STANDARD CHARTERED PLC

Annual Report 2023



Connecting

the world’s

most dynamic

markets



We are a leading internat

ional

cross-border bank

Standard Chartered connects the world’s most dynamic markets,

serving the businesses that are the engines of global growth and

supporting people to meet their ambit

ions. Every day, we help

clients to manage and invest their ﬁnances safely and seamlessly,

and grow their businesses and wealth with conﬁdence.

Over our 170 year history, and across a unique geographical footprint that

connects Asia, Africa and the Middle East to each other and the world,

we’ve built a bank like no other, with diverse capabil

ies and partnerships

that set us apart. Inspired by our brand promise, we are here for good.

Strategic report

Financ

ial KPIs

Return on tangible equity

10.1

240

bps

Underlying basis

8.4

160

bps

Reported basis

Common Equity Tier 1 ratio

14.1

10bps

Above our 13-14 per cent target range

Total shareholder return

9.4

2022: 41.4%

Non-ﬁnancial KPIs

Divers

ity and

inclus

ion: women

in senior roles

32.5

0.4ppt

Mobil

ing Sustainable Finance $

$87.2bn

$29.8bn

Employee net promoter score (eNPS)

25.86

8.31 points

Other ﬁnancial measures

1, 3

Operating income

$17,378

13%

Underlying basis

$18,019

10%

Reported basis

Proﬁt before tax

$5,678

27%

Underlying basis

$5,093

24%

Reported basis

Earnings per share

128.9

cents

31.0

cents

Underlying basis

108.6

cents

22.7

cents

Reported basis

Reconcil

iat

ions from underlying to reported and deﬁn

ions of alternative performance measures can be found on pages 80 to 87

For more informat

ion on our culture of

inclus

ion see page 24, and for more on our Susta

inab

ity Aspirat

ions see page 66

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)

Stakeholders

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

Clients

Regulators and

governments

Investors

Suppliers

Society

Employees

Tangible net asset value

per ordinary share

$13.93

12%

Standard Chartered

– Annual Report 2023

Strategic report

Who we are and what we do

Where we operate

Group Chairman’s statement

Group Chief Executive’s review

Key performance ind

icators

Market environment

Business model

Our strategy

Our Stands

Client segment reviews

Regional reviews

Group Chief Financ

ial

Ofﬁcer’s review

Group Chief Risk Ofﬁcer’s review

Stakeholders and Sustainab

ity

overview

Underlying versus reported results

reconcil

iat

ions

Alternative performance measures

Viab

ity statement

Sustainab

ity review

Sustainab

ity review

Sustainab

ity Aspirat

ions

Sustainab

ity Strategic Pillars

120

Climate- and sustainab

ity-related

governance

125

Managing Environmental and

Social Risk

126

Managing Climate Risk

130

Integrity, conduct and ethics

Directors’ report

136

Group Chairman’s governance

overview

137

Board of Directors

142

Management Team

145

Corporate governance

182

Directors’ remuneration report

208

Addit

ional remunerat

ion disclosures

217

Other disclosures

229

Statement of Directors’ responsib

ies

Risk review and Capital review

234 Risk proﬁle

298 Climate risk

314

Enterprise Risk Management

Framework

320 Princ

ipal r

isks

338

Capital review

Financ

ial statements

346

Independent Auditor’s report

359

Financ

ial statements

366

Notes to the ﬁnancial statements

Supplementary informat

ion

490

Supplementary ﬁnancial

informat

ion

498

Supplementary people informat

ion

504

Supplementary sustainab

ity

informat

ion

517

Shareholder informat

ion

521

Main awards and accolades in 2023

523 Glossary

In this report

Unless another currency is specif

ied, the word ‘dollar’ or symbol ‘$’

in this document means US dollar and the word ‘cent’ or symbol ‘c’

means one-hundredth of one US dollar. Disclosures in the

Strategic report, Sustainab

ity review, Directors’ report, Risk

review and Capital review and Supplementary informat

ion are

unaudited unless otherwise stated. Unless context requires with

the document, ‘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’ 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 Bahrain,

Botswana, Côte d’Ivoire, Egypt, Ghana, Iraq, Kenya, Maurit

ius,

Niger

ia, Oman, Pak

istan, Qatar, Saudi Arabia, South Africa,

Tanzania, UAE, Uganda, and Zambia; and Europe & Americas

(EA) include Argentina, Brazil, Colombia, Falkland Islands, France,

Germany, Israel, 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 and ESG reporting

The Group includes Environmental, Social and

Governance (ESG) and sustainab

ity informat

ion

in this

Annual Report, provid

ing

investors and stakeholders

with an understanding of the impl

icat

ions of relevant

sustainab

ity-related risks and opportunit

ies, and progress

against our object

ives.

We have observed our obligat

ions under: (

i) sections 414CA

and 414CB of the UK Companies Act 2006; (i

i) the UK’s

Financ

ial Conduct Author

ity’s List

ing Rules

in respect of

climate-related disclosures; and (i

i) the ESG Reporting

Guide contained in Appendix C2 to the Rules Governing

the List

ing of Secur

ies on the Stock Exchange of Hong

Kong Lim

ited. We have made d

isclosures consistent with

the Task Force on Climate-Related Financ

ial D

isclosures

(TCFD) recommendations and recommended disclosures

throughout this Annual Report.

In preparing this report we have given considerat

ion to

(but do not align in full with) the guidance provided by

the International Sustainab

ity Standards Board (ISSB)

Standards ﬁnalised

in 2023: IFRS S1 and IFRS S2, noting that

IFRS S2, although largely based on TCFD, requires a more

granular level of disclosure. IFRS S1 and S2 are voluntary

standards and compliance is not yet required in the Group’s

list

ing locat

ions. Addit

ionally, we publ

ish an ESG reporting

index against the voluntary Global Reporting Init

iat

ive

(GRI) Universal Standards and select GRI Topic Standards,

and the World Economic Forum Stakeholder Capital

ism

Metrics framework.

The Group’s sustainab

ity-related

disclosures can be accessed via

sc.com/sustainab

ityhub

Alternative performance measures

The Group uses a number of alternative performance

measures in the discuss

ion of

its performance. These

measures exclude certain items which management

believes are not representative of the underlying

performance of the business and which distort

period-on-period comparison. They provide the reader

with ins

ight

into how management measures the

performance of the business.

For more informat

ion on Standard

Chartered please vis

sc.com

All informat

ion presented

in the Chairman, CEO and CFO

statements are on an underlying basis unless otherwise

stated. A reconcil

iat

ion from underlying to reported and

deﬁnit

ions of alternative performance measures can be

found on pages 80 to 87.

About this report

Stakeholders

and Sustainab

ity overview

Regional reviews

Group Chief Executive’s

review

Client segment

reviews

Our strategy

Standard Chartered

– Annual Report 2023

Strategic report

Who we are

and what we do

Total operating income

$17,378m

Underlying basis

$18,019m

Reported basis

Our client segments

Global functions

Enabling and supporting our businesses

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 to ﬁght

ﬁnancial cr

ime.

Corporate Affairs, Brand

and Marketing

Manages the Group’s marketing and

communicat

ions and engagement

with stakeholders to promote and

protect the Group’s reputation, brand

and services.

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.

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.

Human Resources

Maxim

ises the value of

investment

in people through recruitment,

development and employee

engagement.

Legal

Provides legal advice and support

to the Group to manage legal risks

and issues.

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.

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

and dig

ital solut

ions. Also manages all

client operations, seeking to provide an

optimal client service and experience

across the board.

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 &

Institut

ional Bank

ing

Supporting clients with their transaction

banking, ﬁnanc

ial markets, corporate ﬁnance

and borrowing needs, Corporate, Commercial &

Institut

ional Bank

ing provides solutions to nearly

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

economies and most active trade corridors.

$11,218m

Underlying basis

$11,788m

Reported basis

Consumer, Private

& Business Banking

Serving more than 11 mill

ion

ind

iduals and

small businesses, Consumer, Private & Business

Banking focuses on the afﬂuent and emerging

afﬂuent in many of the world’s fastest-growing

economies.

$7,106m

Underlying basis

$7,151m

Reported basis

Ventures

Ventures promotes innovat

ion,

invests in

disrupt

ive ﬁnancial technology and explores

alternative business models. It represents a

diverse portfolio of over 30 ventures and

more than 20 investments

$156m

Underlying basis

$156m

Reported basis

Central and other items

$(1,102)m

Underlying basis

$(1,076)m

Reported basis

Operating income

Standard Chartered

– Annual Report 2023

Strategic report

Valued behaviours

Our regions

Total operating income

$17,378m

Underlying basis

$18,019m

Reported 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

Our valued behaviours are the guid

ing pr

inc

iples for how

we work together, and the way we do business, every day.

Asia

We are present in 21 markets, includ

ing Hong

Kong and Singapore which contribute the

highest income.

$12,429m

Underlying basis

$12,651m

Reported basis

Africa and Middle East

We have a presence in 18 markets of which the

most sizeable by income are UAE, Pakistan,

Kenya, Niger

ia, South Afr

ica and Ghana.

$2,806m

Underlying basis

$2,924m

Reported 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.

$1,397m

Underlying basis

$1,702m

Reported basis

Central and other items

$746m

Underlying basis

$742m

Reported basis

Operating income

Standard Chartered

– Annual Report 2023

Strategic report

Where we operate

We operate in the world’s most

dynamic markets which set the

pace for global growth and

prosperity. Our unique geographic

footprint connects high-growth

and emerging markets in Asia,

Africa and the Middle East with

more established economies

in Europe and the Americas,

allowing us to channel capital

to where it’s needed most.

For more than 170 years, we have

used the power of our network

to maxim

ise opportun

ies for

people and businesses who trade,

operate or invest in these regions.

Our diverse experience, capabil

ies

and culture set us apart.



We are present

in 52 markets



Where we operate

We have a long-standing and deep

franchise in some of the world’s fastest-

growing economies. Our Asia region

generates

two-thirds

of our income.

The two markets contribut

ing the h

ighest

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

Standard Chartered

– Annual Report 2023

Strategic report

We support clients in Europe and

the Americas through hubs in

London

and New York

and have

a strong

presence

in several European and

Latin American markets.

Argentina

Brazil

Colombia

Falkland Islands

France

Germany

Israel

Jersey

Poland

Sweden

Türkiye

We have a deep-rooted heritage in Africa

and the Middle East.

The United Arab

Emirates, Pakistan, Kenya, Niger

ia,

South Africa, and Ghana

are our largest

markets by income.

Bahrain

Botswana

Côte d’Ivoire

Egypt

Ghana

Iraq

Kenya

Maurit

ius

Niger

Oman

Pakistan

Qatar

Saudi Arabia

South Africa

Tanzania

UAE

Uganda

Zambia

Africa and the Middle East

Europe and the Americas

Read more on

page 32

Read more on

page 33

Group Chairman’s

statement



Embedding

a culture of

excellence

to deliver

sustained

value



Dr José Viñals

Group Chairman

Strategic report

Group Chairman’s statement

Standard Chartered

– Annual Report 2023

Standard Chartered

– Annual Report 2023

Strategic report

During 2023, the Group continued to improve proﬁtab

ity,

deliver

ing on our objective to ach

ieve a double-dig

it return on

tangible equity (RoTE) for the full year. Our high-growth

markets, where we are intent on making further investment,

continue to deliver strongly despite an uncertain picture for

the global economy.

This performance came against a backdrop of ris

ing

interest

rates in many large economies, which undoubtedly gave a

strong tailw

ind for the bus

iness. However, it is also a product

of our clear strategy, disc

ipl

ine and tireless execution – a

sign

iﬁcant ach

ievement for our colleagues, led by our Group

Chief Executive, Bill Winters, and his Management Team.

Their skills and dedicat

ion rema

in essential to our

performance, and my deepest thanks go to all of them.

We have recently bid a fond farewell to Andy Halford, who

formally stepped down as Group Chief Financ

ial Ofﬁcer on

3 January 2024. Since his arrival in the role in 2014, Andy has

been a much-valued colleague and friend and made a

phenomenal contribut

ion by help

ing to steer the business

through a challenging external environment. Under his watch

we strengthened our foundations, reset our risk appetite and

redeﬁned the Group’s strategy. He leaves with our very best

wishes, and will continue in an advisory role until his retirement

in August. It is with pleasure that we welcome Diego De Giorg

who joins us as Andy’s successor. I am look

ing forward to

working closely with Diego and Bill to drive further excellence

for clients and higher value for shareholders.

Advancing our strategic and ﬁnanc

ial goals

I have said before that our object

ive

is to grow income in a

strong, safe and sustainable manner, while mainta

ing both

cost and capital disc

ipl

ine, and I am delighted to say that was

the case last year. We are conﬁdent that our improved RoTE,

which reached 10.1 per cent in 2023, will be a milestone on the

way to further long-term success for the Group, underpinned

by strong performance across the business. We grew income

13 per cent on a constant currency basis while mainta

ing a

strong capital and liqu

ity posit

ion and pos

ive

income-to-

cost jaws. We expect our RoTE to steadily increase from

10 per cent, and are targeting 12 per cent in 2026 and to

progress thereafter.

The strength of our ﬁnancial performance afﬁrms that the

strategy that we set out in 2021 is working. We remain

focused on investment in high-growth markets and have

made sign

iﬁcant progress aga

inst our strategic prior

ies

across Network, Afﬂuent, Mass Retail, and Sustainab

ity.

I am acutely aware of the underperformance of our share

price in recent months, which I believe does not reﬂect

the progress we are making. Both the Board and the

Management Team are absolutely focused on deliver

ing

sustained, long-term value for our shareholders. I believe our

solid performance in 2023 gives us a good base from which to

do this. As Bill details in the following pages, we have further

sharpened the actions we will take to accelerate performance

and future growth.

‘We remain focused on investment

in high-growth markets and have

made sign

iﬁcant progress aga

inst

our strategic prior

ies’

Firstly, we will continue to rely on our stronger capabil

ies to

further enhance returns in our Corporate, Commercial &

Institut

ional Bank

ing and Consumer, Private & Business

Banking businesses, with a focus on driv

ing

income growth in

high-returning areas. Secondly, we will improve operational

leverage with

in the Group, address

ing structural ineff

ienc

ies

and complexit

ies wh

ilst protecting income. Finally, we will

continue to return substantial capital to shareholders. This

year, we are pleased to be able to provide an increased

full-year div

idend of 27 cents per share and are announc

ing

a further share buyback of $1 bill

ion.

Alongside the importance of deliver

ing

improved ﬁnanc

ial

performance, our Purpose and brand promise to be here for

good remain cornerstones of our business. We are keenly

aware of our role in supporting our clients and communit

ies

as they antic

ipate and respond to econom

ic and social

challenges. This is why we remain true to our Stands –

Accelerating Zero, Resetting Globalisat

ion and L

ift

ing

Partic

ipat

ion – which are delivered through the execution

of our strategy, and which give us an active framework for

posit

ive

impact across our footprint.

We updated our net zero roadmap in April 2023, committ

ing

to an absolute emiss

ions target and trajectory for the o

and gas sector. In this year’s Annual Report, we disclose the

targets and science-based methodologies for our ﬁnanced

emiss

ions

in 11 of the 12 high-emitt

ing sectors

ident

iﬁed as

decarbonisat

ion pr

ior

ies by the Net Zero Banking Alliance,

demonstrating our commitment to support the transit

ion of

the real-world economy.

We have also recently announced our decis

ion to become an

early adopter of the Taskforce on Nature-related Financ

ial

Disclosures, highl

ight

ing the ris

ing

importance of nature and

biod

ivers

ity as a necessary considerat

ion

in sustainab

ity.

Given that our footprint represents some of the most complex

and diverse natural capital in the world, working across our

business and with our clients to preserve, restore and enhance

nature is crit

ically

important.

It is my honour to be able to act as a voice for our Stands on

behalf of the Group as Co-Chair of the United Nations’ Global

Investors for Sustainable Development Alliance, as well as at

various global platforms and by engaging with stakeholders

across our markets.

Driv

ing h

igher standards

The Board remains committed to ﬁrmly embedding a

culture of excellence across the organisat

ion, bu

ild

ing h

igh

standards through a ‘one bank’ culture of ambit

ion, act

ion

and accountabil

ity that puts our cl

ients at the heart of all

we do. We are at our best when we harness the full talent

and potential of the diverse markets in which we operate.

Both the Board and the Management Team are dedicated to

mainta

ing our status as an employer of choice. That means

offering our colleagues a variety of ways to build their skillset,

attracting the best talent through our doors with a diverse set

of career paths with

in the Group and progress

ive employee

polic

ies, such as the standard

ised parental leave announced

last year.

As the world continues to change around us, we also

recognise the ongoing importance of technology and

continuous improvement in mainta

ing our competit

ive

edge, and in build

ing an

innovat

ion-led culture that

allows colleagues to try new things with

in an effect

ive

and comprehensive risk management framework. We are

intent on capturing the beneﬁts of new, game-changing

technologies like artif

ial intell

igence, wh

ilst protecting

the informat

ion and ﬁnancial secur

ity of our clients.

Standard Chartered

– Annual Report 2023

Strategic report

Group Chairman’s statement

It has been an extremely active year for the Board, with

frequent in-depth brief

ings on geopol

ical, cyber and

sectoral risks, and a sharp focus on corporate governance.

We continue to build out our resil

ience

in both the ﬁnanc

ial

and non-ﬁnancial d

imens

ions of r

isk and compliance across

our varied markets. This gives us the conﬁdence to achieve

our strategic goals and act decis

ively to grasp new

business opportunit

ies.

We continue to mainta

in a d

iverse range of skillsets and

backgrounds on our Board. Jasmine Whitbread, a long-

standing director and impactful former chair of the Culture

and Sustainab

ity Committee, stepped down from the

Board at last year’s AGM. As announced on 16 February

2024, Gay Huey Evans will step down from the Board with

effect from 29 February 2024 after serving nine years and

contribut

ing s

ign

iﬁcantly to the Board and

its Committees,

especially as Chair of the former Board Financ

ial Cr

ime Risk

Committee. Carlson Tong, another much-valued Board

member, will step down from the Board on 9 May 2024,

ahead of the AGM. I would like to thank Jasmine, Gay and

Carlson for their many contribut

ions dur

ing their time with us.

On 16 February 2024, we announced that Diane Jurgens

will jo

in the Board from 1 March 2024. D

iane is a highly

experienced and respected technologist who will bring

sign

iﬁcant technology and transformat

ion expertise and

ins

ight to the Board hav

ing operated across a variety of

sectors and the Group’s key markets.

Our dynamic markets

In 2023 I continued to spend time across our markets, seeing

their dynamism ﬁrst-hand and experienc

ing the amb

ion of

our colleagues as they work together for greater growth.

Guided by our Purpose – to drive commerce and prosperity

through our unique divers

ity – we are

invest

ing heav

ily in

fast-growing economies and trade corridors in Asia, Africa

and the Middle East, and bring

ing

innovat

ive d

ital products

to new clients. A good example of this is Solv, our e-commerce

platform for small and medium-size enterprises. We’re also

posit

ion

ing ourselves to be a posit

ive force

in the expansion of

sectors that will deliver a more sustainable global economy,

like renewables and electric vehicles.

I’m more conﬁdent than ever that we are invest

ing

in the

right places for strong, safe and sustainable growth, and in

our role as a connector bank in an ever more complex and

fragmenting world. We provide our clients with the right

solutions gained from deep experience of our markets, and

continue to be a trusted partner for them as they look to seize

opportunit

ies across our footpr

int.

‘I’m more conﬁdent than ever

that we’re invest

ing

in the right

places for strong, safe and

sustainable growth, and in our role

as a connector bank in an ever

more complex, fragmenting world’

Looking ahead with conﬁdence

We expect to see a ‘soft landing’ for the world economy in

2024. This is no small achievement as we have witnessed the

most aggressive period of monetary policy tighten

ing

decades. This, plus other favourable supply side developments

have led to a fall in inﬂat

ion

in most countries, engendering

expectations of ofﬁc

ial

interest rate cuts in many economies

this year. Growth, in turn, remains resil

ient, w

ith emerging

markets expected to keep growing considerably faster

than developed economies, and Asia continu

ing to lead

global growth.

However, one cannot be complacent about the years ahead.

The ‘last mile’ of inﬂat

ion may prove st

ick

ier than expected,

and geopolit

ical r

isks abound. As we begin 2024, the war

between Ukraine and Russia continues, increas

ing uncerta

inty

for nations in Europe and elsewhere. We see renewed conﬂict

in the Middle East, bring

ing tragedy to many commun

ies

and disrupt

ion to the Red Sea, a key chokepo

int in global

supply chains.

2024 is also a year of major elections in the United States,

India and probably the United Kingdom, as well as other

markets in our footprint. These all have the potential to affect

the economic situat

ion.

With so much at stake, we must take care not to needlessly

damage the means of growth and wealth creation. I have

frequently spoken in defence of open, rules-based trade

as a lynchpin of global economic growth. This year, the

challenges around it remain powerful, with the risk of further

fragmentation.

I believe the system of global trade that has been created

with such care over many decades is one of humanity’s

foremost achievements. It is not perfect by any means, but

it has arguably brought more opportunity and prosperity to

a greater number of people than any other force in history.

Like every intr

icate system,

it is easy to damage and hard

to rebuild. Safeguarding and making it more inclus

ive and

sustainable requires constant vig

ilance and cooperat

ion from

policymakers, legislators, and the private sector in an evolved,

modernised multilateral system.

While the external landscape remains uncertain, we are

conﬁdent that we are well posit

ioned to nav

igate the

challenges and seize the opportunit

ies ahead. Our results

in 2023 show we are doing just that. We remain focused on

continu

ing to del

iver excellence for our clients, and sustained

value for shareholders, in 2024 and beyond.

Dr José Viñals

Group Chairman

23 February 2024

Group Chairman’s statement

continued



Standard Chartered and

IFC aim to boost global

trade by more than

$6 bill

ion



In April, we signed a deal to invest $700 mill

ion

in the IFC’s Global Trade

Liqu

ity Programme, which is expected to support up to $6.4 bill

ion

in trade

over three years across Asia, the Middle East, Africa, and Latin America.

The deal is a renewal of a facil

ity ﬁrst launched

in 2009 and has supported

$20.5 bill

ion

in global trade through more than 150 Emerging Market Issuing

Banks in 37 countries.

Read more at

sc.com/IFC

Strategic report

Standard Chartered

– Annual Report 2023

Group Chief

Executive’s review



Deliver

ing

sustainably

higher returns



Bill Winters

Group Chief Executive

Strategic report

Group Chief Executive’s review

Standard Chartered

– Annual Report 2023

Standard Chartered

– Annual Report 2023

Strategic report

We produced strong results in 2023, demonstrating the value

of our franchise and deliver

ing our target to push past the

10 per cent Return on Tangible Equity (‘RoTE’) milestone. But

10 per cent is not the extent of our ambit

ion. We have the r

ight

strategy, business model and intent to build on this momentum.

We have set out clear actions to deliver sustainably higher

returns, with RoTE increas

ing stead

ily from 10 per cent,

targeting 12 per cent in 2026, and to progress thereafter.

Full year 2023 income of $17.4 bill

ion was up 13 per cent on a

constant currency basis, beneﬁtt

ing not only from r

ing

interest

rates but also encouraging underlying business momentum.

Good cost disc

ipl

ine has enabled us to generate sign

iﬁcantly

posit

ive

income-to-cost jaws of 4 per cent for the year, even

with continued underlying investment. Loan impa

irment

declined, primar

ily due to reduced

impa

irments from Ch

ina

commercial real estate and sovereign risks, with the overall

portfolio remain

ing res

ient. All th

is has helped us grow

underlying proﬁt before tax 27 per cent year-on-year, to

$5.7 bill

ion, the h

ighest level for ten years.

We remain highly liqu

id and strongly cap

ital

ised. We ﬁnished

the year with a Common Equity Tier 1 (‘CET1’) ratio of 14.1 per

cent, above the top of our target range, allowing us to increase

our full year ordinary div

idend by 50 per cent to 27 cents per

share. We undertook in February 2022 to return over $5 bill

ion

to shareholders by the end of 2024. With this full year div

idend

and the $1 bill

ion share buyback announced today, we w

ill have

exceeded that target well ahead of schedule.

As we start the new year, I would like to take a moment to

thank my friend and much valued colleague, Andy Halford,

who decided to retire this year. Andy has been a great partner

to me and the Board and has successfully helped steer the

Group over the last ten years. I’d also like to extend a warm

welcome to Diego De Giorg

i as he takes over as the Group

Chief Financ

ial Ofﬁcer. D

iego brings with him over 30 years of

ﬁnancial serv

ices experience and I am sure he will continue to

build on the progress we have made.

Our strategy is driv

ing success

Our strategy is designed to deliver our Purpose: to drive

commerce and prosperity through our unique divers

ity. We set

out four strategic prior

ies in early 2021: continue to grow our

Network

and

Afﬂuent client

businesses, return to growth in

Mass Retail

and advance on all fronts of our

Sustainab

ity

agenda. We are making good progress in every area.

•

Income from our cross-border

Network

business grew

31 per cent in 2023, with standout growth rates in our

China offshore corridors to the Middle East and ASEAN,

up 67 per cent and 53 per cent respectively

•

We increased the total number of

Afﬂuent

clients

2.3 mill

ion. Th

is helped drive sign

iﬁcantly h

igher levels of

net new money in 2023, with net inﬂows of $29 bill

ion,

up 50 per cent, year-on-year, and deliver 24 per cent growth

in income from this client segment

•

We grew our

Mass Retail

client base by over 1 mill

ion to

9.5 mill

ion. We have cont

inued to grow our dig

ital banks,

Mox in Hong Kong and Trust in Singapore. They remain two

of the fastest growing dig

ital banks globally and underl

ine

our abil

ity to partner and launch d

ifferent

iated customer

proposit

ions. The Mass Reta

il business also serves a valuable

strategic purpose as a pipel

ine for future Afﬂuent cl

ients,

with 224,000 of our Mass Retail clients moving up to Afﬂuent

clients in 2023

•

Our dedicated Chief Sustainab

ity Ofﬁce unit acts as a

centre of excellence and a catalyst for the execution of the

Group-wide

Sustainab

ity

strategy and the achievement

of our net zero roadmap, further details of which are set out

in the Annual Report. Our Sustainable Finance franchise

generated over $0.7 bill

ion

income in 2023, a year-on-year

growth rate of 42 per cent and we are well on our way to

deliver a bill

ion dollars

in income by 2025. We have mobil

ised

$87 bill

ion of susta

inable ﬁnance since the beginn

ing of

2021, making good progress as we advance towards our

$300 bill

ion target by 2030

Great execution on our 2022 strategic actions

We set out ﬁve actions in 2022 designed to accelerate delivery

of double-dig

it RoTE. The strong execut

ion of these actions over

the last two years, where we have either achieved our targets

ahead of plan or they are well on track, has enabled us to reach

that milestone in 2023.

•

We are ahead of schedule to

drive improved returns

Corporate, Commercial & Institut

ional Bank

ing (‘CCIB’). We

targeted around 160 basis points improvement in income

return on risk-weighted assets (‘IRoRWA’) to 6.5 per cent in

2024. The team exceeded this target in 2023, deliver

ing an

IRoRWA of 7.8 per cent. This was driven by particularly strong

growth in income from Financ

ial Inst

itut

ion cl

ients, which now

accounts for 49 per cent of CCIB income, deliver

ing close to

the 50 per cent target one year early. The team has also

successfully executed $24 bill

ion

in risk-weighted assets

optim

isat

ion over the last two years, exceeding the target

of $22 bill

ion. The complet

ion of the sale of the Aviat

ion

Finance business also created further capacity for CCIB to

grow higher returning business

•

We are also ahead of our 2024 target to

transform

proﬁtabil

ity

in Consumer, Private and Business Banking

(‘CPBB’). The team has achieved its 60 per cent cost-to-

income target one year ahead of plan, with a nine-

percentage point improvement in 2023. They have delivered

$0.4 bill

ion of structural expense sav

ings from rational

ing

the branch network, process re-engineer

ing, headcount

efﬁcienc

ies and further automation

•

We have continued to

seize the China opportunity

, with our

China-related business performing well, despite post-COVID

domestic recovery tracking below expectations. We set a

target of doubling the operating proﬁt before tax of our

onshore and offshore China business by the end of 2024

and we almost achieved that in 2023, generating $1.3 bill

ion.

This was driven primar

ily by offshore-related

income, which

delivers sign

iﬁcantly h

igher returns, growing 42 per cent.

Our onshore income, despite the domestic headwinds, grew

4 per cent. Looking forward, we continue to be conﬁdent

in the long-term opportunit

ies that Ch

ina

re-opening will

generate for our unique franchise

•

We continued to

create operational leverage

, and are on

track to deliver the three-year $1.3 bill

ion expense sav

ings

target, which has helped us absorb inﬂat

ionary pressure

and continue to invest. Our cost-to-income ratio is down

7 percentage points since the end of 2021 to 63 per cent for

2023, so we are well advanced towards our target of around

60 per cent by 2024

•

Our equity generation and disc

ipl

ine on risk-weighted assets

this year have created capacity for us to continue to

deliver

substantial shareholder distr

ibut

ions

. With the ﬁnal ordinary

share div

idend for 2023 and a new $1 b

ill

ion share buyback

programme starting imm

inently, means we are well ahead

of our total target of returning in excess of $5 bill

ion by the

end of 2024. We will continue to actively manage the Group’s

capital posit

ion w

ith the target of a further capital return of

at least $5 bill

ion over the next three years

Standard Chartered

– Annual Report 2023

Strategic report

Group Chief Executive’s review

Build

ing on our ach

ievements to deliver

sustainably higher returns

Our unique footprint across the world’s most dynamic markets

gives us a strategic advantage and underpins my conﬁdence

that we can continue to grow even in a less supportive interest

rate environment. Our object

ive

is to ensure that income

growth translates into structurally higher proﬁtab

ity, strik

ing

a balance between mainta

ing the divers

ity that our cl

ients

value, while taking out unnecessary complexity that slows us

and drags returns.

We are therefore taking further action in each of our three

client businesses to drive income growth:

•

In CCIB, we will seek to

drive growth in high-returning

businesses

such as cross-border income, targeting an 8 to

10 per cent underlying growth rate over the next three years.

Addit

ionally, bu

ild

ing on our strength as a top two network

trade bank, we are targeting to grow Trade and Working

Capital income by 6 to 8 per cent between 2024 and 2026.

The team is also driv

ing growth

in ﬁnanc

ing related

income

(Global Credit and Lending) with a particular focus on

accelerating the orig

inate to d

istr

ibute strategy, target

ing

an 8 to 10 per cent CAGR to 2026

•

In CPBB, we will

build on our strengths in the Afﬂuent client

business

, targeting to attract over $80 bill

ion of net new

money over the next three years, a 19 per cent increase from

the previous three years. We also intend on accelerating the

growth in our internat

ional cl

ient business, with the target of

increas

ing the number of

internat

ional Afﬂuent cl

ients from

274,000 to over 375,000 by 2026

•

Build

ing on the remarkable momentum

in our two dig

ital

banks, Mox and Trust, we are targeting for the

Ventures

segment to be RoTE accretive

by 2026

By executing these actions, we expect to grow income at a

compound annual rate of between 5 and 7 per cent over the

next three years, well above the antic

ipated rate of growth for

the global economy.

We are also taking action to transform the way we operate,

addressing structural ineff

ienc

ies and complex

ity whilst

protecting income. Starting this year, we will run a bank-wide

programme called Fit for Growth, to accelerate our previous

efforts to simpl

ify, standard

ise and dig

ise our business. We will

fundamentally improve our productiv

ity, cl

ient and employee

experience and create capacity to reinvest in incremental

growth in

iat

ives.

This programme will save around $1.5 bill

ion of cumulat

ive

expenses over the next three years and we expect to incur a

sim

ilar amount

in terms of the cost to achieve these permanent

organisat

ional and ﬁnancial beneﬁts. Th

is will help us to deliver

posit

ive

income-to-cost jaws in each of the next three years

and keep operating expenses below $12 bill

ion

in 2026.

Continu

ing to del

iver strong income growth, combined

with improv

ing operat

ional leverage and mainta

ing our

responsible approach to risk and capital, means we expect

RoTE to increase steadily from 10 per cent, targeting 12 per cent

in 2026 and to progress thereafter.

Uniquely posit

ioned and conﬁdent

in the future

We are in a priv

ileged pos

ion to take advantage of s

ign

iﬁcant

growth opportunit

ies that w

ill continue to come from the

markets in our footprint, generating value for our clients and

the communit

ies

in which we operate.

Whilst we expect global growth to stay below potential at

2.9 per cent in 2024, as high interest rates put a drag on

consumers as well as investment spending, Asia is likely to be

the fastest-growing region continu

ing to dr

ive global growth,

expanding by 4.9 per cent. Easing inﬂat

ion

is likely to allow

major central banks to start cutting rates in the second half of

2024, with a focus on supporting softening economic activ

ity.

Downside risks to this outlook include a sharper than expected

slowdown in major economies, sustained inﬂat

ionary pressures,

a sluggish housing market in China and increased geopolit

ical

tensions. But we also see sign

iﬁcant opportun

ies emerg

ing:

•

Higher capex to meet sustainab

ity targets and moves

towards dig

ital

isat

ion could boost product

ity growth

•

With

in emerg

ing markets, countries in Asia are best placed

to take advantage of dig

ital

isat

ion,

includ

ing generat

ive AI

•

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

Our share price reﬂects little of our optim

ism about prospects

and seems heavily inﬂuenced by the downside concerns

mentioned above. The concerns are real, and we take them

seriously. We mainta

in a strong cap

ital posit

ion and l

iqu

ity to

absorb any adverse impact on us and our clients. We believe

that the value of our franchise will become increas

ingly clear

to the broader market as we continue to grow our proﬁts

and exceed market expectations in those very areas of

most concern.

In conclusion: sign

iﬁcant progress w

ith ambit

ion

for more

We delivered a strong performance in 2023, achiev

ing our

10 per cent RoTE milestone, while mainta

ing a strong

balance sheet and a robust capital posit

ion. But we know

we must do more.

We have made sign

iﬁcant progress on our ﬁve strateg

actions, with most targets either delivered ahead of plan or

well on track, provid

ing a strong platform to grow and dr

ive

sutainably higher returns. And while much external uncertainty

persists, we are optim

ist

ic for the markets and strength of our

businesses in our footprint. But we are far from complacent, and

my Management Team and I remain focused on deliver

ing on

our targets, seiz

ing the growth opportun

ies we have, dr

ing a

culture of excellence and creating exceptional long-term value

for our clients, shareholders and communit

ies.

Finally, I would like to acknowledge the remarkable efforts of

our colleagues again this year. Their impress

ive ded

icat

ion to

our customers and the communit

ies that we serve help to

manifest our brand promise to be here for good.

Bill Winters

Group Chief Executive

23 February 2024

Group Chief Executive’s review

continued

Standard Chartered

– Annual Report 2023

Strategic report

Management Team

Bill Winters

Group Chief Executive

Diego De Giorg

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

Mary Huen

CEO, Hong Kong and Cluster

CEO for Hong Kong, Taiwan

and Macau

Benjamin Hung

CEO, Asia

Tanuj Kapilashram

Group Head, Human Resources

Sunil Kaushal

CEO, Africa & Middle East

10.

Roel Louwhoff

Chief Technology, Operations

and Transformation Ofﬁcer

11.

Tracey McDermott, CBE

Group Head, Conduct,

Financ

ial Cr

ime and Compliance

12.

Sandie Okoro

Group General Counsel

13.

Sadia Ricke

Group Chief Risk Ofﬁcer

14.

Paul Day*

Group Head, Internal Audit

Paul represents Group Internal

Audit as an inv

itee at Management

Team meetings

14.

13.

12.

10.

11.

Strategic report

Key performance ind

icators

Standard Chartered

– Annual Report 2023

Key performance ind

icators

We measure our progress against Group key performance ind

icators

(KPIs), as detailed below, as well as client KPIs, which can be found on

pages 28 to 30. Our Group KPIs include non-ﬁnanc

ial measures reﬂect

ing

our commitment to build an engaged, diverse and inclus

ive culture and

support social and environmental outcomes.

Aim

Deliver sustainable improvement in the Group’s

proﬁtabil

ity as a percentage of the value of shareholders’

tangible equity.

Progress in 2023

Our strategy to drive improved levels of

return on tangible equity (RoTE) is working. RoTE for the

year of 10.1 per cent is 240 basis points higher year-on-year.

The underlying proﬁt attributable to ordinary shareholders expressed as

a percentage of average ordinary shareholders’ tangible equity.

2021-2022 have been restated to reﬂect market and business exits

announced in 1Q’23.

Aim

Mainta

in a strong cap

ital base and Common Equity

Tier 1 (CET1) ratio.

Progress in 2023

The Group remains well capital

ised and

highly liqu

id w

ith a CET1 ratio of 14.1 per cent above our

target range, enabling the Board to announce a 50 per cent

increase in the full-year div

idend and a further $1 b

ill

ion share

buyback programme to start imm

inently.

The components of the Group’s capital are

summarised in the Capital review on

page 338 to 343

9.4%

10.1

2023

2022

7.7

2021

6.5

2020

3.0

2019

6.4

9.4

2023

2022

41.4

2021

(2.0)

2020

(34.6)

2019

20.2

14.1

2023

2022

14.0

2021

14.1

2020

14.4

2019

13.8

Financ

ial KPIs

Underlying return on

tangible equity (RoTE)¹

Common Equity

Tier 1 ratio

+240

bps

+10

bps

Alignment to

remuneration

Alignment to

remuneration

Aim

Deliver a posit

ive return on shareholders’

investment

through share price appreciat

ion and d

idends pa

id.

Progress in 2023

Our TSR for the full year was 9.4%.

Combines simple share price appreciat

ion w

ith div

idends pa

id to show

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

return to shareholders.

Total shareholder return (TSR)¹

Alignment to

remuneration

Strategic report

Standard Chartered

– Annual Report 2023

Alignment to remuneration

Reward for all Group employees, includ

ing execut

ive

directors, continues to be aligned to the Group’s strategic

prior

ies, through our annual and long-term incent

ive

scorecards. Our approach to remuneration is consistent

for all employees and is designed to create alignment with

our Fair Pay Charter, which applies globally. However, our

pay structures may vary according to location (to comply

with local requirements). Variable remuneration falls into

two categories: annual incent

ive and a long-term

incent

ive

plan (LTIP) which are aligned to the KPIs ind

icated:

Annual incent

ive

based on measurable

performance criter

ia l

inked to the Group’s strategy

and assessed over a period of one year.

LTIP

awards are granted to senior executives who have

the abil

ity to

inﬂuence the long-term performance

of the Group. Awards are performance dependent

based on measurable, long-term criter

ia.

Read more in our Directors’ Remuneration Report

pages 182 to 207

Aim

Increase representation of women in senior leadership

roles¹ to 35 per cent by 2025.

Progress in 2023

In 2023, the proportion of senior leadership

roles occupied by women has increased to 32.5 per cent.

This is up by 0.4 percentage points from December 2022

(32.1 per cent) and 7 percentage points since December 2016

(25.3 per cent).

Senior leadership is deﬁned as Managing Director and Band 4 roles

(includ

ing Management Team).

Aim

Cumulative progress towards $300 bill

ion mob

isat

ion

target between 2021 and 2030.

Progress in 2023

We made strong progress against this

target during the year, see more on page 94.

Deﬁned as any investment or ﬁnanc

ial serv

ice provided to clients which

supports: (i) the preservation, and/or improvement of biod

ivers

ity, nature or

the environment; (i

i) the long-term avo

idance/decrease of GHG emiss

ions,

includ

ing the al

ignment of a client’s business and operations with a

1.5 degree Celsius trajectory (known as transit

ion ﬁnance); (

i) a social

purpose ; or (iv) incent

ing our cl

ients to meet their own sustainab

ity

objectives (known as susta

inab

ity-linked ﬁnance)

Figures reﬂect cumulative Sustainable Finance mobil

ised s

ince January

2021 up to September of each year. Values noted with a caret symbol (^)

are subject to independent lim

ited assurance by EY, report ava

ilable at

sc.com/sustainab

ityhub.

Divers

ity and

inclus

ion:

Women in senior roles

Mobil

isat

ion of Sustainable Finance

1,2

+0.4

ppt

+$29.8

32.5

2023

2022

32.1

2021

30.7

2020

29.5

2019

28.5

25.86

2023

2022

17.55

2021

12.94

2020

17.51

2019

11.51

87.2

bn^

2023

2022

57.4

2021

The Group announced this target in Q4 2021.

Aim

Improve the overall employee experience across the

Group by creating a better work environment for our

colleagues that should translate into an improved client

experience.

Progress in 2023

The eNPS score is up by 8.31 points to 25.86,

which is our highest ever score.

eNPS ranges from -100 to +100 and is based on a single question which

measures whether colleagues would recommend working for the Bank.

It is calculated by deducting percentage of detractors from percentage

of promoters.

Employee net promoter score

(eNPS)

+8.31

points

Non-ﬁnancial KPIs

Alignment to

remuneration

Alignment to

remuneration

Alignment to

remuneration

Standard Chartered

– Annual Report 2023

Strategic report

Market environment

Global macro trends

Market environment

Macroeconomic factors affecting the global landscape

Trends

in 2023

•

Global GDP growth continued to slow in 2023,

likely to 3.1 per cent, from 3.5 per cent in 2022,

as central banks continue to tighten policy and

the boost from post-pandemic reopening of

economies faded.

•

Asia was the best-performing region, recording

growth of 5.1 per cent, on strong momentum in

India and favourable base effects in China. Sub-

Saharan Africa likely saw growth of 3 per cent in

2023, nearly unchanged from 2022, supported by

domestic reform momentum in key economies.

•

Among the majors, despite a banking-sector cris

in the ﬁrst half of the year, the US recorded annual

growth of 2.5 per cent on the back of resil

ient

domestic demand, while growth slowed sharply in

the UK to 0.1 per cent.

•

The euro-area economy grew by 0.5 per cent

in 2023 following 3.4 per cent growth in 2022,

supported by household demand and a posit

ive

contribut

ion from exports

in H1.

•

In most majors, labour markets remained strong,

with low unemployment rates that helped support

consumer conﬁdence.

•

Major central banks like the Fed and ECB

continued to tighten monetary policy in the ﬁrst

three quarters of 2023 with a view to bring

ing

inﬂat

ion back to target levels. F

iscal policy

remained accommodative as governments tried

to shield consumers and businesses from still

elevated prices.

Outlook

for 2024

•

Global growth is likely to stay below-trend at

2.9 per cent in 2024 as high interest rates drag on

consumers as well as investment spending.

•

Asia will likely be the fastest-growing region and

will continue to drive global growth, expanding by

4.9 per cent. Among the majors, the US is expected

to experience below-trend growth of 1.8 per cent

in 2024, the UK will grow just 0.1%, while the euro

area is likely to see an overall modest expansion of

0.6 per cent.

•

Easing inﬂat

ion

is likely to allow major central

banks to start cutting rates from Q2 2024, with a

focus on supporting softening economic activ

ity.

•

Unfavourable 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 a sharper

than expected slowdown in major economies,

sustained inﬂat

ionary pressures, a slugg

ish

housing market in China, and another ﬂare-up of

geopolit

ical tens

ions.

Medium-

and long-

term view

High interest rate environment

•

Trade fragmentation and heightened geopolit

ical

risks and related supply disrupt

ions together w

ith

still resil

ient labour markets have the potent

ial to

keep inﬂat

ion elevated over the med

ium term.

•

Concerns about inﬂat

ion are l

ikely to see central

banks adopting a cautious approach to monetary

easing,

with the risk that rates stay elevated for

an extended period of time.

•

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.

•

There may be adverse environmental, agricultural,

and economic consequences of a severe El Niño

weather cycle. South Asia and Sub-Saharan Africa

economies are most at risk from the impact on

agricultural production; and although El Niño has

varying impacts on GDP growth, it is inﬂat

ionary

for most economies.

•

Growing trade fragmentation could undermine

the resil

ience of global

isat

ion, dr

ing up consumer

prices, and slowing the pace of economic

convergence for emerging markets.

Broader global trends

•

The world economy could see a permanent loss of

economic output or ‘scarring’ due to the recession

following 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,

includ

ing generat

ive artif

ial

intell

igence (AI).

•

Relatively younger populations, and the adoption

of dig

ital technology, w

ill allow emerging markets

to become increas

ingly

important to global

growth.

•

In order to meet net zero targets, energy-related

spending will have to increase sign

iﬁcantly;

headwinds include insuff

ient funds across

emerging markets, labour shortages and supply

chain constraints.

Standard Chartered

– Annual Report 2023

Strategic report

Regional outlook

•

China’s economic activ

ity rema

ins below potential, leaving room

for further recovery. We forecast 2024 growth at 4.8 per cent. The

post-COVID recovery has been disappo

int

ing, due to continu

ing

contraction of the property sector, a negative contribut

ion from

foreign trade, and a lack of conﬁdence on the part of consumers

and private businesses. While GDP growth picked up to 5.2 per cent

in 2023 on the reopening boost, policy support and a favourable

base, economic activ

ity

is currently 2–3 percentage points below

trend according to our estimate. We expect the government to set

a growth target of around 5 per cent in 2024, the same as in 2023, to

narrow the negative output gap and prevent deﬂation expectation

from becoming entrenched.

•

While housing market adjustment will likely continue, we expect

it to exert less of a drag on growth next year. The authorit

ies

have turned more supportive of the sector since the July Politburo

meeting, relaxing purchase restrict

ions, lower

ing mortgage rates,

accelerating renovation of urban villages, and pledging to meet

reasonable ﬁnancing need from el

ible property developers.

Consumption is likely to remain the key driver of the economy, with

consumers showing renewed will

ingness to draw on the

ir excess

savings. The easing bias of macro polic

ies

is likely to remain to

consolidate the recovery. We expect the People’s Bank of China to

increas

ingly rely on expans

ion of its balance sheet to inject ample

liqu

ity, keeping the credit condit

ion relat

ively easy. The ofﬁc

ial

budget deﬁcit may exceed the

impl

it ceil

ing of 3 per cent of GDP,

with the central government more will

ing to share the debt burden.

However, the upside is likely to be capped by private sector’s

hesitat

ion to expand

investment.

•

Hong Kong’s outlook remains challenging. We expect growth to

slow to 2.9 per cent in 2024 from 3.2 per cent in 2023, a reﬂection

of still cautious household and business sentiment. The posit

ive

factors, includ

ing a cont

inued normalisat

ion

in tourist arrivals and

a persistently tight labour market, may not be sufﬁc

ient to offset

a weak property market and elevated US interest rates that keep

weigh

ing on

investment appetite. We expect Korea’s growth to

accelerate to 2.1 per cent from 1.4 per cent in 2023, beneﬁt

ing from

a potential upcycle of semiconductors, but prolonged high-interest

rates and ris

ing commod

ity prices will adversely affect Korean

consumption and construction investment.

•

In India, we expect FY25 (year beginn

ing Apr

il 2024) GDP growth

to likely moderate to 6.3 per cent vs 6.8 per cent for FY24 amid

slower global growth, higher interest rates and slowing consumer

demand . However, the growth dynamics are likely to stay strong.

Ris

ing real wages are l

ikely to support rural demand and we expect

private capex recovery post national elections in April/May 2024;

the current ruling party is widely expected to return to power.

Meanwhile, inﬂat

ion pressures are expected to ease sl

ightly to 5 per

cent in FY25 vs 5.4 per cent in FY24. Hence, we see a shallow rate cut

cycle of 50 bps starting June 2024 amid easing global rates. Ample

foreign exchange (FX) reserves and yet another year of balance

of payment surplus led by index inclus

ion related

inﬂows, remain

a strong buffer for the economy and are likely to lim

it FX market

volatil

ity. The key r

isks to our view can emanate from higher oil

prices and/or tighter global ﬁnanc

ial cond

ions.

•

While global demand may remain soft in 2024, we expect the

external drag on externally oriented economies in Associat

ion of

South East Asian Nations (ASEAN), includ

ing S

ingapore, Vietnam,

Malaysia and Thailand, to be more moderate due to favourable

base effects. In addit

ion, a bottom

ing of the global electronics cycle

may help these economies, though we do not expect a sign

iﬁcant

recovery given weak external demand and uncertainty. Domestic

activ

ity may see consumpt

ion and investment sentiment partly

affected by higher interest rates and still-high inﬂat

ion earl

ier in

the year. But potential rate cuts and easing inﬂat

ion

in H2 and likely

stable labour markets should provide support. Election spending in

Indonesia may also provide a boost to consumption earlier in the

year. Tourism recovery may continue to bolster growth in 2024 but

the support may be fading. Inﬂation is expected to moderate in

2024 on favourable base effects and tighter monetary polic

ies but

upside risks arise from potentially higher food and energy prices,

especially with the latest developments in the Middle East.

•

Monetary policy in the region may remain tight for longer given

upside risks to inﬂat

ion, and th

is poses a downside risk to economic

growth, but some easing is expected in H2 which will help support

growth sentiment. On balance, growth may remain somewhat

subdued and sim

ilar to 2023, but lower

inﬂat

ion and rate cuts

in H2

may help offset a weaker H1.

Asia

Actual and projected growth by market in 2023 and 2024

4.8

2024

China

2023

2024

Hong Kong

Korea

India

Indonesia

2023

2024

2023

2024

2023

2024

2023

Singapore

2024

2023

1.1

5.2

2.9

3.2

2.1

1.4

6.3

6.8

5.2

5.1

2.6

See our regional performance on

page 31

Standard Chartered

– Annual Report 2023

Strategic report

Market environment

Regional outlook

continued

•

For Sub-Saharan Africa, external factors remain a key headwind.

Constrained or more expensive access to external ﬁnanc

ing

a challenge, especially given a concentration of external debt

maturit

ies

in the years ahead. Scaled-up multilateral support for

emerging and frontier economies is likely to be a partial mit

igant.

Whether the US

can avoid a hard landing will be key to risk

appetite. FX liqu

ity remains an issue, although encouragingly

FX reforms are now underway in key markets. Higher oil prices

may increase pressures. Common Framework debt restructuring

progress in Zambia and Ghana remains key to economic prospects,

as they look to build resil

ience to further shocks.

•

In Niger

ia, w

ith a new cabinet and central bank leadership in place,

we expect fuel subsidy and FX reforms to be completed in 2024.

New investment in LNG production and a scaling up of domestic

reﬁning capac

ity should add to economic resil

ience.

In South

Africa, while load shedding has improved, port and rail bottlenecks

may hold back growth. In Kenya, increased concessional ﬁnanc

ing

and a partial reﬁnanc

ing of the 2024 Eurobond have eased

external liqu

ity concerns, but ﬁscal consolidat

ion w

ill be key to

stabil

ing high debt levels.

•

Higher for longer rates, higher commodity prices and elevated

regional tensions highl

ight the d

ivergence between MENAP oil

exporting and oil import

ing econom

ies. The Gulf Cooperation

Council (GCC) is likely to continue using oil windfalls to reverse the

deteriorat

ion

in government balance sheets stemming from the

late-2014 and 2020 oil price shocks. The UAE, Oman and Qatar

have committed to de-leveraging alongside the rebuild

ing of

external buffers. In Saudi Arabia, drawdowns at the Central Bank

continue to support growing Public Investment Fund assets; robust

domestic investment and execution of giga-projects aim to expand

potential in the non-oil economy. Headline growth in Saudi Arabia

may be modest, given extension of oil output cuts. However, GCC

non-oil growth remains robust against external headwinds, aided

by lower levels of domestic inﬂat

ion.

See our regional performance on

page 32

•

The US economy has been resil

ient

in the face of sustained

monetary policy tighten

ing. But as cred

it growth slows, housing

affordabil

ity weakens and del

inquenc

ies r

ise as higher rates feed

through to the real economy, and we expect a slowdown in growth

over the course of 2024. In the euro area, we expect growth to be

elusive until rate cuts start in Q2, before pick

ing up modestly

in H2.

•

Headline inﬂat

ion has fallen sharply for both the US and Euro area,

but core inﬂat

ion st

ill remains off target. Central banks will remain

alert to any signs of renewed upside risks to inﬂat

ion, stemm

ing

from ongoing tight labour markets and geopolit

ical tens

ions.

•

The Fed and ECB have likely completed their rate-hik

ing cycles.

Lower inﬂat

ion leaves room for cuts from both central banks

beginn

ing

in Q2; we expect the Fed to deliver 100bps and the

ECB to deliver 125bps by end-2024.

•

There is likely to be less of a tailw

ind to growth

in Europe from

ﬁscal policy as new ﬁscal rules and higher interest rates force

consolidat

ion of budget deﬁcits, and programmes

introduced

during the 2022–2023 energy cris

is come to an end. The US

economy has beneﬁtted from ﬁscal support for infrastructure

investment, but this impulse is likely to fade in 2024.

•

In Latin America, weakening domestic demand, and a downtrend

in inﬂat

ion should support further monetary eas

ing by the region’s

central banks, most of which have already started rate cuts.

Lower interest rates are likely to support better recovery in H2 2024,

although sluggish external demand and tight global ﬁnanc

ial

condit

ions could be headw

inds.

See our regional performance on

page 33

Europe and

the Americas

Africa and the

Middle East

Actual and projected growth by market in 2023 and 2024

3.5

2024

Nigeria

2023

2024

UAE

2023

2.7

4.0

2.7

Actual and projected growth by market in 2023 and 2024

0.1

2024

2023

2024

USA

2023

0.1

1.8

2.5

Market environment

continued

Standard Chartered

– Annual Report 2023

Strategic report

Section heading



Zodia Custody and

Zodia Markets ﬂourish

in 2023



SC Ventures backed, UK-based Zodia Custody and Zodia

Markets both continued to grow in 2023. Zodia Custody – an

inst

itut

ion ﬁrst dig

ital asset custod

ian – launched in Australia,

Hong Kong, Japan, Luxembourg and Singapore and secured

$36 mill

ion

in Series A funding. Meanwhile, Zodia Markets – a

dig

ital asset brokerage and exchange platform - expanded

into UAE and was registered as a Virtual Asset Service Provider

with the Central Bank of Ireland.

Read more at

zodiamarkets.com

and

zodia.io

Standard Chartered

– Annual Report 2023

Strategic report

Standard Chartered

– Annual Report 2023

Strategic report

Business model

How we generate returns

We earn net interest income on loans and deposit products, fee income on ﬁnanc

ing

solutions, advisory and other services, and trading income from provid

ing r

isk

management in ﬁnanc

ial markets.

Income

Net interest income

Fee income

Trading income

Proﬁt after tax

Income gained from

provid

ing our products

and services minus

expenses, impa

irments

and taxes

Return on

tangible equity

Proﬁt after tax

generated relative to

tangible equity invested

Our business

Corporate, Commercial

and Institut

ional Bank

ing

(CCIB)

We support large corporates and ﬁnancial

inst

itut

ions across the world’s most

dynamic markets, helping unlock growth

opportunit

ies and create susta

inable value.

Ventures

We promote innovat

ion,

invest in disrupt

ive ﬁnancial technology and explore alternat

ive

business models. Our diverse portfolio of ventures includes two market-leading dig

ital banks

in Singapore and Hong Kong.

Consumer, Private and

Business Banking

(CPBB)

We support small and medium-sized

enterprises and ind

iduals, from Mass Retail

clients to Afﬂuent includ

ing h

igh-net-worth

ind

iduals, both dig

itally and

in person.

We help corporates and ﬁnancial

inst

itut

ions connect and maxim

ise

opportunit

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 ﬁnance

• Project and export

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 2023

Strategic report

How we are shaping our future

We have progressed strongly

in deliver

ing our strategy

to accelerate returns.

In 2022, we set out to uplift our return on tangible

equity (RoTE) to 10% by 2024. In 2023, we have

improved our RoTE to 10.1%, with strong progress in

deliver

ing aga

inst the ﬁve strategic actions we set

out to accelerate our returns:

•

Driv

ing

improved returns in CCIB: income return

on risk weighted assets further enhanced to 7.8%

(2022

: 6.2%) and plan to reduce $22bn of risk

weighted assets between 2022 and 2024 fully

delivered early during the year

•

Transforming proﬁtab

ity in CPBB: cost-to-income

ratio further improved to 60% (2022

: 69%),

supported by the continuous delivery of business

savings and dig

isat

ion programme

•

Seiz

ing opportun

ies

in China: China onshore

and offshore proﬁt before tax grown to $1.3bn

(increased 1.6 times vs. 2022

), despite recent

market challenges

•

Creating operational leverage by deliver

ing $1.3bn

of sustainable cost saves over 2022–2024: $0.4bn

of cost saves in 2023, bring

ing 2022–2023 total

to $0.9bn

•

Deliver

ing susta

inable shareholder distr

ibut

ions

in excess of $5bn over 2022–2024: $2.7bn total

distr

ibut

ions for 2023, bring

ing 2022–2023 total to

$4.5bn; plus a new $1bn share buyback programme

starting imm

inently

in 2024.

We have further optim

ised our bus

inesses and

footprint. In 2023, we completed the sale of our

Aviat

ion F

inance leasing business. For the seven

Africa and Middle East (AME) markets and two

addit

ional AME CPBB bus

inesses we announced to

exit in 2022, we have completed the sale of our Jordan

business and closed our Lebanon representative

ofﬁce, and have signed bind

ing agreements for the

divestment of the remainder.

The sign

iﬁcant progress we have made on our

strategic agenda has provided us with a strong

platform to grow and drive sustainably higher returns.

We target RoTE to increase steadily from 10%,

targeting 12% in 2026 and to progress thereafter.

Key actions for the next three years include:

•

Continue to deliver strong income growth targeting

5-7% income growth CAGR

for the next three years

•

Improving operational leverage through the Fit for

Growth programme, to simpl

ify, standard

ise and

dig

ise key elements of the Group, enabling the

Group to keep annual operating expenses below

$12bn in 2026

•

Continu

ing act

ive management of the Group’s

capital posit

ion, w

ith the target of a further capital

return of at least $5bn over the next three years.

Dist

inct

proposit

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 Part

ipat

ion and Resetting Globalisat

ion (see

page 26 for more) challenge us to use our unique posit

ion

articulated below.

Robust risk

management

We are here for the long term.

Effective risk management

allows us to grow a sustainable

business.

2022 ﬁgures restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion

Finance and (i

i) Debit Valuation Adjustment (DVA)

2 Compound Annual Growth Rate

Standard Chartered

– Annual Report 2023

Strategic report

Business model

Excludes CCIB, private bank and business banking clients

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

•

Upskill

ing and resk

ill

ing our people cont

inues to be

a prior

ity – more than 30,000 colleagues undertook

learning in 2023 to build future-ready skills, includ

ing

sustainable ﬁnance, data and analytics, dig

ital, cyber

security, and leadership.

•

We continue to strengthen a work environment that

supports inclus

ion,

innovat

ion, and h

igh performance,

with an ongoing focus on wellbeing. This includes

further embedding ﬂexible working across our

markets, provid

ing enhanced beneﬁts, and bu

ild

ing

the capabil

ies of our people leaders.

•

We continue to enhance our product, advisory and

dig

ital capab

ies to serve our ind

idual clients. In

2023, we launched more than 20 new dig

ital wealth

capabil

ies, made our Signature Chief Investment Ofﬁce

(CIO) funds available in 12 markets and launched new

dig

ital loan partnersh

ips.

•

In Business Banking, we continued to support the growth

of small and medium-sized enterprises by making dig

ital

loan orig

inat

ion available in ﬁve markets and expanding

the SC Women’s International Network, our offering for

women entrepreneurs, to ﬁve markets.

•

In 2023, we continued to invest in our brand through

our ‘Possib

ies are Everywhere’ global advert

ing

campaign, highl

ight

ing our dist

inct

ive brand promise to

be here for good and showcasing how we help people,

companies and communit

ies grow and prosper across

our internat

ional network.

•

We have been successful in leveraging our brand and

ins

ights to support bus

iness growth. Media sentiment

towards the Group continued to exceed the average for

the banking sector and ranked top three in most of our

key markets over 2023.

•

Our capital posit

ion rema

ins strong, with a CET1 ratio

of 14.1% at the end of 2023, above the target range of

13–14 per cent.

•

We continue to mainta

in a strong and res

ient fund

ing

proﬁle, with a Liqu

ity Coverage Ratio (LCR) of 145% and

a Net Stable Funding Ratio (NSFR) of 138% at the end

of 2023.

CET1 capital

Financ

ial strength

With $823bn in assets on our balance

sheet, we are a strong and trusted

partner for our clients.

$34

•

We are mainta

ing momentum on simpl

iﬁcation and

harmonisat

ion of our technology estate,

integrat

ing

platforms using the cloud where appropriate, and

invest

ing

in our engineer

ing capab

ies and best-in-

class tools to provide secure and resil

ient technology.

•

We are accelerating automation to optim

ise our

technology stack and enhancing the end-to-end

delivery from requirements to deployment via a

new, single platform that enables our colleagues to

collaborate on technology projects in a consistent and

efﬁcient manner.

•

We have continued deliver

ing value to our cl

ients

by improv

ing speed to market, as enabled by more

efﬁcient and scalable technology development and

delivery processes.

Consumer client

satisfact

ion metr

56.6

2022: 49.8%

International network

Our network is our unique competit

ive

advantage and connects companies,

inst

itut

ions and ind

iduals to, and in,

some of the world’s fastest-growing

and most dynamic regions.

Business model

continued

Technology

Our strong dig

ital foundat

ions and

leading technological capabil

ies

continue to enable a data-driven

dig

ital bank that del

ivers world-class

client service.

Local expertise

We are deeply rooted in our markets

with a strong understanding of key

economic drivers, offering us ins

ights

that help our clients achieve their

ambit

ions.

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.

Brand recognit

ion

We are a leading internat

ional

banking group with 170 years of

history. In many of our markets,

we are a household name.

•

Across our internat

ional network, we are

invest

ing

in capabil

ies such as dig

ital channels and cl

ient

experiences to access new high-growth segments,

grow our share of wallet with exist

ing cl

ients and

create new business model opportunit

ies.

•

We are strengthening our Transaction Banking, Financ

ial

Markets and Sustainable Finance solutions in CCIB and

Wealth Management offerings in CPBB to meet the

needs of our cross-border clients across our network.

Excludes CCIB and Business Banking clients.

Includes Private Banking. Restated for 2022

Standard Chartered

– Annual Report 2023

Strategic report

Read more on stakeholder

engagement on

pages 54 to 64

The value we create

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

Clients

We deliver banking solutions for our clients across our

network, both dig

itally and

in person. We help ind

iduals

grow their wealth while connecting corporates and

ﬁnancial

inst

itut

ions to opportunit

ies across our network.

Suppliers

We engage diverse suppliers, locally and globally,

to provide efﬁc

ient and susta

inable goods and

services for our business.

Corporate Taxes and Bank

Levy paid in 2023

$1,476

2022

: $926m

Regulators and governments

We play our part in supporting the effective function

ing

of the ﬁnancial system and the broader economy by

proactively engaging with public authorit

ies and by

paying our taxes.

Employees

We believe that 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 spend in 2023

$4.5

2022: $4.3bn

Active suppliers

11,600

2022: 11,700

Total active

ind

idual clients

Total CCIB and Business

Banking clients

11.8m

2022

: 10.4m

226,000

2022

: 232,000

Senior appointments

which are internal

2022: 67%

Employees committed

to our success

2022: 96%

Div

idends declared

in 2023

$728

2022: $523m

Share buy-backs in 2023

$2.0

2022: $1.3bn

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

$68.6

2022: $51.3m

Excluding customers served or supported by Ventures segment

2022 ﬁgures restated for the removal of (i) exit markets and businesses in AME and (i

i) Av

iat

ion F

inance

2022 restated to include bank levy

Standard Chartered

– Annual Report 2023

Strategy

Strategic report

Over the past year, we have executed strongly against our

strategy, with a considerable uplift in our return on tangible

equity (RoTE) delivered.

We continue to 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.

While the macroeconomic and industry environments

continue to evolve, we believe the strategy remains ﬁt for

the Bank.

Our strategic prior

ies and enablers will continue to be

supported by our three Stands: Accelerating Zero, Lift

ing

Partic

ipat

ion and Resetting Globalisat

ion (please ﬁnd more

details of our Stands on page 26).

Crit

ical enablers

Innovation

We embed innovat

ion through

dig

ing our core, leverag

ing

partnerships to drive scale and

extended reach, and build

ing new

business models through ventures.

We continue to focus on:

• Modernis

ing and strengthen

ing

our technology estate and data

management

• Exploring and experiment

ing

to enhance client experience,

develop new platforms and

improve operational resil

ience

• Leveraging partnerships to

access new clients and strengthen

our capabil

ies

•

Build

ing, launch

ing, and scaling

innovat

ive ventures wh

ile driv

ing

ventures’ collaboration with the

broader Bank and its clients.

People

and Culture

We invest in our people by build

ing

future-ready skills, provid

ing a

different

iated employee exper

ience,

and strengthening our inclus

ive and

innovat

ive culture. We do th

is by:

• 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

towards future roles and work,

aligned with our business strategy

and workforce’s aspirat

ions

• Strengthening leadership

capabil

ity through modern

ised

development programmes and

measurement platforms

•

Focusing on wellbeing to enhance

resil

ience, product

ity and

performance, as well as offering

progressive, purpose-led beneﬁts

• Further embedding ﬂexible

working across our footprint,

with over 52,000 employees in

44 markets now on agreed

ﬂexi-working arrangements.

Ways of Working

We drive client-centric

ity w

ith a focus

on speed to value for our clients.

We are improv

ing our operat

ing

rhythm and organisat

ional ag

ity

while empowering our people to

continuously improve the way

we work.

We continue strong progress on:

• Simpl

ify

ing and transforming

the way we invest, operate

and execute

• Harnessing operational efﬁc

ienc

ies

to help us continue the drive of

commerce and prosperity in

our markets

•

Enhancing the way we deliver and

manage change across the Bank,

anchored around simpl

ify

ing our

processes end-to-end

Women in senior roles

32.5

2022: 32.1%

Culture of inclus

ion score

83.2

2022: 83.1%

Speed to value

150

days

2022: 160 days

Percentage of revenue

from new businesses

2022: 22%

Speed to value measures the time taken to deliver a change from ideat

ion t

ill customer go-live and is based on the weighted average of lead time across

Corporate, Commercial and Institut

ional Bank

ing (CCIB) and Consumer, Private and Business Banking (CPBB) businesses.

Excludes CCIB and Business Banking clients. Includes Private Banking. Restated for 2022.

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 per cent of Ventures income.

To become a

leader in global

ﬁnance

Our strategy

Consumer client satisfact

ion metr

56.6

2022: 49.8%

Standard Chartered

– Annual Report 2023

Strategic report

Sustainab

ity

We aim to support the sustainable economic and social

development of our markets, helping people to thrive long-term.

In line with our Stands, we are committed to accelerating the

transit

ion to net zero, l

ift

ing part

ipat

ion in the economy and

resetting globalisat

ion. Our focus

includes:

•

Continu

ing to scale our susta

inable and transit

ion ﬁnance

business by integrat

ing susta

inab

ity as a core component of

our value proposit

ion and enhanc

ing our suite of Sustainable

Finance products and solutions across CCIB and CPBB

•

Progressing on our pathway to achieve net zero ﬁnanced

emiss

ions by 2050,

includ

ing sett

ing inter

im 2030 targets for

addit

ional h

igh-emitt

ing sectors and enhanc

ing our exist

ing

climate risk governance and management processes

•

Contribut

ing our sk

ills, experience and networks to in

iat

ives

and coalit

ions that a

im to further develop the global

sustainab

ity ecosystem

•

Seeking to partner with our clients and communit

ies to

mobil

ise soc

ial capital and drive economic inclus

ion and

entrepreneurship through our Futuremakers global in

iat

ive.

Cumulative Sustainable

Finance mobil

ised s

ince 2021

$87bn

2022: $57bn

Mass Retail business

Mass Retail is strategically important to our client

continuum. It demonstrates our deep local expertise,

commitment to and relevance in the markets where we operate.

Besides provid

ing a cont

inuous stream of clients who become

more afﬂuent over time, Mass Retail underscores our

commitment to lift

ing part

ipat

ion in the communit

ies we serve.

Our focus is on:

•

Continu

ing the p

ivot towards a dig

ital-ﬁrst model to become

more personalised, relevant and real-time

•

Sharpening our onboarding and engagement capabil

ies

through dig

ital sales and market

ing, advanced analytics

capabil

ies and straight-through self-service

•

Launching and developing new business models with

leading global and regional partners to leverage synergies in

distr

ibut

ion, dig

ital capab

ies and risk management to serve

customers at scale.

Active Mass retail

clients

9.5m

2022

: 8.3m

Percentage of dig

ital

sales for Retail Products

Sustainable Finance

income in 2023

2022: 48%

$720

2022: $508m

Strategic prior

ies

Network business

Through our unique network, we enable global trade and

investment through ﬁnanc

ing, payments, asset or

inat

ion

and risk management, with an increas

ing focus on

Sustainable Finance.

Our on-the-ground presence and capabil

ies in more than

50 markets give us an advantage in advice and deal execution

for corporates and ﬁnancial

inst

itut

ions by:

•

Helping our clients seize opportunit

ies

in shift

ing supply cha

ins,

tapping into exist

ing and emerg

ing trade and investment

corridors such as intra-Asia, and supporting our European

and American clients’ access to emerging markets assets

•

Continuously improv

ing cl

ient experience with market-

leading dig

ital platforms that allow seamless onboard

ing,

client servic

ing and appl

icat

ion programm

ing interface (API)

connectiv

ity

•

Developing different

iated propos

ions

in high-returning, high-

growth sectors such as Technology, Media & Telecom (TMT),

Healthcare, Cleantech and Electric Vehicles.

CCIB network income

$6.9

2022

: $5.2bn

Percentage of CCIB

transactions dig

itally

iated

65.7

2022: 61.5%

Afﬂuent client business

We offer comprehensive solutions, personalised advice,

and exceptional client experiences to help our Afﬂuent

clients manage and grow their wealth, at home and abroad.

As a leading internat

ional wealth manager, we are

strengthening our competit

ive advantage by:

•

Unlocking the value of our network, leveraging our wealth

hubs in Hong Kong, Singapore, UAE and Jersey to deliver

a seamless global proposit

ion and cl

ient experience with

wealth, advisory and dig

ital capab

ies

•

Maxim

ing synergies across our client portfolios and the Bank

by nurturing clients up the Afﬂuent client continuum with our

deep local expertise and different

iated propos

ions, and by

partnering with CCIB to offer solutions such as real estate and

acquis

ion ﬁnanc

ing to ultra-h

igh-net-worth clients

•

Deliver

ing expert adv

ice and dig

ital-ﬁrst wealth solut

ions via

an open architecture approach, supported by investments in

innovat

ion and scalable platforms.

Afﬂuent client income

$4.6

2022

: $3.7bn

Active Afﬂuent clients

2.3m

2022

: 2.1m

2022 ﬁgures restated for removal of (i) exit markets and business in Africa and Middle East (AME) and (i

i) Av

iat

ion F

inance.

2022 ﬁgures restated for removal of exit markets and business in AME.

Deﬁned as any investment or ﬁnanc

ial serv

ice provided to clients which supports: (i) the preservation and/or improvement of biod

ivers

ity, nature or the

environment; (i

i) the long-term avo

idance/decrease of greenhouse gas (GHG) emiss

ions,

includ

ing al

ignment of a client’s business and operations with

a 1.5 degrees Celsius trajectory (known as transit

ion ﬁnance); (

i) a social purpose; or (iv) incent

ises clients to meet their own sustainab

ity object

ives

(known as sustainab

ity-linked ﬁnance).

January 2021 to September 2023 cumulative progress towards $300 bill

ion mob

isat

ion target by 2030.

January 2021 to September 2022 cumulative progress towards $300 bill

ion mob

isat

ion target by 2030.

Deﬁned as income generated from Sustainable Finance products as listed in the Green and Sustainable Product Framework. For further informat

ion, please refer

to pages 99 to 101.

Standard Chartered

– Annual Report 2023

The world must reach net zero carbon

emiss

ions by 2050 to l

it the worst

effects of climate change. This will

require efforts across stakeholder

groups to accelerate the transit

ion to a

low-carbon, climate-resil

ient economy.

Policymakers, corporates and ﬁnanc

ial

inst

itut

ions must play a substantial

part in this to ensure that ﬁnance is an

enabler of change. The need for a just

transit

ion that addresses env

ironmental

challenges, while ensuring inclus

ive

economic and social development in

the footprint markets where we operate,

is a prior

ity for the Group.

Our Stands

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 to

grow their businesses. We want to

increase access to ﬁnanc

ial serv

ices

and make them available at low cost.

We strive to expand the reach and scale

of accessible banking and to connect

clients and our wider communit

ies to

the skills and educational opportunit

ies

that promote and sustain access to

ﬁnance and economic opportunity.

Globalisat

ion has l

ifted mill

ions out

of poverty but left many behind.

We advocate for a new model of

globalisat

ion based on transparency

to build trust, renew conﬁdence and

promote dialogue and innovat

ion.

We connect the capital, expertise and

ideas needed to drive new standards

and create innovat

ive solut

ions for

sustainable growth. We work

across our markets to shape a new

understanding of growth, one that

is based on inclus

ity, sustainab

ity

and our ambit

ion to support people

and communit

ies for the long term.

Strategic report

Our Stands

Accelerating

Zero

Lift

ing

Partic

ipat

ion

Resetting

Globalisat

ion

Strategic report



SC Ventures

launches Tawi



In May, SC Ventures, our innovat

ion, ﬁntech

investments and ventures arms, launched

Tawi – an Agritech B2B marketplace for

smallholder farmers in Kenya. As part of the

Tawi marketplace, farmers have access to an

e-commerce platform helping them connect

with commercial kitchens and reduce post-

harvest losses.

Tawi also helps improve price transparency and

efﬁcient supply cha

in management. By the end

of 2023, Tawi had onboarded more than 1,000

farmers (65 per cent women), more than 700

commercial kitchens (34 per cent women-led

businesses) and fulﬁlled more than 6,000 orders.

Tawi is also working to launch ﬁnanc

ial serv

ices

includ

ing agr

i-loans, savings and working capital

to enhance ﬁnancial

inclus

ion.

Read more at

tawifresh.com

Strategic report

Standard Chartered

– Annual Report 2023

Standard Chartered

– Annual Report 2023

Strategic report

Client segment reviews

We are also committed to promote sustainable ﬁnance in

our markets and channeling capital to where the impact will

be greatest. We are deliver

ing on our amb

ion to support

sustainable economic growth, increas

ing support and fund

ing

for ﬁnancial offer

ings that have a posit

ive

impact on our

communit

ies and env

ironment.

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 a dig

ital-ﬁrst and data-dr

iven bank, that delivers enhanced

client experiences

•

Accelerate our sustainable ﬁnance offering to our clients through

product innovat

ion and enabl

ing transit

ion to a low-carbon future

Progress

•

Our underlying income performance is driven by our divers

iﬁed

product suite and expanded client solutions supported by the

higher interest rate environment. Our cross-border income currently

contributes to 61 per cent of total CCIB income with growth across

strategic corridors

•

Robust balance sheet quality with investment-grade net exposures

representing 66 per cent of total corporate net exposures (2022:

70 per cent) and high-quality operating account balances broadly

stable at 65 per cent of Transaction Banking and Securit

ies Serv

ices

customer balances (2022: 67 per cent)

•

We defended against liab

ies attr

ion through act

ive pric

ing

management

•

Our client migrat

ion to the Stra

ight to Bank NextGen platform

is successfully completed. We achieved dig

ital adopt

ion of

65.7 per cent (2022: 61.5 per cent) across Cash, Trade and FX,

by driv

ing cl

ient awareness and adoption programs. Client

experience remains at the centre of our dig

ital transformat

ion,

with our Net Promoter Score at 78.6 per cent (2022: 68.4 per cent)

•

We are ~70% of the way towards deliver

ing our $1 b

ill

ion

income

from sustainable ﬁnance franchise by 2025, and have mobil

ised

$87 bill

ion

in sustainable ﬁnanc

ing aga

inst our $300 bill

ion

commitment by 2030

Performance highl

ights

•

Underlying proﬁt before tax of $5,436 mill

ion up 42 per cent at

constant currency (“ccy”), primar

ily dr

iven by higher income

and lower credit impa

irment charges, part

ially offset by

higher expenses

•

Underlying operating income of $11,218 mill

ion up 20 per cent at ccy

primar

ily due to strong performance

in Cash Management from

pric

ing d

isc

ipl

ine in a ris

ing

interest rate environment. Financ

ial

Markets was down 2 per cent at ccy, mainly from lower revenue

in FX and Commodit

ies on the back of lower market volat

ity,

subdued primary issuances and non-repeat of the gains on

mark-to-market liab

ies

in 2022. Excluding the latter, Financ

ial

Markets was up 3 per cent

•

Underlying operating expenses were up by 10 per cent at ccy

largely due to inﬂat

ionary pressure, targeted

investments

and

strategic hires to support business growth

•

Risk-weighted assets were down by $1.6 bill

ion s

ince 31 December

2022, mainly as a result of optim

isat

ion in

iat

ives partly offset

by business growth. We achieved $10.3 bill

ion opt

isat

ion in

risk-weighted assets in 2023 ($24.2 bill

ion s

ince January 2022)

•

Underlying RoTE increased from 13.4 per cent to 19.5 per cent

Corporate,

Commercial and

Institut

ional Bank

ing

KPIs

Contribut

ion of F

inanc

ial Inst

itut

ions segment

to total income

Aim:

Drive growth in high-returning Financ

ial Inst

itut

ions segment.

Analysis:

Share of Financ

ial Inst

itut

ions

income improved to 49 per cent

in 2023 as we applied continued focus to this segment to drive income

and returns.

Income Return on risk-weighted assets (Income RoRWA)

Aim:

Achieve RoRWA of 6.5% by 2024.

Analysis:

CCIB income RoRWA improved to 7.8% in 2023, up 160bps

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

disc

ipl

ined risk management.

Risk-weighted assets (RWA)

$142bn

$1.6bn

Proﬁt before taxation

$5,436

42%

underlying basis

$5,747

49%

reported basis

Return on tangible equity (RoTE)

19.5

610bps

underlying basis

7.8

2023

2022

2021

6.2

4.7

2023

2022

2021

20.6

700bps

reported basis

Segment overview

Corporate, Commercial and Institut

ional Bank

ing supports

local and large corporations, governments, banks and

investors with their transaction banking, ﬁnanc

ial markets

and borrowing needs. We provide solutions to nearly 20,000

clients in some of the world’s fastest-growing economies

and most active trade corridors. Our clients operate or invest

across 45 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.

Corporate, Commercial and Institut

ional Bank

ing is at the

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

prosperity through our unique divers

ity.

Standard Chartered

– Annual Report 2023

Strategic report

We are committed to realis

ing greater synerg

ies from our

internat

ional network and the Group’s other cl

ient segments,

from deliver

ing hol

ist

ic propos

ions to cl

ients with cross-

border investment needs to offering employee banking

services to Corporate, Commercial and Institut

ional Bank

ing

clients. Consumer, Private and Business Banking also provides

a source of high-quality liqu

ity for the Group.

Strategic prior

ies

•

Maxim

ise the value of our

internat

ional network, w

ith wealth

hubs in Hong Kong, Singapore, UAE and Jersey, to provide

Afﬂuent clients with a global wealth proposit

ion bu

ilt on deep

local expertise and seamless cross-border client experience

•

Unlock synergies from nurturing clients up our client continuum,

by helping them grow and protect their wealth through expert

advice and best-in-class wealth proposit

ions

•

Grow Mass Retail proﬁtably, via dig

ital-ﬁrst sales and serv

ice

business models, partnerships, and data analytics

•

Continue to improve client experience and efﬁc

iency through

dig

ital

isat

ion, process s

impl

iﬁcation and operat

ional excellence

Progress

•

Accelerated Afﬂuent growth momentum in New to Bank clients,

NNM and income across Prior

ity Bank

ing and Private Bank

•

Rolled out Standard Chartered-INSEAD Wealth Academy to

more markets with over 900 senior frontline staff upskilled to be

future-ready advisors

•

Enhanced cross border dig

ital capab

ies to improve client

experience

•

Expanded myWealth suite of dig

ital adv

isory tools to enable RMs

to provide personalised portfolio construction and investment

ideas for clients

•

Recognised as a leader in dig

ital Wealth capab

ies with

20 industry awards received in 2023

•

Enhanced dig

ital capab

ies in key markets focusing on frict

ionless

mobile experience, leading to an average rating of 4.6 on App Store

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

•

Continued to transform our Mass Retail business by scaling

sustainably through partnerships, dig

ital cl

ient engagement,

and automation

•

Eight Mass Retail partnerships live across our footprint in China,

Indonesia, Vietnam and Singapore, reaching more than 2.6 mill

ion

clients

Performance highl

ights

•

Underlying proﬁt before tax of $2,487 mill

ion was up 60 per cent at

ccy driven by higher income, offsetting higher expenses and higher

credit impa

irments

•

Underlying operating income of $7,106 mill

ion was up 19 per cent

(up 22 percent at ccy). Asia was up 20 per cent at ccy and Africa

and the Middle East was up 36 per cent at ccy

•

Strong income growth mainly from Deposits up 76 per cent at ccy

with improved margins and balance sheet growth coupled with

10 per cent (ccy) growth from Wealth Management. This offsets

lower income in Mortgages, and Unsecured Lending largely due to

margin compression impacted by a ris

ing

interest rate environment

•

Underlying RoTE increased from 15.8 per cent to 25.3 per cent

Consumer, Private

and Business Banking

KPIs

Afﬂuent Net New Money (NNM)

Aim:

Acquire NNM from new and exist

ing Afﬂuent cl

ients, via

innovat

ion, adv

isory-led and dig

ital-ﬁrst Wealth propos

ions.

Analysis:

Afﬂuent NNM increased by 50% YoY in 2023, supported

by strong new-to-bank client acquis

ion momentum, cross-border

referrals and dig

ital-dr

iven client engagement

Dig

ital Sales for Reta

il Products

Aim:

Sharpen our on-boarding and engagement capabil

ies

through dig

ital sales and market

ing, advanced analytic capabil

ies

and straight-through self-service to improve client experience

and efﬁciency

Analysis:

Dig

ital onboard

ing for Retail Products has seen sign

iﬁcant

growth increas

ing to 56%

in 2023 vs. 41% in 2021.

Risk-weighted assets (RWA)

$51bn

$0.6bn

Proﬁt before taxation

$2,487

60%

underlying basis

$2,427

63%

reported basis

Return on tangible equity (RoTE)

25.3

950bps

underlying basis

2023

2022

2021

29.1

2023

2022

2021

19.4

18.1

24.7

950bps

reported basis

Segment overview

Consumer, Private and Business Banking serves more than

11 mill

ion cl

ients in many of the world’s fastest-growing

markets. Our client continuum spans from Mass Retail to

Afﬂuent, includ

ing h

igh-net worth clients served by our

Private Bank. We leverage dig

ital bank

ing channels with a

human touch to provide clients with different

iated products

and services such as deposits, payments, ﬁnanc

ing, wealth

management and personalised advice. We also support

small business clients with their business banking needs.

Standard Chartered

– Annual Report 2023

Strategic report

Client segment reviews

Ventures

KPIs

Gross Transaction Value

$18

$2bn

Customers

Loss before taxation

$408

12% underlying basis

External Funds Raised

$64

41%

Risk-weighted assets (RWA)

$1.9

$0.6bn

New Ventures launched

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.

Through its fund SC Ventures advances the Fintech agenda by

ident

ify

ing, partnering, and taking minor

ity

interests in companies,

which can be integrated into the Bank and Ventures. Focus is on

innovat

ive, fast-grow

ing, 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 set the global benchmark for dig

ital

banking from Hong Kong. It aims to be the leading Hong Kong

virtual bank for Cards, Dig

ital Lend

ing and continues to further

expand services, includ

ing the recent launch of D

ital Wealth

Management services.

•

Trust Bank

aims to become the fourth largest dig

ital reta

il bank in

Singapore by the end of 2024. To achieve this, it will scale through

its partner ecosystem and deepen its customer relationsh

ips w

ith

the mass and mass afﬂuent customer segments.

Progress

•

Business performance in 2023 saw continued posit

ive momentum

for

SC Ventures

– ﬁve ventures were launched, funds were raised

amidst a challenging environment, geographical reach was

expanded, and the business exited two investments successfully.

As a result, the SC Ventures customer base grew by 25 per cent to

reach 587,000 with Gross Transactional Value (GTV) growing by

15 per cent to $18 bn. One sign

iﬁcant m

ilestone for SC Ventures in

2023 was the establishment of a partnership with SBI Holdings

setting up a $100m dig

ital asset joint venture

in the UAE, a region

fast becoming a hub for ﬁntechs in the dig

ital asset space.

SC Ventures, through a number of innovat

ive ﬁntech ventures

(such as Shoal, Tawi and myZoi), continues to drive sustainab

ity,

ﬁnancial

inclus

ion and ﬁnancial l

iteracy for the underbanked.

• In 2023,

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 523,000 customers,

up 1.2 times YoY, with customers holding an average of 3.1x

products. It delivered close to three times YOY growth in revenue

with both deposits and lending expanding over 30 per cent YOY

basis. Mox reached 36 per cent (ranked #1) and 30 per cent of

(ranked #2) market share in lending and deposits respectively

among all Hong Kong virtual banks in H1. The bank was recognised

in Forbes’ World’s Best Banks 2023, and The Asian Banker Hong

Kong Awards 2023 as the Best Dig

ital-only Bank

in Hong Kong,

and was ranked ﬁfth in the World’s Top 50 Dig

ital Banks 2023 by

The Dig

ital Banker. The Mox app

is the top-rated Hong Kong virtual

banking app in Apple App Store. Mox consistently has the best

Net Promoter Score (NPS) among all Hong Kong virtual banks.

•

Trust Bank

continued to scale and, by reaching 12 per cent market

share a year after launch, became one of the world’s fastest

growing dig

ital banks. Product development rema

ined on track,

with the launch of unsecured loans, supplementary credit cards,

and broadening of the general insurance offering. By the end of

2023, its customer base had grown 1.7 times YoY to 700,000

customers and deposit balances had grown 3.0 times YoY to $1.4bn.

Customer engagement remained strong with card activat

ion

of 85 per cent and more than 2m dig

ital coupons redeemed by

customers in the Trust ecosystem. In its ﬁrst year of operation,

Trust was recognised as the best dig

ital reta

il bank in Singapore

and Southeast Asia by The Dig

ital Banker and was the number

one rated banking app in the Singapore Apple App Store.

Performance highl

ights

•

Underlying loss before tax of $408 mill

ion was up $45 m

ill

ion,

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

and exist

ing ventures.

•

Risk-weighted assets of $1.9 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

2023

2022

2021

1.8

2023

2022

2021

1.3

0.5

Segment overview

Formed in 2022 the Ventures client segment is a consolidat

ion

of SC Ventures and its related entit

ies as well as the Group’s

two majority-owned d

ital banks Mox

in Hong Kong and

Trust in Singapore.

•

SC Ventures

is the platform and catalyst for the Group to

promote innovat

ion,

invest in disrupt

ive ﬁnancial technology

and explore alternative business models. It represents a

diverse portfolio of over 30 ventures and more than

20 investments.

•

Mox

, a cloud-native, mobile only dig

ital bank, was launched

in Hong Kong as a jo

int venture w

ith HKT, PCCW and Trip.

com in September 2020.

•

Trust Bank

is Singapore’s ﬁrst cloud-native bank and

was launched in a partnership with FairPr

ice Group

September 2022.

Customer numbers for 2021 and 2022 normalised for the exit of Cardspal

in 2023

Standard Chartered

– Annual Report 2023

Strategic report

Region overview

The Asia region has a long-standing and deep franchise

across 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-engines of 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 where we now earn two

dollars offshore from Chinese clients for every dollar we earn

onshore, the growing connectiv

ity of ASEAN and the strong

economic growth in India.

The region is beneﬁt

ing from r

ing trade ﬂows, espec

ially

intra-Asia, continued strong investment, and a ris

ing m

iddle

class which is driv

ing consumpt

ion growth and improv

ing

dig

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,

China-AME and KR-ASEAN

•

Capture and monetise opportunit

ies ar

ing from Ch

ina’s opening

and accelerate growth in 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 client experience and build scale

efﬁciently

•

Support clients’ sustainable ﬁnance and transit

ion needs and

continue to strengthen our thought leadership status

Progress

•

We continue to advance our China strategy both on- and off-shore,

and have also made a material increase in both the number of, and

the income contribut

ion from New to Bank afﬂuent Ma

inland China

customers and adding new clients through dig

ital partnersh

ips.

The China business delivered record income on-shore and has

grown network income strongly along a number of key corridors in

ASEAN, up 53 per cent and ME up 67 per cent YoY. We have also

made progress with

dig

ital partnersh

ips launching new

partnerships JD.com and KCB.

•

Strong Asia cross border momentum includ

ing Ind

ia Singapore

corridor up 29 per cent YoY highl

ight

ing the role of Singapore as

a ﬁnancial hub for cl

ients in ASEAN as well as India

•

Our two strong internat

ional ﬁnancial hubs

in Hong Kong and

Singapore, delivered strong income growth driven by Wealth

Management with Afﬂuent clients, increased Financ

ial Markets

activ

ity w

ith Corporate and Institut

ional cl

ients and a material

improvement in the net interest margin.

•

Our dig

ital agendas have progressed; and our v

irtual bank Mox

has the largest loan book and the 2nd largest deposits base

among virtual banks in Hong Kong, while our dig

ital bank Trust,

is becoming one of the world’s fasting growing dig

ital banks;

more than one in ten Singaporeans now bank with Trust.

Performance highl

ights

•

Underlying proﬁt before tax of $4,740 mill

ion was up 32 per cent at

constant currency (ccy) on the back of higher income and lower

credit impa

irment, part

ially offset by 8 per cent (ccy) increase in

operating expenses

•

Underlying operating income of $12,429 mill

ion was up 15 per cent

at ccy, mainly from strong double-dig

increases across Cash

Management and Retail Deposits, underpinned by expansion in

margins and Wealth Management partly offset by lower Mortgage

income and a loss in Treasury Markets

•

Credit Impairment improved 18 per cent year-on-year (YoY)

•

Loans and advances to customers were down 5 per cent (reported

and ccy); Customer accounts were up 9 per cent (reported and ccy)

YoY

•

Risk-weighted assets up $5 bill

ion YoY

•

RoTE increased to 16.4 per cent from 11.9 per cent in FY22

Asia

Proﬁt before taxation

$4,740

32%

underlying basis

Risk-weighted assets (RWA)

$156

$5bn

$3,812

16%

reported basis

Income split by key markets

Loans and advances

to customers

(% of group)

Hong Kong

Singapore

India

Others

Strategic report

Regional reviews

Standard Chartered

– Annual Report 2023

Strategic report

Regional reviews

Region overview

We have a rich heritage in Africa and the Middle East (AME)

with deep client relationsh

ips and h

istor

ical contr

ibut

ions

to the economy and the communit

ies. Our 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 becoming increas

ingly

important for 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 macro-economic

tailw

inds, h

igher government spend in divers

iﬁed areas,

bilateral trade negotiat

ions and evolv

ing economic

partnerships. The macro-economic risk remains elevated in

some markets in the region due to a high level of sovereign

debt and FX liqu

ity challenges, but they remain integral to

the economic corridors for our global clients. 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 cl

ients.

Strategic prior

ies

•

Provide best-in-class structuring and ﬁnanc

ing solut

ions and drive

creation through client in

iat

ives

•

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

•

Simpl

ify footpr

int and refocus on strategic growth areas

Progress

•

Topped the regional DCM league tables for the tenth consecutive

year and secured the ﬁrst rank in GCC G3 Bond and Sukuk issuance

•

Supported Sustainable Finance across our footprint through our

comprehensive product offering. ESG DCM volumes across the

Middle East grew by over 160 per cent year on year, on the back of

some of the largest and most innovat

ive ESG deals

in the region

•

Strong cross-border income growth of 39 per cent with broad-

based growth across all our key corridors

•

Further embedded our International Banking proposit

ion,

activat

ing our d

iverse footprint across Africa and the Middle East.

This has resulted in more than 150 per cent growth in Prior

ity

Banking client base across our International Banking corridors

for the region

•

Enhanced our dig

ital offer

ing in Africa by becoming the ﬁrst

internat

ional bank w

ith dig

ital ﬁxed

income solutions in Kenya,

Niger

ia and Ghana, extend

ing our micro-investment solution (SC

Shill

ing

i) to Uganda, and launching dig

ital personal loans

in Kenya

•

Our Saudi franchise saw strong growth following the branch set-up

in 2021 while a new branch launched recently in Egypt provides

addit

ional growth opportun

ies

in the region

•

The sale of the Jordan business has been completed and buyers

have been announced for select sub-Saharan African businesses

that were ident

iﬁed for ex

it as part of our strategic announcement

in 2022

•

Sustained productiv

ity act

ions have resulted in an improved Cost

to Income Ratio at 56 per cent (vs. 63 per cent in FY‘22) and

an improvement in productiv

ity w

ith income per headcount

(up 18 per cent year-on-year)

Performance highl

ights

•

Underlying proﬁt before tax of $1,311 mill

ion, the h

ighest annual

proﬁt since 2015, was up 66 per cent (up 90 per cent at ccy), driven

by higher income and a net release in credit provis

ions part

ially

offset by an increase in expenses

•

Underlying operating income of $2,806 mill

ion was up 14 per cent

(up 26 per cent at ccy) with strong growth in Cash Management,

Retail Deposits and Financ

ial Markets. Income was up 29 per cent

(up 38 per cent at ccy) in Middle East, North Africa, Pakistan, up

1 per cent (up 14 per cent at ccy) in Africa

•

Credit Impairment net release of $91 mill

ion

in FY23 compared to

$119 mill

ion charge

in FY22 reﬂecting a non-repeat of the prior year’s

sovereign related impa

irments and releases relat

ing to histor

CCIB provis

ions

•

Loans and advances to customers were up 8 per cent YoY

(up 15 per cent at ccy) and customer accounts were up 4 per cent

(up 9 percent at ccy) since 31 December 2022

•

Risk-weighted assets were 6 per cent lower than 31 December 2022,

despite the impact of sovereign downgrades, due to continu

ing

RWA optim

isat

ion activ

ies, de-risk

ing

in markets with elevated

macro-economic risk and currency devaluation

•

RoTE increased to 16.6 per cent from 9.3 per cent in FY22

Africa and the

Middle East

Proﬁt before taxation

$1,311

90%

underlying basis

Risk-weighted assets (RWA)

$38.4

$2.3bn

$1,317

87%

reported basis

Loans and advances

to customers

(% of group)

Income split by key markets

UAE

Pakistan

Kenya

Others

Standard Chartered

– Annual Report 2023

Strategic report

Region overview

The Group supports clients in Europe and the Americas

through hubs in London, Frankfurt and New York as well

as a presence in several other markets in Europe and Latin

America. 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 the Americas contribute over

one-third of the Group’s CCIB client income. Over three-

quarters of client income is 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

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

payment clearing centres and the largest trading ﬂoor.

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 FI Franchise

•

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 33 per cent in global cross-border network

business with Europe and the Americas CCIB clients across key

footprint markets

•

Financ

ial Inst

itut

ions segment growth of 32 per cent, now

accounting for 60 per cent of the CCIB business for European

and Americas clients.

•

Material growth in income from sustainable ﬁnance products

and expansion of our sustainable product offering

•

In CPBB we see posit

ive momentum on Net New Money

in 2023

coupled with strong growth in mortgage balances for our high

net worth clients

Performance highl

ights

•

Underlying loss before tax of $330 mill

ion dr

iven by lower income

and increased expenses

•

Underlying operating income of $1,397 mill

ion was down 40 per

cent reﬂecting the increased cost of hedges with

in Treasury wh

ilst

strong growth in Transaction Banking income was partly offset by

lower Financ

ial Markets

income

•

Expenses increased by 12 per cent at ccy largely due to increased

investment spend and the impact of inﬂat

ion

•

Credit impa

irments for the reg

ion remain well controlled

•

FY23 RoTE negative 3.6 per cent down from 8.6% per cent in FY22

Europe and

the Americas

Loss before taxation

$330

139%

underlying basis

Risk-weighted assets (RWA)

$46.1

$4bn

$28

103%

reported basis

Income split by key markets

Loans and advances

to customers

(% of group)

Others

Group Chief Financ

ial

Ofﬁcer’s review

Group Chief Financ

ial

Ofﬁcer’s review

Strategic report

Group Chief Financ

ial Ofﬁcer’s rev

iew

Standard Chartered

– Annual Report 2023



Back to

growth and

improv

ing

returns



Diego De Giorg

Group Chief Financ

ial Ofﬁcer

Standard Chartered

– Annual Report 2023

Strategic report

Summary of ﬁnancial performance

The Group delivered on its key ﬁnanc

ial objective for 2023,

achiev

ing a 10 per cent underly

ing return on tangible equity,

supported by sign

iﬁcant progress on the ﬁve strateg

ic actions

set out in 2022. Underlying proﬁt before tax increased 27 per

cent at constant currency as the Group delivered 4 per cent

posit

ive

income-to-cost jaws. Income grew 13 per cent on a

constant currency basis as the Group took advantage of the

favourable interest rate environment. Expenses increased 8

per cent at constant currency, while the Group incurred a loan

loss rate of 17 basis points, well below its histor

ical average.

The Group reduced the carrying value of its investment in

China Bohai Bank (‘Bohai’) by $850 mill

ion and booked a

$262 mill

ion net ga

in from selling its Aviat

ion F

inance business.

The Group remains well-capital

ised and h

ighly liqu

id w

ith a

liqu

ity coverage ratio of 145 per cent and a CET1 ratio of

14.1 per cent, above its target range, enabling the Board to

announce a further $1 bill

ion share buyback programme.

The terms of the buyback will be published, and the

programme will start shortly.

All commentary that follows is on an underlying basis and

comparisons are made to the equivalent period in 2022 on

a reported currency basis, unless otherwise stated.

•

Operating income

of $17.4 bill

ion

increased by 10 per cent

year-on-year or 13 per cent on a constant currency basis

as the Group beneﬁtted from the posit

ive

impact of

ris

ing

interest rates, and a partial recovery in Wealth

Management partly offset by losses from hedges

•

Underlying net interest income

increased 20 per cent or

23 per cent on a constant currency basis as the net interest

margin increased 26 basis points or 18 per cent with the

Group having increased its pric

ing on assets and the y

ield

on its Treasury portfolio more quickly than it repriced its

liab

ity base, reﬂecting strong pric

ing d

isc

ipl

ine and

passthrough rate management as interest rates increased

in key footprint currencies. This was partly offset by an

addit

ional 15 bas

is points drag from short-term and

structural hedges due to ris

ing

interest rates, 16 basis points

headwind from migrat

ion

into higher priced term deposits

from lower rate paid current and savings accounts (‘CASA’)

as well as adverse changes in the mix between Treasury

and customer assets

•

Underlying non NII

was stable, or 2 per cent higher on a

constant currency basis. This was in part due to a strong

Wealth Management performance, which was up 10 per

cent on a constant currency basis as it beneﬁtted from

a steady ﬂow of new to bank clients and net new money.

An accounting asymmetry resulting from Treasury

management of business as usual FX posit

ions also

contributed to an increase in non NII, with a partial offset

from reduced net interest income

•

Operating expenses

excluding the UK bank levy increased

7 per cent, or 8 per cent on a constant currency basis,

reﬂecting the Group’s continued investment into business

growth in

iat

ives, strateg

ic investments and higher

inﬂat

ion partly funded by cost efﬁciency act

ions. The Group

generated 4 per cent posit

ive

income-to-cost jaws at

constant currency and the cost-to-income ratio improved

by 2 percentage points to 63 per cent

•

Credit impa

irment

was a $528 mill

ion charge, a reduct

ion

of $308 mill

ion represent

ing an annualised loan loss rate of

17 basis points. The impa

irment charge

includes $282 mill

ion

in relation to the China commercial real estate sector,

$354 mill

ion

in the Consumer, Private and Business Banking

(‘CPBB’) portfolio and $85 mill

ion from Ventures partly

offset by a $45 mill

ion net release from sovere

ign-related

exposures and a net release in other Corporate exposures

•

Other impa

irment

increased by $91 mill

ion to $130 m

ill

ion

primar

ily relat

ing to write-off of software assets

•

Proﬁt from associates and jo

int ventures

decreased

44 per cent to $94 mill

ion reﬂect

ing a lower proﬁt share

from Bohai

•

Restructuring, other items and goodwill and other

impa

irment

totalled $585 mill

ion. Th

is included an

impa

irment charge of $850 m

ill

ion reﬂect

ing a reduction

in the carrying value of the Group’s investment in Bohai

following a refresh of the value-in-use calculation. Other

items include the sale of the Aviat

ion F

inance business,

of which there was a gain on sale of $309 mill

ion on the

leasing business and a loss of $47 mill

ion

in relation to a sale

of a portfolio of Aviat

ion loans. Restructur

ing charges of

$14 mill

ion

include the impact of actions to transform the

organisat

ion to

improve productiv

ity, partly offset by proﬁts

from businesses classif

ied as held-for-sale. Movements

in the Debit Valuation Adjustment (‘DVA’) were a posit

ive

$17 mill

ion

•

Taxation

was $1,631 mill

ion on a reported bas

is, with an

underlying effective tax rate of 29.1 per cent down from

29.9 per cent in the prior year reﬂecting a favourable change

in the geographic mix of proﬁts partly offset by increased

losses in the United Kingdom where the Group currently

does not recognise a tax beneﬁt

•

Underlying return on tangible equity

increased by

240 basis points to 10.1 per cent reﬂecting an increase in

proﬁts and lower average tangible equity beneﬁtt

ing from

distr

ibut

ions to shareholders and movements in reserves

primar

ily through the course of 2022

•

Underlying basic earnings per share (‘EPS’)

increased

32 per cent to 128.9 cents and reported EPS of 108.6 cents

increased by 26 per cent

• A ﬁnal

ordinary div

idend

per share of 21 cents has been

proposed taking the full-year total to 27 cents, a 50 per cent

increase. The Group also completed two share buyback

programmes totalling $2 bill

ion wh

ich along with a new

share buyback programme of $1 bill

ion to start

imm

inently.

Since 1 January 2022, total shareholder distr

ibut

ions

announced total $5.5 bill

ion

Standard Chartered

– Annual Report 2023

Strategic report

Group Chief Financ

ial Ofﬁcer’s rev

iew

Summary of ﬁnancial performance

2023

$mill

ion

2022

$mill

ion

Change

Constant

currency

change¹

Underlying net interest income

9,557

7,967

Underlying non NII

7,821

7,795

–

Underlying operating income

17,378

15,762

Other operating expenses

(11,025)

(10,307)

(7)

(8)

UK bank levy

(111)

(102)

(9)

(2)

Underlying operating expenses

(11,136)

(10,409)

(7)

(8)

Underlying operating proﬁt before impa

irment and taxat

ion

6,242

5,353

Credit impa

irment

(528)

(836)

Other impa

irment

(130)

(39)

nm⁷

Proﬁt from associates and jo

int ventures

167

(44)

(43)

Underlying proﬁt before taxation

5,678

4,645

Restructuring

(14)

(99)

Goodwill and other impa

irment

(850)

(322)

(164)

DVA

(60)

Other items⁶

262

nm⁷

Reported proﬁt before taxation

5,093

4,286

Taxation

(1,631)

(1,384)

(18)

(25)

Proﬁt for the year

3,462

2,902

Net interest margin (%)

1.67

1.41

Underlying return on tangible equity (%)

10.1

7.7

240

Underlying earnings per share (cents)

128.9

97.9

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

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

Goodwill and other impa

irment

include $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank

(‘Bohai’)

4. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

5. To be consistent with how we the compute Net Interest Margin (‘NIM’), and to align with the way we manage our business, we have changed our deﬁn

ion of

Underlying Net Interest Income (‘NII’) and Underlying non NII. The adjustments made to NIM, includ

ing

interest expense relating to funding our trading book, will

now be shown against Underlying Non NII rather than Underlying NII. Prior periods have been restated. There is no impact on total income

6. Other items includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

relation to a sale of a portfolio of Aviat

ion loans

7. Not meaningful

Reported ﬁnancial performance summary

2023

$mill

ion

2022

$mill

ion

Change

Constant

currency

change¹

Net interest income

7,769

7,593

Non NII

10,250

8,725

Reported operating income

18,019

16,318

Reported operating expenses

(11,551)

(10,913)

(6)

(7)

Reported operating proﬁt before impa

irment and taxat

ion

6,468

5,405

Credit impa

irment

(508)

(836)

Goodwill and other impa

irment

(1,008)

(439)

(130)

Proﬁt from associates and jo

int ventures

141

156

(10)

Reported proﬁt before taxation

5,093

4,286

Taxation

(1,631)

(1,384)

(18)

(25)

Proﬁt for the year

3,462

2,902

Reported return on tangible equity (%)

8.4

6.8

160

Reported earnings per share (cents)

108.6

85.9

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

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

Standard Chartered

– Annual Report 2023

Strategic report

Operating income by product

2023

$mill

ion

2022

2,3

$mill

ion

Change

Constant

currency

change¹

Transaction Banking

5,837

3,874

Trade & Working capital

1,294

1,343

(4)

(1)

Cash Management

4,543

2,531

Financ

ial Markets

5,099

5,345

(5)

(2)

Macro Trading

2,827

2,965

(5)

(1)

Credit Markets

1,803

1,761

Credit Trading

554

488

Financ

ing Solut

ions & Issuance

1,249

1,273

(2)

–

Financ

ing & Secur

ies Serv

ices

469

619

(24)

(22)

Lending & Portfolio Management

498

558

(11)

(9)

Wealth Management

1,944

1,796

Retail Products

4,969

4,027

CCPL & other unsecured lending

1,161

1,202

(3)

(1)

Deposits

3,437

2,021

Mortgage & Auto

236

633

(63)

(62)

Other Retail Products

135

171

(21)

(19)

Treasury

(902)

337

nm⁴

Other

(67)

(175)

Total underlying operating income

17,378

15,762

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

2. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

Shipp

ing F

inance is now reported under Financ

ing Solut

ions & Issuance which was reported under Financ

ing & Secur

ies Serv

ices in 2022

4 Not meaningful

The operating income by product commentary that follows

is on an underlying basis and comparisons are made to the

equivalent period in 2022 on a constant currency basis, unless

otherwise stated.

Transaction Banking

income increased 54 per cent with

Cash Management income up 83 per cent reﬂecting strong

pric

ing d

isc

ipl

ine and passthrough rate management to take

advantage of a ris

ing

interest rate environment. Trade &

Working Capital decreased 1 per cent, reﬂecting lower

balance sheet and contingent volumes due to a reduction in

economic activ

ity and cl

ients’ preference for local currency

ﬁnancing prov

ided by local banks. This was partly offset by

higher margins as the Group focused on higher-returning

trade products.

Financ

ial Markets

income decreased 2 per cent and was up

3 per cent excluding the non-repeat of $244 mill

ion ga

on mark-to-market liab

ies

in 2022. Flow income grew by

7 per cent which was more than offset by the 15 per cent

reduction in episod

income, driven by subdued market

volatil

ity, reduced

issuances and the non-repeat of prior year

fair value gains on mark-to-market liab

ies. Macro Trad

ing

was down 1 per cent with declines in FX and Commodit

ies

partly offset by a double-dig

increase in Rates from an

expanded product offering. Credit Markets income was up

5 per cent primar

ily from h

igher Credit Trading income.

Financ

ing & Secur

ies Serv

ices income was down 22 per cent

as the beneﬁt of higher interest rates on Securit

ies Serv

ices

balances was offset by negative movements in XVA and

the non-repeat of mark-to-market gains.

Lending and Portfolio Management

income decreased

9 per cent reﬂecting the impact of risk-weighted assets

optim

isat

ion actions which contributed to lower balances

and an increase in portfolio management costs.

Wealth Management

income grew 10 per cent with

Bancassurance up 17 per cent and Treasury Products up

16 per cent partly offset by lower income from Wealth

Management Lending which was down 15 per cent on

the back of client deleveraging and margin compression.

There was continued strong growth in net new sales, which

totalled $14 bill

ion and offset adverse market movements as

Wealth Management assets under management remained

broadly stable.

Retail Products

income increased 26 per cent. Deposits

income was up 74 per cent due to active passthrough rate

management in a ris

ing

interest rate environment partly

offset by migrat

ion of Reta

il CASA balances into Time

Deposits. Mortgage & Auto income decreased 62 per cent

on the back of lower volumes and the impact of the Best

Lending Rate cap in Hong Kong restrict

ing the ab

ity to

reprice mortgages, despite an increase in funding costs

from higher interest rates. CCPL income decreased 1 per cent

reﬂecting reduced margins from increased funding costs

partly offset by increased balances, driven by partnerships

and the new dig

ital banks.

Treasury income

was a $902 mill

ion loss pr

imar

ily due to losses

from structural and short-term hedges in a ris

ing

interest rate

environment. The remain

ing short-term hedges mature

February 2024.

Standard Chartered

– Annual Report 2023

Strategic report

Group Chief Financ

ial Ofﬁcer’s rev

iew

Proﬁt before tax by client segment and geographic region

2023

$mill

ion

2022

$mill

ion

Change

Constant

currency

change

Corporate, Commercial & Institut

ional Bank

ing

5,436

3,990

Consumer Private & Business Banking

2,487

1,593

Ventures

(408)

(363)

(12)

Central & other items (segment)

(1,837)

(575)

nm³

Underlying proﬁt before taxation

5,678

4,645

Asia

4,740

3,616

Africa & Middle East

1,311

792

Europe & Americas

(330)

834

(140)

(139)

Central & other items (region)

(43)

(597)

Underlying proﬁt before taxation

5,678

4,645

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

2. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

3. Not meaningful

The client segment and geographic region commentary that

follows is on an underlying basis and comparisons are made

to the equivalent period in 2022 on a constant currency basis,

unless otherwise stated.

Corporate, Commercial & Institut

ional Bank

ing (‘CCIB’)

proﬁt increased 42 per cent. Income grew 20 per cent with

Cash Management beneﬁtting from d

isc

ipl

ined pric

ing

iat

ives

in a ris

ing

interest rate environment partly offset

by lower episod

income with

in F

inanc

ial Markets and lower

Lending income as CCIB delivered on its RWA optim

isat

ion

iat

ives. Expenses were 10 per cent h

igher while credit

impa

irment decreased $302 m

ill

ion w

ith lower charges in

relation to the China commercial real estate sector and

releases on histor

ic prov

ions w

ith

in the rema

ing portfol

io.

Consumer, Private & Business Banking (‘CPBB’)

proﬁt

increased 60 per cent, with income up 22 per cent, beneﬁtt

ing

from higher interest rates on Retail Deposits income and a

recovery in Wealth Management. This was partly offset by

lower Mortgage income negatively impacted by the Best

Lending Rate cap in Hong Kong. Expenses increased

6 per cent while credit impa

irment was $92 m

ill

ion h

igher.

Ventures

loss increased 12 per cent to $408 mill

ion, reﬂect

ing

the Group’s continued investment in transformational

dig

ital

iat

ives. Income

increased ﬁve-fold to $156 mill

ion

while expenses grew by 27 per cent. This resulted in a

lower operating loss before impa

irment year-on-year.

The impa

irment charge

increased $69 mill

ion to $85 m

ill

ion

reﬂecting increased bankruptcy related write-offs in Mox

where credit criter

ia have now been adjusted to reduce the

current elevated delinquency rate.

Central & other items (segment)

recorded a loss of $1.8 bill

ion

as income declined by $1.3 bill

ion mostly reﬂect

ing the

losses from structural and short-term hedges booked with

Treasury. Expenses increased by $43 mill

ion wh

ile there

was a net release in credit impa

irment pr

imar

ily relat

ing to

sovereign-related exposures. Associate income reduced by

$65 mill

ion reﬂect

ing lower proﬁts at Bohai.

Asia

proﬁts increased 32 per cent as income grew 15 per cent,

expenses increased by 8 per cent and credit impa

irments

reduced by $146 mill

ion. The

income growth reﬂects strong

double-dig

increases across Cash Management, Retail

Deposits and Wealth Management partly offset by lower

Mortgage income and a loss in Treasury Markets. The

proﬁt share from Bohai reduced by $65 mill

ion. The lower

credit impa

irment charge reﬂects

in part a lower level of

impa

irments booked

in the year relating to the China

commercial real estate sector.

Africa & Middle East (‘AME’)

proﬁts increased 90 per cent

as income increased 26 per cent with strong growth in Cash

Management and Retail Deposit income partly offset by a

loss in Treasury Markets following de-risk

ing act

ions in certain

markets. Expenses grew 6 per cent while credit impa

irment

charges were a net release of $91 mill

ion, a $210 m

ill

ion

reduction, reﬂecting a non-repeat of the prior year’s

sovereign-related impa

irments and releases relat

ing to

histor

ic Corporate prov

ions.

Europe & Americas

recorded a loss of $330 mill

ion as

income

reduced by 40 per cent, reﬂecting the increased cost of

hedges with

in Treasury wh

ilst strong growth in Transaction

Banking income was partly offset by lower Financ

ial Markets

income. Expenses increased 12 per cent reﬂecting the impact

of inﬂat

ion and h

igher investment spend. There was a

$59 mill

ion reduct

ion in credit impa

irment releases.

Central & other items (region)

recorded a loss of $43 mill

ion

compared to a $597 mill

ion loss

in the prior year. This

improvement is mainly due to higher returns paid to Treasury

on the equity provided to the regions in a ris

ing

interest rate

environment while expenses increased by 8 per cent.

Standard Chartered

– Annual Report 2023

Strategic report

Adjusted net interest income and margin

2023

$mill

ion

2022

$mill

ion

Change¹

Adjusted net interest income

9,547

7,976

Average interest-earning assets

572,520

565,370

Average interest-bearing liab

ies

540,350

525,351

Gross yield (%)

4.76

2.70

206

Rate paid (%)

3.27

1.38

189

Net yield (%)

1.49

1.32

Net interest margin (%)

3,4

1.67

1.41

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

ies wh

ich is increase/(decrease)

Adjusted net interest income is reported net interest income less ﬁnanc

ial markets trad

ing book funding costs and ﬁnanc

ial guarantee fees on

interest-

earning assets

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

4 Adjusted net interest income div

ided by average

interest-earning assets, annualised

Adjusted net interest income increased 20 per cent driven by an 18 per cent increase in the net interest margin, which averaged

167 basis points in the year, 26 basis points year-on-year uplift beneﬁt

ing from a rap

id increase in policy interest rates across

many of our markets slightly offset by an adverse change in asset mix. The net interest margin was also depressed by loss

making hedges with

in Treasury and an account

ing asymmetry from Treasury’s business as usual management of FX posit

ions

with

its portfolio.

•

Average interest-earning assets grew 1 per cent, or 2 per cent excluding the impact of currency translation and risk-weighted

asset optim

isat

ion actions, reﬂecting an increase in cash and balances at central banks partly offset by lower customer loan

balances. Gross yields increased 206 basis points compared with the average in the prior year

•

Average interest-bearing liab

ies

increased 3 per cent, or 4 per cent excluding the impact of currency translation, reﬂecting

an increase in customer accounts while the rate paid on liab

ies

increased 189 basis points compared with the average in

the prior year

Credit risk summary

Income Statement (Underlying view)

2023

$mill

ion

2022

$mill

ion

Change

Total credit impa

irment charge/(release)

528

836

(37)

Of which stage 1 and 2

138

407

(66)

Of which stage 3

390

429

(9)

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

Underlying credit impa

irment has been restated for the removal of (

i) exit markets and businesses in AME and (i

i) Av

iat

ion F

inance. No change to reported

credit impa

irment

Reconcil

iat

ion from underlying to reported can be found on page 48

Standard Chartered

– Annual Report 2023

Strategic report

Group Chief Financ

ial Ofﬁcer’s rev

iew

Balance sheet

2023

$mill

ion

2022

$mill

ion

Change

Gross loans and advances to customers

292,145

316,107

(8)

Of which stage 1

273,692

295,219

(7)

Of which stage 2

11,225

13,043

(14)

Of which stage 3

7,228

7,845

(8)

Expected credit loss provis

ions

(5,170)

(5,460)

(5)

Of which stage 1

(430)

(559)

(23)

Of which stage 2

(420)

(444)

(5)

Of which stage 3

(4,320)

(4,457)

(3)

Net loans and advances to customers

286,975

310,647

(8)

Of which stage 1

273,262

294,660

(7)

Of which stage 2

10,805

12,599

(14)

Of which stage 3

2,908

3,388

(14)

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

60 / 76

57 / 76

3 / 0

Credit grade 12 accounts ($mill

ion)

2,155

1,574

Early alerts ($mill

ion)

5,512

4,967

Investment grade corporate exposures (%)

(3)

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 $13,996 mill

ion at 31 December 2023, $10,267 m

ill

ion

at 30 September 2023, $10,950 mill

ion at 30 June 2023 and $24,498 m

ill

ion at 31 December 2022

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

Credit quality remained resil

ient, reﬂected

in lower year-on-

year credit impa

irment charges and an

improvement in a

number of underlying credit metrics. The Group continues to

actively manage the credit portfolio whilst remain

ing alert to

a volatile and challenging external environment includ

ing

increased geopolit

ical tens

ions which has led to id

iosyncrat

stress in a select number of markets and industry sectors.

Credit impa

irment was a $528 m

ill

ion charge, down 37 per

cent year-on-year, representing a loan loss rate of 17 basis

points. There was a $282 mill

ion

impa

irment charge relat

ing

to the China commercial real estate sector, includ

ing a

$32 mill

ion decrease

in the management overlay which

now totals $141 mill

ion. The decrease

in the management

overlay reﬂects repayments and loans moving into stage 3.

The Group has provided $1.2 bill

ion

in total, in relation to

China commercial real estate sector primar

ily over the last

three years. There was a net release of $45 mill

ion relat

ing

to sovereign downgrades. Excluding the China commercial

real estate portfolio and sovereign-related exposures, there

was a net release relating to Corporate exposures, primar

ily

histor

ical prov

ions. CPBB charge of $354 m

ill

ion reﬂects

an uptick in delinquency trends across the year and the

$85 mill

ion charge

in Ventures is primar

ily from portfol

growth and increased bankruptcy related write-offs in Mox

where credit criter

ia have now been adjusted to reduce the

current elevated delinquency rate.

Gross stage 3 loans and advances to customers of $7.2 bill

ion

were 8 per cent lower year-on-year as repayments, client

upgrades and write-offs more than offset new inﬂows.

Credit-impa

ired loans represented 2.5 per cent of gross

loans and advances, ﬂat on the prior year.

The stage 3 cover ratio before collateral of 60 per cent

increased by 3 percentage points, while the cover ratio post

collateral at 76 per cent was ﬂat on the prior year, with the

cover ratio before collateral increas

ing due to an

increase in

stage 3 provis

ions

in relation to the China commercial real

estate sector and a reduction in gross stage 3 balances.

Credit grade 12 balances have increased by 37 per cent to

$2.2 bill

ion substant

ially from a change in instrument on an

exist

ing sovere

ign exposure with no increase in risk. Excluding

this temporary inﬂow, credit grade 12 balances declined

24 per cent reﬂecting both improvements into stronger credit

grades and downgrades to stage 3. Early Alert accounts of

$5.5 bill

ion have

increased by 11 per cent, reﬂecting new

inﬂows relating to a select number of clients includ

ing

sovereign-related exposures. The Group is continu

ing to

carefully monitor 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

fell by 3 percentage points to 73 per cent, mainly due to a

reduction in repurchase agreement balances across various

central clearing counterparties.

Standard Chartered

– Annual Report 2023

Strategic report

Restructuring, goodwill impa

irment and other

items

2023

2022

Restructuring

$mill

ion

Goodwill

and other

impa

irment

$mill

ion

DVA

$mill

ion

Other

items

$mill

ion

Restructuring

$mill

ion

Goodwill

and other

impa

irment

$mill

ion

DVA

$mill

ion

Other

items

$mill

ion

Operating income

362

–

262

494

–

Operating expenses

(415)

–

(504)

–

Credit impa

irment

–

Other impa

irment

(28)

(850)

–

(78)

(322)

–

Proﬁt from associates and

joint ventures

–

(11)

–

Total

(14)

(850)

262

(99)

(322)

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

2. Goodwill and other impa

irment

include $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank

(‘Bohai’)

3. Other items includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

relation to a sale of a portfolio of Aviat

ion loans

The Group’s reported performance is adjusted for proﬁts or

losses of a capital nature, amounts consequent to investment

transactions driven by strategic intent, other infrequent and/

or exceptional transactions that are sign

iﬁcant or mater

ial in

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

period and items which management and investors would

ordinar

ily

ident

ify separately when assess

ing underlying

performance period-by period.

In 2022 the Group announced the exit of seven markets in the

AME region and will focus solely on the CCIB segment in two

more markets. In 2023, the Group completed the sale of its

Jordan business, closed its Lebanon representative ofﬁce

and signed agreements for sale of the remain

ing ex

it markets.

Addit

ionally, the Group sold

its global Aviat

ion F

inance

leasing business to Aircraft Leasing Company (‘AviLease’) for

proceeds of approximately $3.6 bill

ion

includ

ing $0.7 b

ill

ion

considerat

ion and $2.9 b

ill

ion repayment of net-

intra-group

ﬁnancing, g

ing r

ise to a gain on disposal of $309 mill

ion.

The $1 bill

ion Av

iat

ion loan bus

inesses was sold separately,

giv

ing r

ise to a loss on disposal of $47 mill

ion. Both of these

transactions are recorded in Other Items. As a result of these

disposals, effective 1st January 2023, the Group has not

included the exit markets and the Aviat

ion F

inance business

with

in the Group’s underly

ing operating proﬁt before taxation

but reported them with

in restructur

ing.

The Group has also classif

ied movements

in the debit

valuation adjustment (‘DVA’) out of its underlying operating

proﬁt before taxation and into Other items. To aid

comparisons with prior periods the Group has removed

the exit markets, Aviat

ion F

inance business and DVA from

its underlying operating proﬁt before taxation for 2022.

Restructuring loss of $14 mill

ion reﬂects the

impact of actions

to transform the organisat

ion to

improve productiv

ity,

primar

ily add

ional redundancy charges, technology

simpl

iﬁcation and opt

ing the Group’s property footprint.

This was partly offset by the proﬁts from the AME exit markets

and Aviat

ion F

inance business before the completion of their

exit from the Group.

Other impa

irment of $850 m

ill

ion

is in relation to a further

reduction in the carrying value of the Group’s investment

in its associate Bohai, to align to a lower value-in-use

computation following banking industry challenges and

property market uncertaint

ies

in Mainland China, that may

impact Bohai’s future proﬁtab

ity. The carrying value of the

Group’s investment in Bohai has reduced to $0.7 bill

ion from

$1.5 bill

ion.

Movements in DVA were a posit

ive $17 m

ill

ion dr

iven by the

widen

ing of the Group’s asset swap spreads on der

ivat

ive

liab

ity exposures. The portfolio subject to DVA did not

change materially during the year.

Standard Chartered

– Annual Report 2023

Strategic report

Group Chief Financ

ial Ofﬁcer’s rev

iew

Balance sheet and liqu

ity

2023

$mill

ion

2022

$mill

ion

Increase/

(Decrease)

$mill

ion

Increase/

(Decrease)

Assets

Loans and advances to banks

44,977

39,519

5,458

Loans and advances to customers

286,975

310,647

(23,672)

(8)

Other assets

490,892

469,756

21,136

Total assets

822,844

819,922

2,922

–

Liab

ies

Deposits by banks

28,030

28,789

(759)

(3)

Customer accounts

469,418

461,677

7,741

Other liab

ies

275,043

279,440

(4,397)

(2)

Total liab

ies

772,491

769,906

2,585

–

Equity

50,353

50,016

337

Total equity and liab

ies

822,844

819,922

2,922

–

Advances-to-deposits ratio (%)²

53.3%

57.4%

Liqu

ity coverage ratio (%)

145%

147%

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

The Group now excludes $20,710 mill

ion held w

ith central banks (30.09.23: $21,241 mill

ion, 30.06.23: $24,749 m

ill

ion, 31.12.22: $20,798 m

ill

ion) that has been conﬁrmed

as repayable at the point of stress.

The Group’s balance sheet remains strong, liqu

id and

well divers

iﬁed.

•

Loans and advances to customers decreased 8 per cent,

or $24 bill

ion to $287 b

ill

ion as at 31 December 2023 but

declined 1 per cent on an underlying basis. The underlying

reduction excludes the impact of $12 bill

ion decrease

Treasury and securit

ies backed loans held to collect,

$7 bill

ion reduct

ion from risk-weighted asset optim

isat

ion

actions undertaken by CCIB and a $1 bill

ion reduct

ion from

currency translation

•

Customer accounts increased $8 bill

ion to $469 b

ill

ion

and up 2% excluding the $2 bill

ion

impact of currency

translation. Retail time deposits increased $18 bill

ion and

Cash Management balances increased $11 bill

ion partly

offset by a $18 bill

ion decrease

in Corporate Term Deposits

•

Other assets increased 4 per cent, or $21 bill

ion from

31 December 2022 with a $41 bill

ion

increase in ﬁnanc

ial

assets held at fair value through proﬁt or loss, primar

ily

reverse repurchase agreements and debt securit

ies and

other elig

ible b

ills. Cash and balances at central banks

increased $12 bill

ion. Th

is was partly offset by a $13 bill

ion

reduction in derivat

ive balances and a $8 b

ill

ion reduct

ion

in investment securit

ies fa

ir valued through other

comprehensive income

•

Other liab

ies decreased 2 per cent, or $4 b

ill

ion from

31 December 2022 with a $14 bill

ion decrease

in derivat

ive

balances partly offset by a $10 bill

ion

increase in repurchase

agreements

The advances-to-deposits ratio decreased to 53.3 per cent

from 57.4 per cent at 31 December 2022 reﬂecting the

reduction in loans and advances to customers. The liqu

ity

coverage ratio decreased 2 percentage points to 145 per cent

as at 31 December 2023 after increas

ing

in the ﬁrst half of the

year as the banking industry as a whole navigated turbulent

external market condit

ions and rema

ins well above the

min

imum regulatory requ

irement of 100 per cent.

Risk-weighted assets

2023

$mill

ion

2022

$mill

ion

Change

$mill

ion

Change

By risk type

Credit risk

191,423

196,855

(5,432)

(3)

Operational risk

27,861

27,177

684

Market risk

24,867

20,679

4,188

Total RWAs

244,151

244,711

(560)

–

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

Total risk-weighted assets (‘RWA’) of $244.2 bill

ion were

broadly ﬂat in comparison to 31 December 2022.

•

Credit risk RWA decreased by $5.4 bill

ion to $191.4 b

ill

ion.

There was a $10.3 bill

ion reduct

ion from optim

isat

ion

actions, relating to the CCIB low-returning portfolio, a

$2.1 bill

ion reduct

ion from other RWA efﬁc

iency act

ions,

$2.7 bill

ion reduct

ion from currency translation, and a

$1.1 bill

ion reduct

ion from model and methodology

changes. The impa

irment of Boha

i further reduced

RWAs by $2.1 bill

ion and the sale of the Av

iat

ion F

inance

business by a further $1.6 bill

ion. Th

is was partly offset

by a $11.8 bill

ion

increase from asset mix and $2.7 bill

ion

increase relating to adverse credit migrat

ion

•

Operational risk RWA increased $0.7 bill

ion pr

imar

ily due to

an increase in average income as measured over a rolling

three-year time horizon, with higher 2022 income replacing

lower 2019 income

•

Market risk RWA increased by $4.2 bill

ion to $24.9 b

ill

ion

reﬂecting an increase in traded risk posit

ions and

market volatil

ity

Standard Chartered

– Annual Report 2023

Strategic report

Capital base and ratios

2023

$mill

ion

2022

$mill

ion

Change

$mill

ion

Change

CET1 capital

34,314

34,157

157

–

Addit

ional T

ier 1 capital (AT1)

5,492

6,484

(992)

(15)

Tier 1 capital

39,806

40,641

(835)

(2)

Tier 2 capital

11,935

12,510

(575)

(5)

Total capital

51,741

53,151

(1,410)

(3)

CET1 capital ratio end point (%)

14.1

14.0

0.1

Total capital ratio transit

ional (%)

21.2

21.7

(0.5)

Leverage ratio (%)

4.7

4.8

(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 14.1 per cent was 10 basis points

higher than the ratio as at 31 December 2022. The Group

was able to fund $2.7 bill

ion of cap

ital returns to ordinary

shareholders from underlying proﬁts. The CET1 ratio remains

3.5 percentage points above the Group’s latest regulatory

min

imum of 10.5 per cent and above the top of the

13-14 per cent target range.

As well as the 169 basis points of CET1 accretion from

underlying proﬁts, the Group’s CET1 ratio decreased

34 basis points from an underlying $5.9 bill

ion

increase in

risk-weighted assets as the Group exercised tight control over

capital consumption. A further 22 basis points uplift was the

result of an increase in Other Comprehensive Income from

fair value gains on debt instruments as long-term interest

rates began to fall in the latter half of the year. The sale of the

Group’s Aviat

ion F

inance business increased the CET1 ratio by

20 basis points.

Ordinary shareholder distr

ibut

ions reduced the CET1 ratio

by approximately 111 basis points. The Group spent $2 bill

ion

purchasing 230 mill

ion ord

inary shares of $0.50 each during

the year, representing a volume-weighted average price per

share of £7.06. These shares were subsequently cancelled,

reducing the total issued share capital by 7.9 per cent and the

CET1 ratio by 82 basis points. The Board has recommended

a ﬁnal div

idend of 21 cents per share result

ing in a total 2023

ordinary div

idend of 27 cents per share or $728 m

ill

ion,

reducing the CET1 ratio by approximately 30 basis points.

Payments due to AT1 and preference shareholders cost

approximately 17 basis points.

The Board has announced a share buyback 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 buyback will be

published, and the programme will start shortly and is

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

of 2024 by approximately 40 basis points.

The $850 mill

ion

impa

irment of Boha

i also resulted in an RWA

reduction of $2.1 bill

ion, the net effect of wh

ich resulted in a

reduction of the CET1 ratio by 23 basis points.

The Group’s leverage ratio of 4.7 per cent is 6 basis points

lower than at 31 December 2022. This is primar

ily dr

iven by

a decrease in Tier 1 capital of $0.8 bill

ion as CET1 cap

ital

increased by $0.2 bill

ion and was more than offset by the

redemption of $1.0 bill

ion Add

ional T

ier 1 securit

ies. The

reduction in Tier 1 capital was broadly offset by a $7.2 bill

ion

reduction in leverage exposures. The Group’s leverage ratio

remains sign

iﬁcantly above

its min

imum requ

irement of

3.7 per cent.

Outlook

We have updated our guidance for 2024 and have provided

addit

ional gu

idance for 2025 and 2026 as follows:

• Income:

– Operating income to increase 5-7 per cent for 2024 to

2026 and around the top of 5-7 per cent range in 2024

– Net interest income for 2024 of $10 bill

ion to $10.25 b

ill

ion,

at constant currency

• Expenses:

– Operating expenses to be below $12 bill

ion

in 2026, at

constant currency

– Expense saves of around $1.5 bill

ion and cost to ach

ieve

of no more than $1.5 bill

ion from 2024 to 2026

– Posit

ive

income-to-cost jaws, excluding UK bank levy,

at constant currency in each year from 2024 to 2026

• Assets and RWA:

– Low single-dig

it percentage growth

in loans and

advances to customers and RWA each year from 2024

to 2026 (pre-Basel 3.1 day-1 impact)

– Basel 3.1 day-1 impact, pending clarif

icat

ion of

rules, expected to add no more than 5 per cent

incremental RWA

•

Continue to expect the loan loss rate to normalise towards

the histor

ical through-the-cycle 30 to 35 bas

is points range

• Capital:

– Continue to operate dynamically with

in the full

13-14 per cent CET1 target range

– Plan to return at least $5 bill

ion to shareholders

cumulative 2024 to 2026

– Continue to increase full-year div

idend per share

over time

•

RoTE increas

ing stead

ily from 10%, targeting 12% in 2026

and to progress thereafter

Diego De Giorg

Group Chief Financ

ial Ofﬁcer

23 February 2024

Standard Chartered

– Annual Report 2023

Strategic report

Group Chief Risk Ofﬁcer’s review

Proactively

managing our

risks whilst

keeping our

focus on the

execution of

the Group’s

strategy

Group Chief Risk

Ofﬁcer’s review

Managing Risk

2023 presented challenges across many of our markets, with

sustained high inﬂat

ion levels from 2022 cont

inu

ing to put

pressure on the central banks to dampen ris

ing pr

ices through

increases to interest rates. Increased levels of volatil

ity were

seen in early 2023 as several bank failures prompted fears of

a global contagion. Despite having no material exposures to

the failed banks, the Group took proactive steps to further

strengthen our liqu

ity posit

ion and mon

itor for any signs of

second order impacts. 2023 also saw a fundamental shift in

global power dynamics, includ

ing w

ith the BRICS expansion.

Sovereign risks persisted across emerging markets in the

Africa and Middle East region. In Asia, despite slower than

expected economic growth in China, we saw posit

ive s

igns of

growth in the second half of the year. We continued to keep

our focus on the challenges in the China real estate sector and

any contagion risks. The Group has lim

ited d

irect exposure in

Ukraine and to the countries in the Middle East which are

currently most impacted by conﬂict. However, we remained

cognisant of the volatil

ity and the potent

ial second order

market impacts, includ

ing those from elevated o

il and

commodity prices or supply chains disrupt

ion, wh

ich we

continue to actively monitor through stress testing and

portfolio reviews.

As we enter 2024, we stay vig

ilant and cont

inue to review our

exposure and lim

its across our portfol

ios to ident

ify vulnerable

industr

ies and cl

ients for closer monitor

ing.

Corporate, Commercial and Institut

ional Bank

ing (CCIB)

Our CCIB credit portfolio remained resil

ient w

ith overall

good asset quality, as evidenced by our largely investment

grade corporate portfolio (31 December 2023: 73 per cent,

31 December 2022: 76 per cent). We actively tracked

geopolit

ical r

isks to enable us to act should the need

material

ise. In cons

iderat

ion of the macroeconom

challenges, addit

ional rev

iews were conducted throughout

2023 across US regional Banks, Non-Bank Financ

ial Inst

itut

ions

(NBFI), Leveraged Lending books, Global Commercial Real

Estate (CRE) portfolio and select geographies. We closely

monitored vulnerable sectors and ident

iﬁed cl

ients that

may face diff

icult

ies on account of increased interest rates,

foreign exchange movements, commodity volatil

ity or

increased prices of essential goods. In China, the property

market recovery remained slower than expected amidst

government support measures and we continued to

monitor our developers and sponsors portfolios through

dedicated reviews.

Standard Chartered

– Annual Report 2023

Strategic report

Consumer, Private and Business Banking (CPBB)

The CPBB credit portfolio remained alert to the risks of the

uncertain economic outlook but continued to demonstrate

resil

ience. An

increase in delinquency rates (Stage 2 provis

ions

as at 31 December 2023: $139 mill

ion, 31 December 2022:

$118 mill

ion) h

ighl

ights the emerg

ing pressure on customers’

debt servic

ing capac

ity, as our customers continue to adapt to

the prolonged higher interest rate environment. We continued

to monitor potential secondary impacts of local challenges

aris

ing from he

ightened country risks across Bangladesh,

Ghana, Kenya, Niger

ia, Pak

istan, and Sri Lanka, amongst

others. There was no material impact on the CPBB portfolio

due to the war in Ukraine and the conﬂict in the Middle East.

For both our secured and unsecured consumer credit

portfolios, we continued to monitor customer affordabil

ity

across our key markets and dynamically adjusted orig

inat

ion

criter

ia, portfol

io management and collections strategies,

as appropriate. We were mindful of the higher credit risk

associated with increased lending to the mass market

segment through our dig

ital partnersh

ips and dig

ital

banks and have tailored our lending criter

ia and portfol

management approach to the unique risks and customer

behaviours observed in these segments.

Treasury Risk

Our liqu

ity and capital risks are managed to ensure a strong

and resil

ient balance sheet that supports susta

inable growth.

We continued to enhance our Treasury Risk framework to

incorporate the lessons from recent market events as well

as horizon risks. Liqu

ity remained resil

ient across the Group

and major legal entit

ies. Group l

iqu

ity coverage ratio (LCR)

is 145.4 per cent as at December 2023 (31 December 2022:

147 per cent) with a surplus to both Risk Appetite and

regulatory requirements. Common Equity Tier 1 (CET1) ratio

was 14.1 per cent as at December 2023 (31 December

2022: 14.0 per cent) while Leverage ratio was 4.7 per cent

(31 December 2022: 4.8 per cent). In March 2023, we saw sharp

moves in funding markets and customer behaviours trigger

ing

several bank failures in the US and Switzerland. This resulted in

a heightened focus on Treasury risks includ

ing cap

ital, liqu

ity,

and interest rate risk on the banking book, with problems

most acute in the US market and reverberating globally.

We mainta

ined a res

ient l

iqu

ity posit

ion throughout the

period and continued to focus on managing risks even as

those event risks receded.

The Risk function remains actively engaged in provid

ing

independent review and challenge to internal and regulatory

stress tests and recovery and resolution capabil

ies.

Further details on Risk Management for our Princ

ipal R

isk Types

can be found in

page 314

Further details on Climate Risk can be found in

page 298

Risk Performance Summary

Asset quality is resil

ient. The percentage of

investment-

grade corporate net exposure remained high at 73 per cent

(31 December 2022: 76 per cent). Exposure to our top 20

corporate clients as a percentage of Tier 1 capital decreased

to 62 per cent (31 December 2022: 65 per cent), mainly driven

by reduction in Transaction Banking exposures. However, the

Group remained vig

ilant of pers

istent challenging condit

ions

in some markets and sectors. In 2023, we saw a $0.5 bill

ion

increase in Early Alerts exposure (31 December 2023:

$5.5 bill

ion, 31 December 2022: $5.0 b

ill

ion), dr

iven by inﬂows

relating to a select number of clients includ

ing sovere

ign-

related exposures, partially offset by transfers to Purely

Precautionary, regularisat

ions, exposure reduct

ions and

outﬂows to Credit grades 12-14. Credit grade 12 balances

increased to $2.2 bill

ion (31 December 2022: $1.6 b

ill

ion)

due to sovereign and client downgrades, partially offset

by outﬂows to non-performing loans.

Standard Chartered

– Annual Report 2023

Strategic report

Group Chief Risk Ofﬁcer’s review

Key ind

icators

2023

2022

Group total business

292.1

316.1

Stage 1 loans ($ bill

ion)

273.7

295.2

Stage 2 loans ($ bill

ion)

11.2

13.0

Stage 3 loans, credit-impa

ired ($ b

ill

ion)

7.2

7.9

Stage 3 cover ratio

60%

57%

Stage 3 cover ratio (includ

ing collateral)

76%

Corporate, Commercial & Institut

ional Bank

ing

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

73%

76%

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

to customers

68%

Early Alert portfolio net exposures ($ bill

ion)

5.5

5.0

Credit grade 12 balances ($ bill

ion)

2.2

1.6

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

62%

65%

Collateralisat

ion of sub-

investment grade net exposures maturing in more than one year

41%

53%

Consumer, Private & Business Banking

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

47.2%

44.7%

These numbers represent total gross loans and advances to customers

2 Excludes reverse repurchase agreements

The 2022 ﬁgure has been restated from 65 per cent to 68 per cent

The Group’s credit impa

irment was a net charge of $508 m

ill

ion (31 December 2022: $836 m

ill

ion), a decrease of $328 m

ill

ion.

2022 included overlays for sovereign downgrades and China commercial real estate, which was partly offset by a full release

of COVID-19 overlays. Stage 3 was a charge of $369 mill

ion (31 December 2022: $430 m

ill

ion), and the reduct

ion was driven by

CCIB releases and lower impa

irment charges for our Ch

ina commercial real estate clients. This reduction was offset by higher

bankruptcy related write-offs in CPBB across Singapore, Hong Kong and Korea, and portfolio growth in dig

ital partners.

Credit impa

irment

2023

2022

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

112

123

148

277

425

Consumer, Private & Business Banking

129

225

354

151

111

262

Ventures

Central & other items

(44)

(34)

133

Credit impa

irment charge/(release)

138

390

528

407

429

836

Restructuring business portfolio

Others

(21)

(20)

(1)

Credit impa

irment charge/(release)

(21)

(20)

(1)

Total credit impa

irment charge/(release)

139

369

508

406

430

836

Underlying credit impa

irment has been restated for the removal of (

i) exit markets and businesses in AME and (i

i) Av

iat

ion F

inance. No change in reported

credit impa

irment

Further details of the risk performance for 2023 are set out in the full Risk review section

(pages 232 to 343)

Standard Chartered

– Annual Report 2023

Strategic report

An update on our risk management approach

Our Enterprise Risk Management Framework (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 Group Risk Appetite, as well

as allowing for holist

ic r

isk ident

iﬁcation. The ERMF also sets out the roles and respons

ies and the m

imum governance

requirements for the management of Princ

ipal R

isks.

In revis

ions made

in the ERMF in 2023, effective 1 January 2024, the concepts of Integrated Risk Types (IRTs) and IRT Owner

roles were discont

inued. Overs

ight on exist

ing IRTs,

i.e. Climate Risk, Dig

ital Asset and Th

ird Party Risk, is achieved through the

Risk Type Frameworks (RTFs) and dedicated polic

ies. The subject matter experts, as the pol

icy owners for these risks, provide

overall governance and ensure a holist

ic v

iew of how risks are monitored and managed across the Princ

ipal R

isk Types (PRTs).

Princ

ipal R

isk Types

PRTs 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 Risk Appetite Statement. We will not compromise compliance with our

Risk Appetite in order to pursue revenue growth or higher returns.

The table below provides an overview of the Group’s PRTs and their corresponding risk appetite statements.

Risk 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 and act

ies to ensure that market and

counterparty credit 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 does not cause material damage to the Group’s

franchise. In addit

ion, the Group should ensure

its Pension plans are adequately funded.

Operational and Technology Risk

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.

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

ilst inc

idents are unwanted, they cannot be ent

irely avoided.

Compliance Risk

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 ent

irely avoided.

Information and Cyber Security Risk

The Group aims to mit

igate and control ICS r

isks to ensure that inc

idents do not cause the Bank

material harm, business disrupt

ion, ﬁnancial loss or reputat

ional damage – recognis

ing that

whilst inc

idents are unwanted, they cannot be ent

irely avoided.

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 w

ith the appropriate level of

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

business conduct in striv

ing to do no s

ign

iﬁcant env

ironmental and social harm.

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

ilst accepting some model

uncertainty.

In addit

ion to the PRTs, the Group has deﬁned the follow

ing Risk Appetite statement for Climate Risk: “The Group aims to

measure and manage ﬁnancial and non-ﬁnancial r

isks aris

ing from cl

imate change, and reduce emiss

ions related to our own

activ

ies and those related to the ﬁnanc

ing of cl

ients in alignment with the Paris Agreement.”

The Group’s Enterprise 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.

Further details on our Risk Management Approach can be found on

page 314

Standard Chartered

– Annual Report 2023

Strategic report

Group Chief Risk Ofﬁcer’s review

Emerging Risks refer to unpredictable and uncontrollable

outcomes from certain events which may have the potential

to adversely impact our business. Topical Risks refer to themes

that may have emerged but are still evolving rapidly.

As part of our continuous risk ident

iﬁcation process, we have

updated the Group’s TERs from those disclosed in the 2022

Annual Report and 2023 Half-Year Report; these remain

applicable, with nuances in their evolution noted where

pertinent. Below is a summary of the TERs, 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. There

are some horizon risks that, although not highly likely at

present, could evolve into a threat in the future and we are

therefore monitor

ing them. These

include future pandemics

and the world’s preparedness for them, and other potential

cross-border conﬂicts. Our mit

igat

ion approach for these

risks may not elim

inate them but demonstrates the Group’s

awareness and attempt to reduce or manage the risks. As

certain risks develop and material

ise over t

ime, management

will take appropriate steps to mit

igate them based on the

material

ity on the Group.

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, the global or concentrated nature of key supply

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

and the direct inﬂuence of geopolit

ics on geoeconom

ics.

The Group is exposed to these risks directly through

investments, infrastructure and staff, and also ind

irectly

through its clients. Whilst the main impacts are ﬁnanc

ial,

other ramif

icat

ions may exist such as reputational,

compliance or operational considerat

ions.

Expanding array of global tensions and new geopolit

ical

order

Global power dynamics have shifted, with different polit

ical

and economic alliances beginn

ing to create a mult

ipolar

power system. This has been accelerated by the war in

Ukraine and conﬂicts in the Middle East. Whilst the Group has

lim

ited d

irect exposure to Russia, Ukraine or Israel, it may be

impacted by second order effects on its clients and markets

for agricultural commodit

ies, o

il or gas.

The posit

ion

ing of ‘middle powers’ is complex and evolving,

and could tip the geopolit

ical scales. The negot

iat

ing power

of exporters of energy and other natural resources has

expanded and can shape global markets, as they can use

global div

ions to raise their own proﬁle. One such example

is the envisaged expansion of BRICS to seek a counterweight

to Western power axes.

US-China tensions remain, with protection

ist measures

imposed by both sides. Tariffs, embargos, sanctions, new

taxes such as that on carbon, and restrict

ions on technology

exports and investments, are being used to achieve goals

beyond just economic. Further economic or polit

ical act

ions

could escalate distrust and accelerate the decoupling of trade

links, leading to increas

ingly

ineff

ient production and

inﬂat

ion pressures.

Despite attempts to become more pragmatic, a number of

potential ﬂashpoints remain. A push by China to increase

RMB trade and establish RMB as a secondary global reserve

currency presents new business opportunit

ies but also

potential disrupt

ion to the balance of power.

With many elections due across the world in the next twelve

months, there is uncertainty over the polit

ical d

irect

ion of

domestic and foreign policy. There is a risk of short-term

polit

ical exped

iency taking precedence over long-term

strategic decis

ion mak

ing. The malic

ious use of AI-enabled

dis

informat

ion could also cause disrupt

ion and underm

ine

trust in the polit

ical process.

There is an ongoing threat of terrorism, with unpredictab

ity

exacerbated by the wider range of ideolog

ies at play.

Cyber warfare by state related actors could also be used

to disrupt infrastructure or inst

itut

ions in rival countries.

A more complex and less integrated global polit

ical and

economic landscape has the potential to challenge cross

border business models, but also provides new business

opportunit

ies.

Persistent high inﬂat

ion and

interest rates

Although rate cuts have been signalled by the Federal

Reserve, global rates could remain elevated for longer.

Structurally higher spending and continued supply disrupt

ions

increase the probabil

ity of

inﬂat

ion rema

ing st

icky. During

2023, the International Monetary Fund (IMF) and World

Trade Organisat

ion lowered the

ir in

ial forecasts for trade

growth and increased that of inﬂat

ion

in 2024, suggesting

that several economies will walk a ﬁne line between recession

and stagﬂation.

Concern for the credit environment spans both commercial

and retail lending, with price inﬂat

ion and the cl

iff effects of

energy, mortgage and debt re-pric

ing ult

imately leading to

higher defaults. This is vis

ible

in bond markets with yields

widen

ing markedly and prone to h

igh volatil

ity.

Drives to de-risk supply chains combined with no obvious

resolution to ongoing conﬂicts continue to disrupt supply

chains. This complicates efforts to combat inﬂat

ion as

supply constrained markets dent the effectiveness of

monetary policy.

Topical and

Emerging Risks (TERs)

Standard Chartered

– Annual Report 2023

Strategic report

Some sectors are particularly sensit

ive to h

igh rates, notably

commercial real estate, non-bank ﬁnanc

ial

inst

itut

ions (NBFI)

and leveraged ﬁnance due to their reliance on the availab

ity

of cheap ﬁnancing. Bank fa

ilures in Q1 2023 highl

ighted

challenges in managing liqu

ity, credit, reﬁnanc

ing and

market risks. They also raised questions of competence and

conﬁdence in the ﬁnance industry.

Economic slowdown in China

Whilst China’s exit from COVID restrict

ions has had an overall

posit

ive

impact, it has failed to deliver a sustained boost to the

global economy as the country contends with strain in several

sectors such as real estate. There has also been a change in

the corporate operating environment, with reduced clarity on

the economic outlook.

Given China’s importance to global trade a slowdown would

have wider impl

icat

ions across the supply chain, especially for

its trading partners, as well as to countries which rely on it for

investment, such as those in Africa. However, opportunit

ies

arise from the divers

iﬁcation of

intra-Asia trade and other

global trade routes, and growth acceleration in South Asia,

especially India.

Sovereign risk

Credit fundamentals have been eroding across both

emerging and advanced economies due to persistently high

interest rates, food and energy prices. Emerging markets will

also be affected by weakness in local currencies versus the

US Dollar and the resultant cost of reﬁnancing ex

ist

ing debt,

or availab

ity of hard currency liqu

ity. Issues and challenges

have already been observed across several of the Group’s

footprint markets, includ

ing the recent default of Ghana,

polit

ical

instab

ity in Pakistan, high inﬂat

ion

in Turkey,

economic turmoil in Sri Lanka, and coups in Africa.

For some countries there is a heightened risk of failure to

manage social demands, which might culminate in increased

polit

ical vulnerab

ity. Furthermore, food secur

ity exacerbated

by the inﬂuences of armed conﬂict and climate change,

and energy security challenges have the potential to drive

social unrest.

Debt moratoria and reﬁnanc

ing

iat

ives are compl

icated

by larger number of ﬁnanciers, w

ith much ﬁnanc

ing done

on a bilateral basis outside of the Paris Club. Whilst the

Global Sovereign Debt Roundtable has made some

progress on coordinat

ing approaches between the Par

Club and other lenders their interests do not always match.

This can lead to delays in negotiat

ions on debt resolut

ions

for developing nations.

Supply chain issues and material shortages

Demand and supply imbalances in global supply chains

are increas

ingly becom

ing structural in nature and affect a

wide range of commodit

ies

includ

ing food, energy, m

inerals

and raw materials, plus targeted restrict

ions on certa

industry sectors.

There is growing polit

ical awareness around the need for key

component and resource security at national level. Countries

are enacting rules to “de-risk” by reducing reliance on rivals or

concentrated suppliers (for example semiconductors) and

look to either re-industr

ial

ise or make use of near-shoring and

friend-shoring production.

The growing need for minerals and rare earth metals to power

green energy technologies could increase the geopolit

ical

standing of the main reﬁners, such as China, Indonesia and

some African nations. However, there are also environmental

and social costs to rapidly increas

ing extract

ion. A desire to

avoid dependence may slow down the move by some nations

towards the transit

ion.

How these risks are mit

igated/next steps

•

We remain vig

ilant

in monitor

ing r

isk and assessing impacts

from geopolit

ical and macroeconom

ic risks to portfolio

concentrations.

•

We conduct thematic stress tests and portfolio reviews at

the Group, country, and business level, with regular reviews

on vulnerable sectors, and undertake any necessary

mit

igat

ing actions.

•

We mainta

in a d

ivers

iﬁed portfol

io across products and

geographies, with specif

ic r

isk appetite metrics to monitor

concentrations.

•

Increased scrutiny is applied when onboarding clients and

in ensuring compliance with sanctions.

•

Collateral and credit insurance are used to manage

concentrations.

•

We track the partic

ipat

ion of our footprint countries in the

G20’s Common Framework Agreement and Debt Service

Suspension Init

iat

ive for Debt Treatments and the

associated exposure.

•

Our NBFI exposure is closely monitored in terms of both

lim

its, products and counterpart

ies.

Regulatory considerat

ions

Changing regulatory environment

Given notable bank failures in 2023 (and the response of

resolution authorit

ies to those fa

ilures), the regulatory

framework for banks remains subject to continued change

in addit

ion to the

implementat

ion of Basel 3.1

in various

jurisd

ict

ions. Add

ionally, the d

iffer

ing pace and scale of

regulatory adoption between jur

isd

ict

ions, along w

ith

increas

ing extraterr

itor

ial reach and prescr

ipt

iveness, can

make it challenging for multinat

ional groups to manage

their business. Implementation timel

ines are a focus.

The scale of upcoming regulatory change in 2024 and 2025

is sign

iﬁcant w

ith major regime changes in capital and

operational resil

ience due to take effect.

How these risks are mit

igated/next steps

•

We actively monitor regulatory developments, includ

ing

those related to sustainable ﬁnance and ESG, and

respond to consultations either bilaterally or through

well-established industry bodies.

Standard Chartered

– Annual Report 2023

Strategic report

Group Chief Risk Ofﬁcer’s review

ESG considerat

ions

ESG stakeholder expectations

Organisat

ions across the corporate and ﬁnancial sectors are

setting ambit

ious susta

inab

ity goals and net zero targets

with many embedding them in their business models. This has

prompted increased attention from various stakeholders in

ensuring that net zero targets are being met with credible

action plans. Stakeholder scrutiny around greenwashing

risk relating to ESG focused ﬁnanc

ial products, as well as

companies’ commitments, transpires in the various regulatory

developments and early enforcement actions taken by several

key regulators.

Fragmentation in the pace and scale of adoption of ESG

regulations around the world remains, particularly around

taxonomies and disclosure requirements, which may lead to

unintended consequences includ

ing m

isallocat

ion of cap

ital,

increased implementat

ion costs and l

igat

ion risks.

The Group’s net zero aspirat

ions may be

impacted by

governments or corporates scaling back their sustainab

ity

targets, especially as economic condit

ions rema

challenging, and budgets are constrained. There have been

examples in developed nations, such as the UK revis

ing its

electric vehicle transit

ion t

imel

ine. A slower trans

ion from key

clients may also weigh reputational pressure on the Group’s

roadmap.

Higher frequencies of extreme weather-related events such

as wildf

ires, ﬂoods and fam

ines may lead to physical climate

risk and the cost of managing it becoming a heavier burden

on global economies. This will be particularly impactful to

developing markets. Alongside climate change, biod

ivers

ity

loss, pollution, and depletion of key resources, such as water,

pose incremental risks to food and health systems, energy

security and contribute to the disrupt

ion of supply cha

ins.

Human rights concerns are increas

ingly

in focus, with the

scope expanding beyond direct abuses to cover other areas

such as technological advancement and supply chains.

How these risks are mit

igated/next steps

•

We update our environmental and social standards for

provid

ing ﬁnancial serv

ices to clients every two years,

with a new version scheduled for 2024.

•

We focus on embedding our values through our Posit

ion

Statements for sensit

ive sectors and a l

ist of prohib

ited

activ

ies

•

We integrate the management of greenwashing risks

into our Reputational and Sustainab

ity Risk Framework

and polic

ies

•

‘Green’, ‘sustainable’ and ‘transit

ion’ labels for products

and transactions reﬂect the criter

ia set out

in the Group’s

Sustainable Finance frameworks, which are regularly

reviewed. We obtain external verif

icat

ion on the Group’s

Sustainable Finance asset pool.

•

We assess our clients and suppliers against various

internat

ional human r

ights princ

iples, as well as through

our social safeguards and supplier charter.

Modern slavery statement:

https://www.sc.com/modernslavery

Human Rights Posit

ion Statement:

https://www.sc.com/humanrights

•

Detailed portfolio reviews and stress tests are conducted

to test resil

ience to cl

imate-related risks and enhance

modelling capabil

ies to understand the ﬁnanc

ial r

isks

and opportunit

ies from cl

imate change.

•

Work is underway to embed Climate Risk considerat

ions

across all relevant PRTs. This includes client-level Climate

Risk assessments, includ

ing sett

ing adequate mit

igants

or controls as part of decis

ion mak

ing and portfolio

management activ

ies.

Technological considerat

ions

Data and dig

ital

The Group’s dig

ital footpr

int will expand as more services

and products are dig

ised and made more accessible.

Scale in operations and interact

ions w

ith dig

ital systems w

ill

further reduce the tolerance for errors and outages. The risk of

data breaches is amplif

ied by h

ighly organised actors, with

threats such as ‘Ransomware as a Service’ and affordable,

sophist

icated AI systems help

ing to facil

itate attacks on

organisat

ions and

ind

iduals.

Data regulation continues to be ﬂuid and fragmented.

Geopolit

ical tens

ions have accelerated the implementat

ion

of data sovereignty laws, includ

ing data local

isat

ion

requirements and cross-border access restrict

ions. These

regulations often have an extraterritor

ial reach wh

ich could

increase operating costs sign

iﬁcantly, and also

impact

cross-border business models. Stakeholder expectations on

data management have also increased, particularly relating

to quality, integr

ity, record keep

ing, privacy, sovereignty, the

ethical use of data and applicat

ion of AI.

The sophist

icat

ion and adoption of AI solutions are growing

exponentially and will increase exposure to exist

ing r

isks such

as model, fraud, ﬁnancial cr

ime, compliance and Information

and Cyber Security (ICS) risks. In response, regulation is

accelerating, particularly around the ethical applicat

ion

of AI in decis

ion-mak

ing, necessitat

ing robust governance

measures. The Group needs to ensure that it develops

sufﬁcient

in-house subject matter expertise.

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.

The continued exploration of partnerships, alliances, dig

ital

assets, generative AI and nascent technologies, such as

quantum computing, provides both opportunit

ies and un

ique

challenges. This is increas

ingly

important as dig

ital assets

and distr

ibuted ledger technology become progress

ively

prevalent and interconnected with the ﬁnanc

ial ecosystem.

Supply chains are becoming more complex, interconnected

and dig

ital. H

ighly extended enterprises expand opportunit

ies

available for malic

ious actors, w

ith risk cascading further

down supply chains beyond just direct and third party risks.

These innovat

ions requ

ire special

ist

in-house expertise, new

operating models and adapting risk frameworks to perform

robust risk assessment and management of new threats.

There is also growing regulatory attention in many of these

areas. Balancing resil

ience and ag

ity

is essential given

the global nature of new technologies alongside the

maintenance of exist

ing systems. It

is imperat

ive to establ

ish

clear ownership, frameworks, and oversight of the use of

emerging technologies.

Standard Chartered

– Annual Report 2023

Strategic report

How these risks are mit

igated/next steps

•

We monitor emerging trends, opportunit

ies and

developments in technology as well as emerging business

models that may have impl

icat

ions for the banking sector.

•

We invest in our capabil

ies, to better prepare and protect

ourselves against possible disrupt

ion and new r

isks.

•

We track the evolving regulatory landscape affecting key

areas such as data management, dig

ital assets and AI,

includ

ing country-spec

ic requ

irements, and actively

collaborate with regulators to support important in

iat

ives.

•

We have established enhanced governance for novel areas

through the Dig

ital Asset R

isk Committee and Responsible

AI Council, which considers emerging regulatory guidance.

•

We manage data risks through our Compliance Risk Type

Framework and informat

ion secur

ity risks through our ICS

Risk Type Framework.

•

We have developed a Group Data Strategy, to strengthen

ownership of related data risks.

•

We mainta

in a ded

icated Data Compliance Policy with

globally applicable standards. These standards undergo

regular review to ensure alignment with evolving

regulations and industry best practice.

•

We mainta

in programmes to enhance our data r

isk

management capabil

ies and controls, includ

ing

compliance with BCBS239 requirements on effective risk

data aggregation, with progress tracked at executive level

risk governance committees

•

The Group has implemented a ‘defence-in-depth’ ICS

control environment strategy to protect, detect and

respond to known and emerging ICS threats.

•

New risks aris

ing from partnersh

ips, alliances, dig

ital assets

and generative technologies are ident

iﬁed through the

New Init

iat

ives Risk Assessment and Third Party Risk

Management Policy and Standards.

Demographic considerat

ions

Talent pools of the future

The expectations of the workforce, especially skilled workers,

continue to evolve. The COVID pandemic accelerated

changes on how people work, connect and collaborate,

with expectations on hybrid 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

the war for future talents. 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

Generation Z who make up an increas

ing proport

ion of

the global talent pool, and as dig

ital nat

ives possess the

attributes and skills we seek to pursue our strategy.

To sustainably attract, grow and retain talent, we must

continue to invest in and further strengthen our Employee

Value Proposit

ion (EVP) and our brand prom

ise, here for

good, through both ﬁrm-wide intervent

ions as well as

targeted action.

Demographic trends

Divergent demographic trends across developed and

emerging markets create contrasting challenges. Developed

markets’ state budgets could be strained by ageing and

shrink

ing populat

ions, whilst polit

ical stances reduce the

abil

ity to ﬁll sk

ills gaps through imm

igrat

ion. Conversely

emerging markets are experienc

ing fast-grow

ing, younger

workforces. Whilst it is an opportunity to develop talent,

population growth will put pressure on key resources such as

food, water, education and health, as well as government

budgets.

Population displacement, whether as a result of climate

events, lack of key resources, polit

ical

issues or war, may

increase the fragil

ity of soc

ietal structures in vulnerable

centres. Large scale movement could cause social unrest,

as well as propagate disease transmiss

ion and accelerate

the spread of future pandemics.

How these risks are mit

igated/next steps

•

Our culture and EVP work aims to address the emerging

expectations of the diverse talent we seek. The Brand and

Culture Dashboard monitors our divers

ity and

inclus

ion,

colleagues’ perceptions of our EVP, and whether we are

liv

ing our Valued Behav

iours. Management teams discuss

many of these metrics (includ

ing employee survey

responses) to ident

ify act

ions.

•

We are undertaking a multi-year journey of developing

future-skills amongst our colleagues by focusing on

continuous learning, to balance appropriately between

‘build

ing’ and ‘

induct

ing’ sk

ills into the Group.

•

Our internal Talent Marketplace provides colleagues with

opportunit

ies to learn through exper

ience by sign

ing up

for cross-functional (or even cross-geography) projects.

•

Employees in 44 markets are on agreed ﬂexible working

arrangements. We continue to enhance support and

resources to People Leaders and colleagues to help balance

productiv

ity, collaborat

ion and wellbeing.

•

Our Stands continue to be operational

ised through our

strategy, and help address the talent pool’s increased

expectations of us being purpose-led.

Sadia Ricke

Group Chief Risk Ofﬁcer

23 February 2024

Strategic report



The Women’s

International

Network

continues

to grow



SC Women’s International Network

(SC WIN) went from strength to

strength in 2023, launching in

Malaysia in June, Kenya in July,

Singapore in September, and

Hong Kong in October.

SC WIN aims to provide female

entrepreneurs with tailored ﬁnanc

ial

solutions, business education and

opportunit

ies to connect w

ith like-

minded entrepreneurs so they can

successfully grow their businesses.

SC WIN launched in India in 2022

and is set to launch in further markets

in 2024.

Read more at

sc.com/SCWin

Stakeholders and

Sustainab

ity overview

Stakeholders

Our commitment to sustainab

ity

Sustainab

ity Aspirat

ions

Sustainab

ity Strategic Pillars

Managing Climate Risk

Standard Chartered

– Annual Report 2023

Stragegic report

Standard Chartered

– Annual Report 2023

Strategic report

Standard Chartered

– Annual Report 2023

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 64

•

How we engage employees and respond to their interests.

See pages 60 to 64

•

How we respond to stakeholder interests through

sustainable and responsible business. See pages 54 to 64

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 229.

Examples of a selection of the Board’s princ

ipal dec

ions are

included throughout this section. This section also forms our

key non-ﬁnancial d

isclosures in relation to sections 414CA

and 414CB of the Companies Act 2006. Our Non-ﬁnanc

ial

informat

ion statement can be found at the end of th

is section

on page 79.

Listen

ing and respond

ing to stakeholder prior

ies and

concerns is crit

ical to ach

iev

ing our Purpose and del

iver

ing

on our brand promise, here for good. We strive to mainta

open and constructive relationsh

ips w

ith a wide range of

stakeholders includ

ing regulators, lawmakers, cl

ients,

investors, civ

il soc

iety, and community groups.

In 2023, we made improvements to some of our feedback

processes, so relationsh

ip managers could address cl

ient

needs 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 with external

stakeholders through channels such as sc.com, established

social media platforms and this report. More detailed

informat

ion on mater

ial sustainab

ity topics can be found

in our Sustainab

ity review on pages 90 to 133.

Stakeholders

As an internat

ional bank

operating in 52 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 2023

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

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

of dig

ital platforms – helps connect our cl

ients to the global

engines of trade and innovat

ion. As part of our a

im to reach

net zero carbon emiss

ions by 2050, our trans

ion ﬁnance

team have been working closely with our clients in hard-to-

abate sectors on their own transit

ions. Th

is is in addit

ion to our

plan to mobil

ise $300 b

ill

ion of Susta

inable Finance between

2021 and 2030.

Across the bank, we have processes and controls to mit

igate

greenwashing risks, and to support transparency we publish

the details of what constitutes our sustainable products and

investments universe externally.

We work closely with third-party Environmental, Social and

Governance (ESG) data providers to support the development

of product ideas, and due dil

igence

is conducted by our

in-house team on our high convict

ion su

ite of sustainable

funds.

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.

To act in the best interests of our clients, we use our ins

ights

gathered from our data alongside robust polic

ies, procedures

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

and services that meet client needs, regulatory requirements

and Group performance targets, while contribut

ing to a

sustainable and resil

ient env

ironment.

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.

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.

Throughout 2023, we 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

corridors could bring and how using our network could help

them ﬂourish.

Consumer, Private & Business Banking

In Consumer, Private & Business Banking (CPBB), 2023 saw

sign

iﬁcant enhancements

in dig

ital wealth w

ith the delivery of

around 20 new capabil

ies across our markets. This includes

client DIY Wealth Lending for Funds in Hong Kong and the

UAE and MyInsure in India where relationsh

ip managers can

leverage a dig

ital tool to perform comprehens

ive insurance

needs analysis and portfolio reviews for clients.

Our focus on partnerships continues to show results with

the growth of our exist

ing partnersh

ips business in China,

Vietnam, Indonesia, and Singapore, and we have expanded

the partnership business to Malaysia. In 2023, the Bank

launched partnerships with Ctrip in China, SeaMoney in

Indonesia, and Atome in Singapore and Malaysia. These

new and exist

ing partnersh

ips have incrementally added

2.6 mill

ion act

ive clients, growth to 1.7 bill

ion

in balances, and

a total of 7.5 bill

ion of new d

isbursements with impress

ive

revenue growth in 2023.

Addit

ionally, we made s

ign

iﬁcant progress

in our advisory

business with the launch of SC Wealth Select in 14 markets.

SC Wealth Select aims to bring a portfolio approach to client

conversations and is supported by our dig

ital adv

isory tool

MyWealth Advisor. Across CPBB, 8,000 colleagues have

completed the SC Wealth Select e-learning train

ing and

930 frontline colleagues have completed or are undertaking

the Standard Chartered INSEAD Wealth Academy Advisory

programme.

Importantly, we leverage our cross-border scale by using the

same technology and open architecture product platform in

different markets to offer competit

ive products and solut

ions

globally. Examples of this include our series of Signature CIO

Funds which is now available in 12 markets, with more to come

in 2024, and Wealth Saver, an innovat

ive sav

ings product, now

available in three markets.

Clients

Standard Chartered

– Annual Report 2023

Strategic report

Stakeholders

Clients

continued

Stakeholders

continued

Corporate, Commercial & Institut

ional Bank

ing

In 2023, Corporate, Commercial & 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 bu

ild

ing

a consistent dig

ital exper

ience and accelerated delivery

through Cash, Trade, Financ

ial Markets and Data Solut

ions.

Reﬁning our processes through cont

inuous improvement has

enabled us to achieve beneﬁts in revenue and cost savings by

creating capacity and reducing client wait

ing t

imes. We are

transforming our bank-wide processes by taking a client-

focused, data-driven dig

ital bank approach that w

ill enable

us to serve the needs of our clients better and faster, and

reduce the amount of frict

ion and complex

ity in our network.

We have set in place processes and guidel

ines spec

ic to our

client businesses for us to better understand and promptly

address issues.

We implemented self-serve dig

ital tools and capab

ies

such as chatbot, our mobile banking app, applicat

ion

programming interface (API) connectiv

ity and data analyt

ics.

These have reduced operational costs and enhanced the

overall client experience. Agile ways of working accelerated

our decis

ion-mak

ing processes and change delivery to create

great experiences and make it easier for our clients to bank

with us.

We continue to engage in partnerships that help us offer

enhanced services to customers. Collaborations with Linklog

and Taulia, which is part of SAP, aid clients with supply chain

ﬁnancing through blockcha

in and dynamic discount

ing.

Our work with the Partior platform allows us to deliver the

speed, efﬁciency and v

ity of domest

ic settlement systems

to cross-border payments and settlements networks to

absolve sign

iﬁcant wholesale cross border payment fr

ict

ions

and deliver instant, 24/7 settlement of dig

ital assets on

the blockchain.

Our work with dig

ital trade transact

ion portal Trade Track-It

integrates DHL’s tracking system and Lloyd’s List Intelligence

vessel tracking system through API, to offer clients end-to-end

vis

ity of the

ir trade transaction status globally.

Across both CCIB and CPBB, throughout 2024, we will continue

to listen and respond to stakeholder prior

ies and concerns,

addressing feedback as it emerges, strengthen our dig

ital

transformation and innovat

ion capab

ies, and support our

clients as they transit

ion to net zero.

Using artif

ial intell

igence (AI) to serve

CCIB clients

In 2023, we deployed artif

ial intell

igence (AI) and other

cutting-edge technology to improve how we serve our

Corporate, Commercial and Institut

ional Bank

ing clients.

This included:

•

client and frontline analytics that gave ins

ights for

better working capital decis

ions, FX hedg

ing, more

efﬁcient l

iqu

ity deployment and cross-selling

recommendations

•

data science in the use of in-house proprietary

ESG models

•

the use of a cloud-based machine learning platform to

automate manual processes and improve efﬁc

iency.

We continued our work with open banking APIs to

support sector solutions for ﬁntechs, shipp

ing, reta

il,

insurance and healthcare.

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 2023

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 2023, 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

crime frameworks.

Our Group Public and Regulatory Affairs team supports most

engagements while Conduct, Financ

ial Cr

ime & Compliance,

Risk, Legal and Finance ident

ify and analyse relevant pol

ies,

legislat

ion and regulat

ion.

This work is overseen by various governance forums with

the Bank, which 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 appropr

iate to

a global systemically important bank (G-SIB)

•

Robust standards for conduct and ﬁnancial cr

ime

•

Healthy economies, trade ﬂows and competit

ive markets

•

Sustainable Finance and net zero transit

ion

•

Dig

ital

innovat

ion

in ﬁnanc

ial serv

ices

• Operational resil

ience

• Customer protection

• Financ

ial stab

ity

Regulators and governments

How we create value

We aim to deliver robust returns and long-term sustainable

value for our investors.

How we serve and engage

We rely on capital from debt and equity investors to

execute our business model. Whether they have short- or

long-term investment horizons, we provide our investors

with informat

ion about progress aga

inst our strategic and

ﬁnancial frameworks.

Through our footprint and the execution of our sustainab

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.

The Group delivered a strong set of results in 2023 and

achieved its ﬁnanc

ial objective of a double-d

it return on

tangible equity (RoTE) for the year. We set out ﬁve actions

in 2022 designed to accelerate delivery of this RoTE target.

