Standard Chartered PLC

Good morning and good afternoon, everyone, and thank you for joining us. Before I get into the second quarter performance, I want to step back and touch on a few things we discussed at our investor event in May. It was great to host many of you in Hong Kong. I hope the energy from the presentations and the discussions resonated with you and was a reminder of the momentum in our franchise. Our message was clear. We built a bank capable of delivering durable returns by sharpening our strategy, improving the balance sheet, Investing in infrastructure and focusing on areas where we have real competitive advantage. And most importantly, we're now moving from durable returns into compounding growth. Our super connector model is hard to replicate and highly valued by clients. Our strategy is aligned to long-term structural growth drivers. We have clear and measurable plans for continuous improvement in our productivity. Together, this supports exceptional growth and sustainably higher returns. Manus and I will cover these points over the course of the presentation. All of this gives us confidence to maintain clear milestones, above 15% ROTE in 2028 and around 18% in 2030. They are the output of a strategy that is working and a franchise positioned to compound over time. Turning to the quarter, we delivered another strong performance. The business continued to perform well with momentum across areas where we have been investing. Our cross-border network, wealth, CIB, financial institutions, and increasingly capital-light client-led businesses. This resulted in a record first-half performance with earnings per share up 17% year-on-year. We're upgrading our 2026 guidance for income to be around the middle of our 5-7% growth range year-on-year. This reflects the confidence in our strategy, the momentum we're seeing across multiple areas, and the relevance of our business model in this evolving multipolar world. Our capital position remains strong. We're announcing a $1 billion share buyback and an interim dividend of 20.4 cents per share. We're continuing to invest to grow and returning surplus capital in a disciplined way to shareholders. Finally, we will remain watchful. The external environment is uncertain, but uncertainty reinforces the value of a bank that helps clients move money, manage risk, and deploy capital across complex markets. With that, I'll hand over to Manus to walk through the numbers in more detail. Thank you, Bill.

Good morning and good afternoon, everyone. In my remarks, I will be comparing the second quarter 2026 performance year on year at constant currency unless otherwise stated. The group delivered operating income of $5.7 billion, up 3% or up 8%, excluding the gain associated with the Solve transaction last year. This performance was supported by continued strong delivery in wealth solutions, global banking, and flow income in global markets. Expenses were broadly flat, or up 3% excluding notable items. Given the continued tension in the Middle East, we took $44 million of additional management overlays in the quarter. But even including these overlays, our loan loss rate was just 20 basis points this quarter. Profit from associates was lower, mainly due to the change in our approach to recognizing the group's share of Bohai's profit since Q4 2025. Put together, we delivered a profit before tax of $2.3 billion and a return on tangible equity of 17.9%. We closed the quarter with a net tangible asset value per share of $17.55, up 4% year on year. Now I'll talk you through the detail on each component. Net interest income was up 1% quarter on quarter. We saw a benefit from volume growth as well as an improvement in mix from a lower proportion of treasury assets. These were partially offset by rate and margin headwinds as well as the previously flagged WRB portfolio actions. We are upgrading our NII guidance for 2026. and we now expect it to increase by a low single digit percentage year on year at constant currency. When we compare the second half of 2026 versus the first half, we expect continued volume growth in our businesses as well as continued mixed benefits from a lower proportion of treasury assets. We expect these will be offset by a shift in deposit mix in WRB towards term deposits as rates rise and as we grow our affluent client franchise. Additionally, we expect to see a higher impact from WRB portfolio actions in the second half, and we continue to expect these actions to reduce NII by around 2% overall in 2026. Non-interest income remained resilient against the tough comparator in Q2 last year, where we had a $238 million gain relating to the Solve India transaction. If we exclude this, non-interest income was up 9% year on year. I will speak to the product drivers in more detail when I get to the business segments. Turning to operating expenses. Q2 expenses were broadly flat year on year, but up 3% excluding $74 million of a provision release relating to career equity link securities, which we classify as a notable item. Business growth and inflation in the quarter were largely offset by fit for growth savings and other efficiencies. On Fit for Growth, we've booked $128 million of cost to achieve, bringing the year-to-date spend to around $250 million, and we continue to be on track with the program. Based on the upgraded income target that Bill mentioned earlier, we expect 2026 expenses, excluding notable items, to be around $13.3 billion at constant currency. As a reminder, the phasing of our costs was uneven in 2025, with Q3 costs unusually low due to certain expenses being delayed into Q4. This year, we would expect a more even phasing of costs between Q3 and Q4. And as I said at our May investor event, we are moving into a process of continuous improvement, growing the top line each year, improving efficiency and returns as we become simpler, faster and more connected. Credit impairment for the quarter was $150 million. This includes an additional $44 million of management overlays in respect to the Middle East conflict, mainly for the petrochemical sector and potential sovereign downgrades. This brings the total management overlays in relation to the Middle East conflict to $234 million. CIB impairment was $39 million. reflecting incremental overlays partly offset by net recoveries in the rest of the portfolio. WRB recorded lower impairment in the quarter benefiting from continued portfolio optimisation actions. Our annualised loan loss rate for the first half of the year was 26 basis points and as we laid out in May we expected through the cycle loan loss rate