)

313

(2,962)

(316)

(292)

247

(77)

170

(3,004)

(80)

(3,084)

As at 31 December

2021

190,860

(377) 190,483

3,675

(185)

3,490

1,578

(797)

781

196,113

(1,359) 194,754

Income statement ECL

(charge)/release

(58)

(522)

(551)

Recoveries of amounts

previously written off

–

269

Total credit

impa

irment

(charge)/release

(58)

(253)

(282)

As at 1 January 2022

190,860

(377) 190,483

3,675

(185)

3,490

1,578

(797)

781

196,113

(1,359) 194,754

Transfers to stage 1

4,798

(314)

4,484

(4,765)

314

(4,451)

(33)

–

(33)

–

Transfers to stage 2

(5,498)

(5,406)

5,578

(92)

5,486

(80)

–

(80)

–

Transfers to stage 3

(81)

–

(81)

(890)

151

(739)

971

(151)

820

–

Net change in

exposures

9,072

(49)

9,023

(1,611)

(1,592)

(396)

–

(396)

7,065

(30)

7,035

Net remeasurement

from stage changes

–

(82)

–

(25)

–

(75)

Changes in risk

parameters

–

(132)

–

(331)

–

(400)

Write-offs

–

(535)

535

–

(535)

535

–

Interest due but

unpaid

–

(27)

–

(27)

–

Discount unwind

–

Exchange translation

differences and other

movements

(5,912)

140

(5,772)

(166)

(111)

(277)

(24)

(60)

(84)

(6,102)

(31)

(6,133)

As at 31 December

2022

193,239

(413) 192,826

1,821

(118)

1,703

1,454

(776)

678

196,514

(1,307) 195,207

Income statement ECL

(charge)/release

(195)

(356)

(505)

Recoveries of amounts

previously written off

–

245

Total credit

impa

irment

(charge)/release

(195)

(111)

(260)

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from 2022.

Prior period has been restated

The gross balance includes the notional amount of off balance sheet instruments

252

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Consumer, Private and Business Banking – Secured (restated)¹ (audited)

Amortised cost and FVOCI

Stage 1

Stage 2

Stage 3

Total

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

As at 1 January 2021

127,448

(72)

127,376

3,363

(52)

3,311

1,058

(418)

640

131,869

(542)

131,327

Transfers to stage 1

2,884

(37)

2,847

(2,843)

(2,806)

(41)

–

(41)

–

Transfers to stage 2

(3,888)

(3,879)

4,007

(9)

3,998

(119)

–

(119)

–

Transfers to stage 3

(107)

(106)

(400)

(392)

507

(9)

498

–

Net change in

exposures

13,009

(9)

13,000

(1,452)

(1,449)

(224)

(200)

11,333

11,351

Net remeasurement

from stage changes

–

(1)

–

(2)

–

(1)

–

(4)

Changes in risk

parameters

–

(144)

–

(126)

Write-offs

–

(125)

125

–

(125)

125

–

Interest due

but unpaid

–

(3)

–

(3)

–

Discount unwind

–

Exchange translation

differences and other

movements

(2,746)

(2,737)

(31)

(21)

(131)

(81)

(2,686)

(153)

(2,839)

As at 31 December

2021

136,600

(96) 136,504

2,685

(32)

2,653

1,103

(517)

586

140,388

(645)

139,743

Income statement ECL

(charge)/release

(6)

(121)

(112)

Recoveries of amounts

previously written off

–

Total credit

impa

irment

(charge)/release

(6)

(53)

(44)

As at 1 January 2022

136,600

(96) 136,504

2,685

(32)

2,653

1,103

(517)

586

140,388

(645) 139,743

Transfers to stage 1

3,080

(28)

3,052

(3,054)

(3,026)

(26)

–

(26)

–

Transfers to stage 2

(3,254)

(3,243)

3,319

(11)

3,308

(65)

–

(65)

–

Transfers to stage 3

(38)

(37)

(473)

(472)

511

(2)

509

–

Net change in

exposures

3,093

(8)

3,085

(945)

(944)

(259)

–

(259)

1,889

(7)

1,882

Net remeasurement

from stage changes

–

(1)

–

(4)

–

(4)

Changes in risk

parameters

–

(4)

–

(80)

–

(36)

Write-offs

–

(78)

–

(78)

–

Interest due

but unpaid

–

Discount unwind

–

Exchange translation

differences and other

movements

(4,119)

(4,056)

(119)

(51)

(170)

(158)

(27)

(185)

(4,396)

(15)

(4,411)

As at 31 December

2022

135,362

(60) 135,302

1,413

(17)

1,396

1,028

(552)

476

137,803

(629)

137,174

Income statement ECL

(charge)/release

(11)

(84)

(47)

Recoveries of amounts

previously written off

–

Total credit

impa

irment

(charge)/release

(11)

(29)

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from 2022.

Prior period has been restated

The gross balance includes the notional amount of off balance sheet instruments

253

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Consumer, Private and Business Banking – Unsecured (restated)¹ (audited)

Amortised cost and FVOCI

Stage 1

Stage 2

Stage 3

Total

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance²

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance²

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

As at 1 January 2021

54,596

(373)

54,223

1,171

(207)

964

503

(312)

191

56,270

(892)

55,378

Transfers to stage 1

1,566

(328)

1,238

(1,556)

328

(1,228)

(10)

–

(10)

–

Transfers to stage 2

(2,382)

(2,302)

2,402

(80)

2,322

(20)

–

(20)

–

Transfers to stage 3

(37)

(36)

(433)

164

(269)

470

(165)

305

–

Net change in

exposures

1,046

(19)

1,027

(608)

(564)

(123)

–

(123)

315

340

Net remeasurement

from stage changes

–

(111)

–

(65)

–

(135)

Changes in risk

parameters

–

(6)

–

(336)

–

(329)

Write-offs

–

(580)

580

–

(580)

580

–

Interest due

but unpaid

–

(38)

–

(38)

–

Discount unwind

–

Exchange translation

differences and other

movements

(529)

304

(225)

(285)

(271)

197

251

(318)

(245)

As at 31 December

2021

54,260

(281)

53,979

990

(153)

837

475

(280)

195

55,725

(714)

55,011

Income statement ECL

(charge)/release

(73)

(401)

(439)

Recoveries of amounts

previously written off

–

201

Total credit

impa

irment

(charge)/release

(73)

(200)

(238)

As at 1 January 2022

54,260

(281)

53,979

990

(153)

837

475

(280)

195

55,725

(714)

55,011

Transfers to stage 1

1,718

(286)

1,432

(1,711)

286

(1,425)

(7)

–

(7)

–

Transfers to stage 2

(2,244)

(2,163)

2,259

(81)

2,178

(15)

–

(15)

–

Transfers to stage 3

(43)

(1)

(44)

(417)

150

(267)

460

(149)

311

–

Net change in

exposures

5,979

(41)

5,938

(666)

(648)

(137)

–

(137)

5,176

(23)

5,153

Net remeasurement

from stage changes

–

(81)

–

(21)

–

(71)

Changes in risk

parameters

–

(180)

–

(251)

–

(364)

Write-offs

–

(457)

457

–

(457)

457

–

Interest due

but unpaid

–

(27)

–

(27)

–

Discount unwind

–

Exchange translation

differences and other

movements

(1,793)

(1,716)

(47)

(60)

(107)

134

(33)

101

(1,706)

(16)

(1,722)

As at 31 December

2022

57,877

(353)

57,524

408

(101)

307

426

(224)

202

58,711

(678)

58,033

Income statement ECL

(charge)/release

(243)

(272)

(458)

Recoveries of amounts

previously written off

–

190

Total credit

impa

irment

(charge)/release

(243)

(82)

(268)

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from 2022.

Prior period has been restated

The gross balance includes the notional amount of off balance sheet instruments

254

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Analysis of stage 2 balances

The table below analyses total stage 2 gross on-and off-balance sheet exposures and associated expected credit provis

ions by

the key sign

iﬁcant

increase in Credit Risk (SICR) driver that caused the exposures to be classif

ied as stage 2 as at 31 December

2022 and 31 December 2021 for each segment.

Where multiple drivers apply, the exposure is allocated based on the table order. For example, a loan may have breached the

PD thresholds and could also be on non-purely precautionary early alert; in this instance, the exposure is reported under

‘Increase in PD’.

2022

Corporate, Commercial &

Institut

ional Bank

ing

Consumer, Private &

Business Banking

Ventures

Central & other items

Total

Gross

$mill

ion

ECL

$mill

ion

Coverage

Gross

$mill

ion

ECL

$mill

ion

Coverage

Gross

$mill

ion

ECL

$mill

ion

Coverage

Gross

$mill

ion

ECL

$mill

ion

Coverage

Gross

$mill

ion

ECL

$mill

ion

Coverage

Increase in PD

13,620

192

1.4%

1,389

6.4%

–

0.0%

2,973

0.4%

17,982

292

1.6%

Non-purely

precautionary early alert

3,272

0.4%

–

0.0%

–

0.0%

–

0.0%

3,312

0.4%

Higher risk (CG12)

653

4.6%

5.6%

–

0.0%

2,534

2.7%

3,205

100

3.1%

Sub-investment grade

–

0.0%

–

0.0%

–

0.0%

11.6%

Top up/Sell down

(Private Banking)

–

0.0%

111

–

0.0%

–

0.0%

–

0.0%

111

–

0.0%

Others

2,603

1.6%

122

3.3%

–

0.0%

451

1.6%

3,176

1.6%

30 days past due

–

0.0%

146

8.2%

6.4%

–

0.0%

193

7.8%

Management overlay

–

136

0.0%

–

0.0%

–

0.0%

–

0.0%

–

148

0.0%

Total stage 2

20,148

411

2.0%

1,821

118

6.5%

6.4%

6,058

1.6%

28,074

630

2.2%

2021 (Restated)

Corporate, Commercial &

Institut

ional Bank

ing

Consumer, Private &

Business Banking

Ventures

Central & other items

Total

Gross

$mill

ion

ECL

$mill

ion

Coverage

Gross

$mill

ion

ECL

$mill

ion

Coverage

Gross

$mill

ion

ECL

$mill

ion

Coverage

Gross

$mill

ion

ECL

$mill

ion

Coverage

Gross

$mill

ion

ECL

$mill

ion

Coverage

Increase in PD

14,737

187

1.3%

2,704

123

4.5%

–

0.0%

4,691

0.5%

22,132

332

1.5%

Non-purely

precautionary early alert

5,000

0.5%

–

0.0%

–

0.0%

–

0.0%

5,083

0.5%

Higher risk (CG12)

1,075

3.4%

3.2%

–

0.0%

631

3.1%

1,733

3.3%

Sub-investment grade

235

0.3%

–

0.0%

–

0.0%

–

0.0%

235

0.3%

Top up/Sell down

(Private Banking)

–

0.0%

493

0.2%

–

0.0%

–

0.0%

493

0.2%

Others

4,390

0.2%

178

1.2%

–

0.0%

173

1.3%

4,741

0.3%

30 days past due

–

0.0%

190

8.7%

22.2%

–

0.0%

199

9.3%

Management overlay

–

166

0.0%

–

0.0%

–

0.0%

–

0.0%

–

208

0.0%

Total stage 2

25,437

425

1.7%

3,675

185

5.0%

22.2%

5,495

0.8%

34,616

656

1.9%

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from 1

January 2022. Prior period has been restated

The majority of exposures and the assoc

iated expected credit loss provis

ions cont

inue to be in stage 2 due to increases in the

probabil

ity of default.

The amount of exposures in CCIB placed on non-purely precautionary early alert and PD have decreased from repayments and

upgrades offset by sovereign downgrade of Pakistan.

In CPBB, 10 per cent of the provis

ions held aga

inst stage 2 arise from the applicat

ion of the 30 days past due backstop, although

this represents only 8 per cent of exposures.

Central and other items segment has seen a sign

iﬁcant

increase in the ’Higher risk’ category as at 31 December 2022 due to

Pakistan Sovereign downgrade.

‘Others’ primar

ily

incorporates exposures where orig

inat

ion data is incomplete and the exposures are allocated into stage 2.

255

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Credit impa

irment charge (restated)¹ (aud

ited)

The ongoing credit impa

irment was a net charge of $838 m

ill

ion (31 December 2021: $263 m

ill

ion), wh

ich consists of $432 mill

ion

in stage 3 (31 December 2021: $185 mill

ion) and $406 m

ill

ion

in stage 1 and 2 (31 December 2021: $78 mill

ion).

Stage 1 and 2 impa

irment charge

increased by $328 mill

ion to $406 m

ill

ion (31 December 2021: $78 m

ill

ion),

includ

ing a

$83 mill

ion charge relat

ing to the sovereign ratings downgrade of Pakistan into credit grade 12. The management overlay

relating to stage 1 and 2 assets was $210 mill

ion (31 December 2021: $344 m

ill

ion). There was a $212 m

ill

ion reduct

ion in the

COVID-19 element of the overlay, which now total $37 mill

ion, whereas the element relat

ing to China commercial real estate

sector increased by $78 mill

ion to $173 m

ill

ion.

CCIB Stage 1 and 2 impa

irments of $148 m

ill

ion are dr

iven by China commercial real estate downgrades includ

ing a $78 m

ill

ion

increase for China commercial real estate overlay and sovereign downgrades in Africa and the Middle East which is offset by

$102 mill

ion full release of COVID-19 overlay. Stage 3

impa

irment of $279 m

ill

ion

is largely from China commercial real estate

downgrades, clients’ rating changes due to the Sri Lanka and Ghana Sovereign rating downgrades, offset by releases and

repayments of a few notable clients.

CPBB charge decreased by $20 mill

ion to $262 m

ill

ion (31 December 2021: $282 m

ill

ion). Stage 1 and 2 charge

increased by

$121 mill

ion to $150 m

ill

ion (31 December 2021: $29 m

ill

ion). Stage 3 charge decreased by $141 m

ill

ion to $112 m

ill

ion (31 December

2021: $253 mill

ion) as markets returned to normal

ised ﬂows following the expiry of major

ity of COVID-19 rel

ief schemes in 2021.

In 2022, there were increased charges for Korea and Taiwan due to worsening macroeconomic forecasts, as well as China

due to portfolio maturity and book growth. This was offset by a net release of $110 mill

ion (31 December 2021: $15 m

ill

ion)

management overlays and a $25 mill

ion release from s

ign

iﬁcant

increase in Credit Risk (SICR) methodology changes and model

updates largely in the Asia region.

Ventures impa

irment charge

increased by $13 mill

ion to $16 m

ill

ion (31 December 2021: $3 m

ill

ion) due to book growth

in Mox

Bank and Trust Bank Singapore.

Central and other items stage 1 and 2 impa

irments of $95 m

ill

ion was dr

iven by the sovereign downgrade in Ghana and

Pakistan. Stage 3 charge of $38 mill

ion was dr

iven by the sovereign downgrade of Ghana and Sri Lanka.

2022

2021 (Restated)

Stage 1 & 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Stage 1 & 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Ongoing business portfolio

Corporate, Commercial &

Institut

ional Bank

ing

148

279

427

(67)

(44)

Consumer, Private & Business Banking

150

112

262

253

282

Ventures

–

Central & other items

133

(1)

Credit impa

irment charge

406

432

838

185

263

Restructuring business portfolio

Others

(2)

–

(2)

(7)

(9)

Credit impa

irment charge

(2)

–

(2)

(7)

(9)

Total credit impa

irment charge

404

432

836

178

254

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from 1

January 2022. Prior period has been restated

COVID-19 relief measures

The table below sets out the extent to which payment reliefs are in place across the Group’s CPBB loan portfolio based on the

amount outstanding at 31 December 2022. The accounting for temporary changes to loan contractual term is unchanged from

that presented on page 220 of the 2021 Annual Report.

COVID-19 payment-related relief measures in most markets have now expired. The CPBB loans under payment relief schemes

reduced to $237 mill

ion ($184 m

ill

ion

is from secured products) compared to $1.2 bill

ion at the end of 2021 and a peak of $8.9

bill

ion

in the ﬁrst half of 2020, with the remain

ing balance concentrated

in Asia. This represents 0.2 per cent of CPBB’s gross

loans and advances to customers, mainly in Hong Kong, China and India.

Segment

/Product

Total

Asia

Africa & Middle East

Outstanding

$mill

ion

% of

portfolio

Outstanding

$mill

ion

% of

portfolio

Outstanding

$mill

ion

% of

portfolio

Credit card & Personal loans

0.1%

–

Mortgages & Auto

0.1%

–

Business Banking

133

1.3%

133

1.4%

–

Total Consumer, Private & Business

Banking at 31 December 2022

237

0.2%

237

0.2%

–

Total Consumer, Private & Business

Banking at 31 December 2021

1,182

0.9%

1,029

0.9%

153

3.1%

Outstanding relief balance for Corporate, Commercial and Institut

ional Bank

ing are less than $100 mill

ion (31 December 2021: $1,195 m

ill

ion) and n

il (31 December

2021: nil) for Ventures³

Percentage of portfolio represents the outstanding amount as a percentage of the gross loans and advances to customers by product and segment

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate segment from 1 January 2022

256

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Problem credit management and provis

ion

ing (audited)

Forborne and other modif

ied loans by cl

ient segment

A forborne loan arises when a concession has been made to the contractual terms of a loan in response to a customer’s

ﬁnancial d

iff

icult

ies.

Net forborne loans decreased by $404 mill

ion to $1,125 m

ill

ion (31 December 2021: $1,529 m

ill

ion), of wh

ich $176 mill

ion decrease

was in performing forborne loans and $228 mill

ion decrease was

in non-performing forborne loans. Performing forborne loans

reduction in CCIB was driven by COVID-19 relief measures in 2021 which have expired across most of our markets while non-

performing forborne loans reduction was due to a major repayment.

The table below presents loans with forbearance measures by segment.

Amortised cost

2022

2021

Corporate,

Commercial

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Total

$mill

ion

Corporate,

Commercial

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Total

$mill

ion

All loans with forbearance measures

2,129

377

–

2,506

2,526

406

–

2,932

Credit impa

irment (stage 1 and 2)

(1)

–

(1)

(4)

–

(4)

Credit impa

irment (stage 3)

(1,253)

(127)

–

(1,380)

(1,237)

(162)

–

(1,399)

Net carrying value

875

250

–

1,125

1,285

244

–

1,529

Included with

in the above table

Gross performing forborne loans

–

152

272

–

331

Modif

icat

ion of terms and condit

ions

–

152

257

–

316

Reﬁnancing

–

Impairment provis

ions

(1)

–

(1)

(4)

–

(4)

Modif

icat

ion of terms and condit

ions

(1)

–

(1)

(4)

–

(4)

Reﬁnancing

–

Net performing forborne loans

–

151

268

–

327

Collateral

–

121

Gross non-performing forborne loans

2,040

314

–

2,354

2,253

348

–

2,601

Modif

icat

ion of terms and condit

ions

1,997

314

–

2,311

2,095

348

–

2,443

Reﬁnancing

–

158

–

158

Impairment provis

ions

(1,253)

(127)

–

(1,380)

(1,237)

(162)

–

(1,399)

Modif

icat

ion of terms and condit

ions

(1,210)

(127)

–

(1,337)

(1,106)

(162)

–

(1,268)

Reﬁnancing

(43)

–

(43)

(131)

–

(131)

Net non-performing forborne loans

787

187

–

974

1,016

186

–

1,202

Collateral

243

–

311

236

–

298

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from 1

January 2022

Modif

icat

ion of terms is any contractual change apart from reﬁnanc

ing, as a result of cred

it stress of the counterparty, i.e. interest reductions, loan covenant

waivers

Reﬁnancing

is a new contract to a lender in credit stress, such that they are reﬁnanced and can pay other debt contracts that they were unable to honour

Forborne and other modif

ied loans by reg

ion

Net forborne loans decreased by $404 mill

ion to $1,125 m

ill

ion (31 December 2021: $1,529 m

ill

ion), dr

iven by CCIB mainly due to a

repayment with

in Europe and the Amer

icas.

Amortised cost

2022

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Performing forborne loans

129

151

205

327

Stage 3 forborne loans

568

144

262

974

572

137

493

1,202

Net forborne loans

697

153

275

1,125

777

213

539

1,529

257

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Credit-impa

ired (stage 3) loans and advances by cl

ient

segment (audited)

Gross stage 3 loans for the Group is $7.8 bill

ion (31 December

2021: $8.1 bill

ion). The reduct

ion in loans was primar

ily dr

iven by

the following:

In CCIB, stage 3 loans decreased by $0.4 bill

ion to $6.1 b

ill

ion

(31 December 2021: $6.5 bill

ion) due to $2.4 b

ill

ion outﬂows

in debt sales, write-offs and material upgrades. This was

offset by $2 bill

ion

inﬂows due to downgrades of Ghana

and Sri Lanka Sovereign related clients as well as China

commercial real estate clients.

CPBB stage 3 loans were materially unchanged at $1.5 bill

ion

with $0.1 bill

ion decrease from mortgages and secured wealth

products.

Ventures loans increased to $1 mill

ion (31 December 2021: N

il)

due to downgrades in Mox Bank Hong Kong.

Central and other items includes new inﬂows relating to local

currency default of Sri Lanka.

Stage 3 cover ratio (audited)

The stage 3 cover ratio measures the proportion of stage 3

impa

irment prov

ions to gross stage 3 loans, and

is a metric

commonly used in consider

ing

impa

irment trends. Th

is metric

does not allow for variat

ions

in the composit

ion of stage 3

loans and should be used in conjunct

ion w

ith other Credit Risk

informat

ion prov

ided, includ

ing the level of collateral cover.

The balance of stage 3 loans not covered by stage 3

impa

irment prov

ions represents the adjusted value of

collateral held and the net outcome of any workout or

recovery strategies. Collateral provides risk mit

igat

ion to some

degree in all client segments and supports the credit quality

and cover ratio assessments post impa

irment prov

ions.

Further informat

ion on collateral

is provided in the Credit Risk

mit

igat

ion section.

The CCIB cover ratio increased by 1 per cent to 60 per cent

(31 December 2021: 59 per cent) due to repayments and

write-offs, which was offset by provis

ions taken on Ghana

Sovereign downgrade and China commercial real estate

clients.

The CPBB cover ratio increased by 2 per cent to 53 per cent

(31 December 2021: 51 per cent) due to stage 3 loan balances

reducing across secured wealth and mortgage portfolios.

2022

2021 (Restated)¹

Corporate,

Commercial

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

Others

$mill

ion

Total

$mill

ion

Corporate,

Commercial

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

Others

$mill

ion

Total

$mill

ion

Gross credit-impa

ired

6,143

1,453

248

7,845

6,520

1,575

–

8,095

Credit impa

irment prov

ions

(3,662)

(776)

(1)

(18)

(4,457)

(3,861)

(796)

–

(4,657)

Net credit-impa

ired

2,481

677

–

230

3,388

2,659

779

–

3,438

Cover ratio

60%

53%

100%

57%

59%

51%

–

58%

Collateral ($ mill

ion)

956

543

–

1,499

805

641

–

1,446

Cover ratio (after collateral)

75%

91%

100%

76%

72%

91%

–

75%

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from 1

January 2022. Prior period has been restated.

Credit-impa

ired (stage 3) loans and advances by geograph

ic region

Stage 3 gross loans decreased by $0.3 bill

ion to $7.8 b

ill

ion (31 December 2021: $8.1 b

ill

ion). The decrease was pr

imar

ily dr

iven by

CCIB debt sales and repayments in Africa and the Middle East and in Europe and the Americas regions offset by the sovereign

downgrade of Ghana and Sri Lanka.

Amortised cost

2022

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Gross credit-impa

ired

4,562

2,725

558

7,845

4,448

2,918

729

8,095

Credit impa

irment prov

ions

(2,483)

(1,765)

(209)

(4,457)

(2,401)

(1,970)

(286)

(4,657)

Net credit-impa

ired

2,079

960

349

3,388

2,047

948

443

3,438

Cover ratio

54%

65%

37%

57%

54%

68%

39%

58%

Credit Risk mit

igat

ion

Potential credit losses from any given account, customer or

portfolio are mit

igated us

ing a range of tools such as

collateral, netting arrangements, credit insurance and credit

derivat

ives, tak

ing into account expected volatil

ity and

guarantees.

The reliance that can be placed on these mit

igants

is carefully

assessed in light of issues such as legal certainty and

enforceabil

ity, market valuat

ion correlation and counterparty

risk of the guarantor.

A secured loan is one where the borrower pledges an asset as

collateral of which the Group is able to take possession in the

event that the borrower defaults.

The unadjusted market value of collateral across all asset

types, in respect of CCIB, without adjust

ing for over-

collateralisat

ion, was $345 b

ill

ion (31 December 2021:

$346 bill

ion).

258

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

The collateral values in the table below (which covers loans

and advances to banks and customers, excluding those held

at fair value through proﬁt or loss) are adjusted where

appropriate in accordance with our risk mit

igat

ion policy and

for the effect of over-collateralisat

ion. The extent of

overcollateralizat

ion has been determ

ined with reference to

both the drawn and undrawn components of exposure as this

best reﬂects the effect of collateral and other credit

enhancements on the amounts aris

ing from expected cred

losses. The value of collateral reﬂects management’s best

estimate and is backtested against our prior experience. On

average, across all types of non-cash collateral, the value

ascribed is approximately half of its current market value.

CCIB collateral increased by $9 bill

ion to $38.2 b

ill

ion

(31 December 2021: $29.4 bill

ion) due to an

increase in reverse

repurchase agreements.

CPBB collateral decreased by $10 bill

ion to $92.4 b

ill

ion

(31 December 2021: $102.8 bill

ion) due to a decrease

mortgages and secured wealth product balances.

Stage 2 collateral reduced by $1.1 bill

ion to $5.0 b

ill

ion

(31 December 2021: $6.1 bill

ion) due to a decrease

CCIB loan balances.

Total collateral for Central and other items increased by

$4.8 bill

ion to $11.2 b

ill

ion (31 December 2021: $6.4 b

ill

ion)

due to an increase in lending under reverse repurchase

agreements.

Collateral held on loans and advances

The table below details collateral held against exposures, separately disclos

ing stage 2 and stage 3 exposure and

corresponding collateral.

Amortised cost

2022

Net amount outstanding

Collateral

Net exposure

Total

$mill

ion

Stage 2

ﬁnancial

assets

$mill

ion

Credit-

impa

ired

ﬁnancial

assets (S3)

$mill

ion

Total

$mill

ion

Stage 2

ﬁnancial

assets

$mill

ion

Credit-

impa

ired

ﬁnancial

assets (S3)

$mill

ion

Total

$mill

ion

Stage 2

ﬁnancial

assets

$mill

ion

Credit-

impa

ired

ﬁnancial

assets (S3)

$mill

ion

Corporate, Commercial &

Institut

ional Bank

ing

179,150

11,366

2,526

38,151

3,973

956

140,999

7,393

1,570

Consumer, Private & Business Banking

130,955

1,550

677

92,350

1,019

543

38,605

531

134

Ventures

698

–

698

–

Central & other items

39,363

–

230

11,214

–

28,149

–

230

Total

350,166

12,933

3,433

141,715

4,992

1,499

208,451

7,941

1,934

Amortised cost

2021 (Restated)

Net amount outstanding

Collateral

Net exposure

Total

$mill

ion

Stage 2

ﬁnancial

assets

$mill

ion

Credit-

impa

ired

ﬁnancial

assets (S3)

$mill

ion

Total

$mill

ion

Stage 2

ﬁnancial

assets

$mill

ion

Credit-

impa

ired

ﬁnancial

assets (S3)

$mill

ion

Total

$mill

ion

Stage 2

ﬁnancial

assets

$mill

ion

Credit-

impa

ired

ﬁnancial

assets (S3)

$mill

ion

Corporate, Commercial &

Institut

ional Bank

ing

183,784

15,053

2,702

29,414

5,077

805

154,370

9976

1,897

Consumer, Private & Business Banking

136,430

1,731

779

102,769

1,045

641

33,661

686

138

Ventures

–

Central & other items

22,549

110

–

6,381

–

16,168

110

–

Total

342,851

16,901

3,481

138,564

6,122

1,446

204,287

10,779

2,035

Includes loans and advances to banks

Adjusted for over-collateralisat

ion based on the drawn and undrawn components of exposures

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022.

Prior period has been restated

Collateral – CCIB (audited)

Collateral held against CCIB exposures amounted to

$38 bill

ion.

Collateral taken for longer-term and sub-investment grade

corporate loans improved to 53 per cent (31 December 2021:

49 per cent).

Our underwrit

ing standards encourage tak

ing specif

charges on assets and we consistently seek high-quality,

investment-grade collateral.

79 per cent of tangible collateral excluding reverse repurchase

agreements (31 December 2021: 76 per cent) held comprises

physical assets or is property based, and investment securit

ies.

Overall collateral increased by $8.7 bill

ion to $38 b

ill

ion (31

December 2021: $29 bill

ion) due to an

increase in reverse

repurchase agreements.

Non-tangible collateral, such as guarantees and standby

letters of credit, is also held against corporate exposures,

although the ﬁnancial effect of th

is type of collateral is less

sign

iﬁcant

in terms of recoveries. However, this is considered

when determin

ing the probab

ity of default and other

credit-related factors. Collateral is also held against off-

balance sheet exposures, includ

ing undrawn comm

itments

and trade-related instruments.

259

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Corporate, Commercial & Institut

ional Bank

ing

Amortised cost

2022

$mill

ion

2021

$mill

ion

Maximum exposure

179,150

183,784

Property

10,152

10,589

Plant, machinery and other stock

1,168

1,411

Cash

2,797

3,549

Reverse repos

14,305

2,042

A- to AA+

10,551

122

BBB- to BBB+

1,485

483

Unrated

2,269

1,437

Financ

ial guarantees and

insurance

5,096

6,616

Commodit

ies

198

Ships and aircraft

4,596

5,009

Total value of collateral

38,151

29,414

Net exposure

140,999

154,370

Adjusted for over-collateralisat

ion based on the drawn and undrawn components of exposures

Collateral – CPBB (audited)

In CPBB, $113 bill

ion wh

ich equates to 86 per cent of the portfolio is fully secured (31 December 2021: 86 per cent).

The following table presents an analysis of loans to ind

iduals by product; split between fully secured, partially secured and

unsecured.

Amortised cost

2022

2021 (Restated)

Fully

secured

$mill

ion

Partially

secured

$mill

ion

Unsecured

$mill

ion

Total

$mill

ion

Fully

secured

$mill

ion

Partially

secured

$mill

ion

Unsecured

$mill

ion

Total

$mill

ion

Maximum exposure

112,556

449

17,950

130,955

117,129

1,329

17,972

136,430

Loans to ind

iduals

Mortgages

87,212

–

87,212

89,222

–

89,222

CCPL

221

–

16,711

16,932

150

–

16,943

17,093

Auto

502

–

502

542

–

542

Secured wealth products

19,551

–

19,551

21,495

–

21,495

Other

5,070

449

1,239

6,758

5,720

1,329

1,029

8,078

Total collateral

92,350

102,769

Net exposure

38,605

33,661

Percentage of total loans

86%

14%

86%

13%

Collateral values are adjusted where appropriate in accordance with our risk mit

igat

ion policy and for the effect of over-collateralisat

ion

2 Amounts net of ECL

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022.

Prior period has been restated

260

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Mortgage loan-to-value ratios by geography (audited)

Loan-to-value (LTV) ratios measure the ratio of the current mortgage outstanding to the current fair value of the properties on

which they are secured.

In mortgages, the value of property held as security sign

iﬁcantly exceeds pr

inc

ipal outstand

ing of the mortgage loans. The

average LTV of the overall mortgage portfolio increased to 44.7 per cent (31 December 2021: 41.1 per cent) mainly from Hong

Kong due to a drop in the Property Price Index. Hong Kong, which represents 40 per cent of the mortgage portfolio, has an

average LTV of 52.6 per cent (31 December 2021: 43.8 per cent). All of our other key markets continue to have low portfolio LTVs

(Korea, Singapore and Taiwan at 37.3 per cent, 42.9 per cent and 45.1 per cent respectively).

An analysis of LTV ratios by geography for the mortgage portfolio is presented in the table below.

Amortised cost

2022

Asia

Gross

Africa &

Middle East

Gross

Europe &

Americas

Gross

Total

Gross

Less than 50 per cent

60.9

43.0

32.2

60.1

50 per cent to 59 per cent

15.5

18.2

19.2

15.6

60 per cent to 69 per cent

9.8

16.8

31.3

10.2

70 per cent to 79 per cent

6.5

12.8

14.8

6.7

80 per cent to 89 per cent

3.6

5.1

1.1

3.6

90 per cent to 99 per cent

2.5

2.0

–

2.4

100 per cent and greater

1.4

2.2

1.3

1.4

Average portfolio loan-to-value

44.4

54.3

56.6

44.7

Loans to ind

iduals – mortgages ($mill

ion)

83,954

1,388

1,870

87,212

Amortised cost

2021

Asia

Gross

Africa &

Middle East

Gross

Europe &

Americas

Gross

Total

Gross

Less than 50 per cent

68.2

27.6

16.8

66.4

50 per cent to 59 per cent

11.6

18.6

19.9

11.9

60 per cent to 69 per cent

8.1

19.6

37.5

8.9

70 per cent to 79 per cent

9.1

16.5

17.1

9.4

80 per cent to 89 per cent

2.4

9.1

8.7

2.7

90 per cent to 99 per cent

0.5

4.8

–

0.5

100 per cent and greater

0.1

3.8

–

0.2

Average portfolio loan-to-value

40.5

61.9

60.8

41.1

Loans to ind

iduals – mortgages ($mill

ion)

85,765

1,651

1,806

89,222

Collateral and other credit enhancements possessed or called upon (audited)

The Group obtains assets by taking possession of collateral or calling upon other credit enhancements (such as guarantees).

Repossessed properties are sold in an orderly fashion. Where the proceeds are in excess of the outstanding loan balance the

excess is returned to the borrower.

Certain equity securit

ies acqu

ired may be held by the Group for investment purposes and are classif

ied as fa

ir value through

proﬁt or loss, and the related loan written off. The carrying value of collateral possessed and held by the Group is $14.9 mill

ion

(31 December 2021: $11.8 mill

ion).

2022

$mill

ion

2021

$mill

ion

Property, plant and equipment

9.6

5.8

Guarantees

5.3

6.0

Total

14.9

11.8

261

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Other Credit Risk mit

igat

ion (audited)

Other forms of credit risk mit

igat

ion are set out below.

Credit default swaps

The Group has entered into credit default swaps for portfolio

management purposes, referencing loan assets with a

notional value of $5.1 bill

ion (31 December 2021: $12.1 b

ill

ion).

These credit default swaps are accounted for as ﬁnanc

ial

guarantees as per IFRS 9 as they will only reimburse the holder

for an incurred loss on an underlying debt instrument. The

Group continues to hold the underlying assets referenced in

the credit default swaps and it continues to be exposed to

related Credit Risk and Foreign Exchange Rate Risk on these

assets.

Credit linked notes

The Group has issued credit linked notes for portfolio

management purposes, referencing loan assets with a

notional value of $13.5 bill

ion (31 December 2021: $10.0 b

ill

ion).

The Group continues to hold the underlying assets for which

the credit linked notes provide mit

igat

ion.

Derivat

ive ﬁnancial

instruments

The Group enters into master netting agreements, which in

the event of default result in a single amount owed by or to

the counterparty through netting the sum of the posit

ive and

negative mark-to-market values of applicable derivat

ive

transactions. Credit Risk mit

igat

ion for derivat

ive ﬁnancial

instruments is set out in page 285.

Off-balance sheet exposures

For certain types of exposure, such as letters of credit and

guarantees, the Group obtains collateral such as cash

depending on internal Credit Risk assessments, as well as in

the case of letters of credit holding legal title to the underlying

assets should a default take place.

Other portfolio analysis

This section provides maturity analysis by credit quality by

industry and industry and retail products analysis by region.

Contractual maturity analysis of loans and advances by

client segment

Loans and advances to the CCIB segment remain

predominantly short-term, with $98.3 bill

ion or 68 per cent

(31 December 2021: $95.5 bill

ion or 66 per cent) matur

ing in

less than one year.

Loans and advances to banks decreased by $4.9 bill

ion

to $39.5 bill

ion (31 December 2021: $44.4 b

ill

ion) of wh

ich

96 per cent mature in less than one year (31 December 2021:

98 per cent).

The CPBB short-term book of one year or less is stable at

25 per cent (31 December 2021: 26 per cent) and long term

book over ﬁve years increased to 64 per cent (31 December

2021: 62 per cent) of the total portfolio.

Amortised cost

2022

One year or less

$mill

ion

One to ﬁve years

$mill

ion

Over ﬁve years

$mill

ion

Total

$mill

ion

Corporate, Commercial & Institut

ional Bank

ing

98,335

34,635

10,789

143,759

Consumer, Private & Business Banking

33,365

14,161

84,731

132,257

Ventures

548

162

–

710

Central & other items

39,373

–

39,381

Gross loans and advances to customers

171,621

48,958

95,528

316,107

Impairment provis

ions

(4,767)

(574)

(119)

(5,460)

Net loans and advances to customers

166,854

48,384

95,409

310,647

Net loans and advances to banks

38,105

1,211

203

39,519

Amortised cost

2021 (Restated)¹

One year or less

$mill

ion

One to ﬁve years

$mill

ion

Over ﬁve years

$mill

ion

Total

$mill

ion

Corporate, Commercial & Institut

ional Bank

ing

95,454

36,953

11,299

143,706

Consumer, Private & Business Banking

35,900

16,783

85,093

137,776

Ventures

–

Central & other items

22,318

224

22,549

Gross loans and advances to customers

153,763

53,960

96,399

304,122

Impairment provis

ions

(5,057)

(462)

(135)

(5,654)

Net loans and advances to customers

148,706

53,498

96,264

298,468

Net loans and advances to banks

43,274

955

154

44,383

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from 1

January 2022. Prior period has been restated

262

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Credit quality by industry

Loans and advances

This section provides an analysis of the Group’s amortised cost portfolio by industry on a gross, total credit impa

irment and net

basis.

From an industry perspective, gross loans and advances increased by $12.0 bill

ion to $316 b

ill

ion (31 December 2021: $304 b

ill

ion),

of which $16.8 bill

ion was from Central and other

items segments, offset by $5.5 bill

ion

in CPBB. CCIB was stable at $144 bill

ion

with increase in stage 1 loans offset by a decrease in stage 2 loans.

Stage 1 loans increased by $16.0 bill

ion to $295.2 b

ill

ion (31 December 2021: $279.2 b

ill

ion), due to an

increase in Lending to

Governments notably Hong Kong, Singapore and Korea. In CPBB, loans decreased by $4.5 bill

ion to $129.8 b

ill

ion (31 December

2021: $134.4 bill

ion), ma

inly driven by a decrease in Private Bank exposure (largely from UK, Hong Kong and Singapore in all

classes), and a decrease in exposure of the Resident

ial Mortgage segment

in Korea (due to tightened Debt Service Ratio

following new government guidel

ines).

This is offset by an increase in credit card portfolio of $1 bill

ion. In CCIB, loans were

broadly stable due to $10.5 bill

ion

increase in exposures in Financ

ing,

insurance and non-banking from a few notable clients,

$1.5 bill

ion

increase in Transport, telecom and util

ies from upgrades offset by $2.8 bill

ion decrease

in Manufacturing and $5.3

bill

ion decrease

in Commercial real estate sector from repayments.

Stage 2 loans decreased by $3.8 bill

ion to $13 b

ill

ion (31 December 2021: $16.8 b

ill

ion) largely due to CCIB, $2.6 b

ill

ion reduct

ions in

Transport, telecom and util

ies from upgrades to Stage 1 and repayments, $1.2 bill

ion decrease

in Energy. This was offset by an

increase in Commercial real estate sector from accounts being placed on Early Alert Non Purely Precautionary and higher risk

categories.

Stage 3 loans reduced by $0.3 bill

ion to $7.8 b

ill

ion (31 December 2021: $8.1 b

ill

ion) of wh

ich CCIB and Central and other items are

broadly ﬂat as the effects of the sovereign downgrades of Ghana and Sri Lanka are largely offset by repayments and upgrades.

CPBB stage 3 loans reduced in Secured wealth and Mortgages portfolios.

Amortised cost

2022

Stage 1

Stage 2

Stage 3

Total

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

amount

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

amount

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

amount

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

amount

$mill

ion

Industry:

Energy

10,959

(8)

10,951

818

(7)

811

1,324

(620)

704

13,101

(635)

12,466

Manufacturing

20,990

(23)

20,967

1,089

(27)

1,062

777

(518)

259

22,856

(568)

22,288

Financ

ing,

insurance

and non-banking

34,915

(9)

34,906

774

(3)

771

195

(175)

35,884

(187)

35,697

Transport, telecom

and util

ies

14,273

(22)

14,251

2,347

(36)

2,311

669

(224)

445

17,289

(282)

17,007

Food and household

products

7,841

(21)

7,820

695

(20)

675

418

(259)

159

8,954

(300)

8,654

Commercial real

estate

12,393

(43)

12,350

3,217

(195)

3,022

1,305

(761)

544

16,915

(999)

15,916

Min

ing and quarry

ing

5,482

(4)

5,478

537

(5)

532

248

(174)

6,267

(183)

6,084

Consumer durables

6,403

(4)

6,399

420

(17)

403

358

(307)

7,181

(328)

6,853

Construction

2,424

(2)

2,422

407

(5)

402

495

(410)

3,326

(417)

2,909

Trading companies &

distr

ibutors

2,205

(1)

2,204

170

(2)

168

122

(80)

2,497

(83)

2,414

Government

42,825

(2)

42,823

603

(1)

602

168

(15)

153

43,596

(18)

43,578

Other

4,684

(4)

4,680

278

(5)

273

312

(137)

175

5,274

(146)

5,128

Retail Products:

Mortgage

85,859

(12)

85,847

996

(7)

989

556

(180)

376

87,411

(199)

87,212

Credit Cards

6,912

(103)

6,809

155

(46)

109

(44)

7,126

(193)

6,933

Personal loans and

other unsecured

lending

10,652

(253)

10,399

215

(57)

158

296

(156)

140

11,163

(466)

10,697

Auto

501

–

501

–

502

–

502

Secured wealth

products

19,269

(45)

19,224

235

(10)

225

407

(305)

102

19,911

(360)

19,551

Other

6,632

(3)

6,629

(1)

136

(92)

6,854

(96)

6,758

Net carrying value

(customers)¹

295,219

(559)294,660

13,043

(444)

12,599

7,845

(4,457)

3,388

316,107

(5,460) 310,647

Includes reverse repurchase agreements and other sim

ilar secured lend

ing held at amortised cost of $24,498 mill

ion

263

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Amortised cost

2021

Stage 1

Stage 2

Stage 3

Total

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

amount

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

amount

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

amount

$mill

ion

Gross

balance

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

carrying

amount

$mill

ion

Industry:

Energy

10,454

(19)

10,435

2,067

(76)

1,991

998

(719)

279

13,519

(814)

12,705

Manufacturing

23,792

(9)

23,783

1,181

(30)

1,151

852

(562)

290

25,825

(601)

25,224

Financ

ing,

insurance

and non-banking

24,380

(9)

24,371

1,257

(12)

1,245

268

(207)

25,905

(228)

25,677

Transport, telecom

and util

ies

12,778

(5)

12,773

4,926

(51)

4,875

966

(289)

677

18,670

(345)

18,325

Food and household

products

8,093

(2)

8,091

721

(26)

695

380

(276)

104

9,194

(304)

8,890

Commercial real

estate

17,680

(43)

17,637

1,787

(75)

1,712

833

(335)

498

20,300

(453)

19,847

Min

ing and quarry

ing

4,793

(3)

4,790

480

(20)

460

272

(167)

105

5,545

(190)

5,355

Consumer durables

7,069

(3)

7,066

407

(9)

398

425

(346)

7,901

(358)

7,543

Construction

2,279

(3)

2,276

506

(19)

487

914

(624)

290

3,699

(646)

3,053

Trading companies &

distr

ibutors

1,144

(1)

1,143

117

(8)

109

143

(135)

1,404

(144)

1,260

Government

26,588

(2)

26,586

678

(1)

677

154

(8)

146

27,420

(11)

27,409

Other

5,757

(4)

5,753

801

(14)

787

316

(194)

122

6,874

(212)

6,662

Retail Products:

Mortgage

87,987

(22)

87,965

862

(20)

842

599

(184)

415

89,448

(226)

89,222

Credit Cards

5,899

(90)

5,809

388

(74)

314

(44)

6,348

(208)

6,140

Personal loans and

other unsecured

lending

10,981

(188)

10,793

182

(58)

124

334

(210)

124

11,497

(456)

11,041

Auto

541

(1)

540

–

543

(1)

542

Secured wealth

products

21,067

(61)

21,006

307

(10)

297

483

(291)

192

21,857

(362)

21,495

Other

7,896

(8)

7,888

180

(21)

159

(66)

8,173

(95)

8,078

Net carrying value

(customers)¹

279,178

(473) 278,705

16,849

(524)

16,325

8,095

(4,657)

3,438

304,122

(5,654) 298,468

Includes reverse repurchase agreements and other sim

ilar secured lend

ing held at amortised cost of $7,331 mill

ion.

Prior year has been re-presented to provide product granularity

Industry analysis of loans and advances by geographic region

This section provides an analysis of the Group’s amortised cost loan portfolio, net of provis

ions, by

industry and region.

In the CCIB and Central and other items segment, our largest industry exposures are to Government, Financ

ing,

insurance and

non-banking and Manufacturing with each constitut

ing at least 10 per cent of CCIB and Central and other

items loans and

advances to customers.

Financ

ing,

insurance and non-banking industry clients are mostly investment-grade inst

itut

ions and this lending forms part

of the liqu

ity management of the Group. The Manufacturing sector group is spread across a diverse range of industr

ies,

includ

ing automob

iles and components, capital goods, pharmaceuticals, biotech and life sciences, technology hardware

and equipment, chemicals, paper products and packaging, with lending spread over 3,330 clients.

The Group provides loans to Commercial real estate counterparties of $16.9 bill

ion, wh

ich represents 9 per cent of total customer

loans and advances. In total, $9.1 bill

ion of th

is lending is to counterparties where the source of repayment is substantially

derived from rental or sale of real estate and is secured by real estate collateral. The remain

ing Commerc

ial real estate loans

comprise working capital loans to real estate corporates, loans with non-property collateral, unsecured loans and loans to real

estate entit

ies of d

ivers

iﬁed conglomerates. The average LTV rat

io of the performing book Commercial real estate portfolio has

decreased to 49 per cent, compared with 50 per cent in 2021. The proportion of loans with an LTV greater than 80 per cent has

decreased to 1 per cent, compared with 2 per cent in 2021. The China commercial real estate portfolio is being closely monitored

and is being separately disclosed on page 268.

264

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

The Mortgage portfolio continues to be the largest portion of the CPBB portfolio at $87.4 bill

ion, w

ith Credit Cards at $7.1 bill

ion

and Personal loans portolio at $11.2 bill

ion.

In Asia, the Financ

ing,

insurance and non-banking industry increased by $10.5 bill

ion to $24.7 b

ill

ion (31 December 2021:

$14.2 bill

ion), the Government sector

increased by $16.7 bill

ion to $39.7 b

ill

ion (31 December 2021: $23.0 b

ill

ion) due to

increased

lending to the Hong Kong, Singapore and Korea Sovereign, the Credit Cards portfolio increased by $0.8 bill

ion to $6.6 b

ill

ion

(31 December 2021: $5.8 bill

ion). Th

is was offset by a $3.4 bill

ion decrease

in the Manufacturing Sector, $4.0 bill

ion decrease

Commercial real estate due to repayments in Stage 1 and $3.9 bill

ion decrease

in mortgages and secured wealth products.

Amortised cost

2022

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Industry:

Energy

6,250

2,278

3,938

12,466

6,265

2,721

3,719

12,705

Manufacturing

17,388

1,267

3,633

22,288

20,771

1,751

2,702

25,224

Financ

ing,

insurance and non-banking

24,674

761

10,262

35,697

14,184

905

10,588

25,677

Transport, telecom and util

ies

10,841

3,567

2,599

17,007

11,661

4,218

2,446

18,325

Food and household products

4,160

2,566

1,928

8,654

5,497

2,360

1,033

8,890

Commercial real estate

13,179

598

2,139

15,916

17,150

1,048

1,649

19,847

Min

ing and quarry

ing

3,785

390

1,909

6,084

3,833

572

950

5,355

Consumer durables

5,860

461

532

6,853

6,742

398

403

7,543

Construction

1,775

625

509

2,909

1,839

814

400

3,053

Trading companies and distr

ibutors

2,281

101

2,414

1,047

176

1,260

Government

39,713

3,759

106

43,578

22,987

4,117

305

27,409

Other

3,636

702

790

5,128

4,681

670

1,311

6,662

Retail Products:

Mortgages

83,954

1,388

1,870

87,212

85,765

1,651

1,806

89,222

Credit Cards

6,642

291

–

6,933

5,849

291

–

6,140

Personal loans and other

unsecured lending

9,056

1,541

100

10,697

9,241

1,700

100

11,041

Auto

469

–

502

500

–

542

Secured wealth products

17,876

1,048

627

19,551

19,984

545

966

21,495

Other

6,676

–

6,758

7,265

813

–

8,078

Net loans and advances to customers

258,215

21,458

30,974

310,647

245,261

24,792

28,415

298,468

Net loans and advances to banks

22,058

3,929

13,532

39,519

30,301

5,966

8,116

44,383

Prior year has been re-presented to provide product granularity

Vulnerable and Cyclical Sector tables

Vulnerable and cyclical sectors are those that the Group

considers to be most at risk from current economic stresses,

includ

ing volat

ile energy and commodity prices, and we

continue to monitor exposures to these sectors particularly

carefully.

Total net on-balance sheet exposure to vulnerable and

cyclical sectors decreased by $4.7 bill

ion to $30.9 b

ill

ion (31

December 2021: $35.5 bill

ion) largely due to lower levels of

drawn balances particularly in the Commercial real estate

sector. The total net on and off-balance sheet exposure for

CCIB decreased by $7.8bn to $251.3 bill

ion (31 December 2021:

$259.2 bill

ion).

Stage 2 vulnerable and cyclical sector loans decreased by

$1.8 bill

ion to $5.6 b

ill

ion (31 December 2021: $7.4 b

ill

ion). Th

was primar

ily dr

iven by a decrease in the Aviat

ion sector from

stage upgrades and in Oil and Gas sectors from repayments,

which was partly offset by an increase in Commercial Real

Estate.

Stage 3 vulnerable and cyclical sector loans increased by

$0.4 bill

ion to $4 b

ill

ion (31 December 2021: $3.6 b

ill

ion), ma

inly

from China commercial real estate clients and the Oil and

Gas sector.

Construction sector is included in this section and prior year

tables are re-presented.

265

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Maximum exposure

Amortised Cost

2022

Maximum

on Balance

Sheet

Exposure

(net of credit

impa

irment)

$mill

ion

Collateral

$mill

ion

Net On

Balance

Sheet

Exposure

$mill

ion

Undrawn

Commitments

(net of credit

impa

irment)

$mill

ion

Financ

ial

Guarantees

(net of credit

impa

irment)

$mill

ion

Net Off

Balance

Sheet

Exposure

$mill

ion

Total On &

Off Balance

Sheet Net

Exposure

$mill

ion

Industry:

Aviat

ion¹

3,072

1,597

1,475

1,762

632

2,394

3,869

Commodity Traders

7,571

341

7,230

2,578

6,095

8,673

15,903

Metals & Min

ing

4,754

321

4,433

3,425

852

4,277

8,710

Construction

2,909

552

2,357

2,762

5,969

8,731

11,088

Commercial real estate

15,916

7,205

8,711

6,258

224

6,482

15,193

Hotels & Tourism

1,741

919

822

1,346

138

1,484

2,306

Oil & Gas

6,643

806

5,837

7,630

7,158

14,788

20,625

Total

42,606

11,741

30,865

25,761

21,068

46,829

77,694

Total Corporate, Commercial &

Institut

ional Bank

ing

139,631

35,229

104,402

95,272

51,662

146,934

251,336

Total Group

350,166

141,715

208,451

168,574

60,224

228,798

437,249

Amortised Cost

2021

Maximum

On Balance

Sheet

Exposure(net

of credit

impa

irment)

$mill

ion

Collateral

$mill

ion

Net On

Balance

Sheet

Exposure

$mill

ion

Undrawn

Commitments

(net of credit

impa

irment)

$mill

ion

Financ

ial

Guarantees

(net of credit

impa

irment)

$mill

ion

Net Off

Balance

Sheet

Exposure

$mill

ion

Total On &

Off Balance

Sheet Net

Exposure

$mill

ion

Industry:

Aviat

ion¹

3,458

2,033

1,425

1,914

431

2,345

3,770

Commodity Traders

8,732

262

8,470

2,434

6,832

9,266

17,736

Metals & Min

ing

3,616

450

3,166

3,387

637

4,024

7,190

Construction

3,053

544

2,509

2,374

5,860

8,234

10,743

Commercial real estate

19,847

7,290

12,557

7,192

291

7,483

20,040

Hotels & Tourism

2,390

789

1,601

1,363

121

1,484

3,085

Oil & Gas

6,826

1,029

5,797

8,842

6,013

14,855

20,652

Total

47,922

12,397

35,525

27,506

20,185

47,691

83,216

Total Corporate, Commercial &

Institut

ional Bank

ing

139,401

26,294

113,107

96,406

49,666

146,072

259,179

Total Group

342,851

138,564

204,287

158,421

58,291

216,712

420,999

In addit

ion to the av

iat

ion sector loan exposures, the Group owns $3.2 b

ill

ion (31 December 2021: $3.1 b

ill

ion) of a

ircraft under operating leases. Refer to Operating

lease assets

266

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Loans and advances by stage

Amortised Cost

2022

Stage 1

Stage 2

Stage 3

Total

Gross

Balance

$mill

ion

Total

Credit

Impair-

ment

$mill

ion

Net

Carrying

Amount

$mill

ion

Gross

Balance

$mill

ion

Total

Credit

Impair-

ment

$mill

ion

Net

Carrying

Amount

$mill

ion

Gross

Balance

$mill

ion

Total

Credit

Impair-

ment

$mill

ion

Net

Carrying

Amount

$mill

ion

Gross

Balance

$mill

ion

Total

Credit

Impair-

ment

$mill

ion

Net

Carrying

Amount

$mill

ion

Industry:

Aviat

ion

2,377

(1)

2,376

573

–

573

155

(32)

123

3,105

(33)

3,072

Commodity Traders

7,187

(6)

7,181

138

(2)

136

689

(435)

254

8,014

(443)

7,571

Metals & Min

ing

4,184

(1)

4,183

475

(4)

471

257

(157)

100

4,916

(162)

4,754

Construction

2,424

(2)

2,422

407

(5)

402

497

(412)

3,328

(419)

2,909

Commercial real

estate

12,393

(43)

12,350

3,217

(195)

3,022

1,305

(761)

544

16,915

(999)

15,916

Hotels & Tourism

1,448

(2)

1,446

108

(1)

107

206

(18)

188

1,762

(21)

1,741

Oil & Gas

5,468

(4)

5,464

708

(6)

702

919

(442)

477

7,095

(452)

6,643

Total

35,481

(59)

35,422

5,626

(213)

5,413

4,028

(2,257)

1,771

45,135

(2,529)

42,606

Total Corporate,

Commercial &

Institut

ional Bank

ing

126,261

(143)

126,118

11,355

(323)

11,032

6,143

(3,662)

2,481

143,759

(4,128)

139,631

Total Group

334,368

(568)333,800

13,380

(447)

12,933

7,904

(4,471)

3,433

355,652

(5,486) 350,166

Amortised Cost

2021

Stage 1

Stage 2

Stage 3

Total

Gross

Balance

$mill

ion

Total

Credit

Impair-

ment

$mill

ion

Net

Carrying

Amount

$mill

ion

Gross

Balance

$mill

ion

Total

Credit

Impair-

ment

$mill

ion

Net

Carrying

Amount

$mill

ion

Gross

Balance

$mill

ion

Total

Credit

Impair-

ment

$mill

ion

Net

Carrying

Amount

$mill

ion

Gross

Balance

$mill

ion

Total

Credit

Impair-

ment

$mill

ion

Net

Carrying

Amount

$mill

ion

Industry:

Aviat

ion

1,120

–

1,120

2,174

(11)

2,163

239

(64)

175

3,533

(75)

3,458

Commodity Traders

8,482

(4)

8,478

195

(5)

190

713

(649)

9,390

(658)

8,732

Metals & Min

ing

3,083

(1)

3,082

450

(17)

433

219

(118)

101

3,752

(136)

3,616

Construction

2,279

(3)

2,276

505

(19)

487

916

(626)

290

3,701

(647)

3,053

Commercial real

estate

17,680

(43)

17,637

1,787

(75)

1,712

833

(335)

498

20,300

(453)

19,847

Hotels & Tourism

1,562

(1)

1,561

722

(9)

713

182

(66)

116

2,466

(76)

2,390

Oil & Gas

4,999

(5)

4,994

1,595

(34)

1,561

486

(215)

271

7,080

(254)

6,826

Total

39,205

(57)

39,148

7,428

(170)

7,259

3,588

(2,073)

1,515

50,222

(2,299)

47,922

Total Corporate,

Commercial &

Institut

ional Bank

ing

122,368

(103)

122,265

14,818

(341)

14,477

6,520

(3,861)

2,659

143,706

(4,305)

139,401

Total Group

322,954

(485) 322,469

17,429

(528)

16,901

8,149

(4,668)

3,481

348,532

(5,681) 342,851

Loans and advances by region (net of credit impa

irment)

2022

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Industry:

Aviat

ion¹

1,105

1,259

708

3,072

1,356

1,214

888

3,458

Commodity Traders

3,497

978

3,096

7,571

4,352

660

3,720

8,732

Metals & Min

ing

2,966

347

1,441

4,754

2,736

492

388

3,616

Construction

1,776

624

509

2,909

1,781

644

628

3,053

Commercial real estate

13,180

598

2,138

15,916

17,150

1,048

1,649

19,847

Hotel & Tourism

880

465

396

1,741

1,464

397

529

2,390

Oil & Gas

3,574

1,445

1,624

6,643

2,770

2,248

1,808

6,826

Total

26,978

5,716

9,912

42,606

31,609

6,703

9,610

47,922

In addit

ion to the av

iat

ion sector loan exposures, the Group owns $3.2 b

ill

ion (31 December 2021: $3.1 b

ill

ion) of a

ircraft under operating leases. Refer to Operating

lease assets

267

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Credit quality – loans and advances

Amortised Cost

Credit Grade

2022

Aviat

ion

Gross

$mill

ion

Commodity

Traders

Gross

$mill

ion

Construction

Gross

$mill

ion

Metals &

Min

ing

Gross

$mill

ion

Commercial

real estate

Gross

$mill

ion

Hotel &

Tourism

Gross

$mill

ion

Oil & Gas

Gross

$mill

ion

Total

Gross

$mill

ion

Strong

1,437

4,419

1,164

3,425

8,000

1,047

3,923

23,415

Satisfactory

1,413

2,894

1,634

1,208

7,334

494

2,215

17,192

Higher risk

100

276

500

Credit impa

ired (stage 3)

155

689

497

257

1,305

206

919

4,028

Total Gross Balance

3,105

8,014

3,328

4,916

16,915

1,762

7,095

45,135

Strong

–

(3)

–

(25)

(1)

(30)

Satisfactory

(1)

(4)

(3)

(5)

(129)

(1)

(7)

(150)

Higher risk

–

(1)

(4)

–

(84)

(1)

(2)

(92)

Credit impa

ired (stage 3)

(32)

(435)

(412)

(157)

(761)

(18)

(442)

(2,257)

Total Credit Impairment

(33)

(443)

(419)

(162)

(999)

(21)

(452)

(2,529)

Strong

0.0%

0.1%

0.0%

0.3%

0.1%

0.0%

0.1%

Satisfactory

0.1%

0.2%

0.4%

1.8%

0.2%

0.3%

0.9%

Higher risk

0.0%

8.3%

12.1%

0.0%

30.4%

6.7%

5.3%

18.4%

Credit impa

ired (stage 3)

20.6%

63.1%

82.9%

61.1%

58.3%

8.7%

48.1%

56.0%

Cover Ratio

1.1%

5.5%

12.6%

3.3%

5.9%

1.2%

6.4%

5.6%

Credit Grade

2021

Aviat

ion

Gross

$mill

ion

Commodity

Traders

Gross

$mill

ion

Construction

Gross

$mill

ion

Metals &

Min

ing

Gross

$mill

ion

Commercial

real estate

Gross

$mill

ion

Hotel &

Tourism

Gross

$mill

ion

Oil & Gas

Gross

$mill

ion

Total

Gross

$mill

ion

Strong

896

5,878

1,181

1,730

9,581

731

3,594

23,591

Satisfactory

2,257

2,788

1,506

1,781

9,735

1,353

2,892

22,312

Higher risk

141

123

151

200

108

756

Credit impa

ired (stage 3)

239

713

892

219

833

182

486

3,564

Total Gross Balance

3,533

9,390

3,701

3,752

20,300

2,466

7,080

50,222

Strong

–

(1)

(24)

–

(92)

–

(117)

Satisfactory

(8)

(5)

(3)

(14)

(21)

(4)

(24)

(79)

Higher risk

(3)

(17)

(4)

(5)

(6)

(15)

(53)

Credit impa

ired (stage 3)

(64)

(649)

(603)

(118)

(335)

(66)

(215)

(2,050)

Total Credit Impairment

(75)

(658)

(647)

(136)

(453)

(76)

(254)

(2,299)

Strong

0.0%

2.0%

0.0%

1.0%

0.0%

0.5%

Satisfactory

0.4%

0.2%

0.8%

0.2%

0.3%

0.8%

0.4%

Higher risk

2.1%

27.3%

14.2%

18.2%

3.3%

3.0%

13.9%

7.1%

Credit impa

ired (stage 3)

26.8%

91.0%

67.6%

53.9%

40.2%

36.3%

44.2%

57.5%

Cover Ratio

2.1%

7.0%

17.5%

3.6%

2.2%

3.1%

3.6%

4.6%

268

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

China commercial real estate

With

in CCIB, the Group’s gross loans and advances to customers that are exposed to Ch

ina commercial real estate are

$3.2 bill

ion (31 December 2021: $3.7 b

ill

ion).

The proportion of credit impa

ired exposures

increased to 33 per cent from 12 per cent in 2021 as market condit

ions cont

inued

to deteriorate during the year and provis

ion coverage

increased to 57 per cent from 18 per cent in 2021 reﬂecting increased

provis

ion charges dur

ing the year. The proportion of the loan book rated as Higher Risk also increased compared to 2021 and

the proportion rated as strong reduced from 38 per cent to 15 per cent as the major

ity of non-cred

it impa

ired developer cl

ients

were placed on non-purely precautionary early alert.

The Group continues to hold a judgemental management overlay (see page 276), which increased by $78 mill

ion to $173 m

ill

ion

compared to 2021, reﬂecting the increased uncertainty and deteriorat

ion

in the portfolio. $5 mill

ion (2021: $3 m

ill

ion) of th

overlay is held against off-balance sheet exposures. Total coverage of the non-credit impa

ired portfol

io is 10 per cent or

2 per cent excluding the judgemental overlay.

The Group is further ind

irectly exposed to Ch

ina commercial real estate through its associate investment in China Bohai Bank.

Refer to Note 19 Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates.

2022

China

$mill

ion

Hong Kong

$mill

ion

Rest of Group

$mill

ion

Total

$mill

ion

Loans to customers

953

2,248

3,240

Off balance sheet

167

Total as at 31 December 2022

1,027

2,333

3,407

Loans to customers – By Credit quality

Gross

Strong

256

221

–

477

Satisfactory

459

921

1,419

Higher risk

–

271

–

271

Credit impa

ired (stage 3)

238

835

–

1,073

Total as at 31 December 2022

953

2,248

3,240

Loans to customers – ECL

Strong

–

(19)

–

(19)

Satisfactory

(9)

(110)

–

(119)

Higher risk

–

(83)

–

(83)

Credit impa

ired (stage 3)

(37)

(559)

–

(596)

Total as at 31 December 2022

(46)

(771)

–

(817)

2021

China

$mill

ion

Hong Kong

$mill

ion

Rest of Group

$mill

ion

Total

$mill

ion

Loans to customers

881

2,728

130

3,739

Off balance sheet

286

392

Total as at 31 December 2021

1,167

2,814

150

4,131

Loans to customers – By Credit quality

Gross

Strong

278

1,104

1,428

Satisfactory

592

1,187

1,863

Higher risk

–

Credit impa

ired (stage 3)

437

–

448

Total as at 31 December 2021

881

2,728

130

3,739

Loans to customers – ECL

Strong

–

(60)

(2)

(62)

Satisfactory

(2)

(31)

(1)

(34)

Higher risk

–

Credit impa

ired (stage 3)

(4)

(120)

–

(124)

Total as at 31 December 2021

(6)

(211)

(3)

(220)

269

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Debt securit

ies and other el

ible b

ills (audited)

This section provides further detail on gross debt securit

ies and treasury b

ills.

The standard credit ratings used by the Group are those used by Standard & Poor’s or its equivalent. Debt securit

ies held that

have a short-term rating are reported against the long-term rating of the issuer. For securit

ies that are unrated, the Group

applies an internal credit rating, as described under the credit rating and measurement section on page 302.

Total gross debt securit

ies and other el

ible b

ills increased by $8.9 bill

ion to $171.7 b

ill

ion (31 December 2021: $162.8 b

ill

ion).

Stage 1 gross balance increased by $8.8 bill

ion to $166.1 b

ill

ion (31 December 2021: $157.4 b

ill

ion) of wh

ich $7.3 bill

ion

increase was

unrated. Of the unrated securit

ies, 97 per cent (31 December 2021: 88 per cent) are

internally rated as Strong and 3 per cent

(31 December 2021: 12 per cent) were internally rated as Satisfactory.

Stage 2 gross balance was broadly ﬂat at $5.5 bill

ion (31 December 2021: $5.3 b

ill

ion) wh

ich includes the sovereign downgrade

of Pakistan.

Stage 3 gross balance was at $0.1 bill

ion (31 December 2021: $0.1 b

ill

ion) wh

ich includes the sovereign downgrade of Ghana.

Amortised cost and FVOCI

2022

2021

Gross

$mill

ion

ECL

$mill

ion

Net

$mill

ion

Gross

$mill

ion

ECL

$mill

ion

Net

$mill

ion

Stage 1

166,103

(25)

166,078

157,352

(67)

157,285

AAA

73,933

(10)

73,923

75,920

(23)

75,897

AA- to AA+

42,327

(4)

42,323

40,577

(8)

40,569

A- to A+

29,488

(2)

29,486

23,993

(3)

23,990

BBB- to BBB+

7,387

(1)

7,386

11,071

(27)

11,044

Lower than BBB-

1,047

(2)

1,045

1,123

(1)

1,122

Unrated

11,921

(6)

11,915

4,668

(5)

4,663

Stage 2

5,455

(90)

5,365

5,315

(42)

5,273

AAA

–

641

(7)

634

AA- to AA+

–

592

(3)

589

A- to A+

(1)

BBB- to BBB+

2,605

(16)

2,589

2,869

(10)

2,859

Lower than BBB-

2,485

(71)

2,414

809

(21)

788

Unrated

287

(2)

285

382

–

382

Stage 3

144

(106)

113

(66)

Lower than BBB-

(55)

–

Unrated

(51)

113

(66)

Gross balance¹

171,702

(221)

171,481

162,780

(175)

162,605

Stage 3 gross includes $28 mill

ion (2021: $33 m

ill

ion) or

inated cred

it-impa

ired debt secur

ies w

ith impa

irment of $13 m

ill

ion (2021: N

il)

FVOCI instrument are not presented net of ECL. While the presentation is on a net basis for the table, the total net on-balance sheet amount is $171,640 mill

ion

(31 December 2021: $162,700 mill

ion). Refer to the Analys

is of ﬁnanc

ial

instrument by stage table on page 239

IFRS 9 expected credit loss methodology (audited)

Approach for determin

ing expected cred

it losses

Credit loss terminology

Component

Deﬁnit

ion

Probabil

ity of default (PD)

The probabil

ity that a counterparty w

ill default, over the next 12 months from the reporting

date (stage 1) or over the lifet

ime of the product (stage 2),

incorporating the impact of forward-

looking economic assumptions that have an effect on Credit Risk, such as unemployment rates

and GDP forecasts.

The PD estimates will ﬂuctuate in line with the economic cycle. The lifet

ime (or term structure)

PDs are based on statist

ical models, cal

ibrated using histor

ical data and adjusted to

incorporate

forward-looking economic assumptions.

Loss given default (LGD)

The loss that is expected to arise on default, incorporating the impact of forward-looking

economic assumptions where relevant, which represents the difference between the

contractual cashﬂows due and those that the bank expects to receive.

The Group estimates LGD based on the history of recovery rates and considers the recovery

of any collateral that is integral to the ﬁnanc

ial asset, tak

ing into account forward-looking

economic assumptions where relevant.

Exposure at default (EAD)

The expected balance sheet exposure at the time of default, taking into account expected

changes over the lifet

ime of the exposure. Th

is incorporates the impact of drawdowns of

facil

ies with lim

its, repayments of pr

inc

ipal and

interest, and amortisat

ion.

270

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

To determine the expected credit loss, these components are

multipl

ied together: PD for the reference per

iod (up to 12

months or lifet

ime) x LGD x EAD and d

iscounted to the

balance sheet date using the effective interest rate as the

discount rate.

IFRS 9 expected credit loss models have been developed for

the Corporate, Commercial and Institut

ional Bank

ing CCIB

businesses on a global basis, in line with their respective

portfolios. However, for some of the key countries, country-

specif

ic models have also been developed.

The calibrat

ion of forward-look

ing informat

ion

is assessed at

a country or region level to take into account local

macroeconomic condit

ions.

Retail expected credit loss models are country and product

specif

ic g

iven the local nature of the CPBB business.

For less material retail portfolios, the Group has adopted less

sophist

icated approaches based on h

istor

ical roll rates or loss

rates:

•

For medium-sized retail portfolios, a roll rate model is

applied, which uses a matrix that gives the average loan

migrat

ion rate between del

inquency states from period

to period. A matrix multipl

icat

ion is then performed to

generate the ﬁnal PDs by delinquency bucket over different

time horizons.

•

For smaller retail portfolios, loss rate models are applied.

These use an adjusted gross charge-off rate, developed

using monthly write-off and recoveries over the preceding

12 months and total outstanding balances.

•

While the loss rate models do not incorporate forward-

looking informat

ion, to the extent that there are s

ign

iﬁcant

changes in the macroeconomic forecasts an assessment

will be completed on whether an adjustment to the

modelled output is required.

For a lim

ited number of exposures, proxy parameters or

approaches are used where the data is not available to

calculate the orig

inat

ion PDs for the purpose of applying the

SICR criter

ia; or for some reta

il portfolios where a full history

of LGD data is not available, estimates based on the loss

experience from sim

ilar portfol

ios are used. The use of proxies

is monitored and will reduce over time.

The following processes are in place to assess the ongoing

performance of the models:

•

Quarterly model monitor

ing that uses recent data to

compare the differences between model predict

ions and

actual outcomes against approved thresholds.

•

Annual independent validat

ions of the performance of

material models by Group Model Valuation (GMV); an

abridged validat

ion

is completed for non-material models.

Applicat

ion of l

ifet

ime

Expected credit loss is estimated based on the period over

which the Group is exposed to Credit Risk. For the major

ity of

exposures this equates to the maximum contractual period.

For retail credit cards and corporate overdraft facil

ies

however, the Group does not typically enforce the contractual

period, which can be as short as one day. As a result, the

period over which the Group is exposed to Credit Risk for these

instruments reﬂects their behavioural life, which incorporates

expectations of customer behaviour and the extent to which

Credit Risk management actions curtail the period of that

exposure. The average behavioural life for retail credit cards is

between 3 and 6 years across our footprint markets.

In 2022, the behavioural life for corporate overdraft facil

ies

was re-estimated using recent data, and it was conﬁrmed

that the exist

ing l

ifet

ime of 24 months rema

ins appropriate.

Composit

ion of cred

it impa

irment prov

ions (aud

ited)

The table below summarises the key components of the

Group’s credit impa

irment prov

ion balances at 31 December

2022 and 31 December 2021.

Total ECL provis

ions before management judgements

includes model performance post model adjustments and

the impact of multiple economic scenarios. Total modelled

ECL provis

ions, wh

ich also includes judgemental post model

adjustments and management overlays, were 26 per cent

(31 December 2021: 23 per cent) of total credit impa

irment

provis

ions at 31 December 2022. 17 per cent of the modelled

ECL provis

ions at 31 December 2022 related to judgemental

adjustments compared with 25 per cent at 31 December 2021.

31 December 2022

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

$mill

ion

Total

$mill

ion

Modelled ECL provis

ions (base forecast)

505

556

194

1,267

Modelled Impact of multiple economic scenarios

–

Total ECL provis

ions before management judgements

543

562

200

1,317

Judgemental post model adjustments

– Model Calibrat

ion

–

– Multiple Economic Scenarios

–

Management overlays

– COVID-19 and other

–

– China commercial real estate

173

–

173

– Sri Lanka

–

Total modelled provis

ions

725

643

200

1,580

Of which: Stage 1

194

413

651

Stage 2

411

118

100

630

Stage 3

120

112

299

Stage 3 non-modelled provis

ions

3,702

664

–

129

4,495

Total credit impa

irment prov

ions

4,427

1,307

329

6,075

271

Standard Chartered

– Annual Report 2022

Risk review and Capital review

31 December 2021

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

3,4

$mill

ion

Total

$mill

ion

Modelled ECL provis

ions (base forecast)

365

529

103

1,000

Impact of multiple economic scenarios

–

Total ECL provis

ions before management judgements

397

543

112

1,055

Judgemental post model adjustments

–

– Model calibrat

ion

–

– Multiple economic scenarios

–

Management Overlays

– COVID-19

102

147

–

249

– China commercial real estate

–

Total modelled provis

ions

594

697

112

1,406

Of which: Stage 1

163

377

609

Stage 2

425

185

656

Stage 3

135

–

141

Stage 3 non-modelled provis

ions

4,073

662

–

4,803

Total credit impa

irment prov

ions

4,667

1,359

180

6,209

Includes a post model adjustment (PMA) of $17 mill

ion (2021: $51 m

ill

ion)

$55 mill

ion (2021: $115 m

ill

ion)

is in stage 1, $148 mill

ion (2021: $208 m

ill

ion)

in stage 2 and $16 mill

ion (2021: $21 m

ill

ion)

in stage 3

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from 1

January 2022. Prior period has been restated

Includes ECL on cash and balances at central banks, accrued income, assets held for sale and other assets

Post model adjustments

As part of normal model monitor

ing and val

idat

ion

operational processes, where a model’s performance

breaches the monitor

ing thresholds or val

idat

ion standards,

an assessment is completed to determine whether an ECL

PMA is required to correct for the ident

iﬁed model

issue. PMAs

will be removed when the models are updated to correct for

the ident

iﬁed model

issue or the estimates return to being

with

in the mon

itor

ing thresholds.

As at 31 December 2022, PMAs have been applied for 9

models out of the total of 172 models. In aggregate, the PMAs

reduce the Group’s impa

irment prov

ions by $60 m

ill

ion (0.5

per cent of modelled provis

ions) compared w

ith a $17 mill

ion

increase at 31 December 2021, and primar

ily relate to a $17

mill

ion decrease for mult

iple economic scenarios in CCIB and a

$24 mill

ion decrease

in ECL for Malaysian CPBB Business

Clients.

On top of these PMAs, a separate judgemental management

adjustment that covers risk not captured by the models has

also been applied. These adjustments are summarised below.

2022

$mill

ion

2021

$mill

ion

Model performance PMAs

Corporate, Commercial & Institut

ional Bank

ing

(22)

Consumer, Private & Business Banking

(38)

(15)

Central & other items

–

Total model performance PMAs

(60)

Key assumptions and judgements in determin

ing expected

credit loss

Incorporation of forward-looking informat

ion

The evolving economic environment is a key determinant of

the abil

ity of a bank’s cl

ients to meet their obligat

ions as they

fall due. It is a fundamental princ

iple of IFRS 9 that the

provis

ions banks hold aga

inst potential future Credit Risk

losses should depend, not just on the health of the economy

today, but should also take into account potential changes to

the economic environment. For example, if a bank were to

antic

ipate a sharp slowdown

in the world economy over the

coming year, it should hold more provis

ions today to absorb

the credit losses likely to occur in the near future.

To capture the effect of changes to the economic

environment, the PDs and LGDs used to calculate ECL

incorporate forward-looking informat

ion

in the form of

forecasts of the values of economic variables and asset prices

that are likely to have an effect on the repayment abil

ity of

the Group’s clients.

The ‘base forecast’ of the economic variables and asset prices

is based on management’s view of the ﬁve-year outlook,

supported by projections from the Group’s

in-house research

team and outputs from a third-party model that project

specif

ic econom

ic variables and asset prices. The research

team takes consensus views into considerat

ion, and sen

ior

management review project

ions for some core country

variables against consensus when forming their view of the

outlook. For the period beyond ﬁve years, management

util

ises the

in-house research view and third-party model

outputs, which allow for a reversion to long-term growth rates

or norms. All projections are updated on a quarterly bas

is.

272

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Forecast of key macroeconomic variables underlying the

expected credit loss calculation and the impact on non-

linear

ity

In the Base Forecast – management’s view of the most likely

outcome –the pace of growth of the world economy is

expected to slow in the near term as central banks keep

monetary policy restrict

ive. Global GDP

is forecast to grow by

less than 3 per cent in 2023. World GDP growth averaged

3.7 per cent for the 10 years prior to COVID-19 (between 2010

and 2019). The multitude of headwinds that have faced most

economies in 2022 are likely to persist in the months ahead.

However, a recovery in growth is expected to take hold in

H2 2023.

The balance of risks to the 2023 outlook is to the downside.

They include the impact from higher inﬂat

ion and

interest

rates, ongoing geopolit

ical tens

ions, renewed lockdowns/

restrict

ions to movement from the spread of COVID-19 and

severe corrections in property sectors in key countries.

While the quarterly Base Forecasts inform the Group’s

strategic plan, one key requirement of IFRS 9 is that the

assessment of provis

ions should cons

ider multiple future

economic environments. For example, the global economy

may grow more quickly or more slowly than the Base Forecast,

and these variat

ions would have d

ifferent impl

icat

ions for the

provis

ions that the Group should hold today. As the negat

ive

impact of an economic downturn on credit losses tends to be

greater than the posit

ive

impact of an economic upturn, if the

Group sets provis

ions only on the ECL under the Base Forecast

it might mainta

in a level of prov

ions that does not

appropriately capture the range of potential outcomes. To

address this property of skewness (or non-linear

ity), IFRS 9

requires reported ECL to be a probabil

ity-we

ighted ECL,

calculated over a range of possible outcomes.

To assess the range of possible outcomes the Group simulates

a set of 50 scenarios around the Base Forecast, calculates the

ECL under each of them and assigns an equal weight of 2 per

cent to each scenario outcome. These scenarios are

generated by a Monte Carlo simulat

ion, wh

ich addresses the

challenges of crafting many realist

ic alternat

ive scenarios in

the many countries in which the Group operates by means of

a model, which produces these alternative scenarios while

consider

ing the degree of h

istor

ical uncerta

inty (or volatil

ity)

observed from Q1 1990 to Q3 2022 around economic

outcomes and how these outcomes have tended to move in

relation to one another (or correlation). This naturally means

that each of the 50 scenarios do not have a specif

ic narrat

ive,

although collectively they explore a range of hypothetical

alternative outcomes for the global economy, includ

ing

scenarios that turn out better than expected and scenarios

that amplify antic

ipated stresses.

The GDP graphs below illustrate the shape of the Base

Forecast for key footprint markets in relation to prior periods’

actuals. The long-term growth rates are based on the pace of

economic expansion expected for 2030. The tables below

provide a summary of the Group’s Base Forecast for these

markets. The peak/trough amounts show the highest and

lowest points with

in the Base Forecast.

China’s growth is expected to accelerate to 5.8 per cent in

2023 from less than 3.5 per cent in 2022. Consumption should

start to recover as the country gradually eases its zero-COVID

stance and starts to reopen. Recently announced policy

support measures for the real estate sector are also expected

to lift the outlook for the broader economy in H2 2023. Like

China, Hong Kong‘s GDP growth, is expected to improve to

around 2.5 per cent in 2023 from a contraction of 3 per cent in

2022 on the gradual relaxation of travel curbs and social-

distanc

ing measures and the much-

improved labour market.

However, the upside will be lim

ited on the expected weakness

in the external sector. Major economies such as the US and

Europe are forecast to slow sharply on account of monetary

policy tighten

ing and h

igh inﬂat

ion. Slow

ing external demand

will also be a key factor in Singapore’s GDP growth easing to

2.8 per cent in 2023 from around 3.5 per cent in 2022 and

Korea’s growth easing to around 2 per cent from 2.7 per cent.

Growth in India is also forecast to slow with GDP expected to

grow by 5.5 per cent in FY24 (ending March 2024) from 7 per

cent in FY23. Fading pent-up demand (especially in the

services sector), ris

ing

interest rates, lim

ited real wage h

ikes

and like other countries in the region easing global demand

will weigh on activ

ity.

The slowdown in world GDP growth in the near term will

translate to a softening in the growth of demand for

commodit

ies

in 2023. Brent Crude oil prices are expected to

average around $91 in 2023 compared to around $100 in 2022.

15Q1 16Q1

18Q1

17Q1

19Q1

20Q1

21Q1 22 Q1 23Q1

25Q1

27Q1

26Q1

24Q1

-8

-4

China GDP

YoY%

Actual

Long-term growth

Forecast

-10

-8

-6

-4

-2

Hong Kong GDP

YoY%

Actual

Long-term growth

Forecast

15Q1 16Q1

18Q1

17Q1

19Q1 20Q1 21Q1 22 Q1 23Q1

25Q1

27Q1

26Q1

24Q1

15Q1 16Q1

18Q1

17Q1

19Q1

20Q1

21Q1 22 Q1 23Q1

25Q1

27Q1

26Q1

24Q1

-4

-3

-2

-1

Korea GDP

YoY%

Actual

Forecast

Long-term growth

15Q1 16Q1

18Q1

17Q1

19Q1

20Q1

21Q1 22 Q1 23Q1

25Q1

27Q1

26Q1

24Q1

-15

-10

-5

Singapore GDP

YoY%

Actual

Forecast

Long-term growth

15Q1 16Q1

18Q1

17Q1

19Q1

20Q1

21Q1 22 Q1 23Q1

25Q1

27Q1

26Q1

24Q1

-30

-20

-10

India GDP

YoY%

Actual

Forecast

Long-term growth

Long-term growth = GDP growth expected for 2030

273

Standard Chartered

– Annual Report 2022

Risk review and Capital review

2022

China

Hong Kong

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY %)

GDP growth

(YoY %)

Unemployment

3-month

interest rates

House prices

(YoY %)

Base forecast

2023

5.8

4.0

1.4

0.6

2.4

3.0

3.6

(4.4)

2024

5.4

3.9

1.9

3.3

2.5

2.9

3.1

3.9

2025

5.2

3.8

2.4

4.9

2.2

2.9

2.5

3.7

2026

4.8

3.8

2.7

4.5

2.3

2.9

2.4

2.8

2027

4.5

3.8

3.0

4.4

2.1

2.9

2.4

2.7

5-year average

5.1

3.9

2.3

3.6

2.3

3.0

2.8

1.7

Peak

7.9

4.1

3.0

5.0

4.3

3.1

3.6

4.9

Trough

4.5

3.8

1.4

0.0

0.5

2.9

2.4

(8.4)

Monte Carlo

Low

1.1

3.4

0.6

(3.4)

(3.8)

1.7

0.5

(22.0)

High

9.6

4.3

4.4

10.0

8.0

4.2

6.1

26.8

2022

Singapore

Korea

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY%)

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY %)

Base forecast

2.8

3.2

4.5

1.0

2.1

3.2

3.9

0.0

2023

2.5

3.0

3.3

1.6

2.5

3.2

3.3

2.2

2024

2.6

3.0

2.5

3.9

2.3

3.1

2.9

2.8

2025

2.9

3.0

2.4

3.5

2.0

3.1

2.7

2.8

2026

2.8

3.0

2.4

3.9

1.8

3.0

2.7

2.8

2027

2.7

3.0

3.1

2.8

2.2

3.1

2.1

5-year average

3.7

3.2

4.7

2.5

3.3

3.9

2.8

Peak

1.7

3.0

2.4

(2.4)

1.8

3.0

2.7

(0.4)

Trough

2.8

3.2

4.5

1.0

2.1

3.2

3.9

0.0

Monte Carlo

Low

(3.4)

2.1

0.8

(15.9)

(2.8)

1.1

(5.4)

High

8.6

4.5

5.6

20.4

7.0

4.9

5.9

10.0

2022

India

Brent Crude

$ pb

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY%)

Base forecast

2023

5.5

6.0

2.9

91.0

2024

6.0

5.4

5.6

97.5

2025

6.5

5.5

7.1

109.3

2026

7.4

5.5

7.1

116.9

2027

7.5

5.3

7.0

118.3

5-year average

6.4

5.6

5.7

106.6

Peak

7.7

6.3

7.2

118.8

Trough

3.2

5.3

1.6

88.0

Monte Carlo

Low

1.5

1.9

(1.1)

42.4

High

12.1

9.5

13.0

204.2

274

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

2021

China

Hong Kong

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY%)

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY%)

5-year average

5.4

3.4

2.8

4.0

2.6

3.8

1.5

3.1

Peak

6.1

3.4

3.1

4.5

3.5

4.4

2.3

5.3

Trough

4.7

3.4

2.1

1.8

3.7

0.3

2.7

Monte Carlo

Low

2.6

3.3

1.3

(2.8)

(1.7)

2.4

(0.3)

(12.4)

High

8.3

3.5

4.6

11.1

6.9

5.8

5.0

22.8

2021

Singapore

Korea

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY%)

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY%)

5-year average

2.5

3.1

1.4

3.6

2.5

3.3

1.6

2.7

Peak

4.8

3.4

2.2

4.2

2.8

3.7

2.2

10.9

Trough

1.8

3.0

0.5

3.3

2.4

3.1

1.2

(0.3)

Monte Carlo

Low

(4.0)

2.1

0.1

(4.1)

(3.1)

2.7

0.5

(5.2)

High

9.4

4.5

4.2

15.4

7.1

4.5

4.3

9.5

2021

India

Brent crude

$ pb

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY%)

5-year average

6.4

N/A

5.4

7.1

63.7

Peak

16.6

N/A

6.2

7.2

73.5

Trough

4.2

N/A

4.0

5.8

60.0

Monte Carlo

Low

2.0

N/A

3.2

(1.9)

8.9

High

10.5

N/A

8.8

24.9

211.4

Annual numbers are for calendar year except for India where it covers ﬁscal year ending Q1 of each year. For example, 2022 is Q2 2022 to Q1 2023

5-year averages reported for 31.12.22 cover Q1 2023 to Q4 2027

Represents the 10th percentile in the range of economic scenarios used to determine non-linear

ity

Represents the 90th percentile in the range of economic scenarios used to determine non-linear

ity

275

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Impact of multiple economic scenarios

The ﬁnal probabil

ity-we

ighted ECL reported by the Group is a simple average of the ECL for each of the 50 scenarios simulated

using a Monte Carlo model. The Monte Carlo approach has the advantage that it generates many plausible alternative

scenarios that cover our global footprint. The Monte Carlo model was redeveloped over 2022 to increase the range of scenarios

that the model forecasts.

The redeveloped Monte Carlo model was implemented in Q4 2022 and forecasted a wider range of scenarios. The total

amount of non-linear

ity calculated as the d

ifference between the probabil

ity-we

ighted ECL calculated by the Monte Carlo

model and the unweighted base forecast ECL is $50 mill

ion (31 December 2021: $4 m

ill

ion). The CCIB and Central and other

items portfolios accounted for $44 mill

ion of the calculated non-l

inear

ity w

ith the remain

ing $6 m

ill

ion attr

ibutable to CPBB

portfolios. As the non-linear

ity calculated for the CPBB portfol

ios remained relatively low a judgemental PMA of $34 mill

ion has

been applied.

The impact of multiple economic scenarios (which includes the post model adjustment for multiple economic scenarios) on

stage 1, stage 2 and stage 3 modelled ECL is set out in the table below together with the management overlay.

Base forecast

$mill

ion

Multiple

economic

scenarios

$mill

ion

Management

overlays and

other

judgemental

adjustments

$mill

ion

Total

modelled

ECL

$mill

ion

Total expected credit loss at 31 December 2022

1,267

229

1,580

Total expected credit loss at 31 December 2021

1,000

351

1,406

Includes judgemental post model adjustment of $34 mill

ion (31 December 2021: $n

il) relating to Consumer, Private and Business Banking. 2021 includes model

performance post model adjustments of $51 mill

ion

Total modelled ECL comprises stage 1 and stage 2 balances of $1,281 mill

ion (31 December 2021: $1,265 m

ill

ion) and $299 m

ill

ion (31 December 2021: $141 m

ill

ion) of

modelled ECL on stage 3 loans

The average expected credit loss under multiple scenarios is 7 per cent higher than the expected credit loss calculated using

only the most likely scenario (the Base Forecast). Portfolios that are more sensit

ive to non-l

inear

ity

include those with greater

leverage and/or a longer tenor, such as Project and Shipp

ing F

inance portfolios. Other portfolios display min

imal non-l

inear

ity

owing to lim

ited respons

iveness to macroeconomic impacts for structural reasons such as sign

iﬁcant collateral

isat

ion as w

ith

the CPBB mortgage portfolios.

Judgemental adjustments

As at 31 December 2022, the Group held judgemental adjustments for ECL as set out in the table below. All of the judgemental

adjustments have been determined after taking account of the model performance PMAs reported and they are reassessed

quarterly. They are reviewed and approved by the IFRS 9 Impairment Committee.

31 December 2022

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer, Private & Business Banking

Mortgages

$mill

ion

Credit Cards

$mill

ion

Other

$mill

ion

Total

$mill

ion

Judgemental post model adjustments

–

Judgemental management overlays:

– COVID-19 and other overlays

–

– China CRE

173

–

– Sri Lanka

–

Total judgemental adjustments

182

Judgemental adjustments by stage:

– Stage 1

– Stage 2

138

– Stage 3

31 December 2021

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer, Private & Business Banking

Mortgages

$mill

ion

Credit Cards

$mill

ion

Other

$mill

ion

Total

$mill

ion

Judgemental post model adjustments

–

Judgemental management overlays:

– COVID-19

102

147

– China CRE

–

– Sri Lanka

–

Total judgemental adjustments

197

103

154

Judgemental adjustments by stage:

– Stage 1

–

– Stage 2

166

– Stage 3

–

276

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Post model adjustments

As at 31 December 2022, judgemental post model

adjustments to increase ECL by $44 mill

ion (31 December 2021:

$7 mill

ion) have been appl

ied to certain CPBB models.

$34 mill

ion (31 December 2021: $n

il) of this relates to multiple

economic scenarios. The remainder is primar

ily to hold back

releases of ECL ident

iﬁed from model mon

itor

ing breaches

because moratoria and other support schemes have

suppressed observed defaults. These will be released when

the observed defaults normalise.

Management overlays

CCIB

COVID-19

The COVID-19 overlay of $102 mill

ion at 31 December 2021 has

been fully released in 2022 and no overlay is held at

31 December 2022.

China commercial real estate

Chinese property developers continue to experience liqu

ity

issues, triggered by government policy changes aimed at

deleveraging the property sector and ensuring property

developers have the ﬁnancial ab

ity to complete res

ident

ial

properties under construction. The government’s ‘three red

lines’ matrix was introduced in August 2020 to tighten the

funding condit

ions for property developers by l

ing the

growth rate in external debt. With addit

ional controls on sales

of properties to end buyers (e.g. mortgage lending control,

pric

ing control, el

ity control) and on restr

ict

ing

developers’ abil

ity to access cash from ‘escrow accounts’ w

ith

cash paid by retail resident

ial buyers, the cashﬂow of

developers has been sign

iﬁcantly squeezed. Also, w

ith capital

markets reacting negatively to the tighten

ing pol

ies, we

have seen greater volatil

ity

in bond pric

ing and reduced

access to capital markets liqu

ity for developers. As such,

some developers have faced/are facing diff

icult

ies in servic

ing

and repaying ﬁnanc

ing obl

igat

ions.

The Group’s loans and advances to China commercial real

estate clients was $3.2 bill

ion at 31 December 2022

(31 December 2021: $3.7 bill

ion). Cl

ient level analysis continues

to be done, with the high-risk clients being placed on purely

precautionary or non-purely precautionary early alert. Given

the evolving nature of the risks in the China commercial real

estate sector, a management overlay of $173 mill

ion

(31 December 2021: $95 mill

ion) has been taken by est

imat

ing

the impact of further deteriorat

ion to those cl

ients placed on

early alert.

Sri Lanka

Due to the ongoing economic uncertainty following the Sri

Lanka Sovereign default in the ﬁrst half of 2022, a

judgemental overlay of $9 mill

ion (31 December 2021: $n

il) is

held against modelled stage 3 exposures in Sri Lanka that

have not yet been ind

idually assessed for impa

irment.

CPBB

While industry wide government COVID-19 relief measures

have ended for most markets, there are a few markets where

either the schemes have recently ended or lim

ited rel

iefs are

still available. At 31 December $21 mill

ion (31 December 2021:

$147 mill

ion) was held for res

idual COVID-19 related risks in

these portfolios.

Overlays of $16 mill

ion (31 December 2021: $n

il) have also been

applied to capture operating environment challenges, in part

caused by ris

ing

interest rates in certain markets, and the

impact of sovereign defaults in the last quarter of 2022, both

of which are not fully captured in the modelled outcomes.

Stage 3 assets

Credit-impa

ired assets managed by Stressed Asset R

isk

incorporate forward-looking economic assumptions in respect

of the recovery outcomes ident

iﬁed, and are ass

igned

ind

idual probabil

ity we

ight

ings. These assumpt

ions are not

based on a Monte Carlo simulat

ion but are

informed by the

Base Forecast.

Sensit

ity of expected credit loss calculation to

macroeconomic variables

The ECL calculation relies on multiple variables and is

inherently non-linear and portfolio-dependent, which impl

ies

that no single analysis can fully demonstrate the sensit

ity of

the ECL to changes in the macroeconomic variables. The

Group has conducted a series of analyses with the aim of

ident

ify

ing the macroeconomic variables which might have

the greatest impact on the overall ECL. These encompassed

single variable and multi-variable exercises, using simple up/

down variat

ion and extracts from actual calculat

ion data, as

well as bespoke scenario design assessments.

The primary conclusion of these exercises is that no ind

idual

macroeconomic variable is materially inﬂuent

ial. The Group

believes this is plausible as the number of variables used in the

ECL calculation is large. This does not mean that

macroeconomic variables are uninﬂuent

ial; rather, that the

Group believes that considerat

ion of macroeconom

ics should

involve whole scenarios, as this aligns with the multi-variable

nature of the calculation.

The Group faces downside risks in the operating environment

related to the uncertaint

ies surround

ing the macroeconomic

outlook. To explore this, a sensit

ity analysis of ECL was

undertaken to explore the effect of slower economic

recoveries across the Group’s footprint markets. Two downside

scenarios were considered. The ﬁrst scenario is based on the

Bank of England’s 2022 regulatory Annual Cyclical Scenario

(ACS 2022) and is a deep synchronised global downturn

characterised by sign

iﬁcantly h

igher commodity prices

relative to base, inﬂat

ion and

interest rates. In the second

more modest downside scenario, inﬂat

ion

in advanced

economies surprises to the upside in the very near term as the

supply-chain cris

intens

iﬁes and th

is prompts addit

ional

monetary tighten

ing. F

inanc

ial markets weaken w

ith bond

yields spik

ing and equ

ies fall

ing sharply. The deteriorat

ion

sentiment also leads to adjustments in property markets.

Advanced economies are shocked more than emerging

markets in the second scenario.

277

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Baseline

ACS 2022

Advanced Economic Downturn

Five year average

Peak/Trough

Five year average

Peak/Trough

Five year average

Peak/Trough

China GDP

5.1

7.9/4.5

3.1

4.7/(2.6)

4.9

7.2/3.7

China unemployment

3.9

4.1/3.8

5.2

5.6/4.6

4.1

4.3/3.8

China property prices

3.6

5.0/0.0

(6.5)

9.2/(22.1)

3.3

6.9/(1.8)

Hong Kong GDP

2.3

4.3/0.5

(0.7)

2.9/(9.7)

2.1

3.4/(0.1)

Hong Kong unemployment

3.0

3.1/2.9

5.8

7.0/2.7

3.1

3.2/3.0

Hong Kong property prices

1.7

4.9/(8.4)

(10.6)

6.2/(24.8)

1.4

5.1/(9.5)

US GDP

1.7

3.1/(0.4)

0.1

2.4/(5.9)

1.6

3.9/(2.6)

Singapore GDP

2.7

3.7/1.7

1.1

4.6/(7.0)

2.6

3.1/1.4

India GDP

6.4

7.7/3.2

4.3

6.6/(0.2)

6.3

7.7/3.2

Crude oil

106.6

118.8/88.0

140.3

148.4/118.8

90.2

104.9/77.3

Period covered from Q1 2023 to Q4 2027

Base (GDP, YoY%)

ACS 2022 (GDP, YoY%)

Difference from Base

2023

2024

2025

2026

2027

2023

2024

2025

2026

2027

2023

2024

2025

2026

2027

China

5.8

5.4

5.2

4.8

4.5

0.1

2.2

4.6

4.2

(5.7)

(3.2)

(0.6)

(0.4)

Hong Kong

2.4

2.5

2.2

2.3

2.1

(5.7)

(3.5)

2.5

1.7

1.4

(8.1)

(6.0)

0.3

(0.6)

(0.7)

(0.2)

1.8

2.6

2.1

(3.3)

(1.2)

1.7

1.5

(3.1)

(3.0)

(0.8)

(0.6)

Singapore

2.8

2.5

2.6

2.9

2.8

(3.7)

(0.6)

3.6

3.0

2.9

(6.5)

(3.1)

0.9

0.1

India

4.9

5.9

6.3

7.2

7.6

1.7

2.7

4.7

6.0

6.4

(3.1)

(3.3)

(1.6)

(1.1)

(1.2)

Each year is from Q1 to Q4. For example 2023 is from Q1 2023 to Q4 2023.

Base (GDP, YoY%)

Advanced Economic Downturn (GDP,

YoY%)

Difference from Base

2023

2024

2025

2026

2027

2023

2024

2025

2026

2027

2023

2024

2025

2026

2027

China

5.8

5.4

5.2

4.8

4.5

5.0

5.2

4.8

4.5

(0.8)

(0.4)

0.1

0.0

Hong Kong

2.4

2.5

2.2

2.3

2.1

1.6

2.0

2.4

2.3

2.1

(0.8)

(0.5)

0.1

0.0

(0.2)

1.8

2.6

2.1

(1.6)

1.5

3.1

2.4

2.7

(1.5)

(0.3)

0.6

0.3

0.6

Singapore

2.8

2.5

2.6

2.9

2.8

1.9

2.3

2.8

3.0

(0.9)

(0.2)

0.2

0.1

0.2

India

4.9

5.9

6.3

7.2

7.6

4.8

5.5

6.2

7.2

7.6

(0.1)

(0.4)

(0.1)

0.0

Each year is from Q1 to Q4. For example 2023 is from Q1 2023 to Q4 2023

The total modelled stage 1 and 2 ECL provis

ions (

includ

ing

both on and off-balance sheet instruments) would be

approximately $32 mill

ion h

igher under the Advanced

Economy Downturn scenario, and $459 mill

ion h

igher under

the ACS 2022 scenario than the baseline ECL provis

ions (wh

ich

excluded the impact of multiple economic scenarios and

management overlays which may already capture some of

the risks in these scenarios). The proportion of stage 2 assets

would increase from 3.1 per cent in the base case to 3.3 per

cent and 8.1 per cent respectively under the Advanded

Economy Downturn and ACS 2022 scenarios. This includes the

impact of exposures transferring to stage 2 from stage 1 but

does not consider an increase in stage 3 defaults.

Under both scenarios the major

ity of the

increase in CCIB

came from the main corporate and project ﬁnance portfolios

in the UAE and Hong Kong being impacted. For the CPBB

portfolios most of the increases came from the unsecured

retail portfolios with the Taiwan Personal Loans and

Singapore Credit Cards portfolios impacted.

There was no material change in modelled stage 3 provis

ions

as these primar

ily relate to unsecured CPBB exposures

for which the LGD is not sensit

ive to changes

in the

macroeconomic forecasts. There is also no material change

for non-modelled stage 3 exposures as these are more

sensit

ive to cl

ient specif

ic factors than to alternat

ive

macroeconomic scenarios.

The actual outcome of any scenario may be materially

different due to, among other factors, the effect of

management actions to mit

igate potent

ial increases

in risk and changes in the underlying portfolio.

278

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Gross as

reported

$ mill

ion

ECL as

reported

$ mill

ion

ECL

Base case

$ mill

ion

Advanced

economy

downturn

$ mill

ion

ACS 2022

$ mill

ion

Stage 1 modelled

Corporate, Commercial & Institut

ional Bank

ing

315,437

157

138

148

191

Consumer, Private & Business Banking

193,239

395

372

379

447

Ventures

691

Central & Other items

210,745

Total excluding management overlays

720,112

590

545

563

686

Stage 2 modelled

Corporate, Commercial & Institut

ional Bank

ing

19,432

275

256

269

435

Consumer, Private & Business Banking

1,821

106

227

Ventures

Central & Other items

6,208

Total excluding management overlays

27,479

470

431

445

749

Total Stage 1 & 2 modelled

Corporate, Commercial & Institut

ional Bank

ing

334,869

432

394

417

626

Consumer, Private & Business Banking

195,060

501

461

469

674

Ventures

709

Central & Other items

216,953

116

110

111

124

Total excluding management overlays

747,859

1,060

976

1,008

1,435

Stage 3 exposures excluding management overlays

8,975

4,778

Other ﬁnancial assets

101,606

ECL from management overlays

219

Total reported at 31 December 2022

858,172

6,075

Includes both on- and off- balance sheet instruments

Includes cash and balances at central banks; Accrued income; Other assets; and Assets held for sale

Sign

iﬁcant

increase in Credit Risk (SICR)

Quantitat

ive cr

iter

SICR is assessed by comparing the risk of default at the

reporting date to the risk of default at orig

inat

ion. Whether a

change in the risk of default is sign

iﬁcant or not

is assessed

using quantitat

ive and qual

itat

ive cr

iter

ia. These quant

itat

ive

sign

iﬁcant deter

iorat

ion thresholds have been separately

deﬁned for each business and where meaningful are

consistently applied across business lines.

Assets are considered to have experienced SICR if they have

breached both relative and absolute thresholds for the

change in the average annualised lifet

ime probab

ity of

default over the residual term of the exposure.

The absolute measure of increase in Credit Risk is used to

capture instances where the IFRS 9 PDs on exposures are

relatively low at in

ial recognit

ion as these may

increase by

several multiples without representing a sign

iﬁcant

increase in

credit risk. Where IFRS 9 PDs are relatively high at in

ial

recognit

ion, a relat

ive measure is more appropriate in

assessing whether there is a sign

iﬁcant

increase in credit risk,

as the IFRS 9 PDs increase more quickly.

The SICR thresholds have been calibrated based on the

following princ

iples:

•

Stabil

ity – the thresholds are set to ach

ieve a stable stage 2

population at a portfolio level, trying to min

ise the

number of accounts moving back and forth between stage

1 and stage 2 in a short period of time

•

Accuracy – the thresholds are set such that there is a

materially higher propensity for stage 2 exposures to

eventually default than is the case for stage 1 exposures

•

Dependency from backstops – the thresholds are stringent

enough such that a high proportion of accounts transfer to

stage 2 due to movements in forward-looking IFRS9 PDs

rather than relying on backward-looking backstops such as

arrears

•

Relationsh

ip w

ith business and product risk proﬁles – the

thresholds reﬂect the relative risk differences between

different products, and are aligned to business processes

For CCIB clients, the relative threshold is a 100 per cent

increase in IFRS 9 PD and the absolute change in IFRS 9 PD is

between 50 and 100 bps.

For Consumer and Business Banking clients, portfolio specif

quantitat

ive thresholds

in Hong Kong, Singapore, Malaysia,

UAE and Taiwan have been introduced in 2022 for credit cards

and one personal loan portfolio. The thresholds include

relative and absolute increases in IFRS 9 PD with average

lifet

ime IFRS 9 PD cut-offs for those exposures that are w

ith

in a

range of customer util

isat

ion lim

its (for cred

it cards) and

remain

ing tenor (for personal loans) and d

ifferent

iate

between exposures that are current and those that are 1 to 29

days past due.

279

Standard Chartered

– Annual Report 2022

Risk review and Capital review

The range of thresholds applied are:

Portfolio

Relative IFRS 9

PD increase

(%)

Absolute IFRS 9

PD increase

(%)

Customer

util

isat

ion

(%)

Remain

ing

tenor

(%)

Average

IFRS 9 PD

(lifet

ime)

Credit cards – Current

50% – 150%

3.4% – 9.3%

15% – 90%

–

4.15% – 11.6%

Credit cards – 1-29 days past due

100% – 210%

3.5% – 6.1%

25% – 67%

–

1.5% – 18.5%

Personal loans – Current

–

3.5%

–

70%

2.8%

Personal loan – 1-29 days past due

25%

–

75%

–

The impact of this change has been to transfer $212 mill

ion of

credit cards balances and $14 mill

ion of personal loans

balances from stage 2 to stage 1, which reduced ECL by a net

$15 mill

ion.

For all other Consumer and Business Banking portfolios, the

thresholds remained the same as 2021, with a relative

threshold of 100 per cent increase in IFRS 9 PD and an

absolute change in IFRS 9 PD is between 100 and 350 bps

depending on the product. Certain countries have a higher

absolute threshold reﬂecting the lower default rate with

their personal loan portfolios compared with the Group’s other

personal loan portfolios.

Private Banking clients are assessed qualitat

ively, based on a

delinquency measure relating to collateral top-ups or

sell-downs.

Debt securit

ies or

inated before 1 January 2018 w

ith an

internal credit rating mapped to an investment grade

equivalent are allocated to stage 1 and all other debt

securit

ies to stage 2. Debt secur

ies or

inated after 1 January

2018 apply the same approach and thresholds as for CCIB

clients.

Qualitat

ive cr

iter

Qualitat

ive factors that

ind

icate that there has been a

sign

iﬁcant

increase in credit risk include processes linked to

current risk management, such as placing loans on non-purely

precautionary early alert.

Backstop

Across all portfolios, accounts that are 30 or more days past

due (30 DPD) on contractual payments of princ

ipal and/or

interest that have not been captured by the criter

ia above are

considered to have experienced a sign

iﬁcant

increase in credit

risk.

Expert credit judgement may be applied in assessing

sign

iﬁcant

increase in credit risk to the extent that certain risks

may not have been captured by the models or through the

above criter

ia. Such

instances are expected to be rare, for

example due to events and material uncertaint

ies ar

ing

close to the reporting date.

CCIB clients

Quantitat

ive cr

iter

Exposures are assessed based on both the absolute and the

relative movement in the IFRS 9 PD from orig

inat

ion to the

reporting date as described above.

To account for the fact that the mapping between internal

credit grades (used in the orig

inat

ion process) and IFRS 9 PDs

is non-linear (e.g. a one-notch downgrade in the investment

grade universe results in a much smaller IFRS 9 PD increase

than in the sub-investment grade universe), the absolute

thresholds have been different

iated by cred

it quality at

orig

inat

ion, as measured by internal credit grades being

investment grade or sub-investment grade.

Qualitat

ive cr

iter

All assets of clients that have been placed on early alert (for

non-purely precautionary reasons) are deemed to have

experienced a sign

iﬁcant

increase in credit risk.

An account is placed on non-purely precautionary early alert

if it exhib

its r

isk or potential weaknesses of a material nature

requir

ing closer mon

itor

ing, superv

ion or attent

ion by

management. Weaknesses in such a borrower’s account, if

left uncorrected, could result in deteriorat

ion of repayment

prospects and the likel

ihood of be

ing downgraded. Indicators

could include a rapid erosion of posit

ion w

ith

in the

industry,

concerns over management’s abil

ity to manage operat

ions,

weak/deteriorat

ing operat

ing results, liqu

ity strain and

overdue balances, among other factors.

All client assets that have been assigned a CG12 rating,

equivalent to ‘Higher risk’, are deemed to have experienced a

sign

iﬁcant

increase in credit risk. Accounts rated CG12 are

primar

ily managed by relat

ionsh

ip managers

in the CCIB unit

with support from SAG

for certain accounts.. All CCIB clients

are placed in CG12 when they are 30 DPD unless they are

granted a waiver through a strict governance process.

Consumer and Business Banking clients

Quantitat

ive cr

iter

Material portfolios (deﬁned as a combinat

ion of country and

product, for example Hong Kong mortgages, Taiwan credit

cards) for which a statist

ical model has been bu

ilt, are

assessed based on both the absolute and relative movement

in the IFRS 9 PD from orig

inat

ion to the reporting date as

described previously in page 270. For these portfolios, the

orig

inal l

ifet

ime IFRS 9 PD term structure

is determined based

on the orig

inal Appl

icat

ion Score or R

isk Segment of the client.

Qualitat

ive cr

iter

Accounts that are 30 days past due (DPD) that have not been

captured by the quantitat

ive cr

iter

ia are cons

idered to have

experienced a sign

iﬁcant

increase in credit risk. For less

material portfolios, which are modelled based on a roll-rate or

loss-rate approach, SICR is primar

ily assessed through the

30 DPD trigger.

Private Banking clients

For Private Banking clients, SICR is assessed by referencing the

nature and the level of collateral against which credit is

extended (known as ‘Classes of Risk’).

Qualitat

ive cr

iter

For all Private Banking classes, in line with risk management

practice, an increase in credit risk is deemed to have occurred

where margin

ing or loan-to-value covenants have been

breached.

For Class I assets (lending against divers

iﬁed l

iqu

id collateral),

if these margin

ing requ

irements have not been met with

30 days of a trigger, a sign

iﬁcant

increase in credit risk is

assumed to have occurred.

280

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

For Class I and Class III assets (real-estate lending), a

sign

iﬁcant

increase in credit risk is assumed to have occurred

where the bank is unable to ‘sell down’ the applicable assets

to meet revised collateral requirements with

in ﬁve days of a

trigger.

Class II assets are typically unsecured or partially secured, or

secured against ill

iqu

id collateral such as shares in private

companies. Sign

iﬁcant cred

it deteriorat

ion of these assets

deemed to have occurred when any early alert trigger has

been breached.

Debt Securit

ies

Quantitat

ive cr

iter

For debt securit

ies or

inated before 1 January 2018, the bank

is util

ing the low Credit Risk simpl

iﬁed approach, where debt

securit

ies w

ith an internal credit rating mapped to an

investment grade equivalent are allocated to stage 1 and all

other debt securit

ies are allocated to stage 2. Debt secur

ies

orig

inated after 1 January 2018 are assessed based on the

absolute and relative movements in IFRS 9 PD from orig

inat

ion

to the reporting date.

Qualitat

ive cr

iter

Debt securit

ies ut

ise the same qual

itat

ive cr

iter

ia as the CCIB

client segments, includ

ing be

ing placed on early alert or being

classif

ied as CG12.

Assessment of credit-impa

ired ﬁnancial assets

Consumer and Business Banking clients

The core components in determin

ing cred

it-impa

ired

expected credit loss provis

ions are the value of gross

chargeoff and recoveries. Gross charge-off and/or loss

provis

ions are recogn

ised when it is established that the

account is unlikely to pay through the normal process.

Recovery of unsecured debt post credit impa

irment

recognised based on actual cash collected, either directly

from clients or through the sale of defaulted loans to third-

party inst

itut

ions. Release of credit impa

irment prov

ions for

secured loans is recognised if the loan outstanding is paid in

full (release of full provis

ion), or the prov

ion

is higher than the

loan outstanding (release of the excess provis

ion).

CCIB, and Private Banking clients

Credit-impa

ired accounts are managed by the Group’s

special

ist recovery un

it, Stressed Assets Risk (SAR). Where any

amount is considered irrecoverable, a stage 3 credit

impa

irment prov

ion

is raised. This stage 3 provis

ion

is the

difference between the loan-carrying amount and the

probabil

ity-we

ighted present value of estimated future cash

ﬂows, reﬂecting a range of scenarios (typically the best, worst

and most likely recovery outcomes). Where the cashﬂows

include realisable collateral, the values used will incorporate

the impact of forward-looking economic informat

ion.

The ind

idual circumstances of each client are considered

when SAR estimates future cashﬂows and the tim

ing of future

recoveries which involves sign

iﬁcant judgement. All ava

ilable

sources, such as cashﬂow aris

ing from operat

ions, selling

assets or subsid

iar

ies, realis

ing collateral or payments under

guarantees are considered. In any decis

ion relat

ing to the

rais

ing of prov

ions, the Group attempts to balance econom

condit

ions, local knowledge and exper

ience, and the results of

independent asset reviews.

Write-offs

Where it is considered that there is no realist

ic prospect of

recovering a portion of an exposure against which an

impa

irment prov

ion has been ra

ised, that amount will be

written off.

Governance and applicat

ion of expert cred

it judgement in

respect of expected credit losses

The Group’s Credit Policy and Standards framework details

the requirements for continuous monitor

ing to

ident

ify any

changes in credit quality and resultant ratings, as well as

ensuring a consistent approach to monitor

ing, manag

ing and

mit

igat

ing credit risks. The framework aligns with the

governance of ECL estimat

ion through the early recogn

ion of

sign

iﬁcant deter

iorat

ions

in ratings which drive stage 2 and 3

ECL.

The models used in determin

ing expected cred

it losses are

reviewed and approved by the Group Credit Model

Assessment Committee (CMAC) which is appointed by the

Model Risk Committee. CMAC has the responsib

ity to assess

and approve the use of models and to review all IFRS 9

interpretat

ions related to models. CMAC also prov

ides

oversight on operational matters related to model

development, performance monitor

ing and model val

idat

ion

activ

ies includ

ing standards and regulatory matters.

Prior to submiss

ion to CMAC for approval, the models are

validated by GMV, a function which is independent of the

business and the model developers. GMV’s analysis comprises

review of model documentation, model design and

methodology, data validat

ion, rev

iew of the model

development and calibrat

ion process, out-of-sample

performance testing, and assessment of compliance review

against IFRS 9 rules and internal standards.

A quarterly model monitor

ing process

is in place that uses

recent data to compare the differences between model

predict

ions and actual outcomes aga

inst approved

thresholds. Where a model’s performance breaches the

monitor

ing thresholds, an assessment of whether a PMA

required to correct for the ident

iﬁed model

issue is completed.

Key inputs into the calculation and resulting expected credit

loss provis

ions are subject to rev

iew and approval by the IFRS 9

Impairment Committee (IIC) which is appointed by the Group

Risk Committee. The IIC consists of senior representatives from

Risk, Finance, and Group Economic Research. It meets at least

twice every quarter, once before the models are run to

approve key inputs into the calculation, and once after the

models are run to approve the expected credit loss provis

ions

and any judgemental overrides that may be necessary.

281

Standard Chartered

– Annual Report 2022

Risk review and Capital review

The IFRS 9 Impairment Committee:

•

Oversees the appropriateness of all Business Model

Assessment and Solely Payments of Princ

ipal and Interest

(SPPI) tests;

•

Reviews and approves expected credit loss for ﬁnanc

ial

assets classif

ied as stages 1, 2 and 3 for each ﬁnancial

reporting period;

•

Reviews and approves stage allocation rules and thresholds;

•

Approves material adjustments in relation to expected

credit loss for Fair Value through Other Comprehensive

Income (FVOCI) and amortised cost ﬁnanc

ial assets;

•

Reviews, challenges and approves base macroeconomic

forecasts and the multiple macroeconomic scenarios

approach that are util

ised

in the forward-looking expected

credit loss calculations

The IFRS 9 Impairment Committee is supported by an Expert

Panel which also reviews and challenges the base case

projections and mult

iple macroeconomic scenarios. The

Expert Panel consists of members of Enterprise Risk

Management (which includes the Scenario Design team),

Finance, Group Economic Research and country

representatives of major jur

isd

ict

ions.