The strong execution of these actions over the last two years,

where we either achieved our targets ahead of plan or they

are well on-track, supported us to reach that milestone in

2023. We will now build on this success, taking action to deliver

sustainably higher returns with a focus on driv

ing

income

growth and improv

ing operat

ional leverage, to deliver a RoTE

of 12 per cent in 2026

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-year and full-year

results, conferences, roadshows, investor days and

media releases.

We continued to expand our use of virtual meetings during

the year 2023, coupled with a growing number of face-to-face

interact

ions. We hosted two cap

ital market days, focusing on

our Asia region and the Sustainab

ity opportunity in May and

November respectively.

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.

Investors

Standard Chartered

– Annual Report 2023

Strategic report

Stakeholders

How we create value

We are dedicated to engaging with suppliers who offer

value-adding goods and services across our network, and

we work closely with them to support global environmental

and social standards. Our suppliers are expected to be

ethical, respect human rights, divers

ity and

inclus

ion,

and the environment to support our colleagues, clients,

and communit

ies.

How we serve and engage

We must effectively manage, monitor, and mit

igate r

isks in

our supply chain. We do this through our Third-Party Risk

Management Policy. This, in conjunct

ion w

ith the Princ

ipal R

isk

Type Polic

ies and Standards, set out the Group’s m

imum

control requirements for the ident

iﬁcation, m

igat

ion and

management of risks aris

ing from the use of suppl

iers.

Our Supplier Charter sets out our princ

iples

in relation

to ethics, human rights, divers

ity and

inclus

ion, and

environmental performance. All newly onboarded suppliers

are expected to agree with these princ

iples. We seek to

reinforce this through the terms of our standard contract

templates, where possible, and we further encourage

alignment by sending an annual letter to all active suppliers.

This includes guidance regarding our stance on ethics and

conduct, sustainab

ity aspirat

ions, payment processes and

other relevant princ

iples such as Ant

i-Bribery and Corruption.

Our Charter covers all geographies and categories of

suppliers, and we plan to refresh the Charter in 2024.

Supporting our suppliers to achieve net zero

Our supply chain is crit

ical to ach

iev

ing the Group’s

sustainab

ity aspirat

ions, and we cont

inue to make good

progress. We encourage our suppliers to set science-based

emiss

ions reduct

ion targets and by 2028 we plan to direct

70 per cent of our total expenditure to suppliers who have set

or committed to setting science-based emiss

ion reduct

ion

targets. In 2023, we held group sessions with our suppliers to

support them reduce their emiss

ions, d

iscuss progress and

next steps.

Supporting a diverse and inclus

ive supply cha

We recognise the value of supply chain divers

ity to our

business and society. In 2023, we continued to integrate

supplier divers

ity

into our business strategy and make efforts

to include diverse suppliers in sourcing activ

ies and improve

spending levels with diverse suppliers as appropriate. To do

this we have continued to collaborate with non-governmental

organisat

ions (NGOs), bus

iness incubators and others to help

build and develop our diverse and talented supplier pool.

In 2023, this included jo

ing member-buyer events, local

procurement networking activ

ies and best practice sharing

events with partners like WEConnect International – a global

network supporting women-owned businesses to connect

with larger companies.

Suppliers

Stakeholders

continued

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 2022 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

sustainab

ity ind

ices that benchmark our performance,

includ

ing the Carbon D

isclosure Project (CDP) Climate

Change survey and Workforce Disclosure Init

iat

ive.

Regular engagement with different shareholder groups

ensures that we act fairly between them. Our princ

ipal

engagement event with our retail shareholders is our AGM

and in order to hear from as wide a group as possible we

encourage maximum partic

ipat

ion by way of attendance

in person and via a live web portal. Further details of our

2023 AGM

are on page 159.

In 2024, 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 del

iver

ing

sustainably higher returns.

Their interests

•

Safe, strong and sustainable ﬁnanc

ial performance

•

Facil

itat

ion of sustainable ﬁnance to meet the United

Nations (UN) Sustainable Development Goals

•

Progress on ESG matters, includ

ing advanc

ing our

net zero agenda

Investors

continued

Strategic report

Standard Chartered

– Annual Report 2023

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, internat

ional

and local NGOs, from those focused on environmental and

public policy issues to partners deliver

ing our commun

ity

programmes. To shape our strategy, we aim for constructive

dialogue that helps us to understand alternative perspectives

and ensure 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 2023, climate change, our net zero pathway, human rights

and nature 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 standards. For

complex issues such as climate change, we held bilateral

virtual meetings with NGOs to exchange perspectives in

greater depth.

In 2023, together with the Standard Chartered Foundation,

we continued to engage with NGOs, charit

ies and other

organisat

ions to empower the next generat

ion to learn, earn

and grow through Futuremakers by Standard Chartered,

our global community in

iat

ive to tackle

inequal

ity by

promoting greater economic inclus

ion. We prov

ided

education, employabil

ity and entrepreneursh

ip support to

more than one mill

ion young people, w

ith 62 per cent of those

engaged being women.

To close the gender gap and promote access to ﬁnance,

we piloted ﬁnanc

ing fac

ies to support women-led

microbus

inesses w

ith green and social ambit

ions. At the UN

Climate Change Conference, COP 28, we held a Futuremakers

Youth Panel in Dubai, and online in Nairob

i to generate

ins

ights on scal

ing tech solutions for a green and inclus

ive

economy. In 2024, we will conduct a study on our social return

on investment to assess the impact of Futuremakers.

By offering three days paid volunteering leave, we inst

illed

a strong culture of volunteering where 61 per cent of our

colleagues contributed over 76,000 days giv

ing back to the

community. In 2024, we will increase our skills-based activ

ies

leveraging our colleagues’ skills to deepen our impact, with a

target of 75,000 skills-based hours across our footprint.

Their interests

•

Climate change and decarbonisat

ion

• Nature

• Human rights

• Financ

ial

inclus

ion

• Economic empowerment

• Gender equity

• Community impact.

Society

We have continued to build capacity with our own colleagues

through online train

ing on suppl

ier divers

ity and

inclus

ion.

Highl

ight

ing our commitment, we have been awarded

the Chartered Institute of Procurement and Supply Asia

Excellence in Procurement Award for outstanding Divers

ity

and Inclusion practices in procurement teams and Best

Init

iat

ive to Build a Diverse Supplier Base. In 2023,

approximately 40 per cent of our newly onboarded suppliers

were diverse* includ

ing, for example, KASHow. KASHow

is a

micro-owned and predominately women-led business, which

managed the logist

ics and plann

ing of Standard Chartered

Hong Kong’s 25th marathon in 2023. In addit

ion, KASHow was

supportive of our sustainab

ity object

ives by us

ing recycled

materials for the marathon event logist

ics and the bu

ild

ing of

the carnival event booth.

*For Standard Chartered, diverse suppliers are deﬁned as:

•

Small enterprise (10–49 employees + turnover

<USD10 mill

ion)

•

Micro enterprise (<10 employees + turnover <USD2 mill

ion)

•

Medium enterprise (50–249 employees + turnover

<USD50 mill

ion)

•

Women owned (51 per cent or more owned by Women

(South Africa 30 per cent owned by women as per local

government regulations))

•

Ethnic minor

ity owned (51 per cent owned by ethn

minor

ies)

•

Veteran Owned (51 per cent or more owned by veterans)

•

Disabled owned (51 per cent or more owned by differently

abled people)

•

LGBT+ owned (51 per cent owned by LGBT+ (not possible

in some countries due to local legal regulations))

•

Social enterprises (NGOs and charit

ies)

Their interests:

•

Open, transparent and consistent tendering process

•

Accurate and on-time payments

•

Will

ingness to adopt suppl

ier-driven innovat

ions

•

Obtain guidance on implementat

ion of Susta

inab

ity

matters

Standard Chartered

– Annual Report 2023

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 advances

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

ready, and are co-creating with our employees to build an

inclus

ive,

innovat

ive and cl

ient-centric culture that drives

ambit

ion, act

ion 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. 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. We proactively assess and manage people-related

risks, such as, capacity, capabil

ity and culture, as part of our

Group Risk Management Framework.

Our People Strategy, which was approved by the Board, stays

relevant and future-focused, with external events having

accelerated many of the future of work trends which continue

to inform 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 exist

ing and potent

ial employees want

to: have interest

ing and

impactful jobs; innovate with

in a

diverse set of markets and for a spectrum of clients; cultivate a

brand that sustainably drives commerce and offers enrich

ing

careers and development; and be supported by great

people leaders. They want these elements to be anchored

in competit

ive rewards and a pos

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, colleague

sentiment is captured 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 addit

ion to

leveraging 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 with the workforce can be found

on page 161 in the Directors’ report.

In 2023, our annual My Voice survey was conducted in May

and June: 87 per cent of our employees (69,935) and 58 per

cent of elig

ible agency workers (2,203) part

ipated

in the

survey. Key measures of employee satisfact

ion have cont

inued

to improve year-on-year, with an 8.3 point increase in our

employee Net Promoter Score (NPS) (which measures

whether employees would recommend working for us) as

well as a 3 percentage point increase in our employee

engagement index. Over 87 per cent say that the Group

meets or exceeds their expectations. More colleagues are

saying that we are simpl

ify

ing the client experience, that

we are collaborating better to deliver results, that decis

ion-

making is becoming easier and our processes are becoming

more efﬁcient. It

is also encouraging to see that 97 per cent of

employees feel committed to doing what is required to help

the Group succeed, and 90 per cent feel proud about working

for the Group. The consistent increase in scores ind

icates that

we are continu

ing to

improve as a place to work.

This is also underscored by the ‘Great Place to Work’

certif

icat

ions that we have received across multiple markets,

includ

ing

in India, Vietnam, Bahrain, Poland, the UK and the

US. Our Glassdoor rating (out of ﬁve) has increased from 3.7 in

2019 to 3.9 in 2023, and 77 per cent would recommend working

with us to friends. We also continue to be recognised as an

employer of choice and details of our accolades can be found

on page 522 of the Report and on sc.com/awards.

All of this is ind

icat

ive of our progress in further strengthening

our EVP to attract, retain and grow the skills and talent that

are crit

ical to del

iver

ing our strategy and outcomes for cl

ients.

Strengthening our culture of high performance

As the Group transforms to achieve our strategic ambit

ions,

we continue to embed our refreshed approach to

managing, recognis

ing and reward

ing performance.

We are strengthening a culture of ambit

ion, act

ion and

accountabil

ity by

increas

ing the frequency of performance

and development conversations and emphasis

ing the

importance of two-way feedback. We are placing greater

focus on recognis

ing outperformance that

is driven by

collaboration and innovat

ion, and are encourag

ing more

aspirat

ion dur

ing goal-setting and ﬂexib

ity in reward

decis

ions (supported by the removal of formula

ic performance

decis

ions start

ing 2022).

Behavioural changes are vis

ible. Colleagues are tell

ing us that

they are having more regular performance check-ins with their

leaders – with over two-thirds doing so at least every quarter.

In 2023, almost 250,000 pieces of feedback were exchanged

among colleagues (which is close to 1.4 times the amount of

feedback exchanged in 2021, before our refreshed approach

was launched across the Group). We know that recognit

ion

also an important enabler of high performance, and we have

launched a dig

ital platform

in January 2024 to encourage

democratised, peer-to-peer recognit

ion for all colleagues.

Employees

Stakeholders

continued

Strategic report

Standard Chartered

– Annual Report 2023

The wellbeing of our colleagues is crit

ical to susta

inable

high-performance, and supporting their health, safety, and

resil

ience cont

inues to be a key prior

ity. In 2023, levels of h

igh

work-related stress felt by employees continued to drop.

Employees felt more supported with their mental, physical,

social and ﬁnanc

ial wellbe

ing needs, and their satisfact

ion

with work–life balance continued to increase. Globally,

colleagues are provided with access to wide-ranging support

and tools to manage their wellbeing, includ

ing several

progressive beneﬁts, a mental health app, an employee

assistance programme, wellbeing toolkits, and a network of

trained mental health ﬁrst aiders. We continue to tackle the

drivers of work-related stress, which includes insert

ing

wellbeing skills-build

ing

into learning intervent

ions.

We have been embedding the ﬂexible working model that we

iated in 2021, combin

ing ﬂex

ity in working patterns and

locations, to enhance both the productiv

ity and exper

ience of

our workforce. Over 52,000 employees in 44 markets are now

on agreed ﬂexi-working arrangements, with the major

ity

having signed up to work from the ofﬁce for two to three days

a week. Our model consciously balances client needs and

business prior

ies with ind

idual choice, allowing us to be

inclus

ive of the d

iverse needs of our workforce. Colleagues

continue to adopt ways of working that balance the beneﬁts

of remote working with face-to-face interact

ions. Toolk

its

and guidance are being provided to people leaders and

ind

iduals to help navigate ﬂexible working. These include

support on organis

ing team and

ind

idual work to enhance

productiv

ity and wellbe

ing; on leading in key moments such

as onboarding new team members, returning from parental

leave and during performance conversations; and on

strengthening connections in ﬂexible work environments.

We also continue to re-imag

ine our phys

ical workspaces with

the relevant infrastructure and technology to provide hubs

for teamwork, collaboration and learning. As a result of these

ongoing intervent

ions, employees who are work

ing ﬂexibly

express greater satisfact

ion w

ith overall employee experience

and work–life balance in comparison to employees working

fully remotely or fully in the ofﬁce. Also, over 80 per cent of

colleagues expressed in the 2023 My Voice survey that ﬂexible

working has had a posit

ive

impact on their abil

ity to get work

done and to collaborate, as well as their sense of belonging

and social connection with others.

Read more about our approach to ﬂexible working at

sc.com/ﬂexiblework

ing

Build

ing leadersh

ip capabil

ies

Exceptional performance needs exceptional leadership, and it

is encouraging to see that manager NPS continues to increase

to 37.9 points in 2023 (up 4.8 points year-on-year). Engaging,

developing, and measuring our people leaders continues to

be a crit

ical enabler of our performance and culture. Our

Leadership Agreement sets out clear expectations from

our leaders to Aspire, Inspire and Execute. It also forms the

foundation of a modernised leadership development

curriculum through which one-third of our people leaders are

being covered each year to help them build new skills and

habits across different leadership stages – includ

ing sk

ills on

coaching, performance management in business-specif

contexts, leading for transformation, and leading through

ambigu

ity. Wh

ile more than 4,700 leaders learned through

face-to-face leadership programmes during the year,

leadership skill-build

ing was also made access

ible to

all colleagues to build the capabil

ity deeper

into the

organisat

ion. Almost 17,000 employees s

igned up to our

60-day Leadership Health journey of regular micro-learning

activ

ies; over 26,000 accessed the monthly Leadership

Insights newsletter and over 8,500 tuned into leadership

sessions during our annual Global Learning Week.

In 2023, 84 per cent of our people leaders received feedback

through our ‘always on’ feedback tool available to all

colleagues, as well as through the structured 360-degree

feedback tool that is available to mid-to-senior people

leaders. Leaders are also provided a consolidated view

of the environment they are creating for their teams,

and feedback on their leadership skills, as part of their

Leadership Dashboard. The dashboard has been designed

to bring transparency to performance and development

conversations, and to highl

ight the value we place

on leadership.

Read our Leadership Agreement at

sc.com/leadershipagreement

Developing skills of future strategic value and

enabling careers

To keep pace with technological innovat

ion, evolv

ing

customer expectations and the changing world of work,

we are adopting a ‘skills-led’ approach – accelerating the

development of future skills among our workforce and

bring

ing

in greater agil

ity to how sk

ills are deployed to areas

of opportunity across the Group. We are helping employees

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. This includes helping them strengthen a combinat

ion

of human and technical skills, as well as build

ing a culture of

continuous learning that empowers them to grow and follow

their aspirat

ions. S

ince 2020, the average hours invested

by employees in personal development has increased by

23.9 per cent to 26.8 hours in 2023.

Employees

continued

Standard Chartered

– Annual Report 2023

Strategic report

Stakeholders

Learning in classrooms is balanced with learning through our

online learning platform diSCover, which is also accessible

via a mobile app. Over 70,000 colleagues actively used the

platform in 2023 and 30,000 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 are also build

ing and

practic

ing new sk

ills on the job by sign

ing up for projects (often

cross-functional and cross-location) through our AI-enabled

internal Talent Marketplace platform. Since its launch in 2020,

over 28,000 employees have registered on the platform, with

over 2,000 of them being assigned to projects. Deploying their

skills at speed across our network has resulted in unlocking

over $6.2 mill

ion

in terms of productiv

ity. By comb

ing such

project opportunit

ies w

ith purposeful internal talent moves,

we continue to enhance the career experience of colleagues.

The Marketplace also acts as a platform to connect

employees to mentors across the Group.

The 2023 My Voice scores ind

icate that our efforts are

in the

right direct

ion, as employee sat

isfact

ion w

ith development

and growth opportunit

ies

increased compared to previous

years, and highl

ight that th

is is an area we must continue to

focus on.

We continue to expand targeted learning journeys to upskill

colleagues towards crit

ical ‘future’ roles where our strateg

workforce planning analysis has predicted an increas

ing

need for talent, includ

ing un

iversal banker, data translator,

cloud security engineer, product owner/scrum master and

cyber security analyst roles. At the same time, we have

been strengthening and scaling the proposit

ion to support

colleagues in build

ing system

ic skills, in areas such as

sustainab

ity, innovat

ion, data, d

ital and leadersh

ip, which

an increas

ing populat

ion of the workforce is antic

ipated to

need to keep pace with the changes happening in the sector.

We are also further embedding a focus on skills across our

talent management processes. Our refreshed approach to

ident

ify

ing the future potential of our workforce focuses

on their abil

ity aga

inst a range of skills, along with their

aspirat

ion to put these sk

ills into action by taking on complex

responsib

ies (

in turn moving away from the tradit

ional

emphasis on past performance being a primary ind

icator

of future potential). Through this approach we are placing

strong emphasis on learning agil

ity to

ident

ify the talent that

we want to accelerate as well as deploy in areas of highest

impact for clients and the business.

Creating an inclus

ive workplace

We believe that inclus

ion

is what enables our diverse talent to

truly deliver impact and drive business success. Through our

annual My Voice survey and supplemented by qualitat

ive

feedback gathered, we aim to better understand the lived

experiences of our colleagues, and then act to make targeted

and meaningful changes to further drive inclus

ion and

enhance their experience.

Our progress in this space is reﬂected in the 83.2 per cent

of employees who shared posit

ive sent

iments around our

culture of inclus

ion

in the 2023 survey, consistent as last year.

This has been enabled by continued efforts towards

increas

ing awareness around d

ivers

ity and

inclus

ion

princ

iples, unconsc

ious bias and micro-behaviours as well

as by emphasis

ing the

importance of creating an inclus

ive

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

included’ learning programme which has been completed

by more than 34,000 colleagues by the end of 2023. Further,

the ‘Respect at Work’ e-learning programme that helps

understand what constitutes harassment, bullying,

discr

inat

ion and v

ict

isat

ion,

is now mandatory for

all employees.

We aim to further strengthen our inclus

ive culture, where

all our people feel that their ident

ity

is understood

and recognised for its uniqueness and anyone with the

capabil

ity to excel can do so. Employees are prov

ided, where

legally permiss

ible, w

ith the abil

ity to share the

ir ident

ity data

through our internal employee portal. We are focused on

iat

ives that encourage and

increase self-declaration

(includ

ing soc

io-economic status in the UK), so that we can

further improve colleague experience by introduc

ing pol

ies

and intervent

ions that are representat

ive of the needs of our

diverse workforce.

Our continued partnership with Purple Tuesday is one of

the many in

iat

ives through wh

ich we are creating a work

environment where colleagues are encouraged to bring their

whole selves to work. The partnership is helping increase the

vis

ity of role models and careers for those w

ith disab

ies

across more than 50 markets. It is also helping to drive an

ongoing conversation, to build awareness and break down

myths and stereotypes when engaging with clients and

colleagues with disab

ies. The SC-Out Pr

ide Leadership

Summit this year saw Employee Resource Group leads, allies

and advocates come together from across 14 markets to

deﬁne our approach for further build

ing a respectful,

supportive, and safe work environment for our LGBT+

Employees

continued

Stakeholders

continued

Embedding a focus on skills across the

employee lifecycle

In our CCIB business, we have been embedding a focus

on skills across the employee lifecycle in the way we

hire, ident

ify, develop and deploy talent. We have

updated part of our skills library to develop 35 skills-based

role proﬁles and job descript

ions for the h

ighest impact

roles that will help enhance our client proposit

ion and

deliver on our business strategy. In 2024, we will further

enable a democratised career and development

experience for colleagues in CCIB through our internal

Talent Marketplace, which will allow them to better

understand and develop the skills needed to excel in

their exist

ing role as well as to grow and move to the

aspired roles. It will also enable leaders and recruiters

to rapidly ident

ify, access and deploy sk

ills at scale in a

cost-efﬁcient manner.

Strategic report

Standard Chartered

– Annual Report 2023

Employees

continued

Female representation

Female

(2022: 43%)

Board

2022

2023

Female

36.1

(2022: 32.8%)

Management Team and their direct reports

2022

2023

Female

Male

Female

Male

Senior leadership

(Managing directors and band 4)

2022

2023

Female

44.8

(2022: 45.3%)

All employees

2022

2023

Female

32.5

(2022: 32.1%)

Female

1,474

Male

3,050

Undisclosed

Female

38,051

Male

46,004

Undisclosed

952

colleagues. We also recognise six key 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, promoting best practices and committ

ing to

take practical steps to advance the overall Divers

ity and

Inclusion (D&I) agenda in our communit

ies.

Our gender divers

ity cont

inues to grow, with more women

leaders moving up to senior roles. Women currently represent

38 per cent of the Board, 14 of our CEOs are women, and

representation of women in senior leadership roles increased

to 32.5 per cent at the end of 2023. 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.

We remain focused on build

ing a workforce that

is truly

representative of our client base and footprint. As of 2023,

31 per cent of our Board ident

iﬁes as be

ing from a minor

ity

ethnic background, above our aspirat

ion of 30 per cent.

Further, 26.3 per cent of our Global Management Team

and their direct reports ident

ify as Black, As

ian or minor

ity

ethnic. In the UK, Black representation in senior leadership is

2.5 per cent and Black, Asian and minor

ity ethn

ic in senior

leadership is 27.8 per cent. In the US, Black/African American

representation in senior leadership is 4 per cent and Hispan

ic/

Latinx in senior leadership is 10.1 per cent. We continue to

develop strategic partnerships and experiment with

programmes to widen our talent pools (such as the Spring

Insights Programme in 2023 that provided a multi-day

immers

ive exper

ience to Black, African American, Hispan

and Latinx students in New York and London to learn about

our CCIB business, and access internsh

ip opportun

ies).

As we work towards achiev

ing our 2025 UK and US ethn

ity

senior leadership aspirat

ions, we w

ill also be updating these

targets to extend to 2027. At the same time, we are focused on

nurturing local talent in markets across Asia, Africa and the

Middle East.

Leadership commitment is core to our approach on D&I.

Our Global D&I Council is chaired by our CEO, CCIB and

Europe & Americas and comprises of enterprise-wide leaders

representing various business, functions and geographies

from across the Group. The Council is responsible for our

overall D&I strategy, direct

ion sett

ing, and overseeing

the implementat

ion of susta

inable and measurable

improvements. In 2023, as a result of our listen

ing exerc

ises

and data ins

ights, we also establ

ished a Black and African

Talent Steering Committee and Working Group, and

appointed Group Management Team and Global D&I Council

sponsors to advocate for leadership action in focus areas

ident

iﬁed, such as career progress

ion and the internat

ional

mobil

ity exper

ience.

Read more about our approach towards strengthening divers

ity and

inclus

ion at

sc.com/divers

ityfa

irpayreport

International Day Against Homophobia, Transphobia and Biphob

ia, Internat

ional 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.

Standard Chartered

– Annual Report 2023

Strategic report

Stakeholders

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 enable the potential

of our 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)

since 2017. 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 hourly and bonus pay

gaps have decreased in most markets, particularly in the UK

and the US. While this shows continuous improvement since

our ﬁrst disclosure, they remain at a level that sign

iﬁes there

are proportionally 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.

In addit

ion to the gender pay gap analys

is, we are publish

ing

our ethnic

ity pay d

isclosure for the UK and the US for the

second year, and this year we have expanded the disclosure

to include hourly and bonus pay gaps for each ethnic group.

The results ind

icate that there are proport

ionally more

White and fewer Black, and in the case of the US, also fewer

Hispan

ic, colleagues

in senior roles and/or roles with higher

market rates of pay. While our adjusted ethnic

ity pay gaps

ind

icate that colleagues w

ith different ethnic

ity backgrounds

are paid sim

ilarly

in the same business areas and at the

same levels of senior

ity, there

is still more work to be done

to promote representation of different ethnic groups with

the organisat

ion.

Equal pay is a key commitment in our Fair Pay Charter and we

carry out checks during hir

ing, promot

ion and year-end review

in all markets to challenge potential bias and ensure there is

equal pay for equal work.

Read more about our gender and ethnic

ity pay gap analys

is at

sc.com/

divers

ityfa

irpayreport

2023 Gender pay gap

Hong Kong

Singapore

UAE

Mean hourly pay gap

22%

21%

29%

30%

21%

Mean bonus pay gap

44%

35%

40%

56%

36%

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.

2023 UK ethnic

ity pay gap

Mean Pay Gap

Hourly pay

Bonus pay

Asian

13%

26%

Black

25%

48%

Multi-racial

14%

Other

14%

22%

2023 US ethnic

ity pay gap

Mean Pay Gap

Hourly pay

Bonus pay

Asian

14%

28%

Hispan

27%

51%

Black

28%

51%

Dual or Multi

-36%

Analysis based on 77 per cent of our UK workforce that shared with us their ethnic

ity background, and 100 per cent of our US workforce

The hourly pay gap is calculated by taking the difference between the mean minor

ity ethn

ic group and White hourly pay, expressed as a percentage of the

White amount

The bonus pay gap is calculated by taking the difference between the mean minor

ity ethn

ic group and White bonus payments received in the 12 months prior to

5 April, expressed as a percentage of the White amount.

Employees

continued

Enhancing experience and inclus

ion through

progressive, purpose-led beneﬁts

Taking an intersect

ional approach to d

ivers

ity,

inclus

ion

and wellbeing, we have continued to introduce

progressive, purpose-led beneﬁts. Going beyond our

min

imum standard for matern

ity leave, all colleagues,

irrespect

ive of gender, relat

ionsh

ip status, or how a ch

ild

comes to permanently join the

ir family, are now elig

ible

for a min

imum of 20 weeks of pa

id parental leave. We are

also expanding medical beneﬁts to make comprehensive

coverage accessible for menopause-related treatments

to all colleagues and their partners, includ

ing access

to special

ised med

ical practit

ioners and prescr

ipt

ion.

This is in addit

ion to the ex

ist

ing support for manag

ing

menopause symptoms through ﬂexible working options,

paid leave for treatment, workspace adjustments and

access to menopause counselling. We believe that such

beneﬁts continue to be crit

ical levellers for gender

equality, encouraging women’s partic

ipat

ion in the

workforce and LGBT+ inclus

ion, al

ign

ing to our L

ift

ing

Partic

ipat

ion Stand.

Stakeholders

continued



Tackling food insecur

ity

with micro-loans



In 2023, through Futuremakers by Standard Chartered -

our ﬂagship community in

iat

ive ded

icated to helping the

next generation learn, earn, and grow – we helped young

entrepreneurs by provid

ing m

icro loans and business

acceleration programmes. Funded by the Standard Chartered

Foundation, we partnered with Youth Business International

and its member Somo in Kenya, to help Ivy (pictured) kickstart

her now thriv

ing mushroom farm

ing business, tackling food

insecur

ity

in her area.

Read more at

sc.com/IvyKenya

Strategic report

Standard Chartered

– Annual Report 2023

Standard Chartered

– Annual Report 2023

Strategic report

Sustainab

ity overview

Our commitment to sustainab

ity

We are committed to the sustainable economic and social development

of our footprint markets, helping people to thrive long-term.

With a long-standing presence in parts of the world where

sustainable ﬁnance can have a sign

iﬁcant

impact, we

facil

itate the movement of cap

ital to where it is needed most.

We apply our knowledge across our market footprint and

the innovat

ive m

indset of our teams to create ﬁnanc

ial

solutions that help to address challenges and support

sustainable growth.

The work we do to accelerate the transit

ion to net zero,

lift partic

ipat

ion in the economy and reset globalisat

ion

is fundamental to our business.

These three areas of focus are known as our

Stands

and

inform our overall strategy, includ

ing our approach to

sustainable ﬁnance, our advocacy efforts on behalf of our

markets and engagement with our employees and society.

Further details can be found in Our Stands on

page 26

Embedding sustainab

ity across our business is a strategic

prior

ity for the Group. To accelerate our Susta

inab

ity agenda,

the Group’s inaugural Chief Sustainab

ity Ofﬁcer (CSO)

was appointed in 2022. Since then, our dedicated CSO

organisat

ion – wh

ich houses our Sustainable Finance,

Sustainab

ity Strategy, Net Zero Delivery, Strategic Init

iat

ives

and Environmental and Social Risk Management teams – acts

as a centre of excellence and a catalyst for the execution of

the Group-wide sustainab

ity strategy and the achievement

of our net zero roadmap.

We focus on deliver

ing both our long-term susta

inab

ity goals

– our

Sustainab

ity Aspirat

ions

– as well as our short-term

targets and immed

iate pr

ior

ies – our

Sustainab

ity

Strategic Pillars

Sustainab

ity continues to be included in the 2024 Group

scorecard and 2024–26 Long-Term Incentive Plan (LTIP) with

performance measures that align with our Sustainab

ity

Aspirat

ions and Susta

inab

ity Strategic Pillars.

Further details can be found in the Directors’ remuneration

report on

pages 182 to 216

Independent Lim

ited Assurance

Ernst & Young LLP (EY) were appointed to provide

independent lim

ited assurance over certa

in data points

with

in th

is Annual Report, ind

icated w

ith a caret symbol (^).

The assurance engagement was planned and performed

in accordance with the International Standard on

Assurance Engagements (UK) 3000 (July 2020), Assurance

Engagements Other Than Audits or Reviews of Histor

ical

Financ

ial Informat

ion (ISAE (UK) 3000 (July 2020)). This

independent assurance report is separate from EY’s audit

report on the ﬁnancial statements and

is available at

sc.com/sustainab

ityhub

. This report includes further

detail on the scope, respective responsib

ies, work

performed, lim

itat

ions and conclusions.

We obtained independent lim

ited assurance on the

Group’s Scope 1 and 2 greenhouse gas (GHG) emiss

ions

(excluding fugit

ive em

iss

ions) by Global Documentat

ion

Ltd. We also obtained reasonable assurance on the

Group’s Scope 3 emiss

ions assoc

iated with business

travel (air travel) from Eco–Act. These verif

icat

ions were

conducted in accordance with the ISO 14064-3 Greenhouse

gases standard.

Discla

imer

We report on Sustainab

ity and Environmental, Social

and Governance (ESG) matters throughout this Annual

Report, in particular in the following sections: (i) Strategic

report, Sustainab

ity overview on pages 66 to 79; (i

Sustainab

ity review on pages 92 to 133; (i

i) Risk review

on pages 298 to 313; and (iv) in the Supplementary

sustainab

ity informat

ion sect

ion on pages 504 to 516.

In this ‘Sustainab

ity overview’, we 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 pages 519

and 520. Addit

ional

informat

ion can be accessed

through our suite of supporting sustainab

ity reports

and disclosures via sc.com/sustainab

ityhub.

Strategic report

This section provides an overview of the Group’s approach to sustainab

ity and details on

how we manage climate risk. A more detailed Sustainab

ity Review section, includ

ing our

broader risk view, is available from page [

] to [

] for further informat

ion.

A word from our Chief Sustainab

ity Ofﬁcer,

Marisa Drew

In 2022, the CSO organisat

ion was establ

ished with

Standard Chartered to build on the Group’s long-standing

sustainab

ity agenda. Since its creation, we have made

substantial progress, by continu

ing to embed susta

inab

ity

across the organisat

ion and strengthen

ing our support

for clients on their transit

ion journeys. The longer-term v

ion

and areas of focus expressed by our Stands and our

Sustainab

ity Aspirat

ions have helped shape our near-

term execution prior

ies deﬁned by our Sustainab

ity

Strategic Pillars.

Our Sustainable Finance franchise has generated over

$720 mill

ion^, or over s

ix per cent of our total Corporate,

Commercial and Institut

ional Bank

ing (CCIB) income in 2023,

a year-on-year growth rate of 42 per cent. Following on from

this performance and build

ing on the momentum

in our

business, our focus turns to our stated ambit

ion to del

iver at

least $1 bill

ion

in sustainable ﬁnance income in 2025. To do

that, we are hard at work invest

ing

in people, systems and

infrastructure to build further capabil

ity and capac

ity. This

enables our teams across the Group to support our clients’

transit

ion and susta

inable growth plans by deploying lending,

cash, trade, corporate ﬁnancing and adv

isory services, and

provid

ing cap

ital to advance the next wave of sustainab

ity

and technological solutions.

Sustainab

ity overview content map

Introduction and overview

Page 66

Commitment

and approach to

sustainab

ity

Sustainab

ity

Aspirat

ions:

our long-term goals

Aspirat

ion 1:

Mobil

ise $300 b

ill

ion of Susta

inable Finance by 2030

Page 68

Aspirat

ion 2:

Operational

ise our

inter

im 2030 ﬁnanced em

iss

ions

targets to meet our 2050 net zero ambit

ion

Page 68

Aspirat

ion 3:

Enhance and deepen the sustainab

ity ecosystem

Page 68

Aspirat

ion 4:

Drive social impact with our clients and communit

ies

Page 68

Sustainab

ity

Strategic Pillars:

our short-term

targets and

immed

iate pr

ior

ies

Pillar 1:

Scale Sustainable Finance income

Page 70

Pillar 2:

Further embed sustainab

ity across the organisat

ion

Page 71

Pillar 3:

Deliver on the annual milestones set forth in our net zero

roadmap

Page 73

Pillar 4:

Leverage our innovat

ion hubs

Page 75

Managing Climate Risk

Page 76

Non-ﬁnancial and susta

inab

ity informat

ion statement

Page 79

Values noted with a caret symbol (^) are subject to independent lim

ited assurance by EY, report ava

ilable at

sc.com/sustainab

ityhub

Strategic report

Our footprint – with its access to capital markets and

operations in regions most vulnerable to climate change

– means that Standard Chartered sits at the intersect

ion

between capital providers and those who need it most. For

many of our markets and clients, getting to net zero will be a

long and complex task. Their transit

ion must be on a just bas

to address environmental challenges without sacrif

ing their

economic growth and social development ambit

ions.

Deliver

ing a just trans

ion br

ings sign

iﬁcant opportun

ity for

innovat

ion and growth. To leverage th

is, we created a series

of thematic innovat

ion hubs

in 2023, covering: Adaptation

Finance, Blended Finance, Carbon Markets and Nature

Posit

ive Solut

ions. Each hub is helping to advance emerging

thematic areas of sustainab

ity that are nascent, but offer

the potential for scale, and are where the Group has a core

competency. The themes covered by the hubs are particularly

relevant to our clients across our footprint markets and serve

to support innovat

ion at the forefront of susta

inab

ity.

Furthermore in 2023, we expanded our work on social

sustainab

ity, with a dedicated investment to bring the

breadth of our Sustainable Finance offering together with

our commitment to the people and communit

ies we serve.

We have also welcomed new team members includ

ing

experts in blended ﬁnance, sustainable and transit

ion ﬁnance,

climate risk, nature and carbon accounting, build

ing up our

people power to allow us to effectively leverage the CSO

organisat

ion across the Group, as we look to del

iver on

our strategy.

As I reﬂect on my ﬁrst full year at the bank, it is clear that our

sustainab

ity ambit

ion has the unwaver

ing commitment of

the Group’s Board of Directors and the Management Team,

backed by an extraordinary level of enthusiasm and

engagement. Looking ahead to 2024, my prior

ity

is on driv

ing

our four Sustainab

ity Strategic Pillars: scaling up Sustainable

Finance; further embedding sustainab

ity across the Group;

deliver

ing on our net zero roadmap; and leverag

ing our

innovat

ion hubs to dr

ive ecosystem development and

future income.

Standard Chartered

– Annual Report 2023

Standard Chartered

– Annual Report 2023

Strategic report

Sustainab

ity overview

Sustainab

ity Aspirat

ions:

our long-term goals

Mobil

isat

ion of Sustainable Finance is deﬁned as any investment or ﬁnanc

ial serv

ice provided to clients that supports: (i) the preservation and/or improvement of

biod

ivers

ity, nature or the environment; (i

i) the long-term avo

idance/decrease of GHG emiss

ions,

includ

ing the al

ignment of a client’s business and operations

with a 1.5 degree Celsius trajectory (known as transit

ion ﬁnance); (

i) a social purpose; or (iv) incent

ing our cl

ients to meet their own sustainab

ity object

ives

(known as sustainab

ity-linked ﬁnance).

Values noted with a caret symbol (^) are subject to independent lim

ited assurance by EY, report ava

ilable at

sc.com/sustainab

ityhub

Since 2016, the Group’s approach to sustainab

ity has been underpinned by a suite

of Sustainab

ity Aspirat

ions. Dur

ing 2023, we refreshed and consolidated our

Sustainab

ity Aspirat

ions

into four overarching long-term goals, each supported by

key performance ind

icators. Together, these reﬂect our comm

itment to sustainable

social and economic development.

Progress to date

Sustainab

ity Aspirat

ion

Aspirat

ion 1:

Mobil

ise $300 b

ill

ion

of Sustainable

Finance

1,2

Across our markets, many clients are at the early phase

of evaluating the risks and opportunit

ies assoc

iated with their

transit

ion to a low-carbon economy. We leverage a full su

ite of

Sustainable Finance solutions – includ

ing loans, bonds, trade

ﬁnance and carbon trading – to support their transit

ion.

These are underpinned by our Sustainable Finance frameworks

that outline how we apply the ‘green’, ‘sustainable’ or

‘transit

ion’ labels across products and transact

ions. We also

work with retail and wealth clients to mobil

ise d

iverse sources

of capital in support of social and environmental outcomes.

$87.2bn^

cumulative mobil

isat

ion of

Sustainable Finance from

January 2021 to September 2023

against our commitment to

mobil

ise $300 b

ill

ion by 2030

11 out of 12

of the NZBA high-emitt

ing

sectors covered by 2030

science-based ﬁnanced

emiss

ions targets

Aspirat

ion 2:

Operational

ise our

inter

im 2030 ﬁnanced

emiss

ions targets to

meet our 2050 net

zero ambit

ion

We aim to reach net zero in our ﬁnanced emiss

ions by 2050.

To date, the Group has set and disclosed science-based

inter

im 2030 ﬁnanced em

iss

ions targets for 11 h

igh-emitt

ing

sectors, in line with guidance from the Net-Zero Banking

Alliance (NZBA).

We are working across our businesses and functions, and

alongside our clients to deliver these targets, notwithstand

ing

the challenges presented by a material portion of our markets

not having a commitment to achieve net zero by 2050.

Leadership roles

in key global

partnerships and

iat

ives

includ

ing GFANZ, GISD, NZBA

as further detailed on page 96

Aspirat

ion 3:

Enhance and

deepen the

sustainab

ity

ecosystem

We are util

ing our experience and networks to actively

contribute in a leadership posit

ion to global partnersh

ips and

iat

ives that enhance the susta

inab

ity ecosystem.

These range from those that support the mobil

isat

ion and

scaling of sustainable ﬁnance, to furthering the development of

the voluntary carbon markets and fostering innovat

ive solut

ions

in the arena of conservation ﬁnance, through to supporting the

advancement of social topics underpinn

ing the UN Susta

inable

Development Goals (SDGs).

61%

of the Group’s employees

partic

ipated

in employee

volunteering activ

ies in our

communit

ies

in 2023

Aspirat

ion 4:

Drive social impact

with our clients and

communit

ies

We seek to partner with our clients and communit

ies to

mobil

ise soc

ial capital and drive economic inclus

ion as well

as entrepreneurship through our Futuremakers in

iat

ive.

Our Employee Volunteering programme encourages

employees to volunteer and organise activ

ies, such as

fundrais

ing, that al

ign to the Group’s community strategy

or respond to local issues.

Standard Chartered

– Annual Report 2023

Strategic report

Global Investors for

Sustainable Development

(GISD) Alliance

Glasgow Financ

ial

Alliance for Net Zero

(GFANZ)

Our Group Chairman co-chairs the United Nations’ GISD Alliance, which has set

ambit

ious objectives to scale up long-term ﬁnance and

investment in sustainable

development.

We are active partic

ipants of the GFANZ Pr

inc

ipals Group, an amb

ious

programme to generate the commitment, investment and alignment

needed to drive forward the transit

ion to net zero. Our Group CEO co-cha

irs

the GFANZ working group on Capital Mobil

isat

ion to Emerging Markets and

Developing Economies.

Net-Zero Banking

Alliance (NZBA)

Our Group Head of Conduct, Financ

ial Cr

ime and Compliance chairs the

NZBA – the industry-led, UN-convened and sector-specif

ic all

iance for banks

under GFANZ.

World Economic Forum’s

Alliance of CEO Climate

Leaders

Our Group CEO and CSO are part of the World Economic Forum’s Alliance of

CEO Climate Leaders. This is a CEO-led community committed to rais

ing bold

climate ambit

ion and accelerat

ing the net zero transit

ion by sett

ing science-

based targets, disclos

ing em

iss

ions and catalys

ing decarbonisat

ion and

partnerships across global value chains.

United Nations

Princ

iples for

Responsible Banking

(PRB) Adaptation

Finance working group

Our Head of Sustainable Finance Solutions co-chairs the PRB Adaptation

Finance working group, which developed a comprehensive framework and

practical guidance for banks to set credible adaptation ﬁnance targets.

Integrity Council for the

Voluntary Carbon Markets

(ICVCM)

Our Head of Carbon Markets Development serves on the board of the ICVCM,

which is focused on developing high-quality carbon markets. Our Group CEO

sits on the Dist

ingu

ished Advisory Group of the ICVCM, which is involved in the

development of carbon markets around the world.

Center for Climate-

Aligned Finance

(CCAF)

We formally joined CCAF, wh

ich was established by Rocky Mountain Institute,

in 2023. Standard Chartered partic

ipates

in CCAF working groups for the

Aviat

ion and Alum

ium

industr

ies. The Group

is a signatory to both the

Poseidon Princ

iples, a global framework for assess

ing and disclos

ing the

climate alignment of ﬁnanc

ial

inst

itut

ions’ shipp

ing portfol

ios and the

Sustainable STEEL Princ

iples, wh

ich helps banks to measure and disclose the

alignment of steel lending portfolios with 1.5 degree Celsius climate targets.

Ocean Risk and

Resil

ience Act

ion

Alliance (ORRAA)

In 2023, the Group became a member of ORRAA. Our Head of Nature serves

on the Ocean Investment Protocol Steering Committee convened by the UN

Global Compact Ocean Stewardship Coalit

ion.

Key in

iat

ives and partnersh

ips

Throughout 2023, senior leaders across Standard Chartered were involved in the leadership of

several collaborative in

iat

ives

includ

ing, but not l

ited to, those l

isted in the table below.

Standard Chartered

– Annual Report 2023

Strategic report

Sustainab

ity overview

Our four Sustainab

ity Strategic Pillars represent our near-term strategic focus. Each member of the Group Management Team

is responsible for strategically driv

ing cl

imate and sustainab

ity considerat

ions w

ith

in the

ir region, business segment or function

in line with the Group’s net zero roadmap. Selected sustainab

ity-related measures are incorporated into Long-Term Incentive

Plan (LTIP) awards granted to senior executives and the Group scorecard, which contains ﬁnanc

ial and strateg

ic measures and

is applicable for the major

ity of our employees.

Pillar 1: Scale Sustainable Finance income

We are build

ing a scalable Susta

inable Finance franchise, supporting our clients on their transit

ion journeys by develop

ing

customised solutions that speak to their needs and ambit

ions. Our Susta

inable Finance franchise generated over $720 mill

ion^

between January and December 2023 against our longer-term target of at least $1 bill

ion annual

income by 2025.

Sustainable Finance income

Product ($m)

2023

2022

YoY

Transaction Banking

188

135%

Trade & Working Capital

60%

Cash Management

360%

Financ

ial Markets

393

326

21%

Macro Trading

41%

Credit Markets

306

268

14%

Financ

ing & Secur

ies Serv

ices

175%

Lending & Portfolio Management

139

102

36%

720^

508

42%

Values noted with a caret symbol (^) are subject to independent lim

ited assurance by EY, report ava

ilable at

sc.com/sustainab

ityhub

Our posit

ion

in the market

As a UK-headquartered internat

ional bank, we work to deploy cap

ital across our global markets. As can be seen in our 2023

Sustainable Finance Impact Report, we have raised $8.4 bill

ion^ of susta

inable liab

ies

in developed markets, while 85 per cent

of our $17.6 bill

ion^ Susta

inable Finance asset base is located in Asia, Africa and the Middle East. We continued to expand and

develop our product suite as set out in our Green and Sustainable Finance Product Framework. In total, we had 42 product

variants across CCIB and CPBB segments, with selected products included in the table below.

For more informat

ion on the Group’s progress on

its Sustainable Finance commitments

see

pages 99 to 101

Transaction

Banking

Sustainable Trade Finance

Sustainable Current

and Savings Accounts

Sustainable Deposits

Sustainable Current and

Savings Accounts

Green Mortgages

Green Retroﬁt Loans

ESG Structured

Investments

Sustainable Investments

Green/Social/

Sustainab

ity Bonds

Sustainab

ity-linked Bonds

ESG Derivat

ives

Carbon Trading

Sustainable Repos

ESG Structured

Investments

Green and Social Loans

Sustainab

ity-linked Loans

ESG Advisory

Sustainable Deposits

CCIB

CPBB

Group

Treasury

Financ

ial Markets /

Lending & Portfolio

Management

Personal & Business

Banking

Wealth

Management

Standard

Chartered PLC

Sustainab

ity

Bonds

Sustainab

ity Strategic Pillars: our short-

term targets and immed

iate pr

ior

ies

Our Sustainable Finance Frameworks

•

Our Green and Sustainable Product Framework governs

all activ

ies we as an organisat

ion v

iew as ‘green’ or

‘social’. It is publicly available and was co-authored by

Morningstar Sustainalyt

ics.

•

Our Sustainab

ity Bond Framework provides the basis for

the issuance of Green, Social and Sustainab

ity bonds,

drawing on the activ

ies that we view as green or social.

•

Informed by the International Energy Agency (IEA) Net

Zero Emiss

ions by 2050 (NZE), we outl

ine the assets and

activ

ies that qualify for the ‘transit

ion’ label under our

Transit

ion F

inance Framework.

For more, see

page 123

or vis

sc.com/sustainab

ityhub

Standard Chartered

– Annual Report 2023

Strategic report

Environmental, social and climate

risk assessments are integrated into

credit decis

ion-mak

ing processes for

exist

ing and new-to-bank cl

ients

Portfolio-level emiss

ions are

calculated to set and monitor

ﬁnanced emiss

ions basel

ines and

sectoral 2030 targets

Products, ﬁnancing and

advisory services are deployed to

support clients transit

ion

ing their

businesses and seeking to achieve

their sustainab

ity goals

1. Client-level risk analysis

2. Portfolio steering

3. Sustainable and transit

ion

ﬁnance opportunit

ies

The CSO organisat

ion a

ims to act as a catalyst for change

and centre of excellence. We foster collaboration internally

to embed sustainab

ity across our business operations

and functions. We collaborate externally with clients and

other stakeholders who are aligned with our miss

ion to

drive change.

We aim to create a self-reinforc

ing cycle, wh

ich is built on

established processes, clear frameworks, engagement with

our clients and collaboration across risk and business teams.

We support our clients to deliver on their decarbonisat

ion

plans, deploying ﬁnanc

ing and adv

isory services to provide

capital alongside the next wave of sustainab

ity and

technological solutions, in which our clients are invest

ing.

Our transit

ion strategy also bu

ilds on the Group’s ﬁnanc

ing

experience by supporting the early adopters of these services

in the US and Europe and leveraging this knowledge in

our core markets across Asia, Africa and the Middle East.

Our aim is to work with our clients to support their transit

ion

and decarbonisat

ion journeys and where cl

ients evidence

transit

ion, help to accelerate progress.

Pillar 2: Further embed sustainab

ity across the organisat

ion

Refers to applicable banking clients, please refer to

sc.com/esriskframework

Read more about our list of Prohib

ited Act

ies at

sc.com/prohib

itedact

ies

Read more about our sectoral 2030 net zero targets in this Annual Report

on page 74.

In 2023, this commenced for Oil & Gas, Power, Steel, Alumin

ium and

Automotive Manufacturers sectors with the rest of the sectoral reviews

to be added from 2024.

Sustainable and

transit

ion ﬁnance

opportunit

ies

Client-level

risk analysis

Portfolio

steering

•

We mainta

in a su

ite of public

Posit

ion Statements that outl

ine

the Group’s environmental and

social expectations for provid

ing

ﬁnancial serv

ices to clients.

•

Relationsh

ip Managers carry out

client and/or transaction level

Environmental and Social Risk

Assessments before we provide

ﬁnancial serv

ices.

•

Through client-level Climate Risk

Assessments (CRAs), we assess

the potential ﬁnanc

ial r

isks from

climate change using quantitat

ive

and qualitat

ive

informat

ion and

assign a Climate Risk grading.

•

As part of the CRA process, a

Credible Transit

ion Plan (CTP)

score is assigned for each client

in high-emitt

ing sectors.

•

Our Prohib

ited Act

ies list

details the activ

ies that we will

not ﬁnance.

• Client-level emiss

ion

intens

ies

are modelled in accordance with

internat

ionally accepted carbon

accounting princ

iples us

ing the

Partnership for Carbon Accounting

Financ

ials (PCAF) methodology.

• Science-based sectoral inter

2030 targets are set for high-

emitt

ing sectors

in line with the

Group’s roadmap towards net zero

ﬁnanced emiss

ions by 2050.

•

Industry or client coverage leads

are appointed as responsible

owners of sectoral net zero targets.

•

Divergence from the portfolio-level

emiss

ion pathway

is monitored

and reviewed quarterly along with

our exposure to clients associated

with high Climate Risk.

•

The Group’s ESG and Transit

ion

Finance advisory teams prior

ise

engagements with clients

associated with high Climate Risk

with weak or no transit

ion plans

and/or insuff

ient disclosures to

recommend enhancements.

• Sustainab

ity considerat

ions are

incorporated into account plans

and engagement strategies with

an aim to ident

ify and pr

ior

ise

clients that are divergent from

portfolio-level emiss

ion pathways

or associated with high

Environmental and Social Risk.

•

We endeavour to support and

guide our clients to a low-carbon

pathway by util

ing our full suite

of Sustainable Finance solutions.

•

We continue to increase our

ﬁnancing of low-carbon

technologies and infrastructure,

includ

ing project ﬁnancing

in the

developing world where power

grid modernisat

ion

is crit

ical.

Standard Chartered

– Annual Report 2023

Our net zero roadmap

We aim to reach net zero carbon emiss

ions

in our ﬁnanc

ing act

ity by 2050 and

in our own

operations by 2025. We made progress in setting inter

im 2030 targets for the most

carbon-intens

ive and h

ighest-emitt

ing sectors

in the Group’s portfolio.

To help us remain on track, we have set short- and medium-term object

ives and quant

iable targets

to manage and report on our progress on an annual basis.

2021

Launched our roadmap to net zero

by 2050, includ

ing

inter

im targets and

a supporting methodology

Announced plans to mobil

ise

$300 bill

ion

in Sustainable Finance by 2030

Published our inaugural Transit

ion F

inance Framework

205

Aim to become net zero in our ﬁnanced emiss

ions

2022

•

Developed ﬁnanced emiss

ions basel

ines and

inter

im 2030 targets for the Av

iat

ion, Sh

ipp

ing

and Automotive Manufacturers sectors

•

Joined Partnership for Carbon Accounting

Financ

ials (PCAF)

2024

•

We will develop an inter

im 2030 ﬁnanced em

iss

ions

target for the Agriculture sector, planned to be

communicated in our 2024 Annual Report, which will

be published in Q1 2025

•

Aim to set targets for facil

itated em

iss

ions

•

Strategic report

Sustainab

ity overview

2025

•

Aim to be net zero in our own operations

•

2023

Announced our enhanced Oil and Gas absolute

ﬁnanced emiss

ions target

Updated our Power and Steel sector baselines and

targets moving from a revenue-based intens

ity metr

ic to

a production-based intens

ity metr

Developed ﬁnanced emiss

ions basel

ines and set inter

2030 targets for four addit

ional sectors: Cement,

Alumin

ium, Res

ident

ial Mortgages, Commerc

ial Real

Estate, bring

ing the total number of sc

ience-based

targets set for high-emitt

ing sectors to eleven

Financed emiss

ions basel

ines and sectoral progress

against targets, where ind

icated, assured for the ﬁrst

time by Ernst & Young

Calculated the Group’s facil

itated em

iss

ions basel

ine

from debt capital markets following the ﬁnal PCAF

guidance (published in December 2023) under both the

33 per cent and 100 per cent weight

ing factors

Updated the Group’s net zero methodological

white paper, ﬁrst published in 2021

2032

•

Targeted end date for legacy direct Thermal

Coal Min

ing ﬁnancing globally

203

We will have substantially reduced our

exposure to the Thermal Coal Min

ing sector

line with our Posit

ion Statements

Aim to meet the Group’s ﬁnanced emiss

ions

inter

im targets set for h

igh-emitt

ing sectors

•

Standard Chartered

– Annual Report 2023

Strategic report

We aim to reach net zero emiss

ions

in our ﬁnanced emiss

ions by

2050 and in our own operations by 2025. Since 2018 we have been

working on align

ing our d

irect and ind

irect em

iss

ions to the Par

Agreement’s goal of well below two degrees Celsius of global

warming by the end of the century. We focus on three areas

to reduce emiss

ions: our operat

ions, our supply chain and

ﬁnanced emiss

ions assoc

iated with our clients. The major

ity

of our GHG emiss

ions are l

inked to our lending activ

ies, known

as ﬁnanced emiss

ions. Therefore, we have pr

ior

ised our

measurement and decarbonisat

ion efforts

in the highest-emitt

ing

and most carbon-intens

ive sectors of our portfol

io, and where

working with our clients can have the greatest impact. Due to

our footprint – with many emerging markets reliant on carbon-

intens

ive

industr

ies – our ﬁnanced em

iss

ions may

increase

before they decrease but our approach is to remain aligned

to a science-based 1.5 degrees Celsius pathway by 2050.

Pillar 3: Deliver on the annual milestones set forth in our net zero roadmap

Financed emiss

ions

A brief summary of the movements in the 11 high-emitt

ing sectors

as follows:

Alumin

ium

sector emiss

ions have trended down as the power

supply into the smelters has become less carbon-intens

ive and the

Group has funded clients with less emiss

ion

intens

ive operat

ions.

The physical intens

ity of the

Automotive manufacturers’

sector

(CO

per km distance travelled) decreased slightly due to the

Group having a larger exposure to zero tailp

ipe Electr

ic Vehicle

manufacturing with

in the Group’s Automot

ive Manufacturers

portfolio.

The physical intens

ity of the

Cement

sector has remained relatively

consistent year-on-year. This will be a hard-to-abate sector in the

medium-term until lower carbon energy sources are util

ised,

especially in emerging markets where we are actively engaging

with our clients on their decarbonisat

ion plans and strateg

ies.

In the

Commercial Real Estate

portfolio, build

ing

intens

ies have

fallen due to investment in regions with lower emiss

ions power

supplies and certain markets’ power suppliers decarbonis

ing.

We continue to work with technology providers on solutions for

ind

idual build

ing em

iss

ions measurement and management.

Absolute

Oil and Gas

emiss

ions rema

ined relatively stable

year-on-year and are sign

iﬁcantly lower versus the basel

ine year.

We continued to pursue overall portfolio decarbonisat

ion, p

ivot

ing

exposure to counterparties and technologies that are less

carbon-intens

ive.

The

Power

sector’s intens

ity decreased as some of our contractual

obligat

ions to coal-ﬁred power plants ended. We also act

ively

pursued lower emiss

ions technolog

ies, includ

ing new gas power

plants, and expanded our renewables ﬁnancing.

The emiss

ions

intens

ity of the

Resident

ial Mortgage

portfolio has

remained consistent year-on-year and will decrease over time in

line with electric

ity gr

id decarbonisat

ion.

The

Shipp

ing

sector’s alignment delta has worsened due to the

impact from the container sector, which enjoyed very strong proﬁts

in 2022, encouraging owners to sail faster, leading to higher

emiss

ions. Look

ing ahead, tighten

ing env

ironmental regulations

and mechanisms from both the International Marit

ime

Organizat

ion (IMO) and European Un

ion (EU) are expected to

lead to better alignment between shipowners’ behaviours and

the Group’s 2030 targets.

The

Steel

sector is hard-to-abate and requires sign

iﬁcant cap

ital

to decarbonise. Decarbonisat

ion

is reliant on the shift from

blast to electric arc furnaces and many of our emerging markets

are at early stages of their transit

ion journeys. Wh

ile the emiss

ions

intens

ity of our steel portfol

io remained relatively unchanged

year-on-year, we are actively working with our clients in this sector

to support their transit

ion.

Our

Thermal Coal Min

ing

exposure is decreasing in line with our

coal revenue thresholds as detailed in our Posit

ion Statements

and related contractual commitments. No new Thermal Coal

Min

ing use of proceeds loans have been prov

ided in line with our

Posit

ion Statements.

The Group completed the sale of its global

Aviat

ion

ﬁnance

leasing business and the major

ity of

its aviat

ion lend

ing book in

August 2023. Noting the distort

ive effects that the sale of th

business would create in our emiss

ions proﬁle, the progress

against this target has been paused for year-end 2023. This will

be re-assessed based on the size and material

ity of the rema

ing

portfolio in 2024.

High-emitt

ing and carbon-

intens

ive sectors w

ith inter

im 2030 targets

Included in analysis

2021

2022

2023

2024

Thermal

Coal Min

ing

Agriculture

Commercial

Real Estate

Resident

ial

Mortgages

Alumin

ium

Cement

Steel

Oil and Gas

Power

Automotive

Manufacturers

Shipp

ing

Aviat

ion

2030 ﬁnanced

emiss

ions targets

Standard Chartered

– Annual Report 2023

Strategic report

Sustainab

ity overview

Sector

Emiss

ions

approach

Scient

iﬁc

reference

scenario

2030

2022

2021

Cumulative

% change

from

baseline

2030 Target

reduction

% from

baseline

Absolute

emiss

ions

(MtCO

Production/

Physical intens

ity

Absolute

emiss

ions

(MtCO

Production/

Physical intens

ity

CCIB

Alumin

ium

Production

intens

ity

MPP

6.1 tCO

e/t

Alumin

ium

Mainta

–

4.59^ tCO

e/t

Alumin

ium

–

5.62^ tCO

e/t

Alumin

ium

-18%

Automotive

Manufacturers

Physical

intens

ity

IEA APS/

NZE

66–100

gCO

/V.km

44–63%

–

165^

gCO

/V.km

–

178^

gCO

/V.km

-7%

Cement

Production

intens

ity

IEA NZE

0.52

tCO

Cement

22%

–

0.66^

tCO

/t Cement

–

0.67^ tCO

Cement

-1%

Commercial

Real Estate

Physical

intens

ity

IEA APS/

NZE

19–39

kgCO

e/sq.m

47–74%

–

62^

kgCO

e/sq.m

–

73^

kgCO

e/sq.m

-15%

Oil and Gas

Absolute

emiss

ions

IEA NZE

9.3 MtCO

29%

10.3^

–

10.2^

–

-21%

Power

Production

intens

ity

IEA APS/

NZE

0.17–0.28

tCO

/MWh

46–67%

–

0.47^

tCO

/MWh

–

0.52^ tCO

/MWh

-10%

Shipp

ing

Physical

intens

ity

IMO 2023

0% delta

–

+6.4%^ delta

+11.8%^ delta

+16%^ delta

–

+2.6%^ delta

+7.3%^ delta

+10%^ delta

+4.5%

Steel

Production

intens

ity

MPP

1.4–1.6 tCO

Steel

22–32%

–

1.97^

tCO

/t Steel

–

2.06^

tCO

/t Steel

-4%

Thermal

Coal Min

ing

Absolute

emiss

ions

IEA NZE

0.5 MtCO

85%

1.6^

–

2.3^

–

-52%

CPBB

Resident

ial

Mortgages

Physical

intens

ity

CRREM

29–32

kgCO

e/Sq.m

15–32%

–

37.7^

kgCO

e/Sq.m

–

37.6^

kgCO

e/Sq.m

Values noted with a caret symbol (^) are subject to independent lim

ited assurance by EY, report ava

ilable at

sc.com/sustainab

ityhub

For further detailed informat

ion on sectoral ﬁnanced em

iss

ions and progress aga

inst targets, refer to pages 110-111.

Due to third-party data sets that feed into our calculations, the Group’s reported ﬁnanced emiss

ions ﬁgures have a one-year lag. The Group reports on 2022

and 2021 data in this 2023 Annual Report.

Setting science-based targets

The Group set inter

im 2030 ﬁnanced em

iss

ions targets for

11 of the 12 high-emitt

ing sectors w

ith Agriculture being the

planned for 2024.

We follow the Net-Zero Banking Alliance (NZBA) guidance

on sectors for target-setting, further expanding the

Transport sector into Automotive Manufacturers, Aviat

ion

and Shipp

ing.

We set four sectoral targets and updated three targets in

2023. All targets have been informed by what the Group

considers pre-eminent scient

iﬁc forward-look

ing scenario

providers. This includes the International Energy Agency

(IEA) for energy sectors, the Miss

ion Poss

ible Partnership

(MPP) for metals, International Marit

ime Organ

izat

ion

(IMO) for shipp

ing and Carbon R

isk Real Estate Monitor

(CRREM) for the resident

ial real estate sector.

For our Scope 3 ﬁnanced emiss

ions, we set sc

ience-based

targets accounting for differ

ing states of trans

ion

readiness across our markets. Due to our footprint – with

many emerging markets reliant on carbon-intens

ive

industr

ies – our ﬁnanced em

iss

ions may

increase before

they decrease. The upper end of our 2030 target may

represent low-overshoot scenarios. However, our approach

is to remain aligned to a science-based 1.5 degrees Celsius

scient

iﬁc pathway by 2050. G

iven our science-based

approach, we will strive to update our targets both as the

scient

iﬁc commun

ity updates their reference scenarios and

as data availab

ity improves.

In 2023, the Group:

•

Strengthened our Oil and Gas emiss

ions metr

ic from

a revenue-based intens

ity to an absolute ﬁnanced

emiss

ions target and trajectory. Th

is places an emiss

ions

budget on the sector and requires a reduction of 29 per

cent by 2030 when calculated from a 2020 baseline,

aligned with the IEA’s NZE trajectory. Our approach

ensures we mainta

in a d

irect link to absolute GHG

emiss

ions

in the Oil and Gas sector and allows us to

directly assess our progress with the IEA NZE scenario

that we have set our target against. By moving away

from a revenue-based intens

ity metr

ic, we remove an

element of ﬁnancial volat

ity and complex

ity from

our calculations that could restrict transparency and

accountabil

ity

in measuring and disclos

ing our ﬁnanced

GHG emiss

ions. O

il and Gas is the second sector for which

the Group set an absolute ﬁnanced emiss

ion target,

in addit

ion to our target for Thermal Coal M

ing.

•

Updated our Power and Steel sector targets from a

revenue-based intens

ity metr

ic to a production-based

intens

ity metr

ic (i.e., emiss

ions

intens

ity per un

it of

production). The progression from an economic-based

intens

ity to a product

ion/physical-based intens

ity reduces

the ﬁnancial volat

ity

in the calculation and improves the

connection to clients’ actual GHG emiss

ions by l

ink

ing

directly to units of production, or a physical activ

ity.

We published the second edit

ion of the Group’s ‘Net zero

methodological white paper – The journey continues’, which

sets out the methodology, assumptions and scient

iﬁc

pathways for each high-emitt

ing sector and

is available

via

sc.com/sustainab

ityhub

Standard Chartered

– Annual Report 2023

Strategic report

Announced in 2023, the four thematic innovat

ion hubs – Adaptat

ion Finance, Blended Finance, Carbon Markets and

Nature Posit

ive Solut

ions – focus on emerging sustainab

ity themes that are nascent but ripe for scale, aligned to

areas where the Group has a core competency, and are particularly suited to clients in our footprint markets.

Each hub is transversal, run by senior leaders in the CSO organisat

ion, and a

ims to ident

ify opportun

ies for future

returns outside of our core range of tradit

ional products and serv

ices. By being deliberate in demonstrating leadership

to advance the ecosystem in these emerging thematic areas, the Group will be well-posit

ioned to take advantage of

the sign

iﬁcant and d

ifferent

iated revenue potent

ial that will result from maturation of these themes in the future.

Pillar 4: Leverage our innovat

ion hubs

1. Adaptation Finance

There is an urgent global need to unlock and scale public

and private climate adaptation ﬁnance to build shared

societal resil

ience, espec

ially across our footprint markets,

where adaptation represents both a risk and an opportunity

for clients and communit

ies.

Acknowledging our geographical footprint and the

multipl

ier effect of

investment in adaptation – where every

dollar spent on adaptation this decade could generate up to

$12 of economic beneﬁt – it is our ambit

ion to act dec

ively

and mobil

ise others on adaptat

ion.

In 2023, we closed the Group’s ﬁrst Adaptation Finance

transaction – an adaptation letter of credit with a

parametric insurance provider for the renewable

energy sector.

We also collaborated with KPMG and the United Nations

Ofﬁce for Disaster Risk Reduction (UNDRR) to develop the

market’s ﬁrst Guide to Adaptation and Resil

ience F

inance

(GARF), which was announced at COP28 and is due to be

published in early 2024.

For more see our Adaptation Economy report via

sc.com/adaptation-economy

page 118

2. Blended Finance

The Independent High-Level Expert Group on Climate

Finance estimate that by 2030 there will be a $2.5–3 trill

ion

per year ﬁnancing gap between current basel

ines and what

is required to deliver the UN Sustainable Development Goals

(SDGs) in emerging markets and developing countries other

than China. Blended ﬁnance – using concessional public

funds to mobil

ise much larger volumes of pr

ivate capital

– can help to close this gap. We work to bring together

public and private expertise across the Group to help

commercial

ise blended ﬁnance.

In 2023, we worked through internat

ional fora and

industry

groups (e.g., GFANZ) to leverage the Group’s expertise

and support – alongside other internat

ional banks –

blended ﬁnance projects and programmes, includ

ing the

development of frameworks for early coal retirement, and

hosted both the Vietnamese and Indonesian governments

as they launched their Just Energy Transit

ion Partnersh

(JETP) events at COP28.

For more on Blended Finance see

page 118

3. Carbon Markets

A high-integr

ity carbon market, comb

ined with corporate

commitments to cut emiss

ions and h

igh standards of

reporting can accelerate the global progress towards net

zero by 2050.

The use of high-quality carbon credits can play a part in a

multi-faceted and urgent approach to decarbonisat

ion, as

it enables climate action in sectors and geographies that

remain severely underfunded today.

Carbon credits can be complementary to a credible

corporate net zero transit

ion plan and help br

idge the gap

between the emiss

ions reduct

ions that can be implemented

now, and the longer lead time for technological solutions

that are yet to scale.

Standard Chartered has been at the forefront of several

iat

ives that are work

ing to ensure that high-integr

ity,

scalable carbon markets develop. We offer trading, advisory,

ﬁnancing and r

isk management services to our clients

around the world.

In 2023, we were involved in some of the largest carbon

market transactions, includ

ing the Reg

ional Voluntary

Carbon Market Company (RVCMC) and Climate Impact X

(CIX) auctions, and established primary supply partnerships

with clients in Kenya, Brazil, China and Vietnam.

For more on Carbon Markets see

page 119

4. Nature Posit

ive Solut

ions

It is estimated that over half of global GDP is moderately

or highly dependent upon nature. Despite its importance,

biod

ivers

ity is rapidly declin

ing. Hav

ing applied internat

ional

environmental and social standards in our ﬁnanc

ing for more

than 20 years, our presence in markets with some of the

richest biod

ivers

ity in the world posit

ions us to engage w

ith

a range of stakeholders. We are guided by our commercial

ambit

ion to

increas

ingly sh

ift ﬁnanc

ial ﬂows toward nature-

posit

ive outcomes and thereby contr

ibute to the halting and

reversing of biod

ivers

ity loss.

Nature is also a crit

ical lever for cl

imate change mit

igat

ion

and adaptation and the hub collaborates with the Carbon

Markets and Adaptation Finance hubs to explore natural

climate solutions and ecosystem-based adaptation

opportunit

ies.

In 2023, we conducted an in

ial impact and dependency

assessment to ident

ify our exposure to potent

ially material

sectors in our CCIB segment. In January 2024, we jo

ined a

cohort of early adopters of the Taskforce on Nature-related

Financ

ial D

isclosures (TNFD) framework, preparing to

publish our ﬁrst TNFD-aligned disclosures in early 2026.

For more on Nature Posit

ive Solut

ions see

page 119

Standard Chartered

– Annual Report 2023

Strategic report

Sustainab

ity overview

The Group is exposed to Climate Risk through our clients, our own operations,

our suppliers and from the industr

ies and markets we operate

in.

The Group’s Board is responsible for the long-term success of

the Group and its supporting committees consider climate-

and sustainab

ity-related risks and opportunit

ies when

review

ing and gu

ing strateg

ic decis

ions. Board-level

oversight is exercised through the Board Risk Committee

(BRC), and regular Climate Risk updates are provided to the

Board and BRC. At an executive level, the Group Risk

Committee has appointed the Climate Risk Management

Committee (CRMC), consist

ing of sen

ior representatives

from business, risk, and other functions such as audit, which

oversees the implementat

ion of our Cl

imate Risk workplan

and progress made by the Group in meeting regulatory

requirements. The CRMC meets at least six times a year to

monitor the Group’s Climate Risk proﬁle, review, challenge and

provide input on climate-related disclosures and stress tests

and provide oversight on the development and results of

climate models. We have also strengthened country and

regional governance oversight for the Climate Risk proﬁle

across our key markets in 2023 by cascading relevant Risk

Appetite metrics, supported by management informat

ion.

For more informat

ion on the Group’s governance approach for

climate-related risks and opportunit

ies

see

pages 120 to 123

Our Climate Risk Appetite Statement is approved annually by

the Board and supported by Board and Group Management

Team (MT) metrics across impacted risk types. The metrics

are approved by the Group Risk Committee (for MT-level

metrics) and the Board (for Board-level metrics) annually

and any breaches are reported to the Group Risk Committee

and the Board Risk Committee.

Group Climate Risk Appetite Statement

“The Group aims to measure and manage

ﬁnancial and non-ﬁnancial r

isks aris

ing

from climate change, and reduce the

emiss

ions related to our own act

ies and

those related to the ﬁnancing of cl

ients in

alignment with the Paris Agreement.”

We are continuously expanding the scope and coverage of our risk appetite metrics for enhanced risk ident

iﬁcation and

management. As such, new metrics such as divergence from the Group’s inter

im 2030 targets across key sectors and a stress

loan impa

irment metr

ic built on short-term scenario outcomes will be monitored in 2024.

Climate Risk taxonomy

Descript

ion

Climate Risk

The potential for ﬁnanc

ial loss and non-ﬁnancial detr

iments aris

ing from cl

imate

change and society’s response to it.

Sub-Risk Types

Physical Risk

Risks aris

ing from

increas

ing sever

ity and frequency of climate- and weather-related events, which

can damage property and other infrastructure, disrupt supply chains, and impact food production.

It may also reduce asset valuations, leading to lower proﬁtab

ity for companies. Indirect effects on the

macroeconomic environment, such as lower output and productiv

ity, may exacerbate these d

irect impacts.

Acute

Specif

ic event-dr

iven weather events, includ

ing

increased severity of extreme weather events,

such as cyclones, hurricanes, ﬂoods, or wildf

ires.

Chronic

Longer-term shifts in climate patterns, such as changing precip

itat

ion patterns, sea-level rise,

and longer-term drought.

Transit

ion R

isk

Risk aris

ing from the adjustment towards a carbon-neutral economy, wh

ich will require sign

iﬁcant

structural changes to the economy. These changes will 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, this entails credit losses for lenders and market losses for investors.

Risk type

Metrics reported

Credit Risk –

CPBB

Concentration of retail mortgage exposure with loan-to-value exceeding 80 per cent and with high

gross physical ﬂood risk across seven of the Group’s key markets.

Credit Risk –

CCIB

Exposure concentration to clients with high transit

ion r

isk and low transit

ion read

iness.

Traded Risk

Climate scenarios incorporated with

in Traded R

isk stress scenarios inventory.

Country Risk

Concentration of Gross Country Risk exposure to countries exposed to extreme transit

ion and phys

ical risks.

Enterprise-wide

Sectors that are divergent from the Group’s inter

im 2030 targets, start

ing with Power, Oil and Gas, Automotive

Manufacturing and Steel sectors.

Managing Climate Risk

Standard Chartered

– Annual Report 2023

Strategic report

Our approach

We manage Climate Risk according to the characterist

ics of the

impacted risk types and are embedding Climate Risk

considerat

ions

into relevant frameworks and processes. Risk Framework Owners for the relevant Princ

ipal R

isk Types are

responsible for embedding such requirements with

in the

ir Risk Type Frameworks, polic

ies, standards, as well as r

isk appetite

statements and metrics as appropriate and ensuring compliance to the min

imum requ

irements deﬁned by the Climate Risk

Policy. In 2023, we have continued to build on embedding Climate Risk into exist

ing r

isk-management processes, focusing on

a ‘Business as Usual’ state to ident

ify

ing, assessing, and monitor

ing across r

isk types.

Risk type

Descript

ion

Credit Risk –

CCIB

We assess Climate Risk vulnerabil

ies and readiness levels for ~85–90 per cent of the CCIB corporate

portfolio for subsequent considerat

ion w

ith

in our cred

it decis

ion

ing process. Linkages to Credit

Underwrit

ing Pr

inc

iples have been ﬁnalised for four sectors (O

il and Gas, Shipp

ing, Commerc

ial Real Estate,

and Min

ing

includ

ing Steel and Alum

ium),

includ

ing

improved climate-related analysis, portfolio-level

caps and addit

ional data gather

ing measures. A key focus area in 2024 and beyond remains to further

embed Climate Risk and net zero targets into business and credit decis

ions.

Credit Risk –

CPBB

As of September 2023, we assessed physical risk for 79 per cent and transit

ion r

isk for 54 per cent of our

CPBB portfolios. During 2023, the physical risk proﬁle across products and markets has remained stable,

with slight variat

ions

in exposure to high ﬂood risk due to enhancements in Munich Re’s ﬂood risk model. For

key markets of the Group’s resident

ial mortgage portfol

io such as Korea and Taiwan, where homeowners’

insurance coverage does not cover damages from acute physical risk, we have established zoning polic

ies

and corresponding risk mit

igat

ion and trigger monitor

ing. Our analys

is of the impact from transit

ion r

isk

on our resident

ial mortgage portfol

io, estimated by quantify

ing the robustness of borrowers’ repayment

capabil

ity across our key res

ident

ial mortgage markets, shows that trans

ion r

isk levels appear to be low.

Operational

and Technology Risk

The focus for Operational and Technology Risk has been to assess physical risks for our properties and data

centres, as well as third parties.

Country Risk

Our assessment of Physical and Transit

ion R

isk Sovereign Rankings serves as an input into the annual

sovereign reviews and quarterly early warning ind

icators. Country l

it benchmark computat

ions also

consider climate factors.

Traded Risk

We continue to assess the market impacts from Climate Risk, includ

ing an assessment of trans

ion effects

from climate change polic

ies and two phys

ical risk scenarios as part of the global Traded Risk scenarios

inventory. These ﬂow into exist

ing Traded R

isk Board-level Risk Appetite (RA) metrics.

Treasury Risk

Concentration of top CCIB corporate liab

ity providers associated with high transit

ion r

isk and low levels of

mit

igat

ion are being monitored, leveraging our client-level Climate Risk Assessments.

Reputational and

Sustainab

ity Risk

Climate Risk Assessments are considered as part of Reputational and Sustainab

ity reviews for clients and

transactions in high-emitt

ing sectors.

Model Risk

Work is also underway to build in-house ﬁrst generation transit

ion r

isk models for our Corporates and

Sovereigns portfolios which have been used to estimate climate adjusted Expected Credit Loss and stress

testing use cases. These models will continue to be evolved over 2024 to further help our risk assessment

and portfolio management capabil

ies.

For more informat

ion on how the Group embeds Cl

imate Risk considerat

ions w

ith

in the bus

iness and across Princ

ipal R

isk Types

see

pages 127-129

Standard Chartered

– Annual Report 2023

Strategic report

Sustainab

ity overview

Scenario analysis

In 2023, sign

iﬁcant progress was made to enhance our cl

imate

scenario design and analysis capabil

ies. We assessed the

resil

ience of 95 per cent of CCIB Exposure at Default across

three external scenarios based on Version 3 of the Network for

Greening the Financ

ial System (NGFS). These were Net Zero

2050, Delayed Transit

ion and Current Pol

ies and three

internal scenarios. The internal scenarios include a Base Case

linked to current sovereign commitments to meet their net

zero targets, and two short term ‘tail risk scenarios’ to assess

Transit

ion R

isk from a green trade war and Physical Risk from

population migrat

ion l

inked to climate change. The tail

scenarios also include second order impacts such as food

price inﬂat

ion and d

isplacement leading to decreased

productiv

ity. The sever

ity of the scenarios is aligned to the

annual cyclical scenario and driven by GDP shocks in our

key markets.

Across the NGFS scenarios, the impact on incremental

Expected Credit Loss (ECL) as of 2050 for the overall CCIB

portfolio is highest in the Net Zero 2050 scenario, followed by

Delayed Transit

ion and Current Pol

ies, pr

imar

ily dr

iven by

impact on our corporate clients. Sectors such as Oil and Gas,

Construction, Transportation and Util

ies are most impacted,

primar

ily due to the r

ise in carbon prices in the scenarios and

to some extent, by the consequent macroeconomic changes.

For internal scenarios, the impacts of GDP and second order

risks in the short-term impacts corporate clients across

Transportation, Automobiles, Construction, and Commercial

Real Estate sectors. The highest impact in the short-term

(2030) is seen in the tail transit

ion r

isk scenario.

Results from the scenario analysis are consistent with the

hot spots ident

iﬁed w

ith our net zero strategy across high-

emitt

ing sectors. At a cl

ient level, outputs from scenario

analysis inform our Climate Risk Assessments, while at a

portfolio level we have put in place Risk Appetite metrics to

measure stressed losses under the Base Case and Net Zero

2050 scenarios.

Key lim

itat

ions include: (i) benign impact from physical risk

due to nascent methodologies for transforming the level of

physical risk into business disrupt

ion, wh

ich is compounded by

lack of client-level asset locations; (i

i) assum

ing static balance

sheets; and (i

i) client business models remain

ing unchanged.

It’s also pertinent to note that while the results do not factor

in the potential impact from management actions from our

net zero strategy, outputs were reviewed by an expert panel

compris

ing ﬁrst l

ine and second line representatives, followed

by a discuss

ion at the Cl

imate Risk Management Committee

and subsequent update to the Board Risk Committee.

For more informat

ion on the Group’s approach to scenar

io analysis,

please refer to

pages 309 to 313

Qualitat

ive rev

iew of climate risks and opportunit

ies

annual business strategy and ﬁnanc

ial plann

ing

In 2023, 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 roadmap.

We use both qualitat

ive and quant

itat

ive aspects focus

ing

on revenue reliance from clients in high-emitt

ing sectors

and/or locations in regions most exposed to physical risk,

consider

ing adequacy of m

igat

ion plans. The results are

then independently reviewed by regional and client-segment

Chief Risk Ofﬁcers (CROs) and the ESG and Reputational 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 2024

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

starting to work with our clients in high-emitt

ing sectors by

prior

ing susta

inable ﬁnance products to decarbonise their

business models and help enable their transit

ion journeys.

We also continue to proactively work with clients in sectors

with lower carbon intens

ity and em

iss

ions such as clean

technology to support the growth of these industr

ies. Our

Sustainable and Transit

ion F

inance product suite and our

dedicated Sustainable Finance, Transit

ion Accelerat

ion and

ESG Advisory teams, are a robust response to transit

ion r

isks

in the short term, strengthening our resil

ience towards a

two degrees Celsius or lower transit

ion scenar

io. However,

longer-term transit

ion r

isks were highl

ighted, part

icularly for

the Africa and Middle East region, given its dependency on

fossil fuels; and longer-term physical risks were deemed to be

most relevant for the Asia region.

Regulatory landscape

Key ﬁnancial regulators across our footpr

int have proposed or

set supervisory expectations on climate and environmental

risk management. Those expectations are broadly aligned

with the Basel Committee princ

iples for the management of

climate-related ﬁnanc

ial r

isks, but local implementat

ions vary.

We have been and are actively engaging with industry bodies

and regulators to drive consistency in policymak

ing across our

markets. A process has been established for tracking various

Climate Risk-related regulatory developments and obligat

ions

set by both ﬁnancial and non-ﬁnancial serv

ice regulators

at Group, regional and country level, with roles and

responsib

ies set out

in the Group’s Climate Risk Policy.

Regulatory requirements or enhancements are recorded

through workplans across various country and regional teams.

Standard Chartered

– Annual Report 2023

Strategic report

Non-ﬁnancial and susta

inab

ity informat

ion statement

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 via

sc.com/sustainab

ityhub

See the Sustainab

ity Review section from

pages 92 to 133

for further informat

ion and deta

ils

Taskforce on Climate-related Financ

ial D

isclosures (TCFD)

In line with our ‘comply or explain’ obligat

ion under the UK’s F

inanc

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.

Our TCFD disclosures also meet the new climate-related ﬁnanc

ial d

isclosure requirements contained in section 414CB of the

Companies Act 2006. We have also taken into account the implementat

ion gu

idance included in the TCFD 2021 Annex.

Section

TCFD recommendation

Page

Governance

The Board's oversight of climate-related risks and opportunit

ies

120

Management’s role in assessing and managing climate-related risks and opportunit

ies

120

Strategy

Climate-related risks and opportunit

ies the Group has

ident

iﬁed over the short, med

ium and long term

309

Impact of climate-related risks and opportunit

ies on the Group’s bus

inesses,

strategy and ﬁnancial plann

ing

Resil

ience of the Group’s strategy, tak

ing into considerat

ion d

ifferent climate-related scenarios,

includ

ing a two degrees Cels

ius or lower scenario

309

Risk

Management

Our processes for ident

ify

ing and assessing climate-related risks

298

Our processes for managing climate-related risks

298

How the Group’s processes for ident

ify

ing, assessing and managing climate-related

risks are integrated into the Group’s overall risk management

127

Metrics

and Targets

The metrics used by the Group to assess climate-related risks and opportunit

ies

in line with our strategy

and risk management processes

Disclosures on Scope 1, Scope 2 and Scope 3 greenhouse gas emiss

ions and related r

isks

105

The targets used by the Group to manage climate-related risks and opportunit

ies and our

performance against targets

For a more detailed TCFD Summary and Alignment Index referencing relevant disclosures see

pages 511 to 516

Reporting requirement

Where to ﬁnd more informat

ion

in this report about our polic

ies

and impact includ

ing r

isks, due dil

igence processes and outcomes

Page

Descript

ion of

business model

Business model

Our strategy

Princ

ipal R

isks

and uncertaint

ies

Risk overview

230

Risk review and Capital review

230

Environmental

matters

Our operations

106

Our suppliers

107

Our clients – Reducing our ﬁnanced emiss

ions

108

Employees

Employee polic

ies and engagement

222

Health, safety and wellbeing

224

Human rights

Suppliers

Respecting human rights

133

Social matters

Society

Drive social impact through our clients and communit

ies

Anti-corruption

and bribery

Code of conduct and ethics

130

Fight

ing ﬁnancial cr

ime

131

Polit

ical donat

ions

218

Non-ﬁnancial

KPIs

Supplementary people informat

ion

498

Supplementary sustainab

ity informat

ion

504

2023 Sustainab

ity Aspirat

ions

508

Standard Chartered

– Annual Report 2023

Strategic report

Underlying versus reported results

Reconcil

iat

ions between underlying and reported results are set out in the tables below:

Operating income by client segment

2023

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

11,218

7,106

156

(1,102)

17,378

Restructuring

291

–

362

DVA

–

Other items²

262

–

262

Reported operating income

11,788

7,151

156

(1,076)

18,019

2022¹

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

9,608

5,969

156

15,762

Restructuring

436

–

494

DVA

–

Other items

–

Reported operating income

10,086

6,016

187

16,318

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

Other items includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

relation to a sale of a portfolio of Aviat

ion loans

Operating income by region

2023

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

(region)

$mill

ion

Total

$mill

ion

Underlying operating income

12,429

2,806

1,397

746

17,378

Restructuring

203

110

362

DVA

(16)

–

Other items²

(18)

263

(18)

262

Reported operating income

12,651

2,924

1,702

742

18,019

2022

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

(region)

$mill

ion

Total

$mill

ion

Underlying operating income

10,912

2,460

2,303

15,762

Restructuring

304

140

494

DVA

–

Other items

–

Reported operating income

11,256

2,608

2,352

102

16,318

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

Other items includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

relation to a sale of a portfolio of Aviat

ion loans

Underlying versus reported results

reconcil

iat

ions

Standard Chartered

– Annual Report 2023

Strategic report

Net interest income and Non NII

2023

2022

Underlying

$mill

ion

Restructuring

$mill

ion

Adjustment

for Financ

ial

Markets

funding costs

and ﬁnancial

guarantee fees

on interest

earning assets

$mill

ion

Reported

$mill

ion

Underlying

$mill

ion

Restructuring

$mill

ion

Adjustment

for Financ

ial

Markets

funding costs

and ﬁnancial

guarantee fees

on interest

earning assets

$mill

ion

Reported

$mill

ion

Net interest income

1,2

9,557

(10)

(1,778)

7,769

7,967

(383)

7,593

Non NII

1,2

7,821

651

1,778

10,250

7,795

547

383

8,725

Total income

17,378

641

–

18,019

15,762

556

–

16,318

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

2. To be consistent with how we the compute Net Interest Margin, we have changed our deﬁn

ion of Underlying Net Interest Income (NII) and Underlying Non NII.

The adjustments made to NIM, includ

ing Interest expense relat

ing to funding our trading book, will now be shown against Underlying Non NII to be updated as

rather than Underlying NII. There is no impact on total income

Proﬁt before taxation (PBT)

2023

Underlying

$mill

ion

Restructuring

$mill

ion

Net gain on

businesses

disposed of

$mill

ion

Goodwill

and other

Impairment

$mill

ion

DVA

$mill

ion

Reported

$mill

ion

Operating income

17,378

362

262

–

18,019

Operating expenses

(11,136)

(415)

–

(11,551)

Operating proﬁt/(loss) before

impa

irment losses and taxat

ion

6,242

(53)

262

–

6,468

Credit impa

irment

(528)

–

(508)

Other impa

irment

(130)

(28)

–

(850)

–

(1,008)

Proﬁt from associates and jo

int ventures

–

141

Proﬁt/(loss) before taxation

5,678

(14)

262

(850)

5,093

2022

Underlying

$mill

ion

Restructuring

$mill

ion

Net gain on

businesses

disposed of

$mill

ion

Goodwill

and other

Impairment

$mill

ion

DVA

$mill

ion

Reported

$mill

ion

Operating income

15,762

494

–

16,318

Operating expenses

(10,409)

(504)

–

(10,913)

Operating proﬁt/(loss) before

impa

irment losses and taxat

ion

5,353

(10)

–

5,405

Credit impa

irment

(836)

–

(836)

Other impa

irment

(39)

(78)

–

(322)

–

(439)

Proﬁt from associates and jo

int ventures

167

(11)

–

156

Proﬁt/(loss) before taxation

4,645

(99)

(322)

4,286

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

2. Goodwill and other impa

irment

include $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank

(Bohai)

Net gain on businesses disposed of includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business

and a loss of $47 mill

ion

in relation to a sale of a portfolio of Aviat

ion loans

Standard Chartered

– Annual Report 2023

Strategic report

Underlying versus reported results

Proﬁt before taxation (PBT) by client segment

2023

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

11,218

7,106

156

(1,102)

17,378

External

8,543

3,902

157

4,776

17,378

Inter-segment

2,675

3,204

(1)

(5,878)

–

Operating expenses

(5,627)

(4,261)

(429)

(819)

(11,136)

Operating proﬁt/(loss) before impa

irment losses

and taxation

5,591

2,845

(273)

(1,921)

6,242

Credit impa

irment

(123)

(354)

(85)

(528)

Other impa

irment

(32)

(4)

(26)

(68)

(130)

Proﬁt from associates and jo

int ventures

–

(24)

118

Underlying proﬁt/(loss) before taxation

5,436

2,487

(408)

(1,837)

5,678

Restructuring

(60)

(4)

(14)

Goodwill and other impa

irment

–

(850)

DVA

–

Other items³

262

–

262

Reported proﬁt/(loss) before taxation

5,747

2,427

(412)

(2,669)

5,093

2022¹

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

9,608

5,969

156

15,762

External

8,462

4,942

2,329

15,762

Inter-segment

1,146

1,027

–

(2,173)

–

Operating expenses

(5,193)

(4,104)

(336)

(776)

(10,409)

Operating proﬁt/(loss) before impa

irment losses

and taxation

4,415

1,865

(307)

(620)

5,353

Credit impa

irment

(425)

(262)

(16)

(133)

(836)

Other impa

irment

–

(10)

(24)

(5)

(39)

Proﬁt from associates and jo

int ventures

–

(16)

183

167

Underlying proﬁt/(loss) before taxation

3,990

1,593

(363)

(575)

4,645

Restructuring

(56)

(1)

(56)

(99)

Goodwill and other impa

irment

–

(322)

DVA

–

Other items

–

Reported proﬁt/(loss) before taxation

4,046

1,537

(364)

(933)

4,286

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

2. Goodwill and other impa

irment

include $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank

(Bohai)

Other items includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

relation to a sale of a portfolio of Aviat

ion loans

Standard Chartered

– Annual Report 2023

Strategic report

Proﬁt before taxation (PBT) by region

2023

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

(region)

$mill

ion

Total

$mill

ion

Operating income

12,429

2,806

1,397

746

17,378

Operating expenses

(7,096)

(1,571)

(1,733)

(736)

(11,136)

Operating proﬁt/(loss) before impa

irment losses

and taxation

5,333

1,235

(336)

6,242

Credit impa

irment

(644)

(528)

Other impa

irment

(63)

(15)

(13)

(39)

(130)

Proﬁt from associates and jo

int ventures

114

–

(20)

Underlying proﬁt/(loss) before taxation

4,740

1,311

(330)

(43)

5,678

Restructuring

(97)

(2)

(14)

Goodwill and other impa

irment

(850)

–

(850)

DVA

(16)

–

Other items³

(18)

263

(18)

262

Reported proﬁt/(loss) before taxation

3,812

1,317

(28)

(8)

5,093

2022

Asia

$mill

ion

Africa &

Middle East

$mill

ion

Europe &

Americas

$mill

ion

Central &

other items

(region)

$mill

ion

Total

$mill

ion

Operating income

10,912

2,460

2,303

15,762

Operating expenses

(6,675)

(1,551)

(1,548)

(635)

(10,409)

Operating proﬁt/(loss) before impa

irment losses

and taxation

4,237

909

755

(548)

5,353

Credit impa

irment

(790)

(119)

(5)

(836)

Other impa

irment

(10)

(32)

(39)

Proﬁt from associates and jo

int ventures

179

–

(12)

167

Underlying proﬁt/(loss) before taxation

3,616

792

834

(597)

4,645

Restructuring

(46)

(13)

(61)

(99)

Goodwill and other impa

irment

(308)

–

(14)

(322)

DVA

–

Other items

–

Reported proﬁt/(loss) before taxation

3,302

821

835

(672)

4,286

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

2. Goodwill and other impa

irment

include $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank

(Bohai)

Other items includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

relation to a sale of a portfolio of Aviat

ion loans

Standard Chartered

– Annual Report 2023

Strategic report

Underlying versus reported results

Return on tangible equity (RoTE)

2023

$mill

ion

2022¹

$mill

ion

Average parent company Shareholders’ Equity

43,549

44,237

Less Average preference share capital and share premium

(1,494)

Less Average intang

ible assets

(5,957)

(5,557)

Average Ordinary Shareholders’ Tangible Equity

36,098

37,186

Proﬁt for the period attributable to equity holders

3,462

2,902

Non-controlling interests

Div

idend payable on preference shares and AT1 class

ied as equ

ity

(452)

(401)

Proﬁt for the period attributable to ordinary shareholders

3,017

2,547

Items normalised:

Restructuring

Goodwill & other impa

irment

850

322

Net gains on sale of businesses⁴

(262)

(20)

Ventures FVOCI unrealised gains/(losses) net of tax

(36)

DVA

(17)

(42)

Tax on normalised items

(21)

(3)

Underlying proﬁt for the period attributable to ordinary shareholders

3,650

2,867

Underlying Return on Tangible Equity

10.1%

7.7%

Reported Return on Tangible Equity

8.4%

6.8%

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

2. Excludes other equity instruments includ

ing AT1s

3. Goodwill and other impa

irment

include $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank

(Bohai)

Includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

in relation to

a sale of a portfolio of Aviat

ion loans

2023

Corporate,

Commercial&

Institut

ional

Banking

Consumer

Private &

Business

Banking

Ventures

Central &

other

Items

(Segment)

Total

Underlying RoTE

19.5

25.3

nm³

(27.0)

10.1

Provis

ion for regulatory matters

–

Restructuring

Of which: Income

1.4

0.6

–

0.3

1.0

Of which: Expenses

(1.3)

(1.4)

nm³

(0.6)

(1.1)

Of which: Credit impa

irment

0.1

–

0.1

Of which: Other impa

irment

(0.1)

–

(0.2)

(0.1)

Of which: Proﬁt from associates and jo

int ventures

–

0.6

0.1

Net gain on businesses disposed/held for sale²

1.3

–

0.7

Goodwill and other impa

irment¹

–

(11.1)

(2.3)

Ventures FVOCI Unrealised gains/(losses) net of Taxes

–

(0.2)

DVA

0.1

–

Tax on normalised items

(0.4)

0.2

nm³

1.1

0.1

Reported RoTE

20.6

24.7

nm³

(36.8)

8.4

Goodwill and other impa

irment

include $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank

(Bohai)

2. Includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

in relation to

a sale of a portfolio of Aviat

ion loans

3. Not meaningful

4. Segmental RoTE is the ratio of the current year’s underlying proﬁt to the average tangible equity. Average Tangible Equity has been derived based on average

RWA

Standard Chartered

– Annual Report 2023

Strategic report

2022¹

Corporate,

Commercial&

Institut

ional

Banking

Consumer

Private &

Business

Banking

Ventures

Central &

other Items

(Segment)

Total

Underlying RoTE

13.4

15.8

nm³

(14.2)

7.7

Provis

ion for regulatory matters

–

Restructuring

Of which: Income

1.9

0.6

–

0.1

1.3

Of which: Expenses

(1.6)

(1.4)

nm³

(0.5)

(1.4)

Of which: Credit impa

irment

–

Of which: Other impa

irment

(0.2)

–

(0.3)

(0.2)

Of which: Proﬁt from associates and jo

int ventures

–

(0.1)

–

Net loss on businesses disposed/held for sale

–

nm³

0.3

0.1

Goodwill and other impa

irment

–

(4.5)

(0.9)

Ventures FVOCI Unrealised gains/(losses) net of Taxes

–

0.1

DVA

0.2

–

0.1

Tax on normalised items

(0.1)

0.2

nm³

–

Reported RoTE

13.6

15.2

nm³

(19.2)

6.8

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

2. Goodwill and other impa

irment

include $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank

(Bohai)

3. Not meaningful

4. Segmental RoTE is the ratio of the current year’s underlying proﬁt to the average tangible equity. Average Tangible Equity has been derived based on average

RWA

Net charge-off ratio

2023

2022

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

exposure¹

$mill

ion

Net

Charge-off

Ratio¹

Stage 1

320,649

(0.01)%

321,099

(0.00)%

Stage 2

(262)

11,674

2.24%

(325)

13,162

2.47%

Stage 3

(386)

3,117

12.38%

(423)

3,074

13.76%

Total exposure

(606)

335,440

0.18%

(743)

337,335

0.22%

Prior year has been restated

Earnings per ordinary share (EPS)

2023

Underlying

$ mill

ion

Restructuring

$ mill

ion

DVA

$ mill

ion

Net gain

on sale of

businesses¹

$ mill

ion

Goodwill

and other

impa

irment²

$ mill

ion

Tax on

normalised

items

$ mill

ion

Reported

$ mill

ion

Proﬁt for the year attributable to

ordinary shareholders

3,581

(14)

262

(850)

3,017

Basic – Weighted average number of shares

(mill

ions)

2,778

Basic earnings per ordinary share (cents)

128.9

108.6

2022

Underlying

$ mill

ion

Restructuring

$ mill

ion

DVA

$ mill

ion

Net loss

on sale of

businesses

$ mill

ion

Goodwill

impa

irment

$ mill

ion

Tax on

normalised

items

$ mill

ion

Reported

$ mill

ion

Proﬁt for the year attributable to

ordinary shareholders

2,903

(99)

(322)

2,547

Basic – Weighted average number of shares

(mill

ions)

2,966

Basic earnings per ordinary share (cents)

97.9

85.9

Includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

in relation to a

sale of a portfolio of Aviat

ion loans

2. Goodwill and other impa

irment

include $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank

(Bohai)

3. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

Standard Chartered

– Annual Report 2023

Strategic report

Alternative performance measures

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

Advances-to-deposits/

customer advances-to-deposits

(ADR) ratio

The ratio of total loans and advances to customers relative to total customer accounts, excluding

approved balances held with central banks, conﬁrmed as repayable at the point of stress. A low

advances-to-deposits ratio demonstrates that customer accounts exceed customer loans resulting

from emphasis placed on generating a high level of stable funding from customers.

Average interest earning

balance

Daily average of the interest earning assets and interest bearing liabl

ies balances excluding the

daily average cash collateral balances in other assets and other liab

ies that are related to the

Financ

ial Markets trad

ing book

Constant currency basis

A performance measure on a constant currency basis is presented such that comparative periods

are adjusted for the current year’s functional currency rate. The following balances are presented on

a constant currency basis when described as such:

• Operating income

• Operating expenses

• Proﬁt before tax

• RWAs or risk-weighted assets

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

Reported interest income div

ided by average

interest earning assets.

Income return on risk weighted

assets (IRoRWA)

Annualised Income excluding Debit Valuation Adjustment as a percentage of Average RWA

Jaws

The difference between the rates of change in revenue and operating expenses. Posit

ive jaws occurs

when the percentage change in revenue is higher than, or less negative than, the corresponding rate

for operating expenses.

Loan loss rate

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 loans and advances.

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 on average assets less rate paid on average liab

ies

NIM or Net interest margin

Reported net interest income adjusted for interest expense incurred on amortised cost liab

ies used

to fund the Financ

ial Markets bus

iness and ﬁnanc

ial guarantee fees on

interest earning assets,

div

ided by average

interest-earning assets excluding ﬁnanc

ial assets measured at fa

ir 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

Reported 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.

RoE or Return on equity

The ratio of the current year’s proﬁt available for distr

ibut

ion to ordinary shareholders plus fair value

movements through other comprehensive income relating to the Ventures segment to the weighted

average ordinary shareholders’ equity for the reporting period.

RoTE or Return on ordinary

shareholders’ tangible equity

The ratio of the current year’s proﬁt available for distr

ibut

ion to ordinary shareholders to the average

tangible equity, being ordinary shareholders’ equity less the average intang

ible assets for the

reporting period. Where a target RoTE is stated, this is based on proﬁt and equity expectations for

future periods.

TSR or Total shareholder return

The total return of the Group’s equity (share price growth and div

idends) to

investors.

Alternative performance measures

Standard Chartered

– Annual Report 2023

Strategic report

Measure

Deﬁnit

ion

Underlying net interest income

Reported net interest income normalised to an underlying basis adjusted for interest expense

incurred on amortised cost liab

ies used to fund the F

inanc

ial Markets bus

iness and ﬁnanc

ial

guarantee fees on interest earning assets.

Underlying/Normalised

A performance measure is described as underlying/normalised if the reported result has been

adjusted for restructuring and other items representing proﬁts or losses of a capital nature; DVA;

amounts consequent to investment transactions driven by strategic intent, excluding amounts

consequent to Ventures transactions, as these are considered part of the Group’s ordinary course of

business; and other infrequent and/or exceptional transactions that are sign

iﬁcant or mater

ial in

the context of the Group’s normal business earnings for the period, and items which management

and investors would ordinar

ily

ident

ify separately when assess

ing performance period-by-period.

Restructuring includes impacts to proﬁt or loss from businesses that have been disclosed as no longer

part of the Group’s ongoing business, redundancy costs, costs of closure or relocation of business

locations, impa

irments of assets and other costs wh

ich are not related to the Group’s ongoing

business. Restructuring in this context is not the same as a restructuring provis

ion as deﬁned

in IAS 37.

A reconcil

iat

ion between underlying/normalised and reported performance is contained in Note 2 to

the ﬁnancial statements. The follow

ing 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

Non NII

Reported Non NII is a sum of net fees and commiss

ion, net trad

ing income and other

operating income

Underlying Non NII

Reported Non NII normalised to an underlying basis adjusted for interest expense incurred on

amortised cost liab

ies used to fund the F

inanc

ial Markets bus

iness and ﬁnanc

ial guarantee

fees on interest earning assets. In prior periods Underlying Non NII was described as underlying

other income.

Underlying RoTE

The ratio of the current year’s proﬁt available for distr

ibut

ion to ordinary shareholders plus fair value

on OCI equity movement relating to Ventures segment to the weighted average ordinary

shareholders’ equity for the reporting period.

Standard Chartered

– Annual Report 2023

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, sp

ikes in oil prices, market volatil

ity,

economic recession, and 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 strateg

ic planning horizon and,

the basis upon which its regulatory capital stress tests are

undertaken and is representative of the continuous level of

regulatory change affecting the ﬁnanc

ial serv

ices industry.

The directors will continue to monitor and consider the

appropriateness of this period.

The directors have reviewed the corporate plan, the output

of the Group’s formalised process of budgeting and strategic

planning. For the 2024 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 conﬁrmat

ion from the Group Ch

ief

Risk Ofﬁcer that the Plan is aligned with the Enterprise Risk

Management Framework and with

in Group R

isk Appetite

Statement and considers the Group’s future project

ions of

proﬁtabil

ity, cash ﬂows, capital requirements and resources,

liqu

ity ratios and other key ﬁnanc

ial and regulatory rat

ios

over the period. The Corporate Plan details the Group’s key

performance measures, of forecast proﬁt, CET 1 capital ratio

forecast, return on tangible equity forecasts, cost to income

ratio forecasts and cash investment project

ions. The Board

has reviewed the ongoing performance management

process of the Group by comparing the reported results

to the budgets and corporate plan.

The Group performs enterprise-wide stress tests using a

range of bespoke hypothetical scenarios that explore the

resil

ience of the Group to shocks to

its balance sheet and

business model.

To assess the Group’s balance sheet vulnerabil

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

volatil

ity

in commodity prices

•

Sign

iﬁcant r

ises in interest rates and depreciat

ion

emerging market currencies, resulting in heightened

sovereign risk

•

Financ

ial market volat

ity,

includ

ing s

ign

iﬁcant moves

asset prices driven by a combinat

ion of macroeconom

and geopolit

ical events

This year, the primary focus has been on:

•

The effect of high interest rates and persistent inﬂat

ion,

includ

ing sp

ikes in the oil price, combined with severe

market volatil

ity and severe econom

ic downturns in China

and other economies.

•

The impact of intens

ify

ing geopolit

ical tens

ions on

economic and ﬁnanc

ial act

ity

in our footprint markets

includ

ing an assessment of both ﬁnancial and

operational risks.

•

Testing liqu

ity resil

ience of the Group

in case it

experiences a very severe stress informed by different,

actual stress events observed for e.g. Sil

icon Valley Bank

or by Credit Suisse

In 2023, the Group undertook a number of Climate Risk stress

tests, includ

ing those mandated by the Hong Kong Monetary

Authority, Central Bank UAE and internal management

scenario analysis. We expanded our portfolio coverage to

assess the resil

ience of 95 per cent of CCIB Exposure at Default

across three external scenarios based on Version 3 of the

Network for Greening the Financ

ial System (NGFS) and three

internal management scenarios. The three internal scenarios

refer to one bespoke base case and a physical and a

transit

ion ta

il risk scenario.

The loan impa

irment (LI)

intens

ity wh

ich measures the level

of gross expected credit losses (ECL) against the exposure

at default (EAD) enables us to assess the relative size of

our exposure subject to potential losses from climate risks.

LI intens

ity

is not currently material.

Overall, we believe that the level of potential credit losses can

be mit

igated by cont

inu

ing to take necessary act

ions which

the Group is already doing across sectors, engaging with our

clients on this topic and support them in enhancing their

climate transit

ion plans. 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

portfolio. In 2023, Climate Risk was also considered as part

of our formal annual corporate strategy and ﬁnancial

planning process.

Viab

ity statement

Standard Chartered

– Annual Report 2023

Strategic report

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 cap

ital 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 escalation of

geopolit

ical tens

ions which results in reciprocal target

sanctions and the bifurcat

ion of ﬁnancial system between

the West and East , impact

ing key

industr

ies

includ

ing

technology, telecommunicat

ions and ﬁnancial

inst

itut

ions.

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 314).

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 ratios.

The Board Risk Committee (BRC) exercises oversight on

behalf of the Board of the key risks of the Group and reviews

the Group’s Risk Appetite Statement and Enterprise Risk

Management Framework, includ

ing rev

iew

ing the

appropriateness and effectiveness of the Group’s risk

management systems, key controls and consider

ing the

impl

icat

ions of material regulatory change proposals, and

review

ing reports on pr

inc

ipal r

isks, includ

ing Cl

imate Risk,

to the Group’s business.

The BRC receives regular reports reports on the Group’s key

risks, as well as updates on the macroeconomic environment,

geo-polit

ical outlook, market developments, and relevant

regulatory updates. In 2023, the BRC had deeper discuss

ion

covering: CCIB Risk deep dives with particular focus on

change management and regulatory programmes; the

CPBB portfolio, particularly credit cards, personal loans,

partnerships, Financ

ial Cr

ime and ICS risks; the Group’s

approach to Liqu

ity and Funding Risk management;

Country risk includ

ing Sovere

ign risk; credit portfolio

management activ

ies risk and progress made in balance

sheet optim

isat

ion; Reputational and Sustainab

ity Risk

includ

ing the Group’s approach to Env

ironmental, Social

and Governance Risk;, Climate Risk particularly climate risk

integrat

ion and scenar

io analysis;, Safety and Security Risk;,

Credit Risk review particularly large exposures, resources and

scope of climate risk assessment and stress testing; and

Chief

Risk Ofﬁcer treasury report, includ

ing r

isk observations and

recommendations around the current balance sheet; SC

Ventures Risk and governance. The BRC also held a jo

int

horizon scanning session with the Audit Committee on the

forward looking geo-polit

ical agenda and emerg

ing risks.

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

ic m

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 20 to 23) and Strategy

(pages 24 and 25)

•

The Group’s current posit

ion and prospects

includ

ing factors

likely to affect future results and development, together

with a descript

ion of ﬁnancial and fund

ing posit

ions are

described in the client segment reviews and regional

reviews (pages 26 to 33)

•

An update on the key risk themes of the Group is discussed

in the Group Chief Risk Ofﬁcer’s review, found in the

Strategic Report (pages 34 to 43)

•

The BRC section of the Director’s report (pages 44 to 48)

•

The Group’s Topical and Emerging Risks, sets out the key

external factors that could impact the Group in the coming

year (pages 48 to 51).

•

The Group’s Enterprise Risk Management Framework

details how the Group ident

iﬁes, manages and governs

risk (pages 314 to 320)

•

The Group’s Risk proﬁle provides an analysis of our risk

exposures across all major risk types (page 320 to 337)

•

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 338 to 343)

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 per

iod of the assessment up

to 31 December 2026.

Our Strategic report from pages 01 to 89 has been reviewed

and approved by the Board.

Our Strategic report from pages 01 to 89 has been

reviewed and approved by the Board.

Bill Winters

Group Chief Executive

23 February 2024

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Sustainab

ity review

Sustainab

ity review

Sustainab

ity Aspirat

ions

Sustainab

ity Strategic Pillars

120

Climate and sustainab

ity-related

governance

125

Managing Environmental and Social Risk

126

Managing Climate Risk

130

Integrity, conduct and ethics



Supporting

ﬁnancial

inst

itut

ions

with sustainable

trade loans



In September, we launched a

sustainable trade loan offering for

ﬁnancial

inst

itut

ions. The loans can

be used for renewable energy sector

projects such as the installat

ion of

wind turbines, purchase of solar panels,

and sale of renewable energy battery

storage systems. The offering builds

on our sustainable trade ﬁnance

proposit

ion, announced

in 2021,

designed to help companies

implement more sustainable

practices across their ecosystems and

build more resil

ient supply cha

ins.

Read more at

sc.com/sustainabletrade

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Sustainab

ity review

This section provides informat

ion on the Group’s approach to susta

inab

ity,

related governance structures, how we manage environmental,

social, and climate risk, and progress in 2023. Further informat

ion

available in the Risk review section from pages 298 to 313 and in the

Supplementary sustainab

ity informat

ion sect

ion from pages 504 to 516.

Sustainab

ity Review content map

Driv

ing a susta

inable future

Page 67

Our approach to sustainab

ity reporting

Page 93

Approach to

sustainab

ity

Sustainab

ity

Aspirat

ions:

our long-term goals

Aspirat

ion 1:

Mobil

ise $300 b

ill

ion of Susta

inable Finance by 2030

Page 94

Aspirat

ion 2:

Operational

ise our

inter

im 2030 ﬁnanced em

iss

ions

targets to meet our 2050 net zero ambit

ion

Page 95

Aspirat

ion 3:

Enhance and deepen the sustainab

ity ecosystem

Page 96

Aspirat

ion 4:

Drive social impact with our clients and communit

ies

Page 97

Sustainab

ity

Strategic Pillars:

our short-term

targets and

immed

iate pr

ior

ies

Pillar 1:

Scale Sustainable Finance income

Page 99

Pillar 2:

Further embed sustainab

ity across the organisat

ion

Page 102

Pillar 3:

Deliver on the annual milestones set forth in our net zero

roadmap

Page 105

Pillar 4:

Leverage our innovat

ion hubs

Page 118

Climate- and sustainab

ity-related governance

Page 120

Managing environmental and social risk

Page 125

Managing climate risk

Page 126

Integrity, conduct and ethics

Page 130

Discla

imer

We report on sustainab

ity and Environmental, Social and

Governance (ESG) matters throughout this Annual Report, in

particular in the following sections: (i) Sustainab

ity overview

in the Strategic report, Sustainab

ity overview on pages 66

to 79; (i

i) Susta

inab

ity review on pages 92 to 133; (i

i) Risk

review and Capital review on pages 298 to 313; and (iv) in the

Supplementary Sustainab

ity Information section on pages

504 to 516.

In this ‘Sustainab

ity review’ chapter, we 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’ on pages 519 and 520. Addit

ional

informat

ion can be accessed through our su

ite of supporting

sustainab

ity reports and disclosures via our website

www.sc.com.

Independent Lim

ited Assurance

Ernst & Young LLP (EY) were appointed to provide

independent lim

ited assurance over certa

in data points

with

in th

is Annual Report, ind

icated w

ith a caret symbol (^) in

this report. The assurance engagement was planned and

performed in accordance with the International Standard on

Assurance Engagements (UK) 3000 (July 2020), Assurance

Engagements Other Than Audits or Reviews of Histor

ical

Financ

ial Informat

ion (ISAE (UK) 3000 (July 2020)). This

independent assurance report is separate from EY’s audit

report on the ﬁnancial statements and

is available at

sc.com/sustainab

ityhub

. This report includes further detail

on the scope, respective responsib

ies, work performed,

lim

itat

ions and conclusions.

We obtained independent lim

ited assurance on the Group’s

Scope 1 and 2 greenhouse gas (GHG) emiss

ions (exclud

ing

fugit

ive em

iss

ions) by Global Documentat

ion Ltd. We also

obtained reasonable assurance on the Group’s Scope 3

emiss

ions assoc

iated with business travel (air travel) from

Eco-Act. These verif

icat

ions were conducted in accordance

with the ISO 14064-3 Greenhouse gases standard.

Sustainab

ity review

Standard Chartered

– Annual Report 2023

To access the Group’s suite of sustainab

ity-related reports and

disclosures please vis

sc.com/sustainab

ityhub

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Our suite of sustainab

ity-related reports and disclosures

Report or disclosure

Descript

ion

Divers

ity, Equal

ity and

Inclusion Impact Report

Includes gender and ethnic

ity pay gap assessment and the act

ions we have taken to support a culture

of inclus

ion.

Equator Princ

iples

Reporting

As a member since 2003, we report on how we apply the princ

iples to ensure that the projects we ﬁnance

and advise on are developed in a manner that is socially responsible and reﬂect sound environmental

management practices.

ESG Data Pack

The ESG and sustainab

ity data disclosed with

in th

is Annual Report is provided in a spreadsheet format.

ESG Reporting Index

Alignment table referencing our disclosures using voluntary sustainab

ity reporting frameworks: SASB

Standards, Global Reporting Init

iat

ive (GRI) and World Economic Forum (WEF) Stakeholder Capital

ism Metr

ics.

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.

Net zero methodological

white paper – The journey

continues

Describes the Group’s approach to net zero laying out the methodologies we have used to calculate our

ﬁnanced and facil

itated em

iss

ions and sett

ing our inter

im 2030 targets at sector level.

Posit

ion Statements and

Prohib

ited Act

ies

We use our cross-sector and sector-specif

ic Pos

ion Statements and Proh

ited Act

ies list to assess whether

to provide ﬁnanc

ial serv

ices to clients.

PRB Reporting and Self-

assessment

The Group’s disclosures on actions undertaken related to the six princ

iples as deﬁned by the Un

ited Nations

Princ

iples for Respons

ible Banking (PRB).

Sustainable Finance

Impact Report

We present the impact of our Sustainable Finance assets on a portfolio basis.

Sustainable Finance

Frameworks

Our Green and Sustainable Product Framework and Sustainab

ity Bond Framework outline our deﬁn

ion of

green, sustainable ﬁnance. Our Transit

ion F

inance Framework sets out the acit

ites and entit

ies that we

consider elig

ible for trans

ion ﬁnance.

TCFD Summary and

Alignment Index

A summary and alignment index referencing the Group’s relevant disclosures against the Taskforce on

Climate-related Financ

ial D

isclosures (TCFD) framework can be found on pages 511 to 516.

Driv

ing a susta

inable future

With a long-standing presence in parts of the world where

sustainable ﬁnance can have a sign

iﬁcant

impact, we

facil

itate the movement of cap

ital to where it is needed

most. We apply our knowledge across our market footprint

and the innovat

ive m

indset of our teams to create ﬁnanc

ial

solutions that help to address challenges and support

sustainable growth.

The work we do to accelerate the transit

ion to net zero, l

ift

partic

ipat

ion in the economy and reset globalisat

ion

fundamental to our business. These three areas of focus are

known as our

Stands

and inform our overall strategy, includ

ing

our approach to sustainab

ity, our advocacy efforts on behalf

of our markets and engagement with our employees and

society.

Our Stands are described in more detail on

page 26 of this Annual Report

Our approach to sustainab

ity

Embedding sustainab

ity across our business is a strategic

prior

ity for the Group. To accelerate our susta

inab

ity agenda,

the Group’s inaugural Chief Sustainab

ity Ofﬁcer (CSO)

was appointed in 2022. Since then, our dedicated CSO

organisat

ion – wh

ich houses our Sustainable Finance,

Sustainab

ity Strategy, Net Zero Delivery, Strategic Init

iat

ives

and Environmental and Social Risk Management teams –

acts as a centre of excellence and a catalyst for the execution

of the Group-wide sustainab

ity strategy, includ

ing the

achievement of our net zero roadmap.

We focus on deliver

ing both our long-term susta

inab

ity goals

– our

Sustainab

ity Aspirat

ions

– as well as our short-term

targets and immed

iate pr

ior

ies – our

Sustainab

ity

Strategic Pillars

Our approach to sustainab

ity reporting

The Group includes Environmental, Social and Governance

(ESG) and sustainab

ity informat

ion

in this Annual Report,

provid

ing

investors and stakeholders with an understanding

of the impl

icat

ions of relevant sustainab

ity-related risks and

opportunit

ies, and progress aga

inst our object

ives. In l

ine

with our ‘comply or explain’ obligat

ion under the UK F

inanc

ial

Conduct Authority’s List

ing Rules, we conﬁrm that we have

made disclosures consistent with the TCFD recommendations

and recommended disclosures throughout this Annual Report.

For our TCFD content table please refer to page 79 and for our

TCFD Summary and Alignment Index see pages 511 to 516.

In preparing this report we have given considerat

ion to

(but do not align in full with) the guidance provided by the

International Sustainab

ity Standards Board (ISSB) in 2023:

IFRS S1 and IFRS S2, noting that IFRS S2, although largely based

on TCFD, requires a more granular level of disclosure. IFRS S1

and S2 are voluntary standards and compliance is not yet

required in the Group’s list

ing locat

ions.

Material

ity

is considered to be the threshold of sign

iﬁcance

for reporting sustainab

ity-related risks and opportunit

ies

for users of ﬁnancial statements:

investors and wider

stakeholders. We consider guidance provided by the IFRS

Foundation, which focuses on meeting the sustainab

ity

data and informat

ion needs of our

investors. Determin

ing

material

ity for susta

inab

ity-related risks and opportunit

ies

should consider both quantitat

ive and qual

itat

ive aspects

related to sustainable social and economic development.

Our approach to sustainab

ity reporting will continue to

evolve subject to regulatory and voluntary standards across

our list

ing locat

ions and footprint markets. Our disclosures are

guided by internat

ional standards, frameworks and pr

inc

iples

to the extent relevant to our business. We publish an ESG

Reporting Index against the disclosures captured in the GRI

Universal and select Topic Standards, relevant metrics from

sector-specif

ic SASB Standards and WEF’s Stakeholder

Capital

ism Metr

ics.

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Sustainab

ity Aspirat

ions:

our long-term goals

The Group’s approach to sustainab

ity is underpinned by our Stands and shaped

by our Sustainab

ity Aspirat

ions. Dur

ing 2023, we refreshed and consolidated our

Sustainab

ity Aspirat

ions

into four overarching long-term goals, each supported by

key performance ind

icators. Together, these reﬂect our comm

itment to our brand

promise, here for good, in support of sustainable social and economic development.

Aspirat

ion 1: Mob

ise $300 b

ill

ion of Susta

inable Finance

Across our markets, many clients are at the early phase of evaluating the risks and opportunit

ies assoc

iated with their transit

ion

to a low-carbon economy. We leverage a full suite of Sustainable Finance solutions – includ

ing loans, bonds, trade ﬁnance and

carbon trading – to support their transit

ion. These are underp

inned by our Sustainable Finance frameworks that outline how we

apply the ‘green’, ‘sustainable’ or ‘transit

ion’ labels across products and transact

ions. We also work with corporate, retail and

wealth clients to mobil

ise d

iverse sources of capital in support of social outcomes.

We have mobil

ised $87.2 b

ill

ion^ of Susta

inable Finance from January 2021 through to September 2023 against our commitment

to mobil

ise $300 b

ill

ion by 2030. We made strong progress aga

inst this target in the year and we antic

ipate that our future

progress will not be linear as our markets mature further, provid

ing opportun

ies for us to support our cl

ients in their transit

ion.

Sustainable Finance Mobil

ised

Product

Oct 2022 –

Sep 2023

Jan 2021 –

Sep 2022¹

Jan 2021 –

Sep 2023

Cumulative

Progress

Use of Proceeds

2,3

7,678

11,849

19,527

Sustainab

ity-Linked Loans (SLLs)

3,4

8,319

19,781

28,100

Transit

ion F

inance

3,5

418

344

762

SME Lending

3,6

1,014

1,839

2,853

Microf

inance

3,6

774

1,166

1,940

Green Mortgages

3,7

538

4,284

4,822

Mergers & Acquis

ions (M&A)/Advisory

1,432

4,354

5,786

Green and Social Bonds facil

itated

9,617

13,806

23,423

Total Sustainable Finance Mobil

ised

29,790

57,423

87,213^

Of the above

Corporate, Commercial & Institut

ional Bank

ing (CCIB)

28,238

51,300

79,538

Consumer, Private & Business Banking (CPBB)

1,552

6,123

7,675

Total Sustainable Finance Mobil

ised

29,790

57,423

87,213

Mobil

isat

ion of Sustainable Finance is deﬁned as any investment or ﬁnanc

ial serv

ice provided to clients that supports: (i) the preservation and/or improvement of

biod

ivers

ity, nature or the environment; (i

i) the long-term avo

idance/decrease of GHG emiss

ions,

includ

ing the al

ignment of a client’s business and operations

with a 1.5 degree Celsius trajectory (known as transit

ion ﬁnance); (

i) a social purpose; or (iv) incent

ing our cl

ients to meet their own sustainab

ity object

ives

(known as sustainab

ity-linked ﬁnance).

Amounts include transactions with restricted use of the proceeds of the ﬁnanc

ing that al

ign to our Green and Sustainable Product Framework.

Lending transactions are measured as per the loan commitment/underwritten amount provided to the counterparty.

SLLs refer to any type of loan instrument for which the economic characterist

ics can vary depend

ing on whether the counterparty achieves ambit

ious, mater

ial

and quantif

iable predeterm

ined sustainab

ity performance targets (SPTs). The counterparties’ sustainab

ity performance is measured by applying predeﬁned

SPTs to predeﬁned KPIs. The use of proceeds in relation to an SLL is not a determinant in its categorisat

ion and,

in most instances, SLLs will be used for general

corporate purposes. SLLs are not issued in line with the Group’s Green and Sustainable Product Framework.

Amount includes any ﬁnanc

ial serv

ice provided to clients to support them to align their business and/or operations with a 1.5-degree trajectory issued in line with

our Transit

ion ﬁnance framework.

SME and Microf

inance lend

ing which 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 small and medium enterprise (SME) ﬁnanc

ing and m

icro-ﬁnance.

Green Mortgages are loans from Consumer, Private & Business Banking (CPBB) where the underlying property meets a specif

ic energy rat

ing. Value mobil

ised

2021 includes mortgages orig

inated before 2021 but

ident

iﬁed as Green

in 2021.

M&A/Advisory represents where the Group is the ﬁnanc

ial adv

isor to the transaction. The amount attributed to M&A/Advisory mobil

isat

ion is proportional and

represents the total deal size div

ided by the number of ﬁnancial adv

isors on the deal.

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.

10 During 2023 addit

ional deals that meet the deﬁnit

ion of the Group’s Green and Sustainable product framework were ident

iﬁed and approved as susta

inable

resulting in a restatement to cumulative mobil

isat

ion in the prior year. Use of proceed transactions have increased from $9,820mn to $11,849mn, Transit

ion F

inance

transactions have increased from $144mn to $344mn and Mergers and Acquis

ions have increased from $3,184mn to $4,354mn, Sustainab

ity Linked Loans have

increased from $13,745mn to $19,781mn and Green Mortgages have increased from $3,500mn to $4,354mn.

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Aspirat

ion 2: Operat

ional

ise our

inter

im 2030 ﬁnanced em

iss

ions targets to meet our 2050 net zero amb

ion

The Paris Agreement recognises that the world needs to reach

net zero carbon emiss

ions by 2050 to m

igate the worst

effects of climate change and ensure a habitable planet for

the next generation. This will require efforts from a wide range

of stakeholders, governments and the private sector to

accelerate the just transit

ion to a low-carbon, nature pos

ive

and climate-resil

ient economy. We a

im to reach net zero in our

ﬁnanced emiss

ions by 2050 and

in our operations by 2025.

To date, the Group has set and disclosed science-based

inter

im 2030 ﬁnanced em

iss

ions targets for 11 h

igh-emitt

ing

sectors, in line with guidance from the Net-Zero Banking

Alliance (NZBA). We are working across our businesses and

functions, and alongside our clients to deliver these targets,

notwithstand

ing the challenges presented by a mater

ial

portion of our markets not having a commitment to achieve

net zero by 2050.

Sector

Emiss

ions

approach

Scient

iﬁc

reference

scenario

Drivers of sectoral

decarbonisat

ion

Our approach in 2023

CCIB

Alumin

ium

Production

intens

ity

MPP¹

Decarbonisat

ion of the power supply

into the

alumin

ium smelter.

We have set a production intens

ity basel

ine using

e per tonne of alumin

ium produced. The 2023

portfolio progress (based on the 2022 year-end

balance sheet) was subsequently calculated.

Automotive

Manufacturers

Physical

intens

ity

IEA APS/

NZE

2,3,4

Change in powertrain from internal

combustion engines (ICE) to electric vehicles

(EVs) for light commercial vehicle

manufacturers.

The industry has changed the assumptions for

calculating tailp

ipe em

iss

ions and adopted a test

procedure that better reﬂects real-world driv

ing

condit

ions. We have therefore adjusted the 2021

baseline and subsequent progress accordingly.

Cement

Production

intens

ity

IEA NZE

2,4

Removal of coal in the cement manufacturing

process and util

ing lower-carbon energy

sources.

We have set a production intens

ity basel

ine using

per tonne of cement produced. The 2023

portfolio progress was subsequently calculated.

Commercial

Real Estate

Physical

intens

ity

IEA APS/

NZE

2,3,4

Lower-carbon electric

ity supply and retroﬁtting

build

ings to

improve energy efﬁc

iency.

We have set a physical intens

ity basel

ine using

e per square metre. The 2023 progress of

portfolio was subsequently calculated.

Oil and Gas

Absolute

emiss

ions

IEA NZE

2,4

Reducing emiss

ions assoc

iated with Oil and

Gas production and supporting our clients on

their transit

ion towards lower-em

iss

ion

intens

ive energy sources and renewable energy

portfolios.

We have re-baselined during the year from a

revenue intens

ity to an absolute em

iss

ion bas

is.

The 2023 portfolio progress was subsequently

calculated.

Power

Production

intens

ity

IEA APS/

NZE

2,3,4

Supporting our clients on their transit

ion away

from high-emitt

ing fuels

in favour of lower-

emitt

ing fuels and a trans

ion to renewable

energy sources.

We have re-baselined during the year from a

revenue to a production intens

ity us

ing CO

per

megawatt hour produced. The 2023 portfolio

progress was subsequently calculated.

Shipp

ing

Physical

intens

ity

IMO 2023

Financ

ing modern best-

in-class vessels

equipped with latest design and energy

efﬁciency measures. Use of alternat

ive fuels

and operational efﬁc

iency measures such as

slow steaming and weather routing services

can enhance decarbonisat

ion.

Following revis

ions to the IMO decarbon

isat

ion

strategy, Poseidon Princ

iples have added two

addit

ional GHG strategy scenar

ios: the min

imum

and striv

ing trajectories. We have recalculated

our portfolio alignment deltas to the released

trajectories.

Steel

Production

intens

ity

MPP

Improving steel plant efﬁc

iency and replac

ing

coal furnaces with electric arc furnaces.

We have set a production intens

ity basel

ine using

per tonne of steel produced. The 2023

portfolio progress was subsequently calculated.

Thermal

Coal Min

ing

Absolute

emiss

ions

IEA NZE

2,4

Exposure is decreasing in line with contractual

commitments.

No new Thermal Coal Min

ing use of proceeds

loan have been provided in line with our Posit

ion

Statements.

Aviat

ion

Physical

intens

ity

MPP

The Group completed the sale of its global

aviat

ion ﬁnance leas

ing business and the

majority of

its aviat

ion lend

ing book in

August 2023.

Noting the distort

ive effects that the sale of th

business would create in our emiss

ions proﬁle for

this sector, the progress against this target has

been paused for year-end 2023. This will be

re-assessed based on the size and material

ity

of the remain

ing portfol

io in 2024.

CPBB

Resident

ial

Mortgages

Physical

intens

ity

CRREM

Lower carbon electric

ity supply and

retroﬁtting bu

ild

ings to

improve energy

efﬁciency.

We have set physical intens

ity basel

ine using

e per square metre. The 2023 portfolio

progress was subsequently calculated.

MPP – Miss

ion Poss

ible Partnership – Industrial decarbonisat

ion forward-

looking pathway provider most prominent in the metals industry.

IEA – International Energy Agency – Pre-eminent forward-looking pathway

provider for energy sectors.

APS – Announced Polic

ies Scenar

io – a 1.7 degree Celsius low overshoot

scenario.

NZE – Net Zero Emiss

ions – a 1.5 degree Cels

ius aligned scenario.

IMO – International Marit

ime Organ

izat

ion – Global sh

ipp

ing regulator.

CRREM – Carbon Risk Real Estate Monitor – European Union backed

foundation to provide forward-looking pathways for the real estate sector.

For further informat

ion, please refer to our ‘Net zero methodolog

ical white

paper – The journey continues’ publicat

ion. Sectoral em

iss

ions are calculated

in CO

except where other GHGs are material which are noted as CO

e (this

includes Oil and Gas, Thermal Coal Min

ing, Sh

ipp

ing, Alum

ium, Commerc

ial

Real Estate and Resident

ial Mortgages)

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Aspirat

ion 3: Enhance and deepen the susta

inab

ity ecosystem

We are util

ing our expertise and networks to actively contribute in a leadership posit

ion to global partnersh

ips and in

iat

ives

that enhance and further develop the sustainab

ity ecosystem. These range from those that support the mobil

isat

ion and

scaling of Sustainable Finance, to furthering the development of voluntary carbon markets and fostering innovat

ive solut

ions in

the arena of conservation ﬁnance, through to supporting the advancement of social topics underpinn

ing the UN Susta

inable

Development Goals (SDGs).

Key in

iat

ives and partnersh

ips

Throughout 2023, senior leaders across Standard Chartered were involved in the leadership of several collaborative

iat

ives

includ

ing, but not l

ited to, those l

isted in the table below.

Global Investors for

Sustainable Development

(GISD) Alliance

Glasgow Financ

ial All

iance

for Net Zero (GFANZ)

Our Group Chairman co-chairs the United Nations’ GISD Alliance, which has set ambit

ious

objectives to scale up long-term ﬁnance and

investment in sustainable development.

We are active partic

ipants of the GFANZ Pr

inc

ipals Group, an amb

ious programme to

generate the commitment, investment and alignment needed to drive forward the

transit

ion to net zero. Our Group CEO co-cha

irs the GFANZ working group on Capital

Mobil

isat

ion to Emerging Markets and Developing Economies.

Net-Zero Banking

Alliance (NZBA)

Our Group Head of Conduct, Financ

ial Cr

ime and Compliance chairs the NZBA – the

industry-led, UN-convened and sector-specif

ic all

iance for banks under GFANZ.

World Economic Forum

(WEF) Alliance of CEO

Climate Leaders

Our Group CEO and CSO are part of the WEF Alliance of CEO Climate Leaders. This is a

CEO-led community committed to rais

ing bold cl

imate ambit

ion and accelerat

ing the

net zero transit

ion by sett

ing science-based targets, disclos

ing em

iss

ions and catalys

ing

decarbonisat

ion and partnersh

ips across global value chains.

United Nations Princ

iples

for Responsible Banking

(PRB) Adaptation Finance

working group

Our Head of Sustainable Finance Solutions co-chairs the PRB Adaptation Finance

working group, which developed a comprehensive framework and practical guidance

for banks to set credible adaptation ﬁnance targets.

Integrity Council for the

Voluntary Carbon Markets

(ICVCM)

Our Head of Carbon Markets Development serves on the board of ICVCM which is

focused on developing high-quality carbon markets. Our Group CEO sits on the

Dist

ingu

ished Advisory Group of the ICVCM, which is involved in the development

of carbon markets around the world.

Center for Climate-

Aligned Finance (CCAF)

We formally joined CCAF, wh

ich was established by Rocky Mountain Institute, in 2023.

Standard Chartered partic

ipates

in CCAF working groups for the Aviat

ion and

Alumin

ium

industr

ies. The Group

is also a signatory to both the Poseidon Princ

iples,

a global framework for assessing and disclos

ing the cl

imate alignment of ﬁnanc

ial

inst

itut

ions’ shipp

ing portfol

ios and the Sustainable STEEL Princ

iples, wh

ich helps

banks to measure and disclose the alignment of steel lending portfolios with 1.5°C

climate targets.

Ocean Risk and Resil

ience

Action Alliance (ORRAA)

In 2023, the Group became a member of the ORRAA. Our Head of Nature serves on the

Ocean Investment Protocol Steering Committee convened by the UN Global Compact

Ocean Stewardship Coalit

ion.

For further informat

ion on the Group’s external engagement related to our four themat

ic innovat

ion hubs,

Adaptation Finance, Blended Finance, Carbon Markets and Nature Posit

ive Solut

ions, refer to

page 118

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Aspirat

ion 4: Dr

ive social impact with our clients and communit

ies

We seek to partner with our clients and communit

ies to mob

ise soc

ial capital and drive economic inclus

ion and

entrepreneurship through our Futuremakers in

iat

ive. We a

im to foster collaboration with local partners to support young

people and economic development across our markets.

Established in 2019, Futuremakers by Standard Chartered is our global youth economic empowerment in

iat

ive, wh

ich aims

to help disadvantaged young people learn, earn and grow.

In 2023, we contributed $14.6 mill

ion to Futuremakers,

includ

ing donat

ions from the Group and fundrais

ing of $1.7 m

ill

ion from

our employees and partners. With our internat

ional and local partners,

in 2023 alone we reached more than one mill

ion

young people through Futuremakers, includ

ing prov

ing ﬁnancial educat

ion to 159,190 unbanked or young people.

We published the latest Futuremakers Impact Report to share progress and capture lessons learned through Futuremakers.

In the past ﬁve years, we have reached more than 2.1 mill

ion young people, across 43 markets. We were able to exceed our

ial $75 mill

ion fundra

ing target reach

ing $93.3 mill

ion by end of 2023.

Futuremakers

Supporting young people with disab

ies

Futuremakers partners with Sightsavers and Youth Business

International, who worked with the African Disab

ity Forum

to develop a series of inclus

ion resources to bu

ild greater

disab

ity conﬁdence for readers, and help partners

understand how to include young people with disab

ies

in their Futuremakers programmes.

Futuremakers in 2024 and beyond

Based on our successes and learning since 2019, we have

set out a seven-year strategy for Futuremakers to maxim

ise

impact with a consistent approach to measurement,

evaluation and impact analysis.

Between 2024 and 2030 we aim to provide $120 mill

ion

to Futuremakers with the ambit

ion to create and susta

140,000 jobs, focusing on two target groups:

•

Helping 70,000 disadvantaged young women to gain

skills and sustainable employment.

•

Supporting entrepreneurs to build thriv

ing green and

social micro-businesses and create 70,000 jobs.

All programmes target disab

ity, gender and ﬁnanc

ial

inclus

ion. Dur

ing 2024 we plan to develop a methodology

to measure the wider societal impacts of Futuremakers,

which we will then apply to all future projects.

Read more about Futuremakers by Standard Chartered

sc.com/futuremakers

The nine orig

inal markets for Women

in Tech as part of Futuremakers were US, Ghana, Kenya, Niger

ia, UAE, Zamb

ia, Bahrain, Pakistan, and Korea.

Access to ﬁnance for female entrepreneurs

Futuremakers’ women entrepreneurs programmes, known

as Women in Tech and Women in Entrepreneurship in Asia,

have expanded from 9

to 13 markets – adding South

Africa, Saudi Arabia, Taiwan and Singapore – with a

network of alumni established.

•

In Africa, the Middle East and the US, Futuremakers

Women in Tech has partnered with Village Capital to

provide ﬁnanc

ing for alumn

i. With a primary focus on

women-led, impactful start-ups, this project provides

dedicated ﬁnanc

ial support for m

icro-businesses that

are addressing local and global challenges. So far, 107

young women have signed up for the alumni network

and expressed interest in ﬁnanc

ing. F

ive investments

totalling $375,000 have been agreed, and at least

another three investments are expected in early 2024.

•

For female entrepreneurs in Kenya, at an earlier stage in

establish

ing the

ir sustainable, environmentally focused

ventures, there is ﬁnanc

ial support from our

innovat

ive

revolving loan fund with Youth Business International

and Somo. As of end of September 2023, the fund has

supported 60 low-income, high-potential entrepreneurs

aged 18–35 from marginal

ised commun

ies and

contributed directly to the creation of 188 jobs.

•

At COP28, we held a Futuremakers Youth Panel as part of

the Business Fights Poverty Climate Justice Summit. We

heard ﬁrst-hand from our Women in Tech alumni about

their green and social ambit

ions, the problems they are

tackling and some of the ﬁnanc

ing solut

ions that are

needed to scale for a sustainable and inclus

ive future.

More than

72,000

adolescent girls were

supported to continue

in secondary

education

Over

40,

000

girls and young

women showed

increased conﬁdence

and self-esteem

More than

39,000

young people secured

employment

More than

46,000

young people

improved their

business-related

knowledge and skills

More than

12,000

jobs created by

entrepreneurs that

were supported by

Futuremakers

activ

ies

Nearly 517,000 of the over 2.1 mill

ion young people reached part

ipated

in intens

ive Futuremakers act

ies. And of those:

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Employee volunteering

In 2023, 61% of colleagues gave back to their communit

ies by contr

ibut

ing over

76,000 days to support worthwhile causes.

Our Employee Volunteering programme won several awards, includ

ing the

prestig

ious Lord Mayor’s Dragon Award

in the Inclusive Employment category, for

our UK-based Futuremakers RISE (Reach, Inspire, Support, Empower) programme

which focuses on employabil

ity and mentorsh

ip delivered in partnership with

the East London Business Alliance. In China, Standard Chartered became the

only internat

ional bank to be recogn

ised in the Top 10 of China’s Employee

Volunteering Enterprises in 2023.

Gender

To unleash girls’ potential, Standard Chartered and later the

Standard Chartered Foundation have supported 1,044,359

girls and young women through Goal. We were able to

exceed our target to reach one mill

ion g

irls through our global

education programme by the end of 2023. Since its launch,

Goal has become an internat

ionally recogn

ised global, sport

and activ

ity-based movement operat

ing in more than

20 markets, equipp

ing adolescent g

irls with the conﬁdence,

knowledge and skills they need to be economic leaders in

their famil

ies and commun

ies.

In 2023, we announced our sponsorship of the Women of

the World Foundation as their Global Girls Champion. The

programme of events concludes on International Women’s

Day in March 2024 and aims to promote the power and

potential of girls and non-binary young people in the UK

and globally.

Financ

ial

inclus

ion

In partnership with Primark, we worked with IDEO.org to

design and test peer-led, ﬁnanc

ial health tra

ing for workers

in factories in Vietnam. A successful pilot with approximately

170 workers tested a model supporting ind

iduals to ident

ify

and understand their money personality, how to set

ﬁnancial goals, save and

invest, improve their budgeting

and understand available social protections. During 2024,

we intend to explore how to scale this model across our

broader Futuremakers portfolio.

Health and education

In some of our footprint markets, we support projects, which

provide basic health and education services as precondit

ions

to economic empowerment.

•

In Nepal and Bangladesh we support eye health and

environmental projects.

•

In India, we have supported eye health since 2003 and

supported the screening of more than 2,700 villages to

ensure they are free from avoidable-blindness.

Since 2017, our WASHE (water, sanitat

ion and hyg

iene

education) programme has reached more than 880,000

beneﬁciar

ies, includ

ing over 416,000 women. Tang

ible

improvements include over 100 water ATMs installed and

over 5,300 sanitat

ion fac

ies constructed, creating 1.07 bill

ion

litres of annual freshwater capacity.

61%

of colleagues gave back to their

communit

ies through employee

volunteering

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Our four Sustainab

ity Strategic Pillars represent our near-term strategic focus. Each member of the Group Management Team

is responsible for strategically driv

ing cl

imate and sustainab

ity considerat

ions w

ith

in the

ir region, business segment or function

in line with the Group’s net zero roadmap. Selected sustainab

ity-related measures continue to be included in the 2024-26

Long-Term Incentive Plan (LTIP) awards granted to senior executives and with

in the 2024 Group scorecard, wh

ich contains

ﬁnancial and strateg

ic measures and is applicable for the major

ity of our employees.

Further details can be found in the Directors’ remuneration report on

pages 182-216

Pillar 1: Scale Sustainable Finance income

We are build

ing a scalable Susta

inable Finance franchise, supporting our clients on their transit

ion journeys by develop

ing

customised solutions that speak to their needs and ambit

ions. Our Susta

inable Finance franchise generated over

$720 mill

ion between January and December 2023 aga

inst our longer-term target of at least $1 bill

ion annual

income

by 2025. This represents over 6 per cent of our total CCIB income in 2023, a year-on-year growth rate of 42 per cent.

Sustainable Finance income

Product

2023

2022

YOY

Transaction Banking

188

135%

Trade & Working capital

60%

Cash Management

360%

Financ

ial Markets

393

326

21%

Macro Trading

41%

Credit Markets

306

268

14%

Financ

ing & Secur

ies Serv

ices

175%

Lending & Portfolio Management

139

102

36%

Total

720^

508

42%

Values noted with a caret symbol (^) are subject to independent lim

ited assurance by EY, report ava

ilable at

sc.com/sustainab

ityhub

Sustainab

ity Strategic Pillars: our short-

term targets and immed

iate pr

ior

ies

As a UK-headquartered internat

ional bank we work to deploy

capital across our global markets. As can be seen on the

following pages and in our 2023 Sustainable Finance Impact

Report, we have raised $8.4 bill

ion of susta

inable liab

ies

developed markets, while 85 per cent of our $17.6 bill

ion

sustainable ﬁnance asset base is located in Asia, Africa and

the Middle East.

In 2023, we continued to expand and develop our Sustainable

Finance product suite, with 42 product variants as set out in

our Green and Sustainable Product Framework. Co-authored

with Morningstar Sustainalyt

ics – a lead

ing ESG data,

research and ratings ﬁrm – our framework is reviewed

annually to ensure that it reﬂects the latest markets trends

and industry standards.

Our pureplay clients are also key in advancing our progress

to achiev

ing our Susta

inable Finance goals. These are

companies that generate at least 90 per cent of their

revenues from activ

ies outlined in our Green and Sustainable

Product Framework. Their sign

iﬁcance l

ies in their abil

ity to

deliver credible and robust impact, driven by the inherent

green and socially sustainable nature of their business models

and operations.

Read more in our

Sustainable Finance Impact Report

sc.com/sﬁmpactreport

Sustainable Finance assets and Sustainab

ity-

Linked assets

Our Sustainable Finance income includes net income

generated from our green, social and sustainable lending

activ

ity, as well as from cl

ients recognised as green, social

or sustainable pureplays.

Our Sustainable Finance assets reﬂect the assets on our

balance sheet generated as a result of this green, social and

sustainable lending activ

ity, and

it is against these assets

which we raise sustainable liab

ies.

The Group’s Sustainable Finance asset base increased by

31 per cent to $17.6 bill

ion between September 2022 and

September 2023. The majority of our Susta

inable Finance

asset base ($13.6 bill

ion of the $17.6 b

ill

ion)

is made up of

lending to green projects such as renewable energy projects,

green commercial real estate and funding for the

development of rail projects.

Our social ﬁnance assets make up the remain

ing $3.5 b

ill

ion

of our total Sustainable Finance asset pool and encompasses

categories such as healthcare, education and access to

ﬁnance in low income countries.

100

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Green ﬁnance assets

1,2

Theme

Sep 2023

Sep 2022

SDGs

Clean Transportation

901

942

Electric vehicles (EVs)

197

EV battery manufacturers

372

307

Manufacturing of special

ised component parts of EVs

112

–

Rail

220

541

Climate Change Adaptation

–

Energy Efﬁciency

482

–

LED light

ing

–

Modernisat

ion of broadband network

475

–

Green Build

ings

8,742

7,014

Green build

ings

5,066

3,216

Mortgage portfolio HK

3,657

3,785

Mortgage portfolio TW/SG

Pollution Prevention and Control

102

Portfolio of Green Projects

351

–

Multiple

Renewable Energy

3,100

2,227

Grid expansion

102

Hybrid wind & solar

154

Hydropower

Manufacture of components for renewable energy technology

457

379

Solar

940

785

Waste to energy

166

111

Wind

1,178

714

Energy storage

–

Green hydrogen

–

Mixed renewables

110

–

Sustainable Water and Wastewater Management

–

Total Green Assets

13,594

10,295

Portfolio of green and social projects³

473

–

Multiple

Amounts included in the table are as of September 2023 and September 2022 and are aligned to the Group’s Sustainable Finance Impact Report available at

sc.com/sﬁmpactreport. September 2023 and 2022 ﬁgures have been prepared on the same basis as the Impact Report.

Values noted with a caret symbol (^) are subject to independent lim

ited assurance by EY, report ava

ilable at

sc.com/sustainab

ityhub

The underlying assets could potentially span across various categories, includ

ing renewable energy, susta

inable water and wastewater management, access to

essential services and food security. These assets, while included in the overall totals, remain unident

iﬁed

in terms of specif

ic green and soc

ial classif

icat

ion until

allocation reports are received.

101

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Social ﬁnance assets

1,2

Sep 2023

Sep 2022

SDGs

Access to water

COVID-19

–

Access to essential services

145

105

Education infrastructure – univers

ies

–

Healthcare infrastructure – hospitals

131

101

Provis

ion of support

ing healthcare-related products and services

Road infrastructure

Access to ﬁnance

3,062

2,930

SME lending

2,506

2,589

Microf

inance

555

341

Affordable basic infrastructure

198

–

Sewage treatment

–

Telecommunicat

ions/Internet connect

ity

197

–

Food security

–

Total Social Assets

3,545

3,173

Total Green and Social Finance Assets

17,612^

13,468

Sustainab

ity-Linked assets

1,2

Sep 2023

Sep 2022

Total Sustainab

ity-Linked loans

4,805

3,422

Total Sustainab

ity-Linked assets

4,805

3,422

Total Green and Social ﬁnance and Sustainab

ity-Linked assets

1,2,3

Sep 2023

Sep 2022

CCIB

17,103

10,505

CPBB

5,314

6,385

Sustainable liab

ies

1,2

Theme

Sep 2023

Sep 2022

Total bond issuances

2,353

2,083

Total sustainable term deposits

4,554

3,154

Total sustainable accounts

1,027

335

Total sustainable retail current and savings accounts and deposits

513

217

Total Sustainable Liab

ies

8,447^

5,789

Amounts included in the table are as of September 2023 and September 2022 and are aligned to the Group’s Sustainable Finance Impact Report available at

sc.com/sﬁmpactreport. September 2023 and 2022 ﬁgures have been prepared on the same basis as the Impact Report.

Values noted with a caret symbol (^) are subject to independent lim

ited assurance by EY, report ava

ilable at

sc.com/sustainab

ityhub

Our Sustainable Liab

ies are referenced aga

inst our Sustainable Assets held in aggregate by SCB Group. The features of our Sustainable Liab

ies products are

clearly signposted in product documentation to clients as ‘sustainable’.

See

sc.com/sﬁmpactreport

for more highl

ights on our Green and Soc

ial Finance assets in 2023.

CPBB sustainable invest

ing momentum

Sustainable invest

ing (SI) assets under management (AUM)

increased 25 per cent year-on-year to $13.3 bill

ion

in 2023, driven

by an expansion of the SI universe and focused client engagement. This ﬁgure includes Mutual Funds, Exchange Traded Funds,

Bonds, Equit

ies, and Structured Products. We w

ill look to disclose against advised sustainable AUM in future periods. For further

informat

ion on our Susta

inable Investments universe, refer to

sc.com/sustainable-invest

ing

102

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Environmental, social and climate

risk assessments are integrated into

credit decis

ion-mak

ing processes for

exist

ing and new-to-bank cl

ients

•

We mainta

in a su

ite of public

Posit

ion Statements that outl

ine the

Group’s environmental and social

expectations for provid

ing ﬁnancial

services to clients.²

•

Relationsh

ip Managers carry out

client and/or transaction level

Environmental and Social Risk

Assessments before we provide

ﬁnancial serv

ices.

•

Through client-level Climate Risk

Assessments (CRAs), we assess the

potential ﬁnanc

ial r

isks from climate

change using quantitat

ive and

qualitat

ive

informat

ion and ass

ign

a Climate Risk grading.

•

As part of the CRA process, a Credible

Transit

ion Plan (CTP) score

assigned for each client in high-

emitt

ing sectors.

•

Our Prohib

ited Act

ies list details

the activ

ies that we will not ﬁnance.

Portfolio-level emiss

ions are

calculated to set and monitor

ﬁnanced emiss

ions basel

ines and

sectoral 2030 targets

•

Client-level emiss

ion

intens

ies are

modelled in accordance with

internat

ionally accepted carbon

accounting princ

iples us

ing the

PCAF methodology.

•

Science-based sectoral inter

im 2030

targets are set for high-emitt

ing

sectors in line with the Group’s

roadmap towards net zero ﬁnanced

emiss

ions by 2050.

•

Industry or client coverage leads are

appointed as responsible owners of

sectoral net zero targets.

•

Divergence from portfolio-level

emiss

ion pathway

is monitored and

reviewed quarterly along with our

exposure to clients associated with

high Climate Risk.

Products, ﬁnancing and adv

isory

services are deployed to support

clients transit

ion

ing their businesses

and seeking to achieve their

sustainab

ity goals

•

The Group’s ESG and Transit

ion

Finance advisory teams prior

ise

engagements with clients associated

with high Climate Risk with weak

or no transit

ion plans and/or

insuff

ient disclosures to

recommend enhancements.

•

Sustainab

ity considerat

ions are

incorporated into account plans and

engagement strategies with an aim

to ident

ify and pr

ior

ise clients that

are divergent from portfolio-level

emiss

ion pathways or assoc

iated

with high Environmental and

Social Risk.

•

We endeavour to support and

guide our clients to a low-carbon

pathway by util

ing our full suite

of Sustainable Finance solutions.

•

We continue to increase our

ﬁnancing of low-carbon technolog

ies

and infrastructure includ

ing project

ﬁnancing

in the developing world

where power grid modernisat

ion

is crit

ical.

1. Client-level Risk analysis

2. Portfolio Steering

3. Sustainable and transit

ion

ﬁnance opportunit

ies

The CSO organisat

ion a

ims to act as a catalyst for change

and a centre of excellence. We foster collaboration internally

to embed sustainab

ity across our business operations and

functions. We collaborate externally with clients and other

stakeholders who are aligned with our miss

ion to dr

ive

change. This is achieved by:

•

People – Rolling out an expanding curriculum of

sustainab

ity- and climate-related train

ing across the

Group.

•

Processes – Integrating our 2030 sectoral net zero targets

into our credit risk appetite and capital allocation processes,

allowing us to track, monitor and continually assess

progress against our targets.

•

Technology – Investing to build a robust single-source data

architecture to facil

itate engagement w

ith our clients,

includ

ing automated or sem

i-automated tools that will

support decis

ion-mak

ing and analysis of the expected

impact of a transaction on the Group’s ﬁnanced emiss

ions.

We aim to create a self-reinforc

ing cycle, wh

ich is built on

established processes, clear frameworks, engagement with

our clients and collaboration across risk and business teams.

We support our clients to deliver on their decarbonisat

ion

plans, deploying ﬁnanc

ing and adv

isory services to provide

capital alongside the next wave of sustainab

ity and

technological solutions in which our clients are invest

ing.

Our transit

ion strategy also bu

ilds on the Group’s ﬁnanc

ing

experience by supporting the early adopters of these services

in the US and Europe, and leveraging this knowledge in our

core markets across Asia, Africa and the Middle East. Our aim

is to work with our clients to support their transit

ion and

decarbonisat

ion journeys and where cl

ients evidence

transit

ion, help to accelerate progress.

Pillar 2: Further embed sustainab

ity across the organisat

ion

Refers to applicable banking clients, please refer to

sc.com/esriskframework

Read more about our sectoral inter

im 2030 targets

in this Annual Report on

page 74.

In 2023, this commenced for the Oil and Gas, Power, Steel, Alumin

ium and

Automotive Manufacturers sectors, with the rest of the sectoral reviews to be

added from 2024.

Sustainable and

transit

ion ﬁnance

opportunit

ies

Client-level

risk analysis

Portfolio

Steering

103

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Education and train

ing

We continued to build the Group-wide sustainab

ity-related

education and train

ing programme. The overarch

ing

objective of our upsk

ill

ing programme

is to establish

foundational knowledge on sustainab

ity across the Group,

while tailor

ing

in-depth, capabil

ity-based curr

icula to cater

to the needs of practit

ioners and susta

ing the momentum

in continuous learning in line with industry best practices.

This object

ive

is achieved by the continued development of

our in-house sustainab

ity curricula and partnerships with

leading academic inst

itut

ions, includ

ing Imper

ial College

London and Kite Climate School, to ensure that we beneﬁt

from cutting-edge expertise in sustainab

ity and remain at

the forefront of industry development. A tiered curriculum

has been rolled out leveraging both in-house and external

expertise via this two-pronged approach.

•

Given the role that the Board plays in sustainab

ity

governance, the Group Board and subsid

iary Boards

received train

ing on cl

imate scenarios, with a focus on

regulatory expectations, key features of industry-level

climate scenarios, in-house base and tail risk scenarios

and key second-order impacts from climate change.

•

In addit

ion, 154 country and reg

ional CEOs and Heads of

Business jo

ined targeted tra

ing cover

ing the energy

transit

ion and related ﬁnancing opportun

ies, clean

technology, and sustainab

ity-related risks and regulation.

•

Bespoke train

ing has been prov

ided to clusters of

practit

ioners across all l

ines of defence, ranging from CCIB,

CPBB, Risk, CFCC and Audit on a broad range of topics:

from how physical and transit

ion r

isks may manifest, to

special

ised top

ics around how climate stress tests are

conducted and how we embed Climate Risk into Credit

Risk processes.

•

At a foundational level, we encourage all employees across

our global footprint to improve their understanding on how

we embed sustainab

ity into our business, operations and

communit

ies, and how they can act

ively play their part in

this journey. 4,870 colleagues completed this programme in

2023, a total of 20,436 colleagues since the launch in 2022.

•

To further embed sustainab

ity and continuous learning

into the Group’s day-to-day operations, 48 ad-hoc train

ing

courses were also held throughout the year that reached

3,369 employees, covering specif

ic learn

ing needs and

topics, includ

ing the Group’s progress related to sectoral

net zero target setting, sector-specif

ic voluntary carbon

markets and Sustainable Finance products and related

governance.

In 2024, we plan to further reﬁne the programmes to target

specif

ic roles

in the Group and further build knowledge and

expertise in Sustainable Finance and Environmental and

Social Risk Management.

104

Standard Chartered

– Annual Report 2023

Our net zero roadmap

We aim to reach net zero carbon emiss

ions

in our ﬁnanc

ing act

ity by 2050 and

in our own

operations by 2025. We made progress in setting inter

im 2030 targets for the most

carbon-intens

ive and h

ighest-emitt

ing sectors

in the Group’s portfolio.

To help us remain on track, we have set short- and medium-term object

ives and quant

iable targets

to manage and report on our progress on an annual basis.

2021

Launched our roadmap to net zero

by 2050, includ

ing

inter

im targets and

a supporting methodology

Announced plans to mobil

ise

$300 bill

ion

in Sustainable Finance by 2030

Published our inaugural

Transit

ion F

inance Framework

205

Aim to become net zero in our ﬁnanced emiss

ions

2022

•

Developed ﬁnanced emiss

ions basel

ines and

2030 targets for the Aviat

ion, Sh

ipp

ing and

Automotive Manufacturers sectors

•

Joined Partnership for Carbon Accounting

Financ

ials (PCAF)

2024

•

We will develop an inter

im 2030 ﬁnanced em

iss

ions

target for the Agriculture sector, planned to be

communicated in our 2024 Annual Report, which will

be published in Q1 2025

•

Aim to set targets for facil

itated em

iss

ions

2025

•

Aim to be net zero in our own operations

2032

•

Targeted end date for legacy direct Thermal

Coal Min

ing ﬁnancing globally

•

203

We will have substantially reduced our

exposure to the Thermal Coal Min

ing sector

in line with our Posit

ion Statements

Aim to meet the Group’s ﬁnanced emiss

ions

inter

im targets set for h

igh-emitt

ing sectors

•

104

Standard Chartered

– Annual Report 2023

Sustainab

ity review

•

2023

Announced our enhanced Oil and Gas absolute

ﬁnanced emiss

ions target

Updated our Power and Steel sector baselines and

targets moving from a revenue-based intens

ity metr

ic to

a production-based intens

ity metr

Developed ﬁnanced emiss

ions basel

ines and set inter

2030 targets for four addit

ional sectors: Cement,

Alumin

ium, Res

ident

ial Mortgages, Commerc

ial Real

Estate, bring

ing the total number of sc

ience-based

targets set for high-emitt

ing sectors to eleven

Financed emiss

ions basel

ines and sectoral progress

against targets, where ind

icated, assured for the

ﬁrst time by Ernst & Young

Calculated the Group’s facil

itated em

iss

ions basel

ine

from debt capital markets following the ﬁnal PCAF

guidance (published in December 2023) under both the

33 per cent and 100 per cent weight

ing factor

Updated the Group’s net zero methodological

white paper, ﬁrst published in 2021

105

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Pillar 3: Deliver on our annual milestones set forth in our net zero roadmap

Our emiss

ion sources

We aim to reach net zero carbon emiss

ions

in our ﬁnanced emiss

ions by 2050 and

in our own operations by 2025. Since 2018 we

have been working to align our direct and ind

irect em

iss

ions to the Par

is Agreement’s goal of well below two degrees Celsius of

global warming by the end of the century. We focus on three areas to reduce emiss

ions: our operat

ions, our supply chain, and

ﬁnanced emiss

ions assoc

iated with our clients.

To access the Group’s updated ‘Net zero methodological white paper – The journey continues’ publicat

ion, v

sc.com/sustainab

ityhub

Scopes of GHG emiss

ions

2023⁴

(tCO

2022

(tCO

2021

(tCO

Scope 1 emiss

ions¹

8,488

2,071

2,902

Scope 2 emiss

ions

26,246

47,363

82,761

Total Scope 1 and 2 emiss

ions

34,734

49,434

85,663

Scope 3 emiss

ions:

Category 1: Purchased goods

and services (other)

286,304

380,732

330,224

Category 1: Purchased goods

and services (data centres)

4,431

7,060

43,132

Category 2: Capital goods

42,707

34,496

47,217

Category 4: Upstream

transportation and

distr

ibut

ion

24,125

20,300

20,949

Category 5: Waste generated

in operations

520

747

Category 6: Business travel

(air travel)

60,279

39,107

3,654

Category 6: Business travel

(miscellaneous other than

air travel)

8,918

2,654

4,994

Category 7: Employee

commuting

71,228

61,917

Category 13: Downstream

leased assets (real estate)

7,898

8,594

Category 15: Investments

7,8

41,944,000

49,512,000 45,200,000

Total Scope 3 emiss

ions

42,450,410

50,067,607

45,650,190

Total emiss

ions

42,485,144

50,117,041

45,735,853

As we aim to improve our emiss

ions measurement and report

ing year-on-

year, we have included fugit

ive em

iss

ions

in our Scope 1 ﬁgures for the ﬁrst

time in 2023: 5,266 tCO

e. Prior year data was not available for fugit

ive

emiss

ions. For more

informat

ion on the methodology and assumpt

ions used

to calculate GHG emiss

ions, please refer to the Env

ironmental Reporting

Criter

ia at sc.com/susta

inab

ityhub.

Scope 2 ind

irect em

iss

ions

include ind

irect em

iss

ions from purchased

electric

ity measured under the market-based approach as set out

in the

GHG protocol.

Our Scope 1 and 2 emiss

ions calculat

ions for the most recent reporting year

were independently assured by Global Documentation Ltd., the assurance

scope excluded fugit

ive em

iss

ions. Market-based em

iss

ions have decreased

from 2022 to 2023 due to footprint reduction, efﬁc

iency ga

ins and the

purchase of addit

ional energy attr

ibut

ion cert

icates by the Group.

The reporting period for GHG emiss

ions

is 1 October to 30 September. This

only differs for Category 1: Purchased Goods (other); Category 2: Capital

goods; Category 4: Upstream transportation and distr

ibut

ion; Category 6:

Business travel (miscellaneous other than air travel) and Category 15:

Investments where a period of 1 January to 31 December is used. Emiss

ions

data for these categories is also on a one-year lag with emiss

ions reported

2023 based on 2022 emiss

ions data.

Purchased goods and services (data centres) have been restated from

706tCO

e to 7,060tCO

e due to an error in converting the unit of emiss

ions.

Waste emiss

ions have been restated from 498tCO

e to 747tCO

e due to an

out of date emiss

ions factor be

ing used in prior year.

Category 15: Investments only includes ﬁnanced emiss

ions and are measured

on a one-year lag, with emiss

ions reported

in 2023 being based on 2022

emiss

ions and ﬁnancial data. F

inanced emiss

ions are

included on page 110.

A facil

itated em

iss

ions basel

ine was measured for the ﬁrst time during the

year. Refer to page 112 for more details.

2022 absolute emiss

ions have been restated from 58.5MtCO

e to

49.5MtCO

e. This is due to (i) reduction in shipp

ing absolute em

iss

ions as

improved data has resulted in ind

idual ship-level fair values being obtained;

i) paus

ing of aviat

ion em

iss

ions report

ing due to the sale of the Group’s

aviat

ion leas

ing and lending business; (i

i) decreases in Automotive

Manufacturers’ emiss

ions due to changes

in the industry emiss

ions report

ing

methodology referenced earlier on page 95; (iv) decreases in emiss

ions from

the ‘Others’ sector where improved data has been obtained to calculate

emiss

ions; and (v) the sectoral basel

ing of em

iss

ions report

ing for Cement

and Commercial Real Estate as separate high-emitt

ing sectors.

Operational emiss

ions: 0.1% (0.03 MtCO

Scope 1 and 2

Value chain emiss

ions: 1.2% (0.5 MtCO

Scope 3 Categories 1–14

Investments: 98.7% (41.94 MtCO

Scope 3 Category 15

Emiss

ions from the combust

ion of fuels in owned or controlled

sources e.g. boilers, generators and vehicles, refrigerat

ion and

air condit

ion

ing equipment and the purchase of electric

ity

Emiss

ions from our upstream and downstream

supply and value chain

Emiss

ions from transact

ing with our clients

Purchased goods

and services

Generators and

fossil fuel burners

Waste

generated in

operations

Capital

goods

Fugit

ive

emiss

ions

Business

travel

Upstream

transportation

and distr

ibut

ion

Purchase of

electric

ity

Employee

commuting

Down and

upstream

leased assets

Financed emiss

ions

42.5

MtCO

106

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Our operations

Our approach to managing our environmental footprint

The Group’s Property function is responsible for driv

ing

efﬁciency

in terms of our space and energy use. In line with the

Group’s operational net zero target, we set year-on-year

improvement targets for our footprint markets.

Our goals and targets

•

We aim to achieve net zero in our operations by 2025. We

have measured and reduced our Scope 1 and 2 GHG

emiss

ions s

ince 2008 and have been targeting a 90 per cent

reduction in these emiss

ions s

ince 2018.

•

The Group joined RE100

in 2022, a global corporate

renewable energy in

iat

ive br

ing

ing together bus

inesses

that are committed to 100 per cent renewable electric

ity.

•

In terms of waste, we aim to achieve 90 per cent avoidance

of landﬁll by 2030.

Operational emiss

ions

We reduced our Scope 1 and 2 emiss

ions by 30 per cent to

34,734 tonnes during 2023. Our measured real estate

decreased by 7 per cent during this time. 66 per cent of

electric

ity came from renewable sources across our portfol

io.

We were able to achieve this by:

•

continu

ing to opt

ise our ofﬁce and branch network by

retir

ing unused or

ineff

ient space and creating a working

environment that matches ofﬁce- and hybrid-working

patterns of our workforce;

•

having a rolling asset replacement strategy for major

plant and light

ing

in our ofﬁces. The Group installs LED

and circad

ian l

ight

ing, and energy efﬁcient mater

ials

throughout all new projects;

•

launching a large-scale in

iat

ive

in 2023 to simpl

ify our

technology estate, decommiss

ion

ing underutil

ised or

ineff

ient systems and their servers;

•

actively seeking to increase the proportion of our electric

ity

usage that comes from renewable sources. These can take

the form of power purchase agreements, clean energy

contracts, on-site solar installat

ions and renewable energy

certif

icates; and

•

purchasing and retir

ing carbon cred

its for our residual

operational Scope 1 and 2 emiss

ions.

Waste

In 2023, we reduced our overall waste by 37 per cent and

achieved 52 per cent avoidance of landﬁll (up from

31 per cent). We were able to achieve this by:

•

commencing the externally verif

ied True Zero Waste (TZW)

programme and seeing the ﬁrst results in India and Poland,

both achiev

ing TZW Plat

inum certif

icat

ion;

•

self-certify

ing 313 bu

ild

ings across our portfol

io being

free of single-use plastic in 2023. We aim to continue

this programme and promote more sustainable waste

management practices; and

•

min

ing electron

ic waste by prolonging the lifespan

of our technology assets through partnerships with

third parties.

Water

We retained a water efﬁc

iency metr

ic of less than 0.5 kilol

itre

per square metre in 2023 despite an increase in the proportion

of our employees returning to the ofﬁce. While water

availab

ity is a growing challenge in many of our markets,

we did not face any issues sourcing potable water in 2023.

We continue to take a responsible approach to managing

water use across the Group.

For detailed environmental performance data see

page 505

or our ESG data pack at

sc.com/esg-data-pack

Read the princ

iples and methodology for measur

ing our environment

data at

sc.com/environmentcriter

Read the independent assurance statement related to Scope 1 and 2

GHG emiss

ions at

sc.com/environmentalassurance

107

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Our suppliers

Our approach to managing impacts in our upstream

value chain

The Supply Chain Management team with

in our Group

Chief Financ

ial Ofﬁcer funct

ion provides procurement

services internally to drive sustainab

ity, risk mit

igat

ion and

commercial advantages in third-party engagements. In line

with the Group’s sustainab

ity agenda, we set long-term

targets to decrease emiss

ions assoc

iated with our supply

chain and increase spend with diverse suppliers across

our footprint.

With 11,563 suppliers, we recognise our contribut

ion to cl

imate

impacts through the goods and services we procure. Severe

weather events could result in material disrupt

ions to our

supply chain that may potentially impact our abil

ity to serve

our clients. As such, we are working to gather site locations for

our material suppliers to assess their physical risk exposures,

such that suitable continu

ity plans can be developed.

Our goals and targets

•

We targeted a 28 per cent reduction in our emiss

ions

associated with air travel from our 2019 baseline of

94,000 tCO

e by the end of 2023 and managed to exceed

this target.

•

We aim to increase the breadth of our climate-related

engagement with our suppliers. By 2028 we plan to direct

70 per cent of our total spending to suppliers who have

set or committed to setting science-based emiss

ion

reduction targets.

Supply chain-related emiss

ions

•

Overall, our emiss

ions assoc

iated with the products,

services and equipment that we purchase and those

related to business travel – Scope 3 Categories 1, 2, 4 and 6

(miscellaneous other than air travel) – have shown an

estimated 17 per cent year-on-year reduction.

•

We have reduced our air travel emiss

ions from our 2019

baseline of 94,000 to 60,279 tCO

e. Due to increased travel

post COVID-19 we have seen an increase in our emiss

ions

associated with air travel in 2023. Nonetheless, the

Group was able to exceed our target and managed to

reduce these emiss

ions by 36 per cent from our basel

ine.

To ensure a downward trajectory from our baseline, we

are implement

ing demand and control measures

includ

ing

upgrading how we monitor our travel volumes. To help

inﬂuence behaviours, we implemented a process to charge

the price of carbon credits to departmental expense

budgets, while also emphasis

ing the need to reduce

emiss

ions and avo

id any non-essential business trips.

•

We aim to engage and work with technology partners that

are committed to reducing their emiss

ions

in line with their

science-based targets.

•

Carbon credits were purchased and retired by the Group

for select categories of our value chain emiss

ions. In 2023,

these included emiss

ions assoc

iated with air travel and

outsourced on-premise data centres.

Supplier engagement

Emiss

ions data report

ing among our suppliers remains

lim

ited. Therefore, we cont

inue to use a hybrid methodology

for emiss

ions calculat

ions using supplier-specif

ic spend and

sector average emiss

ions data. In 2023, we:

•

continued our outreach to suppliers to collect emiss

ions

data directly from them, thereby improv

ing the accuracy

of our Scope 3 Categories 1, 2, 4 and 6 (miscellaneous other

than air travel) emiss

ions calculat

ions and reporting;

•

began measuring our spending with suppliers who have set

a science-based emiss

ions reduct

ion target or committed

to setting one in the future. In 2023, we held working

sessions with our suppliers to discuss progress against their

plans and further opportunit

ies for em

iss

ions reduct

ion; and

•

joined forces w

ith our key logist

ics partner DHL to co-

invest

in sustainable aviat

ion fuel for all cons

ignments globally

through DHL’s GoGreen Plus programme, which is an

example of how we work with suppliers to support the

Group’s emiss

ion reduct

ions goals.

Supplier Charter

Through our Supplier Charter, we expect our suppliers to

support and promote environmental protection, and to

comply with local environmental laws and regulations.

We expect our suppliers to promote the development and

distr

ibut

ion of environmentally-friendly technologies and

manage environmental concerns in their own supply chains.

Our Supplier Charter can be viewed at

sc.com/suppliercharter

For further informat

ion on how we engage w

ith suppliers see

page 157

and for supplier spend data see

page 507

108

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Our clients – Reducing our ﬁnanced emiss

ions

The majority of our GHG em

iss

ions are l

inked to our lending

activ

ies, known as ﬁnanced emiss

ions. Therefore, we have

prior

ised our efforts in the highest-emitt

ing and most

carbon-intens

ive sectors of our portfol

io, and where working

with our clients can have the greatest impact.

A brief summary of the movements in the eleven high-

emitt

ing sectors

is as follows:

Alumin

ium

sector emiss

ions have trended down as the

power supply into the smelters has become less carbon-

intens

ive and the Group has funded cl

ients with less emiss

ion

intens

ive operat

ions.

The physical intens

ity of the

Automotive Manufacturers

sector decreased slightly due to the Group having a larger

exposure to zero tailp

ipe Electr

ic Vehicle manufacturing

with

in the Group’s Automot

ive Manufacturers portfolio.

