Standard Chartered PLC Q3 2024 Earnings Call Transcript

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

Question: Grace Dargan - Barclays Investment Bank - Analyst : If I could ask two, please. Firstly, on the income growth in 2025, I guess the upgrade -- the updated guidance talking about below [5% to 7%], maybe you could just probe a little bit more on -- at least on current rate expectations, how far below and 5% to 7% you might be thinking. I think consensus has been around about 3% year on year. Is that kind of in the realm you be thinking about? And then secondly, another really strong quarter in wealth and highlighting the investment today, which I think you'll be scheduled will be over kind of 18 to 24 months. So I guess on the income guidance of growing double digit, how should we be thinking about the shape of that from here? Should we just be expecting that year on year? Is that phasing after the investment? Any help with that would be much appreciated. Thank you.

Question: Joseph Dickerson - Jefferies International Ltd. - Analyst : I just have two questions. When you look at the lower returning mass retail businesses and 3,000 reduction in CIB clients, I guess separately or together, how much, if any, is there an RoTE drag from these if that could be quantified? That would be very helpful. And then secondly, I note that your new-to-bank customers accelerated in the third quarter. Is that something that as you've seen over the month of October has continued? Do

Question: Joseph Dickerson - Jefferies International Ltd. - Analyst : Great. Can I just clarify my question on the mass retail businesses, with 3,000 reduction in the CIB corporate clients, wasn't that -- it was a necessarily a drag? But it is -- I presume those are lower ROE businesses than the rest of the ones you want to grow. And so I was just trying to see what the difference might be in the ROE, but I'm happy to trying to figure it out myself, probably. Is that the broader point? Is that as a point to be correct?

Question: Jason Napier - UBS - Analyst : Two quite straightforward ones, actually. The first is thanks for the increased out target. Can I just check, is there any necessity to caveat any of those sorts of guides around exit costs from reshaping disposals and so on? And then secondly, Diego, I think you more or less invited the question of unpacking the sort of position on revenue momentum in NII. So I don't want to you down the curve that you present as your weighted average hasn't really changed all that much. Perhaps you could talk about what you've done in sort of hedge dynamic reinvestment yields and loan growth into next year, please?

Question: Robin Down - HSBC - Analyst : I've got two questions if I may. Can I come back to the issue of kind of wealth management. I think you kind of slightly alluded to this a little bit earlier, but just how you're thinking about the seasonality in that business running into Q4? I mean, we normally expect to see a step down in kind of bancassurance and investment activity. But I'm just wondering whether you're perhaps kind of feeling slightly more optimistic about that, given the activity levels in October and the China stimulus? And then the second question is around -- I know Diego hates me asking about the capital return targets. But you've obviously revised that up to kind of $8 billion-plus. I'm conscious that consensus was already at kind of $8.4 billion. And you're telling us that Basel 3.1 is no longer going to have an impact, which I think kind of saves you about $1.5 billion of CET1. So I'm just trying to make sure that is there anything we're missing in terms of kind of capital dynamics as we run through kind of 2025? Does any of this kind of increased investment in wealth management, for instance, go into kind of intangibles, et cetera, that perhaps might have an impact on capital? Just how you're thinking about that would be great. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 8:00AM, STAN.L - Q3 2024 Standard Chartered PLC Earnings Call

Question: Nick Lord - Morgan Stanley - Analyst : It's just a question really back -- going back on to the retail restructuring. So a couple of questions there. First of all, in terms of that $1.5 billion that you're investing over the next five years, how much of that would sort of be revenue investment? And how much of that would be capital investment? The second question I have is just trying to understand sort of how you're thinking of phasing of RM hiring? What is the period of time it takes your RMs to become profitable after you've hired them? And then the third question is I'm just trying to understand a little bit better what this reshaping of the retail business means? Now I understand sort of selling a small loan book in India or whatever it might be. But obviously, you have quite large retail businesses in places like Singapore and Hong Kong and Malaysia. So what are you imagining that those businesses look like as you get to the end of this process? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 8:00AM, STAN.L - Q3 2024 Standard Chartered PLC Earnings Call

Question: Nick Lord - Morgan Stanley - Analyst : (inaudible), so like CapEx, CapEx as opposed to (multiple speakers) capital.

Question: Nick Lord - Morgan Stanley - Analyst : And I'm just trying to work out how we should think about that. So is that you build up to $1.5 billion over five years or that is --

Question: Nick Lord - Morgan Stanley - Analyst : It's a cumulative. So we're talking $300 million a year on average.

Question: Nick Lord - Morgan Stanley - Analyst : Probably pushed back into year two and three or something like that. Is that the way we should be thinking about it?

Question: Kunpeng Ma - China Securities Co., Ltd. - Analyst : It's Kunpeng Ma from China Securities. I got one question for Bill. As you mentioned just now that one of CIB's key strategy is to meet clients complex needs, right? So we're going to -- we have the US election going forward and maybe a lot of changes after that. So I guess a lot of much more complexity and much more volatility going forward. But I think sometimes volatility and complexity means business opportunities for that, right? So Bill, could you please give us some thoughts on how those complexities evolve going forward? And also what are the types of risks or opportunities for Standard Chartered going forward? Thank you.

Question: Jeremy HOU - CICC - Analyst : My first question is another question on the strategic update. I think they're sort of answered. But just to confirm, you talked about the reshaping mass retail business and exploring opportunities to sell some of them. So will you continue to actually some of the peripheral markets like what you have done over the years, or will you evaluate on some of the big but relatively underperforming retail markets, namely Indonesia, Korea? And second question is just a follow-up on the revenue. I think you mentioned that given the current interest rate outlook, it's more challenging to grow NII in 2025. But overall, do you think Standard Chartered top line will benefit from mildly lower interest rate in government? Thank you.

Question: Joseph Dickerson - Jefferies International Ltd. - Analyst : Yes, please.

Question: Perlie Mong - Bank of America - Analyst : Just one on NII and then one on Ventures. So on the NII, I guess this quarter, there's quite a large benefit from mix and others. So just can you unpack that a little bit? And how much mix improvement, et cetera, from sort of treasury operations can we expect next year? And I guess the other sort of related question is structural hedge. I mean, forgive me if I missed anything, but I don't think there's any update on the structural hedge. So I think previously, you've talked about continued wanting to build, but also denoting that one of your peers yesterday said that the days of materially building the hedge is sort of behind us. Is that the same for you? Or are you still begin to ramp up and to what extent can rate sensitivity reduce as a result of that? And then just noting, I'm possibly overreading this, but just noting that the cost-income ratio Jaws guidance is ex-notable items. So does that suggest that there is a risk of an all-in number not being -- not positive if the income environment proves to be a little bit more tricky. So that's -- sorry, it's a little bit of a few moving bits in the NII question. And then for Ventures, thank you for guidance of breaking even broadly speaking, in '26. So is that coming from income? Or is it more coming from cost? Because it looks to me, certainly in the last couple of years, it's about $200 million, $300 million income and maybe $400 million, $500 million of cost. So is it income going up? Or is it are you done on the cost investment side of things?