PMAs may be applied to account for ident

iﬁed weaknesses

model estimates. The processes for ident

ify

ing the need for,

calculating the level of, and approving PMAs are prescribed in

the Credit Risk IFRS 9 ECL Model Family Standards which are

approved by the Global Head, Model Risk Management. PMA

calculation methodologies are reviewed by GMV and

submitted to CMAC as the model approver or the IIC. All PMAs

have a remediat

ion plan to ﬁx the

ident

iﬁed model weakness,

and these plans are reported to and tracked at CMAC.

In addit

ion, judgemental management adjustments account

for events are not captured in the Base Case Forecast or the

resulting ECL calculated by the models (for example, caused

by sudden events or as a result of sign

iﬁcant levels of

uncertainty). All judgemental management adjustments must

be approved by the IIC having considered the nature of the

event, why the risk is not captured in the model, and the basis

on which the quantum of the overlay has been calculated.

Judgemental management adjustments are subject to

quarterly review and re-approval by the IIC and will be

released when the risks are no longer relevant.

282

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Traded Risk

Traded Risk is the potential for loss resulting from activ

ies

undertaken by the Group in ﬁnanc

ial markets. Under the

Enterprise Risk Management Framework, the Traded Risk

Framework brings together Market Risk, Counterparty Credit

Risk and Algorithm

ic Trad

ing. Traded Risk Management is the

core risk management function supporting market-facing

businesses, predominantly Financ

ial Markets and Treasury

Markets.

Market Risk (audited)

Market Risk is the potential for fair value loss due to adverse

moves in ﬁnanc

ial markets. The Group’s exposure to Market

Risk arises predominantly from the following sources:

• Trading book:

– The Group provides clients access to ﬁnanc

ial markets,

facil

itat

ion of which entails the Group taking moderate

Market Risk posit

ions. All trad

ing teams support client

activ

ity. There are no propr

ietary trading teams. Hence,

income earned from Market Risk-related activ

ies is

primar

ily dr

iven by the volume of client activ

ity rather

than risk-taking

• Non-trading book:

– The Treasury Markets desk is required to hold a liqu

assets buffer, much of which is held in high-quality

marketable debt securit

ies

– The Group has capital invested and related income

streams denominated in currencies other than US dollars.

To the extent that these are not hedged, the Group is

subject to Structural Foreign Exchange Risk which is

reﬂected in reserves

A summary of our current polic

ies and pract

ices regarding

Market Risk management is provided in the Princ

ipal R

isks

section (page 304).

The primary categories of Market Risk for the Group are:

•

Interest Rate Risk: aris

ing from changes

in yield curves and

impl

ied volat

ies on interest rate options

•

Foreign Exchange Rate Risk: aris

ing from changes

currency exchange rates and impl

ied volat

ies on foreign

exchange options

•

Commodity Risk: aris

ing from changes

in commodity prices

and impl

ied volat

ies on commodity options; covering

energy, precious metals, base metals and agriculture as well

as commodity baskets

•

Credit Spread Risk: aris

ing from changes

in the price of debt

instruments and credit-linked derivat

ives, dr

iven by factors

other than the level of risk-free interest rates

•

Equity Risk: aris

ing from changes

in the prices of equit

ies,

equity ind

ices, equ

ity baskets and impl

ied volat

ies on

related options

Market Risk movements (audited)

Value at Risk (VaR) allows the Group to manage Market Risk

across the trading book and most of the fair valued non-

trading books.

The average level of total trading and non-trading VaR in

2022 was $52.5 mill

ion, 4.2 per cent lower than 2021 ($54.8

mill

ion). The actual level of total trad

ing and non-trading VaR

as at the end of 2022 was $55.8 mill

ion, 28.6 per cent h

igher

than 2021 ($43.4 mill

ion), due to an

increase in market volatil

ity

in H2 2022, driven by a number of Central Banks increas

ing

interest rates to curb inﬂat

ion.

For the trading book, the average level of VaR in 2022 was

$18.0 mill

ion, 4.6 per cent h

igher than 2021 ($17.2 mill

ion).

Trading activ

ies have remained relatively unchanged, and

client driven.

Daily value at risk (VaR at 97.5%, one day) (audited)

Trading

and non-trading

2022

2021

Average

$mill

ion

High

$ mill

ion

Low

$mill

ion

Year End

$mill

ion

Average

$mill

ion

High

$mill

ion

Low

$mill

ion

Year End

$mill

ion

Interest Rate Risk

27.8

42.1

21.0

24.7

31.3

68.3

16.4

26.0

Credit Spread Risk

34.2

47.1

20.3

32.9

34.0

97.6

14.8

21.5

Foreign Exchange Risk

6.5

10.3

4.8

6.8

7.3

19.0

4.2

7.0

Commodity Risk

7.0

11.9

3.5

8.3

4.5

10.4

2.3

3.6

Equity Risk

0.1

0.2

–

0.1

1.3

1.7

1.0

1.4

Total

52.5

64.1

40.3

55.8

54.8

140.7

30.7

43.4

Trading

2022

2021

Average

$mill

ion

High

$mill

ion

Low

$mill

ion

Year End

$mill

ion

Average

$mill

ion

High

$mill

ion

Low

$mill

ion

Year End

$mill

ion

Interest Rate Risk

8.1

11.7

5.3

9.0

7.6

10.2

5.2

7.2

Credit Spread Risk

9.5

14.9

5.0

8.7

8.6

19.2

4.2

6.2

Foreign Exchange Risk

6.5

10.3

4.8

6.8

7.3

19.0

4.2

7.0

Commodity Risk

7.0

11.9

3.5

8.3

4.5

10.4

2.3

3.6

Equity Risk

–

Total

18.0

24.4

12.6

21.8

17.2

28.4

12.3

15.3

283

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Non-trading

2022

2021

Average

$mill

ion

High

$mill

ion

Low

$mill

ion

Year End

$mill

ion

Average

$mill

ion

High

$mill

ion

Low

$mill

ion

Year End

$mill

ion

Interest Rate Risk

26.3

44.5

18.1

23.5

32.4

68.2

18.2

24.3

Credit Spread Risk

28.8

37.8

18.7

29.2

80.0

14.4

20.2

Equity Risk

0.1

0.2

–

0.1

1.3

1.7

1.0

1.4

Total

44.6

52.5

35.1

41.3

47.1

106.3

25.3

38.3

The following table sets out how trading and non-trading VaR is distr

ibuted across the Group’s bus

inesses:

2022

2021

Average

$mill

ion

High

$mill

ion

Low

$mill

ion

Year End

$mill

ion

Average

$mill

ion

High

$mill

ion

Low

$mill

ion

Year End

$mill

ion

Trading

and non-trading

52.5

64.1

40.3

55.8

54.8

140.7

30.7

43.4

Trading

Macro Trading

12.8

17.4

10.2

16.9

12.7

21.2

9.0

12.2

Global Credit

10.1

15.7

4.2

8.4

6.9

18.7

3.6

4.8

Equit

ies

–

XVA

3.9

5.0

2.4

4.6

5.2

11.9

2.5

Total

18.0

24.4

12.6

21.8

17.2

28.4

12.3

15.3

Non-trading

Treasury Markets

38.7

47.5

29.7

40.3

40.5

83.1

22.7

36.4

Treasury Capital Management

9.1

15.3

6.4

9.1

9.2

22.7

4.9

6.5

Global Credit

3.4

5.0

2.3

3.5

5.2

11.7

2.3

2.5

Listed Private Equity

0.1

0.2

–

0.1

1.3

1.7

1.0

1.4

Total

44.6

52.5

35.1

41.3

47.1

106.3

25.3

38.3

The trading book for Market Risk is deﬁned in accordance with the UK onshored Capital Requirements Regulation Part 3 Title I Chapter 3, which restricts the

posit

ions perm

itted in the trading book

The non-trading book VaR does not include syndicated loans

Non-trading Equity Risk VaR includes only listed equit

ies

4 Macro Trading comprises the Rates, FX and Commodit

ies bus

inesses

Risks not in VaR

In 2022, the main market risks not reﬂected in VaR were:

•

Basis risks for which the histor

ical market pr

ice data is lim

ited and

is therefore proxied, giv

ing r

ise to potential proxy basis risk

that is not captured in VaR

•

Potential depeg risk from currencies currently pegged or managed, as the histor

ical one-year VaR observat

ion period does

not reﬂect the possib

ity of a change in the currency regime such as sudden depegging

•

Deal contingent risk where a client is granted the right to cancel a hedging trade contingent on condit

ions not be

ing met

with

in a t

ime window

•

Volatil

ity skew r

isk due to movements in options volatil

ies at different strikes while VaR reﬂects only movements in at-the-

money volatil

ies

Addit

ional cap

ital is set aside to cover such ‘risks not in VaR’.

Backtesting

In 2022, there were eight regulatory backtesting negative exceptions at Group level (in 2021, there were three regulatory

backtesting negative exceptions at Group level). Group exceptions occurred on:

•

9 March: When risk assets rallied on hope of a truce agreement between Russia and Ukraine

•

29 March: When oil and base metal prices fell on the prospect of further ceaseﬁre talks between Russia and Ukraine, and

following a resurgence of COVID-19 cases in China

•

25 April: When risk assets fell following an announcement by Chinese authorit

ies of expanded COVID-19 test

ing requirements

amidst ris

ing cases

•

29 September: When the Bank of England intervened in the gilts market to protect UK pension funds with Liab

ity Driven

Investment (LDI) exposures

•

4 October: When the Reserve Bank of Australia raised Australian interest rates by less than expected. US Treasury yields fell

and the USD currency depreciated

•

25 October: When the new UK Prime Min

ister was appo

inted and Sterling appreciated sharply

•

26 October: When new economic data ind

icated that the Federal Reserve would slow ant

ipated US

interest rate rises.

USD yields fell and the USD currency depreciated

284

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

•

27 October: When the Central Bank of Egypt announced that the Egyptian Pound (EGP) would move to a durably ﬂexible

exchange rate regime and raised EGP interest rates by 200 basis points

The VaR model is currently being enhanced to increase its responsiveness to abrupt upturns in market volatil

ity

In total, there have been eight Group exceptions in the previous 250 business days which is with

in the ‘amber zone’ appl

ied

internat

ionally to

internal models by bank supervisors (Basel Committee on Banking Supervis

ion, Superv

isory framework for the

use of backtesting in conjunct

ion w

ith the internal models approach to market risk capital requirements, January 1996).

The graph below illustrates the performance of the VaR model used in capital calculations. It compares the 99 percentile loss

conﬁdence level given by the VaR model with the hypothetical proﬁt and loss of each day given the actual market movement

without taking into account any intra-day trading activ

ity.

-30

-20

-10

2022 Backtesting chart

Internal model approach regulatory trading book at Group level

Hypothetical proﬁt and loss (P&L) versus VaR (99 per cent, one day)

Hypothetical P&L

Posit

ive VaR at 99%

Negative VaR at 99%

Negative exceptions

Jan 2022

Feb 2022

Mar 2022

Apr 2022

May 2022

Jun 2022

Jul 2022

Aug 2022

Sep 2022

Oct 2022

Nov 2022

Dec 2022

Posit

ive except

ions

Trading loss days

2022

2021

Number of loss days reported for Financ

ial Markets trad

ing book total product income¹

Reﬂects total product income for Financ

ial Markets:

•

Including credit valuation adjustment (CVA) and funding valuation adjustment (FVA)

•

Excluding Treasury Markets business (non-trading) and period

ic valuat

ion changes for Capital Markets, expected loss provis

ions and overn

ight indexed swap

(OIS) discount

ing and account

ing adjustments such as debit valuation adjustments

Average daily income earned from Market Risk-related activ

ies¹ (audited)

The average level of total trading daily income in 2022 was $14 mill

ion, 43 per cent h

igher than in 2021 ($9.8 mill

ion). The

increase

is largely attributable to higher client income in Macro Trading driven by increased ﬂows and trading income driven by higher

market volatil

ity and a rally

in commodity prices.

Trading

2022

$mill

ion

2021

$mill

ion

Interest Rate Risk

5.0

3.3

Credit Spread Risk

1.4

0.9

Foreign Exchange Risk

6.3

4.7

Commodity Risk

1.3

0.9

Equity Risk

–

Total

14.0

9.8

Non-trading

$mill

ion

$mill

ion

Interest Rate Risk

–

0.4

Credit Spread Risk

0.6

0.2

Equity Risk

–

Total

0.6

Reﬂects total product income which is the sum of client income and own account income. Includes elements of trading income, interest income and other income

which are generated from Market Risk-related activ

ies. Rates, XVA and Treasury income are included under Interest Rate Risk whilst Credit Trading income is

included under Credit Spread Risk

285

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Structural foreign exchange exposures

The table below sets out the princ

ipal structural fore

ign exchange exposures (net of investment hedges) of the Group.

2022

$mill

ion

2021

$mill

ion

Indian rupee

4,396

4,323

Renminb

3,497

4,186

Hong Kong dollar

3,333

4,757

Korean won

2,409

1,756

Singapore dollar

1,888

2,228

Malaysian ringg

1,571

1,532

Taiwanese dollar

1,055

1,188

Thai baht

782

775

UAE dirham

670

643

Pakistan

i rupee

352

429

Indonesian rupiah

261

289

Other

4,958

4,976

25,172

27,082

As at 31 December 2022, the Group had taken net investment

hedges using derivat

ive ﬁnancial

investments to partly cover

its exposure to the Hong Kong dollar of $6,236 mill

ion (2021:

$4,975 mill

ion), Korean won of $3,330 m

ill

ion (2021: $2,856

mill

ion), S

ingapore dollar of $1,608 mill

ion (2021: $729 m

ill

ion),

Renminb

i of $1,608 m

ill

ion (2021: $1,642 m

ill

ion), UAE d

irham of

$1,334 mill

ion (2021: $1,198 m

ill

ion), Ta

iwanese dollar of $1,075

mill

ion (2021: $1,149 m

ill

ion) and Ind

ian rupee of $620 mill

ion

(2021: $656 mill

ion). An analys

is has been performed on these

exposures to assess the impact of a 1 per cent fall in the US

dollar exchange rates, adjusted to incorporate the impacts of

correlations of these currencies to the US dollar. The impact on

the posit

ions above would be an

increase of $421 mill

ion (2021:

$399 mill

ion). Changes

in the valuation of these posit

ions are

taken to reserves. For analysis of the Group’s capital posit

ion

and requirements, refer to the Capital Review (page 320).

Counterparty Credit Risk

Counterparty Credit Risk is the potential for loss in the event of

the default of a derivat

ive counterparty, after tak

ing into

account the value of elig

ible collaterals and r

isk mit

igat

ion

techniques. The Group’s counterparty credit exposures are

included in the Credit Risk section.

Derivat

ive ﬁnancial

instruments Credit Risk mit

igat

ion

The Group enters into master netting agreements, which in

the event of default result in a single amount owed by or to

the counterparty through netting the sum of the posit

ive and

negative mark-to-market values of applicable derivat

ive

transactions.

In addit

ion, the Group enters

into credit support annexes

(CSAs) with counterparties where collateral is deemed a

necessary or desirable mit

igant to the exposure. Cash

collateral includes collateral called under a variat

ion marg

process from counterparties if total uncollateralised mark-to-

market exposure exceeds the threshold and min

imum transfer

amount specif

ied

in the CSA. With certain counterparties, the

CSA is reciprocal and requires us to post collateral if the overall

mark-to-market values of posit

ions are

in the counterparty’s

favour and exceed an agreed threshold.

Liqu

ity and Funding Risk

Liqu

ity and Funding Risk is the risk that the Group may not

have sufﬁcient stable or d

iverse sources of funding to meet its

obligat

ions as they fall due.

The Group’s Liqu

ity and Funding Risk framework requires

each country to ensure that it operates with

in predeﬁned

liqu

ity lim

its and rema

ins in compliance with Group liqu

ity

polic

ies and pract

ices, as well as local regulatory

requirements.

The Group achieves this through a combinat

ion of sett

ing Risk

Appetite and associated lim

its, pol

icy formation, risk

measurement and monitor

ing, prudent

ial and internal stress

testing, governance and review.

Despite the challenging macroeconomic environment, the

Group has mainta

ined res

ience and reta

ined a robust

liqu

ity posit

ion. The Group cont

inues to focus on improv

ing

the quality and divers

iﬁcation of

its funding mix, and remains

committed to supporting its clients.

Primary sources of funding (audited)

The Group’s funding strategy is largely driven by its policy to

mainta

in adequate l

iqu

ity at all times, in all geographic

locations and for all currencies. This is done to ensure the

Group can meet all of its obligat

ions as they fall due. The

Group’s funding proﬁle is therefore well divers

iﬁed across

different sources, maturit

ies and currenc

ies.

The Group’s assets are funded predominantly by customer

deposits, supplemented with wholesale funding, which is

divers

iﬁed by type and matur

ity.

The Group mainta

ins access to wholesale fund

ing markets in

all major ﬁnancial centres

in which it operates. This seeks to

ensure that the Group has market intell

igence, ma

inta

ins

stable funding lines and can obtain optimal pric

ing when

performing Interest Rate Risk management activ

ies.

In 2022, the Group issued approximately $5.2 bill

ion of sen

ior

debt securit

ies, $0.75 b

ill

ion of subord

inated debt securit

ies

and $1.25 bill

ion of Add

ional T

ier 1 securit

ies from

its holding

company (HoldCo) Standard Chartered PLC (2021: $6.8 bill

ion

of senior debt securit

ies, $1.2 b

ill

ion of subord

inated debt

securit

ies and $2.75 b

ill

ion of Add

ional T

ier 1 securit

ies). In the

next 12 months, approximately $5.4 bill

ion of the Group’s sen

ior

debt, subordinated debt and Addit

ional T

ier 1 securit

ies

total are either falling due for repayment contractually or

callable by the Group.

286

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Group’s composition of liabilities

31 December 2022

4.5

8.5

Geographic distr

ibut

ion of customer accounts

31 December 2022

Derivat

ive ﬁnancial

instruments

Deposits by banks

Debt securit

ies

in issue

Customer accounts

Other liab

ies

Equity

Subordinated liab

ies

and other borrowed funds

63.4

7.3

1.7

6.1

100%

Asia

Africa &

Middle East

Europe & Americas

100%

65.7

6.1

28.2

Liqu

ity and Funding Risk metrics

The Group continually monitors key liqu

ity metrics, both on a

country basis and consolidated across the Group.

The following liqu

ity and funding Board Risk Appetite

metrics deﬁne the maximum amount and type of risk that the

Group is will

ing to assume

in pursuit of its strategy: liqu

ity

coverage ratio (LCR), liqu

ity stress survival horizons, external

wholesale borrowing, advances-to-deposits ratio (ADR) and

net stable funding ratio (NSFR).

Liqu

ity coverage ratio (LCR)

The LCR is a regulatory requirement set to ensure the Group

has sufﬁcient unencumbered h

igh-quality liqu

id assets to

meet its liqu

ity needs in a 30-calendar-day liqu

ity stress

scenario.

The Group monitors and reports its liqu

ity posit

ions under

the Liqu

ity Coverage Ratio (CRR) part of the PRA rulebook

and has mainta

ined

its LCR above the prudential requirement.

The Group mainta

ined strong l

iqu

ity ratios despite a

challenging macroeconomic and geopolit

ical env

ironment.

At the reporting date, the Group LCR was 147 per cent (2021:

143 per cent), with a surplus to both Board-approved Risk

Appetite and regulatory requirements.

Adequate liqu

ity was held across our footprint to meet all

local prudential LCR requirements where applicable.

2022

$mill

ion

2021

$mill

ion

Liqu

ity buffer

177,037

172,178

Total net cash outﬂows

120,720

120,788

Liqu

ity coverage ratio

147%

143%

Stressed coverage

The Group intends to mainta

in a prudent and susta

inable

funding and liqu

ity posit

ion,

in all countries and currencies,

such that it can withstand a severe but plausible liqu

ity

stress.

The Group’s approach to managing liqu

ity and funding is

reﬂected in the Board-level Risk Appetite Statement which

includes the following:

“The Group should have sufﬁcient stable and d

iverse sources

of funding to meet its contractual and contingent obligat

ions

as they fall due.”

The Group’s internal liqu

ity stress testing framework covers

the following stress scenarios:

•

Standard Chartered-specif

ic – wh

ich captures the

liqu

ity impact from an id

iosyncrat

ic event affecting

Standard Chartered only with the rest of the market

assumed to be operating normally;

•

Market wide – which captures the liqu

ity impact from a

market-wide cris

is affect

ing all partic

ipants

in a country,

region or globally; and

•

Combined – which assumes both Standard Chartered-

specif

ic and Market-w

ide events affect the Group

simultaneously and hence is the most severe scenario.

All scenarios include, but are not lim

ited to, modelled outﬂows

for retail and wholesale funding, off-balance sheet funding

risk, cross-currency funding risk, intraday risk, franchise risk

and risks associated with a deteriorat

ion of a ﬁrm’s cred

rating.

Stress testing results show that a posit

ive surplus was

mainta

ined under all scenar

ios at 31 December 2022, i.e.

respective countries are able to survive for a period of time as

deﬁned under each scenario. The results take into account

currency convertib

ity and portabil

ity constra

ints while

calculating the liqu

ity surplus at Group level.

Standard Chartered Bank’s credit ratings as at 31 December

2022 were A+ with stable outlook (Fitch), A+ with stable

outlook (S&P) and A1 with stable outlook (Moody’s). As of 31

December 2022, the estimated contractual outﬂow of a

three-notch long-term ratings downgrade is $1.5 bill

ion.

287

Standard Chartered

– Annual Report 2022

Risk review and Capital review

External wholesale borrowing

The Board sets a risk lim

it to prevent excess

ive reliance on

wholesale borrowing. With

in the deﬁnit

ion of wholesale

borrowing, lim

its are appl

ied to all branches and operating

subsid

iar

ies in the Group and as at the reporting date, the

Group remained with

in Board R

isk Appetite.

Advances-to-deposits ratio

This is deﬁned as the ratio of total loans and advances to

customers relative to total customer deposits. An advances-

to-deposits ratio below 100 per cent demonstrates that

customer deposits exceed customer loans as a result of the

emphasis placed on generating a high level of funding from

customers.

The Group’s advances-to-deposits ratio has decreased by

1.7 per cent to 57.4 per cent, driven by a reduction of 2 per cent

in customer deposits and 5 per cent in customer loans and

advances.

2022

$mill

ion

2021

$mill

ion

Total loans and advances to customers

1,2

271,897

285,922

Total customer accounts

473,383

483,861

Advances-to-deposits ratio

57.4%

59.1%

Excludes reverse repurchase agreement and other sim

ilar secured lend

ing of $24,498 mill

ion and

includes loans and advances to customers held at fair value

through proﬁt and loss of $6,546 mill

ion

Loans and advances to customers for the purpose of the advances-to-deposits ratio excludes $20,798 mill

ion of approved balances held w

ith central banks,

conﬁrmed as repayable at the point of stress (31 December 2021: $15,168 mill

ion)

Includes customer accounts held at fair value through proﬁt or loss of $11,706 mill

ion (31 December 2021: $9,291 m

ill

ion)

Net stable funding ratio (NSFR)

The NSFR is a PRA regulatory requirement that stipulates

inst

itut

ions to mainta

in a stable fund

ing proﬁle in relation to

an assumed duration of their assets and off-balance sheet

activ

ies over a one-year horizon. It is the ratio between the

amount of available stable funding (ASF) and the amount of

required stable funding (RSF). ASF factors are applied to

balance sheet liab

ies and cap

ital, based on their perceived

stabil

ity and the amount of stable fund

ing they provide.

Likew

ise, RSF factors are appl

ied to assets and off-balance

sheet exposures according to the amount of stable funding

they require. The regulatory requirements for NSFR are to

mainta

in a rat

io of at least 100 per cent. The average ratio for

the past four quarters is 129.6 per cent.

Liqu

ity pool

The liqu

ity value of the Group’s LCR elig

ible l

iqu

ity pool at

the reporting date was $177 bill

ion. The ﬁgures

in the table

below account for haircuts, currency convertib

ity and

portabil

ity constra

ints, and therefore are not directly

comparable with the consolidated balance sheet. A liqu

ity

pool is held to offset stress outﬂows as deﬁned in the Liqu

ity

Coverage Ratio (CRR) part of the PRA rulebook.

2022

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Level 1 securit

ies

Cash and balances at central banks

34,101

1,066

36,522

71,689

Central banks, governments/public sector entit

ies

50,881

2,712

23,680

77,273

Multilateral development banks and internat

ional organ

isat

ions

3,510

837

10,843

15,190

Other

1,430

1,474

Total Level 1 securit

ies

88,529

4,622

72,475

165,626

Level 2A securit

ies

4,044

139

6,033

10,216

Level 2B securit

ies

1,103

1,195

Total LCR elig

ible assets

92,644

4,782

79,611

177,037

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Total

$mill

ion

Level 1 securit

ies

Cash and balances at central banks

28,076

890

46,973

75,939

Central banks, governments/public sector entit

ies

40,328

2,096

27,389

69,813

Multilateral development banks and internat

ional organ

isat

ions

7,812

356

7,366

15,534

Other

–

478

Total Level 1 securit

ies

76,216

3,342

82,206

161,764

Level 2A securit

ies

3,447

186

5,047

8,680

Level 2B securit

ies

114

–

1,620

1,734

Total LCR elig

ible assets

79,777

3,528

88,873

172,178

288

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Encumbrance

Encumbered assets

Encumbered assets represent on-balance sheet assets

pledged or subject to any form of arrangement to secure,

collateralise or credit enhance a transaction from which it

cannot be freely withdrawn. Cash collateral pledged against

derivat

ives and Hong Kong Government cert

icates of

indebtedness, which secure the equivalent amount of Hong

Kong currency notes in circulat

ion, are

included with

in Other

assets.

Unencumbered – readily available for encumbrance

Unencumbered assets that are considered by the Group to be

readily available in the normal course of business to secure

funding, meet collateral needs, or be sold to reduce potential

future funding requirements and are not subject to any

restrict

ions on the

ir use for these purposes.

Unencumbered – other assets capable of being encumbered

Unencumbered assets that, in their current form, are not

considered by the Group to be readily realisable in the normal

course of business to secure funding, meet collateral needs, or

be sold to reduce potential future funding requirements and

are not subject to any restrict

ions on the

ir use for these

purposes. Included with

in th

is category are loans and

advances which could be suitable for use in secured funding

structures such as securit

isat

ions.

Unencumbered – cannot be encumbered

Unencumbered assets that have not been pledged and

cannot be used to secure funding, meet collateral needs, or be

sold to reduce potential future funding requirements, as

assessed by the Group.

Derivat

ives, reverse repurchase assets and stock lend

ing

These assets are shown separately as these on-balance sheet

amounts cannot be pledged. However, these assets can give

rise to off-balance sheet collateral which can be used to raise

secured funding or meet addit

ional fund

ing requirements.

The following table provides a reconcil

iat

ion of the Group’s encumbered assets to total assets.

2022

Assets

$mill

ion

Assets encumbered as a result of

transactions with counterparties

other than central banks

Other assets (compris

ing assets encumbered at the central bank

and unencumbered assets)

As a result of

securit

isat

ions

$mill

ion

Other

$mill

ion

Total

$mill

ion

Assets

posit

ioned at

the central

bank

(ie pre-

posit

ioned

plus

encumbered)

$mill

ion

Assets not posit

ioned at the central bank

Readily

available for

encumbrance

$mill

ion

Other assets

that are

capable

of being

encumbered

$mill

ion

Derivat

ives

and reverse

repo/stock

lending

$mill

ion

Cannot be

encumbered

$mill

ion

Total

$mill

ion

Cash and balances

at central banks

58,263

–

9,166

49,097

–

58,263

Derivat

ive ﬁnancial

instruments

63,717

–

63,717

–

63,717

Loans and

advances to banks

64,449

–

163

–

27,735

11,048

24,932

571

64,286

Loans and

advances to

customers

357,730

–

4,635

–

274,695

65,035

13,365

353,095

Investment

securit

ies

206,240

–

16,989

222

152,962

31,550

–

4,517

189,251

Other assets¹

50,390

–

19,621

–

11,640

–

19,129

30,769

Current tax assets

503

–

503

Prepayments and

accrued income

3,149

–

1,753

–

1,396

3,149

Interests in

associates and

joint ventures

1,631

–

1,631

Goodwill and

intang

ible assets

5,869

–

5,869

Property, plant

and equipment

5,522

–

448

–

5,074

5,522

Deferred tax assets

834

–

834

Assets classif

ied

as held for sale

1,625

–

1,625

Total

819,922

–

41,408

9,388

229,794

331,134

153,684

54,514

778,514

Includes held at fair value through proﬁt or loss and amortised cost balances

Includes held at fair value through proﬁt or loss, fair value through other comprehensive income and amortised cost balances

289

Standard Chartered

– Annual Report 2022

Risk review and Capital review

2021

Assets

$mill

ion

Assets encumbered as a result of

transactions with counterparties

other than central banks

Other assets (compris

ing assets encumbered at the central bank

and unencumbered assets)

As a result of

securit

isat

ions

$mill

ion

Other

$mill

ion

Total

$mill

ion

Assets

posit

ioned

at the

central bank

(ie pre-

posit

ioned

plus

encumbered)

$mill

ion

Assets not posit

ioned at the central bank

Readily

available for

encumbrance

$mill

ion

Other assets

that are

capable of

being

encumbered

$mill

ion

Derivat

ives

and reverse

repo/stock

lending

$mill

ion

Cannot be

encumbered

$mill

ion

Total

$mill

ion

Cash and balances

at central banks

72,663

–

8,147

64,516

–

72,663

Derivat

ive ﬁnancial

instruments

52,445

–

52,445

–

52,445

Loans and

advances to banks

66,957

–

34,834

9,931

19,806

2,297

66,868

Loans and

advances to

customers

369,703

–

4,539

–

282,761

68,612

13,791

365,164

Investment

securit

ies

198,723

–

13,940

142,965

35,637

–

6,085

184,783

Other assets¹

49,958

–

16,501

–

13,140

–

20,317

33,457

Current tax assets

766

–

766

Prepayments and

accrued income

2,176

–

937

–

1,239

2,176

Interests in

associates and

joint ventures

2,147

–

2,147

Goodwill and

intang

ible assets

5,471

–

5,471

Property, plant

and equipment

5,616

–

448

–

5,168

5,616

Deferred tax assets

859

–

859

Assets classif

ied

as held for sale

334

–

334

Total

827,818

–

35,069

8,243

242,315

342,854

140,863

58,474

792,749

Includes held at fair value through proﬁt or loss and amortised cost balances

Includes held at fair value through proﬁt or loss, fair value through other comprehensive income and amortised cost balances

The Group received $123,759 mill

ion (31 December 2021: $117,408 m

ill

ion) as collateral under reverse repurchase agreements that

was elig

ible for repledg

ing; of this, the Group sold or repledged $44,628 mill

ion (31 December 2021: $57,879 m

ill

ion) under

repurchase agreements.

290

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Liqu

ity analysis of the Group’s balance sheet (audited)

Contractual maturity of assets and liab

ies

The following table presents assets and liab

ies by matur

ity groupings based on the remain

ing per

iod to the contractual

maturity date as at the balance sheet date on a discounted basis. Contractual maturit

ies do not necessar

ily reﬂect actual

repayments or cashﬂows.

With

in the tables below, cash and balances w

ith central banks, interbank placements and investment securit

ies that are fa

value through other comprehensive income are used by the Group princ

ipally for l

iqu

ity management purposes.

As at the reporting date, assets remain predominantly short-dated, with 61 per cent maturing in less than one year. The less

than three-month cumulative net funding gap improved by $22 bill

ion from the prev

ious year.

2022

One month

or less

$mill

ion

Between

one month

and three

months

$mill

ion

Between

three

months and

six months

$mill

ion

Between

six months

and nine

months

$mill

ion

Between

nine months

and one

year

$mill

ion

Between

one year

and two

years

$mill

ion

Between

two years

and ﬁve

years

$mill

ion

More than

ﬁve years

and

undated

$mill

ion

Total

$mill

ion

Assets

Cash and balances at

central banks

49,097

–

9,166

58,263

Derivat

ive ﬁnancial

instruments

15,558

12,030

8,352

4,446

3,602

6,026

8,410

5,293

63,717

Loans and advances

to banks

1,2

24,135

15,293

11,595

4,971

4,138

2,608

1,022

687

64,449

Loans and advances

to customers

1,2

96,351

58,605

27,751

12,540

13,444

19,150

33,413

96,476

357,730

Investment securit

ies¹

14,175

26,008

23,364

13,024

12,891

22,805

41,217

52,756

206,240

Other assets¹

15,210

31,276

1,341

181

698

20,705

69,523

Total assets

214,526

143,212

72,403

35,162

34,773

50,678

84,085

185,083

819,922

Liab

ies

Deposits by banks

1,3

29,733

2,042

2,245

871

349

1,432

144

36,823

Customer accounts

1,4

402,069

49,769

25,110

15,961

15,216

7,830

2,451

1,823

520,229

Derivat

ive ﬁnancial

instruments

15,820

15,810

8,645

5,002

4,102

6,795

7,904

5,784

69,862

Senior debt

204

342

509

963

711

5,855

19,673

12,086

40,343

Other debt securit

ies

in issue

2,758

5,504

8,732

7,316

2,935

1,088

870

268

29,471

Other liab

ies

19,857

24,725

1,616

521

503

902

1,043

10,296

59,463

Subordinated liab

ies and

other borrowed funds

2,004

105

248

1,882

2,045

7,384

13,715

Total liab

ies

472,445

98,297

46,879

30,882

23,841

25,784

34,130

37,648

769,906

Net liqu

ity gap

(257,919)

44,915

25,524

4,280

10,932

24,894

49,955

147,435

50,016

Loans and advances, investment securit

ies, other assets, depos

its by banks, customer accounts and debt securit

ies

in issue include ﬁnanc

ial

instruments held at

fair value through proﬁt or loss, see Note 13 Financ

ial

instruments (pages 376 to 378)

Loans and advances include reverse repurchase agreements and other sim

ilar secured lend

ing of $90 bill

ion

Deposits by banks include repurchase agreements and other sim

ilar secured borrow

ing of $7.0 bill

ion

4 Customer accounts include repurchase agreements and other sim

ilar secured borrow

ing of $46.8 bill

ion

Senior debt maturity proﬁles are based upon contractual maturity, which may be later than call options over the debt held by the Group

291

Standard Chartered

– Annual Report 2022

Risk review and Capital review

2021

One month

or less

$mill

ion

Between

one month

and three

months

$mill

ion

Between

three

months and

six months

$mill

ion

Between

six months

and nine

months

$mill

ion

Between

nine months

and one

year

$mill

ion

Between

one year

and two

years

$mill

ion

Between

two years

and ﬁve

years

$mill

ion

More than

ﬁve years

and

undated

$mill

ion

Total

$mill

ion

Assets

Cash and balances at

central banks

64,516

–

8,147

72,663

Derivat

ive ﬁnancial

instruments

11,695

10,489

7,332

3,583

2,731

4,738

6,493

5,384

52,445

Loans and advances

to banks

1,2

25,486

17,987

11,347

4,415

4,506

1,455

1,466

295

66,957

Loans and advances

to customers

1,2

92,181

68,361

26,276

13,255

14,992

21,391

36,299

96,948

369,703

Investment securit

ies¹

11,813

13,590

12,070

13,266

13,407

26,424

53,189

54,964

198,723

Other assets¹

24,283

19,776

989

491

21,654

67,327

Total assets

229,974

130,203

58,014

34,586

36,127

54,043

97,479

187,392

827,818

Liab

ies

Deposits by banks

1,3

34,858

1,134

1,244

408

477

116

206

38,447

Customer accounts

1,4

430,071

52,051

27,436

11,738

12,023

4,857

2,152

2,127

542,455

Derivat

ive ﬁnancial

instruments

11,715

11,573

7,254

4,061

2,788

5,042

7,117

3,849

53,399

Senior debt

190

642

1,036

320

397

5,336

15,225

11,845

34,991

Other debt securit

ies

in issue

2,233

12,968

7,786

3,118

3,281

782

1,411

320

31,899

Other liab

ies

14,545

22,582

2,044

1,148

1,180

797

990

14,059

57,345

Subordinated liab

ies and

other borrowed funds

1,007

240

894

2,430

2,593

9,394

16,646

Total liab

ies

494,619

101,014

46,824

21,033

21,040

19,360

29,694

41,598

775,182

Net liqu

ity gap

(264,645)

29,189

11,190

13,553

15,087

34,683

67,785

145,794

52,636

Loans and advances, investment securit

ies, other assets, depos

its by banks, customer accounts and debt securit

ies

in issue include ﬁnanc

ial

instruments held at

fair value through proﬁt or loss, see Note 13 Financ

ial

instruments (pages 376 to 378)

Loans and advances include reverse repurchase agreements and other sim

ilar secured lend

ing of $88.4 bill

ion

Deposits by banks include repurchase agreements and other sim

ilar secured borrow

ing of $7.1 bill

ion

4 Customer accounts include repurchase agreements and other sim

ilar secured borrow

ing of $58.6 bill

ion

Senior debt maturity proﬁles are based upon contractual maturity, which may be later than call options over the debt held by the Group

Behavioural maturity of ﬁnanc

ial assets and l

iab

ies

The cashﬂows presented in the previous section reﬂect the cashﬂows that will be contractually payable over the residual

maturity of the instruments. However, contractual maturit

ies do not necessar

ily reﬂect the tim

ing of actual repayments or

cashﬂow. In practice, certain assets and liab

ies behave d

ifferently from their contractual terms, especially for short-term

customer accounts, credit card balances and overdrafts, which extend to a longer period than their contractual maturity. On

the other hand, mortgage balances tend to have a shorter repayment period than their contractual maturity date. Expected

customer behaviour is assessed and managed on a country basis using qualitat

ive and quant

itat

ive techn

iques, includ

ing

analysis of observed customer behaviour over time.

292

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Maturity of ﬁnanc

ial l

iab

ies on an und

iscounted basis (audited)

The following table analyses the contractual cashﬂows payable for the Group’s ﬁnanc

ial l

iab

ies by rema

ing contractual

maturit

ies on an und

iscounted basis. The ﬁnanc

ial l

iab

ity balances in the table below will not agree with the balances reported

in the consolidated balance sheet as the table incorporates all contractual cashﬂows, on an undiscounted basis, relating to

both princ

ipal and

interest payments. Derivat

ives not treated as hedg

ing derivat

ives are

included in the ‘On demand’ time

bucket and not by contractual maturity.

With

in the ‘More than ﬁve years and undated’ matur

ity band are undated ﬁnanc

ial l

iab

ies, the majority of wh

ich relate to

subordinated debt, on which interest payments are not included as this informat

ion would not be mean

ingful, given the

instruments are undated. Interest payments on these instruments are included with

in the relevant matur

ies up to ﬁve years.

2022

One month

or less

$mill

ion

Between

one month

and three

months

$mill

ion

Between

three

months and

six months

$mill

ion

Between

six months

and nine

months

$mill

ion

Between

nine months

and one

year

$mill

ion

Between

one year

and two

years

$mill

ion

Between

two years

and ﬁve

years

$mill

ion

More than

ﬁve years

and

undated

$mill

ion

Total

$mill

ion

Deposits by banks

29,742

2,048

2,275

876

362

1,455

144

36,910

Customer accounts

401,893

49,196

24,713

15,614

15,283

8,280

5,937

2,591

523,507

Derivat

ive ﬁnancial

instruments

65,912

116

213

940

1,185

1,436

69,862

Debt securit

ies

in issue

3,060

5,912

9,631

8,574

3,979

7,844

22,259

18,465

79,724

Subordinated liab

ies and

other borrowed funds

2,097

165

273

2,029

2,610

14,004

21,250

Other liab

ies

17,275

25,751

1,517

504

496

895

901

9,669

57,008

Total liab

ies

519,979

83,120

38,192

25,957

20,361

21,443

33,036

46,173

788,261

2021

One month

or less

$mill

ion

Between

one month

and three

months

$mill

ion

Between

three

months and

six months

$mill

ion

Between six

months and

nine months

$mill

ion

Between

nine months

and one

year

$mill

ion

Between

one year

and two

years

$mill

ion

Between

two years

and ﬁve

years

$mill

ion

More than

ﬁve years

and

undated

$mill

ion

Total

$mill

ion

Deposits by banks

34,866

1,140

1,246

409

481

117

208

38,470

Customer accounts

430,190

52,112

27,510

11,813

12,120

4,930

2,212

2,495

543,382

Derivat

ive ﬁnancial

instruments

52,783

106

212

179

53,399

Debt securit

ies

in issue

2,526

13,618

9,015

3,586

3,891

6,743

17,966

17,659

75,004

Subordinated liab

ies and

other borrowed funds

1,114

134

261

928

2,546

3,030

16,044

24,105

Other liab

ies

17,759

22,460

1,952

1,133

1,170

797

990

9,955

56,216

Total liab

ies

539,238

89,473

39,793

17,214

18,696

15,209

24,618

46,335

790,576

Derivat

ives are on a d

iscounted basis

293

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Interest Rate Risk in the Banking Book

The following table provides the estimated impact to a

hypothetical base case project

ion of the Group’s earn

ings

under the following scenarios:

•

A 50 basis point parallel interest rate shock (up and down)

to the current market-impl

ied path of rates, across all y

ield

curves

•

A 100 basis point parallel interest rate shock (up) to the

current market-impl

ied path of rates, across all y

ield curves

These interest rate shock scenarios assume all other economic

variables remain constant. The sensit

ies shown represent

the estimated change to a hypothetical base case projected

net interest income (NII), plus the change in interest rate

impl

ied

income and expense from FX swaps used to manage

banking book currency posit

ions, under the d

ifferent interest

rate shock scenarios.

The base case projected NII is based on the current market-

impl

ied path of rates and forward rate expectat

ions. The NII

sensit

ies below stress th

is base case by a further 50 or

100bps. Actual observed interest rate changes will lag behind

market expectation. Accordingly, the shocked NII sensit

ity

does not represent a forecast of the Group’s net interest

income.

The interest rate sensit

ies are

ind

icat

ive stress tests and

based on simpl

iﬁed scenar

ios, estimat

ing the aggregate

impact of an unantic

ipated,

instantaneous parallel shock

across all yield curves over a one-year horizon, includ

ing the

time taken to implement changes to pric

ing before becom

ing

effective. The assessment assumes that the size and mix of

the balance sheet remain constant and that there are no

specif

ic management act

ions in response to the change in

rates. No assumptions are made in relation to the impact on

credit spreads in a changing rate environment.

Sign

iﬁcant modell

ing and behavioural assumptions are made

regarding scenario simpl

iﬁcation, market compet

ion,

pass-through rates, asset and liab

ity re-pric

ing tenors, and

price ﬂooring. The assumption that interest rates of all

currencies and maturit

ies sh

ift by the same amount

concurrently, and that no actions are taken to mit

igate the

impacts aris

ing from th

is are considered unlikely. Reported

sensit

ies w

ill vary over time due to a number of factors

includ

ing changes

in balance sheet composit

ion, customer

behaviour and risk management strategy, the interest rates

assumed in setting the base case and other market

condit

ions. Therefore, wh

ile the NII sensit

ies are a relevant

measure of the Group’s interest rate exposure, they should not

be considered an income or proﬁt forecast.

Estimated one-year impact to earnings from

a parallel shift in yield curves at the beginn

ing

of the period of:

2022

USD bloc

$mill

ion

HKD bloc

$mill

ion

SGD bloc

$mill

ion

KRW bloc

$mill

ion

CNY bloc

$mill

ion

Other

currency

bloc

$mill

ion

Total

$mill

ion

+ 50 basis points

150

370

- 50 basis points

(80)

(20)

(40)

(60)

(30)

(140)

(370)

+ 100 basis points

160

100

300

740

Estimated one-year impact to earnings from

a parallel shift in yield curves at the beginn

ing

of the period of:

2021

USD bloc

$mill

ion

HKD bloc

$mill

ion

SGD bloc

$mill

ion

KRW bloc

$mill

ion

CNY bloc

$mill

ion

Other

currency

bloc

$mill

ion

Total

$mill

ion

+ 50 basis points

200

150

140

660

- 50 basis points

(210)

(170)

(70)

(40)

(50)

(130)

(670)

+ 100 basis points

380

280

130

300

1,260

As at 31 December 2022, the Group estimates the one-year

impact of an instantaneous, parallel increase across all yield

curves of 50 basis points to increase projected NII by $370

mill

ion. The equ

ivalent impact from a parallel decrease of 50

basis points would result in a reduction in projected NII of $370

mill

ion. The Group est

imates the one-year impact of an

instantaneous, parallel increase across all yield curves of 100

basis points to increase projected NII by $740 mill

ion.

The beneﬁt from ris

ing

interest rates is primar

ily from

reinvest

ing at h

igher yields and from assets re-pric

ing faster

and to a greater extent than deposits. NII sensit

ity in all

scenarios has decreased versus 31 December 2021. The

change in NII sensit

ity reﬂects updates to the Group’s base

case scenario to factor in higher interest rates as at 31

December 2022. In addit

ion, NII sens

ies have reduced due

to the migrat

ion of the HKD mortgage book from HIBOR to

Prime rate, the dampening effect of USD hedging strategies

intended to provide short term income certainty and smooth

longer term NII volatil

ity, and due to changes

in modelling

assumptions to reﬂect expected re-pric

ing act

ity on Reta

and Transaction Banking current accounts and savings

accounts in the current interest rate environment.

294

Standard Chartered

– Annual Report 2022

Risk review

Risk proﬁle

Operational and Technology Risk

Operational and Technology Risk is deﬁned as the “Potential

for loss from inadequate or failed internal processes,

technology events, human error, or from the impact of

external events (includ

ing legal r

isks)”. The Group can be

impacted from a range of operational risks which are inherent

in the Group’s strategy and business model.

Operational and Technology Risk proﬁle

Risk management practices help the business grow safely and

ensures governance and management of Operational and

Technology Risk through the delivery and embedding of

effective frameworks and polic

ies, together w

ith continuous

oversight and assurance.

The Group continues to ensure the operational and

technology risk framework supports the business and

functions in effectively managing risk and controls with

in r

isk

appetite to meet their strategic object

ives.

Overall, the Group’s Operational Risk proﬁle has remained

stable with the quality of risk understanding and ident

iﬁcation

improv

ing. Operat

ional and Technology Risks remain

heightened in areas such as Fraud, Data Management, and

Information and Cyber Security. Other focus risk areas are

Third Party Risk,

Technology Risk, People Risk and Change Management. The

Group continues to enhance its operational resil

ience and

defences against these risks, as well as continue to monitor

impacts of the ongoing pandemic, through vigorous

enhancement programmes.

Dig

ital

isat

ion and w

ider technological improvements remain

a key focus for the Group, to keep pace with new business

developments whilst ensuring control frameworks and Risk

Appetite evolve accordingly.

Operational resil

ience

In line with regulatory expectations, the Standard Chartered

PLC Board has approved the Group’s Important Business

Services, Impact Tolerance Statements and the Operational

Resil

ience self-assessment. By 31 March 2025, the author

ies

expect the Group to complete mapping, continue scenario

testing to ident

ify vulnerab

ies, remediate ident

iﬁed

vulnerabil

ies, and embed sustainable governance, assurance

and testing.

Operational Risk events and losses

Operational losses are one ind

icator of the effect

iveness and

robustness of the non-ﬁnancial r

isk control environment.

The Group’s proﬁle of operational loss events in 2022 and 2021

is summarised in the table below. It shows the percentage

distr

ibut

ion of gross operational losses by Basel business line.

Distr

ibut

ion of Operational Losses by Basel business line

% Loss

2022

2021¹

Agency Services

2.6%

0.6%

Asset Management

0.2%

0.0%

Commercial Banking

9.2%

3.1%

Corporate Finance

0.0%

2.9%

Corporate Items

3.8%

41.6%

Payment and Settlements

45.0%

32.9%

Retail Banking

24.1%

12.6%

Retail Brokerage

0.0%

Trading and Sales

15.1%

6.3%

Losses in 2021 have been restated to include incremental events recognised in 2022

The Group’s proﬁle of operational loss events in 2022 and 2021 is also summarised by Basel event type in the table below. It

shows the percentage distr

ibut

ion of gross operational losses by Basel event type.

Distr

ibut

ion of Operational Losses by Basel event type

% Loss

2022

2021¹

Business disrupt

ion and system fa

ilures

4.5%

0.3%

Clients products and business practices

6.9%

3.1%

Damage to physical assets

0.0%

Employment practices and workplace safety

0.1%

0.0%

Execution delivery and process management

79.4%

87.6%

External fraud

8.1%

8.8%

Internal fraud

1.0%

0.2%

Losses in 2021 have been restated to include incremental events recognised in 2022

Other princ

ipal r

isks

Losses aris

ing from operat

ional failures for other princ

ipal and

integrated risks are reported as operational losses. Operational

losses do not include Operational Risk-related credit impa

irments.

295

Standard Chartered

— Annual Report 2022

Risk review and Capital review

Enterprise Risk Management Framework

Effective risk management is essential in deliver

ing cons

istent and

sustainable performance for all our stakeholders and is a central part of

the ﬁnancial and operat

ional management of the Group. The Group

adds value to clients and the communit

ies

in which they operate by

taking and managing appropriate levels 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

ive

of maxim

ing risk-adjusted returns while remain

ing w

ith

in our

Risk Appetite. The ERMF has been designed with the explic

goal of improv

ing the Group’s r

isk management, and since its

launch in January 2018, it has been embedded across the

Group and rolled out to its branches and subsid

iar

ies

The ERMF is reviewed annually and the latest version is

effective from January 2023.

Risk culture

The Group’s risk culture provides guid

ing pr

inc

iples for the

behaviours expected from our people when managing risk.

The Board has approved a risk culture statement that

encourages the following behaviours and outcomes:

•

An enterprise-level abil

ity to

ident

ify and assess current and

future risks, openly discuss these and take prompt actions.

•

The highest level of integr

ity by be

ing transparent and

proactive in disclos

ing and manag

ing all types of risks.

•

A constructive and collaborative approach in provid

ing

oversight and challenge, and taking decis

ions

in a timely

manner.

•

Everyone to be accountable for their decis

ions and feel safe

in using their judgement to make these considered

decis

ions.

We acknowledge that banking inherently involves risk-taking

and undesired outcomes will occur from time to time; however,

we shall take the opportunity to learn from our experience

and formalise what we can do to improve. We expect

managers to demonstrate a high awareness of risk and

control by self-ident

ify

ing issues and managing them in a

manner that will deliver lasting change.

Strategic risk management

The Group approaches strategic risk management as follows:

•

By conducting an impact analysis on the risk proﬁle from

growth plans, strategic in

iat

ives and

business model vulnerabil

ies, with

the aim of proactively ident

ify

ing and

managing new risks or exist

ing r

isks

that need to be reprior

ised as part of

the strategy review process.

•

By conﬁrming that growth plans and

strategic in

iat

ives can be del

ivered

with

in the approved R

isk Appetite and/or proposing

addit

ional R

isk Appetite for Board considerat

ion as part of

the strategy review process.

•

By validat

ing the Corporate Plan aga

inst the approved or

proposed Risk Appetite Statement to the Board. The Board

approves the strategy review and the ﬁve-year Corporate

Plan with a conﬁrmat

ion from the Group Ch

ief Risk Ofﬁcer

(GCRO) that it is aligned with the ERMF and the Group Risk

Appetite Statement where project

ions allow.

•

Country Risk management approach and Country Risk

reviews are used to ensure the country lim

its and exposures

are reasonable and in line with Group strategy, country

strategy, and the operating environment, consider

ing the

ident

iﬁed r

isks.

Roles and responsib

ies

Senior Managers Regime

Roles and responsib

ies under the ERMF are al

igned to the

objectives of the Sen

ior Managers Regime. The GCRO is

responsible for the overall development and maintenance of

the Group’s ERMF and for ident

ify

ing material risk types to

which the Group may be potentially exposed. The GCRO

delegates effective implementat

ion of the R

isk Type

Frameworks (RTFs) to Risk Framework Owners who provide

second line of defence oversight for the Princ

ipal R

isk Types

(PRTs). In addit

ion, the GCRO has been formally

ident

iﬁed as

the relevant senior manager responsible for the development

of the Group’s Dig

ital Asset R

isk Assessment Approach, as well

as the senior manager responsible for Climate Risk

management as it relates to ﬁnanc

ial and non-ﬁnancial r

isks

to the Group aris

ing from cl

imate change. This does not

include elements of corporate social responsib

ity, the Group’s

contribut

ion to cl

imate change and the Sustainable Finance

strategy supporting a low-carbon transit

ion, wh

ich are the

responsib

ity of other relevant senior managers.

Risk ident

iﬁcation

Group

strategy

Stress testing

Risk Appetite

The Group’s Risk Management Framework and System of Internal Control applies only to wholly controlled subsid

iar

ies of the Group, and not to Associates,

Joint Ventures or Structured Entit

ies of the Group.

Senior managers refer to ind

iduals designated as senior management functions under the FCA and PRA Senior Managers Regime (SMR).

296

Standard Chartered

— Annual Report 2022

Risk review

Risk management approach

The Risk function

The Risk function is responsible for the sustainab

ity of our

business through good management of risk across the Group

by provid

ing overs

ight and challenge, thereby ensuring that

business is conducted in line with regulatory expectations.

The GCRO directly manages the Risk function, which is

separate and independent from the orig

inat

ion, trading and

sales functions of the businesses. The Risk function is

responsible for:

•

Mainta

ing the ERMF, ensuring that it remains relevant and

appropriate to the Group’s business activ

ies, and is

effectively communicated and implemented across the

Group, and admin

ister

ing related governance and

reporting processes.

•

Upholding the overall integr

ity of the Group’s r

isk and return

decis

ions to ensure that r

isks are properly assessed, that

these decis

ions are made transparently on the bas

is of

proper assessments and that risks are controlled in

accordance with the Group’s standards and Risk Appetite

•

Overseeing and challenging the management of Princ

ipal

Risk Types and Integrated Risk Types under the ERMF.

The independence of the Risk function ensures that the

necessary balance in making risk and return decis

ions

is not

compromised by short-term pressures to generate revenues.

In addit

ion, the R

isk function is a centre of excellence that

provides special

ist capab

ies relevant to risk management

processes in the broader organisat

ion.

The Risk function supports the Group’s commitment to be

here for good by build

ing a susta

inable framework that

places regulatory and compliance standards and a culture of

appropriate conduct at the forefront of the Group’s agenda,

in a manner proportionate to the nature, scale and complexity

of the Group’s business.

Conduct, Financ

ial Cr

ime and Compliance (CFCC), under the

Management Team leadership of the Group Head, CFCC,

works alongside the Risk function with

in the framework of the

ERMF to deliver a unif

ied second l

ine of defence.

Three lines of defence model

Roles and responsib

ies for r

isk management are deﬁned

under a three lines of defence model. Each line of defence has

a specif

ic set of respons

ies for r

isk management and

control, as shown in the table below.

Lines of defence

Deﬁnit

ion

Key responsib

ies

include

The businesses and functions engaged in or

supporting revenue-generating activ

ies that

own and manage the risks

•

Propose the risks required to undertake revenue-generating

activ

ies

•

Identify, assess, monitor and escalate risks and issues to the

second line and senior management and promote a healthy

risk culture and good conduct

•

Validate and self-assess compliance to RTFs and polic

ies,

conﬁrm the quality of validat

ion, and prov

ide evidence-based

afﬁrmation to the second l

ine

•

Manage risks with

in R

isk Appetite, set and execute

remediat

ion plans and ensure laws and regulat

ions are being

complied with

•

Ensure systems meet risk data aggregation, risk reporting and

data quality requirements set by the second line.

The control functions independent of the ﬁrst

line that provide oversight and challenge of risk

management to provide conﬁdence to the

GCRO, senior management

and the Board

•

Identify, monitor and escalate risks and issues to the GCRO,

senior management and the Board and promote a healthy

risk culture and good conduct

•

Oversee and challenge ﬁrst-line risk-taking activ

ies and

review ﬁrst-line risk proposals

•

Propose Risk Appetite to the Board, monitor and report

adherence to Risk Appetite and intervene to curtail business if

it is not in line with an exist

ing or adjusted R

isk Appetite, there

is material non-compliance with policy requirements, or when

operational controls do not effectively manage risk

•

Set risk data aggregation, risk reporting and data quality

requirements

•

Ensure that there are appropriate controls to comply with

applicable laws and regulations, and escalate sign

iﬁcant

non-compliance matters to senior management and the

appropriate committees.

The Internal Audit function provides

independent assurance on the effectiveness of

controls that support ﬁrst line’s risk management

of business activ

ies, and the processes

mainta

ined by the second l

ine

•

Independently assess whether management has ident

iﬁed

the key risks in the businesses and whether these are reported

and governed in line with the established risk management

processes

•

Independently assess the adequacy of the design of controls

and their operating effectiveness.

297

Standard Chartered

— Annual Report 2022

Risk review and Capital review

Risk Appetite and proﬁle

We recognise the following constraints which determine the

risks that we are will

ing to take

in pursuit of our strategy and

the development of a sustainable business:

•

Risk capacity

is the maximum level of risk the Group can

assume, before breaching constraints determined by

capital and liqu

ity requirements and internal operational

environment, or otherwise fail

ing to meet the expectat

ions

of regulators and law enforcement agencies.

•

Risk Appetite

is deﬁned by the Group and approved by the

Board. It is the maximum amount and type of risk the Group

is will

ing to assume

in pursuit of its strategy. Risk Appetite

cannot exceed risk capacity.

The Board is responsible for approving the Risk Appetite

Statement, which is underpinned by a set of ﬁnanc

ial and

operational control parameters known as Risk Appetite

metrics and their associated thresholds. These directly

constrain the aggregate risk exposures that can be taken

across the Group.

The Group Risk Appetite is reviewed at least on an annual

basis to ensure that it is ﬁt for purpose and aligned with

strategy, and focus is given to emerging or new risks. The Risk

Appetite Statement is supplemented by an overarching

statement outlin

ing the Group’s R

isk Appetite princ

iples.

Risk Appetite princ

iples

The Group Risk Appetite is deﬁned in accordance with risk

management princ

iples that

inform our overall approach to

risk management and our risk culture. We follow the highest

ethical standards and ensure a fair outcome for our clients, as

well as facil

itat

ing the effective operation of ﬁnanc

ial markets,

while at the same time meeting the expectations of

regulators and law enforcement agencies. We set our Risk

Appetite to enable us to grow sustainably and to avoid shocks

to earnings or our general ﬁnanc

ial health, as well as manage

our Reputational Risk in a way that does not materially

undermine the conﬁdence of our investors and all internal and

external stakeholders.

Risk Appetite Statement

The Group will not compromise adherence to its Risk Appetite

in order to pursue revenue growth or higher returns. The Group

Risk Appetite is supplemented by risk control tools such as

granular level lim

its, pol

ies, standards and other operat

ional

control parameters that are used to keep the Group’s risk

proﬁle with

in R

isk Appetite. The Group’s risk proﬁle is its overall

exposure to risk at a given point in time, covering all applicable

risk types. Status against Risk Appetite is reported to the

Board, Board Risk Committee and the Group Risk Committee,

includ

ing the status of breaches and remed

iat

ion plans where

applicable. To keep the Group’s risk proﬁle with

in R

isk Appetite

(and therefore also risk capacity), we have cascaded crit

ical

Group Risk Appetite metrics across our Princ

ipal R

isk Types to

our footprint markets with sign

iﬁcant bus

iness operations.

Risk ident

iﬁcation and assessment

Identif

icat

ion and assessment of potentially adverse risk

events is an essential ﬁrst step in managing the risks of any

business or activ

ity. To ensure cons

istency in communicat

ion,

we use Princ

ipal R

isk Types to classify our risk exposures.

Nevertheless, we also recognise the need to mainta

in a

holist

ic perspect

ive since a single transaction or activ

ity may

give rise to multiple types of risk exposure; risk concentrations

may arise from multiple exposures that are closely correlated;

and a given risk exposure may change its form from one risk

type to another. There are also sources of risk that arise

beyond our own operations, such as the Group’s dependency

on suppliers for the provis

ion of serv

ices and technology.

As the Group remains accountable for risks aris

ing from the

actions of such third-parties, failure to adequately monitor

and manage these relationsh

ips could mater

ially impact the

Group’s abil

ity to operate and could have an

impact on our

abil

ity to cont

inue to provide services that are material to the

Group.

To facil

itate r

isk ident

iﬁcation and assessment, the Group

mainta

ins a dynam

ic risk-scanning process with inputs on the

internal and external risk environment, as well as potential

threats and opportunit

ies from the bus

iness and client

perspectives. The Group mainta

ins a taxonomy of the

Princ

ipal R

isk Types, Integrated Risk Types and risk sub-types

that are inherent to the strategy and business model; as well

as Topical and Emerging Risks (TERs) inventory that includes

near-term as well as longer-term uncertaint

ies. Near-term r

isks

are those that are on the horizon and can be measured and

mit

igated to some extent, wh

ile uncertaint

ies are longer-term

matters that should be on the radar but are not yet fully

measurable.

The GCRO and the Group Risk Committee review regular

reports on the risk proﬁle for the Princ

ipal R

isk Types,

adherence to the approved Risk Appetite and the Group risk

inventory includ

ing emerg

ing risks and uncertaint

ies. They use

this informat

ion to escalate mater

ial developments in each

risk event and make recommendations to the Board annually

on any potential changes to our Corporate Plan.

Stress testing

The objective of stress test

ing is to support the Group in

assessing that it:

•

does not have a portfolio with excessive risk concentration

that could produce unacceptably high losses under severe

but plausible scenarios

•

has sufﬁcient ﬁnancial resources to w

ithstand severe but

plausible scenarios

•

has the ﬁnancial ﬂex

ity to respond to extreme but

plausible scenarios; and

•

understands the Group’s key business model risks and

considers what kind of event might crystallise those risks -

even if extreme with a low likel

ihood of occurr

ing - and

ident

iﬁes as requ

ired, actions to mit

igate the l

ikel

ihood or

impact of those events

Enterprise stress tests incorporate Capital and Liqu

ity

Adequacy Stress Tests, includ

ing

in the context of capital

adequacy, recovery and resolution, and stress tests that

assess scenarios where our business model becomes

challenged, such as the Bank of England (BoE) Bienn

ial

Exploratory Scenario, or unviable, such as reverse stress tests.

Stress tests are performed at the Group, country, business and

portfolio level under a wide range of risks and at varying

degrees of severity. Unless set by the BoE, scenario design is a

bespoke process that aims to explore risks that can adversely

impact the Group.

298

Standard Chartered

— Annual Report 2022

Risk review

Risk management approach

The Board delegates approval of stress test submiss

ions to the

BoE to the Board Risk Committee, which reviews the

recommendations from the Group Risk Committee.

Based on the stress test results, the Group Chief Financ

ial

Ofﬁcer and Group Chief Risk Ofﬁcer can recommend strategic

actions to the Board to ensure that the Group strategy

remains with

in the Board-approved R

isk Appetite.

Princ

ipal R

isk Types

Princ

ipal R

isk Types are those risks that are inherent in our

strategy and business model and have been formally deﬁned

in the Group’s ERMF. These risks are managed through dist

inct

RTFs which are approved by the Group Chief Risk Ofﬁcer.

The Princ

ipal R

isk Types and associated Risk Appetite

Statements are approved by the Board.

The Group currently recognises Climate Risk, Dig

ital Asset R

isk

and Third-Party Risk as Integrated Risk Types. Climate Risk is

deﬁned as “the potential for ﬁnanc

ial loss and non-ﬁnancial

detriments aris

ing from cl

imate change and society’s

response to it”; Dig

ital Asset R

isk is deﬁned as “the potential

for regulatory penalties, ﬁnanc

ial loss and or reputat

ional

damage to the Group resulting from dig

ital asset exposure or

dig

ital asset related act

ies aris

ing from the Group’s Cl

ients,

Products and Projects” and Third-Party Risk is deﬁned as “the

potential for loss or adverse impact from failure to manage

multiple risks aris

ing from the use of th

ird parties, and is the

aggregate of these risks.”

In future reviews, we will continue to consider if exist

ing

Princ

ipal R

isk Types or incremental risks should be treated as

Integrated Risk Types. The table below shows the Group’s

current Princ

ipal R

isk Types.

Princ

ipal R

isk Types

Deﬁnit

ion

Credit Risk

•

Potential for loss due to the failure of a counterparty to meet its agreed obligat

ions to pay

the Group.

Traded Risk

•

Potential for loss resulting from activ

ies undertaken by the Group in ﬁnanc

ial markets.

Treasury Risk

•

Potential for insuff

ient capital, liqu

ity or funding to support our operations, the risk of

reductions in earnings or value from movements in interest rates impact

ing bank

ing book

items and the potential for losses from a shortfall in the Group’s pension plans.

Operational and Technology Risk

•

Potential for loss resulting from inadequate or failed internal processes, technology events,

human error, or from the impact of external events (includ

ing legal r

isks).

Information and Cyber Security Risk

•

Risk to the Group’s assets, operations and ind

iduals due to the potential for unauthorised

access, use, disclosure, disrupt

ion, mod

icat

ion, or destruction of informat

ion assets and/or

informat

ion systems.

Compliance Risk

•

Potential for penalties or loss to the Group or for an adverse impact to our clients,

stakeholders or to the integr

ity of the markets we operate

in through a failure on our part to

comply with laws or regulations.

Financ

ial Cr

ime Risk

•

Potential for legal or regulatory penalties, material ﬁnanc

ial loss or reputat

ional damage

resulting from the failure to comply with applicable laws and regulations relating to

internat

ional sanct

ions, anti-money laundering, anti-bribery and corruption, and fraud.

Model Risk

•

Potential loss that may occur as a consequence of decis

ions or the r

isk of mis-estimat

ion that

could be princ

ipally based on the output of models, due to errors

in the development,

implementat

ion or use of such models.

Reputational and Sustainab

ity Risk

•

Potential for damage to the franchise (such as loss of trust, earnings or market capital

isat

ion),

because of stakeholders taking a negative view of the Group through actual or perceived

actions or inact

ions,

includ

ing a fa

ilure to uphold responsible business conduct or lapses in

our commitment to do no sign

iﬁcant env

ironmental and social harm through our client,

third-party relationsh

ips, or our own operat

ions.

ERMF effectiveness reviews

The GCRO is responsible for annually afﬁrm

ing the

effectiveness of the ERMF to the Board Risk Committee. An

ERMF effectiveness review was established in 2018 to facil

itate

this afﬁrmat

ion, wh

ich follows the princ

iple of ev

idence-based

self-assessments for all the Risk Type Frameworks and relevant

polic

ies. A top-down rev

iew and challenge of the results is

conducted by the GCRO with all Risk Framework Owners and

an opin

ion on the

internal control environment is provided by

Group Internal Audit.

The ERMF effectiveness review is conducted annually and

enables measurement of progress against the 2018 baseline.

The key outcomes of the 2022 effectiveness review are:

•

The focus in 2022 continued on the effective embedding of

the framework across the organisat

ion.

•

While the more mature ﬁnanc

ial r

isks continued to be more

effectively managed, the Group continues to make progress

in embedding the non-ﬁnanc

ial r

isk management

•

Other aspects of the ERMF, includ

ing the key r

isk

committees and key supporting standards, are established.

•

Self-assessments performed in our footprint markets reﬂect

the embeddedness of ERMF adoption with an emphasis on

ﬁrst-line ownership of risks. Country and regional risk

committees continue to play an active role in managing

and overseeing material issues aris

ing

in countries.

Ongoing ERMF effectiveness reviews allow for a structured

approach to ident

ify

improvement opportunit

ies and bu

ild

plans to address them. Over the course of 2023, the Group

aims to further strengthen its risk management practices by

further improv

ing on the management of non-ﬁnancial r

isks

and integrated risks with

its businesses, functions and across

the footprint.

Executive and Board risk oversight

Overview

The Board has ultimate responsib

ity for risk management

and is supported by ﬁve core Board-level committees. The

Board approves the ERMF based on the recommendation

from the Board Risk Committee, which also recommends the

Group Risk Appetite Statement for all Princ

ipal R

isk Types. In

addit

ion, the Culture and Susta

inab

ity Committee oversees

the Group’s culture and key sustainab

ity prior

ies.

299

Standard Chartered

— Annual Report 2022

Risk review and Capital review

Board and Executive level risk committee governance structure

The Committee governance structure below presents the view as of 2022.

Group Asset and Liab

ity Committee

Group Risk Committee

Board of Directors

Board Risk

Committee

Governance

and

Nominat

ion

Committee

Culture and

Sustainab

ity

Committee

Remuneration

Committee

Audit

Committee

Group Non-Financ

ial R

isk Committee

Group Financ

ial Cr

ime Risk Committee

Group Responsib

ity and Reputational Risk Committee

IFRS 9 Impairment Committee

Model Risk Committee

Corporate, Commercial and Institut

ional Bank

ing Risk Committee

Consumer, Private and Business Banking Risk Committee

Asia Risk Committee

Africa and Middle East Risk Committee

Investment Committee

Investment Committee for Transportation Assets

Standard Chartered Ventures Committee

Regulatory Interpretation Committee

Climate Risk Management Committee

Dig

ital Assets R

isk Committee

The committee governance structure ensures that

risk-taking authority and risk management polic

ies are

cascaded down from the Board to the appropriate

functional, client segment and country-level senior

management and committees. Information regarding

material risk issues and compliance with polic

ies and

standards is communicated to the appropriate country,

client segment, functional and Group-level senior

management and committees.

Board level committees

Executive level committees

Asia Risk Committee derives authority from both the Group Risk Committee (for oversight of the Asia region) and the Executive Committee of Standard

Chartered Bank (Hong Kong) Lim

ited (“SCBHK”) for overs

ight of SCBHK Group.

300

Standard Chartered

— Annual Report 2022

Risk review

Risk management approach

Group Risk Committee

The Group Risk Committee, which derives its authority from

the GCRO, is responsible for ensuring the effective

management of risk throughout the Group in support of the

Group’s strategy. The GCRO chairs the Group Risk Committee,

whose members are drawn from the Group’s Management

Team. The Committee oversees the effective implementat

ion

of the ERMF for the Group, includ

ing the delegat

ion of any

part of its authorit

ies to appropr

iate ind

iduals or properly

constituted sub-committees.

Group Risk Committee sub-committees

The Group Non-Financ

ial R

isk Committee, chaired by the

Global Head, Risk Functions and Operational Risk, governs the

non-ﬁnancial r

isks across clients, businesses, products and

functions. The Committee also reviews the adequacy of the

internal control system across all Princ

ipal R

isk Types.

The Group Financ

ial Cr

ime Risk Committee, chaired by the

Group Head, Conduct, Financ

ial Cr

ime and Compliance,

governs the Financ

ial Cr

ime Risk Type (excluding Fraud Risk

and Secondary Reputational Risk that is consequential in

nature aris

ing from r

isks pertain

ing to F

inanc

ial Cr

ime Risk)

across the Group. The Committee ensures that the Financ

ial

Crime Risk proﬁle is managed with

in approved R

isk Appetite

and polic

ies.

The Group Responsib

ity and Reputational Risk Committee,

chaired by the Group Head, Conduct, Financ

ial Cr

ime and

Compliance, ensures the effective management of

Reputational and Sustainab

ity Risk across the Group. This

includes provid

ing overs

ight of matters aris

ing from cl

ients,

products, transactions and strategic coverage-related

decis

ions and matters escalated by the respect

ive Risk

Framework Owners.

The IFRS 9 Impairment Committee, co-chaired by the Global

Head Enterprise Risk Management and Group Head, Central

Finance, ensures the effective management of the expected

credit loss computations as well as stage allocation of

ﬁnancial assets for quarterly ﬁnancial report

ing with

in the

authorit

ies set by the Group R

isk Committee.

The Model Risk Committee, chaired by the Global Head,

Enterprise Risk Management, ensures the effective

measurement and management of Model Risk in line with

internal polic

ies and Model R

isk Appetite.

The Corporate, Commercial and Institut

ional Bank

ing (CCIB)

Risk Committee, chaired by the Chief Risk Ofﬁcer, CCIB and

Europe & Americas, ensures the effective management of risk

throughout CCIB and Europe & Americas, in support of the

Group’s strategy.

The Consumer, Private and Business Banking (CPBB) Risk

Committee, chaired by the Chief Risk Ofﬁcer, CPBB, ensures

the effective management of risk throughout CPBB in support

of the Group’s strategy.

The Asia Risk Committee and the Africa and Middle East Risk

Committee are chaired by the Chief Risk Ofﬁcer for the

respective region. These ensure the effective management of

risk in the regions in support of the Group’s strategy.

The Investment Committee, chaired by a representative of the

Risk function,

ensures the optim

ised w

ind-down of the Group’s

exist

ing d

irect investment activ

ies in equit

ies, quas

i-equit

ies

(excluding mezzanine), funds and other alternative

investments (excluding debt/debt-like instruments) as well as

equity or quasi-equity stake obtained as a result of

restructuring of distressed debt, non-core equit

ies and l

ited

partner investments in funds linked to CCIB and managed by

Credit and Portfolio Management.

The Investment Committee for Transportation Assets, chaired

by the Chief Risk Ofﬁcer, CCIB and Europe & Americas or

Global Head, Credit and Portfolio Management, CCIB ensures

the optim

isat

ion of the Group’s investment in aviat

ion

operating lease assets with the aim of deliver

ing better

returns through the cycle and wind down of shipp

ing

operating lease assets.

The SC Ventures (SCV) Risk Committee, chaired by the Chief

Risk Ofﬁcer, SCV, receives authority directly from the GCRO

and oversees the effective management of risk throughout

SCV and the ind

idual entit

ies operat

ing under SCV.

The Climate Risk Management Committee, chaired by the

Global Head, Enterprise Risk Management, oversees the

effective implementat

ion of the Group’s Cl

imate Risk

workplan. This includes relevant regulatory requirements and

covers Climate Risk related ﬁnanc

ial and non-ﬁnancial r

isks.

The Regulatory Interpretation Committee, co-chaired by the

Global Head Enterprise Risk Management and Group Head,

Central Finance, provides oversight of material regulatory

interpretat

ions for the Cap

ital Requirements Regulation (as

amended by UK legislat

ion), the PRA rulebook and other

relevant regulations impact

ing Group regulatory cap

ital

calculations and reporting. The areas and risk types in scope

are credit risk, traded risk, operational risk, large exposures

and leverage ratio.

The Dig

ital Assets R

isk Committee, chaired by the Global

Head, Enterprise Risk Management, ensures effective

management of Dig

ital Assets (DA) related r

isks across the

Group. This includes provid

ing overs

ight of DA risk related

matters aris

ing from projects, products and cl

ients and third

parties in relation to the DA services that they will be provid

ing

to any of the Businesses.

Group Asset and Liab

ity Committee

The Group Asset and Liab

ity Committee is chaired by the

Group Chief Financ

ial Ofﬁcer. Its members are drawn

princ

ipally from the Management Team. The Comm

ittee is

responsible for determin

ing the Group’s approach to balance

sheet strategy and recovery planning. The Committee is also

responsible for ensuring that, in executing the Group’s

strategy, the Group operates with

in the

internally approved

Risk Appetite and external requirements relating to capital,

loss-absorbing capacity, liqu

ity, leverage, Interest Rate Risk

in the Banking Book, Banking Book Basis Risk and Structural

Foreign Exchange Risk, as well as monitor

ing the structural

impact of decis

ions around susta

inable ﬁnance, net zero and

climate risk. The Committee is also responsible for ensuring

that internal and external recovery planning requirements

are met.

301

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Princ

ipal r

isks

We manage and control our Princ

ipal R

isk Types

through dist

inct R

isk Type Frameworks, polic

ies

and Board-approved Risk Appetite.

The Group deﬁnes Credit Risk as the potential for loss

due to the failure of a counterparty to meet its agreed

obligat

ions to pay the Group.

Risk Appetite Statement

The Group manages its credit exposures following

the princ

iple of d

ivers

iﬁcation across products,

geographies, client segments and industry sectors.

Roles and responsib

ies

The Credit Risk Type Frameworks for the Group are set and

owned by the Chief Risk Ofﬁcers for the business segments.

The Credit Risk function is the second-line control function

responsible for independent challenge, monitor

ing and

oversight of the Credit Risk management practices of the

business and functions engaged in or supporting revenue-

generating activ

ies which constitute the ﬁrst line of defence.

In addit

ion, they ensure that cred

it risks are properly assessed

and transparent; and that credit decis

ions are controlled

accordance with the Group’s Risk Appetite, credit polic

ies and

standards.

Mit

igat

ion

Segment-specif

ic pol

ies are

in place for the management of

Credit Risk. The Credit Policy for CCIB Client Coverage sets the

princ

iples that must be followed for the end-to-end cred

process, includ

ing cred

it in

iat

ion, cred

it grading, credit

assessment, product structuring, Credit Risk mit

igat

ion,

monitor

ing and control, and documentat

ion.

The CPBB Credit Risk Management Policy sets the princ

iples

for the management of CPBB segments, that must be

followed for end-to-end credit process includ

ing cred

iat

ion, cred

it assessment and monitor

ing for lend

ing to

these segments.

The Group also sets out standards for the elig

ity,

enforceabil

ity and effect

iveness of Credit Risk mit

igat

ion

arrangements. Potential credit losses from a given account,

client or portfolio are mit

igated us

ing a range of tools, such as

collateral, netting agreements, credit insurance, credit

derivat

ives and guarantees.

Risk mit

igants are also carefully assessed for the

ir market

value, legal enforceabil

ity, correlat

ion and counterparty risk of

the protection provider.

Collateral must be valued prior to drawdown and regularly

thereafter as required, to reﬂect current market condit

ions, the

probabil

ity of recovery and the per

iod of time to realise the

collateral in the event of liqu

idat

ion. The Group also seeks to

divers

ify

its collateral holdings across asset classes and

markets.

Where guarantees, credit insurance, standby letters of credit

or credit derivat

ives are used as Cred

it Risk mit

igat

ion, the

creditworth

iness of the protect

ion provider is assessed and

monitored using the same credit approval process applied to

the obligor.

Governance committee oversight

At Board level, the Board Risk Committee oversees the

effective management of Credit Risk among other risks with

the bank. At the executive level, the Group Risk Committee

(GRC) oversees and appoints sub-committees for the

management of all risk types includ

ing Cred

it Risk – in

particular the Corporate, Commercial and Institut

ional

Banking Risk Committee, (CCIBRC), Consumer, Private and

Business Banking Risk Committee (CPBBRC), and the regional

risk committees for Asia, and Africa & Middle East. The GRC

also receives reports from other key Group Committees such

as the Standard Chartered Bank Executive Risk Committee

(which cover Credit risk as well).

These committees are responsible for overseeing all Risk

proﬁles includ

ing Cred

it Risk of the Group with

in the respect

ive

business areas and regions. Meetings are held regularly, and

the committees monitor all material Credit Risk exposures, as

well as key internal developments and external trends, and

ensure that appropriate action is taken.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Credit Risk Type Frameworks are the formal mechanism

by which delegate Credit Risk authorit

ies cascad

ing from the

GCRO, as the Senior Manager of the Credit Risk Type, to

ind

iduals such as the business segments’ Chief Risk Ofﬁcers.

Named ind

iduals further delegate credit authorit

ies to

ind

idual credit ofﬁcers based on risk-adjusted scales by

customer type or portfolio.

Credit Risk authorit

ies are rev

iewed at least annually to ensure

that they remain appropriate. In CCIB Client Coverage, the

ind

iduals delegating the Credit Risk authorit

ies perform

oversight by review

ing a sample of the l

it appl

icat

ions

approved by the delegated credit ofﬁcers on a monthly basis.

In CPBB, where credit decis

ion systems and tools (e.g.

applicat

ion scorecards) are used for cred

it decis

ion

ing, such

risk models are subject to performance monitor

ing and

period

ic val

idat

ion. Where manual or d

iscret

ionary cred

decis

ions are appl

ied, period

ic qual

ity control assessments

and assurance checks are performed by the ind

iduals

delegating the Credit Risk authorit

ies.

Credit Risk

302

Standard Chartered

– Annual Report 2022

Risk review

Risk management approach

Monitor

ing

We regularly monitor credit exposures, portfolio performance,

external trends and emerging risks that may impact risk

management outcomes. Internal risk management reports

that are presented to risk committees contain informat

ion on

key polit

ical and econom

ic trends across major portfolios and

countries, portfolio delinquency and loan impa

irment

performance.

The Industry Portfolio Mandate, developed jo

intly by the CCIB

Client Coverage business and the Risk function, provides a

forward-looking assessment of risk using a platform from

which business strategy, risk considerat

ions and cl

ient

planning are performed with one consensus view of the

external industry outlook, portfolio overviews, Risk Appetite,

underwrit

ing pr

inc

iples and stress test

ins

ights.

In CCIB Client Coverage, clients and portfolios are subjected to

addit

ional rev

iew when they display signs of actual or

potential weakness; for example, where there is a decline in

the client’s posit

ion w

ith

in the

industry, ﬁnanc

ial deter

iorat

ion,

a breach of covenants, or non-performance of an obligat

ion

with

in the st

ipulated period. Such accounts are subjected to a

dedicated process overseen by the Credit Issues Committees

in the relevant countries where client account strategies and

credit grades are re-evaluated. In addit

ion, remed

ial actions,

includ

ing plac

ing accounts on early alert for increased

scrutiny, exposure reduction, security enhancement or exit

ing

the account could be undertaken. Certain accounts could also

be transferred into the control management of the Stressed

Assets Group (SAG), which is our special

ist recovery un

it for

CCIB Client Coverage that operates independently from our

main business.

Any material in-country developments that may impact the

sovereign ratings are monitored closely by the Country Risk

Team. A Country Risk Early Warning system, a triage-based

risk ident

iﬁcation system was developed to categor

ise

countries based on forward looking view of possible

downgrade and expected incremental RWA impact of

potential downgrade.

For CPBB, exposures and collateral monitor

ing are performed

at the counterparty and/or portfolio level across different

client segments to ensure transactions and portfolio

exposures remain with

in R

isk Appetite. Portfolio delinquency

trends are monitored on an ongoing basis. Accounts that are

past due (or perceived as high risk but not yet past due) are

subject to a collections or recovery process managed by a

special

ist funct

ion independent from the orig

inat

ion function.

In some countries, aspects of collections and recovery

activ

ies are outsourced. For discret

ionary lend

ing portfolios,

sim

ilar processes as those of Commerc

ial client coverage are

followed.

In addit

ion, an

independent Credit Risk Review team (part of

Enterprise Risk Management), performs judgement-based

assessments of the Credit Risk proﬁles at various portfolio

levels, with focus on selected countries and segments through

deep dives, comparative analysis, and review and challenge

of the basis of credit approvals. The review ensures that the

evolving Credit Risk proﬁles of CCIB and CPBB are well

managed with

in our R

isk Appetite and polic

ies through

prompt and forward-looking mit

igat

ing actions.

Credit rating and measurement

All credit proposals are subject to a robust Credit Risk

assessment. It includes a comprehensive evaluation of the

client’s credit quality, includ

ing w

ill

ingness, ab

ity and

capacity to repay. The primary lending considerat

ion

is based

on the client’s credit quality and the repayment capacity from

operating cashﬂows for counterparties, and personal income

or wealth for ind

idual borrowers. The risk assessment gives

due considerat

ion to the cl

ient’s liqu

ity and leverage

posit

ion. Where appl

icable, the assessment includes a

detailed analysis of the Credit Risk mit

igat

ion arrangements

to determine the level of reliance on such arrangements as

the secondary source of repayment in the event of a

sign

iﬁcant deter

iorat

ion

in a client’s credit quality leading to

default. For Wealth Lending, Collateral is considered primary

source of repayment hereby loan agreement envisages that

the repayment of loan is based on sale of collateral provided.

Risk measurement plays a central role, along with judgement

and experience, in inform

ing r

isk-taking and portfolio

management decis

ions. We adopt the advanced

internal

ratings-based approach under the Basel regulatory

framework to calculate Credit Risk capital requirements. The

Group has also established a global programme to undertake

a comprehensive assessment of capital requirements

necessary to be implemented to meet the latest revised Basel

III ﬁnalisat

ion (Basel IV) regulations.

A standard alphanumeric Credit Risk grade system is used for

CCIB Client Coverage. The numeric grades run from 1 to 14 and

some of the grades are further sub-classif

ied. Lower numer

credit grades are ind

icat

ive of a lower likel

ihood of default.

Credit grades 1 to 12 are assigned to performing customers,

while credit grades 13 and 14 are assigned to non-performing

or defaulted customers.

CPBB internal ratings-based portfolios use applicat

ion and

behavioural credit scores that are calibrated to generate a

probabil

ity of default. R

isk Decis

ion Framework as a cred

rating system supports the delivery of optimum risk-adjusted-

returns with controlled volatil

ity and

is used to deﬁne the

portfolio/new booking segmentation, shape and decis

ion

criter

ia for the unsecured consumer bus

iness segment.

Advanced internal ratings-based models cover a substantial

majority of our exposures and are used

in assessing risks at a

customer and portfolio level, setting strategy and optim

ing

our risk-return decis

ions. Mater

ial internal ratings-based risk

measurement models are approved by the Model Risk

Committee. Prior to review and approval, all internal ratings-

based models are validated in detail by a model validat

ion

team, which is separate from the teams that develop and

mainta

in the models. Models undergo annual val

idat

ion by an

independent model validat

ion team. Rev

iews are also

triggered if the performance of a model deteriorates

materially against predetermined thresholds during the

ongoing model performance monitor

ing process wh

ich takes

place between the annual validat

ions.

303

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Credit Concentration Risk

Credit Concentration Risk may arise from a single large

exposure to a counterparty or a group of connected

counterparties, or from multiple exposures across the portfolio

that are closely correlated. Large exposure Concentration Risk

is managed through concentration lim

its set for a

counterparty or a group of connected counterparties based

on control and economic dependence criter

ia. R

isk Appetite

metrics are set at portfolio level and monitored to control

concentrations, where appropriate, by industry, specif

products, tenor, collateralisat

ion level, top cl

ients and

exposure to holding companies. Single name credit

concentration thresholds are set by client group depending on

credit grade, and by customer segment. For concentrations

that are material at a Group level, breaches and potential

breaches are monitored by the respective governance

committees and reported to the Group Risk Committee and

Board Risk Committees.

Credit impa

irment

Expected credit losses (ECL) are determined for all ﬁnanc

ial

assets that are classif

ied as amort

ised cost or fair value

through other comprehensive income. ECL is computed as an

unbiased, probabil

ity-we

ighted provis

ion determ

ined by

evaluating a range of plausible outcomes, the time value of

money, and forward-looking informat

ion such as cr

ical

global or country-specif

ic macroeconom

ic variables. For more

detailed informat

ion on macroeconom

ic data feeding into

IFRS 9 ECL calculations, please refer to the Risk proﬁle section

(pages 269 to 281).

At the time of orig

inat

ion or purchase of a non-credit-

impa

ired ﬁnancial asset (stage 1), ECL represent cash

shortfalls aris

ing from poss

ible default events up to 12 months

into the future from the balance sheet date. ECL continue to

be determined on this basis until there is a sign

iﬁcant

increase

in the Credit Risk of the asset (stage 2), in which case an ECL is

recognised for default events that may occur over the lifet

ime

of the asset. If there is observed object

ive ev

idence of credit

impa

irment or default (stage 3), ECL cont

inue to be measured

on a lifet

ime bas

is. To provide the Board with oversight and

assurance that the quality of assets orig

inated are al

igned to

the Group’s strategy, there is a Risk Appetite metric to monitor

the stage 1 and stage 2 expected credit losses from assets

orig

inated

in the past 12 months.

In CCIB Client Coverage, a loan is considered credit-impa

ired

where analysis and review ind

icate that full payment of e

ither

interest or princ

ipal,

includ

ing the t

imel

iness of such payment,

is questionable, or as soon as payment of interest or princ

ipal

is 90 days overdue. These credit-impa

ired accounts are

managed by our special

ist recovery un

it, SAG.

In CPBB, a loan to ind

iduals and small businesses is

considered credit-impa

ired as soon as payment of

interest or

princ

ipal

is 90 days overdue or meets other object

ive ev

idence

of impa

irment such as bankruptcy, debt restructur

ing, fraud or

death. Financ

ial assets are wr

itten-off when it meets certain

threshold condit

ions wh

ich are set at the point where

empir

ical ev

idence suggests that the client is unlikely to meet

their contractual obligat

ions, or a loss of pr

inc

ipal

is expected.

Estimat

ing the amount and t

ing of future recover

ies

involves sign

iﬁcant judgement and cons

iders the assessment

of matters such as future economic condit

ions and the value

of collateral, for which there may not be a readily accessible

market. The total amount of the Group’s impa

irment prov

ion

is inherently uncertain, being sensit

ive to changes

in economic

and credit condit

ions across the reg

ions in which the Group

operates. For further details on sensit

ity analysis of expected

credit losses under IFRS 9, please refer to the Risk proﬁle

section (pages 269 to 281).

Stress testing

Stress testing is a forward-looking risk management tool that

constitutes a key input into the ident

iﬁcation, mon

itor

ing and

mit

igat

ion of Credit Risk, as well as contribut

ing to R

isk

Appetite calibrat

ion. Per

iod

ic stress tests are performed on

credit portfolios/segments to antic

ipate vulnerab

ies from

stressed condit

ions and

iate timely right-siz

ing and

mit

igat

ion plans. Addit

ionally, mult

iple enterprise-wide and

country-level stress tests are mandated by regulators to

assess the abil

ity of the Group and

its subsid

iar

ies to continue

to meet their capital requirements during a plausible, adverse

shock to the business. These regulatory stress tests are

conducted in line with the princ

iples stated

in the Enterprise

Stress Testing Policy. Stress tests for key portfolios are reviewed

by the Credit Risk Type Framework Owners (or delegates) as

part of portfolio oversight; and matters considered material to

the Group are escalated to the GCRO and respective regional

risk committee.

304

Standard Chartered

– Annual Report 2022

Risk review

Risk management approach

Roles and responsib

ies

The TRTF, which sets the roles and responsib

ies

in respect of

Traded Risk for the Group, is owned by the Global Head,

Traded Risk Management (TRM). The business, acting as ﬁrst

line of defence, is responsible for the effective management of

risks with

in the scope of

its direct organisat

ional

responsib

ies set by the Board.

TRM is the core second-line control function that performs

independent challenge, monitor

ing and overs

ight of the

Traded Risk management practices of the ﬁrst line of defence,

predominantly Financ

ial Markets and Treasury Markets. The

ﬁrst and second lines of defence are supported by the

organisat

ion structure, job descr

ipt

ions and author

ies

delegated by Traded Risk control owners.

Mit

igat

ion

The TRTF requires that Traded Risk lim

its are deﬁned at a level

appropriate to ensure that the Group remains with

in R

isk

Appetite. All businesses incurr

ing Traded R

isk must comply

with the TRTF. The Traded Risk Policy sets the princ

iples that

must be followed for the end-to-end traded risk management

process includ

ing l

it sett

ing, risk capture and measurement,

lim

it mon

itor

ing and escalat

ion, risk mit

igat

ion and stress

testing. Polic

ies and standards ensure that these Traded R

isk

lim

its are

implemented. Polic

ies are rev

iewed and approved

by the Global Head, TRM at least once every two years to

ensure their ongoing effectiveness.

Governance committee oversight

At Board level, the Board Risk Committee oversees the

effective management of Traded Risk. At the executive level,

the Group Risk Committee delegates responsib

ies to the

CCIBRC to oversee the Traded Risk proﬁle of the Group. For

subsid

iar

ies, the authority for setting Traded Risk lim

its

delegated from the local board to the local risk committee,

Country Chief Risk Ofﬁcer and Traded Risk managers.

Meetings are held regularly, and the committees monitor all

material Traded Risk exposures, as well as key internal

developments and external trends, and ensure that

appropriate action is taken.

Decis

ion-mak

ing authorit

ies and delegat

ion

The TRTF is the formal mechanism which delegates Traded

Risk authorit

ies cascad

ing from the GCRO, as the Senior

Manager of the Traded Risk Type, to the Global Head, TRM

who further delegates authorit

ies to named

ind

iduals.

Traded Risk authorit

ies are rev

iewed at least annually to

ensure that they remain appropriate and to assess the quality

of decis

ions taken by the author

ised person. Key risk-taking

decis

ions are made only by certa

in ind

iduals with the skills,

judgement and perspective to ensure that the Group’s control

standards and risk-return object

ives are met.

Market Risk

The Group uses a Value at Risk (VaR) model to measure the

risk of losses aris

ing from future potent

ial adverse movements

in market rates, prices and volatil

ies. VaR is a quantitat

ive

measure of Market Risk that applies recent histor

ical market

condit

ions to est

imate the potential future loss in market

value that will not be exceeded in a set time period at a set

statist

ical conﬁdence level. VaR prov

ides a consistent measure

that can be applied across trading businesses and products

over time and can be set against actual daily trading proﬁt

and loss outcomes.

For day-to-day risk management, VaR is calculated as at the

close of business, generally at UK time for expected market

movements over one business day and to a conﬁdence level

of 97.5 per cent. Intra-day risk levels may vary from those

reported at the end of the day.

The Group applies two VaR methodologies:

•

Histor

ical s

imulat

ion: th

is involves the revaluation of all

exist

ing pos

ions to reﬂect the effect of h

istor

ically

observed changes in Market Risk factors on the valuation of

the current portfolio. This approach is applied for general

Market Risk factors and the major

ity of spec

ic (cred

spread) risk VaRs.

•

Monte Carlo simulat

ion: th

is methodology is sim

ilar to

histor

ical s

imulat

ion but w

ith considerably more input risk

factor observations. These are generated by random

sampling techniques, but the results retain the essential

variab

ity and correlations of histor

ically observed r

isk

factor changes. This approach is applied for some of the

specif

ic (cred

it spread) risk VaRs in relation to id

iosyncrat

exposures in credit markets.

A one-year histor

ical observat

ion period is applied in both

methods.

As an input to regulatory capital, trading book VaR is

calculated for expected movements over 10 business days

and to a conﬁdence level of 99 per cent. Some types of Market

Risk are not captured in the regulatory VaR measure, and

these Risks not in VaR are subject to capital add-ons.

An analysis of VaR results in 2022 is available in the Risk proﬁle

section (pages 282 to 285).

The Group deﬁnes Traded Risk as the potential for loss

resulting from activ

ies undertaken by the Group in

ﬁnancial markets.

Risk Appetite Statement

The Group should control its ﬁnanc

ial markets

activ

ies to ensure that Traded Risk losses do not

cause material damage to the Group’s franchise.

Traded Risk

305

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Counterparty Credit Risk

The Group uses a Potential Future Exposure (PFE) model to

measure the credit exposure aris

ing from the pos

ive mark-to-

market of traded products and future potential movements in

market rates, prices and volatil

ies. PFE is a quantitat

ive

measure of Counterparty Credit Risk that applies recent

histor

ical market cond

ions to est

imate the potential future

credit exposure that will not be exceeded in a set time period

at a conﬁdence level of 97.5 per cent. PFE is calculated for

expected market movements over different time horizons

based on the tenor of the transactions.

The Group applies two PFE methodologies: simulat

ion based,

which is predominantly used, and an add-on based PFE

methodology.

Underwrit

ing

The underwrit

ing of secur

ies and loans

is in scope of the Risk

Appetite set by the Group for Traded Risk. Addit

ional l

its

approved by the GCRO are set on the sectoral concentration,

and the maximum holding period. The Underwrit

ing

Committee, under the authority of the GCRO, approves

ind

idual proposals to underwrite new security issues and

loans for our clients.

Monitor

ing

TRM monitors the overall portfolio risk and ensures that it is

with

in spec

ied l

its and therefore R

isk Appetite. Lim

its are

typically reviewed twice a year. Most of the Traded Risk

exposures are monitored daily against approved lim

its.

Traded Risk lim

its apply at all t

imes unless separate intra-day

lim

its have been set. L

it excess approval dec

ions are

based on an assessment of the circumstances driv

ing the

excess and of the proposed remediat

ion plan. L

its and

excesses can only be approved by a Traded Risk manager

with the appropriate delegated authority.

Stress testing

The VaR and PFE measurements are complemented by stress

testing of Market Risk and Counterparty Credit Risk to

highl

ight the potent

ial risk that may arise from severe but

plausible market events.

Stress testing is an integral part of the Traded Risk

management framework and considers both histor

ical

market events and forward-looking scenarios. A consistent

stress testing methodology is applied to trading and non-

trading books. The stress testing methodology assumes that

management action would be lim

ited dur

ing a stress event,

reﬂecting the expected decrease in market liqu

ity. Stress test

scenarios are applied to interest rates, credit spreads,

exchange rates, commodity prices and equity prices. Stress

scenarios are reviewed and updated where necessary to

reﬂect changes in risk proﬁle and economic events.

TRM reviews the stress testing results and, where necessary,

enforces reductions in overall Traded Risk exposures. The

Group Risk Committee considers the results of stress tests as

part of its supervis

ion of R

isk Appetite. Group and business-

wide stress testing are supplemented by legal entity stress

testing, subject to the relevant local governance.

306

Standard Chartered

– Annual Report 2022

Risk review

Risk management approach

Roles and responsib

ies

The Global Head, Enterprise Risk Management is responsible

for the Risk Type Framework for Treasury Risk under the

Enterprise Risk Management Framework.

The Group Treasurer is supported by teams in Treasury and

Finance to implement the Treasury Risk Type Framework as

the ﬁrst line of defence, and is responsible for managing

Treasury Risk.

At Regional and Country level, Chief Executive Ofﬁcers

supported by Regional and Country level Finance and

Treasury teams are responsible for managing Treasury Risk as

the ﬁrst line of defence. Regional Treasury Chief Risk Ofﬁcers

and Country Chief Risk Ofﬁcers for Treasury Risk (except

Pension Risk) and Head of Pensions (for Pension Risk) are

responsible for overseeing and challenging the ﬁrst line of

defence.

Mit

igat

ion

The Group develops polic

ies to address mater

ial Treasury

Risks and aims to mainta

its risk proﬁle with

in R

isk Appetite.

In order to do this, metrics are set against Capital Risk,

Liqu

ity and Funding Risk and Interest Rate Risk in the

Banking Book (IRRBB). Where appropriate, Risk Appetite

metrics are cascaded down to regions and countries in the

form of Lim

its and Management Act

ion Triggers.

Capital Risk

In order to manage Capital Risk, strategic business and capital

plans (Corporate Plan) are drawn up covering a ﬁve-year

horizon which are approved by the Board annually. The plan

ensures that adequate levels of capital, includ

ing loss-

absorbing capacity, and an efﬁc

ient m

ix of the different

components of capital are mainta

ined to support our strategy

and business plans.

Treasury is responsible for the ongoing assessment of the

demand for capital and the updating of the Group’s capital

plan.

Risk Appetite metrics includ

ing cap

ital, leverage, min

imum

requirement for own funds and elig

ible l

iab

ity (MREL) and

double leverage are assessed with

in the Corporate Plan to

ensure that the strategy can be achieved with

in r

isk

tolerances.

Structural FX Risk

The Group’s structural posit

ion results from the Group’s non-US

dollar investment in the share capital and reserves of

subsid

iar

ies and branches. The FX translation gains, or losses

are recorded in the Group’s translation reserves with a direct

impact on the Group’s Common Equity Tier 1 ratio.

The Group contracts hedges to manage its structural FX

posit

ion

in accordance with the Board-approved Risk

Appetite, and as a result the Group has taken net investment

hedges to partially cover its exposure to certain non-US dollar

currencies to mit

igate the FX

impact of such posit

ions on

its

capital ratios.

Liqu

ity and Funding Risk

At Group, regional and country level we implement various

business-as-usual and stress risk metrics and monitor these

against Lim

its and Management Act

ion Triggers. In addit

ion

to these, where relevant, Monitor

ing Metr

ics are also set

against specif

ic r

isks. This ensures that the Group mainta

ins

an adequate and well-divers

iﬁed l

iqu

ity buffer, as well as a

stable funding base, and that it meets its liqu

ity and funding

regulatory requirements. The approach to managing risks

and the Board Risk Appetite are assessed annually through

the Internal Liqu

ity Adequacy Assessment Process. A

funding plan is also developed for efﬁc

ient l

iqu

ity project

ions

to ensure that the Group is adequately funded in the required

currencies, to meet its obligat

ions and cl

ient funding needs.

The funding plan is part of the overall Corporate Plan process

align

ing to the cap

ital requirements.

Interest Rate Risk in the Banking Book

This risk arises from differences in the repric

ing proﬁle,

interest

rate basis, and optional

ity of bank

ing book assets, liab

ies

and off-balance sheet items. IRRBB represents an economic

and commercial risk to the Group and its capital adequacy.

The Group monitors IRRBB against the Board Risk Appetite.

Pension Risk

Pension Risk is the potential for loss due to having to meet an

actuarially assessed shortfall in the Group’s pension plans.

Pension obligat

ion r

isk to a ﬁrm arises from its contractual or

other liab

ies to or w

ith respect to an occupational pension

plan or other long term beneﬁt obligat

ion. For a funded plan

represents the risk that addit

ional contr

ibut

ions w

ill need to

be made because of a future shortfall in the funding of the

plan or, for unfunded obligat

ions,

it represents the risk that the

cost of meeting future beneﬁt payments is greater than

currently antic

ipated. Pens

ion Risk posit

ion aga

inst deﬁned

Risk Appetite metrics is reported to the Group Risk Committee.

These metrics include the current IAS 19 deﬁc

it, and the total

capital requirement (includ

ing both P

illar 1 and Pillar 2A

capital) in respect of Pension Risk, both expressed as a

number of basis points of RWA.

Treasury Risk is deﬁned as the “potential for insuff

ient

capital, liqu

ity or funding to support our operations,

the risk of reductions in earnings or value from

movements in interest rates impact

ing bank

ing book

items and the potential for losses from a shortfall in the

Group’s pension plans”.

Risk Appetite Statement

The Group should mainta

in sufﬁcient cap

ital,

liqu

ity and funding to support its operations, and

an interest rate proﬁle ensuring that the reductions

in earnings or value from movements in interest

rates impact

ing bank

ing book items does not

cause material damage to the Group’s franchise. In

addit

ion, the Group should ensure

its Pension plans

are adequately funded.

Treasury Risk

307

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Recovery and Resolution Planning

In line with PRA requirements, the Group mainta

ins a Recovery

Plan which is a live document to be used by management in

the event of stress in order to restore the Group to a stable

and sustainable posit

ion. The Recovery Plan

includes a set of

recovery ind

icators, an escalat

ion framework and a set of

management actions capable of being implemented in a

stress. A Recovery Plan is also mainta

ined w

ith

in each major

entity, and all recovery plans are subject to period

ic ﬁre-dr

ill

testing.

As the UK resolution authority, the BoE is required to set a

preferred resolution strategy for the Group. The BoE’s

preferred resolution strategy is whole Group single point of

entry bail-in at the ultimate holding company level (Standard

Chartered PLC) and would be led by the BoE as the Group’s

home resolution authority. In support of this strategy, the

Group has been developing a set of capabil

ies,

arrangements and resources to achieve the required

outcomes. On 10 June 2022, the Group and other major UK

banks published their resolvabil

ity d

isclosures, alongside the

BoE’s public assessment of the industry’s preparations for

resolution. No major deﬁc

ienc

ies were ident

iﬁed by the BoE on

the Group’s resolution capabil

ity, but there were some

shortcomings and areas for further enhancement ident

iﬁed.

Addressing these points remains a key prior

ity for the Group.

Sign

iﬁcant progress has been made and we are on track to

meet the commitments made to the BoE.

Governance committee oversight

At the Board level, the Board Risk Committee oversees the

effective management of Treasury Risk . At the executive level,

the Group Asset and Liab

ity Committee (GALCO) ensures the

effective management of risk throughout the Group in

support of the Group’s strategy, guides the Group’s strategy on

balance sheet optim

isat

ion and ensures that the Group

operates with

in the

internally approved Risk Appetite and

other internal and external requirements relating to Treasury

Risk (except Pension Risk) The Group Risk Committee and

Regional Risk Committees provide oversight for Pension Risk.

Regional and country oversight resides with regional and

country Asset and Liab

ity Committees. Regions and countries

must ensure that they remain in compliance with Group

Treasury polic

ies and pract

ices, as well as local regulatory

requirements.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Group Chief Financ

ial Ofﬁcer has respons

ity for capital,

funding and liqu

ity under the Senior Managers Regime. The

GCRO has delegated the Risk Framework Owner

responsib

ies assoc

iated with Treasury Risk to the Global

Head, Enterprise Risk Management. The Global Head,

Enterprise Risk Management delegates second-line oversight

and challenge responsib

ies to the Treasury Ch

ief Risk

Ofﬁcer and Country Chief Risk Ofﬁcers for Capital Risk,

Liqu

ity and Funding Risk and Interest Rate Risk in the

Banking Book and to Head of Pensions for Pension Risk.

Monitor

ing

On a day-to-day basis, Treasury Risk is managed by Treasury,

Finance and Country Chief Executive Ofﬁcers. The Group

regularly reports and monitors Treasury Risk inherent in its

business activ

ies and those that arise from internal and

external events.

Internal risk management reports covering the balance sheet

and the capital and liqu

ity posit

ion are presented to the

relevant country Asset and Liab

ity Committee. The reports

contain key informat

ion on balance sheet trends, exposures

against Risk Appetite and supporting risk measures which

enable members to make informed decis

ions around the

overall management of the balance sheet.

In addit

ion, an

independent Treasury Chief Risk Ofﬁcer as part

of Enterprise Risk Management reviews the prudency and

effectiveness of Treasury Risk management.

Pension Risk is actively managed by the Head of Pensions and

monitored by the Head of Country Risk, Scenario Analysis,

Insurable and Pension Risk. The Head of Pensions ensures that

accurate, complete and timely updates on Pension Risk are

shared with the Head of Country Risk, Scenario Analysis and

Pension Risk; Treasury CRO and the Global Head, ERM on a

period

ic bas

is.

Stress testing

Stress testing and scenario analysis are an integral part of the

Treasury Risk Framework and are used to ensure that the

Group’s internal assessment of capital and liqu

ity considers

the impact of extreme but plausible scenarios on its risk

proﬁle. A number of stress scenarios, some designed internally,

some required by regulators, are run period

ically.

They provide an ins

ight

into the potential impact of sign

iﬁcant

adverse events on the Group’s capital and liqu

ity posit

ion

and how this could be mit

igated through appropr

iate

management actions to ensure that the Group remains with

the approved Risk Appetite and regulatory lim

its.

Daily liqu

ity stress scenarios are also run to ensure that the

Group holds sufﬁcient h

igh-quality liqu

id assets to w

ithstand

extreme liqu

ity events.

308

Standard Chartered

– Annual Report 2022

Risk review

Risk management approach

Roles and responsib

ies

The Operational and Technology Risk Type Framework (O&T

RTF) sets the roles and responsib

ies

in respect of

Operational Risk for the Group, and is owned by the Global

Head of Risk, Functions and Operational Risk (GHRFOR). This

framework collectively deﬁnes the Group’s Operational Risk

sub-types which have not been classif

ied as PRTs and sets

standards for the ident

iﬁcation, control, mon

itor

ing and

treatment of risks. These standards are applicable across all

PRTs and risk sub-types in the O&T RTF. These risk sub-types

relate to execution capabil

ity, governance, report

ing and

obligat

ions, legal enforceab

ity, and operat

ional resil

ience

(includ

ing cl

ient service, change management, people

management, safety and security, and technology risk).

The O&T RTF reinforces clear accountabil

ity for manag

ing risk

throughout the Group and delegates second line of defence

responsib

ies to

ident

iﬁed subject matter experts. For each

risk sub-type, the expert sets polic

ies and standards for the

organisat

ion to comply w

ith, and provides guidance, oversight

and challenge over the activ

ies of the Group. They ensure

that key risk decis

ions are only taken by

ind

iduals with the

requis

ite sk

ills, judgement, and perspective to ensure that the

Group’s risk-return object

ives are met.

Mit

igat

ion

The O&T RTF sets out the Group’s overall approach to the

management of Operational Risk in line with the Group’s

Operational and Technology Risk Appetite. This is supported

by Risk and Control Self-Assessment (RCSA) which deﬁnes

roles and responsib

ies for the

ident

iﬁcation, control and

monitor

ing of r

isks (applicable to all PRTs, risk sub-types and

integrated risks).

The RCSA is used to determine the design strength and

reliab

ity of each process, and requires:

•

the recording of processes run by client segments, products

and functions into a process universe

•

the ident

iﬁcation of potent

ial breakdowns to these

processes and the related risks of such breakdowns

•

an assessment of the impact of the ident

iﬁed r

isks based on

a consistent scale

•

the design and monitor

ing of controls to m

igate pr

ior

ised

risks

•

assessments of residual risk and timely actions for elevated

risks.

Risks that exceed the Group’s Operational and Technology

Risk Appetite require treatment plans to address underlying

causes.

Governance committee oversight

At Board level, the Board Risk Committee oversees the

effective management of Operational Risk. At the executive

level, the Group Risk Committee is responsible for the

governance and oversight of Operational Risk for the Group,

monitors the Group’s Operational and Technology Risk

Appetite and relies on other key Group committees for the

management of Operational Risk, in particular the Group

Non-Financ

ial R

isk Committee (GNFRC).

Regional business segments and functional committees also

provide enterprise oversight of their respective processes and

related operational risks. In addit

ion, Country Non-F

inanc

ial

Risk Committees (CNFRCs) oversee the management of

Operational Risk at the country (or entity) level. In smaller

countries, the responsib

ies of the CNFRC may be exerc

ised

directly by the Country Risk Committee (for branches) or

Executive Risk Committee (for subsid

iar

ies).

Decis

ion-mak

ing authorit

ies and delegat

ion

The O&T RTF is the formal mechanism through which the

delegation of Operational Risk authorit

ies

is made. The

GHRFOR places reliance on the respective Senior Managers

who are outside the Risk function for second-line oversight of

the risk sub-types through this framework. The Senior

Managers may further delegate their second-line

responsib

ies to des

ignated ind

iduals at a global business,

product and function level, as well as regional or country level.

Monitor

ing

To deliver services to clients and to partic

ipate

in the ﬁnanc

ial

services sector, the Group runs processes which are exposed

to operational risks. The Group prior

ises and manages risks

which are sign

iﬁcant to cl

ients and to the ﬁnanc

ial serv

ices

sectors. Control ind

icators are regularly mon

itored to

determine the residual risk the Group is exposed to.

The residual risk assessments and reporting of events form the

Group’s Operational Risk proﬁle. The completeness of the

Operational Risk proﬁle ensures appropriate prior

isat

ion and

timel

iness of r

isk decis

ions,

includ

ing r

isk acceptances with

treatment plans for risks that exceed acceptable thresholds.

The Board is informed on adherence to Operational and

Technology Risk Appetite through metrics reported for

selected risks. These metrics are monitored, and escalation

thresholds are devised based on the material

ity and

sign

iﬁcance of the r

isk. These Operational and Technology

Risk Appetite metrics are consolidated on a regular basis and

reported at relevant Group committees. This provides senior

management with the relevant informat

ion to

inform their risk

decis

ions.

Stress testing

Stress testing and scenario analysis are used to assess capital

requirements for operational risks. This approach considers

the impact of extreme but plausible scenarios on the Group’s

Operational Risk proﬁle. A number of scenarios have been

ident

iﬁed to test the robustness of the Group’s processes and

assess the potential impact on the Group. These scenarios

include anti-money laundering and sanctions, as well as

informat

ion and cyber secur

ity.

The Group deﬁnes Operational and Technology Risk as

the potential for loss resulting from inadequate or

failed internal processes, technology events, human

error or from the impact of external events (includ

ing

legal risks).

Risk Appetite Statement

The Group aims to control operational and

technology risks to ensure that operational losses

(ﬁnancial or reputat

ional), includ

ing any related to

conduct of business matters, do not cause material

damage to the Group’s franchise.

Operational and Technology Risk

309

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Roles and responsib

ies

The Group’s Information and Cyber Security Risk Type

Framework (ICS RTF) deﬁnes the roles and responsib

ies of

the ﬁrst and second lines of defence in managing and

governing ICS Risk across the Group. It emphasises business

ownership and ind

idual accountabil

ity.

The Group Chief Transformation, Technology & Operations

Ofﬁcer (CTTO) has overall ﬁrst line of defence responsib

ity for

ICS Risk and is accountable for the Group’s ICS strategy. The

Group Chief Information Security Ofﬁcer (CISO) leads the

development and execution of the ICS strategy. The ﬁrst line

also manages all key ICS Risks, breaches and risk treatment

plans with oversight from Group Chief Information Security

Risk Ofﬁcer (CISRO). ICS Risk proﬁle, Risk Appetite breaches

and remediat

ion status are reported at Board and Execut

ive

committees, alongside Business, Function and Country

governance committees.

The Group CISRO function with

in Group R

isk, led by the Group

CISRO, is the second line of defence and sets the framework,

policy, standards and methodology for assessing, scoring and

prior

ing ICS R

isks across the Group. This function has overall

responsib

ity for governance, oversight and independent

challenge of ﬁrst line’s pursuit of the ICS strategy. Group ICS

Risk Framework Strategy remains the responsib

ity of the ICS

Risk Framework Owner (RFO), delegated from the Group CRO

to the Group CISRO.

Mit

igat

ion

ICS Risk is managed through the structured ICS Risk Type

Framework, compris

ing a r

isk assessment methodology and

supporting policy, standards and methodologies. These are

aligned to industry recommended practice. We undertake an

annual ICS Effectiveness Review to evaluate ICS Risk

management practices in alignment with the Enterprise Risk

Management Framework.

In 2022, we uplifted the ICS RTF to include an updated ICS

end-to-end Risk Management and Governance approach

and continued the roll out of the threat-led scenario risk

assessment across the Group. The Group CISRO function

monitors compliance to the ICS RTF by review

ing Group CISO’s

risk assessments and conducting independent assurance

reviews.

Governance committee oversight

The Board Risk Committee oversees the effective

management of ICS Risk. The Group Risk Committee (GRC)

has delegated authority to the Group Non-Financ

ial R

isk

Committee (GNFRC) to ensure effective implementat

ion of

the ICS RTF. The GRC and GNFRC are responsible for oversight

of ICS Risk posture and Risk Appetite breaches rated very high

and high. Sub-committees of the GNFRC have oversight of ICS

Risk management aris

ing from the Bus

inesses, Countries and

Functions.

Meanwhile the Cyber Security Advisory Forum (CSAF), chaired

by the Group Chief Executive Ofﬁcer, enables the

Management Team, Group Chairman and non-executive

directors to engage further on ICS, asking any questions freely

at this non-governance forum.

Decis

ion-mak

ing authorit

ies and delegat

ion

The ICS RTF deﬁnes how the Group manages ICS Risk. The

Group CISRO delegates authority to designated ind

iduals

through the ICS RTF, includ

ing second-l

ine ownership at a

Business, Function, Region and Country level.

The Group CISO is responsible for implement

ing ICS R

isk

Management with

in the Group, leverag

ing Group Process

Owners and Business CISOs. These stakeholders cascade ICS

risk management into the Businesses, Functions and Countries

to comply with the ICS RTF, policy and standards.

Monitor

ing

Group CISO perform a threat-led risk assessment to ident

ify

key threats, in-scope applicat

ions and key controls requ

ired to

ensure the Group remains with

in R

isk Appetite.

The ICS Risk postures of all businesses, functions and countries

are consolidated to present a holist

ic Group-level ICS R

isk

posture for ongoing monitor

ing.

During these reviews, the status of each risk is assessed

against the Group’s controls to ident

ify any changes to

impact

and likel

ihood, wh

ich affects the overall risk rating.

Group CISO and Group CISRO monitor the ICS Risk proﬁle and

ensure that breaches of Risk Appetite are escalated to the

appropriate governance committee or authority levels for

adequate remediat

ion and track

ing. A dedicated Group

CISRO team is supporting this work by executing offensive

security testing exercises, which shows wider picture of risk

security posture what leads to better vis

ity on potent

ial

risks “in ﬂight”.

Stress testing

Stress testing and scenario analysis are used to assess capital

requirements for ICS Risk. Specif

ic scenar

ios are developed

annually in collaboration between ﬁrst- and second-line ICS

teams, incorporating extreme but plausible ICS Risk events.

The Group deﬁnes Information and Cyber Security Risk

as the risk to the Group’s assets, operations and

ind

iduals due to the potential for unauthorised

access, use, disclosure, disrupt

ion, mod

icat

ion, or

destruction of informat

ion assets and/or

informat

ion

systems.

