Standard Chartered PLC

Good morning and good afternoon everyone. Thank you for joining us today. I'm here in London and Bill is dialling in from Dubai and will join me for Q&A. I'll take you through our third quarter results before we move to questions. Unless otherwise stated, my comparisons will be year on year at constant currency and I'll highlight notable items where relevant. We delivered a record third quarter performance with income increasing 14% and profit before tax growing 29%. Growth was broad-based with wealth solutions and global markets both delivering double-digit income growth alongside further momentum in global banking and transaction services. These results are another demonstration of how our strategy is translating into sustainably higher returns. The combination of income growth, operating leverage and capital return continues to drive strong compounding growth in earnings per share with year-to-date EPS up 27%. Thank you for watching. Operating income was $5.8 billion, up 14%. Net interest income increased by 9% year on year, while non-interest income grew 19% and accounted for around half the group income. Expenses were up 9% against a low comparator. And with income growth significantly ahead of expense growth, pre-provision operating profit increased by 22% to $2.4 billion. Credit impairment was only $90 million including a net charge of $34 million from overlays relating to the Middle East conflict Our tangible net asset value per share was up 2% to $17.26 Looking more closely now at the drivers. Net interest income grew 3% quarter on quarter to just under $3 billion. NII growth was driven by volumes as we continued to grow customer lending in the quarter. The rates and margin impact was broadly neutral quarter on quarter as the early benefit from rate rises was offset by margin pressure on term deposits. With NII up 6% year to date, we're upgrading our full year NII growth guidance to around 4%. For the remainder of the year, we expect these trends to continue. Rate benefits will be offset by mixed changes, as well as further margin compression in term deposits and the continued headwind from WRB portfolio exits. We also expect volume growth to moderate versus Q3. It was another strong quarter for non-interest income, which increased by 19% year on year to $2.8 billion. I'll discuss the key business drivers in more detail on the segment slides. Thank you for watching. We are now moving to a cost income ratio approach when guiding on costs consistent with our 2028 targets. As such, for the full year 2026, we now expect a cost income ratio excluding notable items of around 60%, a 300 basis point improvement on 2025 and a meaningful step towards our target of around 57% in 2028. Credit quality remained resilient, benefiting from our ongoing de-risking of the balance sheet, with impairment of $90 million this quarter. Given the continuing conflict in the Middle East, we took a net charge of $34 million of overlays during the quarter. This included a new $63 million overlay to reflect the impact of an expanded scenario on broader sectors that are impacted by the Middle East conflict and higher oil prices. This was offset by $29 million of releases, mainly in the petrochemical sector and sovereigns due to portfolio moves. Despite these overlays, CIB recorded a net recovery of $24 million, with portfolio upgrades and repayments more than offsetting the additional provisions. WRB impairment was $114 million, broadly unchanged quarter on quarter, reflecting continued credit discipline across the portfolio. Thank you for watching. Moving to the balance sheet. Underlying customer loans and advances increased by 4% during the quarter. In WRB, this reflected higher mortgage demand and strong growth in secured wealth lending, including inflows relating to the FCNR scheme for non-resident Indians, which drove about half of the growth in WRB this quarter. CIB growth came largely from global banking as well as trade. Thank you for watching. Turning to capital, risk-weighted assets increased by $1.8 billion during the quarter to $263 billion. Asset growth and mix was partially offset by a reduction in market risk RWAs and improvement in asset quality. Looking ahead, we now expect Basel 3.1 to lead to an increase in risk-weighted assets on 1 January 2027, net of management actions, which were underway in Q3 and will continue in Q4. This revised expectation of the Basel 3.1 impact reflects the changing shape of our balance sheet and the finalisation of rule interpretations. Given these factors, our current expectation is for 1 January 2027 RWA to be around $275 billion, inclusive of the usual operational risk RWA increase in Q4. The Basel 3.1 RWA impact will be spread across both CIB and WRB. Our CET1 ratio was 13.8% at the end of the quarter, excluding the 38 basis point impact of the $1 billion share buyback announced at Q2, the ratio was broadly unchanged quarter on quarter. We will benefit from a further 30 basis point reduction in our CET1 Pillar 2A requirement from 1 January 2027, which partly reflects Basel 3.1 implementation. Together with the 20 basis point reduction we received in Q3 2025, this will lead to a cumulative decrease of around 50 basis points in our minimum CET1 requirement since last year. This will take our CET1 requirement to around 10%. Thank you for listening. Turning now to the businesses. WRB delivered another excellent quarter, with income increasing 10% to $2.5 billion. Wealth Solutions income grew 26% to $1.1 billion, marking our third consecutive quarter above $1 billion. Investment Products and Bank Assurance income increased 28% and 18% respectively. Deposits and Mortgages income declined by 1%. Credit cards, personal loans and other unsecured lending income fell by 13%, reflecting continued portfolio optimisation. Expenses were up 8%, reflecting ongoing investment in the affluent business. We delivered record net new money of $20 billion including around $5 billion of deposit inflows from the FCNR scheme for non-resident Indians which has now closed. This brings our year-to-date net new money to $52 billion. Assets under management were broadly stable at $472 billion. This includes the impact of client mandate changes from wealth AUM to assets under custody, which broadly offset the strong net new money performance. We continued to onboard affluent clients at a strong pace, with 76,000 new-to-bank affluent clients during the quarter. Overall, these results demonstrate the continued strength of our affluent proposition and our ability to attract new clients. CIB performance was also strong in the quarter, with income increasing 16% to $3.4 billion. Transaction services income was up 9%, driven by pricing discipline in our payments and liquidity products, as well as volume growth and further mandate wins in securities and prime services. Global banking income was up 7% against a strong comparator in Q3 2025. This was driven by momentum in lending and financing solutions with resilient origination volumes. Global markets had a strong quarter with income up 21% driven by broad-based growth across products. Flow income increased 21% reflecting sustained momentum in client activity and cross-selling and the continued benefit of our investment in electronic platforms. Expenses increased by 8%, significantly below income growth. Including the net recovery mentioned earlier, CIB profit before tax increased 38% to $1.6 billion. So, moving to our updated guidance. Performance has been strong year-to-date, with income growth above our target 5-7% range. The breadth, quality and consistency of that performance gives us the confidence to upgrade our full year guidance. We now expect NII growth of around 4% and total income growth above the 5-7% range at constant currency and excluding notable items. We expect a cost income ratio excluding notable items of approximately 60%, representing a significant improvement on 2025 and demonstrating continued positive operating leverage across the business. We remain well on track to deliver a cost income ratio of around 57% in 2028. We are continuing to balance the investment priorities of the business against the significant revenue opportunities we see in the franchise. and we are upgrading our ROTI guidance to around 14%, reflecting continued progress from the 11.9% we achieved in 2025. And as you can see, our performance this quarter shouldn't be seen in isolation. It builds on our recent momentum and execution. We have shown ongoing improvement in earnings per share over the last six years and we're not done yet. We remain confident in delivering our high teens EPS CAGR target for 2028. So to conclude, our results demonstrate once again that our strategy is working and we continue to deliver sustainably higher returns. That momentum gives us confidence not only in our upgraded guidance for 2026, but also in our ability to deliver on our medium term framework. and looking ahead we'll be hosting a webinar in early December showcasing our Singapore and ASEAN businesses and their contribution to group strategy and performance. Further details will be available on our website in the coming weeks. Thank you and with that I'll hand over to Bill for some remarks before we take your questions.

