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Business review

Consumer Banking

Steve Bertamini

“Record deposit growth in 2008 highlights the strength of our franchise. The strategic shift towards customer segments and standardisation positions us well for long-term growth.”

Steve Bertamini, Group executive director, Consumer Banking

Our business and strategy

Our priorities in 2009

Operating income ($m)

2008 was a year of significant change and transformation for Consumer Banking. The business developed and rolled out a new strategy focused on customer segments and achieved scale benefits through standardisation to position the business for long-term growth.

Transaction convenience was improved in 2008 by strengthening and repositioning our cards proposition, forging strategic alliances and materially improving internet and mobile banking capabilities.

Customers using the updated Standard Chartered website

Continuous improvement Standard Chartered has improved the banking experience of customers around the world through the launch of online banking platforms in 24 countries and mobile banking in 17 countries over the past year.

Despite a challenging economic environment the business continued to invest to grow the franchise. We integrated AEB, which strengthened the Private Bank; introduced the full range of Islamic banking services in Malaysia; and enhanced the branch network in markets such as Taiwan and India through targeted niche acquisitions.

In total, the business added more than 80 branches and 1,200 ATMs in 2008 and extended internet and mobile banking across several markets.

At the same time, the business reconfigured its cost base by reducing employee numbers and driving efficiency through standardisation and enhanced productivity improvements, such as consolidating call centres, streamlining the account opening process, leveraging cross-border opportunities and prioritising investment.


The Group’s well-diversified and strong franchise across some of the world’s most dynamic markets, combined with the management’s pre-emptive action in curtailing the cost base mitigated the slowdown in Wealth Management income and higher loan impairment charges.

Deposit gathering was a key area of focus for Consumer Banking in 2008. Liabilities grew 16 per cent in 2008, resulting in a doubling of our surplus liquidity to over $40 billion. A combination of ‘flight-to-quality’ as a result of the financial crisis, a series of innovative campaigns, and expansion of the Bank’s internet and phone banking offerings helped achieve these results.

With the acquisition of AEB, Consumer Banking income rose 3 per cent while expenses grew 13 per cent, resulting in operating profit before tax declining 33 per cent to just over $1.1 billion. Cost efficiency measures were accelerated in the second half, resulting in 6 per cent decrease in costs over the first half of 2008.

In terms of quality, over 75 per cent of the Consumer Banking lending is secured and 59 per cent of the total Consumer Banking loans are mortgages with an average loan-to-value of just over 50 per cent. This positions us relatively well during these difficult times.

Small and Medium Enterprises business

The SME business had a solid year, with income growing by 8 per cent. SME is a deposits-led franchise, with deposits now almost twice the level of loans outstanding.

Due to difficult market conditions, the proportion of secured lending was increased and pricing adjusted to reflect the risk environment. The business actively managed its lending exposures and repositioned its book away from sectors that historically have been most affected during periods of economic downturn.

We are well positioned to selectively grow market share in this economically important segment.

Wealth Management

Wealth Management, which accounts for 47 per cent of Consumer Banking income, grew strongly in the first half of the year against a backdrop of falling stock markets as investors switched out of equity-linked and unit trust products into structured deposit and insurance products.

After well-publicised losses in certain industry products at the end of the third quarter, customers moved into cash deposits, sacrificing yield for greater security. Whilst the Group was successful in attracting deposits, margins earned were much lower, resulting in overall Wealth Management income growth of 6 per cent in 2008.

In the medium term, demand for Wealth Management products in our markets is expected to return, given naturally high savings levels, limited social security nets and, in some cases, capped savings rates. The business is being repositioned to address the changing industry landscape and will focus on developing simple, innovative products and annuity income streams.

Consumer Banking remains well diversified across products and geographies, operates in some of the most attractive markets in the world and has a relatively low-risk loan portfolio. We have an ambitious transformational agenda for 2009 and, most importantly, great people. The difficult economic environment presents us with a unique opportunity to selectively grow market share as we reposition our business for long-term sustainable growth.

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Operating income


2007: $5.81bn

Operating profit


2007: $1.68bn