Risk Appetite Statement

The Group has zero appetite for very high ICS

residual risks and low appetite for High ICS residual

risks which result in loss of services, data or funds.

The Group will implement an effective ICS control

environment and proactively ident

ify and respond

to emerging ICS threats in order to lim

it ICS

inc

idents

impact

ing the Group’s franch

ise.

Information and Cyber Security (ICS) Risk

310

Standard Chartered

– Annual Report 2022

Risk review

Risk management approach

Roles and responsib

ies

The Group Head, Conduct, Financ

ial Cr

ime and Compliance

(Group Head, CFCC) as Risk Framework Owner for Compliance

Risk provides support to senior management on regulatory and

compliance matters by:

•

provid

ing

interpretat

ion and adv

ice on CFCC regulatory

requirements and their impact on the Group

•

setting enterprise-wide standards for management of

compliance risks through the establishment and

maintenance of the Compliance Risk Type Framework

(Compliance RTF)

•

setting a programme for monitor

ing Compl

iance Risk.

Group Head, CFCC also performs the Financ

ial Conduct

Authority (FCA) controlled function and senior management

function of Compliance Risk Oversight in accordance with the

requirements set out by the FCA. The Compliance RTF sets out

the Group’s overall approach to the management of

Compliance Risk and the associated roles and responsib

ies.

All activ

ies that the Group engages in must be designed to

comply with the applicable laws and regulations in the

countries in which we operate. The CFCC function provides

second line oversight and challenge of the ﬁrst-line risk

management activ

ies that relate to Compliance Risk.

Where Compliance Risk arises, or could arise, from failure to

manage another Princ

ipal R

isk Type or sub-type, the

Compliance RTF outlines that the responsib

ity rests with the

respective Risk Framework Owner or control function to ensure

that effective oversight and challenge of the ﬁrst line can be

provided by the appropriate second-line function.

Each of the assigned second-line functions has responsib

ies

includ

ing mon

itor

ing relevant regulatory developments from

Non-Financ

ial Serv

ices regulators at both Group and country

levels, policy development, implementat

ion, and val

idat

ion as

well as oversight and challenge of ﬁrst-line processes and

controls. In addit

ion, the role of CFCC has been further clar

ied

in 2022 in relation to Compliance risk and the boundary of

responsib

ies w

ith other Princ

ipal R

isk Types.

Mit

igat

ion

The CFCC function develops and deploys relevant polic

ies and

standards setting out requirements and controls for adherence

by the Group to ensure continued compliance with applicable

laws and regulations. Through a combinat

ion of standard

setting, risk assessment, control monitor

ing and assurance

activ

ies, the Compliance Risk Framework Owner seeks to

ensure that all polic

ies are operat

ing as expected to mit

igate

the risk that they cover. The installat

ion of appropr

iate

processes and controls is the primary tool for the mit

igat

ion of

Compliance Risk. In this, the requirements of the Operational

and Technology Risk Type Framework are followed to ensure a

consistent approach to the management of processes and

controls. Deployment of technological solutions to improve

efﬁcienc

ies and simpl

ify processes has cont

inued in 2022. These

include launch of a new platform to manage conﬂict review for

Outside Business Activ

ity, Personal Account Deal

ing, Close

Financ

ial Relat

ionsh

ip and Deals / Reportable Events, and

alongside dig

ital chatbots, Adv

isor Connect to connect with an

Advisor for complex queries.

Governance committee oversight

At a management level, Compliance Risk and the risk of

non-compliance with laws and regulations resulting from failed

processes and controls are overseen by the respective Country,

Business, Product and Function Non-Financ

ial R

isk Committees

includ

ing the R

isk and CFCC Non-Financ

ial R

isk Committee for

CFCC owned processes. Relevant matters, as required, are

further escalated to the Group Non-Financ

ial R

isk Committee

and Group Risk Committee. At Board level, oversight of

Compliance Risk is primar

ily prov

ided by the Audit Committee,

and also by the Board Risk Committee for relevant issues.

While not a formal committee, the CFCC Oversight Group

provides oversight of CFCC risks includ

ing the effect

ive

implementat

ion of the Compl

iance RTF. The Compliance Risk

Framework Owner established a Regulatory Change Oversight

Forum to have vis

ity and overs

ight of material and/or

complex large-scale regulatory change emanating from

Financ

ial serv

ices regulators impact

ing Non-F

inanc

ial R

isks. A

CFCC Policy Council has also been established to provide

oversight, challenge and direct

ion to Compl

iance and FCC

Policy Owners on material changes and posit

ions taken

CFCC-owned polic

ies,

includ

ing

issues relating to regulatory

interpretat

ion and Group’s CFCC r

isk appetite.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Compliance Risk Type Framework is the formal mechanism

through which the delegation of Compliance Risk authorit

ies

made. The Group Head, CFCC has the authority to delegate

second-line responsib

ies w

ith

in the CFCC funct

ion to relevant

and suitably qualif

ied

ind

iduals.

Monitor

ing

The monitor

ing of controls des

igned to mit

igate the r

isk of

regulatory non-compliance in processes is governed in line with

the Operational and Technology Risk Type Framework. The

Group has a monitor

ing and report

ing process in place for

Compliance Risk, which includes escalation and reporting to

Risk and CFCC Non-Financ

ial R

isk Committee, Group Non-

Financ

ial R

isk Committee, Group Risk Committee, Board Risk

Committee and Audit Committee, as appropriate.

Stress testing

Stress testing and scenario analysis are used to assess capital

requirements for Compliance Risk and form part of the overall

scenario analysis portfolio managed under the Operational

and Technology Risk Type Framework. Specif

ic scenar

ios are

developed annually with collaboration between the business,

which owns and manages the risk, and the CFCC function,

which is second line to incorporate sign

iﬁcant Compl

iance Risk

tail events. This approach considers the impact of extreme but

plausible scenarios on the Group’s Compliance Risk proﬁle.

The Group deﬁnes Compliance Risk as the potential for

penalties or loss to the Group or for an adverse impact

to our clients, stakeholders or to the integr

ity of the

markets we operate in through a failure on our part to

comply with laws, or regulations.

Risk Appetite Statement

The Group has no appetite for breaches in laws

and regulations related to regulatory non-

compliance; recognis

ing that wh

ilst inc

idents are

unwanted, they cannot be entirely avoided.

Compliance Risk

311

Standard Chartered

– Annual Report 2022

Risk review and Capital review

The Group deﬁnes Financ

ial Cr

ime Risk as the potential

for legal or regulatory penalties, material ﬁnanc

ial loss

or reputational damage resulting from the failure to

comply with applicable laws and regulations relating

to internat

ional sanct

ions, anti-money laundering,

anti-bribery and corruption, and fraud.

Risk Appetite Statement

The Group has no appetite for breaches in laws

and regulations related to ﬁnanc

ial cr

ime,

recognis

ing that wh

ile inc

idents are unwanted,

they cannot be entirely avoided.

Financ

ial Cr

ime Risk

Roles and responsib

ies

The Group Head, CFCC has overall responsib

ity for Financ

ial

Crime Risk and is responsible for the establishment and

maintenance of effective systems and controls to meet legal

and regulatory obligat

ions

in respect of Financ

ial Cr

ime Risk.

The Group Head, CFCC is the Group’s Compliance and

Money-Laundering Reporting Ofﬁcer and performs the FCA

controlled function and senior management function in

accordance with the requirements set out by the FCA,

includ

ing those set out

in their handbook on systems and

controls. As the ﬁrst line, the business unit process owners have

responsib

ity for the applicat

ion of pol

icy controls and the

ident

iﬁcation and measurement of r

isks relating to ﬁnanc

ial

crime. Business units must communicate risks and any policy

non-compliance to the second line for review and approval

following the model for delegation of authority.

Mit

igat

ion

There are four Group polic

ies

in support of the Financ

ial Cr

ime

Risk Type Framework:

•

Group Anti-Bribery and Corruption Policy

•

Group Anti-Money Laundering and Counter Terrorist

Financ

ing Pol

icy

• Group Sanctions Policy

•

Group Fraud Risk Management Policy.

The Group operates risk-based assessments and controls in

support of its Financ

ial Cr

ime Risk programme, includ

ing (but

not lim

ited to):

•

Group Risk Assessment - the Group monitors enterprise-

wide Financ

ial Cr

ime Risks through the CFCC Risk

Assessment process consist

ing of F

inanc

ial Cr

ime Risk and

Compliance Risk assessments. The Financ

ial Cr

ime Risk

assessment is a Group-wide risk assessment undertaken

annually to assess the inherent Financ

ial Cr

ime Risk

exposures and the associated processes and controls by

which these exposures are mit

igated.

•

Financ

ial Cr

ime Surveillance – risk-based systems and

processes to prevent and detect ﬁnancial cr

ime.

The strength of controls is tested and assessed through the

Group’s Operational and Technology Risk Type Framework, in

addit

ion to overs

ight by CFCC Assurance.

Governance committee oversight

Financ

ial Cr

ime Risk with

in the Group

is governed by the

Group Financ

ial Cr

ime Risk Committee (GFCRC) and the

Group Non-Financ

ial R

isk Committee (GNFRC) for Fraud Risk

which is appointed by and reports into the Group Risk

Committee.

Throughout the Group, the GFCRC is responsible for ensuring

effective oversight for Operational Risk relating to Financ

ial

Crime Risk, while the GNFRC is responsible for ensuring

effective oversight of Operational Risk relating to Non-

Financ

ial R

isks includ

ing Fraud R

isk. Given the progress made

on the Board Financ

ial Cr

ime Risk Committee’s (BFCRC)

purpose with respect to ﬁnanc

ial cr

ime risk management,

the Board reallocated the work of the BFCRC to the Audit

Committee, Board Risk Committee and Board with effect from

1 April 2022. The reallocation of BFCRC oversight enables a

more holist

ic and efﬁcient exam

inat

ion and d

iscuss

ion of r

isks

that are closely linked.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Financ

ial Cr

ime Risk Type Framework is the formal

mechanism through which the delegation of Financ

ial Cr

ime

Risk authorit

ies

is made. The Group Head, CFCC is the Risk

Framework Owner for Financ

ial Cr

ime Risk under the Group’s

Enterprise Risk Management Framework. Certain aspects of

Financ

ial Cr

ime Compliance, second-line oversight and

challenge, are delegated with

in the CFCC funct

ion. Approval

frameworks are in place to allow for risk-based decis

ions on

client onboarding, potential breaches of sanctions regulation

or policy, situat

ions of potent

ial money laundering (and

terrorist ﬁnanc

ing), br

ibery and corruption or internal and

external fraud.

Monitor

ing

The Group monitors Financ

ial Cr

ime Risk compliance against

a set of Risk Appetite metrics that are approved by the Board.

These metrics are reviewed period

ically and reported

regularly to the Group Financ

ial Cr

ime Risk Committee, Group

Non-Financ

ial R

isk Committee, Board and Group Risk

Committees, and Board Audit Committee.

Stress testing

The assessment of Financ

ial Cr

ime vulnerabil

ies under

stressed condit

ions or extreme events w

ith a low likel

ihood of

occurring is carried out through enterprise stress testing where

scenario analysis is used to assess capital requirements for

Financ

ial Cr

ime Risk as part of the overall scenario analysis

portfolio managed under the Operational and Technology

Risk Type Framework. Specif

ic scenar

ios are developed

annually with collaboration between the business, which

owns and manages the risk, and the CFCC function, which is

second line to incorporate sign

iﬁcant F

inanc

ial Cr

ime Risk

events. This approach considers the impact of extreme but

plausible scenarios on the Group’s Financ

ial Cr

ime Risk proﬁle.

312

Standard Chartered

– Annual Report 2022

Risk review

Risk management approach

Roles and responsib

ies

The Global Head, Enterprise Risk Management is the Risk

Framework Owner for Model Risk under the Group’s Enterprise

Risk Management Framework. Responsib

ity for the oversight

and implementat

ion of the Model R

isk Type Framework is

delegated to the Global Head, Model Risk Management.

The Model Risk Type Framework sets out clear accountabil

ity

and roles for Model Risk management through a Three Lines

of Defence model. First-line ownership of Model Risk resides

with Model Sponsors, who are business or function heads and

assign a Model Owner for each model and provide oversight

of Model Owner activ

ies. Model Owners are the accountable

executive for the model development process, represent

model users, and are responsible for the overall model design

process includ

ing engagement w

ith Model Users to solic

feedback on the proposed model solution. Model Owners also

coordinate the submiss

ion of models for val

idat

ion and

approval and ensure appropriate model implementat

ion and

use. Model Developers are responsible for the development of

models, acting as a delegate of the Model Owner, and are

responsible for documenting and testing the model in

accordance with Policy requirements, and for engaging with

Model Users as part of the development process. Second-line

oversight is provided by Model Risk Management, which

comprises Group Model Validat

ion (GMV) and Model R

isk

Policy and Governance.

The Group adopts an industry standard model deﬁn

ion as

specif

ied

in the Group Model Risk Policy, together with a scope

of applicab

ity represented by deﬁned model family types as

detailed with

in the Model R

isk Type Framework. Model

Owners are accountable for ensuring that all models under

their purview have been independently validated by GMV.

Models must be validated before use and then on an ongoing

basis, with schedule determined by the perceived level of

model risk associated with the model, or more frequently if

there are specif

ic regulatory requ

irements.

GMV independently reviews and grades models, in line with

design object

ives, bus

iness uses and compliance

requirements, and highl

ights

ident

iﬁed model r

isks by rais

ing

model related issues. The Model Risk Policy and Governance

team provides oversight of Model Risk activ

ies, performing

regular Model Risk Assessment and risk proﬁle reporting to

senior management.

For countries or legal entit

ies that are

in scope of the Model

Risk Type Framework, the Group Model Risk Policy specif

ies

the Country Model Risk Framework Owner, delegated to the

Country Chief Risk Ofﬁcer, as accountable for ensuring model

usage is correctly ident

iﬁed w

ith

in the country or legal ent

ity

and a suitable local governance process is established to

accommodate models requir

ing local regulatory approval

and for any other specif

ic local regulatory requ

irements at the

country or legal entity level. GMV will take into considerat

ion

any country or legal entity specif

ic cons

iderat

ions when

validat

ing a model, the model would be endorsed at Group

level and then approved for use in the country or legal entity

via the local governance process.

Mit

igat

ion

The Model Risk policy and standards deﬁne requirements for

model development and validat

ion act

ies, includ

ing

regular model performance monitor

ing. Any model

issues or

deﬁcienc

ies ident

iﬁed through the val

idat

ion process are

mit

igated through the appl

icat

ion of model mon

itor

ing,

model overlays and/or a model redevelopment plan, which

undergo robust review, challenge and approval. Operational

controls govern all Model Risk-related processes, with regular

risk assessments performed to assess appropriateness and

effectiveness of those controls, in line with the Operational

and Technology Risk Type Framework, with remediat

ion plans

implemented where necessary.

Governance committee oversight

At Board level, the Board Risk Committee exercises oversight

of Model Risk with

in the Group. At the execut

ive level, the

Group Risk Committee has appointed the Model Risk

Committee to ensure effective measurement and

management of Model Risk. Sub-committees such as the

Credit Model Assessment Committee, Traded Risk Model

Assessment Committee and Financ

ial Cr

ime Compliance

Model Assessment Committee oversee their respective

in-scope models and escalate material Model Risks to the

Model Risk Committee. In parallel, business and function-level

risk committees provide governance oversight of the models

used in their respective processes.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Model Risk Type Framework is the formal mechanism

through which the delegation of Model Risk authorit

ies

made.

The Global Head, Enterprise Risk Management delegates

authorit

ies to des

ignated ind

iduals or Policy Owners through

the RTF. The second-line ownership for Model Risk at country

level is delegated to Country Chief Risk Ofﬁcers at the

applicable branches and subsid

iar

ies.

The Model Risk Committee is responsible for approving

models for use. Model approval authority is also delegated to

the Credit Model Assessment Committee, Traded Risk Model

Assessment Committee, Financ

ial Cr

ime Compliance Model

Assessment Committee and ind

idual designated model

approvers for less material models.

The Group deﬁnes Model Risk as potential loss that

may occur as a consequence of decis

ions or the r

isk of

mis-estimat

ion that could be pr

inc

ipally based on the

output of models, due to errors in the development,

implementat

ion or use of such models.

Risk Appetite Statement

The Group has no appetite for material adverse

impl

icat

ions aris

ing from m

isuse of models or errors

in the development or implementat

ion of models;

whilst accepting model uncertainty.

Model Risk

313

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Monitor

ing

The Group monitors Model Risk via a set of Risk Appetite

metrics that are approved by the Board. Adherence to Model

Risk Appetite and any threshold breaches are reported

regularly to the Board Risk Committee, Group Risk Committee

and Model Risk Committee. These metrics and thresholds are

reviewed on an annual basis to ensure that threshold

calibrat

ion rema

ins appropriate and the themes adequately

cover the current risks.

Models undergo regular monitor

ing based on the

ir level of

perceived Model Risk, with monitor

ing results and breaches

presented to Model Risk Management and delegated model

approvers.

Model Risk Management produces Model Risk reports

covering the model landscape, which include performance

metrics, ident

iﬁed model

issues and remediat

ion plans. These

are presented for discuss

ion at the Model R

isk governance

committees on a regular basis.

Stress testing

Models play an integral role in the Group’s stress testing and

are rigorously user-tested to ensure that they are ﬁt-for-use

under stressed market condit

ions. Compl

iance with Model

Risk management requirements and regulatory guidel

ines are

also assessed as part of each stress test, with any ident

iﬁed

gaps mit

igated through model overlays and deﬁned

remediat

ion plans.

314

Standard Chartered

– Annual Report 2022

Risk review

Risk management approach

The Group deﬁnes Reputational and Sustainab

ity Risk

as the potential for damage to the franchise (such as

loss of trust, earnings, or market capital

isat

ion),

because of stakeholders taking a negative view of the

Group through actual or perceived actions or inact

ions,

includ

ing a fa

ilure to uphold responsible business

conduct or lapses in our commitment to do no

sign

iﬁcant env

ironmental and social harm through our

client, third-party relationsh

ips or our own operat

ions.

Risk Appetite Statement

The Group aims to protect the franchise from

material damage to its reputation by ensuring that

any business activ

ity

is satisfactor

ily assessed and

managed by the appropriate level of

management and governance oversight. This

includes a potential failure to uphold responsible

business conduct or lapses in our commitment to

do no sign

iﬁcant env

ironmental and social harm.

Reputational and Sustainab

ity Risk

Reputational and Sustainab

ity Risk continues to be an area

of growing importance, driv

ing a need for strateg

transformation across business activ

ies and risk

management to ensure that we uphold the princ

iples of

Responsible Business Conduct and continue to do the right

thing for our stakeholders, the environment and affected

communit

ies. Our pol

icy frameworks and Posit

ion Statements

integrate our values into our core working practices by

articulat

ing our approach to cl

ients in sensit

ive sectors and our

commitments to climate change and human rights. We

continue to progress on our transformation agenda, driv

ing

the Bank’s Net Zero commitments and build

ing a lead

ing

sustainable franchise. Our progress to date includes the

setting of public Net Zero targets, leadership in voluntary

carbon markets, and ongoing support of innovat

ion

in green,

transit

ion, and soc

ial ﬁnance.

The growth of Sustainable Finance products offering across

the banking industry has prompted stronger and more robust

regulations to prevent greenwashing. We are moving quickly

to integrate anti-greenwashing polic

ies, standards and

controls into our risk management activ

ies. As we prepare

for the varying regulatory developments across our footprint,

we continue to invest in data and infrastructure to reinforce

our compliance efforts and are actively engaging with several

of our regulatory supervisors. In 2022, we have increased our

capabil

ies in horizon scanning and focused on developing an

effective operating model to manage regulatory change to

bolster our efforts to systematically track emerging risks

across our business operations and supply chains.

Roles and responsib

ies

The Global Head, Enterprise Risk Management is the Risk

Framework Owner for Reputational and Sustainab

ity Risk

under the Group’s Enterprise Risk Management Framework.

The responsib

ity for Reputational and Sustainab

ity Risk

management is delegated to Reputational and Sustainab

ity

Risk Leads in ERM as well as Chief Risk Ofﬁcers at region,

country and client-business levels. They constitute the second

line of defence, overseeing and challenging the ﬁrst line of

defence, which resides with the Chief Executive Ofﬁcers,

Business Heads, Product Heads and Function Heads in respect

of risk management activ

ies of reputational and

sustainab

ity-related risks respectively.

In the ﬁrst line of defence, we have in 2022 appointed a Chief

Sustainab

ity Ofﬁcer (“CSO”) whose remit spans across both

Sustainab

ity strategy and client solutions. Reporting to the

CSO is our Sustainab

ity Strategy team, who manages the

overall Group Sustainab

ity strategy and engagement. On

client solutions, the Sustainable Finance team is responsible

for pan-bank sustainable ﬁnance products and frameworks to

help ident

ify green and susta

inable ﬁnance and transit

ion

ﬁnance opportunit

ies to a

id our clients on their sustainab

ity

journey. Furthermore, the Environmental and Social Risk

Management team (ESRM) provides dedicated advisory and

challenge to businesses on the management of

environmental and social risks and impacts aris

ing from the

Group’s client relationsh

ips and transact

ions.

Mit

igat

ion

In line with the princ

iples of Respons

ible Business Conduct and

Do No Sign

iﬁcant Harm, the Group deems Reputat

ional and

Sustainab

ity Risk to be driven by:

•

negative shifts in stakeholder perceptions, includ

ing sh

ifts

as a result of greenwashing claims, due to decis

ions related

to clients, products, transactions, third parties and strategic

coverage

•

potential material harm or degradation to the natural

environment (environmental) through actions/inact

ions of

the Group

•

potential material harm to ind

iduals or communit

ies

(social) risks through actions/inact

ions of the Group.

The Group’s Reputational Risk policy sets out the princ

ipal

sources of Reputational Risk driven by negative shifts in

stakeholder perceptions as well as responsib

ies, control and

oversight standards for ident

ify

ing, assessing, escalating and

effectively managing Reputational Risk. The Group takes a

structured approach to the assessment of risks associated

with how ind

idual client, transaction, product and strategic

coverage decis

ions may affect percept

ions of the

organisat

ion and

its activ

ies, based on explic

it pr

inc

iples

includ

ing, but not l

ited to human r

ights, gambling, defence

and dual use goods. Whenever potential for stakeholder

concerns is ident

iﬁed,

issues are subject to prior approval by a

management authority commensurate with the material

ity of

matters being considered. Such authorit

ies may accept or

decline the risk or impose condit

ions upon proposals, to

protect the Group’s reputation. In 2022, the Reputational Risk

Policy was enhanced to include more rigorous assessment of

clients operating in sectors which have heightened climate

risk.

The Group’s Sustainab

ity Risk policy sets out the requirements

and responsib

ies for manag

ing environmental and social

risks for the Group’s clients, third parties and in our own

operations, as guided by various industry standards such as

the OECD’s Due Dil

igence Gu

idance for Responsible Business

Conduct, Equator Princ

iples, UN Susta

inable Development

Goals and the Paris Agreement.

315

Standard Chartered

– Annual Report 2022

Risk review and Capital review

•

Clients are expected to adhere to min

imum regulatory and

compliance requirements, includ

ing cr

iter

ia from the Group’s

Posit

ion Statements. In 2022, the Susta

inab

ity Risk Policy

was enhanced to include the monitor

ing of

inherent risks

related to Sustainable Finance products and transactions

and clients throughout their lifecycle - from labelling to

disclosures.

•

Third parties such as suppliers must comply with the Group’s

Supplier Charter which sets out the Group’s expectations on

ethics, anti-bribery and corruption, human rights,

environmental, health and safety standards, labour and

protection of the environment.

•

With

in our operat

ions, the Group seeks to min

ise its

impact on the environment and have targets to reduce

energy, water and waste.

Reputational and Sustainab

ity Risk polic

ies and standards

are applicable to all Group entit

ies. However, local regulators

in some markets may impose addit

ional requ

irements on how

banks manage and track Reputational and Sustainab

ity Risk.

In such cases, these are complied with in addit

ion to Group

polic

ies and standards.

Governance committee oversight

At Board level, the Culture and Sustainab

ity Committee

provides oversight for our Sustainab

ity strategy while the

Board Risk Committee oversees Reputational and

Sustainab

ity Risk as part of the ERMF. The Group Risk

Committee (GRC) provides executive-level committee

oversight and delegates the authority to ensure effective

management of Reputational and Sustainab

ity Risk to the

Group Responsib

ity and Reputational Risk Committee

(GRRRC).

The GRRRC’s remit is to:

•

Challenge, constrain and, if required, stop business activ

ies

where Reputational and Sustainab

ity risks are not aligned

with the Group’s Risk Appetite.

•

Make decis

ions on Reputat

ional and Sustainab

ity Risk

matters assessed as high or very high based on the Group’s

Reputational and Sustainab

ity Risk material

ity assessment

matrix, and matters escalated from the regions or client

businesses.

•

Provide oversight of material Reputational and

Sustainab

ity Risk and/or thematic issues aris

ing from the

potential failure of other risk types.

•

Identify topical and emerging risks, as part of a dynamic risk

scanning process

•

Monitor exist

ing or new regulatory pr

ior

ies

The Sustainable Finance Governance Committee, appointed

by the GRRRC provides leadership, governance and oversight

for deliver

ing the Group’s susta

inable ﬁnance offering. This

includes:

•

Review

ing and support

ing the Group’s frameworks for

Green and Sustainable Products, and Transit

ion F

inance for

approval of GRRRC. These frameworks set out the

guidel

ines for approval of products and transact

ions which

carry the sustainable ﬁnance and/or transit

ion ﬁnance

label.

•

Decis

ion-mak

ing authority on the elig

ity of a susta

inable

asset for any risk-weighted assets (RWA) relief.

•

Approving sustainable ﬁnance and transit

ion ﬁnance labels

for products in addit

ion to regular product management

and governance

•

Review

ing the reputat

ional risks aris

ing from greenwash

ing

claims related to Sustainable Finance products and services.

The Group Non-Financ

ial R

isk Committee has oversight of the

control environment and effective management of

Reputational Risk incurred when there are negative shifts in

stakeholder perceptions of the Group due to failure of other

PRTs. The regional and client-business risk committees provide

oversight on the Reputational and Sustainab

ity Risk proﬁle

with

in the

ir remit. The Country Non-Financ

ial R

isk Committee

(CNFRC) provides oversight of the Reputational and

Sustainab

ity Risk proﬁle at a country level.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Reputational and Sustainab

ity RTF is the formal

mechanism through which the delegation of Reputational

and Sustainab

ity Risk authorit

ies

is made. The Global Head,

Enterprise Risk Management delegates risk acceptance

authorit

ies for stakeholder percept

ion risks to designated

ind

iduals in the ﬁrst line and second line or to committees

such as the GRRRC via risk authority matrices.

These risk authority matrices are tiered at country, regional,

business segment or Group levels and are established for risks

incurred in strategic coverage, clients, products or

transactions. For environmental and social risks, the ESRM

team must review and support the risk assessments for clients

and transactions and escalate to the Reputational and

Sustainab

ity Risk leads as required.

Monitor

ing

Exposure to stakeholder perception risks aris

ing from

transactions, clients, products and strategic coverage are

monitored through established triggers outlined in risk

material

ity matr

ices to prompt the right levels of risk-based

considerat

ion by the ﬁrst l

ine and escalations to the second

line where necessary. Risk acceptance decis

ions and themat

trends are also being reviewed on a period

ic bas

is.

Exposure to Sustainab

ity Risk is monitored through triggers

embedded with

in the ﬁrst-l

ine processes where environmental

and social risks are considered for clients and transactions via

the Environmental and Social Risk Assessments and

considered for vendors in our supply chain through the

Modern Slavery questionna

ires.

Furthermore, monitor

ing and report

ing on the risk appetite

metrics ensures that there is appropriate oversight by

Management Team and Board over performance and

breaches of thresholds across key metrices namely in

concentration of material reputational risk, level of alignment

with Group’s Net Zero aspirat

ions and Pos

ion Statements,

and modern slavery risks in our suppliers.

Stress testing

Reputational Risk outcomes are taken into account in

enterprise stress tests and incorporated into the Group’s stress

testing scenarios. For example, the Group might consider

what impact a hypothetical event leading to loss of

conﬁdence among liqu

ity providers in a particular market

might have, or what the impl

icat

ions might be for supporting

part of the organizat

ion

in order to protect the brand. As

Sustainab

ity Risk continues to evolve as an area of emerging

regulatory focus with various markets developing ESG

regulatory guidance, we are keeping pace with external

developments to enable us to explore meaningful scenario

analysis in the future with the aim of advancing Reputational

and Sustainab

ity Risk management.

316

Standard Chartered

– Annual Report 2022

Risk review

Risk management approach

The Group recognises Climate Risk as an Integrated

Risk Type. Climate Risk is deﬁned as the potential for

ﬁnancial loss and non-ﬁnancial detr

iments aris

ing from

climate change and society’s response to it.

Risk Appetite Statement

The Group aims to measure and manage ﬁnanc

ial

and non-ﬁnancial r

isks from climate change, and

reduce emiss

ions related to our own act

ies and

those related to the ﬁnancing of cl

ients in

alignment with the Paris Agreement.

Climate Risk

Climate Risk has been recognised as an emerging risk since

2017 and was elevated to an Integrated Risk Type (previously

known as material cross-cutting risk) with

in the ERMF, our

central risk framework in 2019. We have made further progress

this year in embedding Climate risk considerat

ions across the

impacted PRTs and by using the results from our management

scenario analysis, we are build

ing a good understand

ing of

the markets and industr

ies where the effects of cl

imate

change will have the greatest impact. However, it is still a

relatively nascent risk area which will mature and develop

over time, particularly as data availab

ity improves.

Roles and responsib

ies

The three lines of defence model as per the Enterprise Risk

Management Framework applies to Climate Risk. The GCRO

has the ultimate second-line and senior management

responsib

ity for Climate Risk. The GCRO is supported by the

Global Head, Enterprise Risk Management who has day-to-

day oversight and central responsib

ity for second-line

Climate Risk activ

ies. As Climate Risk is integrated into the

relevant PRTs, second-line responsib

ies l

ie with the Risk

Framework Owner (at Group, regional and country level), with

subject matter expertise support from the central Climate Risk

team.

Mit

igat

ion

As an Integrated Risk Type manifests through other PRTs, risk

mit

igat

ion activ

ies are specif

ic to

ind

idual PRTs. The Group

has made progress to integrate Climate Risk into PRT

processes. Climate Risk assessments are considered as part of

Reputational and Sustainab

ity transaction reviews for clients

and transactions in high carbon sectors. We have directly

engaged with clients on their adaptation and mit

igat

ion

plans using client level Climate Risk questionna

ires and

integrated climate risk into the credit process for ~70% of our

corporate client exposure in CCIB. As part of quarterly credit

portfolio reviews in CPBB, physical risk assessments for the

resident

ial mortgage portfol

ios are also being monitored for

concentration levels.

The Traded Risk stress testing framework covers market

impacts from Climate Risk – this includes a transit

ion r

isk and

two physical risk scenarios. Physical and transit

ion r

isk ratings

for sovereigns are widely used across the Group for risk

management and reporting purposes.

The focus for Operational and Technology Risk was orig

inally

on Property, Resil

ience and Th

ird-Party Risk management, and

is now being expanded to material technology arrangements.

We have also completed liqu

ity risk assessments for our top

liqu

ity providers. Relevant polic

ies and standards across

PRTs have been updated to factor in Climate Risk

considerat

ions and a focus area for 2022 was to bu

ild out our

risk management, data and modelling capabil

ies.

Governance committee oversight

Board-level oversight is exercised through the Board Risk

Committee (BRC), and regular Climate Risk updates are

provided to the Board and BRC. At an executive level, the

Group Risk Committee (GRC) oversees implementat

ion of the

Climate Risk workplan. The GRC has also appointed a Climate

Risk Management Committee consist

ing of sen

ior

representatives from the Business, Risk, Strategy and other

functions such as Compliance, Audit and Finance. The Climate

Risk Management Committee meets at least six times a year

to oversee the implementat

ion of Cl

imate Risk workplan and

progress in meeting regulatory requirements, monitor the

Climate Risk proﬁle of the Group and review Climate Risk-

related disclosures and stress tests. We have also

strengthened country and regional governance oversight for

the Climate Risk proﬁle across our key markets in 2022.

Tools and methodologies

Applying exist

ing r

isk management tools to quantify Climate

Risk is challenging given inherent data and methodology

challenges, includ

ing the need to be forward-look

ing over

long time horizons. To quantify climate physical and transit

ion

risk we leverage and have invested in a number of areas,

includ

ing tools and partnersh

ips:

•

Munich Re – we are using Munich Re’s physical risk

assessment tool, which is built on extensive re-insurance

experience.

•

Baringa Partners – we are using Baringa’s ﬂagship climate

models to understand climate scenarios, and compute

transit

ion r

isk and temperature alignment.

•

Standard & Poor – we are leveraging S&P and Trucost’s

wealth of climate data covering asset locations, energy

mixes and emiss

ions.

•

Imperial College – we are leveraging Imperial’s academic

expertise to advance our understanding of climate science,

upskill our staff and senior management, and

•

progress the state of independent research on climate risks

with an acute focus on emerging markets.

•

Deloitte – we are working with Deloitte to build internal

IFRS9 and stress testing models.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Global Head, Enterprise Risk Management is supported

by a centralised Climate Risk team with

in the ERM funct

ion.

The Global Head, Climate Risk and Net Zero Oversight is

responsible for ensuring and executing the delivery of the

Climate Risk workplan which will deﬁne decis

ion-mak

ing

authorit

ies and delegat

ions across the Group.

317

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Monitor

ing

The Climate Risk Appetite Statement is approved and

reviewed annually by the Board, following the

recommendation of the Board Risk Committee.

The PLC Group has developed its ﬁrst-generation Climate Risk

reporting and Board/Management Team Level Risk Appetite

metrics and this will continue to be enhanced in 2023.

Management informat

ion and R

isk Appetite metrics are also

being progressively rolled out at the regional and country

level.

Stress testing

As Climate Risk intens

iﬁes over t

ime, the future global

temperature rise will depend on today’s transit

ion pathway.

Consider

ing d

ifferent transit

ion scenar

ios is crucial to

assessing Climate Risk over the next 10, 20 and 50 years. Stress

testing and scenario analysis are used to assess capital

requirements for Climate Risk and since 2020 physical and

transit

ion r

isks have been included in the PLC Group Internal

Capital Adequacy Assessment Process (ICAAP). In 2022, the

PLC Group undertook a number of Climate Risk stress tests,

includ

ing by the Monetary Author

ity of Singapore and internal

management scenario analysis. We will rely on these stress

tests to understand the Group level vulnerabil

ies given the

sign

iﬁcant overlap between SC Bank and PLC Group’s

activ

ies.

In 2023, the PLC Group intends to extend its management

scenario capabil

ies, which will strengthen business strategy

and ﬁnancial plann

ing and support the PLC Group’s net zero

journey.

318

Standard Chartered

– Annual Report 2022

Risk review

Risk management approach

The Group recognises Dig

ital Assets R

isk as an

Integrated Risk Type. Dig

ital Assets R

isk is deﬁned as

the potential for regulatory penalties, ﬁnanc

ial loss

and/or reputational damage to the Group resulting

from dig

ital assets exposure or d

ital assets related

activ

ies aris

ing from the Group’s Cl

ients, Products and

Projects.

Risk Appetite Statement

As Dig

ital Assets R

isk manifests through the various

PRTs, the specif

ic R

isk Appetite statements for the

PRTs apply.

Dig

ital Assets R

isk

Dig

ital Assets (DA) R

isk has been managed under the Dig

ital

Assets Risk Management Approach since 2020 and was

formalised as an Integrated Risk Type (previously known as

material cross cutting risk) with

in the Enterpr

ise Risk

Management Framework (ERMF). Dig

ital Assets R

isk follows

the prescribed robust risk management practices across the

PRTs, with specif

ic expert

ise applied from Dig

ital Assets

experts. Risk management practices take guidance from the

“Dear CEO” letters published by the Prudential Regulatory

Authority and the Financ

ial Conduct Author

ity in June 2018,

with updated notices in June 2022. This is a developing risk

area which will mature and stabil

ise over t

ime as the

technology and associated research becomes more

established.

Roles and responsib

ies

The three lines of defence model deﬁned in the ERMF applies

to Dig

ital Assets R

isk. The GCRO has the second-line and

senior management responsib

ity for Dig

ital Assets R

isk with

respect to the framework. The respective Business Segments

Senior Managers are responsible for the overall management

of Dig

ital Assets

iat

ives w

ith

in the

ir segments.

The GCRO is supported by the Global Head, Enterprise Risk

Management and the Global Head, Dig

ital Assets R

isk

Management who have day-to-day oversight and central

responsib

ity for second line Dig

ital Assets R

isk activ

ies. As

Dig

ital Assets R

isk is integrated into the relevant PRTs, Risk

Framework Owners (RFOs) and dedicated Subject Matter

Experts (SMEs) across the PRTs also have second line

responsib

ies for D

ital Assets R

isk.

Mit

igat

ion

The Group deploys a DA specif

ic pol

icy to outline incremental

risk management requirements for DA related activ

ies. The

Group’s polic

ies for other PRTs also

include DA requirements

where relevant Risk mit

igat

ion activ

ies are also specif

ic to

ind

idual PRTs and the Group has undertaken development

and integrat

ion of D

ital Assets R

isk into the PRT processes.

Dig

ital Assets R

isk Assessments are conducted on certain

higher-risk DA related Projects and Products. These specif

risk assessments detail the specif

inherent risks, residual risks,

controls and mit

igants across the PRTs and are rev

iewed and

supported by the respective RFOs and DA SMEs.

Governance committee oversight

Board-level oversight is exercised through the Board Risk

Committee (BRC), and DA Risk updates are provided to the

Board and BRC, as requested. At the executive level, the Group

Risk Committee (GRC) oversees the risk management of DA.

The GCRO has also appointed a dedicated Dig

ital Assets R

isk

Committee (DRC) consist

ing of sen

ior representatives, RFOs

and SMEs across the Group includ

ing the bus

iness, risk, and

other functions such as legal. The DRC meets at the pre-

deﬁned frequency, a min

imum of four t

imes per year, to review

and assess the detailed risk assessments related to DA

Projects and Products, discuss development and

implementat

ion of the DA r

isk management, and to provide

structured governance around DA.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Global Head, Enterprise Risk Management is supported

by a centralised DA team with

in the ERM funct

ion and is

responsible for the DA framework. The respective PRT RFOs

and SMEs util

ise dec

ion mak

ing authorit

ies granted to them

with

in the

ir respective PRTs or in ind

idual capacit

ies.

Monitor

ing

Dig

ital Assets are mon

itored through the exist

ing Group R

isk

Appetite metrics across the PRTs. In addit

ion, spec

ic D

ital

Assets Risk Appetite metrics are approved and reviewed

annually by GRC. DA decis

ions relat

ing to other PRTs are taken

with

in the author

ies for the respect

ive PRT.

Stress testing

Stress testing and scenario analysis are used to help assess

capital requirements for Dig

ital Assets R

isk and form part of

the overall scenario analysis portfolio managed under the

Operational and Technology Risk Type Framework. Specif

scenarios are developed annually with collaboration between

the business, which owns and manages the risk, and the DA

Risk function, to consider relevant DA scenarios. This approach

considers the impact of extreme but plausible scenarios on

the PLC Group’s capital proﬁle with respect to DA.

319

Standard Chartered

– Annual Report 2022

Risk review and Capital review

The Group recognises Third Party Risk as an Integrated

Risk Type. Third Party Risk is deﬁned as the potential for

loss or adverse impact from failure to manage multiple

risks aris

ing from the use of Th

ird Parties, and is the

aggregate of these risks.

Risk Appetite Statement

This IRT is supported by Risk Appetite metrics

embedded with

in relevant PRTs. The engagement

of Third Parties is essential for the Group to operate

efﬁciently and effect

ively. This may introduce

incremental risks which, if not managed correctly,

could result in regulatory non-compliance, ﬁnanc

ial

loss and/or adverse impact to clients. We continue

to enhance our polic

ies, standards, processes and

controls to ensure we safely manage any

incremental risks introduced by the use of Third

Parties.

Third Party Risk

Roles and Responsib

ies

The Global Head of Risk, Functions and Operational Risk has

second line oversight responsib

ity for Third Party Risk as

deﬁned in the Enterprise Risk Management Framework. The

three lines of defence model applies to Third Party Risk, and

roles and responsib

ies are further deﬁned

in the Third Party

Risk Management Policy and Standard. It is important to note

that as an Integrated Risk Type, the risks associated with the

management of Third Parties material

ise across mult

iple PRTs.

The Risk Framework Owners for the PRTs are therefore

responsible for embedding requirements to manage Third

Party Risk with

in the

ir Risk Type Frameworks, Polic

ies and

Standards as appropriate, and ensuring compliance to the

min

imum requ

irements deﬁned by the Global Head of Risk,

Functions and Operational Risk.

Mit

igat

ion

To ensure we continue to prior

ise the engagement of Third

Parties, while safely managing any risks, the Third Party Risk

Management Policy and Standard, in conjunct

ion w

ith the

PRT Polic

ies and Standards, hol

ist

ically set out the Group’s

min

imum controls requ

irements for the ident

iﬁcation,

mit

igat

ion and management of risks aris

ing from the use of

Third Parties. These min

imum control requ

irements have been

enhanced in 2022 to ensure compliance with new

requirements issued by our regulators.

The Group aims to manage its risk proﬁle with

in R

isk Appetite,

and in order to do so, Risk Appetite metrics for Third Party Risk

are embedded with

in the respect

ive PRTs includ

ing ICS,

Compliance, Financ

ial Cr

ime and Operational and

Technology Risk. To further supplement this, addit

ional work

underway to enhance the Group’s approach to concentration

risk. Where appropriate, Risk Appetite metrics are cascaded

to countries.

Governance Committee Oversight

At the Board level, the Board Risk Committee oversees the

effective management of Third Party Risk. At the executive

level, the Group Risk Committee is responsible for the

governance and oversight of Third Party Risk for the Group.

The Group Third Party Risk Management Committee

(GTPRMC), established under the Group Non-Financ

ial R

isk

Committee, is responsible for overseeing all Third Party Risk

types and associated risks across the Group, as well as the

effective embedding of Third Party Risk across the respective

PRTs.

The management of Third Party Risk is overseen at a Country

or entity level by the Country Third Party Risk Management

Committee (CTPRMC). In smaller markets the responsib

ies

are exercised directly by the Executive Risk Committee (for

subsid

iar

ies) or Country Risk Committee (for branches).

Decis

ion Mak

ing Authorit

ies and Delegat

ion

The Group Chief Risk Ofﬁcer has second line responsib

ity for

Third Party Risk under the Senior Managers Regime. The

Group Chief Risk Ofﬁcer has delegated the Integrated Risk

Framework Owner responsib

ies assoc

iated with Third Party

Risk to the Global Head of Risk, Functions and Operational

Risk, through the Enterprise Risk Management Framework.

Second line oversight and challenge responsib

ies for Th

ird

Party Risk at a Country or entity level are delegated to the

Country Chief Risk Ofﬁcers.

Monitor

ing

The monitor

ing of Th

ird Party Risk with

in the Group’s Process

Universe is managed in accordance with the Operational and

Technology Risk Type Framework.

The Third Party Risk management proﬁle is reported to the

GTPRMC, and includes the monitor

ing and overs

ight on Risk

Appetite, assessment of new Third Party arrangements,

on-going performance monitor

ing of Th

ird Party

arrangements, internal and external events and elevated risks

with appropriate treatment plans.

Stress Testing

Stress testing and scenario analysis are used to assess capital

requirements, and for Third Party Risk, form part of the overall

scenario analysis portfolio managed under the Operational

and Technology Risk Type Framework. Specif

ic scenar

ios are

developed annually with collaboration between the business,

which owns and manages the risk, and the second line of

defence. This approach considers the impact of extreme but

plausible scenarios on the Group’s Risk proﬁle.

320

Standard Chartered

– Annual Report 2022

Capital review

Capital summary

The Group’s capital, leverage and min

imum requ

irements for own funds and elig

ible l

iab

ies (MREL) pos

ion

is managed

with

in the Board-approved r

isk appetite. The Group is well capital

ised w

ith low leverage and high levels of loss-absorbing

capacity.

2022

2021

CET1 capital

14.0%

14.1%

Tier 1 capital

16.6%

Total capital

21.7%

21.3%

Leverage ratio

4.8%

4.9%

MREL ratio

32.1%

31.7%

Risk-weighted assets (RWA) $mill

ion

244,711

271,233

The Group‘s capital, leverage and MREL posit

ions were all

above current requirements and Board-approved Risk

Appetite.

The Group’s CET1 capital decreased 19 basis points to 14.0 per

cent of RWA since FY2021. Proﬁts and RWA optim

isat

ions were

more than offset by distr

ibut

ions (includ

ing ord

inary share

buy-backs of $1.3 bill

ion dur

ing the year), regulatory

headwinds, movements in FVOCI and FX translation reserves

and an increase in regulatory deductions.

The PRA updated the Group’s Pillar 2A requirement during

Q4 2022. As at 31 December 2022 the Group’s Pillar 2A was

3.7 per cent of RWA, of which at least 2.1 per cent must be held

in CET1 capital. The Group’s min

imum CET1 cap

ital

requirement was 10.4 per cent at 31 December 2022. The UK

countercyclical buffer increased to 1.0 per cent which impacts

Group CET1 min

imum requ

irement by approximately 8 basis

points from December 2022.

From 1 January 2022 RWA increased due to (a) post model

adjustments following new PRA rules on IRB models resulted in

approximately $5.7 bill

ion of add

ional RWA and (b) the

introduct

ion of standard

ised rules for Counterparty Credit Risk

on derivat

ives and other

instruments resulted in

approximately $1.9 bill

ion of add

ional RWA. These regulatory

changes includ

ing removal of software beneﬁt and others

reduced the CET1 ratio by approximately 80 basis points.

The Group CET1 capital ratio at 31 December 2022 reﬂects the

share buy-backs of $754 mill

ion completed

in the ﬁrst half of

2022 and $504 mill

ion completed

in the third and fourth

quarter of 2022. The CET1 capital ratio also includes an

accrual for the FY 2022 div

idend. The Board has

recommended a ﬁnal div

idend for FY 2022 of $405 m

ill

ion or

14 cents per share resulting in a full year 2022 div

idend of

18 cents per share, a 50 per cent increase on the 2021 div

idend.

In addit

ion, the Board has announced a further share buy-

back of $1 bill

ion, the

impact of this will reduce the Group’s

CET1 capital by around 40 basis points in the ﬁrst quarter

of 2023.

The Group expects to manage CET1 capital dynamically

with

in our 13-14 per cent target range,

in support of our aim

of deliver

ing future susta

inable shareholder distr

ibut

ions.

The Group’s MREL leverage requirement as at 31 December

2022 was 27.3 per cent of RWA. This is composed of a

min

imum requ

irement of 23.6 per cent of RWA and the

Group’s combined buffer (compris

ing the cap

ital conservation

buffer, the G-SII buffer and the countercyclical buffer). The

Group’s MREL ratio was 32.1 per cent of RWA and 9.2 per cent

of leverage exposure at 31 December 2022.

During 2022, the Group successfully raised $7.2 bill

ion of MREL

elig

ible secur

ies from

its holding company, Standard

Chartered PLC. Issuance was across the capital structure

includ

ing $1.3 b

ill

ion of Add

ional T

ier 1, $0.8 bill

ion of T

ier 2

and $5.2 bill

ion of callable sen

ior debt.

The Group is a G-SII, with a 1.0 per cent G-SII CET1 capital

buffer. The Standard Chartered PLC G-SII disclosure is

published at: sc.com/en/investors/ﬁnanc

ial-results.

The Capital review provides an analysis of the Group’s capital and leverage posit

ion,

and requirements.

321

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Capital base

(audited)

2022

$mill

ion

2021

$mill

ion

CET1 capital instruments and reserves

Capital instruments and the related share premium accounts

5,436

5,528

Of which: share premium accounts

3,989

Retained earnings

25,154

24,968

Accumulated other comprehensive income (and other reserves)

8,165

11,805

Non-controlling interests (amount allowed in consolidated CET1)

189

201

Independently audited year-end proﬁts

2,988

2,346

Foreseeable div

idends

(648)

(493)

CET1 capital before regulatory adjustments

41,284

44,355

CET1 regulatory adjustments

Addit

ional value adjustments (prudent

ial valuation adjustments)

(854)

(665)

Intangible assets (net of related tax liab

ity)

(5,802)

(4,392)

Deferred tax assets that rely on future proﬁtabil

ity (excludes those aris

ing from temporary d

ifferences)

(76)

(150)

Fair value reserves related to net losses on cash ﬂow hedges

564

Deduction of amounts resulting from the calculation of excess expected loss

(684)

(580)

Net gains on liab

ies at fa

ir value resulting from changes in own credit risk

Deﬁned-beneﬁt pension fund assets

(116)

(159)

Fair value gains aris

ing from the

inst

itut

ion’s own credit risk related to derivat

ive l

iab

ies

(90)

(60)

Exposure amounts which could qualify for risk weight

ing of 1,250%

(103)

(36)

Other regulatory adjustments to CET1 capital

(29)

–

Total regulatory adjustments to CET1

(7,127)

(5,993)

CET1 capital

34,157

38,362

Addit

ional T

ier 1 capital (AT1) instruments

6,504

6,811

AT1 regulatory adjustments

(20)

Tier 1 capital

40,641

45,153

Tier 2 capital instruments

12,540

12,521

Tier 2 regulatory adjustments

(30)

Tier 2 capital

12,510

12,491

Total capital

53,151

57,644

Total risk-weighted assets (unaudited)

244,711

271,233

Capital base is prepared on the regulatory scope of consolidat

ion

Retained earnings includes IFRS 9 capital relief (transit

ional) of $106 m

ill

ion

Other regulatory adjustments to CET1 capital includes Insufﬁc

ient coverage for non-perform

ing exposures of $(29) mill

ion

322

Standard Chartered

– Annual Report 2022

Capital review

Movement in total capital (audited)

2022

$mill

ion

2021

$mill

ion

CET1 at 1 January

38,362

38,779

Ordinary shares issued in the period and share premium

–

Share buy-back

(1,258)

(506)

Proﬁt for the period

2,988

2,346

Foreseeable div

idends deducted from CET1

(648)

(493)

Difference between div

idends pa

id and foreseeable div

idends

(301)

(303)

Movement in goodwill and other intang

ible assets

(1,410)

(118)

Foreign currency translation differences

(1,892)

(652)

Non-controlling interests

(12)

Movement in elig

ible other comprehens

ive income

(1,224)

(306)

Deferred tax assets that rely on future proﬁtabil

ity

(12)

(Increase)/decrease in excess expected loss

(104)

121

Addit

ional value adjustments (prudent

ial valuation adjustment)

(189)

(175)

IFRS 9 transit

ional

impact on regulatory reserves includ

ing day one

(146)

(142)

Exposure amounts which could qualify for risk weight

ing

(67)

(10)

Fair value gains aris

ing from the

inst

itut

ion’s own credit risk related to derivat

ive l

iab

ies

(30)

(12)

Others

(176)

CET1 at 31 December

34,157

38,362

AT1 at 1 January

6,791

5,612

Net issuances (redemptions)

241

1,736

Foreign currency translation difference

(2)

Excess on AT1 grandfathered lim

it (

inel

ible)

(557)

(555)

AT1 at 31 December

6,484

6,791

Tier 2 capital at 1 January

12,491

12,657

Regulatory amortisat

ion

778

(1,035)

Net issuances (redemptions)

(1,098)

573

Foreign currency translation difference

(337)

(181)

Tier 2 inel

ible minor

ity

interest

102

(81)

Recognit

ion of

inel

ible AT1

557

555

Others

Tier 2 capital at 31 December

12,510

12,491

Total capital at 31 December

53,151

57,644

The main movements in capital in the period were:

•

CET1 capital decreased by $4.2 bill

ion as reta

ined proﬁts of $3.0 bill

ion were more than offset by share buy-backs of

$1.3 bill

ion, d

istr

ibut

ions paid and foreseeable of $0.9 bill

ion, fore

ign currency translation impact of $1.9 bill

ion, movement

FVOCI of $1.3 bill

ion, regulatory changes

includ

ing removal of software beneﬁts of $1.2 b

ill

ion and an

increase in regulatory

deductions and other movements of $0.7 bill

ion

•

AT1 capital decreased by $0.3 bill

ion follow

ing the redemption of $1.0 bill

ion of 7.5 per cent secur

ies and the ﬁnal $0.6 b

ill

ion

derecognit

ion of legacy T

ier 1 securit

ies, partly offset by the

issuance of $1.3 bill

ion of 7.75 per cent secur

ies

•

Tier 2 capital remains largely unchanged as issuance of $0.8 bill

ion of new T

ier 2 instruments and recognit

ion of

inel

ible AT1

were offset by regulatory amortisat

ion and the redempt

ion of $1.8 bill

ion of T

ier 2 during the year

323

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Risk-weighted assets by business

2022

Credit risk

$mill

ion

Operational risk

$mill

ion

Market risk

$mill

ion

Total risk

$mill

ion

Corporate, Commercial & Institut

ional Bank

ing

110,103

17,039

16,440

143,582

Consumer, Private & Business Banking

42,092

8,639

–

50,731

Ventures

1,350

1,358

Central & Other items

43,310

1,493

4,237

49,040

Total risk-weighted assets

196,855

27,177

20,679

244,711

2021

Credit risk

$mill

ion

Operational risk

$mill

ion

Market risk

$mill

ion

Total risk

$mill

ion

Corporate, Commercial & Institut

ional Bank

ing

125,813

16,595

20,789

163,197

Consumer, Private & Business Banking

42,731

8,501

–

51,232

Ventures

756

–

761

Central & Other items

50,288

2,015

3,740

56,043

Total risk-weighted assets

219,588

27,116

24,529

271,233

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from

1 January 2022. Prior period has been restated

Risk-weighted assets by geographic region

2022

$mill

ion

2021

$mill

ion

Asia

150,816

170,381

Africa & Middle East

40,716

48,852

Europe & Americas

50,174

50,283

Central & Other items

3,005

1,717

Total risk-weighted assets

244,711

271,233

Movement in risk-weighted assets

Credit risk

Operational

risk

$mill

ion

Market risk

$mill

ion

Total risk

$mill

ion

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

Other items

$mill

ion

Total

$mill

ion

At 31 December 2020

127,581

44,755

289

47,816

220,441

26,800

21,593

268,834

At 1 January 2021

127,581

44,755

289

47,816

220,441

26,800

21,593

268,834

Asset growth & mix

2,269

3,612

467

3,894

10,242

–

10,242

Asset quality

(1,537)

(662)

–

(2,186)

–

(2,186)

Risk-weighted assets efﬁc

ienc

ies

(415)

(30)

–

(657)

(1,102)

–

(1,102)

Model Updates

–

(3,701)

–

(3,701)

–

(3,701)

Methodology and policy changes

–

2,065

Acquis

ions and disposals

–

Foreign currency translation

(2,085)

(1,243)

–

(1,106)

(4,434)

–

(4,434)

Other, Including non-credit risk

movements

–

328

316

871

1,515

At 31 December 2021

125,813

42,731

756

50,288

219,588

27,116

24,529

271,233

Asset growth & mix

(13,213)

(984)

594

(10,034)

(23,637)

–

(23,637)

Asset quality

(4,258)

431

–

7,344

3,517

–

3,517

Risk-weighted assets efﬁc

ienc

ies

–

Model Updates

4,329

1,420

–

5,749

–

(1,000)

4,749

Methodology and policy changes

2,024

–

2,202

–

1,500

3,702

Acquis

ions and disposals

–

Foreign currency translation

(4,883)

(1,591)

–

(3,376)

(9,850)

–

(9,850)

Other, Including non-credit risk

movements

291

–

(1,005)

(714)

(4,350)

(5,003)

At 31 December 2022

110,103

42,092

1,350

43,310

196,855

27,177

20,679

244,711

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from

1 January 2022. Prior period has been restated

Corporate, Commercial & Institut

ional Bank

ing asset growth & mix includes optim

isat

ion in

iat

ives of $(13.9) b

ill

ion and other efﬁciency act

ions of $(7.2) bill

ion.

Central & Other items asset growth & mix includes other efﬁc

iency act

ions, mainly relating to credit insurance of $(3.9) bill

ion

324

Standard Chartered

– Annual Report 2022

Capital review

Movements in risk-weighted assets

RWA decreased by $26.5 bill

ion, or 9.8 per cent from

31 December 2021 to $244.7 bill

ion. Th

is was mainly due to

decrease in Credit Risk RWA of $22.7 bill

ion and Market R

isk

RWA of $3.9 bill

ion, part

ially offset by marginal increase in

Operational Risk RWA of $0.1 bill

ion.

Corporate, Commercial & Institut

ional Bank

ing

Credit Risk RWA decreased by $15.7 bill

ion, or 12.5 per cent

from 31 December 2021 to $110.1 bill

ion ma

inly due to:

•

$13.2 bill

ion decrease from changes

in asset growth & mix

of which:

– $13.9 bill

ion decrease from opt

isat

ion actions includ

ing

reduction in lower returning portfolios

– $7.2 bill

ion decrease from other bus

iness efﬁc

iency act

ions

– $7.9 bill

ion

increase from asset balance growth

•

$4.9 bill

ion decrease from fore

ign currency translation

•

$4.3 bill

ion decrease ma

inly due to improvement in asset

quality reﬂecting client upgrades partially offset by

sovereign downgrades in Africa & Middle East

•

$4.3 bill

ion

increase from revised rules on capital

requirements

•

$2.1 bill

ion

increase from revised rules on capital

requirements

•

$0.3 bill

ion

increase from a process enhancement relating

to certain Transaction Banking facil

ies

Consumer, Private & Business Banking

Credit Risk RWA decreased by $0.6 bill

ion, or 1.5 per cent from

31 December 2021 to $42.1 bill

ion ma

inly due to:

•

$1.6 bill

ion decrease from fore

ign currency translation

•

$0.9 bill

ion decrease from changes

in asset growth & mix

mainly from Asia

•

$1.4 bill

ion

increase from industry-wide regulatory changes

to align IRB model performance

•

$0.4 bill

ion

increase mainly due to deteriorat

ion

in asset

quality mainly in Asia

•

$0.1 bill

ion

increase from revised rules on capital

requirements

Ventures

Ventures is comprised of Mox Bank Lim

ited, Trust Bank and

SC Ventures. Credit Risk RWA increased by $0.6 bill

ion, or

78.6 per cent from 31 December 2021 to $1.4 bill

ion from asset

balance growth, mainly from Mox

Central & Other items

Central & Other items RWA mainly relate to the Treasury

Markets liqu

ity portfolio, equity investments and current &

deferred tax assets.

Credit Risk RWA decreased by $7.0 bill

ion, or 13.9 per cent from

31 December 2021 to $43.3 bill

ion ma

inly due to:

•

$10.0 bill

ion decrease from changes

in asset growth & mix of

which:

– $6.1 bill

ion decrease from reduct

ion in asset balances

mainly from Asia

– $3.9 bill

ion decrease from cred

it protection on certain

products

•

$3.4 bill

ion decrease from fore

ign currency translation

•

$1.0 bill

ion decrease due to cessat

ion of software relief

•

$7.3bn bill

ion

increase due to deteriorat

ion

in asset quality

mainly from sovereign downgrades in Africa & Middle East

Market Risk

Total Market Risk RWA decreased by $3.9 bill

ion, or 15.7 per

cent from 31 December 2021 to $20.7 bill

ion due to:

•

$3.8 bill

ion decrease

in Standardised Approach (SA) Specif

Interest Rate Risk RWA due to reductions in the traded

credit portfolio

•

$1.2 bill

ion decrease

in Internal Models Approach (IMA)

stressed VaR RWA due to reduced IMA posit

ions

•

$1.0 bill

ion decrease w

ith enhanced methodology for IMA

VaR and stressed VaR

•

$1.5 bill

ion

increase due to higher IMA (IMA) RWA multipl

ier

from elevated back-testing exceptions

•

$0.5 bill

ion

increase in SA Structural FX risk with increased

net SFX posit

ions after hedg

ing

•

$0.1 bill

ion net

increase due to other ind

idually smaller

movements

Operational Risk

Operational Risk RWA increased by $0.1 bill

ion, or 0.2 per cent

from 31 December 2021 to $27.2 bill

ion ma

inly due to marginal

increase in average income as measured over a rolling

three-year time horizon for certain products.

325

Standard Chartered

– Annual Report 2022

Risk review and Capital review

Leverage ratio

The Group’s leverage ratio, which excludes qualify

ing cla

ims on central banks, was 4.8 per cent at FY2022, which was above

the current min

imum requ

irement of 3.7 per cent. The leverage ratio was 14 basis points lower than FY21. Leverage exposure

decreased by $56.8 bill

ion from a decrease

in on-balance sheet items of $7.9 bill

ion, decrease

in off-balance sheet items and

others of $50.8 bill

ion and a secur

ies ﬁnancing transact

ions add-on increase of $1.8 bill

ion. The decrease

in exposures was

largely driven by optim

isat

ion in

iat

ives. End po

int Tier 1 decreased by $4.0 bill

ion as CET1 cap

ital reduced by $4.2 bill

ion and the

issuance of $1.25 bill

ion 7.75 per cent AT1 secur

ies was partly offset by the redempt

ion of $1 bill

ion 7.5 per cent AT1 secur

ies.

Leverage ratio

2022

$mill

ion

2021

$mill

ion

Tier 1 capital (transit

ional)

40,641

45,153

Addit

ional T

ier 1 capital subject to phase out

–

(557)

Tier 1 capital (end point)

40,641

44,596

Derivat

ive ﬁnancial

instruments

63,717

52,445

Derivat

ive cash collateral

12,515

9,217

Securit

ies ﬁnancing transact

ions (SFTs)

89,967

88,418

Loans and advances and other assets

653,723

677,738

Total on-balance sheet assets

819,922

827,818

Regulatory consolidat

ion adjustments¹

(71,728)

(63,704)

Derivat

ives adjustments

Derivat

ives nett

ing

(47,118)

(34,819)

Adjustments to cash collateral

(10,640)

(17,867)

Net written credit protection

548

1,534

Potential future exposure on derivat

ives

35,824

50,857

Total derivat

ives adjustments

(21,386)

(295)

Counterparty Risk leverage exposure measure for SFTs

15,553

13,724

Off-balance sheet items

119,049

139,505

Regulatory deductions from Tier 1 capital

(7,099)

(5,908)

Total exposure measure excluding claims on central banks

854,311

911,140

Leverage ratio excluding claims on central banks (%)

4.8%

4.9%

Average leverage exposure measure excluding claims on central banks

864,605

897,992

Average leverage ratio excluding claims on central banks (%)

4.7%

5.0%

Countercyclical leverage ratio buffer

0.1%

G-SII addit

ional leverage rat

io buffer

0.4%

Includes adjustment for qualify

ing central bank cla

ims and unsettled regular way trades

Financ

ial statements

328

Independent Auditor’s report

340

Consolidated income statement

341

Consolidated statement of

comprehensive income

342

Consolidated balance sheet

343

Consolidated statement of changes

in equity

345

Company balance sheet

346

Company statement of changes

in equity

347

Notes to the ﬁnancial statements



Supporting

the rollout of

electric vehicles

in Sweden



In 2022, we were part of a group of

banks which created a EUR350 mill

ion

green trade facil

ity for Polestar, an

electric performance car maker.

The facil

ity w

ill ﬁnance the import of

electric vehicles into Europe and North

America and will support the switch to

EVs, resulting in sign

iﬁcant CO

savings

per kilometre. One of Polestar’s main

goals is producing a truly carbon-

neutral car by 2030.

Read more online at

www.sc.com/SFimpactreport

326

Standard Chartered

– Annual Report 2022

Financ

ial statements

327

Standard Chartered

– Annual Report 2022

Financ

ial statements

328

Standard Chartered

– Annual Report 2022

Financ

ial statements

Independent auditor’s report

Opin

ion

In our opin

ion:

•

the ﬁnancial statements of Standard Chartered PLC (the

‘Company’ or the ‘Parent Company’), its subsid

iar

ies,

interests in associates and jo

intly controlled ent

ies

(together with the Company, the ‘Group’) give a true and

fair view of the state of the Group’s and of the Company’s

affairs as at 31 December 2022 and of the Group’s proﬁt for

the year then ended;

•

the Group ﬁnancial statements have been properly

prepared in accordance with UK adopted International

Accounting Standards (IAS) and International Financ

ial

Reporting Standards (IFRS) as adopted by the European

Union (EU IFRS);

•

the Company ﬁnancial statements have been properly

prepared in accordance with UK adopted IAS as applied in

accordance with section 408 of the Companies Act 2006;

and

•

the ﬁnancial statements have been prepared

in accordance

with the requirements of the Companies Act 2006.

We have audited the ﬁnanc

ial statements of the Group and

the Company for the year ended 31 December 2022 which

comprise:

Group

Company

Consolidated income

statement for the year ended

31 December 2022;

Company cash ﬂow statement

for the year ended 31 December

2022;

Consolidated statement of

comprehensive income for the

year then ended;

Company balance sheet as at

31 December 2022;

Consolidated balance sheet as

at 31 December 2022;

Company statement of changes

in equity for the year then

ended; and

Consolidated statement of

changes in equity for the year

then ended;

Related notes 1 to 40, where

relevant to the ﬁnancial

statements, includ

ing a

summary of sign

iﬁcant

accounting polic

ies.

Consolidated cash ﬂow

statement for the year then

ended;

Related notes 1 to 40 to the

ﬁnancial statements,

includ

ing

a summary of sign

iﬁcant

accounting polic

ies;

Information marked as

‘audited’ with

in the D

irectors’

remuneration report from

page 184 to 217; and

Risk Review and Capital Review

disclosures marked as ‘audited’

from page 234 to 325.

The ﬁnancial report

ing framework that has been applied in

their preparation is applicable law and UK adopted IAS and

EU IFRS; and as regards the Parent Company ﬁnancial

statements, UK adopted IAS as applied in accordance with

section 408 of the Companies Act 2006.

Basis for opin

ion

We conducted our audit in accordance with International

Standards on Audit

ing (UK) (ISAs (UK)) and appl

icable law.

Our responsib

ies under those standards are further

described in the Auditor’s responsib

ies for the aud

it of the

ﬁnancial statements sect

ion of our report. We believe that the

audit evidence we have obtained is sufﬁc

ient and appropr

iate

to provide a basis for our opin

ion.

Independence

We are independent of the Group and the Company in

accordance with the ethical requirements that are relevant to

our audit of the ﬁnanc

ial statements

in the UK, includ

ing the

FRC’s Ethical Standard as applied to listed public interest

entit

ies, and we have fulﬁlled our other eth

ical responsib

ies

in accordance with these requirements.

The non-audit services prohib

ited by the FRC’s Eth

ical

Standard were not provided to the Group or the Company

and we remain independent of the Group and the Company

in conducting the audit.

Conclusions relating to going concern

In audit

ing the ﬁnancial statements, we have concluded that

the directors’ use of the going concern basis of accounting in

the preparation of the ﬁnanc

ial statements

is appropriate.

Our evaluation of the directors’ assessment of the Group and

Parent Company’s abil

ity to cont

inue to adopt the going

concern basis of accounting included:

•

Performing a risk assessment to ident

ify factors that could

impact the going concern basis of accounting, includ

ing the

impact of external risks such as geopolit

ical r

isk.

•

Assessing the Group’s forecast capital, liqu

ity, and

leverage ratios over the period of twelve months from 16

February 2023 to evaluate the headroom against the

min

imum regulatory requ

irements and the risk appetite set

by the directors.

•

Engaging internal valuation and economic special

ists to

assess the reasonableness of assumptions used to develop

the forecasts in the Corporate Plan and evaluating the

accuracy of histor

ical forecast

ing.

•

Inspecting the Group’s funding plan and repayment plan for

funding instruments maturing over the period of twelve

months from 16 February 2023.

•

Understanding and evaluating credit rating agency ratings

and actions.

•

Assessing the results of management’s stress testing,

includ

ing cons

iderat

ion of pr

inc

ipal and emerg

ing risks, on

funding, liqu

ity, and regulatory capital.

•

Review

ing correspondence w

ith prudential regulators and

authorit

ies for matters that may

impact the going concern

assessment; and

•

Evaluating the appropriateness of the going concern

disclosure included in note 1 to the ﬁnanc

ial statements.

Based on the work we have performed, we have not ident

iﬁed

any material uncertaint

ies relat

ing to events or condit

ions

that, ind

idually or collectively, may cast sign

iﬁcant doubt on

the Group and the Company’s abil

ity to cont

inue as a going

concern for a period of twelve months from 16 February 2023.

Independent Auditor’s Report

to the members of Standard Chartered PLC

329

Standard Chartered

– Annual Report 2022

Financ

ial statements

In relation to the Group and Company’s reporting on how they

have applied the UK Corporate Governance Code, we have

nothing material to add or draw attention to in relation to the

directors’ statement in the ﬁnanc

ial statements about

whether the directors considered it appropriate to adopt the

going concern basis of accounting.

Our responsib

ies and the respons

ies of the d

irectors

with respect to going concern are described in the relevant

sections of this report. However, because not all future events

or condit

ions can be pred

icted, this statement is not a

guarantee as to the Group’s abil

ity to cont

inue as a going

concern.

Overview of our audit approach

Audit scope

•

We performed an audit of the complete ﬁnanc

ial

informat

ion of 15 components

in 12 countries and

audit procedures on specif

ic balances for a

further 11 components in 9 countries.

•

The components where we performed full or

specif

ic aud

it procedures accounted for 82% of

the absolute adjusted proﬁt before tax (PBT)

measure used to calculate material

ity, 89% of

absolute operating income and 95% of Total

assets.

Key audit

matters

• Credit impa

irment

•

Basis of accounting and impa

irment assessment

of China Bohai Bank (Interest in Associate)

•

User Access Management – Priv

ileged Access

Management

•

Impairment of Goodwill and Investments in

subsid

iary undertak

ings

•

Valuation of ﬁnanc

ial

instruments held at fair

value with higher risk characterist

ics

Material

ity

•

Overall group material

ity of $234m wh

ich

represents 5% of adjusted PBT

An overview of the scope of the Parent Company

and Group audits

Tailor

ing the scope

Our assessment of audit risk, our evaluation of material

ity and

our allocation of performance material

ity determ

ine our audit

scope for each component with

in the Group. Taken together,

this enables us to form an opin

ion on the consol

idated

ﬁnancial statements. We took

into account the size, risk

proﬁle, the organisat

ion of the Group and effect

iveness of

control environment, changes in the business environment

and other factors such as the level of issues and

misstatements noted in prior period when assessing the level

of work to be performed at each component.

In assessing the risk of material misstatement to the

consolidated ﬁnanc

ial statements, and to ensure we had

adequate quantitat

ive coverage of s

ign

iﬁcant accounts

in the

ﬁnancial statements, of the 367 report

ing units of the Group,

we selected 64 reporting units which represent 26

components in 21 countries: Bangladesh, Cameroon, Hong

Kong, India, Indonesia, Japan, Kenya, Mainland China,

Malaysia, Niger

ia, Pak

istan, Republic of Ireland, Republic of

South Africa, Singapore, South Korea, Sri Lanka, Taiwan,

United Arab Emirates, United Kingdom, United States of

America and Zambia. The deﬁn

ion of a component is

aligned with the structure of the Group’s consolidat

ion system,

typically these are either a branch, group of branches, group

of subsid

iar

ies, a subsid

iary, or an assoc

iate.

We took a centralised approach to audit

ing certa

in processes

and controls, as well as the substantive testing of specif

balances. This included audit work over Group’s Global

Business Services shared services centre, Commercial,

Corporate and Institut

ional Bank

ing, Credit Impairment

and Technology.

Of the 26 components selected in 21 countries, we performed

an audit of the complete ﬁnanc

ial

informat

ion of 15

components in 12 countries (‘full scope components’) which

were selected based on their size or risk characterist

ics. For the

remain

ing 11 components

in 9 countries (‘specif

ic scope

components’), we performed audit procedures on specif

accounts with

in that component that we cons

idered had the

potential for the greatest impact on the Group ﬁnanc

ial

statements either because of the size of these accounts or

their risk proﬁle.

The reporting components where we performed audit

procedures accounted for 82% (2021: 81%) of the Group’s

absolute adjusted PBT, 89% (2021: 89%) of the Group’s

absolute operating income and 95% (2021: 96%) of the

Group’s total assets. For the current year, the full scope

components contributed 72% (2021: 74%) of the Group’s

absolute adjusted PBT, 79% (2021: 81%) of the Group’s absolute

operating income and 87% (2021: 88%) of the Group’s total

assets.

The specif

ic scope components contr

ibuted 10% (2021: 7%) of

the Group’s absolute adjusted PBT, 10% (2021: 8%) of the

Group’s absolute operating income and 8% (2021: 8%) of the

Group’s total assets. The audit scope of these components

may not have included testing of all sign

iﬁcant accounts of

the component but will have contributed to the coverage of

sign

iﬁcant accounts tested for the Group, overall.

Of the remain

ing 303 report

ing units that together represent

18% of the Group’s absolute adjusted PBT, none ind

idually

contributed more than 2% of the Group’s absolute adjusted

PBT. For the components represented by these reporting units,

we performed other procedures at the Group level which

included: performing analytical reviews at the Group ﬁnanc

ial

statement line item level, testing entity level controls,

performing audit procedures on the centralised shared service

centres, testing of consolidat

ion journals and

intercompany

elim

inat

ions, inqu

ing with overseas EY teams on the

outcome of prior year local statutory audits (where audited by

EY) to ident

ify any potent

ial risks of material misstatement to

the Group ﬁnancial statements.

The charts below illustrate the coverage obtained from the

work performed by our audit teams.

Absolute adjusted proﬁt before tax

72% Full scope components

10% Specif

ic scope components

18% Other procedures

Absolute operating income

79% Full scope components

10% Specif

ic scope components

11% Other procedures

Total assets

87% Full scope components

8% Specif

ic scope components

5% Other procedures

330

Standard Chartered

– Annual Report 2022

Financ

ial statements

Independent auditor’s report

Changes from the prior year

We assessed our 2022 audit scope with considerat

ion of

history or expectation of unusual or complex transactions and

potential for material misstatements. We also kept our audit

scope under review throughout the year.

One component (Germany) which was included in our prior

year audit scope and assigned full scope, which represents

0.03% (2021:0.4%) of the current year absolute adjusted PBT,

1.3% of the Group’s total assets (2021:1%) and 0.6% of the

Group’s absolute operating income (2021:0.8%), was excluded

from the Group audit scope in the current year based on our

updated risk assessment. For this component as well as

Phil

ipp

ines, Uganda and Jordan, the Primary Audit Team

performed certain procedures centrally over the cash

balances as at 31 December 2022. Niger

ia and Bangladesh

were full scope components in the prior year but were

designated as specif

ic scope components

in the current year

based on our updated risk assessment.

In 2022 we assigned a specif

ic scope to Cameroon, South

Africa, Sri Lanka and Zambia components that are sign

iﬁcant

based on risk. These components were not in-scope in the

prior year.

Involvement with component teams

In establish

ing our overall approach to the Group aud

it, we

determined the type of work that needed to be undertaken at

each of the components by us, as the Group audit

engagement team, or by component auditors from other EY

global network ﬁrms and another ﬁrm operating under our

instruct

ions.

Of the 15 full scope components, audit procedures were

performed on 2 of these (includ

ing the aud

it of the Company)

directly by the Primary Audit Team (EY London) in the United

Kingdom. For 2 specif

ic scope components, the aud

procedures were performed by the Primary Audit Team.

Where components were audited by the Primary Team, this

was under the direct

ion and superv

ion of the Sen

ior

Statutory Auditor.

For the remain

ing 22 components, where the work was

performed by component auditors, we determined the

appropriate level of involvement to enable us to determine

that sufﬁcient aud

it evidence had been obtained as a basis

for our audit opin

ion on the Group as a whole. In add

ion, the

Group has centralised processes and controls over key areas in

its shared service centres. Members of the Primary Audit Team

undertook direct oversight, review and coordinat

ion of our

shared service centre audits.

The Primary Audit Team undertook vis

its to component teams

and shared services centres. During the current year’s audit

cycle, vis

its were undertaken by the Pr

imary Audit Team to the

component teams in the following locations:

• Bangladesh

•

India (includ

ing the shared serv

ices centre)

• Hong Kong

•

Singapore (includ

ing the shared serv

ices centre)

•

Malaysia (includ

ing the shared serv

ices centre)

• Indonesia

• Republic of Korea

• United Arab Emirates

•

United States of America

These vis

its

involved oversight of work undertaken at those

locations, discuss

ion of the aud

it approach and any issues

aris

ing from the

ir work, meeting with local management, and

review

ing relevant aud

it working papers on key risk areas.

In addit

ion to the s

ite vis

its, the Pr

imary Audit Team interacted

regularly with the component and shared services centre

audit teams where appropriate during the audit, reviewed

relevant working papers remotely and were responsible for

the overall scoping and direct

ion of the aud

it process.

The programme of our vis

its to component team and shared

service centres located in China was impacted by the travel

restrict

ions and other

imposed government measures which

are still in place from the prior year as a result of the ongoing

COVID-19 pandemic (albeit less so when compared to the

prior year). For this location, oversight of the work was

performed remotely through established EY software

collaboration platforms for the secure and timely delivery of

requested audit evidence.

We also undertook video conference meetings with local

audit teams and management. These virtual meetings

involved discuss

ing the aud

it approach with the component

and shared service centres team and any issues aris

ing from

their work and performing remote reviews of key audit

workpapers.

This, together with the addit

ional procedures performed at

Group level, gave us appropriate evidence for our opin

ion on

the Group and Company ﬁnancial statements.

Climate change

Stakeholders are increas

ingly

interested in how climate

change will impact the economy, includ

ing the bank

ing sector,

and further how this may consequently impact the valuation

of assets and liab

ies held on bank balance sheets. The

Group has determined climate risk to be a Primary Integrated

Risk Type and the assessment of that risk is explained on

pages 316 and 317 in the “Risk review: Climate Risk” section and

on pages 64 to 123 in the “Sustainab

ity” section of the Annual

Report, where they have also explained their climate

commitments.

All of these disclosures form part of the “Other informat

ion,”

rather than the audited ﬁnanc

ial statements. Our procedures

on these unaudited disclosures therefore consisted solely of

consider

ing whether they are mater

ially incons

istent w

ith the

ﬁnancial statements or our knowledge obta

ined in the course

of the audit or otherwise appear to be materially misstated, in

line with our responsib

ies on “Other

informat

ion”.

In planning and performing our audit we assessed the

potential impacts of climate change on the Group’s business

and any consequential material impact on its ﬁnanc

ial

statements.

The Group has explained in the “Sustainab

ity” section of the

Annual Report how they have reﬂected the impact of climate

change in their ﬁnanc

ial statements,

includ

ing how th

is aligns

with their commitment to the aspirat

ions of the Par

Agreement to achieve net zero emiss

ions by 2050. S

ign

iﬁcant

judgements and estimates relating to climate change are

included in the section “Sign

iﬁcant account

ing estimates and

crit

ical judgements” of note 1 to the ﬁnancial statements,

which also provides the narrative explanation of the impact of

climate risk on credit risk and lending portfolios under the

requirements of UK adopted IAS and EU IFRS. As stated in

these disclosures, the Group, having acknowledged the

lim

itat

ions of current data available, increas

ing soph

ist

icat

ion

of models, and the evolving and nascent nature of climate

impacts on internal and client assets, has concluded climate

risk to have lim

ited quant

itat

ive

impact in the immed

iate

term.

331

Standard Chartered

– Annual Report 2022

Financ

ial statements

Our audit effort in consider

ing the

impact of climate change

on the ﬁnancial statements was focused on evaluat

ing

whether management’s assessment of the impact of climate

risk, physical and transit

ion, the

ir climate commitments, and

the sign

iﬁcant judgements and est

imates disclosed in note 1

have been appropriately reﬂected in the valuation of assets

and liab

ies, where these can be rel

iably measured, following

the requirements of UK adopted IAS and EU IFRS. This was in

the context of the Group’s process being lim

ited, g

iven that

this is an emerging area, as a result of lim

itat

ions in the data

available and the availab

ity of sophist

icated models, and as

the Group considers how it further embeds its climate

ambit

ions

into the planning process.

As part of this evaluation, we performed our own risk

assessment, supported by our climate change internal

special

ists, to determ

ine the risks of material misstatement in

the ﬁnancial statements from cl

imate change which needed

to be considered in our audit.

We also challenged the Directors’ considerat

ions of cl

imate

change risks in their assessment of going concern and

viab

ity, and the associated disclosures. Where considerat

ions

of climate change were relevant to our assessment of going

concern, these are described above.

Based on our work, we have considered the impact of climate

change on the ﬁnancial statements to

impact the key audit

matter of Credit Impairment. Details of our procedures and

ﬁndings are

included in our explanation of key audit matters

below.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most sign

iﬁcance

in our audit of the ﬁnanc

ial

statements of the current period and include the most sign

iﬁcant assessed r

isks of material misstatement (whether or not due

to fraud) that we ident

iﬁed. These matters

included those which had the greatest effect on: the overall audit strategy, the

allocation of resources in the audit; and direct

ing the efforts of the engagement team. These matters were addressed

in the

context of our audit of the ﬁnanc

ial statements as a whole, and

in our opin

ion thereon, and we do not prov

ide a separate

opin

ion on these matters.

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

1. Credit Impairment

Refer to the Audit Committee Report (page 164);

Accounting polic

ies (page 361); Note 8 of the

ﬁnancial statements; and relevant cred

it risk

disclosures (includ

ing pages 239 and 270)

At 31 December 2022, the Group reported total

credit impa

irment balance sheet prov

ion of

$6,075 mill

ion (2021: $6,209 m

ill

ion).

Management’s judgements and estimates are

especially subject

ive due to s

ign

iﬁcant

uncertainty associated with the estimat

ion of

expected future losses. Assumptions with

increased complexity in respect of the tim

ing

and measurement of expected credit losses

(ECL) include:

•

Staging

– the determinat

ion of s

ign

iﬁcant

increase in credit risk and resultant timely

allocation of assets to the appropriate stage

in accordance with IFRS 9;

•

Model output and adjustments

– Accounting

interpretat

ions, modell

ing assumptions and

data used to build and run the models that

calculate the ECL, includ

ing the

appropriateness, completeness and valuation

of post-model adjustments applied to model

output to address risks not fully captured by

the models;

•

Economic scenarios

– Sign

iﬁcant judgements

involved with the determinat

ion of

parameters used in the Monte Carlo

Simulat

ion and the evaluat

ion of the

appropriateness of the output from the model

in terms of the extent to which it adequately

generated non-linear

ity,

includ

ing the

assessment of any Post Model adjustments;

•

Management overlays

– Appropriateness,

completeness and valuation of risk event

overlays to capture risks not ident

iﬁed by the

credit impa

irment models,

includ

ing the

considerat

ion of the r

isk of management

override; and

•

Indiv

idually assessed ECL allowances

– Measurement of ind

idual provis

ions

includ

ing the assessment of probab

ity

weighted recovery scenarios, exit strategies,

collateral valuations and time to collect.

We evaluated the design of controls relevant to

the Group’s processes over material ECL

balances, includ

ing the judgements and

estimates noted, involv

ing EY spec

ial

ists to

assist us in performing our procedures to the

extent it was appropriate. Based on our

evaluation we selected the controls upon which

we intended to rely and tested those for

operating effectiveness.

We performed an overall stand-back

assessment of the ECL allowance levels by

stage to determine if they were reasonable by

consider

ing the overall cred

it quality of the

Group’s portfolios, risk proﬁle, the impact of

sovereign downgrades and the id

iosyncrat

ic risk

of the China CRE sector. Our assessment also

included the evaluation of the macroeconomic

environment by consider

ing trends

in the

economies and countries to which the Group is

exposed, and the consequences of the easing

of global restrict

ions from the pandem

ic. We

performed peer benchmarking where available

to assess overall staging and provis

ion coverage

levels.

Staging

– We evaluated the criter

ia used to

determine sign

iﬁcant

increase in credit risk

includ

ing quant

itat

ive backstops w

ith the

resultant allocation of ﬁnanc

ial assets to stage

1, 2 or 3 in accordance with IFRS 9. We

reperformed the staging distr

ibut

ion for a

sample of ﬁnancial assets and assessed the

reasonableness of staging downgrades applied

by management.

To test credit monitor

ing wh

ich largely drives

the probabil

ity of default est

imates used in the

staging calculation, we challenged the risk

ratings (includ

ing appropr

iate operation of

quantitat

ive backstops) for a sample of

performing accounts and other accounts

exhib

ing risk characterist

ics such as ﬁnancial

diff

icult

ies, deferment of payment, late

payment and watchlist. We also considered the

vulnerable and cyclical sectors (as deﬁned on

page 264 in the annual report).

We highl

ighted the follow

ing

matters to the Audit Committee:

•

the pathway to achieve a

controls reliance audit for the

Group’s models;

• our evaluation of

management’s high-level

assessment of the potential

impact on ECL from climate

change;

•

our assessment of the

assumptions used to determine

the Stage 3 ECL of ind

idual

China Commercial Real Estate

developers and the

management overlay applied

to the sector’s modelled ECL;

•

our assessment of the Group’s

enhanced Monte Carlo

approach includ

ing

benchmarking the impact of

non-linear

ity from the basel

ine

ECL against UK peers and the

non-linear

ity overlay for reta

exposures; and

•

our assessment of the

appropriateness of the Group’s

methodology used to determine

the ECL in relation to sovereign

downgrades includ

ing the

completeness and rationale for

country downgrades and the

resultant overlays and ECL

impact.

We concluded that

management’s methodology,

judgements, and assumptions

used in calculating credit

impa

irment are mater

ially in

accordance with the accounting

standard.

332

Standard Chartered

– Annual Report 2022

Financ

ial statements

Independent auditor’s report

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

1. Credit Impairment

continued

In 2022, the most material factors impact

ing the

ECL were in relation to the China Commercial

Real Estate (CRE) portfolio, sovereign

downgrades, the enhanced Monte Carlo model

and the impact of the global economic

environment includ

ing the

impact of relaxing

pandemic restrict

ions. In add

ion, where

relevant we considered the impact of climate on

the impa

irment prov

ions. We cons

ider that the

combinat

ion of these factors has

increased the

risk of a material misstatement to the ECL.

Indiv

idually assessed ECL allowances – Our

procedures included challenging management’s

forward-looking economic assumptions of the

recovery outcomes ident

iﬁed and ass

igned

ind

idual probabil

ity we

ight

ings, and

recalculating a sample of ind

idually assessed

provis

ions.

Modelled output and adjustments

– We

performed a risk assessment on models

involved in the ECL calculation using EY

independently determined criter

ia to select a

sample of models to test. We engaged our

modelling special

ists to evaluate a sample of

ECL models by assessing the reasonableness of

underpinn

ing assumpt

ions, inputs and formulae

used. This included a combinat

ion of assess

ing

the appropriateness of model design, formulae

and algorithms, alternative modelling

techniques and recalculating the Probabil

ity of

Default, Loss Given Default and Exposure at

Default parameters. Together with our

modelling special

ists, we also assessed mater

ial

post-model adjustments which were applied as

a response to risks not fully captured by the

models, includ

ing the completeness and

appropriateness of these adjustments, for

which we considered the applied judgments

and methodology, and governance thereon.

In response to the new or enhanced models

implemented this year to address known

weaknesses in previous models, we performed

substantive testing procedures, includ

ing code

review and implementat

ion test

ing.

We reperformed model monitor

ing procedures

for models classif

ied as h

igher risk in

accordance with our EY independent risk

assessment.

To evaluate data quality, we agreed a sample

of ECL calculation data points to source

systems, includ

ing, among other data po

ints,

balance sheet data used to run the models. We

also tested a sample of the ECL data points

from the calculation engine through to the

general ledger and disclosures.

Economic scenarios

– For new material models

implemented in 2022, in collaboration with our

economists and modelling special

ists, we

challenged the completeness and

appropriateness of the macroeconomic

variables used as inputs to these models. For

exist

ing mater

ial models we evaluated the

output from our independent model monitor

ing

procedures to assess whether the ﬁndings

ind

icated that the macroeconom

ic variables

were outside of accepted tolerances.

Addit

ionally, we

involved our economic

special

ists to ass

ist us in evaluating the

reasonableness of the base forecast for sample

of macroeconomic variables most relevant for

the Group’s ECL calculation inﬂuenced by the

above assessment. Procedures performed

included benchmarking the forecast for a

sample of macroeconomic variables to a

variety of global external sources.

We assessed the reasonableness of the

non-linear

ity

impact on ECL allowances. By

engaging our economists and modelling

special

ists, we assessed the Group’s cho

ice of

scenarios to determine sensit

ity analysis of the

ECL on page 278 in the annual report. We also

performed a stand-back assessment by

benchmarking the uplift and overall ECL charge

and provis

ion coverage to peers. We evaluated

the appropriateness of the non-linear

ity overlay

for retail exposures.

333

Standard Chartered

– Annual Report 2022

Financ

ial statements

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

1. Credit Impairment

continued

Management overlays

– We challenged the

completeness and appropriateness of overlays

used for risks not captured by the models,

particularly regarding the worsening economic

environment impact

ing sovere

ign/country level

credit grades with a focus on Sri Lanka and

Ghana which defaulted during the year, and

other countries that suffered sign

iﬁcant cred

downgrades and the China Commercial Real

Estate sector. Our procedures included

evaluating the underpinn

ing assumpt

ions and

judgments as to whether they are appropriate

in prevail

ing market cond

ions, and for Ch

ina

CRE validat

ing LGD assumpt

ions by engaging

local EY Real Estate special

ist to val

idate the

collateral values of material Stage 2 exposures.

Indiv

idually assessed ECL allowances

Our procedures included challenging

management’s forward-looking economic

assumptions of the recovery outcomes

ident

iﬁed and ass

igned ind

idual probabil

ity

weight

ings, and recalculat

ing a sample of

ind

idually assessed provis

ions.

We also engaged our valuation special

ists to

test the value of the collateral used in

management’s calculations. Our sample was

based on quantitat

ive thresholds and

qualitat

ive factors,

includ

ing exposure to

vulnerable sectors. We have independently

assessed all material China CRE developers in

Stage 3 includ

ing challeng

ing the plausib

ity of

the applied scenarios, the corresponding

weights assigned to work out scenarios and

engaging local EY Real Estate special

ist to

validate the collateral values. We also

considered whether planned exit strategies

were viable.

Where relevant, with input from our climate

special

ists, we cons

idered the potential impact

of climate change in the determinat

ion of each

element of the ECL provis

ions.

2. Basis of accounting and

impa

irment assessment of Ch

ina

Bohai Bank (Interest in Associate)

Refer to the Audit Committee Report (page 165);

Accounting polic

ies (page 437); and Note 32 of

the ﬁnancial statements

Interest in Associate – China Bohai Bank

$1,421 mill

ion (2021: $1,917 m

ill

ion)

Other impa

irment – Ch

ina Bohai Bank –

$308 mill

ion (2021: $300 m

ill

ion).

We focused on judgements and estimates,

includ

ing the appropr

iateness of the equity

accounting treatment under IAS 28 and the

assessment of whether the investment was

impa

ired.

Basis of accounting

The Group holds a 16.26% stake in China Bohai

Bank and equity accounts for the investment as

an associate, on the grounds that the Group is

able to exercise sign

iﬁcant

inﬂuence over China

Bohai Bank.

IAS 28 states that if the entity holds, directly or

ind

irectly, less than 20% of the vot

ing power of

the investee, it is presumed that the entity does

not have sign

iﬁcant

inﬂuence, unless such

inﬂuence can be clearly demonstrated.

There is a risk that the equity accounting

treatment may not be appropriate, if the Group

cannot demonstrate that it exerts sign

iﬁcant

inﬂuence over China Bohai Bank.

Basis of accounting

We evaluated the facts and circumstances that

the Group presented to demonstrate that it

exercises sign

iﬁcant

inﬂuence over China Bohai

Bank, through Board representation,

membership of Board Committees and the

sharing of industry and technical advice.

Impairment testing

The Group impa

ired the value of the

investment

in China Bohai Bank by $308 mill

ion (2021: $300

mill

ion).

We assessed the appropriateness of the

Group’s VIU methodology for testing the

impa

irment of the

investment in China Bohai

Bank for compliance with the accounting

standards. We tested the mathematical

accuracy of the VIU model and engaged our

valuation special

ists to support the aud

it team

in calculating an independent range for the

assumptions underlying the VIU calculations,

which are the discount rate and long-term

growth rate.

We performed audit procedures to assess the

reasonableness of the Group’s forecast of the

future cashﬂows relating to Bohai, by evaluating

management’s assessment, benchmarking the

forecasts to broker reports published for

comparable companies and challenging

management with regard to the relevance and

reliab

ity of histor

ical data when prepar

ing

their assessment.

We concluded that the Group

continues to mainta

in s

ign

iﬁcant

inﬂuence over China Bohai Bank as

at 31 December 2022.

We concluded that the Interest in

Associate –China Bohai Bank

balance was not materially

misstated as at 31 December 2022.

We concluded that the disclosures

in the annual report appropriately

reﬂect the sensit

ity of the

carrying value to reasonably

possible changes in key

assumptions in the valuation of

the investment in China Bohai

Bank.

334

Standard Chartered

– Annual Report 2022

Financ

ial statements

Independent auditor’s report

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

2. Basis of accounting and

impa

irment assessment of Ch

ina

Bohai Bank (Interest in Associate)

continued

Impairment testing

At 31 December 2022, China Bohai Bank’s market

capital

isat

ion was sign

iﬁcantly lower than the

carrying value of the investment. In addit

ion, the

ﬁnancial performance of Ch

ina Bohai Bank

deteriorated during 2022. These matters are

ind

icators of

impa

irment.

Impairment of the investment in China Bohai

Bank is determined by comparing the carrying

value to the value-in-use (VIU). The VIU is

modelled by reference to future cashﬂow

forecasts (forecast proﬁt, includ

ing a ha

ircut for

regulatory capital), discount rate and

macroeconomic assumptions such as long-term

growth rates.

Consequently, there is a risk that if the

judgements and assumptions underpinn

ing the

impa

irment assessments are

inappropr

iate, then

the investment in China Bohai Bank may be

misstated.

The risk of impa

irment has

increased in current

year in the context of economic developments in

China as well as Bohai’s ﬁnanc

ial performance

2022. The risk in respect of sign

iﬁcant

inﬂuence

has not changed compared to the prior year.

We assessed the appropriateness of disclosures

in the annual report in relation to the impact of

reasonably possible changes in key

assumptions on the carrying value of the

investment in China Bohai Bank.

3. User Access Management –

Priv

ileged Access Management

Refer to the Audit Committee Report (page 165)

IT General Controls (ITGCs) support the

continuous operation of the automated and

other IT dependent controls with

in the bus

iness

processes related to ﬁnancial report

ing. Effective

IT general controls are needed to ensure that IT

applicat

ions process bus

iness data as expected

and that changes are made in an appropriate

manner.

During the 2020 and 2021 audits, a number of

sign

iﬁcant pr

ileged

ident

ity management

(PIM) control deﬁcienc

ies were ident

iﬁed by us.

Sim

ilar deﬁcienc

ies were ident

iﬁed by Group

Internal Audit (GIA) and the predecessor auditor

in 2018 and 2019.

The possib

ity of IT applicat

ion users ga

ing

access priv

ileges beyond those necessary to

perform their assigned duties may result in

breaches in segregation of duties, includ

ing

inappropr

iate manual

intervent

ion,

unauthorised changes to systems or

programmes.

These deﬁcienc

ies are still in the process of being

fully remediated. During the current year audit,

we made further observations relating to the

effectiveness of remediat

ion act

ies.

The risk has decreased in the current year due to

management’s remediat

ion program, wh

ich is

still in progress as at the year-end date.

We evaluated the results of management’s

remediat

ion program and r

isk assessment for

applicat

ions

in our audit scope.

We also tested IT controls (includ

ing IT

compensating controls) where possible, and

also performed addit

ional IT substant

ive

procedures to assess the impact of risks

associated with the reported deﬁc

ienc

ies, on

the ﬁnancial statements.

We assessed the impact of the results of the

above on our audit procedures over the

ﬁnancial statements for the year ended 31

December 2022.

•

We communicated a weakness

in internal control to the Audit

Committee throughout the

audit, in respect of the

effectiveness of priv

ileged

ident

ity management controls.

•

We explained the results of the

addit

ional aud

it procedures

performed.

As a result of the procedures

performed, we have reduced the

risk that our audit has not

ident

iﬁed a mater

ial error in the

Group and Company ﬁnancial

statements, related to priv

ileged

access management, to an

appropriate level.

335

Standard Chartered

– Annual Report 2022

Financ

ial statements

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

4. Impairment assessment of

goodwill and investments in

subsid

iary undertak

ings

Refer to the Audit Committee Report (page 165);

a) Impairment of Goodwill: Accounting polic

ies

(page 409); and Note 17 of the ﬁnancial

statements

b) Impairment of investments in subsid

iary

undertakings: Accounting polic

ies (page 437);

and Note 32 of the ﬁnancial statements.

At 31 December 2022 the Group reported

Goodwill balance of $2,472 mill

ion (2021: $2,595

mill

ion). In the Parent Company ﬁnancial

statements, investment in subsid

iary

undertakings balance comprised $60,975 mill

ion

(2021: $60,429 mill

ion). Dur

ing the year the Group

impa

ired goodw

ill by $14mill

ion (2021: NIL).

On an annual basis, management is required to

perform an impa

irment assessment for goodw

ill,

and to assess for ind

icators of

impa

irment

respect of investments in subsid

iary

undertakings; where ind

icators of

impa

irment

are ident

iﬁed, the recoverable amount of the

investment should be estimated.

Impairment assessment of goodwill is performed

by calculating a value in use (‘VIU’) as the

recoverable amount of the related cash

generating unit (‘CGU’).

The Group ident

iﬁed

ind

icators of

impa

irment of

investments in subsid

iary undertak

ings, includ

ing

macroeconomic and geopolit

ical factors wh

ich

have an impact on the ﬁnanc

ial pos

ion and

performance of the subsid

iar

ies.

In assessing for ind

icators of

impa

irment, among

other procedures, management compares the

Net Asset Value (‘NAV’) of the subsid

iary to the

carrying value of each direct subsid

iary of the

Parent Company. Where the net assets did not

support the carrying value, the recoverable

amount is estimated by determin

ing the h

igher

of the VIU or fair value less cost to sell.

Where the recoverable amount is based on the

VIU, this is modelled by reference to future

cashﬂow forecasts (proﬁt forecast includ

ing a

regulatory capital haircut adjustment), discount

rates and macroeconomic assumptions such as

long-term growth rates.

There is a risk that if the judgements and

assumptions underpinn

ing the

impa

irment

assessments are inappropr

iate, then the

goodwill and investments in subsid

iar

ies

balances may be misstated.

The level of risk remains consistent with the prior

year.

We obtained an understanding of

management’s process and evaluated the

design of controls. Our audit strategy was fully

substantive.

We assessed the appropriateness of the

Group’s methodology for testing the

impa

irment of goodw

ill and investments in

subsid

iary undertak

ings for compliance with the

accounting standards.

For goodwill, we assessed the appropriateness

of the cash-generating units ident

iﬁed by

management.

We agreed the inputs in the VIU model with

their source and tested the mathematical

accuracy of the VIU model. We engaged EY

special

ists to support the aud

it team in

assessing reasonableness of the regulatory

haircut adjustment to future proﬁtab

ity

forecasts and calculating an independent

range for assumptions underlying the VIU

calculations, such as the discount rate and

long-term growth rate for each cash generating

unit.

We also reconciled the future proﬁtab

ity

forecasts of each CGU to the Group’s approved

Corporate Plan (‘the Plan’). We engaged our

special

ist team to determ

ine the

reasonableness of the forward macroeconomic

inputs used in the Plan and to assess their

implementat

ion

in the modelled calculations

underpinn

ing the Plan. In add

ion, our spec

ial

ist

team benchmarked certain aspects of the Plan

with other comparable businesses.

We performed audit procedures to assess the

reasonableness of the forecasts by

understanding the Group Strategy, challenging

key assumptions underpinn

ing the Plan,

assessing the feasib

ity of management

actions necessary to achieve the Plan and

testing the reliab

ity of the Group’s histor

ical

forecasting by comparing with the actual

performance.

We performed a stand back assessment to

evaluate the appropriateness of the audit

evidence obtained and our conclusion in

relation to these estimates. In addit

ion to th

is,

we also engaged our special

ist team to perform

a sensit

ity analysis of the key inputs in the VIU

model.

We agreed the NAV of the subsid

iar

ies against

their carrying value to conﬁrm impa

irment or

reversal of impa

irment recogn

ised in the

Parent`s Company ﬁnancial results.

We assessed the appropriateness of goodwill

and investments in subsid

iary undertak

ings

impa

irment d

isclosures in accordance with

IAS 36.

We concluded that the goodwill

balance as at 31 December 2022

and the related disclosures, are

not materially misstated.

We concluded that the disclosures

in the annual report appropriately

reﬂect the sensit

ity of the

carrying value of goodwill to

reasonably possible changes in

key assumptions, noting that these

downside sensit

ies could

require an adjustment to the

carrying amount of goodwill in

future.

We also concluded that the

investments in subsid

iary

undertakings reported in the

Parent Company ﬁnancial

statements and the associated

disclosures, are not materially

misstated as at 31 December 2022.

336

Standard Chartered

– Annual Report 2022

Financ

ial statements

Independent auditor’s report

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

5. Valuation of ﬁnanc

ial

instruments

held at fair value with higher risk

characterist

ics

Refer to the Audit Committee Report (page 165);

Accounting polic

ies (page 371); and Note 13 of

the ﬁnancial statements.

At 31 December 2022, the Group reported

ﬁnancial assets measured at fa

ir value of

$282,263 mill

ion (2021: $303,678 m

ill

ion), and

ﬁnancial l

iab

ies at fa

ir value of $149,765 mill

ion

(2021: $138,596 mill

ion), of wh

ich ﬁnanc

ial assets

of $5,865 mill

ion (2021: $4,116 m

ill

ion) and

ﬁnancial l

iab

ies of $1,878 m

ill

ion (2021:

$1,653 mill

ion) are class

ied as Level 3

in the

fair value hierarchy.

The fair value of ﬁnanc

ial

instruments with

higher risk characterist

ics

involves the use of

management judgement in the selection of

valuation models and techniques, pric

ing

inputs

and assumptions and fair value adjustments.

A higher level of estimat

ion uncerta

inty is

involved for ﬁnanc

ial

instruments valued using

complex models, pric

ing

inputs that have lim

ited

observabil

ity, and fa

ir value adjustments,

includ

ing the Cred

it Valuation Adjustment,

Funding Valuation Adjustment, Debit Valuation

Adjustment and Own Credit Adjustment.

We considered the following portfolios

presented a higher level of estimat

ion

uncertainty:

•

Level 3 derivat

ives and debt secur

ies

in issue

and a portfolio of Level 2 ﬁnanc

ial

instruments

whose valuation involves the use of complex

models, and

•

Unlisted equity investments, loans at fair

value, debt and other ﬁnancial

instruments

classif

ied

in Level 3 with unobservable pric

ing

inputs.

The level of risk remains consistent with the prior

year.

We evaluated the design and operating

effectiveness of controls relating to the

valuation of ﬁnanc

ial

instruments, includ

ing

independent price verif

icat

ion, model review

and approval, fair value adjustments, income

statement analysis and reporting.

Among other procedures, we engaged our

valuation special

ists to ass

ist the audit team in

performing the following procedures:

•

Test complex model-dependent valuations

by independently revaluing a sample of Level

3 and complex Level 2 derivat

ive ﬁnancial

instruments and debt securit

ies

in issue, in

order to assess the appropriateness of

models and the adequacy of assumptions

and inputs used by the Group;

•

Test valuations of other ﬁnanc

ial

instruments

with higher estimat

ion uncerta

inty, such as

unlisted equity investments, loans at fair

value, debt and other ﬁnancial

instruments.

We compared management’s valuation to

our own independently developed range,

where appropriate;

•

Assessed the appropriateness of pric

ing

inputs as part of the Independent Price

Verif

icat

ion process; and

•

Compared the methodology used for fair

value adjustments to current market practice.

We revalued a sample of valuation

adjustments, compared funding and credit

spreads to third party data and challenged

the basis for determin

ing

ill

iqu

id credit

spreads.

Where differences between our independent

valuation and management’s valuation were

outside our thresholds, we performed addit

ional

testing to assess the impact on the valuation of

ﬁnancial

instruments.

Throughout our audit procedures we

considered the continu

ing uncerta

inty aris

ing

from the current macro-economic environment

includ

ing market volat

ity. In add

ion, we

assessed whether there were any ind

icators of

aggregate bias in ﬁnanc

ial

instrument marking

and methodology assumptions.

We concluded that assumptions

used by management to estimate

the fair value of ﬁnanc

ial

instruments with higher risk

characterist

ics and the recogn

ion

of related income were

reasonable. We highl

ighted the

following matters to the Audit

Committee:

• Complex model-dependent

valuations were appropriate

based on the output of our

independent revaluations;

•

Fair values of derivat

ive

transactions, debt securit

ies

issue, unlisted equity

investments, loans, debt and

other ﬁnancial

instruments

valued using pric

ing

informat

ion

with lim

ited observab

ity were

not materially misstated as at 31

December 2022, based on the

output of our independent

calculations; and

• Valuation adjustments in

respect of credit, funding, own

credit and other risks applied to

derivat

ive portfol

ios and debt

securit

ies

in issue were

appropriate, based on our

analysis of market data and

benchmarking of pric

ing

informat

ion.

The key audit matters remain consistent from prior year,

except that following the decline of the Covid-19 pandemic

and the associated decrease in related uncertaint

ies, the key

audit matter in respect of the impa

irment of non-ﬁnancial

assets has become lim

ited to the

impa

irment assessment of

goodwill and investments in subsid

iary undertak

ings.

Our applicat

ion of mater

ial

ity

We apply the concept of material

ity

in planning and

performing the audit, in evaluating the effect of ident

iﬁed

misstatements on the audit and in forming our audit opin

ion.

Material

ity

The magnitude of an omiss

ion or m

isstatement that,

ind

idually or in the aggregate, could reasonably be

expected to inﬂuence the economic decis

ions of the users of

the ﬁnancial statements. Mater

ial

ity prov

ides a basis for

determin

ing the nature and extent of our aud

it procedures.

We determined material

ity for the Group to be $234 m

ill

ion

(2021: $195 mill

ion), wh

ich is 5% (2021: 5%) of adjusted PBT. This

reﬂects actual PBT adjusted for non-recurring items relating to

restructuring costs and impa

irment of Ch

ina Bohai Bank. We

believe that adjusted PBT provides us with the most

appropriate measure for the users of the ﬁnanc

ial statements,

given the Group is proﬁt making, it is consistent with the wider

industry, it is the standard for listed and regulated entit

ies and

we believe it reﬂects the most relevant measure for users of

the ﬁnancial statements. We also bel

ieve that the

adjustments are appropriate as they relate to material

non-recurring items.

337

Standard Chartered

– Annual Report 2022

Financ

ial statements

• Statutory proﬁt before tax – $4,286m

Starting basis

• Restructuring – $95m

• China Bohai bank impa

irment – $308m

Adjustments

• Totals $4,689m Adjusted PBT

• Material

ity of $234m (5% of Adjusted PBT)

Material

ity

During the course of our audit, we performed a reassessment

of our in

ial material

ity. Th

is assessment resulted in higher

ﬁnal material

ity calculated based on the actual ﬁnancial

performance of the Group for the year. There were no

changes to the basis for material

ity calculat

ion from the

planning stage.

We determined material

ity for the Parent Company to be

$210mill

ion (2021: $176 m

ill

ion) wh

ich is 0.4% (2021: 0.33%) of

the equity of the Parent Company. We believe that equity

provides us with the most appropriate measure for the users

of the Parent Company’s ﬁnancial statements, g

iven that the

Parent Company is primar

ily a hold

ing company.

Performance material

ity

The applicat

ion of mater

ial

ity at the

ind

idual account or

balance level. It is set at an amount to reduce to an

appropriately low level the probabil

ity that the aggregate of

uncorrected and undetected misstatements exceeds

material

ity.

On the basis of our risk assessments, together with our

assessment of the Group’s overall control environment, our

judgement was that performance material

ity was 50% (2021:

50%) of our planning material

ity, namely $117 m

ill

ion (2021: $98

mill

ion). We have set performance mater

ial

ity at th

percentage based on a variety of risk assessment factors such

as the expectation of misstatements, internal control

environment considerat

ions and other factors such as the

global complexity of the Group.

Audit work at component locations for the purpose of

obtain

ing aud

it coverage over sign

iﬁcant ﬁnancial statement

accounts is undertaken based on a percentage of total

performance material

ity. The performance mater

ial

ity set for

each component is based on the relative size and risk of the

component to the Group as a whole and our assessment of

the risk of misstatement at that component. In the current

year, the range of performance material

ity allocated to

components was $8.8 mill

ion to $34.1 m

ill

ion (2021: $8 m

ill

ion to

$29 mill

ion).

Reporting threshold

An amount below which ident

iﬁed m

isstatements are

considered as being clearly triv

ial.

We agreed with the Audit Committee that we would report to

them all uncorrected audit differences in excess of $11 mill

ion

(2021: $10 mill

ion), wh

ich is set at 5% of planning material

ity, as

well as differences below that threshold that, in our view,

warranted reporting on qualitat

ive grounds.

When forming our opin

ion, we evaluate any uncorrected

misstatements against both the quantitat

ive measures of

material

ity d

iscussed above as well as other relevant

qualitat

ive cr

iter

ia.

Other informat

ion

The other informat

ion compr

ises the informat

ion

included

in the Annual Report set out on pages 1 to 509, includ

ing

the Strategic report (pages 1 to 133), the Directors’ report

(pages 134 to 230), the Statement of directors’ responsib

ies

(page 231) and the informat

ion not marked as ‘aud

ited’ in the

Risk review and Capital review section (pages 232 to 325), and

the Supplementary informat

ion (pages 474 to 509), other than

the ﬁnancial statements and our aud

itor’s report thereon. The

directors are responsible for the other informat

ion conta

ined

with

in the annual report.

Our opin

ion on the ﬁnancial statements does not cover the

other informat

ion and, except to the extent otherw

ise

explic

itly stated

in this report, we do not express any form of

assurance conclusion thereon.

Our responsib

ity is to read the other informat

ion and,

doing so, consider whether the other informat

ion

is materially

incons

istent w

ith the ﬁnanc

ial statements or our knowledge

obtained in the course of the audit, or otherwise appears to

be materially misstated. If we ident

ify such mater

ial

incons

istenc

ies or apparent material misstatements, we are

required to determine whether this gives rise to a material

misstatement in the ﬁnanc

ial statements themselves. If, based

on the work we have performed, we conclude that there is a

material misstatement of the other informat

ion, we are

required to report that fact.

We have nothing to report in this regard.

Opin

ions on other matters prescr

ibed by the

Companies Act 2006

In our opin

ion, the part of the d

irectors’ remuneration report to

be audited has been properly prepared in accordance with

the Companies Act 2006.

In our opin

ion, based on the work undertaken

in the course of

the audit:

•

the informat

ion g

iven in the strategic report and the

directors’ report for the ﬁnanc

ial year for wh

ich the ﬁnanc

ial

statements are prepared is consistent with the ﬁnanc

ial

statements; and

•

the strategic report and the directors’ report have been

prepared in accordance with applicable legal requirements.

338

Standard Chartered

– Annual Report 2022

Financ

ial statements

Independent auditor’s report

Matters on which we are required to report by

exception

In the light of the knowledge and understanding of the Group

and the Parent Company and its environment obtained in the

course of the audit, we have not ident

iﬁed mater

ial

misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters

in relation to which the Companies Act 2006 requires us to

report to you if, in our opin

ion:

•

adequate accounting records have not been kept by the

Parent Company, or returns adequate for our audit have not

been received from branches not vis

ited by us; or

•

the Parent Company ﬁnancial statements and the part of

the Directors’ Remuneration Report to be audited are not in

agreement with the accounting records and returns; or

•

certain disclosures of directors’ remuneration specif

ied by

law are not made; or

•

we have not received all the informat

ion and explanat

ions

we require for our audit.

Corporate Governance Statement

We have reviewed the directors’ statement in relation to

going concern, longer-term viab

ity and that part of the

Corporate Governance Statement relating to the Group

and Company’s compliance with the provis

ions of the UK

Corporate Governance Code specif

ied for our rev

iew by the

List

ing Rules.

Based on the work undertaken as part of our audit, we have

concluded that each of the following elements of the

Corporate Governance Statement is materially consistent

with the ﬁnanc

ial statements or our knowledge obta

ined

during the audit:

•

Directors’ statement with regards to the appropriateness of

adopting the going concern basis of accounting and any

material uncertaint

ies

ident

iﬁed set out on page 219;

•

Directors’ explanation as to its assessment of the

Company’s prospects, the period this assessment covers

and why the period is appropriate set out on pages 132

and 133;

•

Director’s statement on whether it has a reasonable

expectation that the Group will be able to continue in

operation and meets its liab

ies set out on page 133;

•

Directors’ statement on fair, balanced and understandable

set out on page 218;

•

Board’s conﬁrmation that

it has carried out a robust

assessment of the emerging and princ

ipal r

isks set out on

page 222;

•

The section of the annual report that describes the review

of effectiveness of risk management and internal control

systems set out on pages 232 to 325; and

•

The section describ

ing the work of the aud

it committee set

out on pages 163 to 169.

Responsib

ies of d

irectors

As explained more fully in the directors’ responsib

ies

statement set out on page 231, the directors are responsible

for the preparation of the ﬁnanc

ial statements and for be

ing

satisf

ied that they g

ive a true and fair view, and for such

internal control as the directors determine is necessary to

enable the preparation of ﬁnanc

ial statements that are free

from material misstatement, whether due to fraud or error.

In preparing the ﬁnanc

ial statements, the d

irectors are

responsible for assessing the Group and Parent Company’s

abil

ity to cont

inue as a going concern, disclos

ing, as

applicable, matters related to going concern and using the

going concern basis of accounting unless the directors either

intend to liqu

idate the Group or the Parent Company or to

cease operations, or have no realist

ic alternat

ive but to do so.

Auditor’s responsib

ies for the aud

it of the

ﬁnancial statements

Our objectives are to obta

in reasonable assurance about

whether the ﬁnancial statements as a whole are free from

material misstatement, whether due to fraud or error, and to

issue an auditor’s report that includes our opin

ion. Reasonable

assurance is a high level of assurance, but is not a guarantee

that an audit conducted in accordance with ISAs (UK) will

always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are

considered material if, ind

idually or in the aggregate, they

could reasonably be expected to inﬂuence the economic

decis

ions of users taken on the bas

is of these ﬁnanc

ial

statements.

Explanation as to what extent the audit was considered

capable of detecting irregular

ies, includ

ing fraud

Irregularit

ies,

includ

ing fraud, are

instances of non-compliance

with laws and regulations. We design procedures in line with

our responsib

ies, outl

ined above, to detect irregular

ies,

includ

ing fraud. The r

isk of not detecting a material

misstatement due to fraud is higher than the risk of not

detecting one resulting from error, as fraud may involve

deliberate concealment by, for example, forgery or intent

ional

misrepresentat

ions, or through collus

ion. The extent to which

our procedures are capable of detecting irregular

ies,

includ

ing fraud

is detailed below.

However, the primary responsib

ity for the prevention and

detection of fraud rests with both those charged with

governance of the Company and management.

•

We obtained an understanding of the legal and regulatory

frameworks that are applicable to the Group and

determined that the most sign

iﬁcant are those that relate

to the reporting framework (UK-adopted IAS and EU IFRS,

the Companies Act 2006 and the UK Corporate

Governance Code, the Financ

ial Conduct Author

ity (FCA)

List

ing Rules, the Ma

in Board List

ing Rules of the Hong Kong

Stock Exchange), regulations and supervisory requirements

of the Prudential Regulation Authority (PRA), FRC, FCA and

other overseas regulatory requirements, includ

ing but not

lim

ited to regulat

ions in its major markets such as Hong

Kong, India, Singapore, the United States of America, and

the relevant tax compliance regulations in the jur

isd

ict

ions

in which the Group operates. In addit

ion, we concluded that

there are certain sign

iﬁcant laws and regulat

ions that may

have an effect on the determinat

ion of the amounts and

disclosures in the ﬁnanc

ial statements and those laws and

regulations relating to regulatory capital and liqu

ity,

conduct, ﬁnancial cr

ime includ

ing ant

i-money laundering,

sanctions and market abuse recognis

ing the ﬁnancial and

regulated nature of the Group’s activ

ies.

