Standard Chartered PLC

Good morning and good afternoon, everyone. Welcome to our full year 2024 results presentation. We delivered a strong performance in 2024 with a return on tangible equity of 11.7%, up 160 basis points year on year. We achieved record income of $19.7 billion, including a very strong performance in wealth solutions and double digit growth in global markets and banking. Our fourth quarter performance continued the consistent delivery of previous quarters. These results demonstrate that our strategy of combining cross-border capabilities with leading wealth management expertise is firing on all cylinders. We've remained disciplined on cost, delivering positive income to cost jaws in 2024, and we're now one year into our Fit for Growth program, which is progressing at pace. We continue to return capital to our shareholders, and today we're announcing a 37% increase in full-year dividend per share and a new share buyback of $1.5 billion. This will take our total shareholder distributions announced since our full year 2023 results to $4.9 billion and well on the way to delivering our target of at least $8 billion by 2026. We've made a positive start to 2025, and we're tracking to the upper end of our 5% to 7% CAGR target for 2023 to 2026. Before I hand over to Diego to talk through our performance in more detail, I'd like to thank our much valued colleague, Jose Pinal, who will step down as group chairman later this year. Jose's been a great partner to me and to the members of the board during his tenure as chairman. He's helped steer the group and has made tremendous contributions to the results we're delivering today. I wish Jose the very best in his future endeavors. I also want to extend my congratulations to Maria Ramos, who will succeed Jose as a group chair. Maria is a seasoned leader with a wealth of experience and leadership positions within the private and public sectors. I look forward to working with Maria in her new capacity as we continue to deliver on the group strategy. Diego will now take you through the performance, after which I'll come back to update you on our strategy, and we will then both come back for the Q&A session. So, Diego, over to you.

Thank you, 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 otherwise stated. The group delivered headline income growth of 14% with operating income of $19.7 billion in 2024. Adjusting for a deposit insurance reclassification and the notable items, 2024 income was up 12% and above our income guidance of towards 10%. We have spoken about the notable items in previous earning calls, but let me give you the background on the deposit insurance reclassification, which I just mentioned. Historically, our deposit insurance was recognized within NII. However, to align with industry standards, we decided that these payments should be recorded as operating expenses. As a result, we reclassified the 2024 cost of the deposit insurance of $147 million in Q4, adjusting this from NII into expenses. To be clear, the impact of this reclassification is net neutral to operating profit. NII for the year was $10.4 billion, up 10%, and non-NII was up 20%, driven by a record performance in wealth solutions and double-digit growth in global markets. Operating expenses were up 7% for the year, and credit impairment of $557 million was up 5%. Other impairment included $561 million relating to the write-off of software assets as the group conducted a proactive review of its software accounting treatment as discussed in previous quarters. This review is now completed with net nil impact on capital. Restructuring charges of $441 million are primarily from the impact of organizational transformation actions including $156 million relating to cost to achieve of the Fit for Growth program. 2024 profit before tax was up 21%, and return on tangible equity was 11.7%, up 160 basis points. Now let's turn to each component in detail. 2024 NII of $10.4 billion was up 10%, or 8% excluding the deposit insurance reclassification, and slightly above our guidance range of $10 to $10.25 billion for 2024. Looking into expectations for 2025, there are several elements at play. First, NII in Q4 was particularly strong, benefiting from assertive management of pass-through rates, as well as the impact of the reclassification. So, the Q4 baseline is higher than anticipated, and we think there could be some reduction in deposit pass-through rates in 2025. Second, as you will see on slide 29 in the appendix, the currency weighted average interest rate outlook for 2025 is 76 basis points lower than 2024, albeit this has improved around 12 basis points since we last spoke to you. You will see from the same slide that our exposure is to a broad range of currencies and the rate outlook can vary between these different currencies. Third, there is the headwind of around 1% to NII in 2025 from the WRB transformation actions we announced in Q3. As a result of all these factors, we