The physical intens

ity of the

Cement

sector has remained

relatively consistent year-on-year. This will be a hard-to-abate

sector in the medium-term until cleaner energy sources are

util

ised, espec

ially in emerging markets.

In the

Commercial Real Estate

portfolio, build

ing

intens

ies

have fallen due to investment in regions with lower emiss

ions

power supplies and certain markets’ power suppliers

decarbonis

ing. We cont

inue to work with technology

providers on solutions for ind

idual build

ing em

iss

ions

measurement and management.

Absolute

Oil and Gas

emiss

ions rema

ined relatively

stable year-on-year and are sign

iﬁcantly lower versus the

baseline year. We continued to pursue overall portfolio

decarbonisat

ion, p

ivot

ing exposure to counterpart

ies and

technologies that are less carbon-intens

ive.

The

Power

sector’s intens

ity decreased as some of our

contractual obligat

ions to coal-ﬁred power plants have

ended. We also actively pursued lower emiss

ions technolog

ies

includ

ing new gas power plants, and expanded our

renewables ﬁnancing.

The emiss

ions

intens

ity of the

Resident

ial Mortgages

sector

has remained consistent year-on-year and will decrease over

time in line with electric

ity gr

id decarbonisat

ion.

The

Shipp

ing

sector’s alignment delta has worsened due

to the impact from the container sector, which enjoyed very

strong proﬁts in 2022, encouraging owners to sail faster,

leading to higher emiss

ions. Look

ing ahead, tighten

ing

environmental regulations and mechanisms from both

the IMO and EU are expected to lead to better alignment

between shipowners’ behaviours and the Group’s

2030 targets.

The

Steel

sector is hard-to-abate and requires sign

iﬁcant

capital to decarbonise. Decarbonisat

ion

is reliant on the shift

from blast to electric arc furnaces and many of our emerging

markets are at early stages of their transit

ion journeys. Wh

ile

the emiss

ions

intens

ity of our steel book rema

ined relatively

unchanged year-on-year, we are actively working with our

clients in this sector to support their transit

ion.

Our

Thermal Coal Min

ing

exposure is decreasing in line

with our coal revenue thresholds as detailed in our Posit

ion

Statements and related contractual commitments.

No new Thermal Coal Min

ing use of proceeds loans have

been provided in line with our Posit

ion Statements.

The Group completed the sale of its global

Aviat

ion

ﬁnance

leasing business and the major

ity of

its aviat

ion lend

ing book

in August 2023. Noting the distort

ive effects that the sale of

this business would create in our emiss

ions proﬁle, the progress

against this target has been paused for year–end 2023.

This will be re-assessed based on the size and material

ity

of the remain

ing portfol

io in 2024.

For further informat

ion, please refer to the Group’s ‘Net zero

methodological white paper – The journey continues’ via

sc.com/sustainab

ityhub

109

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Sectors included in ﬁnanced emiss

ions calculat

ions

Included in analysis

2021

2022

2023

2024

Setting science-based targets

The Group set inter

im 2030 ﬁnanced em

iss

ions targets for

11 of the 12 high-emitt

ing sectors w

ith Agriculture being the

planned for 2024.

We follow the Net-Zero Banking Alliance (NZBA) guidance

on sectors for target-setting, further expanding the

Transport sector into Automotive Manufacturers, Aviat

ion

and Shipp

ing.

We set four sectoral targets and updated three targets in

2023. All targets have been informed by what the Group

considers pre-eminent scient

iﬁc forward-look

ing scenario

providers. This includes the International Energy Agency

(IEA) for energy sectors, the Miss

ion Poss

ible Partnership

(MPP) for metals, International Marit

ime Organ

izat

ion

(IMO) for shipp

ing and Carbon R

isk Real Estate Monitor

(CRREM) for the resident

ial real estate sector.

For our Scope 3 Financed Emiss

ions, we set sc

ience-based

targets accounting for differ

ing states of trans

ion

readiness across our markets. Due to our footprint – with

many emerging markets reliant on carbon-intens

ive

industr

ies – our ﬁnanced em

iss

ions may

increase before

they decrease. The upper end of our 2030 target may

represent low-overshoot scenarios. However, our approach

is to remain aligned to a science-based 1.5 degrees Celsius

scient

iﬁc pathway by 2050. G

iven our science-based

approach, we will strive to update our targets both as the

scient

iﬁc commun

ity updates their reference scenarios and

as data availab

ity improves.

In 2023, the Group:

•

Strengthened our Oil and Gas emiss

ions metr

ic from

a revenue-based intens

ity to an absolute ﬁnanced

emiss

ions target and trajectory. Th

is places an emiss

ions

budget on the sector and requires a reduction of 29 per

cent by 2030 when calculated from a 2020 baseline,

aligned with the IEA’s NZE trajectory. Our approach

ensures we mainta

in a d

irect link to absolute GHG

emiss

ions

in the Oil and Gas sector and allows us to

directly assess our progress with the IEA NZE scenario

that we have set our target against. By moving away

from a revenue-based intens

ity we remove an element of

ﬁnancial volat

ity and complex

ity from our calculations

that could restrict transparency and accountabil

ity

measuring and disclos

ing our ﬁnanced GHG em

iss

ions.

Oil and Gas is the second sector for which the Group set

an absolute ﬁnanced emiss

ion target,

in addit

ion to our

target for Thermal Coal Min

ing.

•

Updated our Power and Steel sector targets from a

revenue-based intens

ity metr

ic to a production-based

intens

ity metr

ic (i.e., emiss

ion

intens

ity per un

it of

production). The progression from an economic-based

intens

ity to a product

ion/physical-based intens

ity reduces

the ﬁnancial volat

ity

in the calculation and improves the

connection to clients’ actual GHG emiss

ions by l

ink

ing

directly to units of production, or a physical activ

ity.

We published the second edit

ion of the Group’s ‘Net zero

methodological white paper – The journey continues’, which

sets out the methodology, assumptions and scient

iﬁc

pathways for each high-emitt

ing sector and

is available

via

sc.com/sustainab

ityhub

Thermal

Coal Min

ing

Agriculture

Commercial

Real Estate

Resident

ial

Mortgages

Alumin

ium

Cement

Steel

Oil and Gas

Power

Automotive

Manufacturers

Shipp

ing

Aviat

ion

2030 ﬁnanced

emiss

ions targets

110

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Detailed progress against our sectoral ﬁnanced emiss

ions targets

12,13,16

2022

2021

Baseline

year

Sector

2022

Exposure in

scope ($bn)

Target

Absolute

emiss

ions

(MtCO

Physical

intens

ity

Absolute

emiss

ions

(MtCO

Physical

intens

ity

% change

cumulative

to baseline

Year

target set

CCIB

Alumin

ium

2,4

0.2

6.1 t CO

tonne

Alumin

ium

(–)

0.3

4.59^ tCO

tonne

Alumin

ium

0.6

5.62^

tCO

e/ tonne

Alumin

ium

2021

-18%

2023

Automotive

Manufacturers

2.8

66–100

gCO

/Vkm

(44-63%)

2.8

165^

gCO

/Vkm

3.3

178^

gCO

/Vkm

2021

-7%

2022

Cement

0.9

0.52 tCO

tonne Cement

(22%)

3.5

0.66^

tCO

/tonne

Cement

2.4

0.67^

tCO

/tonne

Cement

2021

-1%

2023

Commercial

Real Estate

4.8

19–39 kgCO

Sq.m

(47-74%)

0.1

62^

kgCO

e/Sq.m

0.1

73^

kgCO

e/Sq.m

2021

-15%

2023

Oil and Gas

5, 14

6.8

9.3 MtCO

(29%)

10.3^

10.2^

2020

-21%

2023

Others

2,6

59.3

12.6

19.6

2021

Power

5.3

0.17–0.28

tCO

/MWh

(46-67%)

5.9

0.47^

tCO

/MWh

6.6

0.52^

tCO

/MWh

2021

-10%

2023

Shipp

ing

4.1

0% delta

2.8

+6.4%^ delta

+11.8%^ delta

+16% ^ delta

2.5

+2.6%^ delta

+7.3%^ delta

+10% ^ delta

2021

+4.5%

2022

Steel

1.3

1.4–1.6 tCO

tonne Steel

(22-32%)

2.0

1.97^

tCO

tonne Steel

1.9

2.06^

tCO

/tonne

Steel

2021

-4%

2023

Thermal Coal Min

ing

0.04

0.5 MtCO

(85%)

1.6^

2.3^

2020

-52%

2021

85.5

41.9

49.5

CPBB

Resident

ial

Mortgages

4,8

74.3

29–32

kgCO

e/Sq.m

(15-23%)

0.04

37.7^

kgCO

e/Sq.m

0.04

37.6^

kgCO

e/Sq.m

2021

2023

74.3

0.04

Total CCIB and CPBB

159.8

41.9

49.5

Due to third-party data sets that feed into our calculations, the Group’s

reported ﬁnanced emiss

ions ﬁgures have a one-year lag. The Group reports

on 2022 and 2021 data in this 2023 Annual Report.

During the year a sector-specif

ic deep d

ive was performed on Alumin

ium as

the majority of the ‘Other Metals and M

ing’ sector reported

in the prior year

was lending to Alumin

ium cl

ients. Due to this the sector has been

disaggregated from the ‘Other Metals and Min

ing’ sector we reported

in the

prior year. The remainder of the ‘Other Metals and Min

ing’ sector has been

included in the ‘Others’ category.

Automotive Manufacturers has been re-baselined during the year. This was

due to an update in methodology from the industry’s progress in adopting a

test procedure that better reﬂects driv

ing cond

ions

in the real world.

Cement, Commercial Real Estate, Resident

ial Mortgages and Alum

ium are

new sectors reported for the ﬁrst time this reporting cycle. Two reporting cycles

have been calculated and disclosed includ

ing a basel

ine and current year

progression value.

During the year the Group has re-baselined the Oil and Gas sector from a

revenue intens

ity to

an absolute emiss

ions metr

ic, addit

ionally the absolute

baseline was revised from 13.7 to 13.1 due to a methodology reﬁnement. Power

and Steel have been re-baselined from a revenue intens

ity to a product

ion

intens

ity metr

ic.

Others includes miscellaneous non-specif

ic h

igh-emitt

ing sectors not

included

in a sector deep dive.

Following revis

ions to the IMO decarbon

isat

ion strategy, Pose

idon Princ

iples

have replaced the in

ial TtW (tank to wake) delta with two addit

ional GHG

strategy scenarios. The Group has disclosed the alignment deltas for the

IMO exist

ing strategy, IMO rev

ised min

imum and the IMO str

ing scenar

ios

above in that order. The Group’s baseline has been set as the IMO revised

min

imum strategy.

The Group has set its Resident

ial Mortgage target range at the most amb

ious

end of the public commitments made by governments and power companies

in the countries where we operate and has been benchmarked to the CRREM

scient

iﬁc pathway.

2021 Absolute emiss

ions have been restated from 58.5MtCO

e to 49.5MtCO

This is due to: (i) reduction in shipp

ing absolute em

iss

ions as

improved data

has resulted in ind

idual ship-level fair values being obtained; (i

i) paus

ing of

aviat

ion em

iss

ions report

ing due to the sale of the Group’s aviat

ion leas

ing and

lending business; (i

i) decreases in Automotive Manufacturers’ emiss

ions due to

changes in the industry emiss

ions report

ing methodology referenced earlier;

(iv) decreases in emiss

ions from the ‘Others’ sector where

improved data

has been obtained to calculate emiss

ions; and (v) the sectoral basel

ing of

emiss

ions report

ing for the Cement and Commercial Real Estate as separate

high-emitt

ing sectors.

10 Value is not required as the Group has not set a target for the ‘Others’ sector.

Value is not required as the Group has set an absolute emiss

ions target and

therefore the production intens

ity of the portfol

io has not been measured.

12 Values noted with a caret symbol (^) are subject to independent lim

ited

assurance by EY, report available at

sc.com/sustainab

ityhub

13 Emiss

ions are calculated

in CO

except where other GHGs are material which

are noted as CO

e (this includes Oil and Gas, Coal, Alumin

ium, CRE, Sh

ipp

ing

and Resident

ial Mortgages).

14 Of the cumulative movement of -21%, there was a 1% increase in emiss

ions

between 2021 and 2022.

15 Of the cumulative movement of -52%, there was a 30% decrease in emiss

ions

between 2021 and 2022.

16 For further informat

ion, please refer to our ‘Net zero methodolog

ical white

paper – The journey continues’ publicat

ion v

sc.com/sustainab

ityhub

111

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Our approach to measuring ﬁnanced emiss

ions

Sector

Emiss

ions

approach

Scenario

Value chain

Scope of

emiss

ions

2022

PCAF

score

2021

PCAF

score

In scope

exposure

coverage

CCIB

Alumin

ium

Production

intens

ity

MPP STS

Alumin

ium producers

1, 2

2.4

2.2

100%

Automotive

Manufacturers

Physical

intens

ity

IEA APS and NZE

Automotive manufacturers

1,2

2.2¹

2.4¹

100%

Cement

Production

intens

ity

IEA NZE

Clinker and

cement manufacturing

1, 2

2.3

2.9

100%

Commercial

Real Estate

Physical

intens

ity

IEA APS and NZE

Real estate leasing

1, 2

99%

Oil and Gas

Absolute

emiss

ions

IEA NZE

Upstream, midstream and

downstream

1,2

3.2

97%

3.2

3.5

Others

Absolute

emiss

ions

IEA NZE

Other sectors

1,2

3.3

86%

Power

Production

intens

ity

IEA APS and NZE

Electric

ity Generat

ion &

Distr

ibut

ion

1, 2

3.3

3.2

100%

Shipp

ing

Physical

intens

ity

IMO exist

ing, IMO

rev. min. IMO striv

ing

Shipp

ing lessors and

companies

1, 3

99%

Steel

Production

intens

ity

MPP TM

Steel producers

1, 2

3.8

3.7

98%

Thermal Coal Min

ing

Absolute

emiss

ions

IEA NZE

Thermal coal

1,2

3.7

3.8

100%

CPBB

Resident

ial

Mortgages

Physical

intens

ity

CRREM

Resident

ial households

1, 2

4.4

100%

Sector emiss

ions for mater

ial Scope 3 high-emitt

ing sectors

2022

2021

Sector

Scope 1,2

Scope 3

Scope 1,2

Scope 3

Automotive Manufacturers

0.1

2.7

0.1

3.2

Oil and Gas

1.7

8.6

1.3

8.9

Thermal Coal Min

ing

0.1

1.5

0.1

2.2

PCAF score for Scope 1 and 2 emiss

ions.

PCAF score for Scope 3 emiss

ions.

In scope coverage remained consistent from 2021 to 2022 improv

ing from 87% to 90% on CCIB ﬁnancing.

For further informat

ion, please refer to our ‘Net zero methodolog

ical white paper – The journey continues’ publicat

ion v

sc.com/sustainab

ityhub

112

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Facil

itated em

iss

ions

During 2022, Standard Chartered jo

ined the Partnersh

ip for Carbon Accounting Financ

ials (PCAF) to support the

development of a methodology to measure facil

itated em

iss

ions assoc

iated with the arranging of capital markets issuances.

PCAF recognises that capital market facil

itat

ion is essential for the climate transit

ion. Therefore, th

is year we are expanding our

reporting to cover facil

itated em

iss

ions assoc

iated with our debt capital markets services. In line with PCAF recommendations,

we are reporting our facil

itated em

iss

ions separately from ﬁnanced em

iss

ions due to the

inherent difference in the underlying

nature of these activ

ies. The Group is reporting its baseline facil

itated em

iss

ions under the 33% we

ight

ing factor

in line with

PCAF guidance, noting that facil

itated em

iss

ions relate to the prov

ion of a serv

ice and not ﬁnanc

ing. PCAF recogn

ises that

facil

itated em

iss

ions are d

ist

inct from ﬁnanced em

iss

ions g

iven that capital market transactions are rarely held on a ﬁnanc

ial

inst

itut

ion’s balance sheet and typically a ﬁnanc

ial

inst

itut

ion’s associat

ion w

ith the transaction is temporary.

However, the

Group is also disclos

ing fac

itated em

iss

ions us

ing a 100% weight

ing factor to reﬂect the max

imum potential GHG emiss

ions

that theoretically could be associated with capital market activ

ies.

Scope of emiss

ions

1,2

2021

PCAF Score

Emiss

ions

in scope

33%

weight

ing factor

MtCO

100%

weight

ing factor

MtCO

Scope 1 and 2

1.5

4.5

3.1

Scope 1 and 2 emiss

ions are covered for all sectors

Scope 3

1.2

3.7

5.0

Scope 3 emiss

ions are

included for Oil and Gas, Thermal Coal

Min

ing and Automot

ive Manufacturing

Total

2.7^

8.2^

Our 2021 emiss

ions are calculated us

ing 2021 debt capital markets data from Dealogic and 2021 emiss

ions data from S&P Trucost.

Nearly 90% of emiss

ions are based on reported em

iss

ions data from S&P Trucost. For the rema

ing we ut

ise proxy calculat

ions based on economic activ

ies.

Values noted with a caret symbol (^) are subject to independent lim

ited assurance by EY, report ava

ilable at

sc.com/sustainab

ityhub

Following the release of the ﬁnal Facil

itated Em

iss

ions gu

idance by PCAF in December 2023 the Group has measured its Facil

itated Em

iss

ions basel

ine for 2021.

2022 and 2023 Facil

itated Em

iss

ions w

ill be published in the 2024 Annual Report.

For further informat

ion, please refer to our ‘Net zero methodolog

ical white paper – The journey continues’ publicat

ion v

ia sc.com/sustainab

ityhub

113

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Alumin

ium

Automotive Manufacturers

Balance in

scope ($bn)

2030

inter

im target

Cumulative

performance

versus baseline

0.2

6.1tCO

e/tonne

Alumin

ium (Ma

inta

in at

1.5

°C

scient

iﬁc pathway)

-18%

Sector background

The production of alumin

ium

is emiss

ions-

intens

ive and

responsible for roughly 2%

of global CO

e emiss

ions per

year. The sector is heavily reliant on electric

ity from the

local grid with over 60% of the sector’s CO

e emiss

ions

occurring from the electric

ity consumed dur

ing smelting.

Baseline target and portfolio progress 2021 to 2030

Portfolio progress

MPP STS

Baseline

5.62

4.59

6.1

2021

Emissions intensity

(tCO

e/Tonne Aluminium)

2030

Year

Progress in the year

During the year, the Group measured the Alumin

ium

portfolio baseline using a production intens

ity (tCO

tonne Alumin

ium). A basel

ine of 5.62tCO

e/tonne

Alumin

ium has been measured w

ith 2021 as the baseline

year. This baseline is below the Miss

ion Poss

ible Partnership

Alumin

ium Sector Trans

ion Strategy (MPP STS) pathway

2030 target of 6.1tCO

e/tonne Alumin

ium, as the Group’s

current exposure is to clients with lower emiss

ions-

intens

ive

energy sources.

Nonetheless, we have issued facil

ies which have not yet

been drawn to counterparties with less efﬁc

ient smelters

and therefore the Group’s target is to mainta

in below the

MPP STS 1.5°C pathway. Note that our MPP STS pathway

has been adjusted downwards to include recycled

alumin

ium product

ion.

When calculating our emiss

ions, we measure the

alumin

ium producer’s Scope 1 and 2 em

iss

ions. Th

is is in

line with the ‘Fixed System Boundary’ set out by the SAFF

(Sustainable Alumin

ium F

inance Framework).

During the year the physical intens

ity of the portfol

decreased by 18% from 5.62tCO

e/tonne Alumin

ium to

4.59tCO

e/tonne Alumin

ium. Th

is was due to year-on-year

decreases in exposure to some of the Group’s higher-

intens

ity pr

imary alumin

ium produc

ing clients.

Balance in

scope ($bn)

2030

inter

im target

Cumulative

performance

versus baseline

2.8

66–100g CO

/V.km

(44–63% reduction)

-7%

Sector background

The automotive industry is a sign

iﬁcant contr

ibutor to

climate change through annual exhaust emiss

ions,

accounting for 8%

of global CO

emiss

ions. Trans

ion

ing

from internal combustion engines (ICE) to electric

vehicles (EVs) is crucial to reach net-zero by 2050 through

decreasing the demand of Oil and Gas products.

Baseline target and portfolio progress 2021 to 2030

Portfolio progress

IEA APS

IEA NZE

Baseline

178

165

100

2021

255

240

225

210

195

180

165

150

135

120

105

Emissions intensity

(gCO

/ vkm)

2030

Year

-44% to -63%

Progress in the year

During the year the Group re-baselined the emiss

ions

intens

ity reported for the 2021 basel

ine year from

160gCO

/V.km to 178gCO

/V.km. This was due to the

industry’s progress in adopting a test procedure that better

reﬂects driv

ing cond

ions

in the real world. This change in

assumption was completed by the Transit

ion Pathway

Init

iat

ive (TPI) through a Worldwide Harmonised Light

Duty Driv

ing Test Procedure, wh

ich has been globally

adopted as the standard against which all global

manufacturers are evaluated.

The Group’s target aligns with two scenarios of the IEA,

the IEA NZE and the IEA APS.

When measuring the sector emiss

ions, the boundary

covers Orig

inal Equ

ipment Manufacturers (OEMs) of

newly manufactured light duty vehicles. The Group

includes Scope 1, 2 and 3 emiss

ions (exclud

ing well-to-tank

emiss

ions)

in our ﬁnanced emiss

ions calculat

ion. For Scope

3 we include the lifet

ime ta

ilp

ipe em

iss

ions of the veh

icles

produced during the reporting cycle and a factor derived

from supply chain emiss

ions of the OEM.

The Group’s sector intens

ity for 2022

is 165gCO

/V.km, a 7%

decrease from 178gCO

/V.km. This emiss

ion decrease

due to a larger exposure to zero tailp

ipe EV manufactur

ing

with

in the Group’s Automot

ive Manufacturers portfolio.

On track

Transit

ion al

ignment required

Emiss

ions contr

ibut

ion per the IEA’s World Energy Outlook 2023.

Graphs reﬂect 2022 balance sheet values reported during 2023.

114

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Cement

Commercial Real Estate

Balance in

scope ($bn)

2030

inter

im target

Cumulative

performance

versus baseline

0.9

0.52 tCO

/tonne Cement

(22% reduction)

-1%

Sector background

Cement contributes to approximately 7%

of total GHG

emiss

ions on a global scale. The pr

imary source of carbon

diox

ide em

itted is due to the chemical reaction that takes

place between limestone and heat throughout the

manufacturing procedure.

By increas

ing energy efﬁciency and ut

ing alternative

fuels in the limestone heating process, the industry can

reduce its carbon emiss

ions.

Baseline target and portfolio progress 2021 to 2030

Portfolio progress

IEA NZE

Baseline

0.67

0.66

0.52

2021

0.75

0.70

0.65

0.60

0.55

0.50

0.45

0.40

0.35

0.30

Emissions intensity

(tCO2 / Tonne Cementitious product)

2030

Year

-22%

Progress in the year

During the year the Group measured its 2021 balance sheet

baseline and current year emiss

ions progress

in addit

ion to

setting a target. Our target range has been set using the

IEA NZE pathway.

When calculating our portfolio emiss

ions, the m

idstream

processes are measured, includ

ing heat

ing of limestone

and combustion of the fuels used in the cement kiln and

other plant processes.

In setting our emiss

ions basel

ine and target, we have

measured our cement sector portfolio emiss

ions w

ith a

production-based emiss

ions

intens

ity metr

ic of tonnes CO

per tonne of cementit

ious mater

ial (tCO

/tonne Cement).

Our selection of a production-based emiss

ions

intens

ity

metric for the cement industry is motivated by the need to

balance the ris

ing demand for cement

ious mater

ials in

emerging economies with the pressing requirement to

decarbonise the cementit

ious mater

ial production process.

The portfolio emiss

ions have rema

ined static during the

year with new clients having carbon intens

ies that are

consistent with our portfolio. We have started to work

with cement counterparties on their transit

ion plans and

commitments where their decarbonisat

ion amb

ion does

not match our own.

Balance in

scope ($bn)

inter

im target

Cumulative

performance

versus baseline

4.8

19–39 kgCO

/Sq.m

(47–74% reduction)

-15%

Sector background

The build

ing sector currently contr

ibutes 8%

of the global

energy-related emiss

ions

in 2022 per the IEA WEO 2023.

Key drivers of the emiss

ions

in the portfolio include the

size and type of the build

ing as well as the energy source

powering the build

ing.

Insulation and ventilat

ion, bu

ild

ing energy management,

electrif

icat

ion and cleaner electric

ity w

ill be key drivers of

decarbonisat

ion

in the portfolio.

Baseline target and portfolio progress 2021 to 2030

Portfolio progress

IEA APS

IEA NZE

Baseline

2021

Emissions intensity

(kgCO2/sqm ﬂoor area)

2030

Year

-47% to -74%

Progress in the year

During the year the Group measured our Commercial Real

Estate (CRE) portfolio’s 2021 balance sheet baseline and

2022 progress of GHG emiss

ions. The Group has also set a

target to reduce emiss

ions

in the portfolio by 47% to 74% by

2030 using the IEA APS and NZE scenarios to set the target.

The emiss

ions measured cover CRE assets be

ing leased to

earn rental returns and include the Scope 1 and 2 emiss

ions

from these build

ings. A phys

ical intens

ity of kgCO

e/m² is

the metric used to measure the portfolio’s progress to net

zero. This is calculated by summing the portfolio’s Scope 1

and 2 emiss

ions and d

ing this by the ﬂoor area of

the portfolio.

Our portfolio intens

ity moved from 73kgCO

e/Sq.m to

62kgCO

e/Sq.m, a reduction of 15% year-on-year. This was

primar

ily due to our CRE reg

ions’ power supplies starting

to decarbonise and macroeconomic changes resulting

in geographical shift

ing of the portfol

io from the east to

the west, and less carbon-intens

ive energy suppl

ies.

We continue to work with technology providers on

solutions for ind

idual build

ing carbon em

iss

ions

measurement and management.

On track

Transit

ion al

ignment required

Emiss

ions contr

ibut

ion per the IEA’s World Energy Outlook 2023.

Graphs reﬂect 2022 balance sheet values reported during 2023.

115

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Oil and Gas

Power

Balance in

scope ($bn)

2030

inter

im target

Cumulative

performance

versus baseline

6.8

9.3 MtCO

(29% reduction)

-21%

Sector background

The Oil and Gas industry’s production emiss

ions and

consumption emiss

ions account for approx

imately 15%

and 36%

of global energy-related emiss

ions respect

ively.

As such, the decarbonisat

ion of the O

il and Gas sector is

crucial for achiev

ing global net zero carbon em

iss

ions.

The transit

ion requ

ires the development of new technologies

such as abating emiss

ions at source through deployment of

carbon capture and (underground) storage technologies,

and the evolution of Oil and Gas companies to energy

companies through investment in renewables.

Baseline target and portfolio progress 2020 to 2030

Portfolio progress

IEA NZE

Baseline

13.1

10.3

10.2

9.3

2020

Absolute Financed Emissions

(MtCO

2030

Year

-29%

Progress in the year

During the year, the Group replaced its exist

ing revenue

intens

ity target w

ith an absolute Oil and Gas target,

which now requires a 29% reduction in absolute ﬁnanced

emiss

ions by 2030 aga

inst our 2020 balance sheet

baseline. This effectively sets a carbon budget for the Oil

and Gas team which can only be achieved through Oil and

Gas companies decarbonis

ing or v

ia the Group’s exposure

to this sector decreasing.

The emiss

ions measured

in our reporting include upstream

(exploration, extraction and production), midstream

(transportation and storage) and downstream (reﬁnement

and gas station operation) activ

ies. An absolute emiss

ions

metric is used to manage the portfolio, recognis

ing the

importance of phasing out oil and gas through the

transit

ion but also recogn

ing the

importance of gas

in the transit

ion per

iod.

Oil and Gas absolute emiss

ions have rema

ined relatively

consistent year-on-year from 10.2MtCO

e as reported on

the 2021 balance sheet to 10.3MtCO

e in 2022. This has

been a result of greater exposure in scope offset by a

decrease of production intens

ity of certa

in clients, in line

with our expectations of reductions.

Balance in

scope ($bn)

2030

inter

im target

Cumulative

performance

versus baseline

5.3

0.17–0.28 tCO

/MWh

(46–67% reduction)

-10%

Sector background

Power generation is a material source of CO

emiss

ions

globally, through the Scope 1 burning of fossil fuels. It is also

a leading sector in the transit

ion to net zero em

iss

ions

through the rapid increase of renewables such as solar

and wind.

Decarbonis

ing the portfol

io will require scaling renewable

lending or funding of lower-emiss

ion plants fuelled by

cleaner energy sources.

Baseline target and portfolio progress 2021 to 2030

Portfolio progress

IEA APS

IEA NZE

Baseline

0.52

0.47

0.28

0.17

2021

0.55

0.50

0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

Emissions intensity

(tCO

/MWh)

2030

Year

-46% to -67%

Progress in the year

During the year the Group has measured its 2021 balance

sheet baseline emiss

ion

intens

ity and

its 2022 progress

towards the 2030 target. The Group’s target range was

set using an IEA APS and NZE reference scenario range,

recognis

ing the

importance of decarbonis

ing the power

sector but also reﬂecting our posit

ion

ing as an emerging

markets bank and our commitment to a just energy

transit

ion.

In setting our emiss

ions basel

ine and target, we have

measured our Power portfolio emiss

ions w

ith an intens

ity

metric (tCO

/MWh). We primar

ily measure the Scope 1

emiss

ions assoc

iated with the generation of power through

combustion of fossil fuels or biomass when calculating

our emiss

ions.

From 2021 to 2022 the portfolios emiss

ions

intens

ity

moved from 0.52tCO

/MWh to 0.47tCO

/MWh, a

reduction of 10%. This was caused by a shift in the

portfolio mix with more lending to lower-emitt

ing gas

generation and renewables.

On track

Transit

ion al

ignment required

IEA: The Oil and Gas Industry in Net Zero Transit

ion.

Emiss

ions contr

ibut

ion per the IEA’s World Energy Outlook 2023.

Graphs reﬂect 2022 balance sheet values reported during 2023.

116

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– Annual Report 2023

Sustainab

ity review

Shipp

ing

Steel

Balance in

scope ($bn)

2030

inter

im target

Cumulative

performance

versus baseline

4.1

0% delta

+4.5%

Sector background

International shipp

ing plays an essent

ial role in the

facil

itat

ion of world trade as the most cost-effective and

energy-efﬁcient mode of cargo transport. It contr

ibuted

of global emiss

ions per the IEA WEO 2023.

With oil-based fuels histor

ically meet

ing over 99% of

shipp

ing energy needs, trans

ion to low em

iss

ion fuels

will be key in decarbonis

ing the sector. The Group

is a

signatory of the Poseidon Princ

iples, wh

ich determines

the decarbonisat

ion pr

inc

iples to follow when prov

ing

shipp

ing ﬁnance.

Baseline target and portfolio progress 2021 to 2030

Portfolio progress

IMO revised minimum alignment delta

SCB 2021 baseline

7.3%

11.8%

2021

30%

20%

25%

15%

-5%

-10%

-20%

-25%

Alignment delta

(against IMO trajectory %)

2030

Year

-11.8%

Progress in the year

In 2022, the Group set a target to achieve a 0% alignment

delta for its shipp

ing portfol

io by 2030. This alignment delta

is measured using the Poseidon Princ

iples framework based

on a 50% CO

reduction pathway by 2050 using 2008 as a

baseline. A posit

ive al

ignment score means that the portfolio

is misal

igned (above the decarbon

isat

ion trajectory),

whereas a negative or zero score means that the portfolio is

aligned. In 2023, Poseidon Princ

iples added two add

ional

pathways: the revised min

imum (the Group’s base case) and

striv

ing trajectory. These new scenar

ios are more stringent

and are net zero by 2050.

During the year, the Group’s revised min

imum al

ignment

delta increased from 7.3% to 11.8%, placing the Group in the

top quarter on an efﬁciency bas

is of Poseidon Princ

iple

signator

ies, wh

ich collectively represents 70% of global

shipp

ing ﬁnance exposure. Th

is increase of 4.5% in

alignment delta is primar

ily due to new vessels ﬁnanced,

which were delivered late in the year and therefore were

very ineff

ient, as they travelled very short distances in the

start-up phase. These vessels are expected to improve their

efﬁciency once annual

ised. Secondly, container shipp

ing

operators saw strong demand and proﬁtabil

ity in 2022,

which encouraged faster and more fuel-ineff

ient journeys.

Next year, the Group will further observe the impact of the

Carbon Intensity Indicator measurement of ships’ efﬁc

iency

which has come into effect in 2023, and incent

ises

shipowners to optim

ise the

ir emiss

ions

impact.

Balance in

scope ($bn)

2030

inter

im target

Cumulative

performance

versus baseline

1.3

1.4–1.6 tCO

/tonne Steel

(22–32% reduction)

-4%

Sector background

The steel industry is the largest source of industr

ial CO

emiss

ions and accounts for roughly 7%

of global CO

emiss

ions. Th

is is largely due to the sector’s reliance on

metallurgical coal as the primary fuel source.

Technological solutions to decarbonise this sector will

include scrap-based electric arc furnaces, natural gas or

hydrogen-based direct reduction plants with electric arc

furnaces (all with clean power supplies) and the potential

for CCUS.

Baseline target and portfolio progress 2021 to 2030

Portfolio progress

MPP TM regional

MPP TM

Baseline

2.06

1.97

1.6

1.4

2021

2.15

2.10

2.05

2.00

1.95

1.90

1.85

1.80

1.75

1.70

1.65

1.60

1.55

1.50

1.45

1.40

1.35

1.30

Emissions intensity

(tCO

/ tonne crude steel)

2030

Year

-22% to -32%

Progress in the year

During the year the Group updated its orig

inal revenue-

based intens

ity basel

ine to a production-based intens

ity

metric with a baseline year of 2021. We also measured our

progress during the year.

We have set a target of 1.4–1.6tCO

/tonne Steel by 2030

using a production intens

ity metr

ic, recognis

ing the

urgent need to decarbonise the steel production process,

while balancing the growing demand of steel in

emerging economies.

When calculating our emiss

ions, we measure the

steelmaker’s Scope 1 and 2 emiss

ions. Th

is is in line with

the ‘Fixed System Boundary’ as set out by the Sustainable

Steel Princ

iples (SSP).

From 2021 to 2022 the physical intens

ity of the portfol

moved from 2.06tCO

/tonne Steel to 1.97tCO

/tonne Steel,

a decrease of 4%. This was due to a year-on-year decrease

to the Group’s higher-emitt

ing cl

ients and improvements in

the energy performance of some clients in Asia.

On track

Transit

ion al

ignment required

Emiss

ions contr

ibut

ion per the IEA’s World Energy Outlook 2023.

Graphs reﬂect 2022 balance sheet values reported during 2023.

117

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– Annual Report 2023

Sustainab

ity review

Thermal Coal Min

ing

Resident

ial Mortgages

Balance in

scope ($bn)

2030

inter

im target

Cumulative

performance

versus baseline

0.04

0.5 MtCO

(85% reduction)

-52%

Sector background

The coal sector is the largest energy source for electric

ity

generation globally as well as being the largest single

source of carbon emiss

ions, contr

ibut

ing 42%

of total CO

miss

ions when combusted.

Although global emiss

ions related to coal have

increased

in 2022 due to the ongoing energy cris

is, coal

is expected,

and is required to be phased out over the transit

ion

towards net zero.

Baseline target and portfolio progress 2020 to 2030

Portfolio progress

IEA NZE

Baseline

3.3

1.6

2.3

0.5

2020

3.5

3.0

2.5

2.0

1.5

1.0

0.5

Absolute Financed Emissions

(MCO

2030

Year

-85%

Progress in the year

The Group has set a target of reducing our absolute

baseline emiss

ions by 85% by 2030. Th

is target, in addit

ion

to our Posit

ion Statements, wh

ich places ever increas

ing

lim

its on ﬁnancial serv

ices the Group can provide to

coal-reliant clients, recognises there is lim

ited opportun

ity

to reduce carbon intens

ies associated with the Coal

sector and sets a decreasing carbon budget on this sector.

During the year we calculated our progress up to 2022

towards our absolute target against our 2020 balance

sheet baseline. This includes thermal coal upstream

(exploration and extraction), midstream (transportation)

and downstream (reﬁnement) when measuring our

absolute emiss

ions.

The absolute emiss

ions of the portfol

io from 2021 to 2022

decreased from 2.3MtCO

e to 1.6MtCO

e a decrease of

30%. This was due to the portfolio being run down subject

to contractual commitments with no new use of proceeds

ﬁnancing hav

ing been provided.

Balance in

scope ($bn)

2030

inter

im target

Cumulative

performance

versus baseline

74.3

29–32 kgCO

e/Sq.m

(15–23% reduction)

Sector background

The key drivers of the emiss

ions

in the resident

ial mortgages

portfolio include the size and energy efﬁc

iency, and the

energy source powering the resident

ial ﬂoor area.

Insulation and ventilat

ion, bu

ild

ing energy management,

electrif

icat

ion and cleaner electric

ity w

ill be key drivers of

decarbonisat

ion

in the portfolio.

Baseline target and portfolio progress 2021 to 2030

CRREM

2030 target (upper bound)

2030 target (lower bound)

Baseline

37.6

37.7

2021

Absolute Financed Emissions

(kgCO

/sqm ﬂoor area)

2030

Year

-15%

-23%

Progress in the year

During the year the Group measured its 2021 balance sheet

baseline and 2022 progress of GHG emiss

ions from the four

main resident

ial mortgage portfol

ios, namely Hong Kong,

South Korea, Singapore and Taiwan, accounting for

approximately 89% of the Group’s exposure. Emiss

ions

measured in our baseline and annual progress include

Scope 1 and 2 emiss

ions from the res

ident

ial propert

ies the

Group lends against. A physical intens

ity of kgCO

e/Sq.m

is the metric used to measure the portfolio’s progress.

Standard Chartered, as a UK headquartered Group with a

large footprint in Asia, is one of the ﬁrst banks to set a target

on its mortgage portfolio across multiple countries. While we

have set a single group-level target, the very nature of the

resident

ial real estate market means all decarbon

isat

ion

actions will take place at the local level. Achiev

ing our target

is dependent on actions by local governments and power

companies decarbonis

ing power generat

ion. The target

range has been set at the more ambit

ious end of the publ

commitments made by governments and power companies

in the countries where the Group operates. These targets

have been benchmarked to, and currently sit above, the

global CRREM pathway to 2030. We will review this over

time based on changes to country commitments and

ambit

ion. The Group has set a target of 29–32kgCO

e/Sq.m

being a 15% to 23% reduction by 2030 of the baseline

portfolio intens

ity of 37.6kgCO

e/Sq.m. The portfolio intens

ity

remained consistent and will decrease over time through

the decarbonisat

ion of the nat

ional grids in our markets.

On track

Transit

ion al

ignment required

Emiss

ions contr

ibut

ion per the IEA’s World Energy Outlook 2023.

Graphs reﬂect 2022 balance sheet values reported during 2023.

118

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Pillar 4: Leverage our innovat

ion hubs

Announced in 2023, the four thematic innovat

ion hubs –

Adaptation Finance, Blended Finance

, Carbon Markets

and Nature Posit

ive Solut

ions – focus on emerging themes

of sustainab

ity aligned to areas where the Group has

a core competency and are particularly suited to our

clients in our footprint markets.

Each hub is transversal,

run by senior leaders in the CSO organisat

ion, and a

ims

to ident

ify opportun

ies for future returns outs

ide of our

core range of tradit

ional products and serv

ices. By being

deliberate in demonstrating leadership to advance the

ecosystem in these emerging thematic areas, the Group

will be well posit

ioned to take advantage of the s

ign

iﬁcant

and different

iated revenue potent

ial that will result from

maturation of these thematic areas in the future.

For further informat

ion on collaborat

ive in

iat

ives the Group

partic

ipates

in, refer to

page 96

1. Adaptation Finance

The world is experienc

ing

impacts from changes

in average temperature, seasonal shift

ing, an

increas

ing frequency and

intens

ity of extreme

weather events, and slow onset events.

A sign

iﬁcant proport

ion of our Group’s footprint

markets are coastal, which means that adaptation

represents both a risk and an opportunity for us and

our clients.

There is an urgent global need to unlock and scale

public and private climate adaptation ﬁnance

to build shared societal resil

ience. Th

is need is

applicable to all nations but is particularly acute

in emerging and developing economies.

Acknowledging our geographical footprint and the

multipl

ier effect of

investment in adaptation – where

every dollar spent on adaptation this decade could

generate up to $12 of economic beneﬁt (

sc.com/

adaptation-economy

) – it is our ambit

ion to act

decis

ively and mob

ise others on adaptat

ion.

In 2023:

•

Closed the Group’s ﬁrst Adaptation

Finance transaction; an adaptation

letter of credit with a parametric

insurance provider for the renewable

energy sector.

•

Reviewed our Group’s portfolio to

analyse data on past transactions

related to adaptation.

•

Used data collected from our Climate

Risk Assessments to design an

‘adaptation readiness’ test at the

client level.

•

Collaborated externally with KPMG and

the United Nations Ofﬁce for Disaster

Risk Reduction (UNDRR) to develop the

market’s ﬁrst Guide to Adaptation and

Resil

ience F

inance (GARF), which was

announced at COP28 and published in

early 2024.

“The Adaptation Hub has

drawn on our diverse

experience from across the

Group. Our ﬁrst Adaptation

Finance deal provided a test

case to scaling our efforts

internally and demonstrate

how private sector ﬁnance can

be deployed into Adaptation.

The new Guide for Adaptation

and Resil

ience F

inance (GARF)

is centred around bankable

opportunit

ies and we hope

will unlock sign

iﬁcant pr

ivate

sector capital ﬂow towards

adaptation in emerging

markets.”

Alex Kennedy

Head of Sustainable Finance

Solutions

2. Blended Finance

The Independent High-Level Expert Group on

Climate Finance estimate that by 2030 there will be a

$2.5–3 trill

ion per year ﬁnancing gap between current

baselines and what is required to deliver the UN

Sustainable Development Goals (SDGs) in emerging

markets and developing countries other than China.

Such sums cannot be delivered through public

ﬁnancing alone. They requ

ire the internat

ional

private sector to step up, includ

ing

in markets

histor

ically cons

idered as too risky for high levels of

investment. Blended ﬁnance – using concessional

public funds to mobil

ise much larger volumes of

private capital – can help to close this gap. The

Just Energy Transit

ion Partnersh

ips (JETPs) are

an example of such blended ﬁnance.

Our hub brings together public and private expertise

across the Group, includ

ing one of the arch

itects

of the South Africa and Vietnam JETPs, to help

commercial

ise blended ﬁnance. Some of the

objectives of the JETPs – e.g., ﬁnancing the early

retirement of coal-ﬁred power plants – will require

truly innovat

ive approaches and collaborat

ion.

In 2023:

•

Worked through internat

ional fora and

industry groups (e.g., GFANZ) to leverage

the Group’s expertise and support –

alongside other internat

ional banks –

blended ﬁnance projects and

programmes, includ

ing the development

of frameworks for early coal retirement.

•

Hosted both the Vietnamese and

Indonesian governments as they

launched their JETP events at COP28.

•

Standard Chartered became one of the

founding partners of the Bangladesh

Climate and Development Partnership,

which aims to use blended ﬁnance to

help Bangladesh adapt to climate

change.

“‘Where money goes today

shapes tomorrow’s world’ was

the theory of change for the

COP26 organisers. While the

scale of the challenge remains

sign

iﬁcant – the V

ietnam and

Indonesian JETPs alone each

require over $100bn of private

ﬁnance – the opportunit

ies

also remain clear. Blended

Finance offers us in Standard

Chartered the chance to make

use of donor ﬁnancing to help

the markets that we call home

accelerate their journeys

towards net zero.”

John Murton

Senior Sustainab

ity Advisor

The hub developed an internal working deﬁn

ion in order to different

iate and bu

ild upon the Group’s already long-established blended ﬁnance reputation

in Export Credit Agency ﬁnanc

ing. We use ‘Blended F

inance’ here to refer to the strategic use of catalytic public (and/or philanthrop

ic) cap

ital and

regulatory reform to increase private sector investment that supports the SDGs. This can happen at a programme level or at a project level and may

involve the creation and use of innovat

ive ﬁnancing

instruments and structures to overcome barriers to investment.

119

Standard Chartered

– Annual Report 2023

Sustainab

ity review

3. Carbon Markets

A high-integr

ity carbon market, comb

ined with

corporate commitments to cut emiss

ions and h

igh

standards of reporting, can accelerate the global

progress towards net zero by 2050. The use of

high-quality carbon credits can play a part

in a multi-faceted and urgent approach to

decarbonisat

ion, as

it enables climate action in

sectors and geographies that remain severely

underfunded today.

Carbon credits can be complementary to a credible

corporate net zero transit

ion plan and help br

idge

the gap between the emiss

ions reduct

ions that can

be implemented now, and the longer lead time for

technological solutions that are yet to scale.

Standard Chartered has been at the forefront of

several in

iat

ives that are work

ing to ensure that a

high integr

ity, scalable market develops. We offer

trading, advisory, ﬁnanc

ing and r

isk management

services to our clients around the world.

In 2023:

•

Involved in some of the largest carbon

market transactions, includ

ing the

Regional Voluntary Carbon Market

Company and Climate Impact X (CIX)

auctions.

•

Established primary supply partnerships

with clients in Kenya, Brazil, China and

Vietnam.

•

Educated policymakers, clients and

colleagues on the beneﬁts of a liqu

carbon market to bring funding to

people and projects that likely would

not receive it otherwise.

•

Partic

ipated

in several industry in

iat

ives

that support development of the global

carbon market: the International

Emiss

ions Trad

ing Associat

ion (IETA),

the Integrity Council for the Voluntary

Carbon Markets (ICVCM), the Voluntary

Carbon Markets Integrity Init

iat

ive

(VCMI) and the Africa Carbon Markets

Init

iat

ive (ACMI).

“For many years, we have

faced a huge challenge and a

degree of sceptic

ism, to bu

ild

the framework for a global

carbon market. With the

arrival of the ICVCM’s Core

Carbon Princ

iples and the

development of end-to-end

carbon market announced

at COP28, that framework

now exists. We have all the

component parts of a vibrant

market. We need to make it

work in practice and make

sure it grows big enough

to make a meaningful

contribut

ion to global

net zero.”

Chris Leeds

Head of Carbon Markets

Development

4. Nature Posit

ive Solut

ions

It is estimated that over half of global GDP is

moderately or highly dependent upon nature.

Despite its importance, biod

ivers

ity is rapidly

declin

ing.

Having applied internat

ional env

ironmental and

social standards in our ﬁnanc

ing for more than

20 years, our presence in markets with some of

the richest biod

ivers

ity in the world posit

ions us to

engage with a range of stakeholders. We are guided

by our commercial ambit

ion to

increas

ingly sh

ift

ﬁnancial ﬂows toward nature pos

ive outcomes

and thereby contribute to the halting and reversing

of biod

ivers

ity loss. Nature is also a crit

ical lever for

climate change mit

igat

ion and adaptation and

the hub collaborates with the Carbon Markets

and Adaptation Finance hubs to explore

natural climate solutions and ecosystem-based

adaptation opportunit

ies.

In 2023:

•

Conducted in

ial impact and

dependency assessment to ident

ify our

exposure to potentially material sectors

in our CCIB segment.

•

Partnered externally with organisat

ions

such as the Ocean Risk and Resil

ience

Action Alliance (ORRAA) and were

inv

ited to part

ipate

in the UN Global

Compact Ocean Investment Protocol

Steering Committee.

•

Welcomed the publicat

ion of the

Taskforce for Nature-related Financ

ial

Disclosures (TNFD) guidance and

recommendations as we see the value

in transparency and comparabil

ity

when reporting on nature-related

dependencies, impacts, risks and

opportunit

ies.

•

In January 2024, the Group joined a

cohort of early adopters of the TNFD

framework preparing to publish our ﬁrst

TNFD-aligned disclosures in early 2026.

“The Kunming-Montreal

Global Biod

ivers

ity Framework

signed by 196 nations puts the

global economy on a policy

trajectory that is needed to

bend the curve on biod

ivers

ity

loss. Now is the opportunity for

collective action to halt and

reverse biod

ivers

ity loss to

allow species and ecosystems

to recover.”

Oliver Withers

Head of Nature

120

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Sustainab

ity-related risks, opportunit

ies and organ

isat

ional

impl

icat

ions are overseen by the Group’s Board, Management

Team and multiple supporting sub-committees.

Board oversight of climate- and sustainab

ity-

related risks and opportunit

ies

The Board is responsible for the long-term success of the

Group and its supporting committees consider climate-and

sustainab

ity-related risks and opportunit

ies when rev

iew

ing

and guid

ing strateg

ic decis

ions. Throughout 2023, Board

activ

ies have included review

ing and gu

ing strateg

decis

ions on our approach to reach net zero ﬁnanced

emiss

ions by 2050. S

ince 2019, the Board has approved a

Climate Risk Appetite Statement annually to reﬂect our aim

to measure and manage the ﬁnancial and non-ﬁnancial r

isks

aris

ing from cl

imate change and to reduce emiss

ions related

to the Group’s own activ

ies, includ

ing those assoc

iated

with provid

ing ﬁnancial serv

ices to clients, in line with the

Paris Agreement.

Management-level governance

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 roadmap.

The responsib

ity for ident

ify

ing and managing ﬁnanc

ial r

isks

from climate change sits with the Group Chief Risk Ofﬁcer

(GCRO) as the appropriate Senior Management Function

(SMF) under the Senior Managers Regime (SMR). The GCRO is

supported by the Global Head, Enterprise Risk Management,

who has day-to-day oversight and responsib

ity for the

Group’s second line of defence against Climate Risk.

The structure of the Group’s Board and Management Team can be

found on

pages 137 to 144

Supporting governance

The oversight and management of climate and sustainab

ity-

related risks and opportunit

ies are an

integral part of our

business management, involv

ing several execut

ive

committees. These committees operate under their terms of

reference, delineat

ing respons

ies, dec

ion-mak

ing

process, authority and the escalation route for any material

issues. Addit

ionally, a number of teams across our bus

iness,

risk and functional areas are either dedicated to, or spend a

proportion of their time, working on climate and sustainab

ity-

related activ

ies. We are also expanding governance and

risk management at the regional, country and segment

levels to better ident

ify and manage cl

imate-related risks

and opportunit

ies.

Climate- and sustainab

ity-related

governance

Board oversight of climate-related risks and opportunit

ies

Management-level governance

Supporting governance

Executive committees

Climate Risk

Management

Committee

(CRMC)

Sustainable

Finance

Governance

Committee (SFGC)

Standard Chartered PLC Board

Board Risk Committee (BRC)

Audit Committee (AC)

Culture and Sustainab

ity

Committee (CSC)

Group Management Team

Group Risk

Committee

(GRC)

Group

Responsib

ity

and Reputational

Risk Committee

(GRRRC)

Sustainab

ity Executive Committee

(Sustainab

ity ExCo)

Sustainab

ity Operating Steering

Committee (SOSC)

Structural overview of Standard Chartered PLC’s climate- and sustainab

ity-related governance

121

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Governance committees and steering groups

Several committees and steering groups support the Group’s Board and Management Team on the management and

monitor

ing of cl

imate and sustainab

ity-related risks and opportunit

ies and assoc

iated impacts on our business and for

our key stakeholders.

Climate- and sustainab

ity-related governance

Governance body

Chair

Agenda frequency

and inputs

Roles and responsib

ies

Topics covered in 2023

Standard

Chartered PLC

Board

Group

Chairman

Annual update on

Sustainab

ity

Climate Risk

updates delivered

quarterly through

the Group CRO

report

•

Oversight of the Group’s

sustainab

ity strategy

•

Received an update on the Group’s

sustainab

ity strategy, includ

ing

progress made against key

performance ind

icators and

public commitments

•

Received quarterly Climate Risk

updates through the GCRO reports

•

Approved Climate Risk Appetite

Statement and Board-level Risk

Appetite (RA) metrics

•

The Board received train

ing on

climate risk scenarios

Board Risk

Committee

(BRC)

Independent

Non-

Executive

Director

Climate Risk

updates are

provided to BRC in

Group CRO reports

six times a year

•

Provide oversight of the Group’s key

risks on behalf of the Board and is the

primary risk committee at Board level

that oversees Climate Risk

•

Consider the Group’s Risk Appetite

and make recommendations to the

Board on the Climate Risk Appetite

Statement

•

Assess risk types (includ

ing Cl

imate

Risk) and the effectiveness of risk

management frameworks and

polic

ies

•

Provide oversight and challenge the

design and execution of climate-

related Group-wide enterprise stress

tests mandated by a regulator

•

Reviewed, discussed and

challenged:

(i) the Group’s progress on

embedding climate risk in line

with the Prudential Regulation

Authority (PRA) Supervisory

Statement (SS 3/19)

i) the results of the Group’s ﬁrst

bespoke short-term base case

and tail risk scenarios and

development of the Group’s

internal modelling capabil

ies,

and

i) key focus areas for 2024

•

Reviewed Climate Risk Information

Report quarterly

•

Monitored adherence to RA metrics

Audit Committee

(AC)

Independent

Non-

Executive

Director

Updated annually in

the fourth quarter

and more frequently

if any material

disclosures are

made outside

of the Group’s

Annual Report

•

Responsible for oversight of the

Group’s quantitat

ive report

ing

metrics and controls over

those metrics

•

Reviewed changes to the climate

and carbon emiss

ions-related

quantitat

ive d

isclosures to be

reported in this Annual Report,

and the key controls around those

quantitat

ive d

isclosures

Culture and

Sustainab

ity

Committee

(CSC)

Independent

Non-

Executive

Director

Three times in 2023

•

Review the Group’s overall

sustainab

ity strategy and monitor

its execution

•

Monitor the development and

implementat

ion of the Group’s

public commitment to net zero

ﬁnanced emiss

ions by 2050

•

Received an update on the Group’s

sustainab

ity strategy, includ

ing

risk, regulatory and governance

matters, public commitments,

and Posit

ion Statements

•

Reviewed progress on the Group’s

net zero roadmap

•

Oversaw the update and

consolidat

ion of the Group’s

Sustainab

ity Aspirat

ions

•

Reviewed and discussed the

Group’s Environmental, Social and

Governance (ESG) rating scores

against prior

ised frameworks

Group Risk

Committee

(GRC)

Group Chief

Risk Ofﬁcer

(CRO)

Climate Risk

updates were

provided to GRC in

Group CRO report

10 times during 2023

•

Ensure the effective management

of Climate Risk in support of the

Group’s strategy

•

Review Risk Appetite (RA) and

approve Management Team-level

RA metrics and thresholds for

Princ

ipal R

isk Types and integrated

risks, includ

ing Cl

imate Risk

•

Received an 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

122

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Governance body

Chair

Agenda frequency

and inputs

Roles and responsib

ies

Topics covered in 2023

Group

Responsib

ity

and

Reputational

Risk Committee

(GRRRC)

Group Head,

Conduct,

Financ

ial

Crime and

Compliance

Monthly

•

Oversee and approve Posit

ion

Statements includ

ing sector-spec

and cross-sector statements

includ

ing Cl

imate Risk

•

Oversee climate-driven Reputational

and Sustainab

ity Risk Appetite

•

Oversee changes to Climate Risk

decis

ion frameworks

Reviewed:

•

Exposure to clients that do

not comply with enhanced

environmental and social criter

•

Transactions where Posit

ion

Statement criter

ia are not fully met

•

Transactions with high or very high

Reputational Risk with climate

change factors and decis

ions on

whether to decline transactions

or not

•

The process for net zero portfolio

steering and governance, includ

ing:

(i) evaluating clients’ transit

ion

plans,

i) refreshed ﬁnanced em

iss

ions

data for clients in sectors where

the Group has set net zero

targets and

i) ongoing approach to net zero

portfolio management

•

Updates for cross-sector and

sector-specif

ic Pos

ion Statements

Sustainab

ity

Executive

Committee

(Sustainab

ity

ExCo)

Chief

Sustainab

ity

Ofﬁcer (CSO)

At least eight times

a year

•

Hold ultimate decis

ion-mak

ing

authority over all material

Sustainab

ity in

iat

ives as delegated

by the Group Management Team

•

Direct actions as necessary for

areas of improvement to ensure

the effective implementat

ion of

Sustainab

ity in

iat

ives

•

Review ﬁnd

ings and escalat

ions from

delegated committees (includ

ing

but not lim

ited to the Susta

inab

ity

Operating Steering Committee)

•

Oversees the net zero programme

Reviewed and approved:

•

New or updated net zero sector

targets for Alumin

ium, Steel, Power,

Cement, Resident

ial Mortgages

and Commercial Real Estate

•

Consolidat

ion of the Group’s

Sustainab

ity Aspirat

ions

Discussed:

•

The Group’s approach to

integrat

ing nature-related r

isk

into the business model

•

The Group’s ESG ratings and

prior

ity d

isclosures

Climate Risk

Management

Committee

(CRMC)

Global Head,

Enterprise Risk

Management

Six times in 2023

•

Oversee development and

implementat

ion of the Cl

imate

Risk framework, includ

ing relevant

regulatory requirements

•

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

Princ

ipal R

isk Types impacted by or

linked to Climate Risk

•

Provide challenge and recommend

Climate Risk-related Enterprise Stress

Test results

•

Review, challenge and provide

input on external disclosures such

as Climate Risk-related ﬁnanc

ial

disclosures, includ

ing those set out

by the Taskforce on Climate-related

Financ

ial D

isclosures (TCFD)

•

Monitor and manage the Climate

Risk and net zero proﬁle of the Group

with

in R

isk Appetite

Drove delivery of:

• Climate-related Group-wide

stress testing and management

scenario analysis

•

Progress associated with

integrat

ing Cl

imate Risk across

all impacted risk types

•

Climate Risk-related external

disclosures, includ

ing those

discussed in this report

•

Climate Risk research with

Imperial College London

•

Regulatory feedback and

supervis

ion

• Climate-related management

informat

ion and R

isk Appetite

metrics

•

Approach to deliver

ing tra

ing

and upskill

ing staff on Cl

imate Risk

across the Group

•

Oversight on the development,

ownership, as well as the results

of Climate Risk models in scope

123

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Governance body

Chair

Agenda frequency

and inputs

Roles and responsib

ies

Topics covered in 2023

Sustainable

Finance

Governance

Committee

(SFGC)

Global Head

of Sustainable

Finance (SF)

At least six times

a year

•

Provide leadership, governance and

oversight in deliver

ing the Group’s

SF offerings

•

Review and endorse SF products

•

Guide the Group in ident

ify

ing

opportunit

ies

in SF and managing

the greenwashing risks relating to SF

Reviewed and approved:

•

SF products includ

ing susta

inable

cash products, sustainable trade

ﬁnance products and SF retail

loan products

•

Green and sustainable ﬁnance

transactions includ

ing transact

ions

with climate-related key

performance ind

icators

•

The Group’s approach to launching

sustainable and climate products

•

The Group’s Green and Sustainable

Product Framework (GSPF),

encompassing a range of climate

ﬁnance activ

ies

•

The Group’s Transit

ion F

inance

Framework outlin

ing our approach

to deﬁning trans

ion act

ies

•

The Group’s approach to pureplay

clients which align to the Group’s

GSPF

Sustainab

ity

Operating

Steering

Committee

(SOSC)

Head

Strategic

Init

iat

ives,

Sustainable

Finance

Monthly

•

Central forum where all strategic

prior

ies related to sustainab

ity

are consolidated, prior

ised and

agreed upon

•

Oversee and monitor milestones

and deliverables of sustainab

ity

iat

ives

•

Ensure sustainab

ity investment

budget is centrally prior

ised and

allocated to Business and Function’s

Quarterly Performance Reviews

•

Be a forum for escalation and

decis

ion-mak

ing

•

Tracked delivery of net zero

sectoral target setting against

our commitments

•

Enforced accountabil

ity and

fostered collaboration across the

Group to implement the Group’s

net zero plan requirements and

advance the dig

ital

isat

ion of

Sustainable Finance data and

reporting

•

Provided updates on advancement

with

in the Group’s

innovat

ion hubs

Governance of our Sustainable Finance frameworks

We have Product Programme Guidance documents which

underpin each Sustainable Finance product that we offer,

signed off by a delegate of the Sustainable Finance

Governance Committee (SFGC) following approval of

the product construct by the SFGC.

The SFGC is our forum for review

ing Susta

inable Finance

products and derives its authority from the Group

Responsib

ity and Reputational Risk Committee (GRRRC). The

SFGC is our foremost committee on managing greenwashing

risk in Sustainable Finance product design and labelling.

• Our

Green and Sustainable Product Framework

sets out

our approach to mit

igat

ing greenwashing risk across our

product suite and deﬁnes the themes and activ

ies that

we consider elig

ible for green and soc

ial ﬁnanc

ing. The

Framework is informed by internat

ional market gu

idel

ines

and standards on green and sustainable ﬁnance, among

others, the Climate Bonds Standard, EU Taxonomy for

sustainable activ

ies and the Green Loan Princ

iples.

Co-authored with Morningstar Sustainalyt

ics, our

Framework is reviewed annually to ensure it remains in line

with the latest industry standards. For more infromat

ion,

please vis

it sc.com/gspf.

• Our

Sustainab

ity Bond Framework

governs our

sustainable debt products, provid

ing transparency and

guidance on the use of proceeds and the impact of the

green, social and sustainab

ity bonds and notes issued by

the Group. It has received a Second Party Opin

ion from

Morningstar Sustainalyt

ics, wh

ich conﬁrms our Framework

is credible, impactful and aligns with industry guidel

ines.

For more infromat

ion, please v

it sc.com/susta

inab

ity-

bond-framework.

•

We have outlined our approach to deﬁn

ing Trans

ion

Finance in our

Transit

ion F

inance Framework

. This

Framework is informed by the 2023 IEA NZE 2050 scenario

and is reviewed annually to ensure it is in line with the

latest available science and industry standards.

For more informat

ion, please v

it sc.com/trans

ion-

ﬁnance-framework.

124

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Incentive structure

Our sustainab

ity-related goals and targets are reﬂected

in the measures that determine employee incent

ives and

variable remuneration. Variable remuneration is based

on measurable performance criter

ia l

inked to the Group’s

strategy and overseen by the Remuneration Committee.

Annual incent

ive

Annual incent

ives are based on the assessment of the Group

scorecard which contains ﬁnanc

ial and strateg

ic measures

and is operated for the major

ity of our employees.

Sustainab

ity-related measures continue to be included in the

2024 Group scorecard related to:

•

Growing Sustainable Finance income in our CCIB segment

•

Reducing our ﬁnanced emiss

ions for key sectors

in line

with our risk appetite and based on our inter

im 2030

sectoral targets

•

Meeting key milestones for build

ing cl

ient and transaction-

related, and central data infrastructure for deliver

ing on

our net zero ambit

ion

•

Reducing Scope 1 and 2 emiss

ions

in line with our

operational net zero by 2025 target

Long-Term Incentive Plan (LTIP)

LTIP awards are granted to senior executives who have the

abil

ity to

inﬂuence the long-term performance of the Group.

Members of the Group Management Team are elig

ible for

LTIP awards, which may also be granted to other employees

in the Group.

Sustainab

ity continues to be included in the 2024–26 LTIP

through the following performance measures:

•

Accelerating zero: Progress towards our 2030 Sustainable

Finance mobil

isat

ion target in each of the three

performance years

•

Lift

ing part

ipat

ion: Year-on-year growth in ﬁnanc

ing

activ

ity w

ith female and/or small and medium enterprise

(SME) clients and other underserved populations

•

Deliver

ing on our Susta

inab

ity Aspirat

ion to further

develop the global sustainab

ity ecosystem by actively

contribut

ing to global partnersh

ips, in

iat

ives and cross-

sector collaborations

Further details can be found in the Directors’ remuneration report

pages 195 to 204

Key ind

iduals or teams with climate-related object

ives wh

ich impact variable remuneration

In addit

ion to the Group scorecard and LTIP performance measures, ded

icated climate and sustainab

ity-related object

ives

apply across functional and regional scorecards includ

ing the R

isk function, and ind

idual object

ives add a further l

ink between

sustainab

ity outcomes and reward.

Indiv

idual or team

Objectives/performance l

inkage

Group

Management

Team (MT)

Members of the Group MT are elig

ible for an annual

incent

ive based on the outcome of our Group scorecard

and an LTIP award which both include sustainab

ity-related measures. Further details can be found on

pages 200 to 203 of this Annual Report.

Group Chief Risk

Ofﬁcer (CRO)

The Group CRO is responsible and accountable for Climate Risk under the Financ

ial Conduct Author

ity’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.

Chief

Sustainab

ity

Ofﬁcer (CSO)

The CSO helps drive the Group’s sustainab

ity agenda and brings together its Sustainable Finance, Sustainab

ity

Strategy, Net Zero Delivery, Strategic Init

iat

ives and Environmental and Social Risk Management (ESRM) teams.

Performance measures for the CSO include progress against the delivery of net zero roadmap and Sustainable

Finance targets.

Global Head of

Supply Chain

Management

The Global Head of Supply Chain Management is responsible for ensuring and overseeing the delivery of supply

chain emiss

ions and cl

imate related object

ives and plans

in partnership with contract owners across the Bank.

This includes baselin

ing our supply cha

in emiss

ions related to products and serv

ices, supply chain emiss

ions

disclosures, and the implementat

ion of plans to reduce supply cha

in-related emiss

ions and manag

ing climate

risks in partnership with our suppliers.

Global Head,

Property

The Global Head, Property is responsible for deliver

ing on our a

im to reach net zero carbon emiss

ions

in our own

operations by 2025.

All employees

Selected sustainab

ity-related targets are incorporated into our annual Group scorecard which determines

annual incent

ives for the majority of our employees.

125

Standard Chartered

– Annual Report 2023

Sustainab

ity review

We seek to proactively manage Environmental and Social

(E&S) Risks and impacts aris

ing from the Group’s cl

ient

relationsh

ips and transact

ions.

For over 20 years, our cross-sector Environmental and Social

Risk Management (ESRM) Framework has helped us apply

internat

ional standards and best pract

ices across all our

markets. In the frontline, our ESRM team with

in the Ch

ief

Sustainab

ity Ofﬁcer (CSO) organisat

ion oversees the

management of E&S Risks associated with our client

relationsh

ips.

For further informat

ion please refer to our ESRM Framework

sc.com/esriskframework

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 ﬁnancing dec

ions.

Our Posit

ion Statements, approved by the Group

Responsib

ity and Reputational Risk Committee (GRRRC),

outline the cross-sector and sector-specif

ic cr

iter

ia we apply

to assess whether to provide ﬁnanc

ial serv

ices to our clients.

We use these statements – which draw on International

Finance Corporation (IFC) Performance Standards, the

Equator Princ

iples (EP) and global best pract

ice – to assess

E&S risk related to our ﬁnanc

ing.

We reviewed 1,341 clients and 708 transactions that presented

potential for elevated E&S risk in 2023. 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.

However, for clients who do not meet our Posit

ion Statement

criter

ia, we may look to w

ithdraw ﬁnanc

ial serv

ices and

exit the relationsh

if we cannot work with them to align

over time.

In 2023, we completed the review and update of our

cross-sector Climate Change and sector-specif

ic Pos

ion

Statements covering all sensit

ive sectors, w

ith the

requirements to take effect in 2024. We also commenced the

review of our cross-sector Human Rights Posit

ion Statement.

During the year, we evolved our approach to nature risk

assessment. This included a loan book analysis to ident

ify

impacts and dependencies from nature-related risks at sector,

country and ﬁnancial serv

ices levels. The Group’s cross-sector

Nature Posit

ion Statement prov

ides a consolidated view of

our approach to managing Nature Risk across our business,

operations and supply chain.

Read more about our Posit

ion Statements

sc.com/posit

ionstatements

Our list of Prohib

ited Act

ies can be found

sc.com/prohib

itedact

ies

Our reporting against the Equator Princ

iples can be found

page 504

or at

sc.com/equatorprinc

iples

Managing Environmental

and Social Risk

Posit

ion Statements

Cross-sector Posit

ion Statements

Prohib

ited Act

ies

Sector-specif

ic Pos

ion Statements

Climate Change

Agribus

iness

Infrastructure

and Transport

Human Rights

Chemicals and

Manufacturing

Power Generation

Nature

Extractive Industries

Thermal Coal

126

Standard Chartered

– Annual Report 2023

Sustainab

ity review

We have designed an approach that begins to embed Climate Risk with impacted Princ

ipal R

isk Types (PRTs) with

in our central

Enterprise Risk Management Framework based around two princ

iples:

1. 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 these detr

iments. This means

embedding Climate Risk considerat

ions

into exist

ing r

isk

ident

iﬁcation and management processes, governance,

reporting, scenario analysis, strategy, and ﬁnanc

ial plann

ing.

2. Recognise and build for where Climate Risk is different.

Climate Risk is likely to crystallise over much longer time

horizons and is inherently diff

icult to quant

ify. 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.

Lim

itat

ions with exist

ing tools and data

We recognise that there are lim

itat

ions when assessing

Climate Risk, given approaches to quantify

ing Cl

imate Risk

are nascent and data availab

ity and coverage across our

clients continue to present challenges. This is particularly true

in emerging markets where Climate Risk-related disclosure

and preparedness can be less advanced. We have seen

lim

itat

ions in coverage, granularity of informat

ion at cl

ient

group and entity level and timel

iness of data lead

ing to the

use of proxies such as regional and/or sector averages and

sovereign heatmaps. Most tool outputs do not factor in

exist

ing adaptat

ion measures, governmental polic

ies to

protect and build for changing climate, and structural

adaptation e.g., age and quality of construction or ﬂood

defences and dams protecting the property. Over time,

sovereigns and policymakers are also expected to drive

market trends such as investment in adaptation plans,

technological advancements, innovat

ive r

isk transfer and

mit

igat

ion approaches to combat the potential impacts

of climate change. Such assumptions are not factored into

our analysis.

Managing Climate Risk

Our climate toolkit – Processes for ident

ify

ing and assessing Climate Risks

We have invested in a number of toolkits and partnerships to quantitat

ively measure cl

imate-related physical and transit

ion

risks and we have conducted scenario analysis across a range of plausible scenarios in 2023. We continue to engage with our

clients to understand their climate adaptation, mit

igat

ion and transit

ion plans. In 2024 and beyond, we a

im to reduce reliance

on third-party models with the development of our internal carbon elastic

ity and IFRS 9 expected cred

it loss models includ

ing

climate-related impacts.

Toolkits and

Partnerships

Descript

ion

In-house

Climate Risk

Questionna

ires

Client-level Climate Risk Questionna

ire (CRQ) to assess and gather

informat

ion on cl

ient mit

igat

ion and

adaptation plans. The informat

ion gathered through these CRQs form part of the Cl

ient-level Climate Risk

Assessments (CRAs).

Munich Re

Physical Risk assessment tool built on extensive re-insurance experience to obtain location-based hazard and risk

scores under current day for acute weather events (e.g., storms, ﬂoods, or wildf

ire) and longer-term t

ime horizons

(2050, 2100) for Representative Concentration Pathway (RCP) scenarios 2.6, 4.5 and 8.5, and for chronic risks such

as sea level rise.

Baringa Partners

Scenario expansion models and expertise used to design bespoke short-term scenario narratives and build

scenarios for management stress tests and implement them with

in the Aladd

in Climate transit

ion r

isk models.

BlackRock

Aladdin Climate transit

ion r

isk models are used to translate the impact of transit

ion and Phys

ical Risk scenario

variables on company ﬁnanc

ials and probab

ies of default, and obtain temperature alignment results to assess

a temperature score to ind

icate cl

ient- and portfolio-level global warming potential up to 2030.

S&P Global

Asset locations, energy mixes and client-level emiss

ions

i.e., 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 ava

ilable, for Scope 3 emiss

ions.

Imperial College

London

Academic expertise leveraged to advance our understanding of climate science, upskill our employees and

senior management, and progress independent research on climate risks with a focus on emerging markets.

The inclus

ion of the Aladd

in Climate analytics, based on models from BlackRock, contained in this report should not be construed as a characterisat

ion

regarding 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 result

ing from lim

itat

ions inherent in the nature and the methods used for determin

ing such data. The Aladd

in 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.

127

Standard Chartered

– Annual Report 2023

Sustainab

ity review

We have seen an improvement in data coverage since the

creation of our Climate Analyst team in the ﬁrst line of

defence and Relationsh

ip Managers engag

ing clients to close

data gaps. Addit

ionally, we are

in the process of setting up a

centralised data store which will capture all sustainab

ity-

related data for our clients, includ

ing mon

itor

ing of the data

quality, and reduce the usage of proxies over time. We

recognise that data coverage will keep pace with client

disclosures and reporting, which is likely to be aligned with

timel

ines on sovere

ign requirements and commitments. This

places some reliance on proxy informat

ion, and we w

ill reﬁne

our evaluations and methodologies progressively as the

availab

ity and quality of data improves.

The data we have captured through various sources has

helped us develop our 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 our portfol

ios.

Integrating climate-related risks into overall risk management, client segments and own operations

We manage Climate Risk according to the characterist

ics of the

impacted Princ

ipal R

isk Types (PRTs). Risk Framework Owners

for the impacted PRT are an integral component of the Enterprise Risk Management Framework (ERMF) and responsible for

embedding Climate Risk requirements with

in the

ir respective risk types. In 2023, we have continued to build Climate Risk into

exist

ing r

isk management frameworks and processes. The areas where we have made progress to embed Climate Risk

considerat

ions w

ith

in the ﬁrst l

ine of defence and across PRTs are listed in the following table.

Impacted Risk Type

Key updates in 2023

Next steps

Page

Credit Risk – CCIB

Disrupt

ion to cl

ients’ business

models due to physical or

transit

ion r

isk impact

ing the

proﬁtabil

ity and thereby

affecting their capacity to

repay debt, or the capital

and collateral required to

back the loan.

•

Completed ~4,100 Climate Risk Assessments (CRAs)

accounting for ~85-90 per cent of our corporate

portfolio lim

its.

•

Established linkages to Credit Underwrit

ing Pr

inc

iples

for four sectors (Oil and Gas, Shipp

ing, Commerc

ial

Real Estate (CRE) and Min

ing), spann

ing climate-

related analysis, portfolio-level caps and addit

ional

data gathering measures.

•

Designed Version 3 of the Climate Risk Questionna

ire

with sector-specif

ic nuances and cover

ing questions

related to net zero and Credible Transit

ion Plans

(CTPs).

•

Established a Net Zero Climate Risk Working Forum

to discuss account plans and risk decis

ions on h

igh

Climate Risk and net zero divergent clients.

•

Init

iated work on bu

ild

ing our approach to assess

physical and transit

ion r

isk to underlying collateral

specif

ically for CRE and Sh

ipp

ing portfol

ios.

•

Assessed the impact of climate risks for

approximately 95 per cent of our CCIB portfolio

under different climate scenarios.

•

The ﬁrst-generation transit

ion r

isk models. for

Corporates (prior

ity sectors

includ

ing O

il & Gas,

Min

ing, Steel and Power, and a gener

ic Carbon

Elastic

ity Model), Sovere

ign, as well as the

Temperature Alignment models for Automotive

Manufacturers, Oil and Gas, Steel, and sector

agnostic models have been developed.

• Enhance portfolio

management and oversight

on clients exposed to

climate-related risks with

the credit decis

ion

ing

processes.

•

Enhance quality and

streamlin

ing underly

ing

client-level assessments

across ﬁnancial and

non-ﬁnancial

impacts from

ESG risks includ

ing cl

imate

and net zero.

•

Upskill all impacted client

relationsh

ip staff

includ

ing

credit ofﬁcers with a net zero

certif

icat

ion.

•

Build Physical Risk grading

capabil

ies.

300

Credit Risk – CPBB

Physical risks, such as ris

ing sea

levels and severe ﬂood events,

could adversely impact

repayment abil

ity through

damages to properties or loss

of insurance cover, leading to

potential increases in credit

losses or due to changes in the

economic environment as the

economy transit

ions towards

lower emiss

ions.

•

We now assess physical risk for 79 per cent and

transit

ion r

isk for 54 per cent of our CPBB credit

portfolio as of September 2023.

•

We have quantif

ied the trans

ion r

isk for our top

consumer mortgage markets using energy bills data,

where available and proxies based on ﬁnanced

emiss

ions, wh

ile util

ing actual energy performance

certif

icate data for the markets where th

informat

ion

is available (currently only Jersey).

•

Worked with Imperial College London to enhance the

Retail Mortgages physical risk approach (through

Property Price Index haircut), for usage in stress

testing exercises.

•

Expand our scenario analysis

capabil

ies for CPBB across

physical and transit

ion r

isks.

•

Continue to reﬁne the

transit

ion r

isk approach to

enable factoring in the

impact from transit

ion r

isk

on underlying collateral.

298

Physical Risk

Transit

ion R

isk

128

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Impacted Risk Type

Key updates in 2023

Next steps

Page

Operational and

Technology Risk

Impact of acute or chronic

physical risks may disrupt our

own properties, data centers

and third parties leading

to business disrupt

ions.

Furthermore, increased

costs may arise through

implementat

ion of pract

ices

such as renewable energy

sources and waste reduction

to reduce emiss

ions.

•

Physical risk scenarios impact

ing our s

ites and

causing disrupt

ion to serv

ices are assessed for loss

estimates.

•

New sites onboarded with

in the Group are assessed

for physical risk vulnerabil

ies.

•

Third-party continu

ity plans have been enhanced to

include climate risk related disrupt

ions.

•

Gather site locations for our

material vendors to assess

their physical risk exposures,

such that suitable continu

ity

plans can be developed.

308

Country Risk

Both Physical and Transit

ion

risks can have a direct impact

on a sovereign’s economic

strength and increase their

cost of borrowing, directly

impact

ing overall

creditworth

iness.

•

Our methodology for Physical and Transit

ion R

isk

Sovereign Rankings serves as an input into the

annual sovereign reviews and quarterly early

warning ind

icators.

•

We have developed Climate Risk report cards for

approximately ~30 sovereigns covering 75% of GCR

exposure across our footprint, which provide a

detailed breakdown of the Physical and Transit

ion

Risk scores, along with key takeaways and histor

climate disaster statist

ics.

•

We have built an in-house Sovereign climate model

that forecasts Sovereign credit grades across the

various NGFS scenarios.

•

Country lim

it benchmark computat

ions consider

climate factors.

•

Enhance our methodology

for the assessment of

sovereign physical risks to

lim

it rel

iance on static data

sources from external

research and expand

coverage to include

nature/biod

ivers

ity risks.

306

Reputational and

Sustainab

ity Risk

Potential for stakeholders to

view the Group negatively due

to actual or perceived actions

or inact

ions

in response to

our stated climate, ESG and

net zero commitments.

Increasing expectations from

governments, regulators,

NGOs, investors, and

ind

iduals heightens

reputational risks.

•

Addit

ional due d

igence

is conducted to support

client or transaction level assessments for (i) clients

covered by the Group’s net zero targets for high-

carbon sectors (Oil & Gas, Power, Steel, Alumin

ium,

Cement, Automobiles, Shipp

ing, Av

iat

ion & CRE) (

clients with a coal nexus as well as (i

i) those assessed

as high climate risk.

•

Governance standards and new controls rolled

out to mit

igate the greenwash

ing risk throughout

the lifecycle of Sustainable Finance products. The

controls aim to ensure accurate Sustainable Finance

labelling and ongoing monitor

ing of cl

ients, products,

and transactions, and are continuously reviewed and

tested for control effectiveness, bearing in mind the

changing regulatory landscape and innovat

ion

Sustainable Finance.

•

Established key management informat

ion to track

divergence of net zero pathways from group-level

sector targets to aid the monitor

ing of the

impact of

climate risk on various portfolios.

•

Increase in the pace and

variety of Regulations

around Sustainab

ity with a

focus on greenwashing will

be a key prior

ity for 2024.

•

Ensure framework and

controls consider new

regulations and the controls

are embedded in an

effective manner.

305

Traded Risk

Acute physical risk events or a

disrupt

ive trans

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 these

risks are not yet incorporated

into prices.

•

The Traded Risk stress testing framework covers

market impacts from Climate Risk, includ

ing an

assessment of transit

ion effects from cl

imate change

polic

ies and two phys

ical risk scenarios as part of the

global Traded Risk scenarios inventory. These ﬂow

into exist

ing Traded R

isk Appetite metrics.

•

Extend the tail scenario

narratives developed for the

CCIB portfolio to develop

transit

ion r

isk scenarios

for the trading book and

implement enhancements

related to Market Risk

factors and shorter-term

shocks.

308

Physical Risk

Transit

ion R

isk

129

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Impacted Risk Type

Key updates in 2023

Next steps

Page

Treasury Risk

Impact on client business

models and their overall

ﬁnancial stab

ity from

transit

ion to a low-carbon

economy can impact capital

adequacy and/or liqu

ity

levels needed to ensure

ﬁnancial stab

ity dur

ing

periods of stress.

•

Progressed towards a more quantitat

ive approach as

we continue to consider capital requirements as part

of the Group Internal Capital Adequacy Assessment

Process (ICAAP).

•

Commenced monitor

ing of cl

imate risk-related

vulnerabil

ies and readiness of our top corporate

liqu

ity providers, leveraging our client-level climate

risk assessments.

•

Review risk pockets with

high Climate Risk and net

zero divergent sectors as

part of the ICAAP.

•

Advance our capabil

ies to

assess Climate Risk as part of

the Internal Liqu

ity

Adequacy Assessment

Process (ILAAP).

309

Model Risk

Model Risk may exist from

inappropr

iate des

ign /

specif

icat

ion / development /

governance of a model relative

to the intended business

objectives and/or

ineffect

ive

model remediat

ion

in response

to issues ident

iﬁed by model

validat

ion.

•

The ﬁrst-generation of internal models have been

developed and are in various stages of model

governance.

•

Target to enhance physical

risk modelling capabil

ies,

advancing sector models to

factor in sector-specif

nuances and build

ing carbon

elastic

ity models for Sh

ipp

ing

and Automobile.

•

Implementation of models

with

in the Group’s

infrastructure.

309

Physical Risk

Transit

ion R

isk

Investing in Climate Risk research

Since the launch of our four-year partnership with Imperial College London in 2020, the Group has sponsored a series of

public research projects. As part of our ongoing academic partnership, 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. In 2023 we have cooperated with Imperial College London on three specif

ic projects:

1. Asset haircuts

For our key resident

ial mortgage markets, we have

collaborated with our academic partner to develop an

internal model for revaluating property valuations under

different climate scenarios using the forward-looking risk

ind

ices from Mun

ich Re. These revaluations are then used to

inform haircuts on the property prices and arrive at climate

adjusted Expected Credit Loss values for the mortgage book.

2. Country Risk

The cooperation involves the construction of a methodology

used to project sovereign ratings along selected NGFS climate

scenarios for 40 target countries. The model develops a term

structure of sovereign Probabil

ity of Defaults (PDs) along

each climate scenario and associated projected ratings and

compares it with a term structure of sovereign PDs and ratings

in a counterfactual (non-climate change) scenario.

3. Cross-sectoral impl

icat

ions of transport electrif

icat

ion

in India

Exploring the potential impact of introduc

ing a leg

islat

ive

requirement for the switch to electric vehicles (EVs), includ

ing,

but not lim

ited to supply cha

in management, the strain

on exist

ing power supply (as some reg

ions are already

experienc

ing regular blackouts), and the need for expans

ion

of the power grid to support the connection of the required

number of chargers. The research has been completed and

preparations for the publicat

ion have been made.

130

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Integrity, conduct and ethics

Good conduct is crit

ical to del

iver

ing pos

ive outcomes for

our clients, markets and stakeholders. It is fundamental to

achiev

ing our brand prom

ise, here for good. Conduct Risk

may arise anywhere in the Group at any time. The Group

therefore expects all employees to be responsible for

managing Conduct Risk given it is a transversal risk, which

means it impacts every aspect of the Group’s operations.

Our Conduct Risk management approach has been

strengthened since 2022 through several in

iat

ives,

includ

ing launch

ing the new Group Conduct Risk

Management Standard, which sets min

imum standards for

the management of Conduct Risk across our operations.

The Group employs a risk-based, three lines of defence

approach to Conduct Risk management, where oversight,

governance and controls applied are proportionate to our

assessment of the risk. We set target Conduct Outcomes that

the Group aspires to deliver for clients, external stakeholders,

employees, and the environment.

We aim to live our valued behaviours,

which are ‘Never settle’, ‘Better together’

and ‘Do the right thing’ through our actions,

decis

ions and

interact

ions day-to-day w

ith

colleagues and clients.

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 2023, 99.8 per cent of our colleagues

completed the mandatory train

ing and afﬁrmation.

Colleagues who are overdue without a valid reason are

subject to a 25 per cent reduction in their annual variable

compensation for the year they failed to attest.

99.8

of employees afﬁrmed recommitment to our Code annually

Code of Conduct and Ethics

The Code of Conduct and Ethics (the Code) remains the

primary tool through which we communicate our conduct

expectations. In October 2023, we launched the refreshed

Code to improve alignment with our Stands, strengthen the

link between ethics, culture, conduct, and the Group’s strategy.

The Code is intended to be more than a guidance document:

rather, it is a code to live by, designed to guide colleagues

through how to live our valued behaviours on a day-to-day

basis, whatever their business, function, region, or role. We

have made the Code more user friendly, interact

ive and

accessible to all colleagues. The Code also includes more

content on ethical leadership, the way we use personal data,

having a culture of inclus

ion and feel

ing safe to speak up.

Download our Code of Conduct and Ethics at

sc.com/codeofconductandethics

and vis

sc.com/speakingup

to ﬁnd more about how our Speaking Up programme works

131

Standard Chartered

– Annual Report 2023

Sustainab

ity review

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 protect 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 or corruption.

A particular focus of our ﬁnanc

ial cr

ime invest

igatory teams

is 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 2023,

enhanced monitor

ing was conducted dur

ing major elections

and times of polit

ical trans

ion or conﬂ

ict, for example in

Niger

ia, S

ierra Leone and Zimbabwe.

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 remains

a sign

iﬁcant area of focus for teams across the ﬁrst and second

line of defence.

Speaking Up

Our Speaking Up programme provides a safe, independent

and conﬁdential way to report concerns. It helps bu

ild and

mainta

in a strong eth

ical culture, with integr

ity, trust, and

transparency. The early disclosure of concerns reduces the

risk of ﬁnanc

ial and reputat

ional loss caused by misconduct.

We encourage colleagues, contractors, clients, suppliers and

members of the public to use our Speaking Up programme

without fear of retaliat

ion. When a concern

is raised, our

Shared Investigat

ive Serv

ices team will determine whether the

matter is a Speaking Up disclosure or if it is an out-of-scope

disclosure. Examples of Speaking Up concerns may include

breaches of regulatory requirements or breaches of Group

policy or standards. Out-of-scope disclosures will be referred

to the appropriate internal teams. If a matter is considered a

Speaking Up Disclosure, relevant Shared Investigat

ive Serv

ices

and/or Employee Relations colleagues will conduct fact-

ﬁnding

into the matter, with any follow-up action taken as

required following the fact-ﬁnd

ing process.

Throughout 2023, 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 recognise Whistleblowers’ Day on

23 June, the Global Head of Conduct, Financ

ial Cr

ime and

Compliance issued a Group-wide communicat

ion underl

ing

the importance of Speaking Up. A World Whistleblowers’ Day

panel discuss

ion was held, cover

ing Speaking Up and ESG

(Environmental, Social and Governance) topics, with Group

Independent Non-Executive Director and Whistleblow

ing

Champion Phil Rivett as a panellist.

This event was part of the wider Global Conduct Week from

19 to 23 June, themed ‘Be the Change’, which encouraged

colleagues to think about how their ind

idual actions on

a daily basis can aggregate to a much wider impact on

outcomes for our clients, customers and other stakeholders.

In addit

ion,

in October 2023, a Group-wide panel discuss

ion

was held to celebrate Global Ethics Day, with the theme ‘Ethics

Empowered’. All campaigns included interact

ive messages

from our senior leaders and live panel discuss

ions des

igned to

both set the tone from the top and nurture it from with

in.

The Speaking Up programme continues to be util

ised

across all countries, businesses and functions, and our

2023 MyVoice survey found that 88 per cent of employees

(no change from 2022) felt comfortable rais

ing concerns

through these channels. The Board reviews a Speaking Up

report annually. For the period July 2022 to June 2023 a

three per cent (34 cases) decrease was noted in the volume

of total disclosures via Speaking Up channels compared

with the previous period (i.e. July 2021 to June 2022).

of employees in our MyVoice survey felt comfortable rais

ing

concerns through Speaking Up channels

We have invested sign

iﬁcantly to ensure our employees

are properly equipped to combat ﬁnanc

ial cr

ime. In 2023,

99.9 per cent of colleagues and governance body members

completed ﬁnancial cr

ime mandatory e-learnings which

cover topics such as ABC, AML includ

ing terror

ist ﬁnanc

ing,

sanctions, tax evasion and fraud topics (Asia: 99.9 per cent,

AME: 99.8 per cent, EA: 99.8 per cent, Governance body

members: 100 per cent).

99.9

of colleagues and governance members completed ﬁnancial

crime mandatory e-learnings

Vis

it our

Speaking Up programme’s website

https://secure.ethicspo

int.

eu/domain/media/en/gui/108379/index.html

132

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Responsible lending and fair treatment of our customers in our CPBB segment

The Group’s Board of Directors provides oversight of the

Group’s treatment of customers through its reporting and

committee structures. The relevant governance forum or Risk

Committee is required to challenge the business for any new

or material product proposals prior to the commencement of

the product approval process.

Escalations may be taken to the CPBB Risk Committee chaired

by the CPBB Chief Risk Ofﬁcer or the Group Risk Committee

chaired by the Group Chief Risk Ofﬁcer, and ultimately to the

Group’s Board and Board Risk Committee. Oversight and

governance of Collections is performed by the CPBB Risk

function with regular reviews of performance metrics and

complaints-handling data.

Complaints management

Formal avenues are established for CPBB customers to lodge

complaints. A complaints-handling process has been put in

place to enable the proper receipt, acknowledgement and

independent and effective handling of complaints, which

are to be resolved and notif

ied to customers w

ith

in a

reasonable turnaround time without compromis

ing the

quality of the review.

At the global level, key complaints ins

ights, trends and

root causes are provided to the CPBB Risk Committee every

month. Examples of key metrics that are used to track and

manage complaints across CPBB markets include: total

number of complaints received in the month split by type

and root cause, includ

ing sub-categor

ies such as potential

inappropr

iate sales, proven m

is-selling or fraud, and

percentage of complaints resolved with

in the pre-

determined turnaround time.

Loan modif

icat

ions

Where possible, practical support programmes may be

offered to customers experienc

ing ﬁnancial d

iff

iculty. Loan

modif

icat

ion options that may be offered to our customers

take into account the most recently available informat

ion

on the customer’s income, expenditures and circumstances.

Collections staff managing these arrangements are trained

to discuss options thoroughly with customers in order that

any restructured payments, if agreed, are kept affordable.

Collections

Across the Group, while the approach may vary across

markets in line with local regulations, programmes to assist

retail banking borrowers in ﬁnanc

ial d

istress are handled by

Collections teams.

The expectation on the Bank’s Collections teams include

meeting the following requirements:

•

Provid

ing a fa

ir and reasonable treatment regarding any

late fees

•

Align

ing call

ing and vis

itat

ion hours to local regulations

and practices

•

Updating the ﬁnanc

ial status of customers on a t

imely basis

in our systems to support fair treatment

•

Having all customer interact

ions w

ith the Collections

teams, complaints and feedback monitored and regularly

reviewed

All Collections staff responsible for dealing with customers

in ﬁnanc

ial d

istress are trained prior to commencement

of collection activ

ies, and in particular, are required to be

famil

iar w

ith the Bank’s Code of Conduct and Ethics. Where

external collections agencies are util

ised, these agenc

ies

undergo assessment and due dil

igence

in accordance with

Group sourcing standards and their staff must undertake the

same train

ing as the Group’s

internal Collections teams.

Fight

ing ﬁnancial cr

ime

continued

For those in high-risk roles and functions, we delivered

addit

ional tra

ing across all ﬁnancial cr

ime areas, includ

ing

in-depth awareness on Russia sanctions, ABC train

ing for

targeted roles, train

ing on tax evas

ion risks, trade AML, and

money laundering risks concerned with money mules and

shell companies. We also delivered new train

ing modules

on ﬁnancial cr

ime risks in ﬁntech and dig

ital assets. In

addit

ion, masterclasses and forums were held to deepen

understanding. We shared our Supplier Charter, which sets

out our princ

iples and expectat

ions, and provides guidance

related to ABC, with 11,563 suppliers and third parties across

48 markets.

This was supported by our Group-wide ﬁnanc

ial cr

ime

awareness campaign, ‘The Whole Story’, which aimed to

raise employee awareness of the real-life impact of ﬁnanc

ial

crime 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 ﬁnanc

ial cr

ime. The Whole Story 2023 theme of ‘Let’s

get #ﬁghtingﬁt’ focused on how we can reboot and recharge

the ﬁght against ﬁnanc

ial cr

ime and play a part in driv

ing the

right outcomes for our clients, through the right conduct and

culture, vig

ilance and r

isk management.

Collaborative in

iat

ives

Our public-private partnerships are aimed at producing new

ins

ights about var

ious crim

inal typolog

ies and advances in

how we collectively combat ﬁnanc

ial cr

ime in an increas

ing

number of jurisd

ict

ions,

includ

ing S

ingapore, Hong Kong,

South Africa, India, the UK and UAE.

Throughout 2023, 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, Madison Group and

UK Finance.

We also partic

ipated

in discuss

ions and forums w

ith many

external thought leaders includ

ing part

ipat

ion with the

World Economic Forum’s Partnering Against Corruption

Init

iat

ive and United Nations Ofﬁce on Drugs and Crime,

in addit

ion to host

ing events with clients designed to foster

dialogue on the tackling of ﬁnanc

ial cr

ime.

For more, vis

sc.com/ﬁghtingﬁnancialcr

ime

133

Standard Chartered

– Annual Report 2023

Sustainab

ity review

Respecting human rights

We strive to be a responsible company and respect human

rights across our business. We recognise that the global

nature of our business may expose us to the risk of modern

slavery and human trafﬁcking

in our operations, supply chain

and client relationsh

ips and we are comm

itted to managing

and mit

igat

ing these risks. Our Modern Slavery Statement

details our approach and actions to manage modern slavery

risks across our value chain.

Read our Modern Slavery Statement at

sc.com/modernslavery

Due dil

igence

is a central part of our approach in assessing

and managing risks associated with the provis

ion of ﬁnancial

services to our clients. We approach this due dil

igence

accordance with our Environmental and Social Risk

Management (ESRM) and Financ

ial Cr

ime Compliance

(FCC) frameworks.

Our Posit

ion Statement on Human R

ights is a key part of our

framework and was developed following engagement with a

range of external stakeholders, includ

ing expert pract

ioners

and civ

il soc

iety organisat

ions. L

ike our cross-sector Posit

ion

Statements, the Human Rights Posit

ion Statement appl

ies to

our clients, suppliers and employees and is regularly reviewed

to ensure it addresses emerging risks and issues.

Read more about our ESRM Framework and Posit

ion Statements

sc.com/esriskframework

sc.com/posit

ionstatements

Standard Chartered will not enter into relationsh

ips w

ith

suppliers involved in human trafﬁck

ing, modern slavery, or

forced labour. Suppliers that are ident

iﬁed as present

ing

higher risks of modern slavery are subject to enhanced due

dil

igence. Our Suppl

ier Charter sets out the princ

iples for

the behavioural standard that Standard Chartered expects

from all its suppliers, and those with

in a suppl

ier’s sphere of

inﬂuence that assist them in performing their obligat

ions to us.

Read our Supplier Charter at

sc.com/suppliercharter

Our Fair Pay Charter sets out the princ

iples by wh

ich we seek

to deliver fair and competit

ive remunerat

ion to all employees.

We use these princ

iples to gu

ide reward and performance

decis

ion-mak

ing globally, includ

ing how we set, structure

and deliver remuneration. Further informat

ion on our

alignment to the Fair Pay Charter can be found in our

2023 Divers

ity, Equal

ity and Inclusion Report available at

sc.com/divers

ityfa

irpayreport

134

Standard Chartered

– Annual Report 2023

Directors’ report

136

Group Chairman’s governance overview

137

Board of Directors

142

Management Team

145

Corporate governance

182

Directors’ remuneration report

208

Addit

ional remunerat

ion disclosures

217

Other disclosures

229

Statement of Directors’ responsib

ies

Directors’ report



Liverpool FC

and Standard

Chartered

encourage girls

to ‘Play On’



In May, alongside our long-time

partners Liverpool FC, we launched

‘Play On’, our four-year campaign

aimed at encouraging girls to play

sport because of the transferable life

skills it teaches off the pitch. As well as

rais

ing awareness that tw

ice as many

girls than boys drop out of sport by age

14, the programme delivers physical

support and train

ing for female

grassroots coaches in our key markets.

The campaign also provides a dig

ital

repository where girls, teachers,

coaches and parents can access

useful resources.

Read more at

sc.com/playon

135

Standard Chartered

– Annual Report 2023

Directors’ report

136

Standard Chartered

– Annual Report 2023

Directors’ report

Group Chairman’s governance overview

Group Chairman’s

governance overview

“In times of uncertainty, a robust

corporate governance framework

is especially important.”

Dr José Viñals

Group Chairman

The Remuneration Committee continues to work hard to implement

the remuneration strategy approved in 2022. Our Directors’

Remuneration Report, which details the key activ

ies of the

Remuneration Committee in 2023, can be found on page 182.

In January, we appointed Linda Yueh as an independent Non-

Executive Director (INED). Linda then succeeded Jasmine Whitbread

as chair of the Sustainab

ity and Culture Committee (CSC) following

Jasmine’s retirement from the Board in May. Jasmine has been an

excellent contributor to the Board across her eight years and has led

the CSC with dist

inct

ion. We are also very sorry to see the departure

of Andy Halford, who stepped down from his Group Chief Financ

ial

Ofﬁcer (GCFO) role in January 2024, after a tenure of over nine years,

marked by his very sign

iﬁcant contr

ibut

ions to the Group.

We welcomed Diego De Giorg

i to the Group

in September 2023 as

GCFO Designate, following a thorough external talent mapping and

selection process overseen by the Governance and Nominat

ion

Committee (GNC). Following regulatory approval, Diego began his

role in January 2024 following a thorough induct

ion programme and

handover from Andy. Further detail regarding the changes made to

our Board appears in the GNC report starting on page 177.

We have been following the proposals for UK Audit and Corporate

Governance (ACG) reforms, both at Board level and across our

committees. Following the Financ

ial Report

ing Council (FRC)

publicat

ion of the UK Corporate Governance Code 2024, we are

consider

ing the changes

in readiness for the applicat

ion of the new

UK Code in 2025, and addit

ional

internal control reporting provis

ions

coming into force in the following year.

We travelled to a number of markets as a Board during 2023, with

vis

its to Hong Kong, Jakarta and Seoul;

in addit

ion, onward market

vis

its were made by a number of d

irectors to obtain an on-the-ground

perspective of the business, opportunit

ies and challenges faced. In

each market we vis

ited as a Board, employee engagement sess

ions

were held where directors met and listened to colleagues from across

our footprint, either face-to-face or through hybrid mechanisms.

We welcomed the opportunity to engage with so many of our valued

colleagues, both long-standing employees and newer recruits. These

market vis

its prov

ided an opportunity to test enhancements made to

the Board’s workforce engagement model, which facil

itate more face-

to-face contact following our emergence from the COVID pandemic.

Details of the changes to our workforce engagement model are set

out in the CSC report on page 174. Apart from allowing us to connect

with colleagues from across our footprint, overseas board vis

its also

provide opportunit

ies for the Board to strengthen the l

inks with

subsid

iary boards. The Board

is planning to vis

it several countr

ies

across our footprint in 2024. Further detail regarding Board

engagement with stakeholders appears on page 157.

Engagement with all stakeholders, includ

ing, of course, our

investors is

key to our decis

ion-mak

ing. I hosted a stewardship event in November

alongside the chairs of the Audit and Remuneration Committees to

provide an update regarding the Group’s strategy, includ

ing w

ith

respect to sustainab

ity, and on the work of our Board committees.

Close engagement has continued between the Board and our

subsid

iary boards, through regular exchanges among the cha

irs,

committee chairs and other INEDs.

The Corporate Plan is an important part of the Board’s agenda each

year. In June, we held a deep and productive two-day strategy

discuss

ion, wh

ich considered any impact from the economic and

polit

ical headw

inds emerging in 2023. The session concluded with

the Board’s ﬁrm belief that it remains the right strategy for the Group.

Throughout the year, the Board considered a number of strategic

opportunit

ies for growth

in the context of our Corporate Plan and

Risk Appetite.

Finally, the Board remains conﬁdent for the Group’s future and is

committed to our strategy and 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 uncertaint

ies

in our markets

caused by the multiple geopolit

ical and macroeconom

ic events

affecting the year. These require our close attention given their abil

ity

to impact our various businesses in quite different ways. The Board

has monitored these developments carefully and proactively,

devoting agenda time at the Board and across our committees and

also consider

ing them at the Group’s Internat

ional Advisory Council

(IAC), which includes representatives from our Management Team.

The Board also received a series of brief

ings from

internal and

external experts who provided valuable ins

ights from the

ir diplomat

ic,

central banking, economic, regional and polit

ical vantage po

ints to

help us prepare for events which may occur in the future. In the same

vein, the Board Risk Committee (BRC) and Audit Committee (AC)

jointly held a Blue Sky Th

ink

ing sess

ion on forward-looking geopolit

ics

and their impact on the work of those committees. The session was

facil

itated by Robert Zoell

ick, the Chair of our IAC.

In times of uncertainty, a robust corporate governance framework is

especially important, and this report sets out how the Board and our

committees work to ensure that risks are addressed, opportunit

ies are

taken, and the Group continues to deliver sustainable value.

The Board was disappo

inted w

ith the market reaction to the Group’s

third-quarter results. We considered carefully the reasons for that with

our advisers and also at our December Board meeting, from which we

drew a number of lessons.

The Board’s prior

ies for 2023 were guided by our business object

ives,

the environment in which we operate and suggestions from last year’s

externally facil

itated Board evaluat

ion. These were woven into

agendas at the beginn

ing of the year and rev

iewed regularly.

In February 2023, the banking sector faced volatil

ity caused by the

collapse of the Sil

icon Valley Bank wh

ich was followed by that of

Credit Suisse. The BRC monitored the situat

ion carefully, rece

ing

regular updates from management on our own ﬁnancial pos

ion

and actions to address issues aris

ing

in the markets. These were also

shared with the Board which also received updates at meetings.

Information and cybersecurity (ICS) risk was also a key area of focus

for both the Board and the BRC in 2023. The BRC devoted sign

iﬁcant

time to review

ing and d

iscuss

ing ICS matters,

includ

ing a new ICS R

isk

Appetite Statement that was also brought to the Board. The AC had

a very busy year, review

ing

internal controls and assurance around the

Group’s activ

ies. It paid close attention to the carrying value of loans

and investments in certain industr

ies, locat

ions and subsid

iar

ies,

especially China.

137

Standard Chartered

– Annual Report 2023

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 (69)

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 spokesperson

on ﬁnancial matters,

includ

ing global

ﬁnancial stab

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.

He is a past President of the International

Monetary Conference.

José has held many other board and advisory

posit

ions,

includ

ing cha

ir of Spain’s Deposit

Guarantee Fund, chair of the International

Relations Committee at the European

Central Bank, member of the Economic and

Financ

ial Comm

ittee of the European Union,

and chair of the Working Group on

Institut

ional Investors at the Bank for

International Settlements.

External appointments

José is Co-Chair

of the United Nations’ Alliance of Global

Investors for Sustainable Development

(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 Leadership Council of CityUK, and

member of the Business Advisory Group

to the Director General of the World Trade

Organisat

ion (WTO).

Committees

Bill Winters (62)

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 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, listed on SIX

Swiss Exchange. 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 leads the Management Team

As announced on 1 August 2022, Christ

ine Hodgson ret

ired from the Board on 31 January 2023. Jasmine Whitbread retired from the Board on

3 May 2023.

As announced on 21 December 2023, Andy Halford stepped down as Group Chief Financ

ial Ofﬁcer and from the Board on 2 January 2024,

and therefore will not seek re-election at the 2024 Annual General Meeting (AGM).

As announced on 16 February 2024, Gay Huey Evans will step down from the Board with effect from 29 February 2024. Carlson Tong’s departure

from the Board will take place on 9 May 2024, ahead of the AGM. Diane Jurgens will jo

in the Board as an INED, w

ith effect on 1 March 2024.

138

Standard Chartered

– Annual Report 2023

Directors’ report

Board of Directors

Diego De Giorg

i (53)

Group Chief Financ

ial Ofﬁcer

Appointed

January 2024. Diego was also

appointed to the Court of Standard

Chartered Bank in January 2024.

Experience

Diego has more than three

decades of experience in the global ﬁnanc

ial

services sector, working with clients across

the UK, Europe, the US, Asia, the Middle East

and Africa. This has helped him build a strong

understanding of the complexity of deliver

ing

across diverse markets.

Career

Diego spent 18 years at Goldman

Sachs, with leadership roles in the Equity

Capital Markets Group and the Financ

ial

Institut

ions Group before becom

ing the Chief

Operating Ofﬁcer for the Global Investment

Banking div

ion. Following this, he moved

to Bank of America Merrill Lynch, where he

spent six years, ris

ing to Head of Global

Investment Banking. He served as a

non-executive director at UniCred

it and a

member of their Compensation Committee

in 2020 and 2021.

From 2021, Diego was the Co-Chief Executive

of Pegasus Europe, Europe’s largest-ever

Special Purpose Acquis

ion Company (SPAC),

which was focused on the ﬁnanc

ial serv

ices

sector and was listed on Euronext

Amsterdam.

External appointments

Diego also sits

on the Board of the MIB Trieste School

of Management.

Shir

ish Apte (71)

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 (65)

Senior Independent Director

Appointed

January 2021. Maria was also

appointed to the Court of Standard

Chartered Bank in January 2021. She was

appointed as Senior Independent Director

in September 2022.

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

in 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 PLC and a non-executive

director of Compagnie Financ

ière R

ichemont

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 W

its

Foundation Board of Governors.

Committees

139

Standard Chartered

– Annual Report 2023

Directors’ report

Phil Rivett (68)

Independent Non-Executive Director

Appointed

May 2020. Phil was also

appointed to the Court of Standard

Chartered.

Experience

Phil has sign

iﬁcant profess

ional

accountancy and audit experience,

specif

ically focused

in the ﬁnanc

ial

services sector. He has a strong technical

accounting knowledge and understanding

of disclosure requirements. He has

broad ﬁnancial and bus

iness experience

especially of the ﬁnanc

ial serv

ices sector.

Career

Phil jo

ined Pr

icewaterhouseCoopers

(PwC) as a graduate in 1976, becoming a

Partner in 1986. He spent more than 30 years

at PwC and was lead relationsh

ip Partner

for several FTSE 100 companies, includ

ing a

number of internat

ional banks and ﬁnancial

services inst

itut

ions. He also has substantial

internat

ional exper

ience, having worked

with banks across the Middle East and Asia,

in particular China. He became Leader of

PwC’s Financ

ial Serv

ices Assurance practice

in 2007 and was appointed Chairman

of its Global Financ

ial Serv

ices Group in

2011. Phil has sat on a number of global

ﬁnancial serv

ices industry groups, producing

guidel

ines for best pract

ice in governance,

ﬁnancial report

ing and risk management.

External appointments

Phil is an

independent non-executive director

and Chair of the Audit Committee

at Nationw

ide Bu

ild

ing Soc

iety.

Committees

David Conner (75)

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.

Dr Linda Yueh, CBE (52)

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. 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. L

inda

was awarded a CBE for Services to Economics

in the New Year Honours List of 2023. Linda

was a Trustee of the Coutts Foundation and

Adviser to the UK Board of Trade.

External appointments

Linda is a Fellow

at St Edmund Hall, Oxford Univers

ity and

Adjunct Professor of Economics at London

Business School. She 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,

and an Associate Fellow at Chatham House.

Committees

140

Standard Chartered

– Annual Report 2023

Directors’ report

Board of Directors

Robin Lawther, CBE (62)

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. From 2018 to 2023, she

served as an independent non-executive

director of Nordea Bank Abp.

External appointments

Robin is

an independent board member of

Ashurst LLP and a member of the

advisory board at Aon PLC.

Committees

Jackie Hunt (55)

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.

She was also an independent non-executive

director of Man Group PLC, Rothesay Life

PLC and OneWeb Holdings Lim

ited.

External appointments

Jackie is an

independent non-executive director

of Will

is Towers Watson plc.

Committees

Gay Huey Evans, CBE (69)

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 40 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 2021. Gay is a former Chair

of the London Metal Exchange.

External appointments

Gay is 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

Franklin House.

Committees

141

Standard Chartered

– Annual Report 2023

Directors’ report

David Tang (69)

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 unt

il retir

ing

in June

2021. David was a non-executive director of

Kingsoft Corporation, a leading Chinese

software and internet services company

listed on the Hong Kong Stock Exchange.

External appointments

David jo

ined 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. He is also an adviser to NGP Capital.

Committees

Adrian de Souza (53)

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 PLC, Europe.

Reasons why the contribut

ion of 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 2024.

Carlson Tong (69)

Independent Non-Executive Director

Appointed

February 2019.

Experience

Carlson has a deep

understanding and knowledge of operating

in the ﬁnanc

ial serv

ices and regulatory

sectors in mainland China and Hong Kong.

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. He

is a board

member of Hong Kong Investment

Corporation Lim

ited and the Hong Kong

Stock Exchange.

Committees

142

Standard Chartered

– Annual Report 2023

Directors’ report

Management Team

Bill Winters (62)

Group Chief Executive

Diego De Giorg

i (53)

Group Chief Financ

ial Ofﬁcer

Simon Cooper (56)

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 Chian

School of Business.

Judy Hsu (60)

CEO, Consumer, Private

& Business Banking

Judy was appointed 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 was appointed

to the board of CapitaLand Investment

Lim

ited as a Non-execut

ive Independent

Director in June 2021.

Claire Dixon (51)

Group Head of Corporate Affairs,

Brand & Marketing

Claire jo

ined Standard Chartered as Group

Head, 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

working 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.

Claire is Chair of the Standard Chartered

Foundation.

External appointments

None.

143

Standard Chartered

– Annual Report 2023

Directors’ report

Sunil Kaushal (58)

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 36 years of

banking experience in diverse markets and

has been with Standard Chartered for over

26 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 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

None.

Tanuj Kapilashram

i (46)

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 (59)

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.

Mary Huen (56)

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 and the cha

irperson of the Board of

Standard Chartered Bank (Taiwan) Lim

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 and the Aviat

ion Development and

Three-runway System Advisory Committee.

She is also a representative of Hong Kong,

China to the Asia-Pacif

ic Econom

Cooperation (APEC) Business Advisory

Council, and holds Board posit

ions

in the

Hong Kong Tourism Board, the Hospital

Authority, and the Community Chest of

Hong Kong.

144

Standard Chartered

– Annual Report 2023

Directors’ report

Management Team

Sandie Okoro, OBE (59)

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

Services 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., 100 Women to Watch

by Female FTSE Board and received an OBE

for services to Divers

ity

in International

Finance in 2024.

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 (54)

Group Head Conduct,

Financ

ial Cr

ime and Compliance

Sadia Ricke (53)

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.

She is also a non-executive director of 25x25

Lim

ited and a Member of the Management

Board of Cambridge Endowment for

Research in Finance.

Sadia Ricke jo

ined the Bank

in February 2023.

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

Institut

ions Cred

it 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

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

in 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

Sadia became a

member of the International Financ

ial R

isk

Institute Foundation Board in February

2023 and was appointed as Vice-Chair in

March 2023.

Roel Louwhoff (58)

Chief Technology, Operations and

Transformation Ofﬁcer

Roel joined the Group

in November 2021

as Chief Dig

ital, Technology & Innovat

ion

Ofﬁcer, before becoming the Chief

Transformation, Technology & Operations

Ofﬁcer from 1 April 2022. He spearheads the

Bank’s Technology and Operations strategy

and the development of its technology

systems, business resil

ience framework and

infrastructure which support its clients and

employees globally and leads the innovat

ion

agenda of the Bank. Roel is also responsible

for leading bank-wide transformation, which

includes the dig

ital transformat

ion of the

Bank into an agile, dig

ital and future-focused

organisat

ion.

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 10 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.

Corporate

governance

Our stakeholders, their interests: driv

ing commerce and prosper

ity through our unique divers

ity

The Board is conscious of the need to create and mainta

in pos

ive stakeholder relat

ionsh

ips and spends s

ign

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.

These relationsh

ips were cons

idered extensively during Board and Committee meetings and in decis

ion-mak

ing, and

also in the ind

idual and collective engagements that took place throughout the year. Examples of this can be found

in the stakeholder engagement section on pages 157 to 161, with

in the feature sect

ions on the following pages and on

pages 54 to 64.

Clients

page 55

Regulators and

governments

page 57

Investors

page 57

Suppliers

page 58

Society

page 59

Employees

page 60

This section provides 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.

Code compliance

The directors are pleased to conﬁrm that the Company

continued to comply with the UK Corporate Governance

Code 2018 (UK Code) and the Hong Kong Corporate

Governance Code contained in Appendix C1 of the Hong

Kong List

ing Rules (HK Code) for the whole of the year

under review.

We share ins

ights

into how governance operates with

the Group and how we have applied the princ

iples set

out in the UK Code and HK Code in the pages that follow

and in particular on page 217. Copies of the UK Code and

the HK Code can be found at frc.org.uk and hkex.com.hk

respectively.

The Group conﬁrms that it has adopted a code of conduct

regarding directors’ securit

ies transact

ions on terms no less

exacting than required by Appendix C3 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.

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 217 to 228

Key areas of

Board discuss

ion

and activ

ies

during 2023

Strategy

Governance

Shareholder

and stakeholder

engagement

Risk

management

External

environment

Financ

ials and

performance

People, culture

and values

Directors’ report

145

Standard Chartered

– Annual Report 2023

146

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

Strategy

•

Reviewed the Group’s strategy over two days at a Board and

senior management offsite, discuss

ing progress, poss

ible

enhancements and conﬁrming that

it remains appropriate

•

Reviewed and approved the 2024–2028 Corporate Plan

as a basis for preparation of the 2024 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

•

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.

This included deep dives into the following areas:

– Information and Cybersecurity

– Private Banking

– SC Ventures

–

Hong Kong, South Korea, and the ASEAN region

•

Received and discussed regular corporate development

updates

•

Discussed and reviewed the Group’s sustainab

ity strategy

•

Discussed and reviewed the Group’s Transformation,

Technology & Operations strategy

•

Received updates on the Group’s investment in its associate

China Bohai Bank and on real estate investments in China

•

Approved the sale of its global aviat

ion ﬁnance leas

ing

business

•

Monitored the sales of its subsid

iar

ies in Angola, Cameroon,

The Gambia, and Sierra Leone, and its Consumer, Private &

Business Banking (CPBB) business in Tanzania

Key areas of Board discuss

ion and act

ies during 2023

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

and fully supported continu

ing the partnersh

ip 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

Driv

ing transformat

ion

with SC Ventures

SC Ventures, the Group’s innovat

ion, ﬁntech

investment and

ventures arm, was set up in 2018 and now encompasses a

portfolio of 36 ventures across four themes: Dig

ital Assets,

Sustainab

ity & Inclusion, Online Economy & Lifestyle and

SME & World Trade. In 2023, the Group completed the

restructuring and ringfenc

ing of SC Ventures’ act

ies.

With

in the Group, SC Ventures

is driv

ing a culture of

innovat

ion by scal

ing up intrapreneursh

ip, ﬁntech

engagement, and collaborating with the bank’s clients.

SC Ventures is continu

ing to bu

ild a sustainable ecosystem

of ventures and partners for the bank and accelerating

transformation in banking.

Given the size of the SC Ventures portfolio, the Board

considered how best to articulate its value both to the

organisat

ion and externally to

investors. The Board

scrutin

ised management’s plans

in respect to SC Ventures’

current and future business model. The Group will focus on

putting Ventures in a posit

ion where

it would help transform

the core bank.

Stakeholders

Clients

Investors

Employees

Risk management

•

Received and discussed brief

ings from management on

ICS matters, approved a revised ICS Risk Appetite and

completed train

ing on the top

•

Approved the Operational Resil

ience Self-assessment

•

Reviewed work on projects to replace and upgrade data

centres in Asia

•

Discussed macroeconomic headwinds and tailw

inds as both

risks and opportunit

ies for the Group

•

Reviewed and discussed risk reports from the Group Chief

Risk Ofﬁcer

•

Reviewed and approved the draft Group’s Resolvabil

ity

Assessment, delegating the ﬁnal approval to the Board Risk

Committee

•

Engaged with the Prudential Regulation Authority (PRA) on

the ﬁndings of the

ir 2023 Period

ic Summary Meet

ing Letter

•

Reviewed the FCA’s period

ic F

irm Evaluation Letter

•

Assessed progress in continu

ing to strengthen the Group’s

risk culture

•

Approved the Risk Appetite for 2024 which included a

considerat

ion of pr

inc

ipal r

isks

•

Approved the renewal of the Group’s insurance polic

ies for

2023/2024

•

Approved material changes to the Enterprise Risk

Management Framework

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

Spotlight

Blue Sky Think

ing sess

ion

facil

itated by Robert Zoell

ick,

a former President of the

World Bank and Chair of our

International Advisory Council

The Board Risk and Audit Committees jo

intly attended a

Blue Sky Think

ing sess

ion entitled the “Forward-Looking

Geopolit

ical

Agenda”. Robert Zoellick led the session by

introduc

ing three key meta-trends (technology

innovat

ion,

demographics and the environment) and three key

constituents (consumers, workers and investors). Drawing

upon analyses prepared by our Group Regulatory and

Public Affairs team, committee members considered the

interact

ion of meta-trends, key const

ituents and policy

levers. Committee members then analysed how key policy

and regulatory levers can be used in response to pressures

created by the meta-trends and constituents.

Stakeholders

Clients

Regulators and

governments

Investors

Suppliers

Society

Employees

147

Standard Chartered

– Annual Report 2023

Directors’ report

Stakeholders

Clients

Society

Employees

Stakeholders

Regulators and

governments

Investors

Clients

Financ

ials and performance

•

Monitored the Group’s ﬁnanc

ial performance

•

Approved the 2022 full year and 2023 half year results

•

Monitored and assessed the strength of the Group’s

capital and liqu

ity posit

ions

•

Considered the carrying value of the Group’s investments

•

Considered the Group’s approach to capital management

and returns

•

Approved a 2022 ﬁnal div

idend and 2023

inter

im d

idend

•

Approved two share buy-back programmes

•

Received half yearly updates on, and discussed, the

Group’s major investment programmes in 2023

•

Received half yearly updates on, and discussed, investor

relations matters

•

Approved the Group’s 2022 Country-by-Country Reporting

disclosures

People, culture and values

•

Approved the Group’s 2022 Modern Slavery Statement

•

Approved the Group’s refreshed Code of Conduct and Ethics

•

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

•

Reviewed 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

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. Geopolit

ical uncerta

int

ies and global

market trends were among the topics which were covered

this year.

Stakeholders

Clients

Regulators and

governments

Investors

Suppliers

Society

Employees

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 ﬁnancial performance

•

Received internal and external brief

ings and

input

across a range of subjects, includ

ing:

– global market trends

–

the global macro impact of geopolit

ical uncerta

int

ies

in the Middle East

–

China’s emergence from the COVID pandemic

– Russia-Ukraine war

– China/ US tensions

–

societal and business impl

icat

ions of global

demographic trends

–

strategic ins

ights

into global markets, geopolit

ics and

policy

– regulatory developments and updates

Key areas of Board discuss

ion and act

ies during 2023

continued

Spotlight

Div

idend payments and

share buy-backs

In 2023, the Board approved two div

idend payments and two

ordinary share buy-back programmes. As part of its decis

ion-

making process, the Board noted the importance of approving

distr

ibut

ions and other capital management activ

ies with

an appropriately prudent framework. Assurance was also

sought from management regarding the protection of the

Group’s capital posit

ion and

its abil

ity to execute planned

investment activ

ies for future growth. By November 2023,

the two share buy-back programmes in

iated during the year

successfully completed approximately $2 bill

ion

in shareholder

returns for 2023, complemented by a total div

idend payment

of $569 mill

ion. Th

is progress brings us closer to our goal of

achiev

ing at least $5 b

ill

ion

in shareholder returns by 2024.

Spotlight

Culture of Excellence

The Board considered the Group’s People Strategy and

discussed the extent to which object

ives could be

introduced to better measure the transformation of the

organisat

ion. They d

iscussed with management the

Group’s culture aspirat

ion, wh

ich is to encourage a culture of

ambit

ion, act

ion and accountabil

ity,

improve operational

efﬁciency and dr

ive client centric

ity through a culture of

high performance and execution. The Board noted the

importance of the People Strategy to the success of the

transformation of the business, and ultimately the delivery

of the Group’s strategic object

ives.

148

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

Key areas of Board discuss

ion and act

ies during 2023

continued

Spotlight

Appointment of the Group

Chief Financ

ial Ofﬁcer

In 2023, the GNC led the search process for a successor

to Andy Halford as GCFO. The GNC oversaw a

robust search and assessment process, conducted in

conjunction w

ith executive search ﬁrm Russell Reynolds,

which resulted in some exceptionally talented internal

and external candidates being interv

iewed and

considered. Diego De Giorg

i emerged as the preferred

choice, and jo

ined the Group as GCFO Des

ignate in

September 2023. He received a thorough induct

ion

and train

ing programme, meet

ing colleagues

and other stakeholders from around the Group’s

footprint. Following regulatory approval, Diego’s

appointment as GCFO took effect on 3 January 2024.

Stakeholders

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 2023 AGM

•

Engaged with clients, shareholders and regulators

•

Engaged with colleagues around the business throughout

the year

•

Hosting a stewardship event, with a focus on strategy,

includ

ing susta

inab

ity

•

Received bi-annual updates from Investor Relations, includ

ing

share price and valuation analysis, market engagement and

ownership analysis and sell-side sentiment

Governance

•

Monitored developments and trends in corporate

governance, focusing on changes proposed by the UK

Government, FRC and Hong Kong Stock Exchange

•

Noted and/or approved changes to the membership of the

Board’s committees, includ

ing the appo

intment of Linda Yueh

as the new Committee Chair of the CSC

•

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 (SCBHK) and

its Audit and Board Risk

committees

•

Undertook train

ing on d

irectors’ duties and the governance

landscape

•

Discussed and reviewed the independence, performance and

annual re-election of the non-executive directors

•

Approved the re-appointment of the independent adviser to

the Board on cyber security and cyber threats

•

Approved the replacement of the independent adviser to the

Board on ﬁnancial cr

ime with an annual externally-facil

itated

session on ﬁnanc

ial cr

ime risk

•

Authorised potential conﬂicts of interest relating to directors’

external appointments

•

Discussed the observations and themes aris

ing from the 2023

internal Board and committees’ effectiveness review ahead of

approving the 2024 Action Plan

•

Reviewed, and where appropriate, approved updates 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

Spotlight

Stewardship Event

The Group Chairman welcomed external investors

to our annual stewardship event in November

2023, alongside the chairs of the Board Audit and

Remuneration Committees. The event took a hybrid

format and was attended by investors representing

43 per cent of the Group’s shareholders by value.

The Group Chairman provided an update regarding

the Group’s strategy, includ

ing w

ith respect to

sustainab

ity, and was supplemented by opening

remarks from the Remuneration Committee Chair. The

Audit Committee Chair also discussed key updates on

the activ

ies of the Audit and Board Risk Committees

during the year. This was followed by a Q&A session.

Stakeholders

Investors

Clients

Regulators and

governments

Investors

Suppliers

Society

Employees

For a detailed overview of our strategy see

pages 24 and 25

Audit Committee

The Audit Committee is responsible for 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 the Conduct, Financ

ial Cr

ime & Compliance,

Group Internal Audit and the Group’s Statutory Auditor, Ernst &

Young LLP (EY).

page 162

Board Risk Committee

The Board Risk Committee is responsible for oversight and review

of the Group’s Risk Appetite Statement, the appropriateness

and effectiveness of the Group’s risk management systems and

the princ

ipal r

isks, includ

ing Cl

imate Risk, to the Group’s business.

Furthermore, it considers the impl

icat

ions of material regulatory

change proposals and due dil

igence on mater

ial acquis

ions

and disposals.

page 168

Culture and Sustainab

ity

Committee

The Culture and Sustainab

ity Committee is responsible for

oversight and review of the Group’s culture and sustainab

ity

prior

ies.

page 174

Governance and

Nominat

ion Comm

ittee

The Governance and Nominat

ion Comm

ittee is responsible for

oversight and review of Board and executive succession, overall

Board effectiveness and corporate governance issues.

page 177

Remuneration Committee

The Remuneration Committee is responsible for oversight and

review of remuneration, share plans and other incent

ives.

page 182

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.

Written Terms of Reference for the Board and its committees can be viewed at

sc.com/termsofreference

Board and committee structure: decis

ions, respons

ies and delegat

ion of authority

The Board delegates authority for the operational management of the Group’s business

to the Group Chief Executive for further delegation by him in respect of matters that are

necessary for the effective day-to-day running and management of the business. The Board

holds the Group Chief Executive accountable in discharg

ing h

is delegated responsib

ies.

Group Chief

Executive

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 142 to 144

Management Team

The Board sets the Company’s purpose, values and strategy. Under the Board’s Terms

of Reference, it is collectively responsible to shareholders for the governance, strategic

direct

ion and performance of the Company and the del

ivery of sustainable value with

a framework of prudent and effective controls to which the Company’s culture is aligned.

The Board is responsible for understanding the views and interests of key stakeholders and

for consider

ing those v

iews and interests during Board discuss

ions and dec

ion-mak

ing.

It is responsible for overseeing the Group’s conduct and affairs and for promoting its long-

term sustainable success.

The Board discharges its responsib

ies d

irectly or, in order to ensure effective independent

oversight and stewardship, delegates specif

ied respons

ies to

its committees.

Detail of how the Board fulﬁlled its responsib

ies

in 2023, as well as key topics discussed

and considered by the Board committees, can be found in this Directors’ report.

Biograph

ies for each d

irector are set out on

pages 137 to 141

Standard Chartered PLC

Directors’ report

149

Standard Chartered

– Annual Report 2023

150

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

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, 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 comm

ittee meetings to provide

an independent and current view on the Group’s progress in

this area.

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 regularly 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 2023, can be found in the Board committee

reports starting on page 162.

Board activ

ies during 2023

January

February

March

April

May

June

July

August

September

October

November

December

Scheduled meeting

Key:

Informal session

AGM

Ad hoc meeting

Board composit

ion, roles and attendance

in 2023

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 the Board.

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.

Responsib

ies

Responsible for Finance, Corporate Treasury,

Strategy, Group Corporate Development,

Group Investor Relations, Property and Supply

Chain Management functions.

As announced on 21 December 2023, Diego

De Giorg

i succeeded Andy as Group Ch

ief

Financ

ial Ofﬁcer on 3 January 2024.

Senior Independent Director

Maria Ramos

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 success

ion 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

via the Group Company Secretary at

1 Basinghall Avenue, London EC2V 5DD.

Attendance

AGM

Scheduled

Ad hoc

David Conner

8/8

1/1

Gay Huey Evans, CBE

8/8

1/1

Phil Rivett

8/8

1/1

David Tang

8/8

1/1

Shir

ish Apte

8/8

1/1

Robin Lawther, CBE

8/8

1/1

Jackie Hunt

8/8

1/1

Jasmine Whitbread

N/A

3/3

1/1

Linda Yueh, CBE

8/8

1/1

Carlson Tong

8/8

1/1

INEDs who

stepped down in

2023

Christ

ine Hodgson

and Jasmine

Whitbread stepped

down from the

Board on 31 January

2023 and 3 May

2023 respectively.

No Board meetings

took place in 2023

prior to Christ

ine

leaving the Board.

INEDs who

joined

in 2023

Linda Yueh jo

ined

the Board on

1 January 2023.

The biograph

ies of each d

irector are set

out on

pages 137 to 141

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 162

Linda Yueh jo

ined the Board on 1 January 2023.

Further informat

ion can be found on

page 139

Attendance

AGM

Scheduled

8/8

Ad hoc

1/1

Attendance

AGM

Scheduled

8/8

Ad hoc

1/1

Attendance

AGM

Scheduled

8/8

Ad hoc

1/1

Attendance

AGM

Scheduled

8/8

Ad hoc

1/1

Independent non‑executive directors

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 Nominat

ion Comm

ittee report on

pages 177 to 181

Directors’ report

151

Standard Chartered

– Annual Report 2023

152

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

Director induct

ion

Linda Yueh jo

ined the Board on 1 January 2023. Her

experience can be found in her biography on page 139.

Along with Shir

ish Apte, Rob

in Lawther and Jackie Hunt, who

were all appointed in 2022, the new directors were given a

comprehensive induct

ion programme, ta

ilored to meet each

director’s ind

idual level of experience and expertise.

Diego De Giorg

i was appo

inted as Group Chief Financ

ial

Ofﬁcer on 3 January 2024, following the retirement of

Andy Halford on 2 January 2024. Diego received in-depth

handovers from Andy, which included a period of shadowing

from September 2023 to January 2024. As well as numerous

tailored, ind

idual train

ing sess

ions, Diego also attended

formal train

ing sess

ions on topics includ

ing D

irectors’ Duties

(on 20 September 2023), Climate Risk (on 28 September 2023),

Trading Activ

ity W

ind-Down Governance (on 28 September

2023), Environmental, Social and Governance (ESG) lit

igat

ion

(on 30 November 2023), ICS Horizon Scanning (on 5 December

2023) and Directors’ Duties applicable to directors of Hong

Kong-listed companies (on 14 December 2023). Following

his relevant train

ing prov

ided by a ﬁrm of solic

itors on

14 December 2023, Diego conﬁrmed his understanding of

the obligat

ions as a d

irector of a listed issuer pursuant to

Rule 3.09D of the Hong Kong List

ing Rules.

The Group Company Secretary supports new directors

as they undertake their induct

ion programmes, wh

ich are

typically completed with

in the ﬁrst s

ix to twelve months of

their appointment. The induct

ion programmes are regularly

reviewed and take into account directors’ feedback to ensure

continuous development and improvement.

Progress against induct

ion programmes

The Governance and Nominat

ion Comm

ittee is responsible

for period

ically rev

iew

ing the

induct

ion programme of all

new INEDs, to understand the level of progress made and

to consider where any areas of addit

ional focus m

ight be

required. The Committee is satisf

ied that all new INEDs have

made good progress completing induct

ion work, both

London and as part of overseas Board vis

its to our markets.

Ongoing development plans

Continuous train

ing and development beyond a d

irector’s

induct

ion plan

is essential for 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 UK Senior Managers and Certif

icat

ion Regime. During

the year, all directors received a combinat

ion of mandatory

learning and train

ing,

internal and external brief

ings,

presentations 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 table below gives

further detail on who received these brief

ings.

In 2023, Board members received brief

ings from and engaged

with leading diplomats, former national security advisers,

former leaders of internat

ional organ

isat

ions and econom

ists

on topics includ

ing Ch

ina’s emergence from the COVID

pandemic, the evolving geopolit

ical landscape

in the Middle

East, and the global macroeconomic environment.

The Board committee members also received specif

train

ing relevant to the work of the

ir respective committees.

In 2023, the Board Risk Committee received train

ing on top

ics

includ

ing: Threat Scenar

io-led Risk Assessment, Trading

Activ

ity W

ind-Down Governance, Operational Risk and the

impl

icat

ions of Basel 3.1.

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 sess

ions are arranged

with subject matter experts.

2023 director train

ing overv

iew

Induction

Directors’ duties

and regulatory

updates

Dig

ital

assets

Climate Risk

ICS Horizon

Scanning

Emerging Risks

José Viñals

N/A

Bill Winters

N/A

Andy Halford

N/A

Shir

ish Apte

David Conner

N/A

Gay Huey Evans, CBE

N/A

Jackie Hunt

Robin Lawther, CBE

Maria Ramos

N/A

Phil Rivett

N/A

David Tang

N/A

Carlson Tong

N/A

Jasmine Whitbread

N/A

Linda Yueh, CBE

Applicable to directors who received induct

ion tra

ing dur

ing 2023

Shir

ish Apte, Rob

in Lawther, Jackie Hunt and Linda Yueh jo

ined the Board on

4 May 2022, 1 July 2022, 1 October 2022 and 1 January 2023 respectively

Jasmine Whitbread stepped down from the Board on 3 May 2023

Director attended the session

Director was unable to attend the session but received any accompanying

material and had opportunit

ies to ra

ise questions and observations with the

Group Chairman and Group Company Secretary

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.

Directors’ performance

The Group Chairman led the evaluation of ind

idual director

performance during 2023. 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 2024 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, reviewed José

Viñals’ performance as Group Chairman, meeting with each

director separately to take their feedback. Consolidated

feedback was shared with him.

Time commitment

Our INEDs commit sufﬁc

ient t

ime in discharg

ing the

responsib

ies as d

irectors of Standard Chartered. In general,

we estimate that each INED spent approximately 40 to 90

days on Board-related duties.

Directors’ report

153

Standard Chartered

– Annual Report 2023

What drew you to Standard Chartered

and have your in

ial impress

ions al

igned with

your experiences as an INED one year on?

One of the key things that attracted me to Standard

Chartered was the Group’s culture and its people. Prior to

my appointment, I had a number of discuss

ions w

ith several

directors, includ

ing the Group Cha

irman, who offered ins

ights

into serving on the Board of a global ﬁnanc

ial

inst

itut

ion. I

was particularly impressed with their will

ingness to l

isten and

engage collaboratively in constructive discourse over issues of

importance to the Group. One year on, I’m pleased to say that

I am working with a great group of people from a variety of

backgrounds, who possess strong skills and industry-leading

experience in their respective ﬁelds. In my role as Chair of the

Culture and Sustainab

ity Committee (CSC), I am able to

actively engage with the issues around culture that are central

to a people business. This has been particularly rewarding.

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?

The induct

ion programme, des

igned to be undertaken

over several months, is extensive and well-designed. As my

knowledge of the Group grew, my induct

ion meet

ings became

a mixture of introduct

ions and substant

ive discuss

ions, wh

ich

worked well. I met with various employees and stakeholders

around the Group, which provided a great opportunity to

listen to, and understand, a number of different aspects of the

bank. The induct

ion programme also

included jo

int sess

ions

with other INEDs who jo

ined the Board

in 2022. These jo

int

induct

ion sess

ions were extremely helpful, as we learned

from each other’s perspectives and got to know each other

better through the process. In addit

ion, I joined part of the BRC

meetings as an observer, on discuss

ions cover

ing topics such

as reputation and sustainab

ity risks, which dovetail into the

work of the CSC. I also travelled with the Board to Hong Kong,

Seoul and Singapore and undertook part of my induct

ion

these overseas locations. Market vis

its are a helpful part of the

induct

ion programme and prov

ide important commercial and

regulatory context, which helped me to better understand the

global nature of Standard Chartered’s business.

As the new chair of the Culture and

Sustainab

ity Committee, what do you see as

its key prior

ies over the next ﬁve years?

It is a priv

ilege to cha

ir the CSC and to help deﬁne the

prior

ies of the Group in areas which lie at the heart of

our organisat

ion and

inform everything that we do.

In terms of culture, our prior

ies include embedding a high-

performance culture, whereby our people can excel and do so

in prudent ways. Divers

ity and

inclus

ion are essent

ial build

ing

blocks which will go a long way in ensuring that our employees

can succeed and thrive. Another key component to driv

ing a

healthy culture is through embedding valued behaviours, such

as risk awareness, into the Group’s culture.

In terms of sustainab

ity, our key prior

ies include achiev

ing

the Group’s net zero transit

ion pathway, w

ith particular focus

being placed on ensuring that the milestones are clearly

deﬁned, measured and delivered. In addit

ion, b

iod

ivers

ity and

other emerging issues around safeguarding our planet will

also be in focus in the coming years.

How important is a company’s culture to

you and what are your views on the culture at

Standard Chartered?

Standard Chartered is a people business, so culture is

central to its success and abil

ity to contr

ibute posit

ively to our

stakeholders, includ

ing cl

ients, investors, employees and wider

society. The Group is a global inst

itut

ion with footprints in

over 52 markets, so it is particularly important that INEDs and

executive directors continually engage with our stakeholders

and always remain sensit

ive to the cultural and bus

iness

context in which particular issues arise in ind

idual markets. In

the year I’ve been on the Board, I have been impressed by the

focus on culture and the thoughtfulness of the Group in this

area that is not straightforward to manage.

As an INED, how do you build connections and

mainta

in relat

ionsh

ips w

ith our key stakeholders?

Deliver

ing for our stakeholders

is an area I have placed

great focus on. I am pleased that the CSC has been refocused

on supporting the Board’s engagement notably with our

employees, communit

ies, suppl

iers and shareholders. For

instance, our relationsh

ip w

ith our colleagues has been

strengthened by honing our Board workforce engagement

sessions this year. During our workforce engagement sessions,

which regularly take place as part of the Board’s overseas

market vis

its as well as

in the Group’s London headquarters,

INEDs will spend time with colleagues to understand the

areas in which the business excels, and also the areas where

the My Voice survey scores are below average. With those

ins

ights, the CSC and the Board can have

informed follow-up

discuss

ions, where we can reﬂect and act upon what we have

heard to continually improve the Group’s operations.

Dr Linda Yueh

Independent Non-Executive Director

Spotlight

Interview with Dr Linda Yueh

An ins

ight

into one of our new INEDs

154

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

155

Standard Chartered

– Annual Report 2023

Directors’ report

Board effectiveness

Internal evaluation process

Review approach

agreed

Questionna

ires

completed

Evaluation

and report

Find

ings shared w

ith

committee Chairs

and committees

Find

ings d

iscussed with

the Group Chairman and

Governance and Nominat

ion

Committee

Board discuss

ion and agreed

Action Plan for 2024

The 2023 Board and committees’ effectiveness review was

conducted internally, facil

itated by the Group Company

Secretary, and in accordance with the UK Code.

Progress against the 2023 Action Plan

The 2023 Action Plan set out a number of actions to be

achieved following the externally facil

itated Board evaluat

ion

conducted in 2022. The 2023 Action Plan was regularly

reviewed during the year and good progress had been made

against many of the actions as evidenced by this year’s

internally facil

itated Board effect

iveness review.

Key observations from the 2023 internal effectiveness review

•

The Board remains effective at testing and

shaping the Group’s strategy.

•

Board meetings had focused well on business

opportunit

ies w

ith a good level of discuss

ion

and challenge, which helped to set strategic

prior

ies.

•

The Board has a comprehensive understanding

of the Group’s princ

ipal r

isks and explores them

extensively.

•

The Board engaged well with a range of key

stakeholders at different levels.

•

The Board agenda had accommodated the

impact of emerging geopolit

ical vulnerab

ies

and the evolving macroeconomic landscape.

•

The management of the transit

ion of new

INEDs on the Board had been handled well.

2024 Action Plan

•

Review the length and focus of Board papers,

ensuring a focus on key points for the Board

to understand, discuss, challenge and agree

on actions.

•

Evaluate the balance of topics on the Board

agenda to maxim

ise t

ime allocation and

focus on key strategic items, challenges and

commercial opportunit

ies.

•

Enhance measurement of progress on the

Group’s engagement with its key stakeholders.

•

Continue to enhance the sustainab

ity aspect

of the Board’s education programme.

156

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

2023 Board effectiveness review

This year’s review took the form of a questionna

ire-based

evaluation for the Board and its committees which was

completed by every Board member. These questionna

ires

explored some of the themes for the previous year’s review

as well as probing the Board’s and committees’ performance

through the year.

The results were compiled into a detailed report and

conclusions were discussed with the Group Chairman and

by the Governance and Nominat

ion Comm

ittee ahead of

a Board discuss

ion. At the Board meet

ing, the key ﬁnd

ings

and recommendations were presented along with an Action

Plan for 2024, which was then approved. Details of the key

observations from this year’s review and the agreed Action

Plan are set out on page 155.

The Board’s ﬁve committees were also included as part of the

effectiveness review. The observations and key themes aris

ing

from the review were shared with the relevant committee

Chairs before being circulated to each of the committees and

action plans for 2024 agreed. Details of the key observations

and action plans for each of the committees can be found

with

in each of the comm

ittees’ reports.

Director independence

The GNC 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 and 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

INED’s judgement.

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 ‘overboarding’. 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

in their biograph

ies on pages 137 to 141. 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 four

non-executive directorsh

ips (or one execut

ive directorsh

alongside two non-executive directorsh

ips) perm

itted under

the General Organisat

ional Requ

irements Part of the PRA

Rulebook.

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, two were regarded as sign

iﬁcant d

irectorsh

ips

(appointed to the board of a listed company) and as

such were announced to the market in line with our list

ing

obligat

ions. Further deta

il on the specif

ic appo

intments are

provided below:

•

Carlson Tong was appointed to the board of Hong Kong

Stock Exchange as a Board member on 23 April 2023.

•

Jackie Hunt was appointed to the Board of Will

is Towers

Watson plc as an independent non-executive director on

1 April 2023.

The two 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.

Stakeholder

engagement

Ensuring authentic engagement

across our markets

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.

Board activ

ies led to a number of invaluable opportunit

ies to

engage with stakeholders across the Group’s diverse network,

includ

ing those

ident

iﬁed on the follow

ing pages. Directors

did not just engage collectively with stakeholders, but also

ind

idually. The Remuneration, Culture and Sustainab

ity,

Board Risk and Audit Committees also engaged directly with

employees. 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 162.

Clients

Regulators and

governments

Employees

Investors

Society

Suppliers

Chairman and INED travel across our markets

Europe and

the Americas

Germany

2. Poland

Africa and

Middle East

Ghana

Kenya

South Africa

UAE

Asia

China, includ

ing

Hong Kong

10. Indonesia

11. Japan

12. South Korea

13. Malaysia

14. Singapore

15. Vietnam

The Chairman and

INEDs, either together or

ind

idually, vis

ited

a range of markets.

3. London, United

Kingdom

In September 2023, the

Board and committees

held their meetings in

London. The Board was

joined by UK-based

colleagues for an informal

top talent lunch at which

colleagues shared their

experiences of working

at Standard Chartered.

The Board also heard

from other UK colleagues

through the employee

townhall, held to mark

170 years of Standard

Chartered’s presence in

the UK. Board members

also met with the UK PRA,

and Hong Kong Trade

Development Council

in London.

9. Hong Kong, China

The Board and

committees held their

meetings in Hong Kong in

March 2023. During this

vis

it, the Board met w

ith

clients, colleagues, senior

government ofﬁcials and

regulators. An informal

top talent lunch was

held where the Board

met with employees

from Hong Kong

representing different

functions and discussed

the goals, challenges

and opportunit

ies of the

business. The Board also

took the opportunity to

vis

it Mox Bank, the Group’s

virtual bank in Hong Kong

and hosted a client dinner.

10. Jakarta, Indonesia

In June 2023, the Board

travelled to Jakarta.

During this vis

it, the Board

took the opportunity to

meet with a wide range

of stakeholders, includ

ing

informal discuss

ions

with senior leaders,

other colleagues at

the bank as well as top

government ofﬁcials.

The Board also hosted

an employee townhall

and concluded the vis

with a client dinner

celebrating 160 year of

Standard Chartered’s

presence in Indonesia.

12. Seoul,

South Korea

The Board held its

November meetings

in Seoul. The week’s

programme began with

a global townhall, with

colleagues around the

world tuning in virtually.

The Board also hosted

a talent lunch and met

with colleagues based

in Korea. As part of the

trip, the Board met with

clients, top government

ofﬁcials, and local

regulators, and engaged

with local entrepreneurs

for a community

engagement session.

157

Standard Chartered

– Annual Report 2023

Directors’ report

158

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

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.

During the year, we mainta

ined a comprehens

ive

programme of engagement, includ

ing w

ith investor

advisory bodies and credit rating agencies, and provided

updates on progress made to transform our business 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 developments.

The Group Chairman, as part of his role, leads engagement

with shareholders and hosted the 2023 AGM alongside

fellow Board members. The Group Chairman and certain

Board members also held an investor stewardship event.

Maria Ramos, our Senior Independent Director, was

available as an alternative point of contact for shareholders.

Bill Winters and Andy Halford were the primary

spokespeople for the Group in 2023. Throughout the year

they engaged extensively with exist

ing shareholders

and potential new investors during ind

idual or group

meetings and conferences, either in person or virtually.

Diego De Giorg

i has replaced Andy, follow

ing his

retirement, in this regard from January 2024. In addit

ion,

Ben Hung, CEO Asia hosted investors and analysts in

Asia aimed at promoting greater awareness of our

strategy and progress in that region. Various members

of the Group’s Management Team also partic

ipated

in investor conferences throughout the year.

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

Investor stewardship event

The Group Chairman hosted a stewardship event in

November 2023 alongside the chairs of the Board

Audit and Remuneration committees. The Group

Chairman provided an update regarding the Group’s

strategy, includ

ing w

ith respect to sustainab

ity, which

was supplemented by opening remarks from the

Remuneration Committee Chair. The Audit Committee

Chair also provided updates on both the Audit and Risk

committees and their activ

ies during the year. This

was followed by a 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 jo

ined

electronically.

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 2023, management met with debt

investors across the regions, and mainta

ined a regular

dialogue 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.

Further informat

ion can be v

iewed at

sc.com/investors

The Board’s engagement with investors

Engagement with investors: what we did during 2023

February

2022 full-year

results and

roadshows

March

Conferences and

roadshows

April

2023 ﬁrst quarter

results and

conferences

May

AGM, Asia

seminar and

conferences

June

Conferences

July

2023 half-year

results

August

Roadshows

September

Conferences and

roadshows

October

2023 third-quarter

results

November

Stewardship event,

sustainab

ity event

and conferences

December

Conferences

159

Standard Chartered

– Annual Report 2023

Directors’ report

Retail shareholders

The Group Company Secretary oversees communicat

ion w

ith our retail shareholders.

AGM

The meeting was held on 3 May 2023. We were pleased

that in addit

ion to

in-person attendance, we 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 quest

ions in writ

ing or ask them through

an audio line. Shareholders who attended the meeting

in person were able to submit voting instruct

ions and ask

questions 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; director remuneration; shareholder

engagement; share price and regulatory developments.

All Board-proposed resolutions were passed, with

shareholder support for each ranging from 94.70 per cent

to 100 per cent. We remain very grateful for the support

of our shareholders.

Detail regarding the directors’ remuneration report

resolution can be found in the Directors’ Remuneration

Report starting on page 182. Further detail on how the

Group engaged with investors more generally can be

found on page 57.

Voting results from the 2023 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

Clients are central to everything we do and promoting

productive, sustainable relationsh

ips w

ith them is a key

prior

ity. In 2023, Board members, e

ither collectively or

ind

idually, met clients face-to-face or virtually to keep

abreast of developing client trends, experiences and needs.

As part of our overseas Board programme, members of

the Board also travelled with

in our footpr

int for meetings

with clients and hosted client dinners throughout the year.

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 engaged more generally with clients and

suppliers can be found on pages 55, 56, 58 and 59 of the

Strategic report.

The Board, either collectively or ind

idually, engaged

with relevant authorit

ies and regulators

includ

ing

in the

UK, Hong Kong and South Korea to discuss key items

and developments. Topics of discuss

ion var

ied, includ

ing

change management, Execution Risk, informat

ion and

cybersecurity, Data Risk, Model Risk management, Climate

Risk, Credit Risk and macroeconomic developments,

resolvabil

ity, and r

isk-free rate transit

ion. Further deta

on how the Group engaged with regulators and

governments more generally can be found on page 57

of the Strategic report.

The Board’s engagement with investors

The Board’s engagement with clients and suppliers

The Board’s engagement with regulators and governments

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

it some of the Group’s markets th

is year. Directors

partic

ipated

in a volunteering day in Jakarta, where

they taught four modules from our ﬁnancial educat

ion

programme to children aged 15–16. In Seoul, directors took

part in a community engagement session where they

facil

itated a mock

investment and solution challenge

with three female start-up CEOs from our Women in

Entrepreneurship programme.

In addit

ion, external and

internal speakers provided input

to the Board’s discuss

ions, wh

ich covered key societal issues

such as China’s emergence from the COVID pandemic, the

evolving geopolit

ical landscape

in the Middle East, and the

global macroeconomic environment. Further detail on how

the Group engaged with society more generally can be

found on page 59.

The Board’s engagement with society

160

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

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. In 2023, the Group

Chairman and INEDs engaged with the Group’s subsid

iar

ies

through a number of forums. This included a video-enabled

chair and committee chair engagement session, as well as

other forms of interact

ion.

The Group Chairman hosted a virtual subsid

iary cha

engagement session during 2023. The event opened with

an update from Bill Winters on the third-quarter results,

progress against our strategic prior

ies, and areas of

focus for the remainder of the year and going into 2024.

The subsid

iary cha

irs asked questions, both on the Group’s

performance and questions specif

ic to the

ir markets.

José Viñals then updated the subsid

iary cha

irs on Board

changes, areas of focus for the year so far at the PLC Board,

and Board divers

ity. The Cha

irman ﬁn

ished h

is thoughts on

the macro outlook and challenges for the Group into 2024.

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 Group

Chairman and the chairs of subsid

iary aud

it committees.

The Group Financ

ial Controller; Group Head, Internal Aud

it;

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

it partner; the Group Company

Secretary and the Committee Secretary also partic

ipated

in the call. Items discussed during the call included:

•

2023 Audit Committee focus areas

•

Group Finance update, which featured UK Audit and

Corporate Governance reforms and likely impact on

subsid

iar

ies, IFRS 9 models, increased sustainab

ity

disclosure and an update on capital

ised software

•

Conduct, ﬁnancial cr

ime and compliance update

•

Group Internal Audit reporting to subsid

iary aud

committees

•

Group statutory audit update from EY.

The Board Risk Committee Chair hosted the 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:

•

2023 Board Risk Committee focus areas

•

Group Chief Risk Ofﬁcer’s 2023 prior

ies

•

Update on Model and Treasury Risk.

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 call was

also attended by the Group Chairman, other members

of the Group Remuneration Committee and executives

from Human Resources and Reward. The call fostered

knowledge sharing and best practice between the Group

Remuneration Committee and the subsid

iary remunerat

ion

committees and raises awareness of the prior

ies felt by

the wider workforce in our markets. Topics that were

discussed included:

•

The Fair Pay Charter and recent beneﬁts-related

iat

ives

•

Key focus areas for the 2023 year-end pay review and

our drive to embed a high-performance culture through

strong different

iat

ion

•

Discuss

ion on key focus areas for the subs

iar

ies

•

2024 prior

ies, includ

ing the development of a new

recognit

ion platform.

Other activ

ies that took place during 2023 to further

strengthen the linkages across the Group included

the following:

•

The Group Chairman attended a SCBHK board meeting

•

The Chair of the Group Audit Committee attended an

audit committee meeting of Standard Chartered Bank

(Singapore) Lim

ited (SCBSL). The aud

it committee

chairs of SCBHK and SCBSL attended one Group Audit

Committee Meeting

•

The Chair of the Board Risk Committee attended a

risk committee meeting of SCBHK. The risk committee

chairs of SCBHK and SCBSL jo

ined one Group Board R

isk

Committee meeting.

Further detail regarding how the Group engages with

its stakeholders can be found on

pages 54 to 64

The Board’s engagement and linkages with the Group’s subsid

iar

ies

161

Standard Chartered

– Annual Report 2023

Directors’ report

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 and ensuring that

the voice of colleagues is heard and reﬂected in decis

ion-

making.

Following a review of the exist

ing Board workforce

engagement model by the CSC, an enhanced model

involv

ing more face-to-face colleague

interact

ion was

approved and implemented during the year. This enhances

the model that was put in place immed

iately preced

ing the

COVID pandemic and was reliant on virtual touchpoints.

As part of these changes, the Board continues to adopt an

alternative workforce engagement method as set out in the

UK Code.

The enhanced model is designed to improve how Board

members gather and share feedback obtained from

colleagues, while paying special attention to expanding

partic

ipat

ion in engagement sessions to a more diverse

set of voices. In 2023, the Board met colleagues in various

markets, includ

ing Hong Kong, Jakarta, Seoul and London,

with the enhanced model being trialled successfully in

London, where the Board conducted informal listen

ing

sessions in September, and again as part of the Board’s trip

to Seoul in November. Ahead of these informal listen

ing

sessions, directors were briefed on the ind

idual market,

includ

ing local trends prov

ided by the annual employee

engagement survey (My Voice) and other relevant data

points offered by local and regional management teams.

Following the listen

ing sess

ions, feedback was subsequently

shared with the CSC and other stakeholders, where

appropriate. Through these sessions directors were able

to appreciate the challenges, successes and concerns

shared by colleagues in each of the markets. The Board will

continue to implement our enhanced model of engagement

in London and in three overseas markets which the Board

plans to vis

in 2024.

In addit

ion to th

is enhanced model, the Group has a

comprehensive employee listen

ing programme, through

which the Board has an opportunity to understand diverse

employee perspectives. These tools include the annual

employee engagement survey, a continuous listen

ing

programme, lifecycle surveys and diagnost

ic research

on specif

ic areas of focus, such as ﬂex

ible working and

performance management. Details on all of our employee

engagement can be found on page 60.

The Board is also informed about the operation of the

Speaking Up programme, includ

ing on the themes of

employee concerns raised through Speaking Up, employee

conﬁdence level in Speaking Up and the programme’s usage

volume. For more details on Speaking Up, please refer to

page 131. Our Brand and Culture Dashboard has been in

place since 2018 and provides a comprehensive overview

of cultural change by reporting on several key metrics that

allow us to monitor progress of our culture journey.

Further detail regarding employee engagement this

year can be found with

in the Culture and Susta

inab

ity

Committee report starting on page 174.

The Board’s engagement with employees

162

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

I am pleased to present the Audit Committee report for the year

ended 31 December 2023. This report sets out the areas of sign

iﬁcant

focus for the Committee and its activ

ies over the course of the year.

Throughout the year, the Committee has carefully scrutin

ised and

challenged credit impa

irments, key account

ing issues, sign

iﬁcant

accounting estimates and judgements made by management to

ensure that they are appropriate and clearly communicated in the

Group’s public disclosures. In light of the challenging external

environment, the Group’s investment in China Bohai Bank (Bohai),

and the Group’s exposures to China Commercial Real Estate (CRE) in

particular, was an area of sign

iﬁcant focus. The Comm

ittee reviewed

carrying values for larger investments and management overlays.

Sovereign ratings and credit impa

irments have also been rev

iewed

and discussed, includ

ing Sr

i Lanka, Pakistan, Niger

ia and Ghana.

The Committee is mindful of the work of the BRC on emerging

sovereign and country risks. The Audit Committee’s work during the

year complemented the wider review undertaken by the BRC on

sovereign and country risks.

The Committee has been focused on the Group’s implementat

ion

plan addressing UK ACG reforms, includ

ing the FRC’s consultat

ion on

the UK Code and legislat

ion publ

ished, and later withdrawn, by the

UK government. In readiness for those proposals, work has been

done on controls, process improvement and examin

ing work already

undertaken on stress testing, going concern and viab

ity statements.

Following its consultation, the FRC decided not to take forward a

number of proposals. The Committee is consider

ing wh

ich of the

proposals the Group may decide to take forward on a voluntary

basis. The updated UK Code was published in January 2024 and

management is review

ing the

impl

icat

ions and tim

ings, w

ith reporting

being provided to the Committee regularly throughout the year.

As the Board-appointed Consumer Duty Champion, I am fully

engaged on the progress of Standard Chartered Bank’s

implementat

ion plans, through regular br

ief

ings w

ith the Consumer

Duty Accountable Executive. The Committee also receives updates

on Consumer Duty, includ

ing progress on agreed comm

itments

and actions to ensure that Consumer Duty is fully embedded in

our customer experience.

The Committee reviewed and discussed the refresh of the Group

Code of Conduct and Ethics, and recommended this to the Board for

endorsement. This was a substantial refresh, designed to provide a

guide for colleague behaviour in a fast-changing world with new

technologies includ

ing art

ial intell

igence, customer expectat

ions

and the shift

ing geopol

ical landscape. We were keen to understand

the roll-out and train

ing that would be prov

ided to fully embed this

with

in the Group.

The Committee is cognisant of the beneﬁts of engaging with broader

stakeholders and updating them on the Committee’s prior

ies and

activ

ies. As Audit Committee Chair, I partic

ipated

in the Group’s

stewardship event in November 2023, where the work of the Audit

Committee was discussed. Details on the stewardship event may be

found on page 158.

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, 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 2023, 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

Committee composit

ion

Christ

ine stepped down from the Comm

ittee on 1 May 2023.

Audit Committee

“In light of the challenging

external environment, the

Group’s investment in China

Bohai Bank (Bohai), and the

Group’s exposures to China

Commercial Real Estate (CRE)

in particular, was an area of

sign

iﬁcant focus.”

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, non-ﬁnancial and narrat

ive

reporting. The Committee’s role is to review, on behalf of the Board,

the Group’s internal controls, includ

ing

internal ﬁnanc

ial controls.

The Committee has exercised oversight of the work undertaken by

the internal Conduct, Financ

ial Cr

ime & Compliance (CFCC) and

Group Internal Audit (GIA) functions 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

Who else attended 2023 Committee meetings?

The Group Chairman; Group Chief Executive; Group Chief

Financ

ial Ofﬁcer; Group Ch

ief Financ

ial Ofﬁcer Des

ignate (from

2 September); Group Chief Risk Ofﬁcer; Group General Counsel;

Group Head, Internal Audit; Group Head of CFCC; Group Head,

Central Finance; representatives from Group Finance; Group

Statutory Auditor; and the Group Company Secretary. Paul Khoo,

independent adviser to the Board, attended a discuss

ion on

Financ

ial Cr

ime Compliance-related matters.

As part of, and in addit

ion to most scheduled Comm

ittee

meetings, the Committee held private members-only meetings.

The Committee also met with the Group’s Statutory Auditor, EY

and the Group Head, Internal Audit, without management being

present. The Committee members have detailed and relevant

experience and bring an independent mindset to their role.

The Board is satisf

ied that Ph

il Rivett has recent and relevant

ﬁnancial exper

ience. Phil is a chartered accountant with over

40 years’ experience of professional accountancy and audit

focused on banks and insurance companies. He led the audits

of a number of leading banks during his career as senior audit

partner of PricewaterhouseCoopers. He is also chair of the audit

committee for Nationw

ide Bu

ild

ing Soc

iety.

Biograph

ical deta

ils of the Committee members can be

viewed on

pages 137 to 141

Carlson

Tong

Maria

Ramos

Jackie

Hunt

Shir

ish

Apte

Christ

ine

Hodgson,

CBE

David

Conner

Phil

Rivett

(Chair)

1/1

8/8

163

Standard Chartered

– Annual Report 2023

Directors’ report

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 relat

ing

to the Group’s ﬁnancial performance, rev

iew

ing the s

ign

iﬁcant ﬁnancial judgements, est

imates and

accounting issues.

•

Considered the forthcoming UK ACG Reforms and discussed how the Group will implement the new

proposals.

•

Considered the ‘Audit Committees and External Audit Min

imum Standard’ publ

ished by the FRC in May

2023 and is satisf

ied that the Comm

ittee met the relevant requirements.

Sign

iﬁcant account

ing judgements considered during 2023 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 367.

Key area

Action taken

Impairment of

loans and

advances

•

Reviewed and challenged, on a quarterly basis, reports detail

ing the compos

ion and cred

it quality of the

loan book, concentrations of risk and provis

ion

ing levels.

•

Understood the Expected Credit Loss (ECL) model output, 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.

•

Applied careful considerat

ion and challenge on ECL prov

ions relat

ing to China CRE lending and

sovereign exposures.

•

In the case of PMAs, understood adjustments made where model performance breached monitor

ing

standards or validat

ion standards.

•

Reviewed and challenged management’s proposed reduction of management COVID overlays for CPBB,

as the outlook has improved during 2023.

•

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. In respect of high-risk credit grade exposures, received brief

ings

on business plans, includ

ing remed

ial actions and management assessment of the recoveries and

collateral available.

•

Received a brief

ing on the assessment of the output of the Group’s Monte Carlo model

incorporating a

wider range of scenario outcomes than the previous model, with the effect of increas

ing non-l

inear

ity

the model output. Reviewed and challenged the judgement to release the previously held PMA for CPBB,

as a result of the output of these model changes. Benchmarked the ECL non-linear

ity calculated us

ing the

Monte Carlo model against discrete scenarios as a stand-back assessment.

•

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 to adjust the ECL given the immater

ial

impact.

•

Received a brief

ing on the performance of ECL models and the remed

iat

ion plans

in place to address

material non-performance issues, where these had been ident

iﬁed.

•

Received a brief

ing on the Group’s adopt

ion of the high-quality practices relating to IFRS 9 ECL and the

areas of focus recommended by the PRA in recent Dear CFO letters.

•

Considered the appropriateness of the staging of higher-risk loans. For Stage 3 loans, monitored the

impa

irment coverage rates, recovery forecasts and mater

ial movements.

Carrying value

of investments

in associates

•

Challenged management on the assumptions made on the decline in Bohai’s Net Interest Margin (NIM),

and the outlook should China GDP not improve.

•

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.

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.

•

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.

•

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.

164

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

Activ

ies during the year

continued

Other areas of focus

Goodwill

impa

irment

•

Reviewed management’s annual assessment of goodwill impa

irment, cover

ing key assumptions (includ

ing

forecasts, discount rate and sign

iﬁcant changes from the prev

ious year), headroom availab

ity and

sensit

ies to poss

ible changes in key assumptions and related disclosures.

Recoverabil

ity

of parent

company’s

investment in

subsid

iar

ies

•

Discussed and challenged management’s impa

irment assessment of

investments in subsid

iar

ies.

Disposals of

aviat

ion ﬁnance

business and

businesses in

the Africa and

Middle East

(AME) region

•

Reviewed and challenged the accounting treatment and impact of the disposals of the aviat

ion ﬁnance

business and businesses in the AME region.

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. This included review

ing the facts and c

ircumstances for the proposed sale of the business

exits in the AME region, the sale of the aviat

ion ﬁnance bus

iness, shipp

ing assets and rema

ing Pr

inc

ipal

Finance investments.

Hold to collect

portfolio

•

After the collapse of several US banks during the ﬁrst quarter of the year, reviewed the Group’s portfolio of

hold to collect debt securit

ies on a quarterly bas

is to monitor the amount of any unrecognised losses and

to understand the potential impact.

Restructuring

costs

•

Reviewed and considered, on a quarterly basis, income statement charges and credits classif

ied as

restructuring.

Taxation

•

Reviewed and considered a paper on the key drivers of the Group’s tax rate, and updates on the Group’s

Deferred Tax Assets, tax exposures and recent tax developments.

•

Considered the impacts of the global min

imum tax rules wh

ich will apply from 2024.

Provis

ions for

legal and

regulatory

matters

•

Considered advice presented on the current status of sign

iﬁcant legal and regulatory matters, and

reviewed management’s judgements on the level of provis

ions and the adequacy of d

isclosure, as set

out in Note 26 on page 434.

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

various stress tests that explore the resil

ience of the Group to shocks to

its balance sheet and business

model, princ

ipal and emerg

ing risks, liqu

ity and capital posit

ions and key assumpt

ions. 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 369, 218 and 229

Fair, balanced

and

understandable

•

Considered, satisf

ied

itself and recommended to the Board that the processes and procedures in place

ensure that the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the

informat

ion necessary for shareholders to assess the Group’s pos

ion and performance, bus

iness model

and strategy, and the business risks it faces.

165

Standard Chartered

– Annual Report 2023

Directors’ report

Activ

ies during the year

continued

Examples of

deeper

discuss

ions

into

specif

ic top

ics

•

EY regional partner and topical overviews:

Received a presentation from EY’s local regional partners in

India on the Group’s global business services hubs. We also held discuss

ions w

ith EY’s special

ist partners on

Climate Risk and ACG reforms, provid

ing external perspect

ive and peer comparison. These EY regional

partner overviews and technical topics will continue in 2024 and beyond.

•

UK ACG reforms implementat

ion approach:

Received and discussed updates on the implementat

ion by

the Group, includ

ing end-to-end controls and process

improvement. Discuss

ion focused on the adequacy

of resourcing, potential impact to Committee and Board responsib

ies under the new requ

irements and

broader market developments associated with the reforms. The proposed approach for an Audit and

Assurance Policy (AAP) was discussed, with the Committee provid

ing feedback on th

is. Even though this

was a proposal not taken forward by the FRC, the Committee continues to consider what might be done

on a voluntary basis, where beneﬁc

ial for the Group.

•

Aspire programme:

Discussed an update on the Group’s Aspire programme (a programme launched

to deliver a modern technology system and data landscape for ﬁnanc

ial management and report

ing).

Discuss

ion focused on the programme’s potent

ial in driv

ing control enhancement and cost efﬁcienc

ies

in resourcing.

•

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 in the context of a stretching agenda, the level of resource is

deemed to be appropriate to cover the implementat

ion of ACG reforms, new cap

ital rules under Basel 3.1

and the deployment of the Aspire programme.

•

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 special

ist tax partner also joined th

is discuss

ion.

•

Large Exposures:

Received and discussed reports on the methodology supporting the Group’s Large

Exposures reporting to the regulators.

•

Financ

ial regulatory report

ing:

Received and discussed an update on the Group’s ﬁnanc

ial regulatory

reporting remediat

ion programme.

•

Data management:

Received and discussed updates on progress in reducing the Group’s Data Risk

exposure. The H1 2023 discuss

ion focused on manag

ing Data Privacy risks in SC Ventures investments

and Data Sovereign

ity R

isk in high-risk jur

isd

ict

ions, g

iven numerous data storage, transfer and

access obligat

ions across the Group’s footpr

int. The H2 2023 discuss

ion focused on progress made

refreshing the focus of the Data Shield Programme, previously known as the Group’s Data and Privacy

Transformation Programme, resourcing and the roadmap and timel

ines to reach the des

ired end-state.

This will continue to be an area of focus for 2024.

•

China Data Security:

Received and discussed an update on China Data Security measures.

•

Financ

ial Cr

ime:

Reviewed and discussed an update on Financ

ial Cr

ime, cognisant of the work of the

BRC and Board on this matter.

•

Report of the Group Money Laundering Report Ofﬁcer (MLRO):

Reviewed and discussed the annual

report from the MLRO.

•

Group Code of Conduct Refresh:

Received and discussed a paper setting out the refreshed Code, which

better connects to the Group’s valued behaviours and introduces addit

ional areas such as data eth

ics.

The Committee recommended the Code to the Board for endorsement.

•

Polit

ically Exposed Persons (PEP):

In light of external events, received and discussed a paper setting out

an overview of the Group’s approach to managing PEP risk.

•

FCA Consumer Duty:

Received updates on Standard Chartered Bank’s implementat

ion plans and

oversight for compliance with the FCA Consumer Duty. Particular focus was placed on management

informat

ion, cl

ient documentation, pric

ing and processes. Th

is will continue to be an area of focus for 2024.

•

Major disputes, sign

iﬁcant regulatory and government

invest

igat

ions:

Received and discussed updates

on major disputes and sign

iﬁcant regulatory government

invest

igat

ions facing the Group.

•

Technology costs:

Reviewed and considered updates from management and EY on work undertaken on

capital

ised technology costs,

includ

ing software as a serv

ice (SaaS) arrangements.

•

Technology controls:

Reviewed and considered updates from EY on the results of their testing of

priv

ileged user access management controls, not

ing improvements made by management in this area

during 2023.

166

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

Activ

ies during the year

continued

Group Statutory

Auditor, EY

•

Reviewed and discussed the risks ident

iﬁed by EY’s aud

it planning, as well as EY’s planned audit strategy

in response to those risks.

•

Satisf

ied

itself that EY has allocated sufﬁc

ient and su

itably experienced resources to address these risks

and reviewed the ﬁnd

ings from the aud

it work undertaken.

•

Sought and received assurance that no undue pressure has been asserted on the level of audit fees,

to ensure that audit work can be conducted effectively and independently.

•

Conducted an annual 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 GIA senior leadership. The results

of this input were discussed by the Committee. Overall, it was felt that EY is considered to be effective,

objective 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 2024 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

2023 year-end audit, as well as an update on these matters later in the year.

•

Reviewed and discussed EY’s approach to the private Written Auditor Report to the PRA for the year

ended 31 December 2023. Updates from management were also provided.

•

Received reports from EY and management regarding EY’s FCA Client Assets (CASS) audit of Standard

Chartered Bank.

The Committee met privately with EY at the end of certain Committee meetings, without management

being present.

Phil Rivett met regularly with the EY partners leading the Group’s audit during the course of the year.

The Company complies with the Statutory Audit services for Large Companies Market Investigat

ion

(Mandatory Use of Competit

ive Tender Process and Aud

it Committee responsib

ies) Order 2014, wh

ich

relates to the frequency and governance of tenders for the appointment of the external auditor. As a UK

public interest entity, the Group is required to tender the audit every 10 years and rotate the auditor every

20 years. As long as the Committee remains satisf

ied w

ith EY’s performance, the Group has no current

intent

ion of tender

ing for an alternative external auditor to commence before the end of the current

required 10 year period. Any tender would be in respect of 2030 onwards and would likely occur in 2027,

in order to allow sufﬁc

ient t

ime to plan for a transit

ion.

EY has been the Group’s Statutory Auditor for four years. In accordance with the Audit Practices Board’s

requirements, the lead audit engagement partner will have held the role for ﬁve years following the

completion of the audit for the year-ending 31 December 2025. The lead engagement partner, David

Canning-Jones, has a background of audit

ing banks and understands the markets

in which the Group

operates. Following completion of the audit for the year-ending 31 December 2024, Micha Missak

ian, an

EY senior audit partner who is also experienced in audit

ing global bank

ing inst

itut

ions, will assume the role

of the lead audit engagement partner.

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 2023 at the 2023 AGM.

Non-audit

services

•

In 2023, the Group spent $14.1 mill

ion on non-aud

it services provided by EY (includ

ing aud

it-related

assurance services such as quarterly and half year reviews and regulatory reporting) and $41.2 mill

ion on

the audit of the Group and its subsid

iar

ies.

Further details on non-audit services provided by EY can be found in Note 38 on

page 462

and the Group’s approach to non-audit services on

page 228

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 BRC and the CSC

discussed separate reports from the Group Head, Internal Audit on GIA’s appraisal of controls across key

risks, subject to each committee’s oversight.

Further details on internal controls can be found on

page 222

Group Internal

Audit

•

Assessed the role and effectiveness of the GIA function, and reviewed and monitored GIA’s progress

against the 2023 Audit Plan and the review and monitor

ing of aud

it themes, trends and sign

iﬁcant

issues.