339

Standard Chartered

– Annual Report 2022

Financ

ial statements

•

We understood how the Group is complying with those

frameworks by performing a combinat

ion of

inqu

ies of

senior management and those charged with governance

as required by audit

ing standards, rev

iew of board and

certain committee meeting minutes, gain

ing an

understanding of the Group’s approach to governance,

inspect

ion of regulatory correspondence

in the year and

engaging with internal and external legal counsel. We also

engaged EY ﬁnancial cr

ime and forensics special

ists to

perform procedures on areas relating to anti-money

laundering, whistleblow

ing, and sanct

ions compliance.

Through these procedures, we became aware of actual or

suspected non-compliance. The ident

iﬁed actual or

suspected non-compliance was not sufﬁc

iently s

ign

iﬁcant

to our audit that would have resulted in being ident

iﬁed as

a key audit matter.

•

We assessed the susceptib

ity of the Group’s ﬁnanc

ial

statements to material misstatement, includ

ing how fraud

might occur by consider

ing the controls that the Group has

established to address risks ident

iﬁed by the ent

ity, or that

otherwise seek to prevent, deter or detect fraud. Our

procedures to address the risks ident

iﬁed also

included

incorporation of unpredictab

ity into the nature, tim

ing

and/or extent of our testing, challenging assumptions and

judgements made by management in their sign

iﬁcant

accounting estimates and journal entry testing.

•

Based on this understanding, we designed our audit

procedures to ident

ify non-compl

iance with such laws and

regulations. Our procedures involved inqu

ies of the Group’s

internal and external legal counsel, money laundering

reporting ofﬁcer, internal audit, certain senior management

executives and focused testing on a sample basis, includ

ing

journal entry testing. We also performed inspect

ion of key

regulatory correspondence from the relevant regulatory

authorit

ies as well as rev

iew of board and committee

minutes.

•

For instances of actual or suspected non-compliance with

laws and regulations, which have a material impact on the

ﬁnancial statements, these were commun

icated by

management to the Group audit engagement team and

component teams (where applicable) who performed audit

procedures such as inqu

ies with management, sending

conﬁrmations to external legal counsel, substant

ive testing

and meeting with regulators. Where appropriate, we

involved special

ists from our ﬁrm to support the aud

it team.

•

The Group is authorised to provide banking, insurance,

mortgages and home ﬁnance, consumer credit, pensions,

investments and other activ

ies. The Group operates in the

banking industry which is a highly regulated environment.

As such, the Senior Statutory Auditor considered the

experience and expertise of the Group audit engagement

team, the component teams and the shared service centre

teams to ensure that the team had the appropriate

competence and capabil

ies, which included the use of

special

ists where appropr

iate.

A further descript

ion of our respons

ies for the aud

it of the

ﬁnancial statements

is located on the Financ

ial Report

ing

Council’s website at https://www.frc.org.uk/

auditorsrespons

ies. This descript

ion forms part of our

auditor’s report.

Other matters we are required to address

•

Following the recommendation from the Audit Committee,

we were re-appointed by the Company at the Annual

General Meeting on 4 May 2022 to audit the ﬁnanc

ial

statements for the year ending 31 December 2022 and

subsequent ﬁnancial per

iods.

The period of total uninterrupted engagement is three years,

covering the years ended 31 December 2020 to 31 December

2022.

•

The audit opin

ion

is consistent with the addit

ional report to

the Audit Committee.

Use of our report

This report is made solely to the Company’s members,

as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken

so that we might state to the Company’s members those

matters we are required to state to them in an auditor’s report

and for no other purpose. To the fullest extent permitted by

law, we do not accept or assume responsib

ity to anyone

other than the Company and the Company’s members as a

body, for our audit work, for this report, or for the opin

ions we

have formed.

David Canning Jones (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

London

16 February 2023

340

Standard Chartered

– Annual Report 2022

Financ

ial statements

Financ

ial statements

Notes

2022

$mill

ion

2021

$mill

ion

Interest income

15,252

10,246

Interest expense

(7,659)

(3,448)

Net interest income

7,593

6,798

Fees and commiss

ion

income

3,972

4,458

Fees and commiss

ion expense

(859)

(736)

Net fees and commiss

ion

income

3,113

3,722

Net trading income

5,310

3,431

Other operating income

302

750

Operating income

16,318

14,701

Staff costs

(7,618)

(7,668)

Premises costs

(401)

(387)

General admin

istrat

ive expenses

(1,708)

(1,688)

Depreciat

ion and amort

isat

ion

(1,186)

(1,181)

Operating expenses

(10,913)

(10,924)

Operating proﬁt before impa

irment losses and taxat

ion

5,405

3,777

Credit impa

irment

(836)

(254)

Goodwill, property, plant and equipment and other impa

irment

(439)

(372)

Proﬁt from associates and jo

int ventures

156

196

Proﬁt before taxation

4,286

3,347

Taxation

(1,384)

(1,034)

Proﬁt for the year

2,902

2,313

Proﬁt attributable to:

Non-controlling interests

(46)

(2)

Parent company shareholders

2,948

2,315

Proﬁt for the year

2,902

2,313

cents

Earnings per share:

Basic earnings per ordinary share

85.9

61.3

Diluted earnings per ordinary share

84.3

60.4

The notes on pages 348 to 473 form an integral part of these ﬁnanc

ial statements.

Consolidated income statement

For the year ended 31 December 2022

341

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes

2022

$mill

ion

2021

$mill

ion

Proﬁt for the year

2,902

2,313

Other comprehensive (loss)/income:

Items that will not be reclassif

ied to

income statement:

(75)

309

Own credit (losses)/gains on ﬁnanc

ial l

iab

ies des

ignated at fair value through proﬁt

or loss

(56)

Equity instruments at fair value through other comprehensive income

(75)

169

Actuarial gains on retirement beneﬁt obligat

ions

179

Taxation relating to components of other comprehensive income

(82)

Items that may be reclassif

ied subsequently to

income statement:

(3,703)

(1,081)

Exchange differences on translation of foreign operations:

Net losses taken to equity

(2,466)

(791)

Net gains on net investment hedges

512

118

Share of other comprehensive (loss)/income from associates and jo

int ventures

(79)

Debt instruments at fair value through other comprehensive income:

Net valuation losses taken to equity

(1,528)

(386)

Reclassif

ied to

income statement

207

(157)

Net impact of expected credit losses

118

Cash ﬂow hedges:

Net movements in cash ﬂow hedge reserve¹

(619)

Taxation relating to components of other comprehensive income

152

Other comprehensive loss for the year, net of taxation

(3,778)

(772)

Total comprehensive (loss)/income for the year

(876)

1,541

Total comprehensive (loss)/income attributable to:

Non-controlling interests

(88)

(17)

Parent company shareholders

(788)

1,558

Total comprehensive (loss)/income for the year

(876)

1,541

This line item has been represented in 2022 as a net balance of all movements in the cash ﬂow hedge reserve

Consolidated statement of

comprehensive income

For the year ended 31 December 2022

342

Standard Chartered

– Annual Report 2022

Financ

ial statements

Financ

ial statements

Notes

2022

$mill

ion

2021

$mill

ion

Assets

Cash and balances at central banks

13,35

58,263

72,663

Financ

ial assets held at fa

ir value through proﬁt or loss

105,812

129,121

Derivat

ive ﬁnancial

instruments

13,14

63,717

52,445

Loans and advances to banks

13,15

39,519

44,383

Loans and advances to customers

13,15

310,647

298,468

Investment securit

ies

172,448

163,437

Other assets

50,383

49,932

Current tax assets

503

766

Prepayments and accrued income

3,149

2,176

Interests in associates and jo

int ventures

1,631

2,147

Goodwill and intang

ible assets

5,869

5,471

Property, plant and equipment

5,522

5,616

Deferred tax assets

834

859

Assets classif

ied as held for sale

1,625

334

Total assets

819,922

827,818

Liab

ies

Deposits by banks

28,789

30,041

Customer accounts

461,677

474,570

Repurchase agreements and other sim

ilar secured borrow

ing

13,16

2,108

3,260

Financ

ial l

iab

ies held at fa

ir value through proﬁt or loss

79,903

85,197

Derivat

ive ﬁnancial

instruments

13,14

69,862

53,399

Debt securit

ies

in issue

13,22

61,242

61,293

Other liab

ies

43,527

44,314

Current tax liab

ies

583

348

Accruals and deferred income

5,895

4,651

Subordinated liab

ies and other borrowed funds

13,27

13,715

16,646

Deferred tax liab

ies

769

800

Provis

ions for l

iab

ies and charges

383

453

Retirement beneﬁt obligat

ions

146

210

Liab

ies

included in disposal groups held for sale

1,307

–

Total liab

ies

769,906

775,182

Equity

Share capital and share premium account

6,930

7,022

Other reserves

8,165

11,805

Retained earnings

28,067

27,184

Total parent company shareholders’ equity

43,162

46,011

Other equity instruments

6,504

6,254

Total equity excluding non-controlling interests

49,666

52,265

Non-controlling interests

350

371

Total equity

50,016

52,636

Total equity and liab

ies

819,922

827,818

The notes on pages 348 to 473 form an integral part of these ﬁnanc

ial statements.

These ﬁnancial statements were approved by the Board of D

irectors and authorised for issue on 16 February 2023 and signed

on its behalf by:

José Viñals

Bill Winters

Andy Halford

Group Chairman

Group Chief Executive

Group Chief Financ

ial Ofﬁcer

Consolidated balance sheet

As at 31 December 2022

343

Standard Chartered

– Annual Report 2022

Financ

ial statements

Consolidated statement of changes in equity

For the year ended 31 December 2022

Ordinary

capital

and share

premium

account

$mill

ion

Preference

capital

and share

premium

account

$mill

ion

Capital

and

merger

reserves

$mill

ion

Own

credit

adjust-

ment

reserve

$mill

ion

Fair

value

through

other

compre-

hensive

income

reserve

– debt

$mill

ion

Fair

value

through

other

compre-

hensive

income

reserve

– equity

$mill

ion

Cash-

ﬂow

hedge

reserve

$mill

ion

Trans-

lation

reserve

$mill

ion

Retained

earnings

$mill

ion

Parent

company

share-

holders’

equity

$mill

ion

Other

equity

instru-

ments

$mill

ion

Non-

controlling

interests

$mill

ion

Total

$mill

ion

As at 1 January 2021

5,564

1,494

17,207

(52)

529

148

(52) (5,092)

26,140

45,886

4,518

325

50,729

Proﬁt/(loss) for the year

–

2,315

–

(2)

2,313

Other comprehensive income/(loss)

–

(426)

101

(662)

175²

(757)

–

(15)

(772)

Distr

ibut

ions

–

(31)

Other equity instruments issued,

net of expenses

–

2,728

–

2,728

Redemption of other equity instruments

–

(51)

(992)

–

(1,043)

Treasury shares net movement

–

(235)

–

(235)

Share option expenses

–

147

–

147

Div

idends on ord

inary shares

–

(374)

–

(374)

Div

idends on preference shares and

AT1 securit

ies

–

(410)

–

(410)

Share buy-back

3,4

(39)

–

(506)

–

(506)

Other movements

–

(17)⁵

(4)

–

946

As at 31 December 2021

5,528

1,494

17,246

(15)

103

249

(34) (5,744)

27,184

46,011

6,254

371

52,636

Proﬁt/(loss) for the year

–

2,948

–

(46)

2,902

Other comprehensive (loss)/income

–

(48)

(1,219)

(43)

(530) (1,904)

(3,736)

–

(42)

(3,778)

Distr

ibut

ions

–

(31)

Other equity instruments issued,

net of expenses

–

1,240

–

1,240

Redemption of other equity instruments

–

(999)

–

(999)

Treasury shares net movement

–

(203)

–

(203)

Share option expenses

–

163

–

163

Div

idends on ord

inary shares

–

(393)

–

(393)

Div

idends on preference shares and

AT1 securit

ies

–

(401)

–

(401)

Share buy-back

7,8

(92)

–

(1,258)

–

(1,258)

Other movements

–

125

138

As at 31 December 2022

5,436

1,494

17,338

(63)

(1,116)

206

(564) (7,636) 28,067

43,162

6,504

350

50,016

Includes capital reserve of $5 mill

ion, cap

ital redemption reserve of $222 mill

ion and merger reserve of $17,111 m

ill

ion

Comprises actuarial gain, net of taxation on Group deﬁned beneﬁt schemes

On 25 February 2021, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases

was $19 mill

ion, and the total cons

iderat

ion pa

id was $255 mill

ion (

includ

ing $2 m

ill

ion of fees and stamp duty). The total number of shares purchased was

37,148,399 representing 1.18 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital

redemption reserve account

On 3 August 2021, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases

was $20 mill

ion, and the total cons

iderat

ion pa

id was $251 mill

ion (

includ

ing $1 m

ill

ion of fees and stamp duty). The total number of shares purchased was

39,914,763 representing 1.28 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital

redemption reserve account

Movement related to Translation adjustment and AT1 Securit

ies charges

Movement related to non-controlling interest from Mox Bank Lim

ited

On 18 February 2022, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases

was $56 mill

ion, and the total cons

iderat

ion pa

id was $754 mill

ion (

includ

ing $4 m

ill

ion of fees and stamp duty), the buy-back completed on 19 May 2022. The total

number of shares purchased was 111,295,408, representing 3.61 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the

share capital to the capital redemption reserve account

On 1 August 2022, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases

was $37 mill

ion, and the total cons

iderat

ion pa

id was $504 mill

ion (

includ

ing $2.5 m

ill

ion of fees). The total number of shares purchased was 73,073,837

representing 2.5 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption reserve

account

Movement mainly related to $21mill

ion non-controll

ing interest on Power2SME Pte Lim

ited, $8 m

ill

ion on CurrencyFa

ir and $(9) mill

ion related to AT1 secur

ies

charges

10 Movements related to non-controlling interest from Mox Bank Lim

ited ($39 m

ill

ion), Trust Bank S

ingapore Ltd ($47 mill

ion) , Zod

ia Markets Holdings Ltd ($3 mill

ion)

and Power2SME Pte Lim

ited ($9m

ill

ion)

Note 28 includes a descript

ion of each reserve.

The notes on pages 348 to 473 form an integral part of these ﬁnanc

ial statements.

344

Standard Chartered

– Annual Report 2022

Financ

ial statements

Financ

ial statements

Notes

Group

Company

2022

$mill

ion

2021

$mill

ion

2022

$mill

ion

2021

$mill

ion

Cash ﬂows from operating activ

ies:

Proﬁt before taxation

4,286

3,347

402

2,090

Adjustments for non-cash items and other adjustments

included with

income statement

3,549

2,104

565

(1,201)

Change in operating assets

(545)

(37,904)

(258)

(5,366)

Change in operating liab

ies

8,786

45,954

(966)

3,123

Contribut

ions to deﬁned beneﬁt schemes

(80)

(122)

–

UK and overseas taxes paid

(821)

(1,161)

–

Net cash from/(used in) operating activ

ies

15,175

12,218

(257)

(1,354)

Cash ﬂows from invest

ing act

ies:

Internally generated capital

ised software

(1,096)

(989)

–

Purchase of property, plant and equipment

(835)

(352)

–

Disposal of property, plant and equipment

343

816

–

Disposal of held for sale property, plant and

equipment

149

–

Acquis

ion of investment associates, and jo

int

ventures, net of cash acquired

(26)

(35)

–

Div

idends rece

ived from subsid

iar

ies, associates and

joint ventures

1,047

2,244

Purchase of investment securit

ies

(280,952)

(299,468)

–

Disposal and maturity of investment securit

ies

259,853

290,846

960

1,650

Net cash (used in)/from invest

ing act

ies

(22,576)

(8,995)

2,007

3,894

Cash ﬂows from ﬁnancing act

ies:

Exercise of share options

Purchase of own shares

(215)

(242)

(215)

(242)

Cancellation of shares includ

ing share buy-back

(1,258)

(506)

(1,258)

(506)

Premises and equipment lease liab

ity princ

ipal

payment

(269)

(278)

–

Issue of AT1 capital, net of expenses

1,240

2,728

1,240

2,728

Redemption of AT1 Capital

(999)

(1,043)

(999)

(1,043)

Gross proceeds from issue of subordinated liab

ies

750

1,137

750

1,137

Interest paid on subordinated liab

ies

(667)

(580)

(619)

(576)

Repayment of subordinated liab

ies

(1,848)

(546)

(1,800)

(546)

Proceeds from issue of senior debts

11,902

10,944

1,500

2,250

Repayment of senior debts

(7,838)

(9,945)

(2,980)

(5,408)

Interest paid on senior debts

(845)

(690)

(506)

(504)

Net cash inﬂow from non-controlling interest

–

Distr

ibut

ions and div

idends pa

id to non-controlling

interests, preference shareholders and AT1 securit

ies

(432)

(441)

(401)

(410)

Div

idends pa

id to ordinary shareholders

(393)

(374)

(393)

(374)

Net cash (used in)/from ﬁnanc

ing act

ies

(772)

265

(5,669)

(3,487)

Net (decrease)/increase in cash and cash equivalents

(8,173)

3,488

(3,919)

(947)

Cash and cash equivalents at beginn

ing of the year

99,605

97,874

11,336

12,283

Effect of exchange rate movements on cash and

cash equivalents

(2,713)

(1,757)

–

Cash and cash equivalents at end of the year

88,719

99,605

7,417

11,336

Comprises cash and balances at central banks $58,263 mill

ion (2021: $72,663 m

ill

ion), treasury b

ills and other elig

ible b

ills $17,936 mill

ion (2021: $9,132 m

ill

ion),

loans and advances to banks $20,558 mill

ion (2021: $24,788 m

ill

ion), trad

ing securit

ies $1,135 m

ill

ion (2021: $1,174 m

ill

ion) less restr

icted balances $9,173 mill

ion

(2021: $8,152 mill

ion)

Interest received was $14,590 mill

ion (2021: $10,167 m

ill

ion),

interest paid was $6,200 mill

ion (2021: $3,591 m

ill

ion).

Cash ﬂow statement

For the year ended 31 December 2022

345

Standard Chartered

– Annual Report 2022

Financ

ial statements

Company balance sheet

For the year ended 31 December 2022

Notes

2022

$mill

ion

2021

$mill

ion

Non-current assets

Investments in subsid

iary undertak

ings

60,975

60,429

Current assets

Derivat

ive ﬁnancial

instruments

320

Financ

ial assets held at fa

ir value through proﬁt or loss

15,358

15,647

Investment securit

ies

8,423

9,424

Amounts owed by subsid

iary undertak

ings

7,417

11,336

Total current assets

31,259

36,727

Current liab

ies

Derivat

ive ﬁnancial

instruments

1,343

339

Amounts owed to subsid

iary undertak

ings

–

Financ

ial l

iab

ies held at fa

ir value through proﬁt or loss

12,842

11,804

Other creditors

423

462

Total current liab

ies

14,610

12,605

Net current assets

16,649

24,122

Total assets less current liab

ies

77,624

84,551

Non-current liab

ies

Debt securit

ies

in issue

13,891

16,809

Subordinated liab

ies and other borrowed funds

11,239

13,830

Total non-current liab

ies

25,130

30,639

Total assets less liab

ies

52,494

53,912

Equity

Share capital and share premium account

6,930

7,022

Other reserves

17,271

17,220

Retained earnings

21,791

23,418

Total shareholders’ equity

45,992

47,660

Other equity instruments

6,502

6,252

Total equity

52,494

53,912

The Company has taken advantage of the exemption in section 408 of the Companies Act 2006 not to present its ind

idual

statement of comprehensive income and related notes that form a part of these ﬁnanc

ial statements. The Company proﬁt for

the period after tax is $471 mill

ion (2021: $2,081 m

ill

ion).

The notes on pages 348 to 473 form an integral part of these ﬁnanc

ial statements.

These ﬁnancial statements were approved by the Board of D

irectors and authorised for issue on 16 February 2023 and signed

on its behalf by:

José Viñals

Bill Winters

Andy Halford

Group Chairman

Group Chief Executive

Group Chief Financ

ial Ofﬁcer

346

Standard Chartered

– Annual Report 2022

Financ

ial statements

Financ

ial statements

capital and

premium

account

$mill

ion

Capital

and merger

reserve

$mill

ion

Own credit

adjustment

reserve

$mill

ion

Cash ﬂow

hedge

reserve

$mill

ion

Retained

earnings

$mill

ion

Other equity

instruments

$mill

ion

Total

$mill

ion

As at 1 January 2021

7,058

17,207

(18)

(11)

22,774

4,516

51,526

Proﬁt for the year²

–

2,081

–

2,081

Other comprehensive income/(loss)

–

(1)

–

Other equity instruments issued, net of expenses

–

2,728

Treasury shares purchased

–

(242)

–

(242)

Treasury shares issued

–

Share option expenses

–

147

–

147

Div

idends on ord

inary shares

–

(374)

–

(374)

Div

idends on preference share and AT1 secur

ies

–

(410)

–

(410)

Redemption of other equity instruments

–

(51)

(992)

(1,043)

Share buy-back

3,4

(39)

–

(506)

Other movements

–

(8)

(5)

As at 31 December 2021

7,022

17,246

(14)

(12)

23,418

6,252

53,912

Proﬁt for the year

–

471

–

471

Other comprehensive loss

–

(5)

(36)

–

(41)

Other equity instruments issued, net of expenses

–

1,240

Treasury shares purchased

–

(215)

–

(215)

Treasury shares issued

–

Share option expenses

–

163

–

163

Div

idends on ord

inary shares

–

(393)

–

(393)

Div

idends on preference share and AT1 secur

ies

–

(401)

–

(401)

Redemption of other equity instruments

–

(999)

Share buy-back

6,7

(92)

–

(1,258)

Other movements

–

(6)

As at 31 December 2022

6,930

17,338

(19)

(48)

21,791

6,502

52,494

Includes capital reserve of $5 mill

ion, cap

ital redemption reserve of $222 mill

ion and merger reserve of $17,111 m

ill

ion

Includes div

idend rece

ived of $550 mill

ion (2021: $1,511 m

ill

ion) from Standard Chartered Hold

ing Lim

ited

On 25 February 2021, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases

was $19 mill

ion, and the total cons

iderat

ion pa

id was $255 mill

ion (

includ

ing $2 m

ill

ion of fees and stamp duty). The total number of shares purchased was

37,148,399 representing 1.18 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital

redemption reserve account

On 3 August 2021, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases

was $20 mill

ion, and the total cons

iderat

ion pa

id was $251 mill

ion (

includ

ing $1 m

ill

ion of fees and stamp duty). The total number of shares purchased was

39,914,763 representing 1.28 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital

redemption reserve account

Movement mainly related to AT1 securit

ies charges

On 18 February 2022, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases

was $56 mill

ion, and the total cons

iderat

ion pa

id was $754 mill

ion (

includ

ing $4 m

ill

ion of fees and stamp duty), the buy-back completed on 19 May 2022. The total

number of shares purchased was 111,295,408, representing 3.61 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the

share capital to the capital redemption reserve account

On 1 August 2022, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases

was $37 mill

ion, and the total cons

iderat

ion pa

id was $504 mill

ion (

includ

ing $2.5 m

ill

ion of fees). The total number of shares purchased was 73,073,837

representing 2.5 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption

reserve account

Note 28 includes a descript

ion of each reserve.

The notes on pages 348 to 473 form an integral part of these ﬁnanc

ial statements.

Company statement of changes in equity

For the year ended 31 December 2022

347

Standard Chartered

– Annual Report 2022

Financ

ial statements

Contents – Notes to the ﬁnancial statements

Section

Note

Page

Basis of preparation

Accounting polic

ies

348

Performance/return

Segmental informat

ion

350

Net interest income

356

Net fees and commiss

ion

356

Net trading income

359

Other operating income

359

Operating expenses

360

Credit impa

irment

361

Goodwill, property, plant and equipment and other impa

irment

365

Taxation

365

Div

idends

369

Earnings per ordinary share

370

Assets and liab

ies held at fa

ir value

Financ

ial

instruments

371

Derivat

ive ﬁnancial

instruments

397

Financ

ial

instruments held at amortised cost

Loans and advances to banks and customers

407

Reverse repurchase and repurchase agreements includ

ing other s

ilar

lending and borrowing

407

Other assets and investments

Goodwill and intang

ible assets

409

Property, plant and equipment

412

Leased assets

414

Other assets

415

Assets held for sale and associated liab

ies

415

Funding, accruals, provis

ions, cont

ingent

liab

ies and legal proceed

ings

Debt securit

ies

in issue

417

Other liab

ies

418

Provis

ions for l

iab

ies and charges

418

Contingent liab

ies and comm

itments

419

Legal and regulatory matters

420

Capital instruments, equity and reserves

Subordinated liab

ies and other borrowed funds

421

Share capital, other equity instruments and reserves

422

Non-controlling interests

427

Employee beneﬁts

Retirement beneﬁt obligat

ions

428

Share-based payments

433

Scope of consolidat

ion

Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

437

Structured entit

ies

443

Cash ﬂow statement

445

Cash and cash equivalents

446

Other disclosure matters

Related party transactions

447

Post balance sheet events

448

Auditor’s remuneration

448

Standard Chartered PLC (Company)

449

Related undertakings of the Group

452

348

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

1. Accounting polic

ies

Statement of compliance

The Group ﬁnancial statements consol

idate Standard

Chartered PLC (the Company) and its subsid

iar

ies (together

referred to as the Group) and equity account the Group’s

interests in associates and jo

intly controlled ent

ies. The

parent company ﬁnancial statements present

informat

ion

about the Company as a separate entity.

The Group ﬁnancial statements have been prepared

accordance with UK-adopted internat

ional account

ing

standards and International Financ

ial Report

ing Standards

(IFRS) as adopted by the European Union (EU IFRS). The

Company ﬁnancial statements have been prepared

accordance with UK-adopted internat

ional account

ing

standards as applied in conformity with section 408 of the

Companies Act 2006. The ﬁnanc

ial statements have been

prepared in accordance with the requirements of the

Companies Act 2006.

There are no sign

iﬁcant d

ifferences between UK-adopted

internat

ional account

ing standards and EU IFRS.

The following parts of the Risk review and Capital review

form part of these ﬁnancial statements:

a) Risk review: Disclosures marked as ‘audited’ from the start

of the Credit Risk section (page 236) to the end of Other

princ

ipal r

isks in the same section (page 319).

b) Capital review: Tables marked as ‘audited’ from the start

of ‘CRD Capital base’ to the end of ‘Movement in total

capital’, excluding ‘Total risk-weighted assets’ (pages 321 to

322).

Basis of preparation

The consolidated and Company ﬁnanc

ial statements have

been prepared on a going concern basis and under the

histor

ical cost convent

ion, as modif

ied by the revaluat

ion of

cash-settled share-based payments, fair value through

other comprehensive income, and ﬁnanc

ial assets and

liab

ies (

includ

ing der

ivat

ives) at fa

ir value through proﬁt or

loss.

The consolidated ﬁnanc

ial statements are presented

United States dollars ($), being the presentation currency of

the Group and functional currency of the Company, and all

values are rounded to the nearest mill

ion dollars, except

when otherwise ind

icated.

Sign

iﬁcant and other account

ing estimates and judgement

In determin

ing the carry

ing amounts of certain assets and

liab

ies, the Group makes assumpt

ions of the effects of

uncertain future events on those assets and liab

ies at the

balance sheet date. The Group’s estimates and assumptions

are based on histor

ical exper

ience and expectation of future

events and are reviewed period

ically. Further

informat

ion

about key assumptions concerning the future, and other key

sources of estimat

ion uncerta

inty and judgement, are set

out in the relevant disclosure notes for the areas set out

under the relevant headings below:

Sign

iﬁcant account

ing estimates and crit

ical judgements

Sign

iﬁcant account

ing estimates and judgements represent

those items which have a sign

iﬁcant r

isk of causing a

material adjustment to the carrying amounts of assets and

liab

ies w

ith

in the next year. S

ign

iﬁcant account

ing

estimates and judgements are:

•

Credit impa

irment,

includ

ing evaluat

ion of management

overlays and post-model adjustments, and determinat

ion

of probabil

ity we

ight

ings for Stage 3

ind

idually assessed

provis

ions (Note 8)

•

Financ

ial

instruments measured at fair value (Note 13)

•

Investments in subsid

iary undertak

ings, jo

int ventures and

associates – China Bohai associate accounting and

impa

irment analys

is (Note 32)

Other areas of accounting estimate and judgement

Other areas of accounting estimate and judgement do not

meet the deﬁnit

ion under IAS 1 of sign

iﬁcant account

ing

estimates or crit

ical account

ing judgements, but the

recognit

ion of certa

in material assets and liab

ies are

based on assumptions and/or are subject to long-term

uncertaint

ies. The other areas of account

ing estimate and

judgement are:

• Taxation (Note 10)

•

Goodwill impa

irment (Note 17)

•

Property, plant and equipment (Note 18)

•

Recoverable amounts for aircraft operating lease assets

(Note 18)

•

Retirement beneﬁt obligat

ions (Note 30)

•

Provis

ions for l

iab

ies and charges (Note 24)

•

Share-based payments (Note 31)

Climate impact on the Group’s balance sheet

Climate, and the impact of climate on the Group’s balance

sheet is considered as an area of sign

iﬁcant account

ing

estimate and judgment through the uncertainty of future

events and the impact of that uncertainty on the Group’s

assets and liab

ies. It

is noted that although not currently

quantitat

ively mater

ial, the Group considers climate to be

qualitat

ively mater

ial to the Group.

The Group has assessed the impact of climate risk on the

ﬁnancial report. Th

is is set out with

in the Susta

inable and

Responsible Business chapter on pages 64 to 66 which

incorporates the Group’s Climate-related Financ

ial

Disclosures which align with the recommendations from the

Task Force for Climate related Financ

ial D

isclosures (TCFD).

Further risk disclosure has been provided on pages 301 and

319 of the Princ

ipal R

isks and Uncertaint

ies sect

ion of the

Annual Report where the Group has described how it

manages climate risk as an Integrated Risk Type.

Notes to the ﬁnancial statements

349

Standard Chartered

– Annual Report 2022

Financ

ial statements

1. Accounting polic

ies

continued

The areas of impact and where judgements and the use of

estimates have been applied were credit risk and the impact

on lending portfolios; Environmental, Sustainab

ity or

Governance (ESG) features with

issued loans and bonds;

physical risk on our mortgage lending portfolio; and, the

corporate plan, in respect of which forward looking cash

ﬂows impact the recoverabil

ity of certa

in assets, includ

ing of

goodwill, deferred tax assets and investments in subsid

iary

undertakings.

This assessment on the corporate loan portfolio was

undertaken by consider

ing the matur

ity proﬁle of the loan

portfolio which is major

ity shorter term. Trans

ion r

isk, as our

clients move to lower carbon emitt

ing revenues, (e

ither by

virtue of legislat

ion or chang

ing end customer preference) is

considered with reference to client transit

ion pathways and

manifests over a longer term than the maturity of the loan

book (up to 2050). Further transit

ion r

isk is managed through

reviews of clients with ESG risk by the Group’s Risk function,

and through an ongoing process of ident

ify

ing clients which

have transit

ion pathways that are Par

is 1.5 degree compliant

and congruent with the Groups.

Physical risk is already included with

in the majority of our

mortgage lending and we have applied scenario analysis

against the pathways of different temperature addit

ions

and country policy scenarios. We also assess the impact of

climate risk on the classif

icat

ion of ﬁnanc

ial

instruments

under IFRS 9, when ESG triggers may affect the cash ﬂows

received by the Group under the contractual terms of the

instrument.

The Group Climate Risk team have performed a top-down

quantitat

ive assessment of the

impact of climate risk on the

IFRS 9 ECL provis

ion. Th

is assessment has been performed

across both the CCIB and CPBB portfolios. CCIB includes

Corporates, Sovereign, Asset Backed Securit

ies, Commerc

ial

and Special

ised Lend

ing. CPBB includes Mortgages, Personal

Loans and Credit Cards. The climate adjusted ECL was

estimated by adding climate scalars (multipl

icat

ive

adjustments) to the business as usual ECL. The scalars, such

as LGD increases, have been informed by the judgement of

using three Network of Central Banks and Supervisors for

Greening the Financ

ial System (NGFS) pathways/scenar

ios,

being Early Action, Late Action and No Addit

ional Act

ion.

These pathways have been probabil

ity we

ighted and

generally include the addit

ion of carbon charges/taxes over

time to model transit

ion r

isk. The impact assessment which is

considered a resulted in an marginal ECL increase across

CCIB and CPBB which will not be recorded as an overlay for

the 2022 year end (in line with our view that the quantitat

ive

impact of Climate Risk is currently lim

ited).

The Group’s corporate plan has a 5 year outlook and already

includes where we have committed to transit

ion

ing away

from certain high carbon sectors (i.e. coal), offset by

transit

ion ﬁnance opportun

ies. Th

is is shorter term than

many of the climate scenario outlooks but seeks to capture

the nearer term performance as required by recoverabil

ity

models. We have for the ﬁrst time in the 2023 corporate plan

included antic

ipated ECL charges l

inked to climate for three

sectors (Oil and Gas, Metals and Min

ing and Power) over the

5 years. This addit

ion of ECL has not

in itself, impacted the

recoverabil

ity of assets supported by d

iscounted cash ﬂow

models (such as Value in Use) which util

ise the corporate

plan.

With the aim to enhance our internal scenario analysis

capabil

ies in line with our Risk Appetite Statement, in 2022

we assessed the impact on our CCIB corporate client

portfolio based on three International Energy Agency (IEA)

scenarios and three Phase 2 scenarios from the NGFS

(Which align to the CBES scenarios) and partic

ipated

in the

Monetary Authority of Singapore Industry-Wide Stress Test.

We also assessed the impact of sea level rises under various

Intergovernmental Panel on Climate Change (IPCC)

Representative Concentration Pathways (RCP) scenarios to

explore the Physical Risk impact on the Consumer, Private

and Business Banking (CPBB) resident

ial mortgage portfol

over short- and long-term time horizons for internal risk

management purposes. Notwithstand

ing these challenges,

our work to date, using certain assumptions and proxies,

ind

icates that our bus

iness is resil

ient to all Network of

Central Banks and Supervisors for Greening the Financ

ial

System (NGFS) and IEA scenarios that were explored.

The Group, although acknowledging the lim

itat

ions of

current data available, increas

ing soph

ist

icat

ion of models

evolving and nascent nature of climate impacts on internal

and client assets, considers Climate Risk to have lim

ited

quantitat

ive

impact in the immed

iate term and as a longer

term risk will be addressed through its business strategy and

ﬁnancial plann

ing as the Group implements its net zero

journey.

IFRS and Hong Kong accounting requirements

As required by the Hong Kong List

ing Rules, an explanat

ion

of the differences in accounting practices between UK-

adopted IFRS and Hong Kong Financ

ial Report

ing Standards

is required to be disclosed. There would be no sign

iﬁcant

differences had these accounts been prepared in

accordance with Hong Kong Financ

ial Report

ing Standards.

Comparatives

Certain comparatives have been restated in line with current

year disclosures. Details of these changes are set out in the

relevant sections and notes below:

•

Note 2 Segmental informat

ion

•

Note 4 Net fees and commiss

ion

•

Note 12 Earnings per ordinary share

•

Note 13 Financ

ial

instruments

•

Note 14 Derivat

ive ﬁnancial

instruments

•

Note 33 Structured entit

ies

•

Note 36 Related party transactions

•

Risk review: various credit risk tables for new segment

Ventures and Operational Risk events and losses

•

Capital review: new segment Ventures

New accounting standards in issue but not yet effective

IFRS 17 Insurance Contracts

IFRS 17 Insurance Contracts was issued in May 2017 (and

subsequently amended in June 2020) to replace IFRS 4

Insurance Contracts and to establish a comprehensive

standard for inceptors of insurance polic

ies. The Group w

ill

apply IFRS 17 for annual reporting periods beginn

ing on

January 1, 2023. IFRS 17 will not have a material impact on the

Group’s ﬁnancial statements.

350

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

1. Accounting polic

ies

continued

Going concern

These ﬁnancial statements were approved by the Board of

directors on 16 February 2023. The directors have made an

assessment of the Group’s abil

ity to cont

inue as a going

concern. This assessment has been made having considered

the impact of COVID-19, macroeconomic and geopolit

ical

headwinds, includ

ing:

•

Review of the Group Strategy and Corporate Plan

•

An assessment of the actual performance to date, loan

book quality, credit impa

irment, legal, regulatory and

compliance matters, and the updated annual budget

•

Considerat

ion of stress test

ing performed, includ

ing both

the Bank of England annual stress test and a Group

Recovery and Resolution Plan (RRP) as submitted to the

PRA. Both these submiss

ions

include the applicat

ion of

stressed scenarios includ

ing; COVID add

ional waves w

ith

the accompanying economic shocks, credit impact and

short term liqu

ity shocks. Under the tests and through

the range of scenarios, the results of these exercises and

the RRP demonstrate that the Group has sufﬁcient cap

ital

and liqu

ity to continue as a going concern and meet

min

imum regulatory cap

ital and liqu

ity requirements

•

Analysis of the capital, funding and liqu

ity posit

ion of the

Group, includ

ing the cap

ital and leverage ratios, and

ICAAP which summarises the Group’s capital and risk

assessment processes, assesses its capital requirements

and the adequacy of resources to meet them. Further,

funding and liqu

ity was considered in the context of the

risk appetite metrics, includ

ing the ADR and LCR rat

ios

•

The Group’s Internal Liqu

ity Adequacy Assessment

Process (ILAAP), which considers the Group’s liqu

ity

posit

ion,

its framework and whether sufﬁc

ient l

iqu

ity

resources are being mainta

ined to meet l

iab

ies as they

fall due, was also reviewed

•

The level of debt in issue, includ

ing redempt

ions and

issuances during the year, debt falling due for repayment

in the next 12 months and further planned debt issuances,

includ

ing the appet

ite in the market for the Group’s debt

•

A detailed review of all princ

ipal and emerg

ing risks

Based on the analysis performed, the directors conﬁrm they

are satisf

ied that the Group has adequate resources to

continue in business for a period of at least 12 months from 16

February 2023. For this reason, the Group continues to adopt

the going concern basis of accounting for preparing the

ﬁnancial statements.

2. Segmental informat

ion

Basis of preparation

The analysis reﬂects how the client segments and geographic

regions are managed internally. This is described as the

Management View (on an underlying basis) and is princ

ipally

the location from which a client relationsh

is managed,

which may differ from where it is ﬁnanc

ially booked and may

be shared between businesses and/or regions. In certain

instances this approach is not appropriate and a Financ

ial

View is disclosed, that is, the location in which the transaction

or balance was booked. Typically, the Financ

ial V

iew is used in

areas such as the Market and Liqu

ity Risk reviews where

actual booking location is more important for an assessment.

Segmental informat

ion

is therefore on a Management View

unless otherwise stated.

Segments and regions

The Group’s segmental reporting is in accordance with IFRS 8

Operating Segments and is reported consistently with the

internal performance framework and as presented to the

Group’s Management Team.

As part of the ongoing execution of its refreshed strategy, the

Group has expanded and reorganised its reporting structure

with the creation of a third client segment, Ventures, effective

on 1st January 2022. Ventures is a consolidat

ion of SC Ventures

and its related entit

ies as well as the Group’s two majority-

owned dig

ital banks Mox

in Hong Kong and Trust Bank in

Singapore.

•

SC Ventures is the platform and catalyst for the Group to

promote innovat

ion,

invest in disrupt

ive ﬁnancial technology

and explore alternative business models

•

Mox, a cloud-native, mobile only dig

ital bank, was launched

in Hong Kong as a jo

int venture w

ith HKT, PCCW and Ctrip

in September 2020

•

Trust Bank was launched in Singapore in partnership with

FairPr

ice Group, the nat

ion’s leading grocery retailer, in

September 2022

The changes above require comparative periods to be

restated.

351

Standard Chartered

– Annual Report 2022

Financ

ial statements

2. Segmental informat

ion

continued

Restructuring items excluded from underlying results

The Group’s statutory IFRS performance is adjusted for certain items to arrive at alternative performance measures. These items

include proﬁts or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent, other

infrequent and/or exceptional transactions that are sign

iﬁcant or mater

ial in the context of the Group’s normal business

earnings for the period and items which management and investors would ordinar

ily

ident

ify separately when assess

ing

consistent performance period by period. The alternative performance measures are not with

in the scope of IFRS and not a

substitute for IFRS measures. These adjustments are set out below.

Restructuring charges of $174 mill

ion pr

imar

ily relate to redundanc

ies partly offset by income from the Princ

ipal F

inance and

Ship Leasing portfolios.

Reconcil

iat

ions between underlying and statutory results are set out in the tables below:

2022

Underlying

$mill

ion

Regulatory

ﬁne

$mill

ion

Restructuring

$mill

ion

Net gain on

businesses

disposed of/

held for sale

$mill

ion

Goodwill

and other

impa

irment

$mill

ion

Statutory

$mill

ion

Operating income

16,255

–

16,318

Operating expenses

(10,743)

–

(170)

–

(10,913)

Operating proﬁt/(loss) before

impa

irment losses and taxat

ion

5,512

–

(127)

–

5,405

Credit impa

irment

(838)

–

(836)

Other impa

irment

(79)

–

(38)

–

(322)

(439)

Proﬁt from associates and jo

int ventures

167

–

(11)

–

156

Proﬁt/(loss) before taxation

4,762

–

(174)

(322)

4,286

2021

Underlying

$mill

ion

Regulatory

ﬁne

$mill

ion

Restructuring

$mill

ion

Net gain on

businesses

disposed of/

held for sale

$mill

ion

Goodwill

and other

impa

irment

$mill

ion

Statutory

$mill

ion

Operating income

14,713

–

(32)

–

14,701

Operating expenses

(10,375)

(62)

(487)

–

(10,924)

Operating proﬁt/(loss) before

impa

irment losses and taxat

ion

4,338

(62)

(519)

–

3,777

Credit impa

irment

(263)

–

(254)

Other impa

irment

(55)

–

(17)

–

(300)

(372)

Proﬁt from associates and jo

int ventures

176

–

196

Proﬁt/(loss) before taxation

4,196

(62)

(507)

(300)

3,347

Goodwill and other impa

irment

include $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021

comparative has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt to Goodwill and other

impa

irment

352

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

2. Segmental informat

ion

continued

Underlying performance by client segment

2022

Corporate,

Commercial

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Operating income

10,045

6,016

165

16,255

External

8,899

4,989

2,338

16,255

Inter-segment

1,146

1,027

–

(2,173)

–

Operating expenses

(5,480)

(4,148)

(336)

(779)

(10,743)

Operating proﬁt/(loss) before impa

irment losses

and taxation

4,565

1,868

(307)

(614)

5,512

Credit impa

irment

(425)

(262)

(16)

(135)

(838)

Other impa

irment

(40)

(10)

(24)

(5)

(79)

Proﬁt from associates and jo

int ventures

–

(16)

183

167

Underlying proﬁt/(loss) before taxation

4,100

1,596

(363)

(571)

4,762

Restructuring

(50)

(63)

(1)

(60)

(174)

Goodwill and other impa

irment⁴

–

(322)

Other items

–

Statutory proﬁt/(loss) before taxation

4,050

1,533

(364)

(933)

4,286

Total assets

401,567

133,956

2,451

281,948

819,922

Of which: loans and advances to customers

184,254

130,985

702

41,789

357,730

loans and advances to customers

139,756

130,957

702

39,232

310,647

loans held at fair value through proﬁt or loss

(FVTPL)

44,498

–

2,557

47,083

Total liab

ies

479,981

185,396

1,658

102,871

769,906

Of which: customer accounts

332,176

180,659

1,548

5,846

520,229

2021 (Restated)¹

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Operating income

8,407

5,735

570

14,713

External

7,952

5,375

1,385

14,713

Inter-segment

455

360

–

(815)

–

Operating expenses

(5,278)

(4,227)

(253)

(617)

(10,375)

Operating proﬁt/(loss) before impa

irment losses

and taxation

3,129

1,508

(252)

(47)

4,338

Credit impa

irment

(282)

(3)

(22)

(263)

Other impa

irment

(49)

–

(6)

(55)

Proﬁt from associates and jo

int ventures

–

(6)

182

176

Underlying proﬁt/(loss) before taxation

3,124

1,226

(261)

107

4,196

Restructuring

(114)

(235)

(3)

(155)

(507)

Goodwill and other impa

irment⁴

–

(300)

Other items

–

(62)

(42)

Statutory proﬁt/(loss) before taxation

3,010

991

(244)

(410)

3,347

Total assets

405,778

139,364

1,098

281,578

827,818

Of which: loans and advances to customers

208,729

136,477

24,409

369,703

loans and advances to customers

139,335

136,410

22,635

298,468

loans held at fair value through proﬁt or loss

(FVTPL)

69,394

–

1,774

71,235

Total liab

ies

481,397

182,210

766

110,809

775,182

Of which: customer accounts

351,696

178,088

689

11,982

542,455

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022

Prior periods have been restated. Ventures is comprised of Mox, Trust Bank & SC Ventures; a large part of Ventures income is from Dig

ital banks

in current year

Loans held at FVTPL includes $40,537 mill

ion (2021: $61,282 m

ill

ion) of repurchase agreements

Customer accounts includes $11,706 mill

ion (2021: $9,291 m

ill

ion) of FVTPL and $46,846 m

ill

ion (2021: $58,594 m

ill

ion) of repurchase agreements

Goodwill and other impa

irment

include $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021

comparative has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt to Goodwill and Other

impa

irment

353

Standard Chartered

– Annual Report 2022

Financ

ial statements

2. Segmental informat

ion

continued

Operating income by client segment

2022

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Underlying operating income

10,045

6,016

165

16,255

Restructuring

–

Other items

–

Statutory operating income

10,086

6,016

187

16,318

2021 (Restated)¹

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Underlying operating income

8,407

5,735

570

14,713

Restructuring

–

(41)

(32)

Other items

–

Statutory operating income

8,416

5,735

529

14,701

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022

Prior periods have been restated

Underlying performance by region

2022

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

$mill

ion

Total

$mill

ion

Operating income

11,213

2,606

2,353

16,255

Operating expenses

(6,867)

(1,669)

(1,564)

(643)

(10,743)

Operating proﬁt/(loss) before impa

irment losses

and taxation

4,346

937

789

(560)

5,512

Credit impa

irment

(790)

(120)

(5)

(838)

Other impa

irment

(47)

(3)

(31)

(79)

Proﬁt from associates and jo

int ventures

179

–

(12)

167

Underlying proﬁt/(loss) before taxation

3,688

819

863

(608)

4,762

Restructuring

(75)

(29)

(23)

(47)

(174)

Goodwill and other impa

irment

(308)

–

(14)

(322)

Other items

–

Statutory proﬁt/(loss) before taxation

3,325

790

840

(669)

4,286

Total assets

488,399

53,086

268,960

9,477

819,922

Of which: loans and advances to customers

270,892

23,857

62,981

–

357,730

loans and advances to customers

257,171

21,570

31,906

–

310,647

loans held at fair value through proﬁt or loss

(FVTPL)

13,721

2,287

31,075

–

47,083

Total liab

ies

441,349

40,902

219,701

67,954

769,906

Of which: customer accounts

346,832

31,860

141,537

–

520,229

354

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

2. Segmental informat

ion

continued

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

$mill

ion

Total

$mill

ion

Operating income

10,448

2,446

2,003

(184)

14,713

Operating expenses

(6,773)

(1,623)

(1,485)

(494)

(10,375)

Operating proﬁt/(loss) before impa

irment losses

and taxation

3,675

823

518

(678)

4,338

Credit impa

irment

(434)

144

(7)

(263)

Other impa

irment

–

(1)

(18)

(36)

(55)

Proﬁt from associates and jo

int ventures

175

–

176

Underlying proﬁt/(loss) before taxation

3,416

856

644

(720)

4,196

Restructuring

(286)

(25)

(69)

(127)

(507)

Goodwill and other impa

irment

(300)

–

(300)

Other items

–

(42)

Statutory proﬁt/(loss) before taxation

2,830

831

575

(889)

3,347

Total assets

483,950

57,405

277,008

9,455

827,818

Of which: loans and advances to customers

265,744

27,600

76,359

–

369,703

loans and advances to customers

243,861

25,177

29,430

–

298,468

loans held at fair value through proﬁt or loss

(FVTPL)

21,883

2,423

46,929

–

71,235

Total liab

ies

434,200

41,260

233,915

65,807

775,182

Of which: customer accounts

355,792

34,701

151,962

–

542,455

Goodwill and other impa

irment

include $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021

comparative has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt to Goodwill and Other

impa

irment.

Loans held at FVTPL includes $40,537 mill

ion (FY’21 $61,282 m

ill

ion) of repurchase agreements

Customer accounts includes $11,706 mill

ion (FY’21 $9,291 m

ill

ion) of FVTPL and $46,846 m

ill

ion (FY’21 $58,594 m

ill

ion) of repurchase agreements

Operating income by region

2022

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

$mill

ion

Total

$mill

ion

Underlying operating income

11,213

2,606

2,353

16,255

Restructuring

(1)

Other items

–

Statutory operating income

11,256

2,608

2,352

102

16,318

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

$mill

ion

Total

$mill

ion

Underlying operating income

10,448

2,446

2,003

(184)

14,713

Restructuring

(30)

(35)

(32)

Other items

–

Statutory operating income

10,478

2,449

1,973

(199)

14,701

355

Standard Chartered

– Annual Report 2022

Financ

ial statements

2. Segmental informat

ion

continued

Addit

ional segmental

informat

ion (statutory)

2022

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Net interest income

3,616

3,969

(10)

7,593

Net fees and commiss

ion

income

1,706

1,524

(125)

3,113

Net trading and other income

4,764

523

322

5,612

Operating income

10,086

6,016

187

16,318

2021 (Restated)¹

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Net interest income

3,267

3,216

(2)

317

6,798

Net fees and commiss

ion

income

1,784

2,003

(66)

3,722

Net trading and other income

3,365

516

278

4,181

Operating income

8,416

5,735

529

14,701

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022

Prior periods have been restated

Addit

ional segmental

informat

ion (statutory)

continued

2022

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

$mill

ion

Total

$mill

ion

Net interest income

5,747

1,299

260

287

7,593

Net fees and commiss

ion

income

2,224

526

(163)

3,113

Net trading and other income

3,285

783

1,566

(22)

5,612

Operating income

11,256

2,608

2,352

102

16,318

2021

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

$mill

ion

Total

$mill

ion

Net interest income

5,069

1,190

490

6,798

Net fees and commiss

ion

income

2,764

614

547

(203)

3,722

Net trading and other income

2,645

645

936

(45)

4,181

Operating income

10,478

2,449

1,973

(199)

14,701

2022

Hong

Kong

$mill

ion

Korea

$mill

ion

China

$mill

ion

Taiwan

$mill

ion

Singapore

$mill

ion

India

$mill

ion

Indonesia

$mill

ion

UAE

$mill

ion

$mill

ion

$mill

ion

Net interest income

1,843

751

561

171

982

611

281

(189)

330

Net fees and commiss

ion

income

658

157

143

162

553

239

393

Net trading and other income

1,235

237

450

141

380

377

268

1,167

306

Operating income

3,736

1,145

1,154

474

1,915

1,227

214

630

1,022

1,029

2021

Hong

Kong

$mill

ion

Korea

$mill

ion

China

$mill

ion

Taiwan

$mill

ion

Singapore

$mill

ion

India

$mill

ion

Indonesia

$mill

ion

UAE

$mill

ion

$mill

ion

$mill

ion

Net interest income

1,422

724

589

178

742

706

229

220

198

Net fees and commiss

ion

income

902

213

192

218

664

240

101

414

Net trading and other income

1,148

174

306

192

336

216

624

206

Operating income

3,472

1,111

1,087

494

1,598

1,282

213

546

865

818

356

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

3. Net interest income

Accounting policy

Interest income for ﬁnanc

ial assets held at e

ither fair value through other comprehensive income or amortised cost, and

interest expense on all ﬁnanc

ial l

iab

ies held at amort

ised cost is recognised in proﬁt or loss using the effective interest

method.

The effective interest method is a method of calculating the amortised cost of a ﬁnanc

ial asset or a ﬁnancial l

iab

ity and of

allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that

discounts estimated future cash payments or receipts through the expected life of the ﬁnanc

ial

instrument or, when

appropriate, a shorter period, to the net carrying amount of the ﬁnanc

ial asset or ﬁnancial l

iab

ity. When calculating the

effective interest rate, the Group estimates cash ﬂows consider

ing all contractual terms of the ﬁnancial

instrument (for

example prepayment options) but does not consider future credit losses. The calculation includes all fees paid or received

between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other

premiums or discounts. For ﬂoating-rate ﬁnanc

ial

instruments, period

ic re-est

imat

ion of cash ﬂows that reﬂect the

movements in the market rates of interest alters the effective interest rate. Where the estimates of cash ﬂows have been

revised, the carrying amount of the ﬁnanc

ial asset or l

iab

ity is adjusted to reﬂect the actual and revised cash ﬂows,

discounted at the instruments orig

inal effect

ive interest rate. The adjustment is recognised as interest income or expense in

the period in which the revis

ion

is made as long as the change in estimates is not due to credit issues.

Interest income for ﬁnanc

ial assets that are e

ither held at fair value through other comprehensive income or amortised cost

that have become credit-impa

ired subsequent to

ial recognit

ion (stage 3) and have had amounts wr

itten off, is

recognised using the credit adjusted effective interest rate. This rate is calculated in the same manner as the effective

interest rate except that expected credit losses are included in the expected cash ﬂows. Interest income is therefore

recognised on the amortised cost of the ﬁnanc

ial asset

includ

ing expected cred

it losses. Should the credit risk on a stage 3

ﬁnancial asset

improve such that the ﬁnanc

ial asset

is no longer considered credit-impa

ired,

interest income recognit

ion

reverts to a computation based on the rehabil

itated gross carry

ing value of the ﬁnanc

ial asset.

2022

$mill

ion

2021

$mill

ion

Balances at central banks

765

Loans and advances to banks

853

490

Loans and advances to customers

10,032

7,347

Debt securit

ies

2,836

1,787

Other elig

ible b

ills

630

303

Accrued on impa

ired assets (d

iscount unwind)

136

227

Interest income

15,252

10,246

Of which: ﬁnanc

ial

instruments held at fair value through other comprehensive income

2,167

1,541

Deposits by banks

433

136

Customer accounts

5,443

2,196

Debt securit

ies

in issue

1,169

566

Subordinated liab

ies and other borrowed funds

570

497

Interest expense on IFRS 16 lease liab

ies

Interest expense

7,659

3,448

Net interest income

7,593

6,798

Includes a $117 mill

ion (2021: $171 m

ill

ion) adjustment

in relation to interest earned on impa

ired assets as requ

ired by IFRS9 Financ

ial Instruments Recogn

ion and

Measurement

4. Net fees and commiss

ion

Accounting policy

Fees and commiss

ions charged for serv

ices provided by the Group are recognised as revenue when the Group satisf

ies the

performance obligat

ions to the customer. Serv

ices provided by the Group are either satisf

ied at po

int in time or over time.

Fees and commiss

ion

income are measured based on the considerat

ion spec

ied

in the contract with the customer.

The Group can act as trustee or in other ﬁduc

iary capac

ies that result

in the holding or placing of assets on behalf of

ind

iduals, trusts, retirement beneﬁt plans and other inst

itut

ions. The assets and income aris

ing thereon are excluded from

these ﬁnancial statements, as they are not assets and

income of the Group.

357

Standard Chartered

– Annual Report 2022

Financ

ial statements

4. Net fees and commiss

ion

continued

The Group applies the following practical expedients:

•

informat

ion on amounts of transact

ion price allocated to unsatisf

ied (or part

ially unsatisf

ied) performance obl

igat

ions at the

end of the reporting period is not disclosed as almost all fee-earning contracts have an expected duration of less than one

year

•

promised considerat

ion

is not adjusted for the effects of a sign

iﬁcant ﬁnancing component as the per

iod between the Group

provid

ing a serv

ice and the customer paying for it is expected to be less than one year

•

incremental costs of obtain

ing a fee-earn

ing contract are recognised upfront in ‘Fees and commiss

ion expense’ rather than

amortised, if the expected term of the contract is less than one year

The determinat

ion of the serv

ices performed for the customer, the transaction price, and when the services are completed

depends on the nature of the product with the customer. The main considerat

ions on

income recognit

ion by product are as

follows:

Transaction Banking

The Group recognises fee income associated with transactional trade and cash management at the point in time the service is

provided. The Group recognises income associated with trade contingent risk exposures (such as letters of credit and

guarantees) over the period in which the service is provided.

Payment of fees is usually received at the same time the service is provided. In some cases, letters of credit and guarantees

issued by the Group have annual upfront premiums, which are amortised on a straight-line basis to fee income over the year.

Financ

ial Markets

The Group recognises fee income at the point in time the service is provided. Fee income is recognised for a sign

iﬁcant non-

lending service when the transaction has been completed and the terms of the contract with the customer entitle the Group to

the fee. This includes fees such as structuring and advisory fees. Fees are usually received shortly after the service is provided.

Syndicat

ion fees are recogn

ised when the syndicat

ion

is complete, deﬁned as achiev

ing the ﬁnal approved hold pos

ion. Fees

are generally received before completion of the syndicat

ion, or w

ith

in 12 months of the transact

ion date.

Securit

ies serv

ices include custody services, fund accounting and admin

istrat

ion, and broker clearing. Fees are recognised over

the period the custody or fund management services are provided, or as and when broker services are requested.

Wealth Management

Upfront considerat

ion on bancassurance agreements

is amortised straight-line over the contractual term. Commiss

ions for

bancassurance activ

ies are recorded as they are earned through sales of third-party insurance products to customers. These

commiss

ions are rece

ived with

in a short t

ime frame of the commiss

ion be

ing earned. Target-linked fees are accrued based on

percentage of the target achieved, provided it is assessed as highly probable that the target will be met. Cash payment is

received at a contractually specif

ied date after ach

ievement of a target has been conﬁrmed.

Upfront and trail

ing comm

iss

ions for managed

investment placements are recorded as they are conﬁrmed. Income from these

activ

ies is relatively even throughout the period, and cash is usually received with

in a short t

ime frame after the commiss

ion

earned.

Retail Products

The Group recognises most income at the point in time the Group is entitled to the fee, since most services are provided at the

time of the customer’s request.

Credit card annual fees are recognised over the service period. In most of our retail markets there are circumstances under

which fees are waived, income recognit

ion

is adjusted to reﬂect customer’s intent to pay the annual fee. The Group defers the

fair value of reward points on its credit card reward programmes, and recognises income and costs associated with fulﬁll

ing the

reward at the time of redemption.

358

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

4. Net fees and commiss

ion

continued

2022

$mill

ion

2021

$mill

ion

Fees and commiss

ions

income

3,972

4,458

Of which:

Financ

ial

instruments that are not fair valued through proﬁt or loss

1,306

1,282

Trust and other ﬁduciary act

ies

520

703

Fees and commiss

ions expense

(859)

(736)

Of which:

Financ

ial

instruments that are not fair valued through proﬁt or loss

(303)

(234)

Trust and other ﬁduciary act

ies

(49)

Net fees and commiss

ion

3,113

3,722

2022

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other Items

(Segment)

$mill

ion

Total

$mill

ion

Transaction Banking

1,143

–

1,175

Trade

594

–

619

Cash Management

549

–

556

Financ

ial Markets

958

–

958

Lending & Portfolio Management

124

–

129

Princ

ipal F

inance

–

Wealth Management

–

1,127

–

1,127

Retail Products

–

582

–

594

Treasury

–

(5)

Others

–

(2)

(11)

(5)

Fees and commiss

ion

income

2,225

1,744

(16)

3,972

Fees and commiss

ion expense

(519)

(220)

(12)

(109)

(859)

Net fees and commiss

ion

1,706

1,524

(125)

3,113

2021 (Restated)¹

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other Items

(Segment)

$mill

ion

Total

$mill

ion

Transaction Banking

1,003

–

1,042

Trade

572

–

599

Cash Management

431

–

443

Financ

ial Markets

956

–

956

Lending & Portfolio Management

146

–

147

Princ

ipal F

inance

(5)

–

(5)

Wealth Management

1,585

–

1,586

Retail Products

–

614

–

617

Treasury

–

Others

–

113

Fees and commiss

ion

income

2,101

2,272

4,458

Fees and commiss

ion expense

(317)

(269)

(36)

(114)

(736)

Net fees and commiss

ion

1,784

2,003

(66)

3,722

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022

Prior periods have been restated

Fees & commiss

ion by segments was presented on a net bas

is in 2021. The presentation has been changed to gross basis for Fees & commiss

ion

income and

expense. Prior period has been restated

Following a reorganisat

ion of certa

in clients, there has been a reclassif

icat

ion of balances across products

$59 mill

ion of amort

isat

ion of cap

ital

ised acqu

ion costs on credit cards have been recorded as fee and commiss

ion expense

in 2022 as against interest income until last year. The corresponding impact for 2021 was $60 mill

ion, but the comparat

ives have

not been restated based on material

ity.

359

Standard Chartered

– Annual Report 2022

Financ

ial statements

4. Net fees and commiss

ion

continued

Upfront bancassurance considerat

ion amounts are amort

ised on a straight-line basis over the contractual period to which the

considerat

ion relates. Deferred

income on the balance sheet in respect of these activ

ies is $549 mill

ion (2021: $634 m

ill

ion).

The income will be earned evenly over the next 6.5 years (2021: 7.5 years). For the twelve months ended 31 December 2022,

$84 mill

ion of fee

income was released from deferred income (2021: $84 mill

ion).

The Group has recognised revenue of $160 mill

ion from one of

its bancassurance contracts based on conﬁrmat

ion from the

counterparty that the annual performance bonus will be paid to the Group for the year ended 31 December 2022.

5. Net trading income

Accounting policy

Gains and losses aris

ing from changes

in the fair value of ﬁnanc

ial

instruments held at fair value through proﬁt or loss are

recorded in net trading income in the period in which they arise. This includes contractual interest receivable or payable.

Income is recognised from the sale and purchase of trading posit

ions, marg

ins on market making and customer business and

fair value changes.

When the in

ial fair value of a ﬁnanc

ial

instrument held at fair value through proﬁt or loss relies on unobservable inputs, the

difference between the in

ial valuation and the transaction price is amortised to net trading income as the inputs become

observable or over the life of the instrument, whichever is shorter. Any unamortised ‘day one’ gain is released to net trading

income if the transaction is terminated.

2022

$mill

ion

2021

$mill

ion

Net trading income

5,310

3,431

Sign

iﬁcant

items with

in net trad

ing income include:

Gains on instruments held for trading

4,942

3,381

Gains on ﬁnanc

ial assets mandator

ily at fair value through proﬁt or loss

1,087

181

Losses on ﬁnancial assets des

ignated at fair value through proﬁt or loss

(6)

(8)

Losses on ﬁnancial l

iab

ies des

ignated at fair value through proﬁt or loss

(677)

(133)

Includes $365 mill

ion ga

in (2021: $339 mill

ion ga

in) from the translation of foreign currency monetary assets and liab

ies

6. Other operating income

Accounting policy

Operating lease income is recognised on a straight-line basis over the period of the lease unless another systematic basis is

more appropriate.

Div

idends on equ

ity instruments are recognised when the Group’s right to receive payment is established.

On disposal of fair value through other comprehensive income debt instruments, the cumulative gain or loss recognised in

other comprehensive income is recycled to the proﬁt or loss in other operating income.

When the Group loses control of the subsid

iary or d

isposal group, the difference between the considerat

ion rece

ived and the

carrying amount of the subsid

iary or d

isposal group is recognised as a gain or loss on sale of the business.

2022

$mill

ion

2021

$mill

ion

Other operating income includes:

Rental income from operating lease assets

421

463

Net (loss)/gain on disposal of fair value through other comprehensive income debt instruments

(207)

157

Net gain on amortised cost ﬁnanc

ial assets

Net (loss)/gain on sale of businesses

(1)

Div

idend

income

Gain on sale of aircrafts

Other

Other operating income

302

750

360

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

7. Operating expenses

Accounting policy

Short-term employee beneﬁts: salaries and social security expenses are recognised over the period in which the employees

provide the service. Variable compensation is included with

in share-based payments costs and wages and salar

ies. Further

details are disclosed in the Directors’ remuneration report (pages 184 to 205).

Pension costs: contribut

ions to deﬁned contr

ibut

ion pens

ion schemes are recognised in proﬁt or loss when payable. For

deﬁned beneﬁt plans, net interest expense, service costs and expenses are recognised in the income statement. Further

details are provided in Note 30.

Share-based compensation: the Group operates equity-settled and cash-settled share-based payment compensation

plans. The fair value of the employee services (measured by the fair value of the option granted) received in exchange for the

grant of the options is recognised as an expense. Further details are provided in Note 31.

2022

$mill

ion

2021

$mill

ion

Staff costs:

Wages and salaries

6,014

5,834

Social security costs

210

209

Other pension costs (Note 30)

390

377

Share-based payment costs (Note 31)

199

167

Other staff costs

805

1,081

7,618

7,668

Other staff costs include redundancy expenses of $79 mill

ion (2021: $328 m

ill

ion). Further costs

in this category include train

ing,

travel costs and other staff-related costs.

The following table summarises the number of employees with

in the Group:

2022

2021

Business

Support services

Total

Business

Support services

Total

At 31 December

30,619

52,647

83,266

30,614

51,343

81,957

Average for the year

31,133

51,854

82,987

31,468

51,268

82,736

The Company employed Nil staff at 31 December 2022 (2021: Nil) and it incurred costs of Nil (2021: $1 mill

ion).

Details of directors’ pay, beneﬁts, pensions and beneﬁts and interests in shares are disclosed in the Directors’ remuneration

report (pages 184 to 205).

Transactions with directors, ofﬁcers and other related parties are disclosed in Note 36.

2022

$mill

ion

2021

$mill

ion

Premises and equipment expenses

401

387

General admin

istrat

ive expenses:

UK bank levy

102

100

Provis

ion for regulatory matters

Other general admin

istrat

ive expenses

1,592

1,526

1,708

1,688

Depreciat

ion and amort

izat

ion:

Property, plant and equipment:

Premises

326

370

Equipment

123

129

Operating lease assets

202

213

651

712

Intangibles:

Software

531

461

Acquired on business combinat

ions

1,186

1,181

Total operating expenses

10,913

10,924

Operating expenses include research expenditure of $946 mill

ion (2021: $945 m

ill

ion), wh

ich was recognised as an expense in the

year.

The UK bank levy is applied on the chargeable equity and liab

ies on the balance sheet of UK operat

ions. Key exclusions from

chargeable equity and liab

ies

include Tier 1 capital, insured or guaranteed retail deposits, repos secured on certain sovereign

debt and liab

ies subject to nett

ing. The rates are 0.10 per cent for short-term liab

ies and 0.05 per cent for long-term

liab

ies.

361

Standard Chartered

– Annual Report 2022

Financ

ial statements

8. Credit impa

irment

Accounting policy

Sign

iﬁcant account

ing estimates and judgements

The Group’s expected credit loss (ECL) calculations are outputs of complex models with a number of underlying assumptions.

The sign

iﬁcant judgements

in determin

ing ECL

include:

•

The Group’s criter

ia for assess

ing if there has been a sign

iﬁcant

increase in credit risk;

•

Development of expected credit loss models, includ

ing the cho

ice of inputs relating to macroeconomic variables;

•

Evaluation of management overlays and post-model adjustments;

•

Determinat

ion of probab

ity we

ight

ings for Stage 3

ind

idually assessed provis

ions

The calculation of credit impa

irment prov

ions also

involves expert credit judgement to be applied by the credit risk

management team based upon counterparty informat

ion they rece

ive from various sources includ

ing relat

ionsh

ip managers

and on external market informat

ion. Deta

ils on the approach for determin

ing ECL can be found

in the credit risk section,

under IFRS 9 Methodology (page 236).

Estimates of forecasts of key macroeconomic variables underlying the ECL calculation can be found with

in the R

isk review,

Key assumptions and judgements in determin

ing expected cred

it loss (page 271).

Expected credit losses

ECL are determined for all ﬁnanc

ial debt

instruments that are classif

ied at amort

ised cost or fair value through other

comprehensive income, undrawn commitments and ﬁnanc

ial guarantees.

An ECL represents the present value of expected cash shortfalls over the residual term of a ﬁnanc

ial asset, undrawn

commitment or ﬁnanc

ial guarantee.

A cash shortfall is the difference between the cash ﬂows that are due in accordance with the contractual terms of the

instrument and the cash ﬂows that the Group expects to receive over the contractual life of the instrument.

Measurement

ECL are computed as unbiased, probabil

ity-we

ighted amounts which are determined by evaluating a range of reasonably

possible outcomes, the time value of money, and consider

ing all reasonable and supportable

informat

ion

includ

ing that

which is forward-looking.

For material portfolios, the estimate of expected cash shortfalls is determined by multiply

ing the probab

ity of default (PD)

with the loss given default (LGD) with the expected exposure at the time of default (EAD). There may be multiple default

events over the lifet

ime of an

instrument. Further details on the components of PD, LGD and EAD are disclosed in the Credit

risk section. For less material Retail Banking loan portfolios, the Group has adopted less sophist

icated approaches based on

histor

ical roll rates or loss rates.

Forward-looking economic assumptions are incorporated into the PD, LGD and EAD where relevant and where they

inﬂuence credit risk, such as GDP growth rates, interest rates, house price ind

ices and commod

ity prices among others. These

assumptions are incorporated using the Group’s most likely forecast for a range of macroeconomic assumptions. These

forecasts are determined using all reasonable and supportable informat

ion, wh

ich includes both internally developed

forecasts and those available externally, and are consistent with those used for budgeting, forecasting and capital planning.

To account for the potential non-linear

ity

in credit losses, multiple forward-looking scenarios are incorporated into the range

of reasonably possible outcomes for all material portfolios. For example, where there is a greater risk of downside credit

losses than upside gains, multiple forward-looking economic scenarios are incorporated into the range of reasonably

possible outcomes, both in respect of determin

ing the PD (and where relevant, the LGD and EAD) and

in determin

ing the

overall ECL amounts. These scenarios are determined using a Monte Carlo approach centred around the Group’s most likely

forecast of macroeconomic assumptions.

The period over which cash shortfalls are determined is generally lim

ited to the max

imum contractual period for which the

Group is exposed to credit risk. However, for certain revolving credit facil

ies, which include credit cards or overdrafts, the

Group’s exposure to credit risk is not lim

ited to the contractual per

iod. For these instruments, the Group estimates an

appropriate life based on the period that the Group is exposed to credit risk, which includes the effect of credit risk

management actions such as the withdrawal of undrawn facil

ies.

For credit-impa

ired ﬁnancial

instruments, the estimate of cash shortfalls may require the use of expert credit judgement.

362

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

8. Credit impa

irment

continued

The estimate of expected cash shortfalls on a collateralised ﬁnanc

ial

instrument reﬂects the amount and tim

ing of cash

ﬂows that are expected from foreclosure on the collateral less the costs of obtain

ing and sell

ing the collateral, regardless of

whether foreclosure is deemed probable.

Cash ﬂows from unfunded credit enhancements held are included with

in the measurement of expected cred

it losses if they

are part of, or integral to, the contractual terms of the instrument (this includes ﬁnanc

ial guarantees, unfunded r

isk

partic

ipat

ions and other non-derivat

ive cred

it insurance). Although non-integral credit enhancements do not impact the

measurement of expected credit losses, a reimbursement asset is recognised to the extent of the ECL recorded.

Cash shortfalls are discounted using the effective interest rate (or credit-adjusted effective interest rate for purchased or

orig

inated cred

it-impa

ired

instruments (POCI)) on the ﬁnanc

ial

instrument as calculated at in

ial recognit

ion or

if the

instrument has a variable interest rate, the current effective interest rate determined under the contract.

Instruments

Location of expected credit loss provis

ions

Financ

ial assets held at amort

ised cost

Loss provis

ions: netted aga

inst gross carrying value¹

Financ

ial assets held FVOCI – Debt

instruments

Other comprehensive income (FVOCI expected credit loss reserve)

Loan commitments

Provis

ions for l

iab

ies and charges

Financ

ial guarantees

Provis

ions for l

iab

ies and charges

Purchased or orig

inated cred

it-impa

ired assets do not attract an expected cred

it loss provis

ion on

ial recognit

ion. An expected cred

it loss provis

ion w

ill be

recognised only if there is an increase in expected credit losses from that considered at in

ial recognit

ion

Debt and treasury securit

ies class

ied as fa

ir value through other comprehensive income (FVOCI) are held at fair value on the face of the balance sheet. The

expected credit loss attributed to these instruments is held as a separate reserve with

in other comprehens

ive income (OCI) and is recycled to the proﬁt and

loss account along with any fair value measurement gains or losses held with

in FVOCI when the appl

icable instruments are derecognised

Expected credit loss on loan commitments and ﬁnanc

ial guarantees

is recognised as a liab

ity provis

ion. Where a ﬁnancial

instrument includes both a loan

(i.e. ﬁnanc

ial asset component) and an undrawn comm

itment (i.e. loan commitment component), and it is not possible to separately ident

ify the expected

credit loss on these components, expected credit loss amounts on the loan commitment are recognised together with expected credit loss amounts on the

ﬁnancial asset. To the extent the comb

ined expected credit loss exceeds the gross carrying amount of the ﬁnanc

ial asset, the expected cred

it loss is

recognised as a liab

ity provis

ion

Recognit

ion

12 months expected credit losses (stage 1)

Expected credit losses are recognised at the time of in

ial recognit

ion of a ﬁnancial

instrument and represent the lifet

ime cash shortfalls ar

ing from poss

ible default events up to 12 months into the future from

the balance sheet date. Expected credit losses continue to be determined on this basis until there is either a sign

iﬁcant

increase in the credit risk of an instrument or the instrument becomes credit-impa

ired. If an

instrument is no longer

considered to exhib

it a s

ign

iﬁcant

increase in credit risk, expected credit losses will revert to being determined on a 12-month

basis.

Sign

iﬁcant

increase in credit risk (Stage 2)

If a ﬁnancial asset exper

iences a sign

iﬁcant

increase in credit risk (SICR) since in

ial

recognit

ion, an expected cred

it loss provis

ion

is recognised for default events that may occur over the lifet

ime of the asset.

Sign

iﬁcant

increase in credit risk is assessed by comparing the risk of default of an exposure at the reporting date to the risk

of default at orig

inat

ion (after taking into account the passage of time). Sign

iﬁcant does not mean stat

ist

ically s

ign

iﬁcant nor

is it assessed in the context of changes in expected credit loss. Whether a change in the risk of default is sign

iﬁcant or not

assessed using a number of quantitat

ive and qual

itat

ive factors, the we

ight of which depends on the type of product and

counterparty. Financ

ial assets that are 30 or more days past due and not cred

it-impa

ired w

ill always be considered to have

experienced a sign

iﬁcant

increase in credit risk. For less material portfolios where a loss rate or roll rate approach is applied to

compute expected credit loss, sign

iﬁcant

increase in credit risk is primar

ily based on 30 days past due.

Quantitat

ive factors

include an assessment of whether there has been sign

iﬁcant

increase in the forward-looking probabil

ity

of default (PD) since orig

inat

ion. A forward-looking PD is one that is adjusted for future economic condit

ions to the extent

these are correlated to changes in credit risk. We compare the residual lifet

ime PD at the balance sheet date to the res

idual

lifet

ime PD that was expected at the t

ime of orig

inat

ion for the same point in the term structure and determine whether both

the absolute and relative change between the two exceeds predetermined thresholds. To the extent that the differences

between the measures of default outlined exceed the deﬁned thresholds, the instrument is considered to have experienced

a sign

iﬁcant

increase in credit risk.

Qualitat

ive factors assessed

include those linked to current credit risk management processes, such as lending placed on

non-purely precautionary early alert (and subject to closer monitor

ing).

A non-purely precautionary early alert account is one which exhib

its r

isk or potential weaknesses of a material nature

requir

ing closer mon

itor

ing, superv

ion, or attent

ion by management. Weaknesses in such a borrower’s account, if left

uncorrected, could result in deteriorat

ion of repayment prospects and the l

ikel

ihood of be

ing downgraded. Indicators could

include a rapid erosion of posit

ion w

ith

in the

industry, concerns over management’s abil

ity to manage operat

ions, weak/

deteriorat

ing operat

ing results, liqu

ity strain and overdue balances among other factors.

363

Standard Chartered

– Annual Report 2022

Financ

ial statements

8. Credit impa

irment

continued

Credit-impa

ired (or defaulted) exposures (Stage 3)

Financ

ial assets that are cred

it-impa

ired (or

in default) represent those that

are at least 90 days past due in respect of princ

ipal and/or

interest. Financ

ial assets are also cons

idered to be credit-impa

ired

where the obligors are unlikely to pay on the occurrence of one or more observable events that have a detrimental impact on

the estimated future cash ﬂows of the ﬁnanc

ial asset. It may not be poss

ible to ident

ify a s

ingle discrete event but instead

the combined effect of several events may cause ﬁnanc

ial assets to become cred

it-impa

ired.

•

Evidence that a ﬁnanc

ial asset

is credit-impa

ired

includes observable data about the following events:

•

Sign

iﬁcant ﬁnancial d

iff

iculty of the

issuer or borrower;

•

Breach of contract such as default or a past due event;

•

For economic or contractual reasons relating to the borrower’s ﬁnanc

ial d

iff

iculty, the lenders of the borrower have granted

the borrower concession/s that lenders would not otherwise consider. This would include forbearance actions (page 256);

•

Pending or actual bankruptcy or other ﬁnanc

ial reorgan

isat

ion to avo

id or delay discharge of the borrower’s obligat

ion/s;

•

The disappearance of an active market for the applicable ﬁnanc

ial asset due to ﬁnancial d

iff

icult

ies of the borrower;

•

Purchase or orig

inat

ion of a ﬁnanc

ial asset at a deep d

iscount that reﬂects incurred credit losses

Lending commitments to a credit-impa

ired obl

igor that have not yet been drawn down are included to the extent that the

commitment cannot be withdrawn. Loss provis

ions aga

inst credit-impa

ired ﬁnancial assets are determ

ined based on an

assessment of the recoverable cash ﬂows under a range of scenarios, includ

ing the real

isat

ion of any collateral held where

appropriate. The loss provis

ions held represent the d

ifference between the present value of the expected cash ﬂows,

discounted at the instrument’s orig

inal effect

ive interest rate, and the gross carrying value (includ

ing contractual

interest due

but not paid) of the instrument prior to any credit impa

irment. The Group’s deﬁnit

ion of default is aligned with the regulatory

deﬁnit

ion of default as set out in the UK’s onshored capital requirements regulations (Art 178).

Expert credit judgement

For Corporate & Institut

ional, Commerc

ial and Private Banking, borrowers are graded by credit risk management on a credit

grading (CG) scale from CG1 to CG14. Once a borrower starts to exhib

it cred

it deteriorat

ion,

it will move along the credit

grading scale in the performing book and when it is classif

ied as CG12 the cred

it assessment and oversight of the loan will

continue to be managed by the business with support from the Stressed Assets Group for certain accounts.

Borrowers graded CG12 exhib

it well-deﬁned weaknesses

in areas such as management and/or performance but there is no

current expectation of a loss of princ

ipal or

interest. Where the impa

irment assessment

ind

icates that there w

ill be a loss of

princ

ipal on a loan, the borrower

is graded a CG14 while borrowers of other credit-impa

ired loans are graded CG13.

Instruments graded CG13 or CG14 are regarded as stage 3.

For ind

idually sign

iﬁcant ﬁnancial assets w

ith

in stage 3, Stressed Asset R

isk (SAR) will consider all judgements that have an

impact on the expected future cash ﬂows of the asset. These include: the business prospects, industry and geo polit

ical

climate of the customer, quality of realisable value of collateral, the Group’s legal posit

ion relat

ive to other claimants and any

renegotiat

ion/ forbearance/ mod

icat

ion options. The future cash ﬂow calculation involves sign

iﬁcant judgements and

estimates. As new informat

ion becomes ava

ilable and further negotiat

ions/ forbearance measures are taken the est

imates

of the future cash ﬂows will be revised, and will have an impact on the future cash ﬂow analysis.

For ﬁnancial assets wh

ich are not ind

idually sign

iﬁcant, such as the Consumer Bank

ing portfolio or small business loans,

which comprise a large number of homogeneous loans that share sim

ilar character

ist

ics, stat

ist

ical est

imates and

techniques are used, as well as credit scoring analysis.

Consumer and Business Banking clients are considered credit-impa

ired where they are more 90 days past due, or

if the

borrower ﬁles for bankruptcy or other forbearance programme, the borrower is deceased or the business is closed in the case

of a small business, or if the borrower surrenders the collateral, or there is an ident

iﬁed fraud on the account. Add

ionally,

the account is unsecured and the borrower has other credit accounts with the Group that are considered credit-impa

ired, the

account may be also be credit-impa

ired.

Techniques used to compute impa

irment amounts use models wh

ich analyse histor

ical repayment and default rates over a

time horizon. Where various models are used, judgement is required to analyse the available informat

ion prov

ided and

select the appropriate model or combinat

ion of models to use.

Expert credit judgement is also applied to determine whether any post-model adjustments are required for credit risk

elements which are not captured by the models.

Modif

ied ﬁnancial

instruments

Where the orig

inal contractual terms of a ﬁnancial asset have been mod

ied for cred

it reasons and the instrument has not

been derecognised (an instrument is derecognised when a modif

icat

ion results in a change in cash ﬂows that the Group

would consider substantial), the resulting modif

icat

ion loss is recognised with

in cred

it impa

irment

in the income statement

with a corresponding decrease in the gross carrying value of the asset. If the modif

icat

ion involved a concession that the

bank would not otherwise consider, the instrument is considered to be credit-impa

ired and

is considered forborne.

364

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

8. Credit impa

irment

continued

Expected credit loss for modif

ied ﬁnancial assets that have not been derecogn

ised and are not considered to be credit-

impa

ired w

ill be recognised on a 12-month basis, or a lifet

ime bas

is, if there is a sign

iﬁcant

increase in credit risk. These assets

are assessed (by comparison to the orig

inat

ion date) to determine whether there has been a sign

iﬁcant

increase in credit risk

subsequent to the modif

icat

ion. Although loans may be modif

ied for non-cred

it reasons, a sign

iﬁcant

increase in credit risk

may occur. In addit

ion to the recogn

ion of mod

icat

ion gains and losses, the revised carrying value of modif

ied ﬁnancial

assets will impact the calculation of expected credit losses, with any increase or decrease in expected credit loss recognised

with

impa

irment.

Forborne loans

Forborne loans are those loans that have been modif

ied

in response to a customer’s ﬁnanc

ial d

iff

icult

ies. Forbearance

strategies assist clients who are temporarily in ﬁnanc

ial d

istress and are unable to meet their orig

inal contractual repayment

terms. Forbearance can be in

iated by the client, the Group or a third-party includ

ing government sponsored programmes

or a conglomerate of credit inst

itut

ions. Forbearance may include debt restructuring such as new repayment schedules,

payment deferrals, tenor extensions, interest only payments, lower interest rates, forgiveness of princ

ipal,

interest or fees, or

relaxation of loan covenants.

Forborne loans that have been modif

ied (and not derecogn

ised) on terms that are not consistent with those readily

available in the market and/or where we have granted a concession compared to the orig

inal terms of the loans are

considered credit-impa

ired

if there is a detrimental impact on cash ﬂows. The modif

icat

ion loss (see Classif

icat

ion and

measurement – Modif

icat

ions) is recognised in the proﬁt or loss with

in cred

it impa

irment and the gross carry

ing value of the

loan reduced by the same amount. The modif

ied loan

is disclosed as ‘Loans subject to forbearance – credit-impa

ired’.

Loans that have been subject to a forbearance modif

icat

ion, but which are not considered credit-impa

ired (not class

ied as

CG13 or CG14), are disclosed as ‘Forborne – not credit-impa

ired’. Th

is may include amendments to covenants with

in the

contractual terms.

Write-offs of credit-impa

ired

instruments and reversal of impa

irment

To the extent a ﬁnancial debt

instrument is considered irrecoverable, the applicable portion of the gross carrying value is

written off against the related loan provis

ion. Such loans are wr

itten off after all the necessary procedures have been

completed, it is decided that there is no realist

ic probab

ity of recovery and the amount of the loss has been determ

ined.

Subsequent recoveries of amounts previously written off decrease the amount of the provis

ion for cred

it impa

irment

in the

income statement.

Loss provis

ions on purchased or or

inated cred

it-impa

ired

instruments (POCI)

The Group measures expected credit loss on a lifet

ime bas

is for POCI instruments throughout the life of the instrument.

However, expected credit loss is not recognised in a separate loss provis

ion on

ial recognit

ion for POCI

instruments as the

lifet

ime expected cred

it loss is inherent with

in the gross carry

ing amount of the instruments. The Group recognises the

change in lifet

ime expected cred

it losses aris

ing subsequent to

ial recognit

ion

in the income statement and the

cumulative change as a loss provis

ion. Where l

ifet

ime expected cred

it losses on POCI instruments are less than those at in

ial

recognit

ion, then the favourable d

ifferences are recognised as impa

irment ga

ins in the income statement (and as

impa

irment loss where the expected cred

it losses are greater).

Improvement in credit risk/curing

A period may elapse from the point at which instruments enter lifet

ime expected cred

it losses (stage 2 or stage 3) and are

reclassif

ied back to 12-month expected cred

it losses (stage 1). For ﬁnanc

ial assets that are cred

it-impa

ired (stage 3), a

transfer to stage 2 or stage 1 is only permitted where the instrument is no longer considered to be credit-impa

ired. An

instrument will no longer be considered credit-impa

ired when there

is no shortfall of cash ﬂows compared to the orig

inal

contractual terms.

For ﬁnancial assets w

ith

in stage 2, these can only be transferred to stage 1 when they are no longer cons

idered to have

experienced a sign

iﬁcant

increase in credit risk.

Where sign

iﬁcant

increase in credit risk was determined using quantitat

ive measures, the

instruments will automatically

transfer back to stage 1 when the orig

inal PD based transfer cr

iter

ia are no longer met. Where

instruments were transferred

to stage 2 due to an assessment of qualitat

ive factors, the

issues that led to the reclassif

icat

ion must be cured before the

instruments can be reclassif

ied to stage 1. Th

is includes instances where management actions led to instruments being

classif

ied as stage 2, requ

ing that act

ion to be resolved before loans are reclassif

ied to stage 1.

A forborne loan can only be removed from being disclosed as forborne if the loan is performing (stage 1 or 2) and a further

two-year probation period is met.

In order for a forborne loan to become performing, the following criter

ia have to be sat

isf

ied:

•

At least a year has passed with no default based upon the forborne contract terms

•

The customer is likely to repay its obligat

ions

in full without realis

ing secur

ity

•

The customer has no accumulated impa

irment aga

inst amount outstanding (except for ECL)

Subsequent to the criter

ia above, a further two-year probat

ion period has to be fulﬁlled, whereby regular payments are

made by the customer and none of the exposures to the customer are more than 30 days past due.

365

Standard Chartered

– Annual Report 2022

Financ

ial statements

8. Credit impa

irment

continued

2022

$mill

ion

2021

$mill

ion

Net credit impa

irment on loans and advances to banks and customers

743

258

Net credit impa

irment on debt secur

ies¹

122

Net credit impa

irment relat

ing to ﬁnanc

ial guarantees and loan comm

itments

(27)

(30)

Net credit impa

irment relat

ing to other ﬁnanc

ial assets

(2)

–

Credit impa

irment

836

254

Includes impa

irment of $13 m

ill

ion (2021: N

il) on orig

inated cred

it-impa

ired debt secur

ies

9. Goodwill, ﬁxed asset, and other impa

irment

Accounting policy

Refer to the below referenced notes for the relevant accounting policy.

2022

$mill

ion

2021

$mill

ion

Impairment of goodwill (Note 17)

–

Impairment of property, plant and equipment (Note 18)

106

Impairment of other intang

ible assets (Note 17)

Other

363

262

Property, plant and equipment and other impa

irment

425

372

Goodwill, property, plant and equipment and other impa

irment

439

372

Other includes a $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai) to reﬂect the challenges and

uncertainty in the outlook for the banking industry and property markets in China ($300 mill

ion

in 2021)

10. Taxation

Accounting policy

Income tax payable on proﬁts is based on the applicable tax law in each jur

isd

ict

ion and

is recognised as an expense in the

period in which proﬁts arise.

Deferred tax is provided on temporary differences aris

ing between the tax bases of assets and l

iab

ies and the

ir carrying

amounts in the consolidated ﬁnanc

ial statements. Deferred tax

is determined using tax rates (and laws) that have been

enacted or substantively enacted as at the balance sheet date, and that are expected to apply when the related deferred

tax asset is realised or the deferred income tax liab

ity is settled.

Deferred tax assets are recognised where it is probable that future taxable proﬁt will be available against which the

temporary differences can be util

ised. Where perm

itted, deferred tax assets and liab

ies are offset on an ent

ity basis and

not by component of deferred taxation.

Current and deferred tax relating to items which are charged or credited directly to equity, is credited or charged directly to

equity and is subsequently recognised in the income statement together with the current or deferred gain or loss.

Other accounting estimates and judgements

•

Determin

ing the Group’s tax charge for the year

involves estimat

ion and judgement, wh

ich includes an interpretat

ion of

local tax laws and an assessment of whether the tax authorit

ies w

ill accept the posit

ion taken. These judgements take

account of external advice where appropriate, and the Group’s view on settling with the relevant tax authorit

ies

•

The Group provides for current tax liab

ies at the best est

imate of the amount that is expected to be paid to the tax

authorit

ies where an outﬂow

is probable. In making its estimates the Group assumes that the tax authorit

ies w

ill examine

all the amounts reported to them and have full knowledge of all relevant informat

ion

•

The recoverabil

ity of the Group’s deferred tax assets

is based on management’s judgement of the availab

ity of future

taxable proﬁts against which the deferred tax assets will be util

ised. In prepar

ing management forecasts the effect of

applicable laws and regulations relevant to the util

isat

ion of future taxable proﬁts have been considered.

366

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

10. Taxation

continued

The following table provides analysis of taxation charge in the year:

2022

$mill

ion

2021

$mill

ion

The charge for taxation based upon the proﬁt for the year comprises:

Current tax:

United Kingdom corporation tax at 19 per cent (2021: 19 per cent):

Current tax charge on income for the year

–

Adjustments in respect of prior years (includ

ing double tax rel

ief)

–

Foreign tax:

Current tax charge on income for the year

1,216

896

Adjustments in respect of prior years

(26)

1,269

879

Deferred tax:

Orig

inat

ion/reversal of temporary differences

144

218

Adjustments in respect of prior years

(29)

(63)

115

155

Tax on proﬁts on ordinary activ

ies

1,384

1,034

Effective tax rate

32.3%

30.9%

The tax charge for the year $1,384 mill

ion (31 December 2021: $1,034 m

ill

ion) on a proﬁt before tax of $4,286 m

ill

ion (31 December

2021: $3,347 mill

ion) reﬂects the

impact of countries with tax rates higher or lower than the UK, the most sign

iﬁcant of wh

ich is

India, non-deductible expenses and non-creditable withhold

ing taxes.

Foreign tax includes current tax of $35 mill

ion (31 December 2021: $78 m

ill

ion) on the proﬁts assessable

in Hong Kong. Deferred

tax includes orig

inat

ion or reversal of temporary differences of $51 mill

ion (31 December 2021: $39 m

ill

ion) prov

ided at a rate of

16.5 per cent (31 December 2021: 16.5 per cent) on the proﬁts assessable in Hong Kong.

The Organisat

ion for Econom

ic Co-operation and Development/G20 Inclusive Framework on Base Erosion and Proﬁt Shift

ing

seeks to address the tax challenges aris

ing from the d

ital

isat

ion of the global economy. P

illar Two of the Global anti-Base

Erosion rules represents the ﬁrst substantial overhaul of internat

ional tax rules

in almost a century. It proposes four new taxing

mechanisms under which multi-national enterprises would pay a min

imum level of tax. An

income inclus

ion rule, an under-taxed

payment rule and a qualif

ied domest

ic min

imum top up tax together generally propose a m

imum tax of 15% on

income

aris

ing

in each jur

isd

ict

ion

in which the multi-national enterprise operates. A subject to tax rule that is treaty-based generally

proposes a min

imum tax on certa

in cross-border intercompany transactions. Enactment is currently expected to occur with

effect from 1 January 2024. The Group is closely monitor

ing developments to assess potent

ial future impl

icat

ions and

implementat

ion efforts.

Tax rate:

The tax charge for the year is higher than the charge at the rate of corporation tax in the UK, 19 per cent. The

differences are explained below:

2022

2021

$mill

ion

$mill

ion

Proﬁt on ordinary activ

ies before tax

4,286

3,347

Tax at 19 per cent (2021: 19 per cent)

814

19.0

636

19.0

Lower tax rates on overseas earnings

(122)

(2.8)

(93)

(2.8)

Higher tax rates on overseas earnings

435

10.1

366

10.9

Tax at domestic rates applicable where proﬁts earned

1,127

26.3

909

27.1

Non-creditable withhold

ing taxes

2.1

120

3.6

Tax exempt income

(69)

(1.6)

(85)

(2.5)

Share of associates and jo

int ventures

(27)

(0.6)

(33)

(1.0)

Non-deductible expenses

115

2.7

167

5.0

Regulatory ﬁne

–

0.4

Bank levy

0.4

0.6

Non-taxable losses on investments

1.2

1.5

Payments on ﬁnancial

instruments in reserves

(56)

(1.3)

(62)

(1.9)

Goodwill impa

irment

0.1

–

Deferred tax not recognised

1.8

1.6

Deferred tax assets written-off

–

Deferred tax rate changes

(9)

(0.2)

–

Adjustments to tax charge in respect of prior years

(24)

(0.6)

(80)

(2.4)

Other items

2.0

(38)

(1.1)

Tax on proﬁt on ordinary activ

ies

1,384

32.3

1,034

30.9

The 2021 comparatives have been reclassif

ied as follows to al

ign with presentation in the current period: Non-taxable losses on investments from $nil to $50m,

Non-deductible expenses from $217m to $167m

367

Standard Chartered

– Annual Report 2022

Financ

ial statements

10. Taxation

continued

Factors affecting the tax charge in future years: the Group’s tax charge, and effective tax rate in future years could be affected

by several factors includ

ing acqu

ions, disposals and restructuring of our businesses, the mix of proﬁts across jur

isd

ict

ions w

ith

different statutory tax rates, changes in tax legislat

ion and tax rates and resolut

ion of uncertain tax posit

ions.

The evaluation of uncertain tax posit

ions

involves an interpretat

ion of local tax laws wh

ich could be subject to challenge by a

tax authority, and an assessment of whether the tax authorit

ies w

ill accept the posit

ion taken. The Group does not currently

consider that assumptions or judgements made in assessing tax liab

ies have a s

ign

iﬁcant r

isk of resulting in a material

adjustment with

in the next ﬁnancial year.

Tax recognised in other

comprehensive income

2022

2021

Current tax

$mill

ion

Deferred tax

$mill

ion

Total

$mill

ion

Current tax

$mill

ion

Deferred tax

$mill

ion

Total

$mill

ion

Items that will not be reclassif

ied to

income statement

–

(82)

Own credit adjustment

–

(6)

Equity instruments at fair value through

other comprehensive income

–

(59)

Retirement beneﬁt obligat

ions

–

(20)

–

(17)

Items that may be reclassed

subsequently to income statement

–

152

–

Debt instruments at fair value through

other comprehensive income

–

Cash ﬂow hedges

–

(2)

Total tax credit/(charge) recognised

in equity

–

167

–

(8)

Current tax:

The following are the movements in current tax during the year:

Current tax comprises:

2022

$mill

ion

2021

$mill

ion

Current tax assets

766

808

Current tax liab

ies

(348)

(660)

Net current tax opening balance

418

148

Movements in income statement

(1,269)

(879)

Movements in other comprehensive income

–

Taxes paid

821

1,161

Other movements

(50)

(12)

Net current tax balance as at 31 December

(80)

418

Current tax assets

503

766

Current tax liab

ies

(583)

(348)

Total

(80)

418

Deferred tax:

The following are the major deferred tax liab

ies and assets recogn

ised by the Group and movements thereon

during the year:

1 January 2022

$mill

ion

Exchange

& other

adjustments

$mill

ion

(Charge)/credit

to proﬁt

$mill

ion

(Charge)/credit

to equity

$mill

ion

31 December 2022

$mill

ion

Deferred tax comprises:

Accelerated tax depreciat

ion

(515)

(8)

(66)

–

(589)

Impairment provis

ions on loans and advances

351

(41)

–

334

Tax losses carried forward

263

(67)

–

212

Fair value through other comprehensive

income

(126)

(1)

(13)

Cash ﬂow hedges

–

Own credit adjustment

(3)

–

Retirement beneﬁt obligat

ions

(5)

–

(20)

Share-based payments

–

Other temporary differences

(7)

(34)

–

(11)

Net deferred tax assets

(46)

(115)

167

368

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

10. Taxation

continued

1 January

2021

$mill

ion

Exchange

& other

adjustments

$mill

ion

(Charge)/credit

to proﬁt

$mill

ion

(Charge)/credit

to equity

$mill

ion

31 December

2021

$mill

ion

Deferred tax comprises:

Accelerated tax depreciat

ion

(493)

(26)

–

(515)

Impairment provis

ions on loans and advances

419

(80)

–

351

Tax losses carried forward

282

(3)

(16)

–

263

Fair value through other comprehensive income

(146)

(2)

(126)

Cash ﬂow hedges

–

(2)

–

Own credit adjustment

–

(6)

(3)

Retirement beneﬁt obligat

ions

(5)

(17)

Share-based payments

–

Other temporary differences

(33)

(35)

–

Net deferred tax assets

224

(2)

(155)

(8)

Deferred tax comprises assets and liab

ies as follows:

2022

2021

Total

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Total

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Deferred tax comprises:

Accelerated tax depreciat

ion

(589)

(590)

(515)

(533)

Impairment provis

ions on loans and

advances

334

339

(5)

351

389

(38)

Tax losses carried forward

212

122

263

172

Fair value through other comprehensive

income

(13)

(58)

(126)

(22)

(104)

Cash ﬂow hedges

–

(3)

Own credit adjustment

(1)

(3)

(1)

(2)

Retirement beneﬁt obligat

ions

(13)

Share-based payments

–

Other temporary differences

(11)

255

(266)

290

(260)

834

(769)

859

(800)

At 31 December 2022, the Group has net deferred tax assets of $65 mill

ion (31 December 2021: $59 m

ill

ion). The recoverab

ity of

the Group’s deferred tax assets is based on management’s judgement of the availab

ity of future taxable proﬁts against which

the deferred tax assets will be util

ised.

Of the Group’s total deferred tax assets, $212 mill

ion relates to tax losses carr

ied forward. These tax losses have arisen in

ind

idual legal entit

ies and w

ill be offset as future taxable proﬁts arise in those entit

ies.

•

$113 mill

ion of the deferred tax assets relat

ing to losses has arisen in Ireland, where there is no expiry date for unused tax

losses. These losses relate to aircraft leasing and are expected to be fully util

ised over the useful econom

ical life of the assets

being up to 18 years.

•

$51 mill

ion of the deferred tax assets relat

ing to losses has arisen in the US. Management forecasts show that the losses are

expected to be fully util

ised over a per

iod of two years.

The remain

ing deferred tax assets of $48 m

ill

ion relat

ing to losses have arisen in other jur

isd

ict

ions and are expected to be

recovered in less than 10 years.

Unrecognised deferred tax

Net

2022

$mill

ion

Gross

2022

$mill

ion

Net

2021

$mill

ion

Gross

2021

$mill

ion

No account has been taken of the following potential deferred tax

assets/(liab

ies):

Withhold

ing tax on unrem

itted earnings from overseas subsid

iar

ies

and associates

(507)

(6,434)

(426)

(5,544)

Tax losses

1,980

8,231

2,104

8,292

Held over gains on incorporation of overseas branches

(346)

(1,313)

(422)

(1,476)

Other temporary differences

544

1,991

208

790

369

Standard Chartered

– Annual Report 2022

Financ

ial statements

11. Div

idends

Accounting policy

Div

idends on ord

inary shares and preference shares classif

ied as equ

ity are recognised in equity in the year in which they are

declared. Div

idends on ord

inary equity shares are recorded in the year in which they are declared and, in respect of the ﬁnal

div

idend, have been approved by the shareholders.

The Board considers a number of factors prior to div

idend declarat

ion which includes the rate of recovery in the Group’s

ﬁnancial performance, the macroeconom

ic environment, and opportunit

ies to further

invest in our business and grow proﬁtably

in our markets.

Ordinary equity shares

2022

2021

Cents per share

$mill

ion

Cents per share

$mill

ion

2021/2020 ﬁnal div

idend declared and pa

id during the year

274

282

2022/2021 inter

im d

idend declared and pa

id during the year

119

Div

idends on ord

inary equity shares are recorded in the period in which they are declared and, in respect of the ﬁnal div

idend,

have been approved by the shareholders. Accordingly, the ﬁnal ordinary equity share div

idends set out above relate to the

respective prior years.

2022 recommended ﬁnal ordinary equity share div

idend

The 2022 ordinary equity share div

idend recommended by the Board

is 14 cents per share. The ﬁnanc

ial statements for the year

ended 31 December 2022 do not reﬂect this div

idend as th

is will be accounted for in shareholders’ equity as an appropriat

ion of

retained proﬁts in the year ending 31 December 2023.

The div

idend w

ill be paid in either pounds sterling, Hong Kong dollars or US dollars on 11 May 2023 to shareholders on the UK

Preference shares and Addit

ional T

ier 1 securit

ies

Div

idends on these preference shares and secur

ies class

ied as equ

ity are recorded in the period in which they are declared.

2022

$mill

ion

2021

$mill

ion

Non-cumulative redeemable preference shares:

7.014 per cent preference shares of $5 each

6.409 per cent preference shares of $5 each

Addit

ional T

ier 1 securit

ies: ﬁxed rate resett

ing perpetual subordinated contingent convertible securit

ies

328

344

401

410

370

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

12. Earnings per ordinary share

Accounting policy

Basic earnings per ordinary share is calculated by div

ing the proﬁt attributable to ordinary shareholders by the weighted

average number of ordinary shares outstanding, excluding own shares held. Diluted earnings per ordinary share is calculated

by div

ing the basic earnings, which require no adjustment for the effects of dilut

ive potent

ial ordinary shares, by the

weighted average number of ordinary shares that would have been outstanding assuming the conversion of all dilut

ive

potential ordinary shares, excluding own shares held.

The Group also measures earnings per share on an underlying basis. This differs from earnings deﬁned in IAS 33 Earnings per

share. Underlying earnings is proﬁt/(loss) attributable to ordinary shareholders adjusted for proﬁts or losses of a capital

nature; amounts consequent to investment transactions driven by strategic intent; and other infrequent and/or exceptional

transactions that are sign

iﬁcant or mater

ial in the context of the Group’s normal business earnings for the year.

The table below provides the basis of underlying earnings.

2022

$mill

ion

2021

(Restated)¹

$mill

ion

Proﬁt for the period attributable to equity holders

2,902

2,313

Non-controlling interest

Div

idend payable on preference shares and AT1 class

ied as equ

ity

(401)

(410)

Proﬁt for the period attributable to ordinary shareholders

2,547

1,905

Items normalised:

Provis

ion for regulatory matters

–

Restructuring

174

507

Goodwill and other impa

irment (Note 9)

322

300

Net gain on sale of businesses (Note 6)

(20)

Tax on normalised items²

(24)

(87)

Underlying proﬁt

2,999

2,667

Basic – Weighted average number of shares (mill

ions)

2,966

3,108

Diluted – Weighted average number of shares (mill

ions)

3,023

3,154

Basic earnings per ordinary share (cents)

85.9

61.3

Diluted earnings per ordinary share (cents)

84.3

60.4

Underlying basic earnings per ordinary share (cents)

101.1

85.8

Underlying diluted earnings per ordinary share (cents)

99.2

84.6

Other Impairment includes $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021 comparative

has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt which has resulted in the restatement

of Underlying basic earnings per ordinary share (cents) and Underlying diluted earnings per ordinary share (cents)

No tax is included in respect of Goodwill and other impa

irment as no tax rel

ief is available

371

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

Classif

icat

ion and measurement

Accounting policy

The Group classif

ies

its ﬁnanc

ial assets

into the following measurement categories: amortised cost; fair value through other

comprehensive income (FVOCI); and fair value through proﬁt or loss. Financ

ial l

iab

ies are class

ied as e

ither amortised

cost, or held at fair value through proﬁt or loss. Management determines the classif

icat

ion of its ﬁnanc

ial assets and l

iab

ies

at in

ial recognit

ion of the

instrument or, where applicable, at the time of reclassif

icat

ion.

Financ

ial assets held at amort

ised cost and fair value through other comprehensive income

Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash ﬂows that are solely

payments of princ

ipal and

interest (SPPI) characterist

ics. Pr

inc

ipal

is the fair value of the ﬁnanc

ial asset at

ial recognit

ion

but this may change over the life of the instrument as amounts are repaid. Interest consists of considerat

ion for the t

ime

value of money, for the credit risk associated with the princ

ipal amount outstand

ing during a particular period and for other

basic lending risks and costs, as well as a proﬁt margin.

In assessing whether the contractual cash ﬂows have SPPI characterist

ics, the Group cons

iders the contractual terms of the

instrument. This includes assessing whether the ﬁnanc

ial asset conta

ins a contractual term that could change the tim

ing or

amount of contractual cash ﬂows such that it would not meet this condit

ion. In mak

ing the assessment, the Group considers:

•

Contingent events that would change the amount and tim

ing of cash ﬂows

• Leverage features

•

Prepayment and extension terms

•

Terms that lim

it the Group’s cla

im to cash ﬂows from specif

ied assets (e.g. non-recourse asset arrangements);

•

Features that modify considerat

ion of the t

ime value of money – e.g. period

ical reset of

interest rates

Whether ﬁnancial assets are held at amort

ised cost or at FVOCI depends on the object

ives of the bus

iness models under

which the assets are held. A business model refers to how the Group manages ﬁnanc

ial assets to generate cash ﬂows.

The Group makes an assessment of the objective of a bus

iness model in which an asset is held at the ind

idual product

business line, and where applicable with

in bus

iness lines depending on the way the business is managed and informat

ion

provided to management. Factors considered include:

•

How the performance of the product business line is evaluated and reported to the Group’s management

•

How managers of the business model are compensated, includ

ing whether management

is compensated based on the

fair value of assets or the contractual cash ﬂows collected

•

The risks that affect the performance of the business and how those risks are managed

•

The frequency, volume and tim

ing of sales

in prior periods, the reasons for such sales and expectations about future sales

activ

ity

The Group’s business model assessment is as follows:

Business model

Business object

ive

Characterist

ics

Businesses

Products

Hold to

collect

Intent is to orig

inate

ﬁnancial assets and

hold them to maturity,

collecting the

contractual cash ﬂows

over the term of the

instrument

• Provid

ing ﬁnancing and

orig

inat

ing assets to earn interest

income as primary income stream

• Performing credit risk

management activ

ies

•

Costs include funding costs,

transaction costs and impa

irment

losses

• Corporate Lending

• Financ

ial Markets

• Transaction Banking

• Retail Lending

• Treasury Markets

(Loans and

Borrowings)

• Loans and advances

• Debt securit

ies

Hold to

collect

and sell

Business object

ive met

through both hold to

collect and by selling

ﬁnancial assets

•

Portfolios held for liqu

ity needs;

or where a certain interest yield

proﬁle is mainta

ined; or that are

normally rebalanced to achieve

matching of duration of assets

and liab

ies

•

Income streams come from

interest income, fair value

changes, and impa

irment losses

• Treasury Markets

• Debt securit

ies

Fair value

through

proﬁt or loss

All other business

objectives,

includ

ing

trading and managing

ﬁnancial assets on a fa

value basis

•

Assets held for trading

•

Assets that are orig

inated,

purchased, and sold for proﬁt

taking or underwrit

ing act

ity

•

Performance of the portfolio is

evaluated on a fair value basis

•

Income streams are from fair

value changes or trading gains or

losses

• Financ

ial Markets

• Trading portfolios

• Financ

ial Markets

reverse repos

• Financ

ial Markets

(FM Bond and Loan

Syndicat

ion)

372

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

Financ

ial assets wh

ich have SPPI characterist

ics and that are held w

ith

in a bus

iness model whose object

ive

is to hold

ﬁnancial assets to collect contractual cashﬂows (hold to collect) are recorded at amort

ised cost. Conversely, ﬁnanc

ial assets

which have SPPI characterist

ics but are held w

ith

in a bus

iness model whose object

ive

is achieved by both collecting

contractual cashﬂows and selling ﬁnanc

ial assets (Hold to collect and sell) are class

ied as held at FVOCI. Both hold to

collect and hold to collect and sell business models involve holding ﬁnanc

ial assets to collect the contractual cashﬂows.

However, the business models are dist

inct by reference to the frequency and s

ign

iﬁcance that asset sales play

in meeting the

objective under wh

ich a particular group of ﬁnanc

ial assets

is managed. Hold to collect business models are characterised by

asset sales that are inc

idental to meet

ing the object

ives under wh

ich a group of assets is managed. Sales of assets under a

hold to collect business model can be made to manage increases in the credit risk of ﬁnanc

ial assets but sales for other

reasons should be infrequent or ins

ign

icant. Cashﬂows from the sale of ﬁnancial assets under a hold to collect and sell

business model by contrast are integral to achiev

ing the objectives under wh

ich a particular group of ﬁnanc

ial assets are

managed. This may be the case where frequent sales of ﬁnanc

ial assets are requ

ired to manage the Group’s daily liqu

ity

requirements or to meet regulatory requirements to demonstrate liqu

ity of ﬁnanc

ial

instruments. Sales of assets under hold

to collect and sell business models are therefore both more frequent and more sign

iﬁcant

in value than those under the hold

to collect model.

Equity instruments designated as held at FVOCI

Non-trading equity instruments acquired for strategic purposes rather than capital gain may be irrevocably designated at

ial recognit

ion as held at FVOCI on an

instrument-by-instrument basis. Div

idends rece

ived are recognised in proﬁt or loss.

Gains and losses aris

ing from changes

in the fair value of these instruments, includ

ing fore

ign exchange gains and losses, are

recognised directly in equity and are never reclassif

ied to proﬁt or loss even on derecogn

ion.

Financ

ial assets and l

iab

ies held at fa

ir value through proﬁt or loss

Financ

ial assets wh

ich are not held at amortised cost or that are not held at FVOCI are held at fair value through proﬁt or

loss. Financ

ial assets and l

iab

ies held at fa

ir value through proﬁt or loss are either mandatorily classif

ied as fa

ir value

through proﬁt or loss or irrevocably designated at fair value through proﬁt or loss at in

ial recognit

ion.

Mandatorily classif

ied at fa

ir value through proﬁt or loss

Financ

ial assets and l

iab

ies wh

ich are mandatorily held at fair value through proﬁt or loss are split between two

subcategories as follows:

Trading, includ

ing:

•

Financ

ial assets and l

iab

ies held for trad

ing, which are those acquired princ

ipally for the purpose of sell

ing in the

short-term

• Derivat

ives

Non-trading mandatorily at fair value through proﬁt or loss, includ

ing:

•

Instruments in a business which has a fair value business model (see the Group’s business model assessment) which are not

trading or derivat

ives

•

Hybrid ﬁnanc

ial assets that conta

in one or more embedded derivat

ives

•

Financ

ial assets that would otherw

ise be measured at amortised cost or FVOCI but which do not have SPPI characterist

ics

•

Equity instruments that have not been designated as held at FVOCI

•

Financ

ial l

iab

ies that const

itute contingent considerat

ion

in a business combinat

ion

Designated at fair value through proﬁt or loss

Financ

ial assets and l

iab

ies may be des

ignated at fair value through proﬁt or loss when the designat

ion el

inates or

sign

iﬁcantly reduces a measurement or recogn

ion

incons

istency that would otherw

ise arise from measuring assets or

liab

ies on a d

ifferent basis (‘accounting mismatch’).

Financ

ial l

iab

ies may also be des

ignated at fair value through proﬁt or loss where they are managed on a fair value basis

or have an embedded derivat

ive where the Group

is not able to bifurcate and separately value the embedded derivat

ive

component.

Financ

ial l

iab

ies held at amort

ised cost

Financ

ial l

iab

ies that are not ﬁnancial guarantees or loan comm

itments and that are not classif

ied as ﬁnancial l

iab

ies

held at fair value through proﬁt or loss are classif

ied as ﬁnancial l

iab

ies held at amort

ised cost.

Preference shares which carry a mandatory coupon that represents a market rate of interest at the issue date, or which are

redeemable on a specif

ic date or at the opt

ion of the shareholder are classif

ied as ﬁnancial l

iab

ies and are presented

other borrowed funds. The div

idends on these preference shares are recogn

ised in the income statement as interest expense

on an amortised cost basis using the effective interest method.

373

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

Financ

ial guarantee contracts and loan comm

itments

The Group issues ﬁnanc

ial guarantee contracts and loan comm

itments in return for fees. Financ

ial guarantee contracts and

any loan commitments issued at below-market interest rates are in

ially recognised at their fair value as a ﬁnanc

ial l

iab

ity,

and subsequently measured at the higher of the in

ial value less the cumulative amount of income recognised in accordance

with the princ

iples of IFRS 15 Revenue from Contracts w

ith Customers and their expected credit loss provis

ion. Loan

commitments may be designated at fair value through proﬁt or loss where that is the business model under which such

contracts are held.

Fair value of ﬁnanc

ial assets and l

iab

ies

Fair value is the price that would be received to sell an asset or paid to transfer a liab

ity in an orderly transaction between

market partic

ipants at the measurement date

in the princ

ipal market for the asset or l

iab

ity, or in the absence of a princ

ipal

market, the most advantageous market to which the Group has access at the date. The fair value of a liab

ity includes the

risk that the bank will not be able to honour its obligat

ions.

The fair value of ﬁnanc

ial

instruments is generally measured on the basis of the ind

idual ﬁnanc

ial

instrument. However,

when a group of ﬁnancial assets and ﬁnancial l

iab

ies

is managed on the basis of its net exposure to either market risk or

credit risk, the fair value of the group of ﬁnanc

ial

instruments is measured on a net basis.

The fair values of quoted ﬁnanc

ial assets and l

iab

ies

in active markets are based on current prices. A market is regarded as

active if transactions for the asset or liab

ity take place with sufﬁc

ient frequency and volume to prov

ide pric

ing

informat

ion

on an ongoing basis. If the market for a ﬁnanc

ial

instrument, and for unlisted securit

ies,

is not active, the Group establishes

fair value by using valuation techniques.

Init

ial recogn

ion

Regular way purchases and sales of ﬁnancial assets held at fa

ir value through proﬁt or loss, and held at fair value through

other comprehensive income are in

ially recognised on the trade date (the date on which the Group commits to purchase or

sell the asset). Loans and advances and other ﬁnancial assets held at amort

ised cost are recognised on the settlement date

(the date on which cash is advanced to the borrowers).

All ﬁnancial

instruments are in

ially recognised at fair value, which is normally the transaction price, plus directly attributable

transaction costs for ﬁnanc

ial assets and l

iab

ies wh

ich are not subsequently measured at fair value through proﬁt or loss.

In certain circumstances, the in

ial fair value may be based on a valuation technique which may lead to the recognit

ion of

proﬁts or losses at the time of in

ial recognit

ion. However, these proﬁts or losses can only be recogn

ised when the valuation

technique used is based solely on observable market data. In those cases where the in

ially recognised fair value is based on

a valuation model that uses unobservable inputs, the difference between the transaction price and the valuation model is

not recognised immed

iately

in the income statement but is amortised or released to the income statement following the

passage of time, or as the inputs become observable, or the transaction matures or is terminated.

Subsequent measurement

Financ

ial assets and ﬁnancial l

iab

ies held at amort

ised cost

Financ

ial assets and ﬁnancial l

iab

ies held at amort

ised cost are subsequently carried at amortised cost using the effective

interest method (see Interest income and expense). Foreign exchange gains and losses are recognised in the income

statement.

Where a ﬁnancial

instrument carried at amortised cost is the hedged item in a qualify

ing fa

ir value hedge relationsh

ip,

its

carrying value is adjusted by the fair value gain or loss attributable to the hedged risk.

