Standard Chartered PLC

Good morning and good afternoon, everyone. Today I'm taking our third quarter 2024 results call from Saudi Arabia, attending the Future Investment Initiative, and I'm joined by Diego from the London office. We delivered a strong performance in the third quarter, with income up 12% and profit before tax up 41%, driven by a record quarter in wealth solutions and double-digit growth in global markets. As a result of this strong performance, we're upgrading our guidance for income growth this year towards 10%. These results demonstrate that our strategy of offering cross-border corporate and investment banking capabilities and leading wealth management for affluent clients is working. We're now taking action to double down on that strategy, concentrating capital and investment in our areas of greatest differentiation and competitive strength to deliver sustainably higher returns. In the CIB, we will further sharpen the focus on serving the complex needs of our largest global clients and rely on our unique cross-border capabilities. In wealth and retail banking, we're doubling our investment plans in our fast-growing and high-returning wealth management business for affluent clients. This incremental investment will be funded by reshaping our mass retail business to focus on building our strong pipeline for future affluent and international banking clients. These actions will further simplify our business, help us to generate high-quality growth, and improve our return on tangible equity over the medium term. We're now targeting an ROTE approaching 13% in 2026. We're also increasing our shareholder distribution target from at least $5 billion to at least $8 billion over the three years to 2026. Diego will now take you through our Q3 performance, and I will then provide more detail on our strategy for CIB and WRB. We'll then both come back for the usual Q&A session.

So over to you, Diego. Thanks, Bill. Good morning and good afternoon to everyone on the call. In my remarks, I will be comparing year on year on an underlying basis and speaking to constant currency unless stated otherwise. The group delivered top line growth of 12% with operating income of $4.9 billion as the positive momentum we saw in the first half continued into the third quarter. Net interest income was $2.6 billion, up 9%. Non-net interest income was up 15%, driven by a record quarter in wealth solutions and a strong performance in global markets. Operating expenses were well controlled, up only 2%. Credit impairment continued to trend well with a net release in CIB this quarter. Other impairment included further charges related to the write-off of software assets with no impact on capital. Profit before tax was up 41%, and ROTE was 10.8% in the quarter, up four percentage points. Taxes were 30.8% for the first nine months of the year, and we continue to expect the full year 2024 underlying effective tax rate to be around this level. It is also worth noting that the statutory tax rate is expected to be a few percentage points higher than the underlying for this year and should trend downwards in future years. Our CET1 ratio of 14.2% includes the full 62 basis points impact of the $1.5 billion share buyback announced earlier in July. The tangible net asset value per share is up 65 cents in the quarter and is up 18% year on year. As usual, we have provided a more detailed breakdown of the TNAV walk in the appendices. Turning now to the various components of income. NII of $2.6 billion was up 1% quarter on quarter from mixed improvement and extra day count. We continue to expect NII of $10 to $10.25 billion for this year. Looking ahead, the current interest rate environment and outlook will make it more challenging to grow NII in 2025. There are a number of factors at play here, most notably how the rate cycle unfolds and the impact this will have on liability pricing and asset growth. There is also an additional headwind of around 1% to NII in 2025 from the further actions we are taking in WRB, which Bill will talk about in more detail later. Now turning to non-NII, which as a reminder, is around half of our total income. Wealth Solutions had a record quarter with income up 32%, driven by very strong growth in investment products, up 40%, and bank assurance income up 16%. Global markets also delivered double-digit growth, and global banking was up 7%. Given the combination of a stronger-than-expected revenue outturn in 2024 and NII uncertainty, we anticipate overall income growth in 2025 will be slightly below our medium-term range of 5% to 7%. We remain confident that over the course of our 23 to 26 plan, income will grow at a 5% to 7% stagger. Expenses were up 2% year-on-year and down 3% versus Q2. We expect expenses in Q4 to be up quarter-on-quarter due to phasing in Q3 and following our usual investment spend profile, which is weighted towards the end of the year. We are over six months into our three-year fit-for-growth program, and we are progressing well. As previously communicated, the majority of the $1.5 billion of savings are expected to ramp up from 2025 with a tale of efficiency effects continuing after 2026. And we expect to incur around 60% of the $1.5 billion cost to achieve by the end of 2025. We remain committed to delivering positive jobs each year and the absolute cost cap of $12 billion in 