Sign

iﬁcant changes to the Aud

it Plan were also discussed and approved by the Committee.

•

Reviewed and approved GIA’s 2024 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

issues raised by GIA and requested management to develop risk reduction

plans for items with long closure periods to be monitored by GIA.

•

Reviewed GIA’s functional strategy, includ

ing GIA’s m

iss

ion, v

ion and pr

ior

ies. The Committee is satisf

ied

with the independence and object

ity of the GIA function.

•

Received an update on the planned External Quality Assurance Review that will take place in 2024.

•

Over the course of the year, Phil Rivett met regularly with the Group Head, Internal Audit and the Audit

Executive Team. The Group Head, Internal Audit also met privately with the Committee.

167

Standard Chartered

– Annual Report 2023

Directors’ report

Activ

ies during the year

continued

Conduct,

Financ

ial Cr

ime

& Compliance

In 2023, 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 and the

use of unapproved communicat

ion channels, recogn

ing progress made to date and

issues faced by

the Group

•

the importance of continu

ing to strengthen the effect

iveness in our overall risk management

•

the function’s operating model, includ

ing an overv

iew of the CFCC budget and organisat

ional changes

to simpl

ify the funct

ion

•

CFCC’s resources and budget to deliver against its mandate, includ

ing the use of automat

ion.

Phil Rivett met regularly throughout the year with the Group Head, CFCC.

Speaking Up

The Committee reviewed and discussed an annual report on the operation and effectiveness of Speaking

Up, the Group’s conﬁdential wh

istleblow

ing programme. The report prov

ided the Committee with assurance

of the Group’s ongoing compliance with the PRA and the FCA’s Whistleblow

ing Rules. Once rev

iewed and

discussed by the Committee, this report was submitted to the Board.

In 2023, the Committee Chair received updates on Speaking Up outside of formal Committee meetings and

regularly met with senior management from Conduct and Compliance.

Further details on Speaking Up can be found on

page 131

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

In 2023, Phil Rivett attended an audit committee meeting of SCBSL. The audit committee chairs of SCBHK and

SCBSL attended one Standard Chartered PLC Audit Committee meeting. This practice will continue in 2024 to

reinforce these important linkages.

Phil Rivett hosted an annual video-conference with the chairs of subsid

iary aud

it committees and INEDs in

May 2023.

Please refer to page 160 on linkages between the Committee and chairs of subsid

iary aud

it committees.

Progress against the 2023 Action Plan

The 2023 Action Plan set out a number of actions from the externally facil

itated Comm

ittee evaluation conducted in 2022.

The 2023 Action Plan was reviewed during the year and good process had been made against the actions, with all of them

being completed.

Committee effectiveness review

During 2023, the Group Company Secretary facil

itated an

internal Board and Board committee effectiveness review.

Key observations from the 2023 internal effectiveness review

The feedback on the Committee’s function

ing

and effectiveness was posit

ive and spec

ically

highl

ighted the follow

ing:

•

The Committee’s oversight and

understanding of all the key issues under its

remit was rated highly, with focused agendas

and productive discuss

ions.

•

While there were no ident

iﬁed gaps

in the

technical skills of Committee members,

there is a need to monitor the Committee’s

composit

ion to ensure that sufﬁcient

experience in banking, accounting and

ﬁnancial report

ing remain in the Committee

as Committee members step down.

•

The contribut

ions from EY and GIA were

well rated. A suggestion was made for more

engagement with members of the GIA

function, in addit

ion to the Group Head,

Internal Audit.

2024 Action Plan

The 2024 Action Plan for the Committee

reﬂects suggestions from the evaluation

and continues to build on the solid progress

made last year:

•

Mainta

in focus on enhanced

internal controls

to meeting forthcoming legislat

ive and

corporate governance requirements.

•

Continue to monitor the length, focus and

timel

iness of papers.

•

Schedule train

ing sess

ions in 2024 to cover

topics such as ECL, internal controls and an

optimum control environment.

168

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

I am pleased to present the Board Risk Committee’s report for the year

ended 31 December 2023.

In an ever-changing and complex geopolit

ical and macroeconom

environment, the Committee remained focused to ensure efﬁc

ient

and effective risk management across the Group.

Market volatil

ity earl

ier in the year, resulting from the challenging

external environment, prompted the Committee to focus on key

macroeconomic issues. In particular, a severe liqu

ity stress test was

performed, in light of banking sector events, and the Committee also

reviewed and challenged the Group’s Annual Cyclical Scenario (ACS)

stress test results for submiss

ion to the Bank of England (BoE).

Credit Risk has been reviewed and discussed at most Committee

meetings, given the uncertain external environment, with China

CRE and global CRE being key areas of focus. Sovereign Risk

remained a prior

ity, w

ith global trends throughout the year being

closely monitored.

The Group’s hedging strategies were robustly challenged, with

specif

ic deep d

ives on Interest Rate Risk in the Banking Book,

Foreign Exchange, Treasury Portfolios and Financ

ial Markets.

The Committee is aware of its crit

ical role

in overseeing and assessing

robust ICS defence strategies. A key focus of 2023 was ICS Risk

management, with representation from the three lines of defence

and our Cyber Advisor to the Board, Sir Iain Lobban. In particular,

we scrutin

ised the Group’s ICS R

isk Appetite and Strategic Plan.

The Committee has dedicated sign

iﬁcant t

ime to ICS Risk this year,

includ

ing schedul

ing an ad hoc meeting and completing ICS train

ing.

ICS Risk will remain a key prior

ity g

iven the evolving and dynamic

landscape in which we operate.

The Committee has had oversight of Operational Risk during

the year, with particular focus on the Group’s data centre

migrat

ion programme.

Resolvabil

ity was d

iscussed regularly throughout the year, and we

reviewed and approved the Group’s Resolvabil

ity Assessment Report,

ahead of submiss

ion to the PRA

in October 2023. Assurance was

taken from the extensive work performed by the second and third

lines of defence to review and challenge Resolvabil

ity documentat

ion

prepared by the ﬁrst line.

Operational Resil

ience rema

ined a key topic in 2023, with the

Committee challenging the embedding of Important Business

Services (IBS) and Impact Tolerance Statements (ITS) with

in the

Group. The Committee reviewed and recommended to the Board

for approval the Group’s Operational Resil

ience Self-Assessment.

Furthermore, we considered and approved material changes to the

Group’s IBS and ITS aris

ing from the annual rev

iew, in accordance

with authority delegated by the Board. Progress to meet the

2025 regulatory deadline continues to be carefully monitored to

ensure compliance.

Financ

ial Cr

ime Risk has been a key feature of the Committee’s work

during the year. The CCIB and CPBB Risk reviews both covered FCR

matters, and we received dedicated papers on client due dil

igence

and surveillance and Russian sanctions. Towards the end of the year,

we considered emerging FC threats faced by the Group and risk

mit

igat

ion; and we reviewed and discussed the coverage of FCR by

the Committee, Audit Committee and the Board, to ensure that the

balance is appropriate. This discuss

ion prov

ided useful suggestions

for enhancement, which will be taken forward in 2024.

In December 2023, we welcomed the board risk committee chairs

from the Group’s Hong Kong and Singapore banking subsid

iar

ies as

observers. I hosted a call with subsid

iary board r

isk committee chairs

from across the Group in July 2023, designed to strengthen subsid

iary

governance linkages and engagement.

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

Robin

Lawther,

CBE

5/5

Ad hoc

5/5

4/5

Committee composit

ion

Shir

ish

Apte

Carlson

Tong

David

Tang

Phil

Rivett

Gay

Huey

Evans,

CBE

David

Conner

Maria

Ramos

(Chair)

Board Risk Committee

“In an ever-changing and

complex geopolit

ical and

macroeconomic environment,

the Committee remained

focused to ensure efﬁcient

and effective risk

management across

the Group.”

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 appropr

iateness

and effectiveness of the Group’s risk management systems, key

controls and consider

ing the

impl

icat

ions of material regulatory

change proposals, review

ing reports on pr

inc

ipal r

isks, includ

ing

Climate Risk, to the Group’s business, provid

ing overs

ight and

challenge to the design and execution of stress testing, 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

Who else attended Committee meetings in 2023?

The Group Chairman; Group Chief Executive; Group Chief

Financ

ial Ofﬁcer; Group Ch

ief Financ

ial Ofﬁcer Des

ignate

(from 2 September); Group Chief Risk Ofﬁcer (GCRO); Group

Head of Enterprise Risk Management; Group General

Counsel; Group Treasurer; Group Head, Conduct, Financ

ial

Crime & Compliance; Group Head, Internal Audit; the Group’s

Statutory Auditor; and the Group Company Secretary.

Sir Iain Lobban, independent adviser to the Board, regularly

attended discuss

ions on Informat

ion and Cyber Security Risk

and technology. Paul Khoo, an independent adviser to the

Board, attended discuss

ions on F

inanc

ial Cr

ime Risk (FCR)

related matters. EY attended all Committee meetings in

2023. 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,

economic, IT, Financ

ial Cr

ime (FC) and general business risks.

Biograph

ical deta

ils of the Committee members can be

viewed on

pages 137 to 141

6/6

Robin was unable to attend one ad hoc meeting due to a prior

business commitment

169

Standard Chartered

– Annual Report 2023

Directors’ report

Activ

ies during the year

Risk Appetite

•

Reviewed, challenged and approved at half year changes to the Group’s Risk Appetite Statement and

Board metrics.

•

Scrutin

ised and recommended to the Board for approval the rev

ised ICS Risk Appetite Statement and

Board metrics.

•

Reviewed and recommended to the Board revis

ions to the Group’s R

isk Appetite Statement and Board

metrics for 2024. Challenge was provided to ensure that the Risk Appetite sets appropriate boundaries in

respect of each Princ

ipal R

isk Type and is affordable with

in the overall context of our ﬁnancial resources.

Specif

ic cons

iderat

ion was g

iven to redistr

ibut

ion of metrics between the Board and management-level,

as well as appropriate Board oversight and reporting, includ

ing any breaches.

•

Monitored actual exposures throughout the year relative to Risk Appetite lim

its us

ing regular Board Risk

Information reports.

Further details of the Group’s Risk Appetite are set out on

pages 314 to 316

Enterprise Risk

Management

Framework

(ERMF)

•

Reviewed proposed material changes to the ERMF, aris

ing from the 2023 annual rev

iew, includ

ing a

refreshed deﬁnit

ion of the Risk Culture and recommended these changes to the Board for approval.

•

Considered the approach and key outcomes of the 2023 annual effectiveness of the ERMF. Afﬁrmat

ion

was received from the GCRO that the Group’s risk management and internal control framework is

materially effective and improvement areas were highl

ighted for management attent

ion.

Further details of the ERMF are set out on

pages 314 to 316

Princ

ipal R

isk

Types

•

Received reports on the Group’s Princ

ipal R

isk Types at each of its scheduled meetings, through a Board

Risk Information report. In addit

ion, the Comm

ittee had deeper discuss

ions on the top

ics set out on

page 172.

Further details on Princ

ipal R

isk Types, includ

ing the deﬁnit

ions of each, are set out on

pages 317 to 337

Key area

Action taken

Operational and

Technology Risk

•

Received regular updates on the risk environment includ

ing progress of key change and technology

programmes.

•

Discussed independent reports on Cash Payments systems and Client Lifecycle Management in CCIB,

particularly the progress to address the recommendations provided.

•

Considered the Group’s ISO 20022 readiness ahead of launch and the technological developments

required.

•

Received updates on the progress of key technology transformation programmes, particularly data

centre resil

ience and updates to the Group’s Cloud strategy, from all three l

ines of defence.

•

Sought assurance as to appropriate risk management of the key programmes.

Model Risk

•

Reviewed and discussed the key risks and issues relating to Model Risk management.

•

Provided review and challenge on the Group Model Risk Appetite.

•

Considered the progress of the programme for Advanced Internal Ratings Based model delivery.

•

Received updates on the Group Model Risk proﬁle, Risk Appetite and the progress of Model Risk

strategic in

iat

ives.

•

Considered the recent PRA requirements relating to Model Risk management for banks (SS1/23), the

impl

icat

ions for the Group’s model framework and expectations of the Board.

170

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

Activ

ies during the year

continued

Key area

Action taken

ICS Risk

•

Reviewed and discussed ICS Risk management, with representation from the three lines of defence and

our Cyber Adviser to the Board, Sir Iain Lobban. This included oversight of key milestones and topical

deep dives.

•

Challenged management as to its progress on the ICS Transformation Programme and scrutin

ised the

ICS Strategic Plan.

•

Considered the ICS Risk Appetite in detail. In particular, this included ICS Risk Appetite linkages to the

Group’s Threat-led Scenario Risk Assessment and calibrat

ion between Board and management-level

metrics and leading ind

icators.

•

Recommended three refreshed ICS Risk Appetite Board-level metrics to the Board for approval.

•

Received assurance from GIA on the ICS programme and monitored management’s progress to address

audit actions.

•

Monitored progress of the Insider Threat Programme and endorsed management’s holist

ic approach.

•

Committee members were inv

ited to attend meet

ings of the Group’s Cyber Security Advisory Forum,

along with the rest of the Board.

Treasury Risk

•

Received the Group Treasurer’s report, at each scheduled meeting, which covers market developments,

capital, liqu

ity, leverage and funding, recovery and resolution planning, regulatory updates and rating

agency updates.

•

Reviewed and discussed papers on Hedging strategies: Interest Rate in the Banking Book, Foreign

Exchange and Treasury Portfolios deep dives.

•

Considered and discussed the Group’s capital and liqu

ity posit

ion and the regulatory env

ironment in

the context of regulatory submiss

ions.

•

Reviewed, discussed and challenged the Group’s ACS stress test results for submiss

ion to the BoE, as

well as the Internal Capital Adequacy Assessment Process (ICAAP) and a severe liqu

ity stress test in

response to external market events.

For further detail on the Committee’s work on stress testing see

page 171

The Committee’s work on Resolvabil

ity

is set out on

page 171

Credit Risk

•

Received and discussed updates on Credit Risk, with China-related impa

irments be

ing key areas of focus,

cognisant of the work of the Audit Committee. These discuss

ions were further enhanced through deep

dives into various countries, sovereigns, and business/client segments, details of which are set out in

examples of deeper discuss

ions on spec

ic top

ics.

Traded Risk

•

Received and discussed papers on developments and changes in the risk proﬁle of Treasury and

Financ

ial Markets over the past year. The s

ize and volatil

ity of the Treasury book was rev

iewed, as well

as the quality and resil

ience of the F

inanc

ial Markets bus

iness.

•

Discussed management’s work to de-risk the Treasury Markets portfolio and the review of the Treasury

Market Risk Appetite.

•

Requested a deep dive on changes to the Financ

ial Markets Fa

ir Value portfolios.

Financ

ial Cr

ime

Risk

•

Reviewed FCR matters as part of regular CCIB and CPBB Risk reviews.

•

Discussed a paper on the Group’s approach to managing FCR, includ

ing cl

ient due dil

igence and

surveillance, as well as a Russian sanctions update.

•

Considered a paper setting out emerging FCR threats and the Group’s risk mit

igat

ion.

•

Reviewed and discussed the coverage of FCR by the Committee, Audit Committee and the Board,

whereby enhancements for 2024 were discussed.

171

Standard Chartered

– Annual Report 2023

Directors’ report

Activ

ies during the year

continued

Stress Testing

•

Provided oversight, challenge and, where required, approval for:

–

the Group Internal Liqu

ity Adequacy Assessment Process (ILAAP) submiss

ion,

includ

ing the scenar

and stress test results

–

the Group ICAAP submiss

ions,

includ

ing the scenar

ios, stress test and reverse stress test results

–

the Group’s ACS Stress Test results submiss

ion to the BoE

–

results of the Group Recovery Plan stress test

–

results of management’s ad hoc stress tests.

•

Considered the results of a severe liqu

ity stress test ran in early 2023, due to considerable banking

sector market volatil

ity, w

ith the particular object

ive of test

ing the speed with which the Group could

execute management actions to mit

igate the outﬂows.

•

Reviewed, discussed and challenged the outcome and key ﬁnd

ings of the l

iqu

ity stress test, particularly

management’s assumptions and the quality of management informat

ion.

Further details of stress testing are set out on

pages 314 to 316

Regulatory

Resolvabil

ity

•

Received regular updates from the three lines of defence which provided the Committee with oversight

of the Group’s progress on resolvabil

ity s

ince its ﬁrst regulatory submiss

ion

in 2022, with learnings from

the external market events in early 2023 particularly considered.

•

Welcomed management’s active dialogue with the BoE on the Group’s 2023 submiss

ion.

•

Approved the ﬁnal Group Resolvabil

ity Assessment Report for subm

iss

ion to the BoE and PRA,

accordance with delegated authority from the Board.

Recovery Plan

•

Reviewed and challenged the enhancements to the Group’s Recovery Plan.

Trading Book Wind-Down

•

Reviewed and discussed the Trading Book Wind-Down (TWD) programme.

•

Attended a train

ing sess

ion ahead of discuss

ing and prob

ing the expertise and resource capacity for the

TWD programme.

•

Approved TWD Governance roles and responsib

ies for subm

iss

ion to the PRA.

Operational Resil

ience – IBS and ITS

•

Reviewed and recommended to the Board for approval the Group’s Operational Resil

ience self-

assessment.

•

Considered and approved material changes to the Group’s IBS and ITS, aris

ing from an annual rev

iew,

in line with authority delegated by the Board.

•

Challenged the embedding of the IBS and ITS in the Group’s day-to-day processes.

IBOR transit

ion

•

Received updates on the IBOR transit

ion programme track

ing remediat

ion closely ahead of the LIBOR

cessation in September 2023, noting the transit

ion of the programme

into business as usual at the end

of 2023.

BCBS 239 princ

iples

•

Received and discussed an update on the outcome of the BCBS 239 self-assessment as of end 2022 and

the roadmap for compliance with BCBS 239.

•

Received an update on the trajectory of the BCBS 239 programme at year end 2023, includ

ing the

progress made and challenges faced.

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.

•

Reviewed the annual Risk and Control self-assessment and challenged the key areas of elevated

residual risk.

Further details on internal controls are set out on

page 222

Remuneration

as a risk

management

tool

•

Considered advice provided by the GCRO to the Remuneration Committee concerning the risk factors

to be taken into account by the Remuneration Committee in determin

ing

incent

ives for the Group Ch

ief

Executive and other colleagues. Such advice assists the Remuneration Committee in its assessment as

to whether the Group’s remuneration policy, practices and procedures are consistent with and promote

sound and effective risk management, and do not encourage risk-taking that exceeds the level of

tolerated risk of the Group.

Further details concerning the Group’s approach to using remuneration as a risk management

tool is set out in the Directors’ remuneration report on

pages 182 to 216

172

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

Activ

ies during the year

continued

Group regulator

communicat

ions

•

Discussed key communicat

ions from the PRA and FCA, where ICS, Resolvab

ity and TWD Governance

were the main themes.

Examples of

deeper

discuss

ions

into

specif

ic top

ics

•

CCIB Risk deep dive:

Received and discussed updates on the key risk areas and recent GIA work, with a

particular focus on change management and regulatory programmes.

•

CPBB Risk review:

Received and discussed papers covering the CPBB portfolio and particularly, Credit

Cards and Personal Loans, Partnerships, FC and ICS risks.

•

Funding and Liqu

ity review:

Considered a paper outlin

ing the Group approach to l

iqu

ity and funding

risk management and enhancements made in response to bank failures in early 2023.

•

Country Risk includ

ing Sovere

ign Risk:

Discussed the key Country Risk actions during 2022 and a

forward-looking view of the material risks for 2023 and also reviewed the Group’s Country Risk Early

Warning System.

•

Credit Portfolio Management (CPM) annual review:

Reviewed and discussed the risks relating to CPM

activ

ies and the progress made in balance sheet optim

isat

ion, better funds transfer pric

ing and more

accurate capital and liqu

ity forecasting.

•

Reputational and Sustainab

ity Risk:

Discussed a paper setting out the Group’s approach to

Environmental, Social and Governance risk and key enhancements planned, as well as the challenges

relating to regulatory change and data.

•

Climate Risk:

Discussed a paper on Climate Risk integrat

ion and scenar

io analysis, probing into the

embedding of Climate Risk in the Group’s three lines of defence. Received train

ing, along w

ith other

members of the Board, on Climate Risk in November 2023. Cognisant of the UK regulator’s focus on

Climate Risk, this will remain a key prior

ity

in 2024.

•

Safety and Security Risk:

Received an update on safety and security issues over the past 12 months.

•

Credit Risk review:

Reviewed progress reports includ

ing the key themes from the 2023 rev

iews and the

review plan for 2024. Discuss

ion focused on large exposures, resourc

ing and scope of Climate Risk

assessments and stress testing.

•

Chief Risk Ofﬁcer Treasury report:

Reviewed the second line view of Treasury Risk includ

ing r

isk

observations and recommendations around the current balance sheet and management of capital

and liqu

ity.

•

SC Ventures Risk and Governance:

Discussed an update on the key business risks, the governance model

adopted in the past year and outcomes of, and work to address recent GIA work.

•

Blue Sky Think

ing/Hor

izon Scanning:

Jointly held a horizon scanning session with the Audit Committee

on the forward-looking geopolit

ical agenda, where emerg

ing risks were discussed. Further details on the

Blue Sky Think

ing sess

ion on geopolit

ical r

isks are set out on page 146.

Progress against the 2023 Action Plan

The 2023 Action Plan set out a number of actions from the externally facil

itated Comm

ittee evaluation conducted in 2022.

The 2023 Action Plan was reviewed during the year and good process had been made against the actions, with them all

being completed.

Committee effectiveness review

During 2023, the Group Company Secretary facil

itated an

internal Board and Board committee effectiveness review.

Key observations from the 2023 internal effectiveness review

The feedback on the Committee’s function

ing

and effectiveness was posit

ive and spec

ically

highl

ighted the follow

ing:

•

Work had been done to make Committee

papers more focused and succinct.

•

The Committee, in conjunct

ion w

ith the Audit

Committee, had placed appropriate and

balanced focus on the oversight of FCR,

following the retirement of the Board

Financ

ial Cr

ime Committee in April 2022.

However, this is an important topic which

will remain on the agenda.

•

The contribut

ions by the GCRO and the R

isk

function were well rated.

2024 Action Plan

The 2024 Action Plan for the Committee

reﬂects suggestions from the evaluation

and continues to build on the solid progress

made last year:

•

Continue to monitor the length, focus and

timel

iness of papers, w

ith considerat

ion to

be given as to how peer analysis can be

included in relevant Committee papers.

•

Schedule a joint BRC and Aud

it Committee

session in Q4 2024 to cover FCR.

•

Schedule train

ing sess

ions in 2024 to cover

topics such as PRA model requirements, ICS

and future developments, FCR trends and

Climate Risk.

173

Standard Chartered

– Annual Report 2023

Directors’ report

Risk informat

ion prov

ided to the Committee

The Committee is authorised to seek any informat

ion that

requires in connection with its purpose consistent with the

requirements of BCBS 239 (a set of princ

iples for effect

ive risk

data aggregation and risk reporting to enable enhanced

risk management and decis

ion-mak

ing) that will allow the

Committee to fulﬁl its governance mandate relating to risks

to which the Group is exposed, and alert senior management

when risk reports do not meet its requirements. The

Committee will receive an update on the level of compliance

with the requirements of BCBS 239 (as at 31 December 2023),

once the outcome of the self-assessment is available on

29 February 2024.

The Committee receives regular reports on risk management

and tracks a wide range of risk metrics through a Board

Risk Information report. This report provides an overview of

the Group’s risk proﬁle against the Group’s Risk Appetite

Statement. The GCRO’s report covers the macroeconomic

environment, geopolit

ical outlook, mater

ial events and

disclosures and ongoing risks. Coverage of Princ

ipal R

isk

Types and regulatory matters are also included in this report.

Regular updates on Country Risk and geopolit

ical tens

ions

have been reported on and discussed throughout the year.

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 2023 and in early 2024.

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 remit

effectively. The Committee reviewed and discussed a paper

setting out an overview of the changes to the Risk function in

2023, 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

In 2023, Maria Ramos attended a risk committee meeting

of SCBHK. The risk committee chairs of SCBHK and SCBSL

attended one Board Risk Committee meeting. This practice

will continue in 2024 to reinforce these important linkages.

Maria Ramos hosted an annual video-conference with the

chairs of subsid

iary board r

isk committees and INEDs in

July 2023.

Please refer to page 160 on linkages between the Committee

and chairs of subsid

iary board r

isk committees.

174

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

I am delighted to present my ﬁrst Culture and Sustainab

ity

Committee report, and I extend my thanks to Jasmine Whitbread for

her skilful stewardship of the Committee over the past seven years.

I have reviewed the operation and scope of the Committee, includ

ing

how it enhances the scrutiny of the Board in key areas, how it interacts

with the Board and other committees, and how it discharges its

responsib

ies. Bu

ild

ing on a strong foundat

ion, the Committee has

been refocused on the development of our Sustainab

ity, Climate and

Culture in

iat

ives and the Stands.

Sustainab

ity is a strategic prior

ity for the Group, help

ing people to

thrive long term. Following the Board’s approval of our refreshed

Sustainab

ity Strategy, the Committee has been overseeing the

implementat

ion of th

is plan, which includes deliver

ing on our net

zero commitments, scaling up Sustainable Finance, leveraging our

Innovation Hubs to drive ecosystem development and future income,

and further embedding sustainab

ity across the Group. At every

meeting, the Committee has been monitor

ing the fast-mov

ing global

sustainab

ity landscape to ensure the Group continues to strengthen

its support for clients on their transit

ion journeys.

The Committee has overseen the rational

isat

ion of the Group’s

approach to sustainab

ity, underpinned by both long-term goals –

our Sustainab

ity Aspirat

ions – and short-term targets and pr

ior

ies

– our Strategic Pillars. These object

ives are expl

itly l

inked to

performance metrics, to assist the Group in narrowing its focus to

deliver greater relevance and impact for our stakeholders.

Last year, Jasmine spoke about the work that was in progress to

enhance our Board workforce engagement programme. I’m pleased

to report that the Board has revamped its approach and it is being

monitored by the Committee. Under this framework, all INEDs

will partic

ipate

in engagement sessions with targeted groups of

colleagues as part of our programme of Board vis

its and

in our

London headquarters. These sessions will provide directors with a

better sense of our colleagues’ challenges, successes and concerns,

and add to the informat

ion rece

ived from employee surveys and

other engagements.

The Group’s Stands are particularly important as they represent not

only for what the Group stands but also how we can deliver concrete

impact over a multi-year time horizon. During the year, the Committee

received a progress update on how the Stands were being ‘lived’

in practice and the ongoing in

iat

ives framed around three key

areas: ﬁnancial

inclus

ion through l

ift

ing part

ipat

ion, in

iat

ives

supporting SMEs, and the contribut

ions of ESG Products/ Susta

inable

Finance. The Committee is also overseeing a review of the metrics

underpinn

ing each of the Stands to ensure that we can measure

progress and look to incorporate relevant aspects with

in our annual

and longer-term remuneration incent

ives.

This year, the Committee endorsed phase 2 of Futuremakers – the

Group’s global in

iat

ive to tackle

inequal

ity and promote econom

inclus

ion. The Comm

ittee applauded the achievement of phase 1

which raised USD93.3 mill

ion from 2019 to 2023 and reached more

than 2.1 mill

ion young people across 43 countr

ies to empower the

next generation to learn, earn and grow. Build

ing on the successes

of phase 1, we have reﬁned our focus to create greater impact in our

communit

ies

in the next seven years (2024 to 2030). With a select

group of value-adding programme partners, we will lift the economic

partic

ipat

ion of disadvantaged young women and micro businesses.

The Group’s culture of excellence has been deﬁned as ‘a one Bank

culture of ambit

ion, act

ion and accountabil

ity that puts our cl

ients

at the heart of all we do’. The Committee has been overseeing the

ongoing work to deliver on this aspirat

ion, and

it is pleasing to see the

effect of this with the most recent My Voice survey showing that the

employee experience is improv

ing across the Group.

Focus on divers

ity and

inclus

ion (D&I)

iat

ives cont

inued, and the

Committee was supportive of the attention and focus on ‘inclus

ion

sentiment’, measured through an index of eight ind

icators

in the My

Voice survey. The Committee has overseen the Group’s progress on

advancing its D&I maturity and performance culture.

The following report provides further ins

ight

into the Committee’s

work over the year.

Dr Linda Yueh

Chair of the Culture and Sustainab

ity Committee

Culture and Sustainab

ity

Committee

“The Group’s Stands are particularly important as

they represent not only for what the Group

stands but also how we can deliver concrete

impact over a multi-year time horizon.”

Committee composit

ion

Jasmine stepped down from the Committee on 3 May 2023

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

Who else attended Committee meetings in 2023?

The Group Chairman; Group Chief Executive; Group Head,

Human Resources; Group Head Corporate Affairs, Brand &

Marketing; Chief Sustainab

ity Ofﬁcer, Group General Counsel

and Group Company Secretary.

Biograph

ical deta

ils of Committee members can be found

pages 137 to 141

David

Tang

Robin

Lawther,

CBE

Jackie

Hunt

Linda Yueh,

CBE (Chair)

4/4

Jasmine

Whitbread

1/1

N/A

1/1

Ad hoc

175

Standard Chartered

– Annual Report 2023

Directors’ report

Activ

ies during the year

Sustainab

ity

and ESG

•

Continued to review and challenge the Group’s progress on the net zero pledge made at the 2021 AGM,

tracking the Group’s progress in the ever-evolving landscape.

•

Oversaw the Group’s Sustainab

ity Strategy, receiv

ing progress updates from the Group Ch

ief

Sustainab

ity Ofﬁcer.

•

Monitored the assessment of the Group’s performance by the various external ratings agencies on its

approach to ESG matters, focusing on the agencies that the Group’s investors prior

ise.

•

Oversaw the rational

isat

ion of the Sustainab

ity Aspirat

ions

into a framework of four high-level

overarching Aspirat

ions: scale susta

inable ﬁnance, drive social impact through our business and

communit

ies, upl

ift and deliver on net zero commitments, and enhance and deepen leadership with

the sustainab

ity ecosystem. These four overarching Aspirat

ions w

ill remain constant with the metrics

underpinn

ing them be

ing period

ically rev

iewed and amended.

•

Discussed and endorsed the revised Global Community Engagement Strategy, phase 2 of Futuremakers

by Standard Chartered, following achievement of the ambit

ion set out

in phase 1 .

Stands

(Accelerating

Zero, Lift

ing

Partic

ipat

ion

and Resetting

Globalisat

ion)

•

Received an update on how CPBB was embedding the immed

iate and longer-term aspects of

its work

on the Stands into its business strategy.

•

Continued to monitor the Accelerating Zero Stand through the work outlined in the Sustainab

ity

section above, includ

ing oversee

ing the net zero pathway and the rational

isat

ion of the sustainab

ity

Aspirat

ions.

•

Reviewed and discussed the year-end assessment on the achievement of the Stands.

Under the revised terms of reference, a progress update on one of the Stands will be presented to each

meeting and a written update will be provide on the other two. The Committee will also review and

challenge the annual Stands assessment and make recommendations to the Remuneration Committee.

Culture and

Divers

ity and

Inclusion (D&I)

•

Received an update on the Group’s culture work which had been completed in 2023 and the areas of

focus for the remainder of the year and into 2024.

•

Monitored progress against the D&I strategy and discussed the Group’s approach to inclus

ion aga

inst an

evolving employee advocacy landscape.

•

Received an update from Group Internal Audit on its activ

ies and opin

ions w

ith respect to culture and

sustainab

ity.

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.

During the year, the Committee has overseen the following activ

ity:

•

Received the annual employee engagement survey (My Voice) and probed the results to understand

what was driv

ing the scores and challenged the team on areas for

improvement.

•

Reviewed the exist

ing framework for Board workforce engagement and launched a new enhanced

model at the end of the year. Under the new model, informal listen

ing sess

ions will be included in the

programme for every overseas vis

it,

and in our London headquarters,

with an expectation that all INEDs

will partic

ipate

in at least one session annually. These are in addit

ion to the channels that are currently

in place for the Board to understand the views of the workforce, includ

ing management report

ing to

the Board on culture, the My Voice survey, and other people-related topics presented to the Committee.

•

Informal lunches hosted by the Board, with UK Talent in September and Seoul Talent in November,

provided an opportunity for the Board to hear directly from employees on how the Bank’s direct

ion and

strategy was lived and embedded in different parts of the Bank.

More informat

ion on l

isten

ing to our employees can be found on

page 60

176

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

Progress against the 2023 Action Plan

The 2023 Action Plan set out a number of actions from the externally facil

itated Comm

ittee evaluation conducted in 2022.

The 2023 Action Plan was reviewed during the year and good process had been made against the actions, with all of them

being completed.

Committee performance review

During 2023, an internal Board and Committee performance review was facil

itated by the Group Company Secretary.

Key observations from the 2023 internal effectiveness review

The feedback on the Committee’s function

ing

and effectiveness was posit

ive and spec

ically

highl

ighted the follow

ing:

•

The review of the Committee’s responsib

ies

had been completed during the year,

includ

ing strengthen

ing the links between

the Committee and the Board and its

other committees.

•

There were no ident

iﬁed gaps

in the

technical skills of the Committee, but

considerat

ion

is being given to continu

ing

to enhance the Committee with expertise

in technology, employee engagement

and climate.

•

Committee papers were rated as high

quality and could be further improved

by clearly stating the action required by

the Committee.

2024 Action Plan

The 2024 Action Plan for the Committee

reﬂects suggestions from the evaluation

and continues to build on the solid progress

made last year:

•

Monitor the refocus of the Committee to

ensure that the Committee’s mandate is

clear, that papers clearly set out their

purpose, and that the links between the

Committee and the Board and other Board

committees continue to be strengthened.

•

Monitor and reduce the overlap with the

Board, other Board committees and

Management, with particular focus placed

on the alignment between the Committee

and the Remuneration Committee in relation

to the Stands.

•

Arrange further train

ing on net zero, ESG and

sustainab

ity/climate.

177

Standard Chartered

– Annual Report 2023

Directors’ report

The year started with a number of changes to the Board’s

composit

ion. We welcomed L

inda Yueh to the Board as an INED on

1 January 2023, Christ

ine Hodgson ret

ired on 31 January 2023 after

nine years on the Board, and Jasmine Whitbread retired after eight

years, at the Annual General Meeting. Following Jasmine’s retirement,

Linda was appointed Chair of the Culture and Sustainab

ity

Committee and a member of the Governance and Nominat

ion

Committee. This year, we are sorry to say goodbye to Gay Huey Evans

and Carlson Tong. As announced on 16 February 2024, Gay will step

down from the Board with effect from 29 February 2024. Carlson will

step down on 9 May 2024, ahead of the AGM. We thank Gay for her

dedicat

ion and s

ign

iﬁcant contr

ibut

ion, part

icularly as chair of the

Board Financ

ial Cr

ime Risk Committee, and Carlson for his dedicat

ion

and contribut

ion as a member of the Aud

it and Board Risk

Committees. We also thank Paul Khoo, who steps down this year as

Financ

ial Cr

ime Advisor to the Board. Paul’s wise counsel has been

invaluable in our ﬁnanc

ial cr

ime compliance journey over the past

nine years.

After nine years as GCFO, Andy Halford decided to retire from the

Group. The Committee spent considerable time overseeing the search

for his replacement. A robust search and assessment process was

undertaken, both internally, through the succession plans which were

in place, and mapped externally, in conjunct

ion w

ith executive search

ﬁrm Russell Reynolds. A number of exceptional candidates were

ident

iﬁed, both

internal and external, and Committee members met

with a range of shortlisted candidates, of which Diego De Giorg

emerged as the preferred successor. The Committee was impressed

by Diego’s profound commercial acumen and strong business

experience, includ

ing deep

investor and entrepreneurial experience,

which he has developed over more than three decades in the global

ﬁnancial serv

ices sector. Diego jo

ined the Group

in September 2023

as GCFO Designate and began a comprehensive induct

ion

into the

Group. After receiv

ing regulatory approval he was appo

inted to the

Board as GCFO in January 2024. Andy will remain with the Group as

a senior adviser until the end of August 2024.

On 16 February 2024 we announced that we are welcoming Diane

Jurgens to the Board from 1 March 2024. Diane is a highly experienced

and respected technologist who will bring sign

iﬁcant technology and

transformation expertise and ins

ight to the Board hav

ing operated

across a variety of sectors and the Group’s key markets.

The Committee spends a great deal of its time consider

ing INED

succession planning and the wider composit

ion of the Board, ensur

ing

that the Board has, and will continue to have, the necessary mix of

skills, knowledge, expertise and divers

ity,

in the broadest sense, to

enable the Group’s long-term success. This year, the Committee has

been focused on the recruitment of high-quality candidates with a

divers

ity of sk

ills and backgrounds includ

ing technology, susta

inab

ity,

consumer focus, and improv

ing gender d

ivers

ity and representat

ion.

Throughout we remain committed to the importance of mainta

ing

gender divers

ity on the Board. The Comm

ittee also provided oversight

of the detailed executive and senior management succession plans.

While, as a result of the departure of Christ

ine and Jasm

ine, we were

disappo

inted to end the year just below both our own gender d

ivers

ity

target of at least 40 per cent female representation and that set out

in the UK List

ing Rules, follow

ing the composit

ion changes to the

Board announced on 16 February 2024, by the 2024 AGM female

representation on the Board will be 42 per cent.

As part of the Committee’s governance oversight role, it considered

proposals from the FRC and the UK Government for ACG reforms.

The new UK Code was published in January 2024. The Committee

will consider the changes to the UK Code as part of its Committee

agenda in 2024, ahead of the UK Code 2024 becoming applicable

to the Company in 2025, and addit

ional

internal control reporting

provis

ions becom

ing applicable the following year. It also received

updates from the three regional CEOs who each have responsib

ity

for the subsid

iary governance processes across the

ir regions and

provide a holist

ic v

iew of the governance framework and challenges

faced across the Group’s footprint.

The Committee reviewed the progress of our induct

ion programme

for Linda Yueh, Robin Lawther and Jackie Hunt, and found that the

programme had been well received and that good progress had been

made. The Committee also paid sign

iﬁcant attent

ion to enhancing

the effectiveness of the Board and its committees. In the autumn

of 2023, a Board effectiveness review was undertaken, internally

facil

itated by the Group Company Secretary, wh

ich concluded that

the Board continues to operate effectively while also signall

ing several

areas for improvement, details of which can be found on page 155.

Dr José Viñals

Chair of the Governance and Nominat

ion Comm

ittee

2/2

1/1

2/2

Ad hoc

1/1

2/2

Committee composit

ion

Linda jo

ined the Comm

ittee on 3 May 2023

Jasmine stepped down from the Committee on 3 May 2023

Governance and

Nominat

ion Comm

ittee

“This year, the Committee has been

focused on the recruitment of

high-quality candidates with a

divers

ity of sk

ills and backgrounds

includ

ing technology,

sustainab

ity, consumer focus and

improv

ing gender d

ivers

ity

and representation.”

What are the main responsib

ies of the Comm

ittee?

The Committee has responsib

ity for assist

ing and

advis

ing the Board

in relation to the composit

ion of, and

appointments to, the Company’s Board and its committees,

and the development of a diverse pipel

ine for success

ion.

The Committee is also responsible for consider

ing 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

Who else attended Committee meetings in 2023?

The Group Chief Executive; Group Head, HR; and Group

Company Secretary.

Biograph

ical deta

ils of the Committee members

can be viewed on

pages 137 to 141

Jasmine

Whitbread

Maria

Ramos

Linda Yueh,

CBE

Phil

Rivett

Shir

ish

Apte

José

Viñals

(Chair)

3/3

2/2

1/1

3/3

178

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

Board composit

ion as at 31 December 2023

International

experience

INED tenure

(includ

ing Cha

ir)

Board gender divers

ity

Female

Male

Number of senior of posit

ions

(CEO, CFO, SID and Chair)

Board ethnic divers

ity

Female

White

Male

Ethnic

minor

ity

background

Representation

from our markets

Banking, risk, ﬁnance and

accounting experience among

INEDs and Chair

(2022: 43%)

(2022: 25%)

(2022: 21%)

100

0–1 year

1–3 years

3–6 years

6–9 years

9+ years

36%

27%

In compliance with the UK List

ing Rule 9.8.6(10), we report on the ethn

ic background and gender of directors on our Board

and senior management in this section.

Experience

Gender and ethnic divers

ity

Number of

Board members

Percentage of

the Board

(%)

Number of

senior posit

ions

on the Board

(CEO, CFO, SID

and Chair)

Number in

executive

management

Percentage of

executive

management

(%)

Men

61.5

50.0

Women

38.5

50.0

Not specif

ied/prefer not to say

Gender divers

ity – Board members, sen

ior posit

ions and execut

ive management

Ethnic divers

ity – Board members, sen

ior posit

ions and execut

ive management

Number of

Board members

Percentage of

the Board

(%)

Number of

senior posit

ions

on the Board

(CEO, CFO, SID

and Chair)

Number in

executive

management

Percentage of

executive

management

(%)

White Brit

ish or other Wh

ite

(includ

ing m

inor

ity-Wh

ite groups)

69.2

35.7

Mixed/multiple ethnic groups

Asian/ Asian Brit

ish

30.8

42.9

Black/African/Caribbean/Black Brit

ish

7.1

Other ethnic group, includ

ing Arab

Not specif

ied/prefer not to say

14.3

The ﬁgures are presented to 1 decimal place

179

Standard Chartered

– Annual Report 2023

Directors’ report

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, to

review the market for future INED candidates with capabil

ies in technology, consumer experience,

sustainab

ity and market representation.

•

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.

•

Worked with Russell Reynolds to conduct an external talent mapping and search process for the Group

Chief Financ

ial Ofﬁcer role. Oversaw a thorough assessment and

interv

iew process for both external and

internal candidates for the role. The process resulted in the Committee recommending to the Board the

appointment of Diego De Giorg

•

Mainta

ined overs

ight of the progress made by Shir

ish Apte, Rob

in Lawther, Jackie Hunt and Linda Yueh,

against their 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. As part of this process, the Committee

recommended to the Board the appointment of Linda Yueh as Chair of the CSC.

Board and

committees’

effectiveness

review

•

Provided oversight of the Board and committees’ evaluation, and monitored progress against the 2023

Action Plan, which addressed the key observations from the 2022 effectiveness review.

•

Discussed the observations and recommendations which ﬂowed from the 2023 internally facil

itated

Board and committees’ review and recommended to the Board the 2024 Action Plan.

Details of this year’s Board and committees’ evaluation, includ

ing the process wh

ich we followed, observations from the

review and the resulting 2024 Action Plan can be found on

pages 155 and 156

Board Divers

ity

Policy

•

Reviewed progress made in 2023 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. No changes were

made to the Policy in 2023.

•

Considered the Company’s current and projected compliance against the targets set out in the UK

List

ing Rules and D

isclosure Guidance and Transparency Rules (DTRs) in relation to divers

ity and

inclus

ion

on company boards.

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 180

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.

Outside 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

•

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.

Corporate

governance

•

Considered the FRC’s proposed reforms to the 2018 UK Corporate Governance Code, the outcome of the

FRC’s consultation and potential impl

icat

ions on the Group’s governance, includ

ing on r

isk management,

internal controls and reporting obligat

ions.

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.

Russell Reynolds also provides senior resourcing to the Group. The Company is not aware of any connections between Russell Reynolds and the

Company’s directors.

Implementation of the Board Divers

ity Pol

icy

The Committee conducted its annual review of the Board Divers

ity Pol

icy (the Policy) in 2023. No changes were made to

the Policy.

Although our Board Divers

ity Pol

icy does not contain specif

icat

ions or targets for committee membership, the Policy provides

for a diverse Board with a wide range of skills and perspectives which its members bring to our Board committees.

180

Standard Chartered

– Annual Report 2023

Directors’ report

Corporate governance

Progress against the Board Divers

ity Pol

icy object

ives, and targets set out

in the UK List

ing Rules

9.8.6(9)

As the composit

ion of the Board cont

inues to change, the balance of women directors on the Board this year fell slightly

compared with last year, with female representation on the Board ending the year at 38 per cent following the departures

of Christ

ine Hodgson and Jasm

ine Whitbread (as at 31 December 2022 it was at 43 per cent). This falls short of both the

requirements set out in the Policy and in the List

ing Rules. The Board

is absolutely committed to ensuring female representation

on the Board is at least in line with the target of 40 per cent set out in the List

ing Rules and the Pol

icy. Following the composit

ion

changes to the Board, announced on 16 February 2024, by the 2024 AGM female representation on the Board will be

42 per cent.

As of 31 December 2023, the senior posit

ions on the Board, as deﬁned by the L

ist

ing Rules, are held by one female d

irector and

three male directors, in line with the min

imum requ

irement set out in the List

ing Rules. More deta

ils are set out on page 178.

As of 31 December 2023, directors from an ethnic minor

ity background represented 31 per cent of the Board, above the

30 per cent target set out in our Policy. Of the thirteen directors on our Board, four directors are from an ethnic minor

ity

background, above the min

imum requ

irement set out in the List

ing Rules. More deta

ils are set out on page 178.

Aligned to the Policy’s broad ambit

ion, th

is year we continue to report on the progress made against the seven object

ives set

out in the table 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

40 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. The composit

ion of the Board cont

inued to

change during the year, with the retirement of two INEDs, Christ

ine Hodgson

and Jasmine Whitbread from the Board on 31 January 2023 and 3 May 2023

respectively. Linda Yueh was appointed an INED to the Board on 1 January 2023

and we announced the appointment of Diego De Giorg

i as Ch

ief Financ

ial Ofﬁcer

Designate to succeed Andy Halford, with effect from 3 January 2024. Female

representation on the Board is currently 38 per cent, below both the Board’s target

and that set out in the List

ing Rules. Follow

ing the composit

ion changes to the

Board, announced on 16 February 2024, by the 2024 AGM female representation

on the Board will be 42 per cent.

Adopting an ethnic

ity asp

irat

ion of a

min

imum of 30 per cent from an ethn

minor

ity background

Following the changes to the composit

ion of the Board dur

ing the year,

representation from ethnic minor

ity background has

increased from 21 per cent

in 2022 to 31 per cent at the end of 2023. We remain committed to our ethnic

ity

aspirat

ion and to ensur

ing a broad representation of our directors from across

our markets.

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, EU, North Amer

ica, North and South-East 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

2023, 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 longlists and

shortlists to ident

ify potent

ially suitable INED candidates. Areas of particular focus

in 2023 included:

•

Expertise from the Technology sector

•

Global Consumer experience (non-FS)

•

Former CEO experience

•

Representation from Group’s markets.

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.

Only engaging search ﬁrms who are signed up

to the Voluntary Code of Conduct for Executive

Search ﬁrms

We continue to only engage 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

aspirat

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

aspirat

ions w

ill continue to be developed.

181

Standard Chartered

– Annual Report 2023

Directors’ report

Details of the Board’s diverse composit

ion are set out on pages 137 to 141 of th

is report, and that of the Management Team can

be found on pages 142 to 144. Our approach to collecting Board divers

ity data

is set out on page 503.

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 at

sc.com/divers

ity-and-

inclus

ion

Progress against the 2023 Action Plan

The 2023 Action Plan set out a number of actions from the externally facil

itated Comm

ittee evaluation conducted in 2022.

The 2023 Action Plan was reviewed during the year and good process had been made against the actions.

Committee effectiveness review

During 2023, the Group Company Secretary facil

itated an

internal Board and Board committee effectiveness review.

Key observations from the 2023 internal effectiveness review

The feedback on the Committee’s function

ing

and effectiveness was posit

ive and spec

ically

highl

ighted the follow

ing:

•

Work had been done to improve the pace

of the ident

iﬁcation and assessment of

candidates.

•

The Committee’s focus and dil

igence

ident

ify

ing skills and experience required on

the Board, and oversight of CEO, CFO and

INED succession was rated highly.

•

The INED induct

ion programmes,

includ

ing

the phased nature of their delivery, were

well rated.

2024 Action Plan

The 2024 Action Plan for the Committee

reﬂects suggestions from the evaluation

and continues to build on the solid progress

made last year:

•

Continue to focus on Board succession

planning, with particular focus placed on

increas

ing d

ivers

ity and add

ing further

deep banking expertise, global markets

representation and sustainab

ity expertise

to the Board.

•

Consider increas

ing the t

ime allotted for

meetings to ensure sufﬁc

ient del

iberat

ion.

•

Follow up on the suggestions for train

ing to

be provided in 2024, includ

ing on d

ivers

ity

and inclus

ion.

182

Standard Chartered

– Annual Report 2023

Directors’ report

Directors’ remuneration report

Directors’

remuneration report

“Rewarding strong performance

and deliver

ing on our targets.”

Key sections

Page 186

Remuneration at a glance

Page 188

Summary of the directors’ remuneration

policy

Page 190

Remuneration alignment

Page 192

Committee at a glance

Page 194

Group-wide remuneration

Page 195

Directors’ remuneration in 2023

Page 205

2024 policy implementat

ion for d

irectors

Page 208

Addit

ional remunerat

ion disclosures

I am pleased to present our directors’ remuneration report

for the year ended 31 December 2023. This report provides

an overview of the Remuneration Committee’s work on

remuneration for the executive directors and the wider

workforce. The directors’ remuneration policy has operated

as intended, incent

ing performance l

inked to the Group’s

strategy and align

ing w

ith shareholder interests.

The Group continues to make sign

iﬁcant progress and has

delivered strong performance in 2023, achiev

ing our amb

ion

of a double-dig

it return on tang

ible equity (RoTE) for the full

year. The decis

ions taken by the Comm

ittee were based on

careful considerat

ion of a broad range of factors

includ

ing the

economic environment in our markets, performance across

the Group, and the need for appropriate and fair reward for

our workforce.

Our performance in 2023

Underlying proﬁt before tax is up 27 per cent at ccy on

2022, reﬂecting sign

iﬁcant progress

in our high-growth

markets despite an uncertain picture for the global

economy. RoTE has continued to grow above pre-

pandemic levels and is up 240 basis points to 10.1 per cent.

RoTE performance

10%

12%

2023

2022

2021

2020

2019

2018

The Group remains well capital

ised w

ith Common Equity

Tier 1 (CET1) ratio at 14.1 per cent.

The formulaic outcome for Group performance, based

on the balanced scorecard, was 80 per cent. Of this,

38 per cent (out of a possible 50 per cent) related to

ﬁnancial performance

includ

ing

income up 13 per cent

and the increase in RoTE. The remain

ing 42 per cent

related to the achievement of non-ﬁnanc

ial goals,

includ

ing strong cl

ient satisfact

ion performance,

improved growth across target markets and

achievements against our sustainab

ity targets.

See

pages 196 and 197

for more informat

ion

Proﬁt before taxation

$5,678

27%

Return on tangible equity

10.1%

240bps (underlying basis)

Total shareholder return

9.4%

2022: 41.4%

Common Equity Tier 1 ratio

14.1%

10bps

Financ

ial KPIs

Group-wide remuneration

2023 discret

ionary annual

incent

ives

The Group scorecard formulaic assessment of 80 per cent is

the starting point for determin

ing d

iscret

ionary

incent

ives.

Summary of 2023

remuneration decis

ions

•

Group performance in 2023 was strong across both

ﬁnancial and non-ﬁnancial metr

ics. Remuneration

decis

ions have been made to reﬂect th

is performance

and the delivery of our targets.

•

Discret

ionary

incent

ives are USD1,574m, down 1 per

cent on 2022, reﬂecting Group performance and

affordabil

ity.

•

Annual incent

ive awards for execut

ive directors, Bill

Winters, Group Chief Executive (CEO) and Andy

Halford, Group Chief Financ

ial Ofﬁcer (GCFO), were

assessed at 66 per cent and 65 per cent of the

maximum, and are 2.5 per cent and 2.6 per cent

lower than 2022 awards respectively.

•

Global average salary increases of 2.2 per cent for 2024,

focused on junior employees and those

in high inﬂat

ion

markets. No salary increases for executive directors in

line with this approach.

•

Projected performance outcome of 66 per cent for the

2021-23 long-term incent

ive plan (LTIP) awards.

•

Reward for all Group employees, includ

ing the

executive directors, continues to be aligned to the

Group’s strategic prior

ies, through the annual and

long-term incent

ive scorecards.

183

Standard Chartered

– Annual Report 2023

Directors’ report

To arrive at a distr

ibutable pool, the Comm

ittee considers

addit

ional factors not captured by the scorecard, such as the

external environment, market competit

iveness and overall

affordabil

ity. The Comm

ittee also considers risk, control and

conduct matters, includ

ing ongo

ing invest

igat

ions and

matters raised by regulators.

Following its review of these factors, the Committee

determined that a reduction of 15 percentage points from the

ial scorecard outcome was appropriate. In making this

decis

ion, wh

ile noting that 2023 performance was very

posit

ive, the Comm

ittee was conscious to mainta

in an

appropriate balance between rewarding our employees and

deliver

ing appropr

iate value to shareholders.

Calculating the Group scorecard outcome for

discret

ionary

incent

ives

50%

38%

50%

42%

-15%

Financ

ials

Non-ﬁnancials

Committee

discret

ionary

reduction

65%

Group scorecard outcome

See

pages 196 and 197

for further details

Discret

ionary

incent

ive pool

Incentive pool

($m)

% change

(reported)

% change

(same store basis)

1,574

(1%)

(2%)

2024 salaries

We have increased salaries in 2024 by 2.2 per cent on average

globally. This is lower than last year, reﬂecting falling inﬂat

ion

in a number of our locations. We have focused the increases

on junior employees, and on markets that cont

inue to

experience high rates of inﬂat

ion.

Addit

ionally, we have prov

ided targeted support through

off-cycle salary increases to colleagues facing economic

hardships in countries such as Angola, Argentina, Egypt,

Ghana, Niger

ia, Pak

istan, Sierra Leone, Turkey and Zimbabwe.

Executive director remuneration in 2023

Annual incent

ives for execut

ive directors

Annual incent

ives for B

ill and Andy are based predominantly

on the Group scorecard with an addit

ional element for

personal performance, as below.

50%

40%

10%

Financ

ials

Strategic

Indiv

idual

performance

For 2023, the Committee approved the following annual

incent

ive outcomes,

includ

ing

ind

idual performance

assessments, for Bill and Andy. The Committee is satisf

ied that

these are appropriate given 2023 Group performance and the

sign

iﬁcant personal contr

ibut

ions from B

ill and Andy.

2023 annual

incent

ive (£)

% of maximum

Year-on-year

change (%)

Bill Winters

1,461,874

66%

(2.5%)

Andy Halford

920,348

65%

(2.6%)

See

pages 196 to 199

for further details

2021-23 LTIP awards vesting in March 2024

The 2021-23 LTIP awards are due to start vesting in March

2024 with a projected performance outcome of 66 per cent,

based on RoTE performance of 10.1 per cent (maximum

outcome), relative total shareholder return (TSR) ranking

between median and upper quartile and above target

performance against sustainab

ity and other strategic

measures. As usual, the ﬁnal relative TSR outcome will be

assessed three years from the date of award, in March 2024.

The values delivered by this projected outcome are based on

the three-month average share price to 31 December 2023

and are included in the single total ﬁgures of remuneration for

Bill and Andy.

Award share

price (£)

Valuation share

price (£)

2021-23 LTIP

projected

outcome (£)

Bill Winters

4.90

6.72

3,340,237

Andy Halford

4.90

6.72

2,135,206

The Committee considered the grant price against that of the

previous year’s award, and against the average share price in

the period leading up to the grant date. Based on the review,

the Committee determined that the price difference was not

sign

iﬁcant and, therefore, there was no w

indfall gain and no

adjustment to the award was required.

See

pages 200 and 201

for further details

Single total ﬁgure of remuneration for 2023

The 2023 annual incent

ive and projected 2021-23 LTIP

performance outcome results in a 2023 single ﬁgure for Bill of

GBP7,836,987 and for Andy of GBP4,921,095. This represents

year-on-year increases of 22 and 23 per cent respectively,

largely due to the projected performance outcome of the

2021-23 LTIP award.

2023 single total ﬁgure of remuneration

(£000)

7,837

6,408

4,740

2023

Bill Winters

2022

2021

1,000

2,000

3,000

4,000

8,000

7,000

6,000

5,000

4,921

3,988

3,032

2023

Andy Halford

2022

2021

1,000

2,000

3,000

4,000

6,000

5,000

Salary, pension, beneﬁts

Annual incent

ive

LTIP

A sign

iﬁcant port

ion of both Bill’s and Andy’s total

remuneration is share-based with delivery and release over an

eight-year period. The deferral, retention and recovery

provis

ions of the

ir pay continue to reinforce alignment with

shareholder interests and the Group’s long-term performance.

Both Bill and Andy continue to exceed their shareholding

requirements.

See

page 195

for further details

184

Standard Chartered

– Annual Report 2023

Directors’ report

Directors’ remuneration report

Executive directors’ remuneration in 2024



Change in GCFO



On 31 August 2023 we announced that Andy Halford had decided to retire as GCFO and as an executive director.

He has been succeeded by Diego De Giorg

i who joined on 1 September 2023. D

iego was appointed as GCFO and

joined the Board as an execut

ive director on 3 January 2024, after receiv

ing regulatory approval.

Andy

Andy remained as GCFO and an executive director

until 2 January 2024, helping to ensure a smooth

transit

ion. After stepp

ing down as GCFO, he is

continu

ing as a Sen

ior Adviser, working on strategic

projects for the Group. He will continue to receive his

salary and beneﬁts until he retires on 31 August 2024.

Andy will be considered an elig

ible leaver and,

accordance with the directors’ remuneration policy,

was elig

ible for a 2023 annual

incent

ive award,

determined by the Committee based on Group and

ind

idual performance during 2023.

As an elig

ible leaver, Andy w

ill retain all exist

ing LTIP

awards subject to the achievement of performance

measures. He will receive the full value of his 2021-23

LTIP award given the performance period will complete

during his employment. His other awards will be

pro-rated for the period until he retires. All outstanding

awards will vest and release as scheduled and remain

subject to malus and clawback arrangements. Andy is

not elig

ible for any further LTIP awards and w

ill not

receive an award in March 2024.

Andy will be elig

ible to be cons

idered for a pro-rated

2024 annual incent

ive award for t

ime served as a

Senior Advisor, based on contribut

ion.

Diego

Diego’s remuneration arrangements have been set in

accordance with the directors’ remuneration policy.

Value (£)

Delivery method

Salary

1,650,000

67% cash

33% delivered in shares

– released in equal

amounts over ﬁve years

Pension

110,000

10% of the cash element

of salary

Diego also receives core beneﬁts in line with the

approach for all UK employees with addit

ional

role-specif

ic beneﬁts appropr

iate to his responsib

ies.

Diego was elig

ible for a 2023 annual

incent

ive wh

ich

has been pro-rated to reﬂect the period for which he

was employed during the year. He is also elig

ible to

receive an LTIP award that will be granted in 2024.

Diego did not receive a buyout award.

In line with the approved directors’ 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 any salary

increases across the Group. Taking these factors into account,

and in line with the approach of focusing increases on jun

ior

employees, ﬁxed pay for Bill and Diego will not be increased in

2024 with their salaries being GBP2,517,000 and GBP1,650,000

respectively.

2024-26 LTIP awards to be granted in March 2024

Having considered 2023 performance, the Committee has

approved the following LTIP awards for the period of 2024-26.

2024-26 LTIP

award (£)

% of salary

Bill Winters

3,322,440

132%

Diego De Giorg

2,178,000

132%

The LTIP awards are performance-linked and outcomes will

depend upon achiev

ing spec

ied targets by the end of the

three-year performance period.

Following the assessment of performance, resulting shares will

vest pro-rata from years three to seven, with an addit

ional

retention period of 12 months after vesting.

Performance will be assessed on:

30%

25%

15%

Relative TSR

RoTE

ESG

Non-ﬁnancial

Financ

ial

Other

strategic

See

pages 202 and 203

for further details

Working closely with the Culture and Sustainab

ity

Committee we have considered the categorisat

ion of

performance measures and reorganised the non-ﬁnanc

ial

strategic measures that relate to environmental, social and

governance (ESG) issues. These are now combined with the

exist

ing susta

inab

ity measures, with a weight

ing of 25 per

cent for this category. The overall scorecard continues to be

split 60 per cent ﬁnanc

ial and 40 per cent non-ﬁnancial.

Discuss

ions w

ith shareholders were held in December 2023

and January 2024 on the development of these performance

measures and targets and the input received was

incorporated into the ﬁnal decis

ions by the Comm

ittee.

Directors’ remuneration report

continued

185

Standard Chartered

– Annual Report 2023

Directors’ report



Removal of the

bonus cap



On 24 October 2023, the Prudential Regulation

Authority (PRA) and Financ

ial Conduct Author

ity

(FCA) conﬁrmed the removal of the bonus cap in

the UK, effective immed

iately.

We aim to pay our colleagues competit

ively for

performance aligned to the strategic aims of the

Group, through structures that are consistent

with and promote sound and effective risk

management. This should support the Group in

generating sustained and sustainable returns in

the interests of shareholders and other

stakeholders. The removal of the cap does not

change this.

We are consider

ing our pay structures and how

they might evolve now that the cap has been

removed. For our executive directors,

remuneration will continue to be set in line with

relevant regulations and guidance and our

approved directors’ remuneration policy which

includes maximums in respect of variable pay.

These maximums do not change as a result of

the cap being removed and the current structure

will continue until a new policy is proposed and

approved by shareholders, scheduled to be at

the 2025 Annual General Meeting (AGM).

In January 2024 the Financ

ial Report

ing Council (FRC)

published a revised UK Corporate Governance Code which

will apply from 1 January 2025. Following a consultation on

potential changes during 2023, many of the proposed

changes were not included in the revised Code. We will reﬂect

the updates that have been made in our 2025 report.

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 2023 and beyond, we have also

been mindful of the experience of our wider stakeholder

group.

I would like to thank my fellow Committee members for the

work they have put into the Committee, 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.)

How to use this report

With

in the d

irectors’ remuneration report we have

used colour coding to denote different elements

of remuneration, as follows:

Salary, pension, beneﬁts

(ﬁxed remuneration)

Annual incent

ive

LTIP

We have also used the following icons for ease of navigat

ion through th

is section and to show alignment between

remuneration and the strategic object

ives of the Group.

See

pages 20 to 26

for further details

People and culture

Ways of Working

Innovation

Resetting Globalisat

ion

Risk management

Employees

Lift

ing Part

ipat

ion

Investors

Clients

Sustainab

ity

Accelerating Zero

Remuneration at a glance

How does remuneration link to Group strategy?

As measured by

2023 Annual

incent

ive

2021-23

LTIP

Financ

ial KPIs

Further details can be found

pages 196 and 202

• Income

Financ

ial

results

• Costs

•

Return on tangible equity

•

Common Equity Tier 1 ratio

•

Relative total shareholder return

Strategic prior

ies

Further details can be found

page 25

• Network business

Achievement

against

objectives

•

Afﬂuent client business

•

Mass Retail business

• Sustainab

ity

Crit

ical enablers

Further details can be found

page 24

•

People and culture

•

Ways of Working

• Innovation

Directors’ report

Directors’ remuneration report

186

Standard Chartered

– Annual Report 2023

How did we determine variable remuneration outcomes in 2023?

2023 Group scorecard

2021-23 LTIP

Financ

ials

RoTE with

CET1 underpin

38%

30%

Clients

Relative TSR

15%

13%

Sustainab

ity

Sustainab

ity

Strategic

10%

13%

15%

14%

25%

Enablers

Risk and control

13%

50%

10%

15%

66%

2021-23 LTIP projected outcome

How do executive directors’ remuneration outcomes compare with the maximum opportunity?

30%

Bill Winters

Andy Halford

1,462

920

1,416

3,235

2,215

5,061

Actual

Max

Actual Max

2023 annual incentive (£000)

Bill Winters

Andy Halford

3,340

2,135

Actual

Max

Actual

Max

2021-23 LTIP projected outcome (£000)

15ppt

Committee discret

ionary reduct

ion to the formulaic

outcome. See page 183 for further details

Following the detailed performance assessment of measures

and proof points, the Committee considered the projected

performance outcome to be consistent with Group

performance and no adjustment has been made.

65%

2023 Group scorecard outcome

The values of the projected outcome and maximum opportunity are calculated using a three-month average share price to 31 December 2023

How did we pay our executive directors in 2023 (single total ﬁgure of remuneration)?

Directors’ report

187

Standard Chartered

– Annual Report 2023

68% of Bill’s maximum remuneration opportunity is delivered in shares creating strong alignment of interests between

executives and shareholders to generate long-term value.

How is executive director remuneration delivered over time?

Awarded for 2023

£000

Delivery method

Structure and tim

ing of payment

Salary

CEO: £2,496

CEO: 50% cash

Cash

CEO: 50% shares

Released in equal amounts between

2024 and 2028

Pension

CEO: £251

100% cash

Cash

Annual

incent

ive

CEO: £1,462

50% cash

Cash

50% shares

LTIP

CEO: £3,322

100% shares

Performance

measured over

3 years

Delivered in equal amounts between

2027 and 2031 (subject to 12 month

retention post release)

2023

2024

2025

2026

2027

2028

2029

2030

2031

Information is provided for the CEO only due to the change in GCFO at the end of the year

Annual incent

ive and LTIP shares are subject to clawback for up to 10 years from grant

2023

2022

Bill Winters

2,960

3,035

1,462

3,340

7,837

6,408

4,921

£000

3,988

1,499

1,949

2023

2022

Andy Halford

1,833

945

1,210

1,866

920

2,135

LTIP

Annual incent

ive

Variable

remuneration

Salary

Pension

Beneﬁts

Fixed

remuneration

188

Standard Chartered

– Annual Report 2023

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 for informat

ion.

The full policy, includ

ing recru

itment and leaver provis

ions, can be found on

pages 159 to 164

of the 2021 Annual Report and on our website at

sc.com

Our approach to remuneration is consistent for all employees and is designed to create alignment with our Fair Pay Charter,

which applies globally. However, our pay structures may vary according to location (to comply with local requirements) and,

therefore, the table below explains the alignment between the executive directors and our UK workforce, being the most

relevant market.

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 directors who jo

ined before 4 May 2022, an

annual pension allowance or contribut

ion of

10 per cent of salary is payable.

•

For directors who jo

ined after 4 May 2022, 10 per

cent of the cash element of salary only will be

payable.

•

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 the CEO,

which is a role-based provis

ion due to secur

ity

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 up 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 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 2023

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

Sharesave, 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.

•

The CEO and the GCFO 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, material risk takers are also required to

hold shares in-line with regulatory deferral and

retention requirements.

Appropriateness of executive directors’ remuneration

We mainta

in a cons

istent remuneration approach for all employees, in line with our Fair Pay Charter. Remuneration for

executive directors is reviewed annually against internal and external measures to ensure appropriate levels, aligned with the

approach for other employees.

Executive director policy at target opportunity compared with industry peers

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 opportunity against a peer group of internat

ional banks to ensure that

it remains

appropriately competit

ive. Th

is peer group reﬂects both our global footprint and where we compete for talent. Market data

used in benchmarking is based on the latest published report and accounts. In addit

ion, we cons

ider executive director

remuneration against FTSE30 companies, with data sourced from an external provider.

Executive director target opportunity

Bottom quartile

3rd quartile

2nd quartile

Top quartile

Bank peer group

FTSE 30

CEO

GCFO

CEO

GCFO

The current bank peer group comprises: ANZ, Bank of America, Bank of Nova Scotia, Barclays, BBVA, BNP Paribas, CIBC, Cit

igroup, DBS, Deutsche Bank, F

irstRand,

HSBC, ICICI, JPMorgan Chase & Co, Lloyds Banking Group, National Australia Bank, NatWest, OCBC, Santander, Société Générale, UBS, United Overseas Bank

GCFO total compensation is based on Diego De Giorg

i’s target opportun

ity

Executive director remuneration compared with wider workforce

The balance between ﬁxed and variable remuneration is geared to provide a greater proportion of ﬁxed remuneration for more

junior employees to g

ive more ﬁnanc

ial secur

ity. In comparison, for more senior employees, includ

ing the execut

ive directors, the

variable remuneration opportunity is larger reﬂecting their abil

ity to

inﬂuence the Group’s performance and in turn, their

remuneration outcome.

Salary

Annual incent

ive

LTIP

Senior executive

(incl executive directors)

3,057

37%

60%

79%

88%

89%

11%

12%

21%

40%

38%

25%

Senior professional

Intermediate professional

Junior professional

Admin/Support

See

pages 196 to 198

for how Bill’s remuneration links to Group performance, ind

idual performance, and risk, control and conduct-related matters

190

Standard Chartered

– Annual Report 2023

Directors’ report

Directors’ remuneration report

Remuneration alignment



Managing risk and control



The Group has a robust formal process for review

ing r

isk and control matters and reﬂecting these in remuneration outcomes at

both an ind

idual and Group level. All material risk events (MREs) are reviewed by a dedicated group of senior colleagues in

Control Functions to ensure lessons are learned and appropriate actions are taken for accountable ind

iduals. If necessary, a

deep dive will be commiss

ioned to understand r

isk, control and conduct issues in a particular location or business area. The

most severe MREs are escalated for oversight by the Remuneration Committee. At year end, a summary of risk and control

matters will be reviewed and discussed to determine any impact to Group incent

ives. The outcomes of the 2023 rev

iews are

one component in the adjustment to the 2023 scorecard outcome as detailed on pages 196 and 197. Details of our approach to

risk adjustment, includ

ing our malus and clawback prov

ions, are prov

ided on page 215.

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.

See

page 194

for further details on our Fair

Pay Charter

•

The wider workforce and our

executive directors partic

ipate

in continuous performance

management and feedback, to

ensure that performance is discussed

and assessed throughout the year.

•

Employee performance is assessed

based on what is achieved and how

it is achieved in line with our valued

behaviours. Our remuneration

structure and polic

ies ensure that

behaviours consistent with these

values are appropriately recognised

and rewarded.

•

Our LTIP further supports this with an

assessment to ensure appropriate

levels of conduct have been

demonstrated to meet our conduct

gateway requirement.

Our strategy

Remuneration decis

ions made

across the Group, includ

ing for

our executive directors, align

with our strategic prior

ies

and our Stands, includ

ing our

commitment to sustainable

social and economic

development:

•

Performance measures in our Group

and LTIP scorecards are designed to

drive achievement of the ﬁnanc

ial

and strategic goals that will deliver

long-term sustainable value for our

stakeholders.

•

Sustainab

ity and our Stands are

key considerat

ions for sett

ing and

measuring ﬁnanc

ial and strateg

targets.

•

If scorecard outcomes are not

consistent with progress against

our strategic commitments the

Committee has the discret

ion to make

adjustments.

See

page 186

for further details on how our

incent

ive plans are al

igned to our strategy

Our approach

to risk and control

The determinat

ion of our

remuneration policy and

outcomes align with the

Group’s risk and control

framework. In particular:

•

Our scorecards include risk and

control measures, and the Committee

has the discret

ion to adjust

incent

ive

outcomes for risk and control matters

that are not reﬂected in the

scorecards.

•

The Committee can apply a

discret

ionary r

isk adjustment in

respect of the Group scorecard

outcome and has a track record of

applying discret

ion appropr

iately.

•

Long-term sustainable performance is

supported through the abil

ity to make

adjustments to variable remuneration

for risk, control and conduct

behaviours, the deferral of variable

remuneration, and the abil

ity to apply

malus and clawback where

appropriate.

See

page 215

for further details

•

Incentives for employees engaged in

Audit, Risk and Compliance functions

are set independent of the businesses

they oversee.

Alignment with...

190

Standard Chartered

– Annual Report 2023

Directors’ report

Directors’ remuneration report

191

Standard Chartered

– Annual Report 2023

Directors’ report

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 metr

ics aligned

with our strategy. The Committee sets robust and stretching

targets to ensure there is a clear link between Group

performance and executive director awards.

•

Executive directors’ interests are further aligned with

shareholders’ long-term interests through the deferred

release of 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.

•

Shareholding requirements are in place for executive

directors, requir

ing them to bu

ild and mainta

in a s

ign

iﬁcant

shareholding in Company shares while in employment and

for a period of two years post-employment. Bill and Andy

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 205 where

we also demonstrate the impact of a 50 per cent share

price appreciat

ion over the three-year performance per

iod

of the LTIP.

•

In addit

ion to max

imum award levels specif

ied

in our

remuneration policy, the value of incent

ive awards w

ill vary

depending on achievement against specif

ied performance

targets and the share price at the time of delivery for the

sign

iﬁcant part of reward wh

ich is delivered in shares.

Simpl

ity and clarity

•

Simpl

ity is a key driver for the structure of our executive

pay, subject to adherence to regulatory requirements

aris

ing from operat

ing as a UK regulated bank.

•

Our remuneration structure comprises straightforward and

well-understood components. The purpose, structure,

alignment with strategy and consistency with arrangements

for the wider workforce are clearly set out in the

remuneration policy.

See

pages 188 and 189

for further details

•

We set and report our performance-related measures, targets

and outcomes in a clear, transparent and balanced way.

Directors’ report

191

Standard Chartered

– Annual Report 2023

How is our executive director remuneration aligned to stakeholder experience?

•

Remuneration outcomes reﬂect key ﬁnanc

ial and

non-ﬁnancial performance del

ivered in the year.

•

Variable remuneration awards are based on stretching

targets.

•

A sign

iﬁcant port

ion of executive remuneration is paid in

shares and shareholding requirements apply.

•

Post-employment shareholding requirements

further reinforce the importance of

sustainable long-term performance.

•

The Remuneration Committee

Chair regularly engages with

shareholders on remuneration

matters to seek feedback which

helps guide decis

ion-mak

ing.

•

The same remuneration princ

iples apply

to executives and employees, includ

ing

consistent beneﬁt and pension provis

ion

by location.

See

pages 188 and 189

for further details

•

Annual incent

ives for execut

ive directors

are based on the same scorecard used

to determine discret

ionary

incent

ives

across the Group.

•

In line with our approach to 2024 salary

increases, focusing on jun

ior employees

and those in high inﬂat

ion markets,

ﬁxed pay for Bill and Diego will

remain unchanged.

• Remuneration outcomes

take into account risk,

control and conduct

considerat

ions.

•

Pay structures are aligned

to relevant best practice,

includ

ing the appl

icat

ion

of deferrals and malus/

clawback.

•

Remuneration outcomes reﬂect performance delivered includ

ing cl

ient-related

performance objectives (e.g.

improved client satisfact

ion).

• Remuneration outcomes

from both annual incent

ive

and LTIP awards consider

performance against

sustainab

ity object

ives.

•

The Committee tracks

gender and ethnic

ity pay

gaps, and actively monitors

the actions being taken to

close them.

Clients

Employees

Society and

sustainab

ity

Investors

Executive

director

remuneration

Regulators and

governments

192

Standard Chartered

– Annual Report 2023

Directors’ report

Directors’ remuneration report

Committee at a glance



Committee focus

for 2023



During the year, the Committee determined the retirement

arrangements and remuneration arrangements for the outgoing

and incom

ing GCFO respect

ively, working to ensure appropriate

arrangements were put in place to facil

itate a smooth and

effective transit

ion to the new GCFO.

Read more on

page 184

What are the main responsib

ies of the

Committee?

The Committee is responsible for setting the princ

iples,

parameters and governance framework for the Group’s

remuneration policy and overseeing its implementat

ion.

This includes:

•

Determin

ing the framework and pol

ies for the

remuneration of the Group Chairman, the executive

directors and other senior management consider

ing our

Fair Pay Charter, wider workforce remuneration and

alignment with culture and conduct.

•

Overseeing the alignment of reward, culture, the strategic

prior

ies and our Stands.

•

Approving Group discret

ionary remunerat

ion, includ

ing

adjustment for risk, control and conduct for current and

future risks.

•

Overseeing the Fair Pay Charter.

The Committee has written terms of reference that

can be viewed at

sc.com/termsofreference

How did the Committee spend their time

during their 2023 meetings?

Senior management remuneration

Executive remuneration and policy

Group-wide reward, the Fair Pay

Charter and pay divers

ity

Business performance and

risk assessment review

Shareholder engagement,

regulatory and governance

Other, inc. Group Share Plans

Shir

ish

Apte

(Chair)

2/2

5/5

David

Conner

Robin

Lawther,

CBE

Maria

Ramos

Jasmine

Whitbread

Linda

Yueh, CBE

Who else attended Committee meetings in 2023?

The Group Chairman; Group Chief Executive; Group Chief

Financ

ial Ofﬁcer; Group Ch

ief Risk Ofﬁcer; Group Head, HR;

Global Head, Performance, Reward and Beneﬁts; Group Head,

Conduct, Financ

ial Cr

ime and Compliance; Group Company

Secretary; Chair of the Audit Committee; Group Head, Internal

Audit.

See

pages 137 to 141

for biograph

ical deta

ils of the

Committee members

Jasmine stepped down from the Committee on 3 May 2023

Linda jo

ined the Comm

ittee on 1 January 2023

Committee composit

ion

15%

20%

25%

10%

193

Standard Chartered

– Annual Report 2023

Directors’ report



2024 action plan



The 2024 action plan for the Committee reﬂects the recommendations from the effectiveness review and

continues to build on the progress made last year:

•

Establish the Group’s posit

ion on the removal of the bonus cap.

•

Develop the new 2025 directors’ remuneration policy.

•

Follow up on Committee suggested train

ing to be prov

ided in 2024.

How did our shareholders vote?

The Committee Chair continues to

engage with shareholders to seek views

and feedback on key decis

ions the

Committee takes each year. In 2024,

shareholders will be consulted with on

the development of the new directors’

remuneration policy scheduled to be put

to shareholders for approval at the 2025

AGM.

What advice does the Committee receive?

PwC was re-appointed as the Committee’s remuneration

adviser in 2021. The Committee conducts a detailed review

of potential advisers every three or four years.

PwC is a signatory to the voluntary remuneration consulting

Code of Conduct. It provides other services to the Group

includ

ing assurance, adv

isory, consultancy and tax advice.

The Committee is satisf

ied the adv

ice received was

objective and

independent and that no potential or actual

conﬂict arose. The total fees paid to PwC (partly a ﬁxed fee

and partly on a time and materials basis) was GBP148,175,

which included advice to the Committee relating to

executive directors’ remuneration and regulatory matters.

The Group CFO and Chief Risk Ofﬁcer regularly update the

Committee on ﬁnance and risk matters. The Committee

manages conﬂicts of interest when receiv

ing v

iews from

senior ind

iduals on remuneration proposals and no

ind

idual is involved in decid

ing the

ir own pay.

How effective was the Committee in 2023?

The feedback from the internally conducted 2023

Committee effectiveness review was posit

ive. The key

points raised and the action plan for 2024 are summarised

below.

•

The Committee performed well against an extensive

agenda. The Chair works effectively, prior

ing key

issues

and allowing for the appropriate level of challenge and

engagement.

•

The Committee has a good composit

ion of techn

ical skills

includ

ing understand

ing the work of other committees,

with other Board members being drawn upon where

needed.

•

Posit

ive commentary was g

iven on the support received

from internal special

ists (e.g. human resources, ﬁnance,

risk) and PwC.

87%

of colleagues responded to the

Group’s engagement survey, My Voice,

which seeks to understand colleague

sentiment in respect of performance

management, the process of giv

ing

and receiv

ing feedback and reward.

The Committee recognises the importance of seeking feedback from colleagues

on remuneration matters to inform decis

ion-mak

ing. The Culture and

Sustainab

ity Committee (CSC) is responsible for the Group’s workforce

engagement programme and provides colleague feedback to the Remuneration

Committee to inform remuneration decis

ion-mak

ing.

The Board engages with and listens to the views of employees. In 2023, 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.

See our Culture and Sustainab

ity Committee report on

pages 174 to 176

and our Stakeholder

section on

pages 54 to 64

for further informat

ion on our workforce engagement framework

How does the Committee understand the views of our workforce?

For

Against

Withheld

Advisory vote on the 2022

remuneration report

at 2023

AGM

521,070,732

94.7%

29,151,006

5.3%

14,890,207

Bind

ing vote to approve the

2022 directors’ remuneration

policy at 2022 AGM

404,531,068

68.8%

183,344,607

31.2%

24,340,637

1 If withheld votes are considered as part of the overall voting outcome distr

ibut

ion, 92.2 per cent of

votes would have been ‘For’ the resolution

Group-wide remuneration

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 supports our

focus on being a great place to work and

the achievement of our strategic goals.

Together with broader human resources in

iat

ives

supporting 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 cont

inuous improvement,

every one of our colleagues can fulﬁl their potential.

Full details of the Charter can be found in our Divers

ity, Equal

ity and

Inclusion Impact Report here:

sc.com/divers

ityfa

irpayreport

Revis

ing our Fa

ir Pay Charter

Since the introduct

ion of the Charter

in 2017, our Group

prior

ies and the external environment have shifted.

We have made sign

iﬁcant progress

in areas such as

liv

ing wage and have la

id a foundation for a more

consistent and transparent approach to remuneration,

supporting equal pay and greater ﬂexib

ity.

Build

ing on th

is progress, our focus has now shifted

to better align

ing our propos

ion to our values and

evolving employee needs, while supporting the culture

of excellence needed to drive long-term success

and mainta

ing the progress made to date.

The revised Charter serves to reiterate our commitment to

fair and equitable reward and hold ourselves accountable.

It reﬂects our latest prior

ies, focusing on four prior

ity

areas, each crit

ical to dr

ing the Bank forward:

•

Equal pay

– we commit to offering equal pay for equal work

by market and do not tolerate unlawful discr

inat

ion.

•

Purpose-led

– we provide a holist

ic set of reward and

beneﬁts that align with our valued behaviours and Stands.

•

Competit

ive opportun

ies

– we aim to pay colleagues

competit

ively.

•

Performance driven

– we are committed to motivat

ing,

recognis

ing and reward

ing sustainable high performance.

Other key 2023 highl

ights

myPerformance

We have continued to embed our new approach to

performance management which is designed to motivate

outperformance and deliver a culture of excellence. With this

new 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. Data gathered through

sentiment surveys and metrics on goal setting, as well as

feedback and year-end review decis

ions have shown pos

ive

signs on achiev

ing our a

im to embed the behaviours of a high

performance culture across the Bank. For example, more than

70 per cent of employees feel that myPerformance has had a

posit

ive

impact on their abil

ity to perform at the

ir best.

We will continue to work on areas such as further encouraging

upward feedback, upskill

ing people leaders and ensur

ing the

new approach is well understood Bank wide.

Group-wide variable remuneration

To support our objective of embedd

ing a high performance

culture in the organisat

ion, dur

ing 2023 the Committee

reviewed the effectiveness of our exist

ing Target Total

Variable Compensation plan which c. 75 per cent of our

colleagues partic

ipate

in.

For the 2023 performance year, to strengthen the link between

performance and pay, we allocated a greater proportion

of our incent

ive pool for

ind

idual different

iat

ion. Further

changes will be communicated and implemented for the 2024

performance year.

Directors’ report

Directors’ remuneration report

194

Standard Chartered

– Annual Report 2023



New recognit

ion platform



As part of our drive to reinforce a high performance culture, in 2024 we have launched a new recognit

ion platform,

Appreciate, enabling colleagues to recognise one another’s outstanding achievements, further promoting the

habit of recognis

ing and celebrat

ing excellence.

ppreciate

195

Standard Chartered

– Annual Report 2023

Directors’ report

This section, which is subject to an advisory vote at the 2024 AGM, outlines the 2023 executive director remuneration delivered

under the 2022 shareholder-approved remuneration policy and the 2023 fees for the Group Chairman and INEDs.

The following table sets out the 2023 single total ﬁgure of remuneration for the CEO and GCFO showing a year-on-year increase

of 22 and 23 per cent respectively, largely due to the projected performance outcome of the 2021-23 LTIP awards . Diego De

Giorg

i was appo

inted to the role of GCFO on 3 January 2024 and details of his remuneration are included in the 2024 policy

implementat

ion for d

irectors section on page 205.

Directors’ remuneration in 2023 (audited)

Single total ﬁgure of remuneration

£000

Bill Winters

Andy Halford

£000

2023

2022

2023

2022

Salary

2,496

2,418

1,596

1,546

Pension

251

245

160

154

Beneﬁts

288

297

110

133

Total ﬁxed remuneration

3,035

2,960

1,866

1,833

Annual incent

ive award

1,462

1,499

920

945

LTIP outcome

Value based on performance

2,435

1,540

1,557

956

Value based on share price growth

905

409

578

254

Total variable remuneration

4,802

3,448

3,055

2,155

Single total ﬁgure of remuneration

7,837

6,408

4,921

3,988

Notes to the single total ﬁgure of remuneration table

Beneﬁts

•

Bill receives a contribut

ion towards h

is annual tax preparation due to the complexity of his tax affairs, partly

due to Group business travel requirements.

•

Bill has the use of a vehicle and driver. This is a role-based provis

ion g

iven the executive role and the

associated security and privacy requirements.

•

Figures relate to UK tax years 2022/23 and 2021/22.

Annual incent

ive

award

•

Received in respect of 2023.

Outcome of

LTIP award

•

Projected outcome values of the 2021-23 LTIP awards vesting, awarded in 2021.

•

The values of the 2020–22 LTIP vesting awards for 2022 have increased compared with the projected values

disclosed in last year’s report and have been restated. At that time, the projected performance outcome was

22 per cent. When the relative TSR performance was assessed in March 2023, the actual outcome was 36.8

per cent with a share price of £6.577, resulting in the increased outcome value.

No payments, includ

ing no pens

ion contribut

ions, were made to, or

in respect of, past directors in the year in excess of the

min

imum threshold of GBP50,000, set for th

is purpose.

See

pages 188 and 189

for a summary of the directors’ remuneration policy

Variable

remuneration

Fixed

remuneration

2,960

3,035

1,462

3,340

7,837

6,408

1,499

1,949

4,921

3,988

1,833

945

1,210

1,866

920

2,135

196

Standard Chartered

– Annual Report 2023

Directors’ report

Directors’ remuneration report

Annual incent

ive awards for execut

ive directors are based on the assessment of the Group scorecard and personal

performance, in line with the remuneration policy. 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 and ind

idual performance, as well as risk, control, and conduct-related

matters with input from Risk and other control functions. The Committee considered that both directors exhib

ited appropr

iate

levels of conduct and had met the gateway requirement to be elig

ible for an

incent

ive.

The annual incent

ive scorecard outcomes for B

ill and Andy are summarised below:

Executive director scorecard outcomes

Measure

Weight

ing

Bill Winters

outcome

Andy Halford

outcome

Financ

ial

50%

38%

Strategic

40%

34%

Personal performance

10%

Total

100%

81%

80%

Committee adjustment (see page 183 for further detail)

(15%)

Final scorecard for determin

ing annual

incent

ives

66%

65%

Maximum annual incent

ive opportun

ity (£000)

2,215

1,416

Annual incent

ive outcome (£000)

1,462

920

The Committee has the abil

ity to make an adjustment to reﬂect progress aga

inst our Stands. In 2023, good progress has been

made against all Stands and no adjustment is required.

Set out below are the assessments of performance in 2023 for the Group and for Bill and Andy.

Assessment of the 2023 scorecard – ﬁnancial measures

Measure

Weight

ing

Threshold

(0%)

Target

Maximum

(100%)

Achievement

Outcome

Income

10%

16,142m

16,814m

17,487m

17,378m

Costs

10%

11,246m

10,813m

10,380m

11,025m

RoTE

with a CET1

underpin of the higher of

13% or the min

imum regulatory requ

irement

30%

8.5%

9.3%

10.2%

10.1%

26%

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 370

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

The CET1 underpin was set at the higher of 13 per cent or the min

imum regulatory level 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

Annual incent

ive awards for the execut

ive directors (audited)

197

Standard Chartered

– Annual Report 2023

Directors’ report

Assessment of the 2023 scorecard – strategic measures

Clients (Network, Afﬂuent, Mass)

Target

Assessment

•

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 (CCIB).

•

Grow value of Dig

ital Ventures.

•

Mass market Retail growth through new to bank

personal customers.

•

Client satisfact

ion outperformed w

ith strong loyalty and

satisfact

ion rat

ings.

•

Substantially improved growth delivered across target

markets, sign

iﬁcantly exceed

ing our maximum target.

•

Increased network income in CCIB to $6.9 bill

ion ($5.2

bill

ion

in 2022).

•

Strong performance in Ventures with new customers

approaching 1.8 mill

ion.

•

Strong performance of Mass Retail with 2.3 mill

ion

active clients, exceeding our maximum target.

Weight

ing

–

12%

Outcome

– 10%

Sustainab

ity

Target

Assessment

•

Progress against the Group’s Sustainable Finance

income targets and its aim to achieve net zero by 2050.

•

Improve community engagement through employee

volunteering partic

ipat

ion.

•

Income targets from Sustainable Finance products

exceeded at $720 mill

ion.

•

Community engagement exceeded our aspirat

ional

target with an employee partic

ipat

ion rate of 61%.

Weight

ing

–

Outcome

–

Enablers (Ways of Working and people)

Target

Assessment

•

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.

•

Dig

ital adopt

ion through mobile channel take up above

targets as a result of focused efforts to drive customers

to mobile channel in major markets.

•

Speed to deliver improved by 6% and targets achieved.

•

Organisat

ional effect

iveness targets achieved.

•

Improved employee inclus

ion and engagement

outcomes based on the results of specif

ic quest

ions in

our employee survey, and an increase in number of

females in senior roles, achiev

ing basel

ine levels.

Weight

ing

–

Outcome

–

Risk and controls

Target

Assessment

•

Non-ﬁnancial r

isk reduction.

•

Self-ident

iﬁcation of aud

it issues.

•

Strong performance of non-ﬁnancial r

isk reduction

across the Bank.

•

Improved self-ident

iﬁcation of aud

it issues with targets

exceeded in key areas and nearly 60% of all issues now

being self-ident

iﬁed.

Weight

ing

–

12%

Outcome

–

11%

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 with

all areas on track. No adjustment was made to the scorecard outcome.

No adjustment

Assessment of the 2023 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 tables on the next pages.

198

Standard Chartered

– Annual Report 2023

Directors’ report

Directors’ remuneration report

Bill Winters

2023 has been a strong year for Bill in which he continued to lead the Group with passion and focus. Our posit

ive ﬁnancial

and strategic results have been sign

iﬁcantly

inﬂuenced by his leadership and focus on delivery. In particular, Bill has had an

extensive inﬂuence on our sustainab

ity achievements, where we have exceeded many of our targets and continued to

enhance, update and implement our sustainab

ity strategy (see more details on pages 66 to 79). Our achievement of RoTE of

10.1 per cent has followed a cultural embedding of the need to deliver sustainable improvement of the metric into the Group’s

psyche, making it an understandable and focused target for all.

Innovation

Goal

Assessment

• Continue personal

push for innovat

ion

and simpl

iﬁcation

across the Group

•

The Bank is now recognised as a very strong innovator, driv

ing

improvements in its exist

ing bus

inesses and

developing its Venture portfolio.

•

Bill has increased his personal vis

ity dur

ing the year, actively promoting themes of innovat

ion

includ

ing

dig

ital

isat

ion, d

ital assets and AI.

•

He was a keynote / panel speaker at the Hong Kong, Singapore and Dubai FinTech Festivals and Point Zero,

and is a key contributor to many climate organisat

ions

includ

ing the Net Zero Bank

ing Alliance and Glasgow

Financ

ial All

iance for Net Zero (GFANZ).

•

As a core member of the World Bank’s Private Sector Investment Lab, Bill is provid

ing h

is expertise to help the

Lab ident

ify new approaches and recommendat

ions that support the World Bank’s capital mobil

isat

ion in

support of emerging markets.

•

Bill has continued his push for further efﬁc

iency and s

impl

iﬁcation, establ

ish

ing our Operat

ing Excellence

programme to improve our abil

ity to get th

ings done.

This has resulted in substantial reductions in

turnaround time in key onboarding processes with improved customer satisfact

ion and mater

ial cost saves.

•

Bill has personally embraced the transformation of our Technology, Transformation and Operations business

which is generating substantial reduction in operating risk and cost savings.

•

Through Tech Simpl

iﬁcation, $66.5 m

ill

ion has been secured

in 2023 in sustainable saves, with further saves

forecast for future years.

•

Bill is a leading advocate for our Ventures business, for which 300 new venture ideas have been reviewed,

10 ventures are currently in incubat

ion, 5 are

in acceleration, 5 have been commercially launched during 2023

and two have been proﬁtably exited.

Financ

ial performance

•

Grow other sources

of income in our

footprint

•

Bill continues to actively drive for further growth to support sustainable and sustained performance, through

both innovat

ion and expans

ion in tradit

ional bus

iness areas, and has personally engaged in our growth

objectives across key markets.

•

In CCIB, our risk-weighted assets optim

isat

ion target between 2022-2024 has been achieved ahead of

target, creating capacity for growth opportunit

ies.

•

Strong progress has been made in establish

ing the Group as a partner of cho

ice bridg

ing bank

ing and

technology/non-banking sectors, with over 20 fully active partnerships in place leading to asset and

proﬁtable income growth.

•

Bill partic

ipated

in the B20 and co-Chaired the UK-India Financ

ial Partnersh

ip, and took part in a number of

client engagement events during the year.

•

43 Sustainable Finance products are now on offer (32 in 2022) and we have seen momentum in the transit

ion

ﬁnance team with a number of key ﬁrsts and incremental deals.

•

He has supported the expansion of Ventures into new markets and the launch of our Dig

ital Assets Jo

int

Venture with SBI Holdings in the UAE following that in Japan.

Risk and controls

•

Further improve the

Group’s risk and

control framework,

accelerating

progress and

embedding a

robust preventative

risk culture

•

Bill remains focused on improv

ing the Group’s r

isk culture and frameworks through personal partic

ipat

ion in

relevant forums and a strong tone from the top.

•

He has overseen good progress on improv

ing our r

isk culture, with recognit

ion from our regulators that

dedicated work is promoting a healthier risk culture.

•

Bill played a crucial role in the successful delivery of an improved Cyber Risk and control framework.

•

We have extended our capabil

ies in New Economy risk orig

inat

ion and management, keeping pace with

business growth.

•

We have managed through various episodes of sovereign risk stresses in our markets with good results.

People and culture

• Continue drive

for a high

performance

culture, includ

ing

the development

of internal talent

and effective

succession

planning

•

Bill has inst

illed a h

igh performance culture underpinned by teamwork and innovat

ion. He has been vocal

supporting the changes we have made to embed a culture of high-quality feedback, includ

ing role-

modelling with his own team.

•

Through our employee survey, we have seen our employee net promoter score (eNPS) (a way of measuring

whether employees would recommend working for the Bank) record its biggest ever increase against a prior

year outcome that was our highest ever result.

•

In addit

ion, all d

imens

ions of our employee value propos

ion recorded a year-on-year

increase in the survey,

most to a 5-year ‘high-water mark’.

•

He has continued the development of Management Team members, with strong hires into the team and

overseeing the effective and smooth succession of GCFO from Andy to Diego.

•

The Management Team is now more than 50% female.

•

Bill has continued to focus on internal talent, with the development of internal successors for key roles.

Weight

ing

–

10%

Outcome

–

199

Standard Chartered

– Annual Report 2023

Directors’ report

Andy Halford

Having served over nine years as our Group Chief Financ

ial Ofﬁcer, Andy stepped down from the Board on 2 January 2024.

Throughout his tenure and during 2023, Andy provided strong ﬁnanc

ial leadersh

ip to the Bank and served as an effective

partner to Bill, the Management Team and the Board. Andy leaves the Board on track to deliver our external ﬁnanc

ial targets

and the Group strategy. In particular, strong progress has been made in the year across our regulatory projects includ

ing

substantial improvements in resolution planning. Andy actively supported the on-boarding and induct

ion of the

incom

ing

GCFO and ensured a smooth transit

ion per

iod.

Ways of Working

Goal

Assessment

• Drive collaboration

with

in the F

inance

function across

segments and

markets

• Continue to

improve ﬁnanc

ial

reporting

procedures

•

Andy has played a sign

iﬁcant role

in driv

ing collaborat

ion across the Finance function

working closely with business stakeholders to deliver the Group’s corporate plan with

posit

ive endorsement rece

ived from the Board.

•

He played a key role in driv

ing the art

iculat

ion of the strateg

ic prior

ies for the Group

which have been translated into a set of actionable strategic plans through

collaborating with colleagues across segments and markets.

•

Andy has continued to drive improvements in the Finance control environment through

investments in the Group’s regulatory reporting infrastructure.

•

He has been instrumental in driv

ing the upgrade of the ﬁnancial systems used across

the Group through a multi-year programme which is targeting to substantially

complete at the end of 2024.

•

He has continued to mainta

in open and transparent relat

ionsh

ips w

ith regulators and

kept them abreast of our progress on regulatory topics includ

ing Group resolvab

ity

and regulatory reporting remediat

ion.

•

Andy partnered with the Chief Sustainab

ity Ofﬁce to redesign the content to be

included in the annual report and uplifted the controls with regards to Sustainab

ity

includ

ing key KPIs.

Financ

ial performance

•

Deliver the focus on

achiev

ing target

RoTE and other

strategic object

ives

•

Andy has continued to actively manage the Group’s cost base to ensure posit

ive jaws.

•

He has played a sign

iﬁcant role

in rais

ing awareness of RoTE as a central ﬁnancial

metric across the Bank.

•

He was key to driv

ing max

imum value from the Group’s exit from a number of markets

in the Africa and Middle East region and the sale of our Aviat

ion F

inance business.

•

Andy played an active role in driv

ing our efforts to d

ivers

ify the footpr

int of our

shareholders to focus on Asia, through targeted investor events in Asia.

•

He has been an active Board member contribut

ing on key

iat

ives outs

ide his core

areas of ﬁnance expertise, includ

ing process s

impl

iﬁcation and enhanc

ing governance

and oversight of Group investments.

•

Andy has led a multi-year upgrade and rational

isat

ion of the Bank’s property portfolio,

enhancing client and employees’ experience and deliver

ing on the Bank’s net zero

commitments.

Weight

ing

–

10%

Outcome

–

200

Standard Chartered

– Annual Report 2023

Directors’ report

Directors’ remuneration report

The LTIP values included in the single total ﬁgure of remuneration for 2023 are based on the awards that will be subject to ﬁnal

performance testing in March 2024. These awards were granted in 2021 with a face value of 120 per cent of ﬁxed pay, to

incent

ise the achievement of the Group’s prior

ies over the three-year period 2021 to 2023. The awards are share-based and

are subject to the performance targets set out below which were set when the awards were granted and have not been

adjusted since. A conduct gateway requirement must be met before any awards vest.

The Committee concluded that Bill and Andy exhib

ited appropr

iate conduct during the performance period and, therefore, the

conduct gateway was met.

Award share price (£)

Valuation share price (£)

2021-23 LTIP projected outcome (£)

Bill Winters

4.90

6.72

3,340,237

Andy Halford

4.90

6.72

2,135,206

See

page 195

for the value attributable to share price growth in the single total ﬁgure of remuneration

RoTE performance of 10.1 per cent was achieved, resulting in a 30 per cent outcome and relative TSR is projected to be ranked

between median and upper quartile resulting in a projected outcome of 9 per cent. The Committee considered performance

against the sustainab

ity and strategic proof points set out in the table below and determined that an outcome of 27 per cent

was appropriate. Based on these assessments, the total projected performance outcome is 66 per cent. The ﬁnal relative TSR

performance will be assessed in March 2024 and any change to the overall outcome will be reported in the 2024 directors’

remuneration report.

The awards will vest pro rata over 2024 to 2028 and the shares will be subject to a 12-month retention period post-vesting. Malus

and clawback provis

ions apply.

Projected outcome

Measure

Weight

ing

Min

imum

performance

(25% outcome)

Maximum

performance

(100% outcome)

Assessment of

achievement

Outcome

status

Projected

outcome

RoTE

in 2023 plus CET1

underpin of the higher

of 13% or the min

imum

regulatory requirement

30%

10%

RoTE 10.1% and CET1

14.1%

Conﬁrmed

30%

Relative TSR

performance against the

peer group

30%

Median

Upper quartile

Currently estimated

between median and

upper quartile

Projected

Sustainab

ity

15%

Targets set for sustainab

ity

measures linked to the business

strategy

Improved

performance against

our strategic prior

ies

Conﬁrmed

13%

Strategic measures

25%

Targets set for strategic measures

linked to the business strategy

Improved

performance against

our strategic prior

ies

Conﬁrmed

14%

Total 2021-23 LTIP awards projected outcomes

66%

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

The CET1 underpin was set at the higher of 13 per cent or the min

imum regulatory level 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

TSR performance will be assessed three years from the date of award, in March 2024, making the projected outcome subject to change

Assessment of non-ﬁnancial measures

Sustainable ﬁnance

Proof point

Assessment

•

Develop and implement a framework to align our

ﬁnancial serv

ices with net zero emiss

ions by 2050,

and deliver 2023 targets consistent with that plan.

•

Delivered all milestones against publicly stated net zero

roadmap includ

ing sett

ing an Oil & Gas absolute emiss

ions

target.

•

Provide $35 bill

ion (cumulat

ive) worth of project

ﬁnancing serv

ices, M&A advisory, debt structuring,

transaction banking and lending services for

renewable energy that align to our verif

ied Green and

Sustainable Product Framework.

•

Provided ﬁnanc

ing

in excess of $40 bill

ion.

•

Targets achieved and are on track to meet the longer-term

10-year commitment of $300 bill

ion.

•

Only provide ﬁnanc

ial serv

ices to clients who are less

than 80% dependent on earnings from thermal coal

(based on % EBITDA at group level).

•

Exited 54 entit

ies that der

ived >80% of income from

thermal coal and those that remain have exit plans

agreed/in progress based on contractual obligat

ions.

LTIP awards

201

Standard Chartered

– Annual Report 2023

Directors’ report

Responsible company

Proof point

Assessment

•

Reduction in property emiss

ions of 10% annually.

• Achieved.

•

Reduction of ﬂight emiss

ions of 25%.

•

Achieved with a 36% reduction in ﬂight emiss

ions aga

inst

our 2019 baseline.

•

Offset 95% of all residual emiss

ions from our

operations.

•

Successfully completed our carbon credit purchases

against our residual operating emiss

ions s

ince 2021.

Clients

Proof point

Assessment

•

Improve client satisfact

ion rat

ing evidenced in surveys

and internal benchmarks.

•

Sign

iﬁcantly

improved performance in all three years, with

consumer client satisfact

ion metr

ic of 56.6%, increased

from 29.5% in 2020.

•

Deliver growth in qualif

ied cl

ients across Private,

Prior

ity & Prem

ium Banking, and Wealth

Management.

•

Improved growth in qualif

ied cl

ients across our Afﬂuent

business, with strong performance achieved in 2023.

•

Deliver network income growth in CCIB.

•

Exceeded targets in 2023 ($6.9 bill

ion) follow

ing strong

performance in 2022 and improv

ing on performance

in 2021

(from $4.4 bill

ion

in 2020).

•

Add more than 2 mill

ion new customers v

ia dig

ital

partnerships, platforms and technologies.

•

Added 1.8 mill

ion new customers by the end of 2023

following weaker performance in 2022 and 2021.

Enablers

Proof point

Assessment

•

Drive culture of innovat

ion to generate new revenues.

•

36% of Group revenue coming from innovat

ion, d

ital and

transformation revenue streams

•

Adopt new ways of working that result in quicker

decis

ion-mak

ing and delivery.

•

Speed of decis

ion-mak

ing and delivery have improved in

each of the three years includ

ing ‘speed to value’, wh

ich

measures time from ideat

ion unt

il customer go-live.

•

Increase senior female representation to 33%.

•

Increase in the number of females in senior roles by 3 ppt

over the three years to 32.5%.

•

Increase our culture of inclus

ion score from 81% to 84%

(internal index).

•

Increased by 1.5 ppt over the three years to 83.2%.

Risk and controls

Proof point

Assessment

•

Mainta

in effect

ive risk and control governance.

•

Improved performance of risk reduction across the Bank

and good progress in embedding a healthier risk culture.

•

Successfully deliver milestones with

in the Cyber R

isk

management plan.

•

Continued reduction of Cyber Risk includ

ing the del

ivery of

informat

ion and Cyber secur

ity strategic plan with all

objectives ach

ieved.



Windfall gains



When making LTIP awards the Committee reviews the proposed size of the award and considers the change in share price in

the period leading up to the award compared with the share price when awards were made in the previous year. A sign

iﬁcant

fall in share price will increase the overall number of shares being awarded, and the Committee considers this, being mindful

of the potential for a ‘windfall gain’.

For awards made in 2021 the Committee reviewed the change in share price compared with the previous year and, being

comfortable that the change was not sign

iﬁcant, at -5.7 per cent, determ

ined not to adjust the size of the awards.

The Committee further reviews any increase in share price at the end of the performance period, when awards are due to

vest, and considers potential outcomes to determine if any adjustment should be made where an increase in share price is

not reﬂective of a corresponding improvement in underlying ﬁnanc

ial performance. To date no adjustments have been made.

202

Standard Chartered

– Annual Report 2023

Directors’ report

Directors’ remuneration report

LTIP awards for the executive directors to be granted in 2024

Based on Group and ind

idual performance during 2023 awards for the performance year will be granted in March 2024 at the

maximum amount under the 2022 directors’ remuneration policy. Performance measures are aligned to our strategic prior

ies.

In line with his retirement arrangements, Andy Halford is not elig

ible for th

is LTIP award.

Award as % of salary

Award value on grant (£)

Award value on vesting (£)

Bill Winters

132%

3,322,440

To be determined based on the level of performance

achieved at the end of the three-year period against the

performance measures and the future share price.

Diego De Giorg

132%

2,178,000

The RoTE target range for the awards is increased to 10 to 13 per cent, versus 10 to 12.5 per cent for the 2023-25 awards, reﬂecting

the progress in RoTE achieved in 2023 and our increased ambit

ion of 12.5 per cent by 2026.

Peer group for the relative TSR measure in the 2024-26 LTIP

The peer group of companies selected for the relative TSR performance calculation are those with generally comparable

business activ

ies, size or geographic spread to Standard Chartered or with which we compete for investor funds and

talent.

The group is reviewed annually, prior to new LTIP awards being made and following the 2023 review the group for

the 2024-26 LTIP awards has been updated. Bank of China, ICBC and State Bank of India are no longer considered to be

comparable peers as they are state-owned banks which have sign

iﬁcantly d

ifferent purpose, strategies and performance

proﬁles. In addit

ion, Cred

it Suisse has been removed as it ceased public trading during 2023.

TSR is measured in sterling for each company and the data is averaged over a month at the start and end of the three-year

measurement period which starts from the date of grant.

Banco Santander

DBS Group

Oversea Chinese Banking Corporation

Bank of America

Deutsche Bank

Société Générale

Bank of East Asia

HSBC

Standard Bank

Barclays

ICICI

UBS

BNP Paribas

JPMorgan Chase

United Overseas Bank

Cit

igroup

KB Financ

ial Group

Financ

ial measures for 2024-26 LTIP awards

Measure

Weight

ing

Min

imum

performance (25%)

Between min

imum

and maximum performance

Maximum performance

(100%)

RoTE

in 2026 with a

CET1

of the higher of

13% or the min

imum

regulatory

requirement

30%

10%

Straight-line assessment

between min

imum and

maximum

13%

Relative TSR

performance against

peer group

30%

Median

Straight-line assessment

between peer companies

posit

ioned

immed

iately

above and below the Group

Upper quartile

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 2026. 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

Non-ﬁnancial measures for 2024-26 LTIP awards

Environmental, social and governance

•

Accelerating Zero: Progress towards our 2030 Sustainable Finance mobil

isat

ion target in each of the three performance

years.

•

Actively contribut

ing to the development of the susta

inab

ity ecosystem through global partnerships, in

iat

ives and

cross-sector collaborations.

•

Lift

ing part

ipat

ion: Year-on year growth in ﬁnanc

ing act

ity w

ith female and/or small and medium enterprise (SME)

clients and other underserved populations.

•

Resetting Globalisat

ion: Ma

inta

ing our presence and supporting internat

ional/cross border trade

in key developing

markets that we serve.

•

Improve eNPS target.

• Increase

senior female representation and

increase our ‘culture of inclus

ion’ (

internal index).

Weight

ing

–

25%

Directors’ remuneration in 2023: LTIP awards

continued

203

Standard Chartered

– Annual Report 2023

Directors’ report

Other strategic measures

Clients

•

Improve client satisfact

ion rat

ing.

•

Deliver growth across our markets includ

ing

in cross-border income in CCIB, in Afﬂuent wealth client

activ

ity and

in Ventures.

Productiv

ity

•

Improve Operating Proﬁt less credit impa

irment per FTE.

•

Percentage of transformation programmes on track.

Risk and controls

•

Improve effectiveness of risk and control governance.

Weight

ing

–

15%

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 2027 to March 2031)

subject to meeting the performance measures set out at the end of 2026. All vested shares are subject to a 12-month retention

period.

Total variable remuneration awarded to directors in respect of 2023 (audited)

Bill Winters

Andy Halford

2023

2022

2023

2022

Annual incent

ive (£000)

1,462

1,499

920

945

Annual incent

ive as a percentage of salary

58%

62%

57%

61%

LTIP award (value of shares subject to performance condit

ions) (£000)

3,322

3,213

N/A

2,054

LTIP award as a percentage of salary

132%

N/A

132%

Total variable remuneration (£000)

4,784

4,712

920

2,999

Total variable remuneration as a percentage of salary

190%

194%

57%

193%

LTIP awards for the 2023 performance year will be granted to executive directors in March 2024 and are based on 2023 salary

204

Standard Chartered

– Annual Report 2023

Directors’ report

Directors’ remuneration 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

ions.

Executive 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. Bill and Andy served as

non-executive directors elsewhere and received fees for the period covered by this report as set out below. Andy jo

ined the

Board of UK Government Investments Lim

ited on 17 October 2023.

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

Board of UK Government

Investments Lim

ited

GBP5,208

Diego De Giorg

1 September 2023

–

Single ﬁgure of remuneration for the Chairman and INEDs (audited)

The Chairman and INEDs were paid in monthly instalments during the year. The INEDs are required to hold shares with a

nominal value of $1,000. The table below shows the fees and beneﬁts received by the Chairman and INEDs in 2023 and 2022.

The INEDs’ 2023 beneﬁt ﬁgures are in respect of the 2022/23 tax year and the 2022 beneﬁt ﬁgures are in respect of the 2021/22

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

2023

2022

2023

2022

2023

2022

2023

Group Chairman

José Viñals

1,293

1,250

1,362

1,295

45,000

Current INEDs

Shir

ish Apte

287

128

287

128

2,000

David Conner

250

233

251

234

10,000

Christ

ine Hodgson, CBE

289

–

Gay Huey Evans, CBE

150

155

150

156

2,615

Jackie Hunt

185

188

2,000

Robin Lawther, CBE

225

2,000

Maria Ramos

332

239

332

239

2,000

Phil Rivett

247

234

247

234

2,128

David Tang

185

170

186

171

2,000

Carlson Tong

190

183

190

183

2,000

Jasmine Whitbread

210

–

Linda Yueh, CBE

219

–

219

–

2,000

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 2023 or on the retirement of a director unless otherwise stated

David Conner’s fee includes his role on the Combined US Operations Risk Committee

Christ

ine Hodgson stepped down from the Board on 31 January 2023 and we are no longer track

ing her shareholding. Her reported fee for 2023 of £17,000 is in

respect of the period of 1 January 2023 to 31 January 2023

Jasmine Whitbread stepped down from the Board on 3 May 2023 and we are no longer tracking her shareholding. Her reported fee for 2023 of £82,000 is in

respect of the period of 1 January 2023 to 3 May 2023

Linda Yueh was appointed to the Board on 1 January 2023

INEDs’ letters of appointment

The INEDs have letters of appointment, which are available for inspect

ion at the Group’s reg

istered ofﬁce. INEDs are appointed

for a period of one year, unless terminated by either party with three months’ notice.

Details of the INEDs’ appointments are set out on

pages 137 to 141

Directors’ remuneration in 2023

continued

205

Standard Chartered

– Annual Report 2023

Directors’ report

Remuneration for the executive directors in 2024 will be in line with our directors’ remuneration policy, approved at the AGM in

May 2022. Key elements include salary, pension, beneﬁts, an annual incent

ive and an LTIP award.

Our policy is summarised on

pages 188 and 189

of this report and set out in full on

pages 159 to 164

of the 2021 Annual Report and on our website at

sc.com

The Committee annually reviews the executive directors’ salaries, consider

ing changes to the scope or respons

ity of the role,

market alignment and Group-wide increases. Fixed pay for Bill and Diego will not be increased in 2024.

£000

Bill Winters

Diego De Giorg

2024

2023

% change

2024

2023

% change

Salary

2,517

1,650

–

of which cash

1,258

1,100

–

of which shares

1,259

550

–

Pension

252

110

–

Total ﬁxed pay

2,769

1,760

–

Proportion of total ﬁxed pay paid in cash

55%

–

69%

–

Proportion of total ﬁxed pay paid in shares

45%

–

31%

–

Illustration of applicat

ion of 2024 remunerat

ion policy

The charts below illustrate potential directors’ remuneration outcomes based on our policy (i.e. March 2024 awards based on

2023 performance and ﬁxed remuneration with effect from 1 April 2024). These illustrate four performance scenarios and the

percentages in each bar show the remuneration provided by each pay element. 2022 and 2023 single ﬁgures of remuneration

for Bill are also shown.

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

3,057

100%

On-target

5,825

52%

19%

29%

Maximum

8,594

35%

26%

39%

10,255

30%

22%

48%

2022 single ﬁgure

2023 single ﬁgure

6,408

46%

23%

31%

7,837

39%

19%

42%

Maximum + 50%

share price increase

Diego De Giorg

Min

imum

1,819

100%

On-target

3,634

50%

20%

30%

Maximum

5,449

33%

27%

40%

6,538

28%

22%

50%

Maximum + 50%

share price increase

£000

Salary

Beneﬁts

Pension

Total

Fixed remuneration

Consists of salary and pension (as at 1 April 2024)

and beneﬁts (received in 2023, annualised for GCFO)

Bill Winters

2,517

288

252

3,057

Diego De Giorg

1,650

110

1,819

Min

imum

On-target

Maximum

£000

% of target

% of salary

% of target

% of salary

Annual incent

ive

No annual incent

ive

is awarded

50%

44%

100%

88%

LTIP award

No LTIP award vests

50%

66%

100%

132%

2024 policy implementat

ion for d

irectors

206

Standard Chartered

– Annual Report 2023

Directors’ report

Directors’ remuneration report

2024 annual incent

ive scorecard

Our annual incent

ive scorecard reﬂects our strateg

ic prior

ies. Targets are set annually by the Committee based on the Group’s

annual ﬁnancial plans and strateg

ic prior

ies. Targets and performance achieved will be disclosed retrospectively in the 2024

Annual Report due to commercial sensit

ity.

Financ

ial measures make up 50 per cent of the scorecard. The Comm

ittee assesses strategic and personal measures using a

quantitat

ive and qual

itat

ive framework.

2024 scorecard – ﬁnancial measures

Measure

Weight

ing

Target

Income

•

Targets to be disclosed retrospectively

CCIB Sustainable Finance Income

Costs

RoTE

with a CET1

underpin of the higher of 13% or the

min

imum regulatory requ

irement

30%

The Group’s reported performance is adjusted for proﬁts or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent,

other infrequent and/or exceptional transactions that are sign

iﬁcant or mater

ial in the context of the Group’s normal business earnings for the period and items

which management and investors would ordinar

ily

ident

ify separately when assess

ing underlying performance period by period

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 2024. 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

2024 scorecard – strategic measures

Clients (Network, Afﬂuent, Mass)

Target

•

Improve client satisfact

ion and cl

ient experience ratings.

•

Deliver cross border income growth in CCIB.

•

Deliver network growth in qualif

ied cl

ients across Afﬂuent activ

ity.

•

Grow value of Ventures.

•

Mass market Retail growth through new to bank personal customers.

Weight

ing

–

12%

Sustainab

ity

Target

•

Meeting key milestones through build

ing

infrastructure relating to client, transaction and

central data for deliver

ing on our net zero amb

ion.

•

Reducing our ﬁnanced emiss

ions for key sectors

in line with our risk appetite and based on

inter

im 2030 sectoral targets.

•

Reducing Scope 1 and 2 emiss

ions

in line with our operational net zero target by 2025.

Weight

ing

–

Productiv

ity and transformat

ion

Target

•

Grow proportion of dig

itally

iated transactions and dig

ital sales adopt

ion.

•

Transformational Change: % of transformation change programmes on track.

•

Productiv

ity: Increase Operat

ing Proﬁt less Credit Impairment per FTE.

Weight

ing

–

People and culture

Target

•

Improve employee engagement as evidenced in our annual My Voice survey.

•

Improve senior female representation to support reaching 35% by 2025.

•

Improve our ‘culture of inclus

ion’ score (

internal index).

Weight

ing

–

2024 policy implementat

ion for d

irectors

continued

207

Standard Chartered

– Annual Report 2023

Directors’ report

Risk and controls

Target

•

Non-ﬁnancial r

isk reduction.

•

Self-ident

iﬁcation of aud

it issues.

Weight

ing

–

12%

2024 scorecard – personal performance measures

Bill – performance goals

Target

•

Further progress towards an efﬁcient and more proﬁtable Bank wh

ile mainta

ing focus on risk

and control.

•

Further promote our culture of innovat

ion and max

ise synerg

ies between the main bank and

our various Ventures.

•

Continue to build a high performance environment and embed the culture of excellence.

Weight

ing

–

10%

Diego – performance goals

Target

•

Financ

ial performance: contr

ibute to the delivery of Group ﬁnanc

ial performance and

operating leverage.

•

Finance function performance: partner with and support business in the execution of the

Group’s strategy.

•

Transformation and simpl

iﬁcation: lead

implementat

ion of strateg

ic change in

iat

ives across

the Group.

•

Process and controls: continue to progress on major multi-year programs and address

regulatory requirements.

Weight

ing

–

10%

INED fees

The Board regularly reviews the fee levels, consider

ing market data and the dut

ies, time commitment and contribut

ion

expected for the PLC Board and, where appropriate, subsid

iary boards. Cons

ider

ing the

increas

ing demands made of our INEDs

the Board determined an increase in INED basic fees of GBP5,000 to GBP115,000 to be appropriate. The revised fees are

effective from 1 January 2024.

The Chairman and the INEDs are elig

ible for beneﬁts

in line with the directors’ remuneration policy. Neither the Chairman or

INEDs receive any performance-related remuneration.

Our policy is summarised on

pages 188 and 189

of this report and set out in full on

pages 159 to 164

of the 2021 Annual Report and on our website at

sc.com

Role

Annual fee

Group Chairman

£1,293,000

Senior Independent Director

£45,000

Independent Non-Executive Director

£115,000

Committee

Member fee

Chair fee

Audit, Board Risk, Remuneration

£40,000

£80,000

Culture and Sustainab

ity

£35,000

£70,000

Governance and Nominat

ion

£17,000

Nil

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

208

Standard Chartered

– Annual Report 2023

Directors’ report

Addit

ional remunerat

ion disclosures

Addit

ional remunerat

ion disclosures

The following disclosures provide further informat

ion and context on execut

ive director and wider workforce remuneration as

required by the Directors’ Remuneration Report Regulations and The Stock Exchange of Hong Kong Lim

ited.

The relationsh

ip between the remunerat

ion of the Group CEO and all UK employees

Ratio of the total remuneration of the CEO to that of the UK lower quartile, median and upper quartile employees

Year

Method

CEO

UK employee – £000

Pay ratio

£000

P25

P50

P75

P25

P50

P75

2023

7,837

110

162

247

71:1

48:1

32:1

2022

6,408

145

228

67:1

44:1

28:1

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 yearly LTIP outcomes for the CEO, and accordingly may ﬂuctuate. Therefore, the Committee

also discloses salary and salary plus annual incent

ive rat

ios, as most 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

UK employee – £000

Pay ratio

£000

P25

P50

P75

P25

P50

P75

2023

2,496

103

149

32:1

24:1

17:1

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

CEO

UK employee – £000

Pay ratio

£000

P25

P50

P75

P25

P50

P75

2023

3,958

138

220

41:1

29:1

18:1

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

CEO pay ratio methodology

•

Pay ratios are calculated using Option A methodology, aligned with investor guidance.

•

Employee pay data is based on full-time equivalent UK employees as of 31 December for the relevant year, excluding

leavers, joiners, and transfers

in/out of the UK during the year for like-for-like comparison. Total remuneration is

calculated in line with the single ﬁgure methodology and insured beneﬁts data is based on notional premiums.

No other adjustments or assumptions have been made.

•

CEO pay is the single ﬁgure of remuneration for 2023 and restated for 2022 to reﬂect the ﬁnal LTIP performance outcome

assessed in March 2023. The 2023 ratio will be restated in the 2024 report to reﬂect the ﬁnal LTIP performance outcome

for elig

ible employees and the CEO.

•

The Committee considered the data for three ind

iduals ident

iﬁed at the quart

iles for 2023 and believes it fairly reﬂects

UK employee pay. They were full-time employees and received remuneration in line with policy, without exceptional pay.

•

Our LTIP links remuneration to the achievement of long-term strategy and reinforces alignment with shareholder

interests. Partic

ipat

ion is typically senior employees who directly inﬂuence the award’s performance targets.

The ident

iﬁed quart

ile employees are not LTIP partic

ipants.

209

Standard Chartered

– Annual Report 2023

Directors’ report

Group performance versus the CEO’s remuneration

The graph below shows the Group’s TSR performance on a cumulative basis over the past 10 years alongside that of the

FTSE 100 and peer banks. The graph also shows CEO remuneration based on the single ﬁgure over the 10 years ended

31 December 2023 for comparison. The FTSE 100 provides a broad comparison group against which shareholders may

measure their relative returns.

The table below shows the single ﬁgure of total remuneration for the CEO since 2014 and the variable remuneration

delivered as a percentage of maximum opportunity.

Salary

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Single ﬁgure of total

remuneration £000

3,093

1,290

8,399

3,392

4,683

6,287

5,360

3,926

4,740

6,408

7,837

Annual incent

ive as percentage

of maximum opportunity

45%

76%

63%

55%

18.5%

57%

70%

66%

Vesting of LTIP awards as a

percentage of maximum

10%

–

27%

38%

26%

23%

36.8%

66%

TSR performance will be assessed three years from the date of award, in March 2024, making the projected 2023 LTIP outcome of 66 per cent subject to change

•

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 2022 single ﬁgure for Bill has been restated based on the actual performance outcome and share price when the 2020-22

LTIP awards started vesting in March 2023.

Jan 24

Jan 23

Jan 22

Jan 21

Jan 20

Jan 19

Jan 18

Jan 17

Jan 16

Jan 15

Jan 14

100

120

140

160

180

200

Value of £100 invested on 31 December 2013

CEO total remuneration (£ mill

ion)

CEO single ﬁgure of remuneration (Peter Sands)

CEO single ﬁgure of remuneration (Bill Winters)

Standard Chartered

FTSE

100

Comparator median

210

Standard Chartered

– Annual Report 2023

Directors’ report

Addit

ional remunerat

ion disclosures

Addit

ional remunerat

ion disclosures

continued

Annual percentage change in remuneration of directors and UK employees methodology

•

Employee pay data is based on FTE UK employees as of 31 December for the relevant year, excluding leavers, jo

iners,

and transfers in/out of the UK during the year for like-for-like comparison. Salary percentage change reﬂects increases

decided at the end of 2022 and implemented in 2023.

•

Average FTE UK employee percentage change is calculated on a mean basis to allow for a more consistent year-on-year

comparison.

•

Due to the low value taxable beneﬁts received by INEDs, small value changes may lead to annual percentage change

ﬂuctuations.

Annual percentage change in remuneration of directors and UK employees

In line with our Fair Pay Charter, we monitor CEO and wider workforce remuneration changes annually. Addit

ionally, comply

ing

with the Shareholder Rights Direct

ive, we compare PLC Board d

irectors with an average FTE UK employee. As ind

iduals are

employed by subsid

iary compan

ies rather than Standard Chartered PLC we voluntarily disclose comparison against UK

employees as we feel this is a suitable comparison.

Salary % change

Taxable beneﬁts % change

Annual incent

ive % change

2023

2022

2021

2020

2023

2022

2021

2020

2023

2022

2021

2020

CEO

Bill Winters

3.2

2.0

0.0

0.7

(3.0)

79.8

(26.5)

(2.9)

(2.5)

26.1

208.1

(69.2)

GCFO

Andy Halford

3.2

2.0

0.7

3.7

(17.0)

23.9

(5.6)

30.2

(2.6)

24.3

208.9

(68.2)

Workforce average

FTE UK employee

10.4

3.3

3.1

3.8

2.2

(7.0)

(2.0)

2.9

0.8

14.3

38.2

(22.1)

Group Chairman

José Viñals

3.4

0.0

53.2

170.2

(61.5)

(11.7)

–

Shir

ish Apte

–

David Conner

7.5

(8.8)

(6.7)

(0.6)

0.0

5.9

(57.5)

–

Christ

ine Hodgson, CBE

–

(11.0)

0.0

–

0.0

(100.0)

28.2

–

Gay Huey Evans, CBE

(3.2)

(22.5)

0.0

(100.0)

100.0

(100.0)

233.9

–

Jackie Hunt

–

Robin Lawther, CBE

–

Maria Ramos

38.8

25.9

–

0.0

–

Phil Rivett

5.7

3.9

–

0.0

–

David Tang

8.8

0.0

18.3

–

0.0

(82.3)

–

Carlson Tong

4.1

(11.0)

0.0

–

0.0

(100.0)

–

Jasmine Whitbread

–

0.0

–

0.0

(100.0)

(49.2)

–

Linda Yueh

–

The increase in 2023 taxable beneﬁts for José Viñals is primar

ily due to the cont

inu

ing

increase in business travel to pre-pandemic levels

In 2023, Christ

ine Hodgson and Jasm

ine Whitbread stepped down from the Board on 31 January and 3 May respectively. Linda Yueh was appointed to the Board

on 1 January

The increase in fees for Maria Ramos is due to changes in Board and Committee responsib

ies

in 2022

See

pages 195 and 204

for the CEO, GCFO, Group Chairman and INEDs data the changes relates to

211

Standard Chartered

– Annual Report 2023

Directors’ report

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 (100%)

Accrues notional

div

idends?

Delivery

2016-18 LTIP

33% RoE

33% TSR

33% Strategic

Yes

•

Tranche 1: 50%

•

Tranches 2-5: 12.5%

2017-19 LTIP

Yes

•

5 equal tranches

2018-20 LTIP

•

5 equal tranches

2019-21 LTIP

33% RoTE

33% TSR

33% Strategic

•

5 equal tranches

2020-22 LTIP

•

5 equal tranches

2021-23 LTIP

30% RoTE

30% TSR

15% Sustainab

ity

25% Strategic

•

5 equal tranches

2022-24 LTIP

To be assessed at the end of 2024

•

5 equal tranches

2023-25 LTIP

To be assessed at the end of 2025

•

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 LTIP awards

granted after this date took into account the lack of div

idend equ

ivalents (calculated by reference to market consensus div

idend y

ield) such that the overall

value of the award was mainta

ined

Return on equity

Change in interests during the period 1 January to 31 December 2023 (audited)

Bill Winters

Date of grant

Share award

price (£)

As at

1 January

Awarded

Div

idends

awarded

Vested/

exercised

Lapsed

As at

31 December

Performance

period end

Vesting date

2016-18 LTIP

4 May 2016

5.560

33,507

–

3,292

36,799

–

11 Mar 2019

4 May 2023

2017-19 LTIP

13 Mar 2017

7.450

45,049

–

4,421

49,470

–

13 Mar 2020

13 Mar 2023

45,049

–

45,049

13 Mar 2024

2018-20 LTIP

9 Mar 2018

7.782

28,178

–

28,178

–

9 Mar 2021

9 Mar 2023

28,178

–

28,178

9 Mar 2024

28,179

–

28,179

9 Mar 2025

2019-21 LTIP

11 Mar 2019

6.105

30,604

–

30,604

–

11 Mar 2022

11 Mar 2023

30,604

–

30,604

11 Mar 2024

30,604

–

30,604

11 Mar 2025

30,605

–

30,605

11 Mar 2026

2020-22 LTIP

9 Mar 2020

5.196

161,095

–

59,282

101,813

–

9 Mar 2023

161,095

–

101,813

59,282

9 Mar 2024

161,095

–

101,813

59,282

9 Mar 2025

161,095

–

101,813

59,282

9 Mar 2026

161,095

–

101,813

59,282

9 Mar 2027

2021-23 LTIP

15 Mar 2021

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

14 Mar 2022

4.876

151,386

–

151,386

14 Mar 2025

151,386

–

151,386

14 Mar 2026

151,386

–

151,386

14 Mar 2027

151,386

–

151,386

14 Mar 2028

151,388

–

151,388

14 Mar 2029

2023-25 LTIP

13 Mar 2023

7.398

–

101,209

–

101,209

13 Mar 2026

–

101,209

–

101,209

13 Mar 2027

–

101,209

–

101,209

13 Mar 2028

–

101,209

–

101,209

13 Mar 2029

–

101,209

–

101,209

13 Mar 2030

27%

38%

26%

23%

36.8%

66%

212

Standard Chartered

– Annual Report 2023

Directors’ report

Addit

ional remunerat

ion disclosures

Addit

ional remunerat

ion disclosures

continued

Andy Halford

Date of grant

Share award

price (£)

As at

1 January

Awarded

Div

idends

awarded

Vested/

exercised

Lapsed

As at

31 December

Performance

period end

Vesting date

2016-18 LTIP

4 May 2016

5.560

20,009

–

1,966

21,975

–

11 Mar 2019

4 May 2023

2017-19 LTIP

13 Mar 2017

7.450

27,888

–

2,740

30,628

–

13 Mar 2020

13 Mar 2023

27,890

–

27,890

13 Mar 2024

2018-20 LTIP

9 Mar 2018

7.782

17,448

–

17,448

–

9 Mar 2021

9 Mar 2023

17,448

–

17,448

9 Mar 2024

17,448

–

17,448

9 Mar 2025

2019-21 LTIP

11 Mar 2019

6.105

19,571

–

19,571

–

11 Mar 2022

11 Mar 2023

19,571

–

19,571

11 Mar 2024

19,571

–

19,571

11 Mar 2025

19,572

–

19,572

11 Mar 2026

2020-22 LTIP

9 Mar 2020

5.196

99,976

–

36,791

63,185

–

9 Mar 2023

99,976

–

63,185

36,791

9 Mar 2024

99,976

–

63,185

36,791

9 Mar 2025

99,976

–

63,185

36,791

9 Mar 2026

99,977

–

63,186

36,791

9 Mar 2027

2021-23 LTIP

15 Mar 2021

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

14 Mar 2022

4.876

96,772

–

96,772

14 Mar 2025

96,772

–

96,772

14 Mar 2026

96,772

–

96,772

14 Mar 2027

96,772

–

96,772

14 Mar 2028

96,773

–

96,773

14 Mar 2029

2023-25 LTIP

13 Mar 2023

7.398

–

64,700

–

64,700

13 Mar 2026

–

64,700

–

64,700

13 Mar 2027

–

64,700

–

64,700

13 Mar 2028

–

64,700

–

64,700

13 Mar 2029

–

64,702

–

64,702

13 Mar 2030

2022

Sharesave

5,6

4.230

2,127

–

2,127

–

1 Feb 2026

The unvested LTIP awards held by Bill and Andy 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

For the 2023-25 LTIP awards granted to Bill and Andy on 13 March 2023, the values granted were: Bill: £3.2 mill

ion; Andy £2.1 m

ill

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 2023-25 LTIP awards. The clos

ing price on the day before grant was £7.398

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 and 2017-19 LTIP awards vesting

in 2023 did not include any shares relating to the cancelled div

idend

Shares (before tax) were delivered to Bill and Andy from the vesting element of LTIP awards. The closing share price on the day before the shares were delivered

was as follows:

•

4 May 2023: Shares in respect of the 2016-18 LTIP. Previous day closing share price: £6.114

•

13 March 2023: Shares in respect of the 2017-19 LTIP and 2019-21 LTIP. Previous day closing share price: £7.398

•

9 March 2023: Shares in respect of the 2018-20 LTIP. Previous day closing share price: £7.874

•

15 March 2023: Shares in respect of the 2020-22 LTIP. Previous day closing share price: £6.968

Andy chose to partic

ipate

in the 2022 Sharesave inv

itat

ion. 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

The vesting date relates to the end of the savings contract and the start of the six month exercise window

As at 31 December 2023, 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 Hong Kong Stock Exchange pursuant

to the Model Code for Securit

ies Transact

ions by Directors of Listed Issuers.

See

page 450

for details of share plan dilut

ion l

its

213

Standard Chartered

– Annual Report 2023

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 shares

subject to a retention period, and unvested share awards for which performance condit

ions have been sat

isf

ied (on a net of tax

basis). As of 31 December 2023, both Bill and Andy sign

iﬁcantly exceeded the

ir shareholding requirement.

Shares purchased voluntarily from their own funds are equivalent to 82 and 60 per cent of salary for Bill and Andy, respectively.

No shares were purchased voluntarily in 2023. The following chart and table summarise the executive directors’ shareholdings

and share interests.

Shares held beneﬁcially

Bill Winters

Andy Halford

100%

200%

300%

400%

500%

600%

700%

800%

Unvested share awards not subject to

performance measures (net of tax)

Shareholding requirement

687%

60%

59%

473%

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

Salary

Value of shares

counting towards

shareholding

requirement as a

percentage of

salary

Unvested share

awards subject to

performance

measures

(before tax)

Bill Winters

2,590,604

228,083

2,818,687

250% salary

£2,517,000

747%

2,016,082

Andy Halford

1,140,269

142,389

1,282,658

200% salary

£1,609,000

532%

1,288,778

All ﬁgures are as of 31 December 2023 unless stated otherwise. The closing share price on 29 December 2023 was £6.67. No director had either: (i) an interest in

Standard Chartered PLC’s preference shares or loan stocks of any subsid

iary or assoc

iated undertaking of the Group; or (i

i) any corporate

interests in Standard

Chartered PLC’s ordinary shares

The beneﬁcial

interests of directors and connected persons in the ordinary shares of the Company are set out above. The executive directors do not have any

non-beneﬁcial

interest in the Company’s shares. Neither of the executive directors used ordinary shares as collateral for any loans

The salary and shares held beneﬁcially

include shares awarded to deliver the executive directors’ salary shares

36.8 per cent of the 2020-22 LTIP award is no longer subject to performance measures due to achievement against 2020-22 TSR and strategic measures

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

Histor

ical LTIP awards

The current posit

ion on projected vest

ing for unvested LTIP awards from the 2021 and 2022 performance years based on current

performance as at 31 December 2023 is set out in the tables below.

Current posit

ion on the 2022-24 LTIP award: projected part

ial vesting

Measure

Weight

ing

Min

imum (25%)

Maximum (100%)

2022-24 LTIP assessment as of

31 December 2023

RoTE

in 2024 with a CET1

underpin

of the higher of 13% or the

min

imum regulatory requ

irement

30%

11%

RoTE between threshold

and maximum: ind

icat

ive

partial vesting

Relative TSR performance

against peer group

30%

Median

Upper quartile

TSR posit

ioned between

median and upper quartile:

ind

icat

ive partial vesting

Sustainab

ity

15%

Targets set for sustainab

ity

measures linked to the

business strategy

Tracking above target

performance: ind

icat

ive

partial vesting

Other strategic measures

25%

Targets set for strategic

measures linked to the

business strategy

Tracking above target

performance: ind

icat

ive

partial vesting

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 2024. 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

214

Standard Chartered

– Annual Report 2023

Directors’ report

Addit

ional remunerat

ion disclosures

Addit

ional remunerat

ion disclosures

continued

Current posit

ion on the 2023-25 LTIP award: projected part

ial vesting

Measure

Weight

ing

Min

imum (25%)

Maximum (100%)

2023-25 LTIP assessment as of

31 December 2023

RoTE

in 2025 with a CET1

underpin

of the higher of 13% or the

min

imum regulatory requ

irement

30%

10%

12.5%

RoTE between threshold

and maximum: ind

icat

ive

partial vesting

Relative TSR performance

against peer group

30%

Median

Upper quartile

TSR posit

ioned below the

median: ind

icat

ive 0% vesting

Sustainab

ity

15%

Targets set for sustainab

ity

measures linked to the

business strategy

Tracking above target

performance: ind

icat

ive

partial vesting

Other strategic measures

25%

Targets set for strategic

measures linked to the

business strategy

Tracking above target

performance: ind

icat

ive

partial vesting

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 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

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.

The approach used to determine Group-wide total discret

ionary

incent

ives

in 2023 is explained on pages 182 and 183 of this

report. The following tables show the income statement charge for these incent

ives.

Income statement charge for Group discret

ionary

incent

ives

2023

$mill

ion

2022

$mill

ion

Total discret

ionary

incent

ives

1,574

1,589

Less: discret

ionary

incent

ives that w

ill be charged in future years

(242)

Plus: current year charge for discret

ionary

incent

ives from pr

ior years

188

150

Total

1,520

1,497

Year in which income statement is expected to reﬂect discret

ionary

incent

ives

Actual

Expected

2022

$mill

ion

2023

$mill

ion

2024

$mill

ion

2025

and beyond

$mill

ion

Discret

ionary

incent

ives awarded for 2021 and earl

ier

150

Discret

ionary

incent

ives awarded for 2022

106

Discret

ionary

incent

ives awarded for 2023

–

116

126

Total

227

269

213

215

Standard Chartered

– Annual Report 2023

Directors’ report

Allocation of the Group’s earnings between stakeholders

When consider

ing Group var

iable remuneration, the Committee takes account of shareholders’ concerns about relative

expenditure on pay and determines the allocation of earnings to expenditure on remuneration carefully, and has approached

this allocation in a disc

ipl

ined way. The amount of corporate tax, includ

ing the bank levy,

is included in the chart because it

is a sign

iﬁcant payment and

illustrates the Group’s contribut

ion through the tax system.

Approach to risk adjustment

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

ﬁnancial losses.

Indiv

idual

adjustments

•

Indiv

idual r

isk adjustments to variable

remuneration are considered based on the

material

ity of the

issue.

•

At an ind

idual level, risk adjustments can be

applied through the reduction or forfeiture of the

value of current year variable remuneration or

the applicat

ion of malus or clawback to unpa

or paid variable remuneration as appropriate,

at the Committee’s discret

ion.

•

Deemed to have: (i) caused in full or in part a

material loss for the Group as a result of reckless,

negligent or wilful actions, or (i

i) exh

ited

inappropr

iate behav

iours, or (i

i) applied a lack

of appropriate supervis

ion and due d

igence.

•

The ind

idual failed to meet appropriate

standards of ﬁtness and propriety.

Our Pillar 3 remuneration disclosures can be viewed in our 2023 Pillar 3 Report at

sc.com

Remuneration of the ﬁve highest paid ind

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 2023.

Components of remuneration

Five highest paid

$000

Senior management

$000

Salary, cash allowances and beneﬁts in kind

19,537

28,286

Pension contribut

ions

358

1,428

Variable remuneration awards paid or receivable

31,376

42,928

Payments made on appointment

–

1,070

Remuneration for loss of ofﬁce (contractual or other)

–

Other

–

Total

51,271

73,712

Total HKD equivalent

401,528

577,275

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 2023

Staff costs

2023

$million

2022

10%

20%

30%

40%

50%

60%

70%

100%

Corporate taxation including levy

Paid to shareholders in dividends and buybacks

80%

90%

8,256

1,742

2,568

7,618

1,486

1,651

216

Standard Chartered

– Annual Report 2023

Directors’ report

Addit

ional remunerat

ion disclosures

Share award movements for the ﬁve highest paid ind

iduals for the year to 31 December 2023

LTIP

Deferred shares

Sharesave

Weighted

average

Sharesave

exercise price

(£)

Outstanding at 1 January 2023

4,483,528

3,097,427

4,246

4.23

Granted

3,4,5

997,172

1,303,485

–

Lapsed

729,613

–

Vested/Exercised

253,569

738,051

–

Outstanding at 31 December 2023

4,497,518

3,662,861

4,334

4.26

Exercisable as at 31 December 2023

–

Range of exercise prices (£)

–

4.23 – 5.88

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

993,801 (LTIP) granted on 13 March 2023, 2,821 (LTIP) granted as a notional div

idend on 1 March 2023, 550 (LTIP) granted as a not

ional div

idend on 1 September

2023. 1,302,503 (Deferred shares) granted on 13 March 2023, 690 (Deferred shares) granted as a notional div

idend on 1 March 2023, 292 (Deferred shares) granted

as a notional div

idend on 1 September 2023. 88 (Sharesave) granted on 18 Sep 2023

LTIP and Deferred shares were granted at a share price of £7.398, 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 2023 the exercise price is £5.88 per share, a 20% discount from the average of the closing prices over the ﬁve days to the inv

itat

ion date

of 21 August 2023. The closing share price on 18 August 2023 was £7.214

See

page 211

for details of awards and options for Bill Winters

See

page 451

for a view of share awards and options for all employees

See

page 447

for details on the accounting standard adopted for share awards is IFRS2

The table below shows the emoluments of: (i) the ﬁve highest paid employees; and (i

i) sen

ior management for the year ended

31 December 2023.

Remuneration band

HKD

Remuneration band

USD equivalent

Number of employees

Five highest

paid

Senior

management

20,000,001 – 20,500,000

2,553,789 – 2,617,634

–

22,000,001 – 22,500,000

2,809,168 – 2,873,013

–

23,500,001 – 24,000,000

3,000,702 – 3,064,547

–

24,000,001 – 24,500,000

3,064,547 – 3,128,392

–

26,500,001 – 27,000,000

3,383,771 – 3,447,615

–

27,000,001 – 27,500,000

3,447,616 – 3,511,460

–

32,000,001 – 32,500,000

4,086,063 – 4,149,907

–

32,500,001 – 33,000,000

4,149,908 – 4,213,752

–

34,500,001 – 35,000,000

4,405,286 – 4,469,131

–

41,000,001 – 41,500,000

5,235,268 – 5,299,113

–

44,500,001 – 45,000,000

5,682,181 – 5,746,026

–

52,000,001 – 52,500,000

6,639,852 – 6,703,697

–

75,500,001 – 76,000,000

9,640,554 – 9,704,399

78,000,001 – 78,500,000

9,959,778 – 10,023,623

84,500,001 – 85,000,000

10,789,759 – 10,853,604

110,500,001 – 111,000,000

14,109,685 – 14,173,530

–

Total

Senior management comprises the executive directors and the members of the Group Management Team at any point during 2023

Shir

ish Apte

Chair of the Remuneration Committee

23 February 2024

217

Standard Chartered

– Annual Report 2023

Directors’ report

Other disclosures

The Directors’ report for the year ended 31 December 2023

comprises pages 134 to 229 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) (4-11) (14) (A) (B)

N/A

LR 9.8.4 (12-13)

439

Princ

ipal act

ies

We are a leading internat

ional bank

ing group, with over

170 years of history. Our unique geographical footprint in Asia,

Africa and the Middle East helps connect the world’s most

dynamic markets. Our purpose is to drive commerce and

prosperity through our unique divers

ity. The Group’s roots

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. 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 11 to 89

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

in 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

11 to 89, and 137 to 141

B – Purpose, value, strategy and alignment with culture

2 to 3, 24, 130 and 225

C – Performance measures, controls and risk management

14 to 15, and 314 to 319

D – Shareholder and other stakeholder engagement

54 to 64, and 157 to 161

E – Workforce polic

ies and pract

ices

60 to 64

Div

ion of

responsib

ies

F – Chair role and responsib

ies

151 to 153, and 155 to 156

G – Board roles and responsib

ies

151

H – Non-executive directors’ role and capacity

151

I –

Board effectiveness and efﬁc

iency

155 to 156

Composit

ion,

succession and

evaluation

J – Board appointments and succession plans

179

K – Board skills, experience, knowledge and tenure

137 to 141

L – Board evaluation of composit

ion, d

ivers

ity and effect

iveness

153 and 155 to 157

Audit, risk and

internal control

M –

Independence and effectiveness of internal and external audit functions,

integr

ity of ﬁnancial and narrat

ive statements

166

N – Fair, balanced and understandable assessment of the Company’s posit

ion

and prospects

164

O – Risk management and internal controls

314 to 319

Remuneration

P – Remuneration polic

ies and pract

ices

182 to 216

Q – Procedure for developing remuneration policy

Remuneration Committee

Terms of Reference

R –

Independent judgement and discret

ion when author

ing remunerat

ion

outcomes

Remuneration Committee

Terms of Reference

The Remuneration Committee has written Terms of Reference that can be viewed at

sc.com/termsofreference

218

Standard Chartered

– Annual Report 2023

Directors’ report

Other disclosures

Events after the balance sheet date

For details on post balance sheet events, see Note 35 to the

ﬁnancial statements.

Code for Financ

ial Report

ing Disclosure

The Group’s 2023 ﬁnancial statements have been prepared

accordance with the princ

iples of the UK F

inance Disclosure

Code for Financ

ial Report

ing Disclosure.

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

23 February 2024 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 88 and 89, while the

directors’ going concern considerat

ions for the Group can be

found on page 369.

Sufﬁciency of publ

ic ﬂoat

As at the date of this report, the Company has mainta

ined

the prescribed public ﬂoat under the rules governing the

list

ing of secur

ies on The Stock Exchange of Hong Kong

Lim

ited (the Hong Kong L

ist

ing Rules), based on the

informat

ion publ

icly available to the Company and

with

in the knowledge of the d

irectors.

Research and development

During the year, the Group invested $2.01 bill

ion (2022:

$1.98 bill

ion)

in research and development, of which

$0.99 bill

ion (2022: $0.94 b

ill

ion) was recogn

ised as an

expense. The research and development investment

primar

ily related to the plann

ing, 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 2023.

Directors and their interests

The membership of the Board, together with the Directors’

biograph

ical deta

ils, are given on pages 137 to 141. Details of

the directors’ beneﬁc

ial and non-beneﬁcial

interests in the

ordinary shares of the Company as at 31 December 2023 are

shown in the Directors’ remuneration report on pages 204

and 213. As at 16 February 2024, there had been no changes

to those interests in relation to directors remain

ing

in ofﬁce

at that date. 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 29 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 GNC 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 wh

ich they were authorised.

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 2023 and remain in force at the date of

this report.

219

Standard Chartered

– Annual Report 2023

Directors’ 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

2023 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 awards granted to employees

under such schemes and plans to vest on a takeover, subject

to any regulatory or tax considerat

ions that may prevent th

is.

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

2023: paid inter

im d

idend of 6 cents per ord

inary share

(2022: paid inter

im d

idend of 4 cents per ord

inary share)

2023: proposed ﬁnal div

idend of 21 cents per ord

inary share

(2022: paid ﬁnal div

idend of 14 cents per ord

inary share)

2023: total div

idend of 27 cents per ord

inary share

(2022: total div

idend, 18 cents per ord

inary share)

Share capital

The issued ordinary share capital of the Company was

reduced by a total of 229, 693, 294 over the course of 2023.

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

84.3 per cent of the total issued nominal value of all share

capital. The remain

ing 15.7 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. They were last amended at the

2023 AGM. The amendments primar

ily related to compl

iance

with regulatory requirements in Hong Kong, but we also took

the opportunity to amend them to reﬂect developments in

market practice.

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 3 May 2023, our shareholders renewed

the Company’s authority to make market purchases of up

to 284,703,272 ordinary shares, equivalent to approximately

10 per cent of issued ordinary shares as at 20 March 2023,

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 August 2023. 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 commenced on 20 February 2023 and

ended on 29 September 2023. The second share buy-back

programme commenced on 1 August 2023 and ended on

6 November 2023. A total of 229,693,294 ordinary shares

with a nominal value of $0.50 were re-purchased for an

approximate aggregate considerat

ion pa

id of $2 bill

ion.

A monthly breakdown of the shares purchased during the

period includ

ing the lowest and h

ighest price paid per share

is set out in Note 28 to the ﬁnanc

ial statements. All ord

inary

shares which were bought back were cancelled.

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

220

Standard Chartered

– Annual Report 2023

Directors’ report

Other disclosures

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 2023, Temasek Holdings (Private) Lim

ited

(Temasek) is the only shareholder that has an interest of

more than 10 per cent in the Company’s issued ordinary share

capital carrying a right to vote at any general meeting.

Information provided to the Company pursuant to the FCA’s

DTRs is published on a Regulatory Information Service and on

the Company’s website.

As at 16 February 2024, 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 2023. 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.

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

ﬁnancial 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”).

221

Standard Chartered

– Annual Report 2023

Directors’ report

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 requirements to enter into

written agreements and to set annual caps, and the annual

report disclosure (includ

ing annual rev

iew) requirements

under Chapter 14A of the HK List

ing Rules for the three-year

period ending 31 December 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.

As a result of the Passive Investor Exemption and the Waiver,

the vast majority of the Company’s transact

ions with Temasek

and its associates fall outside of the connected transactions

regime. However, non-revenue transactions with Temasek or

any of its associates continue to be subject to monitor

ing for

connected transaction issues.

The Company conﬁrms that:

•

The revenue banking transactions entered into with

Temasek and its associates in 2023 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.

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 2023, the

Company made no issuance of debentures. Further details

of the equity-linked agreements the Group entered into can

be found in Note 28 to ﬁnanc

ial statements.

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 163

and 164.

The Risk review and Capital review on

pages 44 to 51, and 314 to 337

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 47, and 314 to 337

In accordance with Article 435(1)(e) of the Disclosure (CRR)

Part of the PRA Rulebook, the Board Risk Committee, on

behalf of the Board, has considered the adequacy of the risk

management arrangements of the Group and has sought

and received assurance that the risk management systems

in place are adequate with regard to the Group’s proﬁle

and strategy.

222

Standard Chartered

– Annual Report 2023

Directors’ report

Other disclosures

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 2023, the Board Risk

Committee has reviewed the effectiveness of the Group’s

system of internal control and discussed a report on the 2024

annual risk and control self-assessment. 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.

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,

non-ﬁnancial and narrat

ive reporting. The Committee’s role is

to review, on behalf of the Board, the Group’s internal controls

includ

ing

internal ﬁnanc

ial controls. The Aud

it Committee

receives and discusses a paper on the internal controls for

ﬁnancial books and records.

The risk management approach starting on

page 314

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 and Reputational and

Sustainab

ity Risk. This framework incorporates the Group’s

internal controls on ﬁnanc

ial report

ing. 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. Group

ﬁnancial

informat

ion

is prepared in accordance with

UK-adopted International Accounting Standards and

International Financ

ial Report

ing Standards as adopted by

the European Union, and ﬁnanc

ial report

ing is subject to the

Group’s control framework for reconcil

iat

ion processes.

Operational procedures and controls have been established

to facil

itate complete, accurate and t

imely processing of

transactions and the safeguarding of assets. These controls

include appropriate segregation of duties, the regular

reconcil

iat

ion of accounts and the valuation of assets and

posit

ions. In respect of handl

ing ins

ide

informat

ion, we have

applied controls to help ensure only those explic

itly requ

ired

receive ins

ide

informat

ion as well as controls regard

ing the

onward dissem

inat

ion of ins

ide

informat

ion. Controls are also

in place to approve and review dealings in the Company’s

shares. Such systems and controls are designed to manage

rather than elim

inate the r

isk of failure to achieve business

objectives and can only prov

ide reasonable and not absolute

assurance against material misstatement or loss.

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 that they have opportunit

ies to prov

ide feedback

and engage in a dialogue.

We strive to listen and act on feedback from colleagues to

ensure internal communicat

ions are t

imely, informat

ive,

meaningful, and in support of the Group’s strategy and

transformation. In November 2023, we launched our new

employee communicat

ions platform – Pulse. Pulse w

ill become

our primary internal communicat

ions channel that w

ill

allow colleagues to receive key dynamic updates that are

personalised by role and location, sign up for events, provide

feedback, and navigate to other internal platforms. In

addit

ion to targeted d

ital commun

icat

ions, we also deploy

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.

Our senior leaders and people leaders play a crit

ical role

engaging our teams across the network, ensuring that they

are kept up to date on key business developments related to

our performance and strategy. We offer addit

ional support

to our people leaders with specif

ic calls and commun

icat

ions

packs to help them provide context and guidance to their

team members to better understand their role in executing

and deliver

ing the Group’s strategy.

223

Standard Chartered

– Annual Report 2023

Directors’ report

Across the organisat

ion, regular team meet

ings with people

leaders, one-to-one conversations and various management

meetings provide an important platform for colleagues

to discuss and clarify key issues. Regular performance

conversations provide the opportunity to discuss how

ind

iduals, the team and the business area have contributed

to our overall performance and how any recognit

ion and

reward relate to this. The Group’s senior leadership also

regularly shares global, business, function, region and market

updates on performance, strategy, structural changes, HR

programmes, community involvement and other campaigns.

The Board also engages with and listens to the views of

the workforce through several sources, includ

ing through

interact

ive engagement sess

ions. More informat

ion can be

found on page 161 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 2.7 mill

ion followers.

The diverse range of internal and external communicat

ion

tools and channels we have put in place aim to ensure that all

colleagues receive timely and relevant informat

ion to support

their effectiveness.

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 30 days’ leave

(through annual leave and public holidays), and new parents

are provided a min

imum of 20 calendar weeks’ fully pa

leave irrespect

ive of gender, relat

ionsh

ip status or how a

child comes to permanently jo

in a fam

ily. These are above the

International Labour Organisat

ion’s (ILO) m

imum standards.

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 ILO

conventions includ

ing the R

ight to Organise and Collective

Bargain

ing Convent

ion, 1949 (No. 98) and the Freedom

of Associat

ion and Protect

ion of the Right to Organise

Convention, 1948 (No. 87). 12.6 per cent of employees, across

20 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 affect

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, work

ing practices or

the working environment).

Employees can raise grievances to their People Leader or a

Human Resources (HR) Representative. The global process for

addressing grievances involves an HR representative and a

member of the business review

ing the gr

ievance, conducting

fact ﬁnding

into the grievance and provid

ing a wr

itten

outcome to the aggrieved employee. Where employees raise

concerns regarding alleged wrongdoing which does not

pertain to those employees themselves, or in circumstances

where the alleged wrongdoing does pertain to the employees

themselves but they do not wish to raise a grievance, such

concerns are invest

igated

in accordance with the Group

Investigat

ions Standard.

If a grievance or invest

igat

ion is upheld, the next steps

might include remedying a policy or process, or in

iat

ing a

disc

ipl

inary review of the conduct of the colleague who is the

subject of the concern. The Group Grievance Standard and

accompanying process is reviewed on a period

ic bas

is in

consultation with stakeholders across HR, Legal, Compliance

and Shared Investigat

ive Serv

ices. Grievance trends are

reviewed on a quarterly basis and action is taken to address

any concerning trends.

There is a dist

inct Group Speak

ing Up Policy and Standard

which covers instances where an employee wishes to ‘blow

the whistle’ on actual, planned or potential wrongdoing by

another employee or the Group.

The Group is committed to creating a fair, consistent and

transparent approach to making decis

ions

in a disc

ipl

inary

context. This commitment is codif

ied

in our Fair Accountabil

ity

Princ

iples, wh

ich underpin our Group Disc

ipl

inary Standard.

Dism

issals due to m

isconduct issues and/or performance

(where required by law to follow a disc

ipl

inary process) are

governed by the Group Disc

ipl

inary Standard. Where local

law or regulation requires a different process with regards to

dism

issals and other d

isc

ipl

inary outcomes, we have country

variances in place.

224

Standard Chartered

– Annual Report 2023

Directors’ report

Other disclosures

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 colleagues are responsible for fostering an inclus

ive

culture where ind

idual

ity and d

iffer

ing sk

ills, capabil

ies

and experience are understood, respected and valued.

All colleagues, consultants, contractors, volunteers,

interns, casual workers and agency workers are required

to comply with the Standard, includ

ing conduct

ing

themselves in a manner that demonstrates appropriate,

non-discr

inatory behaviours.

We do not accept unlawful discr

inat

ion

in our recruitment

or employment practices on any grounds includ

ing but not

lim

ited to: sex, race, colour, nat

ional

ity, ethn

ity, nat

ional or

ind

igenous or

in, d

isab

ity, age, marital or civ

il partner status,

pregnancy or maternity, sexual orientat

ion, gender

ident

ity,

expression or reassignment, HIV or AIDS status, parental

status, mil

itary and veterans status, ﬂex

ity of working

arrangements, relig

ion or bel

ief. We are committed to provide

equal opportunit

ies and fa

ir treatment in recruitment,

appraisals, pay and condit

ions, tra

ing, development,

succession planning, promotion, grievance/disc

ipl

inary

procedures and employment terminat

ion pract

ices, that

are inclus

ive and access

ible; and that do not directly or

ind

irectly d

iscr

inate. Recruitment, employment, train

ing,

development and promotion decis

ions are based on the sk

ills,

knowledge and behaviour required to perform the role to the

Group’s standards. Implied in all employment terms is the

commitment to equal pay for equal work. We also endeavour

to make reasonable workplace adjustments (includ

ing dur

ing

the hir

ing process) 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 aim to support them

with appropriate train

ing and workplace adjustments where

possible and to support their continued employment.

Health, Safety and Wellbeing

Our Health, Safety and Wellbeing (HSW) vis

ion

is to support

employee productiv

ity through a healthy and res

ient

workforce, and our miss

ion

is for employees to deliver every

day in a safe, secure and resil

ient way. Our corporate HSW

programme covers both mental and physical health and

wellbeing. The Group complies with both external regulatory

requirements and internal policy and standards for HSW

in all markets. It is Group policy to ensure that the more

stringent of the two requirements is always met, ensuring

our HSW practices meet or exceed the regulatory min

imum.

Compliance rates are reported at least biannually to each

country’s Management Team.

We follow the International Labour Organisat

ion (ILO) code

of practice on recording and notif

icat

ion of occupational

accidents and diseases, and guidance published by the

UK Health and Safety Executive (HSE), and ensure that

we meet all local Health and Safety (H&S) regulatory

reporting requirements. We record and report all work-

related illness and injuries, includ

ing from 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 an

H&S management system and local regulatory compliance

tracker across all countries to ensure a consistently high level

of H&S reporting and compliance for all our colleagues

and clients.

The Group sponsors medical and healthcare services for

all employees, except in markets where cover is provided

through State-mandated healthcare, which represent less

than 0.6 per cent of the Group’s employees.

Across the Group, support for employee mental wellbeing

is available. All employees have access to professional

counselling via our Employee Assistance Programme, as well

as to more proactive mental health support through our

holist

ic wellbe

ing app and wellbeing platform. Our global

Mental Health First Aid (MHFA) programme offers help to

anyone 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 more than 600 mental health ﬁrst aiders

in 51 markets, covering over 99 per cent of colleagues.

In 2023, we recorded two work-related fatalit

ies. A contractor

was tragically and fatally injured while crossing a road on her

way to work in Niger

ia. An employee was trag

ically and fatally

injured in a road accident in India. Ma

jor in

juries (per the UK

HSE deﬁnit

ion) decreased from 20 in 2022 to 16, with fractures

the most common type of major in

jury (75 per cent). Overall,

reported injuries increased by 28 per cent, with ‘slips/trips/falls’

and ‘transport/commuting’ remain

ing the most common

causes of injury. The overall increase in reported injuries was

a post COVID result, with all markets moving into the new

normal in 2023. Our injury rates remain aligned to, or better

than industry benchmarks. Hazards and near-miss reports

decreased 4 per cent between 2022 and 2023.

In 2023, we ran a back-to-basics programme to re-establish

commitment and responsib

ity in safety and security at all

levels, and address post pandemic and new normal practices.

All premises are inspected at least annually to ident

ify any

hazards, risks and inc

idences of non-compl

iance. HSW

communicat

ion

is provided through mandatory train

ing for

all new joiners, along w

ith annual refreshers. In 2023, we also

created a pathway in the Group’s learning platform using

engaging bite-sized video content to help educate colleagues

on their responsib

ies to keep the Group safe. The Group

celebrated World Day for Safety and Health at Work in April

with the theme ‘Safety is Everyone’s Responsib

ity’ in line with

the back-to-basics intent.

225

Standard Chartered

– Annual Report 2023

Directors’ report

One hundred and ﬁfty eight (158) build

ings, wh

ich covers more

than 90 per cent of our employees, 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. Four major head ofﬁce projects

also obtained the broader WELL certif

icat

ion.

Our regular Ofﬁce and Home Working Experience survey,

conducted across 49 markets, demonstrated continued high

scores around wellbeing with 80 per cent of respondents

agreeing that the workplace has a posit

ive

impact on their

wellbeing and 87 per cent saying they are able to be physically

active and mainta

in a healthy work–l

ife balance.

In 2023, all of the Group’s markets saw relaxation of COVID

restrict

ions w

ith business moving to new normal, and

continued uptake of the Group’s Future Workplace Now

(ﬂexible working) programme. An ergonomic online

assessment tool is available for employees to assess their

home working area for hazards, with a virtual assessment

of the ind

idual’s work environment, and a workplace

adjustment procedure available for employees who require

support based on personal circumstances. Our work injury

insurance covers all employees working from home.

Business travel returned to pre-pandemic levels in 2023, and

we put together a Travel Risk Management Framework

aligned to ISO 31030:2021 Travel Risk Management Standards

and supported by external travel risk and security advisers at

International SOS to support travellers.

Major customers

Our ﬁve largest customers together accounted for

2.1 per cent of our total operating income in the year

ended 31 December 2023.

Major suppliers

In 2023, USD $4.479 bill

ion was spent w

ith 11,563 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 2023 was with

474 suppliers. In addit

ion, 80 per cent of carbon em

iss

ions

were with 481 suppliers (excluding air travel suppliers). In 2023,

our ﬁve largest suppliers together accounted for 14.8 per cent

of total spend, with the largest ten amounting to 23 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 through which we aim to follow the

highest standards in terms of supplier 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.

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 58 and 59

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

polic

ies, standards and controls to support these objectives

in alignment with our Conduct Risk Framework. This

framework covers sales practices, client communicat

ions,

appropriateness 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

and reﬁne them to keep them relevant to the changing needs

of clients and to meet regulatory obligat

ions.

We have processes and guidel

ines spec

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 131.

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 and

Ethics (the Code) relating to the lawful and ethical conduct

of business and this is supported by the Group’s valued

behaviours. This has been communicated to all directors

and employees, all of whom are expected to observe high

standards of integr

ity and fa

ir dealing in relation to customers,

employees and regulators in the communit

ies

in which the

Group operates. Directors and employees are asked to

recommit to the Code annually, and 99.75 per cent have

completed the 2023 recommitment. All Board members

have recommitted to the Code.

Community engagement

We collaborate with local partners to support social and

economic development in communit

ies across our footpr

int.

We aim to create more inclus

ive econom

ies by sharing our

skills and expertise and supporting community in

iat

ives that

transform lives.

Established in 2019, Futuremakers by Standard Chartered

is our global youth economic empowerment in

iat

ive,

helping disadvantaged young people learn, earn and grow.

We are committed to improv

ing econom

ic partic

ipat

ion

and equitable access to ﬁnance for young women and

microbus

inesses. For more

informat

ion on Futuremakers,

as well as our employee volunteering and community

expenditure, please see pages 97 and 98.

226

Standard Chartered

– Annual Report 2023

Directors’ report

Other disclosures

ESG reporting guide

Compliance with List

ing Rules

We comply with the requirements of the ESG Reporting Guide

contained in Appendix C2 to The Rules Governing the List

ing

of Securit

ies on the Stock Exchange of Hong Kong L

ited.

With respect to the key performance ind

icators (KPIs) noted

in Part C: “Comply or explain” provis

ions, the Group does not

report on KPI A1.3 and KPI A1.6 related to the production and

handling of hazardous waste; KPI A2.5 related to packaging

materials used for ﬁn

ished products; KPI B2.2 related lost

days due to work injury; KPI B6.1 total products recalled due

to safety and health reasons, and KPI B6.4 product recall

procedures. As an ofﬁce-based ﬁnancial serv

ices provider

these issues were not deemed material. For further

informat

ion related to Aspect B4 Labour Standards and

B5 Supply Chain Management, please also refer to the

Group’s annual Modern Slavery Statement.

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.

Our TCFD disclosures also meet the new climate-related

ﬁnancial d

isclosure requirements contained in section 414CB

of the Companies Act 2006. We have also taken into account

the implementat

ion gu

idance included in the TCFD 2021

Annex. Further informat

ion on net zero progress and ﬁnanced

emiss

ions

is available on pages 104 to 117. For a detailed

TCFD summary and alignment index referencing relevant

disclosures see page 511 to 516.

Modern Slavery Act

The Group publishes a Modern Slavery Statement annually.

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 (workforce), ﬁnanc

ing and

supply chain. The Group publishes a Statement under the

UK Modern Slavery Act 2015 for the ﬁnancial year end

ing

31 December 2023.

See more via

sc.com/modernslavery

Sustainable ﬁnance taxonomies

Standard Chartered continues to assess the applicab

ity of

sustainable ﬁnance taxonomies across the Group’s footprint.

Reporting has commenced in several markets in Asia in

accordance with local sustainable ﬁnance taxonomy

regulatory requirements. An assessment on the applicab

ity

and implementat

ion t

imel

ine of the EU Corporate

Sustainab

ity Reporting Direct

ive (CSRD) for Standard

Chartered Bank AG and Standard Chartered PLC has also

been undertaken. Preparatory work has commenced to

embed EU Taxonomy classif

icat

ions and metrics. We will

continue to monitor expected policy developments from the

UK and 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.

The Group is developing scalable dig

ital capab

ity to

facil

itate report

ing against taxonomies being developed

across the jurisd

ict

ions

in which the Group operates. The

solution adopts a rules-based approach to assess whether a

client and any client activ

ity w

ith the Group is in-scope and

elig

ible for taxonomy report

ing and will facil

itate broader

implementat

ion of taxonomy compl

iance by relevant Group

entit

ies as and when compl

iance implementat

ion w

ill be

required. Taxonomy data availab

ity and quality will

continue to evolve via client engagement, data vendors

and partnerships.

The Group will consider applicable taxonomy alignment in our

business decis

ions,

includ

ing at a cl

ient and transaction level,

as well as more broadly at a sector strategy level. Given our

footprint across Europe and the UK, Asia, Africa and the

Middle East, we need to continually assess taxonomy-

alignment requirements based on informat

ion ava

ilable

from clients and through our due dil

igence processes.

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 the actions we take to reduce energy

and water usage and non-hazardous waste generated in our

operations in the Sustainab

ity Review on page 106 and in the

Supplementary sustainab

ity informat

ion sect

ion on pages

505 and 506.

Our reporting methodology is based on the ‘The Greenhouse

Gas Protocol – A Corporate Accounting and Reporting

Standard (Revised Edit

ion)’. We have adopted the operat

ional

control approach to deﬁne our reporting boundary for GHG

Scope 1 and 2 emiss

ions. For Scope 3 ﬁnanced em

iss

ions,

boundaries are noted for each high-emitt

ing sector

in the

‘Our approach to measuring ﬁnanced emiss

ions’ table

in the

Sustainab

ity Review.

Information on the princ

iples and methodolog

ies used to

calculate the GHG emiss

ions of the Group can be found

in our Environmental Reporting Criter

ia document at

sc.com/environmentcriter

ia.

Reporting period, boundary and scope

We report on Sustainab

ity and Environmental, Social and

Governance (ESG) matters throughout this Annual Report,

in particular in the following sections: (i) Strategic report,

Sustainab

ity overview on pages 66 to 79; (i

i) Susta

inab

ity

review on pages 92 to 133; (i

i) Risk review on pages 298 to 313;

and (iv) in the Supplementary sustainab

ity informat

ion

section on pages 504 to 516.

The Sustainab

ity and ESG informat

ion

in this Annual report

was compiled for the ﬁnanc

ial year 1 January to 31 December

2023, unless otherwise specif

ied.

The reporting period of operational environmental

performance ind

icators

is from 1 October 2022 to

30 September 2023. This allows sufﬁc

ient t

ime for

independent third-party assurance to be completed prior to

the publicat

ion of the Group’s Annual Report. Accord

ingly,

the operating income used for associated environmental

intens

ity metr

ics corresponds to the same time period,

rather than the calendar year used in ﬁnanc

ial report

ing.

There was no sign

iﬁcant change

in the boundary and scope

of this Annual Report from that of Standard Chartered PLC

Annual Report 2022, published on 16 February 2023.

227

Standard Chartered

– Annual Report 2023

Directors’ report

Assurance

Our Scope 1 and 2 emiss

ions are assured by an

independent company, Global Documentation, against the requirements of

ISO 14064.

The Group as disclosed GHG emiss

ions and energy consumpt

ion data as required by the Large and Medium-sized Companies

and Groups (Accounts and Reports) Regulations 2008.

Units

2023

2022

2021

Reporting coverage of data

Annual operating income from 1 October to 30 September

$ mill

ion

17,414

15,863

14,541

Net internal area of occupied property

880,515

946,234

998,571

GHG emiss

ions

Scope 1 & 2:

Scope 1 emiss

ions

tCO

8,488¹

2,071

2,902

Scope 2 emiss

ions (locat

ion-based)²

tCO

85,741

89,410

96,256

Scope 2 emiss

ions (market-based)

tCO

26,246

47,363

82,761

Scope 1 & 2 emiss

ions (market-based)

tCO

34,734

49,434

85,663

Scope 1 & 2 emiss

ions (UK and offshore area only)

tCO

248

–

GHG emiss

ions – Intens

ity:

Total Scope 1 &2 emiss

ions (market-based)/

intens

ity

tCO

e/$ mill

ion

Environmental resource efﬁc

iency

Energy

Indirect non-renewable energy consumption

GWh

142

Indirect renewable energy consumption

GWh

Direct non-renewable energy consumption

GWh

Direct renewable energy consumption

GWh

Energy consumption

GWh

173

177

183

Energy consumption (UK and offshore area only)

GWh

Scope 1 ﬁgure includes fugit

ive em

iss

ions for the ﬁrst t

ime in 2023 (2023: 5,266 tCO

e). Prior year data was not available for fugit

ive em

iss

ions. For more

informat

ion

on the methodology and assumptions used to calculate GHG emiss

ions, please refer to the Env

ironmental Reporting Criter

ia at

sc.com/sustainab

ityhub

Location based emiss

ions have been restated for pr

ior comparative periods. Emiss

ions erroneously

included renewable energy certif

icates and power purchase

agreements. Other scope 2 reductions outside clean power are attributed to footprint reduction and efﬁc

iency ga

ins.

Market based emiss

ions have decreased from 2022 to 2023 due to footpr

int reduction, efﬁc

iency ga

ins and the purchase of addit

ional energy attr

ibut

ion

certif

icates by the Group.

Further detail on our environment performance can be found on

pages 104 to 117;

associated assumptions and methodologies in our reporting

criter

ia document at

sc.com/environmentalcr

iter

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 517. 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 2024 AGM will be held at 11:00am (UK time) (6:00pm

Hong Kong time) on 10 May 2024. Further details regarding

the format, location and business to be transacted will be

disclosed with

in the 2024 Not

ice of AGM.