Financ

ial assets held at FVOCI

Debt instruments held at FVOCI are subsequently carried at fair value, with all unrealised gains and losses aris

ing from

changes in fair value (includ

ing any related fore

ign exchange gains or losses) recognised in other comprehensive income and

accumulated in a separate component of equity. Foreign exchange gains and losses on the amortised cost are recognised in

income. Changes in expected credit losses are recognised in the proﬁt or loss and are accumulated in equity. On

derecognit

ion, the cumulat

ive fair value gains or losses, net of the cumulative expected credit loss reserve, are transferred to

the proﬁt or loss.

Equity investments designated at FVOCI are subsequently carried at fair value with all unrealised gains and losses aris

ing

from changes in fair value (includ

ing any related fore

ign exchange gains or losses) recognised in other comprehensive

income and accumulated in a separate component of equity. On derecognit

ion, the cumulat

ive reserve is transferred to

retained earnings and is not recycled to proﬁt or loss.

Financ

ial assets and l

iab

ies held at fa

ir value through proﬁt or loss

Financ

ial assets and l

iab

ies mandator

ily held at fair value through proﬁt or loss and ﬁnanc

ial assets des

ignated at fair

value through proﬁt or loss are subsequently carried at fair value, with gains and losses aris

ing from changes

in fair value,

includ

ing contractual

interest income or expense, recorded in the net trading income line in the proﬁt or loss unless the

instrument is part of a cash ﬂow hedging relationsh

ip.

374

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

Financ

ial l

iab

ies des

ignated at fair value through proﬁt or loss

Financ

ial l

iab

ies des

ignated at fair value through proﬁt or loss are held at fair value, with changes in fair value recognised

in the net trading income line in the proﬁt or loss, other than that attributable to changes in credit risk. Fair value changes

attributable to credit risk are recognised in other comprehensive income and recorded in a separate category of reserves

unless this is expected to create or enlarge an accounting mismatch, in which case the entire change in fair value of the

ﬁnancial l

iab

ity designated at fair value through proﬁt or loss is recognised in proﬁt or loss.

Derecognit

ion of ﬁnancial

instruments

Financ

ial assets are derecogn

ised when the rights to receive cash ﬂows from the ﬁnanc

ial assets have exp

ired or where the

Group has transferred substantially all risks and rewards of ownership. If substantially all the risks and rewards have been

neither retained nor transferred and the Group has retained control, the assets continue to be recognised to the extent of the

Group’s continu

ing

involvement.

Where ﬁnancial assets have been mod

ied, the mod

ied terms are assessed on a qual

itat

ive and quant

itat

ive bas

is to

determine whether a fundamental change in the nature of the instrument has occurred, such as whether the derecognit

ion

of the pre-exist

ing

instrument and the recognit

ion of a new

instrument is appropriate.

On derecognit

ion of a ﬁnancial asset, the d

ifference between the carrying amount of the asset (or the carrying amount

allocated to the portion of the asset derecognised) and the sum of the considerat

ion rece

ived (includ

ing any new asset

obtained less any new liab

ity assumed) and any cumulative gain or loss that had been recognised in other comprehensive

income is recognised in proﬁt or loss except for equity instruments elected FVOCI (see above) and cumulative fair value

adjustments attributable to the credit risk of a liab

ity that are held in other comprehensive income.

Financ

ial l

iab

ies are derecogn

ised when they are extingu

ished. A ﬁnancial l

iab

ity is extingu

ished when the obl

igat

ion

discharged, cancelled or expires and this is evaluated both qualitat

ively and quant

itat

ively. However, where a ﬁnancial

liab

ity has been modif

ied,

it is derecognised if the difference between the modif

ied cash ﬂows and the or

inal cash ﬂows

more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat

ive assessment to determ

ine whether the

terms of the two instruments are substantially different.

If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab

ity and

the considerat

ion pa

id is included in ‘Other income’ except for the cumulative fair value adjustments attributable to the

credit risk of a liab

ity that are held in other comprehensive income which are never recycled to the proﬁt or loss.

Modif

ied ﬁnancial

instruments

Financ

ial assets and ﬁnancial l

iab

ies whose or

inal contractual terms have been mod

ied,

includ

ing those loans subject

to forbearance strategies, are considered to be modif

ied

instruments. Modif

icat

ions may include changes to the tenor, cash

ﬂows and or interest rates among other factors.

Where derecognit

ion of ﬁnancial assets

is appropriate (see Derecognit

ion), the newly recogn

ised residual loans are assessed

to determine whether the assets should be classif

ied as purchased or or

inated Cred

it-Impaired assets (POCI).

Where derecognit

ion

is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the

present value of the renegotiated or modif

ied contractual cash ﬂows d

iscounted at the orig

inal effect

ive interest rate (or

credit adjusted effective interest rate for POCI ﬁnanc

ial assets). The d

ifference between the recalculated values and the

pre-modif

ied gross carry

ing values of the instruments are recorded as a modif

icat

ion gain or loss in the proﬁt or loss.

Gains and losses aris

ing from mod

icat

ions for credit reasons are recorded as part of ‘Credit Impairment’ (see Credit

Impairment policy). Modif

icat

ion gains and losses aris

ing from non-cred

it reasons are recognised either as part of “Credit

Impairment” or with

income depending on whether there has been a change in the credit risk on the ﬁnanc

ial asset

subsequent to the modif

icat

ion. Modif

icat

ion gains and losses aris

ing on ﬁnancial l

iab

ies are recogn

ised with

income.

The movements in the applicable expected credit loss loan posit

ions are d

isclosed in further detail in Risk Review.

Under the Phase 2 Interest Rate Benchmark Reform amendments to IFRS 9, changes to the basis for determin

ing contractual

cash ﬂows as a direct result of interest rate benchmark reform are treated as changes to a ﬂoating interest rate to that

instrument, provided that the transit

ion from the IBOR benchmark rate to the alternat

ive RFR takes place on an economically

equivalent basis. Where the instrument is measured at amortised cost or FVOCI, this results in a change in the instrument’s

effective interest rate, with no change in the amortised cost value of the instrument. If the change to the instrument does not

meet these criter

ia, the Group appl

ies judgement to assess whether the changes are substantial and if they are, the ﬁnanc

ial

instrument is derecognised and a new ﬁnanc

ial

instrument is recognised. If the changes are not substantial, the Group

adjusts the gross carrying amount of the ﬁnanc

ial

instrument by the present value of the changes not covered by the

practical expedient, discounted using the revised effective interest rate.

375

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

Reclassif

icat

ions

Financ

ial l

iab

ies are not reclass

ied subsequent to

ial recognit

ion. Reclass

icat

ions of ﬁnanc

ial assets are made when,

and only when, the business model for those assets changes. Such changes are expected to be infrequent and arise as a

result of sign

iﬁcant external or

internal changes such as the terminat

ion of a l

ine of business or the purchase of a subsid

iary

whose business model is to realise the value of pre-exist

ing held for trad

ing ﬁnanc

ial assets through a hold to collect model.

Financ

ial assets are reclass

ied at the

ir fair value on the date of reclassif

icat

ion and previously recognised gains and losses

are not restated. Moreover, reclassif

icat

ions of ﬁnanc

ial assets between ﬁnancial assets held at amort

ised cost and ﬁnanc

ial

assets held at fair value through other comprehensive income do not affect effective interest rate or expected credit loss

computations.

Reclassif

ied from amort

ised cost

Where ﬁnancial assets held at amort

ised cost are reclassif

ied to ﬁnancial assets held at fa

ir value through proﬁt or loss, the

difference between the fair value of the assets at the date of reclassif

icat

ion and the previously recognised amortised cost is

recognised in proﬁt or loss.

For ﬁnancial assets held at amort

ised cost that are reclassif

ied to fa

ir value through other comprehensive income, the

difference between the fair value of the assets at the date of reclassif

icat

ion and the previously recognised gross carrying

value is recognised in other comprehensive income. Addit

ionally, the related cumulat

ive expected credit loss amounts

relating to the reclassif

ied ﬁnancial assets are reclass

ied from loan loss prov

ions to a separate reserve

in other

comprehensive income at the date of reclassif

icat

ion.

Reclassif

ied from fa

ir value through other comprehensive income

Where ﬁnancial assets held at fa

ir value through other comprehensive income are reclassif

ied to ﬁnancial assets held at fa

value through proﬁt or loss, the cumulative gain or loss previously recognised in other comprehensive income is transferred to

the proﬁt or loss.

For ﬁnancial assets held at fa

ir value through other comprehensive income that are reclassif

ied to ﬁnancial assets held at

amortised cost, the cumulative gain or loss previously recognised in other comprehensive income is adjusted against the fair

value of the ﬁnancial asset such that the ﬁnancial asset

is recorded at a value as if it had always been held at amortised cost.

In addit

ion, the related cumulat

ive expected credit losses held with

in other comprehens

ive income are reversed against the

gross carrying value of the reclassif

ied assets at the date of reclass

icat

ion.

Reclassif

ied from fa

ir value through proﬁt or loss

Where ﬁnancial assets held at fa

ir value through proﬁt or loss are reclassif

ied to ﬁnancial assets held at fa

ir value through

other comprehensive income or ﬁnanc

ial assets held at amort

ised cost, the fair value at the date of reclassif

icat

ion is used to

determine the effective interest rate on the ﬁnanc

ial asset go

ing forward. In addit

ion, the date of reclass

icat

ion is used as

the date of in

ial recognit

ion for the calculat

ion of expected credit losses. Where ﬁnanc

ial assets held at fa

ir value through

proﬁt or loss are reclassif

ied to ﬁnancial assets held at amort

ised cost, the fair value at the date of reclassif

icat

ion becomes

the gross carrying value of the ﬁnanc

ial asset.

376

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

The Group’s classif

icat

ion of its ﬁnanc

ial assets and l

iab

ies

is summarised in the following tables.

Assets

Notes

Assets at fair value

Assets

held at

amortised

cost

$mill

ion

Total

$mill

ion

Trading

$mill

ion

Derivat

ives

held for

hedging

$mill

ion

Non-trading

mandatorily

at fair value

through

proﬁt or loss

$mill

ion

Designated

at fair value

through

proﬁt or loss

$mill

ion

Fair value

through other

comprehensive

income

$mill

ion

Total

ﬁnancial

assets at

fair value

$mill

ion

Cash and balances at

central banks

–

58,263

Financ

ial assets held at fa

value through proﬁt or loss

Loans and advances

to banks¹

976

–

976

–

976

Loans and advances

to customers¹

5,765

–

781

–

6,546

–

6,546

Reverse repurchase

agreements and other

sim

ilar secured lend

ing

1,175

–

63,316

–

64,491

–

64,491

Debt securit

ies,

alternative tier one

and other elig

ible b

ills

30,162

–

324

–

30,562

–

30,562

Equity shares

2,997

–

233

–

3,230

–

3,230

Other assets

–

41,075

–

64,661

–

105,812

–

105,812

Derivat

ive ﬁnancial

instruments

60,858

2,859

–

63,717

–

63,717

Loans and advances

to banks¹

–

39,519

of which – reverse

repurchase agreements

and other sim

ilar

secured lending

–

978

Loans and advances

to customers¹

–

310,647

of which – reverse

repurchase agreements

and other sim

ilar

secured lending

–

24,498

Investment securit

ies

Debt securit

ies,

alternative tier one

and other elig

ible b

ills

–

111,926

59,714

171,640

Equity shares

–

808

–

808

–

112,734

59,714

172,448

Other assets

–

39,295

Assets held for sale

–

1,388

1,391

Total at 31 December 2022

101,933

2,859

64,661

112,734

282,266

508,826

791,092

Further analysed in Risk review and Capital review (pages 236 to 325)

377

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

Assets

Notes

Assets at fair value

Assets

held at

amortised

cost

$mill

ion

Total

$mill

ion

Trading

$mill

ion

Derivat

ives

held for

hedging

$mill

ion

Non-trading

mandatorily

at fair value

through

proﬁt or loss

$mill

ion

Designated

at fair value

through

proﬁt or loss

$mill

ion

Fair value

through other

comprehensive

income

$mill

ion

Total

ﬁnancial

assets at

fair value

$mill

ion

Cash and balances at

central banks

–

72,663

Financ

ial assets held at fa

value through proﬁt or loss

Loans and advances

to banks¹

1,491

–

2,356

–

3,847

–

3,847

Loans and advances

to customers¹

5,813

–

4,140

–

9,953

–

9,953

Reverse repurchase

agreements and other

sim

ilar secured lend

ing

–

80,009

–

80,009

–

80,009

Debt securit

ies,

alternative tier one

and other elig

ible b

ills

28,801

–

463

161

–

29,425

–

29,425

Equity shares

5,653

–

208

–

5,861

–

5,861

Other assets

–

41,758

–

87,202

161

–

129,121

–

129,121

Derivat

ive ﬁnancial

instruments

51,002

1,443

–

52,445

–

52,445

Loans and advances

to banks¹

–

44,383

of which – reverse

repurchase agreements

and other sim

ilar

secured lending

–

1,079

Loans and advances

to customers¹

–

298,468

of which – reverse

repurchase agreements

and other sim

ilar

secured lending

–

7,331

Investment securit

ies

Debt securit

ies,

alternative tier one

and other elig

ible b

ills

–

121,375

41,325

162,700

Equity shares

–

737

–

737

–

122,112

41,325

163,437

Other assets

–

40,068

Assets held for sale

–

Total at 31 December 2021

92,760

1,443

87,202

204

122,112

303,721

496,959

800,680

Further analysed in Risk review and Capital review (pages 236 to 325)

378

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

Liab

ies

Notes

Liab

ies at fa

ir value

Amortised

cost

$mill

ion

Total

$mill

ion

Trading

$mill

ion

Derivat

ives

held for

hedging

$mill

ion

Designated

at fair value

through

proﬁt or loss

$mill

ion

Total

ﬁnancial

liab

ies at

fair value

$mill

ion

Financ

ial l

iab

ies held at fa

ir value through

proﬁt or loss

Deposits by banks

–

1,066

–

1,066

Customer accounts

–

11,677

11,706

–

11,706

Repurchase agreements and other sim

ilar

secured borrowing

–

51,706

–

51,706

Debt securit

ies

in issue

–

8,572

–

8,572

Short posit

ions

6,847

–

6,847

–

6,847

Other liab

ies

–

6,876

–

73,027

79,903

–

79,903

Derivat

ive ﬁnancial

instruments

65,316

4,546

–

69,862

–

69,862

Deposits by banks

–

28,789

Customer accounts

–

461,677

Repurchase agreements and other sim

ilar

secured borrowing

–

2,108

Debt securit

ies

in issue

–

61,242

Other liab

ies

–

42,915

Subordinated liab

ies and other borrowed funds

–

13,715

Liab

ies

included in disposal groups held for sale

–

1,230

1,235

Total at 31 December 2022

72,197

4,546

73,027

149,770

611,676

761,446

Liab

ies

Notes

Liab

ies at fa

ir value

Amortised

cost

$mill

ion

Total

$mill

ion

Trading

$mill

ion

Derivat

ives

held for

hedging

$mill

ion

Designated

at fair value

through

proﬁt or loss

$mill

ion

Total

ﬁnancial

liab

ies at

fair value

$mill

ion

Financ

ial l

iab

ies held at fa

ir value through

proﬁt or loss

Deposits by banks

–

1,352

–

1,352

Customer accounts

198

–

9,093

9,291

–

9,291

Repurchase agreements and other sim

ilar

secured borrowing

–

62,388

–

62,388

Debt securit

ies

in issue

–

5,597

–

5,597

Short posit

ions

6,562

–

6,562

–

6,562

Other liab

ies

–

6,766

–

78,431

85,197

–

85,197

Derivat

ive ﬁnancial

instruments

52,706

693

–

53,399

–

53,399

Deposits by banks

–

30,041

Customer accounts

–

474,570

Repurchase agreements and other sim

ilar

secured borrowing

–

3,260

Debt securit

ies

in issue

–

61,293

Other liab

ies

–

43,432

Subordinated liab

ies and other borrowed funds

–

16,646

Liab

ies

included in disposal groups held for sale

–

Total at 31 December 2021

59,472

693

78,431

138,596

629,242

767,838

Interest rate benchmark reform

In 2017, the Financ

ial Conduct Author

ity (FCA) announced that it had reached an agreement with LIBOR panel banks to

contribute to LIBOR until the end of 2021, after which there would be a transit

ion from LIBORs to alternat

ive risk-free rates (RFRs).

Since then, there have been further updates, particularly with respect to the cessation date for certain USD LIBOR tenors being

deferred from 31 December 2021 to 30 June 2023.

379

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

How the Group is managing the transit

ion to alternat

ive benchmark rates

In 2018, the Group established its IBOR Transit

ion Programme to manage the trans

ion away from LIBOR. Sen

ior management

oversight for the Programme is provided by the Chief Executive Ofﬁcers of CCIB and CPBB. The Programme’s strategic bank-

wide approach aims to support clients throughout the transit

ion, wh

ile ensuring key risks and issues are ident

iﬁed and

effectively managed. The Programme is governed by a princ

ipal Programme Steer

ing Committee that oversees 13 workstreams

aligned to the Group’s businesses and functions. With

in the Programme, separate comm

ittees govern each workstream, and all

of them have a dedicated Accountable Executive.

Addit

ional governance

is supported by regular updates provided to senior risk committees, includ

ing the Group R

isk Committee,

Board Risk Committee and the Corporate, Commercial and Institut

ional Bank

ing Risk Committee.

From an industry and regulatory perspective, the Group actively partic

ipates

in and contributes to working groups, industry

associat

ions and bus

iness forums that focus on different aspects of the transit

ion. The Group mon

itors the developments at

these forums and includes sign

iﬁcant dec

ions

into its broader transit

ion plans.

Progress during 2022

Supported by a number of system enhancements, the Group has successfully enabled the transit

ion to RFR products, w

ith

end-to-end capabil

ies across a full suite of derivat

ive and cash products. Act

ity

in products referencing RFRs continued to

grow throughout 2022. New use of USD LIBOR has ceased, except for lim

ited except

ions as permitted by the regulators.

The Group remediated all non-USD LIBOR exposures by early 2022 and has no reliance on synthetic GBP or JPY LIBOR in 2022.

During 2022, focus shifted on the remediat

ion of legacy USD LIBOR transact

ions and automation of associated data and

processes. Clients with legacy USD LIBOR loans have been engaged to remediate their contracts primar

ily v

ia active conversion

to alternative rates, or other suitable transit

ion mechan

isms such as the inclus

ion of robust fallbacks. The Group adhered to the

International Swaps and Derivat

ives Assoc

iat

ion (ISDA) 2020 IBOR Fallbacks Protocol for all

its trading entit

ies and cont

inued to

engage clients that had not adhered to negotiate remediat

ion of USD LIBOR contracts by the end of June 2023. The Group w

ill

also partic

ipate

in the conversion events at the London Clearing House (LCH) during the ﬁrst part of 2023.

Frontline and client engagement, includ

ing

internal and client communicat

ions, tra

ing, and cl

ient webinars were a key feature

of the Programme throughout 2022 to support transit

ion from USD LIBOR to Secured Overn

ight Financ

ing Rate (SOFR) as well

as the transit

ion for other IBOR benchmarks that are ceas

ing.

Risks which the Group is exposed to due to IBOR transit

ion

The Group has largely mit

igated all mater

ial adverse outcomes associated with the cessation of IBOR benchmarks, and these

have not required a change to the Group’s risk management strategy. However, the Group will continue to focus on the

remediat

ion requ

ired for other benchmarks, and will continue to monitor and manage the inherent risks of the transit

ion, w

ith

particular attention being paid to the following:

•

Legal Risk: IBOR transit

ion

introduces sign

iﬁcant legal r

isks and the Group has taken action to mit

igate them where poss

ible.

These include risks around contracts that reference USD LIBOR. Steps have been taken to either insert robust fallbacks or

actively convert transactions from the relevant IBOR to the new RFR-based options. The Group actively monitors remediat

ion

progress and tracks exposures that are proving diff

icult to remed

iate.

Based on the informat

ion ava

ilable as at the date of

this Report, there is a reasonable probabil

ity that some such exposures may not be remed

iated by the ﬁrst interest ﬁx

ing date

following June 30 2023.

The Group will apply certain legislat

ive solut

ions to these exposures if required, includ

ing the

applicat

ion of synthet

ic USD LIBOR, should it be made available

•

Conduct Risk: The Group considers Conduct Risk to be a sign

iﬁcant area of non-ﬁnancial r

isk management throughout the

transit

ion. Our r

isk appetite statement on Conduct Risk strives to mainta

in appropr

iate outcomes by continuously

demonstrating that we are ‘Doing the Right Thing’ in the way we do business. Accordingly, we recognise that the

ident

iﬁcation and m

igat

ion of conduct risks aris

ing

in respect of the transit

ion are fundamental to the successful trans

ion

to new RFR-based rates. The Group has therefore taken actions in this regard as an integral part of its IBOR Transit

ion

Programme, includ

ing an extens

ive outreach programme

•

Operational Risk: The Group has recognised the importance of the ongoing ident

iﬁcation and management of Operat

ional

Risk as a result of IBOR transit

ion,

includ

ing those related to systems affected by the trans

ion. The Programme has adopted

the Group’s exist

ing Operat

ional Risk Framework in its approach to ident

ify

ing, quantify

ing, and m

igat

ing the impact of

operational risks resulting from the transit

ion

•

Market Risk: As trades are transit

ioned from IBOR to RFRs, the bus

iness-as-usual metrics, lim

it structure and controls w

ill

continue to apply. Lim

its for value at r

isk and market risk sensit

ies are

in accordance with the Group Risk Appetite

Statement. New lim

its have been set follow

ing engagement with the business to consider client demand and market liqu

ity

in RFR-linked products, as well as the regulatory expectations

•

Financ

ial and pr

ing r

isk: The Group continues to monitor any ﬁnanc

ial

impact of IBOR transit

ion across bus

iness and

functional workstreams in the Programme, and is implement

ing model and pr

ing changes to m

igate these r

isks and ensure

alignment with conventions and pric

ing mechan

isms of the alternative reference rates and ind

ices

•

Accounting Risk: The Group has ident

iﬁed the ﬁnancial

instruments that may be affected by accounting issues such as

accounting for contractual changes due to IBOR reform, fair value measurement and hedge accounting. We continue to

monitor and contribute to industry developments on tax and accounting changes.

380

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

As at 31 December 2022 the Group had the following notional princ

ipal exposures to

interest rate benchmarks that are

expected to be subject to interest rate benchmark reform. The Group has excluded ﬁnanc

ial

instruments linked to USD LIBOR

maturing before 30 June 2023 as it is assumed these will not require remediat

ion due USD LIBOR no longer be

ing published on a

representative basis beyond this date.

IBOR exposures by benchmark

as of 31 December 2022

USD LIBOR

$mill

ion

GBP LIBOR

$mill

ion

SGD SOR

$mill

ion

THB FIX

$mill

ion

Other IBOR

$mill

ion

Total IBOR

$mill

ion

Assets

Loans and advances to banks

145

–

145

Loans and advances to customers

21,395

–

420

–

21,815

Debt securit

ies, AT1 and other el

ible b

ills

2,843

–

2,858

24,383

–

435

–

24,818

Liab

ies

Deposits by banks

332

–

332

Customer accounts

3,066

–

3,100

Repurchase agreements and other

secured borrowing

671

–

671

Debt securit

ies

in issue

1,211

–

1,211

Subordinated liab

ies and other

borrowed funds

–

5,280

–

5,314

Derivat

ives – Fore

ign exchange

contracts

Currency swaps and options

135,145

–

2,273

959

–

138,377

Derivat

ives – Interest rate contracts

Swaps

671,534

–

7,512

10,998

–

690,044

Forward rate agreements and options

22,067

–

22,076

Exchange traded futures and options

31,922

–

31,922

Equity and stock index options

–

Credit derivat

ive contracts

3,974

–

129

–

4,149

Total IBOR derivat

ive exposure

864,691

–

9,831

12,095

–

886,617

Total IBOR exposure

894,354

–

10,266

12,129

–

916,749

Loan commitments off balance sheet

2,798

–

2,812

IBOR exposures by benchmark

as at 31 December 2021

USD LIBOR

$mill

ion

GBP LIBOR

$mill

ion

SGD SOR

$mill

ion

THB FIX

$mill

ion

Other IBOR

$mill

ion

Total IBOR

$mill

ion

Assets

Loans and advances to banks

552

–

552

Loans and advances to customers

27,843

123

1,479

29,518

Debt securit

ies, AT1 and other el

ible b

ills

2,735

237

–

2,989

31,130

360

1,496

33,059

Liab

ies

Deposits by banks

815

–

815

Customer accounts

3,575

–

3,612

Repurchase agreements and other

secured borrowing

671

–

671

Debt securit

ies

in issue

326

–

326

Subordinated liab

ies and other

borrowed funds

160

–

160

5,547

–

5,584

Derivat

ives – Fore

ign exchange

contracts

Currency swaps and options

158,184

–

3,877

1,725

–

163,786

Derivat

ives – Interest rate contracts

Swaps

686,403

–

10,091

51,395

–

747,889

Forward rate agreements and options

28,406

–

124

–

28,604

Exchange traded futures and options

24,236

–

24,236

Equity and stock index options

–

Credit derivat

ive contracts

5,515

–

277

–

5,864

Total IBOR derivat

ive exposure

902,818

–

14,114

53,521

–

970,453

Total IBOR exposure

939,495

360

15,611

53,572

1,009,096

Loan commitments off balance sheet

4,161

285

179

–

966

5,591

381

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

Offsetting of ﬁnanc

ial

instruments

Financ

ial assets and l

iab

ies are offset and the net amount reported

in the balance sheet when there is a legally enforceable

right to offset the recognised amounts and there is an intent

ion to settle on a net bas

is, or to realise the asset and settle the

liab

ity simultaneously.

In practice, for credit mit

igat

ion, the Group is able to offset assets and liab

ies wh

ich do not meet the IAS 32 netting criter

ia set

out below. Such arrangements include master netting arrangements for derivat

ives and global master repurchase agreements

for repurchase and reverse repurchase transactions. These agreements generally allow that all outstanding transactions with a

particular counterparty can be offset but only in the event of default or other predetermined events.

In addit

ion, the Group also rece

ives and pledges readily realisable collateral for derivat

ive transact

ions to cover net exposure in

the event of a default. Under repurchase and reverse repurchase agreements the Group pledges (legally sells) and obtains

(legally purchases) respectively, highly liqu

id assets wh

ich can be sold in the event of a default.

The following tables set out the impact of netting on the balance sheet. This comprises derivat

ive transact

ions settled through

an enforceable netting agreement where we have the intent and abil

ity to settle net and wh

ich are offset on the balance sheet.

2022

Gross amounts

of recognised

ﬁnancial

instruments

$mill

ion

Impact of

offset in the

balance sheet

$mill

ion

Net amounts

of ﬁnancial

instruments

presented in the

balance sheet

$mill

ion

Related amount not offset

in the balance sheet

Net amount

$mill

ion

Financ

ial

instruments

$mill

ion

Financ

ial

collateral

$mill

ion

Assets

Derivat

ive ﬁnancial

instruments

120,799

(57,082)

63,717

(50,133)

(9,206)

4,378

Reverse repurchase agreements and

other sim

ilar secured lend

ing

105,891

(15,924)

89,967

–

(89,967)

–

At 31 December 2022

226,690

(73,006)

153,684

(50,133)

(99,173)

4,378

Liab

ies

Derivat

ive ﬁnancial

instruments

126,944

(57,082)

69,862

(50,133)

(12,515)

7,214

Repurchase agreements and other

sim

ilar secured borrow

ing

69,738

(15,924)

53,814

–

(53,814)

–

At 31 December 2022

196,682

(73,006)

123,676

(50,133)

(66,329)

7,214

2021

Gross amounts

of recognised

ﬁnancial

instruments

$mill

ion

Impact of

offset in the

balance sheet

$mill

ion

Net amounts

of ﬁnancial

instruments

presented in the

balance sheet

$mill

ion

Related amount not offset

in the balance sheet

Net amount

$mill

ion

Financ

ial

instruments

$mill

ion

Financ

ial

collateral

$mill

ion

Assets

Derivat

ive ﬁnancial

instruments

79,043

(26,598)

52,445

(39,502)

(8,092)

4,851

Reverse repurchase agreements and

other sim

ilar secured lend

ing

95,845

(7,426)

88,419

–

(88,419)

–

At 31 December 2021

174,888

(34,024)

140,864

(39,502)

(96,511)

4,851

Liab

ies

Derivat

ive ﬁnancial

instruments

79,997

(26,598)

53,399

(39,502)

(9,217)

4,680

Repurchase agreements and other

sim

ilar secured borrow

ing

73,074

(7,426)

65,648

–

(65,648)

–

At 31 December 2021

153,071

(34,024)

119,047

(39,502)

(74,865)

4,680

Related amounts not offset in the balance sheet comprises:

•

Financ

ial

instruments not offset in the balance sheet but covered by an enforceable netting arrangement. This comprises

master netting arrangements held against derivat

ive ﬁnancial

instruments and excludes the effect of over-collateralisat

ion

•

Financ

ial

instruments where a legal opin

ion ev

idenc

ing enforceab

ity of the r

ight of offset may not have been sought, or may

have been unable to obtain

•

Financ

ial collateral compr

ises cash collateral pledged and received for derivat

ive ﬁnancial

instruments and collateral bought

and sold for reverse repurchase and repurchase agreements respectively and excludes the effect of over-collateralisat

ion

382

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

Financ

ial l

iab

ies des

ignated at fair value through proﬁt or loss

2022

$mill

ion

2021

$mill

ion

Carrying balance aggregate fair value

73,027

78,431

Amount contractually obliged to repay at maturity

74,138

78,691

Difference between aggregate fair value and contractually obliged to repay at maturity

(1,111)

(260)

Cumulative change in fair value accredited to credit risk difference

(56)

The net fair value loss on ﬁnanc

ial l

iab

ies des

ignated at fair value through proﬁt or loss was $677 mill

ion for the year

(31 December 2021: net loss of $133 mill

ion).

Further details of the Group’s own credit adjustment (OCA) valuation technique is described later in this Note.

Valuation of ﬁnanc

ial

instruments

The fair values of quoted ﬁnanc

ial assets and l

iab

ies

in active markets are based on current prices. A market is regarded as

active if transactions for the asset or liab

ity take place with sufﬁc

ient frequency and volume to prov

ide pric

ing

informat

ion on

an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets

for ident

ical

instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor

liqu

ity, fair values have been determined using valuation techniques which, to the extent possible, use market observable

inputs, but in some cases use non market observable inputs. Valuation techniques used include discounted cash ﬂow analysis

and pric

ing models and, where appropr

iate, comparison with instruments that have characterist

ics s

ilar to those of the

instruments held by the Group.

The Valuation Methodology function is responsible for independent price verif

icat

ion, oversight of fair value and appropriate

value adjustments and escalation of valuation issues. Independent price verif

icat

ion is the process of determin

ing that the

valuations incorporated into the ﬁnanc

ial statements are val

idated independent of the business area responsible for the

product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the ﬁnanc

ial

instruments

are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the ﬁnanc

ial

statements. The market data used for price verif

icat

ion(PV) may include data sourced from recent trade data involv

ing

external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric

ing prov

iders. The Valuation

Methodology function perform an ongoing review of the market data sources that are used as part of the PV and fair value

processes which are formally documented on a semi-annual basis detail

ing the su

itab

ity of the market data used for price

testing. Price verif

icat

ion uses independently sourced data that is deemed most representative of the market the instruments

trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliab

ity, availab

ity of

multiple data sources and methodology employed by the pric

ing prov

ider are taken into considerat

ion.

The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consist

ing of representat

ives from Group

Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the

independent valuations of the inventory. For Princ

ipal F

inance, the Investment Committee meeting is held on a quarterly basis

to review investments and valuations

Sign

iﬁcant account

ing estimates and judgements

The Group evaluates the sign

iﬁcance of ﬁnancial

instruments and material accuracy of the valuations incorporated in the

ﬁnancial statements as they

involve a high degree of judgement and estimat

ion uncerta

inty in determin

ing the carry

ing

values of ﬁnancial assets and l

iab

ies at the balance sheet date.

•

Fair value of ﬁnanc

ial

instruments is determined using valuation techniques and estimates (see below) which, to the extent

possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the observabil

ity

of sign

iﬁcant valuat

ion inputs can materially affect the fair values of ﬁnanc

ial

instruments

•

When establish

ing the ex

it price of a ﬁnanc

ial

instrument using a valuation technique, the Group estimates valuation

adjustments in determin

ing the fa

ir value (page 383])

•

In determin

ing the valuat

ion of ﬁnanc

ial

instruments, the Group makes judgements on the amounts reserved to cater for

model and valuation risks, which cover both Level 2 and Level 3 assets, and the sign

iﬁcant valuat

ion judgements in respect

of Level 3 instruments (page 390)

•

Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued based

on models that use a sign

iﬁcant degree of non-market-based unobservable

inputs

383

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

Valuation techniques

Refer to the fair value hierarchy explanation – Level 1, 2 and 3 (page 385)

•

Financ

ial

instruments held at fair value

–

Debt securit

ies – asset-backed secur

ies:

Asset-backed securit

ies are valued based on external pr

ices obtained from

consensus pric

ing prov

iders, broker quotes, recent trades, arrangers’ quotes, etc. Where an observable price is available for

a given security, it is classif

ied as Level 2. In

instances where third-party prices are not available or reliable, the security is

classif

ied as Level 3. The fa

ir value of Level 3 securit

ies

is estimated using market standard cash ﬂow models with input

parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable

securit

ies w

ith sim

ilar v

intage, collateral type, and credit ratings

–

Debt securit

ies

in issue:

These debt securit

ies relate to structured notes

issued by the Group. Where independent market

data is available through pric

ing vendors and broker sources these pos

ions are class

ied as Level 2. Where such l

iqu

external prices are not available, valuations of these debt securit

ies are

impl

ied us

ing input parameters such as bond

spreads and credit spreads, and are classif

ied as Level 3. These

input parameters are determined with reference to the

same issuer (if available) or proxies from comparable issuers or assets

–

Derivat

ives:

Derivat

ive products are class

ied as Level 2

if the valuation of the product is based upon input parameters

which are observable from independent and reliable market data sources. Derivat

ive products are class

ied as Level 3

there are sign

iﬁcant valuat

ion input parameters which are unobservable in the market, such as products where the

performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options

based on the performance of two or more underlying ind

ices and

interest rate products with quanto payouts. In most cases

these unobservable correlation parameters cannot be impl

ied from the market, and methods such as h

istor

ical analys

and comparison with histor

ical levels or other benchmark data must be employed

–

Equity shares – private equity:

The majority of pr

ivate equity unlisted investments are valued based on earning multiples

– Price-to-Earnings (P/E) or enterprise value to earnings before income tax, depreciat

ion and amort

isat

ion (EV/EBITDA)

ratios – of comparable listed companies. The two primary inputs for the valuation of these investments are the actual or

forecast earnings of the investee companies and earning multiples for the comparable listed companies. To ensure

comparabil

ity between these unquoted

investments and the comparable listed companies, appropriate adjustments are

also applied (for example, liqu

ity and size) in the valuation. In circumstances where an investment does not have direct

comparables or where the multiples for the comparable companies cannot be sourced from reliable external sources,

alternative valuation techniques (for example, discounted cash ﬂow model or net asset value (“NAV”)or option pric

ing

model), which use predominantly unobservable inputs or Level 3 inputs, may be applied. Even though earning multiples for

the comparable listed companies can be sourced from third-party sources (for example, Bloomberg), and those inputs can

be deemed Level 2 inputs, all unlisted investments (excluding those where observable inputs are available, for example,

over-the-counter (OTC) prices) are classif

ied as Level 3 on the bas

is that the valuation methods involve judgements ranging

from determin

ing comparable compan

ies to discount rates where the discounted cash ﬂow method is applied

–

Loans and advances:

These primar

ily

include loans in the FM Bond and Loan Syndicat

ion bus

iness which were not fully

syndicated as of the balance sheet date and other ﬁnanc

ing transact

ions with

in F

inanc

ial Markets, and loans and

advances includ

ing reverse repurchase agreements that do not have SPPI cashﬂows or are managed on a fa

ir value basis.

These loans are generally bilateral in nature and, where available, their valuation is based on observable clean sales

transactions prices or market observable spreads. If observable credit spreads are not available, proxy spreads based on

comparables with sim

ilar cred

it grade, sector and region, are used. Where observable transaction prices, credit spreads

and market standard proxy methods are available, these loans are classif

ied as Level 2. Where there are no recent

transactions or comparables, these loans are classif

ied as Level 3

–

Other debt securit

ies:

These debt securit

ies

include convertible bonds, corporate bonds, credit and structured notes.

Where quoted prices are available through pric

ing vendors, brokers or observable trad

ing activ

ies from liqu

id markets,

these are classif

ied as Level 2 and valued us

ing such quotes. Where there are sign

iﬁcant valuat

ion inputs which are

unobservable in the market, due to ill

iqu

id trading or the complexity of the product, these are classif

ied as Level 3. The

valuations of these debt securit

ies are

impl

ied us

ing input parameters such as bond spreads and credit spreads. These

input parameters are determined with reference to the same issuer (if available) or proxied from comparable issuers or

assets

•

Financ

ial

instruments held at amortised cost

The following sets out the Group’s basis for establish

ing fa

ir values of amortised cost ﬁnanc

ial

instruments and their

classif

icat

ion between Levels 1, 2 and 3. As certain categories of ﬁnanc

ial

instruments are not actively traded, there is a

sign

iﬁcant level of management judgement

involved in calculating the fair values:

–

Cash and balances at central banks:

The fair value of cash and balances at central banks is their carrying amounts

–

Debt securit

ies

in issue, subordinated liab

ies and other borrowed funds:

The aggregate fair values are calculated

based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash ﬂow

model is used based on a current market related yield curve appropriate for the remain

ing term to matur

ity

–

Deposits and borrowings:

The estimated fair value of deposits with no stated maturity is the amount repayable on

demand. The estimated fair value of ﬁxed interest-bearing deposits and other borrowings without quoted market prices is

based on discounted cash ﬂows using the prevail

ing market rates for debts w

ith a sim

ilar Cred

it Risk and remain

ing

maturity

384

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

–

Investment securit

ies:

For investment securit

ies that do not have d

irectly observable market values, the Group util

ises a

number of valuation techniques to determine fair value. Where available, securit

ies are valued us

ing input proxies from the

same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies from

a different underlying (for example, a sim

ilar bond but us

ing spreads for a particular sector and rating). Certain instruments

cannot be proxies as set out above, and in such cases the posit

ions are valued us

ing non-market observable inputs. This

includes those instruments held at amortised cost and predominantly relates to asset-backed securit

ies. The fa

ir value for

such instruments is usually proxies from internal assessments of the underlying cash ﬂows

–

Loans and advances to banks and customers:

For loans and advances to banks, the fair value of ﬂoating rate placements

and overnight deposits is their carrying amounts. The estimated fair value of ﬁxed interest-bearing deposits is based on

discounted cash ﬂows using the prevail

ing money market rates for debts w

ith a sim

ilar Cred

it Risk and remain

ing matur

ity.

The Group’s loans and advances to customers’ portfolio is well divers

iﬁed by geography and

industry. Approximately a

quarter of the portfolio re-prices with

in one month, and approx

imately half re-prices with

in 12 months. Loans and advances

are presented net of provis

ions for

impa

irment. The fa

ir value of loans and advances to customers with a residual maturity

of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a

residual maturity of more than one year represents the discounted amount of future cash ﬂows expected to be received,

includ

ing assumpt

ions relating to prepayment rates and Credit Risk. Expected cash ﬂows are discounted at current market

rates to determine fair value. The Group has a wide range of ind

idual instruments with

its loans and advances portfolio

and as a result provid

ing quant

icat

ion of the key assumptions used to value such instruments is impract

ical

–

Other assets:

Other assets comprise primar

ily of cash collateral and trades pend

ing settlement. The carrying amount of

these ﬁnancial

instruments is considered to be a reasonable approximat

ion of fa

ir value as they are either short-term in

nature or re-price to current market rates frequently

Fair value adjustments

When establish

ing the ex

it price of a ﬁnanc

ial

instrument using a valuation technique, the Group considers adjustments to the

modelled price which market partic

ipants would make when pr

ing that

instrument. The main valuation adjustments

(described further below) in determin

ing fa

ir value for ﬁnanc

ial assets and ﬁnancial l

iab

ies are as follows:

01.01.22

$mill

ion

Movement

during the year

$mill

ion

31.12.22

$mill

ion

01.01.21

$mill

ion

Movement

during the year

$mill

ion

31.12.21

$mill

ion

Bid-offer valuation adjustment

101

118

103

(2)

101

Credit valuation adjustment

165

171

189

(24)

165

Debit valuation adjustment

(70)

(42)

(112)

(55)

(15)

(70)

Model valuation adjustment

(2)

–

Funding valuation adjustment

–

(5)

–

Other fair value adjustments

(12)

Total

221

249

279

(58)

221

Income deferrals

Day 1 and other deferrals

147

186

138

147

Total

147

186

138

147

Note: Bracket represents an asset and credit to the income statement

•

Bid-offer valuation adjustment:

Generally, market parameters are marked on a mid-market basis in the revaluation systems,

and a bid-offer valuation adjustment is required to quantify the expected cost of neutralis

ing the bus

iness’ posit

ions through

dealing away in the market, thereby bring

ing long pos

ions to b

id and short posit

ions to offer. The methodology to calculate

the bid-offer adjustment for a derivat

ive portfol

io involves netting between long and short posit

ions and the group

ing of risk

by strike and tenor based on the hedging strategy where long posit

ions are marked to b

id and short posit

ions marked to offer

in the systems

•

Credit valuation adjustment (CVA):

The Group accounts for CVA against the fair value of derivat

ive products. CVA

is an

adjustment to the fair value of the transactions to reﬂect the possib

ity that our counterparties may default and we may not

receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market

partic

ipant would

include when deriv

ing a purchase pr

ice to acquire our exposures. CVA is calculated for each subsid

iary, and

with

in each ent

ity for each counterparty to which the entity has exposure and takes account of any collateral we may hold.

The Group calculates the CVA by using estimates of future posit

ive exposure, market-

impl

ied probab

ity of default (PD) and

recovery rates. Where market-impl

ied data

is not readily available, we use market-based proxies to estimate the PD. Wrong-

way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty, and

the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures the

uncertaint

ies assoc

iated with wrong-way risk in the Group’s Prudential Valuation Adjustments framework

385

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

•

Debit valuation adjustment (DVA):

The Group calculates DVA adjustments on its derivat

ive l

iab

ies to reﬂect changes

in its

own credit standing. The Group’s DVA adjustments will increase if its credit standing worsens and conversely, decrease if its

credit standing improves. For derivat

ive l

iab

ies, a DVA adjustment

is determined by applying the Group’s probabil

ity of

default to the Group’s negative expected exposure against the counterparty. The Group’s probabil

ity of default and loss

expected in the event of default is derived based on bond and CDS spreads associated with the Group’s issuances and

market standard recovery levels. The expected exposure is modelled based on the simulat

ion of the underly

ing risk factors

over the expected life of the deal. This simulat

ion methodology

incorporates the collateral posted by the Group and the

effects of master netting agreements

•

Model valuation adjustment:

Valuation models may have pric

ing deﬁcienc

ies or lim

itat

ions that require a valuation

adjustment. These pric

ing deﬁcienc

ies or lim

itat

ions arise due to the choice, implementat

ion and cal

ibrat

ion of the pr

ing

model

•

Funding valuation adjustment (FVA):

The Group makes FVA adjustments against derivat

ive products,

includ

ing embedded

derivat

ives. FVA reﬂects an est

imate of the adjustment to its fair value that a market partic

ipant would make to

incorporate

funding costs or beneﬁts that could arise in relation to the exposure. FVA is calculated by determin

ing the net expected

exposure at a counterparty level and then applying a funding rate to those exposures that reﬂect the market cost of funding.

The FVA for uncollateralised (includ

ing part

ially collateralised) derivat

ives

incorporates the estimated present value of the

market funding cost or beneﬁt associated with funding these transactions

•

Other fair value adjustments:

The Group calculates the fair value on the interest rate callable products by calibrat

ing to a set

of market prices with differ

ing matur

ity, expiry and strike of the trades

•

Day one and other deferrals:

In certain circumstances the in

ial fair value is based on a valuation technique which differs to

the transaction price at the time of in

ial recognit

ion. However, these ga

ins can only be recognised when the valuation

technique used is based primar

ily on observable market data. In those cases where the

ially recognised fair value is based

on a valuation model that uses inputs which are not observable in the market, the difference between the transaction price

and the valuation model is not recognised immed

iately

in the income statement. The difference is amortised to the income

statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primar

ily

represent adjustments taken to reﬂect the specif

ic terms and cond

ions of certa

in derivat

ive contracts wh

ich affect the

terminat

ion value at the measurement date

In addit

ion, the Group calculates own cred

it adjustment (OCA) on its issued debt designated at fair value, includ

ing structured

notes, in order to reﬂect changes in its own credit standing. Issued debt is discounted util

ing the spread at which sim

ilar

instruments would be issued or bought back at the measurement date as this reﬂects the value from the perspective of a

market partic

ipant who holds the

ident

ical

item as an asset. OCA measures the difference between the fair value of issued debt

as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads from

incept

ion date to the measurement date. Under IFRS 9 the change

in the OCA component is reported under other

comprehensive income. The Group’s OCA reserve will increase if its credit standing worsens in comparison to the incept

ion of

the trade and, conversely, decrease if its credit standing improves. The Group’s OCA reserve will reverse over time as its liab

ies

mature.

In the fourth quarter of 2022, the Group implemented reﬁnements to its methodology for the valuation of structured notes, to

align with evolving market practice. Previously, the structured note spread was split into a market level of funding component

(recorded in the Consolidated income statement) and an id

iosyncrat

ic own credit component (recorded in the Consolidated

statement of other comprehensive income). The reﬁnement is to record all prospective movements in the spreads over the

benchmark rate of the host debt instrument through Other Comprehensive income, as changes to the funding component

are

considered to be integral to the issuer’s own credit risk. The funding valuation adjustment in relation to the embedded

derivat

ive component of the structured notes w

ill continue to be recorded in the Consolidated income statement.

The impact of this change in estimate, which took effect prospectively from 1 October 2022, was a loss of $13 mill

ion recorded

the Consolidated statement of other comprehensive income, which would have been recorded in the Consolidated income

statement under the previous methodology. The revised approach is expected to result in a more consistent own credit

valuation with peer banks. The net life-to-date gains previously recorded in the Consolidated income statement of $219 mill

ion

from incept

ion of the structured notes to the effect

ive date of this change in estimate in relation to the market level of funding

for the host debt instrument are expected to reverse in the Group’s Consolidated statement of other comprehensive income as

the exist

ing portfol

io matures, unless the structured notes are redeemed or otherwise derecognised earlier.. This net life-to-date

gain of $220 mill

ion

includes a gain of $244 mill

ion recorded

in the Consolidated income statement for 2022 (2021: $33 mill

ion

gain).

Fair value hierarchy – ﬁnanc

ial

instruments held at fair value

Assets and liab

ies carr

ied at fair value or for which fair values are disclosed have been classif

ied

into three levels according to

the observabil

ity of the s

ign

iﬁcant

inputs used to determine the fair values. Changes in the observabil

ity of s

ign

iﬁcant valuat

ion

inputs during the reporting period may result in a transfer of assets and liab

ies w

ith

in the fa

ir value hierarchy. The Group

recognises transfers between levels of the fair value hierarchy when there is a sign

iﬁcant change

in either its princ

ipal market or

the level of observabil

ity of the

inputs to the valuation techniques as at the end of the reporting period.

•

Level 1:

Fair value measurements are those derived from unadjusted quoted prices in active markets for ident

ical assets or

liab

ies

•

Level 2:

Fair value measurements are those with quoted prices for sim

ilar

instruments in active markets or quoted prices for

ident

ical or s

ilar

instruments in inact

ive markets and ﬁnancial

instruments valued using models where all sign

iﬁcant

inputs

are observable

•

Level 3:

Fair value measurements are those where inputs which could have a sign

iﬁcant effect on the

instrument’s valuation

are not based on observable market data

386

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

The following tables show the classif

icat

ion of ﬁnanc

ial

instruments held at fair value into the valuation hierarchy:

Assets

Level 1

$mill

ion

Level 2

$mill

ion

Level 3

$mill

ion

Total

$mill

ion

Financ

ial

instruments held at fair value through proﬁt or loss

Loans and advances to banks

–

955

976

Loans and advances to customers

–

4,741

1,805

6,546

Reverse repurchase agreements and other sim

ilar secured lend

ing

62,490

1,998

64,491

Debt securit

ies and other el

ible b

ills

14,702

14,707

1,153

30,562

Of which:

Issued by Central banks & Governments

14,086

4,734

–

18,820

Issued by corporates other than ﬁnancial

inst

itut

ions¹

3,452

517

4,060

Issued by ﬁnancial

inst

itut

ions¹

525

6,521

636

7,682

Equity shares

3,024

182

3,230

Derivat

ive ﬁnancial

instruments

892

62,781

63,717

Of which:

Foreign exchange

139

54,020

54,172

Interest rate

7,351

7,412

Credit

–

410

411

Equity and stock index options

–

100

Commodity

720

902

–

1,622

Investment securit

ies

Debt securit

ies and other el

ible b

ills

56,401

55,525

–

111,926

Of which:

Issued by Central banks & Governments

45,151

22,171

–

67,322

Issued by corporates other than ﬁnancial

inst

itut

ions

1,775

4,045

–

5,820

Issued by ﬁnancial

inst

itut

ions

9,475

29,309

–

38,784

Equity shares

146

655

808

Other Assets

–

Total ﬁnancial

instruments at 31 December 2022²

75,168

201,230

5,865

282,263

Liab

ies

Financ

ial

instruments held at fair value through proﬁt or loss

Deposits by banks

–

778

288

1,066

Customer accounts

–

10,734

972

11,706

Repurchase agreements and other sim

ilar secured borrow

ing

–

51,706

–

51,706

Debt securit

ies

in issue

–

8,121

451

8,572

Short posit

ions

4,085

2,722

6,847

Derivat

ive ﬁnancial

instruments

642

69,099

121

69,862

Of which:

Foreign exchange

101

56,710

56,823

Interest rate

10,020

10,061

Credit

–

899

941

Equity and stock index options

–

191

246

Commodity

512

1,279

–

1,791

Other liab

ies

–

Total ﬁnancial

instruments at 31 December 2022²

4,727

143,160

1,878

149,765

Includes covered bonds of $8,455 mill

ion, secur

ies

issued by Multilateral Development Banks/International Organisat

ions of $11,438 m

ill

ion and State-owned

agencies and development banks of $9,211 mill

ion

The above table does not include held for sale assets of $3 mill

ion and l

iab

ies of $5 m

ill

ion. These are reported

in Note 21 together with their fair value hierarchy

The fair value of derivat

ives and debt secur

ies

in issue classif

ied as Level 2

in the fair value hierarchy that are subject to complex

modelling techniques is $781 mill

ion.

There were no sign

iﬁcant changes to valuat

ion or levelling approaches during the year 31 December 2022.

There were no sign

iﬁcant transfers of ﬁnancial assets and l

iab

ies measured at fa

ir value between Level 1 and Level 2 during

the year 31 December 2022.

387

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

Assets

Level 1

$mill

ion

Level 2

$mill

ion

Level 3

$mill

ion

Total

$mill

ion

Financ

ial

instruments held at fair value through proﬁt or loss

Loans and advances to banks

–

3,838

3,847

Loans and advances to customers

–

8,596

1,357

9,953

Reverse repurchase agreements and other sim

ilar secured lend

ing

–

78,443

1,566

80,009

Debt securit

ies and other el

ible b

ills

12,057

17,019

349

29,425

Of which:

Issued by Central Banks & Governments

10,731

7,201

–

17,932

Issued by corporates other than ﬁnancial

inst

itut

ions

3,750

111

3,862

Issued by ﬁnancial

inst

itut

ions

1,325

6,068

238

7,631

Equity shares

5,637

186

5,861

Derivat

ive ﬁnancial

instruments

1,066

51,289

52,445

Of which:

Foreign exchange

161

41,577

41,748

Interest rate

6,314

6,376

Credit

–

2,265

2,289

Equity and stock index options

–

133

136

Commodity

896

1,000

–

1,896

Investment securit

ies

Debt securit

ies and other el

ible b

ills

51,298

70,037

121,375

Of which:

Issued by Central Banks & Governments

39,590

24,651

64,281

Issued by corporates other than ﬁnancial

inst

itut

ions

–

1,963

–

1,963

Issued by ﬁnancial

inst

itut

ions

11,708

43,423

–

55,131

Equity shares

227

493

737

Other Assets

–

Total ﬁnancial

instruments at 31 December 2021²

70,285

229,277

4,116

303,678

Liab

ies

Financ

ial

instruments held at fair value through proﬁt or loss

Deposits by banks

–

1,069

283

1,352

Customer accounts

–

8,837

454

9,291

Repurchase agreements and other sim

ilar secured borrow

ing

–

62,388

–

62,388

Debt securit

ies

in issue

–

4,776

821

5,597

Short posit

ions

4,187

2,375

–

6,562

Derivat

ive ﬁnancial

instruments

949

52,356

53,399

Of which:

Foreign exchange

169

41,555

41,727

Interest rate

6,448

6,471

Credit

–

3,084

3,125

Equity and stock index options

–

126

160

Commodity

773

1,143

–

1,916

Other Liab

ies

–

Total ﬁnancial

instruments at 31 December 2021²

5,136

131,807

1,653

138,596

Includes covered bonds of $7,326 mill

ion, secur

ies

issued by Multilateral Development Banks/International Organisat

ions of $12,109 m

ill

ion , and State-owned

agencies and development banks of $19,959 mill

ion

The above table does not include held for sale assets of $43 mill

ion and l

iab

ies of $n

il. These are reported in Note 21 together with their fair value hierarchy

The fair value of derivat

ives and debt secur

ies

in issue classif

ied as Level 2

in the fair value hierarchy that are subject to complex

modelling techniques is $684 mill

ion.

388

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

Fair value hierarchy – ﬁnanc

ial

instruments measured at amortised cost

The following table shows the carrying amounts and incorporates the Group’s estimate of fair values of those ﬁnanc

ial assets

and liab

ies not presented on the Group’s balance sheet at fa

ir value. These fair values may be different from the actual

amount that will be received or paid on the settlement or maturity of the ﬁnanc

ial

instrument. For certain instruments, the fair

value may be determined using assumptions for which no observable prices are available.

Carrying value

$mill

ion

Fair value

Level 1

$mill

ion

Level 2

$mill

ion

Level 3

$mill

ion

Total

$mill

ion

Assets

Cash and balances at central banks¹

58,263

–

58,263

–

58,263

Loans and advances to banks

39,519

–

39,488

–

39,488

of which – reverse repurchase agreements and

other sim

ilar secured lend

ing

978

–

924

–

924

Loans and advances to customers

310,647

–

58,663

251,560

310,223

of which – reverse repurchase agreements and

other sim

ilar secured lend

ing

24,498

–

15,727

8,911

24,638

Investment securit

ies²

59,714

–

56,444

56,469

Other assets¹

39,295

–

39,295

–

39,295

Assets held for sale

1,388

344

946

1,388

At 31 December 2022

508,826

344

253,099

251,683

505,126

Liab

ies

Deposits by banks

28,789

–

28,813

–

28,813

Customer accounts

461,677

–

461,665

–

461,665

Repurchase agreements and other sim

ilar

secured borrowing

2,108

–

2,108

–

2,108

Debt securit

ies

in issue

61,242

24,624

36,148

–

60,772

Subordinated liab

ies and other borrowed funds

13,715

12,445

385

–

12,830

Other liab

ies¹

42,915

–

42,914

42,915

Liab

ies held for sale

1,230

398

832

–

1,230

At 31 December 2022

611,676

37,467

572,865

610,333

Carrying value

$mill

ion

Fair value

Level 1

$mill

ion

Level 2

$mill

ion

Level 3

$mill

ion

Total

$mill

ion

Assets

Cash and balances at central banks¹

72,663

–

72,663

–

72,663

Loans and advances to banks

44,383

–

44,383

–

44,383

of which – reverse repurchase agreements and

other sim

ilar secured lend

ing

1,079

–

1,079

–

1,079

Loans and advances to customers

298,468

–

42,136

256,289

298,425

of which – reverse repurchase agreements and

other sim

ilar secured lend

ing

7,331

–

3,764

3,567

7,331

Investment securit

ies²

41,325

–

41,864

–

41,864

Other assets¹

40,068

–

40,067

40,068

Assets held for sale

–

At 31 December 2021

496,959

–

241,113

256,342

497,455

Liab

ies

Deposits by banks

30,041

–

30,041

–

30,041

Customer accounts

474,570

–

474,645

–

474,645

Repurchase agreements and other sim

ilar

secured borrowing

3,260

–

3,260

–

3,260

Debt securit

ies

in issue

61,293

26,073

35,503

–

61,576

Subordinated liab

ies and other borrowed funds

16,646

16,811

519

–

17,330

Other liab

ies¹

43,432

–

43,431

43,432

Liab

ies held for sale

–

At 31 December 2021

629,242

42,884

587,399

630,284

The carrying amount of these ﬁnanc

ial

instruments is considered to be a reasonable approximat

ion of fa

ir value as they are short-term in nature or reprice to

current market rates frequently

Includes Government bonds and Treasury bills of $17,943 mill

ion at 31 December 2022 and $17,153 m

ill

ion at 31 December 2021

389

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

Loans and advances to customers by client segment

2022

Carrying value

Fair value

Stage 3

$mill

ion

Stage 1 and

stage 2

$mill

ion

Total

$mill

ion

Stage 3

$mill

ion

Stage 1 and

stage 2

$mill

ion

Total

$mill

ion

Corporate, Commercial &

Institut

ional Bank

ing

2,481

137,150

139,631

2,525

137,187

139,712

Consumer, Private & Business Banking

677

130,278

130,955

685

131,679

132,364

Ventures

–

698

–

696

Central & other items

230

39,133

39,363

230

37,221

37,451

At 31 December 2022

3,388

307,259

310,647

3,440

306,783

310,223

2021 (Restated)²

Carrying value

Fair value

Stage 3

$mill

ion

Stage 1 and

stage 2

$mill

ion

Total

$mill

ion

Stage 3

$mill

ion

Stage 1 and

stage 2

$mill

ion

Total

$mill

ion

Corporate, Commercial &

Institut

ional Bank

ing

2,659

136,742

139,401

2,750

136,463

139,213

Consumer, Private & Business Banking

779

135,651

136,430

780

135,782

136,562

Ventures

–

Central & other items

–

22,549

–

22,562

At 31 December 2021

3,438

295,030

298,468

3,530

294,895

298,425

Loans and advances includes reverse repurchase agreements and other sim

ilar secured lend

ing: carrying value $24,498 mill

ion and fa

ir value $24,638 mill

ion

(2021: $7,331 mill

ion and $7,331 m

ill

ion respect

ively)

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment from

January 2022. Prior period has been restated

390

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

Fair value of ﬁnanc

ial

instruments

Level 3 Summary and sign

iﬁcant unobservable

inputs

The following table presents the Group’s primary Level 3 ﬁnanc

ial

instruments which are held at fair value. The table also

presents the valuation techniques used to measure the fair value of those ﬁnanc

ial

instruments, the sign

iﬁcant unobservable

inputs, the range of values for those inputs and the weighted average of those inputs:

Instrument

Value as at

31 December 2022

Princ

ipal valuat

ion

technique

Sign

iﬁcant unobservable

inputs

Range

Weighted

average

Assets

$mill

ion

Liab

ies

$mill

ion

Loans and advances to banks

–

Discounted cash ﬂows

Price/yield

N/A

Credit spreads

2.9%

Loans and advances to customers

1,805

–

Discounted cash ﬂows

Price/yield

0.3% – 18.2%

5.3%

Recovery rates

5.0% – 100%

90.5%

Reverse repurchase agreements

and other sim

ilar secured lend

ing

1,998

–

Discounted cash ﬂows

Repo curve

2.3% – 8.0%

6.2%

Price/yield

1.9%–7.2%

6.0%

Debt securit

ies, alternat

ive tier one

and other elig

ible secur

ies

1,152

–

Discounted cash ﬂows

Price/yield

3.1% – 48.5%

7.1%

Recovery rates

0.0% – 1.0%

0.2%

Government bonds and

treasury bills

–

Discounted cash ﬂows

Price/yield

N/A

Asset-backed securit

ies

–

Discounted cash ﬂows

Price/yield

6.8%

Equity shares (includes private

equity investments)

837

–

Comparable pric

ing/y

ield

EV/EBITDA multiples

7.0x – 13.1x

11.0x

EV/Revenue multiples

8.2x – 23.2x

12.9x

P/E multiples

13.4x – 29.7x

17.6x

P/B multiples

0.3x – 3.3x

1.3x

P/S multiples

2.1x – 2.2x

2.2x

Liqu

ity discount

10.0% – 29.7%

17.5%

Discounted cash ﬂows

Discount rates

7.5% – 16.4%

9.4%

Option pric

ing model

Equity value based on

EV/Revenue multiples

4.8x – 76.1x

32.9x

Equity value based on

EV/EBITDA multiples

2.6x

Equity value based

on volatil

ity

60.0%

Other Assets

–

NAV

N/A

Derivat

ive ﬁnancial

instruments

of which:

Foreign exchange

Option pric

ing model

Foreign exchange option

impl

ied volat

ity

(21.0)% – 21.0%

(2.7)%

Discounted cash ﬂows

Foreign exchange curves

(4.6)% – 81.8%

15.9%

Interest rate

Discounted cash ﬂows

Interest rate curves

(2.1)% – 50.2%

10.6%

Option pric

ing model

Bond option impl

ied

volatil

ity

N/A

Credit

Discounted cash ﬂows

Credit spreads

0.1% – 2.3%

1.4%

Price/yield

7.2% – 9.7%

7.2%

Equity and stock index

Internal pric

ing model

Equity correlation

30.0% – 96.0%

67.0%

Equity-FX correlation

(70.0)% – 85.0%

37.0%

Deposits by banks

–

288

Discounted cash ﬂows

Credit spreads

0.9% – 3.4%

1.8%

Price/yield

6.0%

Customer accounts

–

972

Discounted cash ﬂows

Credit spreads

0.9% – 19.1%

10.3%

Internal pric

ing model

Equity correlation

30.0% – 96.0%

67.0%

Equity-FX correlation

(70.0)% – 85.0%

37.0%

Discounted cash ﬂows

Interest rate curves

N/A

Price/yield

3.1% – 22.9%

17.8%

Debt securit

ies

in issue

–

451

Discounted cash ﬂows

Credit Spreads

0.3% – 7.0%

4.7%

Price/Yield

6.8% – 12.4%

9.1%

Internal pric

ing model

Equity-Equity Correlation

30.0% – 96.0%

67.0%

Equity-FX Correlation

(70.0)% – 85.0%

37.0%

Short posit

ions

–

Discounted cash ﬂows

Price/yield

6.8%

Other Liab

ies

–

Comparable pric

ing/y

ield

EV/EBITDA multiples

4.2x –9.0x

6.1x

Total

5,865

1,878

The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group’s Level 3 ﬁnanc

ial

instruments as at 31

December 2022. The ranges of values used are reﬂective of the underlying characterist

ics of these Level 3 ﬁnancial

instruments based on the market condit

ions at

the balance sheet date. However, these ranges of values may not represent the uncertainty in fair value measurements of the Group’s Level 3 ﬁnanc

ial

instruments

Weighted average for non-derivat

ive ﬁnancial

instruments has been calculated by weight

ing

inputs by the relative fair value. Weighted average for derivat

ives

has been provided by weight

ing

inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful

ind

icator

391

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

Level 3 summary and sign

iﬁcant unobservable

inputs

continued

Instrument

Value as at

31 December 2021

Princ

ipal valuat

ion

technique

Sign

iﬁcant unobservable

inputs

Range

Weighted

average

Assets

$mill

ion

Liab

ies

$mill

ion

Loans and advances to banks

–

Discounted cash ﬂows

Recovery rates

87.3%–100%

93.6%

Loans and advances

to customers

1,357

–

Discounted cash ﬂows

Price/yield

0.2% – 11.8%

3.1%

Recovery rates

10.6% – 100%

87.8%

Reverse repurchase

agreements and other sim

ilar

secured lending

1,566

–

Discounted cash ﬂows

Repo curve

0.3%–3.0%

2.4%

Debt securit

ies, alternat

ive tier

one and other elig

ible secur

ies

349

–

Discounted cash ﬂows

Price/yield

5.1% – 12.4%

7.5%

Recovery rates

0.01% – 1.0%

0.2%

Government bonds and

treasury bills

–

Discounted cash ﬂows

Price/yield

2.7% – 5.5%

3.7%

Asset-backed securit

ies

–

Discounted cash ﬂows

Price/yield

N/A

Equity shares (includes private

equity investments)

679

–

Comparable pric

ing/

yield

EV/EBITDA multiples

6.1x–15.3x

8.6x

EV/Revenue multiples

10.1x

P/E multiples

12.6x–25.3x

14.9x

P/B multiples

0.4x–3.3x

1.4x

P/S multiples

1.8x–2.6x

1.8x

Liqu

ity discount

7.9%–29.2%

16.5%

Discounted cash ﬂows

Discount rates

6.0%–17.4%

8.6%

Option pric

ing model

EV/Revenue multiples

4.0x–85.5x

12.1x

Volatil

ity

55.0%–65.0%

60.3%

Other Assets

–

NAV

N/A

Derivat

ive ﬁnancial

instruments

of which:

Foreign exchange

Option pric

ing model

Foreign exchange

option impl

ied volat

ity

3.1% – 6.1%

5.1%

Discounted cash ﬂows

Foreign exchange

curves

(16.4)% – 57.3%

9.0%

Interest rate

Discounted cash ﬂows

Interest rate curves

(16.4)%–18.8%

5.0%

Option pric

ing model

Bond option impl

ied

volatil

ity

N/A

Credit

Discounted cash ﬂows

Credit spreads

0.1%–11.5%

1.0%

Price/yield

5.9% –7.3%

6.6%

Equity and stock index

Internal pric

ing model

Equity correlation

8.0% – 96.0%

70.0%

Equity-FX correlation

(70.0)%–85.0%

(33.0)%

Deposits by banks

–

283

Discounted cash ﬂows

Credit spreads

0.4% – 3.0%

1.4%

Price/yield

6.8%–8.3%

7.5%

Customer accounts

–

454

Discounted cash ﬂows

Credit spreads

1.0% – 2.0%

1.2%

Interest rate curves

0.9%–5.6%

4.7%

Price/yield

8.9%–12.1%

10.1%

Debt securit

ies

in issue

–

821

Discounted cash ﬂows

Credit spreads

0.9%–2.2%

1.0%

Interest rate curves

0.9% – 5.6%

4.9%

Internal pric

ing model

Equity correlation

8.0% – 96.0%

70.0%

Equity-FX correlation

(70.0)%–85.0%

(33.0)%

Short posit

ion

–

N/A

Other Liab

ies

–

Comparable pric

ing/

yield

EV/EBITDA multiples

3.07x–9.95x

6.84x

Total

4,116

1,653

The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group’s Level 3 ﬁnanc

ial

instruments as at 31

December 2021. The ranges of values used are reﬂective of the underlying characterist

ics of these Level 3 ﬁnancial

instruments based on the market condit

ions at

the balance sheet date. However, these ranges of values may not represent the uncertainty in fair value measurements of the Group’s Level 3 ﬁnanc

ial

instruments

Weighted average for non-derivat

ive ﬁnancial

instruments has been calculated by weight

ing

inputs by the relative fair value. Weighted average for derivat

ives

has been provided by weight

ing

inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful

ind

icator

392

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

Level 3 Summary and sign

iﬁcant unobservable

inputs

continued

The following section describes the sign

iﬁcant unobservable

inputs ident

iﬁed

in the valuation technique table:

•

Comparable price/yield

is a valuation methodology in which the price of a comparable instrument is used to estimate the

fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash ﬂows in

a discounted cash ﬂow model. Valuation using comparable instruments can be done by calculating an impl

ied y

ield (or

spread over a liqu

id benchmark) from the pr

ice of a comparable instrument, then adjust

ing that y

ield (or spread) to derive a

value for the instrument. The adjustment should account for relevant differences in the ﬁnanc

ial

instruments such as maturity

and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument and the

instrument being valued in order to establish the value of the instrument (for example, deriv

ing a fa

ir value for a jun

ior

unsecured bond from the price of a senior secured bond). An increase in price, in isolat

ion, would result

in a favourable

movement in the fair value of the asset. An increase in yield, in isolat

ion, would result

in an unfavourable movement in the fair

value of the asset

•

Correlation

is the measure of how movement in one variable inﬂuences the movement in another variable. An equity

correlation is the correlation between two equity instruments while an interest rate correlation refers to the correlation

between two swap rates

•

Credit spread

represents the addit

ional y

ield that a market partic

ipant would demand for tak

ing exposure to the Credit Risk

of an instrument

•

Discount rate

refers to the rate of return used to convert expected cash ﬂows into present value

•

Equity-FX correlation

is the correlation between equity instrument and foreign exchange instrument

•

EV/EBITDA multiple

is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciat

ion and Amort

isat

ion

(EBITDA). EV is the aggregate market capital

isat

ion and debt minus the cash and cash equivalents. An increase in EV/EBITDA

multiple will result in a favourable movement in the fair value of the unlisted ﬁrm

•

EV/Revenue multiple

is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a

favourable movement in the fair value of the unlisted ﬁrm

•

Foreign exchange curves

is the term structure for forward rates and swap rates between currency pairs over a specif

ied

period

•

Net asset value (NAV)

is the value of an entity’s assets after deducting any liab

ies

•

Interest rate curves

is the term structure of interest rates and measure of future interest rates at a particular point in time

•

Liqu

ity discounts in the valuation of unlisted investments

are primar

ily appl

ied to the valuation of unlisted ﬁrms’

investments to reﬂect the fact that these stocks are not actively traded. An increase in liqu

ity discount will result in an

unfavourable movement in the fair value of the unlisted ﬁrm

•

Price-Earnings (P/E) multiple

is the ratio of the market value of the equity to the net income after tax. An increase in P/E

multiple will result in a favourable movement in the fair value of the unlisted ﬁrm

•

Price-Book (P/B) multiple

is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will

result in a favourable movement in the fair value of the unlisted ﬁrm

•

Price-Sales (P/S) multiple

is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a

favourable movement in the fair value of the unlisted ﬁrm

•

Recovery rate

is the expectation of the rate of return resulting from the liqu

idat

ion of a particular loan. As the probabil

ity of

default increases for a given instrument, the valuation of that instrument will increas

ingly reﬂect

its expected recovery level

assuming default. An increase in the recovery rate, in isolat

ion, would result

in a favourable movement in the fair value of the

loan

•

Repo curve

is the term structure of repo rates on repos and reverse repos at a particular point in time

•

Volatil

ity

represents an estimate of how much a particular instrument, parameter or index will change in value over time.

Generally, the higher the volatil

ity, the more expens

ive the option will be

393

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

Level 3 movement tables – ﬁnancial assets

The table below analyses movements in Level 3 ﬁnanc

ial assets carr

ied at fair value.

Assets

2022

Held at fair value through proﬁt or loss

Derivat

ive

ﬁnancial

instruments

$mill

ion

Investment securit

ies

Total

$mill

ion

Loans and

advances

to banks

$mill

ion

Loans and

advances

to customers

$mill

ion

Reverse

repurchase

agreements

and other

sim

ilar

secured

lending

$mill

ion

Debt

securit

ies,

alternative

tier one

and other

elig

ible b

ills

$mill

ion

Equity

$mill

ion

Other

Assets

$mill

ion

Debt

securit

ies,

alternative

tier one

and other

elig

ible b

ills

$mill

ion

Equity

$mill

ion

At 01 January 2022

1,357

1,566

349

186

493

4,116

Total (losses)/gains

recognised in

income statement

(16)

(132)

–

(105)

Net interest income

–

Net trading income

(16)

(132)

–

(105)

Other operating income

–

Total (losses)/gains

recognised in other

comprehensive income

(OCI)

–

(1)

(8)

(9)

Fair value through

OCI reserve

–

(1)

(2)

Cash ﬂow hedge reserve

–

Exchange difference

–

(7)

Purchases

1,605

6,438

1,063

118

–

166

9,455

Issues

Sales

(30)

(237)

(5,484)

(342)

(10)

(99)

–

(6)

(6,218)

Settlements

(19)

(877)

(524)

(1)

–

(80)

(39)

–

(1,540)

Transfers out

–

(160)

–

(17)

(29)

–

(206)

Transfers in

249

–

372

At 31 December 2022

1,805

1,998

1,153

182

–

655

5,865

Total unrealised gains/

(losses) recognised in

the income statement,

with

in net trad

ing income,

relating to change in

fair value of assets held

at 31 December 2022

–

(2)

–

Transfers out includes loans and advances, other assets and derivat

ive ﬁnancial

instruments where the valuation parameters became observable during the

period and were transferred to Level 1 and Level 2

Transfers in primar

ily relate to loans and advances, debt secur

ies, alternat

ive tier one and other elig

ible b

ills and derivat

ive ﬁnancial

instruments where the

valuation parameters become unobservable during the year

394

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

Level 3 movement tables – ﬁnancial assets

continued

The table below analyses movements in Level 3 ﬁnanc

ial assets carr

ied at fair value.

Assets

2021

Held at fair value through proﬁt or loss

Derivat

ive

ﬁnancial

instruments

$mill

ion

Investment securit

ies

Total

$mill

ion

Loans and

advances

to banks

$mill

ion

Loans and

advances

to customers

$mill

ion

Reverse

repurchase

agreements

and other

sim

ilar

secured

lending

$mill

ion

Debt

securit

ies,

alternative

tier one

and other

elig

ible b

ills

$mill

ion

Equity

$mill

ion

Other

Assets

$mill

ion

Debt

securit

ies,

alternative

tier one

and other

elig

ible b

ills

$mill

ion

Equity

$mill

ion

At 01 January 2021

200

718

1,064

258

279

–

381

2,948

Total gains/(losses)

recognised in

income statement

(97)

(24)

(30)

–

(114)

Net interest income

–

Net trading income

(97)

(23)

(30)

–

(113)

Other operating income

–

(1)

–

(1)

Total gains recognised in

other comprehensive

income (OCI)

–

Fair value through

OCI reserve

–

Cash ﬂow hedge reserve

–

Exchange difference

–

(3)

(2)

(5)

Purchases

1,281

4,973

387

–

123

6,871

Issues

Sales

–

(687)

(4,392)

(226)

(55)

–

(32)

–

(9)

(5,401)

Settlements

(201)

(302)

(81)

(70)

–

(5)

(13)

–

(672)

Transfers out

–

(60)

–

(15)

–

(11)

–

(63)

(149)

Transfers in

–

504

–

569

At 31 December 2021

1,357

1,566

349

186

493

4,116

Total unrealised gains/

(losses) recognised in

the income statement,

with

in net trad

ing income,

relating to change in

fair value of assets held

at 31 December 2021

–

(15)

–

Transfers out include loans and advances, derivat

ive ﬁnancial

instruments and equity shares where the valuation parameters became observable during the

period and were transferred to Level 1 and Level 2

Transfers in primar

ily relate to loans and advances, debt secur

ies, alternat

ive tier one and other elig

ible b

ills, derivat

ive ﬁnancial

instruments and other assets

where the valuation parameters become unobservable during the year

395

Standard Chartered

– Annual Report 2022

Financ

ial statements

13. Financ

ial

instruments

continued

Level 3 movement tables – ﬁnancial l

iab

ies

2022

Deposits

by banks

$mill

ion

Customer

accounts

$mill

ion

Debt

securit

ies

in issue

$mill

ion

Derivat

ive

ﬁnancial

instruments

$mill

ion

Short

posit

ions

$mill

ion

Other

liab

ies

$mill

ion

Total

$mill

ion

At 01 January 2022

283

454

821

–

1,653

Total (gains)/losses recognised in income statement

– net trading income

(37)

(82)

(158)

155

(3)

(120)

Issues

447

1,818

815

179

140

–

3,399

Settlements

(400)

(1,266)

(1,066)

(291)

(97)

–

(3,120)

Transfers out

(5)

–

(38)

(23)

–

(66)

Transfers in

–

132

At 31 December 2022

288

972

451

121

1,878

Total unrealised gains recognised in the income

statement, with

in net trad

ing income, relating

to change in fair value of liab

ies held at

31 December 2022

(1)

(17)

(7)

(3)

–

(28)

2021

Deposits

by banks

$mill

ion

Customer

accounts

$mill

ion

Debt

securit

ies

in issue

$mill

ion

Derivat

ive

ﬁnancial

instruments

$mill

ion

Short

posit

ions

$mill

ion

Other

liab

ies

$mill

ion

Total

$mill

ion

At 01 January 2021

146

160

119

–

446

Total losses/(gains) recognised in income statement

– net trading income

(5)

(12)

(23)

–

(32)

Issues

269

803

1,615

166

–

2,853

Settlements

(145)

(365)

(986)

(181)

–

(1,677)

Transfers out

–

(48)

(6)

–

(54)

Transfers in

–

117

At 31 December 2021

283

454

821

–

1,653

Total unrealised gains recognised in the income

statement, with

in net trad

ing income, relating

to change in fair value of liab

ies held at

31 December 2021

–

(14)

–

(14)

Transfers out during the year primar

ily relate to bank depos

its, debt securit

ies

in issue and derivat

ive ﬁnancial

instruments where the valuation parameters

became observable during the year and were transferred to Level 2 ﬁnanc

ial l

iab

ies

Transfers in during the year primar

ily relate to der

ivat

ive ﬁnancial

instruments, customer accounts and debt securit

ies

in issue where the valuation parameters

become unobservable during the year

396

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

Sensit

ies

in respect of the fair values of Level 3 assets and liab

ies

Sensit

ity analysis is performed on products with sign

iﬁcant unobservable

inputs. The Group applies a 10 per cent increase or

decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations. The

percentage shift is determined by statist

ical analys

is performed on a set of reference prices based on the composit

ion of the

Group’s Level 3 inventory as the measurement date. Favourable and unfavourable changes (which show the balance adjusted

for input change) are determined on the basis of changes in the value of the instrument as a result of varying the levels of the

unobservable parameters. The Level 3 sensit

ity analysis assumes a one-way market move and does not consider offsets for

hedges.

Held at fair value through proﬁt or loss

Fair value through other comprehensive income

Net exposure

$mill

ion

Favourable

changes

$mill

ion

Unfavourable

changes

$mill

ion

Net exposure

$mill

ion

Favourable

changes

$mill

ion

Unfavourable

changes

$mill

ion

Financ

ial

instruments held at fair value

Loans and advances

1,826

1,851

1,758

–

Reverse Repurchase agreements and

other sim

ilar secured lend

ing

1,998

2,013

1,979

–

Asset backed securit

ies

–

Debt securit

ies, alternat

ive tier one and

other elig

ible b

ills

1,152

1,168

1,124

–

Equity shares

182

200

164

655

715

595

Other Assets

–

Derivat

ive ﬁnancial

instruments

(77)

(44)

(109)

–

Customers accounts

(972)

(934)

(1,010)

–

Deposits by banks

(288)

(283)

(293)

–

Repurchase agreements and other

sim

ilar secured borrow

ings

–

Short posit

ions

(40)

(39)

(41)

–

Debt securit

ies

in issue

(451)

(419)

(482)

–

Other Liab

ies

(6)

(5)

(7)

–

At 31 December 2022

3,332

3,517

3,090

655

715

595

Financ

ial

instruments held at fair value

Loans and advances

1,366

1,398

1,328

–

Reverse Repurchase agreements and

other sim

ilar secured lend

ing

1,566

1,579

1,550

–

Asset backed securit

ies

–

Debt securit

ies, alternat

ive tier one and

other elig

ible b

ills

349

366

332

Equity shares

186

205

168

493

541

442

Other Assets

–

Derivat

ive ﬁnancial

instruments

(4)

(16)

–

Customers accounts

(454)

(447)

(461)

–

Deposits by banks

(283)

(278)

(287)

–

Short posit

ions

–

Debt securit

ies

in issue

(821)

(764)

(879)

–

Other Liab

ies

(1)

–

At 31 December 2021

1,930

2,097

1,758

533

582

480

The reasonably possible alternatives could have increased or decreased the fair values of ﬁnanc

ial

instruments held at fair

value through proﬁt or loss and those classif

ied as fa

ir value through other comprehensive income by the amounts disclosed

below.

Financ

ial

instruments

Fair value changes

31.12.22

$mill

ion

31.12.21

$mill

ion

Held at fair value through proﬁt or loss

Possible increase

185

167

Possible decrease

(242)

(172)

Fair value through other comprehensive income

Possible increase

Possible decrease

(60)

(53)

397

Standard Chartered

– Annual Report 2022

Financ

ial statements

14. Derivat

ive ﬁnancial

instruments

Accounting policy

Derivat

ives are ﬁnancial

instruments that derive their value in response to changes in interest rates, ﬁnanc

ial

instrument

prices, commodity prices, foreign exchange rates, credit rating or credit index and ind

ices. Der

ivat

ives are categor

ised as

trading unless they are designated as hedging instruments.

Derivat

ives are

ially recognised and subsequently measured at fair value, with revaluation gains recognised in proﬁt or

loss (except where cash ﬂow or net investment hedging has been achieved, in which case the effective portion of changes in

fair value is recognised with

in other comprehens

ive income).

Fair values may be obtained from quoted market prices in active markets, recent market transactions, and valuation

techniques, includ

ing d

iscounted cash ﬂow models and option pric

ing models, as appropr

iate. Where the in

ially recognised

fair value of a derivat

ive contract

is based on a valuation model that uses inputs which are not observable in the market, it

follows the same in

ial recognit

ion account

ing policy as for other ﬁnanc

ial assets and l

iab

ies. All der

ivat

ives are carr

ied as

assets when fair value is posit

ive and as l

iab

ies when fa

ir value is negative.

Hedge accounting

Under certain condit

ions, the Group may des

ignate a recognised asset or liab

ity, a ﬁrm commitment, highly probable

forecast transaction or net investment of a foreign operation into a formal hedge accounting relationsh

ip w

ith a derivat

ive

that has been entered to manage interest rate and/or foreign exchange risks present in the hedged item. The Group applies

the ‘Phase 1’ hedge accounting requirements of IAS 39 Financ

ial Instruments: Recogn

ion and Measurement and the ‘Phase

2’ amendments to IFRS in respect of interest rate benchmark reform. There are three categories of hedge relationsh

ips:

•

Fair value hedge: to manage the fair value of interest rate and/or foreign currency risks of recognised assets or liab

ies or

ﬁrm commitments

•

Cash ﬂow hedge: to manage interest rate or foreign exchange risk of highly probable future cash ﬂows attributable to a

recognised asset or liab

ity, or a forecasted transaction

•

Net investment hedge: to manage the structural foreign exchange risk of an investment in a foreign operation

The Group formally documents at the incept

ion of the transact

ion the relationsh

ip between hedg

ing instruments and

hedged items, as well as its risk management object

ive and strategy for undertak

ing hedge transactions. This is described in

more detail in the categories of hedges below.

The Group assesses, both at hedge incept

ion and on a quarterly bas

is, whether the derivat

ives des

ignated in hedge

relationsh

ips are h

ighly effective in offsetting changes in fair values or cash ﬂows of hedged items. Hedges are considered to

be highly effective if all the following criter

ia are met:

•

At incept

ion of the hedge and throughout

its life, the hedge is prospectively expected to be highly effective in achiev

ing

offsetting changes in fair value or cash ﬂows attributable to the hedged risk

•

Prospective and retrospective effectiveness should be with a range of 80-125%. This is tested using regression analysis

•

The regression co-efﬁc

ient (R squared), wh

ich measures the correlation between the variables in the regression, is at least

80%

•

In the case of the hedge of a forecast transaction, the transaction must have a high probabil

ity of occurr

ing and must

present an exposure to variat

ions

in cash ﬂows that are expected to affect reported proﬁt or loss. The Group assumes that

any interest rate benchmarks on which hedged item cash ﬂows are based are not altered by IBOR reform

The Group discont

inues hedge account

ing in any of the following circumstances:

•

The hedging instrument is not, or has ceased to be, highly effective as a hedge

•

The hedging instrument has expired, is sold, terminated, or exercised

•

The hedged item matures, is sold, or repaid

•

The forecast transaction is no longer deemed highly probable

•

The Group elects to discont

inue hedge account

ing voluntarily

For interest rate benchmarks deemed in scope of IBOR reform, if the actual result of a hedge is outside the 80-125% range,

but the hedge passes the prospective assessment, then the Group will not de-designate the hedge relationsh

ip.

Under the Phase 2 Interest Rate Benchmark Reform amendments to IFRS 9 and IAS 39, the Group may change hedge

designat

ions and correspond

ing documentation without the hedge being discont

inued where there

is a change in interest

rate benchmark of the hedged item, hedging instrument or designated hedged risk. Permitted changes include the right to:

•

Redeﬁne the descript

ion of the hedged

item and/or hedging instrument

•

Redeﬁne the hedged risk to reference an alternative risk-free rate

•

Change the method for assessing hedge effectiveness due to modif

icat

ions required by IBOR reform

•

Elect, on a hedge-by-hedge basis, to reset the cumulative fair value changes in the assessment of retrospective hedge

effectiveness to zero

A hedge designat

ion may be mod

ied more than once, each t

ime a relationsh

is affected as a direct result of IBOR reform.

398

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

14. Derivat

ive ﬁnancial

instruments

continued

Fair value hedge

Changes in the fair value of derivat

ives that are des

ignated and qualify as fair value hedging instruments are recorded in net

trading income, together with any changes in the fair value of the hedged asset or liab

ity that are attributable to the

hedged risk. If the hedge no longer meets the criter

ia for hedge account

ing, the adjustment to the carrying amount of a

hedged item for which the effective interest method is used is amortised to the income statement over the remain

ing term to

maturity of the hedged item. If the hedged item is sold or repaid, the unamortised fair value adjustment is recognised

immed

iately

in the income statement. For ﬁnanc

ial assets class

ied as fa

ir value through other comprehensive income, the

hedge accounting adjustment attributable to the hedged risk is included in net trading income to match the hedging

derivat

ive.

Cash ﬂow hedge

The effective portion of changes in the fair value of derivat

ives that are des

ignated and qualify as cash ﬂow hedging

instruments are in

ially recognised in other comprehensive income, accumulating in the cash ﬂow hedge reserve with

equity. These amounts are subsequently recycled to the income statement in the periods when the hedged item affects

proﬁt or loss. Both the derivat

ive fa

ir value movement and any recycled amount are recorded in the ‘Cashﬂow hedges’ line

item in other comprehensive income.

The Group assesses hedge effectiveness using the hypothetical derivat

ive method, wh

ich creates a derivat

ive

instrument to

serve as a proxy for the hedged transaction. The terms of the hypothetical derivat

ive match the cr

ical terms of the hedged

item and it has a fair value of zero at incept

ion. The hypothet

ical derivat

ive and the actual der

ivat

ive are regressed to

establish the statist

ical s

ign

iﬁcance of the hedge relat

ionsh

ip. Any

ineffect

ive port

ion of the gain or loss on the hedging

instrument is recognised in the net trading income immed

iately.

If a cash ﬂow hedge is discont

inued, the amount accumulated

in the cash ﬂow hedge reserve is released to the income

statement as and when the hedged item affects the income statement.

For interest rate benchmarks deemed in scope of IBOR reform, the Group will retain the cumulative gain or loss in the cash

ﬂow hedge reserve for designated cash ﬂow hedges even though there is uncertainty aris

ing from these reforms w

ith respect

to the tim

ing and amount of the cash ﬂows of the hedged

items. Should the Group consider the hedged future cash ﬂows are

no longer expected to occur due to reasons other than IBOR reform, the cumulative gain or loss will be immed

iately

reclassif

ied to proﬁt or loss.

Net investment hedge

Hedges of net investments are accounted for in a sim

ilar manner to cash ﬂow hedges, w

ith gains and losses aris

ing on the

effective portion of the hedges recorded in the line ‘Exchange differences on translation of foreign operations’ in other

comprehensive income, accumulating in the translation reserve with

in equ

ity. These amounts remain in equity until the net

investment is disposed of. The ineffect

ive port

ion of the hedges is recognised in the net trading income immed

iately.

The tables below analyse the notional princ

ipal amounts and the pos

ive and negat

ive fair values of derivat

ive ﬁnancial

instruments. Notional princ

ipal amounts are the amounts of pr

inc

ipal underly

ing the contract at the reporting date.

Derivat

ives

2022

2021

Notional

princ

ipal

amounts

$mill

ion

Assets

$mill

ion

Liab

ies

$mill

ion

Notional

princ

ipal

amounts

$mill

ion

Assets

$mill

ion

Liab

ies

$mill

ion

Foreign exchange derivat

ive contracts:

Forward foreign exchange contracts

3,154,440

38,162

39,376

3,750,151

30,256

30,068

Currency swaps and options

1,168,026

16,010

17,447

1,412,055

11,492

11,659

4,322,466

54,172

56,823

5,162,206

41,748

41,727

Interest rate derivat

ive contracts:

Swaps

3,516,310

62,001

64,005

3,609,625

31,490

31,078

Forward rate agreements and options

98,465

2,214

2,880

127,287

1,328

1,859

Exchange traded futures and options

324,702

279

258

295,192

156

132

3,939,477

64,494

67,143

4,032,104

32,974

33,069

Credit derivat

ive contracts

249,082

411

941

184,953

2,289

3,125

Equity and stock index options

6,788

100

246

8,714

136

160

Commodity derivat

ive contracts

90,952

1,622

1,791

113,807

1,896

1,916

Gross total derivat

ives

8,608,765

120,799

126,944

9,501,784

79,043

79,997

Offset

–

(57,082)

–

(26,598)

Net Total derivat

ives

8,608,765

63,717

69,862

9,501,784

52,445

53,399

The Group lim

its exposure to cred

it losses in the event of default by entering into master netting agreements with certain

market counterparties. As required by IAS 32, exposures are only presented net in these accounts where they are subject to legal

right of offset and intended to be settled net in the ordinary course of business.

399

Standard Chartered

– Annual Report 2022

Financ

ial statements

14. Derivat

ive ﬁnancial

instruments

continued

The Group applies balance sheet offsetting only in the instance where we are able to demonstrate legal enforceabil

ity of the

right to offset (e.g. via legal opin

ion) and the ab

ity and

intent

ion to settle on a net bas

is (e.g. via operational practice).

The Group may enter into economic hedges that do not qualify for IAS 39 hedge accounting treatment, includ

ing der

ivat

ive

such as interest rate swaps, interest rate futures and cross currency swaps to manage interest rate and currency risks of the

Group. These derivat

ives are measured at fa

ir value, with fair value changes recognised in net trading income: refer to Market

risk (page 282).

The Derivat

ives and Hedg

ing sections of the Risk review and Capital review (page 236 to 325) explain the Group’s risk

management of derivat

ive contracts and appl

icat

ion of hedg

ing.

Derivat

ives held for hedg

ing

The Group enters into derivat

ive contracts for the purpose of hedg

ing interest rate, currency and structural foreign exchange

risks inherent in assets, liab

ies and forecast transact

ions. The table below summarises the notional princ

ipal amounts and

carrying values of derivat

ives des

ignated in hedge accounting relationsh

ips at the report

ing date.

Included in the table above are derivat

ives held for hedg

ing purposes as follows:

2022

2021

Notional

princ

ipal

amounts

$mill

ion

Assets

$mill

ion

Liab

ies

$mill

ion

Notional

princ

ipal

amounts

$mill

ion

Assets

$mill

ion

Liab

ies

$mill

ion

Derivat

ives des

ignated as fair value

hedges:

Interest rate swaps

80,760

2,438

2,939

78,666

957

338

Currency swaps

1,273

2,262

151

82,033

2,454

2,987

80,928

1,000

489

Derivat

ives des

ignated as cash ﬂow

hedges:

Interest rate swaps

31,977

100

671

10,381

Forward foreign exchange contracts

11,987

385

–

Currency swaps

11,787

362

12,214

293

55,751

285

1,418

22,667

355

125

Derivat

ives des

ignated as net

investment hedges:

Forward foreign exchange contracts

14,576

120

141

13,198

Total derivat

ives held for hedg

ing

152,360

2,859

4,546

116,793

1,443

693

Fair value hedges

The Group issues various long-term ﬁxed rate debt issuances that are measured at amortised cost, includ

ing some

denominated in foreign currency, such as unsecured senior and subordinated debt (see Notes 22 and 27). The Group also holds

various ﬁxed rate debt securit

ies such as government and corporate bonds,

includ

ing some denom

inated in foreign currency

(see Note 13). These assets and liab

ies held are exposed to changes

in fair value due to movements in market interest and

foreign currency rates.

The Group uses interest rate swaps to exchange ﬁxed rates for ﬂoating rates on funding to match ﬂoating rates received on

assets, or exchange ﬁxed rates on assets to match ﬂoating rates paid on funding. The Group further uses cross currency swaps

to match the currency of the issued debt or held asset with that of the entity’s functional currency.

Hedge ineffect

iveness from fa

ir value hedges is driven by cross currency basis risk. The amortisat

ion of fa

ir value hedge

adjustments for hedged items no longer designated is recognised in net trading income. In future periods hedge relationsh

ips

linked to an interest rate benchmark deemed in scope of benchmark reform may experience ineffect

iveness due to market

partic

ipants’ expectat

ions for when the change from the exist

ing IBOR benchmark to an alternat

ive risk-free rate will occur,

since the transit

ion may occur at d

ifferent times for the hedged item and hedging instrument.

At 31 December 2022 the Group held the following interest rate and cross currency swaps as hedging instruments in fair value

hedges of interest and currency risk.

400

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

14. Derivat

ive ﬁnancial

instruments

continued

Fair value hedges

continued

Hedging instruments and ineffect

iveness

Interest rate

2022

Notional

$mill

ion

Carrying amount

Change in fair

value used to

calculate hedge

ineffect

iveness²

$mill

ion

Ineffectiveness

recognised in

proﬁt or loss

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Interest rate swaps – issued notes

41,772

112

2,914

(3,020)

(7)

Interest rate swaps – loans and advances

1,117

–

(1)

Interest rate swaps – debt securit

ies and other

elig

ible b

ills

37,871

2,258

3,127

Interest and currency risk

Cross currency swaps – subordinated notes issued

–

(260)

Cross currency swaps – debt securit

ies and other

elig

ible b

ills

1,201

(9)

Total at 31 December 2022

82,033

2,454

2,987

(109)

Interest rate¹

2021

Notional

$mill

ion

Carrying amount

Change in fair

value used to

calculate hedge

ineffect

iveness²

$mill

ion

Ineffectiveness

recognised in

proﬁt or loss

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Interest rate swaps – issued notes

35,310

575

212

(891)

(9)

Interest rate swaps – loans and advances

2,079

–

Interest rate swaps – debt securit

ies and other

elig

ible b

ills

41,277

363

113

717

(1)

Interest and currency risk

Cross currency swaps – subordinated notes issued

1,469

–

150

(139)

Cross currency swaps – debt securit

ies and other

elig

ible b

ills

793

–

Total at 31 December 2021

80,928

1,000

489

(250)

(4)

Interest rate swaps are designated in hedges of the fair value of interest rate risk attributable to the hedged item. Cross currency swaps are used to hedge both

interest rate and currency risks. All the hedging instruments are derivat

ives, w

ith changes in fair value includ

ing hedge

ineffect

iveness recorded w

ith

in net trad

ing

income

This represents a (loss)/ change in fair value used for calculating hedge ineffect

iveness

Hedged items in fair value hedges

2022

Carrying amount

Accumulated amount of fair value

hedge adjustments included in the

carrying amount

Change in the

value used for

calculating

hedge

ineffect

iveness¹

$mill

ion

Cumulative

balance of

fair value

adjustments

from

de-designated

hedge

relationsh

ips²

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Issued notes

–

42,702

–

2,756

3,284

414

Debt securit

ies and other el

ible b

ills

36,028

–

(2,075)

–

(3,100)

441

Loans and advances to customers

1,051

–

(65)

–

(54)

Total at 31 December 2022

37,079

42,702

(2,140)

2,756

130

856

2021

Carrying amount

Accumulated amount of fair value

hedge adjustments included in the

carrying amount

Change in

fair value used

for calculating

hedge

ineffect

iveness¹

$mill

ion

Cumulative

balance of

fair value

adjustments

from

de-designated

hedge

relationsh

ips²

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Issued notes

–

35,206

–

1,029

862

Debt securit

ies and other el

ible b

ills

41,637

–

(363)

–

(769)

(19)

Loans and advances to customers

2,072

–

(7)

–

(14)

(1)

Total at 31 December 2021

43,709

35,206

(370)

246

842

This represents a gain/(loss) change in fair value used for calculating hedge ineffect

iveness

This represents a credit/(debit) to the balance sheet value

401

Standard Chartered

– Annual Report 2022

Financ

ial statements

14. Derivat

ive ﬁnancial

instruments

continued

Income statement impact of fair value hedges

2022

$mill

ion

Income/

(expense)

2021

$mill

ion

Income/

(expense)

Change in fair value of hedging instruments

(109)

(250)

Change in fair value of hedged risks attributable to hedged items

130

246

Net ineffect

iveness ga

in/(loss) to net trading income

(4)

Amortisat

ion ga

in to net interest income

141

Cash ﬂow hedges

The Group has exposure to market movements in future interest cash ﬂows on portfolios of customer accounts, debt securit

ies

and loans and advances to customers. The amounts and tim

ing of future cash ﬂows, represent

ing both princ

ipal and

interest

ﬂows, are projected on the basis of contractual terms and other relevant factors, includ

ing est

imates of prepayments and

defaults.

The hedging strategy of the Group involves using interest rate swaps to manage the variab

ity in future cash ﬂows on assets

and liab

ies that have ﬂoat

ing rates of interest by exchanging the ﬂoating rates for ﬁxed rates. It also uses foreign exchange

contracts and currency swaps to manage the variab

ity in future exchange rates on its assets and liab

ies and costs

in foreign

currencies. This is done on both a micro basis whereby a single interest rate or cross currency swap is designated in a separate

relationsh

ip w

ith a single hedged item (such as a ﬂoating rate loan to a customer), and on a portfolio basis whereby each

hedging instrument is designated against a group of hedged items that share the same risk (such as a group of customer

accounts).

The hedged risk is determined as the variab

ity of future cash ﬂows aris

ing from changes

in the designated benchmark

interest rate.

Hedging instruments and ineffect

iveness

2022

Notional

$mill

ion

Carrying amount

Change in fair

value used to

calculate hedge

ineffect

iveness¹

$mill

ion

(Loss)/gain

recognised

in OCI

$mill

ion

Ineffectiveness

(loss) recognised

in net trading

income

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Interest rate risk

Interest rate swaps

31,977

100

671

(533)

(531)

(2)

Currency risk

Forward foreign exchange contract

11,987

385

(141)

(1 41)

–

Cross currency swaps

11,787

362

421

426

(5)

Total as at 31 December 2022

55,751

285

1,418

(253)

(246)

(7)

2021

Notional

$mill

ion

Carrying amount

Change in fair

value used to

calculate hedge

ineffect

iveness¹

$mill

ion

Gain

recognised

in OCI

$mill

ion

Ineffectiveness

gain/(loss)

recognised

in net trading

income

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Interest rate risk

Interest rate swaps

10,381

–

Currency risk

Forward foreign exchange contract

–

Cross currency swaps

12,214

293

297

–

Total as at 31 December 2021

22,667

355

125

376

–

This represents a gain/(loss) change in fair value used for calculating hedge ineffect

iveness

402

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

14. Derivat

ive ﬁnancial

instruments

continued

Hedged items in cash ﬂow hedges

2022

Change in

fair value used

for calculating

hedge

ineffect

iveness¹

$mill

ion

Cash ﬂow

hedge reserve

$mill

ion

Cumulative

balance in the

cash ﬂow hedge

reserve from

de-designated

hedge

relationsh

ips

$mill

ion

Customer accounts

244

(444)

108

Debt securit

ies and other el

ible b

ills

(165)

(72)

(30)

Loans and advances to customers

315

(191)

(18)

Forecast cashﬂow currency hedge

–

Intragroup lending currency hedge

(135)

(6)

–

Intragroup borrowing currency hedge

(13)

–

Total at 31 December 2022

246

(713)

2021

Change in fair

value used for

calculating

hedge

ineffect

iveness¹

$mill

ion

Cash ﬂow

hedge reserve²

$mill

ion

Cumulative

balance in the

cash ﬂow hedge

reserve from

de-designated

hedge

relationsh

ips²

$mill

ion

Customer accounts

(95)

(9)

(15)

Debt securit

ies and other el

ible b

ills

(231)

(2)

–

Loans and advances to customers

(8)

Forecast cashﬂow currency hedge

–

Intragroup lending currency hedge

(73)

–

Intragroup borrowing currency hedge

–

Total at 31 December 2021

(376)

(18)

(14)

This represents a gain/(loss) change in fair value used for calculating hedge ineffect

iveness

Restated to reﬂect the correct movement in the cashﬂow reserve. Refer to the following table for addit

ional deta

ils

Impact of cash ﬂow hedges on proﬁt and loss and other comprehensive income

2022

Income/

(expense)

$mill

ion

2021

Income/

(expense)

$mill

ion

Cash ﬂow hedge reserve balance as at 1 January

(34)

(52)

(Loss)/gain recognised in other comprehensive income on effective portion of changes in fair value of

hedging instruments¹

(246)

376

Gain reclassif

ied to

income statement when hedged item affected net proﬁt¹

(373)

(356)

Taxation charge relating to cash ﬂow hedges

(2)

Cash ﬂow hedge reserve balance as at 31 December

(564)

(34)

The 2021 comparatives have been restated to correct a presentation error in two line items in the prior period whereby for a group of cross currency swaps

designated in cash ﬂow hedging relationsh

ips, the fa

ir value changes presented in other comprehensive income were shown net of the effect of changes in

foreign exchange rates. Following the restatement, the gain recognised in other comprehensive income for the effective portion of changes in the fair value of

hedging instruments has been increased by $377 mill

ion from $(1) m

ill

ion to $376 m

ill

ion and the ga

in reclassif

ied to the

income statement when the hedged item

affected net proﬁt, has been reduced by $(377) mill

ion from $21 m

ill

ion to $(356) m

ill

ion. On the statement of comprehens

ive income these two line items have

been combined into one line item in the current and the prior period to present the net change in other comprehensive income for cash ﬂow hedges, with the

gross movements shown in Note 14. No change is required to the income statement

Net investment hedges

Foreign currency exposures arise from investments in subsid

iar

ies that have a different functional currency from that of the

presentation currency of the Group. This risk arises from the ﬂuctuation in spot exchange rates between the functional currency

of the subsid

iar

ies and the Group’s presentation currency, which causes the value of the investment to vary.

The Group’s policy is to hedge these exposures only when not doing so would be expected to have a sign

iﬁcant

impact on the

regulatory ratios of the Group and its banking subsid

iar

ies. The Group uses foreign exchange forwards to manage the effect of

exchange rates on its net investments in foreign subsid

iar

ies.

403

Standard Chartered

– Annual Report 2022

Financ

ial statements

14. Derivat

ive ﬁnancial

instruments

continued

Hedging instruments and ineffect

iveness

2022

Notional

$mill

ion

Carrying amount

Change in fair

value used to

calculate hedge

ineffect

iveness

$mill

ion

Changes in

the value of

the hedging

instrument

recognised

in OCI

$mill

ion

Ineffectiveness

recognised in

proﬁt or loss

$mill

ion

Amount

reclassif

ied

from

reserves to

income

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Derivat

ive forward currency contracts²

14,576

120

141

512

–

2021

Notional

$mill

ion

Carrying amount

Change in fair

value used to

calculate

hedge

ineffect

iveness¹

$mill

ion

Changes in

the value of

the hedging

instrument

recognised

in OCI

$mill

ion

Ineffectiveness

recognised in

proﬁt or loss

$mill

ion

Amount

reclassif

ied

from

reserves to

income

$mill

ion

Asset

$mill

ion

Liab

ity

$mill

ion

Derivat

ive forward currency contracts²

13,198

116

–

This represents a gain/(loss) change in fair value used for calculating hedge ineffect

iveness

These derivat

ive forward currency contracts have a matur

ity of less than one year. The hedges are rolled on a period

ic bas

Hedged items in net investment hedges

2022

Change in the

value used for

calculating

hedge

ineffect

iveness¹

$mill

ion

Translation

reserve

$mill

ion

Balances

remain

ing

in the

translation

reserve from

hedging

relationsh

ips for

which hedge

accounting is no

longer applied

$mill

ion

Net investments

(512)

(21)

–

2021

Change in the

value used for

calculating

hedge

ineffect

iveness¹

$mill

ion

Translation

reserve

$mill

ion

Balances

remain

ing

in the

translation

reserve from

hedging

relationsh

ips for

which hedge

accounting is no

longer applied

$mill

ion

Net investments

(116)

–

This represents a gain/(loss) change in fair value used for calculating hedge ineffect

iveness

Impact of net investment hedges on other comprehensive income

2022

Income/

(expense)

$mill

ion

2021

Income/

(expense)

$mill

ion

Gains recognised in other comprehensive income

512

118

404

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

14. Derivat

ive ﬁnancial

instruments

continued

Maturity of hedging instruments

Fair value hedges

2022

Less than

one month

More than

one month

and less than

one year

One to

ﬁve years

More than

ﬁve years

Interest rate swap

Notional

$mill

ion

2,462

8,888

53,225

16,185

Average ﬁxed interest rate

USD

1.76%

2.29%

2.16%

1.83%

EUR

–

2.73%

0.51%

0.56%

Cross currency swap

Notional

$mill

ion

–

1,109

164

–

Average ﬁxed interest rate (to USD)

JPY

–

(0.62)%

–

EUR

–

KRO

–

Average exchange rate

JPY/USD

–

138.78

–

EUR/USD

–

KRO/USD

–

Cash ﬂow hedges

Interest rate swap

Notional

$mill

ion

195

16,465

14,819

498

Average ﬁxed interest rate

HKD

–

0.35%

1.34%

–

USD

3.80%

1.82%

1.60%

1.29%

Cross currency swap

Notional

$mill

ion

8,466

2,650

626

Average ﬁxed interest rate

HKD

–

3.93%

–

0.21%

KRO

–

3.26%

3.83%

–

USD

–

4.15%

–

TWD

(0.61)%

(1.38)%

0.32%

–

Average exchange rate

HKD/USD

–

7.84

–

7.85

KRO/USD

–

1,342.85

1,278.62

1,300.90

USD/HKD

–

7.84

–

TWD/USD

27.74

30.77

29.73

–

Forward foreign exchange contracts

Notional

$mill

ion

1,246

10,741

–

Average exchange rate

JPY/USD

135.18

133.26

–

TWD/USD

–

Net investment hedges

Foreign exchange derivat

ives

Notional

$mill

ion

14,576

–

Average exchange rate

CNY

/USD

6.71

–

KRW

/USD

1,296.95

–

AED/USD

3.67

–

TWD/USD

–

HKD/USD

7.83

–

Offshore currency

405

Standard Chartered

– Annual Report 2022

Financ

ial statements

14. Derivat

ive ﬁnancial

instruments

continued

Maturity of hedging instruments

continued

Fair value hedges

2021

Less than

one month

More than

one month

and less than

one year

One to

ﬁve years

More than

ﬁve years

Interest rate swap

Notional

$mill

ion

3,186

7,175

49,386

18,919

Average ﬁxed interest rate

USD

2.00%

0.72%

1.05%

1.43%

EUR

–

0.12%

(0.17)%

(0.11)%

Cross currency swap

Notional

$mill

ion

1,492

722

–

Average ﬁxed interest rate (to USD)

EUR

–

1.29%

0.54%

–

KRO

–

0.09%

–

Average exchange rate

EUR/USD

–

0.78

0.80

–

KRO/USD

–

1,134.50

–

Cash ﬂow hedges

Interest rate swap

Notional

$mill

ion

–

4,443

4,750

1,188

Average ﬁxed interest rate

HKD

–

0.57%

0.41%

–

USD

–

0.08%

2.13%

1.29%

Cross currency swap

Notional

$mill

ion

152

10,260

1,802

–

Average ﬁxed interest rate

HKD

–

0.73%

–

KRO

–

1.09%

–

JPY

–

(0.13)%

–

TWD

(0.33)%

–

Average exchange rate

HKD/USD

–

7.78

–

KRO/USD

–

1,158.03

–

JPY/USD

–

109.05

–

TWD/USD

27.98

27.85

–

Forward foreign exchange contracts

Notional

$mill

ion

–

Average exchange rate

CLO/USD

–

868.10

–

Net investment hedges

Foreign exchange derivat

ives

Notional

$mill

ion

5,234

7,964

–

Average exchange rate

CNY¹/USD

6.57

–

KRW¹/USD

1,144.04

1,185.10

–

TWD/USD

27.55

27.34

–

HKD/USD

–

7.05

–

Offshore currency

406

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

14. Derivat

ive ﬁnancial

instruments

continued

Interest rate benchmark reform

The Group applies the Phase 1 ‘Interest Rate Benchmark Reform Amendments to IFRS 9, IAS 39 and IFRS 7’ which allow the Group

to assume that the interest rate benchmark on which cash ﬂows for the hedged item and/or hedging instrument are based is

not altered as a result of IBOR reform for the following activ

ies:

• Prospective hedge assessment

•

Determin

ing whether a cash ﬂow or forecast transact

ion for a cash ﬂow hedge is highly probable. However, the Group

otherwise assesses whether the cash ﬂows are considered highly probable

•

Determin

ing when cumulat

ive balances in the cash ﬂow hedge reserve from de-designated hedges should be recycled to the

income statement

The Group will not de-designate a hedge relationsh

ip of a benchmark

in scope of IBOR reform if the retrospective hedge result

is outside the required 80-125% range but, the hedge passes the prospective assessment. Any hedge ineffect

iveness cont

inues

to be recorded in net trading income.

For hedges of non-contractually specif

ied benchmark port

ions of an interest rate (such as fair value hedges of interest rate risk

on ﬁxed rate debt instruments) the Group only assesses whether the designated benchmark is separately ident

iﬁable at hedge

incept

ion. The cho

ice of designated benchmark is not revis

ited for ex

ist

ing hedge relat

ionsh

ips

In applying these amendments, the Group has made the following key assumptions for the period end, to be reviewed on an

ongoing basis:

•

The interest rate benchmarks applicable to the Group that are in scope of the IFRS amendments are all LIBORs, EONIA,

Singapore Swap Offer Rate (SGD SOR) and Thai Baht Interest Rate Fix

ing (THB FIX)

•

EURIBOR is not in scope of the IFRS amendments because its revised methodology incorporates market transaction data,

hence the benchmark is expected to continue to exist in future reporting periods

The Group assumes that the uncertainty aris

ing from USD LIBOR w

ill be present until 30 June 2023, at which time the

amendments to IFRS no longer apply.

As at 31 December 2022, the following notional princ

ipal amounts of der

ivat

ive

instruments designated in fair value or cash ﬂow

hedge accounting relationsh

ips were l

inked to IBOR reference rates:

Fair value

hedges

$mill

ion

Cash ﬂow

hedges

$mill

ion

Total

$mill

ion

Weighted

average

exposure

Years

Interest rate swaps

USD LIBOR

35,989

24,090

60,079

2.2

GBP LIBOR

–

JPY LIBOR

–

SGD SOR

–

35,989

24,090

60,079

2.2

Cross currency swaps

USD LIBOR vs Fixed rate foreign currency

1,151

4,539

5,690

1.0

Total notional of hedging instruments in scope of IFRS amendments as

at 31 December 2022

37,140

28,629

65,769

2.1

Fair value

hedges

$mill

ion

Cash ﬂow

hedges

$mill

ion

Total

$mill

ion

Weighted

average

exposure

Years

Interest rate swaps

USD LIBOR

46,615

2,636

49,251

3.6

GBP LIBOR

1,444

–

1,444

0.1

JPY LIBOR

637

–

637

0.2

SGD SOR

–

48,696

2,636

51,332

3.5

Cross currency swaps

USD LIBOR vs Fixed rate foreign currency

2,262

3,681

5,943

0.9

Total notional of hedging instruments in scope of IFRS amendments as

at 31 December 2021

50,958

6,317

57,275

3.2

The Group’s primary exposure is to USD LIBOR due to the extent of ﬁxed rate debt security assets and issued notes

denominated in USD that are designated in fair value hedge relationsh

ips. Where ﬁxed rate

instruments are in other currencies,

cross currency swaps are used to achieve an equivalent ﬂoating USD exposure.

407

Standard Chartered

– Annual Report 2022

Financ

ial statements

15. Loans and advances to banks and customers

Accounting policy

Refer to Note 13 Financ

ial

instruments for the relevant accounting policy.

2022

$mill

ion

2021

$mill

ion

Loans and advances to banks

39,545

44,410

Expected credit loss

(26)

(27)

39,519

44,383

Loans and advances to customers

316,107

304,122

Expected credit loss

(5,460)

(5,654)

310,647

298,468

Total loans and advances to banks and customers

350,166

342,851

The Group has outstanding resident

ial mortgage loans to Korea res

idents of $19.1 bill

ion (2021: $21.7 b

ill

ion) and Hong Kong

residents of $35 bill

ion (2021: $34.5 b

ill

ion).

Analysis of loans and advances to customers by geographic region and client segment together with their related impa

irment

provis

ions are set out w

ith

in the R

isk review and Capital review (pages 236 to 325).

16. Reverse repurchase and repurchase agreements includ

ing other s

ilar lend

ing and borrowing

Accounting policy

The Group purchases securit

ies (a reverse repurchase agreement – ‘reverse repo’) typ

ically with ﬁnanc

ial

inst

itut

ions subject

to a commitment to resell or return the securit

ies at a predeterm

ined price. These securit

ies are not

included in the balance

sheet as the Group does not acquire the risks and rewards of ownership, however they are recorded off-balance sheet as

collateral received. Considerat

ion pa

id (or cash collateral provided) is accounted for as a loan asset at amortised cost unless

it is managed on a fair value basis or designated at fair value through proﬁt or loss. In major

ity of cases through the

contractual terms of a reverse repo arrangement, the Group as the transferee of the security collateral has the right to sell or

repledge the asset concerned.

The Group also sells securit

ies (a repurchase agreement – ‘repo’) subject to a comm

itment to repurchase or redeem the

securit

ies at a predeterm

ined price. The securit

ies are reta

ined on the balance sheet as the Group retains substantially all the

risks and rewards of ownership and these securit

ies are d

isclosed as pledged collateral. Considerat

ion rece

ived (or cash

collateral received) is accounted for as a ﬁnanc

ial l

iab

ity at amortised cost unless it is either mandatorily classif

ied as fa

value through proﬁt or loss or irrevocably designated at fair value through proﬁt or loss at in

ial recognit

ion.

Financ

ial assets are pledged as collateral as part of sales and repurchases, secur

ies borrow

ing and securit

isat

ion

transactions under terms that are usual and customary for such activ

ies. The Group is obliged to return equivalent

securit

ies.

Repo and reverse repo transactions typically entitle the Group and its counterparties to have recourse to assets sim

ilar to

those provided as collateral in the event of a default. Securit

ies sold subject to repos, e

ither by way of a Global Master

Repurchase Agreement (GMRA), or through a securit

ies sale and Total Return Swap (TRS) cont

inue to be recognised on the

balance sheet as the Group retains substantially the associated risks and rewards of the securit

ies (the TRS

is not

recognised). The counterparty liab

ity is included in deposits by banks or customer accounts, as appropriate. Assets sold

under repurchase agreements are considered encumbered as the Group cannot pledge these to obtain funding.