still think that NII may be challenging to grow, albeit this will be, of course, from a higher 2024 base, and hence the overall outcome in 2025 will be somewhat above what we anticipated a few months ago. Our hedging program has continued to build at a rapid pace, with a structural hedge of $64 billion at the end of 2024, which we expect to grow to $75 billion by the end of 2025. Broadly speaking, our disclosed interest rate sensitivity is now around 3% of income for a 100 basis point reduction in rates, much lower than around 10% back in 2021. Non-NII continues to be a strong driver of growth and is around half of the group's total income. Wealth Solutions, Global Markets and Global Banking make up over 70% of our Non-NII and all delivered double-digit growth in 2024 with a record performance in Wealth Solutions. I'll talk to these products in more detail when I cover the performance of our business segments. Now turning to expenses. Operating expenses were up 6% in 2024, excluding the deposit insurance reclassification, which was booked in Q4. Higher expenses in Q4 were due to this reclassification, in addition to investment spend timing, which we highlighted in previous quarters, and around $65 million impact from the review of software capitalization. The deposit insurance cost is expected to be around $200 million each year going forward. As a result, we are now targeting our 2026 total expenses to be below $12.3 billion, including the deposit insurance cost and around $100 million of UK bank levy. There is no change to the previous $12 billion cost cap guidance on a like-for-like basis, and we remain committed to delivering positive jobs each year. We are now one year into our Fit for Growth program, which has over 200 projects in train. We have achieved the equivalent of around $200 million of annualized savings from projects executed in 2024, which is slightly ahead of the pace we had set for ourselves. Let me give you a few examples of the different initiatives we are working on. We removed complexity from decision-making by simplifying our organizational matrix, transforming from a regional to a business-centric model. This will deliver around $60 million in savings. In WRB, we are improving client experience by simplifying and digitizing key processes in onboarding and servicing, including client due diligence, asset transfers, corporate actions, processing, and cards dispute resolution, which should deliver around $40 million in savings. We are also implementing a technology platform that will optimize workflows within our operations and will significantly reduce turnaround times to deliver quality services to clients. This went live in December 2024, and the first wave of use cases will be deployed this year. Lastly, on vendor sourcing, we are automating our end-to-end procurement process, which should deliver around $20 million in savings. We're off to a good start with Fit for Growth and slightly ahead of plan, and we expect the majority of the $1.5 billion of savings to ramp up from this year through to next year, with tail effects continuing post-2026. And we expect to have incurred around 60% of the cost to achieve by the end of this year. Moving now to credit impairment. CIB benefited from significant recoveries throughout the year, with a net release of $106 million in 2024. This was partly offset by a precautionary $58 million overlay for clients who have exposure to Hong Kong commercial real estate, including $24 million taken in Q4. Slide 32 provides some more details on our $2.6 billion exposure to this sector, which is focused on a limited number of top-tier clients. In WRB, impairment increased $290 million in 2024, mainly driven by the high interest rate environment impacting repayments on some unsecured credit cards and personal loan portfolios, as well as the growth and maturity of our digital partnership portfolios. Impairment in the venture segment was down 13%, mainly from reduced delinquency rates in MOCs. Our 2024 loan loss rate was 19 basis points, benefiting from the net release in CIB, which we do not expect to be repeated in the coming years. We are therefore maintaining our guidance that we expect the loan loss rate to normalize towards the historical through-the-cycle 30 to 35 basis points. Our high-risk assets were down $1.8 billion in 2024. The increase in early alerts in Q4 were mainly due to a limited number of Hong Kong commercial real estate exposures. Other than this, we are not seeing any new significant signs of stress emerging across the group. Underlying loans and advances to customers were up 2% in the quarter, mainly from the execution of pipeline deals in global banking, bringing the full-year underlying growth to 4%, and in line with our low single-digit percentage growth guidance. WRB loan growth remained subdued during the year, but we saw some growth in mortgages in Korea in Q4 as pricing conditions improved. Underlying customer deposits were