Our 2023 AGM was held on 3 May 2023 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.

228

Standard Chartered

– Annual Report 2023

Directors’ report

Other disclosures

Non-audit services

The Group’s non-audit services policy (the Policy) was

reviewed and approved by the Audit Committee on

23 October 2023. The Policy is based on an overrid

ing pr

inc

iple

that, to avoid any actual or perceived conﬂicts of interest, the

Group’s auditor should only be used when there is evidence

that there is no alternative in terms of quality and when there

is no conﬂict with their duties as auditor. 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

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 val

idat

ing

informat

ion, wh

ich management

then util

ises

in the operation of the business

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

preserving 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-aud

it services

provided by EY to under 70 per cent of the average Group

audit fee from the previous three consecutive ﬁnanc

ial years

(which 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 2023, 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

categories of the types of non-audit services provided by EY

are given in Note 38 to the ﬁnanc

ial 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 2024 AGM. A resolution to

re-appoint EY as auditor was proposed at the Company’s

2023 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

23 February 2024

Standard Chartered PLC

Registered No. 966425

229

Standard Chartered

– Annual Report 2023

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 g

ive

a true and fair view of the state of affairs of the Group and

Company and of their proﬁt or loss for that period.

In preparing each of the Group and Company ﬁnanc

ial

statements, the directors are required to:

•

Select suitable accounting polic

ies and then apply them

consistently;

•

Make judgements and estimates that are reasonable,

relevant and reliable;

•

State whether they have been prepared in accordance

with UK-adopted International Accounting Standards and

International Financ

ial Report

ing Standards as adopted by

the European Union;

•

Assess the Group and the Company’s abil

ity to cont

inue as

a going concern, disclos

ing, as appl

icable, matters related

to going concern; and

•

Use the going concern basis of accounting unless they

either intend to liqu

idate the Group or the Company or to

cease operations, or have no realist

ic alternat

ive but to

do so

The directors are responsible for keeping adequate

accounting records that are sufﬁc

ient to show and expla

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

Diego De Giorg

Group Chief Financ

ial Ofﬁcer

23 February 2024

Strategic report

Section heading

230

Standard Chartered

– Annual Report 2023

Risk review and

Capital review

234

Risk proﬁle

298

Climate risk

314

Enterprise Risk Management Framework

320

Princ

ipal r

isks

338

Capital review

Risk review



Thousands

run our 2023

marathons



In 2023, more than 160,000 elite

runners, passionate amateurs and

ﬁrst-timers completed our sponsored

marathons and races. We sponsor

marathons in Singapore, Hong Kong,

Taipe

i, Na

irob

i, Kuala Lumpur, Stanley

(Falkland Islands) and Jersey, as well as

a 10km run in Shanghai and a 5km run

in London.

These events champion a range

of charitable causes, includ

ing

underpriv

ileged commun

ies,

healthcare, education, and the

environment. We sponsored our

ﬁrst marathon in 1997 in Hong Kong

and will introduce our ﬁrst heritage

marathon in Vietnam in 2024 –

our 10th annual race.

Read more at

sc.com/marathons

231

Standard Chartered

– Annual Report 2023

Risk review and Capital review

232

Standard Chartered

– Annual Report 2023

Risk review

Index

Risk review and Capital review

Risk Index

Annual

Report and

Accounts

Risk proﬁle

Credit risk

234

Basis of preparation

234

Credit risk overview

234

Impairment model

234

Staging of ﬁnanc

ial

instruments

234

IFRS 9 expected credit loss princ

iples and approaches

234

Summary of Performance in 2023

235

Maximum exposure to credit risk

237

Analysis of ﬁnanc

ial

instrument by stage

238

Credit quality analysis

240

•

Credit quality by client segment

240

•

Credit quality by geographic region

248

Movement in gross exposures and credit impa

irment for loans and advances, debt secur

ies,

undrawn commitments and ﬁnanc

ial guarantees

248

Movement of debt securit

ies, alternat

ive tier one and other elig

ible b

ills

251

Analysis of Stage 2 balances

256

Credit impa

irment charge

257

Problem credit management and provis

ion

ing

257

•

Forborne and other modif

ied loans by cl

ient segment

257

•

Forborne and other modif

ied loans by reg

ion

258

•

Credit-impa

ired (stage 3) loans and advances by geograph

ic region

258

Credit risk mit

igat

ion

258

• Collateral

259

•

Collateral held on loans and advances

259

•

Collateral – Corporate, Commercial & Institut

ional Bank

ing

259

•

Collateral – Consumer, Private & Business Banking

260

•

Mortgage loan-to-value ratios by geography

261

•

Collateral and other credit enhancements possessed or called upon

261

•

Other Credit risk mit

igat

ion

262

Other portfolio analysis

262

•

Maturity analysis of loans and advances by client segment

262

•

Credit quality by industry

263

•

Industry and Retail Products analysis of loans and advances by geographic region

264

•

Vulnerable, cyclical and high carbon sectors

265

•

China commeric

ial real estate

271

•

Debt securit

ies and other el

ible b

ills

272

IFRS 9 expected credit loss methodology

273

Traded risk

286

Market risk movements

286

Counterparty Credit risk

289

Derivat

ive ﬁnancial

instruments Credit risk mit

igat

ion

289

Liqu

ity and Funding risk

290

Liqu

ity & Funding risk metrics

290

Liqu

ity analysis of the Group’s balance sheet

293

Interest Rate risk in the Banking Book

296

Operational and Technology risk

297

Operational and Technology risk proﬁle

297

Other princ

ipal r

isks

297

233

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Risk Index

Annual

Report and

Accounts

Climate risk

Managing ﬁnanc

ial and non-ﬁnancial r

isks from climate change

298

Assessing the resil

ience of our strategy us

ing scenario analysis

309

Risk management approach

Enterprise Risk Management Framework

314

Princ

ipal R

isks

320

Capital

Capital summary

338

• Capital ratio

338

• Capital base

339

Movement in total capital

340

Risk-weighted asset

341

Leverage ratio

343

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 234) to the end of other princ

ipal

risks in the same section (page 297); 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 339 and 340).

234

Standard Chartered

– Annual Report 2023

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

Supplementary Information

Page

Approach for determin

ing expected cred

it losses

IFRS 9 methodology

Determin

ing l

ifet

ime expected cred

it loss for revolving

products

Post model adjustments

273

280

Incorporation of forward-looking informat

ion

Incorporation of forward-looking informat

ion

Forecast of key macroeconomic variables underlying

the expected credit loss calculation and the impact of

non-linear

ity

Judgemental adjustments and sensit

ity to macroeconomic

variables

275

279

Sign

iﬁcant

increase in credit risk (SICR)

Quantitat

ive and qual

itat

ive cr

iter

282

Assessment of credit-impa

ired ﬁnancial assets

Consumer and Business Banking clients

CCIB and Private Banking clients

Write-offs

284

Transfers between stages

Movement in loan exposures and expected credit losses

248

Modif

ied ﬁnancial assets

Forbearance and other modif

ied loans

257

Governance and applicat

ion of expert cred

it judgement

in respect of expected credit losses

284

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

235

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Summary of performance in 2023

Loans and Advances

94 per cent (31 December 2022: 93 per cent) of the Group’s

gross loans and advances to customers remain in stage 1 at

$273.7 bill

ion (31 December 2022: $295.2 b

ill

ion), reﬂect

ing our

continued focus on high-quality orig

inat

ion.

Stage 1 loans decreased by $21.5 bill

ion to $274 b

ill

ion

(31 December 2022: $295 bill

ion). For Corporate, Commerc

ial

and Institut

ional Bank

ing (CCIB), stage 1 balances increased

to 90 per cent of the gross loans and advances to customers

(31 December 2022: 88 per cent), while there was an overall

decrease due to reductions in the ﬁnanc

ing,

insurance and

non-banking sectors. Stage 1 balances for Consumer, Private

and Business Banking (CPBB) decreased by $5.6 bill

ion, ma

inly

driven by a slowdown in mortgages sales in Korea and Hong

Kong, which was partly offset by new Credit Cards and

Personal Loans businesses in Asia. Stage 1 balances for Central

and other items decreased by $10.8 bill

ion due to exposure

reductions to a Central Bank in the Asia region. Stage 1 cover

ratio remained stable at 0.2 per cent (31 December 2022:

0.2 per cent).

Stage 2 gross loans and advances to customers decreased by

$1.8 bill

ion to $11.2 b

ill

ion (31 December 2022: $13 b

ill

ion). Th

was due to CCIB exposure reductions and transfers to stage 3

in the Commercial Real Estate (CRE) sector, and exposure

reductions in the Transport sector. This was partially offset by

an increase in CPBB Korea and Hong Kong Mortgage portfolio

and Singapore Private Banking. Higher risk exposure net

increase of $1 bill

ion from Central and other

items, was due

to a short-term exposure to a Central Bank in the Africa and

Middle East region, which was partly offset by exposure

reductions and transfers to stage 3 in CCIB. Stage 2 cover ratio

increased by 0.3 per cent to 3.7 per cent (31 December 2022:

3.4 per cent). The increase was driven by Ventures due to

increased delinquenc

ies and portfol

io growth mainly in Mox

Bank. The increase in CCIB cover ratio was due to a decrease

in expected credit losses from exposure reductions and

transfers to Stage 3. The decrease in CPBB stage 2 cover ratio

was mainly due to an increase in secured portfolio exposures

with relatively lower Loss Given Default.

Stage 3 loans decreased by $0.6 bill

ion to $7.2 b

ill

ion

(31 December 2022: $7.8 bill

ion) as a result of repayments,

debt sales and write-offs in CCIB. Although the portfolio

reduced year on year, China CRE clients were the major inﬂows

this year. The CCIB stage 3 cover ratio increased by 4.5 per

cent to 64 per cent as a result of repayments and incremental

provis

ions taken (31 December 2022: 60 per cent). The CPBB

stage 3 cover ratio reduced by 2.2 per cent to 51 per cent

(31 December 2022: 53 per cent), due to a small exposure

increase mainly in Secured wealth products. Ventures stage 3

exposures increased by $11 mill

ion to $12 m

ill

ion (31 December

2022: $1 mill

ion). The cover rat

io after collateral remained

stable at 76 per cent (31 December 2022: 76 per cent)

Further details can be found in the ‘Analysis of ﬁnanc

ial

instruments by

stage’ section in

pages 238 and 239

; ‘Credit quality by client segment’

section in

pages 240 to 247

; ‘Credit quality by industry’ section in

pages

263 and 264

. Stage 3 cover ratio is also disclosed in the ‘Stage 3 cover

ratio’ and ‘Credit-impa

ired (stage 3) loans and advances by geograph

region’ sections in

page 258

Maximum exposure

The Group’s on-balance sheet maximum exposure to Credit

Risk increased by $8.6 bill

ion to $798 b

ill

ion (31 December 2022:

$790 bill

ion). Cash at Central bank

increased by $11.6 bill

ion

to $70 bill

ion (31 December 2022: $58 b

ill

ion) due to depos

its

placed with the US Federal Reserve. Loans to banks also

increased by $5 bill

ion to $45 b

ill

ion (31 December 2022:

$40 bill

ion). Fa

ir Value through proﬁt and loss increased by

$42 bill

ion to $144 b

ill

ion (31 December 2022: $103 b

ill

ion),

largely due to an increase in Debt Securit

ies and Reverse

Repos. This was partly offset by a $13 bill

ion decrease

Derivat

ive ﬁnancial

instruments, and a $23.7 bill

ion

decrease in loans and advances to customers to $287 bill

ion

(31 December 2022: $311 bill

ion). Out of the $23.7 b

ill

ion

decrease in loans and advances to customers, a $10.5 bill

ion

reduction relates to reverse repos, and a $11 bill

ion reduct

ion

relates to Amortised Cost Debt Securit

ies, as part of the

Group’s liqu

ity management actions. Off-balance

sheet instruments increased by $28 bill

ion to $257 b

ill

ion

(31 December 2022: $229 bill

ion), wh

ich was driven by

new businesses.

Further details can be found in the ‘Maximum exposure to Credit Risk’

section in

page 237

Analysis of stage 2

The key SICR driver that caused exposures to be classif

ied

as stage 2 remains increase in probabil

ity of default. The

proportion of exposures in CCIB in stage 2 due to increased PD

has decreased partly due to an increase in clients placed on

non-purely precautionary early alert that have not breached

PD thresholds. In CPBB, the proportion of loans in stage 2 loans

from 30 days past due trigger decreased by 2 per cent to

6 per cent (31 December 2022: 8 per cent). ‘Others’ category

includes exposures where orig

inat

ion data is incomplete and

the exposures are getting allocated into stage 2.

Further details can be found in the ‘Analysis of stage 2 balances’ section

page 256

Credit impa

irment charges

The Group’s ongoing credit impa

irment was a net charge of

$508 mill

ion (31 December 2022: $836 m

ill

ion).

For CCIB, stage 1 and 2 impa

irment charges decreased by

$137 mill

ion to $11 m

ill

ion (31 December 2022: $148 m

ill

ion), as

2022 included Pakistan Sovereign downgrades and China CRE

overlays, which was partly offset by a $102 mill

ion full release

of COVID-19 overlay. In 2023, $11 mill

ion

impa

irment charges

were due to portfolio movements, includ

ing

impa

irments on

Pakistan Sovereign clients, and China CRE overlays, which

was partly offset by a $13 mill

ion net release from model and

methodology updates.

CCIB stage 3 impa

irment charges decreased by $165 m

ill

ion

to $112 mill

ion (31 December 2022: $277 m

ill

ion) largely due to

higher releases and lower impa

irments on Ch

ina CRE clients.

In 2023, $112 mill

ion

impa

irment charges were largely dr

iven

by impa

irments on Ch

ina CRE clients, and releases across

multiple clients.

236

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

For CPBB, stage 1 and 2 impa

irment charges decreased by

$22 mill

ion to $129 m

ill

ion (31 December 2022: $151 m

ill

ion).

In 2023, $129 mill

ion

impa

irment charges were from normal

ﬂows, largely from unsecured portfolios in China, Hong Kong,

India and Singapore. This was partially offset by $21 mill

ion

of COVID-19 overlay releases, includ

ing the full release of

$16 mill

ion rema

ing COVID-19 overlays

in Bahrain.

CPBB stage 3 impa

irment charges

increased by $114 mill

ion to

$225 mill

ion (31 December 2022: $111 m

ill

ion). The

increase has

been driven mainly by the unsecured business due to a mix of

higher bankruptcies in Singapore, Hong Kong and Korea, and

portfolio growth in dig

ital partnersh

ips.

For Ventures, stage 1 and 2 impa

irment charges

increased

by $29 mill

ion to $42 m

ill

ion (31 December 2022: $13 m

ill

ion),

mainly due to portfolio growth in Mox Bank.

Ventures stage 3 impa

irment charges

increased by $40 mill

ion

to $43 mill

ion (31 December 2022: $3 m

ill

ion), ma

inly due to

portfolio growth in Mox Bank, and higher bankruptcies.

Mit

igat

ing actions have been taken to address these.

For Central and other items, stage 1 and 2 impa

irment charges

decreased by $139 mill

ion due to a net release of $44 m

ill

ion

(31 December 2022: $95 mill

ion) as 2022

included Pakistan

Sovereign CG12 downgrades. In 2023, $44 mill

ion net release

of impa

irment charges were dr

iven by exposure reductions

and shortening tenors of balances to the Pakistan

Government. This was partly offset by a $8 mill

ion charge

due to Kenya Sovereign downgrade.

Central and other items stage 3 impa

irment charges

decreased by $28 mill

ion to $10 m

ill

ion (31 December 2022:

$38 mill

ion) as Sr

i Lanka and Ghana exposures were

downgraded to Stage 3 in 2022.

Further details can be found in the ‘Credit impa

irment charge’ sect

ion

page 257

Vulnerable and Cyclical Sectors

Total net on-balance sheet exposure to vulnerable and

cyclical sectors decreased by $3 bill

ion to $29 b

ill

ion

(31 December 2022: $32 bill

ion) largely due to the ex

it of the

Aviat

ion bus

iness and lower drawn balances particularly in

the CRE sector, where on-balance sheet exposure decreased

by $1.8 bill

ion to $14.5 b

ill

ion (31 December 2022: $16.3 b

ill

ion).

Stage 2 vulnerable and cyclical sector loans decreased by

$2.3 bill

ion to $3.3 b

ill

ion (31 December 2022: $5.6 b

ill

ion),

primar

ily dr

iven by a $1.4 bill

ion exposure reduct

ion in the

CRE sector and transfers to Stage 3. Stage 3 vulnerable and

cyclical sector loans decreased by $0.5 bill

ion to $3.6 b

ill

ion

(31 December 2022: $4 bill

ion), ma

inly due to the Oil and Gas,

and Commodity sectors, which was partly offset by new

inﬂows into the CRE sector.

The Group provides loans to CRE counterparties of which

$9.6 bill

ion

is to counterparties in the CCIB segment where

the source of repayment is substantially derived from rental

or sale of real estate and is secured by real estate collateral.

The remain

ing CRE loans compr

ise working capital loans to

real estate corporates, loans with non-property collateral,

unsecured loans and loans to real estate entit

ies of d

ivers

iﬁed

conglomerates. The average LTV ratio of the performing book

CRE portfolio has increased to 52 per cent (31 December 2022:

49 per cent). The proportion of loans with an LTV greater than

80 per cent has increased to 3 per cent (31 December 2022:

1 per cent).

Further details can be found in the ‘Vulnerable, cyclical and high carbon

sectors’ section in

pages 265 to 270

China commercial real estate

Total exposure to China CRE decreased by $0.8 bill

ion to

$2.6 bill

ion (31 December 2022: $3.4 b

ill

ion) ma

inly from

exposure reductions. The proportion of credit impa

ired

exposures increased to 58 per cent (31 December 2022:

33 per cent) as market condit

ions cont

inued to deteriorate

during the period, and provis

ion coverage

increased to

72 per cent (31 December 2022: 56 per cent) reﬂecting

increased provis

ion charges dur

ing the period. The proportion

of the loan book rated as Higher Risk decreased by 8 per cent

to 0.3 per cent (31 December 2022: 8.4 per cent) primar

ily due

to downgrades in the period.

The Group continues to hold a judgemental management

overlay, which decreased by $32 mill

ion to $141 m

ill

ion

(31 December 2022: $173 mill

ion), reﬂect

ing changes in

the portfolio and downgrades to Stage 3.

The Group is further ind

irectly exposed to Ch

ina CRE through

its associate investment in China Bohai Bank.

Further details can be found in the ‘China commercial real estate’ section

page 271

Management adjustments

Given the evolving nature of the risks in the China CRE sector,

a management overlay of $141 mill

ion (31 December 2022:

$173 mill

ion) has been taken by est

imat

ing the

impact of

further deteriorat

ion to exposures

in this sector. Overlays of

$5 mill

ion (31 December 2022: $16 m

ill

ion) have been appl

ied

in CPBB to capture macroeconomic environment challenges

caused by sovereign defaults or heightened sovereign risk

and an overlay of $17 mill

ion (31 December 2022: n

il) was

applied in Central and other items, due to a temporary

market dislocat

ion

in the Africa and Middle East.

The remain

ing COVID-19 overlay

in CPBB of $21 mill

ion that

was held at 31 December 2022 has been fully released in 2023.

The stage 3 overlay in CCIB of $9 mill

ion that was held at

31 December 2022, following the Sri Lanka Sovereign default

was also fully released in 2023.

Further details can be found in the ‘Judgemental management overlays’

section in

page 280

. Model performance and judgemental post model

adjustments are also disclosed in the ‘Model performance post model

adjustments’ section in

page 275

237

Standard Chartered

– Annual Report 2023

Risk review and Capital review

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 2023, before and after taking into account any collateral held or other credit risk mit

igat

ion.

Further details can be found in the ‘Summary of Performance in 2023’ in

pages 235 and 236

2023

2022

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

Col

ateral

$mill

ion

Master

netting

agreements

$mill

ion

On-balance sheet

Cash and balances at central banks

69,905

58,263

Loans and advances to banks

44,977

1,738

43,239

39,519

978

38,541

of which – reverse repurchase

agreements and other sim

ilar

secured lending

1,738

–

978

–

Loans and advances to customers

286,975

118,492

168,483

310,647

135,194

175,453

of which – reverse repurchase

agreements and other sim

ilar

secured lending

13,996

–

24,498

–

Investment securit

ies – Debt secur

ies

and other elig

ible b

ills

160,263

171,640

Fair value through proﬁt or loss

3, 7

144,276

81,847

–

62,429

102,575

64,491

–

38,084

Loans and advances to banks

2,265

976

Loans and advances to customers

7,212

6,546

Reverse repurchase agreements and

other sim

ilar lend

ing

81,847

–

64,491

–

Investment securit

ies – Debt secur

ies

and other elig

ible b

ills

52,952

30,562

Derivat

ive ﬁnancial

instruments

4, 7

50,434

8,440

39,293

2,701

63,717

9,206

50,133

4,378

Accrued income

2,673

2,706

Assets held for sale

701

1,388

Other assets

38,140

39,295

Total balance sheet

798,344

210,517

39,293

548,534

789,750

209,869

50,133

529,748

Off-balance sheet

Undrawn Commitments

182,390

2,940

179,450

168,668

2,951

165,717

Financ

ial Guarantees and

other equivalents

74,414

2,590

71,824

60,410

2,592

57,818

Total off-balance sheet

256,804

5,530

–

251,274

229,078

5,543

–

223,535

Total

1,055,148

216,047

39,293

799,808

1,018,828

215,412

50,133

753,283

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 259)

2. Excludes equity and other investments of $992 mill

ion (31 December 2022: $808 m

ill

ion). Further deta

ils are set out in Note 13 ﬁnanc

ial

instruments

3. Excludes equity and other investments of $2,940 mill

ion (31 December 2022: $3,230 m

ill

ion). Further deta

ils are set out in Note 13 ﬁnanc

ial

instruments

The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the counterparty through netting the sum

of the posit

ive and negat

ive mark-to-market values of applicable derivat

ive transact

ions

5. Other assets include Hong Kong certif

icates of

indebtedness, cash collateral, and acceptances, in addit

ion to unsettled trades and other ﬁnancial assets

6. Excludes ECL allowances which are reported under Provis

ions for l

iab

ies and charges

7. Collateral capped at maximum exposure (over-collateralised)

8. Adjusted for over-collateralisat

ion, wh

ich has been determined with reference to the drawn and undrawn component as this best reﬂects the effect on the

amount aris

ing from expected cred

it losses

9. The amount is after ECL. Further details are set out in Note 21 Assets held for sale and associated liab

ies

238

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Analysis of ﬁnanc

ial

instruments by stage (audited)

The table below presents the gross and credit impa

irment balances by stage for the Group’s amort

ised cost and FVOCI

ﬁnancial

instruments as at 31 December 2023.

Further details can be found in the ‘Summary of Performance in 2023’ in

pages 235 and 236

2023

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

69,313

–

69,313

207

(7)

200

404

(12)

392

69,924

(19)

69,905

Loans and

advances

to banks

(amortised cost)

44,384

(8)

44,376

540

(10)

530

(6)

45,001

(24)

44,977

Loans and

advances to

customers

(amortised cost)

273,692

(430) 273,262

11,225

(420)

10,805

7,228

(4,320)

2,908

292,145

(5,170) 286,975

Debt securit

ies

and other

elig

ible b

ills

158,314

(26)

1,860

(34)

164

(61)

160,338

(121)

Amortised cost

56,787

(16)

56,771

103

(2)

101

120

(57)

57,010

(75)

56,935

FVOCI

101,527

(10)

1,757

(32)

(4)

103,328

(46)

–

Accrued income

(amortised cost)

2,673

–

2,673

–

2,673

–

2,673

Assets held

for sale

661

(33)

628

(4)

–

738

(37)

701

Other assets

38,139

–

38,139

–

(3)

38,143

(3)

38,140

Undrawn

commitments

176,654

(52)

5,733

(39)

–

182,390

(91)

Financ

ial

guarantees,

trade credits

and irrevocable

letter of credits

70,832

(10)

2,910

(14)

672

(112)

74,414

(136)

Total

834,662

(559)

22,551

(528)

8,553

(4,514)

865,766

(5,601)

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 $80 mill

ion (31 December 2022: $28 m

ill

ion) or

inated cred

it-impa

ired debt secur

ies w

ith impa

irment of $14 m

ill

ion (31 December 2022:

$13 mill

ion)

239

Standard Chartered

– Annual Report 2023

Risk review and Capital review

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

–

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

letter of credits

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 or

inated cred

it-impa

ired debt secur

ies w

ith impa

irment of $13 m

ill

ion

240

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

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

Internal grade mapping

Strong

1A to 5B

AAA/AA+ to BBB-/

BB+²

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+³

0.426 to 15.75

Class II and Class III

Loans past due till

29 days

Higher risk

Grade 12

CCC+ to C⁴

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

Banks’ rating: AAA/AA+ to BB+. Sovereigns’ rating: AAA to BB+

Banks’ rating: BB to “CCC+ to C”. Sovereigns’ rating: BB+/BB to B-/CCC+

4 Banks’ rating: CCC+ to C. Sovereigns’ rating: CCC+ to “CCC+ to C”

Medium enterprise clients with

in Bus

iness Banking are managed using the same internal credit grades as CCIB

The table below 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.

Further details can be found in the ‘Summary of Performance in 2023’ in

pages 235 and 236

241

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Loans and advances by client segment (audited)

Amortised cost

2023

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

44,384

120,886

123,486

1,015

28,305

273,692

176,654

70,832

– Strong

35,284

84,248

118,193

1,000

27,967

231,408

162,643

47,885

– Satisfactory

9,100

36,638

5,293

338

42,284

14,011

22,947

Stage 2

540

7,902

2,304

965

11,225

5,733

2,910

– Strong

1,145

1,761

–

2,940

1,090

830

– Satisfactory

212

5,840

206

–

6,053

4,169

1,823

– Higher risk

273

917

337

965

2,232

474

257

Of which (stage 2):

– Less than 30 days past due

–

206

–

291

–

– More than 30 days past due

–

337

–

360

–

Stage 3, credit-impa

ired

ﬁnancial assets

5,508

1,484

224

7,228

672

Gross balance¹

45,001

134,296

127,274

1,081

29,494

292,145

182,390

74,414

Stage 1

(8)

(101)

(314)

(15)

–

(430)

(52)

(10)

– Strong

(3)

(34)

(234)

(14)

–

(282)

(31)

(2)

– Satisfactory

(5)

(67)

(80)

(1)

–

(148)

(21)

(8)

Stage 2

(10)

(257)

(141)

(21)

(1)

(420)

(39)

(14)

– Strong

(1)

(18)

(65)

(14)

–

(97)

(5)

–

– Satisfactory

(2)

(179)

(22)

(3)

–

(204)

(23)

(7)

– Higher risk

(7)

(60)

(54)

(4)

(1)

(119)

(11)

(7)

Of which (stage 2):

– Less than 30 days past due

–

(2)

(22)

(3)

–

(27)

–

– More than 30 days past due

–

(1)

(54)

(4)

–

(59)

–

Stage 3, credit-impa

ired

ﬁnancial assets

(6)

(3,533)

(760)

(12)

(15)

(4,320)

–

(112)

Total credit impa

irment

(24)

(3,891)

(1,215)

(48)

(16)

(5,170)

(91)

(136)

Net carrying value

44,977

130,405

126,059

1,033

29,478

286,975

Stage 1

0.0%

0.1%

0.3%

1.5%

0.0%

0.2%

0.0%

– Strong

0.0%

0.2%

1.4%

0.0%

0.1%

0.0%

– Satisfactory

0.1%

0.2%

1.5%

6.7%

0.0%

0.4%

0.1%

0.0%

Stage 2

1.9%

3.3%

6.1%

38.9%

0.1%

3.7%

0.7%

0.5%

– Strong

1.8%

1.6%

3.7%

41.2%

0.0%

3.3%

0.5%

0.0%

– Satisfactory

0.9%

3.1%

10.7%

42.9%

0.0%

3.4%

0.6%

0.4%

– Higher risk

2.6%

6.5%

16.0%

30.8%

0.1%

5.3%

2.3%

2.7%

Of which (stage 2):

– Less than 30 days past due

0.0%

2.6%

10.7%

42.9%

0.0%

9.3%

0.0%

– More than 30 days past due

0.0%

10.0%

16.0%

30.8%

0.0%

16.4%

0.0%

Stage 3, credit-impa

ired

ﬁnancial assets (S3)

7.8%

64.1%

51.2%

100.0%

6.7%

59.8%

0.0%

16.7%

Cover ratio

0.1%

2.9%

1.0%

4.4%

0.1%

1.8%

0.0%

0.2%

Fair value through proﬁt or loss

Performing

32,813

58,465

–

58,478

–

– Strong

28,402

38,014

–

38,027

–

– Satisfactory

4,411

20,388

–

20,388

–

– Higher risk

–

Defaulted (CG13-14)

–

Gross balance (FVTPL)

32,813

58,498

–

58,511

–

Net carrying value (incl FVTPL)

77,790

188,903

126,072

1,033

29,478

345,486

–

Loans and advances includes reverse repurchase agreements and other sim

ilar secured lend

ing of $13,996 mill

ion under Customers and of $1,738 m

ill

ion under

Banks, held at amortised cost

2. Loans and advances includes reverse repurchase agreements and other sim

ilar secured lend

ing of $51,299 mill

ion under Customers and of $30,548 m

ill

ion under

Banks, held at fair value through proﬁt or loss

242

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

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 balance

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

2. 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 2023

Risk review and Capital review

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

2023

Gross

Credit impa

irment

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Strong

84,248

1,145

–

85,893

(34)

(18)

–

(52)

1A-2B

0 – 0.045

A+ and above

10,891

–

10,972

(1)

–

(1)

3A-4A

0.046 – 0.110

A/A- to BBB+/BBB

31,974

558

–

32,532

(3)

–

(3)

4B-5B

0.111 – 0.425

BBB to BBB-/BB+

41,383

506

–

41,889

(30)

(18)

–

(48)

Satisfactory

36,638

5,840

–

42,478

(67)

(179)

–

(246)

6A-7B

0.426 – 1.350

BB+/BB to BB-

24,296

1,873

–

26,169

(38)

(77)

–

(115)

8A-9B

1.351 – 4.000

BB-/B+ to B

8,196

2,273

–

10,469

(13)

(90)

–

(103)

10A-11C

4.001 – 15.75

B/B- to B-/CCC+

4,146

1,694

–

5,840

(16)

(12)

–

(28)

Higher risk

–

917

–

917

–

(60)

–

(60)

15.751 – 99.999

CCC+/C

–

917

–

917

–

(60)

–

(60)

Defaulted

–

5,508

–

(3,533)

13-14

100

Defaulted

–

5,508

–

(3,533)

Total

120,886

7,902

5,508

134,296

(101)

(257)

(3,533)

(3,891)

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

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Strong

89,567

2,068

–

91,635

(43)

(30)

–

(73)

1A-2B

0 – 0.045

A+ and above

8,247

117

–

8,364

(4)

–

(4)

3A-4A

0.046 – 0.110

A/A- to BBB+/BBB

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

9,979

3,116

–

13,095

(20)

(35)

–

(55)

10A-11C

4.001 – 15.75

B/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)

Defaulted

–

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

Corporate lending¹

- Asia

2023

Gross

Credit impa

irment

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Strong

36,959

802

–

37,761

(12)

(15)

–

(27)

1A-2B

0 – 0.045

A+ and above

3,550

–

3,574

–

3A-4A

0.046 – 0.110

A/A- to BBB+/BBB

12,634

400

–

13,034

(1)

–

(1)

4B-5B

0.111 – 0.425

BBB to BBB-/BB+

20,775

378

–

21,153

(11)

(15)

–

(26)

Satisfactory

22,581

2,534

–

25,115

(35)

(137)

–

(172)

6A-7B

0.426 – 1.350

BB+/BB to BB-

14,740

739

–

15,479

(28)

(68)

–

(96)

8A-9B

1.351 – 4.000

BB-/B+ to B

5,243

1,134

–

6,377

(5)

(66)

–

(71)

10A-11C

4.001 – 15.75

B/B- to B-/CCC+

2,598

661

–

3,259

(2)

(3)

–

(5)

Higher risk

–

231

–

231

–

(19)

–

(19)

15.751 – 99.999

CCC+/C

–

231

–

231

–

(19)

–

(19)

Defaulted

–

2,870

–

(2,014)

13-14

100

Defaulted

–

2,870

–

(2,014)

Total

59,540

3,567

2,870

65,977

(47)

(171)

(2,014)

(2,232)

Corporate loans and advances to customers excludes loans to “Financ

ing,

insurance and non-banking” and “Government” counterparties

244

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Corporate lending

- Asia

2022

Gross

Credit impa

irment

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Strong

40,402

1,361

–

41,763

(28)

(21)

–

(49)

1A-2B

0 – 0.045

A+ and above

3,857

–

3,909

(3)

–

(3)

3A-4A

0.046 – 0.110

A/A- to BBB+/BBB

14,694

250

–

14,944

(2)

(1)

–

(3)

4B-5B

0.111 – 0.425

BBB to BBB-/BB+

21,851

1,059

–

22,910

(23)

(20)

–

(43)

Satisfactory

22,064

3,859

–

25,923

(55)

(99)

–

(154)

6A-7B

0.426 – 1.350

BB+/BB to BB-

14,512

1,285

–

15,797

(47)

(81)

–

(128)

8A-9B

1.351 – 4.000

BB-/B+ to B

5,091

1,451

–

6,542

(7)

–

(14)

10A-11C

4.001 – 15.75

B/B- to B-/CCC+

2,461

1,123

–

3,584

(1)

(11)

–

(12)

Higher risk

–

463

–

463

–

(106)

–

(106)

15.751 – 99.999

CCC+/C

–

463

–

463

–

(106)

–

(106)

Defaulted

–

3,063

–

(1,748)

13-14

100

Defaulted

–

3,063

–

(1,748)

Total

62,466

5,683

3,063

71,212

(83)

(226)

(1,748)

(2,057)

Corporate loans and advances to customers excludes loans to “Financ

ing,

insurance and non-banking” and “Government” counterparties

Credit grade

Regulatory 1 year

PD range (%)

S&P external ratings

equivalent

Corporate lending

- Africa & Middle East

2023

Gross

Credit impa

irment

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Strong

7,756

–

7,799

(1)

(2)

–

(3)

1A-2B

0 – 0.045

A+ and above

358

–

358

–

3A-4A

0.046 – 0.110

A/A- to BBB+/BBB

1,952

–

1,952

–

4B-5B

0.111 – 0.425

BBB to BBB-/BB+

5,446

–

5,489

(1)

(2)

–

(3)

Satisfactory

2,801

492

–

3,293

(18)

(13)

–

(31)

6A-7B

0.426 – 1.350

BB+/BB to BB-

1,512

–

1,594

(2)

(3)

–

(5)

8A-9B

1.351 – 4.000

BB-/B+ to B

587

175

–

762

(4)

(7)

–

(11)

10A-11C

4.001 – 15.75

B/B- to B-/CCC+

702

235

–

937

(12)

(3)

–

(15)

Higher risk

–

515

–

515

–

(37)

–

(37)

15.751 – 99.999

CCC+/C

–

515

–

515

–

(37)

–

(37)

Defaulted

–

1,435

–

(1,079)

13-14

100

Defaulted

–

1,435

–

(1,079)

Total

10,557

1,050

1,435

13,042

(19)

(52)

(1,079)

(1,150)

Corporate loans and advances to customers excludes loans to “Financ

ing,

insurance and non-banking” and “Government” counterparties

Credit grade

Regulatory 1 year

PD range (%)

S&P external ratings

equivalent

Corporate lending

- Africa & Middle East

2022

Gross

Credit impa

irment

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Strong

6,268

311

–

6,579

–

1A-2B

0 – 0.045

A+ and above

338

–

344

–

3A-4A

0.046 – 0.110

A/A- to BBB+/BBB

2,049

–

2,072

–

4B-5B

0.111 – 0.425

BBB to BBB-/BB+

3,881

282

–

4,163

–

Satisfactory

4,389

642

–

5,031

(32)

(41)

–

(73)

6A-7B

0.426 – 1.350

BB+/BB to BB-

1,454

218

–

1,672

(11)

(3)

–

(14)

8A-9B

1.351 – 4.000

BB-/B+ to B

2,361

320

–

2,681

(11)

(24)

–

(35)

10A-11C

4.001 – 15.75

B/B- to B-/CCC+

574

104

–

678

(10)

(14)

–

(24)

Higher risk

–

653

–

653

–

(26)

–

(26)

15.751 – 99.999

CCC+/C

–

653

–

653

–

(26)

–

(26)

Defaulted

–

1,735

–

(1,344)

13-14

100

Defaulted

–

1,735

–

(1,344)

Total

10,657

1,606

1,735

13,998

(32)

(67)

(1,344)

(1,443)

Corporate loans and advances to customers excludes loans to “Financ

ing,

insurance and non-banking” and “Government” counterparties

245

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Credit grade

Regulatory 1 year

PD range (%)

S&P external ratings

equivalent

Corporate lending

- Europe &Americas

2023

Gross

Credit impa

irment

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Strong

9,283

198

–

9,481

(11)

–

(11)

1A-2B

0 – 0.045

A+ and above

528

–

528

–

3A-4A

0.046 – 0.110

A/A- to BBB+/BBB

4,413

124

–

4,537

(1)

–

(1)

4B-5B

0.111 – 0.425

BBB to BBB-/BB+

4,342

–

4,416

(10)

–

(10)

Satisfactory

4,778

1,621

–

6,399

(5)

(22)

–

(27)

6A-7B

0.426 – 1.350

BB+/BB to BB-

3,912

768

–

4,680

(4)

(2)

–

(6)

8A-9B

1.351 – 4.000

BB-/B+ to B

596

821

–

1,417

(1)

(15)

–

(16)

10A-11C

4.001 – 15.75

B/B- to B-/CCC+

270

–

302

–

(5)

–

(5)

Higher risk

–

(7)

–

(7)

15.751 – 99.999

CCC+/C

–

(7)

–

(7)

Defaulted

–

980

–

(345)

13-14

100

Defaulted

–

980

–

(345)

Total

14,061

1,896

980

16,937

(16)

(29)

(345)

(390)

Corporate loans and advances to customers excludes loans to “Financ

ing,

insurance and non-banking” and “Government” counterparties

Credit grade

Regulatory 1 year

PD range (%)

S&P external ratings

equivalent

Corporate lending

- Europe & Americas

2022

Gross

Credit impa

irment

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Stage 1

$mill

ion

Stage 2

$mill

ion

Stage 3

$mill

ion

Total

$mill

ion

Strong

10,033

225

–

10,258

(13)

–

(13)

1A-2B

0 – 0.045

A+ and above

575

–

575

–

3A-4A

0.046 – 0.110

A/A- to BBB+/BBB

4,065

–

4,073

(1)

–

(1)

4B-5B

0.111 – 0.425

BBB to BBB-/BB+

5,393

217

–

5,610

(12)

–

(12)

Satisfactory

4,498

2,077

–

6,575

(4)

(25)

–

(29)

6A-7B

0.426 – 1.350

BB+/BB to BB-

3,867

1,376

–

5,243

(4)

(25)

–

(29)

8A-9B

1.351 – 4.000

BB-/B+ to B

537

636

–

1,173

–

10A-11C

4.001 – 15.75

B/B- to B-/CCC+

–

159

–

Higher risk

–

387

–

387

–

(1)

–

(1)

15.751 – 99.999

CCC+/C

–

387

–

387

–

(1)

–

(1)

Defaulted

–

1,230

–

(398)

13-14

100

Defaulted

–

1,230

–

(398)

Total

14,531

2,689

1,230

18,450

(17)

(26)

(398)

(441)

Corporate loans and advances to customers excludes loans to “Financ

ing,

insurance and non-banking” and “Government” counterparties

246

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Consumer, Private & Business Banking

2023

Asia

Africa & Middle East

Europe & Americas

Total

$mill

ion

Mort-

gages

$mill

ion

Credit

Cards

$mill

ion

Others

$mill

ion

Total

$mill

ion

Mort-

gages

$mill

ion

Credit

Cards

$mill

ion

Others

$mill

ion

Total

$mill

ion

Mort-

gages

$mill

ion

Credit

Cards

$mill

ion

Others

$mill

ion

Total

$mill

ion

Stage 1

Gross

Strong

77,270

6,234

30,027

113,531

974

263

2,471

3,708

335

–

619

954

118,193

Satisfactory

659

113

2,418

3,190

158

121

290

1,812

–

1,813

5,293

Total

77,929

6,347

32,445

116,721

1,132

274

2,592

3,998

2,147

–

620

2,767 123,486

ECL

Strong

(5)

(25)

(181)

(211)

(2)

(7)

(13)

(22)

–

(1)

(234)

Satisfactory

–

(57)

(19)

(76)

–

(2)

–

(2)

(80)

Total

(5)

(82)

(200)

(287)

(2)

(7)

(15)

(24)

(2)

–

(1)

(3)

(314)

Coverage %

Stage 2

Gross

Strong

1,014

124

583

1,721

–

1,761

Satisfactory

122

165

–

206

Higher risk

161

118

318

–

337

Total

1,297

177

730

2,204

–

2,304

ECL

Strong

(1)

(12)

(43)

(56)

(1)

(7)

(9)

–

(65)

Satisfactory

–

(14)

(7)

(21)

–

(1)

–

(22)

Higher risk

(1)

(17)

(34)

(52)

–

(1)

(2)

–

(54)

Total

(2)

(43)

(84)

(129)

(1)

(2)

(9)

(12)

–

(141)

Coverage %

24%

12%

17%

26%

16%

Stage 3

Gross credit

impa

ired

382

841

1,276

115

–

1,484

ECL

(84)

(36)

(566)

(686)

(25)

(2)

(33)

(60)

(14)

–

(14)

(760)

Coverage %

22%

68%

67%

54%

47%

67%

56%

52%

16%

15%

51%

Total

Gross

Strong

78,284

6,358

30,610

115,252

991

271

2,486

3,748

335

–

619

954

119,954

Satisfactory

781

127

2,447

3,355

162

130

304

1,839

–

1,840

5,499

Higher risk

161

118

318

–

337

Credit-Impaired

382

841

1,276

115

–

1,484

Total

79,608

6,577

34,016

120,201

1,211

289

2,686

4,186

2,259

–

628

2,887

127,274

ECL

Strong

(6)

(37)

(224)

(267)

(3)

(8)

(20)

(31)

–

(1)

(299)

Satisfactory

–

(71)

(26)

(97)

–

(3)

(2)

–

(2)

(102)

Higher risk

(1)

(17)

(34)

(52)

–

(1)

(2)

–

(54)

Credit-Impaired

(84)

(36)

(566)

(686)

(25)

(2)

(33)

(60)

(14)

–

(14)

(760)

Total

(91)

(161)

(850)

(1,102)

(28)

(11)

(57)

(96)

(16)

–

(1)

(17)

(1,215)

Coverage %

247

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Consumer, Private & Business Banking

2022

Asia

Africa & Middle East

Europe & Americas

Mort-

gages

$mill

ion

Credit

cards

$mill

ion

Others

$mill

ion

Total

$mill

ion

Mort-

gages

$mill

ion

Credit

cards

$mill

ion

Others

$mill

ion

Total

$mill

ion

Mort-

gages

$mill

ion

Credit

cards

$mill

ion

Others

$mill

ion

Total

$mill

ion

Total

$mill

ion

Stage 1

Gross

Strong

81,738

5,781

32,297

119,816

1,004

281

2,590

3,875

397

–

646

1,043

124,734

Satisfactory

1,155

145

1,378

2,678

189

269

1,372

–

1,453

4,400

Total

82,893

5,926

33,675

122,494

1,193

290

2,661

4,144

1,769

–

727

2,496

129,134

ECL

Strong

–

(49)

(233)

(282)

(3)

(6)

(37)

(46)

(2)

–

(2)

(4)

(332)

Satisfactory

(6)

(37)

(27)

(70)

(1)

–

(1)

(2)

–

(2)

(74)

Total

(6)

(86)

(260)

(352)

(4)

(6)

(38)

(48)

(4)

–

(2)

(6)

(406)

Coverage %

Stage 2

Gross

Strong

576

388

1,052

112

160

–

1,215

Satisfactory

–

146

Higher risk

150

247

–

309

Total

801

132

465

1,398

167

235

–

1,670

ECL

Strong

(2)

(26)

(27)

(55)

(3)

(1)

(3)

(7)

–

(62)

Satisfactory

(1)

(9)

(7)

(17)

–

(17)

Higher risk

(2)

(6)

(28)

(36)

–

(1)

(4)

(5)

–

(41)

Total

(5)

(41)

(62)

(108)

(3)

(2)

(7)

(12)

–

(120)

Coverage %

31%

13%

33%

11%

Stage 3

Gross credit

impa

ired

368

783

1,199

111

177

–

1,453

ECL

(97)

(35)

(524)

(656)

(76)

(7)

(30)

(113)

(7)

–

(7)

(776)

Coverage %

26%

73%

67%

55%

68%

70%

54%

64%

53%

Total

Gross

Strong

82,314

5,869

32,685

120,868

1,116

283

2,636

4,035

398

–

648

1,046

125,949

Satisfactory

1,230

155

1,392

2,777

232

316

1,372

–

1,453

4,546

Higher risk

150

247

–

309

Credit-Impaired

368

783

1,199

111

177

–

1,453

Total

84,062

6,106

34,923

125,091

1,471

306

2,779

4,556

1,881

–

729

2,610

132,257

ECL

Strong

(2)

(75)

(260)

(337)

(6)

(7)

(40)

(53)

(2)

–

(2)

(4)

(394)

Satisfactory

(7)

(46)

(34)

(87)

(1)

–

(1)

(2)

–

(2)

(91)

Higher risk

(2)

(6)

(28)

(36)

–

(1)

(4)

(5)

–

(41)

Credit-Impaired

(97)

(35)

(524)

(656)

(76)

(7)

(30)

(113)

(7)

–

(7)

(776)

Total

(108)

(162)

(846)

(1,116)

(83)

(15)

(75)

(173)

(11)

–

(2)

(13)

(1,302)

Coverage %

248

Standard Chartered

– Annual Report 2023

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

2023

2022

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)

229,289

17,536

26,867

273,692

248,625

17,553

29,041

295,219

Provis

ion (stage 1)

(363)

(39)

(28)

(430)

(454)

(73)

(32)

(559)

Gross (stage 2)

6,660

3,276

1,289

11,225

8,302

3,122

1,619

13,043

Provis

ion (stage 2)

(321)

(70)

(29)

(420)

(337)

(104)

(3)

(444)

Gross (stage 3)

4,604

2,273

351

7,228

4,562

2,725

558

7,845

Provis

ion (stage 3)

(2,734)

(1,387)

(199)

(4,320)

(2,483)

(1,765)

(209)

(4,457)

Net loans

237,135

21,589

28,251

286,975

258,215

21,458

30,974

310,647

Includes reverse repurchase agreements and other sim

ilar secured lend

ing

Loans and advances to banks

Amortised cost

2023

2022

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)

35,338

2,803

6,243

44,384

21,806

3,818

13,525

39,149

Provis

ion (stage 1)

(7)

–

(1)

(8)

(3)

(4)

(2)

(9)

Gross (stage 2)

311

212

540

212

116

337

Provis

ion (stage 2)

(2)

(8)

–

(10)

(2)

(1)

–

(3)

Gross (stage 3)

–

Provis

ion (stage 3)

(2)

–

(4)

(6)

(14)

–

(14)

Net loans

35,417

3,106

6,454

44,977

22,058

3,929

13,532

39,519

Includes reverse repurchase agreements and other sim

ilar secured lend

ing

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

in stage is reported with

in the stage that the assets are transferred to. For example, assets transferred

into stage 2 are

remeasured from a 12-month to a lifet

ime 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 net change in exposures reﬂect repayments although stage 2 may include new facil

ies where clients

are on non-purely precautionary early alert, are CG 12, or when non-investment grade debt securit

ies are acqu

ired.

249

Standard Chartered

– Annual Report 2023

Risk review and Capital review

•

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 $3.8 bill

ion to $724 b

ill

ion (31 December 2022: $720 b

ill

ion). CCIB exposure

increased by

$21.8 bill

ion to $337 b

ill

ion (31 December 2022: $315 b

ill

ion) due to off-balance sheet exposures, wh

ich was partly offset by a

decrease in loans and advances to customers. CPBB decreased by $2.2 bill

ion to $191 b

ill

ion (31 December 2022: $193 b

ill

ion)

which was largely driven by the mortgage portfolio in Korea and Hong Kong. Stage 1 debt securit

ies decreased by $7.8 b

ill

ion

to $158 bill

ion (31 December 2022: $166 b

ill

ion) due to l

iqu

ity management and maturit

ies.

Total stage 1 provis

ions decreased by $119 m

ill

ion to $526 m

ill

ion (31 December 2022: $645 m

ill

ion). CCIB prov

ions decreased by

$43 mill

ion to $151 m

ill

ion (31 December 2022: $194 m

ill

ion), pr

imar

ily due to new or

inat

ions, which was partly offset by model

updates. Debt securit

ies prov

ions was stable at $26 m

ill

ion (31 December 2022: $25 m

ill

ion). CPBB decreased by $88 m

ill

ion

to $325 mill

ion (31 December 2022: $413 m

ill

ion), ma

inly driven by the release of the judgemental non-linear

ity post model

adjustment and overlay releases, both of which are reported in ‘Changes in risk parameters’.

Stage 2 gross exposures decreased by $5.2 bill

ion to $22 b

ill

ion (31 December 2022: $27 b

ill

ion), pr

imar

ily dr

iven by a net

reduction in exposures in CCIB, particularly in the CRE and Transport sectors. CPBB exposures increased by $0.7 bill

ion to

$2.5 bill

ion (31 December 2022: $1.8 b

ill

ion), of wh

ich $0.4 bill

ion was from the Secured portfol

io. Debt securit

ies decreased by

$3.6 bill

ion to $1.9 b

ill

ion (31 December 2022: $5.5 b

ill

ion).

Stage 2 provis

ions decreased by $101 m

ill

ion to $517 m

ill

ion (31 December 2022: $618 m

ill

ion). CCIB prov

ions decreased by

$93 mill

ion to $318 m

ill

ion (31 December 2022: $411 m

ill

ion) from releases due to exposure reduct

ions, transfers to stage 3 for

China CRE exposures and model updates. This was partly offset by a further downgrade of Pakistan sovereign clients with

stage 2. CPBB provis

ions

increased by $22 mill

ion to $140 m

ill

ion (31 December 2022: $118 m

ill

ion) due to h

igher delinquenc

ies.

This was partly offset by the release of judgemental non-linear

ity post model adjustment and overlay releases wh

ich are

reported with

in ‘Changes

in risk parameters’ due to underlying factors not being valid any more. Debt Securit

ies decreased

by $56 mill

ion to $34 m

ill

ion (31 December 2022: $90 m

ill

ion) largely due to exposure reduct

ions and shortening of tenors,

particularly in Pakistan.

The impact of model and methodology updates in 2023 reduced stage 1 and 2 provis

ions by $15 m

ill

ion, of wh

ich $10 mill

ion

was in CCIB and Central and other items, while $5 mill

ion was

in CPBB.

Stage 3 gross loans for CCIB decreased by $0.7 bill

ion to $6.3 b

ill

ion (31 December 2022: $7 b

ill

ion) as repayments and wr

ite-offs

were partly offset by the downgrade of China CRE clients. CCIB provis

ions decreased by $171 m

ill

ion to $3.7 b

ill

ion (31 December

2022: $3.8 bill

ion) as charges from new downgrades were offset by releases due to repayments and wr

ite-offs. CPBB stage 3

loans was stable at $1.5 bill

ion (31 December 2022: $1.5 b

ill

ion) but prov

ions decreased by $17 m

ill

ion to $0.8 b

ill

ion (31 December

2022: $0.8 bill

ion). Debt secur

ity gross assets increased by $20 mill

ion to $164 m

ill

ion (31 December 2022: $144 m

ill

ion).

250

Standard Chartered

– Annual Report 2023

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 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)

As at 1 January 2023

720,112

(645) 719,467

27,479

(618)

26,861

8,841

(4,724)

4,117

756,432

(5,987)750,445

Transfers to stage 1

19,594

(661)

18,933

(19,583)

661

(18,922)

(11)

–

(11)

–

Transfers to stage 2

(42,628)

174

(42,454)

42,793

(182)

42,611

(165)

(157)

–

Transfers to stage 3

(96)

(90)

(2,329)

326

(2,003)

2,425

(332)

2,093

–

Net change in

exposures

23,717

(185)

23,532

(22,727)

(22,705)

(1,708)

624

(1,084)

(718)

461

(257)

Net remeasurement

from stage changes

–

(199)

–

(163)

–

(310)

Changes in risk

parameters

–

202

–

(32)

–

(1,100)

–

(930)

Write-offs

–

(1,027)

1,027

–

(1,027)

1,027

–

Interest due

but unpaid

–

(83)

–

(83)

–

Discount unwind

–

180

–

180

Exchange translation

differences and

other movements¹

3,177

531

3,708

(3,365)

(495)

(3,860)

(128)

(102)

(230)

(316)

(66)

(382)

As at 31 December

2023²

723,876

(526) 723,350

22,268

(517)

21,751

8,144

(4,499)

3,645

754,288

(5,542) 748,746

Income statement

ECL (charge)/release⁶

(209)

(639)

(779)

Recoveries of

amounts previously

written off

–

271

Total credit

impa

irment

(charge)/release

(209)

(368)

(508)

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 $111,478 mill

ion (31 December 2022:

$101,740 mill

ion) and Total cred

it impa

irment of $59 m

ill

ion (31 December 2022: $88 m

ill

ion)

The gross balance includes the notional amount of off -balance sheet instruments

4 Reported basis

Stage 3 includes gross of $80 mill

ion (31 December 2022: $28 m

ill

ion) and ECL $14 m

ill

ion (31 December 2022: $13 m

ill

ion) or

inated cred

it-impa

ired debt secur

ies

Does not include release relating to Other assets

(31 December 2022: $2 mill

ion)

251

Standard Chartered

– Annual Report 2023

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 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)

As at 1 January 2023

166,103

(25) 166,078

5,455

(90)

5,365

144

(106)

171,702

(221)

171,481

Transfers to stage 1

371

(65)

306

(371)

(306)

–

Transfers to stage 2

(884)

(870)

884

(14)

870

–

Transfers to stage 3

–

(16)

–

(16)

–

Net change in

exposures

(11,583)

(28)

(11,611)

(1,899)

(44)

(1,943)

–

(13,475)

(72) (13,547)

Net remeasurement

from stage changes

–

(18)

–

(11)

Changes in risk

parameters

–

105

–

(4)

–

133

Write-offs

–

Interest due

but unpaid

–

Exchange translation

differences and

other movements

4,307

4,346

(2,193)

(38)

(2,231)

(3)

2,111

2,161

As at 31 December

2023

158,314

(26) 158,288

1,860

(34)

1,826

164

(61)

103

160,338

(121) 160,217

Income statement

ECL (charge)/release

(4)

Recoveries of

amounts previously

written off

–

Total credit

impa

irment

(charge)/release

(4)

Includes fair value adjustments and amortisat

ion on debt secur

ies

Stage 3 includes gross of $80 mill

ion (31 December 2022: $28 m

ill

ion) and ECL $14 m

ill

ion (31 December 2022: $13 m

ill

ion) or

inated cred

it-impa

ired debt secur

ies

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 $160,263 mill

ion

(31 December 2022: $171,640 mill

ion). Refer to the Analys

is of ﬁnanc

ial

instrument by stage table

252

Standard Chartered

– Annual Report 2023

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 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)

As at 1 January 2023

315,437

(194) 315,243

20,148

(411)

19,737

6,994

(3,822)

3,172

342,579

(4,427) 338,152

Transfers to stage 1

14,948

(347)

14,601

(14,948)

347 (14,601)

–

Transfers to stage 2

(34,133)

(34,053)

34,175

(88) 34,087

(42)

(34)

–

Transfers to stage 3

(17)

–

(17)

(1,270)

141

(1,129)

1,287

(141)

1,146

–

Net change in

exposures

41,314

(73)

41,241

(20,084)

89 (19,995)

(1,335)

623

(712)

19,895

639

20,534

Net remeasurement

from stage changes

–

(45)

–

(82)

–

(112)

Changes in risk

parameters

–

(68)

–

(668)

–

(676)

Write-offs

–

(340)

340

–

(340)

340

–

Interest due

but unpaid

–

(120)

120

–

(120)

120

–

Discount unwind

–

155

–

155

Exchange translation

differences and

other movements

(360)

308

(52)

(1,148)

(283)

(1,431)

(188)

(184)

(372)

(1,696)

(159)

(1,855)

As at 31 December

2023

337,189

(151) 337,038

16,873

(318)

16,555

6,256

(3,651)

2,605

360,318

(4,120) 356,198

Income statement

ECL (charge)/release

(24)

(127)

(149)

Recoveries of

amounts previously

written off

–

Total credit

impa

irment

(charge)/release

(24)

(96)

(118)

The gross balance includes the notional amount of off balance sheet instruments

Does not include release relating to Other assets (31 December 2022: $2 mill

ion)

253

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Consumer, Private and Business Banking (audited)

Amortised cost

and FVOCI

Stage 1

Stage 2

Stage 3

Total

Gross

balance¹

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance¹

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance¹

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

Gross

balance¹

$mill

ion

Total

credit

impa

ir-

ment

$mill

ion

Net

$mill

ion

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)

As at 1 January 2023

193,239

(413) 192,826

1,821

(118)

1,703

1,454

(776)

678

196,514

(1,307) 195,207

Transfers to stage 1

4,265

(246)

4,019

(4,254)

246

(4,008)

(11)

–

(11)

–

Transfers to stage 2

(7,544)

(7,471)

7,667

(73)

7,594

(123)

–

(123)

–

Transfers to stage 3

(64)

(63)

(1,049)

187

(862)

1,113

(188)

925

–

Net change in

exposures

1,965

(78)

1,887

(1,713)

(1,699)

(395)

–

(395)

(143)

(64)

(207)

Net remeasurement

from stage changes

–

(137)

–

(38)

–

(144)

Changes in risk

parameters

–

110

–

(69)

–

(426)

–

(385)

Write-offs

–

(649)

649

–

(649)

649

–

Interest due

but unpaid

–

(37)

–

(37)

–

Discount unwind

–

Exchange translation

differences and

other movements

(862)

197

(665)

–

(190)

(803)

(763)

As at 31 December

2023

190,999

(325) 190,674

2,472

(140)

2,332

1,485

(759)

726

194,956

(1,224) 193,732

Income statement

ECL (charge)/release

(192)

(464)

(593)

Recoveries of

amounts previously

written off

–

239

Total credit

impa

irment

(charge)/release

(192)

(225)

(354)

The gross balance includes the notional amount of off-balance sheet instruments

254

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Consumer, Private and Business Banking - Secured (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 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)

As at 1 January 2023

135,362

(60) 135,302

1,413

(17)

1,396

1,028

(552)

476

137,803

(629)

137,174

Transfers to stage 1

3,311

(20)

3,291

(3,302)

(3,282)

(9)

–

(9)

–

Transfers to stage 2

(5,340)

(5,329)

5,436

(9)

5,427

(96)

(2)

(98)

–

Transfers to stage 3

(28)

(27)

(463)

(462)

491

(2)

489

–

Net change in

exposures

(3,138)

(16)

(3,154)

(1,250)

(1,247)

(216)

–

(216)

(4,604)

(13)

(4,617)

Net remeasurement

from stage changes

–

(16)

–

(3)

–

(15)

Changes in risk

parameters

–

(110)

–

(64)

Write-offs

–

(109)

109

–

(109)

109

–

Interest due

but unpaid

–

(3)

–

(3)

–

Discount unwind

–

Exchange translation

differences and

other movements

(369)

(344)

(7)

(22)

(29)

(24)

(4)

(400)

(377)

As at 31 December

2023

129,798

(33) 129,765

1,827

(16)

1,811

1,062

(525)

537

132,687

(574)

132,113

Income statement

ECL (charge)/release

(113)

(92)

Recoveries of

amounts previously

written off

–

Total credit

impa

irment

(charge)/release

(45)

(24)

The gross balance includes the notional amount of off-balance sheet instruments

255

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Consumer, Private and Business Banking - Unsecured (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 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)

As at 1 January 2023

57,877

(353)

57,524

408

(101)

307

426

(224)

202

58,711

(678)

58,033

Transfers to stage 1

954

(226)

728

(952)

226

(726)

(2)

–

(2)

–

Transfers to stage 2

(2,204)

(2,142)

2,231

(64)

2,167

(27)

(25)

–

Transfers to stage 3

(36)

–

(36)

(586)

186

(400)

622

(186)

436

–

Net change in

exposures

5,103

(62)

5,041

(463)

(452)

(179)

–

(179)

4,461

(51)

4,410

Net remeasurement

from stage changes

–

(121)

–

(35)

–

(129)

Changes in risk

parameters

–

(93)

–

(316)

–

(321)

Write-offs

–

(540)

540

–

(540)

540

–

Interest due

but unpaid

–

(40)

–

(40)

–

Discount unwind

–

Exchange translation

differences and

other movements

(493)

172

(321)

(168)

(161)

(403)

(386)

As at 31 December

2023

61,201

(292)

60,909

645

(124)

521

423

(234)

189

62,269

(650)

61,619

Income statement

ECL (charge)/release

(203)

(351)

(501)

Recoveries of

amounts previously

written off

–

171

Total credit

impa

irment

(charge)/release

(203)

(180)

(330)

The gross balance includes the notional amount of off-balance sheet instruments

256

Standard Chartered

– Annual Report 2023

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

2023 and 31 December 2022 for each segment.

Where multiple drivers apply, the exposure is allocated based on the table order. For example, a loan may have breached

the PD thresholds and could also be on non-purely precautionary early alert; in this instance, the exposure is reported under

‘Increase in PD’.

Further details can be found in the ‘Summary of Performance in 2023’ in

pages 235 and 236

2023

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

8,262

0.9%

1,962

109

5.6%

24.0%

599

2.2%

10,919

220

2.0%

Non-purely

precautionary early alert

5,136

0.5%

–

0.0%

–

0.0%

–

0.0%

5,173

0.5%

Higher risk (CG12)

1,008

5.6%

3.8%

–

0.0%

2,020

0.8%

3,054

2.4%

Sub-investment grade

–

0.0%

–

0.0%

–

0.0%

–

0.0%

–

0.0%

Top up/Sell down

(Private Banking)

–

0.0%

148

1.4%

–

0.0%

–

0.0%

148

1.4%

Others

2,467

1.5%

151

10.6%

–

0.0%

489

–

0.0%

3,107

1.7%

30 days past due

–

0.0%

148

8.1%

–

0.0%

–

0.0%

150

8.0%

Management overlay

–

124

0.0%

–

0.0%

–

0.0%

–

0.0%

–

141

0.0%

Total stage 2

16,873

318

1.9%

2,472

140

5.7%

23.5%

3,108

1.5%

22,551

528

2.3%

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%

Includes Gross and ECL for Cash and balances at central banks and Assets held for sale

257

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Credit impa

irment charge (aud

ited)

The table below analyses credit impa

irment charges or releases of the ongo

ing business portfolio and restructuring business

portfolio for the year ended 31 December 2023.

Further details can be found in the ‘Summary of performance in 2023’ in

pages 235 and 236

2023

2022

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

112

123

148

277

425

Consumer, Private & Business Banking

129

225

354

151

111

262

Ventures

Central & other items

(44)

(34)

133

Credit impa

irment charge/(release)

138

390

528

407

429

836

Restructuring business portfolio

Others

(21)

(20)

(1)

–

Credit impa

irment charge/(release)

(21)

(20)

(1)

–

Total credit impa

irment

charge/(release)

139

369

508

406

430

836

Underlying credit impa

irment has been restated for the removal of (

i) exit markets and businesses in AME and (i

i) Av

iat

ion F

inance. No change to reported credit

impa

irment

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 $120 mill

ion to $1,005 m

ill

ion (31 December 2022: $1,125 m

ill

ion) largely on perform

ing forborne

loans stock. The net performing forborne loans declined from $151 mill

ion to $38 m

ill

ion wh

ile net non-performing forborne loans

remained stable at $967 mill

ion (31 December 2022: $974 m

ill

ion).

Amortised cost

2023

2022

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

2,340

314

–

2,654

2,129

377

–

2,506

Credit impa

irment (stage 1 and 2)

–

(2)

–

(2)

(1)

–

(1)

Credit impa

irment (stage 3)

(1,529)

(118)

–

(1,647)

(1,253)

(127)

–

(1,380)

Net carrying value

811

194

–

1,005

875

250

–

1,125

Included with

in the above table

Gross performing forborne loans

–

152

Modif

icat

ion of terms and condit

ions

–

152

Reﬁnancing

–

Impairment provis

ions

–

(2)

–

(2)

(1)

–

(1)

Modif

icat

ion of terms and condit

ions

–

(2)

–

(2)

(1)

–

(1)

Reﬁnancing

–

Net performing forborne loans

–

151

Collateral

–

Gross non-performing forborne loans

2,340

274

–

2,614

2,040

314

–

2,354

Modif

icat

ion of terms and condit

ions

2,113

274

–

2,387

1,997

314

–

2,311

Reﬁnancing

227

–

227

–

Impairment provis

ions

(1,529)

(118)

–

(1,647)

(1,253)

(127)

–

(1,380)

Modif

icat

ion of terms and condit

ions

(1,337)

(118)

–

(1,454)

(1,210)

(127)

–

(1,337)

Reﬁnancing

(192)

–

(192)

(43)

–

(43)

Net non-performing forborne loans

811

156

–

967

787

187

–

974

Collateral

341

–

390

243

–

311

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 borrower in credit stress, such that they are reﬁnanced and can pay other debt contracts that they were unable to honour

258

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Forborne and other modif

ied loans by reg

ion

Net forborne loans decreased by $120 mill

ion to $1,005 m

ill

ion (31 December 2022: $1,125 m

ill

ion) ma

inly in the performing

forborne loans, in particular the Asia and the Europe and Americas regions.

Amortised cost

2023

2022

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

Stage 3 forborne loans

661

231

967

568

144

262

974

Net forborne loans

695

231

1,005

697

153

275

1,125

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 in

pages 258 to 260

Further details on stage 3 loans and advances and cover ratio can be found in the ‘Summary of performance in 2023’ in

pages 235 and 236

Amortised cost

2023

2022

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

5,508

1,484

224

7,228

6,143

1,453

248

7,845

Credit impa

irment prov

ions

(3,533)

(760)

(12)

(15)

(4,320)

(3,662)

(776)

(1)

(18)

(4,457)

Net credit-impa

ired

1,975

724

–

209

2,908

2,481

677

–

230

3,388

Cover ratio

64%

51%

100%

60%

53%

100%

57%

Collateral ($ mill

ion)

623

554

–

1,177

956

543

–

1,499

Cover ratio (after collateral)

75%

89%

100%

76%

75%

91%

100%

76%

Credit-impa

ired (stage 3) loans and advances by geograph

ic region

Stage 3 gross loans decreased by $0.6 bill

ion to $7.2 b

ill

ion (31 December 2022: $7.8 b

ill

ion). The decrease was pr

imar

ily dr

iven by

repayments and write-offs in the Africa and the Middle East, which was offset by new inﬂows in Asia.

Further details can be found in the ‘Summary of performance in 2023’ in

pages 235 and 236

Amortised cost

2023

2022

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

4,604

2,273

351

7,228

4,562

2,725

558

7,845

Credit impa

irment prov

ions

(2,734)

(1,388)

(198)

(4,320)

(2,483)

(1,765)

(209)

(4,457)

Net credit-impa

ired

1,870

885

153

2,908

2,079

960

349

3,388

Cover ratio

59%

61%

56%

60%

54%

65%

37%

57%

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.

259

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Collateral (audited)

A secured loan is one where the borrower pledges an asset as collateral of which the Group is able to take possession in the

event that the borrower defaults.

The unadjusted market value of collateral across all asset types, in respect of CCIB, without adjust

ing for over-collateral

isat

ion,

reduced to $290 bill

ion (31 December 2022: $345 b

ill

ion) predom

inantly due to a reduction in reverse repos.

The collateral values in the table below (which covers loans and advances to banks and customers, excluding those held at fair

value through proﬁt or loss) are adjusted where appropriate in accordance with our risk mit

igat

ion policy and for the effect of

over-collateralisat

ion. The extent of over-collateral

isat

ion has been determ

ined with reference to both the drawn and undrawn

components of exposure as this best reﬂects the effect of collateral and other credit enhancements on the amounts aris

ing

from expected credit 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 decreased by $1.7 bill

ion to $36.5 b

ill

ion (31 December 2022: $38.2 b

ill

ion) and CPBB collateral decreased by

$5.5 bill

ion to $86.8 b

ill

ion (31 December 2022: $92.4 b

ill

ion) due to exposure reduct

ions from the mortgage portfolio. Total

collateral for Central and other items decreased by $8.7 bill

ion to $2.5 b

ill

ion (31 December 2022: $11.2 b

ill

ion) due to a decrease

in stage 1 reverse repos. However, collateral for stage 2 Central and other items increased by $1 bill

ion (31 December 2022: N

il)

due to short-term reverse repo with a Central Bank in the Africa and Middle East region.

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

2023

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

175,382

8,175

2,046

36,458

2,972

623

138,924

5,203

1,423

Consumer, Private &

Business Banking

126,059

2,163

724

86,827

1,136

554

39,232

1,027

170

Ventures

1,033

–

1,033

–

Central & other items

29,478

964

209

2,475

964

–

27,003

–

209

Total

331,952

11,335

2,979

125,760

5,072

1,177

206,192

6,263

1,802

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

7393

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

Includes loans and advances to banks

Adjusted for over-collateralisat

ion based on the drawn and undrawn components of exposures

Collateral – Corporate, Commercial & Institut

ional Bank

ing (audited)

Collateral taken for longer-term and sub-investment grade corporate loans reduced to 41 per cent (31 December 2022:

53 per cent) primar

ily due to the ex

it of the Aviat

ion bus

iness.

Our underwrit

ing standards encourage tak

ing specif

ic charges on assets and we cons

istently seek high-quality, investment-

grade collateral.

83 per cent (31 December 2022: 85 per cent) of tangible collateral excluding reverse repurchase agreements and ﬁnanc

ial

guarantees held comprises physical assets or is property based, with the remainder held in cash. Overall collateral decreased

by $2 bill

ion to $36 b

ill

ion (31 December 2022: $38 b

ill

ion) ma

inly due to a decrease in property collateral.

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 probabil

ity of default and other cred

it-related factors. Collateral is also held against off balance sheet exposures, includ

ing

undrawn commitments and trade-related instruments.

260

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Corporate, Commercial & Institut

ional Bank

ing

Amortised cost

2023

$mill

ion

2022

$mill

ion

Maximum exposure

175,382

179,150

Property

9,339

10,152

Plant, machinery and other stock

933

1,168

Cash

2,985

2,797

Reverse repos

13,826

14,305

AA– to AA+

1,036

A– to A+

10,606

10,459

BBB– to BBB+

855

1,485

Lower than BBB-

169

–

Unrated

1,160

2,269

Financ

ial guarantees and

insurance

5,057

5,096

Commodit

ies

Ships and aircraft

4,313

4,596

Total value of collateral

36,458

38,151

Net exposure

138,924

140,999

Adjusted for over-collateralisat

ion based on the drawn and undrawn components of exposures

Prior year has been represented to provide granular credit ratings

Collateral – Consumer, Private & Business Banking (audited)

In CPBB, fully secured products remain stable at 85 per cent of the total portfolio (31 December 2022: 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

2023

2022

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

106,914

505

18,640

126,059

112,556

449

17,950

130,955

Loans to ind

iduals

Mortgages

82,943

–

82,943

87,212

–

87,212

CCPL

375

–

17,395

17,770

221

–

16,711

16,932

Auto

312

–

312

502

–

502

Secured wealth products

20,303

–

20,303

19,551

–

19,551

Other

2,981

505

1,245

4,731

5,070

449

1,239

6,758

Total collateral

86,827

92,350

Net exposure

39,232

38,605

Percentage of total loans

85%

15%

86%

14%

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

261

Standard Chartered

– Annual Report 2023

Risk review and Capital review

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 a majority of mortgages, the value of property held as secur

ity sign

iﬁcantly exceeds pr

inc

ipal outstand

ing of the mortgage

loans. The average LTV of the overall mortgage portfolio increased to 47.1 per cent (31 December 2022: 44.7 per cent) driven

by property prices decrease in a few key markets, includ

ing Hong Kong, Korea and Ch

ina. Hong Kong, which represents

39.9 per cent of the resident

ial mortgage portfol

io, has an average LTV of 55.9 per cent (31 December 2022: 52.6 per cent).

The increase of Hong Kong resident

ial mortgage LTV

is due to a decrease of the Property Price Index. All of our other key

markets continue to have low portfolio LTVs (Korea, Singapore and Taiwan at 40.5 per cent, 43.0 per cent and 47.0 per cent

respectively). Korea average LTV increase is due to government relaxations whereby highly regulated areas have eased up

to accommodate customers with higher LTV.

An analysis of LTV ratios by geography for the mortgage portfolio is presented in the table below.

Amortised cost

2023

Asia

Gross

Africa &

Middle East

Gross

Europe &

Americas

Gross

Total

Gross

Less than 50 per cent

55.5

51.1

31.0

54.8

50 per cent to 59 per cent

17.1

14.7

17.4

17.1

60 per cent to 69 per cent

11.4

13.7

33.9

12.0

70 per cent to 79 per cent

7.7

12.8

14.4

7.9

80 per cent to 89 per cent

3.3

3.9

2.5

3.3

90 per cent to 99 per cent

2.6

2.1

0.6

2.5

100 per cent and greater

2.5

1.7

0.3

2.4

Average portfolio loan-to-value

46.9

51.1

56.0

47.1

Loans to ind

iduals – mortgages ($mill

ion)

79,517

1,183

2,243

82,943

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

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 $16.5 mill

ion

(31 December 2022: $14.9 mill

ion).

2023

$mill

ion

2022

$mill

ion

Property, plant and equipment

10.5

9.6

Guarantees

6.0

5.3

Total

16.5

14.9

262

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Other Credit risk mit

igat

ion (audited)

Other forms of credit risk mit

igat

ion are set out below.

Credit default swaps

The Group has entered into credit default swaps for portfolio

management purposes, referencing loan assets with a

notional value of $3.5 bill

ion (31 December 2022: $5.1 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 $22.5 bill

ion (31 December 2022: $13.5 b

ill

ion).

The Group continues to hold the underlying assets for which

the credit linked notes provide mit

igat

ion. The credit linked

notes are recognised as a ﬁnanc

ial l

iab

ity at amortised cost

on the balance sheet.

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 below.

Off-balance sheet exposures

For certain types of exposures, such as letters of credit and

guarantees, the Group obtains collateral such as cash

depending on internal Credit Risk assessments, as well as

in the case of letters of credit holding legal title to the

underlying assets should a default take place.

Other portfolio analysis

This section provides maturity analysis by credit quality by

industry and industry and retail products analysis by region.

Maturity analysis of loans and advances by client segment

Loans and advances to the CCIB segment remain

predominantly short-term, with $91 bill

ion (31 December

2022: $98 bill

ion) matur

ing in less than one year. 98 per cent

(31 December 2022: 96 per cent) of loans to banks mature in

less than one year, an increase compared with 2022 as net

exposures increased by $5.5 bill

ion to $45 b

ill

ion (31 December

2022: $39.5 bill

ion). Shorter matur

ies g

ive us the ﬂexib

ity to

respond promptly to events and rebalance or reduce our

exposure to clients or sectors that are facing increased

pressure or uncertainty.

The CPBB short-term book of one year or less and long-term

book of over ﬁve years is stable at 26 per cent (31 December

2022: 25 per cent) and 63 per cent (31 December 2022:

64 per cent) of the total portfolio respectively.

Amortised cost

2023

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

90,728

30,746

12,822

134,296

Consumer, Private & Business Banking

33,397

13,711

80,166

127,274

Ventures

747

334

–

1,081

Central & other items

29,448

29,494

Gross loans and advances to customers

154,320

44,834

92,991

292,145

Impairment provis

ions

(4,872)

(185)

(113)

(5,170)

Net loans and advances to customers

149,448

44,649

92,878

286,975

Net loans and advances to banks

43,955

1,021

44,977

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

263

Standard Chartered

– Annual Report 2023

Risk review and Capital review

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.

Amortised cost

2023

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

9,397

(8)

9,389

672

(22)

650

949

(535)

414

11,018

(565)

10,453

Manufacturing

21,239

(8)

21,231

708

(16)

692

656

(436)

220

22,603

(460)

22,143

Financ

ing,

insurance

and non-banking

31,633

(13)

31,620

571

(1)

570

(77)

32,284

(91)

32,193

Transport, telecom

and util

ies

14,710

(8)

14,702

1,722

(36)

1,686

481

(178)

303

16,913

(222)

16,691

Food and household

products

7,668

(15)

7,653

323

(7)

316

355

(262)

8,346

(284)

8,062

Commercial

real estate

12,261

(30)

12,231

1,848

(129)

1,719

1,712

(1,191)

521

15,821

(1,350)

14,471

Min

ing and

quarrying

5,995

(4)

5,991

220

(10)

210

151

(84)

6,366

(98)

6,268

Consumer durables

5,815

(3)

5,812

300

(21)

279

329

(298)

6,444

(322)

6,122

Construction

2,230

(2)

2,228

502

(8)

494

358

(326)

3,090

(336)

2,754

Trading companies &

distr

ibutors

581

–

581

–

107

(58)

745

(58)

687

Government

33,400

(6)

33,394

1,783

(5)

1,778

367

(33)

334

35,550

(44)

35,506

Other

4,262

(4)

4,258

161

(3)

158

187

(70)

117

4,610

(77)

4,533

Retail Products:

Mortgage

81,210

(8)

81,202

1,350

(5)

1,345

519

(123)

396

83,079

(136)

82,943

Credit Cards

7,633

(104)

7,529

244

(65)

179

(50)

7,946

(219)

7,727

Personal loans

and other

unsecured lending

10,867

(188)

10,679

324

(77)

247

315

(165)

150

11,506

(430)

11,076

Auto

310

–

310

–

312

–

312

Secured wealth

products

19,923

(22)

19,901

278

(10)

268

474

(340)

134

20,675

(372)

20,303

Other

4,558

(7)

4,551

161

(5)

156

118

(94)

4,837

(106)

4,731

Net carrying value

(customers)¹

273,692

(430) 273,262

11,225

(420)

10,805

7,228

(4,320)

2,908

292,145

(5,170) 286,975

Includes reverse repurchase agreements and other sim

ilar secured lend

ing held at amortised cost of $13,996 mill

ion

264

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

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

quarrying

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

Industry and Retail Products 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 8 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 3,255 clients.

The Mortgage portfolio continues to be the largest portion of the CPBB portfolio at $83.1 bill

ion (31 December 2022: $87.4 b

ill

ion),

of which 96 per cent continues to be in Asia. Credit cards, personal loans and other unsecured lending increased to 15 per cent

(31 December 2022: 14 per cent) of the CPBB portfolio, mainly in Asia due to the growth from Mox Bank and dig

ital partnersh

ips.

In Asia, the Financ

ing,

insurance and non-banking industry decreased by $1.9 bill

ion to $22.8 b

ill

ion (31 December 2022:

$24.7 bill

ion) wh

ile the CRE sector decreased by $2 bill

ion to $11.2 b

ill

ion (31 December 2022: $13.2 b

ill

ion) due to exposure

reductions. The Government sector decreased by $9.2 bill

ion to $30.5 b

ill

ion (31 December 2022: $39.7 b

ill

ion) due to decreased

lending to Korea.

265

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Amortisecd cost

2023

2022

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

4,143

3,986

2,324

10,453

6,250

2,278

3,938

12,466

Manufacturing

16,828

1,077

4,238

22,143

17,388

1,267

3,633

22,288

Financ

ing,

insurance and non-banking

22,771

829

8,593

32,193

24,674

761

10,262

35,697

Transport, telecom and util

ies

12,122

2,650

1,919

16,691

10,841

3,567

2,599

17,007

Food and household products

4,856

1,726

1,480

8,062

4,160

2,566

1,928

8,654

Commercial real estate

11,176

623

2,672

14,471

13,179

598

2,139

15,916

Min

ing and quarry

ing

3,856

375

2,037

6,268

3,785

390

1,909

6,084

Consumer durables

5,033

429

660

6,122

5,860

461

532

6,853

Construction

1,803

333

618

2,754

1,775

625

509

2,909

Trading companies and distr

ibutors

527

109

687

2,281

101

2,414

Government

30,487

4,778

241

35,506

39,713

3,759

106

43,578

Other

3,401

584

548

4,533

3,636

702

790

5,128

Retail Products:

Mortgages

79,517

1,183

2,243

82,943

83,954

1,388

1,870

87,212

Credit Cards

7,449

278

–

7,727

6,642

291

–

6,933

Personal loans and other

unsecured lending

9,426

1,565

11,076

9,056

1,541

100

10,697

Auto

295

–

312

469

–

502

Secured wealth products

18,774

987

542

20,303

17,876

1,048

627

19,551

Other

4,671

–

4,731

6,676

–

6,758

Net loans and advances to customers

237,135

21,589

28,251

286,975

258,215

21,458

30,974

310,647

Net loans and advances to banks

35,417

3,106

6,454

44,977

22,058

3,929

13,532

39,519

Vulnerable, cyclical and high carbon sectors

Vulnerable and cyclical sectors are those that the Group considers to be most at risk from current economic stresses, includ

ing

volatile energy and commodity prices, and we continue to monitor exposures to these sectors particularly carefully.

Sectors are ident

iﬁed and grouped as per the Internat

ional Standard Industrial Classif

icat

ion (ISIC) system and exposure

numbers have been updated to include all in-scope ISIC codes used for target setting among the high carbon sectors.

The maximum exposures shown in the table include Loans and Advances to Customers at Amortised cost, Fair Value through

proﬁt or loss, and committed facil

ies available as per IFRS 9 – Financ

ial Instruments

in $mill

ion.

Further details can be found in the ‘Summary of Performance in 2023’ in

pages 235 and 236

266

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Maximum exposure

2023

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:

Automotive manufacturers¹

3,564

3,499

3,791

538

4,329

7,828

Aviat

ion

1,2

1,775

974

801

1,794

668

2,462

3,263

Of which : High Carbon Sector

1,330

974

356

944

615

1,559

1,915

Commodity Traders

7,406

303

7,103

2,591

6,281

8,872

15,975

Metals & Min

ing

1.2

4,589

307

4,282

3,373

1,218

4,591

8,873

Of which: Steel

1,596

193

1,403

601

358

959

2,362

Of which: Coal Min

ing

150

170

Of which: Alumin

ium

526

517

338

188

526

1,043

Of which: Other Metals & Min

ing

2,438

2,342

2,383

573

2,956

5,298

Shipp

ing

5,964

3,557

2,407

2,261

291

2,552

4,959

Construction

2,853

448

2,405

2,753

5,927

8,680

11,085

Commercial Real Estate

14,533

6,363

8,170

4,658

311

4,969

13,139

Of which: High Carbon Sector

7,498

3,383

4,115

1,587

112

1,699

5,814

Hotels & Tourism

1,680

715

965

1,339

227

1,566

2,531

Oil & Gas

1,2

6,278

894

5,384

7,845

6,944

14,789

20,173

Power

5,411

1,231

4,180

3,982

732

4,714

8,894

Total

54,053

14,857

39,196

34,387

23,137

57,524

96,720

Of which: Vulnerable and cyclical sectors

38,880

9,983

28,897

24,842

21,511

46,353

75,250

Of which: High carbon sectors

34,634

10,411

24,223

23,783

10,450

34,233

58,456

Total Corporate, Commercial &

Institut

ional Bank

ing

130,405

32,744

97,661

104,437

63,183

167,620

265,281

Total Group

331,952

125,760

206,192

182,299

74,278

256,577

462,769

High carbon sectors

2 Vulnerable and cyclical sectors

Maximum On Balance sheet exposure include FVTPL portion of $955 mill

ion, of wh

ich Vulnerable sector is $821 mill

ion and H

igh Carbon sector is $443 mill

ion

Excluded Cement to the value of $671 mill

ion net of ECL under Construct

ion

267

Standard Chartered

– Annual Report 2023

Risk review and Capital review

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:

Automotive manufacturers

3,167

3,083

3,683

560

4,243

7,326

Aviat

ion

1,2,3

3,154

1,597

1,557

1,762

632

2,394

3,951

Of which : High Carbon Sector

2,540

1,582

958

695

555

1,250

2,208

Commodity Traders

8,133

341

7,792

2,578

6,095

8,673

16,465

Metals & Min

ing

1.2

4,990

333

4,657

3,732

930

4,662

9,319

Of which: Steel

1,227

157

1,070

1,450

327

1,777

2,847

Of which: Coal Min

ing

Of which: Alumin

ium

728

107

621

285

359

980

Of which: Other Metals & Min

ing

2,987

2,933

1,989

522

2,511

5,444

Shipp

ing

5,322

3,167

2,155

1,870

256

2,126

4,281

Construction

2,909

552

2,357

2,762

5,969

8,731

11,088

Commercial Real Estate

16,286

7,205

9,081

6,258

224

6,482

15,563

Of which: High Carbon Sector

6,547

2,344

4,203

3,996

4,086

8,289

Hotels & Tourism

1,741

919

822

1,346

138

1,484

2,306

Oil & Gas

1,2

6,668

806

5,862

7,630

7,158

14,788

20,650

Power

4,771

1,258

3,513

4,169

1,176

5,345

8,858

Total

57,141

16,262

40,879

35,790

23,138

58,928

99,807

Of which: Vulnerable and cyclical sectors

43,678

11,741

31,937

25,761

21,068

46,829

78,766

Of which: High carbon sectors

34,005

9,574

24,431

25,775

10,725

36,500

60,931

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

High carbon sectors

2 Vulnerable and cyclical sectors

In addit

ion to the av

iat

ion sector loan exposures, the Group owns $3.2 b

ill

ion of a

ircraft under operating leases in 2022

Maximum On Balance sheet exposure include FVTPL portion of $1,251 mill

ion, of wh

ich Vulnerable sector is $1,072 mill

ion and H

igh Carbon sector is $574 mill

ion

Excluded Cement to the value of $719 mill

ion net of ECL under Construct

ion

268

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Loans and advances by stage

Amortised Cost

2023

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

1,619

–

1,619

(1)

(15)

1,748

(16)

1,732

Commodity Traders

6,912

(2)

6,910

129

(1)

128

555

(504)

7,596

(507)

7,089

Metals & Min

ing

3,934

(1)

3,933

140

(8)

132

154

(88)

4,228

(97)

4,131

Construction

2,230

(2)

2,228

502

(8)

494

358

(326)

3,090

(336)

2,754

Commercial

Real Estate

12,261

(30)

12,231

1,848

(129)

1,719

1,712

(1,191)

521

15,821

(1,350)

14,471

Hotels & Tourism

1,468

(2)

1,466

–

126

(25)

101

1,655

(27)

1,628

Oil & Gas

5,234

(4)

5,230

615

(15)

600

571

(147)

424

6,420

(166)

6,254

Total

33,658

(41)

33,617

3,350

(162)

3,188

3,550

(2,296)

1,254

40,558

(2,499)

38,059

Total Corporate,

Commercial &

Institut

ional Bank

ing

120,886

(101) 120,785

7,902

(257)

7,645

5,508

(3,533)

1,975

134,296

(3,891) 130,405

Total Group

318,076

(438) 317,638

11,765

(430)

11,335

7,305

(4,326)

2,979

337,146

(5,194) 331,952

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

ion¹

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

In addit

ion to the av

iat

ion sector loan exposures, the Group owns $3.2 b

ill

ion of a

ircraft under operating leases in 2022

Loans and advances by region (net of credit impa

irment)

2023

2022¹

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

ion

1,077

648

1,732

1,105

1,259

708

3,072

Commodity Traders

3,778

675

2,636

7,089

3,497

978

3,096

7,571

Metals & Min

ing

1,628

1,522

981

4,131

2,966

347

1,441

4,754

Construction

1,803

333

618

2,754

1,776

624

509

2,909

Commercial Real Estate

11,176

623

2,672

14,471

13,180

598

2,138

15,916

Hotel & Tourism

998

178

452

1,628

880

465

396

1,741

Oil & Gas

2,639

1,815

1,800

6,254

3,574

1,445

1,624

6,643

Total

23,099

5,153

9,807

38,059

26,978

5,716

9,912

42,606

In addit

ion to the av

iat

ion sector loan exposures, the Group owns $3.2 b

ill

ion of a

ircraft under operating leases in 2022

269

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Credit quality – loans and advances

Amortised Cost

Credit Grade

2023

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

1,452

4,444

1,012

3,213

7,326

1,090

4,024

22,561

Satisfactory

222

2,592

1,702

788

6,751

439

1,726

14,220

Higher risk

–

101

229

Credit impa

ired (stage 3)

555

358

154

1,712

126

569

3,548

Total Gross Balance

1,748

7,596

3,090

4,228

15,821

1,655

6,420

40,558

Strong

–

(1)

–

(20)

(1)

(3)

(26)

Satisfactory

(1)

(2)

(6)

(1)

(139)

(1)

(12)

(162)

Higher risk

–

(4)

(8)

–

(4)

(16)

Credit impa

ired (stage 3)

(15)

(504)

(325)

(88)

(1,191)

(25)

(147)

(2,295)

Total Credit Impairment

(16)

(507)

(336)

(97)

(1,350)

(27)

(166)

(2,499)

Strong

0.0%

0.1%

0.0%

0.3%

0.1%

Satisfactory

0.5%

0.1%

0.4%

0.1%

2.1%

0.2%

0.7%

1.1%

Higher risk

0.0%

22.2%

11.0%

0.0%

4.0%

7.0%

Credit impa

ired (stage 3)

20.3%

90.8%

57.1%

69.6%

19.8%

25.8%

64.7%

Cover Ratio

0.9%

6.7%

10.9%

2.3%

8.5%

1.6%

2.6%

6.2%

Credit Grade

2022

Aviat

ion¹

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%

In addit

ion to the av

iat

ion sector loan exposures, the Group owns $3.2 b

ill

ion of a

ircraft under operating leases in 2022

270

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Maturity and expected credit loss for high-carbon sectors

Sector

2023

Maturity Buckets¹

2023

Loans and

advances

(Drawn funding)

$mill

ion

Less than

1 year

$mill

ion

More than

1 to 5 years

$mill

ion

More than

5 years

$mill

ion

Expected

Credit Loss

$mill

ion

Automotive Manufacturers

3,566

3,106

460

–

Aviat

ion

1,339

149

145

1,045

Cement

719

512

189

Coal Min

ing

–

Steel

1,649

1,258

185

206

Other Metals & Min

ing

2,151

1,886

240

Alumin

ium

537

442

Oil & Gas

6,444

2,980

1,576

1,888

166

Power

5,516

1,933

1,533

2,050

105

Shipp

ing

5,971

1,051

2,568

2,352

Commercial Real Estate

7,664

3,722

3,935

166

Total balance

35,598

17,048

10,927

7,623

614

Excluded fair value of Other Metals & Min

ing of $321 m

ill

ion

Sector

2022

Maturity Buckets¹

2022

Loans and

advances

(Drawn funding)

$mill

ion

Less than

1 year

$mill

ion

More than

1 to 5 years

$mill

ion

More than

5 years

$mill

ion

Expected

Credit Loss

$mill

ion

Automotive Manufacturers

3,167

2,450

717

–

Aviat

ion

2,595

118

749

1,728

Cement

762

661

Coal Min

ing

Steel

1,268

1,080

180

Other Metals & Min

ing

1,964

1,660

281

Alumin

ium

744

528

114

102

Oil & Gas

6,550

3,100

1,734

1,716

238

Power

4,903

1,615

1,279

2,009

132

Shipp

ing

5,374

918

2,567

1,889

Commercial Real Estate

6,598

2,568

3,949

Total balance

33,985

14,700

11,674

7,611

684

Gross of credit impa

irment

Excluded fair value of Other Metals & Min

ing and O

il & Gas of $58 mill

ion

271

Standard Chartered

– Annual Report 2023

Risk review and Capital review

China commercial real estate

The table below represents the on and off-balance sheet items that are exposed to China CRE by credit quality.

Further details can be found in the ‘Summary of Performance in 2023’ in

pages 235 and 236

2023

China

$mill

ion

Hong Kong

$mill

ion

Rest of Group

$mill

ion

Total

$mill

ion

Loans to customers

584

1,821

2,444

Off balance sheet

–

124

Total as at 31 December 2023

626

1,903

2,568

Loans to customers – By Credit quality

Gross

Strong

–

Satisfactory

339

619

997

Higher risk

–

Credit impa

ired (stage 3)

204

1,202

–

1,406

Total as at 31 December 2023

584

1,821

2,444

Loans to customers – ECL

Strong

–

Satisfactory

(3)

(134)

(12)

(149)

Higher risk

–

Credit impa

ired (stage 3)

(70)

(941)

–

(1,011)

Total as at 31 December 2023

(73)

(1,075)

(12)

(1,160)

Rest of Group mainly includes Singapore

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)

Rest of Group mainly includes Singapore

272

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

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 321.

Total gross debt securit

ies and other el

ible b

ills decreased by $11.4 bill

ion to $160 b

ill

ion (31 December 2022: $172 b

ill

ion) due

to action taken to manage liqu

ity, primar

ily

in stage 1.

Stage 1 gross balance decreased by $7.8 bill

ion to $158 b

ill

ion (31 December 2022: $166 b

ill

ion) of wh

ich $3.4 bill

ion of the

decrease was from unrated.

Stage 2 gross balance decreased by $3.6 bill

ion to $2 b

ill

ion (31 December 2022: $5 b

ill

ion).

Stage 3 gross balance was broadly stable at $0.2 bill

ion (31 December 2022: $0.1 b

ill

ion).

Amortised cost and FVOCI

2023

2022

Gross

$mill

ion

ECL

$mill

ion

Net

$mill

ion

Gross

$mill

ion

ECL

$mill

ion

Net

$mill

ion

Stage 1

158,314

(26)

158,288

166,103

(25)

166,078

AAA

61,920

(5)

61,915

73,933

(10)

73,923

AA- to AA+

34,244

(2)

34,242

42,327

(4)

42,323

A- to A+

38,891

(2)

38,889

29,488

(2)

29,486

BBB- to BBB+

13,098

(7)

13,091

7,387

(1)

7,386

Lower than BBB-

1,611

(2)

1,609

1,047

(2)

1,045

Unrated

8,550

(8)

8,542

11,921

(6)

11,915

– Strong

7,415

(7)

7,408

11,760

(6)

11,754

– Satisfactory

1,135

(1)

1,134

161

–

161

Stage 2

1,860

(34)

1,826

5,455

(90)

5,365

AAA

–

AA- to AA+

–

A- to A+

–

(1)

BBB- to BBB+

499

(3)

496

2,605

(16)

2,589

Lower than BBB-

893

(30)

863

2,485

(71)

2,414

Unrated

267

(1)

266

287

(2)

285

– Strong

217

–

217

(2)

– Satisfactory

(1)

–

– Higher risk

–

261

–

261

Stage 3

164

(61)

103

144

(106)

Lower than BBB-

(4)

(55)

Unrated

(57)

(51)

Gross balance¹

160,338

(121)

160,217

171,702

(221)

171,481

Stage 3 gross includes $80 mill

ion (31 December 2022: $28 m

ill

ion) or

inated cred

it-impa

ired debt secur

ies w

ith impa

irment of $14 m

ill

ion (31 December 2022:

$13 mill

ion)

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 $160,263 mill

ion

(31 December 2022: $171,640 mill

ion). Refer to the Analys

is of ﬁnanc

ial

instrument by stage table

273

Standard Chartered

– Annual Report 2023

Risk review and Capital review

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.

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.

The behavioural life for corporate overdraft facil

ies is

24 months.

274

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

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 2023 and

31 December 2022.

31 December 2023

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)

372

553

1,071

Modelled impact of multiple economic scenarios

–

Total ECL provis

ions before management judgements

392

571

104

1,115

Includes: Model performance post model adjustments

(3)

(28)

–

(31)

Judgemental post model adjustments

–

Management overlays

– China commercial real estate

141

–

141

– Other

–

Total modelled provis

ions

533

578

121

1,280

Of which: Stage 1

151

325

559

Stage 2

318

140

528

Stage 3

113

193

Stage 3 non-modelled provis

ions

3,587

646

–

4,321

Total credit impa

irment prov

ions

4,120

1,224

209

5,601

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

Includes: Model performance post model adjustments

(22)

(38)

–

(60)

Judgemental post model adjustments

–

Management overlays

– China commercial real estate

173

–

173

– Other

–

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

$22 mill

ion (31 December 2022: $55 m

ill

ion)

is in stage 1, $141 mill

ion (31 December 2022: $148 m

ill

ion)

in stage 2 and $nil mill

ion (31 December 2022: $16 m

ill

ion)

in stage 3

Includes ECL on cash and balances at central banks, accrued income, assets held for sale and other assets

275

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Model performance post model adjustments (PMA)

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 a model

performance post model adjustment is required to correct

for the ident

iﬁed model

issue. Model performance post

model adjustments are approved by the Group Credit

Model Assessment Committee and 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

monitor

ing thresholds.

As at 31 December 2023, model performance post model

adjustments have been applied for 5 models out of the total

of 172 models. In aggregate, these post model adjustments

reduce the Group’s impa

irment prov

ions by $31 m

ill

ion

(2 per cent of modelled provis

ions) compared w

ith a

$60 mill

ion decrease at 31 December 2022. The most

sign

iﬁcant of these relates to an adjustment to decrease

ECL for Korea Personal Loans as the IFRS 9 PD model is

sensit

ive to the h

igher range of interest rates.

In addit

ion to these model performance post model

adjustments, separate judgemental post model and

management adjustments have also been applied as

set out on pages 279 and 280.

2023

$ mill

ion

2022

$ mill

ion

Model performance PMAs

Corporate, Commercial & Institut

ional Bank

ing

(3)

(22)

Consumer, Private & Business Banking

(28)

(38)

Total model performance PMAs

(31)

(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 cl

ients.

The ‘base forecast’ of the economic variables and asset prices

is based on management’s view of the ﬁve-year outlook,

supported by projections from the Group’s

in-house research

team and outputs from a third-party model that project

specif

ic econom

ic variables and asset prices. The research

team takes consensus views into considerat

ion, and sen

ior

management review project

ions for some core country

variables against consensus when forming their view of the

outlook. For the period beyond ﬁve years, management

util

ises the

in-house research view and third-party model

outputs, which allow for a reversion to long-term growth rates

or norms. All projections are updated on a quarterly bas

is.

Forecast of key macroeconomic variables underlying

the 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 marginally in the near term. Global GDP

is forecast to grow by just below 3 per cent in 2024. World

GDP growth averaged 3.7 per cent for the 10 years prior to

COVID-19 (between 2010 and 2019). The world economy

should be able to achieve a soft landing after the most

aggressive monetary tighten

ing cycle

in years, although

risks abound. The lagged impact of aggressive central

bank tighten

ing

is likely to be felt most acutely in developed

economies.

Linger

ing

inﬂat

ion and geopol

ical developments are r

isks to

the global soft-landing scenario. The ongoing war in Ukraine,

conﬂicts in the Middle East, ongoing US-China tensions, and

the November 2024 US election are key sources of geopolit

ical

and polit

ical r

isk; they come against a backdrop of increas

ing

global fragmentation. On the inﬂat

ion front,

it is unclear

whether it can slow on a sustained basis. Core inﬂat

ion has

remained sticky in some markets, signall

ing pers

istent

underlying pressures. Structural factors – includ

ing h

igher

ﬁscal deﬁcits, the cost of the cl

imate transit

ion and recent

under-investment in fossil fuels – could keep inﬂat

ion h

igher

than during the pre-COVID period. Oil prices and geopolit

ical

conﬂict are also sources of upside inﬂat

ion r

isk.

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 the inherent uncertainty in economic forecast,

and the property of skewness (or non-linear

ity), IFRS 9 requ

ires

reported ECL to be a probabil

ity-we

ighted ECL, calculated

over a range of possible outcomes.

276

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

To assess the range of possible outcomes the Group simulates

a set of 50 scenarios around the Base Forecast, calculates

the ECL under each of them and assigns an equal weight of

2 per cent to each scenario outcome. These scenarios are

generated by a Monte Carlo simulat

ion, wh

ich addresses the

challenges of crafting many realist

ic alternat

ive scenarios in

the many countries in which the Group operates by means of

a model, which produces these alternative scenarios while

consider

ing the degree of h

istor

ical uncerta

inty (or volatil

ity)

observed from Q1 1990 to Q3 2023 around economic

outcomes, the trends in each macroeconomic variable

modelled and the correlation in the unexplained movements

around these trends. This naturally means that each of the

50 scenarios do not have a specif

ic narrat

ive, although

collectively they explore a range of hypothetical alternative

outcomes for the global economy, includ

ing scenar

ios that

turn out better than expected and scenarios that amplify

antic

ipated stresses.

The GDP graphs below illustrate the shape of the Base

Forecast for key footprint markets in relation to prior periods’

actuals. The long-term growth rates are based on the pace

of economic expansion expected for 2030. The tables below

provide a summary of the Group’s Base Forecast for these

markets. The peak/trough amounts show the highest and

lowest points with

in the Base Forecast.

China’s GDP growth is expected to ease to 4.8 per cent in

2024 from over 5 per cent in 2023. This reﬂects a continued

contraction in the property sector, a negative contribut

ion

from foreign trade, and low consumer and business

conﬁdence. Sim

ilarly, Hong Kong

is also facing several

headwinds with its GDP growth expected to ease to

2.9 per cent from 3.3 per cent in 2023. These headwinds

include a weak property sector and elevated interest rates

which will weigh on investment appetite for Hong Kong

assets. Lim

ited external demand from key markets w

ill also

weigh on exports. Growth in the US is expected to slow on the

impact of tighter ﬁnanc

ial and cred

it condit

ions and as the

impact of previous interest rate increases by the central bank

feed through to the economy. For sim

ilar reasons, Eurozone

growth is expected to remain weak in 2024. The uncertainty

over the ongoing war in Ukraine, conﬂicts in the Middle East

has hit global investor and business conﬁdence. Growth in

India is expected to ease to 6 per cent from 6.7 per cent in

2023 due to impact from pre-election uncertaint

ies, t

ighter

lending condit

ions and global recess

ion concerns.

In contrast, GDP growth for Singapore is expected to

accelerate to just over 2.5 per cent in 2024 from 0.8 per cent

last year. Favourable base effects may boost exports, despite

the soft global growth outlook. The global electronics and

semiconductor industry is showing signs of bottoming out.

Although a strong rebound is not expected, inventory

restocking may provide a small boost to Singapore’s

electronics sector. Korea’s economic growth will also beneﬁt

from the turnaround in this key sector. GDP growth there

is expected to reach 2.3 per cent in 2024 from 1.3 per cent

last year.

-8

-4

China GDP

YoY%

Actual

Long-term growth

Forecast

-10

-8

-6

-4

-2

Hong Kong GDP

YoY%

Actual

Long-term growth

Forecast

-4

-3

-2

-1

Korea GDP

YoY%

Actual

Long-term growth

Forecast

-15

-10

-5

Singapore GDP

YoY%

Actual

Long-term growth

Forecast

-30

-20

-10

India GDP

YoY%

Actual

Long-term growth

Forecast

277

Standard Chartered

– Annual Report 2023

Risk review and Capital review

2023 year-end forecasts

China

Hong Kong

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices⁵

(YoY %)

GDP growth

(YoY %)

Unemployment

3-month

interest rates

House prices

(YoY %)

Base forecast

2023

5.4

4.1

2.0

(0.8)

3.3

3.0

4.8

(6.8)

2024

4.8

4.1

1.7

3.9

2.9

3.4

4.6

2.1

2025

4.5

4.0

1.8

5.6

2.5

3.4

4.1

3.8

2026

4.3

4.0

2.0

4.5

2.3

3.4

3.5

2.8

2027

4.0

3.9

2.2

4.4

2.4

3.4

2.5

2.7

5-year average

4.3

4.0

2.1

4.6

2.5

3.4

2.8

Quarterly peak

5.7

4.1

2.5

7.2

3.8

3.4

5.0

4.6

Quarterly trough

3.8

1.7

1.5

3.4

2.3

(1.1)

Monte Carlo

Low

0.6

3.3

0.8

(1.5)

(3.8)

1.4

0.3

(19.3)

High

7.7

4.4

3.8

12.0

8.2

6.4

8.3

25.5

2023 year-end forecasts

Singapore

Korea

GDP growth

(YoY%)

Unemployment⁶

3-month

interest rates

House prices

(YoY%)

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY %)

Base forecast

2023

0.8

2.7

4.1

6.8

1.3

2.7

3.8

(5.8)

2024

2.6

2.8

3.8

(0.2)

2.3

3.3

3.5

3.3

2025

3.1

2.8

3.3

0.4

2.5

3.3

3.1

5.0

2026

3.3

2.8

2.9

2.4

3.1

3.5

2027

2.8

2.4

3.9

2.2

3.0

3.1

2.4

5-year average

2.9

2.8

2.9

2.2

2.3

3.1

3.3

Quarterly peak

3.8

2.9

4.1

3.9

2.6

3.5

3.7

5.3

Quarterly trough

1.9

2.8

2.3

(0.7)

2.0

3.0

3.1

(0.3)

Monte Carlo

Low

(2.4)

1.7

0.6

(16.2)

(2.3)

1.4

0.7

(6.1)

High

8.5

3.8

5.9

19.2

7.0

5.8

6.3

12.5

2023 year-end forecasts

India

Brent Crude

$ pb

GDP growth

(YoY%)

Unemployment

3month

interest rates

House prices

(YoY%)

Base forecast

2023

6.7

6.4

5.3

84.2

2024

6.0

5.9

5.3

89.5

2025

6.0

6.3

90.3

2026

6.4

6.3

6.5

92.8

2027

6.5

6.2

6.4

84.9

5-year average

6.2

6.1

88.2

Quarterly peak

9.1

6.3

6.5

93.8

Quarterly trough

4.4

5.8

4.7

82.8

Monte Carlo

Low

2.1

2.7

(0.5)

46.0

High

10.5

9.9

13.8

137.8

278

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

2022 year-end forecasts

China

Hong Kong

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices⁵

(YoY%)

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY%)

5-year average

5.1

3.9

2.3

3.6

2.3

3.0

2.8

1.7

Quarterly peak

7.9

4.1

3.0

5.0

4.3

3.1

3.6

4.9

Quarterly 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 year-end forecasts

Singapore

Korea

GDP growth

(YoY%)

Unemployment⁶

3-month

interest rates

House prices

(YoY%)

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY%)

5-year average

2.7

3.0

3.1

2.8

2.2

3.1

2.1

Quarterly peak

3.7

3.2

4.7

2.5

3.3

3.9

2.8

Quarterly trough

1.7

3.0

2.4

(2.4)

1.8

3.0

2.7

(0.4)

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 year-end forecasts

India

Brent crude

$ pb

GDP growth

(YoY%)

Unemployment

3-month

interest rates

House prices

(YoY%)

5-year average

6.4

5.6

5.7

106.6

Quarterly peak

7.7

6.3

7.2

118.8

Quarterly 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

Data presented are those used in the calculation of ECL. These may differ slightly to forecasts presented elsewhere in the Annual Report as they are ﬁnal

ised

before the period end.

5 year averages reported cover Q1 2024 to Q4 2028 for the 2023 annual report. They cover Q1 2023 to Q4 2027 for the numbers reported for the 2022 annual report.

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.

A judgemental management adjustment is held in respect of the China commercial real estate sector as discussed on page 280.

Singapore unemployment rate covers the resident unemployment rate, which refers to cit

izens and permanent res

idents.

279

Standard Chartered

– Annual Report 2023

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 alternative scenarios that

cover our global footprint.

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 $44 mill

ion (31 December 2022: $50 m

ill

ion). The CCIB and Central

and other items portfolios accounted for $26 mill

ion (31 December 2022: $44 m

ill

ion) of the calculated non-l

inear

ity w

ith the

remain

ing $18 m

ill

ion (31 December 2022: $6 m

ill

ion) attr

ibutable to CPBB portfolios. As the non-linear

ity calculated for the

CPBB portfolios at 31 December 2022 was relatively low, a judgemental post model adjustment of $34 mill

ion was appl

ied.

Subsequent stand-back analysis was completed during the ﬁrst half of 2023 to benchmark the ECL non-linear

ity calculated

using the Monte Carlo model, which conﬁrmed that the calculated non-linear

ity for CPBB portfol

ios was appropriate and the

judgemental post model adjustment was released.

The impact of 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 and other judgemental adjustments.

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 2023

1,071

165

1.280

Total expected credit loss at 31 December 2022

1,267

229

1,580

Includes judgemental post model adjustment of $nil mill

ion (31 December 2022: $34 m

ill

ion) relat

ing to Consumer, Private and Business Banking

Total modelled ECL comprises stage 1 and stage 2 balances of $1,105 mill

ion (31 December 2022: $1,281 m

ill

ion) and $193 m

ill

ion (31 December 2022: $299 m

ill

ion)

of modelled ECL on stage 3 loans

Includes ECL on Assets held for sale of $37 mill

ion (31 December 2022: $10 m

ill

ion)

The average expected credit loss under multiple scenarios is 4 per cent (2022: 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 ow

ing to lim

ited respons

iveness to macroeconomic impacts for structural reasons, such as sign

iﬁcant

collateralisat

ion as w

ith the CPBB mortgage portfolios.

Judgemental adjustments

As at 31 December 2023, 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 post model adjustments reported on

page 275. They are reassessed quarterly and are reviewed and approved by the IFRS 9 Impairment Committee and will be

released when no longer relevant.

31 December 2023

Corporate,

Commercial &

Institut

ional

Banking

$ mill

ion

Consumer, Private & Business Banking

Central &

other

$ mill

ion

Total

$ mill

ion

Mortgages

$ mill

ion

Credit Cards

$ mill

ion

Other

$ mill

ion

Total

$ mill

ion

Judgemental post model adjustments

–

Judgemental management overlays:

– China CRE

141

–

141

– Other

–

Total judgemental adjustments

141

165

Judgemental adjustments by stage:

Stage 1

–

Stage 2

124

–

(3)

138

Stage 3

–

31 December 2022

Corporate,

Commercial &

Institut

ional

Banking

$ mill

ion

Consumer, Private & Business Banking

Central &

other

$mill

ion

Total

$mill

ion

Mortgages

$ mill

ion

Credit Cards

$ mill

ion

Other

$ mill

ion

Total

$mill

ion

Judgemental post model adjustments

–

Judgemental management overlays:

– China CRE

173

–

173

– Other

–

Total judgemental adjustments

182

–

263

Judgemental adjustments by stage:

Stage 1

–

Stage 2

136

–

165

Stage 3

–

280

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Judgemental post model adjustments

As at 31 December 2023, judgemental post model

adjustments to increase ECL by a net $2 mill

ion (31 December

2022: $44 mill

ion

increase) have been applied to certain CPBB

models, primar

ily to adjust for temporary factors

impact

ing

modelled outputs. These will be released when these factors

normalise. At 31 December 2022, $34 mill

ion of the

increase in

ECL related to multiple economic scenarios, which was fully

released in the ﬁrst half of 2023 (see ’Impact of multiple

economic scenarios’).

Judgemental management overlays

China CRE

The real estate market in China has now been in a downturn

since late 2021 as evidenced by continued decline in sales,

and investments in the sector. Liqu

ity issues experienced by

Chinese property developers continued into 2023 with more

developers defaulting on their obligat

ions both offshore and

onshore. During 2023, authorit

ies on the ma

inland have

introduced a slew of polic

ies to help rev

ive the sector and

restore buying sentiments. This has helped stabil

ise the

market to an extent in some cit

ies, but demand and home

prices remain muted overall. Continued policy relaxations,

includ

ing those related to house purchase restr

ict

ions,

completion support for elig

ible projects from onshore ﬁnancial

inst

itut

ions, relaxation in mortgage rates, and further support

for affordable housing, are key for reversing the continued

decline in sales and investments and ensuring a stable outlook

for 2024.

The Group’s loans and advances to China CRE clients was

$2.4 bill

ion at 31 December 2023 (31 December 2022:

$3.2 bill

ion). Cl

ient level analysis continues to be done, with

clients being placed on purely precautionary or non-purely

precautionary early alert, where appropriate, for closer

monitor

ing. G

iven the evolving nature of the risks in the

China CRE sector, a management overlay of $141 mill

ion

(31 December 2022: $173 mill

ion) has been taken by est

imat

ing

the impact of further deteriorat

ion to exposures

in this sector.

The decrease from 31 December 2022 was primar

ily dr

iven

by repayments and movement of some of the exposures

to Stage 3.

Other

Overlays of $5 mill

ion (31 December 2022: $16 m

ill

ion) have

also been applied in CPBB to capture macroeconomic

environment challenges caused by sovereign defaults or

heightened sovereign risk, the impact of which is not fully

captured in the modelled outcomes. An overlay of $17 mill

ion

(2022: nil) was applied in Central & Other due to a temporary

market dislocat

ion

in the Africa and Middle East region.

The remain

ing COVID-19 overlay

in CPBB of $21 mill

ion that

was held as at 31 December 2022 has been fully released in

2023. The stage 3 overlay in CCIB of $9 mill

ion that was held as

at 31 December 2022 following the Sri Lanka Sovereign default

was also fully released in 2023.

Stage 3 assets

Credit-impa

ired assets managed by Stressed Asset Group

(SAG) incorporate forward-looking economic assumptions

in respect of the recovery outcomes ident

iﬁed and are

assigned ind

idual probabil

ity we

ight

ings per IFRS 9.

These assumptions are not based on a Monte Carlo

simulat

ion but are

informed by the Base Forecast.

Sensit

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 in particular to explore the current

uncertaint

ies over commod

ity prices. The ﬁrst scenario, Global

Stagﬂation, explores a temporary spike (relative to base) in

commodity prices, inﬂat

ion and

interest rates in the near term

from the ongoing war in Ukraine and conﬂicts in the Middle

East. The second more severe scenario is based on the Bank of

England’s most recent Annual Cyclical Scenario (ACS), which

explores a persistent rise in commodity prices, inﬂat

ion and

interest rates.

281

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Baseline

Global Stagﬂation

ACS

Five year

average

Peak/Trough

Five year

average

Peak/Trough

Five year

average

Peak/Trough

China GDP

4.3

5.7 / 3.8

3.7

6.2 / (0.8)

2.2

3.9 / (3.4)

China unemployment

4.0

4.1 / 3.8

5.3

6.4 / 3.8

5.3

5.7 / 4.6

China property prices

4.6

7.2 / 1.5

4.4

15.9 / (17.5)

(5.5)

9.2 / (16.3)

Hong Kong GDP

2.5

3.8 / 1.5

1.8

5.6 / (1.4)

(0.6)

2.9 / (9.4)

Hong Kong unemployment

3.4

3.4 / 3.4

5.4

7.4 / 3.4

6.3

7.5 / 3.9

Hong Kong property prices

2.8

4.6 / (1.1)

1.6

9.4 / (3.8)

(9.7)

6.2 / (22.5)

US GDP

1.7

2.3 / 0.8

1.4

2.7 / (1.3)

0.1

1.5 / (4.8)

Singapore GDP

2.9

3.8 / 1.9

2.7

5.0 / (1.6)

1.2

5.9 / (8.7)

India GDP

6.2

9.1 / 4.4

4.9

6.6 / 0.6

4.2

7.3 / (0.7)

Crude oil

88.2

93.8 / 82.8

95.3

152.9 / 82.8

118

147.9 / 83.6

Period covered from Q1 2024 to Q4 2028

Base (GDP, YoY%)

Global Stagﬂation

Difference from Base

2024

2025

2026

2027

2028

2024

2025

2026

2027

2028

2024

2025

2026

2027

2028

China

4.8

4.5

4.3

4.0

3.8

1.5

1.6

4.8

5.7

4.8

(3.3)

(2.9)

0.5

1.7

1.0

Hong Kong

2.9

2.5

2.3

2.4

2.2

0.9

(1.0)

1.7

5.0

2.4

(2.0)

(3.5)

(0.6)

2.5

0.2

1.4

1.5

1.8

1.9

0.0

0.2

1.8

2.6

2.4

(1.5)

(1.3)

0.0

0.7

0.5

Singapore

2.6

3.1

3.3

2.8

2.6

0.3

0.6

3.7

4.8

4.0

(2.3)

(2.4)

0.4

2.0

1.3

India

6.0

5.5

6.5

6.4

6.6

2.6

3.9

5.6

6.5

5.7

(3.4)

(1.6)

(0.8)

0.1

(0.9)

Each year is from Q1 to Q4. For example 2024 is from Q1 2024 to Q4 2024.

Base (GDP, YoY%)

ACS

Difference from Base

2024

2025

2026

2027

2028

2024

2025

2026

2027

2028

2024

2025

2026

2027

2028

China

4.8

4.5

4.3

4.0

3.8

(0.9)

1.3

3.7

3.4

(5.6)

(3.2)

(0.5)

(0.6)

(0.4)

Hong Kong

2.9

2.5

2.3

2.4

2.2

(5.3)

(3.5)

2.6

1.8

1.5

(8.1)

(6.0)

0.3

(0.6)

(0.7)

1.4

1.5

1.8

1.9

(1.7)

(1.5)

1.0

1.3

(3.2)

(2.9)

(0.8)

(0.6)

Singapore

2.6

3.1

3.3

2.8

2.6

(3.8)

0.0

4.2

2.9

2.7

(6.4)

(3.1)

0.9

0.1

India

6.0

5.5

6.5

6.4

6.6

2.8

2.2

4.9

5.3

5.5

(3.2)

(3.3)

(1.6)

(1.1)

(1.2)

Each year is from Q1 to Q4. For example 2024 is from Q1 2024 to Q4 2024

The total modelled stage 1 and 2 ECL provis

ions (

includ

ing

both on and off-balance sheet instruments) would be

approximately $153 mill

ion h

igher under the Global

Stagﬂation scenario, and $489 mill

ion h

igher under the ACS

scenario than the baseline ECL provis

ions (wh

ich excluded

the impact of multiple economic scenarios and management

overlays which may already capture some of the risks in these

scenarios). Stage 2 exposures as a proportion of stage 1 and 2

exposures would increase from 3.7 per cent in the base case

to 4.1 per cent and 6.5 per cent respectively under the Global

Stagﬂation and ACS scenarios. This includes the impact of

exposures transferring to stage 2 from stage 1 but does not

consider an increase in stage 3 defaults.

Under both scenarios, the major

ity of the

increase in ECL

in CCIB came from the main corporate and CRE portfolios.

For the main corporate portfolios, ECL would increase by

$20 mill

ion and $79 m

ill

ion for the Global stagﬂat

ion and

ACS scenarios respectively and the proportion of stage 2

exposures would increase from 5.5 per cent in the base case

to 5.9 per cent and 8.2 per cent respectively.

For the CPBB portfolios, most of the increase in ECL came from

the unsecured retail portfolios, with the Taiwan and Korea

Personal Loans impacted. Under the Global Stagﬂation and

ACS scenarios, Credit card ECL would increase by $28 mill

ion

and $66 mill

ion respect

ively, largely in the Singapore and

Hong Kong portfolios and the proportion of stage 2 credit

card exposures would increase from 1.5 per cent in the base

case to 2.1 per cent and 3.3 per cent for each scenario

respectively, with the Singapore portfolio most impacted.

Mortgages ECL would increase by $1 mill

ion and $45 m

ill

ion

for each scenario respectively, with portfolios in Hong Kong

and Korea most impacted and the proportion of stage 2

mortgages would increase from 1.2 per cent in the base

case to 1.7 per cent and 14 per cent respectively, with the

Hong Kong and Singapore portfolios most 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.

282

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Gross as

reported

$ mill

ion

ECL as

reported

$ mill

ion

ECL

Base case

$ mill

ion

ECL Global

Stagﬂation

$ mill

ion

ECL ACS

$ mill

ion

Stage 1 modelled

Corporate, Commercial & Institut

ional Bank

ing

337,189

134

124

136

164

Consumer, Private & Business Banking

190,999

315

306

355

455

Ventures

1,015

Central & Other items

194,673

Total stage 1 excluding management judgements

723,876

499

477

546

684

Stage 2 modelled

Corporate, Commercial & Institut

ional Bank

ing

16,873

194

184

234

333

Consumer, Private & Business Banking

2,472

143

134

167

263

Ventures

Central & Other items

2,869

Total stage 2 excluding management judgements

22,268

379

357

441

639

Total Stage 1 & 2 modelled

Corporate, Commercial & Institut

ional Bank

ing

354.062

328

308

370

497

Consumer, Private & Business Banking

193,471

458

440

522

718

Ventures

1,069

Central & Other items

197,542

Total excluding management judgements

746,144

878

834

987

1,323

Stage 3 exposures excluding other assets

8,144

4,499

Other ﬁnancial assets

111,478

ECL from management judgements

165

Total ﬁnancial assets reported at 31 December 2023

865,766

5,601

Gross balances includes both on- and off- balance sheet instruments; allocation between stage 1 and 2 will differ by scenario

Includes ECL for both on- and off- balance sheet instruments

Includes cash and balances at central banks, Accrued income, Other ﬁnanc

ial assets; and Assets held for sale

Sign

iﬁcant

increase in credit risk (SICR)

Quantitat

ive cr

iter

SICR is assessed by comparing the risk of default at the

reporting date to the risk of default at orig

inat

ion. Whether

a change in the risk of default is sign

iﬁcant or not

is assessed

using quantitat

ive and qual

itat

ive cr

iter

ia. These cr

iter

have been separately deﬁned for each business and where

meaningful are consistently applied across business lines.

Assets are considered to have experienced SICR if they have

breached both relative and absolute thresholds for the

change in the average annualised IFRS 9 lifet

ime probab

ity

of default (IFRS 9 PD) over the residual term of the exposure.

The absolute measure of increase in credit risk is used to

capture instances where the IFRS 9 PDs on exposures are

relatively low at in

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 IFRS 9 PDs

rather than relying on backward-looking backstops such

as arrears

•

Relationsh

ip w

ith business and product risk proﬁles – the

thresholds reﬂect the relative risk differences between

different products, and are aligned to business processes

For CCIB clients the quantitat

ive thresholds are a relat

ive

100 per cent increase in IFRS 9 PD and an absolute change

in IFRS 9 PD of between 50 and 100 bps.

For Consumer and Business Banking clients, portfolio specif

quantitat

ive thresholds

in Hong Kong, Singapore, Malaysia,

UAE and Taiwan are applied 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 with

in a range of customer

util

isat

ion lim

its (for cred

it cards) and remain

ing tenor (for

personal loans) and different

iate between exposures that

are current and those that are 1 to 29 days past due.

283

Standard Chartered

– Annual Report 2023

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%

–

For all other Consumer and Business Banking portfolios, the

quantitat

ive SICR thresholds appl

ied are a relative threshold

of 100 per cent increase in IFRS 9 PD and an absolute change

in IFRS 9 PD of between 100 and 350 bps depending on the

product. Certain countries have a higher absolute threshold

reﬂecting the lower default rate with

in the

ir personal loan

portfolios compared with the Group’s other personal loan

portfolios.

Private Banking clients are assessed qualitat

ively, based

on a delinquency measure relating to collateral top-ups or

sell-downs.

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 (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 SICR to

the extent that certain risks may not have been captured by

the models or through the above criter

ia. Such

instances are

expected to be rare, for example due to events and material

uncertaint

ies ar

ing close to the report

ing 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, Singapore credit

cards, Taiwan personal loans) for which a statist

ical model

has been built, 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 273. For these

portfolios, the orig

inal l

ifet

ime IFRS 9 PD term structure

determined based on the orig

inal Appl

icat

ion Score or R

isk

Segment of the client.

Qualitat

ive and backstop cr

iter

Accounts that are 30 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 tr

igger. In

addit

ion, SICR

is also assessed for where specif

ic r

isk elevation

events have occurred in a market that are not yet reﬂected

in modelled outcomes or in other metrics. This is applied

collectively either to impacted specif

ic products/customer

cohorts or across the overall consumer banking portfolio in

the affected market.

284

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

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.

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 using the same thresholds as for

Corporate, Commercial and Institut

ional Bank

ing clients.

Qualitat

ive cr

iter

Debt securit

ies ut

ise the same qual

itat

ive cr

iter

ia as the

Corporate, Commercial and Institut

ional Bank

ing client

segments, includ

ing be

ing placed on non-purely

precautionary 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 charge-

off and recoveries. Gross charge-off and/or loss provis

ions are

recognised when it is established that the account is unlikely

to pay through the normal process. Recovery of unsecured

debt post credit impa

irment

is recognised based on actual

cash collected, either directly from clients or through the sale

of defaulted loans to third-party inst

itut

ions. Release of credit

impa

irment prov

ions for secured loans

is recognised if the

loan outstanding is paid in full (release of full provis

ion), or the

provis

ion

is higher than the loan outstanding (release of the

excess provis

ion).

CCIB and Private Banking clients

Credit-impa

ired accounts are managed by the Group’s

special

ist recovery un

it, Stressed Asset Group (SAG), which is

independent from its main businesses. Where a portion of

exposure is considered not recoverable, 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 Upside,

Downside and Likely recovery outcomes). Where the exposure

is secured by collateral, the values used will incorporate the

impact of forward-looking economic informat

ion on the value

recoverable collateral and time to realise the same.

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

provides 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.

285

Standard Chartered

– Annual Report 2023

Risk review and Capital review

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.

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, R

isk Event Overlays account for events that are

sudden and therefore not captured in the Base Case Forecast

or the resulting ECL calculated by the models. All Risk Event

Overlays 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. Risk Event Overlays are subject to quarterly review

and re-approval by the IIC and will be released when the risks

are no longer relevant.

286

Standard Chartered

– Annual Report 2023

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 with 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 income streams are not hedged,

the Group is subject to Structural Foreign Exchange Risk

which is reﬂected in reserves

A summary of our current polic

ies and pract

ices regarding

Market Risk management is provided in the Princ

ipal R

isks

section (page 323).

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

•

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 2023 was $53.3 mill

ion, 1.5 per cent h

igher than 2022

($52.5 mill

ion). The year end level of total trad

ing and non-

trading VaR in 2023 was $44.5 mill

ion, 20.2 per cent lower

than 2022 ($55.8 mill

ion), due to a reduct

ion in non-trading

posit

ions.

For the trading book, the average level of VaR in 2023 was

$21.5 mill

ion, 19.4 per cent h

igher than 2022 ($18.0 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

2023

2022

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

39.5

54.1

23.2

30.5

27.8

42.1

21.0

24.7

Credit Spread Risk

33.8

48.0

25.0

31.7

34.2

47.1

20.3

32.9

Foreign Exchange Risk

7.0

12.2

4.2

7.4

6.5

10.3

4.8

6.8

Commodity Risk

5.8

9.7

3.7

4.3

7.0

11.9

3.5

8.3

Equity Risk

0.1

0.4

–

0.1

0.2

–

0.1

Divers

iﬁcation effect

(32.9)

N/A

(29.4)

(23.1)

N/A

(17.0)

Total

53.3

65.5

44.2

44.5

52.5

64.1

40.3

55.8

Trading

2023

2022

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

13.1

20.4

7.7

11.6

8.1

11.7

5.3

9.0

Credit Spread Risk

9.4

12.4

7.4

9.4

9.5

14.9

5.0

8.7

Foreign Exchange Risk

7.0

12.2

4.2

7.4

6.5

10.3

4.8

6.8

Commodity Risk

5.8

9.7

3.7

4.4

7.0

11.9

3.5

8.3

Equity Risk

–

Divers

iﬁcation effect

(13.8)

N/A

(11.5)

(13.1)

N/A

(11.0)

Total

21.5

30.6

14.7

21.3

18.0

24.4

12.6

21.8

287

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Non-trading

2023

2022

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

34.2

43.6

19.7

23.9

26.3

44.5

18.1

23.5

Credit Spread Risk

28.3

40.1

21.5

24.4

28.8

37.8

18.7

29.2

Equity Risk

0.1

0.4

–

0.1

0.2

–

0.1

Divers

iﬁcation effect

(18.6)

N/A

(12.7)

(10.6)

N/A

(11.5)

Total

44.0

53.4

32.0

35.6

44.6

52.5

35.1

41.3

The following table sets out how trading and non-trading VaR is distr

ibuted across the Group’s bus

inesses:

2023

2022

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

53.3

65.5

44.2

44.5

52.5

64.1

40.3

55.8

Trading

Macro Trading

13.8

20.2

9.2

15.4

12.8

17.4

10.2

16.9

Global Credit

12.8

18.2

8.5

10.1

15.7

4.2

8.4

XVA

4.8

7.0

3.4

4.5

3.9

5.0

2.4

4.6

Divers

iﬁcation effect

(9.9)

N/A

(8.7)

(8.8)

N/A

(8.1)

Total

21.5

30.6

14.7

21.3

24.4

12.6

21.8

Non-trading

Treasury

43.4

50.2

31.1

34.9

38.7

47.5

29.7

40.3

Global Credit

3.9

13.6

2.0

4.0

3.4

5.0

2.3

3.5

Listed Private Equity

0.1

0.4

0.0

0.1

0.2

–

0.1

Divers

iﬁcation effect

(3.4)

N/A

(3.3)

2.4

N/A

(2.6)

Total

44.0

53.4

32.0

35.6

44.6

52.5

35.1

41.3

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

Macro Trading comprises the Rates, FX and Commodit

ies bus

inesses

4 Treasury comprises Treasury Markets and Treasury Capital Management businesses

Risks not in VaR

In 2023, 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

•

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

•

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

Addit

ional cap

ital is set aside to cover such ‘risks not in VaR’.

288

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Backtesting

In 2023, there were ﬁve regulatory backtesting negative exceptions at Group level (in 2022 there were eight regulatory

backtesting negative exceptions at Group level). Group exceptions occurred on:

•

16 March: After the US authorit

ies put S

icon Valley Bank and S

ignature Bank into admin

istrat

ion there were strong market

reactions, includ

ing notable

interest rate yield rises on 16 March

•

1 June: After announcement of planned potential economic reforms in Niger

ia, there were sharp movements

in the offshore

Naira FX market in antic

ipat

ion of Naira devaluation

•

12 June: After the governor of the Central Bank of Niger

ia was removed there were further sharp movements

in the offshore

Naira FX market

•

1 November and 3 November: After the Niger

ian government announced on 30 October that

it plans to target an exchange

rate of 750 Naira per dollar, the onshore spot market became more volatile on low volumes.

The VaR model is currently being enhanced to increase its responsiveness to abrupt upturns in market volatil

ity.

There have been ﬁve Group exceptions in the previous 250 business days. This 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 proﬁt

and 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.

-60

-40

-20

100

120

140

2023 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 2023

Feb 2023

Mar 2023

Apr 2023

May 2023

Jun 2023

Jul 2023

Aug 2023

Sep 2023

Oct 2023

Nov 2023

Dec 2023

Posit

ive except

ions

Trading loss days

2023

2022

Number of loss days reported for Financ

ial Markets trad

ing book total product income

Includes credit valuation adjustment (CVA) and funding valuation adjustment (FVA), and excludes Treasury Markets business (non-trading), period

ic valuat

ion

changes for Capital Markets, expected loss provis

ions, overn

ight indexed swap (OIS) discount

ing and account

ing adjustments such as debit valuation

adjustments

Average daily income earned from Market Risk-related activ

ies

(audited)

The average level of total trading daily income in 2023 was $12 mill

ion, 14 per cent lower than 2022 ($14 m

ill

ion). The decrease

is largely attributable to lower income in Commodit

ies

in 2023 on the back of lower volatil

ity and fall

ing crude oil prices.

Addit

ionally, the decrease

in FX business was on the back of lower cross-border ﬂows and muted FX volatil

ity.

The average level of total non-trading daily income in 2023 was -$0.7 mill

ion, 217 per cent lower than 2022 ($0.6 m

ill

ion).

The decrease is primar

ily attr

ibutable to lower income from the Credit Solutions business.

Trading

2023

$mill

ion

2022

$mill

ion

Interest Rate Risk

4.5

5.0

Credit Spread Risk

1.2

1.4

Foreign Exchange Risk

5.5

6.3

Commodity Risk

0.8

1.3

Equity Risk

–

Total

12.0

14.0

289

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Non-trading

$mill

ion

$mill

ion

Interest Rate Risk

(0.1)

–

Credit Spread Risk

(0.7)

0.6

Equity Risk

0.1

–

Total

(0.7)

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 non funded

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

Structural foreign exchange exposures

The table below sets out the princ

ipal structural fore

ign exchange exposures (net of investment hedges) of the Group.

2023

$mill

ion

2022

$mill

ion

Hong Kong dollar

4,662

3,333

Renminb

3,523

3,497

Indian rupee

3,309

4,396

Singapore dollar

2,415

1,888

Korean won

2,114

2,409

Malaysian ringg

1,540

1,571

Taiwanese dollar

1,222

1,055

Euro

1,125

893

Bangladeshi Taka

1,007

832

Thai baht

782

UAE dirham

709

670

Pakistan

i rupee

306

352

Indonesian rupiah

293

261

Other

3,206

3,233

26,213

25,172

Prior year has been represented to provide granular currency details

As at 31 December 2023, the Group had taken net investment

hedges using derivat

ive ﬁnancial

instruments to partly

cover its exposure to the Hong Kong dollar of $5,603 mill

ion

(31 December 2022: $6,236 mill

ion), Korean won of

$2,884 mill

ion (31 December 2022: $3,330 m

ill

ion), Ind

ian rupee

of $1,809 mill

ion (31 December 2022: $620 m

ill

ion), Renm

inb

i of

$1,516 mill

ion (31 December 2022: $1,608 m

ill

ion), UAE d

irham

of $1,470 mill

ion (31 December 2022: $1,334 m

ill

ion), S

ingapore

dollar of $1,047 mill

ion (31 December 2022: $1,608 m

ill

ion),

Taiwanese dollar of $1,025 mill

ion (31 December 2022: $1,075

mill

ion) and South Afr

ican rand of $64 mill

ion (31 December

2022: $nil 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 $260 mill

ion

(31 December 2022: $421 mill

ion). Changes

in the valuation

of these posit

ions are taken to reserves. For analys

is of the

Group’s capital posit

ion and requ

irements, refer to the

Capital Review (page 338).

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 transact

ions.

In addit

ion, the Group enters

into credit support annexes

(CSAs) with counterparties where collateral is deemed a

necessary or desirable mit

igant to the exposure. Cash

collateral includes collateral called under a variat

ion marg

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.

290

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

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 cashﬂow management activ

ies.

In 2023, the Group issued approximately $8.1 bill

ion of

securit

ies, all

in the form of senior debt, from its holding

company (HoldCo) Standard Chartered PLC (2022 $5.2 bill

ion

of senior debt securit

ies, $0.75 b

ill

ion of subord

inated debt

securit

ies and $1.25 b

ill

ion of Add

ional T

ier 1 securit

ies). In the

next 12 months, approximately $8.5 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.

Group’s composition of liabilities and equity

31 December 2023

4.3

6.8

8.9

Geographic distr

ibut

ion of customer accounts

31 December 2023

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

65.0

7.4

1.5

6.1

100%

Asia

Africa &

Middle East

Europe & Americas

100%

69.5

6.0

24.5

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, recovery

capacity and net stable funding ratio (NSFR). In addit

ion to

the Board Risk Appetite, there are further lim

its that apply

at Group and country level such as, external wholesale

borrowing (WBE) and cross currency lim

its.

Liqu

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 per 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 145 per cent

(31 December 2022: 147 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.

2023

$mill

ion

2022

$mill

ion

Liqu

ity buffer

185,643

177,037

Total net cash outﬂows

128,111

120,720

Liqu

ity coverage ratio

145%

147%

291

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Stress 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.

Our 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 – Captures the l

iqu

ity

impact from an id

iosyncrat

ic event affecting Standard

Chartered only with the rest of the market assumed to be

operating normally.

•

Market wide – Captures the liqu

ity impact from a

market-wide cris

is affect

ing all partic

ipants

in a country,

region or globally.

•

Combined – Assumes both Standard Chartered-specif

and market-wide events affect the Group simultaneously

and hence is the most severe scenario.

All scenarios include, but are not lim

ited to, modelled outﬂows

for retail and wholesale funding, off-balance sheet funding

risk, cross-currency funding risk, intraday risk, franchise risk

and risks associated with a deteriorat

ion of a ﬁrm’s cred

rating. Concentration risk approach has been enhanced to

capture single name and industry concentration.

Stress testing results show that a posit

ive surplus was

mainta

ined under all scenar

ios at 31 December 2023, and

respective countries were 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

2023 were A+ with stable outlook (Fitch), A+ with stable

outlook (S&P) and A1 with stable outlook (Moody’s). As of

31 December 2023, the estimated contractual outﬂow of

a three-notch long-term ratings downgrade is $1.1 bill

ion.

External wholesale borrowing

A risk lim

is set to prevent excessive reliance on wholesale

borrowing. With

in the deﬁnit

ion of wholesale borrowing, lim

its

are applied to all branches and operating subsid

iar

ies in the

Group and as at the reporting date, the Group remained

with

in the 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

4.1 per cent to 53.3 per cent, driven by an increase in customer

deposits of 3 per cent and with a reduction of 5 per cent in

customer loans and advances. Deposits from customers as at

31 December 2023 are $486,666 mill

ion (31 December 2022:

$473,383 mill

ion).

2023

$mill

ion

2022

$mill

ion

Total loans and advances to customers

1,2

259,481

271,897

Total customer accounts

486,666

473,383

Advances-to-deposits ratio

53.3%

57.4%

Excludes reverse repurchase agreement and other sim

ilar secured lend

ing of $13,996 mill

ion and

includes loans and advances to customers held at fair value

through proﬁt and loss of $7,212 mill

ion

Loans and advances to customers for the purpose of the advances-to-deposits ratio excludes $20,710 mill

ion of approved balances held w

ith central banks,

conﬁrmed as repayable at the point of stress (31 December 2022: $20,798 mill

ion)

Includes customer accounts held at fair value through proﬁt or loss of $17,248 mill

ion (31 December 2022: $11,706 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 136 per cent.

292

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Liqu

ity pool

The liqu

ity value of the Group’s LCR elig

ible l

iqu

ity pool at the reporting date was $186 bill

ion. The ﬁgures

in the table below

account for haircuts, currency convertib

ity and portabil

ity constra

ints per PRA rules for transfer restrict

ions, 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

LCR per PRA rulebook.

2023

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

32,504

2,456

46,715

81,675

Central banks, governments/public sector entit

ies

54,562

1,363

15,843

71,768

Multilateral development banks and internat

ional organ

isat

ions

5,202

961

10,754

16,917

Other

130

–

1,161

1,291

Total Level 1 securit

ies

92,398

4,780

74,473

171,651

Level 2A securit

ies

6,194

128

6,946

13,268

Level 2B securit

ies

348

–

376

724

Total LCR elig

ible assets

98,940

4,908

81,795

185,643

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

293

Standard Chartered

– Annual Report 2023

Risk review and Capital review

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

valued 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 63 per cent maturing in less than one year. The less

than six-month cumulative net funding gap improved by $35 bill

ion as of 31 December 2023 compared to 31 December 2022.

2023

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

63,752

–

6,153

69,905

Derivat

ive ﬁnancial

instruments

12,269

10,632

6,910

3,611

2,921

4,650

6,038

3,403

50,434

Loans and advances

to banks

1,2

28,814

23,384

10,086

4,929

5,504

1,583

2,392

1,098

77,790

Loans and advances

to customers

1,2

86,695

55,009

25,492

15,392

14,537

25,987

26,545

95,829

345,486

Investment securit

ies

12,187

28,999

17,131

18,993

20,590

24,244

44,835

50,168

217,147

Other assets

17,611

31,729

1,286

409

587

10,300

62,082

Total assets

221,328

149,753

60,905

43,334

44,139

56,531

79,903

166,951

822,844

Liab

ies

Deposits by banks

1,3

26,745

1,909

1,398

503

778

1,326

2,848

35,509

Customer accounts

1,4

384,444

47,723

28,288

13,647

11,806

7,787

38,578

2,349

534,622

Derivat

ive ﬁnancial

instruments

13,111

12,472

6,655

4,001

3,433

5,142

6,932

4,315

56,061

Senior debt

130

1,111

1,537

1,389

624

11,507

20,127

14,443

50,868

Other debt securit

ies

in issue

3,123

5,822

6,109

3,235

3,037

492

482

195

22,495

Other liab

ies

14,929

26,447

1,695

544

883

1,830

1,809

12,763

60,900

Subordinated liab

ies and

other borrowed funds

980

172

453

312

1,936

8,096

12,036

Total liab

ies

443,462

95,552

45,701

23,491

21,014

28,396

72,712

42,163

772,491

Net liqu

ity gap

(222,134)

54,201

15,204

19,843

23,125

28,135

7,191

124,788

50,353

Loans and advances, investment securit

ies, depos

its by banks, customer accounts and debt securit

ies

in issue include ﬁnanc

ial

instruments held at fair value

through proﬁt or loss, see Note 13 Financ

ial

instruments

Loans and advances include reverse repurchase agreements and other sim

ilar secured lend

ing of $97.6 bill

ion

Deposits by banks include repurchase agreements and other sim

ilar secured borrow

ing of $5.6 bill

ion

4 Customer accounts include repurchase agreements and other sim

ilar secured borrow

ing of $48.0 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

294

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

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

ies

14,175

26,008

23,364

13,024

12,891

22,805

41,217

52,756

206,240

Other assets

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

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

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 analys

is of observed customer behaviour over time.

295

Standard Chartered

– Annual Report 2023

Risk review and Capital review

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.

2023

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

26,759

1,921

1,417

513

790

1,328

2,848

35,580

Customer accounts

385,361

48,140

28,763

14,049

12,190

8,118

39,000

3,036

538,657

Derivat

ive ﬁnancial

instruments

53,054

517

103

202

887

1,208

56,061

Debt securit

ies

in issue

3,507

6,995

8,015

5,070

4,002

13,663

23,413

16,396

81,061

Subordinated liab

ies and

other borrowed funds

1,043

134

208

570

395

2,389

14,367

19,152

Other liab

ies

12,200

26,291

1,560

515

884

1,832

1,810

11,513

56,605

Total liab

ies

481,924

83,998

39,847

20,399

18,539

25,538

70,347

46,524

787,116

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

296

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

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 and down)

to the current market-impl

ied path of rates, across all

yield curves

These interest rate shock scenarios assume all other economic

variables remain constant. The sensit

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. In particular, the assumption that interest rates

of all currencies and maturit

ies sh

ift by the same amount

concurrently, and that no actions are taken to mit

igate the

impacts aris

ing from th

is are considered unlikely. Reported

sensit

ies w

ill vary over time due to a number of factors

includ

ing changes

in balance sheet composit

ion, market

condit

ions, customer behav

iour and risk management

strategy. Therefore, while the NII sensit

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:

2023

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

160

350

- 50 basis points

(150)

(30)

(50)

(20)

(40)

(180)

(470)

+ 100 basis points

180

100

320

690

- 100 basis points

(280)

(40)

(100)

(40)

(80)

(350)

(890)

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

As at 31 December 2023, 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

$350 mill

ion. The equ

ivalent impact from a parallel decrease

of 50 basis points would result in a reduction in projected NII

of $470 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 $690 mill

ion.

The equivalent impact from a parallel decrease of 100

basis points would result in a reduction in projected NII of

$890 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 falling

rate scenarios has increased versus 31 December 2022, due

to changes in modelling assumptions to reﬂect expected

re-pric

ing act

ity on Reta

il and Transaction Banking current

accounts and savings accounts in the current interest rate

environment.

Over the course of 2023 the size of the interest rate swaps and

HTC-accounted bond portfolios used to programmatically

hedge the behavioural lives of structural equity and CASA

balances increased from $31 bill

ion to $47 b

ill

ion. The

portfolios had a weighted average maturity of 2.9 years,

which reﬂects the behavioural

ised l

ives of the rate-insens

ive

deposit and equity balances that they hedge, and a yield of

3.1%, as at 31 December 2023.

297

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Operational and Technology Risk

The Group deﬁnes Operational and Technology risk 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). Operational and

Technology risk may occur anywhere in the Group, includ

ing

third-party processes.

Operational and Technology risk proﬁle

Risk management practices help the business grow safely

and ensure 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. Managing Operational and

Technology risk makes the Group more efﬁc

ient and enables

it to offer better, sustainable service to its customers. The

Group’s Operational and Technology Risk Type Framework

(‘O&T RTF’) is designed to enable the Group to govern,

ident

ify, measure, mon

itor and test, manage and report on

its Operational and Technology risks. The Group continues to

ensure the O&T RTF supports the business and the functions in

effectively managing risk and controls with

in r

isk appetite to

meet their strategic object

ives.

The Group has demonstrated progress on ensuring vis

ity

of risks and risk management through implementat

ion of a

standardised risk taxonomy. Standardis

ing the r

isk taxonomy

enables improved risk aggregation and reporting as well as

provid

ing opportun

ies for s

impl

ify

ing the process of risk

ident

iﬁcation and assessment. A rev

ised process universe

along with taxonomies for causes and controls have been

designed and will be implemented in 2024, with control

categories supporting the streamlin

ing and removal of

duplicate controls, reducing complexity, and improv

ing

risk and control management. Macro processes will provide

a client-centric view and enable clearer accountabil

ity

for delivery as well as management of risks in line with

business object

ives.

Operational and Technology risk is elevated in areas such

as Information and Cyber Security, Data Management and

Transaction Processing. Other key areas of focus are Change,

Systems Health/Technology risk, Third Party risk, Resil

ience

and Regulatory Compliance. Management has focused on

addressing these areas, improv

ing the susta

inable operating

environment and has in

iated a number of programmes to

enhance the control environment. The Group continues to

monitor and manage Operational and Technology risks

associated with the external environment such as

geopolit

ical factors and the

increas

ing r

isk of cyber-attacks.

Dig

ital

isat

ion and

inappropr

iate use of Art

ial Intelligence,

various regulatory expectations across our footprint and the

changing technology landscape remain key emerging areas

to manage, allowing the Group to keep pace with new

business developments, whilst ensuring that risk and control

frameworks evolve accordingly. The Group continues to

strengthen its risk management to understand the full

spectrum of risks in the operating environment, enhance

its defences and improve resil

ience.

Operational and Technology risk events and losses

Operational losses are one ind

icator of the effect

iveness and

robustness of the non-ﬁnancial r

isk control environment.

The Group’s proﬁle of operational loss events in 2023 and 2022

is summarised in the table below, which shows the distr

ibut

ion

of gross operational losses by Basel business line.

Distr

ibut

ion of Operational Losses by Basel business line

% Loss

2023

2022¹

Agency Services

1.8%

3.0%

Asset Management

0.1%

0.8%

Commercial Banking

8.4%

8.9%

Corporate Finance

7.6%

1.1%

Corporate Items

35.5%

2.5%

Payment and Settlements

17.6%

42.9%

Retail Banking

20.3%

25.5%

Retail Brokerage

0.0%

Trading and Sales

8.5%

15.2%

Losses in 2022 have been restated to include incremental events recognised in 2023

The Group’s proﬁle of operational loss events in 2023 and 2022 is also summarised by Basel event type in the table below.

It shows the distr

ibut

ion of gross operational losses by Basel event type.

Distr

ibut

ion of Operational Losses by Basel event type

% Loss

2023

2022

Business disrupt

ion and system fa

ilures

6.0%

3.5%

Clients’ products and business practices

3.6%

7.1%

Damage to physical assets

0.0%

Employment practices and workplace safety

0.6%

0.2%

Execution delivery and process management

75.0%

79.6%

External fraud

14.6%

8.6%

Internal fraud

0.2%

0.9%

Losses in 2022 have been restated to include incremental events recognised in 2023

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.

298

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Discla

imer

For the avoidance of doubt, this ‘Climate Risk’ section is subject to the statements included in (i) the ‘Forward- Looking Statements’

section; and (i

i) the ‘Bas

is of Preparation and Caution Regarding Data Lim

itat

ions’ section provided under ‘Important Notices’ at

page 519.

Credit Risk

We have developed a climate risk management framework, which provides a baseline level of effective risk mit

igat

ion.

Consumer, Private and Business Banking (CPBB) Credit Risk

As of September 2023, we have assessed the physical risk for 79 per cent and transit

ion r

isk for 54 per cent of our CPBB portfolio.

CCPL

Private

Banking

Business

Banking

Consumer

Mortgage

Overall

CPBB

80%

20%

77%

46%

21%

23%

54%

98%

79%

Physical Risk Measuring and Monitoring in CPBB

(as of September 2023)

Physical Risk Assessed

Physical Risk Not assessed

CCPL

Private

Banking

Business

Banking

Consumer

Mortgage

Overall

CPBB

100%

70%

78%

42%

46%

30%

22%

58%

54%

Transition Risk Measuring and Monitoring in CPBB

(as of September 2023)

Transition Risk Assessed

Transition Risk Not assessed

For our secured portfolio, assessments are based on the underlying physical collateral for our resident

ial and commerc

ial

portfolios where we continue to leverage Munich Re’s Risk Suite (Natural Hazards Edit

ion) to measure acute and chron

physical risk impact

ing each asset. For our unsecured portfol

ios, such as credit cards and personal loans, we recognise that

physical risk is likely to have a more pronounced second order impact that may ind

irectly affect our customers’ ab

ity to repay.

We have further expanded our scope of risk measurement and monitor

ing to cover these products

in 2023, albeit using proxies

based on the location of bank branches.

We assess the exposure concentrations to high physical risk across acute and chronic hazards quarterly, and report these at risk

management committees at Group, Region and Country, with a stronger focus on ﬂood risk and ris

ing sea levels. Dur

ing 2023,

the physical risk proﬁle across products and markets has remained stable, apart from slight variat

ions

in exposure to high ﬂood

risk levels due to enhancements in Munich Re’s ﬂood risk model.

Assessment of Acute and Chronic Physical Risk for Top 10 Markets’ Exposures backed by Property Collateral, ind

icat

ing

Exposure Concentration Subjected to Very High Gross Risk (as of September 2023)

Physical risk event

Global

Korea

Hong Kong

Taiwan

23%

38%

Q3-22

Q3-23

Trend

Q3-22

Q3-23

Trend

Q3-22

Q3-23

Trend

Q3-22

Q3-23

Trend

Flood Risk

24.80%

24.20%

14.00%

12.30%

44.60% 44.90%

11.90%

11.00%

Sea-level rise

(Year 2100, RCP 8.5)

2.10%

2.20%

0.01%

0.60%

3.40%

3.60%

0.04%

0.03%

Physical risk event

India

Singapore

Malaysia

UAE

18%

Q3-22

Q3-23

Trend

Q3-22

Q3-23

Trend

Q3-22

Q3-23

Trend

Q3-22

Q3-23

Trend

Flood Risk

30.20%

22.30%

3.50%

3.40%

6.50%

5.30%

29.50%

26.50%

Sea-level rise

(Year 2100, RCP 8.5)

1.10%

0.90%

0.08%

0.06%

0.20%

0.30%

36.80%

36.10%

Physical risk event

Jersey

Vietham

China

Q3-22

Q3-23

Trend

Q3-22

Q3-23

Trend

Q3-22

Q3-23

Trend

Flood Risk

1.90%

1.60%

63.90% 60.40%

67.70%

67.10%

Sea-level rise

(Year 2100, RCP 8.5)

–

1.80%

1.00%

8.30%

Note: Movements are called out for markets showing a change of >5 per cent year-on-year change in ﬂood risk exposure concentration.

Climate Risk

Managing the ﬁnanc

ial and non-ﬁnancial r

isks from climate change

299

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Our key resident

ial mortgage markets have not

implemented min

imum bu

ild

ing energy efﬁciency standards. As such,

in 2023

we took an alternative approach towards assessing the transit

ion r

isk impact on our borrowers, by quantify

ing the robustness

of their repayment capabil

ity, rather than account

ing for valuation related risks of property collateral. We used a combinat

ion

of internal and external data, includ

ing results from our net zero ﬁnanced em

iss

ions calculat

ions and our in

ial analysis shows

that the transit

ion r

isk levels appear to be low across key resident

ial mortgage markets. These results w

ill be reﬁned along with

revis

ions

in exposure concentrations, as the data landscape matures over time and as we improve upon the in

ial approach.

Approaches to Measure Transit

ion R

isk

Impact on collateral valuation

Impact on borrower repayment capabil

ity

Energy price

increase

Energy price

increase

Min

imum bu

ild

ing

enegy efﬁciency

regulations

Retroﬁtting

cost

Retroﬁtting

cost

Macroeconomic

impacts

Transit

ion R

isk Ratings using SCB CPBB Approach, by Exposure Concentration (as of December 2022)

Very high

High

Medium

Low

Very Low

13%

80%

Singapore

$9.4bn

16%

77%

Hong Kong

$32.3bn

23%

12%

10%

47%

Taiwan

$5.3bn

For the Jersey resident

ial mortgage portfol

io, we used EPC (Energy Performance Certif

icate) data to assess the energy efﬁciency

distr

ibut

ion, with results ind

icat

ing that more than 80 per cent of the portfolio is rated at C or better.

Transit

ion R

isk Ratings for Resident

ial Mortgages

in Jersey using EPC Ratings by Exposure

EPC Ratings for Resident

ial Mortgages

in Jersey by Count

(as of August 2023)

12%

0.3%

64%

Jersey

$0.3bn

Prior to 2000

2000 - 2021

2022 onwards

60%

We aim to continue to explore ways to enhance our assessment approaches across both secured and unsecured CPBB

portfolios through improved methodologies and data. This will enable us to better assess the susceptib

ity to and readiness of

our clients in managing climate-driven risks, whilst also enabling us to ident

ify opportun

ies to ass

ist them in their transit

ion

towards a low-carbon economy. Options we are consider

ing

include expanding the scope of our exist

ing cred

it orig

inat

ion

process to cover Climate-related considerat

ions

in segments such as Medium Enterprises.

300

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Corporate, Commercial and Institut

ional Bank

ing (CCIB) Credit Risk

This section covers details of how we assess climate risk for our corporate clients, includ

ing

ins

ights ga

ined from our client

level assessments and progress made to further strengthen our framework for climate and credit related portfolio and risk

management. The ﬁgure below outlines our process in assessing climate risk.

1. Identify Risks and

Mit

igat

ion Plans

Climate risk questiona

ire (CRQ)

3. Evaluating the Risk

5. Controls and

Assurance

2. Analyzing the Risk

Climate Risk Assesment (BRAG)

Data Gathering

Control Sample Testing

Time Horizon

Impact

Client Outreach

Independant Assurance

4. Portfolio Management

and Monitor

ing

Credit Underwrit

ing Pr

inc

iples

Risk Appit

ite (%Black or Red)

Mit

igat

ing

Factors

Scenario Analysis

Business Credit Applicat

ion

BCA Analysis

Financ

ial Impacts

Review and Approval

Risk Trigers

Warning Signals

Green

Amber

Red

Black

High Climate Risk

Clients Monitor

ing

1. Identify risks and mit

igat

ion plans

Our client-level Climate Risk Questionna

ire (CRQ) a

ims to help assess the potential ﬁnanc

ial r

isks from climate change using

quantitat

ive and qual

itat

ive

informat

ion. The assessment presents a consol

idated view across ﬁve pillars of how exposed and

ready for transit

ion or adaptat

ion our clients may be.

Governance

& Disclosures

Gross

Physical Risk

Adaptation

Gross

Transit

ion R

isk

Transit

ion R

isk

Mit

igat

ion

Intent, commitment

and reporting

• Reporting of

Climate targets

• Board responsib

ity

and accountabil

ity

• Management

incent

ives to

manage climate

risk with

in the

organisat

ion

Exposure to acute

and chronic events

• Asset locations

exposed to physical

risk events (Floods,

Storms, Droughts

etc)

• Model output to

assess current and

future risk to client’s

operating location

Mit

igat

ions to acute

and chronic events

• Assessment of

client’s adaptation

plans to its

operating locations

and supply chain

• Insurance coverage

to protect against

physical risk

Relative emiss

ions

for sector and region

• Reliance on fossil

fuel/carbon

products

• Policy

environmental/

impact due to

sovereign

decarbonisat

ion

policy in sector

• Potential ﬁnanc

ial

impact from various

climate scenarios

Decarbonisat

ion plan

and emiss

ion targets

• Assess client’s plans

and its credib

ity

to transit

ion

its

business and supply

chain

• Emiss

ions report

ing

targets and plan to

acheive them

•

Capex in low carbon

technologies,

internal carbon

pric

ing scenar

ios

301

Standard Chartered

– Annual Report 2023

Risk review and Capital review

The CRQ helps us to form a view of the overall climate risk proﬁle of our clients and supports the underlying themes that feed

into our broader scenario analysis and corporate planning exercises. In 2023, we completed an exhaustive review of the CRQ

based on histor

ical data,

includ

ing rat

ional

ing questions, introduc

ing a methodolog

ical different

iat

ion in assessing corporates

against projects, introduc

ing sector-spec

ic quest

ions, and build

ing stronger l

inkages to our net zero and credible transit

ion

plan workstreams.

Coverage of our analysis

In 2023 we completed CRAs for c.4,100 clients, which is c.85-90 per cent of our corporate client lim

its and

is a sign

iﬁcant

improvement from c.2,200 clients assessed in the year before.

How do different regions in our footprint compare?

Overall, while the levels and consistency in the availab

ity of climate informat

ion from publ

ic disclosures has increased, this is

still a developing aspect in our markets, which highl

ights the

importance of engaging our clients on this topic.

Client-level Climate Risk assessment scores by region

2023 YTD Assessment*

Number of

clients

Overall score

across the

ﬁve pillars

1. Governance &

disclosures

2. Gross

Physical Risk

3 Physical Risk

adaptation

4. Gross

Transit

ion R

isk

5. Transit

ion

RIsk Mit

igat

ion

Asia

2,709

46%

44%

69%

27%

48%

41%

Africa & Middle East

409

36%

27%

69%

13%

46%

25%

Europe & Americas

1,018

64%

75%

78%

53%

50%

65%

Total

4,136

49%

50%

71%

32%

48%

45%

Data assessed is as of September 2023

•

We continue to see better transit

ion r

isk mit

igat

ion and physical risk adaptation scores for corporates domic

iled

in Europe

and Americas, where disclosure levels are highest and the plans to effectively manage climate risk are being put in place.

•

Physical risk adaptation levels remain an area of risk for most of our markets, with the lowest absolute scores in Africa and the

Middle East.

•

Asia constitutes c.65 per cent of our total volume of clients assessed in 2023 (2022: c.63 per cent) followed by Europe and

Americas, which represents c.25 per cent of the clients and the largest increase in share (2022: 18 per cent)

Insights from these assessments for the pillars mentioned previously are provided below.

Governance and disclosures

We have seen a gradual increase in the number of clients reporting quantif

iable cl

imate change related commitments over

2022 and 2023 driven by an improvement in climate risk transit

ion plans be

ing put in place across our markets but this does not

necessarily come via ‘Carbon Disclosures Project’, which remains more a developing market disclosure across our client footprint.

Key risk remains on management incent

ives l

inked to climate change; an area where we are actively engaging with clients.

Percentage of clients in scope

Has a quantiﬁable

climate policy or

commitment

2023

2022

2021

62%

58%

55%

Has TCFD-aligned

disclosures

Discloses to

CDP

Has board

member with

climage oversight

Have management

incentives linked

to climate

2023

2022

2021

66%

55%

49%

2023

2022

2021

37%

29%

32%

2023

2022

2021

47%

37%

29%

2023

2022

2021

24%

29%

33%

302

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Transit

ion r

isk mit

igat

ion levels

Over the last two years, there has been a material increase in both the number of clients putting in place a transit

ion plan

and those planning investments to move to low carbon technologies, driven by increas

ing regulatory pressure and enhanced

transit

ion r

isk commitments in some of our key markets. While the number of clients reporting Scope 1, 2 and 3 emiss

ions has

not increased in the last two years, we have seen an increase in clients that report Scope 1, 2 and 3 emiss

ions reduct

ion targets.

However, the abil

ity to set quant

iable targets to ach

ieve broader commitments is still lagging when looked at on an absolute

basis and the scale of the transit

ion needed.

Percentage of clients in scope

Reports

Scope 1 & 2

emissions

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

2023

2022

2021

71%

61%

71%

2023

2022

2021

54%

52%

61%

2023

2022

2021

63%

43%

2023

2022

2021

68%

54%

49%

2023

2022

2021

50%

49%

35%

2023

2022

2021

31%

17%

13%

2023

2022

2021

34%

21%

23%

Physical risk readiness

Physical risk adaptation remains an area of concern and we have seen downward trends across our portfolio of clients due to

an increase in the number of assessments (from c.2,200 - 4,100) captured in our coverage, which now better reﬂects our overall

corporate portfolio. This reﬂects the nature of many of our footprint markets, where physical risk adaptation and associated

levels of disclosures are in nascent stages.

Percentage of clients in scope

Acknowledges

physical risk

2023

2022

2021

42%

54%

50%

2023

2022

2021

35%

39%

34%

2023

2022

2021

32%

40%

39%

Estimates

a ﬁnancial

impact

2023

2022

2021

18%

24%

22%

Assessed

physical risk

Have taken

adaptation

measures to

date or made

future plans to

303

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Transit

ion r

isk – Gross Risk and Transit

ion Plan levels for key sectors

For four key sectors that have high transit

ion r

isk i.e. Commercial Real Estate (CRE), O&G Producers, Metals and Min

ing

Producers and Util

ies, we have assessed the risk against the level of transit

ion plans and how

it varies across our key markets.

CRE:

Companies across our key markets are close together

with respect to their transit

ion scores, reﬂect

ing the policy

environment in the build

ing sector, wh

ich is broadly sim

ilar

across major markets. Key factors which determine the

transit

ion r

isk grading for a build

ing are

its location, which

helps ascertain the intens

ity of the power gr

id supplying

electric

ity to the asset, the property type, and

its energy

efﬁciency.

Power:

Clients in the UAE are slightly behind some of their

global peers, although this is driven in part by a lower level of

disclosures and higher transit

ion r

isk as a result of fossil fuel

intens

ive bus

iness models.

O&G

: This sector has been gradually preparing for the

transit

ion to lower carbon

intens

ive fuels over the last few

years. While there is a lot more to do in terms of transit

ion

ing,

the improved transit

ion r

isk understanding and associated

disclosures lead to on average better mit

igat

ion scores in

this sector.

Min

ing:

Almost 50 per cent of the Metals and Min

ing

clients in our portfolio, ranging from Steel to Cement to

Alumin

ium producers are based

in China and India.

Effective decarbonisat

ion

in this sector is reliant on the

power grid decarbonis

ing,

improved energy efﬁc

iency

overall operations, includ

ing heat

ing, as well as managing

process level emiss

ions.

China

Hong Kong

India

Singapore

USA

UAE

South Africa

Korea

Rest of Middle East

Europe

CRE

High mit

igat

ion

Low mit

igat

ion

Transit

ion R

isk Mit

igat

ion

Gross Transit

ion R

isk

O&G Producer

High mit

igat

ion

Low mit

igat

ion

Transit

ion R

isk Mit

igat

ion

Gross Transit

ion R

isk

Utilities

High mit

igat

ion

Low mit

igat

ion

Transit

ion R

isk Mit

igat

ion

Gross Transit

ion R

isk

Metals & Mining Producers

High mit

igat

ion

Low mit

igat

ion

Transit

ion R

isk Mit

igat

ion

Gross Transit

ion R

isk

304

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

2. Analysing the climate risk grading

Each client is assigned a climate risk grading (BRAG)

computed based on the gross transit

ion r

isk and transit

ion r

isk

mit

igat

ion. Owing to physical risk data being less robust, we

have to date focused only on transit

ion r

isk drivers to compute

the climate risk grading. However, as highl

ighted

in the section

above, we have seen a steady improvement in the coverage

of physical risk data in the last two years. During 2024, we plan

to develop a methodology to incorporate both physical and

transit

ion r

isk drivers in the computation of BRAG which

will holist

ically represent the extent of cl

imate risk faced

by a client.

There are currently four types of BRAG ratings assigned to

clients – black, red, amber, green.

Black

Clients are deemed to have very high

exposure to Transit

ion R

isk with little or

no mit

igat

ion plans

Red

Clients are deemed to have very high

exposure to Transit

ion R

isk but with

acceptable or good mit

igat

ion plans

Amber

Clients are deemed to have high

exposure to Transit

ion R

isk but with

acceptable or good mit

igat

ion plans.

Green

Clients are deemed to have low or

lim

ited exposure to Trans

ion R

isk

3. Evaluating the risk (linkage to credit process)

Once a climate risk grading is assigned to a client, the impacts

from climate-related risks are integrated into the exist

ing

credit approval process qualitat

ively and/or quant

itat

ively

through inclus

ion w

ith

in the bus

iness risk analysis and

ﬁnancial modell

ing. If the risks are deemed material and not

adequately represented via the exist

ing cred

it rating of the

client, subject

ive warn

ing signals may be added to inﬂuence

the credit rating. Addit

ionally, r

isk triggers are added to

monitor risks that are not adequately mit

igated and to seek

addit

ional

informat

ion from the cl

ient where applicable.

4. Portfolio management and monitor

ing

Concentration of black and red graded clients remains with

proposed Risk Appetite levels at 6 per cent with

in our key

markets; some of the more developed markets have the

highest proportion of green clients, which reﬂects the higher

level of climate risk disclosures and governance established

by companies in this region. Amongst our key markets, the

UAE currently has the highest proportion of red and black

clients, driven by a combinat

ion of cl

ients that had fewer

disclosures and high transit

ion r

isk, particularly fossil fuel led

util

ity prov

iders.

During 2023 we have embedded qualitat

ive and quant

itat

ive

climate considerat

ions

into the Group’s credit underwrit

ing

princ

iples for O&G, M

ing, Sh

ipp

ing and CRE sectors for wh

ich

we have industry specif

ic or

inat

ion teams. This included

introduc

ing portfol

io level caps for black and red rated clients

and lower preference for emiss

ion

intens

ive transact

ions. It is

important to note that underlying princ

iples vary depend

ing

on the sector, to help steer the portfolio in the desired direct

ion

over the medium term, and also consider the Group’s 2030

ﬁnanced emiss

ion targets. We have also

iated work to

assess risks to underlying collateral from physical and

transit

ion r

isk specif

ically for our CRE and Sh

ipp

ing portfol

ios.

A key strategic focus area going forward is to embed climate

risk and net zero targets into business and credit decis

ions.

To enable this, we have established a Net Zero Climate Risk

Working Forum where discuss

ions on account plans on h

igh

climate risk and net zero divergent clients are held.

China

Hong Kong

UAE

India

Singapore

Total

76.6%

17.3%

5.4%

81.73%

16.74%

1.52%

73.8%

21.1%

5.1%

56.1%

39.1%

4.8%

82.3%

13.5%

4.2%

74.4%

8.0%

16.1%

1.5%

84.8%

11.9%

3.1%

Portfolio distribution across key markets

40%

20%

60%

80%

100%

0.7%

0.2%

74.49%

15.17%

6.45%

3.89%

305

Standard Chartered

– Annual Report 2023

Risk review and Capital review

5. Controls and assurance

Independent control checks by ﬁrst line of defence and

assurance reviews by second line of defence on integrat

ing

climate risk with

in the cred

it process are carried out quarterly

to improve the quality and effectiveness of assessing climate

risk. The results of the assurance testing and steps to address

gaps are period

ically shared w

ith impacted stakeholders and

as part of governance updates to risk committees.

Credib

ity of transit

ion plans

We aim to actively manage our exposure by shift

ing to lower

emiss

ions-

intens

ive cl

ients and working closely with our

exist

ing cl

ients to develop credible transit

ion plans that are

consistent with our net zero commitments. To help us ident

ity

such clients, we draw on our exist

ing CRQ framework to

ﬁnalise a methodology to assess the Cred

ity of Transit

ion

Plan (CTP) by analysing client commitments to transit

ion

their business to a low carbon economy. We leverage the

data captured in the CRQ and assign a credib

ity rating to

the clients’ transit

ion plan based on an

in-house scoring

methodology that draws on the UK Transit

ion Plann

ing

Taskforce and Glasgow Financ

ial All

iance for Net Zero

guidance on net zero transit

ion plans.

The current methodology will be period

ically rev

iewed as

the level of client climate-related disclosure steps up across

our footprint, to ensure it remains ﬁt for purpose and in line

with industry best practices, stakeholder expectations and

regulatory requirements. The CTP has been embedded into

the Version 3 CRQ that was implemented in January 2024.

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 meet the Group’s

aim to reach net zero GHG emiss

ions by 2050.

We have continued to perform addit

ional cl

ient level due

dil

igence for (

i) clients covered by the Group’s net zero targets

for high carbon sectors (O&G, Power, Steel, Alumin

ium,

Cement, Automobiles, Shipp

ing, Av

iat

ion and CRE), (

i) cl

ients

with a coal nexus

as well as (i

i) those that have been

assessed at client level as high climate risk. The assessment

focuses on three pillars at covering both client and transaction

level aspects:

Of the case reviews completed, an increase in Reputational

and Sustainab

ity Risk rating was suggested for c.24 per cent

of transactions compared to c.17 per cent in 2022. These

consisted of companies in Coal Production, O&G, Min

ing,

Steel and Cement sectors, primar

ily from the South East As

region, looking to procure coal or other high carbon emitt

ing

products for manufacturing, production, or wholesale

purposes. In addit

ion, some ent

ies w

ith 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

management of environmental and social risk aris

ing

from the Group’s client relationsh

ips and transact

ions.

Further informat

ion

is available in the Sustainab

ity Review

section on page 68 to 133.

Temperature alignment is one way to consider a company’s

impact on climate change and an ind

icator of a cl

ient’s

progress towards a net zero economy. It is calculated based

on histor

ic em

iss

ion

intens

ies and volume of hydrocarbons

produced to produce a forward-looking temperature

alignment score. We assessed the weighted average

temperature alignment (WATA) projected to 2030 of 3,661

corporate client entit

ies (cover

ing c.62 per cent of corporate

client portfolio on a net nominal basis) by high carbon sector.

Client Level

Transaction Level

Temperature Alignment

Temperature Alignment and

Comparison to client peers

Net Zero Emiss

ions Impact

Inﬂuence on Net Zero alignment

from both internal and regional

context

Credib

ity of Transit

ion Plan

Readiness and Robustness of

transit

ion strategy from cl

ient risk

assesments

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 per cent dependent on thermal coal (based on percentage revenue).

306

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Insights

•

Portfolio average temperature alignment is 3.48⁰C. Compared to other sectors with

in our portfol

io, O&G, CRE, Util

ies and

Construction have a higher temperature alignment given their dependence on high carbon emitt

ing product

ion.