408

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

16. Reverse repurchase and repurchase agreements includ

ing other s

ilar lend

ing and borrowing

continued

Reverse repurchase agreements and other sim

ilar secured lend

ing

2022

$mill

ion

2021

$mill

ion

Banks

24,932

19,806

Customers

65,035

68,613

89,967

88,419

Of which:

Fair value through proﬁt or loss

64,491

80,009

Banks

23,954

18,727

Customers

40,537

61,282

Held at amortised cost

25,476

8,410

Banks

978

1,079

Customers

24,498

7,331

Under reverse repurchase and securit

ies borrow

ing arrangements, the Group obtains securit

ies on terms wh

ich permit it to

repledge or resell the securit

ies to others. Amounts on such terms are:

2022

$mill

ion

2021

$mill

ion

Securit

ies and collateral rece

ived (at fair value)

124,989

118,636

Securit

ies and collateral wh

ich can be repledged or sold (at fair value)

123,759

117,408

Amounts repledged/transferred to others for ﬁnancing act

ies, to satisfy liab

ies under sale and

repurchase agreements (at fair value)

44,628

57,879

Repurchase agreements and other sim

ilar secured borrow

ing

2022

$mill

ion

2021

$mill

ion

Banks

6,968

7,054

Customers

46,846

58,594

53,814

65,648

Of which:

Fair value through proﬁt or loss

51,706

62,388

Banks

5,737

5,107

Customers

45,969

57,281

Held at amortised cost

2,108

3,260

Banks

1,231

1,947

Customers

877

1,313

The tables below set out the ﬁnancial assets prov

ided as collateral for repurchase and other secured borrowing transactions:

Collateral pledged against repurchase agreements

2022

Fair value

through proﬁt

or loss

$mill

ion

Fair value

through Other

Comprehensive

Income

$mill

ion

Amortised cost

$mill

ion

Off-balance

sheet

$mill

ion

Total

$mill

ion

On-balance sheet

Debt securit

ies and other el

ible b

ills

2,956

3,630

4,917

–

11,503

Off-balance sheet

Repledged collateral received

–

44,628

At 31 December 2022

2,956

3,630

4,917

44,628

56,131

Collateral pledged against repurchase agreements

2021

Fair value

through proﬁt

or loss

$mill

ion

Fair value

through Other

Comprehensive

Income

$mill

ion

Amortised cost

$mill

ion

Off-balance

sheet

$mill

ion

Total

$mill

ion

On-balance sheet

Debt securit

ies and other el

ible b

ills

3,427

2,655

2,601

–

8,683

Off-balance sheet

Repledged collateral received

–

57,879

At 31 December 2021

3,427

2,655

2,601

57,879

66,562

409

Standard Chartered

– Annual Report 2022

Financ

ial statements

17. Goodwill and intang

ible assets

Accounting policy

Goodwill

Goodwill represents the excess of the cost of an acquis

ion over the fair value of the Group’s share of the ident

iﬁable net

assets and contingent liab

ies of the acqu

ired subsid

iary, assoc

iate or jo

int venture at the date of acqu

ion. Goodwill on

acquis

ions of subsid

iar

ies is included in intang

ible assets. Goodw

ill on acquis

ions of associates is included in Investments in

associates and jo

int ventures. Goodw

ill included in intang

ible assets

is assessed at each balance sheet date for impa

irment

and carried at cost less any accumulated impa

irment losses. Ga

ins and losses on the disposal of an entity include the

carrying amount of goodwill relating to the entity sold. Detailed calculations are performed based on forecasting expected

cash ﬂows of the relevant cash generating units (CGUs) and discount

ing these at an appropr

iate discount rate, the

determinat

ion of wh

ich requires the exercise of judgement. Goodwill is allocated to CGUs for the purpose of impa

irment

testing. CGUs represent the lowest level with

in the Group wh

ich generate separate cash inﬂows and at which the goodwill is

monitored for internal management purposes. These are equal to or smaller than the Group’s reportable segments (as set

out in Note 2) as the Group views its reportable segments on a global basis. The major CGUs to which goodwill has been

allocated are set out in the CGU table (page 410).

Other accounting estimates and judgements

The carrying amount of goodwill is based on the applicat

ion of judgements

includ

ing the bas

is of goodwill impa

irment

calculation assumptions. Judgement is also applied in determinat

ion of CGUs.

Estimates include forecasts used for determin

ing cash ﬂows for CGUs, the appropr

iate long-term growth rates to use and

discount rates which factor in country risk-free rates and applicable risk premiums. The Group undertakes an annual

assessment to evaluate whether the carrying value of goodwill is impa

ired. The est

imat

ion of future cash ﬂows and the level

to which they are discounted is inherently uncertain and requires sign

iﬁcant judgement and

is subject to potential change

over time.

Acquired intang

ibles

At the date of acquis

ion of a subsid

iary or assoc

iate, intang

ible assets wh

ich are deemed separable and that arise from

contractual or other legal rights are capital

ised and

included with

in the net

ident

iﬁable assets acqu

ired. These intang

ible

assets are in

ially measured at fair value, which reﬂects market expectations of the probabil

ity that the future econom

beneﬁts embodied in the asset will ﬂow to the entity and are amortised on the basis of their expected useful lives (4 to 16

years). At each balance sheet date, these assets are assessed for ind

icators of

impa

irment. In the event that an asset’s

carrying amount is determined to be greater than its recoverable amount, the asset is written down immed

iately to the

recoverable amount.

Computer software

Acquired computer software licences are capital

ised

if the princ

iples of development are met on the bas

is of the costs

incurred to acquire and bring to use the specif

ic software.

Internally generated software represents substantially all of the total software capital

ised. D

irect costs of the development

of separately ident

iﬁable

internally generated software are capital

ised where

it is probable that future economic beneﬁts

attributable to the software will ﬂow from its use. These costs include staff remuneration costs such as salaries, statutory

payments and share-based payments, materials, service providers and contractors provided their time is directly

attributable to the software build. Costs incurred in the ongoing maintenance of software are expensed immed

iately when

incurred. Internally generated software is amortised over each asset’s useful life to a maximum of 10-years. On an annual

basis software assets’ residual values and useful lives are reviewed, includ

ing assess

ing for ind

icators of

impa

irment.

Indicators of impa

irment

include loss of business relevance, obsolescence, exit of the business to which the software relates,

technological changes, change in use of the asset, reduction in useful life, plans to reduce usage or scope.

For capital

ised software, judgement

is required to determine which costs relate to research (expensed) and which costs

relate to development (capital

ised). Further judgement

is required to determine the technical feasib

ity of completing the

software such that it will be available for use. Estimates are used to determine how the software will generate probable

future economic beneﬁts: these estimates include cost savings, income increases, balance sheet improvements, improved

functional

ity or

improved asset safeguarding.

Software as a Service (SaaS) is a contractual arrangement that conveys the right to receive access to the supplier’s software

applicat

ion over the contract term. As such, the Group does not have control and as a result recogn

ises an operating

expense for these costs over the contract term. Certain costs related to implementat

ion of the SaaS may meet the deﬁnit

ion

of an intang

ible asset

in their own right if it is separately ident

iﬁable and control

is established. These costs are capital

ised

it is expected to provide the Group with future economic beneﬁts ﬂowing from the underlying resource and the Group can

restrict others from accessing those beneﬁts.

410

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

17. Goodwill and intang

ible assets

continued

2022

2021

Goodwill

$mill

ion

Acquired

intang

ibles

$mill

ion

Computer

software

$mill

ion

Total

$mill

ion

Goodwill

$mill

ion

Acquired

intang

ibles

$mill

ion

Computer

software

$mill

ion

Total

$mill

ion

Cost

At 1 January

2,595

457

4,464

7,516

2,617

473

3,682

6,772

Exchange translation differences

(108)

(26)

(22)

(156)

(22)

(14)

(73)

(109)

Addit

ions

–

1,096

–

989

Impairment

(14)

–

(7)

(21)

–

Amounts written off

–

(136)

(348)

(484)

–

(2)

(134)

(136)

Classif

ied as held for sale

(2)

–

(5)

(7)

–

At 31 December

2,471

295

5,178

7,944

2,595

457

4,464

7,516

Provis

ion for amort

isat

ion

At 1 January

–

437

1,608

2,045

–

451

1,258

1,709

Exchange translation differences

–

(29)

(11)

(40)

–

(22)

(20)

(42)

Amortisat

ion

–

531

535

–

461

469

Impairment charge

–

Amounts written off

–

(136)

(331)

(467)

–

(95)

Classif

ied as held for sale

–

(3)

–

At 31 December

–

276

1,799

2,075

–

437

1,608

2,045

Net book value

2,471

3,379

5,869

2,595

2,856

5,471

At 31 December 2022, accumulated goodwill impa

irment losses

incurred from 1 January 2005 amounted to $3,331 mill

ion

(31 December 2021: $3,317 mill

ion), of wh

ich $14 mill

ion was recogn

ised in 2022 (31 December 2021: Nil).

Outcome of impa

irment assessment

An annual assessment is made as to whether the current carrying value of goodwill is impa

ired. For the purposes of

impa

irment

testing, goodwill is allocated at the date of acquis

ion to a CGU. Goodwill is considered to be impa

ired

if the carrying amount

of the relevant CGU exceeds its recoverable amount. Indicators of impa

irment

include changes in the economic performance

and outlook of the region includ

ing geopol

ical changes, changes

in market value of regional investments, large credit defaults

and strategic decis

ions to ex

it certain regions. The recoverable amounts for all the CGUs were measured based on value in use

(VIU). The calculation of VIU for each CGU is calculated using ﬁve-year cashﬂow project

ions and an est

imated terminal value

based on a perpetuity value after year ﬁve. The cashﬂow project

ions are based on forecasts approved by management up to

2027. The perpetuity terminal value amount is calculated using year ﬁve cashﬂows using long-term GDP growth rates. All

cashﬂows are discounted using discount rates which reﬂect market rates appropriate to the CGU. Post-tax discount rates are

used to calculate the VIU using the post-tax cashﬂows. The post-tax discount rate is subsequently grossed up to pre-tax

discount rate. The calculated VIU using post-tax and pre-tax discount rate is same.

The goodwill allocated to each CGU and key assumptions used in determin

ing the recoverable amounts are set out below and

are solely estimates for the purposes of assessing impa

irment of acqu

ired goodwill.

Cash generating unit

2022

2021

Goodwill

$mill

ion

Pre Tax

discount rates

per cent

Long-term

forecast GDP

growth rates

per cent

Goodwill

$mill

ion

Pre Tax

discount rates

per cent

Long-term

forecast GDP

growth rates

per cent

Country CGUs

Asia

1,032

1,073

Hong Kong

357

12.4

1.7

357

10.6

2.5

Taiwan

333

11.3

1.7

361

10.4

2.0

Singapore

342

12.3

2.3

341

11.6

2.4

Bangladesh

–

24.3

5.4

15.0

7.3

Africa & Middle East

Pakistan

30.9

5.9

22.2

6.0

Bahrain

16.6

0.7

13.1

3.0

Global CGUs

1,354

1,430

Global Private Banking

14.5

2.0

12.4

2.5

Corporate, Commercial &

Institut

ional Bank

ing

1,271

14.7

2.5

1,346

12.5

3.0

2,471

2,595

Bangladesh has had all the goodwill allocated to them written off, totalling $14 mill

ion. Th

is was primar

ily due to lower

economic growth forecasts and higher discount rates. As a result, the carrying amount of Bangladesh CGU, which included

goodwill, was greater than the recoverable amount (VIU of $83 mill

ion).

411

Standard Chartered

– Annual Report 2022

Financ

ial statements

17. Goodwill and intang

ible assets

continued

The Group has performed sensit

ity analysis on the key assumptions for each CGU’s recoverable amount. Hong Kong CGU is

considered sensit

ive to the key var

iables and any ind

idual movements on the estimates (cashﬂow, discount rate and GDP

growth rate) up to the levels disclosed below would elim

inate the current headroom.

CGU

2022

Goodwill

$mill

ion

Base Case

Sensit

ies

GDP

Discount rate

Cashﬂow

Cash-

ﬂow

Downside

scenario

Extreme

downside

scenario

GDP -1%

DR +1%

+1%

-1%

+1%

-1%

+10%

-10%

+20%

-20%

-30%

CF -10%

CF -20%

Head-

room

$mill

ion

Pre Tax

Discount

Rate

GDP

Head-

room

$mill

ion

Head-

room

$mill

ion

Head-

room

$mill

ion

Head-

room

$mill

ion

Head-

room

$mill

ion

Head-

room

$mill

ion

Head-

room

$mill

ion

Head-

room

$mill

ion

Head-

room

$mill

ion

Head-

room

$mill

ion

Head-

room

$mill

ion

Hong

Kong

357

1,115

12.40%

1.66%

1,810

572

361

2,076

2,142

3,168

(935) (1,961)

(911)

(1,760)

The table above represents reasonably possible scenarios that could occur if either; economic factors (which drive GDP rates

and discount rates); country-specif

ic cash ﬂows; or a comb

inat

ion of both are d

ifferent from the assumptions used in the

goodwill impa

irment assessment at 31 December 2022.

For there to be no headroom, the discount rate will need to increase by 1.57 per cent. Sim

ilarly, the GDP rates w

ill need to

decrease by 2.35 per cent and cashﬂows would need to decrease by 10.89 per cent.

Acquired intang

ibles

These primar

ily compr

ise those items recognised as part of the acquis

ions of Union Bank (now amalgamated into Standard

Chartered Bank (Pakistan) Lim

ited), Hs

inchu (now amalgamated into Standard Chartered Bank (Taiwan) Lim

ited), Pembroke,

American Express Bank and ABSA’s custody business in Africa. Maintenance intang

ible assets represent the d

ifference in the

value between the contractual right under acquired leases to receive aircraft in a specif

ied ma

intenance condit

ion at the end of

the lease and the actual physical condit

ion of the a

ircraft at the date of acquis

ion.

The acquired intang

ibles are amort

ised over periods from four years to a maximum of 16 years. The constituents are as follows:

2022

$mill

ion

2021

$mill

ion

Acquired intang

ibles compr

ise:

Aircraft maintenance

Brand names

Customer relationsh

ips

Licenses

Net book value

412

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

18. Property, plant and equipment

Accounting policy

All property, plant and equipment is stated at cost less accumulated depreciat

ion and

impa

irment losses. Cost

includes

expenditure that is directly attributable to the acquis

ion of the assets. Subsequent costs are included in the asset’s carrying

amount or are recognised as a separate asset, as appropriate, only when it is probable that future economic beneﬁts

associated with the item will ﬂow to the Group and the cost of the item can be measured reliably.

At each balance sheet date the assets’ residual values and useful lives are reviewed, and adjusted if appropriate, includ

ing

assessing for ind

icators of

impa

irment. In the event that an asset’s carry

ing amount is determined to be greater than its

recoverable amount, the asset is written down to the recoverable amount. Gains and losses on disposals are included in the

income statement.

Repairs and maintenance are charged to the income statement during the ﬁnanc

ial per

iod in which they are incurred.

Land and build

ings compr

ise mainly branches and ofﬁces. Freehold land is not depreciated although it is subject to

impa

irment test

ing.

Depreciat

ion on other assets

is calculated using the straight-line method to allocate their cost to their residual values over

their estimated useful lives, as follows:

• Owned premises

•

up to 50 years

• Leasehold premises

•

up to 50 years

• Leasehold improvements

•

shorter of remain

ing lease term and 10 years

•

Equipment and motor vehicles

•

three to 15 years

• Aircraft

•

up to 18 years

• Ships

•

up to 15 years

Where the Group is a lessee of a right-of-use asset, the leased assets are capital

ised and

included in Property, plant and

equipment with a corresponding liab

ity to the lessor recognised in Other liab

ies,

in accordance with the Group’s leased

assets accounting policy in Note 19.

All other repairs and maintenance are charged to the income statement during the ﬁnanc

ial per

iod in which they are

incurred.

Other accounting estimates and judgements

The carrying amount of the Group’s aircraft leasing portfolio is based on the applicat

ion of judgement and est

imates to

determine the most appropriate recoverable amount for each aircraft when assessing for impa

irment. Est

imates involve the

appropriate cash ﬂows, discount rates and residual values used in determin

ing a value-

in-use for aircraft, and judgement is

required in determin

ing the appropr

iate observable third-party valuations to use for assessing current market value.

2022

Premises

$mill

ion

Equipment

$mill

ion

Operating

lease assets

$mill

ion

Leased

premises

assets

$mill

ion

Leased

equipment

assets

$mill

ion

Total

$mill

ion

Cost or valuation

At 1 January

1,980

901

4,248

1,854

9,016

Exchange translation differences

(90)

(65)

–

(111)

(4)

(270)

Addit

ions

124

624

339

1,175

Disposals and fully depreciated assets

written off

(142)

(102)

(452)

(425)

(1)

(1,122)

Transfers to assets held for sale

(62)

(18)

–

(5)

–

(85)

As at 31 December

1,773

840

4,420

1,652

8,714

Depreciat

ion

Accumulated at 1 January

795

611

1,155

819

3,400

Exchange translation differences

(39)

–

(33)

(3)

(114)

Charge for the year

116

202

250

651

Impairment charge

–

Attributable to assets sold, transferred

or written off

(125)

(101)

(212)

(313)

–

(751)

Transfers to assets held for sale

(30)

(12)

–

(2)

–

(44)

Accumulated at 31 December

678

575

1,185

730

3,192

Net book amount at 31 December

1,095

265

3,235

922

5,522

Refer to the cash ﬂow statement under cash ﬂows from invest

ing act

ies section for the purchase of property, plant and equipment during the year of

$835 mill

ion on page 344

Disposals for property, plant and equipment during the year of $343 mill

ion

in the cash ﬂow statement would include the gains and losses incurred as part of other

operating income (Note 6) on disposal of assets during the year and the net book value disposed

413

Standard Chartered

– Annual Report 2022

Financ

ial statements

18. Property, plant and equipment

continued

2021

Premises

$mill

ion

Equipment

$mill

ion

Operating

lease assets

$mill

ion

Leased

premises

assets

$mill

ion

Leased

equipment

assets

$mill

ion

Total

$mill

ion

Cost or valuation

At 1 January

2,048

874

5,233

1,577

9,763

Exchange translation differences

(63)

(13)

–

(38)

(1)

(115)

Addit

ions¹

107

135

110

373

729

Disposals and fully depreciated assets

written off²

(100)

(95)

(1,095)

(58)

(1)

(1,349)

Transfers to assets held for sale

(12)

–

(12)

As at 31 December

1,980

901

4,248

1,854

9,016

Depreciat

ion

Accumulated at 1 January

770

594

1,336

536

3,248

Exchange translation differences

(15)

(14)

–

(15)

–

(44)

Charge for the year

121

213

296

712

Impairment charge

–

106

Attributable to assets sold, transferred

or written off²

(31)

(90)

(458)

(40)

–

(619)

Transfers to assets held for sale

(3)

–

(3)

Accumulated at 31 December

795

611

1,155

819

3,400

Net book amount at 31 December

1,185

290

3,093

1,035

5,616

Refer to the cash ﬂow statement under cash ﬂows from invest

ing act

ies section for the purchase of property, plant and equipment during the year of

$352 mill

ion on page 344

Disposals for property, plant and equipment during the year of $816 mill

ion

in the cash ﬂow statement would include the gains and losses incurred as part of other

operating income (Note 6) on disposal of assets during the year and the net book value disposed

Operating lease assets

The operating lease assets subsection of property, plant and equipment is the Group’s aircraft operating leasing business,

consist

ing of 99 commerc

ial aircraft at 31 December 2022, of which 97 are narrow-bodies and 2 are wide-bodies. The leases are

classif

ied as operat

ing leases as they do not transfer substantially all the risks and rewards inc

idental to the ownersh

ip of the

assets, and rental income from operating lease assets is disclosed in Note 6. At 31 December 2022, these assets had a net book

value of $3,235 mill

ion (31 December 2021: $3,093 m

ill

ion).

Under these leases the lessee is responsible for the maintenance and servic

ing of the a

ircraft during the lease term while the

Group receives rental income and assumes the risks of the residual value of the aircraft at the end of the lease. Init

ial lease terms

range in length up to 12 years, while the average remain

ing lease term at 31 December 2022

is approximately ﬁve years. By

varying the lease terms the effects of changes in cyclical market condit

ions at the t

ime aircraft become elig

ible for re-lease are

mit

igated. The Group w

ill look at entering into a lease extension with exist

ing lessees well

in advance of lease expiry in order to

min

ise the risk of aircraft downtime and aircraft transit

ion costs. A

ircraft may also be sold from time to time to manage the

composit

ion and average age of the ﬂeet.

A series of stress sensit

ies conducted on the narrow-body portfol

io highl

ight the two b

iggest risks remain either an increase

in the discount rate, as the major

ity of the leased portfol

io is valued on a VIU basis, or a substantial number of airl

ine cl

ients

defaulting. A sensit

ity test was performed on the narrow-body portfolio assuming a discount rate increase of 50 basis points

from a base range of 4.50%-5.75% (31 December 2021: 4.50%-5.50%), which resulted in a possible increase in impa

irment of

$34 mill

ion.

A further sensit

ity test considered that the lessees with lower credit ratings defaulted on their current leases. This scenario

would result in a possible increase in impa

irment of $34 m

ill

ion.

2022

Min

imum lease

receivables

under operating

leases

falling due:

$mill

ion

2021

Min

imum lease

receivables

under operating

leases

falling due:

$mill

ion

With

in one year

358

330

One to two years

337

285

Two to three years

286

251

Three to four years

242

197

Four to ﬁve years

211

153

After ﬁve years

546

411

1,980

1,627

414

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

19. Leased assets

Accounting policy

The Group assesses whether a contract is a lease in scope of this policy by determin

ing whether the contract g

ives it the right

to use a specif

ied underly

ing physical asset for a lease term greater than 12 months, unless the underlying asset is of low

value.

Where the Group is a lessee and the lease is deemed in scope, it recognises a liab

ity equal to the present value of lease

payments over the lease term, discounted using the incremental borrowing rate applicable in the economic environment of

the lease. The liab

ity is recognised in ‘Other liab

ies’. A correspond

ing right-of-use asset equal to the liab

ity, adjusted for

any lease payments made at or before the commencement date, is recognised in ‘Property, plant and equipment’. The lease

term includes any extension options contained in the contract that the Group is reasonably certain it will exercise.

The Group subsequently depreciates the right-of-use asset using the straight-line method over the lease term and measures

the lease liab

ity using the effective interest method. Depreciat

ion on the asset

is recognised in ‘Depreciat

ion and

amortisat

ion’, and

interest on the lease liab

ity is recognised in ‘Interest expense’.

If a leased premise, or a physically dist

inct port

ion of a premise such as an ind

idual ﬂoor, is deemed by management to be

surplus to the Group’s needs and action has been taken to abandon the space before the lease expires, this is considered an

ind

icator of

impa

irment. An

impa

irment loss

is recognised if the right-of-use asset, or portion thereof, has a carrying value in

excess of its value-in-use when taking into account factors such as the abil

ity and l

ikel

ihood of obta

ing a subtenant.

The judgements in determin

ing lease balances are the determ

inat

ion of whether the Group

is reasonably certain that it will

exercise extension options present in lease contracts. On in

ial recognit

ion, the Group cons

iders a range of characterist

ics

such as premises function, regional trends and the term remain

ing on the lease to determ

ine whether it is reasonably certain

that a contractual right to extend a lease will be exercised. Where a change in assumption is conﬁrmed by the local property

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

The estimates are the determinat

ion of

incremental borrowing rates in the respective economic environments. The Group

uses third-party broker quotes to estimate its USD cost of senior unsecured borrowing, then uses cross currency swap pric

ing

informat

ion to determ

ine the equivalent cost of borrowing in other currencies. If it is not possible to estimate an incremental

borrowing rate through this process, other proxies such as local government bond yields are used.

The Group primar

ily enters lease contracts that grant

it the right to use premises such as ofﬁce build

ings and reta

il branches.

Exist

ing lease l

iab

ies may change

in future periods due to changes in assumptions or decis

ions to exerc

ise lease renewal or

terminat

ion opt

ions, changes in payments due to renegotiat

ions of market rental rates as perm

itted by those contracts and

changes to payments due to rent being contractually linked to an inﬂat

ion

index. In general the re-measurement of a lease

liab

ity under these circumstances leads to an equal change to the right-of-use asset balance, with no immed

iate effect on the

income statement.

The total cash outﬂow during the year for premises and equipment leases was $310 mill

ion (2021: $331 m

ill

ion).

The total expense during the year in respect of leases with a term less than or equal to 12 months was $nil (2021: $1 mill

ion).

The right-of-use asset balances and depreciat

ion charges are d

isclosed in Note 18. The lease liab

ity balances are disclosed in

Note 23 and the interest expense on lease liab

ies

is disclosed in Note 3.

Maturity analysis

The maturity proﬁle for lease liab

ies assoc

iated with leased premises and equipment assets is as follows:

2022

One year

or less

$mill

ion

Between

one year and

two years

$mill

ion

Between

two years and

ﬁve years

$mill

ion

More than

ﬁve years

$mill

ion

Total

$mill

ion

Other liab

ies – lease l

iab

ies

272

239

437

310

1,258

2021

One year

or less

$mill

ion

Between

one year and

two years

$mill

ion

Between

two years and

ﬁve years

$mill

ion

More than

ﬁve years

$mill

ion

Total

$mill

ion

Other liab

ies – lease l

iab

ies

293

247

521

175

1,236

415

Standard Chartered

– Annual Report 2022

Financ

ial statements

20. Other assets

Accounting policy

Refer to Note 13 Financ

ial

instruments for the relevant accounting policy.

Commodit

ies represent phys

ical holdings where the Group has title and exposure to the Market Risk associated with the

holding.

Commodit

ies are fa

ir valued with the fair value derived from observable spot or short-term futures prices from relevant

exchanges.

Other assets include:

2022

$mill

ion

2021

$mill

ion

Financ

ial assets held at amort

ized cost (Note 13):

Hong Kong SAR Government certif

icates of

indebtedness (Note 23)¹

7,106

7,284

Cash collateral

12,515

9,217

Acceptances and endorsements

5,264

4,930

Unsettled trades and other ﬁnancial assets

14,410

18,637

39,295

40,068

Non-ﬁnancial assets:

Commodit

ies and em

iss

ions cert

icates²

10,598

9,265

Other assets

490

599

50,383

49,932

The Hong Kong SAR Government certif

icates of

indebtedness are subordinated to the claims of other parties in respect of bank notes issued

Commodit

ies and em

iss

ions cert

icates are carr

ied at fair value less costs to sell, $6 bill

ion (31 December 2021: $5.7 b

ill

ion) are class

ied as Level 1 and $4.6 b

ill

ion

are classif

ied as Level 2 (31 December 2021: $3.6 b

ill

ion)

21. Assets held for sale and associated liab

ies

Accounting Policy

Non-current assets are classif

ied as held for sale and measured at the lower of the

ir carrying amount and fair value less cost

to sell when:

a) Their carrying amounts will be recovered princ

ipally through sale.

b) They are available for immed

iate sale

in their present condit

ion; and

c) Their sale is highly probable.

Immediately before the in

ial classif

icat

ion as held for sale, the carrying amounts of the assets are measured in accordance

with the applicable accounting polic

ies related to the asset or l

iab

ity before reclassif

icat

ion as held for sale. Upon

reclassif

icat

ion property, plant and equipment are measured at the lower of their carrying amount and fair value less costs to

sell. Financ

ial

instruments continue to be measured per the accounting polic

ies

in Note 13 Financ

ial

instruments.

The assets below have been presented as held for sale following the approval of Group management and the transactions are

expected to complete in 2023.

Following a decis

ion by the Board of D

irectors to exit certain markets in Africa & Middle East, the assets and liab

ies of those

markets have been moved to ‘Held for sale’.

Assets held for sale

The ﬁnancial assets reported below are class

ied under Level 1 $345 m

ill

ion (2021: N

il), Level 2 $946mill

ion (2021: N

il) and Level 3

$100 mill

ion (2021: $95 m

ill

ion).

416

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

21. Assets held for sale and associated liab

ies

continued

2022

$mill

ion

2021

$mill

ion

Financ

ial assets held at fa

ir value through proﬁt or loss

Loans and advances to customers

–

Equity shares

Derivat

ive ﬁnancial

instruments – Assets

–

Financ

ial assets held at amort

ised cost

1,388

Cash and balances at central banks

423

–

Loans and advances to banks

–

Loans and advances to customers

508

Debt securit

ies held at amort

ised cost

376

–

Goodwill and intang

ible assets

–

Property, plant and equipment

174

239

Vessels¹

133

230

Others

–

1,625

334

1 Disposal of property, plant and equipment classif

ied under assets held for sale dur

ing 2022 was $79 mill

ion (2021: $149 m

ill

ion).

Liab

ies held for sale

The ﬁnancial l

iab

ies reported below are class

ied under Level 1 $402m

ill

ion (2021: N

il) and Level 2 $833 mill

ion (2021: N

il).

2022

$mill

ion

2021

$mill

ion

Financ

ial l

iab

ies held at fa

ir value through proﬁt or loss

–

Derivat

ive ﬁnancial

instruments

–

Financ

ial l

iab

ies held at amort

ised cost

1,230

–

Deposits by banks

–

Customer accounts

1,213

–

Other liab

ies

–

Provis

ions for l

iab

ies and charges

–

1,307

–

417

Standard Chartered

– Annual Report 2022

Financ

ial statements

22. Debt securit

ies

in issue

Accounting policy

Refer to Note 13 Financ

ial

instruments for the relevant accounting policy.

2022

2021

Certif

icates

of deposit

of $100,000

or more

$mill

ion

Other debt

securit

ies

in issue

$mill

ion

Total

$mill

ion

Certif

icates

of deposit

of $100,000

or more

$mill

ion

Other debt

securit

ies

in issue

$mill

ion

Total

$mill

ion

Debt securit

ies

in issue

23,457

37,785

61,242

23,896

37,397

61,293

Debt securit

ies

in issue included with

in:

Financ

ial l

iab

ies held at fa

ir value

through proﬁt or loss (Note13)

–

8,572

–

5,597

Total debt securit

ies

in issue

23,457

46,357

69,814

23,896

42,994

66,890

In 2022, the Company issued a total of $5.2 bill

ion sen

ior notes for general business purposes of the Group as shown below:

Securit

ies

$mill

ion

CNH 1,100 mill

ion ﬁxed rate sen

ior notes due 2026 (callable 2025)

158

$1,250 mill

ion ﬁxed rate sen

ior notes due 2028 (callable 2027)

1,250

$1,000 mill

ion ﬁxed rate sen

ior notes due 2026 (callable 2025)

1,000

$500 mill

ion ﬂoat

ing rate senior notes due 2026 (callable 2025)

500

SGD 255 mill

ion ﬁxed rate sen

ior notes due 2033 (callable 2032)

190

HKD 800 mill

ion ﬁxed rate sen

ior notes due 2025 (callable 2024)

102

$1,000 mill

ion ﬁxed rate sen

ior notes due 2025 (callable 2024)

1,000

$1,000 mill

ion ﬁxed rate sen

ior notes due 2028 (callable 2027)

1,000

Total Senior Notes issued

5,200

In 2021, the Company issued a total of $6.8 bill

ion sen

ior notes for general business purposes of the Group as shown below:

Securit

ies

$mill

ion

$500 mill

ion ﬁxed rate sen

ior notes due 2025 (callable 2024)

500

$500 mill

ion ﬂoat

ing rate senior notes due 2025 (callable 2024)¹

500

EUR 500 mill

ion ﬁxed rate sen

ior notes due 2029 (callable 2028)

569

$1,000 mill

ion ﬁxed rate sen

ior notes due 2025 (callable 2024)

1,000

$1,250 mill

ion ﬁxed rate sen

ior notes due 2032 (callable 2031)

1,250

$1,500 mill

ion ﬁxed rate sen

ior notes due 2025 (callable 2024)

1,500

$1,500 mill

ion ﬁxed rate sen

ior notes due 2027 (callable 2026)

1,500

Total Senior Notes issued

6,819

These notes will be subject to remediat

ion under

interest rate benchmark reform. Please refer to Note 13 for further informat

ion on th

418

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

23. Other liab

ies

Accounting policy

Refer to Note 13 Financ

ial

instruments for the relevant accounting policy for ﬁnanc

ial l

iab

ies, Note 19 Leased assets for the

accounting policy for leases, and Note 31 Share-based payments for the accounting policy for cash-settled share-based

payments.

2022

$mill

ion

2021

$mill

ion

Financ

ial l

iab

ies held at amort

ised cost (Note 13)

Notes in circulat

ion

7,106

7,284

Acceptances and endorsements

5,264

4,930

Cash collateral

9,206

8,092

Property leases²

1,029

1,170

Equipment leases²

Unsettled trades and other ﬁnancial l

iab

ies

20,302

21,940

42,915

43,433

Non-ﬁnancial l

iab

ies

Cash-settled share-based payments

Other liab

ies

531

826

43,527

44,314

Hong Kong currency notes in circulat

ion of $7,106 m

ill

ion (2021: $7,284 m

ill

ion) that are secured by the Government of Hong Kong SAR cert

icates of

indebtedness

of the same amount included in Other assets (Note 20)

Other ﬁnancial l

iab

ies

include the present value of lease liab

ies, as requ

ired by IFRS 16 from 1 January 2019; refer to Note 19

24. Provis

ions for l

iab

ies and charges

Accounting policy

The Group recognises a provis

ion for a present legal or construct

ive obligat

ion result

ing from a past event when it is more

likely than not that it will be required to transfer economic beneﬁts to settle the obligat

ion and the amount of the obl

igat

ion

can be estimated reliably. Where a liab

ity arises based on partic

ipat

ion in a market at a specif

ied date, the obl

igat

ion

recognised in the ﬁnanc

ial statements on that date and

is not accrued over the period.

Other accounting estimates and judgements

The recognit

ion and measurement of prov

ions for l

iab

ies and charges requ

ires sign

iﬁcant judgement and the use of

estimates about uncertain future condit

ions or events.

Estimates include the best estimate of the probabil

ity of outﬂow of econom

ic resources, cost of settling a provis

ion and

tim

ing of settlement. Judgements are requ

ired for inherently uncertain areas such as legal decis

ions (

includ

ing external

advice obtained), and outcome of regulator reviews.

2022

2021

Provis

ion

for credit

commitments

$mill

ion

Other

provis

ions

$mill

ion

Total

$mill

ion

Provis

ion

for credit

commitments

$mill

ion

Other

provis

ions

$mill

ion

Total

$mill

ion

At 1 January

346

107

453

367

466

Exchange translation differences

(39)

(2)

(41)

(1)

Transfer

–

Charge against proﬁt

(27)

(30)

Provis

ions ut

ised

–

(71)

–

(47)

At 31 December

280

103

383

346

107

453

Provis

ion for cred

it commitment comprises those undrawn contractually committed facil

ies where there is doubt as to the

borrowers’ abil

ity to meet the

ir repayment obligat

ions.

Other provis

ions

include $14 mill

ion (31 December 2021: $17 m

ill

ion) recogn

ised for certain contracts with suppliers for which the

unavoidable costs of meeting the obligat

ions exceed the econom

ic beneﬁts expected to be received. It is expected that the

costs will be incurred over the next 5 years.

Other provis

ions cons

ist mainly of provis

ions for legal cla

ims and regulatory and enforcement invest

igat

ions and proceedings.

419

Standard Chartered

– Annual Report 2022

Financ

ial statements

25. Contingent liab

ies and comm

itments

Accounting policy

Financ

ial guarantee contracts and loan comm

itments

The Group issues ﬁnanc

ial guarantee contracts and loan comm

itments in return for fees. Financ

ial guarantee contracts and

any loan commitments issued at below-market interest rates are in

ially recognised at their fair value as a ﬁnanc

ial l

iab

ity,

and subsequently measured at the higher of the in

ial value less the cumulative amount of income recognised in accordance

with the princ

iples of IFRS 15 Revenue from Contracts w

ith Customers and their expected credit loss provis

ion. Loan

commitments may be designated at fair value through proﬁt or loss where that is the business model under which such

contracts are held. Notional values of ﬁnanc

ial guarantee contracts and loan comm

itments are disclosed in the table below.

Financ

ial guarantees, trade cred

its and irrevocable letters of credit are the notional values of contracts issued by the Group’s

Transaction Banking business for which an obligat

ion to make a payment has not ar

isen at the reporting date. Transaction

Banking will issue contracts to clients and counterparties of clients, whereby in the event the holder of the contract is not

paid, the Group will reimburse the holder of the contract for the actual ﬁnanc

ial loss suffered. These contracts have var

ious

legal forms such as letters of credit, guarantee contracts and performance bonds. The contracts are issued to facil

itate trade

through export and import business, provide guarantees to ﬁnanc

ial

inst

itut

ions where the Group has a local presence, as

well as guaranteeing project ﬁnanc

ing

involv

ing large construct

ion projects undertaken by sovereigns and corporates. The

contracts may contain performance clauses which require the counterparty performing services or provid

ing goods to meet

certain condit

ions before a r

ight to payment is achieved, however the Group does not guarantee this performance. The

Group will only guarantee the credit of the counterparty paying for the services or goods.

Commitments are where the Group has conﬁrmed its intent

ion to prov

ide funds to a customer or on behalf of a customer

under prespecif

ied terms and cond

ions

in the form of loans, overdrafts, future guarantees whether cancellable or not and

the Group has not made payments at the balance sheet date; those instruments are included in these ﬁnanc

ial statements

as commitments. Commitments and contingent liab

ies are generally cons

idered on demand as the Group may have to

honour them, or the client may draw down at any time.

Capital commitments are contractual commitments the Group has entered into to purchase non-ﬁnanc

ial assets.

The table below shows the contract or underlying princ

ipal amounts of unmatured off-balance sheet transact

ions at the

balance sheet date. The contract or underlying princ

ipal amounts

ind

icate the volume of bus

iness outstanding and do not

represent amounts at risk.

2022

$mill

ion

2021

$mill

ion

Financ

ial guarantees and trade cred

its

Financ

ial guarantees, trade cred

its and irrevocable letters of credit

60,410

58,535

60,410

58,535

Commitments

Undrawn formal standby facil

ies, credit lines and other commitments to lend

One year and over

69,597

69,542

Less than one year

31,688

27,306

Uncondit

ionally cancellable

67,383

61,675

168,668

158,523

Capital commitments

Contracted capital expenditure approved by the directors but not provided for in these accounts¹

257

124

Of which the Group has commitments totalling $209 mill

ion to purchase a

ircraft for delivery in 2023 (2021: $96 mill

ion). Pre-del

ivery payments of $40 mill

ion

(2021: $26 mill

ion) have been made

in respect of these commitments

As set out in Note 26, the Group has contingent liab

ies

in respect of certain legal and regulatory matters for which it is not

practicable to estimate the ﬁnanc

ial

impact as there are many factors that may affect the range of possible outcomes.

420

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

26. Legal and regulatory matters

Accounting policy

Where appropriate, the Group recognises a provis

ion for l

iab

ies when

it is probable that an outﬂow of economic resources

embodying economic beneﬁts will be required, and for which a reliable estimate can be made of the obligat

ion. The

uncertaint

ies

inherent in legal and regulatory matters affect the amount and tim

ing of any potent

ial outﬂows with respect

to which provis

ions have been establ

ished. These uncertaint

ies also mean that

it is not possible to give an aggregate

estimate of contingent liab

ies ar

ing from such legal and regulatory matters.

The Group receives legal claims against it in a number of jur

isd

ict

ions and

is subject to regulatory and enforcement

invest

igat

ions and proceedings from time to time. Apart from the matters described below, the Group currently considers none

of the ongoing claims, invest

igat

ions or proceedings to be ind

idually material. However, in light of the uncertaint

ies

involved in

such matters there can be no assurance that the outcome of a particular matter or matters currently not considered to be

material may not ultimately be material to the Group’s results in a particular reporting period depending on, among other

things, the amount of the loss resulting from the matter(s) and the results otherwise reported for such period.

Since 2014, the Group has been named as a defendant in a series of lawsuits that have been ﬁled in the United States Distr

ict

Courts for the Southern and Eastern Distr

icts of New York aga

inst a number of banks (includ

ing Standard Chartered Bank or

its

afﬁliates) on behalf of pla

int

iffs who are, or are relat

ives of, vict

ims of var

ious terrorist attacks in Iraq and Afghanistan. The most

recent lawsuit was ﬁled in April 2022 and concerns terrorist attacks that occurred in Afghanistan between 2013 and 2016. None

of these lawsuits have specif

ied the amount of damages cla

imed. The plaint

iffs

in each of these lawsuits have alleged that the

defendant banks aided and abetted the unlawful conduct of parties with connections to terrorist organisat

ions

in breach of the

U.S. Anti-Terrorism Act. The courts have ruled in favour of the banks’ motions to dism

iss

in six of these lawsuits, includ

ing a rul

ing

issued in December 2022 in which the United States Distr

ict Court for the Eastern D

istr

ict of New York d

ism

issed a lawsu

it ﬁled in

August 2021. In January 2023 a panel of the United States Court of Appeals for the Second Circu

it upheld a September 2019

ruling by the United States Distr

ict Court for the Eastern D

istr

ict of New York

in which a lawsuit ﬁled in November 2014 was

dism

issed. Wh

ile a ruling is awaited in respect of the Group’s motion to dism

iss the lawsu

it ﬁled in April 2022, the other lawsuits

are currently stayed pending a ruling by the United States Supreme Court in another U.S. Anti-Terrorism Act case in which SCB is

not involved. An appeal from the December 2022 dism

issal rul

ing is also pending.

In January 2020, a shareholder derivat

ive compla

int was ﬁled by the City of Philadelph

in New York State Court against 45

current and former directors and senior ofﬁcers of the Group. It is alleged that the ind

iduals breached their duties to the Group

and caused a waste of corporate assets by permitt

ing the conduct that gave r

ise to the costs and losses to the Group related to

legacy conduct and control issues. In March 2021, an amended complaint was served in which SCB and seven ind

iduals were

removed from the case. Standard Chartered PLC and Standard Chartered Holdings Lim

ited rema

ined as named “nominal

defendants” in the complaint. In May 2021, Standard Chartered PLC ﬁled a motion to dism

iss the compla

int. In February 2022,

the New York State Court ruled in favour of Standard Chartered PLC’s motion to dism

iss the compla

int. The plaint

iffs are

pursuing an appeal against the February 2022 ruling. A hearing date for the plaint

iffs’ appeal

is awaited.

Since October 2020, four lawsuits have been ﬁled in the English High Court against Standard Chartered PLC on behalf of more

than 300 shareholders in relation to alleged untrue and/or mislead

ing statements and/or om

iss

ions

in informat

ion publ

ished by

Standard Chartered PLC in its rights issue prospectuses of 2008, 2010 and 2015 and/or public statements regarding the Group’s

histor

ic sanct

ions, money laundering and ﬁnanc

ial cr

ime compliance issues. These lawsuits have been brought under sections

90 and 90A of the Financ

ial Serv

ices and Markets Act 2000. These lawsuits are at an early procedural stage.

Bernard Madoff’s 2008 confession to running a Ponzi scheme through Bernard L. Madoff Investment Securit

ies LLC (BMIS) gave

rise to a number of lawsuits against the Group. BMIS and the Fairf

ield funds (wh

ich invested in BMIS) are in bankruptcy and

liqu

idat

ion, respectively. Between 2010 and 2012, ﬁve lawsuits were brought against the Group by the BMIS bankruptcy trustee

and the Fairf

ield funds’ l

iqu

idators,

in each case seeking to recover funds paid to the Group’s clients pursuant to redemption

requests made prior to BMIS’ bankruptcy ﬁl

ing. The total amount sought

in these cases exceeds USD 300 mill

ion, exclud

ing any

pre-judgment interest that may be awarded. The four lawsuits commenced by the Fairf

ield funds’ l

iqu

idators have been

dism

issed and the appeals of those d

ism

issals by the funds’ l

iqu

idators are ongo

ing.

The Group has concluded that the threshold for recording provis

ions pursuant to IAS 37 Prov

ions, Cont

ingent Liab

ies and

Contingent Assets is not met with respect to the above matters; however, the outcomes of these lawsuits are inherently

uncertain and diff

icult to pred

ict.

421

Standard Chartered

– Annual Report 2022

Financ

ial statements

27. Subordinated liab

ies and other borrowed funds

Accounting policy

Subordinated liab

ies and other borrowed funds are class

ied as ﬁnancial

instruments. Refer to Note 13 Financ

ial

instruments for the accounting policy.

All subordinated liab

ies are unsecured, unguaranteed and subord

inated to the claims of other creditors includ

ing w

ithout

lim

itat

ion, customer deposits and deposits by banks. The Group has the right to settle these debt instruments in certain

circumstances as set out in the contractual agreements. Where a debt instrument is callable, the issuer has the right to call.

2022

$mill

ion

2021

$mill

ion

Subordinated loan capital – issued by subsid

iary undertak

ings

£200 mill

ion 7.75 per cent subord

inated notes (callable 2022)¹

–

$700 mill

ion 8.0 per cent subord

inated notes due 2031 (callable 2026)¹

345

418

345

466

Subordinated loan capital – issued by the Company

Primary capital ﬂoating rate notes:

$400 mill

ion ﬂoat

ing rate undated subordinated notes

$300 mill

ion ﬂoat

ing rate undated subordinated notes (Series 2)

$400 mill

ion ﬂoat

ing rate undated subordinated notes (Series 3)

$200 mill

ion ﬂoat

ing rate undated subordinated notes (Series 4)

£900 mill

ion 5.125 per cent subord

inated notes due 2034

587

848

$2 bill

ion 5.7 per cent subord

inated notes due 2044

2,172

2,361

$2 bill

ion 3.95 per cent subord

inated notes due 2023

1,999

2,027

$1 bill

ion 5.7 per cent subord

inated notes due 2022

–

1,000

$1 bill

ion 5.2 per cent subord

inated notes due 2024

1,017

1,049

$750 mill

ion 5.3 per cent subord

inated notes due 2043

679

788

€750 mill

ion 3.625 per cent subord

inated notes due 2022

–

868

€500 mill

ion 3.125 per cent subord

inated notes due 2024

502

585

$1.25 bill

ion 4.3 per cent subord

inated notes due 2027

1,119

1,250

$1 bill

ion 3.516 per cent subord

inated notes due 2030 (callable 2025)

938

1,012

$500 mill

ion 4.886 per cent subord

inated notes due 2033 (callable 2028)

473

543

£ 96.035m 7.375% non-cumulative Irredeemable preference shares (reclassed as Debt)

116

129

£ 99.250m 8.25% non-cumulative Irredeemable preference shares (reclassed as Debt)

119

134

$750 mill

ion 3.604% ﬁxed rate reset dated subord

inated notes due 2033

630

–

€ 1 bill

ion 2.5 per cent subord

inated debt 2030

967

1,123

$1.25 bill

ion 3.265 per cent subord

inated notes due 2036

1,002

1,188

€1 bill

ion 1.200 per cent. ﬁxed rate reset dated subord

inated notes due 2031

891

1,114

13,370

16,180

Total for Group

13,715

16,646

Issued by Standard Chartered Bank

In the balance sheet of the Company the amount recognised is $13,684 mill

ion (2021: $16,162 m

ill

ion), w

ith the difference being external notes and the effect of

hedge accounting achieved on a Group basis

These notes will be subject to remediat

ion under

interest rate benchmark reform. Please refer to Note 13 for further informat

ion on th

422

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

27. Subordinated liab

ies and other borrowed funds

continued

2022

USD

$mill

ion

GBP

$mill

ion

EUR

$mill

ion

Total

$mill

ion

Fixed rate subordinated debt

10,372

822

2,360

13,554

Floating rate subordinated debt

161

–

161

Total

10,533

822

2,360

13,715

2021

USD

$mill

ion

GBP

$mill

ion

EUR

$mill

ion

Total

$mill

ion

Fixed rate subordinated debt

11,636

1,160

3,689

16,485

Floating rate subordinated debt

161

–

161

Total

11,797

1,160

3,689

16,646

Redemptions and repurchases during the year

On 25 January 2022, Standard Chartered PLC exercised its right to redeem USD 1 bill

ion 5.7 per cent subord

inated notes 2022.

Further redemption of €750 mill

ion 3.625 per cent subord

inated notes 2022 & £200 mill

ion 7.75 per cent subord

inated notes 2022

was made during the year 2022.

Issuance during the year

On 12 January 2022, Standard Chartered PLC issued USD 750 mill

ion 3.603 per cent ﬁxed rate reset dated subord

inated notes

due 2033.

28. Share capital, other equity instruments and reserves

Accounting policy

Financ

ial

instruments issued are classif

ied as equ

ity when there is no contractual obligat

ion to transfer cash or other ﬁnancial

assets, or no obligat

ion to

issue a variable number of own equity instruments. Incremental costs directly attributable to the

issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Securit

ies wh

ich carry a discret

ionary coupon and have no ﬁxed matur

ity or redemption date are classif

ied as other equ

ity

instruments. Interest payments on these securit

ies are recogn

ised, net of tax, as distr

ibut

ions from equity in the period in

which they are paid.

Where the Company or other members of the consolidated Group purchase the Company’s equity share capital, the

considerat

ion pa

id is deducted from the total shareholders’ equity of the Group and/or of the Company as treasury shares

until they are cancelled. Where such shares are subsequently sold or reissued, any considerat

ion rece

ived is included in

shareholders’ equity of the Group and/or the Company.

Number of

ordinary

mill

ions

Ordinary

capital

$mill

ion

Ordinary

premium

$mill

ion

Preference

premium

$mill

ion

Total share

capital and

share premium

$mill

ion

Other

equity

instruments

$mill

ion

At 1 January 2021

3,156

1,578

3,986

1,494

7,058

4,518

Cancellation of shares includ

ing

share buy-back

(77)

(39)

–

(39)

–

Addit

ional T

ier 1 equity issuance

–

2,728

Addit

ional T

ier 1 equity redemption

–

(992)

Other movements

–

At 31 December 2021

3,079

1,539

3,989

1,494

7,022

6,254

Cancellation of shares includ

ing

share buy-back

(184)

(92)

–

(92)

–

Addit

ional T

ier 1 equity issuance

–

1,240

Addit

ional T

ier 1 redemption

–

(990)

At 31 December 2022

2,895

1,447

3,989

1,494

6,930

6,504

Issued and fully paid ordinary shares of 50 cents each

2 Includes preference share capital of $75,000

423

Standard Chartered

– Annual Report 2022

Financ

ial statements

28. Share capital, other equity instruments and reserves

continued

Share buy-back

On 18 February 2022, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each.

Nominal value of share purchases was $56 mill

ion, and the total cons

iderat

ion pa

id was $754 mill

ion (

includ

ing $4 m

ill

ion of fees

and stamp duty), The buy-back completed on 19 May 2022. The total number of shares purchased was 111,295,408, representing

3.61 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital

redemption reserve account. The shares were purchased by Standard Chartered PLC on various exchanges not includ

ing the

Hong Kong Stock Exchange.

Number of

ordinary

Highest

price paid

Lowest

price paid

Average price

paid per share

Aggregate

price paid

Aggregate

price paid

February 2022

14,397,852

5.85000

5.14800

5.55490

79,978,036

107,767,620

March 2022

49,510,420

5.44800

4.31400

4.94560

244,860,409

322,288,357

April 2022

29,085,345

5.27000

4.78700

5.05870

147,135,270

190,912,883

May 2022

18,301,791

5.99400

5.44800

5.71980

104,682,211

129,028,610

August 2022

27,826,349

6.23600

5.61600

5.97660

166,308,114

199,113,059

September 2022

34,714,694

6.27000

5.51400

5.93440

206,009,962

232,644,256

October 2022

10,532,794

5.91800

5.49600

5.74910

60,554,337

68,239,759

Ordinary share capital

In accordance with the Companies Act 2006 the Company does not have authorised share capital. The nominal value of each

ordinary share is 50 cents.

During the period nil shares were issued under employee share plans.

Preference share capital

At 30 June 2022, the Company has 15,000 $5 non-cumulative redeemable preference shares in issue, with a premium of $99,995

making a paid up amount per preference share of $100,000. The preference shares are redeemable at the option of the

Company and are classif

ied

in equity.

The available proﬁts of the Company are distr

ibuted to the holders of the

issued preference shares in prior

ity to payments

made to holders of the ordinary shares and in prior

ity to, or par

i passu with, any payments to the holders of any other class of

shares in issue. On a wind

ing up, the assets of the Company are appl

ied to the holders of the preference shares in prior

ity to

any payment to the ordinary shareholders and in prior

ity to, or par

i passu with, the holders of any other shares in issue, for an

amount equal to any div

idends payable (on approval of the Board) and the nom

inal value of the shares together with any

premium as determined by the Board. The redeemable preference shares are redeemable at the paid up amount (which

includes premium) at the option of the Company in accordance with the terms of the shares. The holders of the preference

shares are not entitled to attend or vote at any general meeting except where any relevant div

idend due

is not paid in full or

where a resolution is proposed varying the rights of the preference shares.

Other equity instruments

The table provides details of outstanding ﬁxed rate resetting perpetual subordinated contingent convertible AT1 securit

ies

issued by Standard Chartered PLC. All issuances are made for general business purposes and to increase the regulatory capital

base of the Group.

Issuance date

Nominal value

Proceeds net

of issue costs

Interest

rate

Coupon payment dates

First reset dates

Conversion price

per ordinary

18 August 2016

USD 999 mill

ion

USD 990 mill

ion

7.50%

2 April, 2 October each year

2 April 2022

USD 7.732

18 January 2017

USD 1,000 mill

ion

USD 992 mill

ion

7.75%

2 April, 2 October each year

2 April 2023

USD 7.732

3 July 2019

SGD 750 mill

ion

USD 552 mill

ion

5.375%

3 April, 3 October each year

3 October 2024

SGD 10.909

26 Jun 2020

USD 1,000 mill

ion

USD 992 mill

ion

26 January, 26 July each year

26 January 2026

USD 5.331

14 January 2021

USD 1,250 mill

ion

USD 1,239 mill

ion

4.75%

14 January, 14 July each year

14 July 2031

USD 6.353

19 August 2021

USD 1,500 mill

ion

USD 1,489 mill

ion

4.30%

19 February, 19 August each year

19 August 2028

USD 6.382

15 August 2022

USD 1,250 mill

ion

USD 1,239 mill

ion

7.75%

15 February, 15 August each year

15 February 2028

USD 7.333

During the period, the Group repurchased around USD 1,001 mill

ion of these secur

ies v

ia a tender offer

Interest rates for the period from (and includ

ing) the

issue date to (but excluding) the ﬁrst reset date

3 Interest payable semi-annually in arrears

4 Securit

ies are resettable each date fall

ing ﬁve years, or an integral multiple of ﬁve years, after the ﬁrst reset date

Standard Chartered PLC redeemed $999 mill

ion ﬁxed rate resett

ing perpetual contingent convertible securit

ies on

its ﬁrst

optional redemption date of 2 April 2022.

The AT1 issuances above are primar

ily purchased by

inst

itut

ional investors.

424

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

28. Share capital, other equity instruments and reserves

continued

The princ

ipal terms of the AT1 secur

ies are descr

ibed below:

•

The securit

ies are perpetual and redeemable, at the opt

ion of Standard Chartered PLC in whole but not in part, on the ﬁrst

interest reset date and each date falling ﬁve years after the ﬁrst reset date

•

The securit

ies are also redeemable for certa

in regulatory or tax reasons on any date at 100 per cent of their princ

ipal amount

together with any accrued but unpaid interest up to (but excluding) the date ﬁxed for redemption. Any redemption is subject

to Standard Chartered PLC giv

ing not

ice to the relevant regulator and the regulator granting permiss

ion to redeem

•

Interest payments on these securit

ies w

ill be accounted for as a div

idend.

•

Interest on the securit

ies

is due and payable only at the sole and absolute discret

ion of Standard Chartered PLC, subject to

certain addit

ional restr

ict

ions set out

in the terms and condit

ions. Accord

ingly, Standard Chartered PLC may at any time elect

to cancel any interest payment (or part thereof) which would otherwise be payable on any interest payment date.

•

The securit

ies convert

into ordinary shares of Standard Chartered PLC, at a pre-determined price detailed in the table above,

should the fully loaded Common Equity Tier 1 ratio of the Group fall below 7.0 per cent. Approximately 947 mill

ion ord

inary

shares would be required to satisfy the conversion of all the securit

ies ment

ioned above

The securit

ies rank beh

ind the claims against Standard Chartered PLC of (a) unsubordinated creditors, (b) which are expressed

to be subordinated to the claims of unsubordinated creditors of Standard Chartered PLC but not further or otherwise; or (c)

which are, or are expressed to be, jun

ior to the cla

ims of other creditors of Standard Chartered PLC, whether subordinated or

unsubordinated, other than claims which rank, or are expressed to rank, pari passu with, or jun

ior to, the cla

ims of holders of the

AT1 securit

ies

in a wind

ing–up occurr

ing prior to the conversion trigger.

Reserves

The constituents of the reserves are summarised as follows:

•

The capital reserve represents the exchange difference on redenominat

ion of share cap

ital and share premium from sterling

to US dollars in 2001. The capital redemption reserve represents the nominal value of preference shares redeemed

•

The amounts in the “Capital and Merger Reserve” represents the premium aris

ing on shares

issued using a cash box ﬁnanc

ing

structure, which required the Company to create a merger reserve under section 612 of the Companies Act 2006. Shares were

issued using this structure in 2005 and 2006 to assist in the funding of Korea ($1.9 bill

ion) and Ta

iwan ($1.2 bill

ion) acqu

ions,

in 2008, 2010 and 2015 for the shares issued by way of a rights issue, primar

ily for cap

ital maintenance requirements and for

the shares issued in 2009 by way of an accelerated book build, the proceeds of which were used in the ordinary course of

business of the Group. The funding raised by the 2008, 2010 and 2015 rights issues and 2009 share issue was fully retained

with

in the Company. Of the 2015 fund

ing, $1.5 bill

ion was used to subscr

ibe to addit

ional equ

ity in Standard Chartered Bank,

a wholly owned subsid

iary of the Company. Apart from the Korea, Ta

iwan and Standard Chartered Bank funding, the merger

reserve is considered realised and distr

ibutable.

•

Own credit adjustment reserve represents the cumulative gains and losses on ﬁnanc

ial l

iab

ies des

ignated at fair value

through proﬁt or loss relating to own credit. Gains and losses on ﬁnanc

ial l

iab

ies des

ignated at fair value through

proﬁt or loss relating to own credit in the year have been taken through other comprehensive income into this reserve.

On derecognit

ion of appl

icable instruments the balance of any OCA will not be recycled to the income statement, but

will be transferred with

in equ

ity to retained earnings

•

Fair value through other comprehensive income (FVOCI) debt reserve represents the unrealised fair value gains and losses in

respect of ﬁnancial assets class

ied as FVOCI, net of expected cred

it losses and taxation. Gains and losses are deferred in this

reserve and are reclassif

ied to the

income statement when the underlying asset is sold, matures or becomes impa

ired.

•

FVOCI equity reserve represents unrealised fair value gains and losses in respect of ﬁnanc

ial assets class

ied as FVOCI, net of

taxation. Gains and losses are recorded in this reserve and never recycled to the income statement

•

Cash ﬂow hedge reserve represents the effective portion of the gains and losses on derivat

ives that meet the cr

iter

ia for

these types of hedges. Gains and losses are deferred in this reserve and are reclassif

ied to the

income statement when the

underlying hedged item affects proﬁt and loss or when a forecast transaction is no longer expected to occur

•

Translation reserve represents the cumulative foreign exchange gains and losses on translation of the net investment of the

Group in foreign operations. Since 1 January 2004, gains and losses are deferred to this reserve and are reclassif

ied to the

income statement when the underlying foreign operation is disposed. Gains and losses aris

ing from der

ivat

ives used as

hedges of net investments are netted against the foreign exchange gains and losses on translation of the net investment

of the foreign operations

•

Retained earnings represents proﬁts and other comprehensive income earned by the Group and Company in the current

and prior periods, together with the after tax increase relating to equity-settled share options, less div

idend d

istr

ibut

ions,

own shares held (treasury shares) and share buy-backs

A substantial part of the Group’s reserves is held in overseas subsid

iary undertak

ings and branches, princ

ipally to support local

operations or to comply with local regulations. The maintenance of local regulatory capital ratios could potentially restrict

the amount of reserves which can be remitted. In addit

ion,

if these overseas reserves were to be remitted, further unprovided

taxation liab

ies m

ight arise.

As at 31 December 2022, the distr

ibutable reserves of Standard Chartered PLC (the Company) were $13 b

ill

ion (31 December

2021: $15.0 bill

ion). These compr

ised retained earnings and $12.6 bill

ion of the merger reserve account. D

istr

ibut

ion of reserves

is subject to mainta

ing min

imum cap

ital requirements.

425

Standard Chartered

– Annual Report 2022

Financ

ial statements

28. Share capital, other equity instruments and reserves

continued

Own shares

Computershare Trustees (Jersey) Lim

ited

is the trustee of the 2004 Employee Beneﬁt Trust (‘2004 Trust’) and Ocorian Trustees

(Jersey) Lim

ited (formerly known as Bedell Trustees L

ited)

is the trustee of the 1995 Employees’ Share Ownership Plan Trust

(‘1995 Trust’). The 2004 Trust is used in conjunct

ion w

ith the Group’s employee share schemes and the 1995 Trust is used for the

delivery of other employee share-based payments (such as upfront shares and ﬁxed pay allowances). Group companies fund

these trusts from time to time to enable the trustees to acquire shares to satisfy these arrangements.

Except as disclosed, neither the Company nor any of its subsid

iar

ies has bought, sold or redeemed any securit

ies of the

Company listed on The Stock Exchange of Hong Kong Lim

ited dur

ing the period. Details of the shares purchased and held by

the trusts are set out below.

1995 Trust

2004 Trust

Total

2022

2021

2022

2021 ¹

2022

2021

Shares purchased during the period

–

30,203,531

36,487,747

30,203,531

36,487,747

Market price of shares purchased

($mill

ion)

–

218

237

218

237

Shares transferred between trusts

–

Shares held at the end of the period

–

27,525,624

22,461,243

27,525,624

22,461,243

Maximum number of shares held

during the period

27,976,046

23,076,993

Note that 35,768 shares were purchased by the trustee of the 2004 Trust using $0.2 mill

ion part

ipant sav

ings as part of Sharesave exercises

Div

idend wa

ivers

The trustees of the 2004 Trust, which holds ordinary shares in Standard Chartered PLC in connection with the operation of its

employee share plans, have lodged standing instruct

ions

in relation to shares held by them that have not been allocated to

employees, whereby any div

idend

is waived on the balance of ordinary shares and recalculated and paid at the rate of 0.01p

per share.

Changes in share capital and other equity instruments of Standard Chartered PLC subsid

iar

ies

The table below details the transactions in equity instruments (includ

ing convert

ible and hybrid instruments) of the Group’s

subsid

iar

ies, includ

ing

issuances, conversions, redemptions, purchase or cancellation. This is required under the Hong Kong

List

ing requ

irements, appendix 16 paragraph 10.

Name and registered address

Place of

incorporation

Descript

ion of shares

Issued/(redeemed)

capital

Issued/(redeemed)

Proportion

of shares

held

(%)

The following companies have the address

of 1 Basinghall Avenue, London, EC2V 5DD,

United Kingdom

Finventures UK Lim

ited

United Kingdom

$1.00 Ordinary shares

£25,000,000

25,000,000

100

Standard Chartered I H Lim

ited

United Kingdom

$1.00 Ordinary shares

$70,000,036

70,000,036

100

Standard Chartered Holdings Lim

ited

United Kingdom

$2.00 Ordinary shares

$45,000,036

22,500,018

100

Standard Chartered Strategic Investments

Lim

ited

United Kingdom

$1.00 Ordinary shares

$2,697,462

2,697,462

100

Standard Chartered UK Holdings Lim

ited

United Kingdom

$1.00 Ordinary shares

$114,079,067

114,079,067

100

Zodia Markets (UK) Lim

ited

United Kingdom

$1.00 Ordinary shares

$999,000

999,000

100

Zodia Markets Holdings Lim

ited

United Kingdom

$1.00 Ordinary shares

$7,501

7,501

75.01

The following companies have the address

of Thomas House, 84 Eccleston Square,

London, SW1V 1PX, United Kingdom

Zodia Custody Lim

ited

United Kingdom

$1.00 Ordinary shares

$14,240,000

14,240,000

95.1

Zodia Holdings Lim

ited

United Kingdom

$1.00 Ordinary-A shares

$24,990,000

24,990,000

100

The following companies have the address

of Spaces, 25 Wilton Road, Victor

ia,

London, SW1V 1LW, United Kingdom

Resolution Alliance Korea Ltd

Republic of Korea

KRW5,000 Ordinary

KRW (100,000,000)

(100,000,000)

100

426

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

Name and registered address

Place of

incorporation

Descript

ion of shares

Issued/(redeemed)

capital

Issued/(redeemed)

Proportion

of shares

held

(%)

The following companies have the address

of Suites 507,508,509,15th ﬂoor, Al Sarab

Tower, Adgm Square, Al Maryah Island,

Abu Dhabi, United Arab Emirates

United Arab

Emirates

Financ

ial Inclus

ion Technologies Ltd

Hong Kong

$1.00 Ordinary shares

$8,800,000

8,800,000

100

The following company has the address of

39/F, Oxford House,Taikoo Place,979 king’s

road, Quarry Bay, Hong Kong

Mox Bank Lim

ited

Hong Kong

HKD Ordinary shares

HKD639,794,864

63,979,486

65.98

The following company has the address of

Second Floor, Indiqube Edge, Khata No.

571/630/6/4, Sy.No.6/4, Ambalipura Village,

Varthur Hobli, Marathahalli Sub-Div

ion,

Ward No. 150, Bengaluru, 560102, India.

Standard Chartered Research and

Technology India Private Lim

ited

India

INR10.00 A Equity

INR64,673,130

6,467,313

99.601

The following company has the address of

StandardChartered@Chiromo, Number 48,

Westlands Road, P. O. Box 30003 – 00100,

Nairob

i, Kenya

Solvezy Technology Kenya Lim

ited

Kenya

KES1000.00 Ordinary

KES295,804,000

295,804

100

Tawi Fresh Kenya Lim

ited

Kenya

KES1,000.00 Ordinary

KES118,145,000

118,145

100

The following company has the address of

23 De Walden Street, London, W1G 8RW,

United Kingdom

Shoal Lim

ited

United Kingdom

$1.00 Ordinary shares

100

The following companies have the address

of 27, Fitzw

ill

iam Street, Dublin, D02 TP23,

Ireland

Zodia Custody (Ireland) Lim

ited

Ireland

$1.00 Ordinary shares

$10,000,000

10,000,000

100

The following companies have the address

of 8 Marina Boulevard, #27-01 Marina Bay

Financ

ial Centre Tower 1, 018981, S

ingapore

Standard Chartered Private Equity

(Singapore) Pte Ltd

Singapore

$ Ordinary shares

$25,000,000

25,000,000

100

The following company has the address of

77 Robinson Road, #25-00 Robinson 77,

068896, Singapore

Trust Bank Singapore Lim

ited

Singapore

SGD Ordinary shares

SGD96,000,000

96,000,000

Standard Chartered Bank Cote d’Ivoire, 23

Boulevard de la République, Abidjan 17, 17

B.P. 1141, Cote d’Ivoire

Standard Chartered Bank Cote d’ Ivoire SA

Cote d’Ivoire

XOF100,000 Ordinary

XOF2,508,000,000

25,080

100

26F, Fortune Financ

ial Centre, #5, Dong San

Huan Zhong Lu, Chaoyang Distr

ict , Be

ijing ,

100020, China

Standard Chartered Corporate Advisory

Co., Ltd.

China

$1.00

Ordinary shares

$(1,680,000)

(1,680,000)

100

The following companies have the address

of 80 Robinson Road, #02-00, 068898,

Singapore

Autumn Life Pte. Ltd.

Singapore

$ Ordinary-A shares

$9,400,000

9,400,000

96.4

Cardspal Pte. Ltd.

Singapore

$ Ordinary-A shares

$2,500,000

2,500,000

100

Pegasus Dealmaking Pte. Ltd.

Singapore

$ Ordinary shares

$71,999

71,999

100

Power2SME Pte. Ltd.

Singapore

$ Ordinary shares

$11,800,000

11,800,000

90.6

SCV Research and Development Pte. Ltd.

Singapore

$ Ordinary shares

$6,000,000

6,000,000

100

SCV Master Holding Company Pte Ltd

Singapore

$ Ordinary shares

$11,800,000

11,800,000

100

Solv-India Pte Ltd

Singapore

$ Ordinary shares

$23,000,000

23,000,000

100

28. Share capital, other equity instruments and reserves

continued

427

Standard Chartered

– Annual Report 2022

Financ

ial statements

Name and registered address

Place of

incorporation

Descript

ion of shares

Issued/(redeemed)

capital

Issued/(redeemed)

Proportion

of shares

held

(%)

8A, Hony Tower, 1st Financ

ial Street,

Nanshan Distr

ict, Shenzen, Ch

ina

SC Ventures Investment Management

(Shenzhen) Lim

ited

China

$1.00

Ordinary shares

$2,000,000

2,000,000

100

EX-26, Ground Floor, Bldg 16-Co Work,

Dubai Internet City, Dubai, United Arab

Emirates

Appro Onboarding Solutions FZ-LLC

United Arab

Emirates

AED1,000.00 Ordinary

AED6,803,000

6,803

100

The following company has the address of

32, Molesworth Street, Dublin 2, D02Y512,

Ireland

Zodia Markets (Ireland) Lim

ited

United Kingdom

$1.00 Ordinary Shares

$999,000

999,000

100

Redenominat

ion of £1.00 Ord

inary shares to $1.00 Ordinary shares

Redenominat

ion of £10.00 Ord

inary shares to $1.00 Ordinary shares

Please see Note 22 Debt securit

ies

in issue for issuances and redemptions of senior notes.

Please see Note 27 Subordinated liab

ies and other borrowed funds for

issuance and redemptions of subordinated liab

ies

and AT1 securit

ies.

Please see Note 40 Related undertakings of the Group for subsid

iar

ies liqu

idated, d

issolved or sold during the year.

29. Non-controlling interests

Accounting policy

Non-controlling interests are measured at the non-controlling interest’s proportionate share of the acquiree’s ident

iﬁable

net assets.

$mill

ion

At 1 January 2021

325

Comprehensive income for the year

(17)

Income in equity attributable to non-controlling interests

(15)

Other proﬁts attributable to non-controlling interests

(2)

Distr

ibut

ions

(31)

Other increases

At 31 December 2021

371

Comprehensive income for the year

(88)

Income in equity attributable to non-controlling interests

(42)

Other proﬁts attributable to non-controlling interests

(46)

Distr

ibut

ions

(31)

Other increases

At 31 December 2022

350

Movement related to non-controlling interests from Mox Bank Lim

ited

Movements related to non-controlling interests from Mox Bank Lim

ited ($39 m

ill

ion), Trust Bank S

ingapore Lim

ited ($47 m

ill

ion), Zod

ia Markets Holdings Lim

ited

($3 mill

ion), Power2SME Pte L

ited ($9 m

ill

ion)

28. Share capital, other equity instruments and reserves

continued

428

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

30. Retirement beneﬁt obligat

ions

Accounting policy

The Group operates pension and other post-retirement beneﬁt plans around the world, which can be categorised into

deﬁned contribut

ion plans and deﬁned beneﬁt plans. For deﬁned contr

ibut

ion plans, the Group pays contr

ibut

ions to

publicly or privately admin

istered pens

ion plans on a statutory or contractual basis, and such amounts are charged to

operating expenses. The Group has no further payment obligat

ions once the contr

ibut

ions have been pa

id.

For funded deﬁned beneﬁt plans, the liab

ity recognised in the balance sheet is the present value of the deﬁned beneﬁt

obligat

ion at the balance sheet date less the fa

ir value of plan assets. For unfunded deﬁned beneﬁt plans the liab

ity

recognised at the balance sheet date is the present value of the deﬁned beneﬁt obligat

ion.

The deﬁned beneﬁt obligat

ion

is calculated annually by independent actuaries using the projected unit method.

Actuarial gains and losses that arise are recognised in shareholders’ equity and presented in the statement of other

comprehensive income in the period they arise. The Group determines the net interest expense on the net deﬁned beneﬁt

liab

ity for the year by applying the discount rate used to measure the deﬁned beneﬁt obligat

ion at the beg

inn

ing of the

annual period to the net deﬁned beneﬁt liab

ity, taking into account any changes in the net deﬁned beneﬁt liab

ity during

the year as a result of contribut

ions and beneﬁt payments. Net

interest expense, the cost of the accrual of new beneﬁts,

beneﬁt enhancements (or reductions) and admin

istrat

ion expenses met directly from plan assets are recognised in the

income statement in the period in which they were incurred.

Other accounting estimates and judgements

There are many factors that affect the measurement of the retirement beneﬁt obligat

ions. Th

is measurement requires the

use of estimates, such as discount rates, inﬂat

ion, pens

ion increases, salary increases, and life expectancies which are

inherently uncertain. Discount rates are determined by reference to market yields at the end of the reporting period on

high-quality corporate bonds (or, in countries where there is no deep market in such bonds, government bonds) of a currency

and term consistent with the currency and term of the post-employment beneﬁt obligat

ions. Th

is is the approach adopted

across our geographies. Where there are inﬂat

ion-l

inked bonds available (e.g. United Kingdom and the eurozone), the Group

derives inﬂat

ion based on the market on those bonds, w

ith the market yield adjusted in respect of the United Kingdom to

take account of the fact that liab

ies are l

inked to Consumer Price Index inﬂat

ion, whereas the reference bonds are l

inked

to Retail Price Index inﬂat

ion. Where no

inﬂat

ion-l

inked bonds exist, we determine inﬂat

ion assumpt

ions based on a

combinat

ion of long-term forecasts and short-term

inﬂat

ion data. Salary growth assumpt

ions reﬂect the Group’s long-term

expectations, taking into account future business plans and macroeconomic data (primar

ily expected future long-term

inﬂat

ion). Demograph

ic assumptions, includ

ing mortal

ity and turnover rates, are typically set based on the assumptions

used in the most recent actuarial funding valuation, and will generally use industry standard tables, adjusted where

appropriate to reﬂect recent histor

ic exper

ience and/or future expectations. The sensit

ity of the liab

ies to changes

in these assumptions is shown in the Note below.

Retirement beneﬁt obligat

ions compr

ise:

2022

$mill

ion

2021

$mill

ion

Deﬁned beneﬁt plans obligat

ion

128

192

Deﬁned contribut

ion plans obl

igat

ion

Net obligat

ion

146

210

Retirement beneﬁt charge comprises:

2022

$mill

ion

2021

$mill

ion

Deﬁned beneﬁt plans

Deﬁned contribut

ion plans¹

332

315

Charge against proﬁt (Note 7)

390

377

The Group has during the year util

ised aga

inst deﬁned contribut

ion payments, $4 m

ill

ion forfe

ited pension contribut

ions

in respect of employees who left before

their interests vested fully. The residual balance of forfeited contribut

ions

is $17 mill

ion

The Group operates over 60 deﬁned beneﬁt plans across its geographies, many of which are closed to new entrants who now

join deﬁned contr

ibut

ion arrangements. The a

im of all these plans is, as part of the Group’s commitment to ﬁnanc

ial wellbe

ing

for employees, to give employees the opportunity to save appropriately for retirement in a way that is consistent with local

regulations, taxation requirements and market condit

ions. The deﬁned beneﬁt plans expose the Group to currency r

isk, interest

rate risk, investment risk and actuarial risks such as longevity risk.

The material holdings of government and corporate bonds shown partially hedge movements in the liab

ies result

ing from

interest rate and inﬂat

ion changes. Sett

ing aside movements from other drivers such as currency ﬂuctuation, the increases in

discount rates in most geographies over 2022 have led to lower liab

ies. These have been partly offset by decreases

in the

value of bonds held as well as poor performance of growth assets such as equit

ies and property, lead

ing to a fall in the pension

deﬁcit reported. These movements are shown as actuar

ial gains and losses in the tables below. Contribut

ions

into a number of

plans in excess of the amounts required to fund beneﬁts accruing have also helped to reduce the net deﬁc

it over the year.

The disclosures required under IAS 19 have been calculated by independent qualif

ied actuar

ies based on the most recent full

actuarial valuations updated, where necessary, to 31 December 2022.

429

Standard Chartered

– Annual Report 2022

Financ

ial statements

30. Retirement beneﬁt obligat

ions

continued

UK Fund

The Standard Chartered Pension Fund (the ‘UK Fund’) is the Group’s largest pension plan, representing 53 per cent (31 December

2021: 58 per cent) of total pension liab

ies. The UK Fund

is set up under a trust that is legally separate from the Bank (its formal

sponsor) and, as required by UK legislat

ion, at least one th

ird of the trustee directors are nominated by members; the remainder

are appointed by the Bank. The trustee directors have a ﬁduc

iary duty to members and are respons

ible for governing the UK

Fund in accordance with its Trust Deed and Rules.

The UK Fund was closed to new entrants from 1 July 1998 and closed to the accrual of new beneﬁts from 1 April 2018: all UK

employees are now offered membership of a deﬁned contribut

ion plan.

The ﬁnancial pos

ion of the UK Fund

is regularly assessed by an independent qualif

ied actuary. The fund

ing valuation as

at 31 December 2020 was completed in December 2021 by the Scheme Actuary, T Kripps of Will

is Towers Watson, us

ing

assumptions different from those, and agreed with the UK Fund trustee. It showed that the UK Fund was 92% funded at

that date, revealing a past service deﬁc

it of $153 m

ill

ion (£127 m

ill

ion).

To repair the deﬁc

it, three annual cash payments each of $40 m

ill

ion (£32.9 m

ill

ion) were agreed, w

ith the ﬁrst of these paid

in December 2021, and two further instalments to be paid in December 2022 and December 2023. However, the agreement

allowed that, if the funding posit

ion

improves to being at or near a surplus in future years, the payments due in 2022 and 2023

will be reduced or elim

inated. As a result of the Fund be

ing in surplus at the agreed measurement point of mid-year, no payment

was made in December 2022. As part of the 2020 valuation, in order to provide security for future contribut

ions an add

ional

$60 mill

ion nom

inal gilts (£50 mill

ion) were purchased and transferred

into the exist

ing escrow account of $132 m

ill

ion g

ilts

(£110 mill

ion), topp

ing it up to $192 mill

ion

The Group has not recognised any addit

ional l

iab

ity under IFRIC 14, as the Bank has control of any pension surplus under the

Trust Deed and Rules.

Overseas plans

The princ

ipal overseas deﬁned beneﬁt arrangements operated by the Group are

in Hong Kong, India, Jersey, Korea, Taiwan,

United Arab Emirates (UAE) and the United States of America (US). Plans in Hong Kong, India, Korea, Taiwan and UAE remain

open for accrual of future beneﬁts.

Key assumptions

The princ

ipal ﬁnancial assumpt

ions used at 31 December 2022 were:

Funded plans

UK Fund

Overseas Plans

2022

2021

2022

2021

Discount rate

4.8

2.0

1.2 – 5.4

0.4 – 3.1

Price Inﬂation

2.6

1.0 – 3.1

Salary increases

N/A

3.5 – 4.5

Pension increases

2.4

2.5

3.1

1.9 – 3.1²

The range of assumptions shown is for the funded deﬁned beneﬁt overseas plans in Hong Kong, Jersey, Korea, Taiwan, and the US. These comprise around 75 per

cent of the total liab

ies of overseas funded plans

The range of assumptions shown for 2021 also includes Germany

Unfunded plans

US post-retirement medical

Other

2022

2021

2022

2021

Discount rate

5.1

3.1

3.7 – 7.6

2.2 – 6.7

Price inﬂat

ion

2.5

2.0 – 4.0

Salary increases

N/A

4.0 – 7.8

3.7 – 7.0

Pension increases

N/A

0.0 – 2.4

0.0 – 2.6

Post-retirement medical rate

7% in 2022

reducing

by 0.5%

per annum to

5% in 2026

7% in 2021

reducing

by 0.5%

per annum to

5% in 2025

N/A

The range of assumptions shown is for the main unfunded deﬁned beneﬁt plans in Bahrain, India, Korea, Thailand, UAE and the UK. They comprise around

90 per cent of the total liab

ies of other unfunded plans

The princ

ipal non-ﬁnancial assumpt

ions are those made for UK life expectancy. The UK mortality tables are S3PMA for males

and S3PFA for females, projected by year of birth with the CMI 2019 improvement model with a 1.25% annual trend and in

ial

addit

ion parameter of 0.25%. Scal

ing factors of 92% for male pensioners, 92% for female pensioners, 92% for male dependants

and 82% for female dependants have been applied.

The resulting assumptions for life expectancy for the UK Fund are that a male member currently aged 60 will live for 27 years

(2021: 27 years) and a female member for 30 years (2021: 30 years) and a male member currently aged 40 will live for 29 years

(2021: 29 years) and a female member for 32 years (2021: 31 years) after their 60th birthdays.

430

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

30. Retirement beneﬁt obligat

ions

continued

Both ﬁnancial and non-ﬁnancial assumpt

ions can be expected to change in the future, which would affect the value placed on

the liab

ies. For example, changes at the report

ing date to one of the relevant actuarial assumptions, holding other

assumptions constant, would have affected the deﬁned beneﬁt obligat

ion by the amounts shown below:

•

If the discount rate increased by 25 basis points the liab

ity would reduce by approximately $30 mill

ion for the UK Fund

(2021: $65 mill

ion) and $15 m

ill

ion for the other plans (2021: $35 m

ill

ion)

•

If the rate of inﬂat

ion

increased by 25 basis points the liab

ity, allowing for the consequent impact on pension and salary

increases, would increase by approximately $20 mill

ion for the UK Fund (2021: $45 m

ill

ion) and $15 m

ill

ion for the other plans

(2021: $20 mill

ion)

•

If the rate salaries increase compared to inﬂat

ion

increased by 25 basis points the liab

ity would increase by nil for the

UK Fund (2021: nil) and approximately $10 mill

ion for the other plans (2021: $15 m

ill

ion)

•

If longevity expectations increased by one year the liab

ity would increase by approximately $35 mill

ion for the UK Fund

(2021: $80 mill

ion) and $10 m

ill

ion for the other plans (2021: $15 m

ill

ion)

Although this analysis does not take account of the full distr

ibut

ion of cash ﬂows expected, it does provide an approximat

ion of

the sensit

ity to the main assumptions. While changes in other assumptions would also have an impact, the effect would not

be as sign

iﬁcant.

Proﬁle of plan obligat

ions

Funded plans

Unfunded plans

UK Fund

Overseas

Post-retirement

medical

Other

Duration of the deﬁned beneﬁt obligat

ion (

in years)

(Duration of the deﬁned beneﬁt obligat

ion – 2021)

Beneﬁts expected to be paid from plans

Beneﬁts expected to be paid during 2023

Beneﬁts expected to be paid during 2024

Beneﬁts expected to be paid during 2025

Beneﬁts expected to be paid during 2026

Beneﬁts expected to be paid during 2027

Beneﬁts expected to be paid during 2028 to 2032

449

481

Fund values:

2022

2021

At 31 December

UK Fund

Overseas plans

UK Fund

Overseas

plans

Quoted

assets

$mill

ion

Unquoted

assets

$mill

ion

Total assets

$mill

ion

Quoted

assets

$mill

ion

Unquoted

assets

$mill

ion

Total assets

$mill

ion

Total assets

$mill

ion

Total assets

$mill

ion

Equit

ies

–

223

–

223

145

306

Government bonds

206

–

206

160

–

160

695

224

Corporate bonds

309

391

116

–

116

610

164

Absolute Return Fund

–

Hedge funds

–

Infrastructure

–

177

–

Property

–

126

–

127

Derivat

ives

–

Cash and equivalents

257

–

257

221

256

108

260

Others

–

Total fair value of assets

783

403

1,186

534

284

818

1,910

1,032

Self-investment is monitored closely and is less than $1 mill

ion of Standard Chartered equ

ies and bonds for 2022 (2021: <$1 m

ill

ion). Self-

investment is only allowed

where it is not practical to exclude it – for example through investment in index-tracking funds where the Group is a constituent of the relevant index

At 31 December

2022

2021

Funded plans

Unfunded plans

Funded plans

Unfunded plans

UK Fund

$mill

ion

Overseas

plans

$mill

ion

Post-

retirement

medical

$mill

ion

Other

$mill

ion

UK Fund

$mill

ion

Overseas

plans

$mill

ion

Post-

retirement

medical

$mill

ion

Other

$mill

ion

Total fair value of assets

1,186

818

N/A

1,910

1,032

N/A

Present value of liab

ies

(1,138)

(817)

(10)

(167)

(1,822)

(1,076)

(13)

(223)

Net pension plan asset/(obligat

ion)

(10)

(167)

(44)

(13)

(223)

431

Standard Chartered

– Annual Report 2022

Financ

ial statements

30. Retirement beneﬁt obligat

ions

continued

The pension cost for deﬁned beneﬁt plans was:

2022

Funded plans

Unfunded plans

UK Fund

$mill

ion

Overseas plans

$mill

ion

Post-retirement

medical

$mill

ion

Other

$mill

ion

Total

$mill

ion

Current service cost

–

Past service cost and curtailments

–

Settlement cost

–

Interest income on pension plan assets

(34)

(32)

–

(66)

Interest on pension plan liab

ies

–

Total charge to proﬁt before deduction of tax

(1)

–

Net losses on plan assets

486

113

–

599

Gains on liab

ies

(453)

(143)

(2)

(42)

(640)

Total losses/(gains) recognised directly in statement

of comprehensive income before tax

(30)

(2)

(42)

(41)

Deferred taxation

–

Total losses/(gains) after tax

(17)

(2)

(42)

(21)

Includes admin

istrat

ive expenses paid out of plan assets of $1 mill

ion (2021: $1 m

ill

ion)

Includes various small costs and gains from plan amendments and settlements in India, Kenya, Maurit

ius, South Korea and Sr

i Lanka

The actual return on the UK Fund assets was a loss of $452 mill

ion and on overseas plan assets was a loss of $82 m

ill

ion

2021

Funded plans

Unfunded plans

UK Fund

$mill

ion

Overseas plans

$mill

ion

Post-retirement

medical

$mill

ion

Other

$mill

ion

Total

$mill

ion

Current service cost

–

Past service cost and curtailments

–

(1)

–

(4)

(5)

Settlement cost

–

(3)

–

(1)

(4)

Interest income on pension plan assets

(26)

(27)

–

(53)

Interest on pension plan liab

ies

–

Total charge to proﬁt before deduction of tax

–

Net gains on plan assets

(6)

(65)

–

(71)

Gains on liab

ies

(87)

(10)

(2)

(9)

(108)

Total gains recognised directly in statement of

comprehensive income before tax

(93)

(75)

(2)

(9)

(179)

Deferred taxation

–

Total gains after tax

(93)

(58)

(2)

(9)

(162)

Includes admin

istrat

ive expenses paid out of plan assets of $1 mill

ion (2020: $2 m

ill

ion)

Includes various small costs and gains from plan amendments and settlements in India, Kenya, South Korea and Sri Lanka

The actual return on the UK Fund assets was a gain of $32 mill

ion and on overseas plan assets was a ga

in of $92 mill

ion

Movement in the deﬁned beneﬁt pension plans and post-retirement medical deﬁc

it dur

ing the year comprise:

Funded plans

Unfunded plans

UK Fund

$mill

ion

Overseas plans

$mill

ion

Post-retirement

medical

$mill

ion

Other

$mill

ion

Total

$mill

ion

Surplus/(deﬁcit) at January 2022

(44)

(13)

(223)

(192)

Contribut

ions

–

Current service cost

–

(47)

–

(6)

(53)

Past service cost and curtailments

–

(2)

–

(2)

Settlement costs and transfers impact

–

Net interest on the net deﬁned beneﬁt asset/liab

ity

–

(5)

(3)

Actuarial(losses)/gains

(33)

Assets held for sale

–

(4)

–

(2)

Exchange rate adjustment

(8)

–

Surplus/(deﬁcit) at 31 December 2022²

(10)

(167)

(128)

Includes admin

istrat

ive expenses paid out of plan assets of $1 mill

ion (2021: $1 m

ill

ion)

The deﬁcit total of $128 m

ill

ion

is made up of plans in deﬁc

it of $248 m

ill

ion (2021: $355 m

ill

ion) net of plans

in surplus with assets totalling $120 mill

ion

(2021: $163 mill

ion)

Assets held for sale includes funded and unfunded plans in Cameroon, Cote D’Ivoire, Jordan and Zimbabwe

432

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

30. Retirement beneﬁt obligat

ions

continued

Funded plans

Unfunded plans

UK Fund

$mill

ion

Overseas plans

$mill

ion

Post-retirement

medical

$mill

ion

Other

$mill

ion

Total

$mill

ion

(Deﬁcit)/surplus at January 2021

(48)

(124)

(16)

(246)

(434)

Contribut

ions

122

Current service cost

–

(55)

–

(9)

(64)

Past service cost and curtailments

–

Settlement costs and transfers impact

–

Net interest on the net deﬁned beneﬁt asset/liab

ity

(1)

(2)

–

(4)

(7)

Actuarial gains

179

Adjustment for Indonesia scheme

–

Exchange rate adjustment

(1)

–

Surplus/(deﬁcit) at 31 December 2021

(44)

(13)

(223)

(192)

Includes admin

istrat

ive expenses paid out of plan assets of $1 mill

ion (2020: $2 m

ill

ion)

The deﬁcit total of $192 m

ill

ion

is made up of plans in deﬁc

it of $355 m

ill

ion (2020: $476 m

ill

ion) net of plans

in surplus with assets totalling $163 mill

ion

(2020: $42 mill

ion)

The Group’s expected contribut

ion to

its deﬁned beneﬁt pension plans in 2023 is $61 mill

ion.

2022

2021

Assets

$mill

ion

Obligat

ions

$mill

ion

Total

$mill

ion

Assets

$mill

ion

Obligat

ions

$mill

ion

Total

$mill

ion

At 1 January 2022

2,942

(3,134)

(192)

2,957

(3,391)

(434)

Contribut

ions

(1)

123

(1)

122

Current service cost

–

(53)

–

(64)

Past service cost and curtailments

–

(2)

–

Settlement costs & impact of transfers

(5)

–

(6)

Interest cost on pension plan liab

ies

–

(69)

–

(60)

Interest income on pension plan assets

–

Beneﬁts paid out

(176)

176

–

(220)

220

–

Actuarial (losses)/gains

(599)

640

108

179

Assets held for sale

(18)

(2)

–

Exchange rate adjustment

(287)

290

(52)

At 31 December 2022

2,004

(2,132)

(128)

2,942

(3,134)

(192)

Includes employee contribut

ions of $1 m

ill

ion (2021: $1 m

ill

ion)

Includes admin

istrat

ive expenses paid out of plan assets of $1 mill

ion (2021: $1 m

ill

ion)

Impact of settlements relates to the buyout of a pension plan in Switzerland which was agreed in December.

4 Actuarial gain on obligat

ion compr

ises of $708 mill

ion ga

in (2021: $108 mill

ion ga

in) from ﬁnanc

ial assumpt

ion changes, $9 mill

ion ga

in (2021: $3 mill

ion ga

in) from

demographic assumption changes and $77 mill

ion loss (2021: $3 m

ill

ion loss) from exper

ience

433

Standard Chartered

– Annual Report 2022

Financ

ial statements

31. Share-based payments

Accounting policy

The Group operates equity-settled and cash-settled share-based compensation plans. The fair value of the employee

services (measured by the fair value of the awards granted) received in exchange for the grant of the shares and awards is

recognised as an expense. For deferred share awards granted as part of an annual performance award, the expense is

recognised over the period from the start of the performance period to the vesting date. For example, the expense for

three-year awards granted in 2023 in respect of 2022 performance, which vest in 2024-2026, is recognised as an expense over

the period from 1 January 2022 to the vesting dates in 2024-2026. For all other awards, the expense is recognised over the

period from the date of grant to the vesting date.

For equity-settled awards, the total amount to be expensed over the vesting period is determined by reference to the fair

value of the shares and awards at the date of grant, which excludes the impact of any non-market vesting condit

ions (for

example, proﬁtabil

ity and growth targets). The fair value of equity instruments granted is based on market prices, if

available, at the date of grant. In the absence of market prices, the fair value of the instruments is estimated using an

appropriate valuation technique, such as a binom

ial opt

ion pric

ing model. Non-market vest

ing condit

ions are

included in

assumptions for the number of shares and awards that are expected to vest.

At each balance sheet date, the Group revises its estimates of the number of shares and awards that are expected to vest. It

recognises the impact of the revis

ion of or

inal est

imates, if any, in the income statement and a corresponding adjustment

to equity over the remain

ing vest

ing period. Forfeitures prior to vesting attributable to factors other than the failure to satisfy

service condit

ions and non-market vest

ing condit

ions are treated as a cancellat

ion and the remain

ing unamort

ised charge

is debited to the income statement at the time of cancellation. The proceeds received net of any directly attributable

transaction costs are credited to share capital (nominal value) and share premium when awards in the form of options

are exercised.

Cash-settled awards are revalued at each balance sheet date and a liab

ity recognised on the balance sheet for all unpaid

amounts, with any changes in fair value charged or credited to staff costs in the income statement until the awards are

exercised. Where forfeitures occur prior to vesting that are attributable to factors other than a failure to satisfy service

condit

ions or market-based performance cond

ions, the cumulat

ive charge incurred up to the date of forfeiture is credited

to the income statement. Any revaluation related to cash-settled awards is recorded as an amount due from subsid

iary

undertakings.

Other accounting estimates and judgements

Share-based payments involve judgement and estimat

ion uncerta

inty in determin

ing the expenses and carry

ing values of

share awards at the balance sheet date.

•

LTIP awards are determined using an estimat

ion of the probab

ity of meet

ing certain metrics over a three-year

performance period using the Monte Carlo simulat

ion model.

•

Deferred shares and restricted shares are determined using an estimat

ion of expected d

idends.

•

The 2013 Sharesave Plan valuation is determined using a binom

ial opt

ion-pric

ing model.

The Group operates a number of share-based arrangements for its executive directors and employees. Details of the share-

based payment charge are set out below.

2022¹

2021¹

Cash

$mill

ion

Equity

$mill

ion

Total

$mill

ion

Cash

$mill

ion

Equity

$mill

ion

Total

$mill

ion

Deferred share awards

108

Other share awards

Total share-based payments

163

199

148

167

No forfeiture assumed

2021 Standard Chartered Share Plan (the ‘2021 Plan’) and 2011 Standard Chartered Share Plan (the ‘2011 Plan’)

The 2021 Plan was approved by shareholders in May 2021 and is the Group’s main share plan, replacing the 2011 Plan for new

awards, June 2021. It may be used to deliver various types of share awards to employees and former employees of the Group,

includ

ing d

irectors and former executive directors:

•

Long Term Incentive Plan (LTIP) awards: granted with vesting subject to performance measures. Performance measures

attached to awards granted previously include: relative total shareholder return (TSR); return on tangible equity (RoTE) (with

a Common Equity Tier 1 (CET1) underpin); and strategic measures. Each measure is assessed independently over a three-year

period. LTIP awards have an ind

idual conduct gateway requirement that results in the award lapsing if not met

•

Deferred awards are used to deliver the deferred portion of variable remuneration, in line with both market practice and

regulatory requirements. These awards vest in instalments on anniversar

ies of the award date spec

ied at the t

ime of grant.

Deferred awards are not subject to any plan lim

it. Th

is enables the Group to meet regulatory requirements relating to deferral

levels, and is in line with market practice

434

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

31. Share-based payments

continued

•

Restricted share awards, made outside of the annual performance process as replacement buy-out awards to new jo

iners

who forfeit awards on leaving their previous employers, vest in instalments on the anniversar

ies of the award date spec

ied

at the time of grant. This enables the Group to meet regulatory requirements relating to buy-outs, and is in line with market

practice. In line with sim

ilar plans operated by our compet

itors, restricted share awards are not subject to an annual lim

it and

do not have any performance measures

Under the 2021 Plan and 2011 Plan, no grant price is payable to receive an award. The remain

ing l

ife of the 2021 Plan during

which new awards can be made is nine years. The 2011 Plan has expired and no further awards will be granted under this plan.

Valuation – LTIP awards

The vesting of awards granted in both 2022 and 2021 is subject to relative TSR performance measures, achievement of a

strategic scorecard and satisfact

ion of RoTE (subject to a cap

ital CET1 underpin). The vesting of awards also have addit

ional

condit

ions under strateg

ic measures related to targets set for sustainab

ity linked to business strategy. The fair value of the TSR

component is calculated using the probabil

ity of meet

ing the measures over a three-year performance period, using a Monte

Carlo simulat

ion model. The number of shares expected to vest

is evaluated at each reporting date, based on the expected

performance against the RoTE and strategic measures in the scorecard, to determine the accounting charge.

No div

idend equ

ivalents accrue for the LTIP awards made in 2022 or 2021 and the fair value takes this into account, calculated

by reference to market consensus div

idend y

ield.

2022

2021

Grant date

14–March

15–March

Share price at grant date (£)

4.88

4.9

Vesting period (years)

3–Jul

Expected div

ided y

ield (%)

3.4

Fair value (RoTE) (£)

1.24, 1.20

1.25, 1.20

Fair value (TSR) (£)

0.70, 0.68

0.72, 0.71

Fair value (Strategic) (£)

1.65, 1.60

1.66, 1.60

Valuation – deferred shares and restricted shares

The fair value for deferred awards which are not granted to material risk takers is based on 100 per cent of the face value of the

shares at the date of grant as the share price will reﬂect expectations of all future div

idends. For awards granted to mater

ial risk

takers in 2022, the fair value of awards takes into account the lack of div

idend equ

ivalents, calculated by reference to market

consensus div

idend y

ield.

Deferred share awards

Grant date

2022

09 November

20 June

14 March

Share price at grant date (£)

5.62

6.04

4.88

Vesting period (years)

Expected

div

idend y

ield

(%)

Fair value

(£)

Expected

div

idend y

ield

(%)

Fair value

(£)

Expected

div

idend y

ield

(%)

Fair value

(£)

1-3 years

N/A

5.62

N/A

6.04

N/A

4.88

1-5 years

3.4

5.17

3.4, 3.4

5.56, 5.56

N/A, 3.4,

3.4, 3.4

4.88, 4.48,

4.41, 4.34

3-7 years

–

3.4,3.4,3.4

4.48, 4.13,

3.99

Grant date

2021

21 June

15 March

Share price at grant date (£)

4.69

4.90

Vesting period (years)

Expected

div

idend y

ield

(%)

Fair value

(£)

Expected

div

idend y

ield

(%)

Fair value

(£)

1-3 years

N/A, 3.4

4.69, 4.24

N/A, 3.4, 3.4

4.90, 4.58, 4.43

1-5 years

3.4

4.17

3.4, 3.4, 3.4

4.43, 4.36, 4.29

3-7 years

–

3.4, 3.4

4.15, 4.01

435

Standard Chartered

– Annual Report 2022

Financ

ial statements

31. Share-based payments

continued

Other restricted share awards

Grant date

2022

28-Nov

09-Nov

20-Jun

14-Mar

Share price at grant date (£)

5.90

5.62

6.04

4.88

Vesting period (years)

Expected

div

idend

yield

(%)

Fair value

(£)

Expected

div

idend

yield

(%)

Fair value

(£)

Expected

div

idend

yield

(%)

Fair value

(£)

Expected

div

idend

yield

(%)

Fair value

(£)

4 months

3.4

5.56

1 year

3.4

5.71

3.4

5.44

3.4

5.84

3.4

4.72

1.4 years

3.4

5.38

3.4

2 years

3.4

5.52

3.4

5.26

3.4

5.65

3.4

4.56

2.4 years

3.4

5.2

3.4

3 years

3.4

5.34

3.4

5.08

3.4

5.46

3.4

4.41

4 years

3.4

5.16

3.4

4.92

3.4

5.28

3.4

4.27

5 years

3.4

4.99

3.4

5.11

3.4

4.13

6 years

3.4

3.99

Grant date

2021

30 September

21 June

15 March

Share price at grant date (£)

4.37

4.69

4.90

Vesting period (years)

Expected

div

idend

yield

(%)

Fair value

(£)

Expected

div

idend

yield

(%)

Fair value

(£)

Expected

div

idend

yield

(%)

Fair value

(£)

1 year

3.4

4.23

3.4

4.53

3.4

4.74

2 years

3.4

4.09

3.4

4.38

3.4

4.58

3 years

3.4

3.95

3.4

4.24

3.4

4.43

4 years

3.4

3.82

3.4

4.10

3.4

4.29

5 years

3.4

3.70

–

All Employee Sharesave Plans

2013 Sharesave Plan

Under the 2013 Sharesave Plan, employees may open a savings contract. Employees can save up to £250 per month over three

years to purchase ordinary shares in the Company at a discount of up to 20 per cent on the share price at the date of inv

itat

ion

(the ‘option exercise price’), after which they have a period of six months to exercise the option. There are no performance

measures attached to options granted under the 2013 Sharesave Plan and no grant price is payable to receive an option.

In some countries in which the Group operates, it is not possible to operate Sharesave plans, typically due to securit

ies law

and regulatory restrict

ions. In these countr

ies, where possible, the Group offers an equivalent cash-based alternative to

its employees.

The 2013 Sharesave Plan was approved by shareholders in May 2013, and expires in May 2023. A new Sharesave plan will be

taken to shareholders for approval at the Annual General Meeting in May 2023.

Valuation – Sharesave:

Options under the Sharesave plans are valued using a binom

ial opt

ion-pric

ing model. The same fa

ir value is applied to all

employees includ

ing execut

ive directors. The fair value per option granted and the assumptions used in the calculation are

as follows:

All Employee Sharesave Plan (Sharesave)

2022

2021

Grant date

28 November

30 September

Share price at grant date (£)

5.80

4.37

Exercise price (£)

4.23

3.67

Vesting period (years)

Expected volatil

ity (%)

39.3

35.1

Expected option life (years)

3.33

Risk-free rate (%)

3.21

0.42

Expected div

idend y

ield (%)

3.4

Fair value (£)

2.08

1.11

The expected volatil

ity

is based on histor

ical volat

ity over the last three years, or three years pr

ior to grant. The expected life

is the average expected period to exercise. The risk-free rate of return is the yield on zero-coupon UK Government bonds of

a term consistent with the assumed option life. The expected div

idend y

ield is calculated by reference to market consensus

div

idend y

ield.

436

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

31. Share-based payments

continued

Lim

its

An award shall not be granted under the 2021 Plan in any calendar year if, at the time of its proposed grant, it would cause the

number of Standard Chartered PLC ordinary shares allocated in the period of 10 calendar years ending with that calendar year

under the 2021 Plan and under any other discret

ionary share plan operated by Standard Chartered PLC to exceed such number

as represents 5 per cent of the ordinary share capital of Standard Chartered PLC in issue at that time.

An award shall not be granted under the 2021 Plan or 2013 Sharesave Plan in any calendar year if, at the time of its proposed

grant, it would cause the number of Standard Chartered PLC ordinary shares allocated in the period of 10 calendar years ending

with that calendar year under the 2021 Plan or 2013 Sharesave Plan and under any other employee share plan operated by

Standard Chartered PLC to exceed such number as represents 10 per cent of the ordinary share capital of Standard Chartered

PLC in issue at that time.

An award shall not be granted under the 2021 Plan or 2013 Sharesave Plan in any calendar year if, at the time of its proposed

grant, it would cause the number of Standard Chartered PLC ordinary shares which may be issued or transferred pursuant to

awards then outstanding under the 2021 Plan or 2013 Sharesave Plan as relevant to exceed such number as represents 10 per

cent of the ordinary share capital of Standard Chartered PLC in issue at that time.

The number of Standard Chartered PLC ordinary shares which may be issued pursuant to awards granted under the 2021 Plan

in any 12-month period must not exceed such number as represents 1 per cent of the ordinary share capital of Standard

Chartered PLC in issue at that time. The number of Standard Chartered PLC ordinary shares which may be issued pursuant to

awards granted under the 2013 Sharesave Plan in any 12-month period must not exceed such number as represents 1 per cent

of the ordinary share capital of Standard Chartered PLC in issue at that time.

Standard Chartered PLC has been granted a waiver from strict compliance with Rules 17.03(3), 17.03(9) and 17.03(18) of the Rules

Governing the List

ing of Secur

ies on the Stock Exchange of Hong Kong. Deta

ils are set out in the market announcement made

on 5 May 2021.

Reconcil

iat

ion of share award movements for the year to 31 December 2022

2011 Plan

Sharesave

Weighted

average

Sharesave

exercise price

(£)

LTIP

Deferred /

Restricted shares

Outstanding at 1 January 2022

11,627,751

39,718,654

16,897,075

3.95

Granted

2,3

3,066,288

25,037,706

5,777,197

–

Lapsed

(2,927,828)

(1,121,849)

(2,700,678)

4.29

Exercised

(426,260)

(17,185,471)

(2,864,075)

5.03

Outstanding at 31 December 2022

11,339,951

46,449,040

17,109,519

3.81

Total number of securit

ies ava

ilable for issue under the plan

11,339,951

46,449,040

17,109,519

Percentage of the issued shares this represents as at 31 December 2022

0.39

1.60

0.59

3.81

Exercisable as at 31 December 2022

–

1,191,693

1,699,772

4.96

Range of exercise prices (£)³

–

3.14 – 5.13

–

Intrins

ic value of vested but not exerc

ised options ($ mill

ion)

0.02

8.93

2.59

Weighted average contractual remain

ing l

ife (years)

7.88

8.25

2.27

Weighted average share price for awards exercised during the period (£)

5.09

4.93

5.94

Granted under the 2021 Plan and 2011 Plan. Employees do not contribute to the cost of these awards.

3,048,826 (LTIP) granted on 14 March 2022, 14,989 (LTIP) granted as a notional div

idend on 1 March 2022, 2,473 (LTIP) granted as a not

ional div

idend on 8 August

2022, 23,434,127 (Deferred/Restricted shares) granted on 14 March 2022, 77,479 (Deferred/Restricted shares) granted as a notional div

idend on 1 March 2022,

584,322 (DRSA/RSA) granted on 20 June 2022, 43,918 (Deferred/Restricted shares) granted as a notional div

idend on 8 August 2022, 771,103 (Deferred/Restr

icted

shares) granted on 9 November 2022, 126,757 (Deferred/Restricted shares) granted on 28 November 2022 under the 2021 Plan. 5,777,197 (Sharesave) granted on

28 November 2022 under the 2013 Sharesave Plan.

For Sharesave granted in 2022 the exercise price is £4.23 per share, a 20% discount from the closing price on 1 November 2022. The closing price on 1 November

2022 was £5.282.

437

Standard Chartered

– Annual Report 2022

Financ

ial statements

31. Share-based payments

continued

Reconcil

iat

ion of share award movements for the year to 31 December 2021

2011 Plan

Sharesave

Weighted

average

Sharesave

exercise price

(£)

LTIP

Deferred/

Restricted

Outstanding at 1 January 2021

22,918,242

39,543,548

16,591,704

4.31

Granted

2,3

4,038,071

17,113,973

4,274,039

–

Lapsed

(15,005,847)

(1,018,379)

(3,964,053)

5.16

Exercised

(322,715)

(15,920,488)

(4,615)

3.53

Outstanding at 31 December 2021

11,627,751

39,718,654

16,897,075

3.95

Total number of securit

ies ava

ilable for issue under the plan

11,627,751

39,718,654

16,897,075

Percentage of the issued shares this represents as at 31 December 2021

0.40%

1.30%

0.50%

3.95

Exercisable as at 31 December 2021

3,952

1,701,506

2,571,103

4.96

Range of exercise prices (£)

–

3.14 – 6.20

–

Intrins

ic value of vested but not exerc

ised options ($ mill

ion)

0.02

10.33

0.38

Weighted average contractual remain

ing l

ife (years)

7.85

8.12

2.18

Weighted average share price for awards exercised during the period (£)

4.97

4.89

4.66

Employees do not contribute towards the cost of these awards

16,704,511 (DRSA/RSA) granted on 15 March 2021, 94,954 (DRSA/RSA) granted as notional div

idend on 01 March 2021, 4,023,843 (LTIP) granted on 15 March 2021,

10,954 (LTIP) granted as notional div

idend on 01 March 2021, 197,111 (DRSA/RSA) granted on 21 June 2021. 34,606 (DRSA/RSA) granted as not

ional div

idend on

13 August 2021, 3,274 (LTIP) granted as notional div

idend on 13 August 2021, 82,791 (RSA) granted on 30 September 2021, 4,274,039 (Sharesave) granted on

30 September 2021. LTIP and DRSA/RSA awards granted in March 2021 were granted under the 2011 Plan, and DRSA/RSA awards granted in June and September

2021 were granted under the 2021 Plan. Notional div

idends were granted under the 2011 Plan. Sharesave opt

ions granted in 2021 were granted under the 2013

Sharesave Plan

For Sharesave granted in 2021 the exercise price is £3.67 per share, which was a 20% discount to the closing share price on 27 August 2021. The closing share price

on 27 August 2021 was of £4.578

32. Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

Accounting policy

Subsid

iar

ies

Subsid

iar

ies are all entit

ies,

includ

ing structured ent

ies, wh

ich the Group controls. The Group controls an entity when it is

exposed to, and has rights to, variable returns from its involvement with the entity and has the abil

ity to affect those returns

through its power over the investee. The assessment of power is based on the Group’s practical abil

ity to d

irect the relevant

activ

ies of the entity unilaterally for the Group’s own beneﬁt and is subject to reassessment if and when one or more of the

elements of control change. Subsid

iar

ies are fully consolidated from the date on which the Group effectively obtains control.

They are deconsolidated from the date that control ceases, and where any interest in the subsid

iary rema

ins, this is

remeasured to its fair value and the change in carrying amount is recognised in the income statement.

Associates and jo

int arrangements

Joint arrangements are where two or more parties either have rights to the assets, and obligat

ions of the joint arrangement

(joint operat

ions), or have rights to the net assets of the jo

int arrangement (joint venture). The Group evaluates the

contractual terms of joint arrangements to determ

ine whether a jo

int arrangement

is a jo

int operat

ion or a jo

int venture.

The Group did not have any contractual interest in jo

int operat

ions.

An associate is an entity over which the Group has sign

iﬁcant

inﬂuence.

Investments in associates and jo

int ventures are accounted for by the equ

ity method of accounting and are in

ially

recognised at cost. The Group’s investment in associates and jo

int ventures

includes goodwill ident

iﬁed on acqu

ion (net of

any accumulated impa

irment loss).

The Group’s share of its associates’ and jo

int ventures’ post-acqu

ion proﬁts or losses is recognised in the income statement,

and its share of post-acquis

ion movements in other comprehensive income is recognised in reserves. The cumulative

post-acquis

ion movements are adjusted against the carrying amount of the investment. When the Group’s share of losses

in an associate or a jo

int venture equals or exceeds

its interest in the associate, includ

ing any other unsecured rece

ivables, the

Group does not recognise further losses, unless it has incurred obligat

ions or made payments on behalf of the assoc

iate or

joint venture.

Unrealised gains and losses on transactions between the Group and its associates and jo

int ventures are el

inated to the

extent of the Group’s interest in the associates and jo

int ventures. At each balance sheet date, the Group assesses whether

there is any object

ive ev

idence of impa

irment

in the investment in associates and jo

int ventures. Such ev

idence includes a

sign

iﬁcant or prolonged decl

ine in the fair value of the Group’s investment in an associate or jo

int venture below

its cost,

among other factors.

438

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

32. Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

continued

Sign

iﬁcant account

ing estimates and judgements

The Group applies judgement in determin

ing

if it has control, jo

int control or s

ign

iﬁcant

inﬂuence over subsid

iar

ies, jo

int

ventures and associates respectively. These judgements are based upon ident

ify

ing the relevant activ

ies of counterparties,

being those activ

ies that sign

iﬁcantly affect the ent

ies returns, and further mak

ing a decis

ion of

if the Group has control

over those entit

ies, joint control, or has s

ign

iﬁcant

inﬂuence (being the power to partic

ipate

in the ﬁnanc

ial and operat

ing

policy decis

ions but not control them).

These judgements are at times determined by equity holdings, and the voting rights associated with those holdings.

However, further considerat

ions

includ

ing but not l

ited to board seats, adv

isory committee members and special

ist

knowledge of some decis

ion-makers are also taken

into account. Further judgement is required when determin

ing

if the

Group has de-facto control over an entity even though it may hold less than 50% of the voting shares of that entity.

Judgement is required to determine the relative size of the Group’s shareholding when compared to the size and dispers

ion

of other shareholders.

Impairment testing of investments in associates and jo

int ventures, and on a Company level

investments in subsid

iar

ies is

performed if there is a possible ind

icator of

impa

irment. Judgement

is used to determine if there is object

ive ev

idence of

impa

irment. Objective ev

idence may be observable data such as losses incurred on the investment when applying the equity

method, the granting of concessions as a result of ﬁnanc

ial d

iff

iculty, or breaches of contracts/regulatory ﬁnes of the

associate or jo

int venture. Further judgement

is required when consider

ing broader

ind

icators of

impa

irment such as losses of

active markets or ratings downgrades across key markets in which the associate or jo

int venture operate

in.

Impairment testing is based on estimates includ

ing forecast

ing the expected cash ﬂows from the investments, growth rates,

terminal values and the discount rate used in calculation of the present values of those cash ﬂows. The estimat

ion of future

cash ﬂows and the level to which they are discounted is inherently uncertain and requires sign

iﬁcant judgement.

Business combinat

ions

The acquis

ion method of accounting is used to account for the acquis

ion of subsid

iar

ies by the Group. The cost of an

acquis

ion is measured as the fair value of the assets given, equity instruments issued and liab

ies

incurred or assumed at

the date of exchange, together with the fair value of any contingent considerat

ion payable. The excess of the cost of

acquis

ion over the fair value of the Group’s share of the ident

iﬁable net assets and cont

ingent liab

ies acqu

ired is recorded

as goodwill (see Note 17 for details on goodwill recognised by the Group). If the cost of acquis

ion is less than the fair value of

the net assets and contingent liab

ies of the subs

iary acqu

ired, the difference is recognised directly in the income

statement.

Where the fair values of the ident

iﬁable net assets and cont

ingent liab

ies acqu

ired have been determined provis

ionally, or

where contingent or deferred considerat

ion

is payable, adjustments aris

ing from the

ir subsequent ﬁnal

isat

ion are not

reﬂected in the income statement if (i) they arise with

in 12 months of the acqu

ion date (or relate to acquis

ions completed

before 1 January 2014) and (i

i) the adjustments ar

ise from better informat

ion about cond

ions ex

ist

ing at the acqu

ion

date (measurement period adjustments). Such adjustments are applied as at the date of acquis

ion and, if applicable, prior

year amounts are restated. All changes that are not measurement period adjustments are reported in income other than

changes in contingent considerat

ion not class

ied as ﬁnancial

instruments, which are accounted for in accordance with the

appropriate accounting policy, and changes in contingent considerat

ion class

ied as equ

ity, which is not remeasured.

Changes in ownership interest in a subsid

iary, wh

ich do not result in a loss of control, are treated as transactions between

equity holders and are reported in equity. Where a business combinat

ion

is achieved in stages, the previously held equity

interest is remeasured at the acquis

ion date fair value with the resulting gain or loss recognised in the income statement.

In the Company’s ﬁnancial statements,

investment in subsid

iar

ies, associates and jo

int ventures are held at cost less

impa

irment and d

idends from pre-acqu

ion proﬁts received prior to 1 January 2009, if any. Inter-company transactions,

balances and unrealised gains and losses on transactions between Group companies are elim

inated

in the Group accounts.

Investments in subsid

iary undertak

ings

2022

$mill

ion

2021

$mill

ion

As at 1 January

60,429

57,407

Addit

ions

1,545

4,023

Disposal

(999)

(1,001)

As at 31 December

60,975

60,429

Includes internal Addit

ional T

ier 1 Issuances of $1 bill

ion by Standard Chartered Bank, $500 m

ill

ion by Standard Chartered Bank (Hong Kong) Ltd (2021: Add

ional

Tier 1 issuances of $2.7 bill

ion by Standard Chartered Bank and $1.3 b

ill

ion by Standard Chartered Hold

ings Lim

ited)

Redemption of Addit

ional T

ier1 capital of $1 bill

ion by Standard Chartered Bank (2021: Add

ional T

ier1 capital of $1 bill

ion by Standard Chartered Bank)

439

Standard Chartered

– Annual Report 2022

Financ

ial statements

32. Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

continued

At 31 December 2022, the princ

ipal subs

iary undertak

ings, all ind

irectly held except for Standard Chartered Bank (Hong Kong)

Lim

ited, and pr

inc

ipally engaged

in the business of banking and provis

ion of other ﬁnancial serv

ices, were as follows:

Country and place of incorporation or registrat

ion

Main areas of operation

Group interest

in ordinary

share capital

Standard Chartered Bank, England and Wales

United Kingdom, Middle East, South Asia, Asia Pacif

ic,

Americas and, through Group companies, Africa

100

Standard Chartered Bank (Hong Kong) Lim

ited, Hong Kong

Hong Kong

100

Standard Chartered Bank (Singapore) Lim

ited, S

ingapore

Singapore

100

Standard Chartered Bank Korea Lim

ited, Korea

Korea

100

Standard Chartered Bank (China) Lim

ited, Ch

ina

China

100

Standard Chartered Bank (Taiwan) Lim

ited, Ta

iwan

Taiwan

100

Standard Chartered Bank AG, Germany

Germany

100

Standard Chartered Bank Malaysia Berhad, Malaysia

Malaysia

100

Under PRC law, registered as Standard Chartered Bank (China) Lim

ited

Country and place of incorporation or registrat

ion

Main areas of operation

Group interest

in ordinary

share capital

Standard Chartered Bank (Thai) Public Company Lim

ited,

Thailand

99.87

Standard Chartered Bank (Pakistan) Lim

ited, Pak

istan

Pakistan

98.99

Standard Chartered Bank Botswana Lim

ited, Botswana

Botswana

75.83

Standard Chartered Bank Kenya Lim

ited, Kenya

Kenya

74.32

Standard Chartered Bank Nepal Lim

ited, Nepal

Nepal

70.21

Standard Chartered Bank Ghana PLC, Ghana

Ghana

69.42

Mox Bank Lim

ited, Hong Kong

Hong Kong

65.98

A complete list of subsid

iary undertak

ing is included in Note 40.