of 30 to 35 basis points. There was around an $800 million increase in the Early Alerts portfolio in the quarter, largely from some sovereign-related names as a result of the Middle East conflict, while credit grade 12 and net stage 3 assets remained broadly stable. As we mentioned last quarter, our exposure to the Middle East remains around 6% of the group's exposures, with over 90% in CIB weighted to sovereigns and financial institutions, while WRB exposures are mostly secured. Our overall credit quality has remained resilient in a volatile environment and we will continue to monitor for potential impacts. Moving on to the balance sheet. We saw 2% underlying growth in customer loans and advances in the quarter, primarily driven by the strong momentum in global banking, while we also saw some increase from secured wealth lending and mortgages. On a year-to-date basis, underlying growth in customer loans and advances was 5.7%. Note this was higher than the growth in average interest earning assets, which was up around 1%, reflecting the continuing optimization of treasury assets, which we discussed at our May investor event. In customer deposits, we saw underlying growth of 2% in the quarter with increases across WRB and CIB. Risk-weighted assets were down $4.7 billion, or 2% quarter on quarter, which we expect to largely reverse in the second half of the year. The quarter on quarter reduction was due to a decrease in credit risk RWAs towards the end of the quarter, where asset growth was offset by lower counterparty credit risk and the impact of optimization. Market risk-weighted assets were also down $1.4 billion in the quarter. In the second half of 2026, we expect RWAs to include business growth and the annual increase in operational risk-weighted assets. As a reminder, We expect the day one Basel 3.1 impact to be broadly neutral post-management actions. Our CET1 ratio was 14.2%, driven by the robust amount of capital we generated in the quarter. And as Bill mentioned earlier, we are announcing a $1 billion share buyback and an interim dividend of 20.4 cents per share. Now, let's take a look at our business segments. WRB Q2 income was up 18% to $2.5 billion. Wealth Solutions delivered another record quarter with income of $1.1 billion, up 43% year-on-year. This was driven by a broad-based performance across geographies and products. We raised $15 billion of net new money, with $9 billion coming from wealth. Our first half net new money is equivalent to a 15% annualized growth in assets under management. Momentum in client acquisition also continued as we onboarded 76,000 new-to-bank affluent clients in the second quarter. We have not seen any material change in client behavior throughout the quarter. Overall, the first half wealth solutions income was exceptionally strong amidst buoyant equity market conditions. Whilst we remain very confident in the outlook for our wealth business, we would caution against annualising the pace of growth seen in the first half of 2026. Turning to CIB, Q2 income was $3.3 billion, up 2% year-on-year. Transaction services income was up 5%, benefiting from higher volumes and fees, with broad-based growth across payments and liquidity, security services and trade. We saw continued momentum in global banking in Q2 with income up 18% on the back of increased origination volumes and distribution activity. In global markets, flow income remained strong at 16% growth benefiting from the continued investments in technology and electronic platforms which drove improved FX performance. Episodic income was lower against a strong comparator in Q2 last year. Given the strong performance we've delivered in the first half of the year, we are upgrading our 2026 income guidance to be around the middle of the 5-7% growth range. Within that, we expect NII to be up by a low single-digit percentage. Based on the upgraded income outlook, we expect expenses excluding notable items to be around $13.3 billion. We are maintaining our guidance for return on tangible equity to be greater than 12% in 2026. With that, I'll hand you back to Bill to take you through some of our strategic highlights. Thank you. Thank you, Manus.

In the next few slides, I want to cover a few key elements of the strategic update we gave in May. As a reminder, we see structural trends that are playing to our strengths. While they heighten some risks, it's also creating exciting opportunities. These trends are coming through in our two major client businesses, WRB and CIB. I'd like also to touch on the digitization of money and what we're doing in that critical space. Let me start with the structural trends. We set these out at the full year and at the investor event because they remain central to how we think about the business. The emergence of a multipolar and multi-aligned world is increasing cross-border complexity. Digital transformation and the digitization of money are changing financial infrastructure and client expectations. The role of banks is evolving as capital increasingly moves between banks and non-banks. Wealth participation is rising, particularly in our footprint. And the transition economy continues to reshape capital allocation. For many institutions, these trends are disruptive. For us, they are also opportunities because they play directly to what we've been building for years. We have a network across dynamic markets and corridors that is hard to replicate. We originate, structure, and distribute assets, combining local insight and cross-border expertise. We're also building market leading capabilities in digital finance. The world is getting more complex. Our job is to make that complexity easier for clients to navigate and generate attractive and sustainable returns by doing so. Turning now to wealth and retail banking, WRB continues to be underpinned by structural wealth flows. We're seeing sustained growth in affluent net new money with around $84 billion achieved over the last six quarters against our $200 billion 2025 to 2028 target. This net new money is diversified with around two-thirds coming from international clients. Our wealth solutions income is also diversified. The 38% year-on-year growth in the first half was broad-based across clients, products, and markets. We saw double-digit income growth in high net worth international and domestic client groups, as well as across investment funds, capital markets, and bank assurance products. And reflective of our geographic diversity, we recorded double-digit wealth solutions income growth in 13 markets. We're also benefiting from deeper collaboration