•

Compared to 2022, there was an increase in sector temperature alignment scores across O&G and Construction sectors

driven by improvements in both coverage of the corporate clients assessed and emiss

ion data coverage for our cl

ients

(due to reduced use of proxies).

Others

Commodity

Traders

Technology

Hardware

& Equipment

Metals

& Min

ing

Automobiles

& Components

Consumer

Durables

& Apparel

Build

ing

Products,

Construction

& Engineer

ing

CRE

Transportation

and Storage

O&G

Util

ies

4.68%

2.84%

3.64%

3.52%

3.50%

2.79%

2.91%

3.54%

3.52%

3.39%

3.60%

Weighted average temperature alignment (WATA) by client sectors (as of September 2023)

0.0

2.5

2.0

1.5

0.5

1.0

3.0

3.5

4.0

4.5

5.0

2021

WATA (°C)

2022

2023

Util

ies

O&G

Transportation

and Storage

CRE

Build

ing

Products,

Construction &

Engineer

ing

Consumer

Durables &

Apparel

Automobiles &

Components

Metals &

Min

ing

Technology

Hardware &

Equipment

Commodity

Traders

Others

Asia

3.7°C

4.9°C

2.7°C

3.6°C

3.5°C

3.2°C

2.7°C

3.2°C

3.9°C

3.5°C

3.6°C

Africa &

Middle East

3.9°C

4.6°C

2.8°C

3.3°C

3.6°C

3.4°C

3.5°C

2.8°C

3.3°C

4.6°C

3.2°C

Europe &

Americas

3.0°C

4.6°C

3.1°C

3.9°C

3.2°C

4.0°C

3.0°C

2.6°C

1.8°C

3.2°C

3.1°C

As part of our 2023 modelling roadmap, we in

iated work on developing an in-house methodology to model temperature

alignment for prior

ity sectors (

i.e. O&G, Steel and Automotive) as well as a sector-agnostic model to cover remain

ing corporate

portfolios. This has helped to reduce reliance on third party modelling capabil

ies.

Temperature alignment is an emerging concept, and industry-wide standards on methodology are still evolving. We fully

expect our approach to evolve in line with best practice. Client-level emiss

ions are only ava

ilable for c.55 per cent of corporate

clients and sector average proxies are being used for the remainder. Improving such data gaps remains a key prior

ity.

Country Risk

The Group uses a set of physical and transit

ion r

isk rankings to ident

ify the markets most vulnerable and least ready to adapt

and mit

igate cl

imate-related physical and transit

ion r

isks.

•

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 is a combinat

ion of cl

imate and

macroeconomic drivers.

307

Standard Chartered

– Annual Report 2023

Risk review and Capital review

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

Based on their aggregated physical and transit

ion r

isk scores, sovereigns are split into decile-based buckets ranging from

1 (low risk) to 10 (high risk). These rankings are a qualitat

ive

input to our internal Country Risk management process spanning

annual sovereign credit grades and lim

its rev

iews, inputs to climate-related scenario analysis, and Risk Appetite.

Gross Country Risk (GCR) exposure distr

ibut

ion as of 30 September 2023 across Physical Risk categories

Bucket

1 (Best)

10 (Worst)

Exposures %

10.5

29.1

20.0

4.4

17.5

8.3

1.9

6.5

0.8

1.1

GCR exposure distr

ibut

ion as of 30 September 2023 across Transit

ion R

isk Categories

Bucket

1 (Best)

10 (Worst)

Exposures %

2.7

14.4

12.0

36.0

18.6

4.3

3.8

7.3

0.7

0.1

Bubble size represent markets’ GCR exposure

UAE

India

Mainland

China

Hong

Kong

Pakistan

Nigeria

Singapore

USA

South Korea

Physical and Transition Risk rankings distribution for key markets¹:

Key markets’ climate risk bucket allocation (as of Sept 2023)

High risk

Low risk

High risk

Low risk

Physical Risk

Transit

ion R

isk

308

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

Insights

•

For both physical and transit

ion r

isk, our exposure to

high-risk countries (buckets 9 and 10) remains well below

Risk Appetite.

•

The rankings are largely driven by the level of ﬁnanc

ial

risk countries are exposed to and their abil

ity to absorb

these losses. As such, the rankings are largely dependent

on countries’ development stage, economy-wide

divers

iﬁcation,

in-country inequal

ies and gross exposure

to physical and transit

ion r

isk shocks.

•

Addit

ionally, we keep close track of trans

ion r

isk events

such as the establishment of the EU’s Carbon Border

Adjustment Mechanism (EU CBAM) and its potential

impact on our key portfolios. Other markets with internal

carbon pric

ing mechan

isms (such as Singapore, South

Korea, South Africa, etc) are also being monitored as

part of country risk annual reviews. From a physical risk

standpoint, the rise of El Niño season (expected to peak

at the beginn

ing of 2024)

is likely to exacerbate climate

condit

ions throughout the Group’s footpr

int regions and we

continue to monitor these as part of our annual reviews.

Lim

itat

ions

•

The computation inputs are based on latest available data

which may be dated. Proxies have been used where data

for the sovereign is not available.

•

The ranking uses equally spaced decile scores and provides

the results in an ordinal manner. While the simpl

ity helps

in adoption and provides the relative posit

ion of the

sovereigns, other systems may provide more informat

ion.

Operational and Technology Risk

Climate risk primar

ily

impacts Operational and Technology

risk as it manifests when physical risk disrupts our properties,

data centres and third party arrangements. Thus far, our focus

has been on physical risks, and we aim to explore transit

ion

risk elements in 2024. We continue exploring enhancements

to our control framework across impacted areas. Whilst

Continu

ity Plans for th

ird party arrangements have been

enhanced to include climate risk related considerat

ions, we

are targeting to gather our material vendors’ operating site

location data to assess their specif

ic phys

ical risk exposures,

such that enhanced continu

ity plans can be developed.

We continue to assess the physical risk vulnerabil

ies of our

own operating locations on a regular basis. Furthermore, we

have expanded the assessment of physical risk exposure at

onboarding to include data centres.

Assessment of gross Physical Risk at our own operating locations (as of September 2023)

Physical Risk event

Time horizon

Scenario

Asia

AME

E&A

Global

Flood (Acute)

2023

N/A

24%

17%

20%

Wildf

ire (Acute)

Storm (Acute)

18%

14%

Sea-level rise (Chronic)

2100

RCP 8.5

Heat Stress (Chronic)

2050

RCP 8.5

24%

35%

26%

Number of operating locations

714

239

988

Insights

•

From an acute risk perspective, 20 per cent of the Group’s

locations globally are subjected to ﬂood risk, 14 per cent

with storm risk and none at risk from wildf

ire. G

iven our

footprint, a higher proportion (24 per cent for ﬂood,

18 per cent for storm) of the Group’s locations in Asia

are subject to acute risks and 17 per cent of locations

in Europe and Americas are subjected to ﬂood risks.

•

In the locations where weather events such as storms or

cyclones are frequent, the build

ings are bu

ilt in

considerat

ion of these r

isks in line with regional standards.

•

From a chronic risk perspective, under RCP 8.5 for heat stress

is at 26 per cent (35 per cent for AME, 24 per cent for Asia).

Exposure to sea level rise remains below 5 per cent.

•

A broad range of mit

igat

ion options are considered,

such as property insurance, operating a divers

iﬁed

location strategy, splitt

ing del

ivery and therefore

reducing concentration risk.

Traded Risk

We manage the climate risk of traded risk exposures through

the stress-testing framework. Climate risks are incorporated

in the scenarios monitored against the traded risk stress Risk

Appetite, covering all fair value exposures in the trading and

banking books.

Climate-related stress scenarios are designed to include

transit

ion r

isk effects from climate change polic

ies and

shocks to markets due to supply and demand disrupt

ion

from physical climate events. Three scenarios are currently

in place: two physical and one transit

ional. The assumpt

ions

and results are subject to internal governance.

Our climate risk management for traded risk exposures is

evolving and we are working closely with industry bodies and

academics to better assess and monitor climate-related risks

and opportunit

ies.

309

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Treasury Risk

From a capital perspective, climate risk considerat

ions have

been part of our Internal Capital Adequacy Assessment

Process submiss

ions s

ince 2019. Our approach for assessing

climate risk impact on capital adequacy has improved from

qualitat

ive judgements to quant

itat

ive s

imulat

ions w

ith

the availab

ity of tools and greater understanding of

our portfolio.

As understanding of climate risk management and potential

forward-looking scenarios develop, our approach and

assessment will evolve, 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 have started monitor

ing

climate risk-related vulnerabil

ies and readiness of the top

corporate client liqu

ity portfolios, leveraging the client

outreach and data gathering exercise being undertaken on

the asset side. The most recent 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 and low readiness are from commodity

traders and util

ies sectors. The results of the analysis have

been considered as part of our internal liqu

ity adequacy

assessment process and we continue to monitor the proﬁle.

Model Risk

Throughout 2023, we have been build

ing our

internal climate

risk modelling capabil

ies to assess impacts from climate risk,

through collaboration with various external vendors. These

models have been independently validated by the second line

of defence and approved by the Credit Model Assessment

Committee, and were used to estimate climate impact on

ECL for IFRS9. The amount of incremental ECL as a result of

climate risk was below the Group’s material

ity threshold

and as such was not included as a quantitat

ive post model

adjustment. In future, the models will also be used for stress

testing. The development of internal climate risk models

has helped us to reduce reliance on external vendor models,

and we will continue to enhance our internal capabil

ies

by extending model coverage (e.g. to develop models to

cover more portfolios, or to develop more granular sector-

specif

ic models) and

incorporating model enhancements

recommended by internal and external stakeholders.

For the corporate portfolios, we developed transit

ion r

isk

models that adopt the microeconomic theory of demand and

supply to determine price changes based on sustainab

ity

transit

ion costs

in different sectors of the economy. The model

accounts for several key market dynamics, such as sensit

ies

with respect to price, revenue, cost, and proﬁt due to changes

in carbon prices. The model is calibrated at portfolio level,

covering prior

ity sectors that are carbon-

intens

ive and a

generic model that covers non-prior

ity sectors.

For retail mortgages, an asset haircut model was developed

to assess physical climate risk impact by estimat

ing the

devaluation of property values along different climate

pathways. The model takes input from the current and

prospective risk proﬁle of a property, which captures the

evolution of various hazard types, includ

ing r

iver ﬂoods

and storms.

For sovereigns, the climate adjusted Probabil

ity of Defaults

is derived by consider

ing benchmarks from the Cambr

idge

Paper (Klusak et al., 2021) and incorporating the country

risk rankings currently used by the Group, which covers both

physical and transit

ion r

isks.

Apart from models that are used to estimate ECL, we have

also developed temperature alignment models that assess

impl

ied temperature r

ise scores for corporate counterparties.

The model methodology is forward-looking and compares

the forecasted emiss

ions of a counterparty to relevant

benchmark scenarios. The cumulative difference in emiss

ions

between the counterparty’s forecast and the benchmark

scenarios is converted into a temperature score. The output

from temperature alignment models will support internal

climate risk management processes. We have also partnered

with external vendors for a scenario expansion model which

has been used to for NGFS Version 3 scenarios.

Assessing the resil

ience of our strategy us

ing

scenario analysis

To assess climate-related risks and opportunit

ies

in the

short, medium, and long-term we use scenario analysis to

consider how risks and opportunit

ies may evolve under

different situat

ions. Over two years, we have progress

ively

strengthened our scenario analysis capabil

ies and

developed our infrastructure and capabil

ies to incorporate

climate risk into data, modelling, and analysis. We have

expanded our portfolio coverage, built bespoke scenarios,

and partic

ipated

in several regulatory climate stress tests in

2023, includ

ing the Hong Kong Monetary Author

ity (HKMA)

and the Central Bank United Arab Emirates stress tests.

Scenarios used at Standard Chartered

The table below summarises the climate risk scenarios used internally by the Group across risk types:

Risk Types

Scenario Family

Number of

Scenarios

Risk Measure

Refer

Page no

Credit Risk – Corporate, Commercial

and Institut

ional Bank

ing (CCIB)

Network for Greening the Financ

ial

System (NGFS) Version 3

ECL, RWA

311

Credit Risk – CCIB

Bespoke (Tail and Base)

ECL, RWA

311

Credit Risk – Consumer, Private and

Business Banking (CPBB)

Intergovernmental Panel on

Climate Change’s (IPCC)

Representative concentration

pathways (RCP) scenarios

Exposure Concentration to

sea level rise risk

298

Operational and Technology Risk

IPCC’s RCP 8.5 scenario

Physical Risk Concentration

for sea level rise risk and heat

stress to our own operations

308

Reputational and

Sustainab

ity Risk

NGFS Version 3

Weighted Average

Temperature Alignment

305

Traded Risk

Bespoke (two Physical scenarios

and one Transit

ion scenar

io)

Stressed Loss

308

310

Standard Chartered

– Annual Report 2023

Risk review

Risk proﬁle

In addit

ion to the

internal scenarios, Standard Chartered Bank (Hong Kong) Lim

ited

is responding to two HKMA mandated

climate risk stress tests to (i) assess the impact on capital for short tenor scenarios across credit, traded and operational risks

and (i

i) a 30-year scenar

io based on NGFS Version 3 scenarios. The hybrid bespoke short-term ﬁve-year scenario has elements

of a macro recession, transit

ion, and phys

ical risk events such as typhoons in Hong Kong, heatwave, and precip

itat

ion in China.

We have used our exist

ing stress test

ing models to model the credit risk impact with overlays provided for physical and

transit

ion r

isk using data on client transit

ion m

igat

ion readiness, climate adjusted asset level haircuts, assumptions on

stranded assets for consumer mortgages and other available data. For Operational and Technology risk, we are assessing

the impact of damage to our premises and business disrupt

ion.

Transit

ion (T) and Phys

ical (P) Risk scenarios

We adapted the following scenarios for our CCIB portfolio:

Scenario Family

Scenario Name

Key Features

NGFS v3

Net Zero 2050 (T)

Global warming lim

ited to 1.5°C through str

ingent climate polic

ies and

innovat

ion

Global net zero CO

emiss

ions around 2050

Delayed Transit

ion (T)

Strong polic

ies w

ill be needed to lim

it warm

ing to below 2°C

Annual emiss

ions do not decrease unt

il 2030

Current Polic

ies (P+T)

No addit

ional pol

ies beyond those currently

implemented, along with slow

technology change

Global temperature rises over 3 degrees by 2100

Bespoke

In-house Base Case (P+T)

Credib

ity assessment of countries’ current sector targets in the short-term (2030)

and a durabil

ity assessment of reduct

ion commitments in the long-term (2050)

Delayed transit

ion to a low-carbon economy and a lack of early cl

imate action

resulting in a 2.5°C temperature rise by 2100

‘Green Trade War’ Tail (T)

Impact to global trade due to introduct

ion of Carbon Border Adjustment Mechan

ism

leading to trade war escalation

Explores risks which are not addressed by NGFS scenarios and may emerge over a

short-term horizon

‘Migrat

ion’ Ta

il (P)

Increasing severe acute weather events globally impact global food prices and drive

migrat

ion and d

isplacement

The scenarios used for CCIB clients are characterised by different levels of physical and transit

ion r

isk, driven by various features

in each scenario.

Carbon price:

increase in carbon price puts addit

ional cost pressure on cl

ients, squeezes the proﬁt margin, and thus helps to

determine level of potential credit losses.

Oil price:

increase (or lack thereof) in oil price impacts on clients’ revenues and proﬁtab

ity and thus helps to determine level

of potential credit losses.

Features of the NGFS and bespoke scenarios used in a Standard Chartered scenario analysis

NGFS v3

Bespoke Scenarios

Feature

Year

Net Zero

2050

Delayed

Transit

ion

Current

polic

ices

Tail Risk

(Physical)

Tail Risk

(Transit

ion)

Temperature rise

2050

1.4°C

1.6°C

3°C+

Carbon price

($2015/tCO²)

2030

124

2050

487

416

Oil price

($2015/boe)

2030

2050

107

118

125

Gas price change

(vs 2020, %)

2030

56%

43%

15%

2050

52%

54%

80%

-14%

Power demand change

(vs 2020, %)

2030

27%

35%

20%

2050

120%

129%

106%

75%

GDP baseline change

(vs 2020, %)

2030

34%

36%

-4%

-5%

2050

111%

110%

118%

-2%

-5%

311

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Physical risk scenarios

We adapted the following scenarios for our CPBB portfolio. The table below summarises acute and chronic hazards outputs we

currently use in the Munich Re’s Location Risk Intelligence Platform tool.

Scenario Family

Scenario Name

Key Features

IPCC (2050, 2100)

RCP 2.6 (P)

RCP 4.5 (P)

RCP 8.5 (P)

Pathways of Greenhouse gas (GHG) emiss

ions and atmospher

ic concentrations, air

pollutant emiss

ions and land use to project the

ir consequences for the climate system

Current and Projected Hazard scores from Munich Re model:

• Tropical cyclone zones

• River ﬂood zones

• Sea level rise zones

• Heat stress index based on range of high-temperature ind

icators

• Precip

itat

ion stress index based on heavy- precip

itat

ion ind

icators

• Climatolog

ical

index for wildf

ire hazard

• Drought stress index based on Standardised Precip

itat

ion- Evapotranspirat

ion Index

Scenario analysis results for CCIB

We assessed the impact of climate-related risks on our corporate, sovereign, and ﬁnanc

ial

inst

itut

ions clients under different

climate scenarios. This assessment, across the NGFS and bespoke scenarios, covered approximately 95 per cent of our CCIB

portfolio for these clients, primar

ily reﬂect

ive of the gross transit

ion r

isks. While client-level transit

ion plans were not factored

into the modelling, they were referenced to draw addit

ional

ins

ights for pr

ior

ity sectors.

The size of the bubble is ind

icat

ive of the gross expected losses

assessed for 94% of our corporate portfolio

Net Zero

2050

Tail

Transition

Delayed

Transition

Tail

Physical

Current

Policies

SCB

In-house

Scenarios used in Standard Chartered Scenario Analysis¹:

Loan impairment for corporate portfolio

High risk

Low risk

High risk

Low risk

Transit

ion R

isk

Physical Risk

The loan impa

irment (LI)

intens

ity wh

ich measures the level of gross ECL against the exposure at default (EAD) enables us to

assess the relative size of our exposure subject to potential losses from climate risks. As the graph below illustrates, LI intens

ies

do not go beyond 3 per cent during the forecast horizon for the climate scenarios considered in our scenario analysis. We expect

our LI intens

ity to r

ise the most in the NGFS Net Zero 2050 scenario. This is reﬂective of the high transit

ion r

isks noted by higher

carbon prices, coupled with the needs for greater investment to move to a low carbon economy. The NGFS Delayed Transit

ion

scenario also projects high LI intens

ity reﬂect

ing that such delayed transit

ion w

ill be equally disrupt

ive due to lower levels of

innovat

ions that l

its the ab

ity to decarbon

ise effectively, and ris

ing carbon pr

ices that squeeze proﬁt margins. Relatively

lower LI intens

ity observed

in the NGFS Current Polic

ies scenar

io reﬂects the nascent modelling capabil

ies on assessing the

physical risk impact to client asset locations and second-order impacts, such as that on the supply chain.

312

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– Annual Report 2023

Risk review

Risk proﬁle

Among the bespoke scenarios, we expect our LI intens

ity to r

ise the most in the tail transit

ion r

isk scenario. This is reﬂective of

the potential risks to the global economy and subsequent increase in credit losses that may manifest due to the climate subsidy

competit

ion and

introduct

ion of carbon border adjustment mechan

ism. Overall, we believe that the level of potential credit

losses can be mit

igated by cont

inu

ing to take necessary act

ions which the Group is already doing across sectors, engaging

with our clients on this topic and supporting them in enhancing their climate transit

ion plans.

2050

2045

2040

2035

2030

2026

2022

Loan Impairment intensities for the NGFS and bespoke scenarios (December 2022 snapshot)

1.5%

1.0%

0.5%

2.0%

2.5%

2.7%

0.7%

3.0%

Current polic

ies

SCB in-house

Delayed transit

ion

Tail Physical

Net Zero 2050

Tail Transit

ion

LI Intensity is calculated as gross ECL over EAD

For corporate clients, we focused on the below sectors that have been ident

iﬁed as more vulnerable to potent

ial climate

impacts. As of December 2022, these sectors represented 55 per cent of our corporate portfolio.

Loan Impairment intens

ies for key corporate sectors for the NGFS and bespoke scenarios

Long Term - 2050

EAD

NGFS Net Zero

2050

NGFS Delayed

Transit

ion

NGFS Current

polic

ices

Bespoke

Baseline

Bespoke Tail

Transit

ion R

isk

Bespoke Tail

Physical Risk

Automobiles & Components

Medium

Low

Medium

Construction

Medium

Low

Medium

Consumer Durables & Apparel

Medium

Low

Medium

CRE

Low

Medium

Low

Metal & Min

ing

Medium

Low

Medium

Low

O&G

11%

High

Low

Medium

High

Medium

Telecomms

Medium

Low

Transportation

High

Medium

High

Medium

Util

ies

Medium

Low

Medium

Low

Total portfolio

100%

Medium

Low

Medium

As observed in the table above, O&G and transportation sectors are most impacted by a higher LI intens

ity level across the

scenarios. Higher carbon prices, decrease in O&G demand characterised in the NGFS Net Zero 2050 and NGFS Delayed

Transit

ion scenar

io are the main drivers for higher LI levels for these sectors. The extreme phsycial and transit

ion r

isk events

occurring in the short term and their longer term second order impacts on the global economy result in the higher LI Intensity

levels for these sectors in 2050.

313

Standard Chartered

– Annual Report 2023

Risk review and Capital review

The results are used to assess the impact of climate change

on our portfolio and provide the management informat

ion

to monitor stressed LI over the next ﬁve-year horizon under

plausible and extreme climate scenarios. The results also

form part of our Climate Risk Assessments (CRAs). Whilst

further enhancements are required to improve our modelling

capabil

ies, the results of scenario analysis have provided

further validat

ion to the act

ions we are taking as a Group in

terms of our net zero ambit

ions and strategy and qual

itat

ive

management actions in terms of improv

ing the data qual

ity

and build

ing

in-house modelling expertise. The results have

been subject to internal governance, includ

ing rev

iew and

challenge by an expert panel and discuss

ion at the Cl

imate

Risk Management Committee and Board Risk Committee.

Scenario analysis results for CPBB

As part of our internal climate scenario analysis for CPBB,

we carried out physical risk assessments for ris

ing sea levels

for our top 10 retail mortgage markets. The concentration of

the Group’s portfolio exposure exposed to extreme ris

ing sea

levels risk has been observed to remain stable at 2 per cent in

the most extreme RCP 8.5 scenario.

Further details on the metrics used in the climate scenario

analysis for CPBB can be found in

pages 298 and 299

We measured the impact of physical risk on ECL to the retail

mortgage portfolio for four key markets (Hong Kong, China,

Taiwan and Korea) as part of the HKMA stress test exercise.

For our key resident

ial mortgage markets, we have

collaborated with our academic partner (Imperial College

London) to develop an internal model for revaluating

property valuations under different climate scenarios

using the forward-looking risk ind

ices from Mun

ich Re.

These revaluations are then used to inform haircuts on the

property prices and arrive at climate adjusted ECL values

for the mortgage book.

Lim

itat

ions and next steps

Despite the efforts in gathering transit

ion r

isk data relating to

our CPBB credit portfolios, gaps still exist across our footprint

markets, and we have not been able to run a forward-looking

transit

ion r

isk scenario for CPBB. We have a plan to address

these data gaps by working with third parties, engaging

clients to gather more informat

ion, and us

ing appropriate

proxies for remain

ing data gaps.

Many of the assumptions and methodologies that underpin

the scenario analysis continue to rely sign

iﬁcantly on nascent

methodologies as well as a dependence on ﬁrst generation

models and data challenges. Many of these lim

itat

ions are

shared across the industry. Given the complexit

ies of cl

imate

modelling, it should also be noted that the results do not

include the real-world aspects such as the non-linear shifts

and complex feedback loops. However, they are intended

to provide a strategic direct

ion of the sense of portfol

concentrations subject to potential climate losses.

As more solution providers become available 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 increase. 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

adaptation pathways. Work is under way to build capabil

ity

from a people, process, and technology perspective to

support stress tests at country level, includ

ing

in-house

train

ing and a plan to

implement the in-house models in

the Group infrastructure.

314

Standard Chartered

— Annual Report 2023

Risk review

Risk management approach

Enterprise Risk Management Framework

Risk management is at the heart of banking, it is what we do.

Managing risk effectively is how we drive commerce and

prosperity for our clients and our communit

ies, and

it is how

we grow sustainably and proﬁtably as an organisat

ion.

Effective risk management is essential in deliver

ing cons

istent

and sustainable performance for all our stakeholders and is

a central part of the ﬁnancial and operat

ional management

of the Group. The Group adds value to clients and the

communit

ies

in which they operate by balancing risk and

reward to generate returns for shareholders.

The Enterprise Risk Management Framework (ERMF) enables

the Group to manage enterprise-wide risks, with the object

ive

of maxim

ing risk-adjusted returns while remain

ing w

ith

in our

Risk Appetite (RA). The ERMF is embedded across the Group,

includ

ing

its branches and subsid

iar

ies

, and is reviewed

annually. The latest version is effective from January 2024.

Annual review

In the 2023 review, the concepts of Integrated Risk Types (IRTs)

and IRT Owner roles were discont

inued. Overs

ight on IRTs,

i.e. Climate Risk, Dig

ital Assets and Th

ird Party Risk, is

provided through the Risk Type Frameworks (RTFs) and

relevant dedicated polic

ies. The subject matter experts as

policy owners for these risks provide overall governance

and a holist

ic v

iew of how risks are monitored and managed

across the Princ

ipal R

isk Types (PRTs).

Risk culture

Risk culture encompasses our general awareness, attitudes,

and behaviours towards risk, as well as how risk is managed

at enterprise level.

A healthy risk culture is one in which everyone takes personal

responsib

ity to ident

ify and assess, openly d

iscuss, and

take prompt action to address exist

ing and emerg

ing risks.

We expect those in our control functions to provide oversight

and challenge constructively, collaboratively, and in a timely

manner. This effort is reﬂected in our valued behaviours,

underpinned by our Code of Conduct and Ethics, and

reinforced by how we hire, develop, reward our people, serve

our clients, and contribute to communit

ies around the world.

The risks we face constantly evolve, and we must always look

for ways to manage them as effectively as possible. While

unfavourable outcomes will occur from time to time, a healthy

risk culture means that we react quickly and transparently.

We can then take the opportunity to learn from our

experience and improve our framework and processes.

Strategic risk management

The Group’s approach to strategic risk management includes

the following:

•

Risk ident

iﬁcation:

impact analyses of risks that arise from

the Group’s growth plans, strategic in

iat

ives, and bus

iness

model vulnerabil

ies are reviewed. This assesses how

exist

ing r

isks have evolved in terms of relative importance

or whether new risks have emerged.

•

Risk Appetite: impact analysis is performed to assess if

strategic in

iat

ives can be ach

ieved with

in RA and h

ighl

ight

areas where addit

ional RA should be cons

idered.

•

Stress testing: the risks highl

ighted dur

ing the strategy

review and other risk ident

iﬁcation processes are used

to develop scenarios for enterprise stress tests. In order

to ensure that the Group’s Strategy remains with

in the

approved RA, the Group Chief Risk Ofﬁcer (GCRO) and

Group Chief Financ

ial Ofﬁcer (GCFO) recommend strateg

actions based on the stress test results.

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 (SMR). The GCRO

is responsible for the overall development and maintenance

of the Group’s ERMF and for ident

ify

ing material risks which

the Group may be exposed to. The GCRO delegates effective

implementat

ion of the RTFs to R

isk Framework Owners

(RFO) who provide second line of defence oversight for their

respective PRTs.

In addit

ion, the GCRO

is the senior manager responsible

for the development of the Group’s Dig

ital Assets R

isk

Assessment Approach, and management of Climate Risk.

The Group’s ERMF and System of Internal Control applies only to wholly controlled subsid

iar

ies of the Group, and not to Associates, Joint Ventures or Structured

Entit

ies of the Group.

Senior managers refers to ind

iduals designated as senior management functions under the FCA and PRA Senior Managers Regime.

315

Standard Chartered

— Annual Report 2023

Risk review and Capital review

The Risk function

The Risk function provides oversight and challenge on the

Group’s risk management, ensuring that business is conducted

in line with regulatory expectations. The GCRO directly

manages the Risk function, which is independent from the

orig

inat

ion, trading, and sales functions of the businesses.

The Risk function is responsible for:

•

Determin

ing the RA for approval by Group’s Management

Team (GMT) and the Board.

•

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.

•

Ensuring that risks are properly assessed, risk and return

decis

ions are transparent and r

isks are controlled in

accordance with the Group’s standards and RA.

•

Overseeing and challenging the management of PRTs

under the ERMF.

•

Ensuring that the necessary balance in making risk and

return decis

ions

is not compromised by short-term pressures

to generate revenues through the independence of the

Risk function.

In addit

ion, the R

isk function provides special

ist

capabil

ies relevant to risk management processes

in the broader organisat

ion.

The Risk function supports the Group’s strategy by build

ing

a sustainable ERMF that places regulatory and compliance

standards, together with culture of appropriate conduct,

at the forefront of the Group’s agenda.

Our Conduct, Financ

ial Cr

ime and Compliance (CFCC)

function works alongside the Risk function with

in the ERMF

to deliver a unif

ied second l

ine of defence.

Three lines of defence model

The Group applies a three line of defence model to its

day-to-day activ

ies for effective risk management,

and to reinforce a strong governance and control

environment. Typically:

•

The businesses and functions engaged in or supporting

revenue generating activ

ies that own and manage the

risks constitute the ﬁrst line of defence.

•

The control functions, independent of the ﬁrst line of

defence, that provide oversight and challenge of risk

management activ

ies act as the second line of defence.

•

Internal Audit acts as the third line of defence provid

ing

independent assurance on the effectiveness of controls

supporting the activ

ies of the ﬁrst and second line of

defence functions.

Risk Appetite and proﬁle

The Group recognises the following constraints which

determine the risks that we are will

ing to take

in pursuit of our

strategy and the development of a sustainable business:

•

Risk capacity is the maximum level of risk the Group can

assume, given its current capabil

ies and resources, before

breaching constraints determined by capital and liqu

ity

requirements or the internal operational environment, or

otherwise fail

ing to meet the expectat

ions of regulator and

law enforcement agencies.

•

RA is deﬁned by the Group and approved by the Board.

It is the boundary for the risk that the Group is will

ing

to undertake to achieve its strategic object

ives and

Corporate Plan.

The Board is responsible for approving the RA Statements,

which are underpinned by a set of ﬁnanc

ial and operat

ional

control parameters known as RA metrics and their associated

thresholds. These directly constrain the aggregate risk

exposures that can be taken across the Group.

The Group RA is reviewed at least annually to ensure that it is

ﬁt for purpose and aligned with strategy, with focus given to

new or emerging risks.

Risk Appetite Framework

The Group RA is deﬁned in accordance with risk

management princ

iples that

inform our overall approach

to risk management and our risk culture. We set RA to

enable us to grow sustainably whilst managing our risks,

giv

ing conﬁdence to our stakeholders.

The Group RA is supplemented by risk control tools such as

granular-level lim

its, pol

ies, standards, and other operat

ional

control parameters that are used to mainta

in the Group’s r

isk

proﬁle with

in approved RA.

Risk Appetite Statement

The Group will not compromise compliance with its Risk

Appetite in order to pursue revenue growth or higher returns.

See Table 1 for the set of RA statements.

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 PRTs to classify our risk exposures.

We also recognise the need to mainta

in a hol

ist

perspective since:

•

a single transaction or activ

ity may g

ive rise to multiple

types of risk exposure;

•

risk concentrations may arise from multiple exposures that

are closely correlated; and

•

a given risk exposure may change its form from one risk

type to another.

316

Standard Chartered

— Annual Report 2023

Risk review

Risk management approach

There are also sources of risk that arise beyond our own

operations, such as the Group’s dependency on suppliers

for the provis

ion of serv

ices and technology.

As the Group remains accountable for risks aris

ing from the

actions of such third parties, failure to adequately monitor

and manage these relationsh

ips could mater

ially impact the

Group’s abil

ity to operate.

The Group mainta

ins a 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

PRTs, and risk sub-types; as well as the Topical and Emerging

Risks (TERs) inventory that includes near-term as well as

longer-term uncertaint

ies. R

isk assessments of planned

growth and strategic in

iat

ives aga

inst the Group’s RA is

undertaken annually.

The GCRO and the Group Risk Committee (GRC) regularly

review reports on the risk proﬁle for the PRTs, adherence

to Group RA and the Group risk inventory, includ

ing TERs.

They use this informat

ion to escalate mater

ial developments

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;

•

understands key business model risks and considers what

kind of event might crystallise those risks – even if extreme

and with a low likel

ihood of occurr

ing;

•

Identify, as required, actions to mit

igate the l

ikel

ihood or

impact of those events;

•

considers how the outcome of plausible stress events,

includ

ing TERs, may

impact availab

ity of liqu

ity and

regulatory capital; and

•

has set RA metrics at appropriate levels.

Enterprise stress tests incorporate Capital and Liqu

ity

Adequacy Stress Tests, includ

ing recovery and resolut

ion,

as well as reverse stress tests.

Stress tests are performed at the Group, country, business,

and portfolio level under a wide range of risks and at varying

degrees of severity. Unless specif

ically set by the regulator,

scenario design is a bespoke process that aims to explore risks

that can adversely impact the Group.

The Board delegates approval of the Bank of England (BoE)

stress test submiss

ions to the Board R

isk Committee (BRC),

which reviews the recommendations from the GRC. Based on

the stress test results, the GCFO and GCRO can recommend

strategic actions to the Board to ensure that the Group’s

strategy remains with

in RA.

In addit

ion, analys

is is run at PRT level to assess specif

ic r

isks

and concentrations that the Group may be exposed to.

These include qualitat

ive assessments such as stress

ing of

credit sectors or portfolios, measures such as Value at Risk

(VaR) and multi-factor scenarios in Traded Risk and internal

stressed liqu

ity metrics. Non-ﬁnanc

ial r

isk types are also

stressed to assess the necessary capital requirements under

the Operational & Technology RTF.

The Group has also undertaken a number of Climate Risk

stress tests, both those mandated by regulators as well as

management scenarios.

317

Standard Chartered

— Annual Report 2023

Risk review and Capital review

Princ

ipal R

isk Types

PRTs are those risks that are inherent in our strategy and business model and have been formally deﬁned in the Group’s ERMF.

These risks are managed through dist

inct RTFs wh

ich are approved by the GCRO.

The PRTs and associated RA Statements are reviewed annually.

The table below shows the Group’s current PRTs.

Table 1: Princ

ipal R

isk Types Deﬁn

ion and RA Statement

Princ

ipal R

isk Types

Deﬁnit

ion

Risk Appetite Statement

Credit Risk

Potential for loss due to failure of a counterparty to

meet its agreed obligat

ions to pay the Group.

The Group manages its credit exposures following the

princ

iple of d

ivers

iﬁcation across products, geograph

ies,

client segments and industry sectors.

Traded Risk

Potential for loss resulting from activ

ies undertaken

by the Group in ﬁnanc

ial markets.

The Group should control its ﬁnanc

ial markets and

activ

ies to ensure that market and counterparty

credit risk losses do not cause material damage to

the Group’s franchise.

Treasury Risk

Potential for insuff

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.

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

banking book items does not cause material damage

to the Group’s franchise. In addit

ion, the Group should

ensure its pension plans are adequately funded.

Operational and

Technology Risk

Potential for loss resulting from inadequate or failed

internal processes, technology events, human error,

or from the impact of external events (includ

ing

legal risks).

The Group aims to control operational and technology

risks to ensure that operational losses (ﬁnanc

ial or

reputational), includ

ing any related to conduct of

business matters, do not cause material damage to

the Group’s franchise.

Financ

ial Cr

ime

Risk

Potential for legal or regulatory penalties, material

ﬁnancial loss or reputat

ional damage resulting

from the failure to comply with applicable laws

and regulations relating to internat

ional sanct

ions,

anti-money laundering and anti-bribery and

corruption, and fraud.

The Group has no appetite for breaches in laws and

regulations related to Financ

ial Cr

ime, recognis

ing

that whilst inc

idents are unwanted, they cannot be

entirely avoided.

Compliance Risk

Potential for penalties or loss to the Group or for an

adverse impact to our clients, stakeholders or to the

integr

ity of the markets we operate

in through a

failure on our part to comply with laws, or regulations.

The Group has no appetite for breaches in laws and

regulations related to regulatory non-compliance;

recognis

ing that wh

ilst inc

idents are unwanted, they

cannot be entirely avoided.

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.

The Group aims to mit

igate and control ICS r

isks to

ensure that inc

idents do not cause the Bank mater

ial

harm, business disrupt

ion, ﬁnancial loss or reputat

ional

damage – recognis

ing that wh

ilst inc

idents are

unwanted, they cannot be entirely avoided.

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 as we strive to do no sign

iﬁcant

environmental and social harm through our client,

third party relationsh

ips, or our own operat

ions.

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 w

ith

the appropriate level of management and governance

oversight. This includes a potential failure to uphold

responsible business conduct in striv

ing to do no

sign

iﬁcant env

ironmental and social harm.

Model Risk

Potential loss that may occur because of decis

ions or

the risk 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.

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 some model uncertainty.

Fraud forms part of the Financ

ial Cr

ime RA Statement but in line with market practice does not apply a zero-tolerance approach

In addit

ion to the PRTs, there

is a RA statement for Climate Risk: “The Group aims to measure and manage ﬁnanc

ial and

non-ﬁnancial r

isks aris

ing from cl

imate 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.”

318

Standard Chartered

— Annual Report 2023

Risk review

Risk management approach

ERMF effectiveness reviews

The GCRO is responsible for annually afﬁrm

ing the

effectiveness of the ERMF to the BRC via an effectiveness

review. This review uses evidence-based self-assessments for

all the RTFs and relevant polic

ies. A top-down rev

iew and

challenge of the results is conducted by the GCRO with all

RFOs and an opin

ion on the

internal control environment is

provided by Group Internal Audit.

The ERMF effectiveness review enables measurement

of year-on-year progress. The key outcomes of the 2023

review are:

•

Continued focus on embedding the ERMF across the

organisat

ion.

•

Financ

ial r

isks continue to be more effectively managed

and the Group continues to make good progress in

embedding non-ﬁnanc

ial r

isk management.

•

Other aspects of the ERMF, includ

ing the key r

isk

committees and key supporting standards, are established.

•

Country-led self-assessments ensure adherence to the

ERMF. Country and regional risk committees continue to

play an active role in managing and overseeing material

issues aris

ing

in countries.

Ongoing ffectiveness reviews allow for a structured approach

to ident

ify

improvement opportunit

ies and bu

ild plans to

address them.

In 2024, the Group aims to further strengthen its risk

management practices by improv

ing the management of

non-ﬁnancial r

isks with

its businesses, functions and across

our 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 BRC, which also recommends the Group RA

Statement for all PRTs. In addit

ion, the Culture and

Sustainab

ity Committee oversees the Group’s culture

and key sustainab

ity prior

ies.

Board and Executive level risk committee governance

structure

The Committee governance structure below presents the

view as of 2023.

Board of Directors

Board Risk

Committee

Governance

and

Nominat

ion

Committee

Culture and

Sustainab

ity

Committee

Remuneration

Committee

Audit

Committee

Board level committees

Group Risk Committee

The GRC, which derives its authority from the GCRO, is

responsible for ensuring the effective management of risk

throughout the Group in support of the Group’s strategy.

The GCRO chairs the GRC, whose members are drawn

from the Group Management Team. The GRC oversees

the effective implementat

ion of the ERMF for the Group,

includ

ing the delegat

ion of any part of its authorit

ies to

appropriate ind

iduals or sub-committees.

Group Risk Committee sub-committees

• The

Group Non-Financ

ial R

isk Committee (GNFRC)

chaired by the Global Head, Risk, Functions and

Operational Risk, governs the non-ﬁnanc

ial r

isks throughout

the Group, in support of the ERMF and the Group’s strategy.

The GNFRC also reviews the adequacy of the internal

control system across in-scope PRTs.

• The

Group Financ

ial Cr

ime Risk Committee (GFCRC)

chaired by the Group Head, CFCC, governs the Financ

ial

Crime Risk Type (excluding Fraud Risk and Secondary

Reputational Risk aris

ing from F

inanc

ial Cr

ime Risk).

The GFCRC ensures that the Financ

ial Cr

ime Risk proﬁle

is managed with

in RA and pol

ies.

319

Standard Chartered

— Annual Report 2023

Risk review and Capital review

• The

Group Responsib

ity and Reputational Risk

Committee (GRRRC)

, chaired by the Group Head, CFCC,

ensures the effective management of Reputational and

Sustainab

ity Risk across the Group. This includes provid

ing

oversight of matters aris

ing from cl

ients, products,

transactions and strategic coverage-related decis

ions

and matters escalated by the respective RFOs.

•

The International Financ

ial Report

ing Standards

(IFRS) 9

Impairment Committee

, co-chaired by the Global Head

Enterprise Risk Management (ERM) and Group Head,

Central Finance, ensures the effective management of

Expected Credit Loss (ECL) computations, as well as

stage allocation of ﬁnanc

ial assets for quarterly

ﬁnancial report

ing.

• The

Model Risk Committee

, chaired by the Global Head,

ERM, ensures the effective measurement and management

of Model Risk in line with internal polic

ies and RA.

• The

Corporate, Commercial and Institut

ional Bank

ing

(CCIB) Risk Committee

, chaired by the Chief Risk Ofﬁcer

(CRO), CCIB and Europe and Americas, ensures the effective

management of risk throughout CCIB in support of the

Group’s strategy.

• The

Consumer, Private and Business Banking (CPBB)

Risk

Committee, chaired by the CRO, 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 CRO for the respective

region. These committees ensure the effective

management of risk in the regions in support of the

Group’s strategy.

• The

Investment Committee

, chaired by representatives

from the Risk function (CRO, Stressed Asset Group (SAG),

Chief Credit Ofﬁcer), ensures the optim

ised w

ind-down of

the Group’s exist

ing d

irect investment activ

ies in equit

ies,

quasi-equit

ies (exclud

ing mezzanine), funds and other

alternative investments (excluding debt/debt-like

instruments). This includes equity or quasi-equity stakes

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 the Credit and Portfolio

Management.

• The

SC Ventures (SCV) Risk Committee

, chaired by the

CRO, SCV, receives authority directly from the GCRO and

oversees the effective management of risk throughout

SCV and the portfolio of subsid

iar

ies operating under SCV,

in support of the Group’s strategy.

• The

Climate Risk Management Committee (CRMC)

chaired by the Global Head, ERM, oversees the effective

implementat

ion of the Group’s Cl

imate Risk Policy and

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 ERM and Group Head, Central Finance,

provides oversight of material regulatory interpretat

ions

for the Capital Requirements Regulation (as amended by

UK legislat

ion), the Prudent

ial Regulatory Authority (PRA)

rulebook and other relevant regulations impact

ing

Group regulatory capital calculations and reporting.

The areas and risk types in scope are credit risk, traded

risk, operational risk, large exposures, leverage ratio

and securit

isat

ion.

• The

Dig

ital Assets R

isk Committee

, chaired by the Global

Head, ERM, oversees effective risk management of the

Dig

ital Assets (DA) R

isk proﬁle of the Group. This includes

provid

ing overs

ight and subject matter expertise of DA Risk

matters aris

ing from DA-related act

ies across the PRTs.

Group Asset and Liab

ity Committee

The Group Asset and Liab

ity Committee (GALCO) is chaired

by the GCFO. Its members are drawn princ

ipally from the

Management Team. GALCO is responsible for determin

ing

the Group’s balance sheet strategy and for ensuring that,

in executing the Group’s strategy, the Group operates with

RA and regulatory requirements relating to capital, loss-

absorbing capacity, liqu

ity, leverage, Interest Rate Risk in the

Banking Book (IRRBB), Banking Book Basis Risk and Structural

Foreign Exchange Risk. It also monitors the structural impact

of decis

ions around susta

inable ﬁnance, net zero and climate

risk. GALCO is also responsible for ensuring that internal and

external recovery planning requirements are met.

320

Standard Chartered

– Annual Report 2023

Risk review

Risk management approach

Princ

ipal r

isks

We manage and control our PRTs through

dist

inct RTFs, pol

ies and RA.

The Group deﬁnes Credit Risk as the potential for loss

due to 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 RTF for the Group are set and owned by the CROs

for the respective business segments.

The Credit Risk control function is the second line of defence

responsible for independent challenge, monitor

ing and

oversight of the Credit Risk management practices of 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

in accordance with the Group’s RA,

credit polic

ies and standards.

Mit

igat

ion

Segment-specif

ic pol

ies for CCIB and CPBB 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 credit process, includ

ing cred

it in

iat

ion,

credit 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, for

end-to-end credit process includ

ing cred

it in

iat

ion, cred

assessment, documentation 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 is 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 BRC oversees the effective management

of Credit Risk. At the executive level, the GRC oversees and

appoints sub-committees for the management of all risk

types includ

ing Cred

it Risk – in particular the CCIB Risk

Committee, CPBB Risk Committee, Asia Risk Committee,

and Africa and Middle East Risk Committee. The GRC also

receives reports from other key Group Committees such as

the Standard Chartered Bank Executive Risk Committee

(in relation to Credit Risk).

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,

ensuring that appropriate action is taken where necessary.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Credit RTF is the formal mechanism of delegating

Credit Risk authorit

ies cascad

ing from the GCRO, as the

Senior Manager of the Credit Risk PRT. The delegation is to

ind

iduals such as the business segments’ CROs. Further

delegation of credit authorit

ies to

ind

idual credit ofﬁcers

may be undertaken 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 period

ically. In

CPBB, where credit decis

ion systems and tools (e.g. appl

icat

ion

scorecards) are used for credit decis

ion

ing, such risk models

are subject to performance monitor

ing and per

iod

validat

ion. Where manual or d

iscret

ionary cred

it decis

ions

are applied, the ind

iduals delegating the Credit Risk

authorit

ies perform per

iod

ic qual

ity control assessments

and assurance checks.

Credit Risk

321

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Monitor

ing

The Group regularly monitors credit exposures, portfolio

performance, external trends and emerging risks that

may impact risk management outcomes. Internal risk

management reports that are presented to risk committees

contain informat

ion on key pol

ical and econom

ic trends

across major portfolios and countries, portfolio delinquency

and loan impa

irment performance.

In CCIB Client Coverage, clients and portfolios are subject

to addit

ional rev

iew when they display signs of actual or

potential weakness; for example, where there is a decline in

the client’s posit

ion w

ith

in 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 subject to a

dedicated process overseen by the Credit Issues Committee

in the relevant countries where client account strategies and

credit grades are re-evaluated. In addit

ion, remed

ial actions,

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 SAG,

which is our special

ist recovery un

it for CCIB Client Coverage

that operates independently from our main business.

On an annual basis, senior members from Business and Risk

partic

ipate

in a more extensive portfolio review for certain

corporate industry groups. In addit

ion to a rev

iew of the

portfolio informat

ion, th

is enhanced review (known as the

industry portfolio review) incorporates industry outlook,

key elements of business strategy, RA, credit proﬁle and

emerging/horizon risks. A condensed version of these

industry portfolio reviews will also be shared with the CCIB

Risk Committee.

Any material in-country developments that may impact

sovereign ratings are monitored closely by the Country Risk

Team. The Country Risk Early Warning system, a triage-based

risk ident

iﬁcation system, categor

ises countries based on

a forward-looking view of possible downgrades and the

potential incremental risk-weighted assets (RWA) impact.

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 RA. Portfol

io delinquency trends are

also monitored. Accounts that are past due (or perceived as

high risk but not yet past due) are subject to collections or

recovery processes managed by a special

ist

independent

function. In some countries, aspects of collections and

recovery activ

ies are outsourced. For discret

ionary lend

ing

portfolios, sim

ilar processes to those of CCIB cl

ient coverage

are followed.

In addit

ion, an

independent Credit Risk Review team (part of

ERM function), performs judgement-based assessments of

the Credit Risk proﬁles at various portfolio levels. They focus

on selected countries and segments through deep dives,

comparative analysis, and review and challenge of the basis

of credit approvals. The review ensures that the evolving

Credit Risk proﬁles of CCIB and CPBB are well managed with

RA and polic

ies, through forward-look

ing mit

igat

ing actions

where necessary.

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

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 applicable, the assessment includes a detailed

analysis of the Credit Risk mit

igat

ion arrangements to

determine the level of reliance on such arrangements as the

secondary source of repayment in the event of a sign

iﬁcant

deteriorat

ion

in a client’s credit quality leading to default.

Client income, net worth, and the liqu

ity of asset by class

are considered for overall risk assessment for wealth lending.

The availab

ity of Wealth Lending credit lim

its

is subject to

the availab

ity of qualif

ied collateral.

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 (AIRB) approach under the Basel regulatory

framework to calculate Credit Risk capital requirements.

The Group has also established a global programme to assess

capital requirements necessary to be implemented to meet

the latest revised Basel III ﬁnal

isat

ion (referred to as Basel 3.1

or 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. The R

isk Decis

ion Framework uses a

credit rating system to deﬁne the portfolio/new booking

segmentation, shape and decis

ion cr

iter

ia for the unsecured

consumer business segment.

AIRB models cover a substantial major

ity 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.

The Model Risk Committee approves material internal

ratings-based risk measurement models. Prior to review and

approval, all internal ratings based models are validated in

detail 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.

322

Standard Chartered

– Annual Report 2023

Risk review

Risk management approach

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. RA metr

ics

are set at portfolio level and monitored to control

concentrations, where appropriate, by industry, 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 GRC and BRC.

Credit impa

irment

ECL is determined for all ﬁnanc

ial assets that are class

ied

as amortised cost or fair value through other comprehensive

income. ECL is computed as an unbiased, probabil

ity-

weighted 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-spec

macroeconomic variables. For more detailed informat

ion on

macroeconomic data feeding into IFRS 9 ECL calculations,

please refer to the Risk proﬁle section (pages 273 to 285).

At the time of orig

inat

ion or purchase of a non-credit impa

ired

ﬁnancial asset (Stage 1), ECL represents cash shortfalls ar

ing

from possible default events up to 12 months into the future

from the balance sheet date. ECL continues 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 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 continues to be measured on a lifet

ime

basis. 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 RA metric to monitor Stage 1 and Stage 2

ECL from assets orig

inated

in the past 12 months.

For CCIB, in line with the regulatory guidel

ines, Stage 3 ECL

considered when an obligor is more than 90 days past due

on any amount payable to the Group, or the obligor(s) has

symptoms of unlikel

iness to pay

its credit obligat

ions

in full as

they fall due. These credit-impa

ired accounts are managed

by SAG.

In CPBB, loans to ind

iduals and small businesses are

considered credit-impa

ired as soon as any payment of

interest or princ

ipal

is 90 days overdue or they meet other

objective ev

idence of impa

irment, such as bankruptcy, debt

restructuring, fraud, or death. Financ

ial assets are wr

itten off,

in the amount that is determined to be irrecoverable, when

they meet condit

ions set such that emp

ical ev

idence

suggests the client is unlikely to meet their contractual

obligat

ions, or a loss of pr

inc

ipal

is reasonably 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 ECL

under IFRS 9, please refer to the Risk proﬁle section (pages 273

to 285).

323

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Roles and responsib

ies

The Traded RTF, which sets the roles and responsib

ies

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 respons

ies set by the Board.

TRM is the 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.

Mit

igat

ion

The Traded RTF requires that Traded Risk lim

its be deﬁned at

a level appropriate to ensure that the Group remains with

RA. All businesses incurr

ing Traded R

isk must comply with the

Traded RTF. 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 period

ically to ensure the

ongoing effectiveness.

Governance committee oversight

At Board level, the BRC oversees the effective management

of Traded Risk. At the executive level, the GRC delegates

responsib

ies to the CCIB R

isk Committee to oversee the

Traded Risk proﬁle of the Group. For subsid

iar

ies, the authority

for setting Traded Risk lim

its

is delegated from the local board

to the local risk committee, Country CRO 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 Traded RTF 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 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 cond

ions to

estimate the potential future loss in market value that will not

be exceeded in a set time period at a set statist

ical conﬁdence

level. VaR provides a consistent measure that can be applied

across trading businesses and products over time and can be

set against actual daily trading proﬁt and loss outcomes.

For day-to-day risk management, VaR is calculated as at the

close of business, generally at UK time for expected market

movements over one business day and to a conﬁdence level

of 97.5 per cent. Intra-day risk levels may vary from those

reported at the end of the day.

The Group applies two VaR methodologies:

•

Histor

ical s

imulat

ion: th

is involves the revaluation of all

exist

ing pos

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 2023 is available in the Risk proﬁle

section (pages 286 to 289).

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 and

activ

ies to ensure that market and counterparty

credit risk losses do not cause material damage to

the Group’s franchise.

Traded Risk

324

Standard Chartered

– Annual Report 2023

Risk review

Risk management approach

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 RA

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 Comm

ittee,

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 RA. L

its are typ

ically

reviewed twice a year. Most of the Traded Risk exposures are

monitored daily against approved lim

its. Traded R

isk lim

its

apply at all times unless separate intra-day lim

its have

been set. Lim

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.

325

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Roles and responsib

ies

The Global Head, ERM is responsible for the RTF for Treasury

Risk under the ERMF.

The Group Treasurer is supported by teams in Treasury and

Finance to implement the Treasury RTF as the ﬁrst line of

defence and is responsible for managing Treasury Risk.

At Regional and Country level, Chief Executive Ofﬁcers (CEOs)

supported by Regional and Country level Finance and

Treasury teams are responsible for managing Treasury Risk

as the ﬁrst line of defence. Regional Treasury CROs and

Country CROs 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 RA. In order

to do this, metrics are set against Capital Risk, Liqu

ity and

Funding Risk and IRRBB. Where appropriate, RA metrics are

cascaded down to regions and countries in the form of Lim

its

and Management Action Triggers.

Capital Risk

In order to manage Capital Risk, strategic business, and

capital plans (Corporate Plan) are drawn up covering a

ﬁve-year horizon 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.

RA metrics includ

ing cap

ital, leverage, Min

imum Requ

irement

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 Foreign Exchange (FX) Risk

The Group’s structural FX posit

ion results from the Group’s

non-US dollar investment in the share capital and reserves

of subsid

iar

ies and branches. The FX translation gains, or

losses, are recorded in the Group’s translation reserves with

a direct impact on the Group’s Common Equity Tier 1 ratio.

The Group contracts hedges to manage its structural FX

posit

ion

in accordance with the RA, and as a result the

Group has taken net investment hedges to partially cover

its exposure to certain non-US dollar currencies to mit

igate

the FX impact of such posit

ions on

its capital ratios.

Liqu

ity and Funding Risk

At Group, regional and country level we implement various

business-as-usual and stress risk metrics to monitor and

manage liqu

ity and funding risk. This ensures that the Group

mainta

ins an adequate and well-d

ivers

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 RA is 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 RA.

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

it 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. The Pens

ion Risk posit

ion aga

inst RA

metric is reported to the GRC. This metric is calculated as the

total capital requirement (includ

ing both P

illar 1 and Pillar 2A

capital) in respect of Pension Risk, expressed as a number of

basis points of RWA.

Recovery and Resolution Planning

In line with PRA requirements, the Group mainta

ins a Recovery

Plan which is a live document to be used by management in

the event of stress in order to restore the Group to a stable

and sustainable posit

ion. The Recovery Plan

includes a set of

recovery ind

icators, an escalat

ion framework, and a set of

management actions capable of being implemented during

a stress. A Recovery Plan is also mainta

ined w

ith

in each

major entity, and all recovery plans are subject to period

ﬁre-drill testing.

The Group deﬁnes Treasury Risk 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

326

Standard Chartered

– Annual Report 2023

Risk review

Risk management approach

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. In support of this

strategy, the Group has been developing a set of capabil

ies,

arrangements, and resources to achieve the required

outcomes. Following the BoE’s ﬁrst resolvabil

ity assessment

and public disclosure for major UK ﬁrms in 2022, the second

Resolvabil

ity Assessment Framework (RAF) cycle

is under way.

The Group submitted its Resolvabil

ity Assessment Report to

the BoE and PRA on 6 October 2023 and is due to publish its

resolvabil

ity publ

ic disclosure in June 2024.

Governance committee oversight

At the Board level, the BRC oversees the effective

management of Treasury Risk. At the executive level, the

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 RA and other

internal

and external requirements relating to Treasury Risk (except

Pension Risk). The GRC 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 GCFO has responsib

ity for capital, funding, and

liqu

ity under the SMR. The GCRO has delegated the RFO

responsib

ies assoc

iated with Treasury Risk to the Global

Head, ERM. The Global Head, ERM delegates second line of

defence oversight and challenge responsib

ies to the

Treasury CRO and Country CROs for Capital Risk, Liqu

ity

and Funding Risk and IRRBB, 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 CEOs. 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 RA and supporting risk measures which enable

members to make informed decis

ions around the overall

management of the balance sheet.

In addit

ion, an

independent Treasury CRO as part of ERM

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, the Treasury CRO and the Global Head, ERM on

a period

ic bas

is.

327

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Changes to Third Party Risk

With effect from January 2024, the Group has removed the

IRT classif

icat

ion and formally included Third Party Risk as a

sub risk under Operational and Technology Risk. Third Party

Risk is deﬁned as the potential for loss or adverse impact due

to the failure to manage the onboarding, lifecycle and exit

strategy of a third party. The Third Party Risk Management

Policy and Standard, in conjunct

ion w

ith the respective

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.

Roles and responsib

ies

The Operational and Technology RTF sets the roles and

responsib

ies

in respect of Operational and Technology risk

for the Group. The Operational and Technology RTF deﬁnes

the Group’s Operational and Technology risk sub-types 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 Operational and Technology

RTF. The list of risk sub-types includes Execution Capabil

ity,

Governance, Reporting and Obligat

ions, Legal Enforceab

ity,

and Operational Resil

ience (

includ

ing cl

ient service, change

management, people management, safety and security,

and technology risk).

The Operational and Technology RTF reinforces clear

accountabil

ity for manag

ing risk throughout the Group and

delegates second line of defence responsib

ies to

ident

iﬁed

SMEs. For each risk sub-type, the subject matter expert sets

polic

ies and standards for the organ

isat

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

objectives are met.

Mit

igat

ion

The Operational and Technology RTF sets out the Group’s

overall approach to the management of Operational

and Technology risk in line with the Group’s Operational

and Technology RA. This is supported by the Risk and

Control Self-Assessment (RCSA) which deﬁnes roles and

responsib

ies for the

ident

iﬁcation, control, and mon

itor

ing

of risks (applicable to all PRTs, risk sub-types and IRTs).

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 failures in these processes and

the related risks of such failures;

•

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; and

•

assessments of residual risk and timely actions for

elevated risks.

Risks that exceed the Group’s Operational and Technology RA

require treatment plans to address underlying causes.

Governance committee oversight

At Board level, the BRC oversees the effective management

of Operational and Technology risk. At the executive level,

the GRC is responsible for the governance and oversight of

Operational and Technology risk for the Group. The GRC,

supported by the GNFRC, monitors the Group’s Operational

and Technology RA and relies on other key committees for

the management of Operational and Technology risk.

Regional business segments and functional committees also

provide governance oversight of their respective processes

and related Operational and Technology risk. In addit

ion,

Country Non-Financ

ial R

isk Committees (CNFRCs) oversee

the management of Operational and Technology Risk at the

country (or entity) level. In smaller countries, the responsib

ies

of the CNFRC may be exercised 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 GCRO has delegated the RFO responsib

ies assoc

iated

with the Operational and Technology RTF to the Global Head

of Risk, Functions and Operational Risk (GHRFOR).

The Operational and Technology RTF is the formal

mechanism through which the delegation of Operational

and Technology Risk authorit

ies

is made. The GHRFOR places

reliance on the respective SMEs for second line of defence

oversight of the relevant Operational and Technology risk

sub-types through the Operational and Technology RTF.

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

328

Standard Chartered

– Annual Report 2023

Risk review

Risk management approach

Monitor

ing

To deliver services to clients and to partic

ipate

in the ﬁnanc

ial

services sector, the Group runs processes which are exposed

to Operational and Technology risks. The Group prior

ises

and manages risks which are sign

iﬁcant to cl

ients and to the

ﬁnancial serv

ices sectors. Control ind

icators are regularly

monitored to determine the Group’s exposure to residual risk.

The residual risk assessments and reporting of events form

the Group’s Operational and Technology Risk proﬁle.

The completeness of the Operational and Technology Risk

proﬁle ensures appropriate prior

isat

ion and t

imel

iness of

risk decis

ions,

includ

ing r

isk acceptances with treatment

plans for risks that exceed acceptable thresholds.

The Board Risk Committee is informed on adherence to

Operational and Technology RA through metrics reported for

selected risks. These metrics are monitored, and escalation

thresholds are devised based on the material

ity and

sign

iﬁcance of the r

isk. These Operational and Technology RA

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.

329

Standard Chartered

– Annual Report 2023

Risk review and Capital review

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

Financ

ial Conduct Author

ity (FCA) controlled function and

senior management function in accordance with the

requirements set out by the FCA, includ

ing those set out

their handbook on systems and controls. As the ﬁrst line of

defence, the business process owners have responsib

ity for

the applicat

ion of pol

icy controls and the ident

iﬁcation and

measurement of risks relating to ﬁnanc

ial cr

ime. The business

must communicate risks and any policy non-compliance to

the second line of defence 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

Crime RTF:

•

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 RTF, in addit

ion to

oversight by CFCC Assurance.

Governance committee oversight

Financ

ial Cr

ime Risk with

in the Group

is governed by the

GFCRC and the GNFRC for Fraud Risk.

The GFCRC is responsible for ensuring effective oversight for

operational risk relating to Financ

ial Cr

ime Risk. Board Level

oversight of Financ

ial Cr

ime risk is performed by the Audit

Committee and the BRC.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Financ

ial Cr

ime RTF is the formal mechanism through

which the delegation of Financ

ial Cr

ime Risk authorit

ies

made. The Group Head, CFCC is the RFO for Financ

ial Cr

ime

Risk under the Group’s ERMF. Certain aspects of Financ

ial

Crime Compliance, second line of defence 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 RA metrics. These metrics are reviewed period

ically

and reported regularly to the GFCRC, GNFRC, BRC, GRC, and

relevant Board committees.

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 and

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

ilst inc

idents are unwanted,

they cannot be entirely avoided.

Financ

ial Cr

ime Risk

330

Standard Chartered

– Annual Report 2023

Risk review

Risk management approach

Roles and responsib

ies

The Group Head, CFCC as RFO 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; and

•

setting enterprise-wide standards for management

of compliance risks through the establishment and

maintenance of the Compliance RTF.

The Group Head, CFCC also performs the FCA controlled

function and senior management function of Compliance

Risk oversight in accordance with the requirements set out by

the FCA.

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 of defence oversight and challenge of the ﬁrst

line of defence risk management activ

ies that relate to

Compliance Risk. Where Compliance Risk arises, or could

arise, from failure to manage another PRT or sub-type, the

Compliance RTF outlines that the responsib

ity rests with the

respective RFO or control function to ensure that effective

oversight and challenge of the ﬁrst line of defence can be

provided by the appropriate second line of defence function.

Each of the assigned second line of defence functions have

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 overs

ight and

challenge of ﬁrst line of defence processes and controls.

In addit

ion, the rem

it of CFCC has been further clarif

ied

2023 in relation to Compliance risk and the boundary of

responsib

ies w

ith other PRTs.

Mit

igat

ion

The CFCC function is responsible for the establishment

and maintenance of polic

ies, standards and controls to

ensure continued legal and regulatory compliance, and the

mit

igat

ion of Compliance Risk. In this, the requirements of

the Operational and Technology RTF are followed to ensure

a consistent approach to the management of processes

and controls.

The deployment of technological solutions to improve

efﬁcienc

ies and simpl

ify processes has cont

inued in 2023.

These include launch of a new Regulatory Change

Management System for Group regulatory obligat

ions

management, and further enhancement of the Ask

Compliance platform.

Governance committee oversight

Both Compliance Risk and the risk of non-compliance with

laws and regulations resulting from failed processes and

controls are reported at the respective country, business,

product, function, Risk and CFCC Non-Financ

ial R

isk

Committees. Relevant matters, as required, are further

escalated to the GNFRC and GRC. At Board level, oversight of

Compliance Risk is primar

ily prov

ided by the Audit Committee,

and by the BRC for relevant issues.

Whilst not a formal governance committee, the CFCC

Oversight Group provides oversight of CFCC risks includ

ing

the effective implementat

ion of the Compl

iance RTF. The

Regulatory Change Oversight Forum provides vis

ity and

oversight of material and/or complex large-scale regulatory

change emanating from Financ

ial Serv

ices regulators

impact

ing Non-F

inanc

ial R

isks. The CFCC Policy Council

provides oversight, challenge and direct

ion to Compl

iance

and FCC Policy Owners on material changes and posit

ions

taken in CFCC-owned polic

ies,

includ

ing

issues relating to

regulatory interpretat

ion and Group’s CFCC RA.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Compliance RTF 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 of defence responsib

ies w

ith

in the CFCC

function 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 RTF. 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, GNFRC, GRC, BRC,

and relevant Board committees.

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

331

Standard Chartered

– Annual Report 2023

Risk review and Capital review

The Group deﬁnes ICS Risk as the risk to the Group’s

assets, operations, and ind

iduals due to the potential

for unauthorised access, use, disclosure, disrupt

ion,

modif

icat

ion, or destruction of informat

ion assets

and/or informat

ion systems.

Risk Appetite Statement

The Group aims to mit

igate and control ICS r

isks

to ensure that inc

idents do not cause the Bank

material harm, business disrupt

ion, ﬁnancial

loss or reputational damage - recognis

ing that

whilst inc

idents are unwanted, they cannot be

entirely avoided.

Information and Cyber Security (ICS) Risk

Roles and responsib

ies

The Group’s 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 the 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 of defence also manages all key ICS Risks, breaches

and risk treatment plans. ICS Risk proﬁle, RA breaches and

remediat

ion status are reported at Board and Execut

ive

committees, alongside business, function and country

governance committees.

The Group Chief Information Security Risk Ofﬁcer (CISRO)

function with

in Group R

isk 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.

The ICS Policy and standards are aligned to industry best

practice models includ

ing the Nat

ional Institute of Standards

and Technology Cyber Security Framework and ISO 27001.

This function has the responsib

ity for governance, oversight,

and independent challenge of ﬁrst line of defence’s pursuit of

the ICS strategy. Group ICS Risk Framework Strategy remains

the responsib

ity of the ICS RFO (RFO), delegated from the

GCRO to the Group CISRO.

Mit

igat

ion

ICS Risk is managed through the ICS RTF, compris

ing a

risk 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 ERMF.

Governance committee oversight

The BRC oversees the effective management of ICS Risk.

The GRC has delegated authority to the GNFRC to ensure

effective implementat

ion of the ICS RTF. The GRC and GNFRC

are responsible for oversight of ICS Risk proﬁle and RA

breaches. Sub-committees of the GNFRC have oversight of

ICS Risk management aris

ing from the bus

inesses, countries

and functions.

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 at a bus

iness,

function, region and country level.

The Group CISO is responsible for implement

ing ICS R

isk

Management with

in the Group, and to cascade ICS r

isk

management into the businesses, functions and countries

to comply with the ICS RTF, policy, and standards.

Monitor

ing

Group CISO performs 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 RA.

The ICS Risk proﬁles of all businesses, functions and countries

are consolidated to present a holist

ic Group-level ICS R

isk

proﬁle for ongoing monitor

ing. Mandatory ICS learn

ing,

phish

ing exerc

ises and role-specif

ic tra

ing support

colleagues to monitor and manage this risk.

During these reviews, the status of each risk is assessed

against the Group’s controls to ident

ify any changes to

impact and likel

ihood, wh

ich affects the overall risk rating.

Group CISO and Group CISRO monitor the ICS Risk proﬁle and

ensure that breaches of RA are escalated to the appropriate

governance committee or authority levels for remediat

ion and

tracking. A dedicated Group CISRO team supports this work

by executing offensive security testing exercises, includ

ing

vulnerabil

ity assessments and penetrat

ion tests, which show

a wider picture of the Group’s risk proﬁle, leading to better

vis

ity on potent

ial ‘in ﬂight’ risks. The Group also tracks

remediat

ion of secur

ity matters ident

iﬁed by external rev

iews

such as the

BoE CBEST Threat Intelligence-Led Assessment

and the Hong Kong Monetary Authority’s (HKMA)

Intelligence-led Cyber Attack Simulat

ion Test

ing (iCAST).

332

Standard Chartered

– Annual Report 2023

Risk review

Risk management approach

Roles and responsib

ies

The Global Head, ERM is responsible as RFO for Reputational

and Sustainab

ity Risk under the Group’s ERMF.

Our Reputational and Sustainab

ity RTF allocates

responsib

ies

in a manner consistent with the three lines of

defence model.

In the ﬁrst line of defence, the Chief Sustainab

ity Ofﬁcer

(CSO) manages the overall Group Sustainab

ity strategy and

engagements. A dedicated Sustainable Finance solutions

team is responsible for sustainable ﬁnance products and

frameworks to help ident

ify green and susta

inable ﬁnance,

and transit

ion ﬁnance opportun

ies to a

id our clients on their

sustainab

ity journey. The CSO team works with businesses

to launch various sustainable ﬁnance products. Furthermore,

the Environmental and Social Risk Management (ESRM) team

provides dedicated advisory and challenge to businesses

on the management of environmental and social risks

and impacts aris

ing from the Group’s cl

ient relationsh

ips

and transactions.

In the second line of defence, the responsib

ity for

Reputational and Sustainab

ity Risk management is

delegated to the Group Environmental, Social, and Corporate

Governance (ESG) and Reputational Risk team, as well as

CROs at region, country and client-business levels. They

constitute the second line responsible to oversee and

challenge the ﬁrst line, which resides with the CEOs, business

heads, product heads and function heads. The Group ESG

and Reputational Risk team is responsible for establish

ing

RA, framework and polic

ies for manag

ing Reputational

and Sustainab

ity risk, in line with emerging regulatory

expectations across our markets.

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

shifts 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; and

•

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 assessment

of risks associated with how ind

idual client, transaction,

product and strategic coverage decis

ions may affect

perceptions of the organisat

ion and

its activ

ies is based

on explic

it pr

inc

iples

includ

ing, but not l

ited to, human

rights and climate change. The assessment of stakeholder

perception risk considers a variety of factors. Whenever

potential for stakeholder concerns is ident

iﬁed,

issues are

subject to review and decis

ion by both ﬁrst and second l

ines

of defence.

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. This includes management of greenwashing risks

through the ongoing monitor

ing of Susta

inable Finance

products and transactions and clients throughout their

lifecycle, from labelling to disclosures in line with emerging

local and internat

ional regulatory obl

igat

ions.

•

Clients are expected to adhere to the min

imum regulatory

and compliance requirements, includ

ing cr

iter

ia from the

Group’s Posit

ion Statements to sens

ive sectors where

environmental and social risks are heightened. The Group

also deﬁnes the approach to certain special

ist sectors

where there are conﬂict

ing stakeholder v

iews.

•

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. 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 social safeguards.

•

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. We are committed to becoming

Net Zero in our own operations by 2025.

•

We rely on our frameworks to help the labelling of

Sustainable Finance Use of Proceeds products and

transactions as well as the classif

icat

ion of pureplay clients.

Reputational and Sustainab

ity Risk polic

ies and standards

are applicable to all Group entit

ies. However, where local

regulators impose addit

ional requ

irements, these are

complied with in addit

ion to ex

ist

ing Group requ

irements.

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 as we strive 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 with the appropriate level of

management and governance oversight. This

includes a potential failure to uphold responsible

business conduct in striv

ing to do no s

ign

iﬁcant

environmental and social harm.

Reputational and Sustainab

ity Risk

333

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Governance committee oversight

At Board level, the Culture and Sustainab

ity Committee

provides oversight for our Sustainab

ity strategy while the BRC

oversees Reputational and Sustainab

ity Risk as part of the

ERMF. The GRC provides executive level committee oversight

and delegates the authority to ensure effective management

of Reputational and Sustainab

ity Risk to the 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 RA;

•

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 TERs, 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 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 GNFRC 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

remit. The 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 Global Head, ERM delegates risk acceptance authorit

ies

for stakeholder perception 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 reviews and supports the risk assessments for clients

and transactions and escalates to the Group ESG and

Reputational Risk team as required.

Monitor

ing

Exposure to stakeholder perception risks aris

ing from

transactions, clients, products and strategic coverage is

monitored through established triggers to prompt the

right levels of appropriate risk-based considerat

ion and

assessment by the ﬁrst line and escalations to the second

line where necessary. Risk acceptance decis

ions and

thematic trends are also reviewed on a period

ic bas

is.

Exposure to Sustainab

ity Risk is monitored through triggers

embedded with

in the ﬁrst l

ine of defence processes.

The Environmental and Social Risks are considered for

clients and transactions via the environmental and social

risk assessments and for vendors in our supply chain through

the Modern Slavery questionna

ires.

Furthermore, monitor

ing and report

ing on the RA metrics

ensures that there is appropriate oversight by the MT and

Board over performance and breaches of thresholds across

key metrics.

334

Standard Chartered

– Annual Report 2023

Risk review

Risk management approach

The Group deﬁnes Model Risk as potential loss that

may occur because 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 some model uncertainty.

Model Risk

Roles and responsib

ies

The Global Head, ERM is the RFO for Model Risk under

the Group’s ERMF. Responsib

ity for the oversight and

implementat

ion of the Model RTF

is delegated to the

Global Head, Model Risk Management.

The Model RTF sets out clear accountabil

ity and roles for

Model Risk management through the three lines of defence

model. First line of defence ownership of Model Risk resides

with Model Sponsors, who are business or function heads

and assign a Model Owner and provide oversight of Model

Owner activ

ies. Model Owners are accountable for the

model development process, represent model users, are

responsible for the overall model design process, coordinate

the submiss

ion of models for val

idat

ion and approval,

and ensure appropriate implementat

ion and use. Model

Developers are responsible for the development of models

and are responsible for documenting and testing the model

in accordance with Policy requirements, and for engaging

with Model Users.

Second line of defence oversight is provided by Model Risk

Management, which comprises Group Model Validat

ion

(GMV) to independently review and grade models, and the

Model Risk Policy and Governance team, which provides

oversight of model risk activ

ies and reports to senior

management via respective committees.

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 Framework. Model Owners are

accountable for ensuring that all models under their purview

have been independently validated by GMV. Models are

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.

The Model Risk Framework is cascaded to in-scope

countries by way of local addendum or local framework

documentation, along with specif

ic respons

ies of the

Country Model RFO. In-scope countries are selected with

reference to regulatory capital requirements with credit risk

(AIRB), counterparty credit risk Internal Model Method (IMM),

or market risk Internal Model Approach (IMA) permiss

ions

for use of models for regulatory capital calculations; and

countries where regulators have stipulated specif

ic model

risk requirements. Addit

ional cr

iter

ia,

includ

ing ﬁnancial

material

ity, regulatory

importance, presence of important

business services or crit

ical econom

ic functions are

also considered.

The main responsib

ies of Country Model RFO are to

ensure model usage is correctly ident

iﬁed, a su

itable local

governance process is established, and fundamental model

risk train

ing

is provided for respective country stakeholders.

Based on respective levels of regulatory expectations

regarding Model Risk, a tier

ing approach

is adopted to

provide appropriate risk-based levels of depth and rigour

of the associated requirements.

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 model mon

itor

ing, model overlays and/or

a model redevelopment plan, which undergoes 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

RTF, with remediat

ion plans

implemented where necessary.

Governance committee oversight

At Board level, the BRC exercises oversight of Model Risk with

the Group. At the executive level, the GRC 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 RTF is the formal mechanism through which the

delegation of Model Risk authorit

ies

is made.

The Global Head, ERM delegates authorit

ies to des

ignated

ind

iduals or Policy Owners through the Model RTF. The

second line of defence ownership for Model Risk at country

level is delegated to Country CROs 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.

335

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Monitor

ing

The Group monitors Model Risk via a set of RA metrics.

Adherence to Model RA and any threshold breaches are

reported to the BRC, GRC and Model Risk Committee.

These metrics and thresholds are reviewed twice per year

to ensure that threshold calibrat

ion rema

ins appropriate,

and the themes adequately cover the current risks.

Models undergo regular 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.

336

Standard Chartered

– Annual Report 2023

Risk review

Risk management approach

With effect from January 2024, the Group has

removed the IRT classif

icat

ion. 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. We are developing methodologies to

ident

ify, measure and manage the phys

ical and

transit

ion r

isks that we are exposed to through our

own operations, our suppliers, our clients, and the

markets we operate in.

Risk Appetite Statement

The Group aims to measure and manage ﬁnanc

ial

and non-ﬁnancial r

isks aris

ing from cl

imate

change, and reduce emiss

ions related to our own

activ

ies and those related to the ﬁnanc

ing of

clients in alignment with the Paris Agreement.

Climate Risk (Oversight has moved to Reputational and Sustainab

ity Risk

with effect from January 2024)

Roles and responsib

ies

The GCRO has the ultimate second line of defence and

responsib

ity for Climate Risk, with support by the Global

Head, ERM who has day-today oversight and central

responsib

ity for second line of defence Climate Risk activ

ies.

As Climate Risk is embedded into the relevant PRTs, second

line of defence responsib

ies l

ie with those RFOs (at Group,

regional and country level), with SME support from the central

Climate Risk team.

Mit

igat

ion

We have completed c.4,100 Climate Risk Assessments

(CRAs) in 2023 (c.85 - 90 per cent of the CCIB corporate

portfolio lim

its), wh

ich measures transit

ion r

isk of our clients.

Concentration of Black and Red rated clients remain

with

in proposed RA levels at 6 per cent. L

inkages to Credit

Underwrit

ing Pr

inc

iples have been ﬁnalised for four sectors

(Oil and Gas (O&G), Shipp

ing, Commerc

ial Real Estate (CRE)

and Min

ing),

includ

ing

improved climate-related analysis,

portfolio-level caps and addit

ional data gather

ing measures.

A key focus area going forward is to embed Climate Risk and

net zero targets into business and credit decis

ions. To enable

this, we have established a Net Zero Climate Risk Working

Forum to facil

itate d

iscuss

ions on account plans for h

igh

Climate Risk and net zero divergent clients. As of September

2023, we have assessed physical risk for 79 per cent and

transit

ion r

isk for 54 per cent of our CPBB book.

The focus for Operational and Technology Risk has been to

assess physical risks for our properties and data centres, as

well as third parties. Concentration of top corporate liqu

ity

providers to high transit

ion r

isk and low levels of mit

igat

ion is

being monitored.

Governance committee oversight

Board level oversight is exercised through the BRC, with

regular updates on Climate Risk. At an executive level,

the GRC has appointed the Climate Risk Management

Committee (CRMC), which meets at least six times a year

to oversee the implementat

ion of Cl

imate Risk workplans

and monitor

ing the Group’s Cl

imate Risk proﬁle.

In 2023, we have strengthened country and regional

governance oversight for the Climate Risk proﬁle across

our key markets by cascading ident

iﬁed RA metr

ics,

and rolling out climate risk management informat

ion.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Global Head, ERM is supported by a Climate Risk team

with

in the ERM funct

ion. The Global Head, ESG and

Reputational Risk is responsible for executing the delivery

of the Climate Risk workplan which will deﬁne decis

ion-

making authorit

ies and delegat

ions across the Group.

Monitor

ing

The Climate RA Statement is approved and reviewed annually

by the Board, following the recommendation of the BRC.

The Group has developed its ﬁrst-generation Climate Risk

reporting and Board/MT Level RA metrics and these will

continue to be enhanced in 2024. Management informat

ion

and RA metrics are also being progressively rolled out at the

regional and country level. Management informat

ion

reviewed at a quarterly frequency and any breaches in RA

are reported to the GRC and BRC.

337

Standard Chartered

– Annual Report 2023

Risk review and Capital review

With effect from January 2024, the Group has removed

the IRT classif

icat

ion. The Group recognises Dig

ital

Assets (DA) as an asset class which is managed under

the ERMF. DA Risk is deﬁned as the potential for

regulatory penalties, ﬁnanc

ial loss and/or reputat

ional

damage to the Group resulting from DA-related

activ

ies aris

ing from the Group’s bus

inesses across

clients, products, investments and projects.

Risk Appetite Statement

As DA Risk manifests through the various PRTs,

the ind

idual RA statements for each PRT take

account of the risks specif

ic to DAs.

Dig

ital Assets R

isk

Roles and responsib

ies

Senior managers with

in the ﬁrst l

ine of defence are

responsible for the overall management of DA risks, in

iat

ives

and exposures that may arise with

in the

ir business segments.

The GCRO has the second line of defence responsib

ity for

deﬁning the Group’s framework for manag

ing DA-related

risks, through the Dig

ital Assets R

isk Management Approach

(DARMA). The GCRO is supported by the Global Head, ERM

and the Global Head, DA Risk Management, who have

day-to-day responsib

ity for second line of defence oversight

of the DARMA. As DA Risk management is embedded into

the relevant PRTs, RFOs and dedicated SMEs across the PRTs

have second line of defence responsib

ies of DA R

isks for

their respective PRTs.

Mit

igat

ion

The Group deploys a DA Risk management policy (DA Policy)

to deﬁne the incremental risk management requirements for

DA-related activ

ies under the DARMA. The respective PRTs

then include specif

ic r

isk mit

igat

ion requirements with

in the

relevant processes, polic

ies and standards for the

ir PRTs. DA

Risk Assessments are conducted on certain higher-risk

DA-related projects and products. These 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 businesses, RFOs and DA SMEs.

Governance committee oversight

Board level oversight is exercised through the BRC, and DA

Risk updates are provided to the Board and BRC, as requested.

At the executive level, the GRC oversees the risk management

of DA. The GCRO has also appointed a dedicated DA

Risk Committee (DRC) consist

ing of sen

ior business

representatives, RFOs and DA SMEs across the Group.

The DRC meets a min

imum of four t

imes per year to review

and assess the risk assessments related to DA Projects and

Products, discuss development and implementat

ion of the

DARMA, and to provide structured governance around

DA Risk.

Decis

ion-mak

ing authorit

ies and delegat

ion

The Global Head, ERM is supported by a centralised DA

Risk team with

in the ERM Funct

ion and is responsible for

the design and maintenance of the DARMA. Decis

ion-

making authorit

ies and delegat

ion are deﬁned in the

DA Policy, outlin

ing the

incremental responsib

ies and

the embedding of risk management with

in assoc

iated

polic

ies and r

isk artefacts.

The businesses are responsible for implementat

ion of the

DARMA and respective business governance forums,

PRT RFOs and DA SMEs util

ise dec

ion-mak

ing authorit

ies

granted to them by their respective businesses, PRTs or in

ind

idual capacit

ies to assess and approve DA act

ies

and exposures that may give rise to risk.

DA Risk follows prescribed robust risk management practices

across the PRTs, with specif

ic expert

ise applied from DA

experts. Risk management practices are informed by the

“Dear CEO” letters published by the PRA and the FCA in

June 2018, with updated notices in June 2022. Further

guidance from the recent publicat

ion of the BCBS d545 on

the prudential treatment of crypto assets, which will be in

effect from January 2025, has reﬁned the risk management

approach. DA is a developing area which will continue to

mature and stabil

ise over t

ime as the technology, together

with its use in ﬁnanc

ial serv

ices and associated research,

become more established.

Monitor

ing

DA Risks are monitored through the exist

ing Group RA metr

ics

across the PRTs. In addit

ion, spec

ic DA R

isk Management

Monitor

ing level metr

ics are reviewed and monitored by the

relevant ind

idual PRTs. DA risk decis

ions relat

ing to other

PRTs are taken with

in the author

ies for the respect

ive PRT.

338

Standard Chartered

– Annual Report 2023

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

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.

2023

2022

CET1 capital

14.1%

14.0%

Tier 1 capital

16.3%

16.6%

Total capital

21.2%

21.7%

Leverage ratio

4.7%

4.8%

MREL ratio

33.3%

32.1%

Risk-weighted assets (RWA) $mill

ion

244,151

244,711

The Group‘s capital, leverage and MREL posit

ions were all

above current requirements and Board-approved risk

appetite. For further detail see the Capital section in the

Standard Chartered PLC Pillar 3 Disclosures for FY 2023.

The Group’s CET1 capital increased 10 basis points to

14.1 percent of RWA since FY2022. Proﬁts, gains from the

aviat

ion leas

ing sale, movements in FVOCI and RWA

optim

isat

ions were partly offset by distr

ibut

ions (includ

ing

ordinary share buybacks of $2.0 bill

ion dur

ing the year),

impa

irments of the Group’s

investment in Bohai, lower FX

translation reserves and an increase in regulatory deductions.

The PRA updated the Group’s Pillar 2A requirement during

Q4 2023. As at 31 December 2023 the Group’s Pillar 2A was

3.8 percent of RWA, of which at least 2.1 per cent must be

held in CET1 capital. The Group’s min

imum CET1 cap

ital

requirement was 10.5 per cent at 31 December 2023. The UK

countercyclical buffer increased to 2.0 per cent which impacts

Group CET1 min

imum requ

irement by approximately 8 basis

points from July 2023.

The Group CET1 capital ratio at 31 December 2023 reﬂects

the share buy-backs of $2 bill

ion completed dur

ing the year.

The CET1 capital ratio also includes an accrual for the FY 2023

div

idend. The Board has recommended a ﬁnal d

idend for

FY 2023 of $560 mill

ion or 21 cents per share result

ing in a

full year 2023 div

idend of 27 cents per share, a 50 percent

increase on the 2022 div

idend. In add

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 2024.

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 requirement as at 31 December 2023

was 27.4 per cent of RWA. This is composed of a min

imum

requirement of 23.5 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 33.3 per cent of RWA and 9.6 per cent of

leverage exposure at 31 December 2023.

During 2023, the Group successfully raised $8.1 bill

ion of

MREL elig

ible secur

ies from

its holding company, Standard

Chartered PLC. Issuance was entirely in callable senior 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.

339

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Capital base

(audited)

2023

$mill

ion

2022

$mill

ion

CET1 capital instruments and reserves

Capital instruments and the related share premium accounts

5,321

5,436

Of which: share premium accounts

3,989

Retained earnings

24,930

25,154

Accumulated other comprehensive income (and other reserves)

9,171

8,165

Non-controlling interests (amount allowed in consolidated CET1)

217

189

Independently audited year-end proﬁts

3,542

2,988

Foreseeable div

idends

(768)

(648)

CET1 capital before regulatory adjustments

42,413

41,284

CET1 regulatory adjustments

Addit

ional value adjustments (prudent

ial valuation adjustments)

(730)

(854)

Intangible assets (net of related tax liab

ity)

(6,128)

(5,802)

Deferred tax assets that rely on future proﬁtabil

ity (excludes those aris

ing from temporary d

ifferences)

(41)

(76)

Fair value reserves related to net losses on cash ﬂow hedges

(91)

564

Deduction of amounts resulting from the calculation of excess expected loss

(754)

(684)

Net gains on liab

ies at fa

ir value resulting from changes in own credit risk

(100)

Deﬁned-beneﬁt pension fund assets

(95)

(116)

Fair value gains aris

ing from the

inst

itut

ion’s own credit risk related to derivat

ive l

iab

ies

(116)

(90)

Exposure amounts which could qualify for risk weight

ing of 1,250%

(44)

(103)

Other regulatory adjustments to CET1 capital

–

(29)

Total regulatory adjustments to CET1

(8,099)

(7,127)

CET1 capital

34,314

34,157

Addit

ional T

ier 1 capital (AT1) instruments

5,512

6,504

AT1 regulatory adjustments

(20)

Tier 1 capital

39,806

40,641

Tier 2 capital instruments

11,965

12,540

Tier 2 regulatory adjustments

(30)

Tier 2 capital

11,935

12,510

Total capital

51,741

53,151

Total risk-weighted assets (unaudited)

244,151

244,711

Capital base is prepared on the regulatory scope of consolidat

ion

Retained earnings includes IFRS9 capital relief (transit

ional) of n

il (2022: $106 mill

ion)

Other regulatory adjustments to CET1 capital includes Insufﬁc

ient coverage for non-perform

ing exposures of nil (2022: $(29) mill

ion)

340

Standard Chartered

– Annual Report 2023

Capital review

Movement in total capital (audited)

2023

$mill

ion

2022

$mill

ion

CET1 at 1 January

34,157

38,362

Ordinary shares issued in the period and share premium

–

Share buy-back

(2,000)

(1,258)

Proﬁt for the period

3,542

2,988

Foreseeable div

idends deducted from CET1

(768)

(648)

Difference between div

idends pa

id and foreseeable div

idends

(372)

(301)

Movement in goodwill and other intang

ible assets

(326)

(1,410)

Foreign currency translation differences

(477)

(1,892)

Non-controlling interests

(12)

Movement in elig

ible other comprehens

ive income

464

(1,224)

Deferred tax assets that rely on future proﬁtabil

ity

Increase in excess expected loss

(70)

(104)

Addit

ional value adjustments (prudent

ial valuation adjustment)

124

(189)

IFRS 9 transit

ional

impact on regulatory reserves includ

ing day one

(106)

(146)

Exposure amounts which could qualify for risk weight

ing of 1,250%

(67)

Fair value gains aris

ing from the

inst

itut

ion’s own credit risk related to derivat

ive l

iab

ies

(26)

(30)

Others

CET1 at 31 December

34,314

34,157

AT1 at 1 January

6,484

6,791

Net issuances (redemptions)

(1,000)

241

Foreign currency translation difference and others

Excess on AT1 grandfathered lim

it (

inel

ible)

–

(557)

AT1 at 31 December

5,492

6,484

Tier 2 capital at 1 January

12,510

12,491

Regulatory amortisat

ion

1,416

778

Net issuances (redemptions)

(2,160)

(1,098)

Foreign currency translation difference

146

(337)

Tier 2 inel

ible minor

ity

interest

102

Recognit

ion of

inel

ible AT1

–

557

Others

Tier 2 capital at 31 December

11,935

12,510

Total capital at 31 December

51,741

53,151

The main movements in capital in the period were:

•

CET1 capital increased by $0.2 bill

ion as reta

ined proﬁts of $3.5 bill

ion, movement

in FVOCI of $0.6bn were partly offset

by share buy-backs of $2.0 bill

ion, d

istr

ibut

ions paid and foreseeable of $1.1 bill

ion, fore

ign currency translation impact of

$0.5 bill

ion and an

increase in regulatory deductions and other movements of $0.3bn.

•

AT1 capital decreased by $1.0 bill

ion follow

ing the redemption of $1.0 bill

ion of 7.75 per cent secur

ies.

•

Tier 2 capital decreased by $0.6 bill

ion due to the redempt

ion of $2.2 bill

ion of T

ier 2 during the year partly offset by the

reversal of regulatory amortisat

ion and fore

ign currency translation impact.

341

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Risk-weighted assets by business

2023

Credit risk

$mill

ion

Operational risk

$mill

ion

Market risk

$mill

ion

Total risk

$mill

ion

Corporate, Commercial & Institut

ional Bank

ing

102,675

18,083

21,221

141,979

Consumer, Private & Business Banking

42,559

8,783

–

51,342

Ventures

1,885

1,923

Central & Other items

44,304

960

3,643

48,907

Total risk-weighted assets

191,423

27,861

24,867

244,151

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

42,091

8,639

–

50,730

Ventures

1,350

1,358

Central & Other items

43,311

1,493

4,237

49,041

Total risk-weighted assets

196,855

27,177

20,679

244,711

Risk-weighted assets by geographic region

2023

$mill

ion

2022

$mill

ion

Asia

155,995

150,816

Africa & Middle East

38,393

40,716

Europe & Americas

46,106

50,174

Central & Other items

3,657

3,005

Total risk-weighted assets

244,151

244,711

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 2021

125,813

42,731

756

50,288

219,588

27,116

24,529

271,233

At 1 January 2022

125,813

42,731

756

50,288

219,588

27,116

24,529

271,233

Assets growth & mix

(13,213)

(985)

594

(10,033)

(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

42,091

1,350

43,311

196,855

27,177

20,679

244,711

Assets growth & mix

(4,424)

728

535

1,183

(1,978)

–

(1,978)

Asset quality

(391)

390

–

2,684

2,683

–

2,683

Risk-weighted assets efﬁc

ienc

ies

–

(688)

–

(688)

Model Updates

(597)

(151)

–

(151)

(899)

–

500

(399)

Methodology and policy changes

–

(196)

–

(196)

–

(800)

(996)

Acquis

ions and disposals

(1,630)

–

(1,630)

–

(1,630)

Foreign currency translation

(386)

(303)

–

(2,035)

(2,724)

–

(2,724)

Other, Including non-credit

risk movements

–

684

4,488

5,172

At 31 December 2023

102,675

42,559

1,885

44,304

191,423

27,861

24,867

244,151

342

Standard Chartered

– Annual Report 2023

Capital review

Movements in risk-weighted assets

RWA decreased by $0.6 bill

ion, or 0.2 per cent from

31 December 2022 to $244.2 bill

ion. Th

is was due to a decrease

in Credit Risk RWA of $5.4 bill

ion, an

increase in Market Risk

RWA of $4.2 bill

ion and an

increase in Operational Risk RWA

of $0.7 bill

ion.

Corporate, Commercial & Institut

ional Bank

ing

Credit Risk RWA decreased by $7.4 bill

ion, or 6.7 per cent from

31 December 2022 to $102.7 bill

ion ma

inly due to:

•

$4.4 bill

ion decrease from changes

in asset growth & mix

of which:

– $10.3 bill

ion decrease from opt

isat

ion actions includ

ing

reduction in lower returning portfolios

– $5.9 bill

ion

increase from asset balance growth across the

rest of the portfolio

•

$1.6 bill

ion decrease from sale of Av

iat

ion bus

iness

•

$0.9 bill

ion decrease from

industry-wide regulatory changes

to align IRB model performance

•

$0.4 bill

ion decrease from fore

ign currency translation

•

$0.4 bill

ion decrease from asset qual

ity movements,

reﬂecting client upgrades in Asia, Europe & Americas,

partially offset by sovereign downgrades in Africa &

Middle East

•

$0.3 bill

ion

increase from model changes in Financ

ial

Markets and Lending

Consumer, Private & Business Banking

Credit Risk RWA increased by $0.5 bill

ion, or 1.1 per cent from

31 December 2022 to $42.6 bill

ion ma

inly due to:

•

$0.7 bill

ion

increase from changes in asset growth and mix,

mainly from Asia

•

$0.4 bill

ion

increase due to deteriorat

ion

in asset quality

mainly in Asia

•

$0.3 bill

ion decrease from fore

ign currency translation

•

$0.2 bill

ion decrease from methodology change relat

ing to

an unsecured lending portfolio in Africa & Middle East

•

$0.1 bill

ion decrease from

industry-wide regulatory changes

to align IRB model performance

Ventures

Ventures is comprised of Mox Bank Lim

ited, Trust Bank and

SC Ventures. Credit Risk RWA increased by $0.5 bill

ion, or

39.7 per cent from 31 December 2022 to $1.9 bill

ion from asset

balance growth, mainly from SC Ventures.

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 increased by $1 bill

ion, or 2.3 per cent from

31 December 2022 to $44.3 bill

ion ma

inly due to:

•

$2.7 bill

ion

increase due to deteriorat

ion

in asset quality

mainly from sovereign downgrades in Africa & Middle East

•

$1.2 bill

ion

increase from changes in asset growth & mix

•

$2.0 bill

ion decrease from fore

ign currency translation

•

$0.7 bill

ion decrease from RWA efﬁcienc

ies

•

$0.2 bill

ion decrease from model changes

in Treasury

Markets

Market Risk

Total Market Risk RWA increased by $4.2 bill

ion, or

20.3 per cent from 31 December 2022 to $24.9 bill

ion due to:

•

$2.4 bill

ion

increase in Standardised Approach (SA) RWA

driven by higher Specif

ic Interest Rate R

isk relating to the

traded credit portfolio, offset by lower net Structural

FX posit

ions

•

$2.1 bill

ion

increase in Internal Models Approach (IMA) RWA

due to increased posit

ions and

increased market volatil

ity

•

$0.5 bill

ion

increase in IMA RWA due to introduct

ion of a

new VaR model to address the rise in VaR backtesting

exceptions in 2022

•

$0.8 bill

ion decrease

in IMA RWA due to reduction in the

IMA multipl

ier w

ith fewer VaR backtesting exceptions in

2023 than in 2022

Operational Risk

Operational Risk RWA increased by $0.7 bill

ion, or 2.5 per cent

from 31 December 2022 to $27.9 bill

ion, ma

inly due to a

marginal increase in average income as measured over a

rolling three-year time horizon for certain products.

343

Standard Chartered

– Annual Report 2023

Risk review and Capital review

Leverage ratio

The Group’s UK leverage ratio, which excludes qualify

ing cla

ims on central banks was 4.7 per cent, which is above the current

min

imum requ

irement of 3.7 per cent. The leverage ratio was 6 basis points lower than FY22. Tier 1 Capital decreased by

$0.8 bill

ion as CET1 cap

ital increased by $0.2 bill

ion and was more than offset by the redempt

ion of $1 bill

ion 7.75 per cent

AT1 securit

ies. Leverage exposure decreased by $7.2 b

ill

ion beneﬁting from an

increase in deduction for central bank claims of

$19.6 bill

ion, a decrease

in securit

ies ﬁnancing transact

ions and add-on of $1.3 bill

ion, partly offset by

increase in Other Assets

of $7.2 bill

ion, Off-balance sheet

items of $4.5 bill

ion and Der

ivat

ives of $2 b

ill

ion.

Leverage ratio

2023

$mill

ion

2022

$mill

ion

Tier 1 capital

39,806

40,641

Derivat

ive ﬁnancial

instruments

50,434

63,717

Derivat

ive cash collateral

10,337

12,515

Securit

ies ﬁnancing transact

ions (SFTs)

97,581

89,967

Loans and advances and other assets

664,492

653,723

Total on-balance sheet assets

822,844

819,922

Regulatory consolidat

ion adjustments

(92,709)

(71,728)

Derivat

ives adjustments

Derivat

ives nett

ing

(39,031)

(47,118)

Adjustments to cash collateral

(9,833)

(10,640)

Net written credit protection

1,359

548

Potential future exposure on derivat

ives

42,184

35,824

Total derivat

ives adjustments

(5,321)

(21,386)

Counterparty risk leverage exposure measure for SFTs

6,639

15,553

Off-balance sheet items

123,572

119,049

Regulatory deductions from Tier 1 capital

(7,883)

(7,099)

Total exposure measure excluding claims on central banks

847,142

854,311

Leverage ratio excluding claims on central banks (%)

4.7%

4.8%

Average leverage exposure measure excluding claims on central banks

853,968

864,605

Average leverage ratio excluding claims on central banks (%)

4.6%

4.7%

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

344

Standard Chartered

– Annual Report 2023

Financ

ial statements

346

Independent Auditor’s report

359

Consolidated income statement

360

Consolidated statement of

comprehensive income

361

Consolidated balance sheet

362

Consolidated statement of changes

in equity

363

Cash ﬂow statement

364

Company balance sheet

365

Company statement of changes

in equity

366

Notes to the ﬁnancial statements

Financ

ial statements



Bolstering

the client

experience for

afﬂuent clients

in Asia



To enrich client experiences with

holist

ic wealth adv

ice for afﬂuent

clients, we opened two new Private

Banking Centres in India as well as two

Prior

ity Pr

ivate Centres for high-net-

worth (HNW) clients in Shanghai and

Hong Kong. The hubs offer bespoke

services to HNW and Ultra HNW

clients and form part of our continu

ing

growth in the afﬂuent sector. We also

introduced an enhanced Prior

ity

Private value proposit

ion for HNW

clients during the launch of the

Shanghai centre. In addit

ion to the

new openings, we also renovated and

rebranded 17 branches across Asia,

the Middle East and Africa, creating

addit

ional Pr

ior

ity Centres.

Read more on our new centres in India at

sc.com/privatebank

ingcentres

345

Standard Chartered

– Annual Report 2023

Financ

ial statements

346

Standard Chartered

– Annual Report 2023

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 2023 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 2023

which comprise:

Group

Company

Consolidated income

statement for the year ended

31 December 2023;

Balance sheet as at 31 December

2023;

Consolidated statement of

comprehensive income for the

year then ended;

Cash ﬂow statement for the year

then ended;

Consolidated balance sheet

as at 31 December 2023;

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 mater

ial

accounting policy informat

ion.

Consolidated cash ﬂow

statement for the year

then ended;

Related notes 1 to 40 to

the ﬁnancial statements,

includ

ing mater

ial accounting

policy informat

ion;

Information marked as

‘audited’ with

in the D

irectors’

remuneration report from

page 182 to 216; and

Risk Review and Capital Review

disclosures marked as ‘audited’

from page 232 to 343.

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

appropriate to provide a basis for our opin

ion.

Independence

We are independent of the Group and the Company in

accordance with the ethical requirements that are relevant

to our audit of the ﬁnanc

ial statements

in the UK, includ

ing

the FRC’s Ethical Standard as applied to listed public interest

entit

ies, and we have fulﬁlled our other eth

ical responsib

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 directors’ going concern assessment includ

ing

the Group’s forecast capital, liqu

ity, and leverage ratios

over the period of twelve months from 23 February 2024 to

evaluate the headroom against the min

imum regulatory

requirements and the risk appetite set by the directors.

•

Engaging internal valuation and economic special

ists to

assess and challenge the reasonableness of assumptions

used to develop the forecasts in the Corporate Plan and

evaluating the accuracy of histor

ical forecast

ing.

•

Assessing the Group’s funding plan and repayment plan for

funding instruments maturing over the period of twelve

months from 23 February 2024.

•

Understanding and evaluating credit rating agency ratings

and actions.

•

Engaging internal prudential regulatory special

ists to

assess the results of management’s stress testing, includ

ing

considerat

ion of pr

inc

ipal and emerg

ing risks, on funding,

liqu

ity, and regulatory capital.

•

Review

ing correspondence w

ith prudential regulators and

authorit

ies for matters that may

impact the going concern

assessment; and

•

Evaluating the going concern disclosure included in note 1

to the ﬁnancial statements

in order to assess that the

disclosures were appropriate and in conformity with the

reporting standards.

Independent Auditor’s Report

to the members of Standard Chartered PLC

347

Standard Chartered

– Annual Report 2023

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 Company’s abil

ity to cont

inue as a going

concern for a period of twelve months from 23 February 2024.

In relation to the Group and Parent Company’s reporting on

how they have applied the UK Corporate Governance Code,

we have nothing material to add or draw attention to in

relation to the directors’ statement in the ﬁnanc

ial statements

about whether the directors considered it appropriate to

adopt the going concern basis of accounting.

Our responsib

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 and Company’s abil

ity

to continue as a going concern.

Overview of our audit approach

Audit scope

•

We performed an audit of the complete ﬁnanc

ial

informat

ion of 10 components

in 8 countries

and audit procedures on specif

ic balances for

a further 17 components in 14 countries.

•

In addit

ion to the above, the Pr

imary Audit

Team also performed full-scope audit

procedures on components related to the

Group consolidat

ion process.

•

The components where we performed full or

specif

ic aud

it procedures accounted for 78%

of the absolute proﬁt before tax (PBT), 87%

of absolute operating income and 94% of

Total assets.

Key audit

matters

• Credit impa

irment

•

Basis of accounting and impa

irment assessment

of China Bohai Bank (interest in associate)

•

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 $274m 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

consolidated ﬁnanc

ial statements. We took

into account

the size, risk proﬁle, the organisat

ion of the Group and

effectiveness 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 Group

ﬁnancial statements, and to ensure we had adequate

quantitat

ive coverage of s

ign

iﬁcant accounts

in the ﬁnanc

ial

statements, of the 346 reporting units of the Group, we

selected 66 reporting units which represent 27 components

in 21 countries: Bahrain, Bangladesh, Hong Kong, India,

Indonesia, Japan, Jersey, Kenya, Mainland China, Malaysia,

Niger

ia, Pak

istan, Republic of Ireland, Republic of Korea,

Singapore, Sri Lanka, Taiwan, United Arab Emirates, United

Kingdom, United States of America, and Zambia.

The deﬁnit

ion of a component is aligned with the structure

of the Group’s consolidat

ion system, typ

ically these are

either a branch, group of branches, group of subsid

iar

ies

(or associates), or a subsid

iary.

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 (SSC), Commercial,

Corporate and Institut

ional Bank

ing SSC, Credit Impairment

SSC and Technology, as well as certain other matters audited

centrally by the Primary Audit Team.

Of the 27 components selected in 21 countries, we

performed an audit of the complete ﬁnanc

ial

informat

ion

of 10 components (“full scope components”) which were

selected based on their size or risk characterist

ics. For

14 components (“specif

ic scope components”) we performed

audit procedures on specif

ic accounts w

ith

in that component

that we considered had the potential for the greatest impact

on the sign

iﬁcant accounts

in the Group ﬁnanc

ial statements

either because of the size of these accounts or their risk

proﬁle. We also instructed 3 locations to perform specif

ied

procedures over certain aspects of credit impa

irment r

isk.

Group`s Absoulute PBT

Group’s Total assets

Group’s Absolute Operating Income

2023

2022

2023

2022

2023

2022

Full scope components

62%

72%

87%

72%

79%

Specif

ic scope components

15%

10%

14%

10%

Specif

ied procedures

0.10%

Total

78%

82%

94%

95%

87%

89%

Of the remain

ing report

ing units that together represent 22%

of the Group’s absolute PBT, none are ind

idually greater

than 2.3% of the Group’s absolute 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 l

ine item

level, evaluating entity level controls, performing audit

procedures on the centralised shared service centres, testing

of consolidat

ion journals and

intercompany elim

inat

ions,

inqu

ing with selected 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.

348

Standard Chartered

– Annual Report 2023

Financ

ial statements

Independent auditor’s report

The charts below illustrate the coverage obtained from the

work performed by our audit teams.

Absolute proﬁt before tax

62% Full scope components (2022: 72%)

15% Specif

ic scope components (2022: 10%)

1% Specif

ied procedures (2022: 0%)

22% Other procedures (2022: 18%)

72% Full scope components (2022: 79%)

14% Specif

ic scope components (2022: 10%)

1% Specif

ied procedures (2022: 0%)

13% Other procedures (2022: 11%)

87% Full scope components (2022: 87%)

7% Specif

ic scope components (2022: 8%)

0.1% Specif

ied procedures (2022: 0%)

6% Other procedures (2022: 5%)

Absolute operating income

Total assets

Changes from the prior year

We assessed our 2023 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.

Three components in Cameroon, Republic of Ireland, and

South Africa, which were included in prior year audit scope

and assigned specif

ic scope, were excluded from the Group

audit scope in the current year based on our updated risk

assessment. These components represent ind

idually no

more than 0.1% of Group absolute PBT, 0.4% of the Group’s

absolute operating income and 0.3% of the Group’s Total

assets respectively in the current year. No component which

was full scope in the prior year, has been excluded from Group

audit scope for the 2023 audit.

For Germany, Australia, Ghana and Cameroon, the Primary

Audit Team performed certain procedures centrally over the

cash balances as at 31 December 2023. Taiwan, Malaysia,

Indonesia, Pakistan and Kenya 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 2023, we assigned a specif

ic scope to Bahra

in and United

Kingdom (Jersey) components that are sign

iﬁcant based on

risk, and specif

ied procedures to Ta

iwan (Taipe

i Branch).

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 primary audit

engagement team (the “Primary Audit Team”), or by

component auditors from other ﬁrms operating under our

instruct

ion. All of the d

irect components of the Group (full,

specif

ic or spec

ied procedures) were aud

ited by EY global

network ﬁrms. There were two non-EY component teams

audit

ing a s

ingle component in a single location, which were

instructed by a direct component of the Group.

Of the 10 full scope components, audit procedures were

performed on 3 of these (includ

ing the aud

it of the Company)

directly by the Primary Audit Team (EY London) in the

United Kingdom. For 1 specif

ic scope component, the aud

procedures were performed by the Primary Audit Team.

Where components were audited by the Primary Audit Team,

this was under the direct

ion and superv

ion of the Sen

ior

Statutory Auditor. For the 23 remain

ing components, where

the work was performed by component auditors, we

determined the appropriate level of involvement to enable

us to determine that sufﬁc

ient aud

it evidence had been

obtained as a basis for our opin

ion on the Group as a whole.

In addit

ion to the above, the Pr

imary Audit Team also

performed full-scope audit procedures on components

related to the Group consolidat

ion process.

In addit

ion, the Group has central

ised processes and controls

over key areas in its shared service centres. Members of the

Primary Audit Team undertook direct oversight, review and

coordinat

ion of our shared serv

ice centre audits.

The Primary Audit Team continued to follow a programme

of planned vis

its to component teams and shared serv

ice

centres. During the current year’s audit cycle, vis

its were

undertaken by the Primary Audit Team to the component

teams in the following locations:

• Bangladesh

• Hong Kong

•

India (includ

ing the shared serv

ices centre)

• Indonesia

• Mainland China

•

Malaysia (includ

ing the shared serv

ices centre)

• Pakistan

• Republic of Korea

•

Singapore (includ

ing the shared serv

ices centre)

• United Arab Emirates

•

United States of America

These vis

its typ

ically 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.

349

Standard Chartered

– Annual Report 2023

Financ

ial statements

In addit

ion to the s

ite vis

its, the Pr

imary Audit Team interacted

regularly with the component and SSC audit teams where

appropriate during various stages of the audit, reviewed

relevant working papers and deliverables to the Primary

Audit Team, and were responsible for the scope and direct

ion

of the audit process.

The Primary Audit Team also undertook video conference

meetings with component and SSC audit teams and

management. These virtual meetings involved discuss

ing

the audit approach and any issues aris

ing from the

ir work,

as well as performing remote reviews of key audit workpapers.

This, together with the procedures performed at Group level,

gave us appropriate evidence for our opin

ion on the Group

and Company ﬁnancial statements.

Climate change

Stakeholders are increas

ingly

interested in how climate

change will impact the economy, includ

ing the bank

ing sector,

and further how this may consequently impact the valuation

of assets and liab

ies held on bank balance sheets. The

Group manages climate risk according to the characterist

ics

of the impacted risk types and is embedding climate-risk

considerat

ions

into relevant frameworks, includ

ing pr

inc

ipal

risk type frameworks, and processes. The assessment of the

risk by the Group is explained on pages 336 and 298-313 in the

“Risk review: Climate Risk” section, and on pages 90-133 in the

“Sustainab

ity review” section of the Annual Report, where the

Group has also explained their climate commitments.

All of these disclosures form part of the “Other informat

ion,”

rather than the audited ﬁnanc

ial statements. Our procedures

on these unaudited disclosures therefore consisted solely of

consider

ing whether they are mater

ially incons

istent w

ith the

ﬁnancial statements or our knowledge obta

ined in the course

of the audit or otherwise appear to be materially misstated,

in line with our responsib

ies on “Other

informat

ion”.

In planning and performing our audit we assessed the

potential impacts of climate change on the Group’s

business and any consequential material impact on its

ﬁnancial statements.

The Group has explained in the “Sustainab

ity review” section

of the Annual Report how they have reﬂected the impact of

climate change in their ﬁnanc

ial statements,

includ

ing how

this aligns with their commitment to the aspirat

ions of the

Paris Agreement to achieve net zero emiss

ions by 2050.

Sign

iﬁcant judgements and est

imates relating to climate

change are included in the section “Climate impact on the

Group’s balance sheet” of note 1 to the ﬁnancial statements.

As stated in these disclosures, the Group has considered

Climate to be an area of sign

iﬁcant account

ing estimate

and judgement through the uncertainty of future events

and the impact of that uncertainty on the Group’s assets

and liab

ies. The Group has concluded that wh

ilst it is not

currently quantitat

ively mater

ial, it considers climate to be

qualitat

ively mater

ial.

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 currently effective 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 ﬁnanc

ial statements from cl

imate change which

needed to be considered in our audit.

We also challenged the Directors’ considerat

ions of

climate change risks in their assessment of going concern

and viab

ity, and the associated disclosures. Where

considerat

ions of cl

imate change were relevant to our

assessment of going concern, these are covered by the

procedures described above.

Based on our work, we have considered the impact of climate

change on the ﬁnancial statements to

impact certain key

audit matters. Details of our procedures and ﬁnd

ings are

included in our explanation of key audit matters below.

350

Standard Chartered

– Annual Report 2023

Financ

ial statements

Independent auditor’s report

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

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 163);

Accounting polic

ies (page 380); Note 8 of the

ﬁnancial statements; and relevant cred

it risk

disclosures (includ

ing pages 238 and 274)

At 31 December 2023, the Group reported total

credit impa

irment balance sheet prov

ion of

$5,601 mill

ion (2022: $6,075 m

ill

ion).

Management’s judgements and estimates are

highly subject

ive as a result of the s

ign

iﬁcant

uncertainty associated with the estimat

ion of

expected future credit losses that are dependent

upon several hard to estimate factors.

Assumptions with increased complexity in

respect of the tim

ing and measurement of

expected credit losses (ECL) include:

•

Staging

– the determinat

ion of what

constitutes sign

iﬁcant

increase in credit risk

and consequent timely allocation of qualify

ing

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 ident

iﬁed model

deﬁcienc

ies or risks not fully captured by the

models;

•

Economic scenarios –

Sign

iﬁcant judgements

involved in the determinat

ion of the

appropriateness of economic variables, the

future forecasting of these variables and the

parameters used in the Monte Carlo

Simulat

ion. The assessment of non-l

inear

ity

produced by the Monte Carlo simulat

ion, the

benchmarking of the output and the

evaluation of the need for any Post Model

adjustments;

•

Management overlays –

Appropriateness,

completeness and valuation of risk event

overlays to capture risks not ident

iﬁed by the

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, expected future

cashﬂows and the tim

ing of these cashﬂows.

We evaluated the design of controls relevant

to the Group’s systems and processes over

material ECL balances, includ

ing the

judgements and estimates noted, involv

ing

EY special

ists to ass

ist us in performing our

procedures where relevant. Based on our

evaluation we selected the controls upon

which we intended to rely and tested those

for operating effectiveness. We increased the

extent of our reliance on controls over model

governance and in certain locations of the

stage 3 exposures.

We performed an overall stand-back

assessment of the ECL allowance in total

and by stage to determine if the ECL was

reasonable. We considered the overall credit

quality of the Group’s portfolios, risk proﬁle,

the impact of sovereign downgrades and

challenges facing the China Commercial

Real Estate sector. We performed peer

benchmarking to the extent that this was

considered relevant and invest

igated and

sought explanations for any areas noted as

being outliers. Our assessment also included the

evaluation of the macroeconomic environment

by consider

ing trends

in the economies and

countries to which the Group is exposed.

Staging

– We evaluated the criter

ia used to

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 the completeness of the ident

iﬁcation of

sign

iﬁcant

increase in credit risk, 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

whether vulnerable and cyclical sectors (as

deﬁned on page 265 in the annual report)

resulted in a sign

iﬁcant

increase in credit risk

at a sector level.

We highl

ighted the follow

ing

matters to the Audit Committee:

•

We increased the extent of our

reliance of controls over model

governance and stage 3

exposures in certain locations;

•

Our evaluation of the

appropriateness of the

sign

iﬁcant

increase in credit

risk triggers, and the results of

our sensit

ity analysis and

recalculation of the staging.

•

Our assessment of the

assumptions used to determine

the Stage 3 ECL with a

focus on sponsor and

developers exposed to China

Commercial Real Estate and

the appropriateness of the

management overlay applied

to the sector’s modelled ECL;

•

Our assessment of the

completeness and

measurement of post model

adjustments and overlays.

•

Our assessment of the quantum

of the non-linear

ity adjustment

produced by the Monte Carlo

model includ

ing the compar

ison

to the non-linear

ity produced

by running narrative discrete

scenarios.

•

Our assessment of the

appropriateness of the Group’s

models to generate the ECL and

staging outcomes includ

ing the

appropriateness and valid

ity

of the data used in the models

and to generate the staging

and consequent ECL.

•

Our evaluation of

management’s enhanced

modelling approach to the

assessment of the potential

impact on ECL from climate

change;

We concluded that

management’s methodology,

judgements and assumptions

used in calculating credit

impa

irment are mater

ially

in accordance with the

accounting standard.

351

Standard Chartered

– Annual Report 2023

Financ

ial statements

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

1. Credit Impairment

continued

In 2023, the most material factors impact

ing the

ECL were in relation to the China Commercial

Real Estate (CRE) portfolio, sovereign

downgrades impacted by dollar availab

ity,

the continu

ing

impact of higher interest rates

and inﬂat

ion and geopol

ical uncerta

inty.

In addit

ion, where relevant we cons

idered the

impact of climate on the impa

irment prov

ions.

Overall, these factors were prevalent in the prior

year, and consequently the risk of a material

misstatement to the ECL remained consistent

with that of the prior year.

Modelled output and adjustments

– We

performed a risk assessment on models

involved in the ECL calculation using EY

independently determined quantitat

ive and

qualitat

ive cr

iter

ia to select a sample of

models to test. Based on this risk assessment,

we engaged our modelling special

ists to

evaluate a sample of ECL models by assessing

the reasonableness of underpinn

ing

assumptions, 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 or for known model deﬁcienc

ies.

This included the completeness and

appropriateness of these adjustments.

In response to new or enhanced models

implemented this year to address known

weaknesses in previous models, we

performed substantive testing procedures

as deﬁned by our model inherent risk

assessment process, includ

ing code rev

iew

and implementat

ion test

ing.

We did not rely on controls over model

monitor

ing and therefore adopted a

substantive approach compris

ing

reperformance of model monitor

ing

procedures for models 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

– In collaboration with

our economists and modelling special

ists,

we challenged the completeness and

appropriateness of the macroeconomic

variables used as inputs to the ECL models.

Addit

ionally, we

involved our economic

special

ists to ass

ist us in evaluating the

reasonableness of the base forecast for 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 reviewed

and challenged the appropriateness of the

underlying coding and assumptions used in

the Monte Carlo simulat

ion.

352

Standard Chartered

– Annual Report 2023

Financ

ial statements

Independent auditor’s report

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

1. Credit Impairment

continued

We assessed the reasonableness of the

non-linear

ity

impact on ECL allowances.

We engaged our economists and modelling

special

ists, to assess and challenge the Group’s

choice of discrete scenarios to benchmark

the output from the Monte Carlo model and

determine the sensit

ity analysis as set out on

page 280 in the annual report. This challenge

included the choice of narrative scenarios

and we independently challenged the output

from these scenarios using independently

determined EY weights for each scenario.

We also performed a stand-back assessment

by benchmarking the resulting non-linear

ity

up-lift and overall ECL charge and provis

ion

coverage to peers.

Management overlays

– We challenged the

completeness and appropriateness of overlays

used for risks not captured by the models. We

focussed our challenge on China Commercial

Real Estate, sovereign risks and the sustained

impact of higher interest rates and inﬂat

ion.

Our procedures included assessing the need

for management overlays, evaluating the

assumptions and judgments used to determine

each overlay taking current market condit

ions

into account. We computed a range of EY

independently determined outcomes for the

China Commercial Real Estate overlay.

Indiv

idually assessed ECL allowances

–

Our procedures included challenging

management’s forward-looking economic

assumptions of the recovery outcomes

ident

iﬁed, cashﬂow proﬁle and t

ing,

ind

idual probabil

ity we

ight

ings for each

scenario, and recalculating 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

ists

to validate the collateral values. We also

considered whether planned exit strategies

were viable.

353

Standard Chartered

– Annual Report 2023

Financ

ial statements

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)

Refer to the Audit Committee Report (page 30);

Accounting polic

ies (page 452); and Note 32 of

the ﬁnancial statements

Interest in Associate – China Bohai Bank

$700 mill

ion (2022: $1,421m

ill

ion).

Other impa

irment – Ch

ina Bohai Bank –

$850 mill

ion (2022: $308 m

ill

ion).

At 31 December 2023, the Group’s share of China

Bohai Bank’s market capital

isat

ion was $282m

lower than the carrying value of $700m.

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.

Impairment testing

At 31 December 2023, 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 2023. 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.

The assumptions underpinn

ing management’s

assessment of China Bohai Bank’s VIU are

subject to estimat

ion uncerta

inty and

consequently, there is a risk that if the

judgements and assumptions are

inappropr

iate, the

investment in China

Bohai Bank may be misstated.

The risk of the impa

irment has

increased in

the current year in the context of economic

headwinds in Mainland China impact

ing the

banking sector, as well as Bohai’s deteriorat

ing

ﬁnancial performance.

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 sharing

of technical advice.

Impairment testing

The Group impa

ired the value of the

investment

in China Bohai Bank by $850 mill

ion

in 2023

(2022: $308 mill

ion). Th

is brings the cumulative

impa

irment recorded

in relation to the Group’s

investment in China Bohai Bank to $1,458 mill

ion

as at 31 December 2023.

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 and modelling special

ists to support

the audit team in calculating an independent

range for the VIU.

We performed audit procedures to assess the

reasonableness of the Group’s forecast of the

future cashﬂows relating to Bohai, 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,

includ

ing an

evaluation of the public disclosures by Bohai.

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.

On the basis of the evidence,

we concluded that the Group

continues to mainta

in s

ign

iﬁcant

inﬂuence over China Bohai Bank

as at 31 December 2023.

We concluded that the Interest

in Associate –China Bohai Bank

balance was not materially

misstated as at 31 December

2023. Management’s carrying

value for the investment in

Bohai of $700 mill

ion

is with

EY`s independent range.

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.

The risk in respect of sign

iﬁcant

inﬂuence has

not changed compared to the prior year.

354

Standard Chartered

– Annual Report 2023

Financ

ial statements

Independent auditor’s report

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

3. Impairment assessment of

goodwill and investments in

subsid

iary undertak

ings

a) Impairment of Goodwill: Accounting polic

ies

(page 424); and Note 17 of the ﬁnancial

statements. Refer to the Audit Committee

Report (page 40).

b) Impairment of investments in subsid

iary

undertakings: Accounting polic

ies (page 452);

and Note 32 of the ﬁnancial statements. Refer

to the Audit Committee Report (page 46).

At 31 December 2023, the Group reported a

goodwill balance of $2,429 mill

ion (2022:

$2,471 mill

ion). Dur

ing the year no impa

irment

was recognised for goodwill (2022: $14mill

ion).

In the Parent Company ﬁnancial statements, the

investment in subsid

iary undertak

ings balance

was $60,791 mill

ion (2022: $60,975 m

ill

ion).

On an annual basis, management is required

to perform an impa

irment assessment for

goodwill, and to assess for ind

icators of

impa

irment

in respect of investments in

subsid

iary undertak

ings. Where ind

icators of

impa

irment are

ident

iﬁed, the recoverable

amount of the investment should be estimated.

The impa

irment assessment of goodw

ill 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 do not

support the carrying value, the recoverable

amount is estimated by determin

ing the

higher of VIU or fair value less cost to sell.

Where the recoverable amount is based on

the VIU, this is modelled by reference to future

cashﬂow forecasts (proﬁt forecast includ

ing a

regulatory 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

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 to their

source and tested the mathematical accuracy

of the VIU model. We engaged EY special

ists

to support the audit team in assessing

reasonableness of the regulatory haircut

adjustment to future proﬁtabil

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.

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.

We agreed the NAV of the subsid

iar

ies to

their carrying value to conﬁrm impa

irment

or reversal of impa

irment recogn

ised in the

Parent`s Company ﬁnancial results.

We assessed the appropriateness of disclosures

for impa

irment of goodw

ill and investments in

subsid

iary undertak

ings in accordance with

IAS 36.

We concluded that the goodwill

balance as at 31 December 2023

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 scenarios could

necessitate an adjustment to

the carrying amount of goodwill

in future.

We also concluded that the

investments in subsid

iary

undertakings balance reported in

the Parent Company ﬁnancial

statements and the associated

disclosures, are not materially

misstated as at 31 December 2023.

355

Standard Chartered

– Annual Report 2023

Financ

ial statements

Risk

Our response to the risk

Key observations communicated

to the Audit Committee

4. Valuation of ﬁnanc

ial

instruments

held at fair value with higher risk

characterist

ics

Refer to the Audit Committee Report (page 163);

Accounting polic

ies (page 390); and Note 13 of

the ﬁnancial statements.

At 31 December 2023, the Group reported

ﬁnancial assets measured at fa

ir value of

$301,976 mill

ion (2022: $282,263 m

ill

ion), and

ﬁnancial l

iab

ies at fa

ir value of $139,157 mill

ion

(2022: $149,765 mill

ion), of wh

ich ﬁnanc

ial

assets of $6,714 mill

ion (2022: $5,865 m

ill

ion)

and ﬁnancial l

iab

ies of $2,960 m

ill

ion (2022:

$1,878 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 observab

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 validat

ion

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 testing on a

risk-assessed sample basis:

•

Test complex model-dependent valuations

by independently revaluing 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, Level 3 loans at

fair value, Level 3 debt and other ﬁnanc

ial

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

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 macroeconom

environment. In addit

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:

•

We did not ident

ify mater

ial

differences aris

ing from our

independent testing of complex

model-dependent valuations;

•

Fair values of derivat

ive

transactions, debt securit

ies

in issue, unlisted equity

investments, Level 3 loans,

Level 3 debt and other ﬁnancial

instruments valued using

pric

ing

informat

ion w

ith

lim

ited observab

ity were

not materially misstated as at

31 December 2023, 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.

5. Priv

ileged Access Management

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, 2021 and 2022 audits, a

number of sign

iﬁcant

infrastructure priv

ileged

access management control deﬁcienc

ies

were ident

iﬁed by us. S

ilar deﬁcienc

ies

were ident

iﬁed by Group Internal Aud

it (GIA)

and the predecessor auditor in 2018 and 2019.

The possib

ity of users gain

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, unauthor

ised changes to

systems or programmes.

The risk has decreased in comparison

to prior year due to management’s

remediat

ion program.

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 2023.

We communicated the results of

our audit procedures to the Audit

Committee throughout the audit,

in respect of the effectiveness of

priv

ileged access management

controls and explained the results

of the addit

ional aud

it procedures

performed and noted an overall

improvement in the control

environment during the course

of the year.

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

ﬁnancial statements, related

to infrastructure priv

ileged

access management, to an

appropriate level.

The key audit matters remain consistent from prior year.

356

Standard Chartered

– Annual Report 2023

Financ

ial statements

Independent auditor’s report

Our applicat

ion of mater

ial

ity

We apply the concept of material

ity

in planning and

performing the audit, in evaluating the effect of ident

iﬁed

misstatements on the audit and in forming our audit opin

ion.

Material

ity

The magnitude of an omiss

ion or m

isstatement that,

ind

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 $274 m

ill

ion

(2022: $234 mill

ion), wh

ich is 5% (2022: 5%) of adjusted PBT.

This reﬂects actual PBT adjusted for non-recurring items

relating to restructuring and the impa

irment of Ch

ina Bohai

Bank. We believe that adjusted PBT provides us with 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.

During 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.

• Reported proﬁt before tax – $5,093m

Starting basis

• Add China Bohai Bank Impairment – $850m

• Deduct Other restructuring – $460m

Adjustments

• Totals $5,483m Adjusted PBT

• Material

ity of $274m (5% of Adjusted PBT)

Material

ity

We determined material

ity for the Parent Company to be

$247 mill

ion (2022: $210 m

ill

ion), wh

ich is 0.5% (2022: 0.4%) 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 assessment, together with our

evaluation of the Group’s overall control environment, our

judgement was that performance material

ity was 50%

(2022: 50%) of our planning material

ity, namely $137m

(2022: $117m). We have set performance material

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 scale and

risk of the component to the Group as a whole and our

assessment of the risk of misstatement at that component.

In the current year, the range of performance material

ity

allocated to components was $11.4 mill

ion to $26.2 m

ill

ion

(2022: $8.8 mill

ion to $34.1 m

ill

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 $14 mill

ion

(2022: $11 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.

We evaluate any uncorrected misstatements against both

the quantitat

ive measures of mater

ial

ity d

iscussed above and

in light of other relevant qualitat

ive cons

iderat

ions

in forming

our opin

ion.

Other informat

ion

The other informat

ion compr

ises the informat

ion

included

in the Annual Report and Accounts, includ

ing: the Strateg

Report, Sustainab

ity Review, Directors’ Report (other than

those sections of the Directors Remuneration Report marked

as audited), Risk Review and Capital Review (other than

those sections marked as audited) and Supplementary

Information, other than the ﬁnanc

ial statements and our

auditor’s report thereon. The directors are responsible for

the other informat

ion conta

ined with

in the annual report.

Our opin

ion on the ﬁnancial statements does not cover

the other informat

ion and, except to the extent otherw

ise

explic

itly stated

in this report, we do not express any form

of assurance conclusion thereon.

Our responsib

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.

357

Standard Chartered

– Annual Report 2023

Financ

ial statements

Opin

ions on other matters prescr

ibed by the

Companies Act 2006

In our opin

ion, the part of the d

irectors’ remuneration report to

be audited has been properly prepared in accordance with

the Companies Act 2006.

In our opin

ion, based on the work undertaken

in the course of

the audit:

•

the informat

ion g

iven in the strategic report and the

directors’ report for the ﬁnanc

ial year for wh

ich the ﬁnanc

ial

statements are prepared is consistent with the ﬁnanc

ial

statements; and

•

the strategic report and the directors’ report have been

prepared in accordance with applicable legal requirements.

Matters on which we are required to report by

exception

In the light of the knowledge and understanding of the Group

and the Parent Company and its environment obtained in

the course of the audit, we have not ident

iﬁed mater

ial

misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters

in relation to which the Companies Act 2006 requires us to

report to you if, in our opin

ion:

•

adequate accounting records have not been kept by the

Parent Company, or returns adequate for our audit have

not been received from branches not vis

ited by us; or

•

the Parent Company ﬁnancial statements and the part of

the Directors’ Remuneration Report to be audited are not

in agreement with the accounting records and returns; or

•

certain disclosures of directors’ remuneration specif

ied by

law are not made; or

•

we have not received all the informat

ion and explanat

ions

we require for our audit.

Corporate Governance Statement

We have reviewed the directors’ statement in relation to

going concern, longer-term viab

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 218;

•

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 88

and 89;

•

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 89;

•

Directors’ statement on fair, balanced and understandable

set out on page 217;

•

Board’s conﬁrmation that

it has carried out a robust

assessment of the emerging and princ

ipal r

isks set out

on page 221;

•

The section of the annual report that describes the review

of effectiveness of risk management and internal control

systems set out on pages 230 to 343; and

•

The section describ

ing the work of the aud

it committee

set out on pages 162 to 167.

Responsib

ies of d

irectors

As explained more fully in the directors’ responsib

ies

statement set out on page 229, 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

ﬁnancial 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 m

isrepresentat

ions, or through collus

ion.

The extent to which our procedures are capable of

detecting irregular

ies, includ

ing fraud

is detailed below.

358

Standard Chartered

– Annual Report 2023

Financ

ial statements

Independent auditor’s report

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 Mainland

China, Hong Kong, India, Republic of Korea, Singapore, the

United Arab Emirates, the United State of America, and the

relevant tax compliance regulations in the jur

isd

ict

ions

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.

•

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 it would have resulted in it 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 test

ing. We also performed

inspect

ion of key regulatory correspondence from the

princ

ipal regulatory author

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

of the ﬁnancial statements

is located on the Financ

ial

Reporting 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 3 May 2023 to audit the ﬁnanc

ial

statements for the year ending 31 December 2023 and

subsequent ﬁnancial per

iods.

•

The period of total uninterrupted engagement is four

years, covering the years ended 31 December 2020 to

31 December 2023.

•

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

23 February 2024

359

Standard Chartered

– Annual Report 2023

Financ

ial statements

Notes

2023

$mill

ion

2022

$mill

ion

Interest income

27,227

15,252

Interest expense

(19,458)

(7,659)

Net interest income

7,769

7,593

Fees and commiss

ion

income

4,067

3,972

Fees and commiss

ion expense

(815)

(859)

Net fee and commiss

ion

income

3,252

3,113

Net trading income

6,292

5,310

Other operating income

706

302

Operating income

18,019

16,318

Staff costs

(8,256)

(7,618)

Premises costs

(422)

(401)

General admin

istrat

ive expenses

(1,802)

(1,708)

Depreciat

ion and amort

isat

ion

(1,071)

(1,186)

Operating expenses

(11,551)

(10,913)

Operating proﬁt before impa

irment losses and taxat

ion

6,468

5,405

Credit impa

irment

(508)

(836)

Goodwill, property, plant and equipment and other impa

irment

(1,008)

(439)

Proﬁt from associates and jo

int ventures

141

156

Proﬁt before taxation

5,093

4,286

Taxation

(1,631)

(1,384)

Proﬁt for the year

3,462

2,902

Proﬁt attributable to:

Non-controlling interests

(7)

(46)

Parent company shareholders

3,469

2,948

Proﬁt for the year

3,462

2,902

cents

Earnings per share:

Basic earnings per ordinary share

108.6

85.9

Diluted earnings per ordinary share

106.2

84.3

The notes on pages 367 to 487 form an integral part of these ﬁnanc

ial statements.

Consolidated income statement

For the year ended 31 December 2023

360

Standard Chartered

– Annual Report 2023

Financ

ial statements

Financ

ial statements

Notes

2023

$mill

ion

2022

$mill

ion

Proﬁt for the year

3,462

2,902

Other comprehensive income:

Items that will not be reclassif

ied to

income statement:

239

(75)

Own credit gains/(losses) on ﬁnanc

ial l

iab

ies des

ignated at fair value through proﬁt or loss

212

(56)

Equity instruments at fair value through other comprehensive income

181

(75)

Actuarial (losses)/gains on retirement beneﬁt obligat

ions

(47)

Taxation relating to components of other comprehensive income

(107)

Items that may be reclassif

ied subsequently to

income statement:

562

(3,703)

Exchange differences on translation of foreign operations:

Net loss taken to equity

(734)

(2,466)

Net gains on net investment hedges

215

512

Share of other comprehensive loss from associates and jo

int ventures

(7)

(79)

Debt instruments at fair value through other comprehensive income:

Net valuation gain/(loss) taken to equity

383

(1,528)

Reclassif

ied to

income statement

115

207

Net impact of expected credit losses

(48)

118

Cash ﬂow hedges:

Net movements in cash ﬂow hedge reserve

767

(619)

Taxation relating to components of other comprehensive income

(129)

152

Other comprehensive income/(loss) for the year, net of taxation

801

(3,778)

Total comprehensive income/(loss) for the year

4,263

(876)

Total comprehensive income/(loss) attributable to:

Non-controlling interests

(38)

(88)

Parent company shareholders

4,301

(788)

Total comprehensive income/(loss) for the year

4,263

(876)

Consolidated statement of

comprehensive income

For the year ended 31 December 2023

361

Standard Chartered

– Annual Report 2023

Financ

ial statements

Notes

2023

$mill

ion

2022

$mill

ion

Assets

Cash and balances at central banks

13,35

69,905

58,263

Financ

ial assets held at fa

ir value through proﬁt or loss

147,222

105,812

Derivat

ive ﬁnancial

instruments

13,14

50,434

63,717

Loans and advances to banks

13,15

44,977

39,519

Loans and advances to customers

13,15

286,975

310,647

Investment securit

ies

161,255

172,448

Other assets

47,594

50,383

Current tax assets

484

503

Prepayments and accrued income

3,033

3,149

Interests in associates and jo

int ventures

966

1,631

Goodwill and intang

ible assets

6,214

5,869

Property, plant and equipment

2,274

5,522

Deferred tax assets

702

834

Assets classif

ied as held for sale

809

1,625

Total assets

822,844

819,922

Liab

ies

Deposits by banks

28,030

28,789

Customer accounts

469,418

461,677

Repurchase agreements and other sim

ilar secured borrow

ing

13,16

12,258

2,108

Financ

ial l

iab

ies held at fa

ir value through proﬁt or loss

83,096

79,903

Derivat

ive ﬁnancial

instruments

13,14

56,061

69,862

Debt securit

ies

in issue

13,22

62,546

61,242

Other liab

ies

39,221

43,527

Current tax liab

ies

811

583

Accruals and deferred income

6,975

5,895

Subordinated liab

ies and other borrowed funds

13,27

12,036

13,715

Deferred tax liab

ies

770

769

Provis

ions for l

iab

ies and charges

299

383

Retirement beneﬁt obligat

ions

183

146

Liab

ies

included in disposal groups held for sale

787

1,307

Total liab

ies

772,491

769,906

Equity

Share capital and share premium account

6,815

6,930

Other reserves

9,171

8,165

Retained earnings

28,459

28,067

Total parent company shareholders’ equity

44,445

43,162

Other equity instruments

5,512

6,504

Total equity excluding non-controlling interests

49,957

49,666

Non-controlling interests

396

350

Total equity

50,353

50,016

Total equity and liab

ies

822,844

819,922

The notes on pages 367 to 487 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 23 February 2024 and signed

on its behalf by:

José Viñals

Bill Winters

Diego De Giorg

Group Chairman

Group Chief Executive

Group Chief Financ

ial Ofﬁcer

Consolidated balance sheet

As at 31 December 2023

362

Standard Chartered

– Annual Report 2023

Financ

ial statements

Financ

ial statements

Consolidated statement of changes in equity

For the year ended 31 December 2023

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 2022

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)/income¹¹

–

(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 buyback

3,4

(92)

–

(1,258)

–

(1,258)

Other movements

–

5,6

9⁵

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

Proﬁt/(loss) for the year

–

3,469

–

(7)

3,462

Other comprehensive income/(loss)¹¹

–

163

426

124

655

(489)

(47)

832

–

(31)

801

Distr

ibut

ions

–

(26)

Redemption of other equity instruments

–

– (1,000)

–

(1,000)

Treasury shares net movement

–

(189)

–

(189)

Share option expenses

–

173

–

173

Div

idends on ord

inary shares

–

(568)

–

(568)

Div

idends on preference shares and

AT1 securit

ies

–

(452)

–

(452)

Share buyback

8,9

(115)

–

115

–

(2,000) (2,000)

–

(2,000)

Other movements

–

8⁵

110

136

As at 31 December 2023

5,321

1,494

17,453

100

(690)

330

(8,113) 28,459

44,445

5,512

396

50,353

Includes capital reserve of $5 mill

ion, cap

ital redemption reserve of $337 mill

ion and merger reserve of $17,111 m

ill

ion

Comprises actuarial gain on Group deﬁned beneﬁt schemes

On 18 February 2022, the Group announced the buyback 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, the buyback 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 buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases was

$36 mill

ion, and the total cons

iderat

ion pa

id was $504 mill

ion. The total number of shares purchased was 73,073,837 represent

ing 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 related to Translation adjustment and AT1 Securit

ies charges

Movement mainly related to $21 mill

ion NCI on Power2SME Pte. Ltd. and $8 m

ill

ion on CurrencyFa

ir Lim

ited & $(9)m

ill

ion related to AT1 secur

ies charges

Movements primar

ily from non-controll

ing interest pertain

ing to Mox Bank L

ited ($39 m

ill

ion), Trust Bank S

ingapore Lim

ited ($47 m

ill

ion) , Zod

ia Markets

Holdings Lim

ited ($3 m

ill

ion) and Power2SME Pte. Ltd. ($9 m

ill

ion)

On 16 February 2023, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases

was $58 mill

ion, and the total cons

iderat

ion pa

id was $1,000 mill

ion and the buyback completed on 29 September 2023. The total number of shares purchased

was 116,710,492, representing 4.03 per cent of the ordinary shares in issue as at the commencement of the buyback. The nominal value of the shares was

transferred from the share capital to the capital redemption reserve account

On 28 July 2023, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases was

$57 mill

ion, and the total cons

iderat

ion pa

id was $1,000 mill

ion and the buyback completed on 6 November 2023. The total number of shares purchased was

112,982,802, representing 3.90 per cent of the ordinary shares in issue as at the commencement of the buyback. The nominal value of the shares was transferred

from the share capital to the capital redemption reserve account

10 Movements primar

ily from non-controll

ing interest pertain

ing to Mox Bank L

ited ($48 m

ill

ion), Trust Bank S

ingapore Lim

ited ($34 m

ill

ion) and Zod

ia Custody

Lim

ited ($28 m

ill

ion)

All the amounts are net of tax

Note 28 includes a descript

ion of each reserve.

The notes on pages 367 to 487 form an integral part of these ﬁnanc

ial statements.

363

Standard Chartered

– Annual Report 2023

Financ

ial statements

Notes

Group

Company

2023

$mill

ion

2022

(Restated)

$mill

ion

2023

$mill

ion

2022

$mill

ion

Cash ﬂows from operating activ

ies:

Proﬁt before taxation

5,093

4,286

4,269

402

Adjustments for non-cash items and other adjustments

included with

income statement

3,274

3,549

(2,847)

565

Change in operating assets³

(14,458)

12,989

(3,819)

(258)

Change in operating liab

ies

1,977

8,786

3,239

(966)

Contribut

ions to deﬁned beneﬁt schemes

(81)

(80)

–

UK and overseas taxes paid

(1,367)

(821)

–

Net cash (used in)/from operating activ

ies

(5,562)

28,709

842

(257)

Cash ﬂows from invest

ing act

ies:

Internally generated capital

ised software

(1,124)

(1,096)

–

Purchase of property, plant and equipment

(159)

(835)

–

Disposal of property, plant and equipment

343

–

Disposal of held for sale property, plant and equipment

191

–

Acquis

ion of investment associates, and jo

int

ventures, net of cash acquired

(47)

(26)

–

Div

idends rece

ived from subsid

iar

ies, associates and

joint ventures

4,738

1,047

Disposal of investment in subsid

iar

ies, associates,

and joint ventures, net of cash acqu

ired²

3,603

–

Purchase of investment securit

ies

(229,302)

(280,952)

(423)

–

Disposal and maturity of investment securit

ies

242,585

259,853

2,000

960

Net cash from/(used in) from invest

ing act

ies

15,811

(22,576)

6,315

2,007

Cash ﬂows from ﬁnancing act

ies:

Exercise of share options

Purchase of own shares

(215)

Cancellation of shares includ

ing share buyback

(2,000)

(1,258)

(2,000)

(1,258)

Premises and equipment lease liab

ity princ

ipal payment

(234)

(269)

–

Issue of addit

ional T

ier 1 Capital, net of expenses

–

1,240

–

1,240

Redemption of Tier 1 Capital

(1,000)

(999)

(1,000)

(999)

Gross proceeds from issue of subordinated liab

ies

750

–

750

Interest paid on subordinated liab

ies

(563)

(667)

(545)

(619)

Repayment of subordinated liab

ies

(2,160)

(1,848)

(2,160)

(1,800)

Proceeds from issue of senior debts

15,261

11,902

5,105

1,500

Repayment of senior debts

(6,471)

(7,838)

(2,037)

(2,980)

Interest paid on senior debts

(1,145)

(845)

(434)

(506)

Net cash inﬂow from non-controlling interest

116

–

Distr

ibut

ions and div

idends pa

id to non-controlling

interests, preference shareholders and AT1 Securit

ies

11,29

(478)

(432)

(452)

(401)

Div

idends pa

id to ordinary shareholders

(568)

(393)

(568)

(393)

Net cash from/(used in) ﬁnanc

ing act

ies

587

(772)

(4,280)

(5,669)

Net increase/(decrease) in cash and cash equivalents

10,836

5,361

2,877

(3,919)

Cash and cash equivalents at beginn

ing of the year³

97,595

94,947

7,417

11,336

Effect of exchange rate movements on cash and

cash equivalents

(796)

(2,713)

–

Cash and cash equivalents at end of the year

1,3

107,635

97,595

10,294

7,417

Comprises cash and balances at central banks $69,905 mill

ion (31 December 2022: $58,263 m

ill

ion), treasury b

ills and other elig

ible b

ills $5,931 mill

ion (31 December

2022: $12,661 mill

ion), loans and advances to banks $11,879 m

ill

ion (31 December 2022: $10,144 m

ill

ion), loans and advances to customers $25,829 m

ill

ion (31

December 2022: $24,586 mill

ion)

investments $244 mill

ion (31 December 2022: $1,114 m

ill

ion) less restr

icted balances $6,153 mill

ion (31 December 2022: $9,173 m

ill

ion)

Includes disposal of aviat

ion ﬁnance leas

ing business ($3,570 mill

ion), sale of Metaco SA ($14 m

ill

ion), Cardspal Pte. Ltd. ($12 m

ill

ion) and Kozag

i ($7 mill

ion)

Refer to note 34 and 35 for details of the restatement

Interest received was $27,136 mill

ion (31 December 2022: $14,590 m

ill

ion),

interest paid was $18,379 mill

ion (31 December 2022:

$6,200 mill

ion).

Cash ﬂow statement

For the year ended 31 December 2023

364

Standard Chartered

– Annual Report 2023

Financ

ial statements

Financ

ial statements

Company balance sheet

For the year ended 31 December 2023

Notes

2023

$mill

ion

2022

$mill

ion

Non-current assets

Investments in subsid

iary undertak

ings

60,791

60,975

Current assets

Derivat

ive ﬁnancial

instruments

Financ

ial assets held at fa

ir value through proﬁt or loss

19,425

15,358

Investment securit

ies

6,944

8,423

Amounts owed by subsid

iary undertak

ings

10,294

7,417

Total current assets

36,743

31,259

Current liab

ies

Derivat

ive ﬁnancial

instruments

1,104

1,343

Amounts owed to subsid

iary undertak

ings

–

Financ

ial l

iab

ies held at fa

ir value through proﬁt or loss

16,704

12,842

Other creditors

650

423

Total current liab

ies

18,458

14,610

Net current assets

18,285

16,649

Total assets less current liab

ies

79,076

77,624

Non-current liab

ies

Debt securit

ies

in issue

17,142

13,891

Subordinated liab

ies and other borrowed funds

9,248

11,239

Total non-current liab

ies

26,390

25,130

Total assets less liab

ies

52,686

52,494

Equity

Share capital and share premium account

6,815

6,930

Other reserves

17,409

17,271

Retained earnings

22,952

21,791

Total shareholders’ equity

47,176

45,992

Other equity instruments

5,510

6,502

Total equity

52,686

52,494

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 $4,205 mill

ion (31 December 2022: $471 m

ill

ion).

The notes on pages 367 to 487 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 23 February 2024 and signed

on its behalf by:

José Viñals

Bill Winters

Diego De Giorg

Group Chairman

Group Chief Executive

Group Chief Financ

ial Ofﬁcer

365

Standard Chartered

– Annual Report 2023

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 2022

7,022

17,246

(14)

(12)

23,418

6,252

53,912

Proﬁt for the year

–

471

–

471

Other comprehensive loss⁸

–

(5)

(36)

–

(41)

Other equity instruments issued, net of expenses

–

1,240

Treasury shares net movement

–

(203)

–

(203)

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 buyback

3,4

(92)

–

(1,258)

Other Movements

–

(6)

As at 31 December 2022

6,930

17,338

(19)

(48)

21,791

6,502

52,494

Proﬁt for the year

–

4,205

–

4,205

Other comprehensive income⁸

–

Treasury shares net movement

–

(189)

–

(189)

Share option expenses

–

170

–

170

Div

idends on ord

inary shares

–

(568)

–

(568)

Div

idends on preference share and AT1 secur

ies

–

(452)

–

(452)

Redemption of other equity instruments

–

(1,000)

Share buyback

6,7

(115)

115

–

(2,000)

–

(2,000)

Other Movements

–

(5)

As at 31 December 2023

6,815

17,453

(8)

(36)

22,952

5,510

52,686

Includes capital reserve of $5 mill

ion, cap

ital redemption reserve of $337 mill

ion and merger reserve of $17,111 m

ill

ion

Includes div

idend rece

ived of $2,789 mill

ion (2022: $550 m

ill

ion) from Standard Chartered Hold

ing Lim

ited

On 18 February 2022, the Group announced the buyback programme for a share buyback 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, the buyback 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 buyback programme for a share buyback 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. The total number of shares purchased was 73,073,837 represent

ing 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 AT1 securit

ies charges

On 16 February 2023, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases

was $58 mill

ion, and the total cons

iderat

ion pa

id was $1,000 mill

ion and the buyback completed on 29 September 2023. The total number of shares purchased

was 116,710,492, representing 4.03 per cent of the ordinary shares in issue as at the commencement of the buyback. The nominal value of the shares was

transferred from the share capital to the capital redemption reserve account

On 28 July 2023, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases was

$57 mill

ion, and the total cons

iderat

ion pa

id was $1,000 mill

ion and the buyback completed on 6 November 2023. The total number of shares purchased was

112,982,802, representing 3.90 per cent of the ordinary shares in issue as at the commencement of the buyback. The nominal value of the shares was transferred

from the share capital to the capital redemption reserve account

All the amounts are net of tax

Note 28 includes a descript

ion of each reserve.

The notes on pages 367 to 487 form an integral part of these ﬁnanc

ial statements.

Company statement of changes in equity

For the year ended 31 December 2023

366

Standard Chartered

– Annual Report 2023

Financ

ial statements

Notes to the ﬁnancial statements

Contents – Notes to the ﬁnancial statements

Section

Note

Page

Basis of preparation

Accounting polic

ies

367

Performance/return

Segmental informat

ion

370

Net interest income

375

Net fees and commiss

ion

375

Net trading income

378

Other operating income

378

Operating expenses

379

Credit impa

irment

380

Goodwill, property, plant and equipment and other impa

irment

384

Taxation

384

Div

idends

388

Earnings per ordinary share

389

Assets and liab

ies held at fa

ir value

Financ

ial

instruments

390

Derivat

ive ﬁnancial

instruments

414

Financ

ial

instruments held at amortised cost

Loans and advances to banks and customers

422

Reverse repurchase and repurchase agreements includ

ing other

sim

ilar lend

ing and borrowing

422

Other assets and investments

Goodwill and intang

ible assets

424

Property, plant and equipment

427

Leased assets

429

Other assets

430

Assets held for sale and associated liab

ies

430

Funding, accruals, provis

ions, cont

ingent

liab

ies and legal proceed

ings

Debt securit

ies

in issue

431

Other liab

ies

432

Provis

ions for l

iab

ies and charges

432

Contingent liab

ies and comm

itments

433

Legal and regulatory matters

434

Capital instruments, equity and reserves

Subordinated liab

ies and other borrowed funds

435

Share capital, other equity instruments and reserves

436

Non-controlling interests

441

Employee beneﬁts

Retirement beneﬁt obligat

ions

442

Share-based payments

447

Scope of consolidat

ion

Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

452

Structured entit

ies

457

Cash ﬂow statement

458

Cash and cash equivalents

460

Other disclosure matters

Related party transactions

460

Post balance sheet events

461

Auditor’s remuneration

462

Standard Chartered PLC (Company)

462

Related undertakings of the Group

465

Financ

ial statements

Standard Chartered

– Annual Report 2023

367

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 234) to the end of

Other princ

ipal r

isks in the same section (page 297).

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’

(page 339 to 340).

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:

•

Expected credit loss calculations (Note 8)

•

Financ

ial

instruments measured at fair value (Note 13)

•

Investments in subsid

iary undertak

ings, jo

int ventures

and associates – China Bohai associate accounting and

impa

irment analys

is (Note 32)

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)

•

Retirement beneﬁt obligat

ions (Note 30)

•

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

inab

ity

Review chapter which incorporates the Group’s Climate-

related Financ

ial D

isclosures which align with the

recommendations from the Task Force for Climate related

Financ

ial D

isclosures (TCFD). Further risk disclosure has been

provided in the Princ

ipal R

isks and Uncertaint

ies sect

ion of

the Annual Report where the Group has described how it

manages climate risk as an Integrated Risk Type.

Notes to the ﬁnancial statements

Financ

ial statements

Notes to the ﬁnancial statements

368

Standard Chartered

– Annual Report 2023

1. Accounting polic

ies

continued

The areas of impact where judgements and the use of

estimates have been applied were credit risk and the impact

on lending portfolios; ESG features with

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 goodw

ill, deferred tax assets and investments

in subsid

iary undertak

ings.

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). The setting of net zero targets for our high

carbon sectors, which as of this annual report covers

11 of the 12 high carbon sectors as mandated by the Net Zero

Banking Alliance, manages transit

ion r

isk. Net zero targets

enable the portfolio managers to work with our clients on

their transit

ion, deploy cap

ital to those clients which are

engaged and have adequate transit

ion pathways, and ex

clients that refuse to work with the Group on moving from

a high carbon present to a low carbon future. All of these

actions manage the Group’s transit

ion r

isk and engage

clients before transit

ion r

isk manifests itself into credit losses.

Physical risk is already included with

in the majority of our

mortgage lending decis

ions, and we have appl

ied scenario

analysis against the pathways of different temperature

addit

ions and country pol

icy scenarios. We also assess

the impact of climate risk on the classif

icat

ion of ﬁnanc

ial

instruments under IFRS 9, when Environmental, Sustainab

ity

or Governance (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 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. The Climate risk impact

assessment on IFRS 9 business as usual ECL has been

conducted based on newly developed internal climate risk

models for four Corporate sectors (Oil and Gas, Power, Steel

and Min

ing) and Sovere

igns, whilst the top-down approach

developed in 2022 was used for the remain

ing portfol

ios.

The impact assessment resulted in a marginal ECL increase

across CCIB and CPBB, which will not be recorded as an

overlay for the 2023 year end.

The Group’s corporate plan has a 5 year outlook and

considers the high carbon sectors the Group ﬁnances.

The majority of the Group h

igh carbon sector targets are

production/physical intens

ies which allow continued levels

of lending as long as the products the client produce have

a decreasing carbon cost. For Coal Min

ing and O

il and Gas,

these sectors have absolute targets which represent a

decreasing carbon budget. Coal Min

ing

is an immater

ial

book, whilst for Oil and Gas lending is being actively

monitored towards lower carbon counterparties and

technologies. The corporate plan is shorter term than many

of the climate scenario outlooks but seeks to capture the

nearer term performance as required by recoverabil

ity

models. The Group has for the second time in the 2024

corporate plan included antic

ipated ECL charges l

inked to

climate for four sectors (Oil and Gas, Metals and Min

ing,

Power and Transport excluding Aviat

ion) 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.

The Group has further progressively strengthened its

scenario analysis capabil

ies with the modelling of Climate

Risk impact over a 30-year period across multiple dimens

ions

includ

ing scenar

io data and pathways. This has been

lim

ited by ava

ilab

ity of client-specif

ic data, and modell

ing

lim

itat

ions which have required judgements to be made

around scenarios chosen, regression and proxies used.

Notwithstand

ing these challenges, our work to date, us

ing

certain 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 bespoke

scenarios that were explored.

The Group, although acknowledging the lim

itat

ions of

current data available, increas

ing soph

ist

icat

ion of models

evolving and nascent nature of climate impacts on internal

and client assets, considers Climate Risk to have lim

ited

quantitat

ive

impact in the immed

iate term and as a

longer-term risk 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.

Financ

ial statements

Standard Chartered

– Annual Report 2023

369

1. Accounting polic

ies

continued

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:

• Cash ﬂow statement

•

Note 2 Segmental informat

ion

•

Note 12 Earnings per ordinary share

•

Note 34 Cash ﬂow statement

•

Note 35 Cash and cash equivalents

New accounting standards adopted by the group

There were no new accounting standards or interpretat

ions

that had a material effect on the Group’s Financ

ial

Statements in 2023.

New accounting standards in issue but not yet effective

IAS 21 Amendment - Lack of Exchangeabil

ity

The IAS 21 amendment was issued in August 2023 and is

effective for annual reporting periods beginn

ing on or after

January 1, 2025. This amendment is not yet endorsed for use

in the United Kingdom. The amendment provides guidance

to specify when a currency is exchangeable and how to

determine the exchange rate when it is not. The amendment

requires disclosure of informat

ion that enables users of

ﬁnancial statements to understand the

impact of a currency

not being exchangeable. The Group will apply the IAS 21

Amendment for annual reporting periods beginn

ing on

January 1, 2025 and is currently assessing the impact on

the Group’s ﬁnancial statements but do not expect th

is to

be material.

Going concern

These ﬁnancial statements were approved by the Board

of directors on 23 February 2024. The directors have made

an assessment of the Group’s abil

ity to cont

inue as a

going concern. This assessment has been made having

considered the current macroeconomic and geopolit

ical

headwinds, includ

ing:

•

Review of the Group Strategy and Corporate Plan

•

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 the

Group Recovery Plan (RP) which include the applicat

ion

of stressed scenarios. Under the tests and through the

range of scenarios, the results of these exercises and the

RP demonstrate that the Group has sufﬁcient cap

ital

and liqu

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 LCR rat

io.

•

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

23 February 2024. For this reason, the Group continues to

adopt the going concern basis of accounting for preparing

the ﬁnancial statements.

Changes in accounting polic

ies

The Group has changed its accounting policy regarding

the determinat

ion of the cost of

its portfolio of Investment

Securit

ies held at amort

ised cost and Debt securit

ies and

other elig

ible b

ills, other than those included with

in ﬁnancial

instruments held at fair value through proﬁt or loss. Refer to

Note 13 Financ

ial Instruments.

Financ

ial statements

Notes to the ﬁnancial statements

370

Standard Chartered

– Annual Report 2023

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 locat

ion from which a client relationsh

is managed, which

may differ from where it is ﬁnanc

ially booked and may be shared between bus

inesses and/or regions. In certain instances

this approach is not appropriate and a Financ

ial V

iew is disclosed, that is, the location in which the transaction or balance

was booked. Typically, the Financ

ial V

iew is used in areas such as the Market and Liqu

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.

Restructuring items excluded from underlying results

The Group’s reported IFRS performance is adjusted for certain items to arrive at alternative performance measures. These items

include proﬁts or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent, other

infrequent and/or exceptional transactions that are sign

iﬁcant or mater

ial in the context of the Group’s normal business

earnings for the period and items which management and investors would ordinar

ily

ident

ify separately when assess

ing

consistent performance period by period. The alternative performance measures are not with

in the scope of IFRS and not a

substitute for IFRS measures. These adjustments are set out below.

Restructuring losses of $14 mill

ion pr

imar

ily relates to ex

its in AME and the Aviat

ion ﬁnance bus

iness performance until actual

disposal. The Group is also reclassify

ing the movements

in the Debit Valuation Adjustment (DVA) into restructuring and

other items.

Reconcil

iat

ions between underlying and reported results are set out in the tables below:

	2023
			Net gain on	Goodwill
			businesses	and other
	Underlying	Restructuring	disposed of³	Impairment 1	DVA	Reported
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Operating income	17,378	362	262	–	17	18,019
Operating expenses	(11,136)	(415)	–	–	–	(11,551)
Operating proﬁt/(loss) before
impa irment losses and taxat ion	6,242	(53)	262	–	17	6,468
Credit impa irment	(528)	20	–	–	–	(508)
Other impa irment	(130)	(28)	–	(850)	–	(1,008)
Proﬁt from associates and jo int ventures	94	47	–	–	–	141
Proﬁt/(loss) before taxation	5,678	(14)	262	(850)	17	5,093

	2022²
			Net gain on	Goodwill
			businesses	and other
	Underlying	Restructuring	disposed of	Impairment 1	DVA	Reported
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Operating income	15,762	494	20	–	42	16,318
Operating expenses	(10,409)	(504)	–	–	–	(10,913)
Operating proﬁt/(loss) before
impa irment losses and taxat ion	5,353	(10)	20	–	42	5,405
Credit impa irment	(836)	–	–	–	–	(836)
Other impa irment	(39)	(78)	–	(322)	–	(439)
Proﬁt/(loss) from associates and jo int
ventures	167	(11)	–	–	–	156
Proﬁt/(loss) before taxation	4,645	(99)	20	(322)	42	4,286

Goodwill and other impa

irment

include $850 mill

ion (31 December 2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate

China Bohai Bank (Bohai)

Restructuring, DVA and other items for relevant periods in 2022 have been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance

and (i

i) DVA from underlying operating performance

Net gain on businesses disposed of includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business

and a loss of $47 mill

ion

in relation to a sale of a portfolio of Aviat

ion loans

371

Standard Chartered

– Annual Report 2023

Financ

ial statements

2. Segmental informat

ion

continued

Underlying performance by client segment

	2023
	Corporate,	Consumer,
	Commercial &	Private &		Central &
	Institut ional	Business		other items
	Banking	Banking	Ventures	(segment)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Operating income	11,218	7,106	156	(1,102)	17,378
External	8,543	3,902	157	4,776	17,378
Inter-segment	2,675	3,204	(1)	(5,878)	–
Operating expenses	(5,627)	(4,261)	(429)	(819)	(11,136)
Operating proﬁt/(loss) before impa irment losses
and taxation	5,591	2,845	(273)	(1,921)	6,242
Credit impa irment	(123)	(354)	(85)	34	(528)
Other impa irment	(32)	(4)	(26)	(68)	(130)
(Loss)/proﬁt from associates and jo int ventures	–	–	(24)	118	94
Underlying proﬁt/(loss) before taxation	5,436	2,487	(408)	(1,837)	5,678
Restructuring	32	(60)	(4)	18	(14)
Goodwill and other impa irment⁴	–	–	–	(850)	(850)
DVA	17	–	–	–	17
Other items⁵	262	–	–	–	262
Reported proﬁt/(loss) before taxation	5,747	2,427	(412)	(2,669)	5,093
Total assets	403,058	128,768	4,009	287,009	822,844
Of which: loans and advances to customers	189,395	126,117	1,035	28,939	345,486
loans and advances to customers	130,897	126,104	1,035	28,939	286,975
loans held at fair value through proﬁt or loss
(FVTPL) 2	58,498	13	–	–	58,511
Total liab il it ies	464,968	200,263	3,096	104,164	772,491
Of which: customer accounts 3	328,211	195,678	2,825	7,908	534,622

	2022¹
	Corporate,	Consumer,
	Commercial &	Private &		Central &
	Institut ional	Business		other items
	Banking	Banking	Ventures	(segment)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Operating income	9,608	5,969	29	156	15,762
External	8,462	4,942	29	2,329	15,762
Inter-segment	1,146	1,027	–	(2,173)	–
Operating expenses	(5,193)	(4,104)	(336)	(776)	(10,409)
Operating proﬁt/(loss) before impa irment losses
and taxation	4,415	1,865	(307)	(620)	5,353
Credit impa irment	(425)	(262)	(16)	(133)	(836)
Other impa irment	–	(10)	(24)	(5)	(39)
(Loss)/proﬁt from associates and jo int ventures	–	–	(16)	183	167
Underlying proﬁt/(loss) before taxation	3,990	1,593	(363)	(575)	4,645
Restructuring	14	(56)	(1)	(56)	(99)
Goodwill and other impa irment⁴	–	–	–	(322)	(322)
DVA	42	–	–	–	42
Other items	–	–	–	20	20
Reported proﬁt/(loss) before taxation	4,046	1,537	(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) 2	44,498	28	–	2,557	47,083
Total liab il it ies	479,981	185,396	1,658	102,871	769,906
Of which: customer accounts 3	332,176	180,659	1,548	5,846	520,229

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

Loans held at FVTPL includes $51,299 mill

ion (2022: $40,537 m

ill

ion) of reverse repurchase agreements

Customer accounts includes $17,248 mill

ion (2022: $11,706 m

ill

ion) of FVTPL and $47,956 m

ill

ion (2022: $46,846 m

ill

ion) of reverse repurchase agreements

Goodwill and other impa

irment

include $850 mill

ion (31 December 2023: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate

China Bohai Bank (Bohai)

Other items includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

in relation to a sale of a portfolio of Aviat

ion loans

Financ

ial statements

Notes to the ﬁnancial statements

372

Standard Chartered

– Annual Report 2023

2. Segmental informat

ion

continued

Operating income by client segment

	2023
	Corporate,	Consumer,
	Commercial &	Private &		Central &
	Institut ional	Business		other items
	Banking	Banking	Ventures	(segment)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Underlying operating income	11,218	7,106	156	(1,102)	17,378
Restructuring	291	45	–	26	362
DVA	17	–	–	–	17
Other items²	262	–	–	–	262
Reported operating income	11,788	7,151	156	(1,076)	18,019

	2022¹
	Corporate,	Consumer,
	Commercial &	Private &		Central &
	Institut ional	Business		other items
	Banking	Banking	Ventures	(segment)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Underlying operating income	9,608	5,969	29	156	15,762
Restructuring	436	47	–	11	494
DVA	42	–	–	–	42
Other items	–	–	–	20	20
Reported operating income	10,086	6,016	29	187	16,318

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

Other items includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

in relation to a sale of a portfolio of Aviat

ion loans

Underlying performance by region

	2023
				Central &
		Africa &	Europe &	other items
	Asia	Middle East	Americas	(region)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Operating income	12,429	2,806	1,397	746	17,378
Operating expenses	(7,096)	(1,571)	(1,733)	(736)	(11,136)
Operating proﬁt/(loss) before impa irment losses
and taxation	5,333	1,235	(336)	10	6,242
Credit impa irment	(644)	91	19	6	(528)
Other impa irment	(63)	(15)	(13)	(39)	(130)
Proﬁt/(loss) from associates and jo int ventures	114	–	–	(20)	94
Underlying proﬁt/(loss) before taxation	4,740	1,311	(330)	(43)	5,678
Restructuring	(97)	(2)	32	53	(14)
Goodwill and other impa irment 1	(850)	–	–	–	(850)
DVA	(16)	26	7	–	17
Other items⁴	35	(18)	263	(18)	262
Reported proﬁt/(loss) before taxation	3,812	1,317	(28)	(8)	5,093
Total assets	505,905	54,140	253,410	9,389	822,844
Of which: loans and advances to customers	256,400	25,870	63,216	–	345,486
loans and advances to customers	233,417	22,774	30,784	–	286,975
loans held at fair value through proﬁt or loss
(FVTPL) 2	22,983	3,096	32,432	–	58,511
Total liab il it ies	461,568	40,612	181,417	88,894	772,491
Of which: customer accounts³	377,020	33,059	124,543	–	534,622

Goodwill and other impa

irment

include $850 mill

ion (31 December 2023: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate

China Bohai Bank (Bohai)

Loans held at FVTPL includes $51,299 mill

ion (2022: $40,537 m

ill

ion) of reverse repurchase agreements

Customer accounts includes $17,248 mill

ion (2022: $11,706 m

ill

ion) of FVTPL and $47,956m

ill

ion (2022: $46,846 m

ill

ion) of reverse repurchase agreements

Other items includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

in relation to a sale of a portfolio of Aviat

ion loans

Financ

ial statements

Standard Chartered

– Annual Report 2023

373

2. Segmental informat

ion

continued

	2022¹
				Central &
		Africa &	Europe &	other items
	Asia	Middle East	Americas	(region)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Operating income	10,912	2,460	2,303	87	15,762
Operating expenses	(6,675)	(1,551)	(1,548)	(635)	(10,409)
Operating proﬁt/(loss) before impa irment losses
and taxation	4,237	909	755	(548)	5,353
Credit impa irment	(790)	(119)	78	(5)	(836)
Other impa irment	(10)	2	1	(32)	(39)
Proﬁt/(loss) from associates and jo int ventures	179	–	–	(12)	167
Underlying proﬁt/(loss) before taxation	3,616	792	834	(597)	4,645
Restructuring	(46)	21	(13)	(61)	(99)
Goodwill and other impa irment 2	(308)	–	–	(14)	(322)
DVA	20	8	14	–	42
Other items	20	–	–	–	20
Reported proﬁt/(loss) before taxation	3,302	821	835	(672)	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) 3	13,721	2,287	31,075	–	47,083
Total liab il it ies	441,349	40,902	219,701	67,954	769,906
Of which: customer accounts 4	346,832	31,860	141,537	–	520,229

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

Goodwill and other impa

irment

include $850 mill

ion (31 December 2023: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate

China Bohai Bank (Bohai)

Loans held at FVTPL includes $51,299 mill

ion (2022: $40,537 m

ill

ion) of reverse repurchase agreements

Customer accounts includes $17,248 mill

ion (2022: $11,706 m

ill

ion) of FVTPL and $47,956m

ill

ion (2022: $46,846 m

ill

ion) of reverse repurchase agreements

Other items includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

in relation to a sale of a portfolio of Aviat

ion loans

Operating income by region

	2023
				Central &
		Africa &	Europe &	other items
	Asia	Middle East	Americas	(region)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Underlying operating income	12,429	2,806	1,397	746	17,378
Restructuring	203	110	35	14	362
DVA	(16)	26	7	–	17
Other items²	35	(18)	263	(18)	262
Reported operating income	12,651	2,924	1,702	742	18,019

	2022¹
				Central &
		Africa &	Europe &	other items
	Asia	Middle East	Americas	(region)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Underlying operating income	10,912	2,460	2,303	87	15,762
Restructuring	304	140	35	15	494
DVA	20	8	14	–	42
Other items	20	–	–	–	20
Reported operating income	11,256	2,608	2,352	102	16,318

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

Other items includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

in relation to a sale of a portfolio of Aviat

ion loans

Financ

ial statements

Notes to the ﬁnancial statements

374

Standard Chartered

– Annual Report 2023

2. Segmental informat

ion

continued

Addit

ional segmental

informat

ion (reported)

	2023
	Corporate,	Consumer,
	Commercial &	Private &		Central &
	Institut ional	Business		other items
	Banking	Banking	Ventures	(segment)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Net interest income	4,541	4,970	81	(1,823)	7,769
Net fees and commiss ion income	1,753	1,538	43	(82)	3,252
Net trading and other income	5,494	643	32	829	6,998
Operating income	11,788	7,151	156	(1,076)	18,019

	2022
	Corporate,	Consumer,
	Commercial &	Private &		Central &
	Institut ional	Business		other items
	Banking	Banking	Ventures	(segment)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Net interest income	3,616	3,969	18	(10)	7,593
Net fees and commiss ion income	1,706	1,524	8	(125)	3,113
Net trading and other income	4,764	523	3	322	5,612
Operating income	10,086	6,016	29	187	16,318

	2023
				Central &
		Africa &	Europe &	other items
	Asia	Middle East	Americas	(region)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Net interest income	5,872	1,584	(545)	858	7,769
Net fees and commiss ion income	2,237	509	553	(47)	3,252
Net trading and other income	4,542	831	1,694	(69)	6,998
Operating income	12,651	2,924	1,702	742	18,019

	2022
				Central &
		Africa &	Europe &	other items
	Asia	Middle East	Americas	(region)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Net interest income	5,747	1,299	260	287	7,593
Net fees and commiss ion income	2,224	526	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

	2023
	Hong
	Kong	Korea	China	Taiwan	Singapore	India	Indonesia	UAE	UK	US
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Net interest income	1,946	684	520	154	937	654	110	390	(930)	170
Net fees and commiss ion income	615	171	149	182	576	221	53	81	18	441
Net trading and other income	2,052	216	487	214	929	330	78	330	1,277	263
Operating income	4,613	1,071	1,156	550	2,442	1,205	241	801	365	874

	2022
	Hong
	Kong	Korea	China	Taiwan	Singapore	India	Indonesia	UAE	UK	US
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Net interest income	1,843	751	561	171	982	611	89	281	(189)	330
Net fees and commiss ion income	658	157	143	162	553	239	52	81	44	393
Net trading and other income	1,235	237	450	141	380	377	73	268	1,167	306
Operating income	3,736	1,145	1,154	474	1,915	1,227	214	630	1,022	1,029

Financ

ial statements

Standard Chartered

– Annual Report 2023

375

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 rate is the rate that discounts estimated future cash payments or receipts through the expected life of

the ﬁnancial

instrument or, when appropriate, a shorter period, to the net carrying amount of the ﬁnanc

ial asset or ﬁnancial

liab

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.