2026. Looking now at credit impairment, which was down $116 million year on year. Credit impairment in CIB continues to be benign with a $10 million net release in the quarter. This benefited from more recoveries, partly offset by a $34 million overlay for clients who have exposure to Hong Kong commercial real estate. The $177 million charge in WRB was up $31 million quarter-on-quarter, including a $21 million overlay in Korea relating to e-commerce platforms. Ventures credit impairment remained broadly stable and is in line with the recent run rate. Other impairment included a $68 million charge from software assets write-off. This is the latest installment of a proactive review of software accounting, which you would have seen come through over the last couple of quarters. It is due to be completed by year end with another charge in Q4, which is likely to be higher than Q3. Just as a reminder, this has no impact on capital. Building on the underlying growth of loans and advances to customers in the first half of the year, we saw green shoots of growth in trade in Q3. However, total underlying customer loans and advances were down slightly in the quarter, as we continued to be disciplined in originating WRB mortgages. In CIB, strong origination volumes are driving the growth in global banking income, even though they are not always reflected in loan growth due to our originate-to-distribute model. Underlying customer deposits were up $3 billion in the quarter, driven by an increase in time deposits in WRB related to affluent clients. Turning now to capital. Risk-weighted assets were up $7 billion in the third quarter due to two main drivers. First, $3 billion of market risk-weighted assets in CIB deployed to help clients capture market opportunities. Second, a $3 billion increase from FX, which is broadly neutral from a capital ratio perspective. Following the PRA's clarification of the Basel 3.1 rules, we now expect the RWA Day 1 impact will be less than previously thought and close to neutral. We continue to maintain a robust capital position with a CET1 ratio of 14.2% in Q3, including 62 basis points related to the $1.5 billion share buyback, which is more than 60% completed to date. As a result of our continued strong performance, and more certainty on the impact of Basel 3.1, we are upgrading our shareholder distribution target from at least $5 billion to at least $8 billion between 2024 and 2026. However, we will remind you that we still expect to face some headwinds in capital generation in 2025 owing to the cost to achieve for the fit for growth program. Let's look at the performance of CIB, which delivered a record third quarter in income. As I mentioned earlier, global market income was up 16%, driven by a strong double-digit performance in both flow and episodic income. The increase in flow was driven by higher volumes in effects, particularly with financial institution clients, including growth in Renminbi-related income, as well as higher credit trading income. And the growth in episodic was mainly driven by higher rates income. We've also seen positive momentum and sentiment across our network with, for example, encouraging growth in Africa, helped by Nigeria and South Africa. Global banking was up 7% driven by favorable market conditions in capital markets and higher origination volumes. The pipeline for the rest of the year is healthy and the focus remains on execution. Transaction services income was down 5% due to margin compression from higher pass-through rates. However, we continue to see green shoots of asset growth, with underlying trade assets up $2 billion in the quarter. We will be hosting a CIB investor seminar in March next year, and we will be providing more details of this event closer to the date. In wealth and retail banking, income was up 11% to $2 billion. The record performance in wealth solutions was supported by continued strong quarterly momentum in new-to-bank clients, with an additional 71,000 clients onboarded in Q3, continuing a trend that has now been sustained over seven quarters. There was $10 billion of affluent net new money inflows in the quarter and $34 billion so far this year, which is equivalent to a strong 16% annualized growth of affluent AUM coming from net new money. We are already a leading wealth manager for affluent clients across Asia, Africa, and the Middle East, and we continue to innovate our leading product offerings. For example, in Singapore, we recently launched a VCC fund, which is a new fund structure that allows our affluent clients unique exposure to some leading global alternative asset managers. As a reminder, we are hosting an affluent and wealth investor seminar on the 3rd of December. Lastly, turning to our ventures business. MOX now has the largest market share across all digital banks in Hong Kong for customer loans and CASA. In Singapore, Trust has recently launched an additional cashback card to appeal to a broader customer base. We now expect both MOX and Trust to be profitable in 2026. Reflecting the maturing nature of our portfolio, losses for the venture segment are expected to be less than $200 million cumulatively across 2025 and 2026. with the majority of these losses incurred next year. I will now hand back to Bill to go through some details of the further actions we are taking to deliver sustainably higher returns.

