ANNUAL REPORT 2016

Putting clients at the heart of our business

We have focused on achieving our strategic objectives, improving client experience and delivering a future of sustainable growth

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CHAIRMAN'S STATEMENT

“Standard Chartered is an extraordinary organisation with a rich history and huge potential, serving a remarkably diverse range of clients across the most dynamic markets in the world.”

José Viñals | Chairman

Read José’s statement in full

CHAIRMAN'S STATEMENT

“Standard Chartered is an extraordinary organisation with a rich history and huge potential, serving a remarkably diverse range of clients across the most dynamic markets in the world.”

José Viñals | Chairman

Read José’s statement in full

OUR PERFORMANCE

2016 in numbers

GROUP CEO REVIEW

“This time last year I set out what we needed to deliver for Standard Chartered to fulfil its true potential. We have cleaned up our balance sheet, fortified our capital position, attacked our cost base, enhanced our financial crime controls and reinvested significantly. I am proud of the efforts made by the Group's employees in 2016 to secure our foundations.”

Bill Winters | Group Chief Executive Officer

Read Bill’s statement in full

OUR STRATEGY

An overview of the actions we are taking to ensure stable growth

Secure the foundations

  • Execute rights issue to materially strengthen the balance sheet
  • Align business strategy within the tightened risk tolerance
  • Restructure businesses and assets representing approximately one-third of Group risk-weighted assets
  • Simplify organisational structure to focus more on geographic execution
  • Deliver our conduct and financial crime risk programmes

Get lean and focused

  • Restructure Corporate & Institutional Banking for higher returns
  • Accelerate Retail Banking transformation
  • Fundamentally overhaul Commercial Banking
  • Define a clear and deliverable strategy for our regions
  • Assertively manage costs to create investment capacity

Read our strategy in full

Invest and innovate

  • Invest and innovate in Private Banking and Wealth Management to capture opportunities
  • Build on a strong foundation and invest to grow safely in Africa
  • Leverage opening up of China; capture opportunities from renminbi internationalisation
  • Roll out enhanced Retail Banking digital capabilities across our footprint

Secure the foundations

  • Execute rights issue to materially strengthen the balance sheet
  • Align business strategy within the tightened risk tolerance
  • Restructure businesses and assets representing approximately one-third of Group risk-weighted assets
  • Simplify organisational structure to focus more on geographic execution
  • Deliver our conduct and financial crime risk programmes

Get lean and focused

  • Restructure Corporate & Institutional Banking for higher returns
  • Accelerate Retail Banking transformation
  • Fundamentally overhaul Commercial Banking
  • Define a clear and deliverable strategy for our regions
  • Assertively manage costs to create investment capacity

Invest and innovate

  • Invest and innovate in Private Banking and Wealth Management to capture opportunities
  • Build on a strong foundation and invest to grow safely in Africa
  • Leverage opening up of China; capture opportunities from renminbi internationalisation
  • Roll out enhanced Retail Banking digital capabilities across our footprint

CLIENT SEGMENTS

We combine global capabilities with local knowledge to meet the needs of our clients

Corporate & Institutional Banking

Segment overview:

Corporate & Institutional Banking supports our clients with transaction banking, corporate finance, financial markets and lending products and services in over 50 countries. We provide solutions to over 4,000 clients in some of the world’s fastest-growing economies and most active trade corridors. Our clients include large corporations, governments, banks and investors headquartered and operating in Asia, Africa and the Middle East as well as those looking for access to and support in these dynamic markets.

Strategic objectives:

We want to be the bank of choice for our clients’ global investment, trade and payment needs. Our priorities for the segment are to:

  • Better organise ourselves around our clients to deliver a service that is more aligned to their needs
  • Improve the efficiency of how we do business to provide clients with a seamless experience, irrespective of jurisdiction or time zone
  • Diversify and expand our client base, particularly to those based in OECD countries, to drive revenues and returns
  • Leverage our unique footprint by focusing on clients for whom our network is a key differentiator
  • Embed ourselves in our clients’ operations and supply chains to maximise the relevance of our network and product suite
  • Improve and grow our asset distribution capabilities to increase balance sheet efficiency and better mitigate against risks
  • Improve the quality of our funding base to reduce funding costs, improve returns and enable future growth
  • Deliver our conduct and financial crime risk programmes

Risk-weighted assets

$143 billion

statutory basis

Profit/(loss) before taxation

$435 million

underlying basis

$(24) million

statutory basis

Return on risk-weighted assets

0.3%

underlying basis

(0.0)%

statutory basis

Loans and advances to customers

Loans and advances to customers

Income split by product

Income split by region

Commercial Banking

Segment overview:

Our clients are small and mid-sized companies in 27 markets across Asia, Africa and the Middle East. We serve these clients through dedicated relationship managers, providing financial solutions and services in areas such as Trade Finance, Cash Management, Foreign Exchange and interest rate hedging.