up 1% in 2024, as growth in WRB-Casa was partially offset by outflows in CIB deposits, particularly at year-end, which have largely reversed. Turning now to RWA and capital. Risk-weighted assets were down around $2 billion in the quarter. This was driven by a $5 billion increase in asset growth and mix, more than offset by lower market risk RWA, as well as the impact of FX. We continue to generate strong levels of capital with a CET1 ratio of 14.2% in 2024. And as Bill mentioned, we are announcing today a new $1.5 billion share buyback, which will take our pro forma CET1 ratio to 13.6% as we continue to operate dynamically within our 13 to 14% target range. Since our full year 2023 results, we have now announced around $4.9 billion of shareholder distributions, including $4 billion in share buybacks, as well as the 2024 interim dividend of $230 million and a proposed final dividend of $679 million. Our share count is down 9% in 2024 and 21% since 2021, which has helped fuel growth in our per share metrics. Our full-year dividend per share is up 37% year-on-year. Our underlying earnings per share has increased 30%, and our TNAV per share is up 11%. We are maintaining our distribution target of at least $8 billion between 2024 and 2026. We will also continue to target increasing our full-year dividend per share over time. Now, let's take a look at our business segment's performance. CIB income for the year was $11.8 billion, up 6%, driven by double-digit growth in global markets and global banking, with a particularly strong Q4, up 15%. Global markets income was up 15%, with flow income up 12%, driven by higher FX and credit trading. Q4 was strong for episodic income compared to the same quarter last year, as we saw higher levels of volatility across our footprint. Global banking income was also up 15% and up 26% in Q4, driven by favorable market conditions in capital markets and higher origination volumes. Transaction services income was flat, mainly due to margin compression, or down 1%, excluding the impact of deposit insurance reclassification. 2025 has started strongly in global markets and global banking, and we are seeing a broad-based pickup in client activity across asset classes, albeit the environment remains uncertain. We will be hosting a CIB Investor Seminar on the 15th of May this year, where we will provide a deep dive into our distinctive value proposition and how the business is benefiting from the new corridors of globalization. Turning to wealth and retail banking, income was up 11% to $7.8 billion in 2024. This was driven by a record performance in wealth solutions, with investment products income up 36% from broad-based growth across products and many of our top wealth markets. We continue to see steady growth across our key leading indicators, including onboarding 265,000 new-to-bank Affluent clients in 2024, having consistently onboarded more than 65,000 new clients every quarter over the past six quarters. We also had $44 billion in Affluent net new money in 2024, equivalent to a strong 16% growth of Affluent AUM coming from net new money. This included $21 billion of wealth net new sales, up 73%, driven by strong international flows. Q4 remains strong, delivering $10 billion of net new money. And 2025 has started well for wealth solutions. Now, on to ventures. MOX has grown to around 650,000 customers with an average of three products per customer. As a result, income was up 15% and customer deposits have grown by 57% whilst we remain disciplined in our approach to lending. For Trust, income more than doubled and we ended the year with close to a million clients and have since surpassed this level. MOX and Trust are each expected to be profitable in 2026. SEV launched four new ventures in the year and raised $60 million of funds in a challenging environment. As our portfolio matures, we expect to generate gains on sales or mergers of our ventures and will increasingly obtain third-party funding for expansion of ventures, demonstrating the economic value we are creating. We continue to guide that underlying losses in our venture segment will not exceed $200 million across 2025 and 2026. Lastly, we will be making some changes to our financial disclosures effective in Q1 2025 by allocating some of the items currently held in Central and others to the underlying business segments. These include allocation of some of the income, 81 costs and risk-weighted assets currently held centrally in Treasury, as well as some corporate centre costs and the UK bank levy. The main purpose of this is to improve resource allocation as well as to show a more accurate view of the returns generated by the businesses. Also note that there is no impact to the group's consolidated financials resulting from these changes. We will publish a data pack showing the representation of financial data prior to our Q1 results. I will now hand back to Bill to take us through the strategic updates. Over to you, Bill.

