Q3 2019 Standard Chartered PLC Interim Management Statement 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 : It's Martin here from Goldman. Just two questions, please. And the first one, congratulations to the strong revenue print. And I'm just trying to scrap the guidance here in terms of strong performance in terms of revenues this quarter, but not only this quarter, also the first half of the year and a slightly more cautious tone in terms of outlook. And I was just wondering, looking at your prior guidance of a revenue growth of 5% to 7%, looking at prior comments on the benefits arising from legal entity restructuring and better use of excess deposits within the group, how shall we think of revenue progression from here? Is it fair to assume that this will be potentially towards the lower end of the prior range of 5% to 7%, just given rate and global growth? Or do you still see scope for this to be somewhere in the middle of that range? And connected to that, I was just wondering how the various risk guidance in Asia, whether that's Hong Kong, whether that's trade, impacts international banks such as Standard Chartered? Do you see any benefit from this arising from potentially less competition from local players and a beneficial impact on margin? Or is this a situation just difficult for everyone? And the second question, just briefly on capital. You mentioned in the release a net increase in requirement of around 20 basis points. And I was just wondering whether that impacts to any degree your 13% to 14% range. I think previously, language was that you expect to be well within that range. And I was just wondering whether that's still the case or whether there's a little bit of upward pressure there.

Question: Jennifer Alexandra Cook - Exane BNP Paribas, Research Division - Analyst : I've got one question on leverage, please. Your U.K. leverage ratio came in at 5.1% in Q3, which continues the downward trend that we've seen so far this year. I'm not calling out the absolute level of the ratios. I appreciate you're still operating a significant buffer to your minimum requirements. But the scale of the relative move in a pretty short period of time, so down 70 bps in 12 months, seems quite large for a leverage ratio. I was wondering if you could talk through the drivers behind this move because there does seem to be quite a bit growth in the repo book. I know U.K. leverage exposure is up 10% so far this year. And if you do continue to chase volume growth and we continue to see this pace of erosion, just how low would you be prepared to take the leverage ratio, particularly in [like] Q4 and the U.K. spot leverage ratio as a starting point for the year, if you can address that?

Question: Jennifer Alexandra Cook - Exane BNP Paribas, Research Division - Analyst : Okay. But is there a level at which you would kind of pause on the growth? Or are you happy for that to continue falling at this kind of pace?

Question: Thomas Andrew John Rayner - Numis Securities Limited, Research Division - Analyst : Just on the equity Tier 1 ratio, the RWAs came in a bit lower. I know earnings are obviously clearly better than consensus today. So we might have expected a slightly stronger equity Tier 1 ratio. And I understand there's an FX issue. I also understand that there's an issue around the accrual for the foreseeable dividend. I just wondered if you could explain those 2 drivers in a bit more detail for us, please.

Question: Thomas Andrew John Rayner - Numis Securities Limited, Research Division - Analyst : So going forward, we might -- the policy might change to sort of smooth the accrual more across the areas? Do I understand that correctly?

Question: Thomas Andrew John Rayner - Numis Securities Limited, Research Division - Analyst : Okay. And there's no other impact, there's no other third item beyond the FX...

Question: Edward Hugo Anson Firth - Keefe, Bruyette & Woods Limited, Research Division - Analyst : Could I just ask you back again, I guess, on revenue? I mean I was just looking at growth expectations for Asia. And at the start of this year, Hong Kong growth expectations were up for about 2.5%. I think Singapore was about the same. We're now running at somewhere around 50 bps. So that's like a 2% loss of economic growth at 2 of your biggest markets. And yet your revenue is still 8% growth. So I guess my question is when you look what you were thinking when you set the plan relative to what's being delivered now, when you actually in your mind think you're going to deliver like 14% or 15% revenue growth, and actually you've come in at 8%, which you had like a nice, big buffer? Or have you found that certain core parts of the business are disappointing and you've been able to make that up elsewhere? And could you give us some sort of flavor of what that makeup is and how that's changed? Because it seems difficult to believe you would've seen that sort of slow down in expectations for economic growth and it to have had no impact on your business at all.

Question: Edward Hugo Anson Firth - Keefe, Bruyette & Woods Limited, Research Division - Analyst : Okay. And actually, if we sort of roll out over the next 2 couple of years, I mean is that the source of your sort of very lightweight warning over the 10%, that just a question of whether that mix change is sustainable? Is that where your uncertainty comes from?