across the group, bringing together our wealth banking and markets capabilities to serve clients more holistically. This is helping us capture a greater share of client wallet and further improve the quality and resilience of our earnings. We've developed a recognized platform that's coveted by the world's most successful asset managers. This helps us attract, retain, and develop the best relationship managers in the market. Together with our ongoing investments in cutting-edge technology, we believe we're building the basis for continued strong momentum in our business. Turning now to corporate and investment banking, our transaction services, global banking, and global markets businesses continue to benefit from the same structural trends that underpin our broader strategy. As supply chains evolve, capital flows shift, and clients navigate a more complex and increasingly multipolar world, the value of our network continues to increase. Clients are looking for a partner that can connect markets, provide local expertise, and support increasingly sophisticated cross-border activity that plays directly to standard chartered strengths. We're seeing that reflected in the continued growth in network income, which is up 8% year-on-year in the first half, and our financial institutions business has generated higher returns on risk-weighted assets in the first half than the CIB average as we continue to focus on this client segment. More importantly, we're seeing strong client engagement across a growing number of corridors and products as clients adapt their supply chains, investment decisions and operating models. We're also seeing how geopolitical and market shifts are creating new opportunities for our network. In the Middle East, for example, issuers have increasingly turned to private capital solutions as public markets have become more challenging. Our ability to connect liquidity across regions and investor bases has allowed us to remain at the forefront of that activity, including maintaining our leadership in Sukuk and supporting clients as funding needs evolve. In 2026, banking has grown at a supernormal rate again, with the first half income up 19% year on year as we support corporate and FI clients. Our originate to distribute model continues to grow with origination and distribution volumes of 37% and 15% respectively, and the pipeline continues to be very robust. As a result, we're not just growing, we're continuing to improve the quality of the franchise with a greater proportion of income coming from network-led and higher returning activities where we have a clear competitive advantage. Turning to our digital asset capabilities, this is an area you've heard me talk about in previous quarters, and we continue to see significant growth in activity and client engagement. When we talk about digital assets, we're not talking about a separate business. We're talking about the next evolution in the financial infrastructure and how Standard Chartered remains at the center of global trade, payments and capital flows. Our approach is built around three areas. First, blockchain as an infrastructure, helping clients connect to new rails for issuance, settlement and payments alongside existing systems. Second, Banking the Digital Ecosystem, providing regulated banking, payments, liquidity, and risk management services as digital asset firms mature. And third, digital assets as an asset class, enabling clients to access, transact, and custody assets in a safe, regulated, institutional-grade environment. What ties this together is our role as a super connector. Clients come to us to move money, assets, and risks efficiently across markets, jurisdictions, and time zones. A good example is the first digitally traded intraday FX swap completed in the first half. The transaction was small, but the significance goes beyond a single trade. This demonstrated a pathway to faster settlement and a more efficient 24-7 financial system, practical innovation that can improve client outcomes and our own infrastructure. We've also seen material tokenized deposit growth in 2026 with around $11 billion monthly run rate. primarily from the ECNY cross-border settlements on Enbridge and our multi-currency work with various clients. The message is straightforward. We're investing in the infrastructure that will support the next generation of our cross-border trade, payments and investment flows, which we believe will allow us to consolidate our leading position in our markets. Bringing this together, we unveiled a new set of targets for 2028 at our investor event in May. We're targeting 5% to 7% income CAGR between 2025 and 2028, with a cost income ratio of around 57% in 2028. We expect loan loss rates through the cycle of 30 to 35 basis points and will continue to operate within our 13 to 14% CET1 range. This will lead to a high Keynes EPS CAGR through to 2028 alongside a greater than 15% ROT in 2028 and around 18% ROT in 2030. We remain committed to at least a 30% dividend payout ratio with a progressive dividend per share They're not isolated metrics. They are the output of a better bank, more client-led, more productive, more capital efficient, and more capable of compounding over time. And we have made a great start on this plan. So to conclude, we've delivered a strong performance in the first half. We're upgrading our 2026 income guidance. We're announcing a $1 billion share buyback and an interim dividend of 20.4 cents per share. Now, the bigger message. The strategy is working. The structural trends we've highlighted are resonating within our business. Our network is more valuable as the world becomes more complex. Wealth is benefiting from affluent flows. CIB is increasingly focused on higher returning network-led and FI-led activity. Digital assets position us for changing financial infrastructure and continuous improvement gives us a path to operating leverage and compounding growth. Of course, We remain alert to the more fragmented geopolitical environment, shifts in client activity, and the pace of technological change. Our task is to stay close to clients, adapt quickly, and continue executing against the opportunities where our network, capabilities, and international footprint give us a clear advantage. Lastly, I want to note that building on our Hong Kong event, we plan to host, over the course of the next 18 months or so, a series of network spotlight seminars. showcasing how our regional strength underpins our network advantage and create value for our clients and shareholders. With that, I'll hand over to the operator for Q&A.