Thank you, Diego. As I mentioned in my opening remarks, we've been successfully executing on our strategy of combining differentiated cross-border capabilities with leading wealth management expertise. We've managed our portfolio of products, clients, and markets dynamically over the years and have taken actions across our businesses to reallocate capital to higher returning areas. This has helped us to deliver sustainably higher returns with 2024 ROTE of 11.7%. Our TNAV per share has also increased significantly in recent years and is up around 25% since 2022. Let's now take a look at the actions we're taking to drive improving returns over the medium term. In CIB, we said we will further sharpen the focus on serving the cross-border needs of our large global corporate and financial institution clients. We're already seeing this in our results. We set ourselves a target to increase cross-border network income to around 70% of total CIB income over the medium term, and this is now 61% in 2024. The proportion of CIB income from our financial institution clients increased by 2 percentage points in 2024 to 51%. Our target is to raise this to around 60% over the medium term, having increased by 8 percentage points since 2019. These targets supersede the ones we previously announced with our 2023 results in February last year. As part of our continued investment into improving our product offering earlier this year, we announced a strategic partnership with Apollo to support and accelerate financing for infrastructure, clean transition and renewable energy globally. Of course, the world in 2025 is in a state of change with regards to geopolitical trends and potentially in its patterns of global trade. So now let's look at our cross-border network strategy and why we believe we are well positioned. Our cross-border network income of $7.3 billion in 2024 has been growing strongly, with an 11% CAGR since 2019, and it is delivering attractive returns. Our network income is not just trade. It's highly diversified across a range of products, from transaction services to global markets and global banking. Geographically, it is not overly reliant on a single bilateral trade relationship, and only seven individual market corridors generate network income greater than $100 million per annum. This is demonstrated by the chart on this slide. On the left is the originating market, where the client is domiciled, and the lines flow from left to right, with the width of the lines reflecting the network income for that cross-border corridor. It shows why we expect to continue to benefit from the structural reconfiguration of trade flows in our footprint. Around one-third of our total network income is intra-Asia and is growing at a fast pace. As a whole, Asia is our largest generator of network income, and we are uniquely positioned with a presence in 21 markets. ASEAN is increasingly important in capturing supply chain diversification shifts, and around 20% of our network income is inbound into ASEAN. In addition, we're well positioned to capitalize on the growth of the Middle East, which is one of our fastest-growing corridors, up at around 17% CAGR since 2019. Lastly, it's worth reminding you that our U.S.-China cross-border income is relatively small and only around 1% of our total CIB income. That's not to say that we're complacent, and we will continue to be nimble in how we help our clients capture future market opportunities. Turning now to wealth and retail banking. In WRB, we continue to build on our strengths of being a leading wealth manager for affluent clients in Asia, Africa, and the Middle East. At the Affluent Investor Seminar we held back in December, we committed to a set of ambitious targets of $200 billion of net new money from 2025 to 2029 and double-digit income CAGR and wealth solutions from 2024 to 2029. We delivered $44 billion of net new money in 2024 and achieved strong double-digit growth of 28% in Wealth Solutions income. Our affluent clients' share of WRB income is now 68%, and this was up three percentage points year-on-year. We're targeting for this to reach 75% by 2029. Our ability to service the full client continuum and international clients in our core markets remains a powerful growth engine for us. In 2024, we uptiered 295,000 individual clients and increased the number of international clients by 18% year on year. We've also continued to execute on our actions of reshaping our mass retail business by announcing the potential sale of WRB businesses in Botswana, Uganda, and Zambia all in November of last year. We will invest $1.5 billion in our affluent business over the next five years to accelerate growth, and this incremental investment will be funded by the reshaping of our mass retail business. Now into sustainable finance. In 2024, our sustainable finance income was $982 million of 36% year-on-year and very close to our 2025 target of over $1 billion. The growth in our sustainable finance income has significantly outpaced that of global renewables investment since 2019 and has delivered an attractive return on risk-rated assets, up 100 basis points compared to 2023. We've also mobilized $121 billion of sustainable finance since the beginning of 2021, making good progress towards our $300 billion commitment by 2030. We continue to advance our broader sustainability agenda as we embed net zero across the organization and through the transaction lifecycle. We recognize that achieving our net zero target by 2050 requires active collaboration and engagement with our clients, so I'm also pleased to have published our inaugural transition plan alongside our annual report today. Looking ahead, we've made no changes to our 2025 and 2026 targets on a like-for-like basis, albeit the growth rates are now from a higher base in 2024 than previously expected. We'll continue to deliver strong income growth, and with a positive start to 2025, we're currently tracking towards the upper end of our 5% to 7% CAGR target for 2023 to 2026. We continue to expect to deliver positive jaws in every year. We remain committed to distributing at least $8 billion to our shareholders through the dividend and share buybacks from 2024 to 2026, and we're continuing to target ROTE approaching 13% in 2026 and to progress thereafter. To conclude, our strategic focus and execution has delivered a strong performance. Our cross-border focus positions us well to benefit from new corridors of globalization across CIB and WORB. We remain disciplined on costs, and our fit-for-growth program is accelerating. This all leads to improving returns and increased shareholder distributions. This is our time. With that, I'll hand back to the operator in Diego, and I will be happy to take your questions.