Full Year 2021 Standard Chartered PLC Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Martin Leitgeb - Goldman Sachs Group, Inc., Research Division - Analyst : Could I have the first one, please, on NII? And with the prospects of Fed funds rate hike in March in a month's time, I was just wondering if you could help us understand the phasing of the beneficial impact of the rate hike on your P&L. And I guess, this is really related to 2 sub-topics. One is the HIBOR transmission. I think historically, there has been a 1 or 2 quarter delay in HIBOR rates picking up. And secondly, the absence of major structural hedging. How quickly would you expect to see the majority of the benefit of the rate hikes in the U.S. come through in the P&L? Could we already see a big chunk coming through in the second quarter, so with the July reporting date? And maybe related to the question, if you could update us on how we hedge notional lease now and what the potential total scope for the hedge notional lease going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 17, 2022 / 8:00AM, STAN.L - Full Year 2021 Standard Chartered PLC Earnings Call And the second question, I was just wondering in Korea, you made substantial progress with regards to improving returns since the restructuring started back in -- at the end of 2015. I think at some point, Korea has seen us providing strategic optionality if and when returns improve, which now appears to have happened. What are your objectives for Korea going forward? How strategic is it to the group? And do you see maybe some further opportunity arising within Korea with some of the competitors were branching there?

Question: Thomas Andrew John Rayner - Numis Securities Limited, Research Division - Analyst : I have a couple of questions, please. The first, just on the dividend. I think the final dividend of $0.09 was about $0.05 lower than consensus was looking for. I'm wondering if that might have something to do with the sort of disappointing share price reaction today. But obviously, there's a $750 million share buyback announced. I mean, are we looking forward going to be thinking about lower dividend payouts perhaps than we were offset by higher share buyback? So I guess it comes back to this sort of the mix of this $5 billion return over the next few years. So that's my first question. I have another on RWA optimization, please. I don't know if you want to take that first.

Question: Thomas Andrew John Rayner - Numis Securities Limited, Research Division - Analyst : Yes, please. Yes. That's very clear on the dividend. The $22 billion sort of reduction in CCIB, if we go back to sort of November 2015, I think you flagged back then $40 billion in what was then CIB. And by sort of late 2017, you'd already done about $30 billion of that $40 million in terms of optimizing, most of which I think was sort of reduced and exited. So obviously, things reversed -- progress-reversed since then, and then I guess a big part of that was the pandemic. But was there anything else sort of outside of the pandemic which caused that sort of positive momentum to sort of reverse? And how -- if there was, can we be confident that we're not going to see something else sort of crop up that prevents the $22 billion optimization that you're now flagging being fully achieved?

Question: Edward Hugo Anson Firth - Keefe, Bruyette & Woods Limited, Research Division - Analyst : I just had 2 questions. One was on costs. I get to what you're saying about the 2% jaws. But if we're looking at 2022 not over-the-top plan of the whole horizon, I think your 10.7% is about 4% cost growth, which I guess equates to 6% underlying revenue ex rate rises. So if we see that coming in lower this year, would -- does that 2% jaws thing still hold? Or would we -- do you expect this to come in under the 10.7%? I suppose that would be my first question. Should I ask my next question as well at the same time? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 17, 2022 / 8:00AM, STAN.L - Full Year 2021 Standard Chartered PLC Earnings Call

Question: Edward Hugo Anson Firth - Keefe, Bruyette & Woods Limited, Research Division - Analyst : Yes. And then the next question is, I'm just -- looking at your guidance around the margin, I mean, if I've got my math right, it looks like you're thinking about a margin of about 145 basis points or something like that in the sort of new world. That looks to be some way below where we were in 2019. 2019, you were more like 160 basis points. And I know there's been a little bit of a mix shift around unsecured, but that's like a 10% loss of NII over that period for a given average interest-earning assets. So I'm just trying to think what might have driven that? What might I be missing in terms of the gap there?

Question: Raul Sinha - JPMorgan Chase & Co, Research Division - Analyst : I've got 3 follow-ups, please, if that's okay. Two on the same issue, which is just your investment plan on the cost side on Slide 32, where you talked about the walk out to 2024. The first question really is a simple one. I'm just trying to understand, out of the $1.3 billion of efficiencies that you're realizing, it seems like a lot is coming from digitalization and tech and change. And then when we look at how much technology investment you're actually trying to do going forward, actually, technology investment seems like it's quite a small amount. So is it a fair conclusion that you're actually now reducing your technology spend in terms of investment dollars, given the sort of significant build-out that you put through on the digital banks in the last few years? That's the first one. The second one is just related to this investment slide. Obviously, we've made it very clear the plan doesn't just rely on rates going up. But given the volatility of rate expectations, I think there's going to be a fair degree of pushback on just assuming that the tailwind from interest rates completely materializes. So I guess the question is if, for whatever reason, the pickup from interest rates is less than you expect in your plan, is there any flex within the investment spend that would allow management to sort of adjust the returns profile going forward? I mean if that is, perhaps if you could talk to us about business strategic and other. And then just last one from my side, just on Hong Kong Wealth Management in Q1. Just given some of the trends on the ground there, are you seeing any weakness? Are you expecting Wealth to be weak in the first half of the year? And if you can comment on the outlook, that would be great. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 17, 2022 / 8:00AM, STAN.L - Full Year 2021 Standard Chartered PLC Earnings Call