Strategic objectives:

Our ambition is to be our clients’ partner of choice as they build their businesses internationally. Our priorities for the segment are:

  • Focus on digital channels and process efficiencies to improve client experience
  • Materially improve the risk profile of the business by continuing to upgrade the standard of our client due diligence and credit risk management
  • Leverage the Corporate & Institutional Banking product set and technology capabilities to strengthen our client offering
  • Continue to control expenses in support of a lower cost-to-income ratio
  • Invest in frontline staff to upgrade relationship manager capabilities and invest to create targeted value propositions to meet our clients’ needs
  • Deliver our conduct and financial crime risk programmes

Risk-weighted assets

$32 billion

statutory basis

Loss before taxation

$(120) million

underlying basis

$(146) million

statutory basis

Return on risk-weighted assets

(0.4)%

underlying basis

(0.4)%

statutory basis

Loans and advances to customers

Loans and advances to customers

Income split by region

Income split by region

Private Banking

We help our clients manage, preserve and grow their wealth, recognising that in many cases their personal and business banking needs are closely linked. Through our presence in Asia, Africa, the Middle East and the UK, we offer clients access to a full suite of private banking services from investment and credit solutions to wealth preservation and succession planning. We combine market insights from multiple sources with our own research to deliver investment recommendations and our open architecture platform ensures clients can access a wide range of investment solutions.

Strategic objectives:

We want to be recognised as the private bank for entrepreneurs and are investing significantly to capture the opportunities present in our footprint.

Our priorities for the segment are:

  • Enhance controls and processes to increase productivity
  • Invest in our core banking platform and upgrade technology to improve the quality and breadth of our client service
  • Broaden our product offering to give our staff the tools they need to attract new clients with assets under management of at least $5 million
  • Enhance our ability to attract and service ultra high net worth clients by investing in existing staff and hiring senior private bankers
  • Deliver our conduct and financial crime risk programmes

Risk-weighted assets

$6 billion

statutory basis

Profit/(loss) before taxation

$32 million

underlying basis

$(41) million

statutory basis

Return on risk-weighted assets

0.5%

underlying basis

(0.6)%

statutory basis

Loans and advances to customers

Loans and advances to customers

Income split by product

Income split by region

Retail Banking

Segment overview:

We serve over 9 million affluent and emerging affluent clients and small businesses in many of the world’s fastest growing cities across Asia, Africa and the Middle East. Our focus is on serving the banking needs of these Priority, Business and Personal Clients with market-leading digital capabilities and best-in-class products.

Strategic objectives:

We have made significant progress transforming Retail Banking in the last two years, sharpening our client proposition and building new technology. Our priorities for the segment are:

  • Continue to shift the client mix towards affluent and emerging affluent clients by focusing on our corporate ecosystems and alliances
  • Improving quality of income through changes in client mix, risk profiles and products
  • Invest to improve client experience through an enhanced end-to-end digital offering, with straightforward platforms and best-in-class products and services
  • Move towards a more automated and standardised business model to improve efficiency and reduce our cost-to-income ratio
  • Focus on core cities to drive growth supported by digitisation and branch optimisation
  • Reinvigorate our brand by clearly defining our proposition and simplifying our product and service offering
  • Deliver our conduct and financial crime risk programmes

Risk-weighted assets

$42 billion

statutory basis

Profit before taxation

$766 million

underlying basis

$719 million

statutory basis

Return on risk-weighted assets

1.7%

underlying basis

1.6%

statutory basis

Loans and advances to customers

Loans and advances to customers

Income split by region

Income split by region

Corporate & Institutional Banking

Segment overview:

Corporate & Institutional Banking supports our clients with transaction banking, corporate finance, financial markets and lending products and services in over 50 countries. We provide solutions to over 4,000 clients in some of the world’s fastest-growing economies and most active trade corridors. Our clients include large corporations, governments, banks and investors headquartered and operating in Asia, Africa and the Middle East as well as those looking for access to and support in these dynamic markets.