The Group does not have any material non-controlling interest except as listed above, which contribute $(6.2) mill

ion

(31 December 2021: $17 mill

ion) of the (loss)/Proﬁt attr

ibutable to non-controlling interest and $261 mill

ion (31 December 2021:

$298 mill

ion) of the equ

ity attributable to non-controlling interests

While the Group’s subsid

iar

ies are subject to local statutory capital and liqu

ity requirements in relation to foreign exchange

remittance, these restrict

ions ar

ise in the normal course of business and do not sign

iﬁcantly restr

ict the Group’s abil

ity to access

or use assets and settle liab

ies of the Group.

The Group does not have sign

iﬁcant restr

ict

ions on

its abil

ity to access or use

its assets and settle its liab

ies other than those

resulting from the regulatory framework with

in wh

ich the banking subsid

iar

ies operate. These frameworks require banking

operations to keep certain levels of regulatory capital, liqu

id assets, exposure l

its and comply w

ith other required ratios.

These restrict

ions are summar

ised below:

Regulatory and liqu

ity requirements

The Group’s subsid

iar

ies are required to mainta

in m

imum cap

ital, leverage ratios, liqu

ity and exposure ratios which therefore

restrict the abil

ity of these subs

iar

ies to distr

ibute cash or other assets to the parent company.

The subsid

iar

ies are also required to mainta

in balances w

ith central banks and other regulatory authorit

ies

in the countries in

which they operate. At 31 December 2022, the total cash and balances with central banks was $58 bill

ion (31 December 2021:

$73 bill

ion) of wh

ich $9 bill

ion (31 December 2021: $8 b

ill

ion)

is restricted.

Statutory requirements

The Group’s subsid

iar

ies are subject to statutory requirements not to make distr

ibut

ions of capital and unrealised proﬁts to the

parent company, generally to mainta

in solvency. These requ

irements restrict the abil

ity of subs

iar

ies to remit div

idends to the

Group. Certain subsid

iar

ies are also subject to local exchange control regulations which provide for restrict

ions on export

ing

capital from the country other than through normal div

idends.

440

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

32. Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

continued

Contractual requirements

The encumbered assets in the balance sheet of the Group’s subsid

iar

ies are not available for transfer around the Group.

Encumbered assets are disclosed in Risk review and Capital review (page 236 to 325).

Share of proﬁt from investment in associates and jo

int ventures compr

ises:

2022

$mill

ion

2021

$mill

ion

Loss from investment in jo

int ventures

(7)

(2)

Proﬁt from investment in associates

163

198

Total

156

196

Interests in associates and jo

int ventures

2022

$mill

ion

2021

$mill

ion

As at 1 January

2,147

2,162

Exchange translation difference

(232)

Addit

ions

Share of proﬁts

156

196

Div

idend rece

ived

(58)

(38)

Disposals

(1)

(16)

Impairment¹

(336)

(300)

Share of FVOCI and Other reserves

(79)

Other movements

–

As at 31 December

1,631

2,147

Other impa

irment ma

inly relates to the Group’s investment in its associate China Bohai Bank (Bohai)

2 Movement related to CurrencyFair

A complete list of the Group’s interest in associates is included in Note 40. The Group’s princ

ipal assoc

iates are:

Associate

Nature of

activ

ies

Main areas of

operation

Group interest

in ordinary

share capital

China Bohai Bank

Banking

China

16.26

CurrencyFair Lim

ited Exchange Ireland

Banking

Ireland

43.42

On the 10th September 2021, The Group, through its subsid

iary Standard Chartered UK Hold

ings Lim

ited completed

its

investment in CurrencyFair Lim

ited, an Ir

ish foreign exchange payments platform.

The Group purchased CurrencyFair through the contribut

ion of

its exist

ing

investment in its jo

int venture, Assembly Payments

Pte. Lim

ited and a cash

injection into CurrencyFair of $35 mill

ion, wh

ich provided the Group with equity of 43.42% in

CurrencyFair. This ownership, along with seats on the board of directors resulted in the Group having sign

iﬁcant

inﬂuence

over CurrencyFair and as such would equity method account the investment.

The transaction will facil

itate creat

ion of a combined payments and foreign exchange products franchise, combin

ing the

customer base, staff, expertise and capabil

ies of both CurrencyFair and Assembly Payments.

The fair value of considerat

ion for the

investment was as follows:

Considerat

ion

$mill

ion

Fair value of the Group’s investment in Assembly Payments

Cash considerat

ion

Total considerat

ion/

investment in associate

The fair value of Assembly Payments was determined to be $60 mill

ion, of wh

ich the Group’s equity ownership on transfer was 59.63%. The Group carried this

investment under the equity method at a balance of $16 mill

ion result

ing in a proﬁt on disposal of $20 mill

ion

The Group’s ownership percentage in China Bohai Bank is 16.26%.

Although the Group’s investment in China Bohai Bank is less than 20 per cent but it is considered to be an associate because of

the sign

iﬁcant

inﬂuence the Group is able to exercise over the management and ﬁnanc

ial and operat

ing polic

ies. Th

is inﬂuence

is primar

ily through board representat

ion and the provis

ion of techn

ical expertise to Bohai. The Group applies the equity

method of accounting for investments in associates.

441

Standard Chartered

– Annual Report 2022

Financ

ial statements

32. Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

continued

Bohai has a statutory year end of 31 December, but publishes its year-end ﬁnanc

ial statements after the Group. As

it is

impract

icable for Boha

i to prepare ﬁnanc

ial statements earl

ier for use of the Group, the Group recognises its share of Bohai’s

earnings on a three-month lag basis. Therefore, the Group recognised its share of Bohai’s proﬁts and movements in other

comprehensive income for the 12 months ended 30 September 2022 in the Group’s consolidated statemement of income and

consolidated statement of comprehensive income for the year ended 31 December 2022, respectively.

There have been no material events after 30 September 2022 which would require adjustments in respect of the share of

Bohai’s proﬁts and movements in OCI recognised by the Group for the period ended on 31 December 2022.

If the Group did not have sign

iﬁcant

inﬂuence in Bohai, the investment would be carried at fair value rather than the current

carrying value.

Impairment testing

At 31 December 2022, the listed equity value of Bohai is below the carrying amount of the Group‘s investment in associate. As a

result, the Group assessed the carrying value of its investment in Bohai for impa

irment and concluded that an

impa

irment loss

of $308 mill

ion (2021: $300 m

ill

ion) was requ

ired. The revised carrying value of the Group’s investment in Bohai of $1,421 mill

ion

(2021: $1,917 mill

ion) represents the h

igher of the value in use and fair value less costs to sell. The ﬁnanc

ial forecasts used for the

VIU calculation reﬂects the current economic condit

ions. The reduct

ion (compared to 2021) in the recoverable amount of Bohai

is primar

ily a result of

industry challenges and uncertaint

ies that may

impact proﬁtab

ity, as well as lower net proﬁts reported in

Q3 2022 (than in Q3 2021), which is used as a starting point for the VIU calculation.

Bohai

2022

$mill

ion

2021

$mill

ion

VIU

1,421

1,917

Carrying amount

1,729

2,217

Fair value²

685

1,114

The Group’s 16.26% share in the net assets less other equity instruments which the Group does not hold

Number of shares held by the Group multipl

ied by the quoted share pr

ice at 31 December

Basis of recoverable amount

The impa

irment test was performed by compar

ing the recoverable amount of Bohai, determined as the higher of VIU and fair

value less costs to sell, with its carrying amount.

The value in use (‘VIU’) is calculated using a div

idend d

iscount model (‘DDM’), which estimates the distr

ibutable future cash

ﬂows to the equity holders, after adjust

ing for the regulatory cap

ital requirements, for a 5-year period, after which a terminal

value (‘TV’) is calculated based on the ‘Gordon Growth’ model. The key assumptions in the VIU are as follows:

•

Short to medium term project

ions are based on management’s best est

imates of future proﬁts available to ordinary

shareholders and have been determined with reference to the latest published ﬁnanc

ial results and h

istor

ical performance

of Bohai;

•

The projections use publ

icly available informat

ion and

include normalised performance over the forecast period, inclus

ive of:

(i) net proﬁt growth assumptions based on China GDP; (i

i) ECL assumpt

ions using Bohai histor

ical ECL and the preva

ing

Chinese market challenges and uncertaint

ies as a bas

is; and (i

i) net interest margin increases from 2024 with reference to

third party market interest rate forecasts in China;

•

The discount rate applied to these cash ﬂows was estimated with reference to transaction and broker data in the local

Chinese market, cross checked to the capital asset pric

ing model (CAPM), wh

ich includes a long term risk-free rate, beta and

company risk premium assumptions for Bohai;

•

A long term growth rate for China is used to extrapolate the expected short to medium term earnings to perpetuity to derive

a terminal value; and

•

An estimat

ion of RWAs and RWA growth to determ

ine a capital maintenance haircut to forecast proﬁts. This haircut is taken

in order for Bohai to meet its target regulatory capital requirements over the forecast period. This haircut takes into account

movements in risk weighted assets and the total capital required, includ

ing requ

ired retained earnings over time to meet the

target capital rations.

The key assumptions used in the VIU calculation:

2022

2021

Pre tax discount rate

13.03

14.83

Forecast proﬁt long term growth rate

4.00

4.75

Long term RWA growth rate

4.00

4.75

Min

imum CET 1 rat

io¹

7.50

At 30 September 2022, Bohai’s CET 1 ratio was 8.05%

442

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

32. Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

continued

The sensit

ies d

isclosed below are for changes to the discount rate, normalised proﬁts and RWA assumptions of Bohai.

All these sensit

ity analyses assume a CET 1 capital requirement of 7.50%, consistent with local legislat

ion. The GDP growth

assumptions affect the forecast proﬁts and RWA estimates over the short to medium term and in the terminal period, and

sensit

ies are already d

isclosed, thus a separate sensit

ity has not been included for this input.

Carrying amount

Pre impa

irment

$mill

ion

Base Case

Sensit

ies – 2022

VIU

$mill

ion

Headroom

$mill

ion

Pre tax

discount

rate

GDP

Discount rate

Forecast proﬁt

RWA

Combined

RWA -10%

RWA +10%

+1%

-1%

+10%

-10%

+10%

-10%

CF -10%

CF +10%

Impairment

$mill

ion

Impairment

$mill

ion

Impairment

$mill

ion

Impairment

$mill

ion

Impairment

$mill

ion

Impairment

$mill

ion

Impairment

$mill

ion

Impairment

$mill

ion

1,729

1,421

(308) 13.03%

4.00%

(504)

(48)

(67)

(552)

(578)

(40)

(283)

(336)

Results include changes to NIM and addit

ional ECL overlay assumpt

ions, which are not necessarily linear

To improve the headroom to zero would require, on the basis of changing ind

idual assumptions an increase in forecast proﬁts

by 12.76 per cent, decrease in discount rate by 1.15 per cent and a decrease in RWA by 11.50 per cent.

The following table sets out the summarised ﬁnanc

ial statements of Ch

ina Bohai Bank prior to the Group’s share of the

associates being applied:

30 Sep 2022

$mill

ion

30 Sep 2021

$mill

ion

Total assets

236,396

250,951

Total liab

ies

220,662

234,196

Operating income

3,958

4,840

Net proﬁt

1,186

1,230

Other comprehensive income

(457)

This represents twelve months of earnings (1 October to 30 September)

443

Standard Chartered

– Annual Report 2022

Financ

ial statements

33. Structured entit

ies

Accounting policy

A structured entity is an entity that has been designed so that voting or sim

ilar r

ights are not the dominant factor in decid

ing

who controls the entity. Contractual arrangements determine the rights and therefore relevant activ

ies of the structured

entity. Structured entit

ies are generally created to ach

ieve a narrow and well-deﬁned object

ive w

ith restrict

ions around the

activ

ies. Structured entit

ies are consol

idated when the substance of the relationsh

ip between the Group and the structured

entity ind

icates the Group has power over the contractual relevant act

ies of the structured entity, is exposed to variable

returns, and can use that power to affect the variable return exposure.

In determin

ing whether to consol

idate a structured entity to which assets have been transferred, the Group takes into

account its abil

ity to d

irect the relevant activ

ies of the structured entity. These relevant activ

ies are generally evidenced

through a unilateral right to liqu

idate the structured ent

ity, investment in a substantial proportion of the securit

ies

issued by

the structured entity or where the Group holds specif

ic subord

inate securit

ies that embody certa

in controlling rights. The

Group may further consider relevant activ

ies embedded with

in contractual arrangements such as call opt

ions which give

the practical abil

ity to d

irect the entity, special relationsh

ips between the structured ent

ity and investors, and if a single

investor has a large exposure to variable returns of the structured entity.

Judgement is required in determin

ing control over structured ent

ies. The purpose and des

ign of the entity is considered,

along with a determinat

ion of what the relevant act

ies are of the entity and who directs these. Further judgements are

made around which investor is exposed to, and absorbs the variable returns of the structured entity. The Group will have to

weigh up all of these facts to consider whether the Group, or another involved party is acting as a princ

ipal

in its own right or

as an agent on behalf of others. Judgement is further required in the ongoing assessment of control over structured entit

ies,

specif

ically

if market condit

ions have an effect on the var

iable return exposure of different investors.

The Group has involvement with both consolidated and unconsolidated structured entit

ies, wh

ich may be established by the

Group as a sponsor or by a third-party.

Interests in consolidated structured entit

ies:

A structured entity is consolidated into the Group’s ﬁnanc

ial statements where the

Group controls the structured entity, as per the determinat

ion

in the accounting policy above. The following table presents the

Group’s interests in consolidated structured entit

ies.

2022

$mill

ion

2021

$mill

ion

Aircraft and ship leasing

3,531

3,450

Princ

ipal and other structured ﬁnance

330

229

Total

3,861

3,679

Interests in unconsolidated structured entit

ies:

Unconsolidated structured entit

ies are all structured ent

ies that are not

controlled by the Group. The Group enters into transactions with unconsolidated structured entit

ies

in the normal course of

business to facil

itate customer transact

ions and for specif

investment opportunit

ies. Th

is is predominantly with

in the CCIB

business segment.

An interest in a structured entity is contractual or non-contractual involvement which creates variab

ity of

the returns of the Group aris

ing from the performance of the structured ent

ity.

444

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

33. Structured entit

ies

continued

The table below presents the carrying amount of the assets recognised in the ﬁnanc

ial statements relat

ing to interests held in

unconsolidated structured entit

ies, the max

imum exposure to loss relating to those interests and the total assets of the

structured entit

ies. Max

imum exposure to loss is primar

ily l

ited to the carry

ing amount of the Group’s on-balance sheet

exposure to the structured entity. For derivat

ives, the max

imum exposure to loss represents the on-balance sheet valuation and

not the notional amount. For commitments and guarantees, the maximum exposure to loss is the notional amount of potential

future losses.

2022¹

2021 (Restated)²

Asset-

backed

securit

ies

$mill

ion

Corporate

Lending &

Structured

Finance

$mill

ion

Princ

ipal

Finance

funds

$mill

ion

Other

activ

ies

$mill

ion

Total

$mill

ion

Asset-

backed

securit

ies

$mill

ion

Corporate

Lending &

Structured

Finance¹

$mill

ion

Princ

ipal

Finance

funds

$mill

ion

Other

activ

ies

$mill

ion

Total

$mill

ion

Group’s interest - assets

Financ

ial assets held at fa

ir value

through proﬁt or loss

851

–

136

–

987

1,144

–

128

1,307

Loans and advances/Investment

securit

ies at amort

ised cost

18,696

35,928

–

246

54,870

13,635

34,114

–

47,749

Investment securit

ies (fa

ir value

through other comprehensive

income)

2,248

–

2,248

2,221

–

2,221

Other assets

–

Total assets

21,795

35,928

144

246

58,113

17,000

34,114

138

51,287

Off-balance sheet

–

18,385

–

18,478

17,773

102

–

17,917

Group’s maximum exposure to loss

21,795

54,313

237

246

76,591

17,042

51,887

240

69,204

Total assets of structured entit

ies

177,194

53,657

291

1,828

232,970

241,580

48,833

1,014

291,465

As at 31 December 2022 Corporate Lending & Structured Finance includes $14,261 mill

ion (2021: $15,549 m

ill

ion) related to Loans and advances/

investment

securit

ies at amort

ized cost with

in Structured F

inance and $21,667 mill

ion (2021: $18,565 m

ill

ion) w

ith

in Corporate Lend

ing; Group’s maximum exposure to loss

with

in Structured F

inance of $22,971 mill

ion (2021: $24,146 m

ill

ion) and $31,342 m

ill

ion (2021: $27,741 m

ill

ion) w

ith

in Corporate Lend

ing; and Total assets of structured

entit

ies w

ith

in Structured F

inance of $35,732 mill

ion (2021: $31,683 m

ill

ion) and $17,925 m

ill

ion (2021: $17,149 m

ill

ion) w

ith

in Corporate Lend

ing

2 The 2021 have been restated to reﬂect the addit

ion of the Group’s

interest in certain entit

ies reported on the Group’s balance sheet but not prev

iously disclosed as

unconsolidated structured entit

ies, assoc

iated off-balance sheet exposure, maximum exposure to loss, and the total assets of structured entit

ies. The restatement

results in increases to the following: Loans and advances/investment securit

ies at amort

ized cost with

in Structured F

inance of $12,083 mill

ion and Corporate

Lending of $18,565 mill

ion; Group’s max

imum exposure to loss with

in Structured F

inance of $19,545 mill

ion and Corporate Lend

ing of $27,741 mill

ion; Off-balance

sheet with

in Structured F

inance of $7,462 mill

ion and Corporate Lend

ing of $9,176 mill

ion; and Total assets of structured ent

ies w

ith

in Structured F

inance of

$17,728 mill

ion and Corporate Lend

ing of $17,149 mill

ion

The main types of activ

ies for which the Group util

ises unconsol

idated structured entit

ies cover synthet

ic credit default swaps

for managed investment funds (includ

ing spec

ial

ised Pr

inc

ipal F

inance funds), portfolio management purposes, structured

ﬁnance and asset-backed securit

ies. These are deta

iled as follows:

•

Asset-backed securit

ies (ABS):

The Group also has investments in asset-backed securit

ies

issued by third-party sponsored

and managed structured entit

ies. For the purpose of market mak

ing and at the discret

ion of ABS trad

ing desk, the Group may

hold an immater

ial amount of debt secur

ies from structured ent

ies or

inated by cred

it portfolio management. This is

disclosed in the ABS column above.

•

Portfolio management (Group sponsored entit

ies): For the purposes of portfol

io management, the Group purchased credit

protection via synthetic credit default swaps from note-issu

ing structured ent

ies. Th

is credit protection creates credit risk

which the structured entity and subsequently the end investor absorbs. The referenced assets remain on the Group’s balance

sheet as they are not assigned to these structured entit

ies. The Group cont

inues to own or hold all of the risks and returns

relating to these assets. The credit protection obtained from the regulatory-compliant securit

isat

ion only serves to protect

the Group against losses upon the occurrence of elig

ible cred

it events and the underlying assets are not derecognised

from the Group’s balance sheet. The Group does not hold any equity interests in the structured entit

ies, but may hold an

ins

ign

icant amount of the

issued notes for market making purposes. This is disclosed in the ABS section above. The proceeds

of the notes’ issuance are typically held as cash collateral in the issuer’s account operated by a trustee or invested in AAA-

rated government-backed securit

ies to collateral

ise the structured entit

ies swap obl

igat

ions to the Group, and to repay the

princ

ipal to

investors at maturity. The structured entit

ies re

imburse the Group on actual losses incurred, through the use of the

cash collateral or realisat

ion of the collateral secur

ity. Correspondingly, the structured entit

ies wr

ite down the notes issued by

an equal amount of the losses incurred, in reverse order of senior

ity. All fund

ing is committed for the life of these vehicles and

the Group has no ind

irect exposure

in respect of the vehicles’ liqu

ity posit

ion. The Group has reputat

ional risk in respect of

certain portfolio management vehicles and investment funds either because the Group is the arranger and lead manager or

because the structured entit

ies have Standard Chartered brand

ing.

•

Corporate Lending & Structured ﬁnance:

Corporate Lending comprises secured lending in the normal course of business to

third parties through structured entit

ies.

Structured ﬁnance comprises interests in transactions that the Group or, more usually, a customer has structured, using one or

more structured entit

ies, wh

ich provide beneﬁc

ial arrangements for customers. The Group’s exposure pr

imar

ily represents the

provis

ion of fund

ing to these structures as a ﬁnanc

ial

intermed

iary, for wh

ich it receives a lender’s return. The transactions

largely relate to real estate ﬁnancing and the prov

ion of a

ircraft leasing and ship ﬁnance.

•

Princ

ipal ﬁnance fund:

The Group’s exposure to Princ

ipal F

inance Funds represents committed or invested capital in

unleveraged investment funds, primar

ily

invest

ing

in pan-Asian infrastructure, real estate and private equity.

•

Other activ

ies:

Other activ

ies include structured entit

ies created to support marg

in ﬁnanc

ing transact

ions, the reﬁnanc

ing

of exist

ing cred

it and debt facil

ies, as well as setting up of bankruptcy remote structured entit

ies.

445

Standard Chartered

– Annual Report 2022

Financ

ial statements

34. Cash ﬂow statement

Adjustment for non-cash items and other adjustments included with

income statement

Group

Company

2022

$mill

ion

2021

$mill

ion

2022

$mill

ion

2021

$mill

ion

Amortisat

ion of d

iscounts and premiums of investment securit

ies

237

–

Interest expense on subordinated liab

ies

570

497

615

551

Interest expense on senior debt securit

ies

in issue

794

528

696

522

Other non-cash items

(12)

(113)

301

(30)

Pension costs for deﬁned beneﬁt schemes

–

Share-based payment costs

199

167

–

Impairment losses on loans and advances and other credit risk

provis

ions

836

254

–

Div

idend

income from subsid

iar

ies

–

(1,047)

(2,244)

Other impa

irment

439

372

–

Gain on disposal of property, plant and equipment

(62)

(93)

–

Loss/(gain) on disposal of FVOCI and AMCST ﬁnanc

ial assets

190

(179)

–

Depreciat

ion and amort

isat

ion

1,186

1,181

–

Fair value changes through proﬁt or loss

(365)

(48)

–

Foreign currency revaluation

(365)

(337)

–

Proﬁt from associates and jo

int ventures

(156)

(196)

–

Total

3,549

2,104

565

(1,201)

Change in operating assets

Group

Company

2022

$mill

ion

2021

$mill

ion

2022

$mill

ion

2021

$mill

ion

(Increase)/decrease in derivat

ive ﬁnancial

instruments

(11,873)

16,527

259

630

Decrease/(increase) in debt securit

ies, treasury b

ills and equity shares

held at fair value through proﬁt or loss

9,888

(7,707)

289

(2,864)

Decrease/(increase) in loans and advances to banks and customers

(41,066)

–

Net increase in prepayments and accrued income

(1,056)

(84)

–

Net decrease/(increase) in other assets

2,470

(5,574)

(806)

(3,132)

Total

(545)

(37,904)

(258)

(5,366)

Change in operating liab

ies

Group

Company

2022

$mill

ion

2021¹

$mill

ion

2022

$mill

ion

2021¹

$mill

ion

Increase/(decrease) in derivat

ive ﬁnancial

instruments

17,145

(17,664)

1,004

–

Net (decrease)/increase in deposits from banks, customer accounts,

debt securit

ies

in issue, Hong Kong notes in circulat

ion and short

posit

ions

(9,259)

66,805

106

3,977

Increase/(decrease) in accruals and deferred income

1,381

176

(15)

Net decrease in other liab

ies

(481)

(3,363)

(2,080)

(839)

Total

8,786

45,954

(966)

3,123

Prior period has been restated

446

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

34. Cash ﬂow statement

continued

Disclosures

Group

Company

2022

$mill

ion

2021

$mill

ion

2022

$mill

ion

2021

$mill

ion

Subordinated debt (includ

ing accrued

interest):

Opening balance

16,885

16,892

16,395

16,301

Proceeds from the issue

750

1,137

750

1,137

Interest paid

(667)

(580)

(619)

(576)

Repayment

(1,848)

(546)

(1,800)

(546)

Foreign exchange movements

(338)

(201)

(337)

(201)

Fair value changes

(1,502)

(401)

(1,098)

(305)

Accrued interest and others

648

584

604

585

Closing balance

13,928

16,885

13,895

16,395

Senior debt (includ

ing accrued

interest):

Opening balance

29,904

29,990

16,981

20,889

Proceeds from the issue

11,902

10,944

1,500

2,250

Interest paid

(845)

(690)

(506)

(504)

Repayment

(7,838)

(9,945)

(2,980)

(5,408)

Foreign exchange movements

(729)

(678)

(431)

(366)

Fair value changes

(1,051)

(402)

(1,014)

(372)

Accrued Interest and Others

945

685

530

492

Closing balance

32,288

29,904

14,080

16,981

35. Cash and cash equivalents

Accounting policy

For the purposes of the cash ﬂow statement, cash and cash equivalents comprise cash, on demand and overnight balances

with central banks (unless restricted) and balances with less than three months’ maturity from the date of acquis

ion,

includ

ing treasury b

ills and other elig

ible b

ills, loans and advances to banks, and short-term government securit

ies.

The following balances with less than three months’ maturity from the date of acquis

ion have been ident

iﬁed by the Group as

being cash and cash equivalents.

Group

Company

2022

$mill

ion

2021

$mill

ion

2022

$mill

ion

2021

$mill

ion

Cash and balances at central banks

58,263

72,663

–

Less: restricted balances

(9,173)

(8,152)

–

Treasury bills and other elig

ible b

ills

17,936

9,132

–

Loans and advances to banks

20,558

24,788

–

Trading securit

ies

1,135

1,174

–

Amounts owed by and due to subsid

iary undertak

ings

–

7,417

11,336

Total

88,719

99,605

7,417

11,336

447

Standard Chartered

– Annual Report 2022

Financ

ial statements

36. Related party transactions

Directors and ofﬁcers

Details of directors’ remuneration and interests in shares are disclosed in the Directors’ remuneration report.

IAS 24 Related party disclosures requires the following addit

ional

informat

ion for key management compensat

ion. Key

management comprises non-executive directors, executive directors of Standard Chartered PLC, the Court directors of

Standard Chartered Bank and the persons discharg

ing manager

ial responsib

ies (PDMR) of Standard Chartered PLC.

2022

$mill

ion

2021

$mill

ion

Salaries, allowances and beneﬁts in kind

Share-based payments

Bonuses paid or receivable

Terminat

ion beneﬁts

Total

Transactions with directors and others

At 31 December 2022, the total amounts to be disclosed under the Companies Act 2006 (the Act) and the List

ing Rules of the

Hong Kong Stock Exchange Lim

ited (Hong Kong L

ist

ing Rules) about loans to d

irectors were as follows:

2022

2021

Number

$mill

ion

Number

$mill

ion

Directors¹

–

Outstanding loan balances were below $50,000

The loan transactions provided to the directors of Standard Chartered PLC were a connected transaction under Chapter 14A of

the Hong Kong List

ing Rules. It was fully exempt as ﬁnancial ass

istance under Rule 14A.87(1), as it was provided in our ordinary

and usual course of business and on normal commercial terms.

As at 31 December 2022, Standard Chartered Bank had in place a charge over $89 mill

ion (2021: $100 m

ill

ion) of cash assets

favour of the independent trustee of its employer ﬁnanced retirement beneﬁt scheme.

Other than as disclosed in the Annual Report and Accounts, there were no other transactions, arrangements or agreements

outstanding for any director, connected person or ofﬁcer of the Company which have to be disclosed under the Act, the rules of

the UK List

ing Author

ity or the Hong Kong List

ing Rules.

Details of non-revenue transactions with Temasek Holdings (Private) Lim

ited are set out on page 222.

Company

The Company has received $1,012 mill

ion (2021: $907 m

ill

ion) of net

interest income from its subsid

iar

ies. The Company issues

debt externally and lends proceeds to Group companies.

The Company has an agreement with Standard Chartered Bank that in the event of Standard Chartered Bank defaulting on

its debt coupon interest payments, where the terms of such debt requires it, the Company shall issue shares as settlement for

non-payment of the coupon interest.

2022

2021

Standard

Chartered Bank

$mill

ion

Standard

Chartered Bank

(Hong Kong)

Lim

ited

$mill

ion

Others

$mill

ion

Standard

Chartered Bank

$mill

ion

Standard

Chartered Bank

(Hong Kong)

Lim

ited

$mill

ion

Others

$mill

ion

Assets

Due from subsid

iar

ies

6,860

141

255

10,814

279

Derivat

ive ﬁnancial

instruments

–

266

–

Debt securit

ies

18,787

4,469

526

19,047

4,852

1,173

Total assets

25,694

4,610

781

30,127

4,988

1,452

Liab

ies

Due to subsid

iar

ies

–

Derivat

ive ﬁnancial

instruments

1,283

–

339

–

Total liab

ies

1,285

–

339

–

Others include Standard Chartered Bank (Singapore) Lim

ited, Standard Chartered Hold

ings Lim

ited and Standard Chartered I H L

ited

448

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

36. Related party transactions

continued

Associate and jo

int ventures

The following transactions with related parties are on an arm’s length basis:

2022

$mill

ion

2021

(Restated)¹

$mill

ion

Assets

Loans and advances

Derivat

ive assets

Total assets

Liab

ies

Deposits

610

984

Derivat

ive l

iab

ies

–

Other liab

ies

–

Total liab

ies

629

985

Loan commitments and other guarantees²

164

Prior period has been restated

The maximum loan commitments and other guarantees during the period were $164 mill

ion (2021: $80 m

ill

ion)

37. Post balance sheet events

On 9 January 2023, Standard Chartered PLC issued $1 bill

ion 6.170 per cent F

ixed Rate Reset Notes due 2027 and $1.5 bill

ion

6.301 per cent Fixed Rate Reset Notes due 2029.

The Group announced, on 11 January 2023, the launch of the process to explore alternatives for the future ownership of its

aviat

ion ﬁnance bus

iness with

in the CCIB bus

iness segment.

While an auction is now underway, no commitment to a sale

existed at 31 December 2022 and, in accordance with IFRS 5, the Group did not meet the requirements to classify the business as

‘held for sale’. While it is not possible to estimate the ﬁnanc

ial effect of a sale at th

is stage, as no bids have been received yet, we

do not expect to execute it at below our book values.

A share buy-back for up to a maximum considerat

ion of $1 b

ill

ion has been declared by the d

irectors after 31 December 2022.

This will reduce the number of ordinary shares in issue by cancelling the repurchased shares.

A ﬁnal div

idend for 2022 of 14 cents per ord

inary share was declared by the directors after 31 December 2022.

38. Auditor’s remuneration

Auditor’s remuneration is included with

in other general adm

istrat

ion expenses. The amounts paid by the Group to their

princ

ipal aud

itor, Ernst & Young LLP and its associates (together Ernst & Young LLP), are set out below. All services are approved

by the Group Audit Committee and are subject to controls to ensure the external auditor’s independence is unaffected by the

provis

ion of other serv

ices.

2022

$mill

ion

2021

$mill

ion

Audit fees for the Group statutory audit

22.2

15.9

Of which fees for the audit of Standard Chartered Bank Group

16.3

11.8

Fees payable to EY for other services provided to the SC PLC Group:

Audit of Standard Chartered PLC subsid

iar

ies

12.8

10.8

Total audit fees

35.0

26.7

Audit-related assurance services

5.5

5.3

Other assurance services

4.3

3.2

Other non-audit services

0.1

Corporate ﬁnance transaction services

0.3

0.6

Total non-audit fees

10.2

9.2

Total fees payable

45.2

35.9

The following is a descript

ion of the type of serv

ices included with

in the categor

ies listed above:

•

Audit fees for the Group statutory audit are in respect of fees payable to Ernst & Young LLP for the statutory audit of the

consolidated ﬁnanc

ial statements of the Group and the separate ﬁnancial statements of Standard Chartered PLC

•

Audit-related fees consist of fees such as those for services required by law or regulation to be provided by the auditor, reviews

of inter

im ﬁnancial

informat

ion, report

ing on regulatory returns, reporting to a regulator on client assets and extended work

performed over ﬁnancial

informat

ion and controls author

ised by those charged with governance

•

Other assurance services include agreed-upon-procedures in relation to statutory and regulatory ﬁl

ings

•

Corporate ﬁnance transaction services are fees payable to Ernst & Young LLP for issu

ing comfort letters

Expenses incurred in respect of their role as auditor, were reimbursed to EY LLP $0.6 mill

ion (2021: $0.2 m

ill

ion). Such expenses d

not exceed 1% of total fees charged above.

449

Standard Chartered

– Annual Report 2022

Financ

ial statements

39. Standard Chartered PLC (Company)

Classif

icat

ion and measurement of ﬁnanc

ial

instruments

Financ

ial assets

2022

2021

Derivat

ives

held for

hedging

$mill

ion

Amortised

cost

$mill

ion

Non-trading

mandatorily

at fair value

through

proﬁt or loss

$mill

ion

Total

$mill

ion

Derivat

ives

held for

hedging

$mill

ion

Amortised

cost

$mill

ion

Non-trading

mandatorily

at fair value

through

proﬁt or loss

$mill

ion

Total

$mill

ion

Derivat

ives

–

320

–

320

Investment securit

ies

–

8,423

15,358

23,781

–

9,424

15,647

25,071

Amounts owed by subsid

iary

undertakings

–

7,417

–

7,417

–

11,336

–

11,336

Total

15,840

15,358

31,259

320

20,760

15,647

36,727

Standard Chartered Bank, Standard Chartered Bank (Hong Kong) Lim

ited, Standard Chartered Bank (Ch

ina) Lim

ited and Standard Chartered Bank (S

ingapore)

Lim

ited

issued Loss Absorbing Capacity (LAC) elig

ible debt secur

ies

Instruments classif

ied as amort

ised cost, which include investment securit

ies and amounts owed by subs

iary undertak

ings, are

recorded in stage 1 for the recognit

ion of expected cred

it losses.

Derivat

ives held for hedg

ing are held at fair value and are classif

ied as Level 2 and Level 3 wh

ile the counterparty is Standard

Chartered Bank and external counterparties.

Debt securit

ies compr

ise corporate securit

ies

issued by Standard Chartered Bank and have a fair value equal to carrying value

of $8,423 mill

ion (2021: $9,424 m

ill

ion).

In 2022 and 2021, amounts owed by subsid

iary undertak

ings have a fair value equal to carrying value.

Financ

ial l

iab

ies

2022

2021

Derivat

ives

held for

hedging

$mill

ion

Amortised

cost

$mill

ion

Designated

at fair value

through

proﬁt or loss

$mill

ion

Total

$mill

ion

Derivat

ives

held for

hedging

$mill

ion

Amortised

cost

$mill

ion

Designated

at fair value

through

proﬁt or loss

$mill

ion

Total

$mill

ion

Derivat

ives

1,343

–

1,343

339

–

339

Debt securit

ies

in issue

–

13,891

10,397

24,288

–

16,809

9,472

26,281

Subordinated liab

ies and other

borrowed funds

–

11,239

2,445

13,684

–

13,830

2,332

16,162

Amounts owed to subsid

iary

undertakings

–

Total

1,343

25,132

12,842

39,317

339

30,639

11,804

42,782

Derivat

ives held for hedg

ing are held at fair value and are classif

ied as Level 2 and Level 3 wh

ile the counterparty is Standard

Chartered Bank and external counter parties.

The fair value of debt securit

ies

in issue held at amortised cost is $13,611 mill

ion (2021: $17,171 m

ill

ion).

The fair value of subordinated liab

ies and other borrowed funds held at amort

ised cost is $10,434 mill

ion (2021:

$14,569 mill

ion).

Derivat

ive ﬁnancial

instruments

Derivat

ives

2022

2021

Notional

princ

ipal

amounts

$mill

ion

Assets

$mill

ion

Liab

ies

$mill

ion

Notional

princ

ipal

amounts

$mill

ion

Assets

$mill

ion

Liab

ies

$mill

ion

Foreign exchange derivat

ive contracts:

Forward foreign exchange

9,351

8,362

Currency swaps

574

–

2,049

–

207

Interest rate derivat

ive contracts:

Swaps

15,423

–

1,211

14,465

266

Credit derivat

ive contracts

3,256

–

Total

28,604

1,343

24,876

320

339

450

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

39. Standard Chartered PLC (Company)

continued

Credit risk

Maximum exposure to credit risk

2022

$mill

ion

2021

$mill

ion

Derivat

ive ﬁnancial

instruments

320

Debt securit

ies

23,781

25,071

Amounts owed by subsid

iary undertak

ings

7,417

11,336

Total

31,259

36,727

In 2022 and 2021, amounts owed by subsid

iary undertak

ings were neither past due nor impa

ired; the Company had no

ind

idually impa

ired loans.

In 2022 and 2021, the Company had no impa

ired debt secur

ies. The debt secur

ies held by the Company are

issued by

Standard Chartered Bank, Standard Chartered Bank (Hong Kong) Lim

ited, Standard Chartered Bank (Ch

ina) Lim

ited and

Standard Chartered Bank (Singapore) Lim

ited, subs

iary undertak

ings with credit ratings of A+.

There is no material expected credit loss on these instruments as they are Stage 1 assets, and of a high quality.

Liqu

ity risk

The following table analyses the residual contractual maturity of the assets and liab

ies of the Company on a d

iscounted

basis:

2022

One month

or less

$mill

ion

Between

one month

and three

months

$mill

ion

Between

three

months and

six months

$mill

ion

Between

six months

and nine

months

$mill

ion

Between

nine months

and one

year

$mill

ion

Between

one year

and two

years

$mill

ion

Between

two years

and ﬁve

years

$mill

ion

More than

ﬁve years

and

undated

$mill

ion

Total

$mill

ion

Assets

Derivat

ive ﬁnancial

instruments

–

Investment securit

ies

2,000

–

5,351

16,430

23,781

Amount owed by subsid

iary

undertakings

719

1,250

140

–

840

1,523

2,081

864

7,417

Investments in subsid

iary

undertakings

–

60,975

Other assets

–

Total assets

2,764

1,250

140

–

840

1,523

7,448

78,269

92,234

Liab

ies

Derivat

ive ﬁnancial

instruments

–

330

858

1,343

Senior debt

–

2,090

14,155

8,043

24,288

Amount owed to subsid

iary

undertakings

–

Other liab

ies

175

134

–

423

Subordinated liab

ies and

other borrowed funds

2,004

248

1,900

2,078

7,339

13,684

Total liab

ies

2,256

225

108

262

4,065

16,563

16,242

39,740

Net liqu

ity gap

508

1,025

(262)

821

(2,542)

(9,115)

62,027

52,494

451

Standard Chartered

– Annual Report 2022

Financ

ial statements

39. Standard Chartered PLC (Company)

continued

2021

One month

or less

$mill

ion

Between

one month

and three

months

$mill

ion

Between

three

months and

six months

$mill

ion

Between

six months

and nine

months

$mill

ion

Between

nine months

and one

year

$mill

ion

Between

one year

and two

years

$mill

ion

Between

two years

and ﬁve

years

$mill

ion

More than

ﬁve years

and

undated

$mill

ion

Total

$mill

ion

Assets

Derivat

ive ﬁnancial

instruments

–

104

103

320

Investment securit

ies

–

960

4,444

2,947

16,720

25,071

Amount owed by subsid

iary

undertakings

2,335

159

216

305

853

2,349

2,132

2,987

11,336

Investments in subsid

iary

undertakings

–

60,429

Total assets

2,390

160

218

305

1,813

6,848

5,183

80,239

97,156

Liab

ies

Derivat

ive ﬁnancial

instruments

–

117

339

Senior debt

–

4,542

11,873

9,866

26,281

Other debt securit

ies

in issue

–

Amount owed to subsid

iary

undertakings

–

Other liab

ies

169

126

–

462

Subordinated liab

ies and

other borrowed funds

1,007

240

883

2,409

2,470

9,091

16,162

Total liab

ies

1,223

173

259

988

6,951

14,460

19,092

43,244

Net liqu

ity gap

1,167

(13)

120

825

(103)

(9,277)

61,147

53,912

Financ

ial l

iab

ies on an und

iscounted basis

2022

One month

or less

$mill

ion

Between

one month

and three

months

$mill

ion

Between

three

months and

six months

$mill

ion

Between

six months

and nine

months

$mill

ion

Between

nine months

and one

year

$mill

ion

Between

one year

and two

years

$mill

ion

Between

two years

and ﬁve

years

$mill

ion

More than

ﬁve years

and

undated

$mill

ion

Total

$mill

ion

Derivat

ive ﬁnancial

instruments

–

330

858

1,343

Debt securit

ies

in issue

262

145

271

2,896

15,676

9,057

28,461

Subordinated liab

ies

and other borrowed funds

2,097

174

273

2,035

2,552

14,668

21,849

Other liab

ies

–

Total liab

ies

2,271

258

295

418

288

5,006

18,558

24,583

51,677

2021

One month

or less

$mill

ion

Between

one month

and three

months

$mill

ion

Between

three

months and

six months

$mill

ion

Between

six months

and nine

months

$mill

ion

Between

nine months

and one

year

$mill

ion

Between

one year

and two

years

$mill

ion

Between

two years

and ﬁve

years

$mill

ion

More than

ﬁve years

and

undated

$mill

ion

Total

$mill

ion

Derivat

ive ﬁnancial

instruments

–

117

339

Debt securit

ies

in issue

102

179

130

196

5,144

13,122

11,019

29,922

Subordinated liab

ies and

other borrowed funds

1,114

134

261

917

2,522

2,786

15,376

23,147

Other liab

ies

–

Total liab

ies

1,263

164

216

395

1,208

7,666

16,025

26,530

53,467

452

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

40. Related undertakings of the Group

As at 31 December 2022, the Group’s interests in related undertakings are disclosed below. Unless otherwise stated, the share

capital disclosed comprises ordinary or common shares which are held by subsid

iar

ies of the Group. Standard Chartered Bank

(Hong Kong) Lim

ited, Standard Chartered Fund

ing (Jersey) Lim

ited, Stanchart Nom

inees Lim

ited, Standard Chartered Hold

ings

Lim

ited and Standard Chartered Nom

inees Lim

ited are d

irectly held subsid

iar

ies, all other related undertakings are held

ind

irectly. Unless otherw

ise stated, the princ

ipal country of operat

ion of each subsid

iary

is the same as its country of

incorporation Note 32 details undertakings that have a sign

iﬁcant contr

ibut

ion to the Group’s net proﬁt or net assets.

Subsid

iary Undertak

ings

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following companies have the

address of 1 Basinghall Avenue, London,

EC2V 5DD, United Kingdom

FinVentures UK Lim

ited

Investment Holding

Company

United Kingdom

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing (UK) Lim

ited

Leasing Business

United Kingdom

£1.00 Ordinary shares

100

SC (Secretaries) Lim

ited

Others

United Kingdom

£1.00 Ordinary shares

100

SC Transport Leasing 1 LTD

7,8

Leasing Business

United Kingdom

£1.00 Ordinary shares

100

SC Transport Leasing 2 Lim

ited

7,8

Leasing Business

United Kingdom

£1.00 Ordinary shares

100

SC Ventures Innovation Investment L.P.

Investment Holding

Company

United Kingdom

Lim

ited Partnersh

ip interest

100

SCMB Overseas Lim

ited

Investment Holding

Company

United Kingdom

£0.10 Ordinary shares

100

Stanchart Nominees Lim

ited

Nominee Services

United Kingdom

£1.00 Ordinary shares

100

Standard Chartered Africa Lim

ited

Investment Holding

Company

United Kingdom

£1.00 Ordinary shares

100

Standard Chartered Bank

Banking & Financ

ial

Services

United Kingdom

US$0.01 Non-Cumulative

Irredeemable Preference

100

US$1.00 Ordinary

100

US$5.00 Non-Cumulative

Redeemable Preference

100

Standard Chartered Foundation

Charity projects

United Kingdom

Guarantor

100

Standard Chartered Health Trustee (UK)

Lim

ited

Trustee Services

United Kingdom

£1.00 Ordinary shares

100

Standard Chartered Holdings Lim

ited

Investment Holding

Company

United Kingdom

$2.00 Ordinary shares

100

Standard Chartered I H Lim

ited

Investment Holding

Company

United Kingdom

$1.00 Ordinary shares

100

Standard Chartered Leasing (UK) 3

Lim

ited⁹

Leasing Business

United Kingdom

$1.00 Ordinary shares

100

Standard Chartered Leasing (UK)

Lim

ited

7,8,9

Leasing Business

United Kingdom

$1.00 Ordinary shares

100

Standard Chartered NEA Lim

ited

Investment Holding

Company

United Kingdom

$1.00 Ordinary shares

100

Standard Chartered Nominees Lim

ited

Nominee Services

United Kingdom

£1.00 Ordinary shares

100

Standard Chartered Nominees (Private

Clients UK) Lim

ited

Nominee Services

United Kingdom

$1.00 Ordinary shares

100

Standard Chartered Strategic

Investments Lim

ited

Investment Holding

Company

United Kingdom

$1.00 Ordinary shares

100

Standard Chartered Securit

ies (Afr

ica)

Holdings Lim

ited

Investment Holding

Company

United Kingdom

$1.00 Ordinary shares

100

Standard Chartered Trustees (UK)

Lim

ited

Trustee Services

United Kingdom

£1.00 Ordinary shares

100

Standard Chartered UK Holdings

Lim

ited

Investment Holding

Company

United Kingdom

$1.00 Ordinary shares

100

The SC Transport Leasing Partnership 1

Leasing Business

United Kingdom

Lim

ited Partnersh

ip interest

100

The SC Transport Leasing Partnership 2

Leasing Business

United Kingdom

Lim

ited Partnersh

ip interest

100

The SC Transport Leasing Partnership 3

Leasing Business

United Kingdom

Lim

ited Partnersh

ip interest

100

The SC Transport Leasing Partnership 4

Leasing Business

United Kingdom

Lim

ited Partnersh

ip interest

100

453

Standard Chartered

– Annual Report 2022

Financ

ial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The BW Leasing Partnership 1 LP

Leasing Business

United Kingdom

Lim

ited Partnersh

ip interest

100

The BW Leasing Partnership 2 LP

Leasing Business

United Kingdom

Lim

ited Partnersh

ip interest

100

The BW Leasing Partnership 3 LP

Leasing Business

United Kingdom

Lim

ited Partnersh

ip interest

100

The BW Leasing Partnership 4 LP

Leasing Business

United Kingdom

Lim

ited Partnersh

ip interest

100

The BW Leasing Partnership 5 LP

Leasing Business

United Kingdom

Lim

ited Partnersh

ip interest

100

Zodia Markets (UK) Lim

ited

Banking & Financ

ial

Services

United Kingdom

$1.00 Ordinary shares

100

Zodia Markets Holdings Lim

ited

Banking & Financ

ial

Services

United Kingdom

$1.00 Ordinary shares

75.0

The following companies have the

address of 2 More London Rivers

ide,

London SE1 2JT, United Kingdom

Bricks (C&K) LP

Lim

ited Partnersh

ip interest

United Kingdom

Lim

ited Partnersh

ip interest

100

Bricks (C) LP

Lim

ited Partnersh

ip interest

United Kingdom

Lim

ited Partnersh

ip interest

100

Bricks (T) LP

Lim

ited Partnersh

ip interest

United Kingdom

Lim

ited Partnersh

ip interest

100

The following companies have the

address of 8th Floor, 20 Farringdon

Street, London, EC4A 4AB, United

Kingdom.

SC Ventures G.P. Lim

ited

Investment Holding

Company

United Kingdom

£1.00 Ordinary shares

100

Assembly Payments UK Ltd

Payment Services Provider

United Kingdom

$1.00 Ordinary shares

100

The following company has the address

of 1 Bartholomew Lane, London, EC2N

2AX, United Kingdom

Corrasi Covered Bonds LLP

Trustee Services

United Kingdom

Membership Interest

50.0

The following companies have the

address of Thomas House, 84 Eccleston

Square, London, SW1V 1PX, United

Kingdom

Zodia Custody Lim

ited

Custody services

United Kingdom

$1.00 Ordinary shares

95.1

Zodia Holdings Lim

ited

Investment holding

company

United Kingdom

$1.00 Ordinary shares

100

The following company has the address

of Robert Denholm House, Bletchingly

Road, Nutﬁeld, Redhill, RH1 4HW, United

Kingdom

CurrencyFair (UK) Lim

ited

Banking & Financ

ial

Services

United Kingdom

£1.00 Ordinary shares

100

The following company has the address

of 23 De Walden Street, London, W1G

8RW, United Kingdom

Shoal Lim

ited

Dig

ital marketplace for

sustainable and “green”

products.

United Kingdom

US$1.00 Ordinary

100

The following company has the address

of 1 Poultry, London, EC2R 8EJ, United

Kingdom

Zai Technologies Lim

ited

Payment Services Provider.

United Kingdom

£1.00 Ordinary

100

The following company has the address

Edifíc

io K

ilamba, 8º Andar Avenida 4 de

Fevereiro, Marginal, Luanda, Angola

Standard Chartered Bank Angola S.A.

Banking & Financ

ial

Services

Angola

AOK8,742.05 Ordinary shares

60.0

The following company has the address

of Level 5, 345 George St, Sydney NSW

2000, Australia

Standard Chartered Grindlays Pty

Lim

ited

Investment Holding

Company

Australia

AUD Ordinary shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

454

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of 17/31 Queen Street, Melbourne VIC

3000, Australia

Assembly Payments Australia Pty Ltd

Holding Company

Australia

$ Ordinary shares

100

The following company has the address

of Wilsons Landing, Level 5, 6A Glen

Street, Milsons Point NSW 2061, Australia

CurrencyFair Australia Pty Ltd

Foreign Currency

conversion services.

Australia

AUD Ordinary

100

The following company has the address

of Level 20, 31 Queen Street, Melbourne

VIC 3000, Australia

Zai Australia Pty Ltd

Payment Service Provider

Australia

$1.00 Ordinary

100

AUD0.01 Ordinary shares

The following companies have the

address of 5th Floor Standard House

Bldg, The Mall, Queens Road, PO Box

496, Gaborone, Botswana

Standard Chartered Bank Insurance

Agency (Proprietary) Lim

ited

Insurance Services

Botswana

BWP Ordinary shares

100

Standard Chartered Investment Services

(Proprietary) Lim

ited

Nominee Services

Botswana

BWP Ordinary shares

100

Standard Chartered Bank Botswana

Lim

ited

Banking & Financ

ial

Services

Botswana

BWP Ordinary shares

75.8

Standard Chartered Botswana

Nominees (Proprietary) Lim

ited

Nominee Services

Botswana

BWP Ordinary shares

100

Standard Chartered Botswana

Education Trust

CSR programme.

Botswana

Interest in Trust

100

The following company has the address

of Avenida Brigade

iro Far

ia Lima, no

3.477, 6º andar, conjunto 62 - Torre Norte,

Condomin

io Pat

io Victor Malzoni, CEP

04538-133, Sao Paulo, Brazil

Standard Chartered Representação e

Partic

ipações Ltda

Banking & Financ

ial

Services

Brazil

BRL1.00 Ordinary shares

100

The following company has the address

of G01-02, Wisma Haj

i Mohd Taha

Build

ing, Jalan Gadong, BE4119, Brune

Darussalam

Standard Chartered Securit

ies (B) Sdn

Bhd

Investment Management

Brunei Darussalam

BND1.00 Ordinary shares

100

The following company has the address

of Standard Chartered Bank Cameroon

S.A, 1155, Boulevard de la Liberté, Douala,

B.P. 1784, Cameroon

Standard Chartered Bank Cameroon

S.A.

Banking & Financ

ial

Services

Cameroon

XAF10,000.00 Ordinary

100

The following company has the address

of 66 Wellington Street, West, Suite 4100,

Toronto Domin

ion Centre, Toronto ON

M5K 1B7, Canada

CurrencyFair (Canada) Ltd

Dormant

Canada

CAD$ Common shares

100

The following company has the address

of Maples Corporate Services Lim

ited,

PO Box 309, Ugland House, Grand

Cayman KY1-1104, Cayman Islands

Cerulean Investments LP

Investment Holding

Company

Cayman Islands

Lim

ited Partnersh

ip interest

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

455

Standard Chartered

– Annual Report 2022

Financ

ial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of Maples Finance Lim

ited, PO Box 1093

GT, Queensgate House, Georgetown,

Grand Cayman, Cayman Islands

SCB Investment Holding Company

Lim

ited

Investment Holding

Company

Cayman Islands

US$1,000.00 Ordinary-A

99.9

The following company has the address

of No. 1034, Managed by Tianjin

Dongjiang Secretar

ial Services , Co., Ltd.,

Room 202, Ofﬁce Area of Inspection

Warehouse,, No.6262 Ao Zhou Road,

Dongjiang Free Trade Port Zone,, T

ianjin

Pilot Free Trade Zone, China

Pembroke Aircraft Leasing (Tianjin)

Lim

ited

Holding Company

China

$1.00 Ordinary shares

100

The following company has the address

of No. 1035, Managed by Tianjin

Dongjiang Secretar

ial Services , Co., Ltd.,

Room 202, Ofﬁce Area of Inspection

Warehouse,, No.6262 Ao Zhou Road,

Dongjiang Free Trade Port Zone,, T

ianjin

Pilot Free Trade Zone, China

Pembroke Aircraft Leasing Tianjin 1

Lim

ited

SPV for Aircraft Operating

Lease Business

China

CNY1.00 Ordinary shares

100

The following company has the address

of No. 1036, Managed by Tianjin

Dongjiang Secretar

ial Services , Co., Ltd.,

Room 202, Ofﬁce Area of Inspection

Warehouse,, No.6262 Ao Zhou Road,

Dongjiang Free Trade Port Zone,, T

ianjin

Pilot Free Trade Zone, China

Pembroke Aircraft Leasing Tianjin 2

Lim

ited

SPV for Aircraft Operating

Lease Business

China

CNY1.00 Ordinary shares

100

The following company has the address

of Standard Chartered Tower, 201

Century Avenue, Pudong, Shanghai

200120, China

Standard Chartered Bank (China)

Lim

ited

Commercial banking

China

CNY Ordinary shares

100

The following company has the address

of No. 35, Xinhuanbe

i Road, TEDA,

Tianjin, 300457, China

Standard Chartered Global Business

Services Co. Lim

ited

Research, development,

other services

China

$ Ordinary shares

100

The following companies have the

address of Units Unit 802B, 803, 1001A,10

02B,1003-1005,1101-1105, 1201-

1205,1302C,1303, No. 235 Tianhe North

Road, Tianhe Distr

ict,, Guangzhou C

ity,

Guangdong Province, China

Standard Chartered Global Business

Services (Guangzhou) Co.Ltd.

Research, development,

other services

China

$ Ordinary shares

100

Standard Chartered (Guangzhou)

Business Management Co.Ltd.

Business consulting services

China

$ Ordinary shares

100

The following company has the address

of 8A, Hony Tower, 1st Financ

ial Street,

Nanshan Distr

ict, Shenzen, Ch

ina

SC Ventures Investment Management

(Shenzhen) Lim

ited

Serve as a fund manager in

China

US$1.00 Ordinary

100

The following company has the address

of Room 2619, No 9, Linhe West Road,

Tianhe Distr

ict, Guangzhou, Ch

ina

Guangzhou CurrencyFair Information

Technology Lim

ited³

Foreign Currency

conversion services.

China

CNY Ordinary shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

456

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of No. 188 Yeshen Rd, 11F, A-1161 RM,

Pudong New Distr

ict, Shangha

i, 31,

201308, China

Standard Chartered Trading (Shanghai)

Lim

ited

wholesale of base metal

and its products

China

$15,000,000.00 Ordinary

100

The following company has the address

of Standard Chartered Bank Cote

d’Ivoire, 23 Boulevard de la République,

Abidjan 17, 17 B.P. 1141, Cote d’Ivoire

Standard Chartered Bank Cote d’ Ivoire

Banking & Financ

ial

Services

Cote d’Ivoire

XOF100,000.00 Ordinary

100

The following company has the address

of 8 Ecowas Avenue, Banjul, Gambia

Standard Chartered Bank Gambia

Lim

ited

Banking & Financ

ial

Services

Gambia

GMD1.00 Ordinary shares

74.8

The following company has the address

of Taunusanlage 16, 60325, Frankfurt am

Main, Germany

Standard Chartered Bank AG

Banking & Financ

ial

Services

Germany

€ Ordinary shares

100

The following companies have the

address of Standard Chartered Bank

Build

ing, 87 Independence Avenue, P.O.

Box 768, Accra,Ghana

Standard Chartered Bank Ghana PLC

Banking & Financ

ial

Services

Ghana

GHS Ordinary shares

69.4

GHS0.52 Non-cumulative

Irredeemable Preference

87.0

Standard Chartered Ghana Nominees

Lim

ited

Nominee Services

Ghana

GHS Ordinary shares

100

The following company has the address

of Standard Chartered Bank Ghana

Lim

ited, 87, Independence Avenue, Post

Ofﬁce Box 678, Accra, Ghana

Standard Chartered Wealth

Management Lim

ited Company

Investment Management

Ghana

GHS Ordinary shares

100

The following company has the address

of 18/F., Standard Chartered Tower, 388

Kwun Tong Road, Kwun Tong, Kowloon,

Hong Kong

Horsford Nominees Lim

ited

Nominee Services

Hong Kong

HKD Ordinary shares

100

The following companies have the

address of 14th Floor, One Taikoo Place,

979 King’s Road, Quarry Bay, Hong Kong.

Kozagi Lim

ited

Investment Holding

Company

Hong Kong

HKD Ordinary shares

100

Standard Chartered PF Real Estate

(Hong Kong) Lim

ited

Investment Holding

Company

Hong Kong

$ Ordinary shares

100

The following companies have the

address of 15/F., Two International

Finance Centre, No. 8 Finance Street,

Central, Hong Kong

Marina Acacia Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Amethyst Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Angelite Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Beryl Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Emerald Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Flax Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Gloxin

ia Sh

ipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

457

Standard Chartered

– Annual Report 2022

Financ

ial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

Marina Hazel Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Ilex Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Iridot Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Leasing Lim

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Mimosa Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Moonstone Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Peridot Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Sapphire Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Marina Tourmaline Shipp

ing L

ited

Leasing Business

Hong Kong

$ Ordinary shares

100

Standard Chartered Leasing Group

Lim

ited

Investment Holding

Company

Hong Kong

$ Ordinary shares

100

The following company has the address

of 25/F, Standard Chartered Bank

Build

ing, 4-4A Des Voeux Road Central,

Hong Kong

Standard Chartered Trade Support (HK)

Lim

ited

Corporate Finance &

Advisory Services

Hong Kong

HKD Ordinary shares

100

The following company has the address

of 13/F Standard Chartered Bank

Build

ing, 4-4A Des Voeux Road Central,

Hong Kong

Standard Chartered Private Equity

Lim

ited

Investment Holding

Company

Hong Kong

HKD Ordinary shares

100

The following company has the address

of 14/F, Standard Chartered Bank

Build

ing, 4-4A Des Voeux Road, Central,

Hong Kong

Standard Chartered Trust (Hong Kong)

Lim

ited

Investment Management

Hong Kong

HKD Ordinary shares

100

The following company has the address

of 15/F, Two International Finance Centre,

No. 8 Finance Street, Central, Hong Kong

Standard Chartered Securit

ies (Hong

Kong) Lim

ited

Corporate Finance &

Advisory Services

Hong Kong

HKD Ordinary shares

100

The following company has the address

of 21/F, Standard Chartered Tower, 388

Kwun Tong Road, Kwun Tong, Kowloon,

Hong Kong

Standard Chartered Asia Lim

ited

Investment Holding

Company

Hong Kong

HKD Deferred shares

100

HKD Ordinary shares

100

The following company has the address

of 32/F, Standard Chartered Bank

Build

ing, 4-4A Des Voeux Road, Central,

Hong Kong

Standard Chartered Bank (Hong Kong)

Lim

ited

Banking & Financ

ial

Services

Hong Kong

HKD Ordinary-A

100

HKD Ordinary-B

100

US$ Ordinary-C

100

US$ Ordinary-D

100

The following company has the address

of 39/F., Oxford House, Taikoo Place, 979

King’s Road, Quarry Bay, Hong Kong

Mox Bank Lim

ited

Banking & Financ

ial

Services

Hong Kong

HKD Ordinary shares

66.0

The following company has the address

of 31/F, Tower 2 Times Square, 1

Matheson St, Causeway Bay, Hong Kong

Assembly Payments HK Lim

ited

Online payment platform

Hong Kong

HKD Ordinary Shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

458

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of Suites 1103-4 AXA Tower, Landmark

East, 100 How Ming Street, Kwun Tong,

Hong Kong

Currencyfair Asia Lim

ited

Foreign Currency

conversion services.

Hong Kong

HKD Ordinary shares

100

The following company has the address

of 2 Floor Sabari Complex 24 Field

Marshal, Capriappa RD Shanthala

Nagar, Ashok Nagar, Bangalore,

Karnataka, , 560025, India

Assembly Payments India Private

Lim

ited

Activ

ies auxil

iary to

ﬁnancial

intermed

iat

ion

India

INR100.00 Ordinary

100

The following company has the address

of 1st Floor, Europe Build

ing, No.1,

Haddows Road, Nungambakkam,

Chennai, 600 006, India

Standard Chartered Global Business

Services Private Lim

ited

Offshore Support Services

India

INR10.00 Equity shares

100

The following company has the address

of 90 M.G.Road, II Floor, Fort, Mumbai,

Maharashtra, 400 001, India

Standard Chartered Finance Private

Lim

ited

Support Services

India

INR10.00 Ordinary shares

98.6

The following company has the address

of Ground Floor, Crescenzo Build

ing, G

Block, C 38/39 , Bandra Kurla Complex,

Bandra (East) , Mumbai , Mumbai ,

Maharashtra , 400051, India

Standard Chartered Private Equity

Advisory (India) Private Lim

ited

Support Services

India

INR1,000.00 Ordinary shares

100

The following company has the address

of Second Floor, Indiqube Edge, Khata

No. 571/630/6/4, Sy.No.6/4, Ambalipura

Village, Varthur Hobli, Marathahalli

Sub-Div

ion, Ward No. 150, Bengaluru,

560102, India.

Standard Chartered Research and

Technology India Private Lim

ited

Support Services

India

INR10.00 A Equity shares

100

INR10.00 Cumulative

Redeemable Preference

100

The following company has the address

of Crescenzo, 6th Floor, Plot No 38-39 G

Block , Bandra Kurla Complex, , Bandra

East , Mumbai , Maharashtra , 400051,

India

Standard Chartered Capital Lim

ited

Banking & Financ

ial

Services

India

INR10.00 Equity shares

100

The following company has the address

of 2nd Floor, 23-25 M.G. Road, Fort,

Mumbai, 400 001, India

Standard Chartered Securit

ies (Ind

ia)

Lim

ited

Banking & Financ

ial

Services

India

INR10.00 Equity shares

100

The following company has the address

of Ground Floor, Crescenzo Build

ing, G

Block, C 38/39 , Bandra Kurla Complex,

Bandra (East) , Mumbai , Mumbai ,

Maharashtra , 400051, India

St Helen’s Nominees India Private

Lim

ited

Nominee Services

India

INR10.00 Equity shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

459

Standard Chartered

– Annual Report 2022

Financ

ial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of Vaishnav

i Seren

ity, First Floor, No. 112,

Koramangala Industrial Area, 5th Block,

Koramangala, Bangalore, Karnataka,

560095, India

Standard Chartered (India) Modeling

and Analytics Centre Private Lim

ited

Support Services

India

INR10.00 Equity shares

100

The following companies have the

address of 91 Pembroke Road, Dublin 4,

Ballsbridge, Dublin, DO4 EC42, Ireland

CurrencyFair (Canada) Lim

ited

Dormant

Ireland

€1.00 Ordinary

100

CurrencyFair Nominees Lim

ited

Nominee company

Ireland

€1.00 Ordinary

100

The following companies have the

address of 32 Molesworth Street, Dublin

2, D02Y512, Ireland

Inishbrophy Leasing Lim

ited

Leasing Business

Ireland

€1.00 Ordinary shares

100

Inishcannon Leasing Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Inishcrean Leasing Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Inishdawson Leasing Lim

ited

Leasing Business

Ireland

€1.00 Ordinary shares

100

Inisherk

in Leas

ing Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Inishoo Leasing Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Nightjar Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 1 Lim

ited

Leasing Business

Ireland

€1.00 Ordinary shares

100

Pembroke Aircraft Leasing 2 Lim

ited

Leasing Business

Ireland

€1.00 Ordinary shares

100

Pembroke Aircraft Leasing 3 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 4 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 5 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 6 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 7 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 8 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 9 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 10 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 11 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 12 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 13 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 14 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 15 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing 16 Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Aircraft Leasing Holdings

Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Pembroke Capital Lim

ited

Leasing Business

Ireland

€1.25 Ordinary shares

100

US$1.00 Ordinary

Skua Lim

ited

Leasing Business

Ireland

$1.00 Ordinary shares

100

Zodia Markets (Ireland) Lim

ited

Banking & Financ

ial

Services

Ireland

$1.00 Ordinary shares

100

The following company has the address

of 27 Fitzw

ill

iam Street, Dublin, D02 TP23,

Ireland

Zodia Custody (Ireland) Lim

ited

Custody services

Ireland

$1.00 Ordinary shares

100

The following company has the address

of 91 Pembroke Road, Dublin 4,

Ballsbridge, Dublin, DO4 EC42, Ireland

CurrencyFair Lim

ited

FX transfer services

Ireland

€0.001 Ordinary shares

100

€0.001 Ordinary shares

27.9

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

460

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of First Names House, Victor

ia Road,

Douglas, IM2 4DF, Isle of Man

Pembroke Group Lim

ited

Aircraft leasing, ﬂeet

advisory and technical

services

Isle of Man

$0.01 Ordinary shares

100

The following companies have the

address of 1st Floor, Goldie House, 1-4

Goldie Terrace, Upper Church Street,

Douglas, IM1 1EB, Isle of Man

Standard Chartered Assurance Lim

ited

Insurance Services

Isle of Man

$1.00 Ordinary shares

100

US$1.00 Redeemable

Preference

100

Standard Chartered Isle of Man Lim

ited

Insurance & Reinsurance

Company

Isle of Man

$1.00 Ordinary shares

100

The following company has the address

of 21/F, Sanno Park Tower, 2-11-1

Nagatacho, Chiyoda-ku, Tokyo, 100-6155,

Japan

Standard Chartered Securit

ies (Japan)

Lim

ited

Banking & Financ

ial

Services

Japan

JPY Ordinary

100

The following company has the address

of 15 Castle Street, St Helier, JE4 8PT,

Jersey

SCB Nominees (CI) Lim

ited

Nominee Services

Jersey

$1.00 Ordinary shares

100

The following company has the address

of IFC 5, St Helier, JE1 1ST, Jersey

Standard Chartered Funding (Jersey)

Lim

ited

Investment Holding

Company

Jersey

£1.00 Ordinary shares

100

The following companies have the

address of StandardChartered@

Chiromo, Number 48, Westlands Road, P.

O. Box 30003 - 00100, Nairob

i, Kenya

Solveazy Technology Kenya Ltd

B2B dig

ital platform

Kenya

KES1,000.00 Ordinary

100

Standard Chartered Bancassurance

Intermediary Lim

ited

Insurance Services

Kenya

KES1,00.00 Ordinary shares

100

Standard Chartered Investment Services

Lim

ited

Investment services

Kenya

KES20.00 Ordinary shares

100

Standard Chartered Bank Kenya Lim

ited

Banking & Financ

ial

Services

Kenya

KES5.00 Ordinary shares

74.3

Standard Chartered Securit

ies (Kenya)

Lim

ited

Corporate Finance &

Advisory Services

Kenya

KES10.00 Ordinary shares

100

KES5.00 Preference

100

Standard Chartered Financ

ial Serv

ices

Lim

ited

Merchant Banking

Kenya

KES20.00 Ordinary shares

100

Standard Chartered Kenya Nominees

Lim

ited1

Nominee Services

Kenya

KES20.00 Ordinary shares

100

Tawi Fresh Kenya Lim

ited

Dig

ital Marketplace,

Ecommerce

Kenya

KES1,000.00 Ordinary

100

The following company has the address

of 47 Jongno, Jongno-gu, Seoul, 110-702,

Republic of Korea

Standard Chartered Bank Korea Lim

ited

Banking & Financ

ial

Services

Korea, Republic of

KRW5,000.00 Ordinary shares

100

The following company has the address

of 2F, 47 Jongno, Jongno-gu, Seoul,

110-702, Republic of Korea

Standard Chartered Securit

ies Korea Co.,

Ltd

Asset Management

Korea, Republic of

KRW5,000.00 Ordinary shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

461

Standard Chartered

– Annual Report 2022

Financ

ial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of Atrium Build

ing, Maarad Street, 3rd

Floor, P.O.Box: 11-4081 Riad El Solh, Beirut,

Beirut Central Distr

ict, Lebanon

Standard Chartered Metropolitan

Holdings SAL

Investment Holding

Company

Lebanon

$10.00 Ordinary A shares

100

The following companies have the

address of Level 26, Equatorial Plaza,

Jalan Sultan Ismail, 50250 Kuala Lumpur,

Malaysia

Cartaban (Malaya) Nominees Sdn

Berhad

Nominee Services

Malaysia

RM Ordinary shares

100

Cartaban Nominees (Asing) Sdn Bhd

Nominee Services

Malaysia

RM Ordinary shares

100

Cartaban Nominees (Tempatan) Sdn

Bhd

Nominee Services

Malaysia

RM Ordinary shares

100

Golden Maestro Sdn Bhd

Investment Holding

Company

Malaysia

RM Ordinary shares

100

Price Solutions Sdn Bhd

Direct Sales/Collection

Services

Malaysia

RM Ordinary shares

100

SCBMB Trustee Berhad

Trustee Services

Malaysia

RM Ordinary shares

100

Standard Chartered Bank Malaysia

Berhad

Banking & Financ

ial

Services

Malaysia

RM Irredeemable Convertible

Preference shares

100

RM Ordinary shares

100

Standard Chartered Saadiq Berhad

Banking & Financ

ial

Services

Malaysia

RM Ordinary shares

100

The following companies have the

address of TMF Trust Labuan Lim

ited,

Brumby Centre, Lot 42,, Jalan Muhibbah,

87000 Labuan F.T., Malaysia

Marina Morganite Shipp

ing L

ited

Ownership and leasing of

vessels

Malaysia

$ Ordinary shares

100

Marina Moss Shipp

ing L

ited

Ownership and Leasing of

vessels

Malaysia

$ Ordinary shares

100

Marina Tanzanite Shipp

ing L

ited

Ownership and leasing of

vessels

Malaysia

$ Ordinary shares

100

The following company has the address

of Suite 18-1, Level 18, Vertical Corporate

Tower B, Avenue 10, The Vertical, Bangsar

South City , No. 8, Jalan Kerinch

i , 59200

Kuala Lumpur, Wilayah Persekutuan,

Malaysia

Resolution Alliance Sdn Bhd

Investment Holding

Company

Malaysia

RM Ordinary shares

100

Irredeemable Preference

100

The following company has the address

of 12th Floor, Menara Symphony , No. 5,

Jalan Prof. Khoo Kay Kim, Seksyen 13,

46200 Petaling Jaya , Selangor, Malaysia

Solv Sdn. Bhd.

B2B dig

ital platform

offering ﬁnanc

ial serv

ices

Malaysia

RM5.00 Ordinary

100

The following company has the address

of Level 1, Wisma Standard Chartered,

Jalan Teknologi 8, Taman Teknologi

Malaysia, 57000 Bukit Jalil, Kuala

Lumpur, Wilayah Persekutuan, Malaysia

Standard Chartered Global Business

Services Sdn Bhd

Offshore Support Services

Malaysia

RM Ordinary shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

462

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of 10th Floor, Menara Hap Seng, No. 1&3,

Jalan P. Ramlee, 50250 Kuala Lumpur,

Malaysia

Assembly Payments Malaysia Sdn. Bhd.

Other ﬁnancial serv

ice

activ

ies

Malaysia

RM Ordinary shares

100

The following companies have the

address of Trust Company Complex,

Ajeltake Road, Ajeltake Island, Majuro,

MH96960, Marshall Islands

Marina Alysse Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Amandier Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Ambroisee Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Angelica Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Aventurine Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Buxus Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Citr

ine Sh

ipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Dahlia Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Dittany Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Dorado Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Lilac Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Lolite Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Obsid

ian Sh

ipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Protea Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Quartz Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Remora Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Turquoise Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Zircon Shipp

ing L

ited

Ownership, Leasing of

vessels

Marshall Islands

$1.00 Ordinary shares

100

The following companies have the

address of 6/F, Standard Chartered

Tower, 19, Bank Street, Cybercity, Ebene,

72201, Maurit

ius

Standard Chartered Bank (Maurit

ius)

Lim

ited

Banking & Financ

ial

Services

Maurit

ius

$ Ordinary shares

100

Standard Chartered Private Equity

(Maurit

ius) L

ited

Investment Management

Maurit

ius

$1.00 Ordinary shares

100

Standard Chartered Private Equity

(Maurit

ius) II L

ited

Investment Management

Maurit

ius

$1.00 Ordinary shares

100

Standard Chartered Private Equity

(Maurit

ius) lll L

ited

Investment Management

Maurit

ius

$1.00 Ordinary shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

463

Standard Chartered

– Annual Report 2022

Financ

ial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of Mondial Management Services Ltd,

Unit 2L, 2nd Floor Standard Chartered

Tower, 19 Cybercity, Ebene, Maurit

ius

Subcontinental Equit

ies L

ited

Investment Holding

Company

Maurit

ius

$1.00 Ordinary shares

100

The following company has the address

of IQEQ Corporate Services (Maurit

ius)

Ltd, 33, Edith Cavell Street, Port Louis,

11324, Maurit

ius

Actis Treit Holdings (Maurit

ius) L

ited¹

Investment Holding

Company

Maurit

ius

Class A $1.00 Ordinary shares

62.0

The following company has the address

of Standard Chartered Bank Nepal

Lim

ited, Madan Bhandar

i Marg, Ward

No.34, Kathmandu Metropolitan City,

Kathmandu Distr

ict, Bagmat

i Zone,

Kathmandu, Nepal

Standard Chartered Bank Nepal Lim

ited

Banking & Financ

ial

Services

Nepal

NPR100.00 Ordinary shares

70.2

The following company has the address

of Hoogoorddreef 15, 1101 BA,

Amsterdam, Netherlands

Pembroke Holland B.V.

Leasing Business

Netherlands

€450.00 Ordinary shares

100

The following companies have the

address of 1 Basinghall Avenue, London,

EC2V 5DD, United Kingdom

Standard Chartered Holdings (Africa)

B.V.⁵

Holding company

Netherlands

€4.50 Ordinary shares

100

Standard Chartered Holdings (Asia

Pacif

ic) B.V.

Holding company

Netherlands

€4.50 Ordinary shares

100

Standard Chartered Holdings

(International) B.V.

Holding company

Netherlands

€4.50 Ordinary shares

100

Standard Chartered MB Holdings B.V.

Holding company.

Netherlands

€4.50 Ordinary shares

100

The following company has the address

of 4 All good Place, Rototuna North,

Hamilton, New Zealand, 3210

PromisePay Lim

ited

Payment Services Provider

New Zealand

NZD Ordinary shares

100

The following companies have the

address of 142, Ahmadu Bello Way,

Victor

ia Island, Lagos, 101241, N

iger

Standard Chartered Bank Niger

Lim

ited

Banking & Financ

ial

Services

Niger

NGN1.00 B Redeemable

Preference

100

NGN1.00 Irredeemable Non

Cumulative Preference

100

NGN1.00 Ordinary

100

Standard Chartered Capital & Advisory

Niger

ia L

ited

Corporate Finance &

Advisory Services

Niger

NGN1.00 Ordinary shares

100

Standard Chartered Nominees (Niger

ia)

Lim

ited

Custody Services

Niger

NGN1.00 Ordinary shares

100

The following company has the address

of 3/F Main SCB Build

ing, I.I Chundr

igar

Road, Karachi, Sindh, 74000, Pakistan

Price Solution Pakistan (Private) Lim

ited

Banking & Financ

ial

Services

Pakistan

PKR10.00 Ordinary shares

100

The following company has the address

of P.O. Box No. 5556I.I. Chundrigar Road,

Karachi, 74000, Pakistan

Standard Chartered Bank (Pakistan)

Lim

ited

Banking & Financ

ial

Services

Pakistan

PKR10.00 Ordinary shares

98.9

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

464

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of Rondo Ignacego Daszyńskiego 2B,

00-843, Warsaw, Poland

Standard Chartered Global Business

Services spółka z ograniczoną

odpowiedz

ialnośc

ią

Offshore Support Services

Poland

PLN50.00 Ordinary shares

100

The following company has the address

of Al Faisal

iah Ofﬁce Tower Floor No 7

(T07D) , King Fahad Highway, Olaya

Distr

ict, R

iyadh P.O box 295522 , Riyadh,

11351 , Saudi Arabia

Standard Chartered Capital (Saudi

Arabia)

Custody Services

Saudi Arabia

SAR10.00 Ordinary shares

100

The following company has the address

of 9 & 11, Lightfoot Boston Street,

Freetown, Sierra Leone

Standard Chartered Bank Sierra Leone

Lim

ited

Banking & Financ

ial

Services

Sierra Leone

SLL1.00 Ordinary shares

80.7

The following companies have the

address of 9 Rafﬂes Place, #27-00

Republic Plaza, 048619, Singapore

Actis Treit Holdings No.1 (Singapore)

Private Lim

ited

Investment Holding

Company

Singapore

SGD Ordinary

100

Actis Treit Holdings No.2 (Singapore)

Private Lim

ited

Investment Holding

Company

Singapore

SGD Ordinary

100

The following companies have the

address of 8 Marina Boulevard, Marina

Bay Financ

ial Centre Tower 1,, Level 25-01,

018981, Singapore, Singapore

Standard Chartered Private Equity

(Singapore) Pte. Ltd

Investment Holding

Company

Singapore

$ Ordinary shares

100

Standard Chartered Real Estate

Investment Holdings (Singapore) Private

Lim

ited

Investment Holding

Company

Singapore

$ Ordinary shares

100

The following companies have the

address of 8 Marina Boulevard, Level 26,

Marina Bay Financ

ial Centre, Tower 1,

018981, Singapore

Marina Aquata Shipp

ing Pte. Ltd.

Leasing Business

Singapore

$ Ordinary shares

100

Marina Aruana Shipp

ing Pte. Ltd.

Leasing Business

Singapore

SGD & USD Ordinary shares

100

Marina Cobia Shipp

ing Pte. Ltd.

Leasing Business

Singapore

SGD & USD Ordinary shares

100

Marina Fatmarin

i Sh

ipp

ing Pte. Ltd.

Leasing Business

Singapore

$ Ordinary shares

100

Marina Frabandari Shipp

ing Pte. Ltd.

Leasing Business

Singapore

$ Ordinary shares

100

Marina Gerbera Shipp

ing Pte. Ltd.

Leasing Business

Singapore

$ Ordinary shares

100

Marina Opah Shipp

ing Pte. Ltd.

Leasing Business

Singapore

SGD Ordinary shares

100

Marina Partawati Shipp

ing Pte. Ltd.

Leasing Business

Singapore

$ Ordinary shares

100

The following company has the address

of 7 Changi Business Park Crescent,

#03-00 Standard Chartered @ Changi,

486028, Singapore

Rafﬂes Nominees (Pte.) Lim

ited

Nominee Services

Singapore

SGD Ordinary shares

100

The following companies have the

address of 8 Marina Boulevard, #27-01

Marina Bay Financ

ial Centre Tower 1,

018981, Singapore

SCTS Capital Pte. Ltd

Nominee Services

Singapore

SGD Ordinary shares

100

SCTS Management Pte. Ltd.

Nominee Services

Singapore

SGD Ordinary shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

465

Standard Chartered

– Annual Report 2022

Financ

ial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

Standard Chartered Bank (Singapore)

Lim

ited

Banking & Financ

ial

Services

Singapore

SGD Non-cumulative Class C

Tier-1 preference

100

SGD Ordinary-A

100

US$ Non-cumulative Class B

Tier-1 Preference

100

US$ Ordinary-A

100

US$ Ordinary-B

100

US$ Ordinary-C

100

Standard Chartered Trust (Singapore)

Lim

ited

Trustee Services

Singapore

SGD Ordinary shares

100

Standard Chartered Holdings

(Singapore) Private Lim

ited

Investment Holding

Company

Singapore

SGD Ordinary

100

US$ Ordinary

100

Standard Chartered Nominees

(Singapore) Pte Ltd

Nominee Services

Singapore

SGD Ordinary shares

100

The following companies have the

address of 80 Robinson Road, #02-00,

068898, Singapore

Autumn Life Pte. Ltd.

Support Services

Singapore

$ Ordinary shares

100

Cardspal Pte. Ltd.

Support Services

Singapore

$ Ordinary shares

100

Audax Financ

ial Technology Pte. Ltd

Support Services

Singapore

$ Ordinary shares

100

Letsbloom Pte. Ltd.

Others

Singapore

$ Ordinary shares

100

SCV Research and Development Pte. Ltd.

Others

Singapore

$ Ordinary shares

100

Pegasus Dealmaking Pte. Ltd.

Mergers and Acquis

ions

(M&A) marketplace

Singapore

$ Ordinary shares

100

The following companies have the

address of Tricor WP Corporate Services

Pte Ltd, 80 Robinson Road #02-00,

068898, Singapore

Power2SME Pte. Ltd.

Investment Holding Entity

Singapore

$ Ordinary shares

90.6

SCV Master Holding Company Pte. Ltd.

Investment Holding Entity

Singapore

$ Ordinary shares

100

Solv-India Pte. Ltd.

Investment Holding Entity

Singapore

$ Ordinary shares

100

The following company has the address

of 77 Robinson Road, #25-00 Robinson

77, 068896, Singapore

Trust Bank Singapore Lim

ited

Banking & Financ

ial

Services

Singapore

SGD Ordinary shares

60.0

The following company has the address

of 1 Robinson Road, #17-00, AIA Tower,

048542, Singapore

CurrencyFair (Singapore) Pte.Ltd

Foreign Currency

conversion services.

Singapore

SGD Ordinary shares

100

The following companies have the

address of 38 Beach Road, #29-11 South

Beach Tower, 189767, Singapore

Assembly Payments SGP Pte. Ltd.

Transaction/Payment

Processing Services

Singapore

SGD Ordinary shares

100

Assembly Payments Pte. Ltd.

Investment holding

company

Singapore

$ Ordinary shares

100

$ Preference shares

100

The following company has the address

of Abogado Pte Ltd, No. 8 Marina

Boulevard, #05-02 MBFC Tower 1, 018981,

Singapore

Standard Chartered IL&FS Management

(Singapore) Pte. Lim

ited

Investment Management

Singapore

$ Ordinary

50.0

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

466

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following companies have the

address of 2nd Floor, 115 West Street,

Sandton, Johannesburg, 2196, South

Africa

CMB Nominees (RF) PTY Lim

ited

Nominee Services

South Africa

ZAR1.00 Ordinary shares

100

Standard Chartered Nominees South

Africa Proprietary Lim

ited (RF)

Nominee Services

South Africa

ZAR Ordinary shares

100

The following company has the address

of 6 Fort Street, PO 785848, , Birnam,

Sandton, 2196 2146, South Africa

Promisepay (PTY) Ltd

Payment Services Provider

South Africa

ZAR1.00 Ordinary

100

The following company has the address

of 1F, No.177 & 3F-6F, 17F-19F, No.179,

Liaon

ing Street, Zhongshan D

ist., Taipe

104, Taiwan

Standard Chartered Bank (Taiwan)

Lim

ited

Banking & Financ

ial

Services

Taiwan

TWD10.00 Ordinary shares

100

The following companies have the

address of 1 Floor, International House,

Shaaban Robert Street/Garden Avenue,

PO Box 9011, Dar Es Salaam, Tanzania,

United Republic of

Standard Chartered Bank Tanzania

Lim

ited

Banking & Financ

ial

Services

Tanzania

TZS1,000.00 Ordinary shares

100

TZS1,000.00 Preference

100

Standard Chartered Tanzania Nominees

Lim

ited

Nominee Services

Tanzania

TZS1,000.00 Ordinary shares

100

The following company has the address

of No. 140, 11th, 12th and 14th Floor,

Wireless Road, Lumpin

i, Patumwan,

Bangkok, 10330, Thailand

Standard Chartered Bank (Thai) Public

Company Lim

ited

Banking & Financ

ial

Services

Thailand

THB10.00 Ordinary shares

99.9

The following company has the address

of Buyukdere Cad. Yapi Kredi Plaza C

Blok, Kat 15, Levent, Istanbul, 34330,

Türkiye

Standard Chartered Yatir

im Bankas

i Turk

Anonim Sirket

Banking & Financ

ial

Services

Türkiye

TRL0.10 Ordinary shares

100

The following company has the address

of Standard Chartered Bank Bldg, 5

Speke Road, PO Box 7111, Kampala,

Uganda

Standard Chartered Bank Uganda

Lim

ited

Banking & Financ

ial

Services

Uganda

UGS1,000.00 Ordinary shares

100

The following company has the address

of EX-26, Ground Floor, Bldg 16-Co Work,

Dubai Internet City, Dubai, United Arab

Emirates

Appro Onboarding Solutions FZ-LLC

IT solutions provider and

support service provider.

United Arab Emirates AED1,000.00 Ordinary shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

467

Standard Chartered

– Annual Report 2022

Financ

ial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of Suites 507, 508, 509, 15th Floor, Al

Sarab Tower, Adgm Square, Al Maryah

Island, Abu Dhabi

Financ

ial Inclus

ion Technologies Ltd

Dig

ital wallet and

technology payments

platform

United Arab Emirates US$1.00 Ordinary

100

The following company has the address

of 505 Howard St. #201, San Francisco,

CA 94105, United States

SC Studios, LLC

Offshore Support Services

United States

Membership Interest

100

The following company has the address

of Standard Chartered Bank, 37F, 1095

Avenue of the Americas, New York 10036,

United States

Standard Chartered Bank International

(Americas) Lim

ited

Banking & Financ

ial

Services

United States

$1,000.00 Ordinary shares

100

The following companies have the

address of Corporation Trust Centre,

1209 Orange Street, Wilm

ington DE

19801, United States

Standard Chartered Holdings Inc.

Investment Holding

Company

United States

$100.00 Common shares

100

Standard Chartered Securit

ies (North

America) LLC

Banking & Financ

ial

Services

United States

Membership Interest

100

The following company has the address

of 50 Fremont Street, San Francisco CA

94105, United States

Standard Chartered Overseas

Investment, Inc.

Investment Holding

Company

United States

$10.00 Ordinary shares

100

The following companies have the

address of C/O Corporation Service

Company, 251 Little Falls Drive,

Wilm

ington DE 19808, Un

ited States

CurrencyFair (USA) Inc

Dormant

United States

$1.00 Uncertif

icated Shares

100

Standard Chartered Trade Services

Corporation

Trade Services

United States

$0.01 Common shares

100

The following company has the address

of 25 Taylor St, San Francisco, CA,

94102-3916

Assembly Escrow Inc

Payment Services Provider

United States

$0.0001 Ordinary

100

The following company has the address

of 555 Washington Av, St Louis, MO,

United States of America, 63101

Assembly Payments, Inc

Payment services provider

United States

$0.0001 Ordinary

100

The following company has the address

of Level 3, #CP1.L01 and #CP2.L01,

Capital Place, 29 Lieu Gia

i Street, Ngoc

Khanh Ward, Ba Dinh Distr

ict, Ha No

10000, Vietnam

Standard Chartered Bank (Vietnam)

Lim

ited

Banking & Financ

ial

Services

Vietnam

VND Charter Capital shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

468

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following companies have the

address of Vistra Corporate Services

Centre, Wickhams Cay II, Road Town,

Tortola, VG1110, Virg

in Islands, Br

ish

Sky Favour Investments Lim

ited

Investment Holding

Company

Virg

in Islands, Br

ish

$1.00 Ordinary shares

100

Sky Harmony Holdings Lim

ited

Investment Holding

Company

Virg

in Islands, Br

ish

$1.00 Ordinary shares

100

The following companies have the

address of Stand No. 4642, Corner of

Mwaimwena Road and Addis Ababa

Dri, Lusaka, Zambia, 10101, Zambia

Standard Chartered Bank Zambia Plc

Banking & Financ

ial

Services

Zambia

ZMW0.25 Ordinary shares

90.0

Standard Chartered Zambia Securit

ies

Services Nominees Lim

ited

Nominee Services

Zambia

ZMW1.00 Ordinary shares

100

The following companies have the

address of Africa Unity Square Build

ing,

68 Nelson Mandela Avenue, Harare,

Zimbabwe

Africa Enterprise Network Trust

Investment Holding

Company

Zimbabwe

Interest in Trust

100

Standard Chartered Bank Zimbabwe

Lim

ited

Banking & Financ

ial

Services

Zimbabwe

$1.00 Ordinary shares

100

Standard Chartered Nominees

Zimbabwe (Private) Lim

ited

Nominee Services

Zimbabwe

$2.00 Ordinary shares

100

The Group has determined that these undertakings are excluded from being consolidated into the Groups accounts, and do not meet the deﬁn

ion of a

Subsid

iary under IFRS. See notes 31 and 32 for the consol

idat

ion pol

icy and disclosure of the undertaking.

No share capital by virtue of being a trust

Lim

ited l

iab

ity company

The Group has determined the princ

ipal place of operat

ion to be Ireland

The Group has determined the princ

ipal place of operat

ion to be United Kingdom

The Group has determined the princ

ipal place of operat

ion to be Hong Kong

Company is exempt from the requirements of the companies Act relating to the audit of ind

idual accounts by virtue of

S479A

8 Company numbers of the subsid

iar

ies taking an audit exemption are SC Transport Leasing 1 LTD

06787116, SC Transport Leasing 2 Lim

ited 06787090 and

Standard Chartered Leasing (UK) Lim

ited 05513184

9 Directly held related undertaking

Joint ventures

Name and registered address

Activ

ity

Place of Incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address of

Tricor WP Corporate Services Pte Ltd, 80

Robinson Road #02-00, 068898,

Singapore

Olea Global Pte. Ltd.

Provis

ion of trade ﬁnance

products and services

Singapore

$ Ordinary shares

50.0

$ Preference shares

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

469

Standard Chartered

– Annual Report 2022

Financ

ial statements

40. Related undertakings of the Group

continued

Associates

Name and registered address

Activ

ity

Place of Incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of 41 Luke Street, London, EC2A 4DP ,

United Kingdom

Fintech for International Development

Ltd

Financ

ial

intermed

iat

ion

United Kingdom

$0.0001 Ordinary-A

44.4

The following company has the address

of Bohai Bank Build

ing, No.218 Ha

i He

Dong Lu, Hedong Distr

ict, T

ianjin, China,

300012, China

China Bohai Bank Co., Ltd.

General commercial

banking businesses

China

CNY1.00 Ordinary shares

16.2

The following company has the address

of 17/F, 100, Gongpyeong-dong,

Jongno-gu, Seoul, Korea, Republic of

Ascenta IV

Investment making

Korea, Republic of

KRW1.00 Partnership Interest

39.1

The following company has the address

of 1 Rafﬂes Quay, #23-01, One Rafﬂes

Quay, 048583, Singapore

Clifford Capital Holdings Pte. Ltd.

Investment Holding

Company

Singapore

$1.00 Ordinary shares

9.9

The following company has the address

of 10 Marina Boulevard #08-08, Marina

Bay, Financ

ial Centre, 018983, S

ingapore

Verif

ied Impact Exchange Hold

ings Pte.

Ltd

Exchange offering liqu

ity

of trade

Singapore

SGD Ordinary shares

15.0

$ Redeemable Convertible

Preference shares

28.5

The following company has the address

of Victor

ia House, State House Avenue,

Victor

ia, MAHE, Seychelles

Seychelles International Mercantile

Banking Corporation Lim

ited.

Commercial Bank

Seychelles

SCR1,000.00 Ordinary shares

22.0

The following company has the address

of Avenue de Tivol

i 2, 1007, Lausanne,

Switzerland

Metaco SA

Integrated infrastructure

solutions

Switzerland

CHF 0.01 Preference A Shares

29.5

470

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

40. Related undertakings of the Group

continued

Sign

iﬁcant

investment holdings and other related undertakings

Name and registered address

Activ

ity

Place of Incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of 1 Bartholomew Lane, London, EC2N

2AX, United Kingdom

Corrasi Covered Bonds (LM) Lim

ited

Liqu

idat

ion member

(Bond holders)

United Kingdom

£1.00 Ordinary

20.0

The following company has the address

of Intertrust Corporate Services

(Cayman) Lim

ited, 190 Elg

in Avenue,

George Town, Grand Cayman , KY1-

9005, Cayman Islands

ATSC Cayman Holdco Lim

ited

Investment holding

Cayman Islands

$0.01 Ordinary-A shares

5.2

$0.01 Ordinary-B shares

100

The following company has the address

of 3, Floor 1, No.1, Shiner Wuxingca

iyuan,

West Er Huan Rd, , Xi Shan Distr

ict,

Kunming, Yunnan Province, PRC , China

Yunnan Golden Shiner Property

Development Co., Ltd.

Real Estate Developers

China

CNY1.00 Ordinary shares

37.5

The following companies have the

address of Unit 605-08, 6/F Wing On

Centre, 111 Connaught Road, Central,

Sheung Wan, Hong Kong

Actis Temple Stay Holdings (HK) Lim

ited

Investment holding

Hong Kong

$ Class A Ordinary shares

39.6

$ Class B Ordinary shares

39.6

Actis Rivendell Holdings (HK) Lim

ited

Investment holding

Hong Kong

$ Class A Ordinary shares

39.6

$ Class B Ordinary shares

39.6

The following company has the address

of 1221 A, Devika Tower, 12th Floor, , 6

Nehru Place, New Delhi 110019, New

Delhi, 110019, India

Mikado Realtors Private Lim

ited

Other business activ

ies

India

INR10.00 Ordinary shares

26.0

The following company has the address

of 4thFloor, 274, Chital

ia House, Dr.

Cawasji Hormusji Road, Dhob

i Talao,

Mumbai City, Maharashtra, India 400

002, Mumbai, 400 002, India

Industrial Minerals and Chemical Co. Pvt.

Ltd

Minerals and Chemical

India

INR100.00 Ordinary shares

26.0

The following company has the address

of Deloitte Anj

in Korea, 5F., One IFC, 23,

Yoido-dong, Youngdeungpo-gu, Seoul,

Korea, Republic of

Ascenta III

Investment making

Korea

KRW Class B Equity Interest

31.0

The following company has the address

of 3 Jalan Pisang, c/o Watiga Trust Ltd,

199070 Singapore

SCIAIGF Liqu

idat

ing Trust

Investment Holding

Company

Singapore

Interest in trust

43.9

The following company has the address

of 49, Sungei Kadut Avenue, #03-01

S729673, Singapore

Omni Centre Pte. Ltd.

Real Estate Owners &

Developers

Singapore

SGD Redeemable Convertible

Preference shares

99.9

The following company has the address

of 251 Little Falls Drive, Wilm

ington, New

Castle DE 19808, United States

Paxata, Inc.

Data Analytics

United States

US$0.0001 Series C2 Preferred

Stock

40.7

US$0.0001 Series C3 Preferred

Stock

8.91

471

Standard Chartered

– Annual Report 2022

Financ

ial statements

40. Related undertakings of the Group

continued

In liqu

idat

ion

Subsid

iary Undertak

ings

Name and registered address

Activ

ity

Place of Incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of “C/O Teneo Restructuring Lim

ited 156

Great Charles Street Queensway

Birm

ingham West M

idlands B3 3HN”

Standard Chartered Masterbrand

Licens

ing L

ited

To manage intellectual

property for Group

United Kingdom

$1.00 Ordinary Shares

100

The following companies have the

address of Bucktrout House, Glategny

Esplanade, St Peter Port, GY1 3HQ,

Guernsey

Birdsong Lim

ited

Fiduc

iary Serv

ices

Guernsey

£1.00 Ordinary shares

100

Nominees One Lim

ited

Fiduc

iary Serv

ices

Guernsey

£1.00 Ordinary shares

100

Nominees Two Lim

ited

Fiduc

iary Serv

ices

Guernsey

£1.00 Ordinary shares

100

Songbird Lim

ited

Fiduc

iary Serv

ices

Guernsey

£1.00 Ordinary shares

100

Standard Chartered Secretaries

(Guernsey) Lim

ited

Fiduc

iary Serv

ices

Guernsey

£1.00 Ordinary shares

100

Standard Chartered Trust (Guernsey)

Lim

ited

Fiduc

iary Serv

ices

Guernsey

£1.00 Ordinary shares

100

The following company has the address

of 8/Floor, Gloucester Tower , The

Landmark, 15 Queen’s Road Central,

Hong Kong

Leopard Hong Kong Lim

ited

Corporate Finance &

Advisory Services

Hong Kong

$ Ordinary shares

100

The following company has the address

of 30 Rue Schrobilgen, 2526, Luxembourg

Standard Chartered Financ

ial Serv

ices

(Luxembourg) S.A.

Banking services

Luxembourg

€25.00 Ordinary shares

100

The following company has the address

of Jiron Huascar 2055, Jesus Maria, Lima

15072, Peru

Banco Standard Chartered en

Liqu

idac

ion

Financ

ial counsell

ing

services

Peru

$75.133 Ordinary shares

100

The following company has the address

of Luis Alberto de Herrera 1248, Torre II,

Piso 11, Esc. 1111, Uruguay

Standard Chartered Uruguay

Representacion S.A.

Leasing Business

Uruguay

UYU1.00 Ordinary shares

100

The following company has the address

of C/O Teneo Financ

ial Adv

isory Lim

ited,

156 Great Charles Street, Queensway,

Birm

ingham, West M

idlands, B3 3HN,

United Kingdom

Standard Chartered Leasing (UK) 2

Lim

ited

Investment Holding Entity

United Kingdom

$1.00 Ordinary shares

100

The following company has the address

of C/o WALKERS CORPORATE LIMITED,

190 Elgin Avenue George Town Grand

Cayman KY1-9008 , Cayman Islands

Sirat Holdings Lim

ited

Leasing Business

Cayman Islands

$0.01 Ordinary shares

100

The following company has the address

of TMF Trust Labuan Lim

ited, Brumby

Centre, Lot 42,, Jalan Muhibbah, 87000

Labuan F.T., Malaysia

Pembroke Leasing (Labuan) 3 Berhad

Investment Holding

Company

Malaysia

$ Ordinary shares

100

472

Standard Chartered

– Annual Report 2022

Financ

ial statements

Notes to the ﬁnancial statements

Name and registered address

Activ

ity

Place of Incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of c/o Ocorian Corporate Services

(Maurit

ius) Ltd, 6th Floor, Tower A, 1

Cybercity, Ebene, 72201, Maurit

ius

Standard Chartered Financ

ial Hold

ings

Investment Holding

Company

Maurit

ius

$1.00 Ordinary shares

100

The following company has the address

of 142, Ahmadu Bello Way, Victor

Island, Lagos, 101241, Niger

Cherroots Niger

ia L

ited

Investment Holding

Company

Niger

NGN1.00 Ordinary Shares

100

Liqu

idated/d

issolved/sold

Subsid

iary Undertak

ings

Name and registered address

Activ

ity

Place of Incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following companies have the

address of Unit 605-08, 6/F Wing On

Centre, 111 Connaught Road, Central,

Sheung Wan, Hong Kong

Actis Jack Holdings (HK) Lim

ited

Investment holding

Hong Kong

$ Class A Ordinary shares

39.6

$ Class B Ordinary shares

39.6

Actis Young City Holdings (HK) Lim

ited

Investment holding

Hong Kong

$ Class A Ordinary shares

39.6

$ Class B Ordinary shares

39.6

The following company has the address

of 2 More London Rivers

ide, London SE1

2JT, United Kingdom

Bricks (M) LP1

Investment Holding

Company

United Kingdom

Lim

ited Partnersh

ip interest

100

The following company has the address

of 26F, Fortune Financ

ial Centre, #5,

Dong San Huan Zhong Lu, Chaoyang

Distr

ict, Be

ijing, P. R. China.

Standard Chartered Corporate Advisory

Co. Ltd

Corporate Finance &

Advisory Services

China

$1.00 Ordinary shares

100

The following company has the address

of 13/F Standard Chartered Bank

Build

ing, 4-4A Des Voeux Road Central,

Hong Kong

Standard Chartered Private Equity

Managers (Hong Kong) Lim

ited

Corporate Finance &

Advisory Services

Hong Kong

HKD Ordinary shares

100

The following company has the address

of Vistra Corporate Services Centre,

Ground Floor, NPF Build

ing, Beach Road,

Apia, Samoa

Standard Chartered Nominees (Western

Samoa) Lim

ited

Nominee Services

Samoa

$1.00 Ordinary shares

100

The following company has the address

of “C/O Teneo Restructuring Lim

ited 156

Great Charles Street Queensway

Birm

ingham West M

idlands B3 3HN”

Compass Estates Lim

ited

Investment holding

United Kingdom

£1.00 Ordinary shares

100

The following company has the address

of 32 Molesworth Street, Dublin 2,

D02Y512, Ireland

Inishlynch Leasing Lim

ited

Leasing Business

Ireland

€1.00 Ordinary shares

100

40. Related undertakings of the Group

continued

In liqu

idat

ion

continued

Subsid

iary Undertak

ings

continued

473

Standard Chartered

– Annual Report 2022

Financ

ial statements

Name and registered address

Activ

ity

Place of Incorporation

Descript

ion of shares

Proportion

of shares

held

(%)

The following company has the address

of Menara Standard Chartered, 3rd

Floor, Jl. Prof.Dr. Satrio no. 164, Setiabud

Jarkarta Selatan, Indonesia

PT Solusi Cakra Indonesia (dalam

liku

idas

Banking & Financ

ial

Services

Indonesia

IDR23,809,600.00 Ordinary

99.0

The following company has the address

of No. 157 – 157 A, Jakarta Barat, 11130,

Indonesia.

PT. Price Solutions Indonesia (dalam

liku

idas

Direct Sales/Collection

Services

Indonesia

$100.00 Ordinary shares

100

The following company has the address

of Standard Chartered@Chiromo,

Number 48, Westlands Road, P. O. Box

30003 - 00100, Nairob

i, Kenya

Standard Chartered Management

Services Lim

ited

Investment Management

Kenya

KES20.00 Ordinary shares

100

The following company has the address

of M6-2701, West 27Fl, Suha-dong, 26,

Eulji-ro 5-g

il, Jung-gu, Seoul, Korea,

Republic of

Resolution Alliance Korea Ltd

Investment Management

Korea, Republic of

KRW5,000.00 Ordinary shares

100

The following company has the address

of 8 Marina Boulevard, Level 27, Marina

Bay Financ

ial Centre, Tower 1, 018981,

Singapore

Standard Chartered (2000) Lim

ited

Others

Singapore

SGD1.00 Ordinary shares

100

The following company has the address

of C/o IQ EQ Corporate Services

(Maurit

ius) Ltd, 33 Ed

ith Cavell Street,

Port Louis, 11324, Maurit

ius

FAI Lim

ited

Investment Advisory

services

Maurit

ius

$1.00 Ordinary shares

76.5

The following company has the address

of Standard Chartered Bank France, 32

Rue de Monceau,75008, Paris, France

Pembroke Lease France SAS

Leasing Business

France

€1.00 Ordinary shares

100

The following company has the address

of Level 26, Equatorial Plaza, Jalan Sultan

Ismail, 50250 Kuala Lumpur, Malaysia

Popular Ambience Sdn Bhd

To undertake investments

in non-performing loans

Malaysia

RM Ordinary shares

100

The following company has the address

of 8/Floor, Gloucester Tower , The

Landmark, 15 Queen’s Road Central,

Hong Kong

Leopard Hong Kong Lim

ited

Holding Company

Hong Kong

$ Ordinary shares

100

The following company has the address

of Lot 6.05, Level 6, KPMG Tower, 8 First

Avenue, Bandar Utama, 47800 Petaling

Jaya, Selangor, Malaysia

House Network SDN BHD

Admin

istrat

ion of shared

ATM network

Malaysia

RM1.00 Ordinary shares

25.0

40. Related undertakings of the Group

continued

Liqu

idated/d

issolved/sold

continued

Subsid

iary Undertak

ings

continued



Creating a cultural

exchange for good



Supplementary

informat

ion

476

Supplementary ﬁnancial

informat

ion

484

Supplementary people informat

ion

488

Supplementary sustainab

ity

informat

ion

493

2022 Sustainab

ity Aspirat

ions

496

Shareholder informat

ion

500

Main awards and accolades

502

Glossary



Celebrating

our Community

Champions



This year, we are celebrating the

insp

ing employee volunteering (EV)

work undertaken by our colleagues.

Employee volunteering is a core

component of our community

engagement and runs through our

DNA. It enables our employees to do

the right thing and strengthens their

relationsh

ips w

ith our communit

ies

as well as each other. Each employee

is entitled to up to four days of paid

volunteering leave a year, which can

be used for bank-wide in

iat

ives or

supporting charitable causes of

their choice.

With thousands of EV hours

undertaken globally, here are three

champions who are truly here for good.

474

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Meet Arie Vid

i N Nurchol

is, Singapore

Arie mobil

ised h

is Client Acquis

ions and Client

Care Centre team of 400 people to volunteer

together.

With over 90 per cent of his colleagues being

Muslim, they came together to support their

local orphanage during Ramadan. They provided

daily breakfasts and rolled up their sleeves to

help with the build

ing and ma

intenance work

at the orphanage.

As part of their cultural exchange, at the end of

the year, they also supported an annual Christmas

gathering at a local catholic orphanage, provid

ing

food and gifts to the children.

This work not only brought their team together but

uplifted the children they vis

ited.

Meet Chantele Pereira, United States

Chantele worked on a number of in

iat

ives

in 2022

aimed at nurturing the next generation of leaders.

She led our Women in Tech programme in the

Americas, specif

ically our #Bossg

irls in

iat

ive,

which is an entrepreneurship bootcamp for high

schoolers in the United States. As part of her work,

she managed volunteer recruitment and taught

ﬁnancial educat

ion as part of the curriculum.

Chantele also mentored students in the Leadership

Enterprise for a Diverse America programme.

The programme aims to divers

ify the talent

pipel

ine by help

ing high school students from

under-resourced communit

ies ga

in entry to the

nation’s most selective colleges.

Meet Antony Ngure, Kenya

When our team in Kenya entered a partnership with

the Nairob

i Arboretum Conservancy Commun

ity

Forest Associat

ion and comm

itted to creating a

tree nursery of 1 mill

ion seedl

ings by 2024, Antony

was determined to help. Antony mobil

ised 367 team

members to help plant seedlings. This translated

to 32 per cent staff partic

ipat

ion in EV, in Kenya. He

also led the distr

ibut

ion of 23,000 seedlings to the

partic

ipants of our second susta

inable marathon in

2022 – up from 5,000 seedlings distr

ibuted

in 2021.

His commitment to the environment earned him the

nickname – Antony wa mit

i (Antony of trees).



Mentoring the

next generation

of leaders





Antony of trees

plants seedlings

in Kenya



475

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

476

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Supplementary ﬁnancial

informat

ion

Five-year summary

2022

$mill

ion

2021

$mill

ion

2020

$mill

ion

2019

$mill

ion

2018

$mill

ion

Operating proﬁt before impa

irment losses and taxat

ion

5,405

3,777

4,374

4,484

3,142

Impairment losses on loans and advances and other

credit risk provis

ions

(836)

(254)

(2,325)

(908)

(653)

Other impa

irment

(425)

(372)

(98)

(136)

(182)

Proﬁt before taxation

4,286

3,347

1,613

3,713

2,548

Proﬁt/(loss) attributable to shareholders

2,948

2,315

724

2,303

1,054

Loans and advances to banks

39,519

44,383

44,347

53,549

61,414

Loans and advances to customers

310,647

298,468

281,699

268,523

256,557

Total assets

819,922

827,818

789,050

720,398

688,762

Deposits by banks

28,789

30,041

30,255

28,562

29,715

Customer accounts

461,677

474,570

439,339

405,357

391,013

Shareholders’ equity

43,162

46,011

45,886

44,835

45,118

Total capital resources

63,731

69,282

67,383

66,868

65,353

Information per ordinary share

Basic earnings/(loss) per share

85.9c

61.3c

10.4c

57.0c

18.7c

Underlying earnings per share

101.1c

85.8c³

36.1c

75.7c

61.4c

Div

idends per share

18c

12.0c

–

22.0c

17.0c

Net asset value per share

1,453.3c

1,456.4c

1,409.3c

1,358.3c

1,319.3c

Net tangible asset value per share

1,249.0c

1,277.0c

1,249.0c

1,192.5c

1,167.7c

Return on assets

0.4%

0.3%

0.1%

0.3%

Ratios

Statutory return on ordinary shareholders’ equity

6.0%

4.2%

0.8%

4.2%

1.4%

Statutory return on ordinary shareholders’

tangible equity

6.8%

4.8%

0.9%

4.8%

1.6%

Underlying return on ordinary shareholders’ equity

6.9%

5.9%³

2.6%

5.6%

4.6%

Underlying return on ordinary shareholders’

tangible equity

8.0%

6.8%³

3.0%

6.4%

5.1%

Statutory cost to income ratio (excluding UK bank levy)

66.3%

73.6%

68.1%

68.7%

76.6%

Statutory cost to income ratio (includ

ing UK bank levy)

66.9%

74.3%

70.4%

70.9%

78.8%

Underlying cost to income ratio (excluding UK bank levy)

65.5%

69.8%

66.4%

65.9%

67.7%

Underlying cost to income ratio (includ

ing UK bank levy)

66.2%

70.5%

68.7%

68.2%

69.9%

Capital ratios:

CET1

14.0%

14.1%

14.4%

13.8%

14.2%

Total capital

21.7%

21.3%

21.2%

21.6%

Excludes amounts held at fair value through proﬁt or loss

Shareholders’ funds, non-controlling interests and subordinated loan capital

3 Other Impairment includes $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021 comparative has

been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt which has resulted in the restatement of

Underlying basic earnings per ordinary share (cents), underlying return on equity and underlying return on tangible equity

Div

idend pa

id during the year per share

Represents proﬁt attributable to shareholders div

ided by the total assets of the Group

Unaudited

Supplementary ﬁnancial

informat

ion

477

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Analysis of underlying performance by key market

The following tables provide informat

ion for key markets

in which the Group operates. The numbers are prepared on a

management view. Refer to Note 2 for details.

2022

Hong

Kong

$mill

ion

Korea

$mill

ion

China

$mill

ion

Taiwan

$mill

ion

Singapore

$mill

ion

India

$mill

ion

Indonesia

$mill

ion

UAE

$mill

ion

$mill

ion

$mill

ion

Operating income

3,715

1,143

1,155

475

1,915

1,227

214

629

1,023

1,029

Operating expenses

(2,022)

(731)

(841)

(335)

(1,081)

(763)

(183)

(368)

(742)

(602)

Operating proﬁt before

impa

irment losses and taxat

ion

1,693

412

314

140

834

464

261

281

427

Credit impa

irment

(579)

(55)

(200)

(15)

(31)

Other impa

irment³

(38)

(1)

(3)

(1)

(2)

(1)

–

Proﬁt from associates and

joint ventures

–

179

–

Underlying proﬁt

before taxation

1,076

356

290

124

916

432

342

351

440

Total assets employed

171,086

68,903

39,508

21,919

97,914

30,412

5,237

19,624

187,832

67,019

Of which: loans and advances

to customers

85,359

49,264

15,652

11,283

59,872

15,025

2,403

7,913

39,356

19,951

Total liab

ies employed

165,499

58,992

33,124

20,216

104,320

23,210

4,257

16,256

140,160

64,825

Of which: customer accounts

138,713

43,620

24,347

18,509

79,409

15,199

2,924

12,710

104,482

28,424

2021

Hong

Kong

$mill

ion

Korea

$mill

ion

China

$mill

ion

Taiwan

$mill

ion

Singapore

$mill

ion

India

$mill

ion

Indonesia

$mill

ion

UAE

$mill

ion

$mill

ion

$mill

ion

Operating income

3,440

1,102

1,087

493

1,608

1,282

213

546

895

818

Operating expenses

(2,008)

(772)

(765)

(362)

(1,054)

(744)

(180)

(362)

(721)

(533)

Operating proﬁt before

impa

irment losses and taxat

ion

1,432

330

322

131

554

538

184

174

285

Credit impa

irment

(251)

(14)

(49)

(4)

(23)

(3)

Other impa

irment³

–

(1)

–

Proﬁt from associates and

joint ventures

–

175

–

Underlying proﬁt

before taxation

1,181

318

448

127

641

516

242

328

312

Total assets employed

177,460

67,311

37,908

23,349

94,881

28,416

4,837

19,224

193,807

68,148

Of which: loans and advances

to customers

89,063

45,323

18,014

12,363

56,454

14,991

2,257

8,937

52,878

19,375

Total liab

ies employed

166,727

58,406

35,637

21,790

93,884

20,509

3,769

13,922

149,064

70,648

Of which: customer accounts

141,256

47,867

27,618

20,281

75,154

14,730

2,622

11,466

105,490

37,407

Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

Indonesia performance has been presented includ

ing Nexus for current year and pr

ior year

Other Impairment includes $308 mill

ion

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai). The 2021 comparative

has been restated for consistency to reclassify the $300 mill

ion

impa

irment from Other

impa

irment w

ith

in Underly

ing proﬁt which has resulted in the restatement

of Underlying basic earnings per ordinary share (cents)

478

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Supplementary ﬁnancial

informat

ion

Analysis of operating income by product and segment

The following tables provide a breakdown of the Group’s underlying operating income by product and client segment.

2022

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Transaction Banking

3,801

124

–

3,925

Trade & Working capital

1,315

–

1,371

Cash Management

2,486

–

2,554

Financ

ial Markets

5,728

–

5,728

Macro Trading

2,962

–

2,962

Credit Markets

1,696

–

1,696

Credit Trading

506

–

506

Financ

ing Solut

ions & Issuance

1,190

–

1,190

Structured Finance

408

–

408

Financ

ing & Secur

ies Serv

ices

620

–

620

DVA

–

Lending & Portfolio Management

525

–

562

Wealth Management

1,801

–

1,802

Retail Products

4,054

–

4,068

CCPL and other unsecured lending

–

1,194

–

1,216

Deposits

2,052

(9)

–

2,044

Mortgage & Auto

–

635

–

635

Other Retail Products

–

173

–

173

Treasury

–

343

348

Other

(11)

–

(178)

Total underlying operating income

10,045

6,016

165

16,255

2021 (Restated)¹

Corporate,

Commercial &

Institut

ional

Banking

$mill

ion

Consumer,

Private &

Business

Banking

$mill

ion

Ventures

$mill

ion

Central &

other items

(segment)

$mill

ion

Total

$mill

ion

Transaction Banking

2,793

–

2,886

Trade & Working capital

1,390

–

1,447

Cash Management

1,403

–

1,439

Financ

ial Markets

4,899

–

4,899

Macro Trading

2,216

–

2,216

Credit Markets

1,790

–

1,790

Credit Trading

437

–

437

Financ

ing Solut

ions & Issuance

1,353

–

1,353

Structured Finance

491

–

491

Financ

ing & Secur

ies Serv

ices

387

–

387

DVA

–

Lending & Portfolio Management

725

–

759

Wealth Management

2,224

–

2,225

Retail Products

3,360

(3)

–

3,358

CCPL and other unsecured lending

–

1,271

–

1,272

Deposits

863

(4)

–

860

Mortgage & Auto

–

1,036

–

1,036

Other Retail Products

–

190

–

190

Treasury

–

698

Other

(12)

(128)

(112)

Total underlying operating income

8,407

5,735

570

14,713

Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment.