	2023	2022
	$mill ion	$mill ion
Balances at central banks	2,833	765
Loans and advances to banks	2,095	853
Loans and advances to customers	15,518	10,032
Debt securit ies	5,005	2,836
Other elig ible b ills	1,596	630
Accrued on impa ired assets (d iscount unwind)	180	136
Interest income	27,227	15,252
Of which: ﬁnanc ial instruments held at fair value through other comprehensive income	3,445	2,167
Deposits by banks	796	433
Customer accounts	14,292	5,443
Debt securit ies in issue	3,367	1,169
Subordinated liab il it ies and other borrowed funds	951	570
Interest expense on IFRS 16 lease liab il it ies	52	44
Interest expense	19,458	7,659
Net interest income	7,769	7,593

4. Net fees and commiss

ion

Accounting policy

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.

Financ

ial statements

Notes to the ﬁnancial statements

376

Standard Chartered

– Annual Report 2023

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

is earned.

Retail Products

The Group recognises most income at the point in time the Group is entitled to the fee, since most services are provided at the

time of the customer’s request.

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.

Upfront bancassurance considerat

ion amounts are amort

ised on a straight-line basis over the contractual period to which the

considerat

ion relates.

Financ

ial statements

Standard Chartered

– Annual Report 2023

377

4. Net fees and commiss

ion

continued

	2023	2022
	$mill ion	$mill ion
Fees and commiss ions income	4,067	3,972
Of which:
Financ ial instruments that are not fair valued through proﬁt or loss	1,374	1,306
Trust and other ﬁduciary act iv it ies	508	520
Fees and commiss ions expense	(815)	(859)
Of which:
Financ ial instruments that are not fair valued through proﬁt or loss	(169)	(303)
Trust and other ﬁduciary act iv it ies	(52)	(49)
Net fees and commiss ion	3,252	3,113

	2023
	Corporate,	Consumer,
	Commercial &	Private &		Central &
	Institut ional	Business		other Items
	Banking	Banking	Ventures	(segment)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Transaction Banking	1,142	32	–	–	1,174
Trade & Working capital	576	25	–	–	601
Cash Management	566	7	–	–	573
Financ ial Markets	882	–	–	–	882
Lending & Portfolio Management	141	6	–	–	147
Princ ipal F inance	(1)	–	–	–	(1)
Wealth Management	–	1,225	–	–	1,225
Retail Products	–	592	32	–	624
Treasury	–	–	–	(15)	(15)
Others	–	2	35	(6)	31
Fees and commiss ion income	2,164	1,857	67	(21)	4,067
Fees and commiss ion expense	(411)	(319)	(24)	(61)	(815)
Net fees and commiss ion	1,753	1,538	43	(82)	3,252

	2022
	Corporate,	Consumer
	Commercial &	Private &		Central &
	Institut ional	Business		other Items
	Banking	Banking	Ventures	(segment)	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Transaction Banking	1,143	32	–	–	1,175
Trade & Working capital	594	25	–	–	619
Cash Management	549	7	–	–	556
Financ ial Markets	958	–	–	–	958
Lending & Portfolio Management	124	5	–	–	129
Wealth Management	–	1,127	–	–	1,127
Retail Products	–	582	12	–	594
Treasury	–	–	–	(5)	(5)
Others	–	(2)	8	(12)	(6)
Fees and commiss ion income	2,225	1,744	20	(17)	3,972
Fees and commiss ion expense	(519)	(220)	(12)	(108)	(859)
Net fees and commiss ion	1,706	1,524	8	(125)	3,113

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 $474 mill

ion (31 December 2022:

$549 mill

ion). Follow

ing renegotiat

ion of the contract

in 2023, the life of the contract was extended for a further 3 years.

Accordingly, the income will be earned evenly over a longer period for the next 8.5 years (31 December 2022: 6.5 years). For the

twelve months ended 31 December 2023, $75 mill

ion of fee

income was released from deferred income (31 December 2022:

$84 mill

ion).

Financ

ial statements

Notes to the ﬁnancial statements

378

Standard Chartered

– Annual Report 2023

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.

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.

Income is recognised from the sale and purchase of trading posit

ions, marg

ins on market making and customer business and

fair value changes.

	2023	2022
	$mill ion	$mill ion
Net trading income	6,292	5,310
Sign iﬁcant items with in net trad ing income include:
Gains on instruments held for trading¹	4,625	4,942
Gains on ﬁnanc ial assets mandator ily at fair value through proﬁt or loss	4,270	1,087
Gains/(losses) on ﬁnanc ial assets des ignated at fair value through proﬁt or loss	10	(6)
Losses on ﬁnancial l iab il it ies des ignated at fair value through proﬁt or loss	(2,649)	(677)

Includes $299 mill

ion loss (31 December 2022: $365 m

ill

ion ga

in) from the translation of foreign currency monetary assets and liab

ies

6. Other operating income

	2023	2022
	$mill ion	$mill ion
Other operating income includes:
Rental income from operating lease assets	375	421
Net loss on disposal of fair value through other comprehensive income debt instruments	(115)	(207)
Net (loss)/gain on disposal of amortised cost ﬁnanc ial assets 1	(94)	17
Net gain/(loss) on sale of businesses 2	351	(1)
Div idend income	15	14
Gain on sale of aircrafts	-	21
Others³	174	37
Other operating income	706	302

Includes $47 mill

ion loss on sale of a portfol

io of aviat

ion loans

2023 includes $309 mill

ion ga

in from the sale of the aviat

ion ﬁnance leas

ing business, $18 mill

ion from sale of assoc

iate (Metaco SA), $16 mill

ion ga

in from sale of

subsid

iary ($9 m

ill

ion from Cardspal and $7 m

ill

ion from Kozag

i) and $8 mill

ion ga

in from the sale of Jordan one of the AME regions exit markets

2023 mainly includes $59 mill

ion tax cred

it against Research & Development Expenditure, $38 mill

ion ga

in on disposal of premises, $21 mill

ion

income from VISA

sponsorship in Hong Kong, $10 mill

ion from ga

in on lease modif

icat

ion in Hong Kong and $16 mill

ion

interest income from tax refund in India

Financ

ial statements

Standard Chartered

– Annual Report 2023

379

7. Operating expenses

	2023	2022
	$mill ion	$mill ion
Staff costs:
Wages and salaries	6,459	6,014
Social security costs	233	210
Other pension costs (Note 30)	431	390
Share-based payment costs (Note 31)	226	199
Other staff costs	907	805
	8,256	7,618

Other staff costs include redundancy expenses of $106 mill

ion (31 December 2022: $79 m

ill

ion). Further costs

in this category

include train

ing, travel costs and other staff-related costs.

Details of directors’ pay, beneﬁts, pensions and beneﬁts and interests in shares are disclosed in the Directors’ remuneration

report (page 195).

Transactions with directors, ofﬁcers and other related parties are disclosed in Note 36.

	2023	2022
	$mill ion	$mill ion
Premises and equipment expenses:	422	401
General admin istrat ive expenses:
UK bank levy	111	102
Provis ion for regulatory matters	–	14
Other general admin istrat ive expenses	1,691	1,592
	1,802	1,708
Depreciat ion and amort isat ion:
Property, plant and equipment:
Premises	315	326
Equipment	103	123
Operating lease assets	27	202
	445	651
Intangibles:
Software	625	531
Acquired on business combinat ions	1	4
	1,071	1,186
Total operating expenses	11,551	10,913

Operating expenses include research expenditure of $996 mill

ion (31 December 2022: $946 m

ill

ion), wh

ich was recognized

as an expense in the year

The UK bank levy is applied to 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.

Financ

ial statements

Notes to the ﬁnancial statements

380

Standard Chartered

– Annual Report 2023

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 expected cred

it loss include:

•

The Group’s criter

ia for assess

ing if there has been a sign

iﬁcant

increase in credit risk;

•

Development of expected credit loss models, includ

ing the cho

ice of inputs relating to macroeconomic variables;

•

Determin

ing est

imates of forward looking macroeconomic forecasts;

•

Evaluation of management overlays and post-model adjustments;

•

Determinat

ion of probab

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 expected cred

it loss can be found in the credit

risk section, under IFRS 9 Methodology (page 273).

Estimates of forecasts of key macroeconomic variables underlying the expected credit loss calculation can be found with

the Risk review, Key assumptions and judgements in determin

ing expected cred

it loss (page 275).

Expected credit losses

An ECL represents the present value of expected cash shortfalls over the residual term of a ﬁnanc

ial asset, undrawn

commitment or ﬁnanc

ial guarantee.

A cash shortfall is the difference between the cash ﬂows that are due in accordance with the contractual terms of the

instrument and the cash ﬂows that the Group expects to receive over the contractual life of the instrument.

Measurement

ECL are computed as unbiased, probabil

ity-we

ighted amounts which are determined by evaluating a range of reasonably

possible outcomes, the time value of money, and consider

ing all reasonable and supportable

informat

ion

includ

ing that

which is forward-looking.

For material portfolios, the estimate of expected cash shortfalls is determined by multiply

ing the probab

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.

Financ

ial statements

Standard Chartered

– Annual Report 2023

381

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 value 1
Financ ial assets held FVOCI – Debt instruments	Other comprehensive income (FVOCI expected credit loss reserve) 2
Loan commitments	Provis ions for l iab il it ies and charges 3
Financ ial guarantees	Provis ions for l iab il it ies and charges 3

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)

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 statist

ically s

ign

iﬁcant nor

is it assessed in the context of changes in expected credit loss. Whether a change

in the risk of default is sign

iﬁcant or not

is assessed using a number of quantitat

ive and qual

itat

ive factors, the we

ight of

which depends on the type of product and counterparty. Financ

ial assets that are 30 or more days past due and not

credit-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 (see page 282 to 284).

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.

Financ

ial statements

Notes to the ﬁnancial statements

382

Standard Chartered

– Annual Report 2023

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 257);

•

Pending or actual bankruptcy or other ﬁnanc

ial reorgan

isat

ion to avo

id or delay discharge of the borrower’s obligat

ion/s;

•

The disappearance of an active market for the applicable ﬁnanc

ial asset due to ﬁnancial d

iff

icult

ies of the borrower;

•

Purchase or orig

inat

ion of a ﬁnanc

ial asset at a deep d

iscount that reﬂects incurred credit losses

Lending commitments to a credit-impa

ired obl

igor that have not yet been drawn down are included to the extent that the

commitment cannot be withdrawn. Loss provis

ions aga

inst credit-impa

ired ﬁnancial assets are determ

ined based on an

assessment of the present value of expected cash shortfalls (discounted at the instrument’s orig

inal effect

ive interest rate)

under a range of scenarios, includ

ing the real

isat

ion of any collateral held where appropr

iate. The Group’s deﬁn

ion of

default is aligned with the regulatory deﬁn

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 (wh

ich is a qualitat

ive tr

igger for sign

iﬁcant

increase

in credit risk (see page 283)the credit assessment and oversight of the loan will normally be performed by Stressed Assets

Risk (SAR).

Borrowers graded CG12 exhib

it well-deﬁned weaknesses

in areas such as management and/or performance but there is

no current expectation of a loss of princ

ipal or

interest in the likely scenario. Where the impa

irment assessment

ind

icates

that there will be a loss of princ

ipal on a loan

in the likely scenario, the borrower is graded a CG14 while borrowers of other

credit-impa

ired loans are graded CG13. Instruments graded CG13 or CG14 are regarded as stage 3.

For ind

idually sign

iﬁcant ﬁnancial assets w

ith

in stage 3, SAR w

ill consider all judgements that have an impact on the

expected future cash ﬂows of the asset. These include: the business prospects, industry and geo polit

ical cl

imate of

the customer, quality of realisable value of collateral, the Group’s legal posit

ion relat

ive to other claimants and any

renegotiat

ion/ forbearance/ mod

icat

ion options. The future cash ﬂow calculation involves sign

iﬁcant judgements

and estimates. As new informat

ion becomes ava

ilable and further negotiat

ions/ forbearance measures are taken the

estimates of the future cash ﬂows will be revised, and will have an impact on the future cash ﬂow analysis.

For ﬁnancial assets wh

ich are not ind

idually sign

iﬁcant, such as the Reta

il Banking portfolio or small business loans, which

comprise a large number of homogenous loans that share sim

ilar character

ist

ics, stat

ist

ical est

imates and techniques are

used, as well as credit scoring analysis.

Consumer and Business Banking clients are considered credit-impa

ired where they are more 90 days past due, or

if the

borrower ﬁles for bankruptcy or other forbearance programme, the borrower is deceased or the business is closed in the case

of a small business, or if the borrower surrenders the collateral, or there is an ident

iﬁed fraud on the account. 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.

Financ

ial statements

Standard Chartered

– Annual Report 2023

383

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

ial recognit

ion, then the favourable d

ifferences are recognised as impa

irment ga

ins in the income statement (and as

impa

irment loss where the expected cred

it losses are greater).

Improvement in credit risk/curing

For ﬁnancial assets that are cred

it-impa

ired (stage 3), a transfer to stage 2 or stage 1

is only permitted where the instrument

is no longer considered to be credit-impa

ired. An

instrument will no longer be considered credit-impa

ired when there

is no

shortfall of cash ﬂows compared to the orig

inal contractual terms.

For ﬁnancial assets w

ith

in stage 2, these can only be transferred to stage 1 when they are no longer cons

idered to have

experienced a sign

iﬁcant

increase in credit risk.

Where sign

iﬁcant

increase in credit risk was determined using quantitat

ive measures, the

instruments will automatically

transfer back to stage 1 when the orig

inal PD based transfer cr

iter

ia are no longer met. Where

instruments were transferred

to stage 2 due to an assessment of qualitat

ive factors, the

issues that led to the reclassif

icat

ion must be cured before the

instruments can be reclassif

ied to stage 1. Th

is includes instances where management actions led to instruments being

classif

ied as stage 2, requ

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.

Financ

ial statements

Notes to the ﬁnancial statements

384

Standard Chartered

– Annual Report 2023

8. Credit impa

irment

continued

	2023	2022
	$mill ion	$mill ion
Net credit impa irment on loans and advances to banks and customers	606	743
Net credit impa irment on debt secur it ies¹	(50)	122
Net credit impa irment relat ing to ﬁnanc ial guarantees and loan comm itments	(48)	(27)
Net credit impa irment relat ing to other ﬁnanc ial assets	–	(2)
Credit impa irment	508	836

Includes impa

irment of $1 m

ill

ion (2022: $13 m

ill

ion) on or

inated cred

it-impa

ired debt secur

ies

9. Goodwill, property, plant and equipment and other impa

irment

Accounting policy

Refer to the below referenced notes for the relevant accounting policy.

	2023	2022
	$mill ion	$mill ion
Impairment of goodwill (Note 17)	–	14
Impairment of property, plant and equipment (Note 18)	12	50
Impairment of other intang ible assets (Note 17)	112	12
Other¹	884	363
Property, plant and equipment and other impa irment	1,008	425
Goodwill, property, plant and equipment and other impa irment	1,008	439

Other includes $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank (Bohai), reﬂecting Bohai’s

lower reported net proﬁt in 2023 (compared to 2022), as well as banking industry challenges and property market uncertaint

ies

in Mainland China, that may

impact Bohai’s future proﬁtab

ity

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.

Financ

ial statements

Standard Chartered

– Annual Report 2023

385

10. Taxation

continued

The following table provides analysis of taxation charge in the year:

	2023	2022
	$mill ion	$mill ion
The charge for taxation based upon the proﬁt for the year comprises:
Current tax:
United Kingdom corporation tax at 23.5 per cent (2022: 19 per cent):
Current tax charge on income for the year	(48)	48
Adjustments in respect of prior years (includ ing double tax rel ief)	14	–
Foreign tax:
Current tax charge on income for the year	1,695	1,216
Adjustments in respect of prior years	(11)	5
	1,650	1,269
Deferred tax:
Orig inat ion/reversal of temporary differences	(22)	144
Adjustments in respect of prior years	3	(29)
	(19)	115
Tax on proﬁts on ordinary activ it ies	1,631	1,384
Effective tax rate	32.0%	32.3%

The tax charge for the year of $1,631 mill

ion (31 December 2022: $1,384 m

ill

ion) on a proﬁt before tax of $5,093 m

ill

ion

(31 December 2022: $4,286 mill

ion) reﬂects the

impact of tax losses for which no deferred tax assets are recognised,

non-deductible expenses, and non-creditable withhold

ing taxes and other taxes. These are partly offset by tax exempt

income.

Foreign tax includes current tax of $201 mill

ion (31 December 2022: $35 m

ill

ion) on the proﬁts assessable

in Hong Kong. Deferred

tax includes orig

inat

ion or reversal of temporary differences of $nil mill

ion (31 December 2022: $51 m

ill

ion) prov

ided at a rate of

16.5 per cent (31 December 2022: 16.5 per cent) on the proﬁts assessable in Hong Kong.

The Group will be in scope of the new Pillar Two global min

imum tax rules wh

ich were substantively enacted in the UK on

20 June 2023 to apply for periods commencing 1 January 2024. The IAS 12 exception to recognise and disclose informat

ion

about deferred tax assets and liab

ies related to P

illar Two income taxes has been applied.

Based on an in

ial impact assessment undertaken in respect of histor

ical ﬁnancial data together w

ith corporate plan data

available, the Group’s exposure to Pillar Two income taxes are not expected to be material. The Group is closely monitor

ing

developments to assess potential 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, 23.5 per cent.

The differences are explained below:

	2023		2022
	$mill ion	%	$mill ion	%
Proﬁt on ordinary activ it ies before tax	5,093		4,286
Tax at 23.5 per cent (2022: 19 per cent)	1,197	23.5	814	19.0
Lower tax rates on overseas earnings	(330)	(6.5)	(122)	(2.8)
Higher tax rates on overseas earnings	306	6.0	435	10.1
Tax at domestic rates applicable where proﬁts earned	1,173	23.0	1,127	26.3
Non-creditable withhold ing taxes and other taxes¹	85	1.7	170	4.0
Tax exempt income	(131)	(2.6)	(69)	(1.6)
Share of associates and jo int ventures	(14)	(0.3)	(27)	(0.6)
Non-deductible expenses	219	4.3	115	2.7
Bank levy	26	0.5	19	0.4
Non-taxable losses on investments²	64	1.3	51	1.2
Payments on ﬁnancial instruments in reserves	(68)	(1.3)	(56)	(1.3)
Goodwill impa irment	–	–	3	0.1
Deferred tax not recognised	278	5.4	77	1.8
Deferred tax rate changes	(1)	–	(9)	(0.2)
Adjustments to tax charge in respect of prior years	6	0.1	(24)	(0.6)
Other items 1	(6)	(0.1)	7	0.1
Tax on proﬁt on ordinary activ it ies	1,631	32.0	1,384	32.3

The comparatives have been reclassif

ied by mov

ing the effect of other taxes from Other items to Non-creditable withhold

ing taxes and other taxes

in order to

provide more clarity to the reader. The 2022 comparatives have been reclassif

ied as follows to al

ign with the presentation in the current period: Non-creditable

withhold

ing taxes and other taxes from $90 m

ill

ion to $170 m

ill

ion, and Other

items from $87 mill

ion to $7 m

ill

ion.

Non-taxable losses on investments includes $140 mill

ion (2022: $51 m

ill

ion)

in respect of the tax impact of the impa

irment charge relat

ing to the Group’s

investment in its associate China Bohai Bank (Bohai).

Financ

ial statements

Notes to the ﬁnancial statements

386

Standard Chartered

– Annual Report 2023

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.

	2023			2022
Tax recognised in other	Current tax	Deferred tax	Total	Current tax	Deferred tax	Total
comprehensive income	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Items that will not be reclassif ied to
income statement	–	(107)	(107)	–	15	15
Own credit adjustment	–	(49)	(49)	–	8	8
Equity instruments at fair value through
other comprehensive income	–	(69)	(69)	–	27	27
Retirement beneﬁt obligat ions	–	11	11	–	(20)	(20)
Items that may be reclassed
subsequently to income statement	–	(129)	(129)	–	152	152
Debt instruments at fair value through
other comprehensive income	–	(17)	(17)	–	63	63
Cashﬂow hedges	–	(112)	(112)	–	89	89
Total tax credit/(charge) recognised
in equity	–	(236)	(236)	–	167	167

Current tax:

The following are the movements in current tax during the year:

	2023	2022
Current tax comprises:	$mill ion	$mill ion
Current tax assets	503	766
Current tax liab il it ies	(583)	(348)
Net current tax opening balance	(80)	418
Movements in income statement	(1,650)	(1,269)
Movements in other comprehensive income	–	–
Taxes paid	1,367	821
Other movements	36	(50)
Net current tax balance as at 31 December	(327)	(80)
Current tax assets	484	503
Current tax liab il it ies	(811)	(583)
Total	(327)	(80)

Deferred tax:

The following are the major deferred tax liab

ies and assets recogn

ised by the Group and movements thereon

during the year:

	At	Exchange			At
	1 January	& other	(Charge)/credit	(Charge)/credit	31 December
	2023	adjustments	to proﬁt	to equity	2023
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Deferred tax comprises:
Accelerated tax depreciat ion	(589)	236	(71)	–	(424)
Impairment provis ions on loans and advances	334	(20)	(28)	–	286
Tax losses carried forward	212	(106)	(9)	–	97
Equity instruments at fair value through other
comprehensive income	(74)	(1)	–	(69)	(144)
Debt instruments at fair value through other
comprehensive income	61	(14)	(3)	(17)	27
Cashﬂow hedges	89	(2)	–	(112)	(25)
Own credit adjustment	5	(27)	–	(49)	(71)
Retirement beneﬁt obligat ions	2	2	(11)	11	4
Share-based payments	36	–	7	–	43
Other temporary differences	(11)	16	134	–	139
Net deferred tax assets/(liab il it ies)	65	84	19	(236)	(68)

Financ

ial statements

Standard Chartered

– Annual Report 2023

387

10. Taxation

continued

	At	Exchange			At
	1 January	& other	(Charge)/credit	(Charge)/credit	31 December
	2022	adjustments	to proﬁt	to equity	2022
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Deferred tax comprises:
Accelerated tax depreciat ion	(515)	(8)	(66)	–	(589)
Impairment provis ions on loans and advances	351	(41)	24	–	334
Tax losses carried forward	263	16	(67)	–	212
Equity instruments at fair value through other
comprehensive income 1	(96)	(6)	1	27	(74)
Debt instruments at fair value through other
comprehensive income 1	(30)	5	23	63	61
Cashﬂow hedges	–	–	–	89	89
Own credit adjustment	(3)	–	–	8	5
Retirement beneﬁt obligat ions	27	(5)	–	(20)	2
Share-based payments	32	–	4	–	36
Other temporary differences	30	(7)	(34)	–	(11)
Net deferred tax assets/(liab il it ies)	59	(46)	(115)	167	65

2022 has been reclassif

ied to separately d

isclose Equity instruments at fair value through other comprehensive income and Debt instruments at fair value through

other comprehensive income. No change in overall balance.

Deferred tax comprises assets and liab

ies as follows:

	2023			2022
	Total	Asset	Liab il ity	Total	Asset	Liab il ity
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Deferred tax comprises:
Accelerated tax depreciat ion	(424)	3	(427)	(589)	1	(590)
Impairment provis ions on loans
and advances	286	282	4	334	339	(5)
Tax losses carried forward	97	49	48	212	90	122
Equity instruments at fair value through
other comprehensive income 1	(144)	(1)	(143)	(74)	–	(74)
Debt instruments at fair value through
other comprehensive income 1	27	29	(2)	61	45	16
Cashﬂow hedges	(25)	12	(37)	89	85	4
Own credit adjustment	(71)	(1)	(70)	5	(1)	6
Retirement beneﬁt obligat ions	4	13	(9)	2	15	(13)
Share-based payments	43	9	34	36	5	31
Other temporary differences	139	307	(168)	(11)	255	(266)
	(68)	702	(770)	65	834	(769)

2022 has been reclassif

ied to separately d

isclose Equity instruments at fair value through other comprehensive income and Debt instruments at fair value through

other comprehensive income. No change in overall balance.

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. The Group’s total deferred tax assets

include $97 mill

ion relat

ing

to tax losses carried forward, of which $48 mill

ion ar

ises in legal entit

ies w

ith offsetting deferred tax liab

ies. The rema

ing

deferred tax assets on losses of $49 mill

ion are forecast to be recovered before exp

iry and with

in ﬁve years.

Sale of aircraft leasing business during the year, included with

in Other operat

ing income, resulted in the disposal of $113 mill

ion

of deferred tax assets relating to losses in Ireland held at 31 December 2022.

Unrecognised deferred tax

	Net	Gross	Net	Gross
	2023	2023	2022	2022
	$mill ion	$mill ion	$mill ion	$mill ion
No account has been taken of the following potential deferred tax
assets/(liab il it ies):
Withhold ing tax on unrem itted earnings from overseas subsid iar ies
and associates	(653)	(7,685)	(507)	(6,434)
Tax losses	2,242	9,326	1,980	8,231
Held over gains on incorporation of overseas branches	(366)	(1,389)	(346)	(1,313)
Other temporary differences	397	1,516	544	1,991

Financ

ial statements

Notes to the ﬁnancial statements

388

Standard Chartered

– Annual Report 2023

11. Div

idends

Accounting policy

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

	2023		2022
	Cents per share	$mill ion	Cents per share	$mill ion
2022/2021 ﬁnal div idend declared and pa id during the year	14	401	9	274
2023/2022 inter im d iv idend declared and pa id during the year	6	167	4	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.

2023 recommended ﬁnal ordinary equity share div

idend

The 2023 ordinary equity share div

idend recommended by the Board

is 21 cents per share. The ﬁnanc

ial statements for the year

ended 31 December 2023 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 2024.

The div

idend w

ill be paid in either pounds sterling, Hong Kong dollars or US dollars on 17 May 2024 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.

		2023	2022
		$mill ion	$mill ion
Non-cumulative redeemable preference shares:	7.014 per cent preference shares of $5 each	53	53
	Floating rate preference shares of $5 each¹	50	20
		103	73
Addit ional T ier 1 securit ies: ﬁxed rate resett ing perpetual subordinated contingent convertible securit ies		349	328
		452	401

Floating rate is based on Secured Overnight Financ

ing Rate (SOFR), average rate pa

id for ﬂoating preference shares is 6.62% (2022: 2.71%)

Financ

ial statements

Standard Chartered

– Annual Report 2023

389

12. Earnings per ordinary share

Earnings per share on an underlying basis 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 material in the context of the Group’s normal business earnings for the year.

The table below provides the basis of underlying earnings.

	2023	2022¹
	$mill ion	$mill ion
Proﬁt for the period attributable to equity holders	3,462	2,902
Non-controlling interest	7	46
Div idend payable on preference shares and AT1 class if ied as equ ity	(452)	(401)
Proﬁt for the period attributable to ordinary shareholders	3,017	2,547
Items normalised:
Restructuring	14	99
Goodwill and other impa irment²	850	322
DVA	(17)	(42)
Net gains on sale of Businesses³	(262)	(20)
Tax on normalised items	(21)	(3)
Underlying proﬁt	3,581	2,903
Basic – Weighted average number of shares (mill ions)	2,778	2,966
Diluted – Weighted average number of shares (mill ions)	2,841	3,023
Basic earnings per ordinary share (cents)	108.6	85.9
Diluted earnings per ordinary share (cents)	106.2	84.3
Underlying basic earnings per ordinary share (cents)	128.9	97.9
Underlying diluted earnings per ordinary share (cents)	126.0	96.0

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

2. Goodwill and other impa

irment

include $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

ing to the Group’s investment in its associate China Bohai Bank

(Bohai)

3. Includes the sale of the Aviat

ion F

inance business, of which there was a gain on sale of $309 mill

ion on the leas

ing business and a loss of $47 mill

ion

in relation to

a sale of a portfolio of Aviat

ion loans

The calculation of basic earnings per share is based on the proﬁt attributable to equity holders of the parent and the basic

weighted average number of shares excluding treasury shares held in employees beneﬁt trust. When calculating diluted

earnings per share, the weighted average number of shares in issue is adjusted for the effects of all expected dilut

ive potent

ial

ordinary shares held in respect of Standard Chartered PLC totalling 56 mill

ion (2022: 52 m

ill

ion). The total number of share

options outstanding, under schemes considered to be potentially dilut

ive, was 7 m

ill

ion (2022: 5 m

ill

ion). These opt

ions have

strike prices ranging from $3.99 to $7.49.

Of the total number of employee share options and share awards at 31 December 2023 there were nil share options and awards

which were anti dilut

ive.

The 188 mill

ion decrease (2022: 142 m

ill

ion decrease)

in the basic weighted average number of shares is primar

ily due to the

impact of the share buy-back programmes completed in the year.

Financ

ial statements

Notes to the ﬁnancial statements

390

Standard Chartered

– Annual Report 2023

13. Financ

ial

instruments

Classif

icat

ion and measurement

Accounting policy

Financ

ial assets held at amort

ised cost and fair value through other comprehensive income

Debt instruments held at amortised cost or held at FVOCI have contractual terms that give rise to cash ﬂows that are solely

payments of princ

ipal and

interest (SPPI) characterist

ics.

In assessing whether the contractual cash ﬂows have SPPI characterist

ics, the Group cons

iders the contractual terms of the

instrument. This includes assessing whether the ﬁnanc

ial asset conta

ins a contractual term that could change the tim

ing or

amount of contractual cash ﬂows such that it would not meet this condit

ion. In mak

ing the assessment, the Group considers:

•

Contingent events that would change the amount and tim

ing of cash ﬂows

• Leverage features

•

Prepayment and extension terms

•

Terms that lim

it the Group’s cla

im to cash ﬂows from specif

ied assets (e.g. non-recourse asset arrangements)

•

Features that modify considerat

ion of the t

ime value of money – e.g. period

ical reset of

interest rates.

Whether ﬁnancial assets are held at amort

ised cost or at FVOCI depends on the object

ives of the bus

iness models under

which the assets are held. A business model refers to how the Group manages ﬁnanc

ial assets to generate cash ﬂow.

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

is provided to management. Factors considered include:

•

How the performance of the product business line is evaluated and reported to the Group’s management

•

How managers of the business model are compensated, includ

ing whether management

is compensated based on the

fair value of assets or the contractual cash ﬂows collected

•

The risks that affect the performance of the business model and how those risks are managed

•

The frequency, volume and tim

ing of sales

in prior periods, the reasons for such sales and expectations about future

sales activ

ity.

The Group’s business model assessment is as follows:

Business model	Business object ive	Characterist ics	Businesses	Products
Hold to	Intent is to orig inate	• Provid ing ﬁnancing and	• Corporate Lending	• Loans and advances
collect	ﬁnancial assets and	orig inat ing assets to earn interest	• Financ ial Markets	• Debt securit ies
	hold them to maturity,	income as primary income stream
	collecting the	• Performing credit risk	• Transaction Banking
	contractual cash ﬂows	management activ it ies	• Retail Lending
	over the term of the instrument	• Costs include funding costs, transaction costs and	• Treasury Markets (Loans and
		impa irment losses	Borrowings)
Hold to	Business object ive met	• Portfolios held for liqu id ity needs;	• Treasury Markets	• Debt securit ies
collect	through both hold to	or where a certain interest yield
and sell	collect and by selling	proﬁle is mainta ined; or that are
	ﬁnancial assets	normally rebalanced to achieve
		matching of duration of assets
		and liab il it ies
		• Income streams come from
		interest income, fair value
		changes, and impa irment losses
Fair value	All other business	• Assets held for trading	• Financ ial Markets	• Derivat ives
through	objectives, includ ing	• Assets that are orig inated,	• All other business lines	• Equity shares
proﬁt or loss	trading and managing ﬁnancial assets on a	purchased, and sold for proﬁt taking or underwrit ing act iv ity		• Trading portfolios
	fair value basis			• Financ ial Markets
		• Performance of the portfolio is		reverse repos
		evaluated on a fair value basis
				• Financ ial Markets
		• Income streams are from fair		(FM Bond and Loan
		value changes or trading gains		Syndicat ion)
		or losses

Financ

ial statements

Standard Chartered

– Annual Report 2023

391

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.

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.

Financ

ial statements

Notes to the ﬁnancial statements

392

Standard Chartered

– Annual Report 2023

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

liab

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

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. 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 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

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.

Financ

ial statements

Standard Chartered

– Annual Report 2023

393

13. Financ

ial

instruments

continued

Derecognit

ion of ﬁnancial

instruments

Financ

ial assets wh

ich are subject to commercial reﬁnanc

ing where the loan

is priced to the market with no payment related

concessions regardless of form of legal documentation or nature of lending will be derecognised. Where the Group’s rights to

the cash ﬂows under the orig

inal contract have exp

ired, the old loan is derecognised and the new loan is recognised at fair

value. For all other modif

icat

ions for example forborne loans or restructuring, whether or not a change in the cash ﬂows is

‘substantially different’ is judgemental and will be considered on a case-by-case basis, taking into account all the relevant

facts and circumstances.

On derecognit

ion of a ﬁnancial asset, the d

ifference between the carrying amount of the asset (or the carrying amount

allocated to the portion of the asset derecognised) and the sum of the considerat

ion rece

ived (includ

ing any new asset

obtained less any new liab

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

is 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

is more than 10 per cent, or if less than 10 per cent, the Group will perform a qualitat

ive assessment to determ

ine whether

the terms of the two instruments are substantially different.

If the Group purchases its own debt, it is derecognised and the difference between the carrying amount of the liab

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-impa

ired assets (POCI).

Where derecognit

ion

is not appropriate, the gross carrying amount of the applicable instruments is recalculated as the

present value of the renegotiated or modif

ied contractual cash ﬂows d

iscounted at the orig

inal effect

ive interest rate (or

credit adjusted effective interest rate for POCI ﬁnanc

ial assets). The d

ifference between the recalculated values and the

pre-modif

ied gross carry

ing values of the instruments are recorded as a modif

icat

ion gain or loss in the proﬁt or loss.

Gains and losses aris

ing from mod

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.

Financ

ial statements

Notes to the ﬁnancial statements

394

Standard Chartered

– Annual Report 2023

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 at fair value
				Non-trading
				mandatorily	Designated	Fair value	Total	Assets
			Derivat ives	at fair value	at fair value	through other	ﬁnancial	held at
			held for	through	through	comprehensive	assets at	amortised
		Trading	hedging	proﬁt or loss	proﬁt or loss	income	fair value	cost	Total
Assets	Notes	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Cash and balances at
central banks¹		–	–	–	–	–	–	69,905	69,905
Financ ial assets held at fa ir
value through proﬁt or loss
Loans and advances
to banks²		2,265	–	–	–	–	2,265	–	2,265
Loans and advances
to customers²		6,930	–	282	–	–	7,212	–	7,212
Reverse repurchase
agreements and other
sim ilar secured lend ing	16	9,997	–	71,850	–	–	81,847	–	81,847
Debt securit ies,
alternative tier one
and other elig ible b ills		52,776	–	98	78	–	52,952	–	52,952
Equity shares		2,721	–	219	–	–	2,940	–	2,940
Other assets		–	–	6	–	–	6	–	6
		74,689	–	72,455	78	–	147,222	–	147,222
Derivat ive ﬁnancial
instruments	14	48,333	2,101	–	–	–	50,434	–	50,434
Loans and advances
to banks²	15	–	–	–	–	–	–	44,977	44,977
of which – reverse
repurchase agreements
and other sim ilar
secured lending	16	–	–	–	–	–	–	1,738	1,738
Loans and advances
to customers²	15	–	–	–	–	–	–	286,975	286,975
of which – reverse
repurchase agreements
and other sim ilar
secured lending	16	–	–	–	–	–	–	13,996	13,996
Investment securit ies
Debt securit ies,
alternative tier one
and other elig ible b ills		–	–	–	–	103,328	103,328	56,935	160,263
Equity shares		–	–	–	–	992	992	–	992
		–	–	–	–	104,320	104,320	56,935	161,255
Other assets	20	–	–	–	–	–	–	38,140	38,140
Assets held for sale	21	–	–	–	–	–	–	701	701
Total at 31 December 2023		123,022	2,101	72,455	78	104,320	301,976	497,633	799,609

Cash and balances at central banks includes both cash held in restricted accounts and on demand or placements which are contractually due to mature

overnight only. Other placements with central banks are reported as part of Loans and advances to customers

Further analysed in Risk review and Capital review (pages 230 to 343)

Financ

ial statements

Standard Chartered

– Annual Report 2023

395

13. Financ

ial

instruments

continued

		Assets at fair value
				Non-trading
				mandatorily	Designated	Fair value	Total	Assets
			Derivat ives	at fair value	at fair value	through other	ﬁnancial	held at
			held for	through	through	comprehensive	assets at	amortised
		Trading	hedging	proﬁt or loss	proﬁt or loss	income	fair value	cost	Total
Assets	Notes	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Cash and balances at
central banks¹		–	–	–	–	–	–	58,263	58,263
Financ ial assets held at fa ir
value through proﬁt or loss
Loans and advances
to banks²		976	–	–	–	–	976	–	976
Loans and advances
to customers²		5,765	–	781	–	–	6,546	–	6,546
Reverse repurchase
agreements and other
sim ilar secured lend ing	16	1,175	–	63,316	–	–	64,491	–	64,491
Debt securit ies,
alternative tier one
and other elig ible b ills		30,162	–	324	76	–	30,562	–	30,562
Equity shares		2,997	–	233	–	–	3,230	–	3,230
Other assets		–	–	7	–	–	7	–	7
		41,075	–	64,661	76	–	105,812	–	105,812
Derivat ive ﬁnancial
instruments	14	60,858	2,859	–	–	–	63,717	–	63,717
Loans and advances
to banks²	15	–	–	–	–	–	–	39,519	39,519
of which – reverse
repurchase agreements
and other sim ilar
secured lending	16	–	–	–	–	–	–	978	978
Loans and advances
to customers²	15	–	–	–	–	–	–	310,647	310,647
of which – reverse
repurchase agreements
and other sim ilar
secured lending	16	–	–	–	–	–	–	24,498	24,498
Investment securit ies
Debt securit ies,
alternative tier one
and other elig ible b ills		–	–	–	–	111,926	111,926	59,714	171,640
Equity shares		–	–	–	–	808	808	–	808
		–	–	–	–	112,734	112,734	59,714	172,448
Other assets	20	–	–	–	–	–	–	39,295	39,295
Assets held for sale	21	–	–	–	3	–	3	1,388	1,391
Total at 31 December 2022		101,933	2,859	64,661	79	112,734	282,266	508,826	791,092

Cash and balances at central banks includes both cash held in restricted accounts and on demand or placements which are contractually due to mature

overnight only. Other placements with central banks are reported as part of Loans and advances to customers

Further analysed in Risk review and Capital review (pages 230 to 343)

Financ

ial statements

Notes to the ﬁnancial statements

396

Standard Chartered

– Annual Report 2023

13. Financ

ial

instruments

continued

		Liab il it ies at fa ir value
				Designated	Total
			Derivat ives	at fair value	ﬁnancial
			held for	through	liab il it ies at	Amortised
		Trading	hedging	proﬁt or loss	fair value	cost	Total
Liab il it ies	Notes	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Deposits by banks		–	–	–	–	28,030	28,030
Customer accounts		–	–	–	–	469,418	469,418
Financ ial l iab il it ies held at fa ir value through proﬁt
or loss
Deposits by banks		–	–	1,894	1,894	–	1,894
Customer accounts		39	–	17,209	17,248	–	17,248
Repurchase agreements and other sim ilar
secured borrowing	16	1,660	–	39,623	41,283	–	41,283
Debt securit ies in issue	22	–	–	10,817	10,817	–	10,817
Short posit ions		11,846	–	–	11,846	–	11,846
Other liab il it ies		–	–	8	8	–	8
		13,545	–	69,551	83,096	–	83,096
Derivat ive ﬁnancial instruments	14	52,747	3,314	–	56,061	–	56,061
Repurchase agreements and other sim ilar
secured borrowing	16	–	–	–	–	12,258	12,258
Debt securit ies in issue	22	–	–	–	–	62,546	62,546
Other liab il it ies	23	–	–	–	–	38,663	38,663
Subordinated liab il it ies and other borrowed funds	27	–	–	–	–	12,036	12,036
Liab il it ies included in disposal groups held for sale	21	–	–	–	–	726	726
Total at 31 December 2023		66,292	3,314	69,551	139,157	623,677	762,834

		Liab il it ies at fa ir value
				Designated	Total
			Derivat ives	at fair value	ﬁnancial
			held for	through	liab il it ies at	Amortised
		Trading	hedging	proﬁt or loss	fair value	cost	Total
Liab il it ies	Notes	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Deposits by banks		–	–	–	–	28,789	28,789
Customer accounts		–	–	–	–	461,677	461,677
Financ ial l iab il it ies held at fa ir value through proﬁt
or loss
Deposits by banks		–	–	1,066	1,066	–	1,066
Customer accounts		29	–	11,677	11,706	–	11,706
Repurchase agreements and other sim ilar
secured borrowing	16	–	–	51,706	51,706	–	51,706
Debt securit ies in issue	22	–	–	8,572	8,572	–	8,572
Short posit ions		6,847	–	–	6,847	–	6,847
Other liab il it ies		–	–	6	6	–	6
		6,876	–	73,027	79,903	–	79,903
Derivat ive ﬁnancial instruments	14	65,316	4,546	–	69,862	–	69,862
Repurchase agreements and other sim ilar
secured borrowing	16	–	–	–	–	2,108	2,108
Debt securit ies in issue	22	–	–	–	–	61,242	61,242
Other liab il it ies	23	–	–	–	–	42,915	42,915
Subordinated liab il it ies and other borrowed funds	27	–	–	–	–	13,715	13,715
Liab il it ies included in disposal groups held for sale	21	5	–	–	5	1,230	1,235
Total at 31 December 2022		72,197	4,546	73,027	149,770	611,676	761,446

Financ

ial statements

Standard Chartered

– Annual Report 2023

397

13. Financ

ial

instruments

continued

Interest rate benchmark reform

During 2023, sign

iﬁcant progress was made

in support of LIBOR transit

ion.

New LIBOR-referencing business had ceased and a full suite of Risk Free Rate-referencing derivat

ive and cash products were

standard offerings across the Group.

Having completed the remediat

ion of all non-USD LIBOR exposures at the end of 2021 w

ith no reliance on synthetic rates,

the Programme focused on remediat

ing legacy USD LIBOR stock ahead of the USD LIBOR cessat

ion date (30 June 2023).

The Group made sign

iﬁcant progress towards complet

ing its remediat

ion of legacy exposures over the course of 2023.

Clients with legacy USD LIBOR loans were engaged to remediate their contracts via active conversion to alternative rates,

or other suitable transit

ion mechan

isms such as the inclus

ion of robust fallbacks. For der

ivat

ives, 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 to do the same or to negotiate remediat

ion b

ilaterally. The Group also successfully partic

ipated

in CCP

conversion events, includ

ing both tranches of the London Clear

ing House (LCH) conversions for USD LIBOR and also the

SGD/THB conversion, as well as the CME Eurodollar futures and the Hong Kong Exchanges and Clearing (HKEX) USD LIBOR

events. This sign

iﬁcantly reduced our overall not

ional exposure to USD LIBOR, as centrally cleared derivat

ives and b

ilateral

derivat

ives w

ith fallbacks represented a substantial portion of the Group’s overall USD LIBOR notional exposure.

At 31 December 2023, a number of contracts remain subject to remediat

ion but these are cons

idered immater

ial for the Group.

The largest population of remain

ing exposures are synd

icated loans, either on a standalone basis, or where the loans have

been hedged with derivat

ives. These contracts currently operate under a synthet

ic USD LIBOR rate.

Risks which the Group is exposed to due to LIBOR 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 un-remediated contracts, and manage the risks of the transit

ion unt

fully complete.

Particular attention will continue to be paid to: legal risk of any contracts that may remain outstanding after the end of

synthetic LIBOR (currently scheduled for end of September 2024); conduct risk aris

ing from cont

inued remediat

ion; ﬁnancial

and accounting risk in terms of the ﬁnanc

ial

impact of IBOR transit

ion for the outstand

ing contracts, and also ﬁnanc

ial

instruments that may be affected by accounting issues such as accounting for contractual changes due to IBOR reform,

fair value measurement and hedge accounting, as well as other risks inherent in the reform.

As at 31 December 2022 the Group had the following notional princ

ipal exposures to

interest rate benchmarks that were subject

to interest rate benchmark reform.

IBOR exposures by benchmark	USD LIBOR	GBP LIBOR	SGD SOR	THB FIX	Other IBOR	Total IBOR
at 31 December 2022	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$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 ig ible b ills	2,843	–	15	–	–	2,858
	24,383	–	435	–	–	24,818
Liab il it ies
Deposits by banks	332	–	–	–	–	332
Customer accounts	3,066	–	–	34	–	3,100
Repurchase agreements and other
secured borrowing	671	–	–	–	–	671
Debt securit ies in issue	1,211	–	–	–	–	1,211
Subordinated liab il it ies and other
borrowed funds	–	–	–	–	–	–
	5,280	–	–	34	–	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	–	–	9	–	22,076
Exchange traded futures and options	31,922	–	–	–	–	31,922
Equity and stock index options	49	–	–	–	–	49
Credit derivat ive contracts	3,974	–	46	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	–	14	–	–	2,812

Financ

ial statements

Notes to the ﬁnancial statements

398

Standard Chartered

– Annual Report 2023

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.

	2023
			Net amounts	Related amount not offset
	Gross amounts		of ﬁnancial	in the balance sheet
	of recognised	Impact of	instruments
	ﬁnancial	offset in the	presented in the	Financ ial	Financ ial
	instruments	balance sheet	balance sheet	instruments	collateral	Net amount
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Assets
Derivat ive ﬁnancial instruments	99,929	(49,495)	50,434	(39,293)	(8,440)	2,701
Reverse repurchase agreements and
other sim ilar secured lend ing	109,413	(11,832)	97,581	–	(97,581)	–
At 31 December 2023	209,342	(61,327)	148,015	(39,293)	(106,021)	2,701
Liab il it ies
Derivat ive ﬁnancial instruments	105,556	(49,495)	56,061	(39,293)	(10,337)	6,431
Repurchase agreements and other
sim ilar secured borrow ing	65,373	(11,832)	53,541	–	(53,541)	–
At 31 December 2023	170,929	(61,327)	109,602	(39,293)	(63,878)	6,431

	2022
			Net amounts	Related amount not offset
	Gross amounts		of ﬁnancial	in the balance sheet
	of recognised	Impact of	instruments
	ﬁnancial	offset in the	presented in the	Financ ial	Financ ial
	instruments	balance sheet	balance sheet	instruments	collateral	Net amount
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
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 il it ies
Derivat ive ﬁnancial instruments	126,944	(57,082)	69,862	(50,133)	(12,515)	7,214
Repurchase agreements and other sim ilar
secured borrowing	69,738	(15,924)	53,814	–	(53,814)	–
At 31 December 2022	196,682	(73,006)	123,676	(50,133)	(66,329)	7,214

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

Financ

ial statements

Standard Chartered

– Annual Report 2023

399

13. Financ

ial

instruments

continued

Financ

ial l

iab

ies des

ignated at fair value through proﬁt or loss

	2023	2022
	$mill ion	$mill ion
Carrying balance aggregate fair value	69,551	73,027
Amount contractually obliged to repay at maturity	71,240	74,138
Difference between aggregate fair value and contractually obliged to repay at maturity	(1,689)	(1,111)
Cumulative change in fair value accredited to credit risk difference	156	(56)

The net fair value loss on ﬁnanc

ial l

iab

ies des

ignated at fair value through proﬁt or loss was $2,649 mill

ion for the year

(31 December 2022: net loss of $677 mill

ion).

Further details of the Group’s own credit adjustment (OCA) valuation technique is described later in this Note.

Valuation of ﬁnanc

ial

instruments

The Valuation Methodology function is responsible for independent price verif

icat

ion, oversight of fair value and appropriate

value adjustments and escalation of valuation issues. Independent price verif

icat

ion is the process of determin

ing that the

valuations incorporated into the ﬁnanc

ial statements are val

idated independent of the business area responsible for the

product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the ﬁnanc

ial

instruments

are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the ﬁnanc

ial

statements. The market data used for price verif

icat

ion (PV) may include data sourced from recent trade data involv

ing

external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pric

ing prov

iders. The Valuation

Methodology function performs an ongoing review of the market data sources that are used as part of the PV and fair value

processes which are formally documented on a semi-annual basis detail

ing the su

itab

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 400).

•

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 407).

•

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.

Financ

ial statements

Notes to the ﬁnancial statements

400

Standard Chartered

– Annual Report 2023

13. Financ

ial

instruments

continued

Valuation techniques

Refer to the fair value hierarchy explanation – Level 1, 2 and 3 (page 402)

•

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

if there are sign

iﬁcant valuat

ion input parameters which are unobservable in the market, such as products where the

performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity

options based on the performance of two or more underlying ind

ices and

interest rate products with quanto payouts.

In most cases these unobservable correlation parameters cannot be impl

ied from the market, and methods such as

histor

ical analys

is 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 matur

ity

Financ

ial statements

Standard Chartered

– Annual Report 2023

401

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 derived from proxy 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 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:

		Movement			Movement
	01.01.23	during the year	31.12.23	01.01.22	during the year	31.12.22
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Bid-offer valuation adjustment	118	(3)	115	101	17	118
Credit valuation adjustment	171	(52)	119	165	6	171
Debit valuation adjustment	(112)	(17)	(129)	(70)	(42)	(112)
Model valuation adjustment	3	1	4	5	(2)	3
Funding valuation adjustment	46	(13)	33	–	46	46
Other fair value adjustments	23	2	25	20	3	23
Total	249	(82)	167	221	28	249
Income deferrals
Day 1 and other deferrals	186	(77)	109	147	39	186
Total	186	(77)	109	147	39	186

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.

Financ

ial statements

Notes to the ﬁnancial statements

402

Standard Chartered

– Annual Report 2023

13. Financ

ial

instruments

continued

•

Debit valuation adjustment (DVA):

The Group calculates DVA adjustments on its derivat

ive l

iab

ies to reﬂect changes

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

pric

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 with 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.

Fair value hierarchy – ﬁnanc

ial

instruments held at fair value

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.

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.

Financ

ial statements

Standard Chartered

– Annual Report 2023

403

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:

	Level 1	Level 2	Level 3	Total
Assets	$mill ion	$mill ion	$mill ion	$mill ion
Financ ial instruments held at fair value through proﬁt or loss
Loans and advances to banks	–	2,265	–	2,265
Loans and advances to customers	–	5,252	1,960	7,212
Reverse repurchase agreements and other sim ilar secured lend ing	–	79,484	2,363	81,847
Debt securit ies and other el ig ible b ills	27,055	24,635	1,262	52,952
Of which:
Issued by central banks & governments	23,465	6,557	–	30,022
Issued by corporates other than ﬁnancial inst itut ions 1	4	4,062	346	4,412
Issued by ﬁnancial inst itut ions 1	3,586	14,016	916	18,518
Equity shares	2,386	370	184	2,940
Derivat ive ﬁnancial instruments	954	49,400	80	50,434
Of which:
Foreign exchange	129	42,414	25	42,568
Interest rate	37	6,293	6	6,336
Credit	–	438	47	485
Equity and stock index options	–	73	2	75
Commodity	788	182	–	970
Investment securit ies
Debt securit ies and other el ig ible b ills	55,060	48,196	72	103,328
Of which:
Issued by central banks & governments	47,225	18,983	51	66,259
Issued by corporates other than ﬁnancial inst itut ions 1	820	3,236	–	4,056
Issued by ﬁnancial inst itut ions 1	7,015	25,977	21	33,013
Equity shares	199	6	787	992
Other assets	–	–	6	6
Total ﬁnancial assets at 31 December 2023	85,654	209,608	6,714	301,976
Liab il it ies
Financ ial instruments held at fair value through proﬁt or loss
Deposits by banks	–	1,560	334	1,894
Customer accounts	–	15,970	1,278	17,248
Repurchase agreements and other sim ilar secured borrow ing	–	41,283	–	41,283
Debt securit ies in issue	–	9,776	1,041	10,817
Short posit ions	7,152	4,591	103	11,846
Derivat ive ﬁnancial instruments	749	55,116	196	56,061
Of which:
Foreign exchange	122	45,314	10	45,446
Interest rate	46	8,262	5	8,313
Credit	–	945	162	1,107
Equity and stock index options	–	147	19	166
Commodity	581	448	–	1,029
Other liab il it ies	–	–	8	8
Total ﬁnancial l iab il it ies at 31 December 2023	7,901	128,296	2,960	139,157

Includes covered bonds of $7,509 mill

ion, secur

ies

issued by Multilateral Development Banks/International Organisat

ions of $24,192 m

ill

ion and State-owned

agencies and development banks of $7,564 mill

ion

The fair value of ﬁnanc

ial assets and ﬁnancial l

iab

ies class

ied as Level 2

in the fair value hierarchy that are subject to

complex modelling techniques is $940 mill

ion and $288 m

ill

ion respect

ively.

There were no sign

iﬁcant changes to valuat

ion or levelling approaches during the year 31 December 2023.

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 2023.

Financ

ial statements

Notes to the ﬁnancial statements

404

Standard Chartered

– Annual Report 2023

13. Financ

ial

instruments

continued

	Level 1	Level 2	Level 3	Total
Assets	$mill ion	$mill ion	$mill ion	$mill ion
Financ ial instruments held at fair value through proﬁt or loss
Loans and advances to banks	–	955	21	976
Loans and advances to customers	–	4,741	1,805	6,546
Reverse repurchase agreements and other sim ilar secured lend ing	3	62,490	1,998	64,491
Debt securit ies and other el ig 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 ions 1	91	3,452	517	4,060
Issued by ﬁnancial inst itut ions 1	525	6,521	636	7,682
Equity shares	3,024	24	182	3,230
Derivat ive ﬁnancial instruments	892	62,781	44	63,717
Of which:
Foreign exchange	139	54,020	13	54,172
Interest rate	33	7,351	28	7,412
Credit	–	410	1	411
Equity and stock index options	–	98	2	100
Commodity	720	902	–	1,622
Investment securit ies
Debt securit ies and other el ig 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	1,775	4,045	–	5,820
Issued by ﬁnancial inst itut ions 1	9,475	29,309	–	38,784
Equity shares	146	7	655	808
Other assets	–	–	7	7
Total ﬁnancial assets at 31 December 2022²	75,168	201,230	5,865	282,263
Liab il it 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	40	6,847
Derivat ive ﬁnancial instruments	642	69,099	121	69,862
Of which:
Foreign exchange	101	56,710	12	56,823
Interest rate	29	10,020	12	10,061
Credit	–	899	42	941
Equity and stock index options	–	191	55	246
Commodity	512	1,279	–	1,791
Other liab il it ies	–	–	6	6
Total ﬁnancial l iab il it ies 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 ﬁnanc

ial assets and ﬁnancial l

iab

ies class

ied as Level 2

in the fair value hierarchy that are subject to

complex modelling techniques is $888 mill

ion and $209 m

ill

ion respect

ively.

Financ

ial statements

Standard Chartered

– Annual Report 2023

405

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.

		Fair value
	Carrying value	Level 1	Level 2	Level 3	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Assets
Cash and balances at central banks¹	69,905	–	69,905	–	69,905
Loans and advances to banks	44,977	–	44,921	–	44,921
of which – reverse repurchase agreements and other
sim ilar secured lend ing	1,738	–	1,738	–	1,738
Loans and advances to customers	286,975	–	53,472	226,211	279,683
of which – reverse repurchase agreements and other
sim ilar secured lend ing	13,996	–	13,827	169	13,996
Investment securit ies²	56,935	–	54,419	33	54,452
Other assets¹	38,140	–	38,140	–	38,140
Assets held for sale	701	101	541	59	701
At 31 December 2023	497,633	101	261,398	226,303	487,802
Liab il it ies
Deposits by banks	28,030	–	28,086	–	28,086
Customer accounts	469,418	–	460,224	–	460,224
Repurchase agreements and other sim ilar secured
borrowing	12,258	–	12,258	–	12,258
Debt securit ies in issue	62,546	31,255	30,859	–	62,114
Subordinated liab il it ies and other borrowed funds	12,036	11,119	336	–	11,455
Other liab il it ies¹	38,663	–	38,663	–	38,663
Liab il it ies held for sale	726	54	672	–	726
At 31 December 2023	623,677	42,428	571,098	–	613,526

		Fair value
	Carrying value	Level 1	Level 2	Level 3	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$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	25	56,469
Other assets¹	39,295	–	39,295	–	39,295
Assets held for sale	1,388	344	946	98	1,388
At 31 December 2022	508,826	344	253,099	251,683	505,126
Liab il it 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 il it ies and other borrowed funds	13,715	12,445	385	–	12,830
Other liab il it ies¹	42,915	–	42,914	1	42,915
Liab il it ies held for sale	1,230	398	832	–	1,230
At 31 December 2022	611,676	37,467	572,865	1	610,333

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 $19,422 mill

ion at 31 December 2023 and $17,943 m

ill

ion at 31 December 2022

Financ

ial statements

Notes to the ﬁnancial statements

406

Standard Chartered

– Annual Report 2023

13. Financ

ial

instruments

continued

The Group has changed its method of determin

ing the cost of

its portfolio of Investment Securit

ies held at amort

ised cost and

Debt securit

ies and other el

ible b

ills, other than those included with

in ﬁnancial

instruments held at fair value through proﬁt or

loss, from the weighted average cost method to the ﬁrst-in-ﬁrst-out method. This change in accounting policy will affect the

calculation of gains or losses on derecognit

ion of such

instruments and the determinat

ion of the

ial credit risk of these

instruments, to better align with the IFRS 9 requirements for recognis

ing and measur

ing impa

irment losses. The change was

made prospectively for certain but not all securit

ies and transact

ions. It is impract

icable for the Group to determ

ine the impact

of this approach for each security and each transaction that was executed in previous periods.

Loans and advances to customers by client segment¹

	2023
		Carrying value			Fair value
		Stage 1 and			Stage 1 and
	Stage 3	stage 2	Total	Stage 3	stage 2	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Corporate, Commercial &
Institut ional Bank ing	1,975	128,430	130,405	1,910	125,841	127,751
Consumer, Private & Business Banking	724	125,335	126,059	721	120,701	121,422
Ventures	–	1,033	1,033	–	1,032	1,032
Central & other items	209	29,269	29,478	209	29,269	29,478
At 31 December 2023	2,908	284,067	286,975	2,840	276,843	279,683

	2022
		Carrying value			Fair value
		Stage 1 and			Stage 1 and
	Stage 3	stage 2	Total	Stage 3	stage 2	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$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	698	–	696	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

Loans and advances includes reverse repurchase agreements and other sim

ilar secured lend

ing: carrying value $13,996 mill

ion and fa

ir value $13,996 mill

ion (31

December 2022: $24,498 mill

ion and $24,638 m

ill

ion respect

ively)

Financ

ial statements

Standard Chartered

– Annual Report 2023

407

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:

	Value as at
	31 December 2023
	Assets	Liab il it ies	Princ ipal valuat ion	Sign iﬁcant unobservable		Weighted
Instrument	$mill ion	$mill ion	technique	inputs	Range 1	average 2
Loans and advances to	1,960	–	Discounted cash ﬂows	Price/yield	1.7% – 100%	12.0%
customers				Credit spreads	0.1% – 1.0%	0.6%
Reverse repurchase agreements	2,363	–	Discounted cash ﬂows	Repo curve	5.1% – 7.6%	6.3%
and other sim ilar secured lend ing				Price/yield	(2.7)% – 10.3%	6.0%
Debt securit ies, alternat ive tier	1,283	–	Discounted cash ﬂows	Price/yield	(14.0)% – 25.8%	10.1%
one and other elig ible secur it ies				Recovery rates	0.1% – 1.0%	0.2%
			Internal pric ing model	Equity-Equity correlation	44.1% – 100%	80.7%
				Equity-FX correlation	(35.9)% – 45.5%	14.2%
Government bonds and	51	–	Discounted cash ﬂows	Price/yield	17.7% – 21.8%	20.6%
treasury bills
Equity shares (includes private	971	–	Comparable	EV/EBITDA multiples	13.8x – 15.6x	14.9x
equity investments)			pric ing/y ield	EV/Revenue multiples	9.3x – 30.9x	15.8x
				P/E multiples	10.6x – 51.8x	45.7x
				P/B multiples	0.3x – 2.7x	1.6x
				P/S multiples	0.2x – 1.6x	0.3x
				Liqu id ity discount	7.5% – 20.0%	15.1%
			Discounted cash ﬂows	Discount rates	9.2% – 35.6%	17.0%
			Option pric ing model	Equity value based on	8.4x – 42.5x	27.5x
				EV/Revenue multiples
				Equity value based on	3.1x – 3.1x	3.1x
				EV/EBITDA multiples
				Equity value based on	21.0% – 65.0%	30.1%
				volatil ity
Other assets	6	–	NAV	N/A	N/A	N/A
Derivat ive ﬁnancial instruments
of which:
Foreign exchange	25	10	Option pric ing model	Foreign exchange	0.5% – 51%	31.8%
				option impl ied volat il ity
			Discounted cash ﬂows	Interest rate curves	3.6% – 5.8%	3.8%
				Foreign exchange	0.6% – 64.2%	12.8%
				curves
Interest rate	6	5	Discounted cash ﬂows	Interest rate curves	3.6% – 8.6%	5.0%
Credit	47	162	Discounted cash ﬂows	Credit spreads	1.0% – 1.0%	1.0%
				Price/yield	1.7% – 16.3%	8.6%
Equity and stock index	2	19	Internal pric ing model	Equity-Equity correlation	44.1% – 100%	80.7%
				Equity-FX correlation	(35.9)% – 45.5%	14.2%
Deposits by banks	–	334	Discounted cash ﬂows	Credit spreads	0.1% – 3.4%	1.9%
Customer accounts	–	1,278	Discounted cash ﬂows	Credit spreads	1.0% – 2.0%	1.2%
				Interest rate curves	2.9% – 8.6%	6.1%
				Price/yield	4.8% – 15.2%	9.9%
			Internal pric ing model	Equity-Equity correlation	44.1% – 100%	80.7%
				Equity-FX correlation	(35.9)% – 45.5%	14.2%
Debt securit ies in issue	–	1,041	Discounted cash ﬂows	Credit spreads	0.3% – 1.6%	1.1%
				Price/yield	6.6% – 20.9%	17.9%
				Interest rate curves	2.9% – 5.3%	4.4%
			Internal pric ing model	Equity-Equity correlation	44.1% – 100%	80.7%
				Equity-FX correlation	(35.9)% – 45.5%	14.2%
				Bond option impl ied	2.9% – 5.3%	4.4%
				volatil ity
Short posit ions	–	103	Discounted cash ﬂows	Price/yield	7.1% – 7.1%	7.1%
Other liab il it ies	–	8	Comparable	EV/EBITDA multiples	5.8x – 11.2x	8.5x
			pric ing/y ield
Total	6,714	2,960

The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group’s Level 3 ﬁnanc

ial

instruments as

at 31 December 2023. The ranges of values used are reﬂective of the underlying characterist

ics of these Level 3 ﬁnancial

instruments based on the market

condit

ions at the balance sheet date. However, these ranges of values may not represent the uncerta

inty in fair value measurements of the Group’s Level 3

ﬁnancial

instruments

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 prov

ided 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

Financ

ial statements

Notes to the ﬁnancial statements

408

Standard Chartered

– Annual Report 2023

13. Financ

ial

instruments

continued

	Value as at
	31 December 2022
	Assets	Liab il it ies	Princ ipal valuat ion	Sign iﬁcant unobservable		Weighted
Instrument	$mill ion	$mill ion	technique	inputs	Range 1	average 2
Loans and advances to banks	21	–	Discounted cash ﬂows	Price/yield	N/A	N/A
				Credit spreads	2.9%	2.9%
Loans and advances	1,805	–	Discounted cash ﬂows	Price/yield	0.3% – 18.2%	5.3%
to customers				Recovery rates	5.0% – 100%	90.5%
Reverse repurchase	1,998	–	Discounted cash ﬂows	Repo curve	2.3% – 8.0%	6.2%
agreements and other sim ilar
secured lending				Price/yield	1.9%-7.2%	6.0%
Debt securit ies, alternat ive tier	1,152	–	Discounted cash ﬂows	Price/yield	3.1%–48.5%	7.1%
one and other elig ible secur it ies				Recovery rates	0.0% – 1.0%	0.2%
Government bonds and	–	–	Discounted cash ﬂows	Price/yield	N/A	N/A
treasury bills
Asset-backed securit ies	1	–	Discounted cash ﬂows	Price/yield	6.8%	6.8%
Equity shares (includes private	837	–	Comparable pric ing/	EV/EBITDA multiples	7.0x – 13.1x	11.0x
equity investments)			yield	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 id 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	4.8x – 76.1x	32.9x
				EV/Revenue multiples
				Equity value based on	2.6x	2.6x
				EV/EBITDA multiples
				Equity value based on	60.0%	60.0%
				volatil ity
Other assets	7	–	NAV	N/A	N/A	N/A
Derivat ive ﬁnancial instruments
of which:
Foreign exchange	13	12	Option pric ing model	Foreign exchange	(21.0)% – 21.0%	(2.7)%
				option impl ied volat il ity
			Discounted cash ﬂows	Foreign exchange	(4.6)% – 81.8%	15.9%
				curves
Interest rate	28	12	Discounted cash ﬂows	Interest rate curves	(2.1)% – 50.2%	10.6%
			Option pric ing model	Bond option impl ied	N/A	N/A
				volatil ity
Credit	1	42	Discounted cash ﬂows	Credit spreads	0.1% – 2.3%	1.4%
				Price/yield	7.2% – 9.7%	7.2%
Equity and stock index	2	55	Internal pric ing model	Equity-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%	6.0%
Customer accounts	–	972	Discounted cash ﬂows	Credit spreads	0.9% – 19.1%	10.3%
			Internal pric ing model	Equity-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	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 ion	–	40	Discounted cash ﬂows	Price/yield	6.8%	6.8%
Other liab il it ies	–	6	Comparable pric ing/	EV/EBITDA multiples	4.2x – 9.0x	6.1x
			yield
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 uncerta

inty in fair value measurements of the Group’s Level 3

ﬁnancial

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 prov

ided 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

Financ

ial statements

Standard Chartered

– Annual Report 2023

409

13. Financ

ial

instruments

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 measures 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 rates

is the expectation of the rate of return resulting from the liqu

idat

ion of a particular loan. As the probabil

ity of

default increases for a given instrument, the valuation of that instrument will increas

ingly reﬂect

its expected recovery level

assuming default. An increase in the recovery rate, in isolat

ion, would result

in a favourable movement in the fair value of

the loan

•

Repo curve

is the term structure of repo rates on repos and reverse repos at a particular point in time

•

Volatil

ity

represents an estimate of how much a particular instrument, parameter or index will change in value over time.

Generally, the higher the volatil

ity, the more expens

ive the option will be.

Financ

ial statements

Notes to the ﬁnancial statements

410

Standard Chartered

– Annual Report 2023

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.

	2023
	Held at fair value through proﬁt or loss							Investment securit ies
			Reverse
			repurchase	Debt				Debt
			agreements	securit ies,				securit ies,
			and other	alternative				alternative
	Loans and	Loans and	sim ilar	tier one and			Derivat ive	tier one
	advances	advances	secured	other	Equity	Other	ﬁnancial	and other	Equity
	to banks	to customers	lending	elig ible b ills	shares	Assets	instruments	elig ible b ills	shares	Total
Assets	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
At 1 January 2023	21	1,805	1,998	1,153	182	7	44	–	655	5,865
Total (losses)/gains
recognised in
income statement	–	(35)	(107)	(292)	4	(1)	12	–	–	(419)
Net interest income	–	–	–	–	–	–	–	–	–	–
Net trading income	–	(35)	(107)	(304)	5	–	12	–	–	(429)
Other operating income	–	–	–	12	(1)	(1)	–	–	–	10
Total (losses)/gains
recognised in other
comprehensive income
(OCI)	–	–	–	–	–	–	–	(1)	101	100
Fair value through
OCI reserve	–	–	–	–	–	–	–	–	108	108
Exchange difference	–	–	–	–	–	–	–	(1)	(7)	(8)
Purchases	22	1,784	5,902	1,082	8	–	189	21	61	9,069
Sales	(22)	(1,133)	(3,942)	(518)	(10)	–	(115)	(23)	(5)	(5,768)
Settlements	–	(442)	(1,488)	(305)	–	–	(25)	–	–	(2,260)

Transfers out 1	(21)	(225)	–	(6)	–	–	(27)	(16)	(32)	(327)

Transfers in 2	–	206	–	148	–	–	2	91	7	454
At 31 December 2023	–	1,960	2,363	1,262	184	6	80	72	787	6,714
Total unrealised (losses)/
gains recognised in
the income statement, with
in net trad ing income,
relating to change in fair
value of assets held at
31 December 2023	–	(3)	3	(1)	4	–	(12)	–	–	(9)

Transfers out includes loans and advances, debt securit

ies, alternat

ive tier one and other elig

ible b

ills, equity shares 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 relates to loans and advances, debt secur

ies, alternat

ive tier one and other elig

ible b

ills, equity shares and derivat

ive ﬁnancial

instruments

where the valuation parameters became unobservable during the year

Financ

ial statements

Standard Chartered

– Annual Report 2023

411

13. Financ

ial

instruments

continued

The table below analyses movements in Level 3 ﬁnanc

ial assets carr

ied at fair value.

	2022
	Held at fair value through proﬁt or loss							Investment securit ies
			Reverse
			repurchase	Debt				Debt
			agreements	securit ies,				securit ies,
			and other	alternative				alternative
	Loans and	Loans and	sim ilar	tier one			Derivat ive	tier one
	advances	advances	secured	and other	Equity	Other	ﬁnancial	and other	Equity
	to banks	to customers	lending	elig ible b ills	shares	Assets	instruments	elig ible b ills	shares	Total
Assets	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
At 1 January 2022	9	1,357	1,566	349	186	26	90	40	493	4,116
Total (losses)/gains
recognised in
income statement	(16)	(132)	2	7	4	–	30	–	–	(105)
Net interest income	–	–	–	–	–	–	–	–	–	–
Net trading income	(16)	(132)	2	7	4	–	30	–	–	(105)
Other operating income	–	–	–	–	–	–	–	–	–	–
Total losses recognised in
other comprehensive
income (OCI)	–	–	–	–	–	–	–	(1)	(8)	(9)
Fair value through
OCI reserve	–	–	–	–	–	–	–	(1)	(1)	(2)
Exchange difference	–	–	–	–	–	–	–	–	(7)	(7)
Purchases	55	1,605	6,438	1,063	2	8	118	–	166	9,455
Sales	(30)	(237)	(5,484)	(342)	(10)	(10)	(99)	–	(6)	(6,218)
Settlements	(19)	(877)	(524)	(1)	–	–	(80)	(39)	–	(1,540)
Transfers out 1	–	(160)	–	–	–	(17)	(29)	–	–	(206)
Transfers in 2	22	249	–	77	–	–	14	–	10	372
At 31 December 2022	21	1,805	1,998	1,153	182	7	44	–	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	–	–	–	–	3	–	(2)	–	–	1

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 relates 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 became unobservable during the year

412

Standard Chartered

– Annual Report 2023

Financ

ial statements

Notes to the ﬁnancial statements

13. Financ

ial

instruments

continued

Level 3 movement tables – ﬁnancial l

iab

ies

	2023
			Debt	Derivat ive
	Deposits	Customer	securit ies	ﬁnancial	Short	Other
	by banks	accounts	in issue	instruments	posit ions	liab il it ies	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
At 1 January 2023	288	972	451	121	40	6	1,878
Total losses/(gains) recognised in income statement
– net trading income	7	(6)	39	(52)	3	3	(6)
Issues	628	1,789	1,489	447	100	–	4,453
Settlements	(585)	(1,491)	(1,218)	(312)	(40)	–	(3,646)
Transfers out 1	(4)	(9)	(85)	(11)	–	(1)	(110)
Transfers in 2	–	23	365	3	–	–	391
At 31 December 2023	334	1,278	1,041	196	103	8	2,960
Total unrealised (gains)/losses recognised in the
income statement, with in net trad ing income,
relating to change in fair value of liab il it ies held
at 31 December 2023	–	(21)	6	(47)	–	–	(62)

	2022
			Debt	Derivat ive
	Deposits	Customer	securit ies	ﬁnancial	Short	Other
	by banks	accounts	in issue	instruments	posit ions	liab il it ies	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
At 1 January 2022	283	454	821	94	–	1	1,653
Total (gains)/losses recognised in income statement
– net trading income	(37)	(82)	(158)	155	(3)	5	(120)
Issues	447	1,818	815	179	140	–	3,399
Settlements	(400)	(1,266)	(1,066)	(291)	(97)	–	(3,120)
Transfers out 1	(5)	–	(38)	(23)	–	–	(66)
Transfers in 2	–	48	77	7	–	–	132
At 31 December 2022	288	972	451	121	40	6	1,878
Total unrealised gains recognised in the income
statement, with in net trad ing income, relating
to change in fair value of liab il it ies held at
31 December 2022	(1)	(17)	(7)	(3)	–	–	(28)

Transfers out during the year primar

ily relates to bank depos

its, customer accounts debt securit

ies

in issue, other liab

ies and der

ivat

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 relates to der

ivat

ive ﬁnancial

instruments, customer accounts and debt securit

ies

in issue where the valuation parameters

become unobservable during the year

413

Standard Chartered

– Annual Report 2023

Financ

ial 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			Held at fair value through other comprehensive income
		Favourable	Unfavourable		Favourable	Unfavourable
	Net exposure	changes	changes	Net exposure	changes	changes
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Financ ial instruments held at fair value
Loans and advances	1,960	1,985	1,918	–	–	–
Reverse repurchase agreements and
other sim ilar secured lend ing	2,363	2,390	2,336	–	–	–
Debt securit ies, alternat ive tier one and
other elig ible b ills	1,262	1,309	1,193	72	78	66
Equity shares	184	202	166	787	866	708
Other assets	6	7	5	–	–	–
Derivat ive ﬁnancial instruments	(116)	(75)	(157)	–	–	–
Customers accounts	(1,278)	(1,191)	(1,365)	–	–	–
Deposits by banks	(334)	(334)	(334)	–	–	–
Short posit ions	(103)	(101)	(105)	–	–	–
Debt securit ies in issue	(1,041)	(966)	(1,115)	–	–	–
Other liab il it ies	(8)	(7)	(9)	–	–	–
At 31 December 2023	2,895	3,219	2,533	859	944	774
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	1	1	1	–	–	–
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	7	8	6	–	–	–
Derivat ive ﬁnancial instruments	(77)	(44)	(109)	–	–	–
Customers accounts	(972)	(934)	(1,010)	–	–	–
Deposits by banks	(288)	(283)	(293)	–	–	–
Short posit ions	(40)	(39)	(41)	–	–	–
Debt securit ies in issue	(451)	(419)	(482)	–	–	–
Other liab il it ies	(6)	(5)	(7)	–	–	–
At 31 December 2022	3,332	3,517	3,090	655	715	595

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.

		2023	2022
Financ ial instruments	Fair value changes	$mill ion	$mill ion
Held at fair value through proﬁt or loss	Possible increase	324	185
	Possible decrease	(362)	(242)
Fair value through other comprehensive income	Possible increase	85	60
	Possible decrease	(85)	(60)

414

Standard Chartered

– Annual Report 2023

Financ

ial statements

Notes to the ﬁnancial statements

14. Derivat

ive ﬁnancial

instruments

Accounting policy

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 applied

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 assesses, both at hedge incept

ion and on a quarterly bas

is, whether the derivat

ives des

ignated in hedge

relationsh

ips are h

ighly effective in offsetting changes in fair values or cash ﬂows of hedged items. Hedges are considered

to be highly effective if all the following criter

ia are met:

•

At incept

ion of the hedge and throughout

its life, the hedge is prospectively expected to be highly effective in achiev

ing

offsetting changes in fair value or cash ﬂows attributable to the hedged risk

•

Prospective and retrospective effectiveness of the hedge should be with

in a range of 80–125%. Th

is is tested using

regression analysis

•

The regression co-efﬁc

ient (R squared), wh

ich measures the correlation between the variables in the regression, is at

least 80%.

In the case of the hedge of a forecast transaction, the transaction must have a high probabil

ity of occurr

ing and must

present an exposure to variat

ions

in cash ﬂows that are expected to affect reported proﬁt or loss.

Fair value hedge

Changes in the fair value of derivat

ives that are des

ignated and qualify as fair value hedging instruments are recorded in

net trading income, together with any changes in the fair value of the hedged asset or liab

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.

Should the Group consider the hedged future cash ﬂows are no longer expected to occur due to reasons, the cumulative gain

or loss will be immed

iately reclass

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.

415

Standard Chartered

– Annual Report 2023

Financ

ial statements

14. Derivat

ive ﬁnancial

instruments

continued

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.

	2023			2022
	Notional			Notional
	princ ipal			princ ipal
	amounts	Assets	Liab il it ies	amounts	Assets	Liab il it ies
Derivat ives	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Foreign exchange derivat ive contracts:
Forward foreign exchange contracts	3,628,067	30,897	32,601	3,154,440	38,162	39,376
Currency swaps and options	1,145,702	11,671	12,845	1,168,026	16,010	17,447
	4,773,769	42,568	45,446	4,322,466	54,172	56,823
Interest rate derivat ive contracts:
Swaps	4,841,616	53,735	55,241	3,516,310	62,001	64,005
Forward rate agreements and options	313,253	2,057	2,520	98,465	2,214	2,880
	5,154,869	55,792	57,761	3,614,775	64,215	66,885
Exchange traded futures and options	325,051	39	47	324,702	279	258
Credit derivat ive contracts	281,130	485	1,107	249,082	411	941
Equity and stock index options	8,671	75	166	6,788	100	246
Commodity derivat ive contracts	117,436	970	1,029	90,952	1,622	1,791
Gross total derivat ives	10,660,926	99,929	105,556	8,608,765	120,799	126,944
Offset	–	(49,495)	(49,495)	–	(57,082)	(57,082)
Total derivat ives	10,660,926	50,434	56,061	8,608,765	63,717	69,862

The Group lim

its exposure to cred

it losses in the event of default by entering into master netting agreements with certain

market counterparties. As required by IAS 32, exposures are only presented net in these accounts where they are subject to

legal right of offset and intended to be settled net in the ordinary course of business.

The Group applies balance sheet offsetting only in the instance where we are able to demonstrate legal enforceabil

ity of the

right to offset (e.g. via legal opin

ion) and the ab

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

ives

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 286).

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:

	2023			2022
	Notional			Notional
	princ ipal			princ ipal
	amounts	Assets	Liab il it ies	amounts	Assets	Liab il it ies
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Derivat ives des ignated as
fair value hedges:
Interest rate swaps	69,347	1,264	2,397	80,760	2,438	2,939
Currency swaps	115	10	6	1,273	16	48
	69,462	1,274	2,403	82,033	2,454	2,987
Derivat ives des ignated as
cash ﬂow hedges:
Interest rate swaps	41,834	184	537	31,977	100	671
Forward foreign exchange contracts	12,071	420	183	11,987	99	385
Currency swaps	14,321	191	150	11,787	86	362
	68,226	795	870	55,751	285	1,418
Derivat ives des ignated as net
investment hedges:
Forward foreign exchange contracts	15,436	32	41	14,576	120	141
Total derivat ives held for hedg ing	153,124	2,101	3,314	152,360	2,859	4,546

416

Standard Chartered

– Annual Report 2023

Financ

ial statements

Notes to the ﬁnancial statements

14. Derivat

ive ﬁnancial

instruments

continued

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 and interest cashﬂows mismatch between

the hedging instruments and underlying hedged items. The amortisat

ion of fa

ir value hedge adjustments for hedged items no

longer designated is recognised in net interest income.

At 31 December 2023 the Group held the following interest rate and cross- currency swaps as hedging instruments in fair value

hedges of interest and currency risk.

Hedging instruments and ineffect

iveness

	2023
				Change in fair
				value used to	Ineffectiveness
		Carrying amount
				calculate hedge	recognised in

	Notional	Asset	Liab il ity	ineffect iveness 2	proﬁt or loss

Interest rate 1	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Interest rate swaps – debt securit ies/subord inated
notes issued	45,455	381	2,267	271	(4)
Interest rate swaps – loans and advances	1,203	26	1	(20)	–
Interest rate swaps – debt securit ies and other
elig ible b ills	22,689	857	129	(459)	(17)

Interest and currency risk 1
Cross-currency swaps – debt securit ies/subord inated
notes issued	70	–	6	(2)	–
Cross-currency swaps – debt securit ies and other
elig ible b ills	45	10	–	11	–
Total at 31 December 2023	69,462	1,274	2,403	(199)	(21)

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

net trading income

This represents a (loss)/gains change in fair value used for calculating hedge ineffect

iveness

	2022
				Change in fair value used to	Ineffectiveness recognised in
				calculate hedge	proﬁt or loss
	Carrying amount			ineffect iveness 2	$mill ion
				$mill ion
	Notional	Asset	Liab il ity

Interest rate 1	$mill ion	$mill ion	$mill ion
Interest rate swaps – debt securit ies/subord inated
notes issued	41,772	112	2,914	(3,020)	(7)
Interest rate swaps – loans and advances	1,117	68	–	53	(1)
Interest rate swaps – debt securit ies and other
elig ible b ills	37,871	2,258	25	3,127	13
Interest and currency risk 1
Cross-currency swaps – debt securit ies/subord inated
notes issued	72	–	4	(260)	12
Cross-currency swaps – debt securit ies and other
elig ible b ills	1,201	16	44	(9)	4
Total at 31 December 2022	82,033	2,454	2,987	(109)	21

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)/gains change in fair value used for calculating hedge ineffect

iveness

417

Standard Chartered

– Annual Report 2023

Financ

ial statements

14. Derivat

ive ﬁnancial

instruments

continued

Hedged items in fair value hedges

	2023
						Cumulative
						balance of
			Accumulated amount of fair value hedge adjustments included in the carrying amount		Change in the value used for calculating	fair value adjustments from de- designated
	Carrying amount				hedge	hedge
	Asset	Liab il ity	Asset	Liab il ity	ineffect iveness 1	relationsh ips 2
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Debt securit ies /subord inated
notes issued	–	46,156	–	1,761	(273)	360
Debt securit ies and other el ig ible b ills	21,473	–	(553)	–	431	744
Loans and advances to customers	1,183	–	(20)	–	20	13
Total at 31 December 2023	22,656	46,156	(573)	1,761	178	1,117

			2022
						Cumulative
						balance of
						fair value
	Carrying amount		Accumulated amount of fair value hedge adjustments included in the carrying amount		Change in fair value used for calculating hedge	adjustments designated from de- hedge
	Asset	Liab il ity	Asset	Liab il ity	ineffect iveness 1	relationsh ips 2
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Debt securit ies /subord inated notes issued	–	42,702	–	2,756	3,285	414
Debt securit ies and other el ig ible b ills	36,028	–	(2,075)	–	(3,101)	441
Loans and advances to customers	1,051	–	(65)	–	(54)	1
Total at 31 December 2022	37,079	42,702	(2,140)	2,756	130	856

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

Income statement impact of fair value hedges

	2023	2022
	Income/	Income/
	(expense)	(expense)
	$mill ion	$mill ion
Change in fair value of hedging instruments	(199)	(109)
Change in fair value of hedged risks attributable to hedged items	178	130
Net ineffect iveness (loss)/ga in to net trading income	(21)	21
Amortisat ion ga in to net interest income	232	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). Hedge ineffect

iveness for cash ﬂow hedges

is mainly driven by payment frequency mismatch between the hedging

instrument and the underlying hedged item.

The hedged risk is determined as the variab

ity of future cash ﬂows aris

ing from changes

in the designated benchmark interest

and/or foreign exchange rates.

Financ

ial statements

Notes to the ﬁnancial statements

418

Standard Chartered

– Annual Report 2023

14. Derivat

ive ﬁnancial

instruments

continued

Hedging instruments and ineffect

iveness

			2023
				Change in		Ineffectiveness	Amount
				fair value used	Gain	gain	reclassif ied
		Carrying amount		to calculate hedge	recognised	recognised in net trading	to net trading from reserves
	Notional	Asset	Liab il ity	ineffect iveness 1	in OCI	income	income
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Interest rate risk
Interest rate swaps	41,834	184	537	612	609	3	–
Currency risk
Forward foreign exchange
contract	12,071	420	183	104	103	1	–
Cross-currency swaps	14,321	191	150	185	183	2	–
Total as at 31 December 2023	68,226	795	870	901	895	6	–

	2022
				Change in		Ineffectiveness	Amount
				fair value used		(loss)	reclassif ied
		Carrying amount		to calculate hedge	(Loss)/gain recognised	recognised in net trading	to net trading from reserves
	Notional	Asset	Liab il ity	ineffect iveness 1	in OCI	income	income
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Interest rate risk
Interest rate swaps	31,977	100	671	(533)	(531)	(2)	–
Currency risk
Forward foreign exchange
contract	11,987	99	385	(141)	(141)	–	–
Cross-currency swaps	11,787	86	362	421	426	(5)	–
Total as at 31 December 2022	55,751	285	1,418	(253)	(246)	(7)	–

Hedged items in cash ﬂow hedges

	2023
			Cumulative
			balance in the
	Change in		cash ﬂow hedge
	fair value used		reserve from
	for calculating		de-designated
	hedge	Cash ﬂow	hedge
	ineffect iveness 1	hedge reserve	relationsh ips
	$mill ion	$mill ion	$mill ion
Customer accounts	(421)	(114)	136
Debt securit ies and other el ig ible b ills	(98)	(22)	(15)
Loans and advances to customers	(312)	134	–
Intragroup lending currency hedge	(64)	–	–
Intragroup borrowing currency hedge	–	–	–
Total at 31 December 2023	(895)	(2)	121

	2022
			Cumulative
			balance in the
	Change in		cash ﬂow hedge
	fair value used		reserve from
	for calculating		de-designated
	hedge	Cash ﬂow	hedge
	ineffect iveness 1	hedge reserve	relationsh ips
	$mill ion	$mill ion	$mill ion
Customer accounts	244	(444)	108
Debt securit ies and other el ig ible b ills	(165)	(72)	((30)
Loans and advances to customers	315	(191)	(18)
Intragroup lending currency hedge	(135)	(6)	–
Intragroup borrowing currency hedge	(13)	–	–
Total at 31 December 2022	246	(713)	60

This represents a gain/(loss) change in fair value used for calculating hedge ineffect

iveness

Financ

ial statements

Standard Chartered

– Annual Report 2023

419

14. Derivat

ive ﬁnancial

instruments

continued

Impact of cash ﬂow hedges on proﬁt and loss and other comprehensive income

	2023	2022
	Income/	Income/
	(expense)	(expense)
	$mill ion	$mill ion
Cash ﬂow hedge reserve balance as at 1 January	(564)	(34)
Gain/(loss) recognised in other comprehensive income on effective portion of changes in fair value
of hedging instruments	895	(246)
Gain reclassif ied to income statement when hedged item affected net proﬁt	(128)	(373)
Taxation charge relating to cash ﬂow hedges	(112)	89
Cash ﬂow hedge reserve balance as at 31 December	91	(564)

Net investment hedges

Foreign currency exposures arise from investments in subsid

iar

ies that have a different functional currency from that of the

presentation currency of the Group. This risk arises from the ﬂuctuation in spot exchange rates between the functional currency

of the subsid

iar

ies and the Group’s presentation currency, which causes the value of the investment to vary.

The Group’s policy is to hedge these exposures only when not doing so would be expected to have a sign

iﬁcant

impact on the

regulatory ratios of the Group and its banking subsid

iar

ies. The Group uses foreign exchange forwards to manage the effect of

exchange rates on its net investments in foreign subsid

iar

ies.

Hedging instruments and ineffect

iveness

				2023
					Changes in
				Change in	the value of
				fair value used	the hedging		Amount
				to calculate	instrument	Ineffectiveness	reclassif ied
		Carrying amount		hedge	recognised	recognised in	from reserves
	Notional	Asset	Liab il ity	ineffect iveness 1	in OCI	proﬁt or loss	to income
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Derivat ive forward
currency contracts 2	15,436	32	41	215	215	–	–

				2022
					Changes in
				Change in	the value of
				fair value used	the hedging		Amount
		Carrying amount		to calculate	instrument	Ineffectiveness	reclassif ied
				hedge	recognised	recognised in	from reserves
	Notional	Asset	Liab il ity	ineffect iveness 1	in OCI	proﬁt or loss	to income
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Derivat ive forward
currency contracts 2	14,576	120	141	512	512	–	–

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

	2023
			Balances
			remain ing in the
			translation
			reserve from
	Change in the		hedging
	value used for		relationsh ips for
	calculating		which hedge
	hedge	Translation	accounting is no
	ineffect iveness 1	reserve	longer applied
	$mill ion	$mill ion	$mill ion
Net investments	(215)	(9)	–
	2022
			Balances
			remain ing in the
			translation
			reserve from
	Change in the		hedging
	value used for		relationsh ips for
	calculating		which hedge
	hedge	Translation	accounting is no
	ineffect iveness 1	reserve	longer applied
	$mill ion	$mill ion	$mill ion
Net investments	(512)	(21)	–

This represents a gain/(loss) change in fair value used for calculating hedge ineffect

iveness

Financ

ial statements

Notes to the ﬁnancial statements

420

Standard Chartered

– Annual Report 2023

14. Derivat

ive ﬁnancial

instruments

continued

Impact of net investment hedges on other comprehensive income

	2023	2022
	Income/	Income/
	(expense)	(expense)
	$mill ion	$mill ion
Gains recognised in other comprehensive income	215	512

Maturity of hedging instruments

		2023
			More than
			one month
		Less than	and less than	One to	More than
Fair value hedges		one month	one year	ﬁve years	ﬁve years
Interest rate swap
Notional	$mill ion	3,242	9,789	41,545	14,771
Cross-currency swap
Notional	$mill ion	–	115	–	–
Average ﬁxed interest rate (to USD)	GBP	–	1.33%	–	–
	CNH	–	3.17%	–	–
Average exchange rate	GBP/USD	–	0.66	–	–
	CNH/USD	–	6.37	–	–
Cash ﬂow hedges
Interest rate swap
Notional	$mill ion	2,129	27,634	11,664	407
Average ﬁxed interest rate	USD	5.10%	3.45%	4.70%	3.16%
Cross-currency swap
Notional	$mill ion	166	10,794	3,361	–
Average ﬁxed interest rate	HKD	–	4.97%	0.21%	–
	KRO	1.96%	3.58%	0.62%	–
	USD	–	5.64%	–	–
	TWD	(3.68)%	0.77%	0.81%	–
	JPY	–	(0.07)%	(0.05)%	–
Average exchange rate	HKD/USD	–	7.83	7.85	–
	KRO/USD	1,192.20	1,320.69	1,284.82	–
	USD/HKD	–	0.13	–	–
	TWD/USD	30.63	31.53	32.22	–
	JPY/HKD	–	17.86	18.09	–
Forward foreign exchange contracts
Notional	$mill ion	2,194	9,877	–	–
Average exchange rate	BRL/USD	–	5.17	–	–
	TWD/HKD	–	3.81	–	–
	JPY/USD	130.49	136.05	–	–
Net investment hedges
Foreign exchange derivat ives
Notional	$mill ion	15,436	–	–	–
Average exchange rate	CNY/USD	7.12	–	–	–
	KRW/USD	1,283.25	–	–	–
	AED/USD	3.67	–	–	–
	HKD/USD	7.80	–	–	–

Financ

ial statements

Standard Chartered

– Annual Report 2023

421

14. Derivat

ive ﬁnancial

instruments continued

		2022
			More than
			one month
		Less than	and less than	One to	More than
Fair value hedges		one month	one year	ﬁve years	ﬁve years
Interest rate swap
Notional	$mill ion	2,462	8,888	53,225	16,185
Cross-currency swap
Notional	$mill ion	–	1,109	164	–
Average ﬁxed interest rate (to USD)	JPY	–	(0.62)%	–	–
Average exchange rate	JPY/USD	–	138.78	–	–
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	45	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	–	–
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	–	–	–
	HKD/USD	7.83	–	–	–

Interest rate benchmark reform

As at 31 December 2023, there are no derivat

ive

instruments designated in fair value or cash ﬂow hedge accounting

relationsh

ips that were l

inked to IBOR reference rates (31 December 2022: $65,769 mill

ion).

Financ

ial statements

Notes to the ﬁnancial statements

422

Standard Chartered

– Annual Report 2023

15. Loans and advances to banks and customers

Accounting policy

Refer to Note 13 Financ

ial

instruments for the relevant accounting policy.

	2023	2022
	$mill ion	$mill ion
Loans and advances to banks	45,001	39,545
Expected credit loss	(24)	(26)
	44,977	39,519
Loans and advances to customers	292,145	316,107
Expected credit loss	(5,170)	(5,460)
	286,975	310,647
Total loans and advances to banks and customers 1	331,952	350,166

Includes $3.6 bill

ion (31 December 2022: $4.8 b

ill

ion) of assets pledged as collateral. For more

informat

ion, please refer to page 127 of P

illar 3 disclosures

The Group has outstanding resident

ial mortgage loans to Korea res

idents of $17.2 bill

ion (31 December 2022: $19.1 b

ill

ion) and

Hong Kong residents of $32.7 bill

ion (31 December 2022: $35 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 230 to 343).

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.

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.

Reverse repurchase agreements and other sim

ilar secured lend

ing

	2023	2022
	$mill ion	$mill ion
Banks	32,286	24,932
Customers	65,295	65,035
	97,581	89,967
Of which:
Fair value through proﬁt or loss	81,847	64,491
Banks	30,548	23,954
Customers	51,299	40,537
Held at amortised cost	15,734	25,476
Banks	1,738	978
Customers	13,996	24,498

Financ

ial statements

Standard Chartered

– Annual Report 2023

423

16. Reverse repurchase and repurchase agreements includ

ing other s

ilar lend

ing and borrowing

continued

Under reverse repurchase and securit

ies borrow

ing arrangements, the Group obtains securit

ies under usual and customary

terms which permit it to repledge or resell the securit

ies to others. Amounts on such terms are:

	2023	2022
	$mill ion	$mill ion
Securit ies and collateral rece ived (at fair value)	101,935	124,989
Securit ies and collateral wh ich can be repledged or sold (at fair value)	101,845	123,759
Amounts repledged/transferred to others for ﬁnancing act iv it ies, to satisfy liab il it ies under sale and repurchase agreements (at fair value)	34,154	44,628

Repurchase agreements and other sim

ilar secured borrow

ing

	2023	2022
	$mill ion	$mill ion
Banks	5,585	6,968
Customers	47,956	46,846
	53,541	53,814
Of which:
Fair value through proﬁt or loss	41,283	51,706
Banks	4,658	5,737
Customers	36,625	45,969
Held at amortised cost	12,258	2,108
Banks	927	1,231
Customers	11,331	877

The tables below set out the ﬁnancial assets prov

ided as collateral for repurchase and other secured borrowing transactions:

	2023
		Fair value
	Fair value	through other
	through proﬁt	comprehensive		Off-balance
	or loss	income	Amortised cost	sheet	Total
Collateral pledged against repurchase agreements	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
On-balance sheet
Debt securit ies and other el ig ible b ills	4,993	8,157	10,181	–	23,331
Off-balance sheet
Repledged collateral received	–	–	–	34,154	34,154
At 31 December 2023	4,993	8,157	10,181	34,154	57,485
	2022
		Fair value
	Fair value	through other
	through proﬁt	comprehensive		Off-balance
	or loss	income	Amortised cost	sheet	Total
Collateral pledged against repurchase agreements	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
On-balance sheet
Debt securit ies and other el ig ible b ills	2,956	3,630	4,917	–	11,503
Off-balance sheet
Repledged collateral received	–	–	–	44,628	44,628
At 31 December 2022	2,956	3,630	4,917	44,628	56,131

Financ

ial statements

Notes to the ﬁnancial statements

424

Standard Chartered

– Annual Report 2023

17. Goodwill and intang

ible assets

Accounting policy

Goodwill

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 carr

ied at cost less any accumulated impa

irment losses. Ga

ins and losses on the disposal of an entity

include the carrying amount of goodwill relating to the entity sold. Detailed calculations are performed based on forecasting

expected cash ﬂows of the relevant cash-generating units (CGUs) and discount

ing these at an appropr

iate discount rate,

the determinat

ion of wh

ich requires the exercise of judgement. Goodwill is allocated to CGUs for the purpose of impa

irment

testing. CGUs represent the lowest level with

in the Group wh

ich generates 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 425).

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 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 that

is internally generated, judgement is required to determine which costs relate to research

(expensed) and which costs relate to development (capital

ised). Further judgement

is required to determine the technical

feasib

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, includ

ing custom

isat

ion costs related to

implementat

ion of the

SaaS may meet the deﬁnit

ion of an intang

ible asset

in their own right if it is separately ident

iﬁable and control

is established.

These costs are capital

ised

if it is expected to provide the Group with future economic beneﬁts ﬂowing from the underlying

resource and the Group can restrict others from accessing those beneﬁts.

Financ

ial statements

Standard Chartered

– Annual Report 2023

425

17. Goodwill and intang

ible assets

continued

	2023					2022
			Acquired	Computer		Acquired	Computer

	Goodwill	intang ibles	software	Total	Goodwill	intang ibles	software 1	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Cost
At 1 January	2,471	295	5,178	7,944	2,595	457	4,464	7,516
Exchange translation differences	(24)	(12)	21	(15)	(108)	(26)	(22)	(156)
Addit ions	–	–	1,124	1,124	–	–	1,096	1,096
Impairment charge²	–	–	(151)	(151)	(14)	–	(7)	(21)
Disposals and amounts written off	(18)¹	(5)¹	(4)	(27)	–	(136)	(348)	(484)
Classif ied as held for sale	–	–	–	–	(2)	–	(5)	(7)
At 31 December	2,429	278	6,168	8,875	2,471	295	5,178	7,944
Provis ion for amort isat ion
At 1 January	–	276	1,799	2,075	–	437	1,608	2,045
Exchange translation differences	–	(12)	11	(1)	–	(29)	(11)	(40)
Amortisat ion	–	1	625	626	–	4	531	535

Impairment charge 2	–	–	(39)	(39)	–	–	5	5
Disposals and amounts written off	–	–	–	–	–	(136)	(331)	(467)
Classif ied as held for sale	–	–	–	–	–	–	(3)	(3)
At 31 December	–	265	2,396	2,661	–	276	1,799	2,075
Net book value	2,429	13	3,772	6,214	2,471	19	3,379	5,869

Includes disposal of goodwill and other intang

ibles relat

ing to aviat

ion ﬁnance leas

ing business. These were classif

ied as held for sale dur

ing 2023 and sold

during the year

Computer software impa

irment

includes $82.8 mill

ion (2022: n

il) charge relating to write off on SaaS (Software as a Service) applicat

ions cap

ital

ised

previous years

At 31 December 2023, accumulated goodwill impa

irment losses

incurred from 1 January 2005 amounted to $3,331 mill

ion

(31 December 2022: $3,331 mill

ion), of wh

ich Nil mill

ion was recogn

ised in 2023 (31 December 2022: $14 mill

ion).

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 2028. 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 the 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.

	2023			2022
			Long-term			Long-term
		Pre-Tax Discount	forecast GDP		Pre-Tax Discount	forecast GDP
	Goodwill	rates	growth rates	Goodwill	rates	growth rates
Cash-generating unit	$mill ion	per cent	per cent	$mill ion	per cent	per cent
Country CGUs
Asia	1,036			1,032
Hong Kong	357	12.9	1.6	357	12.4	1.7
Taiwan	333	12.4	1.5	333	11.3	1.7
Singapore	346	13.9	2.1	342	12.3	2.3
Africa & Middle East	80			85
Pakistan	31	35.5	3.2	36	30.9	5.9
Bahrain	49	12.4	0.5	49	16.6	0.7
Global CGUs	1,313			1,354
Global Private Banking	83	15.3	1.9	83	14.5	2.0
Corporate, Commercial &
Institut ional Bank ing	1,230	15.7	2.3	1,271	14.7	2.5
	2,429			2,471

Financ

ial statements

Notes to the ﬁnancial statements

426

Standard Chartered

– Annual Report 2023

17. Goodwill and intang

ible assets

continued

The Group has performed sensit

ity analysis on the key assumptions for each CGU’s recoverable amount. Taiwan 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

2023

Sensit

ies

Extreme

Cash-

Downside

downside

GDP

Discount rate

Cash ﬂow

ﬂow

scenario

GDP -1%

DR +1%

Base Case

+1%

-1%

+1%

-1%

+10%

-10%

+20%

-20%

-30%

CF -10%

CF -20%

Head-

Pre-Tax

Head-

Goodwill

room

Discount

room

$mill

ion

$mill

ion

Rate

GDP

$mill

ion

$mill

ion

$mill

ion

$mill

ion

$mill

ion

$mill

ion

$mill

ion

$mill

ion

$mill

ion

$mill

ion

$mill

ion

Taiwan

333

217

12.4%

1.53%

351

112

400

375

532

(97)

(254)

(138)

(267)

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 2023.

For there to be no headroom, the pre-tax discount rate will need to increase by 2.02 per cent. Sim

ilarly, the GDP rates w

ill need

to decrease by 2.36 per cent and cashﬂows would need to decrease by 13.8 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 value

in the

difference 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:

	2023	2022
	$mill ion	$mill ion
Acquired intang ibles compr ise:
Aircraft maintenance	–	5
Brand names	–	1
Customer relationsh ips	1	1
Licenses	12	12
Net book value	13	19

Financ

ial statements

Standard Chartered

– Annual Report 2023

427

18. Property, plant and equipment

Accounting policy

All property, plant and equipment is stated at cost less accumulated depreciat

ion and

impa

irment losses.

Land and build

ings compr

ise mainly branches and ofﬁces. Freehold land is not depreciated although it is subject to

impa

irment test

ing.

Depreciat

ion on other assets

is calculated using the straight-line method to allocate their cost to their residual values over

their estimated useful lives, as follows:

• Owned premises	•	up to 50 years
• Leasehold premises	•	up to 50 years
• Leasehold improvements	•	shorter of remain ing lease term and 10 years
• Equipment and motor vehicles	•	three to 15 years
• 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. The account

ing policy for lease assets

is set out in Note 19.

	2023
				Leased	Leased
			Operating	premises	equipment
	Premises	Equipment	lease assets	assets	assets	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Cost or valuation
At 1 January	1,773	840	4,420	1,652	29	8,714
Exchange translation differences	(27)	(22)	–	(5)	(3)	(57)
Addit ions 1	45	114	–	286	1	446
Disposals and fully depreciated assets
written off	(68)²	(122)²	(4,420)³	(69)	(9)	(4,688)
Classif ied as held for sale	18	–	–	–	–	18
As at 31 December	1,741	810	–	1,864	18	4,433
Depreciat ion
Accumulated at 1 January	678	575	1,185	730	24	3,192
Exchange translation differences	(21)	(17)	1	(25)	(1)	(63)
Charge for the year	77	99	27	238	4	445
Impairment charge	3	–	–	9	–	12
Attributable to assets sold, transferred
or written off	(47)²	(122)²	(1,213)³	(38)	(9)	(1,429)
Classif ied as held for sale	2	–	–	–	–	2
Accumulated at 31 December	692	535	–	914	18	2,159
Net book amount at 31 December	1,049	275	–	950	–	2,274

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

$159 mill

ion on page 363

2. Disposals for property, plant and equipment during the year of $53 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

3. Includes disposal of assets from aviat

ion ﬁnance leas

ing business and sale of vessels (refer note 32).

Financ

ial statements

Notes to the ﬁnancial statements

428

Standard Chartered

– Annual Report 2023

18. Property, plant and equipment

continued

	2022
				Leased	Leased
			Operating	premises	equipment
	Premises	Equipment	lease assets	assets	assets	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Cost or valuation
At 1 January	1,980	901	4,248	1,854	33	9,016
Exchange translation differences	(90)	(65)	–	(111)	(4)	(270)
Addit ions 1	87	124	624	339	1	1,175
Disposals and fully depreciated assets
written off 2	(142)	(102)	(452)	(425)	(1)	(1,122)
written off 2	(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	29	8,714
Depreciat ion
Accumulated at 1 January	795	611	1,155	819	20	3,400
Exchange translation differences	(39)	(39)	–	(33)	(3)	(114)
Charge for the year	76	116	202	250	7	651
Impairment charge	1	–	40	9	–	50
Attributable to assets sold, transferred
or written off 2	(125)	(101)	(212)	(313)	–	(751)
or written off 2	(125)	(101)	(212)	(313)	–	(751)	Transfers to assets held for sale	(30)	(12)	–	(2)	–	(44)
Accumulated at 31 December	678	575	1,185	730	24	3,192
Net book amount at 31 December	1,095	265	3,235	922	5	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 363

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

Operating lease assets

The operating lease assets subsection of property, plant and equipment refers to the Group’s aircraft operating leasing

business, all leases related to which were disposed on 2 November 2023. As at 31 December 2022, this consisted of 99

commercial aircraft of which 97 were narrow-bodies and 2 were wide-bodies. The leases were classif

ied as operat

ing leases

as they did not transfer substantially all the risks and rewards inc

idental to the ownersh

ip of the assets. As at 31 December

2022, these assets had a net book value of $3,235 mill

ion. Refer note 6 Other operat

ing income for the disposal gain and the

associated rental income, up to the date of their disposal.

Under these leases up to the date of disposal, the lessee was 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.

Financ

ial statements

Standard Chartered

– Annual Report 2023

429

19. Leased assets

Accounting policy

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 $283 mill

ion (2022: $310 m

ill

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:

	2023
		Between	Between
	One year	one year	two years	More than
	or less	and two years	and ﬁve years	ﬁve years	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Other liab il it ies – lease l iab il it ies	248	203	373	410	1234
	2022
		Between	Between
	One year	one year	two years	More than
	or less	and two years	and ﬁve years	ﬁve years	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Other liab il it ies – lease l iab il it ies	272	239	437	310	1,258

Financ

ial statements

Notes to the ﬁnancial statements

430

Standard Chartered

– Annual Report 2023

20. Other assets

Other assets include:

	2023	2022
	$mill ion	$mill ion
Financ ial assets held at amort ised cost (Note 13):
Hong Kong SAR Government certif icates of indebtedness (Note 23)¹	6,568	7,106
Cash collateral 2	10,337	12,515
Acceptances and endorsements	5,326	5,264
Unsettled trades and other ﬁnancial assets	15,909	14,410
	38,140	39,295
Non-ﬁnancial assets:
Commodit ies and em iss ions cert if icates 3	8,889	10,598
Other assets	565	490
	47,594	50,383

The Hong Kong SAR Government certif

icates of

indebtedness are subordinated to the claims of other parties in respect of bank notes issued

Cash collateral are margins placed to collateralize net derivat

ive mark-to-market (MTM) pos

ions

Physically held commodit

ies and em

iss

ion cert

icates are

inventory that is carried at fair value less costs to sell, $5.1 bill

ion (31 December 2022: $6 b

ill

ion) are

classif

ied as Level 1 and $3.7 b

ill

ion are class

ied as Level 2 (31 December 2022: $4.6 b

ill

ion). For commod

ies, the fa

ir value is derived from observable spot or

short-term futures prices from relevant exchanges.

21. Assets held for sale and associated liab

ies

Accounting Policy

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 2024.

Assets held for sale

The ﬁnancial assets reported below are class

ied under Level 1 $101 m

ill

ion (31 December 2022: $345 m

ill

ion), Level 2 $541 m

ill

ion

(31 December 2022: $946 mill

ion) and Level 3 $59 m

ill

ion (31 December 2022: $100 m

ill

ion).

	2023	2022
	$mill ion	$mill ion
Financ ial assets held at fa ir value through proﬁt or loss	–	3
Equity shares	–	2
Derivat ive ﬁnancial instruments – Assets	–	1
Financ ial assets held at amort ised cost	701	1,388
Cash and balances at central banks	246	423
Loans and advances to banks	24	81
Loans and advances to customers	251	508
Debt securit ies held at amort ised cost	180	376
Goodwill and intang ible assets	–	4
Property, plant and equipment	59	174
Vessels	43	133
Others	16	41
Others	49	56
	809	1,625

During the year, the aviat

ion ﬁnance leas

ing business, which held 99 commercial aircraft, was classif

ied as held for sale.

The business was sold to AviLease for a considerat

ion of $3,570 m

ill

ion, and the Group recorded a ga

in on sale of $309 mill

ion.

In addit

ion, vessels w

ith a carrying value of $83 mill

ion were sold (2022: n

il) and the Group exited Jordan as part of the exit of

AME regions ($108 mill

ion carry

ing value, with a $8 mill

ion ga

in on sale).

Financ

ial statements

Standard Chartered

– Annual Report 2023

431

21. Assets held for sale and associated liab

ies

continued

Liab

ies held for sale

The ﬁnancial l

iab

ies reported below are class

ied under Level 1 $54 m

ill

ion (2022: $402m

ill

ion) and Level 2 $672 m

ill

ion

(2022: $833 mill

ion).

	2023	2022
	$mill ion	$mill ion
Financ ial l iab il it ies held at fa ir value through proﬁt or loss	–	5
Derivat ive ﬁnancial instruments	–	5
Financ ial l iab il it ies held at amort ised cost	726	1,230
Deposits by banks	3	17
Customer accounts	723	1,213
Other liab il it ies	51	64
Provis ions for l iab il it ies and charges	10	8
	787	1,307

22. Debt securit

ies

in issue

Accounting policy

Refer to Note 13 Financ

ial

instruments for the relevant accounting policy.

	2023			2022
	Certif icates			Certif icates
	of deposit	Other debt		of deposit	Other debt
	of $100,000	securit ies		of $100,000	securit ies
	or more	in issue	Total	or more	in issue	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Debt securit ies in issue	15,533	47,013	62,546	23,457	37,785	61,242
Debt securit ies in issue included with in:
Financ ial l iab il it ies held at fa ir value through proﬁt or loss (Note13)	–	10,817	10,817	–	8,572	8,572
	–	10,817	10,817	–	8,572	8,572	Total debt securit ies in issue	15,533	57,830	73,363	23,457	46,357	69,814

In 2023, the Company issued a total of $8.1 bill

ion sen

ior notes for general business purposes of the Group as shown below:

Securit

ies

	$mill ion
$1,000 mill ion ﬁxed-rate sen ior notes due 2027 (callable 2026)	1,000
EUR 1,000 mill ion ﬁxed-rate sen ior notes due 2031 (callable 2030)	1,105
HKD 784 mill ion ﬁxed-rate sen ior notes due 2026 (callable 2025)	100
$1,000 mill ion ﬁxed-rate sen ior notes due 2034 (callable 2033)	1,000
$1,000 mill ion ﬁxed-rate sen ior notes due 2027 (callable 2026)	1,000
$500 mill ion ﬂoat ing-rate senior notes due 2027 (callable 2026)	500
$400 mill ion ﬂoat ing-rate senior notes due 2028 (callable 2027)	400
$1,500 mill ion ﬁxed-rate sen ior notes due 2029 (callable 2028)	1,500
$750 mill ion ﬁxed-rate sen ior notes due 2030 (callable 2029)	750
$750 mill ion ﬁxed-rate sen ior notes due 2028 (callable 2027)	750
Total senior notes issued	8,105

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

Financ

ial statements

Notes to the ﬁnancial statements

432

Standard Chartered

– Annual Report 2023

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.

	2023	2022
	$mill ion	$mill ion
Financ ial l iab il it ies held at amort ised cost (Note 13)
Notes in circulat ion 1	6,568	7,106
Acceptances and endorsements 2	5,386	5,264
Cash collateral 3	8,440	9,206
Property leases 4	1,054	1,029
Equipment leases 4	4	8
Unsettled trades and other ﬁnancial l iab il it ies	17,211	20,302
	38,663	42,915
Non-ﬁnancial l iab il it ies
Cash-settled share-based payments	102	81
Other liab il it ies	456	531
	39,221	43,527

Hong Kong currency notes in circulat

ion of $6,568 m

ill

ion (31 December 2022: $7,106 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)

Includes early receipts of funds ($60m) from customer, whereas corresponding liab

ity is due in Jan’24

Cash collateral are margins received against collateralize net derivat

ive mark-to-market (MTM) pos

ions

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 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.

	2023			2022
	Expected credit			Expected credit
	loss for credit	Other		loss for credit	Other
	commitments 1	provis ions 2	Total	commitments 1	provis ions 2	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
At 1 January	280	103	383	346	107	453
Exchange translation differences	(5)	4	(1)	(39)	(2)	(41)
(Release)/charge against proﬁt	(48)	42	(6)	(27)	69	42
Provis ions ut il ized	–	(71)	(71)	–	(71)	(71)
Transfer 3	–	(6)	(6)	–	–	–
At 31 December	227	72	299	280	103	383

Expected credit loss for credit commitment comprises those undrawn contractually committed facil

ies where there is doubt as to the borrowers’ abil

ity to meet

their repayment obligat

ions.

Other provis

ions cons

ist mainly of provis

ions for legal cla

ims and regulatory and enforcement invest

igat

ions and proceedings.

Includes the provis

ions transferred to held for sale.

Financ

ial statements

Standard Chartered

– Annual Report 2023

433

25. Contingent liab

ies and comm

itments

Accounting policy

Financ

ial guarantee contracts and loan comm

itments

Financ

ial guarantee contracts and any loan comm

itments issued at below-market interest rates are in

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 and their expected credit loss provis

ion. Loan comm

itments may be designated at fair value through

proﬁt or loss where that is the business model under which such contracts are held. Notional values of ﬁnanc

ial guarantee

contracts and loan commitments are disclosed in the table below.

Financ

ial guarantees, trade cred

its and irrevocable letters of credit are the notional values of contracts issued by the Group’s

Transaction Banking business for which an obligat

ion to make a payment has not ar

isen at the reporting date. Transaction

Banking will issue contracts to clients and counterparties of clients, whereby in the event the holder of the contract is not

paid, the Group will reimburse the holder of the contract for the actual ﬁnanc

ial loss suffered. These contracts have 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.

	2023	2022
	$mill ion	$mill ion
Financ ial guarantees and trade cred its
Financ ial guarantees, trade cred its and irrevocable letters of credit	74,414	60,410
	74,414	60,410
Commitments
Undrawn formal standby facil it ies, credit lines and other commitments to lend
One year and over	78,356	69,597
Less than one year	33,092	31,688
Uncondit ionally cancellable	70,942	67,383
	182,390	168,668
Capital Commitments
Contracted capital expenditure approved by the directors but not provided for in these accounts	217	257

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.

Financ

ial statements

Notes to the ﬁnancial statements

434

Standard Chartered

– Annual Report 2023

26. Legal and regulatory matters

Accounting policy

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 on behalf of plaint

iffs who are, or are

relatives of, vict

ims of attacks

in Iraq and Afghanistan. The plaint

iffs

in each of these lawsuits have alleged that the defendant

banks aided and abetted the unlawful conduct of parties with connections to terrorist organisat

ions

in breach of the United

States Anti-Terrorism Act. None of these lawsuits specify the amount of damages claimed. The Group continues to defend

these lawsuits.

In January 2020, a shareholder derivat

ive compla

int was ﬁled by the City of Philadelph

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 Standard Chartered Bank 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 pursu

ing an appeal against the February 2022 ruling. A hearing date for the plaint

iffs’ appeal

is awaited.

Since October 2020, four lawsuits have been ﬁled in the English High Court against Standard Chartered PLC on behalf of more

than 200 shareholders in relation to alleged untrue and/or mislead

ing statements and/or om

iss

ions

in informat

ion publ

ished by

Standard Chartered PLC in its rights issue prospectuses of 2008, 2010 and 2015 and/or public statements regarding the Group’s

histor

ic sanct

ions, money laundering and ﬁnanc

ial cr

ime compliance issues. These lawsuits have been brought under sections

90 and 90A of the Financ

ial Serv

ices and Markets Act 2000. 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.

As has been reported in the press, a number of Korean banks, includ

ing Standard Chartered Bank Korea, have sold equ

ity-

linked securit

ies (“ELS”) to customers, the redempt

ion values of which are determined by the performance of various stock

ind

ices. Standard Chartered Bank Korea sold relevant ELS to

its customers with a notional value of approximately USD900m.

Due to the performance of the Hang Seng China Enterprise Index, it is antic

ipated that several thousand Standard Chartered

Bank Korea customers may redeem their ELS at a loss. The value of Standard Chartered Bank Korea customers’ antic

ipated

losses is subject to ﬂuctuation as the ELS mature on various dates through 2026 and could total several hundred mill

ion USD.

Standard Chartered Bank Korea may be faced with claims by customers and its regulator, the Financ

ial Superv

isory Service,

to cover part or all of those antic

ipated losses and also may face regulatory penalt

ies

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 matters are inherently

uncertain and diff

icult to pred

ict.

In 2023, three legal cases concluded in which allegations of corruption had been made against the Group or its employees,

none of which resulted in liab

ity being established.

Financ

ial statements

Standard Chartered

– Annual Report 2023

435

27. Subordinated liab

ies and other borrowed funds

	2023	2022
	$mill ion	$mill ion
Subordinated loan capital – issued by subsid iary undertak ings
$700 mill ion 8.0 per cent subord inated notes due 2031 (callable 2026)¹	342	345
NPR2.4 bill ion ﬁxed sub debt rate 10.3 per cent 2,3	18	–
	360	345
Subordinated loan capital – issued by the Company 4
Primary capital ﬂoating rate notes:
$400 mill ion ﬂoat ing rate undated subordinated notes 5	–	16
$300 mill ion ﬂoat ing rate undated subordinated notes (Series 2) 5	–	69
$400 mill ion ﬂoat ing rate undated subordinated notes (Series 3) 5	–	50
$200 mill ion ﬂoat ing rate undated subordinated notes (Series 4) 5	–	26
£900 mill ion 5.125 per cent subord inated notes due 2034	644	587
$2 bill ion 5.7 per cent subord inated notes due 2044	2,197	2,172
$2 bill ion 3.95 per cent subord inated notes due 2023	–	1,999
$1 bill ion 5.2 per cent subord inated notes due 2024	1,001	1,017
$750 mill ion 5.3 per cent subord inated notes due 2043	697	679
€500 mill ion 3.125 per cent subord inated notes due 2024	536	502
$1.25 bill ion 4.3 per cent subord inated notes due 2027	1,154	1,119
$1 bill ion 3.516 per cent subord inated notes due 2030 (callable 2025)	964	938
$500 mill ion 4.886 per cent subord inated notes due 2033 (callable 2028)	481	473
£96.035 mill ion 7.375 per cent Non-Cum Pref Shares (reclassed as Debt) – Other borrow ings	122	116
£99.250 mill ion 8.25 per cent Non-Cum Pref Shares (reclassed as Debt) – Other borrow ings	126	119
$750 mill ion 3.604 per cent ﬁxed rate reset dated subord inated notes due 2033	648	630
€ 1 bill ion 2.5 per cent subord inated debt 2030	1,044	967
$1.25 bill ion 3.265 per cent subord inated notes due 2036	1,040	1,002
€1 bill ion 1.200 per cent ﬁxed rate reset dated subord inated notes due 2031 (callable 2026)	1,022	891
	11,676	13,370
Total for Group	12,036	13,715

Issued by Standard Chartered Bank

Issued by Standard Chartered Bank Nepal Lim

ited

NPR refers to Nepalese Rupee

In the balance sheet of the Company the amount recognised is $11,945 mill

ion (2022: 13,684 m

ill

ion), w

ith the difference on accout of hedge accounting achieved

on a Group basis

These notes were subject to remediat

ion under

interest rate benchmark reform. Please refer to Note 13 for further informat

ion on th

	2023
	USD	EUR	GBP	NPR	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Fixed rate subordinated debt	8,524	2,602	892	18	12,036
Floating rate subordinated debt	–	–	–	–	–
Total	8,524	2,602	892	18	12,036
	2022
	USD	EUR	GBP	NPR	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Fixed rate subordinated debt	10,372	2,360	822	–	13,554
Floating rate subordinated debt	161	–	–	–	161
Total	10,533	2,360	822	–	13,715

Redemptions and repurchases during the year

Standard Chartered PLC exercised its right to redeem USD 2 bill

ion 3.95 per cent subord

inated notes 2023. Further to that

outstanding balances of ﬂoating rate undated subordinate notes were redeemed during the year.

Issuance during the year

On 1st March 2023, Standard Chartered Bank Nepal Lim

ited

issued NPR 2.4 bill

ion 10.3 per cent ﬁxed rate dated subord

inated

notes due 2028.

Financ

ial statements

Notes to the ﬁnancial statements

436

Standard Chartered

– Annual Report 2023

28. Share capital, other equity instruments and reserves

Accounting policy

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	Ordinary	Preference	Total share	Other
	ordinary	share	Share	Share	capital and	equity
	shares	capital 1	premium	premium 2	share premium	instruments
	mill ions	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
At 1 January 2022	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 equity redemption	–	–	–	–	–	(990)
At 31 December 2022	2,895	1,447	3,989	1,494	6,930	6,504
Cancellation of shares includ ing
share buy-back	(230)	(115)	–	–	(115)	–
Addit ional T ier 1 equity issuance	–	–	–	–	–	–
Addit ional T ier 1 redemption	–	–	–	–	–	(992)
At 31 December 2023	2,665	1,332	3,989	1,494	6,815	5,512

Issued and fully paid ordinary shares of 50 cents each

Includes preference share capital of $75,000

Share buy-back

On 16 February 2023, 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 $58 mill

ion, and the total cons

iderat

ion pa

id was $1 bill

ion. The buy-back completed on

29 September 2023. The total number of shares purchased was 116,710,492 representing 4.03 per cent of the ordinary shares in

issue as at the commencement of the buy-back. The nominal value of the shares was transferred from the share capital to the

capital redemption reserve account.

On 28 July 2023, 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 $57 mill

ion, and the total cons

iderat

ion pa

id was $1 bill

ion. The buy-back completed on

6 November 2023. The total number of shares purchased was 112,982,802 representing 3.90 per cent of the ordinary shares in

issue as at the commencement of the buy-back. The nominal value of the shares was transferred from the share capital to the

capital redemption reserve account.

The shares were purchased by Standard Chartered PLC on various exchanges not includ

ing the Hong Kong Stock Exchange.

				Average
		Highest	Lowest	price paid	Aggregate	Aggregate
	Number of	price paid	price paid	per share	price paid	price paid
	ordinary shares	£	£	£	£	$
February 2023	9,522,684	7.99400	7.41600	7.77508	74,039,628	89,017,672
March 2023	48,672,024	7.94600	5.79000	7.07885	344,541,860	416,300,544
April 2023	9,521,811	6.58200	6.10600	6.30837	60,067,118	74,798,622
May 2023	10,662,964	6.66000	5.92800	6.28592	67,026,502	83,626,929
June 2023	15,515,223	6.92200	6.36000	6.70601	104,045,286	131,601,470
July 2023	10,388,883	7.53200	6.56400	6.81807	70,832,098	90,241,074
August 2023	22,896,567	7.60800	7.10000	7.28931	166,900,079	211,996,912
September 2023	40,542,727	7.64800	6.93600	7.35577	298,222,942	369,007,327
October 2023	52,084,775	7.66600	6.04800	7.20829	375,442,209	457,218,216
November 2023	9,885,636	6.38400	6.12600	6.23095	61,596,915	75,472,633

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.

Financ

ial statements

Standard Chartered

– Annual Report 2023

437

28. Share capital, other equity instruments and reserves

continued

Preference share capital

At 31 December 2023, the Company has 15,000 $5 non-cumulative redeemable preference shares in issue, with a premium of

$99,995 making a paid up amount per preference share of $100,000. The preference shares are redeemable at the option of the

Company and are classif

ied

in equity.

The available proﬁts of the Company are distr

ibuted to the holders of the

issued preference shares in prior

ity to payments

made to holders of the ordinary shares and in prior

ity to, or par

i passu with, any payments to the holders of any other class of

shares in issue. On a wind

ing up, the assets of the Company are appl

ied to the holders of the preference shares in prior

ity to

any payment to the ordinary shareholders and in prior

ity to, or par

i passu with, the holders of any other shares in issue, for an

amount equal to any div

idends payable (on approval of the Board) and the nom

inal value of the shares together with any

premium as determined by the Board. The redeemable preference shares are redeemable at the paid up amount (which

includes premium) at the option of the Company in accordance with the terms of the shares. The holders of the preference

shares are not entitled to attend or vote at any general meeting except where any relevant div

idend due

is not paid in full or

where a resolution is proposed varying the rights of the preference shares.

Other equity instruments

The table provides details of outstanding Fixed Rate Resetting Perpetual Subordinated Contingent Convertible AT1 securit

ies

issued by Standard Chartered PLC. All issuances are made for general business purposes and to increase the regulatory capital

base of the Group.

						Conversion
		Proceeds net	Interest			price per
Issuance date	Nominal value	of issue costs	rate 1	Coupon payment dates 2	First reset dates 3	ordinary share
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	6%	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 1,490 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

Interest rates for the period from (and includ

ing) the

issue date to (but excluding) the ﬁrst reset date

Interest payable semi-annually in arrears

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 $1,000m Fixed Rate Resetting Perpetual Contingent Convertible Securit

ies on

its ﬁrst

optional redemption date of 2 April 2023.

The AT1 issuances above are primar

ily purchased by

inst

itut

ional investors.

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 859 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.

Financ

ial statements

Notes to the ﬁnancial statements

438

Standard Chartered

– Annual Report 2023

28. Share capital, other equity instruments and reserves

continued

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 share capital and 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. 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. 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.

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 2023, the distr

ibutable reserves of Standard Chartered PLC (the Company) were $14.7 b

ill

ion (31 December

2022: $13 bill

ion). D

istr

ibutable reserves of SC PLC were $14.7 b

ill

ion, wh

ich are calculated from the Merger reserve and Retained

Earnings with considerat

ion for restr

icted items in line with sections 830 and 831 of the Companies Act 2006.

Financ

ial statements

Standard Chartered

– Annual Report 2023

439

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 has been the trustee of the 1995 Employees’ Share Ownersh

ip Plan Trust (‘1995 Trust’). The 1995 Trust was closed

on 30 June 2023 as all histor

ical awards under th

is trust have been satisf

ied, and the 2004 Trust w

ill be used to satisfy exist

ing

and future awards.

The 2004 Trust is used in conjunct

ion w

ith the Group’s employee share schemes and other employee share-based payments

(such as upfront shares and ﬁxed pay allowances). Group companies fund the 2004 Trust from time to time to enable the

trustees to acquire shares in Standard Chartered PLC to satisfy these arrangements.

Details of the shares purchased and held by the trusts are set out below.

	1995 Trust		2004 Trust		Total
	2023	2022	2023	2022	2023	2022
Shares purchased during the period	–	–	29,069,539	30,203,531	29,069,539	30,203,531
Market price of shares purchased
($mill ion)	–	–	237	218	237	218
Shares held at the end of the period	–	–	28,095,542	27,525,624	28,095,542	27,525,624
Maximum number of shares held
during the period					28,893,930	27,976,046

Except as disclosed, neither the Company nor any of its subsid

iar

ies has bought, sold or redeemed any Standard Chartered PLC

securit

ies l

isted on The Stock Exchange of Hong Kong Lim

ited dur

ing the period.

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.

					Proportion
	Place of		Issued/(redeemed)	Issued/(redeemed)	of shares
Name and registered address	incorporation	Descript ion of shares	capital	Shares	held (%)
The following companies have the
address of 1 Basinghall Avenue, London,
EC2V 5DD, United Kingdom
Standard Chartered I H Lim ited	United Kingdom	$1.00 Ordinary shares	$574,721,653	574,721,653	100
Standard Chartered Holdings Lim ited	United Kingdom	$2.00 Ordinary shares	$574,721,653	287,360,826	100
Standard Chartered Strategic
Investments Lim ited	United Kingdom	$1.00 Ordinary shares	$45,886,520	45,886,520	100
SC Ventures Holdings Lim ited	United Kingdom	$1.00 Ordinary shares	$217,712,622	217,712,622	100
Zodia Markets Holdings Lim ited	United Kingdom	$1.00 Ordinary shares	$5,580	5,580	80.46
The following companies have the
address of 5th Floor, Holland House 1-4
Bury Street, London, EC3A 5AW, United
Kingdom
Zodia Holdings Lim ited	United Kingdom	$1.00 Ordinary-A
		shares	$18,300,000	18,300,000	100
The following companies have the
address of Suites 508,509,15th ﬂoor, Al
Sarab Tower, Adgm Square, Al Maryah
Island, Abu Dhabi, United Arab Emirates
Financ ial Inclus ion Technologies Ltd	United Arab
	Emirates	$1.00 Ordinary shares	$13,500,000	13,500,000	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	HKD1,212,100,000	121,210,000	68.29

Financ

ial statements

Notes to the ﬁnancial statements

440

Standard Chartered

– Annual Report 2023

					Proportion
	Place of		Issued/(redeemed)	Issued/(redeemed)	of shares
Name and registered address	incorporation	Descript ion of shares	capital	Shares	held (%)
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 is ion, Ward No. 150, Bengaluru,
560102, India.
Standard Chartered Research and	India	INR10.00 A Equity
Technology India Private Lim ited		shares	INR135,758,500	13,575,850	90.63
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	India	INR10.00 Equity shares	INR730,222,220	73,022,222	100
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	KES1,000.00 Ordinary
		shares	KES237,228,000	237,228	100
Tawi Fresh Kenya Lim ited	Kenya	KES1,000.00 Ordinary
		shares	KES505,560,000	505,560	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	$1,230,000	1,230,000	72.83
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	SGD110,000,000	110,000,000	60
EX-26, Ground Floor, Bldg 16-Co Work,
Dubai Internet City, Dubai, United
Arab Emirates
Appro Onboarding Solutions FZ-LLC	United Arab	AED1,000.00 Ordinary
	Emirates	shares	AED25,691,000	25,691	100
The following company has the address
of Part of Level 15, Standard Chartered
Bank Build ing, Plot 8, Burj Downtown,
Dubai, United Arab Emirates
myZoi Financ ial Inclus ion Technologies	United Arab	AED1.00 Ordinary
LLC	Emirates	shares	AED25,000,000	25,000,000	100
The following company has the address
of Standard Chartered Bank Build ing, 87
Independance Avenue, Ridge, ACCRA,
Greater ACCRA, GA-016-4621, Ghana
Solvezy Technology Ghana Ltd	Ghana	GHS Ordinary	GHS4,301,000	4,301,000	100
The following company has the address
of 8th Floor, Makati Sky Plaza Build ing
6788, Ayala Avenue San Lorenzo, City of
Makati, Fourth Distr ict, Nat ional Capi,
1223, Phil ipp ines
Standard Chartered Group Services,
Manila Incorporated	Phil ipp ines	PHP1.00 Ordinary	PHP108,000,000	108,000,000	100
The following company has the address
of 1201 1-2, 15-16, 12/F, Unit No.1, Build ing
No.1, No. 1 Dongsanhuan Zhong Road,
Chaoyang Distr ict, Be ijing, China
Standard Chartered Securit ies (Ch ina)
Lim ited	China	CNY Ordinary	CNY1,050,000,000	1,050,000,000	100

28. Share capital, other equity instruments and reserves

continued

Financ

ial statements

Standard Chartered

– Annual Report 2023

441

					Proportion
	Place of		Issued/(redeemed)	Issued/(redeemed)	of shares
Name and registered address	incorporation	Descript ion of shares	capital	Shares	held (%)
The following companies have the
address of Rafﬂes Place, #26-01 Republic
Plaza, Singapore , 048619, Singapore
Autumn Life Pte. Ltd.	Singapore	$ Ordinary-A shares	$2,650,000	2,650,000	96.62
Audax Financ ial Technology Pte. Ltd	Singapore	$ Ordinary-A shares	$94,300,000	94,300,000	100
CashEnable Pte. Ltd.	Singapore	$ Ordinary-A shares	$700,000	700,000	100
Letsbloom Pte. Ltd	Singapore	$ Ordinary shares	$4,599,999	4,599,999	100
The following companies have the
address of 9 Rafﬂes Place, #26-01
Republic Plaza, 048619 , Singapore
SCV Research and Development Pte. Ltd.	Singapore	$ Ordinary shares	$8,000,000	8,000,000	100
SCV Master Holding Company Pte Ltd	Singapore	$ Ordinary shares	$25,700,000	25,700,000	100
The following companies have the
address of 80 Robinson Road, #02-00,
068898, Singapore
Solv-India Pte Ltd	Singapore	$ Ordinary shares	$47,000,000	47,000,000	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.	Malaysia	RM5.00 Ordinary
		shares	RM10,911,120	2,182,224	90.6

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

	$mill ion
At 1 January 2022	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 1	98
At 31 December 2022	350
Comprehensive income for the year	(38)
Income in equity attributable to non-controlling interests	(31)
Other proﬁts attributable to non-controlling interests	(7)
Distr ibut ions	(26)
Other increases 2	110
At 31 December 2023	396

Addit

ional

investment by non-controlling interests mainly in 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 m

ill

ion), Power2SME Pte. Ltd. ($9 m

ill

ion)

Addit

ional

investment by non-controlling interests mainly in Mox Bank Lim

ited ($48 m

ill

ion), Trust Bank S

ingapore Lim

ited ($34 m

ill

ion) and Zod

ia Custody Lim

ited

($28 mill

ion)

28. Share capital, other equity instruments and reserves

continued

Financ

ial statements

Notes to the ﬁnancial statements

442

Standard Chartered

– Annual Report 2023

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 contribut

ion

plans, the Group pays contribut

ions to publ

icly or privately admin

istered pens

ion plans on a

statutory or contractual basis, and such amounts are charged to operating expenses. The Group has no further payment

obligat

ions once the contr

ibut

ions have been pa

id.

• For

deﬁned beneﬁt

plans, which promise levels of payments where the future cost is not known with certainty:

– the accounting obligat

ion

is calculated annually by independent actuaries using the projected unit method.

–

Actuarial gains and losses that arise are recognised in shareholders’ equity and presented in the statement of other

comprehensive income in the period they arise.

–

The Group determines the net interest expense on the net deﬁned beneﬁt liab

ity for the year by applying the

discount rate used to measure the deﬁned beneﬁt obligat

ion at the beg

inn

ing of the annual per

iod to the net

deﬁned beneﬁt liab

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. The table below summarises how these assumptions are set:

Assumption	Detail
Discount rate	Determined by reference to market yields at the end of the reporting period on high-quality
	corporate bonds (or, in countries where there is no deep market in such bonds, government bonds)
	of a currency and term consistent with the currency and term of the post-employment beneﬁt
	obligat ions. Th is is the approach adopted across all our geographies.
Inﬂation	Where there are inﬂat ion-l inked bonds available (e.g. United Kingdom and the eurozone), the Group
	derives inﬂat ion based on the market on those bonds, w ith the market yield adjusted in respect of
	the United Kingdom to take account of the fact that liab il it ies are l inked to Consumer Price Index
	inﬂat ion, whereas the reference bonds are l inked to Retail Price Index inﬂat ion. Where no inﬂat ion-
	linked bonds exist, we determine inﬂat ion assumpt ions based on a combinat ion of long-term
	forecasts and short-term inﬂat ion data.
Salary growth	Salary growth assumptions reﬂect the Group’s long-term expectations, taking into account future
	business plans and macroeconomic data (primar ily expected future long-term inﬂat ion).
Demographic assumptions	Demographic assumptions, includ ing mortal ity and turnover rates, are typically set based on
	the assumptions used in the most recent actuarial funding valuation, and will generally use
	industry standard tables, adjusted where appropriate to reﬂect recent histor ic exper ience and/or
	future expectations.

The sensit

ity of the liab

ies to changes

in these assumptions is shown in the Note below.

Retirement beneﬁt obligat

ions compr

ise:

	2023	2022
	$mill ion	$mill ion
Deﬁned beneﬁt plans obligat ion	166	128
Deﬁned contribut ion plans obl igat ion	17	18
Net obligat ion	183	146

Retirement beneﬁt charge comprises:

	2023	2022
	$mill ion	$mill ion
Deﬁned beneﬁt plans	66	58
Deﬁned contribut ion plans 1	365	332
Charge against proﬁt (Note 7)	431	390

The Group 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 $16 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.

Financ

ial statements

Standard Chartered

– Annual Report 2023

443

30. Retirement beneﬁt obligat

ions

continued

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 reduction in

discount rates in most countries with material pension liab

ies over 2023 has led to h

igher liab

ies. Th

is has been partly offset

by increases in the value of bonds held as well as good performance of growth assets such as equit

ies, lead

ing to an increase in

the pension deﬁc

it reported. These movements are shown as actuar

ial gains and losses in the tables below. Contribut

ions

into

a number of plans in excess of the amounts required to fund beneﬁts accruing have also partially offset the increase in the net

deﬁcit 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 2023.

UK Fund

The Standard Chartered Pension Fund (the ‘UK Fund’) is the Group’s largest pension plan, representing 53 per cent (31 December

2022: 53 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 below, 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 $162 m

ill

ion (£127 m

ill

ion).

To repair the deﬁc

it, three annual cash payments each of $42 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. Based on the fund

ing posit

ions at the agreed measurement po

int of mid-year, no payment was

made in December 2022, and a reduced payment of $8m (£6m) was made in December 2023. As part of the 2020 valuation,

in order to provide security for future contribut

ions an add

ional $64 m

ill

ion nom

inal gilts (£50 mill

ion) were purchased and

transferred into the exist

ing escrow account of $140 m

ill

ion g

ilts (£110 mill

ion), topp

ing it up to $204 mill

ion. Under the terms of

the 2020 valuation agreement, the USD8m payment made in December 2023 is deductible from the funds held in escrow.

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.

Virg

in Med

ia vs NTL Pension Trustees II Ltd

Following the June 2023 ruling in the case of Virg

in Med

ia vs NTL Pension Trustees II Lim

ited, the Bank has cons

idered the

potential impact of this ruling on the UK Fund and is of the view that any potential impact is not expected to be material.

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 the accrual of future beneﬁts.

Key assumptions

The princ

ipal ﬁnancial assumpt

ions used at 31 December 2023 were:

	2023			2022
	UK Funded	Overseas Plans 1	Unfunded Plans 2	UK Funded	Overseas Plans 1	Unfunded Plans 2
	%	%	%	%	%	%
Discount rate	4.6	1.2 – 4.9	3.1 – 7.4	4.8	1.2 – 5.4	3.7 – 7.6
Price inﬂat ion	2.5	2.0 – 2.9	2.0 – 5.0	2.6	1.0 – 3.1	2.0 – 4.0
Salary increases	n/a	3.5 – 4.5	4.0 – 8.5	n/a	3.5 – 4.5	4.0 – 7.8
Pension increases	2.3	2.9	0.0 – 2.3	2.4	3.1	0.0 – 2.4
Post-retirement medical rate			8% in 2023			7% in 2022
			reducing by			reducing by
			0.5% per			0.5% per
			annum to			annum to
			5% in 2029			5% in 2026

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 is for the main unfunded deﬁned beneﬁt plans in India, Korea, Thailand, UAE, UK and the US. They comprise around 95 per cent

of the total liab

ies of 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.

Financ

ial statements

Notes to the ﬁnancial statements

444

Standard Chartered

– Annual Report 2023

30. Retirement beneﬁt obligat

ions

continued

The resulting assumptions for life expectancy for the UK Fund are that a male member currently aged 60 will live for 27 years

(2022: 27 years) and a female member for 30 years (2022: 30 years) and a male member currently aged 40 will live for 29 years

(2022: 29 years) and a female member for 32 years (2022: 32 years) after their 60th birthdays.

Both ﬁnancial and non-ﬁnancial assumpt

ions can be expected to change in the future, which would affect the value placed

on the liab

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 $35 mill

ion for the UK Fund

|(2022: $30 mill

ion) and $20 m

ill

ion for the other plans (2022: $15 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 (2022: $20 m

ill

ion) and $15 m

ill

ion for the other plans

(2022: $15 mill

ion)

•

If the rate of salary growth relative to inﬂat

ion

increased by 25 basis points the liab

ity would increase by nil for the UK Fund

(2022: nil) and approximately $10 mill

ion for the other plans (2022: $10 m

ill

ion)

•

If longevity expectations increased by one year the liab

ity would increase by approximately $35 mill

ion for the UK Fund

(2022: $35 mill

ion) and $10 m

ill

ion for the other plans (2022: $10 m

ill

ion)

Although this analysis does not take account of the full distr

ibut

ion of cash ﬂows expected, it does provide an approximat

ion of

the sensit

ity to the main assumptions. While changes in other assumptions would also have an impact, the effect would not

be as sign

iﬁcant.

Proﬁle of plan obligat

ions

	Funded plans		Unfunded
	UK Fund	Overseas	plans
Duration of the deﬁned beneﬁt obligat ion ( in years)	11	8	8
Duration of the deﬁned beneﬁt obligat ion – 2022	11	9	9
Beneﬁts expected to be paid from plans
Beneﬁts expected to be paid during 2024	80	63	19
Beneﬁts expected to be paid during 2025	82	100	17
Beneﬁts expected to be paid during 2026	84	74	17
Beneﬁts expected to be paid during 2027	86	83	17
Beneﬁts expected to be paid during 2028	89	91	18
Beneﬁts expected to be paid during 2029 to 2033	478	444	82

Fund values

	UK Fund			Overseas plans
	Quoted assets	Unquoted assets	Total assets	Quoted assets	Unquoted assets	Total assets
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
At 31 December 2022
Equit ies	2	–	2	223	–	223
Government bonds	206	–	206	160	–	160
Corporate bonds	309	82	391	116	–	116
Hedge funds	–	14	14	–	–	–
Infrastructure	–	177	177	–	–	–
Property	–	126	126	–	–	–
Derivat ives	2	–	2	–	–	–
Cash and equivalents	257	–	257	35	221	256
Others	7	4	11	–	63	63
Total fair value of assets 1	783	403	1,186	534	284	818
At 31 December 2023
Equit ies	2	–	2	160	–	160
Government bonds	443	–	443	173	–	173
Corporate bonds	360	113	473	179	–	179
Hedge funds	–	9	9	–	–	–
Infrastructure	–	166	166	–	–	–
Property	–	84	84	–	–	–
Derivat ives	2	5	7	–	–	–
Cash and equivalents	66	–	66	37	166	203
Others	7	2	9	–	145	145
Total fair value of assets 1	880	379	1,259	549	311	860

Self-investment is monitored closely and is less than $1 mill

ion of Standard Chartered equ

ies and bonds for 2023 (31 December 2022: <$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

Financ

ial statements

Standard Chartered

– Annual Report 2023

445

30. Retirement beneﬁt obligat

ions

continued

	At 31 December 2023			At 31 December 2022
	Funded plans			Funded plans
	UK Fund	Overseas Plans	Unfunded Plans	UK Fund	Overseas Plans	Unfunded Plans
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Total fair value of assets	1,259	860	N/A	1,186	818	N/A
Present value of liab il it ies	(1,219)	(877)	(189)	(1,138)	(817)	(177)
Net pension plan asset/(obligat ion)	40	(17)	(189)	48	1	(177)

The pension cost for deﬁned beneﬁt plans was:

2023

	Funded plans
	UK Fund Overseas plans	Unfunded plans		Total
	$mill ion	$mill ion	$mill ion	$mill ion
	1
Current service cost	–	39	11	50
	2
Past service cost and curtailments	8	–	1	9
	3
Settlement cost	–	2	–	2
Interest income on pension plan assets	(57)	(43)	–	(100)
Interest on pension plan liab il it ies	56	41	8	105
Total charge to proﬁt before deduction of tax	7	39	20	66
Net (gain)/losses on plan assets 4	(18)	(52)	–	(70)
(Gains)/losses on liab il it ies	30	79	8	117
Total (gains)/losses recognised directly in statement of comprehensive
income before tax	12	27	8	47
Deferred taxation	(1)	(10)	–	(11)
Total (gains) /losses after tax	11	17	8	36

Includes admin

istrat

ive expenses paid out of plan assets of $1 mill

ion and actuar

ial losses of $2 mill

ion that are

immed

iately recogn

ised through P&L in line with

the requirements of IAS 19.

Includes the cost of discret

ionary pens

ion increases paid to UK pensioners as well as small past service costs in relation to Hong Kong

Terminat

ion beneﬁts pa

id from the pension plan in Indonesia

The actual return on the UK Fund assets was a gain of $75 mill

ion and on overseas plan assets was a ga

in of $95 mill

ion

	Funded plans
	UK Fund	Overseas plans	Unfunded plans	Total
2022	$mill ion	$mill ion	$mill ion	$mill ion
Current service cost 1	–	47	6	53
Past service cost and curtailments 2	–	2	–	2
Interest income on pension plan assets	(34)	(32)	–	(66)
Interest on pension plan liab il it ies	33	31	5	69
Total charge to proﬁt before deduction of tax	(1)	48	11	58
Net (gains)/losses on plan assets 3	486	113	–	599
(Gains)/ losses on liab il it ies	(453)	(143)	(44)	(640)
Total losses/(gains) recognised directly in statement of comprehensive
income before tax	33	(30)	(44)	(41)
Deferred taxation	7	13	–	20
Total (gains)/losses after tax	40	(17)	(44)	(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

Financ

ial statements

Notes to the ﬁnancial statements

446

Standard Chartered

– Annual Report 2023

30. Retirement beneﬁt obligat

ions

continued

Movement in the deﬁned beneﬁt pension plans deﬁc

it dur

ing the year comprise:

	Funded plans
	UK Fund Overseas plans	Unfunded plans		Total
	$mill ion	$mill ion	$mill ion	$mill ion
Surplus/(deﬁcit) at January 2023	48	1	(177)	(128)
ions Contribut	8	59	14	81
Current service cost 1	–	(39)	(11)	(50)
Past service cost and curtailments	(8)	–	(1)	(9)
Settlement costs and transfers impact	–	(2)	–	(2)
Net interest on the net deﬁned beneﬁt asset/liab il ity	1	2	(8)	(5)
Actuarial gains/(losses)	(12)	(27)	(8)	(47)
Assets held for sale 3	–	(7)	6	(1)
Exchange rate adjustment	3	(4)	(4)	(5)
Surplus/(deﬁcit) at 31 December 2023²	40	(17)	(189)	(166)

Includes admin

istrat

ive expenses paid out of plan assets of $1 mill

ion (31 December 2022: $1 m

ill

ion)

The deﬁcit total of $166 m

ill

ion

is made up of plans in deﬁc

it of $260 m

ill

ion (31 December 2022: $248 m

ill

ion) net of plans

in surplus with assets totalling $94 mill

ion

(31 December 2022: $120 mill

ion)

“Assets held for sale” is an adjustment relating to plans in Cameroon, Cote D’Ivoire and Zimbabwe which is required due to these countries being excluded in the

opening and closing assets and liab

ies, but

included in the proﬁt and other comprehensive income items shown.

	Funded plans
	UK Fund	Overseas plans	Unfunded plans	Total
	$mill ion	$mill ion	$mill ion	$mill ion
Surplus/(deﬁcit) at January 2022	88	(44)	(236)	(192)
Contribut ions	–	67	13	80
Current service cost 1	–	(47)	(6)	(53)
Past service cost and curtailments	–	(2)	–	(2)
Settlement costs and transfers impact	–	–	–	–
Net interest on the net deﬁned beneﬁt asset/liab il ity	1	1	(5)	(3)
Actuarial gains/(losses)	(33)	30	44	41
Assets held for sale 3	–	(4)	2	(2)
Exchange rate adjustment	(8)	–	11	3
Surplus/(deﬁcit) at 31 December 2022²	48	1	(177)	(128)

Includes admin

istrat

ive expenses paid out of plan assets of $1 mill

ion (31 December 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 (31 December 2021: $355 m

ill

ion) net of plans

in surplus with assets totalling $120 mill

ion

(31 December 2021: $163 mill

ion)

Assets held for sale includes funded and unfunded plans in Cameroon, Cote D’Ivoire, Jordan and Zimbabwe

The Group’s expected contribut

ion to

its deﬁned beneﬁt pension plans in 2024 is $53 mill

ion.

	2023			2022
	Assets	Obligat ions	Total	Assets	Obligat ions	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
At 1 January	2,004	(2,132)	(128)	2,942	(3,134)	(192)
Contribut ions 1	82	(1)	81	81	(1)	80
Current service cost 2	–	(50)	(50)	–	(53)	(53)
Past service cost and curtailments	–	(9)	(9)	–	(2)	(2)
Settlement costs	–	(2)	(2)	(5)	5	–
Interest cost on pension plan liab il it ies	–	(105)	(105)	–	(69)	(69)
Interest income on pension plan assets	100	–	100	66	–	66
Beneﬁts paid out 2	(161)	161	–	(176)	176	–
Actuarial gains/(losses) 3	70	(117)	(47)	(599)	640	41
Assets held for sale 4	(7)	6	(1)	(18)	16	(2)
Exchange rate adjustment	31	(36)	(5)	(287)	290	3
At 31 December	2,119	(2,285)	(166)	2,004	(2,132)	(128)

Includes employee contribut

ions of $1 m

ill

ion (31 December 2022: $1 m

ill

ion)

Includes admin

istrat

ive expenses paid out of plan assets of $1 mill

ion (31 December 2022: $1 m

ill

ion)

Actuarial gain on obligat

ion compr

ises of $50 mill

ion loss (31 December 2022: $708 m

ill

ion ga

in) from ﬁnanc

ial assumpt

ion changes, $1 mill

ion loss (31 December

2022: $9 mill

ion ga

in) from demographic assumption changes and $66 mill

ion loss (31 December 2022: $77 m

ill

ion loss) from exper

ience

“Assets held for sale” is an adjustment relating to plans in Cameroon, Cote D’Ivoire and Zimbabwe which is required due to these countries being excluded in the

opening and closing assets and liab

ies, but

included in the proﬁt and other comprehensive income items shown.

Financ

ial statements

Standard Chartered

– Annual Report 2023

447

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 2024 in respect of 2023 performance, which vest in 2025-2027, is recognised as an expense

over the period from 1 January 2023 to the vesting dates in 2025-2027. For all other awards, the expense is recognised over

the period from the date of grant to the vesting date.

For equity-settled awards, the total amount to be expensed over the vesting period is determined by reference to the fair

value of the shares and awards at the date of grant, which excludes the impact of any non-market vesting condit

ions

(for example, proﬁtabil

ity and growth targets). The fair value of equity instruments granted is based on market prices,

if available, at the date of grant. In the absence of market prices, the fair value of the instruments is estimated using an

appropriate valuation technique, such as a binom

ial opt

ion pric

ing model. Non-market vest

ing condit

ions are

included in

assumptions for the number of shares and awards that are expected to vest.

At each balance sheet date, the Group revises its estimates of the number of shares and awards that are expected to vest.

It recognises the impact of the revis

ion of or

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.

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 are determined using an estimat

ion of expected d

idends.

•

Sharesave Plan valuations are 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.

	2023¹			2022¹
	Cash	Equity	Total	Cash	Equity	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Deferred share awards	34	103	137	16	92	108
Other share awards	19	70	89	20	71	91
Total share-based payments²	53	173	226	36	163	199

No forfeiture during the year

2 The total Share based payments charge during the year includes costs relating to Business ventures. Business ventures are established as separate legal entit

ies

with their own employee share ownership plans (ESOP) to attract and incent

ise talent. ESOPs have been set up with share based payment charges recorded in

2023 with $14 mill

ion

in Cash settled and $3 mill

ion equ

ity settled deferred awards spread across 11 entit

ies

Financ

ial statements

Notes to the ﬁnancial statements

448

Standard Chartered

– Annual Report 2023

31. Share-based payments

continued

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 from 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.

–

replacement buy-out awards to new joiners who forfe

it awards on leaving their previous employers. These vest in the

quarter most closely following the date when the award would have vested at the previous employer. This enables the

Group to meet regulatory requirements relating to buy-outs, and is in line with market practice. In line with sim

ilar plans

operated by our competitors, these 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 eight 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 2023, 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

relative 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 value of the rema

ing components

is based on the expected performance

against the RoTE and strategic measures in the scorecard and the resulting estimated number of shares expected to vest

at each reporting date. These combined values are used to determine the accounting charge.

No div

idend equ

ivalents accrue for the LTIP awards made in 2023, 2022 or 2021 and the fair value takes this into account,

calculated by reference to market consensus div

idend y

ield.

	2023	2022
Grant date	13–March	14–March
Share price at grant date (£)	7.40	4.88
Vesting period (years)	3–7	3–7
Expected div ided y ield (%)	3.1	3.4
Fair value (RoTE) (£)	1.91, 1.85	1.24, 1.20
Fair value (TSR) (£)	1.08, 1.04	0.70, 0.68
Fair value (Strategic) (£)	2.54, 2.46	1.65, 1.60

Valuation – deferred 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 2023, 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 – variable remuneration

Grant date

	2023
	18 September	19 June	13 March
Share price at grant date (£)	7.43	6.75	7.40

Vesting period (years)

	Expected		Expected		Expected
	div idend y ield	Fair value	div idend y ield	Fair value	div idend y ield	Fair value
	(%)	(£)	(%)	(£)	(%)	(£)
1-3 years	N/A	7.43	3.3	6.75	3.1	7.4
1-5 years	3.0	6.51	3.3, 3.3	6.23, 5.83	3.1, 3.1	6.85, 6.65
3-7 years	–	–	–	–	3.1, 3.1, 3.1, 3.1	6.65, 6.75,
						6.35, 6.16

Financ

ial statements

Standard Chartered

– Annual Report 2023

449

31. Share-based payments

continued

		2022
Grant date	09 November			20 June		14 March
Share price at grant date (£)	5.62			6.04		4.88
	Expected			Expected		Expected
	div idend y ield		Fair value	div idend y ield	Fair value	div idend y ield	Fair value
Vesting period (years)	(%)		(£)	(%)	(£)	(%)	(£)
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,	4.88, 4.48,
						3.4, 3.4	4.41, 4.34
3-7 years	–		–	–	–	3.4,3.4,3.4	4.48, 4.13, 3.99

Deferred share awards – buy-outs

				2023
Grant date	20-Nov		18-Sep		19-Jun		13-Mar
Share price at grant date (£)	6.60		7.43		6.75		7.40
	Expected		Expected		Expected		Expected
	div idend		div idend		div idend		div idend
	yield	Fair value	yield	Fair value	yield	Fair value	yield	Fair value
Vesting period (years)	(%)	(£)	(%)	(£)	(%)	(£)	(%)	(£)
3 months			3.0	7.38	3.3	6.7	3.1	7.34
4 months	3.0	6.54
6 months			3.0	7.32	3.3	6.64
7 months	3.0	6.49
9 months			3.0	7.27	3.3	6.48, 6.59
10 months	3.0	6.44
1 year	3.0	6.25, 6.30,	3.0	7.06, 7.11,	3.3	6.18, 6.38,	3.1	7.12, 7.18
		6.35, 6.39		7.16, 7.22		6.43, 6.54
2 years	3.0	6.12, 6.16,	3.0	6.85, 6.9,	3.3	5.98, 6.18,	3.1	6.91, 6.96
		6.21		6.95, 7.01		6.33
3 years	3.0	5.94, 5.98,	3.0	6.65, 6.7,	3.3	5.98, 5.79,	3.1	6.70, 6.75
		6.03		6.8		6.13
4 years	3.0	5.76					3.1	6.50, 6.55
5 years							3.1	6.35

				2022
Grant date	28 November		09 November		20 June		14 March
Share price at grant date (£)	5.90		5.62		6.04		4.88
	Expected		Expected		Expected		Expected
	div idend	Fair value	div idend	Fair value	div idend	Fair value	div idend	Fair value
Vesting period (years)	yield (%)	(£)	yield (%)	(£)	yield (%)	(£)	yield (%)	(£)
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		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		3.4
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

Financ

ial statements

Notes to the ﬁnancial statements

450

Standard Chartered

– Annual Report 2023

31. Share-based payments

continued

All Employee Sharesave Plans

Sharesave Plans

The 2013 Sharesave Plan expired in May 2023 and a new 2023 Sharesave Plan was approved by shareholders at the Annual

General Meeting in May 2023. Under the 2023 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 Sharesave Plans 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 restr

ict

ions. In these countr

ies, where possible, the Group offers an equivalent cash-based

alternative to its employees.

The remain

ing l

ife of the 2023 Sharesave Plan during which new awards can be made is ten years. The 2013 Sharesave Plan

has expired and no further awards will be granted under this plan.

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)

	2023	2022
Grant date	18 September	28 November
Share price at grant date (£)	7.35	5.80
Exercise price (£)	5.88	4.23
Vesting period (years)	3	3
Expected volatil ity (%)	36.7	39.3
Expected option life (years)	3.5	3.33
Risk-free rate (%)	4.48	3.21
Expected div idend y ield (%)	3.0	3.4
Fair value (£)	3.05	2.08

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.

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 2023 Sharesave Plan in any calendar year if, at the time of its proposed

grant, it would cause the number of Standard Chartered PLC ordinary shares allocated in the period of 10 calendar years ending

with that calendar year, under the 2021 Plan or 2023 Sharesave Plan and under any other employee share plan operated by

Standard Chartered PLC to exceed 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 2023 Sharesave Plan in any calendar year if, at the time of its proposed

grant, it would cause the number of Standard Chartered PLC ordinary shares which may be issued or transferred pursuant to

awards then outstanding under the 2021 Plan or 2023 Sharesave Plan as relevant to exceed such number as represents 10 per

cent of the ordinary share capital of Standard Chartered PLC in issue at that time.

The number of Standard Chartered PLC ordinary shares which may be issued pursuant to awards granted 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 2023 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 waivers from strict compliance with Rules 17.03A, 17.03B(1), 17.03E and 17.03(18) of the

Rules Governing the List

ing of Secur

ies on the Stock Exchange of Hong Kong. Deta

ils are set out in the market announcements

made on 30 March 2023. . In relation to the waiver of strict compliance with Note 1 to 17.03(18), in 2023 no changes to the Plan

rules have been proposed and therefore the Board has not been required to exercise its discret

ion.

Financ

ial statements

Standard Chartered

– Annual Report 2023

451

31. Share-based payments

continued

Reconcil

iat

ion of share award movements for the year ending 31 December 2023

				Weighted
	Discret ionary¹			Sharesave average
		Deferred		exercise price
	LTIP	shares	Sharesave	(£)
Outstanding at 1 January 2023	11,339,951	46,449,040	17,109,519	3.81
Granted 2,3	2,142,057	21,668,459	5,668,325	–
Lapsed	(1,911,931)	(1,231,514)	(1,407,502)	4.14
Exercised	(622,695)	(19,817,781)	(4,468,125)	3.75
Outstanding at 31 December 2023	10,947,382	47,068,204	16,902,217	4.49
Total number of securit ies ava ilable for issue under the plan	10,947,382	47,068,204	16,902,217
Percentage of the issued shares this represents as at 31 December 2023	0.41	1.76	0.63	4.49
Exercisable as at 31 December 2023	–	685,077	2,482,392	3.16
Range of exercise prices (£)³	–	–	3.14 – 5.88
Intrins ic value of vested but not exerc ised options ($ mill ion)	–	5.81	11.08
Weighted average contractual remain ing l ife (years)	7.59	8.11	2.30
Weighted average share price for awards exercised during the period (£)	6.94	7.04	6.65

Granted under the 2021 Plan and 2011 Plan. Employees do not contribute to the cost of these awards.

2. 2,134,238 (LTIP) granted on 13 March 2023, 6,501 (LTIP) granted as a notional div

idend on 1 March 2023, 1,318 (LTIP) granted as a not

ional div

idend on 1 September

2023; 20,828,385 (Deferred shares) granted on 13 March 2023, 121,314 (Deferred shares) granted as a notional div

idend on 1 March 2023, 338,583 (Deferred shares)

granted on 19 June 2023, 235,186 (Deferred shares) granted on 18 September 2023, 52,082 (Deferred shares) granted as a notional div

idend on 1 September 2023,

92,909 (Deferred shares) granted on 20 November 2023; 5,668,325 (Sharesave) granted on 18 September 2023 under the 2023 Sharesave Plan.

3. For Sharesave granted in 2023 the exercise price is £5.88 per share, a 20% discount from the average of the closing prices over the ﬁve days to the inv

itat

ion date

of 21 August 2023. The closing share price on 18 August 2023 was £7.214

Reconcil

iat

ion of share award movements for the year ending 31 December 2022

				Weighted
	Discret ionary¹			Sharesave average
		Deferred		exercise price
	LTIP	shares	Sharesave	(£)
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.

2. 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 shares) granted on 14 March 2022, 77,479 (Deferred shares) granted as a notional div

idend on 1 March 2022, 584,322 (Deferred shares)

granted on 20 June 2022, 43,918 (Deferred shares) granted as a notional div

idend on 8 August 2022, 771,103 (Deferred shares) granted on 9 November 2022,

126,757 (Deferred shares) granted on 28 November 2022 under the 2021 Plan. 5,777,197 (Sharesave) granted on 28 November 2022 under the 2013 Sharesave Plan.

3. 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

Financ

ial statements

Notes to the ﬁnancial statements

452

Standard Chartered

– Annual Report 2023

32. Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

Accounting policy

Associates and jo

int arrangements

The Group did not have any contractual interest in jo

int operat

ions.

Investments in associates and jo

int ventures are accounted for by the equ

ity method of accounting and are in

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.

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.

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.

	2023	2022
Investments in subsid iary undertak ings	$mill ion	$mill ion
As at 1 January	60,975	60,429
Addit ions 1	1,566	1,545
Disposal 2	(1,750)	(999)
As at 31 December	60,791	60,975

Includes internal Addit

ional T

ier 1 Issuances of $992 mill

ion by Standard Chartered Bank and $575 m

ill

ion add

ional

investment in Standard Chartered Holdings

Lim

ited (31 December 2022: Add

ional T

ier 1 issuances of $1 bill

ion by Standard Chartered Bank and $500 m

ill

ion by Standard Chartered Bank (Hong Kong) Ltd)

Includes redemption of Addit

ional T

ier1 capital of $1 bill

ion by Standard Chartered Bank (31 December 2022: Add

ional T

ier1 capital of $1 bill

ion by Standard

Chartered Bank)

Financ

ial statements

Standard Chartered

– Annual Report 2023

453

32. Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

continued

At 31 December 2023, 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:

		Group interest
		in ordinary
		share capital
Country and place of incorporation or registrat ion	Main areas of operation	%
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 ina¹	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

		Group interest
		in ordinary
		share capital
Country and place of incorporation or registrat ion	Main areas of operation	%
Standard Chartered Bank (Thai) Public Company Lim ited,
Thailand	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	68.29

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 $35 mill

ion

(31 December 2022: $(6.2) mill

ion) of the (loss)/Proﬁt attr

ibutable to non-controlling interest and $290 mill

ion (31 December 2022:

$261 mill

ion) of the equ

ity attributable to non-controlling interests.

During 2023 the Group disposed of its investments in Pembroke Group Lim

ited (Isle of Man), Pembroke A

ircraft Leasing Holdings

Lim

ited and Pembroke A

ircraft Leasing (Tianjin) Lim

ited (Ch

ina). The carrying amount was composed of Property, plant and

equipment of $3,249 mill

ion, Goodw

ill and intang

ible assets of $23 m

ill

ion, Other assets of $124 m

ill

ion and Other l

iab

ies of

$292 mill

ion. The pr

inc

ipal act

ity of these subs

iar

ies was the aviat

ion ﬁnance leas

ing business. In Q1 2023, the aviat

ion

ﬁnance leasing business was classif

ied as held for sale and was subsequently sold on 2nd November 2023 for a total

considerat

ion of $3,570 m

ill

ion. The ga

in on sale of the business was $309 mill

ion. In add

ion the Group d

isposed of its wholly

owned subsid

iar

ies Cardspal Pte. Ltd. and Kozagi during 2023. The gain on sale of Cardspal Pte. Ltd. and Kozagi comprised

$12 mill

ion and $7 m

ill

ion, respect

ively.

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.

Financ

ial statements

Notes to the ﬁnancial statements

454

Standard Chartered

– Annual Report 2023

32. Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

continued

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 2023, the total cash and balances with central banks was $70 bill

ion (31 December 2022:

$58 bill

ion) of wh

ich $6 bill

ion (31 December 2022: $9 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.

Contractual requirements

The encumbered assets in the balance sheet of the Group’s subsid

iar

ies are not available for transfer around the Group.

Share of proﬁt from investment in associates and jo

int ventures compr

ises:

	2023	2022
	$mill ion	$mill ion
Loss from investment in jo int ventures	(13)	(7)
Proﬁt from investment in associates	154	163
Total	141	156

	2023	2022
Interests in associates and jo int ventures	$mill ion	$mill ion
As at 1 January	1,631	2,147
Exchange translation difference	16	(232)
Addit ions¹	64	26
Share of proﬁts	141	156
Div idend rece ived⁴	(11)	(58)
Disposals	–	(1)
Impairment 2	(872)	(336)
Share of FVOCI and Other reserves	(7)	(79)
Other movements 3	4	8
As at 31 December	966	1,631

Includes $17 mill

ion non-cash cons

iderat

ion (Intellectual Property – r

ight to use) from SBI Zodia Custody Co. Ltd

Impairment mainly relates to the Group’s investment in its associate China Bohai Bank (Bohai) $850mill

ion and CurrencyFa

ir Lim

ited (Za

i) $21 mill

ion

Movement related to CurrencyFair Lim

ited

Include distr

ibut

ion ($7 mill

ion)

in cash from Ascenta IV

During 2023 the Group disposed of its 13.09% share of investment in associate Metaco SA for a total considerat

ion of $18 m

ill

ion.

The entire amount was recognised as gain on sale.

A complete list of the Group’s interest in associates is included in Note 40. The Group’s princ

ipal assoc

iates are:

			Group interest in
	Nature of	Main areas of	ordinary share
Associate	activ it ies	operation	capital %
China Bohai Bank	Banking	China	16.26
CurrencyFair Lim ited Exchange Ireland	Banking	Ireland	43.42

The Group’s ownership percentage in China Bohai Bank is 16.26%.

Although the Group’s investment in China Bohai Bank is less than 20 per cent , it is considered to be an associate because of the

sign

iﬁcant

inﬂuence the Group is able to exercise over its management and ﬁnanc

ial and operat

ing polic

ies. Th

is inﬂuence is

exercised through Board representation and the provis

ion of techn

ical expertise to Bohai. The Group applies the equity method

of accounting for investments in associates.

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 sooner, the Group recogn

ises 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 2023 in the Group’s consolidated statement of income and consolidated statement of

comprehensive income for the year ended 31 December 2023, respectively.

There have been sign

iﬁcant developments s

ince 2022, which have required an impa

irment to the Group’s carry

ing amount of

the investment in Bohai. These events include Bohai’s lower reported net proﬁt in 2023 (compared to 2022) as well as banking

industry challenges and property market uncertaint

ies

in Mainland China, that may impact Bohai’s future proﬁtab

ity.

If the Group did not have sign

iﬁcant

inﬂuence over Bohai, the investment would be measured at fair value rather than the

current carrying value, which is based on the applicat

ion of the equ

ity method as described in the accounting policy note.

Financ

ial statements

Standard Chartered

– Annual Report 2023

455

32. Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

continued

Impairment testing

At 31 December 2023, 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

of $850 mill

ion was requ

ired in 2023 (2022: $308 mill

ion

impa

irment). Total

impa

irment

is recorded in the ‘Goodwill, property,

plant and equipment and other impa

irment’ l

ine in the Consolidated Income Statement, under Central & other items segment.

The carrying value of the Group’s investment in Bohai of $700 mill

ion (2022: $1,421 m

ill

ion) represents the h

igher of the value

in use and fair value less costs to sell. The ﬁnanc

ial forecasts used

in the VIU calculation reﬂects Group management’s best

estimate of Bohai’s future earnings consider

ing the s

ign

iﬁcant developments expla

ined above.

	2023	2022
Bohai	$mill ion	$mill ion
VIU	700	1,421
Carrying amount 1	700	1,421
Market capital isat ion 2	418	685

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

cashﬂows to the equity holders, after adjust

ing for 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 Group management’s best est

imates of future proﬁts available to ordinary

shareholders and have been determined with reference to the latest published ﬁnanc

ial results and h

istor

ical performance

of Bohai

•

The projections use ava

ilable informat

ion and

include normalised performance over the forecast period, inclus

ive of: (

i) asset

growth assumptions based on the long-term GDP growth rate for Mainland China; (i

i) ECL assumpt

ions using Bohai’s

histor

ical reported ECL, based on the proport

ion of ECL from loans and advances to customers and ﬁnanc

ial

investments

measured at amortised cost and FVOCI. This was further adjusted for banking industry challenges and property market

uncertaint

ies; (

i) Net Interest Margin (NIM) increases from 2025 with reference to third party market interest rate forecasts

in China; (iv) Net fee income estimated according to the latest available performance of Bohai and contribut

ion of the

constituent parts (trading and fee income) ; and (v) Effective Tax Rate (ETR) based on Bohai’s histor

ical reported results

for the short term projection, updated, for the med

ium and long term to a more conservative view

•

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 GDP growth rate for Mainland China is used to extrapolate the expected short to medium term earnings to

perpetuity to derive a terminal value; and

•

Capital maintenance ratio consists of a capital haircut taken in order to estimate Bohai’s target regulatory capital

requirements over the forecast period. This haircut takes into account movements in risk weighted assets (RWA) projected

based on the histor

ical proport

ion of RWA to total assets and the total capital required (Core CET 1 and Min

imum Core CET 1

ratios), includ

ing requ

ired retained earnings over time to meet the target capital ratios. RWA project

ion

is adjusted to reﬂect

management’s best estimates for the impact of implement

ing Basel 3.1, effect

ive 1 January 2024 in China.

The VIU model was reﬁned during 2023 to include a projected summary balance sheet and more granular income statement

assumptions for each period. While it is impract

icable for the Group to est

imate the impact on future periods, the key changes

to the 2023 model are summarised as follows:

•

Asset growth rates, net interest income margin and ECL assumptions were applied to the relevant balance sheet lines to

produce the proﬁt and loss forecasts for each period

•

RWAs were modelled as a percentage of total assets, to reﬂect the potential capital impact(s) of regulatory changes

(e.g., Basel 3.1) in each period. For the purposes of the VIU for 31 December 2023, it was assumed that the min

imum CET 1 rat

is 8.0% (2022: 7.5%) over the forecast and terminal periods

•

Consistent with the model updates explained above, net fee income was modelled separately from net interest income.

Prior to its use, the 2023 VIU model was calibrated using the 2022 modelled assumptions.

