Standard Chartered PLC

Good morning and good afternoon, everyone. Thank you for joining us today. I'll take a few minutes to lead you through our first quarter 2026 results. Then Bill Maness and I will take your questions. In my remarks, I'll be comparing performance year on year at constant currency, unless otherwise stated. As a reminder, these results are now presented on a reported basis, as outlined in the press release we published on March 25th. We've had a strong start to the year, delivering record income on the back of continued momentum in wealth solutions, global banking, and global markets flow income. We are maintaining our 2026 guidance, and we continue to expect return on tangible equity to be greater than 12% this year. Since we last spoke to you, the conflict in the Middle East has developed. Our priority remains the safety of our people and serving our clients' needs. While there's been no material impact on our portfolios, we have taken precautionary ECL overlays in order to reflect the risk of a prolonged conflict. We remain watchful of the external environment, and we will continue to support our clients as they adjust to this evolving landscape. I'll now take you through the numbers in more detail. First quarter income of $5.9 billion was up 9%. This was driven by strong non-interest income growth, particularly in wealth solutions and global banking. Expenses were up 1%, with business growth largely funded by fit for growth and other efficiency savings. Credit impairment of $296 million included $190 million of precautionary overlays in relation to the Middle East conflict. Put together, we delivered $2.5 billion in profit before tax, a return on tangible equity of 17.4%, and a 31% increase in our EPS. I will now cover each component in detail. NRI was down 3% quarter on quarter, and volume growth and mixed benefits were offset by the impact of lower rates during the quarter, especially HIBOR. Volume growth was supported by an increase in client activity in global banking, and we also saw a positive impact from improved liability mix, especially in transaction services and WRB CASA. While interest rate expectations have been volatile in recent months, our weighted average rate outlook remains largely unchanged, indicating a 42 basis point reduction in 2026. We continue to expect pass-through rates to normalize over time, and, as a reminder, WRB portfolio actions are expected to reduce NII by around 2% in 2026. These headwinds are expected to be mitigated by volume growth, and as a result, we continue to expect NII to be broadly flat in 2026. Non-interest income, which was around 51% of group income in Q1, was up 16% year on year. This was driven by significant growth in wealth solutions and global banking. I'll talk to the product performance in more detail when I come to the business segments. Turning to expenses. Q1 operating expenses were up 1% year on year, as business growth and inflation was largely offset by FFG. We incurred $119 million of FFG cost to achieve in the quarter, and have achieved an exit run rate savings of around $900 million so far. We continue to expect expenses to remain broadly flat in 2026 at constant currency and excluding material notable items. Credit impairment for the corridor was $296 million, including $190 million of management overlays and post-model adjustments relating to the Middle East conflict. This includes a new downside scenario, which considers the impact of a prolonged geopolitical crisis in the Middle East, leading to sustained disruptions in energy supply and elevated global commodity prices. In addition, we've taken overlays for the petrochemical sector and for potential sovereign downgrades, which could result from a sustained conflict. COB credit impairment was $111 million, reflecting a portion of these overlays, offset by net recoveries across the rest of the portfolio. WLB remained resilient and continued to benefit from portfolio optimization actions, with impairment broadly flat despite the overlays. Our annualized loan loss rate in the quarter, including the overlays, was 32 basis points within our 30 to 35 basis point through the cycle guidance. Overall credit quality remained resilient, Our high-risk assets were up around $700 million in the quarter due to an increase in early alerts as a result of the Middle East conflict, while credit grade 12 and net stage 3 remained broadly stable. The Middle East represents around 6% of the group's exposures. More than 90% is in CIB and weighted towards sovereigns and financial institutions, while WLB exposures are mostly secured. We've included details on this later in the deck. Moving on to balance sheets. We continue to see growth in underlying loans and advances to customers, which were up 3% or $10 billion in the quarter, primarily from global banking and secured wealth lending. Underlying customer deposits were up 3%, with strong growth in CASA across WLB and CIB. Risk-weighted assets were up 3% in the quarter, primarily driven by asset growth and mix, as well as $3 billion increase in market risk RWA, as we continue to help clients capture market opportunities. These were partly offset by FX and optimization actions. Our CE21 ratio was 13.4% in the quarter, as capital generation was offset by distributions and business growth. Now let's take a look at our business segments. CIB income was $3.6 billion, up 6%. We saw continued momentum in global banking, with income up 19% on the back of increased origination volumes. Within global markets, we delivered record flow income, up 17%. We saw increased client activity across rates and FX products, while we also benefited from our continued investments in electronic platforms and people. Episodic income was lower, against a strong comparator in Q1 2025, with 12-month rolling income now around $800 million. Turning to WRB, income was up 13% to $2.5 billion. This was driven by a record quarter in affluent net new money and wealth solutions income. Wealth solutions was up 32% with strong client activity across multiple asset classes in investment products, while bank assurance was up 20%. Affluent net new money inflow of $18 billion was equivalent to 16% annualized growth in affluent AUM and was driven primarily by wealth products. This demonstrates our strength in engaging a growing affluent client base, rapid idea execution on our open architecture platform, enabling value creation amidst market volatility. As a reminder, the digital banks are now reported within WRB. Box was profitable in the first quarter, and trust also turned profitable in March. So to conclude, we've had a strong start to the year with a standout performance in wealth solutions, global banking, and global markets flow income. This reflects the continued success of our cross-border and affluent strategy. Our credit quality remains resilient, and we are watchful of the external environment. As mentioned, 2026 guidance remains unchanged, and we will provide a medium-term financial framework at our investor event in May. With that, I'll hand back to the operator, and Bill Maness and I will be happy to take your questions. Thank you.

As a reminder, to ask a question on the phone, please press star 1-1 and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Once again, it's star 1-1 and wait for your name to be announced. To withdraw your question, please press star 1-1 again. If you wish to ask a question on the webcast, please type them in the question box and click submit. We are now going to proceed with our first question. The questions come from the land of Joseph Dickerson from Jefferies. Please ask your question.

Hi. Good morning, guys. Really good quarter here. pretty much across the board. Maybe slightly an unfair question, but just on the 2026 guides, I guess we've started off the year very strong on NII and deposits and margin. It looks like your cause is tracking ahead. I suspect Q2, if you want to engage in my comments, I suspect Q2 is probably at a pretty good start on wealth deposits as well. So I guess I'm wondering why you're keeping the guidance so conservative for this year, or is it just because you want to focus more on the medium term in a few weeks in May? And then I guess secondly, and I suspect you'll touch on this in May as well, how do you think about, because you now have a return of loan demand in the footprint that's driving asset growth, but it's also driving some RWA growth on the credit side, obviously. How do you think about the RWA density of the group going forward? Should we expect this to continue to improve, or do you think that now that loan demand seems to be coming back, that that's a nice profitable activity to continue to drive growth for you? Thanks.