That's great Manus, thanks very much for the summary. I just want to take a bit of a step back and reflect a little bit on the quarter but in the context of the past few years and then obviously looking forward to the next few years. And obviously, the results are strong, and we're very happy with those. But more than the numbers themselves, which, of course, in and of themselves we're quite satisfied with, it's the consistency with which we're delivering numbers, and it's the quality that's coming through pretty much in every line. So it's each of the client segments, each of the products, each of the regions is generating progress in what to us is a very satisfactory way. Probably most encouraged by the fact that with each step forward that we take on the path to this 18% or so ROTE by 2030, our confidence is built based on the success that we generated. So we've had a very deliberate investment program over the past several years. You've been indulgent of that investment program because not all of them paid off in the short term, but they're all paying off now. So the investments that we made across wealth, both technology and relationship managers, breadth of products and quality of advice. Thank you for joining us. Investments that we have continued to make in transaction services in terms of being at the cutting edge of payments, trade, security services in our markets are paying off. So quality is good, the diversification is good, the balance sheet has remained strong, and we are steadily cracking away at the productivity challenges that we know we have. We talked about compounding back in May, and we think that we put the basic foundations in place to compound for a consistent period of time from here, obviously helped by good structural tailwinds in terms of the themes against which we're operating. We talked about those in some detail back in May. That all said, we're keeping a very keen eye on the many challenges that we face as well. Most obvious are the geopolitical challenges. They're real, they're consequential, and they're certainly not resolved as yet. We can be hopeful of decent resolution, in particular in the region which I sit right now in the Middle East, but we know that we're all watching this one extremely carefully. We've seen bits and pieces of strain emerging in different financing markets. While this hasn't impacted us, and I don't think they will, they're a sign that there are elements of indigestion in the system. and that indigestion obviously can turn into something a little bit more painful. Very, very aware of that, managing those risks extremely carefully. But the combination of things, of course, could impact volumes at some period of time. And while we're very reassured that we demonstrated strong resilience through different crises or challenges in the market, we're acutely aware that the challenges that we face right now are real. And no doubt we can talk about that. Continue to focus on risk management. We're not going to screw up a really good set of progress strategically and financially by taking our eye off the ball from a risk perspective. We are going to continue to invest in these core strengths that we have, and that gives us very strong guidance that we're on the right track. It's a very strong confidence, I should say, that we're on the right track to deliver our 2028 and 2030 ambitions as we have set them out. So with that, operator, we can take the first question and take as much time as you like on that.

Yes, of course. Dear participants, just a quick reminder, if you would like to ask a question, please press star 1 1 on your telephone keypad and wait for a name to be announced. Alternatively, you can submit your questions via the webcast. And now we're going to take our first question on audio line. And it comes line of Joseph Dickerson from Jefferies. Your line is open. Please ask your question.