Financ

ial statements

Notes to the ﬁnancial statements

456

Standard Chartered

– Annual Report 2023

32. Investments in subsid

iary undertak

ings, jo

int ventures and assoc

iates

continued

The key assumptions used in the VIU calculation are as follows:

	2023	2022
	per cent	per cent
Pre-tax discount rate	13.68	13.03
Long term GDP growth rate	4.00	4.00
Total assets growth rate	4.00	N/A 1
RWA as percentage of total assets	63.87–67.06	N/A 1
Net interest margin	1.21–1.48	1.50–1.84
Net fee income growth rate	4.00	N/A 1
Expected credit losses as a percentage of customer loans	0.80-1.24	0.90-1.45
Expected credit losses as a percentage of ﬁnanc ial investments measured at amortised cost and FVOCI	0.35-0.67	N/A 1
Effective tax rate	12.02–16.00²	16.00
Capital maintenance ratio 3	8.28	8.06

These assumptions were not explic

itly modelled

in 2022, therefore no comparative ﬁgures are presented

Bohai’s latest available effective tax rate (12.02%) was only used for the ﬁrst year of the cash ﬂows. Thereafter, 16.00% was applied, consistent with previous

periods

Core CET 1 reported by Bohai

The table below discloses sensit

ies to the key assumpt

ions of Bohai, according to management judgement of reasonably

possible changes. Changes were applied to every cash ﬂow year on an ind

idual basis. The percentage change to the

assumptions reﬂects the level at which management assess the reasonableness of the assumptions used and their impact

on the Value in Use.

	Key assumption change
		Increase	Decrease
		Headroom/	Headroom/
		(Impairment)	(Impairment)
Sensit iv it ies	basis points	$ mill ion	$ mill ion
Discount Rate	100	(126)	169
Long term GDP growth rate¹	100	135	(100)
Total assets growth rate	100	41	(40)
RWA as percentage of total assets	100	(26)	26
Net interest margin	10	452	(282)²
Net fee income	100	53	(51)
Expected credit losses as a percentage of customer loans	10	(275)	275
Expected credit losses as a percentage of ﬁnanc ial investments measured at amortised
cost and FVOCI	10	(131)	131
Effective tax rate	100	(25)	25
Capital maintenance ratio	50	(199)	199

Changes in long term GDP growth rate applied only to the calculation of the terminal value

Market capital

isat

ion of Bohai at 31 December 2023 was used as impa

irment ﬂoor

The following table sets out the summarised ﬁnanc

ial statements of Ch

ina Bohai Bank prior to the Group’s share of the

associate’s proﬁt being applied:

	30 Sep 2023	30 Sep 2022
	$mill ion	$mill ion
Total assets	246,212	236,396
Total liab il it ies	230,101	220,662
Operating income 1	3,640	3,958
Net proﬁt 1	811	1,186
Other comprehensive income 1	(38)	(457)

This represents twelve months of earnings (1 October to 30 September)

Financ

ial statements

Standard Chartered

– Annual Report 2023

457

33. Structured entit

ies

Accounting policy

Structured entit

ies are consol

idated when the substance of the relationsh

ip between the Group and the structured ent

ity

ind

icates the Group has power over the contractual relevant act

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.

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.

	2023	2022
	$mill ion	$mill ion
Aircraft and ship leasing	52	3,531
Princ ipal and other structured ﬁnance	353	330
Total	405	3,861

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.

The table below presents the carrying amount of the assets recognised in the ﬁnanc

ial statements relat

ing to variable interests

held in unconsolidated structured entit

ies, the max

imum exposure to loss relating to those interests and the total assets of

the structured entit

ies. Max

imum exposure to loss is primar

ily l

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.

			2023						2022
	Asset-			Princ ipal			Asset-			Princ ipal
	backed		Structured	Finance	Other		backed		Structured	Finance	Other
	securit ies	Lending	ﬁnance	funds	activ it ies	Total	securit ies	Lending	ﬁnance	funds	activ it ies	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Group’s interest –
assets
Financ ial assets held
at fair value through
proﬁt or loss	954	269	143	137	–	1,503	851	–	–	136	–	987
Loans and advances/
Investment securit ies
at amortised cost	17,795	15,105	13,353	–	190	46,443	18,696	21,667	14,261	–	246	54,870
Investment securit ies
(fair value through
other comprehensive
income)	2,443	–	–	–	–	2,443	2,248	–	–	–	–	2,248
Other assets	–	–	34	–	–	34	–	–	–	8	–	8
Total assets	21,192	15,374	13,530	137	190	50,423	21,795	21,667	14,261	144	246	58,113
Off-balance sheet	–	8,869	6,691	–	20	15,580	–	9,675	8,710	93	–	18,478
Group’s maximum
exposure to loss	21,192	24,243	20,221	137	210	66,003	21,795	31,342	22,971	237	246	76,591
Total assets of
structured entit ies	191,627	15,374	31,806	250	1,688 240,745		177,194	17,925	35,732	291	1,828 232,970

Financ

ial statements

Notes to the ﬁnancial statements

458

Standard Chartered

– Annual Report 2023

33. Structured entit

ies

continued

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:

Corporate Lending comprises secured lending in the normal course of business to third parties through

structured entit

ies.

•

Structured ﬁnance:

Structured ﬁnance comprises interests in transactions that the Group or, more usually, a customer has

structured, using one or more structured entit

ies, wh

ich provide beneﬁc

ial arrangements for customers. The Group’s exposure

primar

ily represents the prov

ion of fund

ing to these structures as a ﬁnanc

ial

intermed

iary, for wh

ich it receives a lender’s

return. The transactions largely relate to real estate ﬁnanc

ing and the prov

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.

In the above table, the Group determined the total assets of the structured entit

ies us

ing following bases:

•

Asset Backed Securit

ies, Pr

inc

ipal F

inance, and Other activ

ies are based on the published total assets of the structured

entit

ies.

•

Lending and Structured Finance are estimated based on the Group’s loan values to the structured entit

ies

34. Cash ﬂow statement

Adjustment for non-cash items and other adjustments included with

income statement

	Group		Company
	2023	2022	2023	2022
	$mill ion	$mill ion	$mill ion	$mill ion
Amortisat ion of d iscounts and premiums of investment securit ies	(704)	237	–	–
Interest expense on subordinated liab il it ies	951	570	632	615
Interest expense on senior debt securit ies in issue	2,068	794	1,434	696
Other non-cash items	(578)	(12)	8	301
Pension costs for deﬁned beneﬁt schemes	61	58	–	–
Share-based payment costs	219	199	–	–
Impairment losses on loans and advances and other credit
risk provis ions	508	836	–	–
Div idend income from subsid iar ies	–	–	(4,738)	(1,047)
Other impa irment	1,008	439	–	–
Gain on disposal of property, plant and equipment	(31)	(62)	–	–
Loss on disposal of FVOCI and AMCST ﬁnanc ial assets	209	190	–	–
Depreciat ion and amort isat ion	1,071	1,186	–	–
Fair value changes taken to Income statement	(1,666)	(365)	(202)	–
Foreign Currency revaluation	299	(365)	19	–
Proﬁt from associates and jo int ventures	(141)	(156)	–	–
Total	3,274	3,549	(2,847)	565

Financ

ial statements

Standard Chartered

– Annual Report 2023

459

34. Cash ﬂow statement

continued

Change in operating assets

	Group		Company
		2022
	2023	(Restated)	2023	2022
	$mill ion	$mill ion	$mill ion	$mill ion
Decrease/(increase) in derivat ive ﬁnancial instruments	13,061	(11,873)	(19)	259
(Increase)/decrease in debt securit ies, treasury b ills and equity shares
held at fair value through proﬁt or loss 1	(29,477)	9,067	(4,068)	289
(Increase)/decrease in loans and advances to banks and customers 1	(787)	14,381	–	–
Net decrease/(increase) in prepayments and accrued income	82	(1,056)	–	–
Net decrease/(increase) in other assets	2,663	2,470	268	(806)
Total	(14,458)	12,989	(3,819)	(258)

Decrease in debt securit

ies, treasury b

ills and equity shares held at fair value through proﬁt or loss for 2022 has been restated by $(821) mill

ion and the decrease

in loans and advances to banks and customers for 2022 has been restated by $14,355 mill

ion (refer note 35)

Change in operating liab

ies

	Group		Company
	2023	2022	2023	2022
	$mill ion	$mill ion	$mill ion	$mill ion
(Decrease)/increase in derivat ive ﬁnancial instruments	(13,629)	17,145	(239)	1,004
Net increase/(decrease) in deposits from banks, customer
accounts, debt securit ies in issue, Hong Kong notes in circulat ion
and short posit ions	17,877	(9,259)	4,479	106
Increase in accruals and deferred income	1,106	1,381	153	4
Net decrease in other liab il it ies	(3,377)	(481)	(1,154)	(2,080)
Total	1,977	8,786	3,239	(966)

Disclosures

	Group		Company
	2023	2022	2023	2022
	$mill ion	$mill ion	$mill ion	$mill ion
Subordinated debt (includ ing accrued interest):
Opening balance	13,928	16,885	13,895	16,395
Proceeds from the issue	18	750	–	750
Interest paid	(563)	(667)	(545)	(619)
Repayment	(2,160)	(1,848)	(2,160)	(1,800)
Foreign exchange movements	146	(338)	146	(337)
Fair value changes from hedge accounting	311	(1,502)	271	(1,098)
Accrued interest and others	536	648	516	604
Closing balance	12,216	13,928	12,123	13,895

Senior debt (includ ing accrued interest):
Opening balance	32,288	29,904	14,080	16,981
Proceeds from the issue	15,261	11,902	5,105	1,500
Interest paid	(1,145)	(845)	(434)	(506)
Repayment	(6,471)	(7,838)	(2,037)	(2,980)
Foreign exchange movements	(21)	(729)	(2)	(431)
Fair value changes from hedge accounting	119	(1,051)	188	(1,014)
Accrued interest and others	1,319	945	618	530
Closing balance	41,350	32,288	17,518	14,080

Financ

ial statements

Notes to the ﬁnancial statements

460

Standard Chartered

– Annual Report 2023

35. Cash and cash equivalents

Accounting policy

Cash and cash equivalents includes:

•

Cash and balances at central banks’, except for restricted balances; and

•

Other balances listed in the table below, when they have less than three months’ maturity from the date of acquis

ion,

are not subject to contractual restrict

ions, are subject to

ins

ign

icant changes

in value, are highly liqu

id and are held for

the purpose of meeting short-term cash commitments. This includes products such as treasury bills and other elig

ible b

ills,

short-term government securit

ies, loans and advances to banks (

includ

ing reverse repos), and loans and advances to

customers (placements at central banks), which are held for appropriate business purposes.

Cash and balances at central banks’ includes both cash held in restricted accounts and on demand or placements which

are contractually due to mature overnight only. Other placements with central banks are reported as part of ‘Loans and

advances to customers’.

Following a reassessment of the nature and purpose of balances held with central banks, customers and banks, the Group’s

cash and cash equivalents balance for 31 December 2022 and 1 January 2022 has been restated. The following balances have

been ident

iﬁed by the Group as be

ing cash and cash equivalents based on the criter

ia descr

ibed above.

	Group		Company
		2022
	2023	(Restated)	2023	2022
	$mill ion	$mill ion	$mill ion	$mill ion
Cash and balances at central banks	69,905	58,263	–	–
Less: restricted balances	(6,153)	(9,173)	–	–
Treasury bills and other elig ible b ills	5,931	12,661	–	–
Loans and advances to banks	11,879	10,144	–	–
Loans and advances to customers	25,829	24,586	–	–
Investments	244	1,114	–	–
Amounts owed by and due to subsid iary undertak ings	–	–	10,294	7,417
Total	107,635	97,595	10,294	7,417

The Group’s cash and cash equivalents balance for 31 December 2022 has been restated to increase the balance by $8,876

mill

ion as balances w

ith central banks that met the cash and cash equivalents deﬁn

ion were orig

inally

included in loans and

advances to customers ($24,586 mill

ion) but not

included in cash and cash equivalents and there were balances included

in cash and cash equivalents related to loans and advances to banks ($10,414 mill

ion), treasury b

ills and other elig

ible b

ills

($5,275 mill

ion) as well as Investments ($21 m

ill

ion) that d

id not meet the cash and cash equivalents deﬁn

ion. The cash

and cash equivalents balance at the beginn

ing of the year for 2022 has also been restated to decrease the balance by

$4,659 mill

ion. On the 2022 cash ﬂow statement for Group, the change

in operating assets has also been restated by

$13,534 mill

ion as a result of these changes.

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.

	2023	2022
	$mill ion	$mill ion
Salaries, allowances and beneﬁts in kind	42	39
Share-based payments	26	26
Bonuses paid or receivable	5	4
Terminat ion beneﬁts	-	1
Total	73	70

Transactions with directors and others

At 31 December 2023, 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:

	2023		2022
	Number	$mill ion	Number	$mill ion
Directors 1	4	–	3	–

Outstanding loan balances were below $50,000

Financ

ial statements

Standard Chartered

– Annual Report 2023

461

36. Related party transactions

continued

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 2023, Standard Chartered Bank had in place a charge over $68 mill

ion (31 December 2022: $89 m

ill

ion) of

cash assets in favour of the independent trustee of its employer ﬁnanced retirement beneﬁt scheme.

Other than as disclosed in the Annual Report and Accounts, there were no other transactions, arrangements or agreements

outstanding for any director, connected person or ofﬁcer of the Company which have to be disclosed under the Act, the rules

of the UK List

ing Author

ity or the Hong Kong List

ing Rules.

Details of non-revenue transactions with Temasek Holdings (Private) Lim

ited are set out on page 220.

Company

The Company has received $1,469 mill

ion (31 December 2022: $1,012 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.

	2023			2022
		Standard			Standard
		Chartered Bank			Chartered Bank
	Standard	(Hong Kong)		Standard	(Hong Kong)
	Chartered Bank	Lim ited	Others 1	Chartered Bank	Lim ited	Others 1
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Assets
Due from subsid iar ies	10,208	60	25	6,860	141	255
Derivat ive ﬁnancial instruments	62	12	–	47	–	–
Debt securit ies	20,524	4,775	1,070	18,787	4,469	526
Total assets	30,794	4,847	1,095	25,694	4,610	781
Liab il it ies
Due to subsid iar ies	–	–	–	2	–	–
Derivat ive ﬁnancial instruments	1,104	–	–	1,283	61	–
Total liab il it ies	1,104	–	–	1,285	61	–

Others include Standard Chartered Bank (Singapore) Lim

ited, Standard Chartered Hold

ings Lim

ited and Standard Chartered I H L

ited

Associate and jo

int ventures

The following transactions with related parties are on an arm’s length basis:

2023

$mill

ion

2022

$mill

ion

Assets

Loans and advances

–

Financ

ial Assets held at FVTPL

Derivat

ive assets

Total assets

Liab

ies

Deposits

959

610

Other Liab

ies

Total liab

ies

961

629

Loan commitments and other guarantees¹

113

164

The maximum loan commitments and other guarantees during the period were $113 mill

ion (2022: $164 m

ill

ion)

37. Post balance sheet events

On 11 January 2024, Standard Chartered PLC issued $1.5 bill

ion 6.097 per cent F

ixed Rate Reset Notes due 2035. On 19 January

2024, Standard Chartered PLC issued SGD 335 mill

ion 4.00 per cent F

ixed Rate Reset Notes due 2030

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 2023.

This will reduce the number of ordinary shares in issue by cancelling the repurchased shares.

A ﬁnal div

idend for 2023 of 21 cents per ord

inary share was declared by the directors after 31 December 2023.

Financ

ial statements

Notes to the ﬁnancial statements

462

Standard Chartered

– Annual Report 2023

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.

	2023	2022
	$mill ion	$mill ion
Audit fees for the Group statutory audit	27.8	22.2
Of which fees for the audit of Standard Chartered Bank Group	20.6	16.3
Fees payable to EY for other services provided to the SC PLC Group:
Audit of Standard Chartered PLC subsid iar ies	13.4	12.8
Total audit fees	41.2	35.0
Audit-related assurance services	6.0	5.5
Other assurance services	7.0	4.3
Other non-audit services	0.8	0.1
Transaction related services	0.3	0.3
Total non-audit fees	14.1	10.2
Total fees payable	55.3	45.2

The following is a descript

ion of the type of serv

ices included with

in the categor

ies listed above:

•

Audit fees for the Group statutory audit are in respect of fees payable to Ernst & Young LLP for the statutory audit of the

consolidated ﬁnanc

ial statements of the Group and the separate ﬁnancial statements of Standard Chartered PLC

•

Audit-related fees consist of fees such as those for services required by law or regulation to be provided by the auditor, reviews

of inter

im ﬁnancial

informat

ion, report

ing on regulatory returns, reporting to a regulator on client assets and extended work

performed over ﬁnancial

informat

ion and controls author

ised by those charged with governance

•

Other assurance services include agreed-upon-procedures in relation to statutory and regulatory ﬁl

ings

•

Transaction related services are fees payable to Ernst & Young LLP for issu

ing comfort letters

Expenses incurred in respect of their role as auditor, were reimbursed to EY LLP $0.9 mill

ion (2022: $0.6 m

ill

ion).

39. Standard Chartered PLC (Company)

Classif

icat

ion and measurement of ﬁnanc

ial

instruments

	2023				2022
			Non-trading				Non-trading
			mandatorily				mandatorily
	Derivat ives		at fair value		Derivat ives		at fair value
	held for	Amortised	through		held for	Amortised	through
	hedging	cost	proﬁt or loss	Total	hedging	cost	proﬁt or loss	Total
Financ ial assets	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Derivat ives	80	–	–	80	61	–	–	61
Investment securit ies	–	6,944	19,425 1	26,369	–	8,423	15,358 1	23,781
Amounts owed by subsid iary
undertakings	–	10,294	–	10,294	–	7,417	–	7,417
Total	80	17,238	19,425	36,743	61	15,840	15,358	31,259

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

idary undertakings,

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, Standard Chartered Bank (Hong Kong) Lim

ited and external counterpart

ies.

Debt securit

ies compr

ise securit

ies held at amort

ised cost issued by Standard Chartered Bank and SC Ventures Holdings Lim

ited

and have a fair value equal to carrying value of $6,944 mill

ion (31 December 2022: $8,423 m

ill

ion).

Financ

ial statements

Standard Chartered

– Annual Report 2023

463

39. Standard Chartered PLC (Company)

continued

In 2023 and 2022, amounts owed by subsid

iary undertak

ings have a fair value equal to carrying value.

	2023				2022
			Designated				Designated
	Derivat ives		at fair value		Derivat ives		at fair value
	held for	Amortised	through		held for	Amortised	through
	hedging	cost	proﬁt or loss	Total	hedging	cost	proﬁt or loss	Total
Financ ial l iab il it ies	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Derivat ives	1,104	–	–	1,104	1,343	–	–	1,343
Debt securit ies in issue	–	17,142	14,007	31,149	–	13,891	10,397	24,288
Subordinated liab il it ies and other
borrowed funds	–	9,248	2,697	11,945	–	11,239	2,445	13,684
Amounts owed to subsid iary
undertakings	–	–	–	–	–	2	–	2
Total	1,104	26,390	16,704	44,198	1,343	25,132	12,842	39,317

Derivat

ives held for hedg

ing are held at fair value and are classif

ied as Level 2 wh

ile the counterparty is Standard Chartered

Bank and Standard Chartered Bank (Hong Kong) Lim

ited.

The fair value of debt securit

ies

in issue held at amortised cost is $17,195 mill

ion (2022: $13,611 m

ill

ion).

The fair value of subordinated liab

ies and other borrowed funds held at amort

ised cost is $8,717 mill

ion (2022: $10,434 m

ill

ion).

Derivat

ive ﬁnancial

instruments

	2023			2022
	Notional			Notional
	princ ipal			princ ipal
	amounts	Assets	Liab il it ies	amounts	Assets	Liab il it ies
Derivat ives	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Foreign exchange derivat ive contracts:
Forward foreign exchange	8,968	32	–	9,351	47	61
Currency swaps	563	–	35	574	–	71
Interest rate derivat ive contracts:
Swaps	14,819	43	1,069	15,423	–	1,211
Forward rate agreements and options	–	–	–	–	–	–
Credit derivat ive contracts	4,030	5	–	3,256	14	–
Total	28,380	80	1,104	28,604	61	1,343

Credit risk

	2023	2022
	$mill ion	$mill ion
Derivat ive ﬁnancial instruments	80	61
Debt securit ies	26,369	23,781
Amounts owed by subsid iary undertak ings	10,294	7,417
Total	36,743	31,259

In 2023 and 2022, amounts owed by subsid

iary undertak

ings were neither past due nor impa

ired; the Company had no

ind

idually impa

ired loans.

In 2023 and 2022, 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.

Financ

ial statements

Notes to the ﬁnancial statements

464

Standard Chartered

– Annual Report 2023

39. Standard Chartered PLC (Company)

continued

Liqu

ity risk

The following table analyses the residual contractual maturity of the assets and liab

ies of the Company on a

discounted basis:

	2023
		Between	Between	Between	Between	Between	Between	More than
		one month	three	six months	nine months	one year	two years	ﬁve years
	One month	and three	months and	and nine	and one	and two	and ﬁve	and
	or less	months	six months	months	year	years	years	undated	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Assets
Derivat ive ﬁnancial
instruments	32	–	–	–	–	10	27	11	80
Investment securit ies	–	–	–	–	–	3,853	5,581	16,935	26,369
Amount owed by subsid iary
undertakings	1,598	504	1,530	12	1,073	1,082	3,254	1,241	10,294
Investments in subsid iary
undertakings	–	–	–	–	–	–	–	60,791	60,791
Other assets	–	–	–	–	–	–	–	–	–
Total assets	1,630	504	1,530	12	1,073	4,945	8,862	78,978	97,534
Liab il it ies
Derivat ive ﬁnancial
instruments	11	26	17	–	–	93	171	786	1,104
Senior debt	–	–	–	–	–	7,242	14,020	9,887	31,149
Amount owed to subsid iary
undertakings	–	–	–	–	–	–	–	–	–
Other liab il it ies	278	202	135	30	5	–	–	–	650
Subordinated liab il it ies and
other borrowed funds	996	51	8	172	440	330	1,952	7,996	11,945
Total liab il it ies	1,285	279	160	202	445	7,665	16,143	18,669	44,848
Net liqu id ity gap	345	225	1,370	(190)	628	(2,720)	(7,281)	60,309	52,686

	2022
		Between	Between	Between	Between	Between	Between	More than
		one month	three	six months	nine months	one year	two years	ﬁve years
	One month	and three	months and	and nine	and one	and two	and ﬁve	and
	or less	months	six months	months	year	years	years	undated	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Assets
Derivat ive ﬁnancial
instruments	45	–	–	–	–	–	16	–	61
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	60,975
Total assets	2,764	1,250	140	–	840	1,523	7,448	78,269	92,234
Liab il it ies
Derivat ive ﬁnancial
instruments	77	3	–	–	–	75	330	858	1,343
Senior debt	–	–	–	–	–	2,090	14,155	8,043	24,288
Other debt securit ies in issue	–	–	–	–	–	–	–	–	–
Amount owed to subsid iary
undertakings	–	–	–	–	–	–	–	2	2
Other liab il it ies	175	134	95	14	5	–	–	–	423
Subordinated liab il it ies and
other borrowed funds	2,004	88	13	248	14	1,900	2,078	7,339	13,684
Total liab il it ies	2,256	225	108	262	19	4,065	16,563	16,242	39,740
Net liqu id ity gap	508	1,025	32	(262)	821	(2,542)	(9,115)	62,027	52,494

Financ

ial statements

Standard Chartered

– Annual Report 2023

465

39. Standard Chartered PLC (Company)

continued

Financ

ial l

iab

ies on an und

iscounted basis

					2023
		Between	Between	Between	Between	Between	Between	More than
		one month	three	six months	nine months	one year	two years	ﬁve years
	One month	and three	months and	and nine	and one	and two	and ﬁve	and
	or less	months	six months	months	year	years	years	undated	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Derivat ive ﬁnancial
instruments	11	26	17	–	–	93	171	786	1,104
Debt securit ies in issue	247	57	328	398	278	8,490	16,396	11,279	37,473
Subordinated liab il it ies and
other borrowed funds	1,059	134	34	208	556	410	2,304	13,968	18,673
Other liab il it ies	5	91	–	–	–	–	–	–	96
Total liab il it ies	1,322	308	379	606	834	8,993	18,871	26,033	57,346

					2022
		Between	Between	Between	Between	Between	Between	More than
		one month	three	six months	nine months	one year	two years	ﬁve years
	One month	and three	months and	and nine	and one	and two	and ﬁve	and
	or less	months	six months	months	year	years	years	undated	Total
	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion	$mill ion
Derivat ive ﬁnancial
instruments	77	3	–	–	–	75	330	858	1,343
Debt securit ies in issue	88	66	262	145	271	2,896	15,676	9,057	28,461
Subordinated liab il it ies and
other borrowed funds	2,097	174	33	273	17	2,035	2,552	14,668	21,849
Other liab il it ies	9	15	–	–	–	–	–	–	24
Total liab il it ies	2,271	258	295	418	288	5,006	18,558	24,583	51,677

40. Related undertakings of the Group

As at 31 December 2023, the Group’s interests in related undertakings in accordance with Section 409 of the Companies Act

2006 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 Nominees 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.

Subsid

iary Undertak

ings

Proportion

of shares

Name and registered address

Activ

ity

Place of incorporation

Descript

ion 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

US$1.00 Ordinary

100

SC (Secretaries) Lim

ited

Others

United Kingdom

£1.00 Ordinary

100

SC Transport Leasing 1 LTD

7,8

Leasing Business

United Kingdom

£1.00 Ordinary

100

SC Transport Leasing 2 Lim

ited

7,8

Leasing Business

United Kingdom

£1.00 Ordinary

100

SC Ventures G.P. Lim

ited

Investment Holding

Company

United Kingdom

£1.00 Ordinary

100

SC Ventures Holdings Lim

ited

Investment Holding

United Kingdom

US$1.00 Ordinary

100

Company

US$1.00 Redeemable

Preference

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

100

Shoal Lim

ited

Dig

ital marketplace for

sustainable and “green”

products.

United Kingdom

US$1.00 Ordinary

100

Stanchart Nominees Lim

ited ⁹

Nominee Services

United Kingdom

£1.00 Ordinary

100

Standard Chartered Africa Lim

ited

7,8

Investment Holding

Company

United Kingdom

£1.00 Ordinary

100

Financ

ial statements

Notes to the ﬁnancial statements

466

Standard Chartered

– Annual Report 2023

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
Standard Chartered Bank	Banking & Financ ial	United Kingdom	US$0.01 Non-Cumulative
	Services		Irredeemable Preference	100
			US$1.00 Ordinary	100
			US$5.00 Non-Cumulative
			Redeemable Preference	100
Standard Chartered Foundation 1	Charity projects	United Kingdom	Guarantor	100
Standard Chartered Health Trustee (UK)
Lim ited	Trustee Services	United Kingdom	£1.00 Ordinary	100
Standard Chartered Holdings Lim ited⁹	Investment Holding
	Company	United Kingdom	US$2.00 Ordinary	100
Standard Chartered I H Lim ited	Investment Holding
	Company	United Kingdom	US$1.00 Ordinary	100
Standard Chartered Leasing (UK)
Lim ited 7,8	Leasing Business	United Kingdom	US$1.00 Ordinary	100
Standard Chartered NEA Lim ited	Investment Holding
	Company	United Kingdom	US$1.00 Ordinary	100
Standard Chartered Nominees (Private
Clients UK) Lim ited	Nominee Services	United Kingdom	US$1.00 Ordinary	100
Standard Chartered Nominees Lim ited⁹	Nominee Services	United Kingdom	£1.00 Ordinary	100
Standard Chartered Securit ies (Afr ica)	Investment Holding
Holdings Lim ited 7,8	Company	United Kingdom	US$1.00 Ordinary	100
Standard Chartered Strategic	Investment Holding	United Kingdom	£1.00 Ordinary	100
Investments Lim ited 7,8	Company		US$1.00 Ordinary	100
Standard Chartered Trustees (UK)
Lim ited	Trustee Services	United Kingdom	£1.00 Ordinary	100
The BW Leasing Partnership 1 LP 1	Leasing Business	United Kingdom	Lim ited Partnersh ip Interest	100
The BW Leasing Partnership 2 LP 1	Leasing Business	United Kingdom	Lim ited Partnersh ip Interest	100
The BW Leasing Partnership 3 LP 1	Leasing Business	United Kingdom	Lim ited Partnersh ip Interest	100
The BW Leasing Partnership 4 LP 1	Leasing Business	United Kingdom	Lim ited Partnersh ip Interest	100
The BW Leasing Partnership 5 LP 1	Leasing Business	United Kingdom	Lim ited Partnersh ip Interest	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
The following companies have the
address of 1 Poultry, London, EC2R 8EJ,
United Kingdom
Assembly Payments UK Ltd¹	Payment Services Provider	United Kingdom	US$1.00 Ordinary	100
CurrencyFair (UK) Lim ited¹	Banking & Financ ial
	Services	United Kingdom	£1.00 Ordinary	100
Zai Technologies Lim ited 1	Payment Services Provider	United Kingdom	£1.00 Ordinary	100
The following companies have the
address of 2 More London Rivers ide,
London , SE1 2JT, United Kingdom
Bricks (C&K) LP 1	Lim ited Partnersh ip interest	United Kingdom	Lim ited Partnersh ip Interest	100
Bricks (T) LP 1	Lim ited Partnersh ip interest	United Kingdom	Lim ited Partnersh ip Interest	100
Bricks (C) LP 1	Lim ited Partnersh ip interest	United Kingdom	Lim ited Partnersh ip Interest	100
The following companies have the
address of 1 Bartholomew Lane,
London, EC2N 2AX, United Kingdom
Corrasi Covered Bonds LLP	Trustee Services	United Kingdom	Membership Interest	100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

467

Standard Chartered

– Annual Report 2023

Financ

ial 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 5th Floor, Holland House

1-4 Bury Street, London, EC3A 5AW,

United Kingdom

Zodia Custody Lim

ited

Custody Services

United Kingdom

US$1.00 Voting Ordinary

95.1

US$2.70 Series A Preferred

15.911

Zodia Holdings Lim

ited

Investment Holding

Company

United Kingdom

US$1.00 A Ordinary

100

The following companies have the

address of 6th Floor, 1 Basinghall Avenue,

London, EC2V 5DD, United Kingdom

Zodia Markets (UK) Lim

ited

Banking & Financ

ial

Services

United Kingdom

US$1.00 Ordinary

100

Zodia Markets Holdings Lim

ited

Dig

ital Venture: Hold

ing

Company for The Zodia

Markets Group

United Kingdom

US$1.00 Ordinary

80.461

The following company has the address

of 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

The following companies have the

address of Level 22, 120 Spencer Street,

Melbourne VIC 3000 VIC 3000, Australia

Assembly Payments Australia Pty Ltd ¹

Holding Company

Australia

US$ Ordinary

100

Zai Australia Pty Ltd

Payment Service Provider

Australia

AUD0.01 Ordinary

100

The following company has the address

of Milsons Landing, Level 5, 6A Glen

Street, Milsons Point NSW NSW 2061,

Australia

CurrencyFair Australia Pty Ltd ¹

Foreign Currency

conversion services.

Australia

AUD Ordinary

100

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

100

The following companies have the

address of 5th Floor Standard House

Bldg, The Mall, Queens Road,

PO Box 496, Gaborone, Botswana

Standard Chartered Bank Botswana

Lim

ited

Banking & Financ

ial

Services

Botswana

BWP Ordinary

75.827

Standard Chartered Bank Insurance

Agency (Proprietary) Lim

ited

Insurance Services

Botswana

BWP Ordinary

100

Standard Chartered Botswana

Education Trust

CSR programme.

Botswana

Trust Interest

100

Standard Chartered Botswana

Nominees (Proprietary) Lim

ited

Nominee Services

Botswana

BWP Ordinary

100

Standard Chartered Investment Services

(Proprietary) Lim

ited

Nominee Services

Botswana

BWP Ordinary

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

100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Notes to the ﬁnancial statements

468

Standard Chartered

– Annual Report 2023

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following company has the address
of G01-02, Wisma Haj i Mohd Taha
Build ing, , Jalan Gadong, BE4119, Brune i
Darussalam
Standard Chartered Securit ies (B) Sdn
Bhd	Investment Management	Brunei Darussalam	BND1.00 Ordinary	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	Banking & Financ ial
S.A.	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 ¹	Dig ital Payment platform	Canada	CAD Common	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
The following company has the address
of c/o Maples Finance Lim ited,
PO Box 1093 GT, Queensgate House,
Georgetown, Grand Cayman,
Cayman Islands
SCB Investment Holding Company	Investment Holding
Lim ited	Company	Cayman Islands	US$1,000.00 Ordinary-A	99.999
The following company has the address
of Room 2619, No 9, Linhe West Road,
Tianhe Distr ict, Guangzhou, Ch ina
Guangzhou CurrencyFair Information	Foreign Currency

Technology Lim ited 1,3	conversion services.	China	CNY Ordinary	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	Serve as a fund manager in
(Shenzhen) Lim ited	China	China	US$1.00 Ordinary	100
The following company has the address
of Units 1101B (Ofﬁce use only), No. 235
Tianhebe i Rd.,, T ianhe Distr ict,
Guangzhou City, Guangdong Province,
China
Standard Chartered (Guangzhou)
Business Management Co., Ltd.	Business consulting services	China	US$ Ordinary	100
The following company has the address
of Standard Chartered Tower, 201
Century Avenue, Pudong, Shanghai,
200120, China
Standard Chartered Bank (China)
Lim ited 3	Commercial banking	China	CNY Ordinary	100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Standard Chartered

– Annual Report 2023

469

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following company has the address
of Unit 802B, 803, 1001A,100
2B,1003-1005,1101-1105,, 201-
1205,1302C,1303, No. 235 Tianhe North
Road, Tianhe Distr ict,, Guangzhou C ity,
Guangdong Province, China
Standard Chartered Global Business	Research, development,
Services (Guangzhou) Co., Ltd. 3	other services	China	US$ Ordinary	100
The following company has the address
of No. 35, Xinhuanbe i Road, Teda, T ianjin,
300457, China
Standard Chartered Global Business	Research, development,
Services Co., Ltd 3	other services	China	US$ Ordinary	100
The following company has the address
of 1201 1-2, 15-16, 12/F, Unit No.1, Build ing
No.1, No. 1 Dongsanhuan Zhong Road,
Chaoyang Distr ict, Be ijing, China
Standard Chartered Securit ies (Ch ina)	Banking & Financ ial
Lim ited	Services	China	CNY Ordinary	100
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)	wholesale of base metal
Lim ited 3	and its products	China	US$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
SA	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	Banking & Financ ial
Lim ited	Services	Gambia	GMD1.00 Ordinary	74.852
The following company has the address
of Taunusanlage 16, 60325, Frankfurt am
Main, Germany
Standard Chartered Bank AG	Banking & Financ ial
	Services	Germany	€ Ordinary	100
The following company has the address
of Standard Chartered Bank Build ing, 87
Independance Avenue, Ridge, ACCRA,
Greater ACCRA, GA-016-4621, Ghana
Solvezy Technology Ghana Ltd	Dig ital Venture	Ghana	GHS Ordinary	100
The following companies have the
address of Standard Chartered Bank
Build ing, No. 87, Independence Avenue,
P.O. Box 768, Accra, Ghana
Standard Chartered Bank Ghana PLC	Banking & Financ ial	Ghana	GHS Ordinary	69.416
	Services		GHS0.52 Non-cumulative
			Irredeemable Preference	87.043
Standard Chartered Ghana Nominees
Lim ited	Nominee Services	Ghana	GHS Ordinary	100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Notes to the ﬁnancial statements

470

Standard Chartered

– Annual Report 2023

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
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	100
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 ¹	Online payment platform	Hong Kong	HKD Ordinary	100
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 ¹	Foreign Currency
	conversion services.	Hong Kong	HKD Ordinary	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	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 im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Amethyst Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Angelite Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Beryl Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Emerald Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Flax Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Gloxin ia Sh ipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Hazel Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Ilex Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Iridot Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Mimosa Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Moonstone Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Peridot Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Sapphire Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Marina Tourmaline Shipp ing L im ited	Leasing Business	Hong Kong	US$ Ordinary	100
Standard Chartered Securit ies (Hong	Corporate Finance &
Kong) Lim ited	Advisory Services	Hong Kong	HKD Ordinary	100
Marina Leasing Lim ited	Leasing Business	Hong Kong	US$ Ordinary	100
Standard Chartered Leasing Group	Investment Holding
Lim ited	Company	Hong Kong	US$ Ordinary	100
Standard Chartered Trade Support (HK)	Corporate Finance &
Lim ited	Advisory Services	Hong Kong	HKD Ordinary	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	68.291

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Standard Chartered

– Annual Report 2023

471

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following company has the address
of 13/F Standard Chartered Bank
Build ing, 4-4A Des Voeux Road Central,
Hong Kong,
Standard Chartered Asia Lim ited	Investment Holding	Hong Kong	HKD Deferred	100
	Company		HKD Ordinary	100
The following company has the address
of 32/F., 4-4A Des Voeux Road, Central ,
Hong Kong
Standard Chartered Bank (Hong Kong)	Banking & Financ ial	Hong Kong	HKD Ordinary-A	100
Lim ited⁹	Services		HKD Ordinary-B	100
			US$ Ordinary-C	100
			US$ Ordinary-D	100
The following company has the address
of 14th Floor, One Taikoo Place, 979 King’s
Road, Quarry Bay, Hong Kong
Standard Chartered PF Real Estate
(Hong Kong) Lim ited	Ultimate Holding Company	Hong Kong	US$ Ordinary	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	Investment Holding
Lim ited	Company	Hong Kong	HKD Ordinary	100
The following companies have 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	100
Standard Chartered Trustee (Hong
Kong) Lim ited	Trustee Services	Hong Kong	HKD Ordinary	100
The following company has the address
of 5/F, Manulife Place, 348 Kwun Tong
Road, Kowloon, Hong Kong
Zodia Custody (Hong Kong) Lim ited	Custody Services	Hong Kong	US$0.01 Ordinary	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	Activ it ies auxil iary to
Lim ited ¹	ﬁnancial intermed iat ion	India	INR100.00 Ordinary	100
The following companies have the
address of Ground Floor, Crescenzo
Build ing, G Block, C 38/39 , Bandra Kurla
Complex, Bandra (East) , Mumbai ,
Maharashtra , 400051, India
St Helen’s Nominees India Private
Lim ited	Nominee Services	India	INR10.00 Equity	100
Standard Chartered Private Equity
Advisory (India) Private Lim ited	Support Services	India	INR1,000.00 Equity	100
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	100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Notes to the ﬁnancial statements

472

Standard Chartered

– Annual Report 2023

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
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	100
The following company has the address
of 90 M.G.Road, II Floor, Fort, Mumbai,
Maharashtra, 400001, India
Standard Chartered Finance Private
Lim ited	Support Services	India	INR10.00 Ordinary	98.683
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	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 is ion, Ward No. 150, Bengaluru,
560102, India
Standard Chartered Research and	Support Services	India	INR10.00 Compulsory
Technology India Private Lim ited			Convertible Cumulative
			Preference	100
			INR10.00 Equity Class - A	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)	Banking & Financ ial
Lim ited	Services	India	INR10.00 Equity	100
The following company has the address
of B001, Metrotech Forest View, Sy.No,
67/5 BSK 6th Stage, Thalaghattapura
Bengaluru 560062, Karnataka, India
SCV Research and Development Pvt. Ltd.	Others	India	INR 10.00 Ordinary	100
The following company has the address
of The Icon Business Park Blok P Nomor
03, RT 03/RW 09Sampora, Kec, Cisauk,
Kabupaten Tangerang, Banten, 15345,
Indonesia
PT Labamu Sejahtera Indonesia	Others	Indonesia	IDR10,000.00 Ordinary	100
The following companies have the
address of 91 Pembroke Road, Dublin 4,
Ballsbridge, Dublin, DO4 EC42, Ireland
CurrencyFair (Canada) Lim ited¹	Dig ital Payment platform	Ireland	€1.00 Ordinary	100
CurrencyFair Lim ited 1,10	FX transfer services	Ireland	€0.001 A Ordinary	100
			€0.001 Ordinary	27.951
CurrencyFair Nominees Lim ited ¹	Nominee company	Ireland	€1.00 Ordinary	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	US$1.00 Ordinary	100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Standard Chartered

– Annual Report 2023

473

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following company has the address
of 32 Molesworth Street, Dublin 2,
D02Y512, Ireland
Zodia Markets (Ireland) Lim ited	Banking & Financ ial
	Services	Ireland	US$1.00 Ordinary	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	US$1.00 Ordinary	100
			US$1.00 Redeemable
			Preference	100
Standard Chartered Isle of Man Lim ited 5	Insurance & Reinsurance
	Company	Isle of Man	US$1.00 Ordinary	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)	Banking & Financ ial
Lim ited	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	US$1.00 Ordinary	100
The following company has the address
of IFC 5, St Helier, JE1 1ST, Jersey
Standard Chartered Funding (Jersey)	Investment Holding
Lim ited 5, ⁹	Company	Jersey	£1.00 Ordinary	100
The following companies have the
address of Standard Chartered@
Chiromo, 48 Westlands Road, P. O. Box
30003 - 00100, Nairob i , Kenya
Standard Chartered Bancassurance
Intermediary Lim ited	Insurance Services	Kenya	KES100.00 Ordinary	100
Standard Chartered Bank Kenya Lim	ited Banking & Financ ial	Kenya	KES5.00 Ordinary	74.318
	Services
			KES5.00 Preference	100
Standard Chartered Financ ial Serv ices
Lim ited	Merchant Banking	Kenya	KES20.00 Ordinary	100
Standard Chartered Investment Services
Lim ited	Investment services	Kenya	KES20.00 Ordinary	100
Standard Chartered Kenya Nominees
Lim ited1	Nominee Services	Kenya	KES20.00 Ordinary	100
Standard Chartered Securit ies (Kenya)	Corporate Finance &
Lim ited	Advisory Services	Kenya	KES10.00 Ordinary	100
Solvezy Technology Kenya Lim ited	Dig ital Venture	Kenya	KES1,000.00 Ordinary	100
Tawi Fresh Kenya Lim ited	Dig ital Marketplace,
	Ecommerce	Kenya	KES1,000.00 Ordinary	100
The following company has the address
of 47, Jong-ro, Jongno-gu, Seoul, 110-702,
Korea, Republic of
Standard Chartered Bank Korea Lim	ited Banking & Financ ial
	Services	Korea, Republic of	KRW5,000.00 Ordinary	100
The following company has the address
of 2F, 47, Jong-ro, Jongno-gu, Seoul,
Korea, Republic of
Standard Chartered Securit ies Korea Co.,
Ltd	Asset Management	Korea, Republic of	KRW5,000.00 Ordinary	100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Notes to the ﬁnancial statements

474

Standard Chartered

– Annual Report 2023

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following company has the address
of Atrium Build ing, Maarad Street, 3rd
Floor, P.O. Box 11-4081 Raid El Solh, Beirut
Central Distr ict, Lebanon
Standard Chartered Metropolitan	Investment Holding
Holdings SAL	Company	Lebanon	US$10.00 Ordinary A	100
The following company has the address
of Level 13, Menara 1 Sentrum 201, Jalan
Tun Sambanthan, Brickf ields, 50470
Kuala Lumpur, Malaysia
Assembly Payments Malaysia Sdn. Bhd. ¹	Other ﬁnancial serv ice
	activ it ies	Malaysia	RM Ordinary	100
The following companies have the
address of Level 25, Equatorial Plaza,
Jalan Sultan Ismail, 50250 Kuala Lumpur,
Malaysia
Cartaban (Malaya) Nominees Sdn
Berhad	Nominee Services	Malaysia	RM Ordinary	100
Cartaban Nominees (Asing) Sdn Bhd	Nominee Services	Malaysia	RM Ordinary	100
Cartaban Nominees (Tempatan) Sdn
Bhd	Nominee Services	Malaysia	RM Ordinary	100
Golden Maestro Sdn Bhd	Investment Holding
	Company	Malaysia	RM Ordinary	100
Price Solutions Sdn Bhd	Direct Sales/Collection
	Services	Malaysia	RM Ordinary	100
SCBMB Trustee Berhad	Trustee Services	Malaysia	RM Ordinary	100
Standard Chartered Bank Malaysia	Banking & Financ ial	Malaysia	RM Irredeemable Convertible
Berhad	Services		Preference	100
			RM Ordinary	100
Standard Chartered Saadiq Berhad	Banking & Financ ial
	Services	Malaysia	RM Ordinary	100
The following companies have the
address of TMF Trust Labuan Lim ited,
Brumby Centre, Lot 42, Jalan Muhibbah,
87000 Labuan F.T., Malaysia
Marina Morganite Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Malaysia	US$ Ordinary	100
Marina Moss Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Malaysia	US$ Ordinary	100
Marina Tanzanite Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Malaysia	US$ Ordinary	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	Ordinary	91
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, Bukit Jalil, , 57000 Kuala
Lumpur, Wilayah Persekutuan, Malaysia
Standard Chartered Global Business
Services Sdn Bhd	Offshore Support Services	Malaysia	RM Ordinary	100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Standard Chartered

– Annual Report 2023

475

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following companies have the
address of Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro,
MH96960, Marshall Islands
Marina Angelica Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
Marina Aventurine Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
Marina Citr ine Sh ipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
Marina Dahlia Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
Marina Dittany Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
Marina Lilac Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
Marina Lolite Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
Marina Obsid ian Sh ipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
Marina Quartz Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
Marina Remora Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
Marina Turquoise Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
Marina Zircon Shipp ing L im ited 6	Ownership and Leasing of
	vessels	Marshall Islands	USD1.00 Ordinary	100
The following company has the address
of 6th Floor, Standard Chartered Tower ,
19, Bank Street, Cybercity, Ebene, 72201,
Maurit ius
Standard Chartered Bank (Maurit ius)	Banking & Financ	ial
Lim ited	Services	Maurit ius	Ordinary No Par Value	100
The following companies have the
address of c/o Ocorian Corporate
Services (Maurit ius) Ltd, 6th Floor, Tower
A, 1 Cybercity, Ebene, 72201, Maurit ius
Standard Chartered Private Equity
ius) II L (Maurit im ited	Investment Management	Maurit ius	US$1.00 Ordinary	100
Standard Chartered Private Equity
ius) L (Maurit im ited	Investment Management	Maurit ius	US$1.00 Ordinary	100
Standard Chartered Private Equity
ius) lll L (Maurit im ited	Investment Management	Maurit ius	US$1.00 Ordinary	100
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 im ited	Investment Holding
	Company	Maurit ius	US$1.00 Ordinary	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 im ited 1	Investment Holding
	Company	Maurit ius	Class A $1.00 Ordinary	62.001

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Notes to the ﬁnancial statements

476

Standard Chartered

– Annual Report 2023

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following company has the address
of Standard Chartered Bank Nepal
Lim ited, Madan Bhandar i Marg. Ward
No.31, Kathmandu Metropolitan City,
Kathmandu Distr ict, Bagmat i Province,
Kathmandu, 44600, Nepal
Standard Chartered Bank Nepal Lim ited	Banking & Financ ial
	Services	Nepal	NPR100.00 Ordinary	70.21
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	100
Standard Chartered Holdings (Asia
Pacif ic) B.V. 5	Holding Company	Netherlands	€4.50 Ordinary	100
Standard Chartered Holdings
(International) B.V. 5	Holding Company	Netherlands	€4.50 Ordinary	100
Standard Chartered MB Holdings B.V. 5	Holding Company	Netherlands	€4.50 Ordinary	100
The following company has the address
of PromisePay, 4 All good Place,
Rototuna North, Hamilton, 3210,
New Zealand
PromisePay Lim ited 1	Payment Services Provider	New Zealand	NZD Ordinary	100
The following companies have the
address of 142, Ahmadu Bello Way,
Victor ia Island, Lagos, 101241, N iger ia
Standard Chartered Bank Niger ia	Banking & Financ ial	Niger ia	NGN1.00 B Redeemable
Lim ited	Services		Preference	100
			NGN1.00 Irredeemable Non
			Cumulative Preference	100
			NGN1.00 Ordinary	100
Standard Chartered Capital & Advisory	Corporate Finance &
Niger ia L im ited	Advisory Services	Niger ia	NGN1.00 Ordinary	100
Standard Chartered Nominees (Niger ia)
Lim ited	Custody Services	Niger ia	NGN1.00 Ordinary	100
The following company has the address
of 3rd Floor Main SCB Build ing, I.I
Chundrigar Road, Karachi, Sindh, 74000,
Pakistan
Price Solution Pakistan (Private) Lim ited	Banking & Financ ial
	Services	Pakistan	PKR10.00 Ordinary	100
The following company has the address
of P.O. Box No. 5556, I.I. Chundrigar Road ,
Karachi , 74000, Pakistan
Standard Chartered Bank (Pakistan)	Banking & Financ ial
Lim ited	Services	Pakistan	PKR10.00 Ordinary	98.986
The following company has the address
of 8th Floor, Makati Sky Plaza Build ing
6788, Ayala Avenue San Lorenzo, City of
Makati, Fourth Distr ict, Nat ional Capi,
1223, Phil ipp ines
Standard Chartered Group Services,
Manila Incorporated	Offshore Support Services	Phil ipp ines	PHP1.00 Ordinary	100
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	100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Standard Chartered

– Annual Report 2023

477

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
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	100
The following company has the address
of 9 & 11, Lightfoot Boston Street,
Freetown, Sierra Leone
Standard Chartered Bank Sierra Leone	Banking & Financ ial
Lim ited	Services	Sierra Leone	SLL1.00 Ordinary	80.656
The following company has the address
of 9 Rafﬂes Place, #27-00 Republic Plaza,
048619, Singapore
Actis Treit Holdings No.1 (Singapore)	Investment Holding
Private Lim ited 1	Company	Singapore	SGD Ordinary	100
Actis Treit Holdings No.2 (Singapore)	Investment Holding
Private Lim ited 1	Company	Singapore	SGD Ordinary	100
The following companies have the
address of 38 Beach Road, #29-11 South
Beach Tower, 189767, Singapore
Assembly Payments Pte. Ltd. ¹	Investment Holding	Singapore	US$ Ordinary	100
	Company		US$ Preference	100
Assembly Payments SGP Pte. Ltd. ¹	Transaction/Payment
	Processing Services	Singapore	SGD Ordinary	100
The following companies have the
address of Rafﬂes Place, #26-01 Republic
Plaza, Singapore , 048619, Singapore
Audax Financ ial Technology Pte. Ltd	Support Services	Singapore	US$ Ordinary-A	100
Autumn Life Pte. Ltd.	Support Services	Singapore	US$ Ordinary-A	96.623
CashEnable Pte. Ltd.	Dig ital Venture: F inanc ial
	Services	Singapore	US$ Ordinary-A	100
Huma.Eco Pte. Ltd.	Support Services	Singapore	US$ Ordinary	100
Letsbloom Pte. Ltd.	Others	Singapore	US$ Ordinary-A	100
Libeara (Singapore) Pte. Ltd.	Dig ital Venture: Investment
	Services	Singapore	US$ Ordinary	100
Libeara Pte. Ltd.	Dig ital Venture: Investment
	Services	Singapore	US$ Ordinary	100
Pegasus Dealmaking Pte. Ltd.	Mergers and Acquis it ions
	(M&A) marketplace	Singapore	US$ Ordinary	100
The following company has the address
of 1 Robinson Road, #17-00, AIA Tower,
048542, Singapore
CurrencyFair (Singapore) Pte.Ltd ¹	Foreign Currency
	conversion services.	Singapore	SGD Ordinary	100
The following companies have the
address of 9 Rafﬂes Place, #26-01
Republic Plaza, 048619 , Singapore
SCV Research and Development Pte. Ltd.	Others	Singapore	US$ Ordinary-A	100
Zodia Custody (Singapore) Lim ited	Custody Services	Singapore	US$ Ordinary	100
Inveco Pte. Ltd.	Venture: Carbon Credit
	Marketplace	Singapore	US$1.00 Ordinary	100
The following companies have the
address of 8 Marina Boulevard, Level 26,
Marina Bay Financ ial Centre, Tower 1,
018981, Singapore
Marina Aquata Shipp ing Pte. Ltd.	Leasing Business	Singapore	US$ Ordinary	100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Notes to the ﬁnancial statements

478

Standard Chartered

– Annual Report 2023

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
Marina Aruana Shipp ing Pte. Ltd.	Leasing Business	Singapore	SGD Ordinary	100
			US$ Ordinary	100
Marina Cobia Shipp ing Pte. Ltd.	Leasing Business	Singapore	SGD Ordinary	100
			US$ Ordinary	100
Marina Fatmarin i Sh ipp ing Pte. Ltd.	Leasing Business	Singapore	US$ Ordinary	100
Marina Frabandari Shipp ing Pte. Ltd.	Leasing Business	Singapore	US$ Ordinary	100
Marina Gerbera Shipp ing Pte. Ltd.	Leasing Business	Singapore	US$ Ordinary	100
Marina Opah Shipp ing Pte. Ltd.	Leasing Business	Singapore	SGD Ordinary	100
			US$ Ordinary	100
Marina Partawati Shipp ing Pte. Ltd.	Leasing Business	Singapore	US$ Ordinary	100
The following company has the address
of Tricor WP Corporate Services Pte Ltd,
80 Robinson Road #02-00, 068898,
Singapore
Solv-India Pte. Ltd.	Investment Holding Entity	Singapore	US$ Ordinary	100
The following companies have the
address of 9 Rafﬂes Place, #26-01
Republic Plaza , Singapore , 048619,
Singapore
Power2SME Pte. Ltd.	Investment Holding Entity	Singapore	US$ Ordinary	90.6
SCV Master Holding Company Pte. Ltd.	Investment Holding Entity	Singapore	US$ Ordinary	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	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	100
SCTS Management Pte. Ltd.	Nominee Services	Singapore	SGD Ordinary	100
Standard Chartered Bank (Singapore)	Banking & Financ ial	Singapore	SGD Non-cumulative Class C
Lim ited	Services		Tier-1 preference	100
			SGD Non-cumulative Class D
			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 Holdings	Investment Holding	Singapore	SGD Ordinary	100
(Singapore) Private Lim ited	Company		US$ Ordinary	100
Standard Chartered Nominees
(Singapore) Pte Ltd	Nominee Services	Singapore	SGD Ordinary	100
Standard Chartered Trust (Singapore)
Lim ited	Trustee Services	Singapore	SGD Ordinary	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	USD Ordinary	50

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Standard Chartered

– Annual Report 2023

479

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following companies have the
address of 9 Rafﬂes Place, #26-01
Republic Plaza, 048619, Singapore
Standard Chartered Private Equity	Investment Holding
(Singapore) Pte. Ltd	Company	Singapore	US$ Ordinary	100
Standard Chartered Real Estate
Investment Holdings (Singapore)	Investment Holding
Private Lim ited	Company	Singapore	US$ Ordinary	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	60
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	100
Standard Chartered Nominees South
Africa Proprietary Lim ited (RF)	Nominee Services	South Africa	ZAR Ordinary	100
The following company has the address
of 6 Fort Street, PO 785848, , Birnam,
Sandton, 2196 2146, South Africa
Promisepay (PTY) Ltd 1	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 i,
104, Taiwan
Standard Chartered Bank (Taiwan)	Banking & Financ ial	Taiwan (Province of
Lim ited	Services	China)	TWD10.00 Ordinary	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	Banking & Financ ial	Tanzania, United	TZS1,000.00 Ordinary	100
Lim ited	Services	Republic of
			TZS1,000.00 Preference	100
Standard Chartered Tanzania Nominees	Nominee Services	Tanzania, United
Lim ited		Republic of	TZS1,000.00 Ordinary	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	Banking & Financ ial
Company Lim ited	Services	Thailand	THB10.00 Ordinary	99.871
The following company has the address
of Buyukdere Cad. Yapi Kredi Plaza C
Blok, Kat 15, Levent, Istanbul, 34330,
Turkey
Standard Chartered Yatir im Bankas i Turk	Banking & Financ ial
Anonim Sirket i	Services	Turkey	TRL0.10 Ordinary	100
The following company has the address
of Standard Chartered Bank Bldg, 5
Speke Road, PO Box 7111, Kampala,
Uganda
Standard Chartered Bank Uganda	Banking & Financ ial
Lim ited	Services	Uganda	UGS1,000.00 Ordinary	100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Notes to the ﬁnancial statements

480

Standard Chartered

– Annual Report 2023

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following company has the address
of 14 Mackinnon Road, Nakasero,
Kampala, 141769, Uganda
Furaha Finserve Uganda Lim ited	Banking & Financ ial
	Services	Uganda	US$1.00 Ordinary	20
The following company has the address
of EX-26, Ground Floor, Bldg 16-Co Work,
Dubai Internet City, Dubai, United Arab
Emirates
Appro Onboarding Solutions FZ-LLC	IT solutions provider and
	support service provider.	United Arab Emirates	AED1,000.00 Ordinary	100
The following company has the address
of Suites 508, 509, 15th Floor, Al Sarab
Tower, Adgm Square, Al Maryah Island,
Abu Dhabi, United Arab Emirates
Financ ial Inclus ion Technologies Ltd	Dig ital wallet and
	technology payments
	platform	United Arab Emirates	US$ Ordinary-A	100
The following company has the address
of Unit GV-00-10-07-OF-02, Level 7, Gate
Village Build ing 10, Duba i International
Financ ial Centre, Duba i, United Arab
Emirates
Furaha Holding Ltd	Micro-lending Company	United Arab Emirates	US$1.00 Ordinary	100
The following company has the address
of Standard Chartered Bank, 7th Floor,
Build ing One, Gate Prec inct, DIFC, PO
Box 999, Dubai, United Arab Emirates
Global Dig ital Asset Hold ings Lim ited	Investment vehicle -
	Strategic investment	United Arab Emirates	US$ Ordinary	100
The following company has the address
of Part of Level 15, Standard Chartered
Bank Build ing, Plot 8, Burj Downtown,
Dubai, United Arab Emirates
myZoi Financ ial Inclus ion Technologies	Dig ital Venture: Act iv ity
LLC	auxil iary to ﬁnancial
	intermed iat ion	United Arab Emirates	AED1.00 Ordinary	100
The following company has the address
of 25 Taylor St, San Francisco CA
94102-3916, United States
Assembly Escrow Inc 1	Payment Services Provider	United States	US$0.0001 Ordinary	100
The following company has the address
of 251 Little Falls Drive, Wilm ington DE
19808, United States
CurrencyFair (USA) Inc¹	Dig ital Payment platform	United States	US$1.00 Uncertif icated	100
The following company has the address
of 1095 Avenue of Americas, New York
City NY 10036, United States
Standard Chartered Bank International	Banking & Financ ial
(Americas) Lim ited	Services	United States	US$1,000.00 Ordinary	100
The following companies have the
address of Corporation Trust Center,
1209 Orange Street, Wilm ington DE
19801, United States
Standard Chartered Holdings Inc.	Investment Holding
	Company	United States	US$100.00 Common	100
Standard Chartered Securit ies (North	Banking & Financ ial
America) LLC	Services	United States	Membership Interest	100

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Standard Chartered

– Annual Report 2023

481

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following company has the address
of 50 Fremont Street, San Francisco CA
94105, United States
Standard Chartered Overseas
Investment, Inc.	Ultimate Holding Company	United States	US$10.00 Ordinary	100
The following company has the address
of C/O Corporation Service Company,
251 Little Falls Drive, Wilm ington DE
19808, United States
Standard Chartered Trade Services
Corporation	Trade Services	United States	US$0.01 Common	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 i,
10000, Vietnam
Standard Chartered Bank (Vietnam)	Banking & Financ ial
Lim ited	Services	Vietnam	VND Charter Capital	100
The following company has the address
of The Company’s Registered Ofﬁce,
Vistra Corporate Services Centre,
Wickhams Cay II, Road Town, Tortola,
VG1110, Virg in Islands, Br it ish
Sky Harmony Holdings Lim ited 6	Investment Holding
	Company	Virg in Islands, Br it ish	USD1.00 Ordinary	100
The following companies have the
address of Stand No. 4642, Corner of
Mwaimwena Road and Addis Ababa
Dri, Lusaka, 10101, Zambia
Standard Chartered Bank Zambia Plc	Banking & Financ ial
	Services	Zambia	ZMW0.25 Ordinary	90
Standard Chartered Zambia Securit ies
Services Nominees Lim ited	Nominee Services	Zambia	ZMW0.0203 Ordinary	100
The following companies have the
address of Africa Unity Square Build ing,
68 Nelson Mandela Avenue, Harare,
Zimbabwe
Africa Enterprise Network Trust 2	Investment Holding
	Company	Zimbabwe	Trust Interest	100
Standard Chartered Bank Zimbabwe	Banking & Financ ial
Lim ited	Services	Zimbabwe	US$1.00 Ordinary	100
Standard Chartered Nominees
Zimbabwe (Private) Lim ited	Ultimate Holding Company	Zimbabwe	US$2.00 Ordinary	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 note 32 for the consol

idat

ion pol

icy and disclosure of the undertaking.

2. No share capital by virtue of being a trust

3. Lim

ited l

iab

ity company

4. The Group has determined the prin

icpal place of operat

ion to be Ireland

5. The Group has determined the prin

icpal place of operat

ion to be United Kingdom

6. The Group has determined the prin

icpal place of operat

ion to be Hong Kong

7. 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, Standard

Chartered Leasing (UK) Lim

ited 05513184, Standard Chartered Afr

ica Lim

ited 00002877, Standard Chartered Secur

ies (Afr

ica) Holdings Lim

ited 05843604 and

Standard Chartered Strategic Investments Lim

ited 01388304

9 Directly held related undertaking

10 Group’s ultimate ownership for CurrencyFair entit

ies

is 43.422%

40. Related undertakings of the Group

continued

Subsid

iary undertak

ings

continued

Financ

ial statements

Notes to the ﬁnancial statements

482

Standard Chartered

– Annual Report 2023

40. Related undertakings of the Group

continued

Joint ventures

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion 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	Singapore	$ Ordinary	41
	products and services.		$ Preference	100

Associates

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion 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	58.9
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	16.263
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	Partnership Interest	39.100
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	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.	Exchange offering liqu id ity
Ltd	of trade	Singapore	SGD Ordinary	15
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	22
The following company has the address
of Gervinusstrasse 17, 60322, Frankfurt
am Main, Hesse, Germany
SWIAT GmbH	Dig ital Venture: F inanc ial
	Services	Germany	€1.00 Ordinary	30
The following company has the address
of Izumi Garden Tower 19F, 1-6-1
Roppongi, Minato-ku, Tokyo, Japan
SBI Zodia Custody Co. Ltd	Others	Japan	JPY50,000.00 Ordinary	100
The following company has the address
of 60B, Orchard Road, #06-18, Tower 2,
The Atrium @ Orchard, 238891,
Singapore
Partior Holdings Pte. Ltd.	Financ ial Serv ices	Singapore	SGD1.00 Ordinary	24.999
			SGD1.00 Series A Preferred	25.014

Financ

ial statements

Standard Chartered

– Annual Report 2023

483

40. Related undertakings of the Group

continued

Sign

iﬁcant

investment holdings and other related undertakings

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion 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
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	5.272
			$0.01 Ordinary-B	100
The following companies have the
address of Unit 605-07, 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	39.689
			$ Class B Ordinary	39.689
Actis Rivendell Holdings (HK) Lim ited	Investment holding	Hong Kong	$ Class A Ordinary	39.671
			$ Class B Ordinary	39.671
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 it ies	India	INR10.00 Ordinary	26
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	26
The following company has the address
of 17F, 47, Jong-ro, Jongno-gu, (17F, 100,
Gongpyeong-dong, Jongno-gu), Seoul,
Korea, Republic of
Ascenta III	Investment making	Korea	KRW1.00 Class B Equity
			Interest	31
The following company has the address
of 3 Jalan Pisang, c/o Watiga Trust Ltd,
199070 Singapore
SCIAIGF Liqu idat ing Trust 1	Investment Holding
	Company	Singapore	Trust Interest	43.96
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	40.74
			US$0.0001 Series C3 Preferred
			Stock	8.908

The Group has determined the prin

icpal place of operat

ion to be Singapore

Financ

ial statements

Notes to the ﬁnancial statements

484

Standard Chartered

– Annual Report 2023

40. Related undertakings of the Group

continued

In liqu

idat

ion

Subsid

iary Undertak

ings

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following companies have the
address of C/O Teneo Financ ial Adv isory
Lim ited, The Colmore Bu ild ing, 20
Colmore Circus, Queensway,
Birm ingham, B4 6AT, Un ited Kingdom
Standard Chartered Masterbrand	To manage intellectual
Licens ing L im ited	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 30 Rue Schrobilgen, 2526, Luxembourg
Standard Chartered Financ ial Serv ices	Corporate Finance &
(Luxembourg) S.A.	Advisory 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	Banking 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	Financ ial counsell ing
Representacion S.A.	services	Uruguay	UYU1.00 Ordinary shares	100
The following company has the address
of 555 Washington Av, St Louis, MO,
United States of America, 63101
Assembly Payments Inc 1	Payment services provider	United States	$0.0001 Ordinary	100
The following companies have the
address of C/O Teneo Financ ial Adv isory
Lim ited, The Colmore Bu ild ing,
20 Colmore Circus, Queensway,
Birm ingham, B4 6AT, Un ited Kingdom
Standard Chartered Leasing (UK) 3
Lim ited	Leasing Business	United Kingdom	$1.00 Ordinary shares	100

485

Standard Chartered

– Annual Report 2023

Financ

ial statements

40. Related undertakings of the Group

continued

Liqu

idated/d

issolved/sold

Subsid

iary/Assoc

iate undertakings and Sign

iﬁcant

investment holdings

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
The following companies have the
address of C/O Teneo Financ ial Adv isory
Lim ited, 156 Great Charles Street,
Queensway, Birm ingham, West
Midlands, B3 3HN, United Kingdom
Standard Chartered Leasing (UK) 2
Lim ited	Leasing Business	United Kingdom	$1.00 Ordinary shares	100
The following companies have the
address of C/o WALKERS CORPORATE
LIMITED, 190 Elgin Avenue George Town
Grand Cayman KY1-9008 , Cayman
Islands
Sirat Holdings Lim ited	Investment Holding Entity	Cayman Islands	$0.01 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
Pembroke Leasing (Labuan) 3 Berhad	Leasing Business	Malaysia	$ Ordinary shares	100
The following companies have 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 companies have the
address of 142, Ahmadu Bello Way,
Victor ia Island, Lagos, 101241, N iger ia
Cherroots Niger ia L im ited	Investment Holding
	Company	Niger ia	NGN1.00 Ordinary Shares	100
The following companies have the
address of 80 Robinson Road, #02-00,
068898, Singapore
Cardspal Pte. Ltd.	Support Services	Singapore	$ Ordinary shares	100
The following companies have the
address of Vistra Corporate Services
Centre, Wickhams Cay II, Road Town,
Tortola, VG1110, Virg in Islands, Br it ish
Sky Favour Investments Lim ited	Investment Holding
	Company	Virg in Islands, Br it ish	$1.00 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
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

486

Standard Chartered

– Annual Report 2023

Financ

ial statements

Notes to the ﬁnancial statements

				Proportion
				of shares
Name and registered address	Activ ity	Place of incorporation	Descript ion of shares	held (%)
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	100
Skua Lim ited	Leasing Business	Ireland	$1.00 Ordinary shares	100
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 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	SPV for Aircraft Operating
Lim ited	Lease Business	China	CNY1.00 Ordinary shares	100

40. Related undertakings of the Group

continued

Subsid

iary/Assoc

iate undertakings and Sign

iﬁcant

investment holdings

continued

487

Standard Chartered

– Annual Report 2023

Financ

ial statements

Proportion

of shares

Name and registered address

Activ

ity

Place of incorporation

Descript

ion of shares

held (%)

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

SPV for Aircraft Operating

Lim

ited

Lease Business

China

CNY1.00 Ordinary shares

100

The following companies have the

address of 1 Basinghall Avenue, London,

EC2V 5DD, United Kingdom

Pembroke Aircraft Leasing (UK) Lim

ited

Leasing Business

United Kingdom

£1.00 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 and Leasing

of vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Amandier Shipp

ing L

ited

Ownership and Leasing

of vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Ambroisee Shipp

ing L

ited

Ownership and Leasing

of vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Buxus Shipp

ing L

ited

Ownership and Leasing

of vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Dorado Shipp

ing L

ited

Ownership and Leasing

of vessels

Marshall Islands

$1.00 Ordinary shares

100

Marina Protea Shipp

ing L

ited

Ownership and Leasing

of vessels

Marshall Islands

$1.00 Ordinary 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

42.5

The following companies has the

address of 49, Sungei Kadut Avenue,

#03-01 S729673, Singapore

Omni Centre Pte. Ltd.

Real Estate Owners &

Singapore

SGD Redeemable Convertible

Developers

Preference shares

99.998

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

US$1.00 Membership Interest

100

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

29.505

Save for those disclosed in this Annual Report , there were no other sign

iﬁcant

investments held, nor were there material

acquis

ions or disposals of subsid

iar

ies during the year under review. Apart from those disclosed in this Annual Report,

there were no material investments or addit

ions of cap

ital assets authorised by the Board at the date of this Annual Report.

40. Related undertakings of the Group

continued

Subsid

iary/Assoc

iate undertakings and Sign

iﬁcant

investment holdings

continued

Supplementary

informat

ion

490

Supplementary ﬁnancial

informat

ion

498

Supplementary people

informat

ion

504

Supplementary

sustainab

ity

informat

ion

508

2023 Sustainab

ity

Aspirat

ions

511

TCFD summary and

alignment index

517

Shareholder informat

ion

522

Main awards and accolades

523

Glossary



Our weather

photographers

of the year



We are showcasing three of the most strik

ing weather

and climate photographs captured by our colleagues,

as voted for by over 4,000 employees.

These pictures were orig

inally subm

itted as part of the

annual Standard Chartered Weather Photographer

of the Year competit

ion, organ

ised by the UK’s Royal

Meteorological Society.

Climate change will hit hardest in many of the

communit

ies and markets where we operate. Its

impact

on the environment and human health sign

iﬁcantly

affects sustainable economic growth and the future

of society. These pictures aim to draw attention to

the beauty of the planet and the importance of its

conservation. We’re committed to net zero carbon

emiss

ions

in our own operations by 2025, and ﬁnanc

ing

by 2050.

Read more on

sc.com/scwpy

488

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Zhangjiajie Nat

ional Forest Park, China

Photographer:

Irene Yuan

489

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Kolukkumalai Peak, Tamil Nadu, India

Photographer:

Akshat Tholia

Amboseli, Kenya

Photographer:

Arvind Karthik

490

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Supplementary ﬁnancial

informat

ion

Five-year summary

2023

$mill

ion

2022

$mill

ion

2021

$mill

ion

2020

$mill

ion

2019

$mill

ion

Operating proﬁt before impa

irment losses and taxat

ion

6,468

5,405

3,777

4,374

4,484

Impairment losses on loans and advances and other

credit risk provis

ions

(508)

(836)

(254)

(2,325)

(908)

Other impa

irment

(1,008)

(425)

(372)

(98)

(136)

Proﬁt before taxation

5,093

4,286

3,347

1,613

3,713

Proﬁt attributable to shareholders

3,469

2,948

2,315

724

2,303

Loans and advances to banks

44,977

39,519

44,383

44,347

53,549

Loans and advances to customers

286,975

310,647

298,468

281,699

268,523

Total assets

822,844

819,922

827,818

789,050

720,398

Deposits by banks

28,030

28,789

30,041

30,255

28,562

Customer accounts

469,418

461,677

474,570

439,339

405,357

Shareholders’ equity

44,445

43,162

46,011

45,886

44,835

Total capital resources

62,389

63,731

69,282

67,383

66,868

Information per ordinary share

Basic earnings per share

108.6c

85.9c

61.3c

10.4c

57.0c

Underlying earnings per share

128.9c

97.9c

85.8c

36.1c

75.7c

Div

idends per share

27.0c

18.0c

12.0c

–

22.0c

Net asset value per share

1,629.0c

1,453.3c

1,456.4c

1,409.3c

1,358.3c

Net tangible asset value per share

1,393.0c

1,249.0c

1,277.0c

1,249.0c

1,192.5c

Return on assets

0.4%

0.3%

0.1%

0.3%

Ratios

Reported return on ordinary shareholders' equity

7.2%

6.0%

4.2%

0.8%

4.2%

Reported return on ordinary shareholders'

tangible equity

8.4%

6.8%

4.8%

0.9%

4.8%

Underlying return on ordinary shareholders’ equity

8.7%

6.9%

5.9%

2.6%

5.6%

Underlying return on ordinary shareholders’

tangible equity

10.1%

7.7%

6.8%

3.0%

6.4%

Reported cost to income ratio (excluding UK Bank Levy)

63.5%

66.3%

73.6%

68.1%

68.7%

Reported cost to income ratio (includ

ing UK Bank Levy)

64.1%

66.9%

74.3%

70.4%

70.9%

Underlying cost to income ratio (excluding UK Bank levy)

63.4%

65.5%

69.8%

66.4%

65.9%

Underlying cost to income ratio (includ

ing UK Bank levy)

64.1%

66.2%

70.5%

68.7%

68.2%

Capital ratios:

CET 1

14.1%

14.0%

14.1%

14.4%

13.8%

Total capital

21.2%

21.7%

21.3%

21.2%

Other Impairment includes $850 mill

ion (2022: $308 m

ill

ion)

impa

irment charge relat

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

Excludes amounts held at fair value through proﬁt or loss

3 Shareholders’ funds, non-controlling interests and subordinated loan capital

4 Div

idend pa

id during the year per share

Represents proﬁt attributable to shareholders div

ided by the total assets of the Group

6 Unaudited

Supplementary ﬁnancial

informat

ion

491

Standard Chartered

– Annual Report 2023

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.

2023

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

4,167

1,074

1,158

558

2,455

1,206

241

794

102

870

Operating expenses

(1,927)

(731)

(894)

(331)

(1,214)

(865)

(191)

(392)

(870)

(634)

Operating proﬁt/(loss) before

impa

irment losses and taxat

ion

2,240

343

264

227

1,241

341

402

(768)

(236)

Credit impa

irment

(372)

(48)

(113)

(42)

(48)

(31)

(8)

Other impa

irment

(17)

(5)

(14)

(11)

(2)

(5)

(15)

(5)

Proﬁt from associates and

joint ventures

–

114

–

Underlying proﬁt/(loss)

before taxation

1,851

296

260

180

1,179

299

421

(769)

243

Total assets employed

190,484

56,638

41,508

21,638

102,724

33,781

5,470

20,376

149,982

88,113

Of which: loans and advances

to customers

87,590

33,443

15,882

11,634

62,030

13,832

2,533

8,495

31,067

27,434

Total liab

ies employed

183,112

46,666

38,252

20,365

109,825

26,532

4,355

17,214

92,168

72,583

Of which: customer accounts

155,446

37,032

31,211

18,621

86,282

18,709

3,024

13,924

72,610

40,846

2022²

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

3,441

1,140

1,154

473

1,909

1,222

214

621

1,013

1,031

Operating expenses

(1,816)

(733)

(844)

(336)

(1,082)

(766)

(183)

(369)

(742)

(603)

Operating proﬁt before

impa

irment losses and taxat

ion

1,625

407

310

137

827

456

252

271

428

Credit impa

irment

(579)

(55)

(200)

(15)

(31)

Other impa

irment

(1)

(3)

(1)

(2)

(1)

–

Proﬁt from associates and

joint ventures

–

179

–

Underlying proﬁt

before taxation

1,045

351

286

121

909

424

333

342

441

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

104,318

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

Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

492

Standard Chartered

– Annual Report 2023

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.

2023

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

5,656

181

–

5,837

Trade & Working capital

1,246

–

1,294

Cash Management

4,410

133

–

4,543

Financ

ial Markets

5,099

–

5,099

Macro Trading

2,827

–

2,827

Credit Markets

1,803

–

1,803

Credit Trading

554

–

554

Financ

ing Solut

ions & Issuance²

1,249

–

1,249

Financ

ing & Secur

ies Serv

ices²

469

–

469

Lending & Portfolio Management

469

–

498

Wealth Management

–

1,944

–

1,944

Retail Products

4,927

–

4,969

CCPL and other unsecured lending

–

1,068

–

1,161

Deposits

3,488

(52)

–

3,437

Mortgage & Auto

–

236

–

236

Other Retail Products

–

135

–

135

Treasury

–

(932)

(902)

Other

(7)

(170)

(67)

Total underlying operating income

11,218

7,106

156

(1,102)

17,378

2022 (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

3,751

123

–

3,874

Trade & Working capital

1,288

–

1,343

Cash Management

2,463

–

2,531

Financ

ial Markets

5,345

–

5,345

Macro Trading

2,965

–

2,965

Credit Markets

1,761

–

1,761

Credit Trading

488

–

488

Financ

ing Solut

ions & Issuance²

1,273

–

1,273

Financ

ing & Secur

ies Serv

ices²

619

–

619

Lending & Portfolio Management

521

–

558

Wealth Management

1,795

–

1,796

Retail Products

4,013

–

4,027

CCPL and other unsecured lending

–

1,180

–

1,202

Deposits

2,029

(9)

–

2,021

Mortgage & Auto

–

633

–

633

Other Retail Products

–

171

–

171

Treasury

–

332

337

Other

(11)

(176)

(175)

Total underlying operating income

9,608

5,969

156

15,762

Underlying income for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (i

i) Av

iat

ion F

inance and (i

i) DVA.

No change to reported performance

Shipp

ing F

inance is now reported under “Financ

ing Solut

ions & Issuance” which was reported under “Financ

ing & Secur

ies Serv

ices” in Q1‘23

493

Standard Chartered

– Annual Report 2023

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.

2023

2022

Bank deposits

$mill

ion

Customer

accounts

$mill

ion

Bankdeposits

$mill

ion

Customer

accounts

$mill

ion

Insured deposits

66,753

60,008

Current accounts

15,767

16,373

Savings deposits

–

27,376

–

26,973

Time deposits

23,517

16,599

Other deposits

–

Uninsured deposits

35,500

467,868

36,795

460,221

Current accounts

20,969

150,559

22,425

144,931

Savings deposits

–

91,425

–

90,937

Time deposits

8,295

176,977

6,870

176,090

Other deposits

6,236

48,907

7,500

48,263

Total

35,510

534,621

36,823

520,229

UK and non-UK deposits

The following table summarises the split of Bank and Customer deposits into UK and Non-UK deposits for respective account

lines based on the domic

ile or res

idence of the clients.

2023

2022

Bank deposits

$mill

ion

Customer

accounts

$mill

ion

Bank deposits

$mill

ion

Customer

accounts

$mill

ion

UK deposits

2,918

29,318

4,163

38,557

Current accounts

925

7,062

903

8,955

Savings deposits

–

330

–

420

Time deposits

310

5,412

1,004

6,760

Other deposits

1,683

16,514

2,256

22,422

Non-UK deposits

32,592

505,303

32,660

481,672

Current accounts

20,053

159,264

21,530

152,349

Savings deposits

–

118,471

–

117,490

Time deposits

7,986

195,082

5,886

185,929

Other deposits

4,553

32,486

5,244

25,904

Total

35,510

534,621

36,823

520,229

494

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Supplementary ﬁnancial

informat

ion

Contractual maturity of Loans, Investment securit

ies and Depos

its

2023

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

72,717

197,125

38,877

59,023

–

31,333

485,908

Between one and ﬁve years

3,975

52,532

69,075

–

4,174

46,365

Between ﬁve and ten years

837

19,184

18,804

–

567

Between ten years and ﬁfteen years

14,084

–

9,276

–

1,341

More than ﬁfteen years and undated

226

62,561

–

18,155

3,932

–

441

Total

77,790

345,486

38,882

174,333

3,932

35,509

534,622

Total amortised cost and FVOCI exposures

44,977

286,975

Fixed interest rate exposures

38,505

168,697

Floating interest rate exposures

6,472

118,278

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

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 Central and

other government agencies

– US

1,861

1.39

9,171

1.61

5,799

1.67

4,524

3.89

21,355

2.09

– UK

2.75

1.06

101

0.67

–

225

1.18

– Other

5,045

2.72

9,560

2.80

2,289

3.12

4.74

16,975

2.84

Other debt securit

ies

2,487

6.45

2,658

5.37

2,262

5.44

10,973

5.13

18,380

5.38

As at 31 December 2023

9,432

3.44

21,474

2.61

10,451

2.79

15,578

4.77

56,935

3.37

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

The maturity distr

ibut

ions are presented in the above table on the basis of residual 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.

495

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Average balance sheets and yields and volume and price variances

Average balance sheets and yields

The following tables set out the average balances and yields for the Group’s assets and liab

ies for the per

iods ended

31 December 2023 and 31 December 2022 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

2023

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

10,466

67,634

2,833

4.19

3.63

Gross loans and advances to banks

34,743

44,161

2,095

4.74

2.66

Gross loans and advances to customers

55,235

301,570

15,698

5.20

4.40

Impairment provis

ions aga

inst loans and advances to

banks and customers

–

(5,894)

–

Investment securit

ies – Treasury and Other El

ible B

ills

7,955

32,026

1,596

4.98

3.99

Investment securit

ies – Debt Secur

ies

29,912

133,023

5,005

3.76

3.07

Investment securit

ies – Equ

ity Shares

3,190

–

Property, plant and equipment and intang

ible assets

8,861

–

Prepayments, accrued income and other assets

126,539

–

Investment associates and jo

int ventures

1,628

–

Total average assets

278,529

572,520

27,227

4.76

3.20

Average 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

496

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Supplementary ﬁnancial

informat

ion

Average liab

ies

Average liab

ies

2023

Average

non-interest

bearing

balance

$mill

ion

Average

interest

bearing

balance

$mill

ion

Interest

expense

$mill

ion

Rate paid

total balance

Deposits by banks

14,238

24,066

796

3.31

2.08

Customer accounts:

Current accounts

41,911

132,537

3,619

2.73

2.07

Savings deposits

–

112,046

1,981

1.77

Time deposits

15,345

186,287

8,204

4.40

4.07

Other deposits

44,211

6,527

488

7.48

0.96

Debt securit

ies

in issue

12,259

65,579

3,367

5.13

4.33

Accruals, deferred income and other liab

ies

132,442

1,009

5.15

0.04

Subordinated liab

ies and other borrowed funds

–

12,299

951

7.73

Non-controlling interests

373

–

Shareholders’ funds

49,920

–

310,699

540,350

19,458

3.60

2.29

Adjustment for Financ

ial Markets fund

ing costs and

ﬁnancial guarantee fees on

interest earning assets

(1,778)

Total average liab

ies and shareholders’ funds

310,699

540,350

17,680

3.27

2.08

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 and

ﬁnancial guarantee fees on

interest earning assets

(383)

Total average liab

ies and shareholders’ funds

337,681

525,351

7,276

1.38

0.84

Net interest margin

2023

$mill

ion

2022

$mill

ion

Interest income (Reported)

27,227

15,252

Average interest earning assets

572,520

565,370

Gross yield (%)

4.76

2.70

Interest expense (Reported)

19,458

7,659

Adjustment for Financ

ial Markets fund

ing costs and ﬁnanc

ial guarantee fees on

interest earning assets

(1,778)

(383)

Interest expense adjusted for Financ

ial Markets trad

ing book funding costs and ﬁnanc

ial guarantee

fees on interest-earning assets

17,680

7,276

Average interest-bearing liab

ies

540,350

525,351

Rate paid (%)

3.27

1.38

Net yield (%)

1.49

1.32

Net interest income adjusted for Financ

ial Markets fund

ing costs and Financ

ial guarantee fees on

interest earing assets

9,547

7,976

Net interest margin (%)

1.67

1.41

497

Standard Chartered

– Annual Report 2023

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.

2023 versus 2022

(Decrease)/increase in

interest due to:

Net increase/

(decrease)

in interest

$mill

ion

Volume

$mill

ion

Rate

$mill

ion

Cash and unrestricted balances at central banks

550

1,518

2,068

Loans and advances to banks

1,185

1,242

Loans and advances to customers

(284)

5,814

5,530

Investment securit

ies

(74)

3,209

3,135

Total interest earning assets

249

11,726

11,975

Interest bearing liab

ies

Subordinated liab

ies and other borrowed funds

(208)

589

381

Deposits by banks

(105)

468

363

Customer accounts:

Current accounts and savings deposits

(458)

3,769

3,311

Time and other deposits

1,601

3,945

5,546

Debt securit

ies

in issue

258

1,940

2,198

Total interest bearing liab

ies

1,088

10,711

11,799

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

498

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Supplementary people informat

ion

Supplementary people informat

ion

Global

2023

2022

2021

% change

Full-time equivalent (FTE)

84,958

83,195

81,904

2.1

Headcount (year end)

85,007

83,266

81,957

2.1

Employed workers (permanent)

84,073

82,319

80,605

2.1

of which female

37,598

37,259

36,644

0.9

Fixed term workers (temporary)

934

947

1,352

(1.4)

of which female

453

429

637

5.6

Non-employed workers (NEW)

12,537

13,962

13,845

(10.2)

Non-outsourced NEW

4,925

5,873

6,130

(16.1)

Outsourced NEW

7,612

8,089

7,715

(5.9)

Headcount (12-month average)

85,353

82,987

82,736

2.9

Male

FTE

45,993

44,709

44,033

2.9

Headcount

46,004

44,734

44,045

2.8

Full-time

45,975

44,683

44,002

2.9

Part-time

(43.1)

Female

FTE

38,014

37,642

37,240

1.0

Headcount

38,051

37,688

37,281

1.0

Full-time

37,926

37,551

37,138

1.0

Part-time

125

137

143

(8.8)

Undisclosed

FTE

950

844

631

12.6

Headcount

952

844

631

12.8

Full-time

944

843

630

12.0

Part-time

700.0

National

ies

129

131

132

(1.5)

Posit

ion type

2023

2022

2021

% change

Management team

–

of which female

16.7

of which female (%)

53.8%

46.2%

33.3%

16.7

Management team and their direct reports

133

131

116

1.5

of which female

11.6

of which female (%)

36.1%

32.8%

28.4%

9.9

Senior leadership

4,541

4,422

4,227

2.7

of which female

1,474

1,420

1,299

3.8

of which female (%)

32.5%

32.1%

30.7%

1.1

Rest of Employees

80,466

78,844

77,730

2.1

of which female

36,577

36,268

35,982

0.9

of which female (%)

45.5%

46.0%

46.3%

(1.2)

of which who have supervisory responsib

ies

11,009

11,067

11,109

(0.5)

of which female

3,905

3,995

4,009

(2.3)

of which female (%)

35.5%

36.1%

(1.7)

Business FTE

29,909

30,589

30,921

(2.2)

Business headcount

29,929

30,619

30,940

(2.3)

of which female

15,335

15,794

15,997

(2.9)

Support services FTE

55,049

52,607

50,983

4.6

Support services headcount

55,078

52,647

51,017

4.6

of which female

22,716

21,894

21,284

3.8

499

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Region

2023

2022

2021

% change

Asia FTE

71,097

69,329

67,840

2.6

Asia headcount

71,123

69,364

67,870

2.5

Asia female headcount

32,452

32,033

31,470

1.3

Asia employed workers headcount

70,394

68,585

66,968

2.6

Asia ﬁxed term workers headcount

729

779

902

(6.4)

Asia full time headcount

71,051

69,257

67,774

2.6

Asia part time headcount

107

(32.7)

AME FTE

8,575

8,905

9,372

(3.7)

AME headcount

8,577

8,921

9,373

(3.9)

AME female headcount

3,766

3,918

4,100

(3.9)

AME employed workers headcount

8,432

8,813

8,999

(4.3)

AME ﬁxed term workers headcount

145

108

374

34.3

AME full time headcount

8,574

8,917

9,369

(3.8)

AME part time headcount

(25.0)

EA FTE

5,286

4,962

4,691

6.5

EA headcount

5,307

4,981

4,714

6.5

EA female headcount

1,833

1,737

1,711

5.5

EA employed workers headcount

5,247

4,921

4,638

6.6

EA ﬁxed term workers headcount

–

EA full time headcount

5,220

4,903

4,627

6.5

EA part time headcount

11.5

Age

2023

2022

2021

% change

< 30 years FTE

13,168

13,826

14,063

(4.8)

< 30 years headcount

13,176

13,836

14,069

(4.8)

< 30 years female headcount

6,848

7,397

7,623

(7.4)

30-50 years FTE

63,309

61,651

60,891

2.7

30-50 years headcount

63,334

61,691

60,919

2.7

30-50 years female headcount

27,432

26,870

26,583

2.1

> 50 years FTE

8,480

7,718

6,949

9.9

> 50 years headcount

8,497

7,739

6,969

9.8

> 50 years female headcount

3,771

3,421

3,075

10.2

500

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Supplementary people informat

ion

Talent management ⁸

2023

2022

2021

% change

Global voluntary turnover – FTE

8,200

12,645

10,214

(35.1)

Global turnover – FTE

9,712

14,388

13,160

(32.5)

Global voluntary turnover rate (%)

9.7%

15.5%

12.6%

(37.1)

Global turnover rate (%)

11.5%

17.6%

16.2%

(34.5)

Male turnover FTE

5,214

8,021

7,332

(35.0)

Male (%)

11.4%

18.2%

16.7%

(37.2)

Female turnover FTE

4,394

6,230

5,736

(29.5)

Female (%)

11.6%

16.8%

15.6%

(30.9)

Female as a % of global turnover FTE

45.2%

43.3%

43.6%

4.5

Asia turnover FTE

8,293

12,501

11,004

(33.7)

Asia (%)

11.8%

18.4%

16.4%

(35.9)

AME turnover FTE

858

1,046

1,454

(18.0)

AME (%)

9.9%

11.7%

15.4%

(15.1)

EA turnover FTE

562

841

703

(33.2)

EA (%)

10.9%

17.7%

15.5%

(38.5)

< 30 years turnover FTE

2,593

4,137

3,712

(37.3)

< 30 years (%)

19.2%

30.5%

26.1%

(37.3)

30-50 years turnover FTE

6,242

9,303

8,144

(32.9)

30-50 years (%)

9.9%

15.2%

13.5%

(34.8)

> 50 years turnover FTE

878

947

1,304

(7.3)

> 50 years (%)

11.0%

13.1%

19.3%

(16.5)

Average tenure (years) – Male

7.3

7.1

7.2

2.8

Average tenure (years) – Female

7.9

7.6

7.7

3.9

Global new hires – FTE

12,145

17,432

12,660

(30.3)

Global new hire rate (%)

14.2%

21.0%

15.3%

(32.3)

Male new hire FTE

6,875

9,683

6,758

(29.0)

Male (%)

14.9%

21.7%

15.2%

(31.2)

Female new hire FTE

5,044

7,384

5,580

(31.7)

Female (%)

13.2%

19.6%

14.9%

(32.9)

Female as a % of global new hires FTE

41.5%

42.4%

44.1%

(1.9)

Asia new hire FTE

10,653

15,441

11,387

(31.0)

Asia (%)

14.9%

22.4%

16.7%

(33.2)

AME new hire FTE

615

934

431

(34.2)

AME (%)

7.0%

10.2%

4.3%

(31.7)

EA new hire FTE

877

1,056

842

(17.0)

EA (%)

16.8%

21.9%

18.2%

(23.4)

< 30 years new hire FTE

4,963

7,673

5,857

(35.3)

< 30 years (%)

35.5%

54.7%

39.6%

(35.1)

30-50 years new hire FTE

6,841

9,357

6,514

(26.9)

30-50 years (%)

10.8%

15.2%

10.7%

(28.8)

> 50 years new hire FTE

341

401

290

(15.1)

> 50 years (%)

4.2%

5.4%

4.2%

(23.3)

Roles ﬁlled internally (%)

32.3%

37.3%

40.8%

(13.5)

of which ﬁlled by females (%)

41.6%

41.0%

42.8%

1.5

Absenteeism rate

(%)

1.3%

1.4%

1.6%

(2.9)

Employee job satisfact

ion (%)

83.0%

80.0%

81.0%

3.7

501

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Learning

2023

2022

2021

% change

Employees receiv

ing tra

ing (%)

99.5%

99.4%

0.0

Employees receiv

ing tra

ing for personal development (%)

96.2%

91.6%

91.7%

5.0

Female (%)

95.8%

90.0%

91.2%

6.4

Senior leadership (%)

93.4%

94.9%

96.2%

(1.5)

Average number of train

ing hours per employee

38.0

36.9

37.8

3.1

Female

37.0

35.4

37.1

4.5

Male

38.8

38.1

38.3

1.8

Employed workers

38.1

37.1

37.9

2.7

Fixed term workers

33.3

21.9

34.1

52.3

Average cost of train

ing per employee ($)

730

743

708

(1.8)

Divers

ity

2023

2022

2021

% change

% of women remained employed 12 months after their return from

parental leave

75.2%

72.4%

78.9%

3.9

% of Information Technology (IT) and/or Engineer

ing roles ﬁlled by

women

24.2%

24.0%

23.8%

0.7

% of senior leadership and managerial roles ﬁlled by women

6,13

34.6%

35.0%

34.6%

(0.9)

% of middle management roles ﬁlled by women

35.5%

36.1%

(1.6)

% of non-managerial posit

ions ﬁlled by women

47.0%

47.6%

48.0%

(1.2)

% of women total promotions

46.0%

46.1%

45.3%

(0.2)

Executive and non-executive directors

Men

–

Women

(16.7)

% of men

61.5%

57.1%

69.2%

7.7

% of women

38.5%

42.9%

30.8%

(10.3)

White Brit

ish or other Wh

ite (includ

ing m

inor

ity-Wh

ite groups)

(18.2)

Asian/Asian Brit

ish

33.3

Black/African/Caribbean/Black Brit

ish

–

Mixed/Multiple Ethnic Groups

–

White Brit

ish or other Wh

ite (includ

ing m

inor

ity-Wh

ite groups) (%)

69.2%

78.6%

76.9%

(11.9)

Asian/Asian Brit

ish (%)

30.8%

21.4%

23.1%

43.6

Black/African/Caribbean/Black Brit

ish (%)

0.0%

–

Mixed/Multiple Ethnic Groups (%)

0.0%

–

Number of senior posit

ions (CEO, CFO, SID and Cha

ir)

Men

–

Women

–

White Brit

ish or other Wh

ite (includ

ing m

inor

ity-Wh

ite groups)

–

Asian/Asian Brit

ish

–

Black/African/Caribbean/Black Brit

ish

–

Mixed/Multiple Ethnic Groups

–

502

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Supplementary people informat

ion

Divers

ity

2023

2022

2021

% change

% of Board members that have a cultural background different from

the location of the corporate headquarters

38.5%

35.7%

38.5%

7.7

Executive management

–

Men

(12.5)

Women

16.7

% of men

50.0%

57.1%

68.8%

(12.5)

% of women

50.0%

42.9%

31.3%

16.7

White Brit

ish or other Wh

ite (includ

ing m

inor

ity-Wh

ite groups)

(16.7)

Asian/Asian Brit

ish

–

Black/African/Caribbean/Black Brit

ish

–

Mixed/Multiple Ethnic Groups

–

Not specif

ied/prefer not to say

100.0

White Brit

ish or other Wh

ite (includ

ing m

inor

ity-Wh

ite groups) (%)

35.7%

42.9%

56.3%

(16.7)

Asian/Asian Brit

ish (%)

42.9%

31.3%

–

Black/African/Caribbean/Black Brit

ish (%)

7.1%

0.0%

–

Mixed/Multiple Ethnic Groups (%)

0.0%

6.3%

–

Not specif

ied/prefer not to say (%)

14.3%

7.1%

6.3%

100.0

UK senior leadership

6, 18

(% declared)

UK Black Ethnic

ity

2.5%

2.7%

(0.2)

UK Black, Asian and Minor

ity Ethn

ity

27.8%

26.4%

22.1%

5.2

US senior leadership

6, 18

(% declared)

US Black Ethnic

ity

4.0%

4.7%

3.8%

(13.8)

US Hispan

ic or Lat

inx Ethnic

ity

10.1%

9.9%

10.2%

2.1

Work-related Health & Safety

2023

2022

2021

% change

Fatalit

ies

100.0

Fatalit

ies (rate per m

ill

ion hours worked)

0.010

0.005

0.000

100.0

Major in

juries

19,20, 21, 22

(20.0)

Major in

juries (rate per mill

ion hours worked

)

0.08

0.11

0.13

(27.3)

Recordable work-related injuries

108

30.1

Recordable work-related injuries (rate per mill

ion hours worked

)

0.56

0.44

0.43

27.6

Work-related ill-health (fatalit

ies)

–

503

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Excludes 699 employees (headcount) from Dig

ital Ventures ent

ies (Appro, Audax, Autumn, Letsbloom, MyZo

i, Solv Ghana, Solv India, Solv Kenya, Solv

Malaysia, TASConnect, Tawi, Zodia Custody, Zodia Markets). Excludes 412 Person of Interest (headcount) following a recategorisat

ion of worker types from 2022,

i.e. independent non-executive directors, advisors, external auditors and regulators. Includes employees operating in discont

inued/restructured bus

inesses.

Percentage change refers to the percentage change from 2022 to 2023. All ﬁgures above are presented to 1 decimal place and the corresponding percentage

changes are derived from actual data without rounding to 1 decimal place to remain as accurate as possible.

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.

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.

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).

Senior leadership is deﬁned as Managing Directors and Bands 4 (includ

ing Management Team).

Business is deﬁned as employees directly under the remit of the businesses. Support services include employees who support businesses’ operations or

investments where costs are fully recharged to the businesses. Increase in support services in 2023 is mainly due to increase in business demand for investment

support resources and transfer of approximately 670 employees from CCIB business.

Turnover metrics are based on permanent employed workers only. New hire metrics are based on external new hires. Turnover and new hire metrics are based on

average 12 month FTE. These metrics are not shown for the undisclosed gender population due to a small population size. Turnover in 2023 declined. Voluntary

turnover in 2022 was at a histor

ical h

igh as experienced by many other organisat

ions

in the aftermath of Covid-19 pandemic. As turnover declined, the need for

hir

ing reduced accord

ingly compared to 2022, resulting in lower new hires.

Represents health and disab

ity related absence. Excludes Korea

Learning metrics exclude non-employed workers (NEWs). Train

ing for personal development

is deﬁned as all train

ing exclud

ing mandatory or role specif

train

ing. Average tra

ing hours (

includ

ing mandatory tra

ing) has been updated to

include self-declared external train

ing hours and pr

ior periods have been

restated for comparison.

Average cost of train

ing per employee

includes cost of learning management system.

Represents the % of Information Technology (IT) and/or Engineer

ing roles ﬁlled by women. IT and/or eng

ineer

ing roles

is deﬁned as employees who work in the

IT job function, includ

ing eng

ineer

ing roles (exclud

ing Innovation, Transformation & Ventures) and/or certain job famil

ies

in the Data and Analytics job function.

Represents the percentage of women that are in the respective population groups. For the purpose of this metric, managerial/middle management roles are

considered as roles which have people leader responsib

ies exclud

ing senior leadership. Non-managerial roles do not have people leader responsib

ies

Executive and non-executive directors refer to the UK PLC Board. Data has been collected by way of the directors’ annual self-declarations.

For the purpose of this metric, senior posit

ions

in the Board include the Group Chairman, Group Chief Executive, Group Chief Financ

ial Ofﬁcer and Sen

ior

Independent Director

Percentage of Board Members whose cultural background (national

ity)

is different from the location of the corporate headquarters (UK)

For the purpose of this metric, executive management refers to Management team plus Group Company Secretary as deﬁned by UK List

ing Rules

Ethnic

ity % has been der

ived based on colleagues who have declared their ethnic

ity aga

inst the overall UK/US population respectively (includ

ing colleagues

who have not made a declaration).

Includes commuting and contractors (2023 one fatality was a contractor commuting accident, one was a staff road accident)

20 Per UK HSE deﬁnit

ion.

Most common types of major in

jury are fractures (75%)

22 2023 includes 5 contractor/vis

itor. 2022

includes 1 contractor/vis

itor. 2021

includes 4 contractors/vis

itors.

23 2023 hours worked = 192,870,120. 2022 hours worked = 188,758,285. 2021 hours worked = 184,997,097

24 2023 includes 31 contractor/vis

itors. 2022

includes 18 contractors/vis

itors. 2021

includes 23 contractors/vis

itors.

504

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Supplementary sustainab

ity informat

ion

Supplementary sustainab

ity informat

ion

Environmental and Social Risk Management (ESRM)

2023

2022

2021

Number of partic

ipants

in ESRM train

ing sess

ions

2,609²

4,944³

1,280

Number of transactions reviewed

708

550

547

Number of clients reviewed

1,341

1,170

786

Client exits due to non-compliance with Posit

ion Statements

–

Equator Princ

iples report

ing

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

Cat A

Cat B

Cat C

Total 2021

–

Total 2022

–

Total 2023

–

2023

Project ﬁnance

mandates

Project-related

corporate loans

Project-related

reﬁnance

Project advisory

mandates

Sector

Min

ing

–

Infrastructure

–

Oil and Gas

–

Power

–

Others

–

Region

Americas

–

Asia-Pacif

–

Europe, Middle East

and Africa

–

Designat

ion

Designated Country

–

Non-Designated Country

–

Independent Review

Yes

–

Metric was updated in 2023 as all partic

ipants are counted for each l

ive train

ing or e-learn

ing session. An employee may attend either or both types of train

ing

during the year.

Includes 1,338 partic

ipants

in live train

ing sess

ions and 1,271 partic

ipants who completed e-learn

ing sessions.

Figure in 2022 was higher as the Group’s mandatory Sustainable Finance Foundation train

ing was launched

in this year, incorporating ESRM as part of the

curriculum. Frontline colleagues were ﬁrst required to complete the train

ing

in 2022, for other functions the timel

ine extended

into 2023.

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 (EP4), Standard Chartered now reports those transact

ions that trigger project-related reﬁnance.

8 Sectors covered under “Others” include Agro-industr

ies, Transport, Chem

icals and Manufacturing.

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.

505

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Environment

Units

Footnote

2023

2022

2021

2022–2023

% change

Measured

Scaled up

Measured

Scaled up

Measured

Scaled up

Reporting coverage of data

Ofﬁces reporting

No. of ofﬁces

762

875

838

(13)

Net internal area of

occupied property

864,932

880,515

930,327

946,234

976,520

998,571

(7)

Annual operating income from

1 October to 30 September

$mill

ion

17,414

15,863

14,541

Scope 1 and 2 GHG emiss

ions

1, 2, 4

Scope 1 emiss

ions

tCO

8,454

8,488

2,027

2,071

2,834

2,902

310

Scope 2 emiss

ions

(location-based)

tCO

84,741

85,741

88,450

89,410

94,564

96,256

(4)

Scope 2 emiss

ions

(market-based)

tCO

25,469

26,246

41,492

47,363

73,016

82,761

(45)

Total Scope 1 and 2 emiss

ions

(market-based)

tCO

33,923

34,734

43,519

49,434

75,850

85,663

(30)

Scope 1 and 2 emiss

ions

(UK and offshore area only)

tCO

248

100

Scope 3 GHG emiss

ions

1, 2

Category 1: Purchased goods

and services (other)

tCO

286,304

380,732

330,244

(25)

Category 1: Purchased goods

and services (data centres)

tCO

4,431

7,060

43,132

(37)

Category 2: Capital goods

tCO

42,707

34,496

47,217

Category 3: Fuel- and

energy-related activ

ies

tCO

Category 4: Upstream

transportation and distr

ibut

ion

tCO

24,125

20,300

20,949

Category 5: Waste generated

in operations

tCO

7, 8

520

747

(30)

Category 6: Business travel

(air travel)

tCO

60,279

39,107

3,654

Category 6: Business travel

(miscellaneous other than

air travel)

tCO

8,918

2,654

4,994

236

Category 7: Employee

commuting

tCO

71,228

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 (real estate)

tCO

8, 9

7,898

8,594

(8)

Category 14: Franchises

tCO

Category 15: Investments

(ﬁnanced emiss

ions)

tCO

10, 14

41,944,000

49,512,000

45,200,000

(15)

Total Scope 3

tCO

42,450,410

50,067,607

45,650,190

(15)

Total Scope 1, 2 and 3

tCO

42,485,144

50,117,041

45,735,853

(15)

506

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Supplementary sustainab

ity informat

ion

Units

Footnote

2023

2022

2021

2022–2023

% change

Measured

Scaled up

Measured

Scaled up

Measured

Scaled up

Scope 1 and 2 GHG emiss

ions

(market-based) intens

ity

tCO

$ mill

ion

(36)

Environmental resource

efﬁciency

Energy

Indirect non-renewable

energy consumption

GWh

139

142

140

142

139

142

–

Indirect renewable

energy consumption

GWh

(33)

Direct non-renewable

energy consumption

GWh

Direct renewable energy

consumption

GWh

100

Energy consumption

GWh

170

173

174

177

179

183

(2)

Energy consumption intens

ity

kWh/m

196

187

183

Energy consumption

(UK and offshore area only)

GWh

–

Water

Water consumption

Mill

ion l

itres

289

393

265

385

256

384

Water intens

ity

0.45

0.41

0.38

Waste

Waste generated

998,407

1,575,954

3,633,870

(37)

Waste intens

ity

kg/m

1.1

1.7

3.6

(32)

Waste reused or recycled

The reporting period for carbon emiss

ions

is 1 October to 30 September. This only differs for Category 1: Purchased Goods (other); Category 2: Capital Goods;

Category 4: Upstream transportation and distr

ibut

ion; Category 6: Business travel (miscellaneous other than air travel) and Category 15: Investments where

a period of 1 January to 31 December is used. Emiss

ions data for these categor

ies is also on a one-year lag with emiss

ions reported

in 2023 based on 2022

emiss

ions data.

Scope 1 ﬁgure includes fugit

ive em

iss

ions for the ﬁrst t

ime in 2023. For more informat

ion on the methodology and assumpt

ions used to calculate GHG emiss

ions,

please refer to the Environmental Reporting Criter

ia at

sc.com/sustainab

ityhub

Location based emiss

ions have been restated for pr

ior comparative periods. Emiss

ions erroneously

included renewable energy certif

icates and power purchase

agreements. Other scope 2 reductions outside clean power are attributed to footprint reduction and efﬁc

iency ga

ins.

We use an independent third-party assurance provider to verify our Scope 1 and 2 GHG emiss

ions. In 2023, l

ited assurance was completed by Global

Documentation Ltd, excluding fugit

ive em

iss

ions

in this ﬁrst reporting year.

Scope 3 Category 1: Purchased goods and services is made up of third-party on-premise data centres (data centres) and all other purchased goods and services

(other). Purchased goods and services (data centres) have been restated from 706tCO

e to 7,060tCO

e due to an error in converting the unit of emiss

ions.

Scope 3 Category 3, Category 8, Category 9, Category 10, Category 11, Category 12 and Category 14 are not relevant for the Group due to the nature of our

business, products and services and operations. GHG emiss

ions assoc

iated with these categories are not deemed as relevant and/or material.

Scope 3 Category 5: Waste generated from operations emiss

ions have been restated for the 2022 report

ing period due to an out of date emiss

ions factor be

ing

used in prior year.

Emiss

ions for Scope 3 Category 5: Waste generated

in operations, Category 7: Employee commuting and Category 13: Downstream leased assets were measured

and reported for the ﬁrst time in 2022.

Reporting of emiss

ions assoc

iated with downstream leased aircrafts related to the Group’s aircraft leasing business has been paused following the sale of this

business during 2023.

10 Scope 3 Category 15 emiss

ions

includes ﬁnanced emiss

ions assoc

iated with the Group’s transactions with clients. 2022 absolute emiss

ions have been restated

from 58.5MtCO

e to 49.5MtCO

e. This is due to (i) reduction in shipp

ing absolute em

iss

ions as

improved data has resulted in ind

idual ship-level fair values

being obtained, (i

i) paus

ing of aviat

ion em

iss

ions report

ing due to the sale of the Group’s aviat

ion leas

ing and lending business, (i

i) decreases in Automotive

Manufacturers’ emiss

ions due to changes

in the industry emiss

ions report

ing methodology referenced earlier, (iv) decreases in emiss

ions from the ‘Others’ sector

where improved data has been obtained to calculate emiss

ions and (v) the sectoral basel

ing of em

iss

ions report

ing for the Cement and Commercial Real Estate

as separate high-emitt

ing sectors.

Energy intens

ity metr

ic updated to kWh per square meter in the current year from kWh per headcount in 2022. Water intens

ity metr

ic updated to cubic litres

of water per square meter in the current year from cubic litres of water per headcount in 2022. Waste intens

ity metr

ic updated to cubic kilograms of waste

per square meter in the current year from cubic metres of waste per headcount in 2022.

12 Scope 1 ﬁgure includes fugit

ive em

iss

ions for the ﬁrst t

ime in 2023 (2023: 5,266 tCO2e). Prior year data was not available for fugit

ive em

iss

ions. For more

informat

ion

on the methodology and assumptions used to calculate GHG emiss

ions, please refer to the Env

ironmental Reporting Criter

ia at

sc.com/sustainab

ityhub

13 Market based emiss

ions has decreased from 2022 to 2023 due to footpr

int reduction, efﬁc

iency ga

ins and the purchase of addit

ional energy attr

ibut

ion

certif

icates by the Group.

14 Financed emiss

ions are

included on page 110. A facil

itated em

iss

ions basel

ine was measured for the ﬁrst time during the year. Refer to page 112 for more details.

Environment

continued

507

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Supplier spend

Portion of total

third-party

spend

1,2

Number of

supplier

organisat

ions

with spend in

2023

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

36%

1,447

966

481

United Kingdom

14%

881

563

318

India

11%

2,256

2,080

176

Hong Kong

11%

761

483

278

China³

936

813

123

Korea

497

472

United Arab Emirates

408

241

167

Malaysia

565

427

138

United States

294

161

133

Taiwan

492

416

Regional spend

Asia

74%

8,936

7,225

1,711

Europe and Americas

18%

1,704

1,041

663

Africa and the Middle East

3,409

2,507

902

Category spend

Technology

43%

1,578

1,346

232

Professional Services

16%

2,066

1,870

196

Property

13%

2,490

2,431

Marketing

13%

1,913

1,823

Human Resources

1,503

1,395

108

Banking Operations

362

338

Travel

485

443

Ofﬁce Supplies

786

753

Others

380

374

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’.

Suppliers with payments in more than one market.

Charitable giv

ing

2023

$mill

ion

2022

$mill

ion

2021

$mill

ion

Cash contribut

ions

31.2

23.7

28.2

Employee time (non-cash item)

28.7

17.5

11.4

Gifts in-kind (non-cash item)

0.4

0.3

2.6

Management costs

5.4

5.0

4.7

Total (direct contribut

ions by Group)

65.7

46.5

46.9

Leverage

2.9

4.8

1.9

Total (includ

ing leverage)

68.6

51.3

48.8

Percentage of prior year operating proﬁt (PYOP)

1.6

1.5

3.0

Gifts in-kind comprises all non-monetary donations.

Leverage relates to the proceeds from staff and other fundrais

ing.

508

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

Supplementary sustainab

ity informat

ion

1. Mobil

ise Susta

inable Finance

Pillar

Key performance ind

icators

Period

Status

2023 progress update

Sustainable

Finance

Mobil

ise $300 b

ill

ion

in Sustainable

Finance (SF)¹

2021–2030

Mobil

ised $87.2bn between January 2021 and

September 2023. Strong progress in 2023. We

antic

ipate that mob

isat

ion of SF will not be linear and

will likely increase over time as the market matures and

we help our clients transit

ion. We rema

in on track for

overall target in 2030.

2. Operational

ise

inter

im 2030 ﬁnanced em

iss

ions targets to meet our 2050 net zero amb

ion

Pillar

Key performance ind

icators

Period

Status

2023 progress update

Operations

Net zero in our operations (Scope 1 and 2

GHG)

2019–2025

We reduced our Scope 1 and 2 emiss

ions by 30% to

34,734 tCO

e during 2023. Our measured real estate

decreased by 7% during that time.

The Group purchased and retired carbon credits for

our residual operational Scope 1 and 2 emiss

ions.

We remain on track for overall target 2025.

Increase renewable energy sourcing to

100% by 2025 (RE100 compliant)

2022–2025

66% of our electric

ity came from renewable sources

across our portfolio after matching consumption with

Renewable Energy Certif

icates (RECs).

We remain on track for overall target 2025.

Achieve and mainta

in ﬂ

ight emiss

ions

28% lower than our 2019 baseline of

94,000 tCO

2021–2023

Achieved 36% reduction in ﬂight emiss

ions compared

to 2019 baseline.

Divert 90% of waste from the landﬁll by

2030

2020–2030

In 2023, we reduced our overall waste generated

by 37% and achieved 52% avoidance of landﬁll

(up from 31%).

Financed

Emiss

ions

Achieve 2030 inter

im ﬁnanced em

iss

ions

reduction in our most carbon-intens

ive

sectors²:

•

-29% in Oil and Gas (absolute)

•

-45–67% in Power (production

intens

ity)

•

-20–30% in Steel (production

intens

ity)

•

-85% emiss

ions reduct

ion in Thermal

Coal Min

ing (absolute)

•

Mainta

in product

ion-intens

ity

Alumin

ium

•

Reduce our alignment delta in

Shipp

ing to 0%

•

-53–82% in Automotive

Manufacturers (physical intens

ity)

2020/

2021–2030

During the year, Oil and Gas sector's revenue-based

target was changed to absolute target, effectively

placing a carbon budget on the sector.

Power and Steel sector targets changed from

revenue-based to production-based intens

ity targets,

which are considered best in class for these sectors.

We remain on track for all inter

im 2030 sectoral

science-based targets; however, transit

ion al

ignment

is needed for Shipp

ing and Cement.

For further informat

ion on the progress aga

inst each

sector-specif

ic 2030 target, refer to pages 109-117.

Set and disclose 2030 ﬁnanced emiss

ion

targets for high-emitt

ing and carbon-

intens

ive sectors

in line with Net-Zero

Banking Alliance (NZBA) guidel

ines:

•

2023: Develop targets for Commercial

Real Estate, Cement, Resident

ial

Mortgages, and Alumin

ium to be

communicated in our 2023 Annual

Report

•

2024: Develop 2030 target for

Agriculture to be communicated in

our 2024 Annual Report

2021–2024

Targets have been set for Commercial Real Estate,

Cement, Resident

ial Mortgages and Alum

ium and

presented in this Annual Report, refer to pages 109-117.

Target for Agriculture will be developed in 2024.

We remain on track for overall target for 2024.

Mobil

isat

ion of Sustainable Finance is deﬁned as any investment or ﬁnanc

ial serv

ice provided to clients that supports: (i) the preservation and/or improvement of

biod

ivers

ity, nature or the environment; (i

i) the long-term avo

idance/decrease of GHG emiss

ions,

includ

ing the al

ignment of a client’s business and operations

with a 1.5 degree Celsius trajectory (known as transit

ion ﬁnance); (

i) a social purpose; or (iv) incent

ises our clients to meet their own sustainab

ity object

ives

(known as sustainab

ity-linked ﬁnance).

Refer to the Group’s ‘Net zero methodological white paper – The journey continues’ via

sc.com/sustainab

ityhub

and aligned with our Posit

ion Statements

available at

sc.com/sustainab

ityhub

For Aviat

ion, the Group completed the sale of

its global aviat

ion ﬁnance leas

ing business and the major

ity of

its aviat

ion

lending book in August 2023. Noting the distort

ive effects that the sale of th

is business would create in our emiss

ions proﬁle for th

is sector, the progress against

this target has been paused for year-end 2023. This will be re-assessed based on the size and material

ity of the rema

ing portfol

io in 2024.

2023 Sustainab

ity Aspirat

ions

509

Standard Chartered

– Annual Report 2022

Supplementary informat

ion

3. Enhance and deepen leadership with

in the susta

inab

ity ecosystem

Pillar

Key performance ind

icators

Period

Status

2023 progress update

Market

Integrity,

Trust,

Conduct and

Compliance

Partnering to lead the ﬁght against

ﬁnancial cr

imes:

•

Partic

ipat

ing in public–private

partnerships to contribute to

understanding most recent

developments, share intell

igence

and good practices

•

Contribute to developing typologies

and red ﬂags for ﬁnancial ﬂows

Ongoing

During 2023, the Group undertook a series of

engagements across multiple jur

isd

ict

ions

furtherance of this aspirat

ion. The Group cont

inued

engagement with internat

ional and reg

ional

standard-setters, such as the Financ

ial Act

ion Task

Force and Wolfsberg Group. In many jurisd

ict

ions, the

Group contributed, either directly or via trade bodies,

to reform of ﬁnancial cr

ime legislat

ion and regulat

ion,

and to public–private partnerships to tackle ﬁnanc

ial

crime. The Group has partic

ipated

in a number of

ﬁnancial cr

ime conferences across our footprint -

chair

ing and lead

ing many panel discuss

ions, and

contribut

ing subject–matter expert

ise whenever

possible. In addit

ion, the Group has been engaged

in planning discuss

ions w

ith countries and bodies

seeking to establish new partnerships and

informat

ion-shar

ing arrangements.

Develop and deliver a targeted

outreach programme, includ

ing through

key internat

ional platforms, a

imed at

safely and transparently reducing

barriers to capital mobil

isat

ion for

sustainable development

2022–2024

The Group continued to proactively engage in policy

discuss

ions v

ia a number of major internat

ional and

regional platforms and conferences. Through these

activ

ies, the Group sought to promote robust policy

and regulatory frameworks to ensure the credib

ity

and integr

ity of susta

inable investments and to

support capital mobil

isat

ion for sustainable ﬁnance.

4. Drive social impact with our clients and communit

ies

Pillar

Key performance ind

icators

Period

Status

2023 progress update

People

Increase gender representation to 35%

women in senior roles³

2016–2025

Women leadership representation at the end of 2023

was 32.5%. We remain on track for our overall target

in 2025.

Create Supplier Divers

ity and Inclus

ion

Plans for all in-scope markets with

Supply Chain Management (SCM)

team presence to support 40 per cent

of our newly onboarded suppliers

being diverse⁴

2022–2025

100% of in-scope markets have Supplier Divers

ity and

Inclusion Plans and 40% of our newly onboarded

suppliers were diverse.

Increase our Culture of Inclusion score

to 84.5%⁵

2020–2024

83.23% of employees reported posit

ive sent

iments

around our culture of inclus

ion. We rema

in on track

for our overall 2024 target.

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%

2022–2024

86% of employees have said the way we operate

day to day is aligned with our sustainab

ity strategy.

We remain on track for our overall 2024 target.

Senior roles refer to roles thatare at least at the level of Executive Director (Band 4) and Managing Directors (Band 3) as of 31 December of each reporting year.

For Standard Chartered diverse suppliers are deﬁned as:

•

Small Enterprise (10-49 employees + turnover <USD10 mill

ion)

•

Micro Enterprise (<10 employees + turnover <USD2 mill

ion)

•

Medium Enterprise (50-249 employees + turnover <USD50 mill

ion)

•

Women Owned (51 per cent or more owned by Women (South Africa 30 per cent owned by women as per local government regulations))

•

Ethnic Minor

ity (Owned 51 per cent owned by ethn

ic minor

ies)

•

Veteran Owned (51 per cent or more owned by veterans)

•

Disabled Owned (51 per cent or more owned by differently abled people)

•

LGBT+ Owned (Owned 51 per cent owned by LGBT+ (not possible in some countries due to local legal regulations))

•

Social Enterprises (NGOs and Charit

ies)

The ‘Culture of Inclusion’ score is based on several questions in MyVoice employee engagement survey that relate to different concepts of inclus

ion,

includ

ing

being respected and valued for contribut

ions, be

ing heard and involved in decis

ions, career development and opportun

ies, and work l

ife balance.

510

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Supplementary sustainab

ity informat

ion

Pillar

Key performance ind

icators

Period

Status

2023 progress update

Communit

ies

Invest 0.75% of prior year operating

proﬁt (PYOP) in our communit

ies

Ongoing

Achieved 1.6% PYOP, refer to page 509 for addit

ional

details.

Education: Reach one mill

ion g

irls and

young women through Goal

2006–2023

Goal projects reported strong results in 2023 with

the programme reaching over 200,000 young girls,

enabling the programme to successfully surpass the

longstanding target to reach one mill

ion g

irls by

December 2023.

Employabil

ity: Reach 275,000 young

people

2019–2023

A new aspirat

ional target was set

in 2022 to reach

275,000 young people by December 2023. We have

achieved as the pace of implementat

ion for

employabil

ity projects cont

inued to increase in 2023,

includ

ing large projects

in China and India deliver

ing

both intens

ive and non-

intens

ive (l

ighter touch)

intervent

ions. 165,056 young people part

ipated

in employabil

ity programmes

in 2023.

Entrepreneurship: Reach 125,000

young people

2019–2023

A new aspirat

ional target was set

in 2022 to reach

125,000 young people by 2023. We have achieved and

exceeded this target as Futuremakers entrepreneurship

projects more than doubled the number of young

people reached in 2023, primar

ily dr

iven by non-

intens

ive tech-enabled solut

ions and online learning

materials that allowed projects to access a much

larger number of partic

ipants. 378,108 young people

partic

ipated

in entrepreneurship programmes in 2023.

Increase partic

ipat

ion for employee

volunteering (EV) to 55%

2020–2023

We achieved and surpassed our target of 55% with an

outstanding EV partic

ipat

ion rate of 61% as of end of

December 2023.

52,377 volunteers have logged 76,126 days of EV leave.

Going forward, we aim to shift the focus of EV to

skills-based volunteering, for which we have included

the target for 2024 of 75,000 hours.

Concluded in the year

Ongoing aspirat

ions

Achieved

Not achieved

On track

Not on track

4. Drive social impact with our clients and communit

ies

continued

511

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

The following table sets out the recommendations and recommended disclosures of the Taskforce on Climate–related Financ

ial

Disclosures (TCFD) and summarises where informat

ion can be found

in this Annual Report.

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 the Board

•

The Board and its supporting committees are responsible for the oversight of

climate- and sustaianb

ilt

iy-related risks and opportunit

ies.

•

The Board Risk Committee (BRC) receives Climate Risk updates in Group Chief Risk

Ofﬁcer (GCRO) reports six times a year and reviews the Climate Risk Information

Report quarterly.

•

The Audit Committee (AC) is responsible for oversight of the Group’s quantitat

ive

reporting metrics and controls over those metrics. The AC is updated annually in the

fourth quarter and more frequently if any material disclosures are made outside of

the Group’s annual reporting cycle.

•

The Culture and Sustainab

ity Committee (CSC) reviews the Group’s overall

sustainab

ity strategy and monitors the implementat

ion of the Group’s publ

commitment to net zero ﬁnanced emiss

ions by 2050. The CSC rece

ived updates

three times during 2023.

Strategic report –

page 76

Sustainab

ity review

– pages 120-123

Directors’ report –

pages 162-176

Risk review and Capital

review – pages 298-313

Incorporation of

climate–related

issues into Board and

Board committee

planning and

decis

ions

•

The Board reviewed and approved our sustainab

ity strategy includ

ing progress

on our roadmap to achieve net zero ﬁnanced emiss

ions by 2050, key performance

ind

icators and publ

ic commitments.

•

The BRC reviewed, discussed, and challenged the Group’s (i) progress on

embedding climate risk in line with PRA SS 3/19; (i

i) the results of the Group’s ﬁrst

bespoke short–term base case and tail risk scenarios; (i

i) development of the

Group’s internal modelling capabil

ies; and (iv) key focus areas for 2024.

Sustainab

ity review

– pages 120-123

Board oversight of

climate–related

goals and targets

•

The Board oversees the Group’s overall net zero 2050 ambit

ion and

in 2023 reviewed

progress on delivery against the Group’s net zero roadmap.

•

It approved the Group’s Climate Risk Appetite Statement and related Board-level

metrics. Any breaches to the risk appetite metrics are reported to the Group Risk

Committee and the Board Risk Committee.

Sustainab

ity review

– pages 120-123

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

•

Each member of the Group Management Team (MT) is responsible for strategically

driv

ing cl

imate considerat

ions w

ith

in the

ir geography, business segment or function

in line with our net zero roadmap.

•

Responsib

ity for ident

ify

ing and managing ﬁnanc

ial r

isks from climate change sits

with the GCRO as the appropriate Senior Management Function (SMF) under the

Senior Managers Regime (SMR).

•

The Global Head, ESG and Reputational Risk is responsible for ensuring and

executing the delivery of the Climate Risk workplan.

•

The Chief Sustainab

ity Ofﬁcer’s (CSO) organisat

ion, as led by the CSO,

responsible for creating the Group-wide sustainab

ity strategy and working across

business segments and functional teams to deliver on our goals, targets and net

zero roadmap.

•

Roles and responsib

ies assoc

iated with climate-related risks and opportunit

ies

have been set out in the “Climate and sustainab

ity-related governance” section of

this Annual Report.

Sustainab

ity review

– pages 120-123

Processes used to

inform management

•

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

and sustainab

ity-related informat

ion commun

icated via reports and

committee papers.

•

This includes channels includ

ing our Cl

imate Risk Information Reports, and updates

to the Sustainab

ity Executive Committee and CCIB and CPBB management teams.

Sustainab

ity review

– pages 120-123

TCFD summary and alignment index

512

Standard Chartered

– Annual Report 2023

TCFD summary and alignment index

Supplementary informat

ion

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.

•

In 2023, we sign

iﬁcantly strengthened our stress test

ing and scenario analysis

abil

ies for a range of short, medium and long-term management scenarios

that are more plausible, includ

ing the ﬁrst bespoke short-term base case and

tail risk scenarios.

Risk review and Capital

review – pages 298-313

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 include: scenario analysis, location-based hazard and risk scores and

temperature alignment scores.

•

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.

•

Detailed processes to determine material risks across the impacted risk types are

discussed in more detail with

in the “R

isk review and Capital review” section.

Risk review and Capital

review – pages 298-313

Climate-related risks

and opportunit

ies

ident

iﬁed

•

The Group is exposed to Climate Risk through our clients, our own operations, our

suppliers and from the industr

ies and markets we operate

in. The Group deﬁnes

Climate Risk as the potential for ﬁnanc

ial loss and non-ﬁnancial detr

iments aris

ing

from climate change and society’s response to it.

•

Physical risk may arise from increas

ing sever

ity and frequency of climate- and

weather-related events, which can damage property and other infrastructure,

disrupt supply chains, and impact food production. It may also reduce asset

valuations leading to lower proﬁtab

ity for companies. Indirect effects on the

macroeconomic environment, such as lower output and productiv

ity may

exacerbate these direct impacts.

•

Transit

ion r

isk may arise from the adjustment towards a carbon-neutral economy,

which 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.

•

Our work to scale Sustainable and Transit

ion F

inance is an opportunity for the

Group to create resil

ience aga

inst transit

ion r

isks and help provide capital and

ﬁnancing for our cl

ients’ transit

ion to a low carbon economy. Through support

ing

our clients on their decarbonisat

ion journeys as they adapt the

ir business models

to be less carbon-intens

ive over t

ime, we help manage their, and our transit

ion r

isk.

We aim to achieve Sustainable Finance income of $1 bill

ion by 2025, mob

ise

$300 bill

ion of Susta

inable Finance between 2021 and 2030, and continue to

grow the Sustainable Finance asset and liab

ity books.

Strategic report –

pages 76-78

Sustainab

ity review

– pages 126-129

Risk review and Capital

review – pages 298-313

Note 1 sign

iﬁcant

judgement and

estimates – pages

367-369

Sign

iﬁcant

concentrations of

credit exposure to

carbon-related

assets

•

We aim to become net zero in our ﬁnanced emiss

ions by 2050, and have set

inter

2030 targets set for 11 high-emitt

ing sectors

in line with Net-Zero Banking Alliance

(NZBA) Guidance: Alumin

ium; Automot

ive Manufacturers, Aviat

ion, Cement;

Commercial Real Estate, Oil and Gas, Power, Resident

ial Mortgages, Sh

ipp

ing,

Steel and Thermal Coal Min

ing. The 12

sector, Agriculture, will have a target

developed in 2024.

•

We have disclosed our exposures to high-emitt

ing sectors, wh

ich are ident

iﬁed and

grouped as per the International Standard Industrial Classif

icat

ion (ISIC) system

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

for target setting among the high-carbon sectors.

•

The 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 as they transit

ion

and/or decarbonise their business models .

Sustainab

ity review

– pages 108-117

Risk review and Capital

review – pages

298-305

513

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Recommendation

Response

Disclosure location

Strategy

continued

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

Enterprise Risk

•

We manage Climate Risk according to the characterist

ics of the

impacted risk types

and are embedding climate-risk considerat

ions

into relevant frameworks and

processes. Details on the risks ident

iﬁed such as sectors vulnerable to cl

imate risks,

loan impa

irment

intens

ies, client-level climate risk grading, exposure concentration

to physical risk hazards for resident

ial mortgage portfol

ios and across our own

operations are discussed in more detail with

in the “R

isk review and Capital review”

section.

Products and services

•

We have Product Programme Guidance documents which underpin each

Sustainable Finance product that we offer, signed off by a delegate of the

Sustainable Finance Governance Committee (SFGC) following approval of the

product construct by the SFGC. The SFGC is our forum for review

ing Susta

inable

Finance products and derives its authority from the Group Reputational and

Responsib

ity Risk Committee. SFGC is our foremost committee on greenwashing

risk in Sustainable Finance product design and labelling.

•

Our Green and Sustainable Product Framework governs all activ

ies we as an

organisat

ion v

iew as green or sustainable. It is publicly available and externally

verif

ied by Morn

ingstar Sustainalyt

ics.

•

The Sustainab

ity Bond Framework provides the basis for issuance of Green,

Social and Sustainab

ity bonds, drawing on the activ

ies that we view as green

or sustainable.

•

Informed by the IEA NZE Energy 2050 scenario, we outline what assets and

activ

ies qualify for labelling as “transit

ion”

in our Transit

ion F

inance Framework.

In our own operations

•

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

greenhouse gas (GHG) emiss

ions. We a

im to optim

ise our ofﬁce and branch

network by retir

ing unused or

ineff

ient space and creating a working environment

that matches ofﬁce and hybrid-working patterns of our workforce.

•

We are actively seeking to increase the proportion of our electric

ity usage that

comes from renewable sources. These can take the form of power purchase

agreements, clean energy contracts, on-site solar installat

ions and renewable

energy certif

icates.

In our supply chain

•

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

environmental protection, and to comply with local environmental laws and

regulations. We expect our suppliers to promote the development and distr

ibut

ion

of environmentally friendly technologies and manage environmental concerns in

their own supply chains.

•

With 11,563 suppliers, we recognise our contribut

ion to cl

imate impacts through

the goods and services we procure. Severe weather events could result in material

disrupt

ions to our supply cha

in that may potentially impact our abil

ity to serve our

clients. As such, we work to gather site locations for our material suppliers to assess

their physical risk exposures, such that suitable continu

ity plans can be developed.

•

We continue to engage with our suppliers to collect emiss

ions data, d

irectly from

them, thereby improv

ing the accuracy of our Scope 3 Categor

ies 1, 2, 4 and 6

(miscellaneous other than air travel) emiss

ions calculat

ions and reporting.

Strategic report –

pages 70; 76-78

Sustainab

ity review

– pages 105-107;

126-129

Directors’ report –

pages 226-227

Risk review and Capital

review – pages 298-313

Incorporating

climate-related

inputs into the

ﬁnancial plann

ing

process

•

In 2023, climate-related risks and opportunit

ies were cons

idered as part of our

formal annual corporate plan, strategy, and ﬁnancial plann

ing process, and

included if considered material.

•

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 roadmap.

•

From a capital perspective, Climate Risk considerat

ions have been part of our

Internal Capital Adequacy Assessment Process (ICAAP) submiss

ions.

Strategic report –

page 78

Sustainab

ity review

– page 129

Risk review and Capital

review – pages 298-313

Note 1 sign

iﬁcant

judgement and

estimates – pages

367-369

514

Standard Chartered

– Annual Report 2023

TCFD summary and alignment index

Supplementary informat

ion

Recommendation

Response

Disclosure location

Strategy

continued

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

two degrees Celsius or lower scenario

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 three scenar

ios from Network of Central Banks and Supervisors for

Greening the Financ

ial System (NGFS) and three

in-house bespoke scenarios that

were explored.

Risk review and Capital

review – pages 309-313

Scenarios used

•

In 2023, we developed bespoke internal modelling capabil

ies to provide greater

transparency of scenarios and models.

•

We assessed the impact on our CCIB corporate client portfolio based on three

Phase 3 scenarios from the NGFS and three in-house bespoke scenarios.

•

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 impacts on the Consumer, Private & Business

Banking (CPBB) resident

ial mortgage portfol

io over short- and long-term time

horizons for internal risk management purposes.

•

The results of scenario analyses have provided further validat

ion to the act

ions we

are taking as a Group in terms of our net zero ambit

ions and strategy.

Risk review and Capital

review – pages 309-313

Impact of climate-

related risks and

opportunit

ies on

business strategy

•

We are working with clients in high-emitt

ing and carbon-

intens

ive sectors, a

ing

to support their transit

ion to a low carbon economy,

includ

ing through the adopt

ion

of emiss

ion reduct

ion plans and new technological solutions.

•

Our work to scale our Sustainable Finance franchise, along with our targets to (i)

mobil

ise $300 b

ill

ion Susta

inable Finance between 2021 and 2030, and (i

i) scale

Sustainable Finance income to $1 bill

ion by 2025, supported by our Susta

inable

Finance frameworks are elements of a robust response to transit

ion r

isks in the short

term, strengthening our resil

ience towards a two degrees Cels

ius or lower transit

ion

scenario.

Strategic report –

page 70

Sustainab

ity review

– pages 96; 99-101

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

•

We manage Climate Risk according to the characterist

ics of the

impacted risk

types and are embedding climate-risk considerat

ions

into relevant frameworks

and processes.

•

To support the management and monitor

ing of cl

imate-related physical and

transit

ion r

isks, we continue to conduct case level reviews for enhanced due

dil

igence on h

igh ‘Climate Credit Risk’ and ‘Climate and Reputational and

Sustainab

ity Risk’ for our corporate clients.

•

We continuously monitor the Risk Appetite metrics that aim to measure and

manage ﬁnancial and non-ﬁnancial r

isks aris

ing from cl

imate change.

•

To assess climate-related risks and opportunit

ies

in the short-, medium- and

long-term, we use scenario analysis to consider how risks and opportunit

ies

may evolve under different situat

ions.

Strategic report –

pages 76-78

Sustainab

ity review

– pages 126-129

Risk review and Capital

review – pages 298-313

Exist

ing and

emerging regulatory

requirements related

to climate change

•

Key ﬁnancial regulators across our footpr

int have proposed or set supervisory

expectations on climate and environmental risk management. Those expectations

are broadly aligned with the Basel Committee princ

iples for the management of

climate-related ﬁnanc

ial r

isks, but local implementat

ions vary.

•

We have been actively engaging with industry bodies and regulators to drive

consistency in policymak

ing across our markets. A process has been establ

ished

for tracking various Climate Risk-related regulatory developments and obligat

ions

set by both ﬁnancial and non-ﬁnancial serv

ice regulators at Group, regional and

country level, with roles and responsib

ies set out

in the Group’s 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.

Strategic report –

page 78

Characteris

ing

climate-related risks

in the context of

tradit

ional bank

ing

industry risk

categories

•

We have ident

iﬁed seven Pr

inc

ipal R

isk Types (PRT) that are most materially

impacted by potential climate risks and describe transmiss

ion channels for

Climate Risk manifest

ing as ﬁnancial and non-ﬁnancial r

isk.

Strategic report –

page 78

Risk review and Capital

review – pages

298-309

515

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Recommendation

Response

Disclosure location

Risk Management

continued

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 seven PRTs

and are embedding climate-risk considerat

ions

into the relevant frameworks and

processes as well as setting risk appetites. Detailed processes for managing and

mit

igat

ing climate risks across the impacted risk types are discussed in more detail

with

in the ‘R

isk review and Capital review’ section of this Annual Report.

•

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

and any breaches are reported to the Group Risk Committee and the Board Risk

Committee. 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 in 2024.

Strategic report –

pages 76-78

Sustainab

ity review

– pages 126-129

Risk review and Capital

review – pages 298-313

c) Describe how processes for ident

ify

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

ion’s

overall risk management

Integration into

Enterprise Risk

Management

Framework

•

Climate Risk is recognised in the Group Enterprise Risk Management Framework

(ERMF) as manifest

ing through ex

ist

ing r

isk types and is managed in line with the

impacted risk type frameworks. In 2023, 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.

Strategic report –

pages 76-78

Sustainab

ity review

– pages 127-129

Risk review and Capital

review – pages 298-313

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 process

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

business activ

ies

•

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

risks and opportunit

ies:

GHG emiss

ions:

•

Scope 1, Scope 2 and relevant Categories of Scope 3 emiss

ions,

in particular

Category 15 – Investments (ﬁnanced emiss

ions).

Climate-related transit

ion r

isks:

•

Loan impa

irment

intens

ies for the corporate portfolio and key sectors across

a range of scenarios.

•

Transit

ion r

isk exposure concentration for resident

ial mortgages us

ing Energy

Performance Certif

icate (EPC).

•

Client-level Climate Risk Assessment (CRA) scores by region for measuring gross

transit

ion r

isk and mit

igat

ion plans.

•

Distr

ibut

ion of climate risk grading across key markets.

•

Weighted Average Temperature Alignment (WATA) scores by sectors and regions.

•

Gross Country Risk exposure distr

ibut

ion .

Climate-related physical risks:

•

Exposure concentration of gross ﬂood and sea level rise risk for resident

ial

mortgage portfolio by regions.

•

Physical risk vulnerabil

ies of our own operating locations across a range of acute

and chronic physical risk events.

•

Client-level CRA scores by region for measuring gross physical risk and adaptation

measures.

•

Gross Country Risk exposure distr

ibut

ion.

Climate-related opportunit

ies:

•

Sustainable Finance income.

•

Green and Social ﬁnance assets.

• Sustainable liab

ies.

• Sustainab

ity-Linked assets.

Capital deployment:

•

Mobil

isat

ion of Sustainable Finance.

Strategic report –

pages 68; 72

Sustainab

ity review

– pages 94; 99-101; 105;

110-117; 126-129

Risk review and Capital

review – pages 298-313

Climate-related

incent

ive structures

•

Selected sustainab

ity measures aligned with the Group’s Sustainab

ity Aspirat

ions

and Sustainab

ity Strategic Pillars continue to be incorporated into the Group

scorecard which informs variable remuneration for the major

ity of employees.

•

Sustainab

ity-related targets continue to be also included in the 2024–2026

Long-Term Incentive Plan (LTIP) performance measures. Members of the Group

Management Team are elig

ible for LTIP awards, wh

ich may also be granted to

other employees in the Group.

Sustainab

ity review

– page 124

Risk review and Capital

review – pages 202-207

516

Standard Chartered

– Annual Report 2023

TCFD summary and alignment index

Supplementary informat

ion

Recommendation

Response

Disclosure location

Metrics and Targets

continued

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

ions and the related r

isks

In our own operations

•

We reduced our Scope 1 and 2 emiss

ions by 30% to 34,734 tCO

e. Our measured

real estate decreased by 7% during this time. This was possible through investments

into energy-efﬁc

iency and ut

ing 66% of electric

ity from renewable sources across

our portfolio after matching consumption with Renewable Energy Certif

icates

(RECs). During the year, we started measuring the fugit

ive em

iss

ions from our

own operations.

Sustainab

ity review

– pages 105-106

Supplementary

sustainab

ity

informat

ion – pages

505-506

In our supply chain

•

We continued to partner with an independent climate consultancy using a hybrid

methodology (supplier-specif

ic data and spend em

iss

ions factors) to measure our

supplier emiss

ions for Scope 3 Categor

ies 1, 2, 4 and 6 (miscellaneous other than air

travel). These emiss

ions are reported on a one-year lag.

•

Overall, our emiss

ions assoc

iated with the products, services and equipment that

we purchase and those related to business travel (excluding air travel) – Scope 3

Categories 1, 2, 4 and 6 (miscellaneous other than air travel) – have shown an

estimated 17% year-on-year reduction to a total of 362,054 tCO

e since the previous

reporting year, excluding Scope 3 category 1 data centres. We continued to improve

the accuracy of our supply chain emiss

ions data collect

ion by increas

ing the number

of primary data sources and updating the CEDA emiss

ions factor calculat

ions.

Our 2023 reported emiss

ions are based on 2022 suppl

ier spend.

•

Our Scope 3 Category 6 (air travel) emiss

ions totalled 60,279 tCO

e. We have seen

an increase in emiss

ions assoc

iated with air travel since the previous reporting year.

Nonetheless, the Group was able to exceed its target and managed to reduce

these emiss

ions by 36% compared to

its 2019 baseline.

Sustainab

ity review

– page 109

Supplementary

sustainab

ity

informat

ion – pages

505-506

Measuring our

ﬁnanced emiss

ions

•

Analysing our exposure to high-emitt

ing sectors

is the starting point of our ﬁnanced

emiss

ion calculat

ions.

•

The Group has set targets for 11 of the 12 high-emitt

ing sectors as mandated by the

NZBA with targets for Alumin

ium, Cement, Commerc

ial Real Estate, and Resident

ial

Mortgages set during the year.

•

The Group has further set a baseline for facil

itated em

iss

ions

in 2023.

Strategic report –

pages 73-74

Sustainab

ity review

– pages 105; 108-117

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

ions sect

ion.

•

On climate-related opportunit

ies, we have $1 b

ill

ion of Susta

inable Finance

income and $300 bill

ion mob

isat

ion of Sustainable Finance targets for 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 metr

ic to absolute ﬁnanced emiss

ions to

better reﬂect the sector emiss

ion proﬁle, effect

ively creating a carbon budget for

the sector that is intended to decrease over time. In addit

ion to th

is, our Power

target was revised from an income-based carbon intens

ity to a product

ion intens

ity

target. Target methodologies have evolved in the Shipp

ing and Automot

ive

Manufacturers sectors which has led us to restate some of our exist

ing targets

to better align them with the latest scient

iﬁc v

iews in those sectors.

•

In 2023, we continued to expand the coverage of our ﬁnanced emiss

ions targets

with four addit

ional targets for Alum

ium, Cement, Commerc

ial Real Estate and

Resident

ial Mortgages.

Strategic report –

pages 68; 70; 72; 74

Sustainab

ity review

– pages 94; 99-101; 106;

107; 110-111

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 updated

‘Net zero methodological white paper – The journey continues’, available at

sc.com/sustainab

ityhub

Sustainab

ity review

– pages 109-117

Other key

performance

ind

icators used

•

The Group’s approach to sustainab

ity is underpinned by our Sustainab

ity

Aspirat

ions. Dur

ing 2023, we refreshed and consolidated our Sustainab

ity

Aspirat

ions

into four overarching long-term goals, each supported by key

performance ind

icators.

Sustainab

ity review

– pages 94-98

2023 Sustainab

ity

Aspirat

ions – pages

508-510

517

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Shareholder informat

ion

Div

idend and

interest payment dates

Ordinary shares

Final div

idend

Results and div

idend announced

23 February 2024

Ex-div

idend date

7 (UK) 6 (HK) March 2024

Record date for div

idend

8 March 2024

Last date to amend currency election instruct

ions for cash d

idend*

23 April 2024

Div

idend payment date

17 May 2024

In either United States 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 2024

1 October 2024

∕

per cent non-cumulative irredeemable preference shares of £1 each

1 April 2024

1 October 2024

6.409 per cent non-cumulative redeemable preference shares of $5 each

30 January and 30 April 2024

30 July and 30 October 2024

7.014 per cent non-cumulative redeemable preference shares of $5 each

30 January 2024

30 July 2024

Annual General Meeting

The Annual General Meeting (AGM) will be held on Friday

10 May 2024 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

2024 Notice of AGM.

Details of voting at the Company’s AGM and of proxy votes cast can

be found on the Company’s website at

sc.com/agm

Interim results

The inter

im results w

ill be announced to the London Stock

Exchange and the Stock Exchange of Hong Kong Lim

ited

and put on the Company’s website.

Country-by-Country Reporting

In accordance with the requirements of the Capital

Requirements (Country-by-Country Reporting) Regulations

2013, the Group will publish addit

ional country-by-country

informat

ion

in respect of the year ended 31 December 2023,

on or before 31 December 2024. 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 respect of the year

ended 31 December 2023, on or before 23 February 2024.

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

https://www.sc.com/sharecare

or contact the

shareholder helpline on

0370 702 0138

Donating shares to ShareGift

Shareholders who have a small number of shares often ﬁnd

it uneconomical to sell them. An alternative is to consider

donating them to the charity ShareGift (registered charity

1052686), which collects donations of unwanted shares until

there are enough to sell and uses the proceeds to support

UK charit

ies. There

is no impl

icat

ion for capital gains tax

(no gain or loss) when you donate shares to charity and

UK taxpayers may be able to claim income tax relief on the

value of their donation.

Further informat

ion can be obta

ined from the Company’s registrars

or from ShareGift on

020 7930 3737

or from

sharegift.org

Bankers’ Automated Clearing System (BACS)

Div

idends can be pa

id straight into your bank or build

ing

society account.

Please register online at

investorcentre.co.uk

or contact our

registrar for a div

idend mandate form

Registrars and shareholder enquir

ies

If you have any enquir

ies relat

ing to your shareholding and

you hold your shares on the UK register, please contact

our registrar at investorcentre.co.uk 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

518

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Shareholder 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, directors and chief executives, 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, nor

a register of directors’ and chief executives’ interests under

section 352 of the SFO. The Company is, however, required

to ﬁle with The Stock Exchange of Hong Kong Lim

ited any

disclosure of interests made in the UK.

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

Final 2022

11 May 2023

14.00c/11.249168p/HK$1.098083

N/A

Interim 2023

13 October 2023

6.00c/4.910412p/HK$0.469085

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 language version of the 2023

Annual Report, please contact Computershare Hong Kong

Investor Services Lim

ited, 17M Floor, Hopewell Centre,

183 Queen’s Road East, Wan Chai, Hong Kong.

二〇二三年年報之中文譯本可向香港中央證券登記有限公司索取，

地址：香港灣仔皇后大道東183號合和中心17M樓。

Shareholders on the Hong Kong branch register who have

asked to receive corporate communicat

ions

in either

Chinese or English can change this election by contacting

Computershare.

If there is a dispute between any translation and the English

version of this Annual Report, the English text shall prevail.

Electronic communicat

ions

If you hold your shares on the UK register and in future you

would like to receive the Annual Report electronically rather

than by post, please register online at: investorcentre.co.uk.

Click on ‘register now’ and follow the instruct

ions. You w

ill need

to have your Shareholder or ShareCare reference number to

hand. You can ﬁnd this on your share certi

ﬁcate or ShareCare

statement. Once you have registered and conﬁrmed your

email communicat

ion preference, you w

ill receive future

notif

icat

ions via email enabling you to submit your proxy vote

online. In addit

ion, as a member of Investor Centre, you w

ill be

able to manage your shareholding online and change your

bank mandate or address informat

ion.

519

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Important notices

Forward-looking statements

The informat

ion

included in this document may contain

‘forward-looking statements’ based upon current

expectations or beliefs as well as statements formulated

with assumptions about future events. Forward-looking

statements include, without lim

itat

ion, project

ions, est

imates,

commitments, plans, approaches, ambit

ions and targets

(includ

ing, w

ithout lim

itat

ion, ESG commitments, ambit

ions

and targets). Forward-looking statements often use words

such as ‘may’, ‘could’, ‘will’, ‘expect’, ‘intend’, ‘estimate’,

‘antic

ipate’, ‘bel

ieve’, ‘plan’, ‘seek’, ‘aim’, ‘continue’ or other

words of sim

ilar mean

ing to any of the foregoing. Forward-

looking statements may also (or addit

ionally) be

ident

iﬁed

by the fact that they do not relate only to histor

ical or

current facts.

By their very nature, forward-looking statements are subject

to known and unknown risks and uncertaint

ies and other

factors that could cause actual results, and the Group’s plans

and objectives, to d

iffer materially from those expressed or

impl

ied

in the forward-looking statements. Readers should

not place reliance on, and are cautioned about relying on,

any forward-looking statements.

There are several factors which could cause the Group’s actual

results and its plans and object

ives to d

iffer materially from

those expressed or impl

ied

in forward-looking statements.

The factors include (but are not lim

ited to): changes

in global,

polit

ical, econom

ic, business, competit

ive and market forces or

condit

ions, or

in future exchange and interest rates; changes

in environmental, geopolit

ical, soc

ial or physical risks; legal,

regulatory and policy developments, includ

ing regulatory

measures addressing climate change and broader

sustainab

ity-related issues; the development of standards

and interpretat

ions,

includ

ing evolv

ing requirements and

practices in ESG reporting; the abil

ity of the Group, together

with governments and other stakeholders to measure,

manage, and mit

igate the

impacts of climate change and

broader sustainab

ity-related issues effectively; risks aris

ing

out of health crises and pandemics; risks of cyber-attacks,

data, informat

ion or secur

ity breaches or technology failures

involv

ing the Group; changes

in tax rates or policy; future

business combinat

ions or d

ispos

ions; and other factors

specif

ic to the Group,

includ

ing those

ident

iﬁed

in this Annual

Report and ﬁnancial statements of the Group. To the extent

that any forward-looking statements contained in this

document are based on past or current trends and/or

activ

ies of the Group, they 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. Each forward-looking statement

speaks only as of the date that it is made. Except as required

by any applicable laws or regulations, the Group expressly

discla

ims any obl

igat

ion to rev

ise or update any forward-

looking statement contained with

in th

is document, regardless

of whether those statements are affected as a result of new

informat

ion, future events or otherw

ise.

Please refer to this Annual Report and the ﬁnanc

ial

statements of the Group for a discuss

ion of certa

in of the

risks and factors that could adversely impact the Group’s

actual results, and cause its plans and object

ives, to 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:

disclosures in the Strategic report, Sustainab

ity review,

Directors’ report, Risk review and Capital review and

Supplementary informat

ion are unaud

ited unless

otherwise stated;

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:

the lim

ited ava

ilab

ity of reliable data, data gaps, and the

nascent nature of the methodologies and technologies

underpinn

ing th

is data; the lim

ited standard

isat

ion of

data (given, amongst other things, lim

ited

internat

ional

coordinat

ion on data and methodology standards);

and future uncertainty (due, amongst other things,

to changing project

ions relat

ing to technological

development and global and regional laws, regulations

and polic

ies, and the current

inab

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 above);

i. some of the related

informat

ion appear

ing in this

document may have been obtained from public and other

sources and, while the Group believes such informat

ion to

be reliable, it has not been independently verif

ied by the

Group and no representation or warranty is made by the

Group as to its quality, completeness, accuracy, ﬁtness

for a particular purpose or noninfr

ingement of such

informat

ion;

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;

520

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Shareholder informat

ion

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;

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 ESG reporting and

standards are subject to rapid change and development);

and

xvi. while all reasonable care has been taken in preparing

the informat

ion

included in this document, neither the

Group nor any of its afﬁl

iates, d

irectors, ofﬁcers, employees

or agents make any representation or warranty as to its

quality, accuracy or completeness, and they accept

no responsib

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 the informat

ion conta

ined in this document.

ion

contained in this document (other than third party materials,

text, articles and informat

ion)

is the property of, and may only

be reproduced with permiss

ion of an author

ised signatory of,

the Group.

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

521

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Main awards and accolades in 2023

Asian Banker

•

Best Frict

ionless Customer Exper

ience

Init

iat

ive Award, China

Asian Banking and Finance Retail

Banking Awards

•

International Retail Bank of the Year,

Singapore

•

Investment Innovation Product of the

Year, Taiwan

•

Wealth Management Platform of the

Year, Brunei

•

International Retail Bank of the Year,

Hong Kong

Asiamoney

• Best International

Bank, Bangladesh

•

Best Bank for Dig

ital

Solutions, Hong Kong

•

Best Bank for Corporate Social

Responsib

ity, Hong Kong

Bloomberg Businessweek Awards

•

Excellence Award for ‘Bank of the

Year’, Hong Kong

•

Excellence Award for ‘Retail Bank of

the Year’, Hong Kong

•

Excellence Award for ‘ESG

Sustainab

ity of the Year’, Hong Kong

Dig

ital Banker CX Awards

•

Best Retail Bank for Dig

ital CX

(Highly Acclaimed), Hong Kong

•

Best Hybrid CX (Highly Acclaimed),

Hong Kong

•

Best Retail Bank for Dig

ital CX,

Pakistan

Dig

ital Banker Global Reta

il Banking

Innovation Awards

•

Best Dig

ital Bank, Hong Kong

ESG Business Awards

•

Renewable Energy Adoption Award,

Bangladesh

Euromoney Global

Private Banking

Awards

•

Best Domestic Private Bank,

United Kingdom

•

Best for ESG Investing, Korea &

United Kingdom

European Chamber of Commerce

•

Best ESG Communicat

ions, S

ingapore

Forbes

•

Ranked 1st in the

World’s Best Banks

2023 list, China

Fortune India – Grant Thornton Bharat

Study on India’s Best Banks 2023

•

Best Foreign Bank, India

Global Finance Magazine

•

Best Bank in Sustainable Finance,

Saudi Arabia

•

Global Outstanding Leadership in

Sustainable Finance, Global

International Business Magazine

Awards

•

Best Corporate and Social

Responsib

ity Bank, Bangladesh

•

Most Innovative Dig

ital Bank,

Bangladesh

International Finance Awards

• Most Innovative Wealth

Management Bank, Ghana

MEA Finance Awards

•

Best Global Bank, Middle East

•

Best Cash Management Bank,

United Arab Emirates

The Dig

ital Banker

•

Outstanding Dig

ital Cl

ient Experience,

China

•

Best Mobile Banking Project, China

The Asset Triple A

Awards

• Best RMB Bank

Across East Africa,

Kenya

•

Best Service Providers for Trade

Finance, Sri Lanka

The Asset Triple A Dig

ital Awards

•

Dig

ital Bank of the Year, Bangladesh

The Asset Triple A Islamic Finance

Awards

•

Best Investment Bank, United

Arab Emirates

•

Best Retail Bank, United

Arab Emirates

•

Best Retail Bank, Standard Chartered

Saadiq Bangladesh

•

Sukuk Adviser of the Year,

Saudi Arabia

•

Islamic Bank of the Year, Middle East

•

Islamic Bank of the Year, Standard

Chartered Saadiq Bangladesh

•

Best Supply Chain Bank, Middle East

The Asset Triple A Sustainable

Investing Awards

•

Best Domestic Custodian, Indonesia

The Asset Triple A Treasurise Awards

•

Best RMB Bank, Indonesia

•

Best ESG Solution for Liqu

ity and

Investments, Malaysia, Taiwan &

the Phil

ipp

ines

•

Best Payments and Collections

Solution, Malaysia, Taiwan &

the Phil

ipp

ines

•

Best Trade and Working Capital

Finance Bank in South Asia, India –

ﬁfth consecutive year

•

Best Transaction Bank, Hong Kong

•

Best Cash Management Bank,

Hong Kong

•

Best E-Solutions Partner Bank,

Hong Kong

522

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Awards

Wallstreetcn

•

Excellent Foreign Bank of the Year,

China

WealthBrief

ing Europe Awards

•

Best UK International Clients Team

(Private Bank), United Kingdom

•

Best UK Client Service (Private Bank),

United Kingdom

Women in Marketing Communicat

ions

Conference Awards

•

Award for the Most Committed

Brand Supporting Women-Owned

Tech Businesses, Niger

Divers

ity & Inclus

ion and

Employer awards

Asiamoney

•

Best Bank for Divers

ity and Inclus

ion,

Hong Kong, Taiwan, the Phil

ipp

ines

and Malaysia

Asian Banking and Finance Retail

Banking Awards

•

Employer of the Year (Regional Gold),

Hong Kong

Brit

ish Chamber of Commerce

•

Divers

ity and Inclus

ion Champion

of the Year, Singapore & United

Kingdom

Equileap

•

Ranked 15th for Gender Equality,

Globally

•

Ranked 3rd for Gender Equality,

United Kingdom

Great Place to Work Accreditat

ion

• Certif

ied, Poland

• Certif

ied, Un

ited Kingdom

• Certif

ied, Un

ited States

• Certif

ied, Ind

• Certif

ied, Sr

i Lanka

India Workplace Equality Index

•

Gold Employer of the Year, India

LGBT+ Inclusion Index - Presented by

Community Business

•

Ranked 4th for the Top Employers,

Hong Kong

•

Ranked 2nd for Top Organisat

ions

Financ

ial Serv

ices, Hong Kong

LinkedIn Top Companies List

• Ranked 2nd, Singapore

LinkedIn’s Top 25 Workplaces to

Grow Your Career List

• Ranked 8th, Kenya

Newsweek

•

Listed in the Top 100 Most Loved

Workplaces, United States

Points of Light

•

The Civ

ic 50: Most Commun

ity-

Minded Company Honoree,

United States

Prior

ity for the D

isabled

•

Won the Top Award, Korea

Seramount

•

Best Company for Multicultural

Women, United States

The Straits Times

•

Named as one of the Best Employers,

Singapore

Top Employers Institute China

•

Named Top Employer, China

Financ

ial T

imes

• Listed in the

Financ

ial T

imes

European Divers

ity Leaders for

Workplace Inclusion, Europe –

4th consecutive year

523

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Glossary

Absolute ﬁnanced emiss

ions

GHG emiss

ions attr

ibuted to the Group’s

lending activ

ies expressed in CO

e and

reported in the Group’s emiss

ions table

under Scope 3, Category 15.

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 condit

ions

set out in Article 52(1) of the Capital

Requirements Regulation (as it forms

part of UK domestic law), as well as the

share premium accounts related to

those instruments.

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.

Alignment delta

Alignment delta is a variant on the

physical emiss

ions

intens

ity approach.

It measures the coefﬁcient of al

ignment

against a particular reference scenario

expressed in percentage terms i.e., how

much a particular portfolio is above or

below the net zero reference scenario.

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

in the applicable ﬁnanc

ial report

ing

framework.

ASEAN

Associat

ion of South East As

ian

Nations (ASEAN) which includes

the Group’s operations in Brunei,

Indonesia, Malaysia, Phil

ipp

ines,

Singapore, Thailand and Vietnam.

AUM or Assets under

management

Total market value of assets such as

deposits, securit

ies and funds held by

the Group on behalf of the clients.

Basel II

The capital adequacy framework issued

by the Basel Committee on Banking

Supervis

ion (BCBS)

in June 2006 in the

form of the International Convergence

of Capital Measurement and Capital

Standards.

Basel III

The global regulatory standards on

bank capital adequacy and liqu

ity,

orig

inally

issued in December 2010 and

updated in June 2011. In December 2017,

the BCBS published a document setting

out the ﬁnalisat

ion of the Basel III

framework. The latest requirements

issued in December 2017 have been

implemented from 2022.

BCBS or Basel Committee on

Banking Supervis

ion

A forum on banking supervisory matters

which develops global supervisory

standards for the banking industry.

Its members are ofﬁcials from 45 central

banks or prudential supervisors from

27 countries and territor

ies.

Basic earnings per share (EPS)

Represents earnings div

ided by the

basic weighted average number

of shares.

Basis point (bps)

One hundredth of a per cent (0.01

per cent); 100 basis points is 1 per cent.

CRD or Capital Requirements

Direct

ive

An EU capital adequacy legislat

ive

package largely implemented or

onshored into UK law. The package

comprises the Capital Requirements

Direct

ive and the Cap

ital Requirements

Regulation (CRR) and 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 has recently implemented

the UK’s version of CRR II.

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 items, includ

ing the common

shares issued by the Group and related

share premium, retained earnings,

accumulated other comprehensive

income and other disclosed reserves,

elig

ible non-controll

ing interests and

regulatory adjustments required in the

calculation of Common Equity Tier 1,

set out in Article 26(1) of the Capital

Requirements Regulation (as it forms

part of UK domestic law), capable of

being available to the inst

itut

ion for

unrestricted and immed

iate use to

absorb losses as soon as these occur.

524

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Glossary

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

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

CCyB rate is then applied to a bank’s

total risk-weighted assets.

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 grade

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. Cred

it grades 1 to 12

are assigned to performing customers,

while credit grades 13 and 14 are

assigned to nonperforming or

defaulted customers

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.

525

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

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 secur

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

risks or potential weaknesses of a

material nature requir

ing closer

monitor

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 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

credit 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.

EU or European Union

The European Union (EU) is a polit

ical

and economic union of 27 member

states that are located primar

ily

in Europe.

Eurozone

Represents the 19 EU countries that

have adopted the euro as their

common currency.

ECL or Expected credit loss

Represents the present value of

expected cash shortfalls over the

residual term of a ﬁnanc

ial asset,

undrawn commitment or ﬁnanc

ial

guarantee.

Expected loss

The Group measure of antic

ipated

loss for exposures captured under

an internal ratings-based credit risk

approach for capital adequacy

calculations. It is measured as the

Group-modelled view of antic

ipated

loss based on probabil

ity of default,

loss given default and exposure at

default, with a one-year time horizon.

Exposures

Credit exposures represent the amount

lent to a customer, together with any

undrawn commitments.

EAD or Exposure at default

The estimat

ion of the extent to wh

ich

the Group may be exposed to a

customer or counterparty in the event of,

and at the time of, that counterparty’s

default. At default, the customer may

not have drawn the loan fully or may

already have repaid some of the

princ

ipal, so that exposure

is typically

less than the approved loan lim

it.

ECAI or External Credit

Assessment Institut

ion

External credit ratings are used to assign

risk-weights under the standardised

approach for sovereigns, corporates

and inst

itut

ions. The external ratings

are from credit rating agencies that

are registered or certif

ied

in accordance

with the credit rating agencies

regulation or from a central bank

issu

ing cred

it ratings which is exempt

from the applicat

ion of th

is regulation.

ESG

Environmental, Social and Governance.

FCA or Financ

ial Conduct

Authority

The Financ

ial Conduct Author

ity

regulates the conduct of ﬁnancial

ﬁrms and, for certain ﬁrms, prudential

standards in the UK. It has a strategic

objective to ensure that the relevant

markets function well.

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.

526

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Glossary

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-SII buffer

A CET1 capital buffer which results from

designat

ion as a G-SII. The G-SII 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-SII buffer is

implemented via the CRD as Global

Systemically Important Institut

ions

(G-SII) buffer requirement.

Green and Sustainable Product

Framework

Sets out the elig

ible themes and

activ

ies that may be considered as

‘green’, ‘social’ and ‘sustainable’ at

Standard Chartered. The Framework

has been developed with support from

Morningstar Sustainalyt

ics and

updated on an annual basis in

collaboration with them. It is informed

by industry princ

iples and superv

isory

standards such as the ICMA Green

Bond Princ

iples and the 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.

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.

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 under stressed condit

ions 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.

527

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

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

appropriate level of risk for the loan

and therefore the correct price of the

loan to the borrower.

Loans past due

Loans on which payments have been

due for up to a maximum of 90 days

includ

ing those on wh

ich partial

payments are being made.

Loans subject to forbearance –

impa

ired

Loans where the terms have been

renegotiated on terms not consistent

with current market levels due to

ﬁnancial d

iff

icult

ies of the borrower.

Loans in this category are necessarily

impa

ired. See ‘Forbearance’.

Loss rate

Uses an adjusted gross charge-off rate,

developed using monthly write-off and

recoveries over the preceding 12 months

and total outstanding balances.

LGD or Loss given default

The percentage of an exposure that a

lender expects to lose in the event of

obligor default.

Low returning clients

See ‘Perennial sub-optimal clients’.

Malus

An arrangement that permits the

Group to prevent vesting of all or part of

the amount of an unvested variable

remuneration award, due to a specif

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

requirement for own funds

and elig

ible l

iab

ies

A requirement set by 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 a min

imum amount

of equity and subordinated debt to

support an effective resolution.

Net asset value (NAV) per share

Ratio of net assets (total assets less

total liab

ies) to the number of

ordinary 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 roadmap

The commitment to reaching net zero

carbon emiss

ions

in our operations by

2025 and in our ﬁnanced emiss

ions

by 2050.

NII or Net interest income

The difference between interest

received on assets and interest paid

on liab

ies.

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

against which no loss of princ

ipal

is expected.

Non-linear

ity

Non-linear

ity of expected cred

it loss

occurs when the average of expected

credit loss for a portfolio is higher than

the base case (median) due to the fact

that bad economic environment could

have a larger impact on ECL calculation

than good economic environment.

Normalised items

See ‘Underlying/Normalised’ on

page 87.

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 reported earnings is contained in

Note 2 to the ﬁnancial statements.

528

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Glossary

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%

return on risk-weighted assets for the

last three years

Physical risks

The risk of increased extreme weather

events includ

ing ﬂood, drought and

sea level rise.

Pillar 1

The ﬁrst pillar of the three pillars of the

Basel framework which provides the

approach to calculation of the min

imum

capital requirements for credit, market

and operational risk. Min

imum cap

ital

requirements are 8 per cent of the

Group’s risk-weighted assets.

Pillar 2

The second pillar of the three pillars of

the Basel framework which requires

banks to undertake a comprehensive

assessment of their risks and to

determine the appropriate amounts

of capital to be held against these

risks where other suitable mit

igants

are not available.

Pillar 3

The third pillar of the three pillars of

the Basel framework which aims to

provide a consistent and comprehensive

disclosure framework that enhances

comparabil

ity between banks and

further promotes improvements in

risk practices.

Prior

ity Bank

ing

Prior

ity Bank

ing customers are

ind

iduals who have met certain

criter

ia for depos

its, AUM, mortgage

loans or monthly payroll. Criter

ia var

ies

by country.

Private equity investments

Equity securit

ies

in operating companies

generally not quoted on a public

exchange. Investment in private equity

often involves the investment of capital

in private companies. Capital for private

equity investment is raised by retail or

inst

itut

ional investors and used to

fund investment strategies such as

leveraged buyouts, venture capital,

growth capital, distressed investments

and mezzanine capital.

PD or Probabil

ity of default

PD is an internal estimate for each

borrower grade of the likel

ihood that

an obligor will default on an obligat

ion

over a given time horizon.

Physical/production emiss

ion

intens

ity

GHG emiss

ions per a spec

ic phys

ical or

production unit, for example: tCO

tonne steel, kgCO

e/square metre.

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.

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 bas

is. These entit

ies are

considered associates for statutory

accounting purposes.

The regulatory consolidat

ion further

excludes the following entit

ies,

which 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,

Corrasi 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, Standard

Chartered Research and Technology

India Private Lim

ited, Standard

Chartered Trading (Shanghai) Lim

ited,

Tawi Fresh Kenya Lim

ited.

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.

529

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Reported performance/results

Reported performance/results with

this report means amounts reported

under UK-adopted IAS and EU IFRS. In

prior periods Reported performance/

results were described as Statutory

performance/results.

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

reported or underlying and is specif

ied

where used. See ‘RWA’ and ‘Underlying

earnings’. Income RoRWA calculated

as income for year as a percentage

of RWA.

RWA or Risk-weighted assets

A measure of a bank’s assets adjusted

for their associated risks, expressed

as a percentage of an exposure value

in accordance with the applicable

standardised or IRB approach

provis

ions.

Risks-not-in-VaR (RNIV)

A framework for ident

ify

ing and

quantify

ing marg

inal types of market

risk that are not captured in the Value

at Risk (VaR) measure for any reason,

such as being a far-tail risk or the

necessary histor

ical market data not

being available.

Roll rate

Uses a matrix that gives average loan

migrat

ion rate from del

inquency

states from period to period. A matrix

multipl

icat

ion is then performed to

generate the ﬁnal PDs by delinquency

bucket over different time horizons.

Scope 1 emiss

ions

Direct GHG emiss

ions that occur from

sources owned or controlled by the

Group - i.e., emiss

ions from combust

ion

in owned or controlled boilers, furnaces,

vehicles, as well as fugit

ive em

iss

ions

from pressure contain

ing equ

ipment at

Group locations.

Scope 2 emiss

ions

Indirect GHG emiss

ions from the

generation of purchased or acquired

electric

ity, steam, heat

ing, or cooling

consumed by the Group.

Scope 3 emiss

ions

All ind

irect GHG em

iss

ions (not

included

in Scope 2) that occur in the value chain

of the Group, aris

ing from sources not

controlled by the Group. This comprises

of both upstream and downstream

value chain emiss

ions and

includes

absolute ﬁnanced emiss

ions.

Secured (fully and partially)

A secured loan is a loan in which the

borrower pledges an asset as collateral

for a loan which, in the event that the

borrower defaults, the Group is able to

take possession of. All secured loans are

considered fully secured if the fair value

of the collateral is equal to or greater

than the loan at the time of orig

inat

ion.

All other secured loans are considered

to be partly secured.

Securit

isat

ion

Securit

isat

ion is a process by which

credit exposures are aggregated

into a pool, which is used to back

new securit

ies. Under trad

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 listed in

the Prudential Regulation Authority

waiver written notice dated 21 August

2023. This differs from Standard

Chartered Bank in that it includes the

full consolidat

ion of three subs

iar

ies,

namely Standard Chartered Holdings

(International) B.V, Standard Chartered

Grindlays PTY Lim

ited, SCMB Overseas

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.

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).

530

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

Glossary

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 bus

iness 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

The Group’s approach to sustainab

ity

is underpinned by our Sustainab

ity

Aspirat

ions, our long-term susta

inab

ity

goals. Each Sustainab

ity Aspirat

ion

encompasses a number of key

performance ind

icators that we use to

measure our progress and outcomes

in areas in which we can make a

contribut

ion to the del

ivery of the UN

Sustainable Development Goals (SDGs).

Sustainable Finance assets

Assets from clients whose business

activ

ies are aligned with the

Sustainab

ity Bond Framework, those

generated from transactions for which

the use of proceeds will be util

ised

towards elig

ible themes and act

ies

set out with

in the Susta

inab

ity Bond

Framework, or assets generated

through Standard Chartered’s own

lending activ

ies to small and medium

sized enterprises (SMEs) in elig

ible

markets as per the criter

ia set out

the Sustainab

ity Bond Framework.

Sustainable Finance income

Income generated from Sustainable

Finance products as listed in the Green

and Sustainable Product Framework.

Addit

ional products may be approved

throughout the year by the Sustainable

Finance Governance Committee.

Sustainable Finance mobil

ised

Mobil

isat

ion of Sustainable Finance is

deﬁned as any investment or ﬁnanc

ial

service provided to clients that

supports: (i) the preservation and/or

improvement of biod

ivers

ity, nature or

the environment; (i

i) the long-term

avoidance/decrease of GHG emiss

ions,

includ

ing the al

ignment of a client’s

business and operations with a

1.5 degree Celsius trajectory (known as

transit

ion ﬁnance); (

i) a social purpose;

or (iv) incent

ises our clients to meet

their own sustainab

ity object

ives

(known as sustainab

ity-linked ﬁnance).

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.

531

Standard Chartered

– Annual Report 2023

Supplementary informat

ion

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’.

532

Standard Chartered

– Annual Report 2023

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