Strategic objectives:

We want to be the bank of choice for our clients’ global investment, trade and payment needs. Our priorities for the segment are to:

  • Better organise ourselves around our clients to deliver a service that is more aligned to their needs
  • Improve the efficiency of how we do business to provide clients with a seamless experience, irrespective of jurisdiction or time zone
  • Diversify and expand our client base, particularly to those based in OECD countries, to drive revenues and returns
  • Leverage our unique footprint by focusing on clients for whom our network is a key differentiator
  • Embed ourselves in our clients’ operations and supply chains to maximise the relevance of our network and product suite
  • Improve and grow our asset distribution capabilities to increase balance sheet efficiency and better mitigate against risks
  • Improve the quality of our funding base to reduce funding costs, improve returns and enable future growth
  • Deliver our conduct and financial crime risk programmes

Key numbers for 2016


Loans and advances to customers

Loans and advances to customers

Loans and advances to customers

Loans and advances to customers

Retail Banking

Segment overview:

We serve over 9 million affluent and emerging affluent clients and small businesses in many of the world’s fastest growing cities across Asia, Africa and the Middle East. Our focus is on serving the banking needs of these Priority, Business and Personal Clients with market-leading digital capabilities and best-in-class products.

Strategic objectives:

We have made significant progress transforming Retail Banking in the last two years, sharpening our client proposition and building new technology. Our priorities for the segment are:

  • Continue to shift the client mix towards affluent and emerging affluent clients by focusing on our corporate ecosystems and alliances
  • Improving quality of income through changes in client mix, risk profiles and products
  • Invest to improve client experience through an enhanced end-to-end digital offering, with straightforward platforms and best-in-class products and services
  • Move towards a more automated and standardised business model to improve efficiency and reduce our cost-to-income ratio
  • Focus on core cities to drive growth supported by digitisation and branch optimisation
  • Reinvigorate our brand by clearly defining our proposition and simplifying our product and service offering
  • Deliver our conduct and financial crime risk programmes

Key numbers for 2016


Loans and advances to customers

Loans and advances to customers

Loans and advances to customers

Loans and advances to customers

Commercial Banking

Segment overview:

Our clients are small and mid-sized companies in 27 markets across Asia, Africa and the Middle East. We serve these clients through dedicated relationship managers, providing financial solutions and services in areas such as Trade Finance, Cash Management, Foreign Exchange and interest rate hedging.

Strategic objectives:

Our ambition is to be our clients’ partner of choice as they build their businesses internationally. Our priorities for the segment are:

  • Focus on digital channels and process efficiencies to improve client experience
  • Materially improve the risk profile of the business by continuing to upgrade the standard of our client due diligence and credit risk management
  • Leverage the Corporate & Institutional Banking product set and technology capabilities to strengthen our client offering
  • Continue to control expenses in support of a lower cost-to-income ratio
  • Invest in frontline staff to upgrade relationship manager capabilities and invest to create targeted value propositions to meet our clients’ needs
  • Deliver our conduct and financial crime risk programmes
  • Key numbers for 2016


Loans and advances to customers

Loans and advances to customers

Loans and advances to customers

Loans and advances to customers

Private Banking

We help our clients manage, preserve and grow their wealth, recognising that in many cases their personal and business banking needs are closely linked. Through our presence in Asia, Africa, the Middle East and the UK, we offer clients access to a full suite of private banking services from investment and credit solutions to wealth preservation and succession planning. We combine market insights from multiple sources with our own research to deliver investment recommendations and our open architecture platform ensures clients can access a wide range of investment solutions.

Strategic objectives:

We want to be recognised as the private bank for entrepreneurs and are investing significantly to capture the opportunities present in our footprint.

Our priorities for the segment are:

  • Enhance controls and processes to increase productivity
  • Invest in our core banking platform and upgrade technology to improve the quality and breadth of our client service
  • Broaden our product offering to give our staff the tools they need to attract new clients with assets under management of at least $5 million
  • Enhance our ability to attract and service ultra high net worth clients by investing in existing staff and hiring senior private bankers
  • Deliver our conduct and financial crime risk programmes

Key numbers for 2016


Loans and advances to customers

Loans and advances to customers

Loans and advances to customers

Loans and advances to customers

OUR STORIES

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Goal celebrates a decade of girl empowerment

Through a combination of sports and life skills training, the Goal programme aims to equip adolescent girls with the skills they need to be leaders in their families, communities and societies.

Safer, faster payments with Straight2Bank

Our award-winning Straight2Bank products help clients like Seroma manage their money securely and effectively.

Changing lives through Financial Education

Our Education for Entrepreneurs programme ensures that people like Adong Evelyn have the tools they need to grow their businesses.