Great. Thanks, Diego. As I mentioned in my opening comments, we've been successfully executing our strategy of offering cross-border corporate and investment banking capabilities and leading wealth management for affluent clients, delivering around 100 basis points of growth in ROTE annually since 2015. We continue to manage our portfolio of products and markets dynamically, taking regular actions across our business to reallocate capital to the highest returning areas. A couple of recent examples include our investments in Saudi Arabia and Egypt, where we committed total capital of $175 million. And an example of a divestment has been the sale of our personal loan book in India, which we made a couple of weeks ago. Today, we're announcing a set of further actions to deliver sustainably higher returns simplify our business, help us generate high quality growth and improve our return on tangible equity over the medium term. In WRB, we're doubling down on our highly successful, distinctive and profitable wealth management offering to affluent clients. Over the next five years, we'll invest around $1.5 billion in relationship managers and investment advisors, as well as enhanced international and digital capabilities. This is double our previous investment plan. will grow the number of relationship managers by around 50% over the medium term, and we also target to increase the annual flow of up-tiered clients. This incremental investment will be funded by reshaping our mass retail business and sharpening its focus on building a strong pipeline of future affluent and international banking clients. The impact of this reshaping will vary across our network. We'll continue to review single product lending relationships and portfolios in order to prioritize higher growth and higher returning segments. And we're exploring the opportunity to sell all or part of a small number of businesses where the strategic rationale is not sufficiently compelling. These actions are expected to take effect over the next 18 to 24 months. We're confident that our increased investment and focus will help us continue to outperform the market in terms of asset gathering and income growth enabling us to deliver double-digit percentage growth in wealth solutions income. We therefore expect income from our affluent segment to increase from two-thirds of WRB to around three-quarters in the medium term. Now turning to CIB, we will further sharpen our focus on serving the cross-border needs of our large global corporate and financial institution clients. We'll invest in relationship managers in the network corridors, showing the highest growth potential, such as Asia to the Middle East. This will deepen our wallet share with these clients and deliver higher returns. We're going to exit around 3,000 or a quarter of our total CIB clients whose needs do not play directly to our strengths. And we will continue to redeploy RWAs into higher returning businesses as part of our ongoing optimization activities. We aim to grow income from financial institutions to around 60% of CIB over the medium term and to increase the percentage of cross-border network income to around 70%. These actions will enable us to improve both our returns and potential for growth in CIB by delivering our unique capabilities our network can offer to clients who rely on them the most. Looking ahead, we're substantially raising our shareholder distribution target from at least $5 billion to at least $8 billion between 2024 and 2026. And we're upgrading our 2026 ROTE guidance from 12% to approaching 13% and to progress thereafter. Now to conclude. The group delivered a strong performance in the third quarter with income up 12% and profit before tax up 41%. The positive momentum from the first half of the year has continued into Q3 and we're upgrading our 2024 income growth guidance towards 10%. We're taking further action to deliver sustainably higher returns by doubling investment plans and our fast growing and high returning wealth management business. and further sharpening our focus on serving the needs of our larger global corporate and institutional clients who rely on our unique cross-border capabilities. With that, I'll hand back to the operator, and Diego and I will be happy to take questions.