In 2022 prior periods have been restated

Following a reorganisat

ion of certa

in clients, there has been a reclassif

icat

ion of balances across products.

479

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Insured and uninsured deposits

SCB operates and provides services to customers across many countries and insured deposit is determined on the basis of lim

its

enacted with

in local regulat

ions

2022

2021

Bank deposits

$mill

ion

Customer

accounts

$mill

ion

Bank deposits

$mill

ion

Customer

accounts

$mill

ion

Insured deposits

60,008

62,095

Current accounts

16,373

19,182

Savings deposits

–

26,973

–

30,866

Time deposits

16,599

11,825

Other deposits

–

222

Uninsured deposits

36,795

460,221

38,357

480,360

Current accounts

22,425

144,931

25,599

160,519

Savings deposits

–

90,937

–

116,466

Time deposits

6,870

176,090

5,223

142,756

Other deposits

7,500

48,263

7,535

60,619

Total

36,823

520,229

38,447

542,455

UK and non-UK deposits

SCB operates and provides services to customers across many countries and insured deposit is determined on the basis of lim

its

enacted with

in local regulat

ions.

2022

2021

Bank deposits

$mill

ion

Customer

accounts

$mill

ion

Bank deposits

$mill

ion

Customer

accounts

$mill

ion

UK deposits

4,163

38,557

3,078

31,686

Current accounts

903

8,955

1,711

11,210

Savings deposits

–

420

–

306

Time deposits

1,004

6,760

112

7,666

Other deposits

2,256

22,422

1,255

12,504

Non-UK deposits

32,660

481,672

35,369

510,769

Current accounts

21,530

152,349

23,898

168,491

Savings deposits

–

117,490

–

147,026

Time deposits

5,886

185,929

5,191

146,915

Other deposits

5,244

25,904

6,280

48,337

Total

36,823

520,229

38,447

542,455

480

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Supplementary ﬁnancial

informat

ion

Contractual maturity of Loans, Investment securit

ies and Depos

its

2022

Loans and

advances

to banks

$mill

ion

Loans and

advances

to customers

$mill

ion

Investment

securit

ies

– Treasury

and other

elig

ible B

ills

$mill

ion

Investment

securit

ies

– Debt

securit

ies

$mill

ion

Investment

securit

ies

– Equity

$mill

ion

Bank

deposits

$mill

ion

Customer

accounts

$mill

ion

One year or less

60,132

208,691

42,269

47,193

–

35,240

508,125

Between one and ﬁve years

3,630

52,563

482

63,523

–

1,576

10,281

Between ﬁve and ten years

411

18,067

–

20,078

–

694

Between ten years and ﬁfteen years

13,305

–

12,921

–

598

More than ﬁfteen years and undated

184

65,104

–

15,720

4,037

–

531

Total

64,449

357,730

42,751

159,435

4,037

36,823

520,229

Total amortised cost and FVOCI exposures:

39,519

310,647

Fixed interest rate exposures

36,218

170,609

Floating interest rate exposures

3,301

140,038

2021

Loans and

advances

to banks

$mill

ion

Loans and

advances

to customers

$mill

ion

Investment

securit

ies

– Treasury

and other

elig

ible B

ills

$mill

ion

Investment

securit

ies

– Debt

securit

ies

$mill

ion

Investment

securit

ies

– Equity

$mill

ion

Bank

deposits

$mill

ion

Customer

accounts

$mill

ion

One year or less

63,741

215,065

21,493

42,653

–

38,121

533,319

Between one and ﬁve years

2,921

57,690

532

79,081

–

322

7,009

Between ﬁve and ten years

143

16,744

–

24,214

–

861

Between ten years and ﬁfteen years

14,493

–

7,436

–

687

More than ﬁfteen years and undated

151

65,711

–

16,716

6,598

579

Total

66,957

369,703

22,025

170,100

6,598

38,447

542,455

Total amortised cost and FVOCI exposures:

44,383

298,468

Fixed interest rate exposures

40,618

155,948

Floating interest rate exposures

3,765

142,520

Maturity and yield of Debt securit

ies, alternat

ive tier one and other elig

ible b

ills held at amortised cost

One year or less

Between one and

ﬁve years

Between ﬁve and

ten years

More than ten years

Total

$mill

ion

Yield %

$mill

ion

Yield %

$mill

ion

Yield %

$mill

ion

Yield %

$mill

ion

Yield %

Central and other

government agencies

– US

2,208

1.58

5,437

1.41

6,317

1.32

4,498

3.47

18,460

1.90

– UK

–

1.98

0.50

0.90

192

1.26

– Other

3,599

2.71

9,659

1.98

3,541

2.24

4.00

16,843

2.19

Other debt securit

ies

4,752

4.53

2,869

5.07

1,454

4.09

15,144

3.55

24,219

3.96

As at 31 December 2022

10,559

3.29

18,050

2.30

11,372

1.96

19,733

3.53

59,714

2.82

One year or less

Between one and

ﬁve years

Between ﬁve and

ten years

More than ten years

Total

$mill

ion

Yield %

$mill

ion

Yield %

$mill

ion

Yield %

$mill

ion

Yield %

$mill

ion

Yield %

Central and other

government agencies

– US

270

1.72

5,609

1.33

6,476

1.28

3,418

3.00

15,772

1.68

– UK

–

2.67

114

0.81

0.91

215

1.26

– Other

1,813

1.17

6,366

1.32

1,485

1.56

–

9,665

1.33

Other debt securit

ies

2,033

5.64

1,877

4.51

1,696

3.08

10,067

0.95

15,673

2.28

As at 31 December 2021

4,116

3.41

13,901

1.76

9,771

1.63

13,537

1.47

41,325

1.82

The maturity distr

ibut

ions are presented in the above table on the basis of contractual maturity dates. The weighted average

yield for each range of maturit

ies

is calculated by div

ing the annualised interest income for the year by the book amount of

debt securit

ies at that date.

481

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Average balance sheets and yields and volume and price variances

Average balance sheets and yields

For the purposes of calculating net interest margin the following adjustments are made:

•

Statutory net interest income is adjusted to remove interest expense on amortised cost liab

ies used to prov

ide funding to

the Financ

ial Markets bus

iness

•

Financ

ial

instruments measured at fair value through proﬁt or loss are classif

ied as non-

interest earning

•

Premiums on ﬁnanc

ial guarantees purchased to manage

interest-earning assets are treated as interest expense

In the Group’s view this results in a net interest margin that is more reﬂective of banking book performance.

The following tables set out the average balances and yields for the Group’s assets and liab

ies for the per

iods ended

31 December 2022 and 31 December 2021 under the revised deﬁn

ion of net interest margin. For the purpose of these tables,

average balances have been determined on the basis of daily balances, except for certain categories, for which balances

have been determined less frequently. The Group does not believe that the informat

ion presented

in these tables would be

sign

iﬁcantly d

ifferent had such balances been determined on a daily basis.

Average assets

2022

Average

non-interest

earning

balance

$mill

ion

Average

interest-

earning

balance

$mill

ion

Interest

income

$mill

ion

Gross yield

total balance

Cash and balances at central banks

19,700

54,503

765

1.40

1.03

Gross loans and advances to banks

29,576

42,953

853

1.99

1.18

Gross loans and advances to customers

61,480

306,880

10,168

3.31

2.76

Impairment provis

ions aga

inst loans and advances to banks

and customers

–

(5,867)

–

Investment securit

ies – Treasury and Other El

ible B

ills

5,564

25,924

630

2.43

2.00

Investment securit

ies – Debt Secur

ies

23,618

140,977

2,836

2.01

1.72

Investment securit

ies – Equ

ity Shares

4,152

–

Property, plant and equipment and intang

ible assets

8,821

–

Prepayments, accrued income and other assets

142,599

–

Investment associates and jo

int ventures

2,152

–

Total average assets

297,662

565,370

15,252

2.70

1.77

Average assets

2021

Average

non-interest

earning

balance

$mill

ion

Average

interest-

earning

balance

$mill

ion

Interest

income

$mill

ion

Gross yield

total balance

Cash and balances at central banks

23,612

55,991

0.16

0.12

Gross loans and advances to banks

22,335

45,953

490

1.07

0.72

Gross loans and advances to customers

56,582

307,552

7,574

2.46

2.08

Impairment provis

ions aga

inst loans and advances to banks

and customers

–

(6,013)

–

Investment securit

ies – Treasury and Other El

ible B

ills

4,891

21,082

302

1.43

1.16

Investment securit

ies – Debt Secur

ies

22,778

134,843

1,788

1.33

1.13

Investment securit

ies – Equ

ity Shares

4,581

–

Property, plant and equipment and intang

ible assets

8,869

–

Prepayments, accrued income and other assets

111,564

–

Investment associates and jo

int ventures

2,330

–

Total average assets

257,542

559,408

10,246

1.83

1.25

482

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Supplementary ﬁnancial

informat

ion

Average liab

ies

Average liab

ies

2022

Average

non-interest

bearing

balance

$mill

ion

Average

interest-bearing

balance

$mill

ion

Interest

expense

$mill

ion

Rate paid

total balance

Deposits by banks

17,039

27,241

433

1.59

0.98

Customer accounts:

Current accounts

51,375

132,709

1,480

1.12

0.80

Savings deposits

–

131,571

832

0.63

Time deposits

11,586

152,118

3,021

1.99

1.85

Other deposits

52,962

5,094

110

2.16

0.19

Debt securit

ies

in issue

6,720

60,559

1,169

1.93

1.74

Accruals, deferred income and other liab

ies

147,814

1,065

4.13

0.03

Subordinated liab

ies and other borrowed funds

–

14,994

570

3.80

Non-controlling interests

312

–

Shareholders’ funds

49,873

–

337,681

525,351

7,659

1.46

0.89

Adjustment for Financ

ial Markets fund

ing costs

(463)

Financ

ial guarantee fees on

interest-earning assets

Total average liab

ies and shareholders’ funds

337,681

525,351

7,276

1.38

0.84

Average liab

ies

2021

Average

non-interest

bearing

balance

$mill

ion

Average

interest-bearing

balance

$mill

ion

Interest

expense

$mill

ion

Rate paid

total balance

Deposits by banks

18,486

27,402

136

0.50

0.30

Customer accounts:

Current accounts

51,104

120,477

462

0.38

0.27

Savings deposits

–

141,714

386

0.27

Time deposits

9,590

141,652

1,306

0.92

0.86

Other deposits

45,068

7,715

0.54

0.08

Debt securit

ies

in issue

6,288

59,135

566

0.96

0.87

Accruals, deferred income and other liab

ies

115,477

1,149

4.61

0.05

Subordinated liab

ies and other borrowed funds

–

16,525

497

3.01

Non-controlling interests

343

–

Shareholders’ funds

51,307

–

297,663

515,769

3,448

0.67

0.42

Adjustment for Financ

ial Markets fund

ing costs

(97)

Financ

ial guarantee fees on

interest-earning assets

Total average liab

ies and shareholders’ funds

297,663

515,769

3,450

0.67

0.42

Net interest margin

2022

$mill

ion

2021

$mill

ion

Interest income (statutory)

15,252

10,246

Average interest-earning assets

565,370

559,408

Gross yield (%)

2.70

1.83

Interest expense (statutory)

7,659

3,448

Adjustment for Financ

ial Markets fund

ing costs

(463)

(97)

Financ

ial guarantee fees on

interest-earing assets

Adjusted interest expense used to fund ﬁnanc

ial

instruments held at fair value

7,276

3,450

Average interest-bearing liab

ies

525,351

515,769

Rate paid (%)

1.38

0.67

Net yield (%)

1.32

1.16

Net interest income adjusted for Financ

ial Markets fund

ing costs and Financ

ial guarantee fees on

interest-earing assets

7,976

6,796

Net interest margin (%)

1.41

1.21

483

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Volume and price variances

The following table analyses the estimated change in the Group’s net interest income attributable to changes in the average

volume of interest-earning assets and interest-bearing liab

ies, and changes

in their respective interest rates for the years

presented. Volume and rate variances have been determined based on movements in average balances and average

exchange rates over the year and changes in interest rates on average interest-earning assets and average interest-bearing

liab

ies.

2022 versus 2021

(Decrease)/increase in

interest due to:

Net increase/

(decrease)

in interest

$mill

ion

Volume

$mill

ion

Rate

$mill

ion

Interest-earning assets

Cash and unrestricted balances at central banks

(21)

694

673

Loans and advances to banks

(60)

423

363

Loans and advances to customers

(17)

2,611

2,594

Investment securit

ies

228

1,148

1,376

Total interest-earning assets

130

4,876

5,006

Interest-bearing liab

ies

Subordinated liab

ies and other borrowed funds

(58)

131

Deposits by banks

(3)

300

297

Customer accounts:

Current accounts and savings deposits

1,428

1,446

Time and other deposits

157

1,635

1,792

Debt securit

ies

in issue

576

603

Total interest-bearing liab

ies

141

4,070

4,211

2021 versus 2020

(Decrease)/increase in

interest due to:

Net increase/

(decrease)

in interest

$mill

ion

Volume

$mill

ion

Rate

$mill

ion

Interest-earning assets

Cash and unrestricted balances at central banks

(42)

(21)

Loans and advances to banks

(87)

(224)

(311)

Loans and advances to customers

418

(1,402)

(984)

Investment securit

ies

158

(888)

(730)

Total interest-earning assets

510

(2,556)

(2,046)

Interest-bearing liab

ies

Subordinated liab

ies and other borrowed funds

(151)

(140)

Deposits by banks

(102)

(101)

Customer accounts:

Current accounts and savings deposits

123

(420)

(297)

Time and other deposits

(50)

(1,134)

(1,184)

Debt securit

ies

in issue

(335)

(270)

Total interest-bearing liab

ies

150

(2,142)

(1,992)

484

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Supplementary people informat

ion

Supplementary people informat

ion

Global

2022

2021

2020

% change

Full-time equivalent (FTE)

83,195

81,904

83,601

1.6

Headcount (year end)

83,266

81,957

83,657

1.6

Employed workers (permanent)

82,319

80,605

82,084

2.1

of which female

37,259

36,644

37,245

1.7

Fixed-term workers (temporary)

947

1,352

1,573

(30.0)

of which female

429

637

768

(32.7)

Non-employed workers (NEW)

13,962

13,845

11,632

0.8

Non-outsourced NEW

5,873

6,130

5,765

(4.2)

Outsourced NEW

8,089

7,715

5,867

4.8

Headcount (12-month average)

82,987

82,736

84,740

0.3

Male

FTE

44,709

44,033

45,198

1.5

Headcount

44,734

44,045

45,210

1.6

Full-time

44,683

44,002

45,172

1.5

Part-time

18.6

Female

FTE

37,642

37,240

37,969

1.1

Headcount

37,688

37,281

38,013

1.1

Full-time

37,551

37,138

37,860

1.1

Part-time

137

143

153

(4.2)

Undisclosed

FTE

844

631

434

33.7

Headcount

844

631

434

33.8

Full-time

843

630

433

33.8

Part-time

–

National

ies

131

132

131

(0.8)

Posit

ion type

2022

2021

2020

% change

Executive and non-executive director

7.7

of which female

50.0

Management team and their direct reports

131

116

129

12.9

of which female

30.3

Senior leadership

4,422

4,227

4,196

4.6

of which female

1,420

1,299

1,236

9.3

Rest of employees

78,844

77,730

79,461

1.4

of which female

36,268

35,982

36,777

0.8

Employment type

2022

2021

2020

% change

Business FTE

30,589

30,921

35,071

(1.1)

Business headcount

30,619

30,940

35,093

(1.0)

Business female headcount

15,794

15,997

18,079

(1.3)

Support services FTE

52,607

50,983

48,530

3.2

Support services headcount

52,647

51,017

48,564

3.2

Female support services headcount

21,894

21,284

19,934

2.9

485

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Region

2022

2021

2020

% change

Asia FTE

69,329

67,840

68,357

2.2

Asia headcount

69,364

67,870

68,385

2.2

Asia female headcount

32,033

31,470

31,610

1.8

Asia employed workers headcount

68,585

66,968

67,449

2.4

Asia ﬁxed-term workers headcount

779

902

936

(13.6)

Asia full-time headcount

69,257

67,774

68,300

2.2

Asia part-time headcount

107

11.5

AME FTE

8,905

9,372

10,694

(5.0)

AME headcount

8,921

9,373

10,695

(4.8)

AME female headcount

3,918

4,100

4,652

(4.4)

AME employed workers headcount

8,813

8,999

10,139

(2.1)

AME ﬁxed-term workers headcount

108

374

556

(71.1)

AME full-time headcount

8,917

9,369

10,691

(4.8)

AME part-time headcount

–

EA FTE

4,962

4,691

4,550

5.8

EA headcount

4,981

4,714

4,577

5.7

EA female headcount

1,737

1,711

1,751

1.5

EA employed workers headcount

4,921

4,638

4,496

6.1

EA ﬁxed-term workers headcount

(21.1)

EA full-time headcount

4,903

4,627

4,474

6.0

EA part-time headcount

103

(10.3)

Age

2022

2021

2020

% change

< 30 years FTE

13,826

14,063

15,979

(1.7)

< 30 years headcount

13,836

14,069

15,984

(1.7)

< 30 years female headcount

7,397

7,623

8,409

(3.0)

30–50 years FTE

61,651

60,891

60,881

1.2

30–50 years headcount

61,691

60,919

60,912

1.3

30–50 years female headcount

26,870

26,583

26,641

1.1

> 50 years FTE

7,718

6,949

6,741

11.1

> 50 years headcount

7,739

6,969

6,761

11.0

> 50 years female headcount

3,421

3,075

2,963

11.3

486

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Supplementary people informat

ion

Talent management

2022

2021

2020

% change

Global voluntary turnover – FTE

12,645

10,214

6,001

23.8

Global turnover – FTE

14,388

13,160

8,088

9.3

Global voluntary turnover rate (%)

15.5%

12.6%

7.2%

22.9

Global turnover rate (%)

17.6%

16.2%

9.7%

8.6

Male turnover FTE

8,021

7,332

4,386

9.4

Male (%)

18.2%

16.7%

9.8%

9.0

Female turnover FTE

6,230

5,736

3,673

8.6

Female (%)

16.8%

15.6%

9.7%

8.0

Asia turnover FTE

12,501

11,004

6,588

13.6

Asia (%)

18.4%

16.4%

9.7%

12.1

AME turnover FTE

1,046

1,454

1,046

(28.1)

AME (%)

11.7%

15.4%

9.8%

(23.9)

EA turnover FTE

841

703

454

19.6

EA (%)

17.7%

15.5%

10.2%

14.6

< 30 years turnover FTE

4,137

3,712

2,561

11.5

< 30 years (%)

30.5%

26.1%

15.0%

17.2

30–50 years turnover FTE

9,303

8,144

4,765

14.2

30–50 years (%)

15.2%

13.5%

8.0%

12.7

> 50 years turnover FTE

947

1,304

762

(27.4)

> 50 years (%)

13.1%

19.3%

12.1%

(31.8)

Average tenure (years) – male

7.1

7.2

7.1

(1.4)

Average tenure (years) – female

7.6

7.7

7.6

(1.3)

Global new hires – FTE

17,432

12,660

8,639

37.7

Global new hire rate (%)

21.0%

15.3%

10.2%

37.3

Male new hire FTE

9,683

6,758

4,963

43.3

Male (%)

21.7%

15.2%

10.9%

43.2

Female new hire FTE

7,384

5,580

3,423

32.3

Female (%)

19.6%

14.9%

8.9%

32.2

Asia new hire FTE

15,441

11,387

7,591

35.6

Asia (%)

22.4%

16.7%

11.0%

33.9

AME new hire FTE

934

431

366

116.7

AME (%)

10.2%

4.3%

3.3%

135.8

EA new hire FTE

1,056

842

682

25.5

EA (%)

21.9%

18.2%

15.1%

20.5

< 30 years new hire FTE

7,673

5,857

4,020

31.0

< 30 years (%)

54.7%

39.6%

22.6%

38.2

30–50 years new hire FTE

9,357

6,514

4,433

43.7

30–50 years (%)

15.2%

10.7%

7.3%

42.3

> 50 years new hire FTE

401

290

186

38.7

> 50 years (%)

5.4%

4.2%

2.9%

30.4

Roles ﬁlled internally (%)

37.3%

40.8%

39.6%

(8.6)

of which ﬁlled by females (%)

41.0%

42.8%

41.1%

(4.1)

Absenteeism rate

(%)

1.4%

1.6%

1.3%

(12.9)

487

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Learning

2022

2021

2020

% change

Employees receiv

ing tra

ing (%)

99.5%

99.4%

99.5%

0.1

Employees receiv

ing tra

ing for personal development (%)

91.6%

91.7%

91.5%

(0.1)

Female (%)

90.0%

91.2%

89.9%

(1.3)

Senior leadership (%)

94.9%

96.2%

94.5%

(1.4)

Average number of train

ing hours per employee

36.6

37.6

31.8

(2.6)

Female

35.2

36.9

30.3

(4.6)

Male

37.7

38.0

32.0

(0.8)

Employed workers

36.8

37.6

31.9

(2.2)

Fixed-term workers

21.9

34.0

27.3

(35.8)

Average cost of train

ing per employee ($)

743

708

567

5.0

Work-related Health & Safety

2022

2021

2020

% change

Fatalit

ies

–

Fatalit

ies (rate per m

ill

ion hours worked)

0.01

–

Major in

juries

12,13,14,15

(12.5)

Major in

juries (rate per mill

ion hours worked

)

0.11

0.13

0.12

(15.2)

Recordable work-related injuries

5.1

Recordable work-related injuries (rate per mill

ion hours worked

)

0.44

0.43

0.45

2.8

Work-related ill-health (fatalit

ies)

–

Excludes 453 employees (headcount) from Dig

ital Ventures ent

ies (Autumn, Cardspal, TASConnect, Zod

ia, Solv, Appro). Excludes 331 Person of Interest

(headcount) following a recategorisat

ion of worker types from 2022,

i.e. independent non-executive directors, advisers, external auditors and regulators.

Percentage change refers to the percentage change from 2021 to 2022

Non-outsourced NEWs are resources engaged on a time and materials basis where task selection and supervis

ion

is the responsib

ity of the Bank, such as agency

workers. References to total number of colleagues in this report include employees plus non-outsourced NEWs

Outsourced NEWs are arrangements with a third-party vendor where the delivery is based on a specif

ic serv

ice or outcome at an agreed price, irrespect

ive of the

number of resources required to perform the service. These resources are not considered as the Group’s headcount

4 The disclosure of gender informat

ion

is not mandatory in some markets

Management Team (MT) and colleagues who report to them, excluding admin

istrat

ive or executive support roles (personal assistant, business planning

managers). Includes Group Head of Internal Audit

6 Senior leadership is deﬁned as Managing Directors and Bands 4 (includ

ing Management Team)

As part of the ongoing execution of its refreshed strategy, the Group has reorganised its reporting structure with the creation of a third client segment, Ventures, in

2022. Prior periods have been restated for a meaningful comparison

Turnover metrics are based on permanent employed workers only. New hire metrics are based on external new hires. Turnover and new hire metrics for the

undisclosed gender population is not shown due to small population size. In 2022, we have updated turnover and new hire metrics based on average 12-month

FTE and prior periods have been refreshed accordingly

Represents health and disab

ity related absence, includ

ing quarant

ine and vaccinat

ion leave

in respect of COVID-19. Excludes Korea

10 Learning metrics exclude non-employed workers (NEWs). Train

ing for personal development

is deﬁned as all train

ing exclud

ing mandatory or role specif

ic tra

ing

11 Average cost of train

ing per employee

includes cost of learning management system

12 Includes commuting

13 Per UK HSE deﬁnit

ion

14 Most common types of major in

jury are fractures (21%)

15 2022 includes 1 contractor/vis

itor. 2021

includes 4 contractors/vis

itors. 2020

includes 1 contractor/vis

itor

16 2022 hours worked = 188,758,285 hours worked. 2021 hours worked = 184,997,097. 2020 hours worked = 185,313,634

17 2022 includes 18 contractors/vis

itors. 2021

includes 23 contractors/vis

itors. 2020

includes 14 contractors/vis

itors

488

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Supplementary sustainab

ity informat

ion

Supplementary sustainab

ity informat

ion

Pillar 1: Business

Employees trained in environmental and social risk management

FY’22

FY’21

FY’20

Employees trained

4,944

1,280

1,604

Employees targeted for train

ing are those

in client-facing roles and relevant support teams. For 2022, this ﬁgure also includes our ESRM e-learning

Environmental and social risk management

FY’22

FY’21

FY’20

Number of transactions reviewed

550

547

402

Number of clients reviewed

1,170

786

688

Client exits due to non-compliance with Posit

ion Statements

Equator Princ

iples

Project ﬁnance mandates

Project-related corporate loans

Project-related reﬁnance

Project

advisory

mandates

Cat A

Cat B

Cat C

Cat A

Cat B

Cat C

Cat A

Cat B

Cat C

Total 2020

4.0

8.0

–

2.0

1.0

–

Total 2021

8.0

12.0

3.0

1.0

6.0

–

1.0

–

Total 2022

6.0

7.0

1.0

2.0

3.0

4.0

–

2022

Sector

General Manufacturing

1.0

Infrastructure

2.0

3.0

1.0

2.0

3.0

Oil and Gas

1.0

Power

3.0

Region

Americas

1.0

2.0

1.0

Asia Pacif

4.0

2.0

1.0

2.0

Europe, Middle East & Africa

1.0

3.0

1.0

2.0

Designat

ion

Designated

1.0

4.0

1.0

Non-designated

5.0

3.0

2.0

3.0

Independent Review

Yes

6.0

7.0

1.0

2.0

3.0

1.0

3.0

Cat A or Category A are projects with potential sign

iﬁcant adverse env

ironmental and social risks and/or impacts that are diverse, irrevers

ible or unprecedented

Cat B or Category B are projects with potential lim

ited adverse env

ironmental and social risks and/or impacts that are few in number, generally site-specif

ic,

largely reversible and readily addressed through mit

igat

ion measures

Cat C or Category C are projects with min

imal or no adverse env

ironmental and social risks and/or impacts

In line with Equator Princ

iples 4, Standard Chartered now reports those transact

ions that trigger project-related reﬁnance

Designat

ion

is split into designated and non-designated countries. Designated countries are deemed by the Equator Princ

iples to have robust env

ironmental and

social governance, legislat

ion systems and

inst

itut

ional capacity designed to protect their people and the natural environment. Non-designated countries are

countries that are not found on the list of designated countries. The list of countries can be found at www.equator-princ

iples.com

Standard Chartered did not partic

ipate

in any project advisory mandates that triggered the applicab

ity of the Equator Princ

iples

in 2022

489

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Pillar 2: Operations

Environment

Units

Footnote

2022

2021

2020

2021–2022

% change

Measured

Scaled Up

Measured

Scaled Up

Measured

Scaled Up

Reporting coverage of data

Ofﬁces reporting

No. of ofﬁces

875

–

838

–

756

–

Net internal area of occupied

property

930,327

946,234

976,520

998,571

933,132

1,050,414

(5)

Green lease clause inclus

ion

–

Occupied net internal area

where data is collected

–

Headcount

No. of

employees

83,266

80,318

81,957

74,316

83,657

Annual operating income from

1 October to 30 September

$ mill

ion

–

15,863

–

15,233

–

GHG emiss

ions

Scope 1:

Scope 1 emiss

ions (combust

ion

of fuels)

tCO

2,027

2,071

2,834

2,902

3,589

3,988

(29)

Scope 2:

Scope 2 emiss

ions (purchased

electric

ity – locat

ion based)

tCO

46,345

47,363

80,835

82,761

102,477

113,870

(43)

Scope 2 emiss

ions (purchased

electric

ity – market based)

tCO

41,492

42,403

73,016

74,906

–

(43)

Scope 1 & 2

Scope 1 & 2 emiss

ions (locat

ion

based)

tCO

48,372

49,434

83,669

85,662

106,066

117,858

(42)

Scope 1 & 2 emiss

ions (UK and

offshore area only)

tCO

–

Scope 3:

Category 1: Purchased goods

(Other)

tCO

5, 6

–

380,732

–

330,224

–

Purchased goods

(global data centres)

tCO

–

706

–

43,132

–

29,562

(98)

Category 2: Capital goods

tCO

5, 6

–

34,496

–

47,217

–

Category 3: Fuel-and-energy-

related activ

ies

tCO

–

Category 4: Upstream

transportation and distr

ibut

ion

tCO

–

20,300

–

20,949

–

Category 5: Waste generated

in operations

tCO

9, 10

–

498

–

Category 6: Business travel

(air travel)

tCO

–

39,107

3,410

3,654

31,617

33,930

970

Business travel (miscellaneous

other than ﬂights)

tCO

5, 6

–

2,654

–

4,994

–

Category 7: Employee

commuting

tCO

10, 12

–

61,917

–

Category 8: Upstream leased

assets

tCO

–

Category 9: Downstream

transportation and distr

ibut

ion

tCO

–

Category 10: Processing of sold

products

tCO

–

Category 11: Use of sold

products

tCO

–

Category 12: End of life

treatment of sold products

tCO

–

Category 13: Downstream

leased assets (corporate real

estate)

tCO

10, 16

–

8,594

–

Downstream leased assets

(leased aircraft)

tCO

10, 17

–

1,671,867

–

Category 14: Franchises

tCO

–

Category 15: Investments

tCO

– 58,500,000

– 45,200,000

–

Total scope 3

tCO

60,720,871

45,650,190

63,492

Total scope 1, 2 and 3

tCO

60,770,305

45,735,852

181,350

490

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Supplementary sustainab

ity informat

ion

Units

Footnote

2022

2021

2020

2021–2022

% change

Measured

Scaled Up

Measured

Scaled Up

Measured

Scaled Up

GHG emiss

ions – Intens

ity:

By $m operating income

Scope 1 & 2 emiss

ions/

$m operating income

tCO

–

(47)

Scope 1, 2 & 3 emiss

ions/

$m operating income

tCO

–

(66)

Environmental resource

efﬁciency

Energy

Indirect non-renewable energy

consumption

GWh/year

140

142

139

142

164

184

(0)

Indirect renewable energy

consumption

GWh/year

(13)

Direct non-renewable energy

consumption

GWh/year

(16)

Direct renewable energy

consumption

GWh/year

Energy consumption

GWh/year

174

177

179

183

192

216

(3)

Energy consumption (UK and

offshore area only)

GWh/year

–

Energy consumption/

Headcount

kWH/

headcount/

year

2,094

2,129

2,229

2,233

2,260

2,544

(5)

Water

Water consumption

ML/year

265

385

256

384

363

483

% water consumption in

regions of high or extremely

high water stress

–

(100)

Water consumption/

Headcount

Headcount/

year

(2)

Waste

ktonnes/year

(54)

Waste/Headcount

kg/

Headcount/

year

(55)

Waste reused or recycled

–

Footnotes

Percentage of green lease clause inclus

ion

in all new and renewed leases with

in the report

ing year

Refers to the Group’s headcount as at 31 December 2022

Market-based data was ﬁrst reported in 2021 and is unavailable for previous years. All aggregate and intens

ity em

iss

ions ﬁgures use locat

ion based data as their

foundation

We use an independent third-party assurance provider to verify our greenhouse gas (GHG) emiss

ions. In 2022, our measured Scope 1 and Scope 2 em

iss

ions, as

well as waste and water consumption, were assured by Global Documentation Ltd, ensuring the accuracy and credib

ity of our reporting. All energy consumed in

the UK is from verif

ied renewable sources and therefore th

is is zero

Emiss

ions report

ing for purchased goods (other), capital goods and miscellaneous travel other than ﬂights for the period 2020 and 2021 was ﬁnal

ised dur

ing 2022

and reported in our CDP submiss

ion

Calculation of category 1: Purchased Goods, category 2: Capital Goods, category 4: Upstream Transportation and Distr

ibut

ion and Category 6: Miscellaneous

travel is based on lagged data from the period 1 Jan 2021 to 31 December 2021. Estimated supplier emiss

ions for 2022 expected to be ava

ilable in Q2 2023

The decrease in emiss

ions from data centers was due to the offset of REC’s (Renewable Energy Cert

icate) aga

inst the total energy consumption. REC’s are a type

of Energy Attribute Certif

icate that represents the env

ironmental attributes of the generation of a one-megawatt hour (MWh) of energy produced by renewable

sources ie the proportion of power sourced from a national grid that is produced using renewable energy sources

Not relevant. We have no fuel or energy related activ

ies which are not already captured in Scope 1 or 2 submiss

ion. Standard Chartered are a ﬁnancial

inst

itut

ion

and as such we do not mine, reﬁne, transmit or distr

ibute fuels. there are therefore no losses

in said activ

ies. We also do not generate power to sell to market. We

only generate power from standby generators for our own consumption. Emiss

ions from th

is activ

ity

is covered under Scope 1 emiss

ions

Emiss

ions from waste extrapolated for whole company from measured ofﬁce data us

ing both landﬁll and recycled emiss

ion factors from Commerc

ial and

Industrial Waste sourced from DEFRA

10 Emiss

ions for Category 5: Waste generated

in operations, Category 7: Employee Commuting and Category 13: Downstream Leased Assets was measured and

reported for the ﬁrst time in 2022

Pillar 2: Operations

continued

Environment

continued

491

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Measured Scope 3 ﬂight emiss

ions are drawn from rel

iable data collected from 35 countries, based on seating class and distance ﬂown. This data is then scaled

up to reﬂect the portion of the portfolio we do not gather measurements from. As we operate largely outside of the UK, all ﬂights domestic or internat

ional w

ith

ﬂight distance of less than 785km, labeled by the Department for Business, Energy and Industrial Strategy (DBEIS) as domestic ﬂights, have been classif

ied as

short haul. All ﬂights with distance ﬂown ranging from 785 to 3,700km, labeled by DBEIS as short haul have been classif

ied as med

ium haul. All ﬂights with a

distance ﬂown in excess of 3,700km are classif

ied as long haul

12 Commuting and working from home emiss

ions extrapolated for the whole company from a sample survey responses for a select

ion of sites and countries, which

examined distance/mode of transport and heating/cooling at home. The Calculation is based on the Homeworking Emiss

ions Wh

itepaper, EcoAct 2020

13 Not relevant. Scope 3 emiss

ions from upstream leased assets are not relevant as they are

included in Scope 1 and 2 emiss

ions. The Group leases approx

imately

70% of its portfolio, either whole build

ing or part from Landlords

14 Not relevant. As a ﬁnancial

inst

itut

ion, the Group does not transport or distr

ibute products on a mater

ial scale. Most of our products are electronically distr

ibuted

using technology hosted in third-party data centers, disclosed under Scope 3 Category 1

15 Not relevant. As a provider of ﬁnanc

ial serv

ices, our products are predominantly intang

ible. Therefore th

is is not a material source of emiss

ions for our bus

iness

16 Emiss

ions der

ived from real estate downstream leased assets ie those assets owned but not occupied by SCB. Measured and applied with energy use intens

ity

value to create a consumption in kWhs per annum and then multipl

ied by country em

iss

ion factor

17 This is the downstream leased assets in the groups aviat

ion portfol

io. Scope 1 and 2 emiss

ions have been

included

18 Not relevant. The Group does not operate any franchises

19 These are ﬁnanced emiss

ions of our CCIB lend

ing portfolio. Our ﬁnanced emiss

ions

in 2022 are 58.5 MTCO2e, up from 45.2 MTCO2e in 2021. This was following the

inclus

ion of 3 add

ional transport sectors

into the ﬁnanced emiss

ions calculat

ion. For further details refer to the Measurement and progress of our ﬁnanced

emiss

ions : sectoral deep d

ives for further details. Our analysis currently covers 61% of the ﬁnanced emiss

ions of the CCIB portfol

io with further sectors to be added

to the analysis in future

20 We measured data from 98% of our properties to calculate our energy use across our properties. This is then scaled up to reﬂect the portion of the portfolio we do

not gather measurements from warehouses, empty land, car parks, unoccupied sites for business continu

ity purposes, res

ident

ial propert

ies, space occupied by

automated teller machines, vaults and space sub-let to tenants are excluded from this extrapolation. Figures for renewable, non-renewable and total energy in

GWh are rounded to one decimal place – therefore some discrepanc

ies

in rounded sum totals may arise. Total consumption ﬁgures have been verif

ied as accurate

from source data. This also applies to previous periods which are therefore restated to the same level of detail. Further detail on the types of energy included

with

in these calculat

ions can be found at sc.com/environmentcriter

21 This value represents the total energy of heating, cooling and electric

ity consumpt

ion globally. Total energy use is normalised to reﬂect periods of vacancy in

certain sites during the reporting period

22 We measured data from 69% of our properties to calculate our water use across our properties. This is then scaled up to reﬂect the portion of the portfolio we do

not gather measurements from

23 Areas of high and extremely high water stress determined according to WRI Aqueduct tool. As accessed on 27 Jan 2023, these countries are South Africa, Saudi

Arabia, Bharain, Oman, Qatar, UAE, Pakistan, India, Thailand, China, Egypt and Türkiye. This is a new reporting addit

ion for 2022

24 We measured data from 92% of our properties to calculate our waste across our properties. This is then scaled up to reﬂect the portion of the portfolio we do not

gather measurements from

Addit

ional notes on env

ironment data

The emiss

ions w

ith

in our

inventory correspond to a reporting period of 1 October 2021 to 30 September 2022. This is to allow

sufﬁcient t

ime for independent assurance to be gained prior to the publicat

ion of results. Accord

ingly, the operating income

used in this inventory corresponds to the same period rather than the calendar year used in ﬁnanc

ial report

ing. This is consistent

with internat

ional carbon report

ing practice.

We use an independent third-party assurance provider to verify our greenhouse gas (GHG) emiss

ions. Our Scope 1 and 2

emiss

ions are

independently assured by Global Documentation, in accordance with ISO 14064.

Read our environment reporting criter

ia at

sc.com/environmentcriter

Read our independent assurance report at

sc.com/environmentalassurance

492

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Supplementary sustainab

ity informat

ion

Pillar 2: Operations

continued

Supply chain spend

% of total

third-party

spend

1,2

Number of

ﬁrst tier

supplier

organisat

ions

(with spend

in 2022)

1,2

Number of

local suppliers

(by payment

market)

1,2

Number

of global

suppliers

(by payment

market)

1,2

Top 10 sourcing locations by % overall spend

Singapore

1,465

971

494

United Kingdom

818

512

306

India

2,229

2,038

191

Hong Kong

769

475

294

China

894

779

115

Korea

597

568

USA

266

144

122

United Arab Emirates

392

225

167

Malaysia

568

427

141

Taiwan

492

410

Regional spend

Asia

9,059

7,312

1,747

Europe and Americas

1,639

997

642

Africa and Middle East

3,543

2,610

933

Regional spend

Technology

1,544

1,310

234

Professional Services

2,125

1,914

211

Property

2,629

2,565

Marketing

1,858

1,764

Human Resources

1,417

1,299

118

Banking Operations

357

335

Travel

459

426

Ofﬁce Supplies

828

795

Others

520

511

Please note that suppliers are counted by generic name (e.g. all DHL legal entit

ies are counted as one DHL)

The same supplier may be used in more than one market

‘China’ refers to the People’s Republic of China and, for the purposes of this document only, excludes Hong Kong Special Admin

istrat

ive Region (Hong Kong),

Macau Special Admin

istrat

ive Region (Macau) and Taiwan, ‘Korea’ or ‘South Korea’

4 Suppliers with payments in more than one market

Pillar 3: Communit

ies

Charitable Giv

ing

Total ($mill

ion)

FY’22

FY’21

FY’20

Cash contribut

ions

Employee time (non-cash item)

Gifts In Kind (non-cash item)

Management costs

Total (direct investment by the Group)

Leverage

Total (incl. leverage)

Percentage of prior year operating proﬁt (PYOP) %

Gifts In Kind comprises all non-monetary donations

Leverage data relates to the proceeds from staff and other fundrais

ing act

ity

493

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Pillar 1: Business

Target Date

Status

2022 Progress

Sustainable Finance

Mobil

ise $300bn of Susta

inable Finance

Jan 2021 – Dec 2030

Mobil

ised $23.4 b

ill

ion, br

ing

ing the total

facil

itated s

ince 2021 to $48 bill

ion.

Launch and grow green mortgages in key

markets across our footprint

Jan 2022 – Dec 2023

Green Mortgages were successfully launched in

Vietnam, Korea and Malaysia. Green Mortgages

are now live in a total of six markets includ

ing

Taiwan, Hong Kong and Singapore.

Climate

Measure, manage and reduce emiss

ions

associated with our ﬁnanc

ing v

ia the

implementat

ion of our net zero amb

ion

Jan 2022 – Dec 2022

Developed 2030 emiss

ions basel

ine and targets

for Aviat

ion, Sh

ipp

ing and Automot

ive

Manufacturers.

Only provide ﬁnanc

ial serv

ices to clients

who are:

By 2024, less than 80% dependent on thermal

coal (based on % revenue);

By 2025, less than 60% dependent on thermal

coal (based on % revenue);

By 2027, less than 40% dependent on thermal

coal (based on % revenue);

By 2030, less than 5% dependent on thermal

coal (based on % revenue)

Jan 2020 – Jan 2030

Through our Environment & Social risk assessment

process we have ident

iﬁed cl

ients who are

currently >80% dependent on thermal coal and

are engaging with them to understand their

transit

ion plans where appl

icable. Progress will be

closely monitored during 2023.

Achieve emiss

ions reduct

ion in our most carbon-

intens

ive sectors of:

63% in Power (Scopes 1 and 2 intens

ity);

33% in Steel Producers (Scopes 1 and 2 intens

ity);

33% in Min

ing (ex Coal) (Scopes 1 and 2

intens

ity);

30% in Oil and Gas (Scopes 1, 2 and 3 intens

ity)

and;

85% emiss

ions reduct

ion in coal min

ing (Scopes

1, 2 and 3 absolute)

Jan 2020 – Dec 2030

We remain on track for a 2030 delivery.

See page 81 for progress made in 2022.

Measure and report mortgage emiss

ions w

ith a

view to setting targets by 2023

Jan 2022 – Dec 2023

We completed emiss

ions basel

ine measurements

for Singapore, Hong Kong and Korea.

Commerce

Bank 10,000 of our clients’ internat

ional and

domestic networks of suppliers and buyers

through banking the ecosystem programmes

Jan 2020 – Dec 2024

Enrolled 4,440 suppliers and buyers bring

ing the

total enrolled since Jan 2020 to 11,593.

Impact Finance

Double Sustainable Investing Assets Under

Management across a holist

ic propos

ion

includ

ing Mutual Funds, Exchange Traded

Funds (ETFs), Bonds, Equit

ies, Structured

Products, Discret

ionary Portfol

io Mandates

(DPMs) and Insurance Linked Plans (ILPs)

Jun 2021 – Dec 2025

Negative market valuation and developing

regulation around classif

icat

ion of sustainable

assets resulted in required adjustments on our

Sustainable Investing Assets Under Management

(AUM). Although this required an adjustment to

our AUM, we welcome the developing regulation

around classif

icat

ion to ensure more stringent

standards.

Integrate ESG considerat

ions

in wealth

management advisory activ

ies

Jan 2021 – Dec 2025

We have started to embed ESG factors into stock

selection as part of the advisory process. We

include ESG train

ing for our bankers and also seek

to include ESG topics in some of our client events.

2022 Sustainab

ity Aspirat

ions

494

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Supplementary sustainab

ity informat

ion

Pillar 2: Operations

Target Date

Status

2022 Progress

People

Increase gender representation to 35% women

in senior roles

Sep 2016 – Dec 2025

In 2022, the proportion of women in senior

leadership roles has increased to 32.1%. This is up

by 1.4 percentage points from December 2021

(30.7%) and 7.1 percentage points since December

2016 (25%).

Increase our ‘Culture of Inclusion’ score to 84.5%

Jan 2020 – Dec 2024

In our annual MyVoice survey, 83.1% of employees

reported posit

ive sent

iments around our culture of

inclus

ion. We rema

in on track for our overall 2024

target.

Embed an integrated health and wellbeing

strategy to support build

ing and re-sk

ill

ing a

future-ready, diverse workforce

Jan 2020 – Dec 2022

Progress has been made in multiple areas to

embed the strategy. This includes global offerings

such as ﬂexi-working, our mental health app, a

physical wellbeing online platform, an employee

assistance programme, wellbeing toolkits,

learning programmes on resil

ience as well as a

growing network of trained Mental Health First

Aiders. In 2022, colleagues ind

icated through the

MyVoice survey that they feel better supported on

their wellbeing needs than in 2021. However,

globally, the levels of stress felt by employees

increased in survey from the previous year.

Create Divers

ity & Inclus

ion Supplier Plans for all

our markets to support 40% of our newly

onboarded suppliers being diverse

Jan 2022 – Dec 2025

93% of our highest spend markets have Divers

ity &

Inclusion plans. As at December 2022, on average

37% of our newly onboarded suppliers were

diverse.

Grow our employee MyVoice score to the

question “The way we operate day-to-day is

aligned with our sustainab

ity strategy” from

2021 baseline of 84% to 88%

Jan 2022 – Dec 2024

Achieved a score of 84% in 2022. We are taking

action to move towards our 2024 target of 88%.

Support at least 50% of all employees to

complete our learning programme on

Sustainab

ity

Support at least 70% of relevant employees to

complete our Sustainable Finance train

ing

programme

Jan 2022 – Dec 2022

15% of all employees completed our learning

programme on Sustainab

ity. While this fell short

of the 50% target we had set, we are pleased with

the prelim

inary progress g

iven the voluntary-

nature of the train

ing. The learn

ing programme

will continue to be promoted during 2023 to

continue to build skills and knowledge across the

bank.

The target of 70% completion rate was met for

the Sustainable Finance train

ing. On average, 95%

of relevant employees completed this train

ing

programme across the three certif

icates.

Environment

Reduce annual Scope 1 & 2 greenhouse gas

emiss

ions to net zero by 2025

Jan 2019 – Dec 2025

Achieved 2022 target of 49,434 tonnes of CO2

equivalent (tCO2e), a reduction of over 40% on

our 2021 Scope 1 & 2 emiss

ions of 85,000 tCO2e.

Source all energy from renewable sources

Jan 2020 – Dec 2025

All markets where clean energy can be purchased

through Power Purchase Agreements (PPAs) and

util

ity compan

ies are complete.

Remain

ing countr

ies where we can buy Energy

Attribute Certif

icates (EACs) are 75% complete.

Remain

ing 25% to be completed by end 2025.

Achieve and mainta

in ﬂ

ight emiss

ions 28%

lower than our 2019 baseline of 94,000 tonnes

Jan 2021 – Dec 2023

Reported 39,107 tCO

e and remain well ahead of

our 28% ﬂight emiss

ions reduct

ion target for 2023.

Reduce waste per colleague to 40kg per year

Jan 2020 – Dec 2025

We reduced the overall waste generated by 37%,

and by 39% on a per employee basis to 19.2kg,

achiev

ing our target three years ahead of

schedule. This was primar

ily due to new ways of

working which resulted in reduced employee

presence in our build

ings.

Recycle 90% of waste

Jan 2020 – Dec 2025

35% of waste was recycled in 2022. We remain on

track with plans to introduce new vendors through

partnerships in 2024.

Offset all residual emiss

ions from our operat

ions

(Scope 1 and 2, Scope 3 ﬂights, waste and data

centres), doubling our average cost from $7.65 in

2021 to $15 per tonne in 2022

Jan 2022 – Dec 2022

Achieved our 2022 target through our carbon

credit purchases.

495

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Pillar 2: Operations

continued

Target Date

Status

2022 Progress

Conduct and Compliance

Tackle ﬁnancial cr

imes by contribut

ing to

developing typologies and red ﬂags for

ﬁnancial ﬂows, tra

ing frontl

ine staff to ident

ify

potential suspic

ious transact

ions and

partic

ipat

ing in public-private partnerships to

share intell

igence and good pract

ices

Ongoing

The Group contributed to the development of

typologies and red ﬂags to assess ﬁnanc

ial ﬂows

and to tackle ﬁnancial cr

ime. We also engaged

with ofﬁc

ials on the ﬁnancial serv

ices regulatory

environment, in particular on prudential, ﬁnanc

ial

markets, conduct and ﬁnancial cr

ime frameworks.

In 2022, we also launched the ‘Understanding our

Financ

ial Cr

ime Risks’ course to train staff on the

various impacts of ﬁnanc

ial cr

ime.

Develop and deliver a targeted outreach

programme, includ

ing through key

internat

ional

platforms, aimed at safely and transparently

reducing barriers to capital mobil

isat

ion for

sustainable development

Jan 2022 – Dec 2024

Continued to successfully engage via

internat

ional and reg

ional platforms through

2022 to support our intent

ion to scale up

sustainable ﬁnance and reduce barriers to capital

mobil

isat

ion. These platforms and engagements

have promoted blended ﬁnance, sustainable

infrastructure, carbon markets, transit

ion ﬁnance,

capacity build

ing and susta

inab

ity-related

disclosures as key mobil

isat

ion mechanisms.

Pillar 3: Communit

ies

Target Date

Status

2022 Progress

Communit

ies

Invest 0.75% of prior year operating proﬁt

(PYOP) in our communit

ies

Ongoing

Contributed $51.2 mill

ion to the commun

ity in

2022, which represents 1.5% of PYOP.

Raise $75m for Futuremakers by Standard

Chartered

Jan 2019 – Dec 2023

$14.7 mill

ion was contr

ibuted through fundrais

ing

and donations by the Group in 2022, taking the

total to $78.7 mill

ion

in the last four years.

Education: Reach one mill

ion g

irls and young

women through Goal

Jan 2006 – Dec 2023

We reached 93,268 girls and young women, which

is below our year-end target of 115,000 girls. This

brings the total reach from 2006 to 2022 to

827,297 girls and young women. In 2023 we will

work to compensate for the lag in the past couple

of years due to COVID-19 programme disrupt

ions.

Employabil

ity: Reach 100,000 young people

Jan 2019 – Dec 2023

105,014 young people partic

ipated

employabil

ity programmes. Th

is brings the total

to 218,144 young people reached from 2019 to

2022.

Increase partic

ipat

ion for employee

volunteering to 55%

Jan 2020 – Dec 2023

Employee volunteering partic

ipat

ion rate was

39% in 2022. 32,706 of our colleagues volunteered

for a total of 49,528 days. We have exceeded our

2022, 33% partic

ipat

ion target by 6 percentage

points and have a plan in place to meet the 2023

55% partic

ipat

ion target.

Concluded in the year

Ongoing aspirat

ions

Achieved

Not achieved

On track

Not on track

Business banking SME and Microf

inance lend

ing is the provis

ion of ﬁnance to Development Ass

istance Committee (DAC) lower and middle lower income

countries as per the Organisat

ion for Econom

ic Co-operation and Development (OECD). The inclus

ion of bus

iness banking is linked to the “Access to Finance”

sub theme with

in the Group’s Green and Susta

inable product framework incorporating Employment generation, and programmes designed to prevent and/or

alleviate unemployment, includ

ing through the potent

ial effect of SME ﬁnanc

ing and m

icrof

inance. W

ith the inclus

ion of bus

iness banking, the Entrepreneur

(Lending to SME’s and Microf

inance) asp

irat

ions would be double counted and these asp

irat

ions have therefore been ret

ired

The wording of the question asked from colleagues in the MyVoice survey has been amended to reﬂect the redeﬁn

ion ofthe Group’s Sustainab

ity Vis

ion.

Therefore, the wording in this Sustainab

ity Aspirat

ion has been mod

ied to reﬂect th

is change

496

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Shareholder informat

ion

Shareholder informat

ion

Div

idend and

interest payment dates

Ordinary shares

Final div

idend

Results and div

idend announced

16 February 2023

Ex-div

idend date

23 (UK) 22 (HK) February 2023

Record date for div

idend

24 February 2023

Last date to amend currency election instruct

ions for cash d

idend*

11 April 2023

Div

idend payment date

11 May 2023

In either US dollars, sterling, or Hong Kong dollars

Preference shares

1st half yearly div

idend

2nd half yearly div

idend

∕

per cent non-cumulative irredeemable preference shares of £1 each

1 April 2023

1 October 2023

∕

per cent non-cumulative irredeemable preference shares of £1 each

1 April 2023

1 October 2023

6.409 per cent non-cumulative redeemable preference shares of $5 each

30 January and

30 April 2023

30 July and

30 October 2023

7.014 per cent non-cumulative redeemable preference shares of $5 each

30 January 2023

30 July 2023

Annual General Meeting

The Annual General Meeting (AGM) will be held on

Wednesday 3 May 2023 at 11:00 UK time (18:00 Hong Kong

time). Further details regarding the format, location and

business to be transacted at the meeting will be disclosed

with

in the 2023 Not

ice of AGM.

Details of voting at the Company’s AGM and of proxy votes cast can

be found on the Company’s website at

sc.com/agm

Interim results

The inter

im results w

ill be announced to the London Stock

Exchange, The Stock Exchange of Hong Kong Lim

ited and

put on the Company’s website.

Country-by-Country Reporting

In accordance with the requirements of the Capital

Requirements (Country-by-Country Reporting) Regulations

2013, the Group will publish addit

ional country-by-country

informat

ion

in respect of the year ended 31 December 2022,

on or before 31 December 2023. We have also published our

approach to tax and tax policy.

This informat

ion w

ill be available on the Group’s website at

sc.com

Pillar 3 Reporting

In accordance with the Pillar 3 disclosure requirements, the

Group will publish the Pillar 3 Disclosures in respectof the year

ended 31 December 2022, on or before 28 February 2023.

This informat

ion w

ill be available on the Group’s website at

sc.com

ShareCare

ShareCare is available to shareholders on the Company’s UK

you to hold your Standard Chartered PLC shares in a nominee

account. Your shares will be held in electronic form so you will

no longer have to worry about keeping your share certif

icates

safe. If you join ShareCare, you w

ill still be inv

ited to attend the

Company’s AGM and you will receive any div

idend at the

same time as everyone else. ShareCare is free to jo

in and

there are no annual fees to pay.

If you would like to receive more informat

ion, please v

it our

website at

sc.com/shareholders

or contact the shareholder

helpline on

0370 702 0138

Donating shares to ShareGift

Shareholders who have a small number of shares often ﬁnd it

uneconomical to sell them. An alternative is to consider

donating them to the charity ShareGift (registered charity

1052686), which collects donations of unwanted shares until

there are enough to sell and uses the proceeds to support UK

charit

ies. There

is no impl

icat

ion for capital gains tax (no gain

or loss) when you donate shares to charity, and UK taxpayers

may be able to claim income tax relief on the value of their

donation.

Further informat

ion can be obta

ined from the Company’s registrars

or from ShareGift on

020 7930 3737

or from

sharegift.org

Bankers’ Automated Clearing System (BACS)

Div

idends can be pa

id straight into your bank or build

ing

society account.

Please register online at

investorcentre.co.uk

or contact our

registrar for a div

idend mandate form

Registrars and shareholder enquir

ies

If you have any enquir

ies relat

ing to your shareholding and

you hold your shares on the UK register, please contact our

registrar at investorcentre.co.uk and click on the “ASK A

QUESTION” link at the bottom of the page. Alternatively,

please contact Computershare Investor Services PLC, The

Pavil

ions, Br

idgwater Road, Bristol, BS99 6ZZ or call the

shareholder helpline number on 0370 702 0138.

If you hold your shares on the Hong Kong branch register and

you have enquir

ies, please contact Computershare Hong

Kong Investor Services Lim

ited, 17M Floor, Hopewell Centre,

183 Queen’s Road East, Wan Chai, Hong Kong.

You can check your shareholding at

computershare.com/hk/investors

497

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Substantial shareholders

The Company and its shareholders have been granted partial

exemption from the disclosure requirements under Part XV of

the Securit

ies and Futures Ord

inance (SFO). As a result of this

exemption, shareholders no longer have an obligat

ion under

Part XV of the SFO (other than Div

ions 5, 11 and 12 thereof) to

notify the Company of substantial shareholding interests, and

the Company is no longer required to mainta

in a reg

ister of

interests of substantial shareholders under section 336 of the

SFO. The Company is, however, required to ﬁle with The Stock

Exchange of Hong Kong Lim

ited any d

isclosure of interests

made in the UK.

Taxation

No tax is currently withheld from payments of div

idends by

Standard Chartered PLC. Shareholders and prospective

purchasers should consult an appropriate independent

professional adviser regarding the tax consequences of an

investment in shares in light of their particular circumstances,

includ

ing the effect of any nat

ional, state or local laws.

Previous div

idend payments (unadjusted for the

impact of the 2015/2010/2008 rights issues)

Div

idend and

ﬁnancial year

Payment date

Div

idend per ord

inary share

Cost of one new ordinary share

under share div

idend scheme

Final 2008

15 May 2009

42.32c/28.4693p/HK$3.279597

£8.342/$11.7405

Interim 2009

8 October 2009

21.23c/13.25177p/HK$1.645304

£13.876/$22.799

Final 2009

13 May 2010

44.80c/29.54233p/HK$3.478306

£17.351/$26.252

Interim 2010

5 October 2010

23.35c/14.71618p/HK$1.811274/INR0.984124

£17.394/$27.190

Final 2010

11 May 2011

46.65c/28.272513p/HK$3.623404/INR1.9975170

£15.994/$25.649

Interim 2011

7 October 2011

24.75c/15.81958125p/HK$1.928909813/INR1.13797125

£14.127/$23.140

Final 2011

15 May 2012

51.25c/31.63032125p/HK$3.9776083375/INR2.6667015

£15.723/$24.634

Interim 2012

11 October 2012

27.23c/16.799630190p/HK$2.111362463/INR1.349803950

£13.417/$21.041

Final 2012

14 May 2013

56.77c/36.5649893p/HK$4.4048756997/INR2.976283575

£17.40/$26.28792

Interim 2013

17 October 2013

28.80c/17.8880256p/HK$2.233204992/INR1.6813

£15.362/$24.07379

Final 2013

14 May 2014

57.20c/33.9211444p/HK$4.43464736/INR3.354626

£11.949/$19.815

Interim 2014

20 October 2014

28.80c/17.891107200p/HK$2.2340016000/INR1.671842560

£12.151/$20.207

Final 2014

14 May 2015

57.20c/37.16485p/HK$4.43329/INR3.514059

£9.797/$14.374

Interim 2015

19 October 2015

14.40c/9.3979152p/HK$1.115985456/INR0.86139372

£8.5226/$13.34383

Final 2015

No div

idend declared

N/A

Interim 2016

No div

idend declared

N/A

Final 2016

No div

idend declared

N/A

Interim 2017

No div

idend declared

N/A

Final 2017

17 May 2018

11.00c/7.88046p/HK$0.86293/INR0.653643340

£7.7600/$10.83451

Interim 2018

22 October 2018

6.00c/4.59747p/HK$0.46978/INR0.3696175

£6.7104/$8.51952

Final 2018

16 May 2019

15.00c/11.569905p/HK$1.176260/INR0.957691650

N/A

Interim 2019

21 October 2019

7.00c/5.676776p/HK$0.548723/INR0.425028600

N/A

Final 2019

Div

idend w

ithdrawn

N/A

Interim 2020

No div

idend declared

N/A

Final 2020

20 May 2021

9.00c/6.472413p/HK$0.698501

N/A

Interim 2021

22 October 2021

3.00c/2.204877p/HK$0.233592

N/A

Final 2021

12 May 2022

9.00c/6.894144p/HK$0.705772

N/A

Interim 2022

14 October 2022

4.00c/3.675912p/HK$0.313887

N/A

The INR div

idend

is per Indian Depository Receipt. In March 2020, the Group announced the terminat

ion of the IDR programme. The IDR programme was formally

delisted from the BSE Lim

ited (formerly the Bombay Stock Exchange) and Nat

ional Stock Exchange of India Lim

ited w

ith effect from 22 July 2020

Chinese translation

If you would like a Chinese version of the 2022 Annual Report

please contact Computershare Hong Kong Investor Services

Lim

ited, 17M Floor, Hopewell Centre, 183 Queen’s Road East,

Wan Chai, Hong Kong.

二〇二二年年報之中文譯本可向香港中央證券登記有限公司索取，

地址：香港灣仔皇后大道東183號合和中心17M樓。

Shareholders on the Hong Kong branch register who have

asked to receive corporate communicat

ions

in either Chinese

or English can change this election by contacting

Computershare.

If there is a dispute between any translation and the English

version of this Annual Report, the English text shall prevail.

Electronic communicat

ions

If you hold your shares on the UK register and in future you

would like to receive the Annual Report electronically rather

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498

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Shareholder informat

ion

Important notices

Forward-looking statements

The informat

ion

included in this document may contain

‘forward-looking statements’ based upon current

expectations or beliefs as well as statements formulated with

assumptions about future events. Forward-looking

statements include, without lim

itat

ion, project

ions, est

imates,

commitments, plans, approaches, ambit

ions and targets

(includ

ing, w

ithout lim

itat

ion, ESG commitments, ambit

ions

and targets). Forward-looking statements often use words

such as ‘may’, ‘could’, ‘will’, ‘expect’, ‘intend’, ‘estimate’,

‘antic

ipate’, ‘bel

ieve’, ‘plan’, ‘seek’, ‘aim’, ‘continue’ or other

words of sim

ilar mean

ing. Forward-looking statements may

also (or addit

ionally) be

ident

iﬁed by the fact that they do not

relate only to histor

ical or current facts.

By their very nature, forward-looking statements are subject

to known and unknown risks and uncertaint

ies and can be

affected by other factors that could cause actual results, and

the Group’s plans and objectives, to d

iffer materially from

those expressed or impl

ied

in the forward-looking statements.

Readers should not place reliance on, and are cautioned

about relying on, any forward-looking statements.

There are several factors which could cause actual results to

differ materially from those expressed or impl

ied

in forward-

looking statements. The factors that could cause actual

results to differ materially from those described in the

forward-looking statements include (but are not lim

ited to):

changes in global, polit

ical, econom

ic, business, competit

ive

and market forces or condit

ions, or

in future exchange and

interest rates; changes in environmental, geopolit

ical, soc

ial or

physical risks; legal,

regulatory and policy developments,

includ

ing regulatory measures address

ing climate change

and broader sustainab

ity-related issues; the development of

standards and interpretat

ions,

includ

ing evolv

ing

requirements and practices in Environmental, Social and

Governance reporting; the abil

ity of the Group, together w

ith

governments and other stakeholders to measure, manage,

and mit

igate the

impacts of climate change and broader

sustainab

ity-related issues effectively; risks aris

ing out of

health crises and pandemics; risks of cyber-attacks, data,

informat

ion or secur

ity breaches or technology failures

involv

ing the Group; changes

in tax rates, future business

combinat

ions or d

ispos

ions; and other factors specif

ic to the

Group, includ

ing those

ident

iﬁed

in this Annual Report and

ﬁnancial statements of the Group. Any forward-look

ing

statements contained in this document are based on past or

current trends and/or activ

ies of the Group and should not

be taken as a representation that such trends or activ

ies will

continue in the future.

No statement in this document is intended to be, nor should

be interpreted as, a proﬁt forecast or to imply that the

earnings of the Group for the current year or future years will

necessarily match or exceed the histor

ical or publ

ished

earnings of the Group. Except as required by any applicable

laws or regulations, the Group expressly discla

ims any

obligat

ion to rev

ise or update any forward-looking statement

contained with

in th

is document, regardless of whether those

statements are affected as a result of new informat

ion, future

events or otherwise.

Please refer to this document for a discuss

ion of certa

in of the

risks and factors that could adversely impact the Group’s

actual results, and its plans and object

ives, to d

iffer materially

from those expressed or impl

ied

in any forward-looking

statements.

Financ

ial

instruments

Nothing in this document shall constitute, in any jur

isd

ict

ion,

an offer or solic

itat

ion to sell or purchase any securit

ies or

other ﬁnancial

instruments, nor shall it constitute a

recommendation or advice in respect of any securit

ies or other

ﬁnancial

instruments or any other matter.

Basis of Preparation and Caution Regarding

Data Lim

itat

ions

This section is specif

ically relevant to, amongst others,

the sustainab

ity and climate models, calculations and

disclosures throughout this report.

The informat

ion conta

ined in this document has been

prepared on the following basis:

certain informat

ion

in this document is unaudited;

all informat

ion, pos

ions and statements set out

in this

document are subject to change without notice;

the informat

ion

included in this document does not

constitute any investment, accounting, legal, regulatory or

tax advice or an inv

itat

ion or recommendation to enter

into any transaction;

iv.

the informat

ion

included in this document may have been

prepared using models, methodologies and data which

are subject to certain lim

itat

ions. These lim

itat

ions include:

a lack of reliable data (due, amongst other things, to

developing measurement technologies and analytical

methodologies); a lack of standardisat

ion of data (g

iven,

amongst other things, the lack of internat

ional

coordinat

ion on data and methodology standards); and

future uncertainty (due, amongst other things, to

changing project

ions relat

ing to technological

development and global and regional laws, regulations

and polic

ies, and the

inab

ity to make use of strong

histor

ical data);

models, external data and methodologies used in

informat

ion

included in this document are or could be

subject to adjustment which is beyond our control;

vi.

any opin

ions and est

imates should be regarded as

ind

icat

ive, prelim

inary and for

illustrat

ive purposes only.

Expected and actual outcomes may differ from those set

out in this document (as explained in the “Forward-looking

statements” section);

i. some of the related

informat

ion appear

ing in this

document may have been obtained from public and other

sources and, while the Group believes such informat

ion to

be reliable, it has not been independently verif

ied by the

Group and no representation or warranty is made by the

Group as to its quality, completeness, accuracy, ﬁtness for

a particular purpose or non-infr

ingement of such

informat

ion;

i. for the purposes of the informat

ion

included in this

document, a number of key judgements and assumptions

have been made. It is possible that the assumptions

drawn, and the judgement exercised may subsequently

turn out to be inaccurate. The judgements and data

presented in this document are not a substitute for

judgements and analysis made independently by the

reader;

ix.

any opin

ions or v

iews of third parties expressed in this

document are those of the third parties ident

iﬁed, and not

of the Group, its afﬁl

iates, d

irectors, ofﬁcers, employees or

agents. By incorporating or referring to opin

ions and v

iews

of third parties, the Group is not, in any way, endorsing or

supporting such opin

ions or v

iews;

499

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

whilst the Group bears primary responsib

ity for the

informat

ion

included in this document, it does not accept

responsib

ity for the external input provided by any third

parties for the purposes of developing the informat

ion

included in this document;

xi.

the data contained in this document reﬂects available

informat

ion and est

imates at the relevant time;

i. where the Group has used any methodology or tools

developed by a third party, the applicat

ion of the

methodology or tools (or consequences of its applicat

ion)

shall not be interpreted as conﬂict

ing w

ith any legal or

contractual obligat

ions and such legal or contractual

obligat

ions shall take precedence over the appl

icat

ion of

the methodology or tools;

i. where the Group has used any underlying data provided

or sourced by a third party, the use of the data shall not be

interpreted as conﬂict

ing w

ith any legal or contractual

obligat

ions and such legal or contractual obl

igat

ions shall

take precedence over the use of the data;

xiv. this Important Notice is not lim

ited

in applicab

ity to those

sections of the document where lim

itat

ions to data,

metrics and methodologies are ident

iﬁed and where th

Important Notice is referenced. This Important Notice

applies to the whole document;

xv. further development of reporting, standards or other

princ

iples could

impact the informat

ion

included in this

document or any metrics, data and targets included in this

document (it being noted that Environmental, Social and

Governance reporting and standards are subject to rapid

change and development); and

xvi. while all reasonable care has been taken in preparing the

informat

ion

included in this document, neither the Group

nor any of its afﬁl

iates, d

irectors, ofﬁcers, employees or

agents make any representation or warranty as to its

quality, accuracy or completeness, and they accept no

responsib

ity or liab

ity for the contents of this

informat

ion,

includ

ing any errors of fact, om

iss

ion or

opin

ion expressed.

You are advised to exercise your own independent judgement

(with the advice of your professional advisers as necessary)

with respect to the risks and consequences of any matter

contained in this document.

The Group, its afﬁl

iates, d

irectors, ofﬁcers, employees or

agents expressly discla

im any l

iab

ity and responsib

ity for

any decis

ions or act

ions which you may take and for any

damage or losses you may suffer from your use of or reliance

on this informat

ion. Copyr

ight in all materials, text, articles

and informat

ion conta

ined in this document (other than third

party materials, text, articles and informat

ion)

is the property

of, and may only be reproduced with permiss

ion of an

authorised signatory of, the Group.

ion created

by third parties and the rights under copyright of such parties

are hereby acknowledged. Copyright in all other materials not

belonging to third parties and copyright in these materials as

a compilat

ion vests and shall rema

in at all times copyright of

the Group and should not be reproduced or used except for

business purposes on behalf of the Group or save with the

express prior written consent of an authorised signatory of the

500

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Awards

Main awards and accolades in 2022

AmCham CSR Excellence Awards by

American Chamber of Commerce in

Thailand

• Standard Chartered Recognised

–

12th Consecutive Year

Asian Banking and Finance Wholesale

Banking Awards

•

International Swift Init

iat

ive of the

Year, Singapore

•

International Data Init

iat

ive of the

Year, Singapore

Asiamoney Best

Bank Awards

• Best International

Bank, Bangladesh

•

Best ESG Bank, Hong Kong

•

Best ESG Bank, Vietnam

The Asset Triple A Awards

•

Best RMB Bank in 21 markets

•

Best Bond Adviser, Vietnam

•

Best Green Bond, Vietnam

•

Best in Treasury and Working Capital,

Taiwan

The Asset Triple A Treasury, Trade,

Sustainable Supply Chain, and Risk

Management Awards

•

Best Transaction Bank, Malaysia

•

Best Service Providers for Cash

Management in Sri Lanka

•

Best Service Providers for Trade

Finance, Sri Lanka

The Asset Triple A

Sustainable Investing

Awards

• Best Sub-Custodian

Bank, Phil

ipp

ines

The Asset Triple A Sustainable Capital

Markets Country Awards

•

Best Formosa Bond, Taiwan

The Asian Banker Excellence in Retail

Financ

ial Serv

ices Awards’

•

Best Dig

ital Bank

ing Services,

Hong Kong

•

Best Wealth Management, Ghana

The Asian Banker: Transaction Finance

Awards

•

Best International Supply Chain

Finance Bank, Asia Pacif

•

Most Sustainable Transaction Bank,

Asia Pacif

The Asian Banker: The Excellence in

Retail Financ

ial Serv

ices Awards

•

Most Recommended Retail Bank,

Taiwan

Asian Banking and Finance:

Retail Banking Awards

•

Employer Award of the Year,

Hong Kong

•

International Retail Bank of the Year,

Hong Kong

•

ESG Programme of the Year,

Hong Kong

Aviat

ion 100 M

iddle East, Africa &

Islamic Deals of the Year Awards

•

Bank of the Year, Middle East & Africa

•

Lease Deal of the Year, Middle East &

Africa

Bloomberg

Businessweek

Chinese Edit

ion

Financ

ial

Institut

ion Awards

•

Bank of the Year, Hong Kong

•

ESG Sustainab

ity Bank of the Year,

Hong Kong

•

Bank of the Year, Greater Bay Area

•

FinTech Bank of the Year, Greater Bay

Area

•

ESG Sustainab

ity Bank of the Year,

Greater Bay Area

The Banker’s Bank of the Year Awards

• Best Bank, Bangladesh

Corporate Treasurer Awards

•

Best Transaction Bank, Hong Kong

•

Best Trade Finance Bank, South Asia

•

Best Cash Management Bank,

Hong Kong

The Dig

ital Banker: D

ital CX Awards

•

Best Transaction Bank for Dig

ital CX,

United Kingdom

•

Best Islamic Bank, Malaysia

•

Best Transaction Bank for Dig

ital CX,

Globally

•

Best Wholesale/Transaction Bank for

Dig

ital CX, Un

ited Kingdom

Global Finance World’s Best Islamic

Financ

ial Inst

itut

ions

•

World’s Best Islamic Financ

ial

Institut

ion, Bangladesh

The Dig

ital Banker – Global Reta

Banking Innovation Awards

•

Winner – Outstanding Client

Onboarding & Account Opening,

India

•

Highly Acclaimed – Best ESG in

iat

ive,

India

•

Highly Acclaimed – Excellence in

Metaverse Investment, India

Euromoney Market Leaders

Recognit

ions

•

Corporate Banking Market Leader,

Hong Kong

•

SME Banking (Market Leader),

Hong Kong

•

ESG Market Leader, Hong Kong

EMEA Finance Achievement Awards

•

Best Export Credit Agency Syndicated

Loan and Best Structured Finance

Deal

Financ

ial T

imes Statista

•

Named one of Europe’s Climate

Leaders

501

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Forbes

•

World’s Best Banks in China

Global Retail Banking Innovation

Awards

•

Best Credit Card for BNPL, Singapore

•

Best Equity Trading Platform for

SmartStocks, Malaysia

Global Finance

Sustainable Finance

Awards

• Outstanding

Leadership in Social

Bonds, Western Europe

• Outstanding Sustainable

Financ

ing

in Emerging

Markets, Western Europe

Global Business Review

•

Best Foreign Bank, Vietnam – Second

Consecutive Year

Hong Kong Business High Flyers

Awards

•

Bank of the Year, Hong Kong

Human Rights Campaign Foundation’s

Corporate Equality Index

•

Received a Perfect Score, United

States – Fourth Consecutive Year

International Finance Awards

•

Best CSR Bank, Bangladesh

•

Best Dig

ital Bank, S

ingapore

Korea Best Banker Awards

•

The Financ

ial Superv

isory Service

Governor’s Award in the Best Social

contribut

ion Category

MEA Finance Awards 2022

•

Best Overall Wealth Management

Service, Middle East – Second

Consecutive Year

Metro Media & Hong Kong Quality

Assurance Agency

• Corporate Sustainab

ity Award,

Greater Bay Area

Private Banker International Awards

•

Outstanding Private Bank for

International Clients, United Kingdom

Retail Banker International: Asia

Trailblazer Awards

•

Best Retail Bank, Taiwan

Singapore Business Review Technology

Excellence Awards

•

Outstanding Artif

ial Intelligence on

Artif

ial Intelligence capabil

ity, Ind

•

Great Place to Work-Certif

ied™

Taiwan Enterprise Sustainab

ity

Awards: Corporate Comprehensive

Performance

• Foreign Companies Sustainab

ity

Model Award – Sixth Consecutive Year

Wealth Brief

ing MENA Awards

• Most Innovative Wealth

Management Model, MENA – Third

Consecutive Year

WealthBrief

ing European Awards

•

CPBB Europe, Best UK International

Clients Team, for the second year

running

•

Best UK Private Bank Talent

Management & Divers

ity

Wealth Brief

ing Channel Islands

Awards

•

Best Private Bank for ESG Investing

World Economic Magazine

•

Best Retail Bank Taiwan 2022 by

World Economic Magazine

UN Women 2022 Phil

ipp

ines Women

Empowerment Princ

iples (WEPs)

Awards

•

1st Runner Up, Gender-Inclusive

Workplace Category

Vietnam Economic Times

•

Leading Foreign Bank

Visa

•

Excellence in Consumer Credit Card

Business, Nepal

•

Excellence in Vas Products, Nepal

Divers

ity & Inclus

ion and

employer awards

Asiamoney

•

Best Bank for Divers

ity & Inclus

ion,

Taiwan

Brit

ish Chamber of Commerce

•

Divers

ity & Inclus

ion Champion of the

Year, Singapore

Brit

ish D

ivers

ity Awards

•

Highly Commended – Supplier

Divers

ity Programme of the Year,

Europe and Americas

Financ

ial T

imes

•

Listed as a Divers

ity Leader, Un

ited

Kingdom – Third Consecutive Year

Great Places to Work certif

ied

•

Poland – second consecutive year

•

Sri Lanka – fourth consecutive year

• United States

HR Asia

•

Best Companies to Work for in Asia,

Vietnam

Newsweek

•

Top 100 places to

work, US

Retail Banker International:

Asia Trailblazer Awards

•

Best Advance in Divers

ity and

Inclusion Init

iat

ives, Taiwan

•

Best Beneﬁts, Wellness and Wellbeing

Program, Taiwan

Top LinkedIn Companies

• Top Financ

ial Inst

itut

ion,

Singapore

• Ranked 2nd Overall,

Singapore – Second

Consecutive Year

WealthBrief

ing European Awards 2022

•

Best UK International Clients Team,

CPBB Europe – Second Consecutive

Year

•

Best Private Bank for Talent

Management & Divers

ity, Un

ited

Kingdom

Bloomberg Gender Equality Index

•

Recognised – Seventh Consecutive

Year

Forbes

• World’s Best Employer

502

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Glossary

Absolute ﬁnanced emiss

ions

A measurement of our attributed share

of our clients’ greenhouse gas emiss

ions.

AT1 or Addit

ional T

ier 1 capital

Addit

ional T

ier 1 capital consists of

instruments other than Common Equity

Tier 1 that meet the Capital

Requirements Regulation (as it forms

part of UK domestic law) criter

ia for

inclus

ion

in Tier 1 capital.

Addit

ional value adjustment

See Prudent valuation adjustment.

Advanced Internal Rating

Based (AIRB) approach

The AIRB approach under the Basel

framework is used to calculate credit risk

capital based on the Group’s own

estimates of prudential parameters.

Alternative performance

measures

A ﬁnancial measure of h

istor

ical or

future ﬁnancial performance, ﬁnancial

posit

ion, or cash ﬂows, other than a

ﬁnancial measure deﬁned or spec

ied

the applicable ﬁnanc

ial report

ing

framework.

ASEAN

Associat

ion of South East As

ian Nations

(ASEAN) which includes the Group’s

operations in Brunei, Indonesia,

Malaysia, Phil

ipp

ines, Singapore,

Thailand and Vietnam.

AUM or Assets under

management

Total market value of assets such as

deposits, securit

ies and funds held by

the Group on behalf of the clients.

Basel II

The capital adequacy framework issued

by the Basel Committee on Banking

Supervis

ion (BCBS)

in June 2006 in the

form of the International Convergence

of Capital Measurement and Capital

Standards.

Basel III

The global regulatory standards on

bank capital adequacy and liqu

ity,

orig

inally

issued in December 2010 and

updated in June 2011. In December 2017,

the BCBS published a document setting

out the ﬁnalisat

ion of the Basel III

framework. The latest requirements

issued in December 2017 will be

implemented from 2022.

BCBS or Basel Committee on

Banking Supervis

ion

A forum on banking supervisory matters

which develops global supervisory

standards for the banking industry. Its

members are ofﬁcials from 45 central

banks or prudential supervisors from 27

countries and territor

ies.

Basic earnings per share (EPS)

Represents earnings div

ided by the

basic weighted average number of

shares.

Basis point (bps)

One hundredth of a per cent (0.01 per

cent); 100 basis points is 1 per cent.

CRD or Capital Requirements

Direct

ive

A capital adequacy legislat

ive package

adopted by the PRA. CRD comprises the

Capital Requirements Direct

ive and the

UK onshored Capital Requirements

Regulation (CRR). The package

implements the Basel III framework

together with transit

ional arrangements

for some of its requirements. CRD IV

came into force on 1 January 2014. The

EU CRR II and CRD V amending the

exist

ing package came

into force in

June 2019 with most changes starting to

apply from 28 June 2021. Only those

parts of the EU CRR II that applied on or

before 31 December 2020, when the UK

was a member of the EU, have been

implemented. The PRA recently ﬁnal

ised

the UK’s version of the CRR II for

implementat

ion on 1 January 2022.

Capital-lite income

Income derived from products with low

RWA consumption or products which

are non-funding in nature.

Capital resources

Sum of Tier 1 and Tier 2 capital after

regulatory adjustments.

CGU or Cash-generating unit

The smallest ident

iﬁable group of assets

that generates cash inﬂows that are

largely independent of the cash inﬂows

from other assets or groups of assets.

Cash shortfall

The difference between the cash ﬂows

that are due in accordance with the

contractual terms of the instrument and

the cash ﬂows that the Group expects to

receive over the contractual life of the

instrument.

Clawback

An amount an ind

idual is required to

pay back to the Group, which has to be

returned to the Group under certain

circumstances.

Commercial real estate

Includes ofﬁce build

ings,

industr

ial

property, medical centres, hotels, malls,

retail stores, shopping centres, farm

land, multi-family housing build

ings,

warehouses, garages and industr

ial

properties. Commercial real estate loans

are those backed by a package of

commercial real estate assets.

CET1 or Common Equity Tier 1

capital

Common Equity Tier 1 capital consists of

the common shares issued by the Group

and related share premium, retained

earnings, accumulated other

comprehensive income and other

disclosed reserves, elig

ible non-

controlling interests and regulatory

adjustments required in the calculation

of Common Equity Tier 1.

CET1 ratio

A measure of the Group’s CET1 capital

as a percentage of risk-weighted assets.

Contractual maturity

Contractual maturity refers to the ﬁnal

payment date of a loan or other

ﬁnancial

instrument, at which point all

the remain

ing outstand

ing princ

ipal

and interest is due to be paid.

Countercyclical capital buffer

The countercyclical capital buffer

(CCyB) is part of a set of

macroprudential instruments, designed

to help counter procyclical

ity

in the

ﬁnancial system. CCyB as deﬁned

in the

Basel III standard provides for an

addit

ional cap

ital requirement of up to

2.5 per cent of risk-weighted assets in a

given jur

isd

ict

ion. The Bank of England’s

Financ

ial Pol

icy Committee has the

power to set the CCyB rate for the

United Kingdom. Each bank must

calculate its ‘inst

itut

ion-specif

ic’ CCyB

rate, deﬁned as the weighted average

of the CCyB rates in effect across the

jurisd

ict

ions

in which it has credit

exposures. The inst

itut

ion-specif

ic CCyB

rate is then applied to a bank’s total

risk-weighted assets.

503

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Counterparty credit risk

The risk that a counterparty defaults

before satisfy

ing

its obligat

ions under a

derivat

ive, a secur

ies ﬁnancing

transaction (SFT) or a sim

ilar contract.

CCF or Credit conversion factor

An estimate of the amount the Group

expects a customer to have drawn

further on a facil

ity l

it at the po

int of

default. This is either prescribed by CRR

or modelled by the bank.

CDS or Credit default swaps

A credit derivat

ive

is an arrangement

whereby the credit risk of an asset (the

reference asset) is transferred from the

buyer to the seller of protection. A credit

default swap is a contract where the

protection seller receives premium or

interest-related payments in return for

contracting to make payments to the

protection buyer upon a deﬁned credit

event. Credit events normally include

bankruptcy, payment default on a

reference asset or assets, or

downgrades by a rating agency.

Credit inst

itut

ions

An inst

itut

ion whose business is to

receive deposits or other repayable

funds from the public and to grant

credits for its own account.

Credit risk mit

igat

ion

Credit risk mit

igat

ion is a process to

mit

igate potent

ial credit losses from any

given account, customer or portfolio by

using a range of tools such as collateral,

netting agreements, credit insurance,

credit derivat

ives and guarantees.

CVA or Credit valuation

adjustments

An adjustment to the fair value of

derivat

ive contracts that reﬂects the

possib

ity that the counterparty may

default such that the Group would not

receive the full market value of the

contracts.

Customer accounts

Money deposited by all ind

iduals and

companies which are not credit

inst

itut

ions includ

ing secur

ies sold

under repurchase agreement (see repo/

reverse repo). Such funds are recorded

as liab

ies

in the Group’s balance sheet

under customer accounts.

Days past due

One or more days that interest and/or

princ

ipal payments are overdue based

on the contractual terms.

DVA or Debit valuation

adjustment

An adjustment to the fair value of

derivat

ive contracts that reﬂects the

possib

ity that the Group may default

and not pay the full market value of

contracts.

Debt securit

ies

Debt securit

ies are assets on the Group’s

balance sheet and represent certif

icates

of indebtedness of credit inst

itut

ions,

public bodies or other undertakings

excluding those issued by central banks.

Debt securit

ies

in issue

Debt securit

ies

in issue are transferable

certif

icates of

indebtedness of the

Group to the bearer of the certif

icate.

These are liab

ies of the Group and

include certif

icates of depos

its.

Deferred tax asset

Income taxes recoverable in future

periods in respect of deductible

temporary differences between the

accounting and tax base of an asset or

liab

ity that will result in tax deductible

amounts in future periods, the carry-

forward of tax losses or the carry-

forward of unused tax credits.

Deferred tax liab

ity

Income taxes payable in future periods

in respect of taxable temporary

differences between the accounting

and tax base of an asset or liab

ity that

will result in taxable amounts in future

periods.

Default

Financ

ial assets

in default represent

those that are at least 90 days past due

in respect of princ

ipal or

interest and/or

where the assets are otherwise

considered to be unlikely to pay,

includ

ing those that are cred

it-impa

ired.

Deﬁned beneﬁt obligat

ion

The present value of expected future

payments required to settle the

obligat

ions of a deﬁned beneﬁt scheme

resulting from employee service.

Deﬁned beneﬁt scheme

Pension or other post-retirement beneﬁt

scheme other than a deﬁned

contribut

ion scheme.

Deﬁned contribut

ion scheme

A pension or other post-retirement

beneﬁt scheme where the employer’s

obligat

ion

is lim

ited to

its contribut

ions

to the fund.

Delinquency

A debt or other ﬁnancial obl

igat

ion

considered to be in a state of

delinquency when payments are

overdue. Loans and advances are

considered to be delinquent when

consecutive payments are missed. Also

known as arrears.

Deposits by banks

Deposits by banks comprise amounts

owed to other domestic or foreign credit

inst

itut

ions by the Group includ

ing

securit

ies sold under repo.

Diluted earnings per share (EPS)

Represents earnings div

ided by the

weighted average number of shares

that would have been outstanding

assuming the conversion of all dilut

ive

potential ordinary shares.

Div

idend per share

Represents the entitlement of each

shareholder in the share of the proﬁts of

the Company. Calculated in the lowest

unit of currency in which the shares are

quoted.

Early alert, purely and non-

purely precautionary

A borrower’s account which exhib

its r

isks

or potential weaknesses of a material

nature requir

ing closer mon

itor

ing,

supervis

ion or attent

ion by

management. Weaknesses in such a

borrower’s account, if left uncorrected,

could result in deteriorat

ion of

repayment prospects and the likel

ihood

of being downgraded to credit grade 12

or worse. When an account is on early

alert, it is classif

ied as e

ither purely

precautionary or non-purely

precautionary. A purely precautionary

account is one that exhib

its early alert

characterist

ics, but these do not present

any imm

inent cred

it concern. If the

symptoms present an imm

inent cred

concern, an account will be considered

for classif

icat

ion as non-purely

precautionary.

Effective tax rate

The tax on proﬁt/(losses) on ordinary

activ

ies as a percentage of proﬁt/

(loss) on ordinary activ

ies before

taxation.

Encumbered assets

On-balance sheet assets pledged or

used as collateral in respect of certain of

the Group’s liab

ies.

504

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Glossary

EU or European Union

The European Union (EU) is a polit

ical

and economic union of 27 member

states that are located primar

ily

Europe.

Eurozone

Represents the 19 EU countries that have

adopted the euro as their common

currency.

ECL or Expected credit loss

Represents the present value of

expected cash shortfalls over the

residual term of a ﬁnanc

ial asset,

undrawn commitment or ﬁnanc

ial

guarantee.

Expected loss

The Group measure of antic

ipated loss

for exposures captured under an

internal ratings-based credit risk

approach for capital adequacy

calculations. It is measured as the

Group-modelled view of antic

ipated

loss based on probabil

ity of default, loss

given default and exposure at default,

with a one-year time horizon.

Exposures

Credit exposures represent the amount

lent to a customer, together with any

undrawn commitments.

EAD or Exposure at default

The estimat

ion of the extent to wh

ich

the Group may be exposed to a

customer or counterparty in the event of,

and at the time of, that counterparty’s

default. At default, the customer may

not have drawn the loan fully or may

already have repaid some of the

princ

ipal, so that exposure

is typically

less than the approved loan lim

it.

ECAI or External Credit

Assessment Institut

ion

External credit ratings are used to assign

risk-weights under the standardised

approach for sovereigns, corporates

and inst

itut

ions. The external ratings are

from credit rating agencies that are

registered or certif

ied

in accordance

with the credit rating agencies

regulation or from a central bank issu

ing

credit ratings which is exempt from the

applicat

ion of th

is regulation.

ESG

Environmental, Social and Governance.

FCA or Financ

ial Conduct

Authority

The Financ

ial Conduct Author

ity

regulates the conduct of ﬁnancial ﬁrms

and, for certain ﬁrms, prudential

standards in the UK. It has a strategic

objective to ensure that the relevant

markets function well.

Forbearance

Forbearance takes place when a

concession is made to the contractual

terms of a loan in response to an

obligor’s ﬁnanc

ial d

iff

icult

ies. The Group

classif

ies such mod

ied loans as e

ither

‘Forborne – not impa

ired loans’ or ‘Loans

subject to forbearance – impa

ired’. Once

a loan is categorised as either of these, it

will remain in one of these two

categories until the loan matures or

satisf

ies the ‘cur

ing’ condit

ions descr

ibed

in Note 8 to the ﬁnanc

ial statements.

Forborne – not impa

ired loans

Loans where the contractual terms have

been modif

ied due to ﬁnancial

diff

icult

ies of the borrower, but the loan

is not considered to be impa

ired. See

‘Forbearance’.

Funded/unfunded exposures

Exposures where the notional amount

of the transaction is funded or

unfunded. Represents exposures where

a commitment to provide future funding

is made but funds have been released/

not released.

FVA or Funding valuation

adjustments

FVA reﬂects an adjustment to fair value

in respect of derivat

ive contracts that

reﬂects the funding costs that the

market partic

ipant would

incorporate

when determin

ing an ex

it price.

G-SIBs or Global Systemically

Important Banks

Global banking ﬁnanc

ial

inst

itut

ions

whose size, complexity and systemic

interconnectedness mean that their

distress or failure would cause sign

iﬁcant

disrupt

ion to the w

ider ﬁnanc

ial system

and economic activ

ity. The l

ist of G-SIBs

is assessed under a framework

established by the FSB and the BCBS. In

the UK, the G-SIB framework is

implemented via the CRD and G-SIBs

are referred to as Global Systemically

Important Institut

ions (G-SIIs).

G-SIB buffer

A CET1 capital buffer which results from

designat

ion as a G-SIB. The G-SIB buffer

is between 1 per cent and 3.5 per cent,

depending on the allocation to one of

ﬁve buckets based on the annual

scoring. In the UK, the G-SIB buffer is

implemented via the CRD as Global

Systemically Important Institut

ions

(G-SII) buffer requirement.

Green and Sustainable Product

Framework

Sets out underlying elig

ible qual

ify

ing

themes and activ

ies that may be

considered ESG .This has been

developed with the support of external

experts, has been informed by industry

and supervisory princ

iples and

standards such as the Green Bond

Princ

iples and EU Taxonomy for

sustainable activ

ies.

Hong Kong regional hub

Standard Chartered Bank (Hong Kong)

Lim

ited and

its subsid

iar

ies includ

ing the

primary operating entit

ies

in China,

Korea and Taiwan. Standard Chartered

PLC is the ultimate parent company of

Standard Chartered Bank (Hong Kong)

Lim

ited.

Interest rate risk

The risk of an adverse impact on the

Group’s income statement due to

changes in interest rates.

IRB or internal ratings-based

approach

Risk-weight

ing methodology

accordance with the Basel Capital

Accord where capital requirements are

based on a ﬁrm’s own estimates of

prudential parameters.

Internal model approach

The approach used to calculate market

risk capital and RWA with an internal

market risk model approved by the PRA

under the terms of CRD/CRR.

IAS or International Accounting

Standard

A standard that forms part of the

International Financ

ial Report

ing

Standards framework.

505

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

IASB or International

Accounting Standards Board

An independent standard-setting body

responsible for the development and

publicat

ion of IFRS, and approv

ing

interpretat

ions of IFRS standards that

are recommended by the IFRS

Interpretations Committee (IFRIC).

IFRS or International Financ

ial

Reporting Standards

A set of internat

ional account

ing

standards developed and issued by the

International Accounting Standards

Board, consist

ing of pr

inc

iples-based

guidance contained with

in IFRSs and

IASs. All companies that have issued

publicly traded securit

ies

in the EU are

required to prepare annual and inter

reports under IFRS and IAS standards

that have been endorsed by the EU.

IFRIC

The IFRS Interpretations Committee

supports the IASB in provid

ing

authoritat

ive gu

idance on the

accounting treatment of issues not

specif

ically dealt w

ith by exist

ing IFRSs

and IASs.

Income return on risk weighted

assets (IRoRWA)

Annualised Income excluding Debit

Valuation Adjustment as a percentage

of Average RWA.

Investment grade

A debt security, treasury bill or sim

ilar

instrument with a credit rating

measured by external agencies of AAA

to BBB.

Leverage ratio

A ratio introduced under CRD IV that

compares Tier 1 capital to total

exposures, includ

ing certa

in exposures

held off-balance sheet as adjusted by

stipulated credit conversion factors.

Intended to be a simple, non-risk-based

backstop measure.

Liqu

idat

ion portfolio

A portfolio of assets which is beyond our

current risk appetite metrics and is held

for liqu

idat

ion.

LCR or Liqu

ity coverage ratio

The ratio of the stock of high-quality

liqu

id assets to expected net cash

outﬂows over the following 30 days.

High-quality liqu

id assets should be

unencumbered, liqu

in markets during

a time of stress and, ideally, be central

bank elig

ible.

Loan exposure

Loans and advances to customers

reported on the balance sheet held at

amortised cost or FVOCI, non-

cancellable credit commitments and

cancellable credit commitments for

credit cards and overdraft facil

ies.

Loans and advances to

customers

This represents lending made under

bilateral agreements with customers

entered into in the normal course of

business and is based on the legal form

of the instrument.

Loans and advances to banks

Amounts loaned to credit inst

itut

ions

includ

ing secur

ies bought under

Reverse repo.

LTV or loan-to-value ratio

A calculation which expresses the

amount of a ﬁrst mortgage lien as a

percentage of the total appraised value

of real property. The loan-to-value ratio

is used in determin

ing the appropr

iate

level of risk for the loan and therefore

the correct price of the loan to the

borrower.

Loans past due

Loans on which payments have been

due for up to a maximum of 90 days

includ

ing those on wh

ich partial

payments are being made.

Loans subject to forbearance –

impa

ired

Loans where the terms have been

renegotiated on terms not consistent

with current market levels due to

ﬁnancial d

iff

icult

ies of the borrower.

Loans in this category are necessarily

impa

ired. See ‘Forbearance’.

Loss rate

Uses an adjusted gross charge-off rate,

developed using monthly write-off and

recoveries over the preceding 12 months

and total outstanding balances.

LGD or Loss given default

The percentage of an exposure that a

lender expects to lose in the event of

obligor default.

Low returning clients

See ‘Perennial sub-optimal clients’.

Malus

An arrangement that permits the Group

to prevent vesting of all or part of the

amount of an unvested variable

remuneration award, due to a specif

crystallised risk, behaviour, conduct or

adverse performance outcome.

Master netting agreement

An agreement between two

counterparties that have multiple

derivat

ive contracts w

ith each other

that provides for the net settlement of

all contracts through a single payment,

in a single currency, in the event of

default on, or terminat

ion of, any one

contract.

Mezzanine capital

Financ

ing that comb

ines debt and

equity characterist

ics. For example, a

loan that also confers some proﬁt

partic

ipat

ion to the lender.

MREL or min

imum requ

irement

for own funds and elig

ible

liab

ies

A requirement under the Bank Recovery

and Resolution Direct

ive for EU

resolution authorit

ies to set a m

imum

requirement for own funds and elig

ible

liab

ies for banks,

implement

ing the

FSB’s Total Loss Absorbing Capacity

(TLAC) standard. MREL is intended to

ensure that there is sufﬁc

ient equ

ity and

specif

ic types of l

iab

ies to fac

itate an

orderly resolution that min

ises any

impact on ﬁnanc

ial stab

ity and ensures

the continu

ity of cr

ical funct

ions and

avoids exposing taxpayers to loss.

Net asset value (NAV) per share

Ratio of net assets (total assets less total

liab

ies) to the number of ord

inary

shares outstanding at the end of a

reporting period.

Net exposure

The aggregate of loans and advances

to customers/loans and advances to

banks after impa

irment prov

ions,

restricted balances with central banks,

derivat

ives (net of master nett

ing

agreements), investment debt and

equity securit

ies, and letters of cred

and guarantees.

Net zero

The commitment to reaching net zero

carbon emiss

ions from our operat

ions

by 2025 and from our ﬁnancing by 2050.

NII or Net interest income

The difference between interest

received on assets and interest paid on

liab

ies.

506

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Glossary

NSFR or Net stable funding ratio

The ratio of available stable funding to

required stable funding over a one-year

time horizon, assuming a stressed

scenario. It is a longer-term liqu

ity

measure designed to restrain the

amount of wholesale borrowing and

encourage stable funding over a

one-year time horizon.

NPLs or non-performing loans

An NPL is any loan that is more than 90

days past due or is otherwise

ind

idually impa

ired. Th

is excludes

Retail loans renegotiated at or after 90

days past due, but on which there has

been no default in interest or princ

ipal

payments for more than 180 days since

renegotiat

ion, and aga

inst which no loss

of princ

ipal

is expected.

Non-linear

ity

Non-linear

ity of expected cred

it loss

occurs when the average of expected

credit loss for a portfolio is higher than

the base case (median) due to the fact

that bad economic environment could

have a larger impact on ECL calculation

than good economic environment.

Normalised items

See ‘Underlying/Normalised’ on page

131.

Operating expenses

Staff and premises costs, general and

admin

istrat

ive expenses, depreciat

ion

and amortisat

ion. Underly

ing operating

expenses exclude expenses as

described in ‘Underlying earnings’. A

reconcil

iat

ion between underlying and

statutory earnings is contained in Note

2 to the ﬁnancial statements.

Operating income or operating

proﬁt

Net interest, net fee and net trading

income, as well as other operating

income. Underlying operating income

represents the income line items above,

on an underlying basis. See ‘Underlying

earnings’.

OTC or Over-the-counter

derivat

ives

A bilateral transaction (e.g. derivat

ives)

that is not exchange traded and that is

valued using valuation models.

OCA or Own credit adjustment

An adjustment to the Group’s issued

debt designated at fair value through

proﬁt or loss that reﬂects the possib

ity

that the Group may default and not pay

the full market value of the contracts.

Perennial sub-optimal clients

Clients that have returned below 3 per

cent return on risk-weighted assets for

the past three years.

Physical risks

The risk of increased extreme weather

events includ

ing ﬂood, drought and sea

level rise.

Pillar 1

The ﬁrst pillar of the three pillars of the

Basel framework which provides the

approach to calculation of the min

imum

capital requirements for credit, market

and operational risk. Min

imum cap

ital

requirements are 8 per cent of the

Group’s risk-weighted assets.

Pillar 2

The second pillar of the three pillars of

the Basel framework which requires

banks to undertake a comprehensive

assessment of their risks and to

determine the appropriate amounts of

capital to be held against these risks

where other suitable mit

igants are not

available.

Pillar 3

The third pillar of the three pillars of the

Basel framework which aims to provide

a consistent and comprehensive

disclosure framework that enhances

comparabil

ity between banks and

further promotes improvements in risk

practices.

Prior

ity Bank

ing

Prior

ity Bank

ing customers are

ind

iduals who have met certain criter

for deposits, AUM, mortgage loans or

monthly payroll. Criter

ia vary by country.

Private equity investments

Equity securit

ies

in operating companies

generally not quoted on a public

exchange. Investment in private equity

often involves the investment of capital

in private companies. Capital for private

equity investment is raised by retail or

inst

itut

ional investors and used to fund

investment strategies such as leveraged

buyouts, venture capital, growth capital,

distressed investments and mezzanine

capital.

PD or Probabil

ity of default

PD is an internal estimate for each

borrower grade of the likel

ihood that an

obligor will default on an obligat

ion over

a given time horizon.

Probabil

ity we

ighted

Obtained by consider

ing the values the

metric can assume, weighted by the

probabil

ity of each value occurr

ing.

Proﬁt (loss) attributable to

ordinary shareholders

Proﬁt (loss) for the year after non-

controlling interests and div

idends

declared in respect of preference shares

classif

ied as equ

ity.

PVA or Prudent valuation

adjustment

An adjustment to CET1 capital to reﬂect

the difference between fair value and

prudent value posit

ions, where the

applicat

ion of prudence results

in a

lower absolute carrying value than

recognised in the ﬁnanc

ial statements.

PRA or Prudential Regulation

Authority

The Prudential Regulation Authority is

the statutory body responsible for the

prudential supervis

ion of banks, bu

ild

ing

societ

ies, cred

it unions, insurers and a

small number of sign

iﬁcant

investment

ﬁrms in the UK. The PRA is a part of the

Bank of England.

Revenue-based carbon intens

ity

A measurement of the quantity of

greenhouse gases emitted by our clients

per USD of their revenue.

Regulatory consolidat

ion

The regulatory consolidat

ion of

Standard Chartered PLC differs from the

statutory consolidat

ion

in that it

includes Ascenta IV, Olea Global group,

Seychelles International Mercantile

Banking Corporation Lim

ited., and all of

the legal entit

ies

in the Currency Fair

group on a proportionate consolidat

ion

basis. These entit

ies are cons

idered

associates for statutory accounting

purposes.

The regulatory consolidat

ion further

excludes the following entit

ies, wh

ich

are consolidated for statutory

accounting purposes: Audax Financ

ial

Technology Pte. Ltd, Cardspal Pte. Ltd,

Letsbloom Pte. Ltd, SCV Research and

Development Pte. Ltd., Standard

Chartered Assurance Lim

ited, Standard

Chartered Isle of Man Lim

ited, Corras

Covered Bonds LLP, Pegasus

Dealmaking Pte. Ltd., Solv Sdn. Bhd.,

Standard Chartered Botswana

Education Trust, Standard Chartered

Bancassurance Intermediary Lim

ited,

Standard Chartered Bank Insurance

Agency (Proprietary) Lim

ited, Solvezy

Technology Kenya Lim

ited, Standard

Chartered Trading (Shanghai) Lim

ited,

Tawi Fresh Kenya Lim

ited.

507

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Repo/reverse repo

A repurchase agreement or repo is a

short-term funding agreement, which

allows a borrower to sell a ﬁnancial

asset, such as asset-backed securit

ies or

government bonds as collateral for

cash. As part of the agreement the

borrower agrees to repurchase the

security at some later date, usually less

than 30 days, repaying the proceeds of

the loan. For the party on the other end

of the transaction (buying the security

and agreeing to sell in the future), it is a

reverse repurchase agreement or

reverse repo.

Resident

ial mortgage

A loan to purchase a resident

ial

property which is then used as collateral

to guarantee repayment of the loan.

The borrower gives the lender a lien

against the property, and the lender can

foreclose on the property if the borrower

does not repay the loan per the agreed

terms. Also known as a home loan.

RoRWA or Return on risk-

weighted assets

Proﬁt before tax for year as a

percentage of RWA. Proﬁt may be

statutory or underlying and is specif

ied

where used. See ‘RWA’ and ‘Underlying

earnings’.

RWA or Risk-weighted assets

A measure of a bank’s assets adjusted

for their associated risks, expressed as a

percentage of an exposure value in

accordance with the applicable

standardised or IRB approach

provis

ions.

Risks-not-in-VaR (RNIV)

A framework for ident

ify

ing and

quantify

ing marg

inal types of market

risk that are not captured in the Value at

Risk (VaR) measure for any reason, such

as being a far-tail risk or the necessary

histor

ical market data not be

ing

available.

Roll rate

Uses a matrix that gives average loan

migrat

ion rate from del

inquency states

from period to period. A matrix

multipl

icat

ion is then performed to

generate the ﬁnal PDs by delinquency

bucket over different time horizons.

Scope 1 emiss

ions

Arise from the consumption of energy

from direct sources during the use of

property occupied by the Group. On-site

combustion of fuels such as diesel,

liquef

ied petroleum gas and natural gas

is recorded using meters or, where

metering is not available, collated from

fuel vendor invo

ices. Em

iss

ions from the

combustion of fuel in Group-operated

transportation devices, as well as

fugit

ive em

iss

ions, are excluded as be

ing

immater

ial.

Scope 2 emiss

ions

Arise from the consumption of ind

irect

sources of energy during the use of

property occupied by the Group. Energy

generated off-site in the form of

purchased electric

ity, heat, steam or

cooling is collected as kilowatt hours

consumed using meters or, where

metering is not available, collated from

vendor invo

ices. For leased propert

ies

we include all ind

irect and d

irect sources

of energy consumed by build

ing serv

ices

(amongst other activ

ies) with

in the

space occupied by the Group. This can

include base build

ing serv

ices under

landlord control but over which we

typically hold a reasonable degree of

inﬂuence. All data centre facil

ies with

condit

ion

ing systems and hardware

remain

ing under the operat

ional control

of the Group are included in the

reporting. This does not include energy

used at outsourced data centre facil

ies

which are captured under Scope 3.

Scope 3 emiss

ions

Occur as a consequence of the Group’s

activ

ies but aris

ing from sources not

controlled by the Group. Business air

travel data is collected as person

kilometres travelled by seating class by

employees of the Group. Data are

drawn from country operations that

have processes in place to gather

accurate employee air travel data from

travel management companies. Flights

are categorised as short, medium or

long haul trips. Emiss

ions from other

potential Scope 3 sources such as

electric

ity transm

iss

ion and d

istr

ibut

ion

line losses are not currently accounted

for on the basis that they cannot be

calculated with an acceptable level of

reliab

ity or consistency. The Group does

however capture Scope 3 emiss

ions from

outsourced data centres managed by

third parties.

Secured (fully and partially)

A secured loan is a loan in which the

borrower pledges an asset as collateral

for a loan which, in the event that the

borrower defaults, the Group is able to

take possession of. All secured loans are

considered fully secured if the fair value

of the collateral is equal to or greater

than the loan at the time of orig

inat

ion.

All other secured loans are considered

to be partly secured.

Securit

isat

ion

Securit

isat

ion is a process by which

credit exposures are aggregated into a

pool, which is used to back new

securit

ies. Under trad

ional

securit

isat

ion transactions, assets are

sold to a structured entity which then

issues new securit

ies to

investors at

different levels of senior

ity (cred

tranching). This allows the credit quality

of the assets to be separated from the

credit rating of the orig

inat

ing inst

itut

ion

and transfers risk to external investors in

a way that meets their risk appetite.

Under synthetic securit

isat

ion

transactions, the transfer of risk is

achieved by the use of credit derivat

ives

or guarantees, and the exposures being

securit

ised rema

in exposures of the

orig

inat

ing inst

itut

ion.

Senior debt

Debt that takes prior

ity over other

unsecured or otherwise more ‘jun

ior’

debt owed by the issuer. Senior debt has

greater senior

ity

in the issuer’s capital

structure than subordinated debt. In the

event the issuer goes bankrupt, senior

debt theoretically must be repaid before

other creditors receive any payment.

SICR or Sign

iﬁcant

increase in

credit risk

Assessed by comparing the risk of

default of an exposure at the reporting

date to the risk of default at orig

inat

ion

(after consider

ing the passage of t

ime).

Solo

The solo regulatory group as deﬁned in

the Prudential Regulation Authority

waiver letter dated 10 August 2020

differs from Standard Chartered Bank

Company in that it includes the full

consolidat

ion of n

ine subsid

iar

ies,

namely Standard Chartered Holdings

(International) B.V., Standard Chartered

MB Holdings B.V., Standard Chartered

UK Holdings Lim

ited, Standard

Chartered Grindlays PTY Lim

ited, SCMB

Overseas Lim

ited, Standard Chartered

Capital Management (Jersey) LLC,

Cerulean Investments L.P., SC Ventures

Innovation Investment L.P. and SC

Ventures G.P. Lim

ited.

Sovereign exposures

Exposures to central governments and

central government departments,

central banks and entit

ies owned or

guaranteed by the aforementioned.

Sovereign exposures, as deﬁned by the

European Banking Authority, include

only exposures to central governments.

508

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Glossary

Stage 1

Assets have not experienced a

sign

iﬁcant

increase in credit risk since

orig

inat

ion and impa

irment recogn

ised

on the basis of 12 months expected

credit losses.

Stage 2

Assets have experienced a sign

iﬁcant

increase in credit risk since orig

inat

ion

and impa

irment

is recognised on the

basis of lifet

ime expected cred

it losses.

Stage 3

Assets that are in default and

considered credit-impa

ired (non-

performing loans).

Standardised approach

In relation to credit risk, a method for

calculating credit risk capital

requirements using External Credit

Assessment Institut

ions (ECAI) rat

ings

and supervisory risk weights. In relation

to operational risk, a method of

calculating the operational capital

requirement by the applicat

ion of a

supervisory deﬁned percentage charge

to the gross income of eight specif

ied

business lines.

Structured note

An investment tool which pays a return

linked to the value or level of a specif

ied

asset or index and sometimes offers

capital protection if the value declines.

Structured notes can be linked to

equit

ies,

interest rates, funds,

commodit

ies and fore

ign currency.

Subordinated liab

ies

Liab

ies wh

ich, in the event of

insolvency or liqu

idat

ion of the issuer,

are subordinated to the claims of

depositors and other creditors of the

issuer.

Sustainab

ity Aspirat

ions

A series of targets and metrics by which

we aim to promote social and economic

development, and deliver sustainable

outcomes in the areas in which we can

make the most material contribut

ion to

the delivery of the UN Sustainable

Development Goals.

Sustainable Finance assets

Assets from clients whose activ

ies are

aligned with the Green and Sustainable

Product Framework and/or from

transactions for which the use of

proceeds will be util

ised d

irectly to

contribute towards elig

ible themes and

activ

ies set out with

in the Green and

Sustainable Product Framework.

Sustainable Finance revenue

Revenue from clients whose activ

ies

are aligned with the Green and

Sustainable Product Framework and/or

from transactions for which proceeds

will be util

ised d

irectly to contribute

towards elig

ible themes and act

ies

set out with

in the Green and

Sustainable Product Framework and/or

from approved ‘labelled’ transactions

such as any transaction referred to as

“green”, “social”, “sustainable”, “SDG

(sustainable development goal)

aligned”, “ESG”, “transit

ion”, “COVID-19

facil

ity” or “COVID-19 response” wh

ich

have been approved by the Sustainable

Finance Governance Committee.

Tier 1 capital

The sum of Common Equity Tier 1 capital

and Addit

ional T

ier 1 capital.

Tier 1 capital ratio

Tier 1 capital as a percentage of

risk-weighted assets.

Tier 2 capital

Tier 2 capital comprises qualify

ing

subordinated liab

ies and related

share premium accounts.

TLAC or Total loss absorbing

capacity

An internat

ional standard for TLAC

issued by the FSB, which requires G-SIBs

to have sufﬁcient loss-absorb

ing and

recapital

isat

ion capacity available in

resolution, to min

ise impacts on

ﬁnancial stab

ity, ma

inta

in the

continu

ity of cr

ical funct

ions and avoid

exposing public funds to loss.

Transit

ion r

isks

The risk of changes to market dynamics

or sectoral economics due to

governments’ response to climate

change.

UK bank levy

A levy that applies to certain UK banks

and the UK operations of foreign banks.

The levy is payable each year based on

a percentage of the chargeable equit

ies

and liab

ies on the Group’s UK tax

resident entit

ies’ balance sheets. Key

exclusions from chargeable equit

ies and

liab

ies

include Tier 1 capital, insured or

guaranteed retail deposits, repos

secured on certain sovereign debt and

liab

ies subject to nett

ing.

Unbiased

Not overly optim

ist

ic or pessim

ist

ic,

represents informat

ion that

is not

slanted, weighted, emphasised,

de-emphasised or otherwise

manipulated to increase the probabil

ity

that the ﬁnancial

informat

ion w

ill be

received favourably or unfavourably by

users.

Unlikely to pay

Indicat

ions of unl

ikel

iness to pay shall

include placing the credit obligat

ion on

non-accrued status; the recognit

ion of a

specif

ic cred

it adjustment resulting from

a sign

iﬁcant perce

ived decline in credit

quality subsequent to the Group taking

on the exposure; selling the credit

obligat

ion at a mater

ial credit-related

economic loss; the Group consenting to

a distressed restructuring of the credit

obligat

ion where th

is is likely to result in

a dim

ished ﬁnanc

ial obl

igat

ion caused

by the material forgiveness, or

postponement, of princ

ipal,

interest or,

where relevant fees; ﬁling for the

obligor’s bankruptcy or a sim

ilar order

respect of an obligor’s credit obligat

ion

to the Group; the obligor has sought or

has been placed in bankruptcy or sim

ilar

protection where this would avoid or

delay repayment of a credit obligat

ion

to the Group.

VaR or Value at Risk

A quantitat

ive measure of market r

isk

estimat

ing the potent

ial loss that will

not be exceeded in a set time period at

a set statist

ical conﬁdence level.

ViU or Value-in-Use

The present value of the future

expected cash ﬂows expected to be

derived from an asset or CGU.

Write-downs

After an advance has been ident

iﬁed as

impa

ired and

is subject to an

impa

irment prov

ion, the stage may be

reached whereby it is concluded that

there is no realist

ic prospect of further

recovery. Write-downs will occur when,

and to the extent that, the whole or part

of a debt is considered irrecoverable.

XVA

The term used to incorporate credit,

debit and funding valuation

adjustments to the fair value of

derivat

ive ﬁnancial

instruments. See

‘CVA’, ‘DVA’ and ‘FVA’.

Designed and produced by

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io.com

Printed by Park Communicat

ions a cert

ied Carbon

Neutral print company.

Park works to the EMAS standard and its Environmental

Management System is certif

ied to ISO 14001.

This publicat

ion has been manufactured us

ing 100%

offshore wind electric

ity sourced from UK w

ind.

This is a certif

ied cl

imate neutral print product for

which carbon emiss

ions have been calculated and

offset by supporting recognised carbon offset projects.

The carbon offset projects are audited and certif

ied

according to internat

ional standards and demonstrably

reduce emiss

ions. The cl

imate neutral label includes a

unique ID number specif

ic to th

is product which can be

tracked at www.climatepartner.com, giv

ing deta

ils of

the carbon offsetting process includ

ing

informat

ion on

the emiss

ions volume and the carbon offset project

being supported.

100% of the inks used are vegetable oil based, 95%

of press chemicals are recycled for further use and,

on average 99% of any waste associated with this

production will be recycled and the remain

ing 1%

used to generate energy.

This document is printed on Nautilus Superwhite

100% Recycled paper contain

ing 100% recycled ﬁbre.

The FSC

label on this product ensures responsible use

of the world’s forest resources.

The STANDARD CHARTERED word mark, its logo device

and associated product brand names are owned by

Standard Chartered PLC and centrally licensed to its

operating entit

ies.

Registered Ofﬁce: 1 Basinghall Avenue, London

EC2V 5DD. Telephone +44 (0) 20 7885 8888.

Princ

ipal place of bus

iness in Hong Kong: 32nd Floor,

4-4A Des Voeux Road, Central, Hong Kong.

Registered in England No. 966425.

Global headquarters

Standard Chartered Group

1 Basinghall Avenue

London, EC2V 5DD

United Kingdom

telephone: +44 (0)20 7885 8888

facsim

ile: +44 (0)20 7885 9999

Dig

ital Annual Report

sc.com/annualreport

Shareholder enquir

ies

ShareCare informat

ion

website: sc.com/shareholders

helpline: +44 (0)370 702 0138

ShareGift informat

ion

website: ShareGift.org

helpline: +44 (0)20 7930 3737

Registrar informat

ion

Computershare Investor Services PLC

The Pavil

ions

Bridgwater Road

Bristol, BS99 6ZZ

helpline: +44 (0)370 702 0138

Hong Kong

Computershare Hong Kong

Investor Services Lim

ited

17M Floor, Hopewell Centre

183 Queen’s Road East

Wan Chai

Hong Kong

website: computershare.com/hk/investors

Chinese translation

Computershare Hong Kong

Investor Services Lim

ited

17M Floor, Hopewell Centre

183 Queen’s Road East

Wan Chai

Hong Kong

ions

website: investorcentre.co.uk

LSE stock code: STAN.